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Unassociated Document

    SOLITRON
      DEVICES, INC.

    2007
      STOCK INCENTIVE PLAN

     

    1. ESTABLISHMENT,
      EFFECTIVE DATE AND TERM

     

    Solitron
      Devices, Inc., a Delaware corporation, hereby establishes the "Solitron Devices,
      Inc. 2007 Stock Incentive Plan." The effective date of the Plan shall be June
      4,
      2007; which is the date the Plan was approved and adopted by the Board. Unless
      earlier terminated pursuant to Section 13(k)
      hereof, the Plan shall terminate on the tenth anniversary of the Effective
      Date.

     

    2. PURPOSE

     

    The
      purpose of the Plan is to enable the Company to attract, retain, reward and
      motivate Eligible Individuals by providing them with an opportunity to acquire
      or increase a proprietary interest in Solitron and to incentivize them to expend
      maximum effort for the growth and success of the Company, so as to strengthen
      the mutuality of the interests between the Eligible Individuals and the
      shareholders of Solitron. 

     

    3. DEFINITIONS
      

     

    As
      used
      in the Plan, the following terms shall have the meanings set forth
      below: 

     

    (a) "Award"
      means any Common Stock, Option, Restricted Stock, Stock Appreciation Right
      or
      any other award granted pursuant to the Plan.

     

    (b) "Award
      Agreement" means a written agreement entered into by Solitron
      and
      a
      Participant setting forth the terms and conditions of the grant of an Award
      to
      such Participant.

     

    (c) "Board"
      means the board of directors of Solitron.

     

    (d) "Cause"
      means, with respect to a termination of employment or service with the Company,
      a termination of employment or service due to a Participant's dishonesty, fraud,
      insubordination, willful misconduct, refusal to perform services (for any reason
      other than illness or incapacity) or materially unsatisfactory performance
      of
      the Participant's duties for the Company; provided,
      however,
      that if
      the Participant and the Company have entered into an employment agreement or
      consulting agreement which defines the term Cause, the term Cause shall be
      defined in accordance with such agreement with respect to any Award granted
      to
      the Participant on or after the effective date of the respective employment
      or
      consulting agreement. The Committee shall determine in its sole and absolute
      discretion whether Cause exists for purposes of the Plan.

     

    (e) "Change
      in Control" means any change in control of Solitron of a nature which would
      be
      required to be reported (a) in response to Item 6(e) of Schedule 14A of
      Regulation 14A, as in effect on the date of an agreement, promulgated under
      the
      Securities Exchange Act of 1934, as amended (the "Exchange Act"), (b) in
      response to Item 5.01 of the Current Report on Form 8-K, as in effect on the
      date of an agreement, promulgated under the Exchange Act, or (c) in any filing
      by the Company with the Securities and Exchange Commission; provided, however,
      that without limitation, a Change of Control of the Company shall be deemed
      to
      have occurred if:

    
      
        
        

      

      
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    (i)
      Any
      "person" (as such term is defined in Sections 13(d)(3) and Section 14(d)(3)
      of
      the Exchange Act), other than the Company, any majority-owned subsidiary of
      the
      Company, or any compensation plan of the Company or any majority-owned
      subsidiary of the Company, becomes the "beneficial owner" (as such term is
      defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of
      securities of Solitron representing fifty percent (50%) or more of the combined
      voting power of Solitron;

     

    (ii)
      During
      any period of three consecutive years during the term of this Agreement, the
      directors who at the beginning of such period constitute the Board cease for
      any
      reason to constitute at least a majority of the Board, unless the election
      of
      each director who was not a director at the beginning of such period has been
      approved in advance by directors representing at least two-thirds of the
      directors then in office who were directors at the beginning of such period;
      or

     

    (iii)
      The
      shareholders of Solitron approve (1) a reorganization, merger, or consolidation
      with respect to which persons who were the shareholders of Solitron immediately
      prior to such reorganization, merger, or consolidation do not immediately
      thereafter own more than 50% of the combined voting power entitled to vote
      generally in the election of the directors of the reorganized, merged or
      consolidated entity; (2) a liquidation or dissolution of Solitron; or (3) the
      sale of all or substantially all of the assets of Solitron, or of a subsidiary
      of Solitron that accounts for 30% of the consolidated revenues of Solitron,
      but
      not including a reorganization, merger or consolidation of Solitron.

     

    However,
      to the extent that Section 409A of the Code would cause an adverse tax
      consequence to a Participant using the above definition, the term "Change in
      Control" shall have the meaning ascribed to the phrase "Change in the Ownership
      or Effective Control of a Corporation or in the Ownership of a Substantial
      Portion of the Assets of a Corporation" under Treasury Department Regulation
      1.409A-3(i)(5), as revised from time to time, and in the event that such
      regulations are withdrawn or such phrase (or a substantially similar phrase)
      ceases to be defined, as determined by the Committee.

     

    (f)
      "Change
      in Control Price" means the price per share of Common Stock paid in any
      transaction related to a Change in Control of Solitron.

     

    (g)
      "Code"
      means the Internal Revenue Code of 1986, as amended, and the regulations
      promulgated thereunder.

     

    (h)
      "Committee"
      means a committee or sub-committee of the Board consisting of two or more
      members of the Board, none of whom shall be an officer or other salaried
      employee of the Company, and each of whom shall qualify in all respects as
      a
      "non-employee director" as defined in Rule 16b-3 under the Exchange Act. If
      no
      Committee exists, the functions of the Committee will be exercised by the Board.
      Notwithstanding the foregoing, with respect to the grant of Awards to
      non-employee directors, the Committee shall be the Board.

     

    
      
        
        

      

      
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    (i)
      "Common
      Stock" means the common stock, $.01 par value per share, of
      Solitron. 

     

    (j)
      "Company"
      means Solitron and all entities whose financial statements are required to
      be
      consolidated with the financial statements of Solitron pursuant to United States
      generally accepted accounting principles and any other entity determined to
      be
      an affiliate as determined by the Committee in its sole and absolute
      discretion.

     

    (k)
      "Covered
      Individual" means any current or former member of the Committee, any current
      or
      former officer of the Company, or any individual designated pursuant to Section
      5(b). 

