SPARTON CORPORATION DEF 14A


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NOTICE OF ANNUAL MEETING OF SHAREOWNERS

To Our Shareowners:

Notice is hereby given that the Annual Meeting of Shareowners of Sparton Corporation will be held at the Ella Sharp Museum of Art & History, 3225 Fourth Street, Jackson, Michigan 49203 on Wednesday, October 24, 2007, at 10:00 a.m., local time, for the following purposes:

	(1)		To elect four directors each for a term of three years as set forth in the Proxy Statement.

	(2)		Ratification of the appointment of the independent auditors for the Company.

	(3)		To transact such other business as may properly come before the meeting or at any adjournments thereof.

Only holders of Common Stock of record at the close of business on September 14, 2007, are entitled to notice of and to vote at the meeting.

By Order of the Board of Directors

JOSEPH S. LERCZAK
Secretary

Jackson, Michigan
September 27, 2007

IMPORTANT

ALL SHAREOWNERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER OR NOT YOU PLAN TO ATTEND IN PERSON, YOU ARE URGED TO SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED, OR USE OUR TELEPHONE OR INTERNET VOTING SYSTEM AS PROMPTLY AS POSSIBLE. THIS WILL ASSURE YOUR REPRESENTATION AND A QUORUM FOR THE TRANSACTION OF BUSINESS AT THE MEETING. IF YOU ATTEND THE MEETING IN PERSON, THE PROXY WILL NOT BE USED IF YOU SO REQUEST BY REVOKING IT AS DESCRIBED IN THE PROXY STATEMENT.

SPARTON CORPORATION
2400 East Ganson Street
Jackson, Michigan 49202

PROXY STATEMENT

For the Annual Meeting of Shareowners to be held on October 24, 2007

SOLICITATION

This Proxy Statement is furnished in connection with the solicitation by the Board of Directors of SPARTON CORPORATION, an Ohio corporation (the “Company”), of proxies for use at the 2007 Annual Meeting of Shareowners of the Company (the “Annual Meeting”) to be held at the Ella Sharp Museum of Art and History, 3225 Fourth Street, Jackson, Michigan 49203 on Wednesday, October 24, 2007, at 10:00 a.m., Local Time, and at any and all adjournments thereof. The cost of solicitation will be paid by the Company. The Company has retained Morrow & Company, Inc. to assist in the solicitation of proxies at an estimated cost of $6,000, plus expenses, which will be paid by the Company. In addition, officers and employees of the Company and its subsidiaries may solicit proxies personally, by telephone, facsimile or other means, without additional compensation. This Proxy Statement and the form of Proxy are expected to be mailed to shareowners the week of September 24, 2007.

At the meeting, the Company’s shareowners will act upon two proposals. The first proposal is the election of four directors, each to serve for a three-year term until the annual meeting held in the year 2010 or until their successors are qualified and elected. The second proposal is the ratification of the appointment of independent auditors. Both proposals are described in more detail in this Proxy Statement.

OUTSTANDING STOCK AND VOTING RIGHTS

In accordance with the Code of Regulations of the Company, the Board of Directors has fixed the close of business on September 14, 2007, as the record date for determination of shareowners entitled to notice of, and to vote at, the Annual Meeting. Only shareowners of record on that date will be entitled to vote. As of September 14, 2007, the record date for the Annual Meeting, the Company had outstanding 9,811,507 shares of Common Stock, each entitled to vote at the Annual Meeting. Votes cast at the meeting and votes submitted by proxy are counted by the inspectors of the election, who are appointed by the Company.

Voting by Proxy

If a shareowner is a corporation or partnership, the accompanying proxy card should be signed in the full corporate or partnership name by a duly authorized person. If the proxy card is signed pursuant to a power of attorney or by an executor, administrator, trustee or guardian, the signer’s full title should be given and a certificate or other evidence of appointment should be furnished.

You can vote in one of four ways. You can vote by mail, you can authorize the voting of your shares over the Internet, you can authorize the voting of your shares by telephone or you can vote in person at the Annual Meeting.

If you choose to vote by mail, you may vote by completing and signing the proxy card that accompanies this Proxy Statement and promptly mailing it in the enclosed postage-prepaid envelope. You do not need to put a stamp on the enclosed envelope if you mail it in the United States. The shares you own will be voted according to the instructions on the proxy card you mail. If you return the proxy card, but do not give any instructions on a particular matter described in this Proxy Statement, the shares you own will be voted in accordance with the recommendations of the Company’s Board of Directors. If you choose to vote by mail, your duly signed proxy card must be received by 11:59 p.m., Central Standard Time, on October 23, 2007.

If you choose to vote by telephone or the Internet, instructions for a shareowner of record to vote by telephone or the Internet are set forth on the enclosed proxy card. The telephone and Internet voting procedures are designed to authenticate votes cast by use of a personal identification number that appears on the proxy card. These procedures, which comply with Ohio law, allow shareowners to appoint a proxy to vote their shares and to confirm that their instructions have been properly recorded. If you vote by telephone or the Internet, you do not have to mail in your proxy card, but your vote must be received by 11:59 p.m. Central Standard Time on October 22, 2007. Morrow & Company, Inc. may solicit your proxy up to the date and time of the meeting.

If you participate in the Company’s 401(k) Plan and hold shares in your plan account, you may give voting instructions as to the number of shares credited to your account as of the record date. Only the trustee of the 401(k) Plan, SunTrust, may vote your plan shares. You may provide voting instructions to the plan trustee, SunTrust, through any of the voting methods described above, except that you may not vote your plan shares in person at the Annual Meeting. Your voting instructions must be received before 11:59 p.m. Central Standard Time on October 22, 2007.

If you are not the record holder of the shares you own because they are held in “street name” by a bank or brokerage firm, your bank or brokerage firm is required to vote your shares according to your instructions. In order to vote your shares, you will need to follow the directions your bank or brokerage firm provides you. Many banks and brokerage firms also offer the option of voting over the Internet or by telephone, instructions for which would be provided by your bank or brokerage firm on your vote instruction form. Under the rules of the New York Stock Exchange, if you do not give instructions to your brokerage firm, it may still be able to vote your shares with respect to certain “discretionary” items, but it will not be allowed to vote your shares with respect to certain “non-discretionary” items. In the case of non-discretionary items, for which no instructions are received, the shares will be treated as “broker non-votes.”

Any proxy duly given pursuant to this solicitation may be revoked by the shareowner, at any time prior to voting, by written notice to the Secretary of the Company, by a later-dated proxy either signed and returned by mail or transmitted using the telephone or Internet voting procedures before the Annual Meeting, or by attending the Annual Meeting and voting in person with adequate notification. Participants in the Company’s 401(k) Plan who hold shares in their plan account and desire to revoke their voting instructions must do so before 11:59 p.m. Central Standard Time on October 22, 2007.

Principal Shareowners

As of August 30, 2007, the persons named in the following table were known by management to be the beneficial owners of more than 5% of the Company’s outstanding Common Stock:


	Amount and Nature of
Name of Beneficial Ownership	Beneficial Ownership			Percent of Class
Bradley O. Smith 6043 N. Gatehouse, SE Grand Rapids, Michigan 49545		1,146,145	(1)		11.6	% (7)

John J. Smith Trust 6043 N. Gatehouse, SE Grand Rapids, Michigan 49545		1,083,792	(2)		11.0

Lawndale Capital Management, Inc. 591 Redwood Highway, Suite 2345 Mill Valley, California 94941		888,812	(3)		9.1

Judith A. Sare 4302 Channel Drive Akron, Ohio 44319		724,708	(4)		7.4

Dimensional Fund Advisors, LP 1299 Ocean Avenue, 11^th Fl. Santa Monica, California 90401		570,487	(5)		5.8

Royce & Associates, LLC 1414 Avenue of the Americas New York, New York 10019		492,189	(6)		5.0


(1)		Includes 898,122 shares owned individually by Mr. Bradley O. Smith and 228,686 shares owned by Mr. Smith jointly with his wife, Sharon A. Smith. Also includes 14,149 shares owned by Mr. Smith’s wife, Sharon A. Smith and 5,188 shares which Mr. Smith has the right to acquire pursuant to options exercisable within 60 days. Excludes the 1,083,792 shares owned by the John J. Smith Trust, discussed below, the voting and investment powers for which are shared by Mr. Smith as a co-trustee. Mr. Smith has served as a director of Sparton Corporation since 1998.

(2)		Bradley O. Smith is a co-trustee and a beneficiary of the John J. Smith Trust and shares voting and investment power over the shares held by the trust.

(3)		According to information in the Form 13D/A Report filed as of August 7, 2007, by Lawndale Capital Management, LLC (“Lawndale”), a registered investment advisor, Andrew E. Shapiro, the sole manager of Lawndale, and Diamond A. Partners, L.P., a fund managed by Lawndale, is deemed to have beneficial ownership of 888,812 shares of common stock. Does not include the 1,274 shares owned by Mr. Shapiro.

(4)		According to information in the Form 13G/A Report dated as of August 30, 2007, by Judith A. Sare, Mrs. Sare is deemed to have beneficial ownership of 724,708 shares of common stock. This includes 363,664 shares owned individually by Mrs. Sare and 195,047 shares owned by Mrs. Sare and/or her husband Paul W. Sare. Also includes 165,997 held in the Lawson and Margaret Smith Trust of which Mr. and Mrs. Sare are the co-trustees. Judith A. Sare is the sister of Bradley O. Smith. The 7.4% of class is based on Mrs. Sare’s reporting of shares and shares outstanding as of August 30, 2007.

