May 28, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Charter Power Systems, Inc. to be held on Tuesday, June 24, 1997, at 10:00
A.M., at The Union League of Philadelphia, 140 South Broad Street, Philadelphia,
Pennsylvania. Your Board of Directors and management look forward to personally
greeting those stockholders able to attend.
This year, in addition to electing directors and ratifying the
appointment of Coopers & Lybrand L.L.P. as independent accountants for the
company, you are being asked to consider and approve an amendment to the
Restated Certificate of Incorporation of Charter Power Systems, Inc. to change
the name of the company to "C&D Technologies, Inc." Your Board of Directors
recommends that you vote FOR these proposals. They are more fully described in
the accompanying Proxy Statement, which you are urged to read carefully.
Whether or not you plan to attend, you can assure that your shares are
represented and voted at the Annual Meeting by promptly completing, signing,
dating and returning the enclosed proxy card in the envelope provided.
Thank you for your cooperation and continued support.
Sincerely,
/s/ Alfred Weber
ALFRED WEBER
Chairman of the Board,
President and Chief Executive Officer
<PAGE>
CHARTER POWER SYSTEMS, INC.
1400 Union Meeting Road
Blue Bell, Pennsylvania 19422
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 24, 1997
The Annual Meeting of Stockholders of Charter Power Systems, Inc. (the
"Company") will be held at the Union League of Philadelphia, 140 South Broad
Street, Philadelphia, Pennsylvania, on Tuesday, June 24, 1997, at 10:00 A.M.,
for the following purposes:
1. To elect directors of the Company for the ensuing year.
2. To approve an amendment to the Company's Restated Certificate of
Incorporation changing the name of the Company to "C&D Technologies,
Inc."
3. To ratify the appointment of Coopers & Lybrand L.L.P. as independent
accountants for the Company for the fiscal year ending January 31,
1998.
4. To transact such other business as may properly come before the
meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on May 22, 1997 as
the record date for the determination of stockholders entitled to notice of and
to vote at the meeting and at any adjournments thereof.
IF YOU ARE UNABLE TO BE PRESENT PERSONALLY, PLEASE SIGN AND DATE THE
ENCLOSED PROXY, WHICH IS BEING SOLICITED BY THE BOARD OF DIRECTORS, AND RETURN
IT PROMPTLY IN THE ENCLOSED ENVELOPE.
BY ORDER OF THE BOARD OF DIRECTORS
GLENN M. FEIT
Secretary
May 28, 1997
<PAGE>
CHARTER POWER SYSTEMS, INC.
1400 Union Meeting Road
Blue Bell, Pennsylvania 19422
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JUNE 24, 1997
GENERAL INFORMATION
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Charter Power Systems, Inc. (the "Company") to be used at the
Annual Meeting of Stockholders to be held at The Union League of Philadelphia,
140 South Broad Street, Philadelphia, Pennsylvania, on Tuesday, June 24, 1997,
at 10:00 A.M., and at any adjournments thereof.
When the accompanying proxy is properly executed and returned, the shares
of common stock of the Company, par value $.01 per share (the "Common Stock"),
it represents will be voted at the meeting in accordance with any directions
noted thereon and, if no direction is indicated, the shares it represents will
be voted: (i) FOR the election of the nominees for directors set forth below;
(ii) FOR the approval of an amendment to the Restated Certificate of
Incorporation of the Company changing the name of the Company to "C&D
Technologies, Inc."; (iii) FOR the ratification of the appointment of Coopers &
Lybrand L.L.P. as independent public accountants for the Company for the fiscal
year ended January 31, 1998; and (iv) in the discretion of the holders of the
proxy with respect to any other business that may properly come before the
meeting. Any stockholder signing and delivering a proxy may revoke it at any
time before it is voted by delivering to the Secretary of the Company a written
revocation or a duly executed proxy bearing a date later than the date of the
proxy being revoked. Any stockholder attending the meeting in person may
withdraw his proxy and vote his shares.
The cost of this solicitation of proxies will be borne by the Company.
Solicitations will be made initially by mail; however, officers and regular
employees of the Company may solicit proxies personally or by telephone or
telegram. Those persons will not be compensated specifically for such services.
The Company may reimburse brokers, banks, custodians, nominees, and fiduciaries
holding shares of Common Stock in their names or in the names of their nominees
for their reasonable charges and expenses in forwarding proxies and proxy
material to the beneficial owners of such shares.
The approximate date on which this Proxy Statement first will be mailed to
stockholders of the Company is May 28, 1997.
VOTING RIGHTS
Only holders of record of shares of Common Stock at the close of business
on May 22, 1997 will be entitled to vote at the Annual Meeting of Stockholders.
On that date, there were outstanding 6,089,425 shares of Common Stock, the
holders of which are entitled to one vote per share on each matter to come
before the meeting. Voting rights are non-cumulative.
<PAGE>
The presence, in person or by proxy, of stockholders holding a majority of
the outstanding shares of Common Stock entitled to vote will constitute a quorum
at the Annual Meeting. Directors will be elected at the Annual Meeting by a
plurality of the votes cast (i.e., the seven nominees receiving the greatest
number of votes will be elected as directors). The amendment of the Restated
Certificate of Incorporation requires the affirmative vote of a majority of the
outstanding shares of Common Stock entitled to vote thereon. The ratification of
the independent accountants, and any other business that may properly come
before the meeting and adjournments thereof, requires the affirmative vote of a
majority of the shares present in person or represented by proxy. Abstentions
and broker non-votes (which occur when a nominee holding shares for a beneficial
owner does not vote on a particular proposal because the nominee does not have
discretionary voting power with respect to that item and has not received
instructions from the beneficial owner) are counted for purposes of determining
the presence or absence of a quorum at the meeting. Abstentions are counted in
tabulations of the votes cast on proposals presented to stockholders, but broker
non-votes are not counted for purposes of determining whether a proposal has
been approved.
