Document:

2012 EXECUTIVE AND KEY MANAGER RESTRICTED
STOCK UNIT SUB-PLAN

(Effective January 1, 2012)

 

This 2012 Executive and Key Manager Restricted
Stock Unit Sub-Plan (“Sub-Plan”) of The Edelman Financial Group Inc., a Texas corporation (the “Company”),
sets forth the rules and regulations adopted by the Committee for issuance of Performance Units in the form of Restricted Stock
Unit Awards under Section 3 and 4 of the Long-Term Incentive Plan (“Plan”). These rules and regulations shall apply
to Awards granted effective on and after January 1, 2012. In the event of any conflict between this Sub-Plan and the Plan, the
terms and conditions of the Plan shall control.

 

Section 1.Incorporation of Plan; Capitalized Terms.

 

The provisions of the Plan are hereby incorporated
herein by reference. Except as otherwise expressly set forth herein, this Sub-Plan shall be construed in accordance with the provisions
of the Plan and any capitalized terms not otherwise defined in this Sub-Plan shall have the definitions set forth in the Plan.
In the event of any conflict between this Sub-Plan and the Plan, the terms and conditions of the Plan shall control. The Committee
shall have final authority to interpret and construe the Plan and this Sub-Plan and to make any and all determinations thereunder,
and its decision shall be binding and conclusive upon all Participants and their legal representatives in respect of any questions
arising under the Plan or this Sub-Plan.

 

Section 2. Definitions

 

When used in this Sub-Plan, the following
terms shall have the meanings as set forth below, and are in addition to the definitions set forth in the Plan.

 

2.1“Account”
means the account used to record and track the number of Restricted Stock Units granted to each Participant as provided in Section
3.4.

 

2.2“Award” as used in this Sub-Plan
means each aggregate award of Restricted Stock Units as provided in Section 3.2.

 

2.3“Date of Grant”
means the date the Committee determines that the applicable performance goals, objectives, and measures for the Performance Period
have been achieved, but not later than March 31, 2012.

 

2.4 “Performance Period”
for purposes of this Sub-Plan means January 1, 2012 to December 31, 2012.

 

2.5“Performance Schedule”
means Attachment 1 to this Sub-Plan, which sets forth the performance measures applicable to this Sub-Plan.

 

2.6“Restricted Stock Unit” for purposes
of this Sub-Plan means each unit of an Award granted to a Participant that is denominated in Shares, each of which represents a
right to receive the value of a Share (or percentage of such value, which percentage may be higher than 100%) on the terms and
conditions set forth in the Plan and the Sub-Plan.

 

    	 

    	 

    
 

2.7“Salary” means the regular base
rate of compensation payable by the Company to a Participant on an annual basis. Salary does not include bonuses, if any, or incentive
compensation, if any. Such compensation shall not be reduced by any deferrals made under any other plans or programs maintained
by the Company.

 

2.8“Section 409A” means Section 409A
of the Code, or any successor section under the Code, as amended and as interpreted by final or proposed regulations promulgated
thereunder from time to time.

 

2.9“Year” means a calendar year.

 

Section 3. Participation and Awards

 

3.1 Participant Selection. Participants
under this Sub-Plan shall be selected by the Compensation Committee in its sole discretion. Notwithstanding any provision of this
Sub-Plan to the contrary, no Participant shall have any legally binding right to any Award or payment of any amounts under this
Sub-Plan unless and until the Compensation Committee, in its sole discretion, determines the amount of such Participant’s
Award and that such Award shall be granted or paid. Prior to such time, the Compensation Committee, in its sole discretion, may
revoke or cancel any Award made to a Participant hereunder.

 

3.2 Awards. Subject to any adjustments
to be made under Section 3.5, the Compensation Committee may, in its sole discretion, grant Awards to some or all of the Participants
in the form of a specific number of Restricted Stock Units. The target as a percentage of Salary of the Awards granted for 2012
are as set forth on Attachment 2 hereto. The performance objectives and measures for the Sub-Plan are the same as the performance
measures for the 2012 Executive Incentive Plan of the Company.

 

3.3 Award Valuation at Grant. In
calculating the value of an Award for purposes of Section 3.2, the value of each Restricted Stock Unit shall be equal to the closing
price of a share of Stock on the last trading day on the Date of Grant. The Participant’s Salary shall be determined as
of the January 1 preceding the date the Award is granted, or such other time as is determined in the discretion of the Committee.
Each Award is deemed to be granted on the day that it is approved by the Committee.

 

3.4 Accounting and Adjustment of Awards.
The number of Restricted Stock Units awarded to a Participant shall be recorded in a separate Account for each Participant. The
number of Restricted Stock Units recorded in a Participant’s Account shall be adjusted to reflect any splits or other adjustments
in the Shares. Restricted Stock Units are bookkeeping entries only. A Participant shall have no rights as a stockholder of the
Company, no dividend rights and no voting rights with respect to the Restricted Stock Units. No adjustments shall be made to any

 

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3.5 Restriction
Period, Vesting. A Participant’s rights with respect to the Restricted Stock Units shall remain subject to
forfeiture at all times prior to the date(s) on which the Restricted Stock Units vests pursuant to the Section 3.5. Except as
provided in Section 4, Restricted Stock Units subject to the Award shall vest and become non-forfeitable as follows:

 

25% on the date of Grant;

50% on the first anniversary of
the Date of Grant;

75% on the second anniversary of
the Date of Grant; and

100% on the third anniversary of
the Date of Grant.

