8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 5, 2016

SPARTON CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Ohio	1-1000	38-1054690
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

425 N. Martingale Road Suite 1000 Schaumburg, Illinois	60173-2213
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (800) 772-7866

N/A

(Former Name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

The Board of Directors (the “Board”) of Sparton Corporation (the “Company”) announced that Cary B. Wood has resigned as President and Chief Executive Officer of the Company and as a member of the Board, effective February 5, 2016, and that Michael Osborne, Senior Vice-President, Corporate Development, has left the Company, also on February 5, 2016. Additionally, the Board announced that it has commenced a search process to identify a successor President and Chief Executive Officer and has engaged a nationally recognized executive search firm to assist the Board with the search. Joseph J. Hartnett, Chairman of the Board, has been named interim President and Chief Executive Officer to lead the Company while the search for a new President and Chief Executive Officer is conducted.

While employed by the Company as interim President and Chief Executive Officer, Mr. Hartnett will remain on the Board but has resigned as its chairman and has resigned from the Audit Committee of the Board.

Also effective February 5, 2016, James R. Swartwout, a current member of the Board and previously its chairman, was appointed by the Board to serve as its chairman and James D. Fast, formerly on the Audit Committee, was appointed to serve on the Audit Committee in Mr. Hartnett’s absence.

Wood Separation Agreement

On February 5, 2016, the Company entered into a separation agreement with Mr. Wood (the “Wood Separation Agreement”).

Pursuant to the Wood Separation Agreement, Mr. Wood has resigned from all positions he held with the Company and its subsidiaries and affiliates.

Mr. Wood and the Company are parties to an employment agreement dated June 30, 2014 and effective October 31, 2014 (the “Wood Employment Agreement”). The Wood Separation Agreement provides that Mr. Wood’s resignation as President and Chief Executive Officer shall be treated by the Company as a termination without cause under the Wood Employment Agreement. Under the Wood Employment Agreement, upon termination by the Company of Mr. Wood’s employment without cause, Mr. Wood is entitled to receive: (i) payment of base salary for eighteen months after his resignation (payable monthly), (ii) his performance bonus for the Company’s fiscal year ending July 3, 2016, based upon the Company’s actual performance, subject to pro rata reduction for the portion of the fiscal year in which Mr. Wood was not employed by the Company, and if payable, payable at the same time it is payable for other participants in the Company’s bonus plan, and (iii) payment of premiums for up to eighteen months of COBRA continuation coverage for Mr. Wood and his dependents (the “Severance Payments”). Mr. Wood’s 18 monthly salary payments will be based upon Mr. Wood’s most recent annual salary of $575,000.

Mr. Wood is also entitled to receive payment for salary accrued through the date of resignation, payment for unused vacation days, payment for any unreimbursed business expenses, and any benefits to which he may be entitled under the Company’s benefit plans. Additionally, Mr. Wood is entitled to exercise any outstanding Company stock options previously awarded to him that are exercisable immediately prior to his resignation until the earlier of (i) the expiration of the three-month period following his resignation, or (ii) the expiration of the stock option’s term. Under applicable provisions of the Company’s equity plans and Mr. Wood’s award agreements, all unvested stock options, restricted stock, and restricted stock units held by Mr. Wood are forfeited upon Mr. Wood’s resignation. The Company’s obligation to make (and to continue to make) the Severance Payments is subject to Mr. Wood’s assistance with certain claims and compliance with his agreements regarding confidentiality, non-disparagement, non-competition and non-solicitation.

The Company’s obligation to make the Severance Payments is also subject to Mr. Wood’s execution of a full, effective, and irrevocable release of claims related to his employment with the Company and/or his termination or resignation (other than his right to indemnification for losses in connection with his employment by the Company and/or service as an officer or director of the Company), which is included in the Separation Agreement. Mr. Wood has executed the release but he may revoke the release within 7 days of its February 5, 2016 execution and delivery date.

Mr. Wood remains subject to his existing restrictive covenants under the Wood Employment Agreement, including a covenant not to compete for 18 months following the date of his resignation.

The foregoing discussion of the Wood Separation Agreement and the Wood Employment Agreement is qualified in its entirety by reference to the full texts of the Wood Separation Agreement and the Wood Employment Agreement. A copy of the Wood Separation Agreement is attached to this Current Report on Form 8-K as Exhibit 10.1 and a copy of the Wood Employment Agreement is attached to this Current Report on Form 8-K as Exhibit 10.2.

Osborne Termination

Mr. Osborne and the Company are parties to an employment agreement dated as of January 9, 2009, and amended effective as of September 17, 2012 (together, the “Osborne Employment Agreement”). Mr. Osborne’s termination as Senior Vice-President, Corporate Development is an involuntary termination for reasons other than “just cause” under the Osborne Employment Agreement. Under the Osborne Employment Agreement, upon Mr. Osborne’s involuntary termination for reasons other than “just cause,” death or disability, Mr. Osborne is entitled to receive: (i) severance equal to nine months’ salary, payable over a period of nine months as a part of the Company’s standard payroll, (ii) nine months of COBRA premiums, and (iii) outplacement services in an amount not to exceed $25,000, subject to Mr. Osborne’s delivery of a signed release of claims and the return of all property in Mr. Osborne’s possession or control that belongs to the Company. Mr. Osborne has 21 days from February 5, 2016, in which to consider whether to execute the release. Mr. Osborne’s 9 months of severance will be based upon Mr. Osborne’s most recent annual salary of $261,904.

