Document:

Exhibit 10.1

 

EMPLOYMENT
AGREEMENT

 

This
EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of March 7, 2020 (the “Effective
Date”), by and between Future FinTech Group Inc., a Florida corporation (the “Company”), and Shanchun
Huang (the “Executive”).

 

WITNESSETH:

 

WHEREAS,
the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between
the Executive and the Company.

 

NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties
hereto agree as follows:

 

1.
EMPLOYMENT.

 

1.1
Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the
provisions of this Agreement, as an officer and employee of the Company.

 

1.2
Duties and Schedule. Executive shall serve as the Company’s Chief Executive Officer of the Company and shall be subject
to the bylaws of the Company and determined by the Board of Directors of the Company (the “Board”). The Executive
hereby agrees to devote his best efforts to the faithful performance of his duties and to the promotion and advancement of the
business and affairs of the Company. The Executive shall report directly to the Board and shall have such responsibilities as
designated by the Board to the extent that such responsibilities are not inconsistent with all applicable laws, regulations and
rules. Executive shall devote his best efforts and all of his business time to his position with the Company and shall have no
other employment with a third party during the Term.

 

2.
TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall
employ Executive for a one-year term commencing on the Effective Date (the “Term”), which Term shall be renewable
upon mutual agreement of the Company and the Executive.

 

3.
COMPENSATION.

 

3.1 Salary
and Bonus. Executive’s salary during the Term shall be US$ 1 per year after tax (the “Salary”). At the sole
discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligible
for an annual cash bonus.

 

3.2 Vacation.
Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for
one year or more, Executive shall be entitled to 12 days of paid vacation.

 

3.3
Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive;
provided that they are incurred and approved in writing in accordance with the Company’s expense policy.

 

3.4
Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of
the Company, in all general employee benefit plans and programs, including improvements or modifications of the same, which may
exist as of the Effective Date or thereafter and which are made available by the Company to all or substantially all of its employees.
Except as specifically provided herein, nothing in this Agreement is to be construed or interpreted to increase or alter in any
way the rights, participation, coverage, or benefits under such benefit plans or programs to other than those provided to other
employees pursuant to the terms and conditions of such benefit plans and programs.

 

    1

     

    

 

4.
TERMINATION.

 

4.1 Death.
This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal
representative, as the case may be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s
death, plus all other compensation and benefits that were vested through the date of Executive’s death.

 

4.2
Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled
to (a) accrued and unpaid Salary and vacation through the first date that a Disability is determined; and (b) all other compensation
and benefits that were vested through the first date that a Disability has been determined. “Disability” means the
good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled as to be unable
to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one- hundred twenty
(120) days in any three-hundred sixty (360) day period, such determination based upon a certificate as to such physical or mental
disability issued by a licensed physician and/or psychiatrist (as the case may be) mutually agreed upon by Executive and the Company.

 

4.3 Termination
by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect
upon the receipt by Executive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive
shall be solely entitled to accrued and unpaid Salary through such effective date. ”Cause” means:
(i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or
willful misconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor
traffic offenses); (iv) fraud, embezzlement or misappropriation of funds or property of the Company or an affiliate; (v)
material breach of any term of any employment or other services, confidentiality, intellectual property or non-competition
agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any
regulatory agency (including federal, state and local regulatory agencies and self-regulatory bodies) having jurisdiction
over the Company or an affiliate requiring the removal of the Executive from any office held with the Company or prohibiting
the Executive from participating in the business or affairs of the Company or any affiliate; or (vii) the revocation or
threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which
is primarily due to the Executive’s action or inaction and such revocation or threatened revocation would be alleviated
or mitigated in any material respect by the termination of the Executive’s employment or services with the Company or
an affiliate.

 

 4.4
Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination
shall take effect 30 days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination,
Executive shall be entitled to (a) accrued and unpaid Salary and vacation through such termination date; and (b) all other compensation
and benefits that were vested through such termination date.  In the event Executive is terminated without notice, it
shall be deemed a termination by the Company for Cause.

