HIGHWAY
HOLDINGS LIMITED


2010
STOCK OPTION AND RESTRICTED STOCK PLAN




1.
            Purposes




The
purposes of the Plan are as follows:




(a)           To
attract and retain effective and capable directors, officers, employees and
individual consultants of the Company and its Subsidiaries who contribute
materially to the success of the Company and its Subsidiaries and to provide
incentive compensation opportunities that are competitive with other similar
businesses;




(b)           To
bind the interests of these directors, officers, employees and individuals more
closely to the Company’s own interests by offering them opportunities to acquire
Common Stock; and




(c)           Thereby
provide these individuals with added incentive to remain in the service of the
Company and its Subsidiaries and to enhance long-term shareholder
returns.




2.
            Definitions




The
following terms wherever used herein shall have the meanings set forth
below.




(a)           The
term “Award”
shall mean an award of an Option or a Restricted Share under the
Plan.




(b)           The
term “Board”
shall mean the Board of Directors of the Company.




(c)           The
term “Change in
Control of the Company” shall mean a change in control of a nature that
would be required to be reported in response to Item 6(e) of Schedule l4A of the
Regulation 14A promulgated under the Exchange Act, whether or not the Company is
in fact required to comply therewith, provided that, without limitation, such a
change in control shall be deemed to have occurred if (A) any “person” (as such
term is used in Section 13(d) and 14(d) of the Exchange Act), other than a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any of its Subsidiaries or a corporation owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportions as the ownership of Common Stock of the Company, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 50% or more of the
combined voting power of the Company’s then outstanding securities; (B) during
any period of two consecutive years (not including any period prior to the
adoption of the Plan), individuals who at the beginning of such period
constitute the Board and any new director (other than a director designated by a
person who has entered into an agreement with the Company to effect a
transaction described in clauses (A) or (D) of this definition) whose election
by the Board or nomination for election by the Company’s shareholders was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority of the Board; (C) the Company enters into an agreement,
the consummation of which would result in the occurrence of a Change in Control
of the Company; or (D) the shareholders of the Company approve a merger, share
exchange or consolidation of the Company with any other corporation, other than
a merger, share exchange or consolidation that would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least 50% of the combined voting power of
the voting securities of the Company of such surviving entity outstanding
immediately after such merger, share exchange or consolidation, or the
shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale of disposition by the Company of all or
substantially all the Company’s assets.







(d)           The
term “Committee” shall mean
a committee of one or more members of the Board appointed by the Board in
accordance with subparagraph 4(i).




(e)           The
term “Common
Stock” shall mean the regular voting common shares, $0.01 par value per
share, of the Company.




(f)           The
term “Company”
shall mean Highway Holdings Limited, a British Virgin Islands limited liability
company.




(g)           The
term “Exchange
Act” shall mean the United States Securities Exchange Act of 1934, as
amended.




(h)           The
term “Fair Market
Value” shall mean (a) the average on the applicable date of the high
and low prices of a share of Common Stock on the principal national securities
exchange on which shares of Common Stock are then trading, or, if shares were
not traded on such date, then on the next preceding date on which a trade
occurred; or (b) if Common Stock is not traded on a national securities
exchange, the closing bid price (or average bid prices) last quoted on such date
by an established quotation service for over-the-counter securities; or
(c) if Common Stock is not traded on a national securities exchange and is
not otherwise publicly traded on such date, the fair market value of a share of
Common Stock as established by the Board acting in good faith and taking into
consideration all factors which it deems appropriate, including, without
limitation, recent sale or offer prices for the Common Stock in private
arm’s-length transactions. During periods when the Fair Market Value cannot be
determined under any of the methods specified in clauses (a) and (b) , above,
the Committee shall have the authority to establish the Fair Market Value as of
the beginning of (or periodically during) each fiscal year of the Company and to
use such value for all transactions occurring thereafter within such fiscal
year.




(i)           The
terms “Option”
and “Stock
Option” shall mean a right granted pursuant to the Plan to purchase
shares of Common Stock at an exercise price and on other terms established
pursuant to paragraph 7.




(j)           The
term “Option
Agreement” shall mean the written agreement representing an Option
granted as contemplated by paragraph 7.




(k)          The
term “Non-Employee
Director” shall mean a Director who is considered a “non-employee
director” within the meaning of Rule 16b-3 under the Exchange Act.




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(l)           The
term “Plan”
shall mean the Highway Holdings Limited 2010 Stock Option and Restricted Stock
Plan as originally approved by the Board on June 26, 2010, as the same may be
amended from time to time.