Mr. Osborne is entitled to exercise any outstanding Company stock options previously awarded to him that are exercisable immediately prior to his termination until the earlier of (i) the expiration of the three-month period following his termination, or (ii) the expiration of the stock option’s term. Under applicable provisions of the Company’s equity plans and Mr. Osborne’s award agreements, all unvested stock options, restricted stock, and restricted stock units held by Mr. Osborne are forfeited upon Mr. Osborne’s termination.

Mr. Osborne remains subject to his existing restrictive covenants under the Osborne Employment Agreement, including a covenant not to compete for 18 months following the date of his termination.

The foregoing discussion of the Osborne Employment Agreement is qualified in its entirety by reference to the full text of the Osborne Employment Agreement. A copy of the original Osborne Employment Agreement is attached to this Current Report on Form 8-K as Exhibit 10.3, and a copy of the First Amendment to the original Osborne Employment Agreement is attached to this Current Report on Form 8-K as Exhibit 10.4.

Joseph J. Hartnett

Effective February 5, 2016, Mr. Joseph J. Hartnett, age 60, commenced serving as interim President and Chief Executive Officer and will serve until the Board has identified and appointed a new President and Chief Executive Officer.

Mr. Hartnett has served as a member of the Board since 2008 and as Chairman since 2014. Mr. Hartnett has also served as a member of the Audit Committee of the Board. Mr. Hartnett has resigned as Chairman and from the Audit Committee upon his becoming interim President and Chief Executive Officer.

Mr. Hartnett served as President and Chief Executive Officer of Ingenient Technologies, Inc., a multimedia software development company located in Rolling Meadows, Illinois, from April 2008 through November 2010. He joined Ingenient as Chief Operating Officer in September 2007. Prior to Ingenient, Mr. Hartnett served as President and Chief Executive Officer of U.S. Robotics Corporation, a global Internet communications product company headquartered in Schaumburg, Illinois, from May 2001 through October 2006. He was Chief Financial Officer of U.S. Robotics from June 2000 to May 2001. Prior to U.S. Robotics, Mr. Hartnett was a partner with Grant Thornton LLP where he served for over 20 years in various leadership positions at the regional, national, and international level.

Mr. Hartnett has served as a director and member of the audit committee, compensation committee and nominating and corporate governance committee of Garmin Ltd. (NASDAQ: GRMN) since June 7, 2013, and is a former director of Crossroads Systems, Inc. (NASDAQ: CRDS), U.S. Robotics Corporation and Ingenient Technologies, Inc.

There are no family relationships between Mr. Hartnett and any director or executive officer of the Company, or any person nominated or chosen by the Company to become a director or executive officer. There are no arrangements or understandings between Mr. Hartnett and any other persons pursuant to which he was selected as interim President and Chief Executive Officer. Mr. Hartnett has no direct or indirect material interest in any transaction or currently proposed transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

Hartnett Employment Agreement

On February 5, 2016, the Company entered into an employment agreement with Mr. Hartnett (the “Hartnett Employment Agreement”). Pursuant to the Hartnett Employment Agreement, Mr. Hartnett is entitled to receive a salary at a rate of $50,000 per month, payable in accordance with the Company’s regular payroll schedule. Mr. Hartnett is also eligible for a bonus, payable in cash, shares of Sparton common stock or a combination of cash and shares of Sparton common stock while employed by the Company as interim President and Chief Executive Officer or upon termination; any such bonus shall be payable at the sole discretion of the Board’s independent members. Mr. Hartnett will also be eligible to participate in the Company’s benefit programs in accordance with their terms, including their eligibility provisions although Mr. Hartnett will pay the full cost if he participates in the Company’s group health plan. While employed as interim President and Chief Executive Officer, Mr. Hartnett will not receive any compensation for his service as a member of the Board.

The foregoing discussion of the Hartnett Employment Agreement is qualified in its entirety by reference to the full text of the Hartnett Employment Agreement. A copy of the Hartnett Employment Agreement is attached to this Current Report on Form 8-K as Exhibit 10.5.

James R. Swartout

Mr. Swartwout is currently an advisor to private equity groups. From October 2006 to September 2008, he was Chief Executive Officer and member of the Board of Directors of Habasit Holding USA, the acquirer of Summa Industries, a California-based, publicly traded manufacturer of diversified plastic products for industrial and commercial markets. Mr. Swartwout served as a director of ATS Corporation, a public company providing information technology and related services to various governmental agencies, from May 2010 until early 2012. From October 1988 to October 2006, Mr. Swartwout held the following positions with Summa Industries: Chairman of the Board of Directors, Chief Executive Officer and Chief Financial Officer. Mr. Swartwout has served on the boards of directors of numerous public and private companies. He received a Bachelor of Science in Industrial Engineering from Lafayette College and a Master of Business Administration from the University of Southern California.

Item 7.01 Regulation FD Disclosure.

