<PAGE>
As filed with the Securities and Exchange Commission on December 29, 1998.
Registration No. 333- _______
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BUTLER INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
Maryland 06-1154321
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
110 Summit Avenue, Montvale, New Jersey 07645
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(Address of Principal Executive Offices) (Zip Code)
Butler International, Inc. Supplemental Executive Retirement Plan
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(Full title of the plan)
Warren F. Brecht, Secretary
Butler International, Inc.
110 Summit Avenue, Montvale, New Jersey 07645
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(Name and address of agent for service)
(201) 573-8000
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(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------
Title of securities Amount to be Proposed Proposed Amount of
to be registered registered maximum maximum Registration fee
offering aggregate offering
price per unit price(1)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Butler $2,000,000 100% $2,000,000 $556
International, Inc.
Supplemental
Executive
Retirement Plan
Obligations(2)
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee.
(2) The Butler International, Inc. Supplemental Executive Retirement Plan
obligations are unsecured obligations of Butler International, Inc. to pay
deferred compensation in the future in accordance with the Butler
International, Inc. Supplemental Executive Retirement Plan.
1
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Incorporation of Documents by Reference
The documents listed in (a) through (c) below are incorporated by reference
in this registration statement and all documents subsequently filed by the
registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in the registration statement and to be part
thereof from the date of filing of such documents.
(a) The registrant's latest annual report filed pursuant to section 13(a) or
15(d) of the Exchange Act.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the Exchange
Act since the end of the fiscal year covered by the registrant document referred
to in (a) above.
(c) The description of the class of securities contained in a registration
statement filed under the Exchange Act, including any amendment or report filed
for the purpose of updating such description.
Description of Securities
Under the Butler International, Inc. Supplemental Executive Retirement Plan
(the "Plan"), certain highly compensated senior management and other highly
compensated employees of Butler International, Inc. (the "Company") and certain
of its subsidiaries may defer a portion of their eligible compensation.
"Eligible compensation" means the compensation that would have been recognized
under the Company's qualified plan if such pay were not required to be reduced
by any deferrals made under the Plan nor limited by any maximum stated in the
Internal Revenue Code.
Amounts deferred by a participant under the Plan will be credited by book
entry to one or more deferred compensation accounts maintained on behalf of the
participant. The value of a participant's accounts will be based on the
performance of benchmark investment funds selected by the participant under the
Plan (including the Company stock fund) for purposes of accounting (as if the
deferred compensation had been so invested) and not for actual investment.
Since no participant deferrals actually will be invested in any investment fund,
participants will not have any ownership interest in any investment fund. The
Benefit Plan Administrative Committee appointed by the Board of Directors of the
Company has the sole discretion to determine the alternative benchmark
investment funds available under the Plan as the measurement mechanism to
determine the rate of return on amounts deemed invested in accordance with the
terms of the Plan.
The obligations of the Company under the Plan (the "Obligations") are
unsecured general obligations to pay in the future the value of the
participants' deferred compensation accounts (i) adjusted to reflect the
performance of the selected measurement investment funds and (ii) reduced by the
outstanding balance of any debt owed to the Company or any of its subsidiaries
by the respective participant upon termination of employment and (iii) further
reduced by any damages associated with the respective participant's termination
of employment for justifiable cause, if applicable, all such adjustments and
reductions in accordance with the terms of the Plan. The Obligations will rank
without preference with other unsecured and unsubordinated indebtedness of the
Company from time to time outstanding and are, therefore, subject to the risks
of the Company's insolvency.
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The Company is not required to fund or otherwise segregate assets to be
used for the payment of the Obligations. Notwithstanding the foregoing, the
Company maintains a trust to hold assets to be used for payment of Obligations.
The assets held by such trust will be subject to the claims of the Company's
general creditors.
Obligations are generally payable under the Plan upon (i) retirement at or
after age 55, (ii) disability, (iii) resignation or discharge, (iv) death, (v) a
determination by the Benefit Plan Administrative Committee that a participant
has suffered a financial hardship, and (vi) at the election of the participant,
a specific payment date designated by the participant at least five years from
the date the fixed period deferred compensation account is established and prior
to his termination of employment.
The Obligations cannot be assigned, alienated, pledged or encumbered. The
Obligations are not convertible into any security of the Company.
The Company may amend or terminate the Plan at any time, provided that any
benefits accrued by participants under the Plan before the effective date of the
applicable amendment or termination may not be reduced by such amendment or
termination without the participant's consent.
Indemnification of Directors and Officers
Section EIGHTH of the Articles of Incorporation authorizes the Company to
provide for indemnification of officers and directors through, among other ways,
a provision in its by-laws. Section 13 of Article III of the Company's By-laws
provides that the registrant shall indemnify its directors and officers from
liabilities and expenses to the fullest extent permitted by the Maryland General
Corporation Law (the "MGCL"). Accordingly, pursuant to the terms of the MGCL as
presently in effect, the Company may indemnify any director unless it is
established that: (i) the act or omission of the director was material to the
matter giving rise to the proceeding and was committed in bad faith or was the
result of active and deliberate dishonesty; (ii) the director actually received
an improper personal benefit in money, property or services; or (iii) in the
case of any criminal proceeding, the director had reasonable cause to believe
that the act or omission was unlawful. In addition, the Company's By-Laws
require the Company to indemnify each person who is or was a director, officer,
employee or agent of the Company to the fullest extent permitted by the laws of
the State of Maryland in the event he is involved in legal proceedings by reason
of the fact that he is or was a director, officer, employee or agent of the
Company, or is or was serving at the Company's request as a director, officer,
employee or agent of another corporation, partnership or other enterprise. The
Company may also advance to such persons expenses incurred in defending a
proceeding to which indemnification might apply, upon terms and conditions, if
any, deemed appropriate by the Board of Directors upon receipt of an undertaking
by or on behalf of such director or officer to repay all such advanced amounts
if it is ultimately determined that he is not entitled to be indemnified as
authorized by the laws of the State of Maryland.
Interests of Named Experts and Counsel
The firm of McBreen, McBreen & Kopko is issuing an opinion in connection
with the enforceability of certain deferred compensation obligations of the
Company under the Plan. Frederick H. Kopko, Jr. and Hugh G. McBreen, two
partners of McBreen, McBreen & Kopko, are directors and substantial shareholders
of the Company. Messrs. Kopko and McBreen have executed promissory notes to
purchase stock from the Company. The firm provides legal services to the
Company.
3
<PAGE>
Exhibits
4.1 Butler International, Inc. Supplemental Executive Retirement Plan and the
First Amendment thereto
4.2 Trust Under Butler International, Inc. Supplemental Executive Retirement
Plan
5 Opinion of Legal Counsel
23 Consent of Deloitte & Touche LLP
24 Power of Attorney (contained in signature page)
Undertakings
(a) The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a post-
effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this registration statement.
2. That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any
4
<PAGE>
liability under the Act, each filing of the registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Montvale, State of New Jersey, on December 15, 1998.
BUTLER INTERNATIONAL, INC.
By: /s/ Warren F. Brecht
-----------------------------
Warren F. Brecht, Secretary
POWER OF ATTORNEY
We, the undersigned officers and directors of Butler International, Inc.,
hereby severally and individually constitute and appoint Warren F. Brecht and
Michael C. Hellriegel, and each of them, the true and lawful attorneys and
agents of each of us to execute in the name, place and stead of each of us
(individually and in any capacity stated below) any and all amendments to this
Registration Statement on Form S-8, and all instruments necessary or advisable
in connection therewith, and to file the same with the Securities and Exchange
Commission, each of said attorneys and agents to have power to act with or
without the other and to have full power and authority to do and perform in the
name and on behalf of each of the undersigned every act whatsoever necessary or
advisable to be done in the premises as fully and to all intents and purposes as
any of the undersigned might or could do in person, and we hereby ratify and
confirm our signatures as they may be signed by our said attorneys and agents
and each of them to any and all such amendments and other instruments.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Name Title Date
- ---- ----- ----
/s/ Edward M. Kopko Chairman and Chief December 15, 1998
- -------------------------- Executive Officer
Edward M. Kopko (Principal Executive Officer)
/s/ Michael C. Hellriegel Senior Vice President and December 15, 1998
- -------------------------- Chief Financial Officer
Michael C. Hellriegel (Principal Financial Officer)
(Principal Accounting Officer)
/s/ Warren F. Brecht Secretary December 15, 1998
- --------------------------
Warren F. Brecht
6
<PAGE>
/s/ Frederick H. Kopko, Jr. Director December 15, 1998
- ----------------------------
Frederick H. Kopko, Jr.
/s/ Hugh G. McBreen Director December 15, 1998
- ----------------------------
Hugh G. McBreen
/s/ John F. Hegarty Director
- ---------------------------- December 15, 1998
John F. Hegarty
/s/ Nikhil S. Nagaswami
- ---------------------------- Director December 15, 1998
Nikhil S. Nagaswami
7
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
4.1 Butler International, Inc. Supplemental Executive Retirement
Plan and the First Amendment thereto
4.2 Trust Under Butler International, Inc. Supplemental Executive
Retirement Plan
5 Opinion of Legal Counsel
23 Consent of Deloitte & Touche LLP
24 Power of Attorney (contained in signature page)
8
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EXHIBIT 4.1
EXHIBIT 4.1
BUTLER SERVICE GROUP, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
EFFECTIVE DATE OF PLAN: February 1, 1995
PLAN YEAR: February 1, 1995 to December 31, 1995; thereafter, January 1 to
December 31.
I. ELIGIBILITY REQUIREMENTS
The Butler Service Group, Inc. Supplemental Executive Retirement Plan (the
"plan") is being offered to eligible employees of Butler Service Group, Inc.
("Butler") and its parent, subsidiaries and affiliates (collectively
referred to as "the Companies" except where the context clearly indicates
otherwise).
Only a select group of highly compensated senior management or other highly
compensated employees may be eligible for the plan. The plan's Committee
may select participants from "Eligible Staff Employees" and "Eligible
Contract Employees".
