FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washinton, D.C. 20549
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 13, 1995 (June 12, 1995)
ESPEY MFG. & ELECTRONICS CORP.
(Exact name of registrant as specified in its charter)
NEW YORK 1-4383 14-1387171
State of incorporation Commission file number IRS Employer ID No.
P.O. Box 422, Saratoga Springs, New York 12866
(Address of principal executive offices) (Zip Code)
Registranst's telephone number, including area code 518-584-4100
Not Applicable
(Former name or former address, if changed since last report.)
<PAGE>
Item 5. Other Materially Important Events.
On June 12, 1995, pursuant to prior authorization by the Board of Directors,
the registrant entered into an employment contract with Sol Pinsley, as
President and Chief Executive Officer, superseding the existing employment
contract with Mr. Pinsley which had a term expiring December 31, 1995. The
new employment contract is dated and effective as of January 1, 1995 for a
term expiring December 31, 1998 and covers Mr. Pinsley's employment as
President (or Chairman of the Board) and Chief Executive Officer and also as
a non-executive officer employee should Mr. Pinsley elect to become a
non-executive officer employee. The agreement provides minimum base annual
compensation of $182,000 for each calendar year commencing 1995 and the Board
of Directors in its discretion may increase such compensation for any calendar
year and/or award Mr. Pinsley a bonus for any calendar year. The foregoing
compensation is to be reduced by $40,000 per annum in the event Mr. Pinsley
elects to become a non-executive officer employee. The employment agreement
further provides that in the event of his disability the foregoing
compensation shall continue to be paid to Mr. Pinsley until the expiration
date of the agreement, and, in the event of his death, such compensation
shall be paid to his estate until the expiration date of the agreement or
187 days after his death, whichever is later. The agreement provides for
(i) a restrictive covenant of non competition by Mr. Pinsley and (ii) his
covenant not to divulge or use other than for the registrant confidential
information concerning the registrant, during and for 18 months after the
expiration date of the agreement.
Item 7. Financial Statements and Exhibits
(c) Exhibits:
1. Copy of Employment Agreement dated and effective as
of January 1, 1995 between registrant and Sol Pinsley.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed by
the undersigned thereunto duly authorized.
ESPEY MFG. & ELECTRONICS CORP.
Dated: June 13, 1995
Herbert Potoker, Treasurer
AGREEMENT
AGREEMENT made effective as of the 1st day of January, 1995, between ESPEY
MFG. & ELECTRONICS CORP., a New York corporation having its principal executive
office at Saratoga Springs, New York 12866 (hereinafter "Espey") and SOL
PINSLEY, residing at 359 Ballston Avenue, Saratoga Springs, New York 12866
(hereinafter "Pinsley").
W I T N E S S E T H :
WHEREAS, Espey and Pinsley have had a long term employment relationship and
Pinsley has been the President and/or Chief Executive Officer of Espey since
September 23, 1976, and Pinsley having been an executive officer and key
employee of Espey for many years prior thereto; and
WHEREAS, Pinsley has been and continues to be a key executive employee of
Espey, and Espey in order to assure itself of Pinsley's continued services,
advices and "know-how" desires to modify, extend and restate effective as of
January 1, 1995 the terms of Pinsley's existing employment agreement in order
to secure and to have available exclusively to Espey the services of Pinsley
on the terms and conditions contained herein;
NOW, THEREFORE, for good and valuable consideration, the sufficiency of
which is hereby acknowledged, it is agreed by and between Espey and Pinsley as
follows:
1. Duties: Espey shall employ Pinsley as an executive officer and Pinsley
accepts such employment as an executive officer of Espey or, as provided in
Paragraph 5 hereof, as a non-executive officer employee of Espey, all in
accordance with the terms and conditions of this Agreement. Pinsley shall
render services in the manner previously rendered by him in the capacity of
President and Chief Executive Officer, or as provided in Paragraph 5 hereof, as
a non-executive officer employee ("NEO-employee"). It is understood that
Pinsley may be appointed and serve as Chairman of the Board instead of as
President while continuing as Chief Executive Officer. In this regard
Pinsley's powers and duties shall be determined, from time to time,
consistent with past practices by Espey's Board of Directors. It is agreed
that Pinsley will devote such efforts, time, energy and skill to the
business and affairs of Espey as is reasonably required for the performance
of the services to be rendered by him as an executive officer or a
NEO-employee, as the case may be, except for vacation periods, holidays and
other leaves of absence. During the term of this Agreement, Pinsley shall
make his services available only to Espey.