The Company issued a press release (the “Press Release”) announcing, among other matters, Mr. Wood’s resignation and commencement by the Board of a search to identify and retain a new President and Chief Executive Officer, Mr. Osborne’s departure, the appointment of Mr. Hartnett as interim President and Chief Executive Officer, and the appointment of Mr. Swartwout as Chairman of Sparton’s Board of Directors. A copy of the Press Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference in this Item 7.01.

The information furnished under this Item 7.01 on this Form 8-K, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits

Exhibit No.	Description
10.1	Separation Agreement dated February 5, 2016 by and between Sparton Corporation and Cary B. Wood.
10.2	Employment Agreement dated June 30, 2014 by and between Sparton Corporation and Cary B. Wood (incorporated by reference from Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 1, 2014).
10.3	Employment Agreement dated January 5, 2009 by and between the Company and Michael Osborne (incorporated by reference from Exhibit 10.20 to the Registrant’s Annual Report on Form 10-K filed with the SEC on September 7, 2011).
10.4	First Amendment to Executive Employment Agreement, effective as of September 17, 2012, by and between the Company and Michael Osborne (incorporated by reference from Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 18, 2012).
10.5	Employment Agreement dated February 5, 2016 by and between Sparton Corporation and Joseph J. Hartnett.
99.1	Press Release, dated February 5, 2016.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SPARTON CORPORATION
Dated: February 8, 2016	By:	/s/ Joseph G. McCormack
		Joseph G. McCormack, Chief Financial Officer

EX-10.1

Exhibit 10.1

Execution Copy

SEPARATION AGREEMENT

Sparton Corporation, an Ohio corporation (the “Company”), and Cary B. Wood (“Executive”) have entered into this Separation Agreement (this “Separation Agreement”) as of February 5, 2016 (the “Signing Date”).

RECITALS

A. Executive and the Company previously entered into an employment agreement, dated June 30, 2014 and effective October 31, 2014 (the “Employment Agreement”).

B. The parties desire to enter into this Separation Agreement in order to (i) establish the terms of Executive’s separation from service with the Company, (ii) confirm the payments and benefits to which Executive is entitled as a result of Executive’s separation from service with the Company, and (iii) confirm Executive’s obligations to the Company pursuant to the Employment Agreement following Executive’s separation from service with the Company.

NOW THEREFORE, in consideration of the mutual promises contained in this Separation Agreement, the parties agree as follows:

1. Termination of Employment.

a. Effective immediately, Executive hereby resigns as the President and Chief Executive Officer of the Company, at which time Executive’s employment with the Company will terminate (the “Date of Termination”). As of the Date of Termination, Executive will resign all positions Executive holds as an officer, director, employee, trustee, or committee member of the Company and its subsidiaries and affiliates. Executive will promptly execute such documents and take such actions as may be necessary or reasonably requested by the Company to effect or memorialize his resignation as President and Chief Executive Officer and from such other positions. Executive’s resignation as of the Date of Termination will be considered a termination of the Term (as defined in the Employment Agreement) and a discharge of Executive without Cause pursuant to Section 5(d) of the Employment Agreement.

b. Executive’s termination pursuant to Section 1(a) of this Separation Agreement will be a “separation from service” (a “Separation From Service”) as defined in Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and official guidance issued thereunder (“Section 409A”).

2. Payments and Other Consideration. In addition to the compensation and benefits provided by Paragraph 5(a) of the Employment Agreement, Executive will be entitled to receive the payments and benefits contemplated by Paragraphs 5(d)(i), (ii), and (iii) of the Employment Agreement in accordance with the terms of the Employment Agreement. Executive acknowledges that the 18 monthly salary payments provided by Paragraph 5(d)(i) of the Employment Agreement are to be based upon an annual salary for

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Executive of Five Hundred Seventy-Five Thousand Dollars ($575,000). Executive acknowledges that the payments and benefits contemplated by Paragraphs 5(d)(i), (ii), and (iii) of the Employment Agreement constitute the separate consideration for the Release required by Section 4 of this Separation Agreement and Section 5(d) of the Employment Agreement.

3. Equity Compensation. Executive is also entitled to exercise any outstanding Company stock options previously awarded to him that are exercisable immediately prior to his termination until the earlier of (i) the expiration of the three-month period following the Date of Termination or (ii) the expiration of the stock option’s term. Under applicable provisions of the Company’s equity plans and Executive’s award agreements, all unvested stock options, unvested restricted stock, and unvested restricted stock units held by Executive are forfeited upon Executive’s termination.

4. Release. As contemplated by the Employment Agreement, as a condition to the receipt of the payments and benefits provided by Paragraph 5(d)(i), (ii), and (iii) of the Employment Agreement, Executive must first execute and deliver to the Company (and, not revoke) the Executive Release attached hereto as Exhibit 1 (the “Release”), which Release will constitute a part of this Separation Agreement. Executive has twenty-one (21) days from the date of presentment of the Release to consider whether or not to execute the Release. In the event of such execution, the Executive has a further period of seven (7) days from the date of said execution in which to revoke said execution. The Release will not become effective until expiration of such revocation period.

5. [Reserved].