(5)		Shares presented are according to information included in the Form 13G/A Report filed as of December 31, 2006, by Dimensional Fund Advisors LP (“Dimensional”), a registered investment advisor. Dimensional is


		deemed to have beneficial ownership of 570,487 shares of common stock, all of which shares are held in portfolios of DFA Investment Dimensions Group Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles for qualified employee benefit plans, to all of which Dimensional Fund Advisors Inc. serves as investment manager. Dimensional possesses sole voting and investment power over all such shares. Dimensional disclaims beneficial ownership of all such shares. The share information shown has been adjusted for the 5% common stock dividend distributed on January 19, 2007. The 5.8% of class is based on shares outstanding as of August 30, 2007.

(6)		Shares presented are according to information included in the Form 13G/A Report filed as of December 31, 2006, by Royce & Associates, LLC, (“Royce”), a registered investment advisor. Royce is deemed to have beneficial ownership of 492,189 shares of common stock. The share information shown has been adjusted for the 5% common stock dividend distributed on January 19, 2007. The 5.0% of class is based on shares outstanding as of August 30, 2007.

(7)		Calculation is based on total shares outstanding as of August 30, 2007 plus shares subject to options exercisable within sixty days as described in this Proxy Statement.

Security Ownership of Management

As of August 30, 2007, the following table shows the shares of the Company’s Common Stock beneficially owned (except as noted) by the Named Executives identified in the Compensation Table shown later in this Proxy Statement and all executive officers and directors of the Company as a group:


	Amount and Nature of
Name of Beneficial Ownership	Beneficial Ownership			Percent of Class (6)
David W. Hockenbrocht		518,173	(1)		5.2	%
Douglas E. Johnson		26,888	(2)			*
Richard L. Langley		73,140	(3)			*
Duane K. Stierhoff		-0-				*
Jens-Erik Fabricious-Olsen		8,355	(4)			*
All Executive Officers and Directors		2,941,923	(5)		29.7	%


*		denotes a percentage of less than 1%

(1)		Includes 23,180 shares, which Mr. Hockenbrocht has the right to acquire pursuant to options exercisable within 60 days. Also includes 1,786 shares held by Mr. Hockenbrocht’ wife, J. Carol Hockenbrocht. The amount also includes 407,259 shares held by one of the Company’s retirement plans, as to which Mr. Hockenbrocht holds voting and investment power in his capacity as Chief Executive Officer of the Company. Although Mr. Hockenbrocht is a participant in the plan, he disclaims beneficial ownership of the shares held by the plan. Finally, 4,525 shares are included which are held in his name by the Company’s 401(k) plan.

(2)		Includes 5,513 shares, which Mr. Johnson has the right to acquire pursuant to options exercisable within 60 days. Also includes 3,493 shares, which are held in the Company’s 401(k) plan.

(3)		Includes 6,729 shares, which Mr. Langley has the right to acquire pursuant to options exercisable within 60 days. Also includes 2,982 shares, which are held in the Company’s 401(k) plan.

(4)		Includes 5,795 shares, which Mr. Olsen has the right to acquire pursuant to options exercisable within 60 days. Also includes 2,560 shares, which are held in the Company’s 401(k) plan.

(5)		Includes 85,613 shares under options held by all executive officers and directors exercisable within 60 days, 20,188 shares which are held in the Company’s 401(k) plan, and 1,083,792 shares held by the John J.


		Smith Trust of which Bradley O. Smith is co-trustee. Mr. Smith shares voting and investment power over the shares held by the trust.

(6)		Calculation is based on total shares outstanding plus the shares subject to options exercisable within 60 days as described in this Proxy Statement.

The following table gives information about the Company’s Common Stock that may be issued upon the exercise of options, warrants and rights under all of the Company’s equity compensation plans as of June 30, 2007:

Number of securities

Number of Securities

remaining available for

to be issued upon

Weighted-average

future issuance under

exercise of outstanding

exercise price of

equity compensation

options, warrants and

outstanding options,

plans (excluding securities

rights

warrants and rights

reflected in column (a)

Plan Category

(a)

(b)

(c)

Equity compensation plans approved by security holders

300,303

7.82

193,688

Equity compensation plans not approved by security holders

—

Any Proxy given pursuant to this solicitation may be revoked by the person giving it at any time before it is voted. Proxies may be revoked by (i) filing a written notice of revocation with the Chairman or Secretary of the Company, at or before the Annual Meeting, (ii) duly executing a subsequent proxy relating to the same shares and delivering it to the Chairman or Secretary of the Company at or before the Annual Meeting or (iii) attending the Annual Meeting and voting in person with adequate notification (although attendance at the Annual Meeting will not in and of itself constitute a revocation of a proxy). Unless revoked, the shares represented by the enclosed Proxy will be voted at the meeting in accordance with any specification made thereon, if the Proxy is returned properly executed and delivered in time for voting. Unless otherwise specified, the Proxy will be voted “FOR” the election of the four director nominees and “FOR” the ratification of the appointment of independent auditors.

Management does not intend to present, and does not know of anyone who intends to present, any matters at the meeting to be acted upon by the shareowners not referred to in the Notice and this Proxy Statement. If any other matters should properly come before the meeting, it is the intention of the persons named in the Proxy to vote in accordance with their judgment on such matters.

PROPOSAL 1
ELECTION OF DIRECTORS

The following directors, whose terms of office expire at the Annual Meeting, Mr. David P. Molfenter, Mr. W. Peter Slusser, Mr. Bradley O. Smith, and Dr. Lynda J. –S. Yang are nominees for election to a three (3) year term expiring in 2010. The nominations were made by the Nominating and Corporate Governance Committee and the Board of Directors. No director nominations were received from shareowners. The following portion of this Proxy Statement contains additional information about these nominees.

A plurality of the votes cast at the meeting is required to elect the nominees as directors of the Company. As such, the four individuals who receive the greatest number of votes cast by the holders of Common Stock will be elected as directors. Shares not voted at the Annual Meeting, whether by abstention, broker non-vote, or otherwise, will not be treated as votes cast at the meeting.

It is believed that all four nominees are, and will be at the time of the Annual Meeting, available for election; and, if elected, will serve. However, in the event one or more of them is or should become unavailable, or should decline to serve, it is intended that the proxies will be voted for the balance of the nominees and for such substitute nominee or nominees as the proxy holders may in their discretion select.

Board Recommendations

The Board of Directors recommends a vote FOR the election of each of the four nominees, Mr. David P. Molfenter, Mr. W. Peter Slusser, Mr. Bradley O. Smith, and Dr. Lynda J.-S. Yang. Unless otherwise directed by marking the accompanying proxy, the proxy holders named therein will vote FOR the election of the four nominees.

In the following table, the column “Amount and Nature of Beneficial Ownership” relates to common shares of the Company beneficially owned by the directors and nominees as of August 30, 2007, and is based upon information furnished by them.


		Has
		Served	Amount and
		as a	Nature of	% of
		Director	Beneficial	Class
Name and Principal Occupation(1)	Age	Since	Ownership(2)	(11)
Nominees for Election as Director for Term Expiring in 2010

*David P. Molfenter* – Retired since August 2000, formerly Vice President Command, Control, Communication and Information Systems Segment, Raytheon Systems Company, a high technology company specializing in defense electronics, Fort Wayne, Indiana.	62	2000	6,119 (3)	*

*W. Peter Slusser* – President, Slusser Associates, Inc., Investment Banking, New York, New York.	78	1997	6,810 (4)	*

*Bradley O. Smith* – Chairman of the Board, Sparton Corporation, Jackson, Michigan, since October 2000. Private Investor since May 1998.	62	1998	1,146,145 (5)	11.6%

*Dr. Lynda J.-S. Yang* – Neurosurgeon and faculty member at the University of Michigan School of Medicine, Ann Arbor since 2004. From 1998 to 2004 Dr. Yang was a resident in the neurosurgery department at the University of Michigan. Dr. Yang received an M.D., Ph.D. degree from the Johns Hopkins School of Medicine in 1997.	40	2007	-0-	*

Directors Whose Term Expires in 2009

*James N. DeBoer* – Of Counsel, law firm of Varnum, Riddering, Schmidt & Howlett, LLP, Grand Rapids, Michigan.	82	1971	11,647 (6)	*

*David H. Hockenbrocht* – Chief Executive Officer and President of Sparton Corporation, Jackson, Michigan.	72	1978	518,173 (7)	5.2%

*James D. Fast* – Chief Executive Officer and President of First Bank – West Michigan, Ionia, Michigan.	59	2001	6,372 (8)	*

Directors Whose Terms Expire in 2008

*Douglas R. Schrank* – Retired since June 2006. Prior to retirement Mr. Schrank was the Executive Vice President and Chief Financial Officer of Perrigo Company, a multinational pharmaceutical company for a period in excess of five years.	59	2007	5,000	*


		Has
		Served	Amount and
		as a	Nature of	% of
		Director	Beneficial	Class
Name and Principal Occupation(1)	Age	Since	Ownership(2)	(11)
*Richard L. Langley* – Chief Financial Officer, Senior Vice President and Treasurer of Sparton Corporation, Jackson, Michigan.	62	2001	73,140 (9)	*

*William I. Noecker* – Chairman of Brasco International Inc., an aluminum fabricator, Detroit, Michigan.	58	1999	6,525 (10)	*


*		denotes a percentage of less than 1%

(1)		Except as noted, the principal occupations referred to have been held by the foregoing nominees and directors for at least five years.

