**Exhibit 10.2**

 

**ORIENT-EXPRESS HOTELS LTD.**

 

**2004 STOCK OPTION PLAN**

 

(As adopted bythe Board of Directors on February 10, 2004 and approved by shareholderson June 7, 2004, and amended by the Board of Directors on May 7, 2007and approved (as amended) by shareholders on June 15, 2007, and amended bythe Board of Directors on February 2, 2009)

 

**1.****                ****The Plan**

 

Orient-ExpressHotels Ltd. (the “Company”) may grant, in the manner and upon the terms andconditions set forth herein, options to purchase not in excess of an aggregateof 1,000,000 Class A common shares of the Company (adjusted, if necessary,in accordance with Section 12) to eligible directors, officers andemployees of the Company and its subsidiaries (as determined in accordance withSection 3). Shares may be either authorized but unissued shares oracquired shares.

 

**2.****                ****Administration of the Plan**

 

ThePlan shall be administered, and the options hereunder shall be granted, by theBoard of Directors of the Company or a committee thereof from time to time constitutedpursuant to the Bye-Laws of the Company. Any decision of the Board or thecommittee shall be final and conclusive in all matters relating to the Plan.The Board or the committee may make or vary regulations for the administrationand operation of the Plan not inconsistent with the provisions hereof. TheBoard or the committee may act only by a majority of its members in office,except that the members may authorize any one or more of their number or theSecretary of the Company to execute and deliver documents on their behalf. Nomember of the Board or the committee shall be liable for anything done oromitted to be done by him or by any other member in connection with the Plan,except for his own willful misconduct or as expressly provided by statute.

 

TheBoard or the committee shall have authority to (a) adopt a subsidiary plan(the “U.K. Plan”) under the Plan which provides for the grant of options onshares reserved under the Plan to eligible United Kingdom resident directors,officers and employees and complies with the requirements imposed by the UnitedKingdom Board of Inland Revenue, and (b) prescribe the form of optionsgranted under the Plan; provided, however, in each case that the terms andconditions of the U.K. Plan and the form of the option are not more favorableto optionees than the terms and conditions of the Plan. Any option grantedunder the U.K. Plan shall be deemed to be outstanding also under the Plan.

 

TheBoard or the committee is authorized, in its discretion exercised at the timeof grant, to designate options as “United States incentive stock options”within the meaning of Section 422 of the United States Internal RevenueCode.

 

**3.****                ****To Whom Options May Be Granted**

 

Optionsmay be granted to those directors, officers and employees of the Company or anysubsidiary who, in the opinion of the Board or the committee, have contributedsignificantly to the growth and progress of the Company or any subsidiary or topersons who, in the opinion of the Board or the committee, hold promise ofcontributing to the growth and progress of the Company or any subsidiary andwho can be attracted to directorship, 

 

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officershipor employment through the grant of options under the Plan. The Board or thecommittee is hereby given the authority to determine which of the eligibledirectors, officers and employees are to be granted options and the number ofshares to be allocated to each.

 

NoUnited States incentive stock option shall be granted to a person who is not anemployee or (except as provided in Sections 4 and 7) to an employee who owns(or would be regarded as owning) shares possessing more than ten percent of thetotal combined voting power of all classes of shares of the Company or itssubsidiaries at the time the option is granted. In addition, in the case ofUnited States incentive stock options, the aggregate fair market value(determined at the time the option is granted) of the shares with respect towhich incentive stock options are exercisable for the first time by an employeeduring any calendar year (under all United States incentive stock option plansof the Company and its subsidiaries) shall not exceed U.S.$100,000.

 

Theterm “subsidiary” means any corporation in an unbroken chain of corporationsbeginning with the Company, each of which owns at the time such option isgranted (except in the case of the last such corporation in the chain) sharespossessing 50 percent or more of the total combined voting power of all classesof shares in one of the other corporations in such chain.

 

**4.****                ****Option Price**

 

Theoption price per share shall be not less than the fair market value of theshares subject to the option at the time it is granted, as determined in goodfaith by the Board or the committee. If a United States incentive stock optionis granted to an employee who at the time the option is granted owns (or wouldbe regarded as owning) shares possessing more than ten percent of the totalcombined voting power of all classes of shares of the Company or itssubsidiaries, the option price shall be at least 110 percent of the fair marketvalue of the shares subject to the option at the time it is granted. The optionprice shall be subject to adjustment in accordance with Section 12.

 

**5.****                ****Circumstances Under Which Options May BeGranted**

 

Options may be granted at any time and from timeto time on or after the date on which the Plan is adopted by the Board ofDirectors of the Company and before the expiration of ten years therefrom. Ifprior to the expiration of ten years from the date on which the Plan isadopted, an option shall expire or otherwise terminate without having beenexercised in full, the unexercised shares shall thereupon become available forthe granting of options to other eligible directors, officers and employees. Nooption shall be granted unless, at the time such option is granted, the Companyshall have available at least the number of shares covered by such option andby all other options then outstanding under the Plan.