 

3.6Timing and Manner of Payment
of Restricted Stock Units. As soon as practicable after the date any Restricted Stock Units subject to the Award become
non-forfeitable (the “Payment Date”), such Restricted Stock Units shall be paid, at the Company’s option, (a) in
a lump sum cash payment equal in the aggregate to the Fair Market Value of a Share on the Payment Date multiplied by the number
of such Restricted Stock Units that become non-forfeitable upon that Payment Date or (b) by the Company delivering to the
Participant a number of Shares equal to the number of Restricted Stock Units that become non-forfeitable upon that Payment Date.
If the Restricted Stock Units are paid in Shares, the Company shall issue the Shares either (i) in certificate form or (ii) in
book entry form, registered in the name of the Participant. Delivery of any certificates will be made to the Participant’s
last address reflected on the books of the Company and its Subsidiaries unless the Company is otherwise instructed in writing.
Neither the Participant nor any of the Participant’s successors, heirs, assigns or personal representatives shall have any
further rights or interests in any Restricted Stock Units that are so paid. Notwithstanding anything herein to the contrary, the
Company shall have no obligation to issue Shares in payment of the Restricted Stock Units unless such issuance and such payment
shall comply with all relevant provisions of law and the requirements of any stock exchange upon which Shares are listed. Delivery
of any certificates will be made to the Participant’s last address reflected on the books of the Company unless the Company
is otherwise instructed in writing

 

3.7 Termination
of Employment. Excepts as otherwise provided in Section 4, in the event of the termination of a Participant’s
employment or service with the Company for any reason prior to the lapsing of the restrictions in accordance with Section 3.5 hereof
with respect to any of the Restricted Stock Units granted hereunder, such portion of the Restricted Stock Units held by the Participant
shall be automatically forfeited by the Participant as of the date of termination. Neither the Participant nor any of the Participant’s
successors, heirs, assigns, or personal representatives shall have any rights or interests in any Restricted Stock Units that are
so forfeited.

 

Section 4. Early Vesting and Forfeiture

 

4.1Termination during 2012.
Except as expressly set forth below, in the event a Participant’s employment with SMH terminates for any reason prior
to the end of the workday on December 31, 2012, such Participant will be ineligible for any Award under the Sub-Plan. In other
words, if a Participant is employed according to Company records through the end of the workday on December 31, 2012, the
Participant will, subject to the following provisions, be eligible for any award earned under the Sub-Plan for 2012.

    

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Any Participant (or his or her estate) who
ceases to be employed by the Company prior to January 1, 2013, due to the Participant’s death, Disability, or Retirement
(as such terms are defined in the Plan), subject to the Participant’s execution of a waiver and release of claims in a form
and manner satisfactory to the Company, will be eligible to receive an Award based on an adjusted annual base salary amount, but
otherwise in the same manner, to the same extent, and at the same time as the Participant would have received such Award if such
Participant’s employment had continued through December 31, 2012 (i.e., based on achievement of applicable performance
measures). The Participant’s annual base salary will be the result of the following formula: X × Y/12, where:

 

X = the Participant’s
annual base salary as in effect as of the date of termination of employment; and

Y = the number of calendar
months the Participant was actively employed by the Company during 2012, rounded up for any partial month.

 

4.2Termination on or after January 1,
2013.  Except as expressly set forth below, a Participant who ceases to be employed by SMH for any reason on or after
January 1, 2013, will forfeit any unvested Award. If any Participant (or his or her estate) who ceases to be employed by the Company
subsequent to December 31, 2012, but prior to expiration of the Restriction Period, due to the Participant’s death, Disability,
or Retirement, subject to the Participant’s execution of a waiver and release of claims in a form and manner satisfactory
to the Company, any outstanding Awards of the Participant shall immediately become vested. The Company shall issue to the Participant
all of the Shares remaining subject to the Restricted Stock Unit Award to the extent such Shares have vested in accordance with
this Section 4.2, upon the earliest of the following:

 

(i) as soon as practicable
but no later than 30 days following a Change in Control,

 

(ii) as soon as practicable
but no later than 90 days following the Participant’s death, or

 

(iii) the first business
day of the seventh month following the date of the Participant’s Retirement.

 

4.3Change in Control. In the
case of a Change in Control prior to the Date of Grant, the Committee may in its discretion amend, suspend, or terminate the Sub-Plan
and if the Sub-Plan is not amended, suspended, or terminated, the Company shall, subject to the restrictions in this Section 4.3
and Section 6.7 of the Plan, irrevocably set aside cash or Shares in one or more such grantor trusts in an amount that is sufficient
to pay each Participant employed by the Company, the net present value as of the date on which the Change in Control occurs, of
the earned benefits to which Participants would be entitled pursuant to the terms of the Sub-Plan. Any such trust shall be subject
to the claims of the general creditors of the Company in the event of bankruptcy or insolvency of the Company. Notwithstanding
the foregoing provisions of this Section 4.3, the Company shall establish no such trust if the assets thereof shall be includable
in the income of Participants thereby pursuant to Section 409A(b). In the case of a Change in Control on or after the Date of Grant,
all of the restrictions and conditions of all Restricted Stock Units then outstanding shall be deemed satisfied, and the Restriction
Period with respect thereto shall be deemed to have expired. Notwithstanding the foregoing, if and to the extent that any provision
of this Sub-Plan or an Award would cause a payment of deferred compensation that is subject to Section 409A(a)(2) of the Code to
be made upon the occurrence of a “Change in Control,” then such payment shall not be made unless such “Change
in Control” satisfies the requirements of Section 409A(2)(A)(v) of the Code and applicable regulations and rulings thereunder.

