LENTUO INTERNATIONAL
INC.

2010 SHARE INCENTIVE PLAN


 


1.             Purposes
of the Plan.  The purposes of this Plan are:


 


·    to
attract and retain the best available personnel for positions of substantial responsibility;


 


·    to
provide additional incentive to Employees, Directors and Consultants; and


 


·    to
promote the success of the Company’s business.


 


The Plan permits
the grant of Incentive Stock Options, Nonstatutory Stock Options, Restricted Shares, Share Appreciation Rights, Restricted Share
Units, Performance Units, Performance Shares and Other Share-Based Awards.


 


2.             Definitions. 
As used herein, the following definitions will apply:


 


(a)   “Administrator”
means the Board or any of its Committees as will be administering the Plan, in accordance with Section 4 of the Plan.


 


(b)   “Applicable
Laws” means any applicable legal requirements relating to the administration of and the issuance of securities under
equity securities-based compensation plans, including, without limitation, the requirements of the laws of the Cayman Islands,
Hong Kong, the People’s Republic of China, U.S. federal and state securities laws, the Code and the requirements of any stock
exchange or quotation system upon which the Ordinary Shares may be listed or quoted and the applicable laws of any other country
or jurisdiction where Awards are granted under the Plan.  For all purposes of this Plan, references to statutes and regulations
shall be deemed to include any successor statutes or regulations, where necessary as determined by the Administrator in its sole
discretion.


 


(c)   “Award”
means, individually or collectively, a grant under the Plan of Incentive Stock Options, Nonstatutory Stock Options, SARs, Restricted
Share, Restricted Share Units, Performance Units, Performance Shares or Other Share-Based Awards.


 


(d)   “Award
Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award
granted under the Plan.  The Award Agreement is subject to the terms and conditions of the Plan.


 


(e)   “Awarded
Shares” means the Ordinary Shares subject to an Award.


 


(f)    “Board”
means the Board of Directors of the Company.


 


(g)   “Change
in Control” means the occurrence of any of the following events:


 






    	 



    	 



    

 


(i)            Any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial
owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing
fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities;


 


(ii)           The
consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets;


 


(iii)          A
change in the composition of the Board occurring within a two-year period at any time after a Qualified Public Offering, as a result
of which fewer than a majority of the directors are Incumbent Directors.  “Incumbent Directors” means directors
who either (A) are Directors as of the first Qualified Public Offering, or (B) are elected, or nominated for election,
to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination
(but will not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating
to the election of directors to the Company);


 


(iv)          The
consummation of a merger, amalgamation or consolidation of the Company with any other corporation or business entity, other than
a merger or consolidation which 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 or its parent)
at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity
or its parent outstanding immediately after such merger or consolidation; or


 


(v)           The
sanction by a court of a scheme of arrangement under the Cayman Islands Companies Act.


 


Anything in the foregoing
to the contrary notwithstanding, a transaction shall not constitute a Change in Control if its sole purpose is to change the legal
jurisdiction of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions
by the persons who held the Company’s securities immediately before such transaction.  In addition, a sale by the Company
of its securities in a transaction, the primary purpose of which is to raise capital for the Company’s operations and business
activities including, without limitation, a Qualified Public Offering, shall not constitute a Change in Control.


 


(h)   “Code”
means the U.S. Internal Revenue Code of 1986, as amended.  Any reference to a section of the Code herein will be a reference
to any successor or amended section of the Code.


 


(i)    “Committee”
means the compensation committee of the Board or such other committee of Directors or other individuals satisfying Applicable Laws
appointed by the Board in accordance with Section 4 of the Plan.


 


(j)    “Company”
means Lentuo International Inc., a company incorporated in the Cayman Islands, having its registered office at Marquee
Place, Suite 300, 430 West Bay Road, P.O. Box 3502, Grand Cayman KYI-1208, Cayman Islands, British West Indies, or
any successor thereto.


 






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(k)   “Consultant”
means any person, including an advisor, engaged by the Company, a Subsidiary or a Parent to render services to such entity.


 


(l)    “Director”
means a member of the Board.


 


(m)  “Disability”
means total and permanent disability as defined in Section 22(e)(3) of the Code, provided that in the case of Awards
other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability
exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.


 


(n)   “Dividend
Equivalent” means a credit, made at the discretion of the Administrator, to the account of a Participant in an amount
equal to the value of dividends paid on one Ordinary Share for each Share represented by an Award held by such Participant.


 


(o)   “Employee”
means any person, including Directors, employed by the Company or any Parent or Subsidiary of the Company.  Neither service
as a Director nor payment of a director’s fee by the Company or any Parent or Subsidiary of the Company will be sufficient
to constitute “employment” by the Company.


 


(p)   “Exchange
Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


 


(q)   “Exchange
Program” means a program under which (i) outstanding Awards are surrendered or canceled in exchange for Awards of
the same type (which may have lower exercise prices and different terms), Awards of a different type, and/or cash, and/or (ii) the
exercise price of an outstanding Award is reduced.  The terms and conditions of any Exchange Program will be determined by
the Administrator in its sole discretion.


