-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CGI1T1rgq+eMWb/ha8yt506evJm0MjgpoXe6acO6+65G8My6P43E9BqZ8txmGOTM B7PdfTXJMF+K9vONcqBFNw== 0000808064-97-000012.txt : 19971212 0000808064-97-000012.hdr.sgml : 19971212 ACCESSION NUMBER: 0000808064-97-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19971031 FILED AS OF DATE: 19971211 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: C&D TECHNOLOGIES INC CENTRAL INDEX KEY: 0000808064 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690] IRS NUMBER: 133314599 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09389 FILM NUMBER: 97736588 BUSINESS ADDRESS: STREET 1: 1400 UNION MEETING ROAD CITY: BLUE BELL STATE: PA ZIP: 19422 BUSINESS PHONE: 2156192700 MAIL ADDRESS: STREET 1: 1400 UNION MEETING ROAD CITY: BLUE BELL STATE: PA ZIP: 19422 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ___________________ Commission File No. 1-9389 C&D TECHNOLOGIES, INC. (Exact name of Registrant as specified in its charter) Delaware 13-3314599 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1400 Union Meeting Road Blue Bell, Pennsylvania 19422 (Address of principal executive office) (Zip Code) (215) 619-2700 (Registrant's telephone number, including area code) ______________________________________________ (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO_____ Number of shares of the Registrant's Common Stock outstanding on December 8, 1997: 6,148,985 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES INDEX PART I. FINANCIAL INFORMATION Page No. Item 1 - Financial Statements Consolidated Balance Sheets - October 31, 1997 and January 31, 1997................. 3 Consolidated Statements of Income - Three and Nine Months Ended October 31, 1997 and 1996............................................. 5 Consolidated Statements of Cash Flows - Nine Months Ended October 31, 1997 and 1996........... 6 Notes to Consolidated Financial Statements............ 8 Report of Independent Accountants..................... 14 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations..... 15 PART II. OTHER INFORMATION 18 SIGNATURES 19 2 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (Unaudited) October 31, January 31, 1997 1997 ---- ---- ASSETS Current assets: Cash and cash equivalents................. $ 2,915 $ 952 Restricted cash and cash equivalents...... - 1 Accounts receivable, less allowance for doubtful accounts of $1,675 and $1,414, respectively................. 44,041 41,682 Inventories............................... 40,263 38,943 Deferred income taxes..................... 7,286 7,315 Other current assets...................... 1,153 437 ------- ------- Total current assets........... 95,658 89,330 Property, plant and equipment, net.............. 54,487 52,469 Intangible and other assets, net................ 5,839 6,208 Goodwill, net................................... 11,304 11,966 ------- ------- Total assets................... $167,288 $159,973 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt......... $ 390 $ 476 Accounts payable.......................... 22,806 23,730 Accrued liabilities....................... 17,867 14,468 Other current liabilities................. 3,292 5,220 ------- ------- Total current liabilities...... 44,355 43,894 Deferred income taxes........................... 4,328 3,923 Long-term debt.................................. 17,816 29,351 Other liabilities............................... 9,924 7,899 ------- ------- Total liabilities.............. $ 76,423 $ 85,067 ------- ------- The accompanying notes are an integral part of these statements. 3 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (continued) (Dollars in thousands) (Unaudited) October 31, January 31, 1997 1997 ---- ---- Commitments and contingencies Stockholders' equity: Common stock, $.01 par value, 10,000,000 shares authorized; 6,585,476 and 6,547,476 shares issued, respectively.................. 66 65 Additional paid-in capital................. 40,541 39,326 Minimum pension liability adjustment....... (136) (136) Treasury stock, at cost, 452,551 and 470,551 shares, respectively ......... (10,819) (11,232) Notes receivable from stockholder, net of discount of $33 and $85, respectively.......................... (1,024) (1,636) Cumulative translation adjustment.......... (310) (374) Retained earnings.......................... 62,547 48,893 ------- ------- Total stockholders' equity...... 90,865 74,906 ------- ------- Total liabilities and stockholders' equity.......... $167,288 $159,973 ======= ======= The accompanying notes are an integral part of these statements. 4 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data)
(Unaudited) (Unaudited) Three months ended Nine months ended October 31, October 31, 1997 1996 1997 1996 ---- ---- ---- ---- Net sales............................ $81,381 $76,576 $230,102 $210,753 Cost of sales........................ 60,725 58,314 170,989 162,089 ------ ------ ------- ------- Gross profit..................... 20,656 18,262 59,113 48,664 Selling, general and administrative expenses......... 9,678 9,326 28,543 25,422 Research and development expenses......................... 2,156 2,079 6,358 6,115 ------ ------ ------- ------- Operating income................. 8,822 6,857 24,212 17,127 Interest expense, net................ 301 388 1,041 941 Other expense (income), net.......... 132 (14) 843 113 ------ ------ ------- ------- Income before income taxes....... 8,389 6,483 22,328 16,073 Provision for income taxes........... 3,070 2,353 8,170 5,647 ------ ------ ------- ------- Net income....................... $ 5,319 $ 4,130 $ 14,158 $ 10,426 ====== ====== ======= ======= Net income per common and common equivalent share.......... $ 0.84 $ 0.65 $ 2.25 $ 1.60 ====== ====== ======= ======= Weighted average common and common equivalent shares......... 6,338 6,359 6,298 6,503 ====== ====== ======= ======= Dividends per share.................. $0.0275 $0.0275 $ 0.0825 $ 0.0825 ====== ====== ======= =======
The accompanying notes are an integral part of these statements. 5 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) Nine months ended October 31, 1997 1996 ---- ---- Cash flows provided (used) by operating activities: Net income ..................................... $ 14,158 $ 10,426 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization............. 8,770 6,422 Deferred income taxes..................... 434 936 Loss on disposal of assets................ 72 9 Changes in: Accounts receivable................. (2,443) (8,414) Inventories......................... (1,354) 1,020 Other current assets................ (717) (388) Accounts payable.................... (921) 4,469 Accrued liabilities................. 3,580 642 Income taxes payable................ (123) 1,672 Other current liabilities........... (1,459) 780 Other liabilities................... 2,178 1,222 Other, net................................ 269 (244) ------ ------ Net cash provided by operating activities........... 22,444 18,552 ------ ------ Cash flows provided (used) by investing activities: Acquisition of businesses, net of cash acquired..................................... - (19,739) Acquisition of property, plant and equipment ... (9,266) (12,329) Proceeds from disposal of property, plant and equipment ................................... 13 - Change in restricted cash....................... 1 4,745 ------ ------ Net cash used by investing activities............... (9,252) (27,323) ------ ------ Cash flows provided (used) by financing activities: Repayment of long-term debt..................... (11,621) (7,983) Proceeds from new borrowings.................... - 23,012 Proceeds from issuance of common stock.......... 435 1,096 Payment of common stock dividends............... (671) (527) Purchase of treasury stock...................... - (10,584) Note receivable from stockholder in connection with issuance of common stock...... - (1,057) Repayment of note receivable from stockholder... 664 - ------ ------ The accompanying notes are an integral part of these statements. 6 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (Dollars in thousands) (Unaudited) Nine months ended October 31, 1997 1996 ---- ---- Net cash (used) provided by financing activities.... (11,193) 3,957 ------ ------ Effect of exchange rate changes on cash............. (36) 4 ------ ------ Increase (decrease) in cash and cash equivalents.... 1,963 (4,810) Cash and cash equivalents at beginning of period........................................ 952 5,472 ------ ------ Cash and cash equivalents at end of period.......... $ 2,915 $ 662 ====== ====== SUPPLEMENTAL CASH FLOW DISCLOSURES Interest paid, net of amount capitalized............ $ 1,294 $ 1,115 Income taxes paid................................... 7,859 3,039 SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES Acquired businesses*: Estimated fair value of assets acquired....... $ - $13,544 Goodwill and identifiable intangible assets . ................................... - 12,655 Purchase price obligations.................... - (1,358) Cash paid, net of cash acquired............... - (19,739) ------ ------ Liabilities assumed........................... $ - $ 5,102 ====== ====== Dividends declared but not paid..................... $ - $ 167 Note receivable from stockholder in connection with issuance of common stock..................... $ - $ 664 Fair market value of treasury stock issued to pension plans .................................... $ 847 $ 1,208 *Restated to include final opening balance sheet adjustments as of January 31, 1997. The accompanying notes are an integral part of these statements. 7 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands except per share data) (UNAUDITED) 1. INTERIM STATEMENTS The accompanying interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's Annual Report to Shareholders for the fiscal year ended January 31, 1997. The January 31, 1997 amounts were derived from the Company's audited financial statements. The consolidated financial statements presented herein are unaudited but, in the opinion of management, include all necessary adjustments (which comprise only normal recurring items) required for a fair presentation of the consolidated financial position as of October 31, 1997 and the consolidated statements of income for the three and nine months ended October 31, 1997 and 1996 and the consolidated statements of cash flows for the nine months ended October 31, 1997 and 1996. However, interim results of operations necessarily involve more estimates than annual results and may not be indicative of results for the full fiscal year. 2. INVENTORIES Inventories consisted of the following: October 31, January 31, 1997 1997 ---- ---- Raw materials ........................... $17,048 $17,506 Work-in-progress ........................ 11,065 11,599 Finished goods .......................... 12,150 9,838 ------ ------ $40,263 $38,943 ====== ====== 3. INCOME TAXES A reconciliation of the provision for income taxes from the statutory rate to the effective rate is as follows: Nine months ended October 31, 1997 1996* ---- ---- U.S. statutory income tax ...................... 35.0% 35.0% State tax, net of federal income tax benefit.... 3.4 3.6 Reduction of taxes provided in prior years...... - (1.9) Foreign sales corporation ...................... (1.1) (0.7) Tax effect of foreign operations ............... (0.9) (0.9) Other........................................... 0.2 - ---- ---- 36.6% 35.1% ==== ==== * Reclassified for comparative purposes. 8 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands except per share data) (UNAUDITED) 4. CONTINGENT LIABILITIES With regard to the following contingent liabilities there have been no material changes since January 31, 1997. Because the Company uses lead and other hazardous substances in its manufacturing processes, it is subject to numerous federal, Canadian, Mexican, Irish state and local laws and regulations that are designed to protect the environment and employee health and safety. These laws and regulations include requirements of periodic reporting to governmental agencies regarding the use and disposal of hazardous substances and compliance with rigorous criteria regarding exposure to employees and the disposal of scrap. In the opinion of the Company, the Company complies in all material respects with these laws and regulations. Notwithstanding such compliance, if damage to persons or the environment has been or is caused by hazardous substances used or generated in the conduct of the Company's business, the Company may be held liable for the damage and be required to pay the cost of remedying the same, and the amount of any such liability might be material to the results of operations or financial condition. However, under the terms of the purchase agreement with Allied for the Acquisition of the Company (the Acquisition Agreement), Allied is obligated to indemnify the Company for any liabilities of this type resulting from conditions existing at January 28, 1986 that were not disclosed by Allied to the Company in the schedules to the Acquisition Agreement. The Company, along with numerous other parties, has been requested to provide information to the United States Environmental Protection Agency (the EPA) in connection with investigations of the source and extent of contamination at several lead smelting facilities (the Third Party Facilities) to which the Company had made scrap lead shipments for reclamation prior to the date of the Acquisition. As of January 16, 1989, the Company, with the concurrence of Allied, entered into an agreement with other potentially responsible parties (PRPs) relating to remediation of a portion of one of the Third Party Facilities, the former NL Industries (NL), facility in Pedricktown, New Jersey (the NL Site), which agreement provides for their joint funding on a proportionate basis of certain remedial investigation and feasibility study activities with respect to that site. 9 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share data) (UNAUDITED) 4. CONTINGENT LIABILITIES (continued) In fiscal 1993 in accordance with an EPA order, a group comprised of the Company and 30 other parties commenced work on