 

**6.****                ****Options Not Assignable**

 

Every option granted under the Plan shallprovide that it is not transferable by the person to whom it is granted,otherwise than by will or the laws of descent and distribution, and that it isexercisable, during his lifetime, only by him.

 

**7.****                ****Manner of Exercise of Options**

 

Anyperson to whom an option has been granted may exercise the same, subject to theprovisions of Section 10, at any time and from time to time before theexpiration of not more than ten years (or, in the case of any United Statesincentive stock option granted to an employee subject to the second sentence ofSection 4, not more than five years) from the date 

 

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theoption was granted. Any such exercise shall be effected by giving writtennotice to the Company, in a form satisfactory to the Board or the committee,specifying the number of shares with respect to which the option is beingexercised. Any person to whom an option has been granted under the U.K. Planmay exercise the same under the Plan, subject to all the provisions hereof andprovided that in the written notice of exercise the person states that he isexercising under the Plan and not under the U.K. Plan.

 

**8.****                ****Manner of Payment on Exercise of Options**

 

Atthe time of giving such notice, such person shall pay or cause to be paid tothe Company the full option price of the shares as to which the option isexercised. As soon as practicable thereafter, the Company shall cause acertificate or certificates for such shares to be registered in the name of suchperson, in such denominations as such person may direct, and shall deliver saidcertificate or certificates to or upon the order of such person.

 

Notwithstandingthe foregoing, on concurrence by the Board or the committee (which concurrencemay be granted or withheld in its sole discretion) the person exercising anoption may elect to defer, for a term not to exceed five years from the date ofexercise, payment of all or a portion of the option price of the shares as towhich the option is exercised, provided, however that:

 

(a)    in the case of an optionee who is a “UnitedStates person” within the meaning of Regulation X of the Board of Governors ofthe Federal Reserve System of the United States of America, the portion of theoption price so deferred for future payment shall not exceed the “good faithloan value” of the shares, within the meaning of the applicable provisions ofRegulation G of such Board and as may be in effect on the date of exercise ifsuch deferral is then subject to such regulation;

 

(b)    the shares for which the option is exercisedshall be issued to and registered in the name of the person exercising theoption but shall be endorsed by the person in blank (either on the certificateor on a separate stock power) and held by the Company as collateral for thedeferred portion of the option price;

 

(c)    the person exercising the option shallexecute a promissory note or other instrument of like effect in favor of theCompany in a principal amount equal to the deferred portion of the option price,which instrument shall provide for the payment of interest at the rate,determined by the Board or the committee, of at least four percent per annum,payable quarterly;

 

(d)    the person exercising the option shall havethe right at any time and from time to time to withdraw part or all of theoption shares from the collateral so held by the Company upon payment of acorresponding portion of the deferred option price, together with any accruedinterest thereon, and that upon such payment the person exercising the optionshall be discharged under the promissory note or other instrument, pro tanto,and shall then be free to dispose of the shares in any manner he may deemappropriate, subject to the relevant conditions and restrictions of the Plan;and

 

(e)    the deferred payment arrangement shall besubject to such further terms and conditions as may be prescribed by the Boardor the committee upon the exercise of options.

 

Theperson exercising an option shall be entitled, from the date of exercise, toall the rights of a shareholder as to the shares covered by the exercise,including the right to vote the shares and to receive and retain all dividendspaid thereon.

 

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**8A.          Cashless Exercise**

 

In lieu of exercising anyoption and making payment as specified in Section 8, any person exercisingan option may elect to receive, and the Company will issue to such optionholder, upon the surrender of the option (or specified portion thereof), thatnumber of shares equal to the value of the option (or specified portionthereof), computed using the following formula (a “Cashless Exercise”):

 
|   |   | *X*    |   | =      |   | *Y*(*A*-*B*)                                                                                                                                          |   |
|--------|--------|--------|--------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |   |   |   | *A*    |   |
|   |   |   |   |   |   |                                                                                                                                                  |
| where: |   | X      |   | =      |   | the number of  shares to be issued in a Cashless Exercise.                                                                                            |
|   |   |   |   |   |   |                                                                                                                                                  |
|   |   | Y      |   | =      |   | the number of shares issuable upon exercise of the  option (or specified portion thereof).                                                            |
|   |   |   |   |   |   |                                                                                                                                                  |
|   |   | A      |   | =      |   | the current share price of the shares, as defined  below.                                                                                             |
|   |   |   |   |   |   |                                                                                                                                                  |
|   |   | B      |   | =      |   | the exercise price of the option (or specified  portion thereof) as to which Cashless Exercise has been elected by the person  exercising the option. |

 

In the case of any CashlessExercise, the “current share price” of the shares shall mean the closing priceof a share on the New York Stock Exchange (or any other national securitiesexchange in the United States of America on which the Company’s class Acommon shares are listed) on the business day immediately preceding the date onwhich the Cashless Exercise takes place.