(2)		Unless otherwise indicated by footnote, each director or nominee has sole voting power and owns the shares directly, or shares voting and investment power with his spouse or other family members under joint ownership.

(3)		Includes 3,973 shares, which Mr. Molfenter has the right to acquire pursuant to options exercisable within 60 days.

(4)		Includes 3,973 shares, which Mr. Slusser has the right to acquire pursuant to options exercisable within 60 days. Mr. Slusser is a director of Ampex Corporation, a manufacturer of high performance digital storage equipment and patent licensing and Unigene Laboratories, Inc., a biopharmaceutical company engaged in research, innovation and delivery of small proteins for medical purposes.

(5)		Reference is made to note (1) under the heading “Principal Shareowners” on page 3. Includes 5,188 shares, which Mr. Smith has the right to acquire pursuant to options exercisable within 60 days.

(6)		Includes 3,973 shares, which Mr. DeBoer has the right to acquire pursuant to options exercisable within 60 days.

(7)		Reference is made to note (1) under the heading “Security Ownership of Management” on page 4.

(8)		Includes 3,973 shares, which Mr. Fast has the right to acquire pursuant to options exercisable within 60 days. Mr. Fast is a director of First Bank – West Michigan.

(9)		Reference is made to note (3) under the heading “Security Ownership of Management” on page 4.

(10)		Includes 3,973 shares, which Mr. Noecker has the right to acquire pursuant to options exercisable within 60 days.

(11)		Calculation is based on total shares outstanding as of August 30, 2007 plus shares subject to options exercisable within sixty days as described in this Proxy Statement.

Independent and Non-Management Directors

The listing requirements of the New York Stock Exchange (NYSE) require that a majority of the members of a listed company’s board of directors be non-management. The question of non-management and independence is determined with respect to every director pursuant to NYSE rules. The NYSE rules also require that certain committees be composed entirely of independent and non-management directors. The committees covered by this requirement are the Audit, Compensation, and Nominating and Corporate Governance Committees. Based upon NYSE rules, six of the Board’s then nine members (assuming election of the directors proposed in this proxy statement), a majority, would be independent and seven would be non-management as of June 30, 2007. All current members of the identified committees are non-management and independent in that those directors do not have a material relationship with the Company directly or as a partner, shareowner or affiliate of an entity that has a

relationship with the Company. The Board made its determination of independence based on the fact that none of the independent directors:

	–		Is an officer or employee of the Company, its subsidiaries, or its affiliates, or has any current or past material relationship within the Company; or,

	–		Has an immediate family member who is an officer of the Company or its subsidiaries or that has any current or past material relationship with the Company; or,

	–		Has worked for, consulted with, or received anything of substantial value from the Company aside from his compensation as a Director; or,

	–		Is currently, or was within the past three years, employed by the independent auditors for the Company; or,

	–		Serves on the compensation committee or the board of directors of any corporation that employs a nominee for Director or a member of their immediate family; or,

	–		Is an executive officer of any entity which the Company’s annual sales to or purchases from exceeded one percent of either entity’s annual revenues for the last fiscal year; or,

	–		Has beneficial ownership of more than five percent of the Company’s outstanding common stock, or,

	–		Serves as a director, trustee, executive officer or similar position of a charitable or non-profit organization to which the Company or its subsidiaries made charitable contributions or payments in fiscal year 2007 in excess of two percent of the organization’s charitable receipts.

Independent and Non-Management Directors

James N. DeBoer
James D. Fast
Douglas R. Schrank
David P. Molfenter – Chairman, Nominating and Corporate Governance Committee
William I. Noecker – Chairman, Audit Committee and Lead Independent Director
W. Peter Slusser – Chairman, Compensation Committee

Non-Management Director

Bradley O. Smith – Chairman, Executive Committee and Chairman of the Board

Meetings of Independent and Non-Management Directors

The Independent Directors, as well as Non-Management Directors, schedule meetings in executive sessions without the presence of the Company’s management. An Independent Director is selected to preside over the sessions during the year.

The Independent Directors met four times during the last fiscal year. The Non-Management Directors met once during the last fiscal year.

Shareowners wishing to communicate directly with the Independent or Non-Management Directors may send correspondence addressed as follows:


		Independent Directors		Non-Management Directors
		c/o Corporate Secretary		c/o Corporate Secretary
		Sparton Corporation		Sparton Corporation
		2400 E. Ganson St.		2400 E. Ganson St.
		Jackson, Michigan 49202		Jackson, Michigan 49202

Lead Independent/Non-Management Director

Mr. William I. Noecker has previously been designated by the Independent Directors as the Lead Independent/Non-Management Director. The Lead Independent/Non-Management Director provides leadership to enhance the Board’s effectiveness, preside over meetings of the Independent and Non-Management directors without management present, and serve as a liaison between the Board and management. The Lead Independent/Non-Management Director is responsible for determining when to hold, and who shall preside over, executive sessions held by the Independent and Non-Management directors. Communications from shareowners, employees, or third parties, should these parties desire not to communicate directly with the Board of Directors or management may be sent to the Lead Independent/Non-Management Director, in care of the Corporate Secretary, using the above address.

Shareowner Communications Policy

Shareowners should communicate with the Board of Directors by sending a letter to the Sparton Board of Directors, c/o the Office of the Corporate Secretary, 2400 East Ganson Street, Jackson, Michigan 49202. The Office of the Corporate Secretary will receive the correspondence and forward it to the director or directors to whom the communication is directed, unless the communication is unduly hostile, threatening, harassing, illegal, and not reasonably related to Sparton or its business, or similarly inappropriate. The Office of the Corporate Secretary has the authority to discard or disregard any inappropriate communications (other than a proposal submitted pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended, or any communication made in connection with such a proposal) or to take other appropriate actions with respect to any such inappropriate communications. In addition, the Office of the Corporate Secretary is authorized to forward communications that are clearly more appropriately addressed by other departments, such as customer service or accounting, to the appropriate department. The foregoing instructions by the directors to the office of the Corporate Secretary are subject to change by the directors. Additionally, all communications are available to any director who wishes to review them.

Board and Committee Information

The Board of Directors, which had seven meetings, including the Annual Meeting, during the past fiscal year, has standing Audit, Compensation, Executive, and Nominating and Corporate Governance Committees.

The Audit Committee met four times during the last fiscal year and consisted of Messrs. William I. Noecker (Chairman), James D. Fast, and David P. Molfenter. This Committee operates under a written charter and oversees auditing, financial reporting and internal control matters. It also selects the firm that Sparton retains as its independent auditors and recommends the ratification of their selection by the shareowners. The Committee consults with the independent auditors and oversees their audit and other work. The Committee also consults with the Chairman of the Board, President, and Senior Vice President-Treasurer and oversees those individuals who review Sparton’s internal controls and compliance with policies. The members of the Audit Committee are independent, as defined under the New York Stock Exchange listing standards. The Board has determined that Mr. Noecker, in addition to being “independent,” is an “audit committee financial expert” as defined in the Security and Exchange Commission’s (SEC) regulation S-K, Item 407(d)(5)(ii). The independent auditors have access to the Committee without any other members of management being present. The Audit Committee met with management and the independent auditors before the announcement of earnings each quarter. The Audit Committee also met with the independent auditors without management present on one occasion during fiscal year 2007. The Committee also reviewed the annual consolidated financial statements and annual report on Form 10-K and the Audit Committee report in this Proxy Statement before each was filed with the SEC. The functions and qualifications for membership are set forth in its charter, a copy of which is available on the Company’s website.

The Compensation Committee, which held six meetings during the last fiscal year and consisted of Messrs. W. Peter Slusser (Chairman), James N. DeBoer, and David P. Molfenter, monitors the remuneration, including stock options, for the Company’s executive officers, including the Named Executive Officers (defined below). The Compensation Committee is not authorized to delegate its authority to others, with the exception of the delegation to the Chief Executive Officer of the formulation of proposed compensation amounts to executives and proposed compensation plans and processes. The Compensation Committee does not, as a matter of regular practice, employ compensation consultants to determine the amount or form of executive and director compensation. The compensation

philosophy, the compensation components, and their application as described in the Compensation Discussion and Analysis which appears below, are generally employed by the Compensation Committee in connection with the compensation for all of the executives of the Company.

The Executive Committee, which consisted of Messrs. Bradley O. Smith (Chairman), James N. DeBoer, David W. Hockenbrocht, and William I. Noecker, did not meet during fiscal 2007. The Executive Committee is empowered to act for the full Board in intervals between Board meetings, with the exception of certain matters that by law may not be delegated. The Committee meets as necessary, and all actions by the Committee are reported at the next Board of Directors meeting.

The Nominating and Corporate Governance Committee, which consisted of Messrs. David P. Molfenter (Chairman), James D. Fast and Richard J. Johns, M.D., held four meetings last fiscal year. Dr. Johns attended three meetings prior to his resignation on January 30, 2007. Mr. James N. DeBoer was appointed to the Committee following Dr. Johns’ resignation. The Committee reviews the makeup of the existing Board of Directors and the tenure of its members, consistent with appropriate principles of corporate governance and applicable regulations. The Committee also receives candidate resumes, and considers and recommends candidates for election to the Board consistent with the needs of the Company, regulatory requirements, and the qualifications of the candidates. The Committee has implemented a formal process for consideration of candidates.