the cleanup of a portion of the NL Site based on a specified remedial approach which is now completed. The Company did not incur costs in excess of the amount previously reserved. With regard to the remainder of the NL Site, the EPA is pursuing negotiations with NL and the other PRPs, including the Company, regarding the conduct and funding of the remedial work plan. The EPA has proposed a cost allocation plan, however, the allocation percentages between parties and the basis for allocation of cost are not defined in the plan or elsewhere. Therefore, a reliable range of the potential cost to the Company of this phase of the clean-up cannot currently be determined. Accordingly, the Company has not created any reserve for this potential exposure. The remedial investigation and feasibility study at a second Third Party Facility, the former Tonolli Incorporated facility at Nesquehoning, Pennsylvania (the Tonolli Site), was completed in fiscal 1993. The EPA and the PRPs are continuing to evaluate the draft remedial design work plan for the site. Based on the estimated cost of the remedial approach selected by the EPA, the Company believes that the potential cost of remedial action at the Tonolli Site is likely to range between $16,000 and $17,000. The Company's allocable share of this cost has not been finally determined, and will depend on such variables as the financial capability of various other PRPs to fund their respective allocable shares of the remedial cost. Based on currently available information, however, the Company believes that its most likely exposure with respect to the Tonolli Site will not exceed the $579 previously reserved, the majority of which is expected to be paid over the next one to three years. The Company expects to recover a portion of its monetary obligations for the remediation of the Tonolli site through litigation against third parties and recalcitrant PRPs. The Company has responded to requests for information from the EPA with regard to four other Third Party Facilities, one in September 1991, one (the Chicago Site) in October 1991, one (the ILCO Site) in October 1993 and the fourth (Bern Metal Super Fund Site) in March 1997. Of the four sites, the Company has been identified as a PRP at the ILCO and Chicago Sites only. In July 1997, Allied accepted responsibility for the Bern Metal Super Fund Site. Based on currently available information, the Company believes that the potential cost of remediation at the ILCO Site is likely to range between $54,000 and $59,000 (based on the estimated costs of the remedial approach selected by the EPA). The Company's allocable share of this cost has not been finally determined and will depend on such variables as the financial capability 10 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share data) (UNAUDITED) 4. CONTINGENT LIABILITIES (continued) of various other PRPs to fund their respective allocable shares of the remedial cost. However, on October 31, 1995 the Company received confirmation from the EPA that it is a de minimis PRP at the ILCO Site and the Company has accepted a proposed buyout offer from the EPA. Based on currently available information the Company believes that its most likely exposure with respect to the ILCO Site is an immaterial amount which has been previously reserved, the majority of which is expected to be paid over the next year. Based on currently available information, the Company believes that the potential cost of the remediation at the Chicago Site is likely to range between $8,000 and $10,500 (based on the preliminary estimated costs of the remediation approach negotiated with the EPA). Sufficient information is not available to determine the Company's allocable share of this cost. Based on currently available information, however, the Company believes that its most likely exposure with respect to the Chicago Site will be the approximately $283 previously reserved, the majority of which is expected to be paid over the next two to five years. Allied has accepted responsibility under the Acquisition Agreement for potential liabilities relating to all Third Party Facilities other than the aforementioned Sites. Based on currently available information, management of the Company believes that the foregoing will not have a material adverse effect on the Company's financial condition or results of operations. 5. ACQUISITIONS Effective February 22, 1996 the Company acquired certain equipment and inventory of LH Research, Inc. (LH) used in its power supply business, along with all rights to the name "LH Research." In addition, effective March 12, 1996, the Company acquired from Burr-Brown Corporation its entire interest in Power Convertibles Corporation (PCC), consisting of 1,044,418 shares of PCC common stock and all outstanding preferred stock, and also acquired or repaid $5,158 of indebtedness of PCC. On April 26, 1996, the Company acquired 190,000 shares of PCC common stock from the former chief executive officer of PCC, which together with the shares previously acquired represented in excess of 99.6% of the outstanding PCC common stock. As of May 29, 1996, the Company purchased all remaining shares of PCC common stock and shares of PCC common stock issuable upon exercise of stock options. 11 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share data) (UNAUDITED) 5. ACQUISITIONS (continued) The acquisitions were recorded using the purchase method of accounting. The aggregate purchase prices were $4,428 and $16,932 for LH and PCC, respectively. The purchase prices were allocated on the basis of the estimated fair market values of the assets acquired and liabilities assumed. The results of operations are included in the Company's consolidated financial statements from the date of acquisition. The following unaudited pro forma financial information combines the consolidated results of operations as if both acquisitions had occurred as of the beginning of the periods presented. Pro forma adjustments include only the effects of events directly attributed to a transaction that are factually supportable and expected to have a continuing impact. The pro forma adjustments contained in the table below include amortization of intangibles, interest expense on the acquisition debt, elimination of interest expense on debt not acquired, reduction of certain selling, general and administrative expenses and the related income tax effects. Nine months ended October 31, 1996 ------------------ Net sales.............................. $212,676 Net income............................. $ 10,172 Net income per common share ........... $ 1.56 The pro forma financial information does not necessarily reflect the operating results that would have occurred had the acquisitions been consummated as of the above dates, nor is such information indicative of future operating results. In addition, the pro forma financial results contain estimates since the acquired businesses did not maintain information on a period comparable with the Company's fiscal year-end. 6. STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS NOT YET ADOPTED In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share." SFAS No. 128 specifies new standards designed to improve the earnings per share (EPS) information provided in financial statements by simplifying the existing computational guidelines, revising the disclosure requirements, and increasing the comparability of EPS data on an international basis. Some of the changes made to simplify the EPS computations include: (i) eliminating the presentation of primary EPS and replacing it with basic EPS, with the principal difference being that common stock equivalents are not considered in computing basic EPS, (ii) eliminating the modified treasury stock method and the three percent 12 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share data) (UNAUDITED) 6. STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS NOT YET ADOPTED (continued) materiality provision and (iii) revising the contingent share provisions and the supplemental EPS data requirements. The new rule will require specific disclosure of both basic earnings per share and diluted earnings per share. SFAS No. 128 also makes a number of changes to existing disclosure requirements. SFAS No. 128 is effective for financial statements issued for periods ending after December 15, 1997. Pro forma amounts (unaudited) assuming the new accounting principle was applied during all periods presented follow. Three Months Ended Nine Months Ended October 31, October 31, ------------------ ----------------- 1997 1996 1997 1996 ---- ---- ---- ---- Net income per common share $ 0.87 $ 0.66 $ 2.32 $ 1.65 ===== ===== ===== ===== Diluted net income per common share $ 0.84 $ 0.65 $ 2.25 $ 1.60 ===== ===== ===== ===== 13 REPORT OF INDEPENDENT ACCOUNTANTS To the Stockholders and Board of Directors of C&D TECHNOLOGIES, INC. We have reviewed the accompanying consolidated balance sheet of C&D TECHNOLOGIES, INC. and Subsidiaries as of October 31, 1997, the related consolidated statements of income for the three and nine months ended October 31, 1997 and 1996 and the related consolidated statements of cash flows for the nine months ended October 31, 1997 and 1996. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of January 31, 1997 and the related consolidated statements of income, stockholders' equity and cash flows for the year then ended (not presented herein); and in our report dated March 14, 1997, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of January 31, 1997, is fairly presented, in all material respects, in relation to the consolidated balance sheet from which it has been derived. COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center Philadelphia, Pennsylvania November 25, 1997 14 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net sales for the fiscal 1998 third quarter and nine months ended October 31, 1997 increased $4,805,000 or six percent and $19,349,000 or nine percent, respectively, compared to the equivalent periods in fiscal 1997. The increase in fiscal 1998 third quarter sales over the same quarter of the prior fiscal year was primarily due to a 15 percent increase in sales of both telecommunications-related products and non-telecommunications-related power conversion products, partially offset by lower UPS and government sales. On a company-wide basis, fiscal 1998 third quarter telecommunications-related sales were approximately 50 percent of total company sales versus 46 percent of sales for the third quarter of fiscal 1997. The increase in sales for the nine months ended October 31, 1997 compared to the equivalent period in fiscal 1997 was primarily due to higher telecommunications sales, non-telecommunications-related power conversion sales, and motive power sales, up 12 percent, 13 percent and 7 percent, respectively, partially offset by lower government sales. A portion of the sales increase during the first nine months of fiscal 1998 resulted from the recording of a full nine months of sales versus a partial nine-month period in the comparable period of the prior fiscal year due to the acquisition of two power conversion companies during the first quarter of fiscal 1997. On a company-wide basis, telecommunications-related sales for the first nine months of fiscal 1998 were approximately 48 percent of total company sales versus 46 percent for the comparable period of the prior year. Gross profit increased $2,394,000 or 13 percent for the third quarter of fiscal 1998 and increased $10,449,000 or 21 percent for the nine-month period ended October 31, 1997 as compared to the same periods in the prior year. Gross margin increased to 25.4 percent for the third quarter of fiscal 1998 versus 23.8 percent for the comparable quarter of the prior year. For the nine months ended October 31, 1997, gross margin increased to 25.7 percent, up from 23.1 percent from the same nine-month period of fiscal 1997. Gross margins for both the fiscal 1998 third quarter and nine months ended October 31, 1997 increased primarily as a result of lower material costs and shift in product mix. Selling, general and administrative expenses remained proportional to sales at 12 percent of sales for the third quarter and first nine months of both fiscal 1998 and 1997. Selling, general and administrative expenses for the three months ended October 31, 1997 increased $352,000 or four percent over the comparable period of the prior year primarily due to higher payroll related costs partially offset by lower variable selling expense. For the nine-month period ended October 31, 1997, selling, general and administrative expenses increased $3,121,000 or 12 percent over the same period of the prior year. This increase was primarily due to higher payroll related costs, goodwill amortization, due diligence costs, and the resolution of legal disputes, partially offset by lower variable selling expense. A portion of this increase in selling, general and administrative expenses during the first nine months of Fiscal 1998 resulted from the recording of a full nine months of expenses versus a partial nine-month period in the comparable period of the prior fiscal year due to the acquisition of two power conversion companies during the first quarter of fiscal 1997. 