SCHEDULE 14A

                                 (Rule 14a-101)

                     INFORMATION REQUIRED IN PROXY STATEMENT

                            SCHEDULE 14A INFORMATION

                Proxy Statement Pursuant to Section 14(a) of the
               Securities Exchange Act of 1934 (Amendment No.   )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_]  Preliminary Proxy Statement
[_]  Confidential, For Use of the
     Commission Only (as permitted by Rule 14a-6(e)(2))
[X]  Definitive Proxy Statement
[_]  Definitive Additional Materials
[_]  Soliciting Material Under Rule 14a-12


                         Espey Mfg. & Electronics Corp.
--------------------------------------------------------------------------------
                (Name of Registrant as Specified In Its Charter)



--------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)


Payment of Filing Fee (Check the appropriate box):

[X]  No fee required.
[_]  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1)   Title of each class of securities to which transaction applies:

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2)   Aggregate number of securities to which transaction applies:

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3)   Per unit price or other underlying value of transaction  computed  pursuant
     to Exchange  Act Rule 0-11 (set forth the amount on which the filing fee is
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[_]  Fee paid previously with preliminary materials:

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[_]  Check box if any part of the fee is offset as provided by Exchange Act Rule
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     previously.  Identify the previous filing by registration statement number,
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     1)   Amount previously paid:

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     2)   Form, Schedule or Registration Statement No.:

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     3)   Filing Party:

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     4)   Date Filed:

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                         ESPEY MFG. & ELECTRONICS CORP.

                            -----------------------
                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                          TO BE HELD NOVEMBER 18, 2005
                            -----------------------


                                                                October 24, 2005

To the Shareholders of

      ESPEY MFG. & ELECTRONICS CORP.:


      You are cordially  invited to attend the Annual Meeting of Shareholders of
Espey Mfg. & Electronics Corp., which will be held at the Courtyard by Marriott,
11 Excelsior Avenue,  Saratoga Springs, New York, on November 18, 2005, at 10:00
a.m., Eastern Standard Time, for the following purposes:

      1.    To elect one Class B Director to serve for a two year term  expiring
            at the 2007 Annual  Meeting or until his  successor  is duly elected
            and qualifies; and

      2.    To elect  two  Class C  Directors  to serve  for a three  year  term
            expiring  at the  2008  Annual  Meeting  or until  their  respective
            successors are duly elected and qualify; and

      3.    To  ratify  the  appointment  of  Rotenberg  &  Company,  LLP as the
            Company's  independent public accountants for the fiscal year ending
            June 30, 2006.

      No other business may be transacted at the meeting.

      The Board of Directors has fixed the close of business on October 3, 2005,
as the record  date for the  purpose of  determining  shareholders  entitled  to
notice of, and to vote at, said meeting or any  adjournment  thereof.  The books
for transfer of the Company's capital stock will not be closed.

      Even if you  expect to attend the  meeting  in person,  it is urged by the
Company that you mark,  sign, date and return the enclosed proxy.  The proxy may
be revoked at any time before it is voted and  shareholders  who execute proxies
may  nevertheless  attend the  meeting  and vote their  shares in person.  Every
properly signed proxy will be voted as specified unless previously revoked.


                                            By Order of the Board of Directors,

                                                   /s/ Peggy A. Murphy

                                                     PEGGY A. MURPHY
                                                   Corporate Secretary


      Please make your  specification  and sign and date the enclosed  proxy and
mail it promptly in the accompanying pre-addressed, postage-free envelope.



                         ESPEY MFG. & ELECTRONICS CORP.
                               233 Ballston Avenue
                        Saratoga Springs, New York 12866

                                 PROXY STATEMENT

      The enclosed  proxy is solicited by the Board of Directors of Espey Mfg. &
Electronics Corp. (the "Company") for use in voting at the Annual Meeting of the
Shareholders  of the  Company  to be  held  at the  Courtyard  by  Marriott,  11
Excelsior  Avenue,  Saratoga  Springs,  New York, on November 18, 2005, at 10:00
a.m., Eastern Standard Time, and at any postponement or adjournment thereof, for
the purposes set forth in the attached Notice of Meeting. It is anticipated that
the Notice of Annual Meeting of Shareholders,  this Proxy Statement and the form
of proxy will be mailed on or about October 24, 2005.

                       VOTING AND REVOCABILITY OF PROXIES

      Every  properly  dated,  executed and returned  proxy will be voted at the
Annual Meeting in accordance  with the  instructions of the  shareholder.  If no
specific  instructions are given,  the shares  represented by such proxy will be
voted  for the  election  of the  Class B  Director  and the  Class C  Directors
nominated  by the Board of  Directors.  Any  shareholder  giving a proxy has the
power to revoke it at any time prior to the  voting  thereof by voting in person
at the Annual  Meeting,  by giving written notice to the Secretary  prior to the
Annual  Meeting,  or by signing and  delivering a new proxy card bearing a later
date.

      The Company's  only class of voting  securities  is its Common Stock,  par
value  $.33-1/3  per share (the  "Common  Stock").  Each  share of Common  Stock
outstanding  on the record date will be entitled to one vote on all matters.  In
accordance with the Company's  By-Laws and applicable state law, the election of
directors  will be determined by a plurality of the votes cast by the holders of
shares of Common  Stock  present and entitled to vote  thereon,  in person or by
proxy, at the Annual Meeting.  Shares present which are properly  withheld as to
voting with respect to any one or more nominees, and shares present with respect
to which a broker  indicates  that it does not have  authority to vote  ("broker
non-vote")  will  not be  counted.  Cumulative  voting  in  connection  with the
election  of  directors  is  not  permitted.  The  affirmative  vote  of  shares
representing  a majority of the votes cast by the holders of shares  present and
entitled to vote is required to approve the other  matters to be voted on at the
Annual Meeting. Shares, which are voted to abstain and broker non-votes, are not
counted as votes cast on any matter to which they relate.

      The By-Laws of the Company  provide that the majority of the shares of the
Common Stock of the Company issued and outstanding and entitled to vote, present
in person or by proxy, shall constitute a quorum at the Annual Meeting.  Shares,
which are voted to abstain,  are considered as present at the Annual Meeting for
the purposes of  determining a quorum.  Broker  non-votes are  considered as not
present at the Annual Meeting for the purposes of determining a quorum.

                         RECORD DATE AND SHARE OWNERSHIP

      Only  holders of Common Stock of record on the books of the Company at the
close of business  on October 3, 2005 will be  entitled to vote at the  meeting.
There were outstanding and entitled to vote on October 3, 2005, 1,151,212 shares
of Common Stock.

                              ELECTION OF DIRECTORS

      The Company's Certificate of Incorporation,  as amended, provides that the
Board of  Directors  shall  consist  of not less  than  three nor more than nine
persons with the actual  number  determined  in  accordance  with the  Company's
bylaws.  The Certificate of  Incorporation  further provides that there shall be
three  classes  of  directors  (Class A,  Class B and Class C) with  overlapping
three-year  terms and that all  classes  shall be as  nearly  equal in number as
possible.

