Exhibit 10.1

                              RETIREMENT AGREEMENT
                                       AND
                                 GENERAL RELEASE


     This Retirement  Agreement and General Release (the "Agreement") is entered
into  between  Valpey-Fisher   Corporation  (including  its  subsidiaries,   the
"Company") and Michael J. Ferrantino, Sr. ("Employee") as follows:

     1.  Retirement.  At  the  close  of  business  on  October  31,  2009  (the
"Retirement  Date"),  Employee has retired and  Employee's  employment  with the
Company has  terminated.  Effective on the  Retirement  Date,  Employee  will no
longer  receive any  salary,  benefits  or other  compensation  from the Company
except  as set  forth  in this  Agreement.  Effective  on the  Retirement  Date,
Employee hereby resigns all offices and  directorships at the Company and/or any
other entity held as a result of Employee's employment with the Company. Subject
to required withholding of state, local and federal taxes, the Company agrees to
pay employee all salary  earned  through the  Retirement  Date and to compensate
Employee  for all accrued and unused  vacation pay through the  Retirement  Date
which  Employee  acknowledges  and agrees  equals 240 hours of accrued  vacation
time.

     2.   Retirement   Payment.   Subject  to  the   Employee's   execution  and
non-revocation  of this Agreement and in consideration  of Employee's  covenants
contained in Sections 5, 6, 7 and 8, the Company will pay Employee $265,225 (the
"Retirement Payment"), payable in a lump sum on November 9, 2009. The Retirement
Payment is subject to required  withholding  of state,  local and federal taxes.
Employee  acknowledges  and agrees  that the  Retirement  Payment  represents  a
consideration  to Employee over and above  anything else of value which Employee
already is entitled to receive from the Company.

<PAGE>

     3. Options.  A list of all outstanding  options to purchase Common Stock of
the Company granted to Employee  pursuant to the Company's Stock Option Plans is
attached  hereto as Schedule 1. All of such  outstanding  options are  Incentive
Stock Options and are vested.  In accordance  with the Company's  1992, 1999 and
2001 Stock  Option  Plans  pursuant  to which the options  were  granted and the
individual Stock Option Agreements with respect to the outstanding  options, all
such options shall be  exercisable  during the three months after the Retirement
Date to the  extent  Employee  was  entitled  to  exercise  such  options on the
Retirement Date.

     4. Prior Plans or Agreements.

        (a) The Company and Employee acknowledge and agree that any right to any
payment as provided in the letter to Employee from the Company  dated  September
10, 2002, as amended,  in  connection  with the sale of the Company on or before
December 31, 2010,  shall  terminate after  expiration of the Revocation  Period
provided in Section 7 and shall be of no force and effect.

        (b) Employee acknowledges that he is not entitled to any bonus award for
2009 pursuant to the terms of the 2009 Key Employee Bonus Plan.

        (c) The  Company's  matching  contribution  for  Employee's  2009 salary
earned  up to the  Retirement  Date  will be paid  pursuant  to the terms of the
Company's 401(k) Plan.

     5.  Confidential  Information.  Employee had access to, and  possession of,
confidential and proprietary information,  data, records, documents and physical
property  belonging to the Company.  On or before the Retirement Date,  Employee
agrees to return any and all Company records,  documents and physical  property.
Employee  further  agrees  not  to  disclose  any  confidential  or  proprietary
information, data, records or documents to any person or entity.

<PAGE>

     6. Non-disparagement.

        (a)  Employee  agrees  that he will not make,  whether  in oral,  print,
electronic or other form,  any statement  that is  disparaging,  derogatory,  or
untruthful in any material respect as to the Company, its products and services,
its past and present  officers,  directors,  employees or any other affiliate of
the Company or that could adversely  affect in any material  respect the conduct
of the business of the Company.

        (b) The Company  agrees  that it will use its best  efforts to cause its
directors and executive officers not make, whether in oral, print, electronic or
other form, any statement that is disparaging,  derogatory, or untruthful in any
material respect as to the Employee.

