6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2011

Commission File Number: 001-34168

PANSOFT COMPANY LIMITED

(Translation of registrant's name into English)

3/F Qilu Software Park Building, Hi-Tech Zone,

Jinan, Shandong, People's Republic of China 250101

86-531-88871166

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x  Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ___________

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ___________

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o  No x

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ___________.

EXHIBIT INDEX

Number Description of Exhibit

99.1:  Pansoft’s NOTICE OF ANNUAL MEETING OF STOCKHOLDERS, 2011

99.2:  Pansoft’s 2008 STOCK INCENTIVE PLAN (As Amended and Restated May 13, 2011)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PANSOFT COMPANY LIMITED

Date: May 30, 2011

By: /s/ Allen Zhang                                  

Allen Zhang

Chief Financial Officer

EX-99.1

PANSOFT COMPANY LIMITED

3/F Qilu Software Park Building

Jinan Hi-Tech District, Jinan, Shandong,

People’s Republic of China, 250101

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

NOTICE IS HEREBY GIVEN that an the Annual Meeting of Stockholders of Pansoft Company Limited (the “Company”) will be held on Thursday, June 30, 2011 at 8:00 a.m., Eastern Standard Time, by web conference.  The internet access information for the meeting is as follows:

www.virtualshareholdermeeting.com/pansoft11

Important Notice Regarding the Availability of Proxy and Information Materials

for the Stockholder Meeting to be Held on June 30, 2011:

The Annual Report on Form 20-F and any amendment thereto, and

The Amended and Restated 2008 Stock Incentive Plan

are available at:

http://www.pansoft.com/contentsa.php?level0=3&level1=6

The Annual Meeting is held for the following purposes, as more fully described below in the information circular accompanying this notice:

1. To elect two directors of the Company.

2. To approve an amendment to our 2008 Stock Incentive Plan to (i) increase the total number of shares that may issued pursuant to Incentive Stock Options to 906,248 shares; (ii) authorize the compensation committee of the board of directors (the “Compensation Committee”) to grant restricted stock units; (iii) authorize the Compensation Committee to cancel outstanding stock options to exchange for new stock options; and (iv) authorize the Compensation Committee to reduce the exercise price of outstanding stock options.

3. To approve an amendment to our 2008 Stock Incentive Plan to increase the aggregate number of shares of common stock authorized for issuance by 302,000 shares.

4.  To ratify the appointment of Crowe Horwath (HK) CPA Limited as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2012; and

5. To transact such other business as may properly come before the Annual Meeting and any adjournment thereof.

The Board of Directors has fixed the close of business on May 20, 2011 as the record date for determining the stockholders entitled to notice of and to vote at the Annual Meeting and any adjournment thereof. A complete list of stockholders entitled to vote will be available at the Company’s principal executive offices located at 3/F Qilu Software Park Building, Jinan Hi-Tech District Jinan, Shandong, People’s Republic of China, 250101, for five days prior to the meeting.

WHETHER OR NOT YOU INTEND TO ATTEND THE WEBCAST FOR THE ANNUAL MEETING, WE URGE YOU TO MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY OR VOTE VIA THE INTERNET OR TELEPHONE BY FOLLOWING THE INSTRUCTIONS SET FORTH IN THE PROXY CARD.  After reading the information circular, please mark, date, sign and return, as soon as possible, the enclosed proxy card in the prepaid envelope to ensure that your shares will be represented. YOUR SHARES CANNOT BE VOTED UNLESS YOU SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD OR ATTEND THE ANNUAL MEETING WEBCAST IN PERSON.

Important Notice Regarding the Availability of Proxy Materials and Other Information  for the Stockholder Meeting to be Held on June 30, 2011: The Annual Report on Form 20-F as amended, and Amended and Restated 2008 Stock Incentive Plan are available at: http://www.pansoft.com/contentsa.php?level0=3&level1=6

We look forward to talking to you at the meeting.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Hugh Wang

Hugh Wang, Chairman and Director

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PANSOFT COMPANY LIMITED

INFORMATION CIRCULAR

This information circular is furnished in connection with the solicitation by the Board of Directors (the “Board of Directors” or the “Board”) of Pansoft Company Limited (“Pansoft” or the “Company”), of proxies in the accompanying form to be used at the Annual Meeting of Stockholders to be held through web conference at www.virtualshareholdermeeting.com/pansoft11. on Thursday, June 30, 2011 at 8:00 a.m., Eastern Standard Time, and at any adjournment of the Annual Meeting (the “Annual Meeting”).  The Annual Meeting will be conducted by web conference and no physical meeting will be held.

This information circular and the accompanying form of proxy are being mailed to stockholders on or about June 15, 2011.

VOTING PROCEDURES

The shares represented by proxy received in response to this solicitation and not revoked will be voted at the Annual Meeting. If you hold your shares in your own name as a holder of record, you may instruct the proxy holders how to vote your shares by signing, dating and mailing the proxy card in the postage paid envelope that we have provided. In the event no directions are specified, the shares will be voted FOR the election of the nominee directors listed in this information circular and FOR the approvals of proposals 2, 3, and 4

You may revoke or change your proxy vote at any time before it is actually voted at the Annual Meeting by sending a written notice of revocation or submitting another proxy with a later date to the Secretary of the Company. You may also revoke your proxy by attending and voting in person at the webcast for the Annual Meeting, but your attendance at the webcast for the Annual Meeting will not, by itself, constitute a revocation of your proxy. If your shares are registered in the name of a bank or other brokerage firm, you will receive instructions from them that you must follow in order to have your shares voted.

Who Can Vote

Stockholders of record at the close of business on May 20, 2011 are entitled to notice of and to vote at the Annual Meeting. As of May 30, 2011, the Company had 5,438,232shares of common stock, $0.0059 par value per share (“Common Stock”) outstanding and entitled to vote. Each holder of Common Stock is entitled to one vote for each share held as of the record date.

General Information on Voting

Holders of a majority of the outstanding shares of Common Stock must be present or represented by proxy at the Annual Meeting in order to have a quorum. Shares that are marked “withheld” or “abstain” are treated as being present for purposes of determining the presence of a quorum at the Annual Meeting. If you hold your Common Stock through a bank, broker or other nominee, the broker may be prevented from voting shares held in your account on certain proposals that are considered “non-routine” proposals (a “broker non-vote”) unless you have given voting instructions to your bank, broker or nominee.  All of the proposals presented at the annual meeting except for Proposal 4, the appointment and ratification of independent registered accounting firm, are “non-routine” matters.  Shares that are subject to a broker non-vote are counted for purposes of determining whether a quorum exists.

