8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934 

Date of report (Date of earliest event reported): February 11, 2008 (February 8, 2008)

CHINA WIND SYSTEMS, INC.

(Exact name of registrant as specified in Charter)

Delaware	33-16335	74-2235008
(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(IRS Employee Identification No.)

No. 9 Yanyu Middle Road

Qianzhou Village, Huishan District, Wuxi City

Jiangsu Province, People’s Republic of China

(Address of Principal Executive Offices)

(86) 51083397559

(Registrant’s Telephone number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Forward Looking Statements

This Form 8-K and other reports filed by Registrant from time to time with the Securities and Exchange Commission (collectively the “Filings”) contain or may contain forward looking statements and information that are based upon beliefs of, and information currently available to, Registrant’s management as well as estimates and assumptions made by Registrant’s management. When used in the filings the words “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan” or the negative of these terms and similar expressions as they relate to Registrant or Registrant’s management identify forward looking statements. Such statements reflect the current view of Registrant with respect to future events and are subject to risks, uncertainties, assumptions and other risk factors relating to Registrant’s industry, Registrant’s operations and results of operations and any businesses that may be acquired by Registrant. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.

Although Registrant believes that the expectations reflected in the forward looking statements are reasonable, Registrant cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, Registrant does not intend to update any of the forward-looking statements to conform these statements to actual results.

In this Form 8-K, references to “we,” “our,” “us,” “Company,” “China Wind Systems” or “Registrant” refer to China Wind Systems, Inc., a Delaware corporation.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

(b) Effective February 8, 2008, Mr. Adam Wasserman resigned as our Chief Financial Officer.

(c) Effective February 8, 2008, our board of directors (the “Board”) appointed Ms. Judy Ye as China Wind Systems’ new Chief Financial Officer.

Ms. Ye has over thirteen years of experience in financial and management accounting. Prior to joining China Wind Systems, Ms. Ye was the president of ARSY Consulting Ltd., where she was in charge of providing financial consulting services to clients as well as preparing their annual and quarterly financial reports filed with the SEC. Previously, Ms Ye worked as a Controller and Financial Advisor of Tengtu International Corporation, an online education platform company, which develops and sells e-learning software, computer systems, and educational materials to China’s Ministry of Education. Prior to that, Ms Ye worked as a Corporate Accountant at Bluenotes Canada, a subsidiary of American Eagle Outfitters, Inc. Prior to that, Ms Ye worked as a Financial Analyst at DST Canada. Ms. Ye started her career as an accountant, 1994, at BPI Capital Financial Corp. Ms. Judy Ye holds a MBA degree from Laurentian University, Ontario, Canada. Ms. Ye is also a CPA and a registered certified general accountant in Canada. Ms. Ye has working knowledge of US GAAP. Ms. Ye is fluent in both Mandarin and English.

The Employment Agreement

We entered into an Employment Agreement with Ms. Ye on February 8, 2008. Under the terms of the Employment Agreement, Ms. Ye is appointed Chief Financial Officer of China Wind Systems for a term (“Term”) of twenty-four months, at the end of which the Employment Agreement is terminated automatically unless upon terms to be negotiated and mutually agreed to by the parties. Additionally, Ms. Ye is to receive an annual salary of $85,000 and, at the discretion of our Board, may be eligible for an annual bonus which amount, if any, and payment will be determined by the Board. Ms. Ye is also granted options to purchase shares of China Wind Systems’ common stock. In connection therewith, Ms. Ye entered into a Stock Option Agreement with us, described below. Further, the Employment Agreement provides Ms. Ye with the right to participate in any employee benefit plans that we may establish.

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We may terminate for cause the Employment Agreement upon written notice if at any time Ms. Ye: (a) engages in misconduct that may have a material adverse effect on the business and affairs of China Wind Systems; (b) disregards the legal instructions of the Board consistent with her position relating to the business of China Wind Systems or neglects or fails to discharge her duties so as to materially and adversely affect the business and affairs of China Wind Systems; (c) engages in any activity in competition with China Wind Systems without our prior approval; (d) is convicted of felony or (e) habitually abuses alcohol or controlled substances. Such termination for cause, however, is predicated on Ms. Ye first receiving a notice from the Board advising her of the specific acts or omissions constituting a cause for termination, and her subsequent failure to correct such acts or omissions after a reasonable opportunity (at least 10 days from her receipt of the Board’s notice) to do so. The Employment Agreement terminates automatically upon Ms. Ye’s death. If our termination breaches the terms of the Employment Agreement, Ms. Ye is entitled to receive the lesser of the remaining salary due to her under the Employment Agreement or three (3) months salary at the salary rate set in the Employment Agreement (“Severance Payment”). Ms. Ye will also be entitled to receive any previously declared bonus.

