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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
{X} ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 1999
---------------------------------
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File Number 0-14951
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BUTLER INTERNATIONAL, INC. 401(k) PLAN
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(Full name of plan)
BUTLER INTERNATIONAL, INC.
--------------------------
(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)
Registrant's telephone number, including area code (201) 573-8000
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X . No .
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BUTLER INTERNATIONAL, INC.
401(k) PLAN
TABLE OF CONTENTS
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Page
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INDEPENDENT AUDITORS' REPORT 3
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of December 31,
1999 and 1998 4
Statement of Changes in Net Assets Available for Benefits for the year
ended December 31, 1999 5
Notes to Financial Statements 6-9
SUPPLEMENTAL SCHEDULE:
Schedule of Assets Held for Investment
Purposes at December 31, 1999 10
Supplemental schedules not included herein are omitted due to the absence
of conditions under which they are required.
EXHIBIT 1 - Independent Auditors' Consent 11
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INDEPENDENT AUDITORS' REPORT
Trustees
Butler International, Inc.
401(k) Plan
Montvale, New Jersey
We have audited the accompanying statements of net assets available for benefits
of the Butler International, Inc. 401(k) Plan ("the Plan") as of December 31,
1999 and 1998, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1999. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1999 and 1998 and the changes in net assets available for benefits for the year
ended December 31, 1999 in conformity with generally accepted accounting
principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes as of December 31, 1999 is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This schedule is the responsibility of
the Plan's management. Such schedule has been subjected to the auditing
procedures applied in our audit of the basic 1999 financial statements and, in
our opinion, is fairly stated in all material respects when considered in
relation to the basic financial statements taken as a whole.
/s/ Deloitte & Touche LLP
-------------------------
Parsippany, New Jersey
June 23, 2000
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BUTLER INTERNATIONAL, INC.
401(k) PLAN
<TABLE>
<CAPTION>
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
(In thousands)
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1999 1998
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<S> <C> <C>
ASSETS:
Investments at fair value / face value (Note F) $ 46,548 $ 42,888
Contributions receivable, employees 77 101
Contributions receivable, employer 371 657
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Total Assets 46,996 43,646
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LIABILITIES:
Accrued expenses - 15
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Total Liabilities - 15
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NET ASSETS AVAILABLE FOR BENEFITS $ 46,996 $ 43,631
================== ==================
</TABLE>
See notes to financial statements.
4
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BUTLER INTERNATIONAL, INC.
401(k) PLAN
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1999
(In thousands)
-----------------------------------------------------------------------------------------------------------------
<S> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Contributions from employees $ 7,249
Contributions from employer 1,671
Investment income 432
Net realized and unrealized appreciation in
fair value of investments 3,448
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Total Additions 12,800
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DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Distributions to participants 9,334
Investment and administrative management fees 101
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Total Deductions 9,435
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NET INCREASE IN NET ASSETS AVAILABLE FOR
BENEFITS 3,365
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR 43,631
-----------------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $ 46,996
=================
</TABLE>
See notes to financial statements.
5
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BUTLER INTERNATIONAL, INC.
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
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A. PLAN DESCRIPTION
The following description of the Butler International, Inc. 401(k) Plan
("Plan") provides only general information. Participants should refer to the
plan document for a more detailed description.
General:
In November 1989, Butler Service Group, Inc. ("the Company")
established the 401(k) Plan which was adopted by its wholly-owned subsidiaries.
The Plan is a continuation of the Butler Service Group, Inc. Investment Savings
Plan and is designed to provide an incentive for employees of the Company to
save regularly through payroll deductions and possible matching contributions by
the Company. All employees are eligible to participate in the Plan. The total
number of participants with account balances were 2,486 and 2,674 at December
31, 1999 and 1998, respectively.
