PRELIMINARY COPY
ESPEY MFG. & ELECTRONICS CORP.
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 12, 2004
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October 12, 2004
To the Shareholders of
ESPEY MFG. & ELECTRONICS CORP.:
You are cordially invited to attend the Annual Meeting of Shareholders of
Espey Mfg. & Electronics Corp., which will be held at the Holiday Inn, 232
Broadway, Saratoga Springs, New York, on November 12, 2004, at 10:00 a.m.,
Eastern Standard Time, for the following purposes:
1. To elect two Class B Directors to serve for a three year term or
until their respective successors are duly elected and qualify; and
2. To vote on the approval of an Amendment to the Company's Certificate
of Incorporation, as amended, to change the number of members of the
Board of Directors from nine to a number not less than three, nor
more than nine; and
3. To ratify the appointment of KPMG LLP as the Company's independent
public accountants for the fiscal year ending June 30, 2005.
No other business may be transacted at the meeting.
The Board of Directors has fixed the close of business on October 5, 2004,
as the record date for the purpose of determining shareholders entitled to
notice of, and to vote at, said meeting or any adjournment thereof. The books
for transfer of the Company's capital stock will not be closed.
Even if you expect to attend the meeting in person, it is urged by the
Company that you mark, sign, date and return the enclosed proxy. The proxy may
be revoked at any time before it is voted and shareholders who execute proxies
may nevertheless attend the meeting and vote their shares in person. Every
properly signed proxy will be voted as specified unless previously revoked.
By Order of the Board of Directors,
PEGGY A. MURPHY
Corporate Secretary
Please make your specification and sign and date the enclosed proxy and
mail it promptly in the accompanying pre-addressed, postage-free envelop.
[LOGO OF ESPEY]
An ISO Certified Company
ESPEY MFG. & ELECTRONICS CORP.
233 Ballston Avenue
Saratoga Springs, New York 12866
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of Espey Mfg. &
Electronics Corp. (the "Company") for use in voting at the Annual Meeting of the
Shareholders of the Company to be held at the Holiday Inn, 232 Broadway,
Saratoga Springs, New York, on November 12, 2004, at 10:00 a.m., Eastern
Standard Time, and at any postponement or adjournment thereof, for the purposes
set forth in the attached Notice of Meeting. It is anticipated that the Notice
of Annual Meeting of Shareholders, this Proxy Statement and the form of proxy
will be mailed on or about October 12, 2004.
Voting and Revocability of Proxies
Every properly dated, executed and returned proxy will be voted at the
Annual Meeting in accordance with the instructions of the shareholder. If no
specific instructions are given, the shares represented by such proxy will be
voted for the election of Class B Directors nominated by the Board of Directors.
Any shareholder giving a proxy has the power to revoke it at any time prior to
the voting thereof by voting in person at the Annual Meeting, by giving written
notice to the Secretary prior to the Annual Meeting, or by signing and
delivering a new proxy card bearing a later date.
The Company's only class of voting securities is its Common Stock, par
value $.33-1/3 per share (the "Common Stock"). Each share of Common Stock
outstanding on the record date will be entitled to one vote on all matters. In
accordance with the Company's By-Laws and applicable state law, the election of
directors will be determined by a plurality of the votes cast by the holders of
shares of Common Stock present and entitled to vote thereon, in person or by
proxy, at the Annual Meeting. Shares present which are properly withheld as to
voting with respect to any one or more nominees, and shares present with respect
to which a broker indicates that it does not have authority to vote ("broker
non-vote") will not be counted. Cumulative voting in connection with the
election of directors is not permitted. In accordance with the Company's By-Laws
and applicable state law, the affirmative vote of shares representing a majority
of all outstanding shares entitled to vote thereon at a meeting of shareholders
is required to approve the Amendment to the Company's Certificate of
Incorporation and the affirmative vote of shares representing a majority of the
votes cast by the holders of shares present and entitled to vote is required to
approve the other matters to be voted on at the Annual Meeting. Shares, which
are voted to abstain and broker non-votes, are not counted as votes cast on any
matter to which they relate.
The By-Laws of the Company provide that the majority of the shares of the
Common Stock of the Company issued and outstanding and entitled to vote, present
in person or by proxy, shall constitute a quorum at the Annual Meeting. Shares,
which are voted to abstain, are considered as present at the Annual Meeting for
the purposes of determining a quorum. Broker non-votes are considered as not
present at the Annual Meeting for the purposes of determining a quorum.
Record Date and Share Ownership
Only holders of Common Stock of record on the books of the Company at the
close of business on October 5, 2004 will be entitled to vote at the meeting.
There were outstanding and entitled to vote on October 5, 2004, 1,010,804 shares
of Common Stock.
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation, as amended, provides that the
Board of Directors shall consist of three classes of directors (Class A, Class B
and Class C) with overlapping three-year terms. One class of directors is to be
elected each year for a term extending to the third succeeding Annual Meeting
after such election or until their respective successors are duly elected and
qualify. The terms of the two Class B Directors expire at the current Annual
Meeting. The Board of Directors has nominated two persons to stand for election
as Class B Directors.
The votes will be cast pursuant to the enclosed proxy for the election of
each of the Class B nominees named below unless specification is made
withholding such authority. Each of the nominees is presently a director of the
Company. Should any of said nominees for Class B Directors become unavailable,
which is not anticipated, the proxies named in the enclosed proxy will vote for
the election of such other persons as the Board of Directors may recommend.
Proxies may not be voted for a greater number of persons than the nominees
named.
1
Currently, the Company's Certificate of Incorporation, as amended, states
that the Company shall have nine Directors serve on its Board of Directors. In
the event the shareholders elect the two nominees named herein, the Company will
have eight members serving on its Board of Directors. As is stated in the
attached Notice of Meeting, the Company has included an amendment to the
Certificate of Incorporation as an additional item to be voted upon by the
Company shareholders at the Annual Meeting. If approved, the amendment would
permit the Company to have no less than three and no more than nine members
serving on the Board of Directors.
The names and business experience for the past five years of the two
persons who have been nominated by the Board of Directors to stand for election
as Class B Directors at the Annual Meeting and the remaining directors whose
terms are continuing until the 2005 or 2006 Annual Meeting appear below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE FOLLOWING
NOMINEES FOR CLASS B DIRECTORS.
