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<SEC-DOCUMENT>0000950124-01-503109.txt : 20010905
<SEC-HEADER>0000950124-01-503109.hdr.sgml : 20010905
ACCESSION NUMBER:		0000950124-01-503109
CONFORMED SUBMISSION TYPE:	10-K405
PUBLIC DOCUMENT COUNT:		7
CONFORMED PERIOD OF REPORT:	20010701
FILED AS OF DATE:		20010904

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			STRATTEC SECURITY CORP
		CENTRAL INDEX KEY:			0000933034
		STANDARD INDUSTRIAL CLASSIFICATION:	MOTOR VEHICLE PARTS & ACCESSORIES [3714]
		IRS NUMBER:				391804239
		STATE OF INCORPORATION:			WI
		FISCAL YEAR END:			0627

	FILING VALUES:
		FORM TYPE:		10-K405
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-25150
		FILM NUMBER:		1730230

	BUSINESS ADDRESS:	
		STREET 1:		3333 WEST GOOD HOPE ROAD
		CITY:			MILWAUKEE
		STATE:			WI
		ZIP:			53209
		BUSINESS PHONE:		4142473333

	MAIL ADDRESS:	
		STREET 1:		3333 W GOOD HOPE ROAD
		CITY:			MILWAUKEE
		STATE:			WI
		ZIP:			53209
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K405
<SEQUENCE>1
<FILENAME>c64800e10-k405.txt
<DESCRIPTION>FORM 10-K PURSUANT TO ITEM 405
<TEXT>
<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K


[X]      Annual report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 For the fiscal year ended July 1, 2001.

[ ]      Transition report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

                         Commission File Number 0-25150

                          STRATTEC SECURITY CORPORATION
                          -----------------------------
             (Exact name of registrant as specified in its charter)
<TABLE>
<S>                                                                             <C>
                WISCONSIN                                                                    39-1804239
                ---------                                                                    ----------
         (State of Incorporation)                                               (I.R.S. Employer Identification No.)
</TABLE>

                  3333 WEST GOOD HOPE ROAD, MILWAUKEE, WI 53209
                  ---------------------------------------------
                    (Address of principal executive offices)

                                 (414) 247-3333
                                 --------------
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<S>                                                                             <C>
           Title of each class                                                   Name of exchange on which registered
           -------------------                                                   ------------------------------------
                   N/A                                                                           N/A
</TABLE>
           Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $.01 par value
                          ----------------------------
                                (Title of Class)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X]Yes [ ]No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment of this Form 10-K.    [X]

The aggregate market value of the voting Common Stock held by non-affiliates of
the registrant as of August 21, 2001 was approximately $140,920,000 (based upon
the last reported sale price of the Common Stock at August 21, 2001 on the
NASDAQ National Market). On August 21, 2001, there were outstanding 4,100,463
shares of $.01 par value Common Stock.

                       Documents Incorporated by Reference
<TABLE>
<CAPTION>
                                                                                        Part of the Form 10-K
         Document                                                                       into which incorporated
         --------                                                                       -----------------------
<S>                                                                                     <C>
Portions of the Annual Report to Shareholders for the
fiscal year ended July 1, 2001.                                                                I, II, IV

Portions of the Proxy Statement dated September 7, 2001, for the
Annual Meeting of Shareholders to be held on October 23, 2001.                                    III
</TABLE>
<PAGE>   2
                                     PART I

ITEM 1. BUSINESS

         The information set forth under "Company Description" which appears on
pages 4 through 8 of the Company's 2001 Annual Report to Shareholders is
incorporated herein by reference. For information as to export sales, see the
information set forth under "Export Sales" included on page 21 of the Company's
2001 Annual Report to Shareholders, which is incorporated herein by reference.

EMERGING TECHNOLOGIES

         Automotive vehicle access systems, which are both theft deterrent and
end user friendly, are being developed as mechanical-electrical devices.
Electronic companies are developing user identification systems such as
bio-systems, card holder (transmitter) systems, etc., while locks and door
latches are metamorphosing to accommodate the electronics. This will result in
more secure vehicles and eventually passive entry and passive start.

         Vehicle access modules that pre-assemble and pre-test individual
components allow assembly cost reductions at the Original Equipment Manufacturer
and the potential for the introduction of different components.

         Innovations in coatings, which could potentially eliminate the need for
grease and innovative product redesign with different materials, offer potential
cost reductions for manufacturing and original equipment manufacturers.

         These technologies benefit the Company by increasing the potential
customer base as a tier 2 supplier while attaining tier 1 status on some product
lines and adding additional product line availability.

SOURCES AND AVAILABILITY OF RAW MATERIALS

         The primary raw materials used by the Company are high-grade zinc and
brass. These materials are generally available from a number of suppliers, but
the Company has chosen to concentrate its sourcing with one primary vendor for
each commodity. The Company believes its sources for raw materials are very
reliable and adequate for its needs. The Company has not experienced any
significant long term supply problems in its operations and does not anticipate
any significant supply problems in the foreseeable future.

PATENTS, TRADEMARKS AND OTHER INTELLECTUAL PROPERTY

         The Company believes that the success of its business will not only
result from the technical competence, creativity and marketing abilities of its
employees but also from the protection of its intellectual property through
patents, trademarks and copyrights. As part of its ongoing research, development
and manufacturing activities, the Company has a policy of seeking patents on new
products, processes and improvements when appropriate. The Company owns 25
issued United States patents, with expirations occurring between 2010 and 2019.

         Although, in the aggregate, the patents discussed above are of
considerable importance to the manufacturing and marketing of many of its
products, the Company does not consider any single patent or trademark or group
of patents or trademarks to be material to its business as a whole, except for
the STRATTEC and STRATTEC with logo trademarks.

         The Company also relies upon trade secret protection for its
confidential and proprietary information. The Company maintains confidentiality
agreements with its key executives. In addition, the Company enters into
confidentiality agreements with selected suppliers, consultants and associates
as appropriate to evaluate new products or business relationships pertinent to
the success of the Company. However, there can be no assurance that others will
not independently obtain similar information and techniques or otherwise gain
access to the Company's trade secrets or that the Company can effectively
protect its trade secrets.




                                       2
<PAGE>   3
DEPENDENCE UPON SIGNIFICANT CUSTOMERS

         A very significant portion of the Company's annual sales are to General
Motors Corporation, Delphi Automotive Corporation, Ford Motor Company, and
DaimlerChrysler Corporation. These four customers accounted for approximately
85% of the Company's total net sales in each fiscal year 1999 through 2001.
Further information regarding sales to the Company's largest customers is set
forth under "Sales to Largest Customers" included on page 21 of the Company's
2001 Annual Report to Shareholders, which is incorporated herein by reference.

         The products sold to these customers are model specific, fitting only
certain defined applications. Consequently, the Company is highly dependent on
its major customers for their business, and on these customers' ability to
produce and sell vehicles which utilize the Company's products. The Company has
enjoyed relationships with General Motors Corporation, DaimlerChrysler
Corporation, Ford Motor Company, and Delphi Automotive Corporation in the past,
and expects to do so in the future. However, a significant change in the
purchasing practices of, or a significant loss of volume from, one or more of
these customers could have a detrimental effect on the Company's financial
performance.

SALES AND MARKETING

         The Company provides its customers with engineered locksets, which are
unique to specific vehicles. Any given vehicle will typically take 1 to 3 years
of development and engineering design time prior to being offered to the public.
The locksets are designed concurrently with the vehicle. Therefore, commitment
to the Company as the production source occurs 1 to 3 years prior to the start
of production.

         The typical process used by automotive manufacturers in selecting a
lock supplier is to offer the business opportunity to the Company and various of
the Company's competitors. Each competitor will pursue the opportunity, doing
its best to provide the customer with the most attractive proposal. Price
pressure is strong during this process but once an agreement is reached, the
price is fixed for each year of the product program. Typically, price reductions
resulting from productivity improvement by the Company are included in the
contract and are estimated in evaluating each of these opportunities by the
Company. A blanket purchase order, a contract indicating a specified part will
be supplied at a specified price during a defined time period, is issued by
customers for each model year and releases, quantity commitments, are made to
that purchase order for weekly deliveries to the customer. As a consequence and
because the Company is a "Just-in-Time" supplier to the automotive industry, it
does not maintain a backlog of orders in the classic sense for future production
and shipment.

COMPETITION

         The Company competes with domestic and foreign-based competitors on the
basis of custom product design, engineering support, quality, delivery and
price. While the number of direct competitors is currently relatively small, the
auto manufacturers actively encourage competition between potential suppliers.
Although the Company may not be the lowest cost producer, it has a dominant
share of the North American market because of its ability to provide a
beneficial combination of price, quality and technical support. In order to
reduce lockset production costs while still offering a wide range of technical
support, the Company utilizes assembly operations in Mexico, which results in
lower assembly labor costs as compared to the United States.

         As locks become more sophisticated and involve additional electronics,
competitors with specific electronic expertise may emerge to challenge the
Company.

RESEARCH AND DEVELOPMENT

         The Company engages in research and development activities pertinent to
automotive access control. A major area of focus for research is the expanding
role of vehicle access via electronic interlocks and modes of communicating
authorization data between consumers and vehicles. Development activities
include new products, applications and product performance improvement. In
addition, specialized data collection equipment is developed to facilitate
increased product development efficiency and continuous quality improvements.
For fiscal years 2001, 2000, and 1999, the Company spent $2,030,000, $2,306,000,
and $2,383,000, respectively, on research and development. The Company believes
that, historically, it has committed sufficient resources to research and
development and anticipates increasing such expenditures in the future as
required to support additional product programs associated with both existing
and new customers. Patents are pursued and will continue to be pursued as
appropriate to protect the Company's interests resulting from these activities.




                                       3
<PAGE>   4
CUSTOMER TOOLING

         An important aspect of the Company's production processes is customer
program specific assembly lines and production tooling. In general, capital
equipment acquired by the Company for customer product programs is recognized as
a long-term asset and depreciated. Ownership of tooling for these same programs
is determined through negotiations with the customer. For products in which the
customer maintains ownership of the tooling, costs are accumulated as a current
asset on the Company's balance sheet and rebilled to the customer upon formal
product approval from the customer. Recovery of tooling costs for which the
Company retains ownership occurs over the life of the program through the piece
price. See Notes to Consolidated Financial Statements included in the Company's
2001 Annual Report to Shareholders, which is incorporated herein by reference.

ENVIRONMENTAL COMPLIANCE

         As is the case with other manufacturers, the Company is subject to
federal, state, local and foreign laws and other legal requirements relating to
the generation, storage, transport, treatment and disposal of materials as a
result of its lock and key manufacturing and assembly operations. These laws
include the Resource Conservation and Recovery Act (as amended), the Clean Air
Act (as amended), the Clean Water Act of 1990 (as amended) and the Comprehensive
Environmental Response, Compensation and Liability Act (as amended). The Company
believes that its existing environmental management policies and procedures are
adequate and it has no current plans for substantial capital expenditures in the
environmental area.

         Contamination existing at the Company's Milwaukee site from an
underground waste coolant storage tank and a former above-ground solvent storage
tank, located on the east side of the facility, will be remediated in accordance
with federal, state and local requirements.

         The Company does not currently anticipate any materially adverse impact
on its results of operations, financial condition or competitive position as a
result of compliance with federal, state, local and foreign environmental laws
or other legal requirements. However, risk of environmental liability and
charges associated with maintaining compliance with environmental laws is
inherent in the nature of the Company's business and there is no assurance that
material liabilities or charges could not arise.

EMPLOYEES

         At July 1, 2001, the Company had approximately 2,760 full-time
employees, of which approximately 475 or 17% percent were represented by a labor
union. During June 2001, there was a 16-day strike by the represented employees
at the Company's Milwaukee facility. Further information regarding the strike is
discussed under "Management's Discussion and Analysis" which appears on pages 10
through 12 of the Company's Annual Report to Shareholders, which is incorporated
herein by reference.

ITEM 2. PROPERTIES

         The Company has two manufacturing plants, one warehouse, and a sales
office. These facilities are described as follows:

<TABLE>
<CAPTION>
          LOCATION                                          TYPE                            SQ. FT.  OWNED OR LEASED
          --------                                          ----                            -------  ---------------
<S>                            <C>                                                          <C>      <C>
Milwaukee, Wisconsin           Headquarters and General Offices; Component
                               Manufacturing , Assembly and Service Parts Distribution..    352,000      Owned
Juarez, Chihuahua Mexico       Subsidiary Offices and Assembly..........................     97,000      Owned
El Paso, Texas                 Finished Goods Warehouse.................................     22,800      Leased**
Troy, Michigan                 Sales and Engineering  Office for Detroit Area...........      3,000      Leased**
</TABLE>
- -----------
** Leased unit within a complex.

The Company believes that both of its production facilities are adequate for the
foreseeable future as they relate to the Company's current products. As the
Company evaluates and expands into other products, consideration of further
production facilities will be necessary.




                                       4
<PAGE>   5
ITEM 3. LEGAL PROCEEDINGS

         In the normal course of business the Company may be involved in various
legal proceedings from time to time. The Company does not believe it is
currently involved in any claim or action the ultimate disposition of which
would have a material adverse effect on the Company or its financial condition.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         There were no matters submitted to a vote of shareholders during the
fourth quarter of fiscal 2001.

EXECUTIVE OFFICERS OF REGISTRANT

The names, ages and positions of all executive officers of the Company as of the
date of this filing are listed below, together with their business experience
during the past five years. Executive officers are appointed annually by the
Board of Directors at the meeting of directors immediately following the annual
meeting of shareholders. There are no family relationships among any of the
executive officers of the Company, nor any arrangements or understanding between
any such officer and another person pursuant to which he was appointed as an
executive officer.
<TABLE>
<CAPTION>
NAME AND AGE                    POSITION AND BUSINESS EXPERIENCE
- ------------                    --------------------------------
<S>                             <C>
Harold M. Stratton II, 53       Chairman and Chief Executive Officer of the Company since 1999. President and Chief Executive
                                Officer of the Company 1995 to 1999. Vice President of Briggs & Stratton Corporation and General
                                Manager of the Technologies Division of Briggs & Stratton Corporation from 1989 to 1995.

John G. Cahill, 44              President and Chief Operating Officer of the Company since 1999. Executive Vice President, Chief
                                Financial Officer, Treasurer and Secretary of the Company 1994 to 1999. Vice President, Chief
                                Financial Officer, Secretary and Treasurer, Johnson Worldwide Associates, Inc. (manufacturer and
                                marketer of recreational and marking systems products) 1992 to 1994 and Corporate Controller from
                                1989 to 1992.

Michael R. Elliott, 45          Vice President - Global Market Development since 1999. Vice President - Sales and Marketing of the
                                Company 1995 to 1999. Vice President - Marketing and Sales of the Technologies Division from 1993 to
                                1995. Vice President - Corporate Development of Iverness Casting Group (a producer of castings and
                                injection molded products) from 1991 to 1992. Vice President - Sales and Marketing of Iverness
                                Casting Group from 1990 to 1991. Sales, Marketing and Planning Manager of the AC Rochester Division
                                of General Motors Corporation (an automotive manufacturer) from 1988 to 1990.

Patrick J. Hansen, 42           Vice President, Chief Financial Officer, Secretary and Treasurer of the Company since 1999.
                                Corporate Controller of the Company 1995 to 1999. Controller, Schwarz Pharma (manufacturer and
                                distributor of pharmaceutical drugs) 1993 to 1995. Corporate Controller, ASAA Inc. (manufacturer of
                                automotive parts) 1989 to 1993.

Donald J. Harrod, 57            Vice President - Engineering of the Company since 1998. Product Engineering Manager,
                                Mertior/Rockwell (manufacturer of automotive parts) 1997 to 1998. Vice President - Engineering,
                                Coltec Farnem Holley (manufacturer of automotive parts) 1986 to 1997.

Donald P. Klick, 49             Vice President - Business Operations of the Company since 1999. Vice President - Engineering, Erie
                                Controls (manufacturer of HVAC control components) 1998 to 1999. Engineering Program Director, Tower
                                Automotive/A.O. Smith (manufacturer of automotive parts) 1994 to 1998.

Gerald L. Peebles, 58           Vice President and General Manager of STRATTEC de Mexico - since 1997. Vice President - Operations
                                of the Company 1995 - 1997. Vice President - Operations of the Technologies Division from 1994 to
                                1995. Operations Manager - Juarez Plant of the Technologies Division from 1990 to 1994. Plant
                                Manager - Juarez Plant of the Technologies Division from 1988 to 1990.

</TABLE>

                                       5
<PAGE>   6
                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The information set forth in the "Quarterly Financial Data" section
appearing on page 23 of the Company's 2001 Annual Report to Shareholders is
incorporated herein by reference.

         The Company does not intend to pay cash dividends on the Company Common
Stock in the foreseeable future; rather, it is currently anticipated that
Company earnings will be retained for use in its business. The future payment of
dividends will depend on business decisions that will be made by the Board of
Directors from time to time based on the results of operations and financial
condition of the Company and such other business considerations as the Board of
Directors considers relevant. The Company's revolving credit agreement contains
restrictions on the payment of dividends. See Notes to Consolidated Financial
Statements included in the Company's 2001 Annual Report to Shareholders, which
is incorporated herein by reference.

