PRER14C 1 v241967_prer14c.htm PRELIMINARY REVISED INFORMATION STATEMENT - PRER14C Unassociated Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14C INFORMATION
 
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
 
Check the appropriate box:
 
ý
Preliminary Information Statement
 
¨
Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2))
 
¨
Definitive Information Statement
 
C&D TECHNOLOGIES, INC.
(Name of Registrant as Specified in Its Charter)
 
Payment of Filing Fee (Check the appropriate box):
 
¨
No fee required.
 
o
Fee computed below per Exchange Act Rules 14c-5(g) and 0-11.
 
 
(1)
Title of each class of securities to which transaction applies:
 
 
 
Common Stock, par value $0.01 per share.
 
(2)
Aggregate number of securities to which transaction applies:
 
 
 
5,338,579 shares of Common Stock (which does not include (i) 9,857,984 shares of Common Stock owned by affiliates of Acquiror which will remain outstanding following the consummation of the transaction or (ii) 1,253,241 shares of Common Stock issuable upon exercise of outstanding options, as the weighted average exercise price of $14.47 per share of such options is in excess of the transaction purchase price of $9.75 per share). 
 
 
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11(set forth the amount on which the filing fee is calculated and state how it was determined):
 
 
 
The filing fee was determined based upon the sum of 5,338,579 shares of Common Stock multiplied by $9.75 per share.  The filing fee does not factor into account: (i) 9,857,984 shares of Common Stock owned by affiliates of Acquiror which will remain outstanding following the consummation of the transaction or (ii) 1,253,241 shares of Common Stock issuable upon exercise of outstanding options, as the weighted average exercise price of $14.47 per share of such options is in excess of the transaction purchase price of $9.75 per share.  In accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, the filing fee was determined by multiplying 0.0001146 by the sum of the preceding sentence.
 
 
(4)
Proposed maximum aggregate value of transaction:
 
 
 
$52,051,145.25.
 
 
(5)
Total fee paid:
 
 
 
$5,965.06.
 
 
x           Fee paid previously with preliminary materials.
 
¨           Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
1)           Amount Previously Paid:
 
2)           Form, Schedule or Registration Statement No.:
 
3)           Filing Party:
 
4)           Date Filed:
 
 
 

 
 
PRELIMINARY COPY—SUBJECT TO COMPLETION, DATED DECEMBER 1, 2011
 
 
 
C&D TECHNOLOGIES, INC.
1400 Union Meeting Road
Blue Bell, Pennsylvania 19422
 
NOTICE OF WRITTEN CONSENT AND APPRAISAL RIGHTS
AND
INFORMATION STATEMENT
 
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
 
Dear Stockholders:
 
This notice of written consent and appraisal rights and the accompanying information statement are being furnished to the holders of common stock of C&D Technologies, Inc., which we refer to as “C&D,” in connection with the Agreement and Plan of Merger, dated as of October 3, 2011, among C&D, Angel Holdings LLC, a limited liability company organized under the laws of Delaware, which we refer to as “Acquiror,” and Angel Acquisition Corp., a Delaware corporation and wholly owned subsidiary of Acquiror, which we refer to as “Merger Sub.”  We refer to the Agreement and Plan of Merger as the “Merger Agreement” and to the merger of Merger Sub with and into C&D that is contemplated by the Merger Agreement as the “Merger.”  Upon completion of the Merger, each share of common stock of C&D issued and outstanding immediately prior to the effective time of the Merger, except for shares (i) held by stockholders who are entitled to demand and who properly demand, and do not withdraw or lose, appraisal rights for such shares under Section 262 of the General Corporation Law of the State of Delaware (the “DGCL”) and (ii) owned by C&D as treasury stock or by Acquiror, Merger Sub, the Angelo Gordon Entities (as defined below) or any wholly owned subsidiary of C&D, will be canceled and converted automatically into the right to receive $9.75 in cash, without interest and less any required withholding taxes.  We refer to this per share cash payment as the “Merger Consideration.”  A copy of the Merger Agreement is attached as Annex A to the accompanying information statement.
 
Acting upon the recommendation of a special committee of independent, disinterested directors of C&D, C&D’s board of directors (with Todd Arden, who is a Managing Director at Angelo, Gordon & Co., L.P., an affiliate of Acquiror and Merger Sub, taking no part in the vote) determined that the Merger Agreement and the transactions contemplated thereby (including the Merger) are fair to, and in the best interests of, the stockholders of C&D, other than stockholders affiliated with Acquiror, approved and declared advisable the Merger Agreement and recommended that C&D’s stockholders adopt the Merger Agreement.
 
The adoption of the Merger Agreement by C&D’s stockholders required the affirmative vote or written consent of the holders of a majority of the outstanding shares of our common stock. On October 3, 2011, AG MM, L.P., AG Capital Recovery Partners VI, L.P., AG Capital Recovery Partners VII, L.P., AG Eleven Partners, L.P., AG Garden Partners, L.P., Nutmeg Partners, L.P., AG Princess, L.P., AG CNG Funds, L.P., PHS Patriot Fund, L.P., AG Super Fund International Partners, L.P. and AG Super Fund, L.P. (collectively, the “Angelo Gordon Entities”), which on such date owned approximately 65% of the outstanding shares of our common stock, delivered the Written Consent adopting the Merger Agreement. As a result, no further action by any C&D stockholder is required to adopt the Merger Agreement and C&D has not and will not be soliciting your proxy or vote in favor of the adoption of the Merger Agreement and does not intend to call a stockholders meeting for purposes of voting on the adoption of the Merger Agreement.  Pursuant to Rule 14c−2 under the Securities Exchange Act of 1934, as amended, the Merger may not be effective until at least 20 calendar days after the date the accompanying information statement is sent to our stockholders.  A copy of the Written Consent is attached as Annex B to the accompanying information statement.  This notice and the accompanying information statement are being mailed to the persons (other than the persons who executed the Written Consent) who were stockholders of C&D on October 3, 2011, the date the written consent signed by the holders of a sufficient number of shares of common stock to adopt the Merger Agreement was delivered to C&D. This notice and the accompanying information statement shall constitute notice to you from C&D of the action by written consent taken by the Angelo Gordon Entities contemplated by Section 228 of the DGCL.
 
 
 

 
 
Under Section 262 of the DGCL, if the Merger is completed, subject to compliance with the requirements of Section 262 of the DGCL, holders of shares of our common stock, other than the Angelo Gordon Entities, will have the right to seek an appraisal for, and be paid the “fair value” of, their shares of our common stock (as determined by the Court of Chancery of the State of Delaware) instead of receiving the Merger Consideration. In order to exercise your appraisal rights, you must submit a written demand for an appraisal no later than 20 calendar days after the mailing of this information statement, or [_____], 2011, and comply with the other procedures set forth in Section 262 of the DGCL, which are summarized in the accompanying information statement. A copy of Section 262 of the DGCL is attached to the accompanying information statement as Annex D.  This notice and the accompanying information statement shall constitute notice to you from C&D of the availability of appraisal rights under Section 262 of the DGCL.
 
We urge you to read the entire information statement carefully. Please do not send in your stock certificates at this time. If the Merger is completed, you will receive instructions regarding the surrender of your stock certificates and payment for your shares of our common stock.
 
By order of the board of directors,
 
/s/ David L. Treadwell
David L. Treadwell
Chairman of the Board
 
Neither the U.S. Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the Merger, passed upon the fairness of the Merger or passed upon the adequacy or accuracy of the disclosures in this notice or the accompanying information statement. Any representation to the contrary is a criminal offense.
 
This notice of written consent and appraisal rights and the accompanying information statement are dated [_____], 2011 and are first being mailed to stockholders on [_____], 2011.
 
 
 

 
 
TABLE OF CONTENTS
 
Page
 
SUMMARY
1
The Parties to the Merger
1
Effects of the Merger; Merger Consideration
2
Required Stockholder Approval for the Merger
2
C&D’s Reasons for the Merger
2
Position of C&D as to the Fairness of the Merger
2
Position of Acquiror, Merger Sub and the Angelo Gordon Entities as to the Fairness of the Merger
3
Opinion of Perella Weinberg, Financial Advisor to the Special Committee 3
Financing for the Merger
3
Equity Financing
4
Interests of C&D’s Directors and Officers in the Merger
4
The Merger Agreement
4
Conditions to the Merger
4
Termination of the Merger Agreement
5
When the Merger will be Consummated
5
Further Actions and Efforts; Other Agreements
5
Material United States Federal Income Tax Consequences of the Merger to Our Stockholders
5
Procedure for Receiving Merger Consideration
5
Market Price of Common Stock
6
Appraisal Rights
6
Litigation Related to the Merger
6
   
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
7
   
SPECIAL FACTORS
8
Background of the Merger
8
C&D’s Reasons for the Merger
17
Position of C&D as to the Fairness of the Merger 19
Effects of the Merger 19
Opinion of Perella Weinberg, Financial Advisor to the Special Committee 20
Position of Acquiror, Merger Sub and the Angelo Gordon Entities as to the Fairness of the Merger
26
Houlihan Lokey Presentation 26
Purposes and Reasons of Acquiror, Merger Sub and the Angelo Gordon Entities for the Merger
27
Plans for C&D
28
Summary of C&D Management Projections
28
Financing for the Merger
32
Equity Financing
32
Payment of Merger Consideration and Surrender of Stock Certificates
32
Interests of C&D’s Directors and Officers in the Merger
33
Directors and Officers Equity Interests in the Merger 33
Severance Benefits Pursuant to Named Executive Officer Employment Agreements
34
Golden Parachute Compensation Table 35
Employment Agreement with David J. Anderson
36
Indemnification and Insurance
36
Special Committee Compensation
37
Agreements with the Angelo Gordon Entities
37
Regulatory Matters
37
Fees and Expenses
37
Material United States Federal Income Tax Consequences of the Merger to Our Stockholders
38
Exchange of Common Stock for Cash
38
Information Reporting and Backup Withholding
38
Litigation Related to the Merger
38
   
QUESTIONS AND ANSWERS ABOUT THE MERGER
39
   
THE PARTIES TO THE MERGER
41
   
THE MERGER AGREEMENT
45
Explanatory Note Regarding the Merger Agreement
45
Effects of the Merger; Directors and Officers; Certificate of Incorporation; Bylaws
45
Closing; When the Merger Becomes Effective
45
Merger Consideration
46
 
 
i

 
 
Conversion of Our Common Stock
46
Treatment of Stock Options and SARs
46
Procedure for Receiving Merger Consideration
46
Representations and Warranties
47
Conduct of Business Pending the Merger
49
Required Stockholder Approval for the Merger
51
Communications to Stockholders
51
Further Actions and Efforts; Other Agreements
51
Indemnification and Insurance
52
Conditions to the Merger
53
Conditions to Each Party’s Obligations
53
Conditions to Obligations of Acquiror and Merger Sub
53
Conditions to Obligations of C&D
53
Amendments; Waivers
54
Termination of the Merger Agreement
54
Effect of Termination
55
Termination Fees and Expenses
55
Fees
55
Expenses
55
Remedies; Third-Party Beneficiaries
55
No Provisions for Unaffiliated C&D Stockholders 56
   
MARKET PRICES OF COMMON STOCK AND  DIVIDEND INFORMATION
57
   
APPRAISAL RIGHTS
58
   
SUMMARY FINANCIAL INFORMATION 61
   
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
63
   
WHERE YOU CAN FIND MORE INFORMATION
65
   
ANNEX A: AGREEMENT AND PLAN OF MERGER
A-1
   
ANNEX B: WRITTEN CONSENT
B-1
   
ANNEX C: OPINION OF PERELLA WEINBERG, FINANCIAL ADVISOR TO THE SPECIAL COMMITTEE
C-1
   
ANNEX D: SECTION 262 OF THE GENERAL COPORATION LAW OF THE STATE OF DELAWARE
D-1
 
 
ii

 
 
SUMMARY
 
This summary highlights material information from this information statement. It may not contain all of the information that is important to you with respect to the Merger. You should read carefully this entire information statement, together with the Annexes, and the other documents to which this information statement refers to understand fully the Merger and the transactions contemplated by the Merger Agreement. See “Where You Can Find More Information” beginning on page 65. We have included page references in this summary directing you to a more complete description of those items.
 
Unless otherwise indicated or unless the context requires otherwise: all references in this information statement to “C&D,” “we,” “our” and “us” refer to C&D Technologies, Inc. and, where appropriate, its subsidiaries; all references to “Acquiror” refer to Angel Holdings LLC; all references to “Merger Sub” refer to Angel Acquisition Corp.; unless the context requires otherwise, all references to the “Merger Agreement” refer to the Agreement and Plan of Merger, dated as of October 3, 2011, among Acquiror, Merger Sub and C&D, as it may be amended from time to time, a copy of which is attached as Annex A to this information statement; all references to the “Merger” refer to the merger of Merger Sub with and into C&D contemplated by the Merger Agreement; all references to the “Merger Consideration” refer to the per share merger consideration of $9.75 in cash, without interest and subject to reduction for any required withholding taxes, contemplated to be received by the holders of our Common Stock pursuant to the Merger Agreement; and all references to “Common Stock” refer to our common stock, par value $0.01 per share.
 
The Parties to the Merger (page 41)
 
C&D.  C&D is a leading manufacturer, marketer and distributor of electrical power storage systems for the standby power storage market. C&D primarily manufactures and markets integrated reserve power systems and components for the standby power market, which include telecommunications, uninterruptible power supply cable services and utilities and renewable energies. Integrated reserve power systems monitor and regulate electric power flow and provide backup power in the event of a primary power loss or interruption. C&D also produces the individual components of these systems including reserve batteries, power rectifiers, system monitors, power boards and chargers.  Major applications of these products include wireless and wireline telephone infrastructure, cable television signal powering, corporate data center powering, computer network backup for use during power outages and renewable energy integration.  C&D markets its products through independent manufacturer’s representatives, national and global distributors, specialty resellers and its own sales personnel to end users and original equipment manufacturers.  C&D’s principal executive offices are located at 1400 Union Meeting Road, Blue Bell, Pennsylvania 19422 and its telephone number is (215) 619-2700.  C&D’s website is www.cdtechno.com.  Prior to December 17, 2010, our Common Stock was listed on the New York Stock Exchange. Currently, our Common Stock is traded on the over the counter market under the symbol “CHHP.PK.” Additional information about C&D is included in documents incorporated by reference into this information statement. See the section entitled “Where You Can Find More Information” beginning on page 65.
 
Acquiror.  Acquiror is a newly formed Delaware limited liability company that is controlled by private investment funds affiliated with Angelo, Gordon & Co., L.P., a Delaware limited partnership (“Angelo Gordon”).  Acquiror was formed solely for the purpose of entering into the Merger Agreement and completing the transactions contemplated by the Merger Agreement, including the Merger.  Acquiror has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the transactions contemplated by the Merger Agreement.  Upon completion of the Merger, C&D will be a direct wholly owned subsidiary of Acquiror.
 
Merger Sub.  Merger Sub is a Delaware corporation and was incorporated on behalf of Acquiror solely for the purpose of entering into the Merger Agreement and completing the transactions contemplated by the Merger Agreement, including the Merger. Merger Sub is an indirect wholly owned subsidiary of Acquiror and has not carried on any activities to date, except for activities incidental to its incorporation and activities undertaken in connection with the transactions contemplated by the Merger Agreement. Upon completion of the Merger, Merger Sub will cease to exist.
 
 
1

 
 
Angelo Gordon Entities.  Each of the Angelo Gordon Entities is a Delaware limited partnership and is principally engaged in the business of investing in debt securities and other credit investments.  The general manager of AG MM, L.P. is AG MM, LLC, a Delaware limited liability company.  The general partner of AG Capital Recovery Partners VI, L.P. is AG Capital Recovery VI LLC, a Delaware limited liability company.  The general partner of AG Capital Recovery Partners VII, L.P. is AG Capital Recovery VII LLC, a Delaware limited liability company.  The general partner of AG Eleven Partners, L.P. is AG Eleven LLC, a Delaware limited liability company.  The general partner of AG Garden Partners, L.P. is AG Super LLC, a Delaware limited liability company.  The general partner of Nutmeg Partners, L.P. is Nutmeg LLC, a Delaware limited liability company.  The general partner of AG Princess, L.P. is AG Princess LLC, a Delaware limited liability company.  The general partner of AG CNG Funds, L.P. is AG CNG LLC, a Delaware limited liability company.  The general partner of AG Super Fund International Partners, L.P. is AG Super Fund International LLC, a Delaware limited liability company.  The general partner of AG Super Fund, L.P. is AG Super Fund LLC, a Delaware limited liability company.  Each of the foregoing entities is ultimately controlled by Angelo Gordon.  Angelo Gordon is a privately-held registered investment advisor dedicated to alternative investing. The firm was founded in 1988 and currently manages approximately $23 billion.  The principal executive offices of each of the Angelo Gordon Entities, Angelo Gordon and each of the other affiliated entities described above are located at 245 Park Avenue, 26th Floor, New York, NY 10167, and their telephone number is (212) 692-2000.
 
Effects of the Merger; Merger Consideration (pages 45-46)
 
On October 3, 2011, C&D entered into the Merger Agreement with Acquiror and Merger Sub. Upon the terms and subject to the conditions set forth in the Merger Agreement, and in accordance with Delaware law, at the effective time of the Merger, Merger Sub will merge with and into C&D, with C&D continuing as the surviving corporation. As a result, C&D will become a direct wholly owned subsidiary of Acquiror following the effective time of the Merger. You will have no equity interest in C&D or Acquiror after the effective time of the Merger. At the effective time of the Merger:
 
 
each share of Common Stock issued and outstanding immediately prior to the effective time of the Merger (except those shares held by any of our stockholders who are entitled to and who properly demand, and do not withdraw or lose, appraisal rights under Section 262 of the General Corporation Law of the State of Delaware (the “DGCL”) and shares owned by C&D as treasury stock or by Acquiror, Merger Sub, the Angelo Gordon Entities or any wholly owned subsidiary of C&D (such shares, the “Excluded Shares”)) will be canceled and converted automatically into the right to receive the Merger Consideration;
 
 
each option to purchase shares of Common Stock (a “Stock Option”) that is outstanding immediately prior to the effective time of the Merger, whether or not then vested or exercisable, will be canceled and extinguished and the holder thereof will be entitled to receive an amount in cash equal to the product of (a) the number of shares of Common Stock subject to such Stock Option and (b) the excess (if any) of the Merger Consideration over the exercise price per share of such Stock Option; and
 
 
each stock appreciation right (a “SAR”) that is outstanding immediately prior to the effective time of the Merger, whether or not then vested, will be canceled and extinguished and the holder thereof will be entitled to receive an amount in cash equal to the product of (a) the number of shares of Common Stock subject to such SAR and (b) the excess (if any) of the Merger Consideration over the exercise price per share of such SAR.
 
We encourage you to read the Merger Agreement in its entirety because it is the legal document that governs the Merger.  The Merger Agreement is attached as Annex A to this information statement.
 
Required Stockholder Approval for the Merger (page 51)
 
The adoption of the Merger Agreement by our stockholders required the affirmative vote or written consent of C&D stockholders holding a majority of our outstanding shares of Common Stock. On October 3, 2011, the Angelo Gordon Entities, which hold a majority of our outstanding Common Stock and held a majority of our outstanding Common Stock as of the close of business on October 2, 2011, which was the record date established by the C&D Board for the determination of the stockholders of C&D entitled to consent to corporate action in writing without a meeting with respect to the adoption of the Merger Agreement, delivered a written consent adopting the Merger Agreement (the “Written Consent”). A copy of the Written Consent is attached as Annex B to this information statement. No further action by any other C&D stockholder is required in connection with the adoption of the Merger Agreement. As a result, C&D has not and will not be soliciting your proxy or vote in favor of the adoption of the Merger Agreement and does not intend to call a stockholders meeting for purposes of voting on the Merger. No vote by the equityholders of Acquiror is required to complete the Merger.
 
Special Factors (page 8)
 
C&D’s Reasons for the Merger (page 17)
 
After consideration of various factors as discussed under “Special Factors—C&D’s Reasons for the Merger” beginning on page 17, the Board of Directors of C&D (the “C&D Board”), acting upon the recommendation of a special committee of independent, disinterested directors of the C&D Board (the “Special Committee”), and after consultation with its legal advisor and the Special Committee’s financial and legal advisors (and with Todd Arden, who is a Managing Director at Angelo Gordon, an affiliate of Acquiror and Merger Sub, taking no part in the vote), determined that the Merger Agreement and the transactions contemplated thereby are fair to, advisable and in the best interests of C&D and the unaffiliated stockholders of C&D, approved the Merger Agreement and the Merger and recommended that C&D’s stockholders adopt the Merger Agreement.
 
For a discussion of the material factors considered by the Special Committee and the C&D Board in reaching their conclusions, see “Special Factors—C&D’s Reasons for the Merger” beginning on page 17.
 
Position of C&D as to the Fairness of the Merger (page 19)
 
For the reasons set forth above under “C&D’s Reasons for the Merger,” C&D reasonably believes that the Merger and the transactions contemplated by the Merger Agreement are advisable and in the best interests of C&D and the unaffiliated stockholders of C&D, both from a procedural and substantive perspective.
 
 
 
2

 
 
Position of Acquiror, Merger Sub and the Angelo Gordon Entities as to the Fairness of the Merger (page 26)
 
Each of Acquiror, Merger Sub and the Angelo Gordon Entities believes that the Merger is procedurally and substantively fair to the unaffiliated stockholders of C&D. See “Special Factors—Position of Acquiror, Merger Sub and the Angelo Gordon Entities as to the Fairness of the Merger” beginning on page 26.
 
Opinion of Perella Weinberg, Financial Advisor to the Special Committee (page 20 and Annex C)
 
Perella Weinberg Partners LP, which we refer to as “Perella Weinberg,” rendered its oral opinion on October 2, 2011, subsequently confirmed in writing, to the Special Committee to the effect that, as of such date, and based upon and subject to the various assumptions and limitations set forth in the opinion, the Merger Consideration of $9.75 per share to be received by holders of Common Stock pursuant to the Merger Agreement (other than holders of Excluded Shares) was fair from a financial point of view to such holders.
 
The full text of Perella Weinberg’s written opinion, dated October 2, 2011, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken by Perella Weinberg, is attached as Annex C and is incorporated by reference herein. The opinion does not address the underlying business decision of C&D to enter into the Merger Agreement or the relative merits of the Merger as compared with any other strategic alternative which may be available to C&D. The opinion was not intended to be and does not constitute a recommendation to any holder of Common Stock as to how such holder should act with respect to the proposed Merger or any other matter and does not in any manner address the prices at which the Common Stock will trade at any time.  In addition, Perella Weinberg expressed no opinion as to the fairness of the Merger to, or any consideration received in connection with the Merger by, the Angelo Gordon Entities or the holders of any other class of securities, creditors or other constituencies of C&D. Perella Weinberg provided its opinion only for the information and assistance of the Special Committee in connection with, and for the purposes of its evaluation of, the Merger, and it may not be relied upon by any other person. This summary is qualified in its entirety by reference to the full text of the opinion.
 
Pursuant to the terms of the engagement letter between Perella Weinberg and C&D, C&D agreed to pay to Perella Weinberg a fee of $1.5 million for its services, of which $1.25 million became payable upon Perella Weinberg’s delivery of its opinion. In addition, C&D agreed to reimburse Perella Weinberg for its reasonable expenses, including attorneys’ fees and disbursements, and to indemnify Perella Weinberg and related persons against various liabilities, including certain liabilities under the federal securities laws. During the two-year period prior to the date of Perella Weinberg’s opinion, no material relationship existed between Perella Weinberg and its affiliates and C&D or Acquiror or their respective affiliates pursuant to which compensation was received by Perella Weinberg or its affiliates.
 
Financing for the Merger (page 32)
 
Acquiror has obtained the equity financing commitment described below. The funding under this commitment is subject to conditions. Acquiror has represented to C&D that, if the financing is funded in accordance with the equity financing letter described herein, it will have sufficient committed equity to pay the Merger Consideration in respect of all shares of Common Stock (other than those shares owned by the Angelo Gordon Entities), all other amounts due in connection with the Merger and all fees and expenses required to be paid by Acquiror, Merger Sub and C&D in connection with the Merger. The obligations of Acquiror and Merger Sub under the Merger Agreement, including their obligations to consummate the Merger, are not subject to or conditioned upon the receipt of any financing, including the equity financing.
 
 
3

 
 
Equity Financing
 
Acquiror has entered into a letter agreement, which we refer to as the “equity financing letter,” with AG CNG Funds, L.P., AG MM, L.P., AG Capital Recovery Partners VI, L.P., AG Capital Recovery Partners VII, L.P., AG Eleven Partners, L.P., AG Garden Partners, L.P., AG Super Fund International Partners, L.P., Nutmeg Partners, L.P., AG Princess, L.P. and AG Super Fund, L.P. (collectively, the “Investors”), dated as of October 3, 2011, pursuant to which the Investors have committed, upon the terms and subject to the conditions set forth in the equity financing letter, to make or secure capital contributions to Acquiror for an aggregate of up to $53,833,274.65. Each Investor may assign all or a portion of its equity commitment to an affiliate, although no such assignment will affect the Investor’s commitment to make or secure capital contributions pursuant to the equity financing letter.
 
The Investors’ equity commitments are subject to the satisfaction of the conditions to Acquiror’s and Merger Sub’s obligations to effect the consummation of the Merger as set forth in the Merger Agreement. The equity financing letter will terminate upon the earliest to occur of (i) the consummation of the Merger (at which time each Investor’s obligation pursuant to the equity financing letter will be discharged) and (ii) the termination of the Merger Agreement in circumstances where Acquiror is not required to pay to C&D the amounts described under “The Merger Agreement—Termination Fees and Expenses” beginning on page 55.
 
Prior to the consummation of the Merger and subject to the terms and conditions of the equity financing letter, C&D is entitled to seek specific performance to cause Acquiror to draw down the full proceeds of the equity financing contemplated by the equity financing letter in the event that conditions to Acquiror’s and Merger Sub’s obligations to consummate the Merger have been satisfied.
 
Interests of C&D’s Directors and Officers in the Merger (page 33)
 
You should be aware that certain of our directors and executive officers have interests in the Merger that may be different from, or in addition to, your interests as a stockholder and that may present actual or potential conflicts of interest.  These interests include the following:
 
 
the cash-out of all vested and unvested Stock Options held by our executive officers and directors;
 
 
severance enhancements for certain executive officers;
 
 
continued indemnification and insurance coverage for our current and former directors and executive officers for six years following the consummation of the Merger; and
 
 
the affiliation of certain directors with the Angelo Gordon Entities.
 
The Special Committee and the C&D Board were aware of these interests and considered, among other matters, that these interests may be different from, or in addition to, the interests of our stockholders generally in making their respective determinations regarding the Merger Agreement. The interests of C&D’s directors and executive officers are described more fully under “Special Factors—Interests of C&D’s Directors and Officers in the Merger” beginning on page 33.
 
The Merger Agreement (page 45 and Annex A)
 
Conditions to the Merger (page 53)
 
The obligations of each of Acquiror, Merger Sub and C&D to effect the Merger are subject to the satisfaction or waiver (to the extent allowable under applicable law) at or prior to the effective time of the Merger of the following conditions:
 
 
the adoption of the Merger Agreement by the C&D stockholders, which occurred when the Angelo Gordon Entities executed and delivered the Written Consent on October 3, 2011, as described above; and
 
 
the absence of legal prohibitions on the consummation of the Merger.
 
 Acquiror and Merger Sub will not be obligated to effect the Merger unless the following additional conditions are satisfied or waived at or prior to the effective time of the Merger:
 
 
the accuracy of the representations and warranties of C&D and compliance by C&D with its obligations under the Merger Agreement, subject to certain materiality qualifiers;
 
 
4

 
 
 
the delivery of certificates signed by a senior executive officer of C&D on behalf of C&D certifying as to matters described in the immediately preceding bullet point; and
 
 
the total number of shares of Common Stock with respect to which appraisal rights shall have been exercised does not exceed five percent (5%) of the issued and outstanding shares of Common Stock as of the closing date of the Merger.
 
C&D will not be obligated to effect the Merger unless the following additional conditions are satisfied or waived at or prior to the effective time of the Merger:
 
 
the accuracy of the representations and warranties of Acquiror and Merger Sub and compliance by Acquiror and Merger Sub with their respective obligations under the Merger Agreement, subject to certain materiality qualifiers; and
 
 
the delivery of certificates signed by a senior executive officer of Acquiror on behalf of Acquiror and Merger Sub certifying as to matters described in the immediately preceding bullet point.
 
We cannot be certain when, or if, the conditions to the Merger will be satisfied or, where permissible, waived, or that the Merger will be completed.
 
Termination of the Merger Agreement (page 54)
 
The Merger Agreement may be terminated at any time upon the mutual written consent of C&D, Acquiror and Merger Sub (with respect to C&D, only pursuant to a resolution adopted by the Special Committee). Other circumstances under which the Merger Agreement may be terminated are described under “The Merger Agreement—Termination of the Merger Agreement” beginning on page 54.
 
When the Merger will be Consummated (page 45)
 
We anticipate consummating the Merger in the fourth calendar quarter of 2011, subject to the satisfaction of the closing conditions set forth in the Merger Agreement.
 
Further Actions and Efforts; Other Agreements (page 51)
 
Each of C&D, Acquiror and Merger Sub have agreed, subject to certain exceptions, to (i) cooperate and use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective as promptly as practicable the Merger and the other transactions contemplated by the Merger Agreement and (ii) use commercially reasonable efforts to, among other things, obtain all necessary waivers, consents and approvals from third parties and governmental entities and lift or rescind any order adversely affecting the ability of the parties to consummate the Merger.
 
The Merger Agreement contains additional agreements among the parties relating to matters incidental to the Merger and the other transactions contemplated by the Merger Agreement.
 
