C&D TECHNOLOGIES INC, 10-Q, 1999-09-13

C&D TECHNOLOGIES INC
10-Q, 1999-09-13
MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 1999

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ______________ to ___________________

Commission File No. 1-9389

C&D TECHNOLOGIES, 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.)

1400 Union Meeting Road
Blue Bell, Pennsylvania 19422
(Address of principal executive office)
(Zip Code)

(215) 619-2700
(Registrant's telephone number, including area code)

_____________________________________
(Former name, former address and former fiscal year, if changed since last
report)

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 September 3,
1999: 12,835,376

<PAGE>

C&D TECHNOLOGIES, INC.
AND SUBSIDIARIES

INDEX

PART I. FINANCIAL INFORMATION Page No.

Item 1 - Financial Statements

Consolidated Balance Sheets -
July 31, 1999 and January 31, 1999.................... 3

Consolidated Statements of Income -
Three and Six Months Ended July 31, 1999 and 1998..... 5

Consolidated Statements of Cash Flows -
Six Months Ended July 31, 1999 and 1998............... 6

Consolidated Statements of Comprehensive Income
Three and Six Months Ended July 31, 1999 and 1998..... 8

Notes to Consolidated Financial Statements............. 9

Report of Independent Accountants...................... 18

Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations...... 19

PART II. OTHER INFORMATION ................................... 25

SIGNATURES ................................................... 26

<PAGE>
PART I. FINANCIAL INFORMATION

Item 1 - Financial Statements

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

(Unaudited)
July 31, January 31,
1999 1999
---- ----
ASSETS

Current assets:
Cash and cash equivalents................. $ 4,225 $ 5,003
Accounts receivable, less allowance for
doubtful accounts of $1,089 and
$1,635, respectively................. 69,900 44,232
Inventories............................... 59,498 49,855
Deferred income taxes..................... 7,305 7,305
Other current assets...................... 4,748 2,318
------- -------
Total current assets........... 145,676 108,713
Property, plant and equipment, net.............. 89,202 62,388
Intangible and other assets, net................ 3,845 4,393
Goodwill, net................................... 86,705 10,148
------- -------
Total assets................... $325,428 $185,642
======= =======

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Current portion of long-term debt......... $ 10,240 $ 532
Accounts payable.......................... 33,888 23,997
Accrued liabilities....................... 23,237 17,714
Other current liabilities................. 3,686 2,782
------- -------
Total current liabilities...... 71,051 45,025

Deferred income taxes........................... 3,310 2,887
Long-term debt.................................. 94,715 1,750
Other liabilities............................... 16,384 12,442
------- -------
Total liabilities.............. 185,460 62,104
------- -------

The accompanying notes are an integral part of these statements.

<PAGE>

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
(Dollars in thousands)

(Unaudited)
July 31, January 31,
1999 1999
---- ----
Commitments and contingencies

Stockholders' equity:
Common stock, $.01 par value, 75,000,000
shares authorized; 13,695,654 and
13,368,719 shares issued,
respectively ........................... 137 134
Additional paid-in capital.................. 48,400 43,429
Treasury stock, at cost, 905,102 shares .... (10,819) (10,819)
Accumulated other comprehensive loss........ (396) (169)
Retained earnings........................... 102,646 90,963
------- -------
Total stockholders' equity....... 139,968 123,538
------- -------
Total liabilities and
stockholders' equity........... $325,428 $185,642
======= =======

The accompanying notes are an integral part of these statements.

<PAGE>

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)

(Unaudited) (Unaudited)
Three months ended Six months ended
July 31, July 31,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>

Net sales............................ $111,819 $ 80,073 $211,430 $158,982
Cost of sales........................ 82,126 58,334 155,198 116,555
------- ------- ------- -------
Gross profit..................... 29,693 21,739 56,232 42,427
Selling, general and
administrative expenses.......... 14,450 10,123 28,819 19,635
Research and development
expenses......................... 2,227 2,026 4,486 4,061
------- ------- ------- -------
Operating income................. 13,016 9,590 22,927 18,731
Interest expense, net................ 1,936 46 3,375 76
Other expense, net................... 72 96 208 142
------- ------- ------- -------
Income before income taxes....... 11,008 9,448 19,344 18,513
Provision for income taxes........... 3,963 3,448 6,964 6,757
------- ------- ------- -------
Net income....................... $ 7,045 $ 6,000 $ 12,380 $ 11,756
======= ======= ======= =======
Net income per common share ......... $ .55 $ .49 $ .98 $ .95
======= ======= ======= =======
Net income per common share -
assuming dilution ............... $ .54 $ .47 $ .96 $ .92
======= ======= ======= =======
Dividends per share ................. $ .0275 $ .01375 $ .055 $ .0275
======= ======= ======= =======
</TABLE>

The accompanying notes are an integral part of these statements.

<PAGE>

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Six months ended
July 31,
1999 1998
---- ----
Cash flows provided (used) by operating activities:
Net income ..................................... $ 12,380 $ 11,756
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization............. 10,398 5,946
Deferred income taxes..................... 423 121
Loss on disposal of assets................ 160 184
Changes in:
Accounts receivable................. (11,297) (431)
Inventories......................... 872 (4,260)
Other current assets................ 130 (336)
Accounts payable.................... 5,103 2,255
Accrued liabilities................. 2,980 130
Income taxes........................ (561) (3,095)
Other current liabilities........... 104 (354)
Other liabilities................... 1,968 1,049
Other, net................................ 293 269
-------- --------
Net cash provided by operating activities........... 22,953 13,234
-------- --------
Cash flows provided (used) by investing activities:
Acquisition of business, net ................... (121,465) -
Acquisition of property, plant and equipment.... (6,455) (8,578)
Proceeds from disposal of property, plant
and equipment................................ 22 31
-------- --------
Net cash used by investing activities............... (127,898) (8,547)
-------- --------
Cash flows provided (used) by financing activities:
Repayment of long-term debt..................... (5,116) (5,064)
Proceeds from new borrowings ................... 110,253 -
Financing costs of long-term debt .............. (2,749) -
Repayment of note receivable from stockholder... - 1,057
Proceeds from issuance of common stock, net..... 2,834 332
Payment of common stock dividends............... (1,040) (509)
-------- --------

The accompanying notes are an integral part of these statements.

<PAGE>

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Dollars in thousands)

(Unaudited)
Six months ended
July 31,
1999 1998
---- ----

Net cash provided (used)
by financing activities........................ 104,182 (4,184)
-------- --------
Effect of exchange rate changes on cash........... (15) (13)
-------- --------
(Decrease) increase in cash
and cash equivalents........................... (778) 490
Cash and cash equivalents at beginning
of period...................................... 5,003 1,167
-------- --------
Cash and cash equivalents at end of period........ $ 4,225 $ 1,657
======== ========

SCHEDULE OF NONCASH INVESTING AND
FINANCIAL ACTIVITIES

Acquired business
Estimated fair value of assets acquired ...... $ 53,677 $ -
Goodwill and identifiable intangible assets... 78,452 -
Cash paid, net of cash acquired .............. (121,465) -
-------- --------
Liabilities assumed .......................... $ 10,664 $ -
======== ========

The accompanying notes are an integral part of these statements.

