EXECUTIVE EMPLOYMENT AGREEMENT

Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
         This EXECUTIVE EMPLOYMENT AGREEMENT ("EA") is made and entered into this 31st day of July, 2008, by and among Jerry Yu ("EXECUTIVE"), a resident of Shenzhen, China, and DIGUANG INTERNATIONAL DEVELOPMENT CO., LTD.., a Nevada corporation (the "COMPANY").
I.       EMPLOYMENT.
         A.       Commencing on September 1, 2008 ("Effective Date"), and for an indefinite period thereafter, Executive shall be employed pursuant to this EA by the Company, or by a designated subsidiary of the Company (the Company or such subsidiary, as the case may be, that employs Executive will be hereinafter referred to as the "EMPLOYER"). Executive's employment pursuant to this EA shall continue for an indefinite period, until terminated by either Executive or Employer.
         B.       Subject only to the provisions of Sections III. and VII., Executive's employment shall be "at-will," meaning that either Executive or Employer may terminate it at any time, with or without any advance notice and with or without any particular reason or cause or advance procedures. It also means that Executive's job duties, responsibilities, title, reporting level, regular place of employment, compensation, benefits and Employer's policies and procedures can be changed, in the sole discretion of Employer, at any time, with or without advance notice and with or without any particular reason or cause or advance procedures.
         C.       In agreeing to be employed pursuant to this EA, Executive represents and warrants that Executive has not previously entered into, and in the future shall not enter into, any agreement, either written or oral, that conflicts with any of Executive's obligations under this EA or may be an impediment to Executive providing services under this EA.
II.      POSITION.
         A.       Executive shall be employed by Employer on a regular full-time basis, with the job title of Executive Vice President, reporting to the Chief Executive Officer. Executive shall have such job duties and responsibilities commensurate with such position, which may change as Employer's business needs and market conditions change from time-to-time.
         B.       Executive's initial, regular place or base of employment shall be at the Company's main business office in Shenzhen, China.
         C.       During Executive's employment with Employer, Executive shall devote Executive's full business time, best efforts, abilities, energies and skills to the good faith performance of Executive's job duties and responsibilities hereunder, and shall perform said duties and responsibilities at all reasonable times and places in accordance with reasonable directions and requests made by the Employer consistent with Executive's position and Employer's business needs as determined by Employer. Executive shall not engage in any other employment, business, or business-related activity unless Executive receives prior written approval from Employer's Board of Directors to hold such outside employment or engage in such business or activity, which written approval shall not be unreasonably withheld if such outside employment, business or activity would not in any way be competitive with the business or proposed business of Employer or otherwise conflict with or adversely affect in any way Executive's ability to fulfill Executive's obligations under this EA. Executive shall not be required to receive prior written approval for activities related to family investments or charitable organizations.

 
III.     CASH COMPENSATION.
A.       Salary Compensation.
                  1.       Executive shall earn and be paid a salary, at a monthly rate of Seventy thousand (70,000) RMB.  Payments to Executive shall be denominated in RMB, USD or HKD of the equivalent amount.
                  2.       Executive's salary shall be paid at periodic intervals in accordance with Employer's regular payroll schedule and practices.
                  3.       Executive's salary rate shall be reviewed from time-to-time, generally on an annual basis, and may be increased by the Compensation Committee of Company's Board of Directors ("Compensation Committee") in its sole discretion.
B.       Annual Bonus Compensation Opportunities. As a performance and retention incentive, Executive shall be eligible to earn an annual bonus award.  The terms and conditions of each such annual bonus award opportunity shall be provided in writing to Executive not later than January 31 of each calendar year for that calendar year and shall be attached to this Agreement each year as Attachment 1. However, the following will apply to each annual bonus award opportunity made available to Executive during Executive's employment with Employer.
                  1.       Each annual bonus award opportunity will be conditioned on Employer's achievement of calendar year revenue and net income objectives, and any other objectives, established in the discretion of the Board for the calendar year.
                  2.       Each annual bonus award opportunity also will be conditioned on Executive's full-time active services to Employer continuously through the calendar year. However, should the Executive be terminated without cause, leave for good reason, die or become permanently disabled, the Executive or his estate will be entitled to all bonus compensation that has been earned in accordance with the terms of the then applicable annual bonus award opportunity but not yet paid at the time of Executive's departure, death or permanent disability, including any bonus compensation earned for partial portions of a calendar year.
                  3.       It is the intent of Employer, generally, to pay annual bonuses no later than March 15 of the next calendar year, after Employer's audited financial statements for the calendar year just ended have been prepared and approved by the Board.
                  4.       The Employer may provide for periodic progress bonus awards against the total annual bonus opportunity.
C.       Discretionary Bonuses. To the extent Employer exceeds both of its revenue and net income and/or any other objectives established for a calendar year by the Board, Executive shall be eligible for a discretionary bonus award, which would be in addition to Executive's annual bonus award opportunity. Whether to grant such additional bonus award and, if so, in what form and amount, shall be determinations made by the sole discretion of the Board.   D.       Guaranteed Compensation.  Executive shall be paid cash compensation as outlined in Section III A. above for a period of 3 years after the Effective Date as defined in Section I.B of this EA, regardless of Executive’s employment status with the company, unless Executive has been terminated with CAUSE.