 

4.5 Notice
of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in
accordance with Section 8.4 of this Agreement (the “Notice of Termination”).   Such notice
shall (a) indicate the specific termination provision in this Agreement relied upon and (b) if the termination is for Cause,
the date on which the Executive’s employment is to be terminated.

 

4.6 Severance.
The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.

 

5.
EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual,
fiduciary or other obligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance
with their terms, any contractual obligation which may affect his performance under this Agreement; and (c) his employment with
the Company will not require him to use or disclose proprietary or confidential information of any other person or entity.

 

    2

     

    

 

6.
CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the
time the Executive is employed by the Company or at any time thereafter, the Executive shall not use for his personal purposes
nor divulge, furnish, or make accessible to anyone or use in any way (other than in the ordinary course of the business of the
Company) any confidential or secret information or knowledge of the Company, whether developed by himself or by others. Such confidential
and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’s customer and
supplier lists, trade secrets, ideas, concepts, designs, software, coding, configurations, specifications, drawings, blueprints,
diagrams, models, prototypes, samples, flow charts processes, techniques, formulas, improvements, inventions, domain names, data,
know-how, discoveries, copyrightable materials, marketing plans and strategies, sales and financial reports and forecasts, studies,
reports, records, books, contracts, instruments, surveys, computer disks, diskettes, tapes, computer programs and business plans,
prospects and opportunities (such as possible acquisitions or dispositions of businesses or facilities). The Executive agrees
to refrain from any acts or omissions that would reduce the value of any confidential or secret knowledge or information to the
Company, both during his employment hereunder and at any time after the termination of his employment. The Executive’s obligations
of confidentiality under this Section 6 shall not apply to any knowledge or information that is now published publicly or
that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by
the Executive.

 

7. NON-COMPETITION:
NON-SOLICITATION; INVENTIONS.

 

7.1 Non-Competition.
 During the employment of the Executive under this Agreement and for a period of six (6) months after termination of
such employment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity,
with the Company or any of its affiliates within all territories in which the Company does business with respect to the business
of the Company or any of its affiliates as such business shall be conducted on the date hereof or during the employment of the
Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation, partnership or other enterprise
shall not constitute a violation hereof.

 

7.2 Non-Solicitation.  During
the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce,
on his own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the
employ of the Company or any of its affiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person
or entity, any customer or Prospective Customer of the Company or any of their respective affiliates to reduce its business with
the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean
any individual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the
Company or any Company subsidiary or affiliate or (b) has within the preceding 12 months received a currently pending and not
rejected written proposal in reasonable detail from the Company or any of the Company’s subsidiary or affiliate.

 

7.3
Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any intellectual property
including but not limited to copy rights, designs and patents, inventions or improvements in products, processes, or other things
that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the
Term, Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term,
Executive shall do all acts reasonably necessary or required by the Company to give effect to this section.  In all
cases, the Company shall pay all reasonable costs and fees associated with such acts by Executive.

 

7.4
Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains
or is assigned in the course of his employment with the Company, including, without limitation, all documents, reports, manuals,
memoranda, customer lists, credit cards, keys, access cards, and all other property relating in any way to the business of the
Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring or creating
such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such
earlier time as the Company may request.

 

7.5 Court
Ordered Revisions. If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid
or unenforceable, but would be valid and enforceable if modified, this Section 7 shall apply with such modifications necessary
to make this Section 7 valid and enforceable.  Any portion of this Section 7 not required to be so modified shall
remain in full force and effect and not be affected thereby.

  

    3

     

    

 

7.6
Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section
7 will be inadequate, and that the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and
permanent injunctive relief and specific performance.

 

8.
MISCELLANEOUS.

 

8.1
Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law,
indemnify and hold Executive harmless from and against any expenses, including reasonable attorney’s fees, judgments, fines,
settlements and other legally permissible amounts (“Losses”), incurred in connection with any proceeding arising
out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result of Executive’s
negligence or willful misconduct.  The Company shall, assume the defense of the action or proceeding against the Executive
mentioned above and will employ counsel reasonably satisfactory to the Executive and will pay the reasonable fees and expenses
of such counsel, or advance to Executive any expenses, including attorney’s fees and costs of settlement, incurred in defending
any such proceeding to the maximum extent permitted by applicable law.  Such costs and expenses incurred by Executive
in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of
such proceeding promptly upon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing
the incurrence, amount and nature of the costs and expenses for which payment is being sought; and (c) an undertaking adequate
under applicable law made by or on behalf of Executive to repay the amounts so advanced if it shall ultimately be determined pursuant
to any non-appealable judgment or settlement that Executive is not entitled to be indemnified by the Company or any subsidiary
thereof.  If the Company obtains director and officer insurance coverage for any period in which Executive was an officer
of the Company, Executive shall be a named insured and shall be entitled to the coverage thereunder.