Directors are elected by a plurality vote. Accordingly, the director nominees who receive the most votes cast in his or her favor will be elected. Votes that are withheld from a nominee will be excluded entirely from the election of the Class I directors and will have no effect on the outcome. An abstention or broker non-vote has no effect in the outcome of the election of the directors, as directors are elected by a plurality of the votes cast. Proposals 2 and 3 will be approved by the majority of votes cast at the Annual Meeting.  An abstention has the effect of a vote against Proposals 2 or 3, and broker non-vote has no effect in the outcome of these proposals.  Proposal 4 will be approved by the majority of the votes cast at the Annual Meeting.  An abstention has the effect of a vote against Proposal 4.

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Stockholders whose shares are registered in their own names may vote by mailing a completed proxy card, via the Internet or by telephone.  Instructions for voting via the Internet or by telephone are set forth on the enclosed proxy card. To vote by mailing a proxy card, sign and return the enclosed proxy card in the enclosed prepaid and addressed envelope and your shares will be voted at the Annual Meeting in the manner you direct. In the event no directions are specified, such proxies will be voted FOR each nominee of the Board of Directors (Proposal No. 1) and FOR the approval of the amendment of the 2008 Stock Incentive Plan (the “2008 Plan”) to  (i) increase the total number of shares that may issued pursuant to Incentive Stock Options to 906,248 shares; (ii) authorize the compensation committee of the board of directors (the “Compensation Committee”) to grant restricted stock units; (iii) authorize the Compensation Committee to cancel outstanding stock options to exchange for new stock options; and (v) authorize the Compensation Committee to reduce the exercise price of outstanding stock options (Proposal No. 2);  FOR the approval of an amendment to the 2008 Plan to increase the aggregate number of shares of common stock authorized for issuance by 302,000 shares (Proposal No. 3); FOR the ratification of appointment of Crowe Horwath (HK) CPA Limited as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2012; and  in the discretion of the proxy holders as to any other matters that may properly come before the Annual Meeting.

The Company will bear the expense of printing and mailing this information circular and related proxy materials. In addition to the solicitation of proxies by mail, solicitation may be made by the Company’s directors, officers or other employees by telephone, facsimile or other means.

No additional compensation will be paid to such persons for such solicitation. The Company will reimburse brokerage firms and others for their reasonable expenses in forwarding solicitation materials to beneficial owners of the Company’s Common Stock.

Management of the Company is not aware of any matters other than those described in this information circular that may be presented for action at the Annual Meeting. If any other matters properly come before the meeting, persons appointed by the enclosed form of proxy will have discretionary authority to vote such proxies as they decide.

Recommendations of the Board of Directors

The Company’s Board of Directors recommends a vote:

• FOR the election of the Class III nominees to the Board of Directors (Proposal 1).

• FOR the approval of an amendment to the 2008 Plan to (i) increase the total number of shares that may issued pursuant to Incentive Stock Options to 906,248 shares; (ii) authorize the Compensation Committee to grant restricted stock units; (iii) authorize the Compensation Committee to cancel outstanding stock options to exchange for new stock options; and (iv) authorize the Compensation Committee to reduce the exercise price of outstanding stock options (Proposal 2).

· FOR the approval of an amendment to the 2008 Plan to increase the aggregate number of shares of common stock authorized for issuance by 302,000 shares (Proposal No. 3).

· FOR the ratification of appointment of Crowe Horwath (HK) CPA Limited as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2012.

IMPORTANT

WHETHER OR NOT YOU INTEND TO ATTEND THE WEBCAST FOR THE ANNUAL MEETING, WE URGE YOU TO MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY OR VOTE VIA THE INTERNET OR TELEPHONE BY FOLLOWING THE INSTRUCTIONS SET FORTH IN THE PROXY CARD.

PROPOSAL 1

ELECTION OF DIRECTORS

The Company’s articles of association provides for a classified Board of Directors consisting of three classes having staggered terms of three years each. The Board of Directors currently consists of one Class I director, two Class II directors, and two Class III directors. The Class I director has a term expiring at the 2012 annual meeting of stockholders, the Class II directors have a term expiring at the 2013 annual meeting and the Class III directors have a term expiring at the 2011 annual meeting of stockholders.

The terms of the Company’s two Class III directors, Mr. Hugh Wang and Mr. Guoqiang Lin , will end in 2011.  The Nomination Committee of the Board of Directors recommended, and the Board of Directors approved, Mr. Hugh Wang and Mr. Guoqiang Lin as the nominees for reelection at the Annual Meeting to Class III of the Board of Directors.  If reelected, Mr. Hugh Wang  and Mr. Guoqiang Lin  will serve for a term of three years expiring at the 2014 annual meeting of stockholders or until his successor shall have been elected and qualified.  Mr. Hugh Wang and Mr. Guoqiang Lin have each consented to be named as the nominee and agreed to serve if reelected. If, however, Mr. Hugh Wang and Mr. Guoqiang Lin are unable to serve, proxies will be voted for such persons as the Board of Directors may recommend.

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Shares represented by proxy cannot be voted for a greater number of persons than the number of nominees named. The other directors of the Company will continue in office for their existing terms.

The Board of Directors unanimously recommends that stockholders vote “FOR” the election of the following nominees to the Board of Directors:

NOMINEES TO SERVE AS CLASS III DIRECTOR SERVING A TERM EXPIRING AT THE 2015 ANNUAL MEETING

Hugh Wang. Mr. Wang is our Chairman and a director. Mr. Wang founded Pansoft in 2001 and has been the Chairman since that time. Prior to founding Pansoft, from 1990-2001, Mr. Wang was Senior Vice President and one of the chief engineers of Inspur Group, a Chinese software company now listed on the Shanghai Stock Exchange. From 1987 to 1990, Mr. Wang was a lecturer in computer science at Shandong Teacher’s University. From 1982 to 1985, Mr. Wang served as Senior Programmer for the Information Center of Jinan Railway Management Bureau, one of 18 railway bureaus in China. Since 2006, Mr. Wang has served Shandong Teacher’s University on a part time basis as a professor in the computer science department focusing on software engineering. He also currently serves Shandong University on a part-time basis as a professor in the computer science department focusing on enterprise internal process control models, data models and ERP systems. Mr. Wang received a bachelor’s degree in computer science from Shandong University and a master’s degree in computer science and engineering from Tsinghua University.

Guoqiang Lin.Mr. Lin is our Chief Executive Officer and a director. Mr. Lin was one of the founders of Pansoft in 2001. Prior to founding Pansoft from 1990-2001, Mr. Lin was the Vice President of Inspur Group, a Chinese software company now listed on the Shanghai Stock Exchange. While at Inspur Software, Mr. Lin developed “Guoqiang Finance,” an ERP software system for Chinese businesses. Mr. Lin received a bachelor’s degree in computer science from Shandong Teacher’s University.