 

The Company shall not berequired to issue any fractional shares in connection with any CashlessExercise.  If a fraction of a share wouldotherwise be issuable on the exercise of an option (or specified portionthereof), the Company shall pay to the person exercising the option an amountin cash equal to the current share price multiplied by such fraction.

 

Upon the CashlessExercise of an option pursuant to the provisions of this Section 8A, theoption holder will pay to the Company in cash an amount equal to the par valueof each share to be issued in the Cashless Exercise ($0.01 per share).

 

**9.****                ****Exercise After Death of Person to WhomGranted**

 

Inthe event the person to whom an option is granted shall die owning but withouthaving fully exercised the option, his estate or any person who acquired theright to exercise the option by bequest or inheritance or by reason of thedeath of the optionee may, subject to the provisions of Section 10 (exceptsubsection 10(b) and (d)), exercise the option at any time and from timeto time before the expiration of the period of one year after the date ofdeath, notwithstanding that the exercise may occur less than three years ormore than ten years after the date of grant thereof, but only if the person soexercising the option shall have furnished the Company with evidencesatisfactory to the Company of the person’s right to exercise the option and ofpayment or provision for the payment of any estate, transfer, inheritance ordeath taxes payable with respect to the option or the shares to which itrelates. Any such exercise shall be effected in the manner described inSections 7 and 8. Any such exercise, however, shall not be permitted in thecase of a United States incentive stock option after the expiration of tenyears from the date the option was granted.

 

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**10.****         ****Circumstances Under Which Options May NotBe Exercised**

 

Everyoption under the Plan shall provide that it may not be exercised (except as maybe otherwise provided in Sections 9 and 11):

 

(a)    until the shares reserved for issuance uponthe exercise thereof have been listed upon any national securities exchange inthe United States of America on which the Company’s Class A common sharesare then listed;

 

(b)    until the expiration of a period of threeyears from the date the option was granted, and in any event not after (i) theexpiration of a period of three months from the date a person ceases to be adirector, officer or employee of the Company or a subsidiary thereof undercircumstances not involving misconduct, impropriety or inefficiency on his partor (ii) the termination of the directorship, officership or employment ofa person by the Company or a subsidiary thereof or the shareholders for reasonsinvolving misconduct, impropriety or inefficiency on his part; provided,however, that a person ceasing to be a director, officer or employee of theCompany or a subsidiary thereof on account of (i) retirement at or afterthe normal retirement date, (ii) early retirement not earlier than fiveyears before the normal retirement date, (iii) injury or disability, (iv) dismissalfor redundancy or (v) on concurrence of the Board or the committee (whichconcurrence may be granted or withheld in its sole discretion), the sale orother disposition of the subsidiary for which the person acts as director orofficer or which employs the employee or the operating division of the Companyor a subsidiary for which the employee performs his employment, shall beentitled to exercise an option at any time prior to the expiration of a periodof three months from the date he ceases to be a director, officer or employeeof the Company or a subsidiary thereof notwithstanding that such exercise ismade prior to the expiration of a period of three years from the date suchoption was granted (and for purposes of this Section 10 hereof, thedirectorship, officership or employment of any person with the Company or asubsidiary thereof shall not be deemed to have ceased or terminated so long assuch person shall continuously since the date of grant of the option be adirector, officer or employee either of the Company or a subsidiary thereof orof Sea Containers Ltd. or a subsidiary thereof);

 

(c)    unless the Board or the committee shall besatisfied that the issuance of shares upon exercise will be in compliance withall relevant rules and regulations of the United States Securities andExchange Commission; or

 

(d)    after the expiration of ten years from thedate the option is granted.

 

**11.****         ****Change in Control**

 

Forpurposes of this Section 11, “Change in Control” means any of thefollowing events:

 

(a)    any “person” (as that term is defined forthe purposes of Section 13(d) or 14(d) of the U.S. SecuritiesExchange Act of 1934), other than James B. Sherwood or a group including JamesB. Sherwood or any subsidiary of the Company, shall directly or indirectlyacquire more than 40% of the voting shares of the Company then outstanding andthen entitled to vote generally in the election of directors of the Company; or

 

(b)    individuals who, on the date of adoption ofthe Plan, constitute the Company’s Board of Directors (or the successors ofsuch individuals nominated by such Board of Directors or a committee thereof onwhich such individuals or their successors constitute a majority) shall ceaseto constitute a majority of the Company’s Board of Directors; or

 

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(c)    the Company amalgamates, merges orconsolidates with or into any other corporation, other than a corporation whichdirectly, or indirectly through one or more intermediaries, is controlled byJames B. Sherwood or a group including James B. Sherwood, without the approvalof its Board of Directors constituted as provided in clause (b) above; or

 

(d)    the Company sells, leases, exchanges orotherwise disposes of all or substantially all of its assets and businesswithout the approval of its Board of Directors constituted as provided inclause (b) above.

