Document:

EX-10.1

 Exhibit 10.1 

Sparton Corporation 
 425 North
Martingale Road 
 Suite 1000 

Schaumburg, Illinois 60173 

800.772.7866 
 www.sparton.com 

 
 

 
 EXECUTIVE EMPLOYMENT AGREEMENT 

THIS AGREEMENT will be 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, hereafter called “the Corporation,” as the employer, and Joseph McCormack, hereafter
called “the Executive,” as the employee. 
 WHEREAS: 
  

	 	(a)	The Corporation wishes to retain the services of the Executive in the capacity of Senior Vice President, Chief Financial Officer; and 

 

	 	(b)	The Executive wishes to be employed by the Corporation in that capacity; and 

  

	 	(c)	The parties desire to set forth the terms and conditions of the employment of the Executive by the Corporation in writing; 

NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 
 ARTICLE I  

EMPLOYMENT AND DUTIES 
 1.1
The Corporation hereby agrees to employ the Executive as Senior Vice President, Chief Financial Officer, and the Executive agrees to such employment, all in accordance with the express terms, conditions, duties and obligations set forth in this
Agreement. The parties agree that the relationship between the Corporation and the Executive created by this Agreement is that of employer and employee. 

1.2 The Executive will be based at the Corporation’s headquarters located in Schaumburg, IL although travel may be required during the course of
performing assigned job duties. However, it is agreed upon by both parties that the Executive’s main place of employment will be the headquarters in Schaumburg, IL. 

1.3 The Executive will, during the term of this Agreement: 
  

	 	(a)	 Perform all duties and responsibilities assigned to him as Senior Vice President, Chief Financial, and will report directly to the President/CEO or
their designee. 

 

 
  

	 	The Executive also will be required to perform such other related duties and responsibilities as may be assigned to the Executive by the President/CEO or their designee, from time to time, which related duties and
responsibilities will be in keeping with the general nature of the duties of Senior Vice President, Chief Financial Officer or other leadership responsibilities as assigned. 

 

	 	(b)	Devote the whole of his working time, attention and ability to the performance of his employment duties and responsibilities as set out herein, and truly and faithfully serve the best interests of the Corporation at all
times. Executive’s duties may include providing services for both the Corporation and its affiliates. 

  

	 	(c)	The Executive understands and agrees that his duties will include his providing personal services to customers of the Corporation and the affiliates. The Executive understands and agrees that, as a condition of
performing services for such customers, it may be necessary to agree to reasonable restrictions imposed for the protection of the customer (including, without limitation, confidentiality restrictions), and agrees to abide by such reasonable
restrictions. 

  

	 	(d)	The Executive acknowledges and agrees that he owes a duty of loyalty, fidelity, and allegiance under the laws of Ohio and applicable federal law to act at all times in the best interests of the Corporation. In keeping
with these duties, the Executive shall make full disclosure to the Corporation of all business opportunities pertaining to the Corporation’s business and shall not appropriate for the Executive’s own benefit any such opportunities.

 1.4 The Executive agrees to comply with all applicable laws and the Corporation’s written policies or rules, exercise the
utmost degree of integrity, honesty, fidelity and good faith, and perform his 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 the Executive. 
 ARTICLE II 

TERM 
 2.1 The
Executive’s employment will be “at will” employment, with no set term. The employment relationship may be terminated by either the Executive or the Corporation at any time, for any reason or for no reason, as is further set forth
herein. 
 ARTICLE III  

COMPENSATION 
 3.1 The
Executive will be paid a base salary of Three Hundred Thirty Five Thousand ($335,000) Dollars per year, (the “Base Salary”) subject to all applicable statutory withholding of which will be paid in accordance with the Corporation’s
regular payroll periods. The compensation payable to the Executive as contemplated by this Agreement will be subject to annual review by the President/CEO, or their designee. 

  
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 3.2 In addition to the Base Salary provided
for in Article 3.1 above, the Executive will be eligible for: 
  

	 	(a)	An annual performance bonus based upon the Corporation’s Short Term Incentive Plan (STIP) program provided certain target objectives, which will be established by the President/CEO, or their designee, have been
attained. The Executive will have a performance bonus target of forty five (45%) percent 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 he is not continuously employed by
the Corporation through and on the payment date of the bonus. 