Material United States Federal Income Tax Consequences of the Merger to Our Stockholders (page 38)
 
If you are a U.S. Holder (as defined in “Material United States Federal Income Tax Consequences of the Merger to Our Stockholders” below), the exchange of your shares of our Common Stock pursuant to the Merger will be a taxable transaction for United States federal income tax purposes.
 
Holders of shares of our Common Stock should consult their tax advisors about the United States federal, state, local and foreign tax consequences of the Merger.
 
See “Material United States Federal Income Tax Consequences of the Merger to Our Stockholders” beginning on page 38.
 
Procedure for Receiving Merger Consideration (page 46)
 
As soon as reasonably practicable after the effective time of the Merger, the paying agent for the Merger will mail a letter of transmittal and instructions to C&D stockholders of record as of the effective time of the Merger.  The letter of transmittal and instructions will tell you how to surrender your stock certificates in exchange for the Merger Consideration. If your shares of Common Stock are held in “street name” by your bank, brokerage firm or other nominee, you should contact your bank, brokerage firm or other nominee to determine how to effect the surrender of your “street name” shares of Common Stock in exchange for the Merger Consideration.  You should not forward your share certificates to the paying agent without a letter of transmittal.
 
 
5

 
 
Market Price of Common Stock (page 57)
 
Prior to December 17, 2010, our Common Stock was listed on the New York Stock Exchange. Currently, our Common Stock is traded on the over the counter market under the symbol “CHHP.PK.”  On November 30, 2011, the most recent practicable date prior to the date of this information statement, the closing sale price of our Common Stock on the over the counter market was $9.70 per share.
 
Appraisal Rights (page 58)
 
Holders of our Common Stock, other than the Angelo Gordon Entities, may elect to exercise their appraisal rights to receive, in lieu of the Merger Consideration, the judicially determined “fair value” of their shares, which could be more or less than, or the same as, the Merger Consideration, but only if they comply with the procedures required under Section 262 of the DGCL.  In order to properly exercise these rights, you must make a written demand for appraisal on or prior to [_____], 2011, which is the date that is 20 calendar days following the mailing of this information statement, and otherwise comply with the procedures set forth in Section 262 of the DGCL for exercising and perfecting appraisal rights.  For a summary of these procedures, see “Appraisal Rights” beginning on page 58.  A copy of Section 262 of the DGCL is also included as Annex D to this information statement. Failure to follow the procedures set forth in Section 262 of the DGCL will result in the loss of appraisal rights.
 
Litigation Related to the Merger (page 38)
 
Beginning on June 29, 2011, following the announcement on June 16, 2011 by Acquiror of its proposal to acquire the outstanding shares of Common Stock not owned by it for cash, three putative stockholder class action lawsuits were filed in the Delaware Court of Chancery, referred to herein as the “Delaware Actions,” and another putative stockholder class action lawsuit was filed in the Court of Common Pleas of Montgomery County, Pennsylvania, referred to herein as the “Pennsylvania Action,”  challenging the proposed Merger.  On August 19, 2011, counsel to the plaintiffs in the Delaware Actions submitted a proposed order to the court seeking consolidation of the Delaware Actions into a single action, referred to herein as the “Consolidated Delaware Action.”  On September 8, 2011, the Delaware Court of Chancery granted that request for consolidation.  On October 11, 2011, an amended class action complaint was filed in the Consolidated Delaware Action, naming as defendants C&D, each current member of the C&D Board and Acquiror.
 
On October 26, 2011, a consolidated second amended class action complaint was filed in the Consolidated Delaware Action.  The consolidated second amended class action complaint asserts breach of fiduciary duty claims against the current members of C&D’s Board and the Acquiror, and aiding and abetting breach of fiduciary duty claims against C&D, Angelo Gordon & Co., L.P., Acquiror and Merger Sub premised principally on allegations that:  1) the individual defendants and the Acquiror breached their fiduciary duties under Delaware law because the Merger Agreement was executed without meaningful input from C&D’s public stockholders, 2) the consideration the Acquiror is proposing to provide to C&D’s public stockholders for their Common Stock is inadequate, and 3) the Form PRE 14C (filed by C&D on October 19, 2011) failed to disclose material information.  At the same time that the consolidated second amended class action complaint was filed, Plaintiffs moved for a preliminary injunction to enjoin the Merger and for expedition of the proceedings.   On November 3, 2011, the Delaware Court of Chancery denied Plaintiffs’ motion for expedition of the proceedings.  In light of the Court’s November 3, 2011 ruling, Plaintiffs have submitted a proposed amended order of consolidation and appointment of co-lead counsel.  Pursuant to that proposed amended order, which defendants do not oppose, defendants shall answer or otherwise move with respect to the consolidated second amended class action complaint within 45 days of the closing of the Merger.
 
 
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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
 
This information statement and the documents to which we refer you in this information statement contain forward-looking statements that involve numerous risks and uncertainties which may be difficult to predict. The statements contained in this communication that are not purely historical are forward-looking statements, including, without limitation, statements regarding projections of total revenue, EBITDA, Adjusted EBITDA, net income, free cash flow or other financial items, and the expected timing of the closing of the proposed Merger. The projections by C&D’s management included in this information statement reflect assumptions and estimates by the management of C&D. Many of these assumptions and estimates are driven by factors beyond the control of C&D, and it can be expected that one or more of them will not materialize as expected or will vary significantly from actual results. Accordingly, you should not place undue reliance on these projections or any of the other forward-looking statements in this information statement, which are likewise subject to numerous uncertainties. All forward-looking statements included in this communication are based on information available to C&D on the date hereof. In some cases, you can identify forward-looking statements by terminology such as “may,” “can,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “intends,” “believes,” “estimates,” “predicts,” “potential,” “targets,” “goals,” “projects,” “outlook,” “continue,” “preliminary,” “guidance,” or variations of such words, similar expressions, or the negative of these terms or other comparable terminology.
 
These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about C&D’s industry, the beliefs and certain assumptions made by C&D’s management, many of which, by their nature, are inherently uncertain and beyond C&D’s control. Accordingly, readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict, including, without limitation, the expected closing date of the Merger; disruption from the Merger making it more difficult to maintain business and operational relationships; the risk that unexpected costs will be incurred; changes in economic conditions, political conditions, trade protection measures, licensing requirements and tax matters in the foreign countries in which C&D does business; the possibility that the Merger does not close, including, but not limited to, due to the failure to satisfy the closing conditions; the outcome of pending or potential litigation; and C&D’s ability to accurately predict future market conditions. Additionally, the unaudited prospective financial information by C&D management included in this information statement reflects assumptions and estimates by the management of C&D as of the date specified in the unaudited prospective financial information or the date of any document incorporated by reference in this information statement. Many of these assumptions and estimates are driven by factors beyond the control of C&D, and it can be expected that one or more of them will not materialize as expected or will vary significantly from actual results. No independent accountants have provided any assurance with respect to the unaudited prospective financial information. Moreover, except as may be required by the federal securities laws, C&D does not undertake any obligation to update the unaudited prospective financial information and does not intend to do so. For the foregoing reasons, as well as the bases and assumptions on which the unaudited prospective financial information was compiled, the inclusion of C&D’s unaudited prospective financial information in this information statement should not be regarded as an indication that such information will be predictive of future results or events nor construed as financial guidance, and it should not be relied on as such or for any other purpose whatsoever.
 
Additional factors that may affect future results are contained in C&D’s Annual Report on Form 10-K and C&D’s other filings with the Securities and Exchange Commission (the “SEC”), which are available at the SEC’s website at www.sec.gov.  Many of these factors are beyond the control of C&D.
 
The cautionary statements contained or incorporated by reference into this information statement should be considered in connection with any subsequent written or oral forward-looking statements that may be issued by C&D or persons acting on C&D’s behalf.  Except for C&D’s ongoing obligations to disclose certain information as required by the federal securities laws, C&D undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this information statement or to reflect the occurrence of unanticipated events.
 
The forward-looking statements contained in this information statement made in connection with the transactions contemplated by the Merger Agreement are excluded from the safe harbor protection provided by the Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended.  In addition, the forward-looking statements made in periodic reports incorporated by reference into this information statement are excluded from the safe harbor protection provided by the Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended.
 
 
 
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SPECIAL FACTORS
 
Background of the Merger
 
In September 2010, in order to address an immediate need for liquidity in light of its anticipated inability to make required payments under its outstanding indebtedness, C&D proposed certain financial restructuring alternatives (the “Restructuring”).  Under the Restructuring, C&D would offer to exchange all of its outstanding 5.25% Convertible Senior Notes due 2025 (the “2005 Notes”) and 5.50% Convertible Senior Notes due 2026 (the “2006 Notes” and together with the 2005 Notes, the “Notes”) for up to 95% of its Common Stock (the “Exchange Offer”) or, in the event that the conditions to the Exchange Offer were not satisfied or waived, C&D would commence a voluntary case under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) and seek court approval of a prepackaged plan of reorganization (the “Prepackaged Plan”).
 
In order to gain support for the Restructuring, C&D initiated discussions with two holders of a majority of the aggregate principal amount of the outstanding Notes, including Angelo Gordon (the “Supporting Noteholders”).  Following these discussions, C&D and the Supporting Noteholders entered into a Restructuring Support Agreement, dated as of September 14, 2010 (the “Support Agreement”).  The Support Agreement, among other things, provided that the Supporting Noteholders would (i) support and use their commercially reasonable efforts to complete the Restructuring pursuant to the Exchange Offer or the Prepackaged Plan by either tendering all of their Notes in the Exchange Offer or voting all of their Notes in favor of the Prepackaged Plan, (ii) not, in any material respect, object, delay or take any other action to interfere with the implementation of the Restructuring or propose or support any alternative restructuring or plan for C&D, (iii) unless C&D commenced a case under Chapter 11 of the Bankruptcy Code, not accelerate or support the acceleration of, or direct the trustee under the indentures governing the Notes to accelerate or support the acceleration of, the Notes for any default or event of default that has occurred or may occur thereunder, and (iv) unless C&D commenced a case under Chapter 11 of the Bankruptcy Code, use their commercially reasonable efforts to waive any event of default under the indentures governing the Notes or rescind any acceleration of the Notes.
 
C&D commenced the Restructuring in October 2010 pursuant to a Registration Statement on Form S-4 under which it sought approval of the Exchange Offer or, alternatively, the Prepackaged Plan.  The Exchange Offer was subject to a number of conditions, including, among other things, approval by C&D’s stockholders of the Exchange Offer.  On December 20, 2010, C&D’s stockholders approved the Exchange Offer, and following the satisfaction of other conditions related to the Exchange Offer, C&D announced on December 23, 2010 that it had completed the Exchange Offer.  In connection with the Exchange Offer, approximately 98.91% of the aggregate outstanding principal amount of the 2005 Notes and approximately 97.62% of the aggregate outstanding principal amount of the 2006 Notes were validly tendered and not validly withdrawn.  In exchange for each $1,000 in principal amount of the 2005 Notes accepted in the Exchange Offer, holders of the 2005 Notes received 113.21 shares of Common Stock (as adjusted for a reverse stock split which occurred on March 14, 2011 (the “Reverse Stock Split”)).  In exchange for each $1,000 in principal amount of the 2006 Notes accepted in the Exchange Offer, holders of the 2006 Notes received 113.14 shares of Common Stock (as adjusted for the Reverse Stock Split).
 
Following the completion of the Exchange Offer in December 2010 and pursuant to the terms of the Support Agreement, eight of the nine members of the C&D Board resigned, the C&D Board was reconstituted and the number of directors was reduced from nine to seven.  The reconstituted C&D Board was comprised of Jeffrey A. Graves, President and Chief Executive Officer of C&D, Kevin P. Dowd and five directors nominated by the Supporting Noteholders.  Todd W. Arden, who was nominated to the C&D Board by Angelo Gordon in December 2010, serves as a Managing Director of Angelo Gordon.
 
As a result of the Exchange Offer and after giving effect to the Reverse Stock Split, Angelo Gordon beneficially owned 9,857,990 shares of Common Stock, constituting approximately 64.86% of the issued and outstanding shares of Common Stock.
 
Prior to submitting its proposal, Angelo Gordon determined to engage Houlihan Lokey Capital, Inc. (“Houlihan Lokey”) as its financial advisor.  On June 14, 2011, Houlihan Lokey provided the Angelo Gordon Affiliates with a preliminary draft presentation related to C&D (the “Houlihan Lokey Presentation”), and reviewed with representatives of the Angelo Gordon Affiliates the Houlihan Lokey Presentation and answered related questions. The Houlihan Lokey Presentation is more fully described under the section entitled, “Houlihan Lokey Presentation.”
 
On June 16, 2011, C&D received an unsolicited non-binding proposal from Angelo Gordon, offering to acquire all of the outstanding shares of Common Stock not already owned by Angelo Gordon for a price of $9.50 per share (the “Proposed Transaction”).  Later that day, the C&D Board  convened (with Mr. Arden taking no part in the meeting) and established the Special Committee to review and evaluate the Proposed Transaction.  The decision of the C&D Board to establish the Special Committee was based the following factors:  the advice of legal counsel to C&D, the fact that Angelo Gordon is C&D’s controlling stockholder and that one member of the C&D Board (Mr. Arden) is an affiliate of Angelo Gordon.  At this time, the membership of the Special Committee preliminarily consisted of directors Kevin P. Dowd, James J. Gaffney and Michael Gallagher, and was subject to further consideration after the Special Committee engaged its legal advisors.
 
 
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Between June 16 and June 21, 2011, the Special Committee interviewed potential independent legal and financial advisors, and nominated Mr. Dowd to serve as Chairperson of the Special Committee.
 
On June 21, 2011, the Special Committee met with Perella Weinberg and Potter Anderson & Corroon LLP (“Potter Anderson”).  The Special Committee discussed the background and qualifications of Perella Weinberg for serving as independent financial advisor to the Special Committee, including Perella Weinberg’s resources and experience in advising corporations with respect to mergers and acquisitions generally, and Perella Weinberg’s recent involvement in transactions similar to the Proposed Transaction.  Perella Weinberg also confirmed its independence with respect to the parties involved in the Proposed Transaction.  The Special Committee also considered the background and qualifications of Potter Anderson in serving as independent legal counsel to the Special Committee.  Potter Anderson confirmed the firm’s independence with respect to the parties involved in the Proposed Transaction, and reviewed the fiduciary obligations of the Special Committee, the role and mandate of the Special Committee, prerequisites for establishing and maintaining an effective and independent Special Committee process, and issues that typically arise in negotiations between a special committee and the controlling stockholder of a Delaware corporation.
 
On June 24, 2011, the Special Committee retained Potter Anderson to serve as independent legal counsel to the Special Committee.
 
On June 28, 2011, the Special Committee convened to consider, among other issues, Mr. Gaffney’s continued membership on the Special Committee, with Potter Anderson participating in the meeting.  Mr. Gaffney then summarized his prior involvement with businesses of Angelo Gordon.  Following a discussion among the members of the Special Committee, Mr. Gaffney tendered his resignation from the Special Committee, which resignation was accepted by Mr. Dowd and Mr. Gallagher.  Following his resignation, Mr. Gaffney left the meeting.
 
The Special Committee then discussed proposed board resolutions, which were prepared by Potter Anderson, that defined the authority of the Special Committee.  Among other things, the proposed board resolutions (i) granted the Special Committee the exclusive power and authority to review and evaluate the terms and conditions, and determine the advisability, of the Proposed Transaction, and to communicate and negotiate (or direct communications and negotiations) with Angelo Gordon and its advisors with respect to the terms and conditions of the Proposed Transaction, (ii) prohibited the C&D Board from recommending the Proposed Transaction for approval by C&D’s stockholders, or otherwise approving the Proposed Transaction, without a prior favorable recommendation from the Special Committee, and (iii) granted explicit authority to the Special Committee to decline to recommend the Proposed Transaction.  Members of the Special Committee confirmed that the proposed board resolutions would be considered by the C&D Board at its next meeting, which was scheduled for June 29, 2011.
 
The Special Committee also discussed with Potter Anderson a draft press release announcing the formation of the Special Committee, which was provided to and reviewed by members of the Special Committee in advance of the meeting.  Following this discussion, the Special Committee authorized Potter Anderson to forward the press release to David Anderson, Vice President, General Counsel and Corporate Secretary of C&D, and Willkie Farr & Gallagher LLP (“Willkie Farr”), outside counsel to C&D, for review and approval by C&D.  The Special Committee then discussed the status of negotiations between Potter Anderson and Simpson Thacher & Bartlett LLP (“Simpson Thacher”), counsel to Angelo Gordon, with respect to a form of confidentiality and standstill agreement that would permit C&D to share non-public information with Angelo Gordon.  Finally, Potter Anderson reviewed with the Special Committee the terms of an engagement letter between the Special Committee and Perella Weinberg, including the proposed transaction fee.  Following a discussion of the terms of the engagement letter, the Special Committee authorized Potter Anderson to contact Perella Weinberg to confirm the proposed transaction fee, and to communicate certain other revised terms of the engagement letter requested by the Special Committee.
 
On June 29, 2011, the C&D Board convened (with Mr. Arden taking no part in the meeting) and adopted the enabling resolutions proposed by the Special Committee, which authorized the Special Committee to (i) evaluate and review the Proposed Transaction, (ii) negotiate the terms of the Proposed Transaction, (iii) consider other proposals and strategic alternatives that may be available to C&D, and (iv) make a recommendation, whether for or against the Proposed Transaction, to the C&D Board on behalf of the minority holders of Common Stock.  The enabling resolutions prohibited the C&D Board from recommending the Proposed Transaction for approval by C&D’s stockholders, or otherwise approving the Proposed Transaction, without a prior favorable recommendation from the Special Committee.   Also on June 29, 2011, the Special Committee retained Perella Weinberg to serve as independent financial advisor to the Special Committee, and C&D issued a press release announcing the formation of the Special Committee and the retention of Potter Anderson and Perella Weinberg as independent advisors to the Special Committee.
 
 
9

 
 
On June 30, 2011, at an introductory meeting between Perella Weinberg and C&D management, C&D management provided Perella Weinberg with an overview and background information on C&D and certain other preliminary matters were discussed.  For reference purposes only, C&D management made available to Perella Weinberg certain financial projections which had previously been prepared and provided by C&D management to the C&D Board in connection with the Exchange Offer (the “Existing Projections”).  C&D management informed Perella Weinberg that it was in the process of preparing new projections to reflect year-to-date performance and refreshed perspectives on future periods and that such new projections would be made available when completed so that they would serve as a basis for Perella Weinberg’s financial analyses.
 
On July 1, 2011, the Special Committee met with Potter Anderson.  Potter Anderson confirmed that following the execution of the engagement letter between Perella Weinberg and the Special Committee, Perella Weinberg met with C&D management to discuss pending issues and the Existing Projections.  Potter Anderson then updated the Special Committee on the status of a putative class action lawsuit filed in the Court of Chancery on June 29, 2011 by a purported stockholder of C&D.
 
Between July 1 and July 6, 2011, Potter Anderson and Simpson Thacher discussed a form of confidentiality and standstill agreement between C&D and Angelo Gordon that would permit C&D to share non-public information with Angelo Gordon.  On July 6, 2011, Potter Anderson provided a form of confidentiality and standstill agreement approved by the Special Committee to Simpson Thacher (the “Confidentiality & Standstill Agreement”).  C&D management also continued work on the new financial projections that would serve as a basis for Perella Weinberg’s financial analyses (the “C&D Management Projections”).  The C&D Management Projections are set forth in “Special Factors—Summary of C&D Management Projections” beginning on page 28.
 
Between July 6 and July 19, 2011, Potter Anderson and Simpson Thacher discussed certain concerns expressed by Angelo Gordon with respect to the standstill provision contained in the Confidentiality & Standstill Agreement.
 
On July 18, 2011, C&D management provided Perella Weinberg with the C&D Management Projections.
 
On July 20, 2011, Perella Weinberg met with C&D management to discuss the C&D Management Projections.
 
On July 21, 2011, the Special Committee met with Potter Anderson and Perella Weinberg.  The Special Committee discussed the status of the Confidentiality and Standstill Agreement.  Potter Anderson informed the Special Committee that Angelo Gordon was not prepared to enter into any agreement that would restrict Angelo Gordon’s ability to commence a tender offer or to speak with other stockholders of C&D, unless the Special Committee provided assurances to Angelo Gordon with respect to the offer price reflected in the Proposed Transaction.  Potter Anderson reviewed with the Special Committee their fiduciary obligations under Delaware law with respect to the Confidentiality & Standstill Agreement.  After discussion, the Special Committee authorized Potter Anderson to communicate to Simpson Thacher that the Special Committee was not willing at that time to provide any price assurances to Angelo Gordon but would consider revisions to the Confidentiality & Standstill Agreement permitting Angelo Gordon to commence a tender offer under limited circumstances.
 
Later that day, Potter Anderson spoke with Simpson Thacher.  Simpson Thacher agreed to provide a revised draft of the Confidentiality & Standstill Agreement to Potter Anderson for the Special Committee’s review and consideration and Potter Anderson confirmed that the Special Committee would not engage in substantive negotiations with Angelo Gordon until after the Confidentiality & Standstill Agreement was executed and Perella Weinberg had provided preliminary initial financial analyses to the Special Committee.
 
On July 26, 2011, Simpson Thacher provided Potter Anderson with a revised draft of the Confidentiality & Standstill Agreement, which Potter Anderson shared with the Special Committee.
 
On August 2, 2011, Dr. Graves, the President and Chief Executive Officer of C&D, received a phone call from the chief executive officer of Company A advising Dr. Graves of Company A’s intention to make a proposal to acquire all of the outstanding shares of Common Stock of C&D (the “Inquiry”).  Subsequently, the general counsel of Company A contacted David Anderson, the  Vice President, General Counsel and Corporate Secretary of C&D, and requested that C&D enter into a confidentiality agreement with Company A before Company A would disclose the offer price.  Mr. Anderson referred the general counsel of Company A to Potter Anderson and management of C&D had no further contact with the management of Company A regarding the Inquiry.  Mr. Anderson contacted Potter Anderson, after which Potter Anderson discussed on an individual basis with the members of the Special Committee their fiduciary obligations and options with regard to the Inquiry in light of the Proposed Transaction.  At the direction of the Special Committee, Potter Anderson contacted the general counsel of Company A, who indicated Company A’s interest in entering into a non-disclosure agreement with C&D, pursuant to which both C&D and Angelo Gordon would agree to keep any proposal received by C&D from Company A confidential.  Without naming the interested party, Potter Anderson communicated to Simpson Thacher Company A’s potential interest in making a proposal, subject to the execution of a non-disclosure agreement between C&D and Company A.  Simpson Thacher agreed to discuss the Inquiry with Angelo Gordon.
 
 
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On August 3, 2011, Potter Anderson provided comments on the Confidentiality & Standstill Agreement to Simpson Thacher, and forwarded a form of non-disclosure agreement (the “NDA”) on behalf of the Special Committee to Company A.
 
On August 4, 2011, the Special Committee met with Potter Anderson and Perella Weinberg.  Perella Weinberg reviewed the key points contained in discussion materials, which included an analysis of comparable companies, analysis of historical stock price performance, a summary of the C&D Management Projections and a preliminary valuation summary.  Perella Weinberg's discussion materials were provided by Perella Weinberg to, and reviewed by, members of the Special Committee in advance of the meeting.  A discussion ensued regarding Perella Weinberg’s preliminary financial analyses and next steps with respect to engaging in substantive negotiations with Angelo Gordon.
 
On the evening of August 4, 2011, C&D and Company A executed the NDA, and Potter Anderson and Simpson Thacher held further discussions to resolve the remaining issues outstanding with respect to the Confidentiality & Standstill Agreement.
 
On August 5, 2011, the Special Committee received a written proposal from Company A offering to acquire all of the outstanding Common Stock for $9.50 per share (the “Company A Proposal”).  Following discussions between the members of the Special Committee and Potter Anderson, the Special Committee provided a copy of the Company A Proposal to Perella Weinberg, the C&D Board and C&D management.
 
On August 10, 2011, the Special Committee and Angelo Gordon executed the Confidentiality & Standstill Agreement.
 
On August 11, 2011, Potter Anderson informed Simpson Thacher that Angelo Gordon’s financial advisor, Houlihan Lokey, was now permitted to commence due diligence activities pertaining to the Proposed Transaction.  In addition, on August 11, 2011, with the approval of Company A, and at the direction of the Special Committee, Potter Anderson also provided a copy of the Company A Proposal to Simpson Thacher.
 
On August 12, 2011, the Special Committee met with Potter Anderson and Perella Weinberg to discuss the commencement of due diligence by Houlihan Lokey and to discuss the Special Committee’s fiduciary obligations with respect to the Company A Proposal. At the conclusion of this discussion, the Special Committee authorized Perella Weinberg to contact Houlihan Lokey and Angelo Gordon to communicate that, although the Special Committee permitted the commencement of due diligence activities by Angelo Gordon and Houlihan Lokey, the Special Committee expected Angelo Gordon to improve the offer price reflected in the Proposed Transaction.
 
Later in the day on August 12, 2011, Simpson Thacher informed Potter Anderson that although Angelo Gordon had considered the Company A Proposal, Angelo Gordon reaffirmed its position under its June 16 proposal and stated that it was only interested in retaining its shares of Common Stock and acquiring the remaining shares of Common Stock not held by Angelo Gordon and thus would not be willing to sell its shares of Common Stock.  By letter to the Special Committee the same day, Angelo Gordon confirmed in writing that it was not interested in selling its Common Stock (the “August 12 Letter”).  Potter Anderson also informed the general counsel of Company A that Angelo Gordon had communicated to the Special Committee that it was not interested in pursuing the Company A Proposal, and that Angelo Gordon remained an interested buyer, but not a willing seller, of its Common Stock.  Potter Anderson also indicated to Company A that in light of Angelo Gordon’s response to the Company A Proposal, the Special Committee had recommended that Company A submit a revised proposal reflecting its best offer with respect to price.
 
From August 12 to August 16, 2011, Houlihan Lokey continued its due diligence activities on behalf of Angelo Gordon. 
 
 
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On August 17, 2011, Houlihan Lokey held a telephonic meeting with C&D management to discuss the assumptions used in the preparation of the C&D Management Projections and other diligence questions.  A representative of Perella Weinberg participated in this meeting.  Also on August 17, 2011, the Special Committee met (with Potter Anderson and Perella Weinberg participating in the meeting) to review updated discussion materials provided by Perella Weinberg, which were received and reviewed by members of the Special Committee in advance of the meeting.  Perella Weinberg reviewed with the Special Committee Perella Weinberg’s initial view of the effects of the recent stock market downturn on the preliminary financial analysis presented by Perella Weinberg to the Special Committee on August 4, 2011.  Perella Weinberg then indicated that, in light of recent market volatility, Perella Weinberg had updated the comparable companies analysis and preliminary valuation summary that had previously been provided to the Special Committee on August 4, 2011, and a discussion ensued regarding the updated analyses.  The Special Committee also discussed with its independent advisors the valuation reflected in the Company A Proposal.  The Special Committee then discussed with Perella Weinberg the potential implications of the recent market downturn on the C&D Management Projections.  Following these discussions, and based upon the advice of its independent advisors, the Special Committee concluded that the valuation reflected in the Proposed Transaction undervalued C&D’s per share price, notwithstanding the recent market volatility.  The Special Committee then authorized Perella Weinberg to communicate the Special Committee’s views to Houlihan Lokey and instructed Perella Weinberg to encourage Houlihan Lokey to continue its due diligence efforts, with the goal of improving the per share price reflected in the Proposed Transaction.  Potter Anderson then provided an update to the Special Committee with respect to the Company A Proposal, noting that Potter Anderson had contacted the general counsel of Company A to communicate Angelo Gordon’s statement that Angelo Gordon was not interested in participating in a sale of C&D to a third party.
 
Later in the day on August 17, 2011, Perella Weinberg reported to Potter Anderson that Houlihan Lokey affirmed, in light of recent stock market activity, that the offer price reflected in the Proposed Transaction was reasonable but also suggested a willingness to recommend that Angelo Gordon improve its offer price if the Special Committee agreed to: (i) commence discussions to settle the putative claims asserted by plaintiff stockholders against the Special Committee, the C&D Board, C&D and Angelo Gordon (the “Stockholder Claims”); and (ii) contact certain minority stockholders of C&D in order to gauge each stockholder’s respective view of the Proposed Transaction.
 
On August 18, 2011, Potter Anderson and Perella Weinberg contacted Mr. Dowd to discuss Perella Weinberg’s recent conversations with Houlihan Lokey.  Mr. Gallagher was unavailable for this discussion, but Mr. Dowd indicated he would update Mr. Gallagher on the outcome of the call.  A discussion ensued regarding whether to commence settlement discussions with respect to the Stockholder Claims and contact certain minority stockholders of C&D to gauge each such stockholder’s respective view of the Proposed Transaction.  Following these discussions, the Special Committee authorized Perella Weinberg to follow up with representatives of Houlihan Lokey and advise Houlihan Lokey to continue their due diligence activities with the goal of improving the offer price reflected in the Proposed Transaction.  Finally, the Special Committee authorized Potter Anderson to contact Simpson Thacher with respect to the Stockholder Claims.
 
On August 24, 2011, the general counsel of Company A notified the Special Committee that Company A had considered whether to improve its offer but determined that it was not interested in improving the terms of the Company A Proposal, and withdrew its proposal without further explanation.
 
During discussions between August 26 and August 29, 2011, the Special Committee determined, for a number of reasons (including confidentiality considerations), that it would not be in the best interests of C&D stockholders for the Special Committee to contact certain minority stockholders of C&D with respect to the Proposed Transaction.  Likewise, the Special Committee determined that it would not be beneficial to commence settlement negotiations related to the Stockholder Claims prior to the announcement of a definitive agreement between C&D and Angelo Gordon.  
 