(m)          The
term “Restricted
Share” means a share of Common Stock awarded under the Plan that is
subject to a risk of forfeiture or other restrictions that will lapse upon the
achievement of one or more goals relating to completion of service or
achievement of performance or other objectives, as determined by the
Committee.




(n)           The
term “Restricted Share
Agreement” means the agreement between the Company and the recipient of a
Restricted Share that contains the terms, conditions and restrictions pertaining
to such Restricted Share.




(o)           The
terms “Subsidiary” and
“Subsidiaries”
shall mean one or more corporations of which capital stock possessing 50% or
more of the total combined voting power of all classes of its capital stock
entitled to vote generally in the election of directors is owned in the
aggregate by the Company directly or indirectly through one or more
Subsidiaries.




3.
            Effective
      Date of the Plan




The Plan
shall become effective upon approval of the shareholders of the Company,
provided that the Board may grant Options and award Restricted Shares pursuant
to the Plan prior to shareholder approval if the grant of such Options or the
award of such Restricted Shares by its terms is contingent upon subsequent
shareholder approval of the Plan.




4.
            Operation
      and Administration




(a)           The
Board shall administer the Plan unless and to the extent the Board delegates
administration to a Committee as provided in
subparagraph 4(i).




(b)           The
Board may establish, from time to time and at any time, subject to the
limitations of the Plan as set forth herein, such rules and regulations and
amendments and supplements thereto, as it deems necessary to comply with
applicable law and regulation and for the proper administration of the
Plan.




(c)           The
Board shall from time to time determine those executives and employees who
shallreceive
Awards, and shall determinethe numbers of shares on
which Awards shallbe granted to each such
person and the nature of the Awards to be granted.




(d)           Awards
shall be granted by the Company and shall become effective only after prior
approval of the Board, and upon the execution of an Option Agreement or a
Restricted Share Agreement, as applicable, between the Company and the recipient
of the Award.




(e)           All
Awards are subject to withholding of all applicable taxes, and the Board may
condition the delivery of any shares or other benefits under the Plan on
satisfaction of the applicable withholding obligations.  The Board, in
its discretion, and subject to such requirements as the Board may impose prior
to the occurrence of such withholding, may permit such withholding obligation to
be satisfied through cash payments, through the surrender of shares of Common
Stock that the participant already owns, or through the surrender of shares of
Common Stock to which the participant is otherwise entitled under the
Plan.




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(f)           The
Board’s interpretation and construction of the provisions of the Plan and the
rules and regulations adopted by the Board shall be final, unless otherwise
determined by the Board. No member of the Board or the Committee shall be liable
for any action taken or determination made in good faith in respect of the
Plan.




(g)           The
Board may impose such other terms and conditions not inconsistent with the terms
of the Plan, as it deems advisable, including, without limitation, restrictions
and requirements relating to (i) the registration, listing or qualification of
the Common Stock, (ii) the grant or exercise of Awards, or (iii) the shares
of Common Stock acquired under the Plan.  The Committee may require
that a participant notify the Company of any disposition of shares of Common
Stock purchased under the Plan.




(h)           Notwithstanding
any other provisions of the Plan, the Company shall have no obligation to
deliver any shares of Common Stock under the Plan or make any other distribution
of benefit under the Plan unless such delivery or distribution would comply with
all applicable laws (including, without limitation, the Exchange Act and the
United States Securities Act of 1933, as amended), and the applicable
requirements of any securities exchange or similar entity.




(i)           The
Board may delegate administration of the Plan to a Committee, and the term
“Committee”
shall apply to any Director or Directors to whom such authority has been
delegated.  If administration of the Plan is delegated to a Committee,
the Committee shall have, in connection with the administration of the Plan, all
of the powers heretofore possessed by the Board, including the power to delegate
nondiscretionary administrative duties to such employees of the Company as the
Committee deems proper (and references to this Plan to the “Board” shall
thereafter be to the Committee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board.  The Board may abolish the Committee at any time
and restore to the Board the administration of the Plan.  In the
discretion of the Board, the Committee may consist solely of two or more
Non-Employee Directors.  Within the scope of such authority, the Board
or the Committee may delegate to one or more Directors who are not Non-Employee
Directors the authority to grant Stock Awards to eligible persons who are not
then subject to Section 16 of the Exchange Act.




5.
            Participation
      in the Plan




(a)           Participation
in the Plan shall be limited to the directors, executives and employees of the
Company and its Subsidiaries, and any consultant or other individual providing
services to the Company or a Subsidiary, who shall be designated by the
Board.