ITEM 6. SELECTED FINANCIAL DATA

         The information set forth under "Five Year Financial Summary" which
appears on page 23 of the Company's 2001 Annual Report to Shareholders is
incorporated herein by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION

         The information set forth under "Management's Discussion and Analysis"
which appears on pages 10 through 12 of the Company's 2001 Annual Report to
Shareholders is incorporated herein by reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company did not hold any market risk sensitive instruments during
the period covered by this report.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The financial statements, together with the report thereon of Arthur
Andersen LLP dated July 30, 2001, which appear on pages 13 through 23 of the
Company's 2001 Annual Report to Shareholders, are incorporated herein by
reference.

         The Quarterly Financial Data (unaudited) which appears on page 23 of
the Company's 2001 Annual Report to Shareholders is incorporated herein by
reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

         None

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The information on pages 2 through 8 of the Company's Proxy Statement,
dated September 7, 2001, under "Election of Directors" and "Section 16(a)
Beneficial Ownership Reporting Compliance" is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

         The information on pages 8 through 16 of the Company's Proxy Statement,
dated September 7, 2001, under "Executive Compensation" and "Compensation of
Directors" is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information on pages 6 through 8 of the Company's Proxy Statement,
dated September 7, 2001, under "Security Ownership" is incorporated herein by
reference.



                                       6
<PAGE>   7
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information on pages 8 through 16 of the Company's Proxy Statement,
date d September 7, 2001, under "Executive Compensation" is incorporated herein
by reference.


                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

         (a)  Documents Filed as part of this Report

              (1) Financial Statements - The following financial statements of
                  the Company, included on pages 13 through 22 of the Company's
                  2001 Annual Report to Shareholders, are incorporated by
                  reference in Item 8.

                  Report of Independent Public Accountants

                  Balance Sheets - as of July 1, 2001 and July 2, 2000

                  Statements of Income - years ended July 1, 2001, July 2, 2000
                  and June 27, 1999

                  Statements of Changes in Equity - years ended July 1, 2001,
                  July 2, 2000 and June 27, 1999

                  Statements of Cash Flows - years ended July 1, 2001, July 2,
                  2000 and June 27, 1999

                  Notes to Financial Statements

                  (2)      Financial Statement Schedules
<TABLE>
<CAPTION>
                                                                                  Page in this
                                                                                Form 10-K Report
                                                                                ----------------
<S>                                                                             <C>
                  Report of Independent Public Accountants                              8
                  Schedule II - Valuation and Qualifying Accounts                       9
</TABLE>
                  All other schedules have been omitted because they are not
              applicable or are not required, or because the required
              information has been included in the Financial Statements or Notes
              thereto.

              (3) Exhibits.  See "Exhibit Index" beginning on page 11.

         (b)  Reports on Form 8-K

              No reports on Form 8-K were filed by the Company during the
         fourth quarter of fiscal 2001.













                                       7
<PAGE>   8
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


We have audited in accordance with generally accepted auditing standards the
consolidated financial statements included in the STRATTEC SECURITY CORPORATION
Annual Report to Shareholders incorporated by reference in this Form 10-K and
have issued our report thereon dated July 30, 2001. Our audit was made for the
purpose of forming an opinion on those statements taken as a whole. The schedule
listed in the accompanying index is the responsibility of the Company's
management and is presented for purposes of complying with the Securities and
Exchange Commission's rules and is not part of the basic consolidated financial
statements. This schedule has been subjected to the auditing procedures applied
in the audit of the basic consolidated financial statements and, in our opinion,
fairly states in all material respects the financial data required to be set
forth therein in relation to the basic consolidated financial statements taken
as a whole.




ARTHUR ANDERSEN LLP


Milwaukee, Wisconsin,
July 30, 2001.





















                                       8
<PAGE>   9
                                   SCHEDULE II
                        VALUATION AND QUALIFYING ACCOUNTS
                             (THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
                                               Balance,        Provision         Payments       Balance,
                                              Beginning        Charged to      and Accounts      End of
                                               of Year        Profit & Loss     Written Off       Year
                                               -------        -------------     -----------       ----
<S>                                          <C>              <C>              <C>             <C>
Year ended July 1, 2001
Allowance for doubtful accounts                 $250               $61              $61            $250
                                                ====               ===              ===            ====



Year ended July 2, 2000
Allowance for doubtful accounts                 $250               $43              $43            $250
                                                ====               ===              ===            ====



Year ended June 27, 1999
Allowance for doubtful accounts                 $250                $33              $33          $250
                                                ====                ===              ===          ====
</TABLE>




















                                       9
<PAGE>   10
                                   SIGNATURES



         Pursuant to the requirements of Section 13 of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.



                                        STRATTEC SECURITY CORPORATION

                                        By: /s/ Harold M. Stratton II
                                            ----------------------------
                                            Harold M. Stratton II,
                                            Chairman and Chief Executive Officer

Date:  August 21, 2001

         Pursuant to the requirement of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
            Signature                                       Title                           Date
            ---------                                       -----                           ----
<S>                                             <C>                               <C>
/s/ Harold M. Stratton II                          Chairman, Chief Executive            August 21, 2001
- -------------------------------                      Officer, and Director
     Harold M. Stratton II


/s/ John G. Cahill                                 President, Chief Operating           August 21, 2001
- -------------------------------                       Officer and Director
       John G. Cahill


/s/ Frank J. Krejci                                         Director                    August 21, 2001
- -------------------------------
       Frank J. Krejci


/s/ Michael J. Koss                                         Director                    August 21, 2001
- -------------------------------
        Michael J. Koss


/s/ Robert Feitler                                          Director                    August 21, 2001
- -------------------------------
         Robert Feitler


/s/ Patrick J. Hansen                                 Vice President, Chief             August 21, 2001
- -------------------------------                         Financial Officer,
       Patrick J. Hansen                             Secretary and Treasurer
                                                    (Principal Financial and
                                                       Accounting Officer)
</TABLE>





                                       10
<PAGE>   11
                         EXHIBIT INDEX TO ANNUAL REPORT
                                  ON FORM 10-K
<TABLE>
<CAPTION>
                                                                                                    Page Number in
                                                                                                 Sequential Numbering
                                                                                                 of all Form 10-K and
Exhibit                                                                                              Exhibit Pages
- -------                                                                                              -------------
<S>         <C>                                                                                  <C>
3.1 (2)     Amended and Restated Articles of Incorporation of the Company                                  *

3.2 (2)     By-laws of the Company                                                                         *

4.1 (2)     Rights Agreement between the Company and Firstar Trust Company, as Rights Agent                *

4.2 (3)     Revolving Credit Agreement dated as of February 27, 1995 by and between the Company            *
            and M&I Bank, together with Revolving Credit Note

4.3         Amendments to Revolving Credit Agreement dated as of February 27, 1995 by and                  21
            between the Company and M&I Bank, together with Revolving Credit Notes

10.1 (4)    STRATTEC SECURITY CORPORATION Stock Incentive Plan                                             *

10.2 (5)    Employment Agreements between the Company and the identified executive officers                41

10.3 (1)(5) Change In Agreement between the Company and the identified executive officers                  61

10.15       Amended STRATTEC SECURITY CORPORATION Economic Value Added Plan for                            91
            Executive Officers and Senior Managers

13.1        Annual Report to Shareholders for the year ended July 1, 2001                                 141

21 (1)      Subsidiaries of the Company                                                                    *

23          Consent of Independent Public Accountants dated September 4, 2001                             181
</TABLE>
- -----------------------

(1)  Incorporated by reference from Amendment No. 1 to the Form 10 filed on
     January 20, 1995.
(2)  Incorporated by reference from Amendment No. 2 to the Form 10 filed on
     February 6, 1995.
(3)  Incorporated by reference form the April 2, 1995 Form 10-Q filed on May 17,
     1995.
(4)  Incorporated by reference from the Proxy Statement for the 1997 Annual
     Meeting of Shareholders filed on September 10, 1997.
(5)  Incorporated by reference from the June 27, 1999 Form 10-K filed on
     September 17, 1999.










                                       11

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.3
<SEQUENCE>4
<FILENAME>c64800ex4-3.txt
<DESCRIPTION>AMENDMENTS TO REVOLVING CREDIT AGREEMENT
<TEXT>
<PAGE>   1
                                                                     EXHIBIT 4.3

                                 AMENDMENT NO. 1



         This is Amendment No. 1 to a Revolving Credit Agreement between
Strattec Security Corporation ("Company") and M&I Marshall & Ilsley Bank
("Bank") dated as of February 27, 1995, and subsequently amended, (the
"Agreement").

         The Agreement is amended as follows:

         1. Section 1. Definitions and Terms. The "Termination Date" definition
is amended in its entirety to read as follows:

                  "Termination Date" shall mean October 31, 1999, or such
                  earlier date on which the Obligations shall terminate as
                  provided in Section 7.2.

         2. Section 6.9. Tangible Net Worth. Subsection (iv) is added to this
Section as follows:
                  (iv) Minus any treasury stock.

         3. Exhibit B - Revolving Credit Note. Exhibit B to the Agreement is
amended in its entirety to provide as set forth in Exhibit B attached to this
Amendment. Any reference to Exhibit B throughout the Agreement shall mean
Exhibit B attached hereto.


         These are the only changes in the Agreement and all other terms and
conditions are hereby ratified and confirmed.


Dated:  as of March 28, 1997.

M&I Marshall & Ilsley Bank   (SEAL)        Strattec Security Corporation  (SEAL)



By:_____________________________           By:___________________________

Title:__________________________           Title:________________________


By:_____________________________           By:___________________________

Title:__________________________           Title:________________________


<PAGE>   2
                                 AMENDMENT NO. 2



         This is Amendment No. 2 to a Revolving Credit Agreement between
STRATTEC SECURITY CORPORATION ("Company") and M&I Marshall & Ilsley Bank
("Bank") dated as of February 27, 1995, and subsequently amended, (the
"Agreement").

         The Agreement is amended as follows:

         1. Section 1. Definitions and Terms. The "Termination Date" definition
is amended in its entirety to read as follows:

                  "Termination Date" shall mean October 31, 2000, or such
                  earlier date on which the Obligations shall terminate as
                  provided in Section 7.2.

         2. Exhibit B - Revolving Credit Note. Exhibit B to the Agreement is
amended in its entirety to provide as set forth in Exhibit B attached to this
Amendment. Any reference to Exhibit B throughout the Agreement shall mean
Exhibit B attached hereto.


         These are the only changes in the Agreement and all other terms and
conditions are hereby ratified and confirmed.


Dated:  as of November 25, 1997.

M&I Marshall & Ilsley Bank (SEAL)           Strattec Security Corporation (SEAL)


By:_____________________________            By:_____________________________

Title:__________________________            Title:__________________________


By:_____________________________            By:_____________________________

Title:__________________________            Title:__________________________





<PAGE>   3



                                 AMENDMENT NO. 3



         This is Amendment No. 3 to a Revolving Credit Agreement between
Strattec Security Corporation ("Company") and M&I Marshall & Ilsley Bank
("Bank") dated as of February 27, 1995, and subsequently amended, (the
"Agreement").

         The Agreement is amended as follows:

         1. Section 1. Definitions and Terms. The "Termination Date" definition
is amended in its entirety to read as follows:

            "Termination Date" shall mean the date the Revolving Credit Note is
due by maturity, or such earlier date on which the Obligations shall terminate
as provided in Section 7.2.

         2. Exhibit B - Revolving Credit Note. Exhibit B to the Agreement is
amended in its entirety to provide as set forth in Exhibit B attached to this
Amendment and any renewals, modifications or extensions thereof. Any reference
to Exhibit B throughout the Agreement shall mean Exhibit B attached hereto.


         These are the only additional changes in the Agreement and all other
terms and conditions are hereby ratified and confirmed.


Dated:  as of November 23, 1998.

M&I Marshall & Ilsley Bank (SEAL)           Strattec Security Corporation (SEAL)



By:_____________________________            By:_____________________________

Title:__________________________            Title:__________________________


By:_____________________________            By:_____________________________

Title:__________________________            Title:__________________________


<PAGE>   4



                                 AMENDMENT NO. 4



         This is Amendment No. 4 to a Revolving Credit Agreement between
Strattec Security Corporation ("Company") and M&I Marshall & Ilsley Bank
("Bank") dated as of February 27, 1995, and subsequently amended, (the
"Agreement").

         The Agreement is amended as follows:

         1. This section is amended and restated in its entirety to read as
         follows:


                                    RECITALS


                  The Company has requested that the Bank extend to it a credit
         not to exceed $20,000,000.00 evidenced by a Revolving Credit Note dated
         June 15, 2001; and $30,000,000.00 evidenced by a Revolving Credit Note
         dated June 15, 2001, and any renewals, extensions or modifications
         thereof. The Bank has agreed to extend credit to the Company upon all
         of the terms and conditions of this Agreement.

                  NOW, THEREFORE, in consideration of the premises and the
         mutual agreements contained herein, the receipt and sufficiency of
         which are hereby acknowledged, the parties hereto agree as follows:


         2. SECTION 1 DEFINITIONS AND TERMS. The "Revolving Loan Commitment"
         definition is amended and restated in its entirety to read as follows:

         "Revolving Loan Commitment" shall mean an aggregate principal amount
         not to exceed $50,000,000.00, or such lesser amount to which the
         Revolving Loan Commitment is reduced under Section 2.1(j).


         3. SECTION 5 AFFIRMATIVE COVENANTS. Subsection 5.9(f) is hereby added
         to the Agreement as follows:


         (f) Pay the Bank a 1/8 percent fee for any unused portion of a
         Revolving Credit Note dated June 15, 2001 in the amount of
         $20,000,000.00 commencing on June 15, 2001, until such maturity of said
         Note.






<PAGE>   5

         4.   SECTION 6 NEGATIVE COVENANTS. Subsection 6.10 is amended and
         restated in its entirety to read as follows:

         6.10 INDEBTEDNESS TO TANGIBLE NET WORTH. Permit the ratio of
         Indebtedness to Tangible Net Worth to exceed 2.00 to 1 at any time.

         These are the only additional changes in the Agreement and all other
terms and conditions are hereby ratified and confirmed.


Dated:  as of June 15, 2001.


M&I Marshall & Ilsley Bank (SEAL)           Strattec Security Corporation (SEAL)



By:_____________________________            By:_____________________________

Title:__________________________            Title:__________________________


By:_____________________________            By:_____________________________

Title:__________________________            Title:__________________________


<PAGE>   6


                              REVOLVING CREDIT NOTE


$30,000,000.00                                              MILWAUKEE, WISCONSIN

REVOLVING LOANS
DUE:  OCTOBER 31, 2001                                      JUNE 15, 2001

         FOR VALUE RECEIVED, STRATTEC SECURITY CORPORATION, a Wisconsin
corporation (the "Borrower"), promises to pay to the order of M&I MARSHALL &
ILSLEY BANK, a Wisconsin banking association (the "Bank") at M&I Marshall &
Ilsley Bank, Loan Services Department, 401 N. Executive Drive, Brookfield, WI
53005, or at such other place as the holder hereof may from time to time in
writing designate, in lawful money of the United States of America, the
principal sum of Thirty Million and 00/100ths Dollars ($30,000,000.00), or so
much thereof as has been advanced and remains outstanding pursuant to Section
2.1 of the Revolving Credit Agreement by and between the Borrower and the Bank
dated as of the date hereof (the "Loan Agreement"), together with accrued
interest and all other costs, charges and fees due thereunder.

         The undersigned further promises to pay interest on the unpaid
principal amount of each Revolving Loan (as such term is defined in the Loan
Agreement) as is outstanding under the Loan Agreement, payable at such rates and
at such times, as provided in the Loan Agreement. Subject to the provisions of
the Loan Agreement with respect to acceleration, prepayment or loan limitations,
all unpaid principal with respect to each Revolving Loan, together with accrued
interest and all other costs, charges and fees, shall be due and payable in full
on the Termination Date for this Note.

         This Note evidences indebtedness incurred under, and is entitled to the
benefits of, the Loan Agreement, together with all future amendments,
modifications, waivers, supplements and replacements thereof, to which Loan
Agreement reference is made for a statement of the terms and provisions under
which this Note may be paid prior to its due date or its due date accelerated.
This Note is pursuant to a Revolving Credit Agreement and reference is made
thereto for a statement of terms and provisions thereof.

         The Borrower hereby agrees to pay all costs of collection including
reasonable attorneys' fees and legal expenses in the event this Note is not paid
when due.

         This Note is issued in and shall be governed by the laws of the State
of Wisconsin.

         No delay or omission on the part of the holder in exercising any right
hereunder shall operate as a waiver of such right or of any other remedy under
this Note. A waiver on any one occasion shall not be construed as a waiver of
any such right or remedy on a future occasion.

         All makers, endorsers, sureties, guarantors and other accommodation
parties hereby waive presentment for payment, protest and notice of nonpayment
and consent, without affecting their liability hereunder, to any and all
extensions, renewals, substitutions and alterations of any of the terms of this
Note and to the release of or failure by the Bank to exercise any rights against
any party liable for or any property securing payment thereof.

                             STRATTEC SECURITY CORPORATION


                             By:___________________________________
                             Title:________________________________

                             JPM/cm
                             Acct#1440055 Note#10001


<PAGE>   7


                              REVOLVING CREDIT NOTE

$20,000,000.00                                              MILWAUKEE, WISCONSIN

REVOLVING LOANS
DUE: OCTOBER 31, 2003                                              JUNE 15, 2001

         FOR VALUE RECEIVED, STRATTEC SECURITY CORPORATION, a Wisconsin
corporation (the "Borrower"), promises to pay to the order of M&I MARSHALL &
ILSLEY BANK, a Wisconsin banking association (the "Bank") at M&I Marshall &
Ilsley Bank, Loan Services Department, 401 N. Executive Drive, Brookfield, WI
53005, or at such other place as the holder hereof may from time to time in
writing designate, in lawful money of the United States of America, the
principal sum of Twenty Million and 00/100ths Dollars ($20,000,000.00), or so
much thereof as has been advanced and remains outstanding pursuant to Section
2.1 of the Revolving Credit Agreement by and between the Borrower and the Bank
dated as of the date hereof (the "Loan Agreement"), together with accrued
interest and all other costs, charges and fees due thereunder.