Board of Directors

Our board of directors currently consists of five directors. There are no family relationships between any of our executive officers and directors.

The directors are divided into three classes, as nearly equal in number as the total number of directors permits. Class I directors shall face re-election at our annual general meeting of shareholders in 2012 and every three years thereafter. Class II directors shall face re-election at our annual general meeting of shareholders in 2013 and every three years thereafter. Class III directors shall face re-election at our annual general meeting of shareholders in 2014 and every three years thereafter.

If the number of directors changes, any increase or decrease will be apportioned among the classes so as to maintain the number of directors in each class as equally as possible. Any additional directors of a class elected to fill a vacancy resulting from an increase in such class will hold office for a term that coincides with the remaining term of that class. Decreases in the number of directors will not shorten the term of any incumbent director. These board provisions could make it more difficult for third parties to gain control of our company by making it difficult to replace members of the Board of Directors.

A director may vote in respect of any contract or transaction in which he is interested, provided, however that the nature of the interest of any director in any such contract or transaction shall be disclosed by him at or prior to its consideration and any vote on that matter. A general notice or disclosure to the directors or otherwise contained in the minutes of a meeting or a written resolution of the directors or any committee thereof of the nature of a director’s interest shall be sufficient disclosure and after such general notice it shall not be necessary to give special notice relating to any particular transaction. A director may be counted for a quorum upon a motion in respect of any contract or arrangement which he shall make with our company, or in which he is so interested and may vote on such motion.

There are no membership qualifications for directors. Further, there are no share ownership qualifications for directors unless so fixed by us in a general meeting.

There are no other arrangements or understandings pursuant to which our directors are selected or nominated.

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Duties of Directors

Under British Virgin Islands law, our directors have a duty to act honestly and in good faith with a view to our best interests. Our directors when exercising powers or performing duties as a director also have a duty to exercise the care, diligence and skill that a reasonable director would exercise in the same circumstances taking into account, but without limitation, the nature of the company, the nature of the decision and the nature of the responsibilities undertaken by him. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association and the Company Law. A shareholder has the right to seek damages if a duty owed by our directors is breached.

Director Compensation

We have adopted a non-employee director compensation policy pursuant to which each individual serving as a non-employee board member at the beginning of the company’s fiscal year will be eligible to receive an annual retainer of $5,230 for board service.  New non-employee board members elected or appointed to the board during the Company’s fiscal year will receive a pro-rated amount of the annual retainer based on the period served from the date of appointment or election through the end of our fiscal year.  In addition, each non-employee director will receive $153 for each board and subcommittee meeting attended in person.  Non-employee directors are also eligible to receive equity awards.

For fiscal year 2010, our non-employee directors received an aggregate of $15,907 in cash as annual retainer and board meeting fees.  Pursuant to the terms of Pansoft’s 2008 Stock Incentive Plan, we granted an aggregate of 30,000 options to acquire Pansoft common stock to our non-employee directors during fiscal year 2010 and we have previously granted options to our non-employee directors in 2008 and 2009 as follows:

Grant Date	Expiration Date	Aggregate Number of Shares	Exercise Price Per Share ($)
September 8, 2008	September 8, 2013	14,000	7.00
December 13, 2008	December 12, 2011	14,000	2.74
May 22, 2009	May 21, 2011	14,000	5.20
February 25, 2010	February 24, 2013	30,000	6.33

All the options granted to non-employee directors vest over a three year period of service from the grant date and have an exercise price per share equal to the closing price of our stock on the grant date.  During fiscal year 2010, we recognized a stock compensation charge of $39,878 with respect to these options.

The equity ownership of our non-employee directors is described under the heading “Principal and Selling Shareholders”, below.

SECURITY OWNERSHIP OF DIRECTORS

The following table sets forth information with respect to beneficial ownership of our common shares as of March 31, 2011 by our directors.  The number and percentage of common shares beneficially owned are based on 546,7087 (2) common shares outstanding as of March 31, 2011. Information with respect to beneficial ownership has been furnished by each director. Beneficial ownership is determined in accordance with the rules of the SEC and generally requires that such person have voting or investment power with respect to securities. In computing the number of common shares beneficially owned by a person listed below and the percentage ownership of such person, common shares underlying options, warrants or convertible securities held by each such person that are exercisable or convertible within 60 days of  May 15, 2011 are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person. Except as otherwise indicated in the footnotes to this table, or as required by applicable community property laws, all persons listed have sole voting and investment power for all common shares shown as beneficially owned by them. Unless otherwise indicated in the footnotes, the address for each principal shareholder is in the care of Pansoft, 3/f, Qilu Software Park Building, Jinan Hi-tech Zone, Jinan 250101, Shandong, People’s Republic of China.

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Directors	Amount of Beneficial Ownership (2)		Percentage Ownership  (2)
Hugh Wang (3)		3,425,494		62.45	%
Guoqiang Lin (4)		3,425,494		62.45	%
Samuel Shen		52,982		0.97	%
Paul Gillis		16,767		0.31	%
Tony Luh		7,767		0.14	%
All Directors as a Group (5 persons )		3,506,009		63.92	%
Timesway Group Limited (5)		3,425,494		62.45	%

(1) Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the common shares.

(2) The number of our common shares outstanding used in calculating the percentage of the shares held by the persons listed above includes the following common shares underlying options exercisable within 60 days of May 15, 2011:

Granted On	No. of Shares		Exercise Price $		Expired by
September 8, 2009		64,200		7.00	September 8, 2013
December 13, 2009		16,000		2.74	December 13, 2011
December 13, 2009		6,000		2.74	December 13, 2013
May 22, 2009		9,333		5.20	May 22, 2012
February 25, 2010		10000		6.33	February 25, 2013
Total as of May 20, 2011		105,333

(3) Based on a Schedule 13G filed by Timesway Group ("Timesway"), Timesway beneficially owns 3,425,494 shares of Common Stock of the Company.  Mr. Hu Wang serves as the Chairman and Director of Timesway and personally owns approximately 17% common shares of Timesway.  As director of Timesway, Mr. Wang may be deemed to have beneficial ownership of Common Stock beneficially owned by Timesway and hereby disclaims beneficial ownership of such securities.

(4) Based on a Schedule 13G filed by Timesway, Timesway beneficially owns 3,425,494 shares of Common Stock of the Company. Mr. Guoqiang Lin serves as Director of Timesway and personally owns approximately 17% common shares of Timesway.  As Director of Timesway, Mr. Lin may be deemed to have beneficial ownership of Common Stock beneficially owned by Timesway and hereby disclaims beneficial ownership of such securities.