1. For purposes of the plan, the following definitions will apply:
(a) "Eligible Staff Employee" will mean a staff employee who is
employed at a salary level that will produce total W-2 earnings
of more than $85,000 (the "Minimum Compensation Level") for the
calendar year of reference. In the event such an employee
begins or terminates employment during a calendar year,
annualized earnings will be used in lieu of the actual total W-2
pay.
(b) "Eligible Contract Employee" will mean a contract employee who
is expected to earn more than the Minimum Compensation Level for
the calendar year of reference. In the event such an employee
begins or terminates employment during a calendar year,
annualized earnings will be used in lieu of actual total W-2
pay.
At the beginning of each subsequent Plan Year, the Minimum Compensation
Level will be indexed to reflect cost-of-living increases. The
Committee, in its sole discretion, will select the factors to be used in
determining such future increases.
2. Employees who are determined by the Committee, in its sole discretion, to
meet the requirements for initial participation will be deemed eligible
for the plan in accordance with the following guidelines:
(a) For purposes of determining eligibility for the initial enrollment
on February 1, 1995, actual W-2 income for 1994 shall be used.
Candidates who qualify under this Section will be eligible to
participate as of the payroll period beginning on February 1.
(b) For purposes of determining eligibility of "Rollover" candidates
from major clients, participation will be allowed if candidates can
show W-2 earnings with previous
1
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employer that meet the Minimum Compensation Level. Branch Officer
and Vice President approval will be required to verify that the
candidate will continue at such compensation level after the
"Rollover" to Butler or the Companies.
Candidates who qualify under this Section will be eligible to
participate as of the first payroll period following the
commencement of their employment with Butler or the Companies.
(c) For purposes of determining the eligibility of all other employees,
a six-month waiting period shall be used. During such period,
candidates must accrue earnings equal to 50% of the Minimum
Compensation Level.
Candidates who qualify under this Section will be eligible to
participate as of the first payroll period following their
completion of the six-month waiting period.
3. An employee DOES NOT have to participate in the Butler Service Group,
Inc. 401(k) Plan (the "Qualified Plan") in order to be eligible for this
plan.
4. The Committee will, by written action before the first day of each plan
year, designate those employees who are eligible to continue as
participants for the plan year of reference.
Since eligibility is determined on an annual basis in accordance with the
guidelines described above, a participant who is eligible for one plan
year may be deemed ineligible in a following plan year. If the Committee
determines that a prior participant will not be eligible for the new plan
year, such participant will not be eligible to make any voluntary
deferral allocations for such plan year.
However, such participant's accounts will remain in the plan until
otherwise distributed in accordance with Section VII., Section VIII., or
the following paragraph and the participant will retain the ability to
direct the deemed investment of his accounts in accordance with Section
V. until such distribution occurs.
Notwithstanding the foregoing, in the event that the Department of Labor
(DOL) issues regulations or other official notice specifically defining
the group of employees that may participate in a plan of this type and
any current participants do not meet the criteria set forth in the DOL
regulations or notice, the accounts of such participants will be
distributed in a lump sum as soon as administratively possible following
the later of the effective date or publication date of the DOL
regulations or notice.
5. Participants who terminate employment and then subsequently return to
work with the Companies will be deemed to be new employees for purposes
of determining their eligibility to participate.
6. Eligibility for this plan entitles an employee only to the rights
specified in the plan and will not be construed as giving an employee any
right to be retained by the Companies as an employee. All employees who
become eligible to participate will remain subject to termination by the
Companies to the same extent as if this plan did not exist.
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II. MAINTENANCE OF ACCOUNTS
Up to two accounts will be maintained for each participant as follows:
RETIREMENT
ACCOUNT: Includes that portion of the participant's voluntary
deferral allocations which are earmarked for retirement
or other termination of employment.
FIXED PERIOD
ACCOUNT: Includes that portion of the participant's voluntary
deferral allocations which are earmarked for
distribution at a specific future date designated by the
participant.
III. ALLOCATIONS
For purposes of participant voluntary deferral allocations under this plan,
"nonqualified plan pay" will be defined as the compensation that would have
been recognized under the Qualified Plan if such pay were not required to be
reduced by any deferrals made under this plan nor limited by any maximum
stated in the Internal Revenue Code (IRC), including the $150,000 limit, as
adjusted, in IRC Section 401(a)(17).
Participant Voluntary Deferral Allocations (Before Tax)
When making his initial election to defer under the Plan, a participant may
save, through payroll reductions, from 2% (or $2,000, if less) to 100% (in
whole percentages) of his nonqualified plan pay without being curtailed by
limitation on elective deferrals found in Section 402(g) of the IRC ($9,240
for 1994).
For each Plan Year thereafter during which the participant remains eligible
for the Plan, the participant may save, through payroll reductions, from 0%
to 100% (in whole percentages) of his nonqualified plan pay without being
curtailed by limitation on elective deferrals found in Section 402(g) of the
IRC ($9,240 for 1994).
A participant who is contributing a percentage of his pay under the Plan in
accordance with either of the two preceding paragraphs shall also be
entitled to make an additional deferral election. Such participant may
elect to save at an increased deferral rate once his pay reaches a
Compensation Threshold to be selected by the participant. For purposes of
the preceding sentence, "Compensation Threshold" shall mean a dollar amount
selected by the participant, provided such amount is equal to or greater
than $80,000 and is a multiple of $10,000.
If such an election is made, the increased voluntary deferral allocation
rate shall take effect as soon as administratively possible following the
payroll period within which his pay reaches the Compensation Threshold
indicated by the participant.
All of the allocations described in the preceding paragraphs will be
considered as a reduction in the participant's pay and should not be
currently taxable to the participant for federal income tax purposes. These
allocations are withheld from the participant's pay. Amounts deferred under
the plan may be subject to state income taxes and will be subject to
applicable FICA and FUTA taxes when earned.
3
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As discussed in the preceding paragraph, a participant's pay will be reduced
to reflect any voluntary deferral allocations made under this plan. This
reduced pay will be used for purposes of calculating other Companies-
provided benefits which are based on pay (i.e. group-term life insurance,
401(k) plan and pension plan and disability insurance for those employees
who are eligible). However, the participant's unreduced pay will still be
used to calculate the participant's Social Security benefits to the extent
permitted under applicable law.
EXAMPLE - For 1995 a participant with a salary of $100,000 elects to defer
10% of his pay into the nonqualified plan. As a result of this election,
the participant's 1995 pay will be deemed to be $90,000 for purposes of
determining his 401(k) deferrals. Accordingly, if the participant were to
elect to make a 5% elective deferral contribution to the 401(k) plan, the
amount of such contribution would be $4,500 (5% of $90,000) rather than
$5,000 (5% of $100,000).
1. DEFERRAL ELECTION
An initial election to defer pay under this plan must be made WITHIN 30
DAYS AFTER THE LATER OF THE EFFECTIVE DATE OR THE DATE THE PARTICIPANT IS
FIRST ELIGIBLE TO PARTICIPATE. Payroll deferrals shall commence as soon
as administratively practicable following the Committee's receipt of the
participant's Initial Election Form.
Participants who fail to complete an Initial Election Form and Election
Form Addendum, if applicable, and return it to the address indicated on
the form by the deadline described above will have to wait to the
following January 1 before they will be able to participate.
At the time the participant makes his initial deferral election, he must
also indicate the whole percentage of his voluntary deferral allocations
which are to be allocated to his Retirement Account and Fixed Period
Account and the form in which his benefits will be paid upon the
occurrence of the applicable event (see Section VII.). In addition, if
the participant designates any portion of his voluntary deferral
allocations to be allocated to a Fixed Period Account, he must also
irrevocably designate the specific future payment date of this Account.
Thereafter, the election to defer pay under this plan for any future
calendar year must be made 30 days or at such other time as the Committee
may determine prior to the calendar year to which such pay is
attributable.
ANY ELECTION TO DEFER PAY UNDER THIS PLAN WILL ONLY APPLY TO PAY
ATTRIBUTABLE TO SERVICES PERFORMED AFTER THE DATE OF SUCH ELECTION.
2. DISCONTINUANCES OR CHANGES
Once a participant makes an election to allocate a portion of his pay to
the plan, such election may not be altered or revoked at any time during
the plan year of reference. The same rule will apply with respect to the
election of the percentages in which the voluntary deferral allocations
are allocated to the Retirement Account and/or Fixed Period Account. A
PARTICIPANT MUST MAKE NEW DEFERRAL AND ACCOUNT ALLOCATION ELECTIONS FOR
EACH PLAN YEAR FOR WHICH HE IS ELIGIBLE TO PARTICIPATE.
However, as indicated above, when making this election for the new plan
year, the participant can elect not to defer any salary for the plan year
by electing 0%.
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In addition, subject to the approval of the plan Committee, a participant
who has an immediate and heavy unforeseen financial need may withdraw
funds from the plan (see Section VIII. for further details.)
IV. ACTUAL INVESTMENT OF ALLOCATIONS
1. Allocations Deposited in The Rabbi Trust
That portion of the participant's accounts that is deemed to be invested
in one of the investment alternatives listed in Items 1. through 5. of
Section V will be deposited in a special trust commonly known as a "rabbi
trust" with an independent third-party trustee. This irrevocable
arrangement will severely restrict the Companies' access to the funds
(except to the extent that the rabbi trust may purchase Butler stock
directly from Butler under investment alternative 5, Section V), and thus
will be designed so that the funds will solely be used to provide for
payment of the benefits due to the participants under all circumstances
except as described in the following paragraph. As a result, the rabbi
trust will be designed to prevent the participant's deferrals from being
available to hostile management in the event of a change of control in
the Companies.
Neither this plan nor any action taken pursuant to the terms of this plan
shall be considered to create a fiduciary relationship between the
Companies and the plan participants or any other persons, or to establish
a trust in which the assets are beyond the claims of any creditor of the
Companies. However, (1) separate rabbi trusts may be maintained for
different Companies or groups of Companies and (2) these assets will only
become available to creditors upon the bankruptcy or insolvency of any
one of the Companies in the same rabbi trust. Consequently, in the event
of any one of the Companies' bankruptcy or insolvency, only the assets of
the rabbi trust of which such Company is a part may become available to
the general creditors of the insolvent Company.
