SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended April 30, l995 Commission File No. 1-9389
CHARTER POWER SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 13-3314599
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3043 Walton Road
Plymouth Meeting, Pennsylvania 19462
(Address of principal executive office) Zip Code
(610) 828-9000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
YES X NO_____
Number of shares of the Registrant's Common Stock outstanding on
June 8, 1995: 5,976,291
<PAGE>
CHARTER POWER SYSTEMS, INC.
AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION Page No.
Item 1 - Financial Statements
Consolidated Balance Sheets -
April 30, 1995 and January 31, 1995 3
Consolidated Statements of Income -
Three Months Ended April 30, 1995 and 1994 5
Consolidated Statements of Cash Flows -
Three Months Ended April 30, 1995 and 1994 6
Notes to Consolidated Financial Statements 8
Report of Independent Accountants 12
Item 2 - Management's Discussion and Analysis 13
Of Financial Condition and Results
of Operations
PART II. OTHER INFORMATION 15
SIGNATURES 16
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CHARTER POWER SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
April 30, January 31,
1995 1995
---- ----
ASSETS:
Current assets:
Cash and cash equivalents $ 2,516 $ 1,097
Restricted cash and cash equivalents - 75
Accounts receivable, less allowance for
doubtful accounts of $1,770 and
$1,404, respectively 34,550 30,253
Inventories 31,861 26,869
Deferred income taxes 5,432 5,231
Other current assets 461 553
------- -------
Total current assets 74,820 64,078
Property, plant and equipment, net 40,256 40,059
Intangible and other assets, net 5,335 5,314
Goodwill, net 2,677 2,686
------- -------
Total assets $123,088 $112,137
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Current portion of long-term debt $ 3,121 $ 3,670
Accounts payable 23,027 15,601
Accrued liabilities 14,340 13,994
Income taxes payable 1,455 --
Other current liabilities 2,729 3,067
------- -------
Total current liabilities 44,672 36,332
Deferred income taxes 3,582 3,552
Long-term debt 13,342 14,183
Other liabilities 6,786 6,348
------- -------
Total liabilities 68,382 60,415
The accompanying notes are an integral part of these statements.
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CHARTER POWER SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
(Dollars in thousands)
(Unaudited)
April 30, January 31,
1995 1995
---- ----
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value,
10,000,000 shares authorized;
5,976,291 and 5,971,041 shares
issued, respectively 60 60
Additional paid-in capital 32,113 32,053
Notes receivable from stockholders (1,656) (1,656)
Retained earnings 24,276 21,265
Treasury stock, at cost, 5,300 shares (87) --
------- -------
Total stockholders' equity 54,706 51,722
------- -------
Total liabilities and
stockholders' equity $123,088 $112,137
======= =======
The accompanying notes are an integral part of these statements.
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CHARTER POWER SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
Three months ended
April 30,
1995 1994
----- -----
Net sales $58,777 $42,644
Cost of sales 44,985 32,279
------ ------
Gross profit 13,792 10,365
Selling, general and administrative
expenses 7,065 5,701
Research and development expenses 1,593 902
------- -------
Operating income 5,134 3,762
Interest expense, net 231 235
Other expense, net 56 186
------- -------
Income before income taxes 4,847 3,341
Provision for income taxes 1,672 1,333
------- -------
Net income $ 3,175 $ 2,008
======= =======
Net income per common and common
equivalent share $ .50 $ .33
======= =======
Weighted average common and common
equivalent shares 6,395 6,061
======= =======
Dividends per share $0.0275 $0.0275
======= =======
The accompanying notes are an integral part of these statements.
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CHARTER POWER SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Three months ended
April 30,
1995 1994
---- ----
Cash flows provided (used) by operating activities:
Net income $3,175 $2,008
Adjustments to reconcile net income
to net cash provided (used) by
operating activities:
Depreciation and amortization 1,536 1,685
Deferred taxes (171) --
Changes in:
Accounts receivable (4,230) (4,853)
Inventories (4,960) (1,358)
Other current assets (104) (84)
Accounts payable 7,423 1,202
Accrued liabilities 329 608
Income taxes payable 1,653 479
Other current liabilities (340) (408)
Other liabilities 438 226
Other, net (188) 248
------- -------
Net cash provided (used) by operating
activities 4,561 (247)
------- -------
Cash flows provided (used) by investing activities:
Acquisition of business, net -- (5,966)
Acquisition of property, plant and equipment (1,648) (1,683)
------- -------
Net cash used by investing activities (1,648) (7,649)
------- -------
Cash flows provided (used) by financing activities:
Reduction of long-term debt (1,390) (148)
Proceeds from new borrowings -- 5,750
Financing costs of long-term debt -- (34)
Issuance of shares under stock option plan 60 --
Payment of common stock dividends (164) (161)
Purchase of treasury stock (87) --
------- -------
Net cash (used) provided by financing
activities (1,581) 5,407
------- -------
Effect of exchange rate changes on cash 12 (15)
------- -------
The accompanying notes are an integral part of these statements.
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CHARTER POWER SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Dollars in thousands)
(Unaudited)
Three months ended
April 30,
1995 1994
---- ----
Increase (decrease) in cash and cash
equivalents 1,344 (2,504)
Cash and cash equivalents at beginning
of period 1,172 3,821
------- -------
Cash and cash equivalents at end of
period $2,516 $1,317
======= =======
SUPPLEMENTAL CASH FLOW
DISCLOSURES
Interest paid, net $ 482 $ 346
Income taxes paid 189 854
SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES
Liabilities assumed in acquisition $ -- $3,132
The accompanying notes are an integral part of these statements.
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CHARTER POWER SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(UNAUDITED)
1. INTERIM STATEMENTS
The accompanying interim consolidated financial statements
should be read in conjunction with the consolidated financial
statements and notes thereto contained in the Company's Annual Report
to Shareholders for the fiscal year ended January 31, 1995. The
consolidated financial statements presented herein are unaudited but,
in the opinion of management, include all necessary adjustments (which
comprise only normal recurring items) required for a fair presentation
of the consolidated financial position as of April 30, 1995 and the
consolidated statements of income and cash flows for the three months
ended April 30, 1995 and 1994. However, interim results of operations
necessarily involve more estimates than annual results and are not
indicative of results for the full fiscal year.
2. INVENTORIES
Inventories consisted of the following:
April 30, January 31,
1995 1995
---- ----
Raw materials $11,245 $9,780
Work-in-progress 9,135 7,893
Finished goods 11,481 9,196
------- -------
$31,861 $26,869
======= =======
3. INCOME TAXES
A reconciliation of the provision for income taxes from the
statutory rate to the effective rate is as follows:
Three months ended
April 30,
1995 1994
---- ----
U.S. statutory income tax 35.0% 34.0%
State tax, net of federal income
tax benefit 3.7 4.3
Reduction in valuation allowance (3.8) --
Other (0.4) 1.6
---- ----
34.5% 39.9%
==== ====
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CHARTER POWER SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands)
(UNAUDITED)
4. CONTINGENT LIABILITIES
With regard to the following contingent liabilities there have
been no material changes since January 31, 1995.
Because the Company uses lead and other hazardous substances in
its manufacturing processes, it is subject to numerous federal,
Canadian, state and local laws and regulations that are designed to
protect the environment and employee health and safety. These laws
and regulations include requirements of periodic reporting to
governmental agencies regarding the use and disposal of hazardous
substances and compliance with rigorous criteria regarding exposure to
employees and the disposal of scrap. In the opinion of the Company,
the Company complies in all material respects with these laws and
regulations, and such compliance has not had, and is not expected to
have, a material effect on the business, financial condition or
results of operations of the Company.
