Exhibit 10.3


 


EMPLOYMENT AND COMPENSATION
AGREEMENT


 


THIS EMPLOYMENT AGREEMENT ("Agreement")
made and entered into as of the Effective Date (defined below), by and between ESCO Technologies Inc. ("ESCO"), and Bryan Sayler
("Executive"). Hereinafter ESCO and Executive may be referred to individually as "Party" and collectively as "Parties".


 


RECITALS:


 


WHEREAS, Executive is ESCO’s
newly promoted President & Chief Executive Officer (CEO); and


 


WHEREAS, ESCO recognizes and appreciates
the value and benefit of promoting and retaining the services of Executive and desires to secure the commitment of Executive to the employment
terms herein set forth; and


 


WHEREAS, ESCO is willing to make
the commitments to Executive as hereinafter set forth, in recognition of such value, as well as to secure appropriate agreements and covenants
from Executive as provided herein; and


 


WHEREAS, Executive desires to
be so employed for such period and to secure the compensation arrangements hereinafter provided, and is therefore willing to make the
agreements and covenants on his part contained herein.


 


NOW, THEREFORE, in consideration of
the premises and of the mutual covenants and agreements hereinafter set forth, the Parties agree as follows:


 


		1.	Definitions. The following terms, as used herein, shall have the following meanings:



 


"Annual Performance Based Bonus"
shall mean an annual bonus under ESCO's Performance Compensation Plan adopted August 2, 1993, amended and restated February 4, 2019 and
any subsequent amendments following the date of this Agreement (the "PCP") computed utilizing the Executive's PCP Bonus Target
and subject to the terms of such PCP plan.


 


"Bonus Target" shall mean
$715,000 or such increased amount as may be approved by the Human Resources Committee of the ESCO Board of Directors.


 


"Effective Date" shall mean January 1, 2023 or
such later date as the Executive begins serving as the President & CEO.


 


"Employment
Period" or "Term" shall mean, the period of time starting on the Effective Date and, unless terminated pursuant to
Sections 3, 4 or 5, ending on the last day of the 24th month after the Effective Date. At the end of such initial
twenty-four month period this Agreement shall automatically renew for subsequent one-year periods unless the Company provides notice
at least six months in advance of such renewal period start date that the Agreement will not be renewed or unless at any time this
Agreement is terminated pursuant to Sections 3, 4 or 5. Any such one year renewals shall be considered part of the Employment
Period. Executive's employment shall continue, after the Employment Period, unless terminated as outlined in Sections 3, 4 or 5, as
an at-will employee.


 






     


     


    

 


"Good Cause Event" shall mean:


 


a)     
Executive's willful and continued failure to substantially perform his duties (other than as a result of incapacity due
to physical or mental condition), after a written notice by an ESCO Representative (defined below) identifying the manner in which he
or she believes Executive has not effectively performed his duties and after the Executive's subsequent failure to cure the identified
problem(s) in the time set forth in the notice,


 


b)       
Executive's commission of acts which would constitute fraud, misappropriation, embezzlement, theft, dishonesty, breach of
fiduciary duty involving personal profit or willful and knowing violation of any laws, rule, regulation (other than traffic violations
or similar minor offenses), "Misconduct" as defined in the PCP plan, conduct involving a third party which impairs the reputation
of, or harms, ESCO, its respective subsidiaries or its respective affiliates; or violation of ESCO's policies (including the ESCO's Code
of Business Conduct and Ethics, the Insider Trading Policy and the Insider Trading Policy for Senior Company Officials),


 


c)        
Executive's failure to act professionally and with due consideration and propriety in his personal and professional dealings
with customers, vendors, employees or other individuals with whom Executive comes into contact in his capacity as an employee of ESCO
or Executive's engagement in willful conduct which Executive knows or has reason to know is materially detrimental to the business and
operations of ESCO, including without limitation, any action or omission which (a) causes injury or damage to ESCO or (b) directly or
indirectly causes ESCO to be named a party in any litigation or administrative proceeding with regard to such acts or omissions, or


 


d)     
Executive's material breach of any provision of this Agreement including without limitation, any obligation under Section
9.


 


For purposes of the definition of
a "Good Cause Event", an act or failure to act shall not be considered "willful" if done or omitted to be done in
good faith and with a reasonable belief that the act or omission was in the best interest of ESCO.


 


"Permanent Disability"
shall mean disability or incapacity which extends for the period of time which is the elimination period for ESCO's LTD plan(s), not to
exceed three months and which renders Executive in the reasonable judgment of an ESCO Representative substantially unable to carry out
the duties of Executive as currently performed.