      Following  the death in November 2004 of director  William P. Greene,  the
Board of Directors fixed the present number of directors at seven.  The terms of
three Class C Directors expire at the Annual Meeting.  There are presently three
Class A Directors,  whose terms expire at the 2006 Annual Meeting,  and only one
Class B Director,  whose term  expires at the 2007 Annual  Meeting.  In order to
comply with the provisions of the Company's  governing  documents  requiring the
Classes to be as nearly equal in number as possible,  the Board of Directors has
reclassified one Class C Director as a Class B Director.

      Accordingly,  the Board of Directors has nominated one person to stand for
election  as a Class B  Director  and has  nominated  two  persons  to stand for
election as a Class C Director.

      The votes will be cast pursuant to the enclosed  proxy for the election of
each of the Class B and Class C nominees  named below  unless  specification  is
made withholding such authority. Each of the nominees is presently a director of
the  Company.


                                       1


Should  any  of  said  nominees  for  Class  B  and  Class  C  Directors  become
unavailable,  which is not anticipated,  the proxies named in the enclosed proxy
will vote for the election of such other  persons as the Board of Directors  may
recommend.  Proxies  may not be voted for a greater  number of persons  than the
nominees named.

      The names and  business  experience  for the past five  years of the three
persons who have been  nominated by the Board of Directors to stand for election
as  Class B and  Class C  Directors  at the  Annual  Meeting  and the  remaining
directors  whose  terms are  continuing  until the 2006 or 2007  Annual  Meeting
appear below.

      The Board has  determined  that the Board  members  with the  exception of
Howard Pinsley and Barry Pinsley are  independent in accordance with the listing
standards of the American Stock Exchange.

      THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE FOLLOWING
NOMINEES FOR CLASS B DIRECTOR AND CLASS C DIRECTORS.




                                    NOMINEE FOR CLASS B DIRECTOR -- SERVING FOR
                                A TWO YEAR TERM EXPIRING AT THE 2007 ANNUAL MEETING
                                                                                                                 Period to
                                              Offices and                                                           Date
                                            Positions Held                                                       Served as
       Name                   Age            with Company             Principal Occupation or Employment         Director
       ----                   ---            ------------             ----------------------------------         --------
                                                                                                       
Barry Pinsley (1)...........  63        Non-Executive Officer      Certified Public Accountant who for five        1994
                                                                   years acted as a consultant to the Company
                                                                   prior to his election as a Vice President-
                                                                   Special Projects on March 25, 1994. On
                                                                   December 6, 1997, Mr. Pinsley was elected
                                                                   to the position of Vice President-Investor
                                                                   Relations and Human Resources, from which
                                                                   he resigned on June 9, 1998. Mr. Pinsley
                                                                   has been a practicing Certified Public
                                                                   Accountant in Saratoga Springs, New York
                                                                   since 1975, and is currently semi-retired.

                                  NOMINEES FOR CLASS C DIRECTORS -- SERVING FOR A
                                THREE YEAR TERM EXPIRING AT THE 2008 ANNUAL MEETING
                                                                                                                   Period to
                                              Offices and                                                            Date
                                            Positions Held                                                         Served as
       Name                   Age            with Company             Principal Occupation or Employment           Director
       ----                   ---            ------------             ----------------------------------           --------
                                                                                                       
Paul J. Corr................  61                  --                Certified Public Accountant and a Professor       1992
                                                                    of Business, Skidmore College, in Saratoga
                                                                    Springs, NY, since 1981, currently holding
                                                                    the position of Associate Professor; Mr. Corr
                                                                    is also a shareholder in the Latham, New York
                                                                    accounting firm of Rutnik, Matt & Corr, P.C. and
                                                                    a principal in Capital Financial Advisors, LLC
                                                                    since 2003.

Michael W. Wool (2).........  59                  --                Attorney engaged in private practice              1990
                                                                    of law and Senior Partner since 1982 in
                                                                    the law firm of Langrock, Sperry & Wool,
                                                                    with offices in Burlington, VT and
                                                                    Middlebury, VT. Mr. Wool also serves on
                                                                    the board of the New England Board of
                                                                    Higher Education and the Burlington Boys
                                                                    and Girls Club.


                                       2


                                         CLASS A DIRECTORS -- SERVING FOR A
                                THREE YEAR TERM EXPIRING AT THE 2006 ANNUAL MEETING

                                                                                                                 Period to
                                              Offices and                                                           Date
                                            Positions Held                                                       Served as
       Name                   Age            with Company             Principal Occupation or Employment         Director
       ----                   ---            ------------             ----------------------------------         --------
                                                                                                       
Howard Pinsley (1)..........  65          President, Chief        Howard Pinsley for more than the past five       1992
                                          Executive Officer       years has been employed by the Company
                                          and Chairman of         on a full-time basis as Program Director
                                          the Board               prior to being elected Vice President-
                                                                  Special Power Supplies on April 3, 1992.
                                                                  On December 6, 1996, Mr. Pinsley was
                                                                  elected to the position of Executive Vice
                                                                  President. On June 9,1998 he was elected
                                                                  to the positions of President and Chief
                                                                  Operating Officer. Subsequently he became
                                                                  Chief Executive Officer and Chairman of
                                                                  the Board.

Alvin O. Sabo...............  62                  --              Attorney engaged in private practice of law       1999
                                                                  and Senior Partner of the law firm of
                                                                  Donohue, Sabo, Varley & Armstrong, P.C.
                                                                  in Albany, NY since 1980. Prior to that
                                                                  position, he was Assistant Attorney General,
                                                                  State of New York, Department of Law
                                                                  for eleven years.

Carl Helmetag...............  57                  --              President and CEO of UVEX Inc. in                 1999
                                                                  Providence, RI. From 1996 to 1999, he was
                                                                  President and CEO of HEAD USA Inc.
                                                                  Prior to that position, Mr. Helmetag was
                                                                  Executive Vice President and then President
                                                                  at Dynastar Inc. from 1978 to 1996. He is
                                                                  an MBA graduate from The Wharton School
                                                                  of Business, University of Pennsylvania.

                                    CONTINUING CLASS B DIRECTOR -- SERVING FOR A
                                THREE YEAR TERM EXPIRING AT THE 2007 ANNUAL MEETING
                                                                                                                 Period to
                                              Offices and                                                           Date
                                            Positions Held                                                       Served as
       Name                   Age            with Company             Principal Occupation or Employment         Director
       ----                   ---            ------------             ----------------------------------         --------
                                                                                                       
Seymour Saslow..............  84                  --              Mr. Saslow was Senior Vice President from         1992
                                                                  1992 until December 31, 1999. From 1973
                                                                  until being elected Senior Vice President, he
                                                                  served as Vice President. He joined the company
                                                                  on July 22, 1952. Mr. Saslow graduated from the
                                                                  City College of New York in 1944 with a degree
                                                                  in electrical engineering and is a senior member
                                                                  of the Institute of Electrical and Electronics
                                                                  Engineers Inc. He holds many patents and serves
                                                                  on the board of several charitable organizations.