The assets of the rabbi trust will be invested by the Trustee in
accordance with the investment policy selected by Butler. Butler has
total discretion in determining the appropriate investments under current
market conditions and its expressed investment objectives. It is
anticipated that funds will be invested in either mutual funds, managed
money funds or Company stock that when viewed as a whole will provide a
general portfolio which might include common stocks and other equity
securities, long-term bonds and short and intermediate-term fixed-income
instruments such as U.S. Treasury bills and notes, corporate notes,
certificates of deposit, money market funds, commercial paper, etc. It
is anticipated that the investment objective of the plan will be long-
term appreciation.
LESS THAN 20% IN MARKET VALUE OF THE SECURITIES HAVING A READILY
ASCERTAINABLE MARKET VALUE HELD BY THE RABBI TRUST SHALL CONSIST OF
EQUITY SECURITIES ISSUED BY THE COMPANIES WITH RESPECT TO WHICH REPORTS
WOULD OTHERWISE BE REQUIRED UNDER SECTION 16 OF THE SECURITIES EXCHANGE
ACT OF 1934. THE COMMITTEE, IN ITS SOLE DISCRETION, WILL TAKE ANY ACTION
IT CONSIDERS NECESSARY OR APPROPRIATE TO COMPLY WITH THE PRECEDING
LIMITATION.
2. ALLOCATIONS NOT DEPOSITED IN THE RABBI TRUST
That portion of the participant's accounts that is deemed to be invested
in the investment alternative described in Item 6. of Section V. will not
be deposited in the rabbi trust. Such portion will remain a part of the
general assets of the Company with which the participant is
5
<PAGE>
employed. Neither this plan nor any action taken pursuant to the terms of
this plan shall be considered to create a fiduciary relationship between
the Companies and the plan participants or any other persons, or to
establish a trust in which the assets are beyond the claims of any
creditor of the Companies. Consequently, the portion of the participant's
accounts invested in the investment alternative described in Item 6 of
Section V may become available to the general creditors of the Company
with which the participant is employed.
3. RULES APPLYING TO BOTH THE ABOVE ITEMS 1. AND 2.
Notwithstanding the existence of the above-referenced rabbi trust or
whether or not any portion of the participant's accounts is invested in
such trust, plan benefits are payable as they become due. In other
words, the participant will be entitled to the full value of his accounts
determined in accordance with Sections III. and V. regardless of whether
or not the Companies invest the plan assets in a similar manner.
For example, if the participant elects to have his accounts deemed to be
invested 50% in the Balanced Fund and 50% in the Equity Fund, his account
balance will be increased by any gains attributable to the performance of
these funds and, likewise, decreased by any losses attributable to the
performance of these funds. Butler is not bound to follow these
investment instructions in determining how it actually invests the plan
assets. Butler will be free to provide the Trustee with an investment
policy which might result in the assets being invested 100% in the
Balanced Fund, 100% in the Equity Fund or in any other manner.
Nevertheless, the participant's investment instructions will be used to
measure any deemed investment earning or losses that are credited to the
participant's account balance and thus determine the amount that will
actually be payable to the participant when he becomes eligible to
receive payment.
V. DEEMED INVESTMENT OF ALLOCATIONS
Investment experience will be credited or debited to a participant's account
balance in accordance with his investment elections based on the actual
earnings of the investment alternatives made available to the participant by
the Committee. Until changed by the Committee, such alternatives will
consist of the following:
1. The Fixed Income Fund will be invested primarily in FDIC insured
certificates of deposit. This fund may also be invested in short and
medium term debt obligations of the U.S. Government and agencies thereof,
contracts issued by insurance companies, collaterized mortgage
obligations, savings accounts, money market funds and cash equivalent
investments. The investment objective is to obtain a reasonable rate of
return with preservation of principal.
2. The Balanced Fund will primarily be invested in stocks and bonds with a
typical asset allocation of 60% equities and 40% government bonds or cash
equivalents. The equity investment style is core value: large cap stocks
with low price/earnings ratios and the potential for earnings
acceleration. The fixed income portion is actively managed based on
duration/yield curve positioning, sector allocation and security
selection. The investment objective is to reflect an investment
portfolio that is balanced between equity securities and debt
instruments. This portfolio is managed by Mitchell Hutchins Asset
Management, Inc., a Paine Webber Inc. subsidiary.
3. The Mid to Large-Capitalization Equity Fund will be invested primarily in
medium to large capitalization companies. The selection process focuses
on companies that have provided
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consistent growth rates, stable management, and a proven ability to add
value to the company over a specific period of time. The investment
objective is long-term growth of capital. This portfolio is managed by
Trainer, Wortham & Co., Inc., an independent investment advisor.
4. A Small to Mid-Capitalization Equity Fund will be invested in a
diversified common stock portfolio of representative industries and
corporations, often smaller and medium capitalization in size, although
the fund may also invest in large-cap companies. The investment style is
to seek lower P/E value oriented stocks. The investment objective is
long-term growth of capital. This portfolio is managed by Jurika &
Voyles, Inc. and independent investment advisor.
5. An International Fund primarily will be invested in securities of foreign
issuers located in Europe, the Pacific Rim, Canada and Latin America.
They use a "bottoms up" process that starts with stock selection. Their
focus is on the specifics of a company and less on the macro economic and
political outlook. The investment objective is long-term growth of
capital. This portfolio is managed by Lazard Freres, an independent
investment advisor.
6. The Enhanced Large Cap Index Fund maintains industry and sector
weightings similar to the S&P 500 Index, but seeks to enhance returns by
focusing on fewer, but stronger stocks within the various sectors --
between 60 and 85 stocks altogether with balancing adjustments made twice
a month. The investment objective is to outperform the S&P 500 Index
without taking unnecessary risks. This portfolio is managed by Laurel
Capital Advisors, a subsidiary of Mellon Bank.
7. Butler International Stock Fund primarily will be invested in shares of
the common stock of Butler International, Inc. The fund may also be
invested from time to time in cash equivalent investments. The
investment objective is long-term growth of capital.
8. Commercial Paper Rate Option - Deemed investments in this option will be
credited with 1% in excess of the latest annualized yield on commercial
paper having a maturity of 90 days. This yield will be obtained from the
most recently quoted yield for high grade unsecured notes sold through
dealers by major corporations in multiples of 1,000 as indicated in the
"Money Rates" column of the eastern edition of the Wall Street Journal on
-------------------
the last business day of the calendar quarter of reference. For example,
if such annualized rate were 5.15% on the last business day of the
quarter, the portion of your account deemed to be invested in this option
would be credited with 1% in excess of 1/4th of that annualized rate
(i.e. 1/4th of 6.15% or 1.5375%) for that calendar quarter. In the event
the Wall Street Journal ceases publication of such rate, the Committee
-------------------
shall notify you of the other publication of general circulation which
shall be used in its place. The portion of your accounts that is deemed
invested in this option will not be held in the rabbi trust but will be
part of the general corporate assets of the Companies.
Prior to each plan year, the Committee, in its sole discretion, will
determine the precise indices and/or funds which shall be selected for the
general investment categories described in (1) through (6) and notify the
participants of its decisions. Category (7) will be deemed fully invested
in Butler stock. Butler reserves the right to change the investment
alternatives and to the change the investment indices for any investment
alternative at any time and from time to time. There can be no guarantee
or assurances that any investment alternative will continue to be made
available.
THE FAIR MARKET VALUE OF EACH INDEX OR FUND SHALL BE DETERMINED BY THE
COMMITTEE. IT SHALL REPRESENT THE FAIR MARKET VALUE OF THE ACTUAL INDEX OR
FUND USED FOR MEASUREMENT PURPOSES, LESS ANY EXPENSES ASSOCIATED WITH THE
ADMINISTRATION OF THE INDEX OR FUND.
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A participant may elect to have his accounts reflect the investment
experience of any combination of the alternatives by designating all or any
portion of his accounts in multiples of 10% to be deemed to be invested in
such alternatives. The same percentage shall be applied equally to each of
the participant's accounts. A participant may change his "investment"
objective for future deferrals and/or "transfer" amounts between investment
alternatives with respect to his existing account balance as of any January
1 provided he gives 30 days' advance written notice to the Committee.
NOTHING IN THE PLAN REQUIRES THE COMPANIES TO ACTUALLY ESTABLISH OR INVEST
ASSETS OF THIS NONQUALIFIED PLAN IN ANY OF THE ABOVE-REFERENCED FUNDS.
THESE INVESTMENT FUNDS ARE USED SOLELY FOR THE PURPOSE OF ATTRIBUTING
INVESTMENT EXPERIENCE TO PARTICIPANT ACCOUNTS. ALL PLAN BENEFITS WILL BE
PAID FROM THE RABBI TRUST FUND AND/OR THE GENERAL FUNDS OF THE COMPANIES
AND NO OTHER SPECIAL OR SEPARATE FUND(S) WILL BE ESTABLISHED AND NO OTHER
SEGREGATION OF ASSETS WILL BE MADE TO ASSURE THE PAYMENT OF SUCH BENEFITS.
TO THE EXTENT THAT ANY PERSON ACQUIRES A RIGHT TO RECEIVE BENEFITS FROM THE
COMPANIES UNDER THIS PLAN, SUCH RIGHT WILL BE NO GREATER THAN THE RIGHT OF
AN UNSECURED CREDITOR. AS A RESULT, THE PLAN WILL CONSTITUTE A NONQUALIFIED
DEFERRED RETIREMENT PLAN WHICH, IN ACCORDANCE WITH ERISA (EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974) MUST BE "UNFUNDED AND MAINTAINED BY
AN EMPLOYER PRIMARILY FOR THE PURPOSE OF PROVIDING DEFERRED COMPENSATION FOR
A SELECT GROUP OF MANAGEMENT OR HIGHLY COMPENSATED EMPLOYEES." IT IS
INTENDED THAT THE EXISTENCE OF THE RABBI TRUST DESCRIBED IN SECTION IV. WILL
NOT VIOLATE THE REQUIREMENT THAT THE PLAN BE "UNFUNDED" FOR PURPOSES OF
ERISA.