  

	 	(b)	Participation in the Corporation’s annual Long Term Incentive Plan (LTIP) with an annual grant award target of Four Hundred Thousand Dollars ($400,000). This grant award shall be subject to the terms and conditions
contained in the Corporation’s standard Award Agreement and the Amended and Restated Sparton Corporation Stock Incentive Plan. The grant of equity is expressly conditioned upon the Executive’s execution of the Award Agreement.

 3.3 The Corporation agrees before, during and after the Agreement Term to indemnify and hold harmless Executive (and advance him
expenses) to the fullest extent permitted by the Corporation’s articles of incorporation and/or code of regulations (by-laws), or if greater, in accordance with applicable law for actions or inactions of the Executive as an officer, director,
employee or agent of the Corporation or any affiliate or as a fiduciary of any benefit plan of any of the foregoing or as otherwise set forth in the applicable document. Notwithstanding the foregoing, however, the Corporation’s obligation to
defend, indemnify and hold harmless contained in this Section 3.3 shall not apply to claims between the Corporation and the Executive (including the Executive’s heirs, estate, executors and administrators) including, without limitation,
disputes arising out of Article VII Confidentiality and Covenant-Not-To-Compete. The Corporation also agrees to provide the Executive with directors’ and officers’ liability insurance coverage both during and, with regard to matters
occurring during, employment or while serving as a director of the Corporation or any affiliate, which coverage will be at a level at least equal to the level being maintained at such time for the then current officers and directors and shall
continue until such time as suits can no longer be brought against the Executive as a matter of law; provided, however, that the Corporation shall not be required to maintain such insurance coverage unless the Board determines that it is obtainable
at reasonable cost. Further, the Corporation and Executive shall execute and be subject to the Corporation’s standard Director and Officer Indemnification Agreement. 

3.4 The provisions of this Agreement relating to compensation will be subject to the recovery policies established by the Board, consistent with and
pursuant to applicable 

  
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 federal law, the rules of the Securities and Exchange
Commission (“SEC”) and any stock exchange on which stock of the of the Corporation is traded, and the requirements of section 954 of the Dodd–Frank Wall Street Reform and Consumer Protection Act and final rules issued by the SEC
thereunder (or implementing such provisions). 
 ARTICLE IV  

BENEFITS 
 4.1 The Executive
will be entitled to receive or to participate in all employee benefits offered to the salaried employees of the Corporation for which he 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 his employment, including, without limitation, the 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) which will be introduced to him through a customized one-on-one orientation meeting within his first 30 days of employment. 

4.3 The Executive shall be reimbursed for all travel, meals, entertainment and other out-of-pocket expenses reasonably incurred by him on behalf of or
in connection with performance of his duties and the business of the Corporation or any subsidiary, pursuant to the reasonable standards and guidelines established from time to time by the Corporation, provided that an expense reimbursement shall
under no circumstances occur if the Executive submits the request for reimbursement later than ninety days after the date on which he incurred the expense. The Corporation, in its sole discretion, shall determine whether business expenses were
reasonably incurred. Reimbursement shall be made within ninety days after request for reimbursement is submitted in accordance with the Corporation’s policy. No expense reimbursement during one taxable year shall affect the expenses that are
eligible for reimbursement in another taxable year, no expense reimbursement shall be exchangeable for another benefit, and no expense shall be reimbursed later than the end of the taxable year following the taxable year in which the expense was
incurred. 
 ARTICLE V  

PAID TIME OFF 
 5.1 The
Executive is eligible for nineteen (19) days of Paid Time Off (PTO) annually, which may be increased from time to time, provided that such PTO will be subject to the Corporation’s PTO policy. 

  
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 ARTICLE VI  

TERMINATION 
 6.1.1 Either
the Executive or the Corporation will be entitled, upon written notice to the other party, to terminate this Agreement at any time, for any reason or for no reason, as the Executive’s employment is “at will.” 

