Lawndale seeks representation on Sparton's board of directors

By Lisa Kerner

Charlotte, N.C., Aug. 26 - Lawndale Capital Management, LLC and its affiliates intend to nominate four individuals for election to Sparton Corp.'s board of directors.

Sparton was given until Friday to respond positively before Lawndale begins to solicit support for its nominees, according to a schedule 13D filed with the Securities and Exchange Commission.

Lawndale nominees would include:

• Joe Hartnett, president and chief executive officer of Ingenient Technologies;

• Jay B. Hunt, business consultant and president of the Development Group;

• Gerald T. LaFlamme, former interim CEO of Mace Security International, Inc. and current president and CEO of JL Development Co., Inc.; and

• James Swartwout, former co-CEO and a board member of Habasit Holding, the U.S. subsidiary of Habasit AG.

In an Aug. 22 letter to Sparton included in the filing, the investors also:

• Requested that the board hire experienced turnaround management from outside Sparton's "historically ineffective managerial culture";

• Reiterated a request that the board retain independent, reputable advisers to explore strategic alternatives, including the sale of the company; and

• Asked Sparton to provide required notice of Lawndale's intent to directly nominate the shareholder nominees for election to Sparton's board via an alternative proxy slate at Sparton's next annual meeting.

Lawndale, Sparton's largest shareholder, said it had concerns regarding the company's corporate governance and board composition. Specifically, Lawndale cited the board's decision "to improperly strip the company's shareholders of their cumulative voting rights in 2004," effectively removing the board's accountability to shareholders and entrenching both the board and management.

Lawndale also cited Sparton stock's "precipitous decline of 47%" over the past four years and a significant withhold vote at the annual meeting in October 2007.

Sparton and its subsidiaries provide electronic manufacturing services for government and commercial customers. The company is based in Jackson, Mich.

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