BUTLER NATIONAL CORPORATION |
To the Shareholders of Butler National Corporation: |
Notice is hereby given that the 2007 Annual Meeting of Shareholders of Butler National Corporation (the "Company") will be held at the Holiday Inn-Olathe, 101 West 151st Street, Olathe, Kansas, on Thursday, April 10, 2008, at 11:00 a.m., for the following purposes: |
1. To review the Board of Directors plans for the selection of new directors to replace our deceased directors, Mr. Griffith (Class I) and Mr. Logan (Class II). Normally, the Class I director would be elected at this meeting. |
The Board of Directors has fixed the close of business on February 26, 2008, as the record date for the determination of shareholders entitled to notice of and to vote at the meeting. |
By Order of the Board of Directors, /S/ Christopher J. Reedy |
Olathe, Kansas |
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN, DATE AND RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU EXPECT TO ATTEND IN PERSON. SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR PROXIES AND VOTE IN PERSON IF THEY DESIRE. |
BUTLER NATIONAL CORPORATION | ||
GENERAL | ||
VOTING | ||
SHAREHOLDER PROPOSALS | ||
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | ||
| Amount and Nature of Beneficial Ownership (1) |
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Clark D. Stewart | 4,114,319(2) | 7.6% |
R. Warren Wagoner | 4,141,126(3) | 7.6% |
(1) Unless otherwise indicated by footnote, nature of beneficial ownership of securities is direct, and beneficial ownership as shown in the table arises from sole voting power and sole investment power. |
The following table sets forth, with respect to our Common Stock (the only class of voting securities), (i) shares beneficially owned by all directors and named executive officers of Butler National Corporation, and (ii) total shares beneficially owned by directors and officers as a group, as of April 30, 2007. | |||
| Amount and Nature of | See Note | Percent of Class |
Larry W. Franke | 481,277 | (5) | 0.9% |
David B. Hayden | 1,357,225 | 2.5% | |
William E. Logan (deceased 1/4/08) | 823,929 | (3) | 1.5% |
Christopher J. Reedy | 260,747 | 0.5% | |
Clark D. Stewart | 4,114,319 | (2) | 7.6% |
R. Warren Wagoner | 4,141,126 | (4) | 7.6% |
Angela D. Shinabargar | 166,092 | 0.3% | |
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DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT | ||||
DIRECTORS:The names and ages of the directors, their principal occupations for at least the past five years are set forth below, based on information furnished by the directors. | ||||
Name of Nominee and Director and Age | Served Since | Principal Occupation for Last Five Years and Other Directorships | ||
Clark D. Stewart | 1989 | President of our Company from September 1, 1989 to present. | ||
R. Warren Wagoner | 1986 | Chairman of the Board of Directors of our Company since August 30, 1989. | ||
David B. Hayden | 1996 | Co-owner and President of Kings Avionics, Inc. since 1974. | ||
William E. Logan | 1990 | (Deceased January 4, 2008) | ||
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During the fiscal year ended April 30, 2007, the Board of Directors met five times. Each director attended 100% of the meetings of the Board of Directors. All Directors are expected to attend all meetings of the Board of Directors and the Annual Shareholders meeting. Members of the Board who are not otherwise our paid employees (all except Mr. Stewart and Mr. Wagoner) are paid $100 for each meeting attended. The Board of Directors has an Audit Committee, and a Compensation Committee, but no Nominating Committee. The Board of Directors believes that the responsibilities of a Nominating Committee can be handled as a function of the Board of Directors as a whole. During fiscal 2007, the Audit Committee consisted of David Hayden and William E. Logan. Its function is to assist the President in the review of our financial performance and operations. The Audit Committee met five times during the fiscal year ended April 30, 2007 and all members of the Audit Committee attended the meeting. Th e Audit Committee has a written charter that was filed with the Securities and Exchange Commission on December 26, 2001 as Exhibit C to our Form DEF 14A - Definitive Proxy. | ||||
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R. Warren Wagoner | 55 | Chairman of the Board of Directors | ||
Clark D. Stewart | 67 | President and Chief Executive Officer | ||
Christopher J. Reedy | 41 | Vice President & Secretary | ||
Angela Shinabargar | 43 | Chief Financial Officer | ||
Kathy L. Gorrell | 47 | Treasurer and Chief Information Officer | ||
Larry W. Franke | 63 | President of Avcon Industries, Inc., a wholly-owned subsidiary of Butler National Corporation | ||
Curtis Beadle | 43 | President of Butler National Services, Inc., a wholly-owned subsidiary of Butler National Corporation | ||
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EXECUTIVE COMPENSATION
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PAY COMPONENT | BRIEF DESCRIPTION |
Base Salary | Described in detail in separate paragraph above titled Base Salary. |
Annual and Semiannual Incentive Cash Payments | Paid as discretionary cash bonuses to individual employees for outstanding performance of a task. |
Equity Grants | Regulatory provisions since 2003 are too complex to allow us to safely award equity grants. |
Employee Stock Purchase Plan | Any employee may purchase the Company stock at the fair market value at the date of purchase without broker or issue fees. The stock is restricted and not considered a stock reward. We have the 1981 Employee Stock Purchase plan. No shares have been purchased under this plan since 1988. |
