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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for use of the Commission only (as permitted by Rule 14a-6 (e) (2))
BTU INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee previously paid with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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BTU INTERNATIONAL, INC.
23 ESQUIRE ROAD
NORTH BILLERICA, MASSACHUSETTS 01862-2596, USA
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 1, 2001
------------------------
Notice is hereby given that the Annual Meeting of Stockholders of BTU
International, Inc. will be held at the offices of the Company, 23 Esquire Road,
North Billerica, Massachusetts, at 10:00 A.M. on Friday, June 1, 2001, for the
following purposes:
1. To elect four directors to serve for the ensuing year.
2. To approve the amendment to the Restated Certificate of Incorporation to
remove the Class A Preferred Stock from the shares eligible for
issuance.
3. To transact any other business that may properly come before the meeting
or any adjournment thereof.
Stockholders of record at the close of business on April 16, 2001 are
entitled to notice of and to vote at the meeting.
If you are unable to be present personally, please sign and date the
enclosed proxy and return it promptly in the enclosed envelope.
By Order of the Board of Directors
JOHN E. BEARD
Secretary
North Billerica, Massachusetts
May 7, 2001
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ANNUAL MEETING OF STOCKHOLDERS
JUNE 1, 2001
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PROXY STATEMENT
------------------------
The enclosed proxy is solicited on behalf of the Board of Directors of BTU
International, Inc. ("BTU" or the "Company") to be voted at the Annual Meeting
of Stockholders (the "Meeting") to be held on June 1, 2001 or at any adjournment
thereof. The cost of solicitation of proxies will be borne by BTU. Directors,
officers and employees of BTU may also solicit proxies by telephone, telegraph
or personal interview. BTU will reimburse banks, brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses incurred by them in
sending proxy materials to the beneficial owners of shares.
The holders of record of shares of common stock, par value $.01 per share,
of the Company (the "Common Stock") at the close of business on April 16, 2001
are entitled to notice and to vote at the Meeting. There were 6,946,021 shares
of Common Stock outstanding on that date, each of which is entitled to one vote
on each matter to come before the Meeting.
Shares of Common Stock represented by proxies in the form enclosed, if
properly executed and returned and not revoked, will be voted as specified, but
where no specification is made, the shares will be voted to fix the number of
directors at four and for the election as directors of the nominees named below,
and to remove the Class A Series Preferred Stock from the shares authorized for
issuance. To be voted, proxies must be filed with the Secretary prior to voting.
Proxies may be revoked at any time before exercise by filing a notice of such
revocation with the Secretary.
The holders of a majority of the issued and outstanding shares of Common
Stock, present in person or represented by proxy and entitled to vote, will
constitute a quorum for the transaction of business at the Meeting. Directors
shall be elected by a plurality of the votes cast at the meeting for the
election of directors. The vote of a majority of the issued and outstanding
shares of common stock is necessary to approve Proposal 2. The person designated
as the election inspector will count shares represented by proxies that withhold
authority to vote for a nominee for election as a director or that reflect
abstentions and "broker non-votes" (i.e., shares represented at the meeting held
by brokers or nominees as to which (i) instructions have not been received from
the beneficial owners or persons entitled to vote and (ii) the brokers or
nominee do not have the discretionary voting power on a particular matter) only
as shares that are present and entitled to vote on the matter for the purposes
of determining the presence of a quorum, but neither abstentions nor broker
non-votes will have any effect on the outcome of voting on the matter.
The Annual Report on Form 10K for BTU's fiscal year ended December 31, 2000
has been mailed with this proxy statement. This proxy statement and the enclosed
proxy were mailed to stockholders on the same date as the date of the Notice of
Annual Meeting of Stockholders. The principal executive offices of BTU are
located at 23 Esquire Road, North Billerica, Massachusetts 01862-2596.
1. ELECTION OF DIRECTORS
The persons named in the enclosed proxy intend to vote each share as to
which a proxy has been properly executed and returned and not revoked to fix the
number of directors at four and in favor of the election as directors of the
four nominees named below, all of whom are now directors of BTU, unless
authority to vote for the election of any or all of such nominees is withheld by
marking the proxy to that effect.
The persons elected as directors will serve until the next Annual Meeting
of Stockholders and until their successors are elected and shall qualify. It is
expected that each of the nominees will be able to serve, but if any nominee is
unable to serve, the proxies reserve discretion to vote or refrain from voting
for a substitute nominee or nominees or to fix the number of directors at a
lesser number.