On August 29, 2011, Simpson Thacher indicated that Angelo Gordon had authorized Houlihan Lokey to advise Perella Weinberg that Angelo Gordon would consider an increase in the offer price from $9.50 to $9.65 per share in exchange for: (i) the exclusion of any condition to the consummation of the Merger that would require the Merger to receive the affirmative vote of a majority of the shares of Common Stock owned by stockholders unaffiliated with the controlling stockholder, Angelo Gordon (the “Majority of the Minority Condition”); and (ii) the inclusion of a condition to the consummation of the Merger that would require the total number of shares of Common Stock with respect to which appraisal rights shall have been exercised not to exceed five percent (5%) of the issued and outstanding shares of Common Stock as of the closing date of the Merger (the “Appraisal Out”).
 
On August 30, 2011, Potter Anderson and Perella Weinberg spoke separately with Mr. Dowd and Mr. Gallagher to confirm the terms of Angelo Gordon’s most recent offer.  Perella Weinberg shared its view with Mr. Dowd and Mr. Gallagher that Angelo Gordon could further improve its offer price in exchange for the proposed conditions. During discussions among the Special Committee and its advisors, the Special Committee confirmed with its independent counsel that the existence of a majority of the minority condition was not legally required.  After further discussions, the Special Committee indicated that it would support moving forward without a majority of the minority condition, provided that Angelo Gordon increased its offer price to $9.75 per share, and the Special Committee directed Perella Weinberg to contact Houlihan Lokey to seek to improve the current offer price of $9.65 per share.
 
 
 
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Pursuant to subsequent negotiations between Perella Weinberg and Houlihan Lokey, Angelo Gordon increased its offer price from $9.65 per share to $9.75 per share, subject to the exclusion of a Majority of the Minority Condition and the inclusion of the Appraisal Out previously proposed by Angelo Gordon (the “Final Offer”).
 
On August 31, 2011, the Special Committee met with Potter Anderson and Perella Weinberg.  The Special Committee reviewed the status of negotiations to date, including the conditions associated with the Final Offer.  Perella Weinberg then discussed with the Special Committee updated discussion materials provided to and reviewed by members of the Special Committee in advance of the meeting.  Perella Weinberg confirmed that, in light of a continued downturn in the global stock markets, it had revised the comparable companies analysis and preliminary valuation as previously presented in discussion materials provided on August 4, 2011 and August 27, 2011 and had additionally compared the Final Offer versus Angelo Gordon’s initial offer price of $9.50 per share.
 
A discussion ensued among the Special Committee and its independent advisors regarding the updated financial analyses prepared by Perella Weinberg and the implications of the recent volatility in the global stock markets on the Special Committee’s negotiations with Angelo Gordon with respect to the Final Offer.  Potter Anderson noted that with the approval of the Special Committee, Willkie Farr would coordinate with Mr. Anderson to provide C&D’s comments regarding relevant provisions of the draft merger agreement to Potter Anderson.  After granting the approval requested by Potter Anderson, the Special Committee and its independent advisors engaged in a general discussion of the transaction structures likely to be proposed by Simpson Thacher in the draft merger agreement, the applicable signing and closing timelines associated with each structure, and the status of the Stockholder Claims.  The Special Committee also authorized Perella Weinberg to communicate to Houlihan Lokey that, subject to negotiating the final terms of the merger agreement, the parties were in agreement on the per share offer price reflected in the Final Offer.
 
On September 1, 2011, Potter Anderson and Perella Weinberg participated in a meeting of the C&D Board (the “September 1 C&D Board Meeting”) to provide an update to the C&D Board regarding the process conducted by the Special Committee to date.  Mr. Arden, the director of the C&D Board appointed by Angelo Gordon, was excused from the meeting during discussions related to the Special Committee’s evaluation of the Proposed Transaction.  During the September 1 C&D Board Meeting, C&D management also discussed with the C&D Board certain cost-cutting initiatives that were under preliminary consideration by C&D management, including the potential closure of a C&D manufacturing facility located in Milwaukee, Wisconsin, and the relocation of the manufacturing operations conducted at such facility to Reynosa, Mexico (the “Cost-Cutting Initiatives”) in order to improve C&D’s projected EBITDA during fiscal year 2013 and beyond.
 
On September 2, 2011, C&D management advised Potter Anderson that C&D management was considering the Cost-Cutting Initiatives.  Afterwards, Potter Anderson contacted Perella Weinberg to determine the potential effects of the Cost-Cutting Initiatives on certain financial analyses.  Perella Weinberg indicated it would review and update the discussion materials presented on August 31, 2011 to reflect the potential impact of the Cost-Cutting Initiatives on the financial analyses conducted by Perella Weinberg and would share any relevant updates with the Special Committee.
 
On September 3, 2011, Perella Weinberg met with C&D management to discuss the Cost-Cutting Initiatives and their potential impact on the C&D Management Projections and received in summary form information from C&D management indicating C&D management’s view of the potential impact of the Cost-Cutting Initiatives.  The C&D Management Projections were not updated to reflect the impact of the Cost-Cutting Initiatives, although such information was considered by Perella Weinberg in its financial analysis.
 
On September 6, 2011, Angelo Gordon provided a draft merger agreement to the Special Committee, which it and Potter Anderson undertook to review.  The Special Committee also provided the draft merger agreement to Willkie Farr for C&D’s review and comment.
 
Also on September 6, 2011, Perella Weinberg received from C&D management its preliminary analysis regarding the potential impact of the Cost-Cutting Initiatives on the C&D Management Projections and Perella Weinberg met with C&D management to discuss the same.
 
On September 7, 2011, Potter Anderson discussed with Willkie Farr initial comments to the draft merger agreement.
 
On September 8, 2011, the Special Committee convened, with Potter Anderson and Perella Weinberg participating. The Special Committee first received an update regarding the status of negotiations with respect to the Final Offer.  Potter Anderson also updated the Special Committee on Perella Weinberg’s conversation with C&D management with respect to the Cost-Cutting Initiatives and indicated that Perella Weinberg was prepared to share orally with the Special Committee preliminary valuation analyses updated by Perella Weinberg to reflect the potential impact of the Cost-Cutting Initiatives on the future financial performance of C&D. A discussion ensued, during which members of the Special Committee expressed the view that the Cost-Cutting Initiatives were in their formative stages, had not been approved by the C&D Board and, even if approved, would be challenging for C&D management to implement simultaneously with other growth initiatives under preliminary review and consideration by the C&D Board.  Further, members of the Special Committee noted that members of the C&D Board had directed C&D management to continue its study of the possible Cost-Cutting Initiatives and to revert to the C&D Board with an assessment of the potential financial benefit associated therewith at an unspecified future date.  At the conclusion of this discussion, the Special Committee directed Perella Weinberg to develop additional financial analyses incorporating the potential impact of the Cost-Cutting Initiatives, upon completion of which the Special Committee would convene to discuss next steps.
 
 
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On September 9, 2011, the Special Committee considered outstanding issues with respect to the draft merger agreement, including issues relating to (i) C&D’s right to terminate the agreement upon a change in recommendation by the Special Committee or the C&D Board, (ii) the identity and creditworthiness of Acquiror, (iii) certain assurances regarding Acquiror’s delivery of the Written Consent, (iv) a proposed reverse termination fee payable to C&D upon Acquiror’s failure to deliver the Written Consent within twenty-four (24) hours of the execution of the merger agreement, (v) the reimbursement of certain C&D expenses if Acquiror failed to waive the Appraisal Out, (vi) the definition of material adverse effect (“MAE”), (vii) the status of C&D as a third-party beneficiary of the equity financing letter contemplated by Angelo Gordon in connection with the draft merger agreement and the Final Offer (the “Equity Financing Letter”), and (viii) the right of the parties to pursue certain remedies, including specific performance, to enforce certain rights under the merger agreement.
 
On September 10, 2011, the Special Committee met with Potter Anderson and Perella Weinberg.  The Special Committee invited Perella Weinberg to discuss the updated financial analyses prepared by Perella Weinberg, which were provided to and reviewed by members of the Special Committee in advance of the meeting.  Perella Weinberg first discussed updated preliminary financial analyses of C&D, which included in certain analyses the potential impact of the Cost-Cutting Initiatives and certain growth initiatives under review by C&D management, including a potential expansion of C&D’s international manufacturing operations and the execution of a contemplated sales contract with a key C&D customer (collectively, the “Potential Growth Opportunities”).  A discussion ensued regarding the updated financial analyses reflected in the discussion materials which included an analysis illustrating the discounted future equity value of C&D, during which members of the Special Committee expressed the view that execution risk, funding uncertainty and the possible effect of recent sales results in the U.S. on the C&D Management Projections each represented significant risks, as did the potential dilution of existing equity in C&D should C&D require incremental third-party equity financing to pursue the Cost-Cutting Initiatives and the Potential Growth Opportunities.  The Special Committee and Perella Weinberg also discussed each of the valuation metrics (including comparable companies analysis, discounted future equity value analysis, comparable transaction analysis and discounted cash flow analysis) included in the financial analysis prepared by Perella Weinberg.  At the conclusion of this discussion, the Special Committee directed Perella Weinberg to complete an additional analysis incorporating the incremental financing potentially required to fund the Potential Growth Opportunities, which the Special Committee would review with Perella Weinberg and Potter Anderson in order to reach a conclusion regarding further price discussions with Angelo Gordon.
 
On September 14, 2011, the Special Committee met with Potter Anderson and Perella Weinberg to discuss the additional financial analysis prepared by Perella Weinberg at the direction of the Special Committee with respect to the Potential Growth Opportunities, which included a sensitivity analysis providing an illustrative valuation of a proposed manufacturing facility in India, which assumed that the project was financed by the issuance of new C&D equity (the “September 14 Discussion Materials”).  A discussion ensued, during which the Special Committee expressed certain concerns relating to the execution and management of the potential Cost-Cutting Initiatives and the Potential Growth Opportunities and also noted that given ongoing uncertainty, if current C&D sales and revenue trends continued, it would be difficult for C&D to achieve its internal EBITDA projections for the 2012 fiscal year.  Following this discussion, and taking into account the analyses provided in Perella Weinberg’s discussion materials, the execution and management risks involved in implementing the potential Cost-Cutting Initiatives and the Potential Growth Opportunities, the difficulty in achieving the EBITDA projections, recent volatility in the U.S. and global stock markets, and the advice of its independent advisors, the Special Committee determined that the per share price reflected in the Final Offer remained adequate.
 
On September 15, 2011, after discussing certain outstanding issues with respect to the draft merger agreement with C&D and Willkie Farr, the Special Committee forwarded a revised draft of the merger agreement reflecting its comments to Angelo Gordon.
 
On September 17, 2011, Potter Anderson and Simpson Thacher discussed certain aspects of the draft merger agreement, including (i) the need for the Special Committee and the C&D Board to have the ability to change their respective recommendations with respect to the Final Offer, (ii) the reverse termination fee payable in the event Angelo Gordon failed to deliver the Written Consent, and (iii) the proposed requirement that Angelo Gordon pay C&D’s expenses in the event Angelo Gordon failed upon proper notice to waive the Appraisal Out.  A discussion ensued regarding the relevant provisions of the draft merger agreement in light of the Special Committee’s interest in securing both closing and funding certainty with respect to the Final Offer.  At the conclusion of this discussion, Potter Anderson indicated that it would convene the Special Committee and communicate Angelo Gordon’s view of the relevant provisions once Potter Anderson received and reviewed a revised draft of the draft merger agreement from Simpson Thacher.
 
 
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On September 20, 2011, Angelo Gordon provided a revised draft of the merger agreement to the Special Committee, which Potter Anderson undertook to review.  The Special Committee also provided Angelo Gordon’s revised draft to C&D and Willkie Farr.  Later that day, Potter Anderson discussed certain aspects of this revised draft with C&D and Willkie Farr.
 
On September 21, 2011, the Special Committee met with Potter Anderson and Perella Weinberg to discuss and review Angelo Gordon’s September 20 draft of the merger agreement (the “September 20 Draft”).  The Special Committee and its advisors discussed Angelo Gordon’s proposed changes in the September 20 Draft, including the removal of certain provisions pertaining to a voting agreement proposed by the Special Committee, the termination fee payable upon a change of recommendation approved by the Special Committee, and a reverse termination fee payable in the event Angelo Gordon failed to deliver the Written Consent.
 
Perella Weinberg confirmed it had not yet spoken with Houlihan Lokey but concurred with Potter Anderson’s assessment of open issues with respect to the September 20 Draft. A discussion ensued regarding the revised language proposed by Angelo Gordon with respect to a change in recommendation, the circumstances, if any, under which the Special Committee and the C&D Board would consider advising stockholders of C&D to seek appraisal and the unlikelihood that any competing bid for C&D would be successful given statements by Angelo Gordon that it was an interested buyer, but not a willing seller, of its shares of Common Stock.
 
The Special Committee then discussed potential revisions to the September 20 Draft, including, among others, a reverse termination fee in the event Angelo Gordon failed to deliver the Written Consent, and certain remedies for C&D in the event of a willful breach by Angelo Gordon.
 
The Special Committee also discussed certain issues related to the Equity Financing Letter with respect to funding certainty, and confirmed that Perella Weinberg would perform due diligence with respect to any entity specified by Angelo Gordon in the Equity Financing Letter.
 
A discussion ensued regarding the key issues outstanding with respect to the draft merger agreement, and the Special Committee’s view that further revisions were required to the September 20 Draft to provide both closing and funding certainty.  Following this discussion, the Special Committee instructed Potter Anderson to revise the September 20 Draft and provide an updated draft merger agreement to Simpson Thacher.
 
Following the meeting of the Special Committee, Potter Anderson contacted Simpson Thacher to discuss the issues raised by the Special Committee with respect to closing and funding certainty, and indicated that it would provide a revised draft of the merger agreement to Simpson Thacher reflecting: (i) revised language for the change in recommendation provision, which would permit the Special Committee and the C&D Board for a period of twenty (20) days following the mailing of C&D’s definitive information statement to decide whether or not to recommend that stockholders seek appraisal of their shares of Common Stock; (ii) a 10% reverse termination fee payable by Angelo Gordon in the event Angelo Gordon failed to deliver the Written Consent; and (iii) a new carve out in the MAE definition in the draft merger agreement pertaining to pending litigation against C&D.  In response to the Special Committee’s concerns with respect to funding certainty, Simpson Thacher indicated that Angelo Gordon would propose language to be included in the draft merger agreement stating that C&D is a third-party beneficiary of the Equity Financing Letter.
 
On September 24, 2011, Potter Anderson provided a revised draft of the merger agreement to Simpson Thacher.
 
On September 26, 2011, Angelo Gordon provided a draft of the Equity Financing Letter to the Special Committee and its counsel, which the Special Committee shared with C&D and Willkie Farr.
 
Also on September 26, 2011, Potter Anderson and Simpson Thacher discussed certain remaining outstanding issues with respect to the draft merger agreement, including the terms of the Equity Financing Letter.  Simpson Thacher confirmed that due to the legal structure of the entities executing the Equity Financing Letter, the liability of the entities would be several and not joint.  Simpson Thacher also proposed a cap of $2.5 million with respect to the C&D expenses payable by Angelo Gordon, which Potter Anderson indicated it would discuss with C&D to confirm that the proposed $2.5 million cap would be adequate to reimburse C&D’s expenses.
 
On September 27, 2011, Angelo Gordon distributed a further revised draft merger agreement.
 
 
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On September 28, 2011, the Special Committee met with Potter Anderson and Perella Weinberg.  Potter Anderson reported on its discussion with Simpson Thacher with respect to the change in recommendation, reverse termination fee and the MAE provisions of the draft merger agreement, and that it had confirmed with Mr. Anderson that the $2.5 million cap on C&D’s expenses was adequate.  Potter Anderson indicated that Angelo Gordon would provide language designating C&D as a third-party beneficiary of the Equity Financing Letter to address the Special Committee’s concerns with respect to funding certainty.  Potter Anderson then stated that following additional discussions on September 28, 2011 between Potter Anderson, Simpson Thacher, Willkie Farr and Mr. Anderson, outside counsel and C&D had reached substantive agreement on the legal issues outstanding with respect to the draft merger agreement.
 
After confirming that members of the Special Committee had received and reviewed discussion materials distributed to the Special Committee in advance of the meeting, Potter Anderson reviewed the fiduciary duties of the Special Committee in evaluating the draft merger agreement and the transactions contemplated thereby.  The Special Committee then reviewed certain provisions contained in the draft merger agreement.  The Special Committee noted that the increase in the offer price from $9.50 to $9.75 per share was conditioned in part upon the draft merger agreement not containing a Majority of the Minority Condition.  Potter Anderson confirmed the Special Committee would receive updated financial analyses from Perella Weinberg prior to approving and adopting the draft merger agreement.  The Special Committee also noted that the draft merger agreement included a reverse termination fee of 10% of C&D’s total equity value payable by Angelo Gordon in the event Angelo Gordon failed to deliver the Written Consent, and also required Angelo Gordon to pay C&D’s expenses up to $2.5 million if Angelo Gordon failed to waive the Appraisal Out upon proper notice.  The Special Committee also confirmed C&D’s status as a third-party beneficiary of the Equity Financing Letter, with the right to specifically enforce the Angelo Gordon Entities’ funding obligations thereunder.
 
Potter Anderson then discussed with the Special Committee the change in recommendation provision contained in the draft merger agreement, which permits the Special Committee or the C&D Board to change its recommendation for any reason prior to the delivery of the Written Consent, and, following the delivery of the Written Consent, permits the Special Committee and the C&D Board to communicate with stockholders of C&D regarding the exercise of their appraisal rights for a period of twenty (20) days after the mailing of C&D’s definitive information statement.  Potter Anderson also reviewed with the Special Committee the Merger Consideration, the treatment of outstanding Stock Options and SARs, the representations and warranties made by C&D, certain pre-closing covenants and conditions to closing, each party’s respective termination rights and indemnification and D&O insurance protections included the draft merger agreement.
 
Once the draft merger agreement and the related transaction documents were finalized, the Special Committee determined it would consider the information presented and convene again to receive an updated presentation from Perella Weinberg, to determine whether the Final Offer was fair and, if the Special Committee deemed appropriate, to recommend that the C&D Board approve the merger agreement and the transactions contemplated thereby.
 
On September 29, 2011, the C&D Board convened (with Mr. Arden taking no part in the meeting) to receive a presentation from Potter Anderson with respect to the Final Offer, the draft merger agreement and the transactions contemplated thereby, pursuant to which Potter Anderson reviewed with the C&D Board its fiduciary duties with respect to the Final Offer and summarized the key terms and provisions contained in the draft merger agreement.  Certain members of management and Willkie Farr participated in the meeting.
 
From September 30, 2011 to October 2, 2011, the Special Committee, Angelo Gordon and C&D, through its legal advisors, continued to finalize the terms of the draft merger agreement and the related transaction documents.
 
On October 2, 2011, the Special Committee convened, with Potter Anderson and Perella Weinberg participating in the meeting.  After confirming that members of the Special Committee had received and reviewed in advance of the meeting substantially final versions of the Merger Agreement, the Equity Financing Letter and discussion materials provided by Perella Weinberg (the “October 2 Discussion Materials”), Potter Anderson discussed certain non-substantive revisions that had been incorporated into the Merger Agreement since the Special Committee convened on September 28, 2011.  Potter Anderson also confirmed that there had been no revisions to the terms or provisions of the Equity Financing Letter since the Special Committee convened on September 28, 2011.  Perella Weinberg then reviewed with the Special Committee its financial analyses of the Merger Consideration of $9.75 per share, and confirmed that Perella Weinberg had performed the due diligence requested by the Special Committee with respect to the entities providing financing pursuant to the Equity Financing Letter.  Following this discussion, at the request of the Special Committee, Perella Weinberg delivered to the Special Committee an oral opinion, which opinion was confirmed by delivery of a written opinion dated October 2, 2011, to the effect that, as of October 2, 2011 and based on and subject to various assumptions, matters considered and limitations described in its opinion, the Merger Consideration of $9.75 per share to be received by holders of Common Stock pursuant to the Merger Agreement (other than holders of Excluded Shares) is fair, from a financial point of view, to such holders.  Potter Anderson then reviewed certain reasons for the Merger, as well as certain risks associated with the Merger, and following a discussion of the Merger Agreement, the Equity Financing Letter and the October 2 Discussion Materials, the Special Committee unanimously adopted resolutions (i) declaring the Merger Agreement and the transactions contemplated thereby, including the Merger, advisable, fair to, and in the best interests of, the unaffiliated holders of Common Stock, (ii) recommending the submission of the Merger Agreement and the transactions contemplated thereby, including the Merger, to the C&D Board, (iii) recommending that the C&D Board approve the Merger Agreement and the transactions contemplated thereby, including the Merger, and (iv) recommending that the C&D Board submit the Merger Agreement to the C&D stockholders for adoption and that the C&D Board recommend that the C&D stockholders vote to adopt the Merger Agreement.
 
 
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The meeting of the Special Committee was adjourned, and a meeting of the C&D Board was immediately convened, with all members of the C&D Board present with the exception of Mr. Arden.  Mr. Anderson, Mr. Harvie and Willkie Farr, Potter Anderson and Perella Weinberg also participated in the meeting.  Potter Anderson confirmed that the Special Committee had received an update from outside counsel with respect to the Merger Agreement and the Equity Financing Letter, as well as an oral fairness opinion from Perella Weinberg.  Referencing discussion materials provided to the C&D Board in advance of the meeting, Perella Weinberg provided a summary of the financial analyses engaged in by Perella Weinberg.  Potter Anderson also confirmed that the Special Committee had adopted resolutions recommending the submission of the Merger Agreement and the transactions contemplated thereby to the C&D Board, and recommending that the C&D Board approve the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger.  After further discussion, the C&D Board, having received the recommendation of the Special Committee, approved and declared advisable the Merger Agreement, and resolved to recommend that the C&D stockholders adopt the Merger Agreement.
 
Following the conclusion of the C&D Board meeting, Potter Anderson, Willkie Farr and Simpson Thacher finalized the transaction documentation, and on October 3, 2011, the parties executed the Merger Agreement and the Equity Financing Letter, and Angelo Gordon delivered to C&D the Written Consent.  On the morning of October 3, 2011, C&D and Angelo Gordon issued a joint press release announcing the Merger.
 
C&D’s Reasons for the Merger
 
As described above in “Background of the Merger,” at a meeting held on October 2, 2011, the C&D Board, acting upon the recommendation of the Special Committee and after consultation with its legal advisor and the Special Committee’s financial and legal advisor (and with Todd Arden taking no part in the vote), determined that the Merger and the transactions contemplated by the Merger Agreement are advisable and in the best interests of C&D and the unaffiliated stockholders of C&D. In the course of reaching their respective determinations, the C&D Board and the Special Committee considered the following material factors and benefits, among others, as generally supporting such determinations:
 
 
the opinion of Perella Weinberg, delivered to the Special Committee on October 2, 2011, subsequently confirmed in writing, to the effect that, as of such date, and based upon and subject to the various assumptions and limitations set forth in the opinion, the Merger Consideration of $9.75 per share to be received by holders of Common Stock pursuant to the Merger Agreement (other than holders of Excluded Shares) was fair from a financial point of view to such holders, as described in “Opinion of Perella Weinberg, Financial Advisor to the Special Committee” on page 20;
 
 
the Special Committee’s belief that it was unlikely that the trading price of the Common Stock would, in the foreseeable future, have a net present value greater than the $9.75 per share payable to the holders of Common Stock pursuant to the Merger Agreement and that such amount to be paid represented a fair value in relation to both the current and historical market prices of Common Stock;
 
 
the Special Committee’s belief that, having alerted the market to its potential willingness to be acquired, having received only one other firm indication of interest, and having received no other offers for equal or greater consideration than the Merger Consideration of $9.75 per share, the current offer price is the best offer that the holders of Common Stock may reasonably expect to receive;
 
 
the risks of remaining an independent company;
 
 
the form of consideration to be paid to the holders of Common Stock is cash, which will provide certainty of value and immediate liquidity to the holders of Common Stock;
 
 
the uncertainties associated with continuing to execute on C&D’s strategic business plan in light of the C&D’s competitive position in its industry, potential for future growth and potential difficulty raising capital – particularly in light of the controlling stockholder’s ownership of a majority of C&D’s Common Stock;
 
 
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uncertainty surrounding certain litigation pending against C&D;
 
 
execution risks and other difficulties associated with implementing the Cost-Cutting Initiatives and the amount of time that would pass before beneficial results could be achieved under such Cost-Cutting Initiatives;
 
 
execution risks and other difficulties inherent in effectively expanding C&D’s operations in India and China and the amount of capital required to do so;
 
 
uncertainty surrounding labor and other costs related to C&D’s operations and facilities and the potential impact on C&D’s market share and competitive position;
 
 
continued volatility in the commodities markets with respect to lead prices;
 
 
continuing weakness in certain markets that C&D serves, particularly in North America, and continuing competitive price pressure;
 
 
that if Acquiror did not deliver the Written Consent voting in favor of the Merger, then it may be required to pay C&D a reverse termination fee in the amount of 10% of the equity value of C&D; that if Acquiror does not complete the Merger under certain circumstances, it may be required to pay C&D’s expenses associated with the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement in the amount of up to $2.5 million; the facts that the Angelo Gordon Entities hold a majority of the Common Stock and have covenanted to deliver the Written Consent voting in favor of the Merger, and that C&D has a right to enforce the Equity Financing Letter, providing a significant level of certainty that Acquiror and C&D will consummate the Merger under the terms negotiated in the Merger Agreement;
 
 
historical and prospective difficulties associated with meeting projections and intended plans for C&D’s operations;
 
 
the availability of appraisal rights under Section 262 of the DGCL to holders of Common Stock who comply with all of the required procedures under the DGCL, which allows such holders to seek appraisal of the fair value of their shares of Common Stock as determined by the Delaware Court of Chancery;
 
 
the fact that the Special Committee is composed of two independent directors who are not affiliated with Acquiror and are not employees of C&D or any of its subsidiaries; and
 
 
the principal terms of the proposed Merger, including, among others, the consideration to be received by the holders of Common Stock, the indemnification obligations and the conditions to the parties’ obligations to consummate the Merger.
 
In the course of reaching their respective determinations, the C&D Board and the Special Committee also considered a variety of uncertainties and risks in its deliberations concerning the Merger Agreement and the Merger, including, among others:
 
 
the fact that the nature of the Merger as a cash transaction will prevent the holders of Common Stock from being able to participate in any future earnings or growth of C&D and the holders of Common Stock will not benefit from any potential future appreciation in the value of Common Stock, including any value that could be achieved if C&D engages in future strategic or other transactions or as a result of the improvements to C&D’s operations;
 
 
the fact that, if the Merger is not completed under certain conditions, C&D may have incurred significant transaction and opportunity costs attempting to consummate the transactions, C&D’s business may be subject to disruption and C&D’s directors, officers and other employees will have expended considerable time and effort to consummate the transactions;
 
 
the fact that the restrictions in the Merger Agreement on the conduct of C&D’s business prior to the consummation of the Merger, requiring C&D to operate its business in the ordinary course of business and subject to other restrictions, other than with the consent of Acquiror, may delay or prevent C&D from undertaking business opportunities that could arise prior to the consummation of the Merger; and
 
 
the fact that the executive officers and directors of C&D may have interests in the Merger that are different from, or in addition to, those of C&D’s stockholders generally.
 
 
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The C&D Board and the Special Committee did not consider any implied liquidation value when determining the fairness of the Merger because it was not contemplated that C&D be liquidated whether or not the Merger was consummated.  Moreover, a liquidation value analysis does not take into account any value that may be attributed to C&D’s ability to attract new business.  Further, at no point during the discussions between C&D and Angelo Gordon did Angelo Gordon indicate any willingness to consider any alternative transactions that would require the consent of the C&D stockholders, including a liquidation.  The C&D Board and the Special Committee did not consider net book value of equity attributable to C&D, which is an accounting concept, as a factor because the C&D Board and the Special Committee believed that net book value of equity attributable to C&D is not a material indicator of the value of C&D as a going concern, but rather is indicative of historical costs (and does not, for example, take into account the future prospects of C&D, market trends and conditions or business risks inherent in a competitive market) and therefore, in their view, is not a relevant measure in the determination as to the fairness of the Merger. The net book value of equity attributable to C&D as of July 31, 2011 was $5.41 per share.
 
Although the C&D Board and the Special Committee do not believe there is a single method of determining going concern value, the C&D Board and the Special Committee believe that the financial analyses evaluated and considered in their totality (and as discussed herein) are reflective of C&D’s going concern value. To the extent the pre-Merger going concern value was reflected in the price of the Common Stock prior to December 1, 2011, the date of the filing of this Information Statement, the offer price of $9.75 per share represents a premium to the going concern value of C&D.
 
C&D’s consideration of the Merger and the transactions contemplated by the Merger Agreement was a direct response to C&D’s receipt on June 16, 2011 of the unsolicited proposal from Angelo Gordon.  C&D had not previously considered consummating a transaction similar to the Merger involving C&D and Angelo Gordon as no such transaction had previously been presented to C&D.  C&D’s desire to pursue the Merger at this time is the result of its determination that the Merger and the transactions contemplated by the Merger Agreement are advisable and in the best interests of C&D and the unaffiliated stockholders of C&D and is based on the reasons set forth above, among others. Other than the Inquiry made by Company A as described above in “Background of the Merger” and in light of the absence of any other third-party interest in pursuing a transaction similar to the Merger, C&D did not in any material respect consider any specific alternative transaction to the Merger in connection with its review and analysis of whether to pursue the Merger.
 