Contributions:
A participant in the Plan has the choice of saving on a before-tax
basis, by payroll deduction, any amount from 1% to 20% (in whole percentages) of
total payroll each payroll period, an "elective deferral contribution." By law,
the elective deferral contribution, per participant, under this Plan and all
similar plans is limited during any calendar year. In addition, the elective
deferral contribution for a highly compensated employee (an employee earning
over $80,000 for 1999), during the year relative to the elective deferral
contributions of other participants of the Plan could exceed the amount
permitted by law. Should this occur, the elective deferral contributions of the
highly compensated employees may be reduced during the Plan year to the extent
necessary to satisfy the legal limitation or any excess deferral contributions
may be recharacterized or refunded after the end of the Plan year. Refunds to
highly compensated employees for the Plan years 1999 and 1998 were $142,134 and
$312,492, respectively.
The Company is not required to make any contributions to the Plan, but
the Company may decide, at its sole discretion, to make a matching contribution
for a Plan year. For any Plan year that the Company decides to make a matching
or partial contribution, it will deposit in the Butler International, Inc. Stock
Fund an amount which will be allocated in proportion to the elective deferral
contributions made by the Plan participants for that Plan year. In 1999 and 1998
the Company made contributions of approximately $1,129,000 and $1,014,000,
respectively, to the Plan in accordance with a customer contract, which was
funded by the customer. In 1999 and 1998, the Company made matching
contributions of approximately $544,000 and $543,000, respectively.
Participants may request changes to their elective deferral
contribution rate or discontinue their contributions through the Plan's voice
response system. The changes or discontinuance will be effective as soon as it
is administratively feasible.
Participant Accounts:
Each participant's account is credited with the participant's
contributions and allocations of (a) the Company's contribution and (b) Plan
earnings, and charged with an allocation of administrative expenses. The benefit
to which a participant is entitled is the benefit that can be provided from the
participant's vested account.
Vesting:
Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Company's matching contribution portion of
their accounts plus the actual earnings thereon is based on years of service. A
participant is 100 percent vested after six years of service. A participant is
100 percent vested in additional discretional matching contributions after three
years.
Investment Options:
There are currently fifteen investment funds offered under the 401 (K)
Plan - the Norwest Stable Value Fund, which is a portfolio of assets issued by
highly-rated financial institutions and corporations as well as
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obligations of the U.S. Government or its agencies; the Prudential Intermediate
Global Income Fund, which invests primarily in debt issued by the U.S. and
foreign governments, and supranational entities; the AIM Balanced Fund, which
normally invests between 30% and 70% of assets in equities, and the balance in
investment-grade fixed-income securities; the Prudential Stock Index Fund, which
normally invests at least 80% of assets in securities on the S&P 500 index; the
MFS Emerging Growth Fund, which normally invests 80% of assets in common stocks
of small and medium-size companies; the Alliance Quasar Fund, which pursues
aggressive investment policies and invests primarily in equity securities; the
Templeton Foreign Fund I, which invests primarily in stocks and debt securities
of companies and governments outside of the U.S.; the Butler International Stock
Fund, which is a qualified employer security under ERISA; the Prudential
Government Income Fund, which invests at least 65% of assets in U.S. government
securities and 20% of assets in high quality money market instruments; the
Prudential High Yield Fund, which normally invests at least 80% of assets in
fixed-income securities rated below A but no lower than B and up to 20% of
assets in U.S. dollar-denominated foreign-debt securities; the Fidelity Advisor
Growth Opportunities Fund, which invests at least 65% of assets in equity
securities of companies that management believes have long-term growth potential
and fixed income securities; the Prudential Equity Fund, which invests primarily
in common stocks of major, established corporations and also preferred stocks,
convertibles, debt securities, and up to 30% in foreign issues; the Fidelity
Advisor Strategic Opportunities Fund, which invests at least 65% of assets in
equities of companies believed by management to involve a special situation and
up to 30% of assets in foreign securities; the Prudential World Global A, which
invests primarily in domestic and foreign common stocks, and preferred stocks,
rights, warrants, convertibles, bonds and other debt securities; and the
Seligman Henderson Global Smaller Company Fund, which normally invests at least
65% of assets in equities by small to medium sized companies domiciled in at
least three countries, including the U.S. , as well as 25% in preferred stocks
and investment grade debt that offer capital appreciation potential.
