Unassociated Document


    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.


    
      
         

      

      
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    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.


    
      
         

      

      
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    (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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    (d)
      Termination Without Cause. If the Company terminates this Agreement without
      Cause by providing written notice to the Executive, the Company shall pay the
      Executive, upon termination, the amount required pursuant to Section 1.7. 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(d).

    


    1.7
      Severance. In the event that Executive's employment hereunder shall be
      terminated by the Company without Cause (as defined in Section 1.6(c) hereof)
      at
      any time, the Executive shall be entitled to receive from the Company, in
      addition to any Base Salary earned to the date of termination, and a severance
      amount equal three (3) times the Executive's current Base Salary in effect
      on
      the date of termination and the immediate vesting of any unvested Options
      (together, the "Severance"). The Severance shall be paid in monthly increments
      during the year following such termination. In the event of such termination,
      the amounts due hereunder shall be payable without offset or defense or any
      obligation of the Executive to mitigate damages.

    


     

    ARTICLE
      II

    RESTRICTIVE
      COVENANTS

    


    2.1
      Non-Competition. The Executive 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 two (2) years thereafter (the "Restrictive
      Period"), unless the Executive is not paid all amounts due to her under this
      Agreement, she will not, as a principal, agent, employee, employer, consultant,
      stockholder, investor, director or co-partner of any person, firm, corporation
      or business entity other than the Company, or in any individual or
      representative capacity whatsoever, directly or indirectly, without the express
      prior written consent of the Company:

    


    (a)
      engage or participate in any business which competes with the Company, which
      business is the manufacturing, marketing, and sale of motor
      equipments;


    
      
         

      

      
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    (b)
      aid
      or counsel any other person, firm, corporation or business entity to do any
      of
      the above;

    


    (c)
      become employed by a firm, corporation, partnership or joint venture which
      competes with the business of the Company; or

    


    (d)
      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, the Restriction Period, the
      Executive shall not in any manner, directly or indirectly, as an individual
      on
      her own account or as an independent contractor, consultant, partner or joint
      venturer, or as an employee, representative or agent of another Person, or
      as an
      officer, director, owner or shareholder of such other Person, or otherwise
      (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 Company
      terminates the Executive without Cause, the Restriction Period, other than
      in
      connection with, for the benefit of, or in furtherance of the Company's
      business, the Executive shall not in any manner, directly or indirectly, as
      an
      individual on her own account or as an independent contractor, consultant,
      partner or joint venturer, or as an employee, representative or agent of another
      Person, or as an officer, director, owner or shareholder of such other Person,
      or otherwise, 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, to terminate such
      vendor's, supplier's or other third party's business relationship or contract
      with the Company.

    


    2.4
      Confidentiality. The Executive recognizes that, by virtue of the Executive's
      employment with the Company, the Executive will have access to Confidential
      Information (as defined below) relating to the Company's business. The Executive
      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 the Executive's duties in the
      normal course of business, or unless specifically authorized in writing by
      the
      Board, the Executive shall not use or disclose, either during or after the
      Term,
      any Confidential Information, except for any Confidential Information required
      to be disclosed by law or to comply with a request by a court or governmental
      authority (pursuant to a subpoena or otherwise), but only if the Executive
      promptly notifies the Company of the required or requested disclosure so the
      Company may seek a protective order to prevent disclosure of such Confidential
      Information.


    
      
         

      

      
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    For
      purposes of this Agreement, "Confidential Information" shall mean any and all
      information relating to the business, finances, customers, clients and
      operations of the Company, whether obtained by or furnished to the Executive
      before or after the date hereof, and regardless of the manner in which it is
      obtained or furnished. Confidential Information does not include, however,
      information which: (a) is or becomes generally available to the public other
      than as a result of an impermissible disclosure by the Executive; (b) was known
      by or made available on a non-confidential basis to the Executive prior to
      her
      employment with the Company, or (c) becomes available to the Executive on a
      non-confidential basis from a Person other than the Executive who is not known
      by the Executive to be bound by a confidentiality agreement with or other
      obligation of secrecy to the Company.

    


    2.5
      Breach of Restrictive Covenants. The period of time during which the Executive
      is prohibited from engaging in business practices pursuant to the restrictive
      covenants set forth in Sections 2.1 through 2.3 shall be extended by the length
      of time during which the Executive is in breach of any such
      covenant.

    


    2.6
      Condition Precedent. So long as the Company is in compliance with its
      obligations under Section 1.7, the restrictive covenants set forth in Sections
      2.1 through 2.5 are essential elements of this Agreement and enforceable by
      the
      Company, and, but for the Executive's agreement to comply with such covenants,
      the Company would not have entered into this Agreement. Such covenants are
      for
      the benefit of the Company and may be enforced by the Company and by any Person
      succeeding to the business of the Company pursuant to a merger or purchase
      of
      all or substantially all the assets or outstanding voting stock of the Company.
      Except as otherwise provided in the first sentence of this Section 2.6, such
      covenants by the Executive shall be construed as agreements independent of
      any
      other provision contained in this Agreement, and the existence of any claim
      or
      cause of action of the Executive against the Company, whether predicated on
      this
      Agreement or otherwise, shall not constitute a defense to the enforcement by
      the
      Company of such covenants.

    


    2.7
      Injunctive Relief. The Executive acknowledges that the services to be rendered
      by Employee under this Agreement are extraordinary and unique and are vital
      to
      the success of the Company, and that damages at law shall be an insufficient
      remedy in the event that the Executive violates or threatens to violate any
      of
      the terms of Sections 2.1 through 2.5, and the Company shall be entitled, upon
      application to a court of competent jurisdiction, to seek injunctive relief
      (including temporary restraining orders) to enforce any or all of the provisions
      of said sections, without being required to show any actual damage or to post
      an
      injunction bond or other security. The foregoing injunctive relief shall be
      in
      addition to any other rights and remedies available under applicable
      laws.