 

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4.4 Termination
of Employment. In the event that a Participant’s employment with the Company terminates for any reason other than as
provided in this Section 4, any Award made to the Participant which has not vested as provided in Section 3 shall be forfeited.

 

Section 5. Non-Assignability of Awards

 

The Awards and any right to receive payment
under the Plan and this Sub-Plan may not be sold, assigned, transferred, alienated, pledged, encumbered, otherwise disposed of,
or subject to any charge or legal process, except by will or the laws of descent and distribution, and if any attempt is made to
do so, or a Participant becomes bankrupt, then in the sole discretion of the Committee, any Award made to the Participant which
has not vested as provided in Sections 2 and 3 shall be forfeited.. Any attempt to dispose of any Restricted Stock Units in contravention
of the above restriction shall be null and void and without effect.

 

Section 6.No Right to Continued
Employment.

 

Nothing in the Plan or in this Sub-Plan
shall (a) confer on the Participant any right to continue in the employ of the Company; (b) affect the right of the Participant
or the Company to terminate the employment relationship at any time; (c) be deemed a waiver or modification of any provision
contained in any agreement between the Participant and the Company; (b) be construed as part of the Participant’s entitlement
to remuneration or benefit pursuant to a contract of employment or otherwise or as compensation for past services rendered; (e)
afford the Participant any rights or additional rights to compensation or damages as a consequence of the loss or termination of
his or her employment; or (f) entitle the Participant to any compensation or damages for any loss or potential loss he or she may
suffer by reason of being or becoming unable to vest in the Restricted Stock Units as a consequence of the loss or termination
of his or her employment with the Company.

 

Section 7.Adjustments.

 

In the event of a recapitalization,
reorganization, stock split, stock dividend, merger, consolidation, combination of shares or other change affecting the Shares
of the Company, the Committee shall make appropriate adjustments, if any, in the terms of this Sub-Plan, provided that such adjustments
shall be made in a manner that complies with the requirements of Section 409A of the Code. Any such adjustments shall be made in
accordance with the provisions of the Plan and shall be effective, final, binding and conclusive for all purposes of the Plan and
this Sub-Plan.

 

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Section 8.Withholding of Taxes.

 

The
Company shall be entitled to take any of the following actions in order to satisfy tax withholding obligations arising on account
of amounts accrued or payable under this Sub-Plan: (a) deduct from any amount accrued or payable under this Sub-Plan an amount
equal to the federal, state, and local income taxes and other amounts as may be required by law to be withheld with respect thereto,
including withholding Shares issued in payment of the Restricted Stock Units having a Fair Market Value equal to the taxes that
the Company determines it is required to withhold under applicable tax laws with respect to the Restricted Stock Units (with such
withholding obligation determined based on any applicable minimum statutory withholding rates, (b) require the Participant to pay
to the Company such withholding taxes, or (c) deduct from any other compensation payable to the Participant the amount of any withholding
obligations with respect to amounts accrued or payable under this Sub-Plan. The Committee shall determine in its discretion which
of the above actions shall be taken in order to satisfy tax withholding obligations arising on account of amounts accrued or payable
under this Sub-Plan, including but not limited to withholding from amounts not otherwise payable at such time or attributable to
Shares not otherwise issuable at such time by accelerating the issuance of Shares, as permitted under Treasury Regulation Section 1.409A-3(j)(4)(vi);
provided, however, that in furtherance of satisfying such withholding obligations, the Participant shall have the right (by delivering
written notice to the Chief Financial Officer of the Company at the time and in the manner prescribed by the Committee) to have
a number of whole Shares withheld by the Company from the Shares to be issued upon distribution with a value not to exceed the
statutory minimum tax withholding obligation. The Participant and/or his or her beneficiary (including his or her estate) shall
bear all taxes on amounts paid under the Plan to the extent no taxes are withheld, irrespective of whether withholding is required.
For these purposes, the Fair Market Value of the Shares to be withheld
shall be determined on the date that the amount of tax to be withheld is to be determined.

 

Section 9. Amendment and Termination

 

This Sub-Plan shall be subject to amendment, suspension, or
termination as provided in the Plan. No action to amend, suspend or terminate this Sub-Plan shall permit the acceleration of the
time or schedule of the payment of any Award granted under this Sub- Plan (except as provided in regulations under Section 409A).

 

Section 10.Unfunded Award.

 

The Restricted Stock Unit Awards
represent an unfunded, unsecured right to receive Shares and cash in accordance with the terms of this Sub-Plan, and the Company
shall not be required to segregate any assets with respect to any amounts or Share issuances due in connection with this Sub-Plan.

 

Section 11.Compliance with Code Section 409A.

 

Notwithstanding anything to the contrary
contained herein, this Sub-Plan is intended to be in full compliance with the requirements of, and thereby avoid any tax arising
pursuant to, Section 409A of the Code. Accordingly, all provisions herein, or incorporated by reference, shall be construed and
interpreted in a manner consistent with such intent.

 

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Section 12. Miscellaneous

 

12.1Notices. Any and all
notices, designations, consents, offers, acceptances and any other communications provided for herein shall be given in writing
and shall be delivered either personally or by registered or certified mail, postage prepaid, which shall be addressed, in the
case of the Company to both the Chief Financial Officer and the General Counsel of the Company at the principal office of the Company
and, in the case of a Participant, to the Participant’s address appearing on the books of the Company or to the Participant’s
residence or to such other address as may be designated in writing by the Participant.

 

12.2Successors. The terms
of this Sub-Plan shall be binding upon and inure to the benefit of the Company, its successors and assigns, and of each Participant
and the beneficiaries, executors, administrators, heirs, and successors of the Participant.

