December 20, 2007
Xxxxxxx X. Xxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Dear Xxxx:
C&D Technologies, Inc., a Delaware corporation (the "Company"),
wishes to continue to employ you in an executive capacity and the Company
desires to encourage such employment by providing certain protections for you by
entering into this Agreement with you, in return for which you agree 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. Your employment under this Agreement shall
continue in effect until either party shall give to the other party at least 30
days prior written notice (or such other notice period as may be specifically
provided for in this Agreement) of the termination of this Agreement (a
"Termination Notice"), or until it is terminated in accordance with Section 8.
If a Termination Notice is given by either party the Company shall, without any
liability to you, have the right, exercisable at any time after such notice is
sent 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. The period during which
you are employed under this Agreement is hereafter referred to as the "Term."
2. Compensation and Benefits.
(a) During the Term, you shall receive a salary for performance of
your obligations under this Agreement at an initial rate of $525,000 per year,
payable in such manner as is consistent with the Company's payroll practices for
executives and subject to increase (but not decrease) by the Board of Directors
in its sole discretion. Such salary, as it may be adjusted from time to time, is
hereinafter referred to as the "Base Salary."
(b) During the Term, you shall have the benefit of and be entitled
to participate in such employee benefit plans and programs, including life,
disability and medical insurance, savings, retirement and other similar plans,
as the Company now has or hereafter may establish from time to time, and in
which you are entitled to participate pursuant to the terms thereof. 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) During the Term, you shall 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 Board of
Directors, except as may otherwise be delegated to the Compensation Committee or
other relevant committee, 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 (all such options
and equity awards, "Awards"). Without limiting the foregoing, you shall have a
minimum targeted bonus for each fiscal year of 55% of your Base Salary (with the
actual payment of any bonus being dependent on your or the Company's achievement
of targeted objectives except as otherwise set forth in this Agreement). Each of
the actual annual bonuses paid to you each year is hereinafter referred to as an
"Annual Bonus."
(d) You shall be entitled to payments and benefits in connection
with a Change of Control Termination (as defined in Exhibit A hereto) and to
certain additional payments if you are subjected to the federal excise tax on
excess parachute payments, as more fully set forth in Exhibit A.
(e) To the extent that any payment hereunder or under any plan,
program or policy is determined to be nonqualified deferred compensation that is
noncompliant with Section 409A ("Section 409A") of the Internal Revenue Code of
1986, as amended (the "Code"), and is therefore subject to additional taxes and
penalties, the Company shall provide you with additional payments as more fully
set forth in Exhibit A. Any reference to Section 409A shall be deemed to include
any applicable guidance that has been provided thereunder.
(f) You shall be entitled to a minimum of four weeks of vacation
each calendar year during the Term. To the extent that Company policy provides
additional vacation days, you shall also be entitled to such additional vacation
days. Any unused vacation days in any one year shall carry over to the next
calendar year.
(f) During the Term, the Company shall provide you with an
automobile allowance of $1,100 per month that you may use for your automobile
expenses. You will be taxed on this allowance and such allowance will be subject
to applicable tax withholdings.
(g) The Company will provide you at its expense with an annual
physical examination each year during the Term.
3. Duties.
(a) During the Term, 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 of the Company may from time to time determine. You
shall report to, and act under the general direction of, the Board of Directors
of the Company. You shall use your best efforts to carry out the instructions of
the Board of Directors of the Company. 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
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additional compensation. In addition, 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. You will review and agree to
comply with the Company's then-current Code of Business Conduct to the same
extent required for other United States-based employees of the Company. You will
perform all of your responsibilities in compliance with all applicable laws. You
acknowledge that in your capacity as principal executive officer of the Company,
you will be expected to execute certain documents on behalf of the Company under
the federal securities laws, which may include documents covering periods prior
to the date of this Agreement. As of the date of this Agreement, you have no
reason to believe that you would not be prepared to execute all documents
required for signature by the Company's principal executive officer (e.g., the
Company's Annual Report on Form 10-K for the fiscal year ended January 31,
2007), assuming that the Company's principal financial officer and certifying
financial and other employees of the Company were also prepared to execute or
certify such documents as the case may be.
(b) During the Term, 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. Service on any board of
directors other than those of the Company and its subsidiaries must be approved,
in advance, by the Board of Directors of the Company.
(c) During the Term, 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 during the Term in connection with your employment upon
presentation of appropriate documentation therefor in accordance with the
Company's expense reimbursement practices. In the event during the Term the
Company's principal executive offices are relocated to a location that increases
your commute to work by more than 35 miles, the Company shall reimburse your
moving expenses (including reasonable costs relating to interim living
accommodations).
