EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT, dated as of January 16, 2018 (the “Agreement”), is
entered into by and between ESPEY MFG. & ELECTRONICS CORP., a New York
corporation (the “Company”), and PATRICK T. ENRIGHT, JR. (the “Executive”).

WHEREAS, the Executive has been serving the Company as its President and Chief
Executive Officer since on or about February 1, 2015, and the Company desires to
continue the services and employment of the Executive on behalf of the Company
in such capacities, and the Executive is willing to render such services on the
terms and conditions set forth herein (“Employment”).

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree as follows:

1.       Employment Term. Except for earlier termination as provided for in
Section 5 hereof, the Company hereby agrees to employ the Executive, and the
Executive hereby agrees to be employed by the Company, subject to the terms and
provisions of this Agreement, for the period commencing February 1, 2018 (the
“Effective Date”) and ending on the 3rd anniversary of such date (the
“Employment Term”); provided, however that the Employment Term shall be extended
for one additional year, unless either party gives prior written notice to the
other, at least sixty (60) days before the end of the then current term,
electing not to renew this Agreement.

2.       Extent of Employment.

(a)       Duties. During the Employment Term, the Executive shall serve as
President and Chief Executive Officer of the Company. In his capacity as
President and Chief Executive Officer, the Executive shall report solely to the
Company’s Board of Directors (the “Board”) and shall perform such senior
executive duties, services, and responsibilities on behalf of the Company
consistent with such position as determined by the Board and as may be assigned
to the Executive from time to time by the Board. During the Employment Term
Executive shall serve on the Board without additional compensation and subject
to paragraph 5(d) herein.

(b)       Exclusivity. During the Employment Term, the Executive shall devote
his full business time, attention, and skill to the performance of such duties,
services, and responsibilities, and shall use his best efforts to promote the
interests of the Company, and the Executive shall not engage in any other
business activity without the approval of the Board. The Board may grant or
withhold its approval in its exclusive discretion. The Executive shall be
permitted to serve on industry, trade, civic or charitable boards or committees,
and engage in charitable activities and community affairs to the extent such
service and activities do not interfere with his Employment.

(c)       Place of Employment. During the Employment Term, the Executive shall
perform his services hereunder in, and shall be headquartered at, the principal
offices of the Company in Saratoga Springs, New York, except for business travel
related to business and activities of the Company.

3.       Compensation and Benefits.

(a)       Base Salary. During the Employment Term, in full consideration of the
performance by the Executive of the Executive’s obligations hereunder (including
any services as an officer, employee, or member of any committee of any
affiliate of the Company, or otherwise on behalf of the Company), the Executive
shall receive from the Company a base salary (the “Base Salary”) at an annual
rate of $254,684.08 per year, payable in accordance with the normal payroll
practices of the Company then in effect. The Base Salary shall be subject to
annual review by the Board or the Compensation

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Committee of the Board. Pursuant to such annual review the Base Salary, as then
currently in effect, may be adjusted (but not decreased), at the discretion of
the Board.

(b)       Annual Bonus. During the Employment Term, the Executive shall also
receive, in respect of each fiscal year during which the Employment Term is in
effect, a performance-based cash bonus (the “CEO Annual Bonus”) as determined
and payable in accordance with Exhibit A hereto. The CEO Annual Bonus is in lieu
of any other bonus program which may be available to other management employees
of the Company.

(c)       Equity Compensation. The Executive shall be a participant in the
Company’s Employee Retirement Plan and Trust (“ESOP”) in accordance with the
terms and conditions of the ESOP. The Executive shall be entitled to the award
of stock options or other stock-based rights by the Board from time to time in
its discretion.

(d)       Benefits. During the Employment Term, the Executive and his eligible
dependents shall be entitled to participate in the employee health and benefit
plans, policies, programs, and arrangements as may be amended from time to time,
on the same terms as senior executives of the Company to the extent the
Executive meets the eligibility requirements for any such plan, policy, program,
or arrangement.

(e)       401(k) Retirement. During the Employment Term, the Executive shall be
entitled to participate in the Company 401(k) retirement plan on the same terms
as all other Company employees.

