JEFFREY A. GRAVES AMENDED AND RESTATED EMPLOYMENT AGREEMENT DATED DECEMBER 20,

 

                               December 20, 2007

 

Jeffrey A. Graves

834 Paradise Drive

Ambler, PA  19002

 

Dear Jeff:

 

            C&D  Technologies,  Inc., a Delaware  corporation  (the  "Company"),

wishes to  continue  to employ  you in an  executive  capacity  and the  Company

desires to encourage such employment by providing certain protections for you by

entering  into  this  Agreement  with you,  in return  for which you agree to be

employed by the Company on the terms set forth  herein,  to refrain from certain

competitive  activity and to provide the Company with  certain  assurances  upon

your departure.  In consideration of same, the Company agrees to employ you, and

you agree to accept such employment, under the following terms and conditions:

 

            1.    Term of Employment. Your employment under this Agreement shall

continue in effect  until either party shall give to the other party at least 30

days prior written  notice (or such other notice  period as may be  specifically

provided  for in  this  Agreement)  of the  termination  of  this  Agreement  (a

"Termination  Notice"),  or until it is terminated in accordance with Section 8.

If a Termination Notice is given by either party the Company shall,  without any

liability to you, have the right,  exercisable  at any time after such notice is

sent to elect any other  person to the  office or  offices in which you are then

serving and to remove you from such office or offices.  The period  during which

you are employed under this Agreement is hereafter referred to as the "Term."

 

            2.    Compensation and Benefits.

 

            (a)   During the Term, you shall receive a salary for performance of

your  obligations  under this Agreement at an initial rate of $525,000 per year,

payable in such manner as is consistent with the Company's payroll practices for

executives  and subject to increase (but not decrease) by the Board of Directors

in its sole discretion. Such salary, as it may be adjusted from time to time, is

hereinafter referred to as the "Base Salary."

 

            (b)   During the Term, you shall have the benefit of and be entitled

to  participate  in such employee  benefit plans and programs,  including  life,

disability and medical insurance,  savings,  retirement and other similar plans,

as the Company now has or  hereafter  may  establish  from time to time,  and in

which  you are  entitled  to  participate  pursuant  to the terms  thereof.  The

foregoing,  however,  shall not be construed to require the Company to establish

any such plans or to prevent the Company from modifying or terminating  any such

plans, and no such action or failure thereof shall affect this Agreement.

 

<PAGE>

 

            (c)   During the Term,  you shall be entitled (i) to  participate in

the Company's  Management  Incentive  Compensation Plan or any successor thereto

each year in accordance  with criteria and for amounts  approved by the Board of

Directors, except as may otherwise be delegated to the Compensation Committee or

other relevant committee, and (ii) to be granted options to acquire stock of the

Company  or  other  equity  awards,  to the  extent  (if  any)  approved  by the

Compensation  Committee or the relevant  committee,  under the  Company's  stock

option or equity  incentive  plans in effect from time to time (all such options

and equity awards,  "Awards").  Without limiting the foregoing, you shall have a

minimum targeted bonus for each fiscal year of 55% of your Base Salary (with the

actual payment of any bonus being dependent on your or the Company's achievement

of targeted objectives except as otherwise set forth in this Agreement). Each of

the actual annual bonuses paid to you each year is hereinafter referred to as an

"Annual Bonus."

 

            (d)   You shall be entitled to payments and  benefits in  connection

with a Change of Control  Termination  (as  defined in Exhibit A hereto)  and to

certain  additional  payments if you are subjected to the federal  excise tax on

excess parachute payments, as more fully set forth in Exhibit A.

 

            (e)   To the extent  that any payment  hereunder  or under any plan,

program or policy is determined to be nonqualified deferred compensation that is

noncompliant  with Section 409A ("Section 409A") of the Internal Revenue Code of

1986, as amended (the "Code"),  and is therefore subject to additional taxes and

penalties,  the Company shall provide you with additional payments as more fully

set forth in Exhibit A. Any reference to Section 409A shall be deemed to include

any applicable guidance that has been provided thereunder.

 

            (f)   You shall be  entitled  to a minimum of four weeks of vacation

each calendar year during the Term. To the extent that Company  policy  provides

additional vacation days, you shall also be entitled to such additional vacation

days.  Any unused  vacation  days in any one year  shall  carry over to the next

calendar year.

 

            (f)   During  the  Term,  the  Company  shall  provide  you  with an

automobile  allowance  of $1,100 per month that you may use for your  automobile

expenses. You will be taxed on this allowance and such allowance will be subject

to applicable tax withholdings.

 

            (g)   The Company  will  provide  you at its expense  with an annual

physical examination each year during the Term.

 

            3.    Duties.

 

            (a)   During the Term,  you shall serve and the Company shall employ

you as the  President  and Chief  Executive  Officer of the  Company,  with such

executive duties and responsibilities consistent with such positions and stature

as the Board of  Directors of the Company may from time to time  determine.  You

shall report to, and act under the general  direction of, the Board of Directors

of the Company. You shall use your best efforts to carry out the instructions of

the Board of  Directors  of the Company.  You shall be  nominated,  on an annual

basis as long as you continue to be employed under this Agreement,  for election

by the  stockholders  as a director  of the Company  and, if elected,  you shall

serve as a director, without

 

                                      -2-

 

<PAGE>

 

additional  compensation.  In  addition,  you shall  serve as an officer  and/or

director of any of the Company's  subsidiaries,  in all cases in conformity with

the organizational  documents and the policies of the Board of Directors of each

such subsidiary,  without additional compensation.  You will review and agree to

comply with the  Company's  then-current  Code of  Business  Conduct to the same

extent required for other United States-based employees of the Company. You will

perform all of your responsibilities in compliance with all applicable laws. You

acknowledge that in your capacity as principal executive officer of the Company,

you will be expected to execute certain documents on behalf of the Company under

the federal  securities laws, which may include documents covering periods prior

to the date of this  Agreement.  As of the date of this  Agreement,  you have no

reason to  believe  that you would not be  prepared  to  execute  all  documents

required for signature by the Company's  principal  executive officer (e.g., the

Company's  Annual  Report on Form 10-K for the  fiscal  year ended  January  31,

2007),  assuming that the Company's  principal  financial officer and certifying

financial  and other  employees of the Company were also  prepared to execute or

certify such documents as the case may be.

 

            (b)   During the Term,  you shall devote your entire  business  time

and energies  during  normal  business  hours to the business and affairs of the

Company and its  subsidiaries.  Nothing in this  Section 3 shall be construed as

prohibiting  you from investing your personal assets in businesses in which your

participation  is solely  that of a passive  investor  in such form or manner as

will not violate  Section 5 hereof or require  any  services on your part in the

operation  or  affairs  of  those  businesses.   You  may  also  participate  in

philanthropic  or civic  activities as long as they do not materially  interfere

with  your  performance  of your  duties  hereunder.  Service  on any  board  of

directors other than those of the Company and its subsidiaries must be approved,

in advance, by the Board of Directors of the Company.

 

            (c)   During the Term, you shall be subject to the Company's rules,

practices and policies applicable to the Company's senior executive employees.

 

            4.    Expenses.  The Company shall  reimburse you for all reasonable

expenses incurred by you during the Term in connection with your employment upon

presentation  of  appropriate  documentation  therefor  in  accordance  with the

Company's  expense  reimbursement  practices.  In the event  during the Term the

Company's principal executive offices are relocated to a location that increases

your commute to work by more than 35 miles,  the Company  shall  reimburse  your

moving  expenses   (including   reasonable  costs  relating  to  interim  living

accommodations).

 

            5.    Restrictive Covenants.

 

            (a)   During the Term, and for the applicable  Restricted Period (as

defined below)  thereafter,  you shall not,  without the written  consent of the

Board of Directors,  directly or  indirectly,  become  associated  with,  render

services  to,  invest  in,  represent,  advise or  otherwise  participate  as an

officer,  employee,  director,  stockholder,  partner  or  agent  of,  or  as  a

consultant for, any business  anywhere in the world that is competitive with the

business  in which the  Company  is engaged  or in which the  Company  has taken

affirmative  steps to  engage  (a  "Competitive  Business")  as of the time your

employment with the Company ceases;  provided,  however, that (i) nothing herein

shall prevent you from investing in up to 5% of the securities of

 

                                      -3-

 

<PAGE>

 

any  company  listed on a national  securities  exchange or quoted on the NASDAQ

quotation  system,  as long as your  involvement with any such company is solely

that of a  stockholder,  and (ii) nothing herein is intended to prevent you from

being employed by, or otherwise rendering services to, any business other than a

Competitive  Business  following the  termination  of your  employment  with the

Company.  The Restricted  Period shall be the two-year period following the date

your employment terminates.  You acknowledge that the provisions of this Section

5 are reasonable in light of the Company's worldwide business operations and the

position in which you will serve at the Company and that the provisions will not

prevent you from obtaining employment after the termination of this Agreement.

