Exhibit 10.2

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into June 6 ,
2011 (the “Effective Date”), by and between TIBET PHARMACEUTICALS, INC., a
company incorporated and existing under the laws of the British Virgin Islands
(the “Company” and, together with all of its direct or indirect parent
companies, subsidiaries, affiliates, or subsidiaries or affiliates of its parent
companies, collectively referred to as the “Company Group”), and Yu Hong, an
individual (the “Executive”).

RECITALS

THE PARTIES ENTER THIS AGREEMENT on the basis of the following facts,
understandings and intentions:

A. The Company desires that the Executive be employed by the Company to carry
out the duties and responsibilities described below, all on the terms and
conditions hereinafter set forth.

B. The Executive desires to accept such employment on such terms and conditions.

NOW, THEREFORE, in consideration of the above recitals incorporated herein and
the mutual covenants and promises contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby expressly
acknowledged, the parties agree as follows:

1.Retention and Duties.

1.1 Retention. The Company does hereby hire, engage and employ the Executive for
the Period of Employment (as defined in Section 2) on the terms and conditions
expressly set forth in this Agreement. The Executive does hereby accept and
agree to such hiring, engagement and employment, on the terms and conditions
expressly set forth in this Agreement. The Executive agrees to commence active
employment with the Company on or before June 6 , 2011 (the first day of such
employment is referred to as the “Employment Commencement Date”).

1.2 Duties. During the Period of Employment, the Executive shall serve the
Company as its Chief Executive Officer (the “CEO”) and shall have such powers,
duties and obligations consistent with such position as the Company’s Board of
Directors (the “Board”) shall determine from time to time. The Executive shall
be subject to such directives of the Board and the corporate policies of the
Company as they are in effect from time to time throughout the Period of
Employment (including, without limitation, the Company’s business conduct and
ethics policies, as they may change from time to time). During the Period of
Employment, the Executive shall report solely to the Board of the Company.

1.3 No Other Employment; Minimum Time Commitment. During the Period of
Employment, the Executive shall both (i) devote substantially all of the
Executive’s business time, energy and skill to the performance of the
Executive’s duties for the Company, and (ii) hold no other employment. The
Executive’s service on the boards of directors (or similar body) of other
business entities is subject to the approval of the Board. The Company shall
have the right to require the Executive to resign from any board or similar body
which he may then serve if the Board reasonably determines in writing that the
Executive’s service on such board or body interferes with the effective
discharge of the Executive’s duties and responsibilities to the Company or that
any business related to such service is then in competition with any business of
the Company or any of its affiliates, successors or assigns.

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1.4 No Breach of Contract. The Executive hereby represents to the Company that:
(i) the execution and delivery of this Agreement by the Executive and the
Company and the performance by the Executive of the Executive’s duties hereunder
shall not constitute a breach of, or otherwise contravene, the terms of any
other agreement or policy to which the Executive is a party or otherwise bound;
(ii) that the Executive has no information (including, without limitation,
confidential information and trade secrets) relating to any other person or
entity which would prevent, or be violated by, the Executive entering into this
Agreement or carrying out his duties hereunder; (iii) that the Executive is not
bound by any confidentiality, trade secret or similar agreement (other than this
Agreement) with any other person or entity.

2. Period of Employment. The “Period of Employment” shall be a period of three
(3) years commencing on the Employment Commencement Date and ending at the close
of business on the third (3rd) anniversary of the Employment Commencement Date
(the “Termination Date”); provided, however, that this Agreement shall be
automatically renewed, and the Period of Employment shall be automatically
extended for one (1) additional year on the Termination Date and each
anniversary of the Termination Date thereafter, unless either party gives
notice, in writing, at least thirty (30) days prior to the expiration of this
Agreement and the Period of Employment (including any renewal thereof) of such
party’s desire to terminate the Agreement or modify its terms. The term “Period
of Employment” shall include any extension thereof pursuant to the preceding
sentence. Provision of notice that the Period of Employment shall not be
extended or further extended, as the case may be, shall not constitute a breach
of this Agreement and shall not constitute “Constructive Termination” for
purposes of this Agreement. Notwithstanding the foregoing, the Period of
Employment is subject to earlier termination as provided below in this
Agreement.

3. Compensation.

3.1 Base Salary. The Executive’s base salary (the “Base Salary”) during the
Period of Employment shall be paid in accordance with the Company’s regular
payroll practices in effect from time to time, but not less frequently than in
monthly installments. The Executive’s Base Salary for the first twelve
(12) months of the Period of Employment shall be at an annualized rate of
USD30,000. The Company will review the Executive’s Base Salary at least
annually. The Company will set the Executive’s rate of Base Salary for any
portion of the Period of Employment after the first twelve (12) months thereof.