 


(r)    “Fair
Market Value” means, as of any date, the value of Shares determined as follows:


 


(i)            If
the Ordinary Shares are listed on any established stock exchange or a national market system, including, without limitation, the
Nasdaq Global Market or the Nasdaq Capital Market, its Fair Market Value will be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for the day of determination, as reported in The
Wall Street Journal or such other source as the Administrator deems reliable;


 


(ii)           If
the Ordinary Shares are regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market
Value of an Ordinary Share will be the mean between the high bid and low asked prices for the Ordinary Shares for the day of determination,
as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or


 









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(iii)          In
the absence of an established market for the Ordinary Shares, the Fair Market Value will be determined in good faith by the Administrator; provided that
with respect to Options granted to a U.S. Participant, Fair Market Value shall be determined pursuant to a valuation of the Company
by an independent appraisal that meets the requirements of Section 401(a)(28)(C) of the Code or another methodology for
determining fair market value that complies with Section 409A of the Code.


 


The Administrator
also may adopt a different methodology for determining Fair Market Value with respect to one or more Awards if a different methodology
is necessary or advisable to secure any intended favorable tax, legal or other treatment for the particular Award(s) (for
example, and without limitation, the Administrator may provide that Fair Market Value for purposes of one or more Awards will be
based on an average of closing prices (or the average of high and low daily trading prices) for a specified period preceding the
relevant date).


 


Any determination
as to Fair Market Value made pursuant to this Plan shall be made without regard to any restriction other than a restriction which,
by its terms, will never lapse, and shall be final, conclusive and binding on all persons with respect to Awards granted under
this Plan.


 


(s)    “Fiscal
Year” means the fiscal year of the Company.


 


(t)    “Hong
Kong” means the Hong Kong Special Administrative Region of the People’s Republic of China.


 


(u)   “Incentive
Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422
of the Code, as designated in the applicable Award Agreement.


 


(v)   “Nonstatutory
Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock
Option.


 


(w)  “Option”
means an option to purchase and acquire Shares granted pursuant to the Plan.


 


(x)   “Ordinary
Share” means an Ordinary Share of the Company, par value US$0.00001 per share, or the number or fraction of American
Depositary Shares representing such ordinary share.


 


(y)   “Other
Share-Based Awards” means any other awards not specifically described in the Plan that are valued in whole or in part
by reference to, or are otherwise based on, Ordinary Shares and are created by the Administrator pursuant to Section 11 of
the Plan.


 


(z)   “Outside
Director” means a Director who is not an Employee.


 


(aa)         “Parent”
means a “parent corporation” with respect to the Company, whether now or hereafter existing, as defined in Section 424(e) of
the Code.


 









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(bb)         “Participant”
means the holder of an outstanding Award granted under the Plan.


 


(cc)         “Performance
Period” means the time period during which the performance objectives relating to a grant of Performance Shares or Performance
Units must be met.


 


(dd)         “Performance
Share” means an Award granted to a Service Provider pursuant to Section 10 of the Plan.


 


(ee)         “Performance
Unit” means an Award granted to a Service Provider pursuant to Section 10 of the Plan.


 


(ff)          “Period
of Restriction” means the period during which the transfer of Restricted Shares are subject to restrictions and, therefore,
subject to vesting.  Such restrictions may be based on the passage of time, the achievement of target levels of performance,
or the occurrence of other events as determined by the Administrator.


 


(gg)         “Plan”
means this 2010 Share Incentive Plan.


 


(hh)         “Qualified
Public Offering” means the closing of an underwritten public offering of not less than 15% of the Ordinary Shares (i) pursuant
to an effective registration statement under the Securities Act or (ii) on the basis of an approved prospectus and/or pursuant
to a valid registration, qualification or filing under Applicable Law of another jurisdiction, in each case of the Shares or other
equity securities of the Company; provided, however, that a Qualified Public Offering shall not include
a registration relating solely to employee benefit plans or to a Rule 145 transaction under the Securities Act or to similar
registrations under Applicable Law of another jurisdiction.


 


(ii)   “Restricted
Share” means Shares issued pursuant to a Restricted Share award granted pursuant Section 7 of the Plan or issued
pursuant to the early exercise of an Option.


 


(jj)           “Restricted
Share Unit” means a right to receive Shares in the settlement of an Award granted pursuant to Section 8 of the Plan.


 


(kk)         “Securities
Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


(ll)           “Service
Provider” means an Employee, Director or Consultant.


 


(mm)      “Share”
means an Ordinary Share or the cash equivalent thereof, in each case as adjusted in accordance with Section 15 of the Plan.


 


(nn)         “Share
Appreciation Right” or “SAR” means an Award granted pursuant to Section 9 of the Plan.


 


(oo)         “Subsidiary”
means a “subsidiary corporation” with respect to the Company, whether now or hereafter existing, as defined in Section 424(f) of
the Code.


 









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(pp)         “U.S.
Participant” means a Participant who is or becomes a U.S. taxpayer, or who is otherwise physically resident in the United
States.