 

            (b)   The parties hereto intend that the covenant  contained in this

Section 5 shall be deemed a series of separate  covenants  for each  appropriate

jurisdiction.  If, in any judicial  proceeding,  a court shall refuse to enforce

all of the separate covenants deemed included in this Section 5 on grounds that,

taken together,  they cover too extensive a geographic  area, the parties intend

that those covenants (taken in order of the least populous jurisdictions) which,

if eliminated,  would permit the remaining  separate covenants to be enforced in

that proceeding, shall, for the purpose of such proceeding, be deemed eliminated

from the provisions of this Section 5.

 

            6.    Confidentiality, Noninterference and Proprietary Information.

 

            (a)   In the course of your employment by the Company  hereunder you

will have access to  Confidential  or  Proprietary  Data or  Information  of the

Company.  You shall not at any time divulge or  communicate  to any person,  nor

shall you direct any Company  employee to divulge or  communicate  to any person

(other than to a person bound by  confidentiality  obligations  similar to those

contained  herein  and  other  than  as  necessary  in  performing  your  duties

hereunder)  or use to the  detriment  of the  Company or for the  benefit of any

other person,  any of such  Confidential  or  Proprietary  Data or  Information,

except to the extent the same (i) becomes  publicly  known other than  through a

breach of this  Agreement by you, (ii) was known to you prior to the  disclosure

thereof by the Company to you from a source that was entitled to disclose it, or

(iii) is  subsequently  disclosed  to you by a third  party  who  shall not have

received it under any obligation of confidentiality to the Company. For purposes

of this Agreement,  the term  "Confidential  or Proprietary Data or Information"

shall mean data or information not generally available to the public,  including

personnel information,  financial  information,  customer lists, supplier lists,

product  and  tooling  specifications,  trade  secrets,  information  concerning

product  composition  and  formulas,  tools and dies,  drawings and  schematics,

manufacturing processes, information regarding operations, systems and services,

know-how,  computer  and any  other  electronic,  processed  or  collated  data,

computer programs, and pricing, marketing, sales and advertising data.

 

            (b)   You  shall  not,  during  the  Term  and  for  the  applicable

Restricted Period after the termination of your employment with the Company, for

your own account or for the account of any other  person,  (i) solicit or divert

to any  Competitive  Business any individual or entity who is then a customer of

the Company or any  subsidiary or affiliate of the Company or who was a customer

of the Company or any subsidiary or affiliate during the preceding  twelve-month

period,  (ii) employ,  retain as a consultant,  attempt to employ or retain as a

consultant,  or solicit or assist  any  Competitive  Business  in  employing  or

retaining as a consultant any

 

                                      -4-

 

<PAGE>

 

individual who is then an employee of the Company or any subsidiary or affiliate

or who was employed by the Company or any  subsidiary  or  affiliate  during the

preceding  twelve-month  period,  or (iii)  otherwise  interfere in any material

respect with the Company's  relationship  with any of its suppliers,  customers,

employees or consultants;  provided,  however,  that you shall not be prohibited

from contacting suppliers or customers after termination of your employment with

regard to matters that do not violate your  non-competition  or  confidentiality

obligations  contained  in Sections  5(a) and 6(a) or  interfere in any material

respect with the Company's relationship with such parties.

 

            (c)   You shall at all times  promptly  disclose to the Company,  in

such form and manner as the Company  reasonably  may  require,  any  inventions,

improvements or procedural or  methodological  innovations,  programs,  methods,

forms,  systems,  services,  designs,  marketing  ideas,  products or  processes

(whether or not capable of being trademarked, copyrighted or patented) conceived

or developed  or created by you during and in  connection  with your  employment

hereunder  and  which  relate  to the  business  of the  Company  ("Intellectual

Property").  All such  Intellectual  Property  shall be the sole property of the

Company.  You shall execute such instruments and perform such acts as reasonably

may be  requested  by the  Company to transfer to and perfect in the Company all

legally  protectable  rights in such  Intellectual  Property.  If the Company is

unable for any reason to secure your signature on such  instruments,  you hereby

irrevocably  appoint the Company and its  officers and agents as your agents and

attorneys-in-fact  to execute  such  instruments  and to do such things with the

same legal force and effect as if executed or done by you.

 

            (d)   All written, electronic and other tangible materials,  records

and documents made by you or coming into your possession  during your employment

concerning any products, processes or equipment,  manufactured, used, developed,

investigated  or considered by the Company or otherwise  concerning the business

or affairs of the Company,  shall be the sole property of the Company,  and upon

termination of your  employment,  or upon the request of the Company during your

employment,  you  shall  deliver  the same to the  Company.  In  addition,  upon

termination  of your  employment,  or upon  request of the  Company  during your

employment,  you shall deliver to the Company all other Company property in your

possession or under your control,  including Confidential or Proprietary Data or

Information and all Company credit cards and computer and telephone equipment.

 

            7.    Equitable Relief.  With respect to the covenants  contained in

Sections 5 and 6 of this Agreement,  you acknowledge  that any remedy at law for

any breach of said covenants may be inadequate and that the Company, in addition

to its rights at law,  shall be entitled to  specific  performance  or any other

mode of injunctive or other equitable relief to enforce its rights hereunder.

 

            8.    Termination  of  Term.  The  Term  shall  terminate  upon  the

following terms and conditions:

 

            (a)   The Term shall automatically terminate upon your death.

 

            (b)   The  Term  may  be   terminated   by  the  Company  upon  your

Disability.  For  purposes  of this  Agreement,  "Disability"  shall  mean  your

inability, due to reasons of physical or

 

                                      -5-

 

<PAGE>

 

mental  health,  to  discharge  properly a  substantial  portion of your  duties

hereunder for any 180 days (whether or not consecutive) during any period of 365

consecutive  days,  as  determined  in the  opinion  of a  physician  reasonably

satisfactory  to both you and the  Company.  If the  parties  do not  agree on a

mutually  satisfactory  physician within ten days after written demand by one or

the other,  a physician  shall be selected by the president of the  Pennsylvania

Medical Association,  and the physician shall, within 30 days thereafter, make a

determination as to whether  Disability  exists and certify the same in writing.

The services of the physician shall be paid for by the Company.  You shall fully

cooperate with the examining  physician,  including  submitting yourself to such

examinations as may be requested by the physician for the purpose of determining

whether you are disabled.

 

            (c)   The Term shall terminate immediately if the Company terminates

your employment for Cause.  For purposes of this Agreement,  "Cause" shall exist

upon a finding by the Board of Directors of any of the following:  (i) an act or

acts of willful  material  misrepresentation,  fraud or  dishonesty  by you that

results in the  personal  enrichment  of you or another  person or entity at the

expense of the Company;  (ii) your  admission,  confession  or conviction of any

felony or any other crime or offense  involving  misuse or  misappropriation  of

money or other  property;  (iii) any act involving  gross moral turpitude by you

that adversely and materially affects the Company; (iv) your continued breach of

any of your material  obligations under this Agreement 30 days after the Company

has given you notice thereof in reasonable  detail,  if such breach has not been

cured by you during such period; or (v) your willful  misconduct with respect to

your duties or gross misfeasance of office.

 

                  For purposes of this Section  8(c),  no act or failure to act,

on your part shall be considered  "willful"  unless it is done, or omitted to be

done,  by you in bad faith or  without  reasonable  belief  that your  action or

omission was in the best  interests of the Company.  Any act, or failure to act,

based upon authority given pursuant to a resolution duly adopted by the Board of

Directors  or  based  upon  the  advice  of  counsel  for the  Company  shall be

conclusively  presumed to be done,  or omitted to be done,  by you in good faith

and in the best interests of the Company.  Your  termination of employment shall

not be deemed to be for Cause unless prior to such termination you have received

a copy of a resolution duly adopted by the  affirmative  vote of not less than a

majority of the disinterested  membership of the Board of Directors at a meeting

of such Board of Directors  called and held for such purpose  (after  reasonable

notice is provided to you and you are given an  opportunity  to be heard  before

such Board of  Directors),  stating  the clause  pursuant  to which the Board of

Directors  has  effected  your  termination.  If you  appeal  this  decision  to

arbitrators  pursuant to Section 23, the arbitrators shall be required to make a

de novo  review  of the  circumstances  of your  termination  and  independently

determine whether facts exist to support such termination.

 

            (d)   The Term shall terminate if your employment is terminated in a

Change of Control Termination (as defined in Exhibit A).

 

            (e)   The Term shall  terminate  upon the  expiration  of the thirty

(30) day period after  delivery of a  Termination  Notice if your  employment is

terminated by the Company  without Cause or voluntarily by you (a termination by

you not due to Breach or a termination by you without Good Reason).