PRINCIPAL STOCKHOLDERS
As of May 7, 1997, the persons listed in the following table were the only
persons known to the Company (based on information set forth in Schedules 13D
and 13G filed with the Securities and Exchange Commission or otherwise provided
to the Company by these persons) to be the beneficial owners of more than five
percent of the Company's outstanding shares of Common Stock.
Shares of
Name and address of Common Stock Percent
Beneficial Owner Beneficially Owned of Class
---------------- ------------------ --------
Westport Asset Management, Inc. (1) ....... 520,100 8.5%
253 Riverside Avenue
Westport, Connecticut 06880
Kennedy Capital Management, Inc. (2)....... 416,100 6.8%
10829 Olive Boulevard
St. Louis, Missouri 63141-7739
Shell Pensions Trust Limited (3)........... 397,200 6.5%
Shell Centre
London SE1 7NA
Paradigm Capital Management, Inc. (4)...... 389,300 6.4%
9 Elk Street
Albany, New York 12207-1002
Dimensional Fund Advisors Inc. (5)......... 306,400 5.0%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
- --------------------
(1) Based on a telepone conversation with Westport Asset Managment, Inc.,
this party has shared voting and dispositve power with respect to all
the shares listed opposite its name in the table.
(footnotes continue on following page)
2
<PAGE>
(2) Based on the Schedule 13G, dated February 12, 1997, filed by Kennedy
Capital Management, Inc. This party has sole voting power with respect
to 303,800 of the shares and sole dispositive power with respect to
416,100 of the shares listed opposite its name in the table.
(3) Based on the Schedule 13D, dated February 2, 1996, filed by Shell
Pensions Trust Limited as Trustee of the Shell Contributory Pension
Fund. This party has sole voting and dispositive power with respect to
all the shares listed opposite its name in the table.
(4) Based on the Schedule 13G, dated January 14, 1997, filed by Paradigm
Capital Management, Inc. This party has shared voting and dispositive
power with respect to all the shares listed opposite its name in the
table.
(5) Based on the Schedule 13G, dated February 7, 1996 filed by Dimensional
Fund Advisors Inc. This party has sole voting power with respect to
254,300 of the shares and sole dispositive power with respect to
306,400 of the shares listed opposite its name in the table.
ELECTION OF DIRECTORS
At the Annual Meeting of Stockholders, the entire Board of Directors is to
be elected. In the absence of instructions to the contrary, the shares of Common
Stock represented by a proxy delivered to the Board of Directors will be voted
FOR the seven nominees named under "Management" below. Each nominee has
consented to being named as a nominee in this Proxy Statement and to serve if
elected. However, if any such nominee should become unable to serve as a
director for any reason, votes will be cast instead for a substitute nominee
designated by the Board of Directors or, if none is so designated, will be cast
according to the judgment of the person or persons voting the proxy.
MANAGEMENT
The table below and the paragraphs that follow it present certain
information concerning the nominees for directors, who are the sole current
directors, and the executive officers of the Company. Directors are elected
annually to serve until the next annual meeting of stockholders and until their
successors have been elected. Officers are elected by and serve at the
discretion of the Board of Directors. There are no family relationships among
any of the directors and executive officers of the Company.
<TABLE>
<CAPTION>
Shares of
Common Stock
Positions and Beneficially Percent
Offices with Owned as of of
Nominees for Directors the Company Age April 30, 1997 Class(7)
---------------------- ----------- --- -------------- --------
<S> <C> <C> <C>
Alfred Weber (1)(2)..................... Chairman of the Board, 65 233,590 3.8%
President and Chief
Executive Officer
Kevin P. Dowd (3)....................... Director 48 - *
Glenn M. Feit (4)....................... Director and Secretary 67 1,000 *
William Harral, III (4)(5)(6)........... Director 57 1,000 *
Warren A. Law (3)(4)(5)(6).............. Director 73 1,500 *
Alan G. Lutz (1)(6)..................... Director 51 500 *
John A. H. Shober (1)(3)................ Director 63 2,000 *
(table continues on following page)
3
<PAGE>
EXECUTIVE OFFICERS WHO
ARE NOT DIRECTORS
A. Gordon Goodyear (2).................. Vice President and General 48 21,500 *
Manager - C&D Power
Electronics
Leslie S. Holden (2).................... Vice President - Battery 60 15,000 *
Technology
Apostolos T. Kambouroglou (2)........... Vice President and General 54 14,000 *
Manager - Motive Power Systems
Stephen E. Markert, Jr. (2)............. Vice President - Finance and 45 8,534 *
Treasurer
Larry W. Moore.......................... Vice President and General 54 - *
Manager - C&D PowerCom
Stephen J. Weglarz (2).................. Vice President - Corporate 51 3,000 *
Services and Corporate Counsel
All directors and
officers as a group (13 persons)....... 301,624 4.8%
- ---------------
</TABLE>
* Less than 1% of outstanding shares of Common Stock
(1) Member of the Executive Committee.
(2) The figures for shares of Common Stock beneficially owned as of April
30, 1997 include fully vested and presently exercisable options to
purchase (a) 110,000 shares for Mr. Weber, (b) 21,500 shares for Dr.
Goodyear, (c) 13,000 shares for Dr. Holden, (d) 12,000 shares for Mr.
