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Leyou Technologies Holdings Limited

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Leyou Technologies Holdings Limited THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect about this circular, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in LEYOU TECHNOLOGIES HOLDINGS LIMITED, you should at once hand this circular and proxy form enclosed in this document to the purchaser or transferee or to the bank or stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee. Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular. LEYOU TECHNOLOGIES HOLDINGSLIMITED 樂遊科技控股有限公司 (Incorporatedinthe CaymanIslands withlimited liability) (Stock Code: 1089) RATIFICATION OF GRANT OF EXCESS OPTIONS AND NOTICE OF EXTRAORDINARY GENERAL MEETING Capitalised terms used in this cover shall have the same meanings as those defined in the section headed “Definitions” in this circular, unless the context requires otherwise. A letter from the Board is set out on pages 4 to 15 of this circular. A notice convening the extraordinary general meeting (the “EGM”) of Leyou Technologies Holdings Limited to be held at Room 2, United Conference Centre, 10/F., United Centre, 95 Queensway, Admiralty, Hong Kong, on Monday, 16 December 2019 at 10:00 a.m. (Hong Kong time) is set out on pages 16 to 18 of this circular. A form of proxy for use by the shareholders of the Company at the EGM is enclosed herein. Whether or not you are able to attend the EGM, please complete the accompanying form of proxy in accordance with the instructions printed on the form and return it to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for holding the EGM (i.e. not later than Saturday, 14 December 2019 at 10:00 a.m. (Hong Kong time)) or any adjournment of such meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment of such meeting should you so wish. 27 November 2019 CONTENTS Page Definitions ............................................................... 1 Letter from the Board...................................................... 4 Notice of EGM............................................................ 16 – i – DEFINITIONS In this circular, unless the context otherwise requires, the following expressions shall have the meanings set out below: “Announcements” collectively, the announcements of the Company dated 2 May 2019, 20 May 2019 and 5 June 2019 “associate(s)” has the meaning ascribed to it under the Listing Rules “Athlon Games” Athlon Games, Inc., a subsidiary of the Company incorporated in the US “Board” the board of Directors “close associate(s)” has the meaning ascribed to it under the Listing Rules “Company” Leyou Technologies Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Stock Exchange (stock code: 1089) “core connected person(s)” has the meaning ascribed to it under the Listing Rules “Digital Extremes” Digital Extremes Ltd, an indirect 97%-owned subsidiary of the Company incorporated in Canada “Director(s)” the director(s) of the Company from time to time “EGM” the extraordinary general meeting of the Company to be held at Room 2, United Conference Centre, 10/F., United Centre, 95 Queensway, Admiralty, Hong Kong on Monday, 16 December 2019 at 10:00 a.m. (Hong Kong time) or any adjournment thereof for the purpose of considering and, if thought fit, approving the resolution proposed in the notice of the EGM – 1 – DEFINITIONS “Excess Options” 125,089,021 Share Options outstanding as at the Latest Practicable Date which were in excess of the Scheme Mandate Limit and part of the Share Options granted on 2 May 2019 and all of the Share Options granted on 20 May 2019 and 5 June 2019 “Group” the Company and its subsidiaries “Guangzhou Radiance” Guangzhou Radiance Software Technology Co. Ltd* （廣州榮端軟件科技有限公司）, a 51%-owned subsidiary of the Company established in the PRC “HK$” Hong Kong dollar, the lawful currency of Hong Kong “Hong Kong” the Hong Kong Special Administrative Region of the PRC “King Maker” King Maker (Beijing) Technology Co., Ltd, an indirect wholly-owned subsidiary of the Company established in the PRC “Latest Practicable Date” 25 November 2019, being the latest practicable date for ascertaining certain information contained herein prior to the printing of this circular “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange as amended from time to time “PRC” the People’s Republic of China, which for the purposes of this