Document:

Exhibit 10.1 

 

AMENDMENT TO

EMPLOYMENT AGREEMENT

 

This Amendment to Employment
and Compensation Agreement (the “Amendment”) is entered into between ESCO Technologies Inc., a Missouri corporation
(“ESCO”), and Victor L. Richey (“Executive”) effective as of January 1, 2023, to amend the Employment
and Compensation Agreement, dated May 10, 2021, by and between ESCO and Executive (the “Employment Agreement”). Words
and phrases used herein with initial capital letters that are defined in the Employment Agreement are used herein as so defined.

 

RECITALS

 

WHEREAS, the Executive
is currently serving as ESCO’s Chairman, President and Chief Executive Officer (“CEO”);

 

WHEREAS, on September
9, 2022, Executive notified ESCO’s Board of Directors that he intends to resign his positions as CEO and President effective December
31, 2022, and that he also intends to retire from his position as Chairman of ESCO’s Board of Directors after a transitional phase
which shall include the identification and selection of a new Chairperson;

 

WHEREAS, ESCO desires
to provide for an orderly transition of the Executive’s duties and responsibilities, and the Executive desires to assist ESCO in
realizing an orderly transition as set forth in this Amendment.

 

NOW,
THEREFORE, in consideration of the foregoing recitals, the mutual promises contained herein, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows: 

 

 1.                   The first “WHEREAS” clause in the Recitals is hereby deleted from the Employment Agreement.  

 

2.                  
The definition of “Bonus Target” in Section 1 of the Employment Agreement is hereby deleted and replaced with the following:

 

“Bonus Target” shall
mean $959,500 with respect to the first quarter of ESCO’s 2023 fiscal year, and $487,500 with respect to the period beginning on
the first date of the second quarter of ESCO’s 2023 fiscal year and ending on the date that Executive’s employment with ESCO
terminates.

 

For the avoidance of doubt, each
of these amounts is expressed as an annual amount but applicable only for the period stated, and each shall be prorated for a partial
year in accordance with Section 2(b)ii. of the Employment Agreement.

 

3.                  
Section 2(a)iii. of the Employment Agreement is hereby amended by replacing the phrase “ESCO’s Chairman, President
& CEO” with the phrase “ESCO’s Executive Chairman” where it appears therein.

 

4.                  
Section 2(b)i. of the Employment Agreement is hereby deleted and replaced with the following:

 

		“i.	A bi-weekly salary of $25,000 which shall be paid in accordance with ESCO’s normal method of payment.”

 

     

     

    

 

 5.                  
Section 3 of the Employment Agreement is hereby amended by inserting the following at the end thereof:

 

“Executive and ESCO agree
that, unless earlier terminated in accordance with this Section 3(C), Executive’s employment hereunder, and this Agreement, will
terminate effective December 31, 2023 (or such other date agreed upon by the parties not later than December 31, 2023 (the “Termination
Date”), and such termination shall be deemed to be a termination as a result of Executive’s voluntary retirement and resignation
from ESCO pursuant to Section 3(C) (i.e. a Permitted Employer Termination) for all purposes of this Agreement and all other employee benefit
or compensation plans, agreements or arrangements. Effective as of December 31, 2022, Executive hereby resigns from his positions as President
and Chief Executive Officer of ESCO and from all other positions and offices that he holds with ESCO or any affiliate of ESCO; provided,
that that Executive shall continue as Executive Chairman of ESCO’s Board of Directors under the terms of this Agreement. There shall
be no change in Executive’s employee benefits or perquisites from those provided prior to December 31, 2022 during the period from
December 31, 2022 until the Termination Date. Executive agrees to resign from his position as a member of ESCO’s Board of Directors
effective as of the Termination Date.

 

 6.                  
Sections 4, 5, 6, 8 and 20 of the Employment Agreement are hereby deleted and each replaced with the following “Intentionally Omitted”.