VI. VALUATION OF ACCOUNTS
The participant's accounts will be valued on each March 31, June 30,
September 30 and December 31 at which time they will be proportionately
1. adjusted upward or downward to reflect the deemed investment experience
based on the alternatives elected by the participant in accordance with
Section V; and
2. reduced to reflect any applicable administrative expenses.
In addition, on an ongoing basis, the participants' accounts will be
directly adjusted to reflect all other applicable transactions during the
plan year attributable to such accounts including, but not limited to, any
allocations and distributions.
Each participant will receive a personal account statement after each
quarterly valuation.
VII. BENEFIT RIGHTS AND METHOD AND FORMS OF DISTRIBUTION
1. VESTING
The participant is 100% vested at all times.
However, if the Companies terminate the participant's employment for
"justifiable cause" (or the participant quits or resigns before such
termination for "justifiable cause" can occur) or if the participant has
an outstanding loan from the Companies upon termination, all or a portion
of the participant's accounts may be forfeited.
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"Justifiable cause" means dishonesty, including fraud and/or
embezzlement, in the performance of his duties for the Companies,
conviction of a felony, or a deliberate and meditated act against the
interest of the Companies. The determination of whether "justifiable
cause" exists in a particular case shall be made by the Committee.
The portion of the accounts to be forfeited will be limited to the amount
necessary to repay any outstanding loan and/or the amount necessary to
cover any damages associated with a termination of employment for
justifiable cause.
2. TIME OF PAYMENT
(a) RETIREMENT ACCOUNT
Distribution of the participant's Retirement Account will be made as
soon as administratively practicable following the valuation date
next subsequent to the occurrence of the earliest of the following
events:
(i) retirement at or after age 55;
(ii) disability (eligible for payments under the Companies' long-
term disability plan);
(iii) death; or
(iv) resignation or discharge.
The responsibility for notifying the Committee upon the occurrence
of one of the events described above in (i) through (iv) will rest
with the participant or his beneficiary.
(b) Fixed Period Account
The Fixed Period Account is offered in order to provide participants
with the ability to elect a specific future payment date that is
earlier than the events described above in (i) through (iv) of the
"Retirement Account" description for all or any portion of his
voluntary deferral allocations.
Distribution of a participant's Fixed Period Account shall be paid
to him as soon as administratively practicable after the payment
date (January 1, April 1, July 1 or October 1 of the applicable
year) irrevocably specified by the participant.
The minimum deferral period for this account will be five years from
the date such account is established. A participant may maintain
only one Fixed Period Account at a time.
If any of the events specified above in (i) through (iv) of the
"Retirement Account" description occur at a time when the
participant has a balance in his Fixed Period Account, such balance
will be transferred to his Retirement Account and be distributed in
accordance with the rules governing payment of the Retirement
Account.
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EXAMPLE #1 - Upon joining the plan on July 1, 1995, Participant A elects
to establish a Fixed Period Account with a payment date of July 1, 2000.
On July 1, 2000, the participant has $10,000 in the Fixed Period Account
and $20,000 in the Retirement Account. The $10,000 in the Fixed Period
Account will be distributed as soon as administratively possible
following the July 1 designated payment date net of any applicable income
tax withholding. However, no portion of the $20,000 in the Retirement
Account will be distributed (nor taxed) until a hardship withdrawal is
granted or the participant retires, dies, is disabled or otherwise
terminates employment.
EXAMPLE #2 - Upon joining the plan on July 1, 1995, Participant B elects
to establish a Fixed Period Account with a payment date of July 1, 2000.
The participant then terminates employment with Butler on August 1, 1998.
At that time the participant has $6,000 in the Fixed Period Account and
$15,000 in the Retirement Account. The $6,000 in the Fixed Period
Account will be transferred to the Retirement Account thereby resulting
in a new Retirement Account balance of $21,000, which will be paid out as
soon as administratively possible following the next valuation date (in
this case, September 30, 1998), net of any applicable income tax
withholding.
ADDITIONAL NOTE: By electing to receive the distribution of the Retirement
Account in installment payments rather than in a lump sum (see Subsection
3. "Method of Payment"), participants A and B can further defer payment and
related income taxation of the installment payments until paid.
3. METHOD OF PAYMENT
(a) RETIREMENT ACCOUNT
All elections regarding the method of payment of benefits under the
plan must be made at the time the participant makes his initial
election to participate in the plan. However, with the consent of
the Committee, the participant may elect to change the form of
payment (i.e. lump sum or installment payments) initially elected,
provided such new election is made at least one full calendar year
prior to the date the participant becomes eligible to receive
payment of his benefits.
Benefits will be payable in one of the following forms, at the
participant's prior election: a single lump sum payment; a
substantially equal number of annual installments (minimum 2;
maximum 5).
Separate elections will be made for benefits payable in the
following events:
(i) retirement at or after age 55;
(ii) disability (eligible for payments under the Companies' long-
term disability plan);
(iii) death; or
(iv) resignation or discharge.
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(b) FIXED PERIOD ACCOUNT
All elections regarding the method of payment of benefits under the
plan must be made at the time the participant makes his initial
election to participate in the plan.
Benefits will be payable in one of the following forms, at the
participant's prior election: a single lump sum payment; a
substantially equal number of annual installments (minimum 2;
maximum 5).
VIII. WITHDRAWAL OF FUNDS WHILE EMPLOYED
1. GENERAL RULES
Hardship withdrawals while still in the employ of the Companies are
permitted from the Retirement Account and from the Fixed Period Account
before such Account is payable. A participant is limited to one
withdrawal per plan year. To make a withdrawal, a participant must
provide 30 days' advance written notice to the Committee.
If a hardship withdrawal is made as of any date other than January 1,
April 1, July 1 or October 1, no investment experience will be credited
on the amount withdrawn from the last quarterly valuation date to the
date specified for the withdrawal.
2. FINANCIAL HARDSHIP RULES
(a) A withdrawal may be made only if it is on account of an
unanticipated emergency caused by an event beyond the participant's
control that results in a severe and immediate financial need, known
hereafter as a "Financial Hardship".
The following unanticipated emergencies shall be recognized as
causing a Financial Hardship:
(i) a sudden and unexpected illness or accident of the
participant or of one of the participant's dependents, as
defined in Section 152(a) of the Internal Revenue Code of
1986;
(ii) loss of the participant's property due to casualty;
(iii) impending eviction from or foreclosure on the participant's
principal place of residence; or
(iv) other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the
participant.
Circumstances that shall not be deemed to meet the above "Financial
Hardship" definition shall include, but not be limited to, the need
to send any children of the participant to college and the desire to
purchase a home.
(b) The circumstances that shall constitute an unforeseeable emergency
shall depend upon the facts of each request, but, in any case, the
participant must provide the Committee with a signed written
statement certifying that the Financial Hardship cannot be relieved
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(i) through reimbursement or compensation by insurance or
otherwise,
(ii) by reasonable liquidation of such participant's assets,
including those of his spouse and minor children if they are
reasonably available to him,
(iii) by discontinuance of allocations to this plan or
contributions to any qualified plan maintained by the
Companies, or
(iv) by other distributions or loans from any qualified plan
maintained by the Companies or loans from commercial sources
on reasonable commercial terms.
(c) The amount of such Financial Hardship withdrawal may not exceed the
amount required to meet the specified need.
IX. CLAIM PROCEDURE
The Committee will endeavor to administer the plan fairly and consistently
and to pay all benefits to which participants or beneficiaries are properly
entitled. However, failure to execute any forms required or to furnish
information requested by the Committee within a reasonable period of time
may result in delayed benefit payments.
All claims for unpaid benefits should be made in writing to the Committee.
If a claim is wholly or partially denied, the participant will receive a
written notice from the Committee indicating the reason for the denial, the
plan provisions pertinent to the denial, and a request for whatever
additional information may be necessary to consider the claim further.
After receipt of a notice denying a claim for benefits, the participant or
the participant's authorized representative may review pertinent documents,
submit comments on issues involved and request in writing that the Committee
review its action.
The participant's written request must be received by the Committee no later
than 60 days following the participant's receipt of the denial of the claim
for benefits. The Committee will reexamine the claim and issue a final
decision within 60 days after the receipt of the appeal, unless special
circumstances require a reasonable extension of the 60-day period.
X. LOANS AND NONASSIGNABILITY
Due to the nonqualified status of the plan, loans cannot be permitted.
Unlike in the Qualified Plan, the issuance of a loan under this plan would
constitute "constructive receipt" of not just the amount actually taken as a
loan but of the full amount that could have been taken. In fact, even the
POSSIBILITY of being able to borrow funds from the plan would result in
constructive receipt. This result is undesirable because under the Internal
Revenue Code a benefit becomes currently taxable when constructive receipt
occurs even if the individual has not yet actually received the benefit. As
a result, the existence of a loan provision would prevent participants from
deferring taxation on the voluntary deferral allocations they make to the
plan.
All benefit payments, including hardship withdrawals (see Section VIII),
will be net of applicable tax withholding.
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Except as otherwise provided in Subsection VII.1. and subject to any
applicable tax withholding, no benefit under the plan will be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any such action will be void for all purposes of
the plan. No benefit will in any manner be subject to the debts, contracts,
liabilities, engagements or torts of any person, nor shall it be subject to
attachments or other legal process for or against any person, except to such
extent as may be required by law or by the provisions of Subsection VII.1.
XI. TAX EFFECTS OF PLAN DISTRIBUTIONS
Participants should not solely rely on this information and should consult
the Internal Revenue Service or their tax advisor when considering a
distribution under the plan to determine the most appropriate tax planning
under their circumstances. Neither the Companies nor the Committee can
provide participants with tax advice.
Due to the nonqualified status of the plan, the full amount of each
participant's distribution will be taxable as ordinary income in the year it
is received. Because the distribution received from the plan is considered
the payment of compensation that has been deferred, federal and possibly
state withholding will apply.
Distributions from the plan will NOT BE ELIGIBLE FOR ROLLOVER into any
qualified plan, nonqualified plan or Individual Retirement Arrangement
(IRA). Distributions will also not be subject to the excise tax on excess
distributions and the 10% tax on early distributions from qualified plans.
