SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Soliciting Material Under Rule
[_] Confidential, For Use of the 14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
ESPEY MFG. & ELECTRONICS CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
5) Total fee paid:
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[_] Fee paid previously with preliminary materials:
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[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
1) Amount previously paid:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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ESPEY MFG. & ELECTRONICS CORP.
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD November 22, 2002
--------------------------
October 28, 2002
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 Hilton Garden Inn, 125
South Broadway, Saratoga Springs, New York, on November 22, 2002, at 9:30 a.m.,
Eastern Standard Time, for the following purposes:
1. To elect three Class C directors to serve for a three year term or
until their respective successors are duly elected and qualify; and
2. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on October 16, 2002,
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,
/s/ Peggy A. Murphy
------------------------
Peggy A. Murphy
Corporate Secretary
Please make your specifications and sign and date the enclosed proxy and
mail it promptly in the accompanying pre-addressed, postage-free envelope.
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 Hilton Garden Inn, 125 South
Broadway, Saratoga Springs, New York, on November 22, 2002, at 9:30 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 28, 2002.
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 C 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 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 16, 2002 will be entitled to vote at the meeting.
There were outstanding and entitled to vote on October 16, 2002, 1,034,561
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 three Class C directors expire at the current Annual
Meeting. The Board of Directors has nominated three persons to stand for
election as Class C directors.
The votes will be cast pursuant to the enclosed proxy for the election of
each of the Class C 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 C 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
The names and business experience for the past five years of the three
persons who have been nominated by the Board of Directors to stand for election
as Class C directors at the Annual Meeting and the remaining directors whose
terms are continuing until the 2003 or 2004 Annual Meeting appear below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE FOLLOWING
NOMINEES FOR CLASS C DIRECTOR.
NOMINEES FOR 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 58 -- Certified Public Accountant and a Professor 1992
of Business, S. kidmore 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.
Barry Pinsley (1) 59 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.
Michael W. Wool 56 -- 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.
2
CLASS B DIRECTORS-- SERVING FOR
A THREE YEAR TERM EXPIRING AT THE 2004 ANNUAL MEETING
Period to
Offices and Date
Positions Held Served as
Name Age with Company Principal Occupation or Employment Director
---- --- -------------- ---------------------------------- --------
William P. Greene 72 -- Mr. Greene was Vice President of 1992
Operations 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, Dr. 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 81 -- 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 A DIRECTORS-- SERVING FOR A
THREE YEAR TERM EXPIRING AT THE 2003 ANNUAL MEETING
Period to
Offices and Date
Positions Held Served as
Name Age with Company Principal Occupation or Employment Director
---- --- -------------- ---------------------------------- --------
Howard Pinsley (1) 62 President, Chief Howard Pinsley for more than the past five 1992
Executive Officer years has been employed by the Company
and Chairman of on 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.
3
CLASS A DIRECTORS-- SERVING FOR A
THREE YEAR TERM EXPIRING AT THE 2003 ANNUAL MEETING
Period to
Offices and Date
Positions Held Served as
Name Age with Company Principal Occupation or Employment Director
---- --- -------------- ---------------------------------- --------
Alvin O. Sabo 59 -- 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 54 -- 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.
- -------------------
(1) Barry Pinsley and Howard Pinsley are cousins.
Howard Pinsley serves as director of All American Semiconductor Corp. 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, 62, 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., 67, Vice President of Marketing and Sales since
December 6, 1996. During the past five years and before being elected to his
present position, Mr. Pompay was employed by the Company on a full-time basis as
Director of Marketing and Sales.
Peggy Murphy, 44, 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, 37, 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, 42, Assistant Treasurer since December 8, 2000. Mr.
Polidore joined the Company on May 17, 1999. Prior to joining the Company he was
Accounting Manager for Brinks, Inc.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
During the Company's fiscal year ended June 30, 2002, the Board of
Directors held a total of 5 meetings, and each director then in office attended
at least 75% of such meetings.
The Board has a standing Audit Committee whose members are Paul J. Corr,
Chairman, Alvin O. Sabo and Michael W. Wool. 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, 2002 the
Committee held 5 meetings, and each Committee member attended at least 75% of
such meetings.