Payment of Benefits:
Participants may withdraw funds while employed only from accounts in
which they are fully vested after attaining age 59 1/2. Prior to attaining age
59 1/2 a withdrawal may be made for financial hardship. Only one withdrawal may
be requested during any Plan year for reasons other than financial hardship. The
minimum amount available for a withdrawal is $500. If the participant has an
outstanding loan, the amount of funds available for withdrawal may be limited. A
participant will have a 100% vested interest in all accounts upon retirement at
or after age 65, in the event of a permanent disability or in the event of death
prior to termination of employment. Upon termination of employment, the value of
the vested accounts will be paid in a lump sum.
Participant Loans:
Participants may borrow up to 50% of the vested portion of their
account balance, subject to a maximum of $50,000. Only one loan will be granted
at a time and must be repaid in full before another loan can be requested. The
minimum loan amount is $1,000. Loans are subject to an interest. The current
interest rate is Prime plus 1%. Loans must be repaid within such period as
agreed to by the participant and the Plan's administrative committee, up to a
maximum of five years. However, if the loan is made for the purchase or
construction of the participants principal place of residence, the repayment
period may be longer than five years. Repayments will normally be made through
payroll deductions.
Plan Termination:
Although the Company has not expressed any intent to do so, in the
event the Plan is terminated, all participants will be 100% vested in all their
accounts and benefits will be payable strictly under the terms of the Plan.
Benefits under defined contribution plans of the 401(k) type are not insured by
the Pension Benefit Guaranty Corporation.
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements are prepared on the accrual basis
of accounting and are presented in accordance with the Employee Retirement
Income Security Act of 1974 ("ERISA").
Plan investments are stated at fair value as determined by quoted
market prices. Participant loans are valued at cost which approximates fair
value. Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
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C. BENEFITS PAYABLE
The amounts payable to the Plan participants who have terminated or
withdrawn from the plan were $0 and $1,071,752 at December 31, 1999 and 1998,
respectively. Refunds payable to highly compensated employees for the Plan years
1999 and 1998 were $142,134 and 312,492, respectively.
D. TAX STATUS
The Internal Revenue Service has determined that the Plan is a
qualified plan under Section 401(a) of the Code with an associated trust exempt
from tax under Section 501(a). The most recent favorable letter of determination
on the qualified status of the Plan was issued by the Internal Revenue Service
("IRS") on April 22, 1996. The Plan sponsor and the Plan's tax counsel believe
that the Plan as currently designed and operated is in compliance with the
applicable requirements of the Internal Revenue Code. Therefore, there is no
provision for income taxes in the financial statements.
E. ADMINISTRATION OF PLAN ASSETS
Through June 1998, contributions were held and managed by PaineWebber,
Inc. ("the trustee"), which invests cash received, interest and dividend income
and makes distributions to participants. The trustee also administers the
payment of interest and principal on the participant loans. Effective June 1998,
the Plan trustee was changed to the Prudential Bank and Trust Company.
Certain administrative functions are performed by officers or employees
of the Company. No such officer or employee receives compensation from the Plan.
Certain plan administration expenses are borne by the Plan.