(f)       Vacation. During the Employment Term, four weeks of paid vacation
during each fiscal year to be used in accordance with the Company’s policies in
effect from time to time. Executive’s right to carry forward vacation time from
year to year and/or be paid for unused vacation shall be in accordance with the
Company’s policies in effect from time to time.

(g)       Expense Reimbursement. In addition to and not in lieu of any other
payments to be made to the Executive hereunder, the Company shall reimburse the
Executive for reasonable and documented business expenses incurred by the
Executive during the Employment Term in accordance with the Company’s expense
reimbursement policies then in effect, including but not limited to all travel,
lodging and meal expenses in connection with Executive’s travel in connection
with providing his services hereunder.

4.       Withholding. The Executive shall be solely responsible for taxes
imposed on the Executive by reason of any compensation and benefits provided
under this Agreement, during the Employment Term and thereafter, all such
compensation and benefits shall be subject to applicable withholding as
determined by the Company and the Executive shall cooperate with the Company, as
necessary, to enable the Company to discharge its withholding obligations.

5.       Termination.

(a)       Events of Termination. The Executive’s employment with the Company and
the Employment Term shall terminate upon the expiration of the Employment Term
or upon the earlier occurrence of any of the following events (the date of
termination, the “Termination Date”):

(i)       The termination of employment by reason of the Executive’s death.

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(ii)       The termination of employment by the Company for Cause.

(iii)       The termination of employment by the Company for Disability.

(iv)       The termination of employment by the Company other than for Cause.

(v)       The termination of employment by the Executive.

(b)       Certain Definitions. For purposes of this Agreement:

(i)       “Disability” means: (A) the Executive’s disability as determined under
the long-term disability plan of the Company as in effect from time to time; or
(B) if no such plan is in effect, the inability of the Executive to perform his
duties, services, and responsibilities hereunder by reason of a physical or
mental infirmity, as reasonably determined by the Board, for a total of 120 days
in any twelve-month period during the Employment Term.

(ii)       “Cause” means: as determined by the Board, (A) the failure of the
Executive to perform his duties or his negligent performance of such duties
(other than any such failure due to the Executive’s physical or mental illness)
that has caused or is reasonably expected to result in injury to the Company or
any of its affiliates; (B) the Executive having engaged in misconduct that has
caused or is reasonably expected to result in injury to the Company or any of
its affiliates; (C) a violation by the Executive of a Company policy that has
caused or is reasonably expected to cause an injury to the Company; (D) the
breach by the Executive of any of his obligations under this Agreement; (E)
failure by the Executive to timely comply with a lawful and reasonable direction
or instruction given to him by the Board; or (F) Executive having been convicted
of, or entering a plea of guilty or nolo contendere to a crime; provided
however, notwithstanding the foregoing, that in the case of clauses (A)-(E),
before the Company shall have the right to terminate the Executive for Cause,
(i) the Company shall first be required to give the Executive 10 days’ prior
written notice (the “Notice Period”) of such action, which written notice (the
“Breach Notice”) shall set forth in the nature of Executive’s alleged breach,
and, if such action is capable of being cured, the Executive shall not have
cured such action to the satisfaction of the Company within the Notice Period;
thereafter, the termination shall take effect with no further action required of
the Company.

(c)       Cooperation. In the event of termination of the Executive’s employment
for any reason (other than death), the Executive, at no cost to Executive, shall
cooperate with the Company and to be available to the Company for a reasonable
period of time thereafter with respect to matters arising out of the Executive’s
employment hereunder or any other relationship with the Company, whether such
matters are business-related, legal, or otherwise.

(d)       Resignation from All Positions. Upon termination of the Executive’s
employment for any reason, the Executive shall be deemed to have resigned from
all other positions with the Company including, without limitation, as an
officer and director, as applicable.

6.       Termination Payments. The Executive shall be entitled to certain
payments upon termination of his employment as follows:

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(a)       Termination for Cause; Voluntary Termination by Executive. In the
event that the Executive’s employment is terminated for Cause or the Executive
voluntarily terminates his employment, the Executive shall be entitled to
receive only: (i) any accrued and unpaid Base Salary as of the Termination Date;
and (ii) all accrued and unpaid benefits under any benefit plans, policies,
programs, or arrangements in which the Executive participated as of the
Termination Date in accordance with the applicable terms and conditions of such
plans, policies, programs, or arrangements (all of the foregoing, collectively,
the “Accrued Compensation”). In the event of termination for cause or voluntary
termination by Executive there shall be No CEO Annual Bonus.