 

                                      -6-

 

<PAGE>

 

            9.    Compensation  Upon  Termination of Employment.  Separation pay

shall be paid in accordance with the schedule set forth below upon a termination

of employment  that  constitutes  a  "separation  from service" as defined under

Section 409A  ("Separation  from Service").  If a termination of employment does

not constitute a Separation  from Service,  separation pay shall be paid at such

later  time  that a  Separation  from  Service  occurs.  For  purposes  of  this

Agreement,  the default  definition of  Separation  from Service under the Final

Regulations promulgated under Section 409A shall be employed.

 

        (a) For Any Reason.  Upon  termination  of  employment:  (i) you or your

estate,  as applicable,  shall be paid within  fifteen  business days after your

date of termination  (A) your accrued and unpaid Base Salary through the date of

termination,  (B) any  then-vested  and unpaid  Annual Bonus or other  incentive

compensation  that you may have earned  pursuant to the terms of any  applicable

incentive  compensation  or bonus plan of the Company with respect to any fiscal

year or other  performance  period  completed prior to your date of termination,

and (C) any  then-unused  accrued  vacation pay;  (ii) you,  your  beneficiaries

and/or  your  estate,  as  applicable,  shall be entitled  to any  payments  and

benefits under the benefits and incentive  plans and perquisite  programs of the

Company,  in accordance with the respective  terms of those plans and perquisite

programs (including without  limitation,  any conversion option available to you

under the Company's life insurance  plan(s));  and (iii) you or your estate,  as

applicable,  shall be reimbursed  for your business  expenses  incurred prior to

termination in accordance with Section 4 above.

 

        (b) Change of Control Termination. Upon the termination of employment by

reason of a Change of Control  Termination,  you shall  receive the payments and

benefits set forth in Exhibit A.

 

        (c) Termination   without  Cause  or  Breach   Termination.   Upon   the

termination  of  employment  that  is not  by  reason  of a  Change  of  Control

Termination,  but results from either (1) a termination  by the Company  without

Cause (excluding a termination due to death or Disability), or (2) a termination

by you which is a Breach  Termination (as defined below), you shall also receive

the  following  payments;  provided,  however,  that any payment made under this

Section  9(c) shall be reduced by any amount paid or payable to you with respect

to the same type of payment  under any other plan  maintained  by the Company to

avoid duplication of payments:

 

                  (i)   The Company shall pay you an amount equal to two times

            your Base  Salary  at the rate in effect on the date of  termination

            plus  $10,000.  Payment of such amount will  commence in the form of

            normal payroll  installments through the period ending as of the end

            of the second month  following the later of (A) the calendar year in

            which your termination of employment  occurs or (B) the taxable year

            of the Company in which your termination of employment  occurs.  The

            balance of such payments  shall be made in a single lump sum payable

            within the fifteen day period  immediately  following the end of the

            month in which installment payments are to cease.

 

                  (ii)  The Company shall pay you an amount equal to twice your

            Targeted Bonus Amount (as defined  below).  This bonus shall be paid

            when bonuses are paid to other senior  executives of the Company for

            the year in which

 

                                      -7-

 

<PAGE>

 

            your  termination  of  employment  occurs but,  notwithstanding  the

            foregoing,  it shall be paid no later than the 15th day of the third

            month  following  the earlier of (A) the calendar year in which your

            termination  of  employment  occurs or (B) the  taxable  year of the

            Company in which your termination of employment occurs.

 

                  (iii) The Company  shall, until the earlier of 18 months after

            the date of  termination  and such time that the  Executive  obtains

            alternative  coverage,  pay  or  reimburse  the  Executive  for  the

            Company's  and the  Executive's  portion of the cost to provide  the

            Executive and the Executive's eligible beneficiaries (if applicable)

            health and medical  coverage under the Company's  health and medical

            plans provided that the Executive  timely elects COBRA coverage upon

            termination of employment. In addition, for two years after the date

            of  termination,  the Company shall provide the Executive  with life

            insurance  coverage  under  the  Company's  life  insurance  policy.

            Notwithstanding the foregoing,  to the extent the Company's plans do

            not permit the continued  participation  by the Executive and/or the

            Executive's eligible  beneficiaries or such participation would have

            an adverse tax impact on such plans or on the other  participants in

            such plans or the continued participation is otherwise prohibited by

            applicable law, or if such continuance would constitute nonqualified

            deferred  compensation  that does not comply with Section 409A,  the

            Company may instead provide  materially  equivalent  benefits to the

            Executive and/or the Executive's eligible beneficiaries outside such

            plans.  For  purposes  of  this  Agreement,  "materially  equivalent

            benefits"  means the aggregate  premiums that the Company would have

            paid to maintain the Executive's coverage under the health,  medical

            and life  insurance  plans.  The  Executive  agrees to complete such

            forms  and take  such  physical  examinations  as may be  reasonably

            requested by the Company in connection with life insurance coverage.

 

            As used in this Section  9(c),  your  "Targeted  Bonus Amount" shall

mean (x) the higher of 55% and the  percentage of your targeted  bonus in effect

before the date of termination for purposes of determining your Annual Bonus for

the year in which  your  termination  occurs,  times (y) the amount of your Base

Salary as in effect for the year in which your termination occurs. Also, as used

in this  Section  9(c),  a  "Breach  Termination"  means a  termination  of your

employment by you by written  Termination  Notice given to the Company within 90

days after the occurrence of any action or inaction that  constitutes a material

breach by the  Company  of the  Agreement.  A  Termination  Notice  for a Breach

Termination  shall indicate the specific action or inaction that constitutes the

material   breach,   shall  set  forth  in  reasonable   detail  the  facts  and

circumstances  claimed to provide a basis for the Breach Termination,  and shall

provide  the  Company a  minimum  of 30 days in which to  remedy  such  facts or

circumstances. Your failure to set forth in such Termination Notice any facts or

circumstances  which contribute to the showing of Breach  Termination  shall not

constitute  your waiver of any right  hereunder or preclude  you from  asserting

such fact or  circumstance in enforcing your rights  hereunder.  The Termination

Notice for a Breach Termination shall provide for a date of termination not less

than 30 nor more than 60 days after the date such Termination Notice is given.

 

            Notwithstanding the foregoing, should a termination of employment by

the Company without Cause or a Breach  Termination occur within six months prior

to, or within two

 

                                      -8-

<PAGE>

 

years after, a Change of Control,  your termination shall be considered a Change

of Control Termination and you shall vest in the payments and benefits set forth

in Exhibit A. Any such  payments or benefits  shall be offset by any payments or

benefits  that you may have been already paid or received due to the  occurrence

of the  termination of employment  prior to the Change of Control,  and shall be

paid in accordance with Exhibit A.

 

            (d)   The  payment  by  the  Company  of  any  compensation  or  the

provision of benefits,  if any,  pursuant to Section 9(c) and Exhibit A shall be

conditioned on your execution, without revocation, of a Release (a "Release") in

a form  provided  by and  acceptable  to the  Company.  Such  Release  shall  be

substantially in the form of Exhibit B hereto but may be modified by the Company

in its sole  discretion  as it deems  appropriate  to reflect  changes in law or

circumstances arising after the date of this Agreement;  provided, however, that

no such  modification  shall reduce your rights or increase your  obligations to

the Company over those  contemplated in this  Agreement,  including the Exhibits

hereto.  No Release shall be required for any benefits to which you are entitled

under the terms of any plan.

 

            10.   Indemnification. At all times, prior to, on or after a  Change

of Control,  the  Company  shall  indemnify  you for your acts as an officer and

director to the fullest  extent  permitted by law.  Further,  the Company  shall

provide you with advance attorneys fees and expenses to you as they are incurred

subject to presentation of invoices.

 

            11.   Representations. You hereby represent and warrant that you are

not subject to any  employment  agreement,  non-competition  or  confidentiality

agreement or other  commitment  that either  would be violated by your  entering

into or performing your obligations  under this Agreement or that would restrict

in any manner or interfere with the performance of your  obligations  under this

Agreement.  You hereby further  represent and warrant that you have not revealed

to the Company or any employee of the Company any  confidential  information  of

any former employer, and you agree that you will not do so in the future.

 

            12.   Entire Agreement; Modification;  Construction. This Agreement,

together  with the  Exhibits  hereto,  all employee  benefit  plans in which you

participate, and any outstanding awards, including,  without limitation,  equity

awards,  constitute  the full and complete  understanding  of the  parties,  and

supersede all prior agreements and understandings,  oral or written, between the

parties, including, but not limited to the offer letter dated June 15, 2005, the

Employment  Agreement dated June 21, 2005, and Amendment No. 1 to the Employment

Agreement  dated  February 1, 2006,  with respect to the subject  matter hereof.

Exhibit A and Exhibit B are hereby  incorporated by reference and made a part of

this   Agreement.   Each   party  to  this   Agreement   acknowledges   that  no

representations,  inducements,  promises or agreements,  oral or otherwise, have

been made by either party, or anyone acting on behalf of either party,  that are

not set forth or  referred  to herein.  This  Agreement  may not be  modified or

amended except by an instrument in writing signed by the parties.

