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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this
" Agreement ") is made and
entered into as of the 26th day of February, 2007 and shall be
deemed to have been effective on the 27th day of February, 2007
(the " Effective Date ") by
and between Joann Hu , an
individual (the " Senior Financial
Officer", hereafter call "
SFO " for short), and
Harbin Electric Inc. , a Nevada
corporation (the " Company ").
RECITALS
The Company desires to employ the SFO and the SFO
agrees to serve in the employ of the Company, all on the terms and
conditions hereinafter provided.
NOW, THEREFORE , in
consideration of the premises and the mutual covenants herein
contained, and other good and valuable consideration, the receipt
and sufficiency of which the parties hereby acknowledge, the
parties hereby agree as follows:
ARTICLE I
EMPLOYMENT
1.1 Employment . The Company hereby employs the SFO and the
SFO hereby accepts employment by the Company upon the terms and
conditions contained in this Agreement.
1.2 Office
and Duties . The SFO shall serve the Company as senior
financial officer of the Company. Subject to the direction of the
management (or equivalent body) of the Company, the SFO, in
her capacity as senior financial officer, shall (i) assist the
management of the Company in doing the work related to the
Company’s preparation of financial statements and compliance
with its reporting requirements and any other duties reasonably
related to the foregoing, (ii) assist the Company in work related
to investor relations and (iii) perform such other duties as may be
reasonably assigned to her by the management of the
Company.
1.3 Commitment . Throughout the term of this Agreement, the
SFO shall diligently and faithfully devote her efforts to the
performance of her duties hereunder in a manner that will further
the business and interests of the Company.
1.4 Term . The term of this Agreement shall commence on the
Effective Date and shall continue for a period of 12 months until
February 26, 2008, and thereafter on a month to month basis unless
and until terminated upon no less than 30 days prior written notice
by either the Company or the SFO. The period of time between the
commencement and termination of this Agreement is referred to
herein as the " Term ."
1.5 Compensation .
(a) Salary . The Company shall pay the SFO as compensation a
base salary of not less than $2,500 per month during the
Term.
(b) Restricted Stock Grant and Option Grant . The SFO shall
be granted options (the " Options ") to purchase 25,000 shares of the Company’s common
stock (the " Common Stock ")
during each three (3) year period that the SFO continues to serve
the Company in such capacity. Upon commencement of employment
hereunder, the SFO shall be granted Options to purchase 25,000
shares of the Common Stock at an exercise price $12.40, the closing
price on February 26, 2007. Provided that the SFO is employed by
the Company on each applicable vesting date, the remaining Options
shall vest quarterly on the last day of each calendar quarter (each
a "Vesting Date") commencing on March 31, 2007, over a three year
period, with 2087 shares vesting on February 28, 2007 and 2083
shares vesting thereafter on each applicable Vesting
Date.
(c) Payment
and Reimbursement of Expenses . Effective as of the date
hereof, and for the remainder of the Term, the Company shall pay or
reimburse the SFO for all reasonable travel, entertainment and
other out-of-pocket expenses incurred by the SFO in performing her
obligations under this Agreement, consistent with past
practices; provided , that , the SFO properly accounts
therefore in accordance with the Company’s expenses
reimbursement policies.
ARTICLE II
RESTRICTIVE COVENANTS
2.1 Non-Competition . The SFO agrees that at all times while
she is employed by the Company and, regardless of the reason for
termination of her employment or this Agreement, for a period of 2
years thereafter (the " Restrictive Period
"), unless the SFO is not paid all amounts due to
her under this Agreement, she will not, directly or indirectly,
approach, solicit business from, or otherwise do business or deal
with any customer of the Company in connection with any product or
service competitive to any provided by the Company.
2.2 Non-solicitation of Employees . During the Term and,
unless the SFO is not paid all amounts due to her under this
Agreement, the Restrictive Period, the SFO shall not in any manner,
directly or indirectly(a) solicit, induce or encourage or attempt
to solicit, induce or encourage, any employee of the Company to
leave the Company, (b) hire any employee of the Company or (c)
otherwise interfere with the Company’s employment
relationship with any employee. The word "
employee " in this Section 2.2
means any person who is or was employed by the Company or any of
its affiliates at the time of, or within 180 days prior to, such
solicitation, inducement, encouragement, hiring or
interference.
2.3 Non-interference with Contract . During the Term and,
unless the SFO is not paid all amounts due to her under this
Agreement, the Restriction Period, other than in connection with,
for the benefit of, or in furtherance of the Company’s
business, the SFO shall not in any manner, directly or indirectly
solicit, encourage or induce, or attempt to solicit, encourage or
induce, any vendor, supplier or other third party with whom the
Company is doing business or has a contract as of the date of
termination, of her employment, to terminate such vendor’s,
supplier’s or other third party’s business relationship
or contract with the Company.
2.4 Confidentiality . The SFO recognizes that, by virtue of
the SFO’s employment with the Company, the SFO will have
access to Confidential Information (as defined below) relating to
the Company’s business. The SFO agrees that such Confidential
Information is a valuable asset, and if it were to be known or used
by others engaged in a similar business, it would be harmful and
detrimental to the Company’s interests. Accordingly, except
as may be required or appropriate for the performance of t
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