Exhibit 10.13
March 31, 2000
Mr. Wade H. Roberts, Jr.
1385 Eaves Spring Road
Malvern, Pennsylvania 19355
Dear Mr. Roberts:
You are presently employed by C&D Technologies, Inc., a Delaware
corporation (the "Company"), in an executive capacity and the Company desires to
encourage such continued employment by providing certain protections for you by
entering into this Agreement with you, in return for which you agree to continue
to be employed by the Company on the terms set forth herein, to refrain from
certain competitive activity and to provide the Company with certain assurances
upon your departure. In consideration of same, the Company agrees to employ you,
and you agree to accept such employment, under the following terms and
conditions:
1. TERM OF EMPLOYMENT. Except for earlier termination as provided in
Section 9 below, your employment under this Agreement, and the term of this
Agreement, shall be for an initial period commencing on the date hereof (the
"Effective Date") and terminating on October 21, 2000 (the "Initial Term").
After the Initial Term, this Agreement and your employment hereunder shall be
renewed automatically for successive terms of one year each (each, a "Renewal
Term"), unless prior to the end of the Initial Term or any Renewal Term either
party shall have given to the other party at least 90 days' prior written notice
(a "Termination Notice"), of termination of this Agreement. If a Termination
Notice is given by either party, (a) the Company shall, without any liability to
you, have the right, exercisable at any time after the Termination Notice is
given, to elect any other person to the office or offices in which you are then
serving and to remove you from such office or offices, but (b) except for the
obligations set forth in Section 3 and 4, all other obligations each of you and
the Company have to the other, including the Company's obligation to pay your
compensation and make available the benefits to which you are entitled
hereunder, shall continue until the end of the Initial Term or any Renewal Term,
as the case may be, or thereafter, to the extent such obligations survive
pursuant to the terms of this Agreement.
2. COMPENSATION AND BENEFITS.
(a) From and after the Effective Date, you shall be compensated for
performance of your obligations under this Agreement at a rate of not less than
$350,000 per annum (such salary, as adjusted from time to time, is hereinafter
referred to as the "Base Salary"), payable in such manner as is consistent with
the Company's payroll practices for executive employees. The Board of
Directors may from time to time thereafter consider future increases in Base
Salary in its sole discretion.
(b) You shall have the benefit of and be entitled to participate in
such employee benefit plans and programs, including life, disability and medical
insurance, pension, savings, retirement and other similar plans, as the Company
now has or hereafter may establish from time to time, and in which you would be
entitled to participate pursuant to the terms thereof, including without
limitation the Company's existing Supplemental Executive Retirement Plan
("SERP"). The foregoing, however, shall not be construed to require the Company
to establish any such plans or to prevent the Company from modifying or
terminating any such plans, and no such action or failure thereof shall affect
this Agreement.
(c) You shall be entitled (i) to participate in the Company's Incentive
Compensation Plan each year in accordance with criteria and for amounts approved
by the Compensation Committee, and (ii) to be granted options, to the extent (if
any) approved by the Compensation Committee or the relevant Option Committee,
under the Company's stock option plans in effect from time to time, in addition
to those granted to you prior to the date of this Agreement (the "Original
Grant"). Without limiting the foregoing, you shall have a targeted bonus for the
fiscal year ending January 31, 2000 of 40% of the Base Salary paid to you during
the portion of the fiscal year prior to the time you became Chief Executive
Officer and increasing to 50% of your Base Salary for the portion of such year
following your promotion to Chief Executive Officer (with the actual payment of
any bonus described herein being dependent on your achievement of targeted
objectives).
(d) In the event of a Change of Control Termination (as defined in
Exhibit A hereto), you shall be entitled to certain payments and benefits as
provided in Exhibit A hereto, which payments and benefits shall be in
substitution for, not in addition to, the payments and benefits otherwise
payable under this Agreement in the event of termination.
(e) You shall be entitled to four weeks of vacation each year.
(f) The Company shall reimburse you annually for up to $5,000 of fees
and expenses incurred by you for personal tax and financial planning advice,
upon presentation by you of appropriate substantiation of such fees and
expenses.
(g) The Company shall provide you with a leased automobile of
reasonable size and quality suitable to your position and shall pay or reimburse
you for insurance, repairs, maintenance and fuel expenses with regard to such
automobile. You acknowledge that some or all of the benefits provided under this
Section 2(g) may constitute taxable income for which you are responsible for
payment of income taxes.
3. DUTIES. (a) During the term of your employment hereunder, including
any Renewal Term hereof, you shall serve and the Company shall employ you as the
President and Chief Executive Officer of the Company, with such executive duties
and responsibilities consistent with such positions and stature as the Board of
Directors from time to time may determine. You shall
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report to, and act under the general direction of, the Board of Directors. You
shall use your best efforts to carry out the instructions of the Board of
Directors. You shall be nominated, on an annual basis as long as you continue to
be employed under this Agreement, for election by the stockholders as a director
of the Company and, if elected, you shall serve as a director, without
additional compensation. In addition, at the request of the Board of Directors,
you shall serve as an officer and/or director of any of the Company's
subsidiaries, in all cases in conformity with the organizational documents and
the policies of the Board of Directors of each such subsidiary, without
additional compensation.
