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 



    3 


     

    

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.



    4 


     

    




(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:



    5 


     

    




(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




    6 


     

    

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.



    7 


     

    




(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 



    8 


     

    

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.



    9 


     

    




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]




 



    10 


     

    




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.




    11 


     

    


 


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.



 




    12 


     

    


 


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 



    13 


     

    

$____________ 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.



    14 


     

    




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.



    15 


     

    




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:


 


 


 


 



    16