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BUSINESS EXPERIENCES AND DIRECTOR
NAME CURRENT DIRECTORSHIPS AGE SINCE
- ---- ------------------------ --- --------
Paul J. van der Wansem.................... President, Chief Executive Officer and 61 1979
Chairman of the Board of Directors of the
Company.
David A.B. Brown.......................... Director of the Company; President of The 57 1989
Windsor Group, Inc., a management consulting
firm of which he is co-founder; Director,
EMCOR Group, Inc., an electrical and
mechanical engineering company; Director,
Marine Drilling Companies, an owner and
operator of offshore drilling rigs.
Director, Technical Communications Corp., a
manufacturer and marketer of encryption
equipment. Director of NS Group, Inc. a
manufacturer and marketer of pipe for the
oil and gas industry.(1)(2)
J. Chuan Chu.............................. Director of the Company; Chairman of 81 1991
Columbia International Corporation, an
engineering firm; Senior Advisor, Office of
the President of SRI International, an
international consulting firm; Director,
Interproject Corp., an international
construction and trading company; Senior
Research Professor, Development Research
Center, State Council, China(1)(2)
Joseph F. Wrinn........................... Director of the Company; Vice President, 47 1999
Platform Engineering Manager, Industrial/
Customer Division of Teradyne, Inc.(1)(2)
- ---------------
(1) Member of Audit Committee
(2) Member of Stock Option and Compensation Committee.
During 2000, the Board of Directors held eight meetings. Mr. Van der
Wansem, Mr. Brown and Dr. Chu attended 100% of the Board and relevant committee
meetings during 2000; and Mr. Wrinn attended 88% of the Board and relevant
committee meetings during 2000. Each director who is not an officer or employee
of the Company receives an annual retainer. For 2000, the annual retainer for
directors was $10,000 paid semi-annually, of which the directors are now
permitted to elect to take up to one-half in the form of stock options. The
number of shares subject to options granted pursuant to any such election by a
director is equal to twice the number of shares determined by dividing the cash
amount by the fair market value of the common stock on the date of the award.
The exercise price of such options is equal to the fair market value of the
common stock on the date of the award. The options become exercisable on the
first anniversary of the date of grant and expire either three years after the
date of grant, for those options issued in April 2000, or five years, for those
options issued in October 2000. Under this program, on April 1, 2000, Mr. Brown,
Dr. Chu and Mr. Wrinn each elected to receive an option to purchase 390 shares
of common stock at an exercise price of $12.813 per share. On October 1, 2000
Mr. Brown, Dr. Chu and Mr. Wrinn each elected to receive options to purchase 367
shares of common stock at an exercise price of $13.625 per share. In addition,
each non-employee director receives $750 for each Board meeting attended and
$500 for each committee meeting attended independent of a Board meeting.
During 2000, the Company paid $15,000 in consulting fees to a company of
which Dr. Chu is the chairman.
Under the Company's 1998 Stock Option Plan for Non-Employee Directors, on
June 2, 2000 Mr. Brown, Dr. Chu and Mr. Wrinn each received an option to
purchase 1000 shares of BTU Common Stock with an exercise price equal to the
fair market value of the stock on that date ($10.125 per share). These options
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become exercisable with respect to one-fourth of the shares on each of the first
four anniversaries of the date of grant, and expire seven years from the date of
grant.
The Audit Committee in 2000 was comprised of David A.B. Brown (Chairman),
J. Chuan Chu and Joseph F. Wrinn, who are not employees of the Company and may
be considered to be independent directors. The Committee held two meeting during
2000. The Committee recommends to the Board of Directors the independent public
accountants to be engaged by the Company; reviews with the independent public
accountants and management the Company's internal accounting procedures and
controls; and reviews with the independent public accountants the scope and
results of the auditing engagement. In April 2001, the Audit Committee approved
a committee charter, a copy of which is attached to the proxy statement as
Appendix A.
The Stock Option and Compensation Committee, comprised in 2000 of David
A.B. Brown (Chairman), J. Chuan Chu and Joseph F. Wrinn, administers the
Company's stock option and compensation plans and provides recommendations to
the Board of Directors regarding compensation matters. The Committee held three
meetings during 2000.