(b)       Termination for Death or Disability. In the event that the Executive’s
employment is terminated pursuant to Section 5(a)(i) or 5(a)(iii) hereof, the
Executive shall be entitled to receive: (i) the Accrued Compensation; and (ii)
as provided in the CEO Annual Bonus.

(c)       Termination without Cause. In the event that the Executive’s
employment is terminated pursuant to Section 5(a)(iv) hereof, the Executive
shall be entitled to receive: (i) the Accrued Compensation; (ii) the CEO Annual
Bonus, as applicable, in accordance with its terms; (iii) severance pay
(“Severance Pay”) equal to nine months of Base Salary at the rate in effect on
the Termination Date. The severance pay contemplated by clause (iii) of the
immediately preceding sentence shall be paid in equal installments in accordance
with the Company’s regular payroll practices, commencing on the first payroll
period following the thirtieth day after the Termination Date; (iv) to the
extent available, continuation of medical benefits for a period of nine months
(from Termination Date). Severance Pay shall be paid only under this Section
6(c).

(d)       Release. Notwithstanding any other provision of this Agreement, no
Severance Pay or other benefits shall become payable under Section 6(c) of this
Agreement unless and until the Executive executes a general release of claims
substantially similar to the form of release annexed hereto as Exhibit B, and
such release has become irrevocable within 30 days following the Termination
Date, provided that the Executive shall not be required to release any
indemnification rights that he may have under the Company’s Certificate of
Incorporation or By-Laws.

(e)       Full Satisfaction. The payments to be provided to the Executive
pursuant to this Section 6 upon termination of the Executive’s employment shall
constitute the exclusive payments in the nature of severance or termination pay
or salary continuation that shall be due to the Executive upon a termination of
employment, and shall be in lieu of any other such payments under any plan,
program, policy, or other arrangement that has heretofore been or shall
hereafter be established by the Company.

7.       Executive Covenants.

(a)       Confidentiality. The Executive agrees and understands that in the
Executive’s position with the Company, the Executive will be exposed to and will
receive information relating to the confidential affairs of the Company,
including but not limited to, information regarding the Company’s ownership,
technical information, intellectual property, business and marketing plans,
strategies, customer information, other information concerning the products,
promotions, development, financing, expansion plans, business policies and
practices of the Company, and other forms of information considered by the
Company reasonably and in good faith to be confidential and in the nature of
trade secrets (“Confidential Information”). Confidential Information does not
include information that is or becomes widely available in any industry in which
the Company does business other than as a result of any act or omission by the
Executive in violation of this Agreement or law. The Executive agrees that
during the Employment

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Term and thereafter, the Executive shall not, other than on behalf of the
Company, disclose such Confidential Information, either directly or indirectly,
to any third person or entity without the prior written consent of the Company;
provided that disclosure may be made to the extent required by law, regulation,
or order of a regulatory body, in each case so long as the Executive gives the
Company as much advance notice of the disclosure as possible to enable the
Company to seek a protective order, confidential treatment, or other appropriate
relief. This confidentiality covenant has no temporal, geographical, or
territorial restriction. Upon termination of the Employment Term, the Executive
shall promptly supply to the Company: (i) all property of the Company; and (ii)
all notes, memoranda, writings, lists, files, reports, customer lists,
correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical
data, or any other tangible product or document containing Confidential
Information produced by, received by, or otherwise submitted to the Executive
during or prior to the Employment Term.

(b)       Noncompetition. By and in consideration of the Company entering into
this Agreement and the payments to be made and benefits to be provided by the
Company hereunder, and further in consideration of the Executive’s exposure to
Confidential Information, the Executive shall not, during the Noncompetition
Term (as defined below), directly or indirectly, own, manage, operate, join,
control, be employed by, or participate in the ownership, management, operation
or control of, or be connected in any manner with, including but not limited to
holding any position as a shareholder, director, officer, consultant,
independent contractor, employee, partner, or investor in, any Restricted
Enterprise (as defined below); provided that in no event shall ownership of less
than 1% of the outstanding equity securities of any issuer whose securities are
registered under the Securities and Exchange Act of 1934, as amended, standing
alone, be prohibited by this Section 7(b). Following termination of the
Employment Term, upon request of the Company during the Noncompetition Term, the
Executive shall notify the Company of the Executive’s then-current employment
status.