XII. AMENDMENT OR TERMINATION OF PLAN
Butler may amend or terminate the plan at any time by resolution of its
Board of Directors, provided that any benefits accrued by participants under
the plan before the effective date of the applicable amendment or
termination may not be reduced by such amendment or termination without the
participant's consent. Consequently, in the event of such amendment or
termination, while future allocations under the plan may be reduced or
eliminated, the current account balances will not be reduced without the
participant's consent.
XIII. COMMITTEE
The plan is administered by the Benefit Plan Administrative Committee (the
"Committee") consisting of one or more persons appointed by the Board of
Directors of Butler. Any member of the Committee may resign by delivering
his written resignation to the Board of Directors of Butler and to the
Committee. Vacancies in the Committee shall be filled by the Board of
Directors of Butler. In the absence of a Committee, Butler shall serve as
the Committee and in such case all references to the Committee shall be
considered references to Butler.
The Committee will have the power, right and duty, in its complete
discretion, to select the employees who will be eligible to participate in
the plan, to determine the investment alternatives to be offered under the
plan and the precise indices and/or funds to be selected as performance
measurements for each such deemed investment alternative, to determine all
benefits, including factual questions relating to payment of benefits and
eligibility for benefits, to determine other rights of participants and
beneficiaries under the plan, and to interpret the provisions of the plan.
The Committee from time to time may, in its discretion, adopt rules,
regulations and procedures with respect to the administration of the plan
and the eligibility for and payment of benefits under
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the plan which are consistent with the provisions of the plan and may amend
any and all rules, regulations and procedures previously established. The
Committee from time to time may delegate the performance of any part or all
of its duties under the plan as it considers desirable to such persons or
persons as it may select.
XIV. TRUSTEE
The Trustee of a rabbi trust shall be appointed by the Board of Directors of
Butler.
XV. GENERAL PROVISIONS
1. NO PERSONAL LIABILITY
To the extent permitted by law, no person (including the Committee or any
present or former director, officer or employee of the Companies) shall
be personally liable for any act done or omitted to be done in good faith
in the administration of the plan.
2. FINAL DECISIONS
Any ruling, regulation, procedure, interpretation or decision of the
Committee which is not inconsistent with the terms of this plan, shall be
final, conclusive and binding upon all persons affected by it.
3. APPLICABLE LAW; SEVERABILITY
The plan shall be construed in accordance with the laws of the State of
New Jersey. If any provision of the plan shall be illegal or invalid for
any reason, such illegality or invalidity shall not affect the remaining
provisions of the plan, and the plan shall be enforced as if the invalid
provisions had never been set forth therein.
4. SUCCESSORS
The plan is binding on all persons entitled to benefits under the plan,
and their respective heirs and legal representatives, on the Committee
and its successors and on the Companies and each of their successors,
whether by way of merger, consolidation, purchase or otherwise.
5. ACTION BY THE COMPANIES
Any action required or permitted of any of the Companies under the plan
may be taken by or performed by any director, officer or employee duly
authorized by such Company.
6. DESIGNATION OF BENEFICIARIES
Each participant from time to time may name any person (who may be named
concurrently, contingently or successively) to whom the participant's
benefits under the plan are to be paid if the participant dies before he
receives all of such benefits. Each such beneficiary designation will
revoke all prior designations by the participant, shall not require the
consent of any previously named beneficiary, shall be in a form
prescribed by the Committee, and will be effective only when filed with
the Committee during the participant's lifetime. If a participant
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fails to designate a beneficiary before his death, as provided above, or
if the beneficiary designated by a participant dies before the date of
the participant's death, the Committee shall pay the participant's
benefits to the participant's surviving spouse or in the absence of a
surviving spouse the benefits shall be paid to the participant's estate.
7. FACILITY OF PAYMENT
When a person entitled to benefits under the plan is under a legal
disability or, in the Committee's opinion, is in any way incapacitated so
as to be unable to manage his affairs, the Committee may direct the
payment of benefits to such person's legal representative, or to a
relative or friend of such person for such person's benefit, or the
Committee may direct the application of such benefits for the benefit of
such person in such manner as the Committee considers advisable. Any
payment made in accordance with the preceding sentence shall be a full
and complete discharge of any liability for such payment under the plan.
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FIRST AMENDMENT
OF
BUTLER SERVICE GROUP, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
WHEREAS, Butler Service Group, Inc. ("Butler") has established and
maintains the Butler Service Group, Inc. Supplemental Executive Retirement
Plan (the "plan");
WHEREAS, amendment of the plan now is considered desirable;
NOW, THEREFORE, by virtue and in exercise of the power reserved to
Butler by Section XII of the plan, and pursuant to the authority delegated to
the undersigned officers by resolution of its Board of Directors, the plan be
and is amended in the following particulars:
1. By substituting for the name of the plan wherever such name
appears in the plan the name "Butler International, Inc. Supplemental Executive
Retirement Plan".
2. By substituting for the phrase "parent, subsidiaries and
affiliates" in the first sentence of Section I of the plan the phrase "parent
and subsidiaries".
3. By substituting for the first sentence of Section I of the plan
the following:
"Butler International, Inc. (`Butler') has adopted and maintains the Butler
International, Inc. Supplemental Executive Retirement Plan (the `plan') in
order to offer participation in the plan to certain eligible employees of
Butler and its subsidiaries (collectively referred to as `the Companies'
except where the context clearly indicates otherwise)."
4. By adding the following sentence immediately after the second
sentence of Section I.2(c) of the plan as a part thereof:
"Notwithstanding the preceding two sentences, the Committee, in its sole
discretion, may waive the six-month waiting period for any of these
candidates in order to permit immediate participation under the plan."
5. By adding the following sentence immediately after the tenth
sentence of Section III of the plan as a part thereof:
"Notwithstanding the preceding provisions of this Section III, a
participant's deferral rates or deferral amounts shall be reduced by the
Committee, in its sole discretion, to the extent necessary to provide the
participant with sufficient compensation to satisfy his employment tax
deductions, wage withholding and any other payroll deductions."
6. By substituting for Section IV of the plan the following:
"Funds may be deposited in a special trust commonly known as a `rabbi trust'
with an independent third-party trustee for the purpose of accumulating funds to
satisfy obligations incurred by Butler (or, prior to January 1, 1999, the
Companies) under the plan. This irrevocable arrangement will severely restrict
the Companies' access to the funds (except to the extent that the rabbi trust
may purchase Butler
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International, Inc. stock directly from Butler under one of the benchmark
investment fund alternatives made available by the Committee pursuant to Section
V), and thus will be designed so that the funds will solely be used to provide
for payment of the benefits due to the participants under all circumstances
except as described in the following paragraph. As a result, the rabbi trust
will be designed to prevent the participant's deferrals from being available to
hostile management in the event of a change of control in the Companies.
However, in the event of insolvency or bankruptcy of Butler (or, prior to
January 1, 1999, of any of the Companies), the assets of the rabbi trust may
become available to the general creditors of Butler (or, prior to January 1,
1999, such insolvent Company).
Neither this plan nor any action taken pursuant to the terms of this plan shall
be considered to create a fiduciary relationship between the Companies and the
plan participants or any other persons, or to establish a trust in which the
assets are beyond the claims of any creditor of the Companies. Notwithstanding
the preceding provisions of this Section IV, nothing herein shall require Butler
(or, prior to January 1, 1999, the Companies) to segregate or set aside any
funds or other property for the purpose of paying any benefits under the plan.
Benefits shall be paid from assets which shall continue, for all purposes, to be
a part of the general, unrestricted assets of Butler (or, prior to January 1,
1999, the Companies). The obligation of Butler (or, prior to January 1, 1999,
the Companies) hereunder shall be an unfunded and unsecured promise to pay money
in the future.
The assets of the rabbi trust will be invested by the Trustee in accordance with
the investment policy selected by Butler. Butler has total discretion in
determining the appropriate investments under current market conditions and its
expressed investment objectives. It is anticipated that funds will be invested
in either mutual funds, managed money funds or Butler International, Inc. stock
that, when viewed as a whole, will provide a general portfolio which might
include common stocks and other equity securities, long-term bonds and short and
intermediate-term fixed-income instruments such as U.S. Treasury bills and
notes, corporate notes, certificates of deposit, money market funds, commercial
paper, etc. It is anticipated that the investment objective of the plan will be
long-term appreciation.
Notwithstanding the existence of the rabbi trust, plan benefits are payable as
they become due. In other words, the participant will be entitled to the full
value of his accounts determined in accordance with Sections III. and V.
regardless of whether or not Butler (or, prior to January 1, 1999, the
Companies) invests assets in a similar manner.
Butler is not bound to follow the participant's investment instructions in
determining how Butler actually invests assets. Nevertheless, the participant's
investment instructions will be used to measure any deemed investment earnings
or losses that are credited to the participant's account balances and thus
determine the amount that will actually be payable to the participant when he
becomes eligible to receive payment."
7. By substituting for Section V of the plan the following:
"Investment experience will be credited or debited to a participant's account
balance in accordance with his investment elections based on the actual earnings
of the benchmark investment fund alternatives made available to the participant
by the Committee. From time to time, the Committee shall select the benchmark
investment fund alternatives for purposes of determining the rate of return on
amounts deemed invested in accordance with the terms of the plan. The Committee
will notify participants in writing prior to the beginning of each plan year and
at such other times as the Committee deems necessary or desirable of the
benchmark investment fund alternatives available under the plan. The Committee
may change, add or remove benchmark investment fund alternatives on a
prospective basis at any time and in any manner it deems appropriate. There can
be no guarantee or assurances that any benchmark investment fund alternative
will continue to be made available.
THE FAIR MARKET VALUE OF EACH BENCHMARK INVESTMENT FUND SHALL BE DETERMINED BY
THE COMMITTEE.
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IT SHALL REPRESENT THE FAIR MARKET VALUE OF THE ACTUAL FUND USED FOR MEASUREMENT
PURPOSES, LESS ANY EXPENSES ASSOCIATED WITH THE ADMINISTRATION OF THE FUND.