2. Term. This Agreement and the employment of Pinsley hereunder shall
commence January 1, 1995. This Agreement and Pinsley's employment as an
executive officer or NEO-employee, as the case may be, shall continue until
December 31, 1998 (hereinafter the "ExpirationDate") except as otherwise
provided in this Agreement. Pinsley may not be terminated by Espey prior to
the Expiration Date as an executive employee serving in the capacity of
President (or Chairman of the Board) and Chief Executive Officer or, if Pinsley
has elected pursuant to Paragraph 5 hereof to be a NEO-employee, serving as a
NEO-employee except and only for Pinsley's willful breach of a material
provision of this Agreement or for gross misconduct as provided in Paragraph
10(a) hereof.
3. Compensation. In consideration for Pinsley's services and commitments
hereunder, Espey shall pay to Pinsley an annual minimum base compensation of
One Hundred Eighty-Two Thousand and no/100 Dollars ($182,000.00) for each
calendar year during the term of the Agreement commencing January 1, 1995. An
additional percentage increment to the annual minimum base compensation may be
determined and granted by Espey's Board of Directors in its discretion. In
addition, the Board of Directors in its discretion may also award Pinsley a
bonus for any calendar year during the term of this Agreement based upon
Pinsley's performance and/or the performance of Espey and such other factors as
the Board deems pertinent. The base annual compensation shall be paid
periodically in accordance with Espey's customary employment payroll
practices for executive employees.
4. Office; Reimbursement of Expenses; Fringe Benefits.
(a) During the term of this Agreement Pinsley's fringe benefits,
office, base of operations and secretarial assistance shall continue to be of
the same nature and similar as heretofore. His office shall continue to be
located where it is presently located unless he at his election wishes it to
be located elsewhere.
(b) During the term of this Agreement Espey will promptly reimburse
Pinsley for all reasonable expenses incurred by him in the furtherance of and
carrying out his duties under this Agreement.
(c) Pinsley shall be entitled to participate in any life insurance,
disability insurance and group medical plans or any other fringe benefit,
including pension and deferred compensation plans of Espey in effect from time
to time.
5. Pinsley's Option to Become a NEO-Employee. At any time during the
term of this Agreement, Pinsley shall have the right to resign as President
(or Chairman of the Board, if previously appointed to and serving in such
office) and Chief Executive Officer of Espey, and he may elect to serve for the
remainder of the term as a NEO-employee of Espey, making himself available
to Espey in person, by telephone or by such other means of communication, at
such reasonable times as he deems reasonably necessary to consult with and
advise Espey's officers and Board of Directors on the matters submitted to him
for such consultation and advice. During the period that Pinsley is a
NEO-employee, the compensation and other benefits provided for by Espey
(including the same fringe benefits that were made available to Pinsley as an
executive officer) set forth in Paragraphs 3 and 4 hereof shall remain
unchanged and shall be paid and accorded to him, except that the annual base
compensation that would have been payable to Pinsley had he
remained as President (or Chairman of the Board) and Chief Executive Officer
shall thereafter be reduced by Forty Thousand and no/100 Dollars ($40,000.00)
per annum for the remainder of the term of this Agreement.
6. Disability and Death.
(a) If Pinsley shall be unable to substantially perform his duties
hereunder by reason of illness, physical or mental disability or other
incapacity (hereinafter for convenience called "disability"), the base annual
minimum compensation and benefits required to be paid or accorded to Pinsley
pursuant to Paragraphs 3 and 4 or 5 hereof, shall remain in effect and continue
to be paid and accorded to him until the Expiration Date based on Pinsley's
status as President (or Chairman of the Board) and Chief Executive Officer or
as a NEO-employee, as the case may be, at the time such disability occurs.