The Company’s website address is www.sparton.com. Information provided at the website includes, among other items, the Company’s Corporate Governance Guidelines, current charters for the Audit, Compensation, Nominating and Corporate Governance, and Executive Committees of the Board of Directors, Board committees and their membership, and the Company’s Code of Business Conduct and Ethics. The committee charters are also available in print and can be obtained by written request directed to the Corporate Secretary at 2400 East Ganson Street, Jackson, Michigan 49202.

All directors attended at least 75% of the meetings of the Board and committees on which they serve. In addition, the directors are expected to attend the Annual Shareowners’ Meeting. At the Company’s fiscal 2006 Annual Meeting, all nine of the directors were in attendance. During fiscal year 2006 and 2007, under the auspices of the Governance and Nominating Committee, the Board conducted several programs for director education which were facilitated by the National Association of Corporate Directors.

Director Qualifications

The Nominating and Corporate Governance Committee is responsible for reviewing with the Board, from time to time, the appropriate qualities, skills and characteristics desired for Board members in the context of the current make-up of the Board. This assessment includes consideration of the following summary of minimum qualifications that the Nominating and Corporate Governance Committee believes must be met by all directors, as well as the following considerations for the composition of the Board as a whole.

Essential Qualities

–		Relevant and substantial business experience, with an understanding of what is involved in leading a company

–		Sound business instincts and judgment, with the ability to make informed and strategic decisions

–		Professional and personal reputation and integrity consistent with the Company’s Code of Ethics

–		Strong interpersonal skills evidencing the ability to work as part of a group and express views that are both challenging to and supportive of management

–		Commitment and availability to the Company to perform necessary and desired duties, with the ability to accept accountability for their role in Board decisions

–		Genuinely interested in the Company, its business, and its people, with a willingness to remain committed over a period of several years

Board Composition Considerations

–		Strategic mix of directors allowing for diverse expertise and experience fitting the specific needs of the Company, now and anticipated in the future

–		Multiple directors possessing understanding and expertise in the area of accounting and finance

–		Minimum of one director with understanding and experience in legal and/or regulatory matters

–		Multiple directors with specific experience and knowledge of the risks and challenges unique to the industry in which the Company operates

–		Visionaries with the ability to lead, manage change, and assist in the continued growth of the Company

–		Familiarity and ability to relate to, and deal with, the media and various financial markets

These factors and others are considered useful by the Board, and are considered in an assessment of the perceived needs of the Board at a particular point in time.

Process for Identifying and Evaluating Director Nominees

The Board is responsible for selecting its own members. The Board delegates the evaluation, selection and nomination process to the Nominating and Corporate Governance Committee, with the expectation that other members of the Board and management will be requested to take part in the process as appropriate.

Once candidates have been identified, the Nominating and Corporate Governance Committee confirms that the candidates meet all of the minimum qualifications for director nominees established by the Nominating and Corporate Governance Committee. Potential candidates for directors are generally suggested to the committee by current board members and shareowners, and are evaluated at meetings of the committee. Based on the results of the evaluation process, the Nominating and Corporate Governance Committee recommends candidates for the Board’s approval as director nominees for election to the Board. The Nominating and Corporate Governance Committee also recommends candidates for the Board’s appointment to the committees of the Board.

Procedure for Recommendation of Director Nominees by Shareowners

The Nominating and Corporate Governance Committee will consider director candidates who are recommended by shareowners of the Company. To recommend a nominee, a shareowner should write to the Company’s Corporate Secretary at 2400 E. Ganson St., Jackson, MI 49202. To be considered by the Committee for nomination and inclusion in the Company’s Proxy Statement for its 2008 Annual Meeting of Shareowners, a shareowner recommendation for a Director must be received by the Company’s Secretary no later than 60 days prior to the Annual Meeting. Any recommendation must include (i) the name and address of the candidate, (ii) a brief biographical description, including his or her occupation for at least the last five years, and a statement of the qualifications of the candidate, taking into account the qualification requirements summarized above, and (iii) the candidate signed consent to be named in the Proxy Statement and to serve as a Director if elected. The Committee may seek additional biographical and background information from any candidate that must be received on a timely basis to be considered by the Committee. Further information regarding shareowner recommendation of director candidates is contained in the Nominating and Corporate Governance Committee Charter, which is available at the Company’s website.

Assuming the appropriate biographical and background material is provided for candidates submitted by shareowners, the Committee will evaluate those candidates by following substantially the same process, and applying substantially the same criteria, as for candidates submitted by Board members. All Directors nominees recommended for election at the 2007 Annual Meeting are current members of the Board. The Committee did not receive any director nominations from shareowners for the 2007 Annual Meeting.

Board Compensation

For fiscal 2007, independent directors received an annual base retainer of $10,000. During fiscal 2007, independent directors also received $600 for each regularly scheduled Board meeting attended and the annual meeting, and $500 for each regularly scheduled committee meeting and each special board meeting attended. Non-independent directors are paid $500 for each regularly scheduled board meeting attended and each special meeting of the Board.

In addition to his directors’ fees, which totaled $14,700 in fiscal 2007, Mr. Bradley O. Smith is compensated for services rendered as Chairman of the Board of Directors. Such compensation totaled $63,711 for fiscal 2007.

Corporate Governance

The Sarbanes-Oxley Act of 2002 was enacted on July 30, 2002. The statute addresses, among other issues, corporate governance, auditing and accounting, executive compensation, and enhanced and timely disclosure of corporate information. In November 2003, the SEC approved new corporate governance rules for the New York Stock Exchange that address director independence and corporate accountability. The changes were designed to allow shareowners to more easily and efficiently monitor the performance of companies and directors.

Sparton’s Board of Directors developed a series of changes to address these new requirements. The Audit Committee revised its charter and adopted a policy for pre-approving all services, audit and non-audit, performed by the Company’s Independent Auditors. In addition, the Board adopted charters for the Compensation, Executive, and Nominating and Corporate Governance Committees. These charters address issues such as independence of the committee members, committee organization and powers, member qualifications, duties and responsibilities, and corporate governance. As of June 30, 2007, all members of the Audit, Compensation, and Nominating and Corporate Governance Committees were independent directors. Copies of the charters for each of these committees are located on the Company’s website. The Company continues to develop and refine its Corporate Governance policies and practices and their place within the Board’s committee structure.

Code of Ethics

“The Sparton Way” governs the actions and working relationships of Sparton employees, officers and directors. “The Sparton Way” endorses the highest level of ethical standards, along with addressing other issues such as corporate opportunities, confidentiality, and the protection and proper use of corporate assets. The Company also updated its long standing Code of Business Conduct and Ethics in light of current regulatory requirements.

To the extent any waiver is granted with respect to the Code of Business Conduct and Ethics that requires disclosure under applicable SEC rules, such waiver will also be posted on the website, as will any amendment that may be adopted from time to time. Sparton’s Shareowner Letters, Annual Report, Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and news releases are also available at the website, or are available, without charge, by contacting the Shareowners’ Relations Department at 1-800-248-9579.

Whistleblower Provisions

It is the policy of Sparton Corporation to encourage its employees and other persons to disclose improper activities, and to address complaints alleging acts of reprisal or intimidation resulting from disclosure of improper activities. Individuals wishing to report improper activities may call Sparton’s Whistleblower service at 1-866-393-7585. Activities may be reported anonymously if desired.

Audit Committee Report

The Audit Committee has reviewed and discussed Sparton’s audited consolidated financial statements for the fiscal year ended June 30, 2007, with management and with Sparton’s independent registered public accounting firm (“independent auditors”), BDO Seidman, LLP. Management is responsible for Sparton’s internal controls and the financial reporting process. The independent auditors are responsible for performing an independent audit of Sparton’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States).

The Audit Committee has discussed with BDO Seidman, LLP the matters required to be discussed by Statement on Auditing Standards No. 61, as amended, relating to the conduct of the audit. The Audit Committee has received the written disclosures from BDO Seidman, LLP required by Independence Standards Board Standard No. 1 (Independence Discussion with Audit Committees), discussed with BDO Seidman, LLP their independence, and considered the compatibility of non-audit services provided by BDO Seidman, LLP with their independence.

Based on the review and discussion described above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements for the fiscal year ended June 30, 2007, be included in Sparton’s Annual Report on Form 10-K for the fiscal year ended June 30, 2007, for filing with the Securities and Exchange Commission.

William I. Noecker, Chairman
James D. Fast
David P Molfenter

PROPOSAL 2

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

Relationship with Independent Auditors

The Audit Committee appoints the independent auditors for Sparton. In addition to performing the audit of the Company’s consolidated financial statements, BDO Seidman, LLP provided various other services during fiscal 2007. The Audit Committee has considered the provision of all non-audit services performed by BDO Seidman, LLP during fiscal 2007 with respect to maintaining auditor independence. The Audit Committee reviewed and pre-approved all professional services requested of, and performed by, BDO Seidman, LLP. The Pre-Approval Policy for audit and non-audit services was included as an appendix to the Company’s 2003 Proxy Statement. The aggregate fees billed for fiscal 2007 and 2006 for each of the following categories of services are set forth below.