 

7.                  
Section 7 of the Employment Agreement is hereby deleted and replaced with the following:

 

“Termination of Employment
in Connection with a Change of Control. The parties acknowledge that Executive is a participant in ESCO’s Severance Plan, referred
to as the ESCO Technologies Inc. Fourth Amended and Restated Severance Plan dated November 17, 2020 (the “Plan”). The parties
agree that the terms of Executive’s participation in the Plan are hereby amended as follows: (a) if a Change of Control (as defined
in the Plan) shall occur prior to the Termination Date, any then-remaining undistributed portion of Equity Awards (as defined in the Plan)
of Executive will vest immediately prior to the Change of Control and be converted into the right to receive cash and distributed in accordance
with the terms and conditions of the Executive’s Equity Award Agreements (as defined in the Plan), and (b) except as expressly provided
in (a) of this Section 7, Executive shall no longer participate in the Plan and Executive shall not be entitled to any other rights or
benefits of any kind under the Plan. Further, if during the Term of this Agreement, Executive’s employment is terminated in connection
with a Change of Control, no further compensation or benefits of any kind shall be payable under this Agreement.

 

 8.                  
For the avoidance of doubt, Executive and ESCO acknowledge and agree that the changes in Executive’s title, duties, compensation and responsibilities described in this Amendment, and the other changes in Executive’s employment terms set forth in this Amendment (including any resignations required by this Amendment) have been consented to by Executive in connection with his voluntary retirement and do not and will not constitute any termination pursuant to Section 4 or 5 of the Employment Agreement or entitle Executive to the payment of any Severance Payments under the Employment Agreement, and shall not constitute a breach by ESCO or “good reason” or any similar concept under any employee benefit or incentive compensation plan or agreement.

 

     

     

    

 

9.                  
 This Amendment may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.

 

 10.                  
Except as otherwise provided herein, the Employment Agreement shall continue in full force and effect in accordance with its terms.

 

IN WITNESS WHEREOF, ESCO
has caused this Amendment to be executed on its behalf by its duly authorized officer and Executive has executed this Amendment, as of
the date first written above.

 

ESCO TECHNOLOGIES INC.

 

	By:
    	s/James
    M. Stolze	 	By:
    	s/Victor
    L. Richey
	 	James
    M. Stolze	 	 	Victor
    L. RicheyExhibit 10.2

 

TRANSITION
AWARD AGREEMENT

 

 

	To:	Victor L. Richey Jr. (“you”)

 

	From:	Human Resources and Compensation
                                            Committee of the Board of Directors (the “Committee”)

 

	Subject:	ESCO Technologies Inc. (the
                                            “Company”) 2018 Omnibus Incentive Plan (“Plan”) – Transition
                                            Award (“Award”)

 

1.       Award.
Effective on the first trading day of 2023 (the “Award Date”), the Committee has approved the award to you of 17,241
Restricted Share Units (the “RSUs”) pursuant to the Plan, representing the right to receive 17,241 shares of common stock
of the Company (“Company Stock”) upon satisfaction of all of the terms and conditions set forth in this Transition Award
Agreement (“Agreement”) and in the Plan, a copy of which has been delivered to you and is available from the Company’s
Human Resources Department upon request.

 

2.       Payout
Terms.

 

(a)       The
Award and any receipt of Company Stock is subject to your compliance with this Agreement and the Plan (including the provisions of Section
11 of the Plan). If you are continuously employed by the Company or a subsidiary, limited liability company, or other entity directly
or indirectly wholly owned by the Company (“Company Owned Entity”) from the Award Date through the close of business on the
Vesting Date as defined in Section 2(b), each RSU will be converted into the right to receive one share of Company Stock, and such shares
of Company Stock will be issued to you or your brokerage account as of the first trading day of 2024.

 

(b)       The
“Vesting Date” is December 31, 2023; subject to Section 2(d). The “Vesting Period” begins on the Award Date and
ends December 31, 2023.