Notwithstanding such compliance, if damage to persons or the
environment has been or is caused by hazardous substances used or
generated in the conduct of the Company's business, the Company may be
held liable for the damage and be required to pay the cost of
remedying the same, and the amount of any such liability might be
material to the results of operations or financial condition.
However, under the terms of the purchase agreement with Allied for the
Acquisition of the Company (the "Acquisition Agreement"), Allied is
obligated to indemnify the Company for any liabilities of this type
resulting from conditions existing at January 28, 1986 that were not
disclosed by Allied to the Company in the schedules to the Acquisition
Agreement.
The Company, along with numerous other parties, has been
requested to provide information to the United States Environmental
Protection Agency (the "EPA") in connection with investigations of the
source and extent of contamination at several lead smelting facilities
(the "Third Party Facilities") to which the Company had made scrap
lead shipments for reclamation prior to the date of the Acquisition.
As of January 16, 1989, the Company, with the concurrence of Allied,
entered into an agreement with other potentially responsible parties
(PRPs) relating to remediation of a portion of one of the Third Party
Facilities, the former NL Industries ("NL"), facility in Pedricktown,
New Jersey (the "NL Site"), which agreement provides for their joint
funding on a proportionate basis of certain remedial investigation and
feasibility study activities with respect to that site.
9 of 16
<PAGE>
CHARTER POWER SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands)
(UNAUDITED)
4. CONTINGENT LIABILITIES (continued)
In fiscal 1993 in accordance with an EPA order, a group
comprised of the Company and 30 other parties commenced work on the
cleanup of a portion of the NL Site based on a specified remedial
approach which is now completed. Based on currently available
information and well defined contribution levels of the other parties,
including NL Industries, the Company does not expect to incur costs in
excess of the $138 previously reserved.
With regard to the remainder of the NL Site, the EPA is pursuing
negotiations with NL and the other PRPs, including the Company,
regarding the conduct and funding of the remedial work plan. The EPA
has proposed a cost allocation plan, however, the allocation
percentages between parties and the basis for allocation of cost are
not defined in the plan or elsewhere. Therefore, a reliable range of
the potential cost to the Company of this phase of the clean-up cannot
currently be determined. Accordingly, the Company has not created any
reserve for this potential exposure.
The remedial investigation and feasibility study at a second
Third Party Facility, the former Tonolli Incorporated facility at
Nesquehoning, Pennsylvania (the "Tonolli Site"), were completed in
fiscal 1993. The EPA and the PRPs are continuing to evaluate the
draft remedial design work plan for the site. Based on the estimated
cost of the remedial approach selected by the EPA, the Company
believes that the potential cost of remedial action at the Tonolli
Site is likely to range between $16,000 and $17,000. The Company's
allocable share of this cost has not been finally determined, and will
depend on such variables as the financial capability of various other
potentially responsible parties to fund their respective allocable
shares of the remedial cost. Based on currently available
information, however, the Company believes that its most likely
exposure with respect to the Tonolli Site will be the approximately
$579 previously reserved, the majority of which is expected to be paid
over the next three to five years.
The Company has responded to requests for information from the
EPA with regard to three other Third Party Facilities, one in
September 1991, one (the "Chicago Site") in October 1991 and the third
(the "ILCO Site") in October 1993. Of the three sites, the Company
has been identified as a PRP at the ILCO and Chicago Sites only.
10 of 16
<PAGE>
CHARTER POWER SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(UNAUDITED)
4. CONTINGENT LIABILITIES (continued)
Based on currently available information, the Company believes that
the potential cost of remediation at the ILCO Site is likely to range
between $54,000 and $59,000 (based on the estimated costs of the
remedial approach selected by the EPA). The Company's allocable share
of this cost has not been finally determined and will depend on such
variables as the financial capability of various other PRPs to fund
their respective allocable shares of the remedial cost. Based on
currently available information, however, the Company believes that
its most likely exposure with respect to the ILCO Site is an
immaterial amount which has been previously reserved, most of which is
expected to be paid over the next three to five years.
Based on currently available information, the Company believes
that the potential cost of the remediation at the Chicago site is
likely to range between $8,000 and $10,500 (based on the preliminary
estimated costs of the remediation approach negotiated with the EPA).
Sufficient information is not available to determine the Company's
allocable share of this cost. Based on the available preliminary
information, however, the Company believes that its exposure with
regard to the Chicago Site will be approximately $283, which has been
reserved for in the Company's consolidated financial statements, the
majority of which is expected to be paid over the next two to five
years.
Allied has accepted responsibility under the Acquisition
Agreement for potential liabilities relating to all Third Party
Facilities other than the aforementioned Sites. Based on currently
available information, management of the Company believes that the
foregoing will not have a material adverse effect on the Company's
financial condition or results of operations.
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<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Board of Directors of
Charter Power Systems, Inc.
We have reviewed the accompanying consolidated balance sheet of
Charter Power Systems, Inc. and Subsidiaries as of April 30, 1995, and
the related consolidated statements of income and cash flows for the
three months ended April 30, 1995 and 1994. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying
analytical procedures to financial data and making inquiries of
persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying consolidated financial
statements for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet as of January 31,
1995 and the related consolidated statements of income, stockholders'
equity and cash flows for the year then ended (not presented herein);
and in our report dated March 24, 1995, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion,
the information set forth in the accompanying consolidated balance
sheet as of January 31, 1995, is fairly presented, in all material
respects, in relation to the consolidated balance sheet from which it
has been derived.
\s\ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
May 30, 1995
12 of 16
<PAGE>
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Net sales for the fiscal 1996 first quarter ended April 30, 1995
were up $16,133,000 or 38 percent compared to the equivalent quarter
in fiscal 1995. Sales recorded by International Power Systems, Inc.
purchased as of March 29, 1994 and sales of the switching power supply
division of Basler Electric Company purchased as of January 24, 1995
accounted for 57 percent of this increase. In addition, total standby
product sales were up 22 percent with increases in telecommunications,
control, UPS and sales to AT&T, partially offset by lower
international sales. Motive power sales were up 10 percent resulting
from higher volume with relatively flat selling prices.
Gross profit increased $3,427,000 or 33 percent as gross margin
decreased to 23.5 percent from 24.3 percent, primarily resulting from
higher material costs and fluctuations in the Company's product mix,
partially offset by continued improvements in operating efficiencies.
Selling, general and administrative expenses increased 24
percent due mainly to the power supply businesses acquired and higher
commission and sales expense due to volume increases in the standby
and motive power business.
Research and development expenses increased 77 percent due to
the power supply businesses acquired.
Interest expense, net, was unchanged due to flat debt levels and
higher effective rates, offset by higher interest income.
Other expense, net, decreased $130,000 primarily due to a
foreign exchange gain in the first quarter ended April 30, 1995 versus
a foreign exchange loss in the prior year quarter.
As a result of the above, income before income taxes increased
45 percent over the prior year quarter and net income of $3,175,000,
or 50 cents a share, increased 58 percent from the $2,008,000, or 33
cents a share, for the first quarter of fiscal 1995.
The effective tax rate decreased to 34.5 percent from 39.9
percent due to a reduction in the valuation allowance related to the
revaluation of the realization of the stock option compensation
deferred tax asset due to increases in the price of the Company's
common stock.