(5) Timesway is a British Virgin Islands company formed on July 31, 2001 by Mr. Wang, for the purposes of holding a portion of the common shares of our company.

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PROPOSAL 2

APPROVAL OF AMENDMENTS OF THE 2008 PLAN TO AUTHORIZE BOARD TO REVISE TERMS OF OUTSTANDING OPTIONS AND ADD NEW FEATURES TO THE 2008 PLAN

The Company believes that in order to provide adequate incentives to attract and retain qualified and talented personnel, it is desirable, to amend the 2008 Plan to provide the Board and the Compensation Committee with the authority to revise the terms outstanding stock options. and to add certain new features in the 2008 Plan to provide more flexibility in designing future equity incentive programs.  Accordingly, the Company proposes to amend the 2008 Plan as follows:

· Increase the total number of shares that may be issued pursuant to Incentive Stock Options granted under the 2008 Plan to 906,248.

· Authorize the Compensation Committee to grant restricted stock units (“RSUs”).  The RSUs may, in the discretion of the Compensation Committee, vest in one or more installments over the participant’s period of service or upon the attainment of specified performance objectives.  Outstanding RSUs shall automatically terminate, and no shares of common stock will actually be issued if the performance goals or service requirements are not attained or satisfied.

· Authorize the Compensation Committee to effect, with the consent of the affected holders, the cancellation of any or all outstanding options under the 2008 Plan and to grant in exchange one or more of the following: (i) new options covering the same or a different number of shares of common stock but with an exercise price per share based on the fair market value of the shares on the grant date or (ii) cash or shares of common stock or any other equity awards, whether vested or unvested.

· Authorize the Compensation Committee, with the consent of the affected holders, to reduce the exercise price of one or more outstanding options or issue new options with a lower exercise price in immediate cancellation of outstanding options with a higher exercise price.

On May 16, 2011, the board of directors approved and adopted Amended and Restated 2008 Stock Incentive as described above. The above description of the proposed amendments to the 2008 Plan does not purport to be complete and is qualified in its entirety by reference to the Amended and Restated 2008 Stock Incentive Plan, a copy of which is available at http://www.pansoft.com/contentsa.php?level0=3&level1=6

The Board of Directors recommends a vote FOR the approval of the amendments to the 2008 Plan as described under Proposal 2 above

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PROPOSAL 3

APPROVAL OF AMENDMENT OF THE 2008 PLAN TO INCREASEAUTHORIZED SHARES FOR ISSUANCE

In July 2008 the Company approved the 2008 Plan, pursuant to which 604,248 shares of the Company’s common stock are reserved for issuance.  Since the approval of the 2008 Plan, the Company has granted stock options to our executive officers as follows: an aggregate of 170,000 options granted on September 9, 2008 with an exercise price of $7.00 per share which will expire on September 7, 2013, and an aggregate of 15,000 options granted on December 13, 2008 with an exercise price of $2.74 per share which will expire on December 12, 2013.  The options vest over a 5 -year period of service measured from the grant date.  In addition, since the approval of the 2008 Plan, we have granted an aggregate of 72,000 stock options to our non-employee directors.  Currently, the 2008 Plan has only 194,248 shares available for future issuances.

As discussed previously in its public filings, the Company intends to expand its operations as a part of its growth strategy.  Under this strategy, the Company expects to increase its workforce by recruiting and hiring additional personnel.  Equity incentives, including issuance of stock options, are critical in ensuring that the Company attracts and recruits qualified personnel.  Given that the 2008 Plan has only 194,248 shares available for future issuance, the Company proposes to increase the number of authorized shares for issuance under such plan by 302,000 shares.  On May 16, 2011, the Board of Directors of the Company has approved an amendment to the 2008 Plan to increase the aggregate number of shares authorized for issuance under the 2008 Plan by 302,000 shares.

The Board of Directors recommends a vote FOR the approval of an

amendment to the 2008 Plan to increase the number of authorized shares

STOCKHOLDER PROPOSALS

The Company’s articles of association establish an advance notice procedure with respect to certain stockholder proposals and director nominations. If a stockholder wishes to have a stockholder proposal considered at the Company’s 2011 annual meeting of stockholders, the stockholder must give timely notice of the proposal as required under such advance notice procedure in writing to the Secretary of the Company at the Company’s principal executive offices at 3/F Qilu Software Park Building, Jinan Hi-Tech Zone, Jinan, Shandong, People’s Republic of China 250101.

OTHER MATTERS

The Board of Directors knows of no other business that will be presented at the Annual Meeting. If any other business is properly brought before the Annual Meeting, it is intended that proxies in the enclosed form will be voted in accordance with the judgment of the persons voting the proxies.

Whether you intend to be present at the Annual Meeting or not, we urge you to return your signed proxy card promptly.

APPENDIX A   Amended and Restated 2008 Stock Incentive Plan

APPENDIX B   Pansoft Annual Report  2010  filed under 20F

are available at:    http://www.pansoft.com/contentsa.php?level0=3&level1=6

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EX-99.2

PANSOFT COMPANY LIMITED

2008 STOCK INCENTIVE PLAN

(As Amended and Restated May 13, 2011)

1. Purpose and Effective Date.

(a)      The purpose of the Pansoft Company Limited 2008 Stock Incentive Plan (the “Plan”) is to further the long term stability and financial success of Pansoft Company Limited (the “Company”) by attracting and retaining personnel, including employees, non-employee directors, and consultants, through the use of stock incentives. It is believed that ownership of Company stock will stimulate the efforts of those employees upon whose judgment, interest and efforts the Company is and will be largely dependent for the successful conduct of its business.

(b)      The Plan was adopted by the Board of Directors and the shareholders of the Company on July 20, 2008 (the “Effective Date”).   The Plan was amended and restated by the Board on May 13, 2011, subject to shareholder approval at the 2011 Annual Meeting.

2. Definitions.

(a)      Act. The Securities Exchange Act of 1934, as amended.

(b)      Affiliate. The meaning assigned to the term “affiliate” under Rule 12b-2 of the Act.

(c)       Applicable Withholding Taxes. The aggregate amount of income and payroll taxes and other amounts that the Company is required to in connection with the grant, exercise or vesting of an Award.

(d)      Award. The award of an Option, Restricted Stock or Restricted Stock Units under the Plan.

(e)      Beneficiary. The person or persons entitled to receive a benefit pursuant to an Award upon the death of a Participant.

(f)      Board. The Board of Directors of the Company.

(g)      Cause. Dishonesty, fraud, misconduct, gross incompetence, gross negligence, breach of a material fiduciary duty, material breach of an agreement with the Company, unauthorized use or disclosure of confidential information or trade secrets, or conviction or confession of a crime punishable by law (except minor violations), in each case as determined by the Committee, which determination shall be binding. Notwithstanding the foregoing, if “Cause” is defined in an employment agreement between a Participant and the Company, “Cause” shall have the meaning assigned to it in such agreement.