5. Restrictive Covenants.
(a) During the Term, 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 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") as of the time your
employment with the Company ceases; provided, however, that (i) nothing herein
shall prevent you from investing in up to 5% of the securities of
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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 by, or otherwise rendering services to, any business other than a
Competitive Business following the termination of your employment with the
Company. The 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 the provisions 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 your employment by the Company hereunder 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,
know-how, 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 and for the applicable
Restricted Period after the termination of your employment with 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 then 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, or solicit or assist any Competitive Business in employing or
retaining as a consultant any
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individual who is then an employee of the Company or any subsidiary or affiliate
or who was employed by the Company or any subsidiary or affiliate during the
preceding twelve-month period, or (iii) otherwise interfere in any 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 non-competition 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 of Term. The Term shall terminate upon the
following terms and conditions:
(a) The Term shall automatically terminate upon your death.
(b) The Term may be terminated by the Company upon your
Disability. For purposes of this Agreement, "Disability" shall mean your
inability, due to reasons of physical or
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mental health, to discharge properly a substantial portion of your duties
hereunder for any 180 days (whether or not consecutive) during any period of 365
consecutive days, as determined in 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) The Term shall terminate immediately if the Company terminates
your employment 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 and materially affects the Company; (iv) your continued breach of
any of your material 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 willful misconduct with respect to
your duties or gross misfeasance of office.
For purposes of this Section 8(c), no act or failure to act,
on your part shall be considered "willful" unless it is done, or omitted to be
done, by you in bad faith or without reasonable belief that your action or
omission was in the best interests of the Company. Any act, or failure to act,
based upon authority given pursuant to a resolution duly adopted by the Board of
Directors or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by you in good faith
and in the best interests of the Company. Your termination of employment shall
not be deemed to be for Cause unless prior to such termination you have received
a copy of a resolution duly adopted by the affirmative vote of not less than a
majority of the disinterested membership of the Board of Directors at a meeting
of such Board of Directors called and held for such purpose (after reasonable
notice is provided to you and you are given an opportunity to be heard before
such Board of Directors), stating the clause pursuant to which the Board of
Directors has effected your termination. If you appeal this decision to
arbitrators pursuant to Section 23, the arbitrators shall be required to make a
de novo review of the circumstances of your termination and independently
determine whether facts exist to support such termination.
(d) The Term shall terminate if your employment is terminated in a
Change of Control Termination (as defined in Exhibit A).
(e) The Term shall terminate upon the expiration of the thirty
(30) day period after delivery of a Termination Notice if your employment is
terminated by the Company without Cause or voluntarily by you (a termination by
you not due to Breach or a termination by you without Good Reason).
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9. Compensation Upon Termination of Employment. Separation pay
shall be paid in accordance with the schedule set forth below upon a termination
of employment that constitutes a "separation from service" as defined under
Section 409A ("Separation from Service"). If a termination of employment does
not constitute a Separation from Service, separation pay shall be paid at such
later time that a Separation from Service occurs. For purposes of this
Agreement, the default definition of Separation from Service under the Final
Regulations promulgated under Section 409A shall be employed.
(a) For Any Reason. Upon termination of employment: (i) you or your
estate, as applicable, shall be paid within fifteen business days after your
date of termination (A) your accrued and unpaid Base Salary through the date of
termination, (B) any then-vested and unpaid Annual Bonus or other incentive
compensation that you 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 your date of termination,
and (C) any then-unused accrued vacation pay; (ii) you, your beneficiaries
and/or your 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 you
under the Company's life insurance plan(s)); and (iii) you or your estate, as
applicable, shall be reimbursed for your business expenses incurred prior to
termination in accordance with Section 4 above.
(b) Change of Control Termination. Upon the termination of employment by
reason of a Change of Control Termination, you shall receive the payments and
benefits set forth in Exhibit A.
(c) Termination without Cause or Breach Termination. Upon the
termination of employment that is not by reason of a Change of Control
Termination, but results from either (1) a termination by the Company without
Cause (excluding a termination due to death or Disability), or (2) a termination
by you which is a Breach Termination (as defined below), you shall also receive
the following payments; provided, however, that any payment made under this
Section 9(c) shall be reduced by any amount paid or payable to you with respect
to the same type of payment under any other plan maintained by the Company to
avoid duplication of payments:
(i) The Company shall pay you an amount equal to two times
your Base Salary at the rate in effect on the date of termination
plus $10,000. 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 your termination of employment occurs or (B) the taxable year
of the Company in which your 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.
(ii) The Company shall pay you an amount equal to twice your
Targeted Bonus Amount (as defined below). This bonus shall be paid
when bonuses are paid to other senior executives of the Company for
the year in which
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your termination of employment occurs but, notwithstanding the
foregoing, it shall be paid no later than the 15th day of the third
month following the earlier of (A) the calendar year in which your
termination of employment occurs or (B) the taxable year of the
Company in which your termination of employment occurs.