Pursuant to the Pre-Approval Policy, the Audit Committee annually reviews and pre-approves the services that may be provided by the independent auditor without obtaining specific pre-approval from the Audit Committee, and such services are considered approved through the next annual review. The Audit Committee revises the list of pre-approved services from time to time based on subsequent determinations. The Audit Committee may delegate pre-approval authority to one or more of the members. The member or members to whom such authority is delegated shall report any pre-approval decisions to the Audit Committee at its next scheduled meeting.

Fiscal 2007

Audit Fees – The aggregate fees of BDO Seidman, LLP for professional services rendered for the audit of Sparton’s annual consolidated financial statements for the fiscal year ended June 30, 2007, and the reviews of the consolidated financial statements included in the Company’s Quarterly Reports on Form 10-Q for that fiscal year, were $357,000.

Audit-Related Fees – The aggregate audit-related fees of BDO Seidman, LLP for professional services rendered, primarily for the audit of the Company’s employee benefit plans and consulting and related assistance regarding the acquisition of Astro, for the fiscal year ended June 30, 2007, were $56,000.

Tax Fees – The aggregate fees of BDO Seidman, LLP for tax services, preparation and review, rendered for the fiscal year ended June 30, 2007, were $65,000.

All Other Fees – There were no fees for other services billed by BDO Seidman, LLP for the fiscal year ended June 30, 2007, and there were no Financial Information Systems Design and Implementation services provided.

Fiscal 2006

Audit Fees – The aggregate fees of BDO Seidman, LLP for professional services rendered for the audit of Sparton’s annual consolidated financial statements for the fiscal year ended June 30, 2006, and the reviews of the consolidated financial statements included in the Company’s Quarterly Reports on Form 10-Q for that fiscal year, were $265,000.

Tax Fees – The aggregate fees of BDO Seidman, LLP for tax services, preparation and review, rendered for the fiscal year ended June 30, 2006, were $67,000.

All Other Fees – There were no fees for other services billed by BDO Seidman, LLP for the fiscal year ended June 30, 2006, and there were no Financial Information Systems Design and Implementation services provided.

Auditor Independence

The Audit Committee is required to consider the independence of BDO Seidman, LLP when engaging the firm to perform audit-related and other services. In 2007, it was determined by the Committee that audit-related and other services provided and the fees paid for those services were compatible with maintaining the independence of BDO Seidman, LLP.

Vote Required

At a meeting on August 29, 2007, the Audit Committee of the Board of Directors took action to approve the retention of the accounting firm of BDO Seidman, LLP as the independent auditors for the Company for the fiscal year ending June 30, 2008. Such approval is subject to shareowner ratification.

In order to be adopted, this proposal must be approved by the holders of a majority of the outstanding shares of our common stock present or represented by proxy and entitled to vote at the Annual Meeting. If the shareowners do not ratify the appointment of BDO Seidman, LLP, our Board of Directors will consider the selection of other auditors.

Board Recommendation

The Board of Directors recommends that shareowners vote “FOR” the ratification of the selection of BDO Seidman, LLP.

Representatives of BDO Seidman, LLP, the Company’s independent registered public accounting firm, are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.

EXECUTIVE COMPENSATION

Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis section of this proxy statement (the “CD&A”) for the fiscal year ended June 30, 2007 which appears below. Based on the review and discussions referred to in the preceding sentence, the Compensation Committee recommended to the Board of Directors that the CD&A be included in this Proxy Statement and incorporated by reference in Sparton’s Annual Report on Form 10-K for the fiscal year ended June 30, 2007.

THE COMPENSATION COMMITTEE

W. Peter Slusser, Chairman
James N. DeBoer
David P. Molfenter

Compensation Discussion and Analysis

The rules regarding the disclosure of executive compensation were significantly changed in 2006 by the Securities and Exchange Commission for future proxy statements. In addition to new and different tables, a greater emphasis is placed on providing discussion and analysis of the Company’s compensation practices. As a result, the information contained in this 2007 Proxy Statement is not directly comparable to the information contained in the 2006 Proxy Statement.

The Compensation Committee (the “Committee”) is authorized (i) to assist management with compensation policies and programs for the Company’s Chief Executive Officer, the Principal Financial Officer, and its three other most highly compensated executive officers, (the “Named Executive Officers”) (ii) to review and approve the performance goals established for the Chief Executive Officer and the Named Executive Officers; and (iii) to recommend, after considering the results of the Executives’ performance and the Company’s profitability, the salaries and incentive bonuses for the Named Executive Officers.

Three independent directors comprise the Committee. Their responsibilities are carried out pursuant to authority delegated by the Board of Directors and in accordance with the federal securities laws and other applicable laws and regulations. The Committee is governed by a written charter which can be found on the Company’s website at http://www.sparton.com.

Compensation Philosophy

The Company has formulated a compensation philosophy with the objective of fair, competitive and performance-based compensation of its executive officers, including the Named Executive Officers. The philosophy reflects the belief that the total compensation of the Named Executive Officers should be aligned with the Company’s performance. While the specific programs may be modified from year to year, the compensation philosophy has remained consistent for many years. The Committee seeks to reward performance with cost-effective compensation that aligns employee efforts with the Company’s business strategy through adherence to the following compensation policies:

	•		Named Executive Officers’ total compensation should strengthen the relationship between pay and performance by including and emphasizing variable, at-risk compensation that is dependent on achieving specific corporate, business function, and/or individual performance goals.

	•		An element of pay for Named Executive Officers should be comprised of long-term incentives to align management interests with those of its shareowners.

	•		The incentive components of pay should be weighted toward long-term factors as described below.

	•		Total compensation opportunities should enhance the Company’s ability to attract, retain and develop knowledgeable and experienced executives.

	•		Base salary should be targeted at compensation comparable to that paid to executives of similar electronics contract manufacturers.

In devising and maintaining the Company’s executive compensation program, the Committee reviews published data relevant to the compensation of executives in publicly owned competitor companies which operate in the electronics contract manufacturing industry. The Committee also consults with management, and outside accounting and legal advisors as appropriate. The Committee has not utilized compensation consultants. The Committee’s recommendations are subject to approval by the Board of Directors.

Components of Compensation

The key elements of the Company’s executive compensation program are base salary, short-term (annual) incentive and long-term incentive compensation. These elements are addressed separately below.

The Committee does not use mathematical formulas exclusively to determine compensation. In setting each component of compensation, the Committee considers all elements of a Named Executive Officer’s total compensation package, including base salary, incentive compensation, and the value of benefits.

Base Salaries

A competitive base salary provides the foundation for a total compensation package required to attract, retain, and motivate the Executives in alignment with the Company’s business strategies. The Committee reviews with the Chief Executive Officer and approves, with modifications considered appropriate, his recommendation of the annual base salary for each of the Named Executive Officers (other than the Chief Executive Officer) on an annual basis, generally in the first quarter of the fiscal year. The Committee independently reviews and sets the base salary for the Chief Executive Officer, subject to the approval of the Board of Directors.

Base salaries are initially premised upon the responsibilities of each Named Executive Officer. Base salaries are further adjusted based on industry surveys and related data, and performance judgments as to the past and expected future contributions of the Named Executive Officer. The Committee reviews each Named Executive Officer’s base salary annually.

Short-Term Incentives

Short-term incentives are paid pursuant to Sparton’s Return on Capital Employed (“ROCE”) Annual Incentive Bonus Plan which is reflective of the Company’s goals of relating compensation to corporate performance. This plan permits Named Executive Officers and other key management employees to earn additional compensation if return on capital employed meets or exceeds an established goal. The goal is set on an annual basis and is reflective of the Company’s business forecasts for the fiscal year. The ROCE metric is calculated using profit before taxes, as adjusted for non-recurring and certain other items, divided by Average Capital Employed which is defined as the total of average accounts receivable excluding inter-company balances, average inventory and average net property, plant and equipment. If the ROCE target is met, or is within allowable deviations, Named Executive Officers and other key employees share in a fund established for the particular class of employee. The employees of Sparton’s newly acquired subsidiary, Astro Instrumentation, Inc., (now known as Sparton Medical Systems, Inc.) including Duane K. Stierhoff, one of the Named Executive Officers, did not participate in the ROCE Plan during fiscal 2007, though certain employees may participate in fiscal 2008. During the 2007 fiscal year, there were no bonuses awarded under the ROCE Plan, as the ROCE plan target goal was not realized.

The performance goals for the ROCE incentive bonus compensation plan are prepared annually by the Chief Executive Officer, reviewed and approved annually by the Committee, and presented to the Board of Directors for their review and approval.

At the discretion of the Committee, bonuses may be paid in addition to or in lieu of bonuses earned under the ROCE incentive bonus plan based on the Committee’s evaluation of the individual performance and level of

responsibility of the Named Executive Officer. During the past fiscal year, select discretionary bonuses were paid to Named Executive Officers aggregating $56,108.

In determining discretionary annual incentive bonuses for the Named Executive Officers, the Committee evaluates the Chief Executive Officer’s recommendations based on individual performance. The Committee independently evaluates the individual performance of the Chief Executive Officer. The results of those evaluations are used by the Committee to award the short-term incentive bonuses to the Named Executive Officers.