(b) You shall devote your entire business time and energies during
normal business hours to the business and affairs of the Company and its
subsidiaries. Nothing in this Section 3 shall be construed as prohibiting you
from investing your personal assets in businesses in which your participation is
solely that of a passive investor in such form or manner as will not violate
Section 5 hereof or require any services on your part in the operation or
affairs of those businesses. You may also participate in philanthropic or civic
activities as long as they do not materially interfere with your performance of
your duties hereunder.
(c) You shall be subject to the Company's rules, practices and policies
applicable to the Company's senior executive employees.
4. EXPENSES. The Company shall reimburse you for all reasonable
expenses incurred by you in connection with your employment upon presentation of
appropriate documentation therefor in accordance with the Company's expense
reimbursement practices. In the event the Company's principal executive offices
are located to a location more than 50 miles from their current location, the
Company shall reimburse your moving expenses (including reasonable costs
relating to interim living accommodations).
5. RESTRICTIVE COVENANTS.
(a) During such time as you shall be employed by the Company, and for
the applicable Restricted Period (as defined below) thereafter, you shall not,
without the written consent of the Board of Directors, directly or indirectly,
become associated with, render services to, invest in, represent, advise or
otherwise participate as an officer, employee, director, stockholder, partner or
agent of, or as a consultant for, any business anywhere in the world that, at
the time your employment with the Company ceases, is competitive with the
business in which the Company is engaged or in which the Company has taken
affirmative steps to engage (a "Competitive Business"); provided, however, that
(i) nothing herein shall prevent you from investing in up to 5% of the
securities of any company listed on a national securities exchange or quoted on
the Nasdaq quotation system, as long as your involvement with any such company
is solely that of a stockholder, and (ii) nothing herein is intended to prevent
you from being employed following the termination of your employment with the
Company by any business other than a Competitive Business. With respect to any
termination of your employment other than upon a Change of Control pursuant to
Exhibit A, the applicable Restricted Period shall be the one-year period
following the date your employment terminates, and with respect to a termination
of your employment upon a Change of Control pursuant
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to Exhibit A, the applicable Restricted Period shall be the two-year period
following the date your employment terminates. You acknowledge that the
provisions of this Section 5 are reasonable in light of the Company's worldwide
business operations and the position in which you will serve at the Company and
that they will not prevent you from obtaining employment after the termination
of this Agreement.
(b) The parties hereto intend that the covenant contained in this
Section 5 shall be deemed a series of separate covenants for each appropriate
jurisdiction. If, in any judicial proceeding, a court shall refuse to enforce
all of the separate covenants deemed included in this Section 5 on grounds that,
taken together, they cover too extensive a geographic area, the parties intend
that those covenants (taken in order of the least populous jurisdictions) which,
if eliminated, would permit the remaining separate covenants to be enforced in
that proceeding, shall, for the purpose of such proceeding, be deemed eliminated
from the provisions of this Section 5.
6. CONFIDENTIALITY, NONINTERFERENCE AND PROPRIETARY INFORMATION.
(a) In the course of (i) your employment by the Company hereunder, and
(ii) any prior employment with the Company, you will have access to Confidential
or Proprietary Data or Information of the Company. You shall not at any time
divulge or communicate to any person, nor shall you direct any Company employee
to divulge or communicate to any person (other than to a person bound by
confidentiality obligations similar to those contained herein and other than as
necessary in performing your duties hereunder) or use to the detriment of the
Company or for the benefit of any other person, any of such Confidential or
Proprietary Data or Information, except to the extent the same (i) becomes
publicly known other than through a breach of this Agreement by you, (ii) was
known to you prior to the disclosure thereof by the Company to you from a source
that was entitled to disclose it or (iii) is subsequently disclosed to you by a
third party who shall not have received it under any obligation of
confidentiality to the Company. For purposes of this Agreement, the term
"Confidential or Proprietary Data or Information" shall mean data or information
not generally available to the public, including personnel information,
financial information, customer lists, supplier lists, product and tooling
specifications, trade secrets, information concerning product composition and
formulas, tools and dies, drawings and schematics, manufacturing processes,
information regarding operations, systems and services, knowhow, computer and
any other electronic, processed or collated data, computer programs, and
pricing, marketing, sales and advertising data.