NOMINEES FOR CLASS B DIRECTORS -- SERVING FOR
A THREE YEAR TERM EXPIRING AT THE 2007 ANNUAL MEETING
Period to
Offices and Date
Positions Held Served as
Name Age with Company Principal Occupation or Employment Director
---- --- ------------ ---------------------------------- --------
William P. Greene ......... 74 -- Mr. Greene was Vice President of Operations 1992
from March 1, 1999, and resigned as an
executive officer effective December 31,
2000. Prior to joining the Company, he was
Vice President of Finance for ComCierge,
LLC, San Diego, CA, since August 1997.
Prior to that position, he was Vice
President of Operations for Bulk Materials
International Co., Newton, CT, from 1993 to
July 1997. From 1991 to 1993, Mr. Greene
was Associate Professor of Finance and
International Business, Pennsylvania State
University in Kutztown, PA. From 1985 to
1990, he was Associate Dean of the School
of Business, United States International
University, San Diego, CA. From 1992 to
1995, he was Chairman of the Department of
Business, Skidmore College, Saratoga
Springs, NY. Prior to that he had been
employed as an officer for several
financial institutions.
Seymour Saslow ............ 83 -- Mr. Saslow was Senior Vice President since 1992
December 6, 1996, and resigned as an
executive officer effective December 31,
1999. Prior to being elected to Senior Vice
President, Mr. Saslow served as Vice
President- Engineering since April 3, 1992.
CLASS C DIRECTORS -- SERVING FOR A
THREE YEAR TERM EXPIRING AT THE 2005 ANNUAL MEETING
Period to
Offices and Date
Positions Held Served as
Name Age with Company Principal Occupation or Employment Director
---- --- ------------ ---------------------------------- --------
Paul J. Corr .............. 60 -- Certified Public Accountant and a Professor 1992
of Business, Skidmore College, in Saratoga
Springs, NY, since 1981, currently holding
the position of Associate Professor; Mr.
Corr is also a shareholder in the Latham,
New York accounting firm of Rutnik, Matt &
Corr, P.C. and a principal in Capital
Financial Advisors, LLC since 2003.
2
CLASS C DIRECTORS -- SERVING FOR A
THREE YEAR TERM EXPIRING AT THE 2005 ANNUAL MEETING (continued)
Period to
Offices and Date
Positions Held Served as
Name Age with Company Principal Occupation or Employment Director
---- --- ------------ ---------------------------------- --------
Barry Pinsley (1) ......... 62 Non-Executive Officer Certified Public Accountant who for five 1994
years acted as a consultant to the
Company prior to his election as a Vice
President- Special Projects on March 25,
1994. On December 6, 1997, Mr. Pinsley
was elected to the position of Vice
President-Investor Relations and Human
Resources, from which he resigned on June
9, 1998. Mr. Pinsley has been a
practicing Certified Public Accountant in
Saratoga Springs, New York since 1975,
and is currently semi-retired.
Michael W. Wool ........... 58 -- Attorney engaged in private practice 1990
of law and Senior Partner since 1982 in
the law firm of Langrock, Sperry & Wool,
with offices in Burlington, VT and
Middlebury, VT. Mr. Wool also serves on
the board of the New England Board of
Higher Education and the Burlington Boys
and Girls Club.
CLASS A DIRECTORS -- SERVING FOR A
THREE YEAR TERM EXPIRING AT THE 2006 ANNUAL MEETING
Period to
Offices and Date
Positions Held Served as
Name Age with Company Principal Occupation or Employment Director
---- --- ------------ ---------------------------------- --------
Howard Pinsley (1) ........ 64 President, Chief Howard Pinsley for more than the past five 1992
Executive Officer years has been employed by the Company on
and Chairman of a full-time basis as Program Director
the Board prior to being elected Vice President-
Special Power Supplies on April 3, 1992.
On December 6, 1996, Mr. Pinsley was
elected to the position of Executive Vice
President. On June 9, 1998 he was elected
to the positions of President and Chief
Operating Officer. Subsequently he became
Chief Executive Officer and Chairman of
the Board.
Alvin O. Sabo ............. 61 -- Attorney engaged in private practice of law 1999
and Senior Partner of the law firm of
Donohue, Sabo, Varley & Armstrong, P.C.
in Albany, NY since 1980. Prior to that
position, he was Assistant Attorney
General, State of New York, Department of
Law for eleven years.
Carl Helmetag ............. 56 -- President and CEO of UVEX Inc. in 1999
Providence, RI. From 1996 to 1999, he was
President and CEO of HEAD USA Inc. Prior
to that position, Mr. Helmetag was
Executive Vice President and then
President at Dynastar Inc. from 1978 to
1996. He is an MBA graduate from The
Wharton School of Business, University of
Pennsylvania.
3
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(1) Barry Pinsley and Howard Pinsley are cousins.
Howard Pinsley serves as a director of All American Semiconductor, Inc.
None of the other directors holds a directorship in any other company with a
class of securities registered pursuant to Section 12 of the Securities Exchange
Act of 1934 or subject to the requirements of Section 15(d) of the Securities
Act of 1933 or any company registered as an Investment Company under the
Investment Company Act of 1940.
The only individuals currently considered executive officers of the
Company not identified above are:
Garry M. Jones, 63, Assistant Treasurer and Principal Accounting Officer
of the Company since August 4, 1988. He was also the Principal Financial Officer
from August 4, 1988 to September 10, 1993. Prior to being elected an officer of
the Company, Mr. Jones was employed by the Company on a full-time basis as a
Senior Accountant.
John J. Pompay, Jr. for more than the past five years has been employed by
the Company on a full-time basis as Vice President-Marketing and Sales since
December 6, 1996. Effective April 5, 2004, Mr. Pompay retired as an executive
officer.
Peggy Murphy, 45, Secretary of the Company since December 11, 1998. She
has been employed by the Company as Director of Human Resources since October
1998.
David A. O'Neil, 38, Treasurer and Principal Financial Officer since
January 4, 2000. Mr. O'Neil is a Certified Public Accountant who, prior to
joining the Company, was a Senior Manager at the accounting firm of KPMG LLP.
Timothy A. Polidore is currently the Assistant Treasurer of the Company.
Mr. Polidore joined the Company on May 17, 1999. Prior to joining the Company he
was Accounting Manager for Brinks, Inc. Effective August 6, 2004, Mr. Polidore
resigned.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
During the Company's fiscal year ended June 30, 2004, the Board of
Directors held a total of 10 meetings, and each director then in office attended
at least 75% of such meetings. Under the policies of the Board, Directors are
expected to attend regular Board meetings, Board committee meetings and annual
stockholder meetings. All of the Company's directors attended the 2003 Annual
Meeting.
