EnerSys Annual Report 2023

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FY2023 Annual Report · EnerSys

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ENERSYS 2023

PROXY STATEMENT & ANNUAL REPORT

POWERING THE FUTURE EVERYWHERE FOR EVERYONE

A MESSAGE FROM OUR INDEPENDENT NON-EXECUTIVE CHAIR OF THE BOARD
AND OUR CHIEF EXECUTIVE OFFICER

June 22, 2023

Dear Fellow Stockholders:

In fiscal 2023 we continued to execute our strategic priorities, delivering strong revenue and earnings growth. The Company performed
remarkably well in a challenging environment, mitigating inflation and operational challenges and executing collaboratively to deliver
record results.

Achieving Record Financial Results

$M, except Diluted EPS

FY 2022

GAAP

FY 2023

YoY

FY 2022

Adjusted2

FY 2023

YoY

Sales

Operating Earnings2

EBITDA1

Diluted EPS2

$ 3,357.3

$ 3,708.5

$ 206.2

$ 278.3

+10.5%

+35.0%

3.36

4.25

+26.5%

$ 263.6

$ 339.5

$ 4.47

$ 322.2

$ 387.5

$ 5.34

+22.2%

+14.1%

+19.5%

Our proprietary technologies and robust end markets drove strong demand which was reflected in our fiscal 2023 full year revenue
growth of 10.5%. We ended the year with backlog near record highs of $1.3 billion, down 7% from the end of fiscal year 2022 as we saw
supply chain easing and advance ordering normalize. We achieved revenue growth across all of our lines of business, with Energy
Systems, Motive Power and Specialty increasing net sales by 13.1%, 6.6% and 13.0%, respectively. Significant price execution during
the year offset inflationary pressures, resulting in Adjusted Operating Earnings2 margin expansion. EnerSys generated full year free cash
flow2 of over $191 million (including a $150 million asset securitization), returned over $51 million to stockholders through share
repurchases and dividends and reduced our net leverage2, ending the year at 1.8x.

As a leader in driving the global energy transition, we are eligible to recognize credits through the Inflation Reduction Act (IRA) beginning
in calendar year 2023. This reinforces the critical nature of the products and services we provide. We plan to use the funds we receive
from the IRA as intended by the law; to make investments that increase our capacity and domestic sourcing of energy dense battery
technologies including lithium-ion.

Delivering Customer-Centric Innovation

During the year, we continued to make strategic investments in our technology and innovation roadmap, partnering with customers to
ensure we are delivering the energy systems solutions needed for years to come. Demand for our maintenance-free solutions continues
to increase, and we achieved our goal of increasing our Thin Plate Pure Lead (TPPL) annual operating capacity to nearly $1.4 billion
exiting fiscal 2023. In line with our strategic plan, we remain on track to increase capacity by an additional $150—$200 million per year
through fiscal year 2025.

We continue to progress toward full commercialization of our proprietary and revolutionary EV Fast Charge and Storage (FC&S) offering
which combines energy storage, backup power and EV fast charging capabilities in a single solution.

Commitment to a Sustainable Future

Building on our inaugural Sustainability Report that was published in April 2022, we have continued to make progress on our
commitment to building a sustainable future.

In December 2022, EnerSys published its first Task Force on Climate-related Financial Disclosures (TCFD) report. The TCFD report
demonstrates progress along the Company’s sustainability journey and is aligned with our commitment to achieve net zero Scope 1
emissions by 2040 and net zero Scope 2 emissions by 2050.

In our 2022 Sustainability Update published in May 2023, we highlighted progress by achieving the following:

(cid:2) We reduced Global Greenhouse Gas Emissions by 4%.
(cid:2) Scope 1 emissions were down 8% vs 2021, surpassing 24% reduction since 2019.

(cid:2) Scope 2 emissions decreased by 3.7% vs 2021.

(cid:2) Water consumption was reduced by 1.4% vs 2021, the equivalent amount of drinking water a city of 12,000 uses in a year.

(cid:2) In calendar year 2022, we successfully saved ~$3 million on energy compared to business-as-usual baselines, marking a 2.4%

year-over-year reduction in total energy consumed.

In February 2023, EnerSys was named to Newsweek’s list of America’s Most Responsible Companies 2023 as a top performer for
corporate responsibility in the Technology Hardware industry category.

In April 2023, EnerSys was awarded the Better Practice Award from the U.S. Department of Energy Better Plants Program for the
implementation of the EnerSys Operating System (EOS) Lean Management program.

Building a Winning Culture

In February 2023, we were honored with the 2023 Most Valuable Supplier (MVS) Award from the Material Handling Equipment
Distributors Association (MHEDA). This marks the ninth consecutive year that EnerSys has received the award, a testament to the
Company’s desire to give back to the industry and our commitments to business excellence and community service.

After the close of our fiscal year, we named Shannon Thomas our new Chief Human Resources Officer (CHRO). In this role, she is
responsible for the strategy, leadership, and operations of the global Human Resources function, overseeing the Company’s talent
lifecycle and development, total rewards, as well as our diversity, equity and inclusion (DEI) initiatives. We believe that her strategic
vision and leadership will be instrumental as we continue to attract, develop, and retain top talent from around the world.

Strengthening our Board of Directors

In August 2022, the Board appointed Rudolph (Rudy) Wynter, President of National Grid’s New York business, as a director. The
breadth and depth of Rudy’s experience in the utility industry, particularly with clean energy and electric grid resilience will provide
tremendous value to EnerSys’ leadership team.

In December 2022, the Board appointed Tamara (Tammi) Morytko, former President of the Pumps Division at Flowserve Corporation, as
a director. She brings decades of experience with global industrial manufacturing operations, including supply chain expertise, which will
provide excellent support for the EnerSys leadership team and our strategic objectives.

Since May 2020, the Board has added four new independent directors, two of whom are women.

Looking Ahead

We see fiscal 2024 as the beginning of a new era for EnerSys. As megatrends including electrification, decarbonization and automation
drive increased demand for energy storage, EnerSys is well-positioned to deliver the solutions that our customers need. In addition, we
expect that government policy support such as the IRA and the Rural Digital Opportunity Fund will further accelerate demand for
EnerSys’ solutions. We remain focused on being good corporate citizens and delivering long-term value to our stockholders through
profitable growth and a disciplined capital allocation strategy. Although significant uncertainty in the global markets remains, we could
not be more excited about the growth potential of our Company and the markets in which we compete.

We want to thank our stockholders, customers, employees, and other stakeholders for your continued trust in us.

Sincerely,

Arthur T. Katsaros
Independent Non-Executive Chair of the Board

David M. Shaffer
President and Chief Executive Officer

1 EBITDA is a non-GAAP financial metric. Net Earnings are adjusted for GAAP depreciation, amortization, interest and income taxes to arrive at EBITDA,
which was $307.5M in FY’22 and $361.3M in FY’23. See Footnote 2 for additional information.

2 Adjusted operating earnings, EBITDA, adjusted diluted earnings per share, free cash flow and net leverage ratio are non-GAAP financial metrics. Please
refer to “Management’s Discussion and Analysis” in our Annual Report on Form 10-K attached to this letter for additional information and to a reconciliation of
the non-GAAP measures to the comparable GAAP measure contained in Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on May 24, 2023.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements in this letter and proxy statement regarding EnerSys’
business, which are not historical facts, are “forward-looking statements” that involves risks and uncertainties. For a discussion of such risks and uncertainties
that could cause actual results to differ from those contained in the forward-looking statements, see EnerSys’ filings with the Securities Exchange
Commission, including “Item 1A. Risk Factors” in EnerSys’ Annual Report on Form 10-K attached to this letter. These statements speak only as of the date of
this letter and proxy statement, even if subsequently made available by EnerSys on its website or otherwise. EnerSys undertakes no obligation to update or
revise these statements to reflect events or circumstances occurring after the date of this letter and proxy statement.

ANNUAL MEETING INVITATION

June 22, 2023

Dear Fellow Stockholder:

Our 2023 Annual Meeting will be held virtually on Thursday, August 3, 2023, at 10:00 a.m. (Eastern Time). We have
carefully contemplated the forum in which to conduct the annual meeting and determined that holding a virtual meeting live
via webcast creates an inclusive environment that affords all Stockholders the opportunity to attend and participate in the
meeting. Stockholders will not be able to attend the Annual Meeting in person.

The Annual Meeting will be accessible online only at www.proxydocs.com/ENS (the “Annual Meeting platform”). We
encourage you to access the Annual Meeting platform prior to the start time and allow sufficient time to log into the virtual
Annual Meeting and test your computer system. You can do so by entering the control number found on the proxy card or
voting instruction form that accompanied your previously distributed proxy materials when requested by the Annual
Meeting platform. Upon registering for the Annual Meeting, you will receive an email with additional information related to
the virtual meeting. You may vote and ask questions during the Annual Meeting by following the instructions available on
the Annual Meeting platform.

Your vote is important regardless of the number of shares you own. Whether or not you plan to attend the Annual Meeting
virtually, we urge you to read these proxy materials and cast your vote on the matters that will be presented at the Annual
Meeting. Stockholders of record have the option of voting by telephone, through the Internet or by completing, signing,
dating, and returning the enclosed proxy card in the envelope provided. Doing so will not prevent you from voting virtually
during your attendance at the Annual Meeting.

Thank you for your continued support and interest in EnerSys.

Sincerely,

Arthur T. Katsaros
Independent Non-Executive Chair of the Board

[THIS PAGE INTENTIONALLY LEFT BLANK]

Notice of 2023 Annual Meeting of Stockholders

Date and Time:

Thursday, August 3, 2023, at 10:00 a.m. (Eastern Time)

Place:

www.proxydocs.com/ENS

Items to be voted:

(cid:2)

elect four (4) Class I director nominees named in this proxy statement;

approve, ratify and adopt the EnerSys 2023 Equity Incentive Plan;

ratify the appointment of Ernst & Young LLP as the Company’s independent
registered public accounting firm for fiscal year ending March 31, 2024;

an advisory vote to approve the compensation of EnerSys’ named executive
officers; and

conduct any other business properly brought before the meeting.

Record date:

Stockholders of record at the close of business on June 8, 2023, may vote at the meeting, and
any adjournments or postponements thereof. A list of stockholders will be available at the
Annual Meeting.

By Order of the Board of Directors

Joseph G. Lewis
Senior Vice President, General Counsel,
Chief Compliance Officer & Secretary

June 22, 2023

Your vote is important!
Stockholders of record can vote their shares by using the Internet or the telephone or by attending the meeting virtually
and voting in accordance with the website’s instructions. Instructions for voting by using the Internet or the telephone are
set forth in the Notice of Internet Availability that has been provided to you. Stockholders of record who received a paper
copy of the proxy materials also may vote their shares by marking their votes on the proxy card provided, signing and
dating it, and mailing it in the envelope provided, or by attending the meeting and voting virtually.

Important Notice Regarding the Availability
of Proxy Materials for the Annual Meeting to be Held on August 3, 2023

The Proxy Statement and Annual Report to Stockholders are available at www.enersys.com and at
www.proxydocs.com/ENS.

[THIS PAGE INTENTIONALLY LEFT BLANK]

TABLE OF CONTENTS

GENERAL INFORMATION

PROPOSAL NO. 1 ELECTION OF THE CLASS I DIRECTOR NOMINEES OF THE BOARD OF DIRECTORS

General
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Director Nominees of the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

BOARD OF DIRECTORS

CORPORATE GOVERNANCE

Independence of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Access to Corporate Governance Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Committees of our Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Process for Selection of Director Nominee Candidates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Board Leadership Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Board’s Role in Risk Oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charters of the Committees of the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Director Attendance at Board, Committee and Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Executive Sessions of Non-Management Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Communications with the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Code of Business Conduct and Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ESG Oversight & Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Human Capital Management

DIRECTOR COMPENSATION

Cash Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Director Deferred Compensation Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Ownership Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hedging Prohibition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL YEAR 2023

PROPOSAL NO. 2 APPROVE, RATIFY AND ADOPT THE ENERSYS 2023 EQUITY INCENTIVE PLAN

Section 162(m)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share Usage and Key Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Key Features of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 EIP Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
New Plan Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal Income Tax Consequences of Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity Compensation Plan Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PROPOSAL NO. 3 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

AUDIT COMMITTEE REPORT

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Process and Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services by Independent Auditors . . . . . . . . .
Appointment of Independent Registered Public Accounting Firm for Fiscal Year 2024 . . . . . . . . . . . . . . . . . . . . . . .

EXECUTIVE OFFICERS

EXECUTIVE COMPENSATION

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5

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Compensation Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal Year 2023 Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal Year 2023 Compensation Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Summary of Other Major Program Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Results of 2022 Advisory Vote on Executive Compensation–Say-on-Pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Executive Compensation Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Determination of Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Components of Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Compensation Committee Report

Compensation Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Summary Compensation Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Grants of Plan-Based Awards Table for Fiscal Year 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding Equity Awards as of March 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options Exercised and Stock Vested During Fiscal Year 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

CEO PAY RATIO

Pay versus Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Related Person Transaction Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indemnity and Expense Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

DELINQUENT SECTION 16(a) REPORTS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

PROPOSAL NO. 4 ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

OTHER INFORMATION

Stockholder Proposals or Nominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reduce Duplicate Mailings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proxy Solicitation Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Incorporation by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Annual Report for Fiscal Year 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ENERSYS 2023 EQUITY INCENTIVE PLAN

2023 ANNUAL REPORT ON FORM 10-K

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A-1

B-1

PROXY STATEMENT

GENERAL INFORMATION

Solicitation of Proxies

The Board of Directors of EnerSys is providing this Proxy Statement to solicit proxies for use at EnerSys’ virtual annual
meeting of stockholders to be held on Thursday, August 3, 2023, at 10:00 a.m. (Eastern Time) or any adjournment or
postponement thereof (the “Annual Meeting”). EnerSys (the “Company,” “we,” “our,” or “us”) is first delivering this Proxy
Statement and the foregoing Notice on or about June 22, 2023.

Purpose of the Meeting

At the Annual Meeting, our stockholders will be asked to vote on the following proposals:

Proposals

To elect the four (4) Class I director nominees of the Board of Directors of EnerSys, each to
serve until the 2026 annual meeting of stockholders, or until the earlier of their resignation or
their respective successors shall have been elected and qualified

2 To approve, ratify and adopt the EnerSys 2023 Equity Incentive Plan

To ratify the appointment of Ernst & Young LLP as EnerSys’ independent registered public
accounting firm for the fiscal year ending March 31, 2024

4 An advisory vote to approve EnerSys’ named executive officer compensation

Board
Recommendation

Page
Reference

FOR

Voting and Revocation of Proxies

Stockholders of record have a choice of voting by way of traditional proxy card, by telephone or through the Internet.

By Mail

By Telephone

Through Internet

▪ Request a proxy card from us by following the instructions on your Notice of Internet

Availability.

▪ When you receive your proxy card, mark your selections on the proxy card.
▪ Date and sign your name exactly as it appears on the proxy card.
▪ Mail the proxy card in the postage-paid envelope that’s provided to you with your proxy card.
If you return the signed proxy card but do not mark the boxes showing how you wish to vote,
your votes will be cast “FOR” the election of all director nominees; “FOR” the approval,
ratification and adoption of the 2023 Equity Incentive Plan; “FOR” the ratification of the
appointment of Ernst & Young LLP as EnerSys’ independent registered public accounting firm;
and “FOR” the approval of executive compensation.

Call toll-free 1-866-284-6730 and follow the voice prompts.

Access the website www.proxypush.com/ens and follow the instructions.

We encourage each stockholder of record to submit their proxy electronically through the Internet, if that option is
available, or by telephone. Delivery of a proxy in any of the three ways listed above will not affect the right of a stockholder
of record to attend the Annual Meeting and vote during the virtual meeting. If you hold your shares in “street name” (that is,
through a broker, trustee or other holder of record), you will receive a voting instruction card from your broker seeking
instructions as to how your shares should be voted. If no voting instructions are given, your broker or nominee has
discretionary authority to vote your shares on your behalf on routine matters. A “broker non-vote” results on a matter when
your broker or nominee returns a proxy but does not vote on a particular proposal because it does not have discretionary
authority to vote on that proposal and has not received voting instructions from you. We believe that your broker or
nominee only has discretionary voting power with respect to the proposal regarding the ratification of the appointment of
the independent registered public accounting firm. You may not vote shares held in “street name” at the Annual Meeting
unless you obtain a legal proxy from your broker or holder of record.

Any stockholder of record giving a proxy may revoke it by doing any of the following:

(cid:3) delivering a written notice of revocation to the Secretary of EnerSys, dated later than the proxy, before the vote is

taken at the Annual Meeting;

(cid:3) delivering a duly executed proxy to the Secretary of EnerSys, bearing a later date (including proxy by telephone or

through the Internet) before the vote is taken at the Annual Meeting; or

(cid:3) voting virtually at the Annual Meeting (your attendance at the Annual Meeting, in and of itself, will not revoke the

proxy).

Any written notice of revocation, or later dated proxy, should be delivered to EnerSys, 2366 Bernville Road, Reading,
Pennsylvania 19605, Attention: Joseph G. Lewis, Senior Vice President, General Counsel, Chief Compliance Officer and
Secretary.

Record Date

Only stockholders of record at the close of business on June 8, 2023 (the “Record Date”) are entitled to notice of, and to
vote at, the Annual Meeting. At the close of business on the Record Date, there were 40,959,432 shares of EnerSys
common stock outstanding, each of which will be entitled to one vote at the Annual Meeting.

Quorum

The presence, virtually or by proxy, of stockholders entitled to cast at least a majority of the votes that all stockholders are
entitled to cast will constitute a quorum at the Annual Meeting. Proxies received but marked as abstentions and broker
non-votes will be included in the calculation of the number of votes considered to be present at the Annual Meeting for
purposes of determining the presence of a quorum.

Tabulation of Votes

Our bylaws provide for majority voting procedures for the election of directors in an election where the number of director
nominees does not exceed the number of directors to be elected (an “uncontested election”). In an uncontested election, to
be elected, a director nominee must receive more “for” than “against” votes cast by the holders of shares of our common
stock present virtually or represented by proxy at the meeting and entitled to vote on the election of directors (a “majority
vote”). In an election where the number of director nominees exceeds the number of directors to be elected, directors are
elected by a plurality vote, which means that the director nominees receiving the most votes cast by the holders of shares
of our common stock present virtually or represented by proxy at the meeting and entitled to vote on the election of
directors will be elected, regardless of the number of votes cast in favor of each director nominee. The election of directors
at this Annual Meeting is an uncontested election. A nominee holding shares in street name does not have discretionary
voting power with respect to the election of directors and may not vote shares unless the nominee receives voting
instructions from the beneficial owner. If your shares are held by a broker, it is important that you provide
instructions to your broker so your vote is counted in the election of directors. Abstentions and broker non-votes will
not constitute or be counted as “votes” cast for purposes of Proposal 1.

If an incumbent director receives more “against” than “for” votes, in accordance with our Corporate Governance
Guidelines, the Nominating and Corporate Governance Committee of our Board of Directors will consider such director’s
contingent resignation and recommend to the Board of Directors the action to be taken. The Board of Directors will act on
such recommendation and publicly disclose its decision and the rationale behind such decision within 90 days from the
date of the certification of the election results.

The approval of each of the EnerSys 2023 Equity Incentive Plan and the ratification of the appointment of Ernst & Young
LLP, as EnerSys’ independent registered public accounting firm for the fiscal year ending March 31, 2024, requires the
affirmative vote of the holders of a majority of the shares represented and entitled to vote at the Annual Meeting. With
respect to these matters, abstentions will have the same effect as voting against such proposal, and broker non-votes, if
any, will not constitute or be counted as “votes” cast for purposes of such proposal.

The affirmative vote of the holders of a majority of shares of our common stock, present virtually or represented by proxy
and entitled to vote, is required for approval with respect to the advisory vote to approve our named executive officer
compensation. An abstention is treated as present and entitled to vote and therefore has the effect of a vote against the
advisory vote on executive compensation. A nominee holding shares in street name does not have discretionary voting
power with respect to this proposal and may not vote shares unless the nominee receives voting instructions from the
beneficial owner. Additionally, a broker non-vote will not constitute or be counted as “votes” cast for purposes of the
advisory vote to approve our named executive officer compensation.

Although the advisory vote to approve our named executive officer compensation is non-binding, as provided by law, the
Compensation Committee of our Board of Directors will review the result of the vote and take it into account in making a
determination concerning executive compensation. For information regarding the Compensation Committee’s views in
connection with the results of the 2022 non-binding advisory vote of stockholders to approve executive compensation, see
the discussion beginning on page 40.

If any other matters are properly presented for consideration at the meeting, including, among other things, consideration
of a motion to adjourn the meeting to another time or place, the persons named in the proxy card will have discretion to
vote on those matters according to their best judgment to the same extent as the person signing the proxy would be
entitled to vote. At the date of this proxy statement, we do not anticipate that any other matters will be raised at the Annual
Meeting.

Attendance at the Annual Meeting

This year’s Annual Meeting will be a virtual meeting of the stockholders. All Stockholders of record on June 8, 2023 are
invited to participate in the meeting. We have structured our virtual meeting to provide stockholders the same rights as if
the meeting were held in person, including the ability to vote shares electronically during the meeting and ask questions in
accordance with the rules of conduct for the meeting.

Virtual admittance to the Annual Meeting will be limited to stockholders as of close of business on the Record Date, their
authorized representatives and guests of EnerSys. A list of stockholders will be available at the Annual Meeting. To be
admitted to the Annual Meeting, you must register for the meeting online at www.proxydocs.com/ENS in advance of the
meeting, which will be held at 10:00 a.m. (Eastern Time) on August 3, 2023. You can do so by entering the control number
found on the proxy card or voting instruction form that accompanied your previously distributed proxy materials when
requested by the Annual Meeting platform. Upon registering for the Annual Meeting, you will receive an email with
additional information related to the virtual meeting, including your unique links that will allow you to access the meeting
and to submit questions in advance of the meeting. Additional instructions on how to access and navigate attendance at
the Annual Meeting can be found on our website at investor.enersys.com.

Asking and/or Submitting Questions During the Annual Meeting

Our virtual Annual Meeting will allow stockholders to submit questions before the meeting, during the entirety of the
registration period, and additionally again in real time live during the Annual Meeting. During the designated question and
answer period at the Annual Meeting, we will respond to appropriate questions submitted by stockholders.

We will answer as many stockholder-submitted questions as time permits, with the exception of any questions that are
irrelevant to the purpose of the Annual Meeting or our business or that contain inappropriate or derogatory references that
are not in good taste. If we receive substantially similar questions, we will group such questions together and provide a
single response to avoid repetition. Any questions that we are unable to address during the Annual Meeting will be
answered following the meeting.

Technical Support for the Virtual Meeting Platform

We encourage you to access the Annual Meeting platform prior to the start time and allow ample time to log into the virtual
Annual Meeting and test your computer system. If you encounter any difficulties accessing the Annual Meeting platform,
including any difficulties voting or submitting questions, technical support contact information including links to an FAQ
Knowledgebase and a meeting specific technical support telephone number will be provided on the meeting invitation sent
one hour prior to the meeting, and technicians will be available until the meeting concludes.

Proposal No. 1

Election of the Class I Director Nominees of the Board of Directors

General
Our certificate of incorporation provides that the Board of Directors shall consist of not less than three or more than eleven
members, as fixed by the Board of Directors from time to time. The certificate of incorporation also divides the Board into
three classes, with each class to be as nearly equal in number as possible. The members of each class will serve for a
staggered, three-year term. Upon the expiration of the term of a class of directors, nominees for directors in that class will
be considered for election for three-year terms at the annual meeting of stockholders in the year in which the term of
directors in that class expires.

Our Board of Directors set its size at eleven members, divided into three classes. The classes are currently composed of
the following directors:

(cid:3) Ms. Chan and Messrs. Fludder, Tufano and Wynter are Class I director nominees, whose terms will expire, if elected,

at the 2026 annual meeting of stockholders;

(cid:3) Mr. Chung, Mr. Katsaros, Ms. Morytko, and Gen. Magnus, USMC (Retired) are Class II directors, whose terms will

expire at the 2024 annual meeting of stockholders; and

(cid:3) Messrs. Hoffen, Shaffer and Vargo are Class III directors, whose terms will expire at the 2025 annual meeting of

stockholders.

Our Corporate Governance Guidelines provide that a director who has reached the age of 75 may not be nominated for
re-election.

Director Nominees of the Board of Directors
Based on the recommendation of the Nominating and Corporate Governance Committee, the Board of Directors has
unanimously nominated each of Ms. Chan and Messrs. Fludder, Tufano and Wynter for election as Class I directors of
EnerSys. Each director nominee currently serves as a director of EnerSys, and each has consented to being named in this
Proxy Statement and to serve, if elected. Each of the directors elected at the Annual Meeting will hold office until the 2026
annual meeting of stockholders or until the earlier of their resignation or their successors are duly elected and qualified. If
any of the nominees become unable to accept their nomination or election, the persons named in the proxy may vote for a
substitute nominee selected by the Board of Directors. Our management, however, has no present reason to believe that
any Class I nominee will be unable to serve as a director, if elected.

The Board of Directors recommends a vote “FOR”
each director nominee

BOARD OF DIRECTORS

The following tables set forth certain information with respect to our directors and our director nominees as of the date of
this Proxy Statement:

Name

Arthur T. Katsaros

Caroline Chan

Hwan-yoon F. Chung

Steven M. Fludder

Howard I. Hoffen

Gen. Robert Magnus, USMC (Retired)

Tamara Morytko

David M. Shaffer

Paul J. Tufano

Ronald P. Vargo

Rudolph Wynter

Age

Position with EnerSys

Independent Non-Executive Chair

Director

Director, President and Chief Executive Officer

Director

Term will
Expire(1)

2024

2023

2024

2023

2025

2024

2025

2023

2025

2023

(1) Terms of office for continuing directors and director nominees are scheduled to expire at the annual meeting of stockholders to be held in the year indicated. In

accordance with the Corporate Governance Guidelines, no director who has reached the age of 75 may be nominated for re-election. Mr. Katsaros and Gen.
Magnus will therefore not be eligible for re-election at the 2024 Annual Meeting of Stockholders.

Our directors and director nominees collectively possess the expertise, leadership skills, and diversity of experiences and
backgrounds to oversee the execution of the Company’s growth strategy and protect long-term stockholder value, which
qualifications are summarized below. More detailed information about each director and director nominee can be found
under their respective biography.

Name

Executive
Leadership

Character /
Integrity

Industry /
Manufacturing

Scientific /
Technology

Global /
International

Accounting /
Financial

Environmental

Arthur T. Katsaros

Caroline Chan

Hwan-yoon F. Chung

Steven Fludder

Howard I. Hoffen

Gen. Robert Magnus

Tamara Morytko

David M. Shaffer

Paul J. Tufano

Ronald P. Vargo

Rudolph Wynter

Our directors and director nominees are diverse in gender and demographic background, which are summarized below as
of the date of this Proxy Statement.

Board Diversity Matrix *

Gender Identity

Demographic Background

African American or Black

Alaskan Native or American Indian

Asian

Hispanic or Latinx

Native Hawaiian or Pacific Islander

White

Two or More Races or Ethnicities

LGBTQ+

* Based on 11 Total Number of Directors

#
Female

#
Male

ARTHUR T. KATSAROS

Age 75

Director Since 2005

Former Group Vice President - Development and Technology, Air Products and Chemicals Inc.

INDEPENDENT NON-EXECUTIVE CHAIR OF THE BOARD

DIRECTOR QUALIFICATION HIGHLIGHTS

EnerSys Committees: None

Other Public Boards: None

✓ Senior Management Leadership
✓ International Business
✓ Global Manufacturing
✓ Environmental

Career Highlights: Mr. Katsaros has been a Director of EnerSys since July 2005 and the Independent Non-Executive
Chair of the Board of Directors since May 2016. Mr. Katsaros was the Group Vice President—Development and
Technology of Air Products and Chemicals, Inc. a leading industrial gases company, from 2002 and until his retirement in
April 2007. From 1996 through 2002, he was Group Vice President of Engineered Systems and Operations of Air
Products.

Board Experience: Mr. Katsaros serves as the Chairman of CDG Environmental, LLC, a manufacturer of supply systems
for water treatment, a position he has held since 2009.

Skills and Qualifications: Mr. Katsaros’ experience qualifying him for service as a member of the Board of Directors
includes over fifteen years’ experience in executive positions with a global manufacturer, in charge of international
business and operations, such as manufacturing, engineering, information technology and research and development. His
background and his experience as a member of our Board of Directors qualifies him to serve as Independent
Non-Executive Chair of the Board. Mr. Katsaros received a Bachelor of Science degree in Chemical Engineering from
Worcester Polytechnic Institute and a Master of Business Administration from Lehigh University. He also completed the
Advanced Management Program at Harvard University’s Graduate School of Business.

CAROLINE CHAN

Age 60

Director Since 2020

Vice President & General Manager, Intel Corporation

INDEPENDENT DIRECTOR

DIRECTOR QUALIFICATION HIGHLIGHTS

EnerSys Committees: Compensation, Nominating & Corporate
Governance, Technology Advisory Committee

Other Public Boards: None

✓ Wireless / 5G Infrastructure
✓ Strategic Planning
✓ International Business

Career Highlights: Ms. Chan has been a Director of EnerSys since July 2020. Since 2018, she has been the Vice
President and General Manager of the Network Business Incubator Division at Intel Corporation, a leading global
technology company, whose shares are listed on The NASDAQ Stock Market. Ms. Chan has held numerous other
positions with Intel, such as Vice President and General Manager of the 5G Infrastructure Division (from 2017 through
2018), Sr. Director of the 5G Infrastructure Division (from 2016 to 2017), Director of Wireless Technology and Strategy
(from 2010 to 2016), and Director of Strategy Business Development, Wireless Program Office (from 2009 through 2010).

Board Experience: Since 2017, Ms. Chan has served as a director of Telecom Infra Project, a non-profit membership
organization focused on progress and developments in all facets of the telecom industry.

Skills and Qualifications: Ms. Chan’s strategic planning expertise, especially as it relates to 5G and wireless
infrastructure and market development, makes her an invaluable contributor to the Board. Ms. Chan received her Bachelor
of Science degree in Electrical and Computing Engineering from the University of Texas and her Master of Science degree
in Electrical and Computing Engineering from the University of Massachusetts.

HWAN-YOON F. CHUNG

Age 49

Director Since 2006

Managing Director, DCP Capital

INDEPENDENT DIRECTOR

EnerSys Committees: Audit

Other Public Boards: None

DIRECTOR QUALIFICATION HIGHLIGHTS

✓ Financial Expert
✓ Private Equity
✓ Environmental

Career Highlights: Mr. Chung has been a Director of EnerSys since February 2006. He is the Managing Director of DCP
Capital, a private equity firm, since August 2017. From December 2015 to August 2017, he was the Senior Vice
President—Corporate Finance of Hudson’s Bay Company, a department store operator. From November 2012 through
December 2015, he was President and Chief Executive Officer of Allied Resource Company, a privately held investment
company with interests in businesses that deploy proprietary industrial-scale technologies to recycle waste, reduce
pollutants and other emissions. Prior thereto, Mr. Chung was a Principal of Metalmark Capital LLC, a private equity firm,
since its inception in 2004 until 2012.

Board Experience: Mr. Chung currently serves as a Director of several privately held businesses, including MFS
Technology, a flexible printed circuit board manufacturer, and Orgain, Inc., a nutritional foods company. Mr. Chung also
served as a Director of Shape Technologies Group, a leading ultrahigh-pressure pump manufacturer, from 2019 to 2020,
and PURAGLOBE, a leading used oil recycling technology company, from 2013 to 2017.

Skills and Qualifications: The financial acumen and environmental experience that Mr. Chung obtained through his
private equity background were attributes important in qualifying him for service as a member of the Board of Directors,
and a member and financial expert to the Audit Committee. Mr. Chung received his Bachelor of Arts in Philosophy from the
College of Arts and Sciences of the University of Pennsylvania, and his Bachelor of Science degree in Economics from the
Wharton School of Business of the University of Pennsylvania.

STEVEN M. FLUDDER

Age 63

Director Since 2020

Chief Executive Officer of LS Energy Solutions LLC

INDEPENDENT DIRECTOR

DIRECTOR QUALIFICATION HIGHLIGHTS

EnerSys Committees: Audit, Nominating & Corporate
Governance, Technology Advisory Committee

Other Public Boards: None

✓ Smart Energy Storage
✓ Electric Grid Experience
✓ Environmental Business Initiatives

Career Highlights: Mr. Fludder has been a Director of EnerSys since July 2020. Since October 2020, he is the President
and Chief Executive Officer of LS Energy Solutions LLC, an energy storage and related technologies company. From 2017
to June 2020, he served as the Chief Executive Officer of NEC Energy Solutions, Inc., an electric power grid scale energy
storage company wholly owned by NEC Corporation, a Japanese multinational information technology and electronics
company whose shares are listed on the Tokyo Stock Exchange. From 2015 to 2017, Mr. Fludder was the Chief Executive
Officer of alpha-En Corporation, a battery technology company, whose shares were publicly quoted on the OTC stock
market. From 2010 to 2014, he was Senior Executive Vice President, Division General Manager and Samsung Group
Officer, where he was head of worldwide sales and marketing for Samsung Engineering, a global engineering,
procurement and construction (EPC) firm serving a broad range of energy industries, and President of Samsung Techwin
Power Systems Division. Prior to Samsung, he had a 27-year career with General Electric in various roles, including having
served as a Vice President and Corporate Officer where he led GE’s companywide environmental business initiative.

Board Experience: Mr. Fludder served as a director of Ocean Power Technologies Inc., a renewable energy company
focused on remote offshore applications whose shares are listed on The New York Stock Exchange, from May 2016
through December 2020.

Skills and Qualifications: Mr. Fludder’s expertise in smart energy storage and electrical grids, as well as his significant
experience in environmental-focused business initiatives, qualifies him to serve on the Board of Directors. He received a
Bachelor of Science degree in Mechanical Engineering from Columbia University and a Bachelor of Science degree from
Providence College. He earned a Master of Science degree in Mechanical Engineering from the Massachusetts Institute of
Technology.

HOWARD I. HOFFEN

Age 59

Director Since 2004

Chairman, CEO and Managing Director, Metalmark Capital LLC

INDEPENDENT DIRECTOR

DIRECTOR QUALIFICATION HIGHLIGHTS

EnerSys Committees: Nominating & Corporate Governance

Other Public Boards: None

✓ Audit & Financial
✓ Risk Management
✓ Strategic Planning

Career Highlights: Mr. Hoffen has been a Director of EnerSys since it became publicly traded in July 2004. He is currently
the Chairman, Chief Executive Officer, and a Partner of Metalmark Capital LLC. Mr. Hoffen was a founding member of
Metalmark in 2004 and served as Chairman and Chief Executive Officer of Morgan Stanley Capital Partners from 2001 to
2004, after having performed various roles in the private equity group since he joined Morgan Stanley in 1985.

Board Experience: From October 2019 to September 2021, Mr. Hoffen served as Chairman of Amplitude Healthcare
Acquisition Corp., a biotechnology company in hematopoietic stem cell transplantation, whose shares are listed on The
NASDAQ Stock Market. He served as a Director of Pacific Coast Energy Holdings LLC, the general partner of Pacific
Coast Oil Trust, whose trust units were listed on The New York Stock Exchange from 2008 to September 2019, and as a
Director of Jones Energy Inc., an independent oil and gas company whose shares were listed on The New York Stock
Exchange, from 2009 to May 2017. He is also a Director of several private companies and serves on the Board of Visitors
of The Fu Foundation School of Engineering and Applied Sciences at Columbia University.

Skills and Qualifications: Through Mr. Hoffen’s experience in private equity and service on other corporate boards, he
has dealt with a wide range of issues including audit and financial reporting, risk management, executive compensation
and strategic planning. He received his Master of Business Administration degree from Harvard Business School and his
Bachelor of Science degree from Columbia University.

GEN. ROBERT MAGNUS, USMC (RETIRED) Age 76

Director Since 2008

Retired Asst. Commandant of the United States Marine Corps

INDEPENDENT DIRECTOR

DIRECTOR QUALIFICATION HIGHLIGHTS

EnerSys Committees: Compensation, Nominating &
Corporate Governance (Chair)

Other Public Boards: None

✓ Financial Acumen
✓ Business & Military Experience
✓ Environmental Business Initiatives

Career Highlights: Gen. Magnus has been a Director of EnerSys since July 2008. Gen. Magnus served as the Assistant
Commandant of the U.S. Marine Corps from 2005 to 2008. He retired from the U.S. Marine Corps in 2008 after over 38
years of distinguished service. Gen. Magnus’ operational assignments included Commander, Marine Corps Air Bases
Western Area and Deputy Commander, Marine Forces Pacific. Gen. Magnus’ staff assignments included Chief, Logistics
Readiness Center, Joint Staff; Executive Assistant to the Director of the Joint Staff; Head, Aviation Plans and Programs
Branch; Assistant Deputy Chief of Staff for Aviation; Assistant Deputy Commandant for Plans, Policies, and Operations;
and Deputy Commandant for Programs and Resources.

Board Experience: Gen. Magnus has served as a director of Kendall-Xylem, a vegetation management company, since
May 2023. Gen. Magnus previously served as the Chairman of the Board of Directors of Elbit Systems of America, LLC, a
provider of defense, homeland security, commercial aviation and medical products and solutions, as well as aircraft
maintenance, repair and overhaul services, from March 2011 through December 2020. He also served as a Director of All
My Sons Moving and Storage, a provider of moving services, from 2018 through 2021, and as a Director of Augusta
Westland NA, a subsidiary of Italy’s Finmeccanica, a producer of advanced helicopters, from June 2009 to March 2016,
and a Director of Fairway Group Holdings Corp, which is a provider of specialty grocery products and whose shares were
listed on The NASDAQ Stock Market, from February 2014 until July 2016.

Skills and Qualifications: Gen. Magnus’ extensive financial management experience and responsibilities for peacetime
and wartime programs and budgets for the U.S. Marine Corps, as well as his experience with environmental business
initiatives, qualifies him for service as a member of our Board of Directors, member of the Compensation Committee, and
Chair of the Nominating and Corporate Governance Committee. Gen. Magnus received his Bachelor of Arts degree in
history from the University of Virginia and his Master of Business Administration degree from Strayer College. His formal
military education included Naval Aviator Training, U.S. Marine Corps Command and Staff College, and the National War
College. Gen. Magnus’ personal decorations included two Distinguished Service Medal awards, the Defense Superior
Service Medal, Legion of Merit, and Navy Achievement Medal.

TAMARA (TAMMI) MORYTKO

Age 52

Director Since 2022

Former President, Pumps Division, Flowserve Corporation

INDEPENDENT DIRECTOR

DIRECTOR QUALIFICATION HIGHLIGHTS

EnerSys Committees: Audit, Compensation

Other Public Boards: None

✓ Financial Expert
✓ Global Supply Chain
✓ Global Operations

Career Highlights: Ms. Morytko has served as a Director of EnerSys since December 7, 2022. From September 2020
through February 2023, she was the President of the Pumps Division at Flowserve Corporation, an industry leader in
pumps, valves, and other flow control equipment, whose shares are listed on The New York Stock Exchange. From
February 2018 until September 2020, Ms. Morytko was the Chief Operating Officer at Norsk Titanium, a leading metal 3D
printing company, whose shares were listed on Euronext Growth Oslo. Before joining Norsk, she served as an operations
and supply chain consultant. Prior to that she spent seven years at Baker Hughes, an energy technology company, first as
Vice President, Global Supply Chain, then as Vice President, North America Region, and finally as President, Asia Pacific
Region. From 1996 until 2010, Ms. Morytko served in a number of positions of increasing responsibility at Pratt & Whitney,
an aerospace manufacturer, and as a senior auditor at Arthur Andersen, LLP, from 1992 to 1996.

Board Experience: Since 2019, Ms. Morytko has served on the Board of Directors of The Crosby Group, a KKR portfolio
company and a leading manufacturer of rigging, lifting and material handling hardware. She previously served as a
member of the Board of Directors of Pioneer Energy Services from 2019 to 2020.

Skills and Qualifications: Ms. Morytko has established a reputation in the industry as an enterprise operating leader and
supply chain subject matter expert. She also possesses extensive experience and knowledge in audit, finance, and global
operations, collectively qualifying her for service on the Board of Directors, and as a financial expert of the Audit
Committee, and member of the Compensation Committee. Ms. Morytko received her Bachelor of Science degree in
Accounting from Purdue University and a Master of Business Administration degree from Purdue University Krannert
School of Management. She was recommended to the Nominating and Corporate Governance Committee by a third-party
search firm.

DAVID M. SHAFFER

Age 58

Director Since 2016

President & Chief Executive Officer, EnerSys

DIRECTOR

DIRECTOR QUALIFICATION HIGHLIGHTS

EnerSys Committees: Technology Advisory Committee

Other Public Boards: None

✓ Global Leadership Experience
✓ Manufacturing
✓ Sales

Career Highlights: Mr. Shaffer has been a Director of EnerSys and has served as our President and Chief Executive
Officer since April 2016. Prior thereto, he served as President and Chief Operating Officer since November 2014. From
January 2013 through October 2014, he served as our President-EMEA. From 2008 to 2013, Mr. Shaffer was our
President-Asia. Prior thereto he was responsible for our telecommunications sales in the Americas. Mr. Shaffer joined the
Company in 2005 and has worked in various roles of increasing responsibility in the industry since 1989.

Board Experience: Mr. Shaffer is a Director of several EnerSys subsidiaries and is presently not a member of any outside
boards.

Skills and Qualifications: Mr. Shaffer received his Bachelor of Science degree in Mechanical Engineering from the
University of Illinois and his Master of Business Administration degree from Marquette University. Mr. Shaffer’s
educational, manufacturing and sales background combined with a broad range of leadership experience in various
aspects of our business globally, are attributes that qualify him for service as a member of the Board of Directors.

PAUL J. TUFANO

Age 69

Director Since 2015

Former President & Chief Executive Officer, Benchmark Electronics, Inc.

INDEPENDENT DIRECTOR

DIRECTOR QUALIFICATION HIGHLIGHTS

EnerSys Committees: Audit, Compensation (Chair)

Other Public Boards: Teradyne, Inc.

✓ Financial Expert
✓ Senior Leadership Experience
✓ Manufacturing

Career Highlights: Mr. Tufano has been a Director of EnerSys since April 2015. From September 2016 until March 2019,
he was President and Chief Executive Officer of Benchmark Electronics, Inc., a global provider of electronics contract
manufacturing services and integrated engineering design and test services, whose shares are listed on The New York
Stock Exchange. From February 2016 through March 2019, Mr. Tufano also served as a member of its Board of Directors.
From December 2008 through September 2013, Mr. Tufano served as Chief Financial Officer of the Alcatel-Lucent Group,
a telecommunications company, whose shares were listed on The New York Stock Exchange and the Paris Stock
Exchange. In January 2013, in addition to his Chief Financial Officer responsibilities, he was named Chief Operating
Officer. Before joining Alcatel-Lucent, Mr. Tufano served as Executive Vice President and Chief Financial Officer of
Solectron Corporation, an electronics manufacturing company for original equipment manufacturers, from January 2006 to
October 2007 and as Interim Chief Executive Officer from February 2007 to October 2007. Prior to joining Solectron,
Mr. Tufano was President and Chief Executive Officer at Maxtor Corporation, a manufacturer of computer hard disks, from
February 2003 to November 2004. Previously, he served as Executive Vice President and Chief Operating Officer from
April 2001 and as Chief Financial Officer from July 1996 at Maxtor Corporation. From 1979 until he joined Maxtor
Corporation in 1996, Mr. Tufano held management positions in finance and operations at International Business Machines
Corporation (IBM), a technology and consulting company.

Board Experience: Mr. Tufano has been a Director of Teradyne, Inc., a supplier of automation equipment for test and
industrial application whose shares are listed on The New York Stock Exchange, since March 2005, and was appointed as
Chair of its Board of Directors in May 2021. He served on the Board of Directors of Benchmark Electronics, Inc., as
discussed above.

Skills and Qualifications: Mr. Tufano’s experience qualifying him for service as a member of the Board of Directors
includes expertise garnered from service as a former senior executive, including holding the positions, at times, of Chief
Executive Officer or Chief Financial Officer, of several public manufacturing companies involving complex technologies.
This experience qualifies him to serve as a member and a financial expert to the Audit Committee, and as Chairperson of
the Compensation Committee. Mr. Tufano holds a Bachelor of Science degree in Economics from St. John’s University
and a Master of Business Administration, Finance, Accounting and International Business degree from Columbia
University.

RONALD P. VARGO

Age 69

Director Since 2017

Former Executive Vice President and Chief Financial Officer of ICF International, Inc.

INDEPENDENT DIRECTOR

DIRECTOR QUALIFICATION HIGHLIGHTS

EnerSys Committees: Audit (Chair), Compensation

Other Public Boards: EPAM Systems, Inc.

✓ Financial Expert
✓ Technology & Engineering
✓ Leadership Experience

Career Highlights: Mr. Vargo has been a Director of EnerSys since August 2017. Mr. Vargo served as Executive Vice
President and Chief Financial Officer of ICF International, Inc., a global consulting and technology services company
whose shares are listed on The NASDAQ Stock Market, from April 2010 to May 2011. Prior to joining ICF, he served as
the Executive Vice President and Chief Financial Officer of Electronic Data Systems (“EDS”), a global technology services
company, and served as a member of the EDS Executive Committee. Mr. Vargo joined EDS as Vice President and
Treasurer in 2004 and was promoted to Chief Financial Officer in 2006. Before joining EDS, he was employed from 1991
to 2003 by TRW, Inc., a global manufacturing and service company strategically focused on providing products and
services with a high technology or engineering content to the automotive, space and defense markets. While at TRW,
Mr. Vargo served in the positions of Vice President of Investor Relations and Treasurer and Vice President of Strategic
Planning and Business Development. He began his career with General Electric in 1976 and also served in numerous
leadership positions at BP plc and the Standard Oil Company, which was acquired by BP.

Board Experience: Since 2012, Mr. Vargo has served as a Director of EPAM Systems, Inc., a global provider of product
development and software engineering solutions, whose shares are listed on The New York Stock Exchange. From 2009
through its acquisition in April 2022, he served as a Director of Ferro Corporation, a leading supplier of technology based
functional coatings and color solutions, whose shares were listed on The New York Stock Exchange.

Skills and Qualifications: Mr. Vargo’s financial acumen and broad leadership experiences in technology and engineering
in global markets qualify him for service on the Board of Directors, and as the Chair and a financial expert of the Audit
Committee, and member of the Compensation Committee. Mr. Vargo holds a Master of Business Administration degree in
Finance and General Management from Stanford University and a Bachelor of Arts degree in Economics from Dartmouth
College.

RUDOLPH (RUDY) WYNTER

Age 58

Director Since 2022

President, National Grid plc New York Business

INDEPENDENT DIRECTOR

DIRECTOR QUALIFICATION HIGHLIGHTS

EnerSys Committees: Nominating & Corporate Governance,

Technology Advisory Committee

Other Public Boards: None

✓ Grid and Regulated Energy
✓ Strategic Planning & Operations
✓ Environmental

Career Highlights: Mr. Wynter has been a Director of EnerSys since August 1, 2022. Since April 1, 2021, he has served
as the President of National Grid plc’s New York business, leading their regulated energy delivery portfolio that provides
electricity and natural gas service to customers across the State of New York. National Grid plc has a primary listing on the
London Stock Exchange where it is a constituent of the FTSE 100 Index, and a secondary listing in the form of its
American depositary receipts on the New York Stock Exchange. Prior thereto, in his more than 30-year tenure at National
Grid and its legacy companies, Mr. Wynter has served in many senior and operational roles, from Chief Operating Officer
of its Wholesale Networks & Capital Delivery business to Strategic Planning, Engineering and Operations.

Board Experience: Mr. Wynter serves on the board of GridWise Alliance, the Partnership for New York City, since May 5,
2021, and is a member of the following trade associations: American Society of Mechanical Engineers, the American Gas
Association, and the Edison Electric Institute.

Skills and Qualifications: Mr. Wynter’s wide-ranging experience includes a focus on grid resilience and clean energy
technologies, including renewable energy sources as part of the solution to reduce greenhouse gas emissions, as well as
significant experience in strategic planning, operations and engineering. All of these attributes qualify him for service as a
member of the Board of Directors, and as a member of the Nominating and Corporate Governance Committee and the
Technology Advisory Committee. Mr. Wynter earned his Bachelor of Science degree in Mechanical Engineering from Pratt
Institute and his Master of Business Administration degree from Fordham University. He was recommended to the
Nominating and Corporate Governance Committee by a third-party search firm.

CORPORATE GOVERNANCE

Independence of Directors

Our Board of Directors determined that all directors, with the exception of Mr. Shaffer, are independent from EnerSys and
our management under the listing standards of The New York Stock Exchange (“NYSE”). The Board considered the NYSE
standards, the fact that there were no transactions or arrangements between the directors and EnerSys, other than the
consideration for serving as a director, and all other relevant facts and circumstances in making these independence
determinations and concluded that there were no material relationships between any of our directors and EnerSys.

There are no familial relationships among our directors or executive officers.

Access to Corporate Governance Documents

Our corporate governance information and materials, including our Corporate Governance Guidelines, charters of the Audit
Committee, Compensation Committee, and Nominating and Corporate Governance Committee, and Code of Business
Conduct and Ethics, are available on the Investors page of our website at www.enersys.com or at investor.enersys.com,
and any stockholder may obtain printed copies of these documents by writing to Investor Relations at: EnerSys, 2366
Bernville Road, Reading, Pennsylvania 19605, by e-mail at: investorrelations@enersys.com or by calling Investor
Relations at (610) 236-4040. Information contained on the website is not incorporated by reference or otherwise
considered part of this Proxy Statement.

Committees of our Board of Directors

Our Board of Directors has an Audit Committee, a Compensation Committee, and a Nominating and Corporate
Governance Committee, each of which has the composition and responsibilities described below. The Board of Directors
has determined that each committee member is independent under the NYSE listing standards. Our Board of Directors,
from time to time, may establish other committees.

Audit Committee

Since January 23, 2023, directors Chung, Fludder, Morytko, Tufano, and Vargo (Chair) serve as members of our Audit
Committee. Since the end of our last fiscal year from April 1, 2022, through January 22, 2023, directors Chung, Fludder,
Tufano and Vargo (Chair) served as members of the Audit Committee.

For fiscal year 2023, the Board of Directors appointed each of directors Chung, Fludder, Morytko, Tufano, and Vargo as an
“audit committee financial expert,” as such term is defined in rules promulgated by the Securities and Exchange
Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Board of
Directors determined that each member of the Audit Committee is an independent director under the NYSE listing
standards and the SEC rules and regulations applicable to audit committees and financially literate in accordance with the
NYSE listing standards.

This Committee held a total of four (4) meetings during the fiscal year ended March 31, 2023.

The Audit Committee is responsible for:

(cid:3) appointing, compensating and overseeing our independent registered public accounting firm (“independent

auditors”);

(cid:3) overseeing management’s fulfillment of its responsibilities for financial reporting and internal control over financial

reporting;

(cid:3) overseeing the activities of our internal audit function;

(cid:3) reviewing and discussing policies and procedures with respect to risk assessment and overall enterprise risk

management; and

(cid:3) reviewing, discussing and overseeing policies relating to our hedging, swaps and other derivative transactions.

For additional information, see “Audit Committee Report” herein and the Audit Committee Charter, which is available on
the Investors page of our website at www.enersys.com or investor.enersys.com.

Compensation Committee

Since January 23, 2023, directors Chan, Gen. Magnus, Morytko, Tufano (Chair), and Vargo, have served as members of
the Compensation Committee. Since the end of our last fiscal year from April 1, 2022, through January 23, 2023, directors
Chan, Gen. Magnus, Tufano (Chair) and Vargo had served as members of the Compensation Committee.

This Committee held a total of six (6) meetings during the fiscal year ended March 31, 2023.

The Compensation Committee is responsible for:

(cid:3) reviewing and approving the compensation of our Chief Executive Officer (“CEO”) and the other named executive

officers;

(cid:3) reviewing and recommending to the Board the adoption of non-employee director compensation programs;
(cid:3) administering our equity plans and other certain incentive compensation plans; and
(cid:3) in partnership with the Nominating and Corporate Governance Committee, overseeing our diversity, equity and

inclusion (DEI) efforts.

More specifically, the Compensation Committee has sole authority to set the base salaries and approve equity-based and
incentive-based compensation for our named executive officers. It engages its own independent compensation consultant,
Frederic W. Cook & Co., Inc. (“FW Cook”), to review the compensation levels of executives at our peer group companies
and assess total compensation and make recommendations about changes in the compensation of our executives,
including incentive and equity plan structure and performance goals. The consultant works with management on behalf of
the Compensation Committee on matters under the Committee’s purview but provides no services to management or the
Company other than its work for the Committee. The Compensation Committee also considers recommendations from our
CEO with respect to the base salary of our other named executive officers. The Compensation Committee utilizes a similar
methodology, including advice from its consultant on compensation levels and structure, for recommending non-employee
director compensation and meeting fees, which are subject to Board approval.

Compensation Committee Interlocks and Insider Participation

No member of the Compensation Committee (i) was, during fiscal year 2023, or had previously been an officer or
employee of EnerSys or our subsidiaries nor (ii) had any direct or indirect material interest in a transaction of EnerSys or a
business relationship with EnerSys, in each case that would require disclosure under the applicable rules of the SEC. No
other interlocking relationship existed between any member of the Compensation Committee or an executive officer of
EnerSys, on the one hand, and any member of the Compensation Committee (or committee performing equivalent
functions, or the full board of directors) or an executive officer of any other entity, on the other hand, requiring disclosure
pursuant to the applicable rules of the SEC.

Nominating and Corporate Governance Committee

Since October 3, 2022, directors Chan, Fludder, Hoffen, Gen. Magnus (Chair), and Wynter serve as members of the
Nominating and Corporate Governance Committee. Since the end of our last fiscal year from April 1, 2022, through
October 2, 2022, directors Chan, Fludder, Hoffen and Gen. Magnus (Chair) served as members of the Nominating and
Corporate Governance Committee.

This Committee held a total of five (5) meetings during the fiscal year ended March 31, 2023.

The responsibilities of the Nominating and Corporate Governance Committee include the following:

(cid:3) identifying, reviewing the qualifications of, and recruiting qualified candidates for Board membership;
(cid:3) reviewing the continuation of each director being considered for re-election;
(cid:3) considering the contingent resignations of directors who do not receive a majority vote in connection with their

respective election and recommend to the Board of Directors the action to be taken;

(cid:3) making recommendations to the Board concerning the structure, composition and function of the Board and its

committees;

(cid:3) executive succession planning;

(cid:3) overseeing the Company’s environmental, social and governance (ESG), DEI, and sustainability strategies,

initiatives, policies and progress; and

(cid:3) reviewing and assessing the adequacy of the Company’s corporate governance documents.

Technology Advisory Committee

On October 29, 2020, the Board approved the formation of the EnerSys Technology Advisory Committee. The Technology
Advisory Committee acts as an advisory committee composed of both members of the Board and management,
concerning matters of technology, research and development in support of the overall business strategy of the Company.
Since October 3, 2022, directors Chan, Fludder, Shaffer and Wynter serve as members of the Technology Advisory
Committee, along with other members of management. Since our last fiscal year from April 1, 2022, through October 2,
2022, directors Chan, Fludder and Shaffer, along with other members of management, served as members of the
Technology Advisory Committee.

This Committee held a total of four (4) meetings during the fiscal year ended March 31, 2023.

Process for Selection of Director Nominee Candidates

The Nominating and Corporate Governance Committee is charged with reviewing the composition of the Board of
Directors and refreshing it as appropriate. With this in mind, the Nominating and Corporate Governance Committee
continuously reviews potential candidates and recommends nominees to the Board of directors for approval.

The Board of Directors takes a thoughtful approach to its composition to maintain alignment with our evolving corporate
strategy. We believe our board composition strikes a balanced approach to director tenure and allows the Board of
Directors to benefit from a mix of newer directors who bring fresh perspectives and seasoned directors who bring continuity
and a deep understanding of our complex business.

The Nominating and Corporate Governance Committee believes that the minimum qualifications for serving as a director of
EnerSys are that a candidate demonstrate, by significant accomplishments in his or her field, an ability to make a
meaningful contribution to the Board of Directors’ oversight of the business and affairs of EnerSys and have an impeccable
record and reputation for honest and ethical conduct in his or her professional and personal activities. In addition, the
Nominating and Corporate Governance Committee considers the following characteristics in reviewing director candidates:

(cid:3) integrity and character;
(cid:3) sound and independent judgment;
(cid:3) breadth of experience;
(cid:3) business acumen;
(cid:3) leadership skills;
(cid:3) scientific or technology expertise;
(cid:3) familiarity with issues affecting global businesses in diverse industries; and
(cid:3) diversity of backgrounds and experience.

In addition to these requirements, the Nominating and Corporate Governance Committee will also evaluate, in the context
of the Board’s needs, whether the nominee’s skills are complementary to the existing Board members’ skills, and assess
any material relationships with EnerSys or third parties that might adversely impact independence and objectivity, as well
as such other criteria as the Nominating and Corporate Governance Committee determines to be relevant at the time.
Except as described above, the Board and the Nominating and Corporate Governance Committee do not maintain a formal
diversity policy, however, diversity is one of many factors considered in the nomination of our directors.

The Nominating and Corporate Governance Committee, Committee Chairperson and/or our Chief Executive Officer
interview director nominee candidates that meet the criteria, and the Nominating and Corporate Governance Committee
selects candidates that best suit the Board’s needs. We may from time to time hire an independent search firm to help
identify and facilitate the screening and interview process of director candidates.

Stockholders may recommend qualified persons for consideration by the Nominating and Corporate Governance
Committee. Stockholders making a recommendation must submit the same information as that required to be included by
us in our Proxy Statement with respect to nominees of the Board of Directors. The stockholder recommendation

should be submitted in writing, addressed to EnerSys at 2366 Bernville Road, Reading, Pennsylvania 19605, Attention:
Joseph G. Lewis, Senior Vice President, General Counsel, Chief Compliance Officer and Secretary.

The Nominating and Corporate Governance Committee’s evaluation process does not vary based on whether or not a
candidate is recommended by a stockholder. The Nominating and Corporate Governance Committee will also review the
performance as a director of any person already serving on the Board of Directors of EnerSys in determining whether to
recommend that the Director be re-nominated.

Board Leadership Structure

For fiscal year 2023, the Board of Directors maintained a leadership structure that continues to separate the Chair and
Chief Executive Officer roles by appointing an Independent Non-Executive Chair of the Board. Given its governance
structure, the Board of Directors determined that the optimal structure for the Company at this time is to leave the role of
Lead Director vacant, in lieu of appointing both an Independent Non-Executive Chair of the Board and a Lead Director (as
described below).

The Board had created the position of Lead Director to strengthen Board oversight. The Lead Director must be a
non-management director and must be deemed independent by the Board of Directors. The Lead Director works with the
Independent Non-Executive Chair to approve Board agendas and schedules, advises on the quality, quantity and
timeliness of information provided by management to the Board, and acts as a liaison between the independent directors
and the Independent Non-Executive Chair of the Board. In the absence of the Independent Non-Executive Chair, the Lead
Director also chairs executive sessions of the independent directors not attended by management. The Board has
established procedures for determining which non-management director will serve as the Lead Director. The Lead Director
is designated by the Board of Directors.

The Board’s Role in Risk Oversight

The Board oversees various risks potentially affecting EnerSys both directly and indirectly through its independent
committees (Audit, Compensation, and Nominating and Corporate Governance). EnerSys has in place a risk management
program that, among other things, is designed to identify risks across EnerSys with input from each business unit and
function. Material risks are identified and prioritized by management and its Risk Committee that reports to the Audit
Committee, and each prioritized risk is referred to the appropriate committee of the Board or the full Board for oversight.
Members of the Board review on a quarterly basis information regarding our credit, liquidity, markets, legal, regulatory,
compliance and operations, including technology, cybersecurity, sustainability, and DEI, as well as the strategic and
financial considerations associated with each.

The Board exercises its oversight responsibility for risk both directly and through its three standing committees. Each
quarter throughout the year, the Board and each committee spend a portion of their time reviewing and discussing specific
risk topics. The full Board is kept informed of each committee’s risk oversight and related activities through regular
attendance at all committee meetings by all directors. Strategic, operational and competitive risks also are presented and
discussed at the Board’s quarterly meetings, and more often as needed. On at least an annual basis, the Board conducts a
review of our long-term strategic plans and members of senior management report on our top risks and the steps
management has taken or will take to mitigate these risks. At each quarterly meeting, or more often as necessary, our
senior management team, along with the CEO, provide written and/or oral reports to the Board on the critical issues we
face, and each officer reports on recent developments in their respective reporting area. These reports include a
discussion of business risks as well as a discussion regarding enterprise risk. In addition, at each quarterly meeting, or
more often as necessary, the Senior Vice President, General Counsel, Chief Compliance Officer and Secretary (“CLO”)
updates the Board on material legal, risk, regulatory and sustainability matters.

Audit Committee

The Audit Committee is responsible for reviewing the framework by which management discusses our risk profile and risk
exposures with the full Board and its committees. The Audit Committee meets regularly with our CFO, independent
registered public accounting firm, internal auditor, CLO, and other members of senior management to discuss our major
financial risk exposures, financial reporting, internal controls, credit and liquidity risk, compliance risk, and key operational
risks, including cybersecurity. The Audit Committee meets regularly in private sessions with the independent registered
public accounting firm, the internal auditor, the CLO, as well as a private session of committee members only, to facilitate a
full and candid discussion of risk and other issues. Senior members of management from across business units and
programmatic and functional disciplines within EnerSys make up a Risk Committee, which meets at least quarterly to

identify significant risks to the Company, coordinate information sharing and mitigation efforts for all types of risks,
sometimes working with outside advisors. The Risk Committee reports its results to the Audit Committee through the CLO
on at least a quarterly basis.

The Audit Committee oversees the Company’s global cybersecurity risk environment and the Company’s cybersecurity
strategy and priorities. The Company’s Senior Vice President and Chief Information Officer (the “CIO”), together with other
senior leadership, reports to the Audit Committee at least semi-annually on the Company’s global information technology
matters, including technology and cybersecurity structure and strategic efforts to protect, optimize and support the growth
of the Company, while reviewing the Company’s internal assessment of cybersecurity risk management capabilities and
responses.

The Company utilizes the National Institute of Standards & Technology Framework for Improving Critical Infrastructure
Cybersecurity (NIST Framework), a toolkit for organizations to manage cybersecurity risk in its assessment of
cybersecurity capabilities and in developing cybersecurity priorities. In addition to internal assessments, the Company’s
cybersecurity strategy and capabilities are evaluated and audited against the NIST Framework and industry best practices
by independent, third-party, leading specialists in cybersecurity. Our CIO and senior leadership review the results of the
independent assessment with the Committee, together with measures to be implemented to further strengthen the
Company’s information technology infrastructure as the Company and the cybersecurity environment evolve. We regularly
provide information technology and cybersecurity training to employees, with at least one training session per year, and
regularly distribute cybersecurity safety tips. We also conduct regular internal phishing education campaigns to heighten
employee awareness to cybersecurity threats. The Company utilizes best-in-industry cybersecurity tools and services for
endpoint detection and response, security operations center services, vulnerability management scanning, secure e-mail
gateway, identify management, single sign-on, multi-factor authentication, and privileged access management.

The CIO reviews the cybersecurity program initiatives and KPI’s monthly with the global security team and provides
quarterly updates to the executive team, which is then reported to the Board of Directors through the CLO or directly by the
CIO.

Compensation Committee

The Compensation Committee is responsible for overseeing human capital and compensation risks, including evaluating
and assessing risks arising from our compensation policies and practices and ensuring executive compensation is aligned
with performance. The Compensation Committee is also charged with monitoring our incentive and equity-based
compensation plans, including employee benefit plans, reviewing and retaining compensation advisers, and considering
the results of the non-binding advisory say-on-pay vote and determine what adjustments, if any, are necessary or
appropriate for the Company to make to its compensation policies and practices in light of the results of such vote. Also,
the Compensation Committee periodically reviews the most important risks to EnerSys to ensure that compensation
programs do not encourage excessive risk-taking.

The Compensation Committee meets at least quarterly with the CLO as well as in separate sessions with the Company’s
external compensation consultant to facilitate a full and candid discussion of executive performance and compensation.

Nominating & Corporate Governance Committee

The Nominating and Corporate Governance Committee oversees risks related to our overall corporate governance,
including Board and committee composition, Board size, structure and diversity, director independence, our corporate
governance profile and ratings and ESG and DEI-related strategies, initiatives and policies. The Committee is also actively
engaged in overseeing plans and risks associated with succession planning for the Board and management.

Charters of the Committees of the Board of Directors

The Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee each operate
pursuant to a written charter adopted by the Board of Directors. Each Committee reviews its charter at least annually.
Copies of the charters are available on the Investors page of our website at investor.enersys.com or in print upon request.
See “Corporate Governance–Access to Corporate Governance Documents.”

Director Attendance at Board, Committee and Annual Meetings

To ensure that demands on a director’s time will not detract from their ability to serve on our Board of Directors, our
Corporate Governance Guidelines provide that non-management directors may not serve on more than four (4) public

company boards, inclusive of our Board, and the Chief Executive Officer may not serve on more than two (2) public
boards, inclusive of our Board. All members of our Board and the Chief Executive Officer are compliant with these
guidelines.

Our Corporate Governance Guidelines also provide that directors are expected to attend meetings of the Board and
meetings of the committees on which they serve. During fiscal year 2023, the Board of Directors met a total of four
(4) times. Each director attended at least 75% of the total number of meetings of the Board and its committees on which
the director served during the fiscal year, based on the number of such meetings held during the period for which each
person served as a director or on a committee. It is our policy that directors are invited to the Annual Meeting but are not
required to attend. Nine (9) of the ten (10) members serving on the Board of Directors at the time of the 2022 annual
meeting of stockholders attended the meeting.

Executive Sessions of Non-Management Directors

The Board has established a policy requiring non-management directors to meet in executive session periodically during
the course of each year.

Communications with the Board of Directors

Stockholders and other interested parties, who desire to communicate directly with any member (or all members) of the
Board, any Board committee or any chair of any such committee, should submit such communication in writing addressed
to the “Independent Non-Executive Chair of the Board of Directors” or “Non-Management Directors,” at EnerSys, P.O. Box
14145, Reading, Pennsylvania 19612 or by email to the Independent Non-Executive Chairman of the Board of Directors or
Non-Management Directors by going to investor.enersys.com, under the link for Governance and Documents and
Charters. Communications intended for the full Board of Directors may be submitted in the same manner.

Stockholders, employees and other interested parties who desire to express a concern relating to accounting or auditing
matters should communicate directly with our Audit Committee in writing addressed to the “Audit Committee Chair” at
EnerSys, P.O. Box 14145, Reading, Pennsylvania 19612 or by e-mailing the Audit Committee by going to
investor.enersys.com, under the link for Governance and Documents and Charters.

Code of Business Conduct and Ethics

The Board has adopted a Code of Business Conduct and Ethics that is applicable to our Chief Executive Officer, Chief
Financial Officer and Controller, as well as our other officers, directors, employees and contractors of EnerSys. The Code
of Business Conduct and Ethics, is translated into nine languages, and is available on our website at www.enersys.com/
code or in print upon request. See “Corporate Governance–Access to Corporate Governance Documents.” Any
amendment to, or waiver from, the Code of Business Conduct and Ethics for such officers will be disclosed on the
Investors page of our website at www.enersys.com or investor.enersys.com.

ESG Oversight & Initiatives

EnerSys is committed to being a responsible corporate citizen by working to decrease the environmental impact of our
business activities throughout our operations, enhancing workplace safety and the health and well-being of our employees,
offering our employees opportunities to grow and develop their careers, and working to increase the diversity of our
workforce and supporting inclusive workplaces.

Our policies and practices aim to protect, conserve, and sustain the world’s natural resources, as well as to protect our
customers and the communities in which we live and operate. We believe that the power systems and energy
management sector plays a key role in finding innovative solutions to address some of the most pressing global
challenges, and we are continuously working to improve the positive impact our products and services have around the
world.

The Board of Directors and our CEO administer our ESG program by which EnerSys communicates and monitors our
overall ESG strategy. The Board of Directors has revised the charter of the Nominating and Corporate Governance
Committee to specifically include as one of its responsibilities assisting the Board in fulfilling its oversight responsibilities
relating to the Company’s policies and practices regarding ESG matters that are significant to the Company. Our other
Board committees also have oversight responsibility for ESG topics under their purview. Our CLO reports to the Audit

Committee of the Board of Directors on both legal, ethics and compliance matters, and environmental, health and safety
matters, at each Audit Committee meeting. The Compensation Committee and the Nominating and Corporate Governance
Committee have oversight of management succession, talent development and diversity and inclusion efforts. The Audit
Committee and the full Board are also directly engaged with ESG risk areas through our comprehensive enterprise risk
management program.

EnerSys has been integrating ESG considerations into our everyday operations and future business strategies, including
with respect to sustainability, climate change, conflict minerals, environmental responsibility and engagement, resource
use, employee and supplier diversity, anti-slavery and human trafficking, battery recycling programs and environment and
sustainability issues with respect to the production and life cycle of our products. Our ESG Steering Committee consists of
senior management and subject matter experts and meets quarterly, and we also maintain a sustainability team, which
leads our significant efforts with respect to climate change management, product sustainability and sustainability topics in
operations and supply chain management. Sustainability, including climate change impact, is integrated into our decision-
making process. The team also provides input and relevant expertise to our dedicated teams focused on workforce health
and safety, diversity, equity, inclusion, and community engagement. We also offer a complete battery recycling program to
assist our customers in preserving our environment and complying with recycling and waste disposal regulations. These
various policies are available on our website at www.enersys.com.

On April 21, 2022, we published our inaugural, comprehensive 2021 Sustainability Report, and released an update to
Sustainability on May 16, 2023. The 2022 Sustainability Update details our progress and performance on key ESG issues
and formalizes our commitment to building a sustainable future. Both publications place a spotlight on the Company’s
commitment to our workforce, diversity, equity and inclusion particularly through the CEO Action for Diversity and
Inclusion, as well as care and support to local and broader communities through various charitable giving partners and
initiatives.

Fiscal year 2022 was pivotal for EnerSys as a sustainability industrial technology company, and our commitment and
progress positively advanced through fiscal year 2023. On July 27, 2022, we submitted our disclosures on climate to the
CDP, and on December 14, 2022, we published our first Task Force on Climate Related Financial Disclosures Report. On
May 16, 2023, we published our 2022 Sustainability Update that outlines achievements and progress made with our
programs and initiatives since our 2021 Sustainability Report.

EnerSys has taken several notable actions, including joining the United Nations Global Compact – solidifying its
commitment to the organization’s ten sustainability principles – and the U.S. Department of Energy’s Better Plants
Program, through which the Company committed to reducing its energy intensity by 25% over the next 10 years (from a
calendar year 2020 baseline). EnerSys also signed onto the United Nations CEO Water Mandate initiative toward reducing
global water stress.

The EnerSys Sustainability publications highlight how EnerSys batteries, chargers and monitoring services help its
customers achieve their carbon reduction and renewable energy goals. We demonstrate how EnerSys products and
services offer the reliability and power capacity needed to propel the global economy through the transition toward clean
energy, electric vehicles and Net Zero carbon emissions.

EnerSys continues to seek out and drive internal initiatives that improve the sustainability of its operations, build a diverse
and inclusive culture, and support the health and well-being of its employees and communities. EnerSys recognizes
disclosure as a crucial step in ensuring accountability and maintaining a positive corporate reputation.

