BUTLER NATIONAL CORP 8-K

What Happened
Butler National Corporation announced on July 22, 2026 that its Compensation Committee approved pay and incentive changes for Adam B. Sefchick, the Company’s Chief Financial Officer (who has served as Interim Chief Executive Officer and President since June 15, 2026). Actions include a base salary increase, a higher annual cash bonus target and maximum, a restricted stock grant, interim CEO monthly pay and onboarding/discretionary bonuses, and new severance and change‑in‑control agreements.

Key Details

• Base salary for FY ending April 30, 2027 increased from $290,000 to $302,000.
• Annual cash bonus target raised from $60,000 to $70,000 with a maximum potential bonus of $110,000; bonus tied to company revenue, operating income and other non‑financial goals.
• Grant of 20,222 restricted shares valued at $100,000; vesting pro rata in three equal parts (one‑third at grant, then on each of the first and second anniversaries). Award includes confidentiality, non‑compete and non‑solicit restrictions and forfeiture for breaches.
• Interim CEO pay: $10,000 per month while serving as Interim CEO; $25,000 onboarding bonus payable upon successful hire of a new CEO (if Sefchick remains employed); discretionary FY2027 bonus up to $90,000 contingent on continued employment and Committee determination.
• Severance Agreement (term ends July 31, 2027): if terminated without “cause,” Sefchick is eligible for 12 months of base salary (subject to release and compliance with restrictive covenants); payments stop and must be repaid if covenants are violated.
• Change in Control Agreement (generally effective through July 31, 2027 unless a change occurs): if a Change in Control is followed within two years by termination without cause or resignation for good reason, Sefchick would receive a lump sum equal to 1.5× his highest 12‑month compensation (salary + bonus) in the prior three years and two years of continued benefits; payment is subject to certain timing/non‑termination conditions.

Why It Matters
These actions increase executive cash and equity compensation and add standard severance/change‑in‑control protections for the CFO who is serving as interim CEO. For investors, the items affect executive incentives (short‑term cash, equity vesting and performance metrics) and potentially the company’s cash flow if severance or CIC payments become payable. The restricted stock ties part of compensation to continued service and compliance with post‑employment restrictions.