     7. General Release.

        (a) As a material inducement to the Company to enter into this Agreement
and other good and valuable consideration,  the receipt and sufficiency of which
is  hereby   acknowledged,   Employee,   on  behalf  of   himself,   his  heirs,
administrators,  representatives,  executors,  successors,  and assigns,  hereby
irrevocably and unconditionally  releases,  acquits,  and forever discharges the
Company and its predecessors, parents, subsidiaries,  affiliates, divisions, any
related  entity,  successors  and assigns,  and all of their  current and former
agents,  officers,  directors,   shareholders,   partners,  employees,  members,
trustees, fiduciaries, representatives, owners, attorneys and all persons acting
by, through,  under or in concert with any of them (collectively,  the "Released
Parties")  from any and all claims,  suits,  charges,  complaints,  liabilities,
obligations,  promises, agreements,  damages, causes of action, demands, losses,
debts,  attorneys' fees and expenses of any nature whatsoever,  known or unknown
("Claims")  which  Employee  has, had or claims to have had against any Released
Party up to and  including  the date  Employee  executes  this  Agreement.  This
General Release of Claims shall include, without limitation,  Claims relating to
Employee's employment and separation from employment with the Company, Claims of
discrimination  under the common law or any federal,  state or local  statute or
regulation (including, without limitation, the Civil Rights Act of 1964, the Age

<PAGE>

Discrimination  in Employment Act, and the Americans with  Disabilities  Act, as
amended),  Claims for wrongful discharge,  Claims for the payment of any salary,
wages, bonuses, commissions,  vacation pay, severance pay or benefits, Claims of
detrimental reliance, and all other statutory, common law or other Claims of any
nature whatsoever,  to the fullest extent permitted by law. This General Release
of Claims does not apply to any claims  concerning  a breach of this  Agreement,
claims for any vested benefits under employee benefit plans of the Company,  any
rights  to  benefits  under  applicable   workers'   compensation   statutes  or
government-provided  unemployment  benefits,  claims  that cannot be waived as a
matter of law,  or any claims  arising  after the date  Employee  executes  this
Agreement.

        (b)  Employee  acknowledges  that the Company  has  advised  Employee to
consult with an attorney before executing this Agreement. In any event, Employee
should  thoroughly  review and understand  the effect of this  Agreement  before
taking action upon it. Employee acknowledges that in signing this Agreement, all
claims  covered by this  Agreement  that the  Employee has or may have up to the
date of his  execution  of this  Agreement  are  released to the fullest  extent
permitted by law.

        (c) Employee shall have  twenty-one  (21) days from the date he receives
this Agreement to complete his review and sign it. Employee will also have seven
(7) days following his execution of this Agreement to revoke it (the "Revocation
Period"). If Employee wishes to revoke his acceptance of this Agreement, he must
submit  his  revocation  in  writing at the  Company's  headquarters  within the
Revocation  Period.  The terms of this Agreement  shall not become  effective or
enforceable until after the expiration of the Revocation Period.


<PAGE>

     8. Non-Compete, Non-Solicitation.

        (a) In  consideration  of the Retirement  Payment to be paid to Employee
pursuant to this Agreement,  Employee agrees that,  during the period commencing
on the  Retirement  Date and ending on the first  anniversary  of the Retirement
Date (the  "Noncompete  Period"),  Employee shall not directly or indirectly own
any interest in,  manage,  control,  participate  in,  consult  with,  or render
services as an employee or  otherwise  for any person or entity that (i) engages
in any activity  competitive with the business being conducted by the Company as
of the Retirement  Date, (ii)  manufactures,  distributes,  markets or sells any
products  that are  being  manufactured,  distributed,  marketed  or sold by the
Company as of the  Retirement  Date,  (iii)  solicit  orders  from or seek to do
business with any customer of the Company in any manner that is competitive with
the business being  conducted by the Company as of the Retirement  Date, or (iv)
engage in any other  business in which the  Employee  knows or has a  reasonable
basis for  believing  the Company is planning to operate,  as of the  Retirement
Date.  Nothing herein shall prohibit  Employee from being a passive owner of not
more than 1% of the  outstanding  stock of any class of a  corporation  which is
publicly traded, so long as Employee has no active participation in the business
of such corporation.

        (b) During the period  commencing on the  Retirement  Date and ending on
April 30, 2011,  Employee  shall not  directly,  or indirectly  through  another
entity, (i) induce or attempt to induce any employee of the Company to leave the
employ of the Company, or in any way interfere with the relationship between the
Company and any  employee  thereof,  (ii) hire any person who was an employee of
the Company  during the  preceding  eighteen  (18)  months,  or (iii)  induce or
attempt to induce any  customer,  supplier,  licensee,  licensor,  franchisee or
other business relation of the Company to cease doing business with the Company,
or in any way  interfere  with  the  relationship  between  any  such  customer,
supplier, licensee, licensor, franchisee or business relation and the Company.