The foregoing discussion of the information and factors considered by the C&D Board and the Special Committee is not exhaustive, but C&D believes it includes all the material factors considered by the C&D Board and the Special Committee. In view of the wide variety of factors considered in connection with their evaluation of the Merger and the complexity of these matters, the C&D Board and the Special Committee did not find it useful, and did not attempt, to quantify, rank or otherwise assign relative weights to these factors. In considering the factors described above, individual members of the C&D Board may have given different weight to different factors. The C&D Board and the Special Committee conducted an overall analysis of the factors described above, including thorough discussions with, and questioning of, C&D management and the Special Committee’s legal and financial advisors, and considered the factors overall to be favorable to, and to support, their determinations.
 
Position of C&D as to the Fairness of the Merger
 
For the reasons set forth above under “C&D’s Reasons for the Merger,” C&D reasonably believes that the Merger and the transactions contemplated by the Merger Agreement are advisable and in the best interests of C&D and the unaffiliated stockholders of C&D, both from a procedural and substantive perspective.
 
Effects of the Merger
 
As a result and upon consummation of the Merger, C&D will cease to be a publicly traded company and C&D’s Common Stock will no longer be traded on the over the counter market.  Stockholders of C&D (other than the Angelo Gordon Entities) will no longer have any interest in C&D’s future earnings or growth.  In addition, upon consummation of the Merger.  The Merger will have the federal tax consequences described under “Material United States Federal Income Tax Consequences of the Merger to Our Stockholders” beginning on page 38.
 
As a result and upon consummation of the Merger, C&D will be 100% owned by Acquiror (and indirectly by the Angelo Gordon Entities).  The following table sets forth, among other things, the number of shares of C&D Common Stock owned by each Angelo Gordon Entity pre- and post-Merger, as well as each Angelo-Gordon Entity’s interest in the net book value and net earnings of C&D.
 
 
19

 
 
                                               Earnings by  
                                         Net Book    
owner for
 
   
Number of
   
Number of
   
Number of
   
Percent of
               
Value
    6 months  
   
Shares
   
Shares
   
Shares
   
Commitment
   
% Holding
   
% Holding
    (as of    
 ended
 
   
pre-Merger
   
Acquired
   
post-Merger
   
Funding
    pre-Merger      post-Merger    
July 31, 2011)
   
July 31, 2011
 
                                                 
AG Capital Recovery Partners V1 LP
    5,446,180       2,952,768       8,398,948       55.31 %     35.84 %     55.27 %   $ 45,462,000     $ (970,000 )
AG Capital Recovery Partners V11 LP
    2,214,710       1,200,646       3,415,356       22.49 %     14.57 %     22.47 %     18,487,000       (394,000 )
AG Superfund LP
    1,100,837       596,853       1,697,690,132       11.18 %     7.24 %     11.17 %     9,189,000       (196,000 )
AG Eleven Partners LP
    470,726       255,184       725,910       4.78 %     3.10 %     4.78 %     3,929,000       (84,000 )
AG Superfund International Partners LP
    286,296       155,353       441,649       2.91 %     1.88 %     2.91 %     2,391,000       (51,000 )
AG Garden Partners LP
    87,835       47,513       135,348       0.89 %     0.58 %     0.89 %     733,000       (16,000 )
AG CNG Funds LP
    80,363       43,242       123,605       0.81 %     0.53 %     0.81 %     669,000       (14,000 )
Nutmeg Partners LP
    78,780       42,709       121,489       0.80 %     0.52 %     0.80 %     658,000       (14,000 )
AG MM LP
    47,425       25,625       73,050       0.48 %     0.31 %     0.48 %     395,000       (8,000 )
AG Princess LP
    34,307       18,685       52,992       0.35 %     0.23 %     0.35 %     287,000       (6,000 )
PHS Patriot Fund LP
    10,525       0       10,525       0.00 %     0.07 %     0.07 %     57,000       (1,000 )
                                                                 
                                                                 
TOTAL
    9,857,984       5,338,579       15,196,563       100.00 %     64.87 %     100 %   $ 82,257,000     $ (1,754,000 )
 
Opinion of Perella Weinberg, Financial Advisor to the Special Committee
 
Pursuant to an engagement letter dated June 29, 2011, the Special Committee retained Perella Weinberg to act as its financial advisor in connection with the proposed Merger. The Special Committee selected Perella Weinberg based on Perella Weinberg’s qualifications, expertise and reputation and experience in affiliate transactions. Perella Weinberg, as part of its investment banking business, is continually engaged in performing financial analyses with respect to businesses and their securities in connection with mergers and acquisitions, affiliate transactions, leveraged buyouts and other transactions as well as for corporate and other purposes.
 
On October 2, 2011, Perella Weinberg rendered its oral opinion, subsequently confirmed in writing, to the Special Committee to the effect that, as of such date, and based upon and subject to the various assumptions and limitations set forth in the opinion, the Merger Consideration of $9.75 per share to be received by holders of Common Stock pursuant to the Merger Agreement (other than holders of Excluded Shares) was fair from a financial point of view to such holders.
 
The full text of Perella Weinberg’s written opinion, dated October 2, 2011, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken by Perella Weinberg, is attached as Annex C and is incorporated by reference herein.  The opinion does not address the underlying business decision of C&D to enter into the Merger or the relative merits of the Merger as compared with any other strategic alternative which may be available to C&D. The opinion was not intended to be and does not constitute a recommendation to any holder of Common Stock as to how such holder should act with respect to the proposed Merger or any other matter and does not in any manner address the prices at which the Common Stock will trade at any time.  In addition, Perella Weinberg expressed no opinion as to the fairness of the Merger to, or any consideration received in connection with the Merger by, the Angelo Gordon Entities or the holders of any other class of securities, creditors or other constituencies of C&D. Perella Weinberg provided its opinion only for the information and assistance of the Special Committee in connection with, and for the purposes of its evaluation of, the Merger, and it may not be relied upon by any other person. This summary is qualified in its entirety by reference to the full text of the opinion.
 
In arriving at its opinion, Perella Weinberg, among other things:
 
 
reviewed certain publicly available financial statements, financial forecasts and other business and financial information of or relating to C&D, including research analyst reports;
 
 
reviewed the C&D Management Projections;
 
 
discussed the past and current operations, financial condition and prospects of C&D with management of C&D and members of the C&D Board (other than Todd Arden);
 
 
compared the financial performance of C&D with that of certain publicly traded companies which it believed to be generally relevant;
 
 
reviewed the historical trading prices and trading activity of the Common Stock, and compared such prices and trading activity with that of securities of certain publicly traded companies which it believed to be generally relevant;
 
 
reviewed the premiums paid in certain publicly available transactions which it believed to be generally relevant;
 
 
reviewed the Merger Agreement; and
 
 
conducted such other financial studies, analyses and investigations, and considered such other factors, as it deemed appropriate.
 
 
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In arriving at its opinion, Perella Weinberg assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information supplied or otherwise made available to it (including information that was available from generally recognized public sources) for purposes of its opinion and further relied upon the assurances of the management of C&D that information furnished by them for purposes of its analysis did not contain any material omissions or misstatements of material fact.  With respect to the C&D Management Projections, Perella Weinberg was advised by the management of C&D and assumed, with the consent of the Special Committee, that the C&D Management Projections had been reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of management of C&D as to the future financial performance of C&D and the other matters covered thereby, and Perella Weinberg expressed no view as to the assumptions on which they are based.  In addition, the Special Committee advised Perella Weinberg that the Cost-Cutting Initiatives and the Potential Growth Opportunities under consideration by C&D and the assessment of their expected financial impact were at a very preliminary stage and that the C&D Board had not made any decision to pursue or implement them.  Perella Weinberg adjusted the C&D Management Projections to exclude the impact of certain restructuring costs, professional fees and other expenses that were deemed to be extraordinary in nature and non-recurring and, therefore, not representative of the underlying performance of C&D’s business.  In addition, Perella Weinberg adjusted the C&D Management Projections to include income attributable to C&D’s minority partner in its Chinese joint venture in order to reflect the expected performance of C&D on a consolidated basis.  Perella Weinberg then deducted the value of such minority interest from enterprise value in its financial analyses, consistent with industry practice.
 
In arriving at its opinion, Perella Weinberg did not make any independent valuation or appraisal of the assets or liabilities (including any contingent, derivative or off-balance-sheet assets and liabilities) of C&D, nor was it furnished with any such valuations or appraisals, nor did it assume any obligation to conduct, nor did it conduct, any physical inspection of the properties or facilities of C&D.  In addition, Perella Weinberg did not evaluate the solvency of any party to the Merger Agreement, including under any state or federal laws relating to bankruptcy, insolvency or similar matters.  Perella Weinberg assumed that the Merger would be consummated in accordance with the terms set forth in the Merger Agreement, without material modification, waiver or delay.  Furthermore, Perella Weinberg assumed that in connection with the receipt of all the necessary approvals of the proposed Merger, no delays, limitations, conditions or restrictions would be imposed that could have an adverse effect on C&D.  Perella Weinberg relied as to all legal matters relevant to rendering its opinion upon the advice of counsel.
 
Perella Weinberg’s opinion addressed only the fairness from a financial point of view, as of the date thereof, of the Merger Consideration of $9.75 per share to be received by the holders of Common Stock pursuant to the Merger Agreement (other than holders of Excluded Shares). Perella Weinberg was not asked to, nor did it, offer any opinion as to any other term of the Merger Agreement (or any other related agreement) or the form or structure of the Merger or the likely timeframe in which the Merger would be consummated.  In addition, Perella Weinberg expressed no opinion as to the fairness of the amount or nature of any compensation to be received by any officers, directors or employees of any parties to the Merger, or any class of such persons, whether relative to the Merger Consideration of $9.75 per share to be received by the holders of Common Stock pursuant to the Merger Agreement (other than holders of Excluded Shares) or otherwise.  Perella Weinberg did not express any opinion as to any tax or other consequences that may result from the transactions contemplated by the Merger Agreement or any other related document, nor did its opinion address any legal, tax, regulatory or accounting matters, as to which it understood C&D had received such advice as it deemed necessary from qualified professionals.  Perella Weinberg’s opinion did not address the underlying business decision of C&D to enter into the Merger or the relative merits of the Merger as compared with any other strategic alternative which may have been available to C&D. Perella Weinberg was not authorized to solicit and did not solicit indications of interest in a transaction with C&D from any party.
 
Perella Weinberg’s opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to it as of, the date thereof, and upon certain assumptions regarding such financial, economic, market and other conditions which have been subject to unusual volatility and which, if different than assumed, may have had a material impact on Perella Weinberg’s analyses.  It should be understood that subsequent developments may affect Perella Weinberg’s opinion, and Perella Weinberg does not have any obligation to update, revise or reaffirm its opinion.  The issuance of Perella Weinberg’s opinion was approved by a fairness opinion committee of Perella Weinberg.
 
 
21

 
 
Summary of Material Financial Analyses
 
The following is a brief summary of the material financial analyses performed by Perella Weinberg and reviewed by the Special Committee in connection with Perella Weinberg’s opinion relating to the Merger and does not purport to be a complete description of the financial analyses performed by Perella Weinberg. The order of analyses described below does not represent the relative importance or weight given to those analyses by Perella Weinberg. Some of the summaries of the financial analyses include information presented in tabular format. In order to fully understand Perella Weinberg’s financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Perella Weinberg’s financial analyses.
 
Historical Stock Trading.  Perella Weinberg reviewed the historical trading price per share of Common Stock for the period starting on October 21, 2010, the date on which C&D announced its debt-for-equity exchange, and ending on June 15, 2011, the date prior to the date on which news of a potential acquisition of C&D by an affiliate of Acquiror became public, which date is referred to herein as the “Unaffected Price Date.”  After giving effect to rounding, Perella Weinberg noted that the range of closing market prices per share of Common Stock during such period was $3.70 to $8.20.  The historical stock trading analysis provided general reference points with respect to the trading prices of Common Stock which enabled Perella Weinberg to compare the historical prices with the price of the Merger Consideration of $9.75 per share to be paid to stockholders pursuant to the Merger Agreement (other than holders of Excluded Shares).
 
Analysis of Implied Premiums.  Perella Weinberg calculated the implied premium represented by the Merger Consideration of $9.75 per share to be received by the holders of Common Stock pursuant to the Merger Agreement (other than holders of Excluded Shares) relative to the following:
 
 
the closing market price per share of Common Stock on September 30, 2011, the last trading day prior the delivery of its opinion; and
 
 
the closing market price per share of Common Stock on the Unaffected Price Date.
 
The results of these calculations are summarized in the following table:
 
 
Per Share
Closing Price
Implied Premium of
Merger Consideration
of $9.75 per share
September 30, 2011
$7.42
31.4%
Unaffected Price Date (June 15, 2011)
$8.24
18.3%
 
In the analysis of implied multiples, Perella Weinberg first derived the implied enterprise value of C&D based on the Merger Consideration of $9.75 per share to be received by the holders of Common Stock pursuant to the Merger Agreement (other than holders of Excluded Shares).  Enterprise value for C&D was calculated as the aggregate value of C&D’s fully diluted equity (based on the total number of fully diluted outstanding shares of Common Stock and the Merger Consideration of $9.75 per share) plus debt at book value and minority interest at book value, less cash and cash equivalents as provided by C&D management as of July 31, 2011. Perella Weinberg also reviewed historical and estimated earnings before interest, taxes, depreciation and amortization, which is referred to as EBITDA, for C&D for certain periods described below.  In addition, Perella Weinberg calculated an implied adjusted enterprise value for C&D, which is referred to herein as the “Pension Adjusted Enterprise Value,” based on the Merger Consideration of $9.75 per share to be received by the holders of Common Stock pursuant to the Merger Agreement (other than holders of Excluded Shares), which was calculated as enterprise value plus the sum of (i) after-tax underfunded pension plan liabilities of C&D and (ii) unfunded post-employment benefit liabilities for C&D, in each case as of January 31, 2011 based on C&D’s public filings. Perella Weinberg also derived an adjusted EBITDA for C&D for certain periods described below, which was calculated as EBITDA, plus periodic benefit cost net of service cost for pension obligations and other postretirement benefits, which is referred to herein as “Adjusted EBITDA.”
 
Analysis of Multiples of Financial Results.  Perella Weinberg calculated the following multiples of historical and estimated financial results for C&D:
 
 
enterprise value as a multiple of estimated EBITDA for calendar year 2011 (equivalent to fiscal year ended January 31, 2012 based on the C&D Management Projections);
 
 
22

 
 
 
enterprise value as a multiple of next twelve months, or NTM, EBITDA;
 
 
enterprise value as a multiple of estimated EBITDA for calendar year 2012 (equivalent to fiscal year ended January 31, 2013 based on the C&D Management Projections);
 
 
Pension Adjusted Enterprise Value as a multiple of estimated Adjusted EBITDA for calendar year 2011 (equivalent to fiscal year ended January 31, 2012 based on the C&D Management Projections);
 
 
Pension Adjusted Enterprise Value as a multiple of NTM Adjusted EBITDA; and
 
 
Pension Adjusted Enterprise Value as a multiple of estimated Adjusted EBITDA for calendar year 2012 (equivalent to fiscal year ended January 31, 2013 based on the C&D Management Projections).
 
The results of these analyses are summarized in the following table:
 
Financial Multiple
Based on the Merger Consideration
of $9.75 per share
Enterprise Value /
 
CY 2011E (FY 2012E) EBITDA
9.2x
NTM EBITDA
6.5x
CY 2012E (FY 2013E) EBITDA
5.5x
Pension Adjusted Enterprise Value /
 
CY 2011E (FY 2012E) Adjusted EBITDA
9.0x
NTM Pension Adjusted EBITDA
6.6x
CY 2012E (FY 2013E) Adjusted EBITDA
5.7x
 
Illustrative Premiums Paid Analysis.  Perella Weinberg analyzed the premiums paid in 33 “going-private” transactions involving a majority stockholder of United States target companies since August 2006 and 94 “going-private” transactions involving a majority stockholder of United States companies since August 2001, in each case with transaction values in excess of $10 million. For each of the transactions, based on publicly available information, Perella Weinberg calculated the premiums of the offer price in the transaction to the target company’s closing stock price one day, one week and one month prior to the announcement of the transaction. Perella Weinberg observed that since August 2006 the median premiums to target company closing stock price one day, one week and one month prior to transaction announcement were 28.7%, 28.6% and 29.0%, respectively.  Perella Weinberg also observed that since August 2001 the median premiums to target company closing stock price one day, one week and one month prior to transaction announcement were 25.5%, 25.8% and 25.7%, respectively.  Perella Weinberg observed that the implied premium represented by the Merger Consideration of $9.75 per share to be received by the holders of Common Stock pursuant to the Merger Agreement (other than holders of Excluded Shares) relative to $7.42, the closing market price per share of Common Stock on September 30, 2011, was 31.4%, and relative to $8.24, the closing market price per share of Common Stock on the Unaffected Price Date, was 18.3%.
 
Selected Publicly Traded Companies Analysis.  Perella Weinberg reviewed and compared certain financial information for C&D to corresponding financial information, ratios and public market multiples for the following publicly traded companies in the electrical power storage systems industry, which, in the exercise of its professional judgment and based on its knowledge of such industries, Perella Weinberg determined to be relevant to its analysis. Although none of the following companies is identical to C&D, Perella Weinberg selected these companies because they had publicly traded equity securities and were deemed to be comparable to C&D in one or more respects including the nature of their business, size, financial performance and geographic concentration.
 
Selected Peers
Other Strategic Players
EnerSys
Johnson Controls, Inc.
Exide Technologies
GS Yuasa Corporation
 
Greatbatch, Inc.
 
Power-One, Inc.
 
Maxwell Technologies, Inc.
 
Ultralife Corporation
 
 
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For each of the selected companies, Perella Weinberg calculated and compared financial information and various financial market multiples and ratios based on the closing price per share as of September 30, 2011, SEC filings for historical information and third-party research estimates from FactSet and Institutional Brokers’ Estimate System for forecasted information. For C&D, Perella Weinberg made calculations based on the closing market price per share of Common Stock as of September 30, 2011 and the Unaffected Price Date, and the Merger Consideration of $9.75 per share, and utilized the C&D Management Projections and third-party research estimates from FactSet and Institutional Brokers’ Estimate System for forecasted information.
 
With respect to C&D and each of the selected companies, Perella Weinberg reviewed enterprise value and Pension Adjusted Enterprise Value as a multiple of estimated revenue, estimated EBITDA, estimated Adjusted EBITDA and estimated earnings per share for each of calendar years 2011 and 2012.  The results of these analyses are summarized in the following table:
 
 
CY 2011E Multiples
 
CY 2012E Multiples
 
Enterprise Value / Revenue
 
Enterprise Value / EBITDA
 
Pension Adjusted Enterprise Value / Adjusted EBITDA
 
Price / Earnings Per Share
 
Enterprise Value / Revenue
 
Enterprise Value / EBITDA
 
Pension Adjusted Enterprise Value / Adjusted EBITDA
 
Price / Earnings Per Share
Mean
(Selected Peers)
0.4x
 
4.4x
 
4.7x
 
6.8x
 
0.4x
 
3.9x
 
4.1x
 
5.5x
Range
(Selected Peers)
0.3x – 0.5x
 
4.0x – 4.8x
 
4.5x – 4.9x
 
5.7x – 8.0x
 
0.3x – 0.5x
 
3.3x – 4.4x
 
3.7x – 4.5x
 
3.4x – 7.5x
Mean
(Other Strategic  Players)
1.1x
 
13.2x
 
14.1x
 
54.2x
 
1.0x
 
6.5x
 
6.7x
 
12.2x
Range
(Other Strategic  Players)
0.5x – 3.2x
 
2.3x – 50.4x
 
2.3x – 55.3x
 
5.1x – 263.0x
 
0.5x – 2.5x
 
2.1x – 16.4x
 
2.1x – 16.8x
 
4.5x – 30.7x
C&D
(September 30, 2011)
0.5x
 
7.6x
 
7.6x
 
81.8x
 
0.4x
 
4.6x
 
4.8x
 
9.0x
C&D
(Merger Consideration of $9.75 per share)
0.6x
 
9.2x
 
9.0x
 
107.5x
 
0.5x
 
5.5x
 
5.7x
 
11.8x
C&D
(Unaffected Price Date)
0.5x
 
8.1x
 
8.1x
 
90.9x
 
0.4x
 
4.9x
 
5.1x
 
10.0x
 
Perella Weinberg also reviewed the historical enterprise value as a multiple of NTM EBITDA for the period September 2006 through September 2011 for C&D, the Selected Peers individually and the median of the Other Strategic Players.  Perella Weinberg calculated the average value of the enterprise value as a multiple of NTM EBITDA since September 2006, September 2008, September 2010 and March 2011. The results of these analyses are summarized in the following table:
 
 
Historical NTM EBITDA Multiples
 
6 month average
 
1 year average
 
3 year average
 
5 year average
Average (Selected Peers)
5.2x
 
5.7x
 
5.2x
 
6.3x
Average (Other Strategic Players)
6.8x
 
7.2x
 
7.5x
 
8.3x
C&D
NA
 
NA
 
6.1x
 
9.0x
 
 
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Based on current trading multiples for the selected publicly traded companies, the analysis of historical trading multiples and on judgments made by Perella Weinberg, Perella Weinberg selected a representative range of forward-looking EBITDA multiples of 4.5x-5.0x and applied that range of multiples to C&D’s estimated EBITDA for the fiscal year ending January 31, 2013. Perella Weinberg noted that this analysis implied a per share equity reference range for Common Stock of $7.10 to $8.40.  Perella Weinberg also measured the implied equity reference range for Common Stock incorporating a scenario prepared by C&D management involving the potential closure of a manufacturing facility in Milwaukee, Wisconsin being considered by C&D as a Cost-Cutting Initiative, which is referred to herein as the “Streamline Scenario.”  This analysis implied a per share equity reference range for Common Stock of $6.70 to $7.90.  Although the selected companies were used for comparison purposes, no business of any selected company was either identical or directly comparable to C&D’s business. Accordingly, Perella Weinberg’s comparison of selected companies to C&D and analysis of the results of such comparisons was not purely mathematical, but instead necessarily involved complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the relative values of the selected companies and C&D.
 
Discounted Illustrative Future Stock Price Analysis.  Perella Weinberg performed an illustrative analysis of the discounted future price per share of Common Stock, which is designed to provide an indication of the present value of a theoretical future value of Common Stock, assuming such future share price is derived from C&D’s estimated EBITDA and an assumed enterprise value to estimated EBITDA multiple.  For this analysis, Perella Weinberg used financial information from the C&D Management Projections and incorporated the impact of the Streamline Scenario for the calendar year 2013.  Perella Weinberg first calculated the implied value per share of Common Stock at the end of calendar year 2012 based on applying forward-looking multiples of enterprise value to EBITDA of 4.5x to 5.0x to the EBITDA estimate for the fiscal year ending January 31, 2014 from the C&D Management Projections.  Perella Weinberg then discounted the 2012 year end implied share price values back to September 30, 2011 using an assumed cost of equity of 17.0%, which resulted in a range of implied present values per share of Common Stock of $7.80 to $9.00.
 
The implied present value of future prices per share of Common Stock was reviewed for illustrative purposes only. The illustrative future prices per share of Common Stock should not be viewed as an accurate representation of what actual prices per share of Common Stock will be.  Actual prices per share of Common Stock for any period may be greater or less than the illustrative future prices per share of Common Stock reviewed by Perella Weinberg, and the differences may be material.  Future share prices are inherently uncertain, being based upon numerous factors or events that are not possible to predict.
 
Discounted Cash Flow Analysis.  Perella Weinberg conducted a discounted cash flow analysis for C&D to calculate the present value as of September 30, 2011 of the estimated standalone unlevered free cash flows that C&D could generate during the period commencing in the second half of the fiscal year ended January 31, 2012 through the fiscal year ended January 31, 2014. Estimates of unlevered free cash flows used for this analysis utilized the C&D Management Projections prepared by C&D management. Perella Weinberg also calculated a range of terminal values assuming terminal year multiples of next twelve months EBITDA ranging from 4.5x to 5.5x.  Based on the C&D Management Projections, Perella Weinberg used discount rates ranging from 14.0% to 16.0% based on estimates of the weighted average cost of capital of C&D. The present values of unlevered free cash flows generated over the period described above were then added to the present values of terminal values resulting in a range of implied enterprise values for C&D. For such range of implied enterprise values resulting from the application of such multiple to EBITDA, Perella Weinberg derived ranges of implied equity values for C&D by subtracting the debt at book value and minority interest at book value and by adding cash and cash equivalents. These analyses resulted in an implied equity value per share of Common Stock of $6.40 to $8.80.
 
Miscellaneous
 
The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth herein, without considering the analyses or the summary as a whole, could create an incomplete view of the processes underlying Perella Weinberg’s opinion. In arriving at its fairness determination, Perella Weinberg considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis. Rather, Perella Weinberg made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the analyses described herein as a comparison is directly comparable to C&D or the Merger.
 
Perella Weinberg prepared the analyses described herein for purposes of providing its opinion to the Special Committee as to the fairness, from a financial point of view, as of the date of such opinion, of the Merger Consideration of $9.75 per share to be received by holders of Common Stock pursuant to the Merger Agreement (other than holders of Excluded Shares). These analyses do not purport to be appraisals or necessarily reflect the prices at which businesses or securities actually may be sold. Perella Weinberg’s analyses were based in part upon the C&D Management Projections and third-party research analyst estimates, which are not necessarily indicative of actual future results, and which may be significantly more or less favorable than suggested by Perella Weinberg’s analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties to the Merger Agreement or their respective advisors, none of C&D, Perella Weinberg or any other person assumes responsibility if future results are materially different from those forecasted by C&D management or third parties.
 
 
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As described above, the opinion of Perella Weinberg to the Special Committee was one of many factors taken into consideration by the C&D Board in making its determination to approve the Merger. Perella Weinberg was not asked to, and did not, recommend the specific consideration provided for in the Merger Agreement, which consideration was determined through negotiations between C&D and Acquiror.
 
Pursuant to the terms of the engagement letter between Perella Weinberg and C&D, C&D agreed to pay to Perella Weinberg a fee of $1.5 million for its services, of which $1.25 million became payable upon Perella Weinberg’s delivery of its opinion. In addition, C&D agreed to reimburse Perella Weinberg for its reasonable expenses, including attorneys’ fees and disbursements, and to indemnify Perella Weinberg and related persons against various liabilities, including certain liabilities under the federal securities laws.
 
In the ordinary course of its business activities, Perella Weinberg or its affiliates may at any time hold long or short positions, and may trade or otherwise effect transactions, for its own account or the accounts of customers or clients, in debt or equity or other securities (or related derivative securities) or financial instruments (including bank loans or other obligations) of C&D or Acquiror or any of their respective affiliates.  During the two-year period prior to the date of Perella Weinberg’s opinion, no material relationship existed between Perella Weinberg and its affiliates and C&D or Acquiror pursuant to which compensation was received by Perella Weinberg or its affiliates; however Perella Weinberg and its affiliates may in the future provide investment banking and other financial services to C&D and Acquiror and their respective affiliates and in the future may receive compensation for the rendering of such services.
 
Position of Acquiror, Merger Sub and the Angelo Gordon Entities as to the Fairness of the Merger
 
We refer to Acquiror, Merger Sub and the Angelo Gordon Entities collectively as the “Angelo Gordon Affiliates.”  Under SEC rules, the Angelo Gordon Affiliates are required to provide certain information regarding their position as to the substantive and procedural fairness of the Merger to the unaffiliated stockholders of C&D.  The Angelo Gordon Affiliates are making the statements included in this section solely for purposes of complying with such requirements. The Angelo Gordon Affiliates’ views as to the fairness of the proposed Merger should not be construed as a recommendation to any stockholder as to whether any stockholder should exercise its appraisal rights with respect to the proposed Merger.  The Angelo Gordon Affiliates agree with the analyses and conclusions of the Special Committee and the C&D Board, based upon the reasonableness of those analyses and conclusions, which they adopt, and their respective knowledge of C&D, as well as the factors considered by, and the findings of, the Special Committee and the C&D Board with respect to the fairness of the Merger to the unaffiliated stockholders. The Cost-Cutting Initiatives and their impact on the C&D Management Projections did not affect the analysis of the Merger Consideration by the Angelo Gordon Affiliates. Furthermore, the Angelo Gordon Affiliates do not believe that the elimination of the Majority of the Minority Condition impacted the procedural fairness of the Merger given that such a condition is not a legal requirement and the fact that the stockholders of C&D unaffiliated with the Angelo Gordon Affiliates were represented by a special committee of independent, disinterested directors that engaged in a thorough negotiation process relating to the Merger with the assistance of independent legal and financial advisors. The Angelo Gordon Affiliates believe that the Merger Agreement and the Merger are substantively and procedurally fair to the unaffiliated stockholders of C&D on the basis of the factors described under “C&D’s Reasons for the Merger.”
 
The foregoing discussion of the information and factors considered and given weight by the Angelo Gordon Affiliates in connection with the fairness of the Merger Agreement and the Merger is not intended to be exhaustive but is believed to include all material factors considered by the Angelo Gordon Affiliates. The Angelo Gordon Affiliates did not find it practicable to, and did not, quantify or otherwise attach relative weights to the foregoing factors in reaching their position as to the fairness of the Merger Agreement and the Merger. The Angelo Gordon Affiliates believe that the foregoing factors provide a reasonable basis for their belief that the Merger is fair to C&D and its unaffiliated stockholders.
 