         The undersigned further promises to pay interest on the unpaid
principal amount of each Revolving Loan (as such term is defined in the Loan
Agreement) as is outstanding under the Loan Agreement, payable at such rates and
at such times, as provided in the Loan Agreement. A 1/8 percent fee for any
unused portion of said Note will be charged commencing June 15, 2001 until
maturity. Subject to the provisions of the Loan Agreement with respect to
acceleration, prepayment or loan limitations, all unpaid principal with respect
to each Revolving Loan, together with accrued interest and all other costs,
charges and fees, shall be due and payable in full on the Termination Date for
this Note.

         This Note evidences indebtedness incurred under, and is entitled to the
benefits of, the Loan Agreement, together with all future amendments,
modifications, waivers, supplements and replacements thereof, to which Loan
Agreement reference is made for a statement of the terms and provisions under
which this Note may be paid prior to its due date or its due date accelerated.
This Note is pursuant to a Revolving Credit Agreement and reference is made
thereto for a statement of terms and provisions thereof.

         The Borrower hereby agrees to pay all costs of collection including
reasonable attorneys' fees and legal expenses in the event this Note is not paid
when due.

         This Note is issued in and shall be governed by the laws of the State
of Wisconsin.

         No delay or omission on the part of the holder in exercising any right
hereunder shall operate as a waiver of such right or of any other remedy under
this Note. A waiver on any one occasion shall not be construed as a waiver of
any such right or remedy on a future occasion.

         All makers, endorsers, sureties, guarantors and other accommodation
parties hereby waive presentment for payment, protest and notice of nonpayment
and consent, without affecting their liability hereunder, to any and all
extensions, renewals, substitutions and alterations of any of the terms of this
Note and to the release of or failure by the Bank to exercise any rights against
any party liable for or any property securing payment thereof.

                          STRATTEC SECURITY CORPORATION


                          By:___________________________________
                          Title:________________________________

                          JPM/cm
                          Acct#1440055 Note#10000






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>5
<FILENAME>c64800ex10-2.txt
<DESCRIPTION>EMPLOYMENT AGREEMENTS B/W CO. & EXECUTIVE OFFICERS
<TEXT>
<PAGE>   1
                                                                    EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT


         THIS EMPLOYMENT AGREEMENT is made as of the 22nd day of November, 1999,
by and between STRATTEC SECURITY CORPORATION, a Wisconsin corporation (the
"Company"), and Donald P. Klick (the "Employee").

                                     RECITAL

         The Company desires to employ the Employee and the Employee is willing
to make his services available to the Company on the terms and conditions set
forth below.

                                   AGREEMENTS

         In consideration of the premises and the mutual agreements which
follow, the parties agree as follows:

         1. Employment. The Company hereby employs the Employee and the Employee
hereby accepts employment with the Company on the terms and conditions set forth
in this Agreement.

         2. Term. The term of the Employee's employment hereunder shall commence
effective on November 22, 1999 and shall continue through June 30, 2000, and
shall thereafter be automatically renewed for successive fiscal year terms
unless either the Company or Employee gives notice of nonrenewal not less than
30 days prior to the end of the then current term (the "Employment Period").

         3. Duties. The Employee shall serve as the Vice President Business
Operations of the Company and will, under the direction of President and Chief
Operating Officer, faithfully and to the best of Employee's ability, perform the
duties of the Vice President Business Operations. Vice President Business
Operations shall be one of the principal executive officers of the Company and
shall, subject to the control of the President and Chief Operating Officer,
supervise the product business team functions of the Company. The Employee shall
also perform such additional duties and responsibilities which may from time to
time be reasonably assigned or delegated by the President and Chief Operating
Officer of the Company. The Employee agrees to devote Employee's entire business
time, effort, skill and attention to the proper discharge of such duties while
employed by the Company. However, the Employee may engage in other business
activities unrelated to, and not in conflict with, the business of the Company
if the President and Chief Operating Officer consents in writing to such other
business activity.

         4. Compensation. The Employee shall receive a base salary of $125,000
per year, payable in regular and semi-monthly installments (the "Base Salary").
Employee's Base Salary shall be reviewed annually by the Board of Directors of
the Company to determine appropriate increases, if any, in such Base Salary.


<PAGE>   2

         5. Fringe Benefits.

                  (a) Medical, Health, Dental, Disability and Life Coverage. The
Employee shall be eligible to participate in any medical, health, dental,
disability and life insurance policy in effect for senior management of the
Company (collectively, the "Senior Management").

                  (b) Incentive Bonus and Stock Ownership Plans. The Employee
shall be entitled to participate in any incentive bonus or other incentive
compensation plan developed generally for the Senior Management of the Company,
on a basis consistent with Employee's position and level of compensation with
the Company. The Employee shall also be entitled to participate in any incentive
stock option plan or other stock ownership plan developed generally for the
Senior Management of the Company, on a basis consistent with Employee's position
and level of compensation with the Company.

                  (c) Reimbursement for Reasonable Business Expenses. Subject to
the terms and conditions of the Company's expense reimbursement policy, the
Company shall pay or reimburse the Employee for reasonable expenses incurred by
Employee in connection with the performance of Employee's duties pursuant to
this Agreement, including, but not limited to, travel expenses, expenses in
connection with seminars, professional conventions or similar professional
functions and other reasonable business expenses.

         6. Termination of Employment.

                  (a) Termination for Cause, Disability or Death. During the
term of this Agreement, the Company shall be entitled to terminate the
Employee's employment at any time upon the "Disability" of the Employee or for
"Cause" upon notice to the Employee. The Employee's employment hereunder shall
automatically terminate upon the death of the Employee. For purposes of this
Agreement, "Disability" shall mean a physical or mental sickness or any injury
which renders the Employee incapable of performing the essential functions of
Employee's job (with or without reasonable accommodations) and which does or may
be expected to continue for more than 4 months during any 12-month period. In
the event Employee shall be able to perform the essential functions of
Employee's job (with or without reasonable accommodations) following a period of
disability, and does so perform such duties, or such other duties as are
prescribed by the President of the Company, for a period of three continuous
months, any subsequent period of disability shall be regarded as a new period of
disability for purposes of this Agreement. The Company and the Employee shall
determine the existence of a Disability and the date upon which it occurred. In
the event of a dispute regarding whether or when a Disability occurred, the
matter shall be referred to a medical doctor selected by the Company and the
Employee. In the event of their failure to agree upon such a medical doctor, the
Company and the Employee shall each select a medical doctor who together shall
select a third



                                       2
<PAGE>   3

medical doctor who shall make the determination. Such determination shall be
conclusive and binding upon the parties hereto.

                           The Company may terminate the Employee's employment
under this agreement for "Cause," effective immediately upon delivery of notice
to the Employee. Cause shall be deemed to exist if the Employee shall have (1)
materially breached the terms of this Agreement; (2) willfully failed to
substantially perform his duties, other than a failure resulting from incapacity
due to physical or mental illness; or (3) serious misconduct which is
demonstrably and substantially injurious to the Company. No act or failure to
act will be considered "cause" if such act or failure is done in good faith and
with a reasonable belief that it is in the best interests of the Company.

                           In the event of termination for Disability or death,
payments of the Employee's Base Salary shall be made to the Employee, his
designated beneficiary or Employee's estate for a period of six months after the
date of the termination (even if this period would extend beyond the Employment
Period); provided, however that the foregoing payments in the event of a
Disability shall be reduced by the amount, if any, that is paid to Employee
pursuant to a disability plan or policy maintained by the Company. During this
period, the Company shall also reimburse the Employee for amounts paid, if any,
to continue medical, dental and health coverage pursuant to the provisions of
the Consolidated Omnibus Budget Reconciliation Act. During this period, the
Company will also continue Employee's life insurance and disability coverage, to
the extent permitted under applicable policies, and will pay to the Employee the
fringe benefits pursuant to section 5 which have accrued prior to the date of
termination. Termination of this Agreement for a Disability shall not change
Employee's rights to receive benefits, if any, pursuant to any disability plan
or policy then maintained by the Company.

                  (b) Termination Without Cause. If the Employee's employment is
terminated by the Company for any reason other than for Cause, Disability or
death, or if this Agreement is terminated by the Company for what the Company
believes is Cause or Disability, and it is ultimately determined that the
Employee was wrongfully terminated, Employee shall, as damages for such a
termination, receive Employee's Base Salary, for the remainder of the Employment
Period or six months, if longer. During this period, the Company shall also
reimburse the Employee for amounts paid, if any, to continue medical, dental and
health coverage pursuant to the provisions of the Consolidated Omnibus Budget
Reconciliation Act. During this period, the Company will also continue
Employee's life insurance and disability coverage, to the extent permitted under
applicable policies, and will pay to the Employee the fringe benefits pursuant
to section 5 which have accrued prior to the date of termination. The Company's
termination of the Employee's employment under this section 6(b) shall
immediately relieve the Employee of all obligations under this Agreement (except
as provided in sections 7 and 8) and, except as provided below, shall not be
construed to require the application of any compensation which the Employee may
earn in any such other employment to reduce the Company's obligation to provide
severance benefits and liquidated damages under this section 6(b).



                                       3

<PAGE>   4

                  (c) Effect of Termination. The termination of the Employee's
employment pursuant to section 6 shall not affect the Employee's obligations as
described in sections 7 and 8.

         7. Noncompetition. The parties agree that the Company's customer
contacts and relations are established and maintained at great expense and by
virtue of the Employee's employment with the Company, the Employee will have
unique and extensive exposure to and personal contact with the Company's
customers, and that Employee will be able to establish a unique relationship
with those individuals and entities that will enable Employee, both during and
after employment, to unfairly compete with the Company. Further, the parties
agree that the terms and conditions of the following restrictive covenants are
reasonable and necessary for the protection of the Company's business, trade
secrets and confidential information and to prevent great damage or loss to the
Company as a result of action taken by the Employee. The Employee acknowledges
that the noncompete restrictions and nondisclosure of confidential information
restrictions contained in this Agreement are reasonable and the consideration
provided for herein is sufficient to fully and adequately compensate the
Employee for agreeing to such restrictions. The Employee acknowledges that
Employee could continue to actively pursue Employee's career and earn sufficient
compensation in the same or similar business without breaching any of the
restrictions contained in this Agreement.

                  (a) During Term of Employment. The Employee hereby covenants
and agrees that, during Employee's employment with the Company, Employee shall
not, directly or indirectly, either individually or as an employee, principal,
agent, partner, shareholder, owner, trustee, beneficiary, co-venturer,
distributor, consultant or in any other capacity, participate in, become
associated with, provide assistance to, engage in or have a financial or other
interest in any business, activity or enterprise which is competitive with or a
supplier to the Company or any successor or assign of the Company. The ownership
of less than a one percent interest in a corporation whose shares are traded in
a recognized stock exchange or traded in the over-the-counter market, even
though that corporation may be a competitor of the Company, shall not be deemed
financial participation in a competitor.

                  (b) Upon Termination of Employment. The Employee agrees that
during a period after termination of Employee's employment with the Company
equal to the shorter of one year or the duration of Employee's employment with
the Company, Employee will not, directly or indirectly, either individually or
as an employee, agent, partner, shareholder, owner, trustee, beneficiary,
co-venturer, distributor, consultant or in any other capacity:

                           (i) Canvass, solicit or accept from any person or
entity who is a customer of the Company (any such person or entity is
hereinafter referred to individually as a "Customer" and collectively as the
"Customers") any business in competition with the business of the Company or the
successors or assigns of the Company, including the canvassing, soliciting or
accepting of business from any individual




                                       4

<PAGE>   5

or entity which is or was a Customer of the Company within the two-year period
preceding the date on which the canvassing, soliciting or accepting of business
begins.

                           (ii) Request or advise any of the Customers,
suppliers, or other business contacts of the Company who currently have or have
had business relationships with the Company within two years preceding the date
hereof or within two years preceding the date of such action, to withdraw,
curtail or cancel any of their business or relations with the Company.

                           (iii) Induce or attempt to induce any employee, sales
representative, consultant or other personnel of the Company to terminate his or
her relationship or breach his or her agreements with the Company.

                           (iv) Use, disclose, divulge or transmit or cause to
be used by or disclosed, divulged or transmitted to any third party, any
information acquired by the Employee during the Employment Period which relates
to the trade secrets and confidential information of the Company, except as may
be required by law.

                           (v) Participate in, become associated with, provide
assistance to, engage in or have a financial or other interest in any business,
activity or enterprise which is competitive with the business of the Company or
any successor or assign of the Company to the extent such activities relate to
products or services which are competitive with the products and services of the
Company; provided, however, that the ownership of less than 1% of the stock of a
corporation whose shares are traded in a recognized stock exchange or traded in
the over-the-counter market, even though that corporation may be a competitor of
the Company, shall not be deemed financial participation in a competitor.

                                    For purposes of this section 7, a
competitive business is defined as a business which is involved in designing,
developing, manufacturing or marketing mechanical, electro-mechanical and/or
electronic security and access control products in the global motor vehicle
industry.

         8. Confidential Information. The parties agree that the Company's
customers, business connections, suppliers, customer lists, procedures,
operations, techniques, and other aspects of its business are established at
great expense and protected as confidential information and provide the Company
with a substantial competitive advantage in conducting its business. The parties
further agree that by virtue of the Employee's employment with the Company,
Employee will have access to, and be entrusted with, secret, confidential and
proprietary information, and that the Company would suffer great loss and injury
if the Employee would disclose this information or use it to compete with the
Company. Therefore, the Employee agrees that during the term of Employee's
employment, and for a period of two years after the termination of his
employment with the Company, Employee will not, directly or indirectly, either
individually or as an employee, agent, partner, shareholder, owner, trustee,
beneficiary,





                                       5

<PAGE>   6

co-venturer, distributor, consultant or in any other capacity, use or disclose,
or cause to be used or disclosed, any secret, confidential or proprietary
information acquired by the Employee during Employee's employment with the
Company whether owned by the Company prior to or discovered and developed by the
Company subsequent to the Employee's employment, and regardless of the fact that
the Employee may have participated in the discovery and the development of that
information. Employee also agrees and acknowledges that Employee will comply
with all applicable laws regarding insider trading or the use of material
nonpublic information in connection with the trading of securities.

         9. Common Law of Torts and Trade Secrets. The parties agree that
nothing in this Agreement shall be construed to limit or negate the common law
of torts or trade secrets where it provides the Company with broader protection
than that provided herein.

         10. Specific Performance. The Employee acknowledges and agrees that
irreparable injury to the Company may result in the event the Employee breaches
any covenant and agreement contained in sections 7 and 8 and that the remedy at
law for the breach of any such covenant will be inadequate. Therefore, if the
Employee engages in any act in violation of the provisions of sections 7 and 8,
the Employee agrees that the Company shall be entitled, in addition to such
other remedies and damages as may be available to it by law or under this
Agreement, to injunctive relief to enforce the provisions of sections 7 and 8.

         11. Waiver. The failure of either party to insist, in any one or more
instances, upon performance of the terms or conditions of this Agreement shall
not be construed as a waiver or a relinquishment of any right granted hereunder
or of the future performance of any such term, covenant or condition.

         12. Notices. Any notice to be given hereunder shall be deemed
sufficient if addressed in writing, and delivered by registered or certified
mail or delivered personally, in the case of the Company, to its principal
business office, and in the case of the Employee, to his address appearing on
the records of the Company, or to such other address as he may designate in
writing to the Company.

         13. Severability. In the event that any provision shall be held to be
invalid or unenforceable for any reason whatsoever, it is agreed such invalidity
or unenforceability shall not affect any other provision of this Agreement and
the remaining covenants, restrictions and provisions hereof shall remain in full
force and effect and any court of competent jurisdiction may so modify the
objectionable provision as to make it valid, reasonable and enforceable.
Furthermore, the parties specifically acknowledge the above covenant not to
compete and covenant not to disclose confidential information are separate and
independent agreements.




                                       5

<PAGE>   7

         14. Amendment. This Agreement may only be amended by an agreement in
writing signed by all of the parties hereto.

         15. Governing Law. This Agreement shall be governed by and construed
exclusively in accordance with the laws of the State of Wisconsin, regardless of
choice of law requirements. The parties hereby consent to the jurisdiction of
the state courts of the State of Wisconsin and of any federal court in the venue
of Wisconsin for the purpose of any suit, action or proceeding arising out of or
related to this Agreement, and expressly waive any and all objections they may
have as to venue in any of such courts.

         16. Dispute Resolution. The parties hereto shall attempt to resolve
disputes arising out of or relating to this Agreement. Any dispute not resolved
in writing within 21 days may be referred by either party to mediation involving
a mediator (a third party neutral), trained and experienced in the mediation
process and mutually agreed to by the parties. The mediator shall ascribe to and
follow the AAA/SPIDR or ABA code of ethics for mediators in conduct and
management of the mediation process. Expenses for the mediation shall be shared
equally by the parties unless otherwise agreed during the mediation process. The
parties may be accompanied in the mediation process by legal counsel, and/or
other persons mutually agreed to by the parties and the mediator. All
participants will openly and honestly participate in the mediation. The
mediation may be terminated at any time, for any reason by the mediator or by
either party. Any resolution reached by the parties during the mediation shall
be recorded in writing and agreed to by the parties. Such resolution may be
drafted and/or revised by the parties' legal counsel and shall be legally
binding on the parties.