We continue to work to understand the potential impacts that climate change has on our business and to integrate
sustainability principles throughout all business units and leadership roles.

We also require annual training of our workforce around our policies, including our Code of Business Conduct and Ethics,
harassment prevention, unconscious bias, avoiding insider trading and cybersecurity.

Human Capital Management

EnerSys is committed to a comprehensive, cohesive, and positive employee experience. We consider talent acquisition,
development, engagement, and retention critical drivers of our business success. Our Board of Directors, through the
Compensation Committee and the Nominating and Corporate Governance Committee, retains oversight of our human
capital management process, including succession, demographics, talent development, employee retention, material
aspects of employee compensation, as well as diversity and inclusion, recruitment, and compensation efforts. The

Nominating and Corporate Governance Committee reports on human capital matters at each regularly scheduled Board of
Directors meeting. The most significant human capital measures, objectives and initiatives include the following:

(cid:3) Health, Safety, and Wellness: Our fundamental responsibility as an employer is to provide a safe and healthy

workplace for all our employees. This undertaking is explained further in our Safety and Health Policy. Our health
and safety programs are designed around global standards with appropriate variations addressing the multiple
jurisdictions and regulations, specific hazards and unique working environments of our manufacturing and
production facilities, service centers and headquarter operations. Above all else, we are dedicated to the safety and
well-being of our employees.

(cid:3) Diversity, Equity, Inclusion and Belonging: We strive to create a work environment that emphasizes respect,
fairness and dignity and that does not tolerate discrimination or harassment. Individuals are evaluated based on
merit, without concern for race, color, religion, national origin, citizenship, marital status, gender (including
pregnancy), gender identity, gender expression, sexual orientation, age, disability, veteran status, or other
characteristics protected by law. We are committed to providing equal opportunities to every member of our
workforce. In addition to following all applicable local laws and regulations, our executive steering committee
remains fully engaged. We continue to be committed to, among other things, the CEO Action for Diversity &
Inclusion, and funding additional staffing to further support efforts to advance diversity, equity and inclusion in the
workplace.

(cid:3) Philanthropy and Volunteerism: Over the past fiscal year we created an executive management level corporate
giving committee dedicated to encouraging and supporting charitable efforts by EnerSys globally. EnerSys is
strongly committed to being an outstanding corporate citizen on a global basis in all the countries and communities
where we do business. This commitment is reflected in a strong ethic for charitable contributions, endorsement of
community activities, encouraging employees to give freely of their own time to serve on boards or committees in
many organizations and supporting educational programs in schools and colleges. We created several
sub-committees to assist the Company in its strategic philanthropic endeavors that support all communities in which
we work. Additionally, we regularly sponsor volunteer events and fundraising campaigns, to encourage our
employees to give back to their communities and wherever help is needed.

(cid:3) Training and Career Management: Employees receive regular development feedback through a quarterly 1:1

review with their manager, which encourages open dialogues to identify and cultivate skills and opportunities. We
encourage our leaders to facilitate effective conversations and measure the effectiveness of these conversations by
regularly surveying our employees. In addition to training and development opportunities, all new employees are
required to participate in seminars to introduce them to the EnerSys business, our strategy, our culture and
philosophies. We encourage all our employees to engage in ongoing training, professional development and
educational advancement programs. Through our established EnerSys Academy, we provide employees worldwide
with resources to expand their knowledge on a broad scope of relevant topics to promote their growth and
development.

(cid:3) Compensation and Benefits: To attract, retain and recognize talent, we aim to ensure merit-based, compensation

practices and strive to provide competitive compensation and benefit packages to our workforce. We provide
employee wages that are consistent with employee positions, skill levels, experience, knowledge and geographic
location. We align our executives’ and eligible employees’ annual bonus opportunity and long-term equity
compensation with our stockholders’ interests by linking realizable pay with company financial performance. In
addition, we perform annual pay equity studies to evaluate our global pay practices across the organization.

NON-EMPLOYEE DIRECTOR COMPENSATION

We believe that the amounts and form of compensation and the methods used to determine compensation of our
non-employee directors are important in (i) attracting and retaining directors who are independent, interested, diligent and
actively involved in overseeing EnerSys’ affairs and (ii) more substantially aligning the interests of our non-employee
directors with the interests of our stockholders. We did not separately compensate Mr. Shaffer for his service on the Board
of Directors for fiscal year 2023.

For fiscal year 2023, our Compensation Committee retained the services of FW Cook, as an independent compensation
consultant to the Compensation Committee, to provide competitive data and make recommendations on the compensation
of our named executive officers as we describe beginning on page 40, as well as to assist the Compensation Committee in
evaluating the compensation of our non-employee directors. The Compensation Committee considers this information,
including the applicable peer group data, and ultimately recommends any changes to the non-employee director
compensation program to our Board for its approval. In assessing non-employee director compensation, we utilize the
same peer group that is used for executive compensation and is described in the Compensation Discussion and Analysis
section of this Proxy Statement beginning on page 40. The Compensation Committee reviews and the Board of Directors
approves the non-employee director compensation program annually, which is then in effect from annual meeting to
annual meeting.

Cash Compensation

The cash elements of the non-employee director compensation program recommended by the Compensation Committee
and approved by the Board in fiscal year 2023, which became effective immediately following the 2022 annual meeting of
stockholders, were unchanged from the prior year, and as follows:

(cid:3) Annual retainer—$85,000 per year
(cid:3) Committee meetings—$1,500 each
(cid:3) Independent Non-Executive Chair—additional $150,000 per year (paid 50% in deferred stock units and 50% in cash)
(cid:3) Audit Committee Chair—additional $15,000 per year
(cid:3) Compensation Committee Chair—additional $15,000 per year
(cid:3) Nominating and Corporate Governance Committee Chair—additional $15,000 per year

Equity Compensation

For fiscal year 2023, each non-employee director received an award of deferred stock units, with a grant date fair market
value of $142,500. Deferred stock units are immediately vested on the date of grant and are payable in shares of our
common stock six months after termination of service as a director unless payout is otherwise deferred by a director at the
time of grant.

We make all equity awards to non-employee directors under our stockholder-approved equity incentive plan, which we
describe on page 46, and in accordance with our policy on granting equity awards, which we described on page 48. As
required under their respective award agreements, we credit directors with any dividend equivalents attributable to such
equity awards.

Director Deferred Compensation Plan

Under the EnerSys Voluntary Deferred Compensation Plan for Non-Employee Directors, which we refer to as the “Director
Plan,” each non-employee director may defer receipt of all or a portion of any cash fees that are payable to the director for
service on the Board.

Participants may elect to allocate the deferred fees (i) into an investment account, under which investment options are the
same as those available to our employees under our 401(k)-retirement plan, or (ii) into a stock unit account, under which
the director will be awarded stock units pursuant to our stockholder-approved equity compensation plan. If the director
elects to allocate the deferred fees into the stock unit account, we will make an additional matching contribution

in the amount of 20% of the deferred amount. Dividend equivalent units, if any, will be credited to each stock unit account.
Each participant is 100% vested with respect to the amounts deferred to the stock unit deferral account. The matching
contribution will be in the form of restricted stock units and will vest quarterly over one year from the date the units are
credited to the account, except that participants will automatically become 100% vested in the matching contribution upon
our change in control. All stock units are payable in shares of our common stock.

Under the Director Plan, our non-employee directors may also defer receipt of all or a portion of shares payable due to
vesting of restricted stock units granted pursuant to the matching contribution discussed above. At a director’s election, the
shares otherwise payable, together with any dividends thereon, are credited to a hypothetical bookkeeping account in the
director’s name and will be paid to the director in a lump sum at the time specified in the election or, if earlier, upon our
change in control or the director’s death.

The Director Plan is a nonqualified deferred compensation plan. As such, the rights of all participants to any deferred
amounts represent our unsecured promise to pay and the deferred amounts remain subject to the claims of our
creditors.

Stock Ownership Guidelines

We have implemented stock ownership guidelines under which we expect each non-employee director to beneficially own
shares of our common stock with a value equal to five times the annual Board cash retainer, not including meeting or
committee chair fees, paid to such director during the previous fiscal year. The Compensation Committee evaluates stock
ownership on an annual basis. We expect each director to attain the investment level no later than five years from the date
the director first becomes a non-employee director. Each individual serving as a non-employee director during fiscal year
2023 has achieved or is on target to achieve the investment level established by the stock ownership guidelines.

Hedging and Pledging Prohibition

As with our employees, we do not permit our non-employee directors to hedge their economic exposures to our common
stock that they own by engaging in transactions involving puts, calls, or other derivative securities, zero-cost collars,
forward sales contracts, or buying on margin or pledging shares as collateral for a loan.

NON-EMPLOYEE DIRECTOR COMPENSATION
FOR FISCAL YEAR 2023

The table set forth below summarizes the compensation that we paid to our non-employee directors for the fiscal year
ended March 31, 2023. None of our non-employee directors received option awards, non-equity incentive plan
compensation, pension, nonqualified deferred compensation, or any other compensation for the fiscal year ended
March 31, 2023.

Name

Caroline Chan

Hwan-yoon F. Chung

Steven M. Fludder

Howard I. Hoffen

Arthur T. Katsaros

Gen. Robert Magnus, (USMC) Retired

Tamara Morytko

Paul J. Tufano

Ronald P. Vargo

Rudolph Wynter

Stock Awards(1)(2)

Total

Fees Earned
in Cash

$ 106,000

91,000

$ 142,508

$ 103,000(3)

$ 163,693

91,000(3)

$ 161,259

$ 160,000(3)

$ 250,492

$ 115,000

$ 142,508

30,322(3)

4,683

$ 115,000(3)

$ 157,887

$ 115,000(3)

$ 154,484

63,212(3)

$ 155,434

248,508

233,508

266,693

252,259

410,492

257,508

35,005

272,887

269,484

218,646

(1) Directors Fludder, Hoffen, Katsaros, Morytko, Tufano, Vargo, and Wynter each hold unvested stock units, including accumulated dividend equivalents with

respect to such units, under the Director Plan.

Name

Unvested Stock Units Under the
Director Plan

Steven M. Fludder

Howard I. Hoffen

Arthur T. Katsaros

Tamara Morytko

Paul J. Tufano

Ronald P. Vargo

Rudolph Wynter

175

156

275

126

128

(2) We calculated these amounts using the provisions of ASC Topic 718. Amounts represent the aggregate grant date fair value of the deferred stock units that we
awarded to each non-employee director in fiscal year 2023 as described above. Assumptions used in the calculation of these amounts are included in the
footnotes to our audited financial statements for the fiscal year ended March 31, 2023, included in our Annual Report on Form 10-K, filed on May 24, 2023.

(3) Directors Fludder, Hoffen, Katsaros, Morytko, Tufano, Vargo and Wynter each deferred all or a portion of these amounts into a stock unit deferral account,

pursuant to the terms of the Director Plan. They received matching contributions, subject to dividend equivalents, with respect to such stock units. Under the
Director Plan, the restricted stock units comprising the matching contribution vest quarterly over one year from the date of the deferral, and any unvested
amounts are cancelled upon termination of service as a director. All stock units are payable in shares of our common stock.

Name

Steven M. Fludder

Howard I. Hoffen

Arthur T. Katsaros

Tamara Morytko

Paul J. Tufano

Ronald P. Vargo

Rudolph Wynter

Underlying Stock Units
Added to Director Plan

Matching Contribution
Added to Director Plan

1,518

1,340

2,357

274

1,107

886

844

303

268

472

221

178

168

Proposal No. 2

Approve, Ratify and Adopt the EnerSys 2023 Equity Incentive Plan

The Board of Directors has adopted the 2023 Equity Incentive Plan, which we refer to as the 2023 EIP, and recommends it for
stockholder approval. The Board believes it to be in the best interest of the Company to adopt the 2023 EIP to align our
employees’ and non-employee directors’ interests in our success with the long-term interests of our stockholders. We are
seeking your approval so that we may use the 2023 EIP to grant several types of equity and compensation awards including
incentive stock options (options that enjoy favorable tax treatment under Sections 421 and 422 of the Internal Revenue Code
of 1986, as amended (the “Code”)), non-qualified stock options, restricted stock, restricted stock units, performance shares,
stock appreciation rights (“SARs”), bonus shares, other stock-based awards, as well as performance compensation awards.
Subject to stockholder approval of the 2023 EIP, and upon its effective date, no additional awards will be made from the
EnerSys Amended and Restated 2017 Equity Incentive Plan (the “2017 Plan”). The 2017 Plan is our only plan under which
equity awards can currently be granted, as all other prior equity incentive plans have expired by their terms. We refer to the
2017 Plan and the EnerSys Second Amended and Restated 2010 Equity Incentive Plan collectively herein as our “Prior Plans.”

As of the effective date of the 2023 EIP, a total of 3,614,500 shares will be authorized for awards granted under the 2023
EIP, less one share for every one share that was subject to an option or SAR granted under the 2017 Plan after June 8,
2023 and prior to the effective date and 1.98 shares for every one share that was subject to an award other than an option
or SAR granted under the 2017 Plan after June 8, 2023 and prior to the effective date. The total of 3,614,500 shares that
would be available for grant under the 2023 EIP (our proposed new total share authorization) includes the
2,124,500 shares that were available for grant under the 2017 Plan as of June 8, 2023, plus our proposal for
1,490,000 new shares. EnerSys believes the 2023 EIP, including the maximum number of shares available for awards
under it, is necessary to ensure that we have adequate capacity to continue to attract and retain talented employees and
non-employee directors. We believe that this number represents a reasonable amount of potential equity dilution and
allows the Company to continue to award equity incentives, which are an important component of our overall
compensation program.

As of June 8, 2023, approximately 2,250 employees, no consultants, and 10 non-employee directors would have been
eligible to participate in the 2023 EIP had it been effective.

Share Usage and Key Data

Number of shares that will be authorized for future grant after stockholder approval of the 2023 EIP(1)

Number of shares relating to outstanding stock options at 6/8/23

Number of shares outstanding at 6/8/23 relating to full-value awards (restricted stock units)

Weighted average remaining term of outstanding options at 6/8/23

Weighted average exercise price of outstanding options at 6/8/23

3,614,500

1,056,595

1,047,635

7.29 years

79.86

(1) Grants of stock-based awards other than options or SARs will count against the authorization as 1.98 shares. The authorization will also be reduced by the

number of shares granted between June 8, 2023, under the 2017 Plan, and the date of stockholder approval at the fungible ratio.

A company’s burn rate is equal to the total number of equity awards the company granted in a fiscal year divided by the
weighted average common shares outstanding for that year. Our three-year average burn rate, at the time the Board of
Directors approved the 2023 EIP, was approximately 1.45%, as further outlined in the table below. We manage our long-term
stockholder dilution by limiting the number of equity incentive awards granted annually. We carefully monitor our annual burn
rate, dilution and equity expense, to ensure that we maximize stockholders’ value by granting only the appropriate number of
equity incentive awards necessary to attract, reward, and retain employees, directors and consultants.

Year

2023

2022

2021

3-Year Average

Stock
Options
Granted

310,140

246,222

295,068

Restricted
Stock
Units Granted

386,876

254,436

324,262

Performance
Share
Units Granted at
Target (1)

Total Granted

697,016

500,658

619,367

Weighted Average
Common Shares
Outstanding

40,809,235

42,106,337

42,548,449

Burn
Rate

1.71%

1.19%

1.46%

1.45%

(1) The number of performance share units earned in 2021, 2022, and 2023 were 65,096 shares, 46,965 shares, and 50,366 shares, respectively.

Key Features of the Plan

The 2023 EIP has a number of special terms and limitations that are supportive of sound corporate governance practices,
including:

(cid:3) Stock Options and Stock Appreciation Rights (SARs) Granted at No Less Than Fair Market Value. The

exercise price for stock options and SARs granted under the 2023 EIP must equal or exceed the underlying stock’s
fair market value as of the grant date, subject to a limited exception for awards that are assumed or substituted in
corporate transactions.

(cid:3) Prohibition on Repricing. The 2023 EIP expressly states that stock options and SARs may not be “repriced”

without stockholder approval.

(cid:3) Clawback. All awards made under the 2023 EIP are subject to the Company’s clawback policy, which applies to

cash as well as all time- and performance-based equity awards.

(cid:3) Fungible Ratio. The 2023 EIP utilizes a “fungible ratio” where any stock awards other than stock options and SARs
reduce the number of shares available for issuance by 1.98 times the number of shares subject to such award.
(cid:3) Minimum Vesting Provision. Vesting of equity-based awards under the 2023 EIP will be contingent upon the
completion of a service period of at least one year with respect to the award (subject to limited exceptions as
described below and in the 2023 EIP, including an exception for up to five percent of the available share reserve
under the plan).

(cid:3) Prohibition on Liberal Recycling for Appreciation Awards. Shares tendered by a participant or withheld by the

Company in payment of the purchase price of a stock option or to satisfy any tax withholding obligation with respect
to any option or SAR do not become available for issuance as future awards under the 2023 EIP.

(cid:3) Prohibition on Paying Dividends or Dividend Equivalents on Unvested Awards. Dividends or dividend
equivalents credited or payable in connection with an award under the 2023 EIP that is not yet vested will be
subject to the same restrictions and risk of forfeiture as the underlying award and will not be paid until the
underlying award vests.

(cid:3) Limit on Non-Employee Director Compensation. The aggregate grant date fair value of shares subject to awards
granted under the 2023 EIP, together with any cash compensation earned and paid or payable, during any calendar
year to any one non-employee director will not exceed $600,000.

(cid:3) No Automatic Single Trigger Equity Acceleration. Upon our change in control of the Company, awards may be
assumed or substituted for by the successor, and generally would continue with a “double trigger” which requires a
qualifying termination of employment in order to accelerate.

(cid:3) No Change in Control/280G Tax Gross-Ups. EnerSys does not provide its employees with tax gross-ups on

change in control benefits.

(cid:3) Mandatory Holding Period After Vesting on Performance Share Units. Shares earned under the performance

share units are subject to an additional one-year holding period after vesting.

2023 EIP Description

The following is a summary of the material terms of our 2023 EIP. This description is not complete. For more information,
we refer you to the full text of the 2023 EIP, which is attached as Appendix A. The 2023 EIP will be effective upon
stockholder approval at this meeting.

Available Shares. The 2023 EIP authorizes the grant of incentive stock options, “non-qualified” (for purposes of the Code)
stock options, SARs (including tandem SARs), restricted stock, restricted stock units, performance shares, other stock-
based awards as well as performance compensation awards to our employees, non-employee directors and those of our
subsidiaries.

As of the effective date of the 2023 EIP, and subject to certain equitable and other adjustments as described below, the
maximum aggregate number of shares of common stock that may be issued in connection with awards granted under the
plan is 3,614,500 shares, less one share for every one share that was subject to an option or SAR granted after June 8,
2023 under the 2017 Plan and prior to the effective date , and 1.98 shares for every one share that was subject to an
award other than an option or SAR granted after June 8, 2023 under the 2017 Plan and prior to the effective date. Any

shares that are subject to options or SARs will be counted against this limit as one share for every one share granted, and
any shares that are subject to awards other than options or SARs will be counted against this limit as 1.98 shares for every
one share granted. No more than the maximum aggregate number of shares that may be used under the 2023 EIP, as
stated above, may be granted as incentive stock options. Upon the effective date, no further awards may be made from the
2017 Plan (and all other Prior Plans have already been frozen).

The number of shares issued or reserved pursuant to the 2023 EIP, or pursuant to outstanding awards, is subject to
adjustment as a result of mergers, consolidations, reorganizations, stock splits, stock dividends, and other dilutive changes
in our common stock.

Shares subject to any awards (or awards granted under any Prior Plan) that expire without being exercised or that are
forfeited or settled in cash will again be available for future grants of awards under the 2023 EIP. Shares subject to awards
(under the 2023 EIP or any Prior Plan) that have been tendered by a participant or retained by us in payment or
satisfaction of the exercise price and any applicable tax withholding obligation of an option or SAR will not be added back
to the share limit described above and will not be available for future grant. In addition, shares subject to a SAR that are
not issued in connection with its stock settlement on its exercise, and shares reacquired by us on the open market or
otherwise using cash proceeds from the exercise of stock options, will in each case also not be added back to the share
limit described above and will not be available for future grant. Shares subject to awards that have been retained by the
Company or tendered by a participant in payment or satisfaction of tax withholding obligations of an award other than an
option or SAR (or an award other than an option or SAR granted under a Prior Plan) will be added back to the overall
share limit and will be available for future awards under the Plan. Any shares that again become available for awards under
the 2023 EIP shall be added as (i) one share for every one share subject to stock options or SARs granted under the 2023
EIP or stock options or SARs granted under any Prior Plan, and (ii) as 1.98 shares for every one share subject to awards
other than stock options or SARs granted under the 2023 EIP or awards other than stock options or SARs granted under
any Prior Plan.

Shares of common stock awards made under the 2023 EIP in substitution or exchange for awards granted by a company
acquired by us or an affiliate, or with which we or an affiliate combine (“Substitute Awards”), do not reduce the maximum
number of shares that are available for awards under the 2023 EIP. In addition, if a company acquired by us or an affiliate,
or with which we or an affiliate combine, has shares remaining available under a pre-existing plan approved by its
stockholders, the available shares (adjusted to reflect the exchange or valuation ratio in the acquisition or combination)
may be used for awards under the 2023 EIP and will not reduce the maximum number of shares of common stock that are
available for awards under the 2023 EIP; provided, however that awards using such available shares will not be made after
the date awards or grants could have been made under the pre-existing plan, absent the acquisition or combination, and
will only be made to individuals who were not our employees or directors prior to the acquisition or combination.

The closing price of our common stock on the New York Stock Exchange was $104.37 on June 8, 2023.

Individual Director Award Limitations. Notwithstanding any other provision of the 2023 EIP to the contrary, the
aggregate grant date fair value of shares (computed as of the date of grant in accordance with applicable financial
accounting rules) subject to awards granted under the 2023 EIP, together with any cash compensation earned and paid or
payable, for director-related services rendered during any calendar year to any one non-employee director will not exceed
$600,000. For the avoidance of doubt, any compensation that is deferred will be counted towards the foregoing limit for the
year in which the compensation is earned (and not counted in the year it is paid/settled), and no interest or other earnings
on such compensation will count towards the limit.

Administration of the 2023 EIP. Our Compensation Committee administers the 2023 EIP. The Compensation Committee
has the sole discretion to determine the employees and directors to whom awards may be granted under the 2023 EIP, the
manner in which such awards will vest, and other conditions applicable to such awards. Awards may be granted by the
Compensation Committee to employees and non-employee directors in such numbers and at such times during the term of
the 2023 EIP as the Compensation Committee will determine, and in accordance with the Policy of Granting Equity Awards
described on page 48. The Compensation Committee is authorized to interpret the 2023 EIP, to establish, amend and
rescind any rules and regulations relating to the 2023 EIP and to make any other determinations that it deems necessary
or desirable for the administration of the 2023 EIP (including determining the terms and conditions of all awards, any
vesting schedules, and any waivers or acceleration thereof). The Compensation Committee may correct any defect, supply
any omission or reconcile any inconsistency in the 2023 EIP in a manner and to the extent the Compensation Committee
deems necessary and desirable. In addition, benefits under the 2023 EIP will depend on a number of factors, including the

fair market value of our common stock on future dates and the exercise decisions made by the participants.
Notwithstanding the foregoing, any action or determination by the Compensation Committee specifically affecting or
relating to an award to a non-employee director will require the prior approval of the Board of Directors.

To the extent not inconsistent with applicable law or the rules and regulations of the principal U.S. national securities
exchange on which the shares are traded, the Compensation Committee may (i) delegate to a committee of one or more
directors of the Company any of the authority of the Committee under the 2023 EIP, including the right to grant, cancel or
suspend awards and (ii) authorize one or more executive officers to do one or more of the following with respect to
employees who are not directors or executive officers of the Company (A) designate employees to be recipients of awards,
(B) determine the number of shares subject to such awards to be received by such employees and (C) cancel or suspend
awards to such employees, in each case subject to certain limitations as set forth in the 2023 EIP.

Options. The exercise price of options is determined in accordance with our Policy on Granting Equity Awards more fully
described on page 48 of this proxy statement, and other terms for each option and whether the options are non-qualified
stock options or incentive stock options. The option price for shares purchased under an option will not be less than the fair
market value of the common stock as of the date of grant, except in the case of substitute awards issued by the Company
in connection with an acquisition or other corporate transaction. An option may not have a term in excess of ten years.

The Compensation Committee may grant incentive stock options only to employees and are subject to certain other
restrictions as described in the 2023 EIP. To the extent an option intended to be an incentive stock option does not qualify,
it will be treated as a non-qualified option. An option holder may exercise an option by initiating a transaction through the
selected brokerage firm and payment of the exercise price in a form acceptable to the Compensation Committee, which
may include: by cash, check or wire transfer; by the surrender of a number of shares of common stock already owned by
the option holder with a fair market value equal to the exercise price; to the extent permitted by law, through the delivery of
irrevocable instructions to a broker to sell shares obtained upon the exercise of the option and to deliver to us an amount
out of the proceeds of the sale equal to the aggregate exercise price for the shares being purchased or other cashless
exercise procedures as defined in the 2023 EIP; or another method approved by the Compensation Committee.

Stock Appreciation Rights (SARs). The Compensation Committee may grant SARs independent of or in connection with
the grant of an option. The exercise price per share of an SAR will be in accordance with our Policy on Granting Equity
Awards and will not be less than the fair market value of the common stock as of the date of grant, except in the case of
substitute awards. SARs may not have a term in excess of ten years. The Compensation Committee will determine the
other terms applicable to SARs. Generally, each SAR will entitle a participant upon exercise to an amount equal to:

(cid:3) the excess of the fair market value on the exercise date of one share of common stock over the exercise price,

times

(cid:3) the number of shares of common stock covered by the SAR.

Payment will be made in common stock or in cash, or partly in common stock and partly in cash, all as will be determined
by the Compensation Committee.

Restricted Stock and Restricted Stock Units. The Compensation Committee may award restricted common stock and
restricted stock units. Restricted stock awards consist of shares of stock that are transferred to the participant subject to
restrictions that may result in forfeiture if specified conditions and/or performance criteria are not satisfied. A stock unit is
an award that is valued by reference to a share (or multiple or partial shares), which value may be paid to the participant in
shares or cash as determined by the Compensation Committee in its sole discretion upon the satisfaction of vesting
restrictions, which restrictions may lapse separately or in combination at such time or times, in installments or otherwise,
as the Compensation Committee may deem appropriate. The Compensation Committee will determine the restrictions and
conditions applicable to each award of restricted stock or restricted stock units. As further described in the Compensation
Discussion and Analysis section of this proxy statement, shares earned under the performance share units granted to our
named executive officers are subject to an additional one-year holding period after vesting.

Other Stock-Based Awards. The Compensation Committee may grant awards of rights to purchase stock, bonus shares,
phantom stock units, performance shares, and other awards that are valued in whole or in part by reference to or are
otherwise based on the fair market value of, shares of our common stock. These awards will be subject to terms and
conditions established by the Compensation Committee.

Performance Compensation. The Compensation Committee may grant awards in the form of a cash bonus and
designate such an award as subject to the satisfaction of performance criteria (as described below).

Awards; Performance Criteria. Awards made pursuant to the 2023 EIP may be made subject to the attainment of
performance goals relating to one or more business criteria. For purposes of the 2023 EIP, such business criteria means
any one or more of the following performance criteria, either individually, alternatively, or in any combination: (a) cash flow;
(b) earnings (including, without limitation, gross margin, earnings before interest and taxes, earnings before taxes,
earnings before interest, taxes, depreciation and amortization, and net earnings); (c) earnings per share; (d) growth in
earnings or earnings per share; (e) stock price; (f) return on equity or average stockholders’ equity; (g) total stockholder
return; (h) return on capital; (i) return on assets or net assets; (j) return on investment; (k) sales, growth in sales or return
on sales; (l) income or net income; (m) operating income or net operating income; (n) operating profit or net operating
profit; (o) operating margin; (p) return on operating revenue; (q) economic profit, (r) market share; (s) overhead or other
expense reduction; (t) growth in stockholder value relative to various indices, including, without limitation, the S&P 500
Index or the Russell 2000 Index; (u) strategic plan development and implementation; (v) net debt; (w) working capital
(including components thereof); and (x) any other measure as determined by the Compensation Committee (collectively,
the “Qualifying Performance Criteria”). Such performance goals (and any exclusions) will be set by the Compensation
Committee prior to the earlier of 90 days after the commencement of the applicable performance period and the expiration
of 25% of the performance period. In determining performance outcomes related to such measures or criteria, the
Compensation Committee may provide for the exclusion of the impact of an event or occurrence which the Compensation
Committee determines should appropriately be excluded, including: (z) asset write-downs or write-ups, (aa) litigation,
claims, judgments or settlements, (bb) the effect of changes in tax law, accounting principles or other such laws or
provisions affecting reported results, (cc) accruals for reorganization and restructuring programs, (dd) any extraordinary,
unusual, infrequently occurring or non-recurring event, under applicable accounting provisions or in management’s
discussion and analysis of financial condition and results of operations appearing in the Company’s Annual Report to
stockholders for the applicable year, and (ee) any other events as the Compensation Committee deems appropriate.

Any Qualifying Performance Criteria may be used to measure the performance of the Company as a whole or with respect
to any business unit, subsidiary or business segment of the Company, either individually, alternatively or in any
combination, and may be measured either annually or cumulatively over a period of years, on an absolute basis or relative
to a pre-established target, to previous period results or to a designated comparison group, in each case as specified by
the Compensation Committee in the award. Any performance goals that are financial metrics, which may be determined in
accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), in accordance with accounting principles
established by the International Accounting Standards Board (“IASB Principles”) or may be adjusted when established to
include or exclude any items otherwise includable or excludable under GAAP or under IASB Principles.

Restrictions on Transferability. No award under the 2023 EIP may be sold, transferred, assigned, pledged, or otherwise
encumbered or disposed of (or made the subject of any derivative transaction) to or with any third party other than a
Permitted Transferee. In no event may an award be transferred to a third-party financial institution for value. For purposes
of the 2023 EIP, a “Permitted Transferee” means:

(cid:3) with respect to outstanding shares of common stock held by any participant, (i) the participant’s spouse, children or
grandchildren (including any adopted and step children or grandchildren), parents, grandparents or siblings, (ii) a
trust for the benefit of one or more of the participant or the persons referred to in clause (i), or (iii) a partnership,
limited liability company or corporation in which the participant or the persons referred to in clause (i) are the only
partners, members or stockholders, and

(cid:3) with respect to awards, or any other share of common stock issued as or pursuant to any award, held by any

participant, any person to whom such awards or other shares are transferred by will or the laws of descent and
distribution or the Company.

No Dividends or Dividend Equivalents Paid on Unvested Awards. Subject to the provisions of the 2023 EIP and any
award agreement, the recipient of an award other than an option or SAR may, if so determined by the Compensation
Committee, be entitled to receive, once vested or on a further deferred basis, amounts equivalent to cash, stock or other
property dividends on shares (“Dividend Equivalents”) with respect to the number of shares covered by the award, as
determined by the Compensation Committee, in its sole discretion. The Committee may provide that the Dividend
Equivalents (if any) will be deemed to have been reinvested in additional shares or otherwise reinvested. Notwithstanding
the foregoing, dividends and/or Dividend Equivalents will be subject to restrictions and risk of forfeiture to the same extent
as the underlying award and will not be paid until and unless the underlying award vests.

Minimum Vesting Requirement. Notwithstanding any other provision of the 2023 EIP to the contrary, vesting of equity-
based awards will be contingent upon the completion of a service period of at least one year with respect to the award

(excluding, for this purpose, any (i) Substitute Awards, (ii) shares delivered in lieu of fully vested cash awards under the
2023 EIP and any Prior Plan, and (iii) awards to non-employee directors that vest on the earlier of the one year anniversary
of the date of grant or the next annual meeting of stockholders which is at least 50 weeks after the immediately preceding
year’s annual meeting); provided, that, the Compensation Committee may grant equity-based awards without regard to the
foregoing minimum vesting requirement with respect to a maximum of five percent of the available share reserve
authorized for issuance under the 2023 EIP (subject to certain equitable adjustments as described in the plan). For the
avoidance of doubt, the foregoing restrictions do not apply to the Compensation Committee’s discretion to provide for
accelerated exercisability or vesting of any award, including in cases of retirement, death, disability or a “Change in
Control” (as defined in the 2023 EIP), set forth in the terms of such award or otherwise.

Prohibition on Repricing. Other than pursuant to certain equitable adjustments as described in the 2023 EIP, the
Compensation Committee will not without the approval of the Company’s stockholders lower the option price per share of
an option (or base price of a SAR) after it is granted, cancel an option or SAR when the exercise price per share exceeds
the fair market value of one share in exchange for cash or another award (other than in connection with a change in
control), or take any other action with respect to an option or SAR that would be treated as a repricing under the rules and
regulations of the principal U.S. national securities exchange on which the shares are listed.

Recoupment. By accepting an award under the 2023 EIP, a participant acknowledges that the award (and any shares
subject to such award) is subject to the terms and conditions of the Company’s clawback/recoupment policy, as it may be
amended from time to time, as described in the Compensation, Discussion & Analysis section of this proxy statement
beginning on page 40. The Company’s current clawback policy applies to all time- and performance-based equity awards,
as well as cash incentive payments. Further, this provision also applies to any policy adopted by any exchange on which
the securities of the Company are listed pursuant to Section 10D of the 1934 Act. To the extent any such policy requires
the repayment of incentive-based compensation received by a participant, whether paid pursuant to an award granted
under the 2023 EIP or any other plan of incentive-based compensation maintained in the past or adopted in the future by
the Company, by accepting an award under the 2023 EIP, the participant agrees to the repayment of such amounts to the
extent required by such policy and applicable law.

Foreign Employees and Consultants. Awards may be granted to participants who are foreign nationals or employed or
providing services outside the United States, or both, on such terms and conditions different from those applicable to
awards to employees or consultants providing services in the United States as may, in the judgment of the Compensation
Committee, be necessary or desirable in order to recognize differences in local law or tax policy.

Change in Control. Unless otherwise provided by the Compensation Committee either by the terms of an award
agreement or by resolution adopted prior to the occurrence of a “Change in Control” (as defined in the 2023 EIP):

(cid:3) in the event of a Change in Control, upon and subject to the consummation of such Change in Control, all awards
will be assumed and continued, or an equivalent award substituted by the Company’s successor or a parent or
subsidiary of such successor (and performance-based awards will be subject to the terms of the individual award
agreement); and

(cid:3) in the event a participant terminates employment for “Good Reason,” or is terminated by the Company
without “Cause” (each such term as defined in the 2023 EIP), on or within two years after a Change in
Control described above, then awards not previously vested will immediately become vested; or

(cid:3) in the event of a Change in Control where the successor (or parent or subsidiary thereof) does not assume,

continue or substitute the outstanding awards, then subject to the consummation of the Change in Control, all
awards will accelerate and vest in full (with performance-based awards subject to the terms of the individual award
agreements), and, if applicable, awards will be cancelled in exchange for a cash payment based on the fair market
value of the shares of the Company’s common stock subject to the award, less any option price, which amount may
be zero if applicable.

Term of the 2023 EIP; Amendment and Termination. The 2023 EIP will be effective upon stockholder approval at this
meeting and will terminate on the 10th anniversary of such effective date, unless sooner terminated (except that no
incentive stock option may be granted after the 10th anniversary of the date the Board approves the 2023 EIP). The Board
may amend, alter or discontinue the 2023 EIP in any respect at any time, but no amendment may diminish any of the rights
of a participant under any awards previously granted. In addition, stockholder approval is required for any amendment that
would change the class of individuals eligible to participate, increase the maximum number of shares available for awards,
reduce the price at which options may be granted, reduce the exercise price of any outstanding option, permit any options
or SARs to be repriced, or extend the term of the 2023 EIP.

New Plan Benefits

Because awards under the 2023 EIP are discretionary, benefits or amounts that will hereinafter be received by or allocated
to our chief executive officer, the named executive officers, all current executive officers as a group, the non-employee
directors as a group, and all employees who are not executive officers, are not presently determinable. We have not made
any awards under the 2023 EIP that are contingent upon obtaining stockholder approval of the 2023 EIP.

Federal Income Tax Consequences of Awards

The following discussion summarizes certain federal income tax consequences of the issuance and receipt of options and
other stock-based awards under the 2023 EIP under the law as in effect on the date hereof. The summary does not purport
to cover all federal employment tax or other federal tax consequences that may be associated with the 2023 EIP, nor does
it cover state, local, or non-U.S. taxes.

When a non-qualified stock option is granted, no income will be recognized by the option holder. When a non-qualified
stock option is exercised, in general, the option holder will recognize ordinary compensation income equal to the excess, if
any, of the fair market value of the underlying common stock on the date of exercise over the exercise price multiplied by
the number of shares of common stock equal to the amount of compensation income recognized by the option holder for
our taxable year that ends with or within the taxable year in which the option holder recognized the compensation.

A participant is not taxed on the grant or exercise of an incentive stock option (an “ISO”). The difference between the
exercise price and the fair market value of the shares on the exercise date will, however, be a preference item for purposes
of the alternative minimum tax. If an option holder holds the shares acquired upon exercise of an ISO for at least two years
following the option grant date and at least one year following exercise, the option holder’s gain, if any, upon a subsequent
disposition of such shares is long term capital gain. The measure of the gain is the difference between the proceeds
received on disposition and the option holder’s basis in the shares, which generally equals the exercise price. If an option
holder disposes of stock acquired pursuant to exercise of an ISO before satisfying the one and two-year holding periods
described above, the option holder will recognize both ordinary income and capital gain in the year of disposition. The
amount of the ordinary income will be the lesser of (i) the amount realized on disposition less the option holder’s adjusted
basis in the stock, usually the exercise price, or (ii) the difference between the fair market value of the stock on the
exercise date and the exercise price. The balance of the consideration received on such a disposition will be long-term
capital gain if the stock had been held for at least one year following exercise of the ISO and otherwise will be short-term
capital gain. We are not entitled to an income tax deduction on the grant or exercise of an ISO or on the option holder’s
disposition of the shares after satisfying the holding period requirement described above. If the holding periods are not
satisfied, we will be entitled to a deduction in the year the option holder disposes of the shares in an amount equal to the
ordinary income recognized by the option holder.

When a stock appreciation right is granted, no income will be recognized by the participant. When a stock appreciation
right is exercised, in general, the participant will recognize ordinary compensation income equal to the cash and/or the fair
market value of the shares received upon exercise. We generally are entitled to a deduction equal to the compensation
income recognized by the participant.

Generally, when a restricted stock unit or a share of restricted stock is granted, no income will be recognized by the
participant. Upon the payment to the participant of common shares in respect of restricted share units or the release of
restrictions on restricted stock, the participant generally recognizes ordinary compensation income equal to the fair market
value of the shares as of the date of delivery or release. We generally are entitled to a deduction equal to the
compensation income recognized by the participant.

Generally, when performance compensation is granted, no income will be recognized by the participant. Upon the payment
to the participant of cash in respect to the performance compensation, the participant generally recognizes ordinary
compensation income equal amount of the payment. We generally are entitled to a deduction equal to the compensation
income recognized by the participant.

A participant may be required to pay to us or make arrangements satisfactory to us to satisfy all federal, state and other
withholding tax requirements related to awards under the 2023 EIP.

The Board of Directors recommends a vote “FOR”
the 2023 Equity Incentive Plan

Equity Compensation Plan Information

The following table sets forth information as of March 31, 2023, regarding all of our existing compensation plans pursuant
to which equity securities are authorized for issuance to employees and non-employee directors.

Plan Category

Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options,
Warrants
and Rights (a)

Weighted-
Average
Exercise Price of
Outstanding Options,
Warrants and
Rights(1)
(b)

Number of
Securities
Remaining Available
for Future Issuance
under Equity
Compensation
Plans (Excluding
Securities Reflected
in Column (a))

Equity compensation plans approved by security holders

2,243,675

Equity compensation plans not approved by security holders

—

Total

2,243,675

78.80

—

78.80

2,221,003

—

2,221,003

(1) Awards of restricted stock units, performance share units and deferred stock units and stock units held in both the EnerSys Voluntary Deferred Compensation
Plan for Non-Employee Directors and the EnerSys Voluntary Deferred Compensation Plan for Executives were not included in calculating the weighted-
average exercise price as they will be settled in shares of common stock for no consideration.

Proposal No. 3

Ratification of Appointment of Independent Registered Public
Accounting Firm

The Audit Committee of the Board of Directors of EnerSys has appointed Ernst & Young LLP as our independent
registered public accounting firm for the fiscal year ending March 31, 2024. No determination has been made as to what
action the Audit Committee would take if stockholders do not ratify the appointment.

Ernst & Young LLP conducted the audit of the financial statements of EnerSys and its subsidiaries for the fiscal year ended
March 31, 2023. Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting, will be given an
opportunity to make a statement if they desire to do so, and will be available to answer appropriate questions from
stockholders.

The Board of Directors recommends a vote “FOR”
the ratification of the appointment of
Ernst & Young LLP

AUDIT COMMITTEE REPORT

Background

The members of the Audit Committee are currently Directors Ronald P. Vargo (Chair), Hwan-yoon F. Chung, Steven M.
Fludder, Tamara Morytko, and Paul J. Tufano. For additional information relating to the members and responsibilities of the
Audit Committee, see “Corporate Governance–Committees of our Board of Directors–Audit Committee.”

Responsibility

Management is responsible for the preparation of financial statements and the integrity of the reporting process, including
the system of internal and disclosure controls.

The independent auditors are responsible for expressing an opinion on the conformity of those audited financial statements
with generally accepted accounting principles in the United States and to express an opinion on the audit of internal control
over financial reporting.

The primary responsibilities of the Audit Committee are to select, engage, and compensate our independent auditors and
to oversee the financial reporting process on behalf of the Board. It is not the duty of the Audit Committee to prepare
financial statements and related disclosures. It is also not the duty of the Audit Committee to plan or conduct audits, or to
determine that our financial statements are complete and accurate and in accordance with generally accepted accounting
principles in the United States.

Process and Recommendation

In fulfilling its responsibilities, the Audit Committee reviewed and discussed the audited financial statements for the fiscal
year ended March 31, 2023, with our management and independent auditors, including a discussion of the quality, not just
the acceptability, of the accounting principles as applied in our financial reports, the reasonableness of significant
judgments, and the clarity of the disclosures in the financial statements. The Audit Committee discussed with our internal
and independent auditors the overall scope and plans for their respective audits. The Audit Committee meets with
management to discuss disclosure controls and procedures and internal control over financial reporting. The Audit
Committee also meets with the internal and independent auditors, with and without our management present, to discuss
the results of their examinations and the overall quality of our financial reporting. The Audit Committee also reviewed with
our CEO and CFO their certification relating to their evaluation of our disclosure controls, the completeness and accuracy
of the financial statements and other financial information contained in the Form 10-K, and the process followed by the
CEO and CFO to assure the truthfulness of such certification.

The Audit Committee also discussed with the independent auditors, who are responsible for expressing an opinion on the
conformity of those financial statements with generally accepted accounting principles, the matters required to be
discussed by the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), including
PCAOB Auditing Standard No. 1301, Communications with Audit Committees, the rules of the Securities and Exchange
Commission, and other applicable regulations. In addition, the Audit Committee has discussed with the independent
auditor the firm’s independence from Company management and the Company, including the matters in the letter from the
firm required by PCAOB Rule 3526, Communication with Audit Committees Concerning Independence, and considered the
compatibility of non-audit services with the independent auditor’s independence.

The Audit Committee also reviewed and discussed together with management and the independent auditor the Company’s
audited consolidated financial statements for the fiscal year ended March 31, 2023, and the results of management’s
assessment of the effectiveness of the Company’s internal control over financial reporting and the independent auditor’s
audit of internal control over financial reporting.

Based on the process referred to above, the Audit Committee recommended to the Board that the audited financial
statements be included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2023.

Fees of Independent Auditors

The following table sets forth the aggregate fees for the fiscal years ended March 31, 2022, and March 31, 2023, incurred
for services provided by our independent registered public accounting firm, Ernst & Young LLP.

Description of Fees
Audit Fees, including fees associated with the annual audit of EnerSys and statutory
audits required internationally, the reviews of EnerSys’ quarterly reports on Form
10-Q, services provided in connection with the requirements of the Sarbanes-Oxley
Act of 2002, and comfort letters

Audit-Related Fees, including fees associated with target mergers and acquisitions,

and general accounting research and consultations

Tax Fees, including fees associated with income tax compliance, advice and planning
All Other Fees

Total

Year Ended

March 31, 2023

March 31, 2022

$
$
$
$

4,260,000

0
9,100
2,000
4,271,100

$
$
$
$

3,908,200

0
1,687
970
3,910,857

The Audit Committee considered whether the provision of non-audit services by our independent registered public
accounting firm for the fiscal year ended March 31, 2023, was compatible with maintaining auditor independence. The
Audit Committee pre-approved all fees for non-audit related services paid to our independent registered public accounting
firm for fiscal years 2022 and 2023.

Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services by Independent
Auditors

The Audit Committee pre-approves all audit and permissible non-audit services provided by the independent auditors.
These services may include audit services, audit-related services, tax services and other services. The Audit Committee
has adopted a policy for the pre-approval of services provided by the independent auditors. Under the policy, pre-approval
is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services
and is subject to a specific budget. In addition, the Audit Committee may also pre-approve particular services on a
case-by-case basis. For each proposed service, the Audit Committee has received detailed information sufficient to enable
the Audit Committee to pre-approve and evaluate such service. The Audit Committee has delegated pre-approval authority
to the Chairman of the Committee of up to $100,000, to pre-approve permitted non-audit services. Any pre-approval
decisions made under this delegated authority are ratified by the Audit Committee at its next scheduled meeting.

Appointment of Independent Registered Public Accounting Firm for Fiscal Year 2024

The Audit Committee has appointed Ernst & Young LLP to conduct the audit of the financial statements of EnerSys and its
subsidiaries for the fiscal year ending March 31, 2024. EnerSys stockholders are being asked to ratify the Audit
Committee’s appointment of Ernst & Young LLP as our independent registered public accounting firm at the Annual
Meeting to which this Proxy Statement relates.

Audit Committee
Ronald P. Vargo, Chair
Hwan-yoon F. Chung
Steven M. Fludder
Tamara Morytko
Paul J. Tufano

EXECUTIVE OFFICERS

Below are the biographies of our named executive officers (NEOs) for fiscal year 2023, other than Mr. Shaffer, whose
biography is included under “Board of Directors.”

Andrea J. Funk, age 53, Executive Vice President & Chief Financial Officer. Ms. Funk has served as
our Executive Vice President & Chief Financial Officer since April 1, 2022. She joined EnerSys in
December 2018 as Vice President Finance, Americas. Prior thereto, from 2013 to 2018, she served as
the Chief Executive Officer for Cambridge Lee Industries LLC, and as its Chief Financial Officer and
Treasurer from 2011 to 2013. Ms. Funk has served in positions of increasing responsibility at Carpenter
Technology, Arrow International, Rhone-Poulenc Rorer, Bell Atlantic Corporation and Ernst & Young.
Since July 2017, she has served on the Board of Directors of Crown Holdings Inc., a packaging
company whose shares are traded on The New York Stock Exchange and is a member of its Audit and
Compensation Committees. Ms. Funk holds a Master of Business Administration degree from The
Wharton School of Business and a Bachelor of Science degree in accounting from Villanova University
and was a certified public accountant.

Shawn M. O’Connell, age 50, President, Motive Power Global. Mr. O’Connell has served as our
President, Motive Power Global since July 2020. Prior thereto, from April 2019 through July 2020, he
served as our President, Motive Power, our Vice President – Reserve Power Sales and Service for the
Americas from February 2017, and Vice President, EnerSys Advanced Systems from December 2015 to
January 2017. Mr. O’Connell joined EnerSys in 2011, serving in various sales and marketing capacities
in several areas of our business. Mr. O’Connell received his Master of Business Administration degree in
International Business from the University of Redlands, CA and his Bachelor of Arts degree in English
Literature from the California State University, San Bernardino. Mr. O’Connell is a veteran of the U.S.
Army’s 82nd Airborne Division (Paratroopers) where he served as a Signals Intelligence Analyst,
Spanish Linguist, and held a Top-Secret security clearance.

Joern Tinnemeyer, age 50, Mr. Tinnemeyer has served as Senior Vice President and Chief Technology
Officer since October 2017. He joined EnerSys in August 2016 as its Vice President and Chief
Technology Officer. Mr. Tinnemeyer is responsible for global engineering, global quality, and technology
development. His primary focus of expertise includes energy storage systems, system design
optimization, safety topologies and control theory. He has worked on some of the most advanced lithium
battery packs for major automotive OEMs. He currently also serves as Chairman of NaatBatt, North
America’s foremost organization to foster advanced energy storage systems. Mr. Tinnemeyer studied
applied mathematics and electrical engineering at the University of Toronto and holds a MSc in
Astronautics and Space Engineering.

Andrew M. Zogby, age 63, President, Energy Systems Global. Mr. Zogby has served as President,
Energy Systems Global since July 2020. Prior thereto, from April 2019, he served as President, Energy
Systems–Americas. He joined EnerSys upon completion of the acquisition of Alpha Technologies in
December 2018. Mr. Zogby served as President of Alpha Technologies since 2008 and brings over 30
years of experience in global broadband, telecommunications, and renewable energy industries. He has
held corporate leadership positions with several leading technology firms. Mr. Zogby received his
Bachelor of Science degree in Industrial and Labor Relations from LeMoyne College, Syracuse, New
York, and his Master of Business Administration degree from Duke University’s Fuqua School of
Business. He is active in the US Chamber of Commerce, and serves on the Chamber’s Energy, Clean
Air & Natural Resources Committee and the C_TEC, Chamber Technology Engagement Center
Committee.

NAMED EXECUTIVE OFFICER COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis includes a description of the compensation provided in fiscal year 2023 to our
named executive officers. The discussion below contains financial information determined by methods other than in
accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The non-GAAP financial measures include
“EBITDA,” “adjusted operating earnings,” “adjusted EBITDA” and “adjusted diluted earnings per share.” Please refer to
“Management’s Discussion and Analysis” in our Annual Report on Form 10-K attached as Exhibit A to this proxy statement
for additional information and, except as otherwise described below, to a reconciliation of the non-GAAP measures to the
comparable GAAP measures contained in Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on May 24,
2023.

Business Overview

EnerSys is the global leader in stored energy solutions for industrial applications. We manufacture and distribute energy
systems solutions and motive power batteries, specialty batteries, battery chargers, power equipment, battery accessories
and outdoor equipment enclosure solutions to customers worldwide. Energy Systems which combine enclosures, power
conversion, power distribution and energy storage are used in the telecommunication and broadband, utility industries,
uninterruptible power supplies, and numerous applications requiring stored energy solutions. Motive Power batteries and
chargers are utilized in electric forklift trucks and other industrial electric powered vehicles. Specialty batteries are used in
aerospace and defense applications, large over the road trucks, premium automotive and medical. We also provide
aftermarket and customer support services to over 10,000 customers in more than 100 countries through a network of
distributors, independent representatives, and our internal sales force around the world.

Our strategy is to continue to develop innovative energy solutions and expand into new markets through increased
investment in research and development (R&D) and possibly through acquisitions. Our R&D is focused on integrated
technology solutions for energy storage, power electronics, and software services. Our R&D processes are based on an
efficient design methodology that enables us to leverage our core technology platforms across our served end-markets
resulting in lower costs and a faster time to market with new product innovations. Our recent acquisitions have allowed us
to expand our product and service offerings, providing new opportunities in existing markets such as telecommunications
networks, broadband cable, industrial power and utilities, data centers, material handling, aerospace and defense, trucking
and premium aftermarket transportation, along with opening new markets in renewable energy and fast charge and
storage (FC&S).

Fiscal Year 2023 Performance

Fiscal 2023 full year revenue of $3.7 billion was up 10.5% year-over-year driven by robust demand across all lines of
business. Our full year fiscal 2023 operating income was $278 million compared to $206 million in 2022, our EBITDA was
$361 million and 9.7% of net sales, compared to $308 million and 9.2% of net sales in 2022, and our diluted earnings per
share was $4.25 compared to $3.36 in 2022. On an adjusted basis our full year fiscal 2023 operating income was
$322 million compared to $264 million in 2022, our EBITDA was $388 million and 10.4% of net sales compared to
$340 million and 10.1% of net sales in 2022, and our diluted earnings per share was $5.34 compared to $4.47 in 2022.
During fiscal year 2023, we generated free cash flow of over $191 million (including a $150 million asset securitization). At
March 31, 2023, we had over $340 million of cash on hand and our net leverage ratio was 1.8x EBITDA (per U.S. Credit
Agreement), compared to 2.5x at March 31, 2022.

Sustainability Progress

Robust sustainability disclosure and targets are essential for ensuring accountability and maintaining and reinforcing our
corporate reputation. With the ongoing strategic oversight of our executive ESG Steering Committee, we continued strong
progress toward our sustainability goals and published our 2022 Sustainability Update in May 2023. Our accomplishments
included reducing our absolute Global Scope 1 and 2 Greenhouse Gas Emissions by 4% and reducing Scope 1 emissions
8% versus 2021. In calendar year 2022, we saved ~$3 million on energy compared to business-as-usual baselines,
marking a 2.4% year-over-year reduction in total energy consumed. In April 2023, we were awarded the Better Practice
Award from the U.S. Department of Energy Better Plants Program for the implementation of the EnerSys Operating
System (EOS) Lean Management program.

Fiscal Year 2023 Compensation Actions

Our executive compensation program is structured to support our vision to be the global leader in our chosen markets for
stored energy solutions, while maximizing long-term stockholder value. We designed the program to link executive
compensation to our financial performance and use equity compensation to closely align the interests of management with
those of our stockholders. The Compensation Committee evaluates our overall performance in making decisions on the
executive compensation program.

Management Incentive Plan Payouts were Above Target

Our cash annual incentive plan results for fiscal year 2023 are summarized below and align with our performance
described above:

Incentive Plan

Incentive Plan Metrics

Results

Fiscal Year 2023 Management
Incentive Plan (MIP)

60% Operating Earnings

Payout = 127.2% of Target

20% Primary Operating Capital

20% Non-Financial

Transformational Quantitative
Goals

Program Structure Unchanged

We made no major changes to our incentive plans for fiscal year 2023.

The fiscal year 2023 MIP measured operating earnings, primary operating capital, and non-financial transformational
quantitative (NFTQ) goals, which are milestones that align with the achievement of our five-year strategic plan. The plan
aligns with our focus on expense control, profitability, cash generation and preservation, and continued investment in our
new product lines. However, at the time that the goals were set, the Committee did consider the ongoing impact of the
COVID-19 pandemic and supply chain constraints on our business and the businesses of our vendors and customers.

The long-term incentive program was designed to support the strategic objectives of the Company over a multi-year period
and considers the ongoing uncertainty in the current economic environment.

Half of the long-term value was provided in the form of premium-priced stock options, to ensure that a meaningful portion
of the program was at-risk and performance-based. We selected premium-priced options with a 10-year term (versus our
prior performance shares with a three-year performance period) to better align and incentivize management with the
execution and achievement of the Company’s business strategy and financial model.

The remaining portion of the long-term program was in the form of restricted stock units (RSUs) in order to increase the
retentive value of the overall program and provide further shareholder alignment. This continues to be a critical component
of the overall program given significant retention challenges in the current labor market.

Summary of Other Major Program Elements

Other significant elements of our compensation program that reinforce stockholder alignment, our pay-for-performance
objectives, and demonstrate the Compensation Committee’s commitment to strong governance practices include:

(cid:3) an independent Compensation Committee makes the compensation decisions for our named executive officers and

the Committee engages an independent compensation consultant to assist in making such decisions;

(cid:3) we require that a majority of pay be at-risk, 86% of fiscal year 2023 target total pay was at-risk for our Chief

Executive Officer (74% on average for our other named executive officers);

(cid:3) we require that a majority of pay be tied to long-term performance, 70% of fiscal year 2023 target total pay was
granted in the form of long-term incentives for our Chief Executive Officer (55% on average for other named
executive officers);

(cid:3) we maintain robust stock ownership guidelines for executives;

(cid:3) we prohibit hedging and pledging of our stock;
(cid:3) we have a clawback policy designed to recoup excess compensation paid to executive officers in the event of an

accounting restatement;

(cid:3) we have adopted a mandatory holding requirement after vesting for certain equity awards granted to our executive

officers;

(cid:3) equity grant administration procedures are in place to ensure that awards comply with legal, regulatory, and

accounting requirements;

(cid:3) the Compensation Committee conducts a risk assessment of our compensation program at least annually, to

confirm that the program does not encourage excessive risk-taking;

(cid:3) our equity awards generally require a double trigger in order for vesting to be accelerated in the event of a change

in control (i.e., a qualifying termination of employment plus the occurrence of a change in control);

(cid:3) our executive severance arrangements do not provide for excise tax gross ups; and
(cid:3) we do not provide excessive perquisite or benefit programs, nor do we offer supplemental retirement plans.

Results of 2022 Advisory Vote on Executive Compensation–Say-on-Pay

At our annual meeting of stockholders held on August 4, 2022, approximately 96% of votes cast by stockholders approved
the advisory resolution on our executive compensation. The Compensation Committee considered this a high approval rate
by the stockholders in establishing the compensation programs for fiscal year 2023 and will continue to consider the
outcome of future non-binding advisory stockholder votes on executive compensation in its determinations regarding
executive compensation.

At our 2023 Annual Meeting, stockholders will have the opportunity to cast an advisory say-on-pay vote regarding the
compensation of our named executive officers as discussed further in Proposal No. 4 beginning on page 68.

Executive Compensation Policy

We generally base our executive compensation program on the same objectives that guide us in establishing
compensation programs for all our employees:

(cid:3) Compensation should align the interests of employees, particularly executives, with the long-term interests of our
stockholders through award opportunities that result in ownership of our common stock. While our key employees
receive a mix of both annual and long-term incentives, employees at higher levels have an increasing proportion of
their compensation tied to longer-term performance because these employees are each in a position to have
greater influence on longer-term results.

(cid:3) Compensation should reward teamwork. Because our success depends on our ability to optimize our worldwide
business, our compensation programs emphasize our total results in addition to individual geographic or product
line results.

(cid:3) Compensation should be based on the level of job responsibility, as well as individual and corporate performance.

As employees progress to higher levels in the organization, an increasing proportion of their pay should be linked to
corporate performance and stockholder returns because they are more able to affect Company-wide results.
(cid:3) Compensation should reflect the value of the job in the marketplace. To attract and retain a skilled work force, we

must remain competitive with the pay of other employers who compete with us for talent.

(cid:3) To be effective motivation, performance-based compensation programs should enable employees to easily

understand how their efforts can affect their pay by contributing to the achievement of our strategic and operational
goals.

(cid:3) The programs and individual pay levels will always reflect differences in job responsibilities, geographies, and
marketplace considerations, although the overall structure of compensation and benefit programs should be
broadly similar across the organization.

Determination of Compensation

The Compensation Committee reviews and approves each named executive officer’s base pay, bonus, and equity
incentive compensation annually, with the guidance of the Compensation Committee’s independent compensation

consultant, FW Cook. The Compensation Committee considers a number of factors to determine the compensation for the
named executive officers and to ensure that our executive compensation program is achieving its objectives. Among those
factors are:
(cid:3) Assessment of Corporate Performance. The Compensation Committee uses corporate performance measures in two
ways. First, in establishing total compensation ranges, the Compensation Committee considers our performance
within our industry using various measures, including, but not limited to, sales growth, profitability, balance sheet
management, and total shareholder return (TSR). Second, as we describe in more detail below, the Compensation
Committee has established specific corporate performance measures that determine the size of, and conditions to,
payments under our MIP and the payout of our equity awards is based on the value of our common stock.
(cid:3) Assessment of Individual Performance. Individual performance affects the compensation of all our employees,

including the named executive officers. In addition, the Compensation Committee has adopted a formal evaluation
process for our CEO. Each member of our Board provides a written, subjective evaluation of our CEO, on an
anonymous basis, covering a broad range of criteria. The evaluations are collected and summarized by FW Cook, and
the Compensation Committee considers them in setting the CEO’s compensation. For each other named executive
officer, the Compensation Committee receives a recommendation from the CEO and also exercises its judgment
based on the Committee’s interactions with the executive officer.

(cid:3) Benchmarking. The Compensation Committee benchmarked our compensation programs for fiscal year 2023 with a
peer group consisting of the following companies, which are broadly similar with respect to industry and size, as
measured by revenue (peers range from $1.2 billion to $4.4 billion, with a median of $3.2 billion) and market
capitalization (peers range from $2.1 billion to $10.3 billion, with a median of $6.1 billion). At the time of the study,
EnerSys’ revenues were $3.1 billion, and market capitalization was $3.2 billion. Our peer group for fiscal year 2023
was comprised of the following companies:

A.O. Smith Corporation
Acuity Brands, Inc.
Barnes Group Inc.
Belden Inc.
Carlisle Companies Incorporated
Colfax Corporation
Crane Co.
Donaldson Company, Inc.
Flowserve Corporation

Hubbell Incorporated
Kennametal Inc.
Lincoln Electric Holdings Inc.
Regal-Rexnord Corporation
Timken Company
Valmont Industries, Inc.
Watts Water Technologies, Inc.
Woodward, Inc.
Zurn Water Solutions

In addition, the Compensation Committee conducted its annual review of the peer group for fiscal year 2024
benchmarking, considering financial size, industry, and business characteristics of the group. Based on such review, the
Compensation Committee has recommended the following peer group for fiscal year 2024:

Acuity Brands, Inc.
Advanced Energy
Barnes Group Inc.
Belden Inc.
Carlisle Companies Incorporated
Crane Co.
Donaldson Company, Inc.
Flowserve Corporation

Hubbell Incorporated
ITT Inc.
Lincoln Electric Holdings Inc.
Littelfuse
Regal-Rexnord Corporation
Vertiv Holdings
Watts Water Technologies, Inc.
Woodward, Inc.

The Compensation Committee evaluates our compensation program versus that of the peer companies with respect to
both individual pay levels and the structure of the program. The Compensation Committee uses this data primarily to
ensure that our executive compensation program as a whole is competitive. Market data is one of several factors that is
used to evaluate compensation levels. Other factors may include individual and Company performance, industry identity,
experience in the role, responsibility level, and internal equity.

Target total direct compensation for fiscal year 2023 was positioned 12% above the median for the named executive
officers overall.

The Compensation Committee believes that this competitive positioning for incentive compensation is appropriate in light
of our rigorous goal setting approach under the annual incentive plan and our desire to place a greater emphasis on at-risk
pay that is earned over a multi-year period to support long-term stockholder value creation. The Compensation Committee
also believes this compensation structure is aligned with our executive compensation philosophy.

Components of Executive Compensation

Base Salary

Base salary is the fixed element of our named executive officers’ cash compensation. The Compensation Committee
generally considers whether each named executive officer’s base salary should be increased based on individual
performance, as well as whether the base salary is competitive with that of executives in peer companies with comparable
roles and responsibilities.

The Compensation Committee annually sets the base salaries of our named executive officers with assistance from the
Compensation Committee’s independent compensation consultant and solicits recommendations from the CEO for our
named executive officers, other than the CEO.

For fiscal year 2023, the Compensation Committee considered the aforementioned factors and current responsibilities,
performance, success and achievements of the business, and determined that the following base salary adjustments were
appropriate.

The base salaries of each of the named executive officers for fiscal years 2022 and 2023 are shown in the chart below in
U.S. Dollars as of the end of the fiscal year.

Name

David M. Shaffer
Andrea J. Funk
Shawn M. O’Connell
Joern Tinnemeyer
Andrew M. Zogby

Management Incentive Plan

2023
$ 1,040,000
562,000
$
495,000
$
416,000
$
495,000
$

2022
$ 1,000,000
540,000
$
476,000
$
400,000
$
476,000
$

% Change
4.0%
4.0%
4.0%
4.0%
4.0%

Under our MIP, our executives and key management personnel, including the named executive officers, may receive an
annual cash bonus upon satisfaction of annual financial and strategic goals, which the Compensation Committee
establishes at the beginning of each year. Consistent with our compensation policy, individuals with greater job
responsibilities have a greater portion of their total cash compensation tied to our corporate performance through the MIP.

Under the MIP, each participant has threshold, target, and maximum potential cash bonus payouts, which the
Compensation Committee establishes at the beginning of each fiscal year. The Compensation Committee bases the
potential payments on each participant’s job responsibilities and position within our organization. The potential payouts are
stated as a percentage of base salary. In establishing the goals, the Committee gives significant consideration to our prior
year’s performance. Satisfactory individual performance is a condition to payment, and, at the end of each fiscal year, the
Committee can, at its discretion, adjust an individual’s payout under the MIP based on such individual’s performance.

Each year, the Committee also reviews overall financial performance and adjusts for items that are not reflective of normal
operating performance for that year. These adjustments are items that the Committee believes are fair to both participants
and stockholders, encourage appropriate actions that foster the long-term health of the business, and are consistent with
the objectives underlying our predetermined performance goals. The adjustments identified by the Committee at the
beginning of fiscal year 2023 included expenses related to merger and acquisition activity, unbudgeted pandemic-related
supply chain impacts, the impact of restructuring programs, goodwill and intangible asset charges, the impact of tax or
accounting changes, unplanned legal settlements, and the effects of foreign currency fluctuations. The Committee also
reserves the right to make adjustments with respect to other extraordinary, non-recurring items if there is valid business
rationale, however, no such discretionary adjustments were made for the fiscal year 2023 MIP.

Fiscal Year 2023 MIP Targets and Payout

For fiscal year 2023, the Compensation Committee selected adjusted operating income, primary operating capital, and
several non-financial quantitative transformational objectives that were directly aligned with the achievement of our five-

year strategic plan. Operating income and primary operating capital focused on improving both our core operating earnings
and balance sheet strength, respectively. The non-financial component was designed to focus management on the critical
strategic goals that support new product development and our transformational business strategy. Overall, the Committee
believes that the mix of performance metrics supported the objectives of the business established for fiscal year 2023,
which were expense control, profitability, cash generation and preservation, and continued investment in our new product
lines.

The Compensation Committee established the following framework for awards in fiscal year 2023:

(cid:3) Bonus Targets. For our named executive officers, the threshold, target, and maximum bonus opportunities for fiscal
year 2023 were 15%, 100%, and 200% of target, respectively, which were the same as used in fiscal year 2022.

(cid:3) Company Performance Measures. For all participants in the MIP, including our named executive officers, the

Compensation Committee established fiscal year 2023 performance measures, comprised of a mix of financial and
(NFQT goals as follows:

Metric

Philosophy / Methodology

Financial

Operating Earnings

Focus on growth, expense control, and ultimately, profitability.

Primary Operating Capital

Focus on sales, cash generation and strengthening the balance
sheet.

Specialty
(NFQT)

Advanced Connected Energy
(ACE) Connect Relaunch

Release ACE into retail applications (intelligent batteries for
aftermarket) by fiscal year end.

Energy
Systems
(NFTQT)

Motive Power
(NFTQ)

Advanced
Development
Programs
(NFTQ)

HSL Size Expansion

Early availability of 2 new sizes on HSL by fiscal year end.

5G Critical Power Portfolio

Early availability of the 48v lithium battery for telecom
applications and the TouchSafe small cell line powering system.

Launch California Public Utility
Commission (CPUC) Solution

Commercial availability by fiscal year end.

80V Lithium

Availability of 80V lithium battery system.

Wireless Charging Launch

Lithium Supply

Availability of wireless charger for customer testing by fiscal year
end.

Ensure high quality competitively priced lithium cell suppliers and
advance domestic alternatives.

Battery Energy Storage System
(BESS) / DC Fast Charge

Move from pilot to business platform.

For fiscal year 2023, the total payout as a percentage of target was 127.2%, as shown in the chart and discussed below.

Performance Metrics

Weighting

Performance Goal Range and Payout
Maximum
Target
Minimum
(200%)
(100%)
(15%)

Performance
Payout Full Year
% of Goal (1)

Operating Earnings
(In Thousands)

Primary Operating Capital
(In Thousands)

NFTQ Goals

60%

20%

Goal

$264,000

$318,000

$363,000

Goal

# Goals
Achieved

28.4%

27.9%

27.0%

Overall Payout % of Goals

$324,241 (2)
114%

27.5% (3)
144%

7
150%

127.2%

(1) The Committee believes the analysis of financial measures reflecting non-GAAP adjustments provides important supplemental

information in evaluating the operating results as distinct from results that include items that are not indicative of ongoing operating
results and overall business performance. This analysis and adjustments are items that were consistent with the objectives underlying
our predetermined performance goals identified by the Committee at the beginning of fiscal year 2023.

(2) For fiscal year 2023, non-GAAP adjustments to operating earnings included inventory adjustments relating to exit activities in the
amount of $600; restructuring and other exit charges of $16,400; impairment of indefinite-lived intangibles of $500; amortization of
identified intangible assets from recent acquisitions of $25,100; accelerated stock based compensation of $900; acquisition costs of

$400; Contra Indemnification Release in connection with the Alpha acquisition of $1,200; distribution income from South Africa JV of
($300); IRA benefit through IRC 45X of ($17,283); and foreign exchange impact utilizing budgeted rates instead of average actual
rates in the amount of $19,150.

(3) For fiscal year 2023, adjustments to primary operating capital of $90,600 included strategic inventory builds for lithium and lead due

to continued abnormal supply chains.

The adjusted operating earnings performance goal for fiscal year 2023 was established at a level that was higher than
actual performance in fiscal year 2022, which was a rigorous goal given the ongoing challenges and volatility with sourcing
supply, labor, and inflation and related global market recoveries. The primary operating capital goal was established in
fiscal year 2023, in lieu of the free cash flow goal that was used in fiscal year 2022, due primarily to the impact of market
conditions, while still incorporating investor interest in cash flow but indexes with market dynamics and changes in sales.

The 2023 MIP payouts were made in May 2023. We set forth the amounts due to each named executive officer for fiscal
year 2023 performance under “Non-Equity Incentive Plan Compensation” in the Summary Compensation Table.

Long-Term Equity Incentive Compensation

The Compensation Committee has the ability to make various types of equity awards as long-term incentive compensation
to our named executive officers under the Amended and Restated 2017 Equity Incentive Plan. For fiscal year 2023, the
Committee reviewed the long-term incentive program, and determined that the mix used in fiscal year 2022 was
appropriate and aligned with the Company’s business strategy. An overview of the program is as follows:

Long-Term Grant Type

Weighting

Premium-Priced Stock

50%

Description
Š Exercise price set at a 10% premium to the fair market value

Options

on the grant date

Time-Vested RSUs

50%

Š Vesting in annual increments over four years

Š Vesting in annual increments over three years

Š 10-year exercise term

Stock options align employee incentives with stockholders because options have value only if the stock price increases
over time.

The nonqualified stock options that the Compensation Committee approved for fiscal year 2023 each have a 10-year term
and vest one-third each year over three years. The options, which we granted at our common stock’s closing price on the
date of grant, plus a 10% premium, encourage participants to focus on long-term performance and growth.

Time-vested RSUs support the retention of our executives and also align employee incentives with stockholders since the
value of RSUs is dependent on our stock price. RSUs vest in 25% annual increments over four years and have a longer
vesting period than the stock options and performance share units because their main purpose is for retention.

On May 18, 2022, the Compensation Committee approved the fiscal year 2023 equity awards, which we granted on
August 12, 2022. The fiscal year 2023 equity awards to each of the named executive officers were as follows:

Name

David M. Shaffer

Andrea J. Funk

Shawn M. O’Connell

Joern Tinnemeyer

Andrew M. Zogby

Number of
Premium-Priced
Stock Options(1)

108,673

25,478

20,799

18,719

20,799

Number of
Restricted
Stock
Units(2)

36,858

8,641

7,054

6,349

7,054

Total Value(3)

$5,225,000

$1,225,000

$1,000,000

$ 900,000

$1,000,000

(1) The exercise price of each premium stock option is $77.97, which is the closing price on August 12, 2022, the day of grant, plus a 10% premium. The value of

each premium stock option was $24.04. We determined the total value of each premium-priced stock option using a Black-Scholes valuation model.