 

8.3
Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance
with the laws of the State of Florida, applied without reference to principles of conflict of laws. Any legal action or proceeding
arising out of or relating to this Agreement shall be brought in the courts in the State of Florida.

 

8.4
Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties
hereto or their respective successors or legal representatives.

 

8.5
Notices. All notices and other communications hereunder shall be in writing and shall be given by hand-delivery
to the other party, by an international mail courier, or by registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

 

If
to the Executive:

 

New
World Center Apartment,

Chong
Wen Men Wai Blvd,

Beijing
China 100062 

Attn:
Shanchun Huang

 

If
to the Company:

Future
FinTech Group Inc.

23F,
China Development Bank Tower,

No.
2, Gaoxin 1st Road

Xi’an,
China 710075

Attn: the
Board of Director

 

Or
to such other address as either party shall have furnished to the other in writing in accordance herewith.  Notices
and communications shall be effective when delivered to the addressee.

 

    4

     

    

 

8.4
Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income,
unemployment, social security and similar employment related taxes and similar employment related withholdings as shall be required
to be withheld pursuant to any applicable law or regulation.

 

8.5
Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement and any such provision which is not valid or enforceable in whole shall be enforced to
the maximum extent permitted by law.

 

8.6
Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.

 

8.7
Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and undertakings, whether written or oral, between
the parties with respect thereto.

 

8.8
Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement
or the Executive’s employment hereunder to the extent necessary to the intended preservation of such rights and obligations.

 

8.9
Waiver. Either Party’s failure to enforce any provision or provisions of this Agreement shall not in any way be construed
as a waiver of any such provision or provisions, or prevent that party thereafter from enforcing each and every other provision
of this Agreement.

 

8.10
Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company,
shall not be assignable by Executive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate,
heirs, beneficiaries, and/or legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns.

 

8.11
Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto
and shall not be construed more severely against any party.  This Agreement may be signed in two or more counterparts,
each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

 

8.12
Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented
by legal counsel of its choice in connection with the negotiation and execution of this Agreement.

 

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

 

	EXECUTIVE:	 	FUTURE
    FINTECH GROUP INC.
	 	 	 
	By:	 	 	By:	 
	Name:  	Shanchun Huang	 	Name:  	YongkeXue
	 	 	 	 	Chairman

 

 

 

5mntx-ex46_261.htm

Exhibit 4.6

DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934

The following summary describes the Common Stock, $0.0001 par value per share, and Preferred Stock Purchase Rights of Manitex International, Inc. (the “Company,” “we,” “our,” “us,” and “our”), which are the only securities of the Company registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.

The following description is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to (i) our Articles of Incorporation, as amended (the “Articles”), (ii) our Amended and Restated Bylaws (the “Bylaws”) and (iii) the Rights Agreement, dated as of October 17, 2008, between the Company and American Stock Transfer & Trust Company, LLC, as amended by that certain First Amendment to Rights Agreement, dated as of May 24, 2018, and that certain Second Amendment to Rights Agreement, dated as of October 2, 2018 (as amended, the “Rights Agreement”), each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.6 is a part. We encourage you to read our Articles, our Bylaws, the Rights Agreement and the applicable provisions of the Michigan Business Corporation Act for additional information.

Authorized Capital Shares

Our authorized capital stock consists of 25,000,000 shares of common stock, no par value per share and 150,000 shares of preferred stock, no par value per share. As of December 31, 2019, there were 19,713,185 shares of our common stock issued and outstanding and no shares of our preferred stock issued and outstanding.

