China TransInfo Technology Corp.: Exhibit 10.3 - Filed by newsfilecorp.com






Exhibit 10.3

CHINA TRANSINFO TECHNOLOGY CORP. 

2009 EQUITY INCENTIVE PLAN 

STOCK OPTION AGREEMENT 

Unless otherwise defined herein, the terms in the Stock Option
Agreement (the “Option Agreement”) have the same meanings as defined in the
China TransInfo Technology Corp. 2009 Equity Incentive Plan (the “Plan”). 

	I. 	NOTICE OF STOCK OPTION
      GRANT 
	 	  
	  	Optionee: 	Walter Teh Ming Kwauk 
	 	 	  
	  	Address: 	 


You have been granted an Option to purchase Common Stock of the
Company, subject to the terms and conditions of the Plan and this Option
Agreement, as follows: 


	Grant Date: 	December 13, 2011 
	 	 
	Vesting Commencement Date: 	December 13, 2011 
	 	 
	Exercise Price per Share: 	$3.62
	 	 
	Total Number of Shares Granted: 	30,000 
	 	 
	Total Exercise Price: 	$108,600 
	 	 
	Type of Option: 	Nonstatutory Stock Option
	 	 
	Expiration Date: 	December 13, 2015 
	 	 
	Vesting Schedule: 	  



The Option shall vest in equal installments on a quarterly
basis over a three-year period beginning on the Date of Grant.

Termination Period: 

To the extent vested, this Option will be exercisable for three
(3) months after Optionee ceases to be a Service Provider, unless termination is
due to Optionee’s death or Disability, in which case this Option will be
exercisable for twelve (12) months after Optionee ceases to be a Service
Provider. Notwithstanding the foregoing sentence, in no event may this Option be
exercised after any termination of the Optionee as a Service Provider determined
by the Company’s Board to be for Cause or after the Expiration Date as provided above and this
Option may be subject to earlier termination as provided in the Plan.




“Cause” has the meaning ascribed to such term or words of
similar import in Optionee’s written employment or service contract with the
Company or its Parent or any Subsidiary and, in the absence of such agreement or
definition, means Optionee’s (i) conviction of, or plea of nolo contendere to, a
felony or any other crime involving moral turpitude; (ii) fraud on or
misappropriation of any funds or property of the Company or its subsidiaries, or
any affiliate, customer or vendor; (iii) personal dishonesty, incompetence,
willful misconduct, willful violation of any law, rule or regulation (other than
minor traffic violations or similar offenses), or breach of fiduciary duty which
involves personal profit; (iv) willful misconduct in connection with Optionee’s
duties or willful failure to perform Optionee’s responsibilities in the best
interests of the Company or its subsidiaries; (v) illegal use or distribution of
drugs; (vi) violation of any rule, regulation, procedure or policy of the
Company or its subsidiaries; or (vii) breach of any provision of any employment,
non-disclosure, non-competition, non-solicitation or other similar agreement
executed by Optionee for the benefit of the Company or its subsidiaries, all as
determined by the Company’s Board, which determination will be conclusive.

	II. 	
      AGREEMENT



1. Grant of Option. The Administrator grants to the
Optionee named in the Notice of Stock Option Grant in Part I of this Option
Agreement, an Option to purchase the number of Shares set forth in the Notice of
Stock Option Grant, at the exercise price per Share set forth in the Notice of
Stock Option Grant (the “Exercise Price”), and subject to the terms and
conditions of the Plan, which is incorporated herein by reference. In the event
of a conflict between the terms and conditions of the Plan and this Option
Agreement, the terms and conditions of the Plan prevail. 

If designated in the Notice of Stock Option Grant as an
Incentive Stock Option, this Option is intended to qualify as an Incentive Stock
Option as defined in Code section 422. Nevertheless, to the extent that it
exceeds the $100,000 rule of Code section 422(d), this Option will be treated as
a Nonstatutory Stock Option. 

2. Exercise of Option. 

(a) Right to Exercise. This Option is exercisable during
its term in accordance with the Vesting Schedule set out in the Notice of Stock
Option Grant and with the applicable provisions of the Plan and this Option
Agreement. 

