Exhibit 10.1

 

ENERSYS MANAGEMENT INCENTIVE PLAN (“Plan”)

Fiscal Year 2006

 

1. Plan Objectives

 

  •   Provide an incentive program that encourages executives, senior managers
and operating managers to embrace our corporate vision.

 

  •   Provide an incentive program to drive all participants to achieve
corporate goals by all working together as one company team.

 

  •   Provide participants with an opportunity to earn bonus compensation for
outstanding corporate financial performance.

 

  •   Provide focused attention on the most important measures of business
success.

 

2. Plan Term

 

The Plan will commence on the first day of the 2006 Fiscal Year (April 1, 2005)
and end on the last day of the Fiscal Year (March 31, 2006).

 

3. Plan Eligibility

 

It is intended that those who participate are executives, senior managers and
operating managers whose decisions and performance directly impact the overall
corporate success of EnerSys.

 

4. Performance Measures

 

The Plan is based on two corporate performance measures (one related to
corporate profitability and one related to our indebtedness) and one special
adjustment (related to compliance with Section 404 of the Sarbanes-Oxley Act of
2002) for 2006. These measures are the same for all participants in the Plan.

 

5. Payout Ranges

 

The payout ranges from 0 to 100% of base salary for our Chief Executive Officer,
and from 0 to 60% of base salary for our other executive officers. The payout
range for other participants is dependent upon such participant’s level of
responsibility in the Company.

 

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Plan Rules and Administration

 

1. Payment Qualifications

 

  a. Eligibility

 

In order to be eligible for any payment due under the Plan, a participant must
be employed by the Company on the payment date (normally during June of the
following fiscal year, except as otherwise provided below).

 

  b. Partial Year Participants:

 

Existing and new employees who join the Plan after the start of the fiscal year
will be eligible for any payment due under the Plan based on a pro rata amount.
This will be based on the participant base salary for the portion of the year
employed.

 

If a participant leaves after the year-end but before the payment date as a
result of retirement at normal retirement age, early retirement, ill
health/disability retirement or redundancy, they will be eligible for any
payment under the Plan on the normal payment date.

 

If a participant leaves for any other reason after the year-end but before the
payment date, any payment under the Plan will be at the sole discretion of the
Chairman, President and CEO.

 

Participants who terminate employment during the Plan year will not be eligible
for payments unless termination was caused by: retirement at normal retirement
age, early retirement with company consent, ill health/disability retirement or
redundancy. In such cases, pro rata awards will be at the sole discretion of the
Chairman, President and CEO and will be made based on the number of complete
months worked during the Plan year.

 

2. Payment Terms and Timing

 

Any bonus earned will be paid as soon as practical after the fully audited
annual results of the Company have been announced (normally during June). The
bonus is based upon the participant’s base earnings for the year.

 

The participant will be liable for any personal tax due or other statutory
payments due on any part of the incentive.

 

3. Plan Framework

 

  i. Any “windfall” impacts, either adverse or positive, will be excluded from
the calculations. The decision of the Chairman, President and CEO as to
“windfall” will be final.

 

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  ii. The calculation of an individual’s actual incentive is based on the
individual’s base earnings during the Plan year

 

4. Definitions

 

Any questions or disputes concerning the Plan rules, interpretation of the
rules, or any other issues pertaining to the Plan, will be determined by the
Chairman, President and CEO whose decision will be final and binding. All awards
under the Plan are solely at the discretion of the Chairman, President and CEO.

 

5. Participation

 

Notwithstanding the terms of the Plan and the information contained herein, an
employee’s participation in the Plan, and the award of bonus thereunder is
completely within the discretion of EnerSys’ Chairman, President and CEO. The
Plan is not contractual and does not constitute an employment contract, and the
terms of the Plan are subject to change at any time at the sole discretion of
EnerSys’ Chairman, President and CEO or the Compensation Committee of the Board
of Directors.

 

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