(iii) The Company shall, until the earlier of 18 months after
the date of termination and such time that the Executive obtains
alternative coverage, pay or reimburse the Executive for the
Company's and the Executive's portion of the cost to provide the
Executive and the Executive's eligible beneficiaries (if applicable)
health and medical coverage under the Company's health and medical
plans provided that the Executive timely elects COBRA coverage upon
termination of employment. In addition, for two years after the date
of termination, the Company shall provide the Executive with life
insurance coverage under the Company's life insurance policy.
Notwithstanding the foregoing, to the extent the Company's plans 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 the continued participation is otherwise prohibited by
applicable law, or if such continuance would constitute nonqualified
deferred compensation that does not comply with Section 409A, the
Company may instead provide materially equivalent benefits to the
Executive and/or the Executive's eligible beneficiaries outside such
plans. For purposes of this Agreement, "materially equivalent
benefits" means the aggregate premiums that the Company would have
paid to maintain the Executive's coverage under the health, medical
and life insurance plans. The Executive agrees to complete such
forms and take such physical examinations as may be reasonably
requested by the Company in connection with life insurance coverage.
As used in this Section 9(c), your "Targeted Bonus Amount" shall
mean (x) the higher of 55% and the percentage of your targeted bonus in effect
before the date of termination for purposes of determining your Annual Bonus for
the year in which your termination occurs, times (y) the amount of your Base
Salary as in effect for the year in which your termination occurs. Also, as used
in this Section 9(c), a "Breach Termination" means a termination of your
employment by you by written Termination Notice given to the Company within 90
days after the occurrence of any action or inaction that constitutes a material
breach by the Company of the Agreement. A Termination Notice for a Breach
Termination shall indicate the specific action or inaction that constitutes the
material breach, shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for the Breach Termination, and shall
provide the Company a minimum of 30 days in which to remedy such facts or
circumstances. Your failure to set forth in such Termination Notice any facts or
circumstances which contribute to the showing of Breach Termination shall not
constitute your waiver of any right hereunder or preclude you from asserting
such fact or circumstance in enforcing your rights hereunder. The Termination
Notice for a Breach Termination shall provide for a date of termination not less
than 30 nor more than 60 days after the date such Termination Notice is given.
Notwithstanding the foregoing, should a termination of employment by
the Company without Cause or a Breach Termination occur within six months prior
to, or within two
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years after, a Change of Control, your termination shall be considered a Change
of Control Termination and you shall vest in the payments and benefits set forth
in Exhibit A. Any such payments or benefits shall be offset by any payments or
benefits that you may have been already paid or received due to the occurrence
of the termination of employment prior to the Change of Control, and shall be
paid in accordance with Exhibit A.
(d) The payment by the Company of any compensation or the
provision of benefits, if any, pursuant to Section 9(c) and Exhibit A shall be
conditioned on your execution, without revocation, 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 reduce your rights or increase your obligations to
the Company over those contemplated in this Agreement, including the Exhibits
hereto. No Release shall be required for any benefits to which you are entitled
under the terms of any plan.
10. Indemnification. At all times, prior to, on or after a Change
of Control, the Company shall indemnify you for your acts as an officer and
director to the fullest extent permitted by law. Further, the Company shall
provide you with advance attorneys fees and expenses to you as they are incurred
subject to presentation of invoices.
11. 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 obligations 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.
12. Entire Agreement; Modification; Construction. This Agreement,
together with the Exhibits hereto, all employee benefit plans in which you
participate, and any outstanding awards, including, without limitation, equity
awards, constitute the full and complete understanding of the parties, and
supersede all prior agreements and understandings, oral or written, between the
parties, including, but not limited to the offer letter dated June 15, 2005, the
Employment Agreement dated June 21, 2005, and Amendment No. 1 to the Employment
Agreement dated February 1, 2006, with respect to the subject matter hereof.
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 parties.
13. 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.
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14. 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.
15. 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.
16. Assignability; Binding Effect. This Agreement shall not be
assignable by either party, except that it may be assigned by the Company to an
acquirer 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 and your other rights hereunder. 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 and detriment of the Company, its successors and assigns. Prior to a
Change of Control, any successor to the Company shall be required to acknowledge
in writing its obligations hereunder as successor to the Company to the extent
that the Company has not fulfilled its obligations prior to the Change of
Control or any amounts or benefits are still due to you after the Change of
Control.