On the other hand, Ms. Ye may terminate the Employment Agreement upon a 15-day written notice if: (i) Ms. Ye is no longer the Chief Financial Officer or its equivalent; (ii) China Wind Systems materially reduces Ms. Ye’ duties and responsibilities; (iii) Ms. Ye’ compensation or other benefits are reduced by ten percent or more; (iv) a successor to China Wind Systems does not assume the Employment Agreement; or (v) China Wind Systems materially breaches the Employment Agreement and fails to cure within 30 days of written notice from Ms. Ye of such breach. Ms. Ye must submit her termination notice within 90 days after the occurrence of any of the events described in (i) through (v). Upon such termination, Ms. Ye is entitled to receive the Severance Payment. Ms. Ye may also terminate the Employment Agreement without cause upon a 60-day written notice, provided that she will not be entitled to receive the Severance Payment or any additional compensation for such termination.

The Employment Agreement also contains restrictive covenants preventing competition with China Wind Systems during her employment and for a period of one (1) year after termination (including contact with or solicitation of the customers, employees or suppliers of China Wind Systems), and also covenants preventing the use or disclosure of confidential business information during or at any time after termination of her employment. However, if the Employment Agreement is terminated by Ms. Ye under any of the circumstances described in (i) through (v) above, then the covenant against competition is reduced to the number of months remaining under the Employment Agreement at the time of termination plus six (6) months thereafter. Pursuant to the Employment Agreement, Ms. Ye is permitted to serve as chief financial officer of China Power until May 15, 2008, as chief financial officer of Jiali Pharmaceutical Inc. until May 31, 2008, and as president of ARSY Consulting Services, Ltd., during the Term.

The foregoing summary of the Employment Agreement is qualified in its entirety by the text of the Employment Agreement, a copy of which is included as an exhibit hereto and incorporated herein by reference.

The Options and the Stock Option Agreement

Under the Employment Agreement, Ms. Ye is granted 120,000 options to purchase shares of China Wind Systems’ common stock (“Option Shares”) at an exercise price of $2.00 per share for a period of four (4) years, and pursuant thereto, she entered into the Stock Option Agreement with us. 60,000 options will vest and become exercisable on the 12-month anniversary date of their issuance date, and the remaining 60,000 options will vest and become exercisable on the 24-month anniversary date of their issuance. If Ms. Ye terminates the Employment Agreement with or without cause, or if we terminate the Employment Agreement for cause, any options not vested at the time of such termination shall terminate. On the other hand, if we terminate in breach of the terms of the Employment Agreement, any options not vested at the time of such termination shall immediately vest.

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The Stock Option Agreement provides certain anti-dilution adjustments. Thus, in the event China Wind Systems declares or pays a dividend on its common stock in common stock or other securities, or subdivides the outstanding common stock, then upon the exercise of the options, for each share of common stock acquired, Ms. Ye will receive the number and kind of securities that she would have been entitled to received had she owned such share of common stock on the date the dividend or subdivision occurred. Upon any event that results in a change of the number and/or class of securities issuable upon the exercise of the options, Ms. Ye will receive, upon exercise of the options, the number and kind of securities and property that she would have been entitled to received had she exercised immediately prior to such event. If the number of outstanding shares of China Wind Systems’ common stock is reduced, the exercise price of the options will be proportionally increased. Lastly, any plan of consolidation, merger, sale or conveyance of all or substantially all assets by China Wind Systems (excepting a plan of complete liquidation) must provide that Ms. Ye will have the right to acquire and receive, upon exercise of the options, such stock shares, securities or assets equivalent to the number of shares of China Wind Systems common stock that she would have received had the consolidation, merger sale or conveyance not occurred.

The foregoing summary of the Stock Option Agreement is qualified in its entirety by the text of the Stock Option Agreement, a copy of which is included as an exhibit hereto and incorporated herein by reference.

Item 8.01 Other Events.