 
         E.       Withholdings. All cash compensation paid to Executive pursuant to this EA, including any Severance Benefits per Section VII.B., shall be subject to (i) any and all applicable federal, state and local income and employment withholding taxes; (ii) other amounts required to be deducted or withheld by Employer under applicable law or order requiring the withholding or deduction of amounts otherwise payable as compensation or wages to employees; (iii) such other withholdings and deductions as may be allowed by applicable law; and (iv) such other withholdings and deductions as may be authorized in writing by Executive.
IV.      EMPLOYEE BENEFITS & EXPENSES.
         A.       Employee Benefits. Executive shall be eligible to participate in all employee benefits and benefit plans generally made available to executive employees of Employer from time-to-time, subject to the terms, conditions and relevant qualification criteria for such benefits and benefit plans. Employer, in its discretion, may change from time-to-time the employee benefits and benefit plans it generally makes available to its executive employees.
         B.       Expenses & Expense Reimbursement. Executive shall be entitled to reimbursement from Employer of all reasonable and necessary business, travel and entertainment expenses incurred by Executive in the performance of Executive's job responsibilities hereunder, subject to the expense reimbursement policies and procedures of Employer in effect from time-to-time which, at minimum, shall require completion and submission of expense reimbursement request forms and receipts evidencing such expenses.
V.       EQUITY
         A.       Grant. Executive shall be granted shares of Company common stock ("Stock Grant") as to be determined by the Company’s Board of Directors for each year (12 months) of service with the Company. The Stock Grant will be granted to the extent permissible under applicable law.  Each annual Stock Grant will vest over one (1) year in four (4) quarterly installments , provided that Executive has continuously provided active services to Employer throughout each relevant quarter. The Stock Grant will be evidenced by the Company's form of stock grant agreement, and will be subject to the terms and conditions of that agreement. Executive will be eligible for future additional stock grants and stock option grants at the discretion of the Board of Directors.
         B.       Stock Grant and Options & Change in Control. Each stock grant and stock option granted shall contain the following terms relative to a "Change in Control" (defined in Section VI.B.2., below).
                  1.       Immediately upon a "Change in Control," fifty percent (50%) of all of Executive's then-outstanding stock grant and stock option shares, under each stock grant and stock option granted to Executive, shall immediately vest and be exercisable, unless Executive's then-outstanding options are not assumed by the surviving entity in such Change in Control transaction, in which case, one hundred percent (100%) of Executive's then-outstanding stock grant and stock option shares, under all stock grants and stock options granted to Executive, shall immediately vest and be exercisable.
                  2.       If Executive's employment with the Company or a successor is terminated "Without Cause" (defined in Section VI.C., below) by the Company or its successor within 12 months after the effective date of a "Change in Control," or if Executive terminates his employment with the Company or its successor for "Good Reason" within 12 months after the effective date of a "Change in Control", then one hundred percent (100%) of Executive's then-outstanding stock grant and stock option shares, under each stock grant and stock option granted to Executive, shall immediately vest and be exercisable as of the effective date of Executive's termination of employment ("TERMINATION DATE") provided that the conditions of Section VII.A.2. and Section VII.B.2.a.-b., below, have been satisfied by Executive no later than 90 days after the Termination Date.

 
         C.       Stock Grant at Death or Permanent Disability. The terms of the Stock Grant and each stock grant or stock option granted after the Stock Grant shall provide that one hundred percent (100%) of Executive's then-outstanding stock grant share and option shares, under all stock grants and stock options granted to Executive, shall immediately vest and become exercisable in the event of Executive's death or permanent disability.
VI.      TERMINATION OF EMPLOYMENT
Although Executive's employment shall be "at-will," termination of the employment relationship between Executive and Employer shall be classified in one of the following categories, for the limited purpose only of the Severance Benefit Opportunity of Section VII.B., below:
         A.       By Employer for Cause. Termination of Executive's employment by Employer for "CAUSE" means a termination by Employer of Executive's employment for any of the following reasons, upon written notice to Executive at any time:
                  1.       Executive's conviction or plea of nolo contendre to a felony offense or crime of violence or dishonesty; or
                  2.       The Company's good faith determination, upon majority vote of Company's Board of Directors, that:
                           a.       Executive has engaged in theft, fraud, embezzlement or dishonest conduct with respect to any property or funds of Employer, any affiliate, subsidiary or parent of Employer, or of any vendor, partner, employee or customer of Employer that is harmful to Employer, to an affiliate, subsidiary or parent of Employer or to the business, operations, reputation or business prospects of any of them;
                           b.       Executive has breached any of his obligations under the Confidential Information Agreement signed by Executive as a condition of this EA;
                           c.       Executive has engaged in an act of misconduct which has had an adverse effect on the business, operations, reputation or business prospects of Employer or of an affiliate, subsidiary or parent of Employer; or
         B.       By Executive for Good Reason.
                  1.       Termination of Executive's employment by Executive shall qualify as a termination by Executive for "GOOD REASON" if all of the following conditions are met:
                           a.       Executive shall have given advance written notice of termination to Employer ("NOTICE"), in accordance with Section VIII.H., below, that includes the following:
                                    (1)      a description of the act, omission or breach giving rise to the Notice, and
                                    (2)      a date on which Executive intends the termination to be effective ("Termination Date"), that is no earlier than 30 days after the date the Notice is delivered to the Employer;
                           b.       The act, omission or breach described in the Notice is one of the following:

 
                                    (1)      A reduction, without Executive's consent, of Executive's salary rate or bonus award opportunity by more than ten percent (10%), unless the salary rates of all Employer's executive-level employees also have been reduced by at least such percent;
                                    (2)      A relocation, without Executive's consent, of Executive's regular place or base of employment by more than fifty (50) miles; or
                                    (3)      A breach by Employer of one or more of its obligations under this EA; and
                           c.       The act, omission or breach described in the Notice first occurred:
                                    (1)      During the 12 months after the effective date of a "Change in Control" of the Company, or
                                    (2)      No earlier than 90 days before the date the Notice is delivered to the Employer; and
                           d.       The Employer failed to remedy, before the Termination Date, the act, omission or breach described in the Notice.
                  2.