SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 11-K
(Mark One):
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2002
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED).
For the transition period from _____________ to ________________
Commission file number 1-9389
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below: C&D TECHNOLOGIES SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
C&D TECHNOLOGIES, INC.
1400 UNION MEETING ROAD
BLUE BELL, PA 19422
C&D Technologies
Savings Plan
Financial Statements
December 31, 2002 and 2001 and
Supplemental Schedule
December 31, 2002
C&D Technologies Savings Plan
Contents
December 31, 2002 and 2001
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Page(s)
Report of Independent Auditors............................................1
Financial Statements
Statements of Net Assets Available for Benefits...........................2
Statements of Changes in Net Assets Available for Benefits................3
Notes to Financial Statements............................................4-8
Supplemental Schedule
Schedule H, Part IV, Item 4i* - Schedule of Assets (Held at End of Year)..9
* Refers to item numbers in Form 5500 (Annual Return/Report of Employee
Benefit Plan) for the plan year ended December 31, 2002.
Report of Independent Auditors
To the Participants and Administrator
of the C&D Technologies Savings Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the C&D Technologies Savings Plan (the "Plan") at December 31, 2002 and 2001,
and the changes in net assets available for benefits for the years then ended in
conformity with accounting principles generally accepted in the United States of
America. These financial statements are the responsibility of the Plan's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. This
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/PricewaterhouseCoopers LLP
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June 23, 2003
1
C&D Technologies Savings Plan
Statements of Net Assets Available for Benefits
December 31, 2002 and 2001
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2002 2001
Assets
Investments $31,834,749 $35,714,772
Contributions receivable
Participant 81,893 98,527
Employer 950,847 729,741
Receivable for investments sold 138 188,186
---------------- ----------------
Total assets 32,867,627 36,731,226
---------------- ----------------
Liabilities
Payable for investments purchased 83,725 27,771
---------------- ----------------
Total liabilities 83,725 27,771
---------------- ----------------
Net assets available for benefits $32,783,902 $36,703,455
================ ================
The accompanying notes are an integral part of these financial statements.
2
C&D Technologies Savings Plan
Statements of Changes in Net Assets Available for Benefits
Years Ended December 31, 2002 and 2001
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2002 2001
Additions
Net depreciation in fair value of investments $(5,075,720) $(4,434,930)
Interest income 33,911 33,284
Dividend income 797,769 1,045,373
Employer contributions 1,777,222 1,695,536
Participant contributions 2,541,381 3,326,532
Roll-over contributions 263,000 465,827
---------------- ----------------
Total additions 337,563 2,131,622
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Deductions
Benefits paid to participants 4,162,393 2,173,769
Administrative expenses 94,723 69,022
---------------- ----------------
Total deductions 4,257,116 2,242,791
---------------- ----------------
Net decrease (3,919,553) (111,169)
Net assets available for benefits
Beginning of year 36,703,455 36,814,624
---------------- ----------------
End of year $32,783,902 $36,703,455
================ ================
The accompanying notes are an integral part of these financial statements.
3
C&D Technologies Savings Plan
Notes to Financial Statements
December 31, 2002 and 2001
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1. Description of Plan
General
The following description of the C&D Technologies Savings Plan ("the Plan")
provides only general information. Participants should refer to the
official Plan document for a more complete description of the Plan's
provisions.
The Plan is a defined contribution plan in which certain salaried and
hourly employees of C&D Technologies, Inc. (the "Company") are eligible to
participate, with the condition that salaried and hourly employees whose
terms and conditions of employment are governed by a collective bargaining
agreement are only eligible to participate if that agreement states that
they are eligible. The Plan is subject to the provisions of the Employee
Retirement Security Act of 1974 ("ERISA").
Contributions
The participants may make pre-tax contributions to the Plan in any whole
percentage of compensation ranging from 1 percent to 50 percent.
Participants may make voluntary after-tax contributions, but in no event
may pre-tax, after-tax and employer contributions exceed 50 percent of
compensation. The Plan currently offers 20 mutual funds and the common
stock of the Company as investment options for participants.
The Company matches certain salaried employee's contributions on the basis
of $.50 for each $1.00 in amounts up to 8 percent of compensation. This
matching company contribution is invested according to the participant's
allocations.
Effective only for the Plan year beginning on January 1, 2001, the Company
shall make a mandatory profit sharing contribution of 4 percent of the
participant's annual compensation for certain salaried employees. The
employees eligible for this profit sharing contribution are those salaried
employees hired on or after January 1, 2001 and those salaried employees
hired during calendar year 2000 who opted out of the C&D Technologies
Pension plan for salaried employees prior to January 1, 2001.