(b)           A
consultant shall not be eligible for the grant of an Award if, at the time of
grant, a Form S-8 Registration Statement under the Securities Act (“Form S-8”) is not
available to register either the offer or the sale of the Company’s securities
to such consultant because of the nature of the services that the consultant is
providing to the Company or a Subsidiary, or because the consultant is not a
natural person, or as otherwise provided by the rules governing the use of Form
S-8, unless the Company determines both (i) that such grant (A) shall be
registered in another manner under the Securities Act (e.g., on a Form S-3
Registration Statement) or (B) does not require registration under the
Securities Act in order to comply with the requirements of the Securities Act,
if applicable, and (ii) that such grant complies with the securities laws of all
other relevant jurisdictions.




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6.
            Stock
      Subject to the Plan




(a)           There
shall be reserved for the granting of Awards pursuant to the Plan, and for
issuance and sale pursuant to such Awards, 600,000 shares of Common
Stock.  To determine the number of shares of Common Stock available at
any time for the granting of Awards, there shall be deducted from the total
number of reserved shares of Common Stock, the number of shares of Common Stock
in respect of which Awards have been made pursuant to the Plan that are still
outstanding or have been exercised.  If any shares subject to an Award
are withheld and not delivered to a participant because the Award is exercised
through a reduction of shares subject to the Award (i.e., “net exercised”), the
number of shares that are withheld shall no longer be available for issuance
under the Plan.  If any shares subject to an Award are not delivered
to a participant because such shares are withheld in satisfaction of the
withholding of taxes incurred in connection with the exercise of an Option, or
the award of Restricted Shares, the number of shares that are not delivered to
the participant shall no longer be available for subsequent issuance under the
Plan.  If the exercise price of any Option is satisfied by tendering
shares of Common Stock held by the participant (either by actual delivery or
attestation), the number of shares so tendered shall not remain available for
subsequent issuance under the Plan.  The shares of Common Stock to be
issued in connection with Awards made pursuant to the Plan shall be made
available from the authorized and unissued shares of Common Stock or shares
subsequently acquired by the Company as treasury shares. If for any reason
shares of Common Stock as to which an Award has been made are forfeited or
otherwise cease to be subject to purchase thereunder, then such shares of Common
Stock again shall be available for issuance in connection with Awards made
pursuant to the Plan.




(b)           In
the event of reorganization, recapitalization, stock split, stock dividend,
combination of shares of Common Stock, merger, consolidation, share exchange,
acquisition of property or stock, or any change in the capital structure of the
Company, the Board shall make such adjustments as may be appropriate, in its
discretion, in the number and kind of shares reserved for Awards and in the
number, kind and price of shares covered by Awards made pursuant to the
Plan.




7.
            Terms
      and Conditions of Options




(a)           Each
Option granted pursuant to the Plan shall be evidenced by an Option Agreement in
such form as the Board from time to time may determine.




(b)           The
exercise price per share for Options shall be established by the Board at the
time of the grant of Options pursuant to the Plan.  The exercise price
for Options granted to participants subject to taxation in the United States
shall not be less than the Fair Market Value of a share of Common Stock on the
date on which the Option is granted.  The exercise price of Options
granted to participants who are not subject to taxation in the United States
shall be established by the Board and may, in the Board’s discretion, be less
than the Fair Market Value.  If the Board does not establish a
specific exercise price per share at the time of grant, the exercise price per
share shall be equal to the Fair Market Value of a share of Common Stock on the
date of grant of the Option.




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(c)           The
term of each Option shall be determined by the Board at the time of grant of the
Option, provided that if no term is established by the Board, the term of the
Option shall be five years from the date on which it is granted.




(d)           The
Board may provide in the Option Agreement that the right to exercise each Option
for the number of shares subject to each Option shall vest in the Option holder
over such period of time, or upon the occurrence of such event, contingency or
condition (which may be based on performance or other criteria), as the Board,
in its discretion, shall determine for each Option holder. The vesting
provisions of individual Options may vary.  If the Board does not
designate a vesting schedule, the Option shall be exercisable immediately after
the date of grant.




