Mr. Stolze’s experience in the accounting profession as well as his experience in corporate finance and treasury matters and domestic and foreign manufacturing enables Mr. Stolze to provide valuable advice and direction. As Chair of the Audit and Finance Committee of the Company’s Board of Directors, Mr. Stolze adds significant value to the Company’s goals of maintaining a strong balance sheet and fulfilling its financial reporting obligations, accurately and transparently.

Principal Occupation and Business Experience: Mr. Stolze has served as the Chief Financial Officer of two public companies: he was Vice President and Chief Financial Officer of Stereotaxis, Inc., a manufacturer of medical instruments, from 2004 until his retirement in 2009, and the Executive Vice President and Chief Financial Officer of MEMC Electronic Materials Inc. (now SunEdison Inc.) from 1995 to 2003. Prior thereto he served as an Audit Partner for KPMG LLP.

Public Company Directorships: Mr. Stolze currently serves on the Company’s Board of Directors.

Other Experience and Education: Mr. Stolze is a member of the Board of Directors and Chairman of the Audit Committee of ISTO Technologies, Inc., an orthobiologics company; and a member of the Board of Trustees of Maryville University, St. Louis, Missouri as well as that Board’s Enrollment and Student Life Committee. Mr. Stolze received a Bachelor of Science degree in Mechanical Engineering from the University of Notre Dame and a Master of Business Administration degree from the University of Michigan. He also holds a Certified Public Accountant (CPA) license from the State of Missouri, and qualifies as an audit committee financial expert under SEC regulations.

Ms. Valdez’s extensive strategic and operational experience in the defense markets as well as her management and financial expertise allow her to assist the Board in guiding the Company’s strategy at the highest level.

Principal Occupation and Business Experience: Ms. Valdez retired in April 2018 after 32 years of civilian service with the Department of the Navy and the Department of Homeland Security. Prior to her retirement, she served as the Deputy Assistant Secretary of the Navy within the Office of the Assistant Secretary of the Navy (ASN) for Research, Development and Acquisition. In this capacity, she was responsible for executive oversight of all naval shipbuilding programs, major ship conversions, and the maintenance, modernization and disposal of in-service ships. She previously served as the Executive Director for the Program Executive Office for submarines, responsible for civilian management and the design, acquisition and construction for submarine platform and undersea systems; as the Director of the Investment and Development division within the Office of ASN for Financial Management and Comptroller; as the Director for Naval and Commercial Construction in the Office of the ASN for Ship Programs; and in various other civilian positions within the Navy Department. She has also served as the Budget Director for the U.S. Immigration and Customs Enforcement within the Department of Homeland Security

Public Company Directorships: Ms. Valdez currently serves on the Company’s Board of Directors.

Other Experience and Education: Ms. Valdez holds a Master of Science degree in Management from Florida Institute of Technology as well as a Bachelor of Science degree in Mechanical Engineering from the University of New Mexico. She has received the Department of the Navy’s Distinguished, Superior and Meritorious Civilian Service Awards, and in 2014 she was awarded the Pioneer award from Great Minds in STEM. She is also the ship sponsor of the Virginia Class submarine Vermont (SSN 792), which she christened in October 2018.

PROPOSAL 2: CHARTER AMENDMENT TO PERMIT THE SHAREHOLDERS TO AMEND THE COMPANY’S BYLAWS

The Board of Directors recommends a vote FOR
the proposed amendment to the Company’s Charter

The Company’s Board of Directors has declared it to be advisable and in the best interests of the Company and its shareholders, and therefore recommends that the shareholders approve, an amendment to Article Ten of the Company’s Restated Articles of Incorporation (“Charter”) to permit the Company’s shareholders to amend the Company’s bylaws (the “Proposed Amendment”).

Currently, Article Ten of the Charter provides that only the Board of Directors can amend, alter, change or repeal the Company’s Bylaws; the shareholders have no power to do so. However, the ability of shareholders to amend by-laws is increasingly considered an important aspect of good corporate governance, and in conjunction with the Board’s annual governance review in August 2017 the Board and management reviewed this restriction and determined that it would be appropriate for the shareholders as well as the Board to have the power to amend the Bylaws. As a result, the Board adopted the Proposed Amendment and has approved its submission to the shareholders for approval at this Meeting. This proposal demonstrates the Board’s continuing commitment to strong corporate governance practices which the Board believes are consistent with its goal of creating long-term, sustainable value for our shareholders.

Description of Proposed Amendment. The Proposed Amendment would amend Article Ten of the Charter to provide that the Bylaws of the Company may be amended by either the affirmative vote of directors constituting a majority of the entire Board (which is currently permitted) or the affirmative vote of the holders of record of a majority of the shares of the Company then outstanding and entitled to vote on the matter (which is new). In addition, the Proposed Amendment would make minor changes to simplify the language and to eliminate an obsolete reference to Article Four, Section C(2) of the Charter, which is no longer in effect. The text of the Proposed Amendment is as follows (additions are underlined and deletions are in strikethrough):

“Subject to the provisions set forth in Article Four, Section C(2) hereof, theThe Bylaws of the Corporation may be amended, altered, changed or repealed, anda provision or provisions inconsistent with the provisions of the Bylaws as they exist from time to time may be adopted, only byeither (i)theaffirmative vote, at a duly constituted meeting of the Board of Directors, of directors constituting amajority of the entire Board of Directors, or (ii) the affirmative vote, at a duly constituted meeting of the shareholders, of the holders of record of a majority of the shares of the Corporation then outstanding and entitled to vote on the matter.”

If approved at the Meeting by the requisite vote set forth below, the Proposed Amendment will become effective upon the filing of Articles of Amendment with the Missouri Secretary of State, which the Company intends to cause to be done promptly after the Meeting.

Conforming Bylaw Amendment. Consistent with the current restrictions in the Charter, the Company’s Bylaws currently give the Board of Directors the exclusive power to adopt, alter or repeal any provision of the bylaws and to make new bylaws. Accordingly, the Board has approved an amendment to the current Bylaws (the “Conforming Bylaw Amendment”), which will conform the language of the Bylaws with the language of the Proposed Amendment contingent upon shareholder approval of the Proposed Amendment. Approval of the Conforming Bylaw Amendment does not require shareholder action.

Supermajority Vote Required for Approval. Under Article Eleven of the Charter, approval of the Proposed Amendment will require the affirmative vote of the holders of at least 85% of the shares of Company common stock outstanding on the record date, or 21,960,517 shares. Although the required percentage is high, Management believes it is attainable because it is within the range of some other shareholder votes in recent years. However, abstentions and broker non-votes will have the same effect as votes against the Proposed Amendment, so it is therefore extremely important that shareholders cast their votes in a timely manner in order to ensure that they are counted.

Effect of Failure to Approve. If the Proposed Charter Amendment is not approved by the requisite vote, then Articles of Amendment will not be filed with the Missouri Secretary of State and the Proposed Amendment will not become effective; the Conforming Bylaw Amendment will not become effective; and the Board of Directors will continue to have the exclusive power to amend, alter, change or repeal any provision of the Company’s Bylaws.

PROPOSAL 3: APPROVAL OF 2018 OMNIBUS INCENTIVE PLAN

The Board of Directors recommends a vote FOR
approval of the Company’s 2018 Omnibus Incentive Plan

Description of the Plan

Background

As part of the Company’s continuing incentive compensation program, and upon the consideration and recommendation of the Human Resources and Compensation Committee (in this section, the “Committee”), the Board of Directors approved and adopted the 2018 Omnibus Incentive Plan (the “2018 Plan”) on November 9, 2017 and is recommending it for approval by the shareholders at the Meeting.

In connection with the Committee’s consideration and recommendation of the 2018 Plan, the Committee’s Compensation Consultant reviewed and analyzed the 2018 Plan and determined that the maximum dilutive impact of the awards permitted under the 2018 Plan would be well within investor-based guidelines. The Compensation Consultant also proposed certain amendments to the 2018 Plan which the Committee adopted in order to ensure that the 2018 Plan complied with current standards of good governance.