(b) You shall not, during the term of this Agreement and for the
applicable Restricted Period after the termination of your employment by the
Company, for your own account or for the account of any other person, (i)
solicit or divert to any Competitive Business any individual or entity who is a
customer of the Company or any subsidiary or affiliate of the Company or who was
a customer of the Company or any subsidiary or affiliate during the preceding
twelve-month period, (ii) employ, retain as a consultant, attempt to employ or
retain as a consultant, solicit or assist any Competitive Business in employing
or retaining as a consultant any current employee of the Company or any
subsidiary or affiliate or any person who was employed by the Company or any
subsidiary or affiliate during the preceding twelve-month period or (iii)
otherwise interfere in any
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material respect with the Company's relationship with any of its suppliers,
customers, employees or consultants; provided, however, that you shall not be
prohibited from contacting suppliers or customers after termination of your
employment with regard to matters that do not violate your noncompetition or
confidentiality obligations contained in Sections 5(a) and 6(a) or interfere in
any material respect with the Company's relationship with such parties.
(c) You shall at all times promptly disclose to the Company, in such
form and manner as the Company reasonably may require, any inventions,
improvements or procedural or methodological innovations, programs, methods,
forms, systems, services, designs, marketing ideas, products or processes
(whether or not capable of being trademarked, copyrighted or patented) conceived
or developed or created by you during and in connection with your employment
hereunder and which relate to the business of the Company ("Intellectual
Property"). All such Intellectual Property shall be the sole property of the
Company. You shall execute such instruments and perform such acts as reasonably
may be requested by the Company to transfer to and perfect in the Company all
legally protectable rights in such Intellectual Property. If the Company is
unable for any reason to secure your signature on such instruments, you hereby
irrevocably appoint the Company and its officers and agents as your agents and
attorneys-in-fact to execute such instruments and to do such things with the
same legal force and effect as if executed or done by you.
(d) All written, electronic and other tangible materials, records and
documents made by you or coming into your possession during your employment
concerning any products, processes or equipment, manufactured, used, developed,
investigated or considered by the Company or otherwise concerning the business
or affairs of the Company, shall be the sole property of the Company, and upon
termination of your employment, or upon the request of the Company during your
employment, you shall deliver the same to the Company. In addition, upon
termination of your employment, or upon request of the Company during your
employment, you shall deliver to the Company all other Company property in your
possession or under your control, including confidential or proprietary data or
information and all Company credit cards and computer and telephone equipment.
7. EQUITABLE RELIEF. With respect to the covenants contained in
Sections 5 and 6 of this Agreement, you acknowledge that any remedy at law for
any breach of said covenants may be inadequate and that the Company, in addition
to its rights at law, shall be entitled to specific performance or any other
mode of injunctive or other equitable relief to enforce its rights hereunder.
8. TERMINATION; ADDITIONAL COMPENSATION. This Agreement, and your
employment hereunder, shall terminate prior to the end of the Initial Term or
any Renewal Term, upon the following terms and conditions:
(a) This Agreement shall terminate automatically on the date of your
death. Notwithstanding the foregoing, if you die during the term of this
Agreement, the Company shall (i) continue to make payments to your estate of
your Base Salary as then in effect pursuant to this Agreement for 180 days after
the date of your death, and (ii) pay your estate any reimbursable expenses which
otherwise would have been paid to you to the date of your death.
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(b) This Agreement shall be terminated, at the option of the Company,
if you are unable to perform a substantial portion of your duties hereunder for
any 180 days (whether or not consecutive) during any period of 365 consecutive
days by reason of physical or mental disability. Notwithstanding the foregoing,
the Company shall continue to pay to you, until 180 days after termination of
your employment due to such disability, your Base Salary at the rate in effect
on the date of termination. After such six-month period, you shall be entitled
to receive any amounts due and owing pursuant to any disability policy sponsored
by or made available through the Company to the extent you qualify therefor
under the terms of such disability policy. For purposes of this Agreement,
"physical or mental disability" shall mean your inability, due to health
reasons, to discharge properly your duties of employment, supported by the
opinion of a physician reasonably satisfactory to both you and the Company. If
the parties do not agree on a mutually satisfactory physician within ten days
after written demand by one or the other, a physician shall be selected by the
president of the Pennsylvania Medical Association, and the physician shall,
within 30 days thereafter, make a determination as to whether disability exists
and certify the same in writing. The services of the physician shall be paid for
by the Company. You shall fully cooperate with the examining physician,
including submitting yourself to such examinations as may be requested by the
physician for the purpose of determining whether you are disabled.
(c) This Agreement shall terminate immediately if your employment is
terminated hereunder for Cause. For purposes of this Agreement, "Cause" shall
exist upon a finding by the Board of Directors of any of the following: (i) an
act or acts of willful material misrepresentation, fraud or dishonesty by you
that results in the personal enrichment of you or another person or entity at
the expense of the Company; (ii) your admission, confession or conviction of any
felony or any other crime or offense involving misuse or misappropriation of
money or other property; (iii) any act involving gross moral turpitude by you
that adversely affects the Company; (iv) your continued material breach of any
obligations under this Agreement 30 days after the Company has given you notice
thereof in reasonable detail, if such breach has not been cured by you during
such period; or (v) your gross negligence or willful misconduct with respect to
your duties or gross misfeasance of office. Notwithstanding the foregoing and
Section 1(d)(ii) of the SERP, the definition of "Cause" solely for purposes of
the SERP shall be the definition of "Cause" contained in Section l(d)(i) of the
SERP.