3.2 Incentive Bonus. During the Period of Employment, the Executive shall be
eligible to receive periodic incentive bonuses under any incentive program
applicable to executive officers of the Company and approved by the Board (the
“Incentive Bonus”).

4. Benefits.

4.1 Retirement, Welfare and Fringe Benefits. During the Period of Employment,
the Executive shall be entitled to participate in all employee pension and
welfare benefit plans and programs, and fringe benefit plans and programs, made
available by the Company to the Company’s employees generally, in accordance
with the eligibility and participation provisions of such plans and as such
plans or programs may be in effect from time to time.

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4.2 Reimbursement of Business Expenses. The Executive is authorized to incur
reasonable expenses in carrying out the Executive’s duties for the Company under
this Agreement and reimbursement for all reasonable business expenses the
Executive incurs during the Period of Employment in connection with carrying out
the Executive’s duties for the Company, subject to the Company’s expense
reimbursement policies in effect from time to time.

4.3 Vacation and Other Leave. During the Period of Employment, the Executive
shall accrue and be entitled to take paid vacation in accordance with the
Company’s vacation policies in effect from time to time, including the Company’s
policies regarding vacation accruals; provided that the Executive’s rate of
vacation accrual during the Period of Employment shall be no less than three
(3) weeks per year. The Executive shall also be entitled to all other holiday
and leave pay generally available to other executives of the Company.

5. Termination.

5.1 Termination by the Company. The Executive’s employment by the Company, and
the Period of Employment, may be terminated at any time by the Company: (i) with
Cause (as defined in Section 5.5), or (ii) with no less than thirty (30) days
advance notice to the Executive, without Cause, or (iii) in the event of the
Executive’s death, or (iv) in the event that the Board determines in good faith
that the Executive has a Disability (as defined in Section 5.5).

5.2 Termination by the Executive. The Executive’s employment by the Company, and
the Period of Employment, may be terminated by the Executive with no less than
thirty (30) days advance notice to the Company; provided, however, that in the
case of a Constructive Termination (as defined herein), the Executive may
provide immediate written notice if the Company fails to, or cannot, reasonably
cure the event that gives rise to the Constructive Termination.

5.3 Benefits Upon Termination. If the Executive’s employment by the Company is
terminated during the Period of Employment for any reason by the Company or by
the Executive, or upon or following the expiration of the Period of Employment
(in any case, the date that the Executive’s employment by the Company terminates
is referred to as the “Severance Date”), the Company shall have no further
obligation to make or provide to the Executive, and the Executive shall have no
further right to receive or obtain from the Company, any payments or benefits
except as follows:

(a) The Company shall pay the Executive (or, in the event of his death, the
Executive’s estate) any Accrued Obligations (as defined in Section 5.5);

(b) If, during the Period of Employment, the Executive’s employment with the
Company terminates as a result of an Involuntary Termination (as defined in
Section 5.5), the Executive shall be entitled to the following benefits:

(i) The Company shall pay the Executive (in addition to the Accrued
Obligations), subject to tax withholding and other authorized deductions, an
amount equal to one hundred percent (100%) of the Executive’s annualized Base
Salary (as in effect immediately prior to the termination of the Executive’s
employment). Such amount is referred to hereinafter as the “Severance Benefit.”
The Company shall pay the Severance Benefit to the Executive in equal
installments on a bi-weekly basis over a period of twelve (12) months following
the Severance Date (the “Severance Period”).

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Notwithstanding the foregoing provisions of this Section 5.3, if the Executive
breaches his obligations under Section 6 of this Agreement at any time, from and
after the date of such breach, the Executive will no longer be entitled to, and
the Company will no longer be obligated to pay, any remaining unpaid portion of
the Severance Benefit.

5.4 Exclusive Remedy. The Executive agrees that the payments contemplated by
Section 5.3 (and any applicable acceleration of vesting of an equity-based award
in accordance with the terms of such award in connection with the termination of
the Executive’s employment) shall constitute the exclusive and sole remedy for
any termination of his employment and the Executive covenants not to assert or
pursue any other remedies, at law or in equity, with respect to any termination
of employment. The Company and Executive acknowledge and agree that there is no
duty of the Executive to mitigate damages under this Agreement. All amounts paid
to the Executive pursuant to Section 5.3 shall be paid without regard to whether
the Executive has taken or takes actions to mitigate damages.