On February 11, 2008, we issued a news release announcing the appointment of Judy Ye as our new Chief Financial Officer. A copy of the news release is filed herewith as Exhibit 99.3.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

99.1 Employment Agreement between China Wind Systems, Inc. and Judy Ye dated February 8, 2008.

99.2 Option Agreement between China Wind Systems, Inc. and Judy Ye dated February 8, 2008.

99.3 Press release regarding the appointment of Judy Ye as Chief Financial Officer of China Wind Systems, Inc. dated February 11, 2008.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 11, 2008	China Wind Systems, Inc.
	By:	/s/ Jianhua Wu
		Jianhua Wu
		Chief Executive Officer

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EX-99.1

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (the "Agreement") made as of this 8th day of February, 2008 by and between China Wind Systems, Inc., a Delaware corporation, having an office at No. 9 Yanyu Middle Road, Qianzhou Village, Huishan District, Wuxi City, Jiangsu Province, People’s Republic of China (here-inafter referred to as "Employer") and Judy Ye, an individual residing at _________________ (hereinafter referred to as "Employee");

W I T N E S S E T H:

WHEREAS, Employer desires to employ Employee as Chief Financial Officer of Employer; and

WHEREAS, Employee is willing to be employed as the Chief Financial Officer of Employer in the manner provided for herein, and to perform the duties of the Chief Financial Officer of Employer upon the terms and conditions herein set forth;

NOW, THEREFORE, in consideration of the promises and mutual covenants herein set forth it is agreed as follows:

1.Employment of Chief Financial Officer of Employer. Employer hereby employs Employee as Chief Financial Officer of Employer, subject to the terms and conditions set forth in this Agreement.

2.Term.

a.Subject to Section 8 and Section 9 below, the term of this Agreement shall be for a period of twenty-four (24) months commencing on February 8, 2008 (the “Term”). This Agreement shall terminate automatically at the end of the Term unless otherwise extended upon terms to be negotiated and mutually agreed to by both parties. During the Term, Employee shall devote substantially all of her business time and efforts to Employer and its subsidiaries and affiliates.

3.Duties. The Employee shall perform those functions generally performed by persons of such title and position, and under the Employer’s bylaws. The Employee shall attend all meetings of the stock-holders and the Board (if invited to attend), shall perform any and all related duties and shall have any and all powers as may be prescribed by resolution of the Board, and shall be available to confer and consult with and advise the officers and directors of Employer at such times that may be required by Employer. Employee shall report directly and solely to the Board. As contemplated herein, the duties of the Employee shall include, but not limited, to the following: (a) review of Employer’s accounting records; (b) implementation of appropriate internal financial controls; (c) communication with Employer’s internal accounting staff; (d) liaison with Employer’s auditor and legal counsel regarding SEC filing and reporting requirements; (e) preparation of Employer’s consolidated financial statements and footnotes, and management discussion and analysis, for inclusion in Employer’s SEC filings and reports; (f) maintenance of Employer’s books and records and bank accounts in the United States; (g) meeting with Employer’s management and visit with Employer’s operational facilities; (h) participation at investor meetings and conferences; and (i) communication with Employer’s investor relationship firm.

4.Compensation.

a.(i) Employee shall be paid a base pay of USD $85,000 per year (or the equivalent in RMB based on exchange rates applicable at the time of payment) during the Term of this Agreement. Employee shall be paid once per fiscal quarter commencing with the quarter beginning February 1, 2008, payable on the first day of each such quarter.

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(ii)Employee is eligible to participate in any other compensation programs established by the Employer’s board of director or compensation committee for its executive officers, if any, which will be determined and paid in accordance with policies set from time to time by the Board (or compensation committee thereof).

(iii)Employee shall be entitled to a twenty-day paid vacation for each fiscal year of the Term.

b.Within ten days following the commencement of employment, Employer shall grant Employee a non-statutory option to purchase up to 120,000 shares of common stock at an exercise price of $2.00 per share, which shall be exercisable for a period of two (2) years, subject to the additional terms set forth below and in the form of agreement approved by the Board of Directors (the “Option”). The Option shall vest as follows, conditioned upon the “Continuous Service” of the Employee:

60,000 of the Options shall vest and become exercisable on the date that is 12 months from the issuance date of the Option, and

60,000 of the Options shall vest and become exercisable on the date that is 24 months from the issuance date of the Option.

c. Employee shall be eligible to participate in any employee benefit plans intended for all employees, or for all executive officers, that may be established from time to time by Employer.

d.As used herein, “Continuous Service” means that the provision of services to Employer in Employee’s capacity as Chief Financial Officer is not interrupted or terminated. In jurisdictions requiring notice in advance of an effective termination as an employee, Continuous Service shall be deemed terminated upon the actual cessation of providing services to Employer, notwithstanding any required notice period that must be fulfilled before a termination as an employee can be effective under applicable laws. Continuous Service shall not be considered interrupted in the case of any approved leave of absence. 