Kambouroglou, (e) 4,000 shares for Mr. Markert and (f) 3,000 shares
for Mr. Weglarz. The figures for Percent of Class assume, as to each
individual only, that all shares issuable to such individual upon
exercise of such options have been issued.
(3) Member of the Audit Committee.
(4) Member of the Compensation Committee.
(5) Member of the Stock Option Subcommittee of the Compensation Committee.
(6) Member of the Nominating Committee.
(7) Based upon shares outstanding as of April 30, 1997, excluding Treasury
Stock.
Alfred Weber has been President since joining the Company in April 1989,
became Chief Executive Officer in December 1992 and became Chairman of the Board
on November 1, 1995. From 1964 to 1987, Mr. Weber held various managerial
positions with Uniroyal, Inc. and its subsidiaries, rising to the position of
President and Chief Executive Officer of Uniroyal Plastics Company, Inc. Mr.
Weber is also a director of Microwave Power Devices, Inc. ("MPD"), a
manufacturer of power amplifiers and related subsystems for the wireless
telecommunications market, and Battery Council International, a worldwide
manufacturers' association.
Kevin P. Dowd has been a director of the Company since January 1997. He has
been President and Chief Executive Officer of Checkpoint Systems, Inc., a
manufacturer and supplier of electronic security
4
<PAGE>
systems for retail and commercial customers, since January 1995. Mr. Dowd was
President and Chief Operating Officer from 1993 to 1995 and prior to that he
served as the Executive Vice President.
Glenn M. Feit has been a director and the Secretary of the Company since
January 1986. He is a member of the law firm of Proskauer Rose Goetz &
Mendelsohn LLP, general counsel to the Company. Mr. Feit has been engaged in the
practice of law in New York since 1957.
William Harral, III has been a director of the Company since July 1996. He
was President and Chief Executive Officer of Bell Atlantic - Pennsylvania, Inc.
(formerly Bell of Pennsylvania) from 1994 to March 1997. Prior to 1994 he held
the position of Vice President - External Affairs and Chief Financial Officer of
Bell of Pennsylvania. Mr. Harral also served as a director of Bell Atlantic -
Pennsylvania, Inc. and serves on the board of The Bryn Mawr Trust Company, a
commercial bank.
Warren A. Law has been a director of the Company since February 1987. Mr.
Law has been a Professor at the Harvard Business School since 1958 (through June
1991 in an active capacity) and currently is the Edmund Cogswell Converse
Professor Emeritus of Finance and Banking. Professor Law is also a director of
MPD.
Alan G. Lutz has been a director of the Company since July 1996. He is a
Senior Vice President and Group General Manager of the Communications Products
Group of Compaq Computer Corporation in Houston, Texas. He was Executive Vice
President and President of the Computer Systems Group at Unisys Corporation, an
information management company, from 1994 to 1996. From 1993 to 1994, he was a
consultant affiliated with the Kassandra Group. Prior to 1993, he was Senior
Vice President and President of the Public Networks Group of Northern Telecom,
Ltd., a manufacturer and distributor of telecommunications equipment.
John A. H. Shober has been a director of the Company since July 1996. He
has been a director of Penn Virginia Corporation, a natural resources company,
since 1989, Vice Chairman of the board of directors from 1992 to 1996, and
President and Chief Executive Officer from 1989 to 1992. Mr. Shober is also a
director of Airgas, Inc., a distributor of industrial gases and related
products, BetzDearborn Inc., a specialty chemical company, and MIBRA GmbH, a
German company principally involved in coal mining and electric power
production.
A. Gordon Goodyear, Ph.D., was, in April 1994, appointed Vice President and
General Manager - International Power Systems, Inc., recently renamed C&D Power
Electronics. He joined the Company in March 1991 as Vice President and General
Manager - Power Electronics. Prior to joining the Company, Dr. Goodyear was
President of IRD Mechanalysis (Canada).
Leslie S. Holden, F.R.I.C., Ph.D., was appointed Vice President - Battery
Technology of the Company when he joined the Company in September 1989. Prior to
joining the Company, Dr. Holden was Director - Technology of Altus Corp., a
manufacturer of sealed recombinant calcium lead acid batteries primarily for the
uninterruptible power systems market.
Apostolos T. Kambouroglou was appointed Vice President and General Manager
- - Motive Power Systems in February 1995. He joined the Company in March 1991 as
Plant Manager of the Conyers, Georgia plant, and subsequently held the positions
of Senior Director - Standby Operations and Vice President - Operations, C&D
PowerCom. Prior to joining the Company, Mr. Kambouroglou was President of Enicon
Engineered Containers, Inc.
5
<PAGE>
Stephen E. Markert, Jr. was appointed Vice President and Chief Financial
Officer in February 1995. He joined the Company in May 1989 as Corporate
Controller. Prior to that time, Mr. Markert was a divisional controller of
Decision Data Computer Corporation.
Larry W. Moore was appointed Vice President and General Manager of C&D
PowerCom in January 1997. He joined the Company in December 1996 as Vice
President of Marketing for C&D PowerCom and Ratelco Electronics. From 1995 to
1996, he was President of MooreCom, a communications consulting firm he founded.
Prior to that time, through 1995, Mr. Moore spent over 30 years with AT&T where
he held various sales and marketing positions rising to Associate Vice
President, CATV Global Business Unit of Network Systems.
Stephen J. Weglarz was appointed Vice President - Corporate Services and
Corporate Counsel in August 1995. He joined the Company in April 1990 as Manager
of Human Resources/Labor Counsel and subsequently held the position of Internal
General Counsel/Director of Labor Relations. Prior to joining the Company, Mr.
Weglarz was a partner in the law firm of Peckner, Dorfman, Wolffe, Rounick &
Cabot.