Houlihan Lokey Presentation

The Angelo Gordon Affiliates retained Houlihan Lokey as their financial advisor to provide certain financial advisory services in connection with a potential transaction involving C&D, including assessing potential transaction terms.  As previously mentioned in “Background of the Merger” above, on June 14, 2011, Houlihan Lokey presented the Houlihan Lokey Presentation to representatives of the Angelo Gordon Affiliates.  Houlihan Lokey did not prepare the Houlihan Lokey Presentation for the benefit of any party (including any of C&D’s unaffiliated stockholders, the Special Committee or the C&D Board) apart from the Angelo Gordon Affiliates.  The Houlihan Lokey Presentation was prepared by Houlihan Lokey based on publicly available information and discussions with the Angelo Gordon Affiliates and without the benefit of the C&D Management Projections.  In preparing the Houlihan Lokey Presentation, Houlihan Lokey assumed and relied upon the accuracy and completeness of the financial and other information discussed with or reviewed by it without (and without assuming responsibility for) independent verification of such information. All projections, estimates and other information with respect to operations reflected in the Houlihan Lokey Presentation were prepared or derived from public sources and discussions with the Angelo Gordon Affiliates.  Houlihan Lokey expressed no opinion with respect to any projections or estimates included in the Houlihan Lokey Presentation or the assumptions on which they are based.  The full text of the Houlihan Lokey Presentation has been filed as an exhibit to Item 16 in the amended Schedule 13e-3 filed with the SEC in connection with the Merger and is incorporated herein by reference.  The Houlihan Lokey Presentation was not intended to be and does not constitute a recommendation to any holder of Common Stock as to how such holder should act with respect to the proposed Merger or any other matter and does not in any manner address the prices at which the Common Stock will trade at any time.  Houlihan Lokey did not determine or recommend the Merger Consideration of $9.75 per share to be paid in connection with the Merger.  Houlihan Lokey was not asked to deliver and has not delivered an opinion to the Angelo Gordon Affiliates or any other party as to the fairness, from a financial point of view or otherwise, of the Merger Consideration to be paid.
 
 
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In performing its analyses, Houlihan Lokey considered general business, economic, industry and market conditions, financial and otherwise, and other matters as they existed on, and could be evaluated as of, the date of the Houlihan Lokey Presentation.  Houlihan Lokey’s analyses involved judgments and assumptions with regard to industry performance, general business, economic, regulatory, market and financial conditions and other matters, many of which are beyond the control of C&D, such as the impact of competition on the business of C&D and on the industry generally, industry growth and the absence of any material change in the financial condition and prospects of C&D or the industry or in the markets generally. No company, business or transaction used in the analyses for comparative purposes is identical to C&D or the Merger, and an evaluation of the results of those analyses is not entirely mathematical. Rather, the analyses involve complex considerations, judgments and assumptions concerning financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the companies, business segments or transactions analyzed. Houlihan Lokey believes that mathematical derivations (such as determining an average or median) of financial data are not by themselves meaningful and should be considered together with judgments and informed assumptions. The assumptions and estimates contained in Houlihan Lokey’s analyses and the reference ranges resulting from any particular analysis are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by its analyses. In addition, analyses relating to the value of assets, businesses or securities do not purport to be appraisals or to reflect the prices at which assets, businesses or securities actually may be sold or acquired. Accordingly, the assumptions and estimates used in, and the results derived from, Houlihan Lokey’s analyses are inherently subject to substantial uncertainty.

The following is a summary of the material preliminary analyses presented in the Houlihan Lokey Presentation. The order of analyses in this summary does not represent relative importance or weight given to those analyses by Houlihan Lokey. This summary of Houlihan Lokey’s analyses is not a complete description of the analyses presented in the Houlihan Lokey Presentation.
 
Selected Companies Analysis

Houlihan Lokey calculated multiples of enterprise value based on certain financial data for C&D and nine selected companies operating in the electrical power storage systems industry. Houlihan Lokey calculated each selected company’s enterprise value as a multiple of its Adjusted EBITDA for the latest 12 months and estimates of Adjusted EBITDA for the fiscal periods ending December 31, 2011 and 2012. The selected companies analysis indicated an implied per share equity reference range for C&D of $3.75 to $9.58.

Selected Transactions Analysis

Houlihan Lokey calculated multiples of enterprise value based on the estimated purchase prices paid in 28 selected publicly-announced transactions in the electrical power storage manufacturing, development and design industries. The calculations expressed the enterprise value of each target as a multiple of such target’s latest 12 month EBITDA. The selected transactions analysis indicated an implied per share equity reference range for C&D of $5.47 to $7.76.

Discounted Cash Flow Analysis

Houlihan Lokey performed a discounted cash flow analysis of C&D by calculating the estimated net present value of the unlevered, after-tax free cash flows that C&D was estimated to generate through the fiscal year ending January 31, 2016, based on historical financial information, discussions with Angelo Gordon and financial analyst estimates for certain comparable companies. The discounted cash flow analysis indicated an implied per share equity reference range for C&D of $6.62 to $8.30.

Minority Squeeze-Out Analysis

Houlihan Lokey reviewed the publicly available financial terms of 15 minority squeeze-out transactions announced between April 2009 and June 2011, and calculated the mean and median price per share premiums for the one-day, one-week and one-month periods after the announcement of each transaction. Analysis of such premiums implied a per share equity reference range for C&D of $10.00 to $10.80.
 
 
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Purposes and Reasons of Acquiror, Merger Sub and the Angelo Gordon Entities for the Merger
 
The Angelo Gordon Affiliates decided to pursue the Merger because they believe that C&D can be operated more effectively as a privately owned company. In addition, the Angelo Gordon Affiliates believe that the Merger will allow the unaffiliated stockholders to receive a significantly attractive value for their shares of Common Stock, which value had not been reflected in the recent trading price of the Common Stock.
 
As a privately owned company, C&D would have increased flexibility to make decisions that may negatively affect quarterly results but that may, over the long term, increase C&D’s value. In contrast, as a publicly traded company, C&D currently faces public stockholder and investment analyst pressure to make decisions that may produce better short-term results, but which may over the long term lead to a reduction in the per share price of its Common Stock. As a privately owned company, C&D would also be relieved of many of the other burdens and constraints imposed on public companies. The need for management to be responsive to public stockholder concerns and to engage in an ongoing dialogue with public stockholders may at times distract management’s time and attention from the effective operation and improvement of the business. The Angelo Gordon Affiliates have undertaken to pursue the Merger at this time in light of the underperformance of C&D’s stock price and the opportunity to take advantage of the foregoing benefits that they believe can be realized in connection with the Merger.
 
In the ordinary course, the Angelo Gordon Entities consider all potential alternatives with respect to their investment holdings, including its investment in C&D.  However, no specific alternative to the Merger was considered in any material respect in connection with the Angelo Gordon Affiliates’ review and analysis of whether to pursue the Merger.
 
Plans for C&D
 
Upon the consummation of the Merger, the separate existence of Merger Sub will cease and C&D will continue its existence as the surviving corporation. The surviving corporation will possess all the rights, privileges, immunities, powers, liabilities and duties of C&D.  It is expected that, initially following the Merger, the business and operations of C&D will be continued by C&D substantially as they are currently being conducted.  Except as indicated in this information statement, Acquiror does not have any present plans or proposals which relate to or would result in an extraordinary transaction, such as a merger, reorganization or liquidation, involving C&D, a sale or transfer of a material amount of assets of C&D, any material change in C&D’s capitalization or dividend policy or any other material change in C&D’s corporate structure or business.  However, Acquiror will continue to evaluate the business and operations of C&D prior to and after the Merger, and will take such actions as it deems appropriate under the circumstances then existing.  Acquiror reserves the right to make any changes deemed appropriate in light of such evaluation.
 
Summary of C&D Management Projections
 
C&D does not as a matter of course publicly disclose forecasts or internal projections as to future performance, revenues, earnings, financial condition or other results due to, among other reasons, the uncertainty of the underlying assumptions and estimates. However, in connection with the negotiation and review of the Merger Agreement by the C&D Board and the Special Committee, C&D management prepared the C&D Management Projections, which contain unaudited prospective financial information on a standalone, pre-Merger basis.  C&D is electing to provide the C&D Management Projections in this information statement to provide the stockholders of C&D access to certain non-public unaudited prospective financial information that was made available to Acquiror and its financial advisor, Houlihan Lokey, and affiliates of Acquiror and to the Special Committee’s financial advisor in connection with the Merger.  The C&D Management Projections were not prepared with a view toward public disclosure and the inclusion of the C&D Management Projections in this information statement should not be regarded as an indication that C&D or any other recipient of the C&D Management Projections considered, or now considers, it to be necessarily predictive of actual future results.  Neither C&D nor its affiliates assume any responsibility for the accuracy of the C&D Management Projections.  The C&D Management Projections were not prepared with a view toward complying with the guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation, presentation or presentation financial information.  There can be no assurance that the assumptions made in preparing the C&D Management Projections will prove accurate or that the projected results reflected therein will be realized.  Readers of this information statement are cautioned not to place undue reliance on the C&D Management Projections.
 
Neither PricewaterhouseCoopers LLP (C&D’s independent registered public accounting firm) nor any other independent accountants, have compiled, examined or performed any procedures with respect to the C&D Management Projections, nor have they expressed any opinion or any other form of assurance on the C&D Management Projections or their achievability, and assume no responsibility for, and disclaim any association with, the C&D Management Projections.
 
PricewaterhouseCoopers LLP’s report incorporated by reference in this information statement refers exclusively to C&D’s historical financial information.  PricewaterhouseCoopers LLP’s report does not cover any other information in this information statement and should not be read as doing so.
 
 
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The C&D Management Projections include forward-looking statements and are based on estimates and assumptions that are inherently subject to factors such as industry performance, competition, general business, economic, regulatory, market and financial conditions, as well as changes to the business, financial condition or results of operation of C&D, including the factors described under “Cautionary Statement Concerning Forward-Looking Statements” beginning on page 7, and other risk factors as disclosed in C&D’s filings with the SEC that could cause actual results to differ materially from those shown below.  C&D stockholders are urged to review C&D’s most recent SEC filings, including C&D’s Annual Report on Form 10-K, for a description of risk factors with respect to C&D’s business. See “Cautionary Statement Concerning Forward-Looking Statements” beginning on page 7 and “Where You Can Find More Information” beginning on page 65.
 
The C&D Management Projections do not take into account any circumstance or event occurring after the date they were prepared or which may occur in the future, and, in particular, do not take into account any revised prospects of C&D’s business, changes in general business, regulatory or economic conditions, competition or any other transaction or event that has occurred since the date on which such C&D Management Projections were prepared or which may occur in the future.
 
C&D stockholders are urged to review C&D’s most recent SEC filings for a description of C&D’s reported results of operations, financial condition and capital resources during the fiscal year ended January 31, 2011.  See “Where You Can Find More Information” beginning on page 65.  No one has made or makes any representation to any stockholder of C&D regarding the information included in the C&D Management Projections or the ultimate performance of C&D compared to the C&D Management Projections.
 
The C&D Management Projections were, in general, prepared solely for internal use and are subjective in many respects and thus subject to interpretation.  Although the C&D Management Projections were based on historical experience and on various other assumptions that C&D management believes are reasonable under the circumstances and are presented with numeric specificity, the C&D Management Projections reflect numerous estimates and assumptions made by C&D management with respect to industry performance and competition, general business, economic, market and financial conditions and matters specific to C&D’s business, all of which are difficult to predict and many of which are beyond C&D’s control.  As a result, although presented with numerical specificity, the C&D Management Projections reflect numerous assumptions and estimates as to future events and there can be no assurance that these assumptions will accurately reflect future conditions, that the C&D Management Projections will be realized or that actual results will not be significantly higher or lower than estimated.  Because the C&D Management Projections cover multiple years, they by their nature become less predictive with each successive year.
 
For the foregoing reasons, as well as the bases and assumptions on which the C&D Management Projections were compiled, the inclusion of the C&D Management Projections in this information statement should not be regarded as an indication that such C&D Management Projections will be predictive of future results or events nor construed as financial guidance, and it should not be relied on as such or for any other purpose whatsoever.
 
The following table presents a summary of the material prospective financial information of C&D contained in the C&D Management Projections for the fiscal years ending January 31, 2012, 2013 and 2014, respectively:
 
Fiscal Year Ended January 31,
 
2012E
   
2013E
   
2014E
 
   
(in $ millions)
 
Sales
  $ 383     $ 447     $ 474  
Cost of Goods Sold
  $ 326     $ 370     $ 392  
Gross Profit
  $ 57     $ 77     $ 82  
Operating Expenses
  $ 45     $ 49     $ 51  
Operating Income
  $ 12     $ 28     $ 31  
Interest
  $ 5     $ 5     $ 5  
Taxes
  $ 0     $ 7     $ 9  
Other
  $ 4     $ 1     $ 1  
Minority Interest
  $ 1     $ 2     $ 3  
Net Income
  $ 2     $ 12     $ 13  
                         
EBITDA*
  $ 18     $ 35     $ 38  
Adjusted EBITDA**
  $ 22     $ 37     $ 40  
                         
                         
Cash flows from operating activities
  $ 6     $ 23     $ 25  
Cash flows from investing activities
  $ (9 )   $ (12 )   $ (12 )
Cash flows from financing activities
  $ 5     $ (7 )   $ (5 )
                         
Free Cash Flow***
  $ (3 )   $ 11     $ 13  
 
 
EBITDA is defined as Net Income plus interest, taxes, depreciation and amortization.
 
** 
Adjusted EBITDA is defined as EBITDA plus non-cash stock amortization, professional fees ssociated with the Merger Agreement and certain other non-recurring costs.
 
*** 
Free Cash Flow is defined as cash flows from operating activities less capital expenditures.
 
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The C&D Management Projections set forth in the table above include actual results for the first quarter of fiscal year 2012 and estimated financial results for the remainder of fiscal year 2012 through 2014.  Set forth below are the material assumptions relating to the C&D Management Projections:
 
General Assumptions
 
The C&D Management Projections include estimated legal and financial advisory fees payable by C&D in connection with the Merger Agreement and the transactions contemplated thereby of approximately $2.5 million and that additional related expenses may be incurred if the Merger were to be delayed or if there is any adverse change in associated pending litigation proceedings and that such changes could materially impact results of operations and cash flows.
 
Sales Assumptions
 
During recent periods, C&D’s sales have been negatively impacted by the global recessionary environment and economic downturn.  These economic uncertainties continue to be a major risk in achievement of these projections.  The projections above include actual sales for the three months ended April 30, 2011.  For the remainder of fiscal year 2012 and through fiscal year 2014, C&D management assumed revenue growth due to (i) increased customer confidence in purchasing C&D’s products as a result of C&D’s successful fiscal 2011financial restructuring, including recapture of market share, (ii) continued growth in C&D’s Asia business, (iii) acceptance of C&D’s projected new product introductions and (iv) over the longer term, general economic growth in C&D’s target markets.  These sales projections could be negatively impacted by a number of factors including, amongst others:
 
 
fluctuations in prices and availability of raw materials, particularly lead, could increase C&D’s costs or cause delays in shipments;
 
 
maintaining C&D’s manufacturing operations requires significant capital expenditures, and C&D’s failure to maintain C&D’s operations would have a material adverse impact on C&D’s ability to generate revenue;
 
 
maintaining and expanding C&D’s manufacturing capacity depends upon continued compliance with environmental laws and regulations, and adverse action taken by regulators could have a material adverse effect on C&D’s ability to generate revenue;
 
 
adverse economic or market changes in certain markets in which C&D conducts business;
 
 
pricing pressures from C&D’s larger customers and from the extremely competitive industries in which C&D operates;
 
 
difficulties or delays in product development;
 
 
C&D’s reliance on third parties whose operations are outside C&D’s control;
 
 
C&D’s customers that become insolvent or bankrupt; and
 
 
a change in C&D’s product mix.
 
 
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Cost of Goods Sold Assumptions
 
C&D’s cost of goods sold consists of material, labor, fixed and variable overhead, freight and depreciation of property and equipment related to the manufacturing of C&D’s products.  Lead is the primary cost component in C&D’s cost of goods sold.  C&D management assumed that the cost of lead will remain constant throughout the projection period.  The overall increase in cost of goods sold during the projection period is driven by (i) increased sales volume and (ii) assumed wage increases and medical inflation in fiscal year 2012 through fiscal year 2014.  These increases are offset by (i) assumed cost reductions associated with C&D’s closure of C&D’s Leola, Pennsylvania manufacturing facility, which was announced in the second quarter of fiscal year 2011 and (ii) assumed cost savings resulting from ongoing capital expenditures and manufacturing productivity improvements.  These projections could be adversely affected by increases in the cost of raw materials, particularly lead, the primary cost component of C&D’s battery products, or other product parts or components such as copper and plastics.  Lead represented approximately 40% of C&D’s cost of sales in fiscal year 2011.  Lead market prices averaged $0.89 per pound in fiscal year 2009, $0.83 per pound in fiscal year 2010, $0.98 per pound in fiscal year 2011 and $1.18 for the six months ended July 31 30, 2011.  C&D has lead clauses in many customer contracts which allow C&D to offset the changes in lead costs through higher/lower revenue; however, generally on a lag basis.  Sales price increases/decreases from the lead clauses are ultimately offset by higher/lower lead costs in direct materials.  A significant increase in the price of one or more raw materials, parts or components or the inability to successfully implement price increases/surcharges to mitigate such cost increases in a timely manner, or at all, could have a material adverse effect on these projections.
 
Operating Expenses Assumptions
 
C&D’s operating expenses primarily consist of (i) selling, general and administrative expenses, or SG&A, and (ii) research and development expenses.  SG&A expenses include salaries and related costs for C&D’s staff in sales, marketing, finance, information technology, human resource, legal and other administrative functions, costs for operating leases, office supplies, promotions, advertising and selling expenses.  SG&A expenses are expected to increase throughout the projection period due to (i) assumed wage increases and medical inflation, (ii) achievement of management incentive plan targets, (iii) increased commissions and selling expenses as a result of sales growth and (iv) increase sales headcount in Europe and Asia to support sales growth.  C&D’s research and development expenses include salary-related expenses for C&D’s engineering staff, costs for engineering equipment and prototypes, costs for operating leases and office- and  equipment-related expenditures, including depreciation of property and equipment.  Overall research and development expenses are projected to remain constant as a percentage of sales to support new product introductions and product design enhancements.
 
Interest Expense Assumptions
 
C&D management has assumed that, following the consummation of the Merger, C&D’s United States credit facility and its China line of credit will remain in place and interest rates on those debt instruments will remain unchanged throughout the projection period.
 
Other Expenses Assumptions
 
Other expenses are related to professional fees associated with the Merger Agreement and the transactions contemplated thereby, foreign currency exchange, bank fees and other non-operating expenses.  C&D management projects other expenses based on historical levels and expects the majority of these costs to remain flat with certain exceptions.  Other expenses for fiscal year 2012 includes a projected $2.5 million of professional fees associated with the Merger Agreement and the transactions contemplated thereby.
 
Cash Flow From Operating Activities
 
Cash flow from operating activities consists primarily of income (loss) from operations and changes in working capital.  Cash flow from operating activities is expected to improve due to increased net income driven by C&D’s expanding revenue base.  C&D management’s working capital projections assume constant days sales outstanding, improvement in inventory days on hand as a result of increased sales and an increase in days payable outstanding as C&D is able to negotiate more favorable payment terms with certain vendors as a result of C&D’s successful fiscal 2011 financial restructuring.  In addition, C&D management assumed, based on actuarial assumptions, a reduction in cash from operations resulting from projected required contributions to C&D’s pension plans.  Accounting for pensions requires the use of estimates and assumptions regarding discount rates, return on assets and compensation increases, among others and thus actual amounts may differ materially from the assumptions utilized in these projections.
 
Cash Flow From Investing Activities
 
Cash flow from investing activities consists primarily of capital expenditures related to equipment replacement. C&D management projected capital expenditures to be approximately $9 million, $12 million and $12 million in fiscal year 2012, 2013 and 2014, respectively.  The capital expenditures primarily relate to C&D’s projected cost reduction and productivity improvements, routine maintenance activities, sales growth in Asia and new product offerings.
 
 
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Cash Flow From Financing Activities
 
Cash flow from financing activities consists primarily of projected borrowings/repayments of C&D’s existing credit facility.
 
C&D HAS NOT UPDATED AND DOES NOT INTEND TO UPDATE OR OTHERWISE REVISE THE C&D MANAGEMENT PROJECTIONS, INCLUDING, WITHOUT LIMITATION, TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE THE C&D MANAGEMENT PROJECTIONS WERE PREPARED OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS, INCLUDING, WITHOUT LIMITATION, CHANGES IN GENERAL ECONOMIC, REGULATORY OR INDUSTRY CONDITIONS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE C&D MANAGEMENT PROJECTIONS ARE NO LONGER APPROPRIATE.
 
Financing for the Merger
 
Acquiror has obtained the equity financing commitment described below. The funding under this commitment is subject to conditions. Acquiror has represented to C&D that, if the financing is funded in accordance with the equity financing letter described herein, it will have sufficient committed equity to pay the Merger Consideration in respect of all shares of Common Stock (other than those shares owned by the Angelo Gordon Entities), all other amounts due in connection with the Merger and all fees and expenses required to be paid by Acquiror, Merger Sub and C&D in connection with the Merger. The obligations of Acquiror and Merger Sub under the Merger Agreement, including their obligations to consummate the Merger, are not subject to or conditioned upon the receipt of any financing, including the equity financing.
 
Equity Financing
 
Acquiror has entered into a letter agreement, which we refer to as the “equity financing letter,” with AG CNG Funds, L.P., AG MM, L.P., AG Capital Recovery Partners VI, L.P., AG Capital Recovery Partners VII, L.P., AG Eleven Partners, L.P., AG Garden Partners, L.P., AG Super Fund International Partners, L.P., Nutmeg Partners, L.P., AG Princess, L.P. and AG Super Fund, L.P. (collectively, the “Investors”), dated as of October 3, 2011, pursuant to which the Investors have committed, upon the terms and subject to the conditions set forth in the equity financing letter, to make or secure capital contributions to Acquiror for an aggregate of up to $53,833,274.65. Each Investor may assign all or a portion of its equity commitment to an affiliate, although no such assignment will affect the Investor’s commitment to make or secure capital contributions pursuant to the equity financing letter.
 
The Investors’ equity commitments are generally subject to the satisfaction of the conditions to Acquiror’s and Merger Sub’s obligations to effect the consummation of the Merger as set forth in the Merger Agreement. The equity financing contemplated by the equity financing letter will terminate upon the earliest to occur of (i) the consummation of the Merger (at which time each Investor’s obligation pursuant to the equity financing letter will be discharged) and (ii) the termination of the Merger Agreement in circumstances where Acquiror is not required to pay to C&D the amounts described under “The Merger Agreement—Termination Fees and Expenses” beginning on page 55.
 
Prior to the consummation of the Merger and subject to the terms and conditions of the equity financing letter, C&D is entitled to seek specific performance to cause Acquiror to draw down the full proceeds of the equity financing contemplated by the equity financing letter in the event that conditions to Acquiror’s and Merger Sub’s obligations to consummate the Merger have been satisfied.
 
Payment of Merger Consideration and Surrender of Stock Certificates
 
Each record holder of shares of Common Stock will be sent a letter of transmittal describing how such holder may exchange each of their shares of Common Stock for the Merger Consideration promptly after the completion of the Merger.
 
You should not return your stock certificates to C&D, and you should not forward your stock certificates to the paying agent without a letter of transmittal.
 
You will not be entitled to receive the Merger Consideration until you deliver a duly completed and executed letter of transmittal to the paying agent.  If your shares are certificated, you must also surrender your stock certificate or certificates to the paying agent.  If ownership of your shares is not registered in the transfer records of C&D, a check for any cash to be delivered will only be issued if the applicable letter of transmittal is accompanied by all documents reasonably required to evidence and effect transfer and to evidence that any applicable stock transfer taxes have been paid.
 
 
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If your shares of Common Stock are held in “street name” by your bank, brokerage firm or other nominee, you should contact your bank, brokerage firm or other nominee to determine how to effect the surrender of your “street name” shares of Common Stock in exchange for the Merger Consideration.
 
Interests of C&D’s Directors and Officers in the Merger
 
You should be aware that, aside from their interests as stockholders of C&D, certain members of the C&D Board and C&D’s executive officers may have interests in the Merger that are different from or in addition to the interests of C&D stockholders generally. The Special Committee and the C&D Board were aware of these differing interests and potential conflicts and considered them, among other matters, in making their respective determination regarding the Merger Agreement.
 
Directors’ and Officers’ Equity Interests in the Merger
 
As of October 18, 2011, the latest practicable date for which this information was available prior to the filing of this information statement, the current executive officers and directors of C&D owned an aggregate of 18,311 shares of Common Stock. If the Merger is completed, these shares will be converted into the right to receive the Merger Consideration.
 
In addition, C&D’s directors and executive officers participate in C&D’s equity-based compensation plans and hold Stock Options and SARs.  All outstanding equity awards granted to C&D’s directors and executive officers prior to 2011 were fully vested in connection with the Exchange Offer relating to C&D’s 2005 Notes and 2006 Notes, which was completed on December 23, 2010.  All outstanding equity awards granted in 2011 generally vest and become exercisable over a period of four years following the date of grant based upon the grantee’s continued employment with C&D.
 
Upon the completion of the Merger, each Stock Option and SAR that is held by any of C&D’s directors or executive officers, whether or not then vested and exercisable, will be canceled and extinguished in exchange for a payment in cash equal to the product of (A) the number of shares of Common Stock subject to such Stock Option or SAR, as applicable, and (B) the excess, if any, of the Merger Consideration over the exercise price per share of such Stock Option or SAR, as applicable, less any required withholding taxes.  None of the equity awards granted prior to 2011 will have value to the directors or executive officers in connection with the Merger because the applicable exercise prices of such awards exceed the Merger Consideration of $9.75 per share that is to be paid to the holders of Common Stock under the Merger Agreement (other than holders of Excluded Shares).
 
As of October 18, 2011, the latest practicable date for which this information was available prior to the filing of this information statement, the executive officers and directors of C&D held in the aggregate Stock Options to acquire 789,575.08 shares of Common Stock and SARs covering 10,509.46 shares of Common Stock.  All of the outstanding SARs relating to 10,509.46 shares of Common Stock are vested, and Stock Options to acquire 26,519.08 shares of Common Stock are vested, and the remainder of such awards are unvested.  If the Merger is completed, all of the Stock Options and SARs, whether vested or unvested, will be canceled and converted into the right of the holder to receive an amount in cash, without interest and less any applicable withholding tax, equal to the product of the total number of shares of Common Stock multiplied by the excess, if any, of $9.75 over the exercise price per share subject to such Stock Option or SAR, as applicable.
 
 
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The following table sets forth, for each person who has been a director or executive officer of C&D since the beginning of our most recent completed fiscal year, (i) the aggregate number of shares of Common Stock subject to vested Stock Options and SARs held by such person as of October 18, 2011, that will be canceled and cashed out upon the consummation of the Merger and the aggregate consideration (before tax withholding) that such person will receive upon the cancellation of such awards, (ii) the aggregate number of shares of Common Stock subject to unvested Stock Options held by such person as of October 18, 2011, that will be canceled and cashed out upon the consummation of the Merger and the aggregate consideration (before tax withholding) that such person will receive upon the cancellation of such awards, and (iii) the number of shares of Common Stock held by such person as of October 18, 2011, that will be converted into the right to receive the Merger Consideration.  The information in the table assumes that all currently outstanding Stock Options and SARs will remain outstanding until the consummation of the Merger.
 
   
Vested Options (1)
   
Unvested Options that Vest as a result of the Merger
   
Vested SARs (1)
   
Shares of Common Stock
   
 
Totals
 
Name
 
Shares
   
Value ($)
   
Shares
   
Value ($)
   
Shares
   
Value ($)
   
Shares
   
Value ($)
   
Value ($)
 
Todd W. Arden
                                                     
Kevin P. Dowd
    1,207.80       0       60,560       93,262                   7,001       68,260       161,522  
James J. Gaffney
                60,560       93,262                               93,262  
Michael Gallagher
                60,560       93,262                               93,262  
Andrew Hines
                60,560       93,262                               93,262  
David Treadwell
                60,560       93,262                               93,262  
Jeffrey A. Graves
    19,142.38       0       302,800       466,312       7,840.77       0       9,480       92,430       558,742  
Ian J. Harvie
    6,168.92       0       109,008       167,872       2,668.69       0       1,830       17,843       185,715  
David J. Anderson
                48,448       84,784                   0             84,784  
James D. Dee (2)
                                        1,225       11,944       11,944  
Todd J. Greenspan (2)
                                                     
 
____________________
 
 
(1)
All vested Stock Options and SARs (other than those Stock Options and SARs that vest as a result of the Merger) held by C&D’s directors and officers have an exercise price in excess of $9.75; therefore, such awards will be canceled in connection with the Merger for no consideration.
 
 
(2)
Messrs. Dee and Greenspan are no longer executive officers of C&D.  Mr. Dee resigned as of September 10, 2010, and Mr. Greenspan resigned as of December 1, 2010.  The number of shares of Common Stock held by Messrs. Dee and Greenspan as set forth in the table are current as of April 20, 2011, the record date for determining which stockholders of C&D were entitled to vote at our Annual Meeting of Stockholders held on June 2, 2011.
 