17. No Mitigation Required. No Offset. Following any termination
of your employment hereunder, 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 or benefit
required to be provided by the Company hereunder. Not in limitation of any other
rights which the Company may have, including without limitation, injunctive or
other equitable relief, in the event of a violation by you of any of the
covenants set forth in Section 5, Section 6 or Section 19 hereof, the Company
may cease paying any compensation and benefits, if any, to you under Section 9
hereof and may seek recovery of any such amount paid to you during any period in
which you were in violation of the provisions of Section 5, Section 6 or Section
19. The cessation and/or recovery of any of the payments described in Section
9(c) in connection with any such violation shall not be deemed to be evidence
that monetary damages are sufficient to cure any damage to the Company for any
such violation.
18. 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.
19. Nondisparagement. You agree not to publicly or privately
disparage the Company, its personnel, products or services either during your
employment by the Company or during the Restricted Period.
20. 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 this Agreement and/or the
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termination of your employment, including, without limitation, Sections 5, 6, 7,
10, 17 and 19, shall survive the termination of your employment and shall
continue in effect for the respective periods therein provided or contemplated.
21. 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.
22. 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.
23. Dispute Resolution. In the event of any claim or controversy
arising out of or relating to this Agreement or the performance, construction,
interpretation, enforcement or breach hereof (excluding injunctive and other
equitable relief regarding a dispute over the covenants contained in Sections 5,
6, and 19 hereof) (a "dispute"), the parties shall settle disputes in accordance
with this Section 23.
(a) Notice and Selection of Arbitrators. The parties shall first
attempt to settle any disputes amicably between themselves. Should they fail to
do so, either party may, upon written demand from the claiming party of the
specific nature of any purported claims and the amount of damages attributable
to each such claim, served upon the other, submit such dispute to binding
arbitration. The arbitration panel shall consist of three arbitrators, shall
take place in Philadelphia, Pennsylvania and shall proceed in accordance with
the employment dispute resolution rules of the American Arbitration Association
("AAA").
Within 15 days after the commencement of arbitrations, each party
shall select one arbitrator from a list of arbitrators provided by the AAA. A
third neutral arbitrator shall be designated by the arbitrators selected by the
parties within 15 days of their appointment. In the event that any arbitrator is
not appointed within the prescribed time period, then either party may apply to
the AAA for the appointment of such arbitrator. Prior to the commencement of
hearings, each of the arbitrators appointed shall provide an oath or undertaking
of impartiality.
(b) Hearings. After the arbitrators have been appointed as
provided above, the arbitrators shall hold such meetings as a party may
reasonably request and at such meetings hear and consider any evidence that a
party desires to present. Within 60 days after the appointment of the third
arbitrator, the arbitrators shall make their determination.
(c) Determinations. The determination of a majority of the
arbitrators shall be final and binding on the parties, regardless of whether one
of the parties fails or refuses to participate in the arbitration. The
arbitrators shall have the power and authority to grant any remedy or relief
they deem just and equitable, including injunctive relief, specific performance
(excluding, however, equitable relief regarding a dispute over the covenants
contained in Sections 5, 6 and 19 hereof), and reasonable costs and expenses of
such arbitration and attorneys' fees. Absent any specific order of -- the
arbitrators, the costs and expenses of the arbitration shall be paid equally by
the parties. The arbitration award, decree or order shall be in writing and
shall be accompanied by a reasoned opinion. The award may be entered in any
court
-11-
of competent jurisdiction, and any judgment, decree or order entered in any such
court and any related orders may be enforced as any other judgment, decree or
order of such court. The arbitration proceedings and all materials, submissions
and documents relating thereto shall be confidential, and except as may be
required by law neither a party nor an arbitrator may disclose the existence,
contents or results of any arbitration hereunder without the consent of all
parties hereto. All disputes shall be resolved in accordance with the laws of
the Commonwealth of Pennsylvania.
(d) Qualifications of Arbitrators. Any arbitrator chosen by or
through the AAA shall be chosen from a class of disinterested experts qualified
by education, training and/or experience to resolve the particular issue(s) in a
dispute in an informed and efficient manner.
(e) Preservation of Remedies. Notwithstanding the preceding
binding arbitration provisions, the parties agree to preserve, without
diminution, certain remedies that any party may exercise before, during or after
an arbitration proceeding is brought. The parties shall have the right to
proceed in any court of proper jurisdiction or by self-help to exercise or
prosecute the following remedies, as applicable: obtaining provisional or
ancillary remedies, including injunctive and other equitable relief with regard
to disputes over the covenants contained in Sections 5, 6 and 19 hereof.
-12-
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/ Xxxxxxx Xxxxxx, III
------------------------
Xxxxxxx Xxxxxx, III
Title: Chairman of the Board of Directors
Agreed as of the date
above written:
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
President & Chief Executive Officer
-13-
EXHIBIT A
TO EMPLOYMENT AGREEMENT (THE "AGREEMENT")
OF XXXXXXX X. XXXXXX ("EXECUTIVE")
(Capitalized terms used herein and not otherwise defined have the meanings given
to them in the Agreement.)