     

    (l)
      "Detrimental
      Activity" shall mean (i) the disclosure to anyone outside the Company, or the
      use in other than the Company's business, without written authorization from
      the
      Company, of any confidential information or proprietary information, relating
      to
      the business of the Company, acquired by a Participant prior to a termination
      of
      the Participant's employment or service with the Company; (ii) activity while
      employed or providing services that results, or if known could result, in the
      termination of the Participant's employment or service that is classified by
      the
      Company as a termination for Cause; (iii) any attempt, directly or indirectly,
      to solicit, induce or hire (or the identification for solicitation, inducement
      or hiring of) any non-clerical employee of the Company to be employed by, or
      to
      perform services for, the Participant or any person or entity with which the
      Participant is associated (including, but not limited to, due to the
      Participant's employment by, consultancy for, equity interest in, or creditor
      relationship with such person or entity) or any person or entity from which
      the
      Participant receives direct or indirect compensation or fees as a result of
      such
      solicitation, inducement or hire (or the identification for solicitation,
      inducement or hire) without, in all cases, written authorization from the
      Company; (iv) any attempt, directly or indirectly, to solicit in a competitive
      manner any current or prospective customer of the Company without, in all cases,
      written authorization from the Company; (v) the Participant's Disparagement,
      or
      inducement of others to do so, of the Company or their past and present
      officers, directors, employees or products; (vi) without written authorization
      from the Company, the rendering of services for any organization, or engaging,
      directly or indirectly, in any business, which is competitive with the Company,
      or which organization or business, or the rendering of services to such
      organization or business, is otherwise prejudicial to or in conflict with the
      interests of the Company; provided, however that competitive activities shall
      only be those competitive with any business unit of the Company with regard
      to
      which the Participant performed services at any time within the two (2) years
      prior to the termination of the Participant's employment or service; or (vii)
      any other conduct or act determined by the Committee, in its sole discretion,
      to
      be injurious, detrimental or prejudicial to any interest of the Company. For
      purposes of subparagraphs (i), (iii), (iv) and (vi) above, the Chief Executive
      Officer and the General Counsel of the Company shall each have authority to
      provide the Participant with written authorization to engage in the activities
      contemplated thereby and no other person shall have authority to provide the
      Participant with such authorization. 

     

    
      
        
        

      

      
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    (m)
      "Disability"
      means a "permanent and total disability" within the meaning of Code
      Section 22(e)(3); provided,
      however,
      that if
      a Participant and the Company have entered into an employment or consulting
      agreement which defines the term Disability for purposes of such agreement,
      Disability shall be defined pursuant to the definition in such agreement with
      respect to any Award granted to the Participant on or after the effective date
      of the respective employment or consulting agreement. The Committee shall
      determine in its sole and absolute discretion whether a Disability exists for
      purposes of the Plan.

     

    (n)
      "Disparagement"
      means making any comments or statements to the press, the Company's employees
      or
      any individual or entity with whom the company has a business relationship
      which
      would adversely affect in any manner: (i) the conduct of the business of the
      Company (including, without limitation, any products or business plans or
      prospects), or (ii) the business reputation of the Company or any of its
      products, or its past or present officers, directors or employees.

     

    (o)
      "Dividend
      Equivalents" means an amount equal to the cash dividends paid by the Company
      upon one share of Common Stock subject to an Award granted to a Participant
      under the Plan. 

     

    (p)
      "Effective
      Date" shall mean June
      4,
      2007. 

     

    (q)
      "Eligible
      Individual" means any employee, officer, director (employee or non-employee
      director) of the Company and any Prospective Employee to whom Awards are granted
      in connection with an offer of future employment with the Company.

     

    (r)
      "Exchange
      Act" means the Securities Exchange Act of 1934, as amended. 

     

    (s)
      "Exercise
      Price" means the purchase price of each share of Common Stock subject to an
      Award.

     

    (t)
      "Fair
      Market Value" means, unless otherwise required by the Code, as of any date,
      the
      last sales price reported for the Common Stock on such date (i) as reported
      by
      the national securities exchange in the United States on which it is then traded
      or (ii) if not traded on any such national securities exchange, as quoted on
      an
      automated quotation system sponsored by the National Association of Securities
      Dealers, Inc., or if the Common Stock shall not have been reported or quoted
      on
      such date, on the first day prior thereto on which the Common Stock was reported
      or quoted; provided,
      however,
      that the
      Committee may modify the definition of Fair Market Value to reflect any changes
      in the trading practices of any exchange or automated system sponsored by the
      National Association of Securities Dealers, Inc. on which the Common Stock
      is
      listed or traded. If the Common Stock is not readily traded on a national
      securities exchange or any system sponsored by the National Association of
      Securities Dealers, Inc., the Fair Market Value shall be determined in good
      faith by the Committee.

     

    (u) "Grant
      Date" means the date on which the Committee approves the grant of an Award
      or
      such later date as is specified by the Committee and set forth in the applicable
      Award Agreement.

    
      
        
        

      

      
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    (v) "Non-Employee
      Director" means a director of Solitron
      who
      is
      not an active employee of the Company.

     

    (w) "Option"
      means a non-qualified option to purchase Common Stock granted pursuant to
      Section 7 of the Plan. 

     

    (x) "Participant"
      means any Eligible Individual who holds an Award under the Plan and any of
      such
      individual's successors or permitted assigns.

     

    (y) "Person"
      shall mean any person, corporation, partnership, limited liability company,
      joint venture or other entity or any group (as such term is defined for purposes
      of Section 13(d) of the Exchange Act), other than a parent or
      subsidiary.

     

    (z) "Plan"
      means this Solitron
      Devices, Inc
      2007
      Stock Incentive Plan.

     

    (aa) "Prospective
      Employee" means any individual who has committed to become an employee of the
      Company within sixty (60) days from the date an Award is granted to such
      individual.

     

    (bb) "Solitron"
      means Solitron Devices, Inc., a Delaware corporation.

     

    (cc) "Restricted
      Stock" means Common Stock subject to certain restrictions, as determined by
      the
      Committee, and granted pursuant to Section 9 hereunder. 

     

    (dd) "Restricted
      Stock Unit" means the right to receive to receive a fixed number of shares
      of
      Common Stock, or the cash equivalent, granted pursuant to Section 9
      hereunder.

     

    (ee)
      "Stock
      Appreciation Right" means the right to receive all or some portion of the
      increase in value of a fixed number of shares of Common Stock granted pursuant
      to Section 8 hereunder.

     

    (ff)
      "Transfer"
      means,
      as a
      noun, any direct or indirect, voluntary or involuntary, exchange, sale,
      bequeath, pledge, mortgage, hypothecation, encumbrance, distribution, transfer,
      gift, assignment or other disposition or attempted disposition of, and, as
      a
      verb, directly or indirectly, voluntarily or involuntarily, to exchange, sell,
      bequeath, pledge, mortgage, hypothecate, encumber, distribute, transfer, give,
      assign or in any other manner whatsoever dispose or attempt to dispose
      of.

     

    4. ELIGIBILITY

     

    Awards
      may be granted under the Plan to any Eligible Individual as determined by the
      Committee from time to time on the basis of their importance to the business
      of
      the Company pursuant to the terms of the Plan. 