 

(c)       Notwithstanding
paragraph 2(a), if there is a Change of Control, as defined in Section 3(b), before the shares of Company Stock have been issued to you
under this Award then:

 

(i)       On
the effective date of the Change of Control (the “CoC Effective Date”), the Award will be converted into the right to receive
cash in an amount equal to the number of unconverted RSUs multiplied by the average of the daily closing price of the Company’s
common stock on the New York Stock Exchange over the last ten trading days preceding the CoC Effective Date, and such cash will be paid
to you within 30 days after the CoC Effective Date.

 

(ii)       In
the event of a Change of Control this subsection 2(c) shall control all distributions of shares and compensation under this Award. However,
in such event, the following additional terms will apply to the Award:

 

		(A)	Notwithstanding the foregoing provisions
                                            of this Section 2(c), in the event a certified public accounting firm designated by the Committee
                                            (the “Accounting Firm”) determines that any payment (whether paid or payable
                                            pursuant to the terms of this Award or otherwise and each such payment hereinafter defined
                                            as a “Payment” and all Payments in the aggregate hereinafter defined as the “Aggregate
                                            Payment”), would subject you to tax under Section 4999 of the Internal Revenue
                                            Code of 1986 (“Code”) then such Accounting Firm shall determine whether some
                                            amount of payments would meet the definition of a “Reduced Amount”. If the Accounting
                                            Firm determines that there is a Reduced Amount, payments shall be reduced so that the Aggregate
                                            Payments shall equal such Reduced Amount. For purposes of this clause 2(c)(I), the “Reduced
                                            Amount” shall be the largest Aggregate Payment which (A) is less than the sum of all
                                            Payments and (B) results in aggregate Net After Tax Receipts which are equal to or greater
                                            than the Net After Tax Receipts which would result if Payments were made without regard to
                                            this clause 2(c)(I). “Net After Tax Receipt” means the Present Value (defined
                                            under Section 280G(d)(4) of the Code) of a Payment net of
all taxes imposed on you under Section 1 and 4999 of the Code by applying the highest marginal rate under Section 1 of the
Code.

 

     

     

    

 

		(B)	As a result of the uncertainty in the
                                            application of Section 4999 of the Code at the time of the initial determination of the Accounting
                                            Firm hereunder, it is possible that Payments will be made by the Company which should not
                                            have been made (the “Overpayments”) or that additional Payments which the Company
                                            has not made could have been made (the “Underpayments”), in each case consistent
                                            with the calculations of the Accounting Firm. In the event that the Accounting Firm, based
                                            either upon (A) the assertion of a deficiency by the Internal Revenue Service against the
                                            Company or you which the Accounting Firm believes has a high probability of success or (B)
                                            controlling precedent or other substantial authority, determines that an Overpayment has
                                            been made, any such Overpayment shall be treated for all purposes as a loan to you which
                                            you shall repay to the Company together with interest at the applicable Federal rate provided
                                            for in Section 7872(f)(2)(A) of the Code; provided, however, that no amount shall be payable
                                            by you to the Company if and to the extent such payment would not reduce the amount which
                                            is subject to taxation under Section 1 and Section 4999 of the Code or if the period of limitations
                                            for assessment of tax has expired. In the event that the Accounting Firm, based upon controlling
                                            precedent or other substantial authority, determines that an Underpayment has occurred, any
                                            such Underpayment shall be promptly paid by the Company to you together with interest at
                                            the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code.

 

(d)       Notwithstanding
any other provision of this Section 2:

 

(i)       If
your death occurs during the Vesting Period, then the Committee, in its absolute discretion, may make such full, pro-rata, or no distribution
of Company Stock in satisfaction of this Award as it may determine, to your surviving spouse, heirs or estate as it may determine, all
in its sole and complete discretion.

 

(ii)       If
on or before the Vesting Date your employment terminates on account of your retirement with the approval of the Committee, then the Award
shall become fully vested as of the retirement date and will be converted and paid following the Vesting Date as provided in Section
2(a).