Common Stock

Voting Rights.  Holders of our common stock are entitled to one vote per share on all matters to be voted upon by shareholders. In accordance with Michigan law, the affirmative vote of a majority of the shares cast at a duly held meeting at which a quorum is present shall be the act of the shareholders. The presence at the meeting, by person or by proxy, of the holders of record of a majority of shares issued and outstanding and entitled to vote will constitute a quorum for transacting business.

Dividend Rights.  The holders of such common stock are entitled to receive dividends when and as declared by our board of directors out of funds legally available for dividends, subject to the prior rights or preferences applicable to any preferred stock then outstanding. The Company has not declared or paid any cash dividends on its common stock and the Company does not presently intend to pay any cash dividends in the foreseeable future.

Liquidation Rights.  If we are liquidated, our creditors and any holders of our preferred stock with preferential liquidation rights will be paid before any distribution to holders of common stock. The holders of common stock would be entitled to receive a pro rata distribution per share of any excess amount. The rights, preferences and privileges of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock which we may designate and issue in the future.

Other Rights and Preferences.  Shares of our common stock have no preemptive rights, no redemption or sinking fund provisions, and are not liable for further call or assessment.

Listing.  Our common stock currently trades on the NASDAQ Capital Market under the symbol “MNTX.”

Preferred Share Purchase Rights

For each share of our common stock, there is one preferred share purchase right (a “Right”). Each Right entitles the registered holder to purchase from us one one-hundredth of a share of our Series A Junior Participating Preferred Stock, no par value (“Preferred Shares”), at a price of $35.00 per one one-hundredth of a Preferred Share, subject to adjustment (the “Purchase Price”). As long as the Rights are attached to the common stock, we will issue one Right for each share of common stock, so that all such shares will have attached Rights. We initially reserved 125,000 Preferred Shares for issuance upon exercise of the Rights.

Until the earlier to occur of (i) the “Shares Acquisition Date,” which is the date 10 days following a public announcement that a person or group of affiliated or associated persons (other than us, any of our subsidiaries or any of our employee benefit plans or certain holders of our common stock as of the date of the Rights Agreement) has acquired beneficial ownership of 15% (or, in the case of certain holders, 30%) or more of outstanding shares of common stock (such person, an “Acquiring Person”), or (ii) 10 business days (or such later date as may be determined by action of our board of directors prior to such time as any person becomes an Acquiring Person) following the commencement of, or announcement of an intention to make, a tender offer or exchange offer the consummation of which would result in the beneficial ownership by a person or group (other than us, any of our subsidiaries or any of our employee benefit plans) of 15% (or, in the case of certain holders, 30%) or more of outstanding shares of common stock (the earlier of such dates being called the “Distribution Date”), the Rights will not be exercisable, will be evidenced by the certificates for shares of common stock, and are transferable only together with the shares of common stock. As soon as practicable following the Distribution Date, separate certificates evidencing the Rights (“Right Certificates”) will be mailed to holders of record of the shares of common stock as of the close of business on the Distribution Date and such separate Right Certificates alone will evidence the Rights.

The Rights will expire on September 13, 2028 (the “Final Expiration Date”), unless we redeem or exchange the Rights earlier, in each case as described below.

The Purchase Price payable, and the number of Preferred Shares or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights or warrants to subscribe for or purchase Preferred Shares at a price, or securities convertible into Preferred Shares with a conversion price, less than the then current market price of the Preferred Shares or (iii) upon the distribution to holders of the Preferred Shares of evidences of indebtedness or assets (excluding regular annual cash dividends or dividends payable in Preferred Shares) or of subscription rights or warrants (other than those referred to above).

The number of outstanding Rights and the number of one one-hundredths of a Preferred Share issuable upon exercise of each Right are also subject to adjustment in the event of a stock split of the common stock or a stock dividend on the common stock payable in common stock or subdivisions, consolidations or combinations of the common stock occurring, in any such case, prior to the Distribution Date.