Accordingly, the 2018 Plan includes several provisions which protect the rights of the Company’s shareholders, including the following:

If approved, the 2018 Plan will replace the Company’s 2013 Incentive Compensation Plan (the “2013 Plan”), which will terminate.

The 2018 Plan is similar to the 2013 Plan, which was approved by the Shareholders at the 2013 Annual Meeting. Although the 2013 Plan is not scheduled to expire until 2023, the Board determined to replace the 2013 Plan with the 2018 Plan in order to effect several changes it deemed advisable, as described below. If the 2018 Plan is not approved by the Shareholders, the 2013 Plan will remain in effect until its scheduled expiration date. The approval of the 2018 Plan will not affect awards previously granted under the 2013 Plan or any other equity plans of the Company, which will remain outstanding according to their terms. See “Other Equity Compensation Plan Information” below.

Summary of the 2018 Plan

The following summary of certain provisions of the 2018 Plan is not complete and is qualified by reference to the text of the 2018 Plan, which is set forth in Appendix A to this Proxy Statement.

Purpose. The purpose of the 2018 Plan is the same as the purpose of the 2013 Plan, namely to maintain and strengthen the Company’s ability to attract and retain executive, managerial and other salaried employees; to motivate participants to achieve long-range goals consistent with increases in shareholder value; to provide incentive compensation opportunities that are flexible and competitive with those of other similar businesses; to support the Company’s executive compensation program discussed in the “Compensation Discussion and Analysis” section of this Proxy Statement; and, in the case of stock-based awards, to further align participants’ interest with those of the shareholders through compensation that is based on the value of the Company’s common stock.

Types of Awards. Under the 2018 Plan, the Human Resources and Compensation Committee of the Board of Directors (in this section, the “Committee”) may grant a variety of awards, including awards granted on the basis of shares of Company common stock (“shares”) or the value thereof (“Stock-Based Awards”). Stock-Based Awards may include Stock Options (including Incentive Stock Options), stock appreciation rights linked to Stock Options (“Tandem SARs”), and performance-accelerated restricted share awards (“PARS Awards”), as well as other restricted share awards or other stock-based awards. Stock-Based Awards may be made payable in shares of common stock or cash according to the terms of the award.

However, awards need not be based on shares of Company common stock or the value thereof and may be measured and payable solely in cash (“Cash-Based Awards”). Cash-Based Awards may include long term cash incentive awards as well as other cash incentive awards.

Maximum Number of Shares. The maximum number of shares of Company common stock which may be allocated to Stock-Based Awards under the 2018 Plan is 978,878 shares, which is 50,000 fewer shares than the number of shares currently remaining available for issuance under the 2013 Plan. Of the 978,878 shares authorized under the 2018 Plan, only 350,000 are newly-authorized shares; the remaining 628,878 shares are currently authorized under the 2013 Plan but have not yet been awarded and will be rolled into the 2018 Plan if it is approved. Of these 628,878 shares, 100,000 shares may be used under the 2018 Plan only for Stock Options or other awards which require the participant to make a payment to the Company in order to receive actual shares, which are the same restrictions as they are currently subject to under the 2013 Plan. Another 400,000 shares currently authorized under the 2013 Plan and subject to the same restrictions will be de-authorized and will not be rolled over to the 2018 Plan. If any awards are made under the 2013 Plan after the date of this Proxy Statement, the maximum number of shares authorized under the 2018 Plan will be reduced by a like amount.

Source of Shares. Shares issued under the 2018 Plan may be either previously unissued shares or shares held in treasury, in the Company’s discretion.

Adjustments. The number of shares allocated to the 2018 Plan shall be appropriately adjusted to reflect any subsequent stock dividends, stock splits, reverse stock splits and similar matters affecting the overall number of the Company’s outstanding shares.

No Reload. If any Stock-Based Award expires or is cancelled on account of termination of a participant’s employment, failure to meet performance objectives or any other term of the Award, tender of the underlying shares as payment for a Stock Option, surrender of the underlying shares to pay withholding taxes, or for any other reason whatsoever, the shares related to the cancelled award shall not be returned to the 2018 Plan and may not be available for subsequent awards.

Eligibility. Eligibility to participate in the 2018 Plan varies depending on the type of award and is described in the relevant sections below. Currently, approximately 300 employees, including the executive officers, are eligible to receive Stock Options and Tandem SARs, and approximately 60 senior executives, including the executive officers, are eligible to receive PARS Awards, other Stock-Based Awards or Cash Based Awards. However, no determination has been made with respect to the specific persons who may be granted awards under the 2018 Plan or the specific amounts or types of awards which may be granted to any future recipient. Each award granted under the 2018 Plan will be evidenced by a written award agreement or notice of award specifying the terms of the award.

Subsidiary Plans. For convenience in granting, administering and referring to awards with similar terms or which are made to similarly-situated recipients, the 2018 Plan authorizes the Committee to establish subsidiary plans under the 2018 Plan (such as the PCP cash incentive plan described in the Compensation Discussion and Analysis section below, which was established under the 2013 Plan). No subsidiary plan may grant greater rights to award recipients than those authorized by the 2018 Plan, and all subsidiary plans in the aggregate may not exceed the share limitations and other restrictions under the 2018 Plan.

Recent Share Price.The closing price of the shares on the New York Stock Exchange on December 4, 2017 was $64.65 per share.

Stock-Based Awards

Stock Options and Tandem SARs. Stock Options and Tandem SARs may be granted only to full-time or part-time employees of the Company or its subsidiaries, provided that Incentive Stock Options may not be granted to employees of certain non-corporate or foreign subsidiaries. Subject to the express provisions of the 2018 Plan, the Committee has full authority to determine the terms and provisions of each Stock Option and Tandem SAR, which need not be uniform for all optionees. The Committee has not granted Stock Options or Tandem SARs for the past several years and has no current plans to issue any, but the Board has deemed it advisable to continue to authorize them under the 2018 Plan in order to provide the Committee with maximum flexibility should the need arise.

The exercise (purchase) price under each Stock Option may not be less than 100% of the fair market value of the shares at the effective date of the grant (which may not be prior to the approval date). For this purpose, fair market value will generally be the closing price of the shares on the New York Stock Exchange on the effective date; provided, that the Committee may adopt any other criterion for the determination of fair market value as it may determine to be appropriate. The Committee may not, without Shareholder approval, reprice outstanding Stock Options or Tandem SARs by lowering their exercise price or by exchanging them for new awards with a lower exercise price.

The exercise price must be paid in full upon the exercise of the Stock Option, either (i) in cash, or (ii) by the tender to the Company (either actually or by attestation) of shares owned by the optionee for at least six (6) months and having a fair market value equal to the cash exercise price of the Stock Option being exercised, with the fair market value of such shares to be determined in such appropriate manner as may be provided for by the Committee or the Company as may be required in order to comply with, or to conform to the requirements of, any laws or regulations applicable to the Company and the Stock Options, or (iii) except as limited or prohibited by the Committee or the Company, by effecting a “cashless exercise” of the Stock Option by means of a “same day sale” in which the option shares are sold through a broker selected by the optionee and a portion of the proceeds equal to the exercise price plus any taxes due is paid to the Company, or (iv) by any combination of the foregoing payment methods, or (v) by such other method or methods as may be determined by the Committee or the Company; provided, that no shares may be tendered in exercise of an Incentive Stock Option if such shares were acquired by the optionee through the exercise of an Incentive Stock Option unless (A) such shares have been held by the optionee for at least one year and (B) the prior Incentive Stock Option through which the tendered shares were acquired was granted at least two years prior to the tender.

The term of a Stock Option may not be more than five years from its effective date. Subject to the terms of the 2018 Plan and the limitations set out below, Stock Options will be exercisable on such conditions and at such time or times as the Committee in each instance approves, which need not be uniform for all options.

The maximum aggregate fair market value (determined at the time of grant) of the shares with respect to which Incentive Stock Options are exercisable for the first time by any optionee during any calendar year shall not exceed $100,000. The aggregate number of shares of Common Stock with respect to which Stock Options and Tandem SARs may be granted to any individual during any calendar year may not exceed 150,000.

