**Exhibit 10.4**

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ORIENT-EXPRESSHOTELS LTD.

 

2007Stock Appreciation Rights Plan

(asadopted by the Board of Directors on December 3, 2007 and amended on September 8,2008)

 

1.                                       The Plan

 

Orient-ExpressHotels Ltd. (“OEH”) may grant stock appreciation rights (“SARs”) with respectto Class A common shares of OEH pursuant to this 2007 Stock AppreciationRights Plan (the “Plan”) to permanent and seasonal full-time employees workingat least 35 hours per week and permanent and seasonal part-time employeesworking less that 35 hours per week (“Employees”) of OEH, any of itssubsidiaries or affiliates and any of its investees that have adopted the Plan(each, a “Participating Company”).  Ingeneral, an SAR will entitle the Employee to whom an SAR has been granted to receivea cash payment related to the increase (if any) in the market value of OEH’s Class Acommon shares over three (3) years.

 

2.                                       Administration of the Plan

 

TheCompensation Committee (the “Committee”) of the Board of Directors of OEH willadminister the Plan and the SARs granted under it.  Any decision of the Committee will be finaland conclusive in all matters relating to the Plan and the SARs.  The Committee may make or vary regulationsfor the administration and operation of the Plan not inconsistent with itsprovisions.  The Committee may authorizeany one or more Committee members or the Secretary of OEH to execute anddeliver documents on behalf of the Committee. If the Committee is not constituted, references to it in the Plan willbe deemed to refer to the Board of Directors of OEH.

 

3.                                       To Whom SARs May Be Granted

 

SARs may begranted by the Committee to any eligible Employee of a ParticipatingCompany.  The Committee is authorized todetermine which of the eligible Employees are to be granted SARs, the dates ofgrant, and the number of SARs to be granted to each.  Awards to full-time Employees may be at ahigher number of SARs than to part-time Employees.  A list of Employees to whom SARs have beengranted as of each grant date will be prepared and submitted to the Secretaryof OEH on behalf of the Committee.  AnSAR award certificate in a form approved by the Committee will be issued toeach Employee to whom an SAR has been granted specifying the grant date, the 

 

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fair marketvalue of OEH’s Class A common shares on the grant date, and the number ofSARs granted to the Employee.

 

4.                                       Maturity and Payment of SARs

 

An outstandingSAR will mature on the third (3rd) anniversary of itsgrant date.  Promptly following thematurity date (but no later than 75 days after the Participating Company’s taxyear), a Participating Company will cause to be paid to each Employee holding amatured SAR who has been employed by the Participating Company continuouslyfrom the SAR grant date through the SAR maturity date an amount in cash equalto:

 

(a)  theexcess (if any) of the fair market value of one OEH Class A common shareat the SAR maturity date over the fair market value of one OEH Class Acommon share at the SAR grant date,

 

(b)  multipliedby the number of shares with respect to which the SAR was granted.

 

For purposesof the Plan, the fair market value of the Class A common shares will bethe last sale price per share on the New York Stock Exchange on the relevantdate (or, if not listed on that exchange, then the last sale price per share onthe principal exchange or market on which the shares are traded).  Payment to an Employee by a ParticipatingCompany will be made through its ordinary payroll including deduction ofapplicable taxes.  The Plan will be unfunded,and no Participating Company will be required to segregate assets in connectionwith the Plan.

 

5.                                       SARs Not Assignable

 

No SAR grantedunder the Plan may be transferred by the Employee.  Upon maturity of an SAR, payment will be madeonly to the Employee.

 

6.                                       Adjustment of Number or Kind of Shares

 

If there is astock split, stock dividend, stock combination, exchange of shares or similarcapital adjustment involving the Class A common shares of OEH, theCommittee will appropriately adjust the number and kind of shares with respectto which SARs have been granted, including the SAR grant prices.

 

7.                                       Amendment

 

The Plan maybe amended from time to time by the Board of Directors of OEH.  No amendment will alter or impair the rightsor obligations of any Employee, without his consent, 

 

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under any SARgranted under the Plan that has not yet matured.

 

8.                                       Termination

 

The Plan willterminate upon the first of the following dates or events to occur:

 

(a)  ifOEH is a participant in any corporate amalgamation, merger, consolidation orother reorganization and no provision is made at the time of the transaction tocontinue the Plan,

 

(b)  byresolution of the Board of Directors of OEH terminating the Plan, or

 

(c)  onDecember 3, 2017.

 

In the eventof termination of the Plan in any of the foregoing ways, the provisions of thePlan will continue to apply to any SARs granted prior to the termination thathave not yet matured.

 

9.                                       Effect of SARs Upon Employment

 

Nothing in thePlan will be construed as giving any Employee of a Participating Company theright to be retained in employment. If a Participating Company dismisses anyEmployee, the Participating Company will have no liability for the effect whichdismissal might have upon the Employee as a participant under the Plan.  Under no circumstances will a dismissedEmployee be entitled to claim against the Participating Company anycompensation relating to any SAR held by the Employee under the Plan that hasnot yet matured.

 

10.                                 Construction

 

In allrespects the Plan will be governed by, and be construed in accordance with, thelaws of the Islands of Bermuda.

 

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