 

            13.   Severability. Any term or provision of  this Agreement that is

held to be  invalid  or  unenforceable  in any  jurisdiction  shall,  as to that

jurisdiction,  be ineffective to the extent that invalidity or  unenforceability

without rendering invalid or unenforceable the remaining terms and provisions of

this Agreement or affecting the validity or  enforceability  of any of the terms

or provisions of this Agreement in any other jurisdiction.

 

                                      -9-

 

<PAGE>

 

            14.   Waiver of Breach.  The  waiver by either  party of a breach of

any  provision  of  this  Agreement,  which  waiver  must  be in  writing  to be

effective,  shall not operate as or be construed  as a waiver of any  subsequent

breach.

 

            15.   Notices.  All notices  hereunder shall be in writing and shall

be sent by messenger or by certified or registered mail, postage prepaid, return

receipt  requested,  if to you, to your residence set forth above, and if to the

Company,  to the Vice  President-Human  Resources,  at the Company's address set

forth above,  or to such other address as either party to this  Agreement  shall

specify to the other.

 

            16.   Assignability;  Binding  Effect.  This Agreement  shall not be

assignable by either party,  except that it may be assigned by the Company to an

acquirer  of all or  substantially  all of the  assets of the  Company  or other

successor  to the  Company,  subject  to your  rights  arising  from a Change of

Control as provided in Exhibit A and your other rights hereunder. This Agreement

shall  be  binding   upon  and  inure  to  the   benefit  of  you,   your  legal

representatives,  heirs and distributees, and shall be binding upon and inure to

the benefit and detriment of the Company, its successors and assigns. Prior to a

Change of Control, any successor to the Company shall be required to acknowledge

in writing its  obligations  hereunder as successor to the Company to the extent

that the  Company  has not  fulfilled  its  obligations  prior to the  Change of

Control  or any  amounts  or  benefits  are still due to you after the Change of

Control.

 

            17.   No Mitigation Required.  No Offset.  Following any termination

of your  employment  hereunder,  you  shall  have no  obligation  to seek  other

employment but shall not be prohibited from doing so, and no  compensation  paid

to you as the result of any other employment shall reduce any payment or benefit

required to be provided by the Company hereunder. Not in limitation of any other

rights which the Company may have,  including without limitation,  injunctive or

other  equitable  relief,  in  the  event  of a  violation  by you of any of the

covenants  set forth in Section 5,  Section 6 or Section 19 hereof,  the Company

may cease paying any compensation  and benefits,  if any, to you under Section 9

hereof and may seek recovery of any such amount paid to you during any period in

which you were in violation of the provisions of Section 5, Section 6 or Section

19. The cessation  and/or  recovery of any of the payments  described in Section

9(c) in connection  with any such  violation  shall not be deemed to be evidence

that monetary  damages are  sufficient to cure any damage to the Company for any

such violation.

 

            18.   Governing  Law.  All  questions  pertaining  to the  validity,

construction, execution and performance of this Agreement shall be construed and

governed  in  accordance  with the  laws of the  Commonwealth  of  Pennsylvania,

without giving effect to the conflicts or choice of law provisions thereof.

 

            19.   Nondisparagement.  You  agree  not to  publicly  or  privately

disparage the Company,  its personnel,  products or services  either during your

employment by the Company or during the Restricted Period.

 

            20.   Survival.  All of the  provisions  of this  Agreement  that by

their  terms are to be  performed  or that  otherwise  are to  endure  after the

termination of this Agreement and/or the

 

                                      -10-

 

<PAGE>

 

termination of your employment, including, without limitation, Sections 5, 6, 7,

10, 17 and 19,  shall  survive  the  termination  of your  employment  and shall

continue in effect for the respective periods therein provided or contemplated.

 

            21.   Headings.  The headings in this Agreement are intended  solely

for convenience of reference and shall be given no effect in the construction or

interpretation of this Agreement.

 

            22.   Counterparts.  This  Agreement  may  be  executed  in  several

counterparts,  each of which shall be deemed to be an original  but all of which

together shall constitute one and the same instrument.

 

            23.   Dispute  Resolution.  In the event of any claim or controversy

arising out of or relating to this Agreement or the  performance,  construction,

interpretation,  enforcement  or breach hereof  (excluding  injunctive and other

equitable relief regarding a dispute over the covenants contained in Sections 5,

6, and 19 hereof) (a "dispute"), the parties shall settle disputes in accordance

with this Section 23.

 

            (a)   Notice and Selection of  Arbitrators.  The parties shall first

attempt to settle any disputes amicably between themselves.  Should they fail to

do so,  either  party may,  upon written  demand from the claiming  party of the

specific nature of any purported  claims and the amount of damages  attributable

to each such  claim,  served  upon the  other,  submit  such  dispute to binding

arbitration.  The arbitration  panel shall consist of three  arbitrators,  shall

take place in  Philadelphia,  Pennsylvania  and shall proceed in accordance with

the employment dispute resolution rules of the American Arbitration  Association

("AAA").

 

            Within 15 days after the  commencement of  arbitrations,  each party

shall select one arbitrator  from a list of  arbitrators  provided by the AAA. A

third neutral arbitrator shall be designated by the arbitrators  selected by the

parties within 15 days of their appointment. In the event that any arbitrator is

not appointed within the prescribed time period,  then either party may apply to

the AAA for the  appointment of such  arbitrator.  Prior to the  commencement of

hearings, each of the arbitrators appointed shall provide an oath or undertaking

of impartiality.

 

            (b)   Hearings.   After  the  arbitrators  have  been  appointed  as

provided  above,  the  arbitrators  shall  hold  such  meetings  as a party  may

reasonably  request and at such  meetings  hear and consider any evidence that a

party  desires to  present.  Within 60 days after the  appointment  of the third

arbitrator, the arbitrators shall make their determination.

 

            (c)   Determinations.   The  determination  of  a  majority  of  the

arbitrators shall be final and binding on the parties, regardless of whether one

of  the  parties  fails  or  refuses  to  participate  in the  arbitration.  The

arbitrators  shall  have the power and  authority  to grant any remedy or relief

they deem just and equitable,  including injunctive relief, specific performance

(excluding,  however,  equitable  relief  regarding a dispute over the covenants

contained in Sections 5, 6 and 19 hereof),  and reasonable costs and expenses of

such  arbitration  and  attorneys'  fees.  Absent any  specific  order of -- the

arbitrators,  the costs and expenses of the arbitration shall be paid equally by

the  parties.  The  arbitration  award,  decree or order shall be in writing and

shall be  accompanied  by a  reasoned  opinion.  The award may be entered in any

court

 

                                      -11-

 

<PAGE>

 

of competent jurisdiction, and any judgment, decree or order entered in any such

court and any related  orders may be enforced as any other  judgment,  decree or

order of such court. The arbitration proceedings and all materials,  submissions

and  documents  relating  thereto  shall be  confidential,  and except as may be

required by law neither a party nor an  arbitrator  may disclose the  existence,

contents  or results of any  arbitration  hereunder  without  the consent of all

parties  hereto.  All disputes shall be resolved in accordance  with the laws of

the Commonwealth of Pennsylvania.

 

            (d)   Qualifications  of  Arbitrators.  Any arbitrator  chosen by or

through the AAA shall be chosen from a class of disinterested  experts qualified

by education, training and/or experience to resolve the particular issue(s) in a

dispute in an informed and efficient manner.

 

            (e)   Preservation  of  Remedies.   Notwithstanding   the  preceding

binding  arbitration  provisions,   the  parties  agree  to  preserve,   without

diminution, certain remedies that any party may exercise before, during or after

an  arbitration  proceeding  is  brought.  The  parties  shall have the right to

proceed in any court of proper  jurisdiction  or by  self-help  to  exercise  or

prosecute  the following  remedies,  as  applicable:  obtaining  provisional  or

ancillary remedies,  including injunctive and other equitable relief with regard

to disputes over the covenants contained in Sections 5, 6 and 19 hereof.

 

                                      -12-

 

<PAGE>

 

            If you  are  in  agreement  with  the  foregoing,  please  sign  the

duplicate original in the space provided below and return it to the Company.

 

                                      C&D TECHNOLOGIES, INC.

 

                                      By: /s/ William Harral, III

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

                                             William Harral, III

                                      Title: Chairman of the Board of Directors

 

Agreed as of the date

above written:

/s/ Jeffrey A. Graves

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

Jeffrey A. Graves

President & Chief Executive Officer

 

                                      -13-

 

<PAGE>

 

                                    EXHIBIT A

                    TO EMPLOYMENT AGREEMENT (THE "AGREEMENT")

                       OF JEFFREY A. GRAVES ("EXECUTIVE")

 

(Capitalized terms used herein and not otherwise defined have the meanings given

to them in the Agreement.)