     

    
      
        
        

      

      
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    5. ADMINISTRATION

     

    (a)
      Committee.
      The
      Plan shall be administered by the Committee, which shall have the full power
      and
      authority to take all actions, and to make all determinations not inconsistent
      with the specific terms and provisions of the Plan deemed by the Committee
      to be
      necessary or appropriate to the administration of the Plan, any Award granted
      or
      any Award Agreement entered into hereunder. The
      Committee shall have authority to issue Awards upon such terms (not inconsistent
      with the provisions of this Plan) as the Committee may consider appropriate.
      The
      terms of an Award may include (in addition to those contained in this Plan)
      such
      conditions and limitations as the Committee may consider appropriate in its
      sole
      discretion for the protection of the interests of the Company and its
      shareholders, including, without limitation, restrictions on exercisability,
      vesting or transferability, forfeiture provisions, and requirements for the
      disgorgement of gain. The
      Committee may correct any defect or supply any omission or reconcile any
      inconsistency in the Plan or in any Award Agreement in the manner and to the
      extent it shall deem expedient to carry the Plan into effect as it may determine
      in its sole discretion. The decisions by the Committee shall be final,
      conclusive and binding with respect to the interpretation and administration
      of
      the Plan, any Award or any Award Agreement entered into under the Plan.

     

    (b)
      Advisors
      to Committee.
      The
      Committee may designate employees of the Company and professional advisors
      to
      assist the Committee in the administration of the Plan. The Committee may grant
      authority to the Chief Executive Officer of the Company or any other employee
      of
      the Company to execute agreements or other documents on behalf of the Committee
      in connection with the grant of an Award or the administration of the Plan.
      The
      Committee may employ such legal counsel, consultants, and agents as it may
      deem
      desirable for the administration of the Plan and may rely upon any advice and
      any computation received from any such counsel, consultant, or agent. The
      Company shall pay all expenses and costs incurred by the Committee for the
      engagement of any such counsel, consultant, or agent. 

     

    (c)
      Participants
      Outside the U.S.
      In order
      to conform with the provisions of local laws and regulations in foreign
      countries in which the Company may operate, the Committee shall have the sole
      discretion to (i) modify the terms and conditions of the Awards granted under
      the Plan to Eligible Individuals located outside the United States; (ii)
      establish subplans with such modifications as may be necessary or advisable
      under the circumstances presented by local laws and regulations; and (iii)
      take
      any action which it deems advisable to comply with or otherwise reflect any
      necessary governmental regulatory procedures, or to obtain any exemptions or
      approvals necessary with respect to the Plan or any subplan established
      hereunder.  

     

    (d)
      Liability
      and Indemnification.
      No
      Covered Individual shall be liable for any action or determination made in
      good
      faith with respect to the Plan, any Award granted or any Award Agreement entered
      into hereunder. The Company shall, to the maximum extent permitted by applicable
      law and the Articles of Incorporation and Bylaws of Solitron, indemnify and
      hold
      harmless each Covered Individual against any cost or expense (including
      reasonable attorney fees reasonably acceptable to the Company) or liability
      (including any amount paid in settlement of a claim with the approval of the
      Company), and amounts advanced to such Covered Individual necessary to pay
      the
      foregoing at the earliest time and to the fullest extent permitted, arising
      out
      of any act or omission to act in connection with the Plan, any Award granted
      hereunder or any Award Agreement entered into hereunder. Such indemnification
      shall be in addition to any rights of indemnification such individuals may
      have
      under applicable law or under the Articles of Incorporation or Bylaws of
      Solitron. Notwithstanding anything else herein, this indemnification will not
      apply to the actions or determinations made by a Covered Individual with regard
      to Awards granted to such Covered Individual under the Plan or arising out
      of
      such Covered Individual's own fraud or bad faith.

    
      
        
        

      

      
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    6. COMMON
      STOCK

     

    (a)
      Shares
      Available for Awards.
      The
      Common Stock that may be issued pursuant to Awards granted under the Plan shall
      be treasury shares or authorized but unissued shares of the Common Stock. The
      total number of shares of Common Stock that may be issued pursuant to Awards
      granted under the Plan shall be 800,000 shares.

     

    (b)
      Reduction
      of Shares Available for Awards.
      Upon
      the granting of an Award, the number of shares of Common Stock available under
      this Section hereof for the granting of further Awards shall be reduced as
      follows:

     

    (i)
      In
      connection with the granting of an Award that is settled in Common Stock, the
      number of shares of Common Stock shall be reduced by the number of shares of
      Common Stock subject to the Option or Stock Appreciation Right. 

     

    (ii)
      Awards
      settled in cash shall not count against the total number of shares of Common
      Stock available to be granted pursuant to the Plan.

     

    (c)
      Cancelled,
      Forfeited, or Surrendered Awards.
      Notwithstanding anything to the contrary in this Plan, if any Award is
      cancelled, forfeited or terminated for any reason prior to exercise or becoming
      vested in full, the shares of Common Stock that were subject to such Award
      shall
      to the extent cancelled, forfeited or terminated, immediately be available
      for
      future Awards granted under the Plan as if said Award had never been granted;
      provided, however, that any shares of Common Stock subject to an Award, other
      than a Stock Appreciation Right, which is cancelled, forfeited or terminated
      in
      order to pay the Exercise Price, purchase price or any taxes or tax withholdings
      on an Award shall not be available for future Awards granted under the Plan.
      Any
      Common Stock subject to a Stock Appreciation Right which is not issued upon
      settling such Stock Appreciation Right shall be available for future Awards
      granted under the Plan.

     

    (d)
      Recapitalization.
      If the
      outstanding shares of Common Stock are increased or decreased or changed into
      or
      exchanged for a different number or kind of shares or other securities of
      Solitron by reason of any recapitalization, reclassification, reorganization,
      stock split, reverse split, combination of shares, exchange of shares, stock
      dividend
      or other
      distribution payable in capital stock of Solitron or other increase or decrease
      in such shares effected without receipt of consideration by Solitron occurring
      after the Effective Date, an appropriate and proportionate adjustment shall
      be
      made by the Committee to (i) the aggregate number and kind of shares of Common
      Stock available under the Plan; (ii) the calculation of the reduction of shares
      of Common Stock available under the Plan; and/or (iii) the number and kind
      of
      shares of Common Stock issuable upon exercise (or vesting) of outstanding Awards
      granted under the Plan; (vi) the Exercise Price of outstanding Options granted
      under the Plan. No fractional shares of Common Stock or units of other
      securities shall be issued pursuant to any such adjustment under this Section
      6(d), and any fractions resulting from any such adjustment shall be eliminated
      in each case by rounding downward to the nearest whole share or unit.

    
      
        
        

      

      
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    7. OPTIONS

     

    (a) Grant
      of Options. Subject
      to the terms and conditions of the Plan, the Committee may grant to such
      Eligible Individuals as the Committee may determine, Options to purchase such
      number of shares of Common Stock and on such terms and conditions as the
      Committee shall determine in its sole and absolute discretion. Each
      grant of an Option shall satisfy the requirements set forth in this
      Section.

     

    (b) Exercise
      Price.
      The
      Exercise Price of an Option shall be fixed by the Committee and stated in the
      respective Award Agreement, provided that the Exercise Price of the shares
      of
      Common Stock subject to such Option may not be less than Fair Market Value
      of
      such Common Stock on the Grant Date, or if greater, the par value of the Common
      Stock.