 


3.           Shares
Subject to the Plan.


 


(a)   Shares
Subject to the Plan.  Subject to the provisions of Section 15 of the Plan, the maximum aggregate number of Shares
that may be issued under the Plan is 4,500,000; plus an annual increase on the first day of each Fiscal Year, commencing with the
first Fiscal Year after a Qualifying Public Offering, equal to the lesser of (i) 1.0% of the outstanding
Shares on the first day of the Fiscal Year; or (ii) such lesser amount of Shares as determined by the Board.  The Shares
may be authorized, but unissued or reacquired Ordinary Shares.  Shares shall not be deemed to have been issued pursuant to
the Plan with respect to any portion of an Award that is settled in cash.  Upon payment in Shares pursuant to the exercise
of an Award, the number of Shares available for issuance under the Plan shall be reduced only by the number of Shares actually
issued in such payment.  If a Participant pays the exercise price of an Award through the tender of Ordinary Shares, if Ordinary
Shares are tendered or Shares withheld to satisfy any Company withholding obligations, the number of Ordinary Shares so tendered
or Shares withheld shall again be available for issuance pursuant to future Awards under the Plan.


 


(b)   Lapsed
Awards.  If any outstanding Award expires or is terminated or canceled without having been exercised or settled in full,
the Shares allocable to the terminated portion of such Award shall again be available for grant under the Plan.


 


(c)   Share
Reserve.  The Company, during the term of the Plan, shall at all times reserve and keep available such number of Ordinary
Shares as will be sufficient to satisfy the requirements of the Plan.


 


(d)   Application
to American Depositary Shares (“ADSs”).  For purposes of calculating the number of Shares issued under this
Plan (and for purposes of calculating any other Share limit set forth herein), the issuance of an ADS shall be deemed to equal
one Share, provided, however, that if the number of Shares represented by an ADS is other than on a one-to-one
basis, the number of Shares issued under this Plan (and any other Share limit set forth herein) shall be adjusted to reflect such
issuance of ADSs.


 


4.           Administration
of the Plan.


 


(a)   Procedure.


 


(i)            Multiple
Administrative Bodies.  Different Committees with respect to different groups of Service Providers may administer the
Plan.


 


(ii)           Other
Administration.  Other than as provided above, the Plan will be administered by (A) the Board or (B) a Committee,
which committee will be constituted by the Board to satisfy Applicable Laws.


 


(iii)          Delegation
of Authority for Day-to-Day Administration.  Except to the extent prohibited by Applicable Law, the Administrator
may delegate to one or more individuals the day-to-day administration of the Plan and any of the functions assigned to it in
this Plan.  Such delegation may be revoked at any time.


 






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(b)   Powers
of the Administrator.  Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific
duties delegated by the Board to such Committee, the Administrator will have the authority, in its discretion:


 


(i)           to
determine Fair Market Value;


 


(ii)          to
select the Service Providers to whom Awards may be granted hereunder;


 


(iii)         to
determine the number of Shares to be covered by each Award granted hereunder;


 


(iv)          to
approve forms of agreement for use under the Plan;


 


(v)           to
determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder.  Such terms
and conditions include, but are not limited to, the exercise or purchase price, the time or times when Awards may be granted, exercised
or settled (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture, cancellation or repurchase
restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such
factors as the Administrator, in its sole discretion, will determine;


 


(vi)          to
reduce the exercise or purchase price of any Award;


 


(vii)         to
institute an Exchange Program;


 


(viii)        to
construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;


 


(ix)          to
prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of satisfying Applicable Laws, including, without limitation, the Exchange Act and the Securities
Act, and/or qualifying for preferred tax treatment under Applicable Laws, including, without limitation, the Code;


 


(x)           to
modify or amend each Award (subject to Section 18(c) of the Plan), including (A) the discretionary authority to
extend the post-termination exercisability period of Awards longer than is otherwise provided for in the Plan and (B) accelerate
the satisfaction of any vesting or exercisability criteria or waiver of forfeiture, cancellation or repurchase restrictions;


 






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(xi)          to
allow Participants to satisfy withholding tax obligations by electing to have the Company withhold from the Shares to be
issued upon exercise or vesting of an Award that number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld.  The Fair Market Value of any Shares to be withheld will be determined on the date that the
amount of tax to be withheld will be determined by the Administrator in its discretion, which determination shall be final,
binding and conclusive on all Participants and any other holders of Awards.  All elections by a Participant to have
Shares withheld for this purpose will be made in such form and under such conditions as the Administrator may deem necessary
or advisable;


 


(xii)         to
authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted
by the Administrator,





 


(xiii)        to
allow a Participant to defer the receipt of the delivery or payment of Shares that would otherwise be due to such Participant under
an Award;


 


(xiv)        to
determine whether Awards will be settled in Ordinary Shares, cash or in any combination thereof;


 


(xv)         to
determine whether Awards will be adjusted for Dividend Equivalents;


 


(xvi)        to
establish a program whereby Service Providers designated by the Administrator can reduce compensation otherwise payable in cash
in exchange for Awards under the Plan;


 


(xvii)       to
impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by
a Participant or other subsequent transfers by the Participant of any Ordinary Shares issued as a result of or under an Award,
including without limitation, (A) restrictions under an insider trading policy and (B) restrictions as to the use of
a specified brokerage firm for such resales or other transfers; and


 


(xviii)      to
make all other determinations deemed necessary or advisable for administering the Plan.