(h)      Change of Control.

(i) The acquisition by any unrelated person of beneficial ownership (as that term is used for purposes of the Act) of 50% or more of the then outstanding shares of common stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors. The term “unrelated person” means any person other than (x) the Company and its subsidiaries, (y) an employee benefit plan or related trust sponsored by the Company or its subsidiaries, and (z) a person who acquires stock of the Company pursuant to an agreement with the Company that is approved by the Board in advance of the acquisition. For purposes of this subsection, a “person” means an individual, entity or group, as that term is used for purposes of the Act;

(ii) Any tender or exchange offer, merger or other business combination, sale of assets or any combination of the foregoing transactions, and the Company is not the surviving corporation; and

(iii) A liquidation of the Company.

(i)      Code. The Internal Revenue Code of 1986, as amended.  

(j)      Committee. The Compensation Committee of the Board.

(k)      Company. Pansoft Company Limited.

(l)      Company Stock. The common stock of the Company, without par value per share. In the event of a change in the capital structure of the Company (as provided in Section 12 below), the shares resulting from such a change shall be deemed to be Company Stock within the meaning of the Plan.

(m)    Consultant. A person rendering services to the Company who is not an “employee” for purposes of employment tax withholding under the Code.

(n)     Corporate Change. A consolidation, merger, dissolution or liquidation of the Company, or a sale or distribution of assets or stock (other than in the ordinary course of business) of the Company; provided that, unless the Committee determines otherwise, a Corporate Change shall only be considered to have occurred with respect to Participants whose business unit is affected by the Corporate Change.

(o)     Date of Grant. The date as of which an Award is made by the Committee.

(p)     Disability or Disabled. As to an Incentive Stock Option, a Disability within the meaning of Code Section 22(e)(3). As to all other Awards, the Committee shall determine whether a Disability exists and such determination shall be conclusive.

(q)     Fair Market Value.

(i) If Company Stock is traded on a national securities exchange or the NASDAQ Stock Market, the average of the highest and lowest registered sales prices of Company Stock on such exchange or the NASDAQ Stock Market;

(ii) If Company Stock is traded in the over-the-counter market, the average between the closing bid and asked prices as reported by the NASDAQ Stock Market; or

(iii) If shares of Company Stock are not publicly traded, the Fair Market Value shall be determined by the Committee using any reasonable method in good faith.

Fair Market Value shall be determined as of the applicable date specified in the Plan or, if there are no trades on such date, the value shall be determined as of the last preceding day on which Company Stock is traded.

(r)      Fiscal Year.  The fiscal year of the Company, commencing from July 1 and ending on June 30 of the following calendar year.

(s)      Incentive Stock Option. An Option intended to meet the requirements of, and qualify for favorable Federal income tax treatment under, Code Section 422.

(t)      Nonstatutory Stock Option. An Option that does not meet the requirements of Code Section 422, or that is otherwise not intended to be an Incentive Stock Option and is so designated.

(u)      Option. A right to purchase Company Stock granted under the Plan, at a price determined in accordance with the Plan.

(v)      Parent.  Parent corporation as defined in Code Section 424(e).

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(w)     Participant. Any individual who receives an Award under the Plan.

(x)      Restricted Stock. Company Stock awarded upon the terms and subject to the restrictions set forth in Section 7 below.

(y)      Rule 16b-3. Rule 16b-3 of the Act, including any corresponding subsequent rule or any amendments to Rule 16b-3 enacted after the effective date of the Plan.

(z)      Restricted Stock Units.  Right to receive Company Stock upon the terms and subject to the restrictions set forth in Section 9 below.

(aa)  Subsidiary.  Subsidiary corporation as defined in Code section 424(f).

(bb) 10% Shareholder. A person who owns, directly or indirectly, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary.  Indirect ownership of stock shall be determined in accordance with Code Section 424(d).  

3. General. Awards of Options, Restricted Stock and Restricted Stock Units may be granted under the Plan. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options.

4. Stock.

(a)      Subject to Section 13 of the Plan, there shall initially be reserved for issuance under the Plan a total of 906,248 unissued shares of Company Stock. Such reserve consists of (i) the 604,248 shares of Company Stock authorized for issuance on the Effective Date plus (ii) an additional increase of 302,000 shares approved by the Board subject to shareholder approval.

(b)      The maximum number of shares of Company Stock which may be issued pursuant to Incentive Stock Options granted under the Plan shall be 906,248 plus, to the extent allowable under Section 422 of the Code, any shares that became available for issuance under the Plan pursuant to Section 4(b).  Shares allocable to Awards granted under the Plan that expire or otherwise terminate prior to the issuance of shares of Company Stock subject to these Awards or are cancelled in connection with the provisions of Section 16, and shares that are forfeited or repurchased pursuant to restrictions on Restricted Stock awarded under the Plan may again be subjected to an Award under this Plan. For purposes of determining the number of shares that are available for Awards under the Plan, such number shall include the number of shares surrendered by a Participant or retained by the Company (a) in connection with the payment of the exercise price of an Option or (b) in payment of Applicable Withholding Taxes.

5. Eligibility.

(a)      Any employee of, non-employee director of, or Consultant to the Company or its Affiliates, who, in the judgment of the Committee, has contributed or can be expected to contribute to the profits or growth of the Company is eligible to become a Participant. The Committee shall have the power and complete discretion, as provided in Section 15, to select eligible Participants and to determine for each Participant the terms, conditions and nature of the Award and the number of shares to be allocated as part of the Award; provided, however, that any Award made to a member of the Committee must be approved by the Board. The Committee is expressly authorized to make an Award to a Participant conditioned on the surrender for cancellation of an existing Award.

(b)      The grant of an Award shall not obligate the Company to pay an employee any particular amount of remuneration, to continue the employment of the employee after the grant or to make further grants to the employee at any time thereafter.

(c)      An Incentive Stock Option may only be granted to employees of the Company (or Parent or Subsidiary).

(d)      The maximum number of shares with respect to which an Award may be granted in any calendar year to any employee during such calendar year shall be 300,000 shares of Company Stock.

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6. Stock Options.

(a)      Whenever the Committee deems it appropriate to grant Options, notice shall be given to the Participant stating the number of shares for which Options are granted, the exercise price per share, whether the options are Incentive Stock Options or Nonstatutory Stock Options, and the conditions to which the grant and exercise of the Options are subject.