    



    
      
         

      

      
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    ARTICLE
      III

    MISCELLANEOUS

    


    3.1
      Notices. All notices, requests, demands and other communications required or
      permitted under this Agreement and the transactions contemplated herein shall
      be
      in writing or electronically and shall be deemed to have been duly sent, given,
      made and received when personally delivered, or when sent by confirmed telecopy
      or other electronic means or one business day after deposit with a nationally
      recognized overnight courier, specifying next day delivery, with written
      verification of receipt, addressed as set forth below:

    


    If
      to the
      Executive:

    Christy
      Y. Shue

    20
      Ramblewood Road

    Shoreham,
      NY 11786

    


    Fax: 631-849-5224

    Phone:
       
      914-912-4135

    Email:
      shuechristy@yahoo.com

    


    


    If
      to the
      Company:

    


    Tian
      Fu
      Yang

    c/o
      Harbin Electric, Inc.

    


    Fax: 
      86-451-86116769

    Phone: 86-451-86116757

    Email:
       
      manager@tech-full.com

    


    


    With
      a
      copy to:

    Mitchell
      S. Nussbaum 

    LOEB
      & LOEB LLP

    345
      Park
      Avenue

    New
      York,
      NY  10154 

    


    Fax: 212.504.3013

    Phone:
       
      212.407.4159

    Email:
       
      mnussbaum@loeb.com

    


    Any
      party
      may alter the address to which communications or copies are to be sent by giving
      notice of such change of address in conformity with the provisions of this
      section for the giving of notice, which shall be effective only upon
      receipt.


    
      
         

      

      
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    3.2
      Severability. The provisions of this Agreement are independent of and severable
      from each other, and no provision shall be affected or rendered invalid or
      unenforceable by virtue of the fact that for any reason any other or others
      of
      them may be invalid or unenforceable in whole or in part. If any provision
      of
      this Agreement is held to be unenforceable for any reason, it shall be adjusted
      rather than voided, if possible, in order to achieve the intent of the parties
      to the extent possible.

    


    3.3
      Entire Agreement; Amendment. This Agreement contains the entire understanding
      between the parties hereto with respect to the subject matter hereof and
      supersedes all prior and contemporaneous agreements and understandings,
      inducements or conditions, express or implied, oral or written, except as herein
      contained. This Agreement may not be modified or amended other than by an
      agreement in writing executed by the parties hereto.

    


    3.4
      Waiver. Neither the failure nor any delay on the part of either 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 other 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.

    


    3.5
      Interpretation. The parties hereto acknowledge and agree that (i) each party
      and
      each party's counsel have reviewed and negotiated the terms and provisions
      of
      this Agreement and have contributed to its revision, (ii) the rule of
      construction to the effect that any ambiguities are resolved against the
      drafting party shall not be employed in the interpretation of this Agreement,
      and (iii) the terms and provisions of this Agreement shall be construed fairly
      as to all parties hereto and not in favor of or against any party regardless
      of
      which party was generally responsible for the preparation of this
      Agreement.

    


    3.6
      Headings. The headings of paragraphs herein are included solely for convenience
      of reference and shall not control the meaning or interpretation of any of
      the
      provisions of this Agreement.

    


    3.7
      Governing Law. This Agreement shall be governed by and construed in accordance
      with the laws of the State of New York, without giving effect to its principles
      of conflict of laws.

    


    3.8
      Survival. The covenants and agreements of the parties set forth in Sections
      1.6
      and 1.7 and, Article II are of a continuing nature and shall survive the
      expiration, termination or cancellation of this Agreement, regardless of the
      reason therefore and in a manner consistent with the applicable
      section.

    


    3.9
      Binding Effect. This Agreement shall be binding upon and inure to the benefit
      of
      and be enforceable by the parties hereto and their respective heirs, personal
      representatives, successors and assigns, including any direct or indirect
      successor by purchase, merger, consolidation or otherwise to all or
      substantially all of the activities or assets of the Company. The Company shall
      require and cause any successor (whether direct or indirect by purchase, merger,
      consolidation or otherwise) to all or substantially all, of the business or
      assets of the Company, by written agreement in form and substance satisfactory
      to the Executive, expressly to assume and agree to perform this Agreement in
      the
      same manner and to the same extent that the Company would be required to perform
      if no such succession had taken place; provided, however, that any such
      succession or assignment shall not relieve the Company from its continuing
      responsibility and liability for the complete payment and performance of all
      obligations owed to the Executive under this Agreement.


    
      
         

      

      
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    3.10
      Forum Selection. Any litigation based hereon or arising out of, under or in
      connection with this Agreement, may be brought and maintained non-exclusively
      in
      the courts of the State of New York or in the United States District Court
      for
      the District of New York.

    


    3.11
      Counterparts. This Agreement may be executed in counterparts and multiple
      originals, each of which shall be deemed to be an original but all of which
      together will constitute one and the same instrument.

    


    


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    IN
      WITNESS WHEREOF, the Company has caused this AGREEMENT to be executed by its
      duly authorized representative, and the Executive has signed this Agreement,
      all
      as of the day and year first above written.

    


    


    
      	 	
              HARBIN
                ELECTRIC INC.

            
	 	 
	 	
              By:
                /s/ Tianfu Yang

            
	 	
              ----------------------

            
	 	
              Title:
                CEO & Chairman

            
	 	 
	 	 
	 	 
	 	
              EXECUTIVE

            
	 	 
	 	 
	 	
              /s/
                Christy Y. Shue

            
	 	
              ----------------------

            
	 	
              Christy
                Y. Shue

            


    

    


    


    


    
      
         

      

      
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