(2) The value of each restricted stock unit was $70.88, the closing price on August 12, 2022, the date of grant.

(3) The total value is the sum of the value of the premium-priced stock options and restricted stock units determined as of August 12, 2022, the grant date. Final

award values may vary slightly due to fractional shares and rounding.

Deferred Compensation Plan

We maintain the EnerSys Voluntary Deferred Compensation Plan for Executives, which we refer to as the “Deferred
Compensation Plan,” under which participants who are among a select group of management and highly compensated
employees may elect to defer receipt of all or a portion of their cash bonus. Under the Deferred Compensation Plan, as
amended, each participant must make an irrevocable deferral election before the beginning of the fiscal year to which the
cash bonus relates or, in the case of “performance-based compensation,” on or before six months before the end of such
fiscal year. Participants can elect to receive distributions of their accounts in the Deferred Compensation Plan, either in a
lump sum or in installments, (i) upon their termination of employment, (ii) on a specified date, or (iii) upon our change in
control.

A participant may elect to allocate the deferred amounts into an investment account and select among various investment
options upon which the rate of return of the deferred amounts will be based. The participants’ investment accounts are
adjusted periodically to reflect the deemed gains and losses attributable to the deferred amounts. The specific investment
options are the same investment options available to our employees under our 401(k) retirement plan. Each participant is
always 100% vested in their investment accounts.

Alternatively, participants may elect to allocate the deferred amounts into restricted stock units awarded under our 2017
Equity Incentive Plan. If a participant elects to defer into restricted stock units, we will make an additional matching
contribution in the amount of 20% of the deferred amount. Dividend equivalent units, if any, will be credited to each stock
unit account. Each participant is 100% vested with respect to the amounts deferred to the restricted stock unit deferral
account. The matching contribution will vest over three years from the last date of the fiscal year to which the amounts
relate, except that participants will automatically become 100% vested in their matching contribution upon (i) our change in
control where the consideration paid is cash, or (ii) upon their death, disability, voluntary termination for “good reason,” or
involuntary termination of employment without cause, provided that such event occurs within two years of any type of
change in control. All restricted stock units are payable in shares of our common stock.

The Deferred Compensation Plan is a nonqualified deferred compensation plan. As such, the rights of all participants to
any deferred amounts represent our unsecured promise to pay and the deferred amounts remain subject to the claims of
our creditors.

Currently, none of our named executive officers participate in the Deferred Compensation Plan.

Employment and Related Agreements

We maintain severance agreements with each of Ms. Funk, Mr. O’Connell, Mr. Shaffer, and Mr. Zogby, which provide for
severance benefits upon a qualifying termination of employment in connection with a change in control.

On December 28, 2022, the employment agreement with Mr. Zogby that we assumed in connection with our acquisition of
Alpha Technologies Inc. (which we refer to as “Alpha”), was terminated, and we entered into the standard severance
agreement that is provided for other similarly positioned executives.

We describe these agreements under the heading “Employment Agreements.” We describe the termination and
change-in-control provisions of these agreements and our equity awards under the heading “Potential Payments Upon
Termination or Change-In-Control.”

Employee Benefits

We generally offer all our eligible non-unionized U.S. employees, including the named executive officers, core employee
benefits coverage. The benefits include medical and dental coverage, short-term disability insurance, life insurance, access
to an employee assistance program to support the wellbeing of our employees, and a discount program for our products.
All eligible non-unionized U.S. employees, including the named executive officers, may also obtain at their expense, long-
term disability insurance coverage, and participate in a 401(k)-retirement plan as a means to save for retirement on a
tax-advantaged basis. We provide a matching contribution under the 401(k)-retirement plan to all eligible participants.

Each of our employees, including the named executive officers, partially bears the cost of certain employee benefits. We
do not cover our named executive officers under any defined benefit pension or supplemental executive retirement plans.

Perquisites

We provide limited perquisites and personal benefits to our named executive officers, including a company car and spousal
travel benefits to business functions, and airline membership dues.

The Compensation Committee has determined that each of these benefits has a valid business purpose. You can find
information about these perquisites in the footnotes to the Summary Compensation Table.

Other Matters

Clawback Policy

We maintain a clawback policy applicable to each of our executive officers subject to Section 16 of the Exchange Act,
including each of our named executive officers. The policy applies to any cash bonus, incentive payment or equity award
(including all time- and performance-based equity awards) paid or granted to the executive. Pursuant to this policy, in the
event of any restatement of our financial statements, our Board of Directors, or an appropriate committee designated by
our Board of Directors, may require reimbursement or forfeiture of any excess payment from any cash or equity-based
compensation awarded to or realized by, such executive officer following the adoption of, and subject to, this policy in the
event that (i) our financial statements are required to be restated as a result of material non-compliance with any financial
reporting requirements under the federal securities laws (other than a restatement due to a change in financial accounting
rules), (ii) as a result of such restatement, a performance measure or specified performance target which was a material
factor in determining the amount of such bonus, incentive or equity compensation previously earned by such officer is
restated, and (iii) our Board of Directors, or an appropriate committee of the Board, determines, in its discretion, that a
lower amount of bonus, incentive or equity compensation would have been paid to such officer based upon the restated
financial results. An amended clawback policy will be adopted when required.

Policy on Granting Equity Awards

We have a written equity award policy that provides the authority and the procedure for granting awards. The
Compensation Committee has the authority to make all equity awards to employees of the Company. In addition, within
certain limitations, the Compensation Committee may delegate authority to our CEO to make awards to employees below
the named executive officer level.

Our policy requires that the exercise price of stock options be no less than the closing price of our stock on the grant date.
Subject to applicable local law, the grant date for equity awards to all eligible participants, including our named executive
officers, is on the first business day after the annual meeting that our stock trading window is open and that is not
otherwise within our stock trading blackout policy. Grants may not be made within four days before or less than one day
after the release of material nonpublic information. These procedures provide assurance that grant dates are not being
manipulated to result in an exercise price that is favorable to us or our employees.

Hedging and Pledging Prohibition

We do not permit our employees to hedge their economic exposures to our common stock that they own by engaging in
transactions involving puts, calls, or other derivative securities, zero-cost collars, forward sales contracts, or buying on
margin or pledging shares as collateral for a loan.

Stock Ownership Guidelines and Holding Requirement

The Compensation Committee has adopted stock ownership guidelines for both executives and non-employee directors.
We intend that the guidelines align the interests of our executives and non-employee directors with those of the
stockholders and ensure that the executives and directors responsible for overseeing operations have an ongoing financial
stake in our success. The stock ownership guidelines provide that we expect our CEO to attain and maintain an investment
level in stock equal to six times his annual base salary. We expect the other named executive officers to attain and
maintain an investment level equal to three times their annual base salary. We expect each individual to achieve such
investment levels five years from the date a specified ownership level commences. If an executive is promoted and as a
result is subject to a higher guideline, an additional three years would be provided to reach such higher level. If the
guidelines are not met within the required time frame, the Compensation Committee, at its discretion, may require an
executive to hold 100% of the after-tax profit shares acquired through the compensation program until the guideline is met.
The Compensation Committee evaluates ownership levels on a quarterly basis. All of our named executive officers have
achieved, or are on target to achieve, their respective investment level set forth in the guidelines. Named executive officers
are further subject to a holding requirement after vesting on any Performance Share Units. Such holding requirement after
vesting is mandatory and in accordance with the terms of the underlying grant agreement.

We describe the stock ownership guidelines for our non-employee directors under “Director Compensation.”

Review of Compensation Policies and Practices in Relation to Risk

During fiscal year 2023, the Compensation Committee, with the assistance of FW Cook, conducted a review of our
compensation policies and practices to ensure that they do not motivate imprudent risk taking. Included in the review were
all of our cash and equity-based incentive plans, including the CLO, CIO, and others below the executive level, as well as
other compensation related policies and practices including stock ownership guidelines, mandatory equity holding
requirements, insider trading prohibitions, clawback policies, and independent oversight by the Compensation Committee.

We evaluated these compensation policies and practices to ensure that they do not foster risk taking above the level of risk
associated with our business model and they were designed to encourage behaviors aligned with the long-term interests of
our stockholders. Thus, we considered our growth and return performance, volatility and leverage, and compared them to
the performance metrics, leverage, and time horizon of our compensation policies and practices. We also considered the
mix of compensation, such as the balance between fixed and variable pay, cash and equity, performance goals on a
corporate, business unit, and individual level, financial and non-financial metrics, and determinations based upon formulas
and discretion. Based on this assessment, we have concluded that we have a balanced pay and performance program and
do not promote excessive risk taking.

Tax Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”), disallows a tax deduction to public
companies for compensation paid in excess of $1 million to certain current and former executive officers of the Company.
Historically, there was an exception to this $1 million limitation for performance-based compensation if certain
requirements were met.

As in prior years, the Compensation Committee will continue to take into account tax and accounting implications (including
with respect to the lack of deductibility under Section 162(m)) when making compensation decisions but reserves its right
to make compensation decisions based on other factors as well, which it determines in our best interests. Further, taking
into account the elimination of the exception for performance-based compensation, the Compensation Committee may
determine to make changes or amendments to its existing compensation programs in order to revise elements that were
initially designed to comply with Section 162(m) but that may no longer serve as an appropriate incentive measure for our
executive officers.

COMPENSATION COMMITTEE REPORT

The Compensation Committee evaluates and establishes compensation for our named executive officers and oversees our
equity incentive plan, the MIP, and our benefit and perquisite programs. Management has the primary responsibility for our
financial statements and reporting process, including the disclosure of executive compensation. With this in mind, we have
reviewed and discussed with management the Compensation Discussion and Analysis found on pages 40 to 50. The
Compensation Committee is satisfied that the Compensation Discussion and Analysis fairly and completely represents the
philosophy, intent, and actions of the Compensation Committee with regard to executive compensation. We recommended
to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and in our
Annual Report on Form 10-K for the fiscal year ended March 31, 2023, for filing with the Securities and Exchange
Commission.

Compensation Committee
Paul J. Tufano, Chair
Caroline Chan
Gen. Robert Magnus
Tamara Morytko
Ronald P. Vargo

SUMMARY COMPENSATION TABLE

The following table summarizes the compensation earned in fiscal years 2021, 2022, and 2023, by our Chief Executive
Officer, our Chief Financial Officer, and our three other most highly compensated executive officers. We collectively refer to
these individuals as the “named executive officers.” We did not pay any discretionary bonuses, nor did we maintain any
defined benefit pension arrangements and none of our named executive officers deferred or accrued amounts under the
Deferred Compensation Plan for Executives for fiscal years 2021, 2022, or 2023; accordingly, we have omitted the “Bonus”
and “Change in Pension Value and Nonqualified Deferred Compensation Earnings” columns from the table.

Name Principal Position

Year

Salary

Stock
Awards(1)

Option
Awards(1)

Non-Equity
Incentive Plan
Compensation(2)

All Other
Compensation

Total

David M. Shaffer

President & Chief Executive Officer

Andrea J. Funk

Executive Vice President &
Chief Financial Officer

Shawn O’Connell

President, Motive Power Global

Joern Tinnemeyer

Senior Vice President & Chief
Technology Officer

Andrew M. Zogby

President, Energy Systems Global

2023

2022

2021

2023

2022

2021

2023

2022

2021

2023

2022

2021

2023

2022

2021

$ 1,040,000

$ 2,612,500

$ 1,000,000

$ 2,332,500

970,080

$ 2,100,000

561,600

N/A

495,123

476,080

440,000

416,064

400,061

N/A

495,135

476,091

462,000

612,500

N/A

500,000

453,610

450,000

280,157

N/A

500,000

450,000

612,500

N/A

500,000

453,610

450,000

280,157

N/A

500,000

450,000

1,572,363

1,150,333

1,807,307

495,293

N/A

436,665

315,782

465,436

366,942

262,164

N/A

499,055

365,139

577,495

51,555(3)

$ 7,888,918

36,833

41,913

$ 6,852,166

$ 7,019,300

32,538(4)

$ 2,314,431

N/A

23,377(5)

$ 1,955,165

19,904

14,398

$ 1,718,986

$ 1,819,834

34,457(6)

$ 1,717,463

29,759

N/A

$ 1,252,298

N/A

514,791(7)

$ 2,508,981

25,363

18,843

$ 1,766,593

$ 1,958,338

(1) We calculated these amounts using the provisions of ASC Topic 718. Amounts represent the aggregate grant date fair value of the applicable awards. See the

“Stock-Based Compensation” Note to our consolidated financial statements set forth in our Annual Report on Form 10-K for the fiscal years ended March 31,
2021, March 31, 2022, and March 31, 2023, for the assumptions made in calculating these amounts.

(2) Represents annual incentive amounts paid to the named individuals under the MIP. We discuss the MIP in further detail in the section entitled “Management

Incentive Plan.”

(3) For Mr. Shaffer, this amount consists of our 401(k) plan matching contributions in the amount of $19,350; personal use of company-provided automobile in the

amount of $16,117; and spouse/family travel expenses in the amount of $16,088.

(4) For Ms. Funk, this amount consists of our 401(k) plan matching contributions in the amount of $18,864; and personal use of company-provided automobile in

the amount of $13,674.

(5) For Mr. O’Connell, this amount consists of our 401(k) plan matching contributions in the amount of $16,219; personal use of company-provided automobile in

the amount of $1,841; spousal/family travel expenses in the amount of $4,819; and airline membership dues.

(6) For Mr. Tinnemeyer, this amount consists of our 401(k) plan matching contributions in the amount of $16,443; and personal use of company-provided

automobile in the amount of $18,015.

(7) For Mr. Zogby, this amount consists of our 401(k) plan matching contributions in the amount of $15,600; personal use of company-provided automobile in the

amount of $2,308; and club and airline membership dues. This amount also includes a nonrecurring lump sum cash payment of $495,135 that was made to
Mr. Zogby in connection with the termination of his legacy Alpha employment agreement.

Employment Agreements

Severance Letter Agreement with Mr. Shaffer

Effective June 7, 2013, as amended effective June 7, 2017, we entered into a severance letter agreement with Mr. Shaffer,
which provides for severance benefits upon the executive’s termination of employment in connection with a change in
control. The severance letter agreement is for an initial three-year term that is automatically renewed for an additional
one-year term thereafter unless either party gives their respective notice of intent not to renew. Each severance letter
agreement also provides that Mr. Shaffer may not compete with our business or solicit any of our customers or employees
for one year following his termination of employment for any reason. See “Potential Payments upon Termination or Change
in Control” for information about our obligations under the severance letter agreement with Mr. Shaffer to provide certain
payments to Mr. Shaffer upon his termination of employment in connection with our change in control.

Severance Letter Agreement with Ms. Funk and Mr. O’Connell

We entered into a severance letter agreement with Mr. O’Connell on April 1, 2019, and Ms. Funk on April 1, 2022, which
letter agreement provides for severance benefits upon termination of employment in connection with a change in control.
The severance letter agreement is for an initial three-year term that is automatically renewed for an additional one-year
term thereafter unless either party gives their respective notice of intent not to renew. The severance letter agreement also
provides that the executive may not compete with our business or solicit any of our customers or employees for one year
following termination of employment for any reason. See “Potential Payments upon Termination or Change in Control” for
information about our obligations under the severance letter agreement with these executives, to provide certain payments
upon a termination of employment in connection with a change in control.

Employment Agreement and Severance Letter Agreement with Mr. Zogby

Alpha entered into an employment agreement with Mr. Zogby as of October 6, 2008, in connection with his position as
Alpha’s President and Chief Operating Officer. This agreement was renewed effective January 1, 2013, and was amended
effective June 27, 2017. We assumed Mr. Zogby’s amended agreement in connection with our acquisition of Alpha. The
term of Mr. Zogby’s amended agreement was terminated on December 28, 2022. Under the former agreement, Mr. Zogby
was entitled to (1) a base salary of $440,000, (2) a performance bonus of $350,000, based on pre-established objectives
and goals; and (3) participation in our health, accident, and disability insurance benefits as we generally provide to our
executives and pension and retirement benefits as we generally provide to our employees. Mr. Zogby may not compete
with our business or solicit any of our employees for at least one year following the termination of his employment.

As a result of terminating Mr. Zogby’s agreement, we were required to provide Mr. Zogby with a lump sum cash payment
equal to 100% of his base salary then in effect. Such payment amount is reflected in the above Summary Compensation
Table.

We entered into a severance letter agreement with Mr. Zogby on December 31, 2022, which provides for severance
benefits upon his termination of employment in connection with a change in control. The severance letter agreement is for
an initial three-year term that is automatically renewed for an additional one-year term thereafter unless either party gives
their respective notice of intent not to renew. Mr. Zogby’s severance letter agreement also provides that he may not
compete with our business or solicit any of our customers or employees for one year following his termination of
employment for any reason. See “Potential Payments upon Termination or Change in Control” for information about our
obligations under the severance letter agreement with Mr. Zogby to provide certain payments to him upon his termination
of employment in connection with a change in control.

GRANTS OF PLAN-BASED AWARDS
TABLE FOR FISCAL YEAR 2023

Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards($)(2)

Threshold

Target

Maximum

$187,200

$1,248,000 $2,496,000

$ 58,968

$ 393,120 $ 786,240

$ 51,988

$ 346,586 $ 693,173

$ 43,687

$ 291,244 $ 582,489

$ 59,416

$ 396,108 $ 792,216

Grant
Date

Committee
Action
Date(1)

8/12/2022
8/12/2022

5/18/2022
5/18/2022

8/12/2022
8/12/2022

5/18/2022
5/18/2022

8/12/2022
8/12/2022

5/18/2022
5/18/2022

8/12/2022
8/12/2022

5/18/2022
5/18/2022

8/12/2022
8/12/2022

5/18/2022
5/18/2022

All
Other
Stock
Awards:
Number
of
Shares
of
Stock
or Units
(#)(3)

All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)(4)

Exercise
or Base
Price
of
Options
($/Sh)

Grant
Date Fair
Value of
Stock and
Option
Awards
($)(5)

—
36,858

108,673
—

$77.97
—

$24.04
$70.88

—
8,641

—
7,054

—
6,349

—
7,054

25,478
—

$77.97
—

$24.04
$70.88

20,799
—

$77.97
—

$24.04
$70.88

18,719
—

$77.97
—

$24.04
$70.88

20,799
—

$77.97
—

$24.04
$70.88

Name

David M. Shaffer

Andrea J. Funk

Shawn M. O’Connell

Joern Tinnemeyer

Andrew M. Zogby

(1) We made all equity awards to the named executive officers in fiscal year 2023 in accordance with our policy on granting equity awards, which we describe on

page 48.

(2) The amounts shown in the columns are the threshold, target, and stretch goal (maximum) potential amounts that were payable for fiscal year 2023 under the

MIP. No amounts were payable if threshold performance was not achieved for at least one performance goal. See the Summary Compensation Table for a
discussion of the amounts actually earned under the MIP.

(3) Reflects the number of restricted stock units awarded as long-term incentive compensation. We describe this award in the section entitled “Long-Term

Incentive Compensation.”

(4) Reflects the number of stock options awarded as long-term incentive compensation. We describe these awards in the section entitled “Long-Term Incentive

Compensation.”

(5) We calculated these amounts using the provisions of ASC Topic 718. Amounts represent the aggregate grant date fair value of the applicable awards. See

Note 17. Stock-Based Compensation” to our consolidated financial statements set forth in our Annual Report on Form 10-K for the fiscal year ended March 31,
2023, for the assumptions made in calculating these amounts.

OUTSTANDING EQUITY AWARDS
AS OF MARCH 31, 2023

The following table sets forth the outstanding equity awards held by our named executive officers at the end of the 2023
fiscal year. The amounts include additional shares attributable to accumulated dividend equivalents with respect to
unvested equity awards, when applicable to such award.

Option Awards

Stock Awards

Name

David M. Shaffer

Andrea J. Funk

Shawn M. O’Connell

Joern Tinnemeyer

Number of
Securities
Underlying
Unexercised
Options
Exercisable

Number of
Securities
Underlying
Unexercised
Option
Unexercisable

Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unearned
Options

6,456
15,662
40,256
47,015
45,692
63,263
27,338
0

6,527
3,293
2,249
0

3,613
1,371
8,703
13,556
5,317
0

4,129
5,877
8,975
4,529
3,284
0

0
0
0
0
0

31,631(1)
54,677(2)
108,673(3)

0
1,647(1)
4,499(2)
25,478(3)

0
0
0
6,778(1)
10,633(2)
20,799(3)

0
0
0
2,264(1)
6,567(2)
18,719(3)

0
0
0
0
0
0
0
0

0
0
0
0

0
0
0
0
0
0

Option
Exercise
Price
($ Per
Share)

$ 69.85
$ 68.40
$ 83.14
$ 75.17
$ 57.75
$ 82.93
$100.99
$ 77.97

Option
Expiration
Date

5/12/2024
5/12/2025
5/09/2027
8/13/2028
8/12/2029
8/17/2030
8/16/2031
8/12/2032

$ 57.75
$ 75.39
$ 91.81
$ 77.97

8/12/2029
8/17/2030
8/16/2031
8/12/2032

$ 83.14
$ 75.17
$ 57.75
$ 82.93
$100.99
$ 77.97

5/09/2027
8/13/2028
8/12/2029
8/17/2030
8/16/2031
8/12/2032

$ 83.14
$ 75.17
$ 57.75
$ 75.39
$100.99
$ 77.97

5/09/2027
8/13/2028
8/12/2029
8/17/2030
8/16/2031
8/12/2032

Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested

Equity
Incentive
Plan
Awards:
Market
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested

Number of
Shares or
Units of
Stock
That
Have
Not
Vested

Market
Value of
Shares
or Units
of
Stock
That
Have
Not
Vested

4,716(4)
14,286(5)
37,130(6)
19,385(7)

$ 409,695
$1,241.203
$3,225,885
$1,684,162

899(4)
1,905(5)
8,705(6)
4,073(7)

$
78,063
$ 165,500
$ 756,277
$ 353,821

899(4)

78,063

3,061(5)

$ 265,940

7,106(6)

$ 617,380

3,770(7)

$ 327,569

1,235(4)

$ 107,269

2,619(5)

$ 227,529

6,396(6)

$ 555,677

2,328(7)

$ 202,234

Option Awards

Stock Awards

Number of
Securities
Underlying
Unexercised
Options
Exercisable

Number of
Securities
Underlying
Unexercised
Option
Unexercisable

Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unearned
Options

13,556
5,274
0

6,778(1)
10,549(2)
20,799(3)

0
0
0

Option
Exercise
Price
($ Per
Share)

$ 82.93
$100.99
$ 77.97

Option
Expiration
Date

8/17/2030
8/16/2031
8/12/2032

Name

Andrew M. Zogby

Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested

Equity
Incentive
Plan
Awards:
Market
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested

Number of
Shares or
Units of
Stock
That
Have
Not
Vested

Market
Value of
Shares
or Units
of
Stock
That
Have
Not
Vested

899(4)
3,061(5)
7,106(6)
3,740(7)

$
78,063
$ 265,940
$ 617,380
$ 324,918

(1) One-third vested on August 17, 2021, and August 17, 2022. One-third is scheduled to vest August 17, 2023.

(2) One-third vested on August 16, 2022. One third is scheduled to vest on each of August,16, 2023, and August 16, 2024.

(3) One-third is scheduled to vest on each of August 12, 2023, August 12, 2024, and August 12, 2025.

(4) One-fourth vested on August 12, 2020, August 12, 2021, and August 12, 2022. One-fourth is scheduled to vest on August 12, 2023.

(5) One-fourth vested on August 17, 2021, and August 17, 2022. One-fourth will vest on each of August 17, 2023, and August 17, 2024.

(6) One-fourth vested on August 16, 2022. One-fourth is scheduled to vest on each of August 16, 2023, August 16, 2024, and August 16, 2025.

(7) One-fourth is scheduled to vest on each of August 12, 2023, August 12, 2024, August 12, 2025, and August 12, 2026.

OPTIONS EXERCISED AND STOCK VESTED
DURING FISCAL YEAR 2023

The following table sets forth the number of shares acquired upon exercising options and the vesting of stock awards by
our named executive officers during fiscal year 2023.

Name

David M. Shaffer

Andrea J. Funk

Shawn M. O’Connell

Joern Tinnemeyer

Andrew M. Zogby

Option Awards

Stock Awards

Number of Shares
Acquired on Exercise

Value Realized on
Exercise

Number of Shares
Acquired on Vesting(1)

Value Realized on
Vesting(2)

4,352

$ 143,213

43,325

4,638

5,251

5,515

5,838

$3,072,210

$ 333,746

$ 367,332

$ 382,535

$ 421,636

(1) Vesting of TSR performance share units originally granted August 12, 2019, resulted in a payout factor of 0.68. Vesting of EPS performance share units

originally granted on August 12, 2019, resulted in a payout factor of 0.00.

(2) Values are calculated as the product of (a) the number of shares of our common stock underlying the restricted stock units that vested and (b) the closing price

of our common stock on the last trading day prior to the date of vesting. For vesting that occurred on May 15, 2022, the applicable closing price was $62.18.
For vesting that occurred on August 12, 2022, the applicable closing price was $68.90. For vesting that occurred on August 13, 2022, the applicable closing
price was $70.88. For vesting that occurred on August 16, 2022, the applicable closing price was $72.03. For vesting that occurred on August 17, 2022, the
applicable closing price was $71.41. For vesting that occurred on December 7, 2022, the applicable closing price was $74.38. For vesting that occurred on
December 19, 2022, the applicable closing price was $74.18.

POTENTIAL PAYMENTS UPON TERMINATION
OR CHANGE IN CONTROL

As we describe above, Ms. Funk, Mr. O’Connell, Mr. Zogby and Mr. Shaffer each have entered into severance agreements
with us. Under the conditions described below, each of these agreements provides for certain payments upon termination
of employee and a change in control. We describe these payments below.

Ms. Funk and Messrs. O’Connell, Shaffer and Zogby

If we were to terminate the employment of Ms. Funk, or Messrs. O’Connell, Shaffer or Zogby without cause, as defined
below, or if such executive were to resign for good reason, as defined below, during the six-month period prior to a change
in control (and the termination was in connection with the change in control) or during the 24-month period after a change
in control, we would be obligated to pay to the terminating executive the following:

(cid:3) a lump sum cash payment equal to the sum of the executive’s base salary then in effect, and their annual cash

bonus at the target level then in effect for Ms. Funk, Mr. O’Connell or Mr. Zogby (for Mr. Shaffer, the payment is two
times this amount);

(cid:3) for a period of one year for Ms. Funk, Mr. O’Connell, and Mr. Zogby (two years for Mr. Shaffer), payment of cost of

coverage in excess of the amount the executive would pay, as an active employee, for continued participation in our
medical, dental, and vision programs, but such payments will end when the executive becomes eligible to
participate in comparable programs of a subsequent employer;

(cid:3) full acceleration of vesting of outstanding equity awards; and
(cid:3) a pro-rata payment from our annual incentive plan for the fiscal year in which the termination occurs.

“Cause” means, with respect to Ms. Funk, Mr. O’Connell, Mr. Shaffer and Mr. Zogby:

(cid:3) breach of fiduciary duty or duty of loyalty to us;
(cid:3) willful act of material dishonesty with respect to any material matter involving us;
(cid:3) theft or material misuse of our property;
(cid:3) failure to conform in any material respect to our code of conduct;
(cid:3) excessive absenteeism;
(cid:3) conviction of, or plea of guilty or nolo contendere to, a felony or any criminal charge involving moral turpitude or

illegal substance abuse;

(cid:3) continuing neglect of management duties and responsibilities that has a material adverse effect on us;
(cid:3) willful failure to timely report information having a material adverse effect on our business operations to the board or

the executive’s direct supervisor; or

(cid:3) failure to meet our reasonable and achievable documented performance expectations (other than any such failure

resulting from incapacity due to physical or mental illness).

“Good reason” means, with respect to Ms. Funk, Messrs. O’Connell, Shaffer and Zogby, any of the following:
(cid:3) a 10% or more decrease in the executive’s base salary, other than a company-wide reduction in senior

management pay;

(cid:3) a material diminution of the executive’s position, duties, or responsibilities;
(cid:3) any permanent reassignment of such executive to a location greater than 50 miles from the location of his primary

office, unless such new location is closer to his primary residence; or

(cid:3) a material breach of our obligations under the agreement.

Each of the severance letter agreements provides that if any amounts payable, when taken together with payments and
benefits provided to the executive under any other plans, contracts, or arrangements with us, will be subject to any excise tax
imposed under Code Section 4999, then such amounts will be reduced to the extent necessary so that no portion thereof will
be subject to the excise tax, but if the executive would receive in the aggregate greater value (as determined under Code
Section 280G) on an after-tax basis if the amounts were not subject to such reduction, then no such reduction will be made.

In the event of the death or termination for disability of a named executive officer, all outstanding unvested equity awards
of such named executive officer become vested.

Potential Payments Table

The table below reflects the incremental amount of compensation payable to our named executive officers under various
termination and change in control scenarios. The amounts shown below assume that such hypothetical termination or
change in control is effective as of March 31, 2023. These amounts do not include benefits earned or vested as of
March 31, 2023, or benefits provided under insurance or regular programs available to our salaried employees generally.
The actual amounts that are payable upon a named executive officer’s termination of employment can be determined only
at the time of any such event. Due to the number of factors that affect the nature and amount of any benefits provided
upon termination or change in control, any actual amounts paid or distributed may be higher or lower than the amounts set
forth below. Factors that could affect these amounts include, among other things, the time of year the event occurs, our
financial performance, and the age of the named executive officer at the time of the event.

David M. Shaffer

Andrea J. Funk

Shawn M. O’Connell

Severance
Welfare benefits continuation(2)
Value of accelerated stock options(3)
Value of accelerated restricted stock units(3)
Value of accelerated performance share units(4)
Potential Excise Tax Cut-Back

Change in
Control(5)

0
$
0
$
$ 1,093,219
$ 6,560,743
0
$
0
$

Termination
for Disability

0
$
0
$
$ 3,591,532
$ 6,560,743
0
$
N/A
$

Death

0
$
0
$
$ 3,591,532
$ 6,560,743
0
$
N/A
$

Total

$ 7,653,962

$10,152,275

0
$
$
0
$ 245,933
$ 1,353,416
0
$
0
$

0
$
$
0
$ 1,506,774
$ 1,353,416
0
$
N/A

Total

$ 1,599,349

$ 2,860,190

0
$
0
$
$ 212,092
$ 1,288,865
0
$
0
$

0
$
0
$
$
703,828
$ 1,288,865
0
$
N/A
$

Total

$ 1,500,957

$ 1,992,693

Joern Tinnemeyer

Value of accelerated stock options(3)
Value of accelerated restricted stock units(3)
Value of accelerated performance share units(3)

$ 175,729
$ 1,092,429
0
$

$
507,471
$ 1,092,429
0
$

Andrew M. Zogby

Total

$ 1,268,158

$ 1,599,900

0
$
$
0
$ 212,092
$ 1,286,172
0
$
0
$

0
0
$
$
702,281
$ 1,286,172
0
$
N/A
$

Total

$ 1,498,264

$ 1,988,453

Involuntary Termination
Not For Cause/Voluntary
Termination For Good
Reason(1)

Absent
Change in
Control

$ 0
$ 0
$ 0
$ 0
$ 0
N/A

$ 0

$ 0
$ 0
$ 0
$ 0
$ 0
N/A

$ 0

$ 0
$ 0
$ 0
$ 0
$ 0
$N/A

$ 0

$ 0
$ 0
$ 0

$ 0

$ 0
$ 0
$ 0
$ 0
$ 0
$N/A

$ 0

In
connection
with a
Change in
Control

$ 4,380,666
23,030
$
$ 3,591,532
$ 6,560,743
0
$
0
$

$14,555,971

734,583
$
$
17,580
$ 1,506,774
$ 1,353,416
0
$
0
$

$ 3,612,353

810,782
$
17,580
$
$
703,828
$ 1,288,865
0
$
0
$

$ 2,821,055

$
507,471
$ 1,092,429
0
$

$ 1,599,900

860,139
$
12,147
$
$
702,281
$ 1,286,172
0
$
0
$

$ 2,860,399

(1) For the severance payment calculation, and the time and form of such payment, please see “Employment Agreements.”

(2) Present value of welfare benefits continuation. Assumes no increase in the cost of welfare benefits.

(3) Value based on the closing price of our common stock on March 31, 2023, the last trading day of the fiscal year, of $86.88.

(4) All Performance Share Units were vested by their terms on August 12, 2022, and subject to FICA withholdings, and will be fully settled after the mandatory

one-year holding period on August 12, 2023.

(5) Represents solely a change in control where the stockholders receive cash consideration. No amounts are payable or vested solely upon a change in control

where the stockholders receive other than cash consideration.

2023 CEO PAY RATIO

CEO Pay Ratio

As required by applicable SEC rules, we are providing the following information about the relationship of the annual total
compensation of our employees and the annual total compensation of Mr. David M. Shaffer, our President and Chief
Executive Officer (our “CEO”).

For fiscal year 2023:

(cid:3) the median of the annual total compensation of all our employees (other than our CEO) was

$60,150; and

(cid:3) the annual total compensation of our CEO, as reported in the Summary Compensation Table on

page 51, was $7,888,918.

Based on this information for fiscal year 2023, the ratio of the annual total compensation of our CEO to
the median of the annual total compensation of all other employees was 131:1.

Methodology

We took the following steps to identify the median of the annual total compensation of all our employees, as well as to
determine the annual total compensation of our median employee and our CEO.

(cid:3) As of March 31, 2023, our global workforce used for determining the pay ratio was estimated to be 5,112

employees in the U.S and 5,527 internationally.

(cid:3) SEC rules also permit the exclusion of a de minimis number of non-U.S. employees. The exclusions include all
employees located in the following countries: Greece (2), Philippines (8), Chile (6), Morocco (3), United Arab
Emirates (6), Norway (2), Japan (6), Kazakhstan (3), South Africa (6), Ukraine (8), Finland (9), Hungary (10),
Turkey (11), Bulgaria (8), Slovakia (18), Austria (20), Sweden (26), The Netherlands (29), Belgium (39), Malaysia
(63), India (37), Switzerland (39), Spain (47), Italy (55), and Singapore (57). In total, we excluded 518 international
employees, or approximately 4.7% of our total workforce, from the identification of the median employee as
permitted by SEC rules. After exclusions, our global workforce for purposes of calculating the pay ratio was
estimated to be 10,121 employees (5,112 in the U.S. and 5,009 internationally). This population consisted of our
full- time, part-time, and temporary employees employed with us as of the determination date.

(cid:3) To identify the “median employee” from our employee population, we used the amount of “gross wages” for the

identified employees as reflected in our payroll records for the 12-month period beginning April 1, 2022, and ending
March 31, 2023. For gross wages, we generally used the total amount of compensation the employees were paid
before taxes, deductions, insurance premiums, and other payroll withholdings. We did not use any statistical
sampling techniques.

(cid:3) For the annual total compensation of our median employee, we identified and calculated the elements of that

employee’s compensation for fiscal year 2023 in accordance with the requirements of Item 402(c)(2)(x), resulting in
annual total compensation of $60,150.

(cid:3) For the annual total compensation of our CEO, we used the amount reported in the “Total” column of our 2023

Summary Compensation Table on page 51.

The CEO pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on
the methodologies and assumptions described. SEC rules for identifying the median employee and determining the CEO
pay ratio permit companies to employ a wide range of methodologies, estimates and assumptions. As a result, the CEO
pay ratios reported by other companies, which may have employed other permitted methodologies or assumptions and
which may have a significantly different work force structure from ours, are likely not comparable to our CEO pay ratio.

PAY VERSUS PERFORMANCE

Pay Versus Performance

In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street
Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for
our principal executive officer (“PEO”) and non-PEO NEOs and Company performance for the fiscal years listed below.
The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions
for any of the years shown.

Summary
Compensation
Table Total for
David M.
Shaffer¹
($)
(b)

Compensation
Actually Paid
to David M.
Shaffer1,2,3
($)
(c)

Average
Summary
Compensation
Table Total for
Non-PEO
NEOs1
($)
(d)

Average
Compensation
Actually Paid
to Non-PEO
NEOs1,2,3
($)
(e)

7,888,918

10,402,205

2,124,010

2,609,038

6,852,166

2,053,729

1,771,200

799,102

7,019,300

14,975,724

1,817,366

3,475,404

Value of Initial Fixed
$100 Investment
Based on:4

TSR
($)
(f)

180.41

153.31

185.06

Peer Group
TSR
($)
(g)

Net
Income
($ Millions)
(h)

204.65

192.74

195.08

175.8

143.9

143.3

Adjusted
Operating
Earnings
($ Thousands)
(i)

324,241

318,243

284,126

Year

(a)

2023

2022

2021

David M. Shaffer was our PEO for each year presented. The individuals comprising the non-PEO NEOs for each fiscal year are listed below.

2021

2022

2023

Michael J. Schmidtlein
Holger P. Aschke
Shawn O’Connell
Andrew M. Zogby

Michael J. Schmidtlein
Shawn O’Connell
Joern Tinnemeyer
Andrew M. Zogby

Andrea J. Funk
Shawn O’Connell
Joern Tinnemeyer
Andrew M. Zogby

The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation
actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total.

Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the non-PEO NEOs as set forth below. Equity values
are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards and Option Awards column are the totals from the Stock
Awards and Option Awards columns of our 2023 Summary Compensation Table on page 51.

Year

2023

2022
2021

Year

2023

2022

2021

Summary Compensation
Table Total for David M.
Shaffer
($)

7,888,918

6,852,166
7,019,300

Exclusion of Stock
Awards and
Option Awards for
David M. Shaffer
($)

(5,225,000)

(4,665,000)
(4,200,000)

Inclusion of Equity
Values for David
M. Shaffer
($)

7,738,287

(133,437)
12,156,424

Compensation Actually
Paid to David M. Shaffer
($)

10,402,205

2,053,729
14,975,724

Average Summary
Compensation Table
Total for Non-PEO NEOs
($)

Average Exclusion of
Stock Awards and
Option Awards for Non-
PEO NEOs
($)

Average Inclusion of
Equity Values for Non-
PEO NEOs
($)

Average Compensation
Actually Paid to
Non-PEO NEOs
($)

2,124,010

1,771,200

1,817,366

(1,031,250)

(935,496)

(780,000)

1,516,278

(36,602)

2,438,038

2,609,038

799,102

3,475,404

The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following
tables:

Year-End Fair
Value of Equity
Awards Granted
During Year That
Remained
Unvested as of
Last Day of
Fiscal Year for
David M. Shaffer
($)

Change in Fair
Value from Last
Day of Prior
Fiscal Year to
Last Day of Fiscal
Year of Unvested
Equity Awards for
David M. Shaffer
($)

Vesting-Date
Fair Value of
Equity Awards
Granted During
Year that Vested
During Year for
David M. Shaffer
($)

7,136,543

3,636,620

5,664,401

1,157,719

(3,706,864)

5,448,231

—

Change in Fair
Value from Last
Day of Prior
Fiscal Year to
Vesting Date of
Unvested Equity
Awards that
Vested During
Fiscal Year for
David M. Shaffer
($)

(555,975)

(63,193)

1,043,792

Fair Value at
Last Day of
Prior Year of
Equity Awards
Forfeited
During Year for
David M.
Shaffer
($)

Value of
Dividends or
Other Earnings
Paid on Equity
Awards Not
Otherwise
Included for
David M.
Shaffer
($)

—

Total—
Inclusion of
Equity Values
for David M.
Shaffer
($)

7,738,287

(133,437)

12,156,424

Average Year-End Fair
Value of Equity Awards
Granted During Fiscal
Year That Remained
Unvested as of Last Day
of Fiscal Year for Non-
PEO NEOs
($)

Average Change in Fair
Value from Last Day of
Prior Fiscal Year to Last
Day of Fiscal Year of
Unvested Equity Awards
for Non-PEO NEOs
($)

Average Change in Fair
Value from Last Day of
Prior Fiscal Year to
Vesting Date of
Unvested Equity Awards
That Vested During
Fiscal Year for Non-PEO
NEOs
($)

Total—Average Inclusion
of Equity Values for
Non-PEO NEOs
($)

1,408,524

729,250

1,051,948

188,747

(747,578)

1,173,514

(80,993)

(18,274)

212,576

1,516,278

(36,602)

2,438,038

Year

2023

2022

2021

Year

2023

2022

2021

The Peer Group TSR set forth in the table below utilizes the Dow Jones US Electrical Components & Equipment Index, which we also utilize in the stock
performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the fiscal year ended March 31, 2023. The comparison
assumes $100 was invested for the period starting March 31, 2020, through the end of the listed fiscal year in the Company and in the Dow Jones US
Electrical Components & Equipment Index, respectively. Historical stock performance is not necessarily indicative of future stock performance.

5. We determined Adjusted Operating Earnings to be the most important financial performance measure used to link Company performance to Compensation
Actually Paid to our PEO and Non-PEO NEOs in fiscal year 2023. Adjusted Operating Earnings is a non-GAAP measure that adjusts Operating Earnings for
charges that the Company incurs as a result of restructuring activities, impairment of goodwill and indefinite-lived intangibles and other assets, acquisition
activities and those charges and credits that are not directly related to operating unit performance. Please see “Fiscal Year 2023 MIP Targets and Payout” on
page 44 for a description of the adjustments to operating earnings for fiscal year 2023, and “Fiscal Year 2022 MIP Targets and Payout” on page 33 of our 2022
Proxy Statement, for a description of the adjustments to operating earnings for fiscal year 2022. This performance measure may not have been the most
important financial performance measure for fiscal years 2022 and 2021, and we may determine a different financial performance measure to be the most
important financial performance measure in future years.

Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Company Total
Shareholder Return (“TSR”)

The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of
Compensation Actually Paid to our Non-PEO NEOs, and the Company’s cumulative TSR over the three most recently
completed fiscal years.

PEO and Average Non-PEO NEO Compensation Actually Paid

Versus Company TSR

)
s
n
o

i
l
l
i

M
$
(
d
a
P
y

l
l

a
u
t
c
A
n
o

i
t

a
s
n
e
p
m
o
C

15.0

185.06

100.00

3.5

0202

1202

153.31

180.41

10.4

2.1

0.8

2202

Fiscal Year

2.6

3202

)
0
0
1
$
o
t
d
e
x
e
d
n
I
0
2
0
2
E
Y
F
(

R
S
T
y
n
a
p
m
o
C

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

David M. Shaffer Compensation Actually Paid

Average Non-PEO NEO Compensation Actually Paid

EnerSys TSR

Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income

The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of
Compensation Actually Paid to our Non-PEO NEOs, and our Net Income during the three most recently completed fiscal
years.

PEO and Average Non-PEO NEO Compensation Actually Paid

Versus Net Income

)
s
n
o

i
l
l
i

M
$
(
d
a
P
y

l
l

a
u
t
c
A
n
o
i
t
a
s
n
e
p
m
o
C

15.0

143.4

143.9

3.5

1202

2.1

0.8

2202

Fiscal Year

175.8

10.4

2.6

3202

)
s
n
o

i
l
l
i

M
$
(
e
m
o
c
n
I

t
e
N

200

180

160

140

120

100

David M. Shaffer Compensation Actually Paid

Average Non-PEO NEO Compensation Actually Paid

EnerSys Net Income

Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Company -Selected
Measure

The following chart sets forth the relationship between the Compensation Actually Paid to our PEO, the average
Compensation Actually Paid to our Non-PEO NEOs, and our Adjusted Operating Earnings during the three most recently
completed fiscal years.

PEO and Average Non-PEO NEO Compensation Actually Paid

Versus Adjusted Operating Earnings

)
s
n
o

i
l
l
i

M
$
(
d
a
P
y

l
l

a
u
t
c
A
n
o
i
t
a
s
n
e
p
m
o
C

15.0

284,126

3.5

1202

318,243

324,241

350,000

10.4

2.6

3202

300,000

250,000

200,000

150,000

100,000

50,000

2.1

0.8

2202

Fiscal Year

)
s
d
n
a
s
u
o
h
T
$
(

s
g
n
n
r
a
E
g
n
i
t
a
r
e
p
O
d
e
t
s
u
d
A

David M. Shaffer Compensation Actually Paid

Average Non-PEO NEO Compensation Actually Paid

EnerSys Adjusted Operating Earnings

Description of Relationship Between Company TSR and Peer Group TSR

The following chart compares our cumulative TSR over the three most recently completed fiscal years to that of the Dow
Jones US Electrical Components and Equipment Index over the same period.

Comparison of Cumulative TSR of EnerSys and
Dow Jones US Electrical Components & Equipment Index

195.08

185.06

192.74

153.31

204.65

180.41

$250

$200

$150

$100

$50

)
0
0
1
$

o
t

d
e
x
e
d
n
I

0
2
0
2
/
1
3

3
(

R
S
T

$0
3/31/2020

3/31/2021

3/31/2022

3/31/2023

EnerSys TSR

Dow Jones US Electrical Components & Equipment Index TSR

Tabular List of Most Important Financial Performance Measures

The following table presents the financial performance measures that the Company considers to have been the most
important in linking Compensation Actually Paid to our PEO and other NEOs for 2023 to Company performance. The
measures in this table are not ranked.

Most Important
Performance Measures

Adjusted Operating Earnings

Cumulative TSR

Primary Operating Capital

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Review of Related Person Transactions

Our Board has adopted a written policy regarding related person transactions. As a general matter, it is our preference to
avoid or minimize related person transactions. Under this policy, a director or executive officer must promptly report to the
Corporate Secretary or General Counsel any potential transaction in which a Related Person, as defined by Item 404(a) of
Regulation S-K, has or will have a direct or indirect material interest. Pursuant to this policy, EnerSys is not permitted to
consummate or continue the Related Person transaction without the approval or ratification of the Audit Committee or, in
certain situations, by the Chairman of the Audit Committee. Any director interested in a Related Person transaction must
recuse himself from any such vote. The Audit Committee will review all relevant information available to it about the
potential related person transaction and in its sole discretion, may impose such conditions as it seems appropriate on the
Company or the Related Person in connection with the approval of the Related Person Transaction.

Advanced Battery Concepts, LLC

In October 2016, we entered into a non-exclusive license and royalty agreement with Advanced Battery Concepts, LLC
(“ABC”) pursuant to which the parties are collaborating to commercialize a battery product using ABC’s proprietary bi-polar
lead-acid battery technology. ABC is a U.S. based battery technology development company that has developed and
designed a manufacturing process for lead-acid batteries. Mr. Shaffer’s brother is ABC’s chief executive officer. Based
upon public reports, we believe that other competitors have entered into similar licensing arrangements with ABC.
Consistent with our Code of Business Conduct and Ethics and our Related Person Transactions Policy, (a) Mr. Shaffer has
not been involved in discussions related to the business terms or the status of the relationship between EnerSys and ABC,
and (b) the Board reviewed and approved EnerSys negotiating and ultimately entering into this relationship. During fiscal
year 2023 the amount paid to ABC as part of this agreement was $0.

Indemnification

Under Delaware law, our certificate of incorporation and our bylaws contain limitation of liability provisions and provisions
for indemnification of our directors and officers.

In addition, we have entered into an indemnification agreement with each of our directors and officers. Pursuant to this
agreement, we will indemnify, to the fullest extent permitted by the Delaware General Corporation Law, each director or
officer who is, or is threatened to be made, a party to any proceeding by virtue of the fact that such person is or was one of
our directors or officers. Indemnification will be provided for all costs, judgments, penalties, fines, liabilities and amounts
paid in settlement of any such proceeding and for expenses actually and reasonably incurred in connection with any such
proceeding.

Directors and officers of EnerSys are also insured against certain liabilities for their actions by insurance policies obtained
by EnerSys. The aggregate premium for these policies for the fiscal year ended March 31, 2023, specifically for directors
and officers, as individuals, was $712,000.

Indemnity and Expense Agreement

Pursuant to a stock subscription agreement dated March 22, 2002 with certain institutional funds (collectively, the “Morgan
Stanley Funds”) managed by Metalmark Capital LLC, we have agreed that, to the fullest extent permitted by law, none of
such Morgan Stanley Funds as stockholders, or any of their respective partners or other affiliates, or their respective
members, stockholders, directors, managers, officers, employees, agents or other affiliates, or any person or entity who
serves at the request of any such stockholder on behalf of any person or entity as an officer, director, manager, partner or
employee of any person or entity (referred to as indemnified parties), shall be liable to us for any act or omission taken or
suffered by such indemnified party in connection with the conduct of our affairs or otherwise in connection with such
stockholder’s ownership of shares of our common stock, unless such act or omission resulted from fraud, willful
misconduct or gross negligence by such indemnified party or any mistake, negligence, dishonesty or bad faith of any agent
of such indemnified party.

We have also agreed with each Morgan Stanley Fund that, to the fullest extent permitted by law, we will indemnify each of
such indemnified parties for any and all liabilities and expenses (including amounts paid in satisfaction of judgments, in
compromises and settlements, as fines and penalties and legal or other costs and reasonable expenses of investigating or
defending against any claim or alleged claim) of any nature whatsoever, known or unknown, liquidated or unliquidated, that
are incurred by such indemnified party and arise out of or in connection with our affairs, or any indemnified party’s
ownership of shares of our common stock, including acting as a director, manager or officer or its equivalent; provided that
an indemnified party shall be entitled to indemnification only to the extent that such indemnified party’s conduct did not
constitute fraud, willful misconduct or gross negligence.

DELINQUENT SECTION 16(a) REPORTS

Section 16(a) of the Exchange Act requires our officers and directors, and any persons owning more than ten percent of
EnerSys common stock, to file reports of ownership and changes in ownership with the SEC and NYSE. Persons filing
such reports are required by SEC regulation to furnish EnerSys with copies of all such reports filed with the SEC. Based
solely on our review of any copies of such reports received by it, and on written representations from our existing directors
and executive officers that no additional annual statements of beneficial ownership were required to be filed by such
persons. We believe that all statements were timely filed in fiscal year 2023.

SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

Set forth below is certain information concerning the beneficial ownership of our common stock by each director, each
nominee for director, each named executive officer, each holder of more than 5% percent of our common stock and all
directors and named executive officers as a group as of June 8, 2023, the Record Date.

Name

BlackRock, Inc.(2)

The Vanguard Group(3)

Caroline Chan(4)

Hwan-yoon F. Chung(5)

Steven M. Fludder(6)

Andrea J. Funk (7)

Howard I. Hoffen(8)

Arthur T. Katsaros(9)

Gen. Robert Magnus, USMC (Retired)(10)
Tamara Morytko(11)

Shawn M. O’Connell(12)

David M. Shaffer(13)

Joern Tinnemeyer(14)

Paul J. Tufano(15)

Ronald P. Vargo(16)

Rudolph Wynter (17)

Andrew M. Zogby(18)

All current directors and named executive officers as a group

(15 persons)(19)

Number of Shares(1)

4,847,648

4,110,157

Percent(1)

11.8%

10.0%

9,217

37,485

11,393

19,183

44,329

92,922

43,043
288

20,607

386,875

36,207

36,585

27,536

4,271

18,554

788,489

*
*

1.90%

Does not exceed 1% of the class based on 40,959,432 shares of common stock outstanding as of June 8, 2023.

(1) Beneficial ownership has been determined in accordance with Rule 13d-3 under Exchange Act, thereby including, with respect to each director and named

executive officer, options exercisable by such owner or restricted stock units that vest within 60 days of the record date of June 8, 2023. The numbers of
shares reflected in this table have been rounded to the nearest whole number.

(2)

Includes BlackRock Life Limited, Aperio Group, LLC, BlackRock Advisors, LLC, BlackRock (Netherlands) B.V., BlackRock Fund Advisors, BlackRock
Institutional Trust Company, National Association, BlackRock Asset Management Ireland Limited, BlackRock Financial Management, Inc., BlackRock Asset
Management Schweiz AG, BlackRock Investment Management, LLC, Blackrock Investment (UK) Limited, BlackRock Asset Management Canada Limited,
BlackRock (Luxembourg) S.A., BlackRock Investment Management (Australia) Limited, and BlackRock Fund Managers Ltd. Information about BlackRock, Inc.
is derived from its Schedule 13G filed with the SEC on January 26, 2023. The principal business office address is 55 East 52nd Street, New York, NY 10055.

(3)

Information about The Vanguard Group is derived from its Schedule 13G/A filed with the SEC on March 10, 2023. The principal business office address is 100
Vanguard Boulevard, Malvern, PA 19355.

(4) Ms. Chan does not exercise shared voting or investment power over any shares. The number and percentage of shares include 9,216.5199 deferred stock

units, for which Ms. Chan does not have voting and investment power.

(5) Mr. Chung does not exercise shared voting or investment power over any shares. The number and percentage of shares include 37,484.9510 deferred stock

units, for which Mr. Chung does not have voting and investment power. Mr. Chung disclaims beneficial ownership of 4,923.2735 such shares.

(6) Mr. Fludder does not exercise shared voting or investment power over any shares. The number and percentage of shares include 9,216.5199 deferred stock
units, for which Mr. Fludder does not have voting and investment power, and 2,176.5362 vested restricted stock units owned by Mr. Fludder, which are
deferred under the Director Plan, for which Mr. Fludder does not have voting or investment power but exclude 100.1588 unvested restricted stock units owned
by Mr. Fludder deferred under the Director Plan.

(7) Ms. Funk holds shared voting or investment power over 6,560 shares. The number and percentage of shares beneficially owned by Ms. Funk include 554.1918
shares subject to vested performance share units, 12,069 shares subject to vested stock options, but exclude 15,580.8086 unvested restricted stock units and
31,624 shares subject to unvested stock options.

(8) Mr. Hoffen is a Partner of Metalmark and does not exercise shared voting or investment power over any shares. The number and percentage of shares include

42,408.2245 deferred stock units, for which Mr. Hoffen does not have voting and investment power, 1,921.2638 vested restricted stock units, which are
deferred under the Director Plan for which Mr. Hoffen does not have voting or investment power but exclude 89.0578 unvested restricted stock units deferred
under the Director Plan, all of which are beneficially owned by Metalmark. Mr. Hoffen disclaims beneficial ownership of such shares as a result of his
employment arrangement with Metalmark, except to the extent that their pecuniary interest therein is ultimately realized.

(9) Mr. Katsaros holds sole voting and investment power over 1,097 shares. The number and percentage of shares beneficially owned by Mr. Katsaros include

46,092.1815 deferred stock units, for which Mr. Katsaros does not have voting and investment power, and 45,732.3803 vested restricted stock units owned by
Mr. Katsaros, which are deferred under the Director Plan, for which Mr. Katsaros does not have voting or investment power but exclude 156.2499 unvested
restricted stock units owned by Mr. Katsaros deferred under the Director Plan.

(10) Gen. Magnus does not exercise shared voting and investment power over any shares. The number and percentage of shares beneficially owned by Gen.

Magnus include 37,484.9510 deferred stock units, for which Gen. Magnus does not have voting and investment power, and 5,557.7501 vested restricted stock
units owned by Gen. Magnus, which are deferred under the Director Plan, for which Gen. Magnus does not have voting or investment power.

(11) Ms. Morytko does not exercise shared voting and investment power over any shares. The number and percentage of shares beneficially owned by

Ms. Morytko include 287.7500 vested restricted stock units owned by Ms. Morytko, which are deferred under the Director Plan, for which Ms. Morytko does not
have voting or investment power but exclude 41.2500 unvested restricted stock units owned by Ms. Morytko deferred under the Director Plan.

(12) Mr. O’Connell holds shared voting or investment power over 13,070 shares. The number and percentage of shares beneficially owned by Mr. O’Connell

include 2,219.7593 vested performance share units, 5,317 shares subject to vested stock options but exclude 14,836.0072 unvested restricted stock units and
38,210 shares subject to unvested stock options.

(13) Mr. Shaffer holds shared voting or investment power over 129,535 shares. The number and percentage of shares beneficially owned by Mr. Shaffer include
11,658.0553 shares subject to vested performance share units, 245,682 shares subject to vested stock options but exclude 75,517.3171 unvested restricted
stock units and 194,981 shares subject to unvested stock options.

(14) Mr. Tinnemeyer holds shared voting or investment power over 8,650 shares. The number and percentage of shares beneficially owned by Mr. Tinnemeyer
include 762.7618 shares subject to vested performance share units, 26,794 shares subject to vested stock options, 12,577.2127 unvested restricted stock
units and 27,550 shares subject to unvested stock options.

(15) Mr. Tufano does not exercise shared voting and investment power over any shares. The number and percentage of shares beneficially owned by Mr. Tufano

include 25,027.8291 deferred stock units, for which Mr. Tufano does not have voting and investment power, and 11,557.6654 vested restricted stock units
owned by Mr. Tufano, which are deferred under the Director Plan, for which Mr. Tufano does not have voting or investment power but exclude 71.2804
unvested restricted stock units owned by Mr. Tufano deferred under the Director Plan.

(16) Mr. Vargo does not exercise shared voting and investment power of any shares. The number and percentage of shares beneficially owned by Mr. Vargo

include 18,887.5268 deferred stock units, for which Mr. Vargo does not have voting and investment power, and 8,648.5708 vested restricted stock units owned
by Mr. Vargo, which are deferred under the Director Plan, for which Mr. Vargo does not have voting or investment power but exclude 45.2697 unvested
restricted stock units owned by Mr. Vargo deferred under the Director Plan.

(17) Mr. Wynter does not exercise shared voting and investment power of any shares. The number and percentage of shares beneficially owned by Mr. Wynter

include 3,342.5886 deferred stock units, for which Mr. Wynter does not have voting and investment power, and 927.9306 vested restricted stock units owned
by Mr. Wynter, which are deferred under the Director Plan, for which Mr. Wynter does not have voting or investment power but exclude 86.1153 unvested
restricted stock units owned by Mr. Wynter deferred under the Director Plan.

(18) Mr. Zogby holds shared voting or investment power over 2,504 shares. The number and percentage of shares beneficially owned by Mr. Zogby include

2,219.7593 shares subject to vested performance share units, 13,830 shares subject to vested stock options but exclude 14,805.4861 unvested restricted
stock units and 38,126 shares subject to unvested stock options.

(19) Such persons hold shared or sole voting or investment power over 161,416 shares. The number and percentage of shares beneficially owned by such persons

include 17,414.5275 shares subject to vested performance share units, 303,692 shares subject to vested stock options, 76,809.8471 vested restricted stock
units, and 219,944.7723 deferred stock units for which such persons do not have voting and investment power, but exclude 133,906.2136 unvested restricted
stock units, and 330,491 shares subject to unvested stock options.

Proposal No. 4 Advisory Vote to Approve Named Executive Officer Compensation

As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are seeking stockholder input on our
executive compensation as disclosed in this proxy statement. Based upon the results of a non-binding advisory vote on the
issue of the frequency of holding future non-binding advisory votes to approve named executive officer compensation, the
Board has determined that it will include an annual non-binding advisory vote to approve named executive officer
compensation in our proxy materials until the next non-binding advisory vote on the frequency for holding such votes. The
Board and the Compensation Committee actively monitor our executive compensation practices in light of the industry in
which we operate and the marketplace for talent in which we compete. We remain focused on compensating our executive
officers fairly and in a manner that incentivizes high levels of performance while providing the tools necessary to attract
and retain the best talent.

As we describe in the Compensation Discussion and Analysis beginning on page 40, our executive compensation program
is designed to create incentives both for strong operational performance in the current year and for the long-term benefit of
the Company, thereby closely aligning the interests of management with the interests of our stockholders. In evaluating our
executive compensation program, key considerations include:

(cid:2) Our compensation program is based on setting aggressive operating plan goals that are achievable in light of

current market conditions and create stockholder value.

(cid:2) At the executive level, the majority of compensation is equity-based, vests over time and is tied directly to

performance and long-term stockholder value. Stock ownership requirements for our executive officers ensure that
our management team is incentivized to act in the best interests of our stockholders.

(cid:2) We maintain an appropriate balance between base salary and short-and long-term incentive opportunities offered to

the named executive officers.

(cid:2) The Compensation Committee engaged an independent compensation consultant that does not provide services to

management and that had no relationship with management before the engagement.

(cid:2) We believe our executive compensation program results in reasonable and rational compensation decisions,

allowing us to set aggressive goals while not encouraging excessive risk-taking that could be detrimental to our
stockholders.

For these reasons, the Board recommends stockholders vote in favor of the following resolution:

“Resolved, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to

the compensation disclosure rules of the Securities and Exchange Commission, including the compensation
discussion and analysis, the compensation tables and any related material disclosed in this proxy statement, is
hereby APPROVED.”

As an advisory vote, this proposal is not binding upon the Company. However, the Compensation Committee, which is
responsible for designing and administering the Company’s executive compensation program, values the opinions
expressed by stockholders in their vote on this proposal and will consider the outcome of the vote when making future
compensation decisions for named executive officers.

Approval of Proposal No. 4 requires the affirmative vote of a majority of the shares present or represented by proxy and
voting at the Annual Meeting.

The Board of Directors recommends a vote “FOR”
approval of executive compensation

OTHER INFORMATION

Stockholder Proposals or Nominations

Any stockholder who desires to submit a proposal for inclusion in the proxy materials relating to our 2024 Annual Meeting
of Stockholders in accordance with the rules of the SEC must submit such proposal in writing, addressed to EnerSys at
2366 Bernville Road, Reading, Pennsylvania 19605, Attention: Joseph G. Lewis, Senior Vice President, General Counsel,
Chief Compliance Officer, and Secretary, no later than February 22, 2024.

In accordance with our bylaws, a stockholder who desires to propose a matter for consideration at an annual meeting of
stockholders, even if the proposal is not submitted by the deadline for inclusion in our proxy materials, must comply with
the procedures specified in our bylaws, including providing notice thereof in writing, delivered or mailed by first-class United
States mail, postage prepaid, to the Secretary of EnerSys, not less than 90 days nor more than 120 days prior to the
anniversary date of the previous year’s annual meeting. For the 2024 Annual Meeting of Stockholders, this period will
begin on April 5, 2024, and end on May 5, 2024.

In accordance with our bylaws, a stockholder who desires to nominate candidates for election to the Board must comply
with the proceeding specified in the bylaws, including providing proper notice of the nomination in writing, delivered or
mailed by first-class United States mail, postage prepaid, to the Secretary of EnerSys not less than 90 days nor more than
120 days prior to the anniversary date of the previous year’s annual meeting. For the 2024 Annual Meeting of
Stockholders, this period will begin on April 5, 2024, and end on May 5, 2024.

If the stockholder does not also comply with the requirements of Rule 14a-4(c)(2) under the Exchange Act, proxy holders
may exercise discretionary voting authority under proxies that we solicit to vote in accordance with their best judgment on
any such stockholder proposal or nomination.

Reduce Duplicate Mailings

Only one Notice of Internet Availability will be sent to those stockholders who share a single household and who have
consented to receive a single copy of such annual meeting materials. This practice, known as “householding,” is designed
to reduce expenses and conserve natural resources. Householding will continue until you are notified otherwise or until one
or more stockholders at your address revokes consent. If you revoke consent, you will be removed from the householding
program within 30 days of receipt of the revocation. However, if any stockholder residing at such an address desires to
receive a separate Notice of Internet Availability or Proxy Statement and Annual Report in the future, he or she may
telephone our Investor Relations Department at (610) 236-4040 or write to Investor Relations at EnerSys, 2366 Bernville
Road, Reading, Pennsylvania 19605 or by e-mail through the Investors and Governance link at www.enersys.com. If you
are receiving multiple copies of our Notice of Internet Availability, please request householding by contacting Investor
Relations in the same manner. If you are a stockholder of record, you can elect to access future Notices of Internet
Availability electronically following the instructions provided if you vote by Internet or by telephone, or by marking the
appropriate box on your proxy form if one has been requested. If you choose this option, your choice will remain in effect
until you notify us by mail that you wish to resume mail delivery of these documents. If you hold your shares of our
common stock through a bank, broker, or another holder of record, refer to the information provided by that entity for
instructions on how to elect this option.

Other Matters

If any other item or proposal properly comes before the Annual Meeting, including voting on a proposal omitted from this
Proxy Statement pursuant to the rules of the SEC or incident to the conduct of the Annual Meeting, then the proxies will be
voted in accordance with the discretion of the proxy holders, including to vote to adjourn the Annual Meeting for the
purpose of soliciting proxies to vote in accordance with the Board’s recommendation on any of the proposals to be
considered.

Proxy Solicitation Costs

The proxies being solicited hereby are being solicited by the Board of Directors of EnerSys. The cost of soliciting proxies in
the enclosed form will be borne by EnerSys. Officers and regular employees of EnerSys may, but without compensation

other than their regular compensation, solicit proxies by further mailing or personal conversations, or by telephone, telex,
facsimile or electronic means. We will, upon request, reimburse brokerage firms and others for their reasonable expenses
in forwarding solicitation material to the beneficial owners of stock.

Incorporation by Reference

In accordance with SEC rules, notwithstanding anything to the contrary set forth in any of our previous or future filings
under the Securities Act of 1933, as amended, or the Exchange Act, that might incorporate this Proxy Statement or future
filings made by us under those statutes, the information included under the caption “Compensation Committee Report” and
those portions of the information included under the caption “Audit Committee Report” required by the SEC’s rules to be
included therein, shall not be deemed filed with the SEC and shall not be deemed incorporated by reference into any of
those prior filings or into any future filings made by us under those statutes, except to the extent that we specifically
incorporates these items by reference.

Annual Report for Fiscal Year 2023

EnerSys’ Annual Report to the Stockholders for the year ended March 31, 2023, is enclosed herewith. EnerSys’ Annual
Report on Form 10-K for the fiscal year ended March 31, 2023, has been combined with the Annual Report to
Stockholders, as permitted by SEC rules. The Annual Report is furnished to stockholders for their information. No part of
the Annual Report is incorporated by reference herein.

UPON REQUEST OF ANY STOCKHOLDER, A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR FISCAL YEAR
ENDED MARCH 31, 2023, INCLUDING A LIST OF THE EXHIBITS THERETO, REQUIRED TO BE FILED WITH THE
SEC PURSUANT TO RULE 13a-1 UNDER THE SECURITIES EXCHANGE ACT OF 1934, MAY BE OBTAINED,
WITHOUT CHARGE, BY WRITING TO INVESTOR RELATIONS, ENERSYS, 2366 BERNVILLE ROAD, READING,
PENNSYLVANIA 19605, OR BY CALLING ENERSYS INVESTOR RELATIONS DIRECTLY AT (610) 236-4040. EACH
REQUEST MUST SET FORTH A GOOD FAITH REPRESENTATION THAT, AS OF THE RECORD DATE, THE PERSON
MAKING THE REQUEST WAS A BENEFICIAL OWNER OF ENERSYS COMMON STOCK ENTITLED TO VOTE AT THE
MEETING.

BY ORDER OF THE BOARD OF DIRECTORS

Joseph G. Lewis
Senior Vice President, General Counsel,
Chief Compliance Officer & Secretary

APPENDIX A

EnerSys 2023 Equity Incentive Plan

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ENERSYS

2023 EQUITY INCENTIVE PLAN

1. Purpose.

The EnerSys 2023 Equity Incentive Plan (the “Plan”) is intended to provide an incentive to employees and non-employee directors of
EnerSys, a Delaware corporation (the “Company”), and its Subsidiaries to remain in the service of the Company and its Subsidiaries
and to align their interest in the success of the Company with the long-term interests of the Company’s stockholders. The Plan seeks to
promote the highest level of performance by providing an economic interest in the long-term performance of the Company.

2. Definitions.

For purposes of the Plan, the following terms have the following meanings:

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common
control with, such Person. For purposes of this definition, “control” (including with correlative meanings, the terms “controlling,”
“controlled by,” or “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.

“Agreement” means an agreement between the Company and an Eligible Person providing for the grant of an Award hereunder, which
may be in electronic form.

“Award” means any Option, Stock Appreciation Right, Restricted Shares, Bonus Shares, Stock Unit, Performance Share, Performance
Compensation, or other incentive payable in cash or in shares of Common Stock as may be designated by the Compensation
Committee from time to time under the Plan.

“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Act.

“Beneficiary” or “Beneficiaries” means the person(s) designated by a Participant or such Participant’s Permitted Transferee in writing
to the Company to receive payments or other distributions or rights pursuant to the Plan upon the death of such Participant or such
Participant’s Permitted Transferee. If no Beneficiary is so designated or if no Beneficiary is living at the time a payment, distribution,
or right becomes payable or distributable pursuant to the Plan, such payment, distribution, or right shall be made to the estate of the
Participant or a Permitted Transferee thereof. The Participant or Permitted Transferee, as the case may be, shall have the right to
change the designated Beneficiaries from time to time by written instrument filed with the Compensation Committee in accordance
with such rules as may be specified by the Compensation Committee. Notwithstanding anything to the contrary, if Participant is
married, Participant’s current spouse must give express consent prior to Participant designating a non-spouse as their beneficiary.

“Board of Directors” means the Board of Directors of the Company.

“Bonus Shares” mean an Award of shares of Common Stock granted under Section 9 that are fully vested when granted.

“Cashless Exercise” means an exercise of Vested Options outstanding under the Plan through (a) the delivery of irrevocable
instructions to a broker to make a sale of a number of Option Shares that results in proceeds thereon in an amount required to pay the
aggregate exercise price for all the shares underlying such Vested Options being so exercised (and any required withholding tax) and to
deliver such proceeds to the Company in satisfaction of such aggregate exercise price (and any required withholding tax) or (b) any
other surrender to the Company of Option Shares or Vested Options outstanding under the Plan to satisfy the applicable aggregate
exercise price (and any withholding tax) required to be paid upon such exercise.

“Cause” means, with respect to any Participant, (a) “cause” as defined in an employment agreement applicable to the Participant (so
long as any act or omission constituting “cause” for such purpose was willful), or (b) in the case of a Participant who does not have an
employment agreement that defines “cause”: (i) any act or omission that constitutes a material breach by the Participant of any of such
Participant’s obligations under such Participant’s employment agreement (if any) with the Company or any of its Subsidiaries, the
applicable Agreement or any other agreement with the Company or any of its Subsidiaries; (ii) the willful and continued failure or
refusal of the Participant substantially to perform the duties required of such Participant as an employee of the Company or any of its
Subsidiaries, or performance significantly below the level required or expected of the Participant, as determined by the Compensation
Committee; (iii) any willful violation by the Participant of any federal or state law or regulation applicable to the business of the
Company or any of its Subsidiaries or Affiliates, or the Participant’s commission of any felony or other crime involving moral

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turpitude, or any willful perpetration by the Participant of a common law fraud; or (iv) any other misconduct by the Participant that is
materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, the Company or any of
its Subsidiaries or Affiliates.

