Sparton Corporation
425 North Martingale Road
Suite 1000
Schaumburg, Illinois 60173
800.772.7866
www.sparton.com
sparton201710kschneid_image1.jpg [sparton201710kschneid_image1.jpg]

EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is effective as of the first day of employment which will be
agreed upon by both parties (“the Effective Date”), and is made between SPARTON
CORPORATION, an Ohio corporation, whose headquarters are located at 425 N.
Martingale Road, Suite 1000, Schaumburg, IL 60173 (“Corporation”) and Joseph
Schneider (“Executive”).
ARTICLE I
EMPLOYMENT AND DUTIES
1.1    Corporation agrees to employ Executive as Senior Vice President, Sales &
Marketing, and Executive agrees to such employment, all in accordance with the
express terms, conditions, duties and obligations set forth in this Agreement.
1.2    Executive will be based at Corporation’s headquarters located in
Schaumburg, IL, although travel may be required during the course of performing
assigned job duties. However, both parties agree that Executive’s main place of
employment will be the headquarters in Schaumburg, IL.
1.3    Executive will, during the term of this Agreement:
(a)
Report directly to the President/CEO or their designee, will perform such duties
as normally pertain to the position of Senior Vice President, Sales & Marketing,
and will perform such other duties or leadership responsibilities as may be
designated, from time to time, by President/CEO or their designee.

(b)
Devote the whole of Executive’s working time, attention and ability to the
performance of Executive’s employment duties and responsibilities, and truly and
faithfully serve the best interests of Corporation at all times.

1.4    Executive agrees to comply with all applicable laws, exercise the utmost
degree of integrity, honesty, fidelity and good faith, and perform Executive’s
duties with the utmost degree of expertise, care and ability that may be
expected of a person having the education, training and experience equivalent to
the education, training and experience of Executive.
ARTICLE II    
TERM
2.1    Corporation will employ Executive on an at will basis, with no set term.
Either party may terminate the employment relationship at any time, and for any
reason or no reason.
ARTICLE III    
COMPENSATION
3.1    Corporation will pay Executive a base salary of Two Hundred Sixty Five
Thousand Dollars ($265,000) per year (“Base Salary”) subject to all applicable
statutory withholding of which will be paid in accordance with Corporation’s
regular payroll periods.
3.2    In addition to the Base Salary, Executive will be eligible for:
(a)
An annual performance bonus based upon Corporation’s Short Term Incentive Plan
(STIP) program provided certain target objectives, which will be established by
the President/CEO, have been attained. Executive will have a performance bonus
target of forty-five percent (45%) of Base Salary with threshold and maximum
targets established within the STIP. The bonus will be paid after a
determination has been made regarding whether the required objectives were met,
but in any event not later than ninety (90) days after the end of the particular
fiscal year for which the bonus is being paid. No bonus will be due or payable
to Executive if Executive is not continuously employed by Corporation through
and on the payment date of the bonus.

(b)
Participation in Corporation’s annual Long Term Incentive Plan (LTIP) with an
annual grant award target of One Hundred Fifty Thousand Dollars ($150,000). This
grant award will be subject to the terms and conditions contained in
Corporation’s standard Award Agreement and the Amended and Restated Sparton
Corporation Stock Incentive Plan. The grant of equity is expressly conditioned
upon Executive’s execution of the Award Agreement.