 

      I.    Change of Control  Termination.  A "Change  of Control  Termination"

            means the  occurrence  of any of the  following  within  six  months

            before or within 24 months  after a Change of  Control  (as  defined

            below):   (a)  the  Executive's   employment  with  the  Company  is

            terminated by the Executive pursuant to (1) a Breach Termination, if

            the  termination  occurs  within  six  months  prior to a Change  of

            Control, or (2) a Termination for Good Reason (as defined below), if

            the  termination  occurs  after  a  Change  of  Control;  or (b) the

            Executive's employment with the Company is terminated by the Company

            for any reason other than death, Disability or for Cause.

 

      II.   Certain Other Definitions.

 

                  (a)  Change of  Control.  For  purposes  of the  Agreement,  a

            "Change of Control" shall mean the first to occur of:

 

                       1.     The acquisition by any individual, entity or group

                       (within  the  meaning of Section  13(d)(3) or 14(d)(2) of

                       the  Securities  Exchange  Act of 1934,  as amended  (the

                       "Exchange  Act")) (a  "Person") of  beneficial  ownership

                       (within the meaning of Rule 13d-3  promulgated  under the

                       Exchange   Act)  of  30%  or  more  of  either   (A)  the

                       then-outstanding  shares of common  stock of the  Company

                       (the  "Outstanding  Company  Common  Stock")  or (B)  the

                       combined  voting  power  of the  then-outstanding  voting

                       securities of the Company  entitled to vote  generally in

                       the  election  of  directors  (the  "Outstanding  Company

                       Voting  Securities");   provided,   however,   that,  for

                       purposes   of  this   Section   II(a)1,   the   following

                       acquisitions  shall not  constitute  a Change of Control:

                       (i) any acquisition  directly from the Company,  (ii) any

                       acquisition by the Company,  (iii) any acquisition by any

                       employee  benefit  plan (or related  trust)  sponsored or

                       maintained   by  the   Company   or  any   majority-owned

                       subsidiary of the Company, or (iv) any acquisition by any

                       corporation  pursuant to a transaction that complies with

                       Subsections  (A),  (B) and (C) of Section  II(a)3  below.

                       Separation payments that constitute nonqualified deferred

                       compensation  set  forth in this  Exhibit A shall be paid

                       upon a Change in Control  Termination  that constitutes a

                       Separation from Service.  For purposes of this Exhibit A,

                       the default definition of "Separation from Service" under

                       the Final  Regulations  promulgated  under  Section  409A

                       shall be employed.

 

                       2.     Individuals who, as of the date hereof, constitute

                       the Board of Directors (the "Incumbent Board") cease, for

                       any  reason,  to  constitute  at least a majority  of the

                       Board  of   Directors;   provided,   however,   that  any

                       individual  becoming a director subsequent to the date of

                       the Agreement whose election,  or nomination for election

                       by the Company's stockholders,  was approved by a vote of

                       at least

 

                                      A-1

 

<PAGE>

 

                       two-thirds of the directors then comprising the Incumbent

                       Board shall be considered as though such  individual were

                       a member of the Incumbent Board, but excluding,  for this

                       purpose,  any such individual whose initial assumption of

                       office  occurs as a result  of an  actual  or  threatened

                       election  contest with respect to the election or removal

                       of directors or other actual or  threatened  solicitation

                       of proxies or consents by or on behalf of a Person  other

                       than the Board of Directors.

 

                       3.     Consummation   of   a   reorganization,    merger,

                       statutory    share    exchange,    recapitalization    or

                       consolidation or similar corporate  transaction involving

                       the Company or any of its  subsidiaries,  a sale or other

                       disposition of all or substantially  all of the assets of

                       the  Company,  or the  acquisition  of assets or stock of

                       another entity by the Company or any of its  subsidiaries

                       (each,  a "Business  Combination"),  in each case unless,

                       following   such   Business   Combination,   (A)  all  or

                       substantially  all of the  individuals  and entities that

                       were the  beneficial  owners of the  Outstanding  Company

                       Common   Stock  and  the   Outstanding   Company   Voting

                       Securities immediately prior to such Business Combination

                       beneficially own,  directly or indirectly,  more than 50%

                       of the  then-outstanding  shares of common  stock and the

                       combined  voting  power  of the  then-outstanding  voting

                       securities  entitled to vote generally in the election of

                       directors,  as  the  case  may  be,  of  the  corporation

                       resulting  from  such  Business  Combination  (including,

                       without  limitation,  a corporation  that, as a result of

                       such   transaction,   owns   the   Company   or   all  or

                       substantially all of the Company's assets either directly

                       or through one or more subsidiaries) in substantially the

                       same proportions as their ownership  immediately prior to

                       such  Business  Combination  of the  Outstanding  Company

                       Common   Stock  and  the   Outstanding   Company   Voting

                       Securities,  as the case may be, (B) no Person (excluding

                       any corporation  resulting from such Business Combination

                       or any employee  benefit  plan (or related  trust) of the

                       Company or such corporation  resulting from such Business

                       Combination)  beneficially owns,  directly or indirectly,

                       30% or more of, respectively, the then-outstanding shares

                       of common stock of the  corporation  resulting  from such

                       Business  Combination or the combined voting power of the

                       then-outstanding  voting  securities of such corporation,

                       except to the extent that such ownership existed prior to

                       the Business Combination,  and (C) at least a majority of

                       the members of the board of directors of the  corporation

                       resulting from such Business  Combination were members of

                       the  Incumbent  Board at the time of the execution of the

                       initial  agreement  or of  the  action  of the  Board  of

                       Directors providing for such Business Combination; or

 

                       4.     Approval by the  stockholders  of the Company of a

                       complete liquidation or dissolution of the Company.

 

                  (b)  Termination for Good Reason. For purposes of this Exhibit

            A, a  "Termination  for  Good  Reason"  means a  termination  of the

            Executive's  employment  by the  Executive  by  written  Termination

            Notice given to the Company  within 90 days after the  occurrence of

            the Good Reason event.  A Termination  Notice for a Termination  for

            Good Reason shall  indicate the specific  provision in Section II(c)

            relied  upon,  shall set forth in  reasonable  detail  the facts and

            circumstances  claimed to provide a basis for  Termination  for Good

            Reason,  and shall provide the Company a minimum of 30 days in which

            to

 

                                      A-2

 

<PAGE>

 

            remedy such facts or circumstances.  The failure by the Executive to

            set forth in such  Termination  Notice  any  facts or  circumstances

            which  contribute  to the showing of Good Reason shall not waive any

            right  of  Executive   hereunder  or  preclude  the  Executive  from

            asserting  such  fact  or   circumstance  in  enforcing  his  rights

            hereunder.  The Termination Notice for a Termination for Good Reason

            shall  provide for a date of  termination  not less than 30 nor more

            than 60 days after the date such Termination Notice is given.

 

                  (c) Good Reason. For purposes of this Exhibit A, "Good Reason"

            shall mean the occurrence,  without the Executive's  express written

            consent,  of  any  of  the  following  circumstances,   unless  such

            circumstances  are fully  corrected prior to the date of termination

            specified  in the  Termination  Notice  for a  Termination  for Good

            Reason as  contemplated  in  Section  II(b)  above:  (i) a  material

            diminution    in   the    Executive's    authority,    duties,    or

            responsibilities;  (ii) a  material  diminution  in  the  authority,

            duties, or  responsibilities of the supervisor to whom the Executive

            is required to report,  including, if applicable. a requirement that

            the Executive  report to a corporate  officer or employee instead of

            reporting  directly  to the  board of  directors;  (iii) a  material

            diminution in the budget over which the Executive retains authority;

            (iv) a material  relocation  of the  Company's  principal  executive

            offices (or such other office to which the  Executive is required to

            report); (v) a material diminution in the Executive's Base Salary or

            (vi) any other action or inaction that constitutes a material breach

            by the Company of the Agreement.

 

      III.  Payments and Benefits.

 

            Separation pay upon a Change of Control Termination shall be paid in

            accordance  with this  Section III  provided  that such  termination

            constitutes  a  "separation  from  service" as defined under Section

            409A ("Separation from Service"). If a Change in Control Termination

            does not constitute a Separation from Service,  separation pay shall

            be paid at such later time that a Separation from Service occurs.