F. PLAN INVESTMENTS
Plan investments as of December 31, 1999 are summarized as follows:
Emerging Growth Fund * $ 12,718
Norwest Stable Value Fund 65 * 8,829
Butler International, Inc. Common Stock * 6,419
AIM Balanced Fund A * 5,072
Fidelity Advisor Growth Opportunities Fund * 4,192
Templeton Foreign Fund A * 3,959
Prudential Stock Index Fund Z * ** 3,707
Loans to participants 802
Prudential Global Growth Fund A ** 197
Prudential Equity Fund A ** 158
Fidelity Advisor Strategic Opportunity Fund T 150
Prudential High Yield Fund A ** 103
Seligman Henderson Global Small Company Fund 82
Prudential Government Income Fund A ** 67
Alliance Quazar Fund 51
Prudential World Fund, Inc. Global Series ** 38
Cash and cash equivalents 4
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Total Investments, at fair value/contract value $ 46,548
===============
* Each of these funds represent 5% or more of the plan net assets
available for benefits as of December 31, 1999.
** Investments in these funds represent party in interest
8
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<TABLE>
<CAPTION>
Year Ended
December 31,
1999
---------------
<S> <C>
Net realized and unrealized appreciation
(depreciation) in investments:
MFS Emerging Growth Fund $ 4,361
Templeton Foreign Fund A 1,069
AIM Balanced Fund A 711
Norwest Stable Value Fund 65 495
Prudential Stock Index Fund Z 476
Fidelity Advisor Growth Opportunities Fund 222
Prudential World Fund, Inc. Global Series 50
Seligman Henderson Global Small Company Fund 18
Fidelity Advisor Strategic Opportunity Fund T 11
Alliance Quazar Fund 6
Prudential Equity Fund A 4
Prudential Global Growth Fund A (1)
Prudential Government Income Fund A (4)
Prudential High Yield Fund A (14)
Butler International, Inc. Common Stock (3,956)
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Total net realized and unrealized appreciation (depreciation)
In investments $ 3,448
===============
Investment income:
Interest $ 53
Dividends 379
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Total $ 432
===============
</TABLE>
9
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SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
(In thousands except share data)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
# of Current
Description Shares Value
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<S> <C> <C>
Cash and Cash Equivalents:
Cash $ 4
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Investments in Common Stocks:
Butler International, Inc. 583,554 $ 6,419
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Loans To Participants:
Loans to Participants * $ 802
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Investments in Mutual Funds:
MFS Emerging Growth Fund 190,987 12,718
Norwest Stable Value FunD 317,777 8,829
AIM Balanced Fund A 155,172 5,072
Fidelity Advisor Growth Opportunities Fund 89,833 4,192
Templeton Foreign Fund A 352,816 3,959
Prudential Stock Index Fund Z 113,880 3,707
Prudential Global Growth Fund A 8,106 197
Prudential Equity Fund A 8,200 158
Fidelity Advisor Strategic Opportunity Fund T 6,523 150
Prudential High Yield Fund A 14,007 103
Seligman Henderson Global Small Company Fund 4,286 82
Prudential Government Income Fund A 7,908 67
Alliance Quasar Fund 1,792 51
Prudential World Fund, Inc. Global Series 5,213 38
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$ 39,323
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Total $ 46,548
===============
</TABLE>
* Interest rates on loans to participants range between 7% and 10.25% and
maturity dates range between January 2000 and August 2029.
10
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EXHIBIT 1
INDEPENDENT AUDITORS' CONSENT
-----------------------------
We consent to the incorporation by reference in Registration Statements No. 333-
69799, No. 69801, No. 333-22263, No. 33-58481 and No. 33-87012 on Form S-8,
Registration Statement No. 33-59427 on Form S-3 and Post-Effective Amendment No.
4 to Registration Statement No. 33-58278 on Form S-2 of our report dated June
23, 2000 appearing in this Annual Report on Form 11-K of the Butler
International, Inc. 401(k) Plan for the year ended December 31, 1999.
/s/ Deloitte & Touche LLP
-------------------------
Parsippany, New Jersey
June 23, 2000
11
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SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the plan) have duly caused this annual
report to be signed on its behalf by the undersigned thereunto duly authorized.
BUTLER INTERNATIONAL, INC.
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(Registrant)
June 28, 2000 By: /s/ Michael C. Hellriegel
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Michael C. Hellriegel
Senior Vice President
and Chief Financial Officer
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