This excerpt taken from the BTUI 10-K filed Mar 16, 2007.
(12) RESTRUCTURING AND EXECUTIVE RETIREMENT
In the third quarter of 2004, the Company recorded restructuring charges of $1,648,000 in connection with the redirection of certain development programs and the reduction of 12 employees, including the previous CEO. Approximately $438,000 and $676,000 of the charges related to the write-off of goodwill and inventory, respectively. The balance represented employee severance and related costs.
In 2002, the Company entered into an executive retirement agreement with Mr. Paul J. van der Wansem, its then former President and Chief Executive Officer. Under the terms of the agreement, Mr. van der Wansem agreed to provide, at the Companys request and subject to certain limitations, consulting services over a four-year period ending June 2007 for $200,000 per year. The consulting agreement may be terminated by either party at any time. If terminated by the Company, Mr. van der Wansem is entitled to a lump sum payment for the remaining amounts due through June 2007; if terminated by Mr. van der Wansem, he is entitled to the same lump sum payment discounted as specified in the agreement. The agreement also provided for an initial bonus payment of $100,000 and the grant of 75,000 shares of unrestricted common stock. In the fourth quarter of 2002, the Company recorded a $990,000 charge in connection with the above-described portions of the agreement.
BTU INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
In addition, the Company agreed to compensate Mr. van der Wansem $100,000 per year in connection with his responsibilities as Chairman of the Board for the period July 2003 through June 2007. The Company has recognized these amounts as the services are performed. The agreement provides for certain settlement amounts if his responsibilities as Chairman of the Board are terminated.
As part of the agreement, the Company also granted Mr. van der Wansem the option to buy out the Companys interest in the cash value of the split dollar life insurance policy executed by the Company by paying an amount equal to the sum of the Companys interest, discounted by a rate of 3% over a period equal to the number of remaining years in his life expectancy at the time of the buy out as established in trade publications for the life insurance industry. In December 2003, Mr. van der Wansem exercised his option and paid approximately $117,000. The Company recorded a loss of approximately $115,000 as a selling, general and administrative expense in the accompanying consolidated statement of operations related to the sale.
In October 2004, Mr. van der Wansem resumed his positions as President and CEO of the Company. In connection therewith, Mr. van der Wansem and the Company agreed that the Company will cease making consulting payments to him under the agreement, but that upon his termination of employment the Company will make a lump-sum payment to him equal to the payments foregone. If his employment terminates before the end of the consulting period, the consulting period will resume on that date. In all other respects, the agreement remains in full force and effect.