The Executive’s employment with the Corporation also may be terminated by the Corporation at any time for “Cause.” For the purposes of this
Agreement, “Cause” will mean any of the following: (a) Executive’s personal dishonesty; (b) gross negligence; (c) violation of any law, rule or regulation; (c) breach of applicable confidentiality, nonsolicitation
or noncompetition provisions to which he is subject, including such provisions under this Agreement; (d) a breach of any material provision of the Corporation’s Code of Business Conduct and Ethics or other policies and procedures;
(e) use of alcohol or drugs to the extent such use adversely affects the Executive’s ability to perform his duties or adversely affects the business reputation of the Executive or the Corporation; (f) use of illegal drugs; or
(g) failure or refusal to substantially perform Executive’s duties and responsibilities to the Corporation as reasonably determined from time to time by the President/CEO or their designee. 

For any termination pursuant to subsections (d) or (g) above, the Corporation shall first give written notice of the breach to the Executive, and if
the breach is susceptible to a cure, the Corporation shall give the Executive a reasonable opportunity to promptly (within 30 days) cure the breach. 
 The
Executive may also terminate his employment with Corporation for “Good Reason.” “Good Reason” means either of the following: (a) a material adverse change in Executive’s title, duties or responsibilities, including
reporting responsibilities, other than temporarily while disabled or otherwise incapacitated; or (b) a material breach of the Agreement. Good Reason will not exist unless and until (i) Executive provides Corporation with written notice of
the acts alleged to constitute good reason no more than ninety (90) days after the initial existence of such acts, and (ii) Corporation fails to cure such acts within thirty (30) days of receipt of such notice. If Corporation fails to
cure, Executive must terminate his employment within thirty (30) days following the expiration of such cure period for the termination to be for Good Reason. 

6.1.2 In the event of the death or Disability of the Executive, the Corporation will be entitled to terminate Executive’s employment. Disability
shall be defined as the inability of the Executive to effectively perform his duties due to physical or mental illness or injury, in the sole judgment of the Corporation, for a total of ninety (90) days out of any one hundred eighty
(180) day period. Upon such termination, the Corporation will pay to the Executive, or in the event termination is due to death, to his legal personal representative, that portion of the Executive’s Base Salary owed up to and including the
date of termination. This payment will be made within thirty days following termination of employment. Except for the obligation(s) to Executive from any applicable benefit plan, following such payment, the Corporation will have no further
obligation to the Executive or his heirs and beneficiaries, under this Agreement. 

  
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 6.2 If the Corporation terminates the
Executive’s employment for any reason other than “Cause” (as defined above), death, or disability, or if the Executive terminates his employment for “Good Reason” (as defined above), the Corporation will provide Executive
with the following Separation Benefits: 
  

	 	(a)	A one-time, severance payment equal to nine (9) months of current Base Salary. 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. This severance payment will be made as a
part of Corporation’s standard payroll over the applicable nine (9) or twelve (12) month period and will be subject to standard payroll deductions and all other legal requirements. The Severance Payment will commence on the first pay
period after the expiration of any applicable revocation period following Executive’s date of termination. 

  

	 	(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 only, twelve (12) months of COBRA premiums for medical
insurance for Executive and/or his 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 the Corporation and he must return to
the Corporation any property belonging to the Corporation which is in the Executive’s possession or under his 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 his right to the Separation Benefits. Executive further agrees that in the event he violates Article VII, the
Corporation may terminate the Separation Benefits and Executive will repay any Separation Benefits in excess of one (1) month he has received. 

  

	 	(e)	 For purpose of Article VI, the term “Change in Control” means: (i) any one person, or more than one person acting as a group, acquires
ownership of stock of the Corporation that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market 

  
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	 	value or total voting power of the stock of the 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
the Corporation possessing thirty percent (30%) or more of the total voting power of the stock of the 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 the 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 the Corporation immediately before such
acquisition or acquisitions. 

  

	 	(f)	This Section 6.3 is intended to satisfy the requirements of the exemption from the application of Code Section 409A for separation pay plans under Treasury Regulation Section 1.409A-1(b)(9). To the extent
the aggregate payments due hereunder do not satisfy such exception or exceed two (2) times the lesser of (i) the Executive’s compensation for the Executive’s taxable year preceding the taxable year in which his Date of
Termination occurs, or (ii) the Code Section 401(a)(17) limit for the taxable year in which the Executive’s Date of Termination of employment, such excess payments shall be subject to the provisions of Article X. 