 

12.3Invalid Provision.
The invalidity or unenforceability of any particular provision thereof shall not affect the other provisions hereof, and this
Sub-Plan shall be construed in all respects as if such invalid or unenforceable provision had been omitted.

 

12.4Governing Law. This
Sub-Plan and the rights of the Participant hereunder shall be construed and determined in accordance with the laws of the State
of Texas.

 

12.5Headings. The headings
of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation or construction, and
shall not constitute a part, of this Sub-Plan.

 

12.6Resolution of Disputes.
Any dispute or disagreement which may arise under, or as a result of, or in any way relate to, the interpretation, construction
or application of this Agreement shall be resolved by the Committee. Any resolution made hereunder by the Committee shall be effective,
final, binding and conclusive on the Participant and the Company for all purposes.

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Attachment 1

 

 

 

 

Proposed 2012 Performance Goals and Weights

Versus Award Opportunity Earned

	Level of Performance Achievement	Adjusted Cash Flow from Operations	Client Investment Results	Net New Client Money	Expenses as Percentage of Revenue	%  of Target Award Earned	Discretionary
	 	 	 	 	 	 	 
	(Weight)	(30%)	(20%)	(20%)	(10%)	 	(20%)
	 	 	 	 	 	 	 
	Target	100%	100%	100%	100%	100%	100%
	 	95%	95%	95%	105%	80%	
	 	90%	90%	90%	110%	60%
	 	85%	85%	85%	115%	40%
	 	80%	80%	80%	120%	30%
	Min Acceptable	75%	75%	75%	125%	20%
	 	<75%	<75%	<75%	>125%	0%	0%

 

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Attachment 2

 

Proposed 2012 Participants and Award
Targets 

 

	Title	Targeted Award
	Chairman/Chief Executive Officer	175% of salary
	President	175% of salary
	EFS Chairman/Chief Executive Officer	175% of EFS salary
	SMH EVP High Net Worth	150% of salary
	Corporate Chief Financial Officer	150% of salary
	Chief Communications Officer	150% of salary
	Chief Information Officer	150% of salary
	Chief Operations	150% of salary
	EVP Corporate	150% of salary
	Legal Counsel	120% of salary
	SMH Controller	40% of salary
	EFS Chief Financial Officer (with Division responsibility)	40% of salary
	SMH Chief Compliance Officer	35% of salary
	EFS Chief Compliance Officer	35% of salary
	Vice President Information Technology	35% of salary
	Chief Technology Officer	35% of salary
	Director, Financial Reporting	35% of salary
	SVP Operations	20% of salary
	SMH Administrative Manager	20% of salary
	VP Human Resources	20% of salary
	VP Human Resources/Training	20% of salary
	VP Marketing & Communication	30% of salary
	SVP Operations	20% of salary
	VP Operations	20% of salary
	Administrative Manager	20% of salary

 

    	9LIHUA INTERNATIONAL, INC.

 

INDEPENDENT DIRECTOR AGREEMENT

 

 

This INDEPENDENT DIRECTOR AGREEMENT (the
“Agreement”) is made and entered into as of this 3rd day of June 2011, effective as of April 14, 2011 (the “Effective
Date”), by and between Lihua International, Inc., a Delaware corporation whose shares are publicly traded (the “Company”),
and Robert Bruce, a citizen of the United States, with the following address: c/o Oakmont Advisory Group, LLC, 477 Congress Street,
Suite 1002, Portland, Maine  04101, U.S.A. (the “Independent Director”).

 

WHEREAS, the Company desires to re-engage
the Independent Director, and the Independent Director desires to serve, as a non-employee director of the Company, subject to
the terms and conditions contained in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual
promises and covenants contained herein, the receipt of which is hereby acknowledged, the Company and the Independent Director,
intending to be legally bound, hereby agree as follows:

 

1.        DEFINITIONS.

 

(a)        “Corporate Status”
describes the capacity of the Independent Director with respect to the Company and the services performed by the Independent Director
in that capacity.

 

(b)        “Entity” shall
mean any corporation, partnership, limited liability company, joint venture, trust, foundation, association, organization or other
legal entity.

 

(c)        “Proceeding” shall
mean any threatened, pending or completed claim, action, suit, arbitration, alternate dispute resolution process, investigation,
administrative hearing, appeal, or any other proceeding, whether civil, criminal, administrative or investigative, whether formal
or informal, including a proceeding initiated by the Independent Director pursuant to Section 12 of this Agreement to enforce the
Independent Director’s rights hereunder.

 

(d)        “Expenses” shall
mean all reasonable fees, costs and expenses, reasonably incurred in connection with any Proceeding, including, without limitation,
attorneys’ fees, disbursements and retainers, fees and disbursements of expert witnesses, private investigators, professional
advisors (including, without limitation, accountants and investment bankers), court costs, transcript costs, fees of experts, travel
expenses, duplicating, printing and binding costs, telephone and fax transmission charges, postage, delivery services, secretarial
services, and other disbursements and expenses.

 

(e)        “Liabilities”
shall mean judgments, damages, liabilities, losses, penalties, excise taxes, fines and amounts paid in settlement.

 

(f)        “Parent” shall
mean any corporation or other entity (other than the Company) in any unbroken chain of corporations or other entities ending with
the Company, if each of the corporations or entities, other than the Company, owns stock or other interests possessing 50% or more
of the economic interest or the total combined voting power of all classes of stock or other interests in one of the other corporations
or entities in the chain.