(c)       Nonsolicitation. During the Noncompetition Term, the Executive shall
not, and shall not cause any other person to: (i) interfere with or harm, or
attempt to interfere with or harm, the relationship of the Company with any
Restricted Person (as defined below); or (ii) endeavor to entice any Restricted
Person away from the Company.

(d)       Nondisparagement. During the Employment Term and thereafter, neither
the Executive, on the one hand, and the Company, its directors, officers, or
employees, on the other hand (collectively, the “Company Parties”), shall make
or publish any disparaging statements (whether written or oral) regarding the
other, except as shall be necessary for the Executive or the Company Parties to
enforce any agreements between the parties or to comply with any requirements or
obligations under law.

(e)       Proprietary Rights. The Executive assigns all of the Executive’s
interest in any and all inventions, discoveries, improvements, and patentable or
copyrightable works initiated, conceived, or made by the Executive, either alone
or in conjunction with others, during the Employment Term and related to the
business or activities of the Company to the Company or its nominee. Whenever
requested to do so by the Company, the Executive shall execute any and all
applications, assignments, or other instruments that the Company in good faith
deems necessary to apply for and obtain trademarks, patents, or copyrights of
the United States or any foreign country or otherwise protect the interests of
the Company therein. These obligations shall continue beyond the conclusion of
the Employment Term and the Noncompetition Term with respect to inventions,
discoveries, improvements, or copyrightable works initiated, conceived, or made
by the Executive during the Employment Term.

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(f)       Remedies. The Executive agrees that any breach of the terms of this
Section 7 would result in irreparable harm to the Company for which the Company
would have no adequate remedy at law; the Executive therefore also agrees that
in the event of such breach or any threat of breach, the Company shall be
entitled to seek equitable relief to prevent such breach, threatened breach, or
continued breach by the Executive and any and all persons or entities acting for
or with the Executive, in addition to any other remedies to which the Company
may be entitled at law or in equity including the recovery of reasonable
attorneys fees. The terms of this Section 7 shall not prevent the Company from
pursuing any other available remedies for any breach or threatened breach
hereof, including but not limited to, the recovery of damages from the Executive
including reasonable attorneys fees. The Executive and the Company further agree
that the provisions of the covenants contained in this Section 7 are reasonable
and necessary to protect the business of the Company because of the Executive’s
access to Confidential Information and his material participation in the
operation of such business. Should a court, arbitrator, or other similar
authority determine, however, that any provisions of the covenants contained in
this Section 7 are not reasonable or valid, either in period of time,
geographical area, or otherwise, the parties hereto agree that such covenants
are to be interpreted and enforced to the maximum extent to which such court or
arbitrator deems reasonable or valid. The existence of any claim or cause of
action by the Executive against the Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Company of the covenants contained in this Section 7.

(g)       Certain Definitions. For purposes of this Agreement:

(i)       The “Noncompetition Term” means the period beginning on the date of
this Agreement and ending 12 months following the Termination Date, provided
that if the Executive’s employment is terminated under Section 5(a)(iv) and the
Executive delivers the release substantially in the form of Exhibit B, the
Noncompetition Term for purposes of Section 7(b) only shall end seven months
following the Termination Date.

(ii)        “Restricted Enterprise” means: any person, corporation, partnership,
or other entity that is engaged in the Territory with a business or product
lines of the same or similar nature as those offered by the Company; For
purposes of this definition, “product lines of the same or similar nature as
those offered by the Company” shall also include, at any date, potential new
product lines the development of which the Company has, during the 12 months
preceding such date, devoted more than de minimis resources.

(iii)       “Restricted Person” means any person who at any time during the two
year period prior to the Termination Date, was an employee, independent
contractor or customer of the Company, or otherwise had a material business
relationship with the Company.