         17. Benefit. This Agreement shall be binding upon and inure to the
benefit of and shall be enforceable by and against the Company, its successors
and assigns and the Employee, his heirs, beneficiaries and legal
representatives. It is agreed that the rights and obligations of the Employee
may not be delegated or assigned.

                  IN WITNESS WHEREOF, the parties have executed or caused this
Agreement to be executed as of the day, month and year first above written.

EMPLOYEE                                   STRATTEC SECURITY CORPORATION

/s/ Donald P. Klick                        BY /s/ Harold M. Stratton II
- ----------------------------                 --------------------------------
Donald P. Klick                            Harold M. Stratton II,
                                           Chairman of the Board
                                           and Chief Executive Officer



                                       7

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>6
<FILENAME>c64800ex10-3.txt
<DESCRIPTION>CHANGE IN CONTROL AGREEMENT
<TEXT>
<PAGE>   1
                                                                    EXHIBIT 10.3



                              EMPLOYMENT AGREEMENT


         AGREEMENT by and between STRATTEC SECURITY CORPORATION, a Wisconsin
corporation (the "Company") and Donald P. Klick (the "Executive"), dated as of
the 22nd day of November, 1999.

         The Board of Directors of the Company (the "Board"), has determined
that it is in the best interests of the Company and its shareholders to assure
that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company. The Board believes it is imperative to diminish
the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control and
to encourage the Executive's full attention and dedication to the Company
currently and in the event of any threatened or pending Change of Control, and
to provide the Executive with compensation and benefits arrangements upon a
Change of Control which ensure that the compensation and benefits expectations
of the Executive will be satisfied and which are competitive with those of other
corporations. Therefore, in order to accomplish these objectives, the Board has
caused the Company to enter into this Agreement.

         NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

         1. Certain Definitions.

            (a) The "Effective Date" shall mean the first date during the Change
of Control Period (as defined in Section l(b)) on which a Change of Control (as
defined in Section 2) occurs. Anything in this Agreement to the contrary
notwithstanding, if a Change of Control occurs and if the Executive's employment
with the Company or this Agreement is terminated prior to the date on which the
Change of Control occurs, and if it is reasonably demonstrated by the Executive
that such termination of employment or of this Agreement (i) was at the request
of a third party who has taken steps reasonably calculated to effect a Change of
Control or (ii) otherwise arose in connection with or anticipation of a Change
of Control, then for all purposes of this Agreement the "Effective Date" shall
mean the date immediately prior to the date of such termination of employment or
purported termination of this Agreement.

            (b) The "Change of Control Period" shall mean the period commencing
on the date hereof and ending on the third anniversary of the date hereof;
provided, however, that commencing on the date one year after the date hereof,
and on each annual anniversary of such date (such date and each annual
anniversary thereof shall be hereinafter referred to as the "Renewal Date"),
unless previously terminated, the Change of Control Period shall be
automatically extended so as to terminate three years from such Renewal Date,
unless at least 60 days prior to the Renewal Date the Company





<PAGE>   2

shall give notice to the Executive that the Change of Control Period shall not
be so extended.

         2. Change of Control. For the purpose of this Agreement, a "Change of
Control" shall mean:

            (a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that the following acquisitions shall not constitute a Change
of Control: (i) any acquisition directly from the Company, (ii) any acquisition
by the Company, (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company or (iv) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of subsection (c) of this
Section 2; or

            (b) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or

            (c) Approval by the shareholders of the Company of a reorganization,
merger or consolidation (a "Business Combination"), in each case, unless,
following such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 60% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns the
Company through one or more subsidiaries) in substantially the same proportions
as their ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting Securities,




                                       2
<PAGE>   3

as the case may be, (ii) no Person (excluding any employee benefit plan (or
related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or

            (d) Approval by the shareholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other disposition
of all or substantially all of the assets of the Company, other than to a
corporation, with respect to which following such sale or other disposition, [a]
more than 60% of, respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and outstanding
Company Voting Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately prior to such
sale or other disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, [b] less than 20% of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by any Person (excluding any
employee benefit plan (or related trust) of the Company or such corporation),
except to the extent that such Person owned 20% or more of the Outstanding
Company Common Stock or Outstanding Company Voting Securities prior to the sale
or disposition, and [c] at least a majority of the members of the board of
directors of such corporation were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the action of the Board, providing
for such sale or other disposition of assets of the Company or were elected,
appointed or nominated by the Board.

         3. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the third anniversary of
such date (the "Employment Period").

         4. Terms of Employment.

            (a) Position and Duties.



                                       3
<PAGE>   4

                (i) During the Employment Period, [a] the Executive's position
(including status, offices, titles and reporting requirements), authority,
duties and responsibilities shall be at least commensurate in all material
respects with the most significant of those held, exercised and assigned at any
time during the 120-day period immediately preceding the Effective Date and [b]
the Executive's services shall be performed at the location where the Executive
was employed immediately preceding the Effective Date or any office or location
less than 35 miles from such location.

                (ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to [a] serve on corporate, civic or charitable
boards or committees, [b] deliver lectures, fulfill speaking engagements or
teach at educational institutions and [c] manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Company.

            (b) Compensation.

                (i) Base Salary. During the Employment Period, the Executive
shall receive an annual base salary ("Annual Base Salary"), which shall be paid
at a monthly rate, at least equal to twelve times the highest monthly base
salary paid or payable, including any base salary which has been earned but
deferred, to the Executive by the Company and its affiliated companies in
respect of the 12-month period immediately preceding the month in which the
Effective Date occurs. During the Employment Period, the Annual Base Salary
shall be reviewed no more than 12 months after the last salary increase awarded
to the Executive prior to the Effective Date and thereafter at least annually
and shall be first increased no more than 12 months after the last salary
increase awarded to the Executive prior to the Effective Date and thereafter at
least annually by the higher of (x) the average increase (excluding promotional
increases) in base salary awarded to the Executive for each of the three full
fiscal years (annualized in the case of any fiscal year consisting of less than
twelve full months or during which the Executive was employed for less than
twelve months) prior to the Effective Date, and (y) the percentage increase
(excluding promotional increases) in base salary generally awarded to peer
executives of the Company and its affiliated companies for the year of
determination. Any increase in Annual Base Salary shall not serve to limit or
reduce any




                                       4
<PAGE>   5

other obligation to the Executive under this Agreement. Annual Base Salary shall
not be reduced after any such increase and the term Annual Base Salary as
utilized in this Agreement shall refer to Annual Base Salary as so increased. As
used in this Agreement, the term "affiliated companies" shall include any
company controlled by, controlling or under common control with the Company.

                (ii) Annual Bonus. In addition to Annual Base Salary, the
Executive shall be awarded, for each fiscal year ending during the Employment
Period, an annual bonus (the "Annual Bonus") in cash at least equal to the
higher of (x) the average of the three highest bonuses paid or payable,
including any bonus or portion thereof which has been earned but deferred, to
the Executive by the Company and its affiliated companies in respect of the five
fiscal years (or such shorter period during which the Executive has been
employed by the Company) immediately preceding the fiscal year in which the
Effective Date occurs (annualized for any fiscal year during such period
consisting of less than twelve full months or with respect to which the
Executive has been employed by the Company for less than twelve full months) and
(y) the bonus paid or payable (annualized as described above), including any
bonus or portion thereof which has been earned but deferred, to the Executive by
the Company and its affiliated companies in respect of the most recently
completed fiscal year prior to the Effective Date (such higher amount being
referred to as the "Recent Annual Bonus"). Each such Annual Bonus shall be paid
no later than the end of the third month of the fiscal year next following the
fiscal year for which the Annual Bonus is awarded, unless the Executive shall
elect to defer the receipt of such Annual Bonus.

                (iii) Incentive, Savings and Retirement Plans. During the
Employment Period, the Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and its affiliated
companies, but in no event shall such plans, practices, policies and programs
provide the Executive with incentive opportunities (measured with respect to
both regular and special incentive opportunities, to the extent, if any, that
such distinction is applicable), savings opportunities and retirement benefit
opportunities, in each case, less favorable, in the aggregate, than the most
favorable of those provided by the Company and its affiliated companies for the
Executive under such plans, practices, policies and programs as in effect at any
time during the 120-day period immediately preceding the Effective Date or if
more favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its affiliated
companies.

                (iv) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death and
travel accident insurance plans and programs) to the extent applicable generally
to other peer executives of the Company and its affiliated





                                       5
<PAGE>   6

companies, but in no event shall such plans, practices, policies and programs
provide the Executive with benefits which are less favorable, in the aggregate,
than the most favorable of such plans, practices, policies and programs in
effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, those
provided generally at any time after the Effective Date to other peer executives
of the Company and its affiliated companies.

                (v) Expenses. During the Employment Period, the Executive shall
be entitled to receive prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the most favorable policies, practices and
procedures of the Company and the affiliated companies in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the Company and its
affiliated companies.

                (vi) Fringe Benefits. During the Employment Period, the
Executive shall be entitled to fringe benefits, including, without limitation,
tax and financial planning services, payment of club dues, and, if applicable,
use of automobile and payment of related expenses, in accordance with the most
favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies.

                (vii) Office and Support Staff. During the Employment Period,
the Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing provided
to the Executive by the Company and its affiliated companies at any time during
the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and its affiliated companies.

                (viii) Vacation. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated companies as
in effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.

         5. Termination of Employment.

            (a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. If the


                                       6
<PAGE>   7

Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance with
Section 12(b) of this Agreement of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company shall
terminate effective on the 30th day after receipt of such notice by the
Executive (the "Disability Effective Date"), provided that, within the 30 days
after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's duties
with the Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative (such
agreement as to acceptability not to be withheld unreasonably).

            (b) Cause. The Company may terminate the Executive's employment
during the Employment Period for Cause. For the sole and exclusive purposes of
this Agreement, "Cause" shall mean:

                (i) The willful and continued failure of the Executive to
perform substantially the Executive's duties with the Company or one of its
affiliates (other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial performance
is delivered to the Executive by the Board or the Chief Executive Officer of the
Company which specifically identifies the manner in which the Board or Chief
Executive Officer believes that the Executive has not substantially performed
the Executive's duties, or

                (ii) The willful engaging by the Executive in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the Company.

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer or
a senior officer of the Company or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company. The cessation
of employment of the Executive shall not be deemed to be for Cause unless and
until there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters of the
entire membership of the Board at a meeting of the Board called and held for
such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the



                                       7
<PAGE>   8

Executive is guilty of the conduct described in subparagraph (i) or (ii) above,
and specifying the particulars thereof in detail.

            (c) Good Reason. The Executive's employment may be terminated by the
Executive for Good Reason. For the sole and exclusive purposes of this
Agreement, "Good Reason" shall mean:

                (i) The assignment to the Executive of any duties inconsistent
in any respect with the Executive's position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities as
contemplated by Section 4(a) of this Agreement, or any other action by the
Company which results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive;

                (ii) Any failure by the Company to comply with any of the
provisions of Section 4(b) of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;

                (iii) The Company's requiring the Executive to be based at any
office or location other than as provided in Section 4(a)(i)(b) hereof or the
Company's requiring the Executive to travel on Company business to a
substantially greater extent than required immediately prior to the Effective
Date;

                (iv) Any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or

                (v) Any failure by the Company to comply with and satisfy
Section 11(c) of this Agreement.

For purposes of this Section 5(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive. Anything in this Agreement to the
contrary notwithstanding, a termination by the Executive for any reason during
the 30-day period immediately following the first anniversary of the Effective
Date shall be deemed to be a termination for Good Reason for all purposes of
this Agreement.

            (d) Notice of Termination. Any termination by the Company for Cause,
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b) of
this Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment



                                       8
<PAGE>   9

under the provision so indicated, and (iii) if the Date of Termination (as
defined below) is other than the date of receipt of such notice, specifies the
termination date (which date shall be not more than thirty days after the giving
of such notice). The failure by the Executive or the Company to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Good Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company, respectively,
from asserting such fact or circumstance in enforcing the Executive's or the
Company's rights hereunder.

            (e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination, and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date, as the case
may be.

         6. Obligations of the Company upon Termination.

            (a) Good Reason; Other Than for Cause, Death or Disability. If,
during the Employment Period, the Company shall terminate the Executive's
employment other than for Cause, death or Disability or the Executive shall
terminate employment for Good Reason:

                (i) The Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:

                    [a] The sum of [i] the Executive's Annual Base Salary
through the Date of Termination to the extent not theretofore paid, [ii] the
product of (x) the higher of [A] the Recent Annual Bonus and [B] the Annual
Bonus paid or payable, including any bonus or portion thereof which has been
earned but deferred (and annualized for any fiscal year consisting of less than
12 full months or during which the Executive was employed for less than 12 full
months), for the most recently completed fiscal year during the Employment
Period, if any (such higher amount being referred to as the "Highest Annual
Bonus") and (y) a fraction, the numerator of which is the number of days in the
current fiscal year through the Date of Termination, and the denominator of
which is 365 and [iii] any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon) and any accrued
vacation pay, in each case to the extent not theretofore paid (the sum of the
amounts described in clauses [i], [ii] and [iii] shall be hereinafter referred
to as the "Accrued Obligations"); and



                                       9
<PAGE>   10

                    [b] The amount equal to the product of [i] three and [ii]
the sum of (x) the Executive's Annual Base Salary and (y) the Highest Annual
Bonus; and

                    [c] An amount equal to the difference between [i] the
actuarial equivalent of the benefit (utilizing actuarial assumptions no less
favorable to the Executive than those in effect under the Retirement Plan (as
defined below) immediately prior to the Effective Date, except as specified
below with respect to increases in base salary and annual bonus) under the
qualified defined benefit retirement plan in which the Executive participates
(the "Retirement Plan") and any excess or supplemental retirement plan in which
the Executive participates (together, the "SERP") which the Executive would
receive if the Executive's employment continued for three years after the Date
of Termination assuming for this purpose that all accrued benefits are fully
vested, and, assuming that (x) the Executive's base salary increased in each of
the three years by the amount required by Section 4(b)(i) (in the case of
Section 4-(b)(i)(y) based on increases (excluding promotional increases) in base
salary for the most recently completed fiscal year prior to the Date of
Termination) had the Executive remained employed, and (y) the Executive's annual
bonus (annualized for any fiscal year consisting of less than twelve full months
or during which the Executive was employed for less than twelve full months) in
each of the three years bears the same proportion to the Executive's base salary
in such year or fraction thereof as it did for the last full year prior to the
Date of Termination, and [ii] the actuarial equivalent of the Executive's actual
benefit (paid or payable), if any, under the Retirement Plan and the SERP as of
the Date of Termination;

                (ii) For three years after the Executive's Date of Termination,
or such longer period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue benefits to the
Executive and/or the Executive's family at least equal to those which would have
been provided to them in accordance with the plans, programs, practices and
policies described in Section 4(b)(iv) of this Agreement if the Executive's
employment had not been terminated in accordance with the most favorable plans,
practices, programs or policies of the Company and its affiliated companies
applicable generally to other peer executives and their families during the
120-day period immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies and their
families, provided, however, that if the Executive becomes reemployed with
another employer and is eligible to receive medical or other welfare benefits
under another employer provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under such other plan
during such applicable period of eligibility. For purposes of determining
eligibility (but not the time of commencement of benefits) of the Executive for
retiree benefits pursuant to such plans, practices, programs and policies, the
Executive shall be considered to have remained employed until two and one-half
years after the Date of Termination and to have retired on the last day of such
period;




                                       10
<PAGE>   11

                (iii) The Company shall, at its sole expense as incurred,
provide the Executive with outplacement services the scope and provider of which
shall be selected by the Executive in his sole discretion; and

                (iv) To the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to receive
under any plan, program, policy or practice or contract or agreement of the
Company and its affiliated companies (such other amounts and benefits shall be
hereinafter referred to as the "Other Benefits").

            (b) Death. If the Executive's employment is terminated by reason of
the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits. Accrued Obligations shall be paid
to the Executive's estate or beneficiary, as applicable, in a lump sum in cash
within 30 days of the Date of Termination. With respect to the provision of
Other Benefits, the term Other Benefits as utilized in this Section 6(b) shall
include, without limitation, and the Executives estate and/or beneficiaries
shall be entitled to receive, benefits at least equal to the most favorable
benefits provided by the Company and affiliated companies to the estates and
beneficiaries of peer executives of the Company and such affiliated companies
under such plans, programs, practices and policies relating to death benefits,
if any, as in effect with respect to other peer executives and their
beneficiaries at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive's estate and/or the
Executive's beneficiaries, as in effect on the date of the Executive's death
with respect to other peer executives of the Company and its affiliated
companies and their beneficiaries.

            (c) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for payment of Accrued Obligations and the timely payment or provision of
Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum
in cash within 30 days of the Date of Termination. With respect to the provision
of Other Benefits, the term Other Benefits as utilized in this Section 6(c)
shall include, and the Executive shall be entitled after the Disability
Effective Date to receive, disability and other benefits at least equal to the
most favorable of those generally provided by the Company and its affiliated
companies to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as in
effect generally with respect to other peer executives and their families at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive and/or the Executive's family, as in effect at
any time thereafter generally with respect to other peer executives of the
Company and its affiliated companies and their families.