 


(c)   Effect
of Administrator’s Decision.  The Administrator’s decisions, determinations and interpretations will be final,
binding and conclusive on all Participants and any other holders of Awards.


 


5.           Eligibility;
Rights as a Service Provider.  Nonstatutory Stock Options, Restricted Stock, Stock Appreciation Rights, Performance Units,
Performance Shares, Restricted Stock Units and Other Stock Based Awards may be granted to Service Providers.  Incentive Stock
Options may be granted only to Employees.  Participants will consist of those Service Providers and Employees as the Administrator
in its sole discretion determines and whom the Administrator may designate from time to time to receive awards.  Neither the
Plan nor any Award shall confer upon a Participant any right with respect to continuing his or her relationship as a Service Provider,
nor shall they interfere in any way with the right of the Participant or the right of the Company or its Parent or Subsidiaries
to terminate such relationship at any time, with or without cause.


 









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6.           Options.


 


(a)   Term
of Option.  The term of each Option will be stated in the Award Agreement.  In the case of an Incentive Stock Option,
the term will be ten (10) years from the date of grant or such shorter term as may be provided in the Award Agreement. 
Moreover, in the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted,
owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company
or any Parent or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or such
shorter term as may be provided in the Award Agreement.


 


(b)   Option
Exercise Price and Consideration.


 


(i)            Exercise
Price.  The per Share exercise price for the Shares to be issued pursuant to exercise of an Option will be determined
by the Administrator, subject to the following:


 


(1) In
the case of an Incentive Stock Option


 


(A) granted
to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price
will be no less than 110% of the Fair Market Value per Share on the date of grant.


 


(B) granted
to any Employee other than an Employee described in paragraph (A) immediately above, the per Share exercise price will be
no less than 100% of the Fair Market Value per Share on the date of grant.


 


(2) In
the case of a Nonstatutory Stock Option, the per Share exercise price will be determined by the Administrator.  In the case
of a Nonstatutory Stock Option intended to qualify as “performance-based compensation” within the meaning of Section 162
(m) of the Code, the per Share exercise price will be no less than 100% of the Fair Market Value per Share on the date of
grant.


 


(3) Notwithstanding
the foregoing, Incentive Stock Options may be granted with a per Share exercise price of less than 100% of the Fair Market
Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of
the Code.


 


(ii)         Waiting
Period and Exercise Dates.  At the time an Option is granted, the Administrator will fix the period within which the Option
may be exercised and will determine any conditions that must be satisfied before the Option may be exercised, including, without
limitation, the achievement of performance objectives.  The Administrator, in its sole discretion, may accelerate the satisfaction
of such conditions at any time.


 


(iii)        Form of
Consideration.  The Administrator will determine the acceptable form of consideration for exercising an Option, including
the method of payment.  Such consideration, to the extent permitted by Applicable Laws, may consist entirely of:


 


(1)           cash;


 









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(2)           check;


 


(3)           promissory
note;


 


(4)           Shares
which meet the conditions established by the Administrator to avoid adverse accounting consequences (as determined by the Administrator);


 


(5)           consideration
received by the Company under a cashless exercise program implemented by the Company in connection with the Plan;


 


(6)           a
reduction in the amount of any Company liability to the Participant, including any liability attributable to the Participant’s
participation in any Company-sponsored deferred compensation program or arrangement;


 


(7)           any
combination of the foregoing methods of payment; or


 


(8)           such
other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws.


 


(c)   Incentive
Stock Option $100,000 Rule.  Each Option will be designated in the Award Agreement as either an Incentive Stock Option
or a Nonstatutory Stock Option.  However, notwithstanding such designation, to the extent that the aggregate Fair Market Value
of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar
year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options will be treated as Nonstatutory
Stock Options.  For purposes of this Section 7(c), Incentive Stock Options will be taken into account in the order
in which they were granted.  The Fair Market Value of the Shares will be determined as of the time the Option with respect
to such Shares is granted.


 


(d)   Exercise
of Option.


 


(i)          Procedure
for Exercise; Rights as a Shareholder.  Any Option granted hereunder will be exercisable according to the terms of the
Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. 
An Option may not be exercised for a fraction of a Share.


 


An Option
will be deemed exercised when the Company receives: (x) written or electronic notice of exercise (in accordance with the
Award Agreement) from the person entitled to exercise the Option, and (y) full payment for the Shares with respect to
which the Option is exercised (including provision for any applicable tax withholding).  Full payment may consist of any
consideration and method of payment authorized by the Administrator and permitted by the Award Agreement, the Plan and
Applicable Laws.  Shares issued upon exercise of an Option will be issued in the name of the Participant or, if
requested by the Participant, in the name of the Participant and his or her spouse.  Until the Shares are issued (as
evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no
right to vote or receive dividends or any other rights as a shareholder will exist with respect to the Awarded Shares,
notwithstanding the exercise of the Option.  The Company will issue (or cause to be issued) such Shares promptly after
the Option is exercised.  No adjustment will be made for a dividend or other right for which the record date is prior to
the date the Shares are issued, except as provided in Section 15 of the Plan or the applicable Award Agreement.