(iv)       The “Territory” means, the United States of America and other areas
of the world where the Company conducts business.

8.       Representations by the Executive. The Executive represents to the
Company that (i) his execution and performance of this Agreement does not
violate any agreement or obligation (whether or not written) that the Executive
has with or to any person or entity including, but not limited to, any prior
employer, (ii) he is not subject to the terms of any noncompetition,
non-solicitation or confidentiality agreement with any prior employer, and (iii)
he has not been convicted of, or entered a plea of guilty or nolo contendere to
a crime that constitutes a felony in any jurisdiction (or comparable crime in
any jurisdiction which uses a

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different nomenclature). In the event of a determination by the Board that the
Executive is in material breach of either of these representations, the Company
may terminate the Executive’s employment, and any such termination shall be
considered a termination for Cause under Section 5(a)(ii).

9.       No Waiver of Rights. The failure to enforce at any time the provisions
of this Agreement or to require at any time performance by any other party of
any of the provisions hereof shall in no way be construed to be a waiver of such
provisions or to affect either the validity of this Agreement or any part
hereof, or the right of any party to enforce each and every provision in
accordance with its terms.

10.       Notices. Every notice relating to this Agreement shall be in writing
and shall be given by personal delivery, by a reputable same-day or overnight
courier service (charges prepaid), by registered or certified mail, postage
prepaid, return receipt requested, or by facsimile to the recipient with a
confirmation copy to follow the next day to be delivered by personal delivery or
by a reputable same-day or overnight courier service to the appropriate party’s
address or fax number below (or such other address and fax number as a party may
designate by notice to the other party):

  If to the Executive: To the Executive at the address most recently contained
in the Company’s records.   If to the Company: Chairman of the Board     Espey
Mfg. & Electronics Corp.     233 Ballston Avenue     Saratoga Springs, New York
12866

11.       Binding Effect/Assignment. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs, executors,
personal representatives, estates, successors (including, without limitation, by
way of merger), and permitted assigns. Notwithstanding the provisions of the
immediately preceding sentence, the Executive shall not assign all or any
portion of this Agreement without the prior written consent of the Company.

12.       Entire Agreement. This Agreement sets forth the entire understanding
of the parties hereto with respect to the subject matter hereof and supersedes
all prior agreements, written or oral, between them as to such subject matter,
except that certain Confidentiality Agreement dated November 19, 2014 shall be
deemed part of this Agreement.

13.       Severability. If any provision of this Agreement, or any application
thereof to any circumstances, is invalid, in whole or in part, such provision or
application shall to that extent be severable and shall not affect other
provisions or applications of this Agreement.

14.       Governing Law; and Consent to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York, without reference to the principles of conflict of laws.

15.       Modifications and Waivers. No provision of this Agreement may be
modified, altered, or amended except by an instrument in writing executed by the
parties hereto. No waiver by any party hereto of any breach by any other party
hereto of any provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions at the time or at
any prior or subsequent time.

16.       Headings. The headings contained herein are solely for the purposes of
reference, are not part of this Agreement, and shall not in any way affect the
meaning or interpretation of this Agreement.

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17.       Applicability of Section 409A of the Code.

(a)       Generally. This Agreement is intended to comply with Sections 409A of
the Internal Revenue Code of 1986, as amended and the Treasury Regulations and
IRS guidance thereunder (“Section 409A”). Notwithstanding anything to the
contrary, this Agreement shall, to the maximum extent possible, be administered,
interpreted, and construed in a manner consistent with Section 409A. If any
provision of this Agreement provides for payment within a time period, the
determination of when such payment shall be made within such time period shall
be solely in the discretion of the Company.

(b)       Reimbursements. To the extent that any reimbursement, fringe or other
in-kind benefit, or other, similar plan or arrangement in which the Executive
participates during the Employment Term or thereafter provides for a “deferral
of compensation” within the meaning of Section 409A: (i) the amount of expenses
eligible for reimbursement provided to the Executive during any calendar year
will not affect the amount of expenses eligible for reimbursement or in-kind
benefits provided to the Executive in any other calendar year; (ii) the
reimbursements for expenses for which the Executive is entitled to be reimbursed
shall be made as soon as practicable following the date on which such expenses
were incurred and documented to the Company, but in no event later than the last
day of the calendar year following the calendar year in which the applicable
expense is incurred; (iii) the right to payment or reimbursement or in-kind
benefits hereunder may not be liquidated or exchanged for any other benefit; and
(iv) the reimbursements shall be made pursuant to objectively determinable and
nondiscretionary Company policies and procedures regarding such reimbursement of
expenses.