15 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Research and development expenses remained proportional to sales at three percent of sales for the third quarter and first nine months of both fiscal 1998 and 1997. Interest expense, net, decreased $87,000 in the third quarter of fiscal 1998 versus the third quarter of fiscal 1997 primarily due to lower debt balances outstanding offset partially by lower capitalized interest. For the nine-month period ended October 31, 1997, interest expense, net, increased $100,000 over the comparable period of the prior year as a result of lower capitalized interest related to plant expansions and lower interest income, which was partially offset by lower debt balances outstanding. Other expense, net, for the third quarter of fiscal 1998 increased $146,000 primarily due to a foreign exchange loss in the current quarter versus a foreign exchange gain during the same quarter of the prior year. For the nine months ended October 31, 1997, other expense, net, increased $730,000 over the comparable period of the prior year primarily as a result of higher amortization expense associated with the write-off of capitalized debt acquisition costs related to the company's current credit facility and the Development Authority of Rockdale County Industrial Revenue Bonds (Georgia Bonds) and lower non-operating income. Other expense, net, also increased due to a foreign exchange loss for the first nine months of fiscal 1998 versus a foreign exchange gain during the same period of the prior year. As a result of the above, income before income taxes increased 29 percent for the third quarter of fiscal 1998 and increased 39 percent for the nine-month period ended October 31, 1997 versus the comparable periods of the prior year. Net income for the third quarter increased 29 percent over the third quarter in the prior year to $5,319,000 or 84 cents per share and increased 36 percent over the first nine months of the prior year to $14,158,000 or $2.25 per share. 16 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities increased 21 percent to $22,444,000 for the nine-month period ended October 31, 1997 compared to $18,552,000 in the comparable period of the prior year. This increase was primarily due to higher net income and depreciation and amortization expense during the first nine months of fiscal 1998, less of an increase in accounts receivable and a greater increase in accrued liabilities versus the first nine months of the prior year. These changes resulting in higher cash flows from operations were partially offset by decreases in accounts payable and other current liabilities during the first nine months of the current year versus increases during the comparable period of the prior year, coupled with an increase in inventories versus a decrease in the prior year. Net cash used by investing activities totaled $9,252,000 for the nine-month period ended October 31, 1997, resulting in a decrease of $18,071,000 versus the same period of the prior year which included the purchase by the Company of PCC and certain equipment and inventory of LH, as well as higher capital spending. The decrease in restricted cash for the first nine months of fiscal 1997 resulted from the use of proceeds obtained from the Georgia Bonds. The Company exercised its option and redeemed the Georgia Bonds during the second quarter of fiscal 1998. Net cash used by financing activities was $11,193,000 for the nine-month period ended October 31, 1997 compared to net cash provided by financing activities of $3,957,000 in the comparable period of the prior year. The additional borrowings in the prior year's first nine months were used primarily for the funding of the acquisitions of PCC and LH and the purchase of stock in a stock repurchase program. The Company's availability under the current loan agreement is expected to be sufficient to meet its ongoing cash needs for working capital requirements, debt service, capital expenditures and possible strategic acquisitions. Capital expenditures in the first nine months of fiscal 1998 were incurred primarily to fund capacity expansion, new product development, a continuing series of cost reduction programs, normal maintenance capital, and regulatory compliance. Fiscal 1998 capital expenditures are expected to be approximately $14,000,000 for similar purposes. FORWARD LOOKING STATEMENTS Certain information contained in this Quarterly Report on Form 10-Q, including, without limitation, information appearing under Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," are forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Factors that appear with the forward-looking statements, or in the Company's other Securities and Exchange Commission filings, could affect the Company's actual results and could cause the Company's actual results to differ materially from those expressed in any forward-looking statements made by the Company in this Quarterly Report on Form 10-Q. 17 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 10.1 Employment Agreement, dated September 30, 1997, between John J. Murray, Jr. and the Company (filed herewith). 10.2 Supplemental Executive Retirement Plan dated December 11, 1997 (filed herewith). 10.3 Supplemental Executive Retirement Plan for Alfred Weber dated December 11, 1997 (filed herewith). 11. Computation of per share earnings (filed herewith). 15. Letter from Coopers & Lybrand L.L.P., independent accountants for the Company, regarding unaudited interim financial information (filed herewith). 27. Financial Data Schedule (filed herewith). (b) Reports on Form 8-K: None 18 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 thereunto duly authorized. C&D TECHNOLOGIES, INC. December 11, 1997 BY: /s/ Alfred Weber --------------------------------- Alfred Weber Chairman, President and Chief Executive Officer December 11, 1997 BY: /s/ Stephen E. Markert, Jr. ---------------------------------- Stephen E. Markert, Jr. Vice President Finance (Principal Financial and Accounting Officer) 19 EXHIBIT INDEX 10. Employment Agreement, dated September 30, 1997, between John J. Murray, Jr. and the Company. 10.2 Supplemental Executive Retirement Plan dated December 11, 1997. 10.3 Supplemental Executive Retirement Plan for Alfred Weber dated December 11, 1997. 11. Computation of per share earnings. 15. Letter from Coopers & Lybrand L.L.P., independent accountants for the Company, regarding unaudited interim financial information. 27. Financial Data Schedule. 20 EX-10.1 2 EXHIBIT 10.1 C&D TECHNOLOGIES, INC. 1400 Union Meeting Road Blue Bell, PA 19422 September 30, 1997 John J. Murray, Jr. 4100 Meadow Lane Echo Valley Newtown Square, PA 19073 Dear John: C&D Technologies, Inc., a Delaware corporation (the "Company"), agrees to employ you, and you agree to accept such employment, under the following terms and conditions: I. TERM OF EMPLOYMENT. 1.1 Except for earlier termination as is provided in Section 10 below, your employment under this Agreement shall be for a term (the "Initial Term") commencing on October 13, 1997 (the "Effective Date") and terminating on October 12, 1998. 1.2 This Agreement shall be automatically renewed for successive terms of one month each, unless either party shall have given to the other party at least 30 days' prior written notice of the termination of this Agreement. If such 30 days' prior written notice is given by either party, (i) the Company shall, without any liability to you, have the right, exercisable at any time after such notice is sent, to elect any other person to the office or offices in which you are then serving and to remove you from such office or offices, but (ii) all other obligations each of you and the Company have to the other, including the Company's obligation to pay your compensation and make available the medical and dental insurance which you are entitled hereunder, shall continue until the date your employment terminates as specified in such notice. 1 John J. Murray September 30, 1997 2. COMPENSATION. 2.1 You shall be compensated for all services rendered by you under this Agreement at the rate of $125,000.00 per annum (such salary, as it is from time to time adjusted, is herein referred to as the "Base Salary"). Such Base Salary shall be payable in periodic installations twice monthly in accordance with the Company's payroll practices for salaried employees. The Compensation Committee of the Board of Directors shall review such Base Salary prior to October 31,1998 and each year thereafter during the term of this Agreement, including any renewal term, and shall make such adjustments, if any, as the Compensation Committee of the Board shall determine; provided, however, that no adjustment shall reduce the Base Salary below $125,000.00 2.2 If your employment hereunder shall be terminated (i) by the Company without Cause (as defined in Section 10.3) therefor having been given to you (other than pursuant to Sections 10.1 or 10.2), or (ii) as a result of the non-renewal of this Agreement by the Company upon expiration of the Initial Term or any renewal term, then for a one year period after the effective date of such termination the Company shall pay you at the rate of your Base Salary in effect at the time of such termination. 3. DUTIES. 3.1 During the term of your employment hereunder, including any renewal thereof, you agree to serve as the Vice President & General Manager Motive Power Division, or in such other capacity with duties and responsibilities of a similar nature as those initially undertaken by you hereunder as the President of the Company may from time to time determine. Your duties may be changed at any time and from time to time hereafter, upon mutual agreement, in a manner appropriate to the Company for the times and circumstances for which the change is to be made. You also agree to perform such other services and duties consistent with the office or offices in which you are serving and its responsibilities as may from time to time be prescribed by the Board of Directors, and you also agree to serve, if elected, as an officer and/or director of the Company, and/or any of the Company's other direct or indirect subsidiaries, in all cases in conformity to the by-laws 2 John J. Murray September 30, 1997 of each such corporation. Unless you otherwise agree, you will not be required to relocate from [the Company's headquarters in the Blue Bell, Pennsylvania area]. 3.2 You shall devote your full employment energies, interest, abilities, time and attention during normal business hours (excluding the vacation periods provided in Section 4.2 below) exclusively to the business and affairs of the Company, its parent corporation and subsidiaries, if any, and shall not engage in any activity which conflicts or interferes with the performance of duties hereunder. 3.3 You agree to cooperate with the Company, including taking such reasonable medical examinations as may be necessary, in the event the Company shall desire or be required (such as pursuant to the terms of any bank loan or any other agreement) to obtain life insurance insuring your life. 3.4 You shall, except as otherwise provided herein, be subject to the Company's rules, practices and policies applicable to the Company's senior executive employees. Without limiting the generality of the foregoing, you shall, with respect to the Company and its parent, subsidiaries, assets and stockholders, act in a manner consistent with your fiduciary responsibilities as an executive of the Company. 4. BENEFITS. 4.1 You shall have the benefit of such life and medical insurance, bonus, stock option and other similar plans as the Company may have or may establish from time to time, and in which you would be entitled to participate, by reason of your position with the Company, pursuant to the terms thereof. Also to the extent you have met the qualifications required, you may participate in the Company's Savings and Retirement plans. The foregoing, however, shall not be construed to require the Company to establish any such plans or to prevent the Company from modifying or terminating any such plans, and no such action or failure thereof shall affect this Agreement. 4.2 You shall be entitled to a vacation of four (4) weeks each year. 4.3 The Company will provide you with an annual physical examination 3 John J. Murray September 30, 1997 5. WORKING AND OTHER FACILITIES. During the Initial Term of this Agreement and any renewal term thereof, you shall be furnished with such working facilities and other services as are suitable to your position and adequate for the performance of your duties. 6. EXPENSES. The Company will reimburse you for reasonable expenses, (consistent with Company policy), including traveling expenses, incurred by you in connection with the business of the Company upon the presentation by you of appropriate substantiation for such expenses. 7. RESTRICTIVE COVENANTS. 7.1 During such time as you shall be employed by the Company, and for a period of one year thereafter, you shall not, without the written consent of the Board of Directors, directly or indirectly become associated with, render services to, invest in, represent, advise or otherwise participate as an officer, employee, director, stockholder, partner, agent of or consultant for, any business which is competitive with the business in which the Company is engaged at the time your employment with the Company ceases (a "Competitive Business"); PROVIDED, HOWEVER, that nothing herein (i) shall prevent you from investing without limit in the securities of any company listed on a national securities exchange, PROVIDED that your involvement with any such company is solely that of a stockholder, and (ii) is intended to prevent you from being employed during the one-year period following the termination of your employment with the Company referred to herein by any business other than a Competitive Business. 7.2 The parties hereto intend that the covenant contained in this Section 7 shall be deemed a series of separate covenants for each state, county and city. If, in any judicial proceeding, a court shall refuse to enforce all the separate covenants deemed included in this Section 7, because, taken together, they cover too extensive a geographic area, the parties intend that those of such covenants (taken in order of the states, counties and cities therein which are least populous), which, if eliminated, would permit the remaining separate 4 John J. Murray September 30, 1997 covenants to be enforced in such proceeding, shall, for the purpose of such proceeding, be deemed eliminated from the provisions of this Section 7. 8. CONFIDENTIALITY, NON-INTERFERENCE, INVENTIONS AND PROPRIETARY INFORMATION. 