(b)      The Committee shall establish the exercise price of Options. The exercise price of an Incentive Stock Option shall be not less than 100% of the Fair Market Value per share of Company Stock on the Date of Grant, provided that if the Participant is a 10% Shareholder, the exercise price per share of an Incentive Stock Option shall be not less than 110% of the Fair Market Value per share of Company Stock on the Date of Grant. The exercise price per share of a Nonstatutory Stock Option shall not be less than 100% of the Fair Market Value per share of Company Stock on the Date of Grant.

(c)      Options may be exercised in whole or in part at such times as may be specified by the Committee in the Participant’s stock option agreement. The Committee may impose such vesting conditions and other requirements as the Committee deems appropriate, and the Committee may include such provisions regarding a Change of Control or Corporate Change as the Committee deems appropriate. 

(d)      The Committee shall establish the term of each Option in the Participant’s stock option agreement. The term of an Incentive Stock Option shall not be longer than ten years from the Date of Grant, except that an Incentive Stock Option granted to a 10% Shareholder may not have a term in excess of five years. No option may be exercised after the expiration of its term or, except as set forth in the Participant’s stock option agreement, after the termination of the Participant’s employment. The Committee shall set forth in the Participant’s stock option agreement when, and under what circumstances, an Option may be exercised after termination of the Participant’s employment or period of service; provided that no Incentive Stock Option may be exercised after (i) three months from the Participant’s termination of employment with the Company for reasons other than Disability or death, or (ii) one year from the Participant’s termination of employment on account of Disability or death. The Committee may, in its sole discretion, amend a previously granted Incentive Stock Option to provide for more liberal exercise provisions, provided however that if the Incentive Stock Option as amended no longer meets the requirements of Code Section 422, and, as a result the Option no longer qualifies for favorable federal income tax treatment under Code Section 422, the amendment shall not become effective without the written consent of the Participant.

(e)      An Incentive Stock Option, by its terms, shall be exercisable in any calendar year only to the extent that the aggregate Fair Market Value (determined at the Date of Grant) of Company Stock with respect to which Incentive Stock Options are exercisable by the Participant for the first time during the calendar year does not exceed $100,000 (the “Limitation Amount”). Incentive Stock Options granted under the Plan and all other plans of the Company and any parent or Subsidiary of the Company shall be aggregated for purposes of determining whether the Limitation Amount has been exceeded. The Board may impose such conditions as it deems appropriate on an Incentive Stock option to ensure that the foregoing requirement is met. If Incentive Stock Options that first become exercisable in a calendar year exceed the Limitation Amount, the excess Options will be treated as Nonstatutory Stock Options to the extent permitted by law.

(f)      If a Participant dies and if the Participant’s stock option agreement provides that part or all of the Option may be exercised after the Participant’s death, then such portion may be exercised by the personal representative of the Participant’s estate during the time period specified in the stock option agreement.

(g)      If a Participant’s employment or services is terminated by the Company for Cause, the Participant’s Options shall terminate as of the date of the misconduct.

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7. Method of Exercise of Options.

Options may be exercised by giving written notice of the exercise to the Company, stating the number of shares the Participant has elected to purchase under the Option. Such notice shall be effective only if accompanied by the exercise price in full in cash; provided that, if the terms of an Option so permit, the Participant may (i) deliver Company Stock that the Participant has owned for at least six months (valued at Fair Market Value on the date of exercise), or (ii) exercise any applicable net exercise provision contained therein. Unless otherwise specifically provided in the Option, any payment of the exercise price paid by delivery of Company Stock acquired directly or indirectly from the Company shall be paid only with shares of Company Stock that have been held by the Participant for more than six months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes).  

8. Restricted Stock Awards.

(a)      Whenever the Committee deems it appropriate to grant a Restricted Stock Award, notice shall be given to the Participant stating the number of shares of Restricted Stock for which the Award is granted and the terms and conditions to which the Award is subject. Certificates representing the shares shall be issued in the name of the Participant, subject to the restrictions imposed by the Plan and the Committee. A Restricted Stock Award may be made by the Committee in its discretion without cash consideration.

(b)      The Committee may place such restrictions on the transferability and vesting of Restricted Stock as the Committee deems appropriate, including restrictions relating to continued employment and financial performance goals. Without limiting the foregoing, the Committee may provide performance or Change of Control or Corporate Change acceleration parameters under which all, or a portion, of the Restricted Stock will vest on the Company’s achievement of established performance objectives. Restricted Stock may not be sold, assigned, transferred, disposed of, pledged, hypothecated or otherwise encumbered until the restrictions on such shares shall have lapsed or shall have been removed pursuant to subsection (c) below.

(c)      The Committee may provide in a Restricted Stock Award, or subsequently, that the restrictions will lapse if a Change of Control or Corporate Change occurs. The Committee may at any time, in its sole discretion, accelerate the time at which any or all restrictions will lapse or may remove restrictions on Restricted Stock as it deems appropriate.  

(d)      A Participant shall hold shares of Restricted Stock subject to the restrictions set forth in the Award agreement and in the Plan. In other respects, the Participant shall have all the rights of a shareholder with respect to the shares of Restricted Stock, including, but not limited to, the right to vote such shares and the right to receive all cash dividends and other distributions paid thereon. Certificates representing Restricted Stock shall bear a legend referring to the restrictions set forth in the Plan and the Participant’s Award agreement. If stock dividends are declared on Restricted Stock, such stock dividends or other distributions shall be subject to the same restrictions as the underlying shares of Restricted Stock.

9. Restricted Stock Units.

(a)      The Committee shall have the full power and authority, exercisable in its sole discretion, to grant restricted stock units which entitle the Participants to receive the shares underlying those Awards upon vesting or upon the expiration of a designated time period following the vesting of those Awards.  Each award of restricted stock units shall be evidenced by one or more Award Agreements in the form approved by the Committee.

(b)      Restricted stock units may, in the discretion of the Committee, vest in one or more installments over the Participant’s period of Service or upon the attainment of specified performance objectives.  The Committee shall also have the discretionary authority to structure one or more restricted stock unit awards so that the shares of Company Stock subject to those Awards shall vest (or vest and become issuable) upon the achievement of pre-established performance objectives based on one or more performance goals and measured over the performance period specified by the Committee at the time of the grant of the Award.  Outstanding restricted stock units shall automatically terminate, and no shares of Company Stock shall actually be issued in satisfaction of those Awards, if the performance goals or service requirements established for those Awards are not attained or satisfied. The Committee, however, shall have the discretionary authority to issue vested shares of Company Stock under one or more outstanding Awards of restricted stock units as to which the designated performance goals or service requirements have not been attained or satisfied.

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(c)      The Participant shall not have any stockholder rights with respect to the shares of Company Stock subject to a restricted stock unit award until that Award vests and the shares of Company Stock are actually issued thereunder.  However, dividend-equivalent units may be paid or credited, either in cash or in actual or phantom shares of Company Stock, on outstanding restricted stock unit awards, subject to such terms and conditions as the Committee may deem appropriate.