    	 

    	 

    

 

 

(g)        “Subsidiary” shall
mean any corporation or other entity (other than the Company) in any unbroken chain of corporations or other entities beginning
with the Company, if each of the corporations or entities, other than the last corporation or entity in the unbroken chain, owns
stock or other interests possessing 50% or more of the economic interest or the total combined voting power of all classes of stock
or other interests in one of the other corporations or entities in the chain.

 

2.        SERVICES OF INDEPENDENT DIRECTOR.
While this Agreement is in effect, the Independent Director shall perform duties as an independent director and/or a member of
the committees of the Board, be compensated for such and be reimbursed expenses in accordance with the Schedule A attached to this
Agreement, subject to the following.

 

(a)        The Independent Director will
perform services as is consistent with Independent Director’s position with the Company, as required and authorized by the
By-Laws and Certificate of Incorporation of the Company, and in accordance with high professional and ethical standards and all
applicable laws and rules and regulations pertaining to the Independent Director’s performance hereunder, including without
limitation, laws, rules and regulations relating to a public company.

 

(b)        The Independent Director is
solely responsible for taxes arising out of any compensation paid by the Company to the Independent Director under this Agreement,
and the Independent Director understands that he/she will be issued a U.S. Treasury form 1099 for any compensation paid to him/her
by the Company. The Independent Director acknowledges and agrees that because he is not an employee of the Company the Company
will not withhold any amounts for taxes from any of his payments under the Agreement.

 

(c)        The Company may offset any
and all monies payable to the Independent Director to the extent of any monies owing to the Company from the Independent Director.

 

(d)        The rules and regulations
of the Company notified to the Independent Director, from time to time, apply to the Independent Director. Such rules and regulations
are subject to change by the Board in its sole discretion. Notwithstanding the foregoing, in the event of any conflict or inconsistency
between the terms and conditions of this Agreement and rules and regulations of the Company, the terms of this Agreement control.

 

3.        REQUIREMENTS OF INDEPENDENT DIRECTOR.
During the term of the Independent Director’s services to the Company hereunder, Independent Director shall observe all applicable
laws and regulations relating to independent directors of a public company as promulgated from to time, and shall not: (1) be an
employee of the Company or any Parent or Subsidiary; (2) accept, directly or indirectly, any consulting, advisory, or other compensatory
fee from the Company other than as a director and/or a member of a committee of the Board; (3) be an affiliated person of the Company
or any Parent or Subsidiary, as the term “affiliate” is defined in 17 CFR 240.10A-3(e)(1), other than in his capacity
as a director and/or a member of a committee of the Board; (4) possess an interest in any transaction with the Company or any Parent
or Subsidiary, for which disclosure would be required pursuant to 17 CFR 229.404(a), other than in his capacity as a director and/or
a member of a committee of the Board committees; (5) be engaged in a business relationship with the Company or any Parent or Subsidiary,
for which disclosure would be required pursuant to 17 CFR 229.404(b), except that the required beneficial interest therein shall
be modified to be 5% hereby.

 

4.        REPORT OBLIGATION. While this
Agreement is in effect, the Independent Director shall immediately report to the Company in the event: (1) the Independent Director
knows or has reason to know or should have known that any of the requirements specified in Section 3 hereof is not satisfied or
is not going to be satisfied; and (2) the Independent Director simultaneously serves on an audit committee of any other public
company.

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5.        TERM AND TERMINATION. The term
of this Agreement shall be for one (1) year from the Effective Date, unless terminated as provided for in this Section 5 (the “Term”).
This Agreement and the Independent Director’s services hereunder shall terminate upon the earlier of the following:

 

(a)        Removal of the Independent
Director as a director of the Company, upon proper Board or stockholder action in accordance with the By-Laws and Certificate of
Incorporation of the Company and applicable law;

 

(b)        Resignation of the Independent
Director as a director of the Company upon written notice to the Board of Directors of the Company; or

 

(c)        Termination of this Agreement
by the Company, in the event any of the requirements specified in Section 3 hereof is not satisfied, as determined by the Company
in its sole discretion.

 

6.        LIMITATION OF LIABILITY. In no
event shall the Independent Director be individually liable to the Company or its shareholders for any damages for breach of fiduciary
duty as an independent director of the Company, unless the Independent Director’s act or failure to act involves intentional
misconduct, fraud or a knowing violation of law.

 

7.        AGREEMENT OF INDEMNITY. The Company
agrees to indemnify the Independent Director as follows:

 

(a)        Subject to the exceptions
contained in Section 8(a) below, if the Independent Director was or is a party or is threatened to be made a party to any Proceeding
(other than an action by or in the right of the Company) by reason of the Independent Director’s Corporate Status, the Independent
Director shall be indemnified by the Company against all Expenses and Liabilities incurred or paid by the Independent Director
in connection with such Proceeding (referred to herein as “Indemnifiable Expenses” and “Indemnifiable Liabilities,”
respectively, and collectively as “Indemnifiable Amounts”).

 

(b)        Subject to the exceptions
contained in Section 8(b) below, if the Independent Director was or is a party or is threatened to be made a party to any Proceeding
by or in the right of the Company, to procure a judgment in its favor by reason of the Independent Director’s Corporate Status,
the Independent Director shall be indemnified by the Company against all Indemnifiable Amounts.