(d) Upon termination of this Agreement for any reason other than
pursuant to a Change of Control, in addition to any other rights or benefits to
which you may be entitled under this Agreement, you shall be paid all Accrued
Obligations through the date of termination. The term "Accrued Obligations"
shall mean (i) your Base Salary through the date of termination; (ii) any bonus
earned pursuant to the terms of any applicable incentive compensation or bonus
plan of the Company but not yet paid with respect to any fiscal year completed
prior to termination; (iii) a prorated bonus for the fiscal year in which
termination occurs equal to the product of (x) any bonus paid to you for the
prior fiscal year of the Company multiplied by (y) a fraction, the numerator of
which is the number of days in the current fiscal year during which you were
employed by the Company, and the denominator of which is 365; and (iv) any
accrued vacation pay not yet paid by the Company; provided, that if termination
is by the Company for Cause or by you voluntarily, the
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"Accrued Obligations" will not include the amounts referred to in clause (iii)
above. Upon termination of this Agreement (other than by the Company for Cause
or pursuant to a Change of Control or by you in violation of this Agreement),
(A) you shall also be entitled to all rights and benefits under benefit and
incentive plans (other than those relating to bonuses) in accordance with
respective terms of those plans; (B) you shall be reimbursed for all your
business expenses incurred prior to termination in accordance with Section 4
above; (C) the Company shall, at your request within 15 days after termination
and at your expense, assign to you the lease and any related purchase option for
the automobile provided to you pursuant to Section 2(g), provided such lease and
purchase option is assignable; and (D) to the extent the Company's life
insurance plan has a conversion option available upon termination of employment,
the Company shall make such option available to you. Upon termination by the
Company for Cause, you shall be reimbursed for all your business expenses
incurred prior to termination in accordance with Section 4. For purposes of
clause (ii) above, a bonus shall be deemed to be earned upon completion of the
fiscal year to which it relates regardless of whether the Board of Directors or
its Compensation Committee has approved bonuses for such year as of the date of
termination.
(e) Except upon the occurrence of a Change of Control Termination (as
defined in Exhibit A), if your employment hereunder shall be terminated by the
Company (i) without Cause, other than pursuant to Section 8(a) or (b), or (ii)
as a result of nonrenewal pursuant to a Termination Notice given by the Company
under Section l, then in addition to any other rights or benefits to which you
may be entitled, the Company shall, for a period of one year after termination,
(x) continue to pay you your Base Salary at the rate in effect on the date of
termination; (y) continue to provide you with a leased automobile pursuant to
Section 2(g); and (z) continue all other benefits provided to you prior to
termination (except not including any bonus with respect to the period after
termination); provided, however, that to the extent the Company's benefit plans
do not permit such continued participation or such participation would have an
adverse tax impact on such plans or on the other participants in such plans or
is otherwise prohibited by applicable law, the Company may instead provide
materially equivalent benefits to you outside such plans (which, in the case of
medical insurance benefits, may be provided by the Company paying any premiums
for continuation of your medical benefits pursuant to the provisions of the
Consolidated Omnibus Budget Reconciliation Act ("COBRA"), COBRA coverage in any
event to be measured from the date of termination of employment).
(f) In the event of a Change of Control Termination, this Agreement
shall terminate in accordance with the terms of Exhibit A, and the payments and
benefits to which you shall be entitled shall be governed solely by Exhibit A.
(g) In the event this Agreement is terminated for any reason by the
Company (other than due to death, disability, for Cause or upon a Change of
Control), or the Company provides a Termination Notice as forth in Section 1,
upon termination of your employment under this Agreement, any unvested options
from the Original Grant that you may own that would otherwise have vested within
one year from the date of termination shall be deemed to vest effective upon the
date of termination and become exercisable for a period of 90 days following the
date of termination. All other unvested options from the Original Grant shall
terminate.
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(h) The payment by the Company of any compensation or benefits pursuant
to this Section 8 other than the Accrued Obligations shall be conditioned on
your execution of a Release (a "Release") in a form provided by and acceptable
to the Company. Such Release shall be substantially in the form of Exhibit B
hereto but may be modified by the Company in its sole discretion as it deems
appropriate to reflect changes in law or circumstances arising after the date of
this Agreement; provided, however, that no such modification shall increase any
of your obligations to the Company over those contemplated in this Agreement,
including the Exhibits hereto.