The Board of Directors has established an Executive Committee, a
Compensation Committee (including a Stock Option Subcommittee), an Audit
Committee and a Nominating Committee. The Executive Committee assists the Board
in its responsibilities. The Compensation Committee reviews the compensation of
executives (including awards pursuant to the Company's Incentive Compensation
Plan) and through its Stock Option Subcommittee administers the Company's Stock
Option Plan. The Audit Committee, which is comprised of directors who are not
officers or employees of the Company, reviews the scope of the independent
audit, the Company's year-end financial statements and such other matters
relating to the Company's financial affairs as its members deem appropriate. The
Nominating Committee identifies and evaluates candidates for election as members
of the Board of Directors.
The Board of Directors held four regular meetings and one special meeting
during the year ended January 31, 1997. The Compensation Committee, Stock Option
Subcommittee and Nominating Committee each held one meeting and the Audit
Committee held two meetings. Each of the directors attended 75% or more of the
meetings of the Board of Directors and each Committee of which he was a member
in the year ended January 31, 1997, except that Mr. Dowd attended only those
meetings held after he became a director.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning annual and long-term
compensation paid by the Company for each of the last three fiscal years to its
Chairman of the Board, President and Chief Executive Officer and four other most
highly compensated executive officers as of January 31, 1997 and one former
officer whose total annual salary and bonus for the Company for the year then
ended exceeded $100,000.
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
------------------- ------------
Securities
Other Underlying All
Name Annual Options Other
& Principal Fiscal Salary Bonus Compensation Granted Compensation
Position Year ($) (1) ($) (2) ($) (3) (#) ($) (4)
- -------- ---- -------- -------- -------- ----- --------
<S> <C> <C> <C> <C> <C> <C>
Alfred Weber 1997 $392,312 $191,500 $2,360,600 34,000 $ 4,905
Chairman of 1996 351,987 221,000 -- -- 4,680
the Board, 1995 344,194 232,000 -- 50,000 4,620
President and
Chief Executive
Officer
A. Gordon Goodyear 1997 165,833 60,000 -- 14,000 4,652
Vice President 1996 142,500 50,000 -- -- 8,740 (5)
and General 1995 126,642 80,000 -- 9,000 70,152 (5)
Manager - C&D
Power Electronics
Leslie S. Holden 1997 151,684 34,000 -- 8,000 4,288
Vice President - 1996 139,181 55,000 197,500 -- 4,454
Battery Technology 1995 134,172 48,000 -- 8,000 4,637
Stephen E. Markert, Jr. 1997 136,682 45,500 -- 10,000 4,877
Vice President - 1996 120,012 53,000 -- -- 1,967
Finance and Treasurer 1995 86,003 40,000 20,625 4,000 1,215
Stephen J. Weglarz 1997 136,682 58,000 28,750 12,000 4,702
Vice President - 1996 107,428 48,000 11,625 -- 3,810
Corporate Services 1995 87,920 40,000 35,125 5,000 2,685
and Corporate Counsel
George C. Branca 1997 171,838 46,500 85,625 10,000 245,104 (7)
Former Vice 1996 156,016 70,000 86,250 -- 4,673
President and 1995 143,339 60,000 -- 10,000 4,687
General Manager -
PowerCom Division (6)
---------------
</TABLE>
(footnotes begin on following page)
7
<PAGE>
(1) Does not include the value of certain personal benefits. The estimated
value of such personal benefits for each listed officer did not exceed
the lesser of $50,000 or 10% of the total annual salary and bonus paid
to that officer for the relevant fiscal year.
(2) Represents incentive compensation under the Company's Incentive
Compensation Plan. Also includes payments to Messrs. Weber and Weglarz
and Dr. Goodyear of $20,000 each, and to Mr. Markert of $7,500 related
to the acquisition of Power Convertibles Corporation and LH Research,
Inc. in fiscal 1997. Also, includes payments in fiscal 1995 to Messrs.
Weber, Markert, and Weglarz and Dr. Goodyear of $20,000, $20,000,
$10,000 and $10,000, respectively, related to the acquisition of the
PowerSystems Division of ITT.
(3) Represents amounts earned relating to the exercise of stock options.
(4) Represents employer matching contributions under the Company's Savings
Plan.
(5) Includes $4,560 relocation and tax gross-up reimbursement in fiscal
1996 and $65,936 relocation and tax gross-up reimbursement in fiscal
1995.
(6) Mr. Branca joined the Company on July 17, 1978 and ceased being an
executive officer upon his resignation effective January 31, 1997.
(7) Includes $240,291 in severance payments to be paid during the period
of February 1997 through March 1998.
- ---------------
The Company has entered into an employment agreement with Mr. Weber as of
April 1, 1996 providing for a base salary of $400,000 per year, increasing by
$35,000 per year in each of the next three years. The agreement has a term of
three years, and is thereafter renewable automatically for successive one-year
terms unless terminated by either party on three months advance notice. Mr.
Weber is subject to certain restrictions on competition with the Company for a
period of one year following termination of employment. If Mr. Weber's
employment is terminated without cause or as a result of nonrenewal of the
agreement, the Company is obligated to pay Mr. Weber his base salary in effect
at the date of the termination for a one-year period and continues certain
benefits for that period. If, after a Change in Control of the Company (as
defined in the employment agreement), Mr. Weber's employment is either
terminated by the Company (other than for death, disability or for cause) or not
renewed by the Company or is terminated by Mr. Weber for Good Reason (as defined
in the employment agreement), Mr. Weber will be entitled to receive a lump sum
severance payment. This payment generally will consist of two years of base
salary, plus two times the average annual bonus based on the past two fiscal
years. Under these circumstances, the Company will also continue medical and
certain other benefits for up to two years and accelerate the vesting of stock
options.