Severance Benefits Pursuant to Named Executive Officer Employment Agreements
 
Pursuant to their respective employment agreements with C&D, upon (i) an involuntary termination of employment of Jeffrey A. Graves or Ian J. Harvie by C&D without “cause” (as defined in such agreements) within six (6) months prior to or twenty-four (24) months following a change in control such as the Merger, (ii) a voluntary resignation by the executive after C&D’s material breach of his employment agreement within six (6) months prior to a change in control such as the Merger, or (iii) a voluntary resignation by the executive for “good reason” (as defined in such agreements) within twenty-four (24) months following a change in control such as the Merger (either termination in (i), (ii), or (iii) above, a “Qualifying Termination”), the executive will be entitled to the following “double-trigger” severance payments, as applicable, subject to his execution of a general release of claims in C&D’s favor:
 
 
Three (3) times, in the case of Dr. Graves, or two (2) times, in the case of Mr. Harvie, the executive’s annual base salary in effect immediately before termination, payable in a lump sum within fifteen (15) days of termination, which in each case is an enhancement equal to one (1) year’s base salary as compared to the executive’s severance benefit upon such a termination not in connection with a change in control;
 
 
Three (3) times, in the case of Dr. Graves, or two (2) times, in the case of Mr. Harvie, the greater of (a) the average of the annual bonus paid with respect to the three (3) most recently completed fiscal years and (b) the executive’s target bonus percentage times base salary, payable in a lump sum within fifteen (15) days of termination, which in each case is an enhancement by a multiple of one (1) times such bonus amount as compared to the executive’s severance benefit upon such a termination not in connection with a change in control (in which case, additionally, the calculation of such amount would take into account only the executive’s target bonus percentage and not prior years’ bonuses);
 
 
The cost to provide the executive and his eligible beneficiaries (if applicable) health and medical coverage under our health and medical plans, provided that the executive officer timely elects COBRA coverage upon termination of employment, for thirty-six (36) months, in the case of Dr. Graves, or twenty-four (24) months, in the case of Mr. Harvie, after the termination or until the executive obtains alternative coverage, if earlier, which in each case is an enhancement equal to twelve (12) additional months of coverage as compared to the executive’s severance benefit upon such a termination not in connection with a change in control;
 
 
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Life insurance coverage under our life insurance policy for twenty-four (24) months following termination, which, for Mr. Harvie only, is an enhancement equal to twelve (12) additional months of coverage as compared to the executive’s severance benefit upon such a termination not in connection with a change in control;
 
 
Immediate vesting of all previously unvested Stock Options that vest based solely on continued service to C&D, and the extension of the term of such Stock Options to the greatest extent permissible under the applicable incentive plan and applicable law, which would not be provided upon such a termination not in connection with a change in control; and
 
 
Outplacement services for one (1) year, which would not be provided upon such a termination not in connection with a change in control.
 
For purposes of the employment agreements, the term “good reason” means, without the executive’s consent, (i) a material diminution in the executive’s authority, duties or responsibilities, (ii) a material diminution in the authority, duties or responsibilities of the executive’s supervisor, (iii) a material diminution in the budget over which the executive retains authority, (iv) a material relocation of C&D’s principal executive offices, (v) a material diminution in the executive’s base salary, or (vi) any other action or inaction that constitutes a material breach of the executive’s employment agreement.
 
Golden Parachute Compensation Table
 
The following table summarizes the potential payments and value of benefits for each of Dr. Graves and Mr. Harvie in connection with the proposed Merger, as required by Item 402(t) of Regulation S-K, which payments and benefits were calculated assuming (i) the consummation of the Merger on October 18, 2011, the latest practicable date prior to the filing of this information statement, (ii) the occurrence of the Qualifying Termination on October 18, 2011, and (iii) other relevant assumptions identified in this information statement.
 
Golden Parachute Compensation
 
Name
 
Cash
($)(1)*
   
Equity
($)(2)†
   
Pension/
NQDC
($)
   
Perquisites/
Benefits
($)(3)*
   
Tax
Reimbursement
($)
   
Other
($)
   
Total
($)
 
Jeffrey A. Graves
    2,805,000       466,312             112,345                   3,383,657  
Ian J. Harvie
    1,080,000       167,872             69,114                   1,316,986  
______________________________
 
* Designates so-called “double-trigger” change in control benefits, which means that the payment of such amounts is conditioned upon both (a) the consummation of the Merger and (b) the executive’s timely Qualifying Termination.
 
† Designates so-called “single-trigger” change in control benefits, which means that the payment of such amounts is conditioned solely upon the consummation of the Merger, regardless of whether the executive suffers a timely Qualifying Termination.
 
 
(1)
Represents a cash severance payment equal to three times, in the case of Dr. Graves, or two times, in the case of Mr. Harvie, the sum of the executive’s current base salary and current target bonus (70% of base salary for Dr. Graves and 50% of base salary for Mr. Harvie).
 
 
(2)
Represents an amount equal to the aggregate payment in cancellation of Stock Options and SARs held by the executives that were outstanding as of October 18, 2011, the latest practicable date prior to the filing of this information statement.  Such payment with respect to each Stock Option or SAR will equal the product of (A) the number of shares of Common Stock subject to such Stock Option or SAR, as applicable, and (B) the excess, if any, of the Merger Consideration over the exercise price per share of such Stock Option or SAR, as applicable.  No additional benefits will be realized by either executive in connection with the provision in his employment agreement providing for accelerated vesting upon a Qualifying Termination because the Merger Agreement provides for cancellation and payment in respect of both vested and unvested awards. Amounts set forth in this column are also disclosed in the table above under the caption “—Directors’ and Officers’ Equity Interests in the Merger.”
 
 
(3)
Represents the estimated cost of providing continued health and medical coverage for thirty-six (36) months, in the case of Dr. Graves, or twenty-four (24) months, in the case of Mr. Harvie, and life insurance coverage for twenty-four (24) months, which were quantified using the assumptions used for financial reporting purposes under GAAP; outplacement services for one (1) year following termination, based on a reasonable estimate of the potential cost of outplacement services; and unused vacation pay through a reasonable estimate of the closing date of the Merger, based on accrued and unused vacation time to date.  The individual elements of compensation included in the aggregate amounts disclosed in this column are set forth in the following table:
 
 
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Name
 
Medical and Life Insurance Coverage
   
Outplacement
   
Vacation
 
Jeffrey A. Graves
  $ 65,197     $ 20,000     $ 27,148  
Ian J. Harvie
  $ 14,728     $ 20,000     $ 34,386  
 
Employment Agreement with David J. Anderson
 
Pursuant to his employment agreement with C&D, upon an involuntary termination of David J. Anderson by C&D without “cause” (as defined in such agreement), whether or not in connection with a change in control such as the Merger, Mr. Anderson will be entitled to the following severance payments, subject to his execution of a general release of claims in C&D’s favor:
 
 
continued base salary for twelve (12) months following the executive’s termination;
 
 
a subsidy of the executive’s COBRA premiums for twelve (12) months equal to the health insurance premium subsidy provided to active employees; and
 
 
an amount equal to the executive’s target bonus for the year of termination, or if greater, fifty percent (50%) of the executive’s base salary.
 
In addition, if such termination were to occur within six (6) months prior to or twenty-four (24) months following a change in control such as the Merger, Mr. Anderson will be entitled to receive outplacement services for one (1) year.
 
Indemnification and Insurance
 
The Merger Agreement provides that, during the period commencing at the effective time of the Merger and ending on the sixth anniversary of the effective time, Acquiror and the surviving corporation shall to the fullest extent permitted by law:
 
 
indemnify, defend and hold harmless and provide advancement of expenses to, each present and former director and officer of C&D or any of its subsidiaries;
 
 
cause all rights to indemnification, exculpation and expense advancement now existing in favor of each present and former director and officer of C&D or any of its subsidiaries as provided in C&D’s or its subsidiaries’ organizational documents to survive the Merger and continue in full force and effect after the effective time of the Merger;
 
 
cause the certificate of incorporation and bylaws of the surviving corporation to, with respect to matters occurring at or prior to the effective time of the Merger, contain provisions no less favorable with respect to indemnification, exculpation and expense advancement now existing in favor of each present and former director and officer of C&D or any of its subsidiaries and such provisions may not be amended, repealed or otherwise modified during such time in such a way as to adversely affect such rights; and
 
 
obtain and maintain directors’ and officers’ liability insurance for each present and former director and officer of C&D or any of its subsidiaries at the current level and scope of the directors’ and officers’ liability insurance  policies of C&D and its subsidiaries in effect on the date of the Merger Agreement; provided, that, in no event shall Acquiror or the surviving corporation be required to expend an amount per annum in excess of 300% of the aggregate premiums currently paid or payable by C&D in 2010 (on an annualized basis).
 
Prior to the effective time of the Merger, Acquiror may, and, if requested by Acquiror, C&D shall, purchase a six-year “tail” prepaid policy on C&D’s current directors’ and officers’ liability insurance; provided, that, if obtained by C&D, the one-time premium for such coverage shall not be more than 300% of the annual premium currently paid by C&D for such insurance without the prior written consent of Acquiror.  If such a “tail” policy is purchased prior to the effective time of the Merger, the surviving corporation must maintain such policy in full force and effect and Acquiror and the surviving corporation will have no obligations under the immediately preceding bullet so long as such policy is in full force and effect.
 
 
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Special Committee Compensation
 
To date, Messrs. Dowd and Gallagher have not received any additional compensation in connection with their service on the Special Committee; however, the C&D Board in its discretion may approve additional compensation for Messrs. Dowd and Gallagher at a future date, including reimbursement for all reasonable expenses incurred in connection with serving on the Special Committee.
 
Agreements with the Angelo Gordon Entities
 
The Angelo Gordon Entities collectively own 9,857,984 shares of Common Stock in C&D as of the date of this information statement. One member of the C&D Board, Todd Arden, is an employee of Angelo Gordon, which maintains investment and voting control over the shares held or controlled by each of the Angelo Gordon Entities.  C&D does not have any agreements or understandings with these members of the C&D Board or employees concerning compensation that is based on or otherwise related to the Merger.  The Angelo Gordon Entities or one or more of their affiliates are parties to the following agreements.
 
As described above in “Background of the Merger,” C&D and Angelo Gordon are parties to the Support Agreement, pursuant to which, among other things, Angelo Gordon agreed to support the Restructuring and the C&D Board was recomposed to consist of seven directors, five of which were nominated by the Supporting Noteholders.
 
Regulatory Matters
 
In connection with the Merger, C&D is required to make certain filings with, and comply with certain laws of, various federal and state governmental agencies, including the filing of a certificate of merger with the Secretary of State of the State of Delaware in accordance with the DGCL and complying with U.S. federal securities laws.  None of the parties to the Merger Agreement is aware of any other required regulatory approvals in connection with the Merger.
 
Fees and Expenses
 
The following is an estimate of the fees and expenses to be incurred by C&D in connection with the Merger Agreement and the transactions contemplated thereby, including the Merger:
 
Description
 
Amount (in thousands)
Legal
 
$[_____]
Financial Advisors
 
$[_____]
Accounting
 
$[_____]
Printing and Mailing
 
$[_____]
SEC Filing Fees
 
$5.9
Miscellaneous
 
$[_____]
TOTAL
 
$[_____]
 
Under certain circumstances, Acquiror has agreed to reimburse C&D for reasonable out-of-pocket fees and expenses of up to $2.5 million in the aggregate incurred by C&D in connection with the transactions contemplated by the Merger Agreement. See “The Merger Agreement—Termination Fees and Expenses” beginning on page 55.  
 
 
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Material United States Federal Income Tax Consequences of the Merger to Our Stockholders
 
The following is a summary of the material United States federal income tax consequences of the Merger relevant to U.S. Holders (as defined below). The discussion is based on the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), existing United States Treasury regulations promulgated thereunder and administrative and judicial interpretations thereof, all as in effect as of the date hereof and all of which are subject to change (possibly with retroactive effect). This discussion applies only to U.S. Holders that hold shares of Common Stock as “capital assets” within the meaning of Section 1221 of the Code (generally, property held for investment) and does not apply to shares of Common Stock acquired pursuant to the exercise of employee stock options or otherwise as compensation, shares of Common Stock held as part of a “straddle,” “hedge,” “constructive sale,” “conversion transaction” or other integrated investment, or to certain types of holders (including, without limitation, financial institutions, investors in pass-through entities, insurance companies, regulated investment companies, real estate investment trusts, United States expatriates, holders subject to the alternative minimum tax under the Code, holders whose “functional currency” is not the U.S. dollar, a person who owns (actually or constructively) 5% or more of Common Stock, tax-exempt organizations and dealers in securities) that may be subject to special rules. In addition, this discussion does not address the effect of any United States federal estate or gift tax laws, as well as any state, local, non-United States or other tax laws.
 
For the purposes of this discussion, a “U.S. Holder” is a beneficial owner of shares of Common Stock and is: (i) a citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for United States federal income tax purposes), created or organized in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate that is subject to United States federal income tax regardless of its source, or (iv) a trust if (a) a United States court is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust or (b) the trust has a valid election in effect to be treated as a United States person for United States federal income tax purposes.
 
If a partnership or other entity taxed as a partnership holds Common Stock, the tax treatment of a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. Partnerships and partners in such a partnership should consult their tax advisors about the tax consequences of the Merger to them.
 
EACH U.S. HOLDER SHOULD CONSULT ITS TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO IT OF THE MERGER, INCLUDING THE APPLICATION AND EFFECT OF UNITED STATES FEDERAL, STATE, LOCAL AND NON-UNITED STATES TAX LAWS AND POSSIBLE CHANGES IN TAX LAWS.
 
Exchange of Common Stock for Cash
 
The receipt of cash for shares of Common Stock pursuant to the Merger by a U.S. Holder will be a taxable transaction for United States federal income tax purposes. For United States federal income tax purposes, a U.S. Holder that receives cash in exchange for shares of Common Stock pursuant to the Merger will recognize capital gain or loss equal to the difference (if any) between the amount of cash received and the U.S. Holder’s adjusted tax basis in the shares of Common Stock exchanged in the Merger. Gain or loss must be determined separately for each block of shares of Common Stock exchanged pursuant to the Merger (for example, shares acquired at the same cost in a single transaction). Such capital gain or loss will be long-term capital gain or loss if the U.S. Holder has held such shares for more than one year at the time of the completion of the Merger. In general, long-term capital gain of a non-corporate U.S. Holder (including an individual U.S. Holder) will be subject to a maximum United States federal income tax rate of 15%. There are limitations on the deductibility of capital losses.
 
Information Reporting and Backup Withholding
 
Payments to a U.S. Holder in connection with the Merger may be subject to information reporting and backup withholding. A U.S. Holder will not be subject to backup withholding, however, if such holder (i) timely furnishes a correct taxpayer identification number and certifies that such holder is not subject to backup withholding on the IRS Form W-9 (or successor form) included in the letter of transmittal such holder will receive or (ii) is otherwise exempt from backup withholding. Any amounts withheld under the backup withholding rules will generally be allowed as a refund or credit against a U.S. Holder’s United States federal income tax liability, provided such holder timely furnishes the required information to the Internal Revenue Service. Each U.S. Holder should consult its tax advisors as to such U.S. Holder’s qualification for exemption from backup withholding and the procedure for obtaining such exemption.
 
Litigation Related to the Merger
 
Beginning on June 29, 2011, following the announcement on June 16, 2011 by Acquiror of its proposal to acquire the outstanding shares of Common Stock not owned by it for cash, three putative stockholder class action lawsuits were filed in the Delaware Court of Chancery, referred to herein as the “Delaware Actions,” and another putative stockholder class action lawsuit was filed in the Court of Common Pleas of Montgomery County, Pennsylvania, referred to herein as the “Pennsylvania Action,”  challenging the proposed Merger.  On August 19, 2011, counsel to the plaintiffs in the Delaware Actions submitted a proposed order to the court seeking consolidation of the Delaware Actions into a single action, referred to herein as the “Consolidated Delaware Action.”  On September 8, 2011, the Delaware Court of Chancery granted that request for consolidation.  On October 11, 2011, an amended class action complaint was filed in the Consolidated Delaware Action, naming as defendants C&D, each current member of the C&D Board and the Acquiror.  On October 25, a fourth class action complaint was filed in the Delaware Court of Chancery.  That action is subject to the Delaware Court of Chancery’s August 19 consolidation order governing the consolidation of any related newly filed case with the Consolidated Delaware Action.
 
On October 26, 2011, a consolidated second amended class action complaint was filed in the Consolidated Delaware Action.  The consolidated second amended class action complaint asserts breach of fiduciary duty claims against the current members of the C&D Board and Angelo Gordon & Co., L.P., and aiding and abetting breach of fiduciary duty claims against C&D, Angelo Gordon & Co., L.P., Acquiror and Merger Sub premised principally on allegations that: (i) the individual defendants and the Acquiror breached their fiduciary duties under Delaware law because the Merger Agreement was executed without meaningful input from C&D’s public stockholders, (ii) the consideration the Acquiror is proposing to provide to C&D’s public stockholders for their Common Stock is inadequate, and (iii) the Form PRE 14C (filed by C&D on October 19, 2011) failed to disclose material information.  Plaintiffs claim that the Form PRE 14C failed to disclose material information about the selection and appointment of the members of the Special Committee, the criteria used to select the Special Committee’s financial advisor (Perella Weinberg), certain aspects of the financial analysis performed by Perella Weinberg, and the sale and negotiation process.  In their consolidated second amended class action complaint, Plaintiffs sought to preliminarily and permanently enjoin the Merger (or if the Merger is consummated prior to any final judgment to rescind the Merger or receive rescissory damages), a declaration that defendants have violated their fiduciary duties, and an order directing defendants to exercise their fiduciary duties to obtain a transaction that is in the best interests of C&D’s stockholders.  Plaintiffs further requested the costs of the action, including reasonable attorneys’ fees, and such other equitable relief as may be just and proper.
 
At the same time that the consolidated second amended class action complaint was filed, Plaintiffs moved for a preliminary injunction to enjoin the Merger and for expedition of the proceedings.  On November 1, 2011, Defendants filed an opposition to Plaintiffs’ request for expedited proceedings, arguing that Plaintiffs’ disclosure claims were not colorable and did not provide a basis for expedition.  On November 3, 2011, the Delaware Court of Chancery denied Plaintiffs’ motion for expedition of the proceedings.  In light of the Court’s November 3, 2011 ruling, Plaintiffs have submitted a proposed amended order of consolidation and appointment of co-lead counsel.  Pursuant to that proposed amended order, which defendants do not oppose, defendants shall answer or otherwise move with respect to the consolidated second amended class action complaint within 45 days of the closing of the Merger.  
 
 
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QUESTIONS AND ANSWERS ABOUT THE MERGER
 
The following questions and answers are intended to briefly address some commonly asked questions regarding the Merger Agreement and the Merger.  These questions and answers may not address all questions that may be important to you as a C&D stockholder.  Please refer to the “Summary” beginning on page 1 and the more detailed information contained elsewhere in this information statement, the Annexes to this information statement and the documents referred to or incorporated by reference in this information statement, each of which you should read carefully. You may obtain information incorporated by reference in this information statement without charge by following the instructions under “Where You Can Find More Information” beginning on page 65.
 
Q:
What is the proposed transaction?
 
A:
The proposed transaction is the acquisition of C&D by Acquiror pursuant to the Merger Agreement. Upon the terms and subject to satisfaction or waiver of the conditions under the Merger Agreement, Merger Sub, a direct wholly owned subsidiary of Acquiror, will merge with and into C&D, with C&D being the surviving corporation and becoming a direct wholly owned subsidiary of Acquiror.  Acquiror is an affiliate controlled by Angelo, Gordon & Co., L.P.
 
Q:
What will I be entitled to receive in the Merger?
 
A:
If the Merger is completed, you will be entitled to receive $9.75 in cash, without interest and subject to reduction for any required withholding taxes, for each share of our Common Stock that you own, unless you properly exercise, and do not withdraw or lose, appraisal rights under Section 262 of the DGCL. For example, if you own 100 shares of our Common Stock, you would be entitled to receive $975.00 in cash in exchange for your shares of Common Stock, subject to reduction for any required withholding taxes. You will not be entitled to receive shares of the surviving corporation or of Acquiror or any of its affiliates.
 
Q:
When do you expect the Merger to be completed?
 
A:
We are working to complete the Merger as quickly as possible. We expect to complete the Merger promptly after all of the conditions to the Merger have been satisfied or waived. Completion of the Merger is currently expected to occur in the fourth calendar quarter of 2011.
 
Q:
What happens if the Merger is not completed?
 
A:
If the Merger is not completed for any reason, stockholders will not receive any payment for their shares in connection with the Merger. Instead, C&D will remain a publicly traded company and the Common Stock will continue to be traded on the over the counter market.
 
Q:
What effects will the proposed Merger have on C&D?
 
A:
This is a “going-private” transaction.  As a result of the proposed Merger, we will cease to be a publicly traded company and will be 100% owned by Acquiror.  You will no longer have any interest in our future earnings or growth.  In addition, upon consummation of the proposed Merger, our Common Stock will no longer be traded on the over the counter market. 
 
Q:
Why am I not being asked to vote on the Merger?
 
A:
Under the DGCL, the Merger requires the adoption of the Merger Agreement by the holders of a majority of the outstanding shares of our Common Stock.  The requisite stockholder approval was obtained shortly following the execution of the Merger Agreement on October 3, 2011, when the Written Consent adopting the Merger Agreement was delivered by the Angelo Gordon Entities, which owned approximately 65% of our outstanding Common Stock on that date.  Therefore, your vote is not required and is not being sought. We are not asking you for a proxy and you are requested not to send us a proxy.
 
Q:
Why did I receive this information statement?
 
A:
Applicable laws and securities regulations require us to provide you with notice of the Written Consent delivered by the Angelo Gordon Entities, as well as other information regarding the Merger, even though your vote or consent is neither required nor requested to adopt the Merger Agreement or complete the Merger.  This information statement also constitutes notice to you of the availability of appraisal rights under Section 262 of the DGCL, a copy of which is attached to this information statement as Annex D.
 
 
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Q:
Did the C&D Board approve and recommend the Merger Agreement?
 
A:
Yes. Acting upon the recommendation of the Special Committee, the C&D Board (with Todd Arden taking no part in the vote) (i) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to, and in the best interests of, the unaffiliated stockholders of C&D, (ii) approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, (iii) declared the Merger Agreement advisable and (iv) resolved to recommend adoption of the Merger Agreement by the stockholders of C&D.
 
Q:
What was the role of the Special Committee of the Board of Directors?
 
A:
The Special Committee, composed solely of the members of the C&D Board who are not members of management of C&D or affiliated with Acquiror, Merger Sub or the Angelo Gordon Entities, was formed in response to the receipt by the C&D Board on June 16, 2011 of a proposal by an affiliate of the Angelo Gordon Entities concerning a “going-private” transaction. Since the formation of the Special Committee and throughout the transaction process, the Special Committee, together with its advisors, has met separately from management of C&D and the rest of the C&D Board on a regular basis to evaluate important decisions relating to this process, including the decision to enter into the Merger Agreement.
 
Q:
What happens if I sell my shares before completion of the Merger?
 
A:
If you transfer your shares of Common Stock, you will have transferred the right to receive the Merger Consideration to be received by our stockholders in the Merger. In order to receive the Merger Consideration, you must hold your shares through completion of the Merger.
 
Q:
Should I send in my stock certificates now?
 
A:
No.  You will be sent a letter of transmittal with related instructions promptly after completion of the Merger, describing how you may exchange your shares of Common Stock for the Merger Consideration.  If your shares of Common Stock are held in “street name” by your bank, brokerage firm or other nominee, you will receive instructions from your bank, brokerage firm or other nominee as to how to effect the surrender of your “street name” shares of Common Stock in exchange for the Merger Consideration.  Please do NOT return your stock certificate(s) to C&D.
 
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THE PARTIES TO THE MERGER
 
C&D
 
C&D Technologies, Inc.
1400 Union Meeting Road
Blue Bell, Pennsylvania 19422
Phone: (215) 619-2700
 
C&D is a leading manufacturer, marketer and distributor of electrical power storage systems for the standby power storage market. C&D primarily manufactures and markets integrated reserve power systems and components for the standby power market, which include telecommunications, uninterruptible power supply cable services and utilities and renewable energies. Integrated reserve power systems monitor and regulate electric power flow and provide backup power in the event of a primary power loss or interruption. C&D also produces the individual components of these systems including reserve batteries, power rectifiers, system monitors, power boards and chargers.  Major applications of these products include wireless and wireline telephone infrastructure, cable television signal powering, corporate data center powering, computer network backup for use during power outages and renewable energy integration.  C&D markets its products through independent manufacturer’s representatives, national and global distributors, specialty resellers and its own sales personnel to end users and original equipment manufacturers.
 
For more information about C&D, please visit our website at www.cdtechno.com. Our website address is provided as an inactive textual reference only. The information on our website is not incorporated into, and does not form a part of, this information statement.  Detailed descriptions about C&D’s business and financial results are contained in our Annual Report on Form 10-K, which is incorporated in this information statement by reference. See “Where You Can Find More Information” beginning on page 65.
 
Acquiror
 
Angel Holdings LLC
c/o Angelo, Gordon & Co., L.P.
245 Park Avenue, 26th Floor
New York, NY 10167
Phone: (212) 692-2000
 
Acquiror is a newly formed Delaware limited liability company that is controlled by private investment funds affiliated with Angelo Gordon.  Acquiror was formed solely for the purpose of entering into the Merger Agreement and completing the transactions contemplated by the Merger Agreement, including the Merger.  Acquiror has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the transactions contemplated by the Merger Agreement.  Upon completion of the Merger, C&D will be a direct wholly owned subsidiary of Acquiror.
 
Merger Sub
 
Angel Acquisition Corp.
c/o Angelo, Gordon & Co., L.P.
245 Park Avenue, 26th Floor
New York, NY 10167
Phone: (212) 692-2000
 
 Merger Sub is a Delaware corporation and was incorporated on behalf of Acquiror solely for the purpose of entering into the Merger Agreement and completing the transactions contemplated by the Merger Agreement, including the Merger. Merger Sub is an indirect wholly owned subsidiary of Acquiror and has not carried on any activities to date, except for activities incidental to its incorporation and activities undertaken in connection with the transactions contemplated by the Merger Agreement. Upon completion of the Merger, Merger Sub will cease to exist.
 
Angelo Gordon Entities
c/o Angelo, Gordon & Co., L.P.
245 Park Avenue, 26th Floor
New York, NY 10167
Phone: (212) 692-2000
 
 
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Each of the Angelo Gordon Entities is a Delaware limited partnership and is principally engaged in the business of investing in debt securities and other credit investments.  The general manager of AG MM, L.P. is AG MM, LLC, a Delaware limited liability company.  The general partner of AG Capital Recovery Partners VI, L.P. is AG Capital Recovery VI LLC, a Delaware limited liability company.  The general partner of AG Capital Recovery Partners VII, L.P. is AG Capital Recovery VII LLC, a Delaware limited liability company.  The general partner of AG Eleven Partners, L.P. is AG Eleven LLC, a Delaware limited liability company.  The general partner of AG Garden Partners, L.P. is AG Super LLC, a Delaware limited liability company.  The general partner of Nutmeg Partners, L.P. is Nutmeg LLC, a Delaware limited liability company.  The general partner of AG Princess, L.P. is AG Princess LLC, a Delaware limited liability company.  The general partner of AG CNG Funds, L.P. is AG CNG LLC, a Delaware limited liability company.  The general partner of AG Super Fund International Partners, L.P. is AG Super Fund International LLC, a Delaware limited liability company.  The general partner of AG Super Fund, L.P. is AG Super Fund LLC, a Delaware limited liability company.  Each of the foregoing entities is ultimately controlled by Angelo Gordon.  Angelo Gordon is a privately-held registered investment advisor dedicated to alternative investing. The firm was founded in 1988 and currently manages approximately $23 billion.  The principal executive offices of each of the Angelo Gordon Entities, Angelo Gordon and each of the other affiliated entities described above are located at 245 Park Avenue, 26th Floor, New York, NY 10167, and their telephone number is (212) 692-2000.
 
Business and Background of Natural Persons Related to C&D
 
A brief biography of each director and executive officer of C&D is listed below. None of C&D nor any of C&D’s directors or executive officers has, during the past five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). Each of C&D’s directors and executive officers listed below is a United States citizen. None of C&D nor any of C&D’s directors or executive officers listed below has, during the past five years, been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.
 
Executive Officers
 
Dr. Jeffrey A. Graves.  Dr. Graves has been a director of C&D and its President and Chief Executive Officer since July 2005. From July 2001 to January 2005, Dr. Graves was employed at Kemet Electronics Corporation, a manufacturer of high performance capacitor solutions, including surface-mount capacitor technologies, where he last held the position of Chief Executive Officer. From 1994 to 2001, Dr. Graves held a number of key leadership positions in the Power Systems Division and Corporate Research & Development Center of General Electric Company (“GE”). Prior to working for GE, Dr. Graves held various positions of increasing responsibility at Rockwell International Corporation and Howmet Corporation. Dr. Graves is also a director of Teleflex Incorporated and Hexcel Corporation, and served on the board of directors of Technitrol, Inc. from January 2006 through May 2007.
 
Ian J. Harvie. Mr. Harvie has served as Senior Vice President and Chief Financial Officer since January 2009. From December 2005 to January 2009, Mr. Harvie served as Vice President and Chief Financial Officer of C&D. From February 2002 to October 2005, Mr. Harvie was employed by Exide Technologies where he served in various positions, including serving as the Vice President - Controller and as the interim CFO for one year. From January 1984 to January 2002, Mr. Harvie was employed by PricewaterhouseCoopers LLP, and from July 1998 to January 2002, he held the title of Partner in Audit & Business Advisory Services.
 
David J. Anderson.  Mr. Anderson joined C&D in April 2011 as Vice President, General Counsel and Corporate Secretary.  He is C&D’s chief legal officer.  From February 2004 until April 2011, Mr. Anderson was Vice President and General Counsel of Kulicke and Soffa Industries, Inc., a manufacturer of semiconductor assembly equipment.  Before Kulicke and Soffa, Mr. Anderson was General Counsel at InvestorForce, a provider of software solutions to institutional investors.  Before InvestorForce, Mr. Anderson was a corporate lawyer in private practice in Philadelphia.
 