5.Expenses. Employee shall be reimbursed for all of her actual out-of-pocket expenses incurred in the performance of her duties hereunder, provided such expenses are acceptable to Employer, which approval shall not be unreasonably withheld, for business related travel and entertainment expenses, and that Employee shall submit to Employer detailed receipts, according to IRS guidelines, with respect thereto.

6.Secrecy. At no time shall Employee disclose to anyone any confidential or secret information (not already constituting information available to the public) concerning (a) internal affairs or proprietary business operations of Employer or (b) any trade secrets, new product developments, patents, programs or programming, especially unique processes or methods.

7.Covenant Not to Compete.

(a) Subject to, and limited by, Section 9(b), and except as set forth in attached Schedule 7, Employee will not, at any time, during the term of this Agreement, and for one (1) year thereafter, either directly or indirectly, engage in, with or for any enterprise, institution, whether or not for profit, business, or company, competitive with the business (as identified herein) of Employer as such business may be conducted on the date thereof, as a creditor, guarantor, or financial backer, stockholder, director, officer, consultant, advisor, employee, member, inventor, producer, director, or otherwise of or through any corporation, partner-ship, association, sole proprietorship or other entity; provided, that an investment by Employee, her spouse or her children is permitted if such investment is not more than four percent (4%) of the total debt or equity capital of any such competitive enterprise or business and further provided that said competitive enterprise or business is a publicly held entity whose stock is listed and traded on a national stock exchange or through the NASDAQ Stock Market. As used in this Agreement, the business of Employer shall be deemed to include the manufacturing and marketing of imaging systems.

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(b) For a period one year from the date of termination of this agreement Employee shall not contact or solicit any of the Company’s customers, employees or suppliers.

(c) During the entire time of employment, any outside consulting (paid or unpaid), employment, business venture or compensated activities (excluding those described in attached Schedule 7) must receive the written approval of the employee compensation committee, established by the board of directors, or any other committee of the board of directors serving such function.

8. Termination.

a. Termination by Employer

(i) Employer may terminate this Agreement upon written notice for Cause. For purposes hereof, "Cause" shall mean (A) Employee's misconduct as could reasonably be expected to have a material adverse effect on the business and affairs of Employer, (B) the Employee's disregard of lawful instructions of Employers Board of Directors consistent with Employee's position relating to the business of Employer or neglect of duties or failure to act, which, in each case, could reasonably be expected to have a material adverse effect on the business and affairs of Employer, (C) engaging by the Employee in conduct that constitutes activity in competition with Employer, including any unapproved activities identified in section 7(c) of this Agreement; (D) the conviction of Employee for the commission of a felony; and/or (E) the habitual abuse of alcohol or controlled substances. Notwithstanding anything to the contrary in this Section 8(a)(i), Employer may not terminate Employee's employment under this Agreement for Cause unless Employee shall have first received notice from the Board advising Employee of the specific acts or omissions alleged to constitute Cause, and such acts or omissions continue after Employee shall have had a reasonable opportunity (at least 10 days from the date Employee receives the notice from the Board) to correct the acts or omissions so complained of.

(ii)This Agreement shall automatically terminate upon the death of Employee, except that Employee's estate shall be entitled to receive any amount accrued under Section 4(a).

b.Termination by Employee

(i) Employee shall have the right to terminate her employment under this Agreement upon 30 days' notice to Employer given within 90 days following the occurrence of any of the following events (A) through (E):

(A)Employee is not appointed or retained as Chief Financial Officer (or a substantially similar position).

(B)Employer acts to materially reduce Employee's duties and responsibilities hereunder. Employee's duties and responsibilities shall not be deemed materially reduced for purposes hereof solely by virtue of the fact that Employer is (or substantially all of its assets are) sold to, or is combined with, another entity, provided that Employee shall continue to have the same duties and responsibilities with respect to Employer's business, and Employee shall report directly to the board of directors of the entity (or individual) that acquires Employer or its assets.