8.1 CONFIDENTIALITY. In the course of (i) your employment by the Company hereunder, and (ii) your prior employment with the Company, you will have and have had access to confidential or proprietary data or information of the Company. You will not at any time divulge or communicate to any person nor shall you direct any Company employee to divulge or communicate to any person (other than to a person bound by confidentiality obligations similar to those contained herein and other than as necessary in performing your duties hereunder) or use to the detriment of the Company any of such data or information. The provisions of this Section 8.1 shall survive your employment hereunder, whether by the normal expiration thereof or otherwise. The term "confidential or proprietary data or information" as used in this Agreement shall mean information not generally available to the public, including, without limitation, personnel information, financial information, customer lists, supplier lists, product and tooling specifications, trade secrets, product composition and formulae, tools and dies, drawings and schematics, manufacturing processes, knowhow, computer and any other processed or collated data, computer programs, pricing, marketing and advertising data. 8.2 NON-INTERFERENCE. You agree that you will not at any time after the termination of your employment by the Company, for your own account or for the account of any other person, interfere with the Company's relationship with any of its suppliers, customers or employees; PROVIDED that your employment by a competitor of the Company, if not in violation of your non-competition agreement contained in Section 7.1 above, and your contacting of suppliers and customers in connection therewith, if not in violation of Section 8.1 above or Sections 8.3 or 8.4 below, shall not constitute "interference" hereunder. 5 John J. Murray September 30, 1997 8.3 INVENTIONS. It is understood that you may, during your employment, conceive or develop certain inventions, innovations or discoveries related to any business in which the Company may be engaged, either solely or jointly with others. In connection with the conception or development thereof, you agree to disclose promptly to the Company all such inventions, innovations and discoveries, to assign, and hereby do assign, to the Company all of your right, title and interest in and to said inventions, innovations and discoveries, and to do all things and sign all documents deemed by the Company to be necessary or appropriate to vest in it, its successors and assigns, all of your right, title and interest in and to such inventions, innovations or discoveries, and to procure for it, at the Company's expense, patents, copyrights and/or trademarks covering such inventions, innovations or discoveries in the United States and its possessions and in foreign countries, at the discretion and under the direction of the Company. In the event the Company is unable for any reason to assure your signature on such documents, you irrevocably appoint the Company and its duly authorized officers and agents as your agents and attorneys-in-fact to execute such documents and to do such things with the same legal force and effect as if executed or done by you. 8.4 RETURN OF PROPERTY. All written materials, records and documents made by you or coming into your possession during your employment concerning any products, processes or equip- ment, manufactured, used, developed, investigated or con- sidered by the Company or otherwise concerning the business or affairs of the Company, shall be the sole property of the Company, and upon termination of your employment, or upon request of the Company during your employment, you shall promptly deliver the same to the Company. In addition, upon termination of your employment, or upon request of the Company during your employment, you will deliver to the Company all other Company property in your possession or under your control, including but not limited to, financial statements, marketing and sales data, patent applications, drawings and other documents, and all Company credit cards and automobiles. 6 John J. Murray September 30, 1997 9. EQUITABLE RELIEF. With respect to the covenants contained in Sections 7 and 8 of this Agreement, you agree that any remedy at law for any breach of said covenants may be inadequate and that the Company shall be entitled to specific performance or any other mode of injunctive and/or other equitable relief to enforce its rights hereunder or any other relief a court might award. 10. EARLIER TERMINATION. Your employment hereunder shall terminate prior to the Initial Term (or any renewal term, in the event of renewal) on the following terms and conditions: 10.1 This Agreement shall terminate automatically on the date of your death. Notwithstanding the foregoing the Company shall (i) continue to make payments to your estate of your Base Salary as then in effect pursuant to this Agreement for six (6) months after your death, and (ii) pay your estate any reimbursable expenses which otherwise would have been paid to you to the date of your death. 10.2. This Agreement shall be terminated if you are unable to perform your duties hereunder for a period of any 180 days in any 365 consecutive day period by reason of physical or mental disability. Notwithstanding the foregoing, it this Agreement is terminated pursuant to this Section, the Company shall pay any accrued but unpaid Base Salary through the date of termination and any reimburseable expenses due to you hereunder. For purposes of this Agreement "physical or mental disability" shall mean your inability, due to health reasons, to discharge properly your duties of employment, supported by the opinion of a physician satisfactory to both you and the Company. If the parties do not agree on a physician mutually satisfactory to both you and the Company within ten days of written demand by one or the other, a physician shall be selected by the president of the Pennsylvania Medical Association, and the physician shall, within 30 days thereafter, make a determin- ation as to whether disability exists and certify the same in writing. Services of the physician shall be paid for by the Company. You shall fully cooperate with the examining physician including submitting yourself to such examinations as may be requested by the physician for the purpose of determining whether you are disabled. 7 John J. Murray September 30, 1997 10.3. This Agreement shall terminate immediately upon the Company's sending you written notice terminating your employment hereunder for Cause. The Company may terminate this Agreement for Cause, but only after written notice specifying the Cause of such action shall have been rendered to you by the President of the Company. "Cause" shall mean any of the following: (i) Breach of this Agreement. (ii) Refusal or inability (other than pursuant to Sections 10.1 or 10.2) to perform duties assigned in accordance with the terms of this Agreement or overt and willful disobedience of orders or directives issued to you by the Company and within the scope of your duties to the Company. (iii) Willful misconduct in the performance of your duties, functions and responsibilities. (iv) Commission of acts which are illegal in connection with the performance of your duties, functions and responsibilities under this Agreement. (v) Commission of acts which would constitute a felony offense during the term of this Agreement. (vi) Violation of Company rules and regulations concerning conflict of interest. (vii) Gross mismanagement of the assets of the Company. (viii) Gross incompetence, gross insubordination or gross neglect in the performance of your duties hereunder or being under the habitual influence of alcohol while on duty or possession, use, manufacture, distribution, dispensation or sale of illegal drugs while on or off duty. (ix) Any act or omission, whether or not included in the foregoing, that a court of competent jurisdiction would determine to constitute cause for termination. 8 John J. Murray September 30, 1997 If the Company terminates this Agreement for Cause under this Section, the Company shall not be obligated to make any further payments under this Agreement except for amounts due at the time of such termination. Existence of Cause shall be conclusively determined for all purposes hereunder by the President of the Company. Such advice and consultation shall be utilized as such officer regards as appropriate, and no obligation or duty with respect to any procedure or formality is created by this Agreement. 11. POST-EMPLOYMENT BENEFITS COVERAGE. 11.1 Your coverage under the benefits program provided by the Company will cease effective on your termination date. You will be entitled to elect continuation of your medical and dental benefits at the same cost the Company pays, pursuant to the provision of the Consolidated Omnibus Budget Reconciliation At (COBRA). Details with regard to COBRA continuation coverage will be provided to you shortly after your termination date. 11.2. Life Insurance coverage will cease upon your termination date. You may, however, apply to General American Life Insurance Company (or such other insurance company as may provide group life insurance to the Company's employees at the time) for an individual converted life policy, with such application and payment of the first premium required to be accomplished within 31 days after your termination date. Details regarding this conversion option will be provided to you shortly after your termination date. 11.3 Accidental Death and Dismemberment and Long Term Disability coverages cease with your termination date and may not be extended or converted. 12. TERMINATION OF PRIOR AGREEMENT; MODIFICATION. This Agreement constitutes the full and complete understanding of the parties, and will, on the Effective Date, supersede all prior agreements and understandings, oral or written, between the parties. This Agreement may not be modified or amended except by an instrument in writing signed by the party against which enforcement thereof may be sought. 9 John J. Murray September 30, 1997 13. ENTIRE AGREEMENT. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, oral or written, have been made by either party or anyone acting on behalf of either party, which are not embodied herein and that no other agreement, statement or promise not contained in this Agreement shall be valid or binding. 14. SEVERABILITY. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. 15. WAIVER OF BREACH. The waiver by either party of a breach of any provision of this Agreement shall not operate as or be construed as a waiver of any subsequent breach. 16. NOTICES. All notices hereunder shall be in writing and shall be sent by express mail or by certified or registered mail, postage prepaid, return receipt requested; if to you, to your residence as listed in the Company's records; and if to the Company, to the address set forth above with copies to the President. 17. ASSIGNABILITY; BINDING EFFECT. This Agreement shall not be assigned by you without the written consent of the Board of Directors of the Company. This Agreement shall be binding upon and inure to the benefit of you, your legal representatives, heirs and distributees, and shall be binding upon and inure to the benefit of the Company, its successors and assigns. 18. GOVERNING LAW. All questions pertaining to the validity, construction, execution and performance of this Agreement shall be construed and governed in accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to the conflicts or choice of law provisions thereof. 19. HEADINGS. The headings of this Agreement are intended solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement. 10 John J. Murray September 30, 1997 If this Agreement correctly sets forth our understanding, please sign the duplicate original in the space provided below and return it to the Company, whereupon this shall constitute the employment agreement between you and the Company effective and for the term as stated herein. C&D Technologies, Inc. By: /s/ Alfred Weber Alfred Weber President/Chief Executive Officer/ Chairman of the Board of Directors Agreed as of the date first above written: /s/ John J. Murray, Jr. John J. Murray, Jr. 11 EX-10.2 3 EXHIBIT 10.2 C&D TECHNOLOGIES, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN W I T N E S S E T H: WHEREAS, C&D TECHNOLOGIES, INC., intends to adopt a nonqualified supplemental executive retirement plan to provide supplemental retirement income to certain employees who are considered part of a "select group of management or highly compensated employees" within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, whose benefits under the Pension Plan and the Savings Plan have been restricted by federal law. NOW, THEREFORE, C&D TECHNOLOGIES, INC. adopts the C&D TECHNOLOGIES, INC. Supplemental Executive Retirement Plan, effective as of September 30, 1997, in order to provide supplemental retirement income to Executives whose benefits have been restricted under the Pension Plan and the Savings Plan. NOW, THEREFORE, in consideration of the mutual covenants herein contained, the Company hereby adopts the Plan as follows: 1. DEFINITIONS. For purposes of this Plan, the following definitions apply: (a) "Actuarial Equivalent" means an amount equal in value on an actuarial basis, as determined by an actuary selected by the Committee, based upon the UP-84 mortality table (unisex) with no setback and an annual interest rate of 7 1/4%. (b) "Affiliate" means any company or other entity, presently or in the future existing, which is affiliated with the Company within the meaning of Sections 414(b), (c), (m) and (o) of the Code. (c) "Board" means the Board of Directors of the Company. (d) "Cause" means (i) in the case where there is no employment or consulting agreement between the Company or an Affiliate and Executive, or where there is an employment or consulting agreement, but such agreement does not define cause (or words of like import), termination due to Executive's fraud, willful misconduct, gross negligence with respect to the Company or an Affiliate, or Executive's conviction of a felony; or (ii) in the case where there is an employment or consulting agreement between the Company or an Affiliate and Executive, termination that is or would be deemed to be for cause (or words of like import) as defined under such agreement. The Committee shall have sole discretion to determine whether Cause exists, and its determination shall be final, binding and conclusive. (e) "Change of Control" means the occurrence