In 2006, Sparton Medical Systems Inc. entered into four-year employment agreements with certain members of the management of that subsidiary, including Duane K. Stierhoff. Mr. Stierhoff’s employment agreement provides for annual short term incentive bonuses based on the financial results of the subsidiary for the respective fiscal years over the term of the employment agreement. This short term annual incentive bonus is in lieu of Mr. Stierhoff’s participation in the ROCE incentive bonus plan. Mr. Stierhoff’s bonus for fiscal year 2007 is provided in the Bonus column of the Summary Compensation table.

Long Term Incentives.

In keeping with the Company’s philosophy of providing a total compensation package that includes long-term incentives, a Named Executive Officer’s total compensation package may include stock options, restricted stock, stock units and/or cash. These incentives are designed to motivate and reward Named Executive Officers for maximizing shareowner value and encourage the long-term employment of key employees.

When awarding long-term incentives, the Committee considers a Named Executive Officer’s overall level of responsibility, Company performance and individual performance criteria, as well as the compensation practices of the peer group of companies used to evaluate total compensation.

The Company annually reviews the long-term incentive elements of its compensation package, including the beneficial and detrimental aspects of particular compensation components such as stock options, to determine the continuing efficacy of such programs. While the Company has not reached any conclusion, nor have any replacement plans been submitted to the Committee for its consideration as of the date of this Proxy, it is reviewing cash based long-term incentive plans for consideration by the Committee. The Company and the Committee objective is to conclude their respective reviews and institute a new long-term incentive plan, if such a plan is deemed appropriate, within the fiscal year 2008. The effective date of any new program has yet to be determined.

Stock Options.

The number of shares awarded through stock option grants is based primarily on the per share price on the date of the award. As a result, the number of shares underlying stock option awards may vary from year to year, as it is dependent on the price of Sparton’s common stock on the date of grant. The size of the award can also be adjusted based on individual factors.

Because the exercise price of these options is equal to the fair market value of Sparton’s common stock as of the close of the stock market on the day preceding the date of grant (as specified in the plan), these stock options will only deliver a reward if the stock price appreciates from the price on the date the stock options were granted. This is intended to focus Named Executive Officers on the long-term enhancement of shareowner value.

During fiscal year 2007, no stock options were awarded to the Named Executive Officers other than those awarded to Mr. Duane Stierhoff in conjunction with the acquisition of Sparton Medical Systems, Inc. (See “Grants of Plan Based Awards” table on page 19 for additional information).

It should also be noted that during fiscal year 2007, no outstanding stock options were re-priced, on either an individual or collective basis, consistent with the Company’s long established policy of not re-pricing stock options, except to avoid the dilutive effect of certain actions such as the declaration of stock dividends as provided in the Amended and Restated Sparton Corporation Stock Incentive Plan dated October 2001 (“Long Term Incentive Plan”).

Other Compensation

The Named Executive Officers receive a variety of modest miscellaneous benefits, the value of which is presented for the Named Executive Officers under the caption “All Other Compensation” in the Summary Compensation Table. These benefits include taxable life insurance, health insurance, the Company’s qualified pension plan, the Company’s 401(k) Plan and other miscellaneous benefits.

Compensation Committee Interlocks and Insider Participation

Mr. Slusser, Mr. DeBoer and Mr. Molfenter are not officers or employees, or former officers or employees of the Company or any of its subsidiaries. No interlocking relationship exists between members of the Company’s Board of Directors or the Compensation Committee and the board of directors or compensation committee of any other company, nor has such an interlocking relationship existed in the past.

Summary Compensation Table

The table below contains information pertaining to the annual compensation of the Named Executive Officers.

Summary Compensation Table


							Changes in
							Pension
							Value and
						Non-	Non-
						Equity	Qualified
						Incentive	Deferred
						Plan	Compensa-	All Other
				Stock	Option	Compensa-	tion	Compensa-
Name and Principal	Fiscal	Salary	Bonus	Awards	Awards	tion	Earnings	tion
Position	Year	($)	($)	($)	($)	($)	($)	($)	Total
*David W. Hockenbrocht* President and Chief Executive Officer	2007	$330,750 (1)	—	—	—	—	$56,322	$23,741 (3)	$410,813

*Richard L. Langley* Senior Vice President and Chief Financial Officer	2007	160,152	—	—	—	—	33,767	12,462 (4)	206,381

*Douglas E. Johnson* Chief Operating Officer and Executive Vice President	2007	185,418	—	—	—	—	29,385	11,198 (5)	226,001

*Duane K. Stierhoff* Senior Vice President	2007	165,480 (2)	$54,108	—	$47,500	—	—	—	267,088

*Erik Fabricious Olsen* Vice President	2007	122,944	2,000	—	—	—	2,465	45,679 (6)	173,088


(1)		Mr. Hockenbrocht’s salary has been frozen at his request for the past three fiscal years.

(2)		Mr. Stierhoff’s salary is set pursuant to his employment agreement described below (and has been adjusted since inception consistent with changes in his duties).

(3)		Includes directors’ fees of $3,000, a car allowance of $5,850, club dues of $9,391, and a matching contribution to the Company’s 401(k) plan of $5,500.

(4)		Includes directors’ fees of $3,000, a car allowance of $5,850 and a matching contribution to the Company’s 401(k) plan of $3,612.


(5)		Includes a car allowance of $5,700, a cellular phone allowance of $150, and a matching contribution to the Company’s 401(k) plan of $5,348.

(6)		Includes relocation fees of $42,236 and a matching contribution to the Company’s 401(k) plan of $3,443.

Plan Based Compensation

Equity Compensation Plans Approved by Shareowners

Sparton shareowners approved the Amended and Restated Sparton Corporation Stock Incentive Plan dated October 2001 (Long Term Incentive Plan). Sparton uses the Long Term Incentive Plan for stock based incentive awards. These awards can be in the form of stock options, stock appreciation rights, restricted stock, or performance shares. There are currently 193,688 shares available for future awards.

Equity Compensation Plans Not Approved by Shareowners

Sparton does not maintain any equity compensation plans not approved by shareowners.

Plan Based Awards in the Last Fiscal Year

The following table sets forth certain information about plan based awards that were made to the Named Executive Officers during fiscal 2007.

Grants Of Plan-Based Awards

All Other

Grant

Stock

Option

Date

Awards:

Exercise

Fair

Number

Number of

or Base

Value of

Estimated Future Payouts Under

of Shares

Securities

Price of

Stock

Non-Equity Incentive Plan Awards

Equity Incentive Plan Awards

of Stock

Underlying

Option

and

Grant

Threshold

Target

Maximum

Threshold

Target

Maximum

or Units

Options

Awards

Option

Date

($)

(#)

($/Sh)

Awards

Mr. Hockenbrocht

—

Mr. Langley

—

Mr. Johnson

—

Mr. Stierhoff

8/31/06

—

10,500

(1)

8.48

47,500

Mr. Olsen

—


(1)		The amount of the stock option and the exercise price have been adjusted to reflect the 5% stock dividend dated December 27, 2007.

The following table sets forth certain information about the status of equity awards outstanding for the Named Executive Officers as of June 30, 2007.

Outstanding Equity Awards at Fiscal Year-End

Option Awards

Stock Awards

Equity

Incentive

Equity

Plan

Incentive

Awards:

Plan

Market or

Equity

Awards:

Payout

Incentive Plan

Number

Market

Number of

Value of

Awards:

Value of

Unearned

Number of

Shares

Shares,

Shares

Securities

or Units

Units or

Underlying

of Stock

Other

Options

Unexercised

Option

That

Rights that

Granted

Unearned

Exercise

Expira-

Have

have not

(#)

Options

Price

tion

Not

Vested

Name

Exercisable

Unexercisable

(#)

($)

Date

Vested

(#)

($)

Mr. Hockenbrocht

31,907

—

6.66

8/23/07

12,155

—

6.52

4/25/13

11,025

8.57

4/22/15

Mr. Langley

9,571

—

6.66

8/23/07

1,216

—

6.52

4/25/13

5,513

8.57

4/22/15

Mr. Johnson

9,571

—

6.66

8/23/07

5,513

8.57

4/22/15

Mr. Stierhoff

-0-

10,500

8.48

8/31/16

Mr. Olsen

3,038

—

6.52

4/25/13

2,757

8.57

4/22/15

Each of the stock options were granted pursuant to the Amended and Restated Sparton Corporation Stock Incentive Plan dated October 24, 2001 and are exercisable in four equal annual installments, commencing one year from the date of the grant.

Aggregated Option Exercises in Last Fiscal Year

The following table sets forth certain information about option exercises and stock awards during fiscal 2007 by the Named Executive Officers.

Option Exercises And Stock Vested

Option Awards

Stock Awards

Number of

Shares

Value

Shares

Acquired on

Realized on

Acquired on

Value Realized on

Exercise

Vesting

Name

(#)

($)

(#)

($)

Mr. Hockenbrocht

54,699

158,627

Mr. Langley

24,311

61,994

Mr. Johnson

30,388

77,489

Mr. Stierhoff

—

Mr. Olsen

1,216

3,527

Other Benefit Plans

401(k) Retirement Plan

Sparton maintains a 401(k) retirement savings plan that is available to substantially all U.S. employees. Sparton matches 50% of each participant’s voluntary contribution up to 6% of the participant’s compensation and a participant vests ratably over a 5-year period in the matching contributions. Prior to July 1, 2007, Sparton’s matching contribution was directed to be invested in Sparton stock, which investment could not be redirected. No employee contributions could be invested in such shares. As of July 1, 2007, a participant’s investment in Sparton common stock may be directed, at the participant’s election and subject to certain limitations, to other available investment options. Also effective July 1, 2007, at the election of the participant, both employer and employee contributions may be invested in any of the available investment options under the plan, which election options now include Sparton common stock. However, an employee’s total investment in Sparton common stock is subject to a 20% limitation of the total value of the employee’s fund balance.