The Board has a standing Audit Committee whose members are Paul J. Corr,
Chairman, Alvin O. Sabo and Carl Helmetag. The functions of this Committee
include reviewing the engagement of the independent accountants, the scope and
timing of the audit and any non-audit services to be rendered by the independent
accountants, reviewing with the independent accountants and management the
Company's policies and procedures with respect to internal auditing, accounting
and financial controls, and reviewing the report of the independent accountants
upon completion of its audit. During the fiscal year ended June 30, 2004, the
Audit Committee held 5 meetings, and each Committee member attended at least 75%
of such meetings.
The Board has a standing Nominating Committee whose members are Carl
Helmetag, Chairman, Michael Wool, and Paul J.Corr. The function of this
Committee is to identify and recommend to the Board individuals for nomination
to fill vacancies in, and for renomination to, positions as Directors of the
Corporation. During fiscal year ended June 30, 2004, the Nominatiang Committee
held 2 meetings and each committee member attended at least 75% of such
meetings.
All of the members of the Audit Committee and the Nominating Committee
meet the independence criteria for audit committee and nominating committee
members as set forth the in the listing standards of the American Stock
Exchange.
The Board has a standing Stock Option Committee whose members are William
P. Greene, Chairman, Howard Pinsley, and Barry Pinsley. The functions of this
Committee include determining to whom, and the time or times at which, options
will be granted, the number of shares of common stock that comprise each option
and the exercise price and vesting schedule for options granted pursuant to the
Company's 2000 Stock Option Plan. During the fiscal year ended June 30, 2004,
the Stock Option Committee did not meet and no options were granted.
COMPENSATION OF DIRECTORS
The Company's standard arrangement compensates each director of the
Company an annual fee in the amount of $15,000 for being a member of the Board
of Directors. Each Director that also serves as a member of the Audit Committee
is compensated an additional annual fee of $5,000. Each director that serves as
a member of the Succession Committee or the Mergers and Acquisition Committee is
compensated an additional $2,500 for each committee. These fees are paid monthly
to the Directors. No other Committee members receive additional compensation.
Executive officers that also serve on the Company's Board of Directors do not
receive director's fees.
4
Directors are also eligible to receive stock options under the 2000 Stock
Option Plan at the discretion of the Stock Option Committee. For the year ended
June 30, 2004, no options were granted and the following options remain granted
and unexercised by the Directors in accordance with the 2000 Stock Option Plan.
Name Number of Options Exercise Price Range
---- ----------------- --------------------
Seymour Saslow 1,500 $17.95 - 19.85
Barry Pinsley 1,500 13.25 - 19.85
Michael W. Wool 1,500 17.95 - 19.85
William P. Greene 900 17.95 - 19.85
Paul J. Corr 1,600 13.25 - 19.85
Alvin O. Sabo 1,400 13.25 - 19.85
Carl Helmetag 800 13.25 - 19.85
Howard Pinsley 6,000 17.95 - 19.85
In accordance with the 2000 Stock Option Plan the above options have exercise
dates that range from March 1, 2002 through and expiring on March 4, 2013.
COMPENSATION OF EXECUTIVE OFFICERS
The following table summarizes the annual compensation for each of the
fiscal years ended June 30, 2004, June 30, 2003, and June 30, 2002 received by
the Company's Chief Executive Officer (or acting in a similar capacity) and the
other highest paid executive officers of the Company that received over $100,000
in total compensation as of June 30, 2004.
SUMMARY COMPENSATION TABLE
Long Term
Compensation
------------
Securities
Name and Annual Compensation Underlying All Other
Principal Position Fiscal Year Salary Bonus Options Compensation(1)
------------------ ----------- ------ ----- ------- ---------------
Howard Pinsley 2004 $190,120 $20,000 0 $ 34,826
President and 2003 $180,404 $12,500 2,000 $ 19,109
Chief Executive Officer 2002 $173,120 $25,000 2,000 $ 11,841
John J. Pompay, Jr.(2) 2004 $165,622 $25,000 0 $ 34,733
Vice President-Sales 2003 $160,554 $25,000 800 $ 19,244
2002 $154,340 $25,000 800 $ 12,134
David A. O'Neil 2004 $112,250 $12,500 0 $ 13,101
Treasurer and Principal 2003 $105,490 $10,000 800 $ 10,738
Financial Officer 2002 $ 99,950 $12,500 800 $ 9,899
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(1) Represents (a) the cash and market value of the shares allocated for the
respective fiscal years under the Company's ESOP to the extent to which
each named executive officer is vested, and (b) the Company's matching
contribution under the 401K plan.
(2) Mr. Pompay retired, effective April 5, 2004, as an executive officer.
OPTION GRANTS IN LAST FISCAL YEAR
There were no options granted during the year ended June 30, 2004.
5
The following table sets forth information concerning unexercised options
held on June 30, 2004 by the named executive officers:
AGGREGATED OPTIONS AT FISCAL YEAR-END AND FISCAL YEAR-END OPTION VALUES
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money
Acquired Options at Options at
On Value Fiscal Year-End () Fiscal Year-End ($)
Name Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable)
---- -------- -------- ------------------------- --------------------------
Howard Pinsley 0 0 4,000/2,000 15,800/8,700
John J. Pompay Jr.* 0 0 800/800 2,400/3,480
David A. O'Neil 0 0 800/800 2,400/3,480
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*Mr. Pompay retired, effective April 5, 2004, as an executive officer.
In accordance with the 2000 Stock Option Plan, the above options have exercise
dates that range from March 4, 2002 through and expiring on March 4, 2013.
Insurance
The executive officers and directors of the Company can elect to be
covered under the company-sponsored health plans, which do not discriminate in
favor of the officers, or directors of the Company and which are available
generally to all employees. In addition, the executive officers are covered
under a group life plan, which does not discriminate, and is available to all
employees.
The Company maintains insurance coverage, as authorized by Section 726 of
the New York Business Corporation Law, providing for (a) reimbursement of the
Company for payments it makes to indemnify officers and directors of the
Company, and (b) payment on behalf of officers and directors of the Company for
losses, costs and expenses incurred by such individuals in any actions.
Employment Contracts and Termination of Employment
The Company has an employment contract with John J. Pompay Jr. in
connection with his duties as Vice President-Marketing and Sales. The contract
was effective as of January 1, 2003, and allowed, on April 5, 2004, Mr. Pompay
to voluntarily resign as Vice President of Marketing and Sales and accept an
option under the contract as a non-executive officer in which he will receive
full benefits plus full compensation for 13 weeks and then for the next 143
weeks receive $1,000 per week for services to be rendered. This contract expires
on April 5, 2007.