5.5 Certain Defined Terms.

 

(a) As used herein, “Accrued Obligations” means:

(i) any Base Salary that had accrued but had not been paid (including accrued
and unpaid vacation time) on or before the Severance Date; and

(ii) any Incentive Bonus payable pursuant to Section 3.2 with respect to any
fiscal year in the Period of Employment preceding the year in which the
Severance Date occurs to the extent earned by but not previously paid to the
Executive; and

(iii) any reimbursement due to the Executive pursuant to Section 4.2 for
expenses incurred by the Executive on or before the Severance Date.

(b) As used herein, “Cause” shall mean, as reasonably determined by the Board
(excluding the Executive, if he is then a member of the Board), (i) any act of
personal dishonesty taken by the Executive in connection with his
responsibilities as an employee of the Company which is intended to result in
substantial personal enrichment of the Executive and is reasonably likely to
result in material harm to the Company, (ii) the Executive’s conviction of a
crime which the Board reasonably believes has had or will have a material
detrimental effect on the Company’s reputation or business, (iii) a willful act
by the Executive which constitutes misconduct and is materially injurious to the
Company, or (iv) continued violations by the Executive of the Executive’s
obligations to the Company after there has been delivered to the Executive a
written demand for performance from the Company which describes the basis for
the Company’s belief that the Executive has violated his obligations to the
Company.

(c) As used herein, “Constructive Termination” shall mean a resignation by the
Executive within thirty (30) days after the occurrence of any of the following:
(i) without the Executive’s express written consent, a material reduction of the
Executive’s duties, position or responsibilities relative to the Executive’s
duties, position or responsibilities in effect immediately prior to such
reduction, or the removal of the Executive from such duties, position and
responsibilities, unless the Executive is provided with substantially comparable
duties, position and responsibilities; (ii) without the Executive’s express
written consent, a material reduction of the facilities and perquisites
(including without limitation office space, location and administrative support)
available to the Executive immediately prior to such reduction; (iii) a
reduction by the Company of the Executive’s Base Salary

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or Incentive Bonus opportunity as in effect immediately prior to such reduction;
(iv) a material reduction by the Company in the kind or level of employee
benefits to which the Executive is entitled immediately prior to such reduction
with the result that the Executive’s overall benefits package is materially
reduced; or (v) without the Executive’s express written consent, the relocation
of the Executive to a facility or a location more than fifty (50) miles from his
current location.

(d) As used herein, “Disability” shall mean a physical or mental impairment
which, as reasonably determined by the Board, renders the Executive unable to
perform the essential functions of his employment with the Company, even with
reasonable accommodation that does not impose an undue hardship on the Company,
for more than 180 days in any 12-month period, unless a longer period is
required by applicable law, in which case that longer period would apply.

(e) As used herein, “Involuntary Termination” shall mean a Constructive
Termination or a termination of the Executive by the Company without Cause. For
purposes of clarity, the term Involuntary Termination does not include a
termination of the Executive’s employment due to the Executive’s death or
Disability.

5.6. Notice of Termination. Any termination of the Executive’s employment under
this Agreement shall be communicated by written notice of termination from the
terminating party to the other party. The notice of termination shall indicate
the specific provision(s) of this Agreement relied upon in effecting the
termination.

6. Confidentiality; Non-Competition; Non-Solicitation.

6.1 Confidential Information.

The Executive hereby agrees at all times during the term of his or her
employment and after termination, to hold in the strictest confidence, and not
to use, except for the benefit of the Company Group, or to disclose to any
person, corporation or other entity without written consent of the Company, any
Confidential Information. The Executive understands that “Confidential
Information” means any proprietary or confidential information of the Company
Group, its affiliates, their clients, customers or partners, and the Company
Group’s licensors, including, without limitation, technical data, trade secrets,
research and development information, product plans, services, customer lists
and customers (including, but not limited to, customers of the Company Group on
whom the Executive called or with whom the Executive became acquainted during
the term of his or her employment), supplier lists and suppliers, software,
developments, inventions, processes, formulas, technology, designs, drawings,
engineering, hardware configuration information, personnel information,
marketing, finances, information about the suppliers, joint ventures, licensors,
licensees, distributors and other persons with whom the Company Group does
business, information regarding the skills and compensation of other employees
of the Company Group or other business information disclosed to the Executive by
or obtained by the Executive from the Company Group, its affiliates, or their
clients, customers or partners either directly or indirectly in writing, orally
or by drawings or observation of parts or equipment.