Directors (other than Dr. Graves)
 
David L. Treadwell.  Mr. Treadwell has been a director since December 2010 and Chairman of the C&D Board since January 2011.  From August 2006 through August 2011, Mr. Treadwell served as President and Chief Executive Officer of EP Management Corporation (f/k/a EaglePicher Corporation), a $600 million diversified industrial products company.   Mr. Treadwell is currently the Chief Executive Officer and a director of EPMC Holdings Corp., which holds the remaining assets and liabilities of EP Management Corporation’s divested businesses.  From July 2005 to November 2005, he served as President of the EaglePicher Hillsdale division and was promoted to COO of EaglePicher in November 2005.  Mr. Treadwell is also Lead Director of Flagstar Bancorp, Inc. and a director of Fairpoint Communications.  Mr. Treadwell was named as a member to the C&D Board in December 2010 and was recommended to serve as a member of the C&D Board by certain security holders of C&D, including Angelo Gordon.
 
 
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Todd W. Arden.  Mr. Arden has been a director since December 2010. Since 2000, Mr. Arden has been employed at Angelo Gordon and currently serves as a Managing Director in the distressed securities group. Prior to joining Angelo Gordon, Mr. Arden served as a Portfolio Manager/Analyst within AIG/SunAmerica’s High Yield Group. Previously, he was a Senior Equity Analyst to Troubh Partners. Mr. Arden began his career as a Manager in Arthur Andersen’s Financial Consulting Services practice, concentrating in the distressed/litigation support area. Mr. Arden was named as a member to the C&D Board in December 2010 and was recommended to serve on the C&D Board by certain security holders of C&D, including Angelo Gordon.
 
Kevin P. Dowd.  Mr. Dowd has been a director of C&D since January 1997 and served as Chairman of the C&D Board from June 2008 to January 2011. From March 2004 to July 2008, Mr. Dowd was Chairman and Chief Executive Officer of Sonitrol, Inc., a leading commercial security provider in North America. Sonitrol was acquired by The Stanley Works in July 2008. From August 1988 to March 2001, he was employed by Checkpoint Systems, Inc., where he last held the position of President and Chief Executive Officer and served as a member of its board of directors.
 
James J. Gaffney.  Mr. Gaffney has been a director since December 2010. From 1997 to 2003, Mr. Gaffney provided consulting services to GS Capital Partners II, LP, a private investment fund affiliated with Water Street Corporate Recovery Fund I LP and Goldman, Sachs & Co. and other affiliated investment funds in relation to an investment held by those funds. Mr. Gaffney currently serves on the board of directors of the following public companies: Imperial Sugar Company, where he serves as Chairman of the Board and is a member of the Executive Compensation Committee and the Nominating and Corporate Governance Committee; SCP Pool Inc., where he is a member of the Audit Committee and Chairman of the Governance Committee; Beacon Roofing Supply, Inc., where he is Chairman of the Compensation Committee and a member of the Governance Committee; and Armstrong World Industries, where he is Chairman of the Governance Committee and a member of the Compensation Committee. Mr. Gaffney was named as a member to the C&D Board in December 2010 and was recommended to serve as a member of the C&D Board by certain security holders of C&D, including Angelo Gordon.
 
Michael Gallagher.  Mr. Gallagher has been a director since December 2010. Since November 2010, Mr. Gallagher has been a Venture Partner for the Alexandria, Virginia based equity investor, Columbia Capital, focusing on Telecom Infrastructure Projects. From 2007 to February 2010, Mr. Gallagher was employed at Nuvox Communications where he held the title of President of Sales and Marketing. While with Nuvox Communications, Mr. Gallagher was responsible for managing a 600-person sales force and associated $570 million revenue stream. He created and implemented various VOIP business class products such as MPLS networking and large capacity dedicated internet bandwidth. Nuvox was sold to publicly traded Windstream Communications in February 2010. From 1998 to 2007, Mr. Gallagher was the Chief Executive Officer and Founder of Florida Digital Network (FDN Communications), a local telephone and broadband network for business customers in the major cities of Florida. FDN raised over $120 million in venture capital, making it the largest ever venture backed enterprise in the State of Florida at the time. Mr. Gallagher is also a member of the Rollins College Crummer Business School Advisory Board. Mr. Gallagher was named as a member to the C&D Board in December 2010 and was recommended to serve as a member of the C&D Board by certain security holders of C&D, including Angelo Gordon.
 
 Andrew P. Hines.  Mr. Hines has been a director since December 2010. Mr. Hines has been a principal of Hines and Associates, a financial management consulting firm since July 2010 and has served as Executive Vice President and Chief Financial Officer of RHI Entertainment since June 2011.  From September 2009 to June 2010, Mr. Hines served as Executive Vice President/Chief Financial Officer of World Color Press Inc. (formerly Quebecor World), a company which provided high-value and comprehensive print, digital and related services to businesses worldwide. From October 2006 to August 2009, Mr. Hines was a principal of Hines and Associates, and from October 2005 to September 2006, he served as Vice President and Chief Financial Officer of GenTek, Inc., a manufacturer of industrial components and performance chemicals. Mr. Hines is also a director and Chairman of the Audit Committee of each of Tronox Incorporated and Hughes Telematics, Inc.  From November 2003 to 2007, Mr. Hines served as a director and Chairman of the Audit Committee of Superior Essex, Inc. Mr. Hines was named as a member to the C&D Board  in December 2010 and was recommended to serve as a member of the C&D Board by certain security holders of C&D, including Angelo Gordon.
 
 
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Business and Background of Natural Persons Related to Acquiror, Merger Sub and Angelo Gordon Entities
 
Acquiror and Merger Sub
 
The names and material occupations, positions, offices or employment during the past five years of each director and executive officer of Merger Sub and each executive officer of Acquiror is listed below.  The manager of Acquiror is Angelo, Gordon Management LLC, a Delaware limited liability company that is ultimately controlled by Angelo Gordon. The business address of Angelo, Gordon Management LLC is 245 Park Avenue, 26th Floor, New York, NY 10167.  The business address of each director and executive officer listed below is c/o Angelo, Gordon & Co., L.P. 245 Park Avenue, 26th Floor, New York, NY 10167. Each is a U.S. citizen.
 
Thomas Fuller.  Mr. Fuller is the Chief Executive Officer of each of Acquiror and Merger Sub and is a director of Merger Sub.  Mr. Fuller is a Senior Managing Director of Angelo Gordon and a member of the firm’s executive committee.  Mr. Fuller joined Angelo Gordon in 2000.
 
D. Forest Wolfe.  Mr. Wolfe is the Executive Vice President and Secretary of each of Acquiror and Merger Sub.  Mr. Wolfe is the General Counsel of Angelo Gordon, and he joined the firm in 2009.  Previously, Mr. Wolfe was a Vice President and then Executive Director in the Legal Department of Morgan Stanley & Co. from 2004 to 2009.
 
Angelo Gordon Entities
 
Each of the Angelo Gordon Entities and their respective controlling entities are ultimately controlled by John M. Angelo and Michael L. Gordon.  John Angelo is the co-founder and Chief Executive Officer of Angelo Gordon and Michael Gordon is co-founder, Chief Operating Officer and Chief Investment Officer of Angelo Gordon.  Each of Mr. Angelo and Mr. Gordon is a U.S. citizen and has been active in all aspects of the firm’s development since its founding in 1988.  Neither Mr. Angelo nor Mr. Gordon has, during the past five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).  Neither Mr. Angelo nor Mr. Gordon has, during the past five years, been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.
 
 
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THE MERGER AGREEMENT
 
This section describes the material terms of the Merger Agreement. The description in this section and elsewhere in this information statement is qualified in its entirety by reference to the complete text of the Merger Agreement, a copy of which is attached as Annex A and is incorporated by reference into this information statement. This summary does not purport to be complete and may not contain all of the information about the Merger Agreement that is important to you. We encourage you to read the Merger Agreement carefully and in its entirety. This section is not intended to provide you with any factual information about us. Such information can be found elsewhere in this information statement and in the public filings we make with the SEC, as described in the section entitled, “Where You Can Find More Information,” beginning on page 65.
 
Explanatory Note Regarding the Merger Agreement
 
The Merger Agreement is included to provide you with information regarding its terms. Factual disclosures about C&D contained in this information statement or in C&D’s public reports filed with the SEC may supplement, update or modify the disclosures about C&D contained in the Merger Agreement. The representations, warranties and covenants made in the Merger Agreement by C&D, Acquiror and Merger Sub were qualified and subject to important limitations agreed to by C&D, Acquiror and Merger Sub in connection with negotiating the terms of the Merger Agreement. In particular, in your review of the representations and warranties contained in the Merger Agreement and described in this summary, it is important to bear in mind that the representations and warranties were negotiated with the principal purposes of establishing the circumstances in which a party to the Merger Agreement may have the right not to consummate the Merger if the representations and warranties of the other party prove to be untrue because of a change in circumstance or otherwise, and allocating risk between the parties to the Merger Agreement, rather than establishing matters as facts. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable to stockholders and reports and documents filed with the SEC and in some cases were qualified by the matters contained in the disclosure schedule that C&D delivered in connection with the Merger Agreement, which disclosures were not reflected in the Merger Agreement. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this information statement, may have changed since the date of the Merger Agreement and subsequent developments or new information qualifying a representation or warranty may have been included in this information statement.
 
Effects of the Merger; Directors and Officers; Certificate of Incorporation; Bylaws
 
The Merger Agreement provides for the Merger of Merger Sub with and into C&D upon the terms, and subject to the conditions, set forth in the Merger Agreement. As the surviving corporation, C&D will continue to exist following the Merger.
 
The board of directors of the surviving corporation will, from and after the effective time of the Merger, consist of the directors of Merger Sub until their respective successors have been duly elected or appointed and qualified in the manner provided in the certificate of incorporation and bylaws of the surviving corporation, or until their earlier death, resignation or removal, or otherwise as provided by law. The officers of C&D immediately prior to the effective time of the Merger will, from and after the effective time of the Merger, be the officers of the surviving corporation until their respective successors have been duly elected or appointed and qualified in the manner provided in the certificate of incorporation and bylaws of the surviving corporation, or until their earlier death, resignation or removal, or otherwise as provided by law.
 
The certificate of incorporation and bylaws of the surviving corporation will be in the respective forms of the certificate of incorporation and bylaws attached as exhibits to the Merger Agreement, until amended in accordance with their respective terms or by applicable law.
 
Following the completion of the Merger, the Common Stock will cease to be traded on the over the counter market.
 
Closing; When the Merger Becomes Effective
 
The closing of the Merger is required to take place on a date specified by the parties to the Merger Agreement, on a date no later than the third business day after the satisfaction or (to the extent permitted by applicable law) waiver of all of the conditions to closing of the Merger (described under “—Conditions to the Merger” below) (other than the conditions that by their terms are to be satisfied at the closing of the Merger, but subject to satisfaction or (to the extent permitted by applicable law) waiver of those conditions) or such other date that the parties to the Merger Agreement may agree upon; provided, however, that unless the parties mutually agree otherwise, the closing of the Merger will not occur until a date at least thirty (30) calendar days after the mailing of this information statement to our stockholders.
 
 
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The effective time of the Merger will occur upon the filing of a Certificate of Merger with the Secretary of State of the State of Delaware (or at such later date as the parties to the Merger Agreement may agree and specify in the Certificate of Merger).
 
Merger Consideration
 
Conversion of Our Common Stock
 
At the effective time of the Merger, each share of Common Stock issued and outstanding immediately prior to the effective time of the Merger (except those shares (i) held by any of our stockholders who are entitled to and who properly exercise, and do not withdraw or lose, appraisal rights under Section 262 of the DGCL and (ii) shares owned by Acquiror, the Angelo Gordon Entities, Merger Sub, C&D or any wholly owned subsidiary of C&D) will be canceled and converted automatically into the right to receive $9.75 in cash, without interest and less any required withholding taxes. Each share of Common Stock owned by C&D or Merger Sub will be canceled and no consideration will be delivered in respect thereof. Each share of Common Stock owned by Acquiror, the Angelo Gordon Entities or any wholly owned subsidiary of C&D will remain outstanding after the effective time of the Merger and no consideration will be delivered in respect thereof. Each share of common stock of Merger Sub issued and outstanding immediately prior to the effective time of the Merger will be converted into and become one validly issued, fully paid and nonassessable share of common stock of the surviving corporation. Common Stock owned by stockholders with respect to which appraisal has been properly demanded in accordance with Section 262 of the DGCL, unless such demand has been withdrawn or becomes ineligible, will be canceled without payment of consideration. Such stockholders will instead be entitled to the appraisal rights provided under the DGCL as described below under “Appraisal Rights.”
 
Treatment of Stock Options and SARs
 
Each Stock Option that is outstanding immediately prior to the effective time of the Merger, whether or not then vested or exercisable, will be canceled and extinguished and the holder thereof will be entitled to receive from the surviving corporation as soon as practicable after the effective time of the Merger an amount in cash equal to the product of (a) the number of shares of Common Stock subject to such Stock Option and (b) the excess (if any) of the Merger Consideration over the exercise price per share of such Stock Option.  Each SAR that is outstanding immediately prior to the effective time of the Merger, whether or not then vested, will be canceled and extinguished and the holder thereof will be entitled to receive from the surviving corporation as soon as practicable after the effective time of the Merger an amount in cash equal to the product of (a) the number of shares of Common Stock subject to such SAR and (b) the excess (if any) of the Merger Consideration over the exercise price per share of such SAR.
 
Procedure for Receiving Merger Consideration
 
Prior to the effective time of the Merger, Acquiror will appoint a bank or trust company (which we refer to as the “paying agent”) reasonably acceptable to C&D to act as paying agent for the Merger Consideration and Acquiror will enter into an agreement with the paying agent in form and substance reasonably acceptable to C&D.  At or prior to the effective time, Acquiror will deposit with the paying agent, for the benefit of the holders of our common stock, cash sufficient to pay the Merger Consideration.
 
At the effective time of the Merger, each certificate representing shares (or uncertificated shares in book entry form) of Common Stock that has not been surrendered, other than any excluded shares, will represent only the right to receive, upon such surrender and without any interest, the amount of cash to which the holder of such stock is entitled. At the close of business on the day on which the effective time of the Merger occurs, no further registrations of transfers on the stock transfer books of C&D of the shares of Common Stock will be made. If, after the effective time of the Merger, C&D stock certificates or shares in book-entry form are presented to the paying agent, they will be canceled and exchanged as described below.
 
As promptly as reasonably practicable after the effective time of the Merger, Acquiror will cause the paying agent to mail to each holder of shares of Common Stock, a letter of transmittal and instructions explaining how to surrender C&D stock certificates (or transfer uncertificated shares) in exchange for the Merger Consideration.
 
 
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After the effective time of the Merger, and upon surrender of a C&D stock certificate to the paying agent, together with a letter of transmittal, duly executed, and such other documents as may reasonably be required by the paying agent (or in the case of a book-entry transfer of uncertificated shares, upon receipt of an “agent’s message” by the paying agent (or such other evidence, if any, of transfer as the paying agent may reasonably request)), the holder of such C&D stock certificate will be entitled to receive the Merger Consideration, and the stock certificate so surrendered will be canceled. No interest will be paid or will accrue on any Merger Consideration payable under the Merger Agreement. If payment is to be made to a person other than the person in whose name the certificate is registered (or the uncertificated shares so transferred is registered), the certificate so surrendered must be properly endorsed or otherwise in proper form for transfer and the person requesting such payment must pay any fiduciary or surety bonds or any transfer or other similar taxes required by reason of the payment of the Merger Consideration to a person other than the registered holder of the certificate so surrendered (or of the uncertificated shares), unless the person requesting such payment can establish to the reasonable satisfaction of Acquiror that such tax has been paid or is not applicable.
 
YOU SHOULD NOT RETURN YOUR STOCK CERTIFICATES TO C&D, AND YOU SHOULD NOT FORWARD YOUR STOCK CERTIFICATES TO THE PAYING AGENT WITHOUT A LETTER OF TRANSMITTAL.
 
If any stock certificate has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the stock certificate to be lost, stolen or destroyed and, if required by Acquiror, the posting by such person of a bond or surety in such reasonable amount as Acquiror may direct as indemnity against any claim that may be made against it with respect to such stock certificate, the paying agent will deliver, in exchange for such lost, stolen or destroyed stock certificate, the Merger Consideration in respect of such shares. These procedures will be described in the letter of transmittal that C&D stockholders will receive, which such stockholders should read carefully in its entirety.
 
Representations and Warranties
 
The Merger Agreement contains a number of representations and warranties made by C&D, Acquiror and Merger Sub that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement or in the confidential disclosures C&D delivered in connection therewith (as may or may not be specifically indicated in the text of the Merger Agreement). These representations and warranties relate to, among other things:
 
 
due organization, good standing and the requisite power and authority to carry on their respective businesses;
 
 
corporate power and authority to enter into the Merger Agreement, the valid and binding nature and enforceability of the Merger Agreement; and
 
 
brokers’ or finders’ fees.
 
The Merger Agreement contains a number of representations and warranties made by C&D that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement or in the confidential disclosures C&D delivered in connection therewith (as may or may not be specifically indicated in the text of the Merger Agreement). These representations and warranties relate to, among other things:
 
 
ownership of subsidiaries;
 
 
capital structure;
 
 
C&D Board approval of, and recommendation to stockholders to adopt, the Merger Agreement;
 
 
absence of conflicts with organizational documents, breaches of contracts and agreements, liens upon assets and violations of applicable law resulting from the execution and delivery of the Merger Agreement and consummation of the Merger and the other transactions contemplated by the Merger Agreement;
 
 
absence of required governmental or other third party consents in connection with execution, delivery and performance of the Merger Agreement and consummation of the Merger and the other transactions contemplated by the Merger Agreement;
 
 
timely filing of required documents with the SEC, compliance of such documents with the requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the Exchange Act), and, with respect to such documents, the absence of untrue statements of material facts or omissions of material facts required to be stated in such documents or necessary in order to make the statements made in such documents, in light of the circumstances under which such statements were made, not misleading;
 
 
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compliance of financial statements as to form with applicable accounting requirements and SEC rules and regulations and preparation in accordance with GAAP, and the absence of certain undisclosed liabilities;
 
 
the accuracy of information supplied by C&D in connection with this information statement;
 
 
absence of specified changes or events and conduct of business in the ordinary course since January 31, 2011;
 
 
absence of certain litigation and investigations;
 
 
certain material contracts;
 
 
compliance with applicable laws and holding of all necessary permits;
 
 
employee benefits matters, executive compensation matters and ERISA compliance;
 
 
tax matters;
 
 
inapplicability of certain takeover laws; and
 
 
receipt of an opinion from the Special Committee’s financial advisor.
 
The Merger Agreement contains a number of representations and warranties made by Acquiror and Merger Sub that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement. These representations and warranties relate to, among other things:
 
 
the availability of financing to consummate the Merger and the other transactions contemplated by the Merger Agreement;
 
 
the accuracy of information supplied by Acquiror in connection with this information statement;
 
 
the operations, liabilities and obligations of Merger Sub;
 
 
absence of certain litigation and investigations; and
 
 
the non-reliance on C&D’s estimates, projections and forecasts.
 
Certain of the representations and warranties in the Merger Agreement are qualified as to “materiality” or “material adverse effect.” For purposes of the Merger Agreement, a “material adverse effect” on C&D means any event, condition, fact, change, occurrence or effect that, individually or in the aggregate with other events, conditions, facts, changes, occurrences or effects (i) has had or would reasonably be expected to have a material adverse effect on the business, financial condition, assets, liabilities or results of operations of C&D and its subsidiaries, taken as a whole, or (ii) would reasonably be expected to prevent or materially impede the performance by C&D of its obligations under the Merger Agreement or the consummation of the Merger, except for any such events, conditions, facts, changes, occurrences or effects to the extent resulting from:
 
 
(A)
changes in U.S. or global general economic conditions or in the credit, financial or capital markets generally, including changes in interest or exchange rates (to the extent such changes do not have a materially disproportionate effect on C&D and its subsidiaries, taken as a whole, relative to other companies operating in the same industry in which C&D and its subsidiaries operate);
 
 
(B)
changes in general market or economic conditions applicable to industries in which C&D or any of its subsidiaries operate generally or in any specific jurisdiction or geographical area in the U.S. or elsewhere in the world in which C&D or any of its subsidiaries operate (to the extent such changes do not have a materially disproportionate effect on C&D and its subsidiaries, taken as a whole, relative to other companies operating in the same industry in which C&D and its subsidiaries operate);
 
 
(C)
changes, after the date of the Merger Agreement, in law or applicable accounting regulations (including GAAP) or principles or interpretations thereof, or political, legislative or business conditions in the countries in which C&D or any of its subsidiaries operate (to the extent such changes do not have a materially disproportionate effect on C&D and its subsidiaries, taken as a whole, relative to other companies operating in the same industry in which C&D and its subsidiaries operate);
 
 
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(D)
acts of war (whether or not declared), the commencement, continuation or escalation of a war, acts of armed hostility, sabotage or terrorism or other international or national calamity (whether natural or man-made) or any material worsening of such conditions threatened or existing as of the date of the Merger Agreement (to the extent such changes do not have a materially disproportionate effect on C&D and its subsidiaries, taken as a whole, relative to other companies operating in the same industry in which C&D and its subsidiaries operate);
 
 
(E)
any event, condition, fact, change or occurrence relating to the products of any person (other than C&D and any of its subsidiaries), including the entry into the market of products competitive with any of the products of either C&D or any of its subsidiaries;
 
 
(F)
any change in C&D’s stock price or trading volume or in C&D’s credit rating or in any analyst’s recommendation with respect to C&D or any failure by C&D to meet internal or published projections, forecasts or estimates of revenue, earnings or other financial or operating metrics (but not any event, condition, fact, change, occurrence or effect underlying such change or failure that is not otherwise excepted under the foregoing clauses (A) through (D));
 
 
(G)
any threatened or actual strike or other labor disruptions in respect of C&D or any of its subsidiaries;
 
 
(H)
any litigation involving C&D or any of its subsidiaries pending as of the date of the Merger Agreement; or
 
 
(I)
changes resulting from the announcement, pendency or anticipated consummation of the Merger or any of the other transactions contemplated by the Merger Agreement, including the impact thereof on relationships (contractual or otherwise) with customers, suppliers, distributors, partners, employees or regulators, or the commencement or pendency of any litigation arising from allegations of breach of fiduciary duty or violation of law relating to the Merger Agreement or the transactions contemplated thereby.
 
The representations and warranties contained in the Merger Agreement will expire at the effective time of the Merger, and not survive the consummation of the Merger (without limiting any covenant or agreement of the parties which by its terms contemplates performance after the effective time of the Merger), but they form the basis of specified conditions to the parties’ obligations to complete the Merger.
 
Conduct of Business Pending the Merger
 
C&D has agreed that from the date of the Merger Agreement until the earlier to occur of the effective time of the Merger and the termination of the Merger Agreement, except as expressly permitted, contemplated or required by the Merger Agreement, required by applicable law or consented to in writing by Acquiror (such consent not to be unreasonably withheld, conditioned or delayed), C&D will, and will cause each of its subsidiaries to:
 
 
conduct its business in the ordinary course consistent with past practice;
 
 
use commercially reasonable efforts to preserve intact and maintain its business organization and goodwill of material suppliers and customers and other persons having business relationships with C&D; and
 
 
keep available the services of present officers and employees on terms and conditions substantially comparable to those currently in effect.
 
In addition, C&D has agreed that from the date of the Merger Agreement until the earlier to occur of the effective time of the Merger and the termination of the Merger Agreement, except as required by applicable law or the Merger Agreement, without Acquiror’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed), it will not, and will not permit any of its subsidiaries to:
 
 
adopt or propose any change to C&D’s charter or bylaws or organizational documents of any of its subsidiaries;
 
 
(i) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property) in respect of any of its capital stock (other than dividends or distributions declared, set aside, made or paid by any wholly owned C&D subsidiary to C&D or to another wholly owned C&D subsidiary), (ii) split, combine, subdivide or reclassify any of its capital stock or issue or propose or authorize the issuance of any other securities (including options, warrants or any similar security exercisable for, convertible into, or denominated with reference to, such other security) in respect of, in lieu of, or in substitution for, shares of its capital stock, or (iii) repurchase, redeem or otherwise acquire any shares of the capital stock of C&D or any C&D subsidiaries, or any other equity interests or any rights, warrants or options to acquire any such shares or interests except for purchases, redemptions or other acquisitions of capital stock or other securities required (or permitted in connection any net share settlement or Tax withholding) by the terms of any “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended) (a “Company Plan”) or any award thereunder;
 
 
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issue, sell, grant, pledge or otherwise encumber any shares of its capital stock or other securities (including any options, restricted stock, restricted stock units, performance units, warrants or any similar security exercisable for, or convertible into, such capital stock or similar security) other than pursuant to the exercise of outstanding Stock Options granted under the Equity Plans in accordance with their present terms (as modified or as may be required by applicable laws) and consistent with past practice;
 
 
merge or consolidate with any other Person;
 
 
acquire assets with a value or purchase price in the aggregate in excess of $500,000, other than in the ordinary course of business consistent with past practice;
 
 
sell, lease, license, subject to a material lien, or otherwise surrender, relinquish or dispose of any assets with a value or purchase price in the aggregate in excess of $500,000, other than in the ordinary course of business consistent with past practice;
 
 
(i) make any loans, advances or capital contributions to, or investments in, any Person other than (x) loans, advances or capital contributions to, or investments in wholly owned C&D subsidiaries, (y) pursuant to any existing contract, agreement, obligation, commitment, lease, license, permit, franchise or other instrument, other than any Company Plan (a “Contract”), or (z) advances to employees in the ordinary course of business consistent with past practice, (ii) create, incur, guarantee or assume any indebtedness for borrowed money, issuances of debt securities, guarantees, loans or advances, or (iii) make or commit to make any capital expenditure other than in an aggregate amount not to exceed the amount set forth in C&D’s fiscal 2012 capital expenditure budget, a copy of which has been provided to Acquiror prior to the date of the Merger Agreement;
 
 
materially increase benefits under any Company Plan, accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Plan as currently in effect on the date of the Merger Agreement, fail to make any required contribution to any Company Plan, merge or transfer any Company Plan or the assets or liabilities of any Company Plan or change the sponsor of any Company Plan (other than as would not materially increase C&D’s or any subsidiary of C&D’s liabilities or obligations under such Company Plan), or terminate any Company Plan or establish any additional benefit plan that would be a Company Plan, if it were in existence as of the date of the Merger Agreement, in each case except as required by the terms of the Merger Agreement or as required by applicable law or the terms of a Company Plan or Contract which C&D or any C&D subsidiary is a party as currently in effect on the date of the Merger Agreement;
 
 
increase the compensation or benefits provided to any current or former employee, officer, director, independent contractor or consultant of C&D or any subsidiary of C&D, except as required by applicable law or the terms of a Company Plan or Contract which C&D or any C&D subsidiary is a party as currently in effect on the date of the Merger Agreement or in connection with annual promotion-related or merit-based increases for employees whose total annual compensation is less than $100,000;
 
 
settle or compromise any actions, suits, claims, hearings, proceedings, arbitrations, mediations, audits, assessments, inquiries or investigations (whether civil, criminal, administrative or otherwise) (collectively, “Actions”) or enter into any consent, decree, injunction or similar restraint or form of equitable relief in settlement of any Action in any manner that requires the payment of more than $150,000 or limits in any respect the ability of C&D to conduct its business as presently conducted;
 
 
(i) make, change or rescind any express or deemed material election relating to taxes except in the ordinary course of business consistent with past practice, (ii) settle or compromise any material Action relating to taxes or surrender any right to obtain a material tax refund or credit, offset or other reduction in tax liability, (iii) enter into any closing agreement with respect to any material taxes, or (iv) change any method of reporting income or deductions for federal income tax purposes from those employed in the preparation of its federal income tax returns for the taxable year ending January 31, 2011;
 
 
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other than in the ordinary course of business consistent with past practice, enter into, renew, extend, amend or terminate (i) any Contract that is filed or would be required to be filed by C&D as a material contract pursuant to Item 601(b)(10) of Regulation S-K of the SEC, (ii) any indenture, credit agreement, loan agreement, security agreement, guarantee, note, mortgage or other evidence of indebtedness for borrowed money, (iii) any Contract that requires or is reasonably likely to result in (x) annual payments to or from C&D or any of its subsidiaries of more than $2,000,000 or (y) aggregate payments to or from C&D or any of its subsidiaries of more than $2,000,000, (iv) any Contract that prohibits the payment of dividends or distributions in respect of the capital stock of C&D or any of its subsidiaries, prohibits the pledging of the capital stock of C&D or any of its subsidiaries or prohibits the issuance of guarantees by C&D or any of its subsidiaries, (v) any Contract that materially restricts the ability of C&D or any of its subsidiaries to compete in any business or with any Person in any geographical area or grants a material right of first refusal or right of first offer or similar right or (vi) any Contract relating to an acquisition, divestiture, merger or similar transaction that has continuing material indemnification, “earn-out” or other contingent payment obligations (each such Contract described in the foregoing clauses (i) through (vi) is referred to herein as a “Material Contract”), or any Contract that would have been a Material Contract had it been entered into prior to the date of the Merger Agreement;
 
 
materially change any financial reporting or accounting methods, principles or practices of C&D or any C&D subsidiary, except for any such change required by applicable Law or GAAP;
 
 
adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of C&D or any C&D subsidiary; and
 
 
agree or commit to do any of the foregoing.
 
Required Stockholder Approval for the Merger
 
We received the required stockholder approval to adopt the Merger Agreement on October 3, 2011, when the Angelo Gordon Entities, which on such date owned approximately 65% of the outstanding shares of Common Stock, delivered the Written Consent adopting the Merger Agreement. The close of business on October 2, 2011 was the record date established by the C&D Board for the determination of the stockholders of C&D entitled to consent to corporate action in writing without a meeting with respect to the adoption of the Merger Agreement. Therefore, no further approval by our stockholders is required in connection with the Merger Agreement or the Merger. A copy of the Written Consent is attached as Annex B to this information statement.
 