The Company has also entered into employment agreements with Drs. Goodyear
and Holden and Messrs. Markert and Weglarz. Their annual base salaries under
these agreements are subject to increase during the course of the year by the
Compensation Committee of the Board of Directors. Upon such review, effective
April 1997, the base salaries of Drs. Goodyear and Holden and Messrs. Markert
and Weglarz are $180,000, $159,000, $147,000 and $150,000, respectively. Each of
these agreements are renewable automatically for successive terms of one month
each, unless terminated by either party upon 60 days written notice. The
agreements restrict each of Drs. Goodyear and Holden and Mr. Markert from
competing with the Company for a period of one year following the termination of
his employment, and restrict Mr. Weglarz from representing persons in positions
adverse to the Company during that period. Each of the agreements
8
<PAGE>
also provide that if employment is terminated by the Company without cause or as
a result of the nonrenewal of the agreement, the Company is obligated to pay the
employee his base salary in effect at the date of termination for a one-year
period.
The Company entered into an agreement with Mr. Branca upon his leaving the
Company in January 1997 which provided that the Company would pay his then
current salary and certain benefits through March 31, 1997 and such salary and
reduced benefits through March 31, 1998 in the aggregate amount of $240,291. The
Company had previously entered into an employment agreement with Mr. Branca
containing restrictions from competing with the Company, which restrictions
remain in effect through March 31, 1998.
PENSION PLAN
The C&D Charter Power Systems, Inc. Pension Plan for Salaried Employees
(the "Pension Plan") covers nonunion salaried employees of C&D Charter Power
Systems, Inc. ("C&D") who either have participated in its predecessor company's
pension plan or have completed one year of service with C&D. The Pension Plan
was amended during 1995 to provide participation to salaried employees of
International Power Systems, Inc. effective March 30, 1994, and to Ratelco
Electronics, Inc. and CalPacific Power Systems, Inc. effective July 1, 1994. The
Pension Plan is a qualified plan under Section 401(a) of the Code. The Pension
Plan is a noncontributory defined benefit plan that provides for normal
retirement benefits beginning at age 65 but permits early retirement benefits in
certain cases, subject to a reduction of benefits for employees who retire
earlier than age 62. Under the Pension Plan, the pension payable at normal or
late retirement equals 2.1% of a participant's "average pay" (as defined below)
during the highest paid five consecutive years of the participant's last ten
years of employment multiplied by the number of years of credited service up to
15 (including service with C&D's predecessor company), plus 1.6% of such average
pay for each year in excess of 15 years up to a maximum of 15 additional years,
reduced by .5% (the "Offset") of Covered Compensation (35-year average of the
Social Security wage base ending the year prior to Social Security Normal
Retirement Age) multiplied by his years of credited service up to 30 years. The
term "average pay" as used in the Pension Plan was amended January 1, 1994 to
include salary, overtime, executive incentive compensation, sales bonuses, 30%
of sales commissions, and any tax deferred contributions to the Savings Plan. An
unreduced disability benefit is provided after ten years of eligibility service,
and a death benefit to a surviving spouse equal to approximately 50% of the
value of the participant's pension benefit at the time of death is provided
after five years of eligibility service or age 65. The Code places certain
maximum limitations on the amount of benefit which may be payable under a
qualified pension plan such as the Pension Plan. The current limitation on an
employee's annual benefit is the lesser of $120,000 and the employee's average
compensation for the three years that he was most highly compensated.
The following table illustrates the total estimated annual pension benefits
that would be provided upon retirement under the benefit formula described above
to salaried employees for the specified remuneration and years of credited
service classifications set forth below. Benefit amounts shown are computed on a
straight life basis, prior to the Offset described above.
9
<PAGE>
Years of Credited Service (1)(2)(3)
-----------------------------------
Average Pay 5 10 20 30 40
----------- --- ---- ---- ---- ---
$125,000.................. $13,125 $26,250 $49,375 $69,375 $69,375
150,000 or greater (4) ... 15,750 31,500 59,250 83,250 83,250
- ---------------
(1) It is expected that Mr. Weber, Dr. Goodyear, Dr. Holden, Mr. Markert
and Mr. Weglarz will have 10, 22, 13, 27, and 21 years of credited
service, respectively, at normal retirement. Mr. Branca has 18.5 years
of credited service.
(2) For the plan year ended December 31, 1996, the amount of remuneration,
for purposes of calculations under the Pension Plan, for Messrs.
Weber, Branca, Markert and Weglarz and Drs. Goodyear and Holden was
$150,000.
(3) The maximum annual benefit of $120,000 will be reduced for pension
benefits which begin before, and increased for pension benefits which
begin after, the participant's Social Security Normal Retirement Age.
(4) Effective January 1, 1994, the maximum compensation limit is $150,000.
The limit for prior years is $235,840. After reflecting these limits,
Mr. Weber's projected retirement benefit is $40,598 prior to the
Offset.
OPTION GRANTS IN FISCAL 1997
The following table presents certain information concerning the stock
options granted by the Company to its Chairman of the Board, President and Chief
Executive Officer, four named executive officers and one former officer pursuant
to the Company's Stock Option Plan in the year ended January 31, 1997.