 

            Upon a Separation  from Service  occurring upon or after a Change of

            Control  Termination,  the  Executive  shall be entitled to receive,

            subject to the  execution of the Release,  the payments and benefits

            set  forth  below  in  this  Section  III  in  consideration  of the

            Executive's  agreements  under  the  Agreement,  including  but  not

            limited to the Executive's agreement not to compete with the Company

            for a period of two  years  after a Change  of  Control  Termination

            pursuant to Section 5(a) of the Agreement;  provided,  however, that

            any payment made or benefit provided under this Section III shall be

            reduced by any amount  paid or payable to the  Executive  and/or the

            Executive's  family  with  respect  to the same type of  payment  or

            benefit  under any other  plan  maintained  by the  Company to avoid

            duplication of payments or benefits,  including without  limitation,

            any amounts that were paid upon  termination of employment  prior to

            the Change of Control:

 

                  (a) The Company shall pay to the Executive within fifteen days

            following the Change of Control Termination, a lump sum amount equal

            to (i)  three  times  the sum of (x) the Base  Salary  as in  effect

            immediately  before  the  date  of  termination   (disregarding  any

            reduction thereof in violation of Section 2(a) of the Agreement) and

            (y) the Annual

 

                                      A-3

 

<PAGE>

 

            Bonus  Amount,  plus (ii)  $10,000.  The "Annual Bonus Amount" shall

            mean the  greater of (i) the average of the Annual  Bonuses  paid to

            the  Executive  with  respect  to each of the  three  most  recently

            completed fiscal years of the Company before the date of termination

            for  which a bonus has been  paid or (ii) the  Executive's  Targeted

            Bonus Amount. The Executive's "Targeted Bonus Amount" shall mean (x)

            the higher of 55% and the  percentage  of the  Executive's  targeted

            bonus in effect  before  the date of  termination  for  purposes  of

            determining the  Executive's  Annual Bonus for the year in which the

            termination  occurs,  times (y) the amount of the  Executive's  Base

            Salary  as  in  effect  for  the  year  in  which  the   Executive's

            termination occurs  (disregarding any reduction thereof in violation

            of Section 2(a) of the Agreement).

 

                  (b) The Company  shall,  until the earlier of 18 months  after

            the date of the Change of Control Termination and such time that the

            Executive  obtains  alternative  coverage,   pay  or  reimburse  the

            Executive for the Company's and the Executive's  portion of the cost

            to provide the Executive and the Executive's eligible  beneficiaries

            (if  applicable)  health and medical  coverage  under the  Company's

            health and medical plans  provided that the Executive  timely elects

            COBRA coverage upon termination of employment.  In addition, for two

            years  after the date of the Change of Control,  the  Company  shall

            provide  the  Executive  with  life  insurance  coverage  under  the

            Company's life insurance policy.  Notwithstanding the foregoing,  to

            the  extent  the  Company's   plans  do  not  permit  the  continued

            participation  by the  Executive  and/or  the  Executive's  eligible

            beneficiaries or such participation would have an adverse tax impact

            on such  plans or on the  other  participants  in such  plans or the

            continued  participation is otherwise  prohibited by applicable law,

            or  if  such  continuance  would  constitute  nonqualified  deferred

            compensation that does not comply with Section 409A, the Company may

            instead  provide  materially  equivalent  benefits to the  Executive

            and/or the Executive's  eligible  beneficiaries  outside such plans.

            For purposes of this  Agreement,  "materially  equivalent  benefits"

            means the  aggregate  premiums  that the Company  would have paid to

            maintain the Executive's coverage under the health, medical and life

            insurance  plans.  The  Executive  agrees to complete such forms and

            take such physical  examinations  as may be reasonably  requested by

            the Company in connection with life insurance coverage.

 

                  (c) All outstanding  Options and restricted  stock awards that

            have been  granted to the  Executive  by the Company at any time but

            have not yet expired or vested and upon which vesting depends solely

            upon  the  Executive's  remaining  employed  by  the  Company  for a

            specified  period  of  time,   shall   immediately  vest  or  become

            nonforfeitable,  as the case may be, and the Company  shall,  in the

            case of Options  that are not  exercised  or cashed out,  extend the

            period  during  which such  Options may be exercised to the greatest

            extent  permitted  by the  applicable  plan,  Section  409A or other

            applicable  law. The Company  agrees to take all steps  necessary to

            implement the foregoing sentence.

 

                  (d) The Company,  at its expense,  shall provide the Executive

            with  outplacement  services  at a level  appropriate  for the  most

            senior level of executive  employees through an outplacement firm of

            the Executive's choice for a period of up to one year after the date

            of the Change of Control Termination.

 

                                      A-4

 

<PAGE>

 

      IV.   Certain Additional Payments.

 

                  (a)  Anything  in the  Agreement  and  this  Exhibit  A to the

            contrary  notwithstanding,  in the event it shall be determined that

            any  Payment  or any other  amounts  or  benefits  delivered  to the

            Executive under the Agreement or any other agreement,  plan,  policy

            or program, including,  without limitation,  equity awards, would be

            subject to the Excise Tax, then the  Executive  shall be entitled to

            receive an additional payment (the "Gross-Up  Payment") in an amount

            such  that,  after  payment by the  Executive  of all taxes (and any

            interest  or   penalties   imposed  with  respect  to  such  taxes),

            including,  without  limitation,  any income taxes (and any interest

            and penalties  imposed with respect  thereto) and Excise Tax imposed

            upon the  Gross-Up  Payment and after the payment of all  additional

            taxes and interest  imposed under Code Section  409A(a)(1)(B) on the

            Gross-Up  Payment and any  separation  payment made to the Executive

            hereunder,  the Executive  retains an amount of the Gross-Up Payment

            equal to the Excise Tax imposed upon the  Payments.  Notwithstanding

            the  foregoing  provisions  of this  Section  IV(a),  if it shall be

            determined  that the Executive is entitled to the Gross-Up  Payment,

            but that the Parachute Value of all Payments does not exceed 110% of

            the Safe Harbor  Amount,  then no Gross-Up  Payment shall be made to

            the Executive and the amounts  payable under this Agreement shall be

            reduced  so  that  the  Parachute  Value  of  all  Payments,  in the

            aggregate,  equals the Safe  Harbor  Amount.  The  reduction  of the

            amounts  payable  hereunder,  if applicable,  shall be made by first

            reducing the  payments  under  Section  III(a) of this Exhibit A and

            shall  be made in such a  manner  as to  maximize  the  Value of all

            Payments  actually made to the  Executive.  For purposes of reducing

            the Payments to the Safe Harbor Amount,  only amounts  payable under

            this  Agreement  (and no other  Payments)  shall be reduced.  If the

            reduction  of the amounts  payable  under this  Agreement  would not

            result in a reduction of the Parachute  Value of all Payments to the

            Safe Harbor Amount,  no amount payable under the Agreement  shall be

            reduced  pursuant to this Section IV(a).  The company's  obligations

            under this Section IV shall not be conditioned  upon the Executive's

            termination of employment and they shall survive the  termination of

            the  Executive's  employment.  In furtherance of the foregoing,  the

            provisions of this IV(a) shall supersede any provision of any equity

            award or  agreement  that limits  payment of such award or agreement

            due to Section 280G or 4999 of the Code,  and the Company shall take

            any necessary  action to amend such every such award or agreement to

            comply with this provision.

 

                  (b)  Anything  in the  Agreement  and  this  Exhibit  A to the

            contrary  notwithstanding,  in the event it shall be determined that

            any  amounts  or  benefits  delivered  to the  Executive  under  the

            Agreement or any other agreement,  plan,  policy or program shall be

            deemed to be nonqualified deferred compensation that does not comply

            with  Section  409A  ("Noncompliant  409A  Payment"),  and  that  is

            therefore subject to the taxes and penalties under Section 409A (the

            "409A  Taxes"),  then the Executive  shall be entitled to receive an

            additional  payment (the "409A Gross-Up  Payment") in an amount such

            that,  after payment by the Executive of all taxes (and any interest

            or penalties imposed with respect to such taxes), including, without

            limitation, any income taxes (and any interest and penalties imposed

            with  respect  thereto)  and taxes  imposed  upon the 409A  Gross-Up

            Payment,  the Executive  shall retain an amount of the 409A Gross-Up

            Payment equal to the 409A Taxes imposed upon the Payments.

 

                                       A-5

 

<PAGE>

 

                  (c)  Subject  to  the   provisions  of  Section   IV(d),   all

            determinations  required to be made under this Section IV, including

            whether  and when a  Gross-Up  Payment or 409A  Gross-Up  Payment is

            required,  the  amount of such  Gross-Up  Payment  or 409A  Gross-Up

            Payment,  and the  assumptions  to be  utilized  in arriving at such

            determination,  shall be made by any nationally recognized certified

            public  accounting  firm as may be designated by the Executive  (the

            "Accounting  Firm").  The  Accounting  Firm shall  provide  detailed

            supporting calculations both to the Company and the Executive within

            15 business  days of the receipt of notice from the  Executive  that

            there has been a Payment or a payment that the Executive  reasonably

            believes to be a Noncompliant 409A Payment,  or such earlier time as

            is requested by the Company.  In the event that the Accounting  Firm

            is serving as  accountant or auditor for the  individual,  entity or

            group  effecting  the Change of Control,  the  Executive may appoint

            another   nationally   recognized   accounting   firm  to  make  the

            determinations  required hereunder (which accounting firm shall then

            be  referred  to as the  Accounting  Firm  hereunder).  All fees and

            expenses  of the  Accounting  Firm  shall  be  borne  solely  by the

            Company.   Any  Gross-Up  Payment,  or  409A  Gross-Up  Payment,  as

            determined pursuant to this Section IV, shall be paid by the Company

            to the  Executive  within five  business  days of the receipt of the

            Accounting Firm's  determination,  which determination shall be made

            no later than the end of the second month following the later of (1)

            the  calendar  year in which  the  Executive's  employment  with the

            Company  terminates and (2) the taxable year of the Company in which

            the Executive's  employment with the Company terminates.  Payment of

            the Gross-Up  Payment or the 409A Gross-Up  Payment shall be made as

            soon as practicable  after such  determination has been made, but in

            no event shall payment be made later than the end of the Executive's

            taxable year next  following the  Executive's  taxable year in which

            the Executive shall have remitted the related taxes.

