BUTLER NATIONAL CORPORATION
19920 West 161st Street
Olathe, Kansas 66062
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 4, 1999
TO ALL STOCKHOLDERS:
You are cordially invited to attend the Special Meeting of Stockholders
of Butler National Corporation (the ACompany@) to be held on January 4, 1999,
at 10:00 a.m., Kansas City Time, at the offices of the Company at 19920 West
161st Street, Olathe, Kansas 66062, for the following purposes:
(1) To approve a proposed amendment to Article FOURTH of the Company's
Certificate of Incorporation (the form of which is attached hereto as Exhibit
A) to effect a one-for-ten reverse stock split (the "Reverse Stock Split") of
the Company's Common Stock, par value $.01 per share (the "Common Stock") as a
result of which holders of the Common Stock will receive one share of Common
Stock for each ten shares of Common Stock owned on the effective date of the
Reverse Stock Split; and
(2) To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Holders of record of the Common Stock as of the close of business on
December 15, 1998 will be entitled to notice of and to vote at the Special
Meeting and any adjournment or postponement thereof. A list of stockholders
entitled to vote at the Special Meeting will be kept at the Company's offices
at 19920 West 161st Street, Olathe, Kansas 66062 for a period of ten days
prior to the Special Meeting and will be available at the Special Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
William A. Griffith,
Secretary
Olathe, Kansas
Dated: December 4, 1998
IMPORTANT --- YOUR PROXY AND A RETURN ENVELOPE ARE ENCLOSED
You are urged to sign, date and mail your proxy even though you may
plan to attend the Special Meeting. No postage is required if your proxy is
mailed in the United States in the enclosed return envelope. If you attend
the Special Meeting, you may vote by proxy or you may withdraw your proxy and
vote in person. By returning your proxy promptly, a quorum will be assured at
the Special Meeting, which will prevent costly follow-up and delays.
BUTLER NATIONAL CORPORATION
19920 West 161st Street
Olathe, Kansas 66062
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD January 4, 1999
PROXY STATEMENT
The proposals in the accompanying form of proxy (the "Proxy") are
solicited by the Board of Directors of Butler National Corporation (the
"Company") for use at its Special Meeting of Stockholders (the "Special
Meeting") to be held on Monday, January 4, 1999, at 10:00 a.m., Kansas City
Time, at the offices of the Company at 19920 West 161st Street, Olathe, Kansas
66062, and any adjournment or postponement thereof. This Proxy Statement is
being mailed or given to stockholders on or about December 22, 1998.
Proxies. Shares represented by a duly executed Proxy received prior to
the Special Meeting will be voted at the Special Meeting. If a stockholder
specifies a choice on the Proxy with respect to any matter to be acted upon,
the shares will be voted in accordance with the choices specified in the Proxy
with respect to the proposals described in this Proxy Statement. If no choice
is specified, the shares represented by the Proxy will be voted in favor of
the proposals set forth in this Proxy Statement. None of the proposals are
related to or conditioned on the approval of any other proposal. Any person
giving a Proxy has the power to revoke it at any time before it is exercised
by giving written notice to the Secretary of the Company at any time prior to
the voting of the shares represented by the Proxy.
Other Matters. Management of the Company does not intend to present
any matter to the Special Meeting except as indicated herein, and presently
knows of no other matter to be presented at the Special Meeting. Should any
other matters properly come before the Special Meeting, the persons named in
the accompanying form of Proxy will vote the Proxy in accordance with their
judgment of the best interests of the Company on such matters.
<PAGE>
Solicitation and Expense. The Company will bear all the costs of
solicitation of Proxies and preparing, assembling, printing and mailing the
Proxy Statement, the Proxy and additional materials which may be furnished to
stockholders. In addition to the use of the mails, Proxies may be solicited
by personal contact, telephone or telegraph by regular employees of the
Company, and the Company will reimburse brokers, custodians, fiduciaries or
other persons for their reasonable expenses in sending proxy solicitation
material to beneficial owners of shares.
Voting. Only stockholders of record of the Company's common stock,
$.01 par value (the "Common Stock") at the close of business on December 15,
1999 (the "Record Date") will be entitled to notice of, and to vote at, the
Special Meeting. On the Record Date, the Company had 12,555,746 shares of
Common Stock outstanding and entitled to vote at the Special Meeting. Each
holder of Common Stock is entitled to one vote per share on each matter to
properly come before the Special Meeting.