A participant may elect to have his accounts reflect the investment experience
of any combination of the benchmark investment fund alternatives by designating
all or any portion of his accounts in whole percentages (up to a maximum of
100%) to be deemed to be invested in such benchmark investment fund
alternatives. The same percentage shall be applied equally to each of the
participant's accounts. A participant may change his `investment' objective for
future deferrals and/or `transfer' amounts between benchmark investment fund
alternatives with respect to his existing account balance as of any January 1
provided he gives 30 days' advance written notice to the Committee.
NOTHING IN THE PLAN REQUIRES BUTLER (OR, PRIOR TO JANUARY 1, 1999, THE
COMPANIES) TO ACTUALLY ESTABLISH OR INVEST ASSETS OF THIS NONQUALIFIED PLAN IN
ANY OF THE BENCHMARK INVESTMENT FUNDS. THESE BENCHMARK INVESTMENT FUNDS ARE
USED SOLELY FOR THE PURPOSE OF ATTRIBUTING INVESTMENT EXPERIENCE TO PARTICIPANT
ACCOUNTS. ALL PLAN BENEFITS WILL BE PAID FROM THE RABBI TRUST FUND AND/OR THE
GENERAL FUNDS OF BUTLER (OR, PRIOR TO JANUARY 1, 1999, THE COMPANIES) AND NO
OTHER SPECIAL OR SEPARATE FUND(S) WILL BE ESTABLISHED AND NO OTHER SEGREGATION
OF ASSETS WILL BE MADE TO ASSURE THE PAYMENT OF SUCH BENEFITS.
TO THE EXTENT THAT ANY PERSON ACQUIRES A RIGHT TO RECEIVE BENEFITS UNDER THIS
PLAN, SUCH RIGHT WILL BE NO GREATER THAN THE RIGHT OF AN UNSECURED CREDITOR OF
BUTLER (OR, PRIOR TO JANUARY 1, 1999, THE COMPANIES). AS A RESULT, THE PLAN
WILL CONSTITUTE A NONQUALIFIED DEFERRED RETIREMENT PLAN WHICH, IN ACCORDANCE
WITH ERISA (EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974) MUST BE `UNFUNDED
AND MAINTAINED BY AN EMPLOYER PRIMARILY FOR THE PURPOSE OF PROVIDING DEFERRED
COMPENSATION FOR A SELECT GROUP OF MANAGEMENT OR HIGHLY COMPENSATED EMPLOYEES'.
IT IS INTENDED THAT THE EXISTENCE OF THE RABBI TRUST DESCRIBED IN SECTION IV.
WILL NOT VIOLATE THE REQUIREMENT THAT THE PLAN BE `UNFUNDED' FOR PURPOSES OF
ERISA."
8. By substituting for the first two sentences of Section VI of the
plan the following:
"The participant's accounts will be valued as of each business day of the plan
year at which time they will be proportionately
1. adjusted upward or downward to reflect the deemed investment
experience based on the benchmark investment fund alternatives elected
by the participant in accordance with Section V; and
2. reduced to reflect any applicable administrative expenses.
In addition, on a daily basis, the participants' accounts will be directly
adjusted to reflect all other applicable transactions during the plan year
attributable to such accounts including, but not limited to, any
allocations and distributions."
9. By deleting and not replacing the phrase "the valuation date next
subsequent to" from the first sentence of Section VII.2(a) of the plan.
10. By substituting for the second sentence of Section VII.2(b) of the
plan the following:
"Distribution of a participant's Fixed Period Account, adjusted for
earnings and losses attributable thereto, shall be paid to him as soon as
administratively practicable following the specific future payment date
irrevocably specified by the participant."
18
<PAGE>
11. By substituting for Example #2 of Section VII.2(b) of the plan the
following:
"Upon joining the plan on July 1, 1995, Participant B elects to establish a
Fixed Period Account with a payment date of July 1, 2000. The participant
then terminates employment with Butler on August 1, 1999. At that time the
participant has $6,000 in the Fixed Period Account and $15,000 in the
Retirement Account. The $6,000 in the Fixed Period Account will be
transferred to the Retirement Account thereby resulting in a new Retirement
Account balance of $21,000, which will be paid out as soon as
administratively possible following August 1, 1999, net of any applicable
income tax withholding."
12. By deleting and not replacing the fourth sentence of Section
VIII.1 of the plan.
13. By substituting for Section XII of the plan the following:
"XII. AMENDMENT OR TERMINATION OF PLAN
Butler hereby reserves the right to amend the plan from time to time or to
terminate the plan, provided that any benefits accrued by participants
under the plan before the effective date of the applicable amendment or
termination may not be reduced by such amendment or termination without the
participant's consent. Any amendment or termination of the plan will be by
resolution of the Board of Directors of Butler or any committee appointed
by the Board of Directors to whom such authority has been delegated.
Notwithstanding the preceding sentence, the Committee may amend the plan in
the following respects without the approval of the Board of Directors of
Butler: (i) amendments required by law; (ii) amendments that relate to the
administration of the plan and that do not materially increase the cost of
the plan; and (iii) amendments that are designed to resolve possible
ambiguities, inconsistencies, or omissions in the plan and that do not
materially increase the cost of the plan. In order to clarify the right
reserved by Butler to amend or terminate the plan and consistent with past
practice and procedure under the plan, while future allocations under the
plan may be reduced or eliminated, no amendment, including an amendment to
terminate the plan, shall reduce the value of a participant's vested
account balances to less than the amount (as subsequently adjusted for
earnings and losses attributable thereto) he would be entitled to receive
if he had resigned from the employ of all of the Companies on the day of
the amendment."
14. By substituting for Section XV.4 of the plan the following:
"4. SUCCESSORS
The plan is binding on all persons entitled to benefits under the
plan, and their respective heirs and legal representatives, on the
Committee and its successors and on Butler and its successors, whether
by way of merger, consolidation, purchase or otherwise."
Particulars 2 and 5 shall be effective February 1, 1995; particular 4 shall
be effective January 1, 1998; particulars 1, 6, 7, 8, 9 and 12 shall be
effective December 1, 1998; and the remaining particulars shall be
effective January 1, 1999.
19
<PAGE>
IN WITNESS WHEREOF, Butler Service Group, Inc. has caused this
amendment to be executed by its duly authorized officers this 15 day of
December, 1998.
BUTLER SERVICE GROUP, INC.
By: /s/ Michael C. Hellriegel
----------------------------------------
Its: Sr. Vice President - Finance
----------------------------------------
ATTEST:
By: /s/ Warren F. Brecht
---------------------------------
Its: /s/ Secretary
---------------------------------
20
<PAGE>
EXHIBIT 4.2
EXHIBIT 4.2
TRUST UNDER BUTLER INTERNATIONAL, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(Amended and Restated as of January 1, 1999)
This Trust Agreement made this 1st day of January, 1999, by and
between Butler Service Group, Inc. ("Butler Service Group"), Butler
International, Inc. ("Butler") and PRUDENTIAL TRUST COMPANY (hereinafter called
the "Trustee");
WHEREAS, the Butler International, Inc. Supplemental Executive
Retirement Plan (formerly known as the Butler Service Group, Inc. Supplemental
Executive Retirement Plan) (the "Plan") has been maintained by Butler Service
Group and certain of its subsidiaries prior to January 1, 1999 and, effective
January 1, 1999, is maintained by Butler for the benefit of eligible employees
of Butler and its subsidiaries listed on Appendix A hereto (Butler and those
entities listed on Appendix A hereto are referred to herein collectively as the
"Companies" and individually as a "Company");
WHEREAS, the Companies have established this Trust (hereinafter called
the "Trust") for the benefit of the Plan participants and their beneficiaries by
agreement made effective February 1, 1995, and Butler (or, prior to January 1,
1999, the Companies) has contributed or shall contribute to the Trust assets
that shall be held therein, subject to the claims of Butler's creditors in the
event of Butler's Insolvency, as herein defined, until paid to Plan participants
and their beneficiaries in such manner and at such times as specified in the
Plan;
(d) WHEREAS, Trustee is willing to accept appointment as successor
trustee under the Trust heretofore established and to hold and administer such
Trust assets pursuant to the terms of this Trust Agreement; and
(e) WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the Plan
as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of 1974,
as amended;
(f) WHEREAS, it is the intention of Butler to make contributions to
the Trust to provide itself with a source of funds to assist it in the meeting
of its liabilities under the Plan;
NOW, THEREFORE, the parties do hereby agree that the Trust shall be
comprised, held and disposed of as follows:
Section Establishment Of Trust
----------------------
There is hereby deposited with Trustee in trust an amount which shall
become the principal of the Trust to be held, administered and disposed of by
Trustee as provided in this Trust Agreement.
The Trust hereby established shall be irrevocable.
The Trust is intended to be a grantor trust, of which Butler is the
grantor, within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of Butler and shall be used exclusively for
the uses and purposes of Plan participants and general creditors as herein set
forth. Plan participants and their beneficiaries shall have no preferred claim
on, or
1
<PAGE>
any beneficial ownership interest in, any assets of the Trust. Any rights
created under the Plan and this Trust Agreement shall be mere unsecured
contractual rights of Plan participants and their beneficiaries against Butler.
Any assets held by the Trust will be subject to the claims of a Butler's general
creditors under federal and state law in the event of Insolvency, as defined in
Section 3(a) herein.
Butler, in its sole discretion, may at any time, or from time to time,
make additional deposits of cash or other property in trust with Trustee to
augment the principal to be held, administered and disposed of by Trustee as
provided in this Trust Agreement. Neither Trustee nor any Plan participant or
beneficiary shall have any right to compel such additional deposits.
Section Payments to Plan
----------------
Participants and Their Beneficiaries.