 






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Exercising an Option
in any manner will decrease the number of Shares thereafter available for sale under the Option, by the number of Shares as to
which the Option is exercised.


 


(ii)           Termination
of Relationship as a Service Provider - Generally.  If a Participant ceases to be a Service Provider, other than upon
the Participant’s death or Disability, the Participant may exercise his or her Option within such period of time as is specified
in the Award Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration
of the term of such Option as set forth in the Award Agreement).  In the absence of a specified time in the Award Agreement,
the Option will remain exercisable for sixty (60) days following the Participant’s termination.  Unless otherwise provided
by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered
by the unvested portion of the Option will revert to the Plan.  If after termination the Participant does not exercise his
or her Option as to all of the vested Shares within the time specified by the Administrator, the Option will terminate, and the
remaining Shares covered by such Option will revert to the Plan.


 


(iii)          Disability
of Participant.  If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the
Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent the
Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth
in the Award Agreement).  In the absence of a specified time in the Award Agreement, the Option will remain exercisable for
twelve (12) months following the Participant’s termination.  Unless otherwise provided by the Administrator, if on the
date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of
the Option will revert to the Plan.  If after termination the Participant does not exercise his or her Option as to all of
the vested Shares within the time specified by the Administrator, the Option will terminate, and the remaining Shares covered by
such Option will revert to the Plan.


 


(iv)          Death
of Participant.  If a Participant dies while a Service Provider, the Option may be exercised following the
Participant’s death within such period of time as is specified in the Award Agreement to the extent that the Option is
vested on the date of death (but in no event may the Option be exercised later than the expiration of the term of such Option
as set forth in the Award Agreement), by the Participant’s designated beneficiary, provided such beneficiary has been
designated prior to the Participant’s death in a form acceptable to the Administrator. If no such beneficiary has been
designated by the Participant, then such Option may be exercised by the personal representative of the Participant’s
estate or by the persons to whom the Option is transferred pursuant to the Participant’s will or in accordance with the
laws of descent and distribution.  In the absence of a specified time in the Award Agreement, the Option will remain
exercisable for twelve (12) months following the Participant’s death.  Unless otherwise provided by the
Administrator, if at the time of death the Participant is not vested as to his or her entire Option, the Shares covered by
the unvested portion of the Option will immediately revert to the Plan.  If the Option is not exercised as to all of the
vested Shares within the time specified by the Administrator, the Option will terminate, and the remaining Shares covered by
such Option will revert to the Plan.


 






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7.           Restricted
Shares.


 


(a)   Grant
of Restricted Shares.  Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to
time, may grant Restricted Shares to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.


 


(b)   Restricted
Share Agreement.  Each grant of Restricted Shares will be evidenced by an Award Agreement that will specify the Period
of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion,
will determine.  Unless the Administrator determines otherwise, Restricted Shares will be held by the Company as escrow agent
until the restrictions on such Shares have lapsed.


 


(c)   Transferability. 
Except as provided in this Section 7 or Section 15, Restricted Shares may not be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.


 


(d)   Other
Restrictions.  The Administrator, in its sole discretion, may impose such other restrictions on Restricted Shares as it
may deem advisable or appropriate.


 


(e)   Removal
of Restrictions.  Except as otherwise provided in this Section 7, Restricted Shares covered by each Restricted Share
grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction. 
The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed.


 


(f)    Voting
Rights.  During the Period of Restriction, Participants holding Restricted Shares granted hereunder may exercise full
voting rights with respect to those Shares, unless the Administrator determines otherwise.


 


(g)   Dividends
and Other Distributions.  During the Period of Restriction, Participants’ Restricted Shares will be entitled to
receive all dividends and other distributions paid with respect to such Shares unless otherwise provided in the Award Agreement. 
If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability
and forfeitability as the Restricted Shares with respect to which they were paid.


 


(h)   Return
of Restricted Shares to Company.  On the date set forth in the Award Agreement, the Restricted Shares for which restrictions
have not lapsed will revert to the Company and again will become available for grant under the Plan.


 


8.           Restricted
Share Units.


 


(a)   Grant
of Restricted Share Units.  Subject to the terms and provisions of the Plan, the Administrator, at any time and from time
to time, may grant Restricted Share Units to Service Providers in such amounts as the Administrator, in its sole discretion, will
determine.


 






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(b)   Number
of Shares.  Each Award Agreement will specify the number of Awarded Shares and will provide for the adjustment of such
number in accordance with Section 15 of the Plan.


 


(c)   Settlement
of Restricted Share Units.


 


(i)            Procedure;
Rights as a Shareholder.  Any Restricted Share Unit granted hereunder will be settled according to the terms of the Plan
and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement.  Until
the Restricted Share Units are settled and the Awarded Shares are delivered (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right to vote, if applicable, or receive dividends or
any other rights as a shareholder or depositary receipt holder will exist with respect to the Awarded Shares.  No adjustment
will be made for a dividend or other right for which the record date is prior to the date the Shares are delivered, except as provided
in Section 15 of the Plan or the applicable Award Agreement.


