Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On August 17, 2009, Espey Mfg. & Electronics Corp. (the "Company") entered an employment agreement with David O'Neil, the Company's Treasurer and Principal Financial Officer. The agreement provides that upon Mr. O'Neil's termination without cause prior to August 31, 2012, he will be provided his then current salary and benefits he was receiving at the time of his discharge including, but not limited to, health care benefits, with the exception of stock options and bonuses for a period of six months or until Mr. O'Neil starts other employment. The full text of the agreement is attached to this Report as Exhibit 10.2.

Item 9.01 Financial Statements, Pro Forma Financial Information and Exhibits

(c) Exhibits Exhibit No. Document ----------- -------- 10.2 Employment Agreement with David O'Neil dated August 17, 2009