The Company entered into an agreement with Howard Pinsley, President and
CEO effective July 1, 2002. The contract allows Mr. Pinsley upon his resignation
or termination to become a non-executive officer of the Company for a period of
thirty-six months. In consideration for services to be provided by Mr. Pinsley
for the equivalent of two days a month after his resignation or termination, and
to perform duties as reasonably requested by the Company, he will receive full
benefits plus $15,000 per month for the first three months, and $4,333 per month
for the next thirty-three consecutive months. This ageement expires on December
31, 2005.
AUDIT COMMITTEE REPORT
The Audit Committee of which the Board of Directors (the "Committee") is
comprised of three independent directors and operates under a written charter,
which is attached as Exhibit A to this Proxy Statement.
In fulfilling its responsibilities, the Committee has reviewed and
discussed the Company's audited consolidated financial statements for the fiscal
year ended June 30, 2004 with management and the independent auditors.
The Committee has discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61,
Communication with Audit Committees. In addition, the Committee has received and
reviewed the written disclosures and the letter from the independent auditors
required by Independence Standard No.1, Independence Discussions with Audit
Committees, and has discussed with the auditors the auditors' independence.
The Committee considered and concluded that the provision of non-audit
services by the independent auditors was compatible with maintaining their
independence.
6
In reliance on the reviews and discussions referred to above, the
Committee recommended to the Board of Directors that the audited consolidated
financial statements referred to above be included in the Company's Annual
Report on Form 10-K for the fiscal year ended June 30, 2004.
Audit Committee:
Paul J. Corr, Chairman
Carl Helmetag
Alvin O. Sabo
NOMINATING COMMITTEE
The Nominating Committee of the Board of Directors (the "Nominating
Committee") is comprise of three independent directors and operates under a
written charter, which is attached as Exhibit B to this Proxy Statement.
The Nominating Committee will review the present needs of the Board and
establish criteria as to particular qualifications in terms of background and
experience that could meet such needs. At a minimum, the Nominating Committee
believes that nominees for Directors should have either experience in the
industry in which the Corporation engages or professional, business or academic
qualifications that differ from existing members of the Board and could augment
the aggregate expertise possessed by Board members. The Company further believes
that all nominees should be able to make a contribution to the Board that will
enhance the development and growth of the Corporation's business and stockholder
value; devote adequate time to service as a Director; and work well with other
Board members in a collegial manner.
The Nominating Committee evaluates prospective nominees identified on its
own initiative or referred to it by other Board members, management,
stockholders or external sources and all self nominated candidates. The
Nominating Committee uses the same criteria for evaluating candidates nominated
by stockholders and self nominated as it does for those proposed by other Board
members, management an search companies.
The Nominating Committee will consider bona fide recommendations by
stockholders as to potential Director nominees, who meet the above standards. A
stockholder wishing to submit such a recommendation should send a letter,
postmarked no later than 120 days prior to the date on which the Corporation's
annual meeting was held during the prior year, to the Secretary of the
Corporation. The letter must identify its writer as a stockholder of the
Company, provide evidence of the writer's stock ownership and provide:
o The name, address, telephone number and social security number of
the candidate to be considered;
o A description of understandings, contractual, business or familial
relationships between the stockholder and the candidate, if any, and
an unexecuted written consent of the candidate to serve as a
director of the Company, if nominated and elected;
o The candidate's resume and at least three references;
o A statement of the candidate's qualifications to serve on the Board
of Directors and specified Board committees which shall include an
explanation as to how elements of the candidate's background and
experience would be a benefit to the Corporation and its business.
All candidates recommended to the Nominating Committee must meet the
independence standards of the American Stock Exchange and the definition of
"independent director" in the Corporation's by-laws.
All nominees for election at this Annual Meeting were previously elected
by the stockholders.
SHAREHOLDER COMMUNICATIONS WITH THE BOARD
Mail can be addressed to Directors in care of the Office of the Secretary,
Espey Mfg. & Electronics Corp. 233 Ballston Avenue, Saratoga Springs, New York
12866. At the direction of the Board of Directors, all mail received will be
opened and screened for security purposes. The mail will then be logged in. All
mail, other than trivial or obscene items, will be forwarded. Trivial items will
be delivered to the Directors at the next scheduled Board meeting. Mail
addressed to a particular Director will be forwarded or delivered to that
Director. Mail addressed to "Outside Directors" or "Non-Management Directors"
will be forwarded or delivered to the Chairman of the Audit Committee. Mail
addressed to the "Board of Directors" will be forwarded or delivered to the
Chairman of the Board.
7
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information regarding ownership of the
Company's outstanding Common Stock as of September 14, 2004, by each person or
group who is known to the Company to be the beneficial owner of more than five
percent of the outstanding shares of Common Stock.
Title Name and Address of Amount and Nature Percent
Class Beneficial Owner of Beneficial Ownership of Class
----- ---------------- ----------------------- --------
Common Stock Franklin Advisory Services, LLC 78,000 - Direct (1) 7.70%
777 Mariners Island Blvd
P.O. Box 7777 San Mateo, CA 94403-7777
Common Stock The Adirondack Trust Company, 236,735 - Direct (2) 23.42%
as Trustee of the Company's Employee
Retirement Plan and Trust
473 Broadway
Saratoga Springs, NY 12866
Common Stock Advisory Research, Inc. 70,700 - Direct (3) 7.00%
180 North Stetson St.
Suite 5780
Chicago, IL 60601
Common Stock Howard Pinsley, 46,634-Direct (4) 5.65%
233 Ballston Avenue 10,712-Indirect (4)
Saratoga Springs, NY 12866
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(1) The information as to the number of shares of Common Stock and the percent
of class ownership of the Company that may be deemed beneficially owned by
Franklin Advisory Services, LLC ("Franklin") is from the Schedule 13G,
dated February 4, 2004 filed with the Securities and Exchange Commission
(the "SEC"). The Franklin statement indicated that Franklin's investment
"advisory subsidiaries," have sole voting and dispositive power with
respect to all of the shares of Common Stock shown in the table above for
Franklin. The Franklin statement indicates that the Common Stock set forth
in the table is beneficially owned by one or more open or closed-end
investment companies or other managed accounts which are advised by direct
and indirect Franklin investment advisory subsidiaries. The statement also
indicated that it filed the Schedule 13G on behalf of itself and
Franklin's principal shareholders, Charles B. Johnson and Rupert H.