Astro Instrumentation, Inc, (now Sparton Medical Systems, Inc. as noted above), maintained a 401(k) retirement savings plan for the benefit of its employees prior to its acquisition in May of 2006. The plan was established on January 1, 2002. The plan was funded solely by employee voluntary contributions and Astro Instrumentation, Inc. did not make contributions to the plan on a matching or other basis. The Astro Instrumentation, Inc. 401(k) plan was merged into the Sparton 401(k) plan on July 1, 2007.

Qualified Defined Benefit Plan

The pension plan, in which the Company’s Named Executive officers participate (excepting Mr. Stierhoff), is a defined benefit plan covering substantially all of the domestic employees of the Company (other than employees of Sparton Medical Systems, Inc.). The defined benefit plan was amended effective July 1, 2007 to include the employees of Sparton Medical Systems, Inc., including Mr. Stierhoff. During the past year no cash contribution was made by the Company to the plan as in the judgment of the Company’s independent actuaries, the pension plan was fully funded. The plan provides a basic benefit of $2.25 per month for each year of credited service up to a maximum of $90 per month. In addition, for those participants who contributed 5% of their monthly compensation (excluding bonuses) per month, the plan provides for an additional monthly pension amount equal to 1¹/2 % of the participant’s final five-year average monthly compensation (excluding bonuses) times the participant’s years of contributory credited service to a maximum of 30 years. Effective April 1, 2000, the Company amended its defined benefit retirement plan to determine benefits by a cash balance formula. Under the cash balance formula, each participant has a benefit equal to their cash balance account which is credited yearly with 2% of their salary, as well as the interest earned on their previous year-end cash balance. Service under the Company’s prior salary-based formula was frozen as of March 31, 2000, and the benefit formula amended to calculate the monthly pension based upon the participant’s five-year average earnings as defined.

The following table shows the number of years of credited service and estimated annual retirement benefits, payable under the pension plan, in specified remuneration and service based classification upon normal retirement at age 65 (or June 30, 2007, if the individual is currently age 65 or older). The benefits shown are not subject to any deduction for Social Security or other offset amounts. The maximum amount of annual compensation allowed to be included in determining final average compensation has been limited by Federal statute to $225,000

for 2007. This amount is subject to future adjustment by the Internal Revenue Service.

Pension Benefits



		Number of Years of		Present Value of
		Contributory		Accumulated		Payments During
		Credited Service		Benefit		the Last Fiscal Year
Name	Plan Name	(#)		($)		($)
Mr. Hockenbrocht	Sparton Corporation Pension Plan		22.25	$	760,348		-0-

Mr. Langley	Sparton Corporation Pension Plan		13.75		319,630		-0-

Mr. Johnson	Sparton Corporation Pension Plan		11.75		262,949		-0-

Mr. Stierhoff(1)	Sparton Corporation Pension Plan		—		—		-0-

Mr. Olsen	Sparton Corporation Pension Plan		—		12,833		-0-


(1)		Mr. Stierhoff was not a participant in the defined benefit plan during fiscal year 2007.

Deferred Compensation Plans or Agreements.

The Company does not maintain any plan or any agreements with Named Executive Officers that provides for the deferral of compensation on a basis that is not tax qualified.

Employment Agreements

All of Sparton’s regular full time employees enter into a standard employment agreement upon commencement of their employment. The standard employment agreement primarily addresses intellectual property and confidential and proprietary information matters and does not contain provisions pertaining to compensation, with the exception of an employment agreement with Duane K. Stierhoff. In 2006, a subsidiary of the Company, Astro Instrumentation, Inc. (now known as Sparton Medical Systems, Inc.) entered into an employment agreement with Mr. Stierhoff. The Agreement currently provides for: i) a term of four-years, ii) an annual salary of $180,200, iii) an annual short term incentive bonus based on the financial results of the subsidiary, iv) options for 10,500 (adjusted for stock dividends) shares of Sparton stock which are exercisable in four equal annual installments, commencing one year from the date of grant, v) a severance based on salary payable under certain defined circumstances, and vi) covenants not to compete, disclose proprietary information or to solicit customers or employees. Mr. Stierhoff’s employment agreement has been amended since its inception to reflect changes in his duties.

Potential Payment Upon Termination or Change-in-Control

Mr. Stierhoff’s employment agreement provides that in the event the Company terminates his employment for reasons other than misconduct (as defined in the agreement), The Company will continue to pay his salary from the date of termination through the end of this Agreement, less any amounts received by him through other employment subsequent to the termination of the Agreement (“Termination Payment”). The Termination Payment is subject to Mr. Stierhoff’s adherence to certain provisions in the employment agreement, including a covenant not to compete for a period of two years from the date of termination, a perpetual covenant relating to non-disclosure of confidential information, a covenant prohibiting the solicitation of customers for a period of one year from date of termination, and a covenant prohibiting the solicitation of employees for a period of one year from the date of termination.

None of the agreements described in the Employment Agreement section above, including Mr. Stierhoff’s, contain provisions providing for payments in the event of a change-in-control of the Company. The Company currently has a severance policy which provides severance pay equal to one week’s pay per year of service, to a maximum of twelve weeks of severance pay which is applicable to all employees, including the Named Executive Officers and other officers upon termination of employment.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and person who own more that 10% of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission (SEC). Officers, directors and greater than 10% shareowners are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. Based solely upon a review of the copies of the forms furnished to the Company, and/or written representations from certain reporting persons, the Company believes that all filing requirements applicable to its officers and directors were met during the fiscal year ended June 30, 2007.

Director Compensation

Independent directors receive an annual base retainer of $10,000 and $600 for each regularly scheduled Board meeting attended and the annual meeting, and $500 for each committee meeting attended and each special board meeting. Non-independent directors are paid $500 for each regularly scheduled board meeting attended and each special meeting of the Board of Directors. In addition, Directors may be engaged to provide individual consulting services for which they will receive separate compensation. No director provided any such individual consulting services in fiscal year 2007.

The members of the Board of Directors of Sparton received the following compensation during the fiscal year ended June 30, 2007:


							Change in
						Non-Equity	Pension Value
						Incentive	and
	Fees Earned					Plan	Nonqualified
	or Paid in			Stock	Option	Compensa-	Deferred	All Other
	Cash			Awards	Awards	tion	Compensation	Compensation		Total
Name	($)			($)	($)	($)	Earnings	($)		($)
Bradley O. Smith	$	78,411	(1)						—	$	78,411
David P. Molfenter		23,200							—		23,200
William I. Noecker		18,200							—		18,200
James D. Fast		20,200							—		20,200
James N. DeBoer		18,100							—		18,100
David W. Hockenbrocht		3,000	(2)						—		3,000
Richard L. Langley		3,000	(2)						—		3,000
W. Peter Slusser		19,200							—		19,200
Richard J. Johns, MD		9,300	(3)						—		9,300
Douglas R. Schrank		600	(4)						—		600


(1)		Mr. Smith was compensated $63,711 for his services as Chairman of the Board, $10,000 for the directors’ base retainer and $4,700 for meeting fees.

(2)		The directors’ fees set forth in this table for Mr. Hockenbrocht and Mr. Langley are the same fees accounted for in the Summary Compensation Table on Page 18, and not additional directors’ fees.

(3)		Richard J. Johns, M.D. resigned in January of 2007 reducing the amount of compensation he received during the fiscal year.


(4)		On June 25, 2007, Douglas R. Schrank was appointed by the Board of Directors to serve the balance of the term of office of Richard J. Johns, M.D., which expires at the annual meeting of shareowners in 2008, or until his successor is elected.

CERTAIN RELATIONSHIPS AND RELATED PERSONS TRANSACTIONS

Certain Relationships. Mr. David W. Hockenbrocht, in his capacity as the Chief Executive Officer of the Company, is a member of the Board of Directors of Cybernet Systems, Inc. (Cybernet). The Company receives the Director’s fee for the Board meetings attended by Mr. Hockenbrocht. The Company owns 14% of Cybernet’s outstanding common stock.

Review and Approval of Related Person Transactions. The Company reviews all relationships and transactions in which the Company and the directors and executive officers or their immediate family members are participants to determine whether such persons have a direct or indirect material interest. As required under SEC rules, transactions that are determined to be directly or indirectly material to the Company or a related person are disclosed in the Company’s proxy statement. In addition, the Nominating and Governance Committee reviews and approves or ratifies any related person transaction that is required to be disclosed. Any member of the Nominating and Governance Committee who is a related person with respect to a transaction under review may not participate in the deliberations or vote respecting approval or ratification of the transaction, provided, however, that such director may be counted in determining the presence of a quorum at a meeting of the committee that considers the transaction.

Related Party Transactions. There were no transactions between the Company and a related party during fiscal year 2007.