<PAGE>

     9. Enforcement.  If, at the time of enforcement of this Agreement,  a court
holds that the restrictions  stated herein are unreasonable under  circumstances
then  existing,  the  parties  hereto  agree that the maximum  period,  scope or
geographical area reasonable under such  circumstances  shall be substituted for
the stated period,  scope or area.  Because  Employee has access to confidential
information,  the  parties  hereto  agree  that  money  damages  would not be an
adequate  remedy for any  breach of this  Agreement.  Therefore,  in the event a
breach or threatened breach of this Agreement,  the Company or its successors or
assigns may, in addition to other  rights and remedies  existing in their favor,
apply to any court of competent  jurisdiction  for specific  performance  and/or
injunctive or other relief in order to enforce,  or prevent any  violations  of,
the provisions  hereof (without posting a bond or other security).  In addition,
in the event of an alleged  breach or  violation  by  Employee of Section 8, the
Noncompete  Period  pursuant to Section 8(a) and/or the  nonsolicitation  period
pursuant to Section  8(b), as the case may be, shall be tolled until such breach
or  violation  has been duly  cured.  In the event of a breach or  violation  by
Employee of Sections 5, 6, 7 or 8 of this  Agreement,  Employee  shall repay the
Retirement  Payment  to the  Company.  Employee  agrees  that  the  restrictions
contained in Section 8 are reasonable.

     10.  Cooperation.  Employee  agrees to cooperate with the Company after the
Retirement Date and to make himself reasonably available and to answer questions
and  furnish  information  requested  by  officers,  directors  or agents of the
Company relating to the business or customers of the Company.

<PAGE>

     11. Miscellaneous.

        (a) Entire Agreement.  This Agreement constitutes the full understanding
and entire  agreement  between Employee and the Company and supersedes any other
agreements of any kind,  whether oral or written,  formal or informal;  provided
however,  that  Employee  shall remain bound by any  continuing  obligations  to
preserve the Company's trade secrets,  intellectual  property,  and confidential
information.   Employee   represents  and  acknowledges  that  in  signing  this
Agreement,  Employee has not relied upon any representation or statement not set
forth in this Agreement.

        (b)  Amendment.  This  Agreement  may be amended or  modified  only by a
written instrument signed by the parties.

        (c) Waiver. The parties agree that the failure of a party at any time to
require  performance  of any  provision  of this  Agreement  shall  not  affect,
diminish,  obviate  or void in any way the  party's  full  right or  ability  to
require  performance of the same or any other provision of this Agreement at any
time thereafter.

        (d) Successor and Assigns.  This Agreement shall inure to the benefit of
and shall be binding upon Employee, his heirs, administrators,  representatives,
executors,  successors  and assigns and upon the  successors  and assigns of the
Company.

        (e) Governing Law. This Agreement  shall be construed in accordance with
and governed by the laws of the Commonwealth of Massachusetts  without regard to
the conflict of law principles thereof.

        (f) Severability. This Agreement is intended to be severable. Should any
portion,  term or provision of this  Agreement be declared or  determined by any
court to be illegal,  invalid or  unenforceable,  the validity of the  remaining
portions,  terms and provisions,  and the  application of such portion,  term or
provision  in  circumstances  other  than  those as to  which it is so  declared
illegal  or  unenforceable,  shall not be  affected  thereby,  and the  illegal,
invalid  or  unenforceable  portion,  term  or  provision  shall  be  valid  and
enforceable to the fullest extent permitted by applicable law.

     IN WITNESS WHEREOF,  the parties have executed this Agreement as of the day
and year first above written.

VALPEY-FISHER CORPORATION


By: /s/  Theodore S. Valpey, Jr.                Date: 9/3/09
    ----------------------------                      ------
Name:  Theodore S. Valpey, Jr.
Title: Chairman


/s/ Michael J. Ferrantino, Sr.                  Date: 9/3/09
------------------------------                        ------
Michael J. Ferrantino, Sr.

<PAGE>

                              RETIREMENT AGREEMENT
                                      AND
                                GENERAL RELEASE

Schedule 1
<TABLE>
<CAPTION>
<S>     <C>                     <C>                                     <C>
Outstanding Options to Purchase Common Stock                    Option Exercise Price Per Share
--------------------------------------------                    -------------------------------

        1992 Stock Option Plan  249,560                                 $ 1.36
        1999 Stock Option Plan   94,124                                 $ 1.36
        2001 Stock Option Plan   39,161                                 $ 1.36
                                -------
               Total            382,845
</TABLE>