<PAGE>

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)

(Unaudited) (Unaudited)
Three months ended Six months ended
July 31, July 31,
1999 1998 1999 1998
---- ---- ---- ----
Net income .......................... $7,045 $6,000 $12,380 $11,756

Other comprehensive (loss) income,
net of tax:
Foreign currency
translation adjustments ...... (77) (8) (227) 33
----- ----- ----- -----
Total comprehensive income........... $6,968 $5,992 $12,153 $11,789
===== ===== ====== ======

The accompanying notes are an integral part of these statements.

<PAGE>
C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(UNAUDITED)

1. INTERIM STATEMENTS

The accompanying interim consolidated financial statements of C&D
TECHNOLOGIES, INC. (together with its operating subsidiaries, the "Company")
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, 1999. The January 31, 1999 amounts were derived
from the Company's Audited Financial Statements. 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
July 31, 1999 and the consolidated statements of income for the three and six
months ended July 31, 1999 and 1998 and the consolidated statements of cash
flows for the six months ended July 31, 1999 and 1998 and the consolidated
statements of comprehensive income for the three and six months ended July 31,
1999 and 1998. However, interim results of operations necessarily involve more
estimates than annual results and may not be indicative of results for the full
fiscal year.

2. ACQUISITION

Effective March 1, 1999, the Company acquired substantially all of the
assets of the Specialty Battery Division of Johnson Controls, Inc. ("JCI"),
(subsequently re-named the Dynasty Division by the Company) including, without
limitation, certain assets of Johnson Controls Technology Company, a wholly
owned subsidiary of JCI, and 100% of the ordinary shares of Johnson Controls
Battery (U.K.) Limited, an indirect wholly owned subsidiary of JCI. In
consideration of the assets acquired, the Company paid approximately $120,000
plus additional acquisition related costs, subject to certain adjustments as set
forth in the purchase agreement. In addition, the Company assumed certain
liabilities of the seller. The Specialty Battery Division was engaged in the
business of designing, manufacturing, marketing and distributing industrial
batteries. The Company intends to continue using the assets acquired in such
business. The source of the funds for the acquisition was advances under a new
credit agreement consisting of a term loan in the amount of $100,000 and a
revolving loan not to exceed $120,000 which includes a letter of credit facility
not to exceed $30,000 and swingline loans not to exceed $10,000.

On August 2, 1999 the Company completed the acquisition of the 67
percent-owned joint venture interest of a battery business based in Shanghai,
China from JCI for $15,000 in cash and the assumption of approximately $6,100 in
debt denominated in Chinese currency (the Renminbi). The joint venture
manufactures, markets and distributes both industrial and starting, lighting and
ignition batteries. The Company intends to continue the joint venture operations
in such business. The cash portion of the acquisition was financed by the
Company's existing revolving credit facility.

<PAGE>

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share data)
(UNAUDITED)

2. ACQUISITION (continued)

The following unaudited pro forma financial information combines the
consolidated results of operations as if the acquisition of the Specialty
Battery Division (excluding the interest in the joint venture in Shanghai, China
which was completed on August 2, 1999) had occurred as of the beginning of the
periods presented. Pro forma adjustments include only the effects of events
directly attributed to a transaction that are factually supportable and expected
to have a continuing impact. The pro forma adjustments contained in the table
below include amortization of intangibles and goodwill, depreciation adjustments
due to the write up of property, plant and equipment to estimated fair market
value, amortization of deferred debt costs and interest expense on the
acquisition debt, working capital management fees which will not continue and
the related income tax effects.

Six months
ended July 31,
1999 1998
---- ----

Net sales ......................... $219,178 $204,006
Net income ........................ $ 12,315 $ 9,922
Net income per common share ....... $ 0.98 $ 0.80
Net income per common share -
assuming dilution ............ $ 0.95 $ 0.77

The pro forma financial information does not necessarily reflect the
operating results that would have occurred had the acquisition been consummated
as of the above dates, nor is such information indicative of future operating
results. In addition, the pro forma financial results contain estimates since
the acquired business did not maintain information on a period comparable with
the Company's fiscal year-end.

3. INVENTORIES

Inventories consisted of the following:
July 31, January 31,
1999 1999
---- ----

Raw materials ........................... $23,566 $20,013
Work-in-progress ........................ 13,052 10,785
Finished goods .......................... 22,880 19,057
------ ------
$59,498 $49,855
====== ======

<PAGE>

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share data)
(UNAUDITED)

4. INCOME TAXES

A reconciliation of the provision for income taxes from the statutory rate
to the effective rate is as follows:
Six months ended
July 31,
1999 1998
---- ----

U.S. statutory income tax ...................... 35.0% 35.0%
State tax, net of federal income tax benefit.... 3.2 3.0
Foreign sales corporation ...................... (0.6) (1.0)
Tax effect of foreign operations ............... (0.3) (0.6)
Research and development credit and
reduction of taxes provided in prior years... (1.6) -
Other........................................... 0.3 0.1
---- ----
36.0% 36.5%
==== ====

5. NET INCOME PER COMMON SHARE

Net income per common share for the three and six months ended July 31,
1999 and 1998 is based on the weighted average number of shares of Common Stock
outstanding. Net income per common share - assuming dilution reflects the
potential dilution that could occur if stock options were exercised.
<TABLE>
<CAPTION>

Three months ended Six months ended
July 31, July 31,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>

Net income (A)................. $7,045 $6,000 $12,380 $11,756
Weighted average shares
of common stock
outstanding (B)............. 12,724,922 12,346,404 12,609,340 12,338,273
Assumed conversion of stock
options, net of shares
assumed reacquired.......... 276,904 509,460 306,985 497,571
------- ------- ------- -------
Weighted average common
shares - assuming
dilution (C)................ 13,001,826 12,855,864 12,916,325 12,835,844
Net income per common
share (A/B)................. $0.55 $0.49 $0.98 $0.95
Net income per common
share - assuming
dilution (A/C).............. $0.54 $0.47 $0.96 $0.92
</TABLE>

<PAGE>

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share data)
(UNAUDITED)

6. CONTINGENT LIABILITIES

With regard to the following contingent liabilities there have been no
material changes since January 31, 1999.

Because the Company uses lead and other hazardous substances in its
manufacturing processes, it is subject to numerous international, federal, state
and local laws and regulations that are designed to protect the environment and
employee health and safety.

These laws and regulations include requirements relating to the handling,
storage, use and disposal of hazardous materials and solid wastes, recordkeeping
and periodic reporting to governmental entities regarding the use of hazardous
substances and disposal of hazardous wastes, monitoring and permitting of air
and water emissions and monitoring and protecting workers from exposure to
hazardous substances, including lead used in the Company's manufacturing
processes. In the opinion of the Company, the Company complies in all material
respects with these laws and regulations.

