Company Holidays for 2001

PACIFIC CENTURY CYBERWORKS LIMITED SHARE OPTION SCHEME FOR EMPLOYEES

Questions and Answers The questions and answers serve to explain briefly the purpose and essential features of the grant of Options under the Share Option Scheme for Employees (the "Scheme") of Pacific Century CyberWorks Limited (the "Company") to be made to Eligible Employees of the Company in October 2000.

The current offer of Options under the Scheme will be governed by the current Rules of the Scheme. However, it is intended to seek the approval of the Company's shareholders to certain amendments to the Rules of the Scheme. If these amendments are approved by the shareholders, it is expected that the amended Rules will apply to Options which are granted in the current round, as well as to any previously issued Options under the Scheme. These Questions and Answers are intended to enable you to gain a better understanding of the operation of the Scheme.It is, however, only a summary for your information. If there is any difference between the information in this questions and answers and the Scheme rules, the Rules of the Scheme shall prevail.

The Scheme

1. What is the objective of the Scheme? The objective of the Scheme is to: - Attract and retain global talent - Drive creation of shareholder value - Foster ownership and entrepreneurial culture amongst employees

2. What is an Option under the Scheme? An Option under the Scheme is a right of the holder of that Option to subscribe at any time during the Option Period (as explained in Question 15) for up to a specified number of shares in the Company at a specified Exercise Price.

3. Who is eligible for Option grants? Subject to the exceptions summarized in Question 4 below, the following full-time employees of the Pacific Century CyberWorks Group are eligible to participate in the Scheme: (a) Employees of companies within the Cable & Wireless HKT Group as at 30 September 2000; (b) Employees of the Company or its Subsidiaries hired in September 2000; and (c) Contract staff with at least one year service and with contract end date after 31December 2000 as at 30 September 2000. These employees are called "Eligible Employees".

4. Are any employees excluded from the Scheme? YES. If you are not one of the persons listed in paragraphs (a), (b) or (c) in Question 3, you will not be eligible to participate in the Scheme. You will also be excluded from the Scheme if: (a) you do not accept the grant of Option when offered; (b) your employment has been or will be terminated by yourself or by the Company (or any Subsidiary of the Company by which you are employed) pursuant to any notice given on or before the grant of Option (see Note below); (c) your employment contract with the Company (or any Subsidiary of the Company by which you are employed) will terminate before the grant of Option (see Note below); (d) you are scheduled to retire from full-time employment with the Company (or any Subsidiary of the Company by which you are employed) on or before 30 September 2001 (see Note below); (e) you are a Temporary / Part-time employee; (f) you are an employee of any offices located in PRC under a local contract; (g) you are an employee of joint venture companies (excluding Telstra JV). Note: Sub-paragraphs (b) and (c) above do not apply if your current employment is terminated solely in order to transfer your employment from Pacific Century CyberWorks Limited to a Subsidiary of the Company (and vice versa).

5. Am I eligible to join the Scheme if I am going to join one of the Joint Venture Companies with Telstra? Yes, you are eligible to join the Scheme. However, your continued eligibility under the Scheme will be subject to review if the individual JV Company establishes its own share option scheme for employees.

Offer of Option

6. What is the effect of being granted an Option? If the Option granted under the Scheme is accepted, you the optionholder will be entitled to subscribe for the Company's shares at a price which is equal to the Exercise Price and will be free to deal with the shares so subscribed as you think fit. The Hong Kong Stock Exchange has already approved the listing of and permission to deal in any new shares to be issued by the Company upon the exercise of Options.

7. What documents will I receive when my Option is granted? You will first receive an Offer Letter granting you an Option to purchase Option Shares and a basic summary of the Scheme rules. The Board of Directors of the Company will formally grant the Options to Eligible Employees who have accepted the offer of Options by the Acceptance Date. A Grant Letter will then be issued advising you of the number of Option Shares to which you are entitled.

8. How does the Company determine the total number of Option Shares to be granted? The total number of Option Shares to be granted will be determined by the Board. However, the maximum number of the Company's shares in respect of which Options may be granted under the Scheme is limited to 10% of the issued share capital of the Company from time to time.