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------------------------------------
Number of % of Total Grant
Securities Options Exercise Date
Underlying Granted to Price Present
Options Granted Employees in per Expiration Value
NAME (#) Fiscal Year Share Date (3) ($)(4)
- ---- ---------------- ------------ --------- ---------- -------
<S> <C> <C> <C> <C> <C>
Alfred Weber 34,000 (1) 13.4% $24.00 10/30/06 $382,160
A. Gordon Goodyear 14,000 (1) 5.5% 24.00 10/30/06 157,360
Leslie S. Holden 8,000 (1) 3.2% 24.00 10/30/06 89,920
Stephen E. Markert, Jr. 10,000 (1) 4.0% 24.00 10/30/06 112,400
Stephen J. Weglarz 12,000 (1) 4.7% 24.00 10/30/06 134,880
George C. Branca 10,000 (2) 4.0% 24.00 10/30/06 112,400
- ---------------
</TABLE>
(1) The first 33 1/3% of the shares covered by the Option shall vest on
October 30, 1997. The second 33 1/3% of the shares covered by the
Option shall vest on October 30, 1998 and the remaining 33 1/3% of the
shares covered by the Option shall vest on October 30, 1999.
(footnotes continue on following page)
10
<PAGE>
(2) These options were forfeited effective January 31, 1997 as a result of
the resignation of Mr. Branca.
(3) Each option is subject to earlier termination if the officer's
employment with the Company is terminated.
(4) The stock options were valued using the Black-Scholes pricing model.
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL 1997 YEAR-END OPTION VALUES
The following table presents certain information concerning the amount and
value of all unexercised stock options held by the Company's Chairman of the
Board, President and Chief Executive Officer, four named executive officers and
one former officer as of January 31, 1997.
<TABLE>
<CAPTION>
Value of Unexercised In-
Number of Securities The-Money Options at 1/31/97
Underlying Unexercised ----------------------------
Options at 1/31/97 Exercisable Unexercisable
Shares --------------------- ----------- -------------
Acquired
on Value
Exercise Realized Exercisable Unexercisable Shares Value (1) Shares Value (1)
Name (#) ($) (#) (#) (#) ($) (#) ($)
- ---- -------- -------- ----------- ------------ ------ --------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alfred Weber 110,000 $2,360,600 110,000 34,000 110,000 $2,790,000 34,000 $357,000
A. Gordon Goodyear - - 21,500 14,000 21,500 521,250 14,000 147,000
Leslie S. Holden - - 13,000 8,000 13,000 301,875 8,000 84,000
Stephen E. Markert, Jr. - - 4,000 10,000 4,000 90,000 10,000 105,000
Stephen J. Weglarz 1,250 28,750 3,000 12,000 3,000 67,500 12,000 126,000
George C. Branca 5,000 85,625 10,000 - 10,000 225,000 - -
- --------------------
</TABLE>
(1) Represents the excess of (i) the number of shares covered by the
option multiplied by the closing price for shares of Common Stock
($34.50 a share) on January 31, 1997 over (ii) the aggregate exercise
price of the option.
COMPENSATION OF DIRECTORS
The Company has agreed to pay non-employee directors, other than Mr. Feit,
an annual retainer of $10,000, plus $1,000 for each meeting of the Board of
Directors or any of its committees or subcommittees attended.
COMPOSITION OF COMPENSATION COMMITTEE
During fiscal 1997 the Compensation Committee consisted of Messrs. Feit,
Harral and Law. The Stock Option Subcommittee thereof consisted of Messrs.
Harral and Law.
COMPENSATION COMMITTEE REPORT
COMPENSATION PHILOSOPHY. The principal goal of the Company's compensation
program as administered by the Compensation Committee is to help the Company
attract, motivate and retain the
11
<PAGE>
executive talent required to develop and achieve the Company's strategic and
operating goals with a view to maximizing shareholder value. The key elements of
this program and the objectives of each element are as follows:
BASE SALARY
o Establish base salaries that are competitive with those payable to
executives holding comparable positions at similar-sized industrial
companies.
o Provide periodic base salary increases as appropriate, consistent with
the Company's overall operating and financial performance, with a view
to rewarding successful individual performance and keeping pace with
competitive compensation practices.
ANNUAL INCENTIVE
o Encourage both superlative individual effort and effective "team play"
by creating potential for earning annual incentive awards based in part
on Company achievement of budgeted earnings objectives and in part on
achievement of individual performance objectives measuring the
individual executive's contribution to the key performance targets of
the internal business unit within which the executive functions or for
which he is responsible.
o Set potential awards at levels that offer covered executives the
opportunity to earn incentive amounts equal to a significant percentage
(ordinarily at least 35% for the most senior executives) of their base
salaries for full achievement of all Company and individual objectives,
with the opportunity to selectively grant even larger awards to
recognize outstanding individual performance.
LONG-TERM INCENTIVE
o Facilitate the alignment of executives' interests with those of the
Company's shareholders by providing opportunities for meaningful stock
ownership.
SUMMARY OF ACTIONS TAKEN WITH RESPECT TO THE NAMED EXECUTIVE OFFICERS: At
least once a year, and at more frequent periodic intervals when deemed necessary
in individual cases, the Compensation Committee reviews the performance of the
Company's executive officers with Mr. Weber, the Chairman of the Board. The
Compensation Committee also reviews the performance of Mr. Weber at least once a
year. The actions taken by the Compensation Committee for the year ended January
31, 1997 with respect to the named executive officers are described and
discussed below.
BASE SALARY. The Company has employment agreements with its principal
executive officers that provide for annual reviews of their base salary.
Pursuant to the agreement with Mr. Weber, at the end of fiscal year 1997, his
base salary was $400,000.
ANNUAL INCENTIVE. Criteria for earning incentive awards pursuant to the
Company's Incentive Compensation Plan for the fiscal year ended January 31, 1997
were established for the principal executive officers by the Compensation
Committee early in the fiscal year, based in part on substantial achievement of
the Company's budgeted earnings per share and in part on achievement of
specified individual performance objectives.