3.3    Executive’s compensation under Article 3.1 and 3.2 will be subject to
annual review by the President/CEO or their designee.
ARTICLE IV    
BENEFITS
4.1    Executive will receive or participate in all employee benefits offered to
the salaried employees of Corporation for which Executive qualifies, under the
same terms and subject to the same conditions as are then in effect for other
salaried employees, and as such benefits may exist from time to time during the
period of Executive’s employment, including, without limitation, Corporation’s
medical, dental, vision, life/AD&D, disability plans, employee assistant
programs, 401K plan, and any applicable incentive programs.
4.2    The Executive will also be eligible to participate in the Corporation’s
executive Non-Qualified Deferred Compensation Plan (NQDC).
ARTICLE V    
PAID TIME OFF
5.1    During Executive’s employment, Executive will receive paid time off (PTO)
in the amounts and under the terms and conditions set forth in Corporation’s PTO
policy. Any accrued but unused PTO remaining at the end of each calendar year
will also be subject to the terms and conditions of Corporation’s PTO policy.
ARTICLE VI    
TERMINATION
6.1    Unless otherwise consented to by Corporation in writing, Executive will
be entitled, upon thirty (30) days written notice to Corporation, to terminate
Executive’s employment with Corporation for any reason or for no reason, and in
the event of such termination, Corporation will only be required to pay
Executive, on a pro-rata basis, Executive’s Base Salary which has accrued up to
the date of termination.
6.2    Corporation may terminate Executive’s employment at any time with or
without “Cause.” For the purposes of this Agreement, “Cause” will mean any of
the following: Executive’s personal dishonesty; gross negligence; violation of
any law, rule or regulation; breach of applicable confidentiality,
nonsolicitation or noncompetition provisions to which Executive is subject,
including such provisions under this Agreement; a breach of any material
provision of Corporation’s Code of Business Conduct and Ethics or other policies
and procedures; use of alcohol or drugs to the extent such use adversely affects
Executive’s ability to perform Executive’s duties or adversely affects the
business reputation of Executive or Corporation; use of illegal drugs; or
failure or refusal to substantially perform Executive’s duties and
responsibilities to Corporation as reasonably determined from time to time by
the President/CEO or their designee.
6.3    In the event of the death or disability of Executive, Corporation will be
entitled to terminate Executive’s employment. Upon such termination, Corporation
will pay to Executive, or in the event termination is due to death, to
Executive’s legal personal representative, that portion of Executive’s Base
Salary owed up to and including the date of termination. This payment will be
made within thirty (30) days following termination of employment. Except for the
obligation(s) to Executive from any applicable benefit plan, following such
payment, Corporation will have no further obligation to Executive or Executive’s
heirs and beneficiaries, under this Agreement.
6.4    If Corporation terminates Executive’s employment for any reason other
than “Cause” (as defined above), death, or disability, Corporation will provide
Executive with the following Separation Benefits:
(a)
A one-time, severance payment equal to nine (9) months of current Base Salary
that will be made as a part of Corporation’s standard payroll over the nine (9)
month period. If, however, Executive is involuntarily terminated within twelve
(12) months of a “Change in Control,” the severance payment will instead equal
one hundred forty five percent (145%) of the greater of Executive’s Base Salary
at the time of the Change in Control or at the time Executive’s employment
terminates, and it will be made as a part of Corporation’s standard payroll over
a twelve (12) month period. Either severance payment will commence on the first
pay period after the expiration of any applicable revocation period following
Executive’s date of termination, will be paid in equal installments over the
applicable nine (9) or twelve (12) month period, and will be subject to standard
payroll deductions and all other legal requirements.

(b)
Payment of nine (9) months of COBRA premiums or, in the event of an involuntary
termination within twelve (12) months of a Change in Control, twelve (12) months
of COBRA premiums for medical insurance for Executive and/or Executive’s
dependents if, and only if, Executive timely elects coverage for COBRA
continuation.

(c)
Payment of outplacement services in an amount not to exceed twenty-five thousand
dollars ($25,000).

(d)
Executive agrees that in order to receive the Separation Benefits, Executive
must execute a separation agreement and general waiver and release of claims in
a form satisfactory to Corporation and return to Corporation any property
belonging to Corporation which is in Executive’s possession or control. If
Executive fails to return the Release to Corporation in sufficient time so that
it becomes irrevocable after the date of termination as provided under
applicable law or the separation agreement and general waiver and release of
claims, Executive will forfeit Executive’s right to the Separation Benefits.
Executive further agrees that if Executive violates Article VII, Corporation may
terminate the Separation Benefits and Executive will repay any severance payment
he has received in excess of one (1) month.