----------
(1)   Barry Pinsley and Howard Pinsley are cousins.

(2)   Mr. Wool's law firm  performed  legal  services for the Company during the
      fiscal year ended June 30, 2005 and may perform additional services during
      the  current  fiscal  year in  connection  with the  Company's  ESOP.  See
      "Certain Relationships and Related Transactions."

      Howard  Pinsley serves as a director of All American  Semiconductor,  Inc.
None of the other  directors  holds a  directorship  in any other company with a
class of securities registered pursuant to Section 12 of the Securities Exchange
Act of 1934 or subject to the  requirements  of Section 15(d) of the  Securities
Act of 1933  or any  company  registered  as an  Investment  Company  under  the
Investment Company Act of 1940.


                                       3


      The  only  individuals  currently  considered  executive  officers  of the
Company not identified above are:

      Katrina L. Sparano,  34,  Assistant  Treasurer  and  Principal  Accounting
Officer of the Company  since  November  12,  2004.  Ms.  Sparano is a Certified
Public  Accountant.  Prior to joining the Company on July 29, 2004,  she was the
Assistant Controller for Cambridge Heart, Inc.

      Peggy A. Murphy, 47, Secretary of the Company since December 11, 1998. She
has been  employed by the Company as Director of Human  Resources  since October
1998.

      David A. O'Neil,  40,  Treasurer  and  Principal  Financial  Officer since
January 4, 2000.  Mr.  O'Neil is a Certified  Public  Accountant  who,  prior to
joining the Company, was a Senior Manager at the accounting firm of KPMG LLP.

      The terms of office of Mrs. Peggy A. Murphy, Mr. David A. O'Neil, and Mrs.
Katrina  Sparano  are until the next  annual  meeting of the Board of  Directors
unless  successors are sooner  appointed by the Board of Directors.  The term of
office of Mr. Howard  Pinsley is subject to his  employment  agreement  with the
Company. See "Employment Contracts and Termination of Employment."

                   BOARD OF DIRECTORS MEETINGS AND COMMITTEES

      During  the  Company's  fiscal  year  ended  June 30,  2005,  the Board of
Directors  held a total of seven  meetings,  and each  director  then in  office
attended  at least  75% of such  meetings.  Under  the  policies  of the  Board,
Directors  are  expected  to attend  regular  Board  meetings,  Board  committee
meetings,  as  applicable,  and  the  annual  stockholder  meeting.  All  of the
Company's directors attended the 2004 Annual Meeting.

      The Board has a standing Audit  Committee  whose members are Paul J. Corr,
Chairman,  Alvin O. Sabo and Carl  Helmetag.  The  functions  of this  Committee
include reviewing the engagement of the independent  accountants,  the scope and
timing of the audit and any non-audit services to be rendered by the independent
accountants,  reviewing  with the  independent  accountants  and  management the
Company's policies and procedures with respect to internal auditing,  accounting
and financial controls, and reviewing the report of the independent  accountants
upon  completion of its audit.  During the fiscal year ended June 30, 2005,  the
Audit Committee held five meetings,  and each Committee member attended at least
75% of such meetings.

      The Board has a  standing  Nominating  Committee  whose  members  are Carl
Helmetag,  Chairman,  Michael  Wool,  and  Paul  J.Corr.  The  function  of this
Committee is to identify and recommend to the Board  individuals  for nomination
to fill  vacancies in, and for  renomination  to,  positions as Directors of the
Corporation.  During fiscal year ended June 30, 2005, the  Nominating  Committee
held one meeting and each committee member attended the meeting.

      The Board has  determined  that all of the members of the Audit  Committee
and the Nominating Committee meet the independence  criteria for audit committee
and nominating  committee  members as set forth in the listing  standards of the
American  Stock  Exchange.  The  Board  has  further  determined  that Mr.  Corr
qualifies as an audit committee financial expert in accordance with the rules of
the United States Securities and Exchange Commission ("SEC").

      The Board has a standing Stock Option  Committee whose current members are
Paul Corr,  Chairman,  Howard Pinsley,  and Barry Pinsley. The functions of this
Committee include  determining to whom, and the time or times at which,  options
will be granted,  the number of shares of common  stock that underly each option
and the exercise price and vesting  schedule for options granted pursuant to the
Company's  2000 Stock Option  Plan.  During the fiscal year ended June 30, 2005,
the Stock Option  Committee held two meetings and each committee member attended
such meetings.

                            COMPENSATION OF DIRECTORS

      Directors  of the  Company  receive an annual fee in the amount of $15,000
for being a member of the Board of Directors. Each Director who also serves as a
member of the Audit Committee is compensated an additional annual fee of $5,000.
Each director who serves as a member of the Succession  Committee or the Mergers
and  Acquisition   Committee  is  compensated  an  additional  $2,500  for  each
committee. These fees are paid monthly to the Directors.  Executive officers who
also serve on the Company's Board of Directors do not receive director's fees.


                                       4



      Directors  are also eligible to receive stock options under the 2000 Stock
Option Plan at the  discretion of the Stock Option  Committee.  The Stock Option
Committee  consists of three appointed board members.  At June 30, 2005, members
of the Board of  Directors  held the  following  number of  unexercised  options
granted under the Plan:

      Name                    Number of Options            Exercise Price Range
      ----                    -----------------            --------------------

Seymour Saslow                      2,000                     $17.95 - 22.50

Barry Pinsley                       2,000                      17.95 - 22.50

Michael W. Wool                     2,000                      17.95 - 22.50

Paul J. Corr                          600                              22.50

Alvin O. Sabo                       1,900                      17.95 - 22.50

Carl Helmetag                       1,200                      18.50 - 22.50

Howard Pinsley                      8,000                      17.95 - 22.50

The above options have exercise dates ranging from March 1, 2003 and expiring on
August 20, 2014.

                       COMPENSATION OF EXECUTIVE OFFICERS

      The following  table  summarizes the annual  compensation  for each of the
fiscal years ended June 30, 2005,  June 30, 2004,  and June 30, 2003 received by
the Company's Chief Executive  Officer (or acting in a similar capacity) and the
other highest paid executive officers of the Company that received over $100,000
in total compensation as of June 30, 2005.