The Company has no nominating committee.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934, as amended, the
Company's directors, its officers and any persons holding more than ten percent
of the Company's Common Stock are required to report to the Securities and
Exchange Commission their, holdings of and transactions in the Common Stock.
Specific due dates for these reports have been established, and the Company is
required to report in this proxy statement any failure during 2000 to file by
these dates. The Company's directors, officers and ten percent holders satisfied
all of these filing requirements for 2000. In making these statements, the
Company has relied on the written representations of its directors, officers and
ten percent holders and copies of the reports that they have filed with the
Commission and the Company.
BENEFICIAL OWNERSHIP OF SHARES
The following table sets forth certain information regarding beneficial
ownership as of April 16, 2001 of the Company's Common Stock (i) by each person
known by the Company to own beneficially more than 5% of the Company's Common
Stock, (ii) by each of the Company's directors and nominees, (iii) by each
executive officer of the Company and (iv) by all directors and executive
officers of the Company as a group.
COMMON STOCK
BENEFICIALLY OWNED(1)
-----------------------
NUMBER OF PERCENT OF
SHARES CLASS
--------- ----------
DIRECTORS AND EXECUTIVE OFFICERS
Paul J van der Wansem(2).................................... 1,752,123 24.4%
David A.B. Brown(3)......................................... 7,208 *
J. Chuan Chu(3)............................................. 8,448 *
Joseph F. Wrinn(3).......................................... 3,666 *
Santo J. DiNaro(4).......................................... 35,000 *
Thomas P. Kealy(4).......................................... 24,180 *
James M. Griffin(4)......................................... 12,000 *
All directors and executive officers as a group (7
persons)(5)............................................... 1,838,959 25.6%
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COMMON STOCK
BENEFICIALLY OWNED(1)
-----------------------
NUMBER OF PERCENT OF
SHARES CLASS
--------- ----------
5% BENEFICIAL OWNERS
FMR Corp.(6)
82 Devonshire Street
Boston, MA 02109.......................................... 656,300 9.1%
Dimensional Fund Advisors Inc.(7)
1299 Ocean Avenue
Santa Monica, CA 90401.................................... 516,600 7.2%
David L. Babson & Company Inc.(8)
One Memorial Drive
Cambridge, Ma. 02142...................................... 388,000 5.4%
- ---------------
* Less than one percent
(1) Except as otherwise noted, each person or entity named in the table has sole
voting and investment power with respect to all shares of Common Stock shown
as beneficially owned by him or it.
(2) Includes: (i) 100,000 shares of Common Stock held by trusts, of which Mr.
van der Wansem is a trustee, for the benefit of certain members of Mr. van
der Wansem's family (Mr. van der Wansem disclaims beneficial ownership in
the shares held in this trust); (ii) 12,223 shares held in a family limited
partnership, in which Mr. van der Wansem is a general partner and a limited
partner; (iii) 86,050 shares held by Mrs. van der Wansem, of which Mr. van
der Wansem disclaims beneficial ownership; and (iv) 67,350 shares for Mr.
van der Wansem represented by options exercisable within 60 days of the
record date.
(3) Includes 5,166 shares for Mr. Brown, 4,708 for Dr. Chu and 2,666 for Mr.
Wrinn represented by options exercisable within 60 days of the record date.
(4) Includes 30,000 shares for Mr. DiNaro, 11,150 for Mr. Kealy and 12,000 for
Mr. Griffin represented by options exercisable within 60 days of the record
date.
(5) Includes 130,374 shares represented by options which are exercisable within
60 days of the record date.
(6) According to information filed on February 14, 2001 with the Securities and
Exchange Commission in a report on Schedule 13G, each of Edward C. Johnson
3d, FMR Corp., through its wholly owned subsidiary Fidelity Management &
Research Company ("Fidelity"), and the Fidelity Low-Priced Stock Fund ("the
Fund") has sole power to dispose of the 656,300 shares owned by the Fund.
Fidelity carries out voting of the shares under written guidelines
established by the Fund's Board of Trustees.
(7) According to information filed on February 2, 2001 with the Securities and
Exchange Commission in a report on Schedule 13G, Michael T. Scardina of
Dimensional Fund Advisors Inc. ("the Fund") has sole power to dispose of the
516,600 shares owned by the Fund. The Fund carries out voting of the shares
under written guidelines established by the Fund's Board of Directors.