                                       11
<PAGE>   12

            (d) Cause; Other than for Good Reason. If the Executive's employment
shall be terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the obligation
to pay to the Executive (i) his Annual Base Salary through the Date of
Termination, (ii) the amount of any compensation previously deferred by the
Executive, and (iii) Other Benefits, in each case to the extent theretofore
unpaid. If the Executive voluntarily terminates employment during the Employment
Period, excluding a termination for Good Reason, this Agreement shall terminate
without further obligations to the Executive, other than for Accrued Obligations
and the timely payment or provision of Other Benefits. In such case, all Accrued
Obligations shall be paid to the Executive in a lump sum in cash within 30 days
of the Date of Termination.

         7. Nonexclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which the Executive may qualify, nor shall anything herein limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with the Company or any of its affiliated companies. Amounts which are
vested benefits or which the Executive is otherwise entitled to receive under
any plan, policy, practice or program of or any contract or agreement with the
Company or any of its affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy, practice or
program or contract or agreement except as explicitly modified by this
Agreement.

         8. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code
of 1986, as amended (the "Code").

         9. Certain Additional Payments by the Company.

            (a) Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment or distribution by the Company
to or for the benefit of the Executive (whether paid or payable or distributed




                                       12
<PAGE>   13

or distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section
9) (a "Payment") would be subject to the excise tax imposed by Section 4999 of
the Code or any interest or penalties are incurred by the Executive with respect
to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
the Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.

            (b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by Arthur
Andersen & Co. or such other certified public accounting firm as may be
designated by the Executive (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the Executive within 15 business
days of the receipt of notice from the Executive that there has been a Payment,
or such earlier time as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change of Control, the Executive shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 9, shall be paid by the Company to the Executive within five days of the
receipt of the Accounting Firm's determination. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall furnish the
Executive with a written opinion that failure to report the Excise Tax on the
Executive's applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.

            (c) The Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be given as soon
as



                                       13
<PAGE>   14

practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:

                (i) Give the Company any information reasonably requested by the
Company relating to such claim,

                (ii) Take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,

                (iii) Cooperate with the Company in good faith in order
effectively to contest such claim, and

                (iv) Permit the Company to participate in any proceedings
relating to such claim; provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold the
Executive harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of
such representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 9(c), the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company directs the
Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the statute
of limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company's control of
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.




                                       14
<PAGE>   15


            (d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 9(c), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 9(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section 9(c), a determination
is made that the Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in writing of its
intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.

         10. Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company or as
may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 10 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.

         11. Successors.

            (a) This Agreement is personal to the Executive and without the
prior written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.

            (b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.

            (c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its




                                       15
<PAGE>   16

business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.

         12. Miscellaneous.

            (a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Wisconsin, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.

            (b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

If to the Executive, to his address appearing on the records of the Company.

If to the Company:

                           STRATTEC SECURITY CORPORATION
                           3333 West Good Hope Road
                           Milwaukee, WI 53209
                           Attn:  President

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

            (c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

            (d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

            (e) The Executive's or the Company's failure to insist upon strict
compliance with any provision hereof or any other provision of this Agreement or
the failure to assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 5(c)(i)-(v) of this Agreement,
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.




                                       16
<PAGE>   17


            (f) The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive
and the Company, the employment of the Executive by the Company is "at will"
and, prior to the Effective Date, the Executive's employment and this Agreement
may be terminated by either the Executive or the Company at any time prior to
the Effective Date, in which case the Executive shall have no further rights
under this Agreement. From and after the Effective Date this Agreement shall
supersede any other agreement between the parties with respect to the subject
matter hereof.

         IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.



                                      /s/ Donald P. Klick
                                      ----------------------------------
                                                 Donald P. Klick

                                      STRATTEC SECURITY CORPORATION

                                      BY /s/ Harold M. Stratton, II
                                        --------------------------------
                                           Harold M. Stratton, II,
                                           Chairman of the Board
                                        and Chief Executive Officer










                                       17

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.15
<SEQUENCE>7
<FILENAME>c64800ex10-15.txt
<DESCRIPTION>AMENDED ECONOMIC VALUE ADDED PLAN
<TEXT>
<PAGE>   1
                                                                   EXHIBIT 10.15









                            ECONOMIC VALUE ADDED PLAN
                                       FOR
                               EXECUTIVE OFFICERS
                                       AND
                                 SENIOR MANAGERS















                           Effective February 27, 1995
                 as Amended August 24, 1999 and August 21, 2001



<PAGE>   2
                            ECONOMIC VALUE ADDED PLAN
                                       FOR
                               EXECUTIVE OFFICERS
                                       AND
                                 SENIOR MANAGERS


                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                        Page
<S>                                                                                     <C>
I.       Plan Objectives                                                                  1

II.      Plan Administration                                                              1

III.     Definitions                                                                      1

IV.      Eligibility                                                                      4

V.       Individual Participation Levels                                                  5

VI.      Performance Factors                                                              5

VII.     Change in Status During Plan Year                                                8

VIII.    Bonus Paid and Bonus Bank                                                        9

IX.      Administrative Provisions                                                        12

X.       Miscellaneous                                                                    13

         Exhibit A
</TABLE>



<PAGE>   3


I.       PLAN OBJECTIVES

         A.       To promote the maximization of shareholder value over the long
                  term by providing incentive compensation to key employees 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 employees who can have a
                  positive impact on the economic value of the Company.

         C.       To encourage teamwork and cooperation in the achievement of
                  Company goals.

II.      PLAN ADMINISTRATION

         The Compensation Committee of the Company's Board of Directors (the
         "Compensation Committee") shall be responsible for the design,
         administration, and interpretation of the Plan.

III.     DEFINITIONS

         A.       "Accrued Bonus" means the bonus, which may be negative or
                  positive, which is calculated in the manner set forth in
                  Section V.A.

         B.       "Actual EVA" means the EVA as calculated for the relevant Plan
                  Year.

         C.       "Capital" means the Company's average monthly net operating
                  capital employed for the Plan Year, calculated as follows:

                                    Current Assets
                           -        Current Interest Bearing Assets
                           +        Bad Debt Reserve
                           +        LIFO Reserve
                           -        Future Income Tax Benefits
                           -        Current Noninterest-Bearing Liabilities
                           +        Property, Plant, Equipment, (Net)
                           -        Construction in Progress
                           (+/-)    Unusual Capital Items




                                       1
<PAGE>   4

         D.       "Capital Charge" means the deemed opportunity cost of
                  employing Capital in the Company's business, determined as
                  follows:

                           Capital Charge = Capital x Cost of Capital

         E.       "Company" means STRATTEC SECURITY CORPORATION. The Company's
                  Compensation Committee may act on behalf of the Company with
                  respect to this Plan.

         F.       "Cost of Capital" means the weighted average of the cost of
                  equity and the after tax cost of debt for the relevant Plan
                  Year. The Cost of Capital will be determined by the
                  Compensation Committee prior to each Plan Year, 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

                  where the Risk Free Rate is the average daily closing yield
                  rate on 30 year U.S. Treasury Bonds for an appropriate period
                  (determined by the Compensation Committee from time to time)
                  preceding the relevant Plan Year, the Business Risk Index is
                  determined by reference to an auto supply industry factor
                  selected by the Compensation Committee, the Average Equity
                  Risk Premium is 6%, the Debt Yield is the weighted average
                  yield of all borrowing included in the Company's permanent
                  capital, and the tax rate is the combination of the relevant
                  corporate Federal and state income tax rates.

                  The Compensation Committee will review the Cost of Capital
                  annually and make appropriate adjustments only if the
                  calculated Cost of Capital changes by more than 1% from that
                  used during the prior Plan Year.

         G.       "Earned Wages" includes all wages paid in the Plan Year,
                  excluding employment signing bonuses, EVA bonus payments,
                  reimbursement or other expense allowances, imputed income,
                  value of fringe benefits (cash and noncash), moving
                  reimbursements, welfare benefits and special payments.




                                       2
<PAGE>   5


         H.       "Economic Value Added" or "EVA" means the NOPAT that remains
                  after subtracting the Capital Charge, expressed as follows:

                          EVA = NOPAT - Capital Charge

                  EVA may be positive or negative.

         I.       Effective Date. February 27, 1995, the date as of which the
                  Plan first applies to the Company.

         J.       "EVA Leverage Factor" means the adjustment factor reflecting
                  deviation in the use of capital employed as a percentage of
                  capital employed. For purposes of this Plan, the Company's EVA
                  Leverage Factor is determined to be 5% of the monthly average
                  net operating capital employed during the prior Plan year.

         K.       "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 Income or
                            Expense
                    (+ -)   Other Unusual Income or Expense Items (See Section
                            VI. B.)
                    (+ -)   Amortization of Unusual Income or Expense Items
                      -     Cash Taxes on the Above (+/- change in deferred tax
                            liability)

         L.       "Participant" means individual who has satisfied the
                  eligibility requirements of the Plan as provided in Section
                  IV.

         M.       "Plan Year" means the one-year period coincident with the
                  Company's fiscal year.

         N.       "Executive Officers" means those Participants designated as
                  Executive Officers by the Compensation Committee with respect
                  to any Plan Year.



                                       3
<PAGE>   6

         O.       "Senior Managers" means those Participants designated as
                  Senior Managers by the Compensation Committee with respect to
                  any Plan Year.

         P.       "Target EVA" means the target level of EVA for the Plan Year,
                  determined as follows:

                      Current Plan        Prior Year   Prior Year   Expected
                      Year Target EVA  =  Target EVA + Actual EVA + Improvement
                                          -----------------------
                                                    2


                  Expected Improvement will be approved by the Board of
                  Directors, annually.

IV.      ELIGIBILITY

         A.       Eligible Positions. In general, only Executive Officers and
                  Senior Managers selected by the Compensation Committee may be
                  eligible for participation in the Plan. However, actual
                  participation will depend upon the contribution and impact
                  each eligible employee may have on the Company's value to its
                  shareholders, as determined by the Compensation Committee.

         B.       Nomination and Approval. Each Plan Year, the Chairman and
                  President will nominate eligible employees to participate in
                  the Plan for the next Plan Year. The Compensation Committee
                  will have the final authority to select Plan participants (the
                  "Participants") among the eligible employees nominated by the
                  Chairman and President. Continued participation in the Plan is
                  contingent on approval of the Compensation Committee.

         C.       Employee Performance Requirement. Employees whose performance
                  is rated "Needs Improvement" on their annual performance
                  review will not be eligible for an EVA bonus applicable to the
                  year covered by such performance review. However, if the
                  employee so rated is subject to a performance improvement
                  plan, and successfully meets the requirement of the plan in
                  the time frame prescribed, the employee's EVA eligibility will
                  be reinstated, and the EVA bonus will be paid with the next
                  regular payroll check following reinstatement.



                                       4
<PAGE>   7

V.       INDIVIDUAL PARTICIPATION LEVELS

         A.       Calculation of Accrued Bonus. Each Participant's Accrued Bonus
                  will be determined as a function of the Participant's Earned
                  Wages, the Participant's Target Incentive Award (provided in
                  Section V.B., below), Company Performance Factor (provided in
                  Section VI.A.) and the Individual Performance Factor (provided
                  in Section VI.C.) for the Plan Year. Each Participant's
                  Accrued Bonus will be calculated as follows:

                                   Target      Company            Individual
                  Participant's  x Incentive x Performance   +    Performance
                  Earned Wages     Award       Factor             Factor
                                               --------------------------------
                                                               2

         B.       Target Incentive Award. The Target Incentive Award will be
                  determined according to the following schedule:

<TABLE>
<CAPTION>
                                                                             Target Incentive Award
                                        Position                               (% of Base Salary)
                                        --------                               ------------------
<S>                                                                          <C>
                  Chairman (if also CEO of Company)                                    75%
                  President                                                            65%
                  Executive Vice President                                             50%
                  Vice President                                                       35%
                  Senior Managers (as specified in Exhibit A)                        12%-20%
</TABLE>


VI.      PERFORMANCE FACTORS

         A.       Company Performance Factor Calculation. For any Plan Year, the
                  Company Performance Factor will be calculated as follows:

                  Company Performance Factor = 1.00 + Actual EVA - Target EVA
                                                      -----------------------
                                                        EVA Leverage Factor

         B.       Adjustments to Company Performance. When Company performance
                  is based on Economic Value Added or other quantifiable
                  financial or accounting measure, it may be necessary to
                  exclude significant, unusual, unbudgeted or noncontrollable
                  gains or losses from actual financial results in order to
                  measure performance properly. The




                                       5
<PAGE>   8

                  Compensation Committee 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.

         C.       Individual Performance Factor Calculation. Determination of
                  the Individual Performance Factor will be the responsibility
                  of the individual to whom the participant reports. This
                  determination will be subject to approval by the Chairman and
                  President (or the Compensation Committee with respect to the
                  Chairman and President) and shall conform with the process set
                  forth below:

                  (1)      Quantifiable Supporting Performance Factors. The
                           Individual Performance Factor of the Accrued Bonus
                           calculation will be based on the accomplishment of
                           individual, financial and/or other goals ("Supporting
                           Performance Factors"). Whenever possible, individual
                           performance will be evaluated according to
                           quantifiable benchmarks of success. These Supporting
                           Performance Factors will be enumerated from 0 to 2.0
                           based on the levels of achievement for each goal per
                           the schedule in VI




                                       6
<PAGE>   9


                           C. (2). Provided, however, that if the quantifiable
                           Supporting Performance Factor is based on the Company
                           Performance Factor as set forth in Section VI.A.,
                           then the Supporting Performance Factor may be
                           unlimited.

                  (2)      Non-Quantifiable Supporting Performance Factors. When
                           performance cannot be measured according to a
                           quantifiable monitoring system, an assessment of the
                           Participant's performance shall be made based on a
                           non-quantifiable Supporting Performance Factor (or
                           Factors). The individual to whom the participant
                           reports (or the Compensation Committee with respect
                           to the Chairman) will evaluate the Participant's
                           performance based on behavioral attributes and
                           overall performance and this evaluation will
                           determine the Participant's Supporting Performance
                           Factor (or Factors) according to the following
                           schedule:


<TABLE>
<CAPTION>
                            --------------------------------- -------------------- -------------------------
                                    Non Quantifiable                                     Quantifiable
                                       Supporting                 Supporting              Supporting
                                   Performance Rating         Performance Factor      Performance Rating
                            --------------------------------- -------------------- -------------------------
<S>                                                           <C>                  <C>
                            Significantly Exceeds                   1.8-2.0        Significantly Exceeds
                            Requirements                                           Goal

                            Exceeds Requirements                    1.4-1.7        Exceeds Goal

                            Meets Requirements                      .7-1.3         Meets Goal

                            Marginally Meets Requirements            .3-.6         Goal Not Met, but
                                                                                   Significant Progress
                                                                                   Made

                            Needs Improvement                        0-.2

                                                                       0           Goal Not Met
</TABLE>

                  (3)      Aggregate Individual Performance Factor. The
                           Individual Performance Factor to be used in the
                           calculation of the Accrued Bonus shall be equal to
                           the sum of the quantifiable and/or non-quantifiable
                           Supporting Performance Factor(s), divided by two as
                           follows:

                                            Quantifiable      Non-Quantifiable
                                            Supporting    +   Supporting
                           Individual       Performance       Performance
                           Performance =    Factor            Factor
                                            -----------------------------
                           Factor                         2

                           Notwithstanding the foregoing, the individual to whom
                           the Participant reports (with the approval of the
                           Chairman and President or the Compensation Committee
                           with respect to the Chairman and President), shall
                           have the authority to weight the Supporting
                           Performance Factors, according to relative



                                       7
<PAGE>   10

                           importance. The weighting of each Supporting
                           Performance Factor shall be expressed as a
                           percentage, and the sum of the percentages applied to
                           all of the Supporting Performance Factors shall be
                           100%. The Individual Performance Factor, if weighted
                           factors are used, will then be equal to the weighted
                           average of such Supporting Performance Factors.




VII.     CHANGE IN STATUS DURING THE PLAN YEAR

         A.       New Hires and Promotions. A newly hired employee or an
                  employee promoted during the Plan Year to a position
                  qualifying for participation (or leaving the participating
                  class) may accrue (subject to discretion of the Compensation
                  Committee) a pro rata Accrued Bonus based on Base Salary
                  received.

         B.       Discharge. An employee discharged during the Plan Year shall
                  not be eligible for an Accrued Bonus, even though his or her
                  service arrangement or contract extends past year-end, unless
                  the Compensation Committee determines that the conditions of
                  the termination indicate that a prorated Accrued Bonus is
                  appropriate. The Compensation Committee shall have full and
                  final authority in making such a determination.

         C.       Resignation. An employee who resigns during the Plan Year to
                  accept employment elsewhere (including self-employment) will
                  not be eligible for an Accrued Bonus, unless the Compensation
                  Committee determines that the conditions of the termination
                  indicate that a prorated Bonus is appropriate. The
                  Compensation Committee shall have full and final authority in
                  making such a determination.

         D.       Death, Disability and Retirement. If a Participant's
                  employment is terminated during a Plan Year by reason of
                  death, disability, or normal or early retirement under the
                  Company's retirement plan, a tentative Accrued Bonus will be
                  calculated as if the Participant had remained employed as of
                  the end of the Plan Year. The final Accrued Bonus will be
                  calculated based upon the Base Salary received.

                  Each employee 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 employee's death.




                                       8
<PAGE>   11

                  Each such designation shall revoke all prior designations by
                  the employee, shall be in the form prescribed by the
                  Compensation Committee, and shall be effective only when filed
                  by the employee in writing with the Compensation Committee
                  during his or her lifetime.