At the time a Stock Option is granted, the Committee, in its discretion, may grant to an optionee a Tandem SAR with respect to all or any part of the number of shares covered by the Stock Option. An optionee who also holds a Tandem SAR may exercise the Tandem SAR in lieu of exercising the Stock Option by delivering to the Company a notice specifying the number of shares as to which the optionee wishes to exercise the Tandem SAR and stating what portion of the proceeds the optionee would like to receive in cash and what portion in shares. Upon exercise of the Tandem SAR, the optionee will be paid an amount in cash and/or shares (as determined by the Committee taking into account the optionee’s request), an amount equal to the excess of the fair market value of a share on the date of exercise over the per-share exercise price for the Stock Option in respect of which the Tandem SAR was granted, multiplied by the number of shares as to which the Tandem SAR is exercised. Each Tandem SAR will be exercisable for such period as the Committee determines, which time period may not exceed the time period during which the corresponding Stock Option may be exercised.

The exercise of a Tandem SAR will reduce the related Stock Option by the number of shares as to which the Tandem SAR is exercised; and the exercise of a Stock Option will reduce any related Tandem SAR by the number of shares as to which the Stock Option is exercised.

Stock Options and Tandem SARs will not generally be transferable except by will or the laws of descent and distribution, and may be exercised during the lifetime of the optionee only by the optionee. However, the Committee may permit a Stock Option which is not an Incentive Stock Option to be transferred to a trust for the benefit of the option holder’s immediate family member(s), or to a partnership, limited liability company or similar entity in which such immediate family member(s) comprise the majority partners or equity holders. For purposes of this provision, an option holder’s immediate family means the option holder’s spouse, children and grandchildren.

A Stock Option or Tandem SAR must be exercised prior to the termination of employment, except that: (i) if the optionee’s employment is terminated with the consent and approval of the Company, the Committee or its designee may permit the Stock Option or Tandem SAR to be exercised within 90 days after such termination, or in the case of options other than Incentive Stock Options, within one year after termination on account of retirement on or after age 55; or (ii) if the optionee’s employment terminates on account of disability the Stock Option or Tandem SAR may be exercised, to the extent it was exercisable at the date of termination, within one year after the date of termination; or (iii) in the event of the optionee’s death the Stock Option or Tandem SAR may be exercised, to the extent it was exercisable at the date of death, within one year after the date of death; but in no event may a Stock Option or Tandem SAR be exercised after the expiration of its term as specified in the Stock Option agreement or notice of award.

PARS Awards and Other Restricted Stock Awards. A PARS Award represents the right of the holder to receive a specified number of shares, or the value thereof, at a specified future time or times if specified performance objectives and/or service contingencies are achieved. The performance objectives may be established from time to time by the Committee, subject to the criteria set forth under “Performance Criteria” below, and need not be the same for all participants. Participation in a specific program and the terms of the corresponding PARS Award will be specified in a notice of award delivered to the participant at the time of the award. The Company has used this type of performance-accelerated award in recent years for its long-term equity incentive awards.

In order to receive a distribution under a PARS Award, a participant must be continuously employed by the Company or a subsidiary for such period after grant as the Committee may determine. Any acceleration of the distribution of shares under PARS Awards will be contingent upon the achievement of performance program goals established by the Committee. Each program will have one or more specified objectives and performance periods over which the objectives are targeted for achievement. However, in the event of termination of employment due to the participant’s death or disability, the Committee has the discretion to authorize a full or partial distribution; and in the event of the participant’s retirement with the Committee’s approval, any PARS Award which has been outstanding less than 12 months shall be forfeited, any other PARS Award or portion thereof which has been accelerated due to satisfaction of the performance criteria shall be distributed to the retired participant in full, and any other PARS Award or portion thereof shall be distributed to the retired participant pro rata based on the number of months elapsed prior to retirement compared to the total number of months in the Award term.

Recent awards of this type have provided for distribution of the underlying shares if the holder’s employment continues for five years after grant, with the potential for accelerated distribution (but not earlier than 3½ years from grant) if the Company’s stock price reaches certain targets set forth in the awards. For more details on the terms of recently-issued PARS Awards, see “Executive Compensation Information–Compensation Discussion and Analysis,” below.

The Committee may also grant other restricted share awards subject to either performance-based or non-performance-based vesting criteria, such as continued employment for a specified period either before or after the shares are earned. The terms and conditions of such awards, including restrictions on transfer or on the ability of the participant to make elections with respect to the taxation of the award without the consent of the Committee, shall be determined by the Committee.

The terms and conditions of PARS Awards and other restricted share awards shall be determined by the Committee. No dividend will accrue or be payable on PARS Awards or other restricted share awards until the underlying shares are actually delivered to the participant.

Other Stock-Based Awards. The Committee may from time to time, in its discretion, grant other Stock-Based Awards, including without limitation awards pursuant to which shares may be acquired in the future, such as awards denominated in shares, stock units, securities convertible into shares, and phantom securities, and may direct the Company to issue shares in respect of other Stock-Based Awards subject to restrictive legends, stop transfer instructions or other restrictions as it may deem appropriate. The Committee shall determine, and provide in the applicable agreement for, the terms and conditions of such other Stock-Based Awards.

No Voting, Dividend or Other Shareholder Rights Until Shares Actually Issued. The holder of a Stock-Based Award shall have no voting or other rights of a shareholder with respect to the shares underlying the award, including the right to dividends thereon, until the shares are actually issued to the holder.

Special Provisions for Stock-Based Awards to Named Executive Officers. The 2018 Plan requires that each Stock-Based Award granted to a person who is a “named executive officer” of the Company as defined in Item 402(a)(3) of Securities and Exchange Commission Regulation S-K (an “NEO”) must provide that, in addition to any other applicable restrictions on transfer, the NEO may not dispose of any portion of the beneficial interest in Common Stock received (net of any withheld shares) on account of the Award: (i) within 12 months after the Common Stock is delivered to the NEO, or such earlier time as the person ceases to be an NEO; or (ii) if after such disposition the NEO would fail to satisfy the NEO’s minimum ownership requirement for Company Common Stock established by the Company.

Limited Authority to Delegate. The Committee may delegate to the Chief Executive Officer the authority to grant Stock Options of up to 10,000 shares of Common Stock per person (and 50,000 per year in the aggregate) to selected employees who are not either reporting persons under Section 16 of the Exchange Act or “covered employees” as defined in section 162(m) of the Internal Revenue Code (the “Code”).The Committee may delegate to the Executive Committee of the Board the authority to grant Stock-Based Awards other than Stock Options of up to 10,000 shares of Common Stock per person (and 50,000 per year in the aggregate) to selected employees who are not either reporting persons under Section 16 of the Exchange Act or covered employees.

Cash Based Awards

The 2018 Plan permits the Committee to grant Cash-Based Awards, with the terms of each such award to be specified in the applicable award agreement or notice of award. A major part of the Company’s cash incentive program includes the grant of long term incentive awards, which provide for the payment of cash if certain performance targets are met over a specified performance period; each performance target and period must be set forth in the relative agreement, which need not be uniform for all participants. The Company has no current plans to change this program. For details of the Company’s long term cash incentive program and the recent awards thereunder, see “Executive Compensation Information–Compensation Discussion and Analysis,” below.

The Committee may permit Cash Based Awards to be paid in shares subject to restrictions to be determined by the Committee in each specific case; however, in no event may the total number of shares issued pursuant to all awards made under the 2018 Plan exceed the aggregate share limitation specified above without shareholder approval.

Performance Criteria

The Committee may determine that an award under the 2018 Plan is to be “performance based,” which means that the distribution of shares or payment of cash under the award shall be based in full or in part on the satisfaction of one or more performance criteria specified in the award.