                                            SUMMARY COMPENSATION TABLE

                                                                                           Long Term
                                                                                         Compensation
                                                                                         ------------
                                                                                          Securities
          Name and                                          Annual Compensation           Underlying       All Other
     Principal Position            Fiscal Year          Salary              Bonus         Options (#)   Compensation(1)
     ------------------            -----------          ------              -----         -----------   ---------------
                                                                                            
Howard Pinsley                        2005             $191,976            $20,000           2,000         $ 7,681
  President and                       2004             $190,120            $20,000               0         $34,826
  Chief Executive Officer             2003             $180,404            $12,500           2,000         $19,109

David A. O'Neil                       2005             $113,830            $12,500             800         $ 2,932
  Treasurer and Principal             2004             $112,250            $12,500               0         $13,101
  Financial Officer                   2003             $105,490            $10,000             800         $10,738



----------
(1)   Represents  (a) the cash and market value of the shares  allocated for the
      respective  fiscal years under the  Company's  ESOP to the extent to which
      each  named  executive  officer  is  vested,  and the  Company's  matching
      contribution under the 401K plan.


                                       5



                        OPTION GRANTS IN LAST FISCAL YEAR

      The following table sets forth  information  concerning the grant of stock
options to the named executive officers during the year ended on June 30, 2005.



                                                                                                          Potential
                                                                                                          Realizable
                                                                                                           Value at
                                                                                                        Assumed Annual
                              Number of     Percent of                                                  Rates of Stock
                             Securities    Total Options                                              Price Appreciation
                             Underlying     Granted to        Exercise                                for Option Term (1)
                               Options     Employees in         Price          Expiration           -----------------------
      Name                     Granted      Fiscal Year        ($/SH)              Date             5% ($)           10% ($)
      ----                     -------      -----------        ------              ----             -----------------------

                                                                                                  
Howard Pinsley                  2,000          12.9%           $22.50              2014              73,300         116,718

David A. O'Neil                   800           5.2%           $22.50              2014              29,320          46,687



----------
(1)   Amounts reflect  certain  assumed rates of  appreciation  set forth in the
      Commission's  executive  compensation  disclosure rules.  Actual gains, if
      any, on stock option  exercises  will depend on future  performance of the
      Common Stock. No assurance can be made that the amounts reflected in these
      columns will be achieved. The values in these columns assume that the fair
      market value on the date of grant of each option was equal to the exercise
      price thereof.

      The following table sets forth information  concerning unexercised options
held on June 30, 2005 by the named executive officers:



                      AGGREGATED OPTIONS AT FISCAL YEAR-END AND FISCAL YEAR-END OPTION VALUES

                                                                    Number of Securities           Value of Unexercised
                                 Shares                            Underlying Unexercised              In-the-Money
                                Acquired                                 Options at                     Options at
                                   On              Value             Fiscal Year-End (#)            Fiscal Year-End ($)
      Name                      Exercise         Realized         Exercisable/Unexercisable      Exercisable/Unexercisable
      ----                      --------         --------         -------------------------      -------------------------
                                                                                         
Howard Pinsley                      0                0                   6,000/2,000                  72,200/16,600

David A. O'Neil                     0                0                    1,600/800                   18,600/6,640



In  accordance  with the 2000 Stock Option Plan the above  options have exercise
dates that range from March 1, 2003 through and expiring on August 20, 2014.

                                    INSURANCE

      The  executive  officers  and  directors  of the  Company  can elect to be
covered under the  company-sponsored  health plans, which do not discriminate in
favor of the  officers,  or  directors  of the Company  and which are  available
generally to all  employees.  In addition,  the  executive  officers are covered
under a group life plan,  which does not  discriminate,  and is available to all
employees.

      The Company maintains insurance coverage,  as authorized by Section 726 of
the New York Business  Corporation Law,  providing for (a)  reimbursement of the
Company  for  payments  it makes to  indemnify  officers  and  directors  of the
Company,  and (b) payment on behalf of officers and directors of the Company for
losses, costs and expenses incurred by such individuals in any actions.

                       EMPLOYEE RETIREMENT PLAN AND TRUST

      Under the  Company's  ESOP,  approved by the Board of Directors on June 2,
1989, effective July 1, 1988, all non-union employees of the Company,  including
the Company's executive and non-executive  officers are eligible to participate.
The ESOP is a  non-contributory  plan,  which is designed to invest primarily in
shares  of  common  stock  of the  Company.  Certain  technical  amendments  not
considered  material were adopted  effective as of June 10, 1994,  July 1, 2003,
and July 1, 2005.

      Of the  230,120  shares  of  common  stock  of the  Company  allocated  to
participants  of the ESOP as of June 30, 2005,  10,883 shares were  allocated to
Howard Pinsley,  2,418 shares were allocated to David A. O'Neil and 2,582 shares
were allocated to Barry Pinsley.


                                       6


               EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT

      The Company entered into an agreement with Howard  Pinsley,  President and
CEO effective July 1, 2002. The contract allows Mr. Pinsley upon his resignation
or termination to become a non-executive  officer of the Company for a period of
thirty-six  months.  In consideration for services to be provided by Mr. Pinsley
for the equivalent of two days a month after his resignation or termination, and
to perform duties as reasonably  requested by the Company,  he will receive full
benefits plus $15,000 per month for the first three months, and $4,333 per month
for the next thirty-three consecutive months. This agreement expires on December
31, 2005.

                             AUDIT COMMITTEE REPORT

      The  Audit  Committee  of the  Board of  Directors  (the  "Committee")  is
comprised of three  independent  directors and operates under a written charter,
adopted by the Board on May 13,  2005,  which is  attached  as Exhibit A to this
Proxy Statement.

      In  fulfilling  its  responsibilities,  the  Committee  has  reviewed  and
discussed the Company's audited consolidated financial statements for the fiscal
year ended June 30, 2005 with management and the independent auditors.

      The  Committee  has discussed  with the  independent  auditors the matters
required  to  be  discussed  by   Statement  on  Auditing   Standards   No.  61,
Communication with Audit Committees. In addition, the Committee has received and
reviewed the written  disclosures and the letter from the  independent  auditors
required by  Independence  Standard No.1,  Independence  Discussions  with Audit
Committees, and has discussed with the auditors the auditors' independence.

      The Committee  considered  and  concluded  that the provision of non-audit
services by the  independent  auditors was  compatible  with  maintaining  their
independence.

      In  reliance  on the  reviews  and  discussions  referred  to  above,  the
Committee  recommended to the Board of Directors  that the audited  consolidated
financial  statements  referred  to above be included  in the  Company's  Annual
Report on Form 10-K for the fiscal year ended June 30, 2005.

                                                          Audit Committee:
                                                          Paul J. Corr, Chairman
                                                          Carl Helmetag
                                                          Alvin O. Sabo

                              NOMINATING COMMITTEE

      The  Nominating  Committee  of the  Board of  Directors  (the  "Nominating
Committee")  is comprised of three  independent  directors and operates  under a
written charter,  which was most recently filed with the SEC as Exhibit B to the
Company's  Proxy  Statement for its Annual  Meeting held on November 12, 2004. A
copy of the charter is available on the Company's website, www.espey.com,  under
                                                           -------------
the tab  "Investors"  by requesting a copy of an SEC report and then clicking on
the Definitive Proxy Statement filed October 12, 2004.