(e)
For purpose of this Article, the term “Change in Control” means: (i) any one
person, or more than one person acting as a group, acquires ownership of stock
of Corporation that, together with stock held by such person or group,
constitutes more than fifty percent (50%) of the total fair market value or
total voting power of the stock of Corporation; (ii) any one person, or more
than one person acting as a group, acquires (or has acquired during any twelve
(12) month period) ownership of stock of Corporation possessing thirty percent
(30%) or more of the total voting power of the stock of Corporation; (iii) a
majority of the members of the Board of Directors is replaced during any twelve
(12) month period by directors whose appointment is not endorsed by a majority
of the members of the Board of Directors before the date of appointment or
election; or (iv) any one person, or more than one person acting as a group,
acquires (or has acquired during any twelve (12) month period) assets from
Corporation that have a total gross fair market value equal to or more than
forty percent (40%) of the total gross fair market value of all of the assets of
Corporation immediately before such acquisition or acquisitions.

6.5    Upon termination of employment for whatever reason, Executive will
immediately deliver to Corporation all property of Corporation which Executive
has in Executive’s possession or under Executive’s control.
ARTICLE VII    
CONFIDENTIALITY AND COVENANT-NOT-TO-COMPETE
7.1    Executive will execute the confidentiality agreement(s) and any such
other agreements as are normally required to be executed by other Corporation
salaried employees. During and after Executive’s employment, Executive will
comply with said agreements and keep confidential all confidential information
pertaining to Corporation which Executive learned while employed by Corporation,
as such confidential information is defined in the applicable confidentiality
agreement(s). The promises, rights and obligations stated in Article VII will
survive the termination of Executive’s employment.
7.2    Unless approved in advance in writing by Corporation’s Senior Vice
President of Human Resources, the Executive will not, directly or indirectly,
within the territory comprising the United States and Canada, for a period of
twelve (12) months following the date of termination of his employment for
whatever reason, either individually or in partnership or jointly in conjunction
with any person or persons, firm, association, joint venture, syndicate, company
or corporation as principal, agent, shareholder, employee, or consultant, engage
in any business activity that directly involves any product or service similar
to or competitive with any product or service of Corporation (including
subsidiaries) without advance written approval of Corporation’s Senior Vice
President of Human Resources, or:
(a)
induce or attempt to influence or induce any of the employees of Corporation
(including its subsidiaries) to leave their employment;

(b)
hire, employ or utilize the services of any employee of Corporation (including
its subsidiaries); or

(c)
contact any Corporation customer (or prospective customers that Corporation is
actively soliciting) for the purposes of: (i) inducing them to terminate their
business relationship with Corporation, (ii) discouraging them from doing
business with Corporation, or (iii) offering products or services that are
similar to or competitive with those of Corporation. “Contact” with any customer
includes responding to contact initiated by the customer.

7.3    The parties agree that this Article’s terms are reasonable and that
Executive has received adequate consideration for the covenants and obligations
undertaken by Executive under this Article. Executive also agrees that this
Article is reasonably necessary for the protection of Corporation’s confidential
information as defined in the applicable confidentiality agreement(s). Executive
acknowledges that a breach or threatened breach by Executive of the provisions
of this Article may result in Corporation suffering irreparable harm which
cannot be calculated or fully or adequately compensated by recovery of damages
alone. Accordingly, Executive agrees that Corporation will be entitled to
interim or permanent injunctive relief without having to prove damages or post a
bond or other security, specific performance and other equitable remedies, in
addition to any other relief to which Corporation may become entitled, in the
event of any such breach. Additionally, if Executive violates this Article, in
addition to all other remedies available to Corporation at law, in equity, and
under contract, Executive agrees that Executive is obligated to pay all
Corporation’s costs of enforcement of this Article, including attorneys’ fees
and expenses.
ARTICLE VIII    
NOTICE
8.1    The parties agree that any notice required under this Agreement will be
in writing and may be delivered personally or sent by facsimile transmission or
other means of recorded electronic communications or sent by registered mail to
the parties at the following addresses:
To Corporation:

