Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (this "Agreement") is made and entered
into as of the 27th day of November, 2007 and shall be deemed
to be effective on the 15th day of December, 2007 (the
"Effective Date") by and between Christy Young Shue, an
individual residing at 20 Ramblewood Road, Shoreham, New York
11786 (the "Executive"), and Harbin Electric Inc., a Nevada
corporation (the "Company").
RECITALS
The
Company desires to employ the Executive and the Executive
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 Executive and the
Executive hereby accepts employment by the Company upon the
terms and conditions contained in this Agreement.
1.2
Office and Duties. The Executive shall serve the Company as
Executive Vice President of Finance and Investor Relations
("EVP") of the Company. Subject to the direction of the Board
of Directors (or equivalent body) of the Company (the
"Board"), the Executive, in her capacity as EVP, shall oversee
global investor relations outside of mainland PRC, capital
formation and market integration, and other general corporate
development activities. She shall perform all functions
necessary to conduct investor relations and other activities
necessary in the U.S.
1.3
Commitment. Throughout the term of this Agreement, the
Executive shall diligently and faithfully devote her full-time
efforts to the performance of her duties hereunder in a manner
that will further the business and interests of the Company.
For so long as the Executive remains employed by the Company
hereunder, the Executive may not engage in any other business
for her own account or accept employment from or serve on the
boards of directors of, or hold any other offices or positions
in, other companies or organizations without the prior written
approval of the Board; provided, however, that the Executive
may make passive equity investments in other companies or
organizations subject to the terms of Section 2.1 and the
Executive may engage in charitable, civic or community
activities that do not interfere with her duties to the
Company.
1.4
Term. The term of this Agreement shall commence on the
Effective Date and shall continue for a period of 48 months
until 15th day of December, 2011 (the "Initial Term Date"),
unless earlier terminated in accordance with Section 1.6.
Thereafter, the term of this Agreement shall automatically
extend for additional 48 month periods (each, a "Subsequent
Term") unless (i) terminated in accordance with Section 1.6,
or (ii) the Company notifies the Executive in writing of
non-renewal at least 60 days prior to the end of such Term (as
defined below). In the event that the Company continues to
employ the Executive after the Initial Term Date, the
Executive shall continue to be employed upon the same terms
and conditions as are contained in this Agreement, except that
any such employment shall be terminable by either party "at
will." 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 Executive as compensation a
base salary of not less than $100,000 per year during the Term
(the "Base Salary"), or such greater (but not lesser) amount
as shall be approved from time to time by the Board (the
"Salary"). The Salary for each year shall be paid by the
Company in accordance with the regular payroll practices of
the Company, but not less frequently than
monthly.
(b)
Restricted Stock Grant and Option Grant. Upon commencement of
employment hereunder, the Executive shall be granted options
(the "Options") to purchase 260,000 shares of the Company's
common stock (the "Common Stock") at an exercise price $15.60,
the closing price on November 26, 2007, the date that this
agreement is signed. One-fifth (1/5) of the Options (52,000
shares) shall vest immediately. The remaining Options shall
vest over a 3-year period, with 13.33% shares vesting on the
180th day of the Effective Date and the balance vesting
thereafter on a semi-annual basis, proportionately over the
course of the following three (3) years.
(c)
Other Benefits and Perquisites. Effective as of the date
hereof, and for the remainder of the Term, the Executive and
her dependent family members shall be entitled to participate
in any major medical health plan (including dental family
coverage) (the "Health Plan") that the Company offers at the
Company's expense and the Executive shall be entitled to
participate in and receive such additional benefits, if any,
under any plan or arrangement made available from time to time
by the Company to other senior management executives at an
equivalent or higher position to that of the Executive on a
basis consistent with the terms, conditions and overall
administration of any such plan or arrangement. The Company
and the Executive have further agreed that, until the Company
has enrolled the Executive and her dependent family members in
the Health Plan, the Company will reimburse the Executive
$800.00 per month, in addition to the amounts payable to the
Executive under Sections 1.5(a) and 1.5(b) hereof, to offset
the cost of the Executive purchasing her own Health Plan.
During the Term, the Company, in addition to the amounts
payable to the Executive under Sections 1.5(a) and 1.5(b)
hereof, shall provide the Executive with personal disability
insurance policy and D&O insurance coverage.
(d)
Vacations and Sick Leave. Effective as of the date hereof, and
for the remainder of the Term, the Executive shall be entitled
to the maximum number of paid absence and leave days ("PAL
Days") permitted under the Company's PAL policy in effect from
time to time (but not less than four weeks vacation). Such PAL
Days shall be administered pursuant to the regular policies of
the Company. PAL Days that are not used by the Executive in
any calendar year will not be carried forward except as
expressly provided by the PAL Day policy of the Company. The
Executive shall not be entitled to any payment or other
compensation for any unused PAL Days as of the end of any
calendar year or at the end of the Term.
(e)
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 Executive for all reasonable
travel, entertainment and other out-of-pocket expenses
incurred by the Executive in performing her obligations under
this Agreement, consistent with past practices; provided,
that, the Executive properly accounts therefore in accordance
with the Company's expenses reimbursement
policies.
1.6
Termination.
(a)
Death. If the Executive dies during the Term of this
Agreement, the Executive's employment hereunder shall
terminate upon her death and all obligations of the Company
hereunder shall terminate on such date, except that the
Executive's estate or her designated beneficiary shall be
entitled to payment of any unpaid accrued Base Salary through
the date of her death.
(b)
Disability. If the Company delivers to the Executive a notice
of the termination of this Agreement due to the disability (as
hereinafter defined) of the Executive, all obligations of the
Company hereunder shall terminate, except that Executive shall
be entitled to payment of any unpaid accrued Base Salary
through the date of termination. For purposes of this section,
Executive shall be deemed "disabled" if she shall be unable to
perform a significant and substantial part of her duties and
responsibilities in connection with the conduct of the
business and affairs of the Company and such inability lasts
for (i) a period of at least one hundred twenty (120)
consecutive days, or (ii)periods aggregating at least one
hundred eighty (180) days during any three hundred sixty five
(365) consecutive days, by reason of her physical or mental
disability, whether by reason of injury, illness or similar
cause.
(c)
Termination for Cause. The Company may at any time during the
Term, terminate this Agreement and discharge the Executive for
Cause, whereupon the Company's obligation to pay compensation
or other amounts payable hereunder to or for the benefit of
the Executive shall terminate on the date of such discharge.
Such termination may be made by the Company without prior
notice, except for terminations made pursuant to clauses (i),
(ii) and (v) below, in which instances the Executive shall be
given a reasonable opportunity to cure the breach. As used
herein the term "Cause" shall mean: (i) a willful and material
breach by Executive of the terms of this Agreement, (ii)
willful violation of specific and lawful written direction
from the Board of Directors of the Company; provided such
direction is not inconsistent with the Executive's duties and
responsibilities the Executive is holding at the time of the
directive; (iii) fraud, embezzlement or other material
dishonesty by the Executive with respect to the Company or any
of its Affiliates; (iv) conviction of the Executive of a
felony by a federal or state court of competent jurisdiction;
and (v) the Executive's willful failure to perform (other than
by reason of disability), or gross negligence in the
performance of her duties. The obligations of the Executive
under the restrictive covenants set forth in Sections 2.1
through 2.5 shall continue notwithstanding termination of the
Executive's employment pursuant to this Section
1.6(c).
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