------------------------------------
Butler shall deliver to Trustee a schedule (the "Payment Schedule")
that indicates the amounts payable in respect of each Plan participant (and his
or her beneficiaries), that provides a formula or other instructions acceptable
to Trustee for determining the amounts so payable, the form in which such amount
is to be paid (as provided for or available under the Plan), and the time of
commencement for payment of such amounts. Except as otherwise provided herein,
Trustee shall make payments to the Plan participants and their beneficiaries in
accordance with such Payment Schedule. Trustee shall make provision for the
reporting and withholding of any federal, state or local taxes that may be
required to be withheld with respect to the payment of benefits pursuant to the
terms of the Plan. Trustee shall pay amounts withheld to the appropriate taxing
authorities or determine that such amounts have been reported, withheld and paid
by Butler.
The entitlement of a Plan participant or his or her beneficiaries to
benefits under the Plan shall be determined by Butler or such party as it shall
designate under the Plan, and any claim for such benefits shall be considered
and reviewed under the procedures set out in the Plan.
Butler may make payment of benefits directly to Plan participants or
their beneficiaries as they become due under the terms of the Plan. Butler
shall notify Trustee of its decision to make payment of benefits directly prior
to the time amounts are payable to participants or their beneficiaries. In
addition, if the principal of the Trust, and any earnings thereon, are not
sufficient to make payments of benefits in accordance with the terms of the
Plan, Butler shall make the balance of each such payment as it falls due.
Trustee shall notify Butler where principal and earnings are not sufficient.
Section Trustee Responsibility Regarding Payments
-----------------------------------------
to Trust Beneficiary When Butler is Insolvent.
---------------------------------------------
Trustee shall cease payment of benefits to Plan participants and their
beneficiaries if Butler is Insolvent. Butler shall be considered "Insolvent"
for purposes of this Trust Agreement if (i) Butler is unable to pay its debts as
they become due, or (ii) Butler is subject to a pending proceeding as a debtor
under the United States Bankruptcy Code.
At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of Butler under federal and state law as set forth
below.
The Board of Directors and the Chief Executive Officer of Butler shall
have the duty to inform Trustee in writing of Butler's Insolvency. If a person
claiming to be a creditor of Butler alleges in writing to Trustee that Butler
has become Insolvent, Trustee shall determine whether Butler is Insolvent and,
pending such determination, Trustee shall discontinue payment of benefits to
Plan participants or their beneficiaries.
2
<PAGE>
Unless Trustee has actual knowledge of Butler's Insolvency, or has
received notice from Butler or a person claiming to be a creditor alleging that
Butler is Insolvent, Trustee shall have no duty to inquire whether Butler is
Insolvent. Trustee may in all events rely on such evidence concerning Butler's
solvency as may be furnished to Trustee and that provides Trustee with a
reasonable basis for making a determination concerning Butler's solvency.
Evidence upon which Trustee may rely as aforesaid includes but is not limited to
written notice from any of Butler's Board of Directors, Chief Executive Officer,
a Senior Vice President or General Counsel, its current independent accountant
or outside attorney, or an accountant or outside attorney employed by Trustee,
or written notice of the appointment of a receiver of any of Butler's property
by any court in the United States.
If at any time Trustee has determined that Butler is Insolvent,
Trustee shall discontinue payments to Plan participants or their beneficiaries
and shall hold the assets of the Trust for the benefit of Butler's general
creditors and, except as otherwise provided in Section 3(b)(4) below, Trustee
shall distribute the assets of the Trust only as directed by order of the
bankruptcy court or the court appointing the receiver aforesaid. Nothing in
this Trust Agreement shall in any way diminish any rights of Plan participants
or their beneficiaries to pursue their rights as general creditors of Butler
with respect to benefits due under the Plan or otherwise.
Trustee shall resume the payment of benefits to Plan participants or
their beneficiaries in accordance with Section 2 of this Trust Agreement only
after Trustee has determined that Butler is not Insolvent (or is no longer
Insolvent). Trustee may rely fully on any one of the following in determining
that Butler is not Insolvent (or is no longer Insolvent): a discharge of Butler
from federal bankruptcy proceedings; a written notice from Butler's Board of
Directors, Chief Executive Officer, a Senior Vice President or General Counsel,
its current independent accountant or outside attorney or an accountant or
attorney employed by Trustee; or the termination of receivership referred to in
Section 3(b)(2) above.
Provided that there are sufficient assets, if Trustee discontinues the
payment of benefits from the Trust pursuant to Section 3(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan for the period
of such discontinuance, less the aggregate amount of any payments made to Plan
participants or their beneficiaries by Butler in lieu of the payments provided
for hereunder during any such period of discontinuance.
Section Payments to Butler.
-------------------
Except as provided in Section 3 hereof, Butler shall have no right or
power to direct Trustee to return to Butler or to divert to others any of the
Trust assets before all payment of benefits have been made to Plan participants
and their beneficiaries pursuant to the terms of the Plan.
Section Investment Authority.
---------------------
Trustee may invest in securities (including stock or rights to acquire
stock) or obligations issued by Butler. Notwithstanding the preceding, Trustee
shall purchase and sell securities or other obligations issued by Butler only as
from time to time directed by Butler. Except to the extent to which authority
with respect to the management of Trust assets has been allocated to others in
accordance with this Trust Agreement, all rights associated with assets of the
Trust shall be exercised by Trustee or the person designated by Trustee, and
shall in no event be exercisable by or rest with Plan participants, except that
voting rights and dividend rights with respect to Trust assets will be exercised
by Butler. In this regard, the authority to direct investments may be allocated
to one or more investment advisers or to an investment committee pursuant to
Section 5(b) of this Trust Agreement and the authority to hold assets of the
Trust may be allocated to one or more custodians pursuant to Section 5(c) of
this Trust Agreement.
3
<PAGE>
Butler may from time to time appoint one or more professional
investment advisers other than Trustee or an investment committee established by
Butler to manage all or any portion of the assets of the Trust. Any such
appointment shall be in writing and shall delineate the duties,
responsibilities, and liabilities of the investment adviser or investment
committee. Butler shall direct Trustee to, and Trustee will, if so directed in
writing by Butler, segregate the portion of the Trust assets subject to
management by an investment adviser or investment committee. Upon written
notice to Trustee of the appointment of an investment adviser or investment
committee, the investment adviser or investment committee shall be authorized to
direct Trustee regarding the investment and reinvestment of the portion of the
assets of the Trust subject to management by the investment adviser or
investment committee and Trustee shall receive, hold and transfer assets
purchased or sold by the investment adviser or investment committee in
accordance with its directions. An investment adviser or investment committee
shall have complete investment responsibility with respect to the assets of the
Trust with respect to which it has been appointed as investment adviser or
investment committee, and, except as otherwise provided by law, Trustee shall
have no obligation as to the investment of such assets during the period they
are subject to management by an investment adviser or investment committee. The
appointment of an investment adviser or investment committee shall continue in
effect until Trustee receives written notice to the contrary from Butler or the
investment adviser or investment committee. An investment adviser may resign at
any time upon thirty days prior written notice to Butler and Trustee, and Butler
may remove an investment adviser at any time upon prior written notice to the
investment adviser and Trustee.
Butler may appoint one or more third parties, such as a bank trust
department or other party that may be granted corporate trustee powers under
state law, as "custodian" of all or any portion of the assets of the Trust. In
such event, Butler shall direct Trustee to enter into an appropriate custodial
agreement with the third party appointed as custodian of the Trust assets and
delegating Trustee's powers with respect to the management of such assets to the
custodian. Upon such an appointment Trustee shall transfer appropriate assets
of the Trust to the custodian and the custodian shall have responsibility for
the holding and administration of such assets of the Trust, as agent for the
Trustee, until its employment as custodian is terminated, at which time the
custodian shall return all assets of the Trust to Trustee. Notwithstanding
anything to the contrary to this Section 5(c), the custodian shall hold and
administer such assets of the Trust subject to and in accordance with this Trust
Agreement and shall not deliver any Trust assets held in any custodial account
to any person except upon the express written direction of Trustee. Each
custodian shall maintain the records and accounts and shall submit to the
appropriate persons the periodic reports otherwise required of Trustee with
respect to the portion of the Trust held by the custodian.
Trustee shall have the right and power at any time and from time to
time (i) to enter into one or more contracts with any one or more legal reserve
life insurance companies, (ii) to transfer to such insurance company such
portion of the Trust assets in accordance with the terms of any such contract,
and (iii) to hold any such contract as part of the Trust. Trustee shall have
the right and power at any time and from time to time, in its sole discretion,
to (i) request any information from any such insurance company necessary or
appropriate to perform its duties under this Trust Agreement, or (ii) amend,
modify or terminate any such contract. The Trustee shall not exercise any of
the foregoing powers, rights or privileges except at the direction of Butler.
In all respects any insurance company issuing any contract as described above
shall deal with the Trustee as the absolute owner of any such contract and shall
not be required to inquire as to the authority of the Trustee to act with regard
to such contract. Any such insurance company may accept and rely upon any
written notice, instruction, direction, certificate or other communication from
the Trustee which is signed by an officer of the Trustee.
Butler shall have the right and power at anytime and from time to time
in its sole discretion, to substitute assets of equal fair market value for any
asset held by the Trust. This right is exercisable by Butler in a non-fiduciary
capacity without the approval or consent of any person in a fiduciary capacity.
4
<PAGE>
Section Disposition of Income.
----------------------
During the term of this Trust, all income received by the Trust, net
of expenses and taxes, shall be accumulated and reinvested.
Section Accounting by Trustee.
----------------------
Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between
Butler and Trustee. Within 30 days following the close of each calendar year
and within 30 days after the removal or resignation of Trustee, Trustee shall
deliver to Butler a written account of its administration of the Trust during
such year or during the period from the close of the last preceding year to the
date of such removal or resignation, setting forth all investments, receipts,
disbursements and other transactions effected by it, including a description of
all securities and investments purchased and sold with the cost or net proceeds
of such purchases or sales (accrued interest paid or receivable being shown
separately), and showing all cash, securities and other property held in the
Trust at the end of such year or as of the date of such removal or resignation,
as the case may be.
Section Responsibility of Trustee.
--------------------------
Trustee shall act with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent person acting in like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims, provided, however, that Trustee shall incur
no liability to any person for any action taken pursuant to a direction, request
or approval given by Butler which is contemplated by, and in conformity with,
the terms of the Plan or this Trust and is given in writing by Butler event of a
dispute between Butler and a party, Trustee may apply to a court of competent
jurisdiction to resolve the dispute.