6.3 Unless otherwise consented to by the Corporation in writing, the Executive will be entitled, upon thirty (30) days written notice to
the Corporation, to terminate this Agreement and his employment with the Corporation for any reason or for no reason, and in the event of such termination the Corporation will only be required to pay the Executive, on a pro-rata basis, his Base
Salary which has accrued up to the date of termination.  
 6.4 Upon termination of this Agreement for whatever reason, the Executive will
immediately deliver to the Corporation, all property of the Corporation which the Executive has in his possession or under his control. 

ARTICLE VII  

CONFIDENTIALITY AND COVENANT-NOT-TO-COMPETE 

7.1 The 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 the period of his employment and thereafter, the Executive will abide by the terms of the said agreements and keep confidential all confidential information pertaining to the Corporation which the Executive
learned while employed by the 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 this Agreement. 

  
 7 

 

 
  
 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 eighteen (18) months following the date of termination of
his employment for whatever reason, either individually or in partnership or jointly or 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), or: 

 

	 	(a)	induce or attempt to influence or induce any of the employees of the Corporation (including its subsidiaries) to leave their employment; 

 

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

  

	 	(c)	contact any Corporation customer (or prospective customer 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 It is agreed between the parties that the terms of this Article are reasonable and that the Executive
has received adequate consideration for the covenants and obligations undertaken by him, as contained herein. Executive further agrees that this Article is reasonably necessary for the protection of the Corporation’s confidential information as
defined in the applicable confidentiality agreement(s). The Executive acknowledges that a breach or threatened breach by the Executive of the provisions of this Article may result in the Corporation suffering irreparable harm which cannot be
calculated or fully or adequately compensated by recovery of damages alone. Accordingly, the Executive agrees that the 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 the 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 the Corporation at law, in equity, and under contract, Executive agrees that he is obligated to pay all the Corporation’s costs of enforcement of this Article, including attorneys’ fees and expenses. 

ARTICLE VIII 

COOPERATION 
 8.1 Executive
agrees that after the termination of his employment, Executive may have to cooperate with Corporation with respect to matters of which Executive may have knowledge due to Executive’s employment, including but not limited to any transition of

  
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 Executive’s work responsibilities and any
defense of any claims, causes of action, or charges brought against Corporation. Executive agrees to cooperate fully with Corporation, including talking to and/or meeting with Corporation representatives, employees, agents and attorneys and
providing, if necessary, testimony in any forum. Corporation in turn agrees to provide reasonable notice to Executive should Executive’s cooperation in any matter be required. Executive agrees that any failure to provide such cooperation as may
be required shall be a breach of a material term of this Agreement. 
 ARTICLE IX 

NOTICE 
 9.1 Any notice
required to be given hereunder 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 hereto at the following addresses:

 To the Corporation: 

Sparton Corporation 

425 N. Martingale Road 

Suite 1000 

Schaumburg, IL 60173 
  

	 	Attention:	Larry Brand 

	 	        	Senior Vice President, Human Resources 

 To the Executive: 

Joseph McCormack 

4721 Grand Avenue 

Western Springs, IL 60558 

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. 
 9.2 Either party may change their address for notice in
the aforesaid manner. 

  
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 ARTICLE X 

CODE SECTION 409A 
 10.1 To
the extent a payment hereunder is, or shall become, subject to the application of Code Section 409A, the following shall apply: 
  

	 	(a)	The Corporation may delay payment hereunder only upon such events and conditions as the IRS may permit in generally applicable published regulatory or other guidance under Code Section 409A, including, without
limitation, payments that the Corporation reasonably anticipates will be subject to the application of Code Section 162(m), or will violate Federal securities laws or other applicable law; provided that any such delayed payment will be made at
the earliest date at which the Corporation reasonably anticipates that the making of the payment would not cause such a violation; 

  

	 	(b)	The time or schedule of payment hereunder may be accelerated only upon such events and conditions as the IRS may permit in generally applicable published regulatory or other guidance under Code Section 409A,
including, without limitation, payment to a person other than the Executive to the extent necessary to fulfill the terms of a domestic relations order (as defined in Code Section 414(p)(1)(B)) or payment of the amount required to be included in
income for the Executive as a result of failure of this Agreement at any time to meet the requirements of Code Section 409A with respect to the Executive; 