“Change in Control” means the occurrence of any one of the following (unless otherwise provided in an Agreement):

(a) any Person, including any “group,” as defined in Section 13(d)(3) of 1934 Act, is or becomes the Beneficial Owner, directly or

indirectly, of securities of the Company representing a majority of the combined voting power of the Company’s then Outstanding
securities, excluding any Person who becomes such a Beneficial Owner in connection with a Qualifying Business Combination
described in paragraph (c) below or who becomes such a Beneficial Owner as a result of a change in ownership percentage resulting
solely from an acquisition of securities by the Company; or

(b) the following individuals cease for any reason to constitute a majority of the number of directors then serving on the Board of
Directors: (i) individuals who, as of the Effective Date (as defined below), constitute the Board of Directors and (ii) any new director
whose appointment or election by the Board of Directors or nomination for election by the Company’s stockholders was approved or
recommended by a vote of at least 66-2/3% of the directors then still in office who either were directors at the Effective Date or whose
appointment, election or nomination for election was previously so approved or recommended; or

(c) there is consummated a reorganization, merger or consolidation of the Company with, or sale or other disposition of at least
80% of the assets of the Company in one or a series of related transactions to, any other Person (a “Business Combination”), other than
a Business Combination that would result in the voting securities of the Company Outstanding immediately prior to such Business
Combination continuing to represent (either by remaining Outstanding or by being converted into voting securities of the surviving
entity or any parent thereof) more than 50% of the combined voting power of the securities of the Company or such surviving entity or
any parent thereof Outstanding immediately after such Business Combination (a “Qualifying Business Combination”); or

(d) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is

consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a
sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, more than 50% of the combined
voting power of the Outstanding securities of which is owned by stockholders of the Company in substantially the same proportions as
their ownership of the Company immediately prior to such sale.

“Code” means the Internal Revenue Code of 1986, as amended, including the rules and regulations promulgated thereunder.

“Common Stock” means shares of Common Stock, par value $0.01 per share, of the Company.

“Compensation Committee” means the Compensation Committee of the Board of Directors or a subcommittee thereof formed by the
Compensation Committee to act as the Committee hereunder. The committee shall consist of no fewer than two members of the Board
of Directors, each of whom is, (i) a “non-employee director” within the meaning of Rule 16b-3 under the 1934 Act., and (ii) an
“independent director” for purpose of the rules of the principal U.S. national securities exchange on which the shares are traded, to the
extent required by such rules.

“Competitive Product or Service” means the design, manufacture, importing, development, distribution, marketing, or sale of:

(a) motive power batteries, chargers, products, and accessories (including, without limitation, batteries, chargers and
accessories for industrial forklift trucks, other materials handling equipment, transportation applications, and other electric
powered vehicles or machinery, as well as any software or technology related thereto), and each and every component thereof;

(b)

reserve power batteries, chargers, products, and accessories (including, without limitation, standby batteries and power

supply equipment for wireless and wireline telecommunications applications, such as central telephone exchanges, microwave
relay stations, and switchgear and other instrumentation control systems and those used in utility industries, uninterruptible power
supplies and other applications requiring stored energy solutions including medical, aerospace and defense systems, and outdoor
equipment enclosure solutions, as well as any software or technology related thereto), and each and every component thereof;

(c)

stationary and DC power systems, battery management systems, power control systems, DC Fast Charge systems,

stored energy solutions, renewable energy power systems, energy pipelines, maintenance services, applications for computer and
computer-controlled systems, specialty power applications, software monitoring and control systems, and any products,
accessories, software, technology, consulting services and/or turnkey services relating thereto (including the design, engineering,
installation or service thereof), including each and every component thereof; and/or

(d)

any other product, service, software, or technology development of any kind or type that the Company or any of its
Subsidiaries or Affiliates (i) now makes, designs, manufactures, imports, develops, distributes, markets, researches or sells, or

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(ii) makes, designs, manufactures, imports, develops, distributes, markets, researches or sells at any time during Participant’s
employment with the Company and/or any of its Subsidiaries, such as, for example, lithium-ion, nickel-zinc cells or batteries,
enclosures or lithium products, including but not limited to those used in space, defense, medical, transportation, industrial, or
other stored energy solution applications, and/or hydrogen fuel cells.

“Date of Grant” means the date of grant of an Award as set forth in the applicable Agreement.

“Delay Period” shall have the meaning set forth in Section 24.

“Effective Date” shall have the meaning set forth in Section 25.

“Eligible Persons” means employees and non-employee directors of the Company and its Subsidiaries.

“Fair Market Value” means, with respect to a share of Common Stock on any relevant day, (a) if such Common Stock is traded on a
national securities exchange, the closing price on such day, or if the Common Stock did not trade on such day, the closing price on the
most recent preceding day on which there was a trade, (b) if such Common Stock is quoted on an automated quotation system, the
closing price on such day, or if the Common Stock did not trade on such day, the mean between the closing bid and asked prices on
such day, or (c) in all other cases, the “fair market value” as determined by the Compensation Committee in good faith and using such
financial sources as it deems relevant and reliable (but in any event not less than fair market value within the meaning of Code
Section 409A).

“Good Reason” means, with respect to any Participant, (a) “good reason” as defined in an employment agreement applicable to such
Participant, or (b) in the case of a Participant who does not have an employment agreement that defines “good reason,” a failure by the
Company to pay material compensation due and payable to the Participant in connection with such Participant’s employment.

“Incentive Stock Option” means an Option granted with the intention that it qualify as an “incentive stock option” as that term is
defined in Code Section 422 or any successor provision.

“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder.

“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder.

“Nonqualified Stock Option” means an Option other than an Incentive Stock Option.

“Option” means a right to purchase Common Stock granted pursuant to Section 8.

“Option Price” means, with respect to any Option, the exercise price per share of Common Stock to which it relates.

“Option Shares” means the shares of Common Stock acquired by a Participant upon exercise of an Option.

“Outstanding,” with respect to any share of Common Stock, means, as of any date of determination, all shares that have been issued on
or prior to such date, other than shares repurchased or otherwise reacquired by the Company or any Affiliate thereof, on or prior to
such date.

“Participant” means any Eligible Person who has been granted an Award.

“Performance Compensation” has the meaning set forth in Section 12(b).

“Performance Share” has the meaning set forth in Section 12(a).

“Permanent Disability,” with respect to any Participant who is an employee of the Company or any of its Subsidiaries, shall be defined
in the same manner as such term or a similar term is defined in an employment agreement applicable to the Participant or, in the case
of a Participant who does not have an employment agreement that defines such term or a similar term, means that the Participant is
unable to perform substantially all such Participant’s duties as an employee of the Company or any of its Subsidiaries by reason of
illness or incapacity for a period of more than six months, or six months in the aggregate during any 12-month period, established by
medical evidence reasonably satisfactory to the Compensation Committee.

“Permitted Transferee” means, (a) with respect to outstanding shares of Common Stock held by any Participant, (i) the Participant’s
spouse, children or grandchildren (including any adopted and step children or grandchildren), parents, grandparents or siblings, (ii) a
trust for the benefit of one or more of the Participant or the persons referred to in clause (i), or (iii) a partnership, limited liability
company or corporation in which the Participant or the persons referred to in clause (i) are the only partners, members or shareholders,

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and (b) with respect to Awards, or any other share of Common Stock issued as or pursuant to any Award, held by any Participant,
(i) any Person to whom such Awards or other shares are transferred by will or the laws of descent and distribution or (ii) the Company.

“Person” means an individual, a partnership, a joint venture, a corporation, an association, a trust, an estate or other entity or
organization, including a government or any department or agency thereof.

“Prior Plans” mean the EnerSys 2017 Equity Incentive Plan, as amended and restated from time to time, the EnerSys 2010 Equity
Incentive Plan, as amended and restated from time to time.

“Qualifying Performance Criteria” has the meaning set forth in Section 14(a) of the Plan.

“Restricted Shares” mean shares of Common Stock awarded to a Participant subject to the terms and conditions of the Plan under
Section 9, the rights of ownership of which are subject to restrictions prescribed by the Compensation Committee.

“Retirement,” with respect to any Participant who is an employee of the Company or any of its Subsidiaries, unless otherwise provided
in a company policy or approved by the Committee or Administrator, means resignation or termination of employment (other than
termination for Cause) upon the first to occur of the Participant’s attaining (a) age 65 or (b) age 60 with 10 years of service with the
Company or a Subsidiary (including years of service granted by the Company or a Subsidiary as a result of a merger, acquisition, or
other transaction); further provided that the Compensation Committee may determine in its sole discretion that a resignation or
termination of employment under other circumstances shall be considered “Retirement” for purposes of the Plan.

“Stock Appreciation Right” means a right that entitles the Participant to receive, in cash or Common Stock (as determined by the
Compensation Committee in its sole discretion) value equal to or otherwise based on the excess of (a) the Fair Market Value of a
specified number of shares of Common Stock at the time of exercise over (b) the exercise price of the right, as established by the
Compensation Committee on the Date of Grant.

“Stock Unit” means an Award granted under Section 11 denominated in units of Common Stock.

“Subsidiary” means any corporation in which more than 50% of the total combined voting power of all classes of stock is owned,
either directly or indirectly, by the Company or another Subsidiary.

“Substitute Awards” shall mean Awards granted or shares issued by the Company in assumption of, or in substitution or exchange for,
awards previously granted, or the right or obligation to make future awards, in each case by a company acquired by the Company or
any Subsidiary or with which the Company or any Subsidiary combines.

“Vested Options” means, as of any date of determination, Options that by their terms have vested and are exercisable on such date.

“Vested Restricted Shares” means, as of any date of determination, Restricted Shares that by their terms have vested as of such date.

A “Wrongful Solicitation” shall be deemed to occur when a Participant or former Participant directly or indirectly (except in the course
of such Participant’s employment with the Company), for the purpose of conducting or engaging in a business or enterprise (other than
the Company and its direct or indirect Subsidiaries and other Affiliates) in connection with a Competitive Product or Service:

(a) With respect to the solicitation and/or inducement of Customers: Participant directly or indirectly: (i) solicits or
attempts to solicit any Customer (defined below); or (ii) induces or encourages any Customer to terminate a relationship with the
Company and/or any of its Subsidiaries or otherwise to cease accepting services or products from the Company and/or any of its
Subsidiaries; and/or

(b) With respect to the solicitation and/or inducement of employees: Participant directly or indirectly: (i) solicits, recruits,

encourages (or attempts to solicit, recruit, or encourage), or by assisting others in soliciting, recruiting, or encouraging, any
Company employees or former employees (or those of any of Company’s Subsidiaries) with whom Participant worked, had
business contact, or about whom Participant gained nonpublic or confidential information (“Employees or Former Employees”);
(ii) contacts or communicates with Employees or Former Employees for the purpose of inducing, assisting, encouraging and/or
facilitating them to terminate their employment with the Company and/or any of its Subsidiaries or find employment or work with
another person or entity; (iii) provides or passes along to any person or entity the name, contact and/or background information
about any Employees or Former Employees or provide references or any other information about them; (iv) provides or passes
along to Employees or Former Employees any information regarding potential jobs or entities or persons for which to work,
including but not limited to job openings, job postings, or the names or contact information of individuals or companies hiring
people or accepting job applications; and/or (v) offers employment or work to any Employees or Former Employees (for purposes

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of this subparagraph, “Former Employees” shall refer to employees who are not employed by the Company and/or any of its
Subsidiaries at the time of the attempted recruiting or hiring, but were employed by or working for the Company and/or any of its
Subsidiaries in the three (3) months prior to the time of the attempted recruiting or hiring and/or interference); and/or

(c) With respect to interference with vendors and suppliers: Participant directly or indirectly interferes with the Company’s

relationships (or that of any of its Subsidiaries) with its vendors or suppliers in any way that would impair the Company’s
relationship (or that of any of its Subsidiaries) with such vendors or suppliers, including by reducing, diminishing or otherwise
restricting the flow of supplies, services or goods from the vendors or suppliers to the Company and/or any of its Subsidiaries;
and/or

(d) Within the Restricted Geographic Area (defined below), Participant performs the same or similar responsibilities
Participant performed for the Company and/or any of its Subsidiaries during the twenty-four (24) months prior to Participant’s last
day of employment with the Company and/or any of its Subsidiaries in connection with a Competitive Product or Service.
“Restricted Geographic Area” means the territory (i.e.: (i) country(ies), (ii) state(s), (iii) county(ies), or (iv) city(ies)) in which,
during the twenty-four (24) months prior to Participant’s last day of employment with the Company and/or any of its Subsidiaries,
Participant: (a) provided services on behalf of the Company (or in which Participant supervised, directly or Indirectly, the
servicing activities), and/or (b) solicited Customers or otherwise sold products or services on behalf of the Company (or in which
Participant supervised, directly or indirectly, the solicitation or servicing activities related to such Customers).

For purposes of this definition of “Wrongful Solicitation”, “Customer” means any person(s) or entity(ies) that, within

twenty-four (24) months prior to Participant’s last day of employment with the Company and/or any of its Subsidiaries,
Participant, directly or indirectly (e.g., through employees whom Participant supervised): (a) provided products or services in
connection with the Company’s business (or that of any of its Subsidiaries); and/or (b) provided written proposals concerning
receiving products or services from the Company (and/or any of its Subsidiaries).

3. Administration of the Plan.

Members of the Compensation Committee. The Plan shall be administered, and Awards shall be granted hereunder, by the
Compensation Committee.

Authority of the Compensation Committee. Subject to Section 3(a), the Compensation Committee shall have full discretionary power
and authority, subject to such resolutions not inconsistent with the provisions of the Plan or applicable law as may from time to time be
adopted by the Board, to (a) interpret and administer the Plan and any instrument or agreement entered into under the Plan (including
determining the terms and conditions of all Awards, any vesting schedules, and any waivers or acceleration thereof), (b) establish such
rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan, and (c) make any
determination and take any other action that the Compensation Committee deems necessary or desirable for administration of the Plan.
For the avoidance of doubt, the minimum vesting restriction set forth in Section 6 below does not apply to the Compensation
Committee’s discretion to provide in the terms of an Award or otherwise for accelerated exercisability or vesting of any Award upon
the occurrence of one or more events other than completion of a service period, including an involuntary termination of employment,
Retirement, death, disability or a Change in Control. All questions of interpretation, administration, and application of the Plan shall be
determined in good faith by a majority of the members of the Compensation Committee then in office, except that the Compensation
Committee may authorize any one or more of its members, or any officer of the Company, to execute and deliver documents on behalf
of the Compensation Committee, and the determination of such majority shall be final and binding in all matters relating to the Plan.
Notwithstanding the foregoing, any action or determination by the Compensation Committee specifically affecting or relating to an
Award to a non-employee director shall require the prior approval of the Board of Directors.

(a) To the extent not inconsistent with applicable law, or the rules and regulations of the principal U.S. national securities

exchange on which the shares are traded, the Compensation Committee may (i) delegate to a committee of one or more directors of the
Company any of the authority of the Committee under the Plan, including the right to grant, cancel or suspend Awards and
(ii) authorize one or more executive officers to do one or more of the following with respect to employees who are not directors or
executive officers of the Company (A) designate employees to be recipients of Awards, (B) determine the number of shares subject to
such Awards to be received by such employees and (C) cancel or suspend Awards to such employees; provided that (x) any resolution
of the Committee authorizing such officer(s) must specify the total number of shares subject to Awards that such officer(s) may so
award and (y) the Committee may not authorize any officer to designate himself or herself as the recipient of an Award.

4. Number of Shares Issuable in Connection with Awards.

(a) Limit. As of the Effective Date and subject to adjustment as provided in Section 4(b) and Section 16(a), the maximum
aggregate number of shares of Common Stock that may be issued in connection with Awards granted under the Plan is 3,614,500

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shares, less one (1) Share for every one (1) Share that was subject to an option or stock appreciation right granted after June 8, 2023
and prior to the Effective Date under the EnerSys 2017 Equity Incentive Plan, as amended and restated (the “2017 Plan”) and 1.98
shares for every one (1) Share that was subject to an award other than an option or stock appreciation right granted after June 8, 2023
and prior to the Effective Date under the 2017 Plan. Any shares that are subject to Options or Stock Appreciation Rights shall be
counted against this limit as one (1) Share for every one (1) Share granted, and any shares that are subject to Awards other than
Options or Stock Appreciation Rights shall be counted against this limit as 1.98 shares for every one (1) Share granted. No more than
the maximum aggregate number of shares that may be used under the Plan, as stated in this Section 4(a), may be granted as incentive
stock options. Upon the Effective Date, no further awards may be made from the 2017 Plan, and other Prior Plans have already been
frozen. Notwithstanding the foregoing, shares subject to a tandem SAR shall be charged against the authorized shares only once for the
overall number of shares subject thereto and not for both the number of shares subject to the tandem SAR portion of the Award and the
number of shares subject to the Option portion of the Award. The provisions of the preceding sentence shall apply whether an
exercised tandem SAR is settled in cash or stock, or partly in both.

(b) Replenishment Provisions. Shares subject to any Awards (or awards under any Prior Plan) that expire without being exercised

or that are forfeited, or otherwise terminate or are settled in cash (in whole or in part), such shares shall, to the extent of such
expiration, forfeiture, termination or cash-settlement, be added to the shares available for future grants of Awards under the Plan,
provided that shares subject to a tandem SAR shall be replenished only once for the overall number of shares subject thereto and not
for both the number of shares subject to the tandem SAR portion of the Award and the number of shares subject to the Option portion
of the Award. Shares subject to Awards that have been retained by the Company or tendered by a Participant in payment or satisfaction
of the exercise/purchase price or tax withholding obligation of an Option or Stock Appreciation Right Award shall not be added back
to the overall share limit set forth in paragraph (a) above and shall not be available for future Awards under the Plan. In addition,
shares subject to a Stock Appreciation Right that are not issued in connection with its stock settlement on exercise thereof, and shares
reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of Options, shall in each such case
also not be added back to the overall share limit set forth above and shall not be available for future Awards under the Plan. Shares
subject to Awards that have been retained by the Company or tendered by a Participant in payment or satisfaction of tax withholding
obligations of an Award other than an Option or Stock Appreciation Right (or an award other than an option or stock appreciation right
granted under any Prior Plan) shall be added back to the overall Share limit set forth in paragraph (a) above and shall be available for
future Awards under the Plan. The Company shall not be under any obligation, however, to make any such future Awards. Any shares
that again become available for Awards under the Plan pursuant to this Section 4 shall be added as (i) one share for every one share
subject to Options or Stock Appreciation Rights granted under the Plan or options or stock appreciation rights granted under any Prior
Plan, and (ii) as 1.98 shares for every one share subject to Awards other than Options or Stock Appreciation Rights granted under the
Plan or awards other than options or stock appreciation rights granted under any Prior Plan.

(c) Substitute Awards. Substitute Awards issued by the Company in connection with an acquisition or other corporate transaction

shall not count against the total share limitation or the per-Participant annual limitation, each as set forth in paragraph (a) above, nor
shall shares subject to a Substitute Award be added to the shares available for Awards under the Plan as provided above. Additionally,
in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has
shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or
combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using
the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the
consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards
under the Plan and shall not reduce the shares authorized for grant under the Plan (and shares subject to such Awards shall not be
added to the shares available for Awards under the Plan as provided above); provided that Awards using such available shares shall not
be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or
combination, and shall only be made to individuals who were not employees or directors of the Company or a Subsidiary prior to such
acquisition or combination.

(d) Limit on Awards to Non-Employee Directors. Notwithstanding any other provision of the Plan to the contrary, the aggregate

grant date fair value of shares (computed as of the date of grant in accordance with applicable financial accounting rules) subject to
Awards granted under this Plan, together with any cash compensation earned and paid or payable, for non-employee director-related
services rendered during any calendar year to any one non-employee director shall not exceed $600,000. For the avoidance of doubt,
any compensation that is deferred shall be counted towards the foregoing limit for the year in which the compensation is earned (and
not counted in the year it is paid/settled), and no interest or other earnings on such compensation shall count towards the limit.

(e) Adjustments. The limits provided for in this Section 4 shall be subject to adjustment as provided in Section 16(a).

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5. Eligible Persons.

Awards may be granted or offered only to Eligible Persons. The Compensation Committee shall have the authority to select the
individual Participants to whom Awards may be granted from among such class of Eligible Persons and to determine the number and
form of Awards to be granted to each Participant.

6. Agreement; Minimum Vesting Requirement.

The terms and conditions of each grant or sale of Awards shall be embodied in an Agreement in a form approved by the Compensation
Committee, which shall contain terms and conditions not inconsistent with the Plan and which shall incorporate the Plan by reference.
Each Agreement shall: (a) state the date as of which the Award was granted or sold, and (i) in the case of Options and Stock
Appreciation Rights, set forth the number of Options and Stock Appreciation Rights being granted to the Participant and the applicable
Option Price and/or exercise price (for Stock Appreciation Rights) and expiration date(s), and (ii) in the case of Restricted Shares and
other Awards, set forth the number of Restricted Shares or other Awards being granted or offered to the Participant and, if applicable,
the purchase price or other consideration for such Restricted Shares or other Awards; (b) set forth the vesting schedule (in accordance
with this Section 6); (c) set forth any other terms and conditions established by the Compensation Committee; (d) be signed by the
recipient of the Award and a person designated by the Compensation Committee; and (e) be delivered to the recipient of the Award.

Notwithstanding any other provision of the Plan to the contrary, vesting of equity-based Awards shall be contingent upon the
completion of a service period of at least one year with respect to the Award (excluding, for this purpose, any (i) Substitute Awards,
(ii) shares delivered in lieu of fully vested cash Awards and (iii) Awards to non-employee directors that vest on the earlier of the one
year anniversary of the date of grant or the next annual meeting of stockholders which is at least 50 weeks after the immediately
preceding year’s annual meeting); provided, that, the Compensation Committee may grant equity-based Awards without regard to the
foregoing minimum vesting requirement with respect to a maximum of five percent (5%) of the available share reserve authorized for
issuance under the Plan, pursuant to Section 4(a) (subject to adjustment under Section 16(a)); and provided further, for the avoidance
of doubt, that the foregoing restriction does not apply to the Committee’s discretion to provide for accelerated exercisability or vesting
of any Award, including in cases of retirement, death, disability or a Change in Control, in the terms of the Award or otherwise.

7. Restrictions on Transfer.

(a) Restrictions on Transfer. No Restricted Share, Bonus Share, Performance Share, or Option Share or other share of Common Stock

issued as or pursuant to any Award may be sold, transferred, assigned, pledged, or otherwise encumbered or disposed of (or made the subject
of any derivative transaction) to or with any third party (other than a Permitted Transferee); provided, however, that any such restriction on
transfer shall terminate as to any such share when such share is no longer subject to any term, condition or other restriction under the Plan
(other than Section 7(b)). No Option, Stock Appreciation Right, Stock Unit, or other Award not in the form of a share of Common Stock may
be sold, transferred, assigned, pledged, or otherwise encumbered or disposed of (or made the subject of any derivative transaction) to or with
any third party other than a Permitted Transferee. Each Permitted Transferee (other than the Company) by will or the laws of descent and
distribution or otherwise, of any Award (or share issued in respect thereof) shall, as a condition to the transfer thereof to such Permitted
Transferee, execute an agreement pursuant to which it shall become a party to the Agreement applicable to the transferor.

(b) No Participant will, directly or indirectly, offer, sell, assign, transfer, grant or sell a participation in, create any encumbrance

on or otherwise dispose of any Award or any shares with respect thereto (or solicit any offers to buy or otherwise acquire, or take a
pledge of, any Award or any shares with respect thereto), in any manner that would conflict with or violate the 1933 Act. In no event
may an Award be transferred to a third party financial institution for value.

8. Options.

(a) Terms of Options Generally. The Compensation Committee may grant Options designated as Incentive Stock Options or
Nonqualified Stock Options. Options may be granted to any Eligible Person. Each Option shall entitle the Participant to whom such
Option was granted to purchase, upon payment of the relevant Option Price, one share of Common Stock. Options granted under the
Plan shall comply with the following terms and conditions:

(i) Option Price.

A. The Option Price for shares purchased under an Option shall be as determined by the Compensation Committee, but

shall not be less than the Fair Market Value of the Common Stock as of the Date of Grant, except in the case of Substitute Awards
issued by the Company in connection with an acquisition or other corporate transaction.

B. The Option Price for shares purchased under an Option shall be paid in full to the Company by delivery of

consideration equal to the product of the Option Price and the number of shares purchased, together with any amounts required to be

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withheld for tax purposes under Section 17(c) of this Plan. Such consideration must be paid before the Company will issue the shares
being purchased and must be in a form or a combination of forms acceptable to the Compensation Committee for that purchase, which
forms may (but are not required to) include:

(1) cash;

(2) check or wire transfer;

accordance with any applicable laws or accounting rules;

(3) tendering (either actually or by attestation) shares of Common Stock already owned by the Participant, in

(4) to the extent permitted by applicable law, Cashless Exercise; or

(5) such other consideration as the Compensation Committee may permit in its sole discretion; provided, however,
that any Participant may, at any time, exercise any Vested Option (or portion thereof) owned by such Participant pursuant to a Cashless
Exercise without any prior approval or consent of the Compensation Committee.

(ii) Vesting of Options. Each Option shall vest and become exercisable on such terms and conditions as shall be prescribed by

the Compensation Committee.

(iii) Duration of Options. Subject to earlier termination in accordance with the terms of the Plan and the instrument
evidencing the Option, the maximum term of an Option shall be as established for that Option by the Compensation Committee but in
no event shall be greater than ten years from the Date of Grant.

(iv) Exercise Following Termination of Employment. Upon termination of a Participant’s employment with the Company and

its Subsidiaries, unless otherwise provided in an Agreement or as determined by the Compensation Committee in its sole discretion,
the following terms and conditions shall apply:

A. if the Participant’s employment is terminated by the Company other than for Cause, or as a result of the Participant’s

resignation for Good Reason, or as a result of death, Permanent Disability or Retirement, the Participant (or, in the case of the
Participant’s death, such Participant’s Beneficiary) may exercise any Options, to the extent vested as of the date of such termination, at
any time until the earlier of (I) 90 days (three years, in the case of Retirement) following the date of such termination of employment,
and (II) the expiration of the Option under the provisions of clause (iii) above; and

B. if the Participant’s employment is terminated by the Company for Cause, or as a result of the Participant’s

resignation other than for Good Reason or Retirement, all of the Participant’s Options (whether or not vested) shall expire and be
canceled without any payment therefor as of the date of such termination.

Any Options not exercised within the applicable time period specified above shall expire at the end of such period and be canceled
without any payment therefor.

(v) Extension of Termination Date. An Agreement for an Option may provide that if the exercise of the Option following the

termination of the Participant’s employment for any reason would be prohibited at any time because the issuance of the shares of
Common Stock would violate the registration requirements under the 1933 Act or any other state or federal securities law or the rules
of any securities exchange or interdealer quotation system, the Option shall terminate on the earlier of (A) the expiration of the term of
the Option in accordance with subsection (iv) above or (B) the expiration of a period after termination of the Participant’s employment
that is thirty (30) days after the end of the period during which the exercise of the Option would be in violation of such registration or
other securities law requirements.

(vi) Certain Restrictions. Options granted hereunder shall be exercisable during the Participant’s lifetime only by the

Participant.

(vii) Stockholder Rights; Option and Share Adjustments. A Participant shall have no rights as a stockholder with respect to
any shares of Common Stock issuable upon exercise of an Option until a certificate or certificates evidencing such shares shall have
been issued to such Participant. Except as otherwise provided by the Board of Directors, no adjustment (including an adjustment of an
Option’s exercise price) shall be made with respect to (A) outstanding Options for dividends or other distributions, whether made with
respect to Common Stock or otherwise (except as pursuant to Section 16), or (B) dividends, distributions or other rights in respect of
any share of Common Stock for which the record date is prior to the date upon which the Participant shall become the holder of record
thereof.

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(viii) Incentive Stock Options. Incentive Stock Options granted under this Plan shall be subject to the following additional

conditions, limitations, and restrictions:

A. Incentive Stock Options may be granted only to employees of the Company or a Subsidiary or parent corporation of

the Company, within the meaning of Code Section 424.

B. No Incentive Stock Option may be granted under this Plan after the 10-year anniversary of the date on which the Plan

is adopted by the Board or, if earlier, the date on which the Plan is approved by the Company’s stockholders.

C. The aggregate Fair Market Value (as of the Date of Grant) of the Common Stock with respect to which the Incentive
Stock Options awarded to any Participant first become exercisable during any calendar year may not exceed $100,000. For purposes of
the $100,000 limit, the Participant’s Incentive Stock Options under this Plan and all other plans maintained by the Company and its
Subsidiaries will be aggregated. To the extent any Incentive Stock Option would exceed the $100,000 limit, the Incentive Stock Option
will thereafter be treated as a Nonqualified Stock Option for all purposes. No Incentive Stock Option may be granted to any individual
who owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any
Subsidiary.

D. If the Compensation Committee exercises its discretion to permit an Incentive Stock Option to be exercised by a

Participant more than three months after the termination of a Participant’s employment for any reason (or more than 12 months if the
Participant is permanently and totally disabled, within the meaning of Code Section 22(e)), the Incentive Stock Option will thereafter
be treated as a Nonqualified Stock Option for all purposes. For purposes of this subclause D, a Participant’s employment relationship
will be treated as continuing uninterrupted during any period that the Participant is on military leave, sick leave or another Approved
Leave of Absence if the period of leave does not exceed 90 consecutive days, or a longer period to the extent that the Participant’s right
to reemployment with the Company or a Subsidiary is guaranteed by statute or by contract. If the period of leave exceeds 90
consecutive days and the Participant’s right to reemployment is not guaranteed by statute or contract, the employment relationship will
be deemed to have ceased on the 91st day of the leave.

(ix) Additional Terms and Conditions. Each Option granted hereunder, and any shares of Common Stock issued in
connection with such Option, shall be subject to such additional terms and conditions not inconsistent with the Plan as are prescribed
by the Compensation Committee and set forth in the applicable Agreement.

(b) Unvested Options. Unless otherwise provided in an Agreement, upon termination of a Participant’s employment or service

with the Company and its Subsidiaries, all Options granted to such Participant that have not theretofore vested (and which do not vest
by reason of such termination of employment or service) shall terminate and be canceled without any payment therefor.

9. Restricted Shares and Bonus Shares.

(a) Terms of Restricted Shares and Bonus Shares Generally. Restricted Shares and Bonus Shares awarded by the Compensation

Committee shall not require payment of any consideration by Participants, except as otherwise determined by the Compensation
Committee in its sole discretion.

(b) Restricted Shares and Bonus Shares shall comply with the following terms and conditions:

(i) Vesting. Any Awards of Restricted Shares or Bonus Shares shall vest in accordance with a vesting schedule to be

specified by the Compensation Committee.

(ii) Stockholder Rights. Unless otherwise determined by the Compensation Committee in its sole discretion, a Participant

shall have all rights of a stockholder as to the Restricted Shares and Bonus Shares awarded to such Participant, including the right to
receive dividends (subject to the following paragraph) and the right to vote in accordance with the Company’s Certificate of
Incorporation, subject to the restrictions set forth in the Plan and the applicable Agreement.

(iii) Dividends and Distributions. Any shares of Common Stock or other securities of the Company received by a Participant

as a result of a stock distribution to holders of Restricted Shares or as a stock dividend or dividend equivalent on Restricted Shares or
with respect to a Bonus Share Award shall be subject to the same restrictions as the underlying Award (and shall not be paid unless and
until the underlying Award is vested), and all references to such Award shall be deemed to include such shares of Common Stock,
dividend, dividend equivalent, or other securities.

(iv) Additional Terms and Conditions. Each Restricted Share and Bonus Share granted or offered for sale hereunder shall be

subject to such additional terms and conditions not inconsistent with the Plan as are prescribed by the Compensation Committee and
set forth in the applicable Agreement.

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(c) Unvested Restricted Shares. Unless otherwise provided in an Agreement or determined by the Compensation Committee in its
sole discretion, upon termination of a Participant’s employment or service with the Company and its Subsidiaries, all Restricted Shares
granted or sold to such Participant that have not theretofore vested (and that do not vest by reason of such termination of employment
as may be provided in an Agreement or as determined by the Committee) shall terminate and be canceled without any payment
therefor.

10. Stock Appreciation Rights.

Stock Appreciation Rights may be granted to Participants either alone (“freestanding”) or in addition to or in tandem with other Awards
granted under the Plan and may, but need not, relate to a specific Option granted hereunder. The provisions of Stock Appreciation Rights
need not be the same with respect to each grant or each recipient. Any Stock Appreciation Right granted in tandem with an Option may be
granted at the same time such Option is granted or at any time thereafter before exercise or expiration of such Option. All Stock
Appreciation Rights granted under the Plan shall be granted subject to the same terms and conditions applicable to Nonqualified Stock
Options as set forth in Section 8(a); provided, however, that Stock Appreciation Rights granted in tandem with a previously granted
Option shall have the terms and conditions as such Option. Subject to the provisions of Section 8, the Compensation Committee may
impose such other conditions or restrictions on any Stock Appreciation Right as it shall deem appropriate. Stock Appreciation Rights may
be settled in Common Stock or cash as determined by the Compensation Committee in its sole discretion. Subject to earlier termination in
accordance with the terms of the Plan and the instrument evidencing the Stock Appreciation Right, the maximum term of a Stock
Appreciation Right shall be as established by the Compensation Committee but in no event shall be greater than ten years from the Date of
Grant.

11. Stock Units.

The Compensation Committee may also grant Awards of Stock Units under the Plan. A Stock Unit is an Award that is valued by reference
to a Share (or multiple or partial shares), which value may be paid to the Participant in shares or cash as determined by the Committee in
its sole discretion upon the satisfaction of vesting restrictions as the Committee may establish, which restrictions may lapse separately or
in combination at such time or times, in installments or otherwise, as the Committee may deem appropriate. With respect to each grant of
Stock Units, the Compensation Committee shall determine in its sole discretion the period or periods, including any conditions for
determining such period or periods, during which any restrictions on full vesting shall apply (the “Unit Restriction Period”). The
Compensation Committee may also make any Award of Stock Units subject to the satisfaction of other conditions, including the
attainment of performance goals, or contingencies (“Unit Vesting Condition”), in order for a Participant to receive payment of such Stock
Unit Award, which shall be established by the Compensation Committee at the Date of Grant thereof. The Compensation Committee may
specify that the grant, vesting, or retention of any or all Stock Units shall be a measure based on one or more Qualifying Performance
Criteria selected by the Compensation Committee and specified at the Date of Grant thereof. Awards of Stock Units shall be payable in
Common Stock or cash as determined by the Compensation Committee in its sole discretion. The Compensation Committee may permit a
Participant to elect to defer receipt of payment of all or part of any Award of Stock Units pursuant to rules and regulations adopted by the
Compensation Committee. Unless the Compensation Committee provides otherwise at the Date of Grant of an Award of Stock Units, the
provisions of Section 9 of this Plan relating to the vesting of Restricted Shares shall apply during the Unit Restriction Period or prior to the
satisfaction of any Unit Vesting Condition for such Award.

12. Performance Shares and Performance Compensation.

(a) The Compensation Committee may grant Awards of Performance Shares and designate the Participants to whom Performance

Shares are to be awarded and determine the number of Performance Shares, the length of the performance period and the other terms
and conditions of each such Award. An Award of Performance Shares shall mean a grant of a unit valued by reference to a designated
number of shares, or a unit valued by reference to a designated amount of cash or property other than shares, in either case which value
may be paid to the Participant upon the attainment of performance goals (which may be Qualifying Performance Criteria) and other
terms and conditions, and which may be paid in shares or cash, each as determined and specified by the Compensation Committee.
Notwithstanding satisfaction of any performance goals, the number of shares issued under an Award of Performance Shares may be
adjusted on the basis of such further considerations as the Compensation Committee shall determine, in its sole discretion. The
Compensation Committee, in its sole discretion, may make a cash payment equal to the Fair Market Value of the Common Stock
otherwise required to be issued to a Participant pursuant to an Award of Performance Shares.

13. Other Stock-Based Awards.

In addition to the Awards described in Sections 8 through 12, and subject to the terms of the Plan, the Compensation Committee may
grant other Awards payable in shares of Common Stock under the Plan as it determines to be in the best interests of the Company and
subject to such other terms and conditions as it deems appropriate.

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14. Performance-Based Awards.

(a) Qualifying Performance Criteria. Awards of Options, Restricted Shares, Stock Units, Performance Shares, Bonus Shares,
Performance Compensation and other Awards made pursuant to the Plan may be made subject to the attainment of performance goals
relating to one or more business criteria. For purposes of the Plan, such business criteria shall mean any one or more of the following
performance criteria, either individually, alternatively or in any combination: (a) cash flow; (b) earnings (including, without limitation,
gross margin, earnings before interest and taxes, earnings before taxes, earnings before interest, taxes, depreciation and amortization,
and net earnings); (c) earnings per share; (d) growth in earnings or earnings per share; (e) stock price; (f) return on equity or average
stockholders’ equity; (g) total stockholder return; (h) return on capital; (i) return on assets or net assets; (j) return on investment;
(k) sales, growth in sales or return on sales; (l) income or net income; (m) operating income or net operating income; (n) operating
profit or net operating profit; (o) operating margin; (p) return on operating revenue; (q) economic profit, (r) market share; (s) overhead
or other expense reduction; (t) growth in stockholder value relative to various indices, including, without limitation, the S&P 500 Index
or the Russell 2000 Index, (u) strategic plan development and implementation, (v) net debt, (w) working capital (including components
thereof), and (x) any other measure as determined by the Committee (collectively, the “Qualifying Performance Criteria”). In
determining performance outcomes related to such measures or criteria, the Compensation Committee may provide for the exclusion of
the impact of an event or occurrence which the Compensation Committee determines should appropriately be excluded, including:
(z) asset write-downs or write-ups, (aa) litigation, claims, judgments or settlements, (bb) the effect of changes in tax law, accounting
principles or other such laws or provisions affecting reported results, (cc) accruals for reorganization and restructuring programs, (dd)
any extraordinary, unusual, infrequently occurring or non-recurring event, under applicable accounting provisions or in management’s
discussion and analysis of financial condition and results of operations appearing in the Company’s Annual Report to stockholders for
the applicable year, and (ee) any other events as the Compensation Committee shall deem appropriate. Such performance goals (and
any exclusions) shall be set by the Compensation Committee prior to the earlier of (i) 90 days after the commencement of the
applicable performance period and the expiration of 25% of the performance period.

(b) Any Qualifying Performance Criteria may be used to measure the performance of the Company as a whole or with respect to

any business unit, subsidiary or business segment of the Company, either individually, alternatively or in any combination, and may be
measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous
period results or to a designated comparison group, in each case as specified by the Compensation Committee in the Award. Any
performance goals that are financial metrics may be determined in accordance with U.S. Generally Accepted Accounting Principles
(“GAAP”), in accordance with accounting principles established by the International Accounting Standards Board (“IASB
Principles”), or may be adjusted when established to include or exclude any items otherwise includable or excludable under GAAP or
under IASB Principles. The Compensation Committee shall certify the extent to which any such Qualifying Performance Criteria and
any other material terms under such Award have been satisfied (other than in cases where such relate solely to the increase in the value
of the Common Stock).

15. Certain Forfeitures.

In the event a Participant or former Participant engages in a business or enterprise (other than the Company and its direct or indirect
Subsidiaries and other Affiliates) in connection with a Competitive Product or Service or in Wrongful Solicitation while in the employ
of the Company or a Subsidiary, or during the period of 13 months immediately following termination of such employment, the
following rules shall apply:

(a) all Awards then held by the Participant (whether vested or not) shall be forthwith forfeited without payment or other

compensation of any kind; provided, however, that the Company shall remit to the Participant the lesser of (i) the amount (if any) such
Participant paid for forfeited Awards and (ii) in the case of Restricted Shares or Performance Shares, the Fair Market Value of such
Restricted Shares as of the date of termination;

(b) notwithstanding subclause (a), in the event Vested Restricted Shares or vested Performance Shares were disposed of (for or

without receipt of value) during the period commencing one year prior to the initial engagement in a business or enterprise (other than
the Company and its direct or indirect Subsidiaries and other Affiliates) in connection with a Competitive Product or Service or in
Wrongful Solicitation through the 13-month anniversary of the Participant’s termination of employment with the Company or a
Subsidiary, then, upon written demand by the Company, the Participant or former Participant, as the case may be, shall forthwith remit
to the Company the Fair Market Value of such Vested Restricted Shares or vested Performance Shares, as determined on the date of
disposition, less the amount (if any) paid by the Participant for such shares; and

(c) in the event Option Shares, shares obtained pursuant to the exercise of a Stock Appreciation Right or other shares obtained
pursuant to Awards under the Plan (and not described in subparagraph (b)) were disposed of (for or without receipt of value) during the
period commencing one year prior to the initial engagement in a business or enterprise (other than the Company and its direct or

A-12

indirect Subsidiaries and other Affiliates) in connection with a Competitive Product or Service or in Wrongful Solicitation through the
13-month anniversary of the Participant’s termination of employment with the Company or a Subsidiary, then, upon written demand by
the Company, the Participant or former Participant, as the case may be, shall forthwith remit to the Company the Fair Market Value of
such shares, as determined on the date of disposition, less the Option Price or other amount (if any) paid therefor.

16. Effect of Certain Corporate Changes and Changes in Control.

(a) Dilution and Other Adjustments. In the event of any merger, reorganization, consolidation, recapitalization, dividend or
distribution (whether in cash, shares or other property, other than a regular cash dividend), stock split, reverse stock split, spin-off or
similar transaction or other change in corporate structure affecting the shares or the value thereof, such adjustments and other
substitutions shall be made to the Plan and to Awards in a manner the Compensation Committee deems equitable or appropriate taking
into consideration the accounting and tax consequences, including such adjustments in the aggregate number, class and kind of
securities that may be delivered under the Plan, the maximum number of shares that may be issued pursuant to Incentive Stock
Options, in the number, class, kind and option or exercise price of securities subject to outstanding Awards granted under the Plan
(including, if the Compensation Committee deems appropriate, the substitution of similar options to purchase the shares of, or other
awards denominated in the shares of, another company); provided, however, that the number of shares subject to any Award shall
always be rounded down to a whole number. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan.
The Compensation Committee shall determine whether cash, additional Awards or other securities or property shall be issued or paid
in lieu of fractional shares of Common Stock or whether any fractional shares should be rounded, forfeited or otherwise eliminated.

(b) Change in Control. Unless otherwise provided by the Committee either by the terms of the Award Agreement applicable to
any Award or by resolution adopted prior to the occurrence of a Change in Control, (i) in the event of a Change in Control, upon and
subject to the consummation of such Change in Control, all Awards shall be assumed and continued or an equivalent award substituted
by the Company’s successor or a parent or subsidiary of such successor (provided, however, that performance-based Awards shall be
subject to the terms of the individual Award Agreement); and in the event a Participant terminates employment for Good Reason, or is
terminated by the Company without Cause on or within two years after a Change in Control described in this subsection (i), Awards
not previously vested shall immediately become vested; or (ii) in the event of a Change in Control where the successor (or parent or
subsidiary thereof) does not assume, continue or substitute the outstanding Awards, then subject to the consummation of the Change in
Control, all Awards shall accelerate and vest in full (with performance-based Awards subject to the terms of the individual Award
Agreements), and all Awards shall be cancelled in exchange for a payment in cash in an amount based on the Fair Market Value of the
shares of Common Stock subject to the Award, less any Option Price, which amount may be zero if applicable.

17. Miscellaneous.

(a) No Rights to Grants or Continued Employment or Engagement. No Participant shall have any claim or right to receive grants
of Awards under the Plan, even if Awards have been granted to Participant in the past. Awards should not be construed or interpreted
in any way as a component of a Participant’s base salary for services performed on behalf of the Company or any Subsidiary or other
Affiliate thereof, and employees of the Company or any Subsidiary or other Affiliate thereof are not required, as a condition of their
employment, to accept any Awards. Neither the Plan nor any action taken or omitted to be taken hereunder shall be deemed to create or
confer on any Participant any right to be retained in the employ or as a director of the Company or any Subsidiary or other Affiliate
thereof, or to interfere with or to limit in any way the right of the Company or any Subsidiary or other Affiliate thereof to terminate the
employment or other retention of such Participant at any time.

(b) Right of Company to Assign Rights and Delegate Duties. The Company shall have the right to assign any of its rights and
delegate any of its duties hereunder to any of its Affiliates. The terms and conditions of any Award under the Plan shall be binding
upon and shall inure to the benefit of the personal representatives, heirs, legatees, and permitted successors and assigns of the relevant
Participant and the Company.

(c) Tax Withholding. The Company and its Subsidiaries may require the Participant to pay to the Company the amount of any

taxes that the Company is required by applicable federal, state, local or other law to withhold with respect to the grant, vesting, or
exercise of an Award. The Company shall not be required to issue any shares of Common Stock under the Plan until such obligations
are satisfied in full. The Compensation Committee may in its sole discretion permit or require a Participant to satisfy all or part of such
Participant’s tax withholding obligations by (1) paying cash to the Company, (2) having the Company withhold a number of shares of
Common Stock that would otherwise be issued to the Participant (or become vested in the case of Restricted Shares), having a Fair
Market Value equal to the tax withholding obligations, (3) surrendering a number of shares of Common Stock the Participant already
owns, having a Fair Market Value equal to the tax withholding obligations, or (4) entering into such other arrangement as is acceptable
to the Compensation Committee in its sole discretion. The value of any shares withheld or surrendered may not exceed the maximum
amount of tax permitted to be withheld that will not result in adverse financial accounting consequences to the Company (and

A-13

otherwise shall comply with Company policy, subject to the discretion of the Compensation Committee). The Company and its
Subsidiaries shall also have the right to deduct from any and all cash payments otherwise owed to a Participant any federal, state, local
or other taxes required to be withheld with respect to the Participant’s participation in the Plan.

(d) No Restriction on Right of Company to Effect Corporate Changes. The Plan shall not affect in any way the right or power of
the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the
Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of stock or of options,
warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect
the Common Stock or the rights thereof or that are convertible into or exchangeable for Common Stock, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.

(e) 1934 Act. Notwithstanding anything contained in the Plan or any Agreement to the contrary, if the consummation of any

transaction under the Plan would result in the possible imposition of liability on a Participant pursuant to Section 16(b) of the 1934
Act, the Compensation Committee shall have the right, in its sole discretion, but shall not be obligated, to defer such transaction to the
extent necessary to avoid such liability.

(f) Securities Laws. Notwithstanding any other provision of the Plan, the Company shall have no obligation to issue or deliver any

shares of Common Stock under the Plan or make any other distribution of benefits under the Plan unless, in the judgment of the
Compensation Committee, such issuance, delivery or distribution would comply with all applicable laws (including, without limitation,
the requirements of the 1933 Act and 1934 Act or the laws of any state or foreign jurisdiction) and the applicable requirements of any
securities exchange or similar entity.

(g) Severability. If any provision of the Plan or any Award is determined to be invalid, illegal or unenforceable in any jurisdiction, or

as to any Person, or would disqualify the Plan or any Award under any law deemed applicable by the Compensation Committee, such
provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended
without, in the Compensation Committee’s determination, materially altering the intent of the Plan or the Award, such provision shall be
stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.

(h) Dividend Equivalents. Subject to the provisions of the Plan and any Award Agreement, the recipient of an Award other than
an Option or Stock Appreciation Right may, if so determined by the Compensation Committee, be entitled to receive, once vested or
on a further deferred basis, amounts equivalent to cash, stock or other property dividends on shares (“Dividend Equivalents”) with
respect to the number of shares covered by the Award, as determined by the Compensation Committee, in its sole discretion. The
Committee may provide that the Dividend Equivalents (if any) shall be deemed to have been reinvested in additional shares or
otherwise reinvested Notwithstanding the foregoing, Dividend Equivalents shall be subject to restrictions and risk of forfeiture to the
same extent as the underlying Award and shall not be paid until and unless the underlying Award vests.

(i) Foreign Employees and Consultants. Awards may be granted to Participants who are foreign nationals or employed or

providing services outside the United States, or both, on such terms and conditions different from those applicable to Awards to
employees or consultants providing services in the United States as may, in the judgment of the Compensation Committee, be
necessary or desirable in order to recognize differences in local law or tax policy. The Compensation Committee also may impose
conditions on the exercise or vesting of Awards in order to minimize the Company’s obligation with respect to tax equalization for
employees or consultants on assignments outside their home country.

(j) Recoupment. By accepting an Award hereunder, the Participant acknowledges that the Award (and any shares subject to such

Award) is subject to the terms and conditions of the Company’s clawback/recoupment policy, as it may be amended from time to time.
Further, this provision also applies to any policy adopted by any exchange on which the securities of the Company are listed pursuant
to Section 10D of the 1934 Act. To the extent any such policy requires the repayment of incentive-based compensation received by a
Participant, whether paid pursuant to an Award granted under this Plan or any other plan of incentive-based compensation maintained
in the past or adopted in the future by the Company, by accepting an Award under this Plan, the Participant agrees to the repayment of
such amounts to the extent required by such policy and applicable law.

(k) Prohibition on Repricing. As provided in Section 18 below, other than pursuant to Section 16(a), the Compensation Committee
shall not without the approval of the Company’s stockholders (a) lower the option price per Share of an Option (or base price of a stock
appreciation right) after it is granted, (b) cancel an Option or Stock Appreciation Right when the exercise price per Share exceeds the
Fair Market Value of one Share in exchange for cash or another Award (other than in connection with a Change in Control), or (c) take
any other action with respect to an Option or Stock Appreciation Right that would be treated as a repricing under the rules and
regulations of the principal U.S. national securities exchange on which the shares are listed.

A-14

18. Amendment.

The Board of Directors may at any time and from time to time alter, amend, suspend, or terminate the Plan in whole or in part. No
termination or amendment of the Plan may, without the consent of the Participant to whom any Awards shall previously have been
granted, adversely affect the rights of such Participant in such Awards. In addition, no amendment of the Plan shall, without the
approval of the stockholders of the Company:

(a) change the class of individuals eligible for awards under the Plan;

(b) increase the maximum number of shares of Common Stock for which Awards may be granted under this Plan;

(d) reduce the Option Price of outstanding Options;

(e) cancel an Option or Stock Appreciation Right in exchange for cash when the exercise or grant price per share exceeds the Fair

Market Value of one share of Common Stock or take any action with respect to an Option or Stock Appreciation Right that would be
treated as a repricing under the rules and regulations of the principal securities exchange on which the Common Stock is traded; or

(f) extend the term of this Plan.

19. Termination of the Plan.

The Plan shall continue until terminated by the Board of Directors pursuant to Section 18 or as otherwise set forth in this Plan, and no
further Awards shall be made hereunder after the date of such termination. Unless earlier terminated, the Plan shall terminate ten
(10) years after the Effective Date, except that no incentive stock option may be granted after the 10th anniversary of the date the Board
approves the Plan (provided the awards granted before the Plan’s expiration date shall continue in accordance with their terms).

20. Conditions to Issuance of Shares.

(a) The Company shall be under no obligation to any Participant to register for offering or resale or to qualify for exemption under

the 1933 Act, or to register or qualify under the laws of any state or foreign jurisdiction, any shares of Common Stock, security or
interest in a security paid or issued under, or created by, the Plan, or to continue in effect any such registrations or qualifications if
made. The Company may issue certificates for shares with such legends and subject to such restrictions on transfer and stop-transfer
instructions as the Compensation Committee deems necessary or desirable for compliance by the Company with federal, state, and
foreign securities laws. The Company may also require such other action or agreement by the Participants as may from time to time be
necessary to comply with applicable securities laws.

(b) To the extent the Plan or any instrument evidencing an Award provides for issuance of stock certificates to reflect the issuance

of shares of Common Stock, the issuance may be effected on a noncertificated basis, to the extent not prohibited by applicable law or
the applicable rules of any stock exchange.

21. Headings; Number; Gender.

The headings of sections and subsections herein are included solely for convenience of reference and shall not affect the meaning of
any of the provisions of the Plan.

Words used herein in the singular form shall be construed as being used in the plural form, as appropriate in the relevant context, and
vice versa. Pronouns used herein of one gender shall be construed as referring to either or both genders, as appropriate in the relevant
context.

22. Limited Waiver.

The waiver by the Company of any of its rights under the Plan with respect to any Participant, whether express or implied, shall not
operate or be construed as a waiver of any other rights the Company has with respect to such Participant or of any of its rights with
respect to any other Participant.

23. Governing Law.

The Plan and all rights hereunder shall be governed by and construed in accordance with the laws of the State of Delaware without
reference to rules relating to conflicts of law.

A-15

24. Compliance with Code Section 409A.

(a) This Plan is intended to comply and shall be administered in a manner that is intended to comply with Code Section 409A and

shall be construed and interpreted in accordance with such intent. To the extent that an Award or the payment, settlement, or deferral
thereof is subject to Code Section 409A, the Award shall be granted, paid, settled, or deferred in a manner that will comply with Code
Section 409A, including regulations or other guidance issued with respect thereto, except as otherwise determined by the
Compensation Committee. Any provision of this Plan that would cause the grant of an Award or the payment, settlement, or deferral
thereof to fail to satisfy Code Section 409A shall be amended to comply with Code Section 409A on a timely basis, which may be
made on a retroactive basis, in accordance with regulations and other guidance issued under Code Section 409A.

(b) Notwithstanding anything in the Plan to the contrary, the receipt of any benefits under this Plan as a result of a termination of
employment shall be subject to satisfaction of the condition precedent that the Participant undergo a “separation from service” within
the meaning of Treas. Reg. § 1.409A-1(h) or any successor thereto. In addition, if a Participant is deemed to be a “specified employee”
within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provisions of any benefit
that is required to be delayed pursuant to Code Section 409A(a)(2)(B), such payment or benefit shall not be made or provided prior to
the earlier of (i) the expiration of the six month period measured from the date of the Participant’s “separation from service” (as such
term is defined in Treas. Reg. § 1.409A-1(h)), or (ii) the date of the Participant’s death (the “Delay Period”). Within ten (10) days
following the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section (whether they would have
otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Participant in
a lump sum, and any remaining payments and benefits due under this Plan shall be paid or provided in accordance with the normal
payment dates specified for them herein. Furthermore, the payments to be made to a Participant in accordance with this Plan shall be
treated as a right to a series of separate payments pursuant to Section 409A of the Code.

25. Effective Date.

The Plan shall become effective (the “Effective Date”) upon approval by the stockholders of the Company.

A-16

APPENDIX B

EnerSys 2023 Annual Report on Form 10-K

B-1

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

È Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the fiscal year ended March 31, 2023
or

‘ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from

to
Commission file number: 001-32253

ENERSYS

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

23-3058564
(I.R.S. Employer
Identification No.)

2366 Bernville Road
Reading, Pennsylvania 19605
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: 610-208-1991

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Common Stock, $0.01
par value per share

Trading Symbol

ENS

Name of each exchange
on which registered

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. È Yes ‘ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ‘ Yes È No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934

during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. È Yes ‘ No

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of

Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes È No ‘

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
Non-accelerated filer
Emerging growth company ‘

È
‘ (Do not check if a smaller reporting company)

‘
Accelerated filer
Smaller reporting company ‘

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any

new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ‘
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public accounting firm that prepared or issued
its audit report. È

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the

filing reflect the correction of an error to previously issued financial statements. ‘ Yes È No

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation

received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ‘

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ‘ Yes È No

State the aggregate market value of the voting and non-voting common equity held by non-affiliates at October 2, 2022: $2,374,598,929 (1) (based upon its
closing transaction price on the New York Stock Exchange on October 2, 2022).
(1) For this purpose only, “non-affiliates” excludes directors and executive officers.

Common stock outstanding at May 19, 2023:

40,909,454 Shares of Common Stock

Portions of the registrant’s definitive Proxy Statement for its Annual Meeting of Stockholders to be held on or about August 3, 2023 are incorporated by

reference in Part III of this Annual Report.

DOCUMENTS INCORPORATED BY REFERENCE

B-2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 (the “Reform Act”) provides a safe harbor for forward-
looking statements made by or on behalf of EnerSys. EnerSys and its representatives may, from time to time,
make written or verbal forward-looking statements, including statements contained in EnerSys’ filings with the
Securities and Exchange Commission (“SEC”) and its reports to stockholders. Generally, the inclusion of the
words “anticipate,” “believe,” “expect,” “future,” “intend,” “estimate,” “will,” “plans,” or the negative of such
terms and similar expressions identify statements that constitute “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934
and that are intended to come within the safe harbor protection provided by those sections. All statements
addressing operating performance, events, or developments that EnerSys expects or anticipates will occur in the
future, including statements relating to sales growth, earnings or earnings per share growth, and market share, as
well as statements expressing optimism or pessimism about future operating results, are forward-looking
statements within the meaning of the Reform Act. The forward-looking statements are and will be based on
management’s then-current beliefs and assumptions regarding future events and operating performance and on
information currently available to management, and are applicable only as of the dates of such statements.

Forward-looking statements involve risks, uncertainties and assumptions. Although we do not make forward-
looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their
accuracy. Actual results may differ materially from those expressed in these forward-looking statements due to a
number of uncertainties and risks, including the risks described in this Annual Report on Form 10-K and other
unforeseen risks. You should not put undue reliance on any forward-looking statements. These statements speak
only as of the date of this Annual Report on Form 10-K, even if subsequently made available by us on our
website or otherwise, and we undertake no obligation to update or revise these statements to reflect events or
circumstances occurring after the date of this Annual Report on Form 10-K.

Our actual results may differ materially from those contemplated by the forward-looking statements for a number
of reasons, including the following factors:

•

economic, financial and other impacts of the COVID-19 pandemic, global supply chain disruptions,
and labor shortages;

general cyclical patterns of the industries in which our customers operate;

global economic trends, competition and geopolitical risks, including impacts from the ongoing
conflict between Russia and Ukraine and the related sanctions and other measures, changes in the rates
of investment or economic growth in key markets we serve, or an escalation of sanctions, tariffs or
other trade tensions between the U.S. and China or other countries, and related impacts on our global
supply chains and strategies;

the extent to which we cannot control our fixed and variable costs;

the raw materials in our products may experience significant fluctuations in market price and
availability;

certain raw materials constitute hazardous materials that may give rise to costly environmental and
safety claims;

legislation regarding the restriction of the use of energy or certain hazardous substances in our
products;

risks involved in our operations such as supply chain issues, disruption of markets, changes in import
and export laws, environmental regulations, currency restrictions and local currency exchange rate
fluctuations;

our ability to raise our selling prices to our customers when our product costs increase;

the extent to which we are able to efficiently utilize our global manufacturing facilities and optimize
our capacity;

B-3

•

changes in macroeconomic and market conditions and market volatility, including inflation, interest
rates, the value of securities and other financial assets, transportation costs, costs and availability of
electronic components, lead, plastic resins, steel, copper and other commodities used by us, and the
impact of such changes and volatility on our financial position and business;

competitiveness of the battery markets and other energy solutions for industrial applications throughout
the world;

our timely development of competitive new products and product enhancements in a changing
environment and the acceptance of such products and product enhancements by customers;

our ability to adequately protect our proprietary intellectual property, technology and brand names;

litigation and regulatory proceedings to which we might be subject;

our expectations concerning indemnification obligations;

changes in our market share in the business segments where we operate;

our ability to implement our cost reduction initiatives successfully and improve our profitability;

quality problems associated with our products;

our ability to implement business strategies, including our acquisition strategy, manufacturing
expansion and restructuring plans;

our acquisition strategy may not be successful in locating advantageous targets;

our ability to successfully integrate any assets, liabilities, customers, systems and management
personnel we acquire into our operations and our ability to realize related revenue synergies, strategic
gains, and cost savings may be significantly harder to achieve, if at all, or may take longer to achieve;

potential goodwill impairment charges, future impairment charges and fluctuations in the fair values of
reporting units or of assets in the event projected financial results are not achieved within expected
time frames;

our debt and debt service requirements which may restrict our operational and financial flexibility, as
well as imposing unfavorable interest and financing costs;

our ability to maintain our existing credit facilities or obtain satisfactory new credit facilities or other
borrowings;

adverse changes in our short and long-term debt levels under our credit facilities;

our exposure to fluctuations in interest rates on our variable-rate debt;

our ability to attract and retain qualified management and personnel;

our ability to maintain good relations with labor unions;

credit risk associated with our customers, including risk of insolvency and bankruptcy;

our ability to successfully recover in the event of a disaster affecting our infrastructure, supply chain, or
our facilities;

delays or cancellations in shipments;

occurrence of natural or man-made disasters or calamities, including health emergencies, the spread of
infectious diseases, pandemics, vaccine mandates, outbreaks of hostilities or terrorist acts, or the effects
of climate change, and our ability to deal effectively with damages or disruptions caused by the
foregoing; and

•

the operation, capacity and security of our information systems and infrastructure.

This list of factors that may affect future performance is illustrative, but by no means exhaustive. Accordingly,
all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

B-4

EnerSys
Annual Report on Form 10-K
For the Fiscal Year Ended March 31, 2023

Index

PART I
Cautionary Note Regarding Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1.
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2.
Item 3.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases

Page

B-3
B-6
B-15
B-30
B-31
B-31
B-31

of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-32
Item 6.
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-34
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . .
B-34
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . .
B-54
B-57
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8.
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . B-114
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-114
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-115
Item 9C. Disclosure regarding foreign jurisdictions that prevent inspections . . . . . . . . . . . . . . . . . . . . . . B-115
PART III
Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-116
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-116
Item 12. Security Ownership of Certain Beneficial Owners and Management Related Stockholder

Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-116
Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . B-117
Item 14. Principal Accounting Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-117
PART IV
Item 15. Exhibits, Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-118
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-122

B-5

ITEM 1. BUSINESS

Overview

PART I

EnerSys (the “Company,” “we,” or “us”) is a world leader in energy storage and power solutions for industrial
applications. We design, manufacture, and distribute energy systems solutions, motive power batteries, specialty
batteries, battery chargers, power equipment, battery accessories and outdoor thermal equipment enclosures
solutions for a global customer base. Energy Systems, which combine power conversion, power distribution,
energy storage, and thermally managed enclosures, are used in the telecommunication, broadband, data center,
and utility industries, for uninterruptible power and numerous other applications requiring stored energy
solutions. Motive Power batteries and chargers are utilized in electric forklift trucks, automated guided vehicles,
and other industrial electric powered vehicles. Specialty batteries are used in aerospace and defense applications,
large over the road trucks, and premium automotive and medical. We also provide aftermarket and customer
support services to over 10,000 customers in more than 100 countries through a network of distributors,
independent representatives, and our internal sales force around the world.

The Company’s chief operating decision maker, or CODM (the Company’s Chief Executive Officer), reviews
financial information for purposes of assessing business performance and allocating resources, by focusing on
the lines of business on a global basis. The Company identifies the following as its three operating segments,
based on lines of business:

The Company’s three reportable segments, based on lines of business, are as follows:

• Energy Systems—uninterruptible power systems, or “UPS” applications for computer and computer-
controlled systems used in data centers, as well as telecommunications systems, switchgear and
electrical control systems used in industrial facilities and electric utilities, large-scale energy storage
and energy pipelines. Energy Systems also includes highly integrated power solutions and services to
broadband, telecom, renewable and industrial customers, as well as thermally managed cabinets and
enclosures for electronic equipment and batteries.

• Motive Power—power for electric industrial forklifts used in manufacturing, warehousing and other
material handling applications as well as mining equipment, diesel locomotive starting and other rail
equipment; and

•

Specialty—premium batteries for starting, lighting and ignition applications in premium automotive
and large over-the-road trucks, energy storage solutions for satellites, military land vehicles, aircraft,
submarines, tactical vehicles, as well as medical devices and equipment.

See Note 23 to the Consolidated Financial Statements for information on segment reporting.

Fiscal Year Reporting

In this Annual Report on Form 10-K, when we refer to our fiscal years, we state “fiscal” and the year, as in
“fiscal 2023”, which refers to our fiscal year ended March 31, 2023. The Company reports interim financial
information for 13-week periods, except for the first quarter, which always begins on April 1, and the fourth
quarter, which always ends on March 31. The four quarters in fiscal 2023 ended on July 3, 2022, October 2,
2022, January 1, 2023, and March 31, 2023, respectively. The four quarters in fiscal 2022 ended on July 4,
2021, October 3, 2021, January 2, 2022, and March 31, 2022, respectively.

History

EnerSys and its predecessor companies have been manufacturers of industrial batteries for over 125 years.
Morgan Stanley Capital Partners teamed with the management of Yuasa, Inc. in late 2000 to acquire from Yuasa

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Corporation (Japan) its reserve power and motive power battery businesses in North and South America. We
were incorporated in October 2000 for the purpose of completing the Yuasa, Inc. acquisition. On January 1,
2001, we changed our name from Yuasa, Inc. to EnerSys to reflect our focus on the energy systems nature of our
businesses.

In 2004, EnerSys completed its initial public offering (the “IPO”) and the Company’s common stock commenced
trading on the New York Stock Exchange, under the trading symbol “ENS”.

Key Developments

There have been several key stages in the development of our business, which explain to a significant degree our
results of operations over the past several years.

In March 2002, we acquired the reserve power and motive power business of the Energy Storage Group of
Invensys plc. (“ESGI”). Our successful integration of ESGI provided global scale in both the reserve and motive
power markets. The ESGI acquisition also provided us with a further opportunity to reduce costs and improve
operating efficiency.

Between fiscal years 2003 through 2023, we made thirty-four acquisitions around the globe. There were no
acquisitions in fiscal 2023, 2022 and 2021 but we completed the acquisition of NorthStar, headquartered in
Stockholm, Sweden in fiscal 2020 and of Alpha in fiscal 2019.

Our Customers

We serve over 10,000 customers in over 100 countries, on a direct basis or through our distributors. We are not
overly dependent on any particular end market. Our customer base is highly diverse, and no single customer
accounts for more than 10% of our revenues.

Our Energy Systems customers consist of both global and regional customers. These customers are in diverse
markets including telecommunication and broadband services, data centers, electric utilities, emergency lighting,
renewable energy, and industrial utilities.

Our Motive Power products are sold to a large, diversified customer base. These customers include material
handling equipment dealers, forklift and heavy truck original equipment manufacturers (“OEMs”) and end users
of such equipment. End users include manufacturers, distributors, warehouse operators, retailers, airports, mine
operators and railroads.

Our Specialty products are utilized in transportation, primarily in premium automotive and large over-the-road
trucking, aerospace and defense and medical markets. The products are sold globally to OEMs, distribution
partners, vehicle fleets and directly to government entities such as the United States of America, Germany and
the United Kingdom.

Distribution and Services

We distribute, sell and service our products throughout the world, principally through company-owned sales and
service facilities, as well as through independent manufacturers’ representatives. Our company-owned network
allows us to offer high-quality service, including preventative maintenance programs and customer support. Our
warehouses and service locations enable us to respond quickly to customers in the markets we serve. We believe
that the extensive industry experience of our sales organization results in strong long-term customer
relationships.

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Manufacturing and Raw Materials

We manufacture and assemble our products at manufacturing facilities located in the Americas, EMEA and Asia.
With a view toward projected demand, we strive to optimize and balance capacity at our battery manufacturing
facilities globally, while simultaneously minimizing our product cost. By taking a global view of our
manufacturing requirements and capacity, we believe we are better able to anticipate potential capacity
bottlenecks and equipment and capital funding needs.

The primary raw materials used to manufacture our products include lead, plastics, steel and copper. We
purchase lead from a number of leading suppliers throughout the world. Because lead is traded on the world’s
commodity markets and its price fluctuates daily, we periodically enter into hedging arrangements for a portion
of our projected requirements to reduce the volatility of our costs.

Competition

The industrial energy storage market is highly competitive both among competitors who manufacture and sell
industrial energy storage solutions and batteries and among customers who purchase industrial energy solutions.
Our competitors range from development stage companies to large domestic and international corporations.
Certain of our competitors produce energy storage products utilizing technologies or chemistries different from
our own. We compete primarily on the basis of reputation, product quality, reliability of service, delivery lead
time and price. We believe that our products and services are competitively priced.

Energy Systems

We compete principally with East Penn Manufacturing, Exide Technologies (Stryten), Fiamm, SAFT, New
Power, C&D Technologies Inc., Vertiv, ABB, Amphenol, Eltek (a Delta Group company), as well as Chinese
producers.

Motive Power

Our primary global competitors in traditional lead-acid include East Penn Manufacturing, Exide Technologies
(Stryten), Hoppecke, Eternity, Midac, Sunlight and TAB, as well as a number of domestic Chinese
manufacturers. Additionally, while lithium-ion battery technology in the motive power space has traditionally
been relegated to smaller material handling applications, we have seen the entrance of a number of companies
into larger battery types, acting as lithium cell packagers or integrators of cells sourced primarily from Asia. The
integrators include forklift original equipment manufacturers either directly or through partnership with other
entities.

Specialty

We compete globally within the transportation, aerospace and defense markets and specialized lithium
technologies used in these critical applications. Our thin plate pure lead (TPPL) technology is a significant player
in the applications using absorbed glass materials (AGM). Our major competitors in AGM technology are
Clarios, East Penn Manufacturing, Exide Technologies (Stryten), Fiamm, Banner and Atlas. In the Aerospace
and Defense specialized markets our main competitors are Eagle Picher and SAFT.

Warranties

Warranties for our products vary geographically and by product type and are competitive with other suppliers of
these types of products. Generally, our Energy Systems product warranties range from one to twenty years, our
Motive Power product warranties range from one to five years and from one to four years for Specialty
transportation batteries. The length of our warranties is varied to reflect regional characteristics and competitive
influences. In some cases, our warranty period may include a pro rata period, which is typically based around the
design life of the product and the application served. Our warranties generally cover defects in workmanship and
materials and are limited to specific usage parameters.

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Intellectual Property

We have numerous patents and patent licenses in the United States and other jurisdictions but do not consider
any one patent to be material to our business. From time to time, we apply for patents on new inventions and
designs, but we believe that the growth of our business will depend primarily upon the quality of our products
and our relationships with our customers, rather than the extent of our patent protection.

We believe we are the leader in TPPL technology. We believe that a significant capital investment would be
required by any party desiring to produce products using TPPL technology for our markets.

We own or possess exclusive and non-exclusive licenses and other rights to use a number of trademarks in
various jurisdictions. We have obtained registrations for many of these trademarks in the United States and other
jurisdictions. Our various trademark registrations currently have durations of approximately 10 to 20 years,
varying by mark and jurisdiction of registration and may be renewable. We endeavor to keep all of our material
registrations current. We believe that many such rights and licenses are important to our business by helping to
develop strong brand-name recognition in the marketplace.

Seasonality

Our business generally does not experience significant quarterly fluctuations in net sales as a result of weather or
other trends that can be directly linked to seasonality patterns, although transportation and power electronics can
experience seasonality in colder months. Despite that, historically our fourth quarter is our best quarter with
higher revenues and generally more working days while our second quarter is the weakest due to the summer
holiday season in Western Europe and North America.

Product and Process Development

Our product and process development efforts are focused on the creation of new energy storage products, and
integrated power systems and controls. We allocate our resources to the following key areas:

•

the design and development of new products;

optimizing and expanding our existing product offering;

• waste and scrap reduction;

•

production efficiency and utilization;

capacity expansion without additional facilities; and

quality attribute maximization.

Employees

At March 31, 2023, we had approximately 11,350 employees. Of these employees, approximately 26% were
covered by collective bargaining agreements. Employees covered by collective bargaining agreements that expire
in the next twelve months were approximately 9% of the total workforce. The average term of these agreements
is 2 years, with the longest term being 4.0 years. We consider our employee relations to be good. We did not
experience any significant labor unrest or disruption of production during fiscal 2023.

Information about Our Executive Officers

As of May 24, 2023, our executive officers are:

David M. Shaffer, age 58, President and Chief Executive Officer. Mr. Shaffer has been a director of EnerSys and
has served as our President and Chief Executive Officer since April 2016. Prior thereto, he served as President

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and Chief Operating Officer since November 2014. From January 2013 through October 2014, he served as our
President-EMEA. From 2008 to 2013, Mr. Shaffer was our President-Asia. Prior thereto he was responsible for
our telecommunications sales in the Americas. Mr. Shaffer joined EnerSys in 2005 and has worked in various
roles of increasing responsibility in the industry since 1989. Mr. Shaffer received his Masters of Business
Administration degree from Marquette University and his Bachelor of Science degree in Mechanical Engineering
from the University of Illinois.

