BUKS Butler National Corp (QX)

Section 17-6002 (a)(8) of the Kansas General Corporation Code provides that articles of incorporation may contain a provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) under Section 17-6424 of the Kansas General Corporation Code (relating to liability for unauthorized acquisitions or redemptions of, or dividends on, capital stock) and amendments thereto; or (iv) for any transaction from which the director derived an improper personal benefit. The Registrant’s restated and amended certificate of incorporation contains the provisions permitted by Section 17-6002 (a)(8) of the Kansas General Corporation Code. The effect of these provisions is to eliminate the Registrant’s and its stockholders’ rights (through stockholders’ derivative suits on behalf of the Registrant) to recover monetary damages against a director for breach of the fiduciary duty of care as a director except in the situations described in clauses (i) through (iv) above. The limitations described above, however, do not affect the ability of the Registrant or its stockholders to seek non-monetary based remedies, such as an injunction or rescission, against a director for breach of his fiduciary duty nor would such limitations limit liability under the federal securities laws.

Under Section 17-6305 of the Kansas General Corporation Code, a corporation has the power under specified circumstances to indemnify its directors, officers, employees and agents in connection with actions, suits or proceedings brought against them by a third party or in the right of the corporation, by reason of the fact that they were or are such directors, officers, employees or agents, against expenses, judgments and other amounts incurred in any such action, suit or proceeding. The Bylaws of the Registrant provide that the Registrant shall indemnify any person who was or is a party or is threatened to be made a party to any threatened pending or completed action, suit, or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Registrant, by reason of the fact that he is or was a director of the Registrant, or is or was serving at the request of the Registrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, judgment, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the defense or settlement of such action, suit or proceeding, including attorneys’ fees, to the full extent permitted by Kansas Corporation Code, as amended, K.S.A. 17-6305.

The Bylaws provide that the Registrant may, at the discretion of the Board of Directors, indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or contemplated action, suit, or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Registrant, by reason of the fact that he is or was an officer, employee or agent of the Registrant, or is or was serving at the request of the Registrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the defense or settlement of such action, suit or proceeding, including attorneys’ fees, to the full extent permitted by Kansas Corporation Code, as amended, K.S.A. 17- 6305.

Under the indemnification provisions of the Bylaws, the Registrant is obligated to reimburse directors for all expenses, including attorneys’ fees, costs, settlement, fines and judgment incurred by or levied upon the director in connection with any action, suit or proceeding referred to in the Bylaws. To the extent that an officer, employee or agent of the Registrant has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in the Bylaws, or in defense of any such claim, issue or matter, the Registrant shall indemnify him against expenses actually and reasonably incurred by such person in connection therewith, including attorneys’ fees. The Registrant may also advance certain expenses incurred by directors or officers upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it is ultimately determined that the director or officer is not entitled to be indemnified by the Corporation as authorized in these Bylaws. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate.

Additionally, a ny indemnification of directors, officers, employees or agents pursuant to the Bylaws, unless ordered by a court, shall be made by the Registrant only as authorized in the specific case upon a determination that such indemnification is proper in the circumstances because such director, officer, employee or agent has met the applicable standard of conduct set forth in Kansas Corporation Code, as amended, K.S.A. 17-6305. Such determination shall be made by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to the action, suit, or proceeding, or if such a quorum is not obtainable, or even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or by the stockholders. The Registrant is entitled to participate or assume the defense of actions, suits or proceedings under certain circumstances .

The indemnification and advancement of expenses provided by the Bylaws and under the Articles of Incorporation are not deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such person. The Registrant has the power to give any further indemnity, in addition to the indemnity authorized or contemplated under the Bylaws or Articles of Incorporation, to any person who is or was a director, officer, employee or agent or to any person who is or was serving at the request of the Registrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise; provided, no such indemnity shall indemnify any person from or on account of such person’s conduct which was determined by a final judgment or adjudication to have been knowingly fraudulent, deliberately dishonest or willful misconduct, or if such indemnification would violate applicable law. The Registrant may enter into indemnification agreements with each director and officer of the Registrant whom the Board of Directors authorizes by vote of a majority of a quorum of disinterested directors.

The Registrant currently has directors and officers ’ liability insurance that insures directors and officers of the Registrant with respect to claims made for alleged wrongful acts in their roles as directors or officers of the Registrant and its subsidiaries. The insurance also insures the Registrant for claims against the Registrant’s directors or officers in situations in which the Registrant has an obligation to indemnify its directors and officers.