Exhibit 10.4
 STRATTEC SECURITY CORPORATION
 ECONOMIC VALUE ADDED
BONUS PLAN
FOR
NON-EMPLOYEE MEMBERS OF THE
BOARD OF DIRECTORS




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STRATTEC SECURITY CORPORATION
 ECONOMIC VALUE ADDED
BONUS PLAN
FOR
NON-EMPLOYEE MEMBERS OF THE
BOARD OF DIRECTORS
  PageI. Plan Objectives
    
    
    1II. Plan Administration
    
    
    1III. Definitions
    
    
    1IV. Eligibility
    
    
    4V. Individual Participation Levels
    
    
    4VI. Performance Factors
    
    
    4VII. Change in Status During Plan Year
    
    
    5VIII. Bonus Payment
    
    
    6IX. Administrative Provisions
    
    
    6X. Miscellaneous
    
    
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I.
    
    PLAN OBJECTIVES
 A.
    
    To promote the maximization of shareholder value over the long term by
providing incentive compensation to non-employee members of the Board of Directors of
STRATTEC SECURITY CORPORATION (the Company) in a form which is designed to
financially reward participants for an increase in the value of the Company.B.
    
    To provide competitive levels of compensation that enable the Company to
attract and retain people who can have a positive impact on the economic value of the
Company to its shareholders.C.
    
    To encourage teamwork and cooperation in the achievement of Company goals.
 II.
    
    PLAN ADMINISTRATION
  III.
    
    DEFINITIONS
 A.
    
    Actual EVA means the EVA as calculated for the relevant Plan Year.B.
    
    Bonus means the bonus which is calculated in the manner set forth
in Section V.A.C.
    
    Capital means the Companys average monthly net operating capital
employed for the Plan Year, calculated as follows:
 Current Assets+
    
    Bad Debt Reserve+
    
    LIFO Reserve-
    
    Future Income Tax Benefits-
    
    Current Noninterest-Bearing Liabilities+
    
    Property, Plant, Equipment, (Net)-
    
    Construction in Progress(+/-)
    
    Unusual Capital Items
 D.
    
    Capital Charge means the deemed opportunity cost of employing
Capital in the Companys business, determined as follows:
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E.
    
    Company means STRATTEC SECURITY CORPORATION. The Companys
Chairman & C.E.O., or his/her designee may act on behalf of the Company with respect
to this Plan.F.
    
    Compensation Committee means the Compensation Committee of the
Board of Directors, which among other duties, is responsible for administering the EVA
Plan for the Companys Officers and Senior Managers.G.
    
    Cost of Capital means the weighted average of the cost of equity
and the after tax cost of debt for the relevant Plan Year. For Plan administration
purposes, it is assumed the Companys capital structure will be 80% Equity and 20%
Debt. The Cost of Capital will be initially set at 10% for fiscal year 2008 and
reviewed by the Compensation Committee prior to each Plan Year thereafter, consistent
with the following methodology:
 (a)
    
    Cost of Equity = Risk Free Rate + (Business Risk Index
x Average Equity Risk Premium)(b)
    
    Debt Cost of Capital = Debt Yield x (1 - Tax Rate)(c)
    
    The weighted average of the Cost of Equity and the Debt Cost
of Capital is determined by reference to the expected debt-to-capital ratio
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H.
    
    Earned Wages includes all cash compensation paid in the Plan Year.I.
    
    Economic Value Added or EVA means the NOPAT that remains after
subtracting the Capital Charge, expressed as follows:
   J.
    
    Effective Date. June 30, 1997, the date as of which the Plan first
applies to the Company.K.
    
    EVA Leverage Factor means the adjustment factor reflecting
deviation in the use of capital expressed as a percentage of net operating capital
employed. For purposes of this Plan, the Companys EVA Leverage Factor is determined
to be 3% of the monthly average net operating capital employed during the prior Plan
year.For fiscal year 2008 (beginning July 2, 2007) the EVA Leverage Factor is set at
$3,316,000.L.
    
    NOPAT means cash adjusted net operating profits after taxes for the
Plan Year, calculated as follows:
 Net Sales-
    
    Cost of Goods Sold(+ -)
    
    Change in LIFO Reserve-
    
    Engineering/Selling & Admin.(+ -)
    
    Change in Bad Debt Reserve(+ -)
    
    Other Income & Expense excluding Interest Expense(+ -)
    
    Other Unusual Income or Expense Items(+ -)
    
    Amortization of Unusual Income or Expense Items-
    
    Cash Adjusted Taxes on the Above (+/- change in
deferred tax liability)
 M.
    
    Participant. Any individual who has satisfied the eligibility
requirements of the Plan as provided in Section IV.N.
    
    Plan Year means the one-year period coincident with the Companys
fiscal year.
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O.
    
    Target EVA means the target level of EVA for the Plan Year,
determined as follows:
 Current Plan
    
    
    
    Prior Year
    
    
    
    
    
    Prior Year
    
    
    
    ExpectedYear Target EVA
    
    =
    
    Target EVA
    
    
    +
    
    
    Actual EVA
    
    +
    
    Improvement2
   IV.
    
    ELIGIBILITY
  V.
    
    INDIVIDUAL PARTICIPATION LEVELS
 A.
    
    Bonus Formula. Each Participants Bonus will be determined as a
function of the Participants Earned Wages, the Participants Target Incentive Award
(provided in paragraph V.B., below), and the Company Performance Factor (provided in
Section VI.) for the Plan Year. Each Participants Accrued Bonus will be calculated as
follows:
 Target
    
    
    
    CompanyParticipants
    
    x
    
    Incentive
    
    x
    
    PerformanceEarned Wages
    
    
    
    Award
    
    
    
    Factor
 B.
    