 


"Severance
Effective Date" shall mean the 8th day after the Severance Agreement & Release is executed and the Executive has not
revoked such Severance Agreement & Release during the 7 day Revocation Period.


 


"ESCO Representative" shall
mean any two (2) Directors of ESCO.


 






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"Revocation Period". Upon
a termination as outlined in Section 4 or Section 5, if the Executive executes the then current Severance Agreement and Release (Severance
Agreement) he will be provided with a 7 day timeframe during which he can rescind his execution of the Severance Agreement (Revocation
Period) by providing the ESCO Representative with a written notice of such revocation. If the execution of the Severance Agreement is
not revoked during this Revocation Period, it will be effective on the 8th day, "Severance Effective Date," and payments
will be made in accordance with this Agreement.


 


		2.	Terms of Employment.



 


		(a)	Location and Duties.



 


		1.	Beginning on the Effective Date ESCO will employ Executive in its employment for the Employment Period.
During the Employment Period, Executive's services shall be required to be performed at the corporate headquarters of ESCO located in
Ladue, Missouri, any subsequent corporate headquarters of ESCO less than 25 miles from such Ladue Missouri location or at any location
required by ESCO and agreed to by the Executive.



 


		11.	During the Employment Period, and excluding any periods of vacation and sick leave to which Executive
is entitled, Executive will be expected to devote reasonable attention and time during normal business hours to the business and affairs
of ESCO, to discharge the responsibilities assigned to the Executive, and to use the Executive's reasonable best efforts to perform faithfully
and efficiently such responsibilities.



 


		111.	The Executive shall perform such duties normally associated with the Office(s) of ESCO's President &
CEO and such other duties as assigned to him by ESCO’s Board of Directors.



 


		(b)	Compensation. During the Employment Period, in full consideration for said services and subject
to the due performance thereof, ESCO will pay Executive, and Executive agrees to accept:



 


		1.	A bi-weekly salary of $27,500.00 which shall be paid in accordance with ESCO's normal method of payment.
Such bi-weekly salary may be increased from time to time by the Human Resources & Compensation Committee of the ESCO Board ("HRCC").



 


		11.	An Annual Performance Based Bonus payable within ninety days
following the end of each fiscal year end. (This Annual Performance Based Bonus will be prorated for any partial year based on the number
of days worked as the President & CEO divided by 260 with such percentage applied to the Executive's (PCP) bonus target for payment
determination).



 


		111.	All amounts paid in subparagraphs (i) and (ii) are subject to
regular income tax withholding, FICA taxes and any other deductions required by law or authorized by Executive.



 






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		3.	Permitted Employer Termination. All obligations of ESCO pursuant hereto, and Executive's employment,
shall terminate upon the earlier of A) the death of Executive or Permanent Disability of Executive, B) the occurrence of a Good Cause
Event, or C) voluntary resignation of Executive other than Termination by Executive for Breach (either A, B or C referred to as a "Permitted
Employer Termination"). Notwithstanding any termination of Executive's employment, Executive shall continue to remain obligated to
comply with Section 9 and 13 herein.



 


		4.	Termination by ESCO other than for a Permitted Employer Termination. If, during the Term of this
Agreement, Executive's employment is terminated for other than a Permitted Employer Termination, then provided the Executive executes
the Standard Severance Agreement and Release then in general use by ESCO, the Executive shall receive the Severance Payments described
in Section 6, after the Revocation Period has lapsed with no revocation of the Severance Agreement by the Executive.



 


		5.	Termination by the Executive as a result of an ESCO Breach. If, during the Term of this Agreement,
A) ESCO breaches a material provision of this Agreement, B) the Executive notifies ESCO in writing within 30 days of such breach ("Cure
Notice"), C) ESCO does not cure such breach within 30 days of receipt of the Cure Notice, D) Executive terminates his employment
based on such breach within 40 days of such Cure Notice, and E) Executive executes the Standard Severance Agreement and Release then in
general use by the ESCO, (the occurrence of A-E referred to as "Termination by Executive for Breach") then Executive shall receive
the Severance Payments described in Section 6, after the Revocation Period has lapsed with no revocation of the Severance Agreement by
the Executive.



 


		6.	Severance Payments. In the event that Executive's employment is terminated and pursuant to Sections
4 or 5 he is entitled to Severance Payments, ESCO agrees as follows.