9. REPRESENTATIONS. You hereby represent and warrant that you are not
subject to any employment agreement, non-competition or confidentiality
agreement or other commitment that either would be violated by your entering
into or performing your obligations under this Agreement or that would restrict
in any manner or interfere with the performance of your obligation under this
Agreement. You hereby further represent and warrant that you have not revealed
to the Company or any employee of the Company any confidential information of
any former employer, and you agree that you will not do so in the future.
10. ENTIRE AGREEMENT; MODIFICATION; CONSTRUCTION. This Agreement,
together with the Exhibits hereto and all of your rights under the SERP and all
other employee benefit plans in which you participate, constitutes the full and
complete understanding of the parties, and supersedes all prior agreements and
understandings, oral or written, between the parties, with respect to the
subject matter hereof, except for the Agreement Relating to Intellectual
Property and Confidential Information dated October 23, 1998 between you and the
Company ("Confidentiality Agreement"); provided, however, that if the terms of
any such employee benefit plan or such Confidentiality Agreement shall be
inconsistent with the provisions to this Agreement, the provisions of this
Agreement shall prevail. Exhibit A and Exhibit B are hereby incorporated by
reference and made a part of this Agreement. Each party to this Agreement
acknowledges that no representations, inducements, promises or agreements, oral
or otherwise, have been made by either party, or anyone acting on behalf of
either party, that are not set forth or referred to herein. This Agreement may
not be modified or amended except by an instrument in writing signed by the
party against which enforcement thereof may be sought.
11. SEVERABILITY. Any term or provision of this Agreement that is held
to be invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent that invalidity or unenforceability
without rendering invalid or unenforceable the remaining terms and provisions of
this Agreement or affecting the validity or enforceability of any of the terms
or provisions of this Agreement in any other jurisdiction.
12. WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement, which waiver must be in writing to be effective,
shall not operate as or be construed as a waiver of any subsequent breach.
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13. NOTICES. All notices hereunder shall be in writing and shall be
sent by messenger or by certified or registered mail, postage prepaid, return
receipt requested, if to you, to your residence set forth above, and if to the
Company, to the Vice President-Human Resources, at the Company's address set
forth above, or to such other address as either party to this Agreement shall
specify to the other.
14. ASSIGNABILITY; BINDING EFFECT. This Agreement shall not be
assignable by either party, except that it may be assigned by the Company to an
acquiror of all or substantially all of the assets of the Company or other
successor to the Company, subject to your rights arising from a Change of
Control as provided in Exhibit A. This Agreement shall be binding upon and inure
to the benefit of you, your legal representatives, heirs and distributees, and
shall be binding upon and inure to the benefit of the Company, its successors
and assigns.
15. NO MITIGATION REQUIRED. Upon a termination of your employment by
the Company without Cause pursuant to Section 8(g) or upon a Change of Control
pursuant to Exhibit A, you shall have no obligation to seek other employment but
shall not be prohibited from doing so, and no compensation paid to you as the
result of any other employment shall reduce any payment required to be made by
the Company hereunder.
16. GOVERNING LAW. All questions pertaining to the validity,
construction, execution and performance of this Agreement shall be construed and
governed in accordance with the laws of the Commonwealth of Pennsylvania,
without giving effect to the conflicts or choice of law provisions thereof.
17. NONDISPARAGEMENT. You agree not to publicly or privately disparage
the Company, its personnel, products or services either during or upon
termination of your employment by the Company.
18. SURVIVAL. All of the provisions of this Agreement that by their
terms are to be performed or that otherwise are to endure after the termination
of your employment by the Company shall survive the termination of your
employment and shall continue in effect for the respective periods therein
provided or contemplated.
19. HEADINGS. The headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
20. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
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If you are in agreement with the foregoing, please sign the duplicate
original in the space provided below and return it to the Company.
C&D TECHNOLOGIES, INC.
By:/s/ William Harral, III
----------------------------
Title: Chairman of the Board
of Directors
----------------------------
Agreed as of the date
above written:
/s/ Wade H. Roberts, Jr.
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Wade H. Roberts, Jr.
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EXHIBIT A
TO EMPLOYMENT AGREEMENT (THE "AGREEMENT")
OF WADE H. ROBERTS, JR. ("EXECUTIVE")
-----------------------------------------
(Capitalized terms used herein and not otherwise defined have the meanings given
to them in the Agreement.)
I. SPECIAL TERMINATION PROVISIONS. In the event a Change of Control (as defined
below) occurs, and within 24 months after such Change of Control: (a) the
Executive's employment with the Company is terminated by the Executive pursuant
to a Termination for Good Reason (as defined below); or (b) the Executive's
employment with the Company is terminated by the Company for any reason other
than death, disability or for Cause pursuant to Sections 8(a), (b) or (c) of the
Agreement; or (c) the Agreement is not renewed due to a Termination Notice given
by the Company, as provided in Section 1 of the Agreement (the events under
clauses (a), (b) and (c) herein collectively called a "Change of Control
Termination"), the Executive shall be entitled to receive the payments and
benefits set forth in Section III below in consideration of the Executive's
agreements under the Agreement, including but not limited to the Executive's
agreement not to compete with the Company for a period of two years after a
Change of Control pursuant to Section 5(a) of the Agreement and the Executive's
execution of the Release contemplated by Section 8(h) of the Agreement.