9. How to determine the number of Option Shares to be granted to individual Eligible Employees? The number of Option Shares to be granted to individual Eligible Employees will be based on their Global Broadband as well as their performance and contribution to the Group. The Base Option Grant for Eligible Employees are based on their Global Broadband as listed below: Global Broadband No. of Base Options Grant 1 3,800 2 8,800 3 28,000 4 28,000

10. How is an offer of a grant of Option accepted? An Eligible Employee who accepts a grant of Option must return the following items to Human Resources at TTW15 by the Acceptance Date (Please mark "HR - Share Option" on the envelope): - tick the relevant box and complete the Option Choice Form; AND - a crossed check for HK$1.00 made payable to the "Pacific Century Cyberworks Limited" irrespective of the number of Option Shares accepted. Please mark your staff number and name at the back of the check.

The Option Accelerator Program

11. What are the implications of choosing to join the Option Accelerator Program? If you choose to join the Option Accelerator Program, an Option Accelerator will be applied to the number of Option Shares granted to you on the condition that your total guaranteed cash (Salary* and Housing & Passage Benefits, if any) will be discounted by the specified percentage with effect from 1 January 2001. Upon promotion to the next higher career step under the Career Progression Plan, your total guaranteed cash will be reviewed. For staff on Pacific Century CyberWorks Retirement Scheme (Schemes 1-8), your Scheme Salary for the calculation of Retirement Benefits will remain unchanged. In future, should there be any review of your Basic Salary, your Scheme Salary will remain unchanged until your Basic Salary catches up with your Scheme Salary. For staff on MPF scheme, the revised Salary* will be used for the determination of MPF Salary for the calculation of Employer and Employee contribution. *Basic Salary or Guaranteed Pay as appropriate

12. Can you give me an example of how my Option Shares will be increased if I consider the Option Accelerator Program? Assume that - Option Shares granted to you is 8,800 under Choice A - You are a member of PCCW Retirement Scheme - Scheme 7 - Your Basic Salary is HK$22,000 per month, Housing & Passage Benefits is HK$1,500 per month. In choosing Choice B, the following will apply: - The number of Option Shares you receive will be accelerated by a multiplier of 2.5, i.e. you will receive 22,000 Option Shares; - A 10% discount in your present Basic Salary and Housing & Passage Benefits will apply. Your new Basic Salary will be HK$19,800 per month and your new Housing & Passage Benefits will be HK$1,350 per month; - The Scheme Salary of your retirement benefits will remain at HK$22,000

Exercise of Option

13. What is meant by exercising an Option? An Option is exercised when the optionholder elects to acquire from the Company any of the Company's shares in respect of the Option granted.

14. What is the Exercise Price of the Option Shares? The Exercise Price of the shares under each Option will be the average of the closing prices of the Company's shares on the Hong Kong Stock Exchange for the five trading days immediately prior to the Offer Date, and this price is discounted by 20%. For example Offer Date is 27 October 2000 Closing Price for the 5 trading days prior to Offer Date: 19 October 2000 HK$ 6.25 per share 20 October 2000 HK$ 6.50 per share 24 October 2000 HK$ 5.75 per share 25 October 2000 HK$ 5.90 per share 26 October 2000 HK$ 6.05 per share Average closing price = HK$6.09 per share Exercise Price = HK$4.872 per share

15. When can an Option be exercised? The Option granted will vest in three annual installments with the earliest exercise date taking place 12 months after the Offer Date specified in the Offer Letter. The vested portion of the Option can be exercised at any time until 10 years after the Offer Date. For example, assume an Option for 3,800 shares is offered on 27 October 2000 to an employee, exercisable over three years starting 12 months from the Offer Date with an Option Period of 10 years, the Option that can be exercised by the employee to obtain shares in the Company are: Option Shares Option Period (both dates inclusive) 1,266 shares From 27 October 2001 to 26 October 2010 1,267 shares From 27 October 2002 to 26 October 2010 1,267 shares From 27 October 2003 to 26 October 2010 However, no Options can be exercised within a period of one month preceding the announcement of the interim and final results of the Company or at any time when the optionholder is in possession of any unpublished price-sensitive information in relation to the Company. It should be noted that there is no obligation on the part of the optionholders to exercise their Options. However, if any Option is not exercised by the end of the Option Period (usually 10 years from the Offer Date), it will lapse and can no longer be exercised.