(b) In the event of the death of Pinsley during the term of this
Agreement, the base annual minimum compensation required to be paid to
Pinsley pursuant to Paragraph 3 or 5 hereof as President (or Chairman of the
Board) and Chief Executive Officer or as a NEO-employee, as the case may be,
shall remain in effect and continue to be paid to the legal representatives
of his estate until the later of (i) the Expiration Date, or (ii) a period
of one hundred eighty-seven (187) consecutive days from the date of his
death. The provisions of this Paragraph 6(b) shall also apply if at the
time of his death Pinsley is in a disability status as referred to in
Paragraph 6(a).
7. Restrictive Covenant. During the term of this Agreement, and for a
period of eighteen (18) consecutive months after the Expiration Date,
Pinsley shall not without the express written consent of Espey, directly or
indirectly, on his own behalf or on behalf of any other person, firm,
partnership, corporation or other business entity:
(a) Engage in or participate (in his own capacity or as an officer,
director, shareholder, employee, consultant, independent contractor,
partner, principal or sole proprietor), have any material financial interest
in, or knowingly permit his name to be used by or in connection with any
business or activity that competes in any material way, directly or
indirectly, with Espey or any of its subsidiaries;
(b) Solicit business for products or services similar to those
offered, sold, provided or under active development, by Espey or any of its
subsidiaries, from any business entity which, at any time during the term of
this Agreement, did business with, or was a customer or account of Espey or
any of its subsidiaries, or which, at any time, during the term of this
Agreement, had been solicited for business by Espey or any of its subsidiaries;
(c) Solicit or encourage any person not to become an employee of
Espey or any of its subsidiaries;
(d) Solicit any employee of Espey or any of its subsidiaries to
terminate his employment with Espey or any of its subsidiaries, or otherwise
knowingly interfere with Espey or its subsidiaries' relations with their
respective employees; or
(e) Interfere in any manner with the business or other activities of
Espey or its subsidiaries.
Because Espey does not have an adequate remedy at law to protect the
business of Espey and its subsidiaries from a breach by Pinsley of the
foregoing provisions of this Paragraph 7 or to protect its interests in the
trade secrets, privileged, proprietary or confidential information and
similar commercial assets of Espey and its subsidiaries from a breach by
Pinsley of the provisions of Paragraph 8, Espey shall be entitled to injunctive
relief, in addition to such other remedies and relief that would, in the event
of a breach of the provisions of Paragraph 7 and/or 8 of this Agreement, be
available to Espey.
8. Secret or Confidential Information. Except as shall be required by
order of any court or governmental agency of competent jurisdiction or except
as otherwise required by law, during the term of this Agreement and for a
period of eighteen (18) consecutive months after the Expiration Date
(a) Pinsley will not without the express written consent of Espey, divulge or
communicate to anyone other than Espey, or such persons, if any, designated by
it, any trade secret, production technique, engineering know-how or other
confidential information or any invention, discovery, improvement, device,
practice, process, method or product, whether or not patented or patentable,
directly or indirectly useful in or relating to any material aspect of the
business of Espey as conducted from time to time as to which Pinsley is, or at
any time during the term of his employment under this Agreement or at any time
prior thereto or thereafter, shall become informed of and which shall not be
generally known to the public or recognized as standard practice; or
(b) Pinsley shall not retain or use for the benefit of Pinsley or any third
person or entity (other than Espey or any affiliate thereof) any document or
papers used or owned or formerly used or owned by Espey or any of its
subsidiaries, which divulges or relates to any of the matters referred to in
clause (a) above; provided, that Pinsley shall not be responsible under this
Paragraph 8 for the actions of any third party.
9. Suits for Enforcement; Attorney's Fees and Expenses. In the event of
any dispute between Espey and Pinsley arising out of or to enforce or protect
rights under any of the provisions of this Agreement, either party may proceed
to enforce or protect such rights either by suit in equity or by action at
law, or both, whether for specific performance (or, as the case may be,
injunctive relief) of any covenant or agreement contained in this Agreement or
to enforce any payment hereunder or to enforce or to protect any other legal or
equitable right of such party hereunder. If Pinsley (or his estate) is the
prevailing party in any such suit, action or proceeding he (or his estate)
shall be entitled to recover in such suit, action or proceeding (or in a
separate action) from Espey his (or his estate's) reasonable attorney's fees
and other expenses and costs of enforcement, protection or collection incurred
in connection with or arising out of any such dispute, suit, action or
proceeding. Any amounts in an action awarded Pinsley for compensation,
damages, costs and expenses accrued, shall bear interest at an annual rate
equal to the prime rate of Espey's principal bank in effect from time to time
until paid. The provisions of this Paragraph 9 shall also inure to the
benefit of Pinsley's successors and legal representatives.