                  In the absence of any such designation, benefits remaining
                  unpaid at the employee's death shall be paid to the employee's
                  estate.

         E.       Leave of Absence. An employee whose status as an active
                  employee is changed during a Plan Year as a result of a leave
                  of absence may, at the discretion of the Compensation
                  Committee, be eligible for a pro rata Accrued Bonus determined
                  in the same way as in paragraph D of this Section.

VIII.    BONUS PAID AND BONUS BANK

         All or a portion of the Accrued Bonus will be either paid to the
         Participant or credited to or charged against the Bonus Bank as
         provided in this Article.

         A.       Participants Who Are Not Executives Officers. All positive
                  Accrued Bonuses of Participants who are not Executive Officers
                  for the Plan Year shall be paid in full, less amounts required
                  by law to be withheld for income and employment tax purposes,
                  as soon as administratively feasible following the end of the
                  Plan Year in which the Accrued Bonus was earned. Participants
                  who are not Executive Officers shall not be charged or
                  otherwise assessed for negative Accrued Bonuses nor shall such
                  Participants have any portion of their Accrued Bonuses banked.

         B.       Participants Who Are Executive Officers. The Total Bonus
                  Payout to Participants who are Executive Officers for the Plan
                  Year shall be as follows:

<TABLE>
<S><C>
                  Total Bonus Payout = [Accrued Bonus - Extraordinary Bonus Accrual] + Bank Payout
</TABLE>

                  The Total Bonus Payout for each Plan Year, less amounts
                  required by law to be withheld for income tax and employment
                  tax purposes, shall be paid as soon as administratively
                  feasible following the end of the Plan Year in which the
                  Accrued Bonus was earned.




                                       9
<PAGE>   12

         C.       Establishment of a Bonus Bank. To encourage a long term
                  commitment to the enhancement of shareholder value by
                  Executive Officers, "Extraordinary Bonus Accruals" shall be
                  credited to an "at risk" deferred account ("Bonus Bank") for
                  each such Participant, and all negative Accrued Bonuses shall
                  be charged against the Bonus Bank, as determined in accordance
                  with the following:

                  1.       "Bonus Bank" means, with respect to each Executive
                           Officer, a bookkeeping record of an account to which
                           Extraordinary Bonus Accruals are credited, and
                           negative Accrued Bonuses debited as the case may be,
                           for each Plan Year, and from which bonus payments to
                           such Executive Officers are debited.

                  2.       "Bank Balance" means, with respect to each Executive
                           Officer, a bookkeeping record of the net balance of
                           the amounts credited to and debited against such
                           Executive Officer's Bonus Bank. The Bank Balance
                           shall initially be equal to zero.

                  3.       "Extraordinary Bonus Accrual" shall mean the amount
                           of the Accrued Bonus for any year that exceeds 1.25
                           times the portion of the Executive Officer's Base
                           Salary which is represented by the Target Incentive
                           Award in the event that the beginning Bank Balance is
                           positive or zero, and .75 times the portion of the
                           Executive Officer's Base Salary which is represented
                           by the Target Incentive Award in the event that the
                           beginning Bank Balance is negative.

                  4.       Annual Allocation. Each Executive Officer's
                           Extraordinary Bonus Accrual or negative Accrued Bonus
                           is credited or debited to the Bonus Bank maintained
                           for that Executive Officer. Such Annual Allocation
                           will occur as soon as administratively feasible after
                           the end of each Plan Year. Although a Bonus Bank may,
                           as a result of negative Accrual Bonuses have a
                           deficit, no Executive Officer shall be required, at
                           any time, to reimburse his/her Bonus Bank.

                  5.       "Available Balance" means the Bank Balance at the
                           point in time immediately after the Annual Allocation
                           has been made.

                  6.       "Payout Percentage" means the percentage of the
                           Available Balance that may be paid out in cash to the
                           Participant. The Payout Percentage will equal 33%.




                                       10
<PAGE>   13

                  7.       "Bank Payout" means the amount of the Available
                           Balance that may be paid out in cash to the Executive
                           Officer for each Plan Year. The Bank Payout is
                           calculated as follows:

                             Bank Payout = Available Balance x Payout Percentage

                           The Bank Payout is subtracted from the Bank Balance.


                  8.       Treatment of Available Balance Upon Termination

                           (a)      Resignation or Termination With Cause.
                                    Executive Officers leaving voluntarily to
                                    accept employment elsewhere (including
                                    self-employment) or who are terminated with
                                    cause will forfeit their Available Balance.

                           B.       Retirement, Death, Disability or Termination
                                    Without Cause. In the event of an Executive
                                    Officer's normal or early retirement under
                                    the STRATTEC SECURITY CORPORATION Retirement
                                    Plan, death, disability, or termination
                                    without cause, the Available Balance, less
                                    amounts required by law to be withheld for
                                    income tax and employment tax purposes shall
                                    be paid to the Executive Officer as soon as
                                    administratively feasible following the end
                                    of the Plan Year in which the termination
                                    for one of such events occurred.

                           B.       (C)For purposes of this Plan "cause" shall
                                    mean:

                                    B.       The willful and continued failure
                                             of a Participant to perform
                                             substantially the Participant's
                                             duties with the Company or one of
                                             its affiliates (other than any such
                                             failure resulting from incapacity
                                             due to physical or mental illness),
                                             after a written demand for
                                             substantial performance is
                                             delivered to the Participant by the
                                             Board or the Chief Executive
                                             Officer of the Company which
                                             specifically identifies the manner
                                             in which the Board or Chief
                                             Executive Officer believes that the
                                             Participant has not substantially
                                             performed the Participant's duties,
                                             or





                                       11
<PAGE>   14


                                    B.       The willful engaging by the
                                             Participant in illegal conduct or
                                             gross misconduct which is
                                             materially and demonstrably
                                             injurious to the Company.

                                             For purposes of this provision, no
                                             act or failure to act, on the part
                                             of the Participant, shall be
                                             considered "willful" unless it is
                                             done, or omitted to be done, by the
                                             Participant in bad faith or without
                                             reasonable belief that the
                                             Participant's action or omission
                                             was in the best interests of the
                                             Company. Any act, or failure to
                                             act, based upon authority given
                                             pursuant to a resolution duly
                                             adopted by the Board or upon the
                                             instructions of the Chief Executive
                                             Officer or a senior officer of the
                                             Company or based upon the advice of
                                             counsel for the Company shall be
                                             conclusively presumed to be done,
                                             or omitted to be done, by the
                                             Participant in good faith and in
                                             the best interests of the Company.
                                             The cessation of employment of the
                                             Participant shall not be deemed to
                                             be for cause unless and until there
                                             shall have been delivered to the
                                             Participant a copy of a resolution
                                             duly adopted by the affirmative
                                             vote of not less than
                                             three-quarters of the entire
                                             membership of the Board at a
                                             meeting of the Board called and
                                             held for such purpose (after
                                             reasonable notice is provided to
                                             the Participant and the Participant
                                             is given an opportunity, together
                                             with counsel, to be heard before
                                             the Board), finding that, in the
                                             good faith opinion of the Board,
                                             the Participant is guilty of the
                                             conduct described in subparagraph
                                             (I) or (ii) above, and specifying
                                             the particulars thereof in detail.

IX.      ADMINISTRATIVE PROVISIONS

         A.       Amendments. The Compensation Committee or full Board of
                  Directors 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,





                                       12
<PAGE>   15

                  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. The provisions of the Plan as in
                  effect at the time of a Participant's termination of
                  employment shall control as to that Participant, unless
                  otherwise specified in the Plan.

         B.       Authority to Act. The Compensation Committee or full Board of
                  Directors may act on behalf of the Company for purposes of the
                  Plan.

         C.       Interpretation of Plan. Any decision of the Compensation
                  Committee with respect to any issues concerning individuals
                  selected for awards, 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.       Effect of Award on Other Employee Benefits. By acceptance of a
                  bonus award, each recipient agrees that such award is special
                  additional compensation and that it will not affect any
                  employee benefit, e.g., life insurance, etc., in which the
                  recipient participates, except as provided in paragraph E.
                  below.

         E.       Retirement Programs. Awards made under this Plan shall be
                  included in the employee's compensation for purposes of the
                  STRATTEC SECURITY CORPORATION Retirement Plan and STRATTEC
                  SECURITY CORPORATION Employee Savings Investment Plan.

         F.       Right to Continued Employment; Additional Awards. The receipt
                  of a bonus award shall not give the recipient any right to
                  continued employment, and the right and power to dismiss any
                  employee is specifically reserved to the Company. 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 Compensation Committee shall not be
                  liable for, and shall be indemnified and held harmless by the
                  Company





                                       13
<PAGE>   16

                  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 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
                  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 such person(s) or hold such person(s)
                  harmless.

         B.       Expenses of the Plan. The expenses of administering this Plan
                  shall be borne by the Company.

         C.       Withholding Taxes. The Company shall have the right to deduct
                  from all payments under this Plan any Federal or state taxes
                  required by law to be withheld with respect to such payments.

         D.       Governing Law. This Plan shall be construed in accordance with
                  and governed by the laws of the State of Wisconsin.







                                       14
<PAGE>   17



                                    EXHIBIT A



                  The Senior Managers and corresponding Target Incentive Awards
referenced in Section V.B. are as follows:

                                                      Target Incentive Award
         Senior Manager                                 (% of Base Pay)












                                       1


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13.1
<SEQUENCE>8
<FILENAME>c64800ex13-1.txt
<DESCRIPTION>ANNUAL REPORT TO SHAREHOLDERS FOR YEAR END 7/1/01
<TEXT>
<PAGE>   1
 2001 ANNUAL REPORT


                                 [STRATTEC LOGO]

                                    STRATTEC

<PAGE>   2

FORGING AHEAD IN A GLOBAL ENVIRONMENT

         When STRATTEC produced its first ignition lock back in 1915, the idea
of a truly international marketplace for automotive technology would have seemed
far-fetched. But the Company kept pace with the development of the American
automobile industry through decades of growth; as technology advanced, STRATTEC
was in the vanguard. And as markets expanded and diversified, STRATTEC evolved
with the industry. Today, the Company is positioned for global growth with new
technologies, new partnerships, new markets ... these are the elements from
which our success is forged.
<TABLE>
<CAPTION>
CONTENTS

<S>                                                                         <C>
Financial Highlights .......................................................  1

Letter to Shareholders .....................................................  2

Company Description ........................................................  4

STRATTEC Equipped Vehicle List .............................................  9

Management's Discussion and Analysis ....................................... 10

Financial Statements ....................................................... 13

Report of Independent Public Accountants ................................... 22

Report of Management ....................................................... 22

Financial Summary .......................................................... 23

Directors/Officers/Shareholders Information ................................ 24
</TABLE>


STRATTEC SECURITY CORPORATION

STRATTEC SECURITY CORPORATION designs, develops, manufactures and markets
mechanical locks, electro-mechanical locks and related access control products
for global automotive manufacturers. Our products are shipped to customer
locations in the United States, Canada, Mexico, Europe and South America, and we
provide full service and aftermarket support. We also supply products for the
heavy truck, recreational vehicle, marine and industrial markets, as well as
precision die castings for the transportation, security and recreational
products industries.






<PAGE>   3

FINANCIAL HIGHLIGHTS

(In Millions)
<TABLE>
<CAPTION>
                                        2001                    2000                   1999
                                        ----                    ----                   ----
<S>                                 <C>                     <C>                     <C>
Net Sales                           $  203.0                $  224.8                $  202.6
Gross Profit                            40.2                    49.4                    46.8
Income from Operations                  20.6                    29.1                    26.6
Net Income                              13.0                    18.5                    17.0
Total Assets                           101.6                   109.0                   128.2
Total Debt                                 -                       -                       -
Shareholders' Equity                    60.0                    60.4                    82.3
</TABLE>

(In Millions)

        [NET SALES GRAPH] [NET INCOME GRAPH] [ECONOMIC VALUE ADDED EVA(R) GRAPH]

ECONOMIC VALUE ADDED (EVA(R))

        All U.S. associates and many of our Mexico-based salaried associates
participate in incentive plans that are based upon our ability to add economic
value to the enterprise. During 2001, $5.6 million of positive economic value
was generated, a decrease of $5.0 million compared to the economic value the
business generated in 2000. We continue to believe that EVA(R) represents
STRATTEC's ultimate measure of success and shareholder value.

<TABLE>
<S>                                          <C>       <C>
Net Operating Profit After Cash-Based Taxes            $12.9
Average Net Capital Employed                 $61.0
Capital Cost                                    12%
                                             -----
                                                         7.3
Economic Value Added                                   $ 5.6
                                                       =====
</TABLE>

EVA is a registered trademark of Stern, Stewart & Co.






                         2001 STRATTEC Annual Report 1
<PAGE>   4

A LETTER TO THE SHAREHOLDERS


Fellow Shareholders:

         Fiscal 2001 was one of those years a business would rather not
experience, but comes along every once in a while anyway during the existence of
a corporation. After a record production and sales year in fiscal 2000, we
started fiscal 2001 at a fast pace. By late fall, however, the slumping economy
significantly affected new-vehicle sales, and by mid-November, our customers
responded by cutting their production. The reductions in vehicle production in
November, December, January and February had the obvious effect on us, resulting
in reduced production at both our manufacturing locations and temporary layoffs
of our operations associates.

         While the economic slowdown has been an unpleasant experience for us as
well as most businesses in North America, it was not entirely unexpected. Some
forecasts had predicted a slowdown, and the incredible vigor of the auto
industry in the preceding several years made some kind of adjustment likely. We
therefore made it one of our missions for the fiscal year to optimize our
processes and eliminate costs in a more organized and focused manner. The
resulting cost-reduction teams made significant progress during the year,
identifying and implementing cost cutting amounting to an annualized $8 million.
These reductions came from finding and eliminating waste, revising operating
methods, and reducing employment levels. Had we not achieved these cost
reductions, the effects of the economic slowdown on our business would have been
more dramatic.

         In late December, one of our major customers abruptly announced that it
was unilaterally reducing all of its material purchase orders by 5%, effective
January 1st. We viewed this action as an arbitrary and unreasonable attempt to
mitigate that customer's negative financial condition resulting from its own
internal issues. Our position on this action is that we should not and cannot
allow our shareholders to suffer as a result of our customers' self-induced
problems. Nevertheless, that customer's partial success in forcing this action
on its supply base has encouraged other customers suffering under the economic
slowdown to increase pressure for price reductions as well. While we recognize
our customers' rationale for this price reduction pressure, we are looking, and
will continue to look, at solutions that are strategically fair and equitable
for STRATTEC, its shareholders and its customers.

         In March, we began negotiations with PACE Local 7-0232, the union
representing our hourly operations associates. These negotiations were conducted
in anticipation of the expiration of our then existing labor contract on May 31,
2001. On that date, both sides reached a tentative agreement for a new contract
which included an extension of the current contract until June 6, 2001 to allow
the union time to organize and call a ratification meeting of its members.
Despite the endorsement of the tentative agreement by both the union Bargaining
Committee and Executive Committee, the membership rejected the proposed contract
by a narrow margin, and a strike against the company began.

         The strike lasted 16 days, during which time we operated the Milwaukee
facility under a Strike Contingency Plan devised several months earlier. This
plan included the build-up of certain component and finished goods inventories
prior to May 31st, as well as an operating plan that used our salaried work
force to produce parts. Thanks to this plan and the dedication and enthusiasm of
our salaried employees, we were able to support our major customers'
requirements without interrupting their production processes.

         On June 22nd, after mediated negotiations, the union took another
tentative agreement before the membership. This agreement was again endorsed by
both the union Bargaining Committee and Executive Committee, and this time was
ratified by the members. Despite the strike and its effects on our fourth
quarter results, we believe the resulting 4-year contract is fair to both the
Company and its hourly represented associates, and should provide us
opportunities to continue to make changes for more efficient operations in our
Milwaukee facility.

         The pricing pressure we are receiving from our customers is a
continuation of prior years' experience, but is now heightened by the need for
these customers to reduce costs in the face of a very competitive but stagnate
market, and reduced automotive production at some of our their




                          2001 STRATTEC Annual Report 2

<PAGE>   5

A LETTER TO THE SHAREHOLDERS

assembly plants. To this end, we are seeing some attempts to reduce vehicle cost
by de-contenting - a tactic which reduces the overall amount of standard and/or
optional equipment on a vehicle. This is having an effect on our product by
reducing the number of locks per vehicle on certain models. While this does cut
cost for our customers, it reduces volume for us, on top of the already reduced
volumes resulting from the current market conditions.

        De-contenting of our lock set packages is a trend that is likely to
continue, as electronic remote key device usage increases as standard equipment
on new vehicles. We have been anticipating this potential, and the actions we
have taken to broaden our vehicle access product line were put in place
partially as a defense against this slow erosion of our traditional product
line.

        Expansion of our product line with additional access control products is
an important part of our Alliance with WiTTE. The Alliance was formalized with
the signing of legal agreements on November 28, 2000. To date, we have several
Alliance programs under way, including a lockset program with Saab in Sweden and
a hood latch program for Volkswagen in Mexico. Additionally, our WiTTE-STRATTEC
LLC joint venture has signed letters of intent with intended partners in Brazil
and China, and we are proceeding to formalize these relationships. We have one
committed vehicle program for Brazil, and four committed programs for China. In
addition, we are receiving quote requests for "global" vehicle programs. With
these developments, we are encouraged that our globalization strategy is working
for our customers and us.