6.3 Conflicting Employment. The Executive hereby agrees that, during the term of
his or her employment with the Company, he or she will not engage in any other
employment, occupation, consulting or other business activity related to the
business in which the Company Group is now involved or becomes involved during
the term of the Executive’s employment, nor will the Executive engage in any
other activities that conflict with his or her obligations to the Company
without the prior written consent of the Company.

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6.4 Non-Competition.

(a) The Executive hereby agrees that during the course of his or her employment
and for a period of two (2) years immediately following the termination of his
or her relationship with the Company for any reason, whether with or without
good cause or for any or no cause, at the option either of the Company or his or
herself, with or without notice, the Executive will not, without the prior
written consent of the Company, (i) serve as a partner, employee, consultant,
officer, director, manager, agent, associate, investor, or otherwise for, or
lend his or her name (or any part, variant or formative thereof), (ii) directly
or indirectly, own, purchase, organize or take preparatory steps for the
organization of, (iii) build, design, finance, acquire, lease, operate, manage,
invest in, work or consult for or otherwise affiliate himself or herself with,
any business, in competition with or otherwise similar to the business of the
Company Group, (iv) deal, directly or indirectly, in a competitive manner with
any customers doing business with the Company Group, or (v) transfer, sell,
assign, pledge, hypothecate, give, create a security interest in or lien on,
place in trust (voting or otherwise), or in any other way dispose of any equity
interest in the Company Group beneficially owned by the Executive, as the case
may be, to any person which is competitive with any significant aspect of the
business of the Company Group. The foregoing covenant shall cover the
Executive’s activities in every part of the Territory in which he or she may
conduct business during the term of such covenant as set forth above.
“Territory” shall mean (i) the People’s Republic of China (including Hong Kong),
(ii) Taiwan, (iii) the United States of America, and (iv) all other countries of
the world; provided that, with respect to clauses (iii) and (iv) of this
Section 6.4(a), the Company derives at least five percent (5%) of its gross
revenues from such geographic area prior to the date of the termination of the
Executive’s relationship with the Company.

(b) The Executive hereby acknowledges that he or she will derive significant
value from the Company’s agreement to provide him or her with that Confidential
Information of the Company Group to enable him or her to optimize the
performance of his or her duties for the Company. The Executive hereby further
acknowledges that his or her fulfillment of the obligations contained in this
Agreement, including, but not limited to, his or her obligation neither to
disclose nor to use the Confidential Information of the Company Group other than
for the Company Group’s exclusive benefit and his or her obligation not to
compete contained in subsection (a) above, is necessary to protect the
Confidential Information of the Company Group and, consequently, to preserve the
value and goodwill of the Company Group. The Executive hereby further
acknowledges the time, geographic and scope limitations of his or her
obligations under subsection (a) above are reasonable, especially in light of
the Company Group’s desire to protect their Confidential Information, and that
the Executive will not be precluded from gainful employment if he or she is
obligated not to compete with the Company Group during the period and within the
Territory as described above.

(c) The covenants contained in subsection (a) above shall be construed as a
series of separate covenants, one for each city, county and state of any
geographic area in the Territory. Except for geographic coverage, each such
separate covenant shall be deemed identical in terms to the covenant contained
in subsection (a) above. If, in any arbitration proceeding, the arbitration
panel refuses to enforce any of such separate covenants (or any part thereof),
then such unenforceable covenant (or such part) shall be eliminated from this
agreement to the extent necessary to permit the remaining separate covenants (or
portions thereof) to be enforced. In the event the provisions of subsection
(a) above are deemed to exceed the time, geographic or scope limitations
permitted by applicable law, then such provisions shall be reformed to the
maximum time, geographic or scope limitations, as the case may be, then
permitted by such law.

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(d) The Executive hereby further agrees that he or she will be compensated by
the Company in the total amount equal to the greater of (i) one month’s salary
or (ii) the minimum amount of compensation required by applicable law
(hereinafter referred to as the “Compensation”) upon the termination of his or
her employment with the Company for the covenants that the Executive makes in
this Section 6.4. The Compensation will be paid by four installments, of which
the first installment equal to 1/4 of the total amount of the Compensation will
be paid within three months after the employment is terminated and each of the
other three installments equal to 1/4 of the total amount of the Compensation
will be paid per three months thereafter.