(e)           Options
shall be nontransferable and nonassignable, except that Options may be
transferred by testamentary instrument or by the laws of descent and
distribution. Notwithstanding the foregoing, the Board may set forth in the
Option Agreement at the time of grant or thereafter, that the Option may be
transferred to members of the optionee’s immediate family, to trusts solely for
the benefit of such immediate family members, and to partnerships in which such
family members and/or trusts are the only partners.  For this purpose,
immediate family means the optionee’s spouse, parents, children, stepchildren,
grandchildren, and legal dependents. Any transfer of Options made under this
provision shall not be effective until notice of such transfer is delivered to
the Company. In the event an Option is transferred in accordance with the
foregoing, the Option shall be exercisable solely by the transferee and shall
remain subject to the provisions of the Plan.




(f)           In
the case of an Option holder who is an employee of the Company or its
Subsidiaries, upon voluntary or involuntary termination of an Option holder’s
active employment for any reason (including illness or disability), the holder’s
Option and all rights thereunder shall terminate effective at the close of
business on the date the Option holder ceases to be an active, regular employee
of the Company or any of its subsidiaries, except (i) to the extent previously
exercised and (ii) as provided in subparagraphs (g), (h) and (i) of this
paragraph 7.




(g)           In
the event an employee Option holder (i) takes a leave of absence from the
Company or any of its Subsidiaries for personal reasons or (ii) terminates his
employment or ceases providing services to the Company and any of its
Subsidiaries, by reason of illness, disability, voluntary termination with the
consent of the Board, or other special circumstances, the Board may consider his
case and may take such action in respect of the related Option Agreement as it
may deem appropriate under the circumstances, including accelerating the time
previously granted Options may be exercised and extending the time following the
Option holder’s termination of active employment during which the Option holder
is entitled to purchase the shares of Common Stock subject to such Options,
provided that in no event may any Option be exercised after the expiration of
the term of the Option.




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(h)           If
an Option holder dies during the term of his Option without having fully
exercised his Option, the executor or administrator of his estate or the person
who inherits the right to exercise the Option by bequest or inheritance shall
have the right at any time following the Option holder’s death to purchase the
number of shares of Common Stock that the deceased Option holder was entitled to
purchase at the date of his death, after which the Option shall lapse, provided
that in no event may any Option be exercised after the expiration of the term of
the Option. In the event of the death of the transferee of an Option transferred
in accordance with subparagraph 7(e), above, the Option shall be exercisable by
the executors, administrators, legatees or distributees of the transferee’s
estate, as the case may be, for a period of one (1) year following the date of
the transferee’s death, provided that in no event may the Option be exercised
after the expiration of the term of the Option.




(i)           If
an Option holder terminates employment without his having fully exercised his
Option due to his retirement with the consent of the Company, then such Option
holder shall have the right within 90 daysof the Option holder’s
termination of employment to purchase the number of shares of Common Stock that
the Option holder was entitled to purchase at the date of his termination, after
which the Option shall lapse, provided that in no event may any Option be
exercised after the expiration of the term of the Option. The Board may cancel
an Option during the 90-dayperiod referred to in
this paragraph, if the participant engages in employment or activities contrary,
in the opinion of the Board, to the best interests of the
Company.  The Board shall determine in each case whether a termination
of employment shall be considered a retirement with the consent of the Company,
and, subject to applicable law, whether a leave of absence shall constitute a
termination of employment. Any such determination of the Board shall be final
and conclusive.




(j)           On
receipt of written notice of exercise, the Board may elect to cash out all or
part of the portion of any stock Option to be exercised by paying the
participant an amount, in cash or Common Stock, equal to the excess of the Fair
Market Value of the Common Stock that is subject to the Option over the Option
Price times the number of Common Shares subject to the Option on the effective
date of such cash-out.




8.
            Methods
      of Exercise of Options




(a)           An
Option holder (or other person or persons, if any, entitled to exercise an
Option hereunder) desiring to exercise an Option granted pursuant to the Plan as
to all or part of the shares of Common Stock covered by the Option shall (i)
notify the Company in writing at its principal office to that effect, specifying
the number of shares of Common Stock to be purchased and the method of payment
therefor, and (ii) make payment or provisions for payment for the shares of
Common Stock so purchased in accordance with this paragraph 8. Such written
notice may be given by means of a facsimile transmission. If a facsimile
transmission is used, the Option holder should mail the original executed copy
of the written notice to the Company promptly thereafter.