circular, excludes Hong Kong, the Macau Special Administrative Region and Taiwan “Scheme Mandate Limit” the maximum number of Shares which may be issued upon exercise of all share options granted or to be granted under the Share Option Scheme which shall not in aggregate exceed 10% of the Shares in issue as at 25 August 2017 “Share(s)” ordinary share(s) of HK$0.10 each in the share capital of the Company “Shareholder(s)” holder(s) of the Share(s) – 2 – DEFINITIONS “Share Option(s)” an option to subscribe for Shares granted pursuant to the Share Option Scheme “Share Option Scheme” the share option scheme adopted by the Company on 25 August 2017 “Stock Exchange” The Stock Exchange of Hong Kong Limited “substantial shareholder(s)” has the meaning ascribed to it under the Listing Rules “US” the United States of America “%” per cent. * For identification purposes only – 3 – LETTER FROM THE BOARD LEYOU TECHNOLOGIES HOLDINGSLIMITED 樂遊科技控股有限公司 (Incorporatedinthe CaymanIslands withlimited liability) (Stock Code: 1089) Executive Directors: Registered office: Mr. Xu Yiran (Chairman and Chief Executive Officer) Cricket Square Mr. Li Yang (Deputy Chairman) Hutchins Drive Mr. Gu Zhenghao P.O. Box 2681 Mr. Cao Bo Grand Cayman, KY1-1111 Cayman Islands Non-executive Director: Mr. Eric Todd Principal place of business in Hong Kong: Independent non-executive Directors: Suite 3201, Tower Two Mr. Hu Chung Ming Lippo Centre Mr. Chan Chi Yuen 89 Queensway Mr. Kwan Ngai Kit Admiralty Hong Kong 27 November 2019 To the Shareholders Dear Sir/Madam, RATIFICATION OF GRANT OF EXCESS OPTIONS AND NOTICE OF EXTRAORDINARY GENERAL MEETING I. INTRODUCTION The purpose of this circular is to provide the Shareholders with (i) information regarding the resolution to be proposed at the EGM to approve, confirm and ratify the grant of the Excess Options and (ii) notice of the EGM. – 4 – LETTER FROM THE BOARD II. RATIFICATION OF GRANT OF EXCESS OPTIONS Introduction Reference is made to the following announcements of the Company: (i) the announcement dated 2 May 2019, whereby the Board announced that the Company had granted 138,300,000 Share Options to grantees; (ii) the announcement dated 20 May 2019, whereby the Board announced that the Company had granted 13,679,884 Share Options to grantees; and (iii) the announcement dated 5 June 2019, whereby the Board announced that the Company had granted 2,500,000 Share Options to grantees. Details of the Share Options as disclosed in the Announcements are reproduced below: A. Share Options granted on 2 May 2019 Date of grant: 2 May 2019 Number of Share 138,300,000 Share Options (each Share Option shall Options granted: entitle the holder to subscribe for one Share) Validity period of the The Share Options are exercisable within a period Share Options: of 42 months from the date of grant, subject to the vesting schedule – 5 – LETTER FROM THE BOARD Vesting period of the The vesting schedule of the Share Options and the Share Options and exercise price per Share are as follows: exercise price per Share: Number of Exercise Earliest Share Options price per Tranche vesting date to be vested Share (Note) First 2 May 2020 46,099,987 HK$2.5 Second 2 May 2021 46,099,987 HK$2.8 Third 2 May 2022 46,100,026 HK$3.1 Total: 138,300,000 Note: Unless otherwise waived by the Board, the vesting of the Share Options, and the number of Share Options to be vested, on each of the above earliest vesting dates, are conditional upon the achievement by the grantee of certain performance targets. Share Options which do not vest on the earliest vesting date of a tranche may still vest on the vesting date(s) of subsequent tranche(s) if certain performance targets are achieved by the grantee. Market price of the HK$2.32 per Share Shares on the date of grant: Exercise price of the The lowest exercise price of HK$2.5 per Share, is Share Options: higher than the highest of (i) the closing price of HK$2.32 per Share as stated in the Stock Exchange’s daily quotations sheet on the date of grant; (ii) the average closing price of HK$2.284 per Share as stated in the Stock Exchange’s daily quotations sheets for the five business days immediately preceding the date of grant; and (iii) the nominal value of HK$0.1 of each Share. – 6 – LETTER FROM THE BOARD B. Share Options granted on 20 May 2019 Date of grant: 20 May 2019 Number of Share 13,679,884 (each Share Option
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