SHAREOWNER PROPOSALS – 2008 MEETING

Shareowner proposals intended to be included in the Proxy Statement and the Proxy for the 2008 Annual Meeting of Shareowners of the Company must be received by the Company not later than May 31, 2008, at its principal executive offices, 2400 East Ganson Street, Jackson Michigan 49202, Attention: Corporate Secretary. Shareowners proposals to be presented at the 2008 Annual Meeting which are not to be included in the Company’s Proxy Statement must be received by the Company at this address no later than August 13, 2008.

By Order of the Board of Directors

Joseph S. Lerczak
Secretary

September 27, 2007

Annual Meeting of Shareholders October 24, 2007, 10:00 a.m. local time Ella Sharp Museum of Art & History 3225 Fourth Street, Jackson, Michigan 49203 You can vote in one of three ways: 1) By Mail, 2) By Internet, 3) By Phone. See the reverse side of this sheet for instructions. IF YOU ARE NOT VOTING BY INTERNET OR BY TELEPHONE, COMPLETE BOTH SIDES OF PROXY CARD, SIGN, DATE, DETACH AND RETURN IN THE ENCLOSED ENVELOPE TO: Illinois Stock Transfer Co. 209 West Jackson Boulevard, Suite 903 Chicago, Illinois 60606 IMPORTANT Please complete both sides of the PROXY CARD, sign, date, detach and return in the enclosed envelope. DETACH PROXY CARD HERE This proxy, when properly executed, will be voted in the manner directed hereinby the undersigned shareholder and as described in the Proxy Statement. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” THE ELECTION OF EACH OF THE LISTED DIRECTOR NOMINEES FOR TERMS EXPIRING IN 2010 AND THE RATIFICATION OF THE APPOINTMENT OF BDO SEIDMAN, LLP AS INDEPENDENT AUDITORS FOR THE CORPORATION.

Dated
(Please sign here)

Please sign your name as it appears above. If executed by a corporation, a duly authorized officer should sign. Executors, administrators, attorneys, guardians and trustees should so indicate when signing.

To vote by mail, complete both sides, sign and date the proxy card below. Detach the card below and return it in the envelope provided.

Your telephone vote is quick, confidential and immediate. Just follow these easy steps: 1. Read the accompanying Proxy Statement.

2. Using a Touch-Tone telephone, call Toll Free 1-800-555-8140 and follow the instructions.
3. When asked for your Voter Control Number, enter the number printed just above your name on the front of the proxy card below.

Please note that all votes cast by telephone must be completed and submitted prior to Monday, October 22, 2007, at 11:59 P.M. Central Time. Your telephone vote authorizes the named proxies to vote your shares to the same extent as if you marked, signed, dated and returned the proxy card.

If You Vote By TELEPHONE Please Do Not Return Your Proxy Card By Mail

Your Internet vote is quick, confidential and your vote is immediately submitted. Just follow these easy steps: 1. Read the accompanying Proxy Statement.

2. Visit our Internet voting Site at http://www.illinoisstocktransfer.com and follow the instructions on the screen.

3. When prompted for your Voter Control Number, enter the number printed just above your name on the front of the proxy card.

Please note that all votes cast by Internet must be completed and submitted prior to Monday, October 22, 2007, at 11:59 P.M. Central Time. Your Internet vote authorizes the named proxies to vote your shares to the same extent as if you marked, signed, dated and returned the proxy card.
This is a “secured” web page site. Your software and/or Internet provider must be “enabled” to access this site. Please call your software or Internet provider for further information if needed.

If You Vote By INTERNET, Please Do Not Return Your Proxy Card By Mail

REVOCABLE PROXY

SPARTON CORPORATION 401K

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SPARTON CORPORATION

Bradley O. Smith, David W. Hockenbrocht and Joseph S. Lerczak, and each of them, are hereby appointed proxies of the undersigned with full power of substitution, to represent the undersigned at the Annual Meeting of the Shareholders of SPARTON CORPORATION on October 24, 2007, at 10:00 a.m. local time, and any and all adjournments thereof, and to vote thereat as designated on this Proxy, all the shares of said Corporation which the undersigned would be entitled to vote if personally present.

1. The Board of Directors recommends a vote “FOR” each of the below listed Director nominees for terms expiring in 2010.

01 David P. Molfenter FOR WITHHOLD 02 W. Peter Slusser FOR WITHHOLD 03 Bradley O. Smith FOR WITHHOLD 04 Lynda J.-S. Yang, M.D., Phd. FOR WITHHOLD

2. The Board of Directors recommends a vote “FOR” the ratification of the appointment of BDO Seidman, LLP as independent auditors for the Corporation.

FOR AGAINST ABSTAIN

3. To transact such other business as may properly come before the meeting or at any adjournments thereof.

IMPORTANT

^{THE PROMPT RETURN OF PROXIES WILL SAVE THE CORPORATION THE}EXPENSE OF FURTHER REQUESTS FOR PROXIES. (to be signed on the other side)

Annual Meeting of Shareholders

October 24, 2007, 10:00 a.m. local time Ella Sharp Museum of Art & History 3225 Fourth Street, Jackson, Michigan 49203

You can vote in one of three ways: 1) By Mail, 2) By Internet, 3) By Phone.

See the reverse side of this sheet for instructions.

IF YOU ARE NOT VOTING BY INTERNET OR BY TELEPHONE, COMPLETE BOTH SIDES OF PROXY CARD, SIGN, DATE, DETACH AND RETURN IN THE ENCLOSED ENVELOPE TO: Illinois Stock Transfer Co.

209 West Jackson Boulevard, Suite 903 Chicago, Illinois 60606

IMPORTANT

Please complete both sides of the PROXY CARD, sign, date, detach and return in the enclosed envelope.

DETACH PROXY CARD HERE

This proxy, when properly executed, will be voted in the manner directed hereinby the undersigned shareholder and as described in the Proxy Statement. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” THE ELECTION OF EACH OF THE LISTED DIRECTOR NOMINEES FOR TERMS EXPIRING IN 2010 AND THE RATIFICATION OF THE APPOINTMENT OF BDO SEIDMAN, LLP AS INDEPENDENT AUDITORS FOR THE CORPORATION.

V A O B T O E V R E C N O A N M T E

R COMMON

O H

L E Dated

R N E U M B E R

(Please sign here)

To vote by mail, complete both sides, sign and date the proxy card below. Detach the card below and return it in the envelope provided.

Your telephone vote is quick, confidential and immediate. Just follow these easy steps: 1. Read the accompanying Proxy Statement.

If You Vote By TELEPHONE Please Do Not Return Your Proxy Card By Mail

Your Internet vote is quick, confidential and your vote is immediately submitted. Just follow these easy steps: 1. Read the accompanying Proxy Statement.

2. Visit our Internet voting Site at http://www.illinoisstocktransfer.com and follow the instructions on the screen.

3. When prompted for your Voter Control Number, enter the number printed just above your name on the front of the proxy card.

If You Vote By INTERNET, Please Do Not Return Your Proxy Card By Mail

REVOCABLE PROXY

SPARTON CORPORATION COMMON

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SPARTON CORPORATION

1. The Board of Directors recommends a vote “FOR” each of the below listed Director nominees for terms expiring in 2010.

01 David P. Molfenter FOR WITHHOLD 02 W. Peter Slusser FOR WITHHOLD 03 Bradley O. Smith FOR WITHHOLD 04 Lynda J.-S. Yang, M.D., Phd. FOR WITHHOLD

2. The Board of Directors recommends a vote “FOR” the ratification of the appointment of BDO Seidman, LLP as independent auditors for the Corporation.

FOR AGAINST ABSTAIN

3. To transact such other business as may properly come before the meeting or at any adjournments thereof.

IMPORTANT

^{THE PROMPT RETURN OF PROXIES WILL SAVE THE CORPORATION THE}EXPENSE OF FURTHER REQUESTS FOR PROXIES. (to be signed on the other side)


o Preliminary Proxy Statement




o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to §240.14a-12

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


(2)	Aggregate number of securities to which transaction applies:


SOLICITATION			1

OUTSTANDING STOCK AND VOTING RIGHTS			1
Voting by Proxy			1
Principal Shareowners			3
Security Ownership of Management			4

PROPOSAL 1 – ELECTION OF DIRECTORS			5
Board Recommendations			6
Independent and Non-Management Directors			7
Shareowner Communications Policy			9
Board and Committee Information			9
Corporate Governance			12
Audit Committee Report			12

PROPOSAL 2 – RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS			13
Relationship with Independent Auditors			13
Auditor Independence			14
Vote Required			14
Board Recommendation			14

EXECUTIVE COMPENSATION			15
Compensation Committee Report			15
Compensation Discussion and Analysis			15
Compensation Philosophy			15
Components of Compensation			16
Compensation Committee Interlocks and Insider Participation			18
Summary Compensation Table			18
Plan Based Compensation			19
Plan Based Awards in the Last Fiscal Year			19
Grants of Plan Based Awards			19
Outstanding Equity Awards at Fiscal Year End			20
Option Exercises and Stock Vested			20
Other Benefit Plans			21
Section 16(a) Beneficial Ownership Reporting Compliance			23
Director Compensation			23

CERTAIN RELATIONSHIPS AND RELATED PERSONS TRANSACTIONS			24

SHAREOWNER PROPOSALS – 2008 ANNUAL MEETING			24


(1)	Amount Previously Paid:


(2)	Form, Schedule or Registration Statement No.:


(3)	Filing Party:


(4)	Date Filed: