DEFR14A 1 mayproxyltr.txt SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant |X| Filed by a Party other than the Registrant |_| Check the appropriate box: |_| Preliminary Proxy Statement |_| Soliciting Material Under Rule |_| Confidential, For Use of the 14a-12 Commission Only (as permitted by Rule 14a-6(e)(2)) | | Definitive Proxy Statement |X| Definitive Additional Materials C&D Technologies, Inc -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) Payment of Filing Fee (Check the appropriate box): |X| No fee required. |_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. 1) Title of each class of securities to which transaction applies: -------------------------------------------------------------------------------- 2) Aggregate number of securities to which transaction applies: -------------------------------------------------------------------------------- 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): -------------------------------------------------------------------------------- 4) Proposed maximum aggregate value of transaction: -------------------------------------------------------------------------------- 5) Total fee paid: -------------------------------------------------------------------------------- |_| Fee paid previously with preliminary materials: -------------------------------------------------------------------------------- |_| Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. 1) Amount previously paid: -------------------------------------------------------------------------------- 2) Form, Schedule or Registration Statement No.: -------------------------------------------------------------------------------- 3) Filing Party: -------------------------------------------------------------------------------- 4) Date Filed: -------------------------------------------------------------------------------- May 15, 2006 Re: Clarification Regarding Proposed C&D Technologies, Inc. (the "Company") 2007 Stock Incentive Plan Dear Stockholders: At the annual meeting of stockholders, C&D Technologies will request stockholder approval of the C&D Technologies, Inc. 2007 Stock Incentive Plan (the "Plan"). The Company is seeking stockholder approval of a modest amount of 1,500,000 shares for the Plan or approximately 5.9% of common shares outstanding. We also understand that some investors have placed an increasing level of importance on the annual share usage level ("run rate") from equity-based awards to participants. For fiscal years 2003, 2004, and 2005, our gross annual equity usage averaged approximately 2.5% of common shares outstanding, with a net grant rate of approximately 1.61% after cancellations. However, in fiscal year 2006 our gross annual equity usage was significantly higher than either our historical usage or what we anticipate in the future. This increase was a result of management's decision to issue stock options to employees in January 2006 in advance of the change in the accounting rules for stock options (FAS123R). This grant traditionally would have been made in fiscal year 2007. To address the issue of annual run rate and our projected equity usage, and assuming approval of the proposed Plan by our stockholders, the Company commits that for fiscal years 2007 through 2009, our average annual run rate will not exceed 2.93% of common shares outstanding, which is the average run rate plus one standard deviation for our GICS industry group based on Institutional Shareholder Services guidelines for the 2006 proxy season. Our ability to continue to offer equity awards is critical to attract, retain, and reward talent key to our success in a challenging and dynamic business environment. You have previously been provided our proxy statement which describes the Plan and key features. We encourage you to review those materials as well as our clarification described in this letter as you consider your vote on the proposed Plan. The Board of Directors has recommended a vote "FOR" Proposal No. 2, the approval of the Company's 2007 Stock Incentive Plan. We solicit your support and welcome your input. Respectfully, /s/ Jeffrey A. Graves --------------------- Jeffrey A. Graves President and Chief Executive Officer