Sparton Corporation
425 N. Martingale Road
Suite 1000
Schaumburg, IL 60173

Attention:     Larry Brand
Senior Vice President, Human Resources

To Executive:

Joseph Schneider
741 Saddle Ridge
Crystal Lake, IL 60012

Any notice given will be deemed to have been given and received on the business
day on which it was so delivered, and if not a business day, then on the
business day next following the day of delivery, and, if sent by electronic
communications or facsimile will be deemed to have been received on the next
business day following the date of transmission and if mailed, will be deemed to
have been given and received on the fifth day following the day on which it was
so mailed.
8.2    Either party may change their address for notice in the above manner.
ARTICLE IX    
GENERAL
9.1    Time will be of the essence in the performance of this Agreement.
9.2    This Agreement constitutes the entire agreement between the parties with
respect to the matters contained in this Agreement and supersedes and replaces
any previous agreements, contracts, oral understandings or discussions. This
Agreement may not be amended or modified in any respect except by written
instrument signed by the parties.
9.3    This Agreement will be construed and enforced in accordance with the laws
of the State of Illinois, without regard to choice of law or conflicts of laws
principles.
9.4    The language of this Agreement reflects the mutual intent of the parties
and will not be strictly construed against either party; therefore no rule of
strict construction will apply in construing the terms of this Agreement.
9.5    This Agreement will be for the benefit of and will be binding upon
Corporation, its successors and assigns and, at the discretion of Corporation,
upon any person, firm or corporation with which Corporation may be merged or
consolidated or which may acquire all or substantially all of Corporation’s
assets through sale, lease, liquidation or otherwise. The rights and benefits of
Executive are personal to Executive and no such rights or benefits will be
subject to assignment or transfer by Executive.
9.6    This Agreement will inure to the benefit of and be binding upon the
parties and their respective heirs, legal personal representatives, successors
and permitted assigns.
9.7    If for any reason, any provision or part of this Agreement will be held
to be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions or part provisions of this Agreement
will not in any way be affected or impaired thereby.
9.8    The waiver by either party of any breach of the provisions of this
Agreement will not operate or be construed as a waiver by that party of any
other breach of the same or any other provision of this Agreement.
9.9    Except as specifically altered in this Agreement, nothing in this
Agreement will detract from, alter, modify or amend any obligations or duties
owed by Executive to Corporation, pursuant to any statute, regulation, or at
common law or equity.
9.10    The parties intend this Agreement to comply with Code Section 409A and
the Treasury Regulations and other guidance issued under Section 409A. If a
provision of this Agreement is contrary to or fails to address the requirements
of Code Section 409A and related Treasury Regulations, this Agreement will be
construed, administered, and amended, to the maximum extent possible, as
necessary to comply with such requirements. Corporation does not represent,
warrant or guarantee that the payments and benefits that may be paid or provided
under this Agreement will not be includible in Executive’s federal gross income
under Code Section 409A, nor does Corporation make any representation, warranty
or guarantee to Executive as to the tax consequences.
9.11    This Agreement may be executed in any number of counter-parts, all of
which when taken together, will constitute one original Agreement.
IN WITNESS WHEREOF the parties acknowledge and agree that they have read and
understand the terms of this Agreement, and that they have executed this
Agreement of their own free act, on the dates set forth below, to be effective
as of the Effective Date set forth in this Agreement.
SPARTON CORPORATION:
                        
By:                                                                                                        
/s/ Larry Brand                
Larry Brand
Date: 9/23/15                Senior Vice President, Human Resources

EXECUTIVE:

/s/ Joseph Schneider        
Joseph Schneider    
Date: 9/23/15