 

                  Any determination by the Accounting Firm shall be binding upon

            the Company and the Executive. As a result of the uncertainty in the

            application of Sections 4999 and 409A of the Code at the time of the

            initial  determination  by  the  Accounting  Firm  hereunder,  it is

            possible that Gross-Up Payments and 409A Gross-Up Payments that will

            not have  been  made by the  Company  should  have  been  made  (the

            "Underpayment"),  consistent  with the  calculations  required to be

            made  hereunder.  In the event the  Company  exhausts  its  remedies

            pursuant to Section IV(c) and the  Executive  thereafter is required

            to make a payment of any Excise Tax or 409A  Taxes,  the  Accounting

            Firm  shall  determine  the  amount  of the  Underpayment  that  has

            occurred  and any such  Underpayment  shall be promptly  paid by the

            Company to or for the benefit of the Executive.

 

                  (d) The  Executive  shall notify the Company in writing of any

            claim by the Internal  Revenue  Service that, if  successful,  would

            require the payment by the  Company of the  Gross-Up  Payment or the

            409A Gross-Up Payment.  Such notification  shall be given as soon as

            practicable, but no later than ten business days after the Executive

            is informed in writing of such claim.  The  Executive  shall apprise

            the  Company  of the nature of such claim and the date on which such

            claim is  requested  to be paid.  The  Executive  shall not pay such

            claim prior to the  expiration  of the 30-day  period  following the

            date on which the  Executive  gives such  notice to the  Company (or

            such  shorter  period  ending on the date that any  payment of taxes

            with  respect to such claim is due).  If the  Company

 

                                      A-6

 

<PAGE>

 

            notifies the  Executive in writing  prior to the  expiration of such

            period that the Company desires to contest such claim, the Executive

            shall:

 

                        (1)   give  the   Company  any   information  reasonably

                        requested  by the  Company  relating to such claim,

 

                        (2)   take such action  in  connection  with  contesting

                        such claim as the Company  shall  reasonably  request in

                        writing   from   time  to   time,   including,   without

                        limitation,  accepting legal representation with respect

                        to such claim by an attorney  reasonably selected by the

                        Company,

 

                        (3)   cooperate with the  Company in good faith in order

                        to effectively contest such claim, and

 

                        (4)   permit   the   Company   to   participate   in any

                        proceedings relating to such claim;

 

                  provided,  however,  that  the  Company  shall  bear  and  pay

            directly all costs and expenses  (including  additional interest and

            penalties)  incurred  in  connection  with such  contest,  and shall

            indemnify and hold the Executive  harmless,  on an after-tax  basis,

            for any Excise Tax or income tax (including  interest and penalties)

            imposed as a result of such  representation and payment of costs and

            expenses.  Without  limitation on the  foregoing  provisions of this

            Section IV(c),  the Company shall control all  proceedings  taken in

            connection  with such  contest,  and,  at its sole  discretion,  may

            pursue or forgo  any and all  administrative  appeals,  proceedings,

            hearings and  conferences  with the applicable  taxing  authority in

            respect of such claim and may, at its sole discretion, either direct

            the Executive to pay the tax claimed and sue for a refund or contest

            the claim in any  permissible  manner,  and the Executive  agrees to

            prosecute such contest to a determination  before any administrative

            tribunal,  in a court  of  initial  jurisdiction  and in one or more

            appellate courts, as the Company shall determine; provided, however,

            that if the Company  directs the Executive to pay such claim and sue

            for a refund,  the Company  shall advance the amount of such payment

            to the Executive, on an interest-free basis, and shall indemnify and

            hold the Executive harmless,  on an after-tax basis, from any Excise

            Tax or income tax  (including  interest or  penalties) or 409A Taxes

            imposed  with respect to such advance or with respect to any imputed

            income in connection with such advance; and provided,  further, that

            any extension of the statute of  limitations  relating to payment of

            taxes for the taxable  year of the  Executive  with respect to which

            such contested amount is claimed to be due is limited solely to such

            contested amount. Furthermore,  the Company's control of the contest

            shall be  limited  to issues  with  respect  to which  the  Gross-Up

            Payment or 409A Gross-Up Payment would be payable hereunder, and the

            Executive  shall be entitled  to settle or contest,  as the case may

            be, any other issue  raised by the Internal  Revenue  Service or any

            other taxing authority.

 

                  (e) If,  after the  receipt  by the  Executive  of a  Gross-Up

            Payment  or 409A  Gross-Up  Payment  or an  amount  advanced  by the

            Company pursuant to Section IV(d), the Executive becomes entitled to

            receive  any  refund  with  respect  to the Excise Tax to which such

            Gross-Up  Payment  relates  or  with  respect  to  such  claim,  the

            Executive shall

 

                                      A-7

 

<PAGE>

 

            (subject to the Company's complying with the requirements of Section

            IV(c), if applicable) promptly pay to the Company the amount of such

            refund  (together  with any interest paid or credited  thereon after

            taxes applicable thereto). If, after the receipt by the Executive of

            an amount  advanced by the  Company  pursuant  to Section  IV(c),  a

            determination  is made that the  Executive  shall not be entitled to

            any  refund  with  respect to such  claim and the  Company  does not

            notify the Executive in writing of its intent to contest such denial

            of  refund   prior  to  the   expiration   of  30  days  after  such

            determination,  then such advance shall be forgiven and shall not be

            required to be repaid and the amount of such advance  shall  offset,

            to the extent thereof, the amount of Gross-Up Payment required to be

            paid.

 

                  (f)  Notwithstanding  any other  provision of this Section IV,

            the Company  may, in its sole  discretion,  withhold and pay over to

            the  Internal  Revenue  Service  or  any  other  applicable   taxing

            authority,  for the benefit of the Executive,  all or any portion of

            any Gross-Up  Payment or 409A  Gross-Up  Payment,  and the Executive

            hereby consents to such withholding.

 

                  (g)  Definitions. The following terms shall have the following

            meanings for purposes of this Section IV.

 

                       (i) "Code" shall mean the Internal  Revenue Code of 1986,

            as amended,  or any successor thereto.

 

                       (ii)  "Excise  Tax" shall mean the excise tax  imposed by

            Section  4999 of the Code,  together  with any interest or penalties

            imposed with respect to such excise tax.

 

                       (iii)  "Parachute  Value"  of a  Payment  shall  mean the

            present  value as of the date of the change of control for  purposes

            of  Section  280G of the Code of the  portion of such  Payment  that

            constitutes  a "parachute  payment"  under  Section  280G(b)(2),  as

            determined  by the  Accounting  Firm  for  purposes  of  determining

            whether  and to what  extent  the  Excise  Tax  will  apply  to such

            Payment.

 

                       (iv) "Payment"  shall mean any payment or distribution in

            the nature of compensation (within the meaning of Section 280G(b)(2)

            of the Code) to or for the benefit of the Executive, whether paid or

            payable pursuant to this Agreement or otherwise.

 

                       (v) "Safe Harbor Amount" means 2.99 times the Executive's

            "base amount," within the meaning of Section 280G(b)(3) of the Code.

 

                       (vi) "Value" of a Payment shall mean the economic present

            value of a  Payment  as of the date of the  change  of  control  for

            purposes  of  Section  280G  of  the  Code,  as  determined  by  the

            Accounting   Firm  using  the  discount  rate  required  by  Section

            280G(d)(4) of the Code.

 

                  (h) The Company's  obligations under this Section IV shall not

            be conditioned upon the Executive's  termination of employment,  and

            they shall survive the termination of the Executive's employment and

            the Term with  respect to any  Payments or other  payments

 

                                      A-8

 

<PAGE>

 

            that  are  determined  by  the  Accounting  Firm  to be  either  (i)

            contingent  on a "change of control"  (as defined in Section 280G of

            the Code) of the  Company  that  occurs  during  the  Term,  or (ii)

            nonqualified deferred compensation that does not comply with Section

            409A.