6. Benefits.

a. Any benefits to which Executive or his beneficiaries may be entitled under the Plans and programs described in the Employment Agreement or any other Company plans or programs under which Executive is otherwise entitled to benefits as of his Date of Termination shall be as determined in accordance with the terms of such plans and programs.

b. Executive will cease participating in Company health plan coverage as an employee in accordance with applicable plan documents, upon the Date of Termination or such other date as provided in such plan documents. Executive acknowledges that the Company has advised Executive that, pursuant to COBRA, Executive has a right to elect continued coverage under the Company’s group health plan for a period of 18 months, or such longer period as permitted under applicable law, from the Date of Termination.

7. Restrictive Covenants. Executive acknowledges and agrees that any and all of Executive’s obligations and restrictive covenants contained in the Employment Agreement (including, but not limited to, Paragraphs 8, 10 and 11 thereof) will continue in effect in accordance with the terms and conditions thereof.

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8. Additional Post-Termination Obligations. The parties additionally acknowledge and agree that their respective obligations under the Employment Agreement following the Date of Termination, including but not limited to non-disparagement (Paragraph 9 of the Employment Agreement), indemnification (Paragraph 4(f) of the Employment Agreement), and assistance with claims (Paragraph 13 of the Employment Agreement) will continue in effect in accordance with the terms and conditions thereof.

9. Choice of Law and Disputes. All issues concerning the construction, validity, enforcement and interpretation of this Separation Agreement shall be governed by and construed in accordance with the laws of the State of Illinois, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Illinois or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Illinois. In any action or proceeding relating to this Separation Agreement or otherwise arising out of or in connection with Executive’s employment by the Company, the parties agree that they shall be resolved by a bench trial and not a jury trial, and the parties agree that no damages other than compensatory damages shall be sought or claimed by either party and each party waives any right to a jury trial and any claim, right or entitlement to punitive, exemplary, statutory or consequential damages.

10. No Admission of Wrongdoing. The parties agree that neither this Separation Agreement nor the furnishing of the consideration set forth herein will be deemed or construed at any time for any purpose as an admission by any party of any liability, wrongdoing or unlawful conduct of any kind.

11. Amendment and Waiver. No provision of this Separation Agreement may be modified, waived or discharged by either party unless such waiver, modification or discharge is agreed to in writing and signed by Executive and such officer or director of the Company as may be specifically designated by the Company’s Board of Directors. No course of conduct or failure or delay in enforcing the provisions of this Separation Agreement shall affect the validity, binding effect or enforceability of this Separation Agreement.

12. Entire Agreement.

a. This Separation Agreement (including, without limitation, the Release, which will constitute a part of this Separation Agreement) sets forth the entire agreement between the parties hereto and, except for the Employment Agreement, as amended hereby, fully supersedes any prior agreements or understandings between the parties concerning the specific subject matter of this Separation Agreement.

b. The rights and obligations of the parties under the provisions of the Employment Agreement shall survive and remain binding and enforceable to the extent necessary to preserve the intended benefits of such provisions.

c. Each party acknowledges that it has not relied on any representations, promises, or agreements of any kind made to it in connection with the other party’s decision to enter into this Separation Agreement, except for those set forth in this Separation Agreement and the Employment Agreement.

d. Paragraph 24 of the Employment Agreement (relating to Section 409A of the Internal Revenue Code) shall apply to this Separation Agreement. However, the parties agree that because of exemptions available under the Section 409A regulations (including the “short-term deferral exemption” of Treas. Reg. §1.409A-1(b)(4), and the “separation pay exception” under Treas. Reg. §1.409A-1(b)(9)(iii)), the six-month delay of payments rule for specified employees described in Paragraph 24(c) of the Employment Agreement will not apply to the payments and benefits provided to Executive pursuant to this Separation Agreement.

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13. Severability. If any provision of this Separation Agreement is declared or determined by any court of competent jurisdiction to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions will not be affected thereby, and said illegal, unenforceable or invalid provision will be deemed not to be part of this Separation Agreement.

14. Withholding for Taxes. The Company may withhold from any amounts payable hereunder all federal, state, city or other taxes as will be required to be withheld pursuant to any applicable law or government regulation or ruling.

15. Binding Effect; Assignment. This Separation Agreement will inure to the benefit of and be binding upon the heirs, executors, administrators, successors and permitted assigns of the parties, including, without limitation, any successor to the Company. The parties represent and warrant that they have not transferred or assigned to any person or entity any rights or obligations herein. This Separation Agreement is not assignable by either party without the prior written consent of the other, except that the Company may assign this Separation Agreement to any assignee of or successor to substantially all of the business or assets of the Company or any direct or indirect subsidiary thereof without prior written consent of Executive.

16. Captions; Drafter Protection. The headings and captions herein are provided for reference and convenience only, and will not be employed in the construction of this Separation Agreement.

17. Consultation with Attorney; Voluntary Agreement. Executive acknowledges that (a) the Company has advised Executive of Executive’s right to consult with an attorney of Executive’s own choosing prior to executing this Separation Agreement, (b) Executive has carefully read and fully understands all of the provisions of this Separation Agreement, and (c) Executive is entering into this Separation Agreement, including, without limitation, the Release, knowingly, freely and voluntarily in exchange for good and valuable consideration.

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18. No Strict Construction. The language used in this Separation Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party.