        It is clear that the strategic challenges we have discussed in previous
annual reports are still before us. But we believe we have put into place the
necessary foundation upon which to build our future. In addition to the Alliance
structure we have created with Witte, we are actively seeking relationships with
other strategic partners that can further our interests and strengthen our
position as a global provider of vehicle access control components and systems.
We continue to develop our own in-house capabilities for designing, testing and
producing these products. And we continue to emphasize cost reduction and
efficiency enhancements in our existing processes to support our traditional
product business.

        As the ultimate measure of our performance, our goal was to deliver a
fifth consecutive year of increased EVA. Although we did not attain that goal,
we still created $5.6 million positive EVA in fiscal 2001, our third best year.
And we were able to deliver our second best year of earnings per share. We are
pleased to be able to continue adding value to your investment in STRATTEC. For
a more detailed discussion of financial operating results, please read the
Management's Discussion and Analysis of operating results on pages 10, 11 and 12
of this report.

        Despite fiscal 2001 being a difficult year for a number of reasons, we
have weathered the storm reasonably well, and look to the future with optimism.
We believe we are doing the right things to position our Company for additional
economic value creation in the immediate and long-term future. Your support
during this past year has been quite heartening, and we appreciate your
confidence in us. We look forward to justifying that confidence.

Sincerely,


/s/ Harold M. Stratton II                  /s/ John G. Cahill
Harold M. Stratton II                      John G. Cahill
Chairman and Chief Executive Officer       President and Chief Operating Officer



August, 2001




                          2001 STRATTEC Annual Report 3


<PAGE>   6

COMPANY DESCRIPTION



BASIC BUSINESS

        STRATTEC SECURITY CORPORATION designs, develops, manufactures and
markets mechanical locks, electro-mechanical locks, latches and related access
control products for major North American and global automotive manufacturers.
We also supply these products for the heavy truck, recreational vehicle, marine
and industrial markets. Through our alliance partner, WiTTE-Velbert Gmbh in
Germany, both companies' access control products are manufactured and marketed
globally. We also provide full service and aftermarket support.

[STRATTEC LOGO]

HISTORY

        STRATTEC formerly was a division of Briggs & Stratton Corporation. On
February 27, 1995, STRATTEC was spun off from Briggs & Stratton through a
tax-free distribution to the then-existing Briggs shareholders. STRATTEC
received substantially all of the assets and liabilities related to the lock and
key business owned by Briggs & Stratton.

        Starting as a division of Briggs & Stratton, and continuing today as a
totally separate and independent company, we have a history in the automotive
lock manufacturing business spanning over 85 years. We also have been in the
zinc die-casting business for more than 75 years. STRATTEC has been the world's
largest producer of automotive locks and keys since the late 1920s, and we
currently maintain a dominant share of the North American markets for these
products.


PRODUCTS

        Our principal products are locks and keys for cars and trucks. A typical
automobile contains a set of five locks: a steering column/ignition lock, a
glove box lock, two front door locks and a deck lid (trunk) lock. Pickup trucks
typically use three to four locks, while sport utility vehicles and vans use
five to seven locks. Some vehicles have additional locks for under-floor
compartments or folding rear seat latches. T-top locks, spare tire locks and
burglar alarm locks also are offered as options. Usually two keys are provided
with each vehicle lockset. Additional products include zinc die cast steering
column lock housings, and an electronic Vehicle Access Control System (VACS).

[PICTURE OF KEY]

         VACS is a passive security system for commercial delivery vehicles.
It's an example of our ability to effectively integrate mechanical and
electronic components such as Radio Frequency Identification (RFID) and Hall
Effect sensors.




                          2001 STRATTEC Annual Report 4
<PAGE>   7

COMPANY DESCRIPTION

         Through our alliance with WiTTE-Velbert in Germany, we are expanding
our automotive access control product offerings to include hood latches, trunk
or liftgate latches, door latches, door handles, and vehicle access modules that
contain some or all of these components.


MARKETS

        We are a direct supplier to OEM auto and light truck manufacturers, to
over-the-road heavy truck manufacturers and recreational vehicle manufacturers,
as well as to other transportation-related manufacturers. For the 2001 model
year, we enjoyed a 62% market share in the North American automotive industry,
supplying locks and keys for approximately 84% of General Motors' production,
63% of Ford's, 97% of DaimlerChrysler's and 100% of Mitsubishi's production. We
also are an OEM components supplier to other "Tier 1" automotive suppliers and a
wide array of smaller industrial manufacturers.

        Direct sales to various OEMs represent approximately 82% of our total
sales. The remainder of the company's revenue is received primarily through
sales to the OEM service channels, and the locksmith aftermarket.

[PICTURE OF WAREHOUSE]

        Sales to our major automotive customers are coordinated through our
direct sales personnel located in our Detroit-area office. Sales also are
partially facilitated through daily interaction between our application
engineers located in Detroit and customer engineering departments. Sales to
other OEM customers are accomplished through a combination of our own sales
personnel and manufacturer representative agencies.

        STRATTEC's products are supported by an extensive staff of experienced
lock and latch engineers. This staff, which includes product design, quality and
manufacturing engineers, is capable of providing complete design, development
and testing services of new products for our customers. This staff also is
available for customer problem solving, warranty analysis and other activities
that arise during a product's life cycle. Our customers receive aftersales
support in the form of special field service kits, service manuals, and specific
in-plant production repair programs.

        The majority of our OEM products are sold in North America. However, our
dominance in the North American market translates into a world market share of
around 20%, making STRATTEC the largest producer of automotive locks and keys in
the world. While a modest amount of exporting is done to automotive assembly
plants in Europe and South America, we are in the process of expanding our
presence in these markets and elsewhere through our alliance with WiTTE-Velbert
Gmbh.



                          2001 STRATTEC Annual Report 5

<PAGE>   8

COMPANY DESCRIPTION

        OEM service and replacement parts are sold to the OEM's own service
operations. In addition, we distribute our components and security products to
the automotive aftermarket through approximately 60 authorized wholesale
distributors, as well as other marketers and users of component parts, including
export customers. These aftermarket activities are serviced through a
warehousing operation integral to our Milwaukee headquarters and manufacturing
facility.


CUSTOMER FOCUS

        Since the majority of the company's sales are to the "Big Three" North
American automotive manufacturers, STRATTEC is organized to assure that our
activities are focused on these major customers and their associated entities.
We have customer-focused teams for General Motors, for Ford, for
DaimlerChrysler/Mitsubishi and for Delphi Automotive Systems. A fifth team deals
with programs and new products associated with our alliance partner,
WiTTE-Velbert, while a sixth team handles our industrial and service customers,
including such heavy truck manufacturers as Peterbilt, Kenworth, Mack,
Freightliner, Navistar and Volvo.

[STRATTEC LOGO]

        Each of the six teams possesses all of the necessary disciplines
required to meet their customers' needs. Leading each team's efforts are Product
Business Managers who handle the overall coordination of various product
programs. The Product Business Managers work closely with their team's quality
engineers, cost engineers, purchasing agents, internal and external customer
service representatives, service manager, and engineering manager. The
engineering manager in turn helps coordinate the efforts of design engineers,
product and process engineers, component engineers, and electrical engineers.

        STRATTEC uses a formalized product development process to identify and
meet customer needs in the shortest possible time. By creating and following
this streamlined development system, we shorten product lead times, tighten our
response to market changes, and provide our customers with the optimum value
solution to their security requirements. STRATTEC also is QS-9000/ISO 9001
certified. This means we embrace the philosophy that quality should exist not
only in the finished product, but in every step of our process as well.


OPERATIONS

        Most of the components that go into our products are manufactured at our
main facility and headquarters in Milwaukee, Wisconsin. This facility

[PICTURE OF MANUFACTURING FACILITY]


                          2001 STRATTEC Annual Report 6
<PAGE>   9
COMPANY DESCRIPTION


also makes zinc die cast components for other manufacturers. Assembly is
performed at the Milwaukee location and at our primary assembly facility,
located in Jurez, Mexico.

[PHOTO OF ASSEMBLY FACILITY IN MEXICO]

ADVANCED DEVELOPMENT

         Research and development activities are centered around a dedicated
research engineering staff we call our Advanced Development Group. This Group
has the responsibility for developing future products and processes that will
keep us in the forefront of the markets we serve. Projects we are pursuing focus
on electronic and mechanical access control products, modularization of related
access control components, and new manufacturing processes to reduce costs for
ourselves and our customers.

ALLIANCE

         Our alliance with WiTTE-Velbert Gmbh consists of two main initiatives.
The first is a set of cross-licensing agreements which allows STRATTEC to
manufacture, market and sell WiTTE products in North America, and allows WiTTE
to manufacture, market and sell STRATTEC products in Europe. In this way, both
STRATTEC and WiTTE have established international reach for their respective
products and services, while sharing the potential profits of those products
sold outside of their respective home markets.

[CAR GRAPHIC]

[WITTE STRATTEC LOGO]


         The second initiative is a 50-50 joint venture company, WiTTE-STRATTEC
LLC, which is the corporate entity through which we and WiTTE are pursuing
emerging markets outside of Europe and North America.

Additionally, through WiTTE-STRATTEC LLC, the two companies will jointly own the
intellectual property rights for any products that result from the coordinated
activities of their respective research and development resources.

                          2001 STRATTEC Annual Report 7

<PAGE>   10

COMPANY DESCRIPTION

CYCLICAL NATURE OF THE BUSINESS

         The manufacturing of components used in automobiles is driven by the
normal peaks and valleys associated with the automotive industry. Typically, the
months of July and August are relatively slow as summer vacation shutdowns and
model year changeover occur at the automotive assembly plants. September volumes
increase rapidly as the new model year begins. This volume strength continues
through October and into early November. As the holiday and winter seasons
approach, the demand for automobiles slows. March usually brings a major sales
and production increase, which then continues through most of June. This results
in our first fiscal quarter (ending in September) sales and operating results
typically being our weakest, with the remaining quarters being more consistent.

ECONOMIC VALUE COMMITMENT

         The underlying philosophy of our business, and the means by which we
measure our performance, is Economic Value Added (EVA(R)). Simply stated,
economic value is created when our business enterprise yields a return greater
than the cost of capital we and our shareholders have invested in STRATTEC. The
amount by which our return exceeds the cost of our capital is EVA(R). In line
with this philosophy, EVA(R) bonus plans are in effect for our associates and
our outside directors as an incentive to help positively drive the business.

         STRATTEC's significant market share is the result of an
eight-decade-long commitment to creating quality products and systems that are
responsive to changing needs. As technologies advance and markets grow, STRATTEC
retains that commitment to meeting and exceeding the expectations of our
customers, and providing economic value to our shareholders.

GLOBAL PARTNERS


[GLOBAL MAP]

1. STRATTEC - Milwaukee, Wisconsin             4. WITTE - Nejdek, Czech Republic
2. STRATTEC de Mexico - Juarez, Mexico         5. IFER - Sao Paulo, Brazil
3. WITTE - Velbert, Germany                    6. ZU YIH - Fuzhou, China

                          2001 STRATTEC Annual Report 8

<PAGE>   11



VEHICLE LIST

2002 VEHICLES

         We're proud of the quality vehicles that use STRATTEC components. They
include over-the-road trucks like Peterbilt, Kenworth, Mack, Freightliner,
Navistar and Volvo. And recreational vehicles such as Winnebago. Also, the
following model year 2002 cars and light trucks:

<TABLE>
<CAPTION>
CARS
<S>                                 <C>                          <C>
Buick Century                       Chrysler Concorde            Jaguar S-Type
Buick La Sabre                      Chrysler 300M                Lincoln Continental
Buick Park Avenue                   Chrysler LHS                 Lincoln LS
Buick Regal                         Chrysler Prowler             Mercury Sable
Cadillac Deville                    Chrysler PT Cruiser          Mitsubishi Eclipse
Cadillac Eldorado                   Chrysler Sebring             Mitsubishi Galant
Chevrolet Camaro                    Dodge Intrepid               Oldsmobile Alero
Chevrolet Cavalier                  Dodge Neon                   Oldsmobile Intrigue
Chevrolet Corvette                  Dodge Stratus                Pontiac Firebird
Chevrolet Impala                    Dodge Viper                  Pontiac Grand Am
Chevrolet Lumina                    Ford Taurus                  Pontiac Grand Prix
Chevrolet Malibu                    Ford Thunderbird             Pontiac Sunfire
Chevrolet Monte Carlo               GM Impact EV1                Saturn L Series
</TABLE>


<TABLE>
<CAPTION>
LIGHT TRUCKS, VANS AND SPORT UTILITY VEHICLES
<S>                                 <C>                          <C>
Cadillac Escalade                   Dodge Ramcharger             GMC Sonoma Pickup
Cadillac EXT                        Dodge Ram Pickup             GMC Yukon
Chevrolet Astro                     Dodge Ram Van/Wagon          GMC Yukon XL
Chevrolet Avalanche                 Ford Excursion               Isuzu Hombre Pickup
Chevrolet Silverado Pickup          Ford Expedition              Jeep Grand Cherokee
Chevrolet Express                   Ford Explorer                Jeep Liberty
Chevrolet S-10 Pickup               Ford Explorer Sport          Jeep Wrangler
Chevrolet Suburban                  Ford Explorer Sport Trac     Lincoln Blackwood
Chevrolet Tahoe                     Ford F-Series Pickup         Lincoln Navigator
Chevrolet Trailblazer               Ford Ranger Pickup           Mazda B-Series Pickup
Chevrolet Venture                   GMC Envoy                    Mercury Mountaineer
Chrysler Town & Country             GMC Denali                   Mercury Villager
Chrysler Voyager                    GMC Jimmy                    Nissan Quest
Dodge Caravan/Grand Caravan         GMC Safari                   Oldsmobile Bravada
Dodge Dakota Pickup                 GMC Savana                   Oldsmobile Silhouette
Dodge Durango                       GMC Sierra Pickup            Pontiac Montana
</TABLE>


                          2001 STRATTEC Annual Report 9

<PAGE>   12

MANAGEMENT'S DISCUSSION AND ANALYSIS

The following Discussion and Analysis should be read in conjunction with the
Company's Financial Statements and Notes thereto. Unless otherwise indicated,
all references to years refer to fiscal years.

RESULTS OF OPERATIONS
2001 COMPARED TO 2000

         Net sales were $203.0 million in 2001 compared to $224.8 million in
2000. The prior year included one additional shipping week, which contributed to
the overall sales reduction. Sales to the Company's largest customers overall
decreased in the current year compared to the record prior year levels, with
General Motors at $60.2 million compared to $69.0 million, Delphi Automotive
Systems Corporation at $26.9 million compared to $31.5 million, DaimlerChrysler
Corporation at $33.9 million compared to $35.1 million, and Ford Motor Company
at $45.3 million compared to $54.5 million. Sales to Mitsubishi Motor
Manufacturing of America actually increased from $9.4 million to $11.8 million.
The overall sales decrease is the result of reduced vehicle production at our
customer's assembly plants.

         Gross profit as a percentage of net sales was 19.8 percent in 2001
compared to 22.0 percent in 2000. The lower gross margin is the result of
several factors, including a 16-day strike in June 2001 at the Company's
Milwaukee facility which resulted in additional costs to support customer
requirements; reduced efficiencies at the Company's Mexican facility; and
reduced sales due to delayed shipments. Also negatively impacting the current
year margin was less favorable absorption of manufacturing costs due to reduced
production volumes resulting from customer plant shutdowns, an overall decline
in automotive production, and a reduction in the Company's inventory levels in
comparison to the prior year. Additional items impacting the gross margin
include an increase in the cost of zinc, and increased U.S. dollar costs at the
Company's Mexico assembly facility. The average cost of zinc per pound, which
the Company uses at a rate of approximately 1 million pounds per month,
increased to approximately $.57 in 2001, from approximately $.55 in 2000. The
increased U.S. dollar costs at the Company's Mexico assembly facility are the
result of the appreciation of the Mexican peso and overall inflation in Mexico
in the current year. The inflation rate in Mexico for the 12 months ended June
2001 was approximately 7 percent while the U.S. dollar/Mexican peso exchange
rate fell to approximately 9.4 in 2001, from approximately 9.5 in 2000.

         Engineering, selling and administrative expenses were $19.7 million, or
9.7 percent of net sales in 2001, compared to $20.3 million, or 9.0 percent of
net sales in 2000. The decreased operating expenses are attributed to one less
week of operating expenses in the current year compared to the prior year and
the impact of cost savings realized as a result of the human resources
realignment, which took place in the third quarter of fiscal 2001.

         Income from operations was $20.6 million in 2001, compared to $29.1
million in 2000, reflecting the decreased sales volume and reduced gross margin
as discussed above.

         The effective income tax rate in 2001 was 37.0 percent compared to 39.0
percent in 2000. The reduction is due to an increase in the foreign sales
benefit. The overall effective rate differs from the federal statutory tax rate
primarily due to the effects of state income taxes.

RESULTS OF OPERATIONS
2000 COMPARED TO 1999

         Net sales were $224.8 million in 2000, an increase of 11 percent
compared to net sales of $202.6 million in 1999. Fiscal 2000 included one
additional shipping week, which contributed to the overall sales growth. Sales
to General Motors Corporation and Delphi Automotive Corporation increased 10
percent to $100.5 million as a result of increased unit production by these
customers. In addition, labor disruptions at General Motors Corporation during
July 1998 reduced sales to this customer by an estimated $3 million during the
fiscal 1999 September quarter. Sales to DaimlerChrysler Corporation increased 14
percent to $35.1 million. The increase was due primarily to increased vehicle
production schedules and higher value mechanical and electrical content in the
locksets the Company supplies. Sales to Mitsubishi Motor Manufacturing of
America increased to $9.4 million in 2000 compared to $2.2 million in 1999. This
is due to an increase in the Company's share of this customer's production
requirements with the launch of the 2000 Eclipse. Sales to the Ford Motor
Company were comparable to 1999.