     

    (c) Limitation
      on Option Period.
      Options
      granted under the Plan and all rights to purchase Common Stock thereunder shall
      terminate no later than the tenth anniversary of the Grant Date of such Options,
      or on such earlier date as may be stated in the Award Agreement relating to
      such
      Option. In the case of Options expiring prior to the tenth anniversary of the
      Grant Date, the Committee may in its discretion, at any time prior to the
      expiration or termination of said Options, extend the term of any such Options
      for such additional period as it may determine, but in no event beyond the
      tenth
      anniversary of the Grant Date thereof.

     

    (d)
      Vesting
      Schedule and Conditions.
      No
      Options may be exercised prior to the satisfaction of the conditions and vesting
      schedule provided for in the Award Agreement relating thereto. 

     

    (e) Exercise.
      When
      the conditions to the exercise of an Option have been satisfied, the Participant
      may exercise the Option only in accordance with the following provisions. The
      Participant shall deliver to Solitron a written notice stating that the
      Participant is exercising the Option and specifying the number of shares of
      Common Stock which are to be purchased pursuant to the Option, and such notice
      shall be accompanied by payment in full of the Exercise Price of the shares
      for
      which the Option is being exercised, by one or more of the methods provided
      for
      in the Plan. Said notice must be delivered to Solitron at its principal office
      and addressed to the attention of Shevach Saraf, Chief Executive Officer. The
      minimum number of shares of Common Stock with respect to which an Option may
      be
      exercised, in whole or in part, at any time shall be the lesser of 800,000
      shares or the maximum number of shares available for purchase under the Option
      at the time of exercise. An attempt to exercise any Option granted hereunder
      other than as set forth in the Plan shall be invalid and of no force and effect.
      

     

    (f)
      Payment.
      Payment
      of the Exercise Price for the shares of Common Stock purchased pursuant to
      the
      exercise of an Option shall be made by one of the following
      methods:

    
      
        
        

      

      
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    (i)
      by
      cash,
      certified or cashier’s check, bank draft or money order; or 

     

    (ii)
      through
      the delivery to Solitron of shares of Common Stock which have been previously
      owned by the Participant for the requisite period necessary to avoid a charge
      to
      Solitron's earnings for financial reporting purposes; such shares shall be
      valued, for purposes of determining the extent to which the Exercise Price
      has
      been paid thereby, at their Fair Market Value on the date of exercise; without
      limiting the foregoing, the Committee may require the Participant to furnish
      an
      opinion of counsel acceptable to the Committee to the effect that such delivery
      would not result in Solitron incurring any liability under Section 16(b) of
      the
      Exchange Act; or

     

    (iii)
      by
      any
      other method which the Committee in its sole and absolute discretion and to
      the
      extent permitted by applicable law, may permit including but not limited to
      a
      "cashless exercise sale and remittance procedure" pursuant to which the
      Participant shall concurrently provide irrevocable instructions (A) to a
      brokerage firm approved by the Committee to effect the immediate sale of the
      purchased shares and remit to Solitron, out of the sale proceeds available
      on
      the settlement date, sufficient funds to cover the aggregate Exercise Price
      payable for the purchased shares plus all applicable federal, state and local
      income, employment, excise, foreign and other taxes required to be withheld
      by
      the Company by reason of such exercise and (B) to Solitron to deliver the
      certificates for the purchased shares directly to such brokerage firm in order
      to complete the sale.

     

    (g)
      Termination
      of Employment, Disability or Death.
      Unless
      otherwise provided in an Award Agreement, upon the termination of the employment
      or other service of a Participant with the Company for any reason, all of the
      Participant's outstanding Options (whether vested or unvested) shall be subject
      to the rules of this paragraph. Upon such termination, the Participant's
      unvested Options shall expire. Notwithstanding anything in this Plan to the
      contrary, the Committee may provide, in its sole and absolute discretion, that
      following the termination of employment or other service of a Participant with
      the Company for any reason (i) any unvested Options held by the Participant
      that
      vest solely upon a future service requirement shall vest in whole or in part,
      at
      any time subsequent to such termination of employment or other service, and
      or
      (ii) a Participant or the Participant's estate, devisee or heir at law
      (whichever is applicable), may exercise an Option, in whole or in part, at
      any
      time subsequent to such termination of employment or other service and prior
      to
      the termination of the Option pursuant to its terms. Unless otherwise determined
      by the Committee, temporary absence from employment because of illness,
      vacation, approved leaves of absence or military service shall not constitute
      a
      termination of employment or other service. 

     

    (i)
      Termination
      for Reason Other Than Cause, Disability or Death.
      If a
      Participant's termination of employment or other service is for any reason
      other
      than death, Disability, Cause, or a voluntary termination within ninety (90)
      days after occurrence of an event which would be grounds for termination of
      employment or other service by the Company for Cause, any Option held by such
      Participant, may be exercised, to the extent exercisable at termination, by
      the
      Participant at any time within a period not to exceed ninety (90) days from
      the
      date of such termination, but in no event after the termination of the Option
      pursuant to its terms.

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (ii)
      Disability.
      If a
      Participant's termination of employment or other service with the Company is
      by
      reason of a Disability of such Participant, the Participant shall have the
      right
      at any time within a period not to exceed one (1) year after such termination,
      but in no event after the termination of the Option pursuant to its terms,
      to
      exercise, in whole or in part, any vested portion of the Option held by such
      Participant at the date of such termination; provided,
      however,
      that if
      the Participant dies within such period, any vested Option held by such
      Participant upon death shall be exercisable by the Participant's estate, devisee
      or heir at law (whichever is applicable) for a period not to exceed one (1)
      year
      after the Participant's death, but in no event after the termination of the
      Option pursuant to its terms.

     

    (iii)
      Death.
      If a
      Participant dies while in the employment or other service of the Company, the
      Participant's estate or the devisee named in the Participant's valid last will
      and testament or the Participant's heir at law who inherits the Option has
      the
      right, at any time within a period not to exceed one (1) year after the date
      of
      such Participant's death, but in no event after the termination of the Option
      pursuant to its terms, to exercise, in whole or in part, any portion of the
      vested Option held by such Participant at the date of such Participant's death.
      

     

    (iv)
      Termination
      for Cause.
      In the
      event the termination is for Cause or is a voluntary termination within ninety
      (90) days after occurrence of an event which would be grounds for termination
      of
      employment or other service by the Company for Cause (without regard to any
      notice or cure period requirement), any Option held by the Participant at the
      time of such termination shall be deemed to have terminated and expired upon
      the
      date of such termination.

     

    
      	 	
              8.

            	
              STOCK
                APPRECIATION RIGHTS

            

    

     

    (a)  Grant
      of Stock Appreciation Rights.
      Subject
      to the terms and conditions of the Plan, the Committee may grant to such
      Eligible Individuals as the Committee may determine, Stock Appreciation Rights,
      in such amounts, and on such terms and conditions as the Committee shall
      determine in its sole and absolute discretion. Each grant of a Stock
      Appreciation Right shall satisfy the requirements as set forth in this
      Section.