      The  Nominating  Committee  will review the present needs of the Board and
establish  criteria as to particular  qualifications  in terms of background and
experience  that could meet such needs. At a minimum,  the Nominating  Committee
believes  that  nominees  for  Directors  should have either  experience  in the
industry  in which the  Company  engages or  professional,  business or academic
qualifications  that differ from existing members of the Board and could augment
the aggregate expertise possessed by Board members. The Company further believes
that all nominees  should be able to make a contribution  to the Board that will
enhance the  development  and growth of the  Company  business  and  shareholder
value;  devote adequate time to service as a Director;  and work well with other
Board members in a collegial manner.

      The Nominating Committee evaluates  prospective nominees identified on its
own  initiative  or  referred  to  it  by  other  Board   members,   management,
shareholders  or  external  sources  and  all  self  nominated  candidates.  The
Nominating Committee uses the same criteria for evaluating  candidates nominated
by shareholders  and self nominated as it does for those proposed by other Board
members, management and search companies.

      The  Nominating  Committee  will  consider  bona fide  recommendations  by
shareholders as to potential Director nominees,  who meet the above standards. A
shareholders  wishing  to submit  such a  recommendation  should  send a letter,
postmarked no later than 120 days prior to the date on which the Company  annual
meeting was held during the prior year,  to the  Secretary of the  Company.  The
letter  must  identify  its writer as a  shareholders  of the  Company,  provide
evidence of the writer's stock ownership and provide:

      o     The name,  address,  telephone  number and social security number of
            the candidate to be considered;


                                       7


      o     A description of understandings,  contractual,  business or familial
            relationships  between the shareholders  and the candidate,  if any,
            and an  unexecuted  written  consent of the  candidate to serve as a
            director of the Company, if nominated and elected;

      o     The candidate's resume and at least three references;

      o     A statement of the candidate's  qualifications to serve on the Board
            of Directors and specified Board  committees  which shall include an
            explanation  as to how elements of the  candidate's  background  and
            experience would be a benefit to the Company and its business.

      All  candidates  recommended  to the  Nominating  Committee  must meet the
independence  standards of the American  Stock  Exchange and the  definition  of
"independent director" in the Company by-laws.

      All nominees for election at this Annual Meeting were  previously  elected
by the shareholders and are standing for re-election.

                    SHAREHOLDER COMMUNICATIONS WITH THE BOARD

      Mail can be addressed to Directors in care of the Office of the Secretary,
Espey Mfg. & Electronics Corp. 233 Ballston Avenue,  Saratoga Springs,  New York
12866.  At the  direction of the Board of  Directors,  all mail received will be
opened and screened for security purposes.  The mail will then be logged in. All
mail, other than trivial or obscene items, will be forwarded. Trivial items will
be  delivered  to the  Directors  at the  next  scheduled  Board  meeting.  Mail
addressed  to a  particular  Director  will be  forwarded  or  delivered to that
Director.  Mail addressed to "Outside  Directors" or "Non-Management  Directors"
will be forwarded or  delivered  to the  Chairman of the Audit  Committee.  Mail
addressed  to the "Board of  Directors"  will be  forwarded  or delivered to the
Chairman of the Board.

                 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

      The  following  table sets forth  information  regarding  ownership of the
Company's  outstanding  Common Stock as of September 30, 2005, by each person or
group who is known to the Company to be the  beneficial  owner of more than five
percent of the outstanding shares of Common Stock.




Title                               Name and Address of                       Amount and Nature                      Percent
Class                                Beneficial Owner                      of Beneficial Ownership                  of Class
-----                                ----------------                      -----------------------                  --------
                                                                                                           
Common Stock                   Franklin Advisory Services, LLC                78,000 - Direct (1)                     6.77%
                               777 Mariners Island Blvd
                               P.O. Box 7777 San Mateo, CA 94403-7777

Common Stock                   Espey Mfg. & Electronics Corp.                369,738 - Direct (2)                    32.11%
                               Employee Retirement Plan and Trust
                               233 Ballston Ave
                               Saratoga Springs, NY 12866

Common Stock                   Advisory Research, Inc.                        81,100 - Direct (3)                     8.02%
                               180 North Stetson St.
                               Suite 5780
                               Chicago, IL 60601

Common Stock                   Howard Pinsley,                                  48,634-Direct (4)                     5.14%
                               233 Ballston Avenue                            10,883-Indirect (4)
                               Saratoga Springs, NY 12866


----------
(1)   The information as to the number of shares of Common Stock and the percent
      of class ownership of the Company that may be deemed beneficially owned by
      Franklin  Advisory  Services,  LLC  ("Franklin") is from the Schedule 13G,
      dated   February  4,  2004  filed  with  the   Securities   and   Exchange
      Commission(the  "SEC"). The Franklin  statement  indicated that Franklin's
      investment "advisory subsidiaries," have sole voting and dispositive power
      with respect to all of the shares of Common Stock shown in the table above
      for Franklin.  The Franklin statement  indicates that the Common Stock set
      forth in the table is beneficially owned by one or more open or closed-end
      investment companies or other managed accounts which are advised by direct
      and indirect Franklin investment advisory subsidiaries. The statement also
      indicated  that  it  filed  the  Schedule  13G on  behalf  of  itself  and
      Franklin's  principal  shareholders,  Charles  B.  Johnson  and  Rupert H.


                                       8


      Johnson,  Jr.  (the  "Principal  Shareholders"),  all of which are  deemed
      beneficial  owners of the shares of Common  Stock shown in the above table
      for  Franklin.  Franklin  and  the  Principal  Shareholders  disclaim  any
      economic interest or beneficial ownership in any of the Common Stock shown
      in the table for Franklin.

(2)   The  shares  of  common  stock  owned by the ESOP  Trust  are voted by the
      Trustees  in the manner  directed  by the ESOP  Committee.  The  Trustees,
      Howard Pinsley and Peggy A. Murphy,  are the Chairman of the Board,  Chief
      Executive  Officer  and  President  of the Company  and  Secretary  of the
      Company, respectfully. The ESOP Committee, which is appointed by the Board
      of Directors,  is comprised of Mr.  Pinsley,  Ms.  Murphy,  Director Barry
      Pinsley,  Director Michael W. Wool and David A. O'Neil,  the Treasurer and
      Principal  Financial  Officer of the Company.  As to shares that have been
      allocated to the accounts of  participants  in the ESOP,  the Trustees are
      directed  by  the  Committee  to  vote  such  shares  in  accordance  with
      instructions of the participants.  As to unallocated  shares and allocated
      shares  for  which  voting   instructions  have  not  been  received  from
      participants,  the  Committee  instructs  the  Trustee  to vote such votes
      proportionately  to the shares as to which voting  instructions  have been
      received.  As of September 30, 2005,  219,738 shares were allocated to the
      accounts of participants and 150,000 shares were unallocated.

