Exhibit 10.1
ENERSYS MANAGEMENT INCENTIVE PLAN (“Plan”)
Fiscal Year 2006
| | • | | 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. |
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).
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.
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.
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
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.
| | 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 |
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.
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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