 

Inthe event of a Change in Control, and notwithstanding anything to the contraryin Section 3, any outstanding option granted under the Plan which anoptionee shall not then have been entitled to exercise shall become exercisableimmediately prior to or concurrently with the occurrence of the Change inControl and the optionee shall have the right to exercise all such options.

 

Notwithstandinganything in the Plan to the contrary, in the event of exercise of an optionfollowing a Change in Control, the optionee may elect, in the written noticeprovided for in Sections 7 and 8, (i) to pay or cause to be paid to theCompany the full option price of the shares as to which the option isexercised, or (ii) to surrender to the Company all or any part of anoption and receive from the Company upon such surrender an amount in cash equalto the excess, if any, of the determined value of the shares subject to theoption or portion thereof so surrendered over the aggregate exercise price ofsuch shares as set forth in the applicable option grant letter. The term “determinedvalue” as used herein means the higher of (A) the highest sale price per Class Acommon share of the Company on the New York Stock Exchange (or, if any of suchshares are not listed on that exchange at that time, then the highest saleprice of the shares on the principal stock exchange on which such shares arelisted, or if such shares are not listed, then the over-the-counter market)during the 12 months immediately preceding the date of the Change in Control,or (B) the highest price per share actually paid in connection with anyChange in Control (including, without limitation, prices paid in any subsequentamalgamation, merger or combination with any entity that acquires control ofthe Company), in either case multiplied by the number of shares subject to theoption or portion thereof so surrendered. In the event of a surrender of all ora portion of an option pursuant to this Section, the number of shares as towhich the option was surrendered shall not again become available for use underthe Plan.

 

Theobligations of the Company under the Plan shall be binding upon any successorcompany, corporation or other organization resulting from any amalgamation,merger, consolidation or other reorganization of the Company, or upon anysuccessor company, corporation or organization succeeding to all orsubstantially all of the assets and business of the Company, in any such casewhich would constitute a Change in Control. The Company agrees that it willmake appropriate provisions for the preservation of all optionees’ rights underthe Plan in any agreement or plan that it may enter into or adopt to effect anysuch amalgamation, merger, consolidation, reorganization or transfer of assetsconstituting a Change in Control.

 

**12.****         ****Adjustment of Number or Kind of Shares**

 

If the Company shall effect one or more sharesplits, share dividends, combinations of shares, exchanges of shares or similarcapital adjustments, the Board or the committee shall appropriately adjust theaggregate number and kind of shares with respect to which options have beengranted or may be granted under the Plan. Every option granted under the Planshall provide that, in the event of any such capital adjustments, the numberand kind of the 

 

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shareswith respect to which it may be exercised, and the option price, shall beappropriately adjusted.

 

**13.****         ****Amendment**

 

ThePlan may be amended from time to time by the Board of Directors of the Company.No amendment shall alter or impair any of the rights or obligations of anyperson, without his consent, under any option theretofore granted under thePlan.

 

**14.****         ****Termination**

 

ThePlan shall terminate upon the first of the following dates or events to occur:

 

(a)    if the Company is a participant in anycorporate amalgamation, merger, consolidation or other transaction and no provisionis made at the time of the transaction to continue the Plan, except as providedin Section 11;

 

(b)    resolution of the Board of Directors of theCompany terminating the Plan; or

 

(c)    on February 9, 2014.

 

Inthe event of termination of the Plan in any of the ways provided hereinabove,the provisions of the Plan shall continue in full force and effect as regardsany options granted prior to such termination.

 

**15.****         ****Effect of Options Upon Employment**

 

Nothingin the Plan shall be construed as giving any person acting as a director orofficer of or employed by the Company or any subsidiary thereof the right to beretained in such directorship, officership or employment. The Company and anysubsidiary thereof and the shareholders shall have the right to dismiss anydirector, officer or employee at any time with or without cause and withoutliability for the effect which such dismissal might have upon him as aparticipant under the Plan, and under no circumstances shall a person ceasingto be a director, officer or employee by reason of dismissal or otherwise beentitled to or claim against the Company or any subsidiary thereof anycompensation for or in respect of any consequent reduction or loss of hisrights or benefits (actual or prospective) under any option held by him inconnection with the Plan.

 

**16.****         ****Construction**

 

Inall respects the Plan shall be governed by, and be construed in accordancewith, the laws of the Islands of Bermuda.

 

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