With the prior written consent of Butler, Trustee may consult with
legal counsel (who may also be counsel for Butler generally) with respect to any
of its duties or obligations hereunder.
With the prior written consent of Butler, Trustee may hire agents,
accountants, actuaries, investment advisers, financial consultants, or other
professionals to assist it in performing any of its duties or obligations
hereunder.
Trustee shall have, without exclusion, all powers conferred on
Trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is held as an asset of the Trust,
Trustee shall have no power to name a beneficiary of the policy other than the
Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, or to loan to any person the
proceeds of any borrowing against such policy.
Notwithstanding any powers granted to Trustee pursuant to this Trust
Agreement or to applicable law, Trustee shall not have any power that could give
this Trust the objective of carrying on a business and dividing the gains
therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
Indemnification. In consideration of Trustee's agreeing to enter into
---------------
this Trust Agreement, Butler hereby agrees to hold harmless Prudential Trust
Company, as Trustee under this Trust Agreement, and its directors, officers, and
employees, from and against all amounts, including without limitation taxes,
expenses (including reasonable counsel fees), liabilities, claims, damages,
actions, suits or other charges, incurred by or assessed against Prudential
Trust Company, as Trustee, or its directors, officers, or employees, (i) as a
direct or indirect result of anything done in good faith, or alleged to have
been done,
5
<PAGE>
by or on behalf of Prudential Trust Company in reliance upon the directions of
Butler, or any person or committee authorized to act on behalf of Butler, or
anything omitted to be done in good faith, or alleged to have been omitted, in
the absence of such directions or (ii) as a direct or indirect result of the
failure of Butler or any person or committee (other than the Trustee, its agents
or affiliates, or its or their employees, directors or officers) to adequately,
carefully or diligently discharge its responsibilities under the Plan, this
Trust Agreement, or applicable Department of Labor or Treasury regulations or
rulings. Butler further agrees that the undertakings made by it in this Section
8(f) shall be binding on its successors or assigns and shall survive
termination, amendment or restatement of this Trust Agreement, or the
resignation or removal of the Trustee.
Section Compensation and Expenses of Trustee.
-------------------------------------
Butler shall from time to time pay taxes of any and all kinds
whatsoever which at any time are lawfully levied or assessed upon or become
payable in respect of the Trust, the income or any property forming a part
thereof, or any security transaction pertaining thereto. To the extent that any
taxes lawfully levied or assessed upon the Trust are not paid by Butler, the
Trustee shall pay such taxes out of the Trust. The Trustee may contest the
validity of taxes, at the direction of, and in any manner deemed appropriate by,
Butler or its counsel, but only at Butler's expense and only if the Trustee has
received an indemnity bond or other security satisfactory to it to pay such
expenses. Alternatively, Butler may contest the validity of any such taxes.
Butler shall pay all administrative and Trustee's fees and expenses,
including without limitation fees for services provided by persons appointed or
hired pursuant to Section 5, Section 8(b) or Section 8(c) above. If not so
paid, the fees and expenses shall be paid from the Trust.
Section Resignation and Removal of Trustee.
-----------------------------------
Trustee may resign at any time by written notice to Butler, which
shall be effective 30 days after receipt of such notice unless Butler and
Trustee agree otherwise.
Trustee may be removed by Butler on one days notice or upon shorter
notice accepted by Trustee.
Upon resignation or removal of Trustee and appointment of a successor
Trustee, all assets shall subsequently be transferred to the successor Trustee.
The transfer shall be completed within 10 days after receipt of notice of
resignation, removal or transfer, unless Butler extends the time limit.
If Trustee resigns or is removed, a successor shall be appointed, in
accordance with Section 11 hereof, by the effective date of resignation or
removal under paragraphs (a) or (b) of this section. If no such appointment has
been made, Trustee may apply to a court of competent jurisdiction for
appointment of a successor or for instructions. All expenses of Trustee in
connection with the proceeding shall be allowed as administrative expenses of
the Trust.
Section Appointment of Successor.
-------------------------
If Trustee resigns or is removed in accordance with Section 10(a) or
(b) hereof, Butler may appoint any third party, such as a bank trust department
or other party that may be granted corporate trustee powers under state law, as
a successor to replace Trustee upon resignation or removal. The appointment
shall be effective when accepted in writing by the new Trustee, who shall have
all of the rights and powers of the former Trustee, including ownership rights
in the Trust assets. The former Trustee shall execute any instrument necessary
or reasonably requested by Butler or the successor Trustee to evidence the
transfer.
6
<PAGE>
Section Amendment or Termination.
-------------------------
This Trust Agreement may be amended by a written instrument executed
by Trustee and Butler. Notwithstanding the foregoing, no such amendment shall
conflict with the terms of the Plan or shall make the Trust revocable.
The Trust shall not terminate until the date on which Plan
participants and their beneficiaries are no longer entitled to benefits pursuant
to the terms of the Plan. Upon termination of the Trust any assets remaining in
the Trust shall be returned to Butler.
Section Miscellaneous.
--------------
Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
Benefits payable to Plan participants and their beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment, garnishment,
levy, execution or other legal or equitable process.
This Trust Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
Any action with respect to the Plan or this Trust required or
permitted to be taken by Butler shall be by resolution of its Board of
Directors, by a duly authorized committee of its Board of Directors, or by a
person or persons authorized by resolution of its Board of Directors or such
Committee.
Until further notice from either party hereto, any notices delivered
pursuant to this Trust Agreement and all other communications shall be in
writing and shall be delivered, sent or transmitted to the persons at the
addresses and facsimile numbers set forth hereunder. All notices and other
communications shall be effective when received. The party seeking to rely on
notice having been given under this paragraph shall be responsible for
ascertaining its receipt.
For a Company or the Companies:
Butler International, Inc.
Attn: Corporate Secretary
110 Summit Avenue
P.O. Box 460
Montvale, New Jersey 07645
Facsimile No. 201-573-9148
For Trustee:
Prudential Trust Company
Attn: Assistant Secretary
30 Scranton Office Park
Scranton, PA 18507
Facsimile No.
This Trust Agreement between Butler Service Group, Butler and Trustee
contains the entire understanding between the parties with respect to its
subject matter and, as of the effective date of this Trust Agreement, it
supersedes and entirely replaces any and all prior agreements between Butler
Service Group and Trustee with respect to the subject matter of this Trust
Agreement.
7
<PAGE>
This Trust Agreement shall be binding upon and inure to the benefit of
the parties hereof and their heirs, successors, and assignees. This Trust
Agreement is not assignable by any party without the express written consent of
the other party.
Titles and captions used in this Trust Agreement are included for
convenience of reference only and in no way define or delimit any provisions or
otherwise alter the construction or effect.
Where the context permits, words in the masculine gender shall include
the feminine and neuter genders, the singular shall include the plural, and the
plural shall include the singular.
Each of the parties to this Trust Agreement hereby represents and
warrants that it is duly authorized and empowered to execute, deliver, and
perform this Trust Agreement.
This Trust Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all counterparts shall,
together, constitute only one agreement.
Section Effective Date.
--------------
The effective date of this Trust Agreement shall be January 1, 1999.
8
<PAGE>
IN WITNESS WHEREOF, Trustee, Butler Service Group and Butler have caused
this agreement to be signed by each of their duly authorized
representatives, as of the day and year first above written.
ATTEST BUTLER SERVICE GROUP, INC.
/s/ Warren F. Brecht By: /s/ Michael C. Hellriegel
- ----------------------------- ---------------------------------
Its: Secretary Its: Sr. Vice President - Finance
------------------------ --------------------------------
ATTEST BUTLER INTERNATIONAL, INC.
/s/ Warren F. Brecht By: /s/ Michael C. Hellriegel
- ----------------------------- ---------------------------------
Its: Secretary Its: Sr. Vice President - Finance
------------------------ --------------------------------
ATTEST PRUDENTIAL TRUST COMPANY,
as Trustee
/s/ Dan Arcure By: /s/ Michael G. Williamson
- ----------------------------- ---------------------------------
Its: V.P. & Assistant Secretary Its: VP & Comptroller
----------------------------- -----------------
9
<PAGE>
Appendix A to
Trust under Butler International, Inc.
Supplemental Executive Retirement Plan
--------------------------------------
BT, Inc.
Butler Technology Solutions, Inc.
Butler Airport Services, Inc.
Butler Services, Inc.
Butler Service Group, Inc.
1
<PAGE>
EXHIBIT 5
December 11, 1998
Butler International, Inc.
110 Summit Avenue
Montvale, NJ 07645
Gentlemen:
We refer to the registration, on a Registration Statement on Form S-8 (the
"Registration Statement") under the Securities Act of 1933, as amended, of
$2,000,000 of deferred compensation obligations (the "Obligations") of the
Company under the Company's Supplemental Executive Retirement Plan (the "Plan").
We have reviewed the Plan, the charter and the by-laws of the Company, corporate
proceedings of the Board of Directors relating to the Plan, and such other
documents, corporate records and questions of laws as we have deemed necessary
to the rendering of the opinions expressed below.
Based upon the foregoing, we are of the opinion that the Obligations, when
issued in accordance with the provisions of the Plan, will be valid and binding
obligations of the Company, enforceable in accordance with their terms, except
as may be limited by the effect of bankruptcy, insolvency, reorganization,
moratorium, and similar laws affecting the rights and remedies of creditors
generally, by the effect of general principles of equity (whether in an action
of law or a proceeding in equity), or by the effect of the laws of usury or
other laws or equitable principles relating to or limiting the interest rate
payable on indebtedness.
We express no opinion as to the laws of any jurisdiction other than the laws
of the State of New Jersey.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
McBreen, McBreen & Kopko
By: /s/ McBreen, McBreen & Kopko
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EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Butler International, Inc. on Form S-8 of our reports dated March 6, 1998,
appearing in and incorporated by reference in the Annual Report on Form 10-K of
Butler International, Inc. for the year ended December 31, 1997.
/s/ Deloitte & Touche LLP
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Parsippany, New Jersey
December 24, 1998
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