(3)   The information as to the number of shares of Common Stock and the percent
      of class ownership of the Company that may be deemed beneficially owned by
      advisory  clients of  Advisory  Research,  Inc.  ("Advisory")  is from the
      Schedule  13G dated  February  10,  2005 filed with the SEC.  Advisory,  a
      registered  investment advisor, is deemed to have beneficial  ownership of
      81,100 shares of the Company's  Common Stock as of February 10, 2005,  all
      of which  shares are held in  Advisory  investment  companies,  trusts and
      accounts.  Advisory,  in its role as investment  advisor  and/or  manager,
      reported sole voting power with respect to 81,100 shares.

(4)   This  information  is from Form 4 dated August 11, 2005.  Indirect  shares
      represent  stock being held in the Company  ESOP.  Direct  shares  include
      options to acquire  6,000  shares of Common  Stock  which are  exercisable
      within 60 days.

                        SECURITY OWNERSHIP OF MANAGEMENT

      The  following  information  is furnished as of September 30, 2005 (unless
otherwise  indicated),  as to each  class of equity  securities  of the  Company
beneficially  owned by all Directors and Executive Officers and by Directors and
Executive Officers of the Company as a Group:




Title                      Name and Address of                  Amount and Nature                  Percent
Class                       Beneficial Owner                 of Beneficial Ownership              of Class
-----                       ----------------                 -----------------------              --------

                                                                                     
Common Stock               Paul J. Corr ................          2,600-Direct (1)                      *

Common Stock               Carl Helmetag ...............          4,050-Direct (1)                      *

Common Stock               Peggy A. Murphy .............          1,200-Direct (1)                      *
                                                                  3,702-Indirect (2)

Common Stock               David A. O'Neil .............          4,000-Direct (1)                      *
                                                                  2,418-Indirect (2)

Common Stock               Barry Pinsley ...............         31,230-Direct (1)                  2.94%
                                                                  2,582-Indirect (2,3)

Common Stock               Howard Pinsley ..............         48,634-Direct (1)                  5.14%
                                                                 10,883-Indirect (2)

Common Stock               Alvin O. Sabo ...............          1,600-Direct (1)                      *

Common Stock               Seymour Saslow...............          9,059-Direct (1)                      *

Common Stock               Michael W. Wool..............          1,600-Direct (1)                      *

Common Stock               Officers and Directors.......        103,973-Direct (1)                 10.60%
                           as a Group (13 persons)               19,585-Indirect (2,3)


----------
* Less than one percent

(1)   Direct  shares  include  options to acquire  shares which are  exercisable
      within 60 days as follows:


                                       9



      Name of                Exercisable       Name of               Exercisable
      Beneficial Owner         Options         Beneficial Owner        Options
      ----------------         -------         ----------------        -------

      Carl Helmetag              800           Alvin O. Sabo            1,400

      Peggy A. Murphy           1,200          Seymour Saslow           1,500

      David A. O'Neil           1,600          Michael W. Wool          1,500

      Howard Pinsley            6,000

(2)   Includes shares allocated to named director or officer as of June 30, 2005
      as a participant in the Company's  ESOP. Each such person has the right to
      direct the manner in which such shares  allocated  to him or her are to be
      voted by the ESOP Trustee.

(3)   Excludes  2,000  shares owned by the spouse of Barry  Pinsley.  Beneficial
      ownership of the shares is disclaimed by Mr. Pinsley.

      There are no arrangements known to the Company, the operation of which may
at a subsequent date, result in change of control of the Company.

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The Company's ESOP Trust owns 369,738 shares of the Company's common stock
as of September 30, 2005, of which 219,738 were allocated to participants in the
ESOP.  On July 15, 2005,  the Company sold an additional  150,000  shares of its
common stock to the ESOP Trust for an aggregate purchase price of $4,335,000, or
$28.90,  per share.  The ESOP  borrowed  from the Company an amount equal to the
purchase  price.   The  loan  will  be  repaid  in  fifteen  (15)  equal  annual
installments  of principal and the unpaid  balance will bear interest at a fixed
rate of 6.25% per annum,  the "prime rate" as quoted in The Wall Street  Journal
on the date of closing.  The Board of  Directors  of the Company had  approved a
purchase price per share equal to a 5% discount on the average  trading price of
the common stock on the American Stock Exchange on the date before closing,  but
in no event greater than the fair market value of the stock as determined by the
ESOP  trustees,  in  reliance  upon a  "fairness  opinion"  from an  independent
valuation firm retained by the ESOP.

      Each year, the Company makes  contributions  to the ESOP which are used to
make loan interest and principal payments to the Company. Following each payment
of principal on the loan, a portion of the  unallocated  shares held by the ESOP
are allocated to participants. Officers of the Company, including Howard Pinsley
who is also Chairman of the Board,  are eligible to  participate in the ESOP and
to have shares and cash allocated to their  accounts and  distributed to them in
accordance with the terms of the ESOP.

      The Company paid the law firm of Langrock, Sperry & Wool, of which Michael
W. Wool, a director of the Company,  is a partner,  a total of $72,979 for legal
services  during the fiscal year ended June 30, 2005.  $23,750 of the payment of
$72,979  was held in trust by Mr.  Wool's  firm and  subsequently  paid to other
service providers relating to the ESOP transaction described above.

                                 CODE OF ETHICS

      The Company has adopted a Code of Ethics which is available on our website
at www.espey.com.
   -------------

                     BOARD OF DIRECTORS' PROPOSAL TO RATIFY
                  APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS

      The Audit Committee has selected Rotenberg & Company, LLP as the company's
independent  public  accountants  for the fiscal year ending June 30, 2006.  The
Audit  Committee  determined  not to  re-engage  KPMG LLP,  which  served as the
Company's independent  accountants for the fiscal years ending June 30, 2004 and
June 30,  2005.  There  were no  disagreements  with  KPMG LLP on any  matter of
accounting principles or practices,  financial statement disclosure, or auditing
scope or procedure.  Rather,  the Audit Committee  determined that it was in the
Company's  best interest to seek audit  services from a regional,  as opposed to
one of the "big four" accounting firms.

      Unless otherwise specified by the shareholders,  the shares represented by
their  properly   executed  proxies  will  be  voted  for  ratification  of  the
appointment  of  Rotenberg & Company,  LLP as  independent  accountants  for the
fiscal  year  ending  June 30,  2006.  The  Company is advised by said firm that
neither the firm nor any of its partners now has, or during the past three years
had, any direct financial  interest or material indirect  financial  interest or
any connection with the Company.


                                       10


      A representative of Rotenberg & Company,  LLP is expected to be present at
the Annual Meeting with the opportunity to make a statement if he or she desires
to do so and to be  available  to  respond  to  appropriate  questions  from the
shareholders.  KPMG LLP has been invited to send a representative  to the Annual
Meeting.

      THE  BOARD  OF  DIRECTORS  RECOMMENDS  A  VOTE  FOR  RATIFICATION  OF  THE
APPOINTMENT OF ROTENBERG & COMPANY,  LLP AS INDEPENDENT  PUBLIC  ACCOUNTANTS FOR
THE COMPANY FOR FISCAL YEAR ENDING JUNE 30, 2006.