6.5 Notification of New Employer. In the event that the Executive leaves the
employ of the Company, The Executive hereby grants consent to notification by
the Company to his or her new employer about his or her rights and obligations
under this Agreement.

6.6 Non-Solicitation. The Executive hereby agrees that for a period of two
(2) years immediately following the termination of his or her relationship with
the Company for any reason, whether with or without cause, he or she shall not
either directly or indirectly solicit, induce, recruit or encourage any
employees of the Company Group to leave their employment, or take away such
employees, or attempt to solicit, induce, recruit, encourage or take away
employees of the Company Group and/or any suppliers, customers or consultants of
the Company Group, either for his or herself or for any other person or entity.

6.7 Representations. The Executive hereby agrees to execute any proper oath or
verify any proper document required to carry out the terms of this Agreement.
The Executive hereby represents that the Executive’s performance of all the
terms of this Agreement will not breach any agreement to keep in confidence
proprietary information acquired by the Executive in confidence or in trust
prior to his or her employment by the Company. The Executive has not entered
into, and hereby agrees that he or she will not enter into, any oral or written
agreement in conflict with this Section 6.

7. Withholding Taxes. Notwithstanding anything else herein to the contrary, the
Company may withhold (or cause there to be withheld, as the case may be) from
any amounts otherwise due or payable under or pursuant to this Agreement such
national, provincial, local or any other income, employment, or other taxes as
may be required to be withheld pursuant to any applicable law or regulation.

8. Assignment. This Agreement is personal in its nature and neither of the
parties hereto shall, without the consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder; provided, however, that in the
event of a merger, consolidation, or transfer or sale of all or substantially
all of the assets of the Company with or to any other individual(s) or entity,
this Agreement shall, subject to the provisions hereof, be binding upon and
inure to the benefit of such successor and such successor shall discharge and
perform all the promises, covenants, duties, and obligations of the Company
hereunder.

9. Number and Gender. Where the context requires, the singular shall include the
plural, the plural shall include the singular, and any gender shall include all
other genders.

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10. Section Headings. The section headings of, and titles of paragraphs and
subparagraphs contained in, this Agreement are for the purpose of convenience
only, and they neither form a part of this Agreement nor are they to be used in
the construction or interpretation thereof.

11. Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of New York without giving effect
to any choice or conflict of law provision or rule that would cause the
application of the laws of any jurisdiction other than the State of New York.

12. Severability. If any provision of this Agreement or the application thereof
is held invalid, the invalidity shall not affect other provisions or
applications of this Agreement which can be given effect without the invalid
provisions or applications and to this end the provisions of this Agreement are
declared to be severable.

13. Entire Agreement. This Agreement embodies the entire agreement of the
parties hereto respecting the matters within its scope. This Agreement
supersedes all prior and contemporaneous agreements of the parties hereto that
directly or indirectly bears upon the subject matter hereof (including, without
limitation, any offer letter or previous employment agreement). Any prior
negotiations, correspondence, agreements, proposals or understandings relating
to the subject matter hereof shall be deemed to have been merged into this
Agreement, and to the extent inconsistent herewith, such negotiations,
correspondence, agreements, proposals, or understandings shall be deemed to be
of no force or effect. There are no representations, warranties, or agreements,
whether express or implied, or oral or written, with respect to the subject
matter hereof, except as expressly set forth herein.

14. Modifications. This Agreement may not be amended, modified or changed (in
whole or in part), except by a formal, definitive written agreement expressly
referring to this Agreement, which agreement is executed by both of the parties
hereto.

15. Waiver. Neither the failure nor any delay on the part of a party to exercise
any right, remedy, power or privilege under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege preclude any other or further exercise of the same or of any
right, remedy, power or privilege, nor shall any waiver of any right, remedy,
power or privilege with respect to any occurrence be construed as a waiver of
such right, remedy, power or privilege with respect to any other occurrence. No
waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.

16. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT.

17. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original as against any party whose signature
appears thereon, and all of which together shall constitute one and the same
instrument. This Agreement shall become binding when one or more counterparts
hereof, individually or taken together, shall bear the signatures of all of the
parties reflected hereon as the signatories. Photographic copies of such signed
counterparts may be used in lieu of the originals for any purpose.

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IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement
as of the Effective Date.

“COMPANY”

Tibet Pharmaceuticals, Inc.

 

By:  

/s/ Yu Hong

Name: Yu Hong Title: Chairman of the Board

“EXECUTIVE”

 

By:  

/s/ Yu Hong

Name: Yu Hong