(8) According to information filed on January 24, 2001 with the Securities and
Exchange Commission in a report on Schedule 13G, David L. Babson & Company
Inc. ("Babson") in its capacity as investment adviser, may be deemed to
beneficially own 388,000 shares, which are held by Investment Advisory
clients. Babson carries out voting of the shares under written guidelines
established by the Babson's Board of Directors.
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EXECUTIVE COMPENSATION
The following table sets forth information with respect to compensation
paid to or accrued on behalf of the persons who on December 31, 2000 were the
chief executive officer and the three other most highly paid executive officers
of the Company (the "Named Executive Officers"), for services to the Company for
the years 1998, 1999 and 2000.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL AWARDS
COMPENSATION SECURITIES
-------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)(1) COMPENSATION($)(2)
- --------------------------- ---- --------- -------- ------------- ------------------
Paul J. van der Wansem............. 2000 288,077 212,400 45,000 40,488
Chairman and 1999 273,848 222,752 45,000 36,653
Chief Executive Officer 1998 260,000 2,290 40,000 36,453
Santo J. DiNaro.................... 2000 169,096 86,400 30,000 3,751
Executive Vice President 1999 163,846 89,100 30,000 3,200
1998 150,000 16,291 30,000 2,192
Thomas P. Kealy.................... 2000 111,312 34,050 7,000 2,475
Vice President, Corporate
Controller 1999 105,597 35,775 5,000 2,112
and Chief Accounting Officer 1998 100,770 846 5,000 2,015
James M. Griffin(3)................ 2000 153,645 28,800 42,000 1,469
Vice President of Sales -- 1999 113,175 1,765 8,000 1,469
Americas 1998 110,245 1,058 2,500 1,519
- ---------------
(1) Options listed for 1998 were repriced on September 29, 1998 (see Stock
Option Repricing table).
(2) Consists of Company contributions to individual 401(k) plans and, in the
case of Mr. van der Wansem, payment for life insurance.
(3) Salary includes commission compensation, which is variable, based on sales.
OPTION GRANTS IN 2000
The following table sets forth information with respect to options granted
to the Named Executive Officers during 2000.
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
----------------------------------------------------- VALUE AT ASSUMED
NUMBER OF ANNUAL RATES OF STOCK
SECURITIES % OF TOTAL PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION ----------------------
GRANTED FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
---------- ------------ --------- ---------- --------- ---------
Paul J. van der
Wansem................ 45,000 14.1% $10.31 11/17/05 $128,218 $283,329
Santo J. DiNaro......... 30,000 9.4% $ 9.38 11/17/05 $ 77,704 $171,706
Thomas P. Kealy......... 7,000 2.2% $ 9.38 11/17/05 $ 18,131 $ 40,065
James M. Griffin........ 10,000 3.1% $ 5.50 01/11/05 $ 15,195 $ 33,578
22,000 6.9% $ 8.50 02/10/05 $ 51,665 $114,165
10,000 3.1% $ 9.38 11/17/05 $ 25,901 $ 57,235
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The table below sets forth information with respect to the exercise of
options during 2000 and the aggregate value at on December 31, 2001 of options
held by the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN
LAST FISCAL YEAR AND FY-END OPTION VALUE
NUMBER OF (1)
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED ON DECEMBER 31, 2000 DECEMBER 31, 2000
EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (#) REALIZED($) UNEXERCISABLE(#) UNEXERCISABLE($)
- ---- ----------- ------------ ----------------- -----------------
Paul J. van der Wansem........... 0 0 67,350/124,650 296,006/306,619
Santo J. DiNaro.................. 5,000 0 30,000/ 75,000 126,563/165,938
Thomas P. Kealy.................. 0 0 11,150/ 18,850 50,306/ 48,319
James M. Griffin................. 0 0 4,000/ 51,600 14,750/ 54,100
- ---------------
(1) Value is based on the closing sales price of the Company's Common Stock on
December 29, 2000, the last trading day of 2000 ($7.625), less the
applicable option exercise price.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Brown, Chu, and Wrinn, none of whom is or was an executive officer
of the Company during 2000, served on the Compensation Committee.
STOCK OPTION REPRICING
The following table sets forth information concerning the repricing of
stock options which occurred on September 29, 1998. This repricing was offered
to all employees, with a new four year vesting schedule and five-year expiration
for all repriced options. The table below sets forth information regarding
repriced options held by the Named Executive Officers.