 

                  (i) Any Gross-Up  Payment or 409A  Gross-Up  Payment  shall be

            made no later than the end of the Executive's taxable year following

            the taxable year in which the Executive remits the related taxes.

 

      V.    Legal Fees. If, following a Change of Control,  the Company fails to

            perform any of its  obligations  under this Agreement or the Company

            or any other person  asserts the invalidity of any provision of this

            Agreement  and  the  Executive  incurs  any  costs  in  successfully

            enforcing  or defending  any of the  provisions  of this  Agreement,

            including legal fees and expenses and court costs, the Company shall

            reimburse the Executive for all such costs  incurred by him,  unless

            the trier of fact in such dispute  determines that the Executive has

            not  been at  least  partially  successful  in such  enforcement  or

            defense.  Any  reimbursement  under this  Section V shall be made no

            later than the end of calendar  year  following the calendar year in

            which such costs are incurred by the Executive.

 

                                      A-9

 

<PAGE>

 

                                    EXHIBIT B

 

                                     RELEASE

 

            This Release is made this _____ day of _______________,  ____ by and

between C&D Technologies, Inc. ("Employer") and Jeffrey A. Graves ("Employee").

 

                                    Recitals:

 

            WHEREAS,  the parties are parties to an  Employment  Agreement  (the

"Employment  Agreement") dated December 20, 2007, pursuant to which Employee was

employed by Employer; and

 

            WHEREAS,  Employee's  employment  and the Term,  as  defined  in the

Employment Agreement, have terminated; and

 

            WHEREAS, the execution and delivery of this Release by Employee is a

condition to the Employer's  obligations to pay certain compensation and provide

certain benefits to Employee under the Employment Agreement;

 

            NOW THEREFORE, the parties hereto, intending to be legally bound, in

consideration  of the mutual  promises and  undertakings  set forth  herein,  do

hereby agree as follows:

 

            1.    As of ___________________________, ____, Employee's employment

with  Employer  shall  terminate,   and  Employee  shall  have  no  further  job

responsibilities to perform for Employer; provided, however, that Employee shall

cooperate  with Employer in  transitioning  Employee's job  responsibilities  as

Employer shall reasonably  request,  provided that Employee shall be entitled to

receive reasonable compensation for any services rendered prior to such date and

shall  not be  obligated  to take  any  action  that  would  interfere  with any

subsequent  employment of Employee or otherwise  result in economic  hardship to

Employee.

 

            2.    Employer  shall pay and  provide to  Employee  the amounts and

benefits  contemplated  pursuant to Section 9 [and Exhibit A] of the  Employment

Agreement, less applicable deductions; provided however, the first payment shall

not be due and  payable  until ten days  after the  execution  by  Employee  and

delivery to Employer of this Release..

 

            3.    For and in  consideration  of the monies and benefits  paid to

Employee by Employer,  as more fully described in Section 2 above, and for other

good and valuable  consideration,  Employee hereby waives,  releases and forever

discharges  Employer,  its assigns,  predecessors,  successors,  and  affiliated

entities,  and  its  current  or  former  stockholders,   officers,   directors,

administrators,   agents,   servants   and   employees,   individually   and  as

representatives of the corporate entity (hereinafter collectively referred to as

"Releasees"), from any and all claims, suits, debts, dues, accounts, reckonings,

bonds,  bills,  specialties,   covenants,   contracts,  bonuses,  controversies,

agreements,  promises,  charges,  complaints,  damages, sums of money, interest,

attorney's fees and costs, or causes of action of any kind or nature  whatsoever

whether in law or equity,  including, but not limited to, all claims arising out

of his employment or termination of employment with Employer, such as all claims

for wrongful discharge, breach of contract, either

 

                                       B-1

 

<PAGE>

 

express or implied,  interference  with  contract,  emotional  distress,  fraud,

misrepresentation,  defamation,  claims  arising  under the Civil Rights Acts of

1964 and  1991,  as  amended,  the  Americans  With  Disabilities  Act,  the Age

Discrimination  in Employment Act (ADEA),  the National Labor Relations Act, the

Fair Labor  Standards Act, the Employee  Retirement  Income Security Act of 1974

(ERISA),  as amended,  the Family and Medical Leave Act, the Pennsylvania  Human

Relations Act, the Pennsylvania  Wage Payment & Collection Law, the Pennsylvania

Minimum Wage Act of 1968, the Pennsylvania  Equal Pay Law, and any and all other

claims   arising  under  federal,   state  or  local  law,   rule,   regulation,

constitution, ordinance or public policy whether known or unknown, arising up to

and including the date of execution of this Release; provided, however, that the

parties do not release  each other from any claim of breach of the terms of this

Release.  This  release of rights does not extend to claims that may arise after

the date of this Release, including without limitation, for payments or benefits

described in Section 2 of this  Release,  nor to claims under  employee  benefit

plans that are qualified under Section 401(a) of the Internal  Revenue Code, nor

to any rights of  indemnification  by the Company or  advancement of expenses to

which the  Employee is  otherwise  entitled,  nor to any equity  awards that are

outstanding on the date of  termination.  Employee agrees that Employee will not

initiate  any charge or  complaint  or  institute  any claim or lawsuit  against

Releasees or any of them based on any fact or  circumstance  occurring up to and

including  the date of the  execution by Employee of this  Release  based upon a

claim that is released hereunder.

 

            4.    Employee  agrees   that   the   payments    made   and   other

consideration  received  pursuant to this  Release are not to be construed as an

admission  of legal  liability by Releasees or any of them and that no person or

entity shall utilize this Release or the consideration received pursuant to this

Release as evidence of any admission of liability since Releasees expressly deny

liability.

 

            5.    Employee affirms that the only  consideration  for the signing

of this Release are the terms stated herein and in the Employment  Agreement and

that no other  promise or agreement of any kind has been made to Employee by any

person or entity whatsoever to cause Employee to sign this Release.

 

            6.    Employee and Employer  affirm that the  Employment   Agreement

and this Release set forth the entire agreement between the parties with respect

to  the  subject   matter   contained   herein  and   supersede   all  prior  or

contemporaneous agreements or understandings between the parties with respect to

the subject matter  contained  herein.  Further,  there are no  representations,

arrangements  or  understandings,  either oral or written,  between the parties,

which  are  not  fully  expressed  herein.   Finally,  no  alteration  or  other

modification  of this  Release  shall be  effective  unless  made in writing and

signed by both parties.

 

            7.    Employee acknowledges that Employee has been given a period of

at least 21 days within which to consider this Release.

 

            8.    Following the execution of this Release, Employee has a period

of seven  days from the date of  execution  to  revoke  this  Release,  and this

Release shall not become  effective or enforceable  until the revocation  period

has expired.

 

                                      B-2

 

<PAGE>

 

            9.    Employee  certifies that Employee has returned to Employer all

keys,  identification  cards, credit cards, computer and telephone equipment and

other property or information of Employer in Employee's possession,  custody, or

control including, but not limited to, any information contained in any computer

files  maintained  by  Employee  during  Employee's  employment  with  Employer.

Employee  certifies  that  Employee has not kept the  originals or copies of any

documents,  files,  or other  property of Employer  which  Employee  obtained or

received during Employee's employment with Employer.

 

            10.   Employee  acknowledges  and agrees that the  execution of this

Release does not supercede any of the  provisions  of the  Employment  Agreement

which  otherwise  survive the  termination  of  Employee's  employment  with the

Employer, including without limitation, Section 5, 6, 7 and 19 thereof.

 

            11.   Employee   acknowledges  that  Employer  advised  Employee  to

consult with an attorney prior to executing this Release.

 

            12.   Employee   affirms  that  Employee  has  carefully  read  this

Release,  that  Employee  fully  understands  the  meaning  and  intent  of this

document,  that Employee has signed this Release voluntarily and knowingly,  and

that Employee intends to be bound by the promises  contained in this Release for

the aforesaid consideration.

 

            IN WITNESS WHEREOF,  Employee and the authorized  representative  of

Employer have executed this Release on the dates indicated below:

 

                                          C&D TECHNOLOGIES, INC.

 

Dated:                                    By:

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

 

                                          Title:

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

 

Dated:

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

                                          Jeffrey A. Graves

 

                                      B-3

 

<PAGE>

 

                                   ENDORSEMENT

 

            I, Jeffrey A. Graves, hereby acknowledge that I was given 21 days to

consider the foregoing  Release and voluntarily  chose to sign the Release prior

to the expiration of the 21-day period.

 

            I  declare   under   penalty  of  perjury  under  the  laws  of  the

Commonwealth of Pennsylvania that the foregoing is true and correct.

 

            EXECUTED   this  ________  day  of  ___________________,  _____,  at

____________________________, Pennsylvania.

 

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

                                          Jeffrey A. Graves

 

                                      B-4

</TEXT>

</DOCUMENT>