Butler National Corporation - Declares Dividend Distribution Of Preferred Stock Purchase Rights.OLATHE, Kansas--(BUSINESS WIRE)--Oct. 27, 1998--On October 26, 1998, the Board of Directors of Butler National Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : BUKS) approved the adoption of a Shareholder Rights Plan designed to discourage takeovers that involve abusive tactics or do not provide fair value to shareholders. Similar plans have been adopted by many other publicly traded companies publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. . The Shareholder Rights Plan provides for a dividend distribution of one Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. Purchase Right for each outstanding share of Butler National Corporation common stock. The dividend distribution will be made to shareholders of record on October 27, 1998. Each shareholder is automatically entitled to the Rights and no physical distribution of new certificates will be made at this time. The Rights distribution is not taxable to shareholders. The Rights will be exercisable only if a person or group (except for certain exempted persons or groups) acquires 15% or more of Butler National Corporation's common stock or announces a tender offer which would result in ownership of 15% or more of the common stock. The Rights entitle the holder to purchase one two-hundredth of a share of Series C Participating Preferred Stock Participating Preferred Stock A type of preferred stock that, under certain conditions, gives holders the right to receive earnings payouts over and above the specified dividend rate. at an exercise price of $10.00 and will expire ten years from issuance. Following the acquisition of 15% or more of Butler National Corporation's common stock by a person or group, the holders of the Rights (other than the acquiring person) will be entitled to purchase shares of common stock at one-half the then current market price, and, in the event of a subsequent merger or other acquisition of the Company, to buy shares of common stock of the acquiring entity at one-half of the market price of those shares. Butler National Corporation will be able to redeem the Rights at $0.0025 per Right at any time until a person or group acquires 15% or more of the Company's shares. A letter outlining the Shareholder Rights Plan in more detail will be sent to the Company's shareholders following the record date. As a part of the approval of the rights plan, the Board accepted the cancellation of options to purchase 2,000,000 shares at $.90 granted to the Chairman and the President on November 1, 1997. Management Comments: "The Board of Directors determined that adopting the Shareholder Rights Plan is an effective and reasonable method to safeguard the interests of our shareholders. We are particularly concerned that the future benefits of current programs and initiatives could be denied to shareholders by an opportunistic, undervalued Undervalued A stock or other security that is trading below its true value. Notes: The difficulty is knowing what the "true" value actually is. Analysts will usually recommend an undervalued stock with a strong buy rating. acquisition of the Company. The plan is designed to assure that shareholders are not deprived of their rights to share in the full measure of the Company's long-term potential, while not preventing a fully valued Fully Valued A stock whose price analysts believe reflects the market's recognition of the company's underlying fundamental earnings power and therefore is unlikely to rise further in price. If the stock goes up from that price, it is called overvalued. bid for the Company," commented Clark D. Stewart, President. Forward-Looking Information: The information set forth above may include "forward-looking" information as outlined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. The Cautionary Statements, filed by the Company as Exhibit 99 to the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , are incorporated herein by reference and investors are specifically referred to such Cautionary Statements for a discussion of factors which could affect the Company's operations and forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. contained herein. Our Business: Butler National Corporation operates in the Aerospace and Services business segments. The Services segment includes electronic monitoring of water pumping The pumping of water is a basic and practical technique, far more practical than scooping it up with one's hands or lifting it in a hand-held bucket. This is true whether the water is drawn from a fresh source, moved to a needed location, purified, or used for irrigation, washing, or stations, temporary employee services and management services for Indian gaming enterprises. Aerospace includes the manufacture of switching equipment for Boeing and structural modification of business aircraft. |
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