STOCK OPTION REPRICING
NUMBER OF
SECURITIES MARKET PRICE EXERCISE LENGTH
UNDERLYING OF STOCK AT PRICE AT NEW OF TERM
DATE OF OPTIONS TIME OF TIME OF EXERCISE REPRICED
NAME AND POSITION REPRICING REPRICED REPRICING REPRICING PRICE OPTIONS
- ----------------- --------- ---------- ------------ --------- -------- --------
Paul J. van der Wansem.... 9/29/98 12,000 $2.875 $4.88125 $2.875 5 Years
President and 9/29/98 50,000 $2.875 $3.75000 $2.875 5 Years
Chief Executive Officer 9/29/98 40,000 $2.875 $4.31250 $2.875 5 Years
Santo J. DiNaro........... 9/29/98 20,000 $2.875 $5.75000 $2.875 5 Years
Executive Vice President 9/29/98 10,000 $2.875 $5.00000 $2.875 5 Years
9/29/98 20,000 $2.875 $4.31250 $2.875 5 Years
Thomas P. Kealy........... 9/29/98 5,000 $2.875 $4.43750 $2.875 5 Years
Vice President 9/29/98 8,000 $2.875 $3.75000 $2.875 5 Years
Corporate Controller 9/29/98 5,000 $2.875 $4.31250 $2.875 5 Years
Chief Accounting Officer
James M. Griffin.......... 9/29/98 2,500 $2.875 $4.43750 $2.875 5 Years
Vice President of 9/29/98 3,000 $2.875 $3.75000 $2.875 5 Years
Sales -- Americas 9/29/98 2,500 $2.875 $4.31250 $2.875 5 Years
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REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee has submitted the following report:
In February 2000 the Compensation Committee, in connection with a meeting
of the Board of Directors approved the continuation of the Management Incentive
Compensation Plan that was adopted in 1996. This plan provides for the payment
to executives of the Company a cash bonus based on attaining certain goals.
These goals are based both on an earnings per share target and on the
accomplishment of specific organizational goals.
Operating performance in 2000 resulted in payments pursuant to the
Management Incentive Compensation Plan. (See Summary Compensation Table for
actual payments)
The Company has an Incentive Profit Sharing Plan for all eligible
employees. The persons included in the Management Incentive Compensation Plan
are eligible to participate in the Company-wide profit sharing plan, but any
earnings they derive from this plan during the year are deducted from their
bonuses earned under the Management Incentive Compensation Plan.
In November 2000 the Compensation Committee approved the issuance of stock
options to all employees, including executive officers. (See Option Grants in
2000 for actual grants to executive officers)
David A.B. Brown, Chairman
J. Chuan Chu
Joseph F. Wrinn
REPORT OF THE AUDIT COMMITTEE
The Audit Committee, composed of Mr. Brown, Dr. Chu and Mr. Wrinn, held two
meetings during 2000. The Audit Committee recommends to the Board of Directors
the independent public accountants to be engaged by the Company; reviews with
such auditors and management the Company's internal accounting procedures and
controls; and reviews with such auditors the audit scope and results of their
audit of the consolidated financial statements of the Company. The Audit
Committee adopted a new committee charter in April 2001, a copy of which is
attached as Exhibit A to this Proxy Statement.
The Audit Committee has reviewed and discussed The Company's audited
consolidated balance sheets as of December 31, 2000 and 1999 and the related
consolidated statements of operations, comprehensive income, stockholders'
equity and cash flows for each of the three years in the period ended December
31, 2000 with The Company's management. The Audit Committee has discussed with
Arthur Andersen LLP, The Company's independent accountants, the quality of
financial reporting.
The Audit Committee has also reviewed with Arthur Andersen LLP the matters
that may affect the independence of the accountants and has discussed with
Arthur Andersen LLP its independence with respect to the Company. Based on the
foregoing review and discussion, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in BTU International
Inc.'s Annual Report on Form 10K for the year ended December 31, 2000 for filing
with the Securities and Exchange Commission.
The Board of Directors, upon recommendation of the Audit Committee,
selected Arthur Andersen LLP as independent accountants of the Company for the
year ending December 31, 2000. The Audit Committee has not yet formally
recommended an independent accountants for the year ending December 31, 2001. We
expect that representatives of Arthur Andersen LLP will be present at the Annual
Meeting.