19. Counterparts. This Separation Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement. This Separation Agreement may also be executed in separate counterparts by facsimile or PDF in which case the instruments so executed and delivered shall be binding and effective for all purposes.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the Signing Date.

SPARTON CORPORATION
By:	/s/ Joseph J. Hartnett
	Joseph J. Hartnett
	Chairman of the Board of Directors

EXECUTIVE

/s/ Cary B. Wood

Cary B. Wood

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EXHIBIT 1

EXECUTIVE RELEASE

1. This document is attached to, is incorporated into, and forms a part of, the employment agreement having a signing date of June 30, 2014 (the “Employment Agreement”) by and between Cary B. Wood (the “Executive”) and Sparton Corporation (the “Company”) and the Separation Agreement by between the Executive and the Company to which this Release is attached and comprises an integral part thereof. The Executive, on behalf of himself and the other Executive Releasors, knowingly and voluntarily releases and forever discharges the Company and the other Company Releasees from any and all Claims which the Executive now has or claims, or might hereafter have or claim (or the other Executive Releasors may have, to the extent that it is derived from a Claim which the Executive may have), against the Company Releasees based upon or arising out of any matter or thing whatsoever, occurring or arising on or before the date of this Release, to the extent that the Claim arises out of or relates to the Executive’s employment by the Company and its Affiliates (including his service as a director of the Company and its Affiliates) and/or the Executive’s termination or resignation therefrom. However, nothing in this Release shall constitute a release of any Claims of the Executive (or other Executive Releasors) that may arise under Paragraph 4(f) of the Employment Agreement (relating to indemnification) or of any other right that the Executive may have to indemnification in his capacity as an officer or director or former officer or director of the Company or any Affiliate of the Company. In addition, nothing in this Release releases the Company from its payment and other obligations under the Employment Agreement that by their terms are to be performed by the Company on or after Executive’s Date of Termination. Nothing in this Release shall constitute a release of Claims of the Executive (or other Executive Releasors) of payments or benefits to which Executive or an Executive Releasor may be entitled following Executive’s Date of Termination under the terms of one or more of the Company’s employee benefit plans. Finally, nothing in this Release shall constitute a release of Claims of the Executive (or other Executive Releasors) of amounts or other compensation to which Executive may become entitled under the terms of one or more long-term incentive awards granted to Executive prior to the Date of Termination.

For purposes of this Release, the terms set forth below shall have the following meanings:

a. The term “Employment Agreement” shall include the Employment Agreement and the Exhibits thereto, and include the plans and arrangements under which the Executive is entitled to benefits in accordance with the Employment Agreement and the Exhibits.

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b. The term “Claims” shall include (except for claims for breach of the Employment Agreement) any and all rights, claims, demands, debts, dues, sums of money, accounts, attorneys’ fees, complaints, judgments, executions, actions and causes of action of any nature whatsoever, known or unknown, cognizable at law or equity, and shall include, without limitation, claims arising under (or alleged to have arisen under) (i) the Age Discrimination in Employment Act of 1967, as amended; (ii) Title VII of the Civil Rights Act of 1964, as amended; (iii) The Civil Rights Act of 1991; (iv) Section 1981 through 1988 of Title 42 of the United States Code, as amended; (v) the Employee Retirement Income Security Act of 1974, as amended; (vi) The Immigration Reform Control Act, as amended; (vii) The Americans with Disabilities Act of 1990, as amended; (viii) The National Labor Relations Act, as amended; (ix) The Fair Labor Standards Act, as amended; (x) The Occupational Safety and Health Act, as amended; (xi) The Family and Medical Leave Act of 1993 (xii) the federal Worker Adjustment and Retraining Notification Act and any similar state laws; (xiii) any state antidiscrimination law; (xv) any state or local wage and hour law; (xvi) any other local, state or federal law, regulation or ordinance; (xviv) any public policy, contract, tort, or common law; or (xv) any allegation for costs, fees, or other expenses including attorneys’ fees incurred in these matters. (The Executive specifically releases any claim based on any amendment to the laws referenced, whenever such amendment was enacted, and specifically releases any claim under the Lily Ledbetter Fair Pay Act and any new laws enacted after the date of this Release. The Executive does not, however, release any claim which the applicable statute provides may not be released under any circumstances.).

c. The term “Company Releasees” shall include the Company and its Affiliates (as defined in the Employment Agreement), and their officers, directors, trustees, members, representatives, agents, employees, shareholders, partners, attorneys, assigns, administrators and fiduciaries under any employee benefit plan of the Company and its Affiliates, and insurers, and their predecessors and successors.

d. The term “Executive Releasors” shall include the Executive, and his family, heirs, executors, representatives, agents, insurers, administrators, successors, assigns, and any other person claiming through the Executive.