of any of the following: (i) any person (as defined in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d) and 14(d) thereof), excluding the Company, any Subsidiary and any employee benefit plan sponsored or 1 maintained by the Company or any Subsidiary (including any trustee of any such plan acting in his or her capacity as trustee), but including a "group" as defined in Section 13(d)(3) of the Exchange Act, becomes the beneficial owner (as defined in Rule 13(d)-3 under the Exchange Act) of shares of the Company having at least thirty percent (30%) of the total number of votes that may be cast for the election of directors of the Company; (ii) the shareholders of the Company shall approve any merger or other business combination of the Company, sale of all or substantially all of the Company's assets or combination of the foregoing transactions (a "Transaction"), other than a Transaction involving only the Company and one or more of its Subsidiaries, or a Transaction immediately following which the shareholders of the Company immediately prior to the Transaction continue to have a majority of the voting power in the resulting entity (excluding for this purpose any shareholder of the Company owning directly or indirectly more than ten percent (10%) of the shares of the other company involved in the Transaction) and no person is the beneficial owner (as defined in Rule 13(d)-3 under the Exchange Act) of at least thirty percent (30%) of the shares of the resulting entity as contemplated by subparagraph (i) above; or (iii) within any twenty-four (24) month period beginning on or after the date hereof, the persons who were directors of the Company immediately before the beginning of such period (the "Incumbent Directors") shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of any successor to the Company, provided that, any director who was not a director as of the date hereof shall be deemed to be an Incumbent Director if such director was elected to the Board by, or on the recommendation of or with the approval of, at least two-thirds (2/3) of the directors who then qualified as Incumbent Directors either actually or by prior operation of this subparagraph (iii), unless such election, recommendation or approval was the result of an actual or threatened election contest of the type contemplated by Rule 14a-11 promulgated under the Exchange Act or any successor provision. Notwithstanding the foregoing, no Change of Control of the Company shall be deemed to have occurred for purposes of this Plan by reason of any actions or events in which Executive participates in a capacity other than in his or her capacity as an executive of the Company. (f) "Code" means the Internal Revenue Code of 1986, as amended. (g) "Committee" means the Compensation Committee of the Board to which the Board has delegated its authority to administer this Plan on its behalf. (h) "Company" means C&D TECHNOLOGIES, INC. or any successor thereto. (i) "Disability" or "Disabled" means disability or disabled as defined in the Pension Plan. (j) "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. (k) "Exchange Act" means the Securities Exchange Act of 1934, as amended. 2 (l) "Executive" means an employee, other than the Chief Executive Officer, who is considered part of a select group of management or highly compensated employees, including direct reports to the Chief Executive Officer and other key employees as from time to time may be designated by the Board. Executives who are designated by the Board to participate in the Plan are listed on Appendix A. The Board may at any time add additional Executives to Appendix A and exclude any Executive from future participation in this Plan, except that any such exclusion shall not reduce any benefit previously accrued hereunder. (m) "Maximum Annual Benefit" means an amount calculated by subtracting from $100,000, indexed annually by 4% beginning September 30, 1998: (i) the annual accrued benefit as of the Qualifying Event (based on a monthly single life annuity) payable at normal retirement age (as defined in the Pension Plan); (ii) one-half of Executive's Social Security Benefit as of the Qualifying Event; and (iii) the annual single life annuity payable at age 65 based on the Actuarial Equivalent of Executive's account under the Savings Plan as of the Qualifying Event solely attributable to matching contributions made by the Company. (n) "Pension Plan" means the C&D TECHNOLOGIES, INC. Pension Plan for Salaried Employees, as amended from time to time. (o) "Plan" means this C&D TECHNOLOGIES, INC. Supplemental Executive Retirement Plan, as amended from time to time. (p) "Qualifying Event" means the occurrence of the first of any of the following events while Executive is employed by the Company or an Affiliate: (i) retirement on or after attainment of age 65; (ii) early retirement before age 65 and after age 62; (iii) Disability; (iv) death; and (v) a Change of Control. (q) "Savings Plan" means the C&D TECHNOLOGIES, INC. Savings Plan, which is the Code Section 401(k) Plan maintained by the Company, as amended from time to time. (r) "SERP Benefit" means the vested benefit payable under this Plan. (s) "Social Security Benefit" means the amount of Executive's social security benefit that would be payable upon the Executive's attainment of age 65, calculated by the Company's actuary in accordance with reasonable actuarial assumptions. (t) "Subsidiary" means a subsidiary corporation under Section 424(f) of the Code. 2. COVENANT NOT TO COMPETE. (a) Except in the case of payment of the SERP Benefit to Executive upon a Change of Control, during the period for which the SERP Benefit is paid and during the period following Executive's termination of employment with the Company or an Affiliate, Executive shall not, without having first obtained the written consent of the Board, perform consulting or other services for, or have any position with (whether as director, officer, employee, consultant, agent or otherwise) or ownership interest in any business or organization which, in the sole opinion of the Board, is engaged in any activity which is in competition with the business then being conducted by the Company or any Affiliate. The term "ownership interest" as used in the 3 preceding sentence includes a proprietorship, partnership, joint venture, stock or other equity interest of five percent (5%) or more held of record or beneficially by Executive. (b) Except in the case of payment of the SERP Benefit to Executive upon a Change of Control, if Executive terminates his or her employment with the Company or an Affiliate and performs service for a competitor, as defined in paragraph 2(a) above, he or she shall forfeit all rights, privileges and claims hereunder and to any SERP Benefit and all rights of Executive, his or her spouse, his or her designees and his or her estate to any such SERP Benefit shall terminate and be forfeited (to the maximum extent permitted by law). 3. ELIGIBILITY FOR AND CALCULATION OF SERP BENEFIT. (a) PAYMENT DATE. The Company shall pay the SERP Benefit to Executive (or, in the case of death prior to a Qualifying Event, to Executive's spouse) beginning on the first of the month following the date on which Executive has a Qualifying Event. Notwithstanding the foregoing, in the event that Executive shall have terminated employment with the Company or an Affiliate prior to a Qualifying Event but on or after the date Executive becomes fully vested under Section 3(f) of the Plan, the Company shall pay the SERP Benefit to Executive (or, in the case of death prior to a Qualifying Event, to Executive's spouse) beginning on the first of the month following the earliest of the following events: (i) attainment of age 65; (ii) death; or (iii) occurrence of a Change of Control. (b) CALCULATION OF SERP BENEFIT. Except with respect to a Change of Control, Executive shall not accrue a SERP Benefit if the Qualifying Event occurs before Executive has completed seven and one-half (7.5) full and consecutive years of employment with the Company or an Affiliate. If the Qualifying Event occurs on or after seven and one-half (7.5) full and consecutive years of employment with the Company or an Affiliate, the SERP Benefit shall be calculated by multiplying (i) the Maximum Annual Benefit by (ii) the appropriate percentage from the following schedule: Years of Employment PRIOR TO QUALIFYING EVENT PERCENTAGE BENEFIT less than 7.5 0% 7.5 50% 8 53.3% 9 60% 10 66.7% 11 73.3% 12 80% 13 86.7% 4 14 93.3% 15 or more 100% If the Qualifying Event is a Change of Control, the SERP Benefit for any Executive who has completed at least five (5) full and consecutive years of employment with the Company or an Affiliate, shall be calculated by multiplying (i) the Maximum Annual Benefit by (ii) a fraction (not to exceed 1), the numerator of which is Executive's number of his or her full and consecutive years of employment with the Company or an Affiliate that the Executive would have had if he or she were continuously employed through age 65, and the denominator of which is 15. If the Qualifying Event is a Change of Control, the SERP Benefit for any Executive who has completed less than five (5) full and consecutive years of employment with the Company or an Affiliate, shall be calculated in accordance with the immediately preceding sentence multiplied by fifty percent (50%). EXAMPLE 1 - For an unmarried Executive who leaves after 15 years: $100,000 (Assumed retirement in 1997) - 35,000 Age 65 Pension Plan Benefit - 15,000 1/2 Age 65 Social Security Benefit - 5,000 Age 65 Savings Plan Benefit Annuity ------- $ 45,000 Maximum Annual Benefit X 100% Percentage Benefit @ 15 years ------- $ 45,000* Annual Age 65 SERP Benefit EXAMPLE 2 - For an unmarried Executive who leaves after 10 years: $100,000 (Assumed retirement in 1997) - 35,000 Age 65 Pension Plan Benefit - 15,000 1/2 Age 65 Social Security Benefit - 5,000 Age 65 Savings Plan Benefit Annuity ------- $ 45,000 Maximum Annual Benefit 66.7% Percentage Benefit @ 10 years ------- $ 30,015* Annual Age 65 SERP Benefit EXAMPLE 3 - For an unmarried Executive at age 62 with 10 years of employment with the Company or an Affiliate and the Qualifying Event is a Change of Control occurring in 1997 (due to the Change of Control, Executive is credited with 3 additional years of employment as if he or she were continuously employed through age 65): $100,000 (Assumed retirement in 1997) - 35,000 Age 65 Pension Plan Benefit - 15,000 1/2 Age 65 Social Security Benefit 5 - 5,000 Age 65 Savings Plan Benefit Annuity ------- $ 45,000 Maximum Annual Benefit 86.7% Percentage Benefit @ 13 years ------- $ 39,015* Annual Age 65 SERP Benefit (To Be Converted into a Lump Sum Payment under Section 7) * To be a djusted on an Actuarial Equivalent basis for forms other than a single life annuity. (c) NORMAL FORM OF SERP BENEFIT. An Executive who is not married at the time of a Qualifying Event shall receive the SERP Benefit in the form of a single life annuity, providing for monthly benefits for the life of Executive, with payments ceasing upon Executive's death. Subject to Section 3(d) below, an Executive who is married at the time of a Qualifying Event shall receive the SERP Benefit in the form of a joint and fifty percent (50%) survivor annuity, which provides for benefits to be paid monthly to Executive for life, and if his or her spouse at the time of the Qualifying Event survives him or her, for the spouse's life or until the spouse remarries, whichever comes first, monthly payments in an amount equal to fifty percent (50%) of the monthly amount received by Executive while alive. (d) OPTIONAL FORM OF SERP BENEFIT FOR MARRIED EXECUTIVES. Except in the case of death prior to commencement of the SERP Benefit which is governed by Section 6(a) or in the case of a Change of Control which is governed by Section 7, the Executive shall have the right, in a writing filed with the Committee, to elect (subject to the written consent of a married Executive's spouse in a form specified by the Committee) to have his or her SERP Benefit paid in the form of a single life annuity (providing for monthly benefits for the life of Executive, with payments ceasing upon Executive's death); provided, that such election is made and filed with the Committee at least one (1) year prior to the Executive's Qualifying Event. Such an election may be revoked by Executive at any time or from time to time by written notice filed with the Committee at least one (1) year prior to Executive's Qualifying Event. (e) ACTUARIAL EQUIVALENCE. The normal form of SERP Benefit for an Executive who is not married at the time of a Qualifying Event shall be a single life annuity. The normal form of SERP Benefit for an Executive who is married at the time of a Qualifying Event shall be the Actuarial Equivalent of a single life annuity payable in the form of a joint and fifty percent (50%) survivor annuity. (f) VESTING OF SERP BENEFIT. An Executive's rights under this Plan to any SERP Benefit shall be fully vested and nonforfeitable, except as set forth in paragraph 2 hereof, solely upon the earlier of the: (i) completion of seven and one-half (7.5) years of full and consecutive employment with the Company or an Affiliate; or (ii) occurrence of a Change of Control. Notwithstanding anything herein to the contrary, Executive shall not have any rights to a SERP Benefit in the event Executive is terminated by the Company or an Affiliate for Cause. 6 4. REDUCTION FOR EARLY RETIREMENT OF EXECUTIVE. The SERP Benefit of an Executive who retires from the Company or an Affiliate before age 65 and after age 62 shall be reduced by seven percent (7%) per year prior to age 65 and shall be paid on the first of the month following the Qualifying Event. 