Retirement Benefits | We pay the required federal and state retirement contributions, the required unemployment contributions and match the employee's contribution to their account in the Butler National Corporation 401(k) plan. |
Health and Welfare Benefits | We pay a share of the health, dental, vision and life insurance costs for the employee. |
SUMMARY: COMPENSATION OF EXECUTIVE OFFICERS | |||||||||
Name | YR | Salary |
| Stock Awards | Option Awards and Stock Appreciation Rights | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings($) | All Other | Total ($)(2) |
Clark D. Stewart, | 07 | 345,479 | --- | --- | --- | --- | --- | 47,035 | 392,514 |
R. Warren Wagoner | 07 | 161,010 113,628 | --- | --- | --- | --- | --- | 18,232 | 179,242 |
Christopher J. Reedy | 07 | 168,141 | --- | --- | --- | --- | --- | 25,444 | 193,585 |
Larry W. Franke | 07 | 203,258 | --- | --- | --- | --- | --- | 19,663 | 222,921 |
Angela D. Shinabargar | 07 | 112,334 | --- | --- | --- | --- | --- | 7,651 | 119,985 |
Name | Year | Airplane and Automobile Usage | Health Benefits | Memberships | Matching Contributions to 401(k) (3) | |||
Clark D. Stewart | 2007 | 7,200 | 4,910 | 14,925 | 20,000 | |||
R. Warren Wagoner | 2007 | --- | 5,908 | --- | 12,324 | |||
Christopher J. Reedy | 2007 | --- | 3,299 | 7,145 | 15,000 | |||
Larry W. Franke | 2007 | --- | 4,910 | --- | 14,753 | |||
Angela D. Shinabargar | 2007 | --- | 3,299 | --- | 4,352 |
(1) All Other Compensation includes the amounts in the tables above. |
OPTION GRANTS, EXERCISES AND HOLDINGS | ||||
No options were granted to any named executive officer in the last fiscal year. | ||||
The following table provides information with respect to the named executive officers concerning options exercised and unexercised options held as of the end of the Company's last fiscal year: | ||||
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR | ||||
| Value of Unexercised | |||
| Number of Shares Acquired | Value | Exercisable/ | Exercisable/ |
Clark D. Stewart, |
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R. Warren Wagoner, |
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Christopher J. Reedy, |
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Angela D. Shinabargar, |
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Larry W. Franke, |
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Each non-officer director is entitled to a director's fee of $100 for meetings of the Board of Directors which he attends. Officer-directors are not entitled to receive fees for attendance at meetings. No fees were paid in fiscal 2007 or fiscal 2006. | ||||
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL | ||||
On January 27, 2004 the Company extended the Employment Agreement with Clark D. Stewart as President and Chief Executive Officer of the Company with the terms as currently provided including annual increases of 5% through December 31, 2013. In the event Mr. Stewart is terminated from employment with the Company other than "for cause," Mr. Stewart shall receive as severance pay an amount equal to the unpaid salary for the remainder of the term of the Employment Agreement. Mr. Stewart is also granted an automobile allowance of $600 per month which is reported by us as Salary Expense and to Mr. Stewart as Wages. Under the terms of the Employment Agreement with Mr. Stewart, the Company is obligated to pay company related expenses and salary. Included in accrued liabilities are $245,538 and $238,437 as of April 30, 2007, and 2006 respectively for amounts owed to our CEO for accrued compensation. |
AUDIT COMMITTEE REPORT |
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS |
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION |
STOCK PERFORMANCE GRAPH | |
ASSUMES $100 INVESTED ON MAY 1, 2002 | |
The peer group consists of companies with similar market capitalization. The Custom Selected Stock List is made up of the following small cap securities selected by Hemscott, Inc. as peer companies: Activeworlds Corp., Atlas South Sea Pearl, Clinical Data Inc., Forward Industries, Inc.s, Hirsch Internat CP CL A, Interpharm Holdings, Provena Foods, Inc. (through 2006). | |
AUDIT FEES | ||||
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Audit feesa | $92,939 | $62,838 | ||
(a) Includes fees billed for professional services rendered in connection with the audit of the annual financial statements and for the review of the quarterly financial statements. | ||||
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All Other Fees |
ELECTION OF DIRECTOR |
The number of directors constituting our Board of Directors has been fixed at five (5). The Board is comprised of the following three classes of directors that serve staggered three year terms. Class I consists of one director that would be due for election at this Annual Meeting. Class II consists of two directors to be elected at the 2008 Annual Meeting. Class III consists of two directors to be elected at the 2009 Annual Meeting. THE BOARD OF DIRECTORS IS NOT REQUESTING A VOTE ON ITEM 1. |
INDEPENDENT PUBLIC ACCOUNTANTS |
We have engaged Weaver & Martin, LLC to audit our financial statements for the years ended April 30, 2005, 2006, and 2007. Weaver & Martin, LLC was able to express an opinion on the financial statements for the years ended April 30, 2005, 2006 and 2007. Representatives of Weaver & Martin, LLC are expected to be present at the Annual Meeting of Shareholders, and they will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions. |
OTHER MATTERS |
Management knows of no other matters that will be presented at the meeting. If any other matter arises at the meeting, it is intended that the shares represented by the proxies in the accompanying form will be voted in accordance with the judgment of the persons named in the proxy. |