-----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, SJ0M9jd2dCVQZaEOIauD2H8Dzng3vwrhRpDMgQeS+QYa83pUqeyiJ7V96wyk2poc R8YaV6L5HajisRAT+ba5Fw== 0000808064-02-000131.txt : 20021213 0000808064-02-000131.hdr.sgml : 20021213 20021213141415 ACCESSION NUMBER: 0000808064-02-000131 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 16 CONFORMED PERIOD OF REPORT: 20021031 FILED AS OF DATE: 20021213 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: 1934 Act SEC FILE NUMBER: 001-09389 FILM NUMBER: 02856892 BUSINESS ADDRESS: STREET 1: 1400 UNION MEETING ROAD STREET 2: PO BOX 3053 CITY: BLUE BELL STATE: PA ZIP: 19422 BUSINESS PHONE: 2156192700 MAIL ADDRESS: STREET 1: 1400 UNION MEETING ROAD STREET 2: PO BOX 3053 CITY: BLUE BELL STATE: PA ZIP: 19422 10-Q 1 q3-10q.txt 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, 2002 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) _________________N/A_________________ (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 November 29, 2002: 25,699,853 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES INDEX PART I. FINANCIAL INFORMATION Page No. Item 1 - Financial Statements Consolidated Balance Sheets - October 31, 2002 and January 31, 2002................ 3 Consolidated Statements of Income - Three and Nine Months Ended October 31, 2002 and 2001............... 5 Consolidated Statements of Cash Flows - Nine Months Ended October 31, 2002 and 2001.......... 6 Consolidated Statements of Comprehensive Income - Three and Nine Months Ended October 31, 2002 and 2001 8 Notes to Consolidated Financial Statements............ 9 Report of Independent Accountants..................... 17 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations... 18 Item 3 - Quantitative and Qualitative Disclosures About Market Risk............................... 24 Item 4 - Controls and Procedures.......................... 24 PART II. OTHER INFORMATION................................... 25 SIGNATURES and CERTIFICATIONS................................ 26 2 PART I. FINANCIAL INFORMATION Item 1 - Financial Statements C&D TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share data) (Unaudited) October 31, January 31, 2002 2002 ---- ---- ASSETS Current assets: Cash and cash equivalents................... $ 8,378 $ 8,781 Accounts receivable, less allowance for doubtful accounts of $2,183 and $2,278, respectively........................... 48,227 44,968 Inventories................................. 50,671 61,674 Deferred income taxes....................... 10,574 10,156 Other current assets........................ 1,388 6,754 ------- ------- Total current assets............. 119,238 132,333 Property, plant and equipment, net................ 118,423 131,207 Intangible and other assets, net.................. 27,774 24,659 Goodwill.......................................... 112,935 107,359 ------- ------- Total assets..................... $378,370 $395,558 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term debt............................. $ 14,655 $ 27,255 Accounts payable............................ 22,828 19,640 Accrued liabilities......................... 20,994 22,210 Income taxes................................ 4,421 - Other current liabilities................... 7,790 8,214 ------- ------- Total current liabilities........ 70,688 77,319 Deferred income taxes ............................ 3,500 2,602 Long-term debt.................................... 25,922 46,892 Other liabilities................................. 17,365 18,574 ------- ------- Total liabilities................ 117,475 145,387 ------- ------- The accompanying notes are an integral part of these statements. 3 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (continued) (Dollars in thousands, except per share data) (Unaudited) October 31, January 31, 2002 2002 ---- ---- Commitments and contingencies Minority interest................................. 8,281 8,313 Stockholders' equity: Common stock, $.01 par value, 75,000,000 shares authorized; 28,480,669 and 28,431,728 shares issued, respectively.. 285 284 Additional paid-in capital.................. 67,680 65,893 Treasury stock, at cost, 2,776,632 and 2,414,161 shares, respectively.......... (36,463) (29,743) Accumulated other comprehensive loss........ (257) (3,057) Retained earnings........................... 221,369 208,481 ------- ------- Total stockholders' equity....... 252,614 241,858 ------- ------- Total liabilities and stockholders' equity........... $378,370 $395,558 ======= ======= 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)
Three months ended Nine months ended October 31, October 31, 2002 2001 2002 2001 ---- ---- ---- ---- Net sales............................ $ 87,637 $102,505 $255,991 $383,381 Cost of sales........................ 66,829 80,395 196,335 277,729 ------- ------- ------- ------- Gross profit..................... 20,808 22,110 59,656 105,652 Selling, general and administrative expenses.......... 8,955 13,965 26,808 39,390 Research and development expenses......................... 2,461 2,461 7,355 7,895 ------- ------- ------- ------- Operating income................. 9,392 5,684 25,493 58,367 Interest expense, net................ 974 1,593 2,980 5,351 Other expense, net................... 258 706 368 832 ------- ------- ------- ------- Income before income taxes and minority interest............. 8,160 3,385 22,145 52,184 Provision for income taxes........... 2,953 1,252 8,127 19,308 ------- ------- ------- ------- Net income before minority interest...................... 5,207 2,133 14,018 32,876 Minority interest.................... 79 285 62 1,081 ------- ------- ------- ------- Net income....................... $ 5,128 $ 1,848 $ 13,956 $ 31,795 ======= ======= ======= ======= Net income per share - basic......... $ .20 $ .07 $ .54 $ 1.22 ======= ======= ======= ======= Net income per share - diluted....... $ .20 $ .07 $ .54 $ 1.19 ======= ======= ======= ======= Dividends per share.................. $ - $ .01375 $ .04125 $ .04125 ======= ======= ======= =======
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, 2002 2001* ---- ---- Cash flows provided (used) by operating activities: Net income........................................... $ 13,956 $ 31,795 Adjustments to reconcile net income to net cash provided by operating activities: Minority interest.............................. 62 1,081 Depreciation and amortization.................. 18,322 23,192 Deferred income taxes.......................... 480 (413) Loss on disposal of assets..................... 386 219 Changes in: Accounts receivable...................... (2,761) 27,153 Inventories.............................. 11,613 10,159 Other current assets..................... (225) (471) Accounts payable......................... 4,948 (20,355) Accrued liabilities...................... (808) (4,739) Income taxes payable..................... 10,069 (4,125) Other current liabilities................ (427) (1,098) Other liabilities........................ (919) (2,415) Other assets............................. (3,892) (201) Other, net..................................... (2,629) (263) ------- ------- Net cash provided by operating activities................ 48,175 59,519 ------- ------- Cash flows provided (used) by investing activities: Acquisition of property, plant and equipment......... (5,267) (22,473) Proceeds from disposal of property, plant and equipment..................................... 648 38 ------- ------- Net cash used by investing activities.................... (4,619) (22,435) ------- ------- Cash flows provided (used) by financing activities: Repayment of debt.................................... (34,611) (43,632) Proceeds from new borrowings......................... - 11,786 Financing cost of long-term debt..................... (118) - Proceeds from issuance of common stock, net.......... 524 1,439 Purchase of treasury stock........................... (8,393) (7,427) Payment of common stock dividends.................... (1,426) (1,441) Payment of minority interest dividends............... (94) - ------- ------- * Reclassified for comparative purposes. 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, 2002 2001* ---- ---- Net cash used by financing activities............. (44,118) (39,275) ------- ------- Effect of exchange rate changes on cash........... 159 (17) ------- ------- Decrease in cash and cash equivalents............. (403) (2,208) Cash and cash equivalents at beginning of period...................................... 8,781 7,709 ------- ------- Cash and cash equivalents at end of period........ $ 8,378 $ 5,501 ======= ======= SCHEDULE OF NON CASH INVESTING AND FINANCIAL ACTIVITIES Decrease in property, plant, and equipment acquisitions in accounts payable............................... $ (917) $ (4,435) ======= ======= Fair market value of treasury stock issued to pension plans........................ $ 1,625 $ - ======= ======= * Reclassified for comparative purposes. The accompanying notes are an integral part of these statements. 7 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in thousands) (Unaudited)
Three months ended Nine months ended October 31, October 31, 2002 2001 2002 2001 ---- ---- ---- ---- Net income............................................... $ 5,128 $ 1,848 $13,956 $31,795 Other comprehensive (expense) income, net of tax: Cumulative effect of accounting change................. - - - (103) Net unrealized loss on derivative instruments.......... (121) (1,016) (188) (1,491) Foreign currency translation adjustments............... 92 947 2,988 174 ------ ------ ------ ------ Total comprehensive income............................... $ 5,099 $ 1,779 $16,756 $30,375 ====== ====== ====== ======
The accompanying notes are an integral part of these statements. 8 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 of C&D Technologies, Inc. (together with its operating subsidiaries, the "Company") should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's Annual Report to Stockholders for the fiscal year ended January 31, 2002. The January 31, 2002 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, 2002 and the related consolidated statements of income and comprehensive income for the three and nine month periods ended October 31, 2002 and 2001 and the related consolidated statements of cash flow for the nine months ended October 31, 2002 and 2001. However, interim results of operations may not be indicative of results for the full fiscal year. 2. NEW ACCOUNTING PRONOUNCEMENTS On February 1, 2002, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets." This statement addresses financial accounting and reporting for acquired goodwill and other intangible assets. As required by SFAS No. 142, the Company discontinued amortizing the remaining balance of goodwill. All remaining and future acquired goodwill will be subject to an annual impairment test (or more frequently if impairment indicators arise), using a fair value-based approach. Other intangible assets will continue to be amortized over their estimated useful lives and assessed for impairment under SFAS No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets." SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. SFAS No. 144 supersedes SFAS No. 121 and the accounting and reporting provisions of Accounting Principles Board Opinion No. 30. In August 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 143, "Accounting for Asset Retirement Obligations." This statement addresses financial accounting and reporting requirements for obligations associated with the retirement of tangible long-lived assets and the associated retirement costs. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. The Company is currently in the process of evaluating the impact SFAS No. 143 will have on its financial position and results of operations, if any. In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities," which addresses the recognition, measurement and reporting of costs associated with exit or disposal activities, and supersedes Emerging Issues Task Force ("EITF") Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." The principal difference between SFAS No. 146 and EITF No. 94-3 relates to the requirements for recognition of a liability for a disposal activity, (including those related to employee termination benefits and obligations under operating leases and other contracts), be recognized when the liability is incurred, and not necessarily the date of an entity's commitment to an exit plan, as under EITF No. 94-3. SFAS No. 146 also establishes that the initial measurement of a liability recognized under SFAS No. 146 be based on fair value. The provisions of SFAS No. 146 are effective for exit or disposal activities that are initiated after December 31, 2002, with early application encouraged. 9 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share data) (UNAUDITED) 3. GOODWILL AND IDENTIFIED INTANGIBLE ASSETS Goodwill: In conjunction with the implementation of SFAS No. 142, the Company has completed the transitional goodwill impairment test as of February 1, 2002 and has determined that no impairment to goodwill existed. Net income and net income per common share adjusted to exclude goodwill amortization is as follows:
Three months ended Nine months ended October 31, October 31, 2002 2001 2002 2001 ---- ---- ---- ---- Reported net income...................... $5,128 $1,848 $13,956 $31,795 Goodwill amortization, net of tax........ - 1,106 - 3,062 ----- ----- ------ ------ Adjusted net income...................... $5,128 $2,954 $13,956 $34,857 ===== ===== ====== ====== Reported net income per common share - basic.................... $ .20 $ .07 $ .54 $ 1.22 Goodwill amortization, net of tax........ - .04 - .11 ----- ----- ------ ------ Adjusted net income per common share - basic.................... $ .20 $ .11 $ .54 $ 1.33 ===== ===== ====== ====== Reported net income per common share - diluted.......... $ .20 $ .07 $ .54 $ 1.19 Goodwill amortization, net of tax........ - .04 - .11 ----- ----- ------ ------ Adjusted net income per common share - diluted.................. $ .20 $ .11 $ .54 $ 1.30 ===== ===== ====== ======
10 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share data) (UNAUDITED) 3. GOODWILL AND IDENTIFIED INTANGIBLE ASSETS (continued) During the nine months ended October 31, 2002, no goodwill was acquired, impaired or written off. Goodwill by operating segment was adjusted as follows:
Power Motive Powercom Dynasty Electronics Power Total -------- ------- ----------- ----- ----- Goodwill, January 31, 2002........................... $1,376 $57,939 $47,551 $493 $107,359 Assembled workforce reclassified..................... - - 879 - 879 Effect of exchange rate changes on goodwill.......... 3 117 4,576 1 4,697 ----- ------ ------ --- ------- Goodwill, October 31, 2002........................... $1,379 $58,056 $53,006 $494 $112,935 ===== ====== ====== === =======
Identified Intangible Assets: During the nine months ended October 31, 2002, no acquisition-related intangibles were acquired, impaired or written off. Identified intangible assets as of October 31, 2002 consisted of the following: Accumulated Gross Assets Amortization Net ------------ ------------ --- Trade names................. $17,840 $(3,271) $14,569 Intellectual property....... 7,738 (5,306) 2,432 Other....................... 2,407 (959) 1,448 ------ ------ ------ Total intangible assets..... $27,985 $(9,536) $18,449 ====== ====== ====== Identified intangible assets as of January 31, 2002 consisted of the following: Accumulated Gross Assets Amortization Net ------------ ------------ --- Trade names................. $17,840 $(2,602) $15,238 Intellectual property....... 7,601 (4,706) 2,895 Other....................... 3,675 (1,251) 2,424 ------ ------ ------ Total intangible assets..... $29,116 $(8,559) $20,557 ====== ====== ====== Based on intangibles recorded at October 31, 2002, the annual amortization expense is expected to be as follows (assuming current exchange rates): 2003 2004 2005 2006 2007 ---- ---- ---- ---- ---- Trade names................. $ 892 $ 892 $ 892 $ 892 $ 892 Intellectual property....... 775 775 411 358 183 Other....................... 128 128 79 76 35 ----- ----- ----- ----- ----- Total intangible assets..... $1,795 $1,795 $1,382 $1,326 $1,110 ===== ===== ===== ===== ===== Amortization of identified intangibles was $1,346 for the nine months ended October 31, 2002. 11 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share data) (UNAUDITED) 4. INVENTORIES Inventories consisted of the following: October 31, January 31, 2002 2002 ---- ---- Raw materials............................ $19,682 $26,202 Work-in-progress......................... 11,035 12,830 Finished goods........................... 19,954 22,642 ------ ------ $50,671 $61,674 ====== ====== 5. 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, 2002 2001 ---- ---- U.S. statutory income tax....................... 35.0% 35.0% State tax, net of federal income tax benefit.... 1.7 2.4 Foreign sales corporation....................... - (0.3) Tax effect of foreign operations................ (0.3) 0.4 Research and development credit................. - (0.1) Other........................................... 0.3 (0.4) ---- ---- 36.7% 37.0% ==== ==== 6. NET INCOME PER COMMON SHARE Net income per share - basic for the three and nine month periods ended October 31, 2002 and 2001 is based on the weighted average number of shares of Common Stock outstanding. Net income per share - diluted reflects the potential dilution that could occur if stock options were exercised. Weighted average common shares and common shares - diluted were as follows:
Three months ended Nine months ended October 31, October 31, 2002 2001 2002 2001 ---- ---- ---- ---- Weighted average shares of common stock outstanding................................... 25,670,645 26,178,156 25,851,493 26,166,802 Assumed exercise of stock options, net of shares assumed reacquired............................ 128,409 323,749 218,644 604,906 ---------- ---------- ---------- ---------- Weighted average common shares - diluted.............................. 25,799,054 26,501,905 26,070,137 26,771,708 ========== ========== ========== ==========
12 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share data) (UNAUDITED) 7. CONTINGENT LIABILITIES Environmental: The Company is subject to extensive and evolving environmental laws and regulations regarding the clean up and protection of the environment, worker health and safety and the protection of third parties. These laws and regulations include, but are not limited to: (i) requirements relating to the handling, storage, use and disposal of lead and other hazardous materials used in manufacturing processes and solid wastes; (ii) record keeping and periodic reporting to governmental entities regarding the use of hazardous substances and disposal of hazardous wastes; (iii) monitoring and permitting of air and water emissions; and (iv) monitoring worker exposure to hazardous substances in the workplace, and protecting workers from impermissible exposure to hazardous substances, including lead, used in the Company's manufacturing process. Notwithstanding the Company's efforts to maintain compliance with applicable environmental requirements, if injury or damage to persons or the environment arises from hazardous substances used, generated or disposed of in the conduct of the Company's business (or that of a predecessor to the extent the Company is not indemnified therefor), the Company may be held liable for certain damages and for the costs of investigation and remediation, which could have a material adverse effect on the Company's business, financial condition or results of operations. However, under the terms of the purchase agreement with Allied Corporation ("Allied") for the acquisition of the Company (the "Acquisition Agreement"), Allied was 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. These obligations have since been assumed by Allied's successor in interest, Honeywell ("Honeywell"). 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 three 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. The Company and four other potentially responsible parties ("PRPs") agreed upon a cost sharing arrangement for the design and remediation phases of a project related to one of the Third Party Facilities, the former NL Industries site in Pedricktown, New Jersey, acting pursuant to a Consent Decree. The PRPs identified and sued additional PRPs for contribution. In April 2002 one of the original four PRPs, Exide Technologies ("Exide"), filed for relief under Chapter 11 of Title 11 of the United States Code. On August 6, 2002, Exide notified the PRPs that it will no longer be taking an active role in any further action at the site and discontinued its financial participation. This resulted in a pro rata increase in the liabilities of the other PRPs, including the Company. The Company also responded to requests for information from the EPA and the state environmental agency with regard to another Third Party Facility, the "Chicago Site," in October 1991. In August 2002, the Company was notified of its involvement as a PRP at the NL Atlanta, Northside Drive Superfund site. The Company is currently reviewing information regarding its involvement at this site. Allied and/or Honeywell has accepted responsibility under the Acquisition Agreement for potential liabilities relating to all third party facilities other than the aforementioned sites. 13 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share data) (UNAUDITED) 7. CONTINGENT LIABILITIES (continued) The Company is also aware of the existence of contamination at its Huguenot, New York facility, which is expected to require expenditures for further investigation and remediation. The site is listed by the New York State Department of Environmental Conservation ("NYSDEC") on its registry of inactive hazardous waste disposal sites due to the presence of fluoride and other contamination in amounts that exceed state groundwater standards. The prior owner of the site is expected to ultimately bear some, as yet undetermined, share of the costs associated with this matter for contamination in place at the time the Company acquired the property. The NYSDEC has issued a Record of Decision for the soil remediation portion of this site. However, a final remediation plan for the ground water portion has not yet been finalized with or approved by the State of New York. The Company, together with Johnson Controls, Inc. ("JCI"), is conducting an assessment and remediation of contamination at the Company's Dynasty Division facility in Milwaukee, Wisconsin. The majority of this project was completed as of October 2001. Under the purchase agreement with JCI, the Company is responsible for (i) one-half of the cost of the on-site assessment and remediation, with a maximum liability of $1,750, (ii) any environmental liabilities at the facility that are not remediated as part of the current project and (iii) environmental liabilities for claims made after the fifth anniversary of the closing, i.e. March 2004, that arise from migration from a pre-closing condition at the Milwaukee facility to locations other than the Milwaukee facility, but specifically excluding liabilities relating to pre-closing offsite disposal. JCI has retained all other environmental liabilities, including off-site assessment and remediation. In January 1999, the Company received notification from the EPA of alleged violations of permit effluent and pretreatment discharge limits at its plant in Attica, Indiana. The Company submitted a compliance plan to the EPA in April 2002. The Company is in active negotiations with both the EPA and Department of Justice regarding a potential resolution of this matter, which is likely to result in a penalty assessment. The Company accrues reserves for liabilities in the Company's consolidated financial statements and periodically reevaluates the reserved amounts for these liabilities in view of the most current information available in accordance with SFAS No. 5. Based on currently available information, management of the Company believes that appropriate reserves have been established with respect to the foregoing contingent liabilities and that they are not expected to have a material adverse effect on the Company's business, financial condition or results of operations. 14 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share data) (UNAUDITED) 8. OPERATIONS BY INDUSTRY SEGMENT The Company has the following four reportable business segments: The Powercom Division manufactures and markets integrated reserve power systems and components for the standby power market, which includes telecommunications, uninterruptible power supplies and utilities. Integrated reserve power systems monitor and regulate electric power flow and provide backup power in the event of a primary power loss or interruption. The Powercom Division also produces the individual components of these systems, including reserve batteries, power rectifiers, system monitors, power boards and chargers. The Dynasty Division manufactures and markets industrial batteries primarily for the uninterruptible power supply, telecommunications and cable markets. Major applications of these products include wireless and wireline telephone infrastructure, CATV signal powering, corporate data center powering and computer network back-up for use during power utility outages. The Power Electronics Division manufactures and markets custom, standard and modified-standard electronic power supply systems, including DC to DC converters, for large original equipment manufacturers ("OEMs") of telecommunications equipment, office products, computers and industrial applications. The Motive Power Division manufactures complete systems and individual components (including power electronics and batteries) to power, monitor, charge and test the batteries used in electric industrial vehicles, including fork-lift trucks, automated guided vehicles and airline ground support equipment. These products are marketed to end users in a broad array of industries, dealers of fork-lift trucks and other material handling vehicles, and, to a lesser extent, OEMs. Summarized financial information related to the Company's business segments for the three and nine months ended October 31, 2002 and 2001 is shown below:
Power Motive Powercom Dynasty Electronics Power Division Division Division Division Consolidated -------- -------- ----------- -------- ------------ Three months ended October 31, 2002: Net sales................................ $ 38,009 $23,460 $12,265 $13,903 $ 87,637 Operating income (loss).................. $ 6,340 $ 3,929 $ 181 $(1,058) $ 9,392 Three months ended October 31, 2001: Net sales................................ $ 51,009 $27,431 $10,785 $13,280 $102,505 Operating income (loss).................. $ 9,622 $ 2,564 $(5,105) $(1,397) $ 5,684 Nine months ended October 31, 2002: Net sales................................ $110,165 $67,570 $37,601 $40,655 $255,991 Operating income (loss).................. $ 17,650 $10,339 $ 757 $(3,253) $ 25,493 Nine months ended October 31, 2001: Net sales................................ $194,607 $89,574 $51,068 $48,132 $383,381 Operating income (loss).................. $ 49,667 $13,499 $(4,733) $ (66) $ 58,367
15 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share data) (UNAUDITED) 9. DERIVATIVE INSTRUMENTS The following table includes all interest rate swaps as of October 31, 2002 and January 31, 2002. These interest rate swaps are designated as cash flow hedges and, therefore, changes in the fair value, net of tax, are recorded in accumulated other comprehensive loss. Fixed Variable Fair Fair Interest Interest Value Value Notional Origination Maturity Rate Rate At At Amount Date Date Paid Received 10/31/02 1/31/02 - -------- ----------- -------- -------- -------- -------- ------- $ 6,500 12/20/95 12/20/02 6.01% LIBOR $ - $ (240) 20,000 03/11/99 03/11/02 5.58% LIBOR - (77) 20,000 02/05/01 03/01/03 5.24% LIBOR (237) (783) 20,000 04/11/01 04/11/06 5.56% LIBOR (1,888) (735) ------- ------- $(2,125) $(1,835) ======= ======= The Company does not invest in derivative securities for speculative purposes, but does enter into hedging arrangements in order to reduce its exposure to fluctuations in interest rates as well as to fluctuations in exchange rates. The Company applies hedge accounting in accordance with SFAS No. 133, whereby the Company designates each derivative as a hedge of (i) the fair value of a recognized asset or liability or of an unrecognized firm commitment ("fair value" hedge); or (ii) the variability of anticipated cash flows of a forecasted transaction or the cash flows to be received or paid related to a recognized asset or liability ("cash flow" hedge). From time to time, however, the Company may enter into derivatives that economically hedge certain of its risks, even though hedge accounting is not allowed by SFAS No. 133 or is not applied by the Company. In these cases, there generally exists a natural hedging relationship in which changes in fair value of the derivative, which are recognized currently in earnings, act as an economic offset to changes in the fair value of the underlying hedged item(s). The Company did not apply hedge accounting to currency forward contracts with a combined fair value of $(434)and $(34) as of October 31, 2002 and January 31, 2002. Changes in the fair value of these currency forward contracts are recorded in earnings. 16 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of C&D Technologies, Inc.: We have reviewed the accompanying consolidated balance sheet of C&D Technologies, Inc. and its subsidiaries (the "Company") as of October 31, 2002, and the related consolidated statements of income and comprehensive income for each of the three-month and nine-month periods ended October 31, 2002 and 2001, and the consolidated statement of cash flows for the nine-month periods ended October 31, 2002 and 2001. 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 interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America. We previously audited in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet as of January 31, 2002, and the related consolidated statements of income, stockholders' equity, cash flows, and comprehensive income for the year then ended (not presented herein), and in our report dated March 5, 2002 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of January 31, 2002, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. /s/ PricewaterhouseCoopers LLP - ------------------------------ PricewaterhouseCoopers LLP Philadelphia, PA November 20, 2002 17 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars in thousands, except per share data) Within the following discussion, unless otherwise stated, "quarter" and "nine-month period", refer to the third quarter of fiscal 2003 and the nine months ended October 31, 2002. All comparisons are with the corresponding periods in the prior year, unless otherwise stated. Net sales decreased $14,868 or 15% for the quarter and $127,390 or 33% for the nine-month period. Sales of the Powercom Division decreased $13,000 or 25% during the quarter, mainly due to lower demand from the telecommunications and UPS markets. Reduced levels of capital spending in these sectors have continued to affect sales. Sales by the Dynasty Division declined $3,971 or 14% during the quarter, due to lower sales to the UPS and telecommunications markets, partially offset by increased sales to the cable market. Reduced demand for our sealed products has continued to affect this division. Over 60% of the Dynasty Division's quarterly sales were to the UPS market, which continues to be affected by a general business slowdown. Sales to the cable industry were up substantially over last year, and there appears to be an increase in demand within both the cable and broadband markets. These other divisional decreases were offset by increased sales in the Power Electronics and Motive Power divisions. The sales increase in the Power Electronics Division was primarily due to increased DC to DC converter sales. In the Motive Power Division, the sales increase resulted from higher battery sales, partially offset by lower charger sales. The decrease in net sales for the nine-month period resulted from lower customer demand for products of all divisions. Sales of the Powercom Division decreased $84,442 or 43% during the nine-month period, mainly due to lower demand from the telecommunications and UPS markets. Sales by the Dynasty Division declined $22,004 or 25% during the nine-month period, due to lower sales to the telecommunications and UPS markets, partially offset by increased sales to the mobility and cable markets. Motive Power divisional sales decreased $7,477 or 16% during the nine-month period, primarily consisting of lower battery and charger sales. Power Electronics divisional sales decreased $13,467 or 26% during the nine-month period, primarily due to a decline in DC to DC converter sales to key telecommunications customers. We have been actively quoting business in the DC to DC and AC to DC markets but design wins have not yet resulted in significant sales. Gross profit for the quarter decreased $1,302 or 6% to $20,808 from $22,110 in the same quarter of the prior year while gross margins increased from 21.6% to 23.7% in the third quarter of fiscal 2003. Gross profit during the quarter was lower in the Powercom and Dynasty divisions, primarily as a result of lower sales. Gross profit in the Motive Power and Power Electronics divisions increased in the quarter, primarily as a result of higher sales, coupled with an inventory-related charge in our Power Electronics Division in the comparable period of the prior year. Gross profit for the nine-month period decreased $45,996 or 44% to $59,656 from $105,652 in the prior year while gross margins decreased from 27.6% to 23.3%. Gross profit was lower in the nine-month period in the Powercom, Dynasty and Motive Power divisions primarily as a result of lower sales volumes, coupled with plant operational difficulties in the Motive Power Division. Gross profit in the Power Electronics Division increased on lower sales due to the aforementioned inventory-related charge in the comparable period of the prior year. 18 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) (Dollars in thousands, except per share data) Selling, general and administrative ("SG&A") expenses for the third quarter of fiscal 2003 decreased $5,010 or 36%. This decrease was primarily due to: (i) costs recorded in the third quarter of fiscal 2002 related to a potential acquisition that did not close; (ii) the implementation of SFAS No. 142 in the current year, which discontinued the amortization of goodwill; and (iii) lower variable selling costs associated with decreased sales volumes. The decrease in SG&A expenses for the three-month period was partially offset by higher Motive Power warranty expenses. SG&A expenses for the nine-month period decreased $12,582 or 32% due to: (i) lower variable selling costs associated with the decreased sales volumes; (ii) the implementation of SFAS No. 142 in the current year; (iii) costs recorded in the prior year related to the aforementioned potential acquisition that did not close; and (iv) lower payroll-related expenses. This decrease was partially offset by the positive effect of the full recovery of certain litigation and settlement costs from one of our insurance carriers during the first quarter of fiscal 2002. Research and development expenses were $2,461 in both the third quarter of fiscal 2003 and the third quarter of fiscal 2002. As a percentage of sales, research and development expenses increased from 2% in the third quarter of fiscal 2002 to 3% in the third quarter of fiscal 2003 as a result of lower sales volumes. For the nine-month period, research and development expenses decreased $540 or 7%, primarily as a result of lower spending by the Power Electronics and Powercom divisions. As a percentage of sales, research and development expenses increased from 2% in the first nine months of fiscal 2002 to 3% in the first nine months of fiscal 2003 as a result of lower sales volumes. Operating income for the quarter increased $3,708 or 65% to $9,392 from $5,684 in the third quarter of the prior year. This increase resulted from higher operating income generated by the Dynasty Division, operating income in the Power Electronics Division (compared to an operating loss in the third quarter of fiscal 2002) and a lower operating loss in the Motive Power Division. The Powercom Division recorded lower operating income in the third quarter of fiscal 2003. For the nine-month period, operating income decreased $32,874 or 56% to $25,493 from $58,367 in the nine months ended October 31, 2001. This decrease was the result of lower operating income generated by the Powercom and Dynasty divisions coupled with a larger operating loss generated by the Motive Power Division, partially offset by operating income generated by the Power Electronics Division (compared to an operating loss in the comparable period of the prior year). We continue to see no significant near-term improvement in the financial performance of the Power Electronics Division. Although the Motive Power Division operated at a loss in the quarter, we are increasingly optimistic that the operational issues have been corrected and we expect the Motive Power business to generate improved results in the fourth quarter. Interest expense, net, decreased $619 in the quarter and $2,371 in the nine-month period, primarily due to lower average debt balances outstanding, coupled with lower effective interest rates. Income tax expense for the quarter increased $1,701 as a result of higher income before income taxes, partially offset by a lower effective tax rate. For the nine-month period, income tax expense decreased $11,181 due to lower income before income taxes, coupled with a lower effective tax rate. The effective tax rate consists of statutory rates adjusted for the tax impact of our foreign sales corporation, research and development credits and foreign operations. The effective tax rate for the third quarter of fiscal 2003 was 36.2% compared to 37.0% in the third quarter of the prior fiscal year. For the nine-month period, the effective tax rate was 36.7% compared to 37.0% in the comparable period of the prior year. Minority interest decreased $206 in the quarter and $1,019 in the nine-month period, primarily due to lower income recorded by the Shanghai, China joint venture. Minority interest reflects the 33% ownership of the joint venture that is not owned by C&D. As a result of the above, net income increased $3,280 or 177% in the third quarter of fiscal 2003 to $5,128 or 20 cents per share - basic and diluted. For the nine-month period, net income decreased $17,839 or 56% to $13,956 or 54 cents per share - basic and diluted. Based on our cost containment initiatives and a business environment that appears to have bottomed, we anticipate our fourth quarter earnings to be comparable to those of the third quarter. 