(b) Method of Exercise. This Option is exercisable by
(i) delivery of an exercise notice in the form attached as Exhibit A (the
“Exercise Notice”) or in a manner and pursuant to procedures as the
Administrator may determine, which will state the election to exercise the
Option, the number of Shares with respect to which the Option is being
exercised, and other representations and agreements as may be required by the
Company and (ii) paying the Company in full the aggregate Exercise Price as to
all Shares being acquired, together with any applicable tax withholding.

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This Option will be deemed to be exercised upon receipt by the
Company of a fully executed Exercise Notice accompanied by the aggregate
Exercise Price, together with any applicable tax withholding.

No Shares will be issued pursuant to the exercise of an Option
unless the issuance and exercise of Shares complies with Applicable Laws.
Assuming compliance, for income tax purposes the Shares will be considered
transferred to the Optionee on the date on which the Option is exercised with
respect to the Shares.

3. Method of Payment. The aggregate Exercise Price may
be paid by any of the following, or a combination thereof, at the election of
the Optionee: 

(a) cash; 

(b) check;

(c) promissory note; 

(d) other Shares, provided Shares have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option will be exercised;

(e) by asking the Company to withhold Shares from the total
Shares to be delivered upon exercise equal to the number of Shares having a
value equal to the aggregate Exercise Price of the Shares being acquired; 

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

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

4. Restrictions on Exercise. This Option may not be
exercised (a) until such time as the Plan has been approved by the stockholders
of the Company, or (b) if the issuance of such Shares upon such exercise or the
method of payment of consideration for such shares would constitute a violation
of any Applicable Laws. The Company will be relieved of any liability with
respect to any delayed issuance of shares or its failure to issue shares if such
delay or failure is necessary to comply with Applicable Laws. 

5. Non-Transferability of Option. This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by
Optionee. The terms of the Plan and this Option Agreement are binding upon the
executors, administrators, heirs, successors and assigns of the Optionee. 

6. Term of Option. This Option may be exercised only
within the term set out in the Notice of Stock Option Grant, and may be
exercised during the term only in accordance with the Plan and the terms of this
Option. 

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7. Tax Obligations. 

(a) Withholding Taxes. Optionee agrees to arrange for
the satisfaction of all Federal, state, local and foreign income and employment
tax withholding requirements applicable to the Option exercise. Optionee
acknowledges and agrees that the Company may refuse to honor the exercise and
refuse to deliver the Shares if withholding amounts are not delivered at the
time of exercise. 

(b) Notice of Disqualifying Disposition of ISO Shares.
If the Option granted to Optionee is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the
later of (i) the date two (2) years after the Grant Date, or (ii) the date one
(1) year after the date of exercise, the Optionee must immediately notify the
Company of the disposition in writing. Optionee agrees that Optionee may be
subject to income tax withholding by the Company on the compensation income
recognized by the Optionee.

(c) Code Section 409A. Under Code section 409A, an
Option that vests after December 31, 2004 that was granted with a per Share
exercise price that is determined by the Internal Revenue Service (the “IRS”) to
be less than the Fair Market Value of a Share on the Grant Date (a “discount
option”) may be considered deferred compensation. An Option that is a discount
option may result in (i) income recognition by the Optionee prior to the
exercise of the Option, (ii) an additional twenty percent (20%) tax, and (iii)
potential penalty and interest charges. Optionee acknowledges that the Company
cannot and has not guaranteed that the IRS will agree that the per Share
Exercise Price of this Option equals or exceeds Fair Market Value of a Share on
the Grant Date in a later examination. Optionee agrees that if the IRS
determines that the Option was granted with a per Share exercise price that was
less than the Fair Market Value of a Share on the Grant Date, Optionee will be
solely responsible for any and all resulting tax consequences.

8. No Guarantee of Continued Service. OPTIONEE
ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING
SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL
OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING OPTIONEE) AND
NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING
SHARES HEREUNDER. OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS OPTION
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET
FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT
ALL, AND WILL NOT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE RIGHT OF THE
COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING OPTIONEE) TO
TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE. 