16. How can I exercise an Option? You should return a completed Notice of Exercise together with payment for the aggregate Exercise Price for the number of the Company's shares in respect of which the Option is exercised. The Company will allot the number of shares exercised, credited as fully paid, and issue one or more share certificate(s) to you within 21 days of receipt of your Notice of Exercise. Details will be advised in due course.

17. Can I exercise my vested portion of the Option partially? Yes. You can exercise your vested portion of the Option in whole or in part, but the Option Shares to be acquired must be in multiples of 1,000 shares unless you are exercising the Option to the full extent outstanding.

Lapse of Option 18. Under what circumstances will I lose the right to exercise my Option? Generally, under the current Rules, you will lose the right to exercise your Option if: (a) you do not return the properly completed Option Choice Form to Human Resources by the Acceptance Date; (b) your employment is terminated by the Company or any Subsidiary; (c) you voluntarily leave the employment of the Company or any Subsidiary; (d) your employment is terminated within 12 months of the Commencement Date (including death); (e) your Option is not exercised during the Option Period. Subject to the terms of the Scheme, the vested Options granted to employees who leave the employment of the Company as a result of redundancy, normal retirement, death, sickness or disability or sale or winding up of the Company, will continue to be exercisable and will not lapse until one month after the last date of service.

19. What happens to my Option in case of retirement or death? In the event of you the optionholder ceasing to be an employee of the Group by reason of retirement (not being early retirement) or death, then you or your legal personal representative(s) may exercise the vested portion of your Option (to the extent not already exercised) within the period of 1 month following the date of such cessation; otherwise Question 15 above applies. In case of early retirement, Question 15 above also applies. Others

20. Can an Eligible Employee opt out of the Scheme? All Eligible Employees can decline their right to participate in the Scheme before Options are granted in writing to Human Resources. Those who do not return properly completed Option Choice Form or the consideration will be regarded as not having accepted the grant. After the Options are granted, any Eligible Employee can still opt out of the Scheme. If you wish to do this, you should obtain an opt-out letter, sign it in the presence of a witness and return it to Human Resources.

21. Will my Option benefits be taxable? Under current Hong Kong legislation, optionholders will be subject to Salaries Tax in respect of the amount by which the market price of the Option Shares exceeds the Exercise Price on the date of the exercise of the Option. No Salaries Tax is payable either at the time of the grant of Options or, once exercised, on any subsequent disposal at a higher price on the day of exercise. The situation is different in other countries and the responsibility for tax is personal. You are strongly advised to obtain professional advice for yourself regarding your own tax position.

22. What will happen to my Option if the Company is taken over or goes out of business? The Scheme document contains provisions which will allow you to exercise your Option before the Exercise Date or Option Period if certain events occur. These events are: (a) if a general offer to purchase shares of the Company is made to all shareholders and the offer is extended to holders of Options under the Scheme; or (b) if an effective resolution is passed for the winding up of the Company; or (c) if a compromise or arrangement between the Company and its shareholders or creditors is proposed in connection with the reconstruction of the Company or its amalgamation with any other company or companies. If any of these events occur, you will be entitled to exercise your Option within a certain period of time after, in the case of (a), the offers becomes unconditional, or in the case of (b) and (c), the Company gives you notice of the happening of the event. The Company will advise you if any of the above events occur.

23. What will happen to my Option if the Company changes its capital structure? The Scheme document contains provisions to adjust, among other things, your number of Option Shares, the Exercise Price and the method of exercising your Option as a result of any change in the capital structure of the Company. Examples of such changes would be a capitalisation of profits or reserves, a rights issue and a consolidation, subdivision or reduction in the share capital of the Company. An issue of shares as consideration in a transaction involving the Company would not be such an example. The Scheme has limits on the degree of such adjustments, and the auditors of the Company must certify in writing to the Board of Directors of the Company that the adjustment is fair and reasonable.