I. Change of Control Termination. A "Change of Control Termination"
means the occurrence of any of the following within six months
before or within 24 months after a Change of Control (as defined
below): (a) the Executive's employment with the Company is
terminated by the Executive pursuant to (1) a Breach Termination, if
the termination occurs within six months prior to a Change of
Control, or (2) a Termination for Good Reason (as defined below), if
the termination occurs after a Change of Control; or (b) the
Executive's employment with the Company is terminated by the Company
for any reason other than death, Disability or for Cause.
II. Certain Other Definitions.
(a) Change of Control. For purposes of the Agreement, a
"Change of Control" shall mean the first to occur of:
1. The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 30% or more of either (A) the
then-outstanding shares of common stock of the Company
(the "Outstanding Company Common Stock") or (B) the
combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company
Voting Securities"); provided, however, that, for
purposes of this Section II(a)1, the following
acquisitions shall not constitute a Change of Control:
(i) any acquisition directly from the Company, (ii) any
acquisition by the Company, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or
maintained by the Company or any majority-owned
subsidiary of the Company, or (iv) any acquisition by any
corporation pursuant to a transaction that complies with
Subsections (A), (B) and (C) of Section II(a)3 below.
Separation payments that constitute nonqualified deferred
compensation set forth in this Exhibit A shall be paid
upon a Change in Control Termination that constitutes a
Separation from Service. For purposes of this Exhibit A,
the default definition of "Separation from Service" under
the Final Regulations promulgated under Section 409A
shall be employed.
2. Individuals who, as of the date hereof, constitute
the Board of Directors (the "Incumbent Board") cease, for
any reason, to constitute at least a majority of the
Board of Directors; provided, however, that any
individual becoming a director subsequent to the date of
the Agreement whose election, or nomination for election
by the Company's stockholders, was approved by a vote of
at least
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two-thirds of the directors then comprising the Incumbent
Board shall be considered as though such individual were
a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened
election contest with respect to the election or removal
of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other
than the Board of Directors.
3. Consummation of a reorganization, merger,
statutory share exchange, recapitalization or
consolidation or similar corporate transaction involving
the Company or any of its subsidiaries, a sale or other
disposition of all or substantially all of the assets of
the Company, or the acquisition of assets or stock of
another entity by the Company or any of its subsidiaries
(each, a "Business Combination"), in each case unless,
following such Business Combination, (A) all or
substantially all of the individuals and entities that
were the beneficial owners of the Outstanding Company
Common Stock and the Outstanding Company Voting
Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50%
of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding voting
securities entitled to vote generally in the election of
directors, as the case may be, of the corporation
resulting from such Business Combination (including,
without limitation, a corporation that, as a result of
such transaction, owns the Company or all or
substantially all of the Company's assets either directly
or through one or more subsidiaries) in substantially the
same proportions as their ownership immediately prior to
such Business Combination of the Outstanding Company
Common Stock and the Outstanding Company Voting
Securities, as the case may be, (B) no Person (excluding
any corporation resulting from such Business Combination
or any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly,
30% or more of, respectively, the then-outstanding shares
of common stock of the corporation resulting from such
Business Combination or the combined voting power of the
then-outstanding voting securities of such corporation,
except to the extent that such ownership existed prior to
the Business Combination, and (C) at least a majority of
the members of the board of directors of the corporation
resulting from such Business Combination were members of
the Incumbent Board at the time of the execution of the
initial agreement or of the action of the Board of
Directors providing for such Business Combination; or
4. Approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
(b) Termination for Good Reason. For purposes of this Exhibit
A, a "Termination for Good Reason" means a termination of the
Executive's employment by the Executive by written Termination
Notice given to the Company within 90 days after the occurrence of
the Good Reason event. A Termination Notice for a Termination for
Good Reason shall indicate the specific provision in Section II(c)
relied upon, shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for Termination for Good
Reason, and shall provide the Company a minimum of 30 days in which
to
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remedy such facts or circumstances. The failure by the Executive to
set forth in such Termination 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 Termination Notice for a Termination for Good Reason
shall provide for a date of termination not less than 30 nor more
than 60 days after the date such Termination Notice is given.
(c) Good Reason. For purposes of this Exhibit A, "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 Termination Notice for a Termination for Good
Reason as contemplated in Section II(b) above: (i) a material
diminution in the Executive's authority, duties, or
responsibilities; (ii) a material diminution in the authority,
duties, or responsibilities of the supervisor to whom the Executive
is required to report, including, if applicable. a requirement that
the Executive report to a corporate officer or employee instead of
reporting directly to the board of directors; (iii) a material
diminution in the budget over which the Executive retains authority;
(iv) a material relocation of the Company's principal executive
offices (or such other office to which the Executive is required to
report); (v) a material diminution in the Executive's Base Salary or
(vi) any other action or inaction that constitutes a material breach
by the Company of the Agreement.