The following table describes the fees that Arthur Andersen LLP billed to
the Company for the fiscal year ended December 31, 2000. The Audit Committee of
the Board of Directors has considered the effect, if
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any, that non-audit services provided by Arthur Andersen LLP have or might have
on the continued independence of Arthur Andersen LLP.
OTHER FEES
FINANCIAL SYSTEMS DESIGN AND (PREPARATION OF
AUDIT FEES IMPLEMENTATION FEES TAX RETURNS) TOTAL
- ---------- ---------------------------- --------------- --------
$116,000 $59,450 $175,450
David A.B. Brown, Chairman
J. Chuan Chu
Joseph F. Wrinn
COMPARATIVE STOCK PERFORMANCE
The following graph shows the cumulative total return on BTU Common Stock
since December 31, 1994 compared to the Standard & Poors 500 Index and the
Standard & Poors Technology Sector Index. Historical stock price performance is
not necessarily indicative of future performance.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG BTU INTERNATIONAL, INC. THE S&P 500 INDEX
AND THE S&P TECHNOLOGY SECTOR INDEX
[PERFORMANCE LINE GRAPH]
BTU INTERNATIONAL, S & P TECHNOLOGY
INC. S & P 500 SECTOR
------------------ --------- ----------------
Dec 95 100.00 100.00 100.00
Dec 96 64.00 122.96 141.87
Dec 97 110.67 163.98 178.89
Dec 98 64.00 210.84 309.44
Dec 99 122.67 255.22 541.93
Dec 00 162.67 231.98 325.43
* $100 INVESTED ON 12/31/95 IN STOCK OR INDEX
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
2. TO AMEND THE RESTATED CERTIFICATE OF INCORPORATION
TO REMOVE CLASS A PREFERRED STOCK
Subject to stockholder approval at the Annual Meeting of Stockholders, the
Board of Directors approved on April 19, 2001, an amendment to the Company's
Restated Certificate of Incorporation.
The Company's Restated Certificate of Incorporation currently authorizes
the Company to issue 2,000,000 shares of Class A Preferred Stock and authorizes
the Board of Directors to issue 5,000,000 shares of Series Preferred Stock. In
connection with and following the Company's initial public offering in 1989, the
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Company redeemed all of the shares of Class A Preferred Stock then outstanding.
There are no shares of Class A Preferred Stock or Series Preferred Stock issued
and outstanding, and the Company does not have any plans to issue any such
shares.
In April 2001 the Board of Directors approved an amendment to the Company's
Restated Certificate of Incorporation which would restate the Restated
Certificate of Incorporation, remove all references to the Class A Preferred
Stock and reduce from 2,000,000 to zero (0) the number of shares of Class A
Preferred Stock that the Company is authorized to issue. Since the Company has
no plans to issue any shares of Class A Preferred Stock, this amendment would
have the effect of bringing the Company's Restated Certificate of Incorporation
up to date. The rights of holders of shares of Common Stock would not be
impaired by this proposed amendment. The Board of Directors would retain the
authority to issue up to 5,000,000 shares of Series Preferred Stock.
The Company is submitting this amendment to the Restated Certificate of
Incorporation for your approval. The Board of Directors unanimously recommends
that you vote "FOR" this proposal.
AUDIT MATTERS
Arthur Andersen LLP has examined the financial statements of the Company
for the year ended December 31, 2000. A representative of Arthur Andersen LLP is
expected to be present at the Annual Meeting and will be afforded the
opportunity to make a statement and to respond to appropriate questions from
stockholders.
STOCKHOLDER PROPOSALS
Proposals of stockholders submitted for consideration at the Annual Meeting
of Stockholders in 2001 must be received by the Company no later than December
17, 2001.
OTHER BUSINESS
The Board of Directors knows of no business that will come before the
meeting for action except as described in the accompanying Notice of Annual
Meeting of Stockholders. However, as to any such business, the persons
designated as proxies will have discretionary authority to act in their best
judgment.
FORM 10-K
A COPY OF BTU'S ANNUAL REPORT ON FORM 10-K, FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, IS PROVIDED TO YOU CONCURRENTLY WITH THIS PROXY STATEMENT.
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EXHIBIT A
BTU INTERNATIONAL, INC.