 

(e)       It
is intended that all payments and benefits under this Agreement be exempt from Section 409A of the Internal Revenue Code of 1986, as
amended (“Section 409A”) and this Agreement shall be construed to the greatest extent possible as consistent with
those provisions.  If not so exempt, this Agreement shall, to the extent permissible, be construed in a manner that complies with
Section 409A and incorporates by reference all required definitions and payment terms. Notwithstanding the foregoing, the Company makes
no representation that this Agreement is exempt from Section 409A and shall have no liability to you for any failure to comply with Section
409A.  You will be fully responsible for any and all taxes or other amounts imposed by Section 409A. 

 

3.       Definitions.
For purposes of this Award, the following terms have the following meanings:

 

(a)       “Cause”
means, solely for the purposes of this Award, your violation of the covenants defined in Section 5.

 

(b)       “Change
of Control” means:

 

(i)       The
purchase or other acquisition by any person, entity or group of persons (herein “Acquiror”), within the meaning of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (excluding, for this purpose, the Company
or its Subsidiaries or any employee benefit plan of the Company or its Subsidiaries), of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either the then-outstanding shares of common stock of the Company
or the combined voting power of the Company’s then-outstanding voting securities entitled to vote at any general or special
meeting of shareholders; or

 

     

     

    

 

(ii)       A
change in composition of the Board of Directors of the Company (the “Board” and, as of the date hereof, the “Incumbent
Board”) resulting in individuals who constitute the Incumbent Board ceasing for any reason to constitute at least a majority of
the Board, provided that any person who becomes a director subsequent to the date hereof whose election or nomination for election by
the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board
(other than an individual whose initial assumption of office is in connection with an actual or threatened election contest relating
to the election of the directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) shall be, for purposes of this section, considered as though such person were a member of the Incumbent Board; or

 

(iii)       Approval
by the stockholders of the Company of (A) a reorganization, merger or consolidation, in each case with respect to which persons who were
the stockholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own
more than 50% of, respectively, the common stock and the combined voting power entitled to vote generally in the election of directors
of the reorganized, merged or consolidated corporation’s then-outstanding voting securities, or (B) a liquidation or dissolution
of the Company or of the sale of all or substantially all of the assets of the Company. The surviving entity of such reorganization,
merger or consolidation, or the entity which receives through liquidation or dissolution all or substantially all of the assets of the
Company is referred to herein as “Successor Entity.”

 

Notwithstanding the foregoing, an isolated
sale, spin-off, joint venture or other business combination by the Company, which involves one or more divisions of the Company or a
Company Owned Entity and is approved by a majority vote of the Incumbent Board, shall not be deemed to be a Change of Control.

 

4.       Valuation.
Company Stock issued pursuant to this Award shall be valued for tax purposes at the closing price of the Company’s common stock
on the New York Stock Exchange on the Vesting Date, or if the Company Stock is not traded on such Exchange on the Vesting Date, then
on the last day prior to the Vesting Date on which the Company Stock is traded on such Exchange.

 

5.       Dividends.
Contingent upon shareholder approval of the Amended 2018 Omnibus Incentive Plan in February 2023, quarterly dividend equivalents will
be accrued on the Award commencing with the first regularly scheduled quarterly dividend payment after the Award Date. The accrued dividends
on the Award, if any, will be distributed in cash at the time the Award is distributed.