The Bylaws of the Company require that thirty-five percent (35%) of the
votes of the shares of Common Stock issued, outstanding and entitled to vote
at the Special Meeting be present in person or represented by Proxy at the
Special Meeting in order to constitute a quorum for the transaction of
business. Provided a quorum is present, the affirmative vote of a majority of
the shares of Common Stock entitled to vote on the subject matter is required
for the approval of the amendment to the Company=s Certificate of
Incorporation. Stockholders do not have any dissenters' rights of appraisal
in connection with the matters to be voted upon. Votes that are cast against
the proposal and abstentions are counted for purposes of determining the
presence or absence of a quorum for the transaction of business at the Special
Meeting. Broker non-votes (i.e., a proxy card returned by a holder on behalf
of its beneficial owner that is not voted on a particular matter because
voting instructions have not been received and the broker has no discretionary
authority to vote) will be counted for purposes of determining the presence or
absence of a quorum but will not be counted for purposes of determining the
number of votes cast with respect to a particular proposal for which
authorization to vote was withheld.
The Company. The Company=s principal executive office is located at
19920 West 161st Street, Olathe, Kansas 66062 and its telephone number is
(913) 780-9595.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth the beneficial ownership of the
Company's voting securities (the "Common Stock") as of December 15, 1998 by
each person and group known to the Company to be the beneficial owner of more
than 5% of its Common Stock.
Name and Address of
Beneficial Owner:
Clark D. Stewart
19920 West 161st Street
Olathe, KS 66062
Amount and Nature of Beneficial Ownership(1):
2,158,920(2)
Percent of Class:
10.5%
(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.
(2) Includes 1,320,000 shares which may be acquired by Mr. Stewart
pursuant to the exercise of stock options which are exercisable.
The following table sets forth, with respect to the Company=s voting
securities (Common Stock) as of December 15, 1998, (i) shares beneficially
owned by all directors (current and nominee) and named executive officers of
the Company, and (ii) total shares beneficially owned by all executive
officers and directors as a group.
Name of Beneficial Owner Amount and Nature of Beneficial Percent of Class
Ownership(1)
Larry B. Franke 220,600(2) 1.1%
William A. Griffith 199,000(3) 1.0%
David B. Hayden 222,500(4) 1.1%
William E. Logan 910,000(5) 4.4%
Clark D. Stewart 2,158,920(6) 10.5%
R. Warren Wagoner 535,000(7) 2.6%
All Directors and Executive
Officers as a Group (12 persons) 4,929,482(8) 23.9%
(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.
(2) Includes 220,600 shares which may be acquired by Mr. Franke pursuant
to the exercise of stock options which are exercisable.
(3) Includes 142,000 shares which may be acquired by Mr. Griffith pursuant
to the exercise of stock options which are exercisable.
(4) Includes 200,000 shares which may be acquired by Mr. Hayden pursuant
to the exercise of stock options which are exercisable.
<PAGE>
(5) Includes 860,000 shares which may be acquired by Mr. Logan pursuant
to the exercise of stock options which are exercisable.
(6) Includes 1,320,000 shares which may be acquired by Mr. Stewart
pursuant to the exercise of stock options which are exercisable.
(7) Includes 435,000 shares which may be acquired by Mr. Wagoner pursuant
to the exercise of stock options which are exercisable.
Includes 3,834,700 shares for all Directors and Executive Officers as a
group, which may be acquired pursuant to the exercise of stock options which
are exercisable.