5. DISABILITY OF EXECUTIVE. (a) DISABILITY WHILE EMPLOYED. In the event that Executive becomes Disabled while employed by the Company or an Affiliate, he or she shall cease to accrue benefits under this Plan. Such Executive shall be entitled to retire and receive a SERP Benefit at age 65 under the terms of this Plan if he or she remains Disabled until age 65. If such Executive does not remain Disabled, any SERP Benefit to which he or she is eligible to receive hereunder or his or her right to participation hereunder shall be determined under the provisions of this Plan as of the date his or her Disability ceases. In the event that Executive is no longer disabled and he or she becomes reemployed by the Company or an Affiliate immediately following such Disability, then Executive: (i) shall begin to accrue benefits under this Plan from the date of reemployment; and (ii) shall not be entitled to any accruals during the period during which Executive was Disabled. Notwithstanding anything herein to the contrary, Executive's full and consecutive years of employment with the Company or an Affiliate prior to the Disability shall be added to Executive's full and consecutive years of employment with the Company or an Affiliate after the Disability for purposes of vesting under Section 3(f) of the Plan and for purposes of calculating the SERP Benefit under Section 3(b) of the Plan. (b) DEATH WHILE DISABLED. Death benefits, if any, shall be paid to the spouse of a Disabled Executive in accordance with Section 6. 6. DEATH OF EXECUTIVE. (a) PRIOR TO COMMENCEMENT OF THE SERP BENEFIT. In the event of the death of Executive while he or she is employed by the Company or an Affiliate, his or her spouse to which he or she must have been married to for over one (1) year immediately prior to his or her death, shall be entitled to a monthly single life annuity equal to fifty percent (50%) of the single life annuity to which Executive would have received if he or she had retired on his or her date of death, payable beginning the first of the month following the date he or she would have attained age 65. (b) AFTER COMMENCEMENT OF THE SERP BENEFIT. In the event of the death of Executive after commencement of the SERP Benefit, Executive's spouse shall be entitled to a SERP Benefit solely to the extent provided under the form of benefit payable to Executive and elected (subject to spousal consent, if applicable) under Section 3 of the Plan. (c) Spousal benefits shall terminate upon remarriage of spouse. 7 7. CHANGE OF CONTROL. Notwithstanding anything herein to the contrary, a Qualifying Event due to a Change of Control will result in a SERP Benefit, payable to Executive (or, in the case of death, Executive's spouse) in an Actuarial Equivalent single lump sum as soon as administratively feasible following the date of the Change of Control (but in no event later than the first of the month following the Change of Control), equal to the SERP Benefit that would have been payable to Executive at age 65 as accrued as of the Qualifying Event, except with respect to the crediting of additional years of employment (as if the Executive were continuously employed through age 65) for the purpose of calculating the Percentage Benefit under Section 3(b) of the Plan. Without limiting the generality of the foregoing, an Executive or spouse who has commenced receiving payment of his or her SERP Benefit prior to a Change of Control, shall receive, upon a Change of Control, an Actuarial Equivalent single lump sum payment based on the remainder of the SERP Benefit that would have otherwise been paid under the Plan had the Change of Control not occurred. EXAMPLE 4 - $ 39,015 Maximum Annual Benefit X 6.5826 Lump Sum Conversion Factor (Based on Age on Change of Control)* -------- $256,820 Change of Control SERP Benefit *Conversion factor will vary based on age. Example is based on age 62. 8. FUNDING. (a) GENERAL ASSETS. Nothing contained in this Plan and no action taken pursuant to the provisions of this Plan shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and Executive, the Executive's spouse or any other person. All benefits and rights described under this Plan shall be and remain unsecured obligations of the Company. The Company may prefund all or any portion of such benefits or rights and may enter into a trust agreement solely for such purpose (a "grantor trust" under the Code); provided that the assets of any such trust fund shall be considered general assets of the Company and shall be subject to the claims of the Company's general creditors. None of the Executive, the Executive's spouse or any estate of such Executive or spouse shall have an interest, vested or otherwise, in any trust fund hereunder or a secured or preferred position with respect thereto or shall have any claim thereto other than as a general creditor of the Company. (b) CHANGE OF CONTROL. Any trust hereunder shall be revocable by the Company until the occurrence of a Change of Control, at which time the trust, if any, shall become irrevocable. 8 9. CONSTRUCTION OF AGREEMENT. (a) Any powers reserved by the Board under this Plan may be exercised by the Committee which shall have general responsibility for the administration and interpretation of the Plan including selection of participants, determinations of years of employment for purposes of this Plan, and compliance, if required, with reporting and disclosure rules of ERISA. Any determination or interpretation of the Board or the Committee with respect to the Plan shall be final, binding and conclusive on all persons. (b) If the Board shall find that any person to whom any amount is payable under this Plan is unable to care for his or her affairs because of illness, accident or physical or mental incapacitation, is a minor, has died, or for any other reason shall be incapable of properly or legally receiving benefits to which he or she is entitled to under this Plan, then any SERP Benefit due him or her or his or her spouse may, if the Board so elects, be paid to his or her Beneficiary. Any such payment shall be in complete discharge of the liability of the Company therefor. (c) Neither this Plan nor any action taken hereunder shall be construed as giving Executive the right to be retained or continue in the employ of the Company or an Affiliate or as evidence of any agreement by the Company or an Affiliate to employ Executive in any particular position or at any particular rate of remuneration or affect the right of the Company or an Affiliate to dismiss Executive. (d) The making of this Plan does not constitute or create an employment agreement between the Company or an Affiliate and Executive or give Executive any legal or equitable right against the Company or an Affiliate, its agents, or its successors or assigns, except as expressly provided by this Plan. (e) Any SERP Benefit payable under this Plan shall not be deemed salary or other compensation to Executive for the purpose of computing benefits to which Executive may be entitled under any pension or profit-sharing plan or other arrangement of the Company for the benefit of its employees nor shall anything contained herein affect any rights or obligations which Executive may have under any pre-existing agreement with the Company or an Affiliate . (f) Employment, compensation paid, and insurance or other disability, retirement, or death benefits or health plans to be taken into account under this Plan shall include employment, compensation paid, and insurance or other benefits or plans provided by any Affiliate or organization which Executive served at the request of the Company. 10. ASSIGNMENT AND NONALIENATION OF SERP BENEFIT. (a) This Plan shall be binding upon and inure to the benefit of (i) the Company and its successors, assigns and any purchaser of either the Company or its assets; and (ii) Executive, his or her heirs, executors, administrators and legal representatives. 9 No amount payable at any time under this Plan shall be subject in any manner to alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, charge or encumbrance of any kind nor in any manner be subject to the debts or liabilities of any person, and any attempt to so alienate or subject any such amount, whether presently or thereafter payable, shall be null and void. If any person shall attempt to, or shall, alienate, sell, transfer, assign, pledge, attach, charge or otherwise encumber any amount payable under this Plan, or any part thereof, or if by reason of his or her bankruptcy or other event happening at any such time such amount would be made subject to his or her debts or liabilities or would otherwise not be enjoyed by him or her, then the Board, if it so elects, may direct that such amount be withheld and that the same or any part thereof be paid or applied to or for the benefit of such person, in such manner and proportion as the Board may deem proper. 11. ADMINISTRATION. (a) ADMINISTRATION OF PLAN. The Board and the Committee shall have full power and responsibility to administer this Plan. The Board may, in its sole discretion, appoint a committee, an agent or agents to carry out designated administrative functions. (b) LEGAL, ACCOUNTING, CLERICAL AND OTHER SERVICES. The Board may authorize one or more of its members, the Committee or the management of the Company to act on its behalf and may contract for legal, accounting, clerical and other services to carry out the purposes of this Plan. All expenses of the Board in this regard shall be paid by the Company. (c) CLAIMS PROCEDURE. The Committee shall be responsible for determining all claims for benefits under this Plan by Executive or his or her spouse. Within ninety (90) days after receiving a claim (or within up to one hundred eighty (180) days, if the claimant is so notified, including notification of the reason for the delay), the Committee shall provide adequate notice in writing to any Executive or spouse whose claim for benefits under this Plan has been denied, setting forth the specific reasons for such denial. The Executive or spouse will be given an opportunity for a full and fair review by the Committee of the decision denying the claim. The Executive or spouse shall be given sixty (60) days from the date of the notice denying any such claim to request such review by written notice to the Committee. Within sixty (60) days after receiving a request for review, the Committee shall notify the claimant in writing of (i) its decision; (ii) the reasons therefor; and (iii) the Plan provisions upon which it is based. The Committee may at any time alter the claims procedure set forth herein, so long as the revised claims procedure complies with ERISA, and the regulations issued thereunder. (d) LIMITATION OF LIABILITY. No officer of the Company or member of the Committee, the Board or any of its authorized agents acting under this Plan shall be liable for any action taken or omitted in good faith hereunder or for exercise of any power given hereunder or for the actions of other members of the Board or the Committee with regard to the Plan. As a condition precedent to the establishment of this Plan or the receipt of benefits hereunder, or both, such liability, if any, is expressly waived and released by Executive, his or her spouse and all persons claiming under or through Executive or his or her spouse. Such waiver and release shall be conclusively evidenced by the acceptance of any benefits under this Plan. 10 (e) INDEMNIFICATION. Each officer of the Company or member of the Board or the Committee, whether or not acting under this Plan, shall be indemnified by the Company against expenses (other than amounts paid in a settlement to which the Company does not consent) reasonably incurred by him or her in connection with any action to which he or she may be a party by reason of performance of administrative functions and duties under this Plan, except in relation to matters as to which he or she shall be adjudged in such action to be personally guilty of gross negligence or willful misconduct in the performance of his or her duties. The foregoing right to indemnification shall be in addition to such other rights as the officer or member of the Board or the Committee may enjoy as a matter of law or by reason of insurance coverage of any kind. Rights granted hereunder shall be in addition to and not in lieu of any rights to indemnification pursuant to the by-laws of the Company. 12. AMENDMENT AND TERMINATION. The Board has the right at any time and from time to time to amend or terminate (whether retroactively or otherwise) this Plan for any reason in any manner which does not reduce any benefit previously accrued hereunder. 13. MISCELLANEOUS. (a) GOVERNING LAW. Except to the extent preempted by federal law, this Plan shall be governed by the laws of the Commonwealth of Pennsylvania from time to time in effect without regard to its conflict of law provisions. (b) WITHHOLDINGS. The Company shall have the right to make such provisions as it deems necessary or appropriate to satisfy any obligations it may have to withhold federal, state or local income or other taxes incurred by reason of this Plan. IN WITNESS WHEREOF, the Company has caused this Plan to be executed this 11th day of December, 1997. By: /s/ Alfred Weber Title: Chairman, President and Chief Executive Officer 11 APPENDIX A EXECUTIVES 1. A. Gordon Goodyear 2. Leslie S. Holden 3. Apostolos T. Kambouroglou 4. Stephen E. Markert, Jr. 5. Larry W. Moore 6. John J. Murray, Jr. 7. Stephen J. Weglarz 12 EX-10.3 4 EXHIBIT 10.3 C&D TECHNOLOGIES, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN FOR ALFRED WEBER W I T N E S S E T H: WHEREAS, C&D TECHNOLOGIES, INC., intends to adopt a nonqualified supplemental executive retirement plan to provide supplemental retirement income to Alfred Weber who is considered part of a "select group of management or highly compensated employees" within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA and whose benefits under the Pension Plan and the Savings Plan have been restricted by federal law. NOW, THEREFORE, C&D TECHNOLOGIES, INC. adopts the C&D TECHNOLOGIES, INC. Supplemental Executive Retirement Plan for Alfred Weber, effective as of September 30, 1997, in order to provide supplemental retirement income to Alfred Weber whose benefits have been restricted under the Pension Plan and the Savings Plan. NOW, THEREFORE, in consideration of the mutual covenants herein contained, the Company hereby adopts the Plan as follows: 1. DEFINITIONS. For purposes of this Plan, the following definitions apply: (a) "Actuarial Equivalent" means an amount equal in value on an actuarial basis, as determined by an actuary selected by the Committee, based upon the UP-84 mortality table (unisex) with no setback and an annual interest rate of 7 1/4%. (b) "Affiliate" means any company or other entity, presently or in the future existing, which is affiliated with the Company within the meaning of Sections 414(b), (c), (m) and (o) of the Code. (c) "Board" means the Board of Directors of the Company. (d) "Cause" means (i) in the case where there is no employment or consulting agreement between the Company or an Affiliate and Executive, or where there is an employment or consulting agreement, but such agreement does not define cause (or words of like import), termination due to Executive's fraud, willful misconduct, gross negligence with respect to the Company or an Affiliate, or Executive's conviction of a felony; or (ii) in the case where there is an employment or consulting agreement between the Company or an Affiliate and Executive, termination that is or would be deemed to be for cause (or words of like import) as defined under such agreement. The Committee shall have sole discretion to determine whether Cause exists, and its determination shall be final, binding and conclusive. (e) "CEO" means Alfred Weber. 