 


(ii)           Restrictions
on Transfer of Shares.  Awarded Shares delivered upon settlement of Restricted Units may be subject to such special forfeiture
conditions, rights of repurchase or redemption, rights of first refusal, and other transfer restrictions as the Administrator may
determine.  The restrictions described in the preceding sentence shall be referenced in the applicable Award Agreement and
shall apply in addition to any restrictions that may apply to holders of Ordinary Shares generally under the articles of association
of the Company.


 


(d)   Cessation
of Services.  Each Award Agreement will specify the consequence of a Participant’s ceasing to be a Service Provider
prior to the settlement of a grant of Restricted Share Units.


 


9.           Share
Appreciation Rights.


 


(a)   Grant
of SARs.  Subject to the terms and conditions of the Plan, a SAR may be granted to Service Providers at any time and from
time to time as will be determined by the Administrator, in its sole discretion.


 


(b)   Number
of Shares.  The Administrator will have complete discretion to determine the number of SARs granted to any Service Provider.


 


(c)   Exercise
Price and Other Terms.  The Administrator, subject to the provisions of the Plan, will have complete discretion to determine
the terms and conditions of SARs granted under the Plan.


 


(d)   Exercise
of SARs.  SARs will be exercisable on such terms and conditions as the Administrator, in its sole discretion, will determine. 
The Administrator, in its sole discretion, may accelerate exercisability at any time.


 






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(e)   SAR
Agreement.  Each SAR grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the
SAR, the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will determine.


 


(f)    Expiration
of SARs.  An SAR granted under the Plan will expire upon the date determined by the Administrator, in its sole discretion,
and set forth in the Award Agreement.  Notwithstanding the foregoing, the rules of Sections 6(d)(ii), 6(d)(iii) and
6(d)(iv) also will apply to SARs.


 


(g)   Payment
of SAR Amount.  Upon exercise of an SAR, a Participant will be entitled to receive payment from the Company in an amount
determined by multiplying:


 


(i)            the
difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times


 


(ii)           the
number of Shares with respect to which the SAR is exercised.


 


At the discretion
of the Administrator, the payment upon SAR exercise may be in cash, in Shares of equivalent value, or in some combination thereof.


 


10.         Performance
Units and Performance Shares.


 


(a)   Grant
of Performance Units/Shares.  Subject to the terms and conditions of the Plan, Performance Units and Performance Shares
may be granted to Service Providers at any time and from time to time, as will be determined by the Administrator, in its sole
discretion.  The Administrator will have complete discretion in determining the number of Performance Units and Performance
Shares granted to each Participant.


 


(b)   Value
of Performance Units/Shares.  Each Performance Unit will have an initial value that is established by the Administrator
on or before the date of grant.  Each Performance Share will have an initial value equal to the Fair Market Value of a Share
on the date of grant.


 


(c)   Performance
Objectives and Other Terms.  The Administrator will set performance objectives in its discretion which, depending on the
extent to which they are met, will determine the number or value of Performance Units/Shares that will be paid out to the Participant. 
Each Award of Performance Units/Shares will be evidenced by an Award Agreement that will specify the Performance Period, and such
other terms and conditions as the Administrator, in its sole discretion, will determine.  The Administrator may set performance
objectives based upon the achievement of Company-wide, divisional, or individual goals (including solely continued service), or
any other basis determined by the Administrator in its discretion.


 


(d)   Earning
of Performance Units/Shares.  After the applicable Performance Period has ended, the holder of Performance
Units/Shares will be entitled to receive a payout of the number of Performance Units/Shares earned by the Participant over
the Performance Period, to be determined as a function of the extent to which the corresponding performance objectives have
been achieved.  After the grant of a Performance Unit/Share, the Administrator, in its sole discretion, may reduce or
waive any performance objectives for such Performance Unit/Share.


 






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(e)   Form and
Timing of Payment of Performance Units/Shares.  Payment of earned Performance Units/Shares will be made after the expiration
of the applicable Performance Period at the time determined by the Administrator.  The Administrator, in its sole discretion,
may pay earned Performance Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the
value of the earned Performance Units/Shares at the close of the applicable Performance Period) or in a combination of cash and
Shares.


 


(f)    Cancellation
of Performance Units/Shares.  On the date set forth in the Award Agreement, all unearned or unvested Performance Units/Shares
will be forfeited to the Company, and again will be available for grant under the Plan.


 


11.         Other
Share-Based Awards.  Other Share-Based Awards may be granted either alone, in addition to, or in tandem with, other Awards
granted under the Plan and/or cash awards made outside of the Plan.  The Administrator shall have authority to determine the
Service Providers to whom and the time or times at which Other Share-Based Awards shall be made, the amount of such Other Share-Based
Awards, and all other conditions of the Other Share-Based Awards including any dividend and/or voting rights.