Notwithstanding such compliance, if damage to persons or the environment
has been or is caused by hazardous substances used, generated or disposed of in
the conduct of the Company's business (or that of a predecessor to the extent
the Company is not indemnified therefor), the Company may be held liable for
the damage and be required to pay the cost of investigating and remedying the
same, and the amount of any such liability could be material to the results of
operations or financial condition. However, under the terms of the purchase
agreement with Allied Corporation ("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 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 provided for their joint funding on a proportionate basis of certain
remedial investigation and feasibility study activities with respect to that
site.

<PAGE>

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share data)
(UNAUDITED)

6. 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 was completed during fiscal
1999. The Company did not incur costs in excess of the amount 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
established 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"), was completed in fiscal 1993. The Company and the PRPs
initiated remedial action at the site in 1998 and expect to complete the
majority of the action by the end of 1999. 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 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 Tonolli Site will be the
approximately $579 previously reserved, the majority of which is expected to be
paid during 1999. The Company expects to recover a portion of its monetary
obligations for the remediation of the Tonolli site through litigation against
third parties and recalcitrant PRPs.

The Company has responded to requests for information from the EPA or state
environmental agencies with regard to four other Third Party Facilities, one in
September 1991, one (the "Chicago Site") in October 1991, one (the "ILCO Site")
in October 1993, and the fourth (the "M&J Site") in March 1999. Of the four
sites, the Company has been identified as a PRP at the ILCO, Chicago, and M&J
Sites only.

On October 31, 1995 the Company received confirmation from the EPA that it
is a de minimis PRP at the ILCO Site. In May 1998, the ILCO site was resolved
with a payment of an immaterial amount which was less than the amount previously
reserved.

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

<PAGE>

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share data)
(UNAUDITED)

6. CONTINGENT LIABILITIES (continued)

determine the Company's allocable share of this cost. Based on currently
available information, however, the Company believes that its most likely
exposure with respect to the Chicago Site will be the approximately $283
previously reserved, the majority of which is expected to be paid over the next
two to five years.

Sufficient information is not yet available for the M&J site to estimate
the Company's allocable share of liability. However, based on the information
currently available, the Company's liability exposure at this site appears to be
limited and is not expected to have a material adverse effect on the Company.

Allied has accepted responsibility under the Acquisition Agreement for
potential liabilities relating to all Third Party Facilities other than the
aforementioned Sites.

The Company is also aware of the existence of potential contamination at
two of its properties which may require expenditures for further investigation
and remediation. At the Company's Huguenot, New York facility, fluoride
contamination in an inactive lagoon exceeding the state's groundwater standards,
which existed prior to the Company's acquisition of the site, has resulted in
the site being listed on the registry of inactive hazardous waste disposal sites
maintained by the New York State Department of Environmental Conservation. The
prior owner of the site ultimately may bear some, as yet undetermined, share of
the costs associated therewith.

The Company's Conyers, Georgia facility is listed on the Georgia State
Hazardous Sites Inventory. Soil at the site, which was likely contaminated from
a leaking underground acid neutralization tank and possibly storm water runoff,
has been excavated and disposed. A hydrogeologic study was undertaken to assess
the impact to groundwater. That study did not reveal any groundwater impact, and
assessment and remediation of off-site contamination has been completed and the
full remediation report was submitted to the state on February 22, 1999. The
state environmental agency may request further information and additional
investigation or remediation may be necessary before the site may be removed
from its Hazardous Sites Inventory.

The Company, together with JCI, is conducting an assessment and remediation
of contamination at the newly acquired Dynasty Division facility in Milwaukee,
Wisconsin. The majority of this project is expected to be completed by the end
of fiscal 2000. Under the purchase agreement with JCI, the Company is
responsible for (i) one-half of the cost of the assessment and remediation, with
a cap of $1,750, (ii) any environmental liabilities at the facility which are
not remediated as part of the current project and (iii) environmental
liabilities for claims made after the fifth anniversary of the closing that
arise from migration from a pre-closing condition at the facility to locations
other than the facility, but specifically excluding liabilities relating to
pre-closing offsite disposal. JCI has retained all other environmental
liabilities.

Based on currently available information, management of the Company
believes that the foregoing will not have a material adverse effect on Company's
business, financial condition or results of operations.

<PAGE>

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share data)
(UNAUDITED)

7. ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This statement establishes new
procedures for accounting for derivatives and hedging activities and supersedes
and amends a number of existing standards. In May 1999, the FASB delayed the
effective date of this statement by one year to fiscal years beginning after
June 15, 2000. The Company currently uses derivatives such as interest rate swap
agreements, currency swaps and currency forwards to effectively fix the interest
rate on a portion of the Company's floating rate debt and the exchange rate on a
portion of the Company's foreign assets, liabilities and cash flows. Under
current accounting standards, no gain or loss is recognized on changes in the
fair value of these derivatives. Under this statement, gains or losses will be
recognized based on changes in the fair value of the derivatives which generally
occur as a result of changes in interest rates and foreign currency exchange
rates. The Company is currently evaluating the financial impact of adoption of
this statement. The Company believes that the adoption of SFAS No. 133 will not
have a material effect on its financial position or results of operations.

8. RESTRUCTURING CHARGE

During the first quarter of fiscal 2000, the Company recorded a pre-tax
charge of $1,627, or $.08 per share after-tax, primarily relating to the
restructuring of the Power Electronics Division. The restructuring includes the
closing of the Company's Costa Mesa, California power supply production
facility. These production activities were transferred to the Company's existing
facilities in Tucson, Arizona and Nogales, Mexico during the second quarter of
Fiscal 2000. $1,251 of this pre-tax charge is included in selling, general and
administrative expenses with the remaining $376 included in cost of sales in the
accompanying consolidated statement of income for the six months ended July 31,
1999. The $1,627 restructuring charge relates to severance, inventory and
property, plant and equipment write downs, and other related costs. Of this
amount $376 was included as a reduction of inventory and the remainder was
included in accrued liabilities as of April 30, 1999.

The Company has ceased production at its Costa Mesa, California production
facility in the second quarter of fiscal 2000. During the second quarter of the
current year, the Company has utilized $376 of the inventory reduction and $272
of the charges included in accrued liabilities. At July 31, 1999, the Company's
restructuring accrual amounted to $979, which consisted primarily of unpaid
severance and property, plant and equipment which has not yet been disposed.

<PAGE>

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share data)
(UNAUDITED)

9. OPERATIONS BY INDUSTRY SEGMENT

The Company has identified the following four reportable business segments:

The Powercom Division manufactures and markets integrated reserve power
systems and components for the standby power market which includes
telecommunications, uninterruptible power supplies and utilities. Integrated
reserve power systems monitor and regulate electric power flow and provide
backup power in the event of a primary power loss or interruption. The Powercom
Division also produces the individual components of these systems, including
power rectifiers, system monitors, power boards, chargers and reserve batteries.

The Dynasty Division manufactures and markets industrial batteries
primarily for the uninterruptible power supply, telecommunications and broadband
cable markets.

The Motive Power Division manufactures complete systems and individual
components (including power electronics and batteries) to power, monitor, charge
and test the batteries used in electric industrial vehicles, including fork-lift
trucks, automated guided vehicles and airline ground support equipment. These
products are marketed to end users in a broad array of industries, dealers of
fork-lift trucks and other material handling vehicles, and, to a lesser extent,
original equipment manufacturers ("OEMs").