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
I. PURPOSE
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by:
1. Reviewing the financial reports and other financial information provided
by the Corporation to any governmental body or the public;
2. Reviewing the Corporation's system of internal controls regarding
finance, accounting, legal compliance and ethics that management and the Board
have established;
3. Reviewing the Corporation's auditing, accounting and financial reporting
processes;
4. Serving as an independent and objective party to monitor the
Corporation's financial reporting process and internal control system;
5. Reviewing and appraising the audit efforts of the Corporation's
independent accountants;
6. Providing an open avenue of communication among the independent
accountants, financial and senior management and the Board of Directors.
The Audit Committee will primarily fulfill these responsibilities by
carrying out the activities enumerated in Section IV of the Charter.
II. COMPOSITION
The Audit Committee shall be comprised of three directors, each of whom
shall be independent directors and free from any relationship that, in the
opinion of the Board, would interfere with the exercise of his or her
independent judgment as a member of the Committee.
Examples of such relationships might include:
- A director being employed by the Corporation or any of its affiliates for
the current year or any of the past five years;
- A director accepting any compensation from the Corporation or any of its
affiliates other than compensation for Board service or benefits under a
tax-qualified retirement plan;
- A director being a member of the immediate family of an individual who
is, or has been in any of the past five years, employed by the
Corporation or any of its affiliates as an executive officer;
- A director being a partner in, or a controlling shareholder or an
executive officer of, any for-profit business organization to which the
Corporation made, or from which the Corporation received, payments that
are or have been significant to the Corporation or business organization
in any of the past five years;
- A director being employed as an executive of another company where any of
the Corporation's executives serves on that company's Compensation
Committee.
A director who has one or more of these relationships may be appointed to
the Audit Committee if the Board, under exceptional and limited circumstances,
determines that membership on the Committee by the individual is required by the
best interest of the Corporation and its shareholders, and the Board discloses,
in the next annual proxy statement subsequent to such determination, the nature
of the relationship and the reasons for that determination.
A-1
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All members of the Committee shall have a working familiarity with basic
finance and accounting practices, and at least one member of the Committee shall
have accounting or related financial management expertise.
The members of the Committee shall be elected by the Board at the annual
meeting of the Board and shall serve on the Committee for a term coinciding with
their Board term. A Chair shall be appointed by the Board.
MEETINGS
The Committee shall meet at least two times annually, or more frequently as
circumstances dictate. The purpose of the two scheduled meetings of the Audit
Committee is to review and approve the annual financial results of the
Corporation prior to release and to review and approve the scope of the annual
audit to be performed by the Corporation's independent accountants. As part of
its job to foster open communication, the Committee should meet at least
annually with management and the independent accountants in separate executive
sessions to discuss any matters that the Committee and each of these groups
believe should be discussed privately. In addition, the Committee or at least
its Chair should meet with the independent accountants and management quarterly
to review the Corporation's financials consistent with IV.3 below.
RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Audit Committee shall:
Documents/Reports Review
1. Review and update this Charter periodically, as conditions dictate.
2. Review the organization's annual financial statements and any other
reports or other financial information submitted to any governmental body or the
public, including any certification, report, opinion or review rendered by the
independent accountants.
3. Review with financial management and the independent accountants each 10-Q
prior to its filing. The Chair of the Committee may represent the entire
Committee for purposes of this review.
4. Review with independent accountants the recommendations included in their
management letter, if any, and their informal observations regarding the
competence and adequacy of financial and accounting procedures of the
Corporation. On the basis of this review, make recommendations to the Board of
Directors for any changes that seem appropriate.
5. Prepare the minutes of each meeting and distribute to all members of the
Board of Directors. The permanent file of the minutes will be maintained by the
Secretary of the Corporation.
INDEPENDENT ACCOUNTANTS
6. Recommend to the Board of Directors the selection of the independent
accountants, considering independence and effectiveness. On an annual basis, the
Committee should review and discuss with the accountants all significant
relationships the accountants have with the Corporation to determine the
accountant's independence.
7. Review the performance of the independent accountants and approve any
proposed discharge of the independent accountants when circumstances warrant.
8. Periodically consult with the independent accountants out of the presence
of management about internal controls and the fullness and accuracy of the
organization's financial statements.
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FINANCIAL REPORTING PROCESS
9. In consultation with the independent accountants, review the integrity of
the organization's financial reporting process, both internal and external.