II. DEFINITIONS.
(a) CHANGE OF CONTROL. For purposes of the Agreement, a "Change of
Control" shall be deemed to have occurred if: (i) any person (as defined in
Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and as used in Sections 13(d) and 14(d) thereof)), excluding the
Company, any "Subsidiary" and any employee benefit plan sponsored or maintained
by the Company or any Subsidiary (including any trustee of any such plan acting
in his capacity as trustee), but including a "group" as defined in Section
13(d)(3) of the Exchange Act, becomes the beneficial owner (as defined in Rule
13d-3 under the Exchange Act) of shares of the Company having at least 30% of
the total number of votes that may be cast for the election of directors of the
Company; (ii) the stockholders of the Company shall approve any merger or other
business combination of the Company, sale of all or substantially all of the
Company's assets or combination of the foregoing transactions (a "Transaction"),
other than a Transaction involving only the Company and one or more of its
Subsidiaries, or a Transaction immediately following which the stockholders of
the Company immediately prior to the Transaction continue to have a majority of
the voting power in the resulting entity (excluding for this purpose any
stockholder of the Company owning directly or indirectly more than 10% of the
shares of the other company involved in the Transaction) and no person is the
beneficial owner of at least 30% of the shares of the resulting entity as
contemplated by Section II(a)(i) above; or (iii) within any 24-month period
beginning on or after the date hereof, the persons who were directors of the
Company immediately before the beginning of such period (the "Incumbent
Directors") shall cease (for any reason other than death) to constitute at least
a majority of the Board of Directors of the Company or the board of directors of
any successor to the Company, provided that any director who was not a director
as of the date hereof
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shall be deemed to be an Incumbent Director if such director was elected to the
Board by, or on the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent Directors either
actually or by prior operation of this Section II(a)(iii), unless such election,
recommendation or approval was the result of an actual or threatened election
contest of the type contemplated by Regulation 14a-11 promulgated under the
Exchange Act or any successor provision. Notwithstanding the foregoing, no
Change of Control of the Company shall be deemed to have occurred for purposes
of this Agreement by reason of any actions or events in which the Executive
participates in a capacity other than in his capacity as an executive or
director of the Company.
(b) TERMINATION FOR GOOD REASON. For purposes of the Agreement, a
"Termination for Good Reason" means a termination by the Executive by written
notice given within 90 days after the occurrence of the Good Reason event. A
notice of Termination for Good Reason shall indicate the specific termination
provision in Section II(c) relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for Termination for Good
Reason. The failure by the Executive to set forth in such notice any facts or
circumstances which contribute to the showing of Good Reason shall not waive any
right of Executive hereunder or preclude the Executive from asserting such fact
or circumstance in enforcing his rights hereunder. The notice of Termination for
Good Reason shall provide for a date of termination not less than 10 nor more
than 60 days after the date such Notice of Termination for Good Reason is given.
(c) GOOD REASON. For purposes of the Agreement, "Good Reason" shall
mean the occurrence, without the Executive's express written consent, of any of
the following circumstances, unless such circumstances are fully corrected prior
to the date of termination specified in the notice of Termination for Good
Reason as contemplated in Section II(b) above: (i) any material diminution of
the Executive's positions, duties or responsibilities hereunder (except in each
case in connection with the termination of the Executive's employment for Cause
pursuant to Section 8(c) of the Agreement or due to disability or death pursuant
to Sections 8(a) or 8(b) of the Agreement, or temporarily as a result of
Executive's illness or other absence), or the assignment to the Executive of
duties or responsibilities that are inconsistent with the Executive's position
under the Agreement at the time of a Change of Control; (ii) removal of the
Executive from, or the nonreelection of the Executive to, the officer positions
with the Company specified in the Agreement; (iii) relocation of the Company's
principal executive offices to a location more than 25 miles from its location
at the time of the Change of Control; (iv) failure by the Company, after a
Change of Control, (A) to continue any bonus plan, program or arrangement in
which the Executive is entitled to participate immediately prior to the Change
of Control (the "Bonus Plans"), provided that any such Bonus Plans may be
modified at the Company's discretion from time to time but shall be deemed
terminated if (x) any such plan does not remain substantially in the form in
effect prior to such modification and (y) if plans providing the Executive with
substantially similar benefits are not substituted therefor ("Substitute
Plans"), or (B) to continue the Executive as a participant in the Bonus Plans
and Substitute Plans on at least the same basis as to potential amount of the
bonus and substantially the same level of criteria for achievability thereof as
the Executive participated in immediately prior to any change in such plans or
awards, in accordance with the Bonus Plans and the Substitute Plans; (v) any
material breach by the Company of any provisions of the Agreement; (vi) if the
Executive
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is on the Board of Directors at the time of a Change of Control, the Executive's
removal from or failure to be reelected to the Board of Directors thereafter; or
(vii) failure of any successor to the Company to promptly acknowledge in writing
the obligations of the Company hereunder.