12
<PAGE>
Based on Company and individual performance and the report of an
independent consultant who examined the Company's compensation policies, the
Compensation Committee granted a bonus award to Mr. Weber in the amount of
$171,500. In addition, during May, 1996 the Compensation Committee awarded a
special acquisition bonus to Mr. Weber in the amount of $20,000.
STOCK OPTIONS. Based on the report of an independent consultant who
examined the Company's compensation policies, the Stock Option Subcommittee of
the Compensation Committee granted Mr. Weber options to purchase 34,000 shares
of the Company's common stock in October, 1996.
Glenn M. Feit
William Harral, III
Warren A. Law
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Feit and Law served on the Compensation Committee for the entire
fiscal year ended January 31, 1997 and Mr. Harral has served on the Compensation
Committee since his election in July, 1996.
Mr. Feit is a member of the law firm of Proskauer Rose Goetz & Mendelsohn
LLP, which provides legal services to the Company, and also owns 1,000 shares of
Common Stock. Professor Law owns 1,500 shares of Common Stock and Mr. Harral
owns 1,000 shares of Common Stock.
STOCK PRICE PERFORMANCE GRAPH
The Company's Common Stock began trading on the New York Stock Exchange on
December 20, 1996. From October 27, 1995 through December 19, 1996, the Common
Stock was traded on the NASDAQ National Market. Prior to October 27, 1995 the
Common Stock was listed and principally traded on the American Stock Exchange.
The following graphs compare on a cumulative basis the yearly percentage change,
assuming quarterly dividend reinvestment over the last five fiscal years, in the
total shareholder return on the Common Stock, with:
(i) in the case of the first graph, (a) the total return on the New York
Stock Exchange Market Value Index (the "NYSE Market Value Index"), a broad
entity market index and (b) the total return on a selected peer group index (the
"SIC Code Peer Group"); and
(ii) in the case of the second graph, (a) the total return on the NASDAQ
National Market Total Return Index (the "NASDAQ Total Return Index"), a broad
entity market index and (b) the total return on a selected peer group index on
the NASDAQ Stock Market (the "NASDAQ Peer Group").
The SIC Code Peer Group is based on the standard industrial classification
codes ("SIC Codes") established by the government. The index chosen was
"Miscellaneous Electrical Equipment and Supplies" and is comprised of all
publicly traded companies having the same 3-digit SIC Code (369) as the Company.
The NASDAQ Peer Group, called "The NASDAQ Non-Financial Stocks Index," is a
subindex of the NASDAQ Total Return Index, in which the Company was included for
analytical purposes by the NASDAQ National Market. The price of each unit has
been set at $100 on January 31, 1992 for the purpose of preparation of each of
the graphs.
13
<PAGE>
Graph (i):
- ---------
Comparison of Five-Year Cumulative Total Return
-----------------------------------------------
Among Charter Power Systems, Inc., NYSE Market Value
Index and SIC Code Peer Group
Performance Results through January 31, 1997
Fiscal Year Company NYSE Peer Group
----------- ------- ---- ----------
1992 100.0 100.0 100.0
1993 60.9 106.6 84.6
1994 133.5 125.2 123.1
1995 235.3 119.4 134.7
1996 302.0 161.8 163.8
1997 394.9 198.2 196.1
Graph (ii):
- ---------
Comparison of Five-Year Cumulative Total Return
-----------------------------------------------
Among Charter Power Systems, Inc., NASDAQ
Total Return Index and NASDAQ Peer Group
Performance Results through January 31, 1997
Fiscal Year Company NASDAQ Peer Group
----------- ------- ------ ----------
1992 100.0 100.0 100.0
1993 60.9 113.1 105.8
1994 133.5 130.0 123.0
1995 235.3 124.1 114.0
1996 302.0 175.3 160.6
1997 394.9 229.9 208.7
14
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On April 30, 1996, Mr. Weber exercised an option to purchase 110,000 shares
of Common Stock at $6.04 per share, pursuant to an Option Agreement dated May
30, 1989, as amended. The options would have expired on April 30, 1996 had they
not been exercised. Under the terms of the Option Agreement, Mr. Weber paid the
exercise price with an interest-free promissory note in the original principal
amount of $664,400 that is secured by the shares received on exercise and is due
October 31, 1997. The Company loaned Mr. Weber $1,057,138 to pay the tax
withholding on the exercise of such option, evidenced by a promissory note (the
"Weber Tax Note"), bearing interest at 5.33% per annum payable annually, and due
on April 29, 1997, subject to extension until April 29, 1999 at the option of
Mr. Weber. Mr. Weber extended the note on April 29, 1997 until April 29, 1999.
The Weber Tax Note is also secured by the shares received on exercise of such
option. The Company further agreed to make payments to Mr. Weber in an amount
sufficient to reimburse him, on an after-tax basis, for all interest on the
Weber Tax Note incurred through the earlier of April 29, 1997 or the prepayment
of the Weber Tax Note.
AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION
TO CHANGE THE COMPANY'S NAME TO
C&D TECHNOLOGIES, INC.
After careful consideration, the Board of Directors has unanimously adopted
and declared advisable a proposed amendment to Article FIRST of the Company's
Restated Certificate of Incorporation to change the name of the Company to "C&D
Technologies, Inc." Such amendment will, subject to stockholder approval, take
effect as soon as practicable after the Annual Meeting upon the filing of a
Certificate of Amendment with the Secretary of State.
