BUTLER INTERNATIONAL, INC.
1992 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
(AS PROPOSED TO BE AMENDED MAY 23, 1995)
1. PURPOSE
The purpose of the Butler International, Inc. 1992 Stock Option Plan for
Non-employee Directors (the "Plan") is to promote the interests of Butler
International, Inc. (the "Company") and its stockholders by strengthening the
Company's ability to attract and retain the services of experienced and
knowledgeable nonemployee directors and by encouraging such directors to acquire
an increased proprietary interest in the Company.
2. SHARES SUBJECT TO THE PLAN
Subject to adjustment as provided in Article 7, the total number of shares
of common stock (the "Common Stock") of the Company for which options may be
granted under the Plan in each fiscal year during any part of which the Plan is
effective (the "Shares") shall be 40,000; the total number of shares reserved
for this Plan is 190,000 (all references to number of shares herein shall mean
such number of shares after taking account of the 1 for 6 reverse stock split
effective June 29, 1992). The Shares shall be shares currently authorized but
unissued or currently held on subsequently acquired by the Company as treasury
shares, including shares purchased in the open market or in private
transactions. If any option granted under the Plan expires or terminates for
any reason without having been exercised in full, the Shares subject to, but not
delivered under, such option may become available for the grant of other options
under the Plan. No shares deliverable to the Company in full or partial payment
of an option purchase price payable pursuant to Paragraph 6.3 shall become
available for the grant of other options under the Plan.
3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board of Directors (the "Board").
Subject to the terms of the Plan, the Board shall have the power to construe the
provisions of the Plan, to determine all questions arising thereunder, and to
adopt and amend such rules and regulations for administering the Plan as the
Board deems desirable.
4. PARTICIPATION IN THE PLAN
Each member of the Company's Board of Directors (a "Director") who is not
otherwise an employee of the Company or any subsidiary of the Company (an
"Eligible Director") shall be eligible to participate in the Plan.
5. NONSTATUTORY STOCK OPTIONS
All options granted under the Plan shall be nonstatutory options not
intended to qualify under Section 422 of the Internal Revenue Code of 1986, as
amended.
6. OPTION TERMS
Each option granted to an Eligible Director under the Plan and the issuance
of Shares thereunder shall be subject to the following terms:
6.1 OPTION AGREEMENTS
Each option granted under the Plan shall be evidenced by an option
agreement (an "Agreement") duly executed on behalf of the Company and the
Eligible Director to whom such option is granted and dated as of the applicable
date of grant. Each Agreement shall be signed on behalf of the Company by an
officer or officers delegated such authority by the Board. Each Agreement shall
comply with and be subject to the terms and conditions of the Plan. Any
Agreement may contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Board.
6.2 OPTION GRANT SIZE AND GRANT DATES
6.2.1 FIRST GRANTS. An option to purchase 10,000 Shares (as adjusted
pursuant to Article 7) shall be granted to each Director who is an Eligible
Director immediately following the Annual Meeting (as described in the
Company's By-Laws) at which the Plan is approved by the stockholders of the
Company.
6.2.2 SECOND, THIRD, FOURTH AND FIFTH GRANTS. An option to purchase
10,000 Shares (as adjusted pursuant to Article 7) shall be granted to each
director who is an Eligible Director immediately following the Annual
Meeting held during the first, second, third and fourth fiscal years
immediately following the Annual Meeting at which the Plan is approved by
the stockholders of the Company.
6.3 OPTION EXERCISE PRICE
The option exercise price per share shall be the Fair Market Value (as
hereinafter defined) on the date of grant. For purposes of the Plan, "Fair
Market Value" equals the mean of the closing bid and asked prices for the Common
Stock as reported in The Wall Street Journal.
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6.4 VESTING; EXERCISABILITY
An option shall vest, become nonforfeitable and exercisable when, and only
if, the optionee continues to serve as a Director until the Annual Meeting
following the year in which the option was granted.
6.5 TIME AND MANNER OF OPTION EXERCISE
Any vested and exercisable option is exercisable in whole or in part at any
time or from time to time during the option period by giving written notice,
signed by the person exercising the option, to the Company stating the number of
Shares with respect to which the option is being exercised, accompanied by
payment in full of the option exercise price for the number of Shares to be
purchased. The date both such notice and payment are received by the office of
the Secretary of the Company shall be the date of exercise of the stock option
as to such number of Shares. No option may at any time be exercised with
respect to a fractional share.