For performance based awards to any “covered employee” as defined in Section 162(m) of the Code which are intended to qualify as “performance-based compensation” as defined in Section 162(m) of the Code (a “162(m) Award”), the performance criteria shall consist of objective tests based on one or more of the following criteria set forth in the 2018 Plan: earnings per share; adjusted earnings per share; sales; earnings; cash flow; profitability; customer satisfaction; investor relations; revenues; financial return ratios; market performance; shareholder return and/ or value; operating profits (including earnings before income taxes, depreciation and amortization); net profits; earnings per share growth; profit returns and margins; stock price; working capital; business trends; production cost; project milestones; plant and equipment performance; safety performance; environmental performance; gross margin; operating margin; net margin; expense margins; EBIT margin; EBIT growth; EBITDA margin; EBITDA growth; adjusted EBITDA; net operating profit after tax margin; gross operating profit after tax; non-interest-bearing current liabilities; net assets; working capital; asset turnover; working capital turnover; accounts receivable turnover; accounts payable turnover; inventory turnover; inventory days outstanding; accounts receivable days outstanding; accounts payable days outstanding; debt to equity; debt to capital; current ratio; return on equity; return on assets; return on net assets; return on invested capital; return on gross assets; return on tangible assets; cash flow return on investment; cash value added; price to earnings ratio; market to book ratio; market to capital ratio; cost of capital; cost of debt; cost of equity; market risk premium; stock price appreciation with or without divisions; total shareholder return; economic value added; economic profit; sales growth percentage; EPS growth percentage; cash flow growth year over year; return on total capital, or any combination of the foregoing. Performance criteria may be measured solely on a corporate, subsidiary, business unit or individual basis, or on a combination thereof. Satisfaction of common stock ownership guidelines may also be a prerequisite to payment. The performance criteria must be approved by the Company’s shareholders at least every five years.

If the applicable performance criteria under a 162(m) Award are not achieved for a given performance period, the Committee has full discretion to reduce or eliminate the amount otherwise payable for that performance period, or in the case of awards which are not 162(m) awards, to increase the amount. However, under no circumstances may the Committee use discretion to increase the amount payable to a participant under a 162(m) Award.

Change of Control

No award may permit acceleration of vesting or payment by reason of a Change of Control of the Company prior to the actual date on which the Change of Control is consummated, except as may be expressly provided in a written severance agreement with the participant approved by the Committee. Briefly summarized, “Change of Control” is defined in Section 14(k) of the 2018 Plan to include (i) a change in a majority of the members of the Board since the date of the award, other than changes approved by a majority of the incumbent Board, (ii) the acquisition of a majority of the Company’s shares or voting power by a single individual, entity or group, (iii) the sale or other disposition of all or substantially all the Company’s assets, (iv) the commencement of a shareholder-approved liquidation or dissolution of the Company, or (v) the consummation of a reorganization or business combination resulting in a change in either a majority of the Company’s shares or voting power or a majority of the Company’s Board. The foregoing summary is qualified by reference to the complete definition in Section 14(k) of the 2018 Plan attached as Appendix A to this proxy statement.

Amendment and Termination of the 2018 Plan and Outstanding Awards

Either the Board or the Committee may at any time amend or terminate the 2018 Plan; provided that no amendment may be made without the approval of the shareholders if such amendment would increase either the maximum number of shares which may be granted under the 2018 Plan or any specified limit on any particular type or types of award, or change the class of employees to whom an award may be granted, or withdraw the authority to administer the 2018 Plan from the Committee or another committee whose members satisfy the independence and other requirements of Section 162(m) and applicable SEC and New York Stock Exchange requirements. Pursuant to the listing standards of the New York Stock Exchange, certain other material revisions to the 2018 Plan may also require shareholder approval.

Subject to the specific restrictions set forth in the 2018 Plan, the Committee may change the terms of any outstanding award and shall have plenary authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to the Plan and to determine the terms and provisions of the respective Awards, provided that no amendment may reduce the rights of the recipient of the award without the recipient’s consent, and in the event of a stock dividend, stock split or reverse stock split affecting the number of shares, appropriate adjustments will be made to outstanding Awards, including but not limited to per-share based performance objectives, the number of shares awarded, and per-share option exercise prices, as in the Committee’s judgment will fairly reflect the effect of such stock dividend, stock split or reverse stock split on the interests of the recipients of awards.

Unless terminated earlier by the Board or the Committee, the 2018 Plan will terminate five years after the date it is approved by the shareholders, but awards outstanding at the termination of the 2018 Plan shall continue in accordance with their terms and shall not be affected by such termination.

Federal Income Tax Consequences of Awards

The following is a summary of the U.S. federal income tax consequences of the various Awards to the participants in the 2018 Plan and to the Company, based upon current income tax laws, regulations and rulings. Awards to participants subject to tax in non-U.S. jurisdictions may be treated differently under the tax laws of those jurisdictions.

PARS Awards. A participant will recognize ordinary income equal to the fair market value of any shares received upon vesting and distribution of a PARS Award and the Company will be entitled to a deduction of the same amount, subject to the deduction limits under Section 162(m) of the Internal Revenue Code.

Incentive Stock Options. An optionee does not realize income on the grant of an Incentive Stock Option. If an optionee exercises an Incentive Stock Option in accordance with its terms and does not dispose of the shares acquired within two years from the date of the grant of the option or within one year from the date of exercise, the optionee will not realize any ordinary income by reason of the exercise, and the employer will be allowed no deduction by reason of the grant or exercise. The optionee’s basis in the shares acquired upon exercise will be the amount of cash paid upon exercise. Provided the optionee holds the shares as a capital asset at the time of sale or other disposition of the shares, the optionee’s gain or loss, if any, recognized on the sale or other disposition will be capital gain or loss. The amount of the optionee’s gain or loss will be the difference between the amount realized on the disposition of the shares and the optionee’s basis in the shares. The excess of the fair market value of the shares at the time the Incentive Stock Option is exercised over the exercise price is tax preference income taken into account in computing the alternative minimum tax applicable to individuals.

If an optionee disposes of the shares within two years from the date of grant of the option or within one year from the date of exercise, the optionee will realize ordinary income at the time of disposition which will equal the excess, if any, of the lesser of (a) the amount realized on the disposition or (b) the fair market value of the shares on the date of exercise, over the optionee’s basis in the shares. The Company will be entitled to a deduction in an amount equal to such income. The excess, if any, of the amount realized on disposition of such shares over the fair market value of the shares on the date of exercise will be long- or short-term capital gain, depending upon the holding period of the shares, provided the optionee holds the shares as a capital asset at the time of disposition.

Stock Options Other Than Incentive Stock Options. Stock Options which do not meet the requirements for Incentive Stock Options do not qualify for the special tax treatment accorded to Incentive Stock Options under the Code. Although an optionee does not recognize income at the time of the grant of the option, the optionee will recognize ordinary income upon the exercise of the option in an amount equal to the excess of the fair market value of the shares on the date of exercise of the option over the amount of cash paid for the shares. The excess of the fair market value of the shares on the date of exercise over the exercise price is not a tax preference item.

As a result of the optionee’s exercise of such an option, the Company will be entitled to deduct as compensation an amount equal to the amount included in the optionee’s gross income. If the optionee pays all or part of the option price of such an option by surrendering already-owned shares, certain additional tax rules apply.

Tandem SARs. Although the recipient of a Tandem SAR does not recognize income at the time it is granted, the recipient will recognize income when the Tandem SAR is exercised in an amount equal to the cash and the fair market value of any shares the recipient receives. The Company will be entitled to deduct as compensation an amount equal to the income recognized by the recipient.

However, so long as sale of the shares (if any) received would subject the recipient to suit under Section 16(b) of the Securities Exchange Act of 1934, the recipient does not recognize income and no tax deduction is allowed to the Company until the earlier of the expiration of six months from the date of exercise or the date on which the Section 16(b) restriction lapses. At such time, the recipient will recognize income equal to the fair market value of the stock and the Company will be entitled to a tax deduction of a like amount. The recipient may elect to recognize income upon receipt of the stock and not at the later time, in which case the tax consequences to the recipient and the Company are the same as if the recipient were not subject to the Section 16(b) restriction.

If a Tandem SAR is paid in shares, the recipient’s basis will be equal to the amount of ordinary income recognized by the recipient in respect of such shares, and the recipient’s holding period for capital gains purposes will commence on the day such income is recognized.