PROPOSAL TO AMEND THE COMPANY'S ARTICLE OF INCORPORATION
TO EFFECT A ONE-FOR-TEN REVERSE STOCK SPLIT
General
The Board of Directors of the Company has approved a proposal (the
"Reverse Stock Split Proposal") to amend the Company=s Certificate of Incorporat
ion to effect a one-for-ten reverse stock split of the Company's outstanding
Common Stock, each share having a par value of one cent (the "Common Stock"),
subject to the approval by the stockholders of the Company. The Reverse Stock
Split Proposal provides for the combination and reclassification of the
presently issued and outstanding shares of Common Stock, into a small number
of shares of identical Common Stock, on the basis of one share of Common Stock
for each ten shares of Common Stock previously issued and outstanding (the
"Reverse Stock Split"). Each stockholder will hold the same percentage of
Common Stock outstanding immediately following the Reverse Stock Split as each
stockholder did immediately prior to the Reverse Stock Split. If approved by
the stockholders of the Company as provided herein, the Reverse Stock Split
will be effected by an amendment of the Company=s Certificate of Incorporation
in substantially the form attached to this Proxy Statement as Appendix A (the
"Reverse Stock Split Amendment"), and will become effective upon the filing of
the Reverse Stock Split Amendment with the Secretary of State of Delaware (the
"Effective Time"). The following discussion is qualified in its entirety by
the full text of the Reverse Stock Split Amendment, which is incorporated by
reference herein. At the Effective Time, each share of Common Stock issued
and outstanding will automatically be reclassified and converted into
one-tenth of a share of Common Stock.
The Company expects that, if the Reverse Stock Split Proposal is
approved by the stockholders at the Special Meeting, the Reverse Stock Split
Amendment will be filed promptly. However, notwithstanding approval of the
Reverse Stock Split Proposal by the stockholders of the Company, the Board of
Directors of the Company may elect not to file, or to delay the filing of, the
Reverse Stock Split Amendment, if the Board of Directors determines that
filing the Reverse Stock Split Amendment would not be in the best interest of
the Company's stockholders at such time. Factors leading to such a
determination could include, without limitation, any possible effect on the
listing of the Company on the Nasdaq SmallCap Market or future securities
offerings (see AReasons for the Reverse Stock Split Proposal,@ below).
Reasons For the Reverse Stock Split Proposal
The Common Stock is currently listed on the Nasdaq SmallCap Market.
The Board of Directors believes that the continued listing of the Company's
Common Stock on the Nasdaq SmallCap Market is important for the marketability
of the Common Stock and the prestige of the Company in the financial
community. Nasdaq requires, with respect to continued listing, among other
things, a minimum bid price of $1.00. Because the Common Stock had a closing
bid price of less than $1.00 for at least ten consecutive trading days, the
Common Stock will be delisted from the Nasdaq SmallCap Market. In accordance
with Nasdaq procedures, however, on October 22, 1998, the Company had a
hearing before the Nasdaq SmallCap Market. On November 19, 1998, Nasdaq
advised the Company that the delisting would be stayed until January 18, 1999,
by which time the Company must be in compliance with the $1.00 minimum bid
price for a minimum of 10 consecutive trading days or its Common Stock would
be delisted. The Board of Directors believes that the Reverse Stock Split, by
decreasing the number of shares outstanding, should increase the bid price per
share of Common Stock and is necessary in order to permit the Company to meet
the bid price requirement for continued listing on the Nasdaq SmallCap
Market. The Company believes that the increased share price expected to
result from the Reverse Stock Split may enable the Company to continue to list
its Common Stock on the Nasdaq SmallCap Market. However, the decision is
beyond the control of the Company and may depend on a number of factors in
addition to the quantitative criteria discussed herein, and there can be no
assurance that the Common Stock will continue to be listed on the Nasdaq
SmallCap Market even if the Reverse Stock Split is effected or will not be
delisted prior to the Special Meeting of the stockholders. Furthermore, there
can be no assurance that the market price of the Common Stock will increase
to, or remain above, $1.00 per share after the Reverse Stock Split. The
Company is aware that following a reverse stock split, a company=s stock price
will frequently fail to reach or sustain a price equal to the pre-split price
multiplied by the reverse split multiple.
If the Company does not effect the Reverse Stock Split or is unable in
the future to satisfy the Nasdaq SmallCap Market maintenance requirements, its
securities can be expected to be delisted from Nasdaq. In such event,
trading, if any, in the Common Stock would thereafter be conducted in the
over-the-counter market in the so-called "pink sheets" or the NASD's
"Electronic Bulletin Board." Consequently, the liquidity of such securities
would be severely adversely affected, not only in the number of shares which
could be bought and sold, but also through delays in the timing of
transactions, reduction in security analysts' and the news media's coverage of
the Company and lower prices for such securities than might otherwise be
attained.