9. Notices. All notices or other communications which
are required or permitted hereunder will be in writing and sufficient if (i)
personally delivered or sent by telecopy, (ii) sent by nationally-recognized
overnight courier or (iii) sent by registered or certified mail, postage
prepaid, return receipt requested, addressed as follows: 

if to the Optionee, to the address (or telecopy number) set
forth on the Notice of Stock Option Grant; and 

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if to the Company, to the attention of the President at the
address set forth below: 

China TransInfo Technolgoy
Corp.
9th Floor, Vision Building, No. 39 Xueyuanlu, 
Haidian
District, Beijing, China 100191 

or to any other address as the party to whom notice is to be
given may have furnished to the other party in writing in accordance herewith.
Any communication will be deemed to have been given (i) when delivered, if
personally delivered, or when telecopied, if telecopied, (ii) on the first
Business Day (as hereinafter defined) after dispatch, if sent by
nationally-recognized overnight courier and (iii) on the fourth Business Day
following the date on which the piece of mail containing the communication is
posted, if sent by mail. As used herein, “Business Day” means a day that is not
a Saturday, Sunday or a day on which banking institutions in the city to which
the notice or communication is to be sent are not required to be open. 

10. Specific Performance. Optionee expressly agrees that
the Company will be irreparably damaged if the provisions of this Option
Agreement and the Plan are not specifically enforced. Upon a breach or
threatened breach of the terms, covenants and/or conditions of this Option
Agreement or the Plan by the Optionee, the Company will, in addition to all
other remedies, be entitled to a temporary or permanent injunction, without
showing any actual damage, and/or decree for specific performance, in accordance
with the provisions hereof and thereof. The Administrator has the power to
determine what constitutes a breach or threatened breach of this Option
Agreement or the Plan. The Administrator’s determinations will be final and
conclusive and binding upon the Optionee. 

11. No Waiver. No waiver of any breach or condition of
this Option Agreement will be deemed to be a waiver of any other or subsequent
breach or condition, whether of like or different nature. 

12. Optionee Undertaking. The Optionee agrees to take
whatever additional actions and execute whatever additional documents the
Company may in its reasonable judgment deem necessary or advisable in order to
carry out or effect one or more of the obligations or restrictions imposed on
the Optionee pursuant to the express provisions of this Option Agreement. 

13. Modification of Rights. The rights of the Optionee
are subject to modification and termination in certain events as provided in
this Option Agreement and the Plan. 

14. Governing Law. This Agreement is governed by, and
construed in accordance with, the laws of the State of Nevada, without giving
effect to its conflict or choice of law principles that might otherwise refer
construction or interpretation of this Agreement to the substantive law of
another jurisdiction.

15. Counterparts; Facsimile Execution. This Option
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original, but all of which together constitute one and the same
instrument. Facsimile execution and delivery of this Option Agreement is legal,
valid and binding execution and delivery for all purposes. 

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16. Entire Agreement. The Plan, this Option Agreement,
and upon execution, the Exercise Notice, constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee’s interest except by means of a writing signed by the Company and
Optionee. 

17. Severability. In the event one or more of the
provisions of this Option Agreement should, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability will not affect any other provisions of this Option Agreement,
and this Option Agreement will be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. 

18. WAIVER OF JURY TRIAL. THE OPTIONEE EXPRESSLY,
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS OPTION AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.


Optionee acknowledges receipt of a copy of the Plan and
represents that he or she is familiar with the terms and provisions thereof, and
accepts this Option subject to all of the terms and provisions thereof. Optionee
has reviewed the Plan and this Option in their entirety, has had an opportunity
to obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon
any questions arising under the Plan or this Option. Optionee further agrees to
notify the Company upon any change in the residence address indicated below.


	OPTIONEE 	 	CHINA TRANSINFO TECHNOLOGY CORP.
    