 

(c)        For purposes of this Agreement,
the Independent Director shall be deemed to have acted in good faith in conducting the Company’s affairs as an independent
director of the Company and/or a member of a committee of the Board of the Company, if the Independent Director: (i) exercised
or used the same degree of diligence, care, and skill as an ordinarily prudent man would have exercised or used under the circumstances
in the conduct of his own affairs; or (ii) took, or omitted to take, an action in reliance upon advise of counsels or other professional
advisors for the Company, or upon statements made or information furnished by other directors, officers or employees of the Company,
or upon a financial statement of the Company provided by a person in charge of its accounts or certified by a public accountant
or a firm of public accountants, which the Independent Director had reasonable grounds to believe to be true.

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(d)        In
the event the Independent Director intends to engage separate legal counsel, the Independent Director shall provide at least three
business days’ prior written notice to the Company identifying therein: (i) the name, address, telephone number, and hourly
rate(s) of the attorney(s) the Independent Director intends to engage; (ii) the Proceeding in which the Independent Director has
been named as a party or is threatened to be named as a party;
and (iii) the basis for the Independent Director’s reasonable belief that he has been named or is threatened to be named
as a party to a Proceeding, including any supporting documentation. The Company may, in its discretion, decline to pay any Indemnifiable
Amounts incurred where the Independent Director has failed to comply with the notice requirements set forth in this subparagraph
(d).

 

8.        EXCEPTIONS TO INDEMNIFICATION.
Director shall be entitled to indemnification under Sections 7(a) and 7(b) above in all circumstances other than the following:

 

(a)        If indemnification is requested
under Section 7(a) and it has been adjudicated finally by a court or arbitral body of competent jurisdiction that, in connection
with the subject of the Proceeding out of which the claim for indemnification has arisen, (i) the Independent Director failed to
act in good faith and in a manner the Independent Director reasonably believed to be in or not opposed to the best interests of
the Company, (ii) the Independent Director had reasonable cause to believe that the Independent Director’s conduct was unlawful,
or (iii) the Independent Director’s conduct constituted willful misconduct, fraud or knowing violation of law, then the Independent
Director shall not be entitled to payment of Indemnifiable Amounts hereunder.

 

(b)        If indemnification is requested
under Section 7(b) and

 

(i)        it has been adjudicated finally
by a court or arbitral body of competent jurisdiction that, in connection with the subject of the Proceeding out of which the claim
for indemnification has arisen, the Independent Director failed to act in good faith and in a manner the Independent Director reasonably
believed to be in or not opposed to the best interests of the Company, including without limitation, the breach of Section 4 hereof
by the Independent Director, the Independent Director shall not be entitled to payment of Indemnifiable Amounts hereunder; or

 

(ii)        it has been adjudicated finally
by a court or arbitral body of competent jurisdiction that the Independent Director is liable to the Company with respect to any
claim, issue or matter involved in the Proceeding out of which the claim for indemnification has arisen, including, without limitation,
a claim that the Independent Director received an improper benefit or improperly took advantage of a corporate opportunity, the
Independent Director shall not be entitled to payment of Indemnifiable Amounts hereunder with respect to such claim, issue or matter.

 

9.        WHOLLY OR PARTLY SUCCESSFUL.
Notwithstanding any other provision of this Agreement, and without limiting any such provision, to the extent that the Independent
Director is, by reason of the Independent Director’s Corporate Status, a party to and is successful, on the merits or otherwise,
in any Proceeding, the Independent Director shall be indemnified in connection therewith. If the Independent Director is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues
or matters in such Proceeding, the Company shall indemnify the Independent Director against those Expenses reasonably incurred
by the Independent Director or on the Independent Director’s behalf in connection with each successfully resolved claim,
issue or matter. For purposes of this section, the termination of any claim, issue or matter in such a Proceeding by dismissal,
with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

    	4

    	 

    
 

 

10.        ADVANCES AND INTERIM EXPENSES.
Within ten (10) business days of the Independent Director’s written request for indemnification, the Company shall pay to
the Independent Director all Indemnifiable Expenses incurred by the Independent Director in connection with any Proceeding, including
a Proceeding by or in the right of the Company, in advance of the final disposition of such Proceeding, if the Independent Director
furnishes the Company with a written undertaking, to the satisfaction of the Company, to repay the amount of such Indemnifiable
Expenses advanced to the Independent Director in the event it is finally determined by a court or arbitral body of competent jurisdiction
that the Independent Director is not entitled under this Agreement to indemnification with respect to such Indemnifiable Expenses.

 

11.        PROCEDURE FOR PAYMENT OF INDEMNIFIABLE
AMOUNTS. The Independent Director shall submit to the Company a written request specifying the Indemnifiable Amounts, for which
the Independent Director seeks payment under Section 7 hereof, and the Proceeding of which the Independent Director has previously
notified the Company. At the request of the Company, the Independent Director shall furnish such documentation and information
as are reasonably available to the Independent Director and necessary to establish that the Independent Director is entitled to
indemnification hereunder. The Company shall pay such Indemnifiable Amounts within ten (10) days of receipt of all required documents.

 

12.        REMEDIES OF INDEPENDENT DIRECTOR.

 

(a)        RIGHT TO PETITION COURT. In
the event that the Independent Director makes a request for payment of Indemnifiable Amounts under Sections 7, 9-11 above, or seeks
payment of insurance under Section 14 below, and such payment or advancement is not made in a timely manner: (i) by the Company
pursuant to the terms of this Agreement, or (ii) by any insurer pursuant to the terms of its insurance policy, then the Independent
Director may petition the appropriate judicial authority to enforce the Company’s or any insurer’s obligations.

 

(b)        BURDEN OF PROOF. In any judicial
proceeding brought under Section 12 (a) above, the Company shall have the burden of proving that the Independent Director is not
entitled to payment of Indemnifiable Amounts hereunder.