 


		(a)	After the Revocation Period ESCO shall pay the Executive a total amount equal to his then current bi-weekly
salary for the number of pay periods in two calendar years and two times his Bonus Target. Such amount shall be paid in either of the
following forms, as elected by the Executive:



 


		1.	in a lump sum on the regularly scheduled payroll date of ESCO
coinciding with or immediately preceding March 15 of the calendar year following the calendar year in which such termination occurs,
or



 


		11.	in biweekly installments commencing on the first practical payroll
date of ESCO following the Revocation Period and continuing on each succeeding regularly scheduled biweekly payroll date; provided, however,
that any remaining compensation will be paid in a lump sum on the regularly scheduled payroll date coinciding with or immediately preceding
the later of March 15th or December 15th in the calendar year after such termination occurs.



 






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		(b)	After the Revocation Period, as a supplement to the payment of the Executive's Base Salary and Bonus
under subparagraph (a) above, ESCO shall also pay, reimburse or provide, as applicable, to or for the Executive:



 


		1.	an amount equal to the Bonus Target divided by 26 (the number of pay periods in a year) and multiplied
by the number of pay periods worked by Executive in such current fiscal year occurring prior to the termination,



 


		11.	upon proper application by Executive and payment of the employee portion of the premium, ESCO shall
furnish Executive medical continuation in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA");
provided that during the period of his eligibility the Executive will pay only the rate which active employees pay for similar coverage
for up to six months,



 


		111.	reimbursement of fees incurred by Executive in accordance with ESCO’s financial planning benefit
during the period of time starting after termination of Executive's employment and ending on the federal tax filing deadline for the Executive
for the tax year following the taxable year in which the termination occurred in the same amounts that would have been reimbursed to Executive
had Executive remained employed with ESCO during such period, and



 


		1v.	executive level outplacement assistance determined appropriate
by ESCO.



 


		v.	All Equity Awards made within the twelve months prior to the termination shall be forfeited. The remaining
awards shall then be addressed as follows:



 


Vested Restricted Stock Units
(RSU' s) awards shall be distributed in full. All other awards shall vest and be distributed prorata based on the number of months elapsed
during the RSU award term as of the termination date compared to the total number of months in the RSU term.


 


Performance Share Units (PSU'
s) Awards whose term has been completed will be scored based upon performance and any resulting share units will vest at the Human Resources
& Compensation Committee (HRCC) fiscal year end meeting following the termination. All other PSU's Awards will be prorated based on
the number of months elapsed during the PSU award term as of the termination date compared to the total number of months within the PSU
term. The performance measures will then be scored to determine the number of units which will vest at the HRCC fiscal year end meeting
following the termination.


 


All Equity Award distributions
will be made within 2 weeks of vesting and are subject to share withholding to satisfy any required federal, state or other tax withholdings.


 


The payments, reimbursements and
commitments made in Sections 6 (a), and (b) shall be collectively referred to as "Severance Payments." All Severance Payments
shall be subject to applicable income tax withholding including FICA and any other deductions required by law or authorized by Executive
and shall be conditioned upon 1) Executive signing a standard release then in effect for such purposes and 2) expiration of any revocation
period ("Revocation Period") without revocation by Executive.


 






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		7.	Termination of Employment in Connection with a Change of Control. If during the Term of this Agreement,
Executive's employment is terminated in connection with a Change of Control under circumstance which would cause the benefits described
in the Company's Severance Plan (the "Severance Plan") to become payable to the Executive ("Severance Benefits"),
no further compensation or benefits or any kind shall be payable under this Agreement but the Severance Plan Benefits shall be paid in
accordance with the terms and conditions of the Severance Plan. Capitalized terms not defined herein are defined in the Severance Plan
first adopted August 10, 1995 by ESCO Electronics Corporation (now known as ESCO Technologies Inc.) Board of Directors and as later amended.



 


		8.	Continued Employment Not Guaranteed. This Agreement is intended to outline certain compensation
payable to Executive under the specified circumstances described herein and shall not be construed as a guarantee of the Executive's continued
employment, nor shall it limit the ability of the ESCO to terminate the employment relationship at any time, with or without cause upon
written notice to the Executive. Executive's continued employment after the end of the Term shall be considered employment-at-will. None
of the provisions of this Agreement shall limit the ability of the Executive to resign at any time upon written notice to ESCO.