10. Applicable Withholding Taxes. Each Participant shall agree, as a condition of receiving an Award, to pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, all Applicable Withholding Taxes with respect to the Award. Until the Applicable Withholding Taxes have been paid or arrangements satisfactory to the Company have been made, no stock certificates (or, in the case of Restricted Stock, no stock certificates free of a restrictive legend) shall be issued to the Participant. As an alternative to making a cash payment to the Company to satisfy Applicable Withholding Tax obligations, the Committee may establish procedures permitting the Participant to elect to (a) deliver shares of already owned Company Stock (subject to such restrictions as the Committee may establish, including a requirement that any shares of Company Stock so delivered shall have been held by the Participant for not less than six months) or (b) have the Company retain that number of shares of Company Stock that would satisfy all or a specified portion of the Applicable Withholding Taxes. Any such election shall be made only in accordance with procedures established by the Committee.

11. Nontransferability of Awards.

(a)      In general, Awards, by their terms, shall not be transferable by the Participant except by will or by the laws of descent and distribution or except as described below. Options shall be exercisable, during the Participant’s lifetime, only by the Participant or by his guardian or legal representative.

(b)      Notwithstanding the provisions of (a) and subject to federal and state securities laws, the Committee may grant Nonstatutory Stock Options that permit a Participant to transfer the Options to one or more immediate family members, to a trust for the benefit of immediate family members, or to a partnership, limited liability company, or other entity the only partners, members, or interest-holders of which are among the Participant’s immediate family members. Consideration may not be paid for the transfer of Options. The transferee of an Option shall be subject to all conditions applicable to the Option prior to its transfer. The agreement granting the Option shall set forth the transfer conditions and restrictions. The Committee may impose on any transferable Option and on stock issued upon the exercise of an Option such limitations and conditions as the Committee deems appropriate.

12. Termination, Modification, Change. If not sooner terminated by the Board, this Plan shall terminate at the close of business on July 19, 2018. No Awards shall be made under the Plan after its termination. The Board may at any time terminate the Plan or may amend the Plan in such respects as it shall deem advisable, subject to shareholder approval for the amendment to the extent required under applicable law or regulation or pursuant to the listing standards of the Stock Exchange on which the Company Stock is at the time primarily traded. Notwithstanding the foregoing, the Board may unilaterally amend the Plan and Awards as it deems appropriate to cause Incentive Stock Options to meet the requirements of the Code and regulations thereunder. Except as provided in the preceding sentence, a termination or amendment of the Plan shall not, without the consent of the Participant, adversely affect a Participant’s rights under an Award previously granted to him.

13. Change in Capital Structure.

(a) In the event of a stock dividend, stock split or combination of shares, spin-off, reclassification, recapitalization, merger or other change in the Company’s capital stock (including, but not limited to, the creation or issuance to shareholders generally of rights, options or warrants for the purchase of common stock or preferred stock of the Company), (i) the maximum number and/or class of securities issuable under the Plan, (ii) the maximum number and/or class of securities by which the share reserve may increase automatically each Fiscal Year, (iii) the maximum number and/or class of securities for which any one person may be granted Awards under the Plan per calendar year, (iv) the maximum number and/or class of securities that may be issued pursuant to Incentive Stock Options and (v) the number and/or class of securities and the exercise price per share in effect under each outstanding Award under the Plan and the cash consideration (if any) payable per share shall be appropriately adjusted by the Committee, whose determination shall be binding on all persons. If the adjustment would produce fractional shares with respect to any Award, the Committee may adjust appropriately the number of shares covered by the Award so as to eliminate the fractional shares.

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(b) In the event the Company distributes to its shareholders a dividend, or sells or causes to be sold to a person other than the Company or a Subsidiary shares of stock in any corporation (a “Spinoff Company”) which, immediately before the distribution or sale, was a majority owned Subsidiary of the Company, the Committee shall have the power, in its sole discretion, to make such adjustments as the Committee deems appropriate. The Committee may make adjustments in the number and kind of shares or other securities to be issued under the Plan (under outstanding Awards and Awards to be granted in the future), the exercise price of Options, and other relevant provisions, and, without limiting the foregoing, may substitute securities of a Spinoff Company for securities of the Company. The Committee shall make such adjustments as it determines to be appropriate, considering the economic effect of the distribution or sale on the interests of the Company’s shareholders and the Participants in the businesses operated by the Spinoff Company, and subject to the proviso that any such adjustments or new options shall not be made or granted, respectively, that would result in subjecting the Plan to variable plan accounting treatment. The Committee’s determination shall be binding on all persons. If the adjustment would produce fractional shares with respect to any Award, the Committee may adjust appropriately the number of shares covered by the Award so as to eliminate the fractional shares.

(c) To the extent required to avoid a charge to earnings for financial accounting purposes, adjustments made by the Committee pursuant to this Section 12 to outstanding Awards shall be made so that both (i) the aggregate intrinsic value of an Award immediately after the adjustment is not greater than or less than the Award’s aggregate intrinsic value before the adjustment and (ii) the ratio of the exercise price per share to the market value per share is not reduced.

(d) Notwithstanding anything in the Plan to the contrary, the Committee may take the foregoing actions without the consent of any Participant, and the Committee’s determination shall be conclusive and binding on all persons for all purposes. The Committee shall make its determinations consistent with the applicable provisions of the Code.

14. Change of Control. In the event of a Change of Control or Corporate Change, the Committee may take such actions with respect to Awards as the Committee deems appropriate. These actions may include, but shall not be limited to, the following:

(a) At the time the Award is made, provide for the acceleration of the vesting schedule relating to the exercise or realization of the Award so that the Award may be exercised or realized in full on or before a date initially fixed by the Committee;

(b) Provide for the purchase or settlement of any such Award by the Company for any amount of cash equal to the amount which could have been obtained upon the exercise of such Award or realization of a Participant’s rights had such Award been currently exercisable or payable;

(c) Make adjustments to Awards then outstanding as the Committee deems appropriate to reflect such Change of Control or Corporate Change; provided, however, that to the extent required to avoid a charge to earnings for financial accounting purposes, such adjustments shall be made so that both (i) the aggregate intrinsic value of an Award immediately after the adjustment is not greater than or less than the Award’s aggregate intrinsic value before the Award and (ii) the ratio of the exercise price per share to the market value per share is not reduced; or

(d) Cause any such Award then outstanding to be assumed, or new rights substituted therefore, by the acquiring or surviving legal entity in such Change of Control or Corporate Change.

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15. Administration of the Plan.