The Power Electronics Division manufactures and markets custom, standard
and modified standard electronic power supply systems including DC to DC
converters, for large OEMs of telecommunications equipment, office products,
computers and workstations. The Power Electronics Division also manufactures
cellular phone battery chargers.

<PAGE>

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share data)
(UNAUDITED)

Summarized financial information related to the Company's business segments
for the three and six months ended July 31, 1999 and 1998 is shown below:
<TABLE>
<CAPTION>
Motive Power
Powercom Dynasty Power Electronics
Division Division Division Division Consolidated
-------- -------- -------- ----------- ------------

Three months ended July 31, 1999:

Net sales ................................. $53,860 $25,818 $17,512 $14,629 $111,819
Operating income (loss).................... $9,444 $3,674 $244 $(346) $13,016

Three months ended July 31, 1998:

Net sales ................................. $43,401 $ - $18,285 $18,387 $80,073
Operating income .......................... $6,555 $ - $1,418 $1,617 $9,590

Six months ended July 31, 1999:

Net sales.................................. $103,728 $43,194 $36,489 $28,019 $211,430
Operating income (loss).................... $17,787 $6,836 $1,032 $(2,728) $22,927

Six months ended July 31, 1998:

Net sales.................................. $83,869 $ - $35,480 $39,633 $158,982
Operating income........................... $12,602 $ - $2,449 $3,680 $18,731
</TABLE>

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders and Board of Directors of
C&D TECHNOLOGIES, INC.

We have reviewed the accompanying consolidated balance sheet of C&D
TECHNOLOGIES, INC. and Subsidiaries ("the Company") as of July 31, 1999 and the
related consolidated statements of income and comprehensive income for each of
the three and six month periods ended July 31, 1999 and 1998, and the related
consolidated statements of cash flows for the six month periods ended July 31,
1999 and 1998. 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 interim financial statements for them
to be in conformity with generally accepted accounting principles.

We previously audited in accordance with generally accepted auditing standards
the consolidated balance sheet as of January 31, 1999 and the related
consolidated statements of income, stockholders' equity, cash flows and
comprehensive income for the year then ended (not presented herein), and in our
report dated March 8, 1999 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, 1999, is fairly
presented in all material respects in relation to the consolidated balance sheet
from which it has been derived.

/s/ PricewaterhouseCoopers LLP
- ------------------------------

PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania
August 26, 1999

<PAGE>
Item 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share data)

Within the following discussion, unless otherwise stated, "quarter" and
"six-month period" refer to the second quarter of fiscal 2000 and the six months
ended July 31, 1999. All comparisons are with the corresponding periods in the
previous year, unless otherwise stated.

Effective March 1, 1999, C&D TECHNOLOGIES, INC. (together with its
operating subsidiaries, "we", "our" or "C&D") purchased substantially all of the
assets of the Specialty Battery Division of Johnson Controls, Inc. ("JCI"),
(subsequently re-named the Dynasty Division by C&D), a designer, manufacturer,
marketer and distributor of industrial batteries based in Milwaukee, Wisconsin.
These assets included all of the ordinary shares of Johnson Controls Battery
(U.K.) Limited, an indirect wholly owned subsidiary of Johnson Controls (U.K.)
Limited. In addition, on August 2, 1999 we completed the acquisition of the 67
percent-owned joint venture interest of a battery business based in Shanghai,
China from JCI. The joint venture manufactures, markets and distributes
industrial and starting, lighting and ignition batteries, the latter products
for the Chinese market only.

Net sales increased $31,746 or 40 percent for the quarter and $52,448 or 33
percent for the six-month period. The increase in sales during the quarter was
primarily the result of $25,818 of sales recorded by the recently acquired
Dynasty Division, coupled with higher Powercom Divisional sales which increased
$10,459 or 24 percent, mainly due to higher sales to the telecommunications
markets. These sales increases were partially offset by a $3,758 or 20 percent
decline in Power Electronics Divisional sales during the quarter as a result of
lower sales of cellular phone battery chargers and custom power supplies,
partially offset by higher DC to DC converter sales. In addition, sales by the
Motive Power Division decreased $773 or four percent during the quarter,
principally as a result of lower volumes. The increase in sales for the
six-month period was primarily the result of $43,194 of sales recorded by the
recently acquired Dynasty Division, coupled with higher sales by the Powercom
and Motive Power Divisions, partially offset by lower Power Electronics
Divisional sales. Sales by the Powercom Division increased $19,859 or 24 percent
during the six-month period primarily due to higher sales to the
telecommunications markets, partially offset by weaker international sales.
Motive Power Divisional sales for the six-month period increased $1,009 or three
percent. The decrease in Power Electronics Divisional sales of $11,614 or 29
percent during the six-month period was due to lower sales of cellular phone
battery chargers and custom power supplies, partially offset by higher DC to DC
converter sales.

Gross profit for the quarter increased $7,954 or 37 percent to $29,693 from
$21,739 in the second quarter of fiscal 1999, resulting in a slight decline in
gross margin from 27.1 percent in the second quarter of fiscal 1999 to 26.6
percent for the second quarter of the current year. The increase in gross profit
during the quarter was primarily due to the gross profit generated by the
Dynasty Division as well as increased gross profits related to the higher sales
volumes provided by the Powercom Division. These increases in gross profits were
partially offset by lower gross profits from the Power Electronics Division,
mainly as a result of the lower sales volumes during the quarter, and lower
gross profits from the Motive Power Division as a result of lower sales and
plant inefficiencies. Gross profit for the six-month period increased $13,805 or

<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
(Dollars in thousands, except per share data)

33 percent to $56,232 from $42,427 in the first half of the prior year,
resulting in a slight decline in gross margin from 26.7 percent in the first six
months of fiscal 1999 to 26.6 percent for the comparable period of the current
year. The increase in gross profit during the six-month period was primarily due
to the gross profit generated by the Dynasty Division as well as increased gross
profits related to the higher sales volumes provided by the Powercom Division.
Gross profit of the Motive Power Division was up slightly for the six-month
period. These increases in gross profits were partially offset by lower gross
profits from the Power Electronics Division, mainly as a result of the lower
sales volumes during the six-month period. During the first quarter of fiscal
2000, we incurred a $1,627 pre-tax charge (or eight cents per share after-tax),
primarily related to the restructuring of the Power Electronics Division. The
restructuring charge included $376 related to inventory obsolescence that was
charged to cost of sales. The balance of the restructuring charge, or $1,251,
was charged to selling, general and administrative expenses.

