UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 20, 2009
SPARTON CORPORATION
(Exact Name of Registrant as Specified in its Charter)
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Ohio
(State or other jurisdiction
of incorporation)
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1-1000
(Commission File Number)
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38-1054690
(IRS Employer
Identification No.) |
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425 Martingale Road
Suite 2050
Schaumburg, Illinois
(Address of Principal Executive Offices)
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60173-2213
(Zip Code) |
Registrant’s telephone number, including area code: (800) 772-7866
N/A
(Former Name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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| Item 5.02 |
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers. |
On November 20, 2009, the Board of Directors of Sparton Corporation, an Ohio corporation (the
“Company”), upon recommendation by the Compensation Committee of the Board of Directors (the
“Committee”), approved the award of stock options to certain key employees pursuant to the Amended
and Restated Sparton Corporation Stock Incentive Plan dated October 24, 2001 (the “Plan”). The
purpose of the Plan is to promote the long-term success of the Company for the benefit of the
Company’s shareholders by aligning the personal interests of the Company’s key employees and
non-employee directors with those of its shareholders. The Plan is also designed to allow key
employees and non-employee directors to participate in the Company’s future, as well as to enable
the Company to attract, retain and reward such individuals.
The Committee has been appointed by the Board to administer the Plan. The Committee has the
authority to select directors and/or key employees, respectively, to whom awards may be granted;
the type of awards (or combination thereof) to be granted; the number of shares of Common Stock to
be included in each award; and the terms and conditions of any award, such as conditions of
forfeiture, transfer restrictions and vesting requirements.
The Plan provides for the granting of a variety of stock-based awards, such as stock options, stock
appreciation rights, restricted stock and performance shares. The term of the Plan is ten (10)
years and no awards may be granted under the Plan after October 24, 2011.
Stock options granted under the Plan may be incentive stock options under Section 422 of the
Internal Revenue Code of 1986 or nonqualified options. Non-employee directors are not eligible to
receive incentive stock options. The exercise price for both incentive stock options and
nonqualified options must equal at least 100% of the fair market value of the stock at the date of
grant. The Plan also provides for the discretionary grant of stock appreciation rights in tandem
with stock options. In addition, the Plan allows for the grant of performance share awards and
shares of restricted stock upon such terms and conditions as determined by the Committee or the
Board, as applicable.
Prior to the stock option grants described herein, of the 970,161 shares permitted to be issued
under the Plan, (i) 266,343 shares were subject to unexercised options or
restricted share vestings and (ii) 150,582 shares remained available to be granted under the Plan. The
closing price per share of the Company’s Common Stock on November 20, 2009 was $4.59.
The Board may at any time amend, discontinue, or terminate the Plan or any part of the Plan.
However, unless otherwise required by law, the rights of a participant with respect to awards
granted prior to such amendment, discontinuance or termination may not be impaired without the
consent of such participant. In addition, without the approval of the Company’s shareholders, no
amendment may be made which would increase the aggregate number of shares of Common Stock that may
be issued under the Plan, change the definition of individuals eligible to receive awards under the
Plan, extend the maximum option period under the Plan, or decrease the option price of any option
to less than 100% of the fair market value on the date of grant.
Key employees of the Company or a subsidiary of the Company and non-employee directors of the
Company are eligible to receive awards under the Plan. The Board or Committee, if applicable, will
consider the nature of the services rendered by such individuals, their present and potential
contribution to the Company’s success and the success of the particular subsidiary or division of
the Company by
which they are employed, and such other factors as the Board or Committee in its discretion shall
deem relevant.
No award, option, or other benefit payable under the Plan may, except as otherwise specifically
provided by law, be subject in any manner to assignment, transfer or encumbrance. Neither the Plan
nor any award agreement granted under the Plan entitles any participant to any right to continued
employment by the Company or any subsidiary.
The description of the Plan above does not purport to be complete and is qualified in its entirety
by reference to the full text of the Plan which is attached as Appendix B to the Company’s proxy
statement for its 2001 annual meeting, filed with the Securities and Exchange Commission on
September 28, 2001, and incorporated herein by reference.
The following is a description of the total number of awards granted under the Plan on November 20,
2009 to the Company’s principal executive officer, principal financial officer, named executive
officers and key managers:
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| Name |
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Award Details |
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Number of |
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Type of |
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Exercise Price |
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Expiration |
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Vesting of |
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Shares |
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Award |
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(per share) |
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of Option |
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Option |
Named Executive Officers |
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Cary B. Wood,
President and Chief
Executive Officer
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25,000 |
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Nonqualified
Stock Option
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$ |
5.00 |
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Three (3)
years after grant
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Immediate |
Gregory A. Slome,
Senior Vice
President and
Chief
Financial Officer
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18,750 |
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Nonqualified
Stock Option
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$ |
5.00 |
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Three (3)
years after grant
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Immediate |
Duane K. Stierhoff
Senior Vice
President —
Sparton Medical
Systems
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10,000 |
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Nonqualified
Stock Option
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$ |
5.00 |
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Three (3)
years after grant
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Immediate |
Key Managers |
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Gordon B. Madlock,
Senior Vice
President —
Operations
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12,500 |
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Nonqualified
Stock Option
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$ |
5.00 |
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Three (3)
years after grant
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Immediate |
Michael W. Osborne,
Senior Vice
President —
Business
Development
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12,500 |
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Nonqualified
Stock Option
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$ |
5.00 |
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Three (3)
years after grant
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Immediate |
Steven M. Korwin,
Senior Vice
President —
Quality and
Engineering
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12,500 |
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Nonqualified
Stock Option
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$ |
5.00 |
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Three (3)
years after grant
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Immediate |
James M. Lackemacher,
Group
Vice President —
Government Systems
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10,000 |
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Nonqualified
Stock Option
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$ |
5.00 |
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Three (3)
years after grant
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Immediate |
Total Shares
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101,250 |
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