Months of negotiations became reality Tuesday as a special prosecutor dropped malfeasance charges brought against two Radford patrol officers and the city’s former police chief.

Officer Chris Caldwell and 1st Sgt. Pete Rutzinski were exonerated and returned to active duty, prompting a rare outburst of applause from more than a dozen officers gathered in Radford Circuit Court for the hearing. Former Chief Wes Terry, who got his deal in return for agreeing to not sue the city over his sudden firing last month, left the courtroom without comment.

Terry’s departure, whether voluntary or otherwise, was pivotal to resolving the situation, said special prosecutor Fred King, commonwealth’s attorney in Salem. Losing his job was likely punishment enough, King said.

On Oct. 31, a special grand jury charged Terry, 59, with petit larceny, malfeasance in office and three counts of obtaining criminal history information under a false pretense, all misdemeanors stemming from an allegedly illegal search of an apartment on Aug. 30. Caldwell, 28, and Rutzinski, 30, were each charged with malfeasance in office in connection with the same search.

The original deal King proffered included Terry’s voluntary resignation in return for charges against all three being dropped, King told Circuit Judge Martin Clark Jr. of Patrick County.

Terry, who had also been suspended along with his officers, was fired Jan. 13.

In a written statement released by defense attorney Marc Long, Terry cited the misdemeanor charges as the reason for his firing. City officials have repeatedly declined to comment on the situation.

King said he then changed tactics, offering Terry a similar deal if he agreed to release the city from any liability over his termination.

“Having done that, we sought to extend the same offer to the subordinates,” King told the judge.

Caldwell took the deal. Rutzinski and his attorney, Jonathan Rogers, who had come to court Tuesday prepared for a jury trial on the charge, objected.

King had offered nolle prosequi, which means he reserved the ability to bring the charge back during the next year.

That, Rogers argued, wasn’t fair to Rutzinski.

Judge Clark agreed that the case didn’t fit the state statute allowing nolle prosequi and called the case for trial. King didn’t object and allowed Clark to dismiss the charge.

Caldwell’s attorney, David Lawrence, said they didn’t ask for the same treatment because their trial date wasn’t until April 20. Objecting to the nolle prosequi would have delayed any action until then, Lawrence said.

“It was more important, at this point, to get him back to work,” he said.

Virginia State Police were asked to investigate Terry after Sept. 1, when a 20-year-old Radford resident, Jon Byers, reported that his Marine Corps knife disappeared from his home after police searched it Aug. 30. Police arrived to investigate a noise complaint and saw marijuana and a smoking device through the open front door, King said.

Police walked in without knocking, without permission and without a search warrant and seized the drugs, which were in plain view, King said. Rutzinski stayed in the front room; Caldwell and Terry went into the rest of the apartment, he said.

Byers said an officer, later identified as Terry, walked out with a knife similar to his.

After Tuesday’s hearing, Rutzinski and Caldwell were sworn back in as police officers. They can come back to work immediately and return to patrol duties once they pass a firearms test, acting chief Gary Harmon said.

Terry, meanwhile, is still looking for another job, his attorney said.

In his written statement,Terry said he had worked to improve morale, curb high turnover rates and fix other problems in the department.

“There have been bumps in the road. Many of these issues had nothing to do with me,” the statement said.

Terry blamed city leaders for other problems facing the department, including a feder al lawsuit accusing the department of failing to pay officers for more than 40 hours of work each week.

“In bold leadership, there is risk,” he wrote. “I may have ruffled some feathers among those who are resistant to change. I regret that the city’s leadership was unwilling to stay the course and complete the reformation of the police department.”

The police chief’s job is posted on several police-employment Web sites with an application deadline of Feb. 20.