 


		9.	Confidential Information; ESCO Property; Nonsolicitation; Non Compliance; Compensation Recovery.
By and in consideration of the mutual promises contained herein, the Executive agrees that:



 


		9.1	Confidential Information:



 


(a)                   
Executive shall both during and after employment with ESCO regardless of how, when or why Executive's employment ends, protect
the confidential, trade secret and/or proprietary character of all Confidential Information. Executive shall not, directly or indirectly,
use (for the benefit of Executive or any other person) or disclose any Confidential Information, for so long as it shall remain proprietary
or protectable as confidential or trade secret information, except (i) as may be necessary for the performance of Executive's duties for
ESCO, (ii) to the extent that such Confidential Information becomes generally known to the public through no wrongful act of Executive
or any representative of Executive, or (iii) as required by applicable law, regulation or legal process and provided ESCO is given advance
notice of such required disclosure and the opportunity to seek a protective order as appropriate. In addition, notwithstanding that this
Agreement is Confidential Information, Executive shall be permitted to disclose the terms and conditions of this Agreement to Executive's
spouse, legal advisors and personal tax or financial advisors provided such individuals agree to keep such information strictly confidential.


 


(b)                At
the end of the Term, or the end of any employment at-will-period, or at any other time ESCO may request, Executive shall promptly
deliver to ESCO all materials in Executive's possession containing any Confidential Information, whether in written or electronic
form, including, without limitation, writings, designs, documents, records, memoranda, photographs, sound recordings, tapes, discs
and other storage devices. To the extent Confidential Information is contained on Executive's personal computers, cell phones or
other electronic devices, such information shall be purged from such devices and Executive shall certify in writing to ESCO that all
such Confidential Information has been returned and/or purged.


 






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(c)                 
For purposes of this Agreement, "Confidential Information" means all financial, technical and business information that
is not generally in the public domain regarding:


 


		1.	the installation, operation, usage, maintenance, repair, marketing, design, construction, function, performance,
composition, and specifications of ESCO' s or any subsidiaries, or affiliates' current and future products and components for such products
along with computer code, software, firmware or related documentation as well as technical, financial (e.g. unit prices), or product road
map information related to any of the foregoing;



 


		11.	the intellectual property of ESCO, or any subsidiary or affiliate such as patent application, inventions,
or trade secrets;



 


		111.	the financial performance or prospects of ESCO, or any subsidiary,
or affiliate along with any other material, non-public information as defined by relevant insider trading statutes or SEC regulations;



 


		1v.	customer contacts, customer requirements, or system performance;
and



 


		v.	any other information of ESCO, or any subsidiary or affiliate
which:



 


		A.	derives economic value, actual or potential, from not being generally known to or readily ascertainable
by other persons who can obtain economic value from the disclosure or use of the information; and



 


		B.	is the subject of efforts by the ESCO or its subsidiary or affiliate that are reasonable under the
circumstances to maintain the secrecy of the information.



 


(d)               
The parties hereto stipulate that the protection of Confidential Information is important to the successful conduct of the business
of ESCO, and their respective subsidiaries and affiliates, and their goodwill, and any breach of any term of this section is a material
breach of Agreement.


 


9.2      
ESCO Property. All equipment, notebooks, documents, presentations, briefings, programs, data, memoranda, reports, files,
samples, books, correspondence, lists, software, other records, whether in tangible or intangible form, and the like, affecting or relating
to the business of ESCO, and their respective subsidiaries and affiliates, which Executive shall have prepared, used, constructed, observed,
received, possessed or controlled during employment with ESCO (collectively "Property"), shall be and remain the sole property
of ESCO, and their respective subsidiaries and affiliates, as the case may be, and shall be returned to an ESCO Representative upon termination
of employment or earlier request of an ESCO Representative.


 


 9.3         Nonsolicitation. During the period commencing on the Effective Date and ending two (2) years following the termination of Executive's employment for any reason, the Executive will not directly or indirectly, on his behalf or on behalf of any other organization, solicit, hire, or otherwise induce any employee of ESCO, or any subsidiary or affiliate of ESCO to leave the employ of ESCO, or affiliate, or to become associated, whether as an employee, officer, partner, director, consultant or otherwise, with any other business organization.




 






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9.4        
Noncompliance. If the Executive's employment ends or is terminated as a result of a Permitted Employer Termination, except
as otherwise required by law, no further payments or contractual benefits shall be provided to, or in respect of the Executive by ESCO
pursuant to this Agreement or otherwise. Additionally, all terms and conditions of the PCP plan shall apply, including if applicable recoupment
of past PCP payments.


 


9.5        
Independent Agreements. Each of the covenants and agreements of Executive contained in this Section 9 shall be construed
as independent of any other provision of this Agreement and independent of each other and given for valuable independent consideration,
and the existence of any defense, claim or cause of action against ESCO, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by ESCO of each such independent covenant and agreement.