 

6.       Covenants.

 

(a)       You
agree that during the period beginning on the Award Date and ending two (2) years after the date on which you receive the final distribution
of Company Stock (or payment of cash, in the event of a Change of Control) to which you are or become entitled under Section 2 of this
Award, you will not do any of the following:

 

(i)       As
an individual or as a partner, employee, agent, advisor, consultant or in any other capacity of or to any person, firm, corporation or
other entity, directly or indirectly carry on any business or become involved in any business activity, which is (A) competitive with
the business of the Company or any Company Owned Entity, as presently conducted and as said business may evolve in the ordinary course,
and (B) a business or business activity in which you were engaged in the course of your employment with the Company; but notwithstanding
the foregoing, nothing herein shall prevent you from being a 2% or less shareholder of a publicly traded corporation;

 

(ii)       
As an individual or as a partner, employee, agent, advisor, consultant or in any other capacity of or to any person, firm, corporation
or other entity, directly or indirectly recruit, solicit or hire, or assist anyone else in recruiting, soliciting or hiring, any employee
of the Company or any Company Owned Entity;

 

(iii)
Induce or attempt to induce, or assist anyone else to induce or attempt to induce, any customer of the Company or any Company Owned Entity,
to discontinue its business with the Company or Company Owned Entity;

 

(iv) Engage
in the unauthorized use or disclosure of confidential information or trade secrets of the Company or any Company Owned Entity resulting
in harm to the Company or any Company Owned Entity.

 

     

     

    

 

(b)       In
the event of a breach or threatened breach of the covenants described in paragraph 6(a), the Company shall be entitled, in addition to
any other legal or equitable remedies it may have:

 

(i)       To
temporary, preliminary and permanent injunctive relief restraining such breach or threatened breach. You hereby expressly acknowledge
that the harm which might result as a result of any noncompliance by you would be largely irreparable, and you agree that if there is
a question as to the enforceability of any of the provisions of this Award, you will abide by the Award until after the question has
been resolved by a final judgment of a court of competent jurisdiction;

 

(ii)       
To cancel this Award; and/or

 

(iii)
To recover from you (1) any shares of stock transferred to you under this Award during any period(s) (A) that you were in breach of any
of the above described covenants or (B) in the case of intentional misconduct resulting in a financial restatement during the periods
that required statement, but in either case not to exceed three years, and (2) the proceeds from any sales of such shares received under
this Award during the above time periods to the extent such shares transferred to you under this Award have been sold or retained by
the Company to pay your taxes. The Committee shall have sole discretion in determining the amount that shall be recovered from you under
this subparagraph 6(b)(iii).

 

7.       Choice
of Law; Venue. This Award shall be construed and administered in accordance with the laws of the State of Missouri without regard
to the principles of conflicts of law which might otherwise apply. In light of the fact that the Company is headquartered in St. Louis,
Missouri, the Plan was established and is administered in the State of Missouri and the majority of the Committee’s meetings are
held in the State of Missouri, any litigation concerning any aspect of this Award shall be conducted exclusively in the State or Federal
Courts in the State of Missouri.

 

8.       Severability.
Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable
law. If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule
in any jurisdiction, (a) the parties agree that such provision(s) will be enforced to the maximum extent permissible under the applicable
law, and (b) any invalidity, illegality or unenforceability of a particular provision will not affect any other provision of this Agreement.

 

9.       Amendment.
This Award may be amended by written consent between the Company and you, or by the Company to the extent it does not lessen or restrict
your rights hereunder.

 

10.       Understanding
of Agreement. You acknowledge that you have had a reasonable period of time to study, understand, and consider this Agreement,
that you have the right to consult with counsel of your choice prior to signing the Agreement, that you have read the Agreement and understand
all of its terms, that you are entering into the Agreement knowingly and voluntarily, that in so doing you are not relying upon any statements
or representations of the Company or its agents other than as expressly provided in this Agreement, and that the Agreement is fair and
reasonable.

 

     

     

    

 

This Agreement will become effective
as of the Award Date subject to your execution below.

 

 

	ESCO TECHNOLOGIES INC.	 	AGREED TO AND ACCEPTED:
	 	 	 	 
	 	 	 	 
	By:	s/James M. Stolze	 	s/Victor L. Richey Jr.
	 	 James M. Stolze	 	Victor L. Richey Jr.
	 	 	 	 
	Date Signed: 21 Dec 2022	 	Date Signed: 20 Dec 2022

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