Johnson, Jr. (the "Principal Shareholders"), all of which are deemed
beneficial owners of the shares of Common Stock shown in the above table
for Franklin. Franklin and the Principal Shareholders disclaim any
economic interest or beneficial ownership in any of the Common Stock shown
in the table for Franklin.
(2) The information as to the number of shares of Common Stock of the Company
that may be deemed beneficially owned by The Adirondack Trust is from the
Form 4 dated August 26, 2004 filed with the SEC by the Trustee on behalf
of the Company's ESOP. The ESOP Trustee has sole voting power with respect
to unallocated common shares owned by the Trust, as directed by the ESOP
Committee appointed by the Company's Board of Directors. As to the common
shares allocated to participants, 236,735 shares as of August 26, 2004,
the ESOP Trustee has the power to vote such shares as directed by such
ESOP Committee to the extent the participants do not direct the manner in
which such shares are to be voted.
(3) The information as to the number of shares of Common Stock and the percent
of class ownership of the Company that may be deemed beneficially owned by
advisory clients of Advisory Research, Inc. ("Advisory") is from the
Schedule 13G dated February 12, 2004 filed with the SEC. Advisory, a
registered investment advisor, is deemed to have beneficial ownership of
70,700 shares of the Company's Common Stock as of February 12, 2004, all
of which shares are held in Advisory investment companies, trusts and
accounts. Advisory, in its role as investment advisor and/or manager,
reported sole voting power with respect to 70,700 shares.
(4) This information is from Form 4 dated July 29, 2004. Indirect shares
represent stock being held in the Company ESOP. Direct shares include
options to acquire 4,000 shares of Common Stock which are exercisable
within 60 days.
8
SECURITY OWNERSHIP OF MANAGEMENT
The following information is furnished as of September 14, 2004 (unless
otherwise indicated), as to each class of equity securities of the Company
beneficially owned by all Directors and Executive Officers and by Directors and
Executive Officers of the Company as a Group:
Title Name and Address of Amount and Nature Percent
Class Beneficial Owner of Beneficial Ownership of Class
----- ---------------- ----------------------- --------
Common Stock Paul J. Corr .................... 2,000-Direct (1) *
Common Stock William P. Greene ............... 100-Direct *
Common Stock Carl Helmetag ................... 3,400-Direct (1) *
500-Indirect (2)
Common Stock Garry M. Jones .................. 400-Direct (1) *
4,923-Indirect (3)
Common Stock Peggy Murphy .................... 600-Direct (1) *
3,644-Indirect (3)
Common Stock David A. O'Neil ................. 3,200-Direct (1) *
2,382-Indirect (3)
Common Stock Barry Pinsley ................... 34,830-Direct (1) 3.78%
3,370-Indirect (3,4)
Common Stock Howard Pinsley .................. 46,634-Direct (1) 5.65%
10,712-Indirect (3)
Common Stock Alvin O. Sabo ................... 1,100-Direct (1) *
Common Stock Seymour Saslow .................. 8,559-Direct (1) *
Common Stock Michael W. Wool ................. 1,100-Direct (1) *
Common Stock Officers and Directors .......... 102,523-Direct (1) 10.14%
as a Group (13 persons) 26,614-Indirect (2,3,4)
----------
* Less than one percent
(1) Direct shares include options to acquire shares which are exercisable
within 60 days as follows:
Name of Exercisable Name of Exercisable
Beneficial Owner Options Beneficial Owner Options
---------------- ----------- ---------------- -----------
Paul J. Corr 1,000 William P. Greene 600
Carl Helmetag 400 Garry M. Jones 400
Peggy Murphy 600 David A. O'Neil 800
Barry Pinsley 1,000 Howard Pinsley 4,000
Alvin O. Sabo 900 Seymour Saslow 1,000
Michael W. Wool 1,000
(2) Includes 500 shares owned by the trust of Molly K. Helmetag. As trustee of
the trust, Mr. Helmetag is deemed beneficial owner, as defined in rule
13d-3, of the shares held by the trust. Excludes 806 shares owned by the
spouse of Mr. Helmetag. Beneficial ownership is disclaimed by Mr.
Helmetag.
(3) Includes shares allocated to named director or officer as of June 30, 2004
as a participant in the Company's ESOP. Each such person has the right to
direct the manner in which such shares allocated to him or her are to be
voted by the ESOP Trustee.
(4) Excludes 2,000 shares owned by the spouse of Barry Pinsley. Beneficial
ownership of the shares is disclaimed by Mr. Pinsley.
9
There are no arrangements known to the Company, the operation of which may
at a subsequent date, result in change of control of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As previously reported, the Company established and sold to the ESOP Trust
on June 5, 1989, 331,224 shares of the Company's treasury stock at a price of
$26.50 per share, which purchase price was funded by the Company making a cash
contribution and loan. Each year, the Company makes contributions to the ESOP,
which are used to make loan interest and principal payments to the Company. With
each such payment, a portion of the Common Stock held by the ESOP is allocated
to participating employees. As of June 30, 2004, there were 240,749 shares
allocated to participants. The loan from the Company to the ESOP was repayable
in annual installments of $1,039,605, including interest, through June 30, 2004.
Officers of the Company, including Howard Pinsley who is also a director, are
eligible to participate in the ESOP and to have shares and cash allocated to
their accounts and distributed to them in accordance with the terms of the ESOP.
The Company paid the law firm of Langrock, Sperry & Wool, of which Michael
W. Wool, a director of the Company, is a partner, a total of $11,524 for legal
services during the fiscal year ended June 30, 2004.
BOARD OF DIRECTORS' PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
CHANGING THE NUMBER OF MEMBERS OF THE BOARD OF DIRECTORS
FROM NINE TO A NUMBER NOT LESS THAN THREE, NOR MORE THAN NINE.
The current Article SEVENTH of the Company's Certificate of Incorporation
reads:
"The entire Board of Directors shall consist of nine members. The
directors shall be divided into three classes, each class to consist of three
directors. The term of office of the first class (Class A) shall expire at the
first annual meeting of the Company after their election, the term of office of
the second class (Class B) shall expire at the second succeeding annual meeting,
and the third class (Class C) at the third succeeding annual meeting. At each
annual meeting after the election of the first classified Board, directors shall
be elected for a term of three years to replace those whose terms expire."