 

(c)        EXPENSES. The Company agrees
to reimburse the Independent Director in full for any Expenses incurred by the Independent Director in connection with investigating,
preparing for, litigating, defending or settling any action brought by the Independent Director under Section 12 (a) above, or
in connection with any claim or counterclaim brought by the Company in connection therewith.

 

(d)        VALIDITY OF AGREEMENT. The
Company shall be precluded from asserting in any Proceeding, including, without limitation, an action under Section 12(a) above,
that the provisions of this Agreement are not valid, binding and enforceable or that there is insufficient consideration for this
Agreement and shall stipulate in court that the Company is bound by all the provisions of this Agreement.

 

(e)        FAILURE TO ACT NOT A DEFENSE.
The failure of the Company (including its Board of Directors or any committee thereof, independent legal counsel, or stockholders)
to make a determination concerning the permissibility of the payment of Indemnifiable Amounts or the advancement of Indemnifiable
Expenses under this Agreement shall not be a defense in any action brought under Section 12(a) above.

    	5

    	 

    
 

 

13.        PROCEEDINGS AGAINST COMPANY.
Except as otherwise provided in this Agreement, the Independent Director shall not be entitled to payment of Indemnifiable Amounts
or advancement of Indemnifiable Expenses with respect to any Proceeding brought by the Independent Director against the Company,
any Entity which the Company controls, any director or officer thereof, or any third party, unless the Company has consented to
the initiation of such Proceeding. This section shall not apply to counterclaims or affirmative defenses asserted by the Independent
Director in an action brought against the Independent Director.

 

14.        INSURANCE. The Company shall
obtain and maintain a policy or policies of director and officer liability insurance, with an aggregate limit of liability of not
less than $5,000,000, providing the Independent Director with coverage for claims against the Independent Director by reason of
his Corporate Status, in accordance with the terms of said insurance policy or policies (“D&O Insurance”); provided
that the Company shall not be liable under this Agreement to make any payment in connection with any claim made against the Independent
Director to the extent that the Independent Director has otherwise received payment under any insurance policy of the amounts otherwise
indemnifiable hereunder. The Company shall take any actions it deems reasonably necessary or desirable to cause the D&O insurer(s)
to pay, on behalf of the Independent Director, all amounts payable in accordance with the terms of the D&O Insurance.

 

15.        SUBROGATION. In the event of
any payment of Indemnifiable Amounts under this Agreement or the D&O Insurance, the Company or its Insurance Carrier, as the
case may be, shall be subrogated to the extent of such payment to all of the rights of contribution or recovery of the Independent
Director against other persons, and the Independent Director shall take, at the request of the Company, all reasonable action necessary
to secure such rights, including the execution of such documents as are necessary to enable the Company to bring suit to enforce
such rights.

 

16.        AUTHORITY. Each party has all
necessary power and authority to enter into, and be bound by the terms of, this Agreement, and the execution, delivery and performance
of the undertakings contemplated by this Agreement have been duly authorized by each party hereto:

 

17.        SUCCESSORS AND ASSIGNMENT. This
Agreement shall (a) be binding upon and inure to the benefit of all successors and assigns of the Company (including any transferee
of all or a substantial portion of the business, stock and/or assets of the Company and any direct or indirect successor by merger
or consolidation or otherwise by operation of law), and (b) be binding on and shall inure to the benefit of the heirs, personal
representatives, executors and administrators of the Independent Director. The Independent Director has no power to assign this
Agreement or any rights and obligations hereunder.

 

18.        CHANGE IN LAW. To the extent
that a change in applicable law (whether by statute or judicial decision) shall mandate broader or narrower indemnification than
is provided hereunder, the Independent Director shall be subject to such broader or narrower indemnification and this Agreement
shall be deemed to be amended to such extent.

 

19.        SEVERABILITY. Whenever possible,
each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if
any provision of this Agreement, or any clause thereof, shall be determined by a court of competent jurisdiction to be illegal,
invalid or unenforceable, in whole or in part, such provision or clause shall be limited or modified in its application to the
minimum extent necessary to make such provision or clause valid, legal and enforceable, and the remaining provisions and clauses
of this Agreement shall remain fully enforceable and binding on the parties.

    	6

    	 

    
 

 

20.        MODIFICATIONS AND WAIVER. Except
as provided in Section 18 hereof with respect to changes in applicable law which broaden or narrow the right of the Independent
Director to be indemnified by the Company, no supplement, modification or amendment of this Agreement shall be binding unless executed
in writing by each of the parties hereto. No delay in exercise or non-exercise by the Company of any right under this Agreement
shall operate as a current or future waiver by it as to its same or different rights under this Agreement or otherwise.

 

21.        NOTICES. All notices, requests,
demands and other communications hereunder shall be in writing and shall be deemed to have been duly given (a) when delivered by
hand, (b) when transmitted by facsimile and receipt is acknowledged, or (c) if mailed by certified or registered mail with postage
prepaid, on the third business day after the date en which it is so mailed:

 

If to Independent Director, to: Robert
Bruce. Address: c/o Oakmont Advisory Group, LLC, 477 Congress Street, Suite 1002, Portland, Maine 04101, U.S.A.

 

If to the Company, to: Jinhua Zhu,
CEO, Lihua International, Houxiang Five Star Industry District, Danyang City, Jiangsu Province, PR China 212312, or to such other
address as may have been furnished in the same manner by any party to the others.

 

22.        GOVERNING LAW. This Agreement
shall be governed by and construed and enforced under the laws of the State of Delaware.