Preferred Shares purchasable upon the exercise of Rights will not be redeemable. Each Preferred Share will be entitled to a minimum preferential quarterly dividend payment of $1.00 per share but will be entitled to an aggregate dividend of 100 times the dividend declared per share of common stock. In the event of liquidation, the holders of the Preferred Shares will be entitled to a minimum preferential liquidation payment of $100 per share but will be entitled to an aggregate payment of 100 times the payment made per share of common stock. Each Preferred Share will have one vote per share, voting as a separate class on all matters submitted to holders of common stock. Finally, in the event of any merger, consolidation or other transaction in which common stock are exchanged, each Preferred Share will be entitled to receive 100 times the amount received per share of common stock. These Rights are protected by customary antidilution provisions. Because of the nature of the Preferred Shares’ dividend and liquidation rights, the value of the one one-hundredth interest in a Preferred Share purchasable upon exercise of each Right should approximate the value of one share of our common stock.

In the event that any person becomes an Acquiring Person (a “Flip In Event”), each holder of a Right (except as otherwise provided in the Rights Agreement) will thereafter have the right to receive upon exercise that number of common stock (or, in certain circumstances, cash, property or other securities of the Company or a reduction in the Purchase Price) having a market value of two times the then current Purchase Price. Notwithstanding any of the foregoing, following the occurrence of a Flip In Event all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, or subsequently become beneficially owned by an Acquiring Person, related persons and transferees will be null and void.

In the event that, at any time following the Shares Acquisition Date, (i) we are acquired in a merger or other business combination transaction or (ii) 50% or more of our consolidated assets or earning power are sold (the events described in clauses (i) and (ii) are herein referred to as “Flip-Over Events”), proper provision will be made so that each holder of a Right (except as otherwise provided in the Rights Agreement) will thereafter have the right to receive, upon the exercise thereof at the then current Purchase Price, that number of shares of common stock of the acquiring company which at the time of such transaction will have a market value of two times the then current Purchase Price.

With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least 1% in such Purchase Price. At any time after a person becomes an Acquiring Person and prior to the acquisition by such Acquiring Person of 50% or more of the outstanding common stock, our board of directors may exchange the Rights (other than Rights owned by any Acquiring Person which have become void), in whole or in part, at an exchange ratio of one share of common stock, or one one-hundredth of a Preferred Share (or of a share of a class or series of our preferred stock having equivalent rights, preferences and privileges), per Right (subject to adjustment). At any time prior to a person becoming an Acquiring Person, our board of directors may redeem the Rights in whole, but not in part, at a price of $.001 per Right (the “Redemption Price”). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as our board of directors in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.

Other than amendments that would change the Redemption Price, the Purchase Price or the Final Expiration Date of the Rights, the terms of the Rights may be amended by our board of directors without the consent of the holders of the Rights, including an amendment to lower the threshold for exercisability of the Rights from 15% to not less than 10%, with appropriate exceptions for any person then beneficially owning a percentage of the number of common stock then outstanding equal to or in excess of the new threshold, except that from and after such time as any person becomes an Acquiring Person no such amendment may adversely affect the interests of the holders of the Rights.

Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder of the Company, including, without limitation, the right to vote or to receive dividends.

The Rights have certain anti-takeover effects. The Rights will cause substantial dilution to a person or group that attempts to acquire us without conditioning the offer on redemption of the Rights or on a substantial number of Rights being acquired. The Rights should not interfere with any merger or other business combination approved by our board of directors since the board of directors may, at its option, at any time until a person becomes an Acquiring Person redeem all but not less than all of the then-outstanding Rights at $.001 per Right.

Anti-Takeover Provisions

Provisions of our Articles and Bylaws, Michigan law, and the Rights Agreement could make it more difficult for a third party to acquire the Company, even if doing so would be perceived to be beneficial to you. These provisions could discourage potential takeover attempts and could adversely affect the market price of our shares. Because of these provisions, you might not be able to receive a premium on your investment.