The Board has a standing Stock Option Committee whose members are Howard
Pinsley, Paul Corr 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, 2002, the Stock Option
Committee held 1 meeting, and each Stock Option Committee member attended this
meeting.
4
There is no standing nominating or compensation committee of the Board of
Directors, or committees performing similar functions with the exception of the
Stock Option Committee.
COMPENSATION OF DIRECTORS
The Company's standard arrangement compensated each director of the Company
an annual fee in the amount of $12,000 for being a member of the Board of
Directors. Each Director that also served as a member of the Audit Committee was
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. Barry Pinsley was paid $5,600 for additional services for the
fiscal year ended June 30, 2002. Executive officers that also serve on the
Company's Board of Directors do not receive director's fees.
COMPENSATION OF EXECUTIVE OFFICERS
The following table summarizes the annual compensation for each of the
fiscal years ended June 30, 2002, June 30, 2001 and June 30, 2000 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, 2002:
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 2002 $173,120 $25,000 2,000 $11,841
President, Chief 2001 $172,600 $25,000 2,000 $ 9,590
Executive Officer and 2000 $160,520 $25,000 1,500 $ 8,623
Chairman of the Board
John J. Pompay, Jr. 2002 $154,340 $25,000 800 $12,134
Vice President of 2001 $152,938 $25,000 800 $ 9,737
Marketing and Sales 2000 $237,816 $20,000 600 $ 8,822
David A. O'Neil 2002 $ 99,950 $12,500 800 $ 9,899
Treasurer and Principal 2001 $ 91,200 $12,500 800 $ 7,703
Financial Officer 2000 $ 84,930 $10,000 600 $ 6,162
(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 the Company's matching
contribution under the 401K plan.
OPTION GRANTS IN FISCAL 2002
Potential
Realizable
Value at
Assumed Annual
Number of Percent Rates of Stock
Securities of Total Price Appreciation
Underlying Options for Option Term (1)
Options Granted to Exercise Expiration -------------------
Name Granted Employees Price Date 5% ($) 10% ($)
---- ------- --------- ----- ---- ------ -------
Howard Pinsley 2,000 15% $ 19.85 2012 64,667 102,972
John J. Pompay Jr. 800 6% $ 19.85 2012 25,866 41,189
David A. O'Neil 800 6% $ 19.85 2012 25,866 41,189
(1) Amounts reflect certain assumed rates of appreciation set forth in the
Commission's executive compensation disclosure rules. Actual gains, if any,
on stock option exercises will depend on future performance of the Common
Stock. No assurance can be made that the amounts reflected in these columns
will be achieved. The values in these columns assume that the fair market
value on the date of grant of each option was equal to the exercise price
thereof.
5
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 1,
2012.
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 727 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 them in any actions.
EMPLOYMENT CONTRACTS
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, 2002, and expires on December 31, 2002 unless the
parties mutually agree to extend the agreement. The contract provides for a
minimum base annual salary of $150,800 plus commissions at the rate of 3% on all
payments received by the Company against Mr. Pompay's open orders booked up to
and including December 31, 1996, and 1% on all payments received against orders
booked by the Company between January 1, 1997 and December 31, 1998. The
contract further provides that if Mr. Pompay's employment is terminated by the
Company prior to the expiration date, other than for cause, he will continue to
receive his full salary for 27 months and commissions due on his orders when
payment is received. The contract also provides for a restrictive covenant of
non-competition by Mr. Pompay for a period of two years upon termination for
cause or termination of the contract by Mr. Pompay. At the end of the contract
term Mr. Pompay has the option to accept at the time of his voluntary
resignation as an executive officer, an employment contract as a non-executive
officer in which he would receive full compensation for 13 weeks and then for
the next 143 weeks receive $1,000 per week for services rendered.
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 the Board of Directors (the "Committee") is
comprised of three independent directors and operates under a written charter,
which was attached as Exhibit A to the proxy statement filed in connection with
the Company's 2001 Annual Meeting of Stockholders.