Theoretically, the number of shares outstanding should not, by itself,
affect the marketability of the Common Stock, the nature of investors who
acquire it, or the Company's reputation in the financial community. However,
in practice this is not necessarily the case, as certain investors view
low-priced stock as unattractive or, as a matter of policy, will not extend
margin credit on stock trading at low prices, although certain other investors
may be attracted to low-priced stock because of the greater trading volatility
sometimes associated with such securities. Many brokerage houses are
reluctant to recommend lower-priced stock to their clients or to hold it in
their own portfolios. Further, a variety of brokerage house policies and
practices discourage individual brokers within those firms from dealing in
low-priced stock because of the time-consuming procedures that make the
handling of low-priced stock unattractive to brokerage houses from an economic
standpoint.
<PAGE>
There can be no assurance that the market price of the Common Stock
immediately after implementation of the Reverse Stock Split will be maintained
for any period of time, that such market price will approximate ten times (or
some other multiple of) the market price of the Common Stock before the
proposed Reverse Stock Split, or that such market price of the Common Stock
will exceed or remain in excess of the current market price of the Common
Stock.
For the above reasons, the Company believes that the Reverse Stock
Split is in the best interests of the Company and its stockholders. However,
there can be no assurances that the Reverse Stock Split will have the desired
consequences. The Company anticipates that, following the consummation of the
Reverse Stock Split, the Common Stock will trade at a price per share that is
significantly higher than the current market price of the Common Stock.
However, there can be no assurance that, following the Reverse Stock Split,
the Common Stock will trade at ten times the market price of the Common Stock
prior to the Reverse Stock Split.
Effect of the Reverse Stock Split Proposal
Subject to stockholder approval, the Reverse Stock Split will be
effected by filing the Reverse Stock Split Amendment to the Company's
Certificate of Incorporation, and will be effective immediately upon such
filing. Although the Company expects to file the Reverse Stock Split
Amendment with the Delaware Secretary of State's office promptly following
approval of the Reverse Stock Split Proposal at the Special Meeting, the
actual timing of such filing will be determined by the Company's management
based upon their evaluation as to when such action will be most advantageous
to the Company and its stockholders. The Company reserves the right to forego
or postpone filing the Reverse Stock Split Amendment, if such action is
determined to be in the best interests of the Company and its stockholders.
Each stockholder will continue to own shares of Common Stock and will continue
to share in the assets and future growth of the Company as a stockholder.
Such interest will be represented by one-tenth as many shares as such
stockholder owned before the Reverse Stock Split. The number of shares of
Common Stock that may be purchased upon the exercise of outstanding options,
warrants, and other securities convertible into, or exercisable or
exchangeable for, shares of Common Stock (collectively, "Convertible
Securities") and the per share exercise or conversion prices thereof, will be
adjusted appropriately as of the Effective Date, so that the aggregate number
of shares of Common Stock issuable in respect of Convertible Securities
immediately following the Effective Date will be one-tenth of the number
issuable in respect thereof immediately prior to the Effective Date, the per
share exercise price immediately following the Effective Date will be 1000% of
the per share exercise or conversion price immediately prior to the Effective
Date, and the aggregate exercise or conversion prices thereunder shall remain
unchanged.
The Reverse Stock Split may also result in some stockholders owning
"odd lots" of less than 100 shares of Common Stock or Afractional shares'
(less than one (1) full share) of Common Stock received as a result of the
Reverse Stock Split. Brokerage commissions and other costs of transactions in
odd lots and of fractional shares may be higher, particularly on a per-share
basis, than the cost of transactions in even multiples of 100 shares.
The Company is authorized to issue 40,000,000 shares of Common Stock,
of which 12,555,746 shares were issued and outstanding at the close of
business on the Record Date. The Company is also authorized to issue 200,000
shares of Preferred Stock, each share having a par value of $5.00 (the
"Preferred Stock"), of which 785 were issued and outstanding at the close of
business on the Record Date.
Adoption of the Reverse Stock Split will reduce the shares of Common
Stock outstanding on the Record Date from 12,555,746 to approximately
1,255,746 but will not effect the number of authorized shares of Common
Stock. After the Reverse Stock Split, the Company estimates that it will have
approximately the same number of stockholders.
As a result of the Reverse Stock Split, the Company will have a greater
number of authorized but unissued shares of Common Stock than prior to the
Reverse Stock Split. The increase in the authorized but unissued shares of
Common Stock could make a change in control of the Company more difficult to
achieve. Under certain circumstances, such shares of Common Stock could be
used to create voting impediments to frustrate persons seeking to effect a
takeover or otherwise gain control of the Company. Such shares could be sold
privately to purchasers who might side with the Board of Directors in opposing
a takeover bid that the Board determines is not in the best interests of the
Company and its stockholders.