Other Awards. A participant will recognize ordinary income equal to the amount of cash and the fair market value of any shares received under any other awards under the Plan and the Company will be entitled to a deduction of the same amount, subject to the deduction limits under Section 162(m) of the Internal Revenue Code. However, in the case of an award of shares subject to a substantial risk of forfeiture, the recipient does not recognize income and no tax deduction is allowed to the Company until the first time the shares received are transferable or are not subject to a substantial risk of forfeiture, whichever occurs earlier; at which time the recipient will recognize income equal to the fair market value of the stock and the Company will be entitled to a tax deduction of a like amount; but if permitted under the terms of the award, the recipient may elect to recognize income upon receipt of the shares and not at a later time, in which case the tax consequences to the recipient and the Company are the same as if the shares were transferable and not subject to a substantial risk of forfeiture.

Other Equity Compensation Plan Information

The following table summarizes certain information regarding shares of Company common stock that may be issued by the Company pursuant to its equity compensation plans existing as of September 30, 2017. It does not include any shares which may be issued under the proposed 2018 Plan:

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors recommends a vote FOR ratification of the appointment of KPMG LLP
as the Company’s independent registered public accounting firm for its 20182020 fiscal year.

The Audit and Finance Committee of the Board of Directors has appointed KPMG LLP, an independent registered public accounting firm, as independent public accountants of the Company for the fiscal year ending September 30, 2018.2020.

Although the appointment of KPMG LLP is not required to be submitted to a vote of the shareholders, the Board of Directors believes it is appropriate to request that the shareholders ratify the appointment. If the shareholders do not ratify this appointment, the Committee will investigate the reasons for the rejection and will reconsider the appointment.

KPMG LLP or its predecessor firms have served as the independent public accountants of the Company since its incorporation in 1990. A representative of KPMG LLP is expected to be present at the Meeting with the opportunity to make a statement and respond to appropriate questions from shareholders.

Information about the fiscal 20172019 audit, the Committee’s policies relating to the approval of audit and permitted non-audit services performed by KPMG LLP, and the fees paid to KPMG LLP by the Company, are set forth under “Audit-Related Matters” beginning on page 45.37. The Company’s audited financial statements are included in the 20172019 Annual Report to Shareholders.

PROPOSAL 5:3: ADVISORY VOTE ON EXECUTIVE COMPENSATION

The Board of Directors recommends a vote FOR approval of the compensation
of the Company’s executive officers as disclosed in this Proxy Statement.

Pursuant to Section 14(a) of the Securities Exchange Act of 1934, the Board of Directors is again soliciting an advisory (non-binding) shareholder vote to approve the compensation of the Company’s executive officers (also referred to herein as the “named executive officers”) as described in this Proxy Statement (commonly referred to as “Say-on-Pay”). In accordance with the results of the vote we conducted at the 2017 Annual Meeting on the frequency of Say-on-Pay votes, we plan to continue to present a Say-on-Pay vote every year. At the 20172019 Annual Meeting, over 97%94% of the shares votingrepresented and entitled to vote on the Say-on-Pay proposal were voted in support of the Company’s executive compensation program.

The Board of Directors strongly endorses the Company’s executive compensation program and recommends that the shareholders vote in favor of the following Resolution:

“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the named executive officers as disclosed in the Company’s Proxy Statement for the 20182020 Annual Meeting of Shareholders pursuant to the executive compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table, and the other related tables and narrative disclosure.”

This vote is not intended to address any specific item of compensation, but rather the overall compensation of the named executive officers as described in this Proxy Statement. Although the vote is non-binding, the Board of Directors and its Human Resources and Compensation Committee value the opinions of the shareholders, and to the extent there is a significant vote against the above resolution the Company will consider the shareholders’ concerns and the Committee will evaluate what actions (if any) may be necessary to address those concerns.

The Company’s executive compensation program is designed to attract, motivate, and retain its executive officers, who are critical to the Company’s success. The Human Resources and Compensation Committee reviews the compensation program at least annually to ensure that it achieves the desired goals of aligning the Company’s executive compensation structure with shareholders’ interests and current market practices. Based on its latest review, the Committee did not make any substantial changes to the structure of the program for fiscal 2018.2020.

The Committee believes that the program constitutes a balanced, competitive approach to compensation that supports its compensation objectives through performance based compensation that aligns the interests of executives with those of the Company’s shareholders. Below are some key features of the compensation program, which is described in detail in the Compensation Discussion and Analysis section below:

Shareholders are encouraged to review the section captioned “Executive Compensation Information” beginning on page 26.17. This section provides details about the Company’s executive compensation program as well as specific information about the compensation of the named executive officers, and includes the Compensation Discussion and Analysis, the Summary Compensation Table, and the other related tables and narrative disclosure referred to in the proposed Resolution.

OTHER MATTERS

Management is not aware of any other matters that will be presented at the Meeting. However, if any other proposal is properly presented for a vote at the Meeting, other than the election of directors and the other proposals described in this Proxy Statement, the proxy holders will vote on it in their own discretion.

REQUIRED VOTE

At the Meeting, shareholders will be entitled to cast one vote for each share held by them of record on the record date. There is no cumulative voting with respect to the election of directors.

The affirmative vote of the holders of a majority of the shares represented in person or by proxy at the Meeting and entitled to vote on the matter in question will be required to elect directors, to approve each of the individual proposals described in this Proxy Statement, other than Proposal 2), and to act on any other matters properly brought before the Meeting.

Pursuant The Company’s Corporate Governance Guidelines provide that an incumbent director who fails to Article Elevenobtain such a majority vote must promptly offer his or her resignation to the Chairman, and the remaining directors shall meet to consider whether it is in the best interests of the Company’s Charter, approval of Proposal 2 (to amendCompany to accept the Charter) will requireresignation or to permit the affirmative vote, in person or by proxy, of the holders of at least 85% of the shares outstandingincumbent to remain on the Record Date,Board for such period of time as the Board may determine or 21,960,517 shares.until a successor is elected and qualified.

Shares represented by proxies which are marked “Withhold Authority” with respect to the election of any one or more nominees for election as directors, marked “Abstain” on any one or more of the other individual proposals described in this Proxy Statement, or marked to deny discretionary authority on any other matters brought before the Meeting will be counted for the purpose of determining the number of shares represented by proxy at the Meeting; but proxies so marked will have the same effect as if the shares represented thereby were voted against such nominee or nominees, against such proposals, or against such other matters, respectively.

Under the Rules of the New York Stock Exchange, the proposal to approve the appointment of independent auditors is considered a “discretionary” item, which means that brokerage firms may vote in their discretion on this matter on behalf of clients who have not furnished voting instructions at least 10 days before the date of the meeting. In contrast, the election of directors and the advisory votes relating to executive compensationother items on the Meeting agenda are “non-discretionary” items, which means that brokerage firms that have not received voting instructions from their clients on these proposals may not vote on them. These so-called “broker non-votes” will, if the underlying shares are otherwise represented at the Meeting, be considered to be present for purposes of determining a quorum, but will be treated as not entitled to vote on such matter or matters; they will therefore not be considered in determining the number of votes necessary for approval and will have no effect on the outcome of the vote for directors or the advisory votes on executive compensation.other matters to be considered at the Meeting.ItIf your shares are held by a broker it is important that you provide voting instructions to your broker if your shares are held by a broker so that your votes are counted.

* * * * *

CORPORATE GOVERNANCE INFORMATION

BOARD OF DIRECTORS

The Board of Directors currently consists of eightnine directors, divided into three classes as nearly equal in size as practicable, with one class elected each year. Information about each of the current directors is provided under “Proposal 1: Election of Directors” beginning on page 2.

Two of the directors, Victor L. Richey and Gary E. Muenster, are members of the Company’s management. The sixseven non-management directors are Patrick M. Dewar, Vinod M. Khilnani, Leon J. Olivier, Robert J. Phillippy, Larry W. Solley, and James M. Stolze. Mr. DewarStolze and Gloria L. Valdez. Ms. Valdez was elected to the Board in November 20172019 for a term expiring in 2020,2022, at which time Mr. SolleyRichey agreed to shorten his term by a year and stand for election in 20192021 in order to more nearly equalize the number of directors in each class as required by the Company’s Bylaws. Donald J. Trauscht was also a non-management director during fiscal 2017 until his death in November 2016. There have been no other changes in the composition of the Board since the beginning of fiscal 2017.2019.

