UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 1, 2006
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C&D Technologies, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-9389 13-3314599
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(State or other (Commission file number) (IRS employer
jurisdiction of identification
incorporation) no.)
1400 Union Meeting Road,
Blue Bell, Pennsylvania 19422
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (215) 619-2700
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N/A
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
On February 1, 2006, C&D Technologies, Inc (the "Company") entered into an
Amendment No. 1 to the Employment Agreement (the "Amendment to the Employment
Agreement") with Dr. Jeffrey A. Graves, President and Chief Executive Officer,
and employment agreements (the "Employment Agreements") with each of the
following named executive officers: Ian J. Harvie, Vice President and Chief
Financial Officer; James D. Dee, Vice President, General Counsel and Corporate
Secretary; Charles Giesige, Vice President and General Manager - Standby Power &
Motive Power Divisions; and William Bachrach, Vice President and General Manager
- - Power Electronics Division (the "Executives").
Amendment to the Employment Agreement with Dr. Graves
The Amendment to the Employment Agreement with Dr. Graves provides that
upon termination by the Company without cause other than as a result of death or
disability, or termination by Dr. Graves which is a breach termination, the
Company shall continue to pay Dr. Graves his base salary at the rate in effect
on the date of termination for a period of two years but any such base salary
payments shall commence in the form of normal payroll installments through the
period ending as of the end of the second month following the later of (A) the
calendar year in which his termination of employment occurs or (B) the taxable
year of the Company in which his termination of employment occurs. The balance
of such base salary payments shall be made in a single lump sum payable within
the fifteen day period immediately following the end of the month in which
installment payments are to cease. Additionally, any cash payment equal to his
targeted bonus amount as defined in Dr. Graves' original employment agreement
shall be paid no later than the 15th day of the third month following the later
of (A) the calendar year in which his termination of employment occurs or (B)
the taxable year of the Company in which his termination of employment occurs.
The Amendment to the Employment Agreement with Dr. Graves also provides
that the Company shall pay to Dr. Graves within fifteen days following a change
of control termination any lump sum amounts as provided in his original
employment agreement. The Amendment to the Employment Agreement further provides
that the gross-up payment as defined his original employment agreement shall
include all additional taxes and interest imposed under Code Section
409A(a)(1)(B) on the gross-up payment and any severance payment made to Dr.
Graves. Additionally, the Amendment to the Employment Agreement provides that
any gross-up payment shall be paid by the Company to Dr. Graves within five
business days of the receipt of the accounting firm's determination of the
gross-up payment, which determination shall be made no later than the end of the
second month following the later of (1) the calendar year in which Dr. Graves
employment with the Company terminates and (2) the taxable year of the Company
in which Dr. Graves' employment with the Company terminates. In the event that
such determination can not be made within such period, payment may be made as
soon as practicable after such determination can be made.
Employment Agreements with Messrs. Harvie, Dee, Giesige and Bachrach
The Employment Agreements set forth the basic terms of employment for each
Executive, including base salary, bonus and benefits to which each Executive is
entitled during the term of employment and in the event that employment is
terminated for certain reasons. Each Executive's annual base salary as defined
in his respective Employment Agreement is as follows: Mr. Harvie: $335,000; Mr.
Dee: $250,000; Mr. Giesige: $235,000; and Mr. Bachrach: $225,000. The Employment
Agreements are described in further detail below.
Each of the Employment Agreements with Messrs. Harvie, Dee, Giesige and
Bachrach provides that employment shall continue in effect until either party
shall give to the other party at least 30 days prior written notice of the
termination of the Employment Agreement or until it is terminated due to death,
disability or for cause as defined in the Employment Agreements.
Under their Employment Agreements, Messrs. Harvie, Dee, Giesige and
Bachrach shall each be entitled: (i) to participate in the Company's Management
Incentive Compensation Plan or any successor thereto each year in accordance
with criteria and for amounts approved by the Company's Board of Directors,
except as may otherwise be delegated to the Company's Compensation Committee or
other relevant committee (Executive has a minimum targeted bonus for each fiscal
year of 35% of his base salary with the actual payment of any bonus being
dependent on the achievement of targeted objectives except as otherwise set
forth in Executive's Employment Agreement), and (ii) to be granted options to
acquire stock of the Company or other equity awards, to the extent (if any)
approved by the Compensation Committee or the relevant committee, under the
Company's stock option or equity incentive plans in effect from time to time.
Benefits Provided Upon Termination of Employment
Each of the Employment Agreements with Messrs. Harvie, Dee, Giesige and
Bachrach, respectively, provide for certain benefits in the event of termination
of employment. In the event that employment is terminated for any reason, (i)
Executive or his estate, as applicable, shall be paid within fifteen business
days after the date of termination (A) his base salary through the date of
termination, (B) any then-unpaid annual bonus or other incentive compensation
that may have earned pursuant to the terms of any applicable incentive
compensation or bonus plan of the Company with respect to any fiscal year or
other performance period completed prior to the date of termination, and (C) any
then-unused accrued vacation pay; (ii) Executive, his beneficiaries and/or his
estate, as applicable, shall be entitled to any payments and benefits under the
benefits and incentive plans and perquisite programs of the Company, in
accordance with the respective terms of those plans and perquisite programs
(including without limitation, any conversion option available to him under the
Company's life insurance plan(s)); and (iii) Executive or his estate, as
applicable, shall be reimbursed for any business expenses incurred prior to
termination.