 


12.         Leaves
of Absence.  Unless the Administrator provides otherwise, vesting of Awards granted hereunder will be suspended during
any unpaid leave of absence and will resume on the date the Participant returns to work on a regular schedule as determined by
the Company; provided,however, that no vesting credit will be awarded for the time vesting has been suspended
during such leave of absence.  A Service Provider will not cease to be an Employee in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of the Company or between the Company or any Parent or Subsidiary
of the Company.  For purposes of Incentive Stock Options, no leave of absence may exceed ninety (90) days, unless reemployment
upon expiration of such leave is guaranteed by statute or contract.  If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, then three months following the 91st day of such leave any Incentive Stock Option
held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory
Stock Option.


 


13.         Restrictions
on Transfer of Securities.  Shares issued upon grant, exercise or settlement of an Award may be subject to such special
forfeiture conditions, rights of repurchase or redemption, rights of first refusal, and other transfer restrictions as the Administrator
may determine.  The restrictions described in the preceding sentence shall be referenced in the applicable Award Agreement
and shall apply in addition to any restrictions that may apply to holders of Ordinary Shares under the articles of association
of the Company.


 


14.         Non-Transferability
of Awards.  Unless determined otherwise by the Administrator, an Award may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may
be exercised, during the lifetime of the Participant, only by the Participant.  If the Administrator makes an Award
transferable, such Award will contain such additional terms and conditions as the Administrator deems appropriate.


 






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15.         Adjustments;
Dissolution or Liquidation; Change in Control.


 


(a)   Adjustments. 
In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase,
or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the
Ordinary Shares occurs such that an adjustment is determined by the Administrator (in its sole discretion) to be appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then
the Administrator shall, in such manner as it may deem equitable, adjust the number and class of Shares which may be delivered
under the Plan, the number, class and price of Shares subject to outstanding awards, and the numerical limits in Section 3. 
The adjustment contemplated in this Section 15(a) shall be made by the Board or, if delegated by the Board to the Committee,
by the Committee, whose determination shall be final, binding and conclusive on all parties.  Except as expressly provided
herein, no issuance by the Company of equity securities of the Company of any class, or securities convertible into equity securities
of the Company of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number, type,
or price of Shares subject to an Award.  Notwithstanding the preceding, the number of Shares subject to any Award always shall
be a whole number.


 


(b)   Dissolution
or Liquidation.  In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify
each Participant as soon as practicable prior to the effective date of such proposed transaction.  The Administrator in its
discretion may provide for a Participant to have the right to exercise his or her Award, to the extent applicable, until ten (10) days
prior to such transaction as to all of the Awarded Shares covered thereby, including Shares as to which the Award would not otherwise
be exercisable.  In addition, the Administrator may provide that any Company repurchase option, cancellation or forfeiture
rights applicable to any Award shall lapse 100%, and that any Award vesting shall accelerate 100%, provided the proposed dissolution
or liquidation takes place at the time and in the manner contemplated.  To the extent it has not been previously exercised
or vested, an Award will terminate immediately prior to the consummation of such proposed action.


 


(c)   Change
in Control.


 


(i)            Share
Options and SARs.  In the event of a Change in Control, each outstanding Award shall be assumed or an equivalent
Award substituted by the successor corporation or a Parent or Subsidiary of the successor corporation or other business
entity.  Unless determined otherwise by the Administrator, in the event that the successor corporation refuses to assume
or substitute for the Award, the Participant shall fully vest in and have the right to exercise the Award as to all of the
Awarded Shares, including Shares as to which it would not otherwise be vested or exercisable.  If an Award is not
assumed or substituted in the event of a Change in Control, the Administrator shall notify the Participant in writing or
electronically that the Award shall be exercisable, to the extent vested, for a period of up to thirty (30) days from the
date of such notice, and the Award shall terminate upon the expiration of such period.  For the purposes of this
paragraph, the Award shall be considered assumed if, following the Change in Control, the Award confers the right to purchase
or receive, for each Awarded Share subject to the Award immediately prior to the Change in Control, the consideration
(whether stock, cash, or other securities or property) received in the Change in Control by holders of Ordinary Shares for
each Ordinary Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
Ordinary Shares); provided,however, that if such consideration received in the Change in Control is not
solely shares of the successor corporation or its Parent, the Administrator may, with the consent of the successor
corporation, provide for the consideration to be received upon the exercise of the Award, for each share of Awarded Shares
subject to the Award, to be solely shares of the successor corporation or its Parent equal in fair market value to the per
share consideration received by holders of Ordinary Shares in the Change in Control.


 