 

23.        CONSENT TO JURISDICTION. The
parties hereby consent to the jurisdiction of the courts having jurisdiction over matters arising in Delaware for any proceeding
arising out of or relating to this Agreement. The parties agree that in any such proceeding, each party shall waive, if applicable,
inconvenience of forum and right to a jury.

 

24.        AGREEMENT GOVERNS. This Agreement
is to be deemed consistent wherever possible with relevant provisions of the By-Laws and Certificate of Incorporation of the Company;
however, in the event of a conflict between this Agreement and such provisions, the provisions of this Agreement shall control.

 

25.        INDEPENDENT CONTRACTOR. The
parties understand, acknowledge and agree that the Independent Director’s relationship with the Company is that of an independent
contractor and nothing in this Agreement is intended to or should be construed to create a relationship other than that of independent
contractor. Nothing in this Agreement shall be construed as a contract of employment/engagement between the Independent Director
and the Company or as a commitment on the part of the Company to retain the Independent Director in any capacity, for any period
of time or under any specific terms or conditions, or to continue the Independent Director’s service to the Company beyond
any period.

 

26.        ENTIRE AGREEMENT. This Agreement
constitutes the entire agreement between the Company and the Independent Director with respect to the subject matter hereof, and
supersedes all prior understandings and agreements with respect to such subject matter.

 

 

    	7

    	 

    

 

IN WITNESS WHEREOF, the parties hereto have
executed this Independent Director Agreement as of the day and year first above written.

 

	 	 	 	 
	AGREED	 	AGREED	 
	 	 	 	 
	LIHUA INTERNATIONAL, INC.	 	INDEPENDENT DIRECTOR	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	/s/ Jianhua Zhu	 	/s/ Robert C. Bruce	 
	Name:  Jianhua Zhu	 	Name: Robert C. Bruce	 
	Title:   Chairman and CEO	 	 	 
	 	 	 	 

 

    	8

    	 

    
 

SCHEDULE A

I.        COMPENSATION:

 

A. Fees. For all services rendered
by the Independent Director pursuant to this Agreement, both during and outside of normal working hours, including but not limited
to, attending all required meetings of the Board or applicable committees thereof, executive sessions of the independent directors,
reviewing filing reports and other corporate documents as requested by the Company, providing comments and opinions as to business
matters as requested by the Company, the Company agrees to pay to the Independent Director a fee in cash of Four Thousand Dollars
($4,000) per month during the Term (the “Base Fee”), so long as the Independent Director is serving on the Board of
Directors. In addition to the Base Fee, the Company agrees to pay the Independent Director a fee in cash of One Thousand Dollars
($1,000) per month (the “Audit Committee Chair Fee”), as long the Independent Director is serving as Chair of the Audit
Committee of the Board of Directors. The Base Fee and the Audit Committee Chair Fee shall be paid in cash to the Independent Director
on a quarterly basis in equal installments on the last day of each calendar quarter.

 

B. Stock Option. Upon execution
of this Agreement the Independent Director shall be granted a 10-year option to purchase Twenty Thousand (20,000) shares of common
stock of the Company, with an exercise price equal to the fair market value of a share of the Company’s common stock on the
date of the grant of the option. Such option shall vest in equal installments on July 14, 2011, October
14, 2011, January 14, 2012 and April 14, 2012, as long as the Independent Director is serving as a member of the Board of
Directors at each such time. Such award shall be made pursuant to the Company’s 2009 Omnibus Securities and Incentive Plan.
The Independent Director’s rights in respect to any grant shall be determined solely by the Compensation Committee of the
Company and are subject to execution by Independent Director of any applicable agreements as established and requested by the Company
pursuant to the 2009 Omnibus Securities and Incentive Plan.

 

C. Expenses. During the Term the
Company shall promptly reimburse the Independent Director for all expenses incurred by him/her in connection with attending (a)
all meetings of the Board or applicable committees thereof, (b) executive sessions of the independent directors, (c) stockholder
meetings, as a director or a member of any committee of the Board, which are approved by the Company in advance and (d) subject
to prior Company approval, other Company-related travel. The Company will promptly reimburse the Independent Director for hotel
accommodation expenses actually incurred in connection with any such meetings the Independent Director attends, up to $350 per
night for stays of up to five nights per meeting. The Company will only reimburse the Independent Director for economy class airplane
tickets purchased for Company business, provided, however, that if the total flight time exceeds six hours, the Company will reimburse
the Independent Director for business class tickets. The amount of such expenses eligible for reimbursement by the Company during
a calendar year shall not affect such expenses eligible for reimbursement by the Company in any other calendar year, and the reimbursement
of any such eligible expenses shall be made on or before the last day of the calendar year next following the calendar year in
which the expense was incurred. Additionally, the Company will reimburse the Independent Director up to $3,000 during the Term,
for the actual costs incurred to travel to and attend bona fide director education seminars that the Independent Director may,
in his discretion, select.

 

 

    	9

    	 

    

 

D. No Other Benefits Or Compensation.
The Independent Director acknowledges and agrees that he is not granted and is not entitled to any other benefits or compensation
from the Company for the services provided under this Agreement except expressly provided for in this Schedule A.

 

	 	 	 	 
	AGREED	 	AGREED	 
	 	 	 	 
	LIHUA INTERNATIONAL, INC.	 	INDEPENDENT DIRECTOR	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	/s/ Jianhua Zhu	 	/s/ Robert C. Bruce	 
	Name:  Jianhua Zhu	 	Name: Robert C. Bruce	 
	Title:   Chairman and CEO	 	 	 
	 	 	 	 

 

 

 

    	10

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