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(C)A Material Reduction (as hereinafter defined) in Employee's rate of base compensation, or Employee's other benefits. "Material Reduction" shall mean a ten percent (10%) differential;

(D)A failure by Employer to obtain the assumption of this Agreement by any successor;

(E)A material breach of this Agreement by Employer, which is not cured within thirty (30) days of written notice of such breach by Employer; or

(ii) Anything herein to the contrary notwithstanding, Employee may terminate this Agreement upon sixty (60) days written notice to Employer.

(iii) If Employee shall terminate this Agreement under Section 8(b)(i), Employee shall be entitled to receive the lesser of: (a) the remaining salary due to Employee under this Agreement, or (b) three (3) months salary, at the then applicable yearly salary rate set forth in section 4(a), (the “Severance Payment”). Other than the Severance Payment described in this section 8(b)(iii), Employer shall have no further obligation to compensate Employee pursuant to Section 4 above.If Employee shall terminate this Agreement pursuant to Section 8(b)(ii), Employee shall not be entitled to the Severance Payment or any additional compensation as provided in Section 4.

9. Consequences of Breach by Employer; Employment Termination.

a. If the Employer shall terminate Employee's employment under this Agreement in any way that is a breach of this Agreement by Employer, the following shall apply:

(i)Employee shall be entitled to receive the Severance Payment as described in section 8(b)(iii). Other than such Severance Payment, Employer shall have no further obligation to compensate Employee pursuant to Section(s) 4 or 8 above;

(ii)Employee shall be entitled to payment of any previously declared bonus as provided in Section 4(a) above; and

(iii)Any unvested Options as described in Section 4(b) above shall immediately vest.

b.In the event of termination of Employee's employment pursuant to Section 8(b)(i) of this Agreement, Sections 7(a) and 7(b) shall apply to Employee for the number of months remaining under this Agreement at the time of termination plus a period of six (6) months thereafter.

c. In all cases, upon termination of the employment relationship under this Agreement, the Employee agrees to exercise cooperation in returning all company records and information to the company, facilitating the transition of duties to a successor in an orderly manner, and at the request of the Employer, certifying financial statements or other documents over which the Employee had responsibility during the Employee’s term of employment.

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10.Entire Agreement; Survival. This Agreement contains the entire agreement between the parties with respect to the transactions contemplated herein and supersedes, effective as of the date hereof any prior agreement or understanding between Employer and Employee with respect to Employee's employment by Employer. The unenforceability of any provision of this Agreement shall not effect the enforceability of any other provision. This Agreement may not be amended except by an agreement in writing signed by the Employee and the Employer, or any waiver, change, discharge or modification as sought. Waiver of or failure to exercise any rights provided by this Agreement and in any respect shall not be deemed a waiver of any further or future rights. The provisions of Sections 4, 6, 7, 8(a)(ii), 8(b)(iii), 9, 10, 11, 12, 13 and 14 shall survive the termination of this Agreement.

11.Assignment. This Agreement shall not be assigned to other parties.

12.Governing Law. This Agreement and all the amendments hereof, and waivers and consents with respect thereto shall be governed by the laws of the State of Delaware, without regard to the conflicts of laws principles thereof.

13.Notices. All notices, responses, demands or other communications under this Agreement shall be in writing and shall be deemed to have been given when

a.delivered by hand;

b.sent be telex or telefax, (with receipt confirmed), provided that a copy is mailed by registered or certified mail, return receipt requested; or

c. received by the addressee as sent be express delivery service (receipt requested) in each case to the appropriate addresses, telex numbers and telefax numbers as the party may designate to itself by notice to the other parties:

(i)     if to the Employer:

China Wind Systems, Inc.

No. 9 Yanyu Middle Road

Qianzhou Village, Huishan District

Wuxi City, Jiangsu Province, PRC

Facsimile: ___________

Telephone: (86) 51083397559

(ii) if to the Employee:

Judy Ye

_____________________

_____________________

Telephone: (416) 502-3662

14.Severability of Agreement. Should any part of this Agreement for any reason be declared invalid by a court of competent jurisdiction, such decision shall not affect the validity of any remaining portion, which remaining provisions shall remain in full force and effect as if this Agreement had been executed with the invalid portion thereof eliminated, and it is hereby declared the intention of the parties that they would have executed the remaining portions of this Agreement without including any such part, parts or portions which may, for any reason, be hereafter declared invalid.