13 of 16
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
LIQUIDITY AND CAPITAL RESOURCES
Net cash flows provided by operating activities for the period
ending April 30, 1995 increased to $4,561,000 compared to the $247,000
net cash used by operating activities for the prior year period. The
fiscal 1996 first quarter increase was caused primarily by an increase
in accounts payable and income taxes payable in this year's first
quarter, partially offset by increased inventories needed to support
the higher sales volume.
Net cash used by investing activities consisted of $1,648,000
for acquisition of property, plant and equipment, a decrease of
$6,001,000 from the prior year's first quarter which included
comparable property, plant and equipment acquisitions and the purchase
of the custom power supply business and certain net assets of ITT
PowerSystems Corporation.
Net cash used by financing activities was $1,581,000 compared to
net cash provided by financing activities of $5,407,000 in the prior
year's first quarter. The additional borrowings in the prior year
were used primarily for the funding of the aforementioned acquisition.
The Company's availability under the current loan agreement is
expected to be sufficient to meet its ongoing cash needs for working
capital requirements, debt service, capital expenditures and possible
strategic acquisitions. Capital expenditures in the first quarter of
fiscal 1996 were incurred primarily to fund new product development,
capacity expansion, a continuing series of cost reduction programs,
normal maintenance capital, and regulatory compliance. Fiscal 1996
expenditures are expected to be approximately $8,000,000 for similar
purposes, excluding strategic acquisitions.
14 of 16
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
10.1 Employment Agreement dated April 3, 1995 between Stephen E.
Markert, Jr. and the Company (filed herewith).
10.2 Employment Agreement dated April 3, 1995 between A.T.(Paul)
Kambouroglou and the Company (filed herewith).
10.3 Amendment Agreement dated April 3, 1995 to Employment
Agreement between Leslie Holden and the Company (filed
herewith).
10.4 Amendment Agreement dated April 3, 1995 to Employment
Agreement between A. Gordon Goodyear and the Company (filed
herewith).
10.5 Amendment Agreement dated April 3, 1995 to Employment
Agreement between George C. Branca and the Company (filed
herewith).
10.6 Charter Power Systems, Inc. Incentive Compensation Plan
(filed herewith).
11. Computation of per share earnings (filed herewith).
15. Letter from Coopers & Lybrand L.L.P., independent
accountants for the Company regarding unaudited interim
financial information (filed herewith).
(b) Reports on Form 8-K:
None
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<PAGE>
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 thereunto duly authorized.
CHARTER POWER SYSTEMS, INC.
June 14, 1995 BY: \s\ Alfred Weber
_________________________________
Alfred Weber
President and Chief
Executive Officer
June 14, 1995 BY: \s\ Stephen E. Markert, Jr.
_________________________________
Stephen E. Markert, Jr.
Vice President Finance and
Treasurer
Principal Financial and
Accounting Officer
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EXHIBIT INDEX
10.1 Employment Agreement dated April 3, 1995 between Stephen E.
Markert, Jr. and the Company (filed herewith).
10.2 Employment Agreement dated April 3, 1995 between A.T.(Paul)
Kambouroglou and the Company (filed herewith).
10.3 Amendment Agreement dated April 3, 1995 to Employment
Agreement between Leslie Holden and the Company (filed
herewith).
10.4 Amendment Agreement dated April 3, 1995 to Employment
Agreement between A. Gordon Goodyear and the Company (filed
herewith).
10.5 Amendment Agreement dated April 3, 1995 to Employment
Agreement between George C. Branca and the Company (filed
herewith).
10.6 Charter Power Systems, Inc. Incentive Compensation Plan
(filed herewith).
11. Computation of per share earnings (filed herewith).
15. Letter from Coopers & Lybrand L.L.P., independent
accountants for the Company regarding unaudited interim
financial information (filed herewith).
EXHIBIT 10.1
C&D CHARTER POWER SYSTEMS, INC.
3043 Walton Road
Plymouth Meeting, PA 19462
April 3, 1995
Mr. Stephen E. Markert
487 Deep Run Road
Perkasie, PA 18944
Dear Mr. Markert:
C&D Charter Power Systems, Inc., a Delaware corporation
(the "Company"), agrees to employ you, and you agree to accept
such employment, under the following terms and conditions:
1. Term of Employment
1.1 Except for earlier termination as is provided in
Section 10 below, your employment under this
Agreement shall be for a term (the "Initial Term")
commencing on February 1, l995 (the "Effective
Date") and terminating on January 31, l996.
1.2 This Agreement shall be automatically renewed for
successive terms of one month each, unless either
party shall have given to the other party at least
30 days' prior written notice of the termination of
this Agreement. If such 30 days' prior written
notice is given by either party, (i) 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, but (ii) all other
obligations each of you and the Company have to the
other, including the Company's obligation to pay
your compensation and make available the medical and
dental insurance which you are entitled hereunder,
shall continue until the date your employment
terminates as specified in such notice.
2. Compensation.
2.1 You shall be compensated for all services rendered
by you under this Agreement at the rate of $110,000
per annum (such salary, as it is from time to time
adjusted, is herein referred to as the "Base
Salary"). Such Base Salary shall be payable in
periodic installments twice monthly in accordance
<PAGE>
with the Company's payroll practices for salaried
employees. The Compensation Committee of the Board
of Directors shall review such Base Salary prior to
April 30, 1996 and each year thereafter during the
term of this Agreement, including any renewal term,
and shall make such adjustments, if any, as the
Compensation Committee shall determine; provided,
however, that no adjustment shall reduce the Base
Salary below $110,000.
2.2 If your employment hereunder shall be terminated (i)
by the Company without Cause (as defined in Section
10.3) therefor having been given to you (other than
pursuant to Sections 10.1 or 10.2), or (ii) as a
result of the non-renewal of this Agreement by the
Company upon expiration of the Initial Term or any
renewal term, then for a one year period after the
effective date of such termination the Company shall
pay you at the rate of your Base Salary in effect at
the time of such termination.
3. Duties.
3.1 During the term of your employment hereunder,
including any renewal thereof, you agree to serve as
the Vice President Finance, CFO or in such other
capacity with duties and responsibilities of a
similar nature as those initially undertaken by you
hereunder as the President of the Company may from
time to time determine. Your duties may be changed
at any time and from time to time hereafter, upon
mutual agreement, in a manner appropriate to the
Company for the times and circumstances for which
the change is to be made. You also agree to perform
such other services and duties consistent with the
office or offices in which you are serving and its
responsibilities as may from time to time be
prescribed by the Board of Directors, and you also
agree to serve, if elected as an officer and/or
director of the Company, and/or any of the Company's
other direct or indirect subsidiaries, in all cases
in conformity to the by-laws of each such
corporation. Unless you otherwise agree, you will
not be required to relocate from [the Company's
headquarters in the Plymouth Meeting, Pennsylvania
area].
<PAGE>
3.2 You shall devote your full employment energies,
interest, abilities, time and attention during
normal business hours (excluding the vacation
periods provided in Section 4.2 below) exclusively
to the business and affairs of the Company, its
parent corporation and subsidiaries, if any, and
shall not engage in any activity which conflicts or
interferes with the performance of duties hereunder.
3.3 You agree to cooperate with the Company, including
taking such reasonable medical examinations as may
be necessary, in the event the Company shall desire
or be required (such as pursuant to the terms of any
bank loan or any other agreement) to obtain life
insurance insuring your life.