    Target Incentive Award. The Target Incentive Award for all
non-employee Directors will be 40% of Earned Wages.
 VI.
    
    PERFORMANCE FACTOR
 A.
    
    Company Performance Factor Calculation. For any Plan Year, the
Company Performance Factor will be calculated as follows:
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Company Performance Factor = 1.00 +
    
    Actual EVA - Target EVAEVA Leverage Factor
 B.
    
    Adjustments to Company Performance. When Company performance is
based on Economic Value Added, it may be necessary to exclude significant, unusual,
unbudgeted or noncontrollable gains or losses from actual financial results in order
to properly measure performance. The Chairman & C.E.O. will decide those items that
shall be considered in adjusting actual results. For example, some types of items
that may be considered for exclusion are:
 (1)
    
    Any gains or losses which will be treated as extraordinary in
the Companys financial statements.(2)
    
    Profits or losses of any entities acquired by the Company
during the Plan Year, assuming they were not included in the budget and/or the
goal.(3)
    
    Material gains or losses not in the budget and/or the goal
which are of a nonrecurring nature and are not considered to be in the
ordinary course of business. Some of these would be as follows:
 (a)
    
    Gains or losses from the sale or disposal
of real estate or property.(b)
    
    Gains resulting from insurance recoveries
when such gains relate to claims filed in prior years.(c)
    
    Losses resulting from natural catastrophes,
when the cause of the catastrophe is beyond the control of the
Company and did not result from any failure or negligence on the
Companys part.
 VII.
    
    CHANGE IN STATUS DURING THE PLAN YEAR
 A.
    
    New Board Members. A newly appointed or elected non-employee
Director will accrue a pro rata Bonus based on Earned Wages received during the first
Plan Year in which that Director joins the Board of Directors.
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B.
    
    Removal. A non-employee Director removed from the Board of Directors
by due process during the Plan Year shall not be eligible for a Bonus.C.
    
    Resignation. A non-employee Director who resigns during the Plan
Year will be eligible for a pro rata Bonus based on Earned Wages received.D.
    
    Death, Disability and Retirement. If a non-employee Director ceases
to function as a member of the Board of Directors during a Plan Year by reason of
death or disability, a tentative Bonus will be calculated as if the Participant had
remained an active member of the Board as of the end of the Plan Year. The final
Bonus will be calculated based upon the Earned Wages received.Each non-employee Director may name any beneficiary or beneficiaries (who may be
named contingently or successively) to whom any benefit under this Plan is to be
paid in case of the non-employee Directors death.Each such designation shall revoke all prior designations by the non-employee
Director, shall be in the form prescribed by the Compensation Committee, and shall
be effective only when filed by the non-employee Director in writing during his or
her lifetime with the Chairman & C.E.O.In the absence of any such designation, benefits remaining unpaid at the
non-employee Directors death shall be paid to that Directors estate.E.
    
    Leave of Absence. A non-employee Director whose status as an active
Board Member is changed during a Plan Year as a result of a leave of absence may, at
the discretion of the Chairman & C.E.O., be eligible for a pro rata Bonus determined
in the same way as in paragraph D of this Section.
 VIII.
    
    BONUS PAYMENT
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IX.
    
    ADMINISTRATIVE PROVISIONS
 A.
    
    Amendments. The Chairman & C.E.O. of the Company shall have the
right to amend or restate the Plan at any time from time to time. The Company
reserves the right to suspend or terminate the Plan at any time. No such
modification, amendment, suspension, or termination may, without the consent of any
affected participants (or beneficiaries of such participants in the event of death),
reduce the rights of any such participants (or beneficiaries, as applicable) to a
payment or distribution already earned under Plan terms in effect prior to such
change.B.
    
    Authority to Act. The Chairman & C.E.O. (or in his or her absence,
the President & C.O.O.) may act on behalf of the Company for purposes of the Plan.C.
    
    Interpretation of Plan. Any decision of the Chairman & C.E.O. with
respect to any issues concerning, the amounts, terms, form and time of payment of
awards, and interpretation of any Plan guideline, definition, or requirement shall be
final and binding.D.
    
    Reporting Compliance. Awards made under this Plan shall be included
in the employees compensation for purposes of Securities & Exchange Commission
required reporting.E.
    
    Right to Continued Employment; Additional Awards. The receipt of a
bonus award shall not give the recipient any right to continued membership on the
Companys Board of Directors. In addition, the receipt of a bonus award with respect
to any Plan Year shall not entitle the recipient to an award with respect to any
subsequent Plan Year.
 X.
    
    MISCELLANEOUS
 A.
    
    Indemnification. The Chairman & C.E.O. (or any Company officer
designated to act in the Chairmans behalf) shall not be liable for, and shall be
indemnified and held harmless by the Company from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred in connection with any claim,
action, suit, or proceeding to which the Chairman & C.E.O., President & C.O.O. and/or
the Compensation Committee may be a party by reason of any action taken or failure to
act under this Plan. The foregoing right of indemnification shall not be exclusive of
any other rights of
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indemnification to which such person(s) may be entitled under the Companys
Certificate of Incorporation of By-Laws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless.B.
    
    Expenses of the Plan. The expenses of administering this Plan shall
be borne by the Company.C.
    
    Governing Law. This Plan shall be construed in accordance with and
governed by the laws of the State of Wisconsin.
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