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IN WITNESS WHEREOF, the undersigned have executed this agreement as of the day and year first above written.

Employee:
	/s/ Judy Ye
	Judy Ye
	Date: February 8, 2008

Employer:
CHINA WIND SYSTEMS, INC.
By:	/s/ Jianhua Wu
	Jianhua Wu Chief Executive Officer
	Date: February 8, 2008

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Schedule 7

During the Term, Employee has the following employments in addition to her employment with Employer, which Employee shall devote no more than fifteen percent (15%) of her business time and efforts:

1. As Chief Executive Officer of China Power until May 15, 2008

2. As Chief Executive Officer of Jiali Pharmaceutical Inc. until May 31, 2008

3. As President of ARSY Consulting Services, Limited (“ARSY”), provided that Employee’s duties to ARSY shall be solely managerial and supervisory in nature.

EX-99.2

NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ASECURITIES ACT@) OR THE SECURITIES LAWS OF ANY STATE. NEITHER THE SECURITIES REPRESENTED HEREBY MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED NOR MAY THE SHARES BE ISSUED UPON EXERCISE UNLESS SUCH SECURITIES AND SHARES ARE REGISTERED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR THE COMPANY RECEIVES AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH SALE, TRANSFER, PLEDGE OR ISSUANCE IS EXEMPT FROM REGISTRATION.

CHINA WIND SYSTEMS, INC.

STOCK OPTION AGREEMENT

THIS STOCK OPTION AGREEMENT (“Option”), is made as of this 8th day of February, 2008 by and between China Wind Systems, Inc., a Delaware corporation (the “Company”), and Judy Ye (“Optionee”).

RECITALS

WHEREAS, on February 8, 2008, in connection with the execution of an employment agreement between the Company and Optionee dated even date herewith (“Employment Agreement”), the Company’s Board of Directors authorized the grant to Optionee of an option to purchase the number of shares of common stock (the “Common Shares”) of the Company specified in Paragraph 1 hereof, at the price specified therein, such option to be for the term and upon the terms and conditions hereinafter stated;

WHEREAS, the Board of Directors, or such other committee or individual that the Board of Directors appoints, shall be the “Administrator” for purposes of this Agreement;

WHEREAS, this Option is not issued under any plan.

AGREEMENT

NOW, THEREFORE, in consideration of the promises and of the undertakings of the parties hereto contained herein, it is hereby agreed:

1.Number of Shares; Option Price. Pursuant to said action of the Board of Directors, the Company hereby grants to Optionee this Option to purchase, upon and subject to the terms and conditions hereof, up to 120,000 Common Shares of the Company at an exercise price of $2.00 per share (“Exercise Price”).

2.Term. This Option shall expire on the day before the fourth anniversary of the date hereof (the “Expiration Date”) unless such Option shall have been terminated prior to that date in accordance with the provisions of this Agreement. The term “Affiliate” as used herein shall have the meaning as set forth in the Federal Securities laws of the United States.

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3.Shares Subject to Exercise. The Option shall vest and the Common Shares shall be subject to vesting, which shall cease in the event of a cessation of “Continuous Service” of the Employee, as the term is defined in the Employment Agreement. All Common Shares shall thereafter remain subject to exercise for the term specified in Paragraph 2 hereof. This Option shall vest and be exercisable for up to:

60,000 Common Shares on the date that is one year from the date hereof, and

60,000 Common Shares on the date that is two years from the date hereof.

4.Method and Time of Exercise. The Option may be exercised by written notice delivered to the Company at its principal executive office stating the number of Common Shares with respect to which the Option is being exercised, together with a check or money order made payable to the Company in the amount of the exercise price.

5.Termination of Option. In the event that Optionee terminates its employment, pursuant to Section 8(b) of the Employment Agreement, all Options not then vested shall immediately terminate.

6.Non-transferability. Except with the express written approval of the Administrator, this Option may not be assigned or transferred except by will, qualified domestic relations order or by the laws of descent and distribution, and may be exercised only by Optionee during her lifetime and after her death, by her personal representative or by the person entitled thereto under her will or the laws of intestate succession.

