RETIREMENT AGREEMENT AND RELEASE OF ALL CLAIMS

Exhibit 10.1

RETIREMENT AGREEMENT AND RELEASE OF ALL CLAIMS

     This Retirement Agreement and Release of All Claims (“Agreement”) is made between Sparton Corporation (“Company”) and Richard Langley (“Executive”) as follows:

      1.  Retirement from Employment . Pursuant to Section 6(b) of the Executive’s November 22, 2008 Employment Agreement (the “Employment Agreement”), the Company has notified Executive of its intent to terminate the term of the Employment Agreement Without Cause effective April 1, 2009. Accordingly, the parties have mutually agreed that Executive shall retire effective April 1, 2009 (the “Retirement Date”). As of the Retirement Date, Executive resigns from all officer, director or committee positions with the Company and its subsidiaries. Except as set forth in this Agreement and for Executive’s vested rights, if any, under applicable retirement plans, all compensation and benefits from the Company shall terminate on the Retirement Date.

      2.  Severance . As provided in the Employment Agreement, Company shall pay Executive the unpaid portions of his salary, less payroll deductions required by law, through the term of the Employment Agreement as if Executive had not been terminated. The severance shall be paid according to the Company’s normal payroll practices, shall commence on the next regular pay period after the expiration of the revocation period described in Section 8(c), and shall be paid in equal installments on the Company’s regular pay periods through the term of the Employment Agreement.

      3.  Paid Time Off . Executive shall be paid for 50.25 days (402 hours) of accrued, unused paid time off in the amount of $51,216.35, less payroll taxes required by law. The severance shall be paid according to the Company’s normal payroll practices, shall commence on the next regular pay period after the expiration of the revocation period described in Section 8(c), and shall be paid in equal installments on the Company’s regular pay periods through the term of the Employment Agreement.

      4.  Consulting Services . Executive agrees to provide consulting services (without additional charge) to the Company, as reasonably requested by the Company, with respect to matters of which Executive may have knowledge due to Executive’s employment, including but not limited to any transition of Executive’s work responsibilities. The parties agree that the amount of such consulting services and the cooperation in litigation described below shall not exceed 1,000 hours per year. The Company agrees to pay the reasonable and necessary expenses that Executive incurs in providing such consulting services.

      5.  Cooperation in Litigation . Executive also agrees to cooperate fully with Employer in its defense of or other participation in any administrative, judicial, arbitral, investigative or other proceeding arising from any charge, complaint or other action that has been or may be filed, or with respect to which the Company may be or become involved, relating to any matter that occurred during Executive’s employment with the Company.

      6.  Mutual Release of All Claims