III. Payments and Benefits.
Separation pay upon a Change of Control Termination shall be paid in
accordance with this Section III provided that such termination
constitutes a "separation from service" as defined under Section
409A ("Separation from Service"). If a Change in Control Termination
does not constitute a Separation from Service, separation pay shall
be paid at such later time that a Separation from Service occurs.
Upon a Separation from Service occurring upon or after a Change of
Control Termination, the Executive shall be entitled to receive,
subject to the execution of the Release, the payments and benefits
set forth below in this Section III 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 Termination
pursuant to Section 5(a) of the Agreement; provided, however, that
any payment made or benefit provided under this Section III 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, including without limitation,
any amounts that were paid upon termination of employment prior to
the Change of Control:
(a) The Company shall pay to the Executive within fifteen days
following the Change of Control Termination, a lump sum amount equal
to (i) three 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 Agreement) and
(y) the Annual
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Bonus Amount, plus (ii) $10,000. 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 55% 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 Agreement).
(b) The Company shall, until the earlier of 18 months after
the date of the Change of Control Termination and such time that the
Executive obtains alternative coverage, pay or reimburse the
Executive for the Company's and the Executive's portion of the cost
to provide the Executive and the Executive's eligible beneficiaries
(if applicable) health and medical coverage under the Company's
health and medical plans provided that the Executive timely elects
COBRA coverage upon termination of employment. In addition, for two
years after the date of the Change of Control, the Company shall
provide the Executive with life insurance coverage under the
Company's life insurance policy. Notwithstanding the foregoing, to
the extent the Company's plans 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 the
continued participation is otherwise prohibited by applicable law,
or if such continuance would constitute nonqualified deferred
compensation that does not comply with Section 409A, the Company may
instead provide materially equivalent benefits to the Executive
and/or the Executive's eligible beneficiaries outside such plans.
For purposes of this Agreement, "materially equivalent benefits"
means the aggregate premiums that the Company would have paid to
maintain the Executive's coverage under the health, medical and life
insurance plans. The Executive agrees to complete such forms and
take such physical examinations as may be reasonably requested by
the Company in connection with life insurance coverage.
(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, and the Company shall, in the
case of Options that are not exercised or cashed out, extend the
period during which such Options may be exercised to the greatest
extent permitted by the applicable plan, Section 409A or other
applicable law. The Company agrees 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.
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IV. Certain Additional Payments.
(a) Anything in the Agreement and this Exhibit A to the
contrary notwithstanding, in the event it shall be determined that
any Payment or any other amounts or benefits delivered to the
Executive under the Agreement or any other agreement, plan, policy
or program, including, without limitation, equity awards, would be
subject to the Excise Tax, then the Executive shall be entitled to
receive an additional payment (the "Gross-Up Payment") in an amount
such that, after payment by the Executive of all taxes (and any
interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest
and penalties imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment and after the payment of all additional
taxes and interest imposed under Code Section 409A(a)(1)(B) on the
Gross-Up Payment and any separation payment made to the Executive
hereunder, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. Notwithstanding
the foregoing provisions of this Section IV(a), if it shall be
determined that the Executive is entitled to the Gross-Up Payment,
but that the Parachute Value of all Payments does not exceed 110% of
the Safe Harbor Amount, then no Gross-Up Payment shall be made to
the Executive and the amounts payable under this Agreement shall be
reduced so that the Parachute Value of all Payments, in the
aggregate, equals the Safe Harbor Amount. The reduction of the
amounts payable hereunder, if applicable, shall be made by first
reducing the payments under Section III(a) of this Exhibit A and
shall be made in such a manner as to maximize the Value of all
Payments actually made to the Executive. For purposes of reducing
the Payments to the Safe Harbor Amount, only amounts payable under
this Agreement (and no other Payments) shall be reduced. If the
reduction of the amounts payable under this Agreement would not
result in a reduction of the Parachute Value of all Payments to the
Safe Harbor Amount, no amount payable under the Agreement shall be
reduced pursuant to this Section IV(a). The company's obligations
under this Section IV shall not be conditioned upon the Executive's
termination of employment and they shall survive the termination of
the Executive's employment. In furtherance of the foregoing, the
provisions of this IV(a) shall supersede any provision of any equity
award or agreement that limits payment of such award or agreement
due to Section 280G or 4999 of the Code, and the Company shall take
any necessary action to amend such every such award or agreement to
comply with this provision.
(b) Anything in the Agreement and this Exhibit A to the
contrary notwithstanding, in the event it shall be determined that
any amounts or benefits delivered to the Executive under the
Agreement or any other agreement, plan, policy or program shall be
deemed to be nonqualified deferred compensation that does not comply
with Section 409A ("Noncompliant 409A Payment"), and that is
therefore subject to the taxes and penalties under Section 409A (the
"409A Taxes"), then the Executive shall be entitled to receive an
additional payment (the "409A Gross-Up Payment") in an amount such
that, after payment by the Executive of all taxes (and any interest
or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed
with respect thereto) and taxes imposed upon the 409A Gross-Up
Payment, the Executive shall retain an amount of the 409A Gross-Up
Payment equal to the 409A Taxes imposed upon the Payments.
A-5
(c) Subject to the provisions of Section IV(d), all
determinations required to be made under this Section IV, including
whether and when a Gross-Up Payment or 409A Gross-Up Payment is
required, the amount of such Gross-Up Payment or 409A Gross-Up
Payment, and the assumptions to be utilized in arriving at such
determination, shall be made by any nationally recognized certified
public accounting firm as may be designated by the Executive (the
"Accounting Firm"). The Accounting Firm shall provide detailed
supporting calculations both to the Company and the Executive within
15 business days of the receipt of notice from the Executive that
there has been a Payment or a payment that the Executive reasonably
believes to be a Noncompliant 409A Payment, or such earlier time as
is requested by the Company. In the event that the Accounting Firm
is serving as accountant or auditor for the individual, entity or
group effecting the Change of Control, the Executive may appoint
another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then
be referred to as the Accounting Firm hereunder). All fees and
expenses of the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, or 409A Gross-Up Payment, as
determined pursuant to this Section IV, shall be paid by the Company
to the Executive within five business days of the receipt of the
Accounting Firm's determination, which determination shall be made
no later than the end of the second month following the later of (1)
the calendar year in which the Executive's employment with the
Company terminates and (2) the taxable year of the Company in which
the Executive's employment with the Company terminates. Payment of
the Gross-Up Payment or the 409A Gross-Up Payment shall be made as
soon as practicable after such determination has been made, but in
no event shall payment be made later than the end of the Executive's
taxable year next following the Executive's taxable year in which
the Executive shall have remitted the related taxes.
Any determination by the Accounting Firm shall be binding upon
the Company and the Executive. As a result of the uncertainty in the
application of Sections 4999 and 409A of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments and 409A Gross-Up Payments that will
not have been made by the Company should have been made (the
"Underpayment"), consistent with the calculations required to be
made hereunder. In the event the Company exhausts its remedies
pursuant to Section IV(c) and the Executive thereafter is required
to make a payment of any Excise Tax or 409A Taxes, the Accounting
Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.
(d) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment or the
409A Gross-Up Payment. Such notification shall be given as soon as
practicable, but no later than ten business days after the Executive
is informed in writing of such claim. The Executive shall apprise
the Company of the nature of such claim and the date on which such
claim is requested to be paid. The Executive shall not pay such
claim prior to the expiration of the 30-day period following the
date on which the Executive gives such notice to the Company (or
such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company
A-6
notifies the Executive in writing prior to the expiration of such
period that the Company desires to contest such claim, the Executive
shall:
(1) give the Company any information reasonably
requested by the Company relating to such claim,
(2) take such action in connection with contesting
such claim as the Company shall reasonably request in
writing from time to time, including, without
limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the
Company,
(3) cooperate with the Company in good faith in order
to effectively contest such claim, and
(4) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest and
penalties) incurred in connection with such contest, and shall
indemnify and hold the Executive harmless, on an after-tax basis,
for any Excise Tax or income tax (including interest and penalties)
imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this
Section IV(c), the Company shall control all proceedings taken in
connection with such contest, and, at its sole discretion, may
pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with the applicable taxing authority in
respect of such claim and may, at its sole discretion, either direct
the Executive to pay the tax claimed and xxx for a refund or contest
the claim in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however,
that if the Company directs the Executive to pay such claim and xxx
for a refund, the Company shall advance the amount of such payment
to the Executive, on an interest-free basis, and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise
Tax or income tax (including interest or penalties) or 409A Taxes
imposed with respect to such advance or with respect to any imputed
income in connection with such advance; and provided, further, that
any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company's control of the contest
shall be limited to issues with respect to which the Gross-Up
Payment or 409A Gross-Up Payment would be payable hereunder, and the
Executive shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any
other taxing authority.
(e) If, after the receipt by the Executive of a Gross-Up
Payment or 409A Gross-Up Payment or an amount advanced by the
Company pursuant to Section IV(d), the Executive becomes entitled to
receive any refund with respect to the Excise Tax to which such
Gross-Up Payment relates or with respect to such claim, the
Executive shall
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(subject to the Company's complying with the requirements of Section
IV(c), if applicable) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by the Executive of
an amount advanced by the Company pursuant to Section IV(c), a
determination is made that the Executive shall not be entitled to
any refund with respect to such claim and the Company does not
notify the Executive in writing of its intent to contest such denial
of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be
paid.