Selling, general and administrative expenses for the quarter increased
$4,327 or 43 percent over the comparable period of the prior year. This increase
during the quarter was primarily due to selling, general and administrative
expenses (including amortization of goodwill) related to the recent acquisition
of the Dynasty Division, higher general and administrative costs associated with
the resolution of legal disputes, and higher selling expenses related to the
Powercom and Motive Power Divisions. These increases were partially offset by
lower selling expenses by the Power Electronics Division during the quarter. The
increase in Motive Power Divisional selling expenses during the quarter includes
higher warranty costs and higher costs associated with sales branches added in
the last half of fiscal 1999 which have not yet met anticipated sales levels.
Selling, general and administrative expenses for the six-month period increased
$9,184 or 47 percent over the same period of the prior year. This increase
during the six-month period was primarily due to selling, general and
administrative expenses (including amortization of goodwill) related to the
recent acquisition of the Dynasty Division, the aforementioned $1,251
restructuring charge, higher general and administrative costs associated with
the resolution of legal disputes, and higher selling expenses related to the
Powercom and Motive Power Divisions. These increases were partially offset by
lower selling expenses by the Power Electronics Division during the six-month
period. The increase in Motive Power Divisional selling expenses during the
six-month period includes higher warranty costs and higher costs associated with
sales branches added in the last half of fiscal 1999 which have not yet met
anticipated sales levels.

Research and development expenses increased $201 in the quarter and $425
for the six-month period, primarily as a result of research and development
costs incurred by the recently acquired Dynasty Division, higher research and
development expenses related to the Powercom and Motive Power Divisions,
partially offset by lower research and development expense incurred by the Power
Electronics Division.

Operating income for the quarter increased $3,426 or 36 percent to $13,016,
and for the six-month period increased $4,196 or 22 percent (after the
aforementioned $1,627 restructuring reserve) to $22,927, primarily as a result
of operating income generated by the recently acquired Dynasty Division, coupled
with higher Powercom Divisional operating income. These increases in operating
income for the quarter and six-month period were partially offset by lower
Motive Power Divisional operating income and operating losses incurred by the
Power Electronics Division during the current year versus the comparable periods
of the prior year.

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
(Dollars in thousands, except per share data)

Interest expense, net, increased $1,890 for the quarter and $3,299 for the
six-month period primarily due to higher debt balances outstanding used to
finance the recent acquisition of the Dynasty Division.

Income tax expense for the quarter and six-month period increased $515 and
$207, respectively, primarily as a result of higher income before income taxes.

As a result of the above, net income increased $1,045 for the quarter to
$7,045 or 55 cents per common share - basic and 54 cents per common share -
assuming dilution. For the six-month period, net income increased $624 to
$12,380 or 98 cents per common share - basic and 96 cents per common share -
assuming dilution.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities increased $9,719 or 73 percent to
$22,953 for the six-month period ended July 31, 1999 compared to $13,234 for the
same period of the prior year. The increase in net cash provided by operating
activities during the six-month period was primarily due to: (a) an increase in
depreciation and amortization (principally associated with the March 1, 1999
acquisition of the Dynasty Division); (b) a decrease in inventory during the
first half of the current year versus an increase in the comparable period of
the prior year; (c) a larger increase in accounts payable (due to timing of
payments, including the timing of payments to JCI related to services performed
under a transition services agreement associated with the aforementioned
acquisition of the Dynasty Division); (d) a larger increase in accrued
liabilities (due to timing of payments, including increased accruals related to
the aforementioned restructuring reserve and accrued interest associated with
the higher debt levels); and (e) timing of income tax payments during the first
six months of fiscal 2000 compared to the same period of the prior year. These
changes, resulting in higher net cash provided by operating activities, were
partially offset by a larger increase in accounts receivable during the first
half of fiscal 2000 versus the comparable period of the prior year primarily due
to higher sales volumes in the current six-month period coupled with slower
collections.

Net cash used by investing activities totaling $127,898 for the six-month
period ended July 31, 1999 includes our purchase of the Specialty Battery
Division of JCI (subsequently re-named the Dynasty Division by the C&D).

Net cash provided by financing activities was $104,182 for the first six
months of fiscal 2000 versus net cash used of $4,184 in the comparable period of
the prior year. The proceeds from new borrowings in the current year's first six
months were used primarily for the funding of the acquisition of the Dynasty
Division.

On March 1, 1999 we entered into a credit agreement in which the lenders
named therein, and Nationsbank, N.A. as administrative agent, provided a
$220,000 credit facility consisting of a term loan in the amount of $100,000 and
a revolving loan not to exceed $120,000. The funds borrowed under this credit
agreement were used to finance the acquisition of the Specialty Battery Division
of JCI, to refinance existing debt and to finance working capital and certain
other expenditures. In addition, on August 2, 1999 we completed the acquisition

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
(Dollars in thousands, except per share data)

of the 67 percent-owned joint venture interest of a battery business based in
Shanghai, China from JCI for $15,000 in cash and the assumption of approximately
$6,100 in debt denominated in Chinese currency (the Renminbi). The cash portion
of the acquisition was financed by our existing revolving credit facility. Our
availability under the current loan agreement is expected to be sufficient to
meet our ongoing cash needs for working capital requirements, debt service,
capital expenditures and possible strategic acquisitions. Capital expenditures
during the first six months of fiscal 2000 were incurred primarily to fund
capacity expansion, new product development, a continuing series of cost
reduction programs, normal replacement capital, and regulatory compliance.
Fiscal 2000 capital expenditures are expected to be approximately $16,000 for
similar purposes.

READINESS FOR YEAR 2000

We are taking action to ensure that our operations will not be adversely
affected by potential Year 2000 computer failures and have developed a Year 2000
Readiness Plan. Our Chief Financial Officer is responsible for overseeing the
execution of the plan and reports quarterly to our Board of Directors on the
status of the Year 2000 Readiness Plan. The plan addresses the following four
areas:

o information technology systems (consisting of computer hardware and
software related to our business systems as well as our engineering
and test equipment);
o non-information technology systems (including embedded technology such
as microcontrollers, which are typically found in such things as
telephone systems, security systems, fax machines, etc.);
o products sold to customers; and
o third party issues (including significant suppliers and customers).

Our Year 2000 Readiness Plan generally includes the following phases for
each of the four areas noted above:

o identification and risk assessment;
o development and implementation of a remediation plan;
o acceptance testing; and
o contingency planning for high risk critical areas.

We have identified certain deficiencies related to our information
technology systems and have addressed them through upgrades or other
remediation. We have two main computer systems that are utilized to run our
business systems. Year 2000 remediation work on our business systems that run on
our computers located in Blue Bell, Pennsylvania and Tucson, Arizona have been
completed and these business systems are now Year 2000 compliant.

In terms of non-information technology systems, we have identified those
items which may require remediation or replacement. We are in the process of
addressing those items and expect to complete remediation or replacement and
testing by the end of the third quarter of fiscal 2000.

We have completed our assessment of Year 2000 compliance with respect to
our battery and electronics products that are currently being sold to customers
and have concluded that all significant products are compliant.

With respect to third parties, we have identified and have been contacting
our significant suppliers and have begun to contact our major customers to
determine the extent to which we may be vulnerable to such third parties'

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
(Dollars in thousands except per share data)

failure to address their own Year 2000 issues. This process includes the
solicitation of written responses to questionnaires and/or meetings with certain
of such third parties. As a result, our assessment will be substantially
dependent on information provided by third parties. We have completed this
initial notification and solicitation process with our significant suppliers and
are now continuing the phase of re-contacting those companies who have not
responded. We believe this process will continue through the third quarter of
fiscal 2000.