(c)       Termination Payments. If and to the extent required to comply with
Section 409A, no payment or benefit required to be paid under this Agreement on
account of termination of the Executive’s employment shall be made unless and
until the Executive incurs a “separation from service” within the meaning of
Section 409A. In addition, with respect to any payments or benefits subject to
Section 409A, reference to Executive’s “termination of employment” (and
corollary terms) from the Company shall be construed to refer to the Executive’s
“separation from service” (as determined under Treas. Reg. Section 1.409A-1(h),
as uniformly applied by the Company) from the Company and all entities
aggregated with the Company under Section 409A. Notwithstanding anything to the
contrary contained herein, if the Executive is a “specified employee” within the
meaning of Section 409A, and if any or all of the payments or the continued
provision of any benefits under Section 6 or any other provision of this
Agreement are subject to Section 409A and payable upon a separation from
service, then such payments or benefits that the Executive would otherwise be
entitled to receive during the first six months after termination of employment
shall be accumulated and paid or provided on the first business day after the
six-month anniversary of termination of employment (or within 30 days following
the Executive’s death, if earlier) in a single lump sum and any remaining
payments and benefits due under this Agreement shall be paid or provided in
accordance with the normal payment dates specified for them herein.

18.       Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

19.       Prior Agreement Superseded. This Agreement supersedes the Employment
Agreement between the Company and the Executive dated as of February 1, 2015, as
amended.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Company and the Executive have caused this Agreement to
be duly executed effective as of the day and year first above written.

 

  ESPEY MFG.& ELECTRONICS CORP.   By: /s/ David O’Neil     Name:  David O’Neil  
  Title:  Executive Vice President   EXECUTIVE   /s/ Patrick T. Enright, JR.  
PATRICK T. ENRIGHT, JR.

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EXHIBIT A

 

CEO Annual Bonus

 

Component     A

Discretionary Bonus

Up to 50% of Base Salary as determined by the board at its sole discretion.

  B

Increase in sales/ backlog

Dollar increase in combined sales and backlog vs. average of prior three years
combined sales and backlog times 0.5% (one half of one percent), not to exceed
50% of Base Salary

  C

Increase in operating earnings

Dollar Increase in operating earnings vs average of prior three years operating
earnings times 5% (five percent), not to exceed 50% of Base Salary

 

 

D Notes

Total Earned bonus (A+B+C) shall not exceed Base Salary.

 

Incentive on first $20 million of Aberdeen Tactical Power Supply order is
calculated using 10% of backlog related to that order. Full incentive earned on
Aberdeen sales and operating earnings.

 

Calculation of any bonus, or bonus component, shall be as determined by the
Board in its sole discretion. The Board, in its discretion, may modify any bonus
component but shall not decrease the potential benefit to Executive.

 

Executive must be employed as President and CEO on 31 December following the end
of the applicable fiscal year for the Executive to be eligible to receive the
CEO Annual Bonus.

 

Components B and C shall be determined based upon the Operating Income/ Sales
Backlog as reported in the Company’s Form 10-K for the applicable fiscal year.

 

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EXHIBIT B

SEPARATION AGREEMENT AND GENERAL RELEASE

This “Separation Agreement and General Release” (hereinafter “Release”), signed
by PATRICK T. ENRIGHT, JR. (hereinafter “you” or “your”) and in favor of Espey
Mfg. & Electronics Corp. (hereinafter “the Company”) is for the purpose of
amicably and fully resolving any and all claims, disputes and issues arising out
of your employment at the Company and the termination of that employment.

As your employment with the Company terminated on ____________ (“your
Termination Date”), and

As you have agreed to provide this Release to the Company in return for the
consideration set forth herein;

Therefore, in consideration of the mutual covenants and promises hereinafter
provided and of the actions to be taken pursuant thereto, you agree as follows:

1.       (a)       You hereby accept the sums set forth in Section 1(b) below.
Except as provided in said Section 1(b) and in Section 5 below, you will not be
entitled to any other compensation or benefits from the Company.