19 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) (Dollars in thousands, except per share data) Liquidity and Capital Resources Net cash provided by operating activities decreased $11,344 or 19% to $48,175 for the nine-month period ended October 31, 2002, compared to $59,519 for the same period of the prior year. This decrease in net cash provided by operating activities was primarily due to: (i) an increase in accounts receivable during the nine months ended October 31, 2002 versus a decrease in the comparable period of the prior year (due to the slowdown in business that occurred in the prior year); (ii) a decrease in net income; (iii) a decrease in deprecation and amortization (primarily due to the implementation of SFAS No. 142 in the current year); and (iv) a larger increase in other assets (primarily due to additional pension plan funding of approximately $5,000 in cash ). These changes, resulting in lower net cash provided by operating activities, were partially offset by: (i) an increase in accounts payable during the nine months ended October 31, 2002 versus a decrease in the comparable period of the prior year (due to the slowdown in business that occurred in the prior year); and (ii) an increase in current taxes payable versus a decrease in the prior year. Net cash used by investing activities decreased $17,816 or 79% to $4,619 in the nine months ended October 31, 2002 compared to $22,435 in the same period of the prior year, primarily due to lower capital spending. Net cash used by financing activities increased $4,843 or 12% to $44,118 in the first nine months of fiscal 2003 compared to $39,275 in the prior year. This increase was due to having no proceeds from new borrowings in the current year as compared to $11,786 in the prior year, partially offset a decrease in the reduction of long-term debt. New borrowings in fiscal 2002 related to a 22 million British Pound Sterling line of credit, the proceeds of which were used to pay down debt denominated in U.S. Dollars. The availability under our current loan agreement is expected to be sufficient to meet our ongoing cash needs for working capital requirements, debt service, capital expenditures and possible strategic acquisitions. This loan agreement contains restrictive covenants that require us to maintain minimum ratios such as fixed charge coverage and leverage ratios, as well as minimum consolidated net worth. We were in compliance with our loan agreement covenants at October 31, 2002. Capital expenditures during the first nine months of fiscal 2003 were incurred to fund a continuing series of cost reduction programs, normal maintenance and regulatory compliance. Total fiscal 2003 capital expenditures are expected to be approximately $7,000 for similar purposes. We intend to continue making prudent purchases of our Company stock, paying down debt and selectively pursuing complementary acquisitions. Strategic acquisition opportunities will be expected to enhance C&D's long-term competitive position and growth prospects and may require external financing. We cannot assure, however, that we will close on any such acquisitions. During the third quarter, we contributed 100,000 shares of C&D stock into our defined benefit pension plan and contributed an additional $5,000 in cash. We expect to contribute a comparable amount of additional cash and/or stock by the end of the current calendar year. Our bank loan agreement permits quarterly dividends to be paid on our Common Stock as long as there is no default under that agreement. Subject to that restriction and the provisions of Delaware law, our Board of Directors currently intends to continue paying quarterly dividends. We cannot assure you that we will continue to do so since future dividends will depend on our earnings, financial condition and other factors. During the second quarter of fiscal 2002, quarterly dividends were declared twice: once in May for payment in July and once in July for payment in October. There was not a quarterly dividend declaration during the third quarter of fiscal 2003. A regular quarterly dividend was declared on November 19, 2002. 20 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) (Dollars in thousands, except per share data) NEW ACCOUNTING PRONOUNCEMENTS On February 1, 2002, we adopted SFAS No. 142, "Goodwill and Other Intangible Assets." This statement addresses financial accounting and reporting for acquired goodwill and other intangible assets. As required by SFAS No. 142, we discontinued amortizing the remaining balance of goodwill. All remaining and future acquired goodwill will be subject to an annual impairment test (or more frequently if impairment indicators arise), using a fair value-based approach. Other intangible assets will continue to be amortized over their estimated useful lives and assessed for impairment under SFAS No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets." SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. SFAS No. 144 supersedes SFAS No. 121 and the accounting and reporting provisions of Accounting Principles Board Opinion No. 30. In conjunction with the implementation of SFAS No. 142, we have completed the transitional goodwill impairment test as of February 1, 2002 and have determined that no impairment to goodwill existed. Net income and net income per common share adjusted to exclude goodwill amortization is as follows:
Three months ended Nine months ended October 31, October 31, 2002 2001 2002 2001 ---- ---- ---- ---- Reported net income...................... $5,128 $1,848 $13,956 $31,795 Goodwill amortization, net of tax........ - 1,106 - 3,062 ----- ----- ------ ------ Adjusted net income...................... $5,128 $2,954 $13,956 $34,857 ===== ===== ====== ====== Reported net income per common share - basic.................... $ .20 $ .07 $ .54 $ 1.22 Goodwill amortization, net of tax........ - .04 - .11 ----- ----- ------ ------ Adjusted net income per common share - basic.................... $ .20 $ .11 $ .54 $ 1.33 ===== ===== ====== ====== Reported net income per common share - diluted.......... $ .20 $ .07 $ .54 $ 1.19 Goodwill amortization, net of tax........ - .04 - .11 ----- ----- ------ ------ Adjusted net income per common share - diluted.................. $ .20 $ .11 $ .54 $ 1.30 ===== ===== ====== ======
In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations." This statement addresses financial accounting and reporting requirements for obligations associated with the retirement of tangible long-lived assets and the associated retirement costs. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. We are currently in the process of evaluating the impact SFAS No. 143 will have on our financial position and results of operations, if any. 21 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) (Dollars in thousands, except per share data) In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities," which addresses the recognition, measurement, and reporting of costs associated with exit or disposal activities, and supersedes Emerging Issues Task Force ("EITF") Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." The principal difference between SFAS No. 146 and EITF No. 94-3 relates to the requirements for recognition of a liability for a disposal activity, (including those related to employee termination benefits and obligations under operating leases and other contracts), be recognized when the liability is incurred, and not necessarily the date of an entity's commitment to an exit plan, as under EITF No. 94-3. SFAS No. 146 also establishes that the initial measurement of a liability recognized under SFAS No. 146 be based on fair value. The provisions of SFAS No. 146 are effective for exit or disposal activities that are initiated after December 31, 2002, with early application encouraged. FORWARD-LOOKING STATEMENTS Certain of the statements and information contained in this Quarterly Report on Form 10-Q, 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) and, accordingly, are subject to risks and uncertainties. For such statements, we claim the protection of the safe-harbor for forward-looking statements contained in the Private Securities Litigation Act of 1995. The factors that could cause actual results to differ materially from anticipated results expressed or implied in any forward-looking statement include those referenced in the forward-looking statement, following the forward-looking statement, described in the notes to the Consolidated Financial Statements and other factors discussed in this Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to update or revise these statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q. Forward-looking statements may be identified by their use of words like "plans," "expects," "will," "anticipates," "intends," "projects," "estimates," "believes" or other words of similar meaning. All statements that address expectations or projections about the future, including, but not limited to, statements about our strategy for growth, product development, market position, market conditions, expenditures and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. We cannot guarantee that these assumptions and expectations are accurate or will be realized. Following are some of the important factors that could cause our actual results to differ materially from those projected in any such forward-looking statements: o We operate worldwide and derive a portion of our revenue from sales outside the United States. Changes in the laws or policies of governmental and quasi-governmental agencies, as well as social and economic conditions, in the countries in which we operate could affect our business in these countries and our results of operations. In addition, economic factors (including inflation and fluctuations in interest rates and foreign currency exchange rates) and competitive factors (such as price competition, business combinations of competitors or a decline in industry sales from slowing economic growth) both in the United States and other countries in which we conduct business could affect our results of operations. o Our results of operations could be significantly impacted by adverse conditions in the domestic and global economies or the markets in which we conduct business, such as telecommunications, UPS, CATV, switchgear and control and material handling. 22 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) (Dollars in thousands, except per share data) FORWARD-LOOKING STATEMENTS (continued) o Our ability to grow earnings could be affected by increases in the cost of raw materials, particularly lead. We may not be able to fully offset the effects of higher raw material costs through price increases or productivity improvements. o Our ability to meet customer demand depends, in part, on our ability to obtain timely and adequate delivery of parts and components from our suppliers and internal manufacturing capacity. Although we work closely with our suppliers to avoid shortages, there can be no assurance that we will not encounter shortages in the future. A reduction or interruption in component supply or a significant increase in the price of one or more components could have a material adverse effect on our operations. o Our growth objectives are largely dependent on our ability to renew our pipeline of new products and to bring these products to market. This ability may be adversely affected by difficulties or delays in product development, such as the inability to: identify viable new products; successfully complete research and development projects; obtain adequate intellectual property protection; or gain market acceptance of the new products. Our growth could also be affected by new competitive products and technologies. o As part of our strategy for growth, we have made and may continue to make acquisitions, and in the future, may make divestitures and form strategic alliances. There can be no assurance that these will be completed or beneficial to us. o Our facilities are subject to a broad array of environmental laws and regulations. The costs of complying with complex environmental laws and regulations, as well as internal voluntary programs, are significant and will continue to be so for the foreseeable future. Our accruals for such costs and liabilities may not be adequate since the estimates on which the accruals are based depend on a number of factors including, but not limited to, the nature of the problem, the complexity of the site, the nature of the remedy, the outcome of discussions with regulatory agencies and other PRPs at multiparty sites, the number and financial viability of other PRPs and risks associated with litigation. o We are exposed to the credit risk of some of our customers including risk of insolvency and bankruptcy. Although we have programs in place to monitor and mitigate the associated risk, there can be no assurance that such programs will be effective in reducing our credit risks. o Our business, results of operations and financial condition could be affected by significant pending and future litigation adverse to us, such as, without limitation, product liability, contract and employment-related claims and claims arising from any injury or damage to persons or the environment from hazardous substances used, generated or disposed of in the conduct of our business (or that of a predecessor to the extent we are not indemnified for those liabilities). o Our performance depends on our ability to attract and retain qualified personnel. We cannot assure that we will be able to continue to attract and retain qualified personnel. The foregoing list of important factors is not all-inclusive, or necessarily in order of importance. 23 Item 3. Quantitative and Qualitative Disclosure About Market Risk We are exposed to various market risks. The primary financial risks include fluctuations in interest rates and changes in currency exchange rates. We manage these risks by using derivative instruments. We do not invest in derivative securities for speculative purposes, but do enter into hedging arrangements in order to reduce our exposure to fluctuations in interest rates as well as to fluctuations in exchange rates. Our financial instruments subject to interest rate risk consist of debt instruments and interest rate swap contracts. The debt instruments are subject to variable rate interest, and therefore the market value is not sensitive to interest rate movements. Interest rate swap contracts are used to manage our exposure to fluctuations in interest rates on our underlying variable rate debt instruments. Additional disclosure regarding our various market risks are set forth in our fiscal 2002 Form 10-K filed with the Securities and Exchange Commission. Item 4. Controls and Procedures Under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, the Company has evaluated the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rule 13a-14(c) within 90 days of the filing date of this quarterly report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective. There were no significant changes in the Company's internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation, nor were there any significant deficiencies or material weaknesses in these controls requiring corrective actions. 24 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 3.1 Amended and Restated By-laws of C&D Technologies, Inc. (filed herewith). 10.1 Employee Separation Agreement dated September 24, 2002 between Kathryn Bullock and C&D (filed herewith). 10.2 Indemnification Agreement dated as of November 19, 2002 by and between C&D Technologies, Inc. and William Harral, III (filed herewith). 10.3 Indemnification Agreement dated as of November 19, 2002 by and between C&D Technologies, Inc. and Wade H. Roberts, Jr. (filed herewith). 10.4 Indemnification Agreement dated as of November 19, 2002 by and between C&D Technologies, Inc. and Peter R. Dachowski (filed herewith). 10.5 Indemnification Agreement dated as of November 19, 2002 by and between C&D Technologies, Inc. and Kevin P. Dowd (filed herewith). 10.6 Indemnification Agreement dated as of November 19, 2002 by and between C&D Technologies, Inc. and Robert I. Harries (filed herewith). 10.7 Indemnification Agreement dated as of November 19, 2002 by and between C&D Technologies, Inc. and Pamela S. Lewis (filed herewith). 10.8 Indemnification Agreement dated as of November 19, 2002 by and between C&D Technologies, Inc. and George MacKenzie (filed herewith). 10.9 Indemnification Agreement dated as of November 19, 2002 by and between C&D Technologies, Inc. and John A.H. Shober (filed herewith). 10.10 First Amendment dated June 12, 2002 to the C&D Technologies Savings Plan, as restated and amended (filed herewith). 10.11 Second Amendment dated November 20, 2002 to the C&D Technologies Savings Plan, as restated and amended (filed herewith). 15. Letter from PricewaterhouseCoopers LLP, independent accountants for C&D, regarding unaudited interim financial information (filed herewith). 99.1 Certification of the President and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith). 99.2 Certification of the Vice President, Finance pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith). 25 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 13, 2002 BY: /s/ Wade H. Roberts, Jr. --------------------------------- Wade H. Roberts, Jr. President, Chief Executive Officer and Director (Principal Executive Officer) December 13, 2002 BY: /s/ Stephen E. Markert, Jr. ---------------------------------- Stephen E. Markert, Jr. Vice President Finance (Principal Financial and Accounting Officer) CERTIFICATION ------------- I, Wade H. Roberts, Jr., certify that: 1. I have reviewed this quarterly report on Form 10-Q of C&D Technologies, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weakness in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in the internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weakness. Date: December 13, 2002 /s/ Wade H. Roberts, Jr. ------------------ ----------------------------- Wade H. Roberts, Jr. President and Chief Executive Officer (Principal Executive Officer) 26 CERTIFICATION ------------- I, Stephen E. Markert, Jr., certify that: 1. I have reviewed this quarterly report on Form 10-Q of C&D Technologies, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weakness in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in the internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weakness. Date: December 13, 2002 /s/ Stephen E. Markert, Jr. ------------------ ----------------------------- Stephen E. Markert, Jr. Vice President Finance (Principal Financial and Accounting Officer) 27 EXHIBIT INDEX 3.1 Amended and Restated By-laws of C&D Technologies, Inc. 10.1 Employee Separation Agreement dated September 24, 2002 between Kathryn Bullock and C&D. 10.2 Indemnification Agreement dated as of November 19, 2002 by and between C&D Technologies, Inc. and William Harral, III. 10.3 Indemnification Agreement dated as of November 19, 2002 by and between C&D Technologies, Inc. and Wade H. Roberts, Jr. 10.4 Indemnification Agreement dated as of November 19, 2002 by and between C&D Technologies, Inc. and Peter R. Dachowski. 10.5 Indemnification Agreement dated as of November 19, 2002 by and between C&D Technologies, Inc. and Kevin P. Dowd. 10.6 Indemnification Agreement dated as of November 19, 2002 by and between C&D Technologies, Inc. and Robert I. Harries. 10.7 Indemnification Agreement dated as of November 19, 2002 by and between C&D Technologies, Inc. and Pamela S. Lewis. 10.8 Indemnification Agreement dated as of November 19, 2002 by and between C&D Technologies, Inc. and George MacKenzie. 10.9 Indemnification Agreement dated as of November 19, 2002 by and between C&D Technologies, Inc. and John A.H. Shober. 10.10 First Amendment dated June 12, 2002 to the C&D Technologies Savings Plan, as restated and amended. 10.11 Second Amendment dated November 20, 2002 to the C&D Technologies Savings Plan, as restated and amended. 15. Letter from PricewaterhouseCoopers LLP, independent accountants for C&D, regarding unaudited interim financial information. 99.1 Certification of the President and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 99.2 Certification of the Vice President, Finance pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 28 EX-3 3 exb3-1.txt Exhibit 3.1 AMENDED AND RESTATED BY-LAWS OF C&D TECHNOLOGIES, INC. (a Delaware corporation, the "Corporation") -------------------------- ARTICLE I OFFICES Section 1. OFFICES. The Corporation shall maintain its registered office in the State of Delaware, which may but need not be the same as its place of business. The Corporation may also have offices in such other places in the United States or elsewhere as the Board of Directors may, from time to time, appoint or as the business of the Corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS Section 1. ANNUAL MEETINGS. Annual meetings of stockholders for the election of directors and for such other business as properly may be conducted at such meeting shall be held at such place, either within or without the State of Delaware, and at such time and date as may be designated by the Board of Directors and set forth in the notice of the meeting or in a duly executed waiver thereof. Section 2. SPECIAL MEETINGS. Special meetings of the stockholders for any purpose may be called by the Board of Directors, the Chairman of the Board or the President of the Corporation and shall be called by the President upon written request of the holders of at least 40% of all of the issued and outstanding stock of the Corporation entitled to vote. Notice of each special meeting shall be given according to Section 3 of this Article II. Section 3. NOTICE OF MEETINGS. Written notice of each meeting of the stockholders of the Corporation, in which the place, date and time of the meeting and, in the event of a special meeting, the purpose or purposes for which it is called are set forth, shall be mailed to or delivered to each stockholder of record entitled to vote thereat. Such notice shall be given not less than ten days nor more than 60 days before the date of any such meeting. Such notice shall state the purpose or purposes of the proposed meeting. Business transacted at all special meetings shall be confined to the objects stated in the notice thereof. Section 4. QUORUM. At any meeting of the stockholders, the holders of a majority of all of the issued and outstanding shares of stock of the Corporation entitled to vote at the meeting, present in person or by proxy, shall constitute a quorum for all purposes, except to the extent that the presence of a larger number of stockholders may be required by law, by the Certificate of Incorporation of the Corporation or by these By-laws. Section 5. VOTING. Except as may be otherwise provided by law or by the Certificate of Incorporation, at every meeting of the stockholders, every stockholder entitled to vote thereat shall have the right to one vote for every share having voting power standing in his name on the stock transfer books of the Corporation on the record date fixed for the meeting. Upon the demand of any stockholder entitled to vote at any meeting, the vote upon any question before such meeting shall be by written ballot. All elections of directors shall be decided by plurality vote. When a quorum exists at any meeting, the vote of the holders of a majority of the shares having voting power present in person or by proxy shall decide any matter brought before such meeting, unless a different vote is otherwise required by these By-laws, the Corporation's Certificate of Incorporation or law. Section 6. VOTING LISTS. A complete list of the stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order, with the address of each, and the number of shares held by each, shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 7. INSPECTORS. In advance of any meeting of the stockholders, the Corporation shall appoint inspectors of election, who need not be stockholders, to act at such meeting or any adjournment, postponement or continuation thereof. If no inspector of election is able to act at a meeting of stockholders, the chairman of any such meeting shall make such appointment at the meeting. The number of inspectors of election shall be one or three. No person who is a candidate for office shall act as an inspector of election. If there are three inspectors of election, the decision, act or certificate of a majority shall be the decision, act or certificate of all. Section 8. CHAIRMAN OF MEETINGS. The Chairman of the Board of Directors of the Corporation shall preside at all meetings of stockholders and of the Board of Directors, at which he is present. In the event of his absence or disability, the Vice Chairman, if any be elected, or, in the event of the absence or disability of the Vice Chairman, the President of the Corporation shall preside at any such meetings. Section 9. ACTION WITHOUT A MEETING. Subject to the provisions of Section 11 of this Article II, unless otherwise provided by the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting, may be taken without a meeting, without prior notice, and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote were present and voted. Prompt notice of corporate action taken without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Section 10. ADJOURNMENT. At any meeting of stockholders of the Corporation, if less than a quorum shall be present, a majority of the stockholders entitled to vote at the meeting, 2 present in person or by proxy, shall have the power to adjourn the meeting to another time, place and date without notice other than by announcement at the meeting so adjourned. Any business may be transacted at any adjourned meeting that could have been transacted at the meeting originally noticed, but only those stockholders entitled to vote at the meeting originally noticed shall be entitled to vote at any adjourned meeting. If the adjournment is for more than 30 days from the date of the meeting originally noticed, or if after the adjournment a new record date, as provided for in Section 5 of Article V of these By-laws is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the adjourned meeting. Section 11. STOCKHOLDER PROPOSALS. (a) Stockholder Proposals Relating to Nominations for and Election of Directors. (i) Nominations by a stockholder of candidates for election to the Board of Directors by stockholders at a meeting of stockholders or upon written consent without a meeting may be made only if the stockholder complies with the procedures set forth in this Section 11(a), and any candidate proposed by a stockholder not nominated in accordance with such provisions shall not be considered or acted upon for execution at such meeting of stockholders. (ii) A proposal by a stockholder for the nomination of a candidate for election by stockholders as a director at any meeting of stockholders at which directors are to be elected or upon written consent without a meeting may be made only by notice in writing, delivered in person or by first class United States mail postage prepaid or by reputable overnight delivery service, to the Board of Directors of the Corporation to the attention of the Secretary of the Corporation at the principal office of the Corporation, within the time limits specified herein. (iii) In the case of an annual meeting of stockholders, any such written proposal of nomination must be received by the Board of Directors not less than 90 calendar days nor more than 120 calendar days before the first anniversary of the date on which the Corporation first mailed its proxy statement to stockholders for the annual meeting of stockholders in the immediately preceding year; provided, however, that in the case of an annual meeting of stockholders that is called for a date that is not within 30 calendar days before or after the first anniversary date of the annual meeting of stockholders in the immediately preceding year, any such written proposal of nomination must be received by the Board of Directors not less than five business days after the date the Corporation shall have mailed notice to its stockholders that an annual meeting of stockholders will be held or shall have issued a press release, filed a periodic report with the Securities and Exchange Commission or otherwise publicly disseminated notice that an annual meeting of stockholders will be held. (iv) In the case of a special meeting of stockholders, any such written proposal of nomination must be received by the Board of Directors not less than five business days after the earlier of the date that the Corporation shall have mailed notice to its stockholders that a special meeting of stockholders will be held or shall have issued a press release, filed a periodic report with the Securities and Exchange Commission or otherwise publicly disseminated notice that a special meeting of stockholders will be held. 3 (v) In the case of stockholder action by written consent with respect to the election by stockholders of a candidate as director, the stockholder seeking to have the stockholders elect such candidate by written consent shall, by written notice to the Board of Directors, set forth the information prescribed in clause (vi) of this Section 11(a) and request the Board of Directors to fix a record date for determining stockholders entitled to consent to corporate action in writing without a meeting. The Board of Directors shall promptly, but in no event later than the tenth day after the date on which such notice is received, adopt a resolution fixing such record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date is fixed by the Board of Directors within such time period, such record date shall be determined in accordance with the provisions of Section 213(b) of the Delaware General Corporation Law, or any successor provision. (vi) Such written proposal of nomination shall set forth: (A) the name and address of the stockholder who intends to make the nomination (the "Nominating Stockholder"), (B) the name, age, business address and, if known, residence address of each person so proposed, (C) the principal occupation or employment of each person so proposed for the past five years, (D) the number of shares of capital stock of the Corporation beneficially owned within the meaning of Securities and Exchange Commission Rule 13d-1 by each person so proposed and the earliest date of acquisition of any such capital stock, (E) a description of any arrangement or understanding between each person so proposed and the stockholder(s) making such nomination with respect to such person's proposal for nomination and election as a director and actions to be proposed or taken by such person if elected a director, (F) the written consent of each person so proposed to serve as a director if nominated and elected as a director and (G) such other information regarding each such person as would be required under the proxy solicitation rules of the Securities and Exchange Commission if proxies were to be solicited for the election as a director of each person so proposed. (vii) If a written proposal of nomination submitted to the Board of Directors fails, in the reasonable judgment of the Board of Directors or a nominating committee established by it, to contain the information specified in clause (vi) of this Section 11(a) or is otherwise deficient, the Board of Directors shall, as promptly as is practicable under the circumstances, provide written notice to the stockholder(s) making such nomination of such failure or deficiency in the written proposal of nomination and such nominating stockholder shall have five business days from receipt of such notice to submit a revised written proposal of nomination that corrects such failure or deficiency in all material respects. (b) Stockholder Proposals Relating to Matters Other Than Nominations for and Elections of Directors. (i) A stockholder of the Corporation may bring a matter (other than a nomination of a candidate for election as a director, which is covered by Section 11(a)) (a "Stockholder Matter") before a meeting of stockholders or for action by written consent without a meeting only if such Stockholder Matter is a proper matter for stockholder action and such stockholder shall have provided notice in writing, delivered in person or by first class United States mail postage prepaid or by reputable overnight delivery service, to the Board of Directors 4 of the Corporation to the attention of the Secretary of the Corporation at the principal office of the Corporation, within the time limits specified in this Section 11(b); provided, however, that a proposal submitted by a stockholder for inclusion in the Corporation's proxy statement for an annual meeting that is appropriate for inclusion therein and otherwise complies with the provisions of Rule 14a-8 under the Securities Exchange Act of 1934 (including timeliness) shall be deemed to have also been submitted on a timely basis pursuant to this Section 11(b). (ii) In the case of an annual meeting of stockholders, any such written notice of a proposal of a Stockholder Matter must be received by the Board of Directors not less than 90 calendar days nor more than 120 calendar days before the first anniversary of the date on which the Corporation first mailed its proxy statement to stockholders for the annual meeting of stockholders in the immediately preceding year; provided, however, that in the case of an annual meeting of stockholders that is called for a date which is not within 30 calendar days before or after the first anniversary date of the annual meeting of stockholders in the immediately preceding year, any such written notice of a proposal of a Stockholder Matter must be received by the Board of Directors not less than five business days after the date the Corporation shall have mailed notice to its stockholders that an annual meeting of stockholders will be held, issued a press release, filed a periodic report with the Securities and Exchange Commission or otherwise publicly disseminated notice that an annual meeting of stockholders will be held. (iii) In the case of a special meeting of stockholders, any such written notice of a proposal of a Stockholder Matter must be received by the Board of Directors not less than five business days after the earlier of the date the Corporation shall have mailed notice to its stockholders that a special meeting of stockholders will be held, issued a press release, filed a periodic report with the Securities and Exchange Commission or otherwise publicly disseminated notice that a special meeting of stockholders will be held. (iv) In the case of stockholder action by written consent, the stockholder seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Board of Directors, set forth the written proposal and request the Board of Directors to fix a record date for determining stockholders entitled to consent to corporate action in writing without a meeting. The Board of Directors shall promptly, but in no event later than the tenth day after the date on which such notice is received, adopt a resolution fixing such record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date is fixed by the Board of Directors within such time period, such record date shall be determined in accordance with the provisions of Section 213(b) of the Delaware General Corporation Law, or any successor provision. (v) Such written notice of a proposal of a Stockholder Matter shall set forth information regarding such Stockholder Matter equivalent to the information regarding such Stockholder Matter that would be required under the proxy solicitation rules of the Securities and Exchange Commission if proxies were solicited for stockholder consideration of such Stockholder Matter at a meeting of stockholders. 