  

	 	(c)	If, as of the date Executive’s employment terminates, (1) any stock of the Corporation is publicly traded on an established securities market or otherwise; and (2) a payment is payable under this
Agreement due to a termination of employment which is considered to be a “separation from service” for purposes of the rules under Treasury Regulation Section 1.409A-3(i)(2) (payments to specified employees upon a separation from
service); and (3) the Executive is determined to be a “specified employee” (as determined under Treasury Regulation Section 1.409A-1(i)), then the payment shall be delayed until a date that is six (6) months after the date
Executive’s employment terminates to the extent necessary to comply with the requirements of Code Section 409A and related Treasury Regulations; provided, however, that the payments to which the Executive would have been entitled during
such six (6) month period, but for this Section 10.1(c), shall be accumulated and paid to the Executive on the first (1st) day of the seventh (7th) month following the date Executive’s employment terminates; and 

  

	 	(d)	This Agreement is intended to comply with the requirements of Code Section 409A and the Treasury Regulations and other guidance issued thereunder, as in effect from time to time. To the extent a provision of this
Agreement is contrary to or fails to address the requirements of Code Section 409A and related Treasury Regulations, this Agreement shall be construed and administered as necessary to comply with such requirements to the extent allowed under
applicable Treasury Regulations until this Agreement is appropriately amended to comply with such requirements. 

  
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 ARTICLE XI 

DISPUTES 
 11.1 In any action
or proceeding relating to this Agreement or otherwise arising out of or in connection with the Executive’s employment by the Corporation, the parties agree that they shall be resolved by a bench trial and not a jury trial, and the parties agree
that no damages other than compensatory damages shall be sought or claimed by either party and each party waives any right to a jury trial and any claim, right or entitlement to punitive, exemplary, statutory or consequential damages, or any other
damages. 
 ARTICLE XII 

GENERAL 
 12.1 Time will be
of the essence in the performance of this Agreement. 
 12.2 This Agreement constitutes the entire agreement between the parties hereto with respect
to the matters contained herein 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
hereto. 
 12.3 This Agreement will be construed and enforced in accordance with the laws of the Illinois, without regard to choice of law or
conflicts of laws principles, and the parties hereby irrevocably consent to the jurisdiction of the Courts of the County of Cook County, Illinois, or for those matters which would be properly brought in federal court, to the jurisdiction of the U.S.
District Court for the Northern District of Illinois. 
 12.4 This 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. 
 12.5
This Agreement will be for the benefit of and will be binding upon Corporation, its successors and assigns and, at the discretion of the 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 him and no such rights or benefits will be subject to assignment or transfer
by Executive. 
 12.6 This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective heirs, legal personal
representatives, successors and permitted assigns. 

  
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 12.7 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. 

12.8 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. 
 12.9 Except as specifically altered in this Agreement, nothing in this
Agreement will detract from, alter, modify or amend any obligations or duties owed by the Executive to the Corporation, pursuant to any statute, regulation, or at common law or equity. 

12.10 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 hereto 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 herein. 
  

			
		 	SPARTON CORPORATION:
		
		 	By:
		
		 	 /s/ Larry Brand

		 	Larry Brand
	Date:    9/4/15	 	Senior Vice President, Human Resources
		
		 	EXECUTIVE:
		
		 	 /s/ Joseph McCormack

		 	Joseph McCormack
	Date:    9/4/15	 	

  
 12ex-10.1

 STOCK PURCHASE AGREEMENT
 

 THIS STOCK PURCHASE AGREEMENT (the “Agreement”), dated as of August 31, 2015, is entered into by and among BLUE EARTH, INC. (the “Seller”), and G. Robert Powell, an individual with an address located at P.O. Box 1204, Lafayette, California 94549 (collectively, the “Purchaser”).
 

 W I T N E S S E T H:
 

 WHEREAS, the Purchaser wishes to purchase, upon the terms and subject to the conditions of this Agreement, Fifty Thousand (50,000) restricted shares of common stock of Blue Earth, Inc.
 