The increase in the authorized but unissued shares of Common Stock also
may have the effect of discouraging an attempt by another person or entity,
through acquisition of a substantial number of shares of Common Stock, to
acquire control of the Company with a view to effecting a merger, sale of
assets or a similar transaction, since the issuance of new shares could be
used to dilute the stock ownership of such person or entity. Shares of
authorized but unissued Common Stock could be issued to a holder who would
thereby have sufficient voting power to assure that any such business
combination or any amendment to the Company=s Certificate of Incorporation
would not receive the stockholder vote required for approval thereof. The
Board of Directors has no current plans to issue any shares of Common Stock
for any such or other purpose, and does not intend to issue any stock except
on terms or for reason which the Board of Directors deems to be in the best
interests of the Company.
The Common stock is currently listed on the Nasdaq SmallCap Market,
under the trading symbol (BUKSC).
Exchange of Stock Certificates
The combination and reclassification of shares of Common Stock pursuant
to the Reverse Stock Split will occur automatically on the Effective Date
without any action on the part of stockholders of the Company and without
regard to the date certificates representing shares of Common Stock prior to
the Reverse Stock Split are physically surrendered for new certificates.
<PAGE>
As soon as practicable after the Effective Date, transmittal forms will
be mailed to each holder of record of certificates for shares of Common Stock
to be used in forwarding such certificates for surrender and exchange for
certificates representing the number of shares of Common Stock such
stockholder is entitled to receive as a consequence of the Reverse Stock
Split. The transmittal forms will be accompanied by instructions specifying
other details of the exchange. Upon receipt of such transmittal form, each
stockholder should surrender the certificates representing shares of Common
Stock prior to the Reverse Stock Split, in accordance with the applicable
instructions. Each holder who surrenders certificates will receive new
certificates representing the number of shares of Common Stock that he or she
holds as a result of the Reverse Stock Split. STOCKHOLDERS SHOULD NOT SEND
THEIR STOCK CERTIFICATES UNTIL THEY RECEIVE A TRANSMITTAL FORM.
After the Effective Date, each certificate representing shares of
Common Stock outstanding prior to the Effective Date (an "Old Certificate")
will, until surrendered and exchanged as described above, be deemed, for all
corporate purposes, to evidence ownership of the whole number of shares of
Common Stock, into which the shares of Common Stock evidenced by such
certificate have been converted by the Reverse Stock Split, except that the
holder of such unexchanged certificates will not be entitled to receive any
dividends or other distributions payable by the Company after the Effective
Date, until the Old Certificates have been surrendered. Such dividends and
distributions, if any, will be accumulated, and at the time of surrender of
the Old Certificates, all such unpaid dividends or distributions will be paid
without interest.
Certain Federal Income Tax Considerations
The following discussion describes certain material federal income tax
considerations relating to the Reverse Stock Split. This discussion is based
upon the Internal Revenue Code of 1986, as amended (the "Code"), existing and
proposed regulations thereunder, legislative history, judicial decisions, and
current administrative rulings and practices, all as amended and in effect on
the date hereof. Any of these authorities could be repealed, overruled, or
modified at any time. Any such change could be retroactive and, accordingly,
could cause the tax consequences to vary substantially from the consequences
described herein. No ruling from the Internal Revenue Service (the "IRS")
with respect to the matters discussed herein has been requested, and there is
no assurance that the IRS would agree with the conclusions set forth in this
discussion.
This discussion may not address certain federal income tax consequences
that may be relevant to particular stockholders in light of their personal
circumstances (such as persons subject to the alternative minimum tax) or to
certain types of stockholders (such as dealers in securities, insurance
companies, foreign individuals and entities, financial institutions, and
tax-exempt entities) who may be subject to special treatment under the federal
income tax laws. This discussion also does not address any tax consequences
under state, local, or foreign laws.
STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO THE
PARTICULAR TAX CONSEQUENCES TO THEM OF THE REVERSE STOCK SPLIT, INCLUDING THE
APPLICABILITY OF ANY STATE, LOCAL, OR FOREIGN TAX LAWS, CHANGES IN APPLICABLE
TAX LAWS, AND ANY PENDING OR PROPOSED LEGISLATION.