	  	 	  
	/s/
      Walter Teh Ming Kwauk 	 	/s/ Shudong Xia 
	Signature 	 	By 
	  	 	  
	           Walter Teh Ming Kwauk
    	 	           Shudong Xia 
	Print Name 	 	Print Name 
	  	 	  
	 	 	           President and Chief
      Executive Officer 
	 	 	Title 
	 	 	  
	 	 	  


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EXHIBIT A 

2009 EQUITY INCENTIVE PLAN 

EXERCISE NOTICE 

China TransInfo Technology Corp. 
[Address] 

Attention: _______________, _________________


1. Exercise of Option. Effective as of today,
_____________, _____, the undersigned (“Optionee”) elects to exercise Optionee’s
option to purchase _________shares of the Common Stock (the “Shares”) of China
TransInfo Technology Corp. (the “Company”) under and pursuant to the China
TransInfo Technology Corp. 2009 Equity Incentive Plan (the “Plan”) and the Stock
Option Agreement dated ____________, ____ (the “Option Agreement”). 

2. Delivery of Payment. Optionee herewith delivers to
the Company the full purchase price of the Shares, as set forth in the Option
Agreement, and any and all withholding taxes due in connection with the exercise
of the Option. 

3. Representations of Optionee. Optionee acknowledges
that Optionee has received, read and understood the Plan and the Option
Agreement and agrees to abide by and be bound by their terms and conditions.


4. Rights as Stockholder. Until the issuance of the
Shares (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 stockholder exists with respect to the
Optioned Stock, notwithstanding the exercise of the Option. Subject to the
requirements of Section 6 below, the Shares will be issued to the Optionee as
soon as practicable after the Option is exercised in accordance with the Option
Agreement. No adjustment will be made for a dividend or other right for which
the record date is prior to the date of issuance except as provided in the Plan.


5. Tax Consultation. Optionee understands that Optionee
may suffer adverse tax consequences as a result of Optionee’s purchase or
disposition of the Shares. Optionee represents that Optionee has consulted with
any tax consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice. 

6. Refusal to Transfer. The Company will not (i)
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Exercise Notice, or (ii) be required
to treat as owner of such Shares or to accord the right to vote or pay dividends
to any purchaser or other transferee to whom such Shares have been so
transferred. 




7. Successors and Assigns. The Company may assign any of
its rights under this Exercise Notice to single or multiple assignees, and this
Exercise Notice inures to the benefit of the successors and assigns of the
Company. Subject to the restrictions on transfer herein set forth, this Exercise
Notice is binding upon Optionee and his or her heirs, executors, administrators,
successors and assigns. 

8. Interpretation. Any dispute regarding the
interpretation of this Exercise Notice will be submitted by Optionee or by the
Company forthwith to the Administrator for review at its next regular meeting.
The resolution of disputes by the Administrator will be final and binding on all
parties. 

9. Governing Law; Severability. This Exercise Notice is
be governed by, and construed in accordance with, the laws of the State of
Nevada, without giving effect to its conflict or choice of law principles that
might otherwise refer construction or interpretation of this Exercise to the
substantive law of another jurisdiction. In the event that any provision hereof
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Exercise Notice will continue in full force and
effect. 

10. Notices. Any notice required or permitted hereunder
will be provided in writing and deemed effective if provided in the manner
specified in the Option Agreement. 

11. Further Instruments. The parties agree to execute
any further instruments and to take any further action as may be reasonably
necessary to carry out the purposes and intent of the Option Agreement and this
Exercise Notice. 

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12. Entire Agreement. The Plan and Option Agreement are
incorporated herein by reference. This Exercise Notice, the Plan, and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee’s interest except by
means of a writing signed by the Company and Optionee. 

	Submitted by: 	 	Accepted by: 
	OPTIONEE 	 	CHINA TRANSINFO TECHNOLOGY CORP.
    
	  	 	  
	  	 	  
	Signature 	 	By 
	 	 	 
	           Walter Teh Ming Kwauk
    	 	           Shudong Xia 
	Print Name 	 	Print Name 
	 	 	 
	  	 	           President and Chief
      Executive Officer 
	  	 	Title 
	 	 	 
	 	 	Address: 
	 	 	 
	 	 	           9th Floor Vision
      Building 
	 	 	 
	 	 	           No. 39 Xueyuanlu,
      Haidian District 
	 	 	 
	 	 	           Beijing, China 100191
    
	 	 	Date Received



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