The Board of Directors has affirmatively determined that none of the non-management directors has any material relationship with the Company other than in his or her capacity as a director and shareholder, and therefore all of such directors are, and at all times during their service in fiscal 20172019 were, independent as defined under the Company’s Corporate Governance Guidelines and the listing standards of the New York Stock Exchange. See also the discussion under “Related Person Transactions and Procedures,” below. In addition, Mr. Trauscht was affirmatively determined to be independent during his service on the Board prior to his death.

The Board of Directors held five meetings during fiscal 2017.2019. All of the directors attended at least 75% of the meetings of the Board and of each of the committees on which they served which were held during their periods of service. The Company’s policy requires that all directors attend the Annual Meeting of Shareholders, except for absences due to causes beyond the reasonable control of the director. All of the directors then serving attended the 20172019 Annual Meeting, held in St. Petersburg, Florida.Denton, Texas.

Governance Policies and Management Oversight

The Board of Directors has adopted Corporate Governance Guidelines to guide its actions, as well as a Code of Business Conduct and Ethics applicable to all of the Company’s directors, officers and employees. Additionally, the Board has adopted a Code of Ethics for Senior Financial Officers applicable to the Company’s Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Controller and persons performing similar duties. These documents are posted on the Company’s web site,www.escotechnologies.com, and a copy of any of these documents is also available in print to any shareholder who requests it.

In adoptingAs permitted in the Corporate Governance Guidelines, the Board established the policyhas determined that Mr. Richey should hold the positions of both Chief Executive Officer and Chairman of the Board of Directors are to be held by the same person.Directors. Based upon its most current review of that policy,determination, the Board continues to believe that it has served the Company well. Mr. Richey has been and continues to be Chairman of the Board and Chief Executive Officer. The Board believes that Mr. Richey is a strong leader at both the Company and the Board levels, and believes that the Chief Executive Officer, whobecause he has primary responsibility for managing the day-to-day operations of the Company he is also well positioned to provide Board leadership that is aligned with shareholder interests and the needs of the Company. Furthermore, the Board believes that having one person servingMr. Richey serve as both Chairman of the Board and Chief Executive Officer enables the Company to speak with one voice, and reduces the chance of confusion about leadership roles and responsibilities.

At the same time, the Board is also very cognizant of its oversight responsibilities, and has in place structural safeguards that serve to preserve the Board’s independent oversight of management. The Board has only two management directors, with a significant majority of directors remaining independent. All of the directors are highly qualified and experienced. Additionally, all of the members of the Audit and Finance Committee, the Human Resources and Compensation Committee, and the Nominating and Corporate Governance Committee are independent directors.

Further, in view of Mr. Richey’s dual role as Chief Executive Officer and Chairman, in accordance with the Corporate Governance Guidelines the Board has appointed Mr. Stolze as Lead Director in November 2016, succeeding Mr. Trauscht, who had served in that position prior to his death.Director. The Lead Director chairs all meetings of the independent directors, which normally occur in conjunction with each Board meeting; provides regular input to the Chairman regarding the content of the agendas for meetings of the Board; advises the Chairman of the quality, quantity and timeliness of the information required by the Board to effectively and responsibly perform its oversight duties; and acts as liaison between the Board and the Chairman on sensitive issues. The Board believes that these safeguards have been and are effective in preserving the Board’s independent oversight of management.

The Board’s Role in Risk Oversight

The Company’s management is responsible for managing the Company’s risks on a day-to-day basis, and has adopted a comprehensive,an ongoing enterprise risk management process that it uses to identify and assess Company risks. Management has identified risks in four general areas: Financial and Reporting; Legal and Compliance; Operational; and Strategic. Periodically, management advises the Board and the appropriate Board committee of the risks identified; management’s assessment of those risks at the business unit and corporate levels; its plans for the management of these identified risks or the mitigation of their effects; and the results of the implementation of those plans.

While the Board as a whole has responsibility for and is involved in the oversight of management’s risk management processes, plans and controls, some of the identified risks are given further review by the Board committee most closely associated with the identified risks. For example, the Audit and Finance Committee provides additional review of the risks in the areas of accounting and auditing, liquidity, credit, tax and tax.cybersecurity. Similarly, the Human Resources and Compensation Committee provides additional review of risks in the area of compensation and benefits and human resource planning. The Nominating and Corporate Governance Committee devotes additional time to the review of risks associated with corporate governance, ethics and legal issues.

The Board’s leadership structure combines the positions of Chairman of the Board and Chief Executive Officer but includes the additional position of Lead Director, as discussed above. This structure enables one person,the Chief Executive Officer, who has intimate knowledge of management’s day-to-day risk management processes and controls, to ensure that the directors receive all of the information necessary to discharge their oversight role responsibly.responsibly, while ensuring that the independent directors maintain independence in their oversight role.

Succession Planning

The Human Resources and Compensation Committee of the Board conducts an annual review of the Company’s long-term succession plan for the CEO. Additionally the Board has adopted an emergency succession plan for the CEO in order to minimize the uncertainty associated with an emergency succession event.

Related Person Transactions and Procedures

The Company has implemented a written policy to ensure that all non-management directors meet the independence standards defined by the New York Stock Exchange and set forth in the Company’s Corporate Governance Guidelines, and to ensure that all Company transactions in which a “Related Person” has or will have a direct or indirect interest will be at arm’s length and on terms generally available to an unaffiliated third-party under the same or similar circumstances. “Related Persons” include the Company’s directors, director nominees and executive officers, holders of 5% or more of the Company’s stock, and the immediate family members of each. The policy contains procedures requiring Related Persons to notify the Company of any such transaction and for the Nominating and Corporate Governance Committee to review the material facts of the proposed transaction and determine whether to approve or disapprove the transaction. The Committee will consider whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances. If advance Committee approval is not feasible or is not obtained, the policy requires submission of the transaction to the Committee after the fact, and the Committee is empowered to approve, ratify, amend, rescind or terminate the transaction. In such event, the Committee will also request the General Counsel to evaluate the Company’s controls and procedures to ascertain whether any changes to the policy are recommended.

The Company has developed and implemented processes and controls to obtain information about Related Person transactions for the purpose of determining, based on the facts and circumstances, whether a Related Person has a direct or indirect material interest in the transaction. Pursuant to these processes and controls, all directors and executive officers must annually complete, sign and submit a Directors’ and Officers’ Questionnaire and a Conflict of Interest Questionnaire that are designed to identify Related Person transactions and both actual and potential conflicts of interest, and are required to update their responses in the event of any changes. Additionally, the holders of 5% or more of the Company’s shares (all of whom are institutional investors), are annually requested to respond to certain questions designed to identify direct or indirect material interests by such 5% or more shareholder in any transactions with the Company.

Based on its review and processes, the Company has determined that all non-management directors are independent under the independence standards defined by the New York Stock Exchange, and that except for the matters described in the following paragraph there has been no transaction since the beginning of the Company’s last fiscal year, and there is no other currently proposed transaction, in which the Company was or is to be a participant and in which any Related Person had or will have a direct or indirect material interest.

One of the Company’s directors, Leon J. Olivier, is the Executive Vice Presidentof Enterprise Energy Strategy and Business Development of Eversource Energy, which through its operating subsidiaries is a customer of the Company’s subsidiary Doble Engineering Company (“Doble”and its subsidiaries (together, “Doble”). Accordingly, the Board of Directors has affirmatively considered whether this relationship might affect Mr. Olivier’s independence as a director of the Company. The Board determined that Doble sells products and leases equipment and software to Eversource Energy, servicesrepairs and calibrates the equipment and maintains the software, and provides testing, training and consulting services to Eversource Energy, all in the ordinary course of their respective businesses; that the total amount of these transactions (including a small amount of component sales to other equipment manufacturers which sell to Eversource) was less than $1,460,000$2,094,000 during fiscal 20162018 and less than $3,629,000$3,313,000 during fiscal 20172019 (which is less than 0.6%0.4% of the Company’s 20172019 revenues and less than 0.05%0.04% of Eversource Energy’s revenues for 2016,2018, its last completed fiscal year); that Mr. Olivier was not personally involved in these transactions; and that all transactions between Doble and Eversource Energy are intended to be and have been consistent with Doble’s normal commercial terms offered to its customers. Based on its review and consideration of these facts and Mr. Olivier’s oral and written representations, the Board determined that the relationship between the Company and Eversource Energy is not material, that the relationship will not affect Mr. Olivier’s independent judgment on matters affecting the Company, and that Mr. Olivier is independent under the standards of both the New York Stock Exchange and the Company’s Corporate Governance Guidelines.