In fulfilling its responsibilities, the Committee has reviewed and
discussed the Company's audited consolidated financial statements for the fiscal
year ended June 30, 2002 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.
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, 2002.
Audit Committee:
Paul J. Corr, Chairman
Michael W. Wool
Alvin O. Sabo
6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information regarding ownership of the
Company's outstanding Common Stock as of October 16, 2002, 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.
Name of Amount and Nature Percent
Beneficial Owner of Beneficial Ownership of Class
---------------- ----------------------- --------
Dimensional Fund Advisors Inc. 72,600 -Direct (1) 7.02%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
Franklin Resources, Inc. 80,000 -Direct (2) 7.70%
777 Mariners Island Blvd.
P.O. Box 7777
San Mateo, CA 94403-7777
The Adirondack Trust Company, 258,600 -Direct (3) 25.00%
as Trustee of the Company's Employee
Retirement Plan and Trust
473 Broadway
Saratoga Springs, NY 12866
Howard Pinsley, 43,634 -Direct 5.04%
233 Ballston Avenue 8,481 -Indirect(4)
Saratoga Springs, NY 12866
(1) The information as to the number of shares of common stock of the Company
that may be deemed beneficially owned by Dimensional Fund Advisors Inc.
("Dimensional") is from the Schedule 13G dated February 12, 2002 filed with
the Securities and Exchange Commission (the "SEC"). Dimensional, a
registered investment advisor, is deemed to have beneficial ownership of
72,600 shares of Espey Mfg. & Electronics Corp. stock as of December 31,
2000, all of which shares are held in Dimensional investment companies,
trusts and accounts. Dimensional, in its role as investment advisor and/or
manager, disclaims beneficial ownership of all such shares. Dimensional, in
its role as investment advisor and/or manager, reported sole voting power
with respect to 72,600 shares.
(2) The information as to the number of shares of common stock of the Company
that may be deemed beneficially owned by Franklin Advisory Services, LLC
("Franklin") is from the Schedule 13G, dated January 26, 2001 filed with
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, Franklin
Advisory, 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.
(3) This information is from the Form 4 dated August 29, 2002 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, 42,024 shares as of August 29, 2002, as directed by the Plan
Administrator appointed by the Company's Board of Directors. As to the
common shares allocated to participants, 216,576 shares as of August 29,
2002, the ESOP Trustee has the power to vote such shares as directed by
such Plan Administrator to the extent the participants do not direct the
manner in which such shares are to be voted.
(4) This information is from the Form 5 dated August 5, 2002. Indirect shares
represent stock being held in the Company ESOP.
7
SECURITY OWNERSHIP OF MANAGEMENT
The following information is furnished as of October 16, 2002 (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:
Name of Amount and Nature Percent
Beneficial Owner of Beneficial Ownership of Class
---------------- ----------------------- --------
Paul J. Corr 3,000 - Direct *
William P. Greene 100 - Direct *
Carl Helmetag 2,500 - Direct *
500 - Indirect (3)
Garry M. Jones 4,225 - Indirect (2) *
Peggy Murphy 2,851 - Indirect (2) *
David A. O'Neil 1,600 - Direct *
1,287 - Indirect (2)
Barry Pinsley 40,130 - Direct 4.17%
3,017 - Indirect (1,2)
Howard Pinsley 43,634 - Direct 5.04%
8,481 - Indirect (2)
Timothy A. Polidore 609 - Indirect (2) *
John J. Pompay, Jr. 8,980 - Indirect (2) *
Alvin O. Sabo 0 *
Seymour Saslow 1,051 - Direct *
6,810 - Indirect (2)
Michael W. Wool 400 - Direct *
Officers and Directors as a Group (13 persons) 92,415 - Direct 12.48%
36,760 - Indirect
(1) Excludes 2,000 shares owned by the spouse of Barry Pinsley. Beneficial
ownership of the shares is disclaimed by Mr. Pinsley
(2) Includes shares allocated to named director or executive officer as of June
30, 2002 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.
(3) 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 800 shares owned by the
spouse of Mr. Helmetag. Beneficial ownership is disclaimed by Mr. Helmetag.
