ENDICOTT - Endicott Interconnect Technologies missed an annual deadline to file its employment figures with a state agency that gave it $4 million of taxpayer money in 2002 to help keep jobs in Endicott.

The Empire State Development Corp. has not received the company's year-end employment report, which was due Feb. 1, agency spokeswoman Glynis Gotwald said. The company will be given a "grace period" until mid-March to file the report without penalty, she said.

Depending on circumstances, EI could then receive a notice of default and be asked to repay part of the grant.

"We would focus on recapturing a portion of New York's funds if a project does not fulfill its potential," Gotwald said.

James McNamara, EI president, said Thursday he was unaware of the status of the report required by Empire State Development Corp., but he would check on it. He missed a follow-up telephone interview scheduled for Friday.

The number of jobs at EI, successor to IBM's dynasty in Endicott, has continued to decline. The company employs about 1,500 workers, McNamara said Thursday. That's down from 1,760 employees in December, and from 1,940 workers when EI bought the core of IBM's microelectronics plant in 2002.

Year-end audits of the work force show that in its first two years of business — 2003 and 2004 — EI met its agreement to maintain at least 93 percent of its work force.

The grant from Empire State Development Corp. was part of a $100 million deal, which included the purchase of real estate, machinery, equipment and inventory at the 43-building campus in the heart of the village. The deal also included a $1 million Community Development Block Grant not tied to jobs. Private funding included $17.5 million from M&T Bank, $11 million from NBT bank and a $51.5 million lease arrangement with IBM, according to Empire State Development Corp. records obtained through the Freedom of Information Law.

Additionally, the site is in an Empire Zone, which qualified EI for an assortment of tax breaks and incentives tied to new investment in employees and capital equipment, among other benefits.

The contract with the state stipulates the company must repay 40 percent of the grant amount - or $1.6 million - if the company doesn't keep at least 93 percent of its work force by Jan. 1, 2006. But many other factors come in to play, Gotwald said. A decision regarding penalties on an underperforming company is not typically made until after an evaluation of its efforts to create jobs, and its future prospects.

EI is staking much of its hope for the future on SureScan - one of a handful of companies the Transportation Security Administration is courting for next-generation baggage scanner technology. SureScan, a sister to EI, has produced a baggage scanner in association with Ensco Inc., a Virginia firm specializing in manufacturing and distribution systems, and automated baggage-inspection systems.

McNamara said Thursday that hiring could begin to produce the scanner "as soon as we get certification." He could not say when that would be.

During IBM's global domination of the computer industry in the 1980s, the Endicott plant employed 11,000 workers and was the centerpiece of a vibrant Southern Tier economy that featured an impressive tax base, lavish employment benefits and a flourishing contingent of contractors and subcontractors.

By 2002, IBM's work force had plummeted to about 4,200, and the company was planning to close the entire operation.

Plans surfaced to sell the heart of the company - called the Interconnect Products Division - to local investors, the Maines and Matthews families. The Maines family runs a $1 billion food-distribution business in Conklin; the Matthews family has diverse holdings, including vast experience in the electronics manufacturing services industry. Both families said they were at the center of the deal to save jobs and what was long a stable element of the region's economy.

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