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2. The following provisions are applicable to and made a part of the Separation Agreement and this Release:

a. This Release shall be executed not earlier than the Executive’s Date of Termination (as defined in the Employment Agreement). By this Release, the Executive Releasors do not release or waive any right or claim which they may have under the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act, which arises after the date of execution of this Release.

b. In exchange for this Release, the Executive hereby acknowledges that he has received separate consideration beyond that to which he is otherwise entitled under the Company’s policy or applicable law.

c. The Company hereby expressly advises the Executive to consult with an attorney of his choosing prior to executing this Release.

d. The Executive has twenty-one (21) days from the date of presentment to consider whether or not to execute this Release. In the event of such execution, the Executive has a further period of seven (7) days from the date of said execution in which to revoke said execution. This Release will not become effective until expiration of such revocation period.

e. This Release, and the commitments and obligations of all parties under Paragraph 5(d) of the Employment Agreement:

i. shall become final and binding immediately following the expiration of the Executive’s right to revoke the execution of this Release in accordance with Paragraph 2(d) of this Release;

ii. shall not become final and binding until the expiration of such right to revoke; and

iii. shall not become final and binding if the Executive revokes such execution.

3. The Executive hereby acknowledges that he has carefully read and understands the terms of this Release and each of his rights as set forth therein.

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[Signature Page Follows]

	/s/ Cary B. Wood
	Cary B. Wood
Date:	February 5, 2016

State of

County of

Subscribed Before Me This      Day of             , 2016

Notary Public

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EX-10.5

Exhibit 10.5

February 5, 2015

Mr. Joseph J. Hartnett

Dear Mr. Hartnett:

This letter (“Letter Agreement”) will confirm our agreement regarding the terms of your employment as Sparton’s Interim President and Chief Executive Officer (“Interim CEO”), commencing on February 5, 2016 (the “Effective Date”).

1. Position. You will be employed as Sparton’s Interim CEO, reporting to the Company’s Board of Directors (the “Board”).

2. Duties and Responsibilities. You will devote your full business time and attention to the responsibilities of the position of Interim CEO, and will perform such additional duties for Sparton and its affiliates as the Board may direct and as are required in such position. You agree that you will be subject to and comply with all Sparton policies, procedures and rules, as now existing or as subsequently adopted, modified or supplemented by the Company. You further agree that you will comply with all applicable laws, rules and regulations governing your business and conduct.

3. Compensation. Your compensation as Interim CEO will be composed of the following:

(a) Salary. You will receive a salary at the rate of $50,000 per month.

(b) Bonus. At any time while employed by the Company as Interim CEO, or upon your termination, the Compensation Committee of the Board of Directors of the Company may recommend to the Board’s independent members that you be paid a bonus in cash, Sparton common stock or a combination thereof, based upon your and the Company’s performance. Any such bonus shall be at the sole discretion of the Board’s independent members.

All compensation payable to you under this Letter Agreement shall be paid according to the Company’s normal payroll practices, less all required withholdings and deductions.

While employed by the Company as Interim CEO, you shall not receive compensation or fees for serving as a member of the Board. Your director’s compensation shall resume upon your ceasing employment as Interim CEO, appropriately adjusted for your tenure as Interim CEO.

You acknowledge and agree that the Company shall have authority to recover any compensation you have received that is required to be recovered by the Sarbanes-Oxley Act of 2002, the Dodd-Frank Act of 2010, or any rules or regulations promulgated in connection therewith.

Mr. Joseph J. Hartnett

February 5, 2016

Page 2

4. Benefits. You will be eligible to participate in the Company’s employee benefits plans and programs generally available to similarly situated employees at the Company, subject to the eligibility requirements, terms and conditions of such plans and programs. You agree, however, that you will continue to contribute to the cost of your group health coverage on the same basis as you were contributing prior this Letter Agreement becoming effective.

You acknowledge that the Company’s employee benefit plans and programs are subject to change or termination by the Company at any time in the Company’s sole discretion.

(a) Paid Vacation and Sick Leave. You shall accrue paid time off for vacation time and sick leave in accordance with Sparton’s policies and applicable law. Vacation shall be scheduled at mutually agreeable times.

(b) Business Expenses. Sparton will reimburse you for reasonable and necessary business expenses incurred in connection with the Company’s business, including travel expenses, food and lodging while away from home, subject to such policies as Sparton may from time to time establish for its employees, provided that all such reimbursements shall comply with Section 409A of the Internal Revenue Code (“Code”).

(c) Indemnification. Sparton shall indemnify you to the maximum extent that its officers, directors and employees are entitled to indemnification (and shall advance you expenses, attorneys’ fees in furtherance thereof) pursuant to its articles of incorporation and code of regulations, subject to applicable law. Notwithstanding the foregoing, however, the Company’s obligation to defend, indemnify and hold harmless contained in this Paragraph 4(c) shall not apply to claims between the Company and its affiliates and you (including your heirs, estate, executors, administrators, and other legal representatives of his estate or property). The Company shall maintain directors and officers liability insurance in commercially reasonable amounts (as reasonably determined by the Board), and you shall be covered under such insurance to the same extent as other officers and directors of the Company; provided, however, that the Company shall not be required to maintain such insurance coverage unless the Board determines that it is obtainable at reasonable cost.

5. Termination. Your employment is “at-will,” which means that you are free to resign your employment at any time, and Sparton is free to terminate your employment any time, in each case for any reason or no reason and upon written notice. The term “Termination Date” shall mean the effective date of your termination of employment with Sparton.