5 (vi) If a written notice of a proposal of a Stockholder Matter submitted to the Board of Directors fails, in the reasonable judgment of the Board of Directors, to contain the information specified in clause (v) hereof or is otherwise deficient, the Board of Directors shall, as promptly as is practicable under the circumstances, provide written notice to the stockholder who submitted the written notice of presentation of a Stockholder Matter of such failure or deficiency in the written notice of presentation of a Stockholder Matter and such stockholder shall have five business days from receipt of such notice to submit a revised written notice of presentation of a matter that corrects such failure or deficiency in all material respects. (vii) Only Stockholder Matters submitted in accordance with the foregoing provisions of this Section 11(b) shall be eligible for presentation at such meeting of stockholders or for action by written consent without a meeting, and any Stockholder Matter not submitted to the Board of Directors in accordance with such provisions shall not be considered or acted upon at such meeting of stockholders or by written consent without a meeting. ARTICLE III BOARD OF DIRECTORS Section 1. POWERS. The property, business and affairs of the Corporation shall be managed and controlled by its Board of Directors. The Board shall exercise all of the powers of the Corporation except as are by law, the Corporation's Certificate of Incorporation or these By-laws conferred upon or reserved to the stockholders. Section 2. NUMBER AND TERM. The number of directors shall be at least three. Within the limits specified above, the number of directors shall be designated from time to time by the Board. The Board of Directors shall be elected by the stockholders at the annual meeting of stockholders, and each director shall be elected to serve for the term of one year and until his successor shall be elected and qualified or until his earlier death, resignation or removal. Section 3. RESIGNATIONS. Any director or member of a committee of the Board may resign at any time. Such resignation shall be made in writing, and shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the President or Secretary. The acceptance of a resignation shall not be necessary to make it effective. Section 4. REMOVAL. Any director or the entire Board of Directors may be removed either for or without cause at any time by the affirmative vote of the holders of a majority of all the shares of stock outstanding and entitled to vote for the election of directors at any annual or special meeting of the stockholders called for that purpose. Vacancies thus created may be filled by a majority vote of the directors then in office, although less than a quorum, or by a sole remaining director. Section 5. VACANCIES AND NEWLY CREATED DIRECTORSHIPS. Vacancies in the office of any director or member of a committee of the Board of Directors and newly created directorships may be filled by a majority vote of the remaining directors in office, although less than a quorum or by a remaining sole director. Any director so chosen shall hold office for the unexpired term of his predecessor and until his successor shall be elected and qualified or until 6 his earlier death, resignation or removal. However, the directors may not fill the vacancy created by removal of a director by electing the director so removed. Section 6. MEETINGS. Regular meetings of the directors may be held without notice at such places and times as shall be determined from time to time by resolution of the directors. Special meetings of the board may be called by Chairman of the Board, the President and shall be called by the Secretary on the written request of any two directors with at least one day's notice to each director. A special meeting shall be held at such place or places as may be determined by the directors or as shall be stated in the notice of the meeting. Section 7. QUORUM, VOTING AND ADJOURNMENT. The presence of at least a majority of the total number of directors or of any committee of the Board shall constitute a quorum for the transaction of business at any meeting of the Board of Directors or committee of the Board, as the case may be. At any meeting of the Board or any committee of the Board, if less than a quorum be present, a majority of the directors or committee members present may adjourn the meeting from time to time until a quorum is present. No notice of such adjourned meeting need be given other than the announcement at the meeting so adjourned. The vote of a majority of the directors or committee members present at the meeting at which a quorum is present shall be the act of the Board or any committee of the Board as the case may be. Section 8. COMMITTEES. The Board of Directors may, by resolution or resolutions passed by a majority of the entire Board, designate one or more committees, including but not limited to an Audit Committee, a Compensation Committee and a Corporate Governance/Nominating Committee, each such committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, to replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent specified by the resolution of the Board, may have and exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation of the Corporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending these By-laws; and, unless the enabling resolution of the Board expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock of the Corporation. All committees of the Board shall report their proceedings to the Board when required. Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee of the Board may be taken without notice and without a meeting if all members of the Board or committee, as the case may be, consent to the action in writing. Members of the Board of Directors or of any committee of the Board, may participate in a meeting of the Board or committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in a meeting pursuant to this section shall constitute presence in person at such meeting. 7 Section 10. COMPENSATION. The Board of Directors may from time to time, in its discretion, fix the amounts which shall be payable to directors and to members of any committee of the Board for attendance at the meetings of the Board of Directors or of such committee and for services rendered to the Corporation. Any director may serve the Corporation in any other capacity as an officer, agent or otherwise, and receive compensation therefor. Section 11. CORPORATE BOOKS. The books of the Corporation, except such as are required by law to be kept within the state, may be maintained outside the State of Delaware, at such places as the Board of Directors may from time to time determine. ARTICLE IV OFFICERS Section 1. OFFICERS. The officers of the Corporation shall be a Chairman of the Board, a President, one or more Vice Presidents, a Treasurer and a Secretary. In addition, the Board of Directors may elect a Vice Chairman of the Board and additional Vice Presidents, including an Executive Vice President, one or more Assistant Treasurers and one or more Assistant Secretaries. Each officer of the Corporation shall hold office for such term, have such authority and perform such duties as set forth in these By-Laws or as may be prescribed from time to time by the Board of Directors. Any number of offices may be held by the same person. Section 2. OTHER OFFICERS AND AGENTS. The Board of Directors may appoint such other officers and agents as it deems advisable, who shall hold their office for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. Section 3. CHAIRMAN. The Chairman of the Board of Directors must be a director of the Corporation. The Chairman shall preside at all meetings of the Board of Directors and of the stockholders and shall have such powers and perform such other duties as from time to time may be assigned to him by the Board of Directors. Section 4. VICE CHAIRMAN. The Vice Chairman of the Board of Directors, if any be elected, shall generally aid and assist the Chairman of the Board and shall have such powers and shall perform such duties of the Chairman of the Board, in the absence or disability of such officer. In addition, the Vice Chairman of the Board shall have such powers and perform such other duties as from time to time may be assigned to him by the Board of Directors. Section 5. PRESIDENT. The President shall be the Chief Executive Officer of the Corporation and shall, in connection with the performance of his duties, report directly to the Board of Directors. He shall perform such other duties as may be prescribed from time to time by the Board or these By-laws. In the absence, disability or failure of the Chairman of the Board or Vice Chairman of the Board, if any shall be elected, to act, or a vacancy in such offices, the President shall preside at all meetings of the stockholders and of the Board of Directors. Section 6. VICE PRESIDENTS. Each Vice President (of whom one or more may be designated an Executive Vice President) shall generally aid and assist the President in such 8 manner as the President shall direct. Each Vice President shall have such powers and shall perform such duties as shall be assigned to him by the President or the Board of Directors. Section 7. TREASURER. The Treasurer shall have the custody of the corporate funds, securities, evidences of indebtedness and other valuables of the Corporation and shall keep full and accurate account of receipts and disbursements in books belonging to the Corporation. He shall deposit all moneys and other valuables in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors or the President. He shall render to the President and Board of Directors, upon their request, a report of the financial condition of the Corporation. If required by the Board of Directors, he shall give the Corporation a bond for the faithful discharge of his duties in such amount and with such surety as the board shall prescribe. Section 8. SECRETARY. The Secretary will cause minutes of all meetings of the stockholders and directors to be recorded and kept; cause all notices required by these By-Laws or otherwise to be given properly and see that the minute books, stock books, and other non-financial books of the Corporation are kept properly. In addition, the Secretary shall have such powers and shall perform such duties as shall be assigned to him by the Board of Directors. Section 9. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. Each Assistant Treasurer and each Assistant Secretary, if any shall be elected, shall be vested with all the powers and shall perform all the duties of the Treasurer and Secretary, respectively, in the absence or disability of such officer, unless or until the Board of Directors shall otherwise determine. In addition, Assistant Treasurers and Assistant Secretaries shall have such powers and shall perform such duties as shall be assigned to them by the Board of Directors. Section 10. CORPORATE FUNDS AND CHECKS. The funds of the Corporation shall be kept in such depositories as shall from time to time be prescribed by the Board of Directors. All checks or other orders for the payment of money shall be signed by such officers, employees or agents as may from time to time be authorized by the Board of Directors, with such countersignature, if any, as may be required by the Board of Directors. Section 11. CONTRACTS AND OTHER DOCUMENTS. The Chairman of the Board, the President, any Vice President or the Treasurer, or such other officer or officers as may from time to time be authorized by the Board of Directors, shall have the power to sign and execute on behalf of the Corporation deeds, bonds, mortgages/ conveyances and contracts, and any and all other documents requiring execution by the Corporation and shall cause the seal to be affixed to any instrument requiring it and, when so affixed, the seal shall be attested by the signature of the Secretary or the Treasurer or an Assistant Secretary or an Assistant Treasurer. Section 12. OWNERSHIP OF STOCK OF ANOTHER CORPORATION. The Chairman of the Board, the President, any Vice President, the Treasurer, the Secretary, or such other officer or person as shall be authorized by the Board of Directors, shall have power and authority on behalf of the Corporation to attend and to vote at any meeting of the stockholders of any corporation in which this Corporation may hold stock; may exercise on behalf of this Corporation any and all of the rights and powers incident to the ownership of such stock at any 9 such meeting; and shall have power and authority to execute and deliver proxies and consents on behalf of this Corporation in connection with the exercise by this Corporation of the rights and powers incident to the ownership of such stock. Section 13. DELEGATION OF DUTIES. The Board of Directors may delegate to another officer or director, the powers or duties of any officer, in case of such officer's absence, disability or refusal to exercise such powers or perform such duties. Section 14. RESIGNATION AND REMOVAL. Any officer of the Corporation may be removed from office for or without cause at any time by the Board of Directors. Any officer may resign at any time in the same manner prescribed for the resignation of directors of the Corporation and as set forth in Section 3 of Article III of these By-laws. Section 15. VACANCIES. In case any office shall become vacant, the Board of Directors shall have power to fill such vacancy. ARTICLE V STOCK Section 1. CERTIFICATES OF STOCK. Certificates for stock of the Corporation shall be numbered and shall be in such form as the Board of Directors may, from time to time, prescribe; shall be signed by the Chairman of the Board, the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary (or shall bear the facsimile signatures of such officers); and shall be issued to each stockholder to evidence the number and class of shares of stock in the Corporation owned by him. The Board of Directors shall have power to appoint one or more transfer agents and/or registrars for the transfer and/or registration of certificates of stock of any class, and may require that stock certificates shall be countersigned and/or registered by one or more of such transfer agents and/or registrars. Section 2. TRANSFER OF SHARES. The shares of stock of the Corporation shall be transferable only upon its books by the holders thereof in person or by their duly authorized attorneys or legal representatives, and upon such transfer the old certificates shall be surrendered to the Corporation by the delivery thereof to the person in charge of the stock and transfer books and ledgers, or to such person as the Board of Directors may designate, by whom they shall be canceled, and new certificates shall thereupon be issued. A record shall be made of each transfer and whenever a transfer shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer. The Board of Directors shall have power and authority to make all such rules and regulations as it may deem necessary or proper concerning the issue, transfer and registration of all or any certificates for shares of stock of the Corporation. Section 3. LOST CERTIFICATES. A new certificate of stock may be issued in the place of any certificate previously issued by the Corporation, alleged to have been lost, stolen, destroyed or mutilated, and the Board of Directors may, in its discretion, require the owner of the lost, stolen, destroyed or mutilated certificate, or his legal representatives, to give the Corporation a bond, in such sum as it may direct, not exceeding double the value of the stock, to indemnify the Corporation against any claim that may be made against it on account of the alleged loss or mutilation of any such certificate, or the issuance of any such new certificate. 10 Section 4. STOCKHOLDERS OF RECORD. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder thereof, in fact, and shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by law. Section 5. STOCKHOLDERS RECORD DATE. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or, subject to the relevant provisions of Section 11 of Article II, to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which shall not be more than 60 nor less than ten days before the date of the holding of such meeting or the date of the taking of any of the aforementioned actions, nor more than 60 days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. Section 6. DIVIDENDS. Subject to the provisions of the Certificate of Incorporation, the Board of Directors may at any regular or special meeting, out of funds legally available therefor, declare dividends upon the stock of the Corporation as and when it deems appropriate. Before declaring any dividend there may be set apart, out of any funds of the Corporation available for dividends, such sum or sums as the Board of Directors from time to time in its discretion deems proper for working capital or as a reserve fund to meet contingencies or for equalizing dividends or for such other purposes as the Board shall deem conducive to the interests of the Corporation. ARTICLE VI NOTICE AND WAIVER OF NOTICE Section 1. NOTICE. Whenever notice is required to be given to any director, committee member, officer, stockholder, employee or agent, whether pursuant to law, the Certificate of Incorporation of the Corporation or these By-laws, it shall not be construed to mean personal notice, but such notice may be given, in the case of stockholders, in writing, by depositing the same in the mail, postage prepaid, or by overnight carrier addressed to such stockholders at his last known address as the same appears on the books of the Corporation, and, in the case of directors, committee members, officers, employees and agents, by telephone, or by mail, postage prepaid, or by prepaid telegram at his last known address as the same appears on the books of the Corporation. All notices shall be deemed to be given when mailed, telegraphed or telephoned. Section 2. WAIVER OF NOTICE. Whenever any notice is required to be given by law, the Certificate of Incorporation of the Corporation or these By-laws, a written waiver of notice signed by the person entitled to notice, whether before or after the time stated in the notice, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, unless prior to the end of the meeting the person objects to the transaction of any business because the meeting is not lawfully noticed or convened. Neither the 11 business to be transacted at, nor the purpose of, any meeting of the stockholders, directors, or members of a committee of the Board need be specified in any written waiver of notice. ARTICLE VII AMENDMENT OF BY-LAWS Section 1. AMENDMENTS. These By-laws may be altered, amended or repealed (i) by the affirmative vote of the holders of a majority of all of the issued and outstanding shares of stock of the Corporation entitled to vote thereon at any annual or special meeting duly convened after notice to the stockholders of that purpose or (ii) by a majority vote of the members of the Board of Directors at any regular or special meeting of the Board of Directors duly convened after notice to the Board of Directors of that purpose, subject always to the power of the stockholders to change such action of the Board of Directors by the vote of the stockholders required in clause (i) of this Article VII. ARTICLE VIII INDEMNIFICATION Section 1. INDEMNIFICATION GENERALLY. The Corporation shall indemnify each person who was or is made a party to or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, (hereinafter a "Proceeding"), by reason of the fact that such person is or was a director or officer, or had agreed to serve as a director or officer, of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, or by reason of any act alleged to have been taken or omitted in such capacity, to the maximum extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all costs, expenses, liabilities, and losses (including attorneys' fees, judgments, fines, excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred by such person or on such person's behalf in connection with such Proceeding. The termination of any Proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendre or its equivalent, shall not, of itself, create a presumption that the person did not meet any standard of conduct for indemnification imposed by the Delaware General Corporation Law. Notwithstanding the foregoing: (a) except with respect to a Proceeding to enforce a right to indemnification under this Article VIII, the Corporation shall not be required by this Article VIII to indemnify any person with respect to, or to advance expenses (including attorneys' fees) incurred by such person in connection with, any Proceeding initiated by such person against the Corporation, or any counterclaim, cross-claim, affirmative defense or similar claim of the Corporation in connection with such Proceeding, unless the Proceeding initiated by the person seeking indemnification was authorized by the Board of Directors by a majority vote of the directors having no interest in such Proceeding; and (b) in the event any 12 insurance policy obtained by the Corporation would provide coverage for any liability, cost or expense for which indemnification or advancement of expenses is sought under this Article VIII, the provisions of this Article VIII shall be modified to the extent necessary to conform this Article VIII to the requirements of such insurance policy so as to provide coverage to the fullest extent possible, including but not limited to any requirements relating to incurring defense costs and retaining legal counsel. Section 2. INDEMNIFICATION FOR COSTS, CHARGES, AND EXPENSES FOR SUCCESSFUL PARTY. Notwithstanding the other provisions of this Article VIII, to the extent that a director or officer of the Corporation has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any Proceeding referred to in Section 1, or in the defense of any claim, issue or matter therein, such person shall be indemnified against all costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by such person or on such person's behalf in connection therewith. Section 3. DETERMINATION OF RIGHT TO INDEMNIFICATION. Any indemnification authorized under or in accordance with Section 1 or 2 of this Article VIII (unless ordered by a court) shall be paid by the Corporation unless a determination is made (a) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to the Proceeding, or (b) if such a quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (c) by the stockholders, that indemnification of the director or officer is not proper in the circumstances because such person has not met the applicable standards of conduct set forth in the Delaware General Corporation Law. Section 4. ADVANCE OF COSTS, CHARGES AND EXPENSES. Costs, charges, and expenses (including attorneys' fees) incurred by a person referred to in Section 1 of this Article VIII in defending a civil or criminal Proceeding (including investigations by any government agency and all costs, charges and expenses incurred in preparing for any threatened Proceeding) shall be paid by the Corporation in advance of the final disposition of such Proceeding; provided, however, that the payment of such costs, charges and expenses incurred by any such person in advance of the final disposition of such Proceeding shall be made only upon receipt of an undertaking by or on behalf of such person to repay all amounts so advanced if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article VIII. Notwithstanding the foregoing: (a) the Corporation shall not be required to advance expenses (including attorneys' fees) to any person with respect to any Proceeding brought by the Corporation against such person; (b) except with respect to a Proceeding to enforce a right of indemnification under this Article VIII, the Corporation shall not be required to advance expenses (including attorneys' fees) to any person in connection with any Proceeding initiated by such person against the Corporation or any counterclaim, cross-claim, affirmative defense or similar claim of the Corporation in connection with such Proceeding, unless the Proceeding initiated by the person seeking indemnification was authorized by the Board of Directors by a majority vote of the directors having no interest in such Proceeding; and (c) in the event any insurance policy obtained by the Corporation would provide coverage for any liability, cost or expense for which indemnification is sought, the provisions of this Article VIII shall be modified to the extent necessary to conform this Article VIII to the requirements of such 13 insurance policy so as to provide coverage to the fullest extent possible, including but not limited to any requirements relating to incurring defense costs and retaining legal counsel. No security shall be required for such undertaking and such undertaking shall be accepted without reference to the recipient's financial ability to make repayment. The Board of Directors may, in the manner set forth above, and subject to the approval of such person, authorize counsel selected by the Corporation to represent such person in any Proceeding, whether or not the Corporation is a party to such Proceeding. Section 5. PROCEDURE FOR INDEMNIFICATION. Any indemnification authorized under Section 1 of this Article VIII or advance of costs, charges and expenses authorized under Section 4 of this Article VIII shall be made promptly, and in any event within 60 days, upon the written request of the director or officer directed to the Secretary of the Corporation. The right to indemnification or advances as granted by this Article VIII shall be enforceable by the director or officer in any court of competent jurisdiction if the Corporation denies such request, in whole or in part, or if no disposition thereof is made within 60 days. Such person's costs and expenses incurred in connection with successfully establishing such person's right to indemnification or advances, in whole or in part, in any such action shall also be indemnified by the Corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses under Section 4 where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the standard of conduct, if any, set forth in the Delaware General Corporation Law, but, to the extent permitted by applicable law, the burden of proving that such standard of conduct has not been met shall be on the Corporation. Section 6. CONTINUATION OF RIGHT OF INDEMNIFICATION. The indemnification provided by this Article VIII shall not be deemed exclusive of any other rights to which a person seeking indemnification may be entitled under any law (common or statutory), agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding office, and shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the estate, heirs, executors and administrators of such person. All rights to indemnification under this Article VIII shall be deemed to be a contract between the Corporation and each director and officer of the Corporation who serves or served in such capacity at any time while this Article VIII is in effect. No amendment or repeal of this Article VIII or of any relevant provisions of the Delaware General Corporation Law or any other applicable laws shall adversely affect or deny to any director or officer any rights to indemnification that such person may have, or change or release any obligations of the Corporation under this Article VIII with respect to any costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement that arise out of a Proceeding based in whole or substantial part on any act, actual or alleged, that takes place before or while this Article VIII is in effect. The provisions of this Section 6 shall apply to any such Proceeding whenever commenced, including any such Proceeding commenced after any amendment or repeal of this Article VIII. Section 7. DEFINITIONS. For purposes of this Article VIII: "the Corporation" includes any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger that, if its separate existence continued, would 14 have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VIII with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued; "other enterprise" includes employee benefit plans, including but not limited to any employee benefit plans of the Corporation; service by a director or officer "at the request of the Corporation" includes, but is not limited to, any service that imposes duties on, or involves services by, a director or officer of the Corporation with respect to an employee benefit plan, its participants or beneficiaries, including acting as a fiduciary thereof; "fines" shall include any penalties and any excise or similar taxes assessed on a person with respect to an employee benefit plan; a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in Section 1 of this Article VIII; and service by a director or officer as a partner, trustee, manager or member of management or similar committee of a partnership, joint venture, trust or limited liability company, or as a director, officer, manager, partner, trustee or manager of an entity that is a partner, trustee, member or joint venturer, shall be considered service as a director or officer of the partnership, joint venture, trust, limited liability company or other enterprise. Section 8. SAVING CLAUSE. If this Article VIII or any portion hereof shall be invalidated on any ground by a court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and officer of the Corporation as to costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the full extent permitted by any applicable portion of this Article VIII that shall not have been invalidated. Section 9. OTHER INDEMNIFICATION. The right to indemnification and advancement of expenses conferred on any person by this Article VIII shall not limit the Corporation from providing any other indemnification permitted by law. If authorized by the Board of Directors, the Corporation may indemnify and advance expenses to any other person whom the Corporation has the power to indemnify under the Delaware General Corporation Law to the fullest extent permitted by such statute. Section 10. INSURANCE. The Corporation may purchase and maintain insurance, at its expense, to protect itself and any director, officer, employee, or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, 15 liability or claim, whether or not the Corporation would have the power to indemnify such person under the Delaware General Corporation Law. ARTICLE IX MISCELLANEOUS Section 1. SEAL. The seal of the Corporation shall be circular in form and shall have the name of the Corporation "C&D Technologies, Inc." on the circumference and the words and numerals "Delaware 1985" in the center. Section 2. FISCAL YEAR. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors. As amended on November 19, 2002. 16 EX-10 4 exb10-1.txt Exhibit 10.1 RELEASE This Release is made this 24th day of September, 2002 by and between C&D Technologies, Inc. ("Employer") and Kathryn Bullock ("Employee"). RECITALS: WHEREAS, the parties are parties to an Employment Agreement (the "Employment Agreement") dated March 31, 2000, as amended April 6, 2000, pursuant to which Employee was employed by Employer; and WHEREAS, the Employment Agreement has not been renewed by Employer; and WHEREAS, Employee's execution and delivery of this Release is a condition to the Employer's obligations to pay certain compensation and benefits to Employee under the Employment Agreement; NOW THEREFORE, the parties hereto, intending to be legally bound, in consideration of the mutual promises and undertakings set forth herein, do hereby agree as follows: 1. As of October 4, 2002, Employee's employment with Employer shall terminate, and Employee shall have no further job responsibilities to perform for Employer; provided, however, that Employee shall cooperate with Employer in transitioning Employee's job responsibilities as Employer shall reasonably request, provided that Employee shall be entitled to receive reasonable compensation for any services rendered after such date and shall not be obligated to take any action that would interfere with any subsequent employment of Employee or otherwise result in economic hardship to Employee. 2. Employer shall pay to the Employee the amounts contemplated pursuant to Section 2(b) of the Employment Agreement, less applicable deductions; provided however, the first payment shall not be due and payable until ten days after the execution by Employee and delivery to Employer of this Release. 3. For and in consideration of the monies and benefits paid to Employee by Employer, as more fully described in Section 2 above, and for other good and valuable consideration, Employee hereby waives, releases and forever discharges Employer, its assigns, predecessors, successors, and affiliated entities, and its current or former stockholders, officers, directors, administrators, agents, servants and employees, individually and as representatives of the corporate entity (hereinafter collectively referred to as "Releasees"), from any and all claims, suits, debts, dues, accounts, reckonings, bonds, bills, specialties, covenants, contracts, bonuses, controversies, agreements, promises, charges, complaints, damages, sums of money, interest, attorney's fees and costs, or causes of action of any kind or nature whatsoever whether in law or equity, including, but not limited to, all claims arising out of his/her employment or termination of employment with Employer, such as all claims for wrongful discharge, breach of contract, either express or implied, interference with 1 contract, emotional distress, fraud, misrepresentation, defamation, claims arising under the Civil Rights Acts of 1964 and 1991 as amended, the Americans With Disabilities Act, the Age Discrimination in Employment Act (ADEA), the National Labor Relations Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974 (ERISA), the Family and Medical Leave Act, the Pennsylvania Human Relations Act, the Pennsylvania Wage Payment & Collection Law, the Pennsylvania Minimum Wage Act of 1968, the Pennsylvania Equal Pay Law, and any and all other claims arising under federal, state or local law, rule, regulation, constitution, ordinance or public policy whether known or unknown, arising up to and including the date of execution of this Release; provided, however that the parties do not release each other from any claim of breach of the terms of this Release. This release of rights does not extend to claims that may arise after the date of this Release. Employee agrees that Employee will not initiate any charge or complaint or institute any claim or lawsuit against Releasees or any of them based on any fact or circumstance occurring up to and including the date of the execution by Employee of this Release. 4. Employee agrees that the payments made and other consideration received pursuant to this Release are not to be construed as an admission of legal liability by Releasees or any of them and that no person or entity shall utilize this Release or the consideration received pursuant to this Release as evidence of any admission of liability since Releasees expressly deny liability. 5. Employee affirms that the only consideration for the signing of this Release are the terms stated herein and in the Employment Agreement and that no other promise or agreement of any kind has been made to Employee by any person or entity whatsoever to cause Employee to sign this Release. 6. Employee and Employer affirm that Sections 6, 7 and 8 of the Employment Agreement shall survive and be enforceable in accordance with their terms and that they and this Release set forth the entire agreement between the parties with respect to the subject matter contained herein and supersede all prior or contemporaneous agreements or understandings between the parties with respect to the subject matter contained herein. Further, there are no representations, arrangements or understandings, either oral or written, between the parties, which are not fully expressed herein. Finally, no alteration or other modification of this Release shall be effective unless made in writing and signed by both parties. 7. Employee acknowledges that Employee has been given a period of at least 21 days within which to consider this Release. 8. Following the execution of this Release, the Employee has a period of 7 days from the date of execution to revoke this Release, and this Release shall not become effective or enforceable until the revocation period has expired. 9. Employee certifies that Employee has returned or will, prior to October 4, 2002, return to Employer all keys, identification cards, credit cards, computer and telephone equipment and other property or information of Employer in Employee's possession, custody, or control including, but not limited to, any information contained in any computer files maintained by Employee during Employee's employment with Employer. Employee certifies that Employee has not kept the originals 2 or copies of any documents, files, or other property of Employer which Employee obtained or received during Employee's employment with Employer. 10. Employee acknowledges that Employer advised Employee to consult with an attorney prior to executing this Release. 11. Employee affirms that Employee has carefully read this Release, that Employee fully understands the meaning and intent of this document, that Employee has signed this Release voluntarily and knowingly, and that Employee intends to be bound by the promises contained in this Release for the consideration described in Section 2 above. IN WITNESS WHEREOF, Employee and the authorized representative of Employer have executed this Release on the dates indicated below: C&D TECHNOLOGIES, INC. Dated: September 24, 2002 By: /s/ Linda R. Hansen _____________________ _________________________ Title: Vice President ______________________ Dated: September 24, 2002 /s/ Kathryn Bullock _____________________ ___________________________ Kathryn Bullock 3 EX-10 5 exb10-2.txt Exhibit 10.2 INDEMNIFICATION AGREEMENT INDEMNIFICATION AGREEMENT dated as of November 19, 2002 by and between C&D Technologies, Inc. (the "Corporation"), a Delaware corporation, and William Harral, III ("Indemnitee"): RECITALS: WHEREAS, highly competent persons are becoming more reluctant to serve publicly held corporations as directors unless they are provided with adequate protection through insurance and indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation; and WHEREAS, the current difficulties in the marketplace generally of obtaining adequate insurance and uncertainties relating to indemnification have increased the difficulty of attracting and retaining such persons; and WHEREAS, the Board of Directors has determined that the inability to attract and retain such persons would be detrimental to the best interests of the Corporation and its stockholders and that the Corporation should act to assure its directors that such protection will be available in the future; and WHEREAS, it is reasonable, prudent and necessary for the Corporation contractually to obligate itself to indemnify its directors to the fullest extent permitted by applicable law, subject only to the limited exceptions contained in this Agreement, so that they will serve or continue to serve the Corporation free from undue concern that they will not be so indemnified. NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Corporation and Indemnitee, intending to be legally bound, hereby covenant and agree as follows: SECTION 1. INDEMNIFICATION. In consideration of Indemnitee's continued service as a director of the Corporation, the Corporation shall indemnify Indemnitee to the fullest extent permitted by applicable law in effect on the date hereof or as such laws may from time to time be amended, subject only to the limited exceptions set forth in this Agreement. Without diminishing the scope of the indemnification provided by this Section 1, the rights of indemnification of Indemnitee provided hereunder shall include but shall not be limited to those rights specified in this Agreement, except to the extent expressly prohibited by applicable law. SECTION 2. PROCEEDINGS OTHER THAN AN ACTION BY OR IN THE RIGHT OF THE CORPORATION. Indemnitee shall be entitled to the indemnification rights provided in this Section 2 if Indemnitee is a party to or is threatened to be made a party to any Proceeding (as defined in Section 7), other than an action by or in the right of the Corporation, by reason of the fact that Indemnitee is or was a director, officer, employee, agent, or fiduciary of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, agent or fiduciary of any other corporation, partnership, limited liability company, joint venture, trust or other enterprise or entity or by reason of anything done or not done by Indemnitee in any such capacity. Pursuant to this Section 2, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with such Proceeding (including, but not limited to, the investigation, defense or appeal thereof), if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful. SECTION 3. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. Indemnitee shall be entitled to the indemnification rights provided in this Section 3 if Indemnitee is a person who was or is made a party or is threatened to be made a party to any Proceeding brought by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, agent, or fiduciary of any other corporation, partnership, limited liability company, joint venture, trust or other enterprise or entity by reason of anything done or not done by Indemnitee in any such capacity. Pursuant to this Section 3, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees) actually and reasonably incurred by Indemnitee in connection with such Proceeding (including, but not limited to, the investigation, defense, settlement or appeal thereof) if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation. SECTION 4. INDEMNIFICATION FOR COSTS AND EXPENSES OF SUCCESSFUL PARTY. Notwithstanding the other provisions of this Agreement, to the extent that Indemnitee has served as a witness on behalf of the Corporation or has been successful on the merits or otherwise, including, without limitation, the dismissal of a Proceeding without prejudice, in defense of any Proceeding referred to in Sections 2 and 3 hereof, or in defense of any claim, issue or matter therein, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees) actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection therewith. SECTION 5. PARTIAL INDEMNIFICATION. If Indemnitee is only partially successful in the defense, investigation, settlement or appeal of any Proceeding described in Section 2 or 3 hereof, and as a result is not entitled under Section 6 hereof to indemnification by the Corporation for the reasonable costs and expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee, the Corporation shall nevertheless indemnify Indemnitee pursuant to Section 6 hereof to the extent Indemnitee has been partially successful. SECTION 6. DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION. When seeking indemnification under Section 3 or 4 hereof, Indemnitee shall submit a written request for indemnification to the Corporation. Such request shall include documentation or information that is reasonably available to Indemnitee and reasonably necessary for the Corporation to make a determination of Indemnitee's entitlement to indemnification. Determination of Indemnitee's entitlement to indemnification pursuant to this Agreement shall be determined by the following person or persons, who shall be empowered to make such determination: (a) the Board of Directors of the Corporation by a majority vote of a quorum consisting of Disinterested Directors (as defined in Section 7); or (b) if such a quorum is not obtainable or, even if obtainable, if the Board of Directors by the majority vote of Disinterested Directors so directs, by Independent Counsel (as defined in Section 7) in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (c) by the stockholders. Such Independent Counsel shall be 2 selected by the Board of Directors and reasonably acceptable to Indemnitee. Upon failure of the Board to so select such Independent Counsel or upon failure of Indemnitee to so accept, such Independent Counsel shall be selected by the Chancellor of the State of Delaware or such other person as the Chancellor shall designate to make such selection. Such determination of entitlement to indemnification shall be made not later than 60 days after receipt by the Corporation of a written request for indemnification. Any reasonable costs or expenses (including attorneys' fees) incurred by Indemnitee in connection with a request for indemnification under this Agreement shall be borne by the Corporation provided that it is ultimately determined that the Indemnitee is entitled to indemnification. If the person making such determination shall determine that Indemnitee is entitled to indemnification as to part (but not all) of the application for indemnification, such person shall reasonably prorate such partial indemnification among such claims, issues or matters. SECTION 7. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS. The Secretary of the Corporation (or other officer designated by the Board of Directors) shall, promptly upon receipt of Indemnitee's request for indemnification, advise in writing the Board of Directors, or such other person or persons empowered to make the determination as provided in Section 6, that Indemnitee has made such request for indemnification. Upon making such request for indemnification, Indemnitee shall be presumed to be entitled to indemnification hereunder and the Corporation shall have the burden of proof in the making of any determination contrary to such presumption. If the person or persons so empowered to make such determination shall fail to make the requested indemnification within 60 days after receipt by the Corporation of such request, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be absolutely entitled to such indemnification, absent actual and material fraud in the request for indemnification. The termination of any Proceeding described in Sections 2 or 3 hereof by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself: (a) create a presumption that Indemnitee did not act in good faith and in a manner that Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful; or (b) otherwise adversely affect the rights of Indemnitee to indemnification except as may be provided herein. SECTION 8. ADVANCEMENT OF EXPENSES AND COSTS. Subject to the exceptions set forth in Section 10 hereof, all reasonable costs and expenses incurred by Indemnitee (including attorneys' fees, retainers and advances of disbursements required of Indemnitee) in defending a Proceeding shall be paid by the Corporation in advance of the final disposition of such Proceeding at the request of Indemnitee within 20 days after the receipt by the Corporation of a statement or statements from Indemnitee requesting such advance or advances from time to time. Indemnitee's entitlement to such costs and expenses shall include those incurred in connection with any proceeding by Indemnitee seeking an adjudication pursuant to this Agreement. Such statement or statements shall reasonably evidence the costs and expenses incurred by Indemnitee in connection therewith and shall include or be accompanied by a written undertaking by or on behalf of Indemnitee to repay such amount if it is ultimately determined that Indemnitee is not entitled to be indemnified against such costs and expenses by the Corporation as provided by this Agreement or otherwise. SECTION 9. REMEDIES OF INDEMNITEE IN CASES OF DETERMINATION NOT TO INDEMNIFY OR TO ADVANCE EXPENSES. In the event that a determination is made that Indemnitee is not entitled to indemnification hereunder or if payment has not been timely made following a determination of entitlement to indemnification pursuant to Sections 6 and 7, or if expenses are not advanced 3 pursuant to Section 8, Indemnitee shall be entitled to a final adjudication in an appropriate court of the State of Delaware or any other court of competent jurisdiction of Indemnitee's entitlement to such indemnification or advance. Such judicial proceeding shall be made de novo, and Indemnitee shall not be prejudiced in seeking further relief by reason of a determination (if so made) that Indemnitee is not entitled to indemnification. If a determination is made or deemed to have been made pursuant to the terms of Section 6 or Section 7 hereof that Indemnitee is entitled to indemnification, the Corporation shall be bound by such determination and is precluded from asserting that such determination has not been made or that the procedure by which such determination was made is not valid, binding and enforceable. The Corporation further agrees to stipulate in any such proceeding that the Corporation is bound by all the provisions of this Agreement and is precluded from making any assertion to the contrary. If the court shall determine that Indemnitee is entitled to any indemnification hereunder, the Corporation shall pay all reasonable costs and expenses (including attorneys' fees) actually incurred by Indemnitee in connection with such adjudication (including, but not limited to, any appellate proceedings). SECTION 10. EXCEPTIONS AND MODIFICATIONS TO INDEMNIFICATION. (a) Notwithstanding any other provision to the contrary set forth in this Agreement, unless otherwise determined by the Board of Directors by a majority vote of the Disinterested Directors, Indemnitee shall not be entitled to indemnification or advancement of expenses from the Corporation under this Agreement in any of the following circumstances: (i) any Proceeding initiated by or on behalf of Indemnitee against the Corporation (other than a Proceeding brought solely to seek the remedies set forth in Section 9 of this Agreement for a Proceeding not initiated by Indemnitee), or any counterclaim, cross-claim, affirmative defense or similar claim of the Corporation in connection with such Proceeding; or (ii) any Proceeding initiated by the Corporation against Indemnitee. (b) Notwithstanding any other provision to the contrary set forth in this Agreement, in the event that any insurance policy obtained by the Corporation would provide coverage for any liability, cost or expense for which indemnification or advancement of expenses is sought by Indemnitee under this Agreement, the provisions of this Agreement shall be modified to the extent necessary to conform this Agreement to the requirements of such insurance policy so as to provide coverage to the fullest extent possible, including but not limited to any requirement relating to incurring defense costs and retaining legal counsel. SECTION 11. OTHER RIGHTS TO INDEMNIFICATION. The indemnification and advancement of costs and expenses (including attorneys' fees) provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may now or in the future be entitled under any provision of the Corporation's Certificate of Incorporation or By-Laws or any agreement, vote of stockholders or disinterested directors, provision of law or otherwise. SECTION 12. ATTORNEYS' FEES AND OTHER EXPENSES TO ENFORCE AGREEMENT. In the event that Indemnitee is subject to or intervenes in any Proceeding in which the validity or enforceability of this Agreement is at issue or seeks an adjudication to enforce Indemnitee's rights under, or to recover damages for breach of, this Agreement, if Indemnitee prevails in whole or in part in such Proceeding, Indemnitee shall be entitled to recover from the Corporation and shall be indemnified by the Corporation against, any actual expenses for attorneys' fees and disbursements reasonably incurred by Indemnitee. 4 SECTION 13. DURATION OF AGREEMENT. This Agreement shall continue until and terminate upon the later of: (a) ten years after Indemnitee has ceased to hold any of the positions or have any of the relationships described in Sections 2 and 3 of this Agreement; or (b) the final termination of all pending or threatened Proceedings with respect to Indemnitee. This Agreement shall be binding upon the Corporation and its successors and assigns and shall inure to the benefit Indemnitee and Indemnitee's spouse, assigns, heirs, devisees, executors, administrators or other legal representatives. SECTION 14. SEVERABILITY. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. SECTION 15. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. SECTION 16. HEADINGS. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. Section 17. DEFINITIONS AND INTERPRETATIONS. For purposes of this Agreement: (a) The term "Corporation" shall include any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger that, if its separate existence continued, would have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. (b) The term "Disinterested Director" shall mean a director of the Corporation who is not or was not a party to a Proceeding in respect of which indemnification is being sought by Indemnitee. (c) The term "fines" shall include any penalties and any excise or similar taxes assessed on a person with respect to an employee benefit plan. (d) The term "Independent Counsel" shall mean a law firm or a member of a law firm that neither is presently nor in the past five years has been retained to represent: (i) the 5 Corporation or Indemnitee in any matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Corporation or Indemnitee in an Proceeding to determine Indemnitee's right to indemnification under this Agreement. (e) The term "other enterprise" shall include employee benefit plans, including but not limited to any employee benefit plans of the Corporation. (f) The term "Proceeding" shall mean any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative in nature, including any counterclaim. (g) Service by Indemnitee "at the request of the Corporation" shall include, but is not limited to, any service that imposes duties on, or involves services by, Indemnitee with respect to an employee benefit plan, its participants or beneficiaries, including acting as a fiduciary thereof. (h) A person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in Sections 2 and 3 hereof. (i) Service by Indemnitee as a partner, trustee, manager or member of management or similar committee of a partnership, joint venture, trust or limited liability company, or as a director, officer, manager, partner, trustee or manager of an entity that is a partner, trustee, member or joint venturer, shall be considered service as a director or officer of the partnership, joint venture, trust, limited liability company or other enterprise. SECTION 18. MODIFICATION AND WAIVER. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. SECTION 19. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to notify the Corporation in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any matter that may be subject to indemnification covered hereunder, either civil, criminal or investigative. SECTION 20. NOTICES. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed or if (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed: 6 If to Indemnitee, to the address set forth on the signature page to this Agreement. If to the Corporation to: C&D Technologies, Inc. 1400 Union Meeting Road P.O. Box 3053 Blue Bell, PA 19422-0858 Attention: Corporate Secretary or to such other address as may have been furnished to Indemnitee by the Corporation or to the Corporation by Indemnitee, as the case may be. SECTION 21. GOVERNING LAW. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. C&D TECHNOLOGIES, INC. By: /s/ Stephen E. Markert, Jr. -------------------------------- Title: VP-CFO ----------------------------- William Harral, III ----------------------------------- Name: (please print or type) /s/ William Harral, III ----------------------------------- Signature Address: [Home address inserted] ----------------------------------- ----------------------------------- 7 EX-10 6 exb10-3.txt Exhibit 10.3 INDEMNIFICATION AGREEMENT INDEMNIFICATION AGREEMENT dated as of November 19, 2002 by and between C&D Technologies, Inc. (the "Corporation"), a Delaware corporation, and Wade H. Roberts, Jr. ("Indemnitee"): RECITALS: WHEREAS, highly competent persons are becoming more reluctant to serve publicly held corporations as directors unless they are provided with adequate protection through insurance and indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation; and WHEREAS, the current difficulties in the marketplace generally of obtaining adequate insurance and uncertainties relating to indemnification have increased the difficulty of attracting and retaining such persons; and WHEREAS, the Board of Directors has determined that the inability to attract and retain such persons would be detrimental to the best interests of the Corporation and its stockholders and that the Corporation should act to assure its directors that such protection will be available in the future; and WHEREAS, it is reasonable, prudent and necessary for the Corporation contractually to obligate itself to indemnify its directors to the fullest extent permitted by applicable law, subject only to the limited exceptions contained in this Agreement, so that they will serve or continue to serve the Corporation free from undue concern that they will not be so indemnified. NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Corporation and Indemnitee, intending to be legally bound, hereby covenant and agree as follows: SECTION 1. INDEMNIFICATION. In consideration of Indemnitee's continued service as a director of the Corporation, the Corporation shall indemnify Indemnitee to the fullest extent permitted by applicable law in effect on the date hereof or as such laws may from time to time be amended, subject only to the limited exceptions set forth in this Agreement. Without diminishing the scope of the indemnification provided by this Section 1, the rights of indemnification of Indemnitee provided hereunder shall include but shall not be limited to those rights specified in this Agreement, except to the extent expressly prohibited by applicable law. SECTION 2. PROCEEDINGS OTHER THAN AN ACTION BY OR IN THE RIGHT OF THE CORPORATION. Indemnitee shall be entitled to the indemnification rights provided in this Section 2 if Indemnitee is a party to or is threatened to be made a party to any Proceeding (as defined in Section 7), other than an action by or in the right of the Corporation, by reason of the fact that Indemnitee is or was a director, officer, employee, agent, or fiduciary of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, agent or fiduciary of any other corporation, partnership, limited liability company, joint venture, trust or other enterprise or entity or by reason of anything done or not done by Indemnitee in any such capacity. Pursuant to this Section 2, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with such Proceeding (including, but not limited to, the investigation, defense or appeal thereof), if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful. SECTION 3. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. Indemnitee shall be entitled to the indemnification rights provided in this Section 3 if Indemnitee is a person who was or is made a party or is threatened to be made a party to any Proceeding brought by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, agent, or fiduciary of any other corporation, partnership, limited liability company, joint venture, trust or other enterprise or entity by reason of anything done or not done by Indemnitee in any such capacity. Pursuant to this Section 3, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees) actually and reasonably incurred by Indemnitee in connection with such Proceeding (including, but not limited to, the investigation, defense, settlement or appeal thereof) if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation. SECTION 4. INDEMNIFICATION FOR COSTS AND EXPENSES OF SUCCESSFUL PARTY. Notwithstanding the other provisions of this Agreement, to the extent that Indemnitee has served as a witness on behalf of the Corporation or has been successful on the merits or otherwise, including, without limitation, the dismissal of a Proceeding without prejudice, in defense of any Proceeding referred to in Sections 2 and 3 hereof, or in defense of any claim, issue or matter therein, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees) actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection therewith. SECTION 5. PARTIAL INDEMNIFICATION. If Indemnitee is only partially successful in the defense, investigation, settlement or appeal of any Proceeding described in Section 2 or 3 hereof, and as a result is not entitled under Section 6 hereof to indemnification by the Corporation for the reasonable costs and expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee, the Corporation shall nevertheless indemnify Indemnitee pursuant to Section 6 hereof to the extent Indemnitee has been partially successful. SECTION 6. DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION. When seeking indemnification under Section 3 or 4 hereof, Indemnitee shall submit a written request for indemnification to the Corporation. Such request shall include documentation or information that is reasonably available to Indemnitee and reasonably necessary for the Corporation to make a determination of Indemnitee's entitlement to indemnification. Determination of Indemnitee's entitlement to indemnification pursuant to this Agreement shall be determined by the following person or persons, who shall be empowered to make such determination: (a) the Board of Directors of the Corporation by a majority vote of a quorum consisting of Disinterested Directors (as defined in Section 7); or (b) if such a quorum is not obtainable or, even if obtainable, if the Board of Directors by the majority vote of Disinterested Directors so directs, by Independent Counsel (as defined in Section 7) in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (c) by the stockholders. Such Independent Counsel shall be 2 selected by the Board of Directors and reasonably acceptable to Indemnitee. Upon failure of the Board to so select such Independent Counsel or upon failure of Indemnitee to so accept, such Independent Counsel shall be selected by the Chancellor of the State of Delaware or such other person as the Chancellor shall designate to make such selection. Such determination of entitlement to indemnification shall be made not later than 60 days after receipt by the Corporation of a written request for indemnification. Any reasonable costs or expenses (including attorneys' fees) incurred by Indemnitee in connection with a request for indemnification under this Agreement shall be borne by the Corporation provided that it is ultimately determined that the Indemnitee is entitled to indemnification. If the person making such determination shall determine that Indemnitee is entitled to indemnification as to part (but not all) of the application for indemnification, such person shall reasonably prorate such partial indemnification among such claims, issues or matters. SECTION 7. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS. The Secretary of the Corporation (or other officer designated by the Board of Directors) shall, promptly upon receipt of Indemnitee's request for indemnification, advise in writing the Board of Directors, or such other person or persons empowered to make the determination as provided in Section 6, that Indemnitee has made such request for indemnification. Upon making such request for indemnification, Indemnitee shall be presumed to be entitled to indemnification hereunder and the Corporation shall have the burden of proof in the making of any determination contrary to such presumption. If the person or persons so empowered to make such determination shall fail to make the requested indemnification within 60 days after receipt by the Corporation of such request, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be absolutely entitled to such indemnification, absent actual and material fraud in the request for indemnification. The termination of any Proceeding described in Sections 2 or 3 hereof by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself: (a) create a presumption that Indemnitee did not act in good faith and in a manner that Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful; or (b) otherwise adversely affect the rights of Indemnitee to indemnification except as may be provided herein. SECTION 8. ADVANCEMENT OF EXPENSES AND COSTS. Subject to the exceptions set forth in Section 10 hereof, all reasonable costs and expenses incurred by Indemnitee (including attorneys' fees, retainers and advances of disbursements required of Indemnitee) in defending a Proceeding shall be paid by the Corporation in advance of the final disposition of such Proceeding at the request of Indemnitee within 20 days after the receipt by the Corporation of a statement or statements from Indemnitee requesting such advance or advances from time to time. Indemnitee's entitlement to such costs and expenses shall include those incurred in connection with any proceeding by Indemnitee seeking an adjudication pursuant to this Agreement. Such statement or statements shall reasonably evidence the costs and expenses incurred by Indemnitee in connection therewith and shall include or be accompanied by a written undertaking by or on behalf of Indemnitee to repay such amount if it is ultimately determined that Indemnitee is not entitled to be indemnified against such costs and expenses by the Corporation as provided by this Agreement or otherwise. SECTION 9. REMEDIES OF INDEMNITEE IN CASES OF DETERMINATION NOT TO INDEMNIFY OR TO ADVANCE EXPENSES. In the event that a determination is made that Indemnitee is not entitled to indemnification hereunder or if payment has not been timely made following a determination of entitlement to indemnification pursuant to Sections 6 and 7, or if expenses are not advanced 3 pursuant to Section 8, Indemnitee shall be entitled to a final adjudication in an appropriate court of the State of Delaware or any other court of competent jurisdiction of Indemnitee's entitlement to such indemnification or advance. Such judicial proceeding shall be made de novo, and Indemnitee shall not be prejudiced in seeking further relief by reason of a determination (if so made) that Indemnitee is not entitled to indemnification. If a determination is made or deemed to have been made pursuant to the terms of Section 6 or Section 7 hereof that Indemnitee is entitled to indemnification, the Corporation shall be bound by such determination and is precluded from asserting that such determination has not been made or that the procedure by which such determination was made is not valid, binding and enforceable. The Corporation further agrees to stipulate in any such proceeding that the Corporation is bound by all the provisions of this Agreement and is precluded from making any assertion to the contrary. If the court shall determine that Indemnitee is entitled to any indemnification hereunder, the Corporation shall pay all reasonable costs and expenses (including attorneys' fees) actually incurred by Indemnitee in connection with such adjudication (including, but not limited to, any appellate proceedings). SECTION 10. EXCEPTIONS AND MODIFICATIONS TO INDEMNIFICATION. (a) Notwithstanding any other provision to the contrary set forth in this Agreement, unless otherwise determined by the Board of Directors by a majority vote of the Disinterested Directors, Indemnitee shall not be entitled to indemnification or advancement of expenses from the Corporation under this Agreement in any of the following circumstances: (i) any Proceeding initiated by or on behalf of Indemnitee against the Corporation (other than a Proceeding brought solely to seek the remedies set forth in Section 9 of this Agreement for a Proceeding not initiated by Indemnitee), or any counterclaim, cross-claim, affirmative defense or similar claim of the Corporation in connection with such Proceeding; or (ii) any Proceeding initiated by the Corporation against Indemnitee. (b) Notwithstanding any other provision to the contrary set forth in this Agreement, in the event that any insurance policy obtained by the Corporation would provide coverage for any liability, cost or expense for which indemnification or advancement of expenses is sought by Indemnitee under this Agreement, the provisions of this Agreement shall be modified to the extent necessary to conform this Agreement to the requirements of such insurance policy so as to provide coverage to the fullest extent possible, including but not limited to any requirement relating to incurring defense costs and retaining legal counsel. SECTION 11. OTHER RIGHTS TO INDEMNIFICATION. The indemnification and advancement of costs and expenses (including attorneys' fees) provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may now or in the future be entitled under any provision of the Corporation's Certificate of Incorporation or By-Laws or any agreement, vote of stockholders or disinterested directors, provision of law or otherwise. SECTION 12. ATTORNEYS' FEES AND OTHER EXPENSES TO ENFORCE AGREEMENT. In the event that Indemnitee is subject to or intervenes in any Proceeding in which the validity or enforceability of this Agreement is at issue or seeks an adjudication to enforce Indemnitee's rights under, or to recover damages for breach of, this Agreement, if Indemnitee prevails in whole or in part in such Proceeding, Indemnitee shall be entitled to recover from the Corporation and shall be indemnified by the Corporation against, any actual expenses for attorneys' fees and disbursements reasonably incurred by Indemnitee. 4 SECTION 13. DURATION OF AGREEMENT. This Agreement shall continue until and terminate upon the later of: (a) ten years after Indemnitee has ceased to hold any of the positions or have any of the relationships described in Sections 2 and 3 of this Agreement; or (b) the final termination of all pending or threatened Proceedings with respect to Indemnitee. This Agreement shall be binding upon the Corporation and its successors and assigns and shall inure to the benefit Indemnitee and Indemnitee's spouse, assigns, heirs, devisees, executors, administrators or other legal representatives. SECTION 14. SEVERABILITY. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. SECTION 15. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. SECTION 16. HEADINGS. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. Section 17. DEFINITIONS AND INTERPRETATIONS. For purposes of this Agreement: (a) The term "Corporation" shall include any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger that, if its separate existence continued, would have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. (b) The term "Disinterested Director" shall mean a director of the Corporation who is not or was not a party to a Proceeding in respect of which indemnification is being sought by Indemnitee. (c) The term "fines" shall include any penalties and any excise or similar taxes assessed on a person with respect to an employee benefit plan. (d) The term "Independent Counsel" shall mean a law firm or a member of a law firm that neither is presently nor in the past five years has been retained to represent: (i) the 5 Corporation or Indemnitee in any matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Corporation or Indemnitee in an Proceeding to determine Indemnitee's right to indemnification under this Agreement. (e) The term "other enterprise" shall include employee benefit plans, including but not limited to any employee benefit plans of the Corporation. (f) The term "Proceeding" shall mean any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative in nature, including any counterclaim. (g) Service by Indemnitee "at the request of the Corporation" shall include, but is not limited to, any service that imposes duties on, or involves services by, Indemnitee with respect to an employee benefit plan, its participants or beneficiaries, including acting as a fiduciary thereof. (h) A person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in Sections 2 and 3 hereof. (i) Service by Indemnitee as a partner, trustee, manager or member of management or similar committee of a partnership, joint venture, trust or limited liability company, or as a director, officer, manager, partner, trustee or manager of an entity that is a partner, trustee, member or joint venturer, shall be considered service as a director or officer of the partnership, joint venture, trust, limited liability company or other enterprise. SECTION 18. MODIFICATION AND WAIVER. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. SECTION 19. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to notify the Corporation in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any matter that may be subject to indemnification covered hereunder, either civil, criminal or investigative. SECTION 20. NOTICES. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed or if (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed: 6 If to Indemnitee, to the address set forth on the signature page to this Agreement. If to the Corporation to: C&D Technologies, Inc. 1400 Union Meeting Road P.O. Box 3053 Blue Bell, PA 19422-0858 Attention: Corporate Secretary or to such other address as may have been furnished to Indemnitee by the Corporation or to the Corporation by Indemnitee, as the case may be. SECTION 21. GOVERNING LAW. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. C&D TECHNOLOGIES, INC. By: /s/ Linda R. Hansen -------------------------------- Title: Vice President ----------------------------- Wade H. Roberts, Jr. ----------------------------------- Name: (please print or type) /s/ Wade H. Roberts, Jr. ----------------------------------- Signature Address: [Home address inserted] ----------------------------------- ----------------------------------- 7 EX-10 7 exb10-4.txt Exhibit 10.4 INDEMNIFICATION AGREEMENT INDEMNIFICATION AGREEMENT dated as of November 19, 2002 by and between C&D Technologies, Inc. (the "Corporation"), a Delaware corporation, and Peter R. Dachowski ("Indemnitee"): RECITALS: WHEREAS, highly competent persons are becoming more reluctant to serve publicly held corporations as directors unless they are provided with adequate protection through insurance and indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation; and WHEREAS, the current difficulties in the marketplace generally of obtaining adequate insurance and uncertainties relating to indemnification have increased the difficulty of attracting and retaining such persons; and WHEREAS, the Board of Directors has determined that the inability to attract and retain such persons would be detrimental to the best interests of the Corporation and its stockholders and that the Corporation should act to assure its directors that such protection will be available in the future; and WHEREAS, it is reasonable, prudent and necessary for the Corporation contractually to obligate itself to indemnify its directors to the fullest extent permitted by applicable law, subject only to the limited exceptions contained in this Agreement, so that they will serve or continue to serve the Corporation free from undue concern that they will not be so indemnified. NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Corporation and Indemnitee, intending to be legally bound, hereby covenant and agree as follows: SECTION 1. INDEMNIFICATION. In consideration of Indemnitee's continued service as a director of the Corporation, the Corporation shall indemnify Indemnitee to the fullest extent permitted by applicable law in effect on the date hereof or as such laws may from time to time be amended, subject only to the limited exceptions set forth in this Agreement. Without diminishing the scope of the indemnification provided by this Section 1, the rights of indemnification of Indemnitee provided hereunder shall include but shall not be limited to those rights specified in this Agreement, except to the extent expressly prohibited by applicable law. SECTION 2. PROCEEDINGS OTHER THAN AN ACTION BY OR IN THE RIGHT OF THE CORPORATION. Indemnitee shall be entitled to the indemnification rights provided in this Section 2 if Indemnitee is a party to or is threatened to be made a party to any Proceeding (as defined in Section 7), other than an action by or in the right of the Corporation, by reason of the fact that Indemnitee is or was a director, officer, employee, agent, or fiduciary of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, agent or fiduciary of any other corporation, partnership, limited liability company, joint venture, trust or other enterprise or entity or by reason of anything done or not done by Indemnitee in any such capacity. Pursuant to this Section 2, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with such Proceeding (including, but not limited to, the investigation, defense or appeal thereof), if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful. SECTION 3. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. Indemnitee shall be entitled to the indemnification rights provided in this Section 3 if Indemnitee is a person who was or is made a party or is threatened to be made a party to any Proceeding brought by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, agent, or fiduciary of any other corporation, partnership, limited liability company, joint venture, trust or other enterprise or entity by reason of anything done or not done by Indemnitee in any such capacity. Pursuant to this Section 3, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees) actually and reasonably incurred by Indemnitee in connection with such Proceeding (including, but not limited to, the investigation, defense, settlement or appeal thereof) if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation. SECTION 4. INDEMNIFICATION FOR COSTS AND EXPENSES OF SUCCESSFUL PARTY. Notwithstanding the other provisions of this Agreement, to the extent that Indemnitee has served as a witness on behalf of the Corporation or has been successful on the merits or otherwise, including, without limitation, the dismissal of a Proceeding without prejudice, in defense of any Proceeding referred to in Sections 2 and 3 hereof, or in defense of any claim, issue or matter therein, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees) actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection therewith. SECTION 5. PARTIAL INDEMNIFICATION. If Indemnitee is only partially successful in the defense, investigation, settlement or appeal of any Proceeding described in Section 2 or 3 hereof, and as a result is not entitled under Section 6 hereof to indemnification by the Corporation for the reasonable costs and expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee, the Corporation shall nevertheless indemnify Indemnitee pursuant to Section 6 hereof to the extent Indemnitee has been partially successful. SECTION 6. DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION. When seeking indemnification under Section 3 or 4 hereof, Indemnitee shall submit a written request for indemnification to the Corporation. Such request shall include documentation or information that is reasonably available to Indemnitee and reasonably necessary for the Corporation to make a determination of Indemnitee's entitlement to indemnification. Determination of Indemnitee's entitlement to indemnification pursuant to this Agreement shall be determined by the following person or persons, who shall be empowered to make such determination: (a) the Board of Directors of the Corporation by a majority vote of a quorum consisting of Disinterested Directors (as defined in Section 7); or (b) if such a quorum is not obtainable or, even if obtainable, if the Board of Directors by the majority vote of Disinterested Directors so directs, by Independent Counsel (as defined in Section 7) in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (c) by the stockholders. Such Independent Counsel shall be 2 selected by the Board of Directors and reasonably acceptable to Indemnitee. Upon failure of the Board to so select such Independent Counsel or upon failure of Indemnitee to so accept, such Independent Counsel shall be selected by the Chancellor of the State of Delaware or such other person as the Chancellor shall designate to make such selection. Such determination of entitlement to indemnification shall be made not later than 60 days after receipt by the Corporation of a written request for indemnification. Any reasonable costs or expenses (including attorneys' fees) incurred by Indemnitee in connection with a request for indemnification under this Agreement shall be borne by the Corporation provided that it is ultimately determined that the Indemnitee is entitled to indemnification. If the person making such determination shall determine that Indemnitee is entitled to indemnification as to part (but not all) of the application for indemnification, such person shall reasonably prorate such partial indemnification among such claims, issues or matters. SECTION 7. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS. The Secretary of the Corporation (or other officer designated by the Board of Directors) shall, promptly upon receipt of Indemnitee's request for indemnification, advise in writing the Board of Directors, or such other person or persons empowered to make the determination as provided in Section 6, that Indemnitee has made such request for indemnification. Upon making such request for indemnification, Indemnitee shall be presumed to be entitled to indemnification hereunder and the Corporation shall have the burden of proof in the making of any determination contrary to such presumption. If the person or persons so empowered to make such determination shall fail to make the requested indemnification within 60 days after receipt by the Corporation of such request, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be absolutely entitled to such indemnification, absent actual and material fraud in the request for indemnification. The termination of any Proceeding described in Sections 2 or 3 hereof by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself: (a) create a presumption that Indemnitee did not act in good faith and in a manner that Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful; or (b) otherwise adversely affect the rights of Indemnitee to indemnification except as may be provided herein. SECTION 8. ADVANCEMENT OF EXPENSES AND COSTS. Subject to the exceptions set forth in Section 10 hereof, all reasonable costs and expenses incurred by Indemnitee (including attorneys' fees, retainers and advances of disbursements required of Indemnitee) in defending a Proceeding shall be paid by the Corporation in advance of the final disposition of such Proceeding at the request of Indemnitee within 20 days after the receipt by the Corporation of a statement or statements from Indemnitee requesting such advance or advances from time to time. Indemnitee's entitlement to such costs and expenses shall include those incurred in connection with any proceeding by Indemnitee seeking an adjudication pursuant to this Agreement. Such statement or statements shall reasonably evidence the costs and expenses incurred by Indemnitee in connection therewith and shall include or be accompanied by a written undertaking by or on behalf of Indemnitee to repay such amount if it is ultimately determined that Indemnitee is not entitled to be indemnified against such costs and expenses by the Corporation as provided by this Agreement or otherwise. SECTION 9. REMEDIES OF INDEMNITEE IN CASES OF DETERMINATION NOT TO INDEMNIFY OR TO ADVANCE EXPENSES. In the event that a determination is made that Indemnitee is not entitled to indemnification hereunder or if payment has not been timely made following a determination of entitlement to indemnification pursuant to Sections 6 and 7, or if expenses are not advanced 3 pursuant to Section 8, Indemnitee shall be entitled to a final adjudication in an appropriate court of the State of Delaware or any other court of competent jurisdiction of Indemnitee's entitlement to such indemnification or advance. Such judicial proceeding shall be made de novo, and Indemnitee shall not be prejudiced in seeking further relief by reason of a determination (if so made) that Indemnitee is not entitled to indemnification. If a determination is made or deemed to have been made pursuant to the terms of Section 6 or Section 7 hereof that Indemnitee is entitled to indemnification, the Corporation shall be bound by such determination and is precluded from asserting that such determination has not been made or that the procedure by which such determination was made is not valid, binding and enforceable. The Corporation further agrees to stipulate in any such proceeding that the Corporation is bound by all the provisions of this Agreement and is precluded from making any assertion to the contrary. If the court shall determine that Indemnitee is entitled to any indemnification hereunder, the Corporation shall pay all reasonable costs and expenses (including attorneys' fees) actually incurred by Indemnitee in connection with such adjudication (including, but not limited to, any appellate proceedings). SECTION 10. EXCEPTIONS AND MODIFICATIONS TO INDEMNIFICATION. (a) Notwithstanding any other provision to the contrary set forth in this Agreement, unless otherwise determined by the Board of Directors by a majority vote of the Disinterested Directors, Indemnitee shall not be entitled to indemnification or advancement of expenses from the Corporation under this Agreement in any of the following circumstances: (i) any Proceeding initiated by or on behalf of Indemnitee against the Corporation (other than a Proceeding brought solely to seek the remedies set forth in Section 9 of this Agreement for a Proceeding not initiated by Indemnitee), or any counterclaim, cross-claim, affirmative defense or similar claim of the Corporation in connection with such Proceeding; or (ii) any Proceeding initiated by the Corporation against Indemnitee. (b) Notwithstanding any other provision to the contrary set forth in this Agreement, in the event that any insurance policy obtained by the Corporation would provide coverage for any liability, cost or expense for which indemnification or advancement of expenses is sought by Indemnitee under this Agreement, the provisions of this Agreement shall be modified to the extent necessary to conform this Agreement to the requirements of such insurance policy so as to provide coverage to the fullest extent possible, including but not limited to any requirement relating to incurring defense costs and retaining legal counsel. SECTION 11. OTHER RIGHTS TO INDEMNIFICATION. The indemnification and advancement of costs and expenses (including attorneys' fees) provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may now or in the future be entitled under any provision of the Corporation's Certificate of Incorporation or By-Laws or any agreement, vote of stockholders or disinterested directors, provision of law or otherwise. SECTION 12. ATTORNEYS' FEES AND OTHER EXPENSES TO ENFORCE AGREEMENT. In the event that Indemnitee is subject to or intervenes in any Proceeding in which the validity or enforceability of this Agreement is at issue or seeks an adjudication to enforce Indemnitee's rights under, or to recover damages for breach of, this Agreement, if Indemnitee prevails in whole or in part in such Proceeding, Indemnitee shall be entitled to recover from the Corporation and shall be indemnified by the Corporation against, any actual expenses for attorneys' fees and disbursements reasonably incurred by Indemnitee. 4 SECTION 13. DURATION OF AGREEMENT. This Agreement shall continue until and terminate upon the later of: (a) ten years after Indemnitee has ceased to hold any of the positions or have any of the relationships described in Sections 2 and 3 of this Agreement; or (b) the final termination of all pending or threatened Proceedings with respect to Indemnitee. This Agreement shall be binding upon the Corporation and its successors and assigns and shall inure to the benefit Indemnitee and Indemnitee's spouse, assigns, heirs, devisees, executors, administrators or other legal representatives. SECTION 14. SEVERABILITY. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. SECTION 15. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. SECTION 16. HEADINGS. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. Section 17. DEFINITIONS AND INTERPRETATIONS. For purposes of this Agreement: (a) The term "Corporation" shall include any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger that, if its separate existence continued, would have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. (b) The term "Disinterested Director" shall mean a director of the Corporation who is not or was not a party to a Proceeding in respect of which indemnification is being sought by Indemnitee. (c) The term "fines" shall include any penalties and any excise or similar taxes assessed on a person with respect to an employee benefit plan. (d) The term "Independent Counsel" shall mean a law firm or a member of a law firm that neither is presently nor in the past five years has been retained to represent: (i) the 5 Corporation or Indemnitee in any matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Corporation or Indemnitee in an Proceeding to determine Indemnitee's right to indemnification under this Agreement. (e) The term "other enterprise" shall include employee benefit plans, including but not limited to any employee benefit plans of the Corporation. (f) The term "Proceeding" shall mean any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative in nature, including any counterclaim. (g) Service by Indemnitee "at the request of the Corporation" shall include, but is not limited to, any service that imposes duties on, or involves services by, Indemnitee with respect to an employee benefit plan, its participants or beneficiaries, including acting as a fiduciary thereof. (h) A person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in Sections 2 and 3 hereof. (i) Service by Indemnitee as a partner, trustee, manager or member of management or similar committee of a partnership, joint venture, trust or limited liability company, or as a director, officer, manager, partner, trustee or manager of an entity that is a partner, trustee, member or joint venturer, shall be considered service as a director or officer of the partnership, joint venture, trust, limited liability company or other enterprise. SECTION 18. MODIFICATION AND WAIVER. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. SECTION 19. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to notify the Corporation in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any matter that may be subject to indemnification covered hereunder, either civil, criminal or investigative. SECTION 20. NOTICES. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed or if (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed: 6 If to Indemnitee, to the address set forth on the signature page to this Agreement. If to the Corporation to: C&D Technologies, Inc. 1400 Union Meeting Road P.O. Box 3053 Blue Bell, PA 19422-0858 Attention: Corporate Secretary or to such other address as may have been furnished to Indemnitee by the Corporation or to the Corporation by Indemnitee, as the case may be. SECTION 21. GOVERNING LAW. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. C&D TECHNOLOGIES, INC. By: /s/ Stephen E. Markert, Jr. -------------------------------- Title: VP-CFO ----------------------------- Peter R. Dachowski ----------------------------------- Name: (please print or type) /s/ Peter R. Dachowski ----------------------------------- Signature Address: [Home address inserted] ----------------------------------- ----------------------------------- 7 EX-10 8 exb10-5.txt Exhibit 10.5 INDEMNIFICATION AGREEMENT INDEMNIFICATION AGREEMENT dated as of November 19, 2002 by and between C&D Technologies, Inc. (the "Corporation"), a Delaware corporation, and Kevin P. Dowd ("Indemnitee"): RECITALS: WHEREAS, highly competent persons are becoming more reluctant to serve publicly held corporations as directors unless they are provided with adequate protection through insurance and indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation; and WHEREAS, the current difficulties in the marketplace generally of obtaining adequate insurance and uncertainties relating to indemnification have increased the difficulty of attracting and retaining such persons; and WHEREAS, the Board of Directors has determined that the inability to attract and retain such persons would be detrimental to the best interests of the Corporation and its stockholders and that the Corporation should act to assure its directors that such protection will be available in the future; and WHEREAS, it is reasonable, prudent and necessary for the Corporation contractually to obligate itself to indemnify its directors to the fullest extent permitted by applicable law, subject only to the limited exceptions contained in this Agreement, so that they will serve or continue to serve the Corporation free from undue concern that they will not be so indemnified. NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Corporation and Indemnitee, intending to be legally bound, hereby covenant and agree as follows: SECTION 1. INDEMNIFICATION. In consideration of Indemnitee's continued service as a director of the Corporation, the Corporation shall indemnify Indemnitee to the fullest extent permitted by applicable law in effect on the date hereof or as such laws may from time to time be amended, subject only to the limited exceptions set forth in this Agreement. Without diminishing the scope of the indemnification provided by this Section 1, the rights of indemnification of Indemnitee provided hereunder shall include but shall not be limited to those rights specified in this Agreement, except to the extent expressly prohibited by applicable law. SECTION 2. PROCEEDINGS OTHER THAN AN ACTION BY OR IN THE RIGHT OF THE CORPORATION. Indemnitee shall be entitled to the indemnification rights provided in this Section 2 if Indemnitee is a party to or is threatened to be made a party to any Proceeding (as defined in Section 7), other than an action by or in the right of the Corporation, by reason of the fact that Indemnitee is or was a director, officer, employee, agent, or fiduciary of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, agent or fiduciary of any other corporation, partnership, limited liability company, joint venture, trust or other enterprise or entity or by reason of anything done or not done by Indemnitee in any such capacity. Pursuant to this Section 2, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with such Proceeding (including, but not limited to, the investigation, defense or appeal thereof), if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful. SECTION 3. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. Indemnitee shall be entitled to the indemnification rights provided in this Section 3 if Indemnitee is a person who was or is made a party or is threatened to be made a party to any Proceeding brought by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, agent, or fiduciary of any other corporation, partnership, limited liability company, joint venture, trust or other enterprise or entity by reason of anything done or not done by Indemnitee in any such capacity. Pursuant to this Section 3, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees) actually and reasonably incurred by Indemnitee in connection with such Proceeding (including, but not limited to, the investigation, defense, settlement or appeal thereof) if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation. SECTION 4. INDEMNIFICATION FOR COSTS AND EXPENSES OF SUCCESSFUL PARTY. Notwithstanding the other provisions of this Agreement, to the extent that Indemnitee has served as a witness on behalf of the Corporation or has been successful on the merits or otherwise, including, without limitation, the dismissal of a Proceeding without prejudice, in defense of any Proceeding referred to in Sections 2 and 3 hereof, or in defense of any claim, issue or matter therein, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees) actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection therewith. SECTION 5. PARTIAL INDEMNIFICATION. If Indemnitee is only partially successful in the defense, investigation, settlement or appeal of any Proceeding described in Section 2 or 3 hereof, and as a result is not entitled under Section 6 hereof to indemnification by the Corporation for the reasonable costs and expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee, the Corporation shall nevertheless indemnify Indemnitee pursuant to Section 6 hereof to the extent Indemnitee has been partially successful. SECTION 6. DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION. When seeking indemnification under Section 3 or 4 hereof, Indemnitee shall submit a written request for indemnification to the Corporation. Such request shall include documentation or information that is reasonably available to Indemnitee and reasonably necessary for the Corporation to make a determination of Indemnitee's entitlement to indemnification. Determination of Indemnitee's entitlement to indemnification pursuant to this Agreement shall be determined by the following person or persons, who shall be empowered to make such determination: (a) the Board of Directors of the Corporation by a majority vote of a quorum consisting of Disinterested Directors (as defined in Section 7); or (b) if such a quorum is not obtainable or, even if obtainable, if the Board of Directors by the majority vote of Disinterested Directors so directs, by Independent Counsel (as defined in Section 7) in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (c) by the stockholders. Such Independent Counsel shall be 2 selected by the Board of Directors and reasonably acceptable to Indemnitee. Upon failure of the Board to so select such Independent Counsel or upon failure of Indemnitee to so accept, such Independent Counsel shall be selected by the Chancellor of the State of Delaware or such other person as the Chancellor shall designate to make such selection. Such determination of entitlement to indemnification shall be made not later than 60 days after receipt by the Corporation of a written request for indemnification. Any reasonable costs or expenses (including attorneys' fees) incurred by Indemnitee in connection with a request for indemnification under this Agreement shall be borne by the Corporation provided that it is ultimately determined that the Indemnitee is entitled to indemnification. If the person making such determination shall determine that Indemnitee is entitled to indemnification as to part (but not all) of the application for indemnification, such person shall reasonably prorate such partial indemnification among such claims, issues or matters. SECTION 7. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS. The Secretary of the Corporation (or other officer designated by the Board of Directors) shall, promptly upon receipt of Indemnitee's request for indemnification, advise in writing the Board of Directors, or such other person or persons empowered to make the determination as provided in Section 6, that Indemnitee has made such request for indemnification. Upon making such request for indemnification, Indemnitee shall be presumed to be entitled to indemnification hereunder and the Corporation shall have the burden of proof in the making of any determination contrary to such presumption. If the person or persons so empowered to make such determination shall fail to make the requested indemnification within 60 days after receipt by the Corporation of such request, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be absolutely entitled to such indemnification, absent actual and material fraud in the request for indemnification. The termination of any Proceeding described in Sections 2 or 3 hereof by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself: (a) create a presumption that Indemnitee did not act in good faith and in a manner that Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful; or (b) otherwise adversely affect the rights of Indemnitee to indemnification except as may be provided herein. SECTION 8. ADVANCEMENT OF EXPENSES AND COSTS. Subject to the exceptions set forth in Section 10 hereof, all reasonable costs and expenses incurred by Indemnitee (including attorneys' fees, retainers and advances of disbursements required of Indemnitee) in defending a Proceeding shall be paid by the Corporation in advance of the final disposition of such Proceeding at the request of Indemnitee within 20 days after the receipt by the Corporation of a statement or statements from Indemnitee requesting such advance or advances from time to time. Indemnitee's entitlement to such costs and expenses shall include those incurred in connection with any proceeding by Indemnitee seeking an adjudication pursuant to this Agreement. Such statement or statements shall reasonably evidence the costs and expenses incurred by Indemnitee in connection therewith and shall include or be accompanied by a written undertaking by or on behalf of Indemnitee to repay such amount if it is ultimately determined that Indemnitee is not entitled to be indemnified against such costs and expenses by the Corporation as provided by this Agreement or otherwise. SECTION 9. REMEDIES OF INDEMNITEE IN CASES OF DETERMINATION NOT TO INDEMNIFY OR TO ADVANCE EXPENSES. In the event that a determination is made that Indemnitee is not entitled to indemnification hereunder or if payment has not been timely made following a determination of entitlement to indemnification pursuant to Sections 6 and 7, or if expenses are not advanced 3 pursuant to Section 8, Indemnitee shall be entitled to a final adjudication in an appropriate court of the State of Delaware or any other court of competent jurisdiction of Indemnitee's entitlement to such indemnification or advance. Such judicial proceeding shall be made de novo, and Indemnitee shall not be prejudiced in seeking further relief by reason of a determination (if so made) that Indemnitee is not entitled to indemnification. If a determination is made or deemed to have been made pursuant to the terms of Section 6 or Section 7 hereof that Indemnitee is entitled to indemnification, the Corporation shall be bound by such determination and is precluded from asserting that such determination has not been made or that the procedure by which such determination was made is not valid, binding and enforceable. The Corporation further agrees to stipulate in any such proceeding that the Corporation is bound by all the provisions of this Agreement and is precluded from making any assertion to the contrary. If the court shall determine that Indemnitee is entitled to any indemnification hereunder, the Corporation shall pay all reasonable costs and expenses (including attorneys' fees) actually incurred by Indemnitee in connection with such adjudication (including, but not limited to, any appellate proceedings). SECTION 10. EXCEPTIONS AND MODIFICATIONS TO INDEMNIFICATION. (a) Notwithstanding any other provision to the contrary set forth in this Agreement, unless otherwise determined by the Board of Directors by a majority vote of the Disinterested Directors, Indemnitee shall not be entitled to indemnification or advancement of expenses from the Corporation under this Agreement in any of the following circumstances: (i) any Proceeding initiated by or on behalf of Indemnitee against the Corporation (other than a Proceeding brought solely to seek the remedies set forth in Section 9 of this Agreement for a Proceeding not initiated by Indemnitee), or any counterclaim, cross-claim, affirmative defense or similar claim of the Corporation in connection with such Proceeding; or (ii) any Proceeding initiated by the Corporation against Indemnitee. (b) Notwithstanding any other provision to the contrary set forth in this Agreement, in the event that any insurance policy obtained by the Corporation would provide coverage for any liability, cost or expense for which indemnification or advancement of expenses is sought by Indemnitee under this Agreement, the provisions of this Agreement shall be modified to the extent necessary to conform this Agreement to the requirements of such insurance policy so as to provide coverage to the fullest extent possible, including but not limited to any requirement relating to incurring defense costs and retaining legal counsel. SECTION 11. OTHER RIGHTS TO INDEMNIFICATION. The indemnification and advancement of costs and expenses (including attorneys' fees) provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may now or in the future be entitled under any provision of the Corporation's Certificate of Incorporation or By-Laws or any agreement, vote of stockholders or disinterested directors, provision of law or otherwise. SECTION 12. ATTORNEYS' FEES AND OTHER EXPENSES TO ENFORCE AGREEMENT. In the event that Indemnitee is subject to or intervenes in any Proceeding in which the validity or enforceability of this Agreement is at issue or seeks an adjudication to enforce Indemnitee's rights under, or to recover damages for breach of, this Agreement, if Indemnitee prevails in whole or in part in such Proceeding, Indemnitee shall be entitled to recover from the Corporation and shall be indemnified by the Corporation against, any actual expenses for attorneys' fees and disbursements reasonably incurred by Indemnitee. 4 SECTION 13. DURATION OF AGREEMENT. This Agreement shall continue until and terminate upon the later of: (a) ten years after Indemnitee has ceased to hold any of the positions or have any of the relationships described in Sections 2 and 3 of this Agreement; or (b) the final termination of all pending or threatened Proceedings with respect to Indemnitee. This Agreement shall be binding upon the Corporation and its successors and assigns and shall inure to the benefit Indemnitee and Indemnitee's spouse, assigns, heirs, devisees, executors, administrators or other legal representatives. SECTION 14. SEVERABILITY. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. SECTION 15. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. SECTION 16. HEADINGS. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. Section 17. DEFINITIONS AND INTERPRETATIONS. For purposes of this Agreement: (a) The term "Corporation" shall include any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger that, if its separate existence continued, would have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. (b) The term "Disinterested Director" shall mean a director of the Corporation who is not or was not a party to a Proceeding in respect of which indemnification is being sought by Indemnitee. (c) The term "fines" shall include any penalties and any excise or similar taxes assessed on a person with respect to an employee benefit plan. (d) The term "Independent Counsel" shall mean a law firm or a member of a law firm that neither is presently nor in the past five years has been retained to represent: (i) the 5 Corporation or Indemnitee in any matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Corporation or Indemnitee in an Proceeding to determine Indemnitee's right to indemnification under this Agreement. (e) The term "other enterprise" shall include employee benefit plans, including but not limited to any employee benefit plans of the Corporation. (f) The term "Proceeding" shall mean any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative in nature, including any counterclaim. (g) Service by Indemnitee "at the request of the Corporation" shall include, but is not limited to, any service that imposes duties on, or involves services by, Indemnitee with respect to an employee benefit plan, its participants or beneficiaries, including acting as a fiduciary thereof. (h) A person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in Sections 2 and 3 hereof. (i) Service by Indemnitee as a partner, trustee, manager or member of management or similar committee of a partnership, joint venture, trust or limited liability company, or as a director, officer, manager, partner, trustee or manager of an entity that is a partner, trustee, member or joint venturer, shall be considered service as a director or officer of the partnership, joint venture, trust, limited liability company or other enterprise. SECTION 18. MODIFICATION AND WAIVER. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. SECTION 19. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to notify the Corporation in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any matter that may be subject to indemnification covered hereunder, either civil, criminal or investigative. SECTION 20. NOTICES. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed or if (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed: 6 If to Indemnitee, to the address set forth on the signature page to this Agreement. If to the Corporation to: C&D Technologies, Inc. 1400 Union Meeting Road P.O. Box 3053 Blue Bell, PA 19422-0858 Attention: Corporate Secretary or to such other address as may have been furnished to Indemnitee by the Corporation or to the Corporation by Indemnitee, as the case may be. SECTION 21. GOVERNING LAW. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. C&D TECHNOLOGIES, INC. By: /s/ Stephen E. Markert, Jr. -------------------------------- Title: VP-CFO ----------------------------- Kevin P. Dowd ----------------------------------- Name: (please print or type) /s/ Kevin P. Dowd ----------------------------------- Signature Address: [Home address inserted] ----------------------------------- ----------------------------------- 7 EX-10 9 exb10-6.txt Exhibit 10.6 INDEMNIFICATION AGREEMENT INDEMNIFICATION AGREEMENT dated as of November 19, 2002 by and between C&D Technologies, Inc. (the "Corporation"), a Delaware corporation, and Robert I. Harries ("Indemnitee"): RECITALS: WHEREAS, highly competent persons are becoming more reluctant to serve publicly held corporations as directors unless they are provided with adequate protection through insurance and indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation; and WHEREAS, the current difficulties in the marketplace generally of obtaining adequate insurance and uncertainties relating to indemnification have increased the difficulty of attracting and retaining such persons; and WHEREAS, the Board of Directors has determined that the inability to attract and retain such persons would be detrimental to the best interests of the Corporation and its stockholders and that the Corporation should act to assure its directors that such protection will be available in the future; and WHEREAS, it is reasonable, prudent and necessary for the Corporation contractually to obligate itself to indemnify its directors to the fullest extent permitted by applicable law, subject only to the limited exceptions contained in this Agreement, so that they will serve or continue to serve the Corporation free from undue concern that they will not be so indemnified. NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Corporation and Indemnitee, intending to be legally bound, hereby covenant and agree as follows: SECTION 1. INDEMNIFICATION. In consideration of Indemnitee's continued service as a director of the Corporation, the Corporation shall indemnify Indemnitee to the fullest extent permitted by applicable law in effect on the date hereof or as such laws may from time to time be amended, subject only to the limited exceptions set forth in this Agreement. Without diminishing the scope of the indemnification provided by this Section 1, the rights of indemnification of Indemnitee provided hereunder shall include but shall not be limited to those rights specified in this Agreement, except to the extent expressly prohibited by applicable law. SECTION 2. PROCEEDINGS OTHER THAN AN ACTION BY OR IN THE RIGHT OF THE CORPORATION. Indemnitee shall be entitled to the indemnification rights provided in this Section 2 if Indemnitee is a party to or is threatened to be made a party to any Proceeding (as defined in Section 7), other than an action by or in the right of the Corporation, by reason of the fact that Indemnitee is or was a director, officer, employee, agent, or fiduciary of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, agent or fiduciary of any other corporation, partnership, limited liability company, joint venture, trust or other enterprise or entity or by reason of anything done or not done by Indemnitee in any such capacity. Pursuant to this Section 2, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with such Proceeding (including, but not limited to, the investigation, defense or appeal thereof), if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful. SECTION 3. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. Indemnitee shall be entitled to the indemnification rights provided in this Section 3 if Indemnitee is a person who was or is made a party or is threatened to be made a party to any Proceeding brought by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, agent, or fiduciary of any other corporation, partnership, limited liability company, joint venture, trust or other enterprise or entity by reason of anything done or not done by Indemnitee in any such capacity. Pursuant to this Section 3, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees) actually and reasonably incurred by Indemnitee in connection with such Proceeding (including, but not limited to, the investigation, defense, settlement or appeal thereof) if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation. SECTION 4. INDEMNIFICATION FOR COSTS AND EXPENSES OF SUCCESSFUL PARTY. Notwithstanding the other provisions of this Agreement, to the extent that Indemnitee has served as a witness on behalf of the Corporation or has been successful on the merits or otherwise, including, without limitation, the dismissal of a Proceeding without prejudice, in defense of any Proceeding referred to in Sections 2 and 3 hereof, or in defense of any claim, issue or matter therein, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees) actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection therewith. SECTION 5. PARTIAL INDEMNIFICATION. If Indemnitee is only partially successful in the defense, investigation, settlement or appeal of any Proceeding described in Section 2 or 3 hereof, and as a result is not entitled under Section 6 hereof to indemnification by the Corporation for the reasonable costs and expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee, the Corporation shall nevertheless indemnify Indemnitee pursuant to Section 6 hereof to the extent Indemnitee has been partially successful. SECTION 6. DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION. When seeking indemnification under Section 3 or 4 hereof, Indemnitee shall submit a written request for indemnification to the Corporation. Such request shall include documentation or information that is reasonably available to Indemnitee and reasonably necessary for the Corporation to make a determination of Indemnitee's entitlement to indemnification. Determination of Indemnitee's entitlement to indemnification pursuant to this Agreement shall be determined by the following person or persons, who shall be empowered to make such determination: (a) the Board of Directors of the Corporation by a majority vote of a quorum consisting of Disinterested Directors (as defined in Section 7); or (b) if such a quorum is not obtainable or, even if obtainable, if the Board of Directors by the majority vote of Disinterested Directors so directs, by Independent Counsel (as defined in Section 7) in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (c) by the stockholders. Such Independent Counsel shall be 2 selected by the Board of Directors and reasonably acceptable to Indemnitee. Upon failure of the Board to so select such Independent Counsel or upon failure of Indemnitee to so accept, such Independent Counsel shall be selected by the Chancellor of the State of Delaware or such other person as the Chancellor shall designate to make such selection. Such determination of entitlement to indemnification shall be made not later than 60 days after receipt by the Corporation of a written request for indemnification. Any reasonable costs or expenses (including attorneys' fees) incurred by Indemnitee in connection with a request for indemnification under this Agreement shall be borne by the Corporation provided that it is ultimately determined that the Indemnitee is entitled to indemnification. If the person making such determination shall determine that Indemnitee is entitled to indemnification as to part (but not all) of the application for indemnification, such person shall reasonably prorate such partial indemnification among such claims, issues or matters. SECTION 7. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS. The Secretary of the Corporation (or other officer designated by the Board of Directors) shall, promptly upon receipt of Indemnitee's request for indemnification, advise in writing the Board of Directors, or such other person or persons empowered to make the determination as provided in Section 6, that Indemnitee has made such request for indemnification. Upon making such request for indemnification, Indemnitee shall be presumed to be entitled to indemnification hereunder and the Corporation shall have the burden of proof in the making of any determination contrary to such presumption. If the person or persons so empowered to make such determination shall fail to make the requested indemnification within 60 days after receipt by the Corporation of such request, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be absolutely entitled to such indemnification, absent actual and material fraud in the request for indemnification. The termination of any Proceeding described in Sections 2 or 3 hereof by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself: (a) create a presumption that Indemnitee did not act in good faith and in a manner that Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful; or (b) otherwise adversely affect the rights of Indemnitee to indemnification except as may be provided herein. SECTION 8. ADVANCEMENT OF EXPENSES AND COSTS. Subject to the exceptions set forth in Section 10 hereof, all reasonable costs and expenses incurred by Indemnitee (including attorneys' fees, retainers and advances of disbursements required of Indemnitee) in defending a Proceeding shall be paid by the Corporation in advance of the final disposition of such Proceeding at the request of Indemnitee within 20 days after the receipt by the Corporation of a statement or statements from Indemnitee requesting such advance or advances from time to time. Indemnitee's entitlement to such costs and expenses shall include those incurred in connection with any proceeding by Indemnitee seeking an adjudication pursuant to this Agreement. Such statement or statements shall reasonably evidence the costs and expenses incurred by Indemnitee in connection therewith and shall include or be accompanied by a written undertaking by or on behalf of Indemnitee to repay such amount if it is ultimately determined that Indemnitee is not entitled to be indemnified against such costs and expenses by the Corporation as provided by this Agreement or otherwise. SECTION 9. REMEDIES OF INDEMNITEE IN CASES OF DETERMINATION NOT TO INDEMNIFY OR TO ADVANCE EXPENSES. In the event that a determination is made that Indemnitee is not entitled to indemnification hereunder or if payment has not been timely made following a determination of entitlement to indemnification pursuant to Sections 6 and 7, or if expenses are not advanced 3 pursuant to Section 8, Indemnitee shall be entitled to a final adjudication in an appropriate court of the State of Delaware or any other court of competent jurisdiction of Indemnitee's entitlement to such indemnification or advance. Such judicial proceeding shall be made de novo, and Indemnitee shall not be prejudiced in seeking further relief by reason of a determination (if so made) that Indemnitee is not entitled to indemnification. If a determination is made or deemed to have been made pursuant to the terms of Section 6 or Section 7 hereof that Indemnitee is entitled to indemnification, the Corporation shall be bound by such determination and is precluded from asserting that such determination has not been made or that the procedure by which such determination was made is not valid, binding and enforceable. The Corporation further agrees to stipulate in any such proceeding that the Corporation is bound by all the provisions of this Agreement and is precluded from making any assertion to the contrary. If the court shall determine that Indemnitee is entitled to any indemnification hereunder, the Corporation shall pay all reasonable costs and expenses (including attorneys' fees) actually incurred by Indemnitee in connection with such adjudication (including, but not limited to, any appellate proceedings). SECTION 10. EXCEPTIONS AND MODIFICATIONS TO INDEMNIFICATION. (a) Notwithstanding any other provision to the contrary set forth in this Agreement, unless otherwise determined by the Board of Directors by a majority vote of the Disinterested Directors, Indemnitee shall not be entitled to indemnification or advancement of expenses from the Corporation under this Agreement in any of the following circumstances: (i) any Proceeding initiated by or on behalf of Indemnitee against the Corporation (other than a Proceeding brought solely to seek the remedies set forth in Section 9 of this Agreement for a Proceeding not initiated by Indemnitee), or any counterclaim, cross-claim, affirmative defense or similar claim of the Corporation in connection with such Proceeding; or (ii) any Proceeding initiated by the Corporation against Indemnitee. (b) Notwithstanding any other provision to the contrary set forth in this Agreement, in the event that any insurance policy obtained by the Corporation would provide coverage for any liability, cost or expense for which indemnification or advancement of expenses is sought by Indemnitee under this Agreement, the provisions of this Agreement shall be modified to the extent necessary to conform this Agreement to the requirements of such insurance policy so as to provide coverage to the fullest extent possible, including but not limited to any requirement relating to incurring defense costs and retaining legal counsel. SECTION 11. OTHER RIGHTS TO INDEMNIFICATION. The indemnification and advancement of costs and expenses (including attorneys' fees) provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may now or in the future be entitled under any provision of the Corporation's Certificate of Incorporation or By-Laws or any agreement, vote of stockholders or disinterested directors, provision of law or otherwise. SECTION 12. ATTORNEYS' FEES AND OTHER EXPENSES TO ENFORCE AGREEMENT. In the event that Indemnitee is subject to or intervenes in any Proceeding in which the validity or enforceability of this Agreement is at issue or seeks an adjudication to enforce Indemnitee's rights under, or to recover damages for breach of, this Agreement, if Indemnitee prevails in whole or in part in such Proceeding, Indemnitee shall be entitled to recover from the Corporation and shall be indemnified by the Corporation against, any actual expenses for attorneys' fees and disbursements reasonably incurred by Indemnitee. 4 SECTION 13. DURATION OF AGREEMENT. This Agreement shall continue until and terminate upon the later of: (a) ten years after Indemnitee has ceased to hold any of the positions or have any of the relationships described in Sections 2 and 3 of this Agreement; or (b) the final termination of all pending or threatened Proceedings with respect to Indemnitee. This Agreement shall be binding upon the Corporation and its successors and assigns and shall inure to the benefit Indemnitee and Indemnitee's spouse, assigns, heirs, devisees, executors, administrators or other legal representatives. SECTION 14. SEVERABILITY. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. SECTION 15. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. SECTION 16. HEADINGS. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. Section 17. DEFINITIONS AND INTERPRETATIONS. For purposes of this Agreement: (a) The term "Corporation" shall include any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger that, if its separate existence continued, would have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. (b) The term "Disinterested Director" shall mean a director of the Corporation who is not or was not a party to a Proceeding in respect of which indemnification is being sought by Indemnitee. (c) The term "fines" shall include any penalties and any excise or similar taxes assessed on a person with respect to an employee benefit plan. (d) The term "Independent Counsel" shall mean a law firm or a member of a law firm that neither is presently nor in the past five years has been retained to represent: (i) the 5 Corporation or Indemnitee in any matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Corporation or Indemnitee in an Proceeding to determine Indemnitee's right to indemnification under this Agreement. (e) The term "other enterprise" shall include employee benefit plans, including but not limited to any employee benefit plans of the Corporation. (f) The term "Proceeding" shall mean any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative in nature, including any counterclaim. (g) Service by Indemnitee "at the request of the Corporation" shall include, but is not limited to, any service that imposes duties on, or involves services by, Indemnitee with respect to an employee benefit plan, its participants or beneficiaries, including acting as a fiduciary thereof. (h) A person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in Sections 2 and 3 hereof. (i) Service by Indemnitee as a partner, trustee, manager or member of management or similar committee of a partnership, joint venture, trust or limited liability company, or as a director, officer, manager, partner, trustee or manager of an entity that is a partner, trustee, member or joint venturer, shall be considered service as a director or officer of the partnership, joint venture, trust, limited liability company or other enterprise. SECTION 18. MODIFICATION AND WAIVER. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. SECTION 19. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to notify the Corporation in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any matter that may be subject to indemnification covered hereunder, either civil, criminal or investigative. SECTION 20. NOTICES. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed or if (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed: 6 If to Indemnitee, to the address set forth on the signature page to this Agreement. If to the Corporation to: C&D Technologies, Inc. 1400 Union Meeting Road P.O. Box 3053 Blue Bell, PA 19422-0858 Attention: Corporate Secretary or to such other address as may have been furnished to Indemnitee by the Corporation or to the Corporation by Indemnitee, as the case may be. SECTION 21. GOVERNING LAW. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. C&D TECHNOLOGIES, INC. By: /s/ Stephen E. Markert, Jr. -------------------------------- Title: VP-CFO ----------------------------- Robert I. Harries ----------------------------------- Name: (please print or type) /s/ Robert I. Harries ----------------------------------- Signature Address: [Home address inserted] ----------------------------------- ----------------------------------- 7 EX-10 10 exb10-7.txt Exhibit 10.7 INDEMNIFICATION AGREEMENT INDEMNIFICATION AGREEMENT dated as of November 19, 2002 by and between C&D Technologies, Inc. (the "Corporation"), a Delaware corporation, and Pamela S. Lewis ("Indemnitee"): RECITALS: WHEREAS, highly competent persons are becoming more reluctant to serve publicly held corporations as directors unless they are provided with adequate protection through insurance and indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation; and WHEREAS, the current difficulties in the marketplace generally of obtaining adequate insurance and uncertainties relating to indemnification have increased the difficulty of attracting and retaining such persons; and WHEREAS, the Board of Directors has determined that the inability to attract and retain such persons would be detrimental to the best interests of the Corporation and its stockholders and that the Corporation should act to assure its directors that such protection will be available in the future; and WHEREAS, it is reasonable, prudent and necessary for the Corporation contractually to obligate itself to indemnify its directors to the fullest extent permitted by applicable law, subject only to the limited exceptions contained in this Agreement, so that they will serve or continue to serve the Corporation free from undue concern that they will not be so indemnified. NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Corporation and Indemnitee, intending to be legally bound, hereby covenant and agree as follows: SECTION 1. INDEMNIFICATION. In consideration of Indemnitee's continued service as a director of the Corporation, the Corporation shall indemnify Indemnitee to the fullest extent permitted by applicable law in effect on the date hereof or as such laws may from time to time be amended, subject only to the limited exceptions set forth in this Agreement. Without diminishing the scope of the indemnification provided by this Section 1, the rights of indemnification of Indemnitee provided hereunder shall include but shall not be limited to those rights specified in this Agreement, except to the extent expressly prohibited by applicable law. SECTION 2. PROCEEDINGS OTHER THAN AN ACTION BY OR IN THE RIGHT OF THE CORPORATION. Indemnitee shall be entitled to the indemnification rights provided in this Section 2 if Indemnitee is a party to or is threatened to be made a party to any Proceeding (as defined in Section 7), other than an action by or in the right of the Corporation, by reason of the fact that Indemnitee is or was a director, officer, employee, agent, or fiduciary of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, agent or fiduciary of any other corporation, partnership, limited liability company, joint venture, trust or other enterprise or entity or by reason of anything done or not done by Indemnitee in any such capacity. Pursuant to this Section 2, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with such Proceeding (including, but not limited to, the investigation, defense or appeal thereof), if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, had no reasonable cause to believe her conduct was unlawful. SECTION 3. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. Indemnitee shall be entitled to the indemnification rights provided in this Section 3 if Indemnitee is a person who was or is made a party or is threatened to be made a party to any Proceeding brought by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, agent, or fiduciary of any other corporation, partnership, limited liability company, joint venture, trust or other enterprise or entity by reason of anything done or not done by Indemnitee in any such capacity. Pursuant to this Section 3, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees) actually and reasonably incurred by Indemnitee in connection with such Proceeding (including, but not limited to, the investigation, defense, settlement or appeal thereof) if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation. SECTION 4. INDEMNIFICATION FOR COSTS AND EXPENSES OF SUCCESSFUL PARTY. Notwithstanding the other provisions of this Agreement, to the extent that Indemnitee has served as a witness on behalf of the Corporation or has been successful on the merits or otherwise, including, without limitation, the dismissal of a Proceeding without prejudice, in defense of any Proceeding referred to in Sections 2 and 3 hereof, or in defense of any claim, issue or matter therein, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees) actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection therewith. SECTION 5. PARTIAL INDEMNIFICATION. If Indemnitee is only partially successful in the defense, investigation, settlement or appeal of any Proceeding described in Section 2 or 3 hereof, and as a result is not entitled under Section 6 hereof to indemnification by the Corporation for the reasonable costs and expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee, the Corporation shall nevertheless indemnify Indemnitee pursuant to Section 6 hereof to the extent Indemnitee has been partially successful. SECTION 6. DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION. When seeking indemnification under Section 3 or 4 hereof, Indemnitee shall submit a written request for indemnification to the Corporation. Such request shall include documentation or information that is reasonably available to Indemnitee and reasonably necessary for the Corporation to make a determination of Indemnitee's entitlement to indemnification. Determination of Indemnitee's entitlement to indemnification pursuant to this Agreement shall be determined by the following person or persons, who shall be empowered to make such determination: (a) the Board of Directors of the Corporation by a majority vote of a quorum consisting of Disinterested Directors (as defined in Section 7); or (b) if such a quorum is not obtainable or, even if obtainable, if the Board of Directors by the majority vote of Disinterested Directors so directs, by Independent Counsel (as defined in Section 7) in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (c) by the stockholders. Such Independent Counsel shall be 2 selected by the Board of Directors and reasonably acceptable to Indemnitee. Upon failure of the Board to so select such Independent Counsel or upon failure of Indemnitee to so accept, such Independent Counsel shall be selected by the Chancellor of the State of Delaware or such other person as the Chancellor shall designate to make such selection. Such determination of entitlement to indemnification shall be made not later than 60 days after receipt by the Corporation of a written request for indemnification. Any reasonable costs or expenses (including attorneys' fees) incurred by Indemnitee in connection with a request for indemnification under this Agreement shall be borne by the Corporation provided that it is ultimately determined that the Indemnitee is entitled to indemnification. If the person making such determination shall determine that Indemnitee is entitled to indemnification as to part (but not all) of the application for indemnification, such person shall reasonably prorate such partial indemnification among such claims, issues or matters. SECTION 7. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS. The Secretary of the Corporation (or other officer designated by the Board of Directors) shall, promptly upon receipt of Indemnitee's request for indemnification, advise in writing the Board of Directors, or such other person or persons empowered to make the determination as provided in Section 6, that Indemnitee has made such request for indemnification. Upon making such request for indemnification, Indemnitee shall be presumed to be entitled to indemnification hereunder and the Corporation shall have the burden of proof in the making of any determination contrary to such presumption. If the person or persons so empowered to make such determination shall fail to make the requested indemnification within 60 days after receipt by the Corporation of such request, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be absolutely entitled to such indemnification, absent actual and material fraud in the request for indemnification. The termination of any Proceeding described in Sections 2 or 3 hereof by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself: (a) create a presumption that Indemnitee did not act in good faith and in a manner that Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that her conduct was unlawful; or (b) otherwise adversely affect the rights of Indemnitee to indemnification except as may be provided herein. SECTION 8. ADVANCEMENT OF EXPENSES AND COSTS. Subject to the exceptions set forth in Section 10 hereof, all reasonable costs and expenses incurred by Indemnitee (including attorneys' fees, retainers and advances of disbursements required of Indemnitee) in defending a Proceeding shall be paid by the Corporation in advance of the final disposition of such Proceeding at the request of Indemnitee within 20 days after the receipt by the Corporation of a statement or statements from Indemnitee requesting such advance or advances from time to time. Indemnitee's entitlement to such costs and expenses shall include those incurred in connection with any proceeding by Indemnitee seeking an adjudication pursuant to this Agreement. Such statement or statements shall reasonably evidence the costs and expenses incurred by Indemnitee in connection therewith and shall include or be accompanied by a written undertaking by or on behalf of Indemnitee to repay such amount if it is ultimately determined that Indemnitee is not entitled to be indemnified against such costs and expenses by the Corporation as provided by this Agreement or otherwise. SECTION 9. REMEDIES OF INDEMNITEE IN CASES OF DETERMINATION NOT TO INDEMNIFY OR TO ADVANCE EXPENSES. In the event that a determination is made that Indemnitee is not entitled to indemnification hereunder or if payment has not been timely made following a determination of entitlement to indemnification pursuant to Sections 6 and 7, or if expenses are not advanced 3 pursuant to Section 8, Indemnitee shall be entitled to a final adjudication in an appropriate court of the State of Delaware or any other court of competent jurisdiction of Indemnitee's entitlement to such indemnification or advance. Such judicial proceeding shall be made de novo, and Indemnitee shall not be prejudiced in seeking further relief by reason of a determination (if so made) that Indemnitee is not entitled to indemnification. If a determination is made or deemed to have been made pursuant to the terms of Section 6 or Section 7 hereof that Indemnitee is entitled to indemnification, the Corporation shall be bound by such determination and is precluded from asserting that such determination has not been made or that the procedure by which such determination was made is not valid, binding and enforceable. The Corporation further agrees to stipulate in any such proceeding that the Corporation is bound by all the provisions of this Agreement and is precluded from making any assertion to the contrary. If the court shall determine that Indemnitee is entitled to any indemnification hereunder, the Corporation shall pay all reasonable costs and expenses (including attorneys' fees) actually incurred by Indemnitee in connection with such adjudication (including, but not limited to, any appellate proceedings). SECTION 10. EXCEPTIONS AND MODIFICATIONS TO INDEMNIFICATION. (a) Notwithstanding any other provision to the contrary set forth in this Agreement, unless otherwise determined by the Board of Directors by a majority vote of the Disinterested Directors, Indemnitee shall not be entitled to indemnification or advancement of expenses from the Corporation under this Agreement in any of the following circumstances: (i) any Proceeding initiated by or on behalf of Indemnitee against the Corporation (other than a Proceeding brought solely to seek the remedies set forth in Section 9 of this Agreement for a Proceeding not initiated by Indemnitee), or any counterclaim, cross-claim, affirmative defense or similar claim of the Corporation in connection with such Proceeding; or (ii) any Proceeding initiated by the Corporation against Indemnitee. (b) Notwithstanding any other provision to the contrary set forth in this Agreement, in the event that any insurance policy obtained by the Corporation would provide coverage for any liability, cost or expense for which indemnification or advancement of expenses is sought by Indemnitee under this Agreement, the provisions of this Agreement shall be modified to the extent necessary to conform this Agreement to the requirements of such insurance policy so as to provide coverage to the fullest extent possible, including but not limited to any requirement relating to incurring defense costs and retaining legal counsel. SECTION 11. OTHER RIGHTS TO INDEMNIFICATION. The indemnification and advancement of costs and expenses (including attorneys' fees) provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may now or in the future be entitled under any provision of the Corporation's Certificate of Incorporation or By-Laws or any agreement, vote of stockholders or disinterested directors, provision of law or otherwise. SECTION 12. ATTORNEYS' FEES AND OTHER EXPENSES TO ENFORCE AGREEMENT. In the event that Indemnitee is subject to or intervenes in any Proceeding in which the validity or enforceability of this Agreement is at issue or seeks an adjudication to enforce Indemnitee's rights under, or to recover damages for breach of, this Agreement, if Indemnitee prevails in whole or in part in such Proceeding, Indemnitee shall be entitled to recover from the Corporation and shall be indemnified by the Corporation against, any actual expenses for attorneys' fees and disbursements reasonably incurred by Indemnitee. 4 SECTION 13. DURATION OF AGREEMENT. This Agreement shall continue until and terminate upon the later of: (a) ten years after Indemnitee has ceased to hold any of the positions or have any of the relationships described in Sections 2 and 3 of this Agreement; or (b) the final termination of all pending or threatened Proceedings with respect to Indemnitee. This Agreement shall be binding upon the Corporation and its successors and assigns and shall inure to the benefit Indemnitee and Indemnitee's spouse, assigns, heirs, devisees, executors, administrators or other legal representatives. SECTION 14. SEVERABILITY. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. SECTION 15. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. SECTION 16. HEADINGS. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. Section 17. DEFINITIONS AND INTERPRETATIONS. For purposes of this Agreement: (a) The term "Corporation" shall include any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger that, if its separate existence continued, would have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. (b) The term "Disinterested Director" shall mean a director of the Corporation who is not or was not a party to a Proceeding in respect of which indemnification is being sought by Indemnitee. (c) The term "fines" shall include any penalties and any excise or similar taxes assessed on a person with respect to an employee benefit plan. (d) The term "Independent Counsel" shall mean a law firm or a member of a law firm that neither is presently nor in the past five years has been retained to represent: (i) the 5 Corporation or Indemnitee in any matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Corporation or Indemnitee in an Proceeding to determine Indemnitee's right to indemnification under this Agreement. (e) The term "other enterprise" shall include employee benefit plans, including but not limited to any employee benefit plans of the Corporation. (f) The term "Proceeding" shall mean any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative in nature, including any counterclaim. (g) Service by Indemnitee "at the request of the Corporation" shall include, but is not limited to, any service that imposes duties on, or involves services by, Indemnitee with respect to an employee benefit plan, its participants or beneficiaries, including acting as a fiduciary thereof. (h) A person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in Sections 2 and 3 hereof. (i) Service by Indemnitee as a partner, trustee, manager or member of management or similar committee of a partnership, joint venture, trust or limited liability company, or as a director, officer, manager, partner, trustee or manager of an entity that is a partner, trustee, member or joint venturer, shall be considered service as a director or officer of the partnership, joint venture, trust, limited liability company or other enterprise. SECTION 18. MODIFICATION AND WAIVER. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. SECTION 19. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to notify the Corporation in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any matter that may be subject to indemnification covered hereunder, either civil, criminal or investigative. SECTION 20. NOTICES. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed or if (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed: 6 If to Indemnitee, to the address set forth on the signature page to this Agreement. If to the Corporation to: C&D Technologies, Inc. 1400 Union Meeting Road P.O. Box 3053 Blue Bell, PA 19422-0858 Attention: Corporate Secretary or to such other address as may have been furnished to Indemnitee by the Corporation or to the Corporation by Indemnitee, as the case may be. SECTION 21. GOVERNING LAW. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. C&D TECHNOLOGIES, INC. By: /s/ Stephen E. Markert, Jr. -------------------------------- Title: VP-CFO ----------------------------- Pamela S. Lewis ----------------------------------- Name: (please print or type) /s/ Pamela S. Lewis ----------------------------------- Signature Address: [Home address inserted] ----------------------------------- ----------------------------------- 7 EX-10 11 exb10-8.txt Exhibit 10.8 INDEMNIFICATION AGREEMENT INDEMNIFICATION AGREEMENT dated as of November 19, 2002 by and between C&D Technologies, Inc. (the "Corporation"), a Delaware corporation, and George MacKenzie ("Indemnitee"): RECITALS: WHEREAS, highly competent persons are becoming more reluctant to serve publicly held corporations as directors unless they are provided with adequate protection through insurance and indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation; and WHEREAS, the current difficulties in the marketplace generally of obtaining adequate insurance and uncertainties relating to indemnification have increased the difficulty of attracting and retaining such persons; and WHEREAS, the Board of Directors has determined that the inability to attract and retain such persons would be detrimental to the best interests of the Corporation and its stockholders and that the Corporation should act to assure its directors that such protection will be available in the future; and WHEREAS, it is reasonable, prudent and necessary for the Corporation contractually to obligate itself to indemnify its directors to the fullest extent permitted by applicable law, subject only to the limited exceptions contained in this Agreement, so that they will serve or continue to serve the Corporation free from undue concern that they will not be so indemnified. NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Corporation and Indemnitee, intending to be legally bound, hereby covenant and agree as follows: SECTION 1. INDEMNIFICATION. In consideration of Indemnitee's continued service as a director of the Corporation, the Corporation shall indemnify Indemnitee to the fullest extent permitted by applicable law in effect on the date hereof or as such laws may from time to time be amended, subject only to the limited exceptions set forth in this Agreement. Without diminishing the scope of the indemnification provided by this Section 1, the rights of indemnification of Indemnitee provided hereunder shall include but shall not be limited to those rights specified in this Agreement, except to the extent expressly prohibited by applicable law. SECTION 2. PROCEEDINGS OTHER THAN AN ACTION BY OR IN THE RIGHT OF THE CORPORATION. Indemnitee shall be entitled to the indemnification rights provided in this Section 2 if Indemnitee is a party to or is threatened to be made a party to any Proceeding (as defined in Section 7), other than an action by or in the right of the Corporation, by reason of the fact that Indemnitee is or was a director, officer, employee, agent, or fiduciary of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, agent or fiduciary of any other corporation, partnership, limited liability company, joint venture, trust or other enterprise or entity or by reason of anything done or not done by Indemnitee in any such capacity. Pursuant to this Section 2, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with such Proceeding (including, but not limited to, the investigation, defense or appeal thereof), if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful. SECTION 3. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. Indemnitee shall be entitled to the indemnification rights provided in this Section 3 if Indemnitee is a person who was or is made a party or is threatened to be made a party to any Proceeding brought by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, agent, or fiduciary of any other corporation, partnership, limited liability company, joint venture, trust or other enterprise or entity by reason of anything done or not done by Indemnitee in any such capacity. Pursuant to this Section 3, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees) actually and reasonably incurred by Indemnitee in connection with such Proceeding (including, but not limited to, the investigation, defense, settlement or appeal thereof) if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation. SECTION 4. INDEMNIFICATION FOR COSTS AND EXPENSES OF SUCCESSFUL PARTY. Notwithstanding the other provisions of this Agreement, to the extent that Indemnitee has served as a witness on behalf of the Corporation or has been successful on the merits or otherwise, including, without limitation, the dismissal of a Proceeding without prejudice, in defense of any Proceeding referred to in Sections 2 and 3 hereof, or in defense of any claim, issue or matter therein, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees) actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection therewith. SECTION 5. PARTIAL INDEMNIFICATION. If Indemnitee is only partially successful in the defense, investigation, settlement or appeal of any Proceeding described in Section 2 or 3 hereof, and as a result is not entitled under Section 6 hereof to indemnification by the Corporation for the reasonable costs and expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee, the Corporation shall nevertheless indemnify Indemnitee pursuant to Section 6 hereof to the extent Indemnitee has been partially successful. SECTION 6. DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION. When seeking indemnification under Section 3 or 4 hereof, Indemnitee shall submit a written request for indemnification to the Corporation. Such request shall include documentation or information that is reasonably available to Indemnitee and reasonably necessary for the Corporation to make a determination of Indemnitee's entitlement to indemnification. Determination of Indemnitee's entitlement to indemnification pursuant to this Agreement shall be determined by the following person or persons, who shall be empowered to make such determination: (a) the Board of Directors of the Corporation by a majority vote of a quorum consisting of Disinterested Directors (as defined in Section 7); or (b) if such a quorum is not obtainable or, even if obtainable, if the Board of Directors by the majority vote of Disinterested Directors so directs, by Independent Counsel (as defined in Section 7) in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (c) by the stockholders. Such Independent Counsel shall be 2 selected by the Board of Directors and reasonably acceptable to Indemnitee. Upon failure of the Board to so select such Independent Counsel or upon failure of Indemnitee to so accept, such Independent Counsel shall be selected by the Chancellor of the State of Delaware or such other person as the Chancellor shall designate to make such selection. Such determination of entitlement to indemnification shall be made not later than 60 days after receipt by the Corporation of a written request for indemnification. Any reasonable costs or expenses (including attorneys' fees) incurred by Indemnitee in connection with a request for indemnification under this Agreement shall be borne by the Corporation provided that it is ultimately determined that the Indemnitee is entitled to indemnification. If the person making such determination shall determine that Indemnitee is entitled to indemnification as to part (but not all) of the application for indemnification, such person shall reasonably prorate such partial indemnification among such claims, issues or matters. SECTION 7. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS. The Secretary of the Corporation (or other officer designated by the Board of Directors) shall, promptly upon receipt of Indemnitee's request for indemnification, advise in writing the Board of Directors, or such other person or persons empowered to make the determination as provided in Section 6, that Indemnitee has made such request for indemnification. Upon making such request for indemnification, Indemnitee shall be presumed to be entitled to indemnification hereunder and the Corporation shall have the burden of proof in the making of any determination contrary to such presumption. If the person or persons so empowered to make such determination shall fail to make the requested indemnification within 60 days after receipt by the Corporation of such request, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be absolutely entitled to such indemnification, absent actual and material fraud in the request for indemnification. The termination of any Proceeding described in Sections 2 or 3 hereof by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself: (a) create a presumption that Indemnitee did not act in good faith and in a manner that Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful; or (b) otherwise adversely affect the rights of Indemnitee to indemnification except as may be provided herein. SECTION 8. ADVANCEMENT OF EXPENSES AND COSTS. Subject to the exceptions set forth in Section 10 hereof, all reasonable costs and expenses incurred by Indemnitee (including attorneys' fees, retainers and advances of disbursements required of Indemnitee) in defending a Proceeding shall be paid by the Corporation in advance of the final disposition of such Proceeding at the request of Indemnitee within 20 days after the receipt by the Corporation of a statement or statements from Indemnitee requesting such advance or advances from time to time. Indemnitee's entitlement to such costs and expenses shall include those incurred in connection with any proceeding by Indemnitee seeking an adjudication pursuant to this Agreement. Such statement or statements shall reasonably evidence the costs and expenses incurred by Indemnitee in connection therewith and shall include or be accompanied by a written undertaking by or on behalf of Indemnitee to repay such amount if it is ultimately determined that Indemnitee is not entitled to be indemnified against such costs and expenses by the Corporation as provided by this Agreement or otherwise. SECTION 9. REMEDIES OF INDEMNITEE IN CASES OF DETERMINATION NOT TO INDEMNIFY OR TO ADVANCE EXPENSES. In the event that a determination is made that Indemnitee is not entitled to indemnification hereunder or if payment has not been timely made following a determination of entitlement to indemnification pursuant to Sections 6 and 7, or if expenses are not advanced 3 pursuant to Section 8, Indemnitee shall be entitled to a final adjudication in an appropriate court of the State of Delaware or any other court of competent jurisdiction of Indemnitee's entitlement to such indemnification or advance. Such judicial proceeding shall be made de novo, and Indemnitee shall not be prejudiced in seeking further relief by reason of a determination (if so made) that Indemnitee is not entitled to indemnification. If a determination is made or deemed to have been made pursuant to the terms of Section 6 or Section 7 hereof that Indemnitee is entitled to indemnification, the Corporation shall be bound by such determination and is precluded from asserting that such determination has not been made or that the procedure by which such determination was made is not valid, binding and enforceable. The Corporation further agrees to stipulate in any such proceeding that the Corporation is bound by all the provisions of this Agreement and is precluded from making any assertion to the contrary. If the court shall determine that Indemnitee is entitled to any indemnification hereunder, the Corporation shall pay all reasonable costs and expenses (including attorneys' fees) actually incurred by Indemnitee in connection with such adjudication (including, but not limited to, any appellate proceedings). SECTION 10. EXCEPTIONS AND MODIFICATIONS TO INDEMNIFICATION. (a) Notwithstanding any other provision to the contrary set forth in this Agreement, unless otherwise determined by the Board of Directors by a majority vote of the Disinterested Directors, Indemnitee shall not be entitled to indemnification or advancement of expenses from the Corporation under this Agreement in any of the following circumstances: (i) any Proceeding initiated by or on behalf of Indemnitee against the Corporation (other than a Proceeding brought solely to seek the remedies set forth in Section 9 of this Agreement for a Proceeding not initiated by Indemnitee), or any counterclaim, cross-claim, affirmative defense or similar claim of the Corporation in connection with such Proceeding; or (ii) any Proceeding initiated by the Corporation against Indemnitee. (b) Notwithstanding any other provision to the contrary set forth in this Agreement, in the event that any insurance policy obtained by the Corporation would provide coverage for any liability, cost or expense for which indemnification or advancement of expenses is sought by Indemnitee under this Agreement, the provisions of this Agreement shall be modified to the extent necessary to conform this Agreement to the requirements of such insurance policy so as to provide coverage to the fullest extent possible, including but not limited to any requirement relating to incurring defense costs and retaining legal counsel. SECTION 11. OTHER RIGHTS TO INDEMNIFICATION. The indemnification and advancement of costs and expenses (including attorneys' fees) provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may now or in the future be entitled under any provision of the Corporation's Certificate of Incorporation or By-Laws or any agreement, vote of stockholders or disinterested directors, provision of law or otherwise. SECTION 12. ATTORNEYS' FEES AND OTHER EXPENSES TO ENFORCE AGREEMENT. In the event that Indemnitee is subject to or intervenes in any Proceeding in which the validity or enforceability of this Agreement is at issue or seeks an adjudication to enforce Indemnitee's rights under, or to recover damages for breach of, this Agreement, if Indemnitee prevails in whole or in part in such Proceeding, Indemnitee shall be entitled to recover from the Corporation and shall be indemnified by the Corporation against, any actual expenses for attorneys' fees and disbursements reasonably incurred by Indemnitee. 