10. Miscellaneous.
(a) No breach of this Agreement by Pinsley shall be deemed willful
nor shall any claim of gross misconduct by him be a ground for termination
of this Agreement by Espey unless and until Pinsley shall fail to cure or
end such claimed breach of this Agreement or such conduct, or take
reasonable steps to cure, or end such breach or conduct, within thirty (30)
days after written notice delivered to him by Espey, which notice shall
specify the claimed breach or conduct and set forth in reasonable detail the
factual basis for such claim, provided, however, that, if Pinsley disputes
such claimed breach or conduct in a writing delivered to Espey within such
thirty (30) day period, then the period for curing or ending such claimed
breach or conduct or to endeavor to cure the same by taking reasonable steps in
furtherance of such cure, shall be tolled until ten business days after such
dispute is resolved by a final court order, and further provided that, until
such dispute is resolved by settlement or a final court order, the compensation
and benefits to Pinsley provided for in this Agreement shall continue to be
paid and accorded to him.
(b) This Agreement shall be binding upon Espey and its successors and
assigns, including any transferee of all or a substantial part of its assets or
any entity into which it is merged or by which it is acquired. The rights and
benefits of Pinsley under this Agreement are personal benefits to him; no such
right or benefit shall be subject to voluntary or involuntary alienation,
assignment or transfer, except for his estate and as otherwise provided herein.
(c) The waiver by either party of a breach or provision of this
Agreement by the other shall not operate or be construed as a waiver of any
subsequent breach or provision by such other party.
(d) This Agreement contains the entire agreement between the parties
with respect to the subject matter herein and Pinsley's employment as an
executive officer and as a NEO-employee. All prior discussions, compensation
understanding, negotiations and agreement are merged herein, effective
January 1, 1995. This Agreement and any provision thereof may not be orally
changed, waived or rescinded, but may only be changed, waived or rescinded by
an agreement to such effect in writing signed by the party against whom
enforcement of same is sought.
(e) The invalidity, illegality, or unenforceability of any provision
hereof shall not in any way affect, impair, invalidate or render unenforceable
this Agreement or any other provision hereof. If any court of competent
jurisdiction construes any restrictive covenants or any part hereof, to be
unenforceable because of the duration of such provision or the area covered
thereby, such court shall have the power to reduce the duration or area of such
provision and, in its reduced form such provision shall then be enforceable and
shall be enforced.
(f) Any notice, election or other action required or desired to be
served, given or delivered hereunder shall be in writing, and shall be deemed
to have been validly served, given or delivered upon deposit in the United
States Mail by registered or certified mail with proper postage prepaid and
addressed to the party to be notified as follows:
(a) If to Espey at:
Espey Mfg. & Electronics Corp.
P.O. Box 422
Saratoga Springs, NY 12866
(b) If to Pinsley at:
Sol Pinsley
359 Ballston Avenue
Saratoga Springs, NY 12866
or to such other address as either party may hereafter designate for itself or
himself by written notice to the other party in the manner herein prescribed.
(g) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date first above written.
ESPEY MFG. & ELECTRONICS CORP.
By: JOSEPH CANTERINO
SOL PINSLEY
STATE OF NEW YORK
SARATOGA COUNTY, SS.
At 4:20 PM , this 12th day of JUNE , 1995,
Joseph Canterino personally appeared and he acknowledged this instrument,
sealed and subscribed by him, to be his free act and deed and the free act and
deed of Espey Mfg. & Electronics Corp.
Before me SHEILA A. OSBORN
NOTARY PUBLIC
Originally Commissioned
Saratoga County
My Commission Expires
Dec. 30, 1996
STATE OF NEW YORK
SARATOGA COUNTY, SS.
At 4:20 PM , this 12th day of JUNE, 1995,
Sol Pinsley personally appeared and he acknowledged this instrument, sealed and
subscribed by him, to be his free act and deed.
Before me SHEILA A. OSBORN
NOTARY PUBLIC
Originally Commissioned
Saratoga County
My Commission Expires
Dec. 30, 1996