Preferred Stock.  Our Articles empower our board of directors to issue up to 150,000 shares of preferred stock from time to time in one or more series. We may issue one or more series of preferred stock, with designations, powers, preferences and other rights and qualifications, limitations or restrictions as may be approved by our board of directors, including:

	
 
	
•
	
the distinctive designation of each series and the number of shares that will constitute the series;

	
 
	
•
	
the voting rights, if any, of shares of the series and the terms and conditions of the voting rights;

	
 
	
•
	
the dividend rate on the shares of the series, the dates on which dividends are payable, any restriction, limitation or condition upon the payment of dividends, whether dividends will be cumulative, and the dates from and after which dividends shall accumulate;

	
 
	
•
	
the prices at which, and the terms and conditions on which, the shares of the series may be redeemed, if the shares are redeemable;

	
 
	
•
	
the terms and conditions of a sinking or purchase fund for the purchase or redemption of shares of the series, if such a fund is provided;

	
 
	
•
	
any preferential amount payable upon the shares of the series in the vent of the liquidation, dissolution or winding up of, or upon the distribution of any of our assets; and

	
 
	
•
	
the prices or rates of conversion or exchange at which, and the terms and conditions on which, the shares of the series may be converted or exchanged into other securities, if the shares are convertible or exchangeable.

Board Vacancies.  Our Bylaws provide that vacancies in the Board of Directors may be filled by the remaining directors, though less than a quorum, until the next annual meeting of shareholders, at which time the shareholders shall fill the vacancy.

Special Meetings.  Our Bylaws provide that a special meeting of shareholders may be called at any time by the Chairman of the Board, the President, a majority of the Board of Directors, or by holders of a majority of the outstanding shares of the Company having the right to vote at such meeting.

Business Combination Provisions under Michigan Law.  Chapter 7A of the Michigan Business Corporation Act may affect attempts to acquire control of us.  Under Chapter 7A, business combinations between us or any subsidiaries and an interested shareholder can only be consummated if approved by (i) at least 90% of the votes of each class of our shares entitled to vote and (ii) at least two-thirds of those voting shares not held by the interested shareholder or its affiliates, unless five years have lapsed after the person involved became an interested shareholder and unless certain price and other conditions are satisfied. “Business combinations” are defined to include, among other transactions, the merger, disposition of assets or shares, dissolution or liquidation, reclassification of securities and recapitalization. An “interested shareholder” is defined as the direct or indirect beneficial owner of at least 10% of the voting power of our outstanding shares.

Limitation of Liability and Indemnification

The Company is organized under the Michigan Business Corporation Act, which generally empowers Michigan corporations to indemnify a person that is a party, or threatened to be made a party, to any civil, criminal, administrative or investigative action, suit or proceeding, whether formal or informal (other than actions by or in the right of the corporation), by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or of another enterprise serving at such corporation’s request, against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection therewith if such person acted in good faith and in a manner in which he or she reasonably believed to be in or not opposed to the best interests of the corporation or its shareholders, and, with respect to a criminal action or proceeding, had no reasonable cause to believe that his or her conduct was unlawful.

In a derivative action, the Michigan Business Corporation Act provides that indemnification may be made for expenses, including attorneys’ fees and amounts paid in settlement, actually and reasonably incurred by the director, officer, employee or agent in connection with the action or suit only if such director or officer acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation or its shareholders; except that no indemnification is available if such person has been found liable to the corporation unless, and only to the extent that, the court in which the action or suit was brought determines upon application that the defendant director or officer is fairly and reasonably entitled to indemnity. If a director or officer is successful in defending a derivative action, the Michigan Business Corporation Act requires that a Michigan corporation indemnify such director or officer against any expenses actually and reasonably incurred in the action.

The Michigan Business Corporation Act permits Michigan corporations to eliminate or limit the personal liability of directors, except liability for (i) the amount of a financial benefit received by a director to which he or she is not entitled; (ii) intentional infliction of harm on the corporation or its shareholders; (iii) a violation of Section 551 of the Michigan Business Corporation Act, which pertains to unlawful payments of dividends, stock purchases or redemptions; and (iv) an intentional criminal act.

We have adopted provisions in our Amended and Restated Bylaws that provide for indemnification to the fullest extent permitted by applicable law. In addition, we maintain directors and officers liability insurance coverage for our directors and officers that will provide for damages, judgments, settlements, defense costs, charges and expenses incurred by reason of any actual or alleged breach of duty, error, misstatement, misleading statement or omission done or made in their capacities as directors and/or officers of the Company.

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