Communications with Directors

Interested parties desiring to communicate concerns regarding the Company to the Lead Director or to the non-management Directors as a group may direct correspondence to: Mr. James M. Stolze, Lead Director, ESCO Technologies Board of Directors, ESCO Technologies Inc., 9900A Clayton Road, St. Louis, MO 63124-1186. Alternatively, interested parties who wish to communicate with an individual director or any group of directors may write to such director(s) at ESCO Technologies Inc., 9900A Clayton Road, St. Louis, MO 63124-1186, Attn: Secretary. All such letters will be forwarded promptly to the relevant director(s).

COMMITTEES

The members of the Board of Directors are appointed to various committees. The standing committees of the Board are: the Executive Committee, the Audit and Finance Committee, the Nominating and Corporate Governance Committee, and the Human Resources and Compensation Committee.

Executive Committee

The Executive Committee’s function is to exercise the full authority of the Board of Directors between Board meetings, except that the Executive Committee may not take certain specified actions which the Board of Directors has reserved for action by the whole Board.

The Executive Committee met twice in fiscal 2017. During fiscal 2017, its2019. Its members wereare Mr. Richey (Chairman),(Chair) and Mr. Trauscht until his death in November 2016, and thereafter Mr. Stolze.Stolze (Lead Director).

Audit and Finance Committee

The functions of the Audit and Finance Committee are generally to assist the Board of Directors in its oversight of the Company’s financial reporting process, the Company’s compliance with legal and regulatory requirements, the qualifications, independence and performance of the Company’s independent registered public accounting firm (the “Accounting Firm”), and the performance of the Company’s internal audit function. The Committee is responsible for appointing, retaining and overseeing the Accounting Firm and its performance of the annual audit; annually evaluating the qualifications, independence and prior performance of the Accounting Firm; reviewing the scope of the Accounting Firm’s work and approving its annual audit fees and any non-audit service fees; reviewing the Company’s internal controls with the Accounting Firm and the internal audit executive; reviewing with the Accounting Firm any problems it may have encountered during the annual audit; discussing Form 10-K and 10-Q reports with management and the Accounting Firm before filing; reviewing and discussing earnings press releases; discussing with management major financial risk exposures; reviewing the annual internal audit plan and associated resource allocation; and reviewing the Company's reports to shareholders with management and the Accounting Firm and receiving certain assurances from management.

The Committee is also responsible for the Audit Committee Report required to be included in this Proxy Statement pursuant to the regulations of the Securities and Exchange Commission (“SEC”). This Report is set forth under “Audit-Related Matters” beginning on page 45.37.

The members of the Audit and Finance Committee are Mr. Dewar, (since November 2017), Mr. Khilnani, Mr. Phillippy and Mr. Stolze (Chairman)(Chair). The Board of Directors has determined that each member of the Committee is independent, is financially literate, and has accounting or related financial management expertise, as those terms are defined under the Company’s Corporate Governance Guidelines and the applicable listing standards of the New York Stock Exchange. Mr. Trauscht also served on the Committee during fiscal 2017 until his death in November 2016 and was affirmatively determined to satisfy these criteria during his term of service. In addition, the Board of Directors has determined that Mr. Stolze is an “audit committee financial expert” within the meaning of Item 407(d)(5)(ii) of SEC Regulation S-K. The Committee met four times in fiscal 2017.2019.

The Committee operates under a written charter adopted by the Board of Directors. The charter is posted on the Company’s web site,www.escotechnologies.com, under the “Corporate “Investor Center–Governance” link,tab, and a copy is available in print to any shareholder who requests it.

Nominating and Corporate Governance Committee

The functions of the Nominating and Corporate Governance Committee are generally to identify individuals qualified to become Board members and recommend them for election to the Board; to review the composition of Board committees; to develop and recommend to the Board effective corporate governance guidelines; to review the Company’s corporate governance and compliance programs; to oversee the Company’s ethics programs; to review conflicts of interest involving Related Persons, including oversight and administration of the Company’s policy on Related Person transactions; and to lead the Board in its annual review of the Board’s performance.

To be considered for nomination to the Board, candidates must be persons of the highest integrity, have extensive and varied business experience and have demonstrated their ability to interact effectively with associates and peers. They preferably will also have experience and expertise in business areas related to the Company and its technologies, industries and customers. In addition, the Committee will seek out candidates with the ability to interact constructively with the existing Board membership. These attributes will enable the Board to act in the long-term interests of the Company’s shareholders. While the Committee has not established specific minimum qualifications for candidates, it may establish specific membership criteria as appropriate from time to time if the Board determines there is a need for specific skills and industry experience.

Although the Committee does not have a formal policy on diversity, it seeks the most qualified candidates without regard to race, color, national origin, gender, religion, disability or sexual orientation. In addition,However, the Committee will seek out candidates withappreciates the abilitybenefits that diversity, including gender diversity, can bring to interact constructively with the existing Board membership to improve shareholder value.a board of directors.

The Committee may identify new candidates for nomination based on recommendations from Company management, employees, non-management directors, third party search firms, shareholders and other third parties. The Committee also has the authority to engage third party search firms to identify candidates, and it has done so from time to time. Consideration of a new candidate typically involves the Committee’s review of information pertaining to such candidate and a series of internal discussions, and may proceed to interviews with the candidate. New candidates are evaluated based on the above-described criteria in light of the specific needs of the Board and the Company at the time. Incumbent directors whose terms are set to expire are evaluated based on the above-described criteria, as well as a review of their overall past performance on the Board of Directors. The Committee has the authority to engage third party search firms to identify candidates, and in 2017 it commenced an active search for a new director and engaged the executive search and consulting firm of Heidrick & Struggles to assist the Committee in identifying and evaluating potential directors. This search resulted in the November 2017 election of Mr. Dewar as a new independent director.

The Committee will consider director candidates recommended by shareholders, and will evaluate such individuals in the same manner as other candidates proposed to the Committee. All candidates must meet the legal, regulatory and exchange requirements applicable to members of the Board of Directors. Shareholders who wish to recommend individuals for consideration as director candidates for the 20192020 Annual Meeting of Shareholders should notify the Committee no later than August 31, 20182019 in order to allow time for their recommendations to be considered by the Committee. Submissions are to be addressed to the Nominating and Corporate Governance Committee, c/o Alyson S. Barclay, Corporate Secretary, ESCO Technologies Inc., 9900A Clayton Road, St. Louis, MO 63124-1186, which submissions will then be forwarded to the Committee. The Committee is not obligated to nominate any such individual for election.

The members of the Nominating and Corporate Governance Committee are Mr. Olivier, Mr. Phillippy, and Mr. Solley (Chairman).(Chair) and Ms. Valdez. Each member has been affirmatively determined to be an independent director as defined under the Company’s Corporate Governance Guidelines and the applicable listing standards of the New York Stock Exchange. Mr. Trauscht also served on the Committee during fiscal 2017 until his death in November 2016 and was affirmatively determined to be independent during his term of service. The Committee met fourfive times in fiscal 2017.2019.

The Committee operates under a written charter adopted by the Board of Directors. The charter is posted on the Company’s web site,www.escotechnologies.com, under the “Corporate “Investor Center–Governance” link,tab, and a copy is available in print to any shareholder who requests it.