3.4 You shall, except as otherwise provided herein, be
subject to the Company's rules, practices and
policies applicable to the Company's senior
executive employees. Without limiting the
generality of the foregoing, you shall, with respect
to the Company and its parents, subsidiaries, assets
and stockholders, act in a manner consistent with
your fiduciary responsibilities as an executive of
the Company.
4. Benefits.
4.1 You shall have the benefit of such life and medical
insurance, bonus, stock option and other similar
plans as the Company may have or may establish from
time to time, and in which you would be entitled to
participate, by reason of your position with the
Company, pursuant to the terms thereof. Also, to
the extent you have met the qualifications required,
you may participate in the Company's Savings and
Retirement plans. 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.
4.2 You shall be entitled to a vacation of four weeks
each year.
4.3 The Company will provide you with an annual physical
examination.
<PAGE>
5. Working and Other Facilities.
During the Initial Term of this Agreement and any
renewal term thereof, you shall be furnished with
such working facilities and other services as are
suitable to your position and adequate for the
performance of your duties.
6. Expenses.
The Company will reimburse you for reasonable
expenses (consistent with Company policy), including
traveling expenses, incurred by you in connection
with the business of the Company, upon the
presentation by you of appropriate substantiation
for such expenses.
7. Restrictive Covenants
7.1 During such time as you shall be employed by the
Company, and for a period of one year 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,
agent of or consultant for, any business which is
competitive with the business in which the Company
is engaged at the time your employment with the
Company ceases (a "Competitive Business"); provided,
however, that nothing herein (i) shall prevent you
from investing without limit in the securities of
any company listed on a national securities exchange
or quoted on the NASDAQ quotation system, provided
that your involvement with any such company is
solely that of a stockholder, and (ii) is intended
to prevent you from being employed during the one-year
period following the termination of your employment
with the Company referred to herein by any business
other than a Competitive Business.
7.2 The parties hereto intend that the covenant
contained in this Section 7 shall be deemed a series
of separate covenants for each state, county and
city. If, in any judicial proceeding, a court shall
refuse to enforce all the separate covenants deemed
included in this Section 7, because, taken together,
they cover too extensive a geographic area, the
parties intend that those of such covenants (taken
in order of the states, counties and cities therein
<PAGE>
which are least populous), which, if eliminated,
would permit the remaining separate covenants to be
enforced in such proceeding, shall, for the purpose
of such proceeding, be deemed eliminated from the
provisions of this Section 7.
8. Confidentiality, Non-Interference, Inventions and
Proprietary Information.
8.1 Confidentiality. In the course of (i) your
employment by the Company hereunder, and (ii) your
prior employment with the Company, you will have and
have had access to confidential or proprietary data
or information of the Company. You will 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 any of such data or
information. The provisions of this Section 8.1
shall survive your employment hereunder, whether by
the normal expiration thereof or otherwise. The
term "confidential or proprietary data or
information" as used in this Agreement shall mean
information not generally available to the public,
including, without limitation, personnel
information, financial information, customer lists,
supplier lists, product and tooling specifications,
trade secrets, product composition and formulae,
tools and dies, drawings and schematics,
manufacturing processes, knowhow, compute and any
other processed or collated data, computer programs,
pricing, marketing and advertising data.
8.2 Non-Interference. You agree that you will not at
any time after the termination of your employment by
the Company, for your own account or for the account
of any other person, interfere with the Company's
relationship with any of its suppliers, customers or
employees; provided that your employment by a
competitor of the Company, if not in violation of
your non-competition agreement contained in Section
7.1 above, and your contacting of suppliers and
customers in connection therewith, if not in
violation of Section 8.1 above or Sections 8.3 or
8.4 below, shall not constitute "interference"
hereunder.
<PAGE>
8.3 Inventions. It is understood that you may, during
your employment, conceive or develop certain
inventions, innovations or discoveries related to
any business in which the Company may be engaged,
either solely or jointly with others. In connection
with the conception or development thereof, you
agree to disclose promptly to the Company all such
inventions, innovations and discoveries, to assign,
and hereby do assign, to the Company all of your
right, title and interest in and to said inventions,
innovations and discoveries, and to do all things
and sign all documents deemed by the Company to be
necessary or appropriate to vest in it, its
successors and assigns, all of your right, title and
interest in and to such inventions, innovations or
discoveries, and to procure for it, at the Company's
expense, patents, copyrights and/or trademarks
covering such inventions, innovations or discoveries
in the United States and its possessions and in
foreign countries, at the discretion and under the
direction of the Company. In the event the Company
is unable to for any reason to assure your signature
on such documents, you irrevocably appoint the
Company and its duly authorized officers and agents
as your agents and attorneys-in-fact to execute such
documents and to do such things with the same legal
force and effect as if executed or done by you.
8.4 Return of Property. All written 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 request of the Company during
your employment, you shall promptly deliver the same
to the Company. In addition, upon termination of
your employment, or upon request of the Company
during your employment, you shall promptly deliver
the same to the Company. In addition, upon
termination of your employment, or upon request of
the Company during your employment, you will deliver
to the Company all other Company property in your
possession or under your control, including, but not
limited to, financial statements, marketing and sale
data, patent applications, drawings and other
documents, and all Company credit cards and
automobiles.
<PAGE>
9. Equitable Relief. With respect to the covenants
contained in Articles 7 and 8 of this Agreement, you
agree that any remedy at law for any breach of said
covenants may be inadequate and that the Company shall be
entitled to specific performance or any other mode of
injunctive and/or other equitable relief to enforce its
rights hereunder or any other relief a court might award.
10. Earlier Termination. Your employment hereunder shall
terminate prior to the Initial Term (or any renewal term,
in the event of renewal) on the following terms and
conditions:
10.1 This Agreement shall terminate automatically on the
date of your death. Notwithstanding the foregoing,
if you die during the term of this Agreement, the
Company shall (i) continue to make payments to your
estate of your Base Salary as then in effect
pursuant to this Agreement for six (6) months after
your death, and (ii) pay your estate any
reimbursable expenses which otherwise would have
been paid to you to the date of your death.
10.2 This Agreement shall be terminated if you are unable
to perform your duties hereunder for a period of any
180 days in any 365 consecutive day period by reason
of physical or mental disability. Notwithstanding
the foregoing, if this Agreement is terminated
pursuant to this Section, the Company shall pay any
accrued but unpaid Base Salary through the date of
termination and any reimbursable expenses due to you
hereunder. For purposes of this Agreement "physical
or mental disability" shall mean your inability, due
to health reasons, to discharge properly your duties
of employment, supported by the opinion of a
physician satisfactory to both you and the Company.
If the parties do not agree on a physician mutually
satisfactory to both you and the Company within ten
days of 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. 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.
<PAGE>
10.3 This Agreement shall terminate immediately upon the
Company's sending you written notice terminating
your employment hereunder for Cause. The Company
may terminate this Agreement for Cause, but only
after written notice specifying the Cause of such
action shall have been rendered to you by the
President of the Company. "Cause" shall mean any of
the following:
(i) Breach of this Agreement.
(ii) Refusal or inability (other than pursuant to
Sections 10.1 or 10.2) to perform duties
assigned in accordance with the terms of
this Agreement or overt and willful
disobedience of orders or directives issued
to you by the Company and within the scope
of your duties to the Company.
(iii) Willful misconduct in the performance of
your duties, functions and responsibilities.