1 (f) "Change of Control" means the occurrence of any of the following: (i) any person (as defined in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d) and 14(d) thereof), excluding the Company, any Subsidiary and any employee benefit plan sponsored or maintained by the Company or any Subsidiary (including any trustee of any such plan acting in his capacity as trustee), but including a "group" as defined in Section 13(d)(3) of the Exchange Act, becomes the beneficial owner (as defined in Rule 13(d)-3 under the Exchange Act) of shares of the Company having at least thirty percent (30%) of the total number of votes that may be cast for the election of directors of the Company; (ii) the shareholders of the Company shall approve any merger or other business combination of the Company, sale of all or substantially all of the Company's assets or combination of the foregoing transactions (a "Transaction"), other than a Transaction involving only the Company and one or more of its Subsidiaries, or a Transaction immediately following which the shareholders of the Company immediately prior to the Transaction continue to have a majority of the voting power in the resulting entity (excluding for this purpose any shareholder of the Company owning directly or indirectly more than ten percent (10%) of the shares of the other company involved in the Transaction) and no person is the beneficial owner (as defined in Rule 13(d)-3 under the Exchange Act) of at least thirty percent (30%) of the shares of the resulting entity as contemplated by subparagraph (i) above; or (iii) within any twenty-four (24) month period beginning on or after the date hereof, the persons who were directors of the Company immediately before the beginning of such period (the "Incumbent Directors") shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of any successor to the Company, provided that, any director who was not a director as of the date hereof shall be deemed to be an Incumbent Director if such director was elected to the Board by, or on the recommendation of or with the approval of, at least two-thirds (2/3) of the directors who then qualified as Incumbent Directors either actually or by prior operation of this subparagraph (iii), unless such election, recommendation or approval was the result of an actual or threatened election contest of the type contemplated by Rule 14a-11 promulgated under the Exchange Act or any successor provision. Notwithstanding the foregoing, no Change of Control of the Company shall be deemed to have occurred for purposes of this Plan by reason of any actions or events in which Executive participates in a capacity other than in his capacity as an executive of the Company. (g) "Code" means the Internal Revenue Code of 1986, as amended. (h) "Committee" means the Compensation Committee of the Board to which the Board has delegated its authority to administer this Plan on its behalf. (i) "Company" means C&D TECHNOLOGIES, INC. or any successor thereto. (j) "Disability" or "Disabled" means disability or disabled as defined in the Pension Plan. (k) "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. 2 (l) "Exchange Act" means the Securities Exchange Act of 1934, as amended. (m) "Executive" means the CEO. (n) "Maximum Annual Benefit" means an amount calculated by subtracting from $150,000, indexed annually by 4% beginning September 30, 1998: (i) the annual accrued benefit as of the Qualifying Event (based on a monthly single life annuity) payable at age 66; (ii) one-half of Executive's Social Security Benefit as of the Qualifying Event; and (iii) the annual single life annuity payable at age 66 based on the Actuarial Equivalent of Executive's account under the Savings Plan as of the Qualifying Event solely attributable to matching contributions made by the Company. (o) "Pension Plan" means the C&D TECHNOLOGIES, INC. Pension Plan for Salaried Employees, as amended from time to time. (p) "Plan" means this C&D TECHNOLOGIES, INC. Supplemental Executive Retirement Plan, as amended from time to time. (q) "Qualifying Event" means the occurrence of the first of any of the following events while Executive is employed by the Company or an Affiliate: (i) retirement on or after attainment of age 66; (ii) early retirement before age 66 and after age 62; (iii) Disability; (iv) death; (v) a Change of Control; and (vi) the expiration of the CEO's employment agreement. (r) "Savings Plan" means the C&D TECHNOLOGIES, INC. Savings Plan, which is the Code Section 401(k) Plan maintained by the Company, as amended from time to time. (s) "SERP Benefit" means the vested benefit payable under this Plan. (t) "Social Security Benefit" means the amount of Executive's social security benefit that would be payable upon the Executive's attainment of age 66, calculated by the Company's actuary in accordance with reasonable actuarial assumptions. (u) "Subsidiary" means a subsidiary corporation under Section 424(f) of the Code. 2. COVENANT NOT TO COMPETE. (a) Except in the case of payment of the SERP Benefit to Executive upon a Change of Control, during the period for which the SERP Benefit is paid and during the period following Executive's termination of employment with the Board or an Affiliate, Executive shall not, without having first obtained the written consent of the Company, perform consulting or other services for, or have any position with (whether as director, officer, employee, consultant, agent or otherwise) or ownership interest in any business or organization which, in the sole opinion of the Board, is engaged in any activity which is in competition with the business then being conducted by the Company or any Affiliate. The term "ownership interest" as used in the 3 preceding sentence includes a proprietorship, partnership, joint venture, stock or other equity interest of five percent (5%) or more held of record or beneficially by Executive. (b) Except in the case of payment of the SERP Benefit to Executive upon a Change of Control, if Executive terminates his employment with the Company or an Affiliate and performs service for a competitor, as defined in paragraph 2(a) above, he shall forfeit all rights, privileges and claims hereunder and to any SERP Benefit and all rights of Executive, his spouse, his designees and his estate to any such SERP Benefit shall terminate and be forfeited (to the maximum extent permitted by law). 3. ELIGIBILITY FOR AND CALCULATION OF SERP BENEFIT. (a) PAYMENT DATE. The Company shall pay the SERP Benefit to Executive (or, in the case of death prior to a Qualifying Event, to Executive's spouse) beginning on the first of the month following the date on which Executive has a Qualifying Event. Notwithstanding the foregoing, in the event that Executive shall have terminated employment with the Company or an Affiliate prior to a Qualifying Event but on or after the date Executive becomes fully vested under Section 3(f) of the Plan, the Company shall pay the SERP Benefit to Executive (or, in the case of death prior to a Qualifying Event, to Executive's spouse) beginning on the first of the month following the earliest of the following events: (i) attainment of age 66; (ii) death; (iii) occurrence of a Change of Control; or (iv) the expiration of the CEO's employment agreement. (b) CALCULATION OF SERP BENEFIT. Except with respect to a Change of Control or the expiration of the CEO's employment agreement, Executive shall not accrue a SERP Benefit if the Qualifying Event occurs before Executive has completed seven and one-half (7.5) full and consecutive years of employment with the Company or an Affiliate. Except with respect to a Change of Control or the expiration of the CEO's employment agreement, if the Qualifying Event occurs on or after seven and one-half (7.5) full and consecutive years of employment with the Company or an Affiliate, the SERP Benefit shall be calculated by multiplying (i) the Maximum Annual Benefit by (ii) the appropriate percentage from the following schedule: Years of Employment PRIOR TO QUALIFYING EVENT PERCENTAGE BENEFIT less than 7.5 0% 7.5 50% 8 53.3% 9 60% 10 66.7% 11 73.3% 12 80% 4 13 86.7% 14 93.3% 15 or more 100% Notwithstanding anything herein to the contrary, if the Qualifying Event is a Change of Control or the expiration of the CEO's employment agreement, the SERP Benefit for Executive shall be calculated by multiplying (i) the Maximum Annual Benefit by (ii) 100%. EXAMPLE 1 - For Alfred Weber: $150,000 (Assumed retirement in 1997) - 35,000 Age 66 Pension Plan Benefit - 15,000 1/2 Age 66 Social Security Benefit - 5,000 Age 66 Savings Plan Benefit Annuity ------- $ 95,000 Maximum Annual Benefit X 100% Percentage Benefit @ 15 years ------- $ 95,000* Annual Age 66 SERP Benefit * To be adjusted on an Actuarial Equivalent basis for forms other than a single life annuity. (c) NORMAL FORM OF SERP BENEFIT. An Executive who is not married at the time of a Qualifying Event shall receive the SERP Benefit in the form of a single life annuity, providing for monthly benefits for the life of Executive, with payments ceasing upon Executive's death. Subject to Section 3(d) below, an Executive who is married at the time of a Qualifying Event shall receive the SERP Benefit in the form of a joint and fifty percent (50%) survivor annuity, which provides for benefits to be paid monthly to Executive for life, and if his spouse at the time of the Qualifying Event survives him, for the spouse's life or until the spouse remarries, whichever comes first, monthly payments in an amount equal to fifty percent (50%) of the monthly amount received by Executive while alive. (d) OPTIONAL FORM OF SERP BENEFIT FOR MARRIED EXECUTIVES. Except in the case of death prior to commencement of the SERP Benefit which is governed by Section 6(a) or in the case of a Change of Control which is governed by Section 7, the Executive shall have the right, in a writing filed with the Committee, to elect (subject to the written consent of a married Executive's spouse in a form specified by the Committee) to have his SERP Benefit paid in the form of a single life annuity, providing for monthly benefits for the life of Executive, with payments ceasing upon Executive's death; provided, that such election is made and filed with the Committee at least one (1) year prior to the Executive's Qualifying Event. Such an election may be revoked by Executive at any time or from time to time by written notice filed with the Committee at least one (1) year prior to Executive's Qualifying Event. 5 (e) ACTUARIAL EQUIVALENCE. The normal form of SERP Benefit for an Executive who is not married at the time of a Qualifying Event shall be a single life annuity. The normal form of SERP Benefit for an Executive who is married at the time of a Qualifying Event shall be the Actuarial Equivalent of a single life annuity payable in the form of a joint and fifty percent (50%) survivor annuity. (f) VESTING OF SERP BENEFIT. An Executive's rights under this Plan to any SERP Benefit shall be fully vested and nonforfeitable, except as set forth in paragraph 2 hereof, solely upon the earliest of the: (i) completion of seven and one-half (7.5) years of full and consecutive employment with the Company or an Affiliate; (ii) occurrence of a Change of Control; or (iii) the expiration date of the CEO's employment agreement. Notwithstanding anything herein to the contrary, Executive shall not have any rights to a SERP Benefit in the event Executive is terminated by the Company or an Affiliate for Cause. 4. REDUCTION FOR EARLY RETIREMENT OF EXECUTIVE. The SERP Benefit of an Executive who retires from the Company or an Affiliate before age 66 and after age 62 shall be reduced by seven percent (7%) per year prior to age 66 and shall be paid on the first of the month following the Qualifying Event. 5. DISABILITY OF EXECUTIVE. (a) DISABILITY WHILE EMPLOYED. In the event that Executive becomes Disabled while employed by the Company or an Affiliate, he shall cease to accrue benefits under this Plan. Such Executive shall be entitled to retire and receive a SERP Benefit at age 66 under the terms of this Plan if he remains Disabled until age 66. If such Executive does not remain Disabled, any SERP Benefit to which he is eligible to receive hereunder or his right to participation hereunder shall be determined under the provisions of this Plan as of the date his Disability ceases. In the event that Executive is no longer disabled and he becomes reemployed by the Company or an Affiliate immediately following such Disability, then Executive: (i) shall begin to accrue benefits under this Plan from the date of reemployment; and (ii) shall not be entitled to any accruals during the period during which Executive was Disabled. Notwithstanding anything herein to the contrary, Executive's full and consecutive years of employment with the Company or an Affiliate prior to the Disability shall be added to Executive's full and consecutive years of employment with the Company or an Affiliate after the Disability for purposes of vesting under Section 3(f) of the Plan and for purposes of calculating the SERP Benefit under Section 3(b) of the Plan. (b) DEATH WHILE DISABLED. Death benefits, if any, shall be paid to the spouse of a Disabled Executive in accordance with Section 6. 