(b)           Payment
or provision for payment shall be made as follows:




(i)           The
Option holder shall deliver to the Company at the address set forth in
subparagraph 8(a), cash in an amount equal to the aggregate purchase price of
the shares of Common Stock as to which such exercise relates; or




7


(ii)           The
Option holder shall tender to the Company, by either actual delivery of shares
or by attestation, shares of Common Stock already owned by the Option holder
that, together with any cash tendered therewith, have an aggregate fair market
value (determined based on the Fair Market Value on the date the notice set
forth in subparagraph 8(a) is received by the Company) equal to the aggregate
purchase price of the shares of Common Stock as to which such exercise relates;
or




(iii)           The
Option holder shall deliver to the Company an exercise notice, together with
irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds necessary to pay the aggregate purchase price of
the shares of Common Stock as to which such exercise relates and to sell the
shares (or a sufficient portion of the shares) of Common Stock to be issued upon
exercise of the Option to pay the exercise price and any tax withholding
resulting from such exercise and deliver the cash proceeds, less commissions and
brokerage fees, to the Option holder or to deliver the remaining shares of
Common Stock to the Option holder.




Notwithstanding
the foregoing provisions, the Board, in granting Options pursuant to the Plan,
may limit the methods in which an Option may be exercised by an person and, in
processing any purported exercise of an Option granted pursuant to the Plan, may
refuse to recognize the method of exercise selected by the Option holder (other
than the method of exercise set forth in subparagraph 8(b)(i)).




(c)           An
Option holder at any time may elect in writing to abandon an Option in respect
of all or part of the number of shares of Common Stock as to which the Option
shall not have been exercised.




(d)           An
Option holder shall have none of the rights of a shareholder of the Company
until the shares of Common Stock covered by the Option are issued to him upon
exercise of the Option.




9.
            Terms
      and Conditions of Restricted Share
Awards




(a)           Each
award of Restricted Shares under the Plan shall be evidenced by a Restricted
Share Agreement between the recipient and the Company in such form as the Board
from time to time may determine. Such Restricted Shares shall be subject to all
applicable terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various Restricted Share
Agreements entered into under the Plan need not be identical.




(b)           Restricted
Shares may be sold or awarded under the Plan for such consideration as the Board
may determine, including (without limitation) cash, cash equivalents,
full-recourse promissory notes, past services and future services; provided,
however, that to the extent that an Award consists of newly issued Restricted
Shares, the Award recipient shall furnish consideration with a value not less
than the par value of such Restricted Shares in the form of cash equivalents or
past services rendered to the Company or its subsidiaries, as the Board may
determine.




8


(c)           Each
award of Restricted Shares may or may not be subject to forfeiture to the
Company, or “vesting.”  Vesting shall occur, in full or in
installments, upon satisfaction of the conditions specified in the Restricted
Share Agreement. During any restricted period, the recipient shall not be
permitted to sell, transfer, pledge or assign Restricted Shares awarded under
this Plan. In the event of the recipient’s retirement, disability or death, or
in cases of special circumstances, the Board, in its sole discretion, may waive,
in whole or in part, any or all remaining restrictions with respect to such
recipient’s Restricted Shares.




(d)           The
holders of Restricted Shares awarded under the Plan shall have the same voting,
dividend and other rights as the Company’s other shareholders. A Restricted
Share Agreement, however, may require that the holders of Restricted Shares
invest any cash dividends received in additional Restricted Shares. Such
additional Restricted Shares shall be subject to the same conditions and
restrictions as the Award with respect to which the dividends were
paid.




(e)           When
an Award of Restricted Shares is granted hereunder, the Company shall issue a
certificate or certificates in respect of such Restricted Shares, which shall be
registered in the name of the recipient and, if applicable, shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such Award in substantially the following form:




“The
transferability of the shares represented by this certificate are subject to the
terms and conditions (including forfeiture) of a Restricted Share Agreement
entered into between the registered owner and Highway Holdings
Limited.  A copy of such agreement is on file in the offices of the
Secretary of the Company.”




10.
            Cancellation
      and Rescission of Awards




Unless
the Option Agreement or Restricted Share Agreement specifies otherwise, the
Board may cancel, rescind, suspend, withhold or otherwise limit or restrict any
unexpired, unpaid, or deferred Awards at any time if the participant is not in
compliance with all applicable provisions of the applicable Award Agreement and
the Plan.




11.
            Amendments
      and Discontinuance of the Plan




(a)           The
Board at any time, and from time to time, may amend the Plan; provided, however,
that any Award granted before amendment of the Plan shall not be impaired by any
amendment of the Plan, except with the written consent of the holder of the
Award.  Except as provided in paragraph 6(b) relating to
adjustments upon changes in Common Stock, no amendment shall be effective unless
approved by the shareholders of the Company to the extent shareholder approval
is necessary to satisfy the requirements of Rule 16b-3 or any securities
exchange listing requirements applicable to the Company.  The Board
may, in its sole discretion, submit any other amendment to the Plan for
shareholder approval.