III. PAYMENTS AND BENEFITS. Upon a Change of Control Termination, as provided in
Section I above, the Company shall pay or provide the Executive the following
payments and benefits:
(a) The Company shall pay to the Executive all Accrued Obligations in a
lump sum within five business days after the date of termination.
(b) The Company shall pay to the Executive as severance pay, not later
than the tenth day following the date of the Executive's execution and delivery
of the Release required pursuant to Section 8(h) of this Agreement:
(i) a lump sum in an amount equal to three years of the
Executive's Base Salary; and
(ii) a lump sum payment in an amount equal to three of the
Executive's annual incentive bonuses, such payment to be equal to the greater of
(i) the amount of all incentive bonuses paid to the Executive with respect to
each of the three most recently completed fiscal years of the Company for which
a bonus has been paid or (ii) the incentive bonus paid to the Executive with
respect to the two most recently completed fiscal years of the Company for which
a bonus has been paid plus an amount equal to the Executive's Target Bonus (as
hereinafter defined); provided, however, that if the Executive has been employed
by the Company for less than three years, such payment shall be equal to the
greater of (x) the amount of the incentive bonuses paid to the Executive with
respect to the two most recently completed fiscal years of the Company for which
a bonus has been paid plus the Executive's Target Bonus or (y) the amount of the
Executive's Target Bonus multiplied by three. The term "Target Bonus" shall mean
the incentive bonus that would have been payable for the fiscal year that
includes the date on which the Executive's employment terminates under the
incentive bonus program in effect as of the date of the Change of Control,
assuming that the Executive had been entitled to receive an amount in respect of
such bonus based solely upon his Base Salary and the applicable target
percentage as of the date of termination (or if greater, the Executive's Base
Salary as of the date on which occurred an event giving rise to a Change of
Control Termination), and without regard to actual performance.
(c) The Company shall continue the participation of the Executive and
the Executive's dependents for a period of three years after the date of
termination in all health, medical and accident, life and other welfare plans
(as defined in Section 3(l) of ERISA), in which the Executive was participating
immediately prior to the date of termination, except for any disability plans,
and shall provide the Executive with a leased automobile pursuant to Section
2(g) of the Agreement for such period; provided, however, that to the extent the
Company's plans do not permit such continued participation or such participation
would have an adverse tax impact on such plans or on the other participants in
such plans, the Company may instead provide materially equivalent benefits to
the Executive outside of such plans; provided, further, that under such
circumstances, (i) medical
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insurance benefits may be provided by the Company paying any COBRA premiums
(COBRA coverage, in any event, to be measured from the date of termination of
employment) and (ii) if the Company is unable to continue the Executive's life
insurance coverage, it shall pay the Executive an amount equal to three times
the premium paid during the year prior to termination or if the Executive
converts the insurance to an individual policy, the Company shall pay the
premium for such insurance for three years. The Executive shall complete such
forms and take such physical examinations as reasonably requested by the
Company. To the extent the Executive incurs any tax obligation as a result of
the provisions of this paragraph (c) that the Executive would not have incurred
if the Executive remained an employee of the Company and had continued to
participate in the benefit plans as an employee, the Company shall pay to the
Executive, at the time the tax is due, an amount to cover such taxes and the
taxes on the amount paid to cover such taxes.
(d) All outstanding stock options and restricted stock awards that have
been granted to the Executive by the Company at any time but have not yet vested
and upon which vesting depends solely upon the passage of time, shall
immediately vest or become nonforfeitable, as the case may be. In the event the
foregoing sentence becomes applicable, the Company agrees to cause the Board of
Directors to take all steps necessary to implement the foregoing sentence.
(e) All amounts payable to the Executive upon a Change of Control under
the SERP and the Company's Deferred Compensation Plan shall be paid to the
Executive in accordance with the terms of those plans.
(f) The Company, at its expense, shall provide the Executive with
outplacement services at a level appropriate for the most senior level of
executive employees through an outplacement firm of the Executive's choice for a
period of up to one year after the date of the Change of Control Termination.
