SEVERANCE AGREEMENT AND RELEASE OF CLAIMS

EXHIBIT 10.1

SEVERANCE AGREEMENT AND RELEASE OF CLAIMS

          This Severance Agreement and Release of Claims (“ Agreement ”) is made and entered into on June 16, 2009 by and between Edward A. White (“ Director ”) and White Electronic Designs Corporation and all of its affiliated companies and divisions (collectively referred to as “ Company ”) and is intended by the parties hereto to settle and dispose of all claims and liabilities that exist between Director and Company as indicated herein.

RECITALS

          A. Director is a member of the Board of Directors (“ Board ”) of the Company and has served as Chairman of the Board since August 2008.

          B. As of the date hereof, Director has tendered his resignation which will be effective as of June 16, 2009 (the “ Resignation Date ”). Director will, as the date hereof, resign from his position as a member of the Board and any other positions he holds on the Board or offices he holds with the Company and with each of Company’s subsidiaries and affiliated entities on that date.

          C. By entering into this Agreement, the parties mutually and voluntarily agree to be legally bound by the terms set forth below.

COVENANTS

          NOW, THEREFORE, for valuable consideration, the parties agree as follows:

I.

          A. The Company agrees to pay Director the cash sum of one hundred seventy five thousand four hundred dollars ($175,400), less all lawfully required withholdings, which represents a repurchase of Director’s options (pursuant to Article I, Section B.1) directly below, certain remaining Board retainer fees for Director and other transition expenses. Payment shall be made immediately following the expiration of the seven (7) day revocation period set forth in Section VII, assuming that Director has not revoked his signature during that seven (7) day period. The Company will also pay Director all appropriate expense reimbursement requests timely and properly submitted, with supporting documentation as required by the Company, by Director prior to December 31, 2009 and in compliance with Company policy. The parties agree that any reimbursements submitted by Director after December 31, 2009 shall not be paid by the Company. Director shall promptly pay any personal expenses that he incurred, directly or indirectly, with respect to which the Company could be liable.

          B. The Company and Director agree to the following concerning

outstanding grants of stock options and restricted stock units (“ RSUs ”) to Director:

          C. Director acknowledges that upon receipt of the above, he is not owed any further money or any further equity compensation by the Company. Director also agrees to cooperate to the extent required by the Company with respect to timing of payments hereunder for purposes of complying with Section 409A of the Internal Revenue Code.

          D. Director hereby resigns his position as of member of the Board, and any other positions he holds with the Company and with each of Company’s subsidiaries and affiliated entities and the Company hereby accepts the resignation(s). At the request of Company, Director agrees to execute any documents reasonably requested to effectuate or to facilitate his resignation(s). Director agrees he did not resign as a result of a disagreement of the type referred to in Item 5.02(a)(1) of Form 8-K.

II.

          In consideration of the covenants set forth in Paragraph I above and the covenants herein:

          A. Director, on behalf of himself, his marital community if any, and his heirs or assigns, expressly releases Company and its subsidiaries, affiliated companies, directors, officers, all of their agents, employees, and attorneys; and all their predecessors and successors (collectively the “ Released Entities ”) from ANY AND ALL RIGHTS, CLAIMS, DEMANDS, CAUSES OF ACTION, OBLIGATIONS, DAMAGES, PENALTIES, FEES, COSTS, EXPENSES, AND LIABILITIES OF ANY NATURE WHATSOEVER WHICH DIRECTOR HAS, HAD, OR MAY HAVE HAD

AGAINST COMPANY OR ANY OR ALL OF THE RELEASED ENTITIES IN CONNECTION WITH ANY CAUSE OR MATTER WHATSOEVER, WHETHER KNOWN OR UNKNOWN TO THE PARTIES AT THE TIME OF EXECUTION OF THIS AGREEMENT AND EXISTING FROM THE BEGINNING OF TIME TO THE DATE OF THE EXECUTION OF THIS AGREEMENT AND BEYOND AND INCLUDING, WITHOUT LIMITATION, ALL MATTERS RELATED TO DIRECTOR’S SERVICE WITH THE COMPANY AND HIS RESIGNATION.

          By signing this Agreement, Director agrees that he is not an “employee” of the Company under any corporate, federal or state concepts (whether statutory or otherwise) and also agrees to FULLY WAIVE AND RELEASE ALL CLAIMS without limitation, such as attorneys’ fees, and all rights and claims arising out of, or relating to, his service to the Company and resignation from the Board including, BUT NOT LIMITED TO , any claim or other proceeding arising under (without assuming the applicability of such statute or law to the Board or other service of Director):