The Board of Directors has determined that it is in the best interests of
the Company and its shareholders that Article SEVENTH of the Company's
Certificate of Incorporation be amended and restated to provide as follows:
SEVENTH: The entire Board of Directors shall consist of not fewer than
three persons and not more than nine persons, with the actual number to be
determined in accordance with the by-laws. The directors shall be divided into
three classes, Class A, Class B and Class C, and all classes shall be as nearly
equal in number as possible. At each annual meeting, successors to the class of
directors whose term expires at that annual meeting shall be elected for a
three-year term. The Class A directors at the time of the adoption of this
Article SEVENTH, as amended, have a term expiring at the 2006 Annual Meeting.
The Class B directors elected at the meeting of the adoption of this Article
SEVENTH, as amended, will have a term expiring at the 2007 Annual Meeting. The
Class C directors at the time of the adoption of this Article SEVENTH, as
amended, have a term expiring at the 2005 Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION TO CHANGE THE NUMBER OF MEMBERS OF THE BOARD
OF DIRECTORS FROM NINE TO A NUMBER NOT LESS THAN THREE, NOR MORE THAN NINE.
BOARD OF DIRECTORS' PROPOSAL TO RATIFY
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon the recommendation of the Audit Committee,
has recommended the appointment of KPMG LLP as the Company's independent public
accountants for the fiscal year ending June 30, 2005. KPMG LLP was engaged by
the Company on September 25, 2003. Also upon the recommendation of the Audit
Committee, on September 9, 2003, the Board notified PricewaterhouseCoopers LLP,
the Company's independent public accountants for the fiscal year ended June 30,
2003, that the Company would not engage them as independent public accountants
for the fiscal year ending June 30, 2004.
The reports of PricewaterhouseCoopers LLP on the Company's consolidated
financial statements for the fiscal years ended June 30, 2003 and 2002 did not
contain any adverse opinion or disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope, or accounting principles.
In connection with its audits for the two fiscal years ended June 30, 2003
and 2002 and through September 9, 2003, there have been no disagreements with
PricewaterhouseCoopers LLP on any matters of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which, if not
resolved to the satisfaction of PricewaterhouseCoopers LLP, would have caused
PricewaterhouseCoopers LLP to make reference thereto in the reports of
PricewaterhouseCoopers LLP on the financial statements for such years.
10
During the two fiscal years ended June 30, 2003 and 2002 and through
September 9, 2003, there have been no reportable events (as that term is defined
in Item 304(a)(1)(v) of Regulation S-K).
The Company has provided PricewaterhouseCoopers LLP with a copy of the
foregoing statements. Attached as Exhibit 16.1 to the Company's Current Report
on Form 8-K, filed with the Securities and Exchange Commission on September 16,
2003, is a letter from PricewaterhouseCoopers LLP stating that it agrees with
such statements that concern PricewaterhouseCoopers LLP.
The Company engaged KPMG LLP as the Company's independent public
accountants effective September 25, 2003. During the Company's two fiscal years
ended June 30, 2003 and 2002 and the subsequent interim period prior to engaging
KPMG LLP, neither the Company nor anyone on its behalf consulted with KPMG LLP
with respect to (i) the application of accounting principles to a specified
transaction, either completed or proposed; (ii) the type of audit opinion that
might be rendered on the Company's financial statements; or (iii) any matter
that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv)
of Regulation S-K and the related instructions to such item) or a reportable
event (as that term is defined in Item 304(a)(1)(v) of Regulation S-K).
Unless otherwise specified by the shareholders, the shares represented by
their properly executed proxies will be voted for ratification of the
appointment of KPMG LLP as independent public accountants for the fiscal year
ending June 30, 2005. The Company is advised by said firm that neither KPMG LLP
nor any of its partners now has, or during the past three years had, any direct
financial interest or material indirect financial interest or any connection
with the Company.
A representative of KPMG LLP is expected to be present at the Annual
Meeting with the opportunity to make a statement if he or she desires to do so
and to be available to respond to appropriate questions from shareholders. A
representative of PricewaterhouseCoopers LLP is not expected to be present at
the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF KPMG LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY FOR
FISCAL YEAR ENDING JUNE 30, 2005.
The Company's Audit Committee has policies and procedures for
pre-approving all audit and non-audit work performed by PricewaterhouseCoopers
LLP, the auditor of the Company's annual financial statements for the fiscal
year ended June 30, 2003 and performed and to be performed by KPMG LLP for the
fiscal year ended June 30, 2004 and 2005. Specifically, the Audit Committee has
pre-approved the use of KPMG LLP for performance of audit services and detailed,
specific types of services within the following categories of audit related and
tax services. In each other case, the Committee requires management to obtain
specific pre-approval from the Audit Committee for any other work to be
performed by KPMG LLP.
The aggregate fees billed for professional services by
PricewaterhouseCoopers LLP and KPMG LLP in the fiscal years ended June 30, 2003
and 2004, respectively, for these various services were:
TYPES OF FEES 2003 2004
Amount Billed Amount Billed
------------- -------------
(1) Audit Fees $ 64,815 $ 97,515
(2) Audit Related Fees 4,100 $ 6,100
(3) Tax Fees $ 11,040 $ 12,580
(4) All Other Fees None None
-------- --------
Total $ 79,995 $116,195
======== ========
In the above table, in accordance with the Securities and Exchange
Commission's definitions and rules, "audit fees" are fees the Company paid for
professional services for the audit of the Company's financial statements
included in Form 10-K and review of financial statements included in Form 10-Qs,
and for services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements; "audit-related fees" are fees
for assurance and related services that are related to the performance of the
audit of the Company's employee benefit plan financial statements; "tax fees"
are fees for tax compliance, tax advice and tax planning; and "all other fees"
are fees for any services not included in the first three categories. 100% of
the services set forth in sections (1) through (3) above were approved by the
Audit Committee in accordance with its charter.
11
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended,
generally requires the Company's directors, executive officers, and persons who
own more than ten percent of a registered class of the Company's equity
securities, to file reports of beneficial ownership and changes in beneficial
ownership with the Securities and Exchange Commission. Based solely upon its
review of copies of such reports received by it, or upon written representations
obtained from certain reporting persons, the Company believes that its officers,
directors, and stockholders who own more than ten percent of the Company's
equity securities have complied with all Section 16(a) filing requirements.
ANNUAL REPORTS
The Annual Report of the Company to the shareholders for the fiscal year
ended June 30, 2004, including financial statements, accompanies this Proxy
Statement. Such financial statements are not incorporated herein by reference.