Effective for Plan years beginning after December 31, 2001, the Company may
make a discretionary salary profit sharing contribution not to exceed 8
percent of the participant's annual compensation. For the Plan year ending
December 31, 2002, the Company made a profit sharing contribution of 3 per-
cent of the participant's annual compensation for certain employees.
For those participants who have not attained age 50 by the end of the Plan
year, 50 percent of this profit sharing contribution is invested according
to the participant's allocation, with the remaining 50 percent invested in
the common stock of the Company.
4
The Company shall make a mandatory hourly profit sharing contribution on
behalf of each eligible hourly employee equal to the appropriate percentage
of his/her compensation which varies based upon his/her years of vesting
service, as illustrated in the following table:
Years of % of
Vesting Service Compensation
0-5 2.5%
6-10 3.0%
11-20 3.5%
21 and greater 4.5%
For those participants who have not attained age 50 by the end of the Plan
year, a portion of this profit sharing contribution equal to 0.5 percent of
the participant's annual compensation is invested in the Company common
stock, with the remainder of the contribution invested according to the
participant's allocation.
Both salaried and hourly participants who have attained age 50 by the end
of the Plan year have 100 percent of the profit sharing contribution
invested according to their allocation, and have the ability to transfer
any portion of their account invested in Company common stock to other
investment options.
Additional employer contributions may be made upon the discretion of the
Board of Directors. Participants are eligible to receive any discretionary
contributions if they have completed 1,000 hours of service during the plan
year and are employed by the Company on the last day of the plan year.
Participant Accounts
Each participant's account is credited with the participant's contribution,
the Company's contribution and an allocation of earnings and administrative
expenses. Allocations are based on participant earnings or account
balances, as defined. The benefit to which a participant is entitled is a
benefit that can be provided from participant's vested account.
Vesting
Participants are 100 percent vested in their own contributions and the
earnings thereon. Vesting in the Company's contributions and earnings
thereon is based on years of continuous service. An hourly participant is
100 percent vested after five years of service as defined in the Plan. A
salaried participant is 100 percent vested after three years of service as
defined in the Plan. Any amount not vested at termination will be forfeited
upon the occurrence of five consecutive 1-year breaks-in-service following
a participant's termination of employment.
Forfeitures
At December 31, 2002, forfeited nonvested accounts totaled $112,691. These
accounts will be used to reduce future employer contributions or Plan
expenses. Also, in 2002, Plan expenses were reduced by $85,965 from
forfeited nonvested accounts.
Payment of Benefits
On termination of service due to death, disability or retirement, a
participant may elect to receive a lump sum amount in cash equal to the
value of the participant's vested interest in his or her account.
Participants' accounts with $5,000 or less may be paid directly to
participants or as a direct rollover to an IRA or another plan in a single
lump sum.
5
Participant Loans
Participants may borrow from their vested contribution balances. The loan
is limited to the lesser of 50 percent of the vested contributions or
$50,000. The minimum loan amount is $1,000. Loans are repaid through
regular payroll deductions. Interest on the loans is charged at a rate no
greater than 2 percent over the Prime Rate at the loan origination date.
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared on the accrual basis of
accounting.
Investment Valuation and Income Recognition
The Plan's investments are stated at fair value. Quoted market prices are
used to value investments. Shares of mutual funds are valued at the net
asset value of shares held by the Plan at year-end. The C&D Technologies
Stock Fund is valued at its year-end unit closing price (comprised of
year-end market price plus uninvested cash position). Participant loans are
valued at cost which approximates fair value.
Purchases and sales are recorded on a trade-date basis. Interest income is
accrued when earned. Dividend income is recorded on the ex-dividend date.
Capital gain distributions are included in dividend income.
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments, which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
Expenses
Certain administrative expenses are paid by the Company.
Use of Estimates
The preparation of the Plan's financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities and changes therein, and disclosures of contingent assets and
liabilities. Actual results could differ from those estimates.
Payment of Benefits
Benefits are recorded when paid.
Risks and Uncertainties
The Plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds, and other investment
securities. Investment securities are exposed to various risks, such as
interest rate, market and credit risks. Due to the level of risk associated
with certain investment securities, it is at least reasonably possible that
changes in the values of investment securities will occur in the near term
and that such changes could materially affect participants' account
balances and the amounts reported in the statement of net assets available
for benefits.
6
3. Investments
The following presents investments that represent 5 percent or more of the
Plan's net assets.