Andrea J. Funk, age 53, Executive Vice President and Chief Financial Officer. Ms. Funk joined EnerSys in
December 2018 and served as Vice President Finance, Americas. She was promoted to Executive Vice
President & Chief Financial Officer effective April 1, 2022. Ms. Funk holds a Master of Business Administration
degree from The Wharton School of Business, and a Bachelor of Science degree in accounting from Villanova
University and was a certified public accountant. Previously, Ms. Funk served as Chief Financial Officer and
then Chief Executive Officer of Cambridge Lee Industries LLC from 2010-2018. Prior, she served in positions of
increasing responsibility at Carpenter Technology, Arrow International, Rhone-Poulenc Rorer, Bell Atlantic
Corporation and Ernst & Young. Since July 2017, Ms. Funk has served on the Board of Directors of Crown
Holdings Inc., whose shares are traded on the New York Stock Exchange, and is a member of their Audit and
Compensation Committees.

Joern Tinnemeyer, age 50, Senior Vice President and Chief Technology Officer. Mr. Tinnemeyer has served as
Senior Vice President and Chief Technology Officer since October 2017. He joined EnerSys in August 2016 as
its Vice President and Chief Technology Officer. Mr. Tinnemeyer is responsible for global engineering, global
quality, and technology development. His primary focus of expertise includes energy storage systems, system
design optimization, safety topologies and control theory. He has worked on some of the most advanced lithium
battery packs for major automotive OEMs. He currently also serves as Chairman of NaatBatt, North America’s
foremost organization to foster advanced energy storage systems. Mr. Tinnemeyer studied applied mathematics
and electrical engineering at the University of Toronto and holds a MSc in Astronautics and Space Engineering.

Shawn M. O’Connell, age 50, President, Motive Power Global. Mr. O’Connell has served as our President,
Motive Power Global since July 2020. Prior thereto, from April 2019 through July 2020, he served as our
President, Motive Power, our Vice President–Reserve Power Sales and Service for the Americas from February
2017, and Vice President of EnerSys Advanced Systems from December 2015 to January 2017. Mr. O’Connell
joined EnerSys in 2011, serving in various sales and marketing capacities in several areas of our business.
Mr. O’Connell received his Master of Business Administration degree in International Business from the
University of Redlands, CA and his Bachelor of Arts degree in English Literature from the California State
University, San Bernardino. Mr. O’Connell is a veteran of the U.S. Army’s 82nd Airborne Division
(Paratroopers) where he served as a Signals Intelligence Analyst, Spanish Linguist, and held a Top-Secret
security clearance.

Andrew M. Zogby, age 63, President, Energy Systems Global. Mr. Zogby has served as President, Energy
Systems Global since July 2020. Prior thereto, from April 2019, he served as President, Energy Systems–
Americas. He joined EnerSys upon completion of the acquisition of Alpha Technologies in December 2018.
Mr. Zogby served as President of Alpha Technologies since 2008 and brings over 30 years of experience in
global broadband, telecommunications and renewable energy industries. He has held corporate leadership
positions with several leading technology firms. Mr. Zogby received his Bachelor of Science degree in Industrial
and Labor Relations from LeMoyne College, Syracuse, New York, and his Master of Business Administration
degree from Duke University’s Fuqua School of Business. He is active in the US Chamber of Commerce, and
serves on the C_TEC, Chamber Technology Engagement Center Committee.

Environmental Matters and Climate Change Impacts

We are committed to the protection of the environment and train our employees to perform their duties
accordingly. In the manufacture of our products throughout the world, we process, store, dispose of and

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otherwise use large amounts of hazardous materials, especially lead and acid. As a result, we are subject to
extensive and evolving environmental, health and safety laws and regulations governing, among other things: the
generation, handling, storage, use, transportation and disposal of hazardous materials; emissions or discharges of
hazardous materials into the ground, air or water; and the health and safety of our employees. In addition, we are
required to comply with the regulation issued from the European Union called Registration, Evaluation,
Authorization and Restriction of Chemicals or “REACH”. Under the regulation, companies that manufacture or
import more than one ton of a covered chemical substance per year are required to register it in a central database
administered by the European Chemicals Agency. The registration process requires the submission of
information to demonstrate the safety of chemicals as used and could result in significant costs or delay the
manufacture or sale of our products in the European Union. Additionally, industry associations and their member
companies, including EnerSys, have scheduled meetings with the European Union member countries to advocate
for their support of an exemption for lead compounds. Compliance with these laws and regulations results in
ongoing costs. Failure to comply with these laws and regulations, or to obtain or comply with required
environmental permits, could result in fines, criminal charges or other sanctions by regulators. From time to time,
we have had instances of alleged or actual noncompliance that have resulted in the imposition of fines, penalties
and required corrective actions. Our ongoing compliance with environmental, health and safety laws, regulations
and permits could require us to incur significant expenses, limit our ability to modify or expand our facilities or
continue production and require us to install additional pollution control equipment and make other capital
improvements. In addition, private parties, including current or former employees, can bring personal injury or
other claims against us due to the presence of, or their exposure to, hazardous substances used, stored,
transported or disposed of by us or contained in our products.

Environmental and safety certifications

Seventeen of our facilities in the Americas, EMEA and Asia are certified to ISO 14001 standards. ISO 14001 is a
globally recognized, voluntary program that focuses on the implementation, maintenance and continual
improvement of an environmental management system and the improvement of environmental
performance. Seven facilities in EMEA and Asia are certified to ISO 45001 standards. The ISO 45001 is a
globally recognized occupational health and safety management systems standard.

Climate change impacts

The potential impact of climate change on our operations is uncertain. The changing climate may result in new
and erratic weather patterns, increases in the frequency or severity of storms, increased and decreased
temperatures and rising sea levels. As discussed elsewhere in this Annual Report on Form 10-K, including in
Item 1A. Risk Factors, our operating results are significantly influenced by weather, and major changes in
historical weather patterns could have a notable impact on our future operating results. For example, if climate
change results in drier weather and more accommodating temperatures over a significant period of time, we may
be able to increase our productivity, which could positively impact our revenues and gross margins. Conversely,
if climate change results in a greater amount of rainfall, snow, ice or other less accommodating weather
conditions, we could experience reduced productivity, which could negatively impact our revenues and gross
margins. Further, while an increase in severe weather events, such as hurricanes, tropical storms, blizzards and
ice storms, can create a greater amount of emergency restoration service work (an area of potential revenue
generation), it often also can result in delays or other negative consequences for our manufacturing operations, or
challenges to the consistent delivery of materials from our supply chain or of our products to distributors, which
could negatively impact our financial results. Climate change may also affect the conditions in which we operate,
and in some cases, expose us to potentially increased liabilities associated with those environmental conditions.
Concerns about climate change could also result in new regulations, regulatory actions or requirements to invest
in energy efficiency, any of which could result in increased costs associated with our operations. We are aware of
the proposed rules on climate disclosure released by the SEC in March of last year. While we are following the
progression of the rule, we are pleased to note that we are preparing to meet many of its conditions in advance.
We released our inaugural, comprehensive Sustainability Report, which was aligned with GRI and SASB

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standards. Included in this report, we announced key, measurable environmental, social, and governance (“ESG”)
goals and objectives aimed at advancing progress in sustainability, reducing our environmental footprint and
creating an inclusive and empowering workplace for all employees. We also issued our inaugural Task Force of
Climate Related Financial Disclosures (TCFD) Report in December 2022. As part of our growing sustainability
commitment, we announced during fiscal year 2022 that we joined the United Nations Global Compact, Alliance
to Save Energy, the U.S. Department of Energy’s Better Plants Program (through which we committed to
reducing our energy intensity by 25% over the next 10 years (from a calendar year 2020 baseline)), the United
Nations CEO Water Mandate and the CEO Action for Diversity & Inclusion. In 2022, we also submitted our
CDP Climate Change disclosure to maintain transparency with our stakeholders and track our progress towards a
low carbon society. We intend to continue to conduct a climate risk analysis in the coming year and have
completed an analysis of our Scope 1 and 2 emissions. Additionally, we have taken the initial steps to quantify
our Scope 3 emissions as we understand that identifying the impacts associated with our production, distribution,
and use of our products is critical for further climate risk mitigation.

We strive to operate our facilities in a manner that protects the environment and the health and safety of our
employees, customers and communities. We have established required sustainability training for identified
employees and incorporate climate and other sustainability considerations into our formal decision-making
processes. We have implemented company-wide environmental, health and safety policies and practices, which
includes monitoring, training and communication of these policies.

Quality Systems

We utilize a global strategy for quality management systems, policies and procedures, the basis of which is the
ISO 9001:2015 standard, a worldwide recognized quality standard. We believe in the principles of this standard
and reinforce the same by requiring mandatory compliance for all manufacturing, sales and service locations
globally that are registered to the ISO 9001 standard. We also focus on specific plant certifications such as
AS9100 (Aerospace), ISO13485:2016 (Medical Devices), ISO/TS 22163:2017 (Rail), IATF16949:2018
(Automotive). We have also acquired our first Lithium-Ion product certification in accordance with ISO 26262
(Product Safety).

This strategy enables us to provide consistent quality products and services to meet our customers’ needs.

Human Capital Management

EnerSys is committed to a comprehensive, cohesive and positive employee experience. We consider talent
acquisition, development, engagement and retention critical key drivers of our business success.

Our Board of Directors, through the Compensation Committee and the Nominating and Corporate Governance
Committee, retains oversight of our human capital management process, including demographics, talent
development, employee retention, material aspects of employee compensation, as well as diversity and inclusion
and recruitment efforts. The Nominating and Corporate Governance Committee reports on human capital matters
at each regularly scheduled Board of Directors meeting. The most significant human capital measures, objectives
and initiatives include the following:

Health, Safety, and Wellness: Our fundamental responsibility as an employer is to provide a safe and healthy
workplace for all our employees. This undertaking is explained further in our Safety and Health Policy. Our
health and safety programs are designed around global standards with appropriate variations addressing the
multiple jurisdictions and regulations, specific hazards and unique working environments of our manufacturing
and production facilities, service centers and headquarter operations. Above all else, we are dedicated to the
safety and well-being of our employees.

Diversity, Equity, Inclusion and Belonging: We strive to create a work environment that emphasizes respect,
fairness and dignity and that does not tolerate discrimination or harassment. Individuals are evaluated based on

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merit, without concern for race, color, religion, national origin, citizenship, marital status, gender (including
pregnancy), gender identity, gender expression, sexual orientation, age, disability, veteran status, or other
characteristics protected by law. We are committed to providing equal opportunities to every member of our
workforce. In addition to following all applicable local laws and regulations, for fiscal year 2022, we have also
formed an executive steering committee, joined, among other things, the CEO Action for Diversity and Inclusion,
and funded additional staffing to further support these efforts.

Philanthropy and Volunteerism: Over the past fiscal year we created an executive level committee dedicated to
encouraging and supporting charitable efforts by EnerSys globally. EnerSys is strongly committed to being an
outstanding corporate citizen on a global basis in all the countries and communities where we do business. This
commitment is reflected in a strong ethic for charitable contributions, endorsement of community activities,
encouraging employees to give freely of their own time to serve on boards or committees in many organizations
and supporting educational programs in schools and colleges.

We created several committees to assist the company in its philanthropic endeavors that support the communities
in which we work. Additionally, we regularly sponsor volunteer events and fundraising campaigns, to encourage
our employees to give back to our communities, a commitment that we further support by offering employees
paid time off for charitable volunteering.

Training and Career Management: Employees receive regular development feedback through quarterly 1:1
reviews with their manager, which encourages open dialogues to identify and cultivate skills and opportunities.
We encourage our leaders to facilitate effective conversations and measure the effectiveness of these
conversations by regularly surveying our employees. In addition to training and development opportunities, all
new employees are required to participate in seminars to introduce them to the EnerSys business, our strategy,
our culture and philosophies. We encourage all our employees to engage in ongoing training, professional
development and educational advancement programs. Through our established EnerSys Academy, we provide
employees worldwide with resources to expand their knowledge on a broad scope of relevant topics to promote
their growth and development.

Compensation and Benefits: To attract, retain and recognize talent, we aim to ensure merit-based, compensation
practices and strive to provide competitive compensation and benefit packages to our workforce. We provide
employee wages that are consistent with employee positions, skill levels, experience, knowledge and geographic
location. We align our executives’ and eligible employees’ annual bonus opportunity and long-term equity
compensation with our stockholders’ interests by linking realizable pay with company financial performance. In
addition, we perform annual pay equity studies to evaluate our global pay practices across the organization.

Environmental, Social and Governance

At EnerSys, we understand that an effective business strategy must also be one that evaluates and addresses
environmental and social risk factors as well as opportunities to leverage sustainable operations and ethical
behavior as a means of driving business value. To that end, we have been integrating the fundamental values of
ESG into our everyday operations and future business strategies. Our Sustainability Team leads ESG our efforts
with respect to climate change management, product sustainability, operations, supply chain management.

Sustainability, reliability and resilience are at the core of who we are and what we do at EnerSys every day. Our
products help tackle some of our world’s most significant challenges, be it addressing the impacts of climate
change, decarbonization, efficient and affordable distribution of goods, grid reliability, telecommunications, and
even medical safety. Our batteries and energy storage solutions are part of building a resilient, low-carbon future.

Sustainability at EnerSys is, however, about more than just the benefits and impacts of our products. Our
commitment encompasses essential ESG issues fundamental to how we manage our own operations. Minimizing
our environmental footprint and providing a safe and inclusive workplace for our employees are top priorities for

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EnerSys. Being an excellent neighbor and good corporate citizen in the communities where we work and live is
extremely important as well. Our products facilitate positive environmental, social and economic impacts around
the world. We believe that the power systems and energy management sector have a key role to play in finding
innovative solutions to address global climate change. Our climate change policy underscores our goal to carry
out all business activities in a sustainable manner. Our environmental policies and practices aim to protect,
conserve, and sustain the world’s natural resources, as well as to protect our customers and the communities in
which we live and operate. As one example of this, we offer a complete battery recycling program to assist our
customers in preserving our environment and comply with recycling and waste disposal regulations.

Relationships between EnerSys and our suppliers must be based on mutual respect and integrity. Our purchasing
and quality teams strive to maintain the highest standards and principles of business ethics, courtesy and
competence in dealings and transactions with suppliers. Our code of supplier conduct reflects our commitment to
the values of honesty, integrity, respect, and responsibility. We expect our suppliers will share and embrace our
values, as well as our commitment to regulatory compliance.

We have an ESG steering committee, which includes members of senior management and funded additional
staffing to further support the ongoing development of our ESG program. Our Board of Directors oversees our
programs related to matters of corporate responsibility and sustainability performance, including climate change,
through the Nominating and Corporate Governance Committee. We publish an annual Sustainability Report,
including ESG data, as well as a Task Force on Climate Related Financial Disclosures report and submission to
the CDP. We are members of United Nations Global Compact, Alliance to Save Energy, the U.S. Department of
Energy’s Better Plants Program (through which we committed to reducing our energy intensity by 25% over the
next 10 years (from a calendar year 2020 baseline)), and the United Nations CEO Water Mandate. These actions
demonstrate the strength and commitment to sustainability throughout the organization worldwide.

Available Information

We file annual, quarterly and current reports, proxy statements and other information with the SEC. These filings
are available to the public on the Internet at the SEC’s website at http://www.sec.gov.

Our Internet address is http://www.enersys.com. We make available free of charge on http://www.enersys.com
our annual, quarterly and current reports, and amendments to those reports, as soon as reasonably practical after
we electronically file such material with, or furnish it to, the SEC.

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ITEM 1A. RISK FACTORS

The following are certain risk factors that could materially and adversely affect our business, financial condition
and our results of operations and could cause actual results to differ materially from our expectations and
projections. Stockholders are cautioned that these and other factors, including those beyond our control, may
affect future performance and cause actual results to differ from those which may, from time to time, be
anticipated. The risks that are described below are not the only ones that we face. These risk factors should be
considered in connection with the matters discussed herein under “Cautionary Note Regarding Forward-Looking
Statements” and other information included and incorporated by reference in this Form 10-K as well as in other
reports and materials that we file with the SEC. All forward-looking statements made by us or on our behalf are
qualified by the risks described below. Although the risks are organized by headings and by category, many risks
are interrelated. You should not interpret the disclosure of any risk factor to imply that the risk has not already
materialized.

Business and Operating Risks

We operate in an extremely competitive industry and are subject to pricing pressures.

We compete with a number of major international manufacturers and distributors, as well as a large number of
smaller, regional competitors. Due to excess capacity in some sectors of our industry and consolidation among
industrial battery purchasers, we have been subjected to significant pricing pressures. We anticipate continued
competitive pricing pressure as foreign producers are able to employ labor at significantly lower costs than
producers in the U.S. and Western Europe, expand their export capacity and increase their marketing presence in
our major Americas and European markets. Several of our competitors have strong technical, marketing, sales,
manufacturing, distribution and other resources, as well as significant name recognition, established positions in
the market and long-standing relationships with OEMs and other customers. In addition, certain of our
competitors own lead smelting facilities which, during periods of lead cost increases or price volatility, may
provide a competitive pricing advantage and reduce their exposure to volatile raw material costs. Our ability to
maintain and improve our operating margins depends on our ability to control and reduce our costs in addition to
our ability to maintain business relationships with customers. If we are unable to offset pricing pressures, our
profitability and cash flows could be adversely affected. We cannot assure you that we will be able to continue to
control our operating expenses, to raise or maintain our prices or increase our unit volume, in order to maintain
or improve our operating results.

Reliance on third party relationships and derivative agreements could adversely affect our business.

We depend on third parties, including suppliers, distributors, lead toll operators, freight forwarders, insurance
brokers, commodity brokers, major financial institutions and other third party service providers, for key aspects
of our business, including the provision of derivative contracts to manage risks of commodity cost volatility,
foreign currency exposures and interest rate volatility. Failure of these third parties to meet their contractual,
regulatory and other obligations to us, or the development of factors that materially disrupt our relationships with
these third parties, could expose us to the risks of business disruption, higher commodity and interest costs,
unfavorable foreign currency rates and higher expenses, which could have a material adverse effect on our
business.

Changes in the cost and availability of raw materials could adversely affect our business, financial position and
results of operations.

Lead is our most significant raw material and is used along with significant amounts of plastics, steel, copper and
other materials in our manufacturing processes. We estimate that raw material costs account for over half of our
cost of goods sold. The costs of these raw materials, particularly lead, are volatile and beyond our control.
Additionally, availability of the raw materials used to manufacture our products may be limited at times,
resulting in higher prices or the need to find alternative suppliers. Furthermore, the cost of raw materials may

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also be influenced by transportation costs. Volatile raw material costs can significantly affect our operating
results and make period-to-period comparisons difficult. To reduce the volatility of our costs, we periodically
enter into hedging arrangements for a portion of our projected requirements. However, we cannot assure you that
we will be able to either hedge the costs or secure the availability of our raw material requirements at a
reasonable level or, even with respect to our agreements that adjust pricing to a market-based index for lead, pass
on to our customers the increased costs of our raw materials without affecting demand or that limited availability
of materials will not impact our production capabilities. Our inability to raise the price of our products in
response to increases in prices of raw materials due to pricing pressure, contract terms or other factors or to
maintain a proper supply of raw materials could have an adverse effect on our business, financial position and
results of operations.

Cost increases, supply disruptions or shortages of any of our battery components, such as electronic and
mechanical parts, or the raw materials used in the production of such parts could adversely affect our business.

From time to time, we may experience increases in the cost or a sustained interruption in the supply or shortage
of our components. For example, a global shortage and component supply disruptions of electronic and other
battery components is currently being reported, and the full impact to us is not yet known. Other shortages and
component supply disruptions could affect the supply of electronic components and raw materials (such as resins
and other raw metal materials) that go into the production of our products. Cost increases or supply interruptions
could materially and negatively impact our business, prospects, financial condition and operating results. The
prices for our components fluctuate depending on market conditions and global demand and could adversely
affect our business, prospects, financial condition and operating results. For instance, we are exposed to multiple
risks relating to price fluctuations for battery cells. These risks include, but are not limited to:

•

supply shortages caused by the inability or unwillingness of our suppliers and their competitors to build
or operate component production facilities to supply the numbers of battery components required to
support the rapid growth of the electric vehicle industry and other industries in which we operate as
demand for such components increases;

disruption in the supply of electronic circuits due to quality issues or insufficient raw materials;

a decrease in the number of manufacturers of battery components; and

an increase in the cost of raw materials.

We are dependent on the continued supply of battery components for our products. To date, we have a limited
number of fully qualified suppliers, and have limited flexibility in changing suppliers, though we are actively
engaged in activities to qualify additional suppliers. Any disruption in the supply of battery components could
temporarily disrupt production of our products until a different supplier is fully qualified.

The cost of our battery products depends in part upon the prices and availability of raw materials such as lead,
lithium, nickel, cobalt or other metals. The prices for these materials fluctuate and their available supply may be
unstable, depending on market conditions and global demand for these materials, including as a result of
increased global production of electric vehicles and energy storage products. Furthermore, fluctuations or
shortages in petroleum and other economic conditions may cause us to experience significant increases in freight
charges. Any reduced availability of these raw materials or substantial increases in their prices may increase the
cost of our components and consequently, the cost of our products. There can be no assurance that we will be
able to recoup increasing costs of our components by increasing prices, which in turn could damage our brand,
business, prospects, financial condition and operating results.

We have experienced and may continue to experience, difficulties implementing our global enterprise resource
planning system, which may adversely affect our business, financial condition and results of operations.

We are engaged in a multi-year implementation of a global enterprise resource planning system (“ERP”). The
ERP is designed to standardize business processes to efficiently maintain our financial records and provide

B-16

critical operational information to our management team. The ERP will continue to require significant
investment of human and financial resources. In our prior efforts implementing the ERP, we experienced
significant production and shipping delays, increased costs and other difficulties. Any significant disruption or
deficiency in the design and implementation of the ERP could adversely affect our ability to process orders, ship
products, send invoices and track payments, fulfill contractual obligations or otherwise operate our business.
Even with our investment of significant resources into the ERP system, additional and significant implementation
issues may arise. In addition, our efforts to centralize various business processes and functions within our
organization in connection with our ERP implementation may disrupt our operations, divert management’s
attention and negatively impact our business, financial condition and results of operations.

The failure to successfully implement efficiency and cost reduction initiatives, including restructuring activities,
could materially adversely affect our business, financial position and results of operations, and we may not
realize some or all of the anticipated benefits of those initiatives.

From time to time, we have implemented efficiency and cost reduction initiatives intended to improve our
profitability and to respond to changes impacting our business and industry. These initiatives include relocating
manufacturing to lower cost regions, consolidating and closing facilities, working with our material suppliers to
lower costs, product design and manufacturing improvements, personnel reductions and voluntary retirement
programs, and strategically planning capital expenditures and development activities. In the past we have
recorded net restructuring charges to cover costs associated with our cost reduction initiatives involving
restructuring. These costs have been primarily composed of employee separation costs, including severance
payments, and asset impairments or losses from disposal. We also undertake restructuring activities and
programs to improve our cost structure in connection with our business acquisitions, which can result in
significant charges, including charges for severance payments to terminated employees and asset impairment
charges.

We cannot assure you that our efficiency and cost reduction initiatives will be successfully or timely
implemented, or that they will materially and positively impact our profitability. Because our initiatives involve
changes to many aspects of our business, the associated cost reductions could adversely impact productivity and
sales to an extent we have not anticipated. In addition, our ability to complete our efficiency and cost-savings
initiatives and achieve the anticipated benefits within the expected time frame is subject to estimates and
assumptions and may vary materially from our expectations, including as a result of factors that are beyond our
control. Furthermore, our efforts to improve the efficiencies of our business operations and improve growth may
not be successful. Even if we fully execute and implement these activities and they generate the anticipated cost
savings, there may be other unforeseeable and unintended consequences that could materially adversely impact
our profitability and business, including unintended employee attrition or harm to our competitive position. To
the extent that we do not achieve the profitability enhancement or other benefits of our efficiency and cost
reduction initiatives that we anticipate, our business, financial position and results of operations may be
materially adversely affected.

Our failure to introduce new products and product enhancements coupled with broad market acceptance of new
technologies introduced by our competitors could adversely affect our business.

Many new energy storage technologies have been introduced over the past several years. For certain important
and growing markets, including markets served by our Motive Power and Energy Storage business segments,
lithium-based battery technologies have a growing market share. Our ability to achieve significant and sustained
penetration of key developing markets, including markets served by our Motive Power and Energy Storage
business segments, will depend upon our success in developing or acquiring these and other technologies and
related raw materials and components, either independently, through joint ventures or through acquisitions. If we
fail to develop or acquire, and manufacture and sell, products that satisfy our customers’ demands, or we fail to
respond effectively to new product announcements by our competitors by quickly introducing competitive
products, then market acceptance of our products could be reduced and our business could be adversely affected.

B-17

We cannot assure you that our portfolio of primarily lead-acid products will remain competitive with products
based on new technologies.

If we are not able to adequately protect our proprietary intellectual property and technology, we may lose any
technological advantages and our business, financial position and results of operations may be materially
adversely affected.

We rely on a combination of copyright, trademark, patent and trade secret laws, non-disclosure agreements and
other confidentiality procedures and contractual provisions to establish, protect and maintain our proprietary
intellectual property and technology and other confidential information. Certain of these technologies, especially
thin plate pure lead (“TPPL”) technology, are important to our business and are not protected by patents. Despite
our efforts to protect our proprietary intellectual property and technology and other confidential information,
unauthorized parties may attempt to copy or otherwise obtain and use our intellectual property and proprietary
technologies. Successful cybersecurity attacks, data breaches, unauthorized exfiltration, unapproved use of
machine learning or artificial intelligence tools, or other security incidents could result in the loss of intellectual
property and key technological advantages. If we are unable to protect our intellectual property and technology,
we may lose any technological advantage we currently enjoy and may be required to take an impairment charge
with respect to the carrying value of such intellectual property or goodwill established in connection with the
acquisition thereof. In either case, our business, financial position and results of operations may be materially
adversely affected.

Relocation of our customers’ operations could adversely affect our business, financial condition and results of
operations.

The trend by a number of our North American and Western European customers to move manufacturing
operations and expand their businesses in faster growing and lower labor-cost markets may have an adverse
impact on our business, financial condition and results of operations. These territories may be farther from our
manufacturing plants, and there is a risk that these customers will source their energy storage products from
competitors located in those territories and will cease or reduce the purchase of products from us. We cannot
assure you that we will be able to compete effectively with our competitors located in those territories, whether
by establishing or expanding our manufacturing operations in those territories or acquiring existing
manufacturers in those territories.

Quality problems with our products could harm our reputation and erode our competitive position.

The success of our business depends upon the quality of our products and our relationships with customers. In the
event that our products fail to meet our customers’ standards, our reputation could be harmed. This could result
in the loss of customers, a decrease in revenue and a loss of market share. We cannot assure you that our
customers will not experience quality problems with our products. Warranty, recall or product liability claims
could also materially adversely affect our business and reputation. In our business, we are exposed to warranty
and product liability claims. In addition, we may be required to participate in the recall of a product. If we fail to
meet customer specifications for their products, we may be subject to product quality costs and claims, as well as
adverse reputational impacts. A successful warranty or product liability claim against us, or a requirement that
we participate in a product recall, could have a material adverse effect on our business, financial condition and
results of operations.

We offer our products under a variety of brand names, the protection of which is important to our reputation for
quality in the consumer marketplace.

We rely upon a combination of trademark, licensing and contractual covenants to establish and protect the brand
names of our products. We have registered many of our trademarks in the U.S. Patent and Trademark Office and
in other countries. In many market segments, our reputation is closely related to our brand names. Monitoring

B-18

unauthorized use of our brand names is difficult, and we cannot assure you that the steps we have taken will
prevent the unauthorized use of our brand names, particularly in foreign countries where the laws may not protect
our proprietary rights as fully as in the U.S. We cannot assure you that our brand names will not be
misappropriated or utilized without our consent. In the event of any such actions, our reputation and our business,
financial condition and results of operations may be materially adversely affected.

Our growth strategy depends on our ability to continue to expand our market presence through acquisitions, and
our business could be materially adversely affected if we are unable to identify suitable acquisition candidates,
complete any proposed acquisitions or successfully integrate the businesses we acquire.

As part of our growth strategy, we depend on acquisitions of other product lines, technologies or facilities that
complement or expand our existing business. Acquisitions involve numerous risks, including:

•

inability to overcome significant competition for acquisition targets in the stored energy industry;

inability to identify suitable acquisition candidates or negotiate attractive terms;

difficulty obtaining the financing necessary to complete transactions we pursue, as our credit facilities
restrict the amount of additional indebtedness that we may incur to finance acquisitions and place other
restrictions on our ability to make acquisitions (and exceeding any of these restrictions would require
the consent of our lenders);

failure to identify all material issues through a customary due diligence investigation, and that material
issues will arise later;

difficulties in the assimilation of the operations, systems, controls, technologies, personnel, services
and products of the acquired business;

potential loss of key employees, customers, suppliers and distributors of the acquired business;

diversion of our management’s attention from other business concerns;

incurrence of additional debt or adverse tax and accounting consequences in connection with any
acquisitions;

failure to successfully integrate the acquired businesses in a timely manner, or at all;

incurrence of significant unanticipated expenses associated with integration activities; and

anticipated benefits of an acquisition not being realized fully or at all, or taking longer to realize than
we expect.

The materialization of any of the foregoing risks could impair our ability to successfully execute our acquisition
growth strategy, which could have a material adverse effect on our business.

Any acquisitions that involve the issuance of our equity securities may dilute our stockholder ownership interests,
reduce the market price of our stock, or both, and as a result our business, financial condition and results of
operations could be adversely affected.

Future acquisitions may involve the issuance of our equity securities as payment, in part or in full, for the
businesses or assets acquired. Any future issuances of equity securities may dilute our stockholders’
proportionate ownership interests in EnerSys. In addition, the benefits derived by us from an acquisition might
not outweigh or exceed the dilutive effect of any issuance of equity securities in connection with the acquisition.
We cannot predict or estimate the amount or timing of any future acquisitions or related issuances of equity
securities. Our stockholders bear the risk of any such future offerings reducing the market price of our stock and
diluting their proportionate ownership interests in EnerSys.

B-19

If our electronic data is compromised, our business could be materially adversely affected.

We and our business partners maintain significant amounts of data electronically in locations around the world.
This data relates to all aspects of our business, including current products and services and future products and
services under development. This data also contains certain customer, supplier, partner and employee
information. We maintain systems and processes designed to protect this data. However, notwithstanding such
protective measures, there is a risk of intrusion, cyberattacks, tampering, theft, misplaced or lost data,
programming or human errors that could compromise the integrity and privacy of this data, improper use of our
systems, software solutions or networks, power outages, hardware failures, computer viruses, failure of critical
computer systems, unauthorized access, use, disclosure, modification or destruction of information, defective
products, production downtimes and operational disruptions, which in turn could adversely affect our business,
financial condition and results of operations.

We provide confidential and proprietary information to our third-party business partners in certain cases where
doing so is necessary to conduct our business. While we obtain assurances from those parties that they have
systems and processes in place to protect such data and, where applicable, that they will take steps to assure the
protections of such data by third parties, those partners may be subject to the same risks as we are.

In particular, we and our third-party business partners experience cybersecurity incidents of varying degrees from
time-to-time, including ransomware and phishing attacks as well as distributed denial of service attacks and the
theft of data. Cyber threats are constantly evolving, are becoming more sophisticated and are being made by
groups and individuals with a wide range of expertise and motives, and this increases the difficulty of detecting
and successfully defending against them.

Any compromise of the confidential data of our customers, suppliers, partners, employees or ourselves, or failure
to prevent or mitigate the loss of or damage to this data through breach of our information technology systems or
other means could substantially disrupt our operations, harm our customers, employees and other business
partners, damage our reputation, violate applicable laws and regulations, subject us to potentially significant
costs and liabilities and result in a loss of business that could be material.

Our software and related services are highly technical and may contain undetected software bugs, errors or
other vulnerabilities, which could manifest in ways that could adversely affect our reputation and our business.

The software and related services that we offer are highly technical and complex. Our services or any other
products that we may introduce in the future may contain undetected software bugs, hardware errors and other
vulnerabilities. These vulnerabilities can manifest in any number of ways in our products, including through
diminished performance, security vulnerabilities, malfunctions, or even permanently disabled products. We have
a practice of regularly updating our products, and some errors in our products may be discovered only after a
product has been used. In some cases, any vulnerabilities may only be detected under certain circumstances or
after extended use. Any errors, bugs or other vulnerabilities discovered in our code or backend after release could
damage our reputation, alienate users, allow third parties to manipulate or exploit our software, lower revenue
and expose us to claims for damages, any of which could adversely affect our business. Additionally, errors, bugs
or other vulnerabilities may, either directly or if exploited by third parties, affect our ability to make accurate
royalty payments. We also could face claims for product liability, tort or breach of warranty as a result.
Defending a lawsuit, regardless of its merit, is costly and may divert management’s attention and adversely affect
our reputation and our business. In addition, if our liability insurance coverage proves inadequate or future
coverage is unavailable on acceptable terms or at all, our business could be seriously harmed.

If we cannot keep pace with rapid developments in technology, the use of our products and services and,
consequently, our revenues could decline.

Our business continues to demand the use of sophisticated systems and technology. These systems and
technologies must be refined, updated and replaced with more advanced systems on a regular basis in order for us

B-20

to meet our customers’ demands and expectations. We expect that new technologies applicable to our business
will continue to emerge and may be superior to, or render obsolete, the technologies we currently use in our
products and services. We cannot predict the effects of technological changes on our business, which
technological developments or innovations will become widely adopted, and how those technologies may be
regulated. Developing and incorporating new or updated systems and technologies into new and existing
products and services may require significant investment, take considerable time and may not ultimately be
successful. If we are unable to do so on a timely basis or within reasonable cost parameters, or if we are unable to
appropriately and timely train our employees to operate any of these new systems or technologies, our business
could be adversely affected. We also may not achieve the benefits that we anticipate from any new system or
technology and a failure to do so could result in higher than anticipated costs and adversely affect our results of
operations.

Work stoppages or similar difficulties could significantly disrupt our operations, reduce our revenues and
materially adversely affect our business.

A work stoppage at one or more of our facilities, whether caused by fire, flooding, epidemics, pandemics
(including the COVID-19 outbreak), military hostilities, government-imposed shutdowns, severe weather,
including that caused by climate change, other natural disaster or otherwise, could have a material adverse effect
on our business, financial condition and results of operations. In addition, some of our employees are represented
by labor unions or works councils under collective bargaining agreements with varying durations and terms.
Although we believe that our relations with our employees are strong, if our unionized workers were to engage in
a strike, work stoppage or other slowdown in the future, we could experience a significant disruption of our
operations. No assurances can be made that we will not experience work stoppages due to government directives,
employee health concerns, and other types of conflicts with labor unions, works councils, and other similar
groups in the future.

A work stoppage at one or more of our suppliers could also materially and adversely affect our business if an
alternative source of supply is not readily available. In addition, if one or more of our customers were to
experience a work stoppage, that customer could cease or limit purchases of our products, which could have a
material adverse effect on our business, financial condition and results of operations. In addition, the credit and
default risk or bankruptcy of customers or suppliers as a result of work stoppages could likewise materially and
adversely affect our business, financial condition and results of operations.

Global Operations Risks

Our results of operations may be negatively impacted by public health epidemics or outbreaks, including the
novel coronavirus (“COVID-19”).

Public health epidemics or outbreaks could adversely impact our global operations. The COVID-19 pandemic
caused disruption to the global economy, including economic slowdowns and supply chain disruptions that
adversely affected our business, financial position and results of operations. In response to public health
epidemics or outbreaks, countries imposed prolonged quarantines and travel restrictions, which may significantly
impact the ability of our employees to get to their places of work to produce products, may make it such that we
are unable to obtain sufficient components or raw materials and component parts on a timely basis or at a cost-
effective price or may significantly hamper our products from moving through the supply chain.

We rely on our production facilities, as well as third-party suppliers and manufacturers, in the United States,
Australia, Canada, France, Germany, Italy, the People’s Republic of China (“PRC”), the United Kingdom and
other countries that were significantly impacted by COVID-19. Shutdowns of certain businesses in many of these
countries resulted in disruptions or delays to our supply chain or reduction in demand for certain products.
Although disruptions may continue to occur and the future impact of the outbreak is uncertain, the impacts of the
public health epidemics or outbreaks (or events similar to COVID-19 in the future) cannot be reliably quantified
at this time.

B-21

The rapid spread of a contagious illness such as COVID-19, poses the risk that our employees, contractors,
suppliers and customers may be prevented from conducting business, which may have a material adverse effect
on our business, financial position and results of operations.

The uncertainty in global economic conditions or geographic regions in which our customers operate could
adversely affect our business, financial position and operating results.

Our operating results are directly affected by the general global economic conditions of the industries in which
our major customer groups operate. Our products are heavily dependent on the end markets that we serve and our
operating results will vary by location, depending on the economic environment in these markets. Sales of our
motive power products, for example, depend significantly on demand for new electric industrial forklift trucks,
which in turn depends on end-user demand for additional motive capacity in their distribution and manufacturing
facilities. The uncertainty in global economic conditions varies by geographic location and can result in
substantial volatility in global credit markets, particularly in the United States, where we service the vast majority
of our debt. Moreover, Federal Reserve Bank of the United States policy, including with respect to rising interest
rates and the decision to end its quantitative easing policy, may also result in market volatility or a return to
unfavorable economic conditions. These conditions affect our business by reducing prices that our customers
may be able or willing to pay for our products or by reducing the demand for our products, which could in turn
negatively impact our sales and earnings generation and result in a material adverse effect on our business, cash
flow, results of operations and financial position.

Government reviews, inquiries, investigations and actions could harm our business or reputation.

As we operate in various locations around the world, our operations in certain countries are subject to significant
governmental scrutiny and may be adversely impacted by the results of such scrutiny. The regulatory
environment with regard to our business is evolving, and officials often exercise broad discretion in deciding
how to interpret and apply applicable regulations. From time to time, we receive formal and informal inquiries
from various government regulatory authorities, as well as self-regulatory organizations, about our business and
compliance with local laws, regulations or standards.

Any determination that our operations or activities, or the activities of our employees, are not in compliance with
existing laws, regulations or standards could result in the imposition of substantial fines, interruptions of
business, loss of supplier, vendor, customer or other third-party relationships, termination of necessary licenses
and permits, or similar results, all of which could potentially harm our business and reputation. Even if an inquiry
does not result in these types of determinations, regulatory authorities could cause us to incur substantial costs or
require us to change our business practices in a manner materially adverse to our business, and it potentially
could create negative publicity which could harm our business and reputation.

Our international operations may be adversely affected by actions taken by foreign governments or other forces
or events over which we may have no control.

We currently have significant manufacturing and distribution facilities outside of the United States, in Argentina,
Australia, Belgium, Brazil, Canada, the Czech Republic, France, Germany, India, Italy, Malaysia, Mexico, the
PRC, Poland, Spain, Switzerland and the United Kingdom. Our global operations are dependent upon products
manufactured, purchased and sold in the U.S. and internationally, including in countries with political and
economic instability or uncertainty. This includes, for example, the uncertainty related to the United Kingdom’s
withdrawal from the European Union (commonly known as “Brexit”) the current conflict between Russia and
Ukraine, ongoing terrorist activity, the adoption and expansion of trade restrictions, including the occurrence or
escalation of a “trade war,” or other governmental action related to tariffs or trade agreements or policies among
the governments of the United States, the PRC and other countries and other global events. The global credit and
financial markets have recently experienced extreme volatility and disruptions, including severely diminished
liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in

B-22

unemployment rates and uncertainty about economic stability. Sanctions imposed by the United States and other
countries in response to such conflicts, including the one in Ukraine, may also adversely impact the financial
markets and the global economy, and any economic countermeasures by affected countries and others could
exacerbate market and economic instability. There can be no assurance that further deterioration in credit and
financial markets and confidence in economic conditions will not occur. Recent effects of the conflict between
Russia and Ukraine includes writing off $4 million in net assets located in Russia during fiscal 2022.
Furthermore, Brexit could cause disruptions to, and create uncertainty surrounding our business, including
affecting our relationships with our existing and future customers, suppliers and associates, which could have an
adverse effect on our business, financial results and operations. Effects of Brexit include changes in customs
regulations, shortages of truck drivers in the U.K., and administrative burdens placed on transportation
companies have led to challenges and delays in moving inventory across U.K. or EU borders, and higher
importation, freight and distribution costs. If such trends continue, we may experience further cost increases.

Some countries have greater political and economic volatility and greater vulnerability to infrastructure and labor
disruptions than others. Our business could be negatively impacted by adverse fluctuations in freight costs,
limitations on shipping and receiving capacity, and other disruptions in the transportation and shipping
infrastructure at important geographic points of exit and entry for our products. Operating in different regions
and countries exposes us to a number of risks, including:

• multiple and potentially conflicting laws, regulations and policies that are subject to change;

•

changes in international treaties or trade unions, which may make our products or our customers’
products more costly to export or import;

imposition of currency restrictions, restrictions on repatriation of earnings or other restraints imposition
of burdensome import duties, tariffs or quotas, which may make our products more costly to export or
import;

changes in trade agreements;

disadvantages of competing against companies from countries that are not subject to U.S. laws and
regulations, including the FCPA;

compliance with data protection regulations;

imposition of new or additional trade and economic sanctions laws imposed by the U.S. or foreign
governments;

• war or terrorist acts; and

•

political and economic instability or civil unrest that may severely disrupt economic activity in affected
countries.

The occurrence of one or more of these events may adversely affect our business, financial condition and results
of operations.

We are exposed to exchange rate and inflation risks, and our net earnings and financial condition may suffer due
to currency translations.

We invoice our foreign sales and service transactions in local and foreign currencies and translate net sales using
actual exchange rates during the period. We translate our non-U.S. assets and liabilities into U.S. dollars using
current exchange rates as of the balance sheet dates. Approximately 40% of net sales were generated outside of
the United States in fiscal 2023. Because a significant portion of our revenues and expenses are denominated in
foreign currencies, changes in exchange rates between the U.S. dollar and foreign currencies, including the
effects of inflation, primarily the euro, British pound, Polish zloty, Chinese renminbi, Mexican peso and Swiss
franc, may adversely affect our revenue, cost of goods sold and operating margins. For example, foreign currency

B-23

depreciation against the U.S. dollar will reduce the value of our foreign revenues and operating earnings as well
as reduce our net investment in foreign subsidiaries. In addition, we have balance sheet foreign currency
positions that benefit from a stronger U.S. dollar and weak euro and may impact other income expense and
equity on the balance sheet.

Most of the risk of fluctuating foreign currencies is in our European operations, which comprised approximately
one-fifth of our net sales during the last three fiscal years. The euro is the dominant currency in our EMEA
operations. In the event that one or more European countries were to replace the euro with another currency, our
sales into such countries, or into Europe generally, would likely be adversely affected until stable exchange rates
are established.

If foreign currencies depreciate against the U.S. dollar, it would make it more expensive for our non-U.S.
subsidiaries to purchase certain of our raw material commodities that are priced globally in U.S. dollars, while
the related revenue will decrease when translated to U.S. dollars. Significant movements in foreign exchange
rates can have a material impact on our results of operations and financial condition. We periodically engage in
hedging of our foreign currency exposures, but cannot assure you that we can successfully hedge all of our
foreign currency exposures or do so at a reasonable cost.

We quantify and monitor our global foreign currency exposures. Our largest foreign currency exposure is from
the purchase and conversion of U.S. dollar-based lead costs into local currencies in Europe. Additionally, we
have currency exposures from intercompany financing and intercompany and third party trade transactions. On a
selective basis, we enter into foreign currency forward contracts and purchase option contracts to reduce the
impact from the volatility of currency movements; however, we cannot be certain that foreign currency
fluctuations will not impact our operations in the future.

If we are unable to effectively hedge against currency fluctuations, our operating costs and revenues in our
non-U.S. operations may be adversely affected. This, in turn, would have an adverse effect on our business,
financial position and results of operations.

Financial and Accounting Risks

We may not be able to maintain adequate credit facilities, which could materially adversely affect our business,
financial condition and results of operations.

Our ability to continue our ongoing business operations and fund future growth depends on our ability to
maintain adequate credit facilities and to comply with the financial and other covenants in such credit facilities or
to secure alternative sources of financing. However, such credit facilities or alternate financing may not be
available or, if available, may not be on terms favorable to us. If we do not have adequate access to credit, we
may be unable to refinance our existing borrowings and credit facilities when they mature and fund future
acquisitions, which may reduce our flexibility in responding to changing industry conditions and materially
adversely affect our business, financial condition and results of operations.

Our indebtedness could adversely affect our business, financial condition and results of operations and restrict
us in ways that limit our flexibility in operating our business.

As of March 31, 2023, we had $1,073 million of total consolidated debt (including finance leases). This level of
debt could:

•

increase our vulnerability to adverse general economic and industry conditions, including interest rate
fluctuations, because a portion of our borrowings bear, and will continue to bear, interest at floating
rates;

require us to dedicate a substantial portion of our cash flow from operations to debt service payments,
which would reduce the availability of our cash to fund working capital, capital expenditures or other
general corporate purposes, including acquisitions;

B-24

•

limit our flexibility in planning for, or reacting to, changes in our business and industry;

restrict our ability to introduce new products or technologies or exploit business opportunities;

place us at a disadvantage compared with competitors that have proportionately less debt;

limit our ability to borrow additional funds in the future, if we need them, due to financial and
restrictive covenants in our debt agreements;

limit our operating and financial flexibility due to financial and restrictive covenants in our debt
agreements; and

have a material adverse effect on us if we fail to comply with the financial and restrictive covenants in
our debt agreements.

In addition, our ability to make scheduled payments on or to refinance our debt obligations depends on our
financial condition and operating performance, which is subject to prevailing economic and competitive
conditions and to financial, business, legislative, regulatory and other factors, some of which are beyond our
control. Any failure to make scheduled payments could adversely affect our business, financial condition and
results of operations.

We may have exposure to greater than anticipated tax liabilities, which could adversely impact our business,
financial position and results of operations.

Our income tax obligations are based in part on our corporate operating structure and intercompany
arrangements, including the manner in which we operate our business, develop, value, manage, protect, and use
our intellectual property and the valuations of our intercompany transactions. We may also be subject to
additional indirect or non-income based taxes. The tax laws applicable to our business, including the laws of the
United States and other jurisdictions, are subject to interpretation, and certain jurisdictions are aggressively
interpreting their laws in new ways in an effort to raise additional tax revenue from multi-national companies like
us. The taxing authorities of the jurisdictions in which we operate may challenge our tax positions and
methodologies for valuing developed technology or intercompany arrangements, which could increase our
worldwide effective tax rate and adversely impact our business, financial position and results of operations.
Although we believe that our provision for income taxes is reasonable, the ultimate tax outcome may differ from
the amounts recorded in our financial statements and may materially affect our financial results in the period or
periods for which such determination is made. In addition, our future income tax rates could be adversely
affected by earnings being lower than anticipated in jurisdictions that have lower statutory tax rates and higher
than anticipated in jurisdictions that have higher statutory tax rates, by changes in the valuation of our deferred
tax assets and liabilities, or by changes in tax laws, regulations, or accounting principles.

Changes in tax laws or tax rulings could materially affect our business, financial position and results of
operations.

The income and non-income tax regimes to which we are subject or under which we operate are unsettled and
may be subject to significant change. Changes in tax laws or tax rulings, or changes in interpretations of existing
laws, could materially affect our business, financial position and results of operations. In addition, many
countries in Europe, as well as a number of other countries and organizations, have recently proposed or
recommended changes to existing tax laws or have enacted new laws that could significantly increase our tax
obligations in many countries where we do business or require us to change the manner in which we operate our
business. For example:

• On August 16, 2022, the U.S. Congress passed the Inflation Reduction Act of 2022 (the “IRA”), which,
among other provisions, creates a new corporate alternative minimum tax (“CAMT”) of at least 15%
for certain large corporations that have at least an average of $1 billion in adjusted financial statement
income over a consecutive three-year period effective after December 31, 2022. The IRA also includes

B-25

a 1% excise tax on certain stock repurchases beginning in 2023. We do not expect to meet the CAMT
threshold in the near term. However, we expect a material portion of our U.S. produced batteries and
battery cells, including our proprietary TPPL batteries, will qualify for production tax credits under
Section 45X of the IRA.

•

In 2021, the Organization for Economic Cooperation Development (the “OECD”), through an
association of more than 140 countries, announced a consensus around a two-pillar approach to address
tax challenges presented by digital commerce. “Pillar 1” focuses on nexus and profit allocation, and
“Pillar 2” focuses on a minimum global effective tax rate of 15%. On December 15, 2022, the
European Union adopted the Pillar Two directive and EU member states are expected to implement
Pillar Two into domestic law by December 31, 2023.

We closely monitor these developments in the countries where we operate. Changes to the statutory tax rate may
occur at any time, and any related expense or benefit recorded may be material to the fiscal quarter and year in
which the law change is enacted. The European Commission has conducted investigations in multiple countries
focusing on whether local country tax rulings or tax legislation provides preferential tax treatment that violates
European Union state aid rules and concluded that certain countries, have provided illegal state aid in certain
cases. These investigations may result in changes to the tax treatment of our foreign operations. Due to the large
and expanding scale of our international business activities, many of these types of changes to the taxation of our
activities could increase our worldwide effective tax rate and adversely affect our business, financial position and
results of operations. Such changes may also apply retroactively to our historical operations and result in taxes
greater than the amounts estimated and recorded in our financial statements.

In relation to the IRA, we expect to receive production tax credits for certain of our products produced in the US,
however, the exact impact of these changes is not fully known and may, in some circumstances, depend on
guidance issued by the U.S. Department of the Treasury (“Treasury”) regarding the interpretation and
implementation of the IRA. Treasury has issued only limited interpretations and additional guidance may be
forthcoming. If and when issued, such guidance may impose further requirements or limitations. These and any
other changes to government incentives that impose additional restrictions could increase costs, limit our ability
to utilize tax benefits, or adversely impact our growth, which could have a material adverse effect on our
business, financial condition and results of operations. There can be no assurance that our products will meet the
requirements for the tax credits and compliance with such requirements could increase our labor and other costs.
Any reduction in rebates, tax credits or other financial incentives available to manufacturers could negatively
affect the market and adversely impact our business operations and expansion potential. In addition, there is no
assurance we will have the necessary tax attributes to utilize any such credits that are available and may not be
able to monetize such credits on favorable terms.

In connection with the OECD’s Base Erosion and Profit Shifting (BEPS) project, companies are required to
disclose more information to tax authorities on operations around the world, which may lead to greater audit
scrutiny of profits earned in other countries. We regularly assess the likely outcomes of our tax audits and
disputes to determine the appropriateness of our tax reserves. However, any tax authority could take a position on
tax treatment that is contrary to our expectations, which could result in tax liabilities in excess of reserves.

Legal and Regulatory Risks

Our operations expose us to environmental, health and safety and other legal compliance risks, and any
noncompliance could adversely affect our business.

As a global business, we are subject to extensive environmental liability on our operations due to current
environmental laws and regulations in the jurisdictions we operate.

If convicted or found liable for violation of a law or regulation, we could be subject to significant fines, penalties,
repayments or other damages. Laws and regulations may also change from time to time, as may related

B-26

interpretations and other guidance, resulting in potentially higher expenses and payments and affect how we
conduct our operations and structure our investments.

We process, store, dispose of and otherwise use large amounts of hazardous materials, especially lead and acid in
the manufacturing of our products. As a result, we are subject to extensive and changing environmental, health
and safety laws and regulations governing, among other things: the generation, handling, storage, use,
transportation and disposal of hazardous materials; remediation of polluted ground or water; emissions or
discharges of hazardous materials into the ground, air or water; and the health and safety of our employees.
Failure to comply with these laws or regulations, or to obtain or comply with required environmental permits,
could result in fines, criminal charges or other sanctions by regulators. From time to time we have had instances
of alleged or actual noncompliance that have resulted in the imposition of fines, penalties and required corrective
actions. Our ongoing compliance with environmental, health and safety laws, regulations and permits could
require us to incur significant expenses, limit our ability to modify or expand our facilities or continue production
and require us to install additional pollution control equipment and make other capital improvements. In addition,
private parties, including current or former employees, could bring personal injury or other claims against us due
to the presence of, or exposure to, hazardous substances used, stored or disposed of by us or contained in our
products.

Certain environmental laws assess liability on owners or operators of real property for the cost of investigation,
removal or remediation of hazardous substances at their current or former properties. These laws may also assess
costs to repair damage to natural resources. We may be responsible for remediating damage to our properties
caused by former owners. Soil and groundwater contamination has occurred at some of our current and former
properties and may occur or be discovered at other properties in the future. In accordance with regulatory
permits, we are currently investigating and monitoring soil and groundwater contamination at several of our
properties, in most cases as required by regulatory permitting processes. We may be required to conduct these
operations at other properties in the future. In addition, we have been, and in the future, may be liable to
contribute to the cleanup of locations owned or operated by other persons to which we or our predecessor
companies have sent waste for disposal, pursuant to federal and other environmental laws. Under these laws, the
owner or operator of contaminated properties and companies that generated, disposed of or arranged for the
disposal of wastes sent to a contaminated disposal facility can be held jointly and severally liable for the
investigation and cleanup of such properties, regardless of fault. Additionally, our products may become subject
to fees and taxes in order to fund cleanup of such properties, including those operated or used by other lead-
battery industry participants.

Changes in environmental and climate-related laws and regulations could lead to new or additional investment in
production designs and could increase environmental compliance expenditures. For example, the European
Union has enacted greenhouse gas emissions legislation, and continues to expand the scope of such legislation.
The United States Environmental Protection Agency has promulgated regulations applicable to projects
involving greenhouse gas emissions above a certain threshold, and the United States and certain states within the
United States have enacted, or are considering, limitations on greenhouse gas emissions.

Changes in climate change concerns, or in the regulation of such concerns, including greenhouse gas emissions,
could subject us to additional costs and restrictions, including increased energy and raw materials costs.
Additionally, we cannot assure you that we have been or at all times will be in compliance with environmental
laws and regulations or that we will not be required to expend significant funds to comply with, or discharge
liabilities arising under, environmental laws, regulations and permits, or that we will not be exposed to material
environmental, health or safety litigation.

We are subject to a wide variety of domestic and foreign laws and regulations that could adversely affect our
business, financial condition and results of operations.

We are subject to a wide variety of domestic and foreign laws and regulations, and legal compliance risks,
including securities laws, tax laws, data privacy laws, employment and pension-related laws, competition laws,

B-27

U.S. and foreign export and trade laws, government procurement regulations, and laws governing improper
business practices. We are affected by both new laws and regulations, and changes to existing laws and
regulations which may continue to evolve through interpretations by courts and regulators. Furthermore, the laws
and regulations to which we are subject may differ from jurisdiction to jurisdiction, further increasing the cost of
compliance and the risk of noncompliance.

In particular, the U.S. Foreign Corrupt Practices Act (“FCPA”) and similar worldwide anti-bribery laws in
non-U.S. jurisdictions generally prohibit companies and their intermediaries from making improper payments to
non-U.S. officials for the purpose of obtaining or retaining business. The FCPA applies to companies, individual
directors, officers, employees and agents. Under the FCPA, U.S. companies may be held liable for actions taken
by strategic or local partners or representatives. The FCPA also imposes accounting standards and requirements
on publicly traded U.S. corporations and their foreign affiliates, which are intended to prevent companies and
their intermediaries from making improper payments to non-U.S. government officials for the purpose of
obtaining or retaining business. Certain of our customer relationships outside of the U.S. are with governmental
entities and are therefore subject to such anti-bribery laws. Our policies mandate compliance with these anti-
bribery laws. Despite meaningful measures that we undertake to facilitate lawful conduct, which include training
and internal control policies, these measures may not always prevent reckless or criminal acts by our employees
or agents. As a result, we could be subject to criminal and civil penalties, disgorgement, further changes or
enhancements to our procedures, policies and controls, personnel changes or other remedial actions. Violations
of these laws, or allegations of such violations, could disrupt our operations, involve significant management
distraction and result in a material adverse effect on our competitive position, results of operations, cash flows or
financial condition.

Complying or failing to comply with conflict minerals regulations could materially and adversely affect our
supply chain, our relationships with customers and suppliers and our financial results.

We are currently subject to conflict mineral disclosure regulations in the U.S. and may be affected by new
regulations concerning conflict and similar minerals adopted by other jurisdictions where we operate. U.S.
legislation included disclosure requirements regarding the use of conflict minerals mined from the Democratic
Republic of Congo and adjoining countries and procedures regarding a manufacturer’s efforts to prevent the
sourcing of such conflict minerals. In addition, the European Union adopted an EU-wide conflict minerals rule
under which most EU importers of tin, tungsten, tantalum, gold and their ores will have to conduct due diligence
to ensure the minerals do not originate from conflict zones and do not fund armed conflicts. We have and will
continue to incur added costs to comply with the disclosure requirements, including costs related to determining
the source of such minerals used in our products. We may not be able to ascertain the origins of such minerals
that we use and may not be able to satisfy requests from customers to certify that our products are free of conflict
minerals. These requirements also could constrain the pool of suppliers from which we source such minerals. We
may be unable to obtain conflict-free minerals at competitive prices which will increase costs and may materially
and adversely affect our manufacturing operations and profitability.

Our failure to comply with data privacy regulations could adversely affect our business.

There are new and emerging data privacy laws, as well as frequent updates and changes to existing data privacy
laws, in most jurisdictions in which we operate. Given the complexity of these laws and the requirements they
place on businesses regarding the collection, storage, handling, use, disclosure, transfer and security of personal
data, it is important for us to understand their impact and respond accordingly. Failure to comply with data
privacy laws can result in substantial fines or penalties, legal liability or reputational damage.

In the UK and Europe, the General Data Protection Regulation (the “GDPR”), which came into effect in 2018,
places stringent requirements on companies when handling personal data and there continues to be a growing
trend of other countries adopting similar laws, including Canada. Additionally, there continues to be significant
uncertainty with respect to the California Consumer Privacy Act of 2018 (the “CCPA”), which went into effect

B-28

on January 1, 2020, and imposes additional obligations on companies regarding the handling of personal
information and provides certain individual privacy rights to persons whose information is collected. Both the
GDPR and the CCPA are continuously evolving and developing and may be interpreted and applied differently
from jurisdiction to jurisdiction and may create inconsistent or conflicting requirements. For example, the
California Privacy Rights Act, which was approved by California voters as a ballot initiative in November 2020,
modifies the CCPA significantly, further enhancing and extending an individual’s rights over their personal data
and the obligations placed on companies that handle this data. The resulting new regulations became effective on
January 1, 2023. Most notably, employee and business data were brought into scope, which raises the compliance
requirements for us significantly, in terms of internal controls, processes and governance requirements.
Furthermore, since 2020, several other U.S. states have enacted (and additional U.S. states are considering)
stringent consumer privacy laws, which may impose varying standards and requirements on our data collection,
use and processing activities. Continued state by state introduction of privacy laws could lead to significantly
greater complexity in our compliance requirements globally, which could result in complaints from data subjects
or action from regulators.

If we are not able to respond, adapt and implement the necessary requirements to ensure compliance with data
privacy laws, this could adversely impact our reputation and we could face exposure to fines levied by regulators.
As a result, our business, financial position and results of operations could be material adversely affected.

The reduction, modification, elimination or expiration of government incentives for, or regulations regarding, the
use of energy systems and batteries could reduce demand for our products and harm our business.

Federal, state, local and foreign government bodies provide incentives to owners, end-users, distributors, system
integrators and manufacturers of energy systems and batteries in the form of rebates, tax credits and other
financial incentives. However, these incentives may expire on a particular date, end when the allocated funding is
exhausted, or may be reduced or terminated as a matter of regulatory or legislative policy.

The IRA expanded and extended the tax credits and other tax benefits available to energy systems projects and
the battery supply chain. We believe this law will bolster and extend future demand for our products in the
United States. However, we note that implementing regulations for this law are still in process, which creates
uncertainty about the extent of its impact on us and our industry.

In addition, similar incentives may exist in, or be developed outside of, the United States, which could impact
demand for our products and services as we expand our business into foreign jurisdictions. Our international
customers and end-users may have access to tax deductions and grants toward equipment purchases. Our ability
to successfully penetrate new geographic markets may depend on new countries adopting, to the extent such
incentives are not currently in place and maintaining such incentives.

General Risk Factors

There can be no assurance that we will continue to declare cash dividends at all or in any particular amounts,
and any reduction in or elimination of our dividend payment could reduce the market price of our stock.

We intend to pay quarterly cash dividends subject to capital availability and periodic determinations by our
Board of Directors that cash dividends are in the best interest of our stockholders. Future payment of a regular
quarterly cash dividend on our common shares will be subject to, among other things, our results of operations,
cash balances and future cash requirements, financial condition, statutory requirements of Delaware law,
compliance with the terms of existing and future indebtedness and credit facilities, changes in federal and state
income tax laws, changes in our business model and other factors that our Board of Directors may deem relevant.
Our dividend payments may change from time to time, and we cannot assure you that we will continue to declare
dividends at all or in any particular amounts. A reduction in or elimination of our dividend payments could have
a negative effect on our share price.

B-29

We cannot guarantee that our share repurchase programs will be fully consummated or that they will enhance
long-term stockholder value. Share repurchases could also increase the volatility of the market price of our stock
and diminish our cash reserves.

Our Board of Directors has authorized two share repurchase programs. These programs authorize the repurchase
of up to a combined $250 million of our common stock, of which authority, as of March 31, 2023, approximately
$185 million remains available. The other program authorizes the repurchase of up to such number of shares as
shall equal the dilutive effects of any equity-based award granted during such fiscal year and the number of
shares exercised through stock option awards during such fiscal year. Although our Board of Directors has
authorized these share repurchase programs, the programs do not obligate us to repurchase any specific dollar
amount or to acquire any specific number of shares. We cannot guarantee that the programs will be fully
consummated or that they will enhance long-term stockholder value. The programs could affect the trading price
of our stock and increase volatility, and any announcement of a termination of these programs may result in a
decrease in the market price of our stock. In addition, these programs could diminish our cash reserves.

We depend on our senior management team and other key employees, and significant attrition within our
management team or unsuccessful succession planning could adversely affect our business.

Our success depends in part on our ability to attract, retain and motivate senior management and other key
employees. Achieving this objective may be difficult due to many factors, including fluctuations in global
economic and industry conditions, competitors’ hiring practices, cost reduction activities, and the effectiveness of
our compensation programs. Competition for qualified personnel can be very intense. We must continue to
recruit, retain and motivate senior management and other key employees sufficient to maintain our current
business and support our future projects. We are vulnerable to attrition among our current senior management
team and other key employees. A loss of any such personnel, or the inability to recruit and retain qualified
personnel in the future, could have a material adverse effect on our business, financial condition and results of
operations. In addition, if we are unsuccessful in our succession planning efforts, the continuity of our business
and our results of operations could be materially adversely affected.

If our internal controls are found to be ineffective, our results of operations or our stock price may be adversely
affected.

Our most recent evaluation resulted in our conclusion that, as of March 31, 2023, our internal control over
financial reporting was effective. We believe that we currently have adequate internal control procedures in place
for future periods, including processes related to newly acquired businesses. However, if our internal control over
financial reporting is found to be ineffective, investors may lose confidence in the reliability of our financial
statements, which may adversely affect our results of operations or stock price.

Changes in accounting principles and guidance could result in unfavorable accounting charges or effects, which
could adversely affect our business.

We prepare our consolidated financial statements in conformity with accounting principles generally accepted in
the U.S. Any change in these principles could have a significant effect on our reported financial position and
financial results. The adoption of new or revised accounting principles may require us to make changes to our
systems, processes and internal controls, which could have a significant effect on our reported financial results
and internal controls, cause unexpected financial reporting fluctuations, retroactively affect previously reported
results or require us to make costly changes to our operational processes and accounting systems upon our
following the adoption of these standards. Any of these results could adversely affect our business.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

B-30

ITEM 2.

PROPERTIES

The Company’s worldwide headquarters is located in Reading, Pennsylvania, U.S.A. Headquarters for our
Americas and EMEA operations are located in Reading, Pennsylvania, U.S.A., and Zug, Switzerland,
respectively. The Company owns approximately 80% of its manufacturing facilities and distribution centers
worldwide. The following sets forth the Company’s principal owned or leased facilities:

Americas: Sylmar, California; Longmont, Colorado; Tampa, Florida; Suwanee, Georgia; Hays, Kansas;
Richmond, Kentucky; Springfield and Warrensburg, Missouri; Horsham, Pennsylvania; Sumter, South
Carolina; Ooltewah, Tennessee; Spokane and Bellingham, Washington in the United States. Burnaby,
Canada; Monterrey and Tijuana, Mexico; Buenos Aires, Argentina and São Paulo, Brazil.

EMEA: Hostomice, Czech Republic; Arras, France; Bielsko-Biala, Poland; Stockholm, Sweden; Newport
and Culham, United Kingdom.

Asia: Chongqing and Yangzhou, the PRC.

We consider our plants and facilities, whether owned or leased, to be in satisfactory condition and adequate to
meet the needs of our current businesses and projected growth. Information as to material lease commitments is
included in Note 3—Leases to the Consolidated Financial Statements.

ITEM 3.

LEGAL PROCEEDINGS

From time to time, we are involved in litigation incidental to the conduct of our business. See Litigation and
Other Legal Matters in Note 19—Commitments, Contingencies and Litigation to the Consolidated Financial
Statements, which is incorporated herein by reference.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

B-31

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND

ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

The Company’s common stock has been listed on the New York Stock Exchange under the symbol “ENS” since
it began trading on July 30, 2004. Prior to that time, there had been no public market for our common stock.

Holders of Record

As of May 19, 2023, there were approximately 600 record holders of common stock of the Company. Because
many of these shares are held by brokers and other institutions on behalf of stockholders, the Company is unable
to estimate the total number of stockholders represented by these record holders.

Recent Sales of Unregistered Securities

During the fourth quarter of fiscal 2023, we did not issue any unregistered securities.

Dividends

During fiscal 2023, the Company’s quarterly dividend was $0.175 per share. The Company declared aggregate
regular cash dividends of $0.70 per share in each of the years ended March 31, 2023, March 31, 2022 and 2021.

The Company anticipates that it will continue to pay quarterly cash dividends in the future. However, the
payment and amount of future dividends remain within the discretion of the Board and will depend upon the
Company’s future earnings, financial condition, capital requirements, restrictions under existing or future credit
facilities or debt and other factors. See “There can be no assurance that we will continue to declare cash
dividends at all or in any particular amounts.” Under Item 1A. Risk Factors for additional information.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table summarizes the number of shares of common stock we purchased from participants in our
equity incentive plans, as well as repurchases of common stock authorized by the Board of Directors. As
provided by the Company’s equity incentive plans, (a) vested options outstanding may be exercised through
surrender to the Company of option shares or vested options outstanding under the Company’s equity incentive
plans to satisfy the applicable aggregate exercise price (and any withholding tax) required to be paid upon such
exercise and (b) the withholding tax requirements related to the vesting and settlement of equity awards may be
satisfied by the surrender of shares of the Company’s common stock.

Purchases of Equity Securities

(a)
Total number
of shares (or
units)
purchased

(b)
Average price
paid per share
(or unit)

(d)
Maximum number
(or approximate
dollar value) of shares
(or units) that may be
purchased under the
plans or programs(1)(2)(3)

Period

January 2—January 31, 2023 . . . . . . . . . . . .
February 1—March 1, 2023 . . . . . . . . . . . . .
March 2—March 31, 2023 . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
49,934
62

49,996

$ —
75.92
74.60

$75.92

—
—
—

—

$185,545,418
185,545,418
185,545,418

B-32

(1) The Company’s Board of Directors has authorized the Company to repurchase up to such number of shares

as shall equal the dilutive effects of any equity based award granted, approximately $25.0 million, during
such fiscal year under the 2017 Equity Incentive Plan and the number of shares exercised through stock
option awards during such fiscal year.

(2) On March 9, 2022, the Company announced the establishment of a $150.0 million stock repurchase

authorization, with no expiration date.

(3) On November 10, 2021, the Company announced the establishment of a $100 million stock repurchase

authorization, with no expiration date.

STOCK PERFORMANCE GRAPH

The following graph compares the changes in cumulative total returns on EnerSys’ common stock with the
changes in cumulative total returns of the New York Stock Exchange Composite Index, a broad equity market
index; the Dow Jones US Electrical Components and Equipment index (“DJUSEC”); and the peer group standard
industrial classification codes (“SIC Codes”), which was used as a comparable index in fiscal 2022. The
Company determined that the DJUSEC index provides a publicly available index of industry peers with similar
market capitalization.

* $100 invested on March 31, 2018 in stock or index, including reinvestment of dividends.

B-33

ITEM 6.

[RESERVED]

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

The following discussion and analysis of our results of operations and financial condition for the fiscal years
ended March 31, 2023 and 2022, should be read in conjunction with our audited Consolidated Financial
Statements and the notes to those statements included in Item 8. Financial Statements and Supplementary Data,
of this Annual Report on Form 10-K. Our discussion and analysis of our results of operations and financial
condition for the fiscal years ended March 31, 2022 and 2021, has been omitted from this Form 10-K and can be
found in Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2022. Our discussion
contains forward-looking statements based upon current expectations that involve risks and uncertainties, such
as our plans, objectives, opinions, expectations, anticipations and intentions and beliefs. Actual results and the
timing of events could differ materially from those anticipated in those forward-looking statements as a result of
a number of factors. See “Cautionary Note Regarding Forward-Looking Statements,” “Business” and “Risk
Factors,” sections elsewhere in this Annual Report on Form 10-K. In the following discussion and analysis of
results of operations and financial condition, certain financial measures may be considered “non-GAAP
financial measures” under the SEC rules. These rules require supplemental explanation and reconciliation,
which is provided in this Annual Report on Form 10-K.

EnerSys’ management uses the non-GAAP measures, EBITDA and adjusted EBITDA, in its computation of
compliance with loan covenants and adjusted EBITDA in evaluating its financial performance. These measures,
as used by EnerSys, adjust net earnings determined in accordance with GAAP for interest, taxes, depreciation
and amortization, and certain charges or credits as permitted by our credit agreements, that were recorded
during the periods presented.

These non-GAAP disclosures have limitations as analytical tools, should not be viewed as a substitute for cash
flow or operating earnings determined in accordance with GAAP, and should not be considered in isolation or
as a substitute for analysis of the Company’s results as reported under GAAP, nor are they necessarily
comparable to non-GAAP performance measures that may be presented by other companies. This supplemental
presentation should not be construed as an inference that the Company’s future results will be unaffected by
similar adjustments to operating earnings determined in accordance with GAAP.

Overview

EnerSys (the “Company,” “we,” or “us”) is a world leader in stored energy solutions for industrial applications.
We also manufacture and distribute energy systems solutions and motive power batteries, specialty batteries,
battery chargers, power equipment, battery accessories and outdoor equipment enclosure solutions to customers
worldwide. Energy Systems which combine enclosures, power conversion, power distribution and energy storage
are used in the telecommunication and broadband, utility industries, uninterruptible power supplies, and
numerous applications requiring stored energy solutions. Motive Power batteries and chargers are utilized in
electric forklift trucks and other industrial electric powered vehicles. Specialty batteries are used in aerospace and
defense applications, large over the road trucks, premium automotive and medical. We also provide aftermarket
and customer support services to over 10,000 customers in more than 100 countries through a network of
distributors, independent representatives and our internal sales force around the world.

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performance as these are managed and viewed on a consolidated basis. The Company identifies the following as
its three operating segments, based on lines of business:

•

We evaluate business segment performance based primarily upon operating earnings exclusive of highlighted
items. Highlighted items are those that the Company deems are not indicative of ongoing operating results,
including those charges that the Company incurs as a result of restructuring activities, impairment of goodwill
and indefinite-lived intangibles and other assets, acquisition activities and those charges and credits that are not
directly related to operating unit performance, such as significant legal proceedings, ERP system implementation,
amortization of recently acquired intangible assets and tax valuation allowance changes, including those related
to the adoption of the Tax Cuts and Jobs Act. Because these charges are not incurred as a result of ongoing
operations, or are incurred as a result of a potential or previous acquisition, they are not as helpful a measure of
the performance of our underlying business, particularly in light of their unpredictable nature and are difficult to
forecast. All corporate and centrally incurred costs are allocated to the business segments based principally on
net sales. We evaluate business segment cash flow and financial position performance based primarily upon
capital expenditures and primary operating capital levels.

Our management structure, financial reporting systems, and associated internal controls and procedures, are all
consistent with our three lines of business. We report on a March 31 fiscal year-end. Our financial results are
largely driven by the following factors:

•

global economic conditions and general cyclical patterns of the industries in which our customers
operate;

changes in our selling prices and, in periods when our product costs increase, our ability to raise our
selling prices to pass such cost increases through to our customers;

the extent to which we are able to efficiently utilize our global manufacturing facilities and optimize
our capacity;

the extent to which we can control our fixed and variable costs, including those for our raw materials,
manufacturing, distribution and operating activities;

changes in our level of debt and changes in the variable interest rates under our credit facilities; and

the size and number of acquisitions and our ability to achieve their intended benefits.

Current Market Conditions

Economic Climate

The economic climate in North America, China and EMEA began to slow in the first half of calendar 2022 after
experiencing strong growth during calendar 2021. All regions are experiencing a rise in inflation and are being

B-35

negatively impacted by the war in Ukraine, however the rate of inflation broadly began to slow at the end of the
year and into calendar year 2023. We expect interest rates to continue to increase in the U.S. and the euro zone.
China’s economy faced further headwinds caused by continued COVID-19 lockdowns due to rising cases and its
zero-Covid approach through the majority of the year. In calendar year 2023, China reopened its borders for the
first time in three years and, as a result, its economy is expected to experience moderate growth. The U.S.
economy is expected to continue to slow in calendar 2023 while EMEA is expected to be flat to slightly up.

EnerSys is experiencing some supply chain disruptions and cost spikes in certain materials such as steel, copper,
plastic resins, acid, pasting paper and electronic components, while transportation and related logistics challenges
are improving with broad-based costs declining from peak levels. In addition, some locations experienced
difficulty meeting hiring goals for the majority of the fiscal year. Generally, our mitigation efforts and the recent
economic recovery have tempered the impact of the pandemic-related challenges. The overall market demand for
our products and services remains robust.

Volatility of Commodities and Foreign Currencies

Our most significant commodity and foreign currency exposures are related to lead and the Euro, respectively.
Historically, the volatility of commodity costs and foreign currency exchange rates have caused large swings in
our production costs. Since the beginning of fiscal year 2023, we have experienced a range in lead prices from
just above $1.10 per pound to approximately $0.85 per pound. We are experiencing increasing costs in some of
our other raw materials such as steel, copper, plastic resins, acid, separator paper and electronics. We also
experienced increased freight costs through most of the year, but saw a decline in the fourth quarter.

Customer Pricing

Our selling prices fluctuated during the last several years to offset the volatile cost of commodities.
Approximately 30% of our revenue is now subject to agreements that adjust pricing to a market-based index for
lead. Customer pricing changes generally lag movements in lead prices and other costs by approximately six to
nine months. In fiscal 2023, customer pricing has increased due to higher raw material prices and shipping costs,
labor and other costs having increased throughout the year.

Based on the current volatility of the commodity markets, it is difficult to predict with certainty whether
commodity prices will be higher or lower in fiscal 2024 versus fiscal 2023. However, given the lag related to
increasing our selling prices for inflationary cost increases, on average our selling prices should be higher in
fiscal 2024 versus fiscal 2023. As we concentrate more on energy systems and non-lead chemistries, the
emphasis on lead will continue to decline.

Primary Operating Capital

As part of managing the performance of our business, we monitor the level of primary operating capital, and its
ratio to net sales. We define primary operating capital as accounts receivable, plus inventories, minus accounts
payable. The resulting net amount is divided by the trailing three month net sales (annualized) to derive a
primary operating capital percentage. We believe these three elements included in primary operating capital are
most operationally driven, and this performance measure provides us with information about the asset intensity
and operating efficiency of the business on a company-wide basis that management can monitor and analyze
trends over time. Primary operating capital was $1,057.0 million (yielding a primary operating capital percentage
of 26.7%) at March 31, 2023 and $1,042.0 million (yielding a primary working operating percentage of 28.7%)
at March 31, 2022. The primary operating percentage of 26.7% at March 31, 2023 is 200 basis points lower than
that for March 31, 2022, and 220 basis points higher than that for March 31, 2021. The change in the ratio is a
result of the continued supply chain constraints, inflationary pressures across our business, and strategic
inventory build that have outweighed benefits received from the sale of $150.0 million in accounts receivables
through a Receivables Purchase Agreement (RPA) entered into during the third quarter of fiscal 2023.

B-36

Primary Operating Capital and Primary Operating Capital percentages at March 31, 2023, 2022 and 2021 are
computed as follows:

($ in Millions)

March 31,
2023

March 31,
2022

March 31,
2021

Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 637.8 $ 719.4 $ 603.6
518.2
Inventory, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(323.9)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

797.8
(378.6)

715.7
(393.1)

Total primary operating capital . . . . . . . . . . . . . . . . . . . . . . $1,057.0 $1,042.0 $ 797.9

Trailing 3 months net sales . . . . . . . . . . . . . . . . . . . . . . . . . . $ 989.9 $ 907.0 $ 813.5

Trailing 3 months net sales annualized . . . . . . . . . . . . . . . . $3,959.6 $3,628.1 $3,254.2

Primary operating capital as a % of annualized net sales

. .

26.7%

28.7%

24.5%

Liquidity and Capital Resources

We believe that our financial position is strong. We have substantial liquidity with $347 million of available cash
and cash equivalents and available and undrawn, under all its lines of credit of approximately $693 million at
March 31, 2023 to cover short-term liquidity requirements and anticipated growth in the foreseeable future. The
nominal amount of credit available is subject to a leverage ratio maximum of 4.25x EBITDA, as discussed in
Liquidity and Capital Resources.

During the second quarter of fiscal 2023, the Company entered into a third amendment to the 2017 Credit
Facility (as amended, the “Third Amended Credit Facility”). The Third Amended Credit Facility provided new
incremental delayed-draw senior secured term loan up to $300 million (the “Third Amended Term Loan”), which
was available to draw until March 15, 2023. During the fourth quarter, the Company drew $300 million in the
form of the Third Amended Term Loan. The funds will mature on September 30, 2026, the same as the
Company’s Second Amended Term loan and Second Amended Revolver. In connection with the agreement, the
Company incurred $1.2 million in third party administrative and legal fees recognized in interest expense and
capitalized $1.1 million in charges from existing lenders as a deferred asset. Additionally, the Company
derecognized the capitalized deferred asset and recognized the $1.1 million as a deferred financing costs.

During the fourth quarter of fiscal 2023, the Company entered into a fourth amendment to the 2017 Credit
Facility (as amended, the “Fourth Amended Credit Facility”). The Fourth Amended Credit Facility replaces the
London Interbank Offered Rate (“LIBOR”) with the Secured Overnight Financing Rate (“SOFR”) in the
calculation of interest for both the Second Amended Revolver and the Second Amended Term Loan.

During the second quarter of fiscal 2022, we entered into a second amendment to the Amended Credit Facility
(as amended, the “Second Amended Credit Facility”). As a result, the Second Amended Credit Facility, now
scheduled to mature on September 30, 2026, consists of a $130.0 million senior secured term loan (the “Second
Amended Term Loan”), a CAD 106.4 million ($84.2 million) term loan and an $850.0 million senior secured
revolving credit facility (the “Second Amended Revolver”). This amendment resulted in a decrease of the
Amended Term Loan by $150.0 million and an increase of the Amended Revolver by $150.0 million.

During fiscal 2023, our operating cash flow provided cash of $279.9 million, compared to a use of funds of
$65.6 million in the prior year. The change in the operating cash flows in fiscal 2023 was primarily due to the
decreases in primary operating capital dollars, compared to the prior year, reflecting the impact sold receivables
as a part of our asset securitization agreement and less of an increase in inventory compared to the prior year.

In fiscal 2023 and 2022, we repurchased 358,365 and 1,996,334 shares of common stock for $22.9 million and
$156.4 million, respectively. In fiscal 2021, we did not repurchase any shares.

B-37

A substantial majority of the Company’s cash and investments are held by foreign subsidiaries. The majority of
that cash and investments is expected to be utilized to fund local operating activities, capital expenditure
requirements and acquisitions. The Company believes that it has sufficient sources of domestic and foreign
liquidity.

The Federal Reserve Bank of the United States has discontinued quantitative easing and, started raising short-
term interest rates and has signaled they will continue to raise interest rates. The increase in short-term interest
rates will increase EnerSys’ variable cost of borrowing under the Fourth Amended Credit Facility.

We believe that our strong capital structure and liquidity affords us access to capital for future capital
expenditures, acquisition and stock repurchase opportunities and continued dividend payments.

Critical Accounting Policies and Estimates

Our significant accounting policies are described in Note 1—Summary of Significant Accounting Policies to the
Consolidated Financial Statements in Item 8. In preparing our financial statements, management is required to
make estimates and assumptions that, among other things, affect the reported amounts in the Consolidated
Financial Statements and accompanying notes. These estimates and assumptions are most significant where they
involve levels of subjectivity and judgment necessary to account for highly uncertain matters or matters
susceptible to change, and where they can have a material impact on our financial condition and operating
performance. We discuss below the more significant estimates and related assumptions used in the preparation of
our Consolidated Financial Statements. If actual results were to differ materially from the estimates made, the
reported results could be materially affected.

Revenue Recognition

In accordance with ASC 606, we recognize revenue only when we have satisfied a performance obligation
through transferring control of the promised good or service to a customer. The standard indicates that an entity
must determine at contract inception whether it will transfer control of a promised good or service over time or
satisfy the performance obligation at a point in time through analysis of the following criteria: (i) the entity has a
present right to payment, (ii) the customer has legal title, (iii) the customer has physical possession, (iv) the
customer has the significant risks and rewards of ownership and (v) the customer has accepted the asset. Our
primary performance obligation to our customers is the delivery of finished goods and products, pursuant to
purchase orders. Control of the products sold typically transfers to our customers at the point in time when the
goods are shipped as this is also when title generally passes to our customers under the terms and conditions of
our customer arrangements.

Management believes that the accounting estimates related to revenue recognition are critical accounting
estimates because they require reasonable assurance of collection of revenue proceeds and completion of all
performance obligations. Also, revenues are recorded net of provisions for sales discounts and returns, which are
established at the time of sale. These estimates are based on our past experience. For additional information see
Note 1 of Notes to the Consolidated Financial Statements.

Asset Impairment Determinations

We test for the impairment of our goodwill and indefinite-lived trademarks at least annually and whenever events
or circumstances occur indicating that a possible impairment has been incurred.

We assess whether goodwill impairment exists using both qualitative and quantitative assessments. The
qualitative assessment involves determining whether events or circumstances exist that indicate it is more likely
than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If, based on
this qualitative assessment, we determine it is not more likely than not that the fair value of a reporting unit is
less than its carrying amount, or if we elect not to perform a qualitative assessment, a quantitative assessment is
performed to determine whether a goodwill impairment exists at the reporting unit.

B-38

We perform our annual goodwill impairment test on the first day of our fourth quarter for each of our reporting
units based on the income approach, also known as the discounted cash flow (“DCF”) method, which utilizes the
present value of future cash flows to estimate fair value. We also use the market approach, which utilizes market
price data of companies engaged in the same or a similar line of business as that of our company, to estimate fair
value. A reconciliation of the two methods is performed to assess the reasonableness of fair value of each of the
reporting units.

The future cash flows used under the DCF method are derived from estimates of future revenues, operating income,
working capital requirements and capital expenditures, which in turn reflect our expectations of specific global,
industry and market conditions. The discount rate developed for each of the reporting units is based on data and
factors relevant to the economies in which the business operates and other risks associated with those cash flows,
including the potential variability in the amount and timing of the cash flows. A terminal growth rate is applied to
the final year of the projected period and reflects our estimate of stable growth to perpetuity. We then calculate the
present value of the respective cash flows for each reporting unit to arrive at the fair value using the income
approach and then determine the appropriate weighting between the fair value estimated using the income approach
and the fair value estimated using the market approach. Finally, we compare the estimated fair value of each
reporting unit to its respective carrying value in order to determine if the goodwill assigned to each reporting unit is
potentially impaired. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and
no further testing is required. If the fair value of the reporting unit is less than the carrying value, an impairment
charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however,
the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.

Significant assumptions used include management’s estimates of future growth rates, the amount and timing of
future operating cash flows, capital expenditures, discount rates, as well as market and industry conditions and
relevant comparable company multiples for the market approach. Assumptions utilized are highly judgmental,
especially given the role technology plays in driving the demand for products in the telecommunications and
aerospace markets.

Based on the results of the annual impairment test as of January 2, 2023, we determined that there was no
goodwill impairment.

The indefinite-lived trademarks are tested for impairment by comparing the carrying value to the fair value based
on current revenue projections of the related operations, under the relief from royalty method. Any excess
carrying value over the amount of fair value is recognized as impairment. Any impairment would be recognized
in full in the reporting period in which it has been identified.

Based on the results of the annual impairment test as of January 2, 2023, we determined that there were
impairments to two indefinite-lived trademarks. For additional information see Note 7 Notes to the Consolidated
Financial Statements.

With respect to our other long-lived assets other than goodwill and indefinite-lived trademarks, we test for
impairment when indicators of impairment are present. An asset is considered impaired when the undiscounted
estimated net cash flows expected to be generated by the asset are less than its carrying amount. The impairment
recognized is the amount by which the carrying amount exceeds the fair value of the impaired asset.

Business Combinations

We account for business combinations in accordance with ASC 805, Business Combinations. We recognize
assets acquired and liabilities assumed in acquisitions at their fair values as of the acquisition date, with the
acquisition-related transaction and restructuring costs expensed in the period incurred. Determining the fair value
of assets acquired and liabilities assumed often involves estimates based on third-party valuations, such as
appraisals, or internal valuations based on discounted cash flow analyses and may include estimates of attrition,

B-39

inflation, asset growth rates, discount rates, multiples of earnings or other relevant factors. In addition, fair values
are subject to refinement for up to a year after the closing date of an acquisition. Adjustments recorded to the
acquired assets and liabilities are applied prospectively.

Fair values are based on estimates using management’s assumptions using future growth rates, future attrition of
the customer base, discount rates, multiples of earnings or other relevant factors.

Any change in the acquisition date fair value of assets acquired and liabilities assumed may materially affect our
financial position, results of operations and liquidity.

Litigation and Claims

From time to time, the Company has been or may be a party to various legal actions and investigations including,
among others, employment matters, compliance with government regulations, federal and state employment
laws, including wage and hour laws, contractual disputes and other matters, including matters arising in the
ordinary course of business. These claims may be brought by, among others, governments, customers, suppliers
and employees. Management considers the measurement of litigation reserves as a critical accounting estimate
because of the significant uncertainty in some cases relating to the outcome of potential claims or litigation and
the difficulty of predicting the likelihood and range of potential liability involved, coupled with the material
impact on our results of operations that could result from litigation or other claims.

In determining legal reserves, management considers, among other inputs:

•

interpretation of contractual rights and obligations;

the status of government regulatory initiatives, interpretations and investigations;

the status of settlement negotiations;

prior experience with similar types of claims;

• whether there is available insurance coverage; and

•

advice of outside counsel.

For certain matters, management is able to estimate a range of losses. When a loss is probable, but no amount of
loss within a range of outcomes is more likely than any other outcome, management will record a liability based
on the low end of the estimated range. Additionally, management will evaluate whether losses in excess of
amounts accrued are reasonably possible, and will make disclosure of those matters based on an assessment of
the materiality of those addition possible losses.

Environmental Loss Contingencies

Accruals for environmental loss contingencies (i.e., environmental reserves) are recorded when it is probable that
a liability has been incurred and the amount can reasonably be estimated. Management views the measurement of
environmental reserves as a critical accounting estimate because of the considerable uncertainty surrounding
estimation, including the need to forecast well into the future. From time to time, we may be involved in legal
proceedings under federal, state and local, as well as international environmental laws in connection with our
operations and companies that we have acquired. The estimation of environmental reserves is based on the
evaluation of currently available information, prior experience in the remediation of contaminated sites and
assumptions with respect to government regulations and enforcement activity, changes in remediation technology
and practices, and financial obligations and creditworthiness of other responsible parties and insurers.

Warranty

We record a warranty reserve for possible claims against our product warranties, which generally run for a period
ranging from one to twenty years for our Energy Systems batteries, one to five years for our Motive Power

B-40

batteries and for a period ranging from one to four for Specialty transportation batteries. The assessment of the
adequacy of the reserve includes a review of open claims and historical experience.

Management believes that the accounting estimate related to the warranty reserve is a critical accounting estimate
because the underlying assumptions used for the reserve can change from time to time and warranty claims could
potentially have a material impact on our results of operations.

Allowance for Doubtful Accounts

Subsequent to the adoption of ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326)” effective
April 1, 2020 the Company uses an expected loss model as mandated by the standard. The expected loss model:
(i) estimates the risk of loss even when risk is remote, (ii) estimates losses over the contractual life, (iii) considers
past events, current conditions and reasonable supported forecasts and (iv) has no recognition threshold.

The Company estimates the allowance for credit losses in relation to accounts receivable based on relevant
qualitative and quantitative information about historical events, current conditions, and reasonable and
supportable forecasts that affect the collectability of the reported accounts receivable. Subsequent to April 1,
2020, accounts receivable are recorded at amortized cost less an allowance for expected credit losses. The
Company maintains an allowance for credit losses for the expected failure or inability of its customers to make
required payments. The Company recognizes the allowance for expected credit losses at inception and reassesses
quarterly, based on management’s expectation of the asset’s collectability. The allowance is based on multiple
factors including historical experience with bad debts, the credit quality of the customer base, the aging of such
receivables and current macroeconomic conditions, as well as management’s expectations of conditions in the
future. The Company’s allowance for uncollectible accounts receivable is based on management’s assessment of
the collectability of assets pooled together with similar risk characteristics. The Company then adjusts the
historical credit loss percentage by current and forecasted economic conditions. The Company then includes a
baseline credit loss percentage into the historical credit loss percentage for each aging category to reflect the
potential impact of the current and economic conditions. Such a baseline calculation will be adjusted further if
changes in the economic environment impacts the Company’s expectation for future credit losses.

Management believes that the accounting estimate related to the allowance for doubtful accounts is a critical
accounting estimate because the underlying assumptions used for the allowance can change from time to time
and uncollectible accounts could potentially have a material impact on our results of operations.

Retirement Plans

We use certain economic and demographic assumptions in the calculation of the actuarial valuation of liabilities
associated with our defined benefit plans. These assumptions include the discount rate, expected long-term rates of
return on assets and rates of increase in compensation levels. Changes in these assumptions can result in changes to
the pension expense and recorded liabilities. Management reviews these assumptions at least annually. We use
independent actuaries to assist us in formulating assumptions and making estimates. These assumptions are updated
periodically to reflect the actual experience and expectations on a plan-specific basis, as appropriate.

For benefit plans which are funded, we establish strategic asset allocation percentage targets and appropriate
benchmarks for significant asset classes with the aim of achieving a prudent balance between return and risk. We
set the expected long-term rate of return based on the expected long-term average rates of return to be achieved
by the underlying investment portfolios. In establishing this rate, we consider historical and expected returns for
the asset classes in which the plans are invested, advice from pension consultants and investment advisors, and
current economic and capital market conditions. The expected return on plan assets is incorporated into the
computation of pension expense. The difference between this expected return and the actual return on plan assets
is deferred and will affect future net periodic pension costs through subsequent amortization.

B-41

We believe that the current assumptions used to estimate plan obligations and annual expense are appropriate in
the current economic environment. However, if economic conditions change materially, we may change our
assumptions, and the resulting change could have a material impact on the Consolidated Statements of Income
and on the Consolidated Balance Sheets.

Equity-Based Compensation

We recognize compensation cost relating to equity-based payment transactions by using a fair-value
measurement method whereby all equity-based payments to employees, including grants of restricted stock units,
stock options, market and performance condition-based awards are recognized as compensation expense based
on fair value at grant date over the requisite service period of the awards. We determine the fair value of
restricted stock units based on the quoted market price of our common stock on the date of grant. The fair value
of stock options is determined using the Black-Scholes option-pricing model, which uses both historical and
current market data to estimate the fair value. The fair value of market condition-based awards is estimated at the
date of grant using a Monte Carlo Simulation. The fair value of performance condition-based awards is based on
the closing stock price on the date of grant, adjusted for a discount to reflect the illiquidity inherent in these
awards.

All models incorporate various assumptions such as the risk-free interest rate, expected volatility, expected
dividend yield and expected life of the awards. When estimating the requisite service period of the awards, we
consider many related factors including types of awards, employee class, and historical experience. Actual
results, and future changes in estimates of the requisite service period may differ substantially from our current
estimates.

Income Taxes

Our effective tax rate is based on pretax income and statutory tax rates available in the various jurisdictions in
which we operate. We account for income taxes in accordance with applicable guidance on accounting for
income taxes, which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the
effect of temporary differences between book and tax bases on recorded assets and liabilities. Accounting
guidance also requires that deferred tax assets be reduced by a valuation allowance, when it is more likely than
not that a tax benefit will not be realized.

The recognition and measurement of a tax position is based on management’s best judgment given the facts,
circumstances and information available at the reporting date. We evaluate tax positions to determine whether the
benefits of tax positions are more likely than not of being sustained upon audit based on the technical merits of the tax
position. For tax positions that are more likely than not of being sustained upon audit, we recognize the largest amount
of the benefit that is greater than 50% likely of being realized upon ultimate settlement in the financial statements. For
tax positions that are not more likely than not of being sustained upon audit, we do not recognize any portion of the
benefit in the financial statements. If the more likely than not threshold is not met in the period for which a tax position
is taken, we may subsequently recognize the benefit of that tax position if the tax matter is effectively settled, the
statute of limitations expires, or if the more likely than not threshold is met in a subsequent period.

We evaluate, on a quarterly basis, our ability to realize deferred tax assets by assessing our valuation allowance
and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of
realization are our forecast of future taxable income and available tax planning strategies that could be
implemented to realize the net deferred tax assets.

To the extent we prevail in matters for which reserves have been established, or are required to pay amounts in
excess of our reserves, our effective tax rate in a given financial statement period could be materially affected.

B-42

Results of Operations—Fiscal 2023 Compared to Fiscal 2022

The following table presents summary Consolidated Statements of Income data for fiscal year ended March 31,
2023, compared to fiscal year ended March 31, 2022:

Fiscal 2023

Fiscal 2022

Increase (Decrease)

In
Millions

As %
Net Sales

In
Millions

As %
Net Sales

In
Millions

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,708.5 100.0% $3,357.3 100.0% $351.2 10.5%
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory adjustment relating to exit activities . . . . . . . . .

263.1 10.1
(2.0) (73.8)

77.3
0.6 —

2,604.7
2.6

77.6
0.1

2,867.8

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring and other exit charges . . . . . . . . . . . . . . . . .
Impairment of indefinite-lived intangibles . . . . . . . . . . . .
Loss on assets held for sale . . . . . . . . . . . . . . . . . . . . . . . .

22.7
840.1
14.7
544.9
0.4
16.4
0.5
0.1
— —

Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (income) expense, net . . . . . . . . . . . . . . . . . . . . . . .

Earnings before income taxes . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

278.3
59.5
8.2

210.6
34.8

7.5
1.6
0.2

5.7
0.9

750.0
520.8
18.8

22.3
15.5
0.6
1.2 —
0.1
3.0

206.2
37.8
(5.5)

173.9
30.0

6.1
1.1
(0.2)

5.2
0.9

90.1 12.0
4.6
24.1
(2.4) (12.4)
(0.7) (59.3)
(3.0) NM

72.1 35.0
21.7 57.6
13.7 NM

36.7 21.1
4.8 16.0

Net earnings attributable to EnerSys stockholders . . . . . . $ 175.8

4.8% $ 143.9

4.3% $ 31.9 22.2%

NM = not meaningful

Overview

Our sales in fiscal 2023 were $3.7 billion, a 10.5% increase from prior year’s sales. This increase was due to an
8% increase in pricing, and 7% in organic growth, partially offset by a 4% decrease in foreign currency
translation impact.

A discussion of specific fiscal 2023 versus fiscal 2022 operating results follows, including an analysis and
discussion of the results of our reportable segments.

Net Sales

Segment sales

Fiscal 2023

Fiscal 2022

Increase (Decrease)

In
Millions

% Net
Sales

In
Millions

% Net
Sales

In
Millions

Energy Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Motive Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Specialty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,738.1
1,451.3
519.1

46.9% $1,536.6
1,361.2
39.1
459.5
14.0

45.8% $201.5
90.1
40.5
59.6
13.7

13.1%
6.6
13.0

Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$3,708.5 100.0% $3,357.3 100.0% $351.2

10.5%

Net sales of our Energy Systems segment in fiscal 2023 increased $201.5 million, or 13.1%, compared to fiscal
2022. This increase was due to a 9% increase in organic volume and an 8% increase in pricing, partially offset by
a 4% decrease in foreign currency translation impact. This increase in sales was driven by an increase in pricing/
mix and organic volume primarily as a result of improved component availability and pass through of higher
costs, as well as organic volume primarily in Americas battery systems.

B-43

Net sales of our Motive Power segment in fiscal 2023 increased by $90.1 million, or 6.6%, compared to fiscal
2022. This increase was due to a 9% increase in pricing and a 3% increase in organic volume partially offset by a
5% decrease in foreign currency translation impact. We continue to benefit from continued improved pricing and
favorable sales mix as we grow our maintenance free products.

Net sales of our Specialty segment in fiscal 2023 increased by $59.6 million, or 13%, compared to fiscal 2022.
The increase was due to a 9% increase in organic volume and a 6% increase in pricing, partially offset by a 2%
decrease in foreign currency translation impact. This increase in net sales was primarily driven by improved
pricing and strong market demand.

Gross Profit

Fiscal 2023

Fiscal 2022

Increase (Decrease)

In
Millions

As %
Net Sales

In
Millions

As %
Net Sales

In
Millions

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$840.1

22.7% $750.0

22.3%

$90.1

12.0%

Gross profit increased $90.1 million or 12.0% in fiscal 2023 compared to fiscal 2022. Gross profit, as a
percentage of net sales increased 40 basis points in fiscal 2023 compared to fiscal 2022. The increase in the gross
profit margin in fiscal 2023 compared to the prior year reflects the impact of organic volume increases,
aggressive price recoveries, and mix improvement more than offsetting the negative impact of higher freight
costs and component shortages from our supply chain along with other inflationary pressures in raw materials,
labor, supplies and utilities.

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted. The IRA includes multiple
incentives to promote clean energy, and energy storage manufacturing among other provisions with tax credits
available from 2023 to 2032, subject to phase down beginning in 2030. In particular the IRA creates a refundable
tax credit, pursuant to Section 45X of the Internal Revenue Code (“IRC”), for battery cells and battery modules
manufactured or assembled in the United States and sold to third parties. In the period ended March 31, 2023, the
IRA impact resulted in a $17.3 million reduction of our costs of goods sold and income tax payable. We will
continue to evaluate the effects of IRA as more guidance is issued and the relevant implications to our
consolidated financial statements.

Operating Items

Fiscal 2023

Fiscal 2022

Increase (Decrease)

In
Millions

As %
Net Sales

In
Millions

As %
Net Sales

In
Millions

Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$544.9

14.7% $520.8

15.5%

$24.1

4.6%

Restructuring, exit and other charges . . . . . . . . . . . . . .
Impairment of indefinite-lived intangibles . . . . . . . . . .

16.4
0.5

0.4
0.1

18.8
0.6
1.2 —

(2.4)
(0.7)

(12.4)
(59.3)

Operating Expenses

Operating expenses increased $24.1 million or 4.6% in fiscal 2023 from fiscal 2022 and decreased as a
percentage of net sales by 80 basis points. Selling expenses, our main component of operating expenses,
increased $6.1 million or 2.8% in fiscal 2023 compared to fiscal 2022.

B-44

Restructuring, exit and other charges

Exit Charges

Fiscal 2023 Programs

Sylmar

In November 2022, the Company committed to a plan to close its facility in Sylmar, California, which
manufactures specialty lithium batteries for aerospace and medical applications. Management determined to
close the site upon the expiration of its lease on the property and to redirect production through consolidation into
existing locations. The Company currently estimates total charges in the exit to amount to $5.5 million. Cash
charges are estimated to total $4.4 million primarily relating to severance and other costs to leave the site.
Non-cash charges are estimated to be $1.1 million relating to fixed assets, inventory, and contract assets. The
plan is expected to be completed in fiscal 2024.

During fiscal 2023, the Company recorded $1.7 million primarily related to severance costs and non-cash charges
totaling $0.4 million primarily relating to contract assets.

Ooltewah

In June, 2022, the Company committed to a plan to close its facility in Ooltewah, Tennessee, which produced
flooded motive power batteries for electric forklifts. Management determined that future demand for traditional
motive power flooded cells will decrease as customers transition to maintenance free product solutions in lithium
and TPPL. The Company currently estimates that the total charges for these actions will amount to
approximately $18.5 million. Cash charges for employee severance related payments, cleanup related to the
facility, contractual releases and legal expenses are estimated to be $9.2 million and non-cash charges from
inventory and fixed asset write-offs are estimated to be $9.3 million. These actions will result in the reduction of
approximately 165 employees. The plan is expected to be completed in calendar 2023.

During fiscal 2023, the Company recorded cash charges relating primarily to severance and manufacturing
variances of $2.8 million and non-cash charges of $7.3 million relating to fixed asset write-offs. The Company also
recorded a non-cash write-off relating to inventories of $1.6 million, which was reported in cost of goods sold.

Fiscal 2022 Programs

Russia

In February 2022, as a result of the Russia-Ukraine conflict, economic sanctions were imposed on Russian
individuals and entities, including financial institutions, by countries around the world, including the U.S. and the
European Union. On March 3, 2022, the Company announced that it was indefinitely suspending its operations in
Russia in order to comply with the sanctions. As a result of this decision, the Company wrote off net assets of
$4.0 million relating to its Russian subsidiary. The Company also incurred cash charges of $1.3 million relating
to severance and exiting lease obligations. During fiscal 2023, the Company sold inventory previously written off
resulting in the reversal of $0.9 million in cost of goods sold and reversal of $0.7 million of cash charges
primarily relating to lease obligations.

Zamudio, Spain

During fiscal 2022, the Company closed a minor assembling plant in Zamudio, Spain and sold the same for
$1.8 million. A net gain of $0.7 million was recorded as a credit to exit charges in the Consolidated Statements of
Income.

B-45

Fiscal 2021 Programs

Hagen, Germany

In fiscal 2021, we committed to a plan to close substantially all of our facility in Hagen, Germany, which
produces flooded motive power batteries for forklifts. Management determined that future demand for the motive
power batteries produced at this facility was not sufficient, given the conversion from flooded to maintenance
free batteries by customers, the existing number of competitors in the market, as well as the near term decline in
demand and increased uncertainty from the pandemic. We plan to retain the facility with limited sales, service
and administrative functions along with related personnel for the foreseeable future.

We currently estimate that the total charges for these actions will amount to approximately $60.0 million, the
majority of which were recorded by the end of calendar 2021. Cash charges of approximately $40.0 million are
primarily for employee severance related payments, but also include payments for cleanup related to the facility,
contractual releases and legal expenses. Non-cash charges from inventory and equipment write-offs are estimated
to be $20.0 million. These actions resulted in the reduction of approximately 200 employees.

During fiscal 2023, the Company recorded cash charges of $2.2 million relating primarily to site cleanup and
$0.6 million of non-cash charges relating to accelerated depreciation of fixed assets.

During fiscal 2022, the Company recorded cash charges, primarily relating to severance of $8.1 million and
non-cash charges of $3.5 million primarily relating to fixed asset write-offs. The Company also recorded a
non-cash write off relating to inventories of $1.0 million, which was reported in cost of goods sold.

During fiscal 2021, the Company recorded charges relating to severance of $23.3 million and $7.9 million
primarily relating to fixed asset write-offs.

Targovishte, Bulgaria

Impairment of indefinite-lived intangibles

During the fourth quarter of fiscal 2023 and 2022, the Company recorded non-cash charges of $0.5 million and
$1.2 million, respectively, related to impairment of indefinite-lived trademarks. Management completed its
evaluation of key inputs used to estimate the fair value of its indefinite-lived trademarks and determined that an
impairment charge was appropriate.

Loss on assets held for sale

Vijayawada, India

During fiscal 2021, we also committed to a plan to close our facility in Vijayawada, India to align with the
strategic vision for our new line of business structure and footprint and recorded exit charges of $1.5 million
primarily relating to asset write-offs. In fiscal 2022, the Company reclassified property, plant and equipment with
a carrying value of $4.6 million to assets held for sale on the Consolidated Balance Sheet and recognized an
impairment loss of $3.0 million under the caption Loss on assets held for sale on its Consolidated Statement of
Income, by writing down the carrying value of these assets to their estimated fair value of $1.6 million, based on
their expected proceeds, less costs to sell. We also recorded a non-cash write off relating to inventories of
$0.8 million, which was reported in cost of goods sold.

B-46

Operating Earnings

Operating earnings by segment were as follows:

Energy Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Motive Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Specialty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Production tax credits from IRA 45X . . . . . . . . . . . . .
Inventory adjustment relating to exit activities—

Fiscal 2023

Fiscal 2022

Increase (Decrease)

In
Millions

As %
Net Sales(1)

In
Millions

As %
Net Sales(1)

In
Millions

$ 62.2
178.8
37.5

278.5
17.3

3.6% $ 18.6
169.7
12.3
43.5
7.2

7.5
0.5

231.8
—

1.2%
12.5
9.5

6.9
—

$43.6
9.1
(6.0)

46.7
17.3

NM
7.8
4.3

27.7
NM

Energy Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.2

—

(0.2) —

0.4

Inventory adjustment relating to exit activities—

Motive Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(0.8)

(0.1)

(2.4)

(0.2)

1.6

(63.1)

Restructuring and other exit charges—Energy

Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1.5)

(0.1)

(2.8)

(0.2)

1.3

(46.9)

Restructuring and other exit charges—Motive

Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring and other exit charges—Specialty . . . .
Impairment of indefinite-lived intangibles—Energy

(12.8)
(2.1)

(0.9)
(0.4)

(17.1)
1.1

(1.3)
0.2

4.3
(24.6)
(3.2) NM

Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(0.1) —

(0.5) —

0.4

Impairment of indefinite-lived intangibles—Motive

Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

(0.7) —

0.7

(80.0)

Impairment of indefinite-lived intangibles—

Specialty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on assets held for sale—Motive Power . . . . . . .

(0.4)

(0.1)
—

—
(3.0)

—
(0.2)

(0.4) NM
NM
3.0

Total operating earnings . . . . . . . . . . . . . . . . . . . . . . .

$278.3

7.5% $206.2

6.1%

$72.1

35.0%

NM = not meaningful
(1) The percentages shown for the segments are computed as a percentage of the applicable segment’s net sales.

Operating earnings increased $72.1 million or 35.0% in fiscal 2023, compared to fiscal 2022. Operating earnings,
as a percentage of net sales, increased 140 basis points in fiscal 2023, compared to fiscal 2022.

The Energy Systems operating earnings percentage of net sales increased 240 basis points in fiscal 2023
compared to fiscal 2022. The increase in operating earnings is as a result of improvements in pricing and volume
offset by an increase in lead pricing, high inflationary costs in raw materials costs, higher freight costs, warranty/
inventory provisions, and selling, general, and administrative costs.

The Motive Power operating earnings as a percentage of net sales decreased 20 basis points in fiscal 2023
compared to fiscal 2022. This decrease was driven by the impact of zero-margin pricing pass through of
inflationary costs and adverse foreign currency translation impact, partially offset by improved product mix.

Specialty operating earnings percentage of net sales decreased 230 basis points in fiscal 2023 compared to fiscal
2022. Pricing and customer demand in the transportation and aerospace and defense markets were stronger in the
current year compared to prior year, but capacity constraints and higher inflation costs, combined with increased
operating expenses negatively impacted the performance of this line of business.

B-47

Interest Expense

Fiscal 2023

Fiscal 2022

Increase (Decrease)

In
Millions

As %
Net Sales

In
Millions

As %
Net Sales

In
Millions

Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$59.5

1.6%

$37.8

1.1%

$21.7

57.6%

Interest expense of $59.5 million in fiscal 2023 (net of interest income of $1.7 million) was $21.7 million higher
than the $37.8 million in fiscal 2022 (net of interest income of $2.1 million).

Our average debt outstanding was $1,303.4 million in fiscal 2023, compared to our average debt outstanding of
$1,150.7 million in fiscal 2022. Our average cash interest rate incurred in fiscal 2023 and fiscal 2022 was 4.6%
and 3.3%, respectively. The increase in interest expense in fiscal 2023 compared to fiscal 2022 is primarily due
to higher borrowing levels, higher short term interest rates, and an additional $1.2 million in third party
administrative and legal fees related to the Third Amended Credit Facility, partially offset by the benefit from the
$300 million and $150 million cross currency fixed interest rate swaps.

In fiscal 2023, the Company capitalized $1.2 million in debt issuance costs in connection with the Third and
Fourth Amended Credit Facilities. In fiscal 2022, in connection with the Second Amended Credit Facility, we
capitalized $3.0 million in debt issuance costs and wrote off $0.1 million of unamortized debt issuance costs.
Included in interest expense were non-cash charges related to amortization of deferred financing fees of
$2.0 million and $2.1 million in fiscal 2023 and fiscal 2022, respectively.

Other (Income) Expense, Net

Other (income) expense, net . . . . . . . . . . . . . . . . . . . . . .

$8.2

0.2%

$(5.5)

(0.2)% $13.7 NM

Fiscal 2023

Fiscal 2022

Increase (Decrease)

In
Millions

As %
Net Sales

In
Millions

As %
Net Sales

In
Millions

NM = not meaningful

Other (income) expense, net was expense of $8.2 million in fiscal 2023 compared to income of $5.5 million in
fiscal 2022. Foreign currency impact resulted in a loss of $0.7 million in fiscal 2023 compared to a foreign
currency gain of $7.2 million in fiscal 2022. Included in the fiscal 2023 foreign currency impact is a loss of
$4.5 million relating to the remeasurement of monetary assets from the exit of our Russia operations.
Additionally, we incurred $1.4 million in costs to terminate our net investment hedges and $0.6 million in
transaction fees relating to the asset securitization agreement.

Earnings Before Income Taxes

Fiscal 2023

Fiscal 2022

Increase (Decrease)

In
Millions

As %
Net Sales

In
Millions

As %
Net Sales

In
Millions

Earnings before income taxes . . . . . . . . . . . . . . . . . . . .

$210.6

5.7% $173.9

5.2%

$36.7

21.1%

As a result of the factors discussed above, fiscal 2023 earnings before income taxes were $210.6 million, an
increase of $36.7 million or 21.1% compared to fiscal 2022.

B-48

Income Tax Expense

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$34.8

0.9%

$30.0

0.9%

$ 4.8

16.0%

Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.5%

17.3%

(0.8)%

Fiscal 2023

Fiscal 2022

Increase (Decrease)

In
Millions

As %
Net Sales

In
Millions

As %
Net Sales

In
Millions

Our effective income tax rate with respect to any period may be volatile based on the mix of income in the tax
jurisdictions in which we operate and the amount of our consolidated income before taxes.

The Company’s income tax provision consists of federal, state and foreign income taxes. The effective income
tax rate was 16.5% in fiscal 2023 compared to the fiscal 2022 effective income tax rate of 17.3%. The rate
decrease in fiscal 2023 compared to fiscal 2022 is primarily due to the impact of the IRA and changes in the mix
of earnings among tax jurisdictions.

The fiscal 2023 foreign effective income tax rate was 16.8% on foreign pre-tax income of $171.9 million
compared to an effective income tax rate of 11.0% on foreign pre-tax income of $152.1 million in fiscal 2022.
For both fiscal 2023 and fiscal 2022, the difference in the foreign effective tax rate versus the U.S. statutory rate
of 21% is primarily attributable to lower tax rates in the foreign countries in which we operate. The rate increase
in fiscal 2023 compared to fiscal 2022 is primarily due to a reduction in favorable permanent items and changes
in mix of earnings among tax jurisdictions.

Liquidity and Capital Resources

Cash Flow and Financing Activities

Cash and cash equivalents at March 31, 2023, 2022 and 2021, were $346.7 million, $402.5 million and
$451.8 million, respectively.

Cash provided by operating activities for fiscal 2023 was $279.9 million. Cash used by operating activities for
2022 was $65.6 million and cash provided by operating activities in 2021 was $358.4 million.

During fiscal 2023, accounts receivable decreased or provided cash of $67.6 million due to sale of $150.0 million
accounts receivable under the RPA entered into December 21, 2022. Inventory increased or used cash of
$96.4 million. All components of inventory increased due to strategic investment, supply chain delays, new
products and higher inventory costs from higher raw material costs, manufacturing, and to address the high backlog
of customer orders. Accounts payable decreased or used cash of $4.2 million due to timing of payments for strategic
inventory. Net earnings were $175.8 million, depreciation and amortization $91.2 million, stock-based
compensation, $26.4 million, non-cash charges relating to exit charges of $8.9 million, primarily relating to the
Ooltewah and Sylmar plant closures, exiting our operations in Russia following the conflict in Ukraine, non-cash
interest of $2.0 million, and non-cash charges for impairment of indefinite-lived intangibles of $0.5 million. Prepaid
and other current assets provided funds of $23.7 million, primarily from an increase of $10.8 million of contract
assets, as well as an increase of $12.9 million in other prepaid expenses, such as taxes, insurance and other
advances. Accrued expenses provided funds of $5.7 million primarily from increases to contract liabilities of
$6.3 million, freight of $2.4 million, warranties of $2.2 million, and other miscellaneous accruals of $5.2 million
partially offset by decreases to tax related liabilities of $7.8 million, including the decrease in income taxes payable
of $17.3 million related to the IRA production credits, and interest payments net of accruals of $3.2 million.

During fiscal 2022, accounts receivable increased or used cash of $129.0 million due to higher revenue during
fiscal 2022, as compared to a COVID-19 restricted revenue in fiscal 2021. Inventory increased or used cash of
$212.8 million due to supply chain delays, new products and higher inventory costs from higher raw material

B-49

costs, manufacturing and freight costs, strategic inventory builds to buffer against potential supply chain
exposures and to address the high backlog of customer orders. Accounts payable increased or provided cash of
$65.3 million. Net earnings were $143.9 million, depreciation and amortization $95.9 million, stock-based
compensation $24.3 million, non-cash charges relating to exit charges of $6.5 million, primarily relating to the
Hagen, Germany plant closure and exiting our operations in Russia following the conflict in Ukraine, loss on
valuation of the assets held for sale in India of $3.0 million, allowance for doubtful debts of $2.6 million,
non-cash interest of $2.1 million and non-cash charges for impairment of indefinite-lived intangibles of
$1.2 million. Prepaid and other current assets were a use of funds of $32.0 million, primarily from an increase of
$13.6 million of contract assets, as well as an increase of $12.3 million in other prepaid expenses, such as taxes,
insurance and other advances. Accrued expenses were a use of funds of $38.6 million primarily from Hagen
severance payments of $19.6 million, income tax payments of $17.3 million net of tax provisions, payroll related
payments of $10.1 million, partially offset by customer advances of $8.9 million.

During fiscal 2021, accounts receivable decreased or provided cash of $8.7 million due to improved collections.
Inventory decreased or provided cash of $24.2 million due to improved inventory turns and accounts payable
increased or provided cash of $20.8 million due to our TPPL plant ramp-up. Net earnings were $143.3 million,
depreciation and amortization $94.1 million, stock-based compensation $19.8 million, non-cash charges relating
to exit charges $10.2 million, primarily relating to the Hagen, Germany plant closure, net gain from the disposal
of assets of $3.9 million ($4.4 million from the insurance settlement relating to the Richmond fire claim),
deferred tax benefit of $9.0 million and non-cash interest of $2.1 million. Prepaid and other current assets
provided a source of funds of $27.3 million, primarily from the receipt of $29.1 million towards the insurance
receivable relating to the Richmond plant claim in fiscal 2020 and the receipt of a working capital adjustment
claim of $2.0 million, relating to an acquisition made several years ago, partially offset by an increase of
$3.8 million in other prepaid expenses. Accrued expenses provided a source of funds of $32.4 million primarily
from payroll related accruals of $27.8 million, taxes payable of $4.5 million and selling and other expenses of
$3.3 million, partially offset by payments relating to warranty of $5.8 million. Other liabilities decreased by
$12.7 million primarily relating to income taxes.

Cash used in investing activities for fiscal 2023, 2022 and 2021 was $44.8 million, $69.2 million and
$65.0 million, respectively.

During fiscal 2023, 2022, and fiscal 2021 we did not make any acquisitions.

Capital expenditures were $88.8 million, $74.0 million and $70.0 million in fiscal 2023, 2022 and 2021,
respectively.

In fiscal 2023, we received proceeds from termination of a net investment hedge of $43.4 million, and we
received $3.3 million from the sale of two of our facilities in Europe during fiscal 2022.

Financing activities used cash of $270.5 million in fiscal 2023. During fiscal 2023, we entered into the Third
Amended Credit Facility providing additional borrowing through the Third Amended Term Loan. The proceeds
of $300.0 million from the new Third Amended Term Loan were used to repay our 2023 Senior notes for the
same amount. Additionally, we borrowed $310.5 million under the Second Amended Revolver and repaid
$500.5 million of the Second Amended Revolver and $5.2 million of the Second Amended Term loan. Net
repayments on short-term debt were $21.7 million. Payment of cash dividends to our stockholders were
$28.5 million, treasury stock open market purchases were $22.9 million, and payment of taxes related to net
share settlement of equity awards were $6.4 million. Proceeds from stock options were $4.4 million, and
payments for financing costs for debt modification were $1.1 million.

During the second quarter of fiscal 2022, we entered into the Second Amended Credit Facility. As a result,
financing activities provided cash of $98.4 million in fiscal 2022. During fiscal 2022, we borrowed
$523.4 million under the Second Amended Revolver and repaid $88.4 million of the Second Amended Revolver.

B-50

Repayment on the Second Amended Term Loan was $161.4 million and net borrowings on short-term debt were
$20.6 million. Treasury stock open market purchases were $156.4 million, payment of cash dividends to our
stockholders were $29.4 million and payment of taxes related to net share settlement of equity awards were
$9.1 million. Debt issuance costs relating to the refinancing of the Second Amended Credit Facility was
$3.0 million. Proceeds from stock options were $1.3 million.

During fiscal 2021, financing activities provided cash of $188.7 million. We borrowed $102.0 million under the
Amended 2017 Revolver and repaid $210.0 million of the Amended 2017 Revolver. Repayment on the Amended
2017 Term Loan was $39.6 million and net payments on short-term debt were $15.9 million. Proceeds from
stock options during fiscal 2021 were $9.1 million. Payment of cash dividends to our stockholders were
$29.8 million, payment of taxes related to net share settlement of equity awards were $5.2 million.

Currency translation had a negative impact of $20.5 million on our cash balance in the twelve months of fiscal
2023 compared to the negative impact of $12.9 million in the twelve months of fiscal 2022. In the twelve months
of fiscal 2023, principal currencies in which we do business such as the Euro, Polish zloty, and British pound
generally weakened and Swiss franc strengthened versus the U.S. dollar.

As a result of the above, total cash and cash equivalents decreased by $55.8 million from $402.5 million at
March 31, 2022 to $346.7 million at March 31, 2023.

In addition to cash flows from operating activities, we had available committed and uncommitted credit lines of
approximately $693.4 million at March 31, 2023 to cover short-term liquidity requirements. Our Fourth
Amended Credit Facility is committed through September 30, 2026, as long as we continue to comply with the
covenants and conditions of the credit facility agreement.

Compliance with Debt Covenants

All obligations under our Fourth Amended Credit Facility are secured by, among other things, substantially all of
our U.S. assets. The Fourth Amended Credit Facility contains various covenants which, absent prepayment in full
of the indebtedness and other obligations, or the receipt of waivers, limit our ability to conduct certain specified
business transactions, buy or sell assets out of the ordinary course of business, engage in sale and leaseback
transactions, pay dividends and take certain other actions. There are no prepayment penalties on loans under this
credit facility.

We are in compliance with all covenants and conditions under our Fourth Amended Credit Facility and Senior
Notes. We believe that we will continue to comply with these covenants and conditions, and that we have the
financial resources and the capital available to fund the foreseeable organic growth in our business and to remain
active in pursuing further acquisition opportunities. See Note 10 to the Consolidated Financial Statements
included in this Annual Report on Form 10-K.

Off-Balance Sheet Arrangements

The Company did not have any off-balance sheet arrangements during any of the periods covered by this report.

B-51

Contractual Obligations and Commercial Commitments

At March 31, 2023, we had certain cash obligations, which are due as follows:

Total

Less than
1 year

2 to 3
years

4 to 5
years

After
5 years

Debt obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest on debt(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax Act—Transition Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension benefit payments and profit sharing . . . . . . . . . . . . . . .
Purchase commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(in millions)
$1,048.4 $ 25.4 $ 76.3 $ 946.7 $ —
— —
31.6 —
22.9
17.7
— —
8.5
22.1
— —

30.6
218.0
101.7
46.3
40.2
13.9

—
120.8
36.3
34.7
6.6
—

30.6
65.6
24.8
11.6
3.0
13.9

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,499.1 $174.9 $274.7 $1,009.7 $39.8

(1) Interest payments for variable rate debt was calculated using the current applicable rate.

Due to the uncertainty of future cash outflows, uncertain tax positions have been excluded from the above table.

Under our Fourth Amended Credit Facility and other credit arrangements, we had outstanding standby letters of
credit of $3.6 million as of March 31, 2023.

Credit Facilities and Leverage

Shown below are the leverage ratios at March 31, 2023 and 2022, in connection with the Fourth Amended Credit
Facility.

The total net debt, as defined under the Fourth Amended Credit Facility is $736.0 million for fiscal 2023 and is
1.8 times adjusted EBITDA (non-GAAP), compared to total net debt of $905.9 million and 2.5 times adjusted
EBITDA (non-GAAP) for fiscal 2022.

B-52

The following table provides a reconciliation of net earnings to EBITDA (non-GAAP) and adjusted EBITDA
(non-GAAP) for March 31, 2023 and 2022, in connection with the Second Amended Credit Facility:

Net earnings as reported . . . . . . . . . . . . . . . . . . . . . . . . . .
Add back:

Fiscal 2023

Fiscal 2022

(in millions, except ratios)
$ 143.9
$ 175.8

Depreciation and amortization . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . .

91.2
59.5
34.8

95.9
37.8
30.0

EBITDA (non GAAP)(1) . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments per credit agreement definitions(2) . . . . . . . .

$ 361.3
51.7

$ 307.6
51.5

Adjusted EBITDA (non-GAAP) per credit

agreement(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 413.0

$ 359.1

Total net debt(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 736.0

$ 905.9

Leverage ratios(4):

Total net debt/adjusted EBITDA ratio . . . . . . . . . . . .
Maximum ratio permitted . . . . . . . . . . . . . . . . . . . . .
Consolidated interest coverage ratio(5) . . . . . . . . . . .
Minimum ratio required . . . . . . . . . . . . . . . . . . . . . . .

1.8 X
4.25 X
7.3 X
3.0 X

2.5 X
3.5 X
10.0 X
3.0 X

(1) We have included EBITDA (non-GAAP) and adjusted EBITDA (non-GAAP) because our lenders use them
as key measures of our performance. EBITDA is defined as earnings before interest expense, income tax
expense, depreciation and amortization. EBITDA is not a measure of financial performance under GAAP
and should not be considered an alternative to net earnings or any other measure of performance under
GAAP or to cash flows from operating, investing or financing activities as an indicator of cash flows or as a
measure of liquidity. Our calculation of EBITDA may be different from the calculations used by other
companies, and therefore comparability may be limited. Certain financial covenants in our Fourth Amended
Credit Facility are based on EBITDA, subject to adjustments, which are shown above. Continued
availability of credit under our Fourth Amended Credit Facility is critical to our ability to meet our business
plans. We believe that an understanding of the key terms of our credit agreement is important to an
investor’s understanding of our financial condition and liquidity risks. Failure to comply with our financial
covenants, unless waived by our lenders, would mean we could not borrow any further amounts under our
revolving credit facility and would give our lenders the right to demand immediate repayment of all
outstanding revolving credit and term loans. We would be unable to continue our operations at current levels
if we lost the liquidity provided under our credit agreements. Depreciation and amortization in this table
excludes the amortization of deferred financing fees, which is included in interest expense.

(2) The $51.7 million adjustment to EBITDA in fiscal 2023 primarily related to $26.4 million of non-cash stock

compensation, $22.4 million of restructuring and other exit charges, impairment of indefinite-lived
intangibles of $0.5 million, and $1.4 million for swap termination fees. The $51.5 million adjustment to
EBITDA in fiscal 2022 primarily related to $24.3 million of non-cash stock compensation, $26.0 million of
restructuring and other exit charges, indefinite-lived intangibles of $1.2 million.

(3) Debt includes finance lease obligations and letters of credit and is net of all U.S. cash and cash equivalents
and foreign cash and investments, as defined in the Fourth Amended Credit Facility. In fiscal 2023, the
amounts deducted in the calculation of net debt were U.S. cash and cash equivalents and foreign cash
investments of $346.7 million, and in fiscal 2022, were $402.5 million.

(4) These ratios are included to show compliance with the leverage ratios set forth in our credit facilities. We

show both our current ratios and the maximum ratio permitted or minimum ratio required under our Fourth
Amended Credit Facility, for fiscal 2023 and fiscal 2022, respectively.

B-53

(5) As defined in the Second Amended Credit Facility, interest expense used in the consolidated interest

coverage ratio excludes non-cash interest of $3.1 million and $2.1 million for fiscal 2023 and fiscal 2022,
respectively.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

See Note 1 to the Consolidated Financial Statements—Summary of Significant Accounting Policies for a
description of certain recently issued accounting standards that were adopted or are pending adoption that could
have a significant impact on our Consolidated Financial Statements or the Notes to the Consolidated Financial
Statements.

Related Party Transactions

None.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risks

Our cash flows and earnings are subject to fluctuations resulting from changes in raw material costs, foreign
currency exchange rates and interest rates. We manage our exposure to these market risks through internally
established policies and procedures and, when deemed appropriate, through the use of derivative financial
instruments. Our policy does not allow speculation in derivative instruments for profit or execution of derivative
instrument contracts for which there are no underlying exposures. We do not use financial instruments for trading
purposes and are not a party to any leveraged derivatives. We monitor our underlying market risk exposures on
an ongoing basis and believe that we can modify or adapt our hedging strategies as needed.

Counterparty Risks

We have entered into lead forward purchase contracts, foreign exchange forward and purchased option contracts
and cross currency fixed interest rate swaps to manage the risk associated with our exposures to fluctuations
resulting from changes in raw material costs, foreign currency exchange rates and interest rates. The Company’s
agreements are with creditworthy financial institutions. Those contracts that result in a liability position at
March 31, 2023 are $18.9 million (pre-tax). Those contracts that result in an asset position at March 31, 2023 are
$2.9 million (pre-tax). The impact on the Company due to nonperformance by the counterparties has been
evaluated and not deemed material.

We hedge our net investments in foreign operations against future volatility in the exchange rates between the
U.S. dollar and Euro. On September 29, 2022, we terminated our cross-currency fixed interest rate swap
contracts with an aggregate notional amount of $300 million and executed cross-currency fixed interest rate swap
contracts with an aggregate notional amount of $150 million, maturing on December 15, 2027. Depending on the
movement in the exchange rates between the U.S. dollar and Euro at maturity, the Company may owe the
counterparties an amount that is different from the notional amount of $150 million.

Excluding the cross currency fixed interest rate swap agreements, the vast majority of these contracts will settle
within one year.

Interest Rate Risks

We are exposed to changes in variable U.S. interest rates on borrowings under our credit agreements, as well as
short term borrowings in the U.S. and our foreign subsidiaries. On a selective basis, from time to time, we enter
into interest rate swap agreements to reduce the negative impact that increases in interest rates could have on our
outstanding variable rate debt. Management considers the interest rate swaps to be highly effective against

B-54

changes in the cash flows from our underlying variable rate debt based on the criteria in the FASB guidance.
Cash flows related to the interest rate swap agreements are included in interest expense over the terms of the
agreements. At March 31, 2023 such agreements effectively convert $200 million of our variable-rate debt to a
fixed-rate basis, utilizing the one-month Term SOFR as a floating rate reference.

Fluctuations in SOFR and fixed rates affect both our net financial investment position and the amount of cash to
be paid or received by us under these agreements.

A 100 basis point increase in interest rates would have increased annual interest expense by approximately
$5.8 million on the variable rate portions of our debt.

Commodity Cost Risks—Lead Contracts

We have a significant risk in our exposure to certain raw materials. Our largest single raw material cost is for
lead, for which the cost remains volatile. In order to hedge against increases in our lead cost, we have entered
into forward contracts with financial institutions to fix the price of lead. A vast majority of such contracts are for
a period not extending beyond one year. We had the following contracts outstanding at the dates shown below:

Date

$’s Under Contract

# Pounds Purchased

March 31, 2023 . . . . . . . . . . .
March 31, 2022 . . . . . . . . . . .
March 31, 2021 . . . . . . . . . . .

(in millions)
$47.9
56.8
50.6

(in millions)
50.0
54.0
54.5

Average
Cost/Pound

Approximate % of
Lead Requirements(1)

$0.96
1.05
0.93

8%
8
10

(1) Based on the fiscal year lead requirements for the periods then ended.

We estimate that a 10% increase in our cost of lead would have increased our cost of goods sold by
approximately $81 million for the fiscal year ended March 31, 2023.

Foreign Currency Exchange Rate Risks

We manufacture and assemble our products globally in the Americas, EMEA and Asia. Approximately 40% of
our sales and related expenses are transacted in foreign currencies. Our sales revenue, production costs, profit
margins and competitive position are affected by the strength of the currencies in countries where we
manufacture or purchase goods relative to the strength of the currencies in countries where our products are sold.
Additionally, as we report our financial statements in U.S. dollars, our financial results are affected by the
strength of the currencies in countries where we have operations relative to the strength of the U.S. dollar. The
principal foreign currencies in which we conduct business are the Euro, Swiss franc, British pound, Polish zloty,
Chinese renminbi, Canadian dollar, Brazilian Real and Mexican peso.

We quantify and monitor our global foreign currency exposures. Our largest foreign currency exposure is from
the purchase and conversion of U.S. dollar based lead costs into local currencies in Europe. Additionally, we
have currency exposures from intercompany financing and intercompany and third party trade transactions. On a
selective basis, we enter into foreign currency forward contracts and purchase option contracts to reduce the
impact from the volatility of currency movements; however, we cannot be certain that foreign currency
fluctuations will not impact our operations in the future.

We hedge approximately 10%—15% of the nominal amount of our known foreign exchange transactional
exposures. We primarily enter into foreign currency exchange contracts to reduce the earnings and cash flow
impact of the variation of non-functional currency denominated receivables and payables. The vast majority of
such contracts are for a period not extending beyond one year.

B-55

Gains and losses resulting from hedging instruments offset the foreign exchange gains or losses on the
underlying assets and liabilities being hedged. The maturities of the forward exchange contracts generally
coincide with the settlement dates of the related transactions. Realized and unrealized gains and losses on these
contracts are recognized in the same period as gains and losses on the hedged items. We also selectively hedge
anticipated transactions that are subject to foreign exchange exposure, primarily with foreign currency exchange
contracts, which are designated as cash flow hedges in accordance with Topic 815—Derivatives and Hedging.
During the third quarter of fiscal 2022, we also entered into cross currency fixed interest rate swap agreements, to
hedge our net investments in foreign operations against future volatility in the exchange rates between U.S.
Dollars and Euros.

At March 31, 2023 and 2022, we estimate that an unfavorable 10% movement in the exchange rates would have
adversely changed our hedge valuations by approximately $32.7 million and $36.6 million, respectively.

B-56

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Contents

EnerSys

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page

Report of Independent Registered Public Accounting Firm (on Consolidated Financial Statements)

(PCAOB ID: 42) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B-58

Report of Independent Registered Public Accounting Firm (on Internal Control Over Financial

Reporting) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B-61

Audited Consolidated Financial Statements
Consolidated Balance Sheets as of March 31, 2023 and 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Income for the Fiscal Years Ended March 31, 2023, 2022 and 2021 . . . . . . .
Consolidated Statements of Comprehensive Income for the Fiscal Years Ended March 31, 2023, 2022

B-62
B-63

and 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B-64

Consolidated Statements of Changes in Equity for the Fiscal Years Ended March 31, 2023, 2022 and

2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-65
Consolidated Statements of Cash Flows for the Fiscal Years Ended March 31, 2023, 2022 and 2021 . . . .
B-66
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-67
1. Summary of Significant Accounting Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-67
2. Revenue Recognition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-75
3. Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-76
4. Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-78
5. Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-79
6. Property, Plant, and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-79
7. Goodwill and Other Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-80
8. Prepaid and Other Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-81
9. Accrued Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-81
10. Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-81
11. Other Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-85
12. Fair Value Measurements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-85
13. Derivative Financial Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-88
14. Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-91
15. Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B-94
B-99
16. Stockholders’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17. Stock-Based Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-103
18. Earnings Per Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-106
19. Commitments, Contingencies and Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-106
20. Restructuring, Exit and Other Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-107
21. Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-111
22. Other (Income) Expense, Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-111
23. Business Segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-111
24. Subsequent Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-114

B-57

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of EnerSys

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of EnerSys (the Company) as of March 31, 2023
and 2022, the related consolidated statements of income, comprehensive income, changes in equity, and cash
flows for each of the three years in the period ended March 31, 2023, and the related notes (collectively referred
to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly,
in all material respects, the financial position of the Company at March 31, 2023 and 2022, and the results of its
operations and its cash flows for each of the three years in the period ended March 31, 2023, in conformity with
U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the Company’s internal control over financial reporting as of March 31, 2023, based
on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework), and our report dated May 24, 2023, expressed an
unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express
an opinion on the Company’s financial statements based on our audits. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial
statements that were communicated or required to be communicated to the audit committee and that: (1) relate to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective or complex judgments. The communication of critical audit matters does not alter in any way our
opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical
audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to
which they relate.

Description of the Matter As reflected in the Company’s consolidated financial statements, the Company’s

Valuation of Goodwill and Indefinite-Lived Intangible Assets

goodwill balance was $676.7 million as of March 31, 2023. In addition, the
Company’s indefinite-lived intangible assets were $143.7 million as of March 31,
2023. As discussed in Note 1 to the consolidated financial statements, goodwill and
indefinite-lived intangible assets are tested for impairment at least annually.

B-58

How We Addressed the
Matter in Our Audit

Description of the
Matter

Auditing management’s annual quantitative goodwill and indefinite-lived intangible
assets impairment tests was complex and involved a high degree of subjectivity for
certain reporting units and certain indefinite-lived intangible assets due to the
significant estimation required in determining the fair value of the reporting units and
the indefinite-lived intangible assets. The fair value estimates related to these reporting
units and indefinite-lived intangible assets were sensitive to significant assumptions
such as discount rates, revenue growth rates, operating margins, working capital rates,
royalty rates, and terminal growth rates, which are forward-looking and could be
affected by future economic and market conditions.

We obtained an understanding, evaluated the design and tested the operating
effectiveness of controls over the Company’s annual quantitative goodwill and
indefinite-lived intangible asset impairment tests. For example, we tested controls over
management’s review of the valuation models, the significant assumptions used to
develop the estimate including forecasted revenue growth rates and profitability, and
the completeness and accuracy of the data used in the valuations.

To test the estimated fair value of the Company’s reporting units and indefinite-lived
intangible assets, we performed audit procedures that included, among other
procedures, assessing fair value methodologies and testing the significant assumptions
discussed above and the completeness and accuracy of the underlying data used by the
Company in its analyses. For example, we compared the significant assumptions used
by management to current industry, market and economic trends, to historical results of
the Company’s business and other guideline companies within the same industry and
to other relevant factors. We assessed the historical accuracy of management’s
estimates and performed sensitivity analyses of significant assumptions to evaluate the
changes in the fair value of the reporting units and indefinite-lived intangible assets
that would result from changes in the assumptions. We also involved internal valuation
specialists to assist in our evaluation of the significant assumptions and methodologies
used by the Company. In addition, we tested management’s reconciliation of the fair
value of the reporting units to the market capitalization of the Company.

Income Taxes—Uncertain Tax Positions

As discussed in Note 14 to the Company’s consolidated financial statements, the
Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction,
and various states and foreign jurisdictions. Also as disclosed in Note 14,
approximately 82% of the Company’s consolidated earnings before taxes are generated
in foreign jurisdictions. Uncertainty in a tax position taken or to be taken on a tax
return may arise as tax laws are subject to interpretation. The Company must identify
its uncertain tax positions and uses significant judgment in (1) determining whether a
tax position’s technical merits are more-likely-than-not to be sustained and
(2) measuring the amount of tax benefit that qualifies for recognition. As of March 31,
2023, the Company has recognized accrued liabilities of $3.5 million for uncertain tax
positions.

Auditing the completeness of the Company’s uncertain tax positions and the evaluation
of the technical merits of those uncertain tax positions is complex given the scope of
its international operations and the significant judgment required in evaluating the
technical merits of the Company’s uncertain tax positions.

B-59

How We Addressed
the Matter in Our
Audit

We obtained an understanding, evaluated the design and tested the operating
effectiveness of the Company’s controls over identifying uncertain tax positions and
evaluating the technical merits of those positions. For example, we tested controls over
the review of the Company’s foreign operations, including the tax positions taken by
those operations, differences between statutory and effective tax rates, permanent
differences impacting taxable income, and the monitoring of tax audits.

We involved our tax professionals with subject matter expertise in the areas of
international taxation and transfer pricing to assess the technical merits of the
Company’s tax positions. This included assessing the Company’s correspondence with
the relevant tax authorities and evaluating income tax opinions or other third-party
advice obtained by the Company. We also used our knowledge of, and experience
with, the application of international and local income tax laws by the relevant income
tax authorities to evaluate the Company’s accounting for those tax positions. We
analyzed the Company’s assumptions and data used to determine the amount of tax
benefit to recognize and tested the accuracy of the calculations. We also evaluated the
Company’s income tax disclosures included in Note 14 to the consolidated financial
statements in relation to these matters.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1998.

Philadelphia, Pennsylvania
May 24, 2023

B-60

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of EnerSys

Opinion on Internal Control over Financial Reporting

We have audited EnerSys’ internal control over financial reporting as of March 31, 2023, based on criteria established
in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (2013 framework) (the COSO criteria). In our opinion, EnerSys (the Company) maintained, in all material
respects, effective internal control over financial reporting as of March 31, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the 2023 consolidated financial statements of the Company and our report dated May 24, 2023
expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for
its assessment of the effectiveness of internal control over financial reporting included in the accompanying
Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion
on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the
U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and
the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that
our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on
the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania
May 24, 2023

B-61

EnerSys
Consolidated Balance Sheets
(In Thousands, Except Share and Per Share Data)

March 31,

2023

2022

Assets

Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable, net of allowance for doubtful accounts

(2023–$8,775; 2022–$12,219) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant, and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 346,665 $ 402,488

637,817
797,798
113,601

1,895,881
513,283
676,715
360,412
49,152
121,231

719,434
715,712
155,559

1,993,193
503,264
700,640
396,202
60,479
82,868

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$3,616,674 $3,736,646

Liabilities and Equity

Current liabilities:
Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt, net of unamortized debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total liabilities
Commitments and contingencies
Equity:
Preferred Stock, $0.01 par value, 1,000,000 shares authorized, no shares issued or

outstanding at March 31, 2023 and at March 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . .
Common Stock, $0.01 par value per share, 135,000,000 shares authorized, 56,004,613
shares issued and 40,901,059 shares outstanding at March 31, 2023; 55,748,924
shares issued and 40,986,658 shares outstanding at March 31, 2022 . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock at cost, 15,103,554 shares held as of March 31, 2023 and 14,762,266

shares held as of March 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contra equity—indemnification receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30,642 $
90
378,641
308,947

55,084
185
393,096
289,765

718,320
1,041,989
254
61,118
191,112

738,130
1,243,002
231
78,228
183,780

2,012,793

2,243,371

—

560
596,464

557
571,464

(740,956)
1,930,148
(2,463)
(183,474)

(719,119)
1,783,586
(3,620)
(143,495)

Total EnerSys stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nonredeemable noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,600,279
3,602

1,489,373
3,902

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,603,881

1,493,275

Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$3,616,674 $3,736,646

See accompanying notes.

B-62

EnerSys
Consolidated Statements of Income
(In Thousands, Except Share and Per Share Data)

Fiscal year ended March 31,
2022

2023

2021

Sales from products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales from services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory step up to fair value relating to acquisitions and exit

activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring and other exit charges . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of indefinite-lived intangibles . . . . . . . . . . . . . . . . . . . . .
Loss on assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (income) expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Earnings before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 3,307,781 $ 3,004,231 $ 2,681,719
296,213

400,798

353,088

3,708,579
2,597,296
270,464

3,357,319
2,360,150
244,597

2,977,932
2,033,636
205,146

681

840,138
544,858
16,439
480
—

278,361
59,529
8,193

210,639
34,829

2,604

749,968
520,810
18,756
1,178
2,973

206,251
37,777
(5,465)

173,939
30,028

—

739,150
482,401
40,374
—
—

216,375
38,436
7,804

170,135
26,761

Net earnings attributable to EnerSys stockholders . . . . . . . . . . . . . . .

175,810 $

143,911 $

143,374

Net earnings per common share attributable to EnerSys

stockholders:

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dividends per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Weighted-average number of common shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.31 $

4.25 $

0.70 $

3.42 $

3.36 $

0.70 $

3.37

3.32

0.70

40,809,235

42,106,337

42,548,449

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

41,326,755

42,783,373

43,224,403

See accompanying notes.

B-63

EnerSys
Consolidated Statements of Comprehensive Income
(In Thousands)

Fiscal year ended March 31,
2022

2023

2021

Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive (loss) income:
Net unrealized gain (loss) on derivative instruments, net of tax . . . . . . . . . . . .
Pension funded status adjustment, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$175,810 $143,911 $143,374

(1,552)
8,214
(46,941)

2,603
8,310
(38,397)

6,283
1,847
91,277

Total other comprehensive (loss) gain, net of tax . . . . . . . . . . . . . . . . . . . . . . .

(40,279)

(27,484)

99,407

Total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Comprehensive gain (loss) attributable to noncontrolling interests . . . . . . . . . .

135,531
(300)

116,427
128

242,781
284

Comprehensive income attributable to EnerSys stockholders . . . . . . . . . . . . . .

$135,831 $116,299 $242,497

See accompanying notes.