A copy of the Company's Annual Report on Form 10-K (including financial
statements and schedules thereto) for the fiscal year ended June 30, 2004 filed
with the Securities and Exchange Commission will be provided without charge upon
the written request of shareholders to Espey Mfg. & Electronics Corp.,
attention: Investor Relations, 233 Ballston Avenue, Saratoga Springs, New York
12866. The Company's Form 10-K for the fiscal year ended June 30, 2004 can also
be viewed electronically through a link at the Company's website
(www.espey.com).
SHAREHOLDER PROPOSALS
Any shareholder proposal which may be a proper subject for inclusion in
the proxy statement and for consideration at the 2005 Annual Meeting must be
received by the Company at its principal executive office no later than June 13,
2005, if it is to be included in the Company's 2005 proxy statement and proxy
form. In addition, the Company's bylaws outline procedures that a shareholder
must follow to nominate directors or to bring other business before
shareholders' meetings.
PROXY SOLICITATION
The solicitation of the enclosed proxy is being made on behalf of the
Board of Directors and the cost of preparing and mailing the Notice of Meeting,
Proxy Statement and form of proxy to shareholders is to be borne by the Company.
By Order of the Board of Directors,
HOWARD PINSLEY
President, Chief Executive Officer
and Chairman of the Board
October 12, 2004
Saratoga Springs, New York
12
APPENDIX A Exhibit A
ESPEY MFG. & ELECTRONICS CORP.
AUDIT COMMITTEE CHARTER
Purpose
The primary purpose of the Audit Committee (the "Committee") is to assist
the Board of Directors (the "Board") in fulfilling its responsibility to oversee
management's conduct of the Company's financial reporting process, including by
over viewing the financial reports and other financial information provided by
the Company to any governmental or regulatory body, the public or other users
thereof, the Company's systems of internal accounting and financial controls,
and the annual independent audit of the Company's financial statements.
In discharging its oversight role, the Committee is empowered to
investigate any matter brought to its attention with full access to all books,
records, facilities and personnel of the Company and the power to retain outside
counsel, auditors or other experts for this purpose. The Board and the Committee
are in place to represent the Company's shareholders; accordingly, the outside
auditor is ultimately accountable to the Board and the Committee.
The Committee shall review the adequacy of this Charter on an annual
basis.
Membership and Meetings
The Committee shall be comprised of not less than three members of the
Board, and the Committee's composition will meet the requirements of applicable
American Stock Exchange rules and regulations.
Accordingly, all of the members will be directors:
1. Who have no material relationship to the Company that may interfere
with the exercise of their independence from management and the
Company; and
2. Who are financially literate or who become financially literate
within a reasonable period of time after appointment to the
Committee. In addition, at least one member of the Committee will
have accounting or related financial management expertise.
The Committee shall meet at least four times annually, or more frequently
as circumstances dictate. As part of its job to foster open communication, the
Committee should meet at least annually with management, and the outside
auditors separately to discuss any matters that the Committee believes should be
discussed privately.
Key Responsibilities
The Committee's job is one of oversight and it recognizes that the
Company's management is responsible for preparing the Company's financial
statements and that the outside auditors are responsible for auditing those
financial statements. Additionally, the Committee recognizes that financial
management including the internal accounting and audit staff, as well as the
outside auditors, have more time, knowledge and more detailed information on the
Company than do Committee members; consequently, in carrying out its oversight
responsibilities, the Committee is not providing any expert or special assurance
as to the Company's financial statements or any professional certification as to
the outside auditor's work.
The following functions shall be the common recurring activities of the
Committee in carrying out its oversight function. These foundations are set
forth as a guide with the understanding that the Committee may diverge from this
guide as appropriate given the circumstances.
o The Committee shall review the management and the outside auditors
the audited financial statements to be included in the Company's
Annual Report on Form 10-K (or the Annual Report to Shareholders if
distributed prior to the filing of Form 10-K) and review and
consider with the outside auditors the matters required to be
discussed by Statement of Auditing Standards (`SAS') No. 61.
o As a whole, or through the Committee chair, the Committee shall
review with the outside auditors the Company's interim financial
results to be included in the Company's quarterly reports to be
filed with the Securities and Exchange Commission and the matters
required to be discussed by SAS No. 61; this review will occur prior
to the Company's filing of the Form 10-Q.
A-1
The Committee shall:
o request from the outside auditors annually, a formal written
statement delineating all relationships between the auditor and the
Company consistent with Independence Standards Board Standard Number
1;
o discuss with the outside auditors any such disclosed relationships
and their impact on the outside auditor's independence; and
o recommend that the Board take appropriate action, if necessary, to
oversee the independence of the outside auditors.
The Committee, subject to any action that may be taken by the full Board, shall
have the ultimate authority and responsibility to select (or nominate for
shareholder approval), evaluate and, where appropriate, replace the outside
auditor.
Maintain minutes of meetings of the Committee.
Report to the Board subsequent to meetings of the Committee.
A-2
Exhibit B
ESPEY MFG. & ELECTRONICS CORP.
NOMINATING COMMITTEE CHARTER
----------------------------
I. PURPOSE
The nominating committee, composed of three (3) directors, all of whom
shall be "independent directors" as defined in the by-laws of the Company, shall
identify and recommend to the Board of Directors (the "Board") individuals for
nomination to fill vacancies in, and for renomination to, positions as directors
of the Company.
II. APPOINTMENT AND REMOVAL
The members of the nominating committee shall be appointed by the Board,
which shall also designate a chairman of the nominating committee. Nominating
committee members shall serve until their successors are duly elected and
qualified or until their resignation or removal. The members of the nominating
committee may be removed, with or without cause, by a majority vote of the
Board.
III. MEETINGS
The nominating committee shall meet as frequently as circumstances
dictate. Meetings may be called by the chairman of the Board or by any member of
the nominating committee. Meetings of the nominating committee may be held
telephonically.
The nominating committee may invite to its meetings such persons it deems
appropriate in order to carry out its responsibilities. The nominating committee
may also exclude from meetings of the nominating committee any persons it deems
appropriate in order to carry out its responsibilities.
IV. RESPONSIBILITIES AND DUTIES
The nominating committee may consult with the Corporation's attorneys in
carrying out its responsibilities and shall have the authority to retain experts
and search firms as it deems appropriate, including the authority to approve the
fees payable to such parties. The nominating committee shall have the following
functions in carrying out its responsibilities as set forth in Section I of this
Charter:
1. Establishing criteria for the selection of new directors to serve on
the Board.