2002 2001
Fidelity Magellan Fund, 73,798 and 77,256 shares, respectively $5,827,109 $8,051,613
Fidelity Managed Income Portfolio, 7,305,296 and 7,733,027
shares, respectively 7,305,296 7,733,027
Fidelity Growth & Income Fund, 156,825 and 175,577 shares,
respectively 4,753,376 6,563,072
C&D Technologies Stock Fund, 145,123 and 110,255 units,
respectively 2,755,038 * 2,519,327 *
Fidelity Puritan Fund, 109,578 and 115,649 shares, respectively 1,730,241 2,043,510
Morgan Stanley Investments Fixed Income Fund, 134,417
shares 1,778,886 -
Fidelity Low-Priced Stock Fund, 78,992 shares 1,988,240 -
* Includes nonparticipant directed amounts
During 2002 and 2001, the Plan's investments depreciated in value as
follows:
2002 2001
Mutual Funds $(4,412,422) $(2,571,697)
Common stock (663,298) (1,863,233)
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$(5,075,720) $(4,434,930)
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4. Nonparticipant-Directed Investments
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed investments
is as follows:
December 31,
2002 2001
---- ----
Net assets
Company common stock $344,466 $126,904
------- -------
Year Ended
December 31, 2002
-----------------
Changes in net assets
Employer contributions $235,313
Net depreciation in fair value (15,800)
Dividend income 1,526
Benefits paid to participants (3,352)
Administrative expenses (125)
--------
Net increase $217,562
--------
7
5. Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
termination, participants will become 100 percent vested in their accounts.
6. Plan Tax Status
The Plan has received a favorable determination letter dated May 22, 2002
from the Internal Revenue Service ("IRS") advising that the Plan
constitutes a qualified trust under Section 401(a) of the Internal Revenue
Code ("IRC"), and is therefore exempt from federal income taxes under
provisions of Section 501(a). The Plan Administrator believes that the Plan
is designed and is currently being operated in compliance with the
applicable requirements of the IRC.
7. Related Party Transactions
Certain Plan investments are shares of mutual funds managed by Fidelity
Management Trust Co. ("Fidelity"). Fidelity is the trustee as defined by
the Plan and, therefore, these transactions qualify as party-in-interest
transactions.
The Plan is interpreted, administered and operated by a committee comprised
of the Company's Vice President, Finance & Chief Financial Officer, Vice
President of Human Resources and Vice President - Environmental, Health and
Safety.
During 2002 and 2001, the Plan had purchases of C&D Technologies, Inc.
common stock in the amount of $3,855,215 and $4,381,848, respectively, and
sales of C&D Technologies, Inc. common stock in the amount of $3,227,805
and $6,006,162, respectively.
8
SUPPLEMENTAL SCHEDULE
C&D Technologies Savings Plan
Schedule H, Part IV, Item 4i - Schedule of Assets (Held at End of Year)
December 31, 2002
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Description of Investment
Identity of Party Involved Rate of Interest Cost Fair Value
* Fidelity Institutional Retirement
Services Company Magellan Fund $ 5,827,109
Growth & Income Fund 4,753,376
Puritan Fund 1,730,241
Low-Priced Stock Fund 1,988,240
Diversified International Fund 805,546
Spartan U.S. Equity Index Fund 1,382,662
Fidelity Fund 103,232
Government Income Fund 492,300
Dividend Growth Fund 229,422
Freedom Income Fund 54,063
Freedom 2000 Fund 233,844
Freedom 2010 Fund 756,236
Freedom 2020 Fund 681,165
Freedom 2030 Fund 493,089
Freedom 2040 Fund 387
Managed Income Portfolio Fund 7,305,296
Morgan Stanley Investments MSIFT Fixed Income Fund 1,778,886
* C&D Technologies, Inc. C&D Technologies Stock Fund $3,102,958 2,755,038
Participant Loans Interest, 6.25 - 11.5%, maturity
of 1-10 years 464,617
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Total investments $31,834,749
----------------
----------------
* Party-in-interest
9
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the C&D Technologies Pension Administration Committee has duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
C&D Technologies Savings Plan
Date: June 26, 2003 By: /s/ Stephen E. Markert, Jr.
---------------------------
Stephen E. Markert, Jr.
Vice President, Finance & Chief
Financial Officer
(C&D Technologies Pension
Administration Committee, Plan
Administrator)
EXHIBIT INDEX
23. Consent of Independent Accountants
99.1 Certification of the Vice President of Human Resources (C&D
Technologies Pension Administration Committee, Plan Administrator)
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.2 Certification of the Vice President, Finance & Chief Financial
Officer (C&D Technologies Pension Administration Committee, Plan
Administrator) pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.