Human Resources and Compensation Committee

The functions of the Human Resources and Compensation Committee are generally to review and approve corporate goals and objectives relevant to compensation of the Chief Executive Officer; to evaluate the Chief Executive Officer’s performance in light of these goals and objectives; to determine the Chief Executive Officer’s compensation based upon the evaluation; to review and approve the compensation of senior officers and other key executives; to approve and evaluate incentive compensation plans, equity-based plans and other compensation plans; to review and approve benefit programs which go beyond the prerogatives of management, including implementation of new programs and material changes to existing programs; to review the performance and development of, and succession planning for, Company management; to assure that executive officers and other senior executives of the Company are compensated in a manner consistent with the strategy of the Company and competitive practice; and to oversee the Company’s Charitable Contributions Program.

The Committee is also responsible for reviewing and discussing with management the Company’s annual Compensation Discussion and Analysis, and recommending its inclusion in the Company’s annual proxy statement and the Company’s Form 10-K filed with the SEC. Its Report on these matters is set forth on page 26.17.

The members of the Human Resources and Compensation Committee are Mr. Khilnani (member and Chairman since November 2016)(Chair), Mr. Solley and Mr. Stolze. Each member has been affirmatively determined to be an independent director as defined under the Company’s Corporate Governance Guidelines and the applicable listing standards of the New York Stock Exchange, including its enhanced independence standards for compensation committee members. Mr. Trauscht also served on the Committee as its Chairman during fiscal 2017 until his death in November 2016 and was affirmatively determined to satisfy each of these standards during his term of service. The Committee met threefour times in fiscal 2017.2019.

The Committee operates under a written charter adopted by the Board of Directors. The charter is posted on the Company’s web site,www.escotechnologies.com, under the “Corporate “Investor Center–Governance” link,tab, and a copy is available in print to any shareholder who requests it.

Compensation Committee Interlocks and Insider Participation

The members of the Human Resources and Compensation Committee during fiscal 20172019 were Mr. Khilnani, (since November 2016), Mr. Solley Mr. Stolze, and Mr. Trauscht (until his death in November 2016).Stolze. During fiscal 2017,2019, none of these individuals (i) was an officer or employee of the Company; (ii) was formerly an officer of the Company; or (iii) had any other relationship requiring disclosure under any paragraph of Item 404 or under Item 407(e)(4) of SEC Regulation S-K. In addition, during fiscal 20172019 none of the executive officers served as a member of the board of directors or compensation committee of any entity that had one or more executive officers serving as a member of either the Company’s Board of Directors or its Human Resources and Compensation Committee.

DIRECTOR COMPENSATION

The many responsibilities and the substantial time commitment of being a director ofat a public company require that the Company provide adequate incentives forreasonable compensation to incentivize the directors’ continued performance by paying compensation commensurateand ensure their willingness to continue to serve. The Company strives to engage and retain well-qualified directors with the directors’ expertisesignificant experience at companies of similar size and duties. Directors who are employees ofcomplexity. To ensure this is achieved, the Company do not receive anyregularly reviews the compensation for service asprovided to its directors. The non-managementHuman Resources and Compensation Committee obtains competitive market and peer data and periodically retains a compensation consultant to evaluate the competitiveness of its director compensation. The Company’s non-employee directors are compensated pursuant to the Company’s Compensation Plan for Non-Employee Directors based upon their respective levels of Board participation and responsibilities, including service on Board committees. Directors who are employees of the Company do not receive compensation for their service as directors.

CashCompensation Components. Since the beginning of calendar year 2018 cash compensation paid to non-management directors in 2017has consisted of:of an annual cash retainer of $32,500;$50,000 for all Board and Committee member services during the year; plus additional annual cash retainers for the Lead Director and the ChairmenChairs of the Audit and Finance Committee, the Nominating and Corporate Governance Committee and the Human Resources and Compensation Committee of $25,000, $7,000, $5,000 and $5,000, respectively; andrespectively. These annual fees for meetingscash retainers are paid in early January.

In addition, each non-management director receives an annual stock award, distributed on the first business day of January, of a number of shares equal to $180,000 divided by the NYSE closing price of the Boardcommon stock on the distribution date, rounded to the nearest whole share. The annual stock retainer for 2019 was distributed on January 2, 2019 and is included in the directors’ stock compensation for fiscal 2019; based on the January 2, 2019 NYSE closing stock price of Directors, the Audit and Finance Committee, the Nominating and Corporate Governance Committee and$64.81 it amounted to 2,777 shares per non-management director.

At its August 2019 meeting, the Human Resources and Compensation Committee of $6,500, $6,000, $6,000reviewed the directors’ annual compensation plan and $6,000, respectively. The above-mentioned cash retainers and feesdetermined that the directors were for calendar year 2017 andappropriately compensated; therefore, no changes were paid in January 2017. In addition, each non-management director received a retainer of 900 shares of Company common stock at the beginning of each calendar quarter. Beginning with calendar year 2018 the timing and amount of the compensation paidmade to the non-management directors will change, as described under “Changesdirectors’ compensation for 2018” below.2020.

Election to Defer Compensation.The Compensation Plan for Non-Employee Directors permits directors to elect to defer receipt of all of their cash compensation and/or all of their quarterly stock retainer.compensation. If deferral is elected, the deferred amounts are credited to the director’s deferred compensation account in common stock equivalents. If cash compensation is deferred, the number of common stock equivalents credited is equal to the amount deferred divided by the NYSE closing price of the common stock as of the first day of the calendar quarter indate on which the deferral occurs (or if that is not a trading day, then the last preceding trading day). If the quarterly stock retainercompensation is deferred, the number of common stock equivalents credited is equal to the number of shares deferred. Common stock equivalents in the director’s deferred compensation account have no voting rights, but earn dividend equivalents on each dividend payment date equal to the dividends payable on a like number of shares of common stock; and the dividend equivalents earned are credited to the director’s deferred compensation account as additional common stock equivalents valued at the NYSE closing price on the dividend date. A director’s deferred compensation account becomes distributable when the director leaves the Board, or at such other date as may be specified by the director consistent with the terms of the Plan; distribution will be accelerated in certain circumstances, including a change in control of the Company. The account is distributable at the election of the director either in cash or in shares; however, any stock portion which has been deferred may only be distributed in shares. During fiscal 2017,2019, Mr. Dewar and Mr. Olivier deferred receipt of histheir cash compensation and quarterly stock compensation, and Mr. Phillippy deferred receipt of only his quarterly stock compensation, as described in the footnotes to the Table below. In addition, Mr. Stolze’s quarterly stock compensation from certain prior years continuescontinued to be deferred pursuant to a prior deferral election which he subsequently terminated.terminated as to future compensation.

Director Stock Ownership Guidelines.Directors are subject to stock ownership guidelines. Under these guidelines, within five years after their appointment to the Board each non-management director is expected to acquire and hold shares or common stock equivalents having a total cash value equal to five times the annual cash retainer. All directors currently hold more than that amount except Mr. Dewar,Ms. Valdez, who was elected in November 20172019 and is expected to meet the guidelines within the five yearfive-year period.

Extended Compensation Plan for Certain Directors.Under the Company’s Directors’ Extended Compensation Plan, a plan for non-management directors who began Board service prior to April 2001, Mr. Solley and Mr. Stolze are each eligible to receive for life an annual benefit of $20,000 beginning after he ceases to servetheir service as a director.director ceases. In the event of the death of a retired director who is eligible under this plan, 50% of the benefit will be paid to the surviving spouse for life; if an eligible director dies before retirement, 50% of the benefit, determined as if the director had retired on the date of death, will be paid to the surviving spouse in a lump sum; under this provision, Mr. Trauscht’s widow received a lump sum payment in January 2017 as set forth in the table below.sum.. The plan permits an eligible director to elect to receive the actuarial equivalent of the benefit in a single lump sum after retirement; and in compliance with section 409(a) of the Internal Revenue Code, Mr. Solley and Mr. Stolze have each made this election.

Fiscal 2019 Compensation.The following table sets forth the compensation of the Company’s non-management directors for fiscal 2017.2019. Mr. Richey and Mr. Muenster are executive officers and did not receive any additional compensation for their service as directors; their compensation is set forth in the section captioned“Executive Compensation Information” beginning on page 26.17.