(iv) Commission of acts which are illegal in
connection with the performance of your
duties, functions and responsibilities under
this Agreement.
(v) Commission of acts which would constitute a
felony offense during the term of this
Agreement.
(vi) Violation of Company rules and regulations
concerning conflict of interest.
(vii) Gross mismanagement of the assets of the
Company.
(viii) Gross incompetence, gross insubordination or
gross neglect in the performance of your
duties hereunder or being under the habitual
influence of alcohol while on duty or
possession, use, manufacture, distribution,
dispensation or sale of illegal drugs while
on or off duty.
(ix) Any act or omission, whether or not included
in the foregoing, that a court of competent
jurisdiction would determine to constitute
cause for termination.
<PAGE>
If the Company terminates this Agreement for Cause
under this Section, the Company shall not be
obligated to make any further payments under this
Agreement except for amounts due at the time of such
termination.
Existence of Cause shall be conclusively determined
for all purposes hereunder by the President of the
Company. Such advice and consultation shall be
utilized as such officer regards as appropriate, and
no obligation or duty with respect to any procedure
or formality is created by this Agreement.
11. Post-Employment Benefits Coverage.
11.1 Your coverage under the benefits program provided by
the Company will cease effective on your termination
date. You will be entitled to elect continuation of
your medical and dental benefits at the same cost
the Company pays, pursuant to the provisions of the
Consolidated Omnibus Budget Reconciliation Act
(COBRA). Details with regard to COBRA continuation
coverage will be provided to you shortly after your
termination date.
11.2 Life Insurance coverage will cease upon your
termination date. You may, however, apply to
General American Life Insurance Company (or such
other insurance company as may provide group life
insurance to the Company's employees at the time)
for an individual converted life policy, with such
application and payment of the first premium
required to be accomplished within 31 days after
your termination date. Details regarding this
conversion option will be provided to you shortly
after your termination date.
11.3 Accidental Death and Dismemberment and Long Term
Disability coverages cease with your termination
date and may not be extended or converted.
12. Termination of Prior Agreements; Modification. This
Agreement constitutes the full and complete understanding
of the parties, and will, on the Effective Date,
supersede all prior agreements and understandings, oral
or written, between the parties. This Agreement may not
be modified or amended except by an instrument in writing
signed by the party against which enforcement thereof may
be sought.
<PAGE>
13. Entire Agreement. Each party to this Agreement,
acknowledges that no representations, inducements,
promises or agreements, oral or written, have been made
by either party or anyone acting on behalf of either
party, which are not embodied herein and that no other
agreement, statement or promise not contained in this
Agreement shall be valid or binding.
14. Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the
extent of such 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.
15. Waiver of Breach. The waiver by either party of a breach
of any provision of this Agreement shall not operate as
or be construed as a waiver of any subsequent breach.
16. Notices. All notices hereunder shall be in writing and
shall be sent by express mail or by certified or
registered mail, postage prepaid, return receipt
requested; if to you, to your residence as listed in the
Company's records; and if to the Company, to the address
set forth above with copies to the President.
17. Assignability; Binding Effect. This Agreement shall not
be assigned by you without the written consent of the
Board of Directors of the Company. This Agreement shall
be binding upon and inure to the benefit of you, your
legal representatives, heirs and distributees, and shall
be binding upon and inure to the benefit of the Company,
its successors and assigns.
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. Headings. The headings of this Agreement are intended
solely for convenience of reference and shall be given no
effect in the construction or interpretation of this
Agreement.
<PAGE>
If this Agreement correctly sets forth our
understanding, please sign the duplicate original in the space
provided below and return it to the Company, whereupon this shall
constitute the employment agreement between you and the Company
effective and for the term as stated herein.
C&D CHARTER POWER SYSTEMS, INC.
By \s\ Alfred Weber
________________________________
Alfred Weber
President
Agreed as of the date
first above written:
\s\ Stephen E. Markert
______________________________
Stephen E. Markert
EXHIBIT 10.2
C&D CHARTER POWER SYSTEMS, INC.
3043 Walton Road
Plymouth Meeting, PA 19462
April 3, 1995
Mr. Paul Kambouroglou
712 Woodland Avenue
Norristown, PA 19403
Dear Mr. Kambouroglou:
C&D Charter Power Systems, Inc., a Delaware corporation
(the "Company"), agrees to employ you, and you agree to accept
such employment, under the following terms and conditions:
1. Term of Employment
1.1 Except for earlier termination as is provided in
Section 10 below, your employment under this
Agreement shall be for a term (the "Initial Term")
commencing on February 1, l995 (the "Effective
Date") and terminating on January 31, l996.
1.2 This Agreement shall be automatically renewed for
successive terms of one month each, unless either
party shall have given to the other party at least
30 days' prior written notice of the termination of
this Agreement. If such 30 days' prior written
notice is given by either party, (i) 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, but (ii) all other
obligations each of you and the Company have to the
other, including the Company's obligation to pay
your compensation and make available the medical and
dental insurance which you are entitled hereunder,
shall continue until the date your employment
terminates as specified in such notice.
2. Compensation.
2.1 You shall be compensated for all services rendered
by you under this Agreement at the rate of $120,000
per annum (such salary, as it is from time to time
adjusted, is herein referred to as the "Base
Salary"). Such Base Salary shall be payable in
periodic installments twice monthly in accordance
<PAGE>
with the Company's payroll practices for salaried
employees. The Compensation Committee of the Board
of Directors shall review such Base Salary prior to
April 30, 1996 and each year thereafter during the
term of this Agreement, including any renewal term,
and shall make such adjustments, if any, as the
Compensation Committee shall determine; provided,
however, that no adjustment shall reduce the Base
Salary below $120,000.
2.2 If your employment hereunder shall be terminated (i)
by the Company without Cause (as defined in Section
10.3) therefor having been given to you (other than
pursuant to Sections 10.1 or 10.2), or (ii) as a
result of the non-renewal of this Agreement by the
Company upon expiration of the Initial Term or any
renewal term, then for a one year period after the
effective date of such termination the Company shall
pay you at the rate of your Base Salary in effect at
the time of such termination.
3. Duties.
3.1 During the term of your employment hereunder,
including any renewal thereof, you agree to serve as
the Vice President and General Manager Motive Power
Division or in such other capacity with duties and
responsibilities of a similar nature as those
initially undertaken by you hereunder as the
President of the Company may from time to time
determine. Your duties may be changed at any time
and from time to time hereafter, upon mutual
agreement, in a manner appropriate to the Company
for the times and circumstances for which the change
is to be made. You also agree to perform such other
services and duties consistent with the office or
offices in which you are serving and its
responsibilities as may from time to time be
prescribed by the Board of Directors, and you also
agree to serve, if elected as an officer and/or
director of the Company, and/or any of the Company's
other direct or indirect subsidiaries, in all cases
in conformity to the by-laws of each such
corporation. Unless you otherwise agree, you will
not be required to relocate from [the Company's
headquarters in the Plymouth Meeting, Pennsylvania
area].
<PAGE>
3.2 You shall devote your full employment energies,
interest, abilities, time and attention during
normal business hours (excluding the vacation
periods provided in Section 4.2 below) exclusively
to the business and affairs of the Company, its
parent corporation and subsidiaries, if any, and
shall not engage in any activity which conflicts or
interferes with the performance of duties hereunder.
3.3 You agree to cooperate with the Company, including
taking such reasonable medical examinations as may
be necessary, in the event the Company shall desire
or be required (such as pursuant to the terms of any
bank loan or any other agreement) to obtain life
insurance insuring your life.
3.4 You shall, except as otherwise provided herein, be
subject to the Company's rules, practices and
policies applicable to the Company's senior
executive employees. Without limiting the
generality of the foregoing, you shall, with respect
to the Company and its parents, subsidiaries, assets
and stockholders, act in a manner consistent with
your fiduciary responsibilities as an executive of
the Company.
4. Benefits.
4.1 You shall have the benefit of such life and medical
insurance, bonus, stock option and other similar
plans as the Company may have or may establish from
time to time, and in which you would be entitled to
participate, by reason of your position with the
Company, pursuant to the terms thereof. Also, to
the extent you have met the qualifications required,
you may participate in the Company's Savings and
Retirement plans. 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.
4.2 You shall be entitled to a vacation of four weeks
each year.
4.3 The Company will provide you with an annual physical
examination.
<PAGE>
5. Working and Other Facilities.
During the Initial Term of this Agreement and any
renewal term thereof, you shall be furnished with
such working facilities and other services as are
suitable to your position and adequate for the
performance of your duties.
6. Expenses.
The Company will reimburse you for reasonable
expenses (consistent with Company policy), including
traveling expenses, incurred by you in connection
with the business of the Company, upon the
presentation by you of appropriate substantiation
for such expenses.
7. Restrictive Covenants
7.1 During such time as you shall be employed by the
Company, and for a period of one year 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,
agent of or consultant for, any business which is
competitive with the business in which the Company
is engaged at the time your employment with the
Company ceases (a "Competitive Business"); provided,
however, that nothing herein (i) shall prevent you
from investing without limit in the securities of
any company listed on a national securities exchange
or quoted on the NASDAQ quotation system, provided
that your involvement with any such company is
solely that of a stockholder, and (ii) is intended
to prevent you from being employed during the one-year
period following the termination of your employment
with the Company referred to herein by any business
other than a Competitive Business.
7.2 The parties hereto intend that the covenant
contained in this Section 7 shall be deemed a series
of separate covenants for each state, county and
city. If, in any judicial proceeding, a court shall
refuse to enforce all the separate covenants deemed
included in this Section 7, because, taken together,
they cover too extensive a geographic area, the
parties intend that those of such covenants (taken
in order of the states, counties and cities therein
<PAGE>
which are least populous), which, if eliminated,
would permit the remaining separate covenants to be
enforced in such proceeding, shall, for the purpose
of such proceeding, be deemed eliminated from the
provisions of this Section 7.
8. Confidentiality, Non-Interference, Inventions and
Proprietary Information.
8.1 Confidentiality. In the course of (i) your
employment by the Company hereunder, and (ii) your
prior employment with the Company, you will have and
have had access to confidential or proprietary data
or information of the Company. You will 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 any of such data or
information. The provisions of this Section 8.1
shall survive your employment hereunder, whether by
the normal expiration thereof or otherwise. The
term "confidential or proprietary data or
information" as used in this Agreement shall mean
information not generally available to the public,
including, without limitation, personnel
information, financial information, customer lists,
supplier lists, product and tooling specifications,
trade secrets, product composition and formulae,
tools and dies, drawings and schematics,
manufacturing processes, knowhow, compute and any
other processed or collated data, computer programs,
pricing, marketing and advertising data.
8.2 Non-Interference. You agree that you will not at
any time after the termination of your employment by
the Company, for your own account or for the account
of any other person, interfere with the Company's
relationship with any of its suppliers, customers or
employees; provided that your employment by a
competitor of the Company, if not in violation of
your non-competition agreement contained in Section
7.1 above, and your contacting of suppliers and
customers in connection therewith, if not in
violation of Section 8.1 above or Sections 8.3 or
8.4 below, shall not constitute "interference"
hereunder.
<PAGE>
8.3 Inventions. It is understood that you may, during
your employment, conceive or develop certain
inventions, innovations or discoveries related to
any business in which the Company may be engaged,
either solely or jointly with others. In connection
with the conception or development thereof, you
agree to disclose promptly to the Company all such
inventions, innovations and discoveries, to assign,
and hereby do assign, to the Company all of your
right, title and interest in and to said inventions,
innovations and discoveries, and to do all things
and sign all documents deemed by the Company to be
necessary or appropriate to vest in it, its
successors and assigns, all of your right, title and
interest in and to such inventions, innovations or
discoveries, and to procure for it, at the Company's
expense, patents, copyrights and/or trademarks
covering such inventions, innovations or discoveries
in the United States and its possessions and in
foreign countries, at the discretion and under the
direction of the Company. In the event the Company
is unable to for any reason to assure your signature
on such documents, you irrevocably appoint the
Company and its duly authorized officers and agents
as your agents and attorneys-in-fact to execute such
documents and to do such things with the same legal
force and effect as if executed or done by you.
8.4 Return of Property. All written 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 request of the Company during
your employment, you shall promptly deliver the same
to the Company. In addition, upon termination of
your employment, or upon request of the Company
during your employment, you shall promptly deliver
the same to the Company. In addition, upon
termination of your employment, or upon request of
the Company during your employment, you will deliver
to the Company all other Company property in your
possession or under your control, including, but not
limited to, financial statements, marketing and sale
data, patent applications, drawings and other
documents, and all Company credit cards and
automobiles.
<PAGE>
9. Equitable Relief. With respect to the covenants
contained in Articles 7 and 8 of this Agreement, you
agree that any remedy at law for any breach of said
covenants may be inadequate and that the Company shall be
entitled to specific performance or any other mode of
injunctive and/or other equitable relief to enforce its
rights hereunder or any other relief a court might award.
10. Earlier Termination. Your employment hereunder shall
terminate prior to the Initial Term (or any renewal term,
in the event of renewal) on the following terms and
conditions:
10.1 This Agreement shall terminate automatically on the
date of your death. Notwithstanding the foregoing,
if you die during the term of this Agreement, the
Company shall (i) continue to make payments to your
estate of your Base Salary as then in effect
pursuant to this Agreement for six (6) months after
your death, and (ii) pay your estate any
reimbursable expenses which otherwise would have
been paid to you to the date of your death.
10.2 This Agreement shall be terminated if you are unable
to perform your duties hereunder for a period of any
180 days in any 365 consecutive day period by reason
of physical or mental disability. Notwithstanding
the foregoing, if this Agreement is terminated
pursuant to this Section, the Company shall pay any
accrued but unpaid Base Salary through the date of
termination and any reimbursable expenses due to you
hereunder. For purposes of this Agreement "physical
or mental disability" shall mean your inability, due
to health reasons, to discharge properly your duties
of employment, supported by the opinion of a
physician satisfactory to both you and the Company.
If the parties do not agree on a physician mutually
satisfactory to both you and the Company within ten
days of 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. 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.
<PAGE>
10.3 This Agreement shall terminate immediately upon the
Company's sending you written notice terminating
your employment hereunder for Cause. The Company
may terminate this Agreement for Cause, but only
after written notice specifying the Cause of such
action shall have been rendered to you by the
President of the Company. "Cause" shall mean any of
the following:
(i) Breach of this Agreement.
(ii) Refusal or inability (other than pursuant to
Sections 10.1 or 10.2) to perform duties
assigned in accordance with the terms of
this Agreement or overt and willful
disobedience of orders or directives issued
to you by the Company and within the scope
of your duties to the Company.
(iii) Willful misconduct in the performance of
your duties, functions and responsibilities.