On the next payroll date following the Termination Date (or sooner if required by law), you (or your estate or other legal designee) will be paid (a) all accrued salary through the Termination Date; and (b) payment for any unused accrued vacation, consistent with applicable law. Any business expenses submitted for reimbursement under Paragraph 4(b) will be paid no later than 60 days after the Termination Date. Upon termination of employment, you will also be entitled to receive any vested benefits under any employee benefit plan of the Company in which you participate, consistent with the terms and conditions of the applicable employee benefit plan.

Mr. Joseph J. Hartnett

February 5, 2016

Page 3

6. Representations and Warranties. As a condition of your employment with the Company, you represent and warrant that you are legally authorized to perform the services contemplated by this Letter Agreement; that you are not a party to any agreement or instrument with any third party which would prohibit you from entering into or performing the services contemplated by this Letter Agreement; and that you will not bring with you to the Company, or use, any confidential information or trade secrets belonging to any prior employer.

7. Confidential Information. You agree that for the period of your employment with the Company and thereafter, you will not, except as required for the performance of your duties with the Company, disclose or use, or enable any third party to disclose or use, any confidential information of the Company or its affiliates.

8. Notices. Any notice required in connection with this Letter Agreement will be deemed adequately given only if in writing and personally delivered, or sent by first-class, registered or certified mail, or overnight courier. Notice shall be deemed to have been given on the third day after deposit into the mail. Notice shall be deemed to have been given on the second day after deposit with an overnight courier. Notices may also be hand-delivered, in which case, notice is effective upon delivery. Notices to Sparton shall be addressed to Sparton Corporation, Attention: Chairman of the Board, 425 North Martingale Road, Suite 2050, Schaumberg, IL 60173. Notices to you shall be addressed to your last known address on file with the Company.

9. Entire Agreement. This Letter Agreement constitutes the entire understanding between the Company and you and supersedes all prior agreements concerning the terms and conditions of your employment.

10. Amendment. The terms of this Letter Agreement may not be modified, altered, changed or amended except by an instrument in writing signed by a duly authorized representative of the Company and you. No waiver by the Company or you of any breach by the other party of any condition or provision of this Letter Agreement shall be deemed a waiver with respect to any similar or dissimilar condition or provision at any prior or subsequent time.

11. Severability. If any provision of this Letter Agreement is held to be invalid or unenforceable, then the remaining provisions of this Letter Agreement shall be deemed severable and remain in full force and effect.

12. Governing Law. All issues concerning the construction, validity, enforcement and interpretation of this Letter Agreement shall be governed by and construed in accordance with the laws of the State of Illinois, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Illinois or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Illinois.

13. Code Section 409A. Notwithstanding any other provision of this Letter Agreement, it is intended that payments and benefits under this Letter Agreement comply with Section 409A of the Code or with an exemption from the applicable Code

Mr. Joseph J. Hartnett

February 5, 2016

Page 4

Section 409A requirements and, accordingly, all provisions of this Letter Agreement shall be construed in a manner consistent with the requirements for avoiding taxes and penalties under Section 409A of the Code. For purposes of this Letter Agreement, all rights to payments and benefits hereunder of deferred compensation subject to Section 409A of the Code shall be treated as rights to receive a series of separate payments and benefits to the fullest extent allowed by Section 409A of the Code. For purposes of this Letter Agreement, you will not be deemed to have had a termination of employment unless there has been a “separation from service” within the meaning of Section 409A of the Code. Furthermore, neither the Company nor any of its parents, subsidiaries, divisions, affiliates, directors, officers, predecessors, successors, employees, agents and attorneys shall be liable to you if any amount payable or provided hereunder is subject to any taxes, penalties or interest as a result of the application of Code Section 409A.

Notwithstanding any provision of this Letter Agreement, if you are a “specified employee” (as defined in Section 409A of the Code and Treasury Regulations thereunder), then payment of any amount under this Letter Agreement that is deferred compensation subject to Section 409A of the Code and the timing of which depends upon termination of employment shall be deferred for six (6) months after termination of your employment, as required by Section 409A(a)(2)(B)(i) of the Code (the “409A Deferral Period”). In the event such payments are otherwise due to be made during the 409A Deferral Period, the payments that otherwise would have been made in the 409A Deferral Period shall be accumulated and paid in a lump sum on the first day of the seventh month following the Termination Date, and the balance of the payments shall be made as otherwise scheduled.

14. Counterparts and Facsimile Execution. This Letter Agreement may be executed and delivered (a) in one 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, and/or (b) by facsimile or PDF in which case (i) the instruments so executed and delivered shall be binding and effective for all purposes, and (ii) the parties shall nevertheless exchange substitute hard copies of such facsimile or PDF instruments as soon thereafter as practicable (but the failure to do so shall not affect the validity of the instruments executed and delivered by facsimile or PDF).

Mr. Joseph J. Hartnett

February 5, 2016

Page 5

Kindly indicate your acceptance of the terms of this Letter Agreement by signing and returning it to the undersigned.

Sincerely,

Sparton Corporation
By:	/s/ David P. Molfenter
	David P. Molfenter
	Chair of the Compensation Committee of the Board of Directors
	As authorized by the Compensation Committee

I have read, understand, accept and agree to the above terms and conditions governing my employment with the Company.