6.6 PAYMENT OF EXERCISE PRICE
Payment of the option exercise price may be in cash or by bank-certified,
cashier's, or personal check, or payment may be in whole or in part by
a. transfer to the Company of shares of the Common Stock having a Fair
Market Value equal to the option exercise price at the time of such
exercise,
b. delivery of instruction to the Company to withhold from the option
shares that would otherwise be issued on the exercise that number of option
shares having a Fair Market Value equal to the option exercise price at the
time of such exercise, or
c. delivery of a non-interest bearing promissory note up to the limit
permitted under Federal Reserve Board regulations, of term no greater than
seven years, payable to the Company, which shall be secured by a pledge of
the Shares of Common Stock to be acquired upon exercise of the option.
If the Fair Market Value of the number of whole shares transferred or the
number of whole option shares surrendered is less than the total exercise price
of the options, the shortfall must be made up in cash.
6.7 TERM OF OPTIONS
Each option shall expire ten years from its date of grant, but shall be
subject to earlier termination as follows:
a. In the event of the termination of an optionee's service as a Director,
other than by reason of retirement, total and permanent disability, or
death, the then-outstanding option of such optionee shall automatically
expire on the effective date of such termination. For purposes of the
Plan, the term "by reason of retirement" means (i) mandatory retirement
pursuant to Board policy or (ii) termination of service at a time when the
optionee would be entitled to a retirement benefit under the Company's
Employee Retirement Plan, as then in effect, if the Eligible Director were
an employee of the Company.
b. In the event of the termination of an optionee's service as Director by
reason of retirement or total and permanent disability, or in the event of
the death of an optionee while the optionee is a Director, the then-
outstanding options of such optionee shall expire one year after the date
of such termination or death, or on the stated grant expiration date,
whichever is earlier.
Exercise of a decreased optionee's options that are still exercisable shall
be by the estate of such optionee or by a person or persons whom the optionee
has designated in writing filed with the Company, or, if no such designation has
been made, by the person or persons to whom the optionee's rights have passed by
will or the laws of descent and distribution.
6.8 TRANSFERABILITY
The right of any optionee to exercise an option granted under the Plan
shall, during the lifetime of such optionee, be exercisable only by such
optionee and shall not be assignable or transferrable by such optionee other
than by will or the laws of descent and distribution.
6.9 LIMITATION OF RIGHTS
6.9.1 LIMITATION AS TO SHARES. Neither the recipient of an option under
the Plan nor an optionee's successor or successors in interest shall have any
rights as a stockholder of the Company with respect to any shares subject to an
option granted to such person until the date of issuance of a stock certificate
for such Shares.
6.9.2 LIMITATION AS TO DIRECTORSHIP. Neither the Plan, nor the granting
of an option, nor any other action taken pursuant to the Plan shall constitute
or be evidence of any agreement or understanding, express or implied, that an
Eligible Director has a right to continue as a Director for any period of time
or at any particular rate of compensation.
6.10 REGULATORY APPROVAL AND COMPLIANCE
The Company shall not be required to issue any certificate or certificates
for Shares upon the exercise of an option granted under the Plan or to record as
a holder of record of Shares the name of the individual exercising an option
under the Plan, without obtaining, to the complete satisfaction of the Company,
the approval of all regulatory bodies deemed necessary by the Company and
without complying, to the Company's complete satisfaction, with all rules and
regulations under federal, state, or local law deemed applicable by the Board.
7. CAPITAL ADJUSTMENTS
The aggregate number and class of Shares subject to and authorized by the
Plan, the number and class of Shares with respect to which an option may be
granted to an Eligible Director under the Plan as provided in Article 6, the
number and class of Shares subject to each outstanding option, and the exercise
price per share specified in each such option shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Common stock
resulting from a split-up or consolidation of shares or any like capital
adjustment or the payment of any stock dividend, or other increase or decrease
in the number of such shares effected without receipt of consideration by the
Company.
8. EXPENSES OF THE PLAN
All costs and expenses of the adoption and administration of the Plan shall
be borne by the Company, and none of such expenses shall be charged to any
optionee.
9. EFFECTIVE DATE OF THE PLAN
The Plan shall be effective immediately following approval by the Company's
stockholders.
10. TERMINATION AND AMENDMENT OF THE PLAN
The Board may amend, terminate or suspend the Plan at any time in its sole
and absolute discretion; provided, however, that if required to qualify the Plan
under Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of
1934, as amended, no amendment shall be made more than once every six months
that would change the amount, price or timing of the Grants, other than to
comport with changes in the Internal Revenue Code of 1986, as amended, or the
rules and regulations promulgated thereunder; and provided further, that if
required to qualify the Plan under Rule 16b-3, no amendment that would
a. materially increase the number of Shares that may be issued under the
Plan,
b. materially modify the requirements as to eligibility for participation
in the Plan, or
c. otherwise materially increase the benefits accruing to participants
under the Plan,
shall be made without the approval of the Company's Stockholders.