(iv) Commission of acts which are illegal in
connection with the performance of your
duties, functions and responsibilities under
this Agreement.
(v) Commission of acts which would constitute a
felony offense during the term of this
Agreement.
(vi) Violation of Company rules and regulations
concerning conflict of interest.
(vii) Gross mismanagement of the assets of the
Company.
(viii) Gross incompetence, gross insubordination or
gross neglect in the performance of your
duties hereunder or being under the habitual
influence of alcohol while on duty or
possession, use, manufacture, distribution,
dispensation or sale of illegal drugs while
on or off duty.
(ix) Any act or omission, whether or not included
in the foregoing, that a court of competent
jurisdiction would determine to constitute
cause for termination.
<PAGE>
If the Company terminates this Agreement for Cause
under this Section, the Company shall not be
obligated to make any further payments under this
Agreement except for amounts due at the time of such
termination.
Existence of Cause shall be conclusively determined
for all purposes hereunder by the President of the
Company. Such advice and consultation shall be
utilized as such officer regards as appropriate, and
no obligation or duty with respect to any procedure
or formality is created by this Agreement.
11. Post-Employment Benefits Coverage.
11.1 Your coverage under the benefits program provided by
the Company will cease effective on your termination
date. You will be entitled to elect continuation of
your medical and dental benefits at the same cost
the Company pays, pursuant to the provisions of the
Consolidated Omnibus Budget Reconciliation Act
(COBRA). Details with regard to COBRA continuation
coverage will be provided to you shortly after your
termination date.
11.2 Life Insurance coverage will cease upon your
termination date. You may, however, apply to
General American Life Insurance Company (or such
other insurance company as may provide group life
insurance to the Company's employees at the time)
for an individual converted life policy, with such
application and payment of the first premium
required to be accomplished within 31 days after
your termination date. Details regarding this
conversion option will be provided to you shortly
after your termination date.
11.3 Accidental Death and Dismemberment and Long Term
Disability coverages cease with your termination
date and may not be extended or converted.
12. Termination of Prior Agreements; Modification. This
Agreement constitutes the full and complete understanding
of the parties, and will, on the Effective Date,
supersede all prior agreements and understandings, oral
or written, between the parties. This Agreement may not
be modified or amended except by an instrument in writing
signed by the party against which enforcement thereof may
be sought.
<PAGE>
13. Entire Agreement. Each party to this Agreement,
acknowledges that no representations, inducements,
promises or agreements, oral or written, have been made
by either party or anyone acting on behalf of either
party, which are not embodied herein and that no other
agreement, statement or promise not contained in this
Agreement shall be valid or binding.
14. Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the
extent of such 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.
15. Waiver of Breach. The waiver by either party of a breach
of any provision of this Agreement shall not operate as
or be construed as a waiver of any subsequent breach.
16. Notices. All notices hereunder shall be in writing and
shall be sent by express mail or by certified or
registered mail, postage prepaid, return receipt
requested; if to you, to your residence as listed in the
Company's records; and if to the Company, to the address
set forth above with copies to the President.
17. Assignability; Binding Effect. This Agreement shall not
be assigned by you without the written consent of the
Board of Directors of the Company. This Agreement shall
be binding upon and inure to the benefit of you, your
legal representatives, heirs and distributees, and shall
be binding upon and inure to the benefit of the Company,
its successors and assigns.
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. Headings. The headings of this Agreement are intended
solely for convenience of reference and shall be given no
effect in the construction or interpretation of this
Agreement.
<PAGE>
If this Agreement correctly sets forth our
understanding, please sign the duplicate original in the space
provided below and return it to the Company, whereupon this shall
constitute the employment agreement between you and the Company
effective and for the term as stated herein.
C&D CHARTER POWER SYSTEMS, INC.
By \s\ Alfred Weber
________________________________
Alfred Weber
President
Agreed as of the date
first above written:
\s\ Paul Kambouroglou
______________________________
Paul Kambouroglou
EXHIBIT 10.3
C&D CHARTER POWER SYSTEMS, INC.
3043 Walton Road
Plymouth Meeting, PA 19462
April 3, 1995
Dr. Leslie S. Holden
121 Orchard Court
Blue Bell, Pa 19422
Dear Dr. Holden:
We refer to the Employment Agreement (the "Employment
Agreement"), dated January 26, l990, between C&D Charter Power
Systems, Inc., a Delaware corporation, and you.
Section 2 of the Employment Agreement is hereby amended
by inserting "(a)" after the caption thereof, and by inserting
the following new paragraph at the end of such Section:
"(b) If your employment hereunder shall be
terminated (i) by the Company without Cause
(as defined in Section 10(c) therefor having
been given to you (other than pursuant to
Sections 10(a) or 10(b), or (ii) as a result
of the non-renewal of this Agreement by the
Company upon expiration of the Initial Term
or any renewal term, then for a one year
period after the effective date of such
termination the Company shall pay you at the
rate of your Base Salary in effect at the
time of such termination.
Section 7(a) of the Employment Agreement is hereby
amended by deleting the last sentence thereof.
Section 10(b) of the Employment Agreement is hereby
amended by adding the following sentence after the first sentence
thereof:
<PAGE>
Notwithstanding the foregoing, if this
Agreement is terminated pursuant to this
Section, the Company shall pay any accrued
but unpaid Base Salary through the date of
termination and any reimbursable expenses due
to you hereunder.
Except as modified hereby, the Employment Agreement
remains unchanged and in full force and effect.
If you are in agreement with the foregoing, please so
indicate by signing in the space indicated below, whereupon this
letter will become a binding agreement between us amending the
Employment Agreement.
Very truly yours,
C&D CHARTER POWER SYSTEMS, INC.
By \s\ Alfred Weber
___________________________
Alfred Weber
President
Agreed to and accepted
as of the date first above written:
\s\ Leslie S. Holden
___________________________
Leslie S. Holden
EXHIBIT 10.4
C&D CHARTER POWER SYSTEMS, INC.
3043 Walton Road
Plymouth Meeting, PA 19462
April 3, 1995
Mr. A. Gordon Goodyear
1281 E. Calle Mariposa
Tucson, AZ 85718
Dear Mr. Goodyear:
We refer to the Employment Agreement (the "Employment
Agreement"), dated March 1, 1994 between C&D Charter Power
Systems, Inc., a Delaware corporation, and you.
Section II of the Employment Agreement is hereby
amended by inserting "A." after the caption thereof, and by
inserting the following new paragraph at the end of such Section:
"B" If your employment hereunder shall be
terminated (i) by the Company without Cause
(as defined in Section X.C.) therefor having
been given to you (other than pursuant to
Sections X.A. or X.B.), or (ii) as a result
of the non-renewal of this Agreement by the
Company upon expiration of the Initial Term
or any renewal term, then for a one year
period after the effective date of such
termination the Company shall pay you at the
rate of your Base Salary in effect at the
time of such termination.
Section VII.A. of the Employment Agreement is hereby
amended by deleting the last sentence thereof.
Section X.B. of the Employment Agreement is hereby
amended by adding the following sentence after the first sentence
thereof:
<PAGE>
Page Two
Notwithstanding the foregoing, if this
Agreement is terminated pursuant to this
Section, the Company shall pay any accrued
but unpaid Base Salary through the date of
termination and any reimbursable expenses due
to you hereunder.
Except as modified hereby, the Employment Agreement
remains unchanged and in full force and effect.
If you are in agreement with the foregoing, please so
indicate by signing in the space indicated below, whereupon this
letter will become a binding agreement between us amending the
Employment Agreement.
Very truly yours,
C&D CHARTER POWER SYSTEMS, INC.
By \s\ Alfred Weber
___________________________
Alfred Weber
President
Agreed to and accepted
as of the date first above written:
\s\ A. Gordon goodyear
___________________________
A. Gordon Goodyear
EXHIBIT 10.5
C&D CHARTER POWER SYSTEMS, INC.
3043 Walton Road
Plymouth Meeting, PA 19462
April 3, 1995
Mr. George C. Branca
1611 Winchester Drive
Blue Bell, PA 19422
Dear Mr. Branca:
We refer to the Employment Agreement (the "Employment
Agreement"), dated April 7, l992, between C&D Charter Power
Systems, Inc., a Delaware corporation, and you.
Section 2 of the Employment Agreement is hereby amended
by inserting "(a)" after the caption thereof, and by inserting
the following new paragraph at the end of such Section:
"(b) If your employment hereunder shall be
terminated (i) by the Company without Cause
(as defined in Section 10(c) therefor having
been given to you (other than pursuant to
Sections 10(a) or 10(b), or (ii) as a result
of the non-renewal of this Agreement by the
Company upon expiration of the Initial Term
or any renewal term, then for a one year
period after the effective date of such
termination the Company shall pay you at the
rate of your Base Salary in effect at the
time of such termination.
Section 7(a) the Employment Agreement is hereby amended
by deleting the last sentence thereof.
Section 10(b) of the Employment Agreement is hereby
amended by adding the following sentence after the first sentence
thereof:
<PAGE>
Page Two
Notwithstanding the foregoing, if this
Agreement is terminated pursuant to this
Section, the Company shall pay any accrued
but unpaid Base Salary through the date of
termination and any reimbursable expenses due
to you hereunder.
Except as modified hereby, the Employment Agreement
remains unchanged and in full force and effect.
If you are in agreement with the foregoing, please so
indicate by signing in the space indicated below, whereupon this
letter will become a binding agreement between us amending the
Employment Agreement.
Very truly yours,
C&D CHARTER POWER SYSTEMS, INC.
By \s\ Alfred Weber
___________________________
Alfred Weber
President
Agreed to and accepted
as of the date first above written:
\s\ George C. Branca
___________________________
George C. Branca
EXHIBIT 10.6
INCENTIVE COMPENSATION PLAN
FOR EXECUTIVE AND KEY SALARIED EMPLOYEES
(Excludes Sales Bonus Program)
FOR THE YEAR ENDING JANUARY 31, 1996
I. Introduction
The Incentive Compensation Plan for Executives and Key
Salaried Employees as adopted and amended by the Compensation
Committee of the Board of Directors is designed to reward individual
performance as measured against specified objectives. The Plan is
also designed to recognize other employees for a completely discretionary
bonus based upon significant contribution. Executive and key employees
who joined the company in the plan year may, with the approval of the
president, participate in the Incentive Compensation Plan on a prorated
basis (based on the number of full months they are actively employed).
II. Establishment of Objectives
Each executive and key employee shall establish at the beginning of
each year, with his/her supervisor, objectives against which his/her
performance for that year shall be measured.
These objectives must correspond to the overall goals of the company.
III. Objectives
Objectives include: earnings per share; achieving corporate cash flow
goals and other significant individual goals.
IV. Additional Criteria & Conditions
- 60% or more of individual participant's priorities must be
accomplished to earn any bonus.
- It is possible for participants to receive in excess of 100%
achievement of an individual goal. However, these achievements
must satisfy the combined judgement of the individual's direct
manager and the President, CEO. In no situation can achievement
of an individual goal or the combined total of all goals exceed 125%.
<PAGE>
- At its sole discretion, the Board reserves the right to recognize
significant issues, factors or contributions related to individual
participants and to adjust all or part of any participant's bonus
accordingly. The Board reserves the right to alter, amend, reduce,
suspend or terminate the Incentive Plan. Only active employees
(those physically performing their assigned duties) are eligible to
participate in the Incentive Compensation Plan.
- Employees who terminate their employment with the company, or
employees who are terminated by the company for any reason whatsoever,
are not eligible for incentive compensation for the fiscal year
during which employment is terminated.
The Incentive Compensation Plan and related goals for the fiscal year
ending January 31, 1996 will be pro-rated over the period from
February 1, 1995 to the date of "Closing" or a "Change of Control"
in the event this occurs prior to the end of the fiscal year.
Payment of the pro-rated incentive compensation from February 1, 1995
to the date of closing would then be made at "Closing."
EXHIBIT 11
CHARTER POWER SYSTEMS, INC. AND SUBSIDIARIES
EARNINGS PER SHARE COMPUTATIONS
(Dollars and shares in thousands)
(Unaudited)
Three months ended
April 30,
1995 1994
---- ----
NET INCOME $3,175 $2,008
====== ======
Weighted average number of common shares
outstanding 5,967 5,837
Effect of shares issuable under stock
option plan 428 224
------ ------
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING (PRIMARY) 6,395 6,061
====== ======
NET INCOME PER COMMON AND COMMON
EQUIVALENT SHARE (PRIMARY) $ .50 $ .33
====== ======
Weighted average number of common shares
outstanding 5,967 5,837
Effect of shares issuable under stock
option plan 428 276
------ ------
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING (FULLY DILUTED) 6,395 6,113
====== ======
NET INCOME PER COMMON AND COMMON
EQUIVALENT SHARE (FULLY DILUTED) $ .50 $ .33
====== ======
EXHIBIT 15
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
re: Charter Power Systems, Inc. and Subsidiaries
Registration on Forms S-8 (Registration No. 33-31978,
No. 33-71390 and No. 33-86672)
We are aware that our report dated May 30, 1995 on our review of
interim financial information of Charter Power Systems, Inc. and
Subsidiaries for the period ended April 30, 1995 and included in
the Company's quarterly report on Form 10-Q for the quarter then
ended is incorporated by reference in the registration statements
of Charter Power Systems, Inc. and Subsidiaries on Forms S-8
(Registration No. 33-31978, No. 33-71390 and No. 33-86672).
Pursuant to Rule 436(c) under the Securities Act of 1933, this
report should not be considered a part of the registration
statement prepared or certified by us within the meaning of
Sections 7 and 11 of that Act.
\s\ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
June 13, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF 4/30/95 AND STATEMENT OF INCOME FOR THE
PERIOD ENDED 4/30/95 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> APR-30-1995
<CASH> 2516
<SECURITIES> 0
<RECEIVABLES> 36320
<ALLOWANCES> 1770
<INVENTORY> 31861
<CURRENT-ASSETS> 74820
<PP&E> 40256
<DEPRECIATION> 0
<TOTAL-ASSETS> 123088
<CURRENT-LIABILITIES> 44672
<BONDS> 13342
<COMMON> 60
0
0
<OTHER-SE> 54646
<TOTAL-LIABILITY-AND-EQUITY> 123088
<SALES> 58777
<TOTAL-REVENUES> 58777
<CGS> 44985
<TOTAL-COSTS> 44985
<OTHER-EXPENSES> 8714
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 231
<INCOME-PRETAX> 4847
<INCOME-TAX> 1672
<INCOME-CONTINUING> 3175
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3175
<EPS-PRIMARY> .50
<EPS-DILUTED> .50
</TABLE>