4 SECTION 13. DURATION OF AGREEMENT. This Agreement shall continue until and terminate upon the later of: (a) ten years after Indemnitee has ceased to hold any of the positions or have any of the relationships described in Sections 2 and 3 of this Agreement; or (b) the final termination of all pending or threatened Proceedings with respect to Indemnitee. This Agreement shall be binding upon the Corporation and its successors and assigns and shall inure to the benefit Indemnitee and Indemnitee's spouse, assigns, heirs, devisees, executors, administrators or other legal representatives. SECTION 14. SEVERABILITY. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. SECTION 15. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. SECTION 16. HEADINGS. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. Section 17. DEFINITIONS AND INTERPRETATIONS. For purposes of this Agreement: (a) The term "Corporation" shall include any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger that, if its separate existence continued, would have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. (b) The term "Disinterested Director" shall mean a director of the Corporation who is not or was not a party to a Proceeding in respect of which indemnification is being sought by Indemnitee. (c) The term "fines" shall include any penalties and any excise or similar taxes assessed on a person with respect to an employee benefit plan. (d) The term "Independent Counsel" shall mean a law firm or a member of a law firm that neither is presently nor in the past five years has been retained to represent: (i) the 5 Corporation or Indemnitee in any matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Corporation or Indemnitee in an Proceeding to determine Indemnitee's right to indemnification under this Agreement. (e) The term "other enterprise" shall include employee benefit plans, including but not limited to any employee benefit plans of the Corporation. (f) The term "Proceeding" shall mean any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative in nature, including any counterclaim. (g) Service by Indemnitee "at the request of the Corporation" shall include, but is not limited to, any service that imposes duties on, or involves services by, Indemnitee with respect to an employee benefit plan, its participants or beneficiaries, including acting as a fiduciary thereof. (h) A person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in Sections 2 and 3 hereof. (i) Service by Indemnitee as a partner, trustee, manager or member of management or similar committee of a partnership, joint venture, trust or limited liability company, or as a director, officer, manager, partner, trustee or manager of an entity that is a partner, trustee, member or joint venturer, shall be considered service as a director or officer of the partnership, joint venture, trust, limited liability company or other enterprise. SECTION 18. MODIFICATION AND WAIVER. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. SECTION 19. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to notify the Corporation in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any matter that may be subject to indemnification covered hereunder, either civil, criminal or investigative. SECTION 20. NOTICES. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed or if (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed: 6 If to Indemnitee, to the address set forth on the signature page to this Agreement. If to the Corporation to: C&D Technologies, Inc. 1400 Union Meeting Road P.O. Box 3053 Blue Bell, PA 19422-0858 Attention: Corporate Secretary or to such other address as may have been furnished to Indemnitee by the Corporation or to the Corporation by Indemnitee, as the case may be. SECTION 21. GOVERNING LAW. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. C&D TECHNOLOGIES, INC. By: /s/ Stephen E. Markert, Jr. -------------------------------- Title: VP-CFO ----------------------------- George MacKenzie ----------------------------------- Name: (please print or type) /s/ G. MacKenzie ----------------------------------- Signature Address: [Home address inserted] ----------------------------------- ----------------------------------- 7 EX-10 12 exb10-9.txt Exhibit 10.9 INDEMNIFICATION AGREEMENT INDEMNIFICATION AGREEMENT dated as of November 19, 2002 by and between C&D Technologies, Inc. (the "Corporation"), a Delaware corporation, and John A.H. Shober ("Indemnitee"): RECITALS: WHEREAS, highly competent persons are becoming more reluctant to serve publicly held corporations as directors unless they are provided with adequate protection through insurance and indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation; and WHEREAS, the current difficulties in the marketplace generally of obtaining adequate insurance and uncertainties relating to indemnification have increased the difficulty of attracting and retaining such persons; and WHEREAS, the Board of Directors has determined that the inability to attract and retain such persons would be detrimental to the best interests of the Corporation and its stockholders and that the Corporation should act to assure its directors that such protection will be available in the future; and WHEREAS, it is reasonable, prudent and necessary for the Corporation contractually to obligate itself to indemnify its directors to the fullest extent permitted by applicable law, subject only to the limited exceptions contained in this Agreement, so that they will serve or continue to serve the Corporation free from undue concern that they will not be so indemnified. NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Corporation and Indemnitee, intending to be legally bound, hereby covenant and agree as follows: SECTION 1. INDEMNIFICATION. In consideration of Indemnitee's continued service as a director of the Corporation, the Corporation shall indemnify Indemnitee to the fullest extent permitted by applicable law in effect on the date hereof or as such laws may from time to time be amended, subject only to the limited exceptions set forth in this Agreement. Without diminishing the scope of the indemnification provided by this Section 1, the rights of indemnification of Indemnitee provided hereunder shall include but shall not be limited to those rights specified in this Agreement, except to the extent expressly prohibited by applicable law. SECTION 2. PROCEEDINGS OTHER THAN AN ACTION BY OR IN THE RIGHT OF THE CORPORATION. Indemnitee shall be entitled to the indemnification rights provided in this Section 2 if Indemnitee is a party to or is threatened to be made a party to any Proceeding (as defined in Section 7), other than an action by or in the right of the Corporation, by reason of the fact that Indemnitee is or was a director, officer, employee, agent, or fiduciary of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, agent or fiduciary of any other corporation, partnership, limited liability company, joint venture, trust or other enterprise or entity or by reason of anything done or not done by Indemnitee in any such capacity. Pursuant to this Section 2, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with such Proceeding (including, but not limited to, the investigation, defense or appeal thereof), if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful. SECTION 3. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. Indemnitee shall be entitled to the indemnification rights provided in this Section 3 if Indemnitee is a person who was or is made a party or is threatened to be made a party to any Proceeding brought by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, agent, or fiduciary of any other corporation, partnership, limited liability company, joint venture, trust or other enterprise or entity by reason of anything done or not done by Indemnitee in any such capacity. Pursuant to this Section 3, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees) actually and reasonably incurred by Indemnitee in connection with such Proceeding (including, but not limited to, the investigation, defense, settlement or appeal thereof) if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation. SECTION 4. INDEMNIFICATION FOR COSTS AND EXPENSES OF SUCCESSFUL PARTY. Notwithstanding the other provisions of this Agreement, to the extent that Indemnitee has served as a witness on behalf of the Corporation or has been successful on the merits or otherwise, including, without limitation, the dismissal of a Proceeding without prejudice, in defense of any Proceeding referred to in Sections 2 and 3 hereof, or in defense of any claim, issue or matter therein, Indemnitee shall be indemnified against reasonable costs and expenses (including attorneys' fees) actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection therewith. SECTION 5. PARTIAL INDEMNIFICATION. If Indemnitee is only partially successful in the defense, investigation, settlement or appeal of any Proceeding described in Section 2 or 3 hereof, and as a result is not entitled under Section 6 hereof to indemnification by the Corporation for the reasonable costs and expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee, the Corporation shall nevertheless indemnify Indemnitee pursuant to Section 6 hereof to the extent Indemnitee has been partially successful. SECTION 6. DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION. When seeking indemnification under Section 3 or 4 hereof, Indemnitee shall submit a written request for indemnification to the Corporation. Such request shall include documentation or information that is reasonably available to Indemnitee and reasonably necessary for the Corporation to make a determination of Indemnitee's entitlement to indemnification. Determination of Indemnitee's entitlement to indemnification pursuant to this Agreement shall be determined by the following person or persons, who shall be empowered to make such determination: (a) the Board of Directors of the Corporation by a majority vote of a quorum consisting of Disinterested Directors (as defined in Section 7); or (b) if such a quorum is not obtainable or, even if obtainable, if the Board of Directors by the majority vote of Disinterested Directors so directs, by Independent Counsel (as defined in Section 7) in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (c) by the stockholders. Such Independent Counsel shall be 2 selected by the Board of Directors and reasonably acceptable to Indemnitee. Upon failure of the Board to so select such Independent Counsel or upon failure of Indemnitee to so accept, such Independent Counsel shall be selected by the Chancellor of the State of Delaware or such other person as the Chancellor shall designate to make such selection. Such determination of entitlement to indemnification shall be made not later than 60 days after receipt by the Corporation of a written request for indemnification. Any reasonable costs or expenses (including attorneys' fees) incurred by Indemnitee in connection with a request for indemnification under this Agreement shall be borne by the Corporation provided that it is ultimately determined that the Indemnitee is entitled to indemnification. If the person making such determination shall determine that Indemnitee is entitled to indemnification as to part (but not all) of the application for indemnification, such person shall reasonably prorate such partial indemnification among such claims, issues or matters. SECTION 7. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS. The Secretary of the Corporation (or other officer designated by the Board of Directors) shall, promptly upon receipt of Indemnitee's request for indemnification, advise in writing the Board of Directors, or such other person or persons empowered to make the determination as provided in Section 6, that Indemnitee has made such request for indemnification. Upon making such request for indemnification, Indemnitee shall be presumed to be entitled to indemnification hereunder and the Corporation shall have the burden of proof in the making of any determination contrary to such presumption. If the person or persons so empowered to make such determination shall fail to make the requested indemnification within 60 days after receipt by the Corporation of such request, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be absolutely entitled to such indemnification, absent actual and material fraud in the request for indemnification. The termination of any Proceeding described in Sections 2 or 3 hereof by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself: (a) create a presumption that Indemnitee did not act in good faith and in a manner that Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful; or (b) otherwise adversely affect the rights of Indemnitee to indemnification except as may be provided herein. SECTION 8. ADVANCEMENT OF EXPENSES AND COSTS. Subject to the exceptions set forth in Section 10 hereof, all reasonable costs and expenses incurred by Indemnitee (including attorneys' fees, retainers and advances of disbursements required of Indemnitee) in defending a Proceeding shall be paid by the Corporation in advance of the final disposition of such Proceeding at the request of Indemnitee within 20 days after the receipt by the Corporation of a statement or statements from Indemnitee requesting such advance or advances from time to time. Indemnitee's entitlement to such costs and expenses shall include those incurred in connection with any proceeding by Indemnitee seeking an adjudication pursuant to this Agreement. Such statement or statements shall reasonably evidence the costs and expenses incurred by Indemnitee in connection therewith and shall include or be accompanied by a written undertaking by or on behalf of Indemnitee to repay such amount if it is ultimately determined that Indemnitee is not entitled to be indemnified against such costs and expenses by the Corporation as provided by this Agreement or otherwise. SECTION 9. REMEDIES OF INDEMNITEE IN CASES OF DETERMINATION NOT TO INDEMNIFY OR TO ADVANCE EXPENSES. In the event that a determination is made that Indemnitee is not entitled to indemnification hereunder or if payment has not been timely made following a determination of entitlement to indemnification pursuant to Sections 6 and 7, or if expenses are not advanced 3 pursuant to Section 8, Indemnitee shall be entitled to a final adjudication in an appropriate court of the State of Delaware or any other court of competent jurisdiction of Indemnitee's entitlement to such indemnification or advance. Such judicial proceeding shall be made de novo, and Indemnitee shall not be prejudiced in seeking further relief by reason of a determination (if so made) that Indemnitee is not entitled to indemnification. If a determination is made or deemed to have been made pursuant to the terms of Section 6 or Section 7 hereof that Indemnitee is entitled to indemnification, the Corporation shall be bound by such determination and is precluded from asserting that such determination has not been made or that the procedure by which such determination was made is not valid, binding and enforceable. The Corporation further agrees to stipulate in any such proceeding that the Corporation is bound by all the provisions of this Agreement and is precluded from making any assertion to the contrary. If the court shall determine that Indemnitee is entitled to any indemnification hereunder, the Corporation shall pay all reasonable costs and expenses (including attorneys' fees) actually incurred by Indemnitee in connection with such adjudication (including, but not limited to, any appellate proceedings). SECTION 10. EXCEPTIONS AND MODIFICATIONS TO INDEMNIFICATION. (a) Notwithstanding any other provision to the contrary set forth in this Agreement, unless otherwise determined by the Board of Directors by a majority vote of the Disinterested Directors, Indemnitee shall not be entitled to indemnification or advancement of expenses from the Corporation under this Agreement in any of the following circumstances: (i) any Proceeding initiated by or on behalf of Indemnitee against the Corporation (other than a Proceeding brought solely to seek the remedies set forth in Section 9 of this Agreement for a Proceeding not initiated by Indemnitee), or any counterclaim, cross-claim, affirmative defense or similar claim of the Corporation in connection with such Proceeding; or (ii) any Proceeding initiated by the Corporation against Indemnitee. (b) Notwithstanding any other provision to the contrary set forth in this Agreement, in the event that any insurance policy obtained by the Corporation would provide coverage for any liability, cost or expense for which indemnification or advancement of expenses is sought by Indemnitee under this Agreement, the provisions of this Agreement shall be modified to the extent necessary to conform this Agreement to the requirements of such insurance policy so as to provide coverage to the fullest extent possible, including but not limited to any requirement relating to incurring defense costs and retaining legal counsel. SECTION 11. OTHER RIGHTS TO INDEMNIFICATION. The indemnification and advancement of costs and expenses (including attorneys' fees) provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may now or in the future be entitled under any provision of the Corporation's Certificate of Incorporation or By-Laws or any agreement, vote of stockholders or disinterested directors, provision of law or otherwise. SECTION 12. ATTORNEYS' FEES AND OTHER EXPENSES TO ENFORCE AGREEMENT. In the event that Indemnitee is subject to or intervenes in any Proceeding in which the validity or enforceability of this Agreement is at issue or seeks an adjudication to enforce Indemnitee's rights under, or to recover damages for breach of, this Agreement, if Indemnitee prevails in whole or in part in such Proceeding, Indemnitee shall be entitled to recover from the Corporation and shall be indemnified by the Corporation against, any actual expenses for attorneys' fees and disbursements reasonably incurred by Indemnitee. 4 SECTION 13. DURATION OF AGREEMENT. This Agreement shall continue until and terminate upon the later of: (a) ten years after Indemnitee has ceased to hold any of the positions or have any of the relationships described in Sections 2 and 3 of this Agreement; or (b) the final termination of all pending or threatened Proceedings with respect to Indemnitee. This Agreement shall be binding upon the Corporation and its successors and assigns and shall inure to the benefit Indemnitee and Indemnitee's spouse, assigns, heirs, devisees, executors, administrators or other legal representatives. SECTION 14. SEVERABILITY. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. SECTION 15. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. SECTION 16. HEADINGS. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. Section 17. DEFINITIONS AND INTERPRETATIONS. For purposes of this Agreement: (a) The term "Corporation" shall include any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger that, if its separate existence continued, would have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. (b) The term "Disinterested Director" shall mean a director of the Corporation who is not or was not a party to a Proceeding in respect of which indemnification is being sought by Indemnitee. (c) The term "fines" shall include any penalties and any excise or similar taxes assessed on a person with respect to an employee benefit plan. (d) The term "Independent Counsel" shall mean a law firm or a member of a law firm that neither is presently nor in the past five years has been retained to represent: (i) the 5 Corporation or Indemnitee in any matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Corporation or Indemnitee in an Proceeding to determine Indemnitee's right to indemnification under this Agreement. (e) The term "other enterprise" shall include employee benefit plans, including but not limited to any employee benefit plans of the Corporation. (f) The term "Proceeding" shall mean any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative in nature, including any counterclaim. (g) Service by Indemnitee "at the request of the Corporation" shall include, but is not limited to, any service that imposes duties on, or involves services by, Indemnitee with respect to an employee benefit plan, its participants or beneficiaries, including acting as a fiduciary thereof. (h) A person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in Sections 2 and 3 hereof. (i) Service by Indemnitee as a partner, trustee, manager or member of management or similar committee of a partnership, joint venture, trust or limited liability company, or as a director, officer, manager, partner, trustee or manager of an entity that is a partner, trustee, member or joint venturer, shall be considered service as a director or officer of the partnership, joint venture, trust, limited liability company or other enterprise. SECTION 18. MODIFICATION AND WAIVER. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. SECTION 19. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to notify the Corporation in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any matter that may be subject to indemnification covered hereunder, either civil, criminal or investigative. SECTION 20. NOTICES. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed or if (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed: 6 If to Indemnitee, to the address set forth on the signature page to this Agreement. If to the Corporation to: C&D Technologies, Inc. 1400 Union Meeting Road P.O. Box 3053 Blue Bell, PA 19422-0858 Attention: Corporate Secretary or to such other address as may have been furnished to Indemnitee by the Corporation or to the Corporation by Indemnitee, as the case may be. SECTION 21. GOVERNING LAW. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. C&D TECHNOLOGIES, INC. By: /s/ Stephen E. Markert, Jr. -------------------------------- Title: VP-CFO ----------------------------- John A.H. Shober ----------------------------------- Name: (please print or type) /s/ John A.H. Shober ----------------------------------- Signature Address: [Home address inserted] ----------------------------------- ----------------------------------- 7 EX-10 13 exb10-10.txt Exhibit 10.10 FIRST AMENDMENT TO THE C&D TECHNOLOGIES SAVINGS PLAN THIS FIRST AMENDMENT is made on June 12, 2002, by C&D Technologies, Inc., a corporation duly organized and existing under the laws of the State of Delaware (the "Company"). W I T N E S S E T H: WHEREAS, the Company maintains the C&D Technologies Savings Plan (the "Plan"), which was originally established by indenture dated February 1, 1986, and last amended and restated by indenture on February 13, 2002; and WHEREAS, the Company desires to amend the Plan to correct inadvertent scrivener's errors and as requested by the Internal Revenue Service as part of the determination letter application process. NOW, THEREFORE, the Plan is hereby amended as follows: 1. Effective as of January 1, 1997, by deleting the existing Section 1.16 and substituting therefor the following: "1.16 'ELIGIBLE EMPLOYEE' means any Employee of a Plan Sponsor, including salaried and hourly Employees, other than an Employee who is (a) covered by a collective bargaining agreement between a union and a Plan Sponsor, provided that retirement benefits were the subject of good faith bargaining, unless the collective bargaining agreement provides for participation in the Plan; (b) a Leased Employee; (c) deemed to be an Employee of a Plan Sponsor pursuant to regulations under Code Section 414(o); or (d) a non-resident alien (within the meaning of Code Section 7701(b)(1)(B)) who received no earned income (within the meaning of Code Section 911(d)(2)) from a Plan Sponsor which constitutes income from sources within the United States (within the meaning of Code Section 861(a)(d)(3)). In addition, no person who is initially classified by a Plan Sponsor as an independent contractor for federal income tax purposes shall be regarded as an Eligible Employee for that period, regardless of any subsequent determination that any such person should have been characterized as a common law employee of the Plan Sponsor for the period in question." 2. Effective as of January 1, 1997, by deleting the existing Section 1.19 and substituting therefor the following: "1.19 'EMPLOYEE' means any person who is (a) a common law employee of a Plan Sponsor or an Affiliate, (b) a Leased Employee with respect to a Plan Sponsor, or (c) deemed to be an employee of a Plan Sponsor pursuant to regulations under Code Section 414(o). 3. Effective as of January 1, 1997, by adding the following new Section 1.27A: "1.27A 'Leased Employee' means an Employee (other than a common law employee of the Plan Sponsor or an Affiliate) who, pursuant to an agreement between the Plan Sponsor or an Affiliate and any other person, has performed services for the Plan Sponsor or an Affiliate (or for the Plan Sponsor and related persons determined in accordance with Code Section 414(n)(6)), on a substantially full-time basis for a period of at least one year, and such services are performed under the primary direction or control of the Plan Sponsor or an Affiliate." 4. Effective as of January 1, 2001, by redesignating the existing Section 3.1(a) as Section 3.1(b) and adding the following new Section 3.1(a): "(a) Prior to January 1, 2001, the Plan Sponsor shall make a contribution to the Fund on behalf of each Eligible Employee who is a Participant and who has elected to defer a portion of Annual Compensation otherwise payable to him for the Plan Year and to have such portion contributed to the Fund. The election must be made before the Annual Compensation is payable and may only be made pursuant to an agreement between the Participant and the Plan Sponsor which shall be in such form and manner and subject to such rules and limitations as the Plan Administrator may prescribe and shall specify the percentage of Annual Compensation that the Participant desires to defer and have contributed to the Fund. The contribution made by a Plan Sponsor on behalf of a Participant under this Section 3.1(a) shall be in an amount equal to the amount specified in the Participant's deferral agreement but not less than one percent (1%) nor greater than fifteen percent (15%) of the Participant's Annual Compensation. Once a Participant has made an election for a Plan Year, the Participant may increase or reduce the rate of future deferrals in accordance with the administrative procedures provided by the Plan Administrator. Pursuant to Section 4 of Appendix C, the Plan Administrator may restrict the amount which Highly Compensated Employees may defer under this Section 3.1" 5. The redesignated Section 3.1(b) shall be effective as of January 1, 2001. 6. Section 1(a) of Appendix A to the Plan shall be effective for limitation years beginning on or after January 1, 1995. 7. Effective as of January 1, 1997, by deleting the existing Sections 2(a) and (b) of Appendix C and substituting therefore the following: "(a) the actual deferral percentage for the Highly Compensated Eligible Participants for the Plan Year must not be more than the actual deferral percentage of all other Eligible Participants for the Plan Year multiplied by 1.25; or -2- (b) the excess of the actual deferral percentage for the Highly Compensated Eligible Participants for the Plan Year over that of all other Eligible Participants for the Plan Year must not be more than two (2) percentage points, and the actual deferral percentage for the Highly Compensated Eligible Participants for the Plan Year must not be more than the actual deferral percentage of all other Eligible Participants for the Plan Year multiplied by two (2)." 8. Effective as of January 1, 1997, by deleting Sections 5(a) and (b) of the Appendix C and substituting therefor the following: "(a) the contribution percentage for the Highly Compensated Eligible Participants for the Plan Year must not exceed 125% of the contribution percentage for all other Eligible Participants for the Plan Year; or (b) the contribution percentage for Highly Compensated Eligible Participants for the Plan Year must not exceed the lesser of (1) 200% of the contribution percentage for all other Eligible Participants for the Plan Year, and (2) the contribution percentage for all other Eligible Participants for the Plan Year plus two (2) percentage points." Except as specifically amended hereby, the Plan shall remain in full force and effect as prior to this First Amendment. IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be executed as of the day and year first above written. C & D TECHNOLOGIES, INC. By: /s/ Linda R. Hansen -------------------------------------- Title: Vice President ----------------------------------- -3- EX-10 14 exb10-11.txt Exhibit 10.11 SECOND AMENDMENT TO THE C&D TECHNOLOGIES SAVINGS PLAN THIS SECOND AMENDMENT is made on November 20, 2002, by C&D TECHNOLOGIES, INC., a corporation duly organized and existing under the laws of the State of Delaware (the "Company"). W I T N E S S E T H: WHEREAS, the Company maintains the C&D Technologies Savings Plan (the "Plan"), which was originally established by indenture dated February 1, 1986, and was last amended and restated by indenture dated February 13, 2002; WHEREAS, the Company desires to amend the Plan to reflect certain provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"); WHEREAS, the relevant provisions of this amendment are intended as good faith compliance with the requirements of EGTRRA and are to be construed in accordance with EGTRRA and any guidance issued thereunder; and WHEREAS, this amendment shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions of this amendment. NOW, THEREFORE, effective as of January 1, 2002, except where otherwise provided herein, the Plan is hereby amended as follows: 1. By deleting Section 1.5 in its entirety and substituting therefor the following: "1.5 'ANNUAL COMPENSATION LIMIT' means $200,000, which amount may be adjusted in subsequent Plan Years based on changes in the cost of living as announced by the Secretary of Treasury." 2. By adding the following new Section 1.5A: "1.5A 'APPEALS FIDUCIARY' means an individual or group of individuals appointed to review appeals of claims for benefits payable due to a Participant's Disability made pursuant to Section 13.4." 3. By deleting the existing Section 1.13 and substituting therefor the following: "1.13 'DISABILITY' means a disability of a Participant within the meaning of Code Section 72(m)(7), to the extent that the Participant is, or would be, entitled to disability retirement benefits under the federal Social Security Act. The determination of whether or not a Disability exists shall be determined by the Plan Administrator and shall be substantiated by competent medical evidence." 4. By deleting the existing Section 1.17 and substituting therefor the following: "1.17 'ELIGIBLE RETIREMENT PLAN' means (a) an individual retirement account described in Code Section 408(a); (b) an individual retirement annuity described in Code Section 408(b); (c) an annuity plan described in Code Section 403(a) or an annuity contract described in Code Section 403(b); (d) a qualified trust described in Code Section 401(a) that accepts the Distributee's Eligible Rollover Distribution; or (e) an eligible deferred compensation plan under Code Section 457(b) which is maintained by a state, political subdivision and which agrees to separately account for amounts transferred into such plan from this Plan." 5. By deleting the existing Section 1.28 and substituting therefor the following: "1.28 'NAMED FIDUCIARY' means only the following: (a) the Plan Administrator; (b) the Trustee; (c) the Investment Manager; (d) the Pension Committee; and (e) the Appeals Fiduciary." 6. By deleting the existing Section 1.37 and substituting therefor the following: "1.37 'ROLLOVER AMOUNT' means any amount transferred to the Fund by a Participant, which amount qualifies as an Eligible Rollover Distribution under Code Section 402(c)(4), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16), and any regulations issued thereunder." 