(b)           The
Board at any time, and from time to time, may amend the terms of any one or more
outstanding Awards; provided, however, that no Award shall be impaired by any
such amendment, except with the written consent of the holder of the
Award.




9


12.
            Plan
      Subject to Governmental Laws and
Regulations




The Plan
and the terms of the Awards made pursuant to the Plan shall be subject to all
applicable governmental laws and regulations. Notwithstanding any other
provision of the Plan to the contrary, the Board may in its sole and absolute
discretion make such changes in the Plan as may be required to conform the Plan
to such laws and regulations.




13.
            Non-Guarantee
      of Employment




Nothing
in the Plan or in any Award granted pursuant to the Plan shall be construed as a
contract of employment between the Company or a Subsidiary, and selection of any
individual as a participant in the Plan will not give that individual the right
to continue in the employ of the Company or a Subsidiary, the right to continue
to provide services to the Company or any Subsidiary or as a limitation of the
right of the Company or a Subsidiary to discharge any participating employee or
any other individual at any time.




14.
            Exclusion
      From Retirement and Fringe Benefit
Computation




No
portion of any Award under this Plan shall be taken into account as “wages,”
“salary” or “compensation” for any purpose, whether in determining eligibility,
benefits or otherwise, under (i) any pension, retirement, profit sharing or
other qualified or non-qualified plan of deferred compensation, (ii) any
employee welfare or fringe benefit plan including, but not limited to, group
insurance, hospitalization, medical, and disability, or (iii) any form of
extraordinary pay including but not limited to bonuses, sick pay and vacation
pay.




15.
            Change
      In Control Provisions




Notwithstanding
any other provision of the Plan to the contrary, unless otherwise provided in an
Option Agreement or a Restricted Share Agreement, in the event of a Change in
Control:




(a)          Any
Awards outstanding as of the date of such Change in Control and not then
exercisable shall become fully exercisable to the full extent of the original
grant;




(b)          The
Board shall have full discretion, notwithstanding anything herein or in an
Option Agreement or a Restricted Share Agreement to the contrary, to do any or
all of the following with respect to an outstanding Award:




(1)           To
cause any Award to be canceled, provided notice of at least 15 days thereof is
provided before the date of cancellation;




(2)           To
provide that the securities of another entity be substituted hereunder for the
Common Stock and to make equitable adjustment with respect thereto;




(3)           To
grant the participant by giving notice during a pre-set period to surrender all
or part of an Option to the Company and to receive cash in an amount equal to
the amount by which the price per share of Common Stock, if any, paid in any
corporate transaction that gave rise to the Change in Control shall exceed the
amount which the participant must pay to exercise the Option per share of Common
Share under the Option (the “Spread”) multiplied by the number of Common Shares
granted under the Option;




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(4)           To
require the assumption of the obligation of the Company under the Plan subject
to appropriate adjustment; and




(5)           To
take any other action the Board determines to take.




16.
            Liability
      Limited; Indemnification




(a)           To
the maximum extent permitted by law, neither the Board or the Committee, nor any
of the members of the Board or the Committee, shall be liable for any action or
determination made with respect to this Plan.




(b)           In
addition to such other rights of indemnification that they may have, the members
of the Board and the Committee shall be indemnified by the Company to the
maximum extent permitted by law against any and all liabilities and expenses
incurred in connection with their service in such capacity.




17.
            Miscellaneous




(a)           The
headings in this Plan are for reference purposes only and shall not affect the
meaning or interpretation of the Plan.




(b)           This
Plan shall be governed by, and construed in accordance with, the laws of British
Virgin Islands without regard to principles of conflict of laws of any
jurisdiction.




(c)           All
notices and other communications made or given pursuant to this Plan shall be in
writing and shall be sufficiently made or given if delivered or mailed,
addressed to the participant at the address contained in the records of the
Company or to the Company at its principal executive offices.




18.
            Duration
      of the Plan




(a)           Unless
sooner terminated by the Board, the Plan shall automatically terminate on the
day before the tenth anniversary of the date the Plan is adopted by the
Board.  No Awards may be granted under the Plan while the Plan is
suspended or after it is terminated.




(b)           Suspension
or termination of the Plan shall not impair rights and obligations under any
Award granted while the plan is in effect, except with the written consent of
the Participant.




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