     

    (b)  Terms
      and Conditions of Stock Appreciation Rights.
      Unless
      otherwise provided in an Award Agreement, the terms and conditions (including,
      without limitation, the limitations on the Exercise Price, exercise period,
      repricing and termination) of the Stock Appreciation Right shall be
      substantially identical (to the extent possible taking into account the
      differences related to the character of the Stock Appreciation Right) to the
      terms and conditions that would have been applicable under Section 7 above
      were the grant of the Stock Appreciation Rights a grant of an Option.

     

    (c)  Exercise
      of Stock Appreciation Rights.
      Stock
      Appreciation Rights shall be exercised by a Participant only by written notice
      delivered to Solitron, specifying the number of shares of Common Stock with
      respect to which the Stock Appreciation Right is being exercised. 

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (d)  Payment
      of Stock Appreciation Right.
      Unless
      otherwise provided in an Award Agreement, upon exercise of a Stock Appreciation
      Right, the Participant or Participant's estate, devisee or heir at law
      (whichever is applicable) shall be entitled to receive payment, in cash, in
      shares of Common Stock, or in a combination thereof, as determined by the
      Committee in its sole and absolute discretion. The amount of such payment shall
      be determined by multiplying the excess, if any, of the Fair Market Value of
      a
      share of Common Stock on the date of exercise over the Fair Market Value of
      a
      share of Common Stock on the Grant Date, by the number of shares of Common
      Stock
      with respect to which the Stock Appreciation Rights are then being exercised.
      Notwithstanding the foregoing, the Committee may limit in any manner the amount
      payable with respect to a Stock Appreciation Right by including such limitation
      in the Award Agreement.

     

    
      	
            	9.	
              RESTRICTED
                STOCK

            

    

     

    (a)
      Grant
      of Restricted Stock.
      Subject
      to the terms and conditions of the Plan, the Committee may grant to such
      Eligible Individuals as the Committee may determine, Restricted Stock, in such
      amounts and on such terms and conditions as the Committee shall determine in
      its
      sole and absolute discretion. Each grant of Restricted Stock shall satisfy
      the
      requirements as set forth in this Section.

     

    (b)
      Restrictions.
      The
      Committee shall impose such restrictions on any Restricted Stock granted
      pursuant to the Plan as it may deem advisable including, without limitation;
      time based vesting restrictions, or the attainment of performance goals.

     

    (c)
      Certificates
      and Certificate Legend.
      With
      respect to a grant of Restricted Stock, the Company may issue a certificate
      evidencing such Restricted Stock to the Participant or issue and hold such
      shares of Restricted Stock for the benefit of the Participant until the
      applicable restrictions expire. The Company may legend the certificate
      representing Restricted Stock to give appropriate notice of such restrictions.
      In addition to any such legends, each certificate representing shares of
      Restricted Stock granted
      pursuant to the Plan shall bear the following legend:

     

    "The
      sale
      or other transfer of the shares of stock represented by this certificate,
      whether voluntary, involuntary, or by operation of law, are subject to certain
      terms, conditions, and restrictions on transfer as set forth in the Solitron
      Devices, Inc.
      2007
      Stock Incentive Plan (the "Plan"), and in an Agreement entered into by and
      between the registered owner of such shares and Solitron Devices, Inc. (the
      "Company"), dated June 4, 2007 (the "Award Agreement"). A copy of the Plan
      and
      the Award Agreement may be obtained from the Secretary of the
      Company."

     

    (d)
      Removal
      of Restrictions.
      Except
      as
      otherwise provided in the Plan, shares of Restricted Stock shall become freely
      transferable by the Participant upon the lapse of the applicable restrictions.
      Once the shares of Restricted Stock are released from the restrictions, the
      Participant shall be entitled to have the legend required by paragraph (c)
      above
      removed from the share certificate evidencing such Restricted Stock and the
      Company shall pay or distribute to the Participant all dividends and
      distributions held in escrow by the Company with respect to such Restricted
      Stock.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (e) Shareholder
      Rights.
      Unless
      otherwise provided in an Award Agreement, until the expiration of all applicable
      restrictions, (i) the Restricted Stock shall be treated as outstanding, (ii)
      the
      Participant holding shares of Restricted Stock may exercise full voting rights
      with respect to such shares, and (iii) the Participant holding shares of
      Restricted Stock shall be entitled to receive all dividends and other
      distributions paid with respect to such shares while they are so held. If any
      such dividends or distributions are paid in shares of Common Stock, such shares
      shall be subject to the same restrictions on transferability and forfeitability
      as the shares of Restricted Stock with respect to which they were paid.
      Notwithstanding anything to the contrary, at the discretion of the Committee,
      all such dividends and distributions may be held in escrow by the Company
      (subject to the same restrictions on forfeitability) until all restrictions
      on
      the respective Restricted Stock have lapsed.

     

    (f) Termination
      of Service.
      Unless
      otherwise provided in a Award Agreement, if a Participant’s employment or other
      service with the Company terminates for any reason, all unvested shares of
      Restricted Stock held by the Participant and any dividends or distributions
      held
      in escrow by Solitron with respect to such Restricted Stock shall be forfeited
      immediately and returned to the Company. Notwithstanding anything in this Plan
      to the contrary, the Committee may provide, in its sole and absolute discretion,
      that following the termination of employment or other service of a Participant
      with the Company for any reason, any unvested shares of Restricted Stock held
      by
      the Participant that vest solely upon a future service requirement shall vest
      in
      whole or in part, at any time subsequent to such termination of employment
      or
      other service.

     

    
      	 	
              10.

            	
               CHANGE
                IN CONTROL

            

    

     

    Unless
      otherwise provided in an Award Agreement, all Awards shall immediately
      become exercisable or vested, without regard to any limitation imposed pursuant
      to this Plan.
      Prior
      to a Change in Control of
      Solitron, the Committee may in its sole and absolute discretion, provide on
      a
      case by case basis that (i) all Awards shall terminate, provided that
      Participants shall have the right, immediately prior to the occurrence of such
      Change in Control and during such reasonable period as the Committee in its
      sole
      discretion shall determine and designate, to exercise Awards in whole or in
      part, (ii)  all Awards shall terminate provided that Participants shall be
      entitled to a cash payment equal to the Change in Control Price with respect
      to
      shares subject to the Award net
      of
      the Exercise Price thereof (if
      applicable), (iv)
      provide
      that, in connection with a liquidation or dissolution of Solitron, Awards shall
      convert into the right to receive liquidation proceeds net of the Exercise
      Price
      (if applicable) and (v) any combination of the foregoing; provided,
      however, that all Awards shall be treated as immediately exercisable and vested.
      The Committee shall not take any action permitted by this Section unless
      counsel for Solitron determines that such action will not result in adverse
      tax
      consequences to a Participant under Section 409A of the Code.
      In
      the
      event that the Committee does not terminate or convert an Award upon a Change
      in
      Control of Solitron, then the Award shall
      be
      assumed, or substantially equivalent Awards shall be substituted, by the
      acquiring, or succeeding corporation (or an affiliate thereof).

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
      	 	
              11.

            	
              CHANGE
                IN STATUS OF PARENT OR
                SUBSIDIARY

            

    

     

    Unless
      otherwise provided in an Award Agreement or otherwise determined by the
      Committee, in the event that an entity which was previously a part of the
      Company is no longer a part of the Company, as determined by the Committee
      in
      its sole discretion, the Committee may, in its sole and absolute discretion
      (i)
      provide on a case by case basis that some or all outstanding Awards held by
      a
      Participant employed by or performing service for such entity may become
      immediately exercisable or vested, without regard to any limitation imposed
      pursuant to this Plan; (ii) provide on a case by case basis that some or all
      outstanding Awards held by a Participant employed by or performing service
      for
      such entity or business unit may remain outstanding, may continue to vest,
      and/or may remain exercisable for a period not exceeding one (1) year, subject
      to the terms of the Award Agreement and this Plan; and/or (iii) treat the
      employment or other services of a Participant employed by such entity as
      terminated if such Participant is not employed by Solitron or any entity that
      is
      a part of the Company immediately after such event.

     

    
      	
            	12.	
              REQUIREMENTS
                OF LAW

            

    

     

    (a)
      Violations
      of Law.
      The
      Company shall not be required to sell or issue any shares of Common Stock under
      any Award if the sale or issuance of such shares would constitute a violation
      by
      the individual exercising the Award, the Participant or the Company of any
      provisions of any law or regulation of any governmental authority, including
      without limitation any provisions of the Sarbanes-Oxley Act, and any other
      federal or state securities laws or regulations. Any determination in this
      connection by the Committee shall be final, binding, and conclusive. The Company
      shall not be obligated to take any affirmative action in order to cause the
      exercise of an Award, the issuance of shares pursuant thereto or the grant
      of an
      Award to comply with any law or regulation of any governmental
      authority.

     

    (b)
      Registration.
      At the
      time of any exercise or receipt of any Award, the Company may, if it shall
      determine it necessary or desirable for any reason, require the Participant
      (or
      Participant’s heirs, legatees or legal representative, as the case may be), as a
      condition to the exercise or grant thereof, to deliver to the Company a written
      representation of present intention to hold the shares for their own account
      as
      an investment and not with a view to, or for sale in connection with, the
      distribution of such shares, except in compliance with applicable federal and
      state securities laws with respect thereto. In the event such representation
      is
      required to be delivered, an appropriate legend may be placed upon each
      certificate delivered to the Participant (or Participant’s heirs, legatees or
      legal representative, as the case may be) upon the Participant's exercise of
      part or all of the Award or receipt of an Award and a stop transfer order may
      be
      placed with the transfer agent. Each Award shall also be subject to the
      requirement that, if at any time the Company determines, in its discretion,
      that
      the listing, registration or qualification of the shares subject to the Award
      upon any securities exchange or under any state or federal law, or the consent
      or approval of any governmental regulatory body is necessary or desirable as
      a
      condition of or in connection with, the issuance or purchase of the shares
      thereunder, the Award may not be exercised in whole or in part and the
      restrictions on an Award may not be removed unless such listing, registration,
      qualification, consent or approval shall have been effected or obtained free
      of
      any conditions not acceptable to the Company in its sole discretion. The
      Participant shall provide the Company with any certificates, representations
      and
      information that the Company requests and shall otherwise cooperate with the
      Company in obtaining any listing, registration, qualification, consent or
      approval that the Company deems necessary or appropriate. The Company shall
      not
      be obligated to take any affirmative action in order to cause the exercisability
      or vesting of an Award, to cause the exercise of an Award or the issuance of
      shares pursuant thereto, or to cause the grant of Award to comply with any
      law
      or regulation of any governmental authority.

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (c)
      Withholding
      for Taxes; Set-Off for Debt.
      Whenever
      the Company proposes or is required to issue or transfer shares of Common Stock
      to a Participant under the Plan, the Company shall have the right to require
      the
      Participant to remit to the Company an amount sufficient to satisfy all federal,
      state and local withholding tax requirements prior to the delivery of any
      certificate or certificates for such shares. If such certificates have been
      delivered prior to the time a withholding obligation arises, the Company shall
      have the right to require the Participant to remit to the Company an amount
      sufficient to satisfy all federal, state or local withholding tax requirements
      at the time such obligation arises and to withhold from other amounts payable
      to
      the Participant, as compensation or otherwise, as necessary. Whenever payments
      under the Plan are to be made to a Participant in cash, such payments shall
      be
      net of any amounts sufficient to satisfy all federal, state and local
      withholding tax requirements. In lieu of requiring a Participant to make a
      payment to the Company in an amount related to the withholding tax requirement,
      the Committee may, in its discretion, provide that at the Participant’s
      election, the tax withholding obligation shall be satisfied by the Company’s
      withholding a portion of the shares otherwise distributable to the Participant,
      such shares being valued at their fair market value at the date of exercise,
      or
      by the Participant’s delivering to the Company a portion of the shares
      previously delivered by the Company, such shares being valued at their fair
      market value as of the date of delivery of such shares by the Participant to
      the
      Company.

     

    In
      addition, the Company shall have the right of set-off for debt to the Company
      (Employee Debt) incurred by a Participant whose employment has terminated but
      who exercises options subject to the Plan. In such instance, the Company may
      withhold payment or portion of the shares otherwise distributable to the
      Participant, such shares being valued at their fair market value at the date
      of
      the exercise, in an amount equal to such Employee Debt (which may include,
      but
      is not limited to, amounts owed the Company for breaches of any security
      agreement, relocation expense agreement or other indebtedness). 

     

    (d)
      Governing
      Law.
      The
      Plan shall be governed by, and construed and enforced in accordance with, the
      laws of the State of Delaware.

     

    
      	
            	13.	
              GENERAL
                PROVISIONS

            

    

     

    (a) Award
      Agreements.
      All
      Awards granted pursuant to the Plan shall be evidenced by an Award Agreement.
      Each Award Agreement shall specify the terms and conditions of the Award granted
      and shall contain any additional provisions, as the Committee shall deem
      appropriate, in its sole and absolute discretion (including, to the extent
      that
      the Committee deems appropriate, provisions relating to confidentiality,
      non-competition, non-solicitation and similar matters). The terms of each Award
      Agreement need not be identical for Eligible Individuals provided that all
      Award
      Agreements comply with the terms of the Plan.

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    (b) Purchase
      Price.
      To the
      extent the purchase price of any Award granted hereunder is less than par value
      of a share of Common Stock and such purchase price is not permitted by
      applicable law, the per share purchase price shall be deemed to be equal to
      the
      par value of a share of Common Stock.

     

    (c) Dividends
      and Dividend Equivalents.
      Except
      as
      provided by the Committee in its sole and absolute discretion or as otherwise
      provided in this Plan, a Participant shall not be entitled to receive, currently
      or on a deferred basis, cash or stock dividends, Dividend Equivalents, or cash
      payments in amounts equivalent to cash or stock dividends on shares of Commons
      Stock covered by an Award which has not vested or an Option.
      The
      Committee in its absolute and sole discretion may credit a Participant's Award
      with Dividend Equivalents with respect to any Awards. To the extent that
      dividends and distributions relating to an Award are held in escrow by the
      Company, or Dividend Equivalents are credited to an Award, a Participant shall
      not be entitled to any interest on any such amounts. 

     

    (d) Deferral
      of Awards.
      The
      Committee may from time to time establish procedures pursuant to which a
      Participant may elect to defer, until a time or times later than the vesting
      of
      an Award, receipt of all or a portion of the shares of Common Stock or cash
      subject to such Award and to receive Common Stock or cash at such later time
      or
      times, all on such terms and conditions as the Committee shall determine. The
      Committee shall not permit the deferral of an Award unless
      counsel for Solitron determines that such action will not result in adverse
      tax
      consequences to a Participant under Section 409A of the Code.
      If any
      such deferrals are permitted, then notwithstanding anything to the contrary
      herein, a Participant who elects to defer receipt of Common Stock shall not
      have
      any rights as a shareholder with respect to deferred shares of Common Stock
      unless and until shares of Common Stock are actually delivered to the
      Participant with respect thereto, except to the extent otherwise determined
      by
      the Committee.

     

    (e) Prospective
      Employees.
      Notwithstanding anything to the contrary, any Award granted to a Prospective
      Employee shall
      not
      become vested prior to the date the Prospective Employee first becomes an
      employee of the Company.

     

    (f) Issuance
      of Certificates; Shareholder's Rights.
      Solitron
      shall
      deliver to the Participant a certificate evidencing the Participant's ownership
      of shares of Common Stock issued pursuant to the exercise of an Award as soon
      as
      administratively practicable after satisfaction of all conditions relating
      to
      the issuance of such shares. A Participant shall not have any of the rights
      of a
      shareholder with respect to such Common Stock prior to satisfaction of all
      conditions relating to the issuance of such Common Stock, and, except as
      expressly provided in the Plan, no adjustment shall be made for dividends,
      distributions or other rights of any kind for which the record date is prior
      to
      the date on which all such conditions have been satisfied. 

     

    (g) Transferability
      of Awards.
      A
      Participant may not Transfer an Award other than by will or the laws of descent
      and distribution. Awards may be exercised during the Participant's lifetime
      only
      by the Participant. No Award shall be liable for or subject to the debts,
      contracts, or liabilities of any Participant, nor shall any Award be subject
      to
      legal process or attachment for or against such person. Any purported Transfer
      of an Award in contravention of the provisions of the Plan shall have no force
      or effect and shall be null and void, and the purported transferee of such
      Award
      shall not acquire any rights with respect to such Award. Notwithstanding
      anything to the contrary, the Committee may in its sole and absolute discretion
      permit the Transfer of an Award to a Participant's "family member" as such
      term
      is defined in the Form S-8 Registration Statement under the Securities Act
      of
      1933, as amended, under such terms and conditions as specified by the Committee.
      In such case, such Award shall be exercisable only by the transferee approved
      of
      by the Committee. 

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (h) Buyout
      and Settlement Provisions.
      Except
      as otherwise prohibited in the Plan, the Committee may at any time on behalf
      of
Solitron
      offer
      to
      buy out any Awards previously granted based on such terms and conditions as
      the
      Committee shall determine which shall be communicated to the Participants at
      the
      time such offer is made.

     

    (i) Use
      of
      Proceeds.
      The
      proceeds received by Solitron
      from
      the
      issuance of Common Stock pursuant to Awards granted under the Plan shall
      constitute general funds of Solitron.

     

    (j) Modification
      or Substitution of an Award.
      Subject
      to the terms and conditions of the Plan, the Committee may modify outstanding
      Awards. Notwithstanding the following, no modification of an Award shall
      adversely affect any rights or obligations of the Participant under the
      applicable Award Agreement without the Participant's consent. The Committee
      in
      its sole and absolute discretion may rescind, modify, or waive any vesting
      requirements or other conditions applicable to an Award. 

     

    (k) Amendment
      and Termination of Plan.
      The
      Board may, at any time and from time to time, amend, suspend or terminate the
      Plan as to any shares of Common Stock as to which Awards have not been granted.
      Except as otherwise provided for in the Plan, no amendment, suspension or
      termination of the Plan shall, without the consent of the holder of an Award,
      alter or impair rights or obligations under any Award theretofore granted under
      the Plan. Awards granted prior to the termination of the Plan may extend beyond
      the date the Plan is terminated and shall continue subject to the terms of
      the
      Plan as in effect on the date the Plan is terminated 

     

    (l) Section
      409A of the Code.
      With
      respect to Awards subject to Section 409A of the Code, this Plan is intended
      to
      comply with the requirements of such Section, and the provisions hereof shall
      be
      interpreted in a manner that satisfies the requirements of such Section and
      the
      related regulations, and the Plan shall be operated accordingly. If any
      provision of this Plan or any term or condition of any Award would otherwise
      frustrate or conflict with this intent, the provision, term or condition will
      be
      interpreted and deemed amended so as to avoid this conflict.

     

    (m) Notification
      of 83(b) Election.
      If in
      connection with the grant of any Award any Participant makes an election
      permitted under Code Section 83(b), such Participant must notify the Company
      in
      writing of such election within ten (10) days of filing such election with
      the
      Internal Revenue Service.

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (n) Detrimental
      Activity.
      All
      Awards shall be subject to cancellation by the Committee in accordance with
      the
      terms of this Section 13(n) if the Participant engages in any Detrimental
      Activity. To the extent that a Participant engages in any Detrimental Activity
      at any time prior to, or during the one year period after, any exercise or
      vesting of an Award but prior to a Change in Control, the Company shall, upon
      the recommendation of the Committee, in its sole and absolute discretion, be
      entitled to (i) immediately terminate and cancel any Awards held by the
      Participant that have not yet been exercised, and/or (ii) with respect to Awards
      of the Participant that have been previously exercised, recover from the
      Participant at any time within two (2) years after such exercise but prior
      to a
      Change in Control (and the Participant shall be obligated to pay over to the
      Company with respect to any such Award previously held by such Participant):
      (A)
      with respect to any Options exercised, an amount equal to the excess of the
      Fair
      Market Value of the Common Stock for which any Option was exercised over the
      Exercise Price paid (regardless of the form by which payment was made) with
      respect to such Option; (B) with respect to any Award other than an Option,
      any
      shares of Common Stock granted and vested pursuant to such Award, and if such
      shares are not still owned by the Participant, the Fair Market Value of such
      shares on the date they were issued, or if later, the date all vesting
      restrictions were satisfied; and (C) any cash or other property (other than
      Common Stock) received by the Participant from the Company pursuant to an Award.
      Without limiting the generality of the foregoing, in the event that a
      Participant engages in any Detrimental Activity at any time prior to any
      exercise of an Award and the Company exercises its remedies pursuant to this
      Section 13(n) following the exercise of such Award, such exercise shall be
      treated as having been null and void, provided that the Company will
      nevertheless be entitled to recover the amounts referenced above.

     

    (o)
      Disclaimer
      of Rights.
      No
      provision in the Plan, any Award granted or any Award Agreement entered into
      pursuant to the Plan shall be construed to confer upon any individual the right
      to remain in the employ of or other service with the Company or to interfere
      in
      any way with the right and authority of the Company either to increase or
      decrease the compensation of any individual, including any holder of an Award,
      at any time, or to terminate any employment or other relationship between any
      individual and the Company. The grant of an Award pursuant to the Plan shall
      not
      affect or limit in any way the right or power of the Company to make
      adjustments, reclassifications, reorganizations or changes of its capital or
      business structure or to merge, consolidate, dissolve or liquidate, or to sell
      or transfer all or any part of its business or assets. 

     

    (p)
      Unfunded
      Status of Plan.
      The
      Plan is intended to constitute an "unfunded" plan for incentive and deferred
      compensation. With respect to any payments as to which a Participant has a
      fixed
      and vested interest but which are not yet made to such Participant by the
      Company, nothing contained herein shall give any such Participant any rights
      that are greater than those of a general creditor of the Company.

     

    (q) Nonexclusivity
      of Plan.
      The
      adoption of the Plan shall not be construed as creating any limitations upon
      the
      right and authority of the Board to adopt such other incentive compensation
      arrangements (which arrangements may be applicable either generally to a class
      or classes of individuals or specifically to a particular individual or
      individuals) as the Board in its discretion determines desirable.

     

    (r) Other
      Benefits.
      No
      Award payment under the Plan shall be deemed compensation for purposes of
      computing benefits under any retirement plan of the Company or any agreement
      between a Participant and the Company, nor affect any benefits under any other
      benefit plan of the Company now or subsequently in effect under which benefits
      are based upon a Participant's level of compensation. 

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (s)
      Headings.
      The
      section headings in the Plan are for convenience only; they form no part of
      this
      Agreement and shall not affect its interpretation.

     

    (t)
      Pronouns.
      The use
      of any gender in the Plan shall be deemed to include all genders, and the use
      of
      the singular shall be deemed to include the plural and vice versa, wherever
      it
      appears appropriate from the context. 

     

    (u)
      Successors
      and Assigns.
      The
      Plan shall be binding on all successors of the Company and all successors and
      permitted assigns of a Participant, including, but not limited to, a
      Participant's estate, devisee, or heir at law.

     

    (v)
      Severability.
      If any
      provision of the Plan or any Award Agreement shall be determined to be illegal
      or unenforceable by any court of law in any jurisdiction, the remaining
      provisions hereof and thereof shall be severable and enforceable in accordance
      with their terms, and all provisions shall remain enforceable in any other
      jurisdiction.

     

    (w)
      Notices.
      Any
      communication or notice required or permitted to be given under the Plan shall
      be in writing, and mailed by registered or certified mail or delivered by hand,
      to Solitron,
      to its
      principal place of business, attention: Shevach Saraf, Chief Executive Officer
      and if to the holder of an Award, to the address as appearing on the records
      of
      the Company.

     

     

     

     

    
      
         

      

      
        18Exhibit
      10.1

     

    March
      19,
      2007

     

    

    Mr.
      Larry
      Roesel

    3143
      White Eagle Drive

    Naperville,
      IL 60564

    

    Dear
      Larry:

    

    On
      behalf
      of AutoZone, I am delighted to offer to you the position of Senior Vice
      President, Commercial, subject to Board approval (anticipated to be March 21,
      2007), reporting directly to me. This position is a member of the Executive
      Committee.

    

    Our
      offer
      includes a base salary of $350,000 per annum plus an annual bonus target of
      60%
      of your base salary. You will be eligible for a performance and salary review
      at
      the end of Fiscal 2007. We will guarantee your Fiscal 2007 Bonus at a minimum
      100% payout, prorated for your time in position for Fiscal 2007. Actual bonus
      awards for Fiscal 2007 will be determined by the achievement of pre-defined
      Company and Business Unit objectives. Bonus can therefore be less than target,
      but can also exceed targets based on above-plan performance. 

    

    AutoZone
      will provide a gross sign-on bonus of $25,000, payable 1/2 up front and 1/2
      after one year of service. Tax withholding and other reasonable and customary
      deductions will be deducted from the $25,000 gross payment. 

    

    Subject
      to the approval of the Compensation Committee of the Board of Directors of
      AutoZone, Inc., you will receive an initial AutoZone, Inc. common stock option
      grant of 20,000 non-qualified stock options, which will be granted in accordance
      with the AutoZone, Inc. 2006 Stock Option Plan. These options will be presented
      to the Compensation Committee for consideration at or before the next meeting
      of
      the Compensation Committee which occurs after your start date. Thereafter,
      on an
      annual basis, beginning on or around October 2007, subsequent grants will be
      determined by pre-defined performance achievements and the established annual
      range of options. All stock option grants are made by the Compensation Committee
      of the Board of Directors of AutoZone. Notwithstanding, any and all Stock Option
      Plans and future grants are subject to change or may be discontinued at any
      time.

    

    Our
      offer
      of employment also includes relocation support, outlined in the Relocation
      Policy you will receive. This includes coverage for the home sale and purchase
      transaction costs, personal goods shipment, and suitable temporary housing.
      The
      cap for eligibility for the home sale program will be a home sale value not
      to
      exceed $750,000. We will also include a one-time miscellaneous gross payment
      of
      $10,000, as noted in the relocation policy (minus tax withholding and other
      customary deductions).

    

    You
      will
      be eligible to participate in AutoZone's full group benefit programs, which
      currently include medical, dental, vision, life and 401(k) program (subject
      to
      the terms and conditions of each program). There is also a company paid
      Executive Disability Plan to include short-term and long-term
      disability.

    

    As
      a
      Senior Vice President, you are eligible to participate in our Executive Medical
      Health Plan and the Executive Stock Purchase Plan. You are also eligible for
      four weeks of vacation. These benefits are granted and reviewed on an annual
      basis. All benefits are subject to review and may change from time to time.
      

    

    Notwithstanding,
      your employment will be “at will” and terminable at any time. 

    

    Larry,
      the entire Executive Committee and the Board are enthusiastic about you joining
      our team. I am personally looking forward to your positive response and to
      working with you for many years to come. Please feel free to call me or Tim
      Briggs if you have any questions.

    

    Sincerely,

    

    

    /s/
      Bob

    Bob
      Olsen

    Executive
      Vice President

    Store
      Operations, Commercial, and Mexico

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