 NOW THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
 

 1.
 AGREEMENT TO PURCHASE; PURCHASE PRICE
 

 a.
 Purchase
 

 (i)
 The Purchaser hereby agrees to purchase, subject to the provisions of Section 1a(ii) herein, from the Seller 50,000 restricted shares of common stock of the Seller (the “Shares”) at $0.7567 USD per share (the “Purchase Price”) totaling $37,835 USD.
 

 (ii)
 Subject to the terms and conditions of this Agreement, the Purchaser shall purchase the Shares (the Seller is obligated to sell the Shares to the Purchaser) upon the Purchaser’s payment of the purchase price by personal check, subject to collection; provided, non-payment of the check in due course shall give the Seller to cancel this Agreement in all respects.
 

 (iii)
 Upon receipt of the Purchase Price, the Seller shall issue a certificate evidencing the ownership of the Shares by the Purchaser.    
 

 2.
 PURCHASER’S REPRESENTATIONS, WARRANTIES, ETC.  The Purchaser represents and warrants to, and covenants and agrees with, the Seller as follows:
 

 a.
 The Purchaser is purchasing the Shares for his own account for investment only and not with a view towards the public sale or distribution thereof and not with a view to or for sale in connection with any distribution thereof.
 

 b.
 The Purchaser is (i) an “accredited investor” as that term is defined in Rule 501 of the General Rules and Regulations under the Securities Act of 1933, as amended (the “Securities Act”) by reason of Rule 501(a)(3) and (6), (ii) experienced in making investments of the kind described in this Agreement and the related documents, (iii) able, by reason of business and financial, to protect its own interests in connection with the transactions described in this Agreement, and the related documents, and (iv) able to afford the entire loss of its investment in the Shares.
 

 
 

 c.
 The Purchaser understands that its investment in the Shares involves a high degree of risk.
 

 d.
 The Purchaser has had access to review all of the Seller’s periodic filings  (the “SEC Filings”) with the Securities and Exchange Commission (the “Commission”) and an opportunity to ask questions of the officers and directors of the Seller.  The Purchaser is fully familiar with the financial and business affairs of the Seller.  Notwithstanding the foregoing, the Purchaser has had the opportunity to conduct its own independent investigation of the Seller and to make inquiries about the terms and conditions of this Agreement, to discuss the same and all related matters with its own independent counsel and its own accountants and tax advisers.
 

 e.
 The Purchaser is not a party to or affected by any pending litigation, arbitration or governmental proceeding or investigation that would in any manner affect its entering into this Agreement or performing under this Agreement.
 

 f.
 The Purchaser has full right, power and capacity to execute, deliver and perform its obligations under this Agreement.
 

 g.
 No governmental license, permit or authorization and no registration or filing with any court, governmental authority or regulatory agency is required in connection with the Purchaser’s execution, delivery or performance of this Agreement.
 

 h.
 Restricted Securities.  Purchaser understands that the Shares are characterized as “restricted securities” under applicable U.S. federal and state securities laws inasmuch as they are being acquired from Seller in a transaction not involving any public offering and that, pursuant to these laws and applicable regulations, Purchaser must hold the Shares indefinitely unless they are registered with the Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Shares, and on requirements relating to Seller which are outside of Purchaser’s control and which Seller is under no obligation and may not be able to satisfy.  In this connection, Purchaser represents that it is familiar with SEC Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act. 
 

 i.
 Legends.  Purchaser understands that the Shares, and any securities issued in respect thereof or exchange thereof, may bear one or all of the legends.  
 

 (a)
 “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE NOT BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  THESE SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE SATE SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.”
 

 2
 

 
 

 3.
 SELLER’S REPRESENTATIONS, ETC.  The Seller represents and warrants to the Purchaser that:
 

 a.
 Authority.  The Seller has the capacity and authority to execute and deliver this Agreement, to perform hereunder, and to consummate the transactions contemplated hereby without the necessity of any act or consent of any other person, entity or governmental authority.
 

 b.
 Title.  The Seller has good and marketable title to all of the Shares, free and clear of any liens, claims, charges, options, rights of tenants, mortgages, security interests, pledges, charges, encumbrances and claims and liabilities of every kind, and shall not, until the Purchase Price is paid or this Agreement is terminated, sell, hypothecate, encumber, transfer or otherwise dispose of the Shares.
 