(b)       (i)       The Company will make severance payments to you in the gross
aggregate amount of $____________, (representing nine months of your base
salary) less all withholdings and deductions required by law, to be paid
according to your regular payroll cycle until fully paid.

(ii)       The Company will commence making severance payments to you beginning
on the first regular payroll after the thirtieth day following your Termination
Date.

(iii)       To the extent any taxes may be due on the payments provided in this
Agreement, beyond any withheld by the Company, you shall pay them yourself and
shall indemnify and hold the Company harmless from any tax claims or penalties
resulting from such payments. You further agree to provide the Company any and
all information pertaining to you upon request as reasonably necessary for the
Company and other entities released herein to comply with applicable tax laws.
You hereby acknowledge that the Company has not made any representations
regarding the tax consequences of the payments provided in this Release and that
the Company has not provided you with any tax advice regarding the payments
provided in this Release, including without limitation advice on the treatment
of the payments under Section 409A of the Internal Revenue Code.

(c)       You shall be entitled to any continuation of your medical benefits
until the end of the nine -month period during which severance pay is payable
pursuant to Section 1(b) above, at the same premium rate that active employees
of the Company pay for such medical benefits, with the Company paying the
difference between your premium rate and the cost of such medical benefits, as
permitted under Section 6(c) of the Employment Agreement dated ____________,
2018. Nothing in this Release shall affect your entitlement to continuation of
your medical benefits under Section 4980B of the Internal Revenue Code of 1986,
as amended, or similar state law.

OR i) If you elect to continue your medical benefits under COBRA, the Company
will pay your portion of the COBRA premium for the period during which severance
pay is payable pursuant to Section 1(b) above.

[If Applicable]       [The Company will make a payment to you in the gross
amount of

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$____________ in accordance with Section 6(c) Termination without Cause of the
Employment Agreement dated ____________, 2018.

2.       In exchange for the sums and benefits set forth above, you agree to
release the Company, its subsidiaries, its affiliated and related entities and
their current and former shareholders, officers, directors, agents, employees,
successors and assigns (hereinafter collectively the “Released Parties”) from
all claims, demands, actions, and liabilities, whether known or unknown (except
as expressly set forth in Section 4 below), you may have against them or any one
of them in any way related to your employment at the Company and/or the
termination of that employment. By way of example, the types of claims that are
covered under this Release include, but are not limited to:

(a)       all “wrongful discharge” claims, “constructive discharge” claims,
claims relating to any contracts of employment, expressed or implied, any
covenants of good faith and fair dealing, expressed or implied, any personal
wrongs or injuries and any claim for attorneys fees;

(b)       any claims that could be brought pursuant to Title VII of the Civil
Rights Act of 1964, 42 U.S.C. § 2000-1 et seq., the Age Discrimination in
Employment Act, 29 U.S.C. § 621 et seq., the Americans with Disabilities Act, 42
U.S.C. § 12101 et seq., the Employee Retirement Income Security Act, 29 U.S.C. §
1131 et seq., the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq. the
Lilly Ledbetter Fair Pay Act of 2009, Pub. L. No. 111L-2; the New York Human
Rights Law, McKinney’s Executive Law §290, et seq., (all as may have been
amended);

(c)       any claims that could be brought under any other federal, state,
county or municipal statute or ordinance dealing with (i) discrimination in
employment on the basis of sex, race, national origin, religion, disability,
age, marital status, affectional or sexual orientation or other reason; (ii)
employee whistleblower protection; and (iii) employee family leave rights; and

(d)       all other claims including those of which you are not aware and those
not specifically mentioned in this Release.

3.         (a)       You agree that you will never sue or otherwise institute a
claim of any kind against the Released Parties or any one of them for anything
that has happened up to now, whether such claim is presently known or unknown by
you, in any way related to your employment at the Company and/or the termination
of that employment.

(b)       If you breach the terms of this Release by suing the Company or the
Company’s personnel, you agree that you will pay all costs and expenses incurred
by the Company and the Company’s personnel in defending against the suit,
including reasonable attorneys’ fees.

