UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest reported event): FEBRUARY 18, 2005
BTU INTERNATIONAL, INC.
(Exact name of registrant as specified in its chapter)
DELAWARE 04-2781248
(State or other jurisdiction 0-17297 (IRS Employer
of incorporation) (Commission File Number) Identification No.)
23 ESQUIRE ROAD, N. BILLERICA, MASSACHUSETTS 01862
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (978) 667-4111
NOT APPLICABLE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
220.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
OPTION GRANTS
On February 18, 2005, the Compensation Committee awarded options to purchase an
aggregate of 150,000 shares of the Company's common stock at an exercise price
of $3.00 per share. The options have a seven-year term and vest ratably over
four years. The named executive officers below received the following amounts:
Paul van der Wansem 50,000 shares
RESTRICTED STOCK GRANTS
On February 18, 2005, the Compensation Committee also awarded an aggregate of
20,000 shares of restricted stock to 8 employees at $3.00 price per share. The
named executive officers below received the following amounts:
Thomas P. Kealy 3,000 shares
James M. Griffin 2,400 shares
ESTABLISHMENT OF 2005 BONUS TARGETS
On February 18, 2005, the Compensation Committee also adopted an Executive
Incentive Compensation Plan for 2005. The following named executive officers
are participants and can earn a bonus as a percentage of their annual base
salary in the ranges specified below if net income per share, after executive
bonuses, attain a specified target level:
At Target Maximum
100% Bonus Bonus Available
% of Annual Salary % of Annual Salary
------------------ ------------------
Paul van der Wansem 35% 70%
Thomas P. Kealy 25% 50%
James M. Griffin 20% 40%
No award will be made unless total annual 2005 net income is at least a
specified amount and other targets such as quarterly profitability, increasing
quarterly revenue from our Shanghai manufacturing operations, inventory turns
and receivable aging have been met. Between that amount and the target amount,
bonuses will be interpolated on a straight line basis. If the target amount is
exceeded, an additional bonus will be paid on a straight line up to a maximum
amount. The amount of cash bonus payable under any other incentive plan for the
same year shall be deducted from the amount payable hereunder.
ITEM 8.01. OTHER EVENTS.
ACCELERATION OF UNDERWATER STOCK OPTIONS
The Financial Accounting Standards Board recently published Statement of
Financial Accounting Standards No. 123, Share-Based Payment ("SFAS 123R"). SFAS
123R, which is effective on July 1, 2005, will require that compensation cost
related to share-based payment transactions, including stock options, be
recognized in the financial statements. Currently, the Company accounts for its
share-based payment transactions under Accounting Principles Board Opinion No.
25, Accounting for Stock Issued to Employees and its related interpretations,
which does not necessarily require the recognition of compensation cost in the
statement of earnings of the financial statements.
On February 18, 2005, the Compensation Committee approved accelerating the
vesting of 40,488 unvested underwater options held by 46 employees, including
17,250 options held by named executive officers. An option was considered
underwater if the option's exercise price was greater than the closing price,
$3.00, on the day before the Compensation Committee approved the acceleration.
The Company accelerated these options in advance of the effective date of SFAS
123R to avoid recording compensation expense for these options in its statement
of operations in future years when these options were originally scheduled to
vest. The named executive officers below had the following number of options
accelerated at the following weighted average exercise price per share:
AGGREGATE NUMBER OF WEIGHTED
SHARES ISSUABLE UNDER AVERAGE EXERCISE
ACCELERATED OPTIONS PRICE PER SHARE
--------------------- ----------------
Paul van der Wansem 11,250 $3.10
Thomas P. Kealy 2,250 $3.10
James M. Griffin 3,750 $3.10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BTU INTERNATIONAL, INC.
(Registrant)
Date: March 2, 2005 By: /s/ THOMAS P. KEALY
----------------------------------------
Name: Thomas P. Kealy
Title: Vice President, Corporate
Controller and Chief Accounting Officer