Based upon our current estimates, total costs associated with our Year 2000
compliance are expected to be immaterial. The majority of these costs were
incurred in fiscal 1999 and include third party consultants and programmers,
remediation of existing software, and replacement or remediation of embedded
chips. Such costs do not include internal management time, which is not expected
to be material to our results of operations or financial condition.

We believe that our most significant risk with respect to Year 2000 issues
relates to the performance and readiness status of third parties. As with all
manufacturing companies, a reasonable worst case Year 2000 scenario would be the
result of failures of third parties (including without limitation, governmental
entities, utilities and entities with which we have no direct involvement) that
negatively impact our raw material supply chain or ability to provide products
to customers or the ability of customers to purchase products, or events
affecting regional, national or global economies generally. The impact of these
failures cannot be estimated at this time; however, we are considering
contingency plans to limit, to the extent possible, the financial impact of
these failures on our results of operations. Any such plans would necessarily be
limited to matters which we can reasonably control.

We have engaged outside third party auditors to review our Year 2000
compliance in all major locations. Three of these facility audits have been
completed and others are scheduled. This audit process will continue into the
fourth quarter of fiscal 2000.

Our Year 2000 efforts are ongoing and our overall plan, as well as the
consideration of contingency plans, will continue to evolve as new information
becomes available. While we anticipate continuity of our business activities,
that continuity will be dependent upon our ability, and the ability of third
parties on whom we rely, directly or indirectly, to be Year 2000 compliant.

ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

23
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
(Dollars in thousands except per share data)

of our foreign assets, liabilities and cash flows. Under current accounting
standards, no gain or loss is recognized on changes in the fair value of these
derivatives. Under this statement, gains or losses will be recognized based on
changes in the fair value of the derivatives which generally occur as a result
of changes in interest rates and foreign currency exchange rates. We are
currently evaluating the financial impact of adoption of this statement. We
believe that the adoption of SFAS No. 133 will not have a material effect on our
financial position or results of operations.

FORWARD LOOKING STATEMENTS

Certain information contained in this Quarterly Report on Form 10-Q,
including, without limitation, information appearing under Item 2, "Management's
Discussion and Analysis of Financial Condition and Results of Operations," are
forward-looking statements (within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Factors
that appear with the forward-looking statements, or in the Company's other
Securities and Exchange Commission filings, could affect our actual results and
could cause our actual results to differ materially from those expressed in any
forward-looking statements made by C&D in this Quarterly Report on Form 10-Q.

<PAGE>
PART II. OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders

(a) The Company held its annual meeting of stockholders on June 29, 1999.

(b) See Item 4(c) below.

(c) William Harrall, III was elected as a director by a vote of 10,903,261
for and 143,259 withheld. Wade H. Roberts, Jr. was elected as a
director by a vote of 10,903,261 for and 143,259 withheld. Kevin P.
Dowd was elected as a director by a vote of 10,903,261 for and 143,259
withheld. Glenn M. Feit was elected as a director by a vote of
10,850,043 for and 196,477 withheld. Pamela S. Lewis was elected as a
director by a vote of 10,901,545 for and 144,975 withheld. George
MacKenzie was elected as a director by a vote of 10,781,003 for and
265,517 withheld. John A. H. Shober was elected as a director by a
vote of 10,873,107 for and 173,413 withheld.

The appointment of PricewaterhouseCoopers LLP as the Company's
independent accountants for the year ending January 31, 2000 was
ratified by a vote of 10,903,145 for and 6,328 against, with 137,047
abstentions.

Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits

10.1 Employment Agreement dated June 28, 1999 between Linda R. Hansen
and the Company (filed herewith).

10.2 Sixth Amendment to C&D TECHNOLOGIES, INC. Pension Plan for
Salaried Employees dated April 27, 1999 (filed herewith).

10.3 First Amendment to C&D TECHNOLOGIES, INC. 1996 Stock Option Plan
(formerly known as the Charter Power Systems, Inc. 1996 Stock
Option Plan) dated April 27, 1999 (filed herewith).

10.4 First Amendment to C&D TECHNOLOGIES, INC. 1998 Stock Option Plan
dated June 29, 1999 (filed herewith).

15. Letter from PricewaterhouseCoopers LLP, independent accountants
for C&D, regarding unaudited interim financial information (filed
herewith).

27. Financial Data Schedule (filed herewith).

(b) Reports on Form 8-K:

None.

<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.

C&D TECHNOLOGIES, INC.

September 13, 1999 BY: /s/ Wade H. Roberts, Jr.
---------------------------------
Wade H. Roberts, Jr.
President, Chief Executive
Officer and Director
(Principal Executive Officer)

September 13, 1999 BY: /s/ Stephen E. Markert, Jr.
----------------------------------
Stephen E. Markert, Jr.
Vice President Finance
(Principal Financial and
Accounting Officer)

<PAGE>

EXHIBIT INDEX

10.1 Employment Agreement dated June 28, 1999 between Linda R. Hansen
and the Company.

10.2 Sixth Amendment to C&D TECHNOLOGIES, INC. Pension Plan for
Salaried Employees dated April 27, 1999.

10.3 First Amendment to C&D TECHNOLOGIES, INC. 1996 Stock Option Plan
(formerly known as the Charter Power Systems, Inc. 1996 Stock
Option Plan) dated April 27, 1999.

10.4 First Amendment to C&D TECHNOLOGIES, INC. 1998 Stock Option Plan
dated June 29, 1999.

15. Letter from PricewaterhouseCoopers LLP, independent accountants
for C&D, regarding unaudited interim financial information.

27. Financial Data Schedule.

Exhibit 10.1

C&D TECHNOLOGIES, INC.
1400 Union Meeting Road
Blue Bell, PA 19422

June 28, 1999

Ms. Linda R. Hansen
1220 Bridgetown Pike,
Langhorne, PA 19053

Dear Ms. Hansen:

C&D TECHNOLOGIES, 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 June 28, 1999 and
terminating on June 27, 2000.

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 $175,000 per annum (such
salary, as it is from time to time adjusted, is herein
referred to as the "Base Salary") plus bonus at a rate of 35%
of Base Salary (hereinafter "Bonus"). Such Base Salary shall
be payable in periodic installations twice monthly in
accordance with the Company's payroll practices for salaried
employees and such Bonus shall be paid at such time(s) as may
be consistent with the Company's customary practice therefor.
The Compensation Committee of the Board of Directors shall
review such Base Salary prior to April 30, 2000 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 $192,500
or the target bonus rate below 35% of Base Salary.

<PAGE>

Page 2

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, or (iii) by you as the result of the
breach of this Agreement or inability of the Company to
perform its obligation under this Agreement, then for a one
year period after the effective date of such termination the
Company shall pay you your Base Salary in effect at the time
of such termination plus Bonus. In addition, the Company shall
pay you for any accrued vacation in a lump sum within ten (10)
days of termination of employment.

3. DUTIES.

3.1 During the term of your employment hereunder, including any
renewal thereof, you agree to serve as the Vice President,
General Counsel, 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, "PROVIDED, that such duties
and responsibilities do not constitute a diminution in job
title, position, reporting relationship, or functional
responsibilities." 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, your duties will be performed from the
Company's headquarters in Blue Bell, Pennsylvania or at
another location chosen by the Company that is no more than
fifteen (15) additional miles from your place of residence at
that time.