      The  Company's  Audit  Committee  has  had  policies  and  procedures  for
pre-approving  all audit and non-audit work performed by KPMG LLP for the fiscal
year  ended  June 30,  2004 and  2005.  Specifically,  the Audit  Committee  has
pre-approved the use of KPMG LLP for performance of audit services and detailed,
specific types of services within the following  categories of audit-related and
tax services.  In each other case, the Audit  Committee  requires  management to
obtain specific  pre-approval  from the Audit Committee for any other work to be
performed by its outside auditors.

      The  aggregate  fees billed for  professional  services by KPMG LLP in the
fiscal  years  ended June 30,  2004 and 2005,  respectively,  for these  various
services were:

      TYPES OF FEES                           2005               2004
                                              ----               ----
                                         Amount Billed      Amount Billed
                                         -------------      -------------

      (1) Audit Fees                        $ 79,850           $ 97,515

      (2) Audit Related Fees                    None              6,100

      (3) Tax Fees                            13,450             12,580

      (4) All Other Fees                        None               None
                                            --------           --------
      Total                                 $ 93,300           $116,195
                                            ========           ========

      In the  above  table,  in  accordance  with the  Securities  and  Exchange
Commission's  definitions and rules,  "audit fees" are fees the Company paid for
professional  services  for the  audit  of the  Company's  financial  statements
included in Form 10-K and review of financial statements included in Form 10-Qs,
and for services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements;  "audit-related  fees" are fees
for assurance and related  services that are related to the  performance  of the
audit of the Company's  employee benefit plan financial  statements;  "tax fees"
are fees for tax compliance,  tax advice and tax planning;  and "all other fees"
are fees for any services not  included in the first three  categories.  100% of
the services  set forth in sections  (1) through (3) above were  approved by the
Audit Committee in accordance with its charter.

          COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT

      Section  16(a)  of the  Securities  Exchange  Act  of  1934,  as  amended,
generally requires the Company's directors,  executive officers, and persons who
own  more  than ten  percent  of a  registered  class  of the  Company's  equity
securities,  to file reports of  beneficial  ownership and changes in beneficial
ownership  with the Securities  and Exchange  Commission.  Based solely upon its
review of copies of such reports received by it, or upon written representations
obtained from certain reporting persons, the Company believes that its officers,
directors,  and  stockholders  who own more than ten  percent  of the  Company's
equity  securities  have complied  with all Section  16(a) filing  requirements,
except that  Director  Carl Helmetag did not file on a timely basis Forms 4 with
respect  to each of the  following  transactions:  (i) the sale of 500 shares of
common stock on December 2, 2003,  ultimately  reported on Form 4 filed July 12,
2005;  (ii) the  purchase  of 200 shares on May 18,  2005,  the  purchase of 300
shares on May 18,  2005 and the  purchase  of 250  shares on June 6,  2005,  all
ultimately reported on Form 4 filed July 11, 2005.

                                 ANNUAL REPORTS

      The Annual Report of the Company to the  shareholders  for the fiscal year
ended June 30, 2005,  including  financial  statements,  accompanies  this Proxy
Statement. Such financial statements are not incorporated herein by reference.

      A copy of the Company's  Annual Report on Form 10-K  (including  financial
statements and schedules  thereto) for the fiscal year ended June 30, 2005 filed
with the Securities and Exchange Commission will be provided without charge upon
the  written  request  of  shareholders  to  Espey  Mfg.  &  Electronics  Corp.,
attention:  Investor Relations,  233 Ballston Avenue, Saratoga Springs, New York
12866.  The Company's Form 10-K for the fiscal year ended June 30, 2005 can also
be  viewed   electronically   through  a  link  at  the  Company's   website  at
www.espey.com.
-------------


                                       11


                              SHAREHOLDER PROPOSALS

      Any  shareholder  proposal  which may be a proper subject for inclusion in
the proxy  statement and for  consideration  at the 2006 Annual  Meeting must be
received by the Company at its principal executive office no later than June 17,
2006,  if it is to be included in the Company's  2006 proxy  statement and proxy
form. In addition,  the Company's  bylaws outline  procedures that a shareholder
must  follow  to  nominate   directors  or  to  bring  other   business   before
shareholders' meetings.

                               PROXY SOLICITATION

      The  solicitation  of the  enclosed  proxy is being  made on behalf of the
Board of Directors  and the cost of preparing and mailing the Notice of Meeting,
Proxy Statement and form of proxy to shareholders is to be borne by the Company.

                                           By Order of the Board of Directors,

                                                  /s/ Howard Pinsley

                                                     HOWARD PINSLEY
                                           President, Chief Executive Officer
                                           and Chairman of the Board

October 24, 2005
Saratoga Springs, New York


                                       12


                                   APPENDIX A                          Exhibit A


                         ESPEY MFG. & ELECTRONICS CORP.
                             AUDIT COMMITTEE CHARTER
                             -----------------------

      Purpose

      The primary purpose of the Audit Committee (the  "Committee") is to assist
the Board of Directors  (the  "Board") of Espey Mfg. &  Electronics  Corp.  (the
"Company") in fulfilling its oversight responsibilities by

      o     Overseeing management's conduct of the Company's financial reporting
            process and systems of internal accounting and financial controls;

      o     Monitoring the independence and performance of the Company's outside
            auditors; and

      o     Providing  an avenue of  communication  among the outside  auditors,
            management and the Board.

      In  discharging   its  oversight  role,  the  Committee  is  empowered  to
investigate  any related matter brought to its attention with full access to all
books, records,  facilities and personnel of the Company and the power to retain
outside counsel, auditors or other experts for this purpose.

      The  Committee  shall  review the  adequacy  of this  Charter on an annual
basis, and recommend to the Board any necessary amendments.

      Membership and Meetings

      The Committee is appointed by the Board and shall be comprised of not less
than three members at all times,  each of whom must be independent of management
and the Company and otherwise meet the requirements of applicable American Stock
Exchange rules and regulations.

      Accordingly, all of the members will be directors:

      1.    Who have no material  relationship to the Company that may interfere
            with the  exercise of their  independence  from  management  and the
            Company; and

      2.    Who are  financially  literate  or who become  financially  literate
            within  a  reasonable  period  of  time  after  appointment  to  the
            Committee.  In addition,  at least one member of the Committee  will
            have such accounting or related  financial  management  expertise in
            order  to  qualify  as an  "audit  committee  financial  expert"  in
            compliance with the criteria established by the SEC.

      The Board shall name a chair of the  Committee,  who shall be  responsible
for preparing an agenda in advance of each meeting. A majority of the members of
the Committee shall constitute a quorum. The Committee shall maintain minutes or
other records of its activities,  and shall report to the full Board  concerning
its activities.