2. Identifying individuals believed to be qualified as candidates to
serve on the Board and recommending to the Board the candidates for
all directors positions to be filled by the Board or by the
shareholders at an annual or special meeting in accordance with the
Company's by-laws. In identifying candidates for the Board, the
nominating committee shall take into account all factors that it
considers appropriate, including, without limitation: (a) ensuring
that the Board consists of individuals with various and relevant
career experience, relevant technical skills, industry knowledge and
experience, financial expertise (including experience that could
qualify a director as a "financial expert" as that term is defined
by the rules of the United States Securities and Exchange Commission
(the "SEC")), local or community ties, (b) individual qualifications
such as strength of character, familiarity with the Company's
business and industry, independence and ability to work collegially,
(c) recommendations from the Company's chief executive officer,
which may include recommendations for Board membership by other
senior members of management. It is anticipated that the nominating
committee will consider the extent to which a particular candidate
would fill a present need on the Board.
3. Making recommendations to the Board as to whether the Board should
adopt age or term limits or other retirement policies.
4. Evaluating candidates for nomination to the Board, including those
recommended by shareholders.
5. Conducting appropriate inquiries into the backgrounds and
qualifications of possible candidates.
6. Considering matters of independence, possible conflicts of interest
of members of the Board and executive officers and whether
candidates for the Board have special interests that might impair
their ability to represent the interests of all shareholders or
interact collegially with the other directors.
7. Maintaining minutes or other records of meetings and activities of
the nominating committee and reporting regularly to the Board
concerning the meetings and activities of the nominating committee.
B-1
V. ANNUAL PERFORMANCE EVALUATION
The nominating committee shall, periodically, perform a self-review and
evaluation as to its performance and the performance of its members. The
nominating committee shall make recommendations to the Board concerning such
improvements to and amendments of this Corporation's certificate of
incorporation as the nominating committee considers necessary, appropriate or
valuable to the Corporation.
B-2
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ESPEY MFG. & ELECTRONICS CORP.
C
O
M
M
O
N
PROXY FOR THE
2004 ANNUAL MEETING OF SHAREHOLDERS
November 12, 2004
The undersigned hereby appoints Carl Helmetag and Alvin Sabo as Proxies, each
with the power to appoint his substitute, and hereby authorizes them or any one
of them to represent and to vote, as designated below, all the shares of common
stock of ESPEY MFG. & ELECTRONICS CORP. which the undersigned would be entitled
to vote if personally present at the 2004 Annual Meeting of Shareholders to be
held on November 12, 2004 or any adjournment thereof.
Please be sure to sign and date
this Proxy in the box below.
Date
Stockholder sign above
Co-holder (if any) sign above
1. TO ELECT TWO CLASS B DIRECTORS TO SERVE FOR A THREE YEAR TERM OR UNTIL
THEIR RESPECTIVE SUCCESSORS ARE DULY ELECTED AND QUALIFY.
[_] FOR all nominees listed below
(except as marked to the contrary below)
[_] WITHHOLD AUTHORITY
to vote for all nominees listed below
WILLIAM P. GREENE
SEYMOUR SASLOW
The Board of Directors recommends a vote FOR these nominees.
INSTRUCTION: To withhold authority to vote for any individual nominee, mark the
"For" box above and write the nominee's name in the space provided below.
2. TO VOTE ON THE APPROVAL OF AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION changing the number of members of the Board of Directors from
nine to a number not less that three nor more than nine.
[_] FOR [_] AGAINST [_] ABSTAIN
The Board of Directors recommends a vote FOR this proposal.
3. TO RATIFY THE APPOINTMENT OF KPMG LLP as the independent public accountants
of the Company for fiscal year ending June 30, 2005.
[_] FOR [_] AGAINST [_] ABSTAIN
The Board of Directors recommends a vote FOR this proposal.
No other business may be transacted at the meeting.
--------------------------------------------------------------------------------
Detach here, sign, date and mail in postage paid envelope provided.
ESPEY MFG. & ELECTRONICS CORP.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE ABOVE SIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2 AND 3.
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporation name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
If your address has changed, please correct the address in the space provided
below and return this portion with the proxy in the envelope provided.
----------------------------------------
----------------------------------------
----------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ESPEY MFG. & ELECTRONICS CORP.
E
S
O
P
P
L
A
N
PROXY FOR THE
2004 ANNUAL MEETING OF SHAREHOLDERS
November 12, 2004
The undersigned hereby appoints Carl Helmetag and Alvin Sabo as Proxies, each
with the power to appoint his substitute, and hereby authorizes them or any one
of them to represent and to vote, as designated below, all the shares of common
stock of ESPEY MFG. & ELECTRONICS CORP. which the undersigned would be entitled
to vote if personally present at the 2004 Annual Meeting of Shareholders to be
held on November 12, 2004 or any adjournment thereof.
Please be sure to sign and date
this Proxy in the box below.
Date
Stockholder sign above
Co-holder (if any) sign above
1. TO ELECT TWO CLASS B DIRECTORS TO SERVE FOR A THREE YEAR TERM OR UNTIL
THEIR RESPECTIVE SUCCESSORS ARE DULY ELECTED AND QUALIFY.
[_] FOR all nominees listed below
(except as marked to the contrary below)
[_] WITHHOLD AUTHORITY
to vote for all nominees listed below
WILLIAM P. GREENE
SEYMOUR SASLOW
The Board of Directors recommends a vote FOR these nominees.
INSTRUCTION: To withhold authority to vote for any individual nominee, mark the
"For" box above and write the nominee's name in the space provided below.
2. To vote on the approval of an Amendment to the Company's Certificate of
Incorporation changing the number of members of the Board of Directors from
nine to a number not less that three nor more than nine.
[_] FOR [_] AGAINST [_] ABSTAIN
The Board of Directors recommends a vote FOR this proposal.
3. To RATIFY the appointment of KPMG LLP as the independent public accountants
of the Company for fiscal year ending June 30, 2005.
[_] FOR [_] AGAINST [_] ABSTAIN
The Board of Directors recommends a vote FOR this proposal.
No other business may be transacted at the meeting.
--------------------------------------------------------------------------------
Detach here, sign, date and mail in postage paid envelope provided.
ESPEY MFG. & ELECTRONICS CORP.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE ABOVE SIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2 AND 3.
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporation name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
If your address has changed, please correct the address in the space provided
below and return this portion with the proxy in the envelope provided.
----------------------------------------
----------------------------------------
----------------------------------------