 


		10.	Compensation in Event of Death or Permanent Disability. In the event that a Permitted Employer
Termination occurs because of death or the Permanent Disability of Executive, Executive or Executive's estate and beneficiaries shall
be entitled to all payments and benefits in accordance with the regular policies of ESCO in force at such time for such events with respect
to a senior manager or officer but not less than in accordance with the regular policies of ESCO applicable to salaried personnel generally
in force on the date thereof.



 


		11.	Non-Waiver of Rights. The failure to enforce at any time any of the provisions of this Agreement
or to require at any time performance by the other party of any of the provisions hereof shall in no way be construed to be a waiver of
such provisions or to affect either the validity of this Agreement, or any part hereof, or the right of either Party thereafter to enforce
each and every provision in accordance with the terms of this Agreement.



 


		12.	Invalidity of Provisions. The invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable
provisions were omitted provided the effectiveness of the remaining portions of this Agreement will not defeat the overall business intent
of the Parties or give one Party any substantial benefit to the detriment of the other Party.



 


		13.	Governing Law. This Agreement shall be interpreted in accordance with and governed by the laws
of the State of Missouri without regard to its conflict of law's provisions.



 


		14.	Amendments. Except as provided in Section 15, no modification, amendment or waiver of any of the
provisions of this Agreement shall be effective unless in writing specifically referring hereto and signed by the Executive and by an
ESCO Representative.



 






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		15.	Amendments Required by the Laws, Regulations or Stock Exchange Listing Requirement. This Agreement
may be amended by ESCO without consent of the Executive as a result of changes in laws, regulations or stock exchange listing requirements
applicable to ESCO and impacting agreements with its senior officers and those of its subsidiaries.



 


		16.	Notices. Any notice to be given by either Party hereunder shall be in writing
and shall be deemed to have been duly given if sent by facsimile or email followed by first class mail, sent certified or registered mail,
postage paid, or hand delivered as follows:



 


ESCO:


Lead Director


ESCO Technologies Inc. 9900A
Clayton Road


St. Louis, MO 63124


 


With copy to


ESCO Technologies Inc.


Vice President, Human Resources
9900A Clayton Road


St. Louis, MO 63124


 


And to Executive at his address as
it appears on the payroll records of ESCO, or to such other address as may have been furnished by either Party to the other Party by written
notice.


 


		17.	Survival of Certain Provisions. The parties agree that Sections 9, and 13 shall survive any expiration
or termination, including without limitation a Permitted Employer Termination, of this Agreement and shall survive the termination of
Executive's employment for any reason and shall remain in full force and effect in accordance with the provisions contained in such Sections.



 


		18.	Spendthrift Provision. Except as otherwise expressly provided herein, Executive agrees on behalf
of himself and his executors and administrators, heirs, legatees, distributees, and any other person or persons claiming any benefits
under him by virtue of this Agreement, that this Agreement and the rights, interests and benefits hereunder shall not be assigned, transferred,
pledged, or hypothecated in any way by Executive or any executor, administrator, heir, legatee, distributee, or person claiming under
Executive by virtue of this Agreement, and shall not be subject to execution, attachment or similar process. Any attempt at assignment,
transfer, pledge or hypothecation or other disposition of this Agreement or of such rights, interest, and benefits contrary to the foregoing
provision, or the levy of any attachment or similar process thereupon, shall be null and void and without effect.



 


		19.	Section 409A Savings Cause. This Agreement is intended to comply with the provisions of 409A
of the Code. If any compensation or benefits provided by this Agreement may result in the application of Section 409A of the Code, ESCO
shall, in consultation with Executive, modify the Agreement in the least restrictive manner necessary in order to exclude such compensation
from the definition of "deferred compensation" within the meaning of such Section 409A of the Code or in
order to comply with the provisions of Section 409A of the Code, other applicable provision(s) of the Code and/or any rules, regulations
or other regulatory guidance issued under such statutory provisions and without any diminution in the value of the payments to Executive.
Notwithstanding the preceding, ESCO makes no representations regarding the tax consequences of compensation or benefits payable under
this Agreement and Executive is responsible for all such tax consequences other than ESCO's share of employment taxes.



 






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		20.	Consulting Services. ESCO may ask Executive to provide consulting services to ESCO from time
to time after Executive's employment terminates. In the event that Executive is receiving Severance Payments, Executive shall agree perform
up to 80 hours of such consulting services without additional compensation.



 


IN WITNESS WHEREOF, the parties have
executed this Agreement on the date set forth below.


 


 


	Bryan Sayler	 	Jim Stolze
	 	 	Lead Director 
	 	 	ESCO Technologies Inc.
	s/Bryan Sayler	 	s/J.M. Stolze
	Date 12/15/2022	 	Date 12/21/22



 






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