There are no arrangements known to the Company, the execution of which may
at a subsequent date, result in change of control of the Company.
8
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, 2002, there were 220,888 shares
allocated to participants. The loan from the Company to the ESOP is 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, is
eligible to participate in the ESOP and to have shares and cash allocated to his
account and distributed to him 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 $24,000 for legal
services during the fiscal year ended June 30, 2002.
INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has recommended that the
decision on the appointment of the Company's independent accountants for fiscal
year ending June 30, 2003 be postponed. The Company is discussing with its
current accountants, PricewaterhouseCoopers LLP, the scope of the audit
including the services offered and the fees for those services. The Company is
also considering obtaining bids from other independent accounting firms. Since
these discussions have not been completed, the Audit Committee has recommended
that the decision on the appointment of the independent accountants be postponed
until the Audit Committee has had the opportunity to reveiw the various
proposals and determine which proposal best meets the needs of the Company.
PricewaterhouseCoopers LLP acted as the Company's principal independent
accountant for the fiscal year ended June 30, 2002. A representative of
PricewaterhouseCoopers 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.
The following amounts were billed to the Company by the independent
auditors for services rendered for the fiscal year ended June 30, 2002:
Type of Fee Amount Billed
----------- -------------
Audit $54,250
Financial Information Systems Design and
Implementation Fees None
All Other Fees $25,890
-------
Total $80,140
=======
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.
9
ANNUAL REPORTS
The Annual Report of the Company to the shareholders for the fiscal year
ended June 30, 2002, 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, 2002 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, 2002 can also
be viewed electronically through a link at the Company's website
(www.espey.com).
SHAREHOLDER PROPOSALS FOR 2003 ANNUAL MEETING
Any shareholder proposal which may be a proper subject for inclusion in the
proxy statement and for consideration at the 2003 Annual Meeting must be
received by the Company at its principal executive office no later than July 1,
2003, if it is to be included in the Company's 2003 proxy statement and proxy
form.
OTHER MATTERS
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.
Other Matters
The Company is unaware of any other matter that will be brought before the
meeting for action. If other matters should come before the meeting, which
require a shareholder vote, it is intended that the proxy holders will use their
own discretion in voting on such other matters.
By Order of the Board of Directors,
/s/ Howard Pinsley
----------------------------
Howard Pinsley
President, Chief Executive Officer
and Chairman of the Board
October 28, 2002
Saratoga Springs, New York
10
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ESPEY MFG. & ELECTRONICS CORP.
COMMON
PROXY FOR THE
2002 ANNUAL MEETING OF SHAREHOLDERS
November 22, 2002
The undersigned hereby appoints Howard Pinsley and Barry Pinsley 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 2002 Annual Meeting of
Shareholders to be held on November 22, 2002 or any adjournment thereof.
1. Election of Class C Directors
[_] FOR all nominees listed below [_] WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees
contrary below) listed below
PAUL J. CORR
BARRY PINSLEY
MICHAEL W. WOOL
Management 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.
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2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
_________________________________________
Please be sure to sign and date Date
this Proxy in the box below.
________________________________________________________________________________
________Stockholder sign above_________Co-holder (if any) sign above____________
=> 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 PROPOSAL 1.
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.
- -------------------------------------
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ESPEY MFG. & ELECTRONICS CORP.
PROXY FOR THE
2002 ANNUAL MEETING OF SHAREHOLDERS
November 22, 2002
ESOP PLAN
The undersigned hereby appoints Howard Pinsley and Barry Pinsley 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 2002 Annual Meeting of
Shareholders to be held on November 22, 2002 or any adjournment thereof.
1. Election of Class C Directors
[_] FOR all nominees listed below [_] WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees
contrary below) listed below
PAUL J. CORR
BARRY PINSLEY
MICHAEL W. WOOL
Management 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. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
_________________________________________
Please be sure to sign and date Date
this Proxy in the box below.
________________________________________________________________________________
________Stockholder sign above_________Co-holder (if any) sign above____________
=> 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 PROPOSAL 1.
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.
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