7. By deleting the existing Section 1.41 and substituting therefor the following: "1.41 'TERMINATION OF EMPLOYMENT' means a severance from employment (within the meaning of Code Section 401(k)(2)(B)(i)(I)) of an Employee from all Plan Sponsors and Affiliates for any reason other than death, Disability, or attainment of a Retirement Date. Any absence from active employment of the Plan Sponsor and Affiliates by reason of an approved leave of absence shall not be deemed for any purpose under the Plan to be a Termination of Employment. Transfer of an Employee from one Plan Sponsor to another Plan Sponsor or to an Affiliate shall not be deemed for any purpose under the Plan to be a Termination of Employment. In addition, transfer of an Employee to another employer (other than a Plan Sponsor or an Affiliate) in connection with a corporate transaction involving a sale of assets, merger, or sale of stock, shall not be deemed to be a Termination of Employment, for purposes of the timing of distributions under Section 8.1, if the employer to which such Employee is transferred agrees with the Plan Sponsor to accept a transfer of assets from the Plan to its tax-qualified plan in a trust-to-trust transfer meeting the requirements of Code Section 414(l)." -2- 8. By deleting the existing Sections 3.1(b) and 3.1(c) and substituting therefor the following: "(b) DEFERRAL AMOUNTS. The Plan Sponsor shall make a contribution to the Fund on behalf of each Participant who is an Eligible Employee and who either is deemed to have elected pursuant to this Section 3.1(b)(1) or has affirmatively elected pursuant to this Section 3.1(b)(2) to defer a portion of his Annual Compensation otherwise payable to him for the Plan Year and to have such portion contributed to the Fund. (1) Any Eligible Employee who has completed the eligibility requirements of Section 2 and who fails to make an affirmative election pursuant to Plan Section 3.1(b)(2) shall be deemed to have made an election to contribute three percent (3%) of the Eligible Employee's Annual Compensation to the Plan unless the Eligible Employee elects not to defer any portion of his Annual Compensation pursuant to Section 3.1. If an Eligible Employee makes the election under this Section 3.1(b)(1) not to contribute to the Plan, the Eligible Employee may later elect to contribute to the Plan pursuant to Section 3.1(b)(2). (2) Except to the extent permitted under Section 3.1(d) and Code Section 414(v), the contribution made by a Plan Sponsor on behalf of a Participant under this Section 3.1(b)(2) shall be in an amount equal to the amount specified in the Participant's deferral election, but not greater than fifty percent (50%) of the Participant's Annual Compensation, or if the Participant is automatically enrolled pursuant to Plan Section 3.1(a)(1), the contribution shall be three percent (3%) of the Participant's Annual Compensation. Pursuant to Section 4 of Appendix C, the Plan Administrator may restrict the amount which Highly Compensated Employees may defer under this Section 3.1(b). (c) Limit on Deferral Amounts. Except to the extent permitted under Section 3.1(d) and Code Section 414(v), Elective Deferrals shall in no event exceed the limit set forth in Code Section 402(g) in any one taxable year of the Participant. In the event the amount of Elective Deferrals exceeds the Code Section 402(g) limit in any one taxable year then, (1) not later than the immediately following March 1, the Participant may designate to the Plan the portion of the Participant's Deferral Amounts which consists of excess Elective Deferrals, and (2) not later than the immediately following April 15, the Plan may distribute the amount designated to it under Paragraph (1) above, as adjusted to reflect income, gain, or loss attributable to it through the end of the Plan Year, and reduced by any `Excess Deferral Amounts,' as defined in Appendix C hereto, previously distributed or recharacterized with respect to the Participant for the Plan Year beginning with or within that taxable year. -3- The payment of the excess Elective Deferrals, as adjusted and reduced, from the Plan shall be made to the Participant without regard to any other provision in the Plan. In the event that a Participant's Elective Deferrals exceed the Code Section 402(g) limit in any one taxable year under the Plan and other plans of the Plan Sponsor and its Affiliates, the Participant shall be deemed to have designated for distribution under the Plan the amount of excess Elective Deferrals, as adjusted and reduced, by taking into account only Elective Deferral amounts under the Plan and other plans of the Plan Sponsor and its Affiliates. (d) CATCH-UP CONTRIBUTIONS. A Participant who is eligible to contribute Deferral Amounts to the Plan and who has attained age 50 on or before the last day of the Plan Year shall be eligible to elect to have a portion of his Annual Compensation otherwise payable to him for the Plan Year contributed by the Plan Sponsor to the Fund on his behalf as catch-up contributions in accordance with and subject to the limitations of, Code Section 414(v). Contributions made pursuant to this Section 3.1(d) shall not be taken into account for purposes of implementing the limitations set forth in Section 3.1(b), 3.1(c) and Appendix A hereto. The Plan shall not be treated as failing to satisfy the provisions of Appendix B, Appendix C or Code Section 410(b), as applicable, by reason of the making of the catch-up contributions as described in this Section 3.1(d). (e) ALLOCATION OF CONTRIBUTIONS. Contributions made pursuant to this Section 3.1 shall be allocated to the Employee Deferral Account of the Participant on whose behalf they were made as soon as reasonably practicable following the date of withholding by the Plan Sponsor and receipt by the Trustee. (f) DEFERRAL ELECTIONS. The elections under this Section 3.1 must be made before the Annual Compensation is payable and may only be made in such manner and subject to such rules and limitations as the Plan Administrator may prescribe and shall specify the percentage or dollar amount, as applicable, of Annual Compensation that the Participant desires to defer pursuant to Section 3.1(b) and/or 3.1(d) and to have contributed to the Fund. Once a Participant has made an election for a Plan Year, the Participant may revoke or modify his election to increase or reduce the rate of future deferrals, as provided in the administrative procedures established by the Plan Administrator." 9. By deleting the existing Section 3.2(a) and substituting therefor the following: "(a) The Plan Sponsor proposes to make contributions to the Matching Account for each Plan Year of each Participant who is an Eligible Employee compensated by a Plan Sponsor on a salaried basis or employed in the Power Electronics Division and who is entitled to an allocation under Plan Section 4.1(a) in an amount equal to a percentage, to be determined by the Plan Sponsor, of the Participant's Annual Compensation deferred by the Participant pursuant to Plan Section 3.1(b) during any payroll period to the extent the contribution under Section 3.1(b) does not exceed eight percent (8%) of his Annual Compensation." -4- 10. By deleting the existing Section 3.7 and substituting therefor the following: "3.7 ROLLOVER CONTRIBUTIONS. Any Eligible Employee may, with the consent of the Plan Administrator and subject to such rules and conditions as the Plan Administrator may prescribe, transfer a Rollover Amount to the Fund (which may include without limitation prohibitions against transferring certain categories of Rollover Amounts to the Plan); provided, however, that the Plan Administrator shall not administer this provision in a manner which is discriminatory in favor of Highly Compensated Employees." 11. By deleting the existing Section 5.5 and substituting therefor the following: "5.5 Notwithstanding any provision of the Plan to the contrary, as to any Participant who has not attained age 50 at the end of the Plan Year for which the contribution is being made, the Trustee shall invest fifty percent (50%) of the contribution made on behalf of a Participant under Plan Section 3.3(a)(ii) and 3.3(a)(iii) and the portion of the contribution made on behalf of a Participant under 3.3(b)(ii) that is equal to one-half of one percent (.5%) of the Participant's Annual Compensation in Company Stock; provided, however, that a Participant who has reached age 50 may elect to transfer any portion of his Salaried Profit-Sharing Account or Hourly Profit-Sharing Account, as applicable, that is invested in Company Stock to other Individual Funds. Any election must be in accordance with the policies and procedures established by the Plan Administrator." 12. By deleting existing header language to Section 7.1 and substituting therefor the following: "7.1 The Trustee shall, upon the direction of the Plan Administrator, withdraw all or a portion of a Participant's Employee Deferral Account consisting of Deferral Amounts, including catch-up contributions made pursuant to Section 3.1(d) (but not earnings thereon), prior to the time such account is otherwise distributable in accordance with the other provisions of the Plan; provided, however, that any such withdrawal shall be made only if the Participant is an Employee and demonstrates that he is suffering from 'hardship' as determined herein. For purposes of this Section, a withdrawal will be deemed to be an account of hardship if the withdrawal is on account of:" 13. By adding the word "and" to the end of Section 7.2(a)(1) and by deleting the existing Section 7.2(a)(2) and substituting therefor the following: "(2) the Plan Sponsor shall not permit Elective Deferrals, including catch-up contributions as described in Code Section 414(v), or after-tax employee contributions to be made to the Plan or any other plan maintained by the Plan Sponsor, for a period of six (6) months after the Participant receives the withdrawal pursuant to this Section." 14. By deleting the existing Section 7.2(a)(3) in its entirety. 15. By adding the phrase "his Matching Account," after the phrase "January 1, 2002," in Section 8.2(b)(ii). -5- 16. By deleting the existing Section 8.6 in its entirety. 17. By deleting Section 11.3(e) in its entirety and by substituting therefor the following: "(d) Distributions will be made in accordance with the regulations under Code Section 401(a)(9) and the regulations issued thereunder, including the incidental benefit requirements. Notwithstanding the foregoing, effective as of January 1, 2003, any distributions pursuant to Code Section 401(a)(9) shall be administered in accordance with Appendix D hereto." 18. By adding the following new Section 12.8: "12.8 APPEALS FIDUCIARY. The Primary Sponsor shall appoint an Appeals Fiduciary. The Appeals Fiduciary shall be required to review claims for benefits payable due to a Participant's Disability that are initially denied by the Plan Administrator and for which the claimant requests a full and fair review pursuant to Section 13.3. The Appeals Fiduciary may not be the individual who made the initial adverse determination with respect to any claim he reviews and may not be a subordinate of any individual who made the initial adverse determination. The Appeals Fiduciary may be removed in the same manner in which appointed or may resign at any time by written notice of resignation to the Primary Sponsor. Upon such removal or resignation, the Primary Sponsor shall appoint a successor." 19. By deleting the existing Section 13 of the Plan in its entirety and substituting therefor the following: "ARTICLE 13 CLAIMS REVIEW PROCEDURE 13.1 NOTICE OF DENIAL. If a Participant or a Beneficiary is denied a claim for benefits under the Plan, the Plan Administrator shall provide to the claimant written notice of the denial within ninety (90) days (forty-five (45) days with respect to a denial of any claim for benefits due to the Participant's Disability) after the Plan Administrator receives the claim, unless special circumstances require an extension of time for processing the claim. If such an extension of time is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial 90-day period. In no event shall the extension exceed a period of ninety (90) days (thirty (30) days with respect to a claim for benefits due to the Participant's Disability) from the end of such initial period. With respect to a claim for benefits due to the Participant's Disability, an additional extension of up to thirty (30) days beyond the initial 30-day extension period may be required for processing the claim. In such event, written notice of the extension shall be furnished to the claimant within the initial 30-day extension period. Any extension notice shall indicate the special circumstances requiring the extension of time, the date by which the Plan Administrator expects to render the final decision, the standards on which entitlement to benefits are based, the unresolved issues that prevent a decision on the claim and the additional information needed to resolve those issues. -6- 13.2 CONTENTS OF NOTICE OF DENIAL. If a Participant or Beneficiary is denied a claim for benefits under a Plan, the Plan Administrator shall provide to such claimant written notice of the denial which shall set forth: (a) the specific reasons for the denial; (b) specific references to the pertinent provisions of the Plan on which the denial is based; (c) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; (d) an explanation of the Plan's claim review procedures, and the time limits applicable to such procedures, including a statement of the claimant's right to bring a civil action under Sections 502(a) of ERISA following an adverse benefit determination on review; (e) in the case of a claim for benefits due to a Participant's Disability, if an internal rule, guideline, protocol or other similar criterion is relied upon in making the adverse determination, either the specific rule, guideline, protocol or other similar criterion; or a statement that such rule, guideline, protocol or other similar criterion was relied upon in making the decision and that a copy of such rule, guideline, protocol or other similar criterion will be provided free of charge upon request; and (f) in the case of a claim for benefits due to a Participant's Disability, if a denial of the claim is based on a medical necessity or experimental treatment or similar exclusion or limit, an explanation of the scientific or clinical judgment for the denial, an explanation applying the terms of the Plan to the claimant's medical circumstances or a statement that such explanation will be provided free of charge upon request. 13.3 RIGHT TO REVIEW. After receiving written notice of the denial of a claim or that a domestic relations order is a qualified domestic relations order, a claimant or his representative shall be entitled to: (a) request a full and fair review of the denial of the claim or determination that a domestic relations order is a qualified domestic relations order by written application to the Plan Administrator (or Appeals Fiduciary in the case of a claim for benefits payable due to a Participant's Disability); (b) request, free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim; (c) submit written comments, documents, records, and other information relating to the denied claim to the Plan Administrator or Appeals Fiduciary, as applicable; and -7- (d) a review that takes into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. 13.4 APPLICATION FOR REVIEW. (a) If a claimant wishes a review of the decision denying his claim to benefits under the Plan, other than a claim described in Subsection (b) of this Section 13.4, or if a claimant wishes to appeal a decision that a domestic relations order is a qualified domestic relations order, he must submit the written application to the Plan Administrator within sixty (60) days after receiving written notice of the denial or notice that the domestic relations order is a qualified domestic relations order. (b) If the claimant wishes a review of the decision denying his claim to benefits under the Plan due to a Participant's Disability, he must submit the written application to the Appeals Fiduciary within one hundred eighty (180) days after receiving written notice of the denial. With respect to any such claim, in deciding an appeal of any denial based in whole or in part on a medical judgment (including determinations with regard to whether a particular treatment, drug, or other item is experimental, investigational, or not medically necessary or appropriate), the Appeals Fiduciary shall (i) consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment; and (ii) identify the medical and vocational experts whose advice was obtained on behalf of the Plan in connection with the denial without regard to whether the advice was relied upon in making the determination to deny the claim. Notwithstanding the foregoing, the health care professional consulted pursuant to this Subsection (b) shall be an individual who was not consulted with respect to the initial denial of the claim that is the subject of the appeal or a subordinate of such individual. 13.5 HEARING. Upon receiving such written application for review, the Plan Administrator or Appeals Fiduciary, as applicable, may schedule a hearing for purposes of reviewing the claimant's claim, which hearing shall take place not more than thirty (30) days from the date on which the Plan Administrator or Appeals Fiduciary received such written application for review. 13.6 NOTICE OF HEARING. At least ten (10) days prior to the scheduled hearing, the claimant and his representative designated in writing by him, if any, shall receive written notice of the date, time, and place of such scheduled hearing. The claimant or his representative, if any, may request that the hearing be rescheduled, for his convenience, on another reasonable date or at another reasonable time or place. -8- 13.7 COUNSEL. All claimants requesting a review of the decision denying their claim for benefits may employ counsel for purposes of the hearing. 13.8 DECISION ON REVIEW. No later than sixty (60) days (forty-five (45) days with respect to a claim for benefits due to the Participant's Disability) following the receipt of the written application for review, the Plan Administrator or the Appeals Fiduciary, as applicable, shall submit its decision on the review in writing to the claimant involved and to his representative, if any, unless the Plan Administrator or Appeals Fiduciary determines that special circumstances (such as the need to hold a hearing) require an extension of time, to a day no later than one hundred twenty (120) days (ninety (90) days with respect to a claim for benefits due to the Participant's Disability) after the date of receipt of the written application for review. If the Plan Administrator or Appeals Fiduciary determines that the extension of time is required, the Plan Administrator or Appeals Fiduciary shall furnish to the claimant written notice of the extension before the expiration of the initial sixty (60) day (forty-five (45) days with respect to a claim for benefits due to the Participant's Disability) period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator or Appeals Fiduciary expects to render its decision on review. In the case of a decision adverse to the claimant, the Plan Administrator or Appeals Fiduciary shall provide to the claimant written notice of the denial which shall include: (a) the specific reasons for the decision; (b) specific references to the pertinent provisions of the Plan on which the decision is based; (c) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant's claim for benefits; (d) an explanation of the Plan's claim review procedures, and the time limits applicable to such procedures, including a statement of the claimant's right to bring an action under Section 502(a) of ERISA following the denial of the claim upon review; (e) in the case of a claim for benefits due to the Participant's Disability, if an internal rule, guideline, protocol or other similar criterion is relied upon in making the adverse determination, either the specific rule, guideline, protocol or other similar criterion; or a statement that such rule, guideline, protocol or other similar criterion was relied upon in making the decision and that a copy of such rule, guideline, protocol or other similar criterion will be provided free of charge upon request; (f) in the case of a claim for benefits due to a Participant's Disability, if a denial of the claim is based on a medical necessity or experimental treatment or similar exclusion or limit, an explanation of the scientific or clinical judgment for the denial, an explanation applying the terms of the Plan to the claimant's medical circumstances or a statement that such explanation will be provided free of charge upon request; and -9- (g) in the case of a claim for benefits due to a Participant's Disability, a statement regarding the availability of other voluntary alternative dispute resolution options." 20. By deleting the existing Section 20 of the Plan in its entirety and substituting therefor the following: "SECTION 20 INCORPORATION OF SPECIAL LIMITATIONS Appendices A, B, C and D to the Plan, attached hereto, are incorporated by reference and the provisions of the same shall apply notwithstanding anything to the contrary contained herein." 21. By deleting the existing Section 1 of Appendix A and substituting therefor the following: "Except to the extent permitted under Plan Section 3.1(d) and Code Section 414(v), if applicable, the 'annual addition' for any Member for any one limitation year may not exceed the lesser of: (a) $40,000, as adjusted under Code Section 415(d); or (b) 100% of the Member's Annual Compensation. The limit described in Subsection (b) shall not apply to any contribution for medical benefits after separation from service (within the meaning of Code Section 401(h) or 419A(f)(2)) which is otherwise treated as an annual addition." 22. By deleting the existing Section 2 of Appendix A and substituting therefor the following: "For the purposes of this Appendix A, the term `annual addition' for any Participant means for any limitation year, the sum of certain Plan Sponsor, Affiliate and Participant contributions and forfeitures , as determined in Code Section 415(c)(2) in effect for that limitation year. Participant contributions shall be determined without regard to Rollover Amounts, employee contributions to a simplified employee pension which are excludable from gross income under Code Section 408(k)(6), and catch-up contributions as described in Code Section 414(v)." 23. By adding the following new Subsection (g) to the end of the existing Section 6 of Appendix A: "(g) Notwithstanding anything contained in the Plan to the contrary, the Plan Administrator may modify the provisions of this Section 6 with respect to reduction of -10- Participant's accounts in accordance with such procedures as the Plan Administrator may establish with respect to catch-up contributions described in Code Section 414(v)." 24. By deleting the existing Section 1(b) of Appendix B and substituting therefor the following: "(b) 'Key Employee' means an Employee or former Employee (including Beneficiary of a Key Employee or former Key Employee) who at any time during the Plan Year containing the Determination Date was: (1) an officer of the Plan Sponsor or any Affiliate whose Annual Compensation was greater than $130,000 (as adjusted for changes in the cost of living as provided in regulations issued by the Secretary of the Treasury for Plan Years beginning after December 31, 2002) for the calendar year in which the Plan Year ends, where the term 'officer' means an administrative executive in regular and continual service to the Plan Sponsor or an Affiliate; provided, however, that in no event shall the number of officers exceed the lesser of (A) fifty (50) employees; or (B) the greater of (I) three (3) employees or (II) ten percent (10%) of the number of Employees during the Plan Year, with any non-integer being increased to the next integer. If for any year, no officer of the Plan Sponsor meets the requirements of this Subparagraph (1), the highest paid officer of the Plan Sponsor for the Plan Year shall be considered an officer for purposes of this Subparagraph (1); (2) an owner of more than five percent (5%) of the outstanding stock of the Plan Sponsor or an Affiliate or more than five percent (5%) of the total combined voting power of all stock of the Plan Sponsor or an Affiliate; or (3) an owner of more than one percent (1%) of the outstanding stock of the Plan Sponsor or an Affiliate or more than one percent (1%) of the total combined voting power of all stock of the Plan Sponsor or an Affiliate, and who in such Plan Year had Annual Compensation from the Plan Sponsor and all of its Affiliates of more than $150,000. For purposes of determining ownership under Subsections (2) and (3) above, the rules set forth in Code Section 318(a)(2) shall be applied as follows (i) in the case of any Plan Sponsor or Affiliate which is a corporation, by substituting five percent (5%) for fifty percent (50%) and, (ii) in the case of any Plan Sponsor or Affiliate which is not a corporation, ownership in such Plan Sponsor or Affiliate shall be determined in accordance with Treasury Regulations which shall be based on principles similar to the principles of Code Section 318(a)(2) (as modified by Clause (i) above). Employees other than Key Employees are sometimes referred to in this Appendix B as 'non-key employees.'" -11- 25. By deleting the existing Subsection (d)(1)(A)(i) of Section 1 of Appendix B and substituting therefor the following: "(i) the present value of the cumulative Accounts (excluding catch-up contributions as described in Code Section 414(v) made in the Plan Year for which the determination is being made) under the Plan for all Key Employees exceeds sixty percent (60%) of the present value of the cumulative Accounts (excluding catch-up contributions as described in Code Section 414(v) made in the Plan Year for which the determination is being made) under the Plan for all Participants; and" 26. By deleting Section 1(d)(3)(C) of Appendix B of the Plan and substituting therefor the following: "(C) For purposes of determining the present value of the cumulative accrued benefit under a plan for any Participant in accordance with this Subsection, the present value shall be increased by the aggregate distributions made with respect to the Participant (including distributions paid on account of death to the extent they do not exceed the present value of the cumulative accrued benefit existing immediately prior to death) under each plan being considered, and under any terminated plan which if it had not been terminated would have been in a Required Aggregation Group with the Plan, during the one-year period ending on the Determination Date or the last day of the Plan Year that falls within the calendar year in which the Determination Date falls. In the case of a distribution made with respect to a Participant made for a reason other than separation from service, death, or disability, this provision shall applied by substituting the five-year period for the one-year period." 27. By deleting Section 1(d)(3)(F) of Appendix B of the Plan and substituting therefor the following: "(F) For purposes of this Paragraph (3), if any Employee has not performed any service for any Plan Sponsor or Affiliate maintaining the plan during the one-year period ending on the Determination Date, any accrued benefit for that Employee shall not be taken into account." 28. By deleting the existing Section (b)(1) of Section 2 of Appendix B and substituting therefor the following: "(1) The percentage referred to in Subsection (a) of this Section for any Plan Year shall not exceed the percentage at which allocations are made or are required to be made under the Plan for the Plan Year for the Key Employee for whom the percentage is highest for a Plan Year. For purposes of this Paragraph, an allocation to the Account of a Key Employee resulting from any Plan Sponsor contribution attributable to a salary reduction or similar agreement shall be taken into account but allocations of catch-up contributions as described in Code Section 414(v) shall not be taken into account." -12- 29. By deleting the next to the last sentence of the first paragraph of Section 3 of Appendix C to the Plan. 30. By deleting the existing Section 4 of Appendix C to the Plan and substituting therefor the following: "The Plan Administrator shall have the responsibility of monitoring the Plan's compliance with the limitations of this Appendix C and shall have the power to take all steps it deems necessary or appropriate to ensure compliance, including, without limitation, restricting the amount which Highly Compensated Eligible Members can elect to have contributed pursuant to Section 3.1(a). Any actions taken by the Plan Administrator pursuant to this Section 4 shall be pursuant to non-discriminatory procedures consistently applied." 31. By deleting the existing second, third and fourth sentences of the last paragraph of Section 5 of Appendix C to the Plan and substituting therefor the following: "The 'contribution percentage' for Highly Compensated Eligible Participants and for all other Eligible Participants for a Plan Year shall be the average of the ratios, calculated separately for each Participant, of (A) to (B), where (A) is the amount of Matching Contributions under the Plan (excluding Qualified Matching Contributions which are used to apply the test set forth in Section 2 of this Appendix C) and nondeductible employee contributions made under the Plan for the Eligible Participant for the Plan Year, and where (B) is the Annual Compensation of the Eligible Participant for the Plan Year." 32. Effective January 1, 2003, by adding the following new Appendix D to the Plan: "APPENDIX D MINIMUM DISTRIBUTION REQUIREMENTS SECTION 1 GENERAL RULES (a) EFFECTIVE DATE AND PRECEDENCE. The provisions of this Appendix D will apply for purposes of determining required minimum distributions for calendar years beginning with the 2003 calendar year. The requirements of this Appendix D will take precedence over any inconsistent provisions of the Plan. (b) REQUIREMENTS OF TREASURY REGULATIONS INCORPORATED. All distributions required under this Section will be determined and made in accordance with the Treasury Regulations under Code Section 401(a)(9). (c) TEFRA SECTION 242(b)(2) ELECTIONS. Notwithstanding the other provisions of this Appendix D, distributions may be made under a designation made before January 1, 1984, in accordance with Section 242(b)(2) of the Tax Equity and Fiscal -13- Responsibility Act (TEFRA) and the provisions of the Plan that relate to Section 242(b)(2) of TEFRA. SECTION 2 TIME AND MANNER OF DISTRIBUTION (a) REQUIRED BEGINNING DATE. The Participant's entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant's Required Beginning Date. (b) DEATH OF PARTICIPANT BEFORE DISTRIBUTIONS BEGIN. If the Participant dies before distributions begin, the Participant's entire interest will be distributed, or begin to be distributed, no later than as follows: (1) If the Participant's surviving spouse is the Participant's sole Designated Beneficiary, then, distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70 1/2, if later. (2) If the Participant's surviving spouse is not the Participant's sole Designated Beneficiary, then, distributions to the Designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died. (3) If there is no Designated Beneficiary as of September 30 of the year following the year of the Participant's death, the Participant's entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant's death. (4) If the Participant's surviving spouse is the Participant's sole Designated Beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse begin, this Section 2(b), other than Section 2(b)(1) of this Appendix D, will apply as if the surviving spouse were the Participant. For purposes of this Section 2(b) and Section 4 of this Appendix D, unless Section 2(b)(4) of this Appendix D applies, distributions are considered to begin on the Participant's Required Beginning Date. If Section 2(b) of this Appendix D applies, distributions are considered to begin on the date distributions are required to begin to the surviving spouse under Section 2(b)(1) of this Appendix D. If distributions under an annuity purchased from an insurance company irrevocably commence to the Participant before the Participant's Required Beginning Date (or to the Participant's surviving spouse before the date distributions are required to begin to the surviving spouse under Section 2(b)(1)), the date distributions are considered to begin is the date distributions actually commence. -14- (c) Forms of Distribution. Unless the Participant's interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the Required Beginning Date, as of the first Distribution Calendar Year, distributions will be made in accordance with Sections 3 and 4 of this Appendix D. If the Participant's interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Code Section 401(a)(9) and the regulations issued thereunder. SECTION 3 REQUIRED MINIMUM DISTRIBUTIONS DURING PARTICIPANT'S LIFETIME (a) AMOUNT OF REQUIRED MINIMUM DISTRIBUTION FOR EACH DISTRIBUTION CALENDAR YEAR. During the Participant's lifetime, the minimum amount that will be distributed for each Distribution Calendar Year is the lesser of: (1) the quotient obtained by dividing the Participant's Account Balance by the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury Regulations, using the Participant's age as of the Participant's birthday in the Distribution Calendar Year; or (2) if the Participant's sole Designated Beneficiary for the Distribution Calendar Year is the Participant's spouse, the quotient obtained by dividing the Participant's Account Balance by the number in the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury Regulations, using the Participant's and spouse's attained ages as of the Participant's and spouse's birthdays in the Distribution Calendar Year. (b) LIFETIME REQUIRED MINIMUM DISTRIBUTIONS CONTINUE THROUGH YEAR OF PARTICIPANT'S DEATH. Required minimum distributions will be determined under this Section 3 beginning with the first Distribution Calendar Year and up to and including the Distribution Calendar Year that includes the Participant's date of death. SECTION 4 REQUIRED MINIMUM DISTRIBUTIONS AFTER PARTICIPANT'S DEATH (a) DEATH ON OR AFTER DATE DISTRIBUTIONS BEGIN. (1) PARTICIPANT SURVIVED BY DESIGNATED BENEFICIARY. If the Participant dies on or after the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the longer of the remaining Life Expectancy of the Participant or the remaining Life Expectancy of the Participant's Designated Beneficiary, determined as follows: -15- (i) The Participant's remaining Life Expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. (ii) If the Participant's surviving spouse is the Participant's sole Designated Beneficiary, the remaining Life Expectancy of the surviving spouse is calculated for each Distribution Calendar Year after the year of the Participant's death using the surviving spouse's age as of the spouse's birthday in that year. For Distribution Calendar Years after the year of the surviving spouse's death, the remaining Life Expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouse's birthday in the calendar year of the spouse's death, reduced by one for each subsequent calendar year. (iii) If the Participant's surviving spouse is not the Participant's sole Designated Beneficiary, the Designated Beneficiary's remaining Life Expectancy is calculated using the age of the Designated Beneficiary in the year following the year of the Participant's death, reduced by one for each subsequent year. (2) NO DESIGNATED BENEFICIARY. If the Participant dies on or after the date distributions begin and there is no Designated Beneficiary as of September 30 of the year after the year of the Participant's death, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the Participant's remaining Life Expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. (b) DEATH BEFORE DATE DISTRIBUTIONS BEGIN. (1) PARTICIPANT SURVIVED BY DESIGNATED BENEFICIARY. If the Participant dies before the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the remaining Life Expectancy of the Participant's Designated Beneficiary, determined as provided in Section 4(a). (2) NO DESIGNATED BENEFICIARY. If the Participant dies before the date distributions begin and there is no Designated Beneficiary as of September 30 of the year following the year of the Participant's death, distribution of the Participant's entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant's death. (3) DEATH OF SURVIVING SPOUSE BEFORE DISTRIBUTIONS TO SURVIVING SPOUSE ARE REQUIRED TO BEGIN. If the Participant dies before the date distributions begin, the Participant's surviving spouse is the Participant's sole Designated -16- Beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under Section 2(b)(1) of this Appendix D, this Section (b) will apply as if the surviving spouse were the Participant. SECTION 5 DEFINITIONS As used in this Appendix D, the following words and phrases shall have the meaning set forth below: (a) DESIGNATED BENEFICIARY. The individual who is designated as the Beneficiary under Section 1.6 of the Plan and is the designated Beneficiary under Section 401(a)(9) of the Internal Revenue Code and Section 1.401(a)(9)-1, Q&A-4, of the Treasury Regulations. (b) DISTRIBUTION CALENDAR YEAR. A calendar year for which a minimum distribution is required. For distributions beginning before the Participant's death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the Participant's Required Beginning Date. For distributions beginning after the Participant's death, the first distribution calendar year is the calendar year in which distributions are required to begin under Section 2(b). The required minimum distribution for the Participant's first distribution calendar year will be made on or before the Participant's Required Beginning Date. The required minimum distribution for other distribution calendar years, including the required minimum distribution for the distribution calendar year in which the Participant's Required Beginning Date occurs, will be made on or before December 31 of that distribution calendar year. (c) LIFE EXPECTANCY. Life expectancy as computed by use of the Single Life Table in Section 1.401(a)(9)-9 of the Treasury Regulations. (d) PARTICIPANT'S ACCOUNT BALANCE. The Account balance as of the last Valuation Date in the calendar year immediately preceding the Distribution Calendar Year ("Valuation Calendar Year") increased by the amount of any contributions made and allocated or forfeitures allocated to the Account balance as of dates in the Valuation Calendar Year after the Valuation Date and decreased by distributions made in the Valuation Calendar Year after the Valuation Date. The Account balance for the Valuation Calendar Year includes any amounts rolled over or transferred to the Plan either in the Valuation Calendar Year or in the Distribution Calendar Year if distributed or transferred in the Valuation Calendar Year. (e) REQUIRED BEGINNING DATE. The date specified in Section 11.5(c) of the Plan." 33. By deleting the last sentence of the first paragraph of Section 6 of Appendix C to the Plan. -17- Except as specifically amended hereby, the Plan shall remain in full force and effect as prior to this Second Amendment. IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be executed as of the day and year first above written. C & D TECHNOLOGIES, INC. By: /s/ K.D. Burgess ------------------------------------ Title: VP Human Resources --------------------------------- -18- EX-15 15 exb15.txt EXHIBIT 15 December 12, 2002 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, DC 20549 Commissioners: We are aware that our report dated November 20, 2002 on our review of interim financial information of C&D Technologies, Inc. and Subsidiaries (the "Company") as of and for the period ended October 31, 2002 and included in the Company's quarterly report on Form 10-Q for the quarter then ended is incorporated by reference in the Company's Forms S-8 (Registration Nos. 33-31978, 33-71390, 33-86672, 333-17979, 333-38891, 333-59177, 333-42054, 333-56736, 333-69264 and 333-69266) and Form S-3 (Registration No. 333-38893). Very truly yours, /s/ PricewaterhouseCoopers LLP - ------------------------------ PricewaterhouseCoopers LLP EX-99 16 exb99-1.txt Exhibit 99.1 CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 The undersigned hereby certifies, in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his capacity as an officer of C&D Technologies, Inc. ("C&D"), that, to his knowledge, the Quarterly Report of C&D on Form 10-Q for the period ended October 31, 2002, fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of C&D. Date: December 13, 2002 /S/ Wade H. Roberts, Jr. ----------------- ----------------------------------- Wade H. Roberts, Jr. President and Chief Executive Officer (Principal Executive Officer) EX-99 17 exb99-2.txt Exhibit 99.2 CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 The undersigned hereby certifies, in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his capacity as an officer of C&D Technologies, Inc. ("C&D"), that, to his knowledge, the Quarterly Report of C&D on Form 10-Q for the period ended October 31, 2002, fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of C&D. Date: December 13, 2002 /s/ Stephen E. Markert, Jr. ----------------- ----------------------------------- Stephen E. Markert, Jr. Vice President Finance (Principal Financial and Accounting Officer) -----END PRIVACY-ENHANCED MESSAGE-----