The Company should not recognize any gain or loss as a result of the
Reverse Stock Split. No gain or loss should be recognized by a stockholder
who receives only Common Stock upon the Reverse Stock Split. The aggregate
tax basis of the shares of Common Stock held by a stockholder following the
Reverse Stock Split will equal the stockholder=s aggregate basis in the Common
Stock held immediately prior to the Reverse Stock Split and generally will be
allocated among the shares of Common Stock held following the Reverse Stock
Split on a pro-rata basis. Stockholders who have used the specific
identification method to identify their basis in shares of Common Stock
combined in the Reverse Stock Split should consult their own tax advisors to
determine their basis in the post-Reverse Stock Split shares of Common Stock
received in exchange therefor.
Recommendation of the Board of Directors
The Board of Directors recommends that the stockholders vote "FOR" the
amendment to the Company=s Certificate of Incorporation to effect the Reverse
Stock Split.
STOCKHOLDER PROPOSALS
In the event any stockholder intends to present a proposal at the next
Annual Meeting of Stockholders to be held in 1999, such proposal must be
received by the Secretary of the Company, in writing on or before June 3,
1999, to be considered for inclusion in the Company=s Proxy Statement relating
to the next Annual Meeting of Stockholders.
OTHER BUSINESS
The Company knows of no business that will be presented for
consideration at the Special Meeting other than that described in this Proxy
Statement. As to other business, if any, that may properly come before the
Special Meeting, it is intended that proxies solicited by the Board will be
voted in accordance with the judgment of the person or persons voting the
proxies.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE
COMPLETE, SIGN, DATE AND RETURN TO THE COMPANY THE ACCOMPANYING PROXY. IF YOU
ARE PRESENT AT THE MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE YOUR SHARES
IN PERSON.
BY THE BOARD OF DIRECTORS
____________________________________
December 4, 1998 William A. Griffith, Secretary
EXHIBIT A
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
BUTLER NATIONAL CORPORATION
BUTLER NATIONAL CORPORATION, a corporation (the "Corporation")
organized and existing under and by virtue of the General Corporation Law of
the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of BUTLER NATIONAL CORPORATION duly
adopted resolutions setting forth a proposed amendment of the Certificate of
Incorporation of said corporation, declaring said amendment to be advisable
and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is
as follows:
"RESOLVED, that the Certificate of Incorporation of this Corporation be
and is hereby amended by deleting Article FOURTH thereof in its entirety and
by substituting in lieu thereof the following:
FOURTH: Section 1. The authorized capital of this Corporation shall be
$1,400,000 consisting of 40,000,000 shares of common stock, $.01 par value
(the ACommon Stock@) and 200,000 shares of preferred stock, the par value of
$5.00 per share (the "Preferred Stock"). The relative voting rights,
preferences and other privileges of such capital stock shall be as follows:
(a) Common Stock. Each share of Common Stock shall entitle the
holder thereof to one (1) vote; all such shares of Common Stock shall be equal
in all respects and shall confer equal rights upon the holders thereof.
(b) Preferred Stock. Each share of Preferred Stock shall entitle the
holder thereof to such rights, voting power, preferences and restrictions as
may be fixed by the board of directors by resolution thereof.
Effectively immediately upon the filing of the Certificate of Amendment
which contains this provision with the Secretary of State of the State
of Delaware, the outstanding shares of Common Stock shall be and hereby
are combined and reclassified as follows: each share of Common Stock
shall be reclassified as and converted into one-tenth of one share of
Common Stock, $.01 par value per share, without any action by the
holder. Certificates representing shares combined and reclassified as
provided in this Certificate of Amendment are thereby canceled, and,
upon presentation of the canceled certificates to the Corporation, the
holders thereof shall be entitled to receive new certificates
representing the shares resulting from such combination and
reclassification."
Section 2. A shareholder shall have no pre-emptive rights to subscribe
for or purchase any shares of capital stock or other securities of
whatsoever kind of nature which may be issued by this Corporation;
voting for directors shall not be cumulative."
SECOND: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Amendment of Certificate of Incorporation on the 4th day of December, 1998.
BUTLER NATIONAL CORPORATION
By: /S/ William A. Griffith
Name: William A. Griffith
Title: Secretary