10. Consider the independent accountant's judgments about the appropriateness
of the Corporation's accounting principles as applied in its financial
reporting.
11. Consider and approve, if appropriate, major changes to the Corporation's
accounting principles and practices as suggested by the independent accountants
or management.
PROCESS IMPROVEMENT
12. Establish regular and separate systems of reporting to the Audit Committee
by management and independent accountants regarding any significant judgments
made in management's preparation of the financial statements and the view of
each as to appropriateness of such judgments.
13. Following completion of the annual audit, review separately with
management and the independent accountants any significant difficulties
encountered during the course of the audit, including any restrictions on the
scope of work or access to required information.
14. Review any significant disagreement among management and the independent
accountants in connection with the preparation of financial statements.
15. Review with the independent accountants and management the extent to which
changes or improvements in financial or accounting practices, as approved by the
Audit Committee, have been implemented.
ETHICAL AND LEGAL COMPLIANCE
16. Review the Company's operations and determine whether management has
established and maintains effective programs pertaining to the following:
a. Antitrust laws and policies;
b. Conflicts of interest;
c. Sensitive payments and political contributions;
d. Insider trading;
e. The use or misuse of corporate funds and confidential information;
f. Environmental practices;
g. Employment practices, including discrimination and sexual
harassment;
h. Electronic data processing and computer security;
i. Disaster recovery;
j. The Company's insurance programs covering the protection of the
business and assets.
17. Review management's monitoring of the Corporation's compliance with the
above programs and ensure that management has the proper review system in place
to ensure that Corporation's financial statements, report and other financial
information disseminated to governmental organizations and the public satisfy
legal requirements.
18. Review, with the organization's counsel, legal compliance matters
including corporate securities trading policies.
19. Review, with the organization's counsel, any legal matter that could have
a significant impact on the organization's financial statements.
20. Perform any other activities consistent with this Charter, The
Corporation's By-laws and government law, as the Committee or the Board deems
necessary or appropriate.
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0857-PS-01
16
DETACH HERE
PROXY
ANNUAL MEETING OF BTU INTERNATIONAL, INC.
JUNE 1, 2001
The undersigned hereby constitutes and appoints Paul J. van der Wansem
and Thomas P. Kealy, or either of them with power of substitution to each,
proxies to vote and set at the Annual Meeting of Stockholders on June 1, 2001
at 10:00 a.m., and at any adjournments thereof, upon and with respect to the
number of shares of Common Stock of the company as to which the undersigned may
be entitled to vote or act. The undersigned instructs such proxies, or their
substitutes, to vote in such manner as they may determine on any matters which
may come before the meeting, all as indicated in the accompanying Notice of
Meeting and Proxy Statement, receipt of which is acknowledged, and to vote on
the following as specified by the undersigned. all proxies heretofore given by
the undersigned in respect of said meeting are hereby revoked.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. Unless
otherwise specified in the boxes provided on the reverse side hereof, the proxy
will be voted IN FAVOR of all nominees for director, IN FAVOR of the amendment
to the Restated Certificate of Incorporation to remove the Class A Preferred
Stock from the shares eligible for issuance and in the discretion of the named
proxies as to any other matter that may come before this meeting or any
adjournment hereof.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
17
DETACH HERE
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
PLEASE DO NOT FOLD THIS PROXY.
1. To fix the number of Directors for 2. Approve the Amendment to the
the ensuing year at (4) and to Restated Certificate of
select the following (4) Directors. Incorporation to remove the
Class A Preferred Stock from the
Nominees: (01)Paul J. van der Wansem, Shares eligible for issuance.
(02)David A.B. Brown,
(03)J. Chuan Chu, and [ ]FOR [ ]AGAINST [ ]ABSTAIN
(04)Joseph F. Wrinn
[ ]FOR ALL NOMINEES
[ ]WITHHOLD FROM ALL NOMINEES
[ ]FOR ALL NOMINEES EXCEPT AS NOTED ABOVE
MARK HERE FOR ADDRESS CHANGE AND
NOTE AT LEFT [ ]
Please sign exactly as name(s)
appear hereon. When signing as
attorney, executor,
administrator, trustee, or
guardian, please sign your full
title as such. Each owner
should sign.
Signature____________________________ Date:___________
Signature:___________________________ Date:___________