(g) (i) In the event that any payment, coverage or benefit
(collectively, the "Covered Benefits") provided to you by the Company or an
Affiliate (as defined below) is or becomes subject to the excise tax imposed
under Section 4999 or any successor provision of the Internal Revenue Code of
1986, as amended (the "Code"), or you incur interest or penalties with respect
to that excise tax (that excise tax, together with any interest and penalties,
are hereinafter collectively referred to as the "Excise Tax"), the Company shall
pay you an additional amount (a "Gross-Up Bonus") at the time or times specified
in Section III(g)(iii)(z) below. The amount of the Gross-Up Bonus shall equal
the quotient determined by dividing (x) the Excise Tax attributable to the
Covered Benefits by (y) one minus the highest marginal income tax rate, where
the term "highest marginal income tax rate" means the sum of the highest
combined local, state and federal personal income tax rates (including any state
unemployment compensation tax rate, any surtax rate as well as the Medicare
hospital insurance tax rate imposed on employees under the Federal Insurance
Contributions Act) as in effect for the calendar year to which the Excise Tax
attributable to the Covered Benefits relates, provided that in determining the
highest tax rate for federal purposes both the deductibility of state and local
income tax payments and the reduction in the deductibility of itemized
deductions shall be taken into account; it being the intention of the parties
hereto that your net after tax position (after taking into account any interest
or penalties imposed with respect to such taxes) upon receipt of the
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Covered Benefits is no less advantageous to you than the net after tax position
you would have had if Section 4999 of the Code had not been applicable to any
portion of the Covered Benefits.
(ii) All determinations to be made under this Section III(g),
including the determination of whether an Excise Tax is payable and the amount
thereof, shall be made by a law firm practicing in the Philadelphia,
Pennsylvania metropolitan area that is knowledgeable in tax law matters, which
firm shall be selected and paid for by the Company and acceptable to the
Executive. If tax counsel's determinations are not finally accepted by the
Internal Revenue Service upon audit, then appropriate adjustments shall be
computed (with a Gross Up Bonus, if applicable) by that tax counsel based upon
the final amount of the Excise Tax so determined.
(iii) For purposes of this Section III(g):
(x) An "Affiliate" shall mean any successor to the
Company, any member of an affiliated group including the Company (determining
using the definition in Section 1504 of the Code) or any entity that becomes
a member of such an affiliated group as a result of the transaction causing the
Change of Control.
(y) When determining the amount of the Gross-Up Bonus,
you will be deemed to have otherwise allowable deductions for federal, state
and local tax purposes at least equal to those disallowed because of the
inclusion of the Gross-Up Bonus in your adjusted gross income.
(z) The portion of the Gross-Up Bonus attributable to
a Covered Benefit shall be paid to you within 10 business days following the
provision to you of the Covered Benefit. In the event that the amount of Excise
Tax due exceeds the amount of Excise Tax determined by tax counsel, the Company
shall pay you an additional Gross-Up Bonus in respect of that excess at the time
that the amount of the excess is determined under Section III(g)(ii). In the
event the amount of Excise Tax due is less than the amount of Excise Tax
determined by tax counsel, you shall repay the Company the portion of the Gross-
Up Bonus attributable thereto at the time that the amount of the reduction in
Excise Tax is determined under Section III(g)(ii); provided, however, that if
any portion of the amount you must repay to the Company has been paid to any
federal, state or local tax authority, your repayment of that portion shall
be postponed until the tax authority has actually refunded or credited that
amount to you.
(h) Upon the occurrence of a Change of Control, if the Company fails to
perform any of its obligations under this Agreement or the Company or any other
person asserts the invalidity of any provision of this Agreement and the
Executive incurs any costs in successfully enforcing or defending any of the
provisions of this Agreement, including legal fees and expenses and court costs,
the Company shall reimburse the Executive for all such costs incurred by him.
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EXHIBIT B
RELEASE
This Release is made this _____ day of _______________, ____ by and
between C&D Technologies, Inc. ("Employer") and _________________ ("Employee").
Recitals:
WHEREAS, the parties are parties to an Employment Agreement (the
"Employment Agreement") dated __________, pursuant to which Employee was
employed by Employer; and
WHEREAS, the Employment Agreement has terminated; and
WHEREAS, your execution and delivery of this Release is a condition to
the Employer's obligations to pay certain compensation and benefits to you 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 _____________________, ____, 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 prior to 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 __ 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
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all claims for wrongful discharge, breach of contract, either express or
implied, interference with 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 the Employment Agreement 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 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 employ-
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ment with Employer. Employee certifies that Employee has not kept the originals
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 aforesaid
consideration.
IN WITNESS WHEREOF, Employee and the authorized representative of
Employer have executed this Release on the dates indicated below:
C&D TECHNOLOGIES, INC.
Dated:_____________________ By:______________________________
Title:__________________________
Dated:_____________________ ______________________________
(Name of Employee)
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ENDORSEMENT
I, ___________________________________, hereby acknowledge that I was
given 21 days to consider the foregoing Release and voluntarily chose to sign
the Release prior to the expiration of the 21-day period.
I declare under penalty of perjury under the laws of the Commonwealth
of Pennsylvania that the foregoing is true and correct.
EXECUTED this ________ day of __________________, ____, at
_______________________________________, Pennsylvania.
---------------------------------
(Name of Employee)
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