In the event that employment is terminated by the Company without cause
(other than as a result of death or disability), or employment is terminated by
employee due to a material breach by the Company either prior to a change of
control (as defined in each of Messrs. Harvie, Dee, Giesige and Bachrach's
respective Employment Agreements) or following two years after the occurrence of
a change of control, of the provisions of the Employment Agreement, the Company
shall pay Executive an amount equal to his base salary at the rate in effect on
the date of termination. Payment of such amount will commence in the form of
normal payroll installments through the period ending as of the end of the
second month following the later of (A) the calendar year in which the
termination of employment occurs or (B) the taxable year of the Company in which
the termination of employment occurs. The balance of such payments shall be made
in a single lump sum payable within the fifteen day period immediately following
the end of the month in which installment payments are to cease. If Executive
terminates employment on or after May 1st of a fiscal year, Executive shall be
entitled to an annual bonus for that fiscal year, based on the actual bonus
earned under the applicable bonus plan for the fiscal year, pro-rated to reflect
the number of business days during the fiscal year in which Executive was
employed by the Company. This bonus shall be paid only when and if bonuses are
paid to other senior executives of the Company for such year, but, if any such
bonus is payable, it shall be paid no later than the 15th day of the third month
following the later of (A) the calendar year in which the termination of
employment occurs or (B) the taxable year of the Company in which the
termination of employment occurs.
Benefits Provided Upon a Change in Control
A change of control termination means the occurrence of any of the
following within 24 months after a 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 in each of Messrs. Harvie, Dee, Giesige
and Bachrach's respective Employment Agreements); or (b) the Executive's
employment with the Company is terminated by the Company for any reason other
than death, disability or for cause. If Executive's employment is terminated
within 24 months after a change of control occurs, the Executive shall be
entitled to receive, subject to the execution of a release, the payments and
benefits set forth below in consideration of the Executive's agreements under
their Employment Agreement, including but not limited to the Executive's
agreement not to compete with the Company for a period of one year after a
change of control termination pursuant to Section 5(a) of the Employment
Agreement; provided, however, that any payment made or benefit provided upon a
change of control shall be reduced by any amount paid or payable to the
Executive and/or the Executive's family with respect to the same type of payment
or benefit under any other plan maintained by the Company to avoid duplication
of payments or benefits:
(a) The Company shall pay to the Executive within fifteen days following
the change of control termination, a lump sum amount equal to (i) two times the
sum of (x) the base salary as in effect immediately before the date of
termination (disregarding any reduction thereof in violation of Section 2(a) of
the Employment Agreement) and (y) the annual bonus amount. The "annual bonus
amount" shall mean the greater of (i) the average of the annual bonuses paid to
the Executive with respect to each of the three most recently completed fiscal
years of the Company before the date of termination for which a bonus has been
paid or (ii) the Executive's targeted bonus amount. The Executive's "targeted
bonus amount" shall mean (x) the higher of 35% and the percentage of the
Executive's targeted bonus in effect before the date of termination for purposes
of determining the Executive's annual bonus for the year in which the
termination occurs, times (y) the amount of the Executive's base salary as in
effect for the year in which the Executive's termination occurs (disregarding
any reduction thereof in violation of Section 2(a) of the Employment Agreement).
(b) The Company shall for two years after the date of the change of control
termination provide the Executive and the Executive's eligible beneficiaries (if
applicable) with Welfare Benefits (as defined below) provided to the Executive
prior to the change of control termination, other than disability insurance and
severance. Notwithstanding the foregoing, to the extent the Company's plans
providing Welfare Benefits do not permit the continued participation by the
Executive and/or the Executive's eligible beneficiaries 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 the Executive and/or the Executive's
eligible beneficiaries outside such plans (which, in the case of medical
insurance benefits, may be provided by the Company paying a portion of the
premium for the continuation of such medical benefits pursuant to the provisions
of the Consolidated Omnibus Budget Reconciliation Act ("COBRA") which is equal
to the portion of the premium it then pays for active executive employees'
medical premiums. The Executive's entitlement to COBRA coverage shall in any
event be measured from the date of termination of employment. Furthermore, if
the Company is unable to continue the Executive's life insurance coverage, it
shall pay the Executive an amount equal to the premium paid during the year
prior to termination times the number of months for which such benefits would
have otherwise been continued hereunder. The Executive agrees to complete such
forms and take such physical examinations as may be reasonably requested by the
Company in connection with such life insurance coverage. "Welfare Benefits"
means benefits under all health and medical (other than executive physicals),
life and other welfare plans (as defined in Section 3(l) of the Employee
Retirement Income Security Act of 1974, as amended), in which the Executive was
participating immediately prior to the date of termination, except for
disability plans and severance plans.
(c) All outstanding options and restricted stock awards that have been
granted to the Executive by the Company at any time but have not yet expired or
vested and upon which vesting depends solely upon the Executive's remaining
employed by the Company for a specified period 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.
(d) 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.
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 hereunto duly authorized.
C&D TECHNOLOGIES, INC.
Date: February 7, 2006 By: /s/ James D. Dee
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James D. Dee - Vice President,
General Counsel and Secretary