7.Optionee Not a Shareholder. Optionee shall have no rights as a shareholder with respect to the Common Shares of the Company covered by this Option until the date of issuance of a stock certificate or stock certificates to her upon exercise of this Option. No adjustment will be made for dividends or other rights for which the record date is prior to the date such stock certificate or certificates are issued.

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8.No Right to Employment. Nothing in the Option granted hereby shall interfere with or limit in any way the right of the Company or of any of its Affiliates to terminate Optionee's employment or consulting at any time, nor confer upon Optionee any right to continue in the employ of, or consult with, the Company or any of its Affiliates.

9.Anti-dilution Adjustment.

9.1 Stock Dividends, Stock Splits, Etc. If the Company declares or pays a dividend on its Common Stock payable in Common Stock or other securities, or subdivides the outstanding Common Stock into a greater amount of Common Stock, then upon exercise of this Option, for each Common Share acquired, Optionee shall receive, without cost to Optionee, the total number and kind of securities to which Optionee would have been entitled had Optionee owned the Common Shares of record as of the date the dividend or subdivision occurred.

9.2Reclassifications, Exchange or Substitution. Upon any reclassification, exchange, substitution, or other event that results in a change of the number and/or class of the securities issuable upon exercise of this Option, Optionee shall be entitled to receive, upon exercise of this Option, the number and kind of securities and property that Optionee would have received for the Common Shares if this Option had been exercised immediately before such reclassification, exchange, substitution, or other event. The Company or its successor shall promptly issue to Optionee a new Option for such new securities or other property. The new Option shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 10.2, including, without limitation, adjustments to the Exercise Price and to the number of securities or property issuable upon exercise of the new Option. The provisions of this Section 10.2 shall similarly apply to successive reclassifications, exchanges, substitutions, or other events.

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9.3 Adjustments for Combinations, Etc. If the outstanding shares of Common Stock are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Exercise Price shall be proportionately increased.

9.4 Merger or Consolidation. In case of any consolidation of the Company with, or merger of the Company into any other corporation, or in the case of any sale or conveyance of all or substantially all of the assets of the Company other than in connection with a plan of complete liquidation of the Company, then as a condition of such consolidation, merger or sale or conveyance, adequate provision will be made whereby the registered holder of the Option will have the right to acquire and receive upon exercise of this Option in lieu of the shares of Common Stock immediately theretofore subject to acquisition upon the exercise of this Option, such shares of stock, securities or assets as may be issued or payable with respect to or in exchange for the number of shares of Common Stock immediately theretofore subject to acquisition and receivable upon exercise of this Option had such consolidation, merger or sale or conveyance not taken place. In any such case, the Company will make appropriate provision to insure that the provisions of this Section 10 hereof will thereafter be applicable as nearly as may be in relation to any shares of stock or securities thereafter deliverable upon the exercise of this Option.

10.Restrictions on Sale of Common Shares. Optionee represents and agrees that upon her exercise of this Option, in whole or in part, unless there is in effect at that time under the Securities Act a registration statement relating to the Common Shares issued to her, she will acquire the Common Shares issuable upon exercise of this Option for the purpose of investment and not with a view to their resale or further distribution, and that upon such exercise thereof she will furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. Optionee agrees that any certificates issued upon exercise of this Option may bear a legend indicating that their transferability is restricted in accordance with applicable state and federal securities law. Any person or persons entitled to exercise this Option under the provisions of Paragraphs 5 and 6 hereof shall, upon each exercise of this Option under circumstances in which Optionee would be required to furnish such a written statement, also furnish to the Company a written statement to the same effect, satisfactory to the Company in form and substance.

11.Notices. All notices to the Company shall be addressed to the Chief Executive Officer at the principal executive office of the Company, and all notices to Optionee shall be addressed to Optionee at the address of Optionee on file with the Company or its subsidiary, or to such other address as either may designate to the other in writing. A notice shall be deemed to be duly given if and when enclosed in a properly addressed sealed envelope deposited, postage prepaid, with the United States Postal Service. In lieu of giving notice by mail as aforesaid, written notices under this Agreement may be given by personal delivery to Optionee or to the Chief Executive Officer (as the case may be).

12.Sale or Other Disposition. If Optionee at any time contemplates the disposition (whether by sale, gift, exchange, or other form or transfer) of any Shares acquired by exercise of this Option, she or she shall first notify the Company in writing of such proposed disposition and cooperate with the Company in complying with all applicable requirements of law, which, in the judgment of the Company, must be satisfied prior to such disposition.