      The Committee shall meet as frequently as  circumstances  dictate,  but no
less than four times annually.  As part of its job to foster open communication,
the Committee  should meet at least annually  separately with each of management
and the outside  auditors to discuss any  matters  that the  Committee  believes
should be discussed privately.

      Key Responsibilities

      The  Committee's  job is one of  oversight  and  it  recognizes  that  the
Company's  management is  responsible  for  preparing  the  Company's  financial
statements  and that the outside  auditors are  responsible  for auditing  those
financial  statements.  Additionally,  the Committee  recognizes  that financial
management,  including the internal  accounting and audit staff,  as well as the
outside auditors, have more time, knowledge and more detailed information on the
Company than do Committee members;  consequently,  in carrying out its oversight
responsibilities, the Committee is not providing any expert or special assurance
as to the Company's financial statements or any professional certification as to
the outside auditor's work.

      The following  functions shall be the common  recurring  activities of the
Committee in carrying out its oversight function. The Committee shall:

      o     Review  with  management  and the  outside  auditors  the  Company's
            audited financial  statements,  review and consider with the outside
            auditors  the  matters  required to be  discussed  by  Statement  of
            Auditing   Standards  ("SAS")  No.  61,  and  determine  whether  to
            recommend to the Board that the financial  statements be included in
            the  Company's  Annual  Report on Form 10-K to be filed with the SEC
            (or the Annual Report to  Shareholders  if distributed  prior to the
            filing of Form 10-K).

                                      A-1


      o     Review  with  management  and the  outside  auditors  the  Company's
            interim financial results to be included in the Company's  quarterly
            reports on Form 10-Q,  prior to their  filing with the SEC,  and the
            matters required to be discussed by SAS No. 61.

      o     Review the  independence  of the outside  auditors and in connection
            therewith:

            (i)   request from the outside auditors  annually,  a formal written
                  statement  delineating all  relationships  between the auditor
                  and the Company  consistent with Independence  Standards Board
                  Standard Number 1;

            (ii)  discuss  with  the  outside   auditors   any  such   disclosed
                  relationships   and  their  impact  on  the  outside  auditors
                  independence; and

            (iii) recommend  that  the  Board  take   appropriate   action,   if
                  necessary,   to  oversee  the   independence  of  the  outside
                  auditors.

      o     Review and evaluate the proposals submitted by prospective  auditors
            and recommend  appointment of the Company's outside auditors and the
            Board's  submission of their  appointment  to the  shareholders  for
            ratification.

      o     Oversee  the  work  performed  by the  Company's  outside  auditors,
            evaluate  the  performance  of  such  auditors  and  discharge  such
            auditors if circumstances warrant.

      o     Review and pre-approve any non-audit services to be performed by the
            independent outside auditors.

      o     In consultation with management and the outside auditors, review the
            integrity of the  Company's  financial  reporting  processes and the
            internal  control  structure  (including   disclosure  controls  and
            internal control over financial reporting).

      o     Review  potential  conflicts  of interest  involving  members of the
            Board and  management  and  review  and  approve  all  related-party
            transactions, defined as those transactions required to be disclosed
            under Item 404 of Regulation S-K.

      o     Establish  procedures  for the receipt,  retention  and treatment of
            complaints  regarding  accounting,  internal  accounting controls or
            auditing  matters and  procedures  for the  confidential,  anonymous
            submission  by  Company  employees  of any  concerns  related to the
            Company's  ethics  policies,  legal issues and  accounting  or audit
            matters.

      o     Prepare an annual report  containing the  information  prescribed by
            the SEC for inclusion in the Company's proxy statement in connection
            with the annual meeting of shareholders.



                                      A-2


           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
                         ESPEY MFG. & ELECTRONICS CORP.

                                  PROXY FOR THE
                       2005 ANNUAL MEETING OF SHAREHOLDERS
                                November 18, 2005

                                     COMMON

The undersigned  hereby  appoints Carl Helmetag and Alvin Sabo as Proxies,  each
with the power to appoint his substitute,  and hereby authorizes them or any one
of them to represent and to vote, as designated  below, all the shares of common
stock of ESPEY MFG. & ELECTRONICS  CORP. which the undersigned would be entitled
to vote if personally  present at the 2005 Annual Meeting of  Shareholders to be
held on November 18, 2005 or any adjournment thereof.

1.    TO ELECT ONE CLASS B DIRECTOR TO SERVE FOR A TWO YEAR TERM EXPIRING AT THE
      2007 ANNUAL MEETING OR UNTIL HIS SUCCESSOR IS DULY ELECTED AND QUALIFIES.

[_] FOR the nominee listed below            [_] WITHHOLD AUTHORITY
(except as marked to the contrary below)    to vote for the nominee listed below

      BARRY PINSLEY

      The Board of Directors recommends a vote FOR this nominee.

2.    TO ELECT TWO CLASS C DIRECTORS TO SERVE FOR A THREE YEAR TERM  EXPIRING AT
      THE 2008 ANNUAL  MEETING OR UNTIL  THEIR  RESPECTIVE  SUCCESSORS  ARE DULY
      ELECTED AND QUALIFY.

[_] FOR the nominee listed below            [_] WITHHOLD AUTHORITY
(except as marked to the contrary below)    to vote for the nominee listed below

      PAUL J. CORR    MICHAEL W. WOOL

      The Board of Directors recommends a vote FOR these nominees.

      INSTRUCTION:  To withhold  authority to vote for any  individual  nominee,
mark the "FOR" box above  AND  write the  nominee's  name in the space  provided
below.

3.    TO RATIFY the  appointment of Rotenberg & Company,  LLP as the independent
      public accountants of the Company for fiscal year ending June 30, 2006.

      [_] FOR           [_] AGAINST           [_] ABSTAIN

      The Board of Directors recommends a vote FOR this proposal.

      No other business may be transacted at the meeting.



                                                        ------------------------
         Please be sure to sign and date                | Date                 |
           this Proxy in the box below.                 |                      |
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|                                                                              |
|                                                                              |
-----------Shareholder sign above----------Co-holder (if any) sign above-------

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     ^ Detach here, sign, date and mail in postage paid envelope provided. ^

                         ESPEY MFG. & ELECTRONICS CORP.

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THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
                         THE ABOVE SIGNED SHAREHOLDER.
   IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
                                                     ---

      Please sign exactly as name appears hereon.  When shares are held by joint
tenants,  both should sign. When signing as attorney,  executor,  administrator,
trustee or guardian,  please give full title as such. If a  corporation,  please
sign in full  corporation name by President or other  authorized  officer.  If a
partnership, please sign in partnership name by authorized person.

PLEASE MARK,  SIGN,  DATE AND RETURN THE PROXY CARD PROMPTLY  USING THE ENCLOSED
ENVELOPE.
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IF YOUR ADDRESS HAS CHANGED,  PLEASE  CORRECT THE ADDRESS IN THE SPACE  PROVIDED
BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.

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