(c)       Additionally, if you breach the terms of this Release, you agree that
the Company shall have the right to obtain, by way of counterclaim or other
lawful means, repayment of the full amount paid to you as consideration for this
Release.

4.       Notwithstanding anything in this Release to the contrary, this Release
does not include any claims you may have with respect to any medical,
prescription, dental, flexible spending account, life insurance, retirement and
savings or other benefits provided by plans maintained by the Company to which
you may be entitled, any rights that you may have under this Release, Company’s
Employee Stock Ownership Plan or outstanding stock options granted to you by the
Company, any rights to indemnification you may have under the Company’s
Certificate of Incorporation or By-Laws, or to any payments due you under this
Release.

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5.       You agree that you have executed this Release on your own behalf and
also on behalf of any heirs, agents, representatives, successors and assigns
that you may have now or in the future.

6.       You acknowledge and agree that the benefits provided herein exceed any
amount to which you would otherwise be presently entitled under the Company’s
policies, procedures and benefit programs and/or under any applicable law
without providing this Release, and constitute valuable consideration for this
Release.

7.       You acknowledge that, by requesting this Release, the Company does not
admit, expressly or implicitly, that it has engaged in any wrongdoing
whatsoever.

8.         (a)       You hereby acknowledge and agree that Section 7 of your
Employment Agreement dated ____________, 2018, which contains various covenants
as to Confidential Information, non-competition and non-solicitation shall
remain in full force and effect according to its terms.

(b)       You further acknowledge and represent that you have returned to the
Company all Confidential Information (including copies), all other documents,
and all tangible property of the Company, including, but not limited to, keys,
credit cards, cell phones, computers and other electronic equipment.

9.       You and the Company agree that neither you nor the Company will make
any statements, orally or in writing (including electronic communications), that
disparage the business reputation or good will of the Released Parties or any
one of them or of you.

10.       You agree to keep both the existence and the terms of this Release
completely confidential, except that you may discuss this Release with your
attorney, accountant or other tax professional, and your spouse, and (b) to the
extent necessary to enforce your rights hereunder.

11.       You acknowledge that you have been advised of the following:

(a)       you have the right to and should consult with an attorney prior to
signing this Release;

(b)       you have 21 days to decide whether to sign this Release and deliver it
to, ________________ at the Company’s offices, 233 Ballston Avenue, Saratoga
Springs, New York 12866.

(c)       if you sign this Release, you have up to 7 days to revoke it and the
Release will not become effective until this 7-day period has expired;

12.       This Release is not effective or enforceable for 7 days after you sign
it and you may revoke it during that time. To revoke, a written notice of
revocation must be delivered to, ________________ at the Company’s offices at
the above address, within 7 days after you sign this Release. The revocation
must be:

(a)       sent by certified mail within the 7-day period; and

(b)       properly addressed to ________________________ at the above address.

If ____________ does not receive a written verification in accordance with the
foregoing terms, you will not be able to rescind this Release.

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13.       You agree that this Release contains the entire agreement of the
parties and that this Release cannot be amended, modified, or supplemented in
any respect except by the written agreement of both parties.

14.       You agree that if any term or provision of this Release or the
application thereof to any alleged claim or party or circumstances, shall to any
extent be determined to be invalid, void, or unenforceable, the remaining
provisions and any application thereof shall nevertheless continue in full force
and effect without being impaired or invalidated in any way. The parties further
agree to replace any such void or unenforceable provision of this Release with a
valid and enforceable provision that will achieve, to the extent possible, the
economic, business or other purposes of the void or unenforceable provision.

15.       You agree that this Release shall be governed by the laws of the State
of New York without giving effect to any conflicts of law principles.

16.       This Agreement will not become effective until the expiration of the
7-day revocation period set forth in paragraph 12 above.

17.       You hereby acknowledge that you have read this Release in its
entirety, understand fully the meaning and significance of all its terms, and
hereby voluntarily and knowingly agree to accept all of its terms. You further
acknowledge that you have not relied on any representations, promises, or
agreements of any kind made to you in connection with your decision to sign this
Release except for the agreements set forth in the Release.

   _________________________       Date:

 

 

 

 

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