6. DEATH OF EXECUTIVE. (a) PRIOR TO COMMENCEMENT OF THE SERP BENEFIT. In the event of the death of Executive while he is employed by the Company or an Affiliate, his spouse to which he must have been married to for over one (1) year immediately prior to his death, shall be entitled to a 6 monthly single life annuity equal to fifty percent (50%) of the single life annuity to which Executive would have received if he had retired on his date of death payable beginning the first of the month following the date he would have attained age 66. (b) AFTER COMMENCEMENT OF THE SERP BENEFIT. In the event of the death of Executive after commencement of the SERP Benefit, Executive's spouse shall be entitled to a SERP Benefit solely to the extent provided under the form of benefit payable to Executive and elected (subject to spousal consent, if applicable) under Section 3 of the Plan. (c) Spousal benefits shall terminate upon remarriage of spouse. 7. CHANGE OF CONTROL. Notwithstanding anything herein to the contrary, a Qualifying Event due to a Change of Control will result in a SERP Benefit, payable to Executive (or, in the case of death, Executive's spouse) in an Actuarial Equivalent single lump sum as soon as administratively feasible following the date of the Change of Control (but in no event later than the first of the month following the Change of Control), equal to the SERP Benefit calculated under Section 3(b) of the Plan. Without limiting the generality of the foregoing, an Executive or spouse who has commenced receiving payment of his SERP Benefit prior to a Change of Control, shall receive, upon a Change of Control, an Actuarial Equivalent single lump sum payment based on the remainder of the SERP Benefit that would have otherwise been paid under the Plan had the Change of Control not occurred. EXAMPLE 2 - $ 95,000 Maximum Annual Benefit X 6.5826 Lump Sum Conversion Factor (Based on Age 62) ------- $625,347 Change of Control SERP Benefit 8. FUNDING. (a) GENERAL ASSETS. Nothing contained in this Plan and no action taken pursuant to the provisions of this Plan shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and Executive, the Executive's spouse or any other person. All benefits and rights described under this Plan shall be and remain unsecured obligations of the Company. The Company may prefund all or any portion of such benefits or rights and may enter into a trust agreement solely for such purpose (a "grantor trust" under the Code); provided that the assets of any such trust fund shall be considered general assets of the Company and shall be subject to the claims of the Company's general creditors. None of the Executive, the Executive's spouse or any estate of such Executive or spouse shall have an interest, vested or otherwise, in any trust fund hereunder or a secured or preferred position with respect thereto or shall have any claim thereto other than as a general creditor of the Company. 7 (b) CHANGE OF CONTROL. Any trust hereunder shall be revocable by the Company until the occurrence of a Change of Control, at which time the trust, if any, shall become irrevocable. 9. CONSTRUCTION OF AGREEMENT. (a) Any powers reserved by the Board under this Plan may be exercised by the Committee which shall have general responsibility for the administration and interpretation of the Plan including selection of participants, determinations of years of employment for purposes of this Plan, and compliance, if required, with reporting and disclosure rules of ERISA. Any determination or interpretation of the Board or the Committee with respect to the Plan shall be final, binding and conclusive on all persons. (b) If the Board shall find that any person to whom any amount is payable under this Plan is unable to care for his affairs because of illness, accident or physical or mental incapacitation, is a minor, has died, or for any other reason shall be incapable of properly or legally receiving benefits to which he is entitled to under this Plan, then any SERP Benefit due him or his spouse may, if the Board so elects, be paid to his spouse. Any such payment shall be in complete discharge of the liability of the Company therefor. (c) Neither this Plan nor any action taken hereunder shall be construed as giving Executive the right to be retained or continue in the employ of the Company or an Affiliate or as evidence of any agreement by the Company or an Affiliate to employ Executive in any particular position or at any particular rate of remuneration or affect the right of the Company or an Affiliate to dismiss Executive. (d) The making of this Plan does not constitute or create an employment agreement between the Company or an Affiliate and Executive or give Executive any legal or equitable right against the Company or an Affiliate, its agents, or its successors or assigns, except as expressly provided by this Plan. (e) Any SERP Benefit payable under this Plan shall not be deemed salary or other compensation to Executive for the purpose of computing benefits to which Executive may be entitled under any pension or profit-sharing plan or other arrangement of the Company for the benefit of its employees nor shall anything contained herein affect any rights or obligations which Executive may have under any pre-existing agreement with the Company or an Affiliate. (f) Employment, compensation paid, and insurance or other disability, retirement, or death benefits or health plans to be taken into account under this Plan shall include employment, compensation paid, and insurance or other benefits or plans provided by any Affiliate or organization which Executive served at the request of the Company. 8 10. ASSIGNMENT AND NONALIENATION OF SERP BENEFIT. (a) This Plan shall be binding upon and inure to the benefit of (i) the Company and its successors, assigns and any purchaser of either the Company or its assets; and (ii) Executive, his spouse, executors, administrators and legal representatives. No amount payable at any time under this Plan shall be subject in any manner to alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, charge or encumbrance of any kind nor in any manner be subject to the debts or liabilities of any person, and any attempt to so alienate or subject any such amount, whether presently or thereafter payable, shall be null and void. If any person shall attempt to, or shall, alienate, sell, transfer, assign, pledge, attach, charge or otherwise encumber any amount payable under this Plan, or any part thereof, or if by reason of his bankruptcy or other event happening at any such time such amount would be made subject to his debts or liabilities or would otherwise not be enjoyed by him, then the Board, if it so elects, may direct that such amount be withheld and that the same or any part thereof be paid or applied to or for the benefit of such person, in such manner and proportion as the Board may deem proper. 11. ADMINISTRATION. (a) ADMINISTRATION OF PLAN. The Board and the Committee shall have full power and responsibility to administer this Plan. The Board may, in its sole discretion, appoint a committee, an agent or agents to carry out designated administrative functions. (b) LEGAL, ACCOUNTING, CLERICAL AND OTHER SERVICES. The Board may authorize one or more of its members, the Committee or the management of the Company to act on its behalf and may contract for legal, accounting, clerical and other services to carry out the purposes of this Plan. All expenses of the Board in this regard shall be paid by the Company. (c) CLAIMS PROCEDURE. The Committee shall be responsible for determining all claims for benefits under this Plan by Executive or his spouse. Within ninety (90) days after receiving a claim (or within up to one hundred eighty (180) days, if the claimant is so notified, including notification of the reason for the delay), the Committee shall provide adequate notice in writing to any Executive or spouse whose claim for benefits under this Plan has been denied, setting forth the specific reasons for such denial. The Executive or spouse will be given an opportunity for a full and fair review by the Committee of the decision denying the claim. The Executive or spouse shall be given sixty (60) days from the date of the notice denying any such claim to request such review by written notice to the Committee. Within sixty (60) days after receiving a request for review, the Committee shall notify the claimant in writing of (i) its decision; (ii) the reasons therefor; and (iii) the Plan provisions upon which it is based. The Committee may at any time alter the claims procedure set forth herein, so long as the revised claims procedure complies with ERISA, and the regulations issued thereunder. (d) LIMITATION OF LIABILITY. No officer of the Company or member of the Committee, the Board or any of its authorized agents acting under this Plan shall be liable for any action 9 taken or omitted in good faith hereunder or for exercise of any power given hereunder or for the actions of other members of the Board or the Committee with regard to the Plan. As a condition precedent to the establishment of this Plan or the receipt of benefits hereunder, or both, such liability, if any, is expressly waived and released by Executive, his spouse and all persons claiming under or through Executive or his spouse. Such waiver and release shall be conclusively evidenced by the acceptance of any benefits under this Plan. (e) INDEMNIFICATION. Each officer of the Company or member of the Board or the Committee, whether or not acting under this Plan, shall be indemnified by the Company against expenses (other than amounts paid in a settlement to which the Company does not consent) reasonably incurred by him in connection with any action to which he may be a party by reason of performance of administrative functions and duties under this Plan, except in relation to matters as to which he shall be adjudged in such action to be personally guilty of gross negligence or willful misconduct in the performance of his duties. The foregoing right to indemnification shall be in addition to such other rights as the officer or member of the Board or the Committee may enjoy as a matter of law or by reason of insurance coverage of any kind. Rights granted hereunder shall be in addition to and not in lieu of any rights to indemnification pursuant to the by-laws of the Company. 12. AMENDMENT AND TERMINATION. The Board has the right at any time and from time to time to amend or terminate (whether retroactively or otherwise) this Plan for any reason in any manner which does not reduce any benefit previously accrued hereunder. 13. MISCELLANEOUS. (a) GOVERNING LAW. Except to the extent preempted by federal law, this Plan shall be governed by the laws of the Commonwealth of Pennsylvania from time to time in effect without regard to its conflict of law provisions. (b) WITHHOLDINGS. The Company shall have the right to make such provisions as it deems necessary or appropriate to satisfy any obligations it may have to withhold federal, state or local income or other taxes incurred by reason of this Plan. IN WITNESS WHEREOF, the Company has caused this Plan to be executed this 11th day of December, 1997. By: /s/ Stephen E. Markert, Jr. Title: Vice President Finance 10 EX-11 5 EXHIBIT 11 EXHIBIT 11 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES EARNINGS PER SHARE COMPUTATIONS (Dollars and shares in thousands) (Unaudited) (Unaudited) Three Months Ended Nine Months Ended October 31, October 31, ------------------ ----------------- 1997 1996 1997 1996 ---- ---- ---- ---- NET INCOME $5,319 $4,130 $14,158 $10,426 ===== ===== ====== ====== Weighted average number of common shares outstanding 6,111 6,236 6,098 6,320 Effect of shares issuable under stock option plan 227 123 200 183 ----- ----- ----- ----- WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING (PRIMARY) 6,338 6,359 6,298 6,503 ===== ===== ===== ===== NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE (PRIMARY) $ 0.84 $ 0.65 $ 2.25 $ 1.60 ===== ===== ===== ===== Weighted average number of common shares outstanding 6,111 6,236 6,098 6,320 Effect of shares issuable under stock option plan 229 127 207 185 ----- ----- ----- ----- WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING (FULLY DILUTED) 6,340 6,363 6,305 6,505 ===== ===== ===== ===== NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE (FULLY DILUTED) $ 0.84 $ 0.65 $ 2.25 $ 1.60 ===== ===== ===== ===== EX-15 6 EXHIBIT 15 EXHIBIT 15 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, DC 20549 re: C&D TECHNOLOGIES, Inc. and Subsidiaries Registration on Forms S-8 (Registration No. 33-31978, No. 33-71390, No. 33-86672, No. 333-17979 and No. 333-38891) We are aware that our report dated November 25, 1997 on our review of interim financial information of C&D TECHNOLOGIES, Inc. and Subsidiaries for the period ended October 31, 1997 and included in the Company's quarterly report on Form 10-Q for the quarter then ended is incorporated by reference in the registration statements of C&D Technologies, Inc. and Subsidiaries on Forms S-8 (Registration No. 33-31978, No. 33-71390, No. 33-86672, No. 333-17979 and No. 333-38891). Pursuant to Rule 436(c) under the Securities Act of 1933, this report should not be considered a part of the registration statement prepared or certified by us within the meaning of Sections 7 and 11 of that Act. COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center Philadelphia, Pennsylvania December 11, 1997 EX-27 7 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AS OF 10/31/97 AND STATEMENT OF INCOME FOR THE PERIOD ENDED 10/31/97 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 1000 9-MOS JAN-31-1998 OCT-31-1997 2915 0 45716 1675 40263 95658 54487 0 167288 44355 17816 0 0 66 90799 167288 230102 230102 170989 170989 6358 0 1041 22328 8170 14158 0 0 0 14158 2.25 2.25
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