/s/ Joseph J. Hartnett

Joseph J. Hartnett

February 5, 2016

EX-99.1

Exhibit 99.1

Sparton Corporation Names New Interim President and CEO

• Cary B. Wood resigns as President and CEO and as a Member of the Board of Directors

• Michael Osborne, Senior Vice-President, Corporate Development, Departs

• Joseph J. Harnett Appointed Interim President and CEO

• Board Member James R. Swartwout Elected Chairman

SCHAUMBURG, Ill.–(BUSINESS WIRE)–February 5, 2016–Sparton Corporation (NYSE: SPA) announced today that Cary B. Wood has resigned as its President and Chief Executive Officer, effective immediately.

Also, Michael Osborne, Senior Vice-President, Corporate Development, has left the Company, also effective immediately.

Also effective immediately, Joseph J. Hartnett, current Chairman of the Board of Directors, has been appointed as interim President and Chief Executive Officer and will serve in that position until a new President and Chief Executive Officer has been appointed. Mr. Hartnett has stepped down as Chairman and from the Board’s Audit Committee but will remain on the Board. Sparton Board Member James R. Swartwout has been appointed by the Board as Chairman.

Mr. Osborne’s duties have been reassigned to other members of Sparton’s senior management team.

The Board of Directors is actively conducting a search for a new President and Chief Executive Officer and has retained a nationally recognized executive search firm to assist in its recruiting efforts. It is expected that when appointed, the new President and Chief Executive Officer will also serve as a member of Sparton’s Board of Directors.

Mr. Hartnett said, “The Board of Directors recognizes the value that Cary has brought to Sparton during his tenure as CEO and thanks him for his many contributions.” Mr. Hartnett also stated that “Sparton’s talented leadership team will enable it to steer a steady course in its operations and financial performance pending the naming of a new President and CEO.”

Mr. Hartnett has served as a member of Sparton’s Board of Directors since 2008 and as Chairman since 2014. Mr. Hartnett has served as a member of the Audit Committee of the Board of Directors but has resigned from such Committee upon his becoming interim President and Chief Executive Officer.

Mr. Hartnett served as President and Chief Executive Officer of Ingenient Technologies, Inc., a multimedia software development company, located in Rolling Meadows, Illinois, from April 2008 through November 2010. He joined Ingenient as Chief Operating Officer in September 2007. Prior to Ingenient, Mr. Hartnett served as President and Chief Executive Officer of U.S. Robotics Corporation, a global Internet communications product company headquartered in Schaumburg, Illinois, from May 2001 through October 2006. He was Chief Financial Officer of U.S. Robotics from June 2000 to May 2001. Prior to U.S. Robotics, Mr. Hartnett was a partner with Grant Thornton LLP where he served for over 20 years in various leadership positions at the regional, national, and international level.

Mr. Hartnett has served as a director and member of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee of Garmin Ltd. (NASDAQ: GRMN) since June 7, 2013, and is a former director of Crossroads Systems, Inc. (NASDAQ: CRDS), U.S. Robotics Corporation and Ingenient Technologies, Inc.

Mr. Swartwout is currently an advisor to private equity groups. From October 2006 to September 2008, he was Chief Executive Officer and member of the Board of Directors of Habasit Holding USA, the acquirer of Summa Industries, a California-based, publicly traded manufacturer of diversified plastic products for industrial and commercial markets. Mr. Swartwout served as a director of ATS Corporation, a public company providing information technology and related services to various governmental agencies, from May 2010 until early 2012. From October 1988 to October 2006, Mr. Swartwout held the following positions with Summa Industries: Chairman of the Board of Directors, Chief Executive Officer and Chief Financial Officer. Mr. Swartwout has served on the boards of directors of numerous public and private companies. He received a Bachelor of Science in Industrial Engineering from Lafayette College and a Master of Business Administration from the University of Southern California.

Investors and financial analysts are invited to ask questions after the presentation is made. The presentation will be available on Sparton’s Web site: http://www.sparton.com in the “Investors” section for up to two years after the conference call.

About Sparton Corporation

Sparton Corporation (NYSE:SPA), now in its 116th year, is a provider of complex and sophisticated electromechanical devices with capabilities that include concept development, industrial design, design and manufacturing engineering, production, distribution, field service, and refurbishment. The primary markets served are Medical & Biotechnology, Military & Aerospace, and Industrial & Commercial. Headquartered in Schaumburg, IL, Sparton currently has fourteen manufacturing locations and engineering design centers worldwide. Sparton’s Web site may be accessed at http://www.sparton.com/.

Safe Harbor and Fair Disclosure Statement

Safe Harbor statement under the Private Securities Litigation Reform Act of 1995: To the extent any statements made in this release contain information that is not historical, these statements are essentially forward-looking and are subject to risks and uncertainties, including the difficulty of predicting future results, the regulatory environment, fluctuations in operating results and other risks detailed from time to time in Sparton’s filings with the Securities and Exchange Commission (SEC). The matters discussed in this press release may also involve risks and uncertainties concerning Sparton’s services described in Sparton’s filings with the SEC. In particular, see the risk factors described in Sparton’s most recent Form 10K and Form 10Q. Sparton assumes no obligation to update the forward-looking information contained in this press release.

Contact

Joseph McCormack

Sparton Corporation

Email: ir@sparton.com

Office: (847) 762-5800