(f) Notwithstanding any other provision of this Section IV,
the Company may, in its sole discretion, withhold and pay over to
the Internal Revenue Service or any other applicable taxing
authority, for the benefit of the Executive, all or any portion of
any Gross-Up Payment or 409A Gross-Up Payment, and the Executive
hereby consents to such withholding.
(g) Definitions. The following terms shall have the following
meanings for purposes of this Section IV.
(i) "Code" shall mean the Internal Revenue Code of 1986,
as amended, or any successor thereto.
(ii) "Excise Tax" shall mean the excise tax imposed by
Section 4999 of the Code, together with any interest or penalties
imposed with respect to such excise tax.
(iii) "Parachute Value" of a Payment shall mean the
present value as of the date of the change of control for purposes
of Section 280G of the Code of the portion of such Payment that
constitutes a "parachute payment" under Section 280G(b)(2), as
determined by the Accounting Firm for purposes of determining
whether and to what extent the Excise Tax will apply to such
Payment.
(iv) "Payment" shall mean any payment or distribution in
the nature of compensation (within the meaning of Section 280G(b)(2)
of the Code) to or for the benefit of the Executive, whether paid or
payable pursuant to this Agreement or otherwise.
(v) "Safe Harbor Amount" means 2.99 times the Executive's
"base amount," within the meaning of Section 280G(b)(3) of the Code.
(vi) "Value" of a Payment shall mean the economic present
value of a Payment as of the date of the change of control for
purposes of Section 280G of the Code, as determined by the
Accounting Firm using the discount rate required by Section
280G(d)(4) of the Code.
(h) The Company's obligations under this Section IV shall not
be conditioned upon the Executive's termination of employment, and
they shall survive the termination of the Executive's employment and
the Term with respect to any Payments or other payments
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that are determined by the Accounting Firm to be either (i)
contingent on a "change of control" (as defined in Section 280G of
the Code) of the Company that occurs during the Term, or (ii)
nonqualified deferred compensation that does not comply with Section
409A.
(i) Any Gross-Up Payment or 409A Gross-Up Payment shall be
made no later than the end of the Executive's taxable year following
the taxable year in which the Executive remits the related taxes.
V. Legal Fees. If, following a Change of Control, 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, unless
the trier of fact in such dispute determines that the Executive has
not been at least partially successful in such enforcement or
defense. Any reimbursement under this Section V shall be made no
later than the end of calendar year following the calendar year in
which such costs are incurred by the Executive.
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EXHIBIT B
RELEASE
This Release is made this _____ day of _______________, ____ by and
between C&D Technologies, Inc. ("Employer") and Xxxxxxx X. Xxxxxx ("Employee").
Recitals:
WHEREAS, the parties are parties to an Employment Agreement (the
"Employment Agreement") dated December 20, 2007, pursuant to which Employee was
employed by Employer; and
WHEREAS, Employee's employment and the Term, as defined in the
Employment Agreement, have terminated; and
WHEREAS, the execution and delivery of this Release by Employee is a
condition to the Employer's obligations to pay certain compensation and provide
certain benefits to Employee under the Employment Agreement;
NOW THEREFORE, the parties hereto, intending to be legally bound, in
consideration of the mutual promises and undertakings set forth herein, do
hereby agree as follows:
1. As of ___________________________, ____, 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 and provide to Employee the amounts and
benefits contemplated pursuant to Section 9 [and Exhibit A] 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 employment or termination of employment with Employer, such as all claims
for wrongful discharge, breach of contract, either
B-1
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), as amended, 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, including without limitation, for payments or benefits
described in Section 2 of this Release, nor to claims under employee benefit
plans that are qualified under Section 401(a) of the Internal Revenue Code, nor
to any rights of indemnification by the Company or advancement of expenses to
which the Employee is otherwise entitled, nor to any equity awards that are
outstanding on the date of termination. 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 based upon a
claim that is released hereunder.
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, Employee has a period
of seven 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.
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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 employment 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 and agrees that the execution of this
Release does not supercede any of the provisions of the Employment Agreement
which otherwise survive the termination of Employee's employment with the
Employer, including without limitation, Section 5, 6, 7 and 19 thereof.
11. Employee acknowledges that Employer advised Employee to
consult with an attorney prior to executing this Release.
12. 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:
-------------------------------- --------------------------------------
Xxxxxxx X. Xxxxxx
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ENDORSEMENT
I, Xxxxxxx X. Xxxxxx, 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.
-----------------------------------
Xxxxxxx X. Xxxxxx
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