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 without the prior approval of
the President, which approval shall not be unreasonably
withheld.

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.

<PAGE>

Page 3

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 exami-
nation.

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

<PAGE>

Page 4

(i) shall prevent you from investing without limit in the
securities of any company listed on a national securities
exchange, 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 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 information or Company data. 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 data, customer lists,
supplier lists, product and tooling specifications, trade
secrets, product composition and formulae, tools and dies,
drawings and schematics, manufacturing processes, know-how,
computer and any other processed or collated data, 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>

Page 5

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 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 sales data, patent
applications, drawings and other documents, and all Company
credit cards and cars.

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. In the event that you incur legal
expenses or court and arbitration expenses in connection with seeking
to obtain or enforce any right or benefit provided for in this
Agreement or the Offer, and a court of competent jurisdiction or
arbitration panel finds in your favor in whole or in part as to such
claims as the result of litigation, arbitration or settlement, the
Company shall reimburse you for such costs and expenses within thirty
(30) days of submission of written documentation thereof.

<PAGE>

Page 6

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 terms of this Agreement, the Company shall (i) continue to
make payments to your estate of your Base Salary and Bonus 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 plus Bonus 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 of 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.

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 by you.

(ii) Your continuing refusal or inability (other than
pursuant to Sections 10.1 or 10.2) to perform any
material duties assigned in accordance with the terms
of this Agreement within thirty days after the
President has given you notice thereof in reasonable
detail, if such breach has not been cured by you
during such period 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.

<PAGE>

Page 7

(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.

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 in good
faith 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.

<PAGE>

Page 8

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 and the
Offer Letter from the company to you dated June 28, 1999 (hereafter the
"Offer") 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.
Neither Agreement nor the Offer may be modified or amended except by an
instrument in writing signed by the party against which enforcement
thereof may be sought.

13. ENTIRE AGREEMENT. Each party to this Agreement, acknowledges that
except for the Offer 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 except for the Offer.

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

<PAGE>

Page 9

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.

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 Agreement and the Offer shall constitute the employment agreement
between you and the Company effective and for the term as stated herein.

C&D TECHNOLOGIES, INC.

By:/s/ Wade H. Roberts, Jr.
------------------------
Wade H. Roberts, Jr.
President and Chief Executive Officer

Agreed as of the date first above written:

/s/ Linda R. Hansen
- -------------------

<PAGE>

C&D TECHNOLOGIES, INC.
Power Solutions
- ------------------------------------------------------------------------------
1400 Union Meeting Road
P.O. Box 3053
Blue Bell, PA 19422-0858
WADE H. ROBERTS, JR. Telephone (215)619-7850
President Fax (215) 619-7841
Chief Executive Officer E-mail: [email protected]

June 28, 1999

Ms. Linda R. Hansen
1220 Bridgetown Pike,
Langhorne, PA 19053

Re: Employment Offer

Dear Linda:

We are pleased to offer you the position of Vice President, General Counsel and
Secretary of C&D Technologies, Inc. reporting directly to me. The following are
the specific terms of our offer:

Effective Date
- --------------

Your employment is expected to commence on Monday, June 28, 1999.

Compensation Package
- --------------------

Your compensation package will include the following components:

o You will receive a one-time hiring bonus of $50,000 to be paid in two
installments as follows:
1) $25,000 on or before August 15, 1999; and
2) $25,000 on or before December 31, 1999.

This one-time hiring bonus will be subject to all required tax
withholdings.

o Your initial base salary will be $7,291.67 payable semi-monthly (equivalent
to $175,000 on an annualized basis).

PLEASE NOTE: you will be eligible to receive an increase to your base
salary effective April 1, 2000. The increase to your annual base salary on
that date will be no less than $17,500 (10%), resulting in an annual base
salary of no less than $192,500.

o You are eligible to participate in our Company's Management Incentive Bonus
Program targeted to pay an amount equal to 35% of you annual base salary
for the attainment of 100% of corporate and agreed upon individual
objectives established in consultation with you and our Board of Directors.

PLEASE NOTE: For your performance through the end of our current fiscal
year (ending January 31, 2000), the Management Incentive Bonus will be
calculated on a prorated basis of 7/12ths, and will be payable prior to
April 15, 2000. As a show of our good faith, we guarantee that your
management incentive bonus for the current fiscal year will be at least
$35,729 ($175,000 x 35% x 7/12).

<PAGE>

Linda Hansen
Offer Letter
page 2
June 28, 1999

o You are eligible to participate in our Stock Option Award Program. We will
recommend to our Board of Directors at their meeting scheduled for June 29,
1999, that you be granted an initial Stock Option Award for 2,500 shares.

In addition, I will recommend to our Board of directors at their meeting
scheduled for September 28, 1999, that you be granted a Stock Option Award
for 7,500 shares.

PLEASE NOTE: All awards of stock options are subject to the review and
approval of the Company's Board of Directors.

o After three (3) months of employment, you will be eligible to participate
in the Company's Supplemental Executive Retirement Program (SERP).

PLEASE NOTE: Participation in the SERP is subject to the review and
approval of the Company's Board of Directors.

o You are eligible to fully participate in the Company's employee benefit
programs.

o You are eligible for four weeks of vacation each year.

Employment Agreement
- --------------------
Accompanying this letter is an EMPLOYMENT AGREEMENT which delineates the key
terms and conditions governing your relationship as an executive of our Company
during and after your employment by C&D Technologies Inc.

Relocation Assistance
- ---------------------
If you decide to relocate closer to our headquarters in Blue Bell, prior to July
1, 2000, you will be eligible for benefits pursuant to the Company's Domestic
Relocation Assistance Program (Level 2). Descriptive information about this
program accompanies this letter.

Contingencies
- -------------
This offer of employment is contingent upon the following:

o Successful completion of a Company-paid medical examination, which will
include screening for the use of drugs.

o Your completion of the standard Employment Eligibility Verification
(form I-9) and review of supporting documentation you supply.

We are looking forward to having you on our team. We are confident of your
ability to make a difference and feel certain we can have fun working with you.

<PAGE>

Linda Hansen
Offer Letter
Page 3
June 28, 1999

Please indicate your acceptance of this Offer of Employment by signing where
indicated below and returning this letter and an executed copy of the EMPLOYMENT
AGREEMENT to me. If you have any questions about the contents of this offer or
the accompanying materials, please do not hesitate to contact Mark Sappir or me
directly.

Anticipate your speedy acceptance of this offer and plan to introduce you to the
Board of Directors at our Annual Meeting/Board Meeting on Tuesday, June 29,
1999. The Annual Meeting takes place at 10:00 a.m. at the Union League, 140
South Broad Street, Philadelphia, Pennsylvania.

Sincerely,

/s/ Wade H. Roberts, Jr.
--------------------
Wade H. Roberts, Jr.

Enclosures

-----------------------------------------------------

I have reviewed, understand and accept the terms of this Offer of Employment
with C&D Technologies, Inc.