4

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

CHINA WIND SYSTEMS, INC.
By:	/s/ Jianhua Wu
Name:	Jianhua Wu
Title:	Chairman and CEO

OPTIONEE

/s/ Judy Ye

Judy Ye

Address:

____________________

____________________

5

EXHIBIT A

PURCHASE FORM

To: China Wind Systems, Inc. Dated: ____________

The undersigned, pursuant to the provisions set forth in the attached option, hereby elects to purchase (check applicable box):

_________ shares of the Common Stock of China Wind Systems, Inc. covered by such Option.

The undersigned herewith makes payment of the full Exercise Price for such shares at the price per share provided for in such Option. Such payment takes the form of:

$______ in lawful money of the United States; and/or

Print or Type Name

(Signature must conform in all respects to name

of holder as specified on the face of the Option)

(Street Address)

(City) (State) (Zip Code)

6

EX-99.3

Contact: China Wind Systems, Inc. Ms. Judy Ye, CFO Phone: 001-416-502-3662 Email: judyhye@hotmail.com CCG Elite Investor Relations Mr. Crocker Coulson, President Phone: +1-646-213-1915 (New York)  Email: crocker.coulson@ccgir.com

FOR IMMEDIATE RELEASE

China Wind Systems, Inc. Appoints Chief Financial Officer

Wuxi, Jiangsu Province, China, - February 11, 2008 -China Wind Systems, Inc. (OTC Bulletin Board: CWSI.OB) (“China Wind Systems” or the “Company”), which through its wholly owned subsidiaries manufactures and sells industrial machines for use in the textile and energy related industries in the People’s Republic of China, today announced the appointment of Ms. Judy Ye as its new Chief Financial Officer effective February 08, 2008.

Ms. Ye will assume responsibility as the Company’s CFO on February 8, 2008 and will report directly to Mr. Jianhua Wu, CEO of China Wind Systems. Ms. Ye will be responsible for overseeing the Company’s overall financial planning, control and reporting activities. Ms. Judy Ye has over thirteen years of experience in financial and management accounting. Prior to joining China Wind, Ms. Ye was the president of ARSY Consulting Ltd. where she was in charge of providing financial consulting services as well as preparing the annual and quarterly financial reports filed with the U.S. Securities and Exchange Commission. Previously, Ms Ye worked as a Controller and Financial Advisor of Tengtu International Corporation, an online education platform company, which develops and sells e-learning software, computer systems, and educational materials to China’s Ministry of Education. Prior to that, Ms Ye worked as a Corporate Accountant at Bluenotes Canada, a subsidiary of American Eagle Outfitters, Inc. Prior to that, Ms Ye worked as a Financial Analyst at DST Canada. Ms. Ye started her career as an accountant, 1994, at BPI Capital Financial Corp. Ms. Judy Ye holds a MBA degree from Laurentian University, Ontario, Canada. Ms. Ye is also a CPA and a registered certified general accountant in Canada. Ms. Ye has working knowledge of US GAAP. Ms. Ye is fluent in both Mandarin and English.

“We are very pleased to have Ms. Ye join China Wind Systems as our Chief Financial Officer.” said Mr. Jianhua Wu, CEO of China Wind. “I am delighted to join China Wind Systems and look forward to working closely with Mr. Wu to accomplish the Company’s goals,” commented Ms. Ye. “I also look forward to working closely with the investment community in communicating the Company's financial results.”

About China Wind Systems, Inc.

China Wind Systems, through its affiliates, Huayang Dye Machine and Huayang Electrical Power Equipment, manufactures and sells industrial equipment for use in the textile and energy related industries in China. Since August 2007, the company has shifted its strategy to focus on the growing wind energy industry in China, and has begun to supply high precision rolled rings to companies in the wind power energy industry.

Safe Harbor Statement

This release contains certain "forward-looking statements" relating to the business of the Company and its subsidiary companies. These forward looking statements are often identified by the use of forward-looking terminology such as "believes, expects" or similar expressions. Such forward looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on its website (www.sec.gov). All forward-looking statements attributable the Company or to persons acting on its behalf are expressly qualified in their entirety by these factors other than as required under the securities laws. The Company does not assume a duty to update these forward-looking statements.

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