(a) The Plan shall be administered by the Committee, who shall be appointed by the Board. The Board may designate the Compensation Committee of the Board, or a subcommittee of the Compensation Committee, to be the Committee for purposes of the Plan. If and to the extent required by Rule 16b-3, all members of the Committee shall be “Non-Employee Directors” as that term is defined in Rule 16b-3, and the Committee shall be comprised solely of two or more “outside directors” as that term is defined for purposes of Code section 162(m). If any member of the Committee fails to qualify as an “outside director” or (to the extent required by Rule 16b-3) a “Non-Employee Director,” such person shall immediately cease to be a member of the Committee and shall not take part in future Committee deliberations. The Board of Directors may from time to time may appoint members of the Committee and fill vacancies, however caused, in the Committee.

(b) The Committee shall have the authority to impose such limitations or conditions upon an Award as the Committee deems appropriate to achieve the objectives of the Award and the Plan. Without limiting the foregoing and in addition to the powers set forth elsewhere in the Plan, the Committee shall have the power and complete discretion to determine (i) which eligible persons shall receive an Award and the nature of the Award, (ii) the number of shares of Company Stock to be covered by each Award, (iii) whether Options shall be Incentive Stock options or Nonstatutory Stock Options, (iv) the Fair Market Value of Company Stock, (v) the time or times when an Award shall be granted, (vi) whether an Award shall become vested over a period of time, according to a performance-based vesting schedule or otherwise, and when it shall be fully vested, (vii) the terms and conditions under which restrictions imposed upon an Award shall lapse, (viii) whether a Change of Control or Corporate Change exists, (ix) the terms of incentive programs, performance criteria and other factors relevant to the issuance of Incentive Stock or the lapse of restrictions on Restricted Stock or Options, (x) when Options may be exercised, (xi) whether to approve a Participant’s election with respect to Applicable Withholding Taxes, (xii) conditions relating to the length of time before disposition of Company Stock received in connection with an Award is permitted, (xiii) notice provisions relating to the sale of Company Stock acquired under the Plan, and (xiv) any additional requirements relating to Awards that the Committee deems appropriate. Notwithstanding the foregoing, no “tandem stock options” (where two stock options are issued together and the exercise of one option affects the right to exercise the other option) may be issued in connection with Incentive Stock Options.

(c)  The Committee shall have the power to amend the terms of previously granted Awards so long as the terms as amended are consistent with the terms of the Plan and, where applicable, consistent with the qualification of an option as an Incentive Stock Option. The consent of the Participant must be obtained with respect to any amendment that would adversely affect the Participant’s rights under the Award.

(d) The Committee may adopt rules and regulations for carrying out the Plan. The Committee shall have the express discretionary authority to construe and interpret the Plan and the Award agreements, to resolve any ambiguities, to define any terms, and to make any other determinations required by the Plan or an Award agreement. The interpretation and construction of any provisions of the Plan or an Award agreement by the Committee shall be final and conclusive. The Committee may consult with counsel, who may be counsel to the Company, and shall not incur any liability for any action taken in good faith in reliance upon the advice of counsel.

(e) A majority of the members of the Committee shall constitute a quorum, and all actions of the Committee shall be taken by a majority of the members present. Any action may be taken by a written instrument signed by all of the members, and any action so taken shall be fully effective as if it had been taken at a meeting.

16.  Exchange Program.

(a)  The Committee shall have the authority to effect, at any time and from time to time, with the consent of the affected holders, the cancellation of any or all outstanding options under the Plan and to grant in exchange one or more of the following: (i) new options covering the same or a different number of shares of Company Stock but with an exercise price per share based on the Fair Market Value per share of Company Stock on the new grant date or (ii) cash or shares of Company Stock or any other Award, whether vested or unvested.

(b)  The Committee shall also have the authority, exercisable at any time and from time to time, with the consent of the affected holders, to reduce the exercise price of one or more outstanding options or issue new options with a lower exercise price in immediate cancellation of outstanding options with a higher exercise price.

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17. Issuance of Company Stock. The Company shall not be required to issue or deliver any certificate for shares of Company Stock before (i) the admission of such shares to listing on any stock exchange on which Company Stock may then be listed, (ii) receipt of any required registration or other qualification of such shares under any state or federal securities law or regulation that the Company’s counsel shall determine is necessary or advisable, and (iii) the Company shall have been advised by counsel that all applicable legal requirements have been complied with. The Company may place on a certificate representing Company Stock any legend required to reflect restrictions pursuant to the Plan, and any legend deemed necessary by the Company’s counsel to comply with federal or state securities laws. The Company may require a customary written indication of a Participant’s investment intent. Until a Participant has been issued a certificate for the shares of Company Stock acquired, the Participant shall possess no shareholder rights with respect to the shares.

18. Rights Under the Plan. Title to and beneficial ownership of all benefits described in the Plan shall at all times remain with the Company. Participation in the Plan and the right to receive payments under the Plan shall not give a Participant any proprietary interest in the Company or any Affiliate or any of their assets. No trust fund shall be created in connection with the Plan, and there shall be no required funding of amounts that may become payable under the Plan. A Participant shall, for all purposes, be a general creditor of the Company. The interest of a Participant in the Plan cannot be assigned, anticipated, sold, encumbered or pledged and shall not be subject to the claims of his creditors.

19. Beneficiary. A Participant may designate, on a form provided by the Committee, one or more beneficiaries to receive any payments under Awards of Restricted Stock or Incentive Stock after the Participant’s death. If a Participant makes no valid designation, or if the designated beneficiary fails to survive the Participant or otherwise fails to receive the benefits, the Participant’s beneficiary shall be the first of the following persons who survives the Participant: (a) the Participant’s surviving spouse, (b) the Participant’s surviving descendants, per stirpes, or (c) the personal representative of the Participant’s estate.

20. Notice. All notices and other communications required or permitted to be given under this Plan shall be in writing and shall be deemed to have been duly given if delivered personally or mailed first class, postage prepaid, as follows: (a) if to the Company—at its principal business address to the attention of the Secretary; (b) if to any Participant—at the last address of the Participant known to the sender at the time the notice or other communication is sent.

21. Interpretation. The terms of this Plan and Awards granted pursuant to the Plan are subject to all present and future regulations and rulings of the Secretary of the Treasury relating to the qualification of Incentive Stock Options under the Code or compliance with Code section 162(m), to the extent applicable, and they are subject to all present and future rulings of the Securities and Exchange Commission. If any provision of the Plan or an Award conflicts with any such regulation or ruling, to the extent applicable, the Committee shall cause the Plan to be amended, and shall modify the Award, so as to comply, or if for any reason amendments cannot be made, that provision of the Plan and/or the Award shall be void and of no effect.

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