Signed /s/ Linda R. Hansen Date 6/28/99
--------------- -----------------
Linda R. Hansen

Exhibit 10.2

Resolutions Adopted at a
Meeting of the Board of Directors of
C&D Technologies, Inc.
April 27, 1999
--------------

WHEREAS, the Corporation sponsors the C&D Technologies, Inc. Pension Plan
for Salaried Employees (the "Plan");

WHEREAS, the Corporation desires to extend the Plan to salaried U.S.
employees of the Dynasty Division (formerly the Specialty Battery Division of
Johnson Controls, Inc.) effective March 1, 1999; and

WHEREAS, the Corporation also desires to establish a defined benefit plan
for U.S. employees represented by a collective bargaining agent at the Dynasty
Division which substantially reflects the plan in effect for such employees at
the Specialty Battery Division of Johnson Controls, Inc., effective on and after
March 1, 1999;

NOW THEREFORE BE IT RESOLVED, that effective March 1, 1999, all salaried
U.S. employees of the Dynasty Division shall be eligible employees under the
Plan effective March 1, 1999 and years of service for Johnson Controls, Inc.
shall be recognized as if such service was performed for the Corporation but
only for purposes of eligibility to participate and for vesting and such years
of service shall be disregarded for every other purpose under the Plan including
but not limited to benefit accrual service.

RESOLVED, that a plan shall be established covering U.S. employees of the
Dynasty Division represented by a collective bargaining agent which
substantially reflects the defined benefit plan in effect for such employees at
the Specialty Battery Division of Johnson Controls, Inc. and such plan shall be
effective March 1, 1999 recognizing service under the Johnson Controls, Inc.
plan and service after March 1, 1999 but offsetting the benefit earned under the
Johnson Controls, Inc. plan.

RESOLVED, that the proper officers of the Corporation be, and each of them
hereby is, authorized and directed to take all such further action and to
execute all such further instruments and documents in the name of and on behalf
of the Corporation, under its corporate seal or otherwise, and to pay all such
costs and expenses as shall be necessary or appropriate in order to carry out
the intent and accomplish the purposes of the foregoing resolutions.

Exhibit 10.3

Resolutions Adopted at a
Meeting of the Board of directors of
C&D Technologies, Inc.
April 27, 1999
--------------

RESOLVED, that the C&D TECHNOLOGIES, INC. 1996 Stock Option Plan is hereby
amended to provide that the following alternate Sections 7(g)(ii) and 7(g)(iii)
shall apply to Options under that Plan granted after the date of this resolution
but not to Options granted prior to such date (to which Options the original
Sections 7(g)(ii) and 7(g)(iii) shall apply):

7(g)(ii) In the event of an Optionee's termination of
employment with the Company or any of its subsidiaries under
circumstances other than by the Company or any of its
subsidiaries for cause given by the Optionee or voluntarily
on the part of the Optionee, or for reasons other than
retirement, death or disability, such Options shall
terminate three months after the date of such termination of
employment or on their respective Expiration Dates,
whichever shall first occur; PROVIDE, HOWEVER, that if the
Optionee dies within such three month period, the time
period set forth in Section 7(g)(iii) shall apply.

7(g)(iii) In the event of an Optionee's death or disability
while employed by the Company or any of its subsidiaries, or
in the event of an Optionee's retirement, such Options shall
terminate on the first anniversary of the Optionee's death,
disability or retirement, as the case may be, or on their
respective Expiration Dates, whichever shall first occur.

Exhibit 10.4

Resolution Adopted at a
Meeting of the Board of Directors of
C&D Technologies, Inc.
June 29, 1999
-------------

RESOLVED, that Section 7.1 of the Corporation's 1998 Stock Option Plan be,
and it hereby is, amended to read as follows:

"(a) On the date of the Annual Meeting of Stockholders of
the Company held in 1998, each Non-Employee director shall
be automatically granted shares of Common Stock having a
Fair Market Value on such date of $12,000. Alternatively, at
the election of a Non-Employee Director made in writing to
the Chief Financial Officer of the Company within 30 days
prior to the date of grant, the Non-Employee Director may
choose to receive a combination of (i) a number of shares of
Common Stock having a Fair Market Value equal to the excess
of $12,000 over the amount of cash referred to in clause
(ii) of this sentence, and (ii) an amount of cash sufficient
for such Non-Employee Director to pay the federal, state and
local income taxes he or she may reasonably be expected to
owe as a result of the receipt of such shares of Common
Stock (as determined by the Committee).

"(b) (i) Subject to clause (ii) below, on the date of the
Annual Meeting of Stockholders of the Company held in 1999,
and in each year thereafter in which shares of Common Stock
remain available for grant hereunder, each Non-Employee
Director shall be automatically granted shares of Common
Stock having a Fair Market Value on such date of $18,000;
except that a Non-Employee Director serving as Chairman of
the Board shall automatically be granted shares of Common
Stock having a Fair Market Value on such date of $30,000.
The Board of Directors may also grant, at any time and from
time to time, to a Non-Employee Director serving as Chairman
of the Board additional shares of Common Stock having a Fair
Market Value on the date of grant determined by the Board of
Directors. Any such grant shall be made by the Board of
Directors based on the time and effort spent by the Chairman
of the Board in performing his duties and such other factors
as the Board may consider relevant.

<PAGE>

"(ii) Notwithstanding clause (i) above, at the election of a
Non-Employee Director made in writing to the Chief Financial
Officer of the Company prior to the grant, the Non-Employee
Director may choose to receive a combination of (x) a number
of shares of Common Stock having a Fair Market Value equal
to 2/3 of the Fair Market Value determined pursuant to
clause (i), and (y) an amount of cash equal to 1/3 of the
Fair Market Value determined pursuant to clause (i).

"(c) Any Non-Employee Director who is first elected or
appointed to the Board after the grant of shares of Common
Stock hereunder in any year, shall upon such election or
appointment be automatically granted a pro rata portion of
the shares of Common Stock or cash referred to in the
preceding sentence, based upon the portion of the period
between Annual Meetings of Stockholders that such
Non-Employee Director is expected to serve in such capacity.

"(d) The Committee hereby approves each election to receive
cash or stock hereunder."

EXHIBIT 15

September 10, 1999

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549

Commissioners:

We are aware that our report dated August 26, 1999 on our review of interim
financial information of C&D TECHNOLOGIES, INC. and Subsidiaries (the "Company")
as of and for the period ended July 31, 1999 and included in the Company's
quarterly report on Form 10-Q for the quarter then ended is incorporated by
reference in the Company's Forms S-8 (Registration No. 33-31978, No. 33-71390,
No. 33-86672, No. 333-17979, No. 333-38891, and No. 333-59177) and Form S-3
(Registration No. 333-38893).

Very truly yours,

/s/ PricewaterhouseCoopers LLP
--------------------------

PricewaterhouseCoopers LLP

<ARTICLE> 5
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CONSOLIDATED BALANCE SHEET AS OF 7/31/99 AND STATEMENT OF INCOME FOR THE PERIOD
ENDED 7/31/99 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS
</LEGEND>
<MULTIPLIER> 1000

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