Communications to Stockholders
 
Following the delivery of the Written Consent, for a period of twenty (20) calendar days after the mailing of the notice of appraisal rights to the C&D stockholders, the C&D Board and the Special Committee is permitted to communicate their recommendation, if any, as to whether C&D stockholders should seek to exercise appraisal rights with respect to their shares of Common Stock.
 
Further Actions and Efforts; Other Agreements
 
Each of C&D, Acquiror and Merger Sub have agreed, subject to certain exceptions, to:
 
 
cooperate and use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective as promptly as practicable the Merger and the other transactions contemplated by the Merger Agreement; and
 
 
cooperate with each other in connection with the foregoing, including using its commercially reasonable efforts to:
 
 
obtain all necessary waivers, consents and approvals from other parties to material contracts;
 
 
obtain all necessary consents, approvals and authorizations as are required to be obtained under any federal, state or foreign law;
 
 
lift or rescind any order adversely affecting the ability of the parties to consummate the Merger; and
 
 
effect any necessary registrations and filings and submissions of information requested by any governmental entity.
 
 
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The Merger Agreement contains additional agreements among the parties relating to, among other things:
 
 
notice by C&D to Acquiror of any notice or other communication received by C&D or any of its subsidiaries from any governmental entity, or any person alleging that the consent of such person is or may be required, in connection with the Merger or any of the other transactions contemplated by the Merger Agreement;
 
 
notice of the commencement, and participation in the defense or settlement, of any litigation involving C&D or any of its officers or directors, including the Special Committee, relating to the Merger Agreement, the Merger or the other transactions contemplated by the Merger Agreement (and no settlement of such litigation may occur without the prior written consent of Acquiror, which consent may not be unreasonably withheld, conditioned or delayed);
 
 
preparation of this information statement;
 
 
requiring the parties to consult with each other regarding public announcements;
 
 
taking such actions as be required so that no state takeover law is or becomes applicable to the Merger or the other transactions contemplated by the Merger Agreement; and
 
 
ensuring exemption of certain transactions by members of the C&D Board and C&D’s officers in connection with the Merger under Rule 16b-3 of the Exchange Act.
 
Indemnification and Insurance
 
The Merger Agreement provides that, during the period commencing at the effective time of the Merger and ending on the sixth anniversary of the effective time of the Merger, Acquiror and the surviving corporation shall to the fullest extent permitted by law:
 
 
indemnify, defend and hold harmless (and provide advancement of expenses in respect of) each present and former director and officer of C&D or any of its subsidiaries (acting in their capacity as such) against any costs or expenses (including reasonable attorneys’ fees, expenses and disbursements), judgments, settlements, fines, losses, claims, damages, liabilities or amounts paid in settlement incurred in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of, relating to or in connection with any matters existing or occurring at or prior to the effective time of the Merger, whether asserted or claimed prior to, at or after the effective time;
 
 
cause all rights to indemnification, exculpation and expense advancement now existing in favor of each present and former director and officer of C&D or any of its subsidiaries as provided in C&D’s or its subsidiaries’ organizational documents to survive the Merger and continue in full force and effect after the effective time of the Merger;
 
 
cause the certificate of incorporation and bylaws of the surviving corporation to, with respect to matters occurring at or prior to the effective time of the Merger, contain provisions no less favorable with respect to indemnification, exculpation and expense advancement now existing in favor of each present and former director and officer of C&D or any of its subsidiaries and such provisions may not be amended, repealed or otherwise modified during such time in such a way as to adversely affect such rights; and
 
 
obtain and maintain directors’ and officers’ liability insurance for each present and former director and officer of C&D or any of its subsidiaries at the current level and scope of the directors’ and officers’ liability insurance policies of C&D and its subsidiaries in effect on the date of the Merger Agreement; provided, that, in no event shall Acquiror or the surviving corporation be required to expend an amount per annum in excess of 300% of the aggregate premiums currently paid or payable by C&D in 2010 (on an annualized basis).
 
Prior to the effective time of the Merger, Acquiror may, and, if requested by Acquiror, C&D shall, purchase a six-year “tail” prepaid policy on C&D’s current directors’ and officers’ liability insurance; provided, that, if obtained by C&D, the one-time premium for such coverage shall not be more than 300% of the annual premium currently paid by C&D for such insurance without the prior written consent of Acquiror.  If such a “tail” policy is purchased prior to the effective time of the Merger, the surviving corporation must maintain such policy in full force and effect and Acquiror and the surviving corporation will have no obligations under the immediately preceding bullet so long as such policy is in full force and effect.
 
The foregoing rights afforded to each present and former director and officer of C&D or any of its subsidiaries are in addition to, and not a limitation of, any other rights that such person may have under the organizational documents of C&D or its subsidiaries, any other indemnification arrangements, the DGCL or otherwise.
 
 
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Conditions to the Merger
 
Conditions to Each Party’s Obligations
 
The obligation of each of Acquiror, Merger Sub and C&D to complete the Merger is subject to the satisfaction or waiver on or prior to the closing date of the Merger of the following conditions:
 
 
the adoption of the Merger Agreement by the C&D stockholders (which condition was satisfied when the Angelo Gordon Entities executed the Written Consent adopting the Merger Agreement on October 3, 2011); and
 
 
the absence of any order, injunction, judgment, law, rule, regulation or similar prohibition issued by a court of competent jurisdiction or other governmental entity that restrains, enjoins or otherwise prohibits the consummation of the Merger.
 
Conditions to Obligations of Acquiror and Merger Sub
 
The obligation of Acquiror and Merger Sub to consummate the Merger is further subject to satisfaction or waiver on or prior to the closing date of the Merger of the following conditions:
 
 
the representations and warranties of C&D set forth in the Merger Agreement regarding the absence of a material adverse effect on C&D since January 31, 2011 must be true and correct as of the date of the Merger Agreement and as of the closing date as though made on the closing date;
 
 
the representations and warranties of C&D set forth in the Merger Agreement regarding capitalization, authority to enter into the Merger Agreement, brokers and takeover statutes must be true and correct in all material respects as of the date of the Merger Agreement and as of the closing date as though made on the closing date (except to the extent such representations and warranties expressly speak as of a specific date, in which case as of such specific date);
 
 
all other representations and warranties of C&D set forth in the Merger Agreement (disregarding any exceptions therein relating to materiality or material adverse effect) must be true and correct as of the date of the Merger Agreement and as of the closing date as though made on the closing date (except to the extent such representations and warranties expressly speak as of a specific date, in which case as of such specific date), except for such failures to be so true and correct that, individually or in the aggregate, have not had and would not reasonably be expected to have a material adverse effect on C&D;
 
 
C&D must have performed, or complied with, in all material respects all covenants, obligations and agreements required to be performed by or complied with by it under the Merger Agreement at or prior to the closing date;
 
 
C&D must have delivered to Acquiror certificates signed on its behalf by a senior executive officer of C&D certifying as to the matters set forth above in the preceding four bullets; and
 
 
the total number of shares of Common Stock with respect to which appraisal rights shall have been exercised shall not exceed five percent (5%) of the issued and outstanding shares of Common Stock as of the closing date.
 
Conditions to Obligations of C&D
 
The obligation of C&D to consummate the Merger is further subject to satisfaction or waiver on or prior to the closing date of the Merger of the following conditions:
 
 
the representations and warranties of Acquiror and Merger Sub set forth in the Merger Agreement must be true and correct in all material respects as of the date of the Merger Agreement and as of the closing date as though made on the closing date (except to the extent such representations and warranties expressly speak as of a specific date, in which case as of such specific date), except where such failure to be so true and correct does not materially and adversely affect the ability of Acquiror or Merger Sub to consummate the Merger;
 
 
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each of Angelo Gordon and Merger Sub must have performed, or complied with, in all material respects all covenants, obligations and agreements required to be performed by or complied with by it under the Merger Agreement at or prior to the closing date; and
 
 
Acquiror must have delivered to C&D certificates signed on behalf of Acquiror and Merger Sub by a senior executive officer of Acquiror certifying as to the matters set forth above in the preceding two bullets.
 
Amendments; Waivers
 
The Merger Agreement may be amended by the parties at any time prior to the effective time of the Merger, before or after receipt of C&D stockholder approval, by an instrument in writing signed on behalf of each of the parties.
 
At any time prior to the effective time of the Merger, to the fullest extent permitted by applicable law, the time for performance of any obligations or other acts of a party may be extended, inaccuracies in a party’s representations and warranties may be waived, and compliance with any of the agreements or conditions may be waived by the parties; provided, that, in the case of C&D, the same can only be effected by the Special Committee on behalf of C&D. Any consent or agreement on the part of a party to any such extension or waiver must be set forth in a written instrument properly signed.
 
Termination of the Merger Agreement
 
The Merger Agreement may be terminated at any time before the effective time of the Merger, before or after the adoption of the Merger Agreement by the C&D stockholders:
 
 
by mutual written consent of Acquiror, Merger Sub and C&D (pursuant to a resolution adopted by the Special Committee);
 
 
by either Acquiror or C&D (pursuant to a resolution adopted by the Special Committee):
 
 
if the Merger has not been consummated on or before 5:00pm New York City Time on April 2, 2012 (which we refer to as the “outside date”), unless the failure to fulfill any obligation under the Merger Agreement by the party seeking to terminate has been the proximate cause of the failure of the Merger to be consummated on or before the outside date;
 
 
if any court of competent jurisdiction or other governmental entity has issued an order or taken any other action restraining, enjoining or otherwise prohibiting the Merger and such order or other actions has become final and nonappealable;
 
 
by Acquiror:
 
 
if, provided that Acquiror or Merger Sub is not in material breach of its representations, warranties, covenants or agreements under the Merger Agreement, C&D breaches any of its representations or warranties or fails to perform any of its covenants or agreements set forth in the Merger Agreement, which breach or failure to perform (i) would give rise to the failure of any of the conditions in the Merger Agreement relating to the accuracy of the representations and warranties of, and performance of covenants by, C&D and (ii) is incapable of being cured or, if capable of being cured, is not cured prior to the earlier of (A) one (1) business day prior to the outside date or (B) the date that is thirty (30) days from the date that C&D is notified by Acquiror of such breach;
 
 
by C&D:
 
 
if, provided that C&D is not in material breach of its representations, warranties, covenants or agreements under the Merger Agreement, Acquiror or Merger Sub breaches any of its representations or warranties or fails to perform any of its covenants or agreements set forth in the Merger Agreement, which breach or failure to perform (i) would give rise to the failure of any of the conditions in the Merger Agreement relating to the accuracy of the representations and warranties of, and performance of covenants by, Acquiror and Merger Sub and (ii) is incapable of being cured or, if capable of being cured, is not cured prior to the earlier of (A) one (1) business day prior to the outside date or (B) the date that is thirty (30) days from the date that Acquiror is notified by C&D of such breach;
 
 
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had it been the case that the Written Consent of the Angelo Gordon Entities was not delivered within twenty-four (24) hours after the execution of the Merger Agreement; or
 
 
if Acquiror does not waive in writing the failure of the closing condition relating to the total number of shares of Common Stock to which appraisal rights shall have been exercised within five (5) business days after the date on which C&D notifies Acquiror in writing of the failure of such condition to occur.
 
Any termination of the Merger Agreement must be, in the case of C&D, effected through a resolution adopted by the Special Committee.
 
Effect of Termination
 
If the Merger Agreement is terminated as described in “—Termination of the Merger Agreement” above, the Merger Agreement will be void and have no effect, and there will be no liability of any party under the Merger Agreement except that:
 
 
designated provisions of the Merger Agreement (including, without limitation, (i) provisions regarding reimbursement of expenses and the other transactions contemplated by the Merger Agreement, (ii) the ability of the parties to the Merger Agreement to specifically enforce the Merger Agreement or pursue damages against the other party and (iii) provisions regarding consent to jurisdiction and waiver of the right to a trial by jury) will survive the termination of the Merger Agreement; and
 
 
no termination will relieve any party from any willful or intentional breach of any of its representations, warranties, covenants or agreements set forth in the Merger Agreement.
 
Termination Fees and Expenses
 
Fees
 
Acquiror would have been required to pay or cause to be paid to C&D a fee equal to ten percent (10%) of the equity value of C&D had C&D terminated the Merger Agreement as a result of the failure of Acquiror to deliver the Written Consent within twenty-four (24) hours after the execution of the Merger Agreement.
 
Expenses
 
In general, and except as described below, each party to the Merger Agreement will bear its own costs and expenses incurred in connection with the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, regardless of whether the Merger is consummated.
 
In the event that C&D terminates the Merger Agreement pursuant to the provisions in the Merger Agreement which allow C&D to terminate the Merger Agreement if Acquiror fails to waive in writing within the required time period the failure of the closing condition relating to the total number of shares of Common Stock with respect to which appraisal rights shall have been exercised, then Acquiror must pay to C&D all reasonable out-of-pocket expenses incurred by C&D and its affiliates (up to an amount equal to $2.5 million) in connection with or related to the authorization, preparation and execution of the Merger Agreement and all other matters relating to the closing of the transactions contemplated thereby.
 
Remedies; Third-Party Beneficiaries
 
Acquiror and C&D have agreed that the parties will be entitled to an injunction or other equitable relief to prevent breaches of the Merger Agreement and to enforce specifically the terms and provisions of the Merger Agreement in the Court of Chancery of the State of Delaware or any court of the United States located in the State of Delaware, this being in addition to any other remedy to which the parties are entitled under the Merger Agreement. The parties have agreed to bring any action relating to the Merger Agreement or the transactions contemplated thereby in the Court of Chancery of the State of Delaware or, if under applicable law exclusive jurisdiction is vested in the federal courts, any court of the United States located in the State of Delaware.
 
In addition, prior to the closing of the Merger Agreement and subject to certain conditions, C&D is entitled to seek specific performance to cause Acquiror to draw down the full proceeds of the equity financing contemplated by the equity financing letter.
 
 
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The Merger Agreement is not intended to and does not confer upon any person other than the parties thereto any legal or equitable rights or remedies, except that:
 
 
following the effective time of the Merger, each holder of Common Stock, Stock Option or SAR is entitled to enforce the provisions of the Merger Agreement to the extent necessary to receive the Merger Consideration or other amounts payable pursuant to the Merger Agreement to which such holder is entitled; and
 
 
following the effective time of the Merger, the provisions in the Merger Agreement relating to indemnification and exculpation from liability for the directors and officers of C&D will be enforceable by each indemnified party and his or her heirs or representatives.
 
No Provisions for Unaffiliated C&D Stockholders
 
No provision has been made by C&D or the Angelo Gordon Entities in connection with the transactions contemplated by the Merger Agreement to grant unaffiliated stockholders of C&D access to the corporate files of C&D or the Angelo Gordon Entities or to obtain counsel or appraisal services at the expense of C&D or the Angelo Gordon Entities.
 
 
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MARKET PRICES OF COMMON STOCK AND
DIVIDEND INFORMATION
 
Prior to December 17, 2010, our Common Stock was listed on the New York Stock Exchange. Currently, our Common Stock is traded on the over the counter market under the symbol “CHHP.PK.” As of November 30, 2011, there were 15,196,562 shares of Common Stock outstanding, held by 43 stockholders of record. The following table sets forth, for the periods indicated, the high and low sales prices for our Common Stock as reported by the New York Stock Exchange or the over the counter market, as adjusted for the 1.37335-for-1 forward stock split of our Common Stock that occurred on December 21, 2010 and the 1-for-35 reverse stock split of our Common Stock that occurred on March 14, 2011:
 
Market Information
 
   
Common Stock
 
   
High
   
Low
 
Fiscal Year Ending January 31, 2010
           
1st Quarter
  $ 74.16     $ 27.78  
2nd Quarter
  $ 61.93     $ 37.46  
3rd Quarter
  $ 63.71     $ 46.38  
4th Quarter
  $ 49.19     $ 33.39  
Fiscal Year Ending January 31, 2011
               
1st Quarter
  $ 49.70     $ 36.95  
2nd Quarter
  $ 37.72     $ 21.66  
3rd Quarter
  $ 21.41     $ 2.55  
4th Quarter
  $ 7.14     $ 3.06  
Fiscal Year Ending January 31, 2012
               
1st Quarter
  $ 9.80     $ 4.75  
2nd Quarter
  $ 9.60     $ 7.50  
3rd Quarter
  $ 9.70     $ 7.42  
4th Quarter (through November 30, 2011)
  $ 9.73     $ 9.68  
 
On November 30, 2011, the most recent practicable date prior to the date of this information statement, the closing sale price of our Common Stock on the over the counter market was $9.70 per share.
 
C&D has not paid any dividends on its Common Stock during the periods indicated in the table above. The terms of the Merger Agreement do not allow us to declare or pay a dividend between the date of the Merger Agreement and the earlier of the consummation of the Merger or the termination of the Merger Agreement.
 
 
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APPRAISAL RIGHTS
 
The discussion of the provisions set forth below is not a complete summary regarding your appraisal rights under Delaware law and is qualified in its entirety by reference to Section 262 of the DGCL which is attached to this information statement as Annex D. Stockholders intending to exercise appraisal rights should carefully review Annex D in its entirety. All references in Section 262 and this summary to “stockholder” are to the record holder of the shares of our Common Stock. Failure to follow precisely any of the statutory procedures set forth in Section 262 of the DGCL may result in a termination or waiver of these rights.
 
If you comply with the applicable statutory procedures of Section 262 of the DGCL, you may be entitled to appraisal rights under Section 262 of the DGCL. In order to properly demand and perfect appraisal rights, a record holder of our Common Stock must follow the statutory procedures pursuant to Section 262 of the DGCL required to be followed by a stockholder in order to demand and perfect appraisal rights.
 
Under the DGCL, holders of our Common Stock who follow the procedures set forth in Section 262 of the DGCL will be entitled to have their shares appraised by the Court of Chancery of the State of Delaware, or the Delaware Court of Chancery, and to receive payment in cash of the “fair value” of those shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger.
 
Under Section 262 of the DGCL, where a merger agreement relating to a proposed merger is adopted by stockholders acting by written consent in lieu of a meeting of the stockholders, the corporation must notify each of its stockholders who was a stockholder on the record date fixed in advance by the corporation (which record date shall not be more than 10 days prior to the date the notice is given) with respect to such shares for which appraisal rights are available, that appraisal rights are so available, and must include in each such notice a copy of Section 262 of the DGCL. This information statement constitutes such notice to the holders of our Common Stock and Section 262 of the DGCL is attached to this information statement as Annex D. Any stockholder who wishes to exercise such appraisal rights or who wishes to preserve his, her or its right to do so should review the following discussion and Annex D carefully, because failure to timely and properly comply with the procedures specified in Section 262 will result in the loss of appraisal rights under the DGCL.
 
Holders of our Common Stock who desire to exercise their appraisal rights must deliver to C&D a written demand for appraisal of their shares of our Common Stock no later than 20 calendar days after the date of mailing of the notice of written consent and appraisal rights and this information statement, or [_____], 2011. A demand for appraisal will be sufficient if it reasonably informs C&D of the identity of the stockholder and that such stockholder intends thereby to demand appraisal of such stockholder’s shares of Common Stock. If you wish to exercise your appraisal rights you must be the record holder of such shares of our Common Stock on the date the written demand for appraisal is made and you must continue to hold such shares through the effective time of the Merger. Accordingly, a stockholder who is the record holder of shares of Common Stock on the date the written demand for appraisal is made, but who thereafter transfers such shares prior to the effective time of the Merger, will lose any right to appraisal in respect of such shares.
 
All written demands for appraisal of shares must be mailed or delivered to:  C&D Technologies, Inc., 1400 Union Meeting Road, Blue Bell, Pennsylvania 19422, Attention:  General Counsel. Only a holder of record of shares of Common Stock is entitled to demand an appraisal of the shares registered in that holder’s name. Accordingly, to be effective, a demand for appraisal by a holder of Common Stock must be made by, or in the name of, the record stockholder, fully and correctly, as the stockholder’s name appears on the stockholder’s stock certificate(s) or in the transfer agent’s records, in the case of uncertificated shares, should specify the stockholder’s mailing address and the number of shares registered in the stockholder’s name, and must state that the person intends thereby to demand appraisal of the stockholder’s shares in connection with the Merger. The demand cannot be made by the beneficial owner if he or she is not the record holder of the shares of Common Stock. The beneficial holder must, in such cases, have the record owner, such as a bank, brokerage firm or other nominee, submit the required demand in respect of those shares of Common Stock. If you hold your shares of Common Stock through a bank, brokerage firm or other nominee and you wish to demand appraisal rights, you should consult with your bank, brokerage firm or the other nominee to determine the appropriate procedures for the making of a demand for appraisal by the nominee.
 
 
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If shares of Common Stock are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of a demand for appraisal should be made in that capacity. If the shares of Common Stock are owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand should be executed by or for all joint owners. An authorized agent, including an authorized agent for two or more joint owners, may execute the demand for appraisal for a stockholder of record; however, the agent must identify the record owner or owners and expressly disclose the fact that, in executing the demand, he or she is acting as agent for the record owner. A record owner, such as a bank, brokerage firm or other nominee, who holds shares of Common Stock as a nominee for others, may exercise his or her right of appraisal with respect to the shares of Common Stock held for one or more beneficial owners, while not exercising this right for other beneficial owners. In that case, the written demand should state the number of shares of Common Stock as to which appraisal is sought. Where no number of shares of Common Stock is expressly mentioned, the demand will be presumed to cover all shares of Common Stock held in the name of the record owner.
 
Within 10 days after the effective time of the Merger, the surviving corporation in the Merger must give written notice that the Merger has become effective to each of C&D’s stockholders who properly demanded appraisal rights under Section 262 of the DGCL and has not voted in favor of or consented to the Merger. At any time within 60 days after the effective time of the Merger, any stockholder who has not commenced an appraisal proceeding or joined a proceeding as a named party may withdraw the demand and accept the consideration specified by the Merger Agreement for that stockholder’s shares of Common Stock by delivering to the surviving corporation a written withdrawal of the demand for appraisal. However, any such attempt to withdraw the demand made more than 60 days after the effective time of the Merger will require written approval of the surviving corporation. Unless the demand is properly withdrawn by the stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party within 60 days after the effective date of the Merger, no appraisal proceeding in the Delaware Court of Chancery will be dismissed as to any stockholder without the approval of the Delaware Court of Chancery, with such approval conditioned upon such terms as the Court deems just. If the surviving corporation does not approve a request to withdraw a demand for appraisal when that approval is required, or, except with respect to any stockholder who withdraws such stockholder’s right to appraisal in accordance with the first clause of the immediately preceding sentence, if the Delaware Court of Chancery does not approve the dismissal of an appraisal proceeding, the stockholder will be entitled to receive only the appraised value of such stockholder’s shares as determined in any such appraisal proceeding, which value could be less than, equal to or more than the consideration offered pursuant to the Merger Agreement.
 
Within 120 calendar days after the effective time of the Merger, but not thereafter, either the surviving corporation or any stockholder who has complied with the requirements of Section 262 and is entitled to appraisal rights under Section 262 may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares of Common Stock held by all stockholders entitled to appraisal. Upon the filing of the petition by a stockholder, service of a copy of such petition shall be made upon the surviving corporation. The surviving corporation has no obligation to file such a petition, has no present intention to file a petition and holders of Common Stock should not assume that the surviving corporation will file a petition.
 
Accordingly, it is the obligation of the holders of Common Stock to initiate all necessary action to perfect their appraisal rights in respect of shares of Common Stock within the time prescribed in Section 262 and the failure of a stockholder to file such a petition within the period specified in Section 262 could result in a loss of such stockholder’s appraisal rights. In addition, within 120 calendar days after the effective time of the Merger, any stockholder who properly complied with the requirements of Section 262 of the DGCL will be entitled to receive from the surviving corporation, upon written request, a statement setting forth the aggregate number of shares of Common Stock not voted or consented in favor of adoption of the Merger Agreement and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. The statement must be mailed within 10 days after such written request has been received by the surviving corporation or within 10 days after the expiration of the period for delivery of demands for appraisal, whichever is later. A person who is the beneficial owner of shares of Common Stock held either in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file a petition for appraisal or request from the surviving corporation such statement.
 
 
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If a petition for appraisal is duly filed by a stockholder and a copy of the petition is delivered to the surviving corporation, then the surviving corporation will be obligated, within 20 calendar days after receiving service of a copy of the petition, to file with the Delaware Register in Chancery a duly verified list containing the names and addresses of all stockholders who have demanded an appraisal of their shares of Common Stock and with whom agreements as to the value of their shares of Common Stock have not been reached. After notice to stockholders who have demanded appraisal, if such notice is ordered by the Delaware Court of Chancery, the Delaware Court of Chancery is empowered to conduct a hearing upon the petition and to determine those stockholders who have complied with Section 262 and who have become entitled to the appraisal rights provided by Section 262. The Delaware Court of Chancery may require stockholders who have demanded payment for their shares of Common Stock to submit their stock certificates to the Register in Chancery for notation of the pendency of the appraisal proceedings, and if any stockholder fails to comply with that direction, the Delaware Court of Chancery may dismiss the proceedings as to that stockholder. After determination of the stockholders entitled to appraisal of their shares of Common Stock, the Delaware Court of Chancery will appraise the shares of Common Stock, determining their fair value as of the effective time of the Merger after taking into account all relevant factors exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with interest, if any, to be paid upon the amount determined to be the fair value. When the fair value has been determined, the Delaware Court of Chancery will direct the payment of such value upon surrender by those stockholders of the certificates representing their shares of Common Stock. Unless the Court in its discretion determines otherwise for good cause shown, interest from the effective date of the Merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective time of the Merger and the date of payment of the judgment.
 
You should be aware that an investment banking opinion as to the fairness from a financial point of view of the consideration to be received in a sale transaction, such as the Merger, is not an opinion as to fair value under Section 262. Although we believe that the per share Merger Consideration is fair, no representation is made as to the outcome of the appraisal of fair value as determined by the Delaware Court of Chancery and stockholders should recognize that such an appraisal could result in a determination of a value higher or lower than, or the same as, the per share Merger Consideration. Moreover, we do not anticipate offering more than the per share Merger Consideration to any stockholder exercising appraisal rights and reserve the right to assert, in any appraisal proceeding, that, for purposes of Section 262, the “fair value” of a share of Common Stock is less than the per share Merger Consideration. In determining “fair value,” the Court is required to take into account all relevant factors.  In Weinberger v. UOP, Inc., the Delaware Supreme Court discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.”  The Delaware Supreme Court has stated that in making this determination of fair value, the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts which could be ascertained as of the date of the Merger which throw any light on future prospects of the merged corporation. Section 262 provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger.”  In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Delaware Supreme Court also stated that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the Merger and not the product of speculation, may be considered.” In addition, the Delaware courts have decided that the statutory appraisal remedy, depending on factual circumstances, may or may not be a dissenting stockholder’s exclusive remedy.
 
Costs of the appraisal proceeding (which do not include attorneys’ fees or the fees and expenses of experts) may be determined by the Delaware Court of Chancery and imposed upon the surviving corporation and the stockholders participating in the appraisal proceeding by the Delaware Court of Chancery, as it deems equitable in the circumstances. Upon the application of a stockholder, the Delaware Court of Chancery may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts used in the appraisal proceeding, to be charged pro rata against the value of all shares of Common Stock entitled to appraisal. Any stockholder who demanded appraisal rights will not, after the effective time of the Merger, be entitled to vote shares of Common Stock subject to that demand for any purpose or to receive payments of dividends or any other distribution with respect to those shares of Common Stock, other than with respect to payment as of a record date prior to the effective time of the Merger. If no petition for appraisal is filed within 120 calendar days after the effective time of the Merger, or if the stockholder otherwise fails to perfect, successfully withdraws or loses such holder’s right to appraisal, then the right of that stockholder to appraisal will cease and that stockholder’s shares will be deemed to have been converted at the effective time of the Merger into the right to receive the $9.75 per share cash payment (without interest) pursuant to the Merger Agreement. A stockholder will fail to perfect, or effectively lose, the right to appraisal if no petition for appraisal is filed within 120 calendar days after the effective date of the Merger. In addition, as indicated above, a stockholder may withdraw his, her or its demand for appraisal in accordance with Section 262 at any time within 60 days after the effective date of the Merger (or thereafter with the written approval of C&D) and accept the Merger Consideration offered pursuant to the Merger Agreement. Once a petition for appraisal has been filed with the Delaware Court of Chancery, however, the appraisal proceeding may not be dismissed as to any stockholder of C&D without the approval of the court, and such approval may be conditioned upon such terms as the court deems just; provided, that such restriction shall not affect the right of any stockholder who has not commenced an appraisal proceeding or joined the appraisal proceeding as a named party to withdraw such stockholder’s demand for appraisal and to accept the Merger Consideration within 60 days after the effective time of the Merger. Failure to comply strictly with all of the procedures set forth in Section 262 of the DGCL will result in the loss of a stockholder’s statutory appraisal rights.
 
In view of the complexity of Section 262 of the DGCL, C&D’s stockholders who may wish to pursue appraisal rights should consult their legal and financial advisors.
 
 
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SUMMARY FINANCIAL INFORMATION
 
Set forth below is certain selected historical financial information relating to C&D.  This financial information has been excerpted or derived from the audited financial statements filed and the related notes filed as part of C&D’s Annual Report on Form 10-K for the fiscal year ended January 31, 2011 (the “Form 10-K”) and the unaudited interim financial statements and the related notes filed as part of C&D’s Quarterly Reports on Forms 10-Q for the fiscal quarters ended April 30, 2011 and July 31, 2011 (the “Forms 10-Q”). This financial information should be read in conjunction with the audited financial statements and other financial information contained in the Form 10-K and the Forms 10-Q, including the notes thereto. More comprehensive financial information (including management’s discussion and analysis of financial condition and results of operations) is included in such reports and other documents filed by C&D with the SEC, and the following summary is qualified in its entirety by reference to such reports and other documents and all of the financial information and notes contained therein. The financial st