 c.
 Full Disclosure.  There is no fact actually known to the Seller that would reasonably be expected to materially and adversely affect the ability of the Seller to perform its obligations pursuant to this Agreement.
 

 d.
 Proceedings.  Except as set forth in the SEC Filings and described on Schedule 3d hereto, the Seller is not a party to any pending litigation, arbitration or administrative proceeding, or to the best of Seller’s knowledge, to any investigation and no such litigation, arbitration or administrative proceeding or investigation that might result in any material adverse change in the financial or business condition of the Seller.
 

 e.
 Default.  The execution, delivery and performance of this Agreement and the completion of the transactions contemplated hereby will not result in the breach of any term or provision of the Certificate of Designation or by-laws of the Seller, or violate any provision of or result in the breach of, modification of, cancellation, or the maturity of obligations under, or constitutes a default, or give use to any right of termination, cancellation, or otherwise be in conflict with or result in a loss of contractual benefits to the Seller.
 

 4.
 SURVIVAL.  All agreements, representations and warranties and covenants contained herein or made in writing by or on behalf of the parties hereto in connection with the transactions contemplated hereby shall survive the execution of this Agreement and the consummation of such transactions.
 

 5.
 GOVERNING LAW: MISCELLANEOUS
 

 a.
 This Agreement shall be governed by and interpreted in accordance with the laws of the State of Nevada and without giving effect to the principles thereof regarding the conflict of laws.  Each of the parties consents to the jurisdiction of the federal courts whose districts encompass the state courts of the State of Nevada in connection with any dispute arising under this Agreement and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non conveniens, to the bringing of any such proceeding in such jurisdictions.  To the extent determined by such court, the Company shall reimburse the Buyers for any reasonable legal fees and disbursements incurred by the Buyers in enforcement or protection of any of its rights under this Agreement.
 

 3
 

 
 

 b.
 Failure of any party to exercise any right or remedy under this agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.
 

 c.
 This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto.
 

 d.
 All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require.
 

 e.
 A facsimile transmission of this signed Agreement shall be legal and binding on all parties hereto.
 

 f.
 This Agreement maybe signed in one or more counterparts, each of  which shall be deemed an original.
 

 g.
 The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.
 

 h.
 If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement or the validity or enforceability of this agreement in any other jurisdiction.
 

 i.
 This Agreement may be amended only by the written consent of both the Seller and Purchaser.
 

 j.
 This Agreement supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof.
 

 k.
 This Agreement constitutes the full and entire understanding and agreement between the Seller and the Purchaser.
 

 6.
 NOTICES.  Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively given on the earliest of:
 

 (i)
 The date delivered, if delivered by personal delivery as against written receipt therefor or by confirmed facsimile transmission,
 

 (ii)
 The seventh business day after deposit, postage prepaid, in the United States Postal Service by registered or certified mail, or
 

 (iii)
 The third business day after mailing by next-day express courier, with delivery costs and fees prepaid,
 

 

 

 4
 

 
 

 in each such case, addressed to each of the other parties thereunder entitled at the following addresses (or at such other addresses as such party may designate by ten (10) days’ advance written notice similarly given to each of the other parties hereto):
 

 SELLER:  At the address set forth on the signature page of this Agreement.
 

 PURCHASER:  At the address set forth on the signature page of this Agreement.
 

 

 

 

 

 

 

 

 

 

 [SIGNATURES ON FOLLOWING PAGE]
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 IN WITNESS WHEREOF, this Agreement has been duly executed by the Purchaser and the Seller as of the date set forth below.
 

 Date:  As of August 31, 2015
 

 PURCHASER:
 

 Name:  /s/  G. Robert Powell
 G. Robert Powell
 

 

 SELLER:
 

 Name:
 Blue Earth, Inc.
 2298 Horizon Ridge Parkway
 Suite 205
 Henderson, NV 89052
 

 By:  /s/  Johnny R. Thomas
 Johnny R. Thomas, CEO
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 Schedule 3d
 

 Litigation
 

 The Seller is a party to a shareholder derivative lawsuit captioned “Robert Powell v. Blue Earth, Inc. (et. al) commenced in Clark Cark Civil District Court in the State of Nevada.  A copy of the complaint has been provided to the Purchaser.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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