B-64

EnerSys
Consolidated Statements of Changes in Equity

(In Thousands, Except Per Share Data)

Preferred
Stock

Common
Stock

Additional
Paid-in
Capital

Treasury
Stock

Retained
Earnings

Balance at March 31, 2020 . . . . . . . . . . . . . . . . . . . . . $—
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . — —
Exercise of stock options . . . . . . . . . . . . . . . . . . . . . . —
Shares issued under equity awards (taxes paid related to

$ 551

$529,100 $(564,376) $1,556,980
—
—

19,817
9,110

—
—

Accumulated
Other
Comprehensive
Income (Loss)

Total
EnerSys
Stockholders’
Equity

Contra-
Equity

Non-
redeemable
Non-
Controlling
Interests

Total
Equity

$(215,006) $(6,724) $1,300,525
19,817
—
9,114
—

—
—

$3,537
—
—

$1,304,062
19,817
9,114

net share settlement of equity awards), net

. . . . . . . —

—

(5,153)

—

Reissuance of treasury stock towards employee stock

purchase plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

—

(49)

895

Contra equity—adjustment to indemnification

receivable for acquisition related tax liability

. . . . . —
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Dividends ($0.70 per common share) . . . . . . . . . . . . . —
Other comprehensive income:
Pension funded status adjustment (net of tax benefit of

—
—
—
—

$424)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

—

Net unrealized gain (loss) on derivative instruments (net

of tax expense of $1,952)

Foreign currency translation adjustment

. . . . . . . . . . . . . . . . . . . —
. . . . . . . . . . . —

—
—

Balance at March 31, 2021 . . . . . . . . . . . . . . . . . . . . . $ —
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . —
Exercise of stock options . . . . . . . . . . . . . . . . . . . . . . —
Shares issued under equity awards (taxes paid related to

$ 555

—

net share settlement of equity awards), net

. . . . . . . —
Purchase of common stock . . . . . . . . . . . . . . . . . . . . . —
Contra equity—adjustment to indemnification

receivable for acquisition related tax liability

. . . . . —
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Dividends ($0.70 per common share) . . . . . . . . . . . . . —
Dissolution of joint venture . . . . . . . . . . . . . . . . . . . . —
Other comprehensive income:
Pension funded status adjustment (net of tax benefit of

—
—

—
—
—
—
—

$1,910) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

—

Net unrealized gain (loss) on derivative instruments (net

of tax expense of $789) . . . . . . . . . . . . . . . . . . . . . —
. . . . . . . . . . . —

Foreign currency translation adjustment

—
—

Balance at March 31, 2022 . . . . . . . . . . . . . . . . . . . . . $ —
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . —
Exercise of stock options . . . . . . . . . . . . . . . . . . . . . . —
Shares issued under equity awards (taxes paid related to

$ 557

—

net share settlement of equity awards), net

. . . . . . . —
Purchase of common stock . . . . . . . . . . . . . . . . . . . . . —
Contra equity—adjustment to indemnification

—
—

receivable for acquisition related tax liability

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Dividends ($0.70 per common share) . . . . . . . . . . . . . —
Other comprehensive income:
. . . . . . . . . . . . . . . . . .
Pension funded status adjustment (net of tax expense of

. . . . . — —
—
—
—

—

—
—
143,374
(30,603)

—

—
—
—
—

—

1,369
—
—
—

(5,153)

846

1,369
571
143,374
(29,831)

—

—
—
—
—

(5,153)

846

1,369
571
143,374
(29,831)

—

—
—

1,847

6,283
90,993

—

—
—

1,847

—

1,847

6,283
90,993

—
284

6,283
91,277

—
571
—
772

—

—
—

—
—
—
—

—

—
—

$554,168 $(563,481) $1,669,751
—
—

24,289
1,334

—
—

(9,150)
—

—
(156,366)

—
—

—
728
—
—
—

—
—
143,911
(30,076)
—

$(115,883) $(5,355) $1,539,755
24,289
—
1,336
—

—
—

$3,821
—
—

$1,543,576
24,289
1,336

—
—

—
—
—
—
—

—
—

(9,150)
(156,366)

—
—

(9,150)
(156,366)

1,735
—
—
—
—

1,735
828
143,911
(29,353)
—

—
—
—
—
(47)

1,735
828
143,911
(29,353)
(47)

—

—
—

—

—
—

8,310

2,603
(38,525)

—

—
—

8,310

—

8,310

2,603
(38,525)

—
128

2,603
(38,397)

$571,464 $(719,119) $1,783,586
—
—

26,371
4,390

—
—

$(143,495) $(3,620) $1,489,373
26,371
—
4,393
—

—
—

$3,902
—
—

$1,493,275
26,371
4,393

—
100
—
723
—

—

—
—

(6,453)
—

—
(22,907)

—
—

—
(19)
—
711

—
1,070
—
—

—
—
175,810
(29,248)

—
—

—
—
—
—

—
—

1,157
—
—
—

(6,453)
(22,907)

1,157
1,051
175,810
(28,537)
—

8,214

—
—

—
—
—
—
—

—

(6,453)
(22,907)

1,157
1,051
175,810
(28,537)

8,214

(1,552)
(46,641)

—
(300)

(1,552)
(46,941)

$2,947) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

—

Net unrealized gain (loss) on derivative instruments (net

of tax benefit of $469) . . . . . . . . . . . . . . . . . . . . . . —
. . . . . . . . . . . —

Foreign currency translation adjustment

—
—

—

—
—

—

—
—

—

—
—

8,214

(1,552)
(46,641)

—

—
—

Balance at March 31, 2023 . . . . . . . . . . . . . . . . . . . . . $—

$ 560

$596,464 $(740,956) $1,930,148

$(183,474) $(2,463) $1,600,279

$3,602

$1,603,881

See accompanying notes.

B-65

EnerSys
Consolidated Statements of Cash Flows
(In Thousands)

Fiscal year ended March 31,
2022

2021

2023

Cash flows from operating activities
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Write-off of assets relating to restructuring and other exit charges . . . . . . . . . . . . .
Loss on assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of indefinite-lived intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives not designated in hedging relationships:

Net losses (gains) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash proceeds (settlements) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on disposal of property, plant, and equipment . . . . . . . . . . . . . . . . . . . . . . . . .

Changes in assets and liabilities, net of effects of acquisitions:

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash provided by (used in) operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows from investing activities
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from disposal of facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Insurance proceeds relating to property, plant and equipment . . . . . . . . . . . . . . . . . . . . .
Proceeds from disposal of property, plant, and equipment . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from termination of net investment hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows from financing activities
Net borrowings (repayments) on short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from Second Amended 2017 Revolver borrowings . . . . . . . . . . . . . . . . . . . . .
Repayments of Second Amended 2017 Revolver borrowings . . . . . . . . . . . . . . . . . . . . .
Proceeds from Amended 2017 Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayments of 2023 Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayments of Second Amended 2017 Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance lease obligations and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Option proceeds, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of taxes related to net share settlement of equity awards . . . . . . . . . . . . . . . . . .
Purchase of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash (used in) provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . .

$ 175,810 $ 143,911 $ 143,374

91,153
8,920
—
480

(1,182)
470
(431)
(15,236)
1,964
26,371
(113)

67,553
(96,413)
23,689
(6,298)
(4,236)
5,747
1,690

95,878
6,503
2,973
1,178

157
255
2,621
1,115
2,107
24,289
(490)

(128,956)
(212,839)
(32,044)
270
65,316
(38,578)
749

94,082
10,231
—
—

(430)
905
178
(8,994)
2,072
19,817
(3,883)

8,713
24,176
27,292
424
20,797
32,357
(12,736)

279,938

(65,585)

358,375

(88,772)
—
—
586
43,384

(74,041)
3,268
—
1,540
—

(70,020)
—
4,800
176
—

(44,802)

(69,233)

(65,044)

(21,719)
310,500
(500,500)
300,000
(300,000)
(5,215)
(1,121)
1,110
4,392
(6,453)
(22,907)
(28,537)

(270,450)
(20,509)

20,556
523,400
(88,400)
—
—
(161,447)
(2,952)
810
1,336
(9,150)
(156,366)
(29,353)

(15,934)
102,000
(210,000)
—
—
(39,589)
—
650
9,114
(5,153)
—
(29,812)

98,434
(12,936)

(188,724)
20,222

Net (decrease) increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(55,823)
402,488

(49,320)
451,808

124,829
326,979

Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 346,665 $ 402,488 $ 451,808

See accompanying notes.

B-66

Notes to Consolidated Financial Statements
March 31, 2023
(In Thousands, Except Share and Per Share Data)

1. Summary of Significant Accounting Policies

Description of Business

EnerSys (the “Company”) and its predecessor companies have been manufacturers of industrial batteries for over
125 years. EnerSys is a global leader in stored energy solutions for industrial applications. The Company
manufactures, markets and distributes industrial batteries and related products such as chargers, outdoor cabinet
enclosures, power equipment and battery accessories, and provides related after-market and customer-support
services for its products. With the Alpha acquisition, the Company is also a provider of highly integrated power
solutions and services to broadband, telecom, renewable and industrial customers.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries
and any partially owned subsidiaries that the Company has the ability to control. Control generally equates to
ownership percentage, whereby investments that are more than 50% owned are generally consolidated,
investments in affiliates of 50% or less but greater than 20% are generally accounted for using the equity method,
and investments in affiliates of 20% or less are accounted for using the cost method. All intercompany
transactions and balances have been eliminated in consolidation.

Foreign Currency Translation

Results of foreign operations of subsidiaries, whose functional currency is the local currency, are translated into
U.S. dollars using average exchange rates during the periods. The assets and liabilities are translated into U.S.
dollars using exchange rates as of the balance sheet dates. Gains or losses resulting from translating the foreign
currency financial statements are accumulated as a separate component of accumulated other comprehensive
income (“AOCI”) in EnerSys’ stockholders’ equity and noncontrolling interests.

Transaction gains and losses resulting from exchange rate changes on transactions denominated in currencies
other than the functional currency of the applicable subsidiary are included in the Consolidated Statements of
Income, within “Other (income) expense, net”, in the year in which the change occurs.

Revenue Recognition

The Company recognizes revenue when (or as) performance obligations are satisfied by transferring control of
the performance obligation to a customer. Control of a performance obligation may transfer to the customer
either at a point in time or over time depending on an evaluation of the specific facts and circumstances for each
contract, including the terms and conditions of the contract as agreed with the customer, as well as the nature of
the products or services to be provided.

The Company’s primary performance obligation to its customers is the delivery of finished goods and products,
pursuant to purchase orders. Control of the products sold typically transfers to its customers at the point in time
when the goods are shipped as this is also when title generally passes to its customers under the terms and
conditions of the customer arrangements.

Each customer purchase order sets forth the transaction price for the products and services purchased under that
arrangement. Some customer arrangements include variable consideration, such as volume rebates, some of
which depend upon the customers meeting specified performance criteria, such as a purchasing level over a

B-67

period of time. The Company uses judgment to estimate the most likely amount of variable consideration at each
reporting date. When estimating variable consideration, the Company also applies judgment when considering
the probability of whether a reversal of revenue could occur and only recognize revenue subject to this constraint.

Service revenues related to the work performed for the Company’s customers by its maintenance technicians
generally represent a separate and distinct performance obligation. Control for these services passes to the
customer as the services are performed.

The Company’s typical payment terms are 30 days and sales arrangements do not contain any significant
financing component for its customers.

The Company uses historic customer product return data as a basis of estimation for customer returns and records
the reduction of sales at the time revenue is recognized.

Freight charges billed to customers are included in sales and the related shipping costs are included in cost of
sales in the Consolidated Statements of Income. If shipping activities are performed after a customer obtains
control of a product, the Company applies a policy election to account for shipping as an activity to fulfill the
promise to transfer the product to the customer.

The Company applies a policy election to exclude transaction taxes collected from customers from sales when
the tax is both imposed on and concurrent with a specific revenue-producing transaction.

The Company generally provides customers with a product warranty that provides assurance that the products
meet standard specifications and are free of defects. The Company maintains a reserve for claims incurred under
standard product warranty programs. Performance obligations related to service warranties are not material to the
Consolidated Financial Statements.

The Company pays sales commissions to its sales representatives, which may be considered as incremental costs
to obtain a contract. However, since the recoverability period is less than one year, the Company has utilized the
practical expedient to record these costs of obtaining a contract as an expense as they are incurred.

Warranties

The Company’s products are warranted for a period ranging from one to twenty years for Energy Systems
batteries, from one to five years for Motive Power batteries and for a period ranging from one to four years for
Specialty transportation batteries. The Company provides for estimated product warranty expenses when the
related products are sold. The assessment of the adequacy of the reserve includes a review of open claims and
historical experience.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less
when purchased.

Concentration of Credit Risk

Financial instruments that subject the Company to potential concentration of credit risk consist principally of
short-term cash investments and trade accounts receivable. The Company invests its cash with various financial
institutions and in various investment instruments limiting the amount of credit exposure to any one financial
institution or entity. The Company has bank deposits that exceed federally insured limits. In addition, certain
cash investments may be made in U.S. and foreign government bonds, or other highly rated investments
guaranteed by the U.S. or foreign governments. Concentration of credit risk with respect to trade receivables is

B-68

limited by a large, diversified customer base and its geographic dispersion. The Company performs ongoing
credit evaluations of its customers’ financial condition and requires collateral, such as letters of credit, in certain
circumstances.

Accounts Receivable

Accounts receivable are recorded net of an allowance for expected credit losses. The Company maintains an
allowance for credit losses for the expected failure or inability of its customers to make required payments. The
Company recognizes the allowance for expected credit losses at inception and reassesses quarterly based on
management’s expectation of the asset’s collectability. The allowance is based on multiple factors including
historical experience with bad debts, the credit quality of the customer base, the aging of such receivables and
current macroeconomic conditions, as well as management’s expectations of conditions in the future. The
Company’s allowance for uncollectible accounts receivable is based on management’s assessment of the
collectability of assets pooled together with similar risk characteristics. Accounts are written off when
management determines the account is uncollectible. The following table sets forth the changes in the
Company’s allowance for doubtful accounts:

Balance at
Beginning of
Period

Provision
for Doubtful
Debts

Write-offs, net of
Recoveries and
Other

Fiscal year ended March 31, 2021 . . . . . . . . .
Fiscal year ended March 31, 2022 . . . . . . . . .
Fiscal year ended March 31, 2023 . . . . . . . . .

$15,246
12,992
12,219

$ 178
2,621
(431)

$(2,432)
(3,394)
(3,013)

Balance at
End of
Period

$12,992
12,219
8,775

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out
(FIFO) method. The cost of inventory consists of material, labor, and associated overhead.

Property, Plant, and Equipment

Property, plant, and equipment are recorded at cost and include expenditures that substantially increase the useful
lives of the assets. Depreciation is provided using the straight-line method over the estimated useful lives of the
assets as follows: 10 to 33 years for buildings and improvements and 3 to 15 years for machinery and equipment.

Maintenance and repairs are expensed as incurred. Interest on capital projects is capitalized during the
construction period.

Business Combinations

The Company records an acquisition using the acquisition method of accounting and recognizes the assets
acquired and liabilities assumed at their fair values as of the date of the acquisition. The excess of the purchase
price over the net tangible and intangible assets is recorded to goodwill. The results of operations of the acquired
business are included in the Company’s operating results from the date of acquisition.

Goodwill and Other Intangible Assets

Goodwill and indefinite-lived trademarks are tested for impairment at least annually and whenever events or
circumstances occur indicating that a possible impairment may have been incurred. The Company assesses
whether goodwill impairment exists using both the qualitative and quantitative assessments. The qualitative
assessment involves determining whether events or circumstances exist that indicate it is more likely than not
that the fair value of a reporting unit is less than its carrying amount, including goodwill. If based on this
qualitative assessment the Company determines it is more likely than not that the fair value of a reporting unit is
less than its carrying amount, or if the Company elects not to perform a qualitative assessment, a quantitative
assessment is performed by determining the fair value of the Company’s reporting units.

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Goodwill is tested for impairment by determining the fair value of the Company’s reporting units. These
estimated fair values are based on financial projections, certain cash flow measures, and market capitalization.

The Company estimates the fair value of its reporting units using a weighting of fair values derived from both the
income approach and the market approach. Under the income approach, the Company calculates the fair value of
a reporting unit based on the present value of estimated future cash flows. Cash flow projections are based on
management’s estimates of revenue growth rates and operating margins, taking into consideration industry and
market conditions. The discount rate used is based on the weighted-average cost of capital adjusted for the
relevant risk associated with business-specific characteristics and the uncertainty related to the business’s ability
to execute on the projected cash flows. The market approach estimates fair value based on market multiples of
revenue and earnings derived from comparable publicly-traded companies with similar operating and investment
characteristics as the reporting unit. The weighting of the fair value derived from the market approach ranges
from 0% to 50% depending on the level of comparability of these publicly-traded companies to the reporting
unit.

In order to assess the reasonableness of the calculated fair values of its reporting units, the Company also
compares the sum of the reporting units’ fair values to its market capitalization and calculates an implied control
premium (the excess of the sum of the reporting units’ fair values over the market capitalization). The Company
evaluates the control premium by comparing it to control premiums of recent comparable market transactions.

The Company assesses whether indefinite-lived intangible assets impairment exists using both the qualitative and
quantitative assessments. The qualitative assessment involves determining whether events or circumstances exist
that indicate it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its
carrying amount. If based on this qualitative assessment, the Company determines it is more likely than not that
the fair value of an indefinite-lived intangible asset is less than its carrying amount or if the Company elects not
to perform a qualitative assessment, a quantitative assessment is performed to determine whether an indefinite-
lived intangible asset impairment exists. The Company tests the indefinite-lived intangible assets for impairment
by comparing the carrying value to the fair value based on current revenue projections of the related operations,
under the relief from royalty method. Any excess of the carrying value over the amount of fair value is
recognized as an impairment. Any such impairment is recognized in the reporting period in which it has been
identified.

Finite-lived assets such as customer relationships, technology, trademarks, licenses, and non-compete agreements
are amortized on a straight-line basis over their estimated useful lives, generally over periods ranging from 3 to
20 years. The Company continually evaluates the reasonableness of the useful lives of these assets.

Impairment of Long-Lived Assets

The Company reviews the carrying values of its long-lived assets to be held and used for possible impairment
whenever events or changes in circumstances indicate that the carrying value may not be recoverable, based on
undiscounted estimated cash flows expected to result from its use and eventual disposition. The factors
considered by the Company in performing this assessment include current operating results, trends and other
economic factors. In assessing the recoverability of the carrying value of a long-lived asset, the Company must
make assumptions regarding future cash flows and other factors. If these estimates or the related assumptions
change in the future, the Company may be required to record an impairment loss for these assets.

Environmental Expenditures

The Company records a loss and establishes a reserve for environmental remediation liabilities when it is
probable that an asset has been impaired or a liability exists and the amount of the liability can be reasonably
estimated. Reasonable estimates involve judgments made by management after considering a broad range of
information including notifications, demands or settlements that have been received from a regulatory authority

B-70

or private party, estimates performed by independent engineering companies and outside counsel, available facts,
existing and proposed technology, the identification of other potentially responsible parties, their ability to
contribute and prior experience. These judgments are reviewed quarterly as more information is received and the
amounts reserved are updated as necessary. However, the reserves may materially differ from ultimate actual
liabilities if the loss contingency is difficult to estimate or if management’s judgments turn out to be inaccurate.
If management believes no best estimate exists, the minimum probable loss is accrued.

Derivative Financial Instruments

The Company utilizes derivative instruments to mitigate volatility related to interest rates, lead prices and foreign
currency exposures. The Company does not hold or issue derivative financial instruments for trading or
speculative purposes. The Company recognizes derivatives as either assets or liabilities in the accompanying
Consolidated Balance Sheets and measures those instruments at fair value. Changes in the fair value of those
instruments are reported in AOCI if they qualify for hedge accounting or in earnings if they do not qualify for
hedge accounting. Derivatives qualify for hedge accounting if they are designated as hedge instruments and if the
hedge is highly effective in achieving offsetting changes in the fair value or cash flows of the asset or liability
hedged. For lead and foreign currency forward contracts, effectiveness is measured on a regular basis using
statistical analysis and by comparing the overall changes in the expected cash flows of the hedging instrument
with the changes in the expected all-in cash outflow required for the underlying lead and foreign currency
purchases. This analysis is performed on the initial purchases quarterly that cover the quantities hedged.
Accordingly, gains and losses from changes in derivative fair value of effective hedges are deferred and reported
in AOCI until the underlying transaction affects earnings. In the case of cross currency fixed interest rate swap
agreements, the swaps are remeasured with changes in fair value recognized in foreign currency translation
adjustment within AOCI to offset the translation risk from the underlying investments. Balances in the foreign
currency translation adjustment accounts remain until the sale or substantially complete liquidation of the foreign
entity, upon which they are recognized as a component of income (expense).

The Company has commodity, foreign exchange and interest rate hedging authorization from the Board of
Directors and has established a hedging and risk management program that includes the management of market
and counterparty risk. Key risk control activities designed to ensure compliance with the risk management
program include, but are not limited to, credit review and approval, validation of transactions and market prices,
verification of risk and transaction limits, portfolio stress tests, sensitivity analyses and frequent portfolio
reporting, including open positions, determinations of fair value and other risk management metrics.

Market risk is the potential loss the Company and its subsidiaries may incur as a result of price changes
associated with a particular financial or commodity instrument. The Company utilizes forward contracts, options,
and swaps as part of its risk management strategies, to minimize unanticipated fluctuations in earnings caused by
changes in commodity prices, interest rates and / or foreign currency exchange rates. All derivatives are
recognized on the balance sheet at their fair value, unless they qualify for the Normal Purchase Normal Sale
exemption.

Credit risk is the potential loss the Company may incur due to the counterparty’s non-performance. The
Company is exposed to credit risk from interest rate, foreign currency and commodity derivatives with financial
institutions. The Company has credit policies to manage their credit risk, including the use of an established
credit approval process, monitoring of the counterparty positions and the use of master netting agreements.

The Company has elected to offset net derivative positions under master netting arrangements. The Company
does not have any positions involving cash collateral (payables or receivables) under a master netting
arrangement as of March 31, 2023 and 2022.

The Company does not have any credit-related contingent features associated with its derivative instruments.

B-71

Fair Value of Financial Instruments

The Company groups its recurring, non-recurring and disclosure-only fair value measurements into the following
levels when making fair value measurement disclosures:

Level 1

Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2

Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for
identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices
that are observable and market-corroborated inputs which are derived principally from or
corroborated by observable market data.

Level 3

Inputs are derived from valuation techniques in which one or more significant inputs or value
drivers are unobservable.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date (an exit price). The Company and its subsidiaries use, as
appropriate, a market approach (generally, data from market transactions), an income approach (generally,
present value techniques and option-pricing models), and / or a cost approach (generally, replacement cost) to
measure the fair value of an asset or liability. These valuation approaches incorporate inputs such as observable,
independent market data and / or unobservable data that management believes are predicated on the assumptions
market participants would use to price an asset or liability. These inputs may incorporate, as applicable, certain
risks such as nonperformance risk, which includes credit risk.

Lead contracts, foreign currency contracts and interest rate contracts generally use an income approach to
measure the fair value of these contracts, utilizing readily observable inputs, such as forward interest rates (e.g.,
Secured Overnight Financing Rate “SOFR”), forward foreign currency exchange rates (e.g., GBP and euro) and
commodity prices (e.g., London Metals Exchange), as well as inputs that may not be observable, such as credit
valuation adjustments. When observable inputs are used to measure all or most of the value of a contract, the
contract is classified as Level 2. Over-the-counter (OTC) contracts are valued using quotes obtained from an
exchange, binding and non-binding broker quotes. Furthermore, the Company obtains independent quotes from
the market to validate the forward price curves. OTC contracts include forwards, swaps and options. To the
extent possible, fair value measurements utilize various inputs that include quoted prices for similar contracts or
market-corroborated inputs.

When unobservable inputs are significant to the fair value measurement, the asset or liability is classified as
Level 3. Additionally, Level 2 fair value measurements include adjustments for credit risk based on the
Company’s own creditworthiness (for net liabilities) and its counterparties’ creditworthiness (for net assets). The
Company assumes that observable market prices include sufficient adjustments for liquidity and modeling risks.
The Company did not have any fair value measurements that transferred between Level 2 and Level 3 as well as
Level 1 and Level 2.

Income Taxes

The Company accounts for income taxes using the asset and liability approach, which requires deferred tax assets
and liabilities be recognized using enacted tax rates to measure the effect of temporary differences between book
and tax bases on recorded assets and liabilities. Valuation allowances are recorded to reduce deferred tax assets,
if it is more likely than not some portion or all of the deferred tax assets will not be realized. The need to
establish valuation allowances against deferred tax assets is assessed quarterly. The primary factors used to
assess the likelihood of realization are expected reversals of taxable temporary timing differences, forecasts of
future taxable income and available tax planning strategies that could be implemented to realize the net deferred
tax assets.

The Company recognizes tax related interest and penalties in income tax expense in its Consolidated Statement
of Income.

B-72

With respect to accounting for uncertainty in income taxes, the Company evaluates tax positions to determine
whether the benefits of tax positions are more likely than not of being sustained upon audit based on the technical
merits of the tax position. For tax positions that are more likely than not of being sustained upon audit, the
Company recognizes the largest amount of the benefit that is greater than 50% likely of being realized upon
ultimate settlement. For tax positions that are not more likely than not of being sustained upon audit, the
Company does not recognize any portion of the benefit. If the more likely than not threshold is not met in the
period for which a tax position is taken, the Company may subsequently recognize the benefit of that tax position
if the tax matter is effectively settled, the statute of limitations expires, or if the more likely than not threshold is
met in a subsequent period.

No additional income taxes have been provided for any undistributed foreign earnings or any additional outside
basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign
operations.

Regarding the GILTI tax rules, the Company is allowed to make an accounting policy choice of either
(1) treating the taxes due on future US inclusions in taxable income as a current-period expense when incurred
(“period cost method”) or (2) factoring amounts into a Company’s measurement of its deferred taxes (“deferred
method”). The Company has elected the period cost method.

Deferred Financing Fees

Debt issuance costs that are incurred by the Company in connection with the issuance of debt are deferred and
amortized to interest expense over the life of the underlying indebtedness, adjusted to reflect any early
repayments and are shown as a deduction from long-term debt.

Stock-Based Compensation Plans

The Company measures the cost of employee services received in exchange for the award of an equity instrument
based on the grant-date fair value of the award, with such cost recognized over the applicable vesting period.

Market and Performance condition-based awards

The Company grants market condition-based awards and performance condition-based awards.

Beginning in fiscal 2017 and until fiscal 2020, the Company granted market condition-based awards (“TSR”). A
participant may earn between 0% to 200% of the number of awards granted, based on the total shareholder return
of the Company’s common stock over a three-year period, relative to the shareholder return of a defined peer
group. The awards cliff vest on the third anniversary of the date of grant and are settled in common stock on the
first anniversary of the vesting date. The TSR is calculated by dividing the sixty or ninety calendar day average
price at end of the period (as applicable) and the reinvested dividends thereon by such sixty or ninety calendar
day average price at start of the period. The maximum number of awards earned is capped at 200% of the target
award. Additionally, no payout will be awarded in the event that the TSR at the vesting date reflects less than a
25% return from the average price at the grant date. These share units are similar to the share units granted prior
to fiscal 2016, except that under these awards, the targets are more difficult to achieve as they are tied to the TSR
of a defined peer group. The fair value of these awards is estimated at the date of grant, using a Monte Carlo
Simulation.

The Company recognizes compensation expense using the straight-line method over the life of the market
condition-based awards except for those issued to certain retirement-eligible participants, which are expensed on
an accelerated basis.

In fiscal 2019 and fiscal 2020, the Company granted performance condition-based awards (“PSU”). A participant
may earn between 0% to 200% of the number of awards granted, based on the Company’s cumulative adjusted

B-73

earnings per share performance over a three-year period. The vesting of these awards is contingent upon meeting
or exceeding performance conditions. The awards cliff vest on the third anniversary of the date of grant and are
settled in common stock on the first anniversary of the vesting date. The maximum number of awards earned is
capped at 200% of the target award. Expense for the performance condition-based award is recorded when the
achievement of the performance condition is considered probable of achievement and is recorded on a straight-
line basis over the requisite service period. If such performance criteria are not met, no compensation cost is
recognized, and any recognized compensation cost is reversed. The closing stock price on the date of grant,
adjusted for a discount to reflect the illiquidity inherent in the PSUs, represents the grant-date fair value for these
awards.

Restricted Stock Units

The fair value of restricted stock units is based on the closing market price of the Company’s common stock on
the date of grant. These awards generally vest, and are settled in common stock, at 25% per year, over a four-year
period from the date of grant. The Company recognizes compensation expense using the straight-line method
over the life of the restricted stock units.

Stock Options

The fair value of the options granted is estimated at the date of grant using the Black-Scholes option-pricing
model utilizing assumptions based on historical data and current market data. The assumptions include expected
term of the options, risk-free interest rate, expected volatility, and dividend yield. The expected term represents
the expected amount of time that options granted are expected to be outstanding, based on historical and
forecasted exercise behavior. The risk-free rate is based on the rate at the grant date of zero-coupon
U.S. Treasury Notes with a term equal to the expected term of the option. Expected volatility is estimated using
historical volatility rates based on historical weekly price changes over a term equal to the expected term of the
options. The Company’s dividend yield is based on historical data. The Company recognizes compensation
expense using the straight-line method over the vesting period of the options except for those issued to certain
retirement-eligible participants, which are expensed on an accelerated basis.

Forfeitures

Forfeitures of share-based awards are estimated at the time of grant and revised, if necessary, in subsequent
periods if actual forfeitures differ from those estimates.

Earnings Per Share

Basic earnings per common share (“EPS”) are computed by dividing net earnings attributable to EnerSys
stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects
the potential dilution that would occur if securities or other contracts to issue common stock were exercised or
converted into common stock. At March 31, 2023, 2022 and 2021, the Company had outstanding stock options,
restricted stock units, market condition and performance condition-based awards, which could potentially dilute
basic earnings per share in the future.

Segment Reporting

The Company’s chief operating decision maker, or CODM (the Company’s Chief Executive Officer), reviews
financial information for purposes of assessing business performance and allocating resources, by focusing on
the lines of business on a global basis. The Company excludes certain items that are not included in the segment
performance as these are managed and viewed on a consolidated basis. The Company identifies the following as
its three operating segments, based on lines of business:

• Energy Systems—uninterruptible power systems, or “UPS” applications for computer and computer-
controlled systems used in data centers, as well as telecommunications systems, switchgear and

B-74

electrical control systems used in industrial facilities and electric utilities, large-scale energy storage
and energy pipelines. Energy Systems also includes highly integrated power solutions and services to
broadband, telecom, renewable and industrial customers, as well as thermally managed cabinets and
enclosures for electronic equipment and batteries.

•

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United
States requires management to make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. These estimates and assumptions take into account historical and forward
looking factors that the Company believes are reasonable, and the Company’s estimates and assumptions may
evolve as conditions change. Actual results could differ from those estimates.

Examples of significant estimates include the allowance for credit losses, the recoverability of property, plant and
equipment, the incremental borrowing rate for lease liabilities, the recoverability of intangible assets and other
long-lived assets, fair value measurements, including those related to financial instruments, goodwill and
intangible assets, valuation allowances on tax assets, pension and postretirement benefit obligations,
contingencies and the identification and valuation of assets acquired and liabilities assumed in connection with
business combinations.

2. Revenue Recognition

The Company’s revenues by reportable segments are presented in Note 23.

Service revenues for fiscal 2023, 2022 and 2021 amounted to $400,798, $353,088 and $296,213, respectively.

A small portion of the Company’s customer arrangements oblige the Company to create customized products for
its customers that require the bundling of both products and services into a single performance obligation because
the individual products and services that are required to fulfill the customer requirements do not meet the
definition for a distinct performance obligation. These customized products generally have no alternative use to
the Company and the terms and conditions of these arrangements give the Company the enforceable right to
payment for performance completed to date, including a reasonable profit margin. For these arrangements,
control transfers over time and the Company measures progress towards completion by selecting the input or
output method that best depicts the transfer of control of the underlying goods and services to the customer for
each respective arrangement. Methods used by the Company to measure progress toward completion include
labor hours, costs incurred and units of production. Revenues recognized over time for fiscal 2023, 2022 and
2021 amounted to $244,013, $193,824 and $155,217, respectively.

On March 31, 2023, the aggregate transaction price allocated to unsatisfied (or partially unsatisfied) performance
obligations was approximately $137,654, of which, the Company estimates that approximately $128,914 will be
recognized as revenue in fiscal 2024, $8,740 in fiscal 2025.

Any payments that are received from a customer in advance, prior to the satisfaction of a related performance
obligation and billings in excess of revenue recognized, are deferred and treated as a contract liability. Advance
payments and billings in excess of revenue recognized are classified as current or non-current based on the

B-75

timing of when recognition of revenue is expected. As of March 31, 2023, the current and non-current portion of
contract liabilities were $34,594 and $1,437, respectively. As of March 31, 2022, the current and non-current
portion of contract liabilities were $27,870 and $1,387, respectively. Revenues recognized during fiscal 2023 and
fiscal 2022, that were included in the contract liability at the beginning of the year, amounted to $9,799 and
$6,775, respectively.

Amounts representing work completed and not billed to customers represent contract assets and were $48,616
and $59,924 as of March 31, 2023 and March 31, 2022, respectively.

The Company uses historic customer product return data as a basis of estimation for customer returns and records
the reduction of sales at the time revenue is recognized. At March 31, 2023, the right of return asset related to the
value of inventory anticipated to be returned from customers was $5,380 and refund liability representing
amounts estimated to be refunded to customers was $9,602.

3. Leases

The Company leases manufacturing facilities, distribution centers, office space, vehicles and other equipment
under non-cancellable leases with initial terms typically ranging from 1 to 16 years. At contract inception, the
Company reviews the terms of the arrangement to determine if the contract is or contains a lease. Guidance in
Topic 842 is used to evaluate whether the contract has an identified asset; if the Company has the right to obtain
substantially all economic benefits from the asset; and if it has the right to direct the use of the underlying asset.
When determining if a contract has an identified asset, the Company considers both explicit and implicit assets,
and whether the supplier has the right to substitute the asset. When determining if the Company has the right to
obtain substantially all economic benefits from the asset, the Company considers the primary outputs of the
identified asset throughout the period of use and determines if it receives greater than 90% of those benefits.
When determining if it has the right to direct the use of an underlying asset, the Company considers if it has the
right to direct how and for what purpose the asset is used throughout the period of use and if it controls the
decision-making rights over the asset.

Lease terms may include options to extend or terminate the lease. The Company exercises its judgment to
determine the term of those leases when extension or termination options are present and include such options in
the calculation of the lease term when it is reasonably certain that the Company will exercise those options.

The Company has elected to include both lease and non-lease components in the determination of lease payments
for all asset classes. Payments made to a lessor for items such as taxes, insurance, common area maintenance, or
other costs commonly referred to as executory costs, are also included in lease payments if they are fixed. The
fixed portion of these payments are included in the calculation of the lease liability, while any variable portion
would be recognized as variable lease expenses, when incurred. Variable payments made to third parties for
these, or similar costs, such as utilities, are not included in the calculation of lease payments.

Both finance and operating leases are reflected as liabilities on the commencement date of the lease based on the
present value of the lease payments to be made over the lease term. As most of the leases do not provide an
implicit rate, the Company has exercised judgment in electing the incremental borrowing rate based on the
information available when the lease commences to determine the present value of future payments. Right-of-use
assets are valued at the initial measurement of the lease liability, plus any initial direct costs or rent prepayments
and reduced by any lease incentives and any deferred lease payments.

Operating lease expense is recognized on a straight-line basis over the lease term. Finance lease expense includes
depreciation, which is recognized on a straight-line basis over the expected life of the leased asset, and interest
expense, which is recognized following an effective interest rate method.

Short term leases with an initial term of 12 months or less are not presented on the balance sheet and expense is
recognized as incurred. The current and non-current portion of operating lease liabilities are reflected in accrued

B-76

expenses and other liabilities, respectively, on the consolidated balance sheets. The right-of use assets relating to
operating and finance leases are reflected in other assets and property, plant and equipment, respectively, on the
consolidated balance sheets.

The following table presents lease assets and liabilities and their balance sheet classification:

Operating Leases:

Right-of-use assets . . . . . . . . . . . . . . .
Operating lease current liabilities . . .
Operating lease non-current

liabilities . . . . . . . . . . . . . . . . . . . .

Finance Leases:

Right-of-use assets . . . . . . . . . . . . . . .
Finance lease current liabilities . . . . .
Finance lease non-current

liabilities . . . . . . . . . . . . . . . . . . . .

Classification

As of
March 31, 2023

As of
March 31, 2022

Other assets
Accrued expenses

$85,237
21,230

$71,085
20,086

Other liabilities

66,555

52,904

Property, plant, and equipment, net
Current portion of finance leases

Finance leases

342
90

254

344
185

231

The components of lease expense for the fiscal years ended March 31, 2023 and March 31, 2022 were as follows:

Classification

March 31, 2023 March 31, 2022

Operating Leases:

Operating lease cost . . . . . . . . . . . . .
Variable lease cost . . . . . . . . . . . . . .
Short term lease cost . . . . . . . . . . . .

Operating expenses
Operating expenses
Operating expenses

Finance Leases:

Depreciation . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . .

Operating expenses
Interest expense

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$20,232
9,816
4,310

95
10

$26,392
9,620
6,218

233
26

$34,463

$42,489

The following table presents the weighted average lease term and discount rates for leases as of March 31, 2023
and March 31, 2022:

March 31, 2023 March 31, 2022

Operating Leases:

Weighted average remaining lease term (years) . . . . . .
Weighted average discount rate . . . . . . . . . . . . . . . . . . .

5.9 years
4.93%

Finance Leases:

Weighted average remaining lease term (years) . . . . . .
Weighted average discount rate . . . . . . . . . . . . . . . . . . .

3.7 years
6.79%

6.1 years
4.43%

2.3 years
4.79%

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The following table presents future payments due under leases reconciled to lease liabilities as of March 31,
2023:

Finance Leases

Operating Leases

Year ended March 31, 2024
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total undiscounted lease payments . . . . . . . . . . . .
Present value discount . . . . . . . . . . . . . . . . . . . . . .

Lease liability . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$121
101
80
55
26
—

383
39

$344

$ 24,824
20,141
16,122
13,338
9,550
17,736

101,711
13,926

$ 87,785

The following table presents supplemental disclosures of cash flow information related to leases for the fiscal
years ended March 31, 2023 and March 31, 2022:

Cash paid for amounts included in the measurement of lease

liabilities:

Operating cash flows from finance leases . . . . . . . . . . .
Operating cash flows from operating leases . . . . . . . . . .
Financing cash flows from finance leases . . . . . . . . . . .

15
27,176
151

26
26,731
238

March 31, 2023 March 31, 2022

Supplemental non-cash information on lease liabilities

arising from right-of-use assets:

Right-of-use assets obtained in exchange for new

finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . . .

254

$ —

Right-of-use assets obtained in exchange for new

operating lease liabilities . . . . . . . . . . . . . . . . . . . . . .

24,423

33,493

4. Accounts Receivable

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . .

$646,592
8,775

$731,653
12,219

Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . .

$637,817

$719,434

March 31,

2023

2022

During fiscal 2023, the Company entered into a Receivables Purchase Agreement (RPA), under which the
Company continuously sells its interest in designated pools of trade accounts receivables, at a discount, to a
special purpose entity, which in turn sells certain of the receivables to an unaffiliated financial institution
(“unaffiliated financial institution”) on a monthly basis. The Company may sell certain US-originated accounts
receivable balances up to a maximum amount of $150,000. In return for these sales, the Company receives a cash
payment equal to the face value of the receivables and is charged a fee of Secured Overnight Financing Rate
(“SOFR”) plus 85 basis points against the sold receivable balance. The program is conducted through EnerSys
Finance LLC (“EnerSys Finance”), an entity structured to be bankruptcy remote, and matures in December 2025.
The Company is deemed the primary beneficiary of EnerSys Finance as the Company has both the power to
direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb
losses or the right to receive the benefits that could potentially be significant to the entity from the transfer of the
trade accounts receivables into the special purpose entity. Accordingly, EnerSys Finance is included in the
Company’s Consolidated Financial Statements.

B-78

Receivables sold to unaffiliated financial institutions under the program are excluded from “Accounts receivable,
net” on the Company’s Consolidated Balance Sheets, and cash receipts are reflected as cash provided by
operating activities on the Consolidated Statements of Cash Flows. The purchase price is received in cash when
the receivables are sold, and fees charged relating to this balance are recorded to other (income) expense. Certain
unsold receivables held by EnerSys Finance serve as collateral to unaffiliated financial institutions. These unsold
receivables are included in “Accounts receivable, net” in the Company’s Consolidated Balance Sheets. The
Company continues servicing the receivables which were sold and in exchange receives a servicing fee from
EnerSys Finance under the program.

During fiscal 2023, the Company sold $343,013 of accounts receivables for approximately $192,713 in net
proceeds to an unaffiliated financial institution, of which $193,013 were collected as of March 31, 2023. Total
collateralized accounts receivables of approximately $274,121, were held by EnerSys Finance at March 31, 2023.

Any accounts receivables held by EnerSys Finance would likely not be available to other creditors of the
Company in the event of bankruptcy or insolvency proceedings relating to the Company until the outstanding
balances under the RPA are satisfied. Additionally, the financial obligations of EnerSys Finance to the
unaffiliated financial institutions under the program are limited to the assets it owns and there is no recourse to
the Company for receivables that are uncollectible as a result of the insolvency of EnerSys Finance or its inability
to pay the account debtors.

5. Inventories

Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Work-in-process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$323,418
123,401
350,979

$260,604
109,441
345,667

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$797,798

$715,712

March 31,

2023

2022

6. Property, Plant, and Equipment

Property, plant, and equipment consist of:

March 31,

2023

2022

Land, buildings, and improvements . . . . . . . . . . . . . .
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . .

$ 312,294
881,198
75,053

$ 313,090
851,251
69,550

Less accumulated depreciation . . . . . . . . . . . . . . . . . .

1,268,545
(755,262)

1,233,891
(730,627)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 513,283

$ 503,264

Depreciation expense for the fiscal years ended March 31, 2023, 2022, and 2021 totaled $60,405, $62,584, and
$60,956, respectively. Interest capitalized in connection with major capital expenditures amounted to $857, $447,
and $1,319 for the fiscal years ended March 31, 2023, 2022 and 2021, respectively.

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7. Goodwill and Other Intangible Assets

Other Intangible Assets

Information regarding the Company’s other intangible assets are as follows:

March 31,

2023

2022

Gross
Amount

Accumulated
Amortization

Net
Amount

Gross
Amount

Accumulated
Amortization

Net
Amount

$144,702 $

(953) $143,749 $145,808 $

(953) $144,855

Indefinite-lived intangible assets:
Trademarks . . . . . . . . . . . . . . . . . . . . .
Finite-lived intangible assets:

Customer relationships . . . . . . . .
Non-compete . . . . . . . . . . . . . . . .
Technology . . . . . . . . . . . . . . . . .
Trademarks . . . . . . . . . . . . . . . . .
Licenses . . . . . . . . . . . . . . . . . . . .

295,293
2,825
96,713
8,946
1,196

(130,262)
(2,825)
(47,585)
(6,442)
(1,196)

165,031
—
49,128
2,504
—

298,577
2,825
97,367
8,947
1,196

(109,820)
(2,825)
(38,712)
(5,012)
(1,196)

188,757
—
58,655
3,935
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . .

$549,675 $(189,263) $360,412 $554,720 $(158,518) $396,202

The Company’s amortization expense related to finite-lived intangible assets was $30,748, $33,294, and $33,126,
for the years ended March 31, 2023, 2022 and 2021, respectively. The expected amortization expense based on
the finite-lived intangible assets as of March 31, 2023, is $27,648 in fiscal 2024, $26,530 in fiscal 2025, $25,603
in fiscal 2026, $24,780 in fiscal 2027 and $24,275 in fiscal 2028.

Goodwill

The following table presents the changes in the carrying amount of goodwill by segment during fiscal 2022 and
2023:

Energy
Systems

Motive
Power

Specialty

Total

Balance at March 31, 2021 . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustment . . . . . . . . . .

$279,676
(215)

$327,055
(3,752)

$98,862
(986)

$705,593
(4,953)

Balance at March 31, 2022 . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustment . . . . . . . . . .

$279,461
(21,257)

$323,303
(1,773)

$97,876
(895)

$700,640
(23,925)

Balance at March 31, 2023 . . . . . . . . . . . . . . . . . . . .

$258,204

$321,530

$96,981

$676,715

Impairment of goodwill, finite and indefinite-lived intangibles

Goodwill is tested annually for impairment during the fourth quarter or earlier upon the occurrence of certain
events or substantive changes in circumstances that indicate goodwill is more likely than not impaired. The
Company did not record any impairment relating to its goodwill during fiscal 2023, 2022, and 2021.

During the fourth quarter of fiscal 2023 and 2022, the Company recorded non-cash charges of $480 and $1,178,
respectively, related to impairment of indefinite-lived trademarks under the caption “Impairment of indefinite-
lived intangibles” in the Consolidated Statements of Income. Management completed its evaluation of key inputs
used to estimate the fair value of its indefinite-lived trademarks and determined that an impairment charge was
appropriate.

The Company estimated tax-deductible goodwill to be approximately $86,709 and $101,499 as of March 31,
2023 and 2022, respectively.

B-80

8. Prepaid and Other Current Assets

Prepaid and other current assets consist of the following:

March 31,

2023

2022

Contract assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid non-income taxes . . . . . . . . . . . . . . . . . . . . . . . . .
Non-trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 48,616
17,946
6,978
4,915
35,146

$ 59,924
25,585
16,670
7,162
46,218

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$113,601

$155,559

9. Accrued Expenses

Accrued expenses consist of the following:

Payroll and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued selling expenses . . . . . . . . . . . . . . . . . . . . . . . . .
Contract liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . .
VAT and other non-income taxes . . . . . . . . . . . . . . . . . . .
Freight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

March 31,

2023

2022

$ 80,826
47,330
34,594
24,226
21,230
15,321
16,482
8,152
7,531
1,314
445
51,496

$ 81,058
48,894
27,870
20,716
20,086
16,458
14,167
1,229
10,793
1,294
1,030
46,170

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$308,947

$289,765

(1) Income taxes payable includes amounts relating to the Tax Act—Transition Tax totaling $11,572 and

$6,172 net of income taxes payable in a prepaid position of $3,420 and $4,943 for fiscal 2023 and fiscal
2022, respectively. .

10. Debt

The following summarizes the Company’s long-term debt as of March 31, 2023 and March 31, 2022:

2023

2022

Unamortized
Issuance
Costs

Principal

Unamortized
Issuance
Costs

Principal

Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second Amended Credit Facility, due 2026 . . . . . . . . . . . . .

$ 300,000
748,413

$2,705
3,719

$ 600,000
650,268

$3,905
3,361

$1,048,413

$6,424

$1,250,268

$7,266

Less: Unamortized issuance costs . . . . . . . . . . . . . . . . . . . . .

6,424

Long-term debt, net of unamortized issuance costs . . . . . . . .

$1,041,989

7,266

$1,243,002

B-81

The Company’s Senior Notes comprise the following:

4.375% Senior Notes due 2027

On December 11, 2019, the Company issued $300,000 in aggregate principal amount of its 4.375% Senior Notes
due December 15, 2027 (the “2027 Notes”). Proceeds from this offering, net of debt issuance costs were
$296,250 and were utilized to pay down the Amended 2017 Revolver (defined below). The 2027 Notes bear
interest at a rate of 4.375% per annum accruing from December 11, 2019. Interest is payable semiannually in
arrears on June 15 and December 15 of each year, commencing on June 15, 2020. The 2027 Notes mature on
December 15, 2027, unless earlier redeemed or repurchased in full and are unsecured and unsubordinated
obligations of the Company. They are fully and unconditionally guaranteed, jointly and severally, by certain of
its subsidiaries that are guarantors under the Fourth Amended Credit Facility (defined below). These guarantees
are unsecured and unsubordinated obligations of such guarantors.

The Company may redeem, prior to September 15, 2027, all or a portion of the 2027 Notes at a price equal to
100% of the principal amount of the 2027 Notes to be redeemed, plus accrued and unpaid interest and a “make
whole” premium to, but excluding, the redemption date. The Company may redeem, on or after September 15,
2027, all or a portion of the 2027 Notes at a price equal to 100% of the principal amount of the 2027 Notes, plus
accrued and unpaid interest to, but excluding, the redemption date. If a change of control triggering event occurs,
the Company will be required to offer to repurchase the 2027 Notes at a price in cash equal to 101% of the
aggregate principal amount of the 2027 Notes, plus accrued and unpaid interest to, but excluding, the date of
repurchase. The 2027 Notes were rank pari passu with the 2023 Notes (defined below) prior to their redemption.

5.00% Senior Notes due 2023

The 5% Senior Notes due April 30, 2023 (the “2023 Notes”) bear interest at a rate of 5.00% per annum and have
an original face value of $300,000. Interest is payable semiannually in arrears on April 30 and October 30 of each
year and commenced on October 30, 2015. The 2023 Notes will mature on April 30, 2023, unless earlier
redeemed or repurchased in full. The 2023 Notes are unsecured and unsubordinated obligations of the Company.
The 2023 Notes are fully and unconditionally guaranteed, jointly and severally, by certain of its subsidiaries that
are guarantors under the Second Amended Credit Facility. These guarantees are unsecured and unsubordinated
obligations of such guarantors.

On February 10, 2023, the Company issued a notice of redemption for all $300,000 aggregate principal amount
of its outstanding 5.00% Senior Notes due 2023 (the “2023 Notes”) with a redemption date (the “Redemption
Date) on March 13, 2023, at a redemption price equal to 100% of the 2023 Notes to be redeemed, plus accrued
and unpaid interest to, but excluding, the Redemption Date. As of March 31, 2023, all principal and unamortized
issuance costs are unrecognized from the balance sheet.

2017 Credit Facility and Subsequent Amendments

In fiscal 2018, the Company entered into a credit facility (the “2017 Credit Facility”). The 2017 Credit Facility
scheduled to mature on September 30, 2022, initially comprised a $600,000 senior secured revolving credit
facility (“2017 Revolver”) and a $150,000 senior secured term loan (“2017 Term Loan”). The Company utilized
the borrowings from the 2017 Credit Facility to repay its pre-existing credit facility.

In fiscal 2019, the Company amended the 2017 Credit Facility (as amended, the “Amended Credit Facility”) to
fund the Alpha acquisition. The Amended Credit Facility consisted of $449,105 senior secured term loans (the
“Amended Term Loan”), including a CAD 133,050 ($99,105) senior secured term loan and a $700,000 senior
secured revolving credit facility (the “Amended Revolver”). The amendment resulted in an increase of the 2017
Term Loan and the 2017 Revolver by $299,105 and $100,000, respectively.

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During the second quarter of fiscal 2022, the Company entered into a second amendment to the 2017 Credit
Facility (as amended, the “Second Amended Credit Facility”). The Second Amended Credit Facility, scheduled
to mature on September 30, 2026, consists of a $130,000 senior secured term loan (the “Second Amended Term
Loan”), a CAD 106,440 ($84,229) senior secured term loan and an $850,000 senior secured revolving credit
facility (the “Second Amended Revolver”). The second amendment resulted in a decrease of the Amended Term
Loan by $150,000 and an increase of the Amended Revolver by $150,000.

During the second quarter of fiscal 2023, the Company entered into a third amendment to the 2017 Credit
Facility (as amended, the “Third Amended Credit Facility”). The Third Amended Credit Facility provides a new
incremental delayed-draw senior secured term loan up to $300,000 (the “Third Amended Term Loan”), which
shall be available to draw at any time until March 15, 2023. Once drawn, the funds will mature on September 30,
2026, the same as the Company’s Second Amended Term loan and Second Amended Revolver. In connection
with the agreement, the Company incurred $1,161 in third party administrative and legal fees recognized in
interest expense and capitalized $1,096 in charges from existing lenders as a deferred asset. During the fourth
quarter, the Company drew $300,000 in the form of the Third Amended Term Loan. Additionally, the Company
derecognized the capitalized deferred asset and recognized the $1,096 as a deferred financing costs.

Subsequent to the fourth amendment, the quarterly installments payable on the Second Amended Term Loan are
$2,608 beginning December 31, 2022, $3,912 beginning December 31, 2024 and $5,216 beginning December 31,
2025 with a final payment of $156,472 on September 30, 2026. The Fourth Amended Credit Facility may be
increased by an aggregate amount of $350,000 in revolving commitments and /or one or more new tranches of
term loans, under certain conditions. Both the Second Amended Revolver and the Second Amended Term Loan
bear interest, at the Company’s option, at a rate per annum equal to either (i) the SOFR or Canadian Dollar
Offered Rate (“CDOR”) plus (i) Term SOFR plus between 1.125% and 2.25% (currently 1.25% and based on the
Company’s consolidated net leverage ratio) or (ii) the U.S. Dollar Base Rate (which equals, for any day a
fluctuating rate per annum equal to the highest of (a) the Federal Funds Effective Rate plus 0.50%, (b) Bank of
America “Prime Rate” and (c) the Eurocurrency Base Rate plus 1%; provided that, if the Base Rate shall be less
than zero, such rate shall be deemed zero) (iii) the CDOR Base Rate equal to the higher of (a) Bank of America
“Prime Rate” and (b) average 30-day CDOR rate plus 0.50%.

The quarterly installments payable on the Third Amended Term Loan are $3,750 beginning June 30, 2023,
$5,625 beginning December 31, 2024 and $7,500 beginning December 31, 2025 with a final payment of
$232,500 on September 30, 2026. The Third Amended Term Loan bears interest, at the Company’s option, at a
rate per annum equal to either (i) the Secured Overnight Financing Rate (“SOFR”) plus 10 basis points plus
(i) Term SOFR plus between 1.375% and 2.50% (currently 1.50% and based on the Company’s consolidated net
leverage ratio) or (ii) the U.S. Dollar Base Rate plus between 0.375% and 1.50%, which equals, for any day a
fluctuating rate per annum equal to the highest of (a) the Federal Funds Effective Rate plus 0.50%, (b) Bank of
America “Prime Rate” and (c) the Term SOFR plus 1%; provided that, if the Base Rate shall be less than zero,
such rate shall be deemed zero). Until the funds were drawn on March 13, 2023, the Company paid a
commitment fee of 0.175% to 0.35% at a rate per annum on the unused portion.

Obligations under the Fourth Amended Credit Facility are secured by substantially all of the Company’s existing
and future acquired assets, including substantially all of the capital stock of the Company’s United States
subsidiaries that are guarantors under the Second Amended Credit Facility and up to 65% of the capital stock of
certain of the Company’s foreign subsidiaries that are owned by the Company’s United States subsidiaries.

The Fourth Amended Credit Facility allows for up to two temporary increases in the maximum leverage ratio to
4.50x from 4.00x to 4.25x for a four quarter period following an acquisition larger than $250,000. Effective with

B-83

the Third Amended Credit Facility, the maximum leverage ratio increased from 3.50x to 4.25x effective to the
last day of the second quarter of fiscal year 2024 and decreasing subsequently to 4.00x.

As of March 31, 2023, the Company had $245,000 outstanding under the Second Amended Revolver, $203,413
under the Second Amended Term Loan, and $300,000 outstanding under the Third Amended Term Loan.

The scheduled repayments within the next twelve months of fiscal 2024, relating to the Second and Third
Amended Term Loans is $10,431 and $15,000, respectively, and is classified as long-term debt, as the Company
expects to refinance the future quarterly payments with revolver borrowings under the Second Amended Credit
Facility.

Interest Rates on Long Term Debt

The weighted average interest rate on the long term debt at March 31, 2023 and March 31, 2022, was 4.6% and
3.3%, respectively.

Interest Paid

The Company paid in cash, $58,368, $37,776 and $36,365, net of interest received, for interest during the fiscal
years ended March 31, 2023, 2022 and 2021, respectively.

Covenants

The Company’s financing agreements contain various covenants, which, absent prepayment in full of the
indebtedness and other obligations, or the receipt of waivers, would limit the Company’s ability to conduct
certain specified business transactions including incurring debt, mergers, consolidations or similar transactions,
buying or selling assets out of the ordinary course of business, engaging in sale and leaseback transactions,
paying dividends and certain other actions. The Company is in compliance with all such covenants.

Short-Term Debt

As of March 31, 2023 and 2022, the Company had $30,642 and $55,084, respectively, of short-term borrowings.
The weighted-average interest rate on these borrowings was approximately 7.0% and 2.4%, respectively, for
fiscal years ended March 31, 2023 and 2022.

Letters of Credit

As of March 31, 2023 and 2022, the Company had $3,565 and $2,959, respectively, of standby letters of credit.

Debt Issuance Costs

In fiscal 2023, the Company capitalized $1,122 in debt issuance costs in connection with the Third and Fourth
Amended Credit Facilities. In fiscal 2022, the Company capitalized $2,952 in debt issuance costs and wrote off
$128 of unamortized debt issuance costs in connection with the Second Amended Credit Facility. Amortization
expense, relating to debt issuance costs, included in interest expense was $1,964, $2,107, and $2,072 for the
fiscal years ended March 31, 2023, 2022 and 2021, respectively. Debt issuance costs, net of accumulated
amortization, totaled $6,424 and $7,266 as of March 31, 2023 and 2022, respectively.

Available Lines of Credit

As of March 31, 2023 and 2022, the Company had available and undrawn, under all its lines of credit, $693,444
and $482,305, respectively, including $90,839 and $69,430, respectively, of uncommitted lines of credit as of
March 31, 2023 and March 31, 2022.

B-84

11. Other Liabilities

Other liabilities consist of the following:

Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . .
Tax Act—Transition Tax . . . . . . . . . . . . . . . . . . . . . . . . .
Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment hedges . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liability for uncertain tax positions . . . . . . . . . . . . . . . . .
Contract liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

March 31,

2023

2022

$ 66,555
34,715
32,404
24,528
15,760
3,930
1,437
11,783

$ 52,904
46,587
34,262
28,566
4,090
5,210
1,387
10,774

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$191,112

$183,780

12. Fair Value of Financial Instruments

Recurring Fair Value Measurements

The following tables represent the financial assets and (liabilities) measured at fair value on a recurring basis as
of March 31, 2023 and March 31, 2022 and the basis for that measurement:

Lead forward contracts . . . . . . . . . . . . . .
Foreign currency forward contracts . . . . .
Interest rate swaps . . . . . . . . . . . . . . . . . .
Net investment hedges . . . . . . . . . . . . . . .

Total Fair Value
Measurement
March 31, 2023

(89)
923
(1,162)
(15,760)

Total derivatives . . . . . . . . . . . . . . . . . . .

$(16,088)

Quoted Price in
Active Markets
for Identical
Assets
(Level 1)

$—
—
—
—

$—

Total Fair Value
Measurement
March 31, 2022

Quoted Price in
Active Markets
for Identical
Assets
(Level 1)

Lead forward contracts . . . . . . . . . . . . . .
Foreign currency forward contracts . . . . .
Net investment hedges . . . . . . . . . . . . . . .

Total derivatives . . . . . . . . . . . . . . . . . . .

$2,520
(256)
298

$2,562

$—
—
—

$—

Significant
Other
Observable
Inputs
(Level 2)

(89)
923
(1,162)
(15,760)

$(16,088)

Significant
Other
Observable
Inputs
(Level 2)

$2,520
(256)
298

$2,562

Significant
Unobservable
Inputs
(Level 3)

$—
—
—
—

$—

Significant
Unobservable
Inputs
(Level 3)

$—
—
—

$—

The fair values of lead forward contracts are calculated using observable prices for lead as quoted on the London
Metal Exchange (“LME”) and, therefore, were classified as Level 2 within the fair value hierarchy as described
in Note 1, Summary of Significant Accounting Policies.

The fair values for foreign currency forward contracts, interest rate swaps, and net investment hedges are based
upon current quoted market prices and are classified as Level 2 based on the nature of the underlying market in
which these derivatives are traded.

The fair value of interest rate swap agreements are based on observable prices as quoted for receiving the
variable one month term SOFR and paying fixed interest rates and, therefore, were classified as Level 2.

B-85

Financial Instruments

The fair values of the Company’s cash and cash equivalents approximate carrying value due to their short
maturities.

The fair value of the Company’s short-term debt and borrowings under the Second Amended Credit Facility (as
defined in Note 10), approximate their respective carrying value, as they are variable rate debt and the terms are
comparable to market terms as of the balance sheet dates and are classified as Level 2.

The fair value of the Company’s 2027 Notes and 2023 Notes, (collectively, the “Senior Notes”) represent the
trading values based upon quoted market prices and are classified as Level 2. The 2027 Notes were trading at
approximately 92% and 95% of face value on March 31, 2023 and March 31, 2022, respectively. The 2023
Notes, which were redeemed in fiscal 2023 as discussed in Note 10, were trading at approximately 101% of face
value on March 31, 2022.

The carrying amounts and estimated fair values of the Company’s derivatives and Senior Notes at March 31,
2023 and 2022 were as follows:

March 31, 2023

March 31, 2022

Carrying
Amount

Fair Value

Carrying
Amount

Fair Value

Financial assets:

Derivatives(1) . . . . . . . . . . . . . . . . . . . . . . . . . .

$ —

2,562

Financial liabilities:

Senior Notes(2) . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives(1) . . . . . . . . . . . . . . . . . . . . . . . . . .

$300,000
(16,088)

$276,000
(16,088)

$600,000
—

$585,750
—

(1) Represents lead, foreign currency forward contracts, interest rate swaps, and net investment hedges (see

Note 13 for asset and liability positions of the lead, foreign currency forward contracts and net investment
hedges at March 31, 2023 and March 31, 2022).

(2) The fair value amount of the Senior Notes at March 31, 2023 and March 31, 2022 represent the trading

value of the instruments.

Non-recurring fair value measurements

The valuation of goodwill and other intangible assets is based on information and assumptions available to the
Company at the time of acquisition, using income and market approaches to determine fair value. The Company
tests goodwill and other intangible assets annually for impairment, or when indications of potential impairment
exist (see Note 1).

Goodwill is tested for impairment by determining the fair value of the Company’s reporting units. The
unobservable inputs used to measure the fair value of the reporting units include projected growth rates,
profitability, and the risk factor premium added to the discount rate. The remeasurement of the reporting unit fair
value is classified as a Level 3 fair value assessment due to the significance of unobservable inputs developed
using company-specific information.

The inputs used to measure the fair value of other intangible assets were largely unobservable and accordingly
were also classified as Level 3. The fair value of trademarks is based on an estimate of the royalties saved that
would have been paid to a third party had the Company not owned the trademark. The fair value of other
indefinite-lived intangibles was estimated using the income approach, based on cash flow projections of revenue
growth rates, taking into consideration industry and market conditions.

In connection with the annual impairment testing conducted as of January 2, 2023, two of the Company’s
indefinite-lived trademarks, which were acquired through acquisitions, were recorded at fair value on a

B-86

non-recurring basis at $6,900 and the remeasurements resulted in an impairment of $480. In determining the fair
value of these assets, the Company used a royalty rate of 1.5% based on comparable market rates and used
discount rate of 24.0%. In fiscal 2022, the Company recorded an impairment relating to additional two
trademarks, which were recorded at a fair value on a non-recurring basis of $980 and the remeasurement resulted
in an impairment of $1,178. In determining the fair value of these assets, the Company used a royalty rate of
1.25% based on comparable market rates and used a discount rate of 13.0% and 14.5%.

These impairment charges relating to goodwill and indefinite-lived trademarks are included under the captions
Impairment of goodwill and Impairment of indefinite-lived intangibles in the Consolidated Statements of Income.

Ooltewah

On June 29, 2022, the Company committed to a plan to close its facility in Ooltewah, Tennessee, which focused
on manufacturing flooded motive power batteries for electric forklifts. Management determined that future
demand for traditional motive power flooded cells will decrease as customers transition to maintenance free
product solutions in lithium and Thin Plate Pure Lead (TPPL). As a result, the Company concluded that the
carrying value of the asset group was not recoverable and recorded during the first quarter of fiscal 2023 a
write-off of $7,300 of the fixed assets, for which there is expected to be no salvageable value. The valuation
technique used to measure the fair value of fixed assets was a combination of the income and market approaches.
The inputs used to measure the fair value of these fixed assets under the income approach were largely
unobservable and accordingly were classified as Level 3

Russia

Vijayawada, India

During fiscal 2021, the Company committed to a plan to close its facility in Vijayawada, India to align with its
strategic vision for the new line of business structure and footprint. As a result of this decision, in fiscal 2022, the
Company reclassified property, plant and equipment with a carrying value of $4,573 to assets held for sale on the
Consolidated Balance Sheet and recognized an impairment loss of $2,973 under the caption Loss on assets held
for sale on its consolidated statement of income, by recording the carrying value of these assets to their estimated
fair value of $1,600, based on a non-recurring basis. The fair value was based on the expected proceeds, less
costs to sell.

Hagen, Germany

In fiscal 2021, the Company committed to a plan to substantially close all of its facility in Hagen, Germany,
which produces flooded motive power batteries for forklifts. Management determined that future demand for the
motive power batteries produced at this facility was not sufficient, given the conversion from flooded to
maintenance free batteries by customers, the existing number of competitors in the market, as well as the near
term decline in demand and increased uncertainty from the pandemic. As a result, the Company concluded that
the carrying value of the asset group is not recoverable and recorded a write-off of $3,975 of the fixed assets to
their estimated fair value of $14,456, which was recognized in the third quarter of fiscal 2021. The valuation
technique used to measure the fair value of fixed assets was a combination of the income and market approaches.
The inputs used to measure the fair value of these fixed assets under the income approach were largely
unobservable and accordingly were classified as Level 3.

B-87

13. Derivative Financial Instruments

The Company utilizes derivative instruments to reduce its exposure to fluctuations in commodity prices, foreign
exchange rates and interest under established procedures and controls. The Company does not enter into
derivative contracts for speculative purposes. The Company’s agreements are with creditworthy financial
institutions and the Company anticipates performance by counterparties to these contracts and therefore no
material loss is expected.

Derivatives in Cash Flow Hedging Relationships

Lead Forward Contracts

The Company enters into lead forward contracts to fix the price for a portion of its lead purchases. Management
considers the lead forward contracts to be effective against changes in the cash flows of the underlying lead
purchases. The vast majority of such contracts are for a period not extending beyond one year. At March 31,
2023 and 2022, the Company has hedged the price to purchase approximately 50.0 million pounds and
54.0 million pounds of lead, respectively, for a total purchase price of $47,921 and $56,768, respectively.

Foreign Currency Forward Contracts

The Company uses foreign currency forward contracts and options to hedge a portion of the Company’s foreign
currency exposures for lead, as well as other foreign currency exposures so that gains and losses on these
contracts offset changes in the underlying foreign currency denominated exposures. The vast majority of such
contracts are for a period not extending beyond one year. As of March 31, 2023 and 2022, the Company had
entered into a total of $45,823 and $29,676, respectively, of such contracts.

Interest Rate Swap Agreements

The Company is exposed to changes in variable interest rates on borrowings under our credit agreement. On a
selective basis, from time to time, it enters into interest rate swap agreements to reduce the negative impact that
increases in interest rates could have on our outstanding variable rate debt. At March 31, 2023 such agreements
effectively convert $200,000 of our variable-rate debt to a fixed-rate basis, utilizing the one-month term SOFR,
as a floating rate reference. Fluctuations in SOFR and fixed rates affect both our net financial investment position
and the amount of cash to be paid or received by us under these agreements.

Derivatives in Net Investment Hedging Relationships

Net Investment Hedges

The Company uses cross currency fixed interest rate swaps to hedge its net investments in foreign operations
against future volatility in the exchange rates between the U.S. Dollar and Euro.

On September 29, 2022, the Company terminated its $300,000 cross-currency fixed interest rate swap contracts,
originally entered into on December 23, 2021, and received a net settlement of $43,384. The cash proceeds have
been included in Proceeds from termination of net investment hedges in our Consolidated Statements of Cash
Flows.

On September 29, 2022, the Company entered into cross-currency fixed interest rate swap contracts with an
aggregate notional amount of $150,000, maturing on December 15, 2027. The cross-currency fixed interest rate
swap contracts qualify for hedge accounting as a net investment hedging instrument, which allows for them to be
remeasured to foreign currency translation adjustment within AOCI (“Accumulated Other Comprehensive
Income”) to offset the translation risk from those investments. Balances in the foreign currency translation
adjustment accounts remain until the sale or substantially complete liquidation of the foreign entity, upon which
they are recognized as a component of income (expense).

B-88

Impact of Hedging Instruments on AOCI

In the coming twelve months, the Company anticipates that $5,818 of pretax gain relating to lead, foreign
currency forward contracts, interest rate swaps, and net investment hedges will be reclassified from AOCI as part
of cost of goods sold and interest expense. This amount represents the current net unrealized impact of hedging
lead, foreign exchange rates and interest rates, which will change as market rates change in the future. This
amount will ultimately be realized in the Consolidated Statements of Income as an offset to the corresponding
actual changes in lead, foreign exchange rates and lead costs resulting from variable lead cost, foreign exchange
and interest rates hedged.

Derivatives not Designated in Hedging Relationships

Foreign Currency Forward Contracts

The Company also enters into foreign currency forward contracts to economically hedge foreign currency
fluctuations on intercompany loans and foreign currency denominated receivables and payables. These are not
designated as hedging instruments and changes in fair value of these instruments are recorded directly in the
Consolidated Statements of Income. As of March 31, 2023 and 2022, the notional amount of these contracts was
$102,558 and $22,990, respectively.

Presented below in tabular form is information on the location and amounts of derivative fair values in the
Consolidated Balance Sheets and derivative gains and losses in the Consolidated Statements of Income:

Fair Value of Derivative Instruments
March 31, 2023 and 2022

Derivatives and Hedging
Activities Designated as
Cash Flow Hedges

Derivatives and Hedging
Activities Designated as
Net Investment Hedges

Derivatives and Hedging
Activities Not Designated
as Hedging Instruments

March 31,
2023

March 31,
2022

March 31,
2023

March 31,
2022

March 31,
2023

March 31,
2022

Prepaid and other current assets:

Lead forward contracts . . . . . . . . . . . . . .
Foreign currency forward contracts . . . .
Net investment hedges . . . . . . . . . . . . . .

$ —
723
—

$2,520
256
—

$ —
—
—

$ —
—
4,388

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 723

$2,776

$ —

$4,388

Accrued expenses:

Lead forward contracts . . . . . . . . . . . . . .
Foreign currency forward contracts . . . .

89
—

$ —
—

Other liabilities:

Interest rate swaps . . . . . . . . . . . . . . . . .
Net investment hedges . . . . . . . . . . . . . .

1,162
—

—
—

—
15,760

—
4,090

$—
200
—

$200

$—
—

—
—

$—
—
—

$—

$—
512

—
—

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . .

$1,251

$ —

$15,760

$4,090

$—

$512

B-89

The Effect of Derivative Instruments on the Consolidated Statements of Income
For the fiscal year ended March 31, 2023

Derivatives Designated as Cash Flow Hedges

Lead forward contracts . . . . . . . . . . . . . .
Foreign currency forward contracts . . . .
Interest Rate Swaps . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pretax Gain (Loss)
Recognized in AOCI on
Derivative (Effective Portion)

$(3,883)
1,849
(1,162)

$(3,196)

Location of Gain
(Loss) Reclassified
from
AOCI into Income
(Effective Portion)

Cost of goods sold
Cost of goods sold
Interest expense

Pretax Gain (Loss)
Reclassified from AOCI into
Income (Effective Portion)

$(3,765)
2,589
—

$(1,176)

Derivatives Designated as Net Investment Hedges

Pretax Gain (Loss)
Recognized in AOCI on
Derivative (Effective Portion)

Cross currency fixed interest rate swaps . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$29,021

Derivatives Not Designated as Hedging Instruments

Location of Gain
(Loss) Reclassified
from
AOCI into Income
(Effective Portion)

Interest expense

Pretax Gain (Loss)
Reclassified from AOCI into
Income (Effective Portion)

$3,587

Location of Gain (Loss)
Recognized in Income
on Derivatives

Pretax
Gain (Loss)

Foreign currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other (income) expense, net

$1,182

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,182

The Effect of Derivative Instruments on the Consolidated Statements of Income
For the fiscal year ended March 31, 2022

Derivatives Designated as Cash Flow Hedges

Lead forward contracts . . . . . . . . . . . . . .
Foreign currency forward contracts . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pretax Gain (Loss)
Recognized in AOCI on
Derivative (Effective Portion)

$12,193
941

$13,134

Location of Gain
(Loss) Reclassified
from
AOCI into Income
(Effective Portion)

Cost of goods sold
Cost of goods sold

Pretax Gain (Loss)
Reclassified from AOCI into
Income (Effective Portion)

$8,974
768

$9,742

Derivatives Designated as Net Investment Hedges

Pretax Gain (Loss)
Recognized in AOCI on
Derivative (Effective Portion)

Cross currency fixed interest rate swaps . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,479

Location of Gain
(Loss) Reclassified
from
AOCI into Income
(Effective Portion)

Interest expense

Pretax Gain (Loss)
Reclassified from AOCI into
Income (Effective Portion)

$1,181

Derivatives Not Designated as Hedging Instruments

Location of Gain (Loss)
Recognized in Income
on Derivatives

Foreign currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . Other (income) expense, net

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pretax Gain (Loss)

$(157)

B-90

The Effect of Derivative Instruments on the Consolidated Statements of Income
For the fiscal year ended March 31, 2021

Derivatives Designated as Cash Flow Hedges

Lead forward contracts . . . . . . . . . . . . . .
Foreign currency forward contracts . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pretax Gain (Loss)
Recognized in AOCI on
Derivative (Effective Portion)

$202
130

$332

Location of Gain
(Loss) Reclassified
from
AOCI into Income
(Effective Portion)

Cost of goods sold
Cost of goods sold

Pretax Gain (Loss)
Reclassified from AOCI into
Income (Effective Portion)

$(7,411)
(492)

$(7,903)

Derivatives Not Designated as Hedging Instruments

Location of Gain (Loss)
Recognized in Income
on Derivatives

Foreign currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . Other (income) expense, net

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pretax Gain (Loss)

$430

14. Income Taxes

Fiscal year ended March 31,

2023

2022

2021

Current income tax expense
Current:

Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 21,203
5,654
23,208

$ 9,558
4,022
15,333

$ 12,591
4,133
19,031

Total current income tax expense . . . . . . . . . . . . . . . . . .
Deferred income tax (benefit) expense

50,065

28,913

35,755

(18,370)
(2,534)
5,668

1,183
(1,453)
1,385

1,495
735
(11,224)

Total deferred income tax (benefit) expense . . . . . . . . . .

(15,236)

1,115

(8,994)

Total income tax expense . . . . . . . . . . . . . . . . . . . . . . . .

$ 34,829

$30,028

$ 26,761

Earnings before income taxes consists of the following:

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 38,703
171,936

$ 21,871
152,068

$ 56,055
114,080

Earnings before income taxes . . . . . . . . . . . . . . . . . . .

$210,639

$173,939

$170,135

Fiscal year ended March 31,

2023

2022

2021

Income taxes paid by the Company for the fiscal years ended March 31, 2023, 2022 and 2021 were $46,309,
$50,484 and $32,002, respectively.

B-91

manufactured or assembled in the United States and sold to third parties. In the period ended March 31, 2023, the
IRA impact resulted in a reduction of our costs of goods sold and income tax payable. We will continue to evaluate
the effects of IRA as more guidance is issued and the relevant implications to our consolidated financial statements.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into
law in the U.S. to provide certain relief as a result of the COVID-19 pandemic. In addition, governments around
the world have enacted or implemented various forms of tax relief measures in response to the economic
conditions in the wake of COVID-19. As of March 31, 2023, neither the CARES Act nor changes to income tax
laws or regulations in other jurisdictions had a significant impact on the Company’s effective tax rate.

The following table sets forth the tax effects of temporary differences that give rise to significant portions of the
deferred tax assets and liabilities:

March 31,

2023

2022

Deferred tax assets:

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net operating loss carryforwards . . . . . . . . . . . . . . .
Lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized R&D Expenditures . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

219
6,387
48,801
20,888
16,378
31,949
22,029

481
8,581
56,010
17,590
—
33,571
19,941

Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . .
Less valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . .

146,651
(31,172)

136,174
(31,017)

Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities:

115,479

105,157

Property, plant and equipment . . . . . . . . . . . . . . . . .
Lease Right-of-use assets . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42,884
20,888
59,152
4,521

41,105
17,590
60,827
3,384

Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . .

127,445

122,906

Net deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . .

$ (11,966) $ (17,749)

The Company has approximately $719 in United States federal net operating loss carryforwards, all of which are
limited by Section 382 of the Internal Revenue Code, with expirations between 2023 and 2027. The Company has
approximately $171,160 of foreign net operating loss carryforwards, of which $136,800 may be carried forward
indefinitely and $34,360 expire between fiscal 2023 and fiscal 2041. In addition, the Company also has approximately
$22,936 of state net operating loss carryforwards with expirations between fiscal 2023 and fiscal 2042.

The following table sets forth the changes in the Company’s valuation allowance for fiscal 2023, 2022 and 2021:

Balance at
Beginning of
Period

Additions
Charged to
Expense

Valuation
Allowance
Reversal

Business
Combination
Adjustments

Other(1)

Balance at
End of
Period

Fiscal year ended March 31, 2021 . . . . . . . .
Fiscal year ended March 31, 2022 . . . . . . . .
Fiscal year ended March 31, 2023 . . . . . . . .

$20,951
31,928
31,017

$8,437
4,486
2,654

$(2,904)
(1,535)
(586)

$6,384
—
—

$ (940) $31,928
(3,862) 31,017
(1,913) 31,172

(1) Includes the impact of currency changes and the expiration of net operating losses for which a full valuation

allowance was recorded.

B-92

As of March 31, 2023 and 2022, the Company had no federal valuation allowance and the valuation allowance
associated with the state tax jurisdictions was $343 and $686, respectively.

As of March 31, 2023 and 2022, the valuation allowance associated with certain foreign tax jurisdictions was
$30,829 and $30,331, respectively. Of the net increase of $155, $2,068 was recorded as an increase to tax
expense primarily related to deferred tax assets generated in the current year that the Company believes are not
more likely than not to be realized, offset by $(1,913) primarily related to foreign currency translation
adjustments and expiration of foreign net operating losses for which a full valuation allowance was recorded.

A reconciliation of income taxes at the statutory rate (21.0% for fiscal 2023, 2022 and 2021) to the income tax
provision is as follows:

United States statutory income tax expense . . . . . . . . . .
Increase (decrease) resulting from:

Fiscal year ended March 31,

2023

2022

2021

$ 44,233

$ 36,527

$ 35,729

State income taxes, net of federal effect . . . . . . . .
Nondeductible expenses and other . . . . . . . . . . . . .
Net effect of GILTI, FDII, BEAT . . . . . . . . . . . . .
Effect of foreign operations . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . .
Switzerland Tax Reform . . . . . . . . . . . . . . . . . . . .
Research and Development Credit . . . . . . . . . . . . .
IRA Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,714
6,028
2,457
(12,978)
2,068
—
(5,063)
(3,630)

1,724
1,217
5,405
(14,192)
2,951
—
(3,604)
—

4,000
5,273
1,985
(20,035)
5,533
(1,883)
(3,841)
—

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 34,829

$ 30,028

$ 26,761

The effective income tax rates for the fiscal years ended March 31, 2023, 2022 and 2021 were 16.5%, 17.3% and
15.7%, respectively. The effective income tax rate with respect to any period may be volatile based on the mix of
income in the tax jurisdictions in which the Company operates and the amount of its consolidated income before
taxes. The rate decrease in fiscal 2023 compared to fiscal 2022 is primarily due to the impact of IRA offset by
changes in mix of earnings among tax jurisdictions. The rate increase in fiscal 2022 compared to fiscal 2021 is
primarily due to Swiss tax reform and changes in the mix of earnings among tax jurisdictions.

On May 19, 2019, a public referendum held in Switzerland approved the Federal Act on Tax Reform and AHV
(Old-Age and Survivors Insurance) Financing (TRAF) as adopted by the Swiss Federal Parliament on
September 28, 2018. The Swiss tax reform measures were effective January 1, 2020. The Company recorded a
net deferred tax asset of $22,500 during fiscal 2020, related to the amortizable goodwill and based on further
evaluation with the Swiss tax authority, recorded an additional income tax benefit of $1,883 during fiscal 2021.

In fiscal 2023, the foreign effective income tax rate on foreign pre-tax income of $171,936 was 16.8%. In fiscal
2022, the foreign effective income tax rate on foreign pre-tax income of $152,068 was 11.0% and in fiscal 2021,
the foreign effective income tax rate on foreign pre-tax income of $114,080 was 6.8%. The rate increase in fiscal
2023 compared to fiscal 2022 is primarily due to a reduction in favorable permanent items and changes in mix of
earnings among tax jurisdictions. The rate increase in fiscal 2022 compared to fiscal 2021 is primarily due to
Swiss tax reform and changes in the mix of earnings among tax jurisdictions.

Income from the Company’s Swiss subsidiary comprised a substantial portion of its overall foreign mix of
income for the fiscal years ended March 31, 2023, 2022 and 2021 and was taxed, excluding the impact from the
Swiss tax reform, at approximately 7%, 4% and 8%, respectively.

The Company has approximately $1,340,000 and $1,180,000 of undistributed earnings of foreign subsidiaries for
fiscal years 2023 and 2022, respectively. During fiscal 2023, previously undistributed earnings of certain foreign

B-93

subsidiaries were no longer considered indefinitely reinvested, as a result, the Company recorded $4,000 in
additional income taxes. The Company intends to continue to be indefinitely reinvested on the remaining
undistributed foreign earnings and outside basis differences and therefore, no additional income taxes have been
provided.

Uncertain Tax Positions

The following table summarizes activity of the total amounts of unrecognized tax benefits:

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . .
Increases related to current year tax positions . . . . . . . . . . .
Increases related to the Alpha acquisition . . . . . . . . . . . . . .
Increases related to prior year tax positions . . . . . . . . . . . . .
Decreases related to prior tax positions . . . . . . . . . . . . . . . .
Decreases related to prior year tax positions settled . . . . . .
Lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . .

Fiscal year ended March 31,

2023

2022

2021

$ 4,770
24
—
(1)
—
(77)
(1,221)

$ 6,785
21
—
598
—
(784)
(1,850)

$ 7,795
346
—
325
—
—
(1,681)

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 3,495

$ 4,770

$ 6,785

All of the balance of unrecognized tax benefits at March 31, 2023, if recognized, would be included in the
Company’s Consolidated Statements of Income and have a favorable impact on both the Company’s net earnings
and effective tax rate.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various states and
foreign jurisdictions and is routinely subject to income tax examinations. As of March 31, 2022, the most
significant tax examinations in process are the United States and Switzerland. The Company regularly assesses
the likely outcomes of its tax audits and disputes to determine the appropriateness of its tax reserves. However,
any tax authority could take a position on tax treatment that is contrary to the Company’s expectations, which
could result in tax liabilities in excess of reserves. With few exceptions, the Company is no longer subject to U.S.
federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2009.

While the net effect on total unrecognized tax benefits cannot be reasonably estimated, approximately $511 is
expected to reverse in fiscal 2023 due to expiration of various statute of limitations.

The Company recognizes tax related interest and penalties in income tax expense in its Consolidated Statements
of Income. As of March 31, 2023 and 2022, the Company had an accrual of $435 and $440, respectively, for
interest and penalties.

15. Retirement Plans

Defined Benefit Plans

The Company sponsors several retirement and pension plans covering eligible salaried and hourly employees.
The Company uses a measurement date of March 31 for its pension plans.

B-94

Net periodic pension cost for fiscal 2023, 2022 and 2021, includes the following components:

United States Plans

International Plans

Fiscal year ended March 31,

2023

2022

2021

2023

2022

2021

Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
582
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . .
(455)
Amortization and deferral . . . . . . . . . . . . . . . . . . . . . . . . . —

$ — $ — $ — $
517
(526)
7

533
(272)
476

918 $ 1,114 $

1,715
(2,005)
478

1,427
(2,200)
1,205

993
1,388
(1,899)
1,053

Net periodic benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 127 $

(2) $ 737 $ 1,106 $ 1,546 $ 1,535

The following table sets forth a reconciliation of the related benefit obligation, plan assets, and accrued benefit
costs related to the pension benefits provided by the Company for those employees covered by defined benefit
plans:

United States Plans

International Plans

March 31,

2023

2022

2023

2022

Change in projected benefit obligation
Benefit obligation at the beginning of the period . . . . .
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid, inclusive of plan expenses . . . . . . . . . . .
Plan curtailments and settlements . . . . . . . . . . . . . . . .
Actuarial (gains) losses . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustment . . . . . . . . . . .

$16,205
—
582
(843)
—
(1,888)
—

$17,806
—
517
(802)
—
(1,316)
—

$ 70,833
918
1,715
(2,052)
—
(15,995)
(3,701)

$ 83,252
1,114
1,427
(2,328)
(141)
(8,545)
(3,946)

Benefit obligation at the end of the period . . . . . . . . . .

$14,056

$16,205

$ 51,718

$ 70,833

Change in plan assets
Fair value of plan assets at the beginning of the

period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . .
Employer contributions . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid, inclusive of plan expenses . . . . . . . . . . .
Plan curtailments and settlements . . . . . . . . . . . . . . . .
Foreign currency translation adjustment . . . . . . . . . . .

$16,166
(1,348)
—
(843)
—
—

$16,265
443
260
(802)
—
—

$ 42,067
(3,722)
6,428
(2,052)
—
(2,617)

$ 42,844
1,784
1,979
(2,328)
(141)
(2,071)

Fair value of plan assets at the end of the period . . . . .

$13,975

$16,166

$ 40,104

$ 42,067

Funded status deficit . . . . . . . . . . . . . . . . . . . . . . . . . . .

(81) $

(39) $(11,614) $(28,766)

March 31,

2023

2022

Amounts recognized in the Consolidated Balance Sheets

consist of:

Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 14,147
(1,314)
(24,528)

$ 1,055
(1,294)
(28,566)

Funded status deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(11,695) $(28,805)

B-95

The following table represents pension components (before tax) and related changes (before tax) recognized in
AOCI for the Company’s pension plans for the years ended March 31, 2023, 2022 and 2021:

Amounts recorded in AOCI before taxes:

Prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ (128) $
(2,307)

(174) $

(14,049)

(230)
(25,450)

Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(2,435) $(14,223) $(25,680)

Fiscal year ended March 31,

2023

2022

2021

The following table represents changes in plan assets and benefit obligations recognized in AOCI for the
Company’s pension plans for the years ended March 31, 2023, 2022 and 2021:

Fiscal year ended March 31,

2023

2022

2021

Changes in plan assets and benefit obligations:

New prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss (gain) arising during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of exchange rates on amounts included in AOCI . . . . . . . . . . . . . . . .

$ — $ — $ —
(753)
(10,352)
1,909
(957)

(9,362)
(883)

Amounts recognized as a component of net periodic benefit costs:

Amortization of prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization or settlement recognition of net loss . . . . . . . . . . . . . . . . . . . .

(41)
(438)

(45)
(1,167)

(46)
(1,484)

Total recognized in other comprehensive (income) loss . . . . . . . . . . . . . . . . . . . .

$(11,788) $(11,457) $ (374)

The amounts included in AOCI as of March 31, 2023 that are expected to be recognized as components of net
periodic pension cost (before tax) during the next twelve months are as follows:

Prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ (43)
(69)

Net amount expected to be recognized . . . . . . . . . . . . . . . . . . . .

$(112)

The accumulated benefit obligation related to all defined benefit pension plans and information related to
unfunded and underfunded defined benefit pension plans at the end of each fiscal year are as follows:

United States Plans

International Plans

March 31,

2023

2022

2023

2022

All defined benefit plans:

Accumulated benefit obligation . . . . . . . . . . . . . . .

$14,056

$16,205

$49,290

$67,301

Unfunded defined benefit plans:

Projected benefit obligation . . . . . . . . . . . . . . . . . .
Accumulated benefit obligation . . . . . . . . . . . . . . .

$ —
—

$25,562
23,704

$29,570
27,156

Defined benefit plans with a projected benefit

obligation in excess of the fair value of plan assets:

Projected benefit obligation . . . . . . . . . . . . . . . . . .
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . .

$11,671
11,403

$ 5,479
5,188

$25,908
335

$29,570
—

Defined benefit plans with an accumulated benefit

obligation in excess of the fair value of plan assets:

Projected benefit obligation . . . . . . . . . . . . . . . . . .
Accumulated benefit obligation . . . . . . . . . . . . . . .
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . .

$11,671
11,671
11,403

$ 5,479
5,479
5,188

$25,562
23,704
—

$29,570
27,156
—

B-96

Assumptions

Significant assumptions used to determine the net periodic benefit cost for the U.S. and International plans were
as follows:

United States Plans
Fiscal year ended March 31,

International Plans
Fiscal year ended March 31,

2023

2022

2021

2023

2022

2021

3.7%
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . .
5.5
Rate of compensation increase . . . . . . . . . . . . . . . . . N/A

3.0%
5.5
N/A

N/A = not applicable

3.0% 1.5%-5.4% 0.5%-2.3% 1.3%-2.3%
6.0
N/A

2.7-5.3
1.5-4.0

3.1-5.3
1.8-5.5

3.8-5.5
2.0-3.5

Significant assumptions used to determine the projected benefit obligations for the U.S. and International plans
were as follows:

United States Plans

International Plans

March 31,

2023

2022

2023

2022

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of compensation increase . . . . . . . . . . . . . . . . . . . . . . .

4.9%
N/A

N/A = not applicable

3.7% 3.5%-6% 1.5%-5.4%
N/A

2.3-4.5

1.8-5.5

The United States plans do not include compensation in the formula for determining the pension benefit as it is
based solely on years of service.

The expected long-term rate of return for the Company’s pension plan assets is based upon the target asset
allocation and is determined using forward looking assumptions in the context of historical returns and
volatilities for each asset class, as well as correlations among asset classes. The Company evaluates the rate of
return assumptions for each of its plans on an annual basis.

Pension Plan Investment Strategy

The Company’s investment policy emphasizes a balanced approach to investing in securities of high quality and
ready marketability. Investment flexibility is encouraged so as not to exclude opportunities available through a
diversified investment strategy.

Equity investments are maintained within a target range of 40%—75% of the total portfolio market value for the
U.S. plans and with a target of approximately 65% for international plans. The investment strategy for the UK
plan has been updated this year to reflect a de-risking exercise that occurred where the UK plan moved from
65%/35% equity/bonds to 100% bonds. Investments in debt securities include issues of various maturities, and
the average quality rating of bonds should be investment grade with a minimum quality rating of “B” at the time
of purchase.

The Company periodically reviews the asset allocation of its portfolio. The proportion committed to equities,
debt securities and cash and cash equivalents is a function of the values available in each category and risk
considerations. The plan’s overall return will be compared to and is expected to meet or exceed established
benchmark funds and returns over a three to five year period.

The objectives of the Company’s investment strategies are: (a) the achievement of a reasonable long-term rate of
total return consistent with an emphasis on preservation of capital and purchasing power, (b) stability of annual

B-97

returns through a portfolio that reflects a conservative mix of risk versus return, and (c) reflective of the
Company’s willingness to forgo significantly above-average rewards in order to minimize above-average risks.
These objectives may not be met each year but should be attained over a reasonable period of time.

The following table represents the Company’s pension plan investments measured at fair value as of March 31,
2023 and 2022 and the basis for that measurement:

March 31, 2023

United States Plans

Quoted Price
In Active
Markets
for Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Total Fair
Value
Measurement

Significant
Unobservable
Inputs
(Level 3)

Total Fair
Value
Measurement

International Plans

Quoted Price
In Active
Markets
for Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Asset category:
Cash and cash

equivalents . . . . . . .

$ 1,714

$—

$ 7,775

$7,775

$ —

$—

Equity securities

US(a) . . . . . . . . . .
International(b) . . .
Fixed income(c) . . . . .

8,308
—
3,953

—
—
—

—
—
32,329

—
—
—

—
—
32,329

—
—
—

Total . . . . . . . . . . . . . .

$13,975

$—

$40,104

$7,775

$32,329

$—

March 31, 2022

United States Plans

Quoted Price
In Active
Markets
for Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Total Fair
Value
Measurement

Significant
Unobservable
Inputs
(Level 3)

Total Fair
Value
Measurement

International Plans

Quoted Price
In Active
Markets
for Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Asset category:
Cash and cash

equivalents . . . . . . .

$ 1,576

$—

$ 98

$ —

$—

Equity securities

US(a) . . . . . . . . . .
International(b) . .
Fixed income(c) . . . . .

10,350
—
4,240

—
—
—

—
28,296
13,673

—
—
—

—
28,296
13,673

—
—
—

Total . . . . . . . . . . . . . .

$16,166

$—

$42,067

$ 98

$41,969

$—

The fair values presented above were determined based on valuation techniques to measure fair value as
discussed in Note 1.

(a) US equities include companies that are well diversified by industry sector and equity style (i.e., growth and
value strategies). Active and passive management strategies are employed. Investments are primarily in
large capitalization stocks and, to a lesser extent, mid- and small-cap stocks.

(b) International equities are invested in companies that are traded on exchanges outside the U.S. and are well

diversified by industry sector, country and equity style. Active and passive strategies are employed. The vast
majority of the investments are made in companies in developed markets with a small percentage in
emerging markets.

The Company expects to make cash contributions of approximately $1,717 to its pension plans in fiscal 2024.

B-98

Estimated future benefit payments under the Company’s pension plans are as follows:

2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years 2029-2033 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 3,037
3,203
3,427
3,874
4,634
22,093

Defined Contribution Plan

The Company maintains defined contribution plans primarily in the U.S. and U.K. Eligible employees can
contribute a portion of their pre-tax and / or after-tax income in accordance with plan guidelines and the
Company will make contributions based on the employees’ eligible pay and /or will match a percentage of the
employee contributions up to certain limits. Matching contributions charged to expense for the fiscal years ended
March 31, 2023, 2022 and 2021 were $20,993, $18,402 and $16,460, respectively.

16. Stockholders’ Equity

Preferred Stock and Common Stock

The Company’s certificate of incorporation authorizes the issuance of up to 1,000,000 shares of preferred stock,
par value $0.01 per share (“Preferred Stock”). At March 31, 2023 and 2022, no shares of Preferred Stock were
issued or outstanding. The Board of Directors of the Company has the authority to specify the terms of any
Preferred Stock at the time of issuance.

The following demonstrates the change in the number of shares of common stock outstanding during fiscal years
ended March 31, 2021, 2022 and 2023, respectively:

Shares outstanding as of March 31, 2020 . . . . . . . . . . . . .
Purchase of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . .
Shares issued towards equity-based compensation plans,
net of equity awards surrendered for option price and
taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Shares outstanding as of March 31, 2021 . . . . . . . . . . . . .
Purchase of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . .
Shares issued under equity-based compensation plans, net

of equity awards surrendered for option price and
taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Shares outstanding as of March 31, 2022 . . . . . . . . . . . . .
Purchase of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . .
Shares issued under equity-based compensation plans, net

of equity awards surrendered for option price and
taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42,323,305
—

429,715

42,753,020
(1,996,334)

229,972

40,986,658
(358,365)

272,766

Shares outstanding as of March 31, 2023 . . . . . . . . . . . . .

40,901,059

Treasury Stock

In fiscal 2023, the Company purchased 358,365 shares for $22,907. The Company purchased 1,996,334 shares
for $156,366 in fiscal 2022 but did not purchase any shares in fiscal 2021. At March 31, 2023 and 2022, the
Company held 15,103,554 and 14,762,266 shares as treasury stock, respectively.

B-99

Treasury Stock Reissuance

During fiscal 2023, fiscal 2022 and fiscal 2021, the Company also issued 17,077, 13,858 and 13,465 shares out
of its treasury stock, respectively, valued at $62.55 per share, on a LIFO basis, to participants under the
Company’s Employee Stock Purchase Plan.

Accumulated Other Comprehensive Income (“AOCI”)

The components of AOCI, net of tax, are as follows:

Beginning
Balance

Before
Reclassifications

Amount
Reclassified
from AOCI

Ending
Balance

March 31, 2023
Pension funded status adjustment . . . . . . . . . . . . . . . . $ (12,637) $ 7,872
Net unrealized gain (loss) on derivative

342 $

(4,423)

instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustment(1) . . . . . . . . .

2,963
(133,821)

(2,453)
(46,641)

901
—

1,411
(180,462)

Accumulated other comprehensive loss . . . . . . . . . . . $(143,495) $(41,222)

$ 1,243 $(183,474)

March 31, 2022
Pension funded status adjustment . . . . . . . . . . . . . . . . $ (20,947) $ 7,374
Net unrealized gain (loss) on derivative

936 $ (12,637)

instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustment . . . . . . . . . . .

360
(95,296)

10,063
(38,525)

(7,460)
—

2,963
(133,821)

Accumulated other comprehensive loss . . . . . . . . . . . $(115,883) $(21,088)

$(6,524) $(143,495)

March 31, 2021
Pension funded status adjustment . . . . . . . . . . . . . . . . $ (22,794) $
Net unrealized gain (loss) on derivative

680

$ 1,167 $ (20,947)

instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustment . . . . . . . . . . .

(5,923)
(186,289)

250
90,993

6,033
—

360
(95,296)

Accumulated other comprehensive loss . . . . . . . . . . . $(215,006) $ 91,923

$ 7,200 $(115,883)

(1) Foreign currency translation adjustment for the fiscal year ended March 31, 2023 and March 31, 2022

includes a $19,491 gain (net of taxes of $4,557) and $228 gain (net of taxes $70), respectively, related to the
Company’s $300,000 and $150,000 cross-currency fixed interest rate swap contracts.

B-100

The following table presents reclassifications from AOCI during the twelve months ended March 31, 2023:

Components of AOCI

Derivatives in Cash Flow Hedging

Relationships:

Net unrealized loss on derivative

instruments . . . . . . . . . . . . . . . .
Tax benefit . . . . . . . . . . . . . . . . . . .

Net unrealized loss on derivative

Amounts
Reclassified
from AOCI

Location of (Gain) Loss Recognized
on Income Statement

$ 1,176
(275)

Cost of goods sold

instruments, net of tax . . . . . . . .

901

Derivatives in net investment
hedging relationships:

Net unrealized gain on derivative

instruments . . . . . . . . . . . . . . . .
Tax expense . . . . . . . . . . . . . . . . . .

Net unrealized gain on derivative

$(3,587)
839

Interest expense

instruments, net of tax . . . . . . . .

$(2,748)

Defined benefit pension costs:

Prior service costs and deferrals . .
Tax benefit . . . . . . . . . . . . . . . . . . .

478
(136)

Net periodic benefit cost, net of

tax . . . . . . . . . . . . . . . . . . . . . . .

342

Net periodic benefit cost,
included in other (income)
expense, net - See Note 15

B-101

The following table presents reclassifications from AOCI during the twelve months ended March 31, 2022:

Components of AOCI

Derivatives in Cash Flow Hedging

Relationships:

Net unrealized gain on derivative

instruments . . . . . . . . . . . . . . . .
Tax benefit . . . . . . . . . . . . . . . . . . .

Net unrealized loss on derivative

Amounts
Reclassified
from AOCI

Location of (Gain) Loss Recognized
on Income Statement

$(9,742) Cost of goods sold

2,282

instruments, net of tax . . . . . . . .

$(7,460)

Derivatives in net investment
hedging relationships:

Net unrealized gain on derivative

instruments . . . . . . . . . . . . . . . .
Tax expense . . . . . . . . . . . . . . . . . .

Net unrealized gain on derivative

$(1,181)
276

Interest expense

instruments, net of tax . . . . . . . .

$ (905)

Defined benefit pension costs:

Prior service costs and deferrals . .
Tax benefit . . . . . . . . . . . . . . . . . . .

$ 1,212
(276)

Net periodic benefit cost, net of

tax . . . . . . . . . . . . . . . . . . . . . . .

936

Net periodic benefit cost,
included in other (income)
expense, net - See Note 15

The following table presents reclassifications from AOCI during the twelve months ended March 31, 2021:

Components of AOCI

Derivatives in Cash Flow Hedging

Relationships:

Net unrealized loss on derivative

instruments . . . . . . . . . . . . . . . .
Tax benefit . . . . . . . . . . . . . . . . . . .

Net unrealized loss on derivative

Amounts
Reclassified
from AOCI

Location of (Gain) Loss Recognized
on Income Statement

$ 7,903
(1,870)

Cost of goods sold

instruments, net of tax . . . . . . . .

$ 6,033

Defined benefit pension costs:

Prior service costs and deferrals . .
Tax benefit . . . . . . . . . . . . . . . . . . .

$ 1,529
(362)

Net periodic benefit cost, net of

tax . . . . . . . . . . . . . . . . . . . . . . .

$ 1,167

Net periodic benefit cost,
included in other (income)
expense, net - See Note 15

B-102

17. Stock-Based Compensation

As of March 31, 2023, the Company maintains the 2017 Equity Incentive Plan (“2017 EIP”). The 2017 EIP
reserved 4,173,554 shares of common stock for the grant of various classes of nonqualified stock options,
restricted stock units, market condition-based on total shareholder return (“TSR”) and performance condition-
based share units (“PSU”) and other forms of equity-based compensation. Shares subject to any awards that
expire without being exercised or that are forfeited or settled in cash shall again be available for future grants of
awards under the 2017 EIP. Shares subject to stock option or stock appreciation right awards, that have been
retained by the Company in payment or satisfaction of the exercise price and any applicable tax withholding
obligation of such awards, shall not be available for future grant under the 2017 EIP.

As of March 31, 2023, 2,221,003 shares are available for future grants. The Company’s management equity
incentive plans are intended to provide an incentive to employees and non-employee directors of the Company to
remain in the service of the Company and to increase their interest in the success of the Company in order to
promote the long-term interests of the Company. The plans seek to promote the highest level of performance by
providing an economic interest in the long-term performance of the Company. The Company settles employee
share-based compensation awards with newly issued shares.

Stock Options

During fiscal 2023, the Company granted to management and other key employees 310,140 non-qualified
options that vest ratably over 3 years from the date of grant. Options expire 10 years from the date of grant.

The Company recognized stock-based compensation expense relating to stock options of $6,232, with a related
tax benefit of $848 for fiscal 2023, $6,235 with a related tax benefit of $738 for fiscal 2022 and $3,514 with a
related tax benefit of $368 for fiscal 2021.

For purposes of determining the fair value of stock options granted, the Company used a Black-Scholes Model
with the following assumptions:

2023

2022

2021

2.92% 0.89% 0.39%
0.99% 0.76% 0.93%
6
37.4% 37.3% 37.2%

Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected life (years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B-103

The following table summarizes the Company’s stock option activity in the years indicated:

Options outstanding as of March 31, 2020 . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Options outstanding as of March 31, 2021 . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Options outstanding as of March 31, 2022 . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of
Options

791,582
295,068
(247,975)
(34,854)
(4,320)

799,501
246,222
(42,640)
(27,478)
—

975,605
310,140
(75,180)
(9,575)
(4,679)

Options outstanding as of March 31, 2023 . . . . . .

1,196,311

Options exercisable as of March 31, 2023 . . . . . . .

643,454

Options vested and expected to vest, as of

Weighted-
Average
Remaining
Contract
Term (Years)

7.8

7.5

7.3

6.0

Weighted-
Average
Exercise
Price

$67.55
79.62
66.11
69.20
80.25

$72.31
97.32
65.71
71.26
—

$78.94
75.33
65.22
80.05
85.12

Aggregate
Intrinsic
Value

$ —
—
6,382
290
—

$14,781
—
1,079
520
—

$ 3,605
—
1,561
39
—

$78.83

$12,150

$75.74

$ 8,015

March 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . .

1,178,740

7.3

$78.80

$12,000

The following table summarizes information regarding stock options outstanding as of March 31, 2023:

Range of Exercise Prices

$57.60-$60.00 . . . . . . . . . . . . . . . . . . . . . . . . . .
$60.01-$70.00 . . . . . . . . . . . . . . . . . . . . . . . . . .
$70.01-$80.00 . . . . . . . . . . . . . . . . . . . . . . . . . .
$80.01-$90.00 . . . . . . . . . . . . . . . . . . . . . . . . . .
$90.01-$100.99 . . . . . . . . . . . . . . . . . . . . . . . . .

Weighted-
Average
Remaining
Contractual Life
(Years)

Weighted-
Average
Exercise Price

5.9
1.9
8.1
6.2
8.4

7.3

$57.73
$68.69
$75.33
$83.00
$97.54

$78.83

Number of
Options

160,227
32,500
510,031
256,634
236,919

1,196,311

Restricted Stock Units, Market and Performance-condition based Awards

Non-Employee Directors

In fiscal 2023, the Company granted to non-employee directors 39,792 deferred restricted stock units (“DSU”) at
the fair value of $42.95 per restricted stock unit at the date of grant. In fiscal 2022, such grants amounted to
24,055 restricted stock units at the fair value of $60.29 per restricted stock unit at the date of grant and in fiscal
2021, such grants amounted to 39,726 restricted stock units at the fair value of $39.93 per restricted stock unit at
the date of grant. The awards vest immediately upon the date of grant and are settled in shares of common stock
six months after termination of service as a director.

B-104

The Company also granted to non-employee directors, during fiscal 2023, fiscal 2022 and fiscal 2021, 1,635,
781, and 1,435 restricted stock units, respectively, at fair values of $66.90, $88.27 and $71.53, respectively,
under the deferred compensation plan for non-employee directors.

Employees

In fiscal 2023, the Company granted to management and other key employees 345,449 restricted stock units that
vest ratably over four years from the date of grant, at the fair value of $70.88 per restricted stock unit.

In fiscal 2022, the Company granted to management and other key employees 229,600 restricted stock units that
vest ratably over four years from the date of grant at the fair value of $91.81 per restricted stock unit.

In fiscal 2021, the Company granted to management and other key employees 283,101 restricted stock units that
vest ratably over four years from the date of grant at a fair value of $75.39 per restricted stock unit.

A summary of the changes in restricted stock units, TSRs and PSUs awarded to employees and directors that were outstanding under the
Company’s equity compensation plans during fiscal 2023 is presented below:

Restricted Stock Units (RSU)

Market condition-based
Share Units (TSR)

Performance condition-
based Share Units (PSU)

Number of
RSU

Weighted-
Average
Grant Date
Fair Value

877,765
386,876
9,982
—
(230,427)
(34,413)

$65.48
66.90
64.20
—
73.71
76.08

Number of
TSR

74,983
—
454
—
(29,171)
(14,613)

Weighted-
Average
Grant Date
Fair Value

$71.25
—
66.61
—
85.62
62.02

Number of
PSU

Weighted-
Average
Grant Date

76,873
—
227
—
(21,195)
(55,905)

$55.56
—
55.56
—
68.48
50.67

1,009,783

$65.48

31,653

$62.19

—

$ —

Non-vested awards as of March 31,
2022 . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . .
Stock dividend . . . . . . . . . . . . . . . . .
Performance factor . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . .
Forfeitures . . . . . . . . . . . . . . . . . . . .

Non-vested awards as of March 31,
2023 . . . . . . . . . . . . . . . . . . . . . . .

The Company recognized stock-based compensation expense relating to restricted stock units, TSRs and PSUs of
$20,139, with a related tax benefit of $3,746 for fiscal 2023, $18,054, with a related tax benefit of $3,072 for
fiscal 2022 and $16,303, with a related tax benefit of $2,121 for fiscal 2021.

All Award Plans

As of March 31, 2023, unrecognized compensation expense associated with the non-vested equity awards
outstanding was $53,157 and is expected to be recognized over a weighted-average period of 24 months.

B-105

18. Earnings Per Share

The following table sets forth the reconciliation from basic to diluted weighted-average number of common
shares outstanding and the calculations of net earnings per common share attributable to EnerSys stockholders.

Net earnings attributable to EnerSys

stockholders . . . . . . . . . . . . . . . . . . . . . . . .

175,810

143,911

143,374

Fiscal year ended March 31,
2022

2023

2021

Weighted-average number of common

shares outstanding:

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dilutive effect of:
Common shares from exercise and lapse of
equity awards, net of shares assumed
reacquired . . . . . . . . . . . . . . . . . . . . . . . . .

Diluted weighted-average number of

40,809,235

42,106,337

42,548,449

517,520

677,036

675,954

common shares outstanding . . . . . . . . . . .

41,326,755

42,783,373

43,224,403

Basic earnings per common share

attributable to EnerSys stockholders . . . . .

Diluted earnings per common share

attributable to EnerSys stockholders . . . . .

Anti-dilutive equity awards not included in

diluted weighted-average common
shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.31

4.25

3.42

3.36

3.37

3.32

710,678

951,057

281,483

19. Commitments, Contingencies and Litigation

Litigation and Other Legal Matters

In the ordinary course of business, the Company and its subsidiaries are routinely defendants in or parties to
pending and threatened legal actions and proceedings, including actions brought on behalf of various classes of
claimants. These actions and proceedings are generally based on alleged violations of environmental, anti-
competition, employment, contract and other laws. In some of these actions and proceedings, claims for
substantial monetary damages are asserted against the Company and its subsidiaries. In the ordinary course of
business, the Company and its subsidiaries are also subject to regulatory and governmental examinations,
information gathering requests, inquiries, investigations, and threatened legal actions and proceedings. In
connection with formal and informal inquiries by federal, state, local and foreign agencies, the Company and its
subsidiaries receive numerous requests, subpoenas and orders for documents, testimony and information in
connection with various aspects of their activities.

European Competition Investigations

Certain of the Company’s European subsidiaries had received subpoenas and requests for documents and, in
some cases, interviews from, and have had on-site inspections conducted by the competition authorities of
Belgium, Germany and the Netherlands relating to conduct and anticompetitive practices of certain industrial
battery participants. As of March 31, 2023 and March 31, 2022, the Company did not have a reserve balance
related to these matters.

B-106

The precise scope, timing and time period at issue, as well as the final outcome of the investigations or customer
claims, remain uncertain. Accordingly, the Company’s estimate may change from time to time, and actual losses
could vary.

Environmental Issues

As a result of its operations, the Company is subject to various federal, state and local, as well as international
environmental laws and regulations and is exposed to the costs and risks of registering, handling, processing,
storing, transporting, and disposing of hazardous substances, especially lead and acid. The Company’s operations
are also subject to federal, state, local and international occupational safety and health regulations, including laws
and regulations relating to exposure to lead in the workplace. The Company believes that it has adequate reserves
to satisfy its environmental liabilities.

Collective Bargaining

At March 31, 2023, the Company had approximately 11,350 employees. Of these employees, approximately 26%
were covered by collective bargaining agreements. Employees covered by collective bargaining agreements that
expire in the next twelve months were approximately 9% of the total workforce. The average term of these
agreements is 2 years, with the longest term being 4.0 years. The Company considers its employee relations to be
good and did not experience any significant labor unrest or disruption of production during fiscal 2023.

Lead, Foreign Currency Forward Contracts and Swaps

To stabilize its lead costs and reduce volatility from currency movements, the Company enters into contracts
with financial institutions. The vast majority of such contracts are for a period not extending beyond one year.
The Company also entered into cross currency fixed interest rate swap agreements to hedge its net investments in
foreign operations against future volatility in the exchange rates between U.S. Dollars and Euros and these
agreements mature on December 15, 2027. Please refer to Note 13—Derivative Financial Instruments for more
details.

Other

The Company has various purchase and capital commitments incidental to the ordinary conduct of business. In
the aggregate, such commitments are not at prices in excess of current market.

20. Restructuring, Exit and Other Charges

Restructuring Programs

Fiscal 2023

The Company had committed to various restructuring plans aimed at improving operational efficiencies across its
lines of business. A substantial portion of these plans are complete, with an estimated $445 remaining to be
incurred by the end of fiscal 2023, mainly related to plans started in fiscal 2021 and fiscal 2022. Restructuring
and exit charges for the reportable segments are as follows:

During fiscal 2023, the Company recorded charges related to our fiscal 2022 programs in the Energy Systems
segment to improve operational efficiencies. The charges related to severance payments and amounted to $1,230
to approximately 9 employees in the Energy Systems’ segment.

During fiscal 2022, the Company announced and completed restructuring programs in the Energy Systems
segment to improve operational efficiencies. The charges related to severance payments and amounted to $1,284
to approximately 10 employees in the Energy Systems’ segment.

B-107

During fiscal 2021, the Company announced restructuring programs in the Energy Systems segment relating to
its recent acquisitions of Alpha and NorthStar, as part of its targeted synergy plans. The Company also
announced a restructuring program to improve global operational efficiencies in its Motive Power segment. The
charges, in both segments were primarily cash charges relating to severance payments and amounted to $3,187 to
approximately 47 employees in the Energy Systems segment and $4,012 to approximately 32 employees in the
Motive Power segment. In addition there was a $169 charge related to the Specialty segment.

Restructuring and exit charges for fiscal 2023, 2022 and 2021 by reportable segments are as follows:

Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exit charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fiscal year ended March 31, 2023

Energy
Systems

$1,318
123

Motive
Power

Specialty

Total

327
12,537

42
2,092

$ 1,687
14,752

Restructuring and other exit charges . . . . . . . . . . . . . . . . .

$1,441

$12,864

$2,134

$16,439

Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exit charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fiscal year ended March 31, 2022

Energy
Systems

$2,005
708

Motive
Power

Specialty

Total

$ 2,348
14,711

75
(1,091)

$ 4,428
14,328

Restructuring and other exit charges . . . . . . . . . . . . . . . . .

$2,713

$17,059

$(1,016) $18,756

Fiscal year ended March 31, 2021

Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exit charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Energy
Systems

$3,187
—

Motive
Power

$ 4,012
32,786

Restructuring and other exit charges . . . . . . . . . . . . . . . . .

$3,187

$36,798

A roll-forward of the restructuring reserve is as follows:

Specialty

Total

$169
220

$389

$ 7,368
33,006

$40,374

Other

Total

Employee
Severance

$ 3,325
6,537
(7,550)
283

$ —
831
(831)
—

$ —
$ 2,595
—
4,428
(6,013) —
—

$ —
$ 1,030
—
1,687
(2,224) —
(48) —

$ 3,325
7,368
(8,381)
283

$ 2,595
4,428
(6,013)
20

$ 1,030
1,687
(2,224)
(48)

Balance at March 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Costs incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency impact and other . . . . . . . . . . . . . . . . .

Balance at March 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Costs incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency impact and other . . . . . . . . . . . . . . . . .

Balance at March 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Costs incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency impact and other . . . . . . . . . . . . . . . . .

Balance at March 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . .

445

$ —

445

B-108

Exit Charges

Fiscal 2023 Programs

Sylmar

In November 2022, the Company committed to a plan to close its facility in Sylmar, California, which
manufactures specialty lithium batteries for aerospace and medical applications. Management determined to
close the site upon the expiration of its lease on the property and to redirect production through consolidation into
existing locations. The Company currently estimates total charges in the exit to amount to $5,528. Cash charges
are estimated to total $4,413 primarily relating to severance and other costs to leave the site. Non-cash charges
are estimated to be $1,115 relating to fixed assets, inventory, and contract assets. The plan is expected to be
completed in fiscal 2024.

During fiscal 2023, the Company recorded cash charges of $1,682 related primarily related to severance costs
and non-cash charges totaling $417 primarily relating to contract assets.

Ooltewah

On June 29, 2022, the Company committed to a plan to close its facility in Ooltewah, Tennessee, which produced
flooded motive power batteries for electric forklifts. Management determined that future demand for traditional
motive power flooded cells will decrease as customers transition to maintenance free product solutions in lithium
and TPPL. The Company currently estimates that the total charges for these actions will amount to
approximately $18,500. Cash charges for employee severance related payments, cleanup related to the facility,
contractual releases and legal expenses are estimated to be $9,200 and non-cash charges from inventory and fixed
asset write-offs are estimated to be $9,300. These actions will result in the reduction of approximately
165 employees. The plan is expected to be completed in calendar 2023.

During fiscal 2023, the Company recorded cash charges relating to severance and manufacturing variances of
$2,735 and non-cash charges of $7,261 relating to fixed asset write-offs. The Company also recorded a non-cash
write off relating to inventories of $1,613, which was reported in cost of goods sold.

Fiscal 2022 Programs

Russia

In February 2022, as a result of the Russia-Ukraine conflict, economic sanctions were imposed on Russian
individuals and entities, including financial institutions, by countries around the world, including the U.S. and the
European Union. On March 3, 2022, the Company announced that it was indefinitely suspending its operations in
Russia in order to comply with the sanctions. As a result of this decision, the Company wrote off net assets of
$3,999 relating to its Russian subsidiary. The Company also incurred cash charges of $1,284 relating to
severance and exiting lease obligations. During fiscal 2023, the Company sold inventory previously written off
resulting in the reversal of $932 in cost of goods sold and reversal of $739 of cash charges primarily relating to
lease obligations.

Zamudio, Spain

During fiscal 2022, the Company closed a minor assembling plant in Zamudio, Spain and sold the same for
$1,779. A net gain of $740 was recorded as a credit to exit charges in the Consolidated Statements of Income.

Fiscal 2021 Programs

Hagen, Germany

In fiscal 2021, the Company’s Board of Directors approved a plan to substantially close all of its facility in
Hagen, Germany, which produces flooded motive power batteries for forklifts. Management determined that

B-109

future demand for the motive power batteries produced at this facility was not sufficient, given the conversion
from flooded to maintenance free batteries by customers, the existing number of competitors in the market, as
well as the near term decline in demand and increased uncertainty from the pandemic. The Company plans to
retain the facility with limited sales, service and administrative functions along with related personnel for the
foreseeable future.

The Company currently estimates that the total charges for these actions will amount to approximately $60,000,
the majority of which has been recorded as of March 31, 2022. Cash charges for employee severance related
payments, cleanup related to the facility, contractual releases and legal expenses are estimated to be $40,000 and
non-cash charges from inventory and equipment write-offs are estimated to be $20,000. These actions resulted in
the reduction of approximately 200 employees.

During fiscal 2021, the Company recorded cash charges relating to severance of $23,331 and non-cash charges of
$7,946 primarily relating to fixed asset write-offs.

During fiscal 2022, the Company recorded cash charges primarily relating to severance of $8,069 and non-cash
charges of $3,522 primarily relating to fixed asset write-offs. The Company also recorded a non-cash write off
relating to inventories of $960, which was reported in cost of goods sold.

During fiscal 2023, the Company recorded cash charges of $2,207 relating to primarily to site cleanup and $562
of non-cash charges relating to accelerated depreciation of fixed assets.

Vijayawada, India

During fiscal 2021, the Company committed to a plan to close its facility in Vijayawada, India to align with its
strategic vision for the new line of business structure and footprint and recorded exit charges of $1,509, primarily
relating to asset write-offs. In fiscal 2022, the Company reclassified property, plant and equipment with a
carrying value of $4,573 to assets held for sale on the Consolidated Balance Sheet and recognized an impairment
loss of $2,973 under the caption Loss on assets held for sale on its consolidated statement of income, by writing
down the carrying value of these assets to their estimated fair value of $1,600, based on their expected proceeds,
less costs to sell. The Company also recorded a non-cash write off relating to inventories of $820, which was
reported in cost of goods sold.

Targovishte, Bulgaria

During fiscal 2019, the Company committed to a plan to close its facility in Targovishte, Bulgaria, which
produced diesel-electric submarine batteries. Management determined that the future demand for batteries of
diesel-electric submarines was not sufficient given the number of competitors in the market. Of the estimated
total charges of $26,000 for this plan, the Company had recorded charges amounting to $20,242 in fiscal 2019,
relating to severance and inventory and fixed asset write-offs and an additional $5,123 relating to cash and
non-cash charges during fiscal 2020. During fiscal 2021, in keeping with its strategy of exiting the manufacture
of batteries for diesel-electric submarines, the Company completed further actions which resulted in $220
relating to cash and non-cash charges. During fiscal 2022, the Company sold this facility for $1,489. A net gain
of $1,208 was recorded as a credit to exit charges in the Consolidated Statements of Income.

Fiscal 2020 Programs

Richmond, Kentucky Plant Fire

During fiscal 2021, the Company settled its claims with its insurance carrier relating to the fire that broke out in
the battery formation area of the Company’s Richmond, Kentucky motive power production facility in fiscal
2020. The total claims, for both property and business interruption of $46,117 were received through March 31,
2021.

B-110

The final settlement of insurance recoveries and finalization of costs related to the replacement of property, plant
and equipment, resulted in a net gain of $4,397, which was recorded as a reduction to operating expenses in the
Consolidated Statements of Income.

The details of charges and recoveries for fiscal 2021 and fiscal 2020 are as follows:

In fiscal 2020, the Company recorded as a receivable, $17,037, consisting of write-offs for damages caused to its
fixed assets and inventories, as well as for cleanup, asset replacement and other ancillary activities directly
associated with the fire and received $12,000 related to its initial claims.

During fiscal 2021, the Company recorded an additional $16,580 as a receivable for cleanup and received
$21,617 from the insurance carrier.

In addition to the property damage claim, the Company received $12,500 in business interruption claims, of
which $5,000 was recorded in fiscal 2020 and $7,500 in fiscal 2021, and was credited to cost of goods sold, in
the respective periods.

21. Warranty

The Company provides for estimated product warranty expenses when products are sold, with related liabilities
included within accrued expenses and other liabilities. As warranty estimates are forecasts that are based on the
best available information, primarily historical claims experience, costs of claims may ultimately differ from
amounts provided. An analysis of changes in the liability for product warranties is as follows:

Fiscal year ended March 31,

2023

2022

2021

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . .
Current year provisions . . . . . . . . . . . . . . . . . . . . . . . . .
Costs incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustment . . . . . . . . . . . .

$ 54,978
29,132
(25,251)
(2,229)

$ 58,962
17,645
(20,648)
(981)

$ 63,525
27,645
(34,346)
2,138

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 56,630

$ 54,978

$ 58,962

22. Other (Income) Expense, Net

Other (income) expense, net consists of the following:

Foreign exchange transaction (gains) losses . . . . . . . . . . . . . .
Non-service components of pension expense . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 671
315
7,207

$(7,169) $6,696
1,279
(171)

430
1,274

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$8,193

$(5,465) $7,804

Fiscal year ended March 31,

2023

2022

2021

23. Business Segments

B-111

performance as these are managed and viewed on a consolidated basis. The Company identifies the following as
its three operating segments, based on lines of business:

•

The operating segments also represent the Company’s reportable segments under ASC 280, Segment Reporting.

B-112

Summarized financial information related to the Company’s reportable segments at March 31, 2023, 2022 and
2021 and for each of the fiscal years then ended is shown below.

Fiscal year ended March 31,

2023

2022

2021

Net sales by segment to unaffiliated customers
Energy Systems . . . . . . . . . . . . . . . . . . . . . . . . . .
Motive Power . . . . . . . . . . . . . . . . . . . . . . . . . . .
Specialty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,738,195
1,451,244
519,140

$1,536,673
1,361,254
459,392

$1,380,278
1,163,710
433,944

Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . .

$3,708,579

$3,357,319

$2,977,932

Operating earnings by segment
Energy Systems . . . . . . . . . . . . . . . . . . . . . . . . . .
Motive Power . . . . . . . . . . . . . . . . . . . . . . . . . . .
Specialty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Production tax credits from IRA 45X . . . . . . . . .
Inventory step up to fair value relating to
acquisitions and exit activities - Energy
Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory adjustment relating to exit activities -
Motive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Inventory step up to fair value relating to

62,305
178,904
37,469
17,283

18,531
169,740
43,491
—

67,060
143,541
46,148
—

211

(186)

(892)

(2,418)

—

acquisitions - Specialty . . . . . . . . . . . . . . . . . .

—

Restructuring and other exit charges - Energy

Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,441)

(2,713)

(3,187)

Restructuring and other exit charges - Motive

Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(12,864)

(17,059)

(36,798)

Restructuring and other exit charges -

Specialty . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of goodwill(3) . . . . . . . . . . . . . . . . . .
Impairment of indefinite-lived intangibles -

Energy Systems . . . . . . . . . . . . . . . . . . . . . . . .

Impairment of indefinite-lived intangibles -

Motive Power . . . . . . . . . . . . . . . . . . . . . . . . .

Impairment of indefinite-lived intangibles -

(2,134)
—

(100)

—

1,016
—

(501)

(677)

(389)
—

—

Specialty . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on assets held for sale - Motive Power . . . .
Total operating earnings(2) . . . . . . . . . . . . . . . . . .

(380)
—
$ 278,361

—
(2,973)
$ 206,251

—
—
$ 216,375

Capital Expenditures
Energy Systems . . . . . . . . . . . . . . . . . . . . . . . . . .
Motive Power . . . . . . . . . . . . . . . . . . . . . . . . . . .
Specialty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Depreciation and Amortization
Energy Systems . . . . . . . . . . . . . . . . . . . . . . . . . .
Motive Power . . . . . . . . . . . . . . . . . . . . . . . . . . .
Specialty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37,249
16,373
35,150

88,772

52,034
22,404
16,715

33,614
13,887
26,540

74,041

54,580
24,918
16,380

34,826
14,154
21,040

70,020

57,864
21,706
14,512

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

91,153

95,878

94,082

B-113

(1) Reportable segments do not record inter-segment revenues and accordingly there are none to report.
(2) The Company does not allocate interest expense or other (income) expense, net, to the reportable segments.

The Company’s property, plant and equipment by reportable segments as of March 31, 2023 and 2022 are as
follows:

Property, plant and equipment, net
Energy Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Motive Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Specialty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

March 31,
2023

March 31,
2022

$199,414
142,301
171,568

$216,853
145,431
140,980

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$513,283

$503,264

The Company markets its products and services in over 100 countries. Sales are attributed to countries based on
the location of sales order approval and acceptance. Sales to customers in the United States were 63.4%, 60.7%
and 59.8% for fiscal years ended March 31, 2023, 2022 and 2021, respectively. Property, plant and equipment,
net, attributable to the United States as of March 31, 2023 and 2022, were $336,970 and $320,208, respectively.
No single country, outside the United States, accounted for more than 10% of the consolidated net sales or net
property, plant and equipment and, therefore, was deemed not material for separate disclosure.

24. Subsequent Events

On May 24, 2023, the Board of Directors approved a quarterly cash dividend of $0.175 per share of common
stock to be paid on June 30, 2023, to stockholders of record as of June 16, 2023.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s
Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure
controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such
evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the
end of such period, the Company’s disclosure controls and procedures are effective.

(b) Internal Control Over Financial Reporting. There have not been any changes in the Company’s internal
control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange
Act) during the fourth quarter of the fiscal year to which this report relates that have materially affected, or are
reasonably likely to materially affect, the Company’s internal control over financial reporting.

The report called for by Item 308(a) of Regulation S-K is included herein as “Management Report on Internal
Control Over Financial Reporting.”

Management Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial
reporting. With the participation of the Chief Executive Officer and Chief Financial Officer, our management

B-114

conducted an evaluation of the effectiveness of our internal control over financial reporting based on the
framework and criteria established in Internal Control—Integrated Framework, issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 framework).

Based on this evaluation, our management has concluded that our internal control over financial reporting was
effective as of March 31, 2023.

The attestation report called for by Item 308(b) of Registration S-K is included herein as “Report of Independent
Registered Public Accounting Firm,” which appears in Item 8 in this Annual Report on Form 10-K.

/s/ David M. Shaffer
David M. Shaffer
Chief Executive Officer

/s/ Andrea J. Funk
Andrea J. Funk
Chief Financial Officer

ITEM 9B. OTHER INFORMATION

Not applicable.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

B-115

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item is incorporated by reference from the sections entitled “Board of
Directors,” “Executive Officers,” “Section 16(a) Beneficial Ownership Reporting Compliance,” “Corporate
Governance—Independence of Directors,” “Corporate Governance—Process for Selection of Director Nominee
Candidates,” “Audit Committee Report,” and “Certain Relationships and Related Transactions—Employment of
Related Parties” of the Company’s definitive proxy statement for its 2023 Annual Meeting of Stockholders
(the “Proxy Statement”) to be filed no later than 120 days after the fiscal year end.

We have adopted a Code of Business Conduct and Ethics that applies to all of our officers, directors and
employees (including our Chief Executive Officer, Chief Financial Officer, and Corporate Controller) and have
posted the Code on our website at www.enersys.com, and a copy is available in print to any stockholder who
requires a copy. If we waive any provision of the Code applicable to any director, our Chief Executive Officer,
Chief Financial Officer, and Corporate Controller, such waiver will be promptly disclosed to the Company’s
stockholders through the Company’s website.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference from the sections entitled “Corporate
Governance—Compensation Committee” and “Executive Compensation” of the Proxy Statement”) to be filed no
later than 120 days after the fiscal year end.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT RELATED

STOCKHOLDER MATTERS

The information required by this item is incorporated by reference from the section entitled “Security Ownership
of Certain Beneficial Owners and Management” of the Proxy Statement to be filed no later than 120 days after
the fiscal year end.

Equity Compensation Plan Information

Number of
securities to be
issued upon
exercise of
outstanding
options,
warrants
and rights
(a)

Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)

Number of
securities
remaining available
for future issuance
under equity
compensation plans
(excluding
securities reflected
in column (a))
(c)

2,243,675(1)

$78.80(2)

2,221,003

Plan Category

Equity compensation plans approved
by security holders . . . . . . . . . . . .

Equity compensation plans not

approved by security holders . . . .

—

Total . . . . . . . . . . . . . . . . . . . . . . . . .

2,243,675

—

$78.80

—

2,221,003

(1) Assumes a 200% payout on market and performance condition-based awards.
(2) Awards of restricted stock units, market and performance condition-based awards and deferred stock units
held in both the EnerSys Voluntary Deferred Compensation Plan for Non-Employee Directors and the
EnerSys Voluntary Deferred Compensation Plan for Executives were not included in calculating the
weighted-average exercise price as they will be settled in shares of common stock for no consideration.

B-116

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item is incorporated by reference from the sections entitled “Corporate
Governance,” and “Certain Relationships and Related Transactions” of the Proxy Statement to be filed no later
than 120 days after the fiscal year end.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this item is incorporated by reference from the section entitled “Audit Committee
Report” of the Proxy Statement to be filed no later than 120 days after the fiscal year end.

B-117

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this Report:

(1) Consolidated Financial Statements

See Index to Consolidated Financial Statements.

All other schedules are omitted because they are not applicable or the required information is contained in the
consolidated financial statements or notes thereto.

(b) The following documents are filed herewith as exhibits:

Exhibit Number
3.1

Description of Exhibit
Fifth Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.2 to
Amendment No. 3 to EnerSys’ Registration Statement on Form S-1 (File No. 001-32253) filed
on February 6, 2013).

3.2

4.1

4.2

4.3

4.4

10.1

10.2

10.3

10.4

Fourth Amended and Restated Bylaws (incorporated by reference to Exhibits 3.1 to EnerSys’
Current Report on Form 8-K (File No. 001-32253) filed on November 10, 2021).

Indenture, dated as of April 23, 2015, among EnerSys, the Guarantors party thereto and MUFG
Union Bank, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to EnerSys’ Current
Report on Form 8-K (File No. 00-32253) filed on April 23, 2015).

Fourth Supplemental Indenture, dated as of December 11, 2019, among EnerSys, the
Guarantors party thereto and MUFG Union Bank, N.A., as Trustee (incorporated by reference
to Exhibit 4.1 to EnerSys’ Current Report on Form 8-K (File No. 00-32253) filed on
December 11, 2019).

Form of 4.375% Senior Note due 2027 (incorporated by reference to Exhibit 4.2 to EnerSys’
Current Report on Form 8-K (File No. 00-32253) filed on December 11, 2019).

Description of Capital Stock (filed herewith).

Credit Agreement, dated as of August 4, 2017, among EnerSys, certain other borrowers and
guarantors identified therein, Bank of America, N.A., as administrative agent, swing line lender
and Letters of Credit issuer, and other lenders party thereto (incorporated herein by reference to
Exhibit 10.4 of EnerSys’ Quarterly Report on Form 10-Q for the quarter ended July 2, 2017
(File No. 001-32253) filed with the SEC on August 9, 2017).

Stock Subscription Agreement, dated March 22, 2002, among EnerSys Holdings Inc., Morgan
Stanley Dean Witter Capital Partners IV, L.P., Morgan Stanley Dean Witter Capital Investors
IV, L.P., MSDW IV 892 Investors, L.P., Morgan Stanley Global Emerging Markets Private
Investment Fund, L.P. and Morgan Stanley Global Emerging Markets Private Investors, L.P.
(incorporated by reference to Exhibit 10.27 to Amendment No. 3 to EnerSys’ Registration
Statement on Form S-1 (File No. 333-115553) filed on July 13, 2004).

EnerSys 2013 Management Incentive Plan (incorporated by reference to Appendix A to
EnerSys’ Definitive Proxy Statement on Schedule 14A (File No. 001-32253) filed on June 27,
2013).

Second Amended and Restated EnerSys 2010 Equity Incentive Plan (incorporated by reference
to Appendix A to EnerSys’ Definitive Proxy Statement on Schedule 14A (File No. 001-32253)
filed on June 23, 2016).

B-118

Exhibit Number
10.5

Description of Exhibit
EnerSys Voluntary Deferred Compensation Plan for Executives as amended August 5, 2010,
and May 26, 2011 (incorporated by reference to Exhibit 10.23 to EnerSys’ Annual Report on
Form 10-K (File No. 001-32253) filed on May 31, 2011).

10.6

10.7

10.8

10.9

10.10

10.11

10.12

10.13

10.14

10.15

10.16

10.17

10.18

EnerSys 2018 Employee Stock Purchase Plan (incorporated by reference to Appendix A to
EnerSys’ Definitive Proxy Statement on Schedule 14A (File No. 001-32253) filed on June 21,
2018).

Form of Deferred Stock Unit Agreement—Non-Employee Directors—2010 Equity Incentive
Plan (incorporated by reference to Exhibit 10.35 to EnerSys’ Annual Report on Form 10-K
(File No. 001-32253) filed on May 31, 2011).

Form of Severance Agreement, (incorporated by reference to Exhibit 10.37 to EnerSys’ Annual
Report on Form 10-K (File No. 001-32253) filed on May 28, 2013).

Form of Stock Option Agreement—Employees—2010 Equity Incentive Plan (incorporated by
reference to Exhibit 10.32 to EnerSys’ Annual Report on Form 10-K for the year ended
March 31, 2014 (File No. 001-32253) filed on May 28, 2014).

Form of Indemnification Agreement—Directors and Officers (incorporated by reference to
Exhibit 10.37 to EnerSys’ Annual Report on Form 10-K for the year ended March 31, 2016
(File No. 001-32253) filed on May 28, 2014).

Form of Indemnification Agreement—Directors and Officers (incorporated by reference to
Exhibit 10.26 to EnerSys’ Annual Report on Form 10-K for the year ended March 31, 2017
(File No. 001-32253) filed on May 30, 2017).

Form of Stock Option Agreement—Employees—2010 Equity Incentive Plan (incorporated by
reference to Exhibit 10.42 to EnerSys’ Annual Report on Form 10-K for the year ended
March 31, 2015 (File No. 001-32253) filed on May 27, 2015).

Form of Stock Option Agreement—Employees—2010 Equity Incentive Plan (incorporated by
reference to Exhibit 10.46 to EnerSys’ Annual Report on Form 10-K for the year ended
March 31, 2016 (File No. 001-32253) filed on May 31, 2016).

Form of letter agreement, dated June 7, 2017, between EnerSys and David M. Shaffer
(incorporated herein by reference to Exhibit 10.1 of EnerSys’ Current Report on Form 8-K
(File No. 001-32253) filed with the SEC on June 12, 2017).

Employment Offer Letter, dated October 20, 2014, of EnerSys Delaware Inc. to David M.
Shaffer (incorporated by reference to Exhibit 10.5 to EnerSys’ Quarterly Report on Form 10-Q
for the period ended September 28, 2014 (File No. 001-32253) filed on November 5, 2014).

Form of letter agreement, dated June 7, 2017, between EnerSys and an executive officer
(incorporated herein by reference to Exhibit 10.1 of EnerSys’ Current Report on Form 8-K
(File No. 001-32253) filed with the SEC on June 12, 2017).

Form of Deferred Stock Unit Agreement—Non-Employee Directors—2017 Equity Incentive
Plan (incorporated herein by reference to Exhibit 10.5 of EnerSys’ Quarterly Report on
Form 10-Q for the quarter ended July 2, 2017 (File No. 001-32253) filed with the SEC on
August 9, 2017).

Second Amendment to Credit Agreement, dated as of July 15, 2021, among EnerSys, certain of
its subsidiaries party thereto, Bank of America, N.A., as administrative agent, swing line lender
and l/c issuer, and the other lenders party thereto (incorporated by reference to Exhibit 10.1 of
EnerSys’ Current Report on Form 8-K (File No. 001-32253) filed with the SEC on July 15,
2021).

B-119

Exhibit Number
10.19

Description of Exhibit
Third Amendment to Credit Agreement, dated as of September 8, 2022, among the Company,
certain of its subsidiaries party thereto, Bank of America, N.A., as administrative agent, and the
other lenders party thereto (incorporation by reference to Exhibit 10.1 to the Registrant’s
Current Report on Form 8-K (File No. 001-32253) filed on September 8, 2022)

10.20

10.21

10.22

10.23

10.24

10.25

10.26

10.27

10.28

10.29

10.30

Fourth Amendment to Credit Agreement, dated as of March 22, 2023, among the Company,
certain of its subsidiaries party thereto, Bank of America, N.A., as administrative agent, and the
other lenders party thereto (filed herewith)

Form of Severance Letter Agreement, dated April 1, 2019, between EnerSys and Shawn M.
O’Connell (incorporated by reference to Exhibit 10.28 of EnerSys’ Annual Report on
Form 10-K for the fiscal year ended March 31, 2020 (File No. 001-32253) filed with the SEC
on June 1, 2020).

Employment Agreement, dated as of October 6, 2008, between Alpha Technologies, Inc. and
Andrew Zogby (incorporated by reference to Exhibit 10.29 of EnerSys’ Annual Report on
Form 10-K for the fiscal year ended March 31, 2020 (File No. 001-32253) filed with the SEC
on June 1, 2020).

Employment Agreement, dated as of September 13, 2012, between Alpha Technologies, Inc.
and Andrew Zogby (incorporated by reference to Exhibit 10.30 of EnerSys’ Annual Report on
Form 10-K for the fiscal year ended March 31, 2020 (File No. 001-32253) filed with the SEC
on June 1, 2020).

Employment Agreement Extension, effective June 27, 2017, between Alpha Technologies, Inc.
and Andrew Zogby (incorporated by reference to Exhibit 10.31 of EnerSys’ Annual Report on
Form 10-K for the fiscal year ended March 31, 2020 (File No. 001-32253) filed with the SEC
on June 1, 2020).

Assignment of Employment Agreement, dated December 6, 2018, between Alpha
Technologies, Inc. and Alpha Technologies Services, Inc. regarding Employment Agreement,
dated as of October 6, 2008, between Alpha Technologies, Inc. and Andrew Zogby and
subsequent extensions (incorporated by reference to Exhibit 10.32 of EnerSys’ Annual Report
on Form 10-K for the fiscal year ended March 31, 2020 (File No. 001-32253) filed with the
SEC on June 1, 2020).

Form of Severance Letter Agreement, December 28, 2022, between EnerSys and Andrew
Zogby (incorporated by reference to Exhibit 10.1 of EnerSys’ Current Report on Form 8-K
(File No. 001-32253) filed with the SEC on December 28, 2022).

Form of Severance Letter Agreement, dated April 1, 2021, between EnerSys and Andrea J.
Funk (incorporated by reference to Exhibit 10.1 of EnerSys’ Current Report on Form 8-K (File
No. 001-32253) filed with the SEC on April 1, 2022).

Amended and Restated 2017 Equity Incentive Plan (incorporated herein by reference to
Exhibit 10.32 of EnerSys’ Annual Report on Form 10-K for the fiscal year ended March 31,
2021 (File No. 001-32253) filed on May 26, 2021).

Form of Deferred Stock Unit Agreement—Non-Employee Directors—Amended and Restated
2017 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.32 of EnerSys’
Annual Report on Form 10-K for the fiscal year ended March 31, 2021 (File No. 001-32253)
filed on May 26, 2021).

Form of Stock Option Agreement—Employees—Amended and Restated 2017 Equity Incentive
Plan (incorporated herein by reference to Exhibit 10.32 of EnerSys’ Annual Report on Form 10-K
for the fiscal year ended March 31, 2021 (File No. 001-32253) filed on May 26, 2021).

B-120

Exhibit Number
10.31

Description of Exhibit
Form of Restricted Stock Unit Agreement—Employees—Amended and Restated 2017 Equity
Incentive Plan (incorporated herein by reference to Exhibit 10.32 of EnerSys’ Annual Report
on Form 10-K for the fiscal year ended March 31, 2021 (File No. 001-32253) filed on May 26,
2021).

21.1

23.1

31.1

31.2

32.1

Subsidiaries of the Registrant (filed herewith).

Consent of Ernst & Young LLP (filed herewith).

Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) Under the
Securities Exchange Act of 1934 (filed herewith).

Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) Under the
Securities Exchange Act of 1934 (filed herewith).

Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished
herewith).

101.INS

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because its XBRL tags are embedded within the inline XBRL document.

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XBRL Taxonomy Extension Calculation Linkbase Document

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XBRL Taxonomy Extension Definition Document

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XBRL Taxonomy Extension Label Document

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XBRL Taxonomy Extension Presentation Document

B-121

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

May 24, 2023

ENERSYS

/s/ DAVID M. SHAFFER

David M. Shaffer
Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose name appears below hereby appoints
David M. Shaffer and Andrea J. Funk and each of them, as his true and lawful agent, with full power of
substitution and resubstitution, for him and in his, place or stead, in any and all capacities, to execute any and all
amendments to the within annual report, and to file the same, together with all exhibits thereto, with the
Securities and Exchange Commission, granting unto each said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming
all that each said attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this annual report has been
signed below by the following persons in the capacities and on the dates indicated:

Name

Title

Date

/s/ DAVID M. SHAFFER

Chief Executive Officer

May 24, 2023

David M. Shaffer

/s/ ANDREA J. FUNK

Andrea J. Funk

Chief Financial Officer
(Principal Accounting Officer)

May 24, 2023

/s/ CAROLINE CHAN

Director

May 24, 2023

Caroline Chan

/s/ HWAN-YOON F. CHUNG
Hwan-yoon F. Chung

Director

May 24, 2023

/s/ STEVEN M. FLUDDER

Director

May 24, 2023

Steven M. Fludder

/s/ HOWARD I. HOFFEN

Director

May 24, 2023

Howard I. Hoffen

/s/ ARTHUR T. KATSAROS

Director

May 24, 2023

Arthur T. Katsaros

/s/ GENERAL ROBERT MAGNUS, USMC (RETIRED)
General Robert Magnus, USMC (Retired)

Director

May 24, 2023

B-122

Name
/s/ TAMARA MORYTKO

Tamara Morytko

/s/ PAUL J. TUFANO
Paul J. Tufano

Title

Director

Date
May 24, 2023

Director

May 24, 2023

/s/ RONALD P. VARGO

Director

May 24, 2023

Ronald P. Vargo

/s/ RUDOLPH WYNTER

Director

May 24, 2023

Rudolph Wynter

B-123

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