24. Will my shares be the same as those of other shareholders? All shares which are issued upon the exercise of your Option will be subject to the provisions of the memorandum and articles of association of the Company and will rank equally in every respect with the fully paid ordinary shares in issue on the date they are allotted to you.

25. Am I entitled to receive dividends? Until you have exercised your Option and you are registered as a shareholder in the register of members of the Company, you will not be entitled to any dividends or distributions with respect of the Option Shares. After you are registered as a shareholder in the register of members of the Company, you will be entitled to receive all dividends and distributions on your shares to which all other shareholders of the Company are entitled, unless the record date set by the board of directors for payment of the applicable dividend or distribution is before the date on which you are registered as a shareholder in the register of members. In that case, you would not be entitled to the particular dividend or distribution, but you would be entitled to future dividends or distributions. The record date is the date which is set by the Board of Directors of the Company to determine who is entitled to receive a particular dividend or distribution.

26. Can I vote at shareholders' meetings? Until you have exercised your Option and you are registered as a shareholder in the Company's register of members, you will not be entitled to vote at shareholders' meetings. After you are registered as a shareholder in the Company's register of members, you will be entitled to the same voting rights as all shareholders of the Company, as long as you own your shares.

27. Can the Scheme be altered? The provisions of the Scheme relating to, among other things, the following matters cannot be altered to the advantage of the participants (or prospective participants) without the prior approval of the shareholders of the Company in general meeting: (a) the definition of Eligible Employees, Expiry Date, Grantee and Option Period; (b) the total amount of the securities subject to the Scheme; (c) the fixed maximum entitlement for participants; (d) the period within which the securities must be taken up; (e) the basis for determining the Exercise Price; (f) the voting, dividend, transfer and other rights, including those arising on liquidation of the Company, attaching to the securities and to any Options (if appropriate); (g) the duration of the Scheme; and (h) the provisions for the adjustment of the Exercise Price or the number or amount of securities subject to Options already granted and to the Scheme, in the event of a capitalisation issue, rights issue, sub-division, consolidation of Shares or reduction of capital. Any alterations to the terms and conditions of the Scheme which are of a material nature must be approved by the Stock Exchange unless the alterations take effect automatically under the existing terms of the Scheme.

28. Can I sell or transfer my Option? NO. Your Option is personal to you. You cannot sell, transfer, charge, mortgage, encumber or create any interest in favour of someone else over your Option or the shares you are entitled to buy under the Option. If you try to do any of those things, your Option will lapse automatically and you will not be able to exercise it.

29. Can I use my Option as a security for loan? NO. You cannot sell, transfer, charge, mortgage, encumber or create any interest in favour of someone else over your Option or the shares you are entitled to buy under the Option. If you try to do any of those things, your Option will lapse automatically and you will not be able to exercise it.

30. Has the Scheme been approved by the Stock Exchange? The Hong Kong Stock Exchange has approved the Scheme, the granting of the Options, and the listing of and permission to deal in the shares to be issued upon the exercise of the Options granted under the Scheme.

31. How can I get more information about the Scheme? Further information about the Scheme and copies of the Scheme document (in English) are available for review at Human Resources at 15th Floor, Hongkong Telecom Tower, Taikoo Place, 979 King's Road, Quarry Bay, Hong Kong.

Company Holidays for 2001

Please be informed that the following will be the Company Holidays for 2001 and those marked with an '*' are Statutory Holidays.

Mandatory Provident Fund (MPF)

Questions and Answers 18 August 1999 Dear Colleagues, In response to the interest

of JSC representatives and staff in knowing more about the Mandatory Provident

Fund (MPF) system which will be implemented in December 2000, I have summarised

below common questions and general concerns which you may have come across.

I hope you will find it informative. Meanwhile, the Company is reviewing impacts

of the MPF system on our existing retirement schemes and will come up with arrangement

details in due course. I shall keep you updated once more specific information

is available. Should you have any queries, please contact your HR Services Team.

William Cheung

Executive Director,

Human Resources