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(ii)           Restricted
Shares, Performance Shares, Performance Units, Restricted Share Units and Other Share-Based Awards.  In the event of a
Change in Control, each outstanding Award of Restricted Shares, Performance Shares, Performance Units, Other Share-Based Awards
and Restricted Share Unit shall be assumed or an equivalent award substituted by the successor corporation or a Parent or Subsidiary
of the successor corporation.  Unless determined otherwise by the Administrator, in the event that the successor corporation
refuses to assume or substitute for the Award, the Participant shall fully vest in the Award including as to Shares/Units that
would not otherwise be vested, all applicable restrictions will lapse, and all performance objectives and other vesting criteria
will be deemed achieved at targeted levels.  For the purposes of this paragraph, an Award of Restricted Shares, Performance
Shares, Performance Units, Other Share-Based Awards and Restricted Share Units shall be considered assumed if, following the Change
in Control, the award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change
in Control (and if a Restricted Share Unit or Performance Unit, for each Share as determined based on the then current value of
the unit), the consideration (whether stock, cash, or other securities or property) received in the Change in Control by holders
of Ordinary Share for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding Ordinary Shares); provided, however,
that if such consideration received in the Change in Control is not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide that the consideration to be received for each Share
(and if a Restricted Share Unit or Performance Unit, for each Share as determined based on the then current value of the unit)
be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received
by holders of Ordinary Share in the Change in Control.  Notwithstanding anything herein to the contrary, an Award that vests,
is earned, or is paid-out upon the satisfaction of one or more performance goals will not be considered assumed if the Company
or its successor modifies any of the performance goals without the Participant’s consent; provided, however,
a modification to the performance goals only to reflect the successor corporation’s post-Change in Control corporate structure
will not be deemed to invalidate an otherwise valid Award assumption.


 






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(d)   Reservation
of Rights.  Except as provided in this Section 15 and in the applicable Award Agreement, a Participant shall
have no rights by reason of (i) any subdivision or consolidation of Ordinary Shares or other securities of any class,
(ii) the payment of any dividend, or (iii) any other increase or decrease in the number of Ordinary Shares or other
securities of any class.  Any issuance by the Company of equity securities of any class, or securities convertible into
equity securities of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the
number or exercise price of Awarded Shares.  The grant of an Award shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure, to merge or
consolidate or to dissolve, liquidate, sell, or transfer all or any part of its business or assets.


 


16.         Date
of Grant.  The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the determination
granting such Award, or such other later date as is determined by the Administrator.  For purposes of this Plan, the determination
of grant of an Award made by the Administrator shall not occur unless and until all required Board and shareholder approval has
been obtained and the key terms of the Award, including any vesting period, the exercise price and the number of Awarded Shares
subject to an Award, have been determined.  Notice of the determination will be provided to each Participant as soon as practicable,
but in no event more than five (5) working days, after the date of such grant.


 


17.         Term
of Plan.  The Plan will become effective upon its adoption by the Board.  It will continue in effect for a term of
ten (10) years unless terminated earlier under Section 18 of the Plan.


 


18.         Amendment
and Termination of the Plan.


 


(a)   Amendment
and Termination.  The Board may at any time amend, alter, suspend or terminate the Plan.


 


(b)   Shareholder
Approval.  The Company will obtain shareholder approval of any Plan amendment to the extent necessary and desirable to
comply with Applicable Laws.


 


(c)   Effect
of Amendment or Termination.  No amendment, alteration, suspension, or termination of the Plan will materially impair
the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement
must be in writing and signed by the Participant and the Company.  Termination of the Plan will not affect the Administrator’s
ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such
termination.


 


19.         Conditions
Upon Issuance of Shares.


 


(a)   Legal
Compliance.  Notwithstanding any other provision of the Plan or any agreement entered into by the Company pursuant to
the Plan, Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and
delivery of such Shares will comply with Applicable Laws, including, without limitation, the Securities Act, the Exchange Act,
U.S. state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Company’s
securities may then be traded, and will be further subject to the approval of counsel for the Company with respect to such compliance.


 






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(b)   Investment
Representations.  As a condition to the exercise or receipt of an Award, the Company may require the person exercising
or receiving such Award to represent and warrant at the time of any such exercise or receipt that the Shares are being purchased
only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required.


 


20.         Severability. 
Notwithstanding any contrary provision of the Plan or an Award to the contrary, if any one or more of the provisions (or any part
thereof) of this Plan or the Awards shall be held invalid, illegal, or unenforceable in any respect, such provision shall be modified
so as to make it valid, legal, and enforceable, and the validity, legality, and enforceability of the remaining provisions (or
any part thereof) of the Plan or Award, as applicable, shall not in any way be affected or impaired thereby.


 


21.         Inability
to Obtain Authority.  The inability of the Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will
relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority
will not have been obtained.


 


22.         Sections
409A and 457A.  Notwithstanding other provisions of the Plan or any Award Agreement, no Award may be granted, deferred,
accelerated, extended, paid out or modified under this Plan in a manner that would result in the imposition of an additional tax
under Section 409A or Section 457A of the Code upon a Participant.  In the event that it is reasonably determined
by the Board or, if delegated by the Board to the Administrator, by the Administrator that, as a result of Section 409A of
the Code, payments in respect of any Award under the Plan may not be made at the time contemplated by the terms of the Plan or
the relevant Award Agreement, as the case may be, without causing the Participant holding such Award to be subject to taxation
under Section 409A of the Code, including as a result of the fact that the Participant is a “specified employee”
under Section 409A of the Code, the Company will make such payment on the first day that would not result in the Participant
incurring any tax liability under Section 409A of the Code.  The Company will use commercially reasonable efforts to
implement the provisions of this Section 22 in good faith; provided that neither the Company, nor the Administrator
nor any of the Company’s employees, directors or representatives will have any liability to Participants with respect to
this Section 22.


 


23.         Choice
of Law.  The Plan will be governed by and construed in accordance with the laws of Hong Kong.


 








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