The Company celebrated the 90th anniversary of its business in 1996. For 80
of those 90 years, the predecessors of the Company were known as "C&D Batteries"
or "C&D Power Systems." In fact, the Company's principal operating subsidiary is
still known as "C&D Charter Power Systems, Inc." The Company is generally known
as "C&D" among its customers, having built considerable equity in this brand
name through a strong focus on engineering, customer service and product
quality. Management and the Board of Directors believe that the Company should
capitalize on its reputation and further reinforce its brand identity by
changing the names of the parent company and each of its divisions to include
the name "C&D."
In addition, the Company's current name no longer adequately conveys the
nature and scope of the Company's business. Over time, the Company's business
has broadened beyond the traditional base of power systems to include a wider
variety of products and services. Management and the Board of Directors believe
that the proposed substitution of the word "Technologies" for "Power Systems" in
the Company's name better reflects the current state and likely future direction
of the Company's business and will provide a better umbrella for its
development.
Overall, Management and the Board of Directors believe the change of the
Company's name will enhance the Company's recognition among its customers and
the members of the investment community. Therefore, the Board of Directors
recommends a vote FOR the proposal to amend the Company's Restated Certificate
of Incorporation to change the Company's name to C&D Technologies, Inc.
15
<PAGE>
RATIFICATION OF INDEPENDENT ACCOUNTANTS
Based upon the recommendation of the Audit Committee, the Board of
Directors has reappointed Coopers & Lybrand L.L.P. as the Company's independent
accountants for the fiscal year ending January 31, 1998. In the absence of
instructions to the contrary, the shares of Common Stock represented by a proxy
delivered to the Board of Directors will be voted FOR the ratification of the
appointment of Coopers & Lybrand L.L.P. A representative of Coopers & Lybrand
L.L.P. is expected to be present at the Annual Meeting of Stockholders and will
be available to respond to appropriate questions and make such statements as he
may desire.
The Board of Directors recommends a vote FOR the ratification of Coopers &
Lybrand L.L.P. as the Company's independent accountants for the fiscal year
ending January 31, 1998.
STOCKHOLDER PROPOSALS
Stockholders of the Company who intend to submit proposals at the 1998
Annual Meeting of Stockholders must submit such proposals to the Company no
later than January 23, 1998. Stockholder proposals should be submitted to
Charter Power Systems, Inc., 1400 Union Meeting Road, Blue Bell, Pennsylvania
19422 Attention: Vice President - Finance and Treasurer.
ANNUAL REPORT
The Company's Annual Report for the fiscal year ended January 31, 1997 is
being mailed together with this Proxy Statement to those persons who were
stockholders of record of the Company at the close of business on May 22, 1997.
OTHER BUSINESS
The Board of Directors does not know of any other business to be presented
to the meeting and does not intend to bring any other matters before the
meeting. However, if any other matters properly come before the meeting or any
adjournments thereof, it is intended that the persons named in the accompanying
proxy will vote thereon according to their best judgment in the interests of the
Company.
BY ORDER OF THE BOARD OF DIRECTORS
GLENN M. FEIT
Secretary
STOCKHOLDERS ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN
IT IN THE ENCLOSED, SELF-ADDRESSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES. YOUR PROMPT RESPONSE WILL BE HELPFUL, AND YOUR COOPERATION
WILL BE APPRECIATED.
16
<PAGE>
PROXY
CHARTER POWER SYSTEMS, INC.
1400 UNION MEETING ROAD, BLUE BELL, PENNSYLVANIA 19422
SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
STOCKHOLDERS ON JUNE 24, 1997.
The undersigned hereby appoints ALFRED WEBER, STEPHEN E. MARKERT, JR. and
GLENN M. FEIT, or any of them, with the power of substitution, as proxies and
hereby authorizes them to represent and to vote, as designated below, all shares
of Common Stock of Charter Power Systems, Inc. (the "Corporation") held of
record by the undersigned at the close of business on May 22, 1997 at the Annual
Meeting of Stockholders to be held on Tuesday, June 24, 1997, and any
adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
1. ELECTION OF DIRECTORS:
o FOR ALL NOMINEES LISTED BELOW (EXCEPT AS MARKED TO THE CONTRARY BELOW):
Alfred Weber Kevin P. Dowd Glenn M. Feit Alan G. Lutz
William Harrall, III Warren A. Law John A. H. Shober
o WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED ABOVE.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE.)
2. APPROVAL OF AN AMENDMENT TO THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION CHANGING THE NAME OF THE COMPANY TO "C&D TECHNOLOGIES, INC.":
o FOR o AGAINST o ABSTAIN
3. RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT
ACCOUNTANTS FOR THE FISCAL YEAR ENDING JANUARY 31, 1998:
o FOR o AGAINST o ABSTAIN
(Continued and to be SIGNED on other side)
<PAGE>
(Continued from other side)
4. In their discretion, the Proxies are authorized to vote upon any other
business that may properly come before the meeting and any adjournments
thereof.
WHEN PROPERLY EXECUTED THIS PROXY WILL BE VOTED AS DIRECTED.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
PLEASE SIGN EXACTLY AS NAME APPEARS BELOW.
Dated: ______________________________________, 1997
---------------------------------------------------
Signature
---------------------------------------------------
Signature, if held jointly
Please sign exactly as your name appears on this
Proxy. If shares are registered in more than one
name, the signatures of all such persons are
required. A corporation should sign in its full
corporate name by a duly authorized officer,
stating such officer's title. Trustees, guardians,
executors and administrators should sign in their
official capacity giving their full title as such.
A partnership should sign in the partnership name
by an authorized person, stating such person's
title and relationship to the partnership.
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY PROMPTLY,
USING THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF
MAILED IN THE UNITED STATES OF AMERICA.
<PAGE>