         Gross profit as a percentage of net sales was 22.0 percent in 2000
compared to 23.1 percent in 1999. The lower gross margin is the result of
several factors including higher production start-up costs relating to the
launch of the new model year 2000 vehicles, investment


                          2001 STRATTEC Annual Report 10

<PAGE>   13

MANAGEMENT'S DISCUSSION AND ANALYSIS 2001

in process changes, facilities rearrangement and training associated with Lean
Manufacturing initiatives, product mix, and increased U.S. dollar costs at the
Company's Mexico assembly facility. The major portion of the facility's
rearrangement was completed during the first three months of fiscal 2001, and
benefits were being realized in the form of cost reduction, inventory reduction
and the enhanced ability to meet continually increasing customer requirements
for productivity and quality. The increased U.S. dollar costs at the Company's
Mexico assembly facility are the result of the appreciation of the Mexican peso
and higher wage inflation in comparison to 1999. The inflation rate in Mexico
for the 12 months ended June 2000 was approximately 10 percent while the U.S.
dollar/Mexican peso exchange rate fell to approximately 9.5 in 2000, from
approximately 9.8 in 1999. In addition, the average cost of zinc per pound,
which the Company uses at a rate of approximately 1 million pounds per month,
increased to approximately $.55 in 2000, from approximately $.52 in 1999.

         Engineering, selling and administrative expenses were $20.3 million, or
9.0 percent of net sales in 2000, compared to $20.2 million, or 10.0 percent of
net sales in 1999. Fiscal 2000 expense levels reflect the favorable impact of
moving the Company's service aftermarket warehouse and distribution to the
Milwaukee facility in April 1999. Also, included in current year expenses are
development activities associated with new products and the Company's
globalization activities with its alliance partner, WiTTE-Velbert GmbH & Co. KG.

         Income from operations was $29.1 million in 2000, compared to $26.6
million in 1999, reflecting the increased sales volume as previously discussed.

         The effective income tax rate in 2000 was 39.0 percent compared to 38.1
percent in 1999. This is due to an increase in the state effective tax rate. The
overall effective rate differs from the federal statutory tax rate primarily due
to the effects of state income taxes.

LIQUIDITY AND CAPITAL RESOURCES

         The Company generated cash from operating activities of $23.2 million
in 2001 compared to $36.0 million in 2000. The reduction in the generation of
cash is due to several factors including decreased sales levels as previously
discussed and a reduction in accounts payable and accrued liabilities in 2001 as
opposed to an increase in 2000. The changes in accounts payable and accrued
liabilities each year were primarily in response to production levels and
financial results. In addition, accounts receivable decreased by approximately
$1.5 million at July 1, 2001, as compared to July 2, 2000, primarily due to
decreased sales. Inventory balances decreased by approximately $5.7 million
during the same period as a result of decreased customer vehicle production
levels, company focused efforts and the 16-day strike during June 2001 at the
Milwaukee facility.

        Capital expenditures in 2001 were $7.5 million, compared to $9.4 million
in 2000. Expenditures primarily were in support of requirements for new product
programs and the upgrade and replacement of existing equipment. The Company
anticipates that capital expenditures will be approximately $8 million in fiscal
2002, primarily in support of requirements for new product programs and the
upgrade and replacement of existing equipment.

        The Board of Directors of the Company has authorized a stock repurchase
program to buy back up to 2,639,395 outstanding shares. A total of 2,160,026
shares have been repurchased as of July 1, 2001, at a cost of approximately
$69.0 million. Additional repurchases may occur from time to time. Funding for
the repurchases was provided primarily from cash flow from operations and to a
lesser extent from borrowings under existing credit facilities.

         The Company has a $50.0 million unsecured, revolving credit facility
(the "Credit Facility"), of which $30 million expires October 31, 2001, and $20
million expires October 31, 2003. There were no outstanding borrowings under the
Credit Facility at July 1, 2001. Interest on borrowings under the Credit
Facility are at varying rates based, at the Company's option, on the London
Interbank offering rate, the Federal Funds Rate, or the bank's prime rate. The
Credit Facility contains various restrictive covenants including those that
require the Company to maintain minimum levels for certain financial ratios such
as tangible net worth, ratio of indebtedness to tangible net worth and fixed
charge coverage. The Company believes that the Credit Facility will be adequate,
along with cash flow from operations, to meet its anticipated capital
expenditure, working capital and operating expenditure requirements.

         The Company has not been significantly impacted by inflationary
pressures over the last several years, except for zinc and Mexican assembly
operations as noted elsewhere in this Management's Discussion and Analysis.

                          2001 STRATTEC Annual Report 11

<PAGE>   14

MANAGEMENT'S DISCUSSION AND ANALYSIS

MEXICAN OPERATIONS

         The Company has assembly operations in Juarez, Mexico. Since December
28, 1998, the functional currency of the Mexican operation has been the Mexican
peso. The effects of currency fluctuations result in adjustments to the U.S.
dollar value of the Company's net assets and to the equity accounts in
accordance with Statement of Financial Accounting Standard (SFAS) No. 52,
"Foreign Currency Translation."

OTHER

         On November 28, 2000, the Company signed certain alliance agreements
with E. WiTTE Verwaltungsgesellschaft GMBH, and its operating unit,
WiTTE-Velbert GmbH & Co. KG ("WiTTE"). WiTTE, of Velbert, Germany, is a
privately held, QS 9000 and VDA 6.1 certified automotive supplier with sales of
DM313 million in its last fiscal year. WiTTE designs, manufactures and markets
components including locks and keys, hood latches, rear compartment latches,
seat back latches, door handles and specialty fasteners. WiTTE's primary market
for these products has been Europe. The WiTTE-STRATTEC alliance provides a set
of cross-licensing agreements for the manufacture, distribution and sale of
WiTTE products by the Company in North America, and the manufacture,
distribution and sale of the Company's products by WiTTE in Europe.
Additionally, a joint venture company ("WiTTE-STRATTEC LLC") in which each
company holds a 50 percent interest has been established to seek opportunities
to manufacture and sell both companies' products in other areas of the world
outside of North America and Europe. These activities did not have a material
impact on the July 1, 2001, financial statements.

PROSPECTIVE INFORMATION

         A number of the matters and subject areas discussed in this Annual
Report contain "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements may be identified by
the use of forward-looking words or phrases such as "anticipate," "believe,"
"could," "expect," "intend," "may," "planned," "potential," "should," "will,"
and "could." These include expected future financial results, product offerings,
global expansion, liquidity needs, financing ability, planned capital
expenditures, management's or the Company's expectations and beliefs, and
similar matters discussed in the Company's Management's Discussion and Analysis.
The discussions of such matters and subject areas are qualified by the inherent
risk and uncertainties surrounding future expectations generally, and also may
materially differ from the Company's actual future experience.

         The Company's business, operations and financial performance are
subject to certain risks and uncertainties, which could result in material
differences in actual results from the Company's current expectations. These
risks and uncertainties include, but are not limited to, general economic
conditions, in particular those relating to the automotive industry, customer
demand for the Company's and its customers' products, competitive and
technological developments, customer purchasing actions, foreign currency
fluctuations and costs of operations.

         Shareholders, potential investors and other readers are urged to
consider these factors carefully in evaluating the forward-looking statements
and are cautioned not to place undue reliance on such forward-looking
statements. The forward-looking statements made herein are only made as of the
date of this Annual Report and the Company undertakes no obligation to publicly
update such forward-looking statements to reflect subsequent events or
circumstances occurring after the date of this Annual Report.


                         2001 STRATTEC Annual Report 12

<PAGE>   15

CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                    Fiscal Years Ended
                                        ---------------------------------------------
                                        July 1, 2001     July 2, 2000   June 27, 1999
                                        ------------     ------------   -------------
<S>                                     <C>              <C>            <C>
NET SALES                                 $ 202,973        $224,817       $ 202,625
Cost of goods sold                          162,735         175,459         155,821
                                          ---------        --------       ---------
   GROSS PROFIT                              40,238          49,358          46,804
Engineering, selling and
   administrative expenses                   19,676          20,254          20,191
                                          ---------        --------       ---------

   INCOME FROM OPERATIONS                    20,562          29,104          26,613
Interest income                                 628           1,056           1,132
Interest expense                                  -               -               -
Other income (expense), net                    (514)            189            (239)
                                          ---------        --------       ---------
   INCOME BEFORE PROVISION FOR
   INCOME TAXES                              20,676          30,349          27,506
Provision for income taxes                    7,650          11,836          10,491
                                          ---------        --------       ---------

NET INCOME                                $  13,026        $ 18,513       $  17,015
                                          =========        ========       =========

EARNINGS PER SHARE:
   BASIC                                  $    3.02        $   3.75       $    3.02
                                          =========        ========       =========
   DILUTED                                $    2.96        $   3.65       $    2.94
                                          =========        ========       =========
</TABLE>

The accompanying notes are an integral part of these consolidated statements.


                         2001 STRATTEC Annual Report 13

<PAGE>   16


CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                     July 1, 2001     July 2, 2000
                                                                     ------------     ------------
<S>                                                                  <C>              <C>
ASSETS
CURRENT ASSETS
   Cash and cash equivalents                                          $  15,298         $  13,915
   Receivables, less allowance for doubtful
      accounts of $250 at July 1, 2001,
      and July 2, 2000                                                   27,189            28,731
   Inventories                                                            8,605            14,342
   Customer tooling in progress                                           2,588             4,248
   Future income tax benefits                                             1,880             2,092
   Other current assets                                                   4,107             3,273
                                                                      ---------         ---------
         Total current assets                                            59,667            66,601
DEFERRED INCOME TAXES                                                       130                 -
PROPERTY, PLANT, AND EQUIPMENT, NET                                      41,851            42,381
                                                                      ---------         ---------
                                                                      $ 101,648         $ 108,982
                                                                      =========         =========


LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
   Accounts payable                                                   $  14,178         $  19,694
   Accrued liabilities:
      Payroll and benefits                                                7,501            10,394
      Environmental                                                       2,749             2,770
      Income taxes                                                          354                47
      Other                                                               1,711             1,196
                                                                      ---------         ---------
         Total current liabilities                                       26,493            34,101
DEFERRED INCOME TAXES                                                         -               299
BORROWINGS UNDER REVOLVING CREDIT FACILITY                                    -                 -
ACCRUED PENSION OBLIGATIONS                                              10,617             9,839
ACCRUED POST-RETIREMENT OBLIGATIONS                                       4,528             4,293
SHAREHOLDERS' EQUITY
   Common stock, authorized 12,000,000 shares
      $.01 par value, issued 6,195,889 shares
      at July 1, 2001, and 6,120,788 shares at
      July 2, 2000                                                           62                61
   Capital in excess of par value                                        49,545            47,924
   Retained earnings                                                     80,990            67,964
   Accumulated other comprehensive loss                                  (1,749)           (2,239)
   Less: Treasury stock, at cost (2,149,800 shares at
      July 1, 2001, and 1,668,179 shares at July 2, 2000)               (68,838)          (53,260)
                                                                      ---------         ---------
         Total shareholders' equity                                      60,010            60,450
                                                                      ---------         ---------
                                                                      $ 101,648         $ 108,982
                                                                      =========         =========
</TABLE>

The accompanying notes are an integral part of these consolidated balance sheets


                         2001 STRATTEC Annual Report 14
<PAGE>   17
CONSOLIDATED STATEMENTS OF CHANGE IN EQUITY (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                 Accumulated
                                         Capital in                 Other
                              Common     Excess of  Retained    Comprehensive  Treasury  Comprehensive
                              Stock      Par Value  Earnings        Loss         Stock       Income
                              -----      ---------  --------    -------------  --------  -------------
<S>                           <C>        <C>        <C>         <C>           <C>       <C>


BALANCE,
JUNE 28, 1998                 $59        $42,489    $32,436     $(1,863)      $(2,723)
Net income                      -              -     17,015           -             -       $17,015
Translation adjustments         -              -          -        (218)            -          (218)
                                                                                            -------
Comprehensive income                                                                        $16,797
                                                                                            =======
Purchase of common stock        -              -          -           -        (6,416)
Exercise of stock options,
  including tax benefit
  of $415                       -          1,510          -           -            56
                              ---        -------    -------     -------       -------


BALANCE,
JUNE 27, 1999                  59         43,999     49,451      (2,081)       (9,083)
                              ===        =======    =======     =======       =======
Net income                      -              -     18,513           -             -       $18,513
Translation adjustments         -              -          -        (158)            -          (158)
                                                                                            -------
Comprehensive income                                                                        $18,355
                                                                                            =======
Purchase of common stock        -              -          -           -       (44,230)
Exercise of stock options,
  including tax benefit
  of $1,109                     2          3,925          -           -            53
                              ---        -------    -------     -------      --------

BALANCE,
JULY 2, 2000                   61         47,924     67,964      (2,239)      (53,260)
                              ===        =======    =======     =======      ========

Net income                      -              -     13,026           -             -       $13,026
Translation adjustments         -              -          -         490             -           490
                                                                                            -------
Comprehensive income                                                                        $13,516
                                                                                            =======
Purchase of common stock        -              -          -           -       (15,620)
Exercise of stock options,
  including tax benefit
  of $436                       1          1,621          -           -            42
                              ---        -------    -------     -------      --------

BALANCE,
JULY 1, 2001                  $62        $49,545    $80,990     $(1,749)     $(68,838)
                              ===        =======    =======     =======      ========
</TABLE>



The accompanying notes are an integral part of these consolidated statements.

                         2001 STRATTEC Annual Report 15


<PAGE>   18
CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                        Fiscal Years Ended

                                                         July 1, 2001  July 2, 2000    June 27, 1999
                                                         ------------  ------------    -------------
<S>                                                      <C>           <C>             <C>


CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                              $13,026         $18,513         $17,015
  Adjustments to reconcile net income to
     net cash provided by operating activities:
     Depreciation                                           7,939           7,576           7,107
     Loss on disposition of property,
        plant and equipment                                   201             254             463
     Deferred taxes                                          (312)            392              (7)
     Change in operating assets and liabilities:
        (Increase) decrease in receivables                  1,639           7,294         (10,788)
        (Increase) decrease in inventories                  5,737            (538)          1,158
        (Increase) decrease in other assets                   960          (1,284)          4,510
        Increase (decrease) in accounts payable
            and accrued liabilities                        (6,830)          2,957           8,156
        Tax benefit from options exercised                    436           1,109             415
        Other, net                                            439            (260)            (91)
                                                          -------          ------          ------
        Net cash provided by
            operating activities                           23,235          36,013          27,938
                                                          =======          ======          ======

CASH FLOWS FROM INVESTING ACTIVITIES
  Additions to property, plant and equipment               (7,548)         (9,357)         (8,831)
  Proceeds received on sale of property,
    plant and equipment                                        88               7              15
                                                          -------          ------          ------
        Net cash used in investing activities              (7,460)         (9,350)         (8,816)
                                                          =======          ======          ======

CASH FLOWS FROM FINANCING ACTIVITIES
  Purchase of common stock                                (15,620)        (44,230)         (6,416)
  Exercise of stock options                                 1,228           2,871           1,151
                                                          -------          ------          ------
        Net cash used in financing activities             (14,392)        (41,359)         (5,265)
                                                          =======          ======          ======

NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                                      1,383         (14,696)         13,857

CASH AND CASH EQUIVALENTS
  Beginning of year                                        13,915          28,611          14,754
                                                          -------          ------          ------
  End of year                                             $15,298         $13,915         $28,611
                                                          =======          ======          ======

SUPPLEMENTAL DISCLOSURE OF
  CASH FLOW INFORMATION
  Income taxes paid                                        $7,101         $10,880         $ 9,882
  Interest paid                                                 -               -               -

</TABLE>

The accompanying notes are an integral part of these consolidated statements.


                         2001 STRATTEC Annual Report 16

<PAGE>   19
NOTES TO FINANCIAL STATEMENTS



ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        STRATTEC SECURITY CORPORATION (the "Company") designs, develops,
manufactures and markets mechanical locks, electro-mechanical locks and related
access-control products for North American and global automotive manufacturers.
        The significant accounting policies followed by the Company in the
preparation of these financial statements, as summarized in the following
paragraphs, are in conformity with accounting principles generally accepted in
the United States.

        PRINCIPLES OF CONSOLIDATION AND PRESENTATION: The accompanying financial
statements reflect the consolidated results of the Company, its wholly owned
Mexican subsidiary, and its foreign sales corporation.

        Certain amounts previously reported have been reclassified to conform to
the July 1, 2001, presentation. These reclassifications have no effect on
previously reported net income or retained earnings.

        FISCAL YEAR: The Company's fiscal year ends on the Sunday nearest June
30. The years ended July 1, 2001, July 2, 2000, and June 27, 1999 are comprised
of 52, 53 and 52 weeks, respectively.

        USE OF ESTIMATES: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses during
the reporting periods. Actual results could differ from those estimates.

        FAIR VALUE OF FINANCIAL INSTRUMENTS: The fair value of financial
instruments does not materially differ from their carrying values.

        CASH AND CASH EQUIVALENTS: Cash and cash equivalents include all
short-term investments with an original maturity of three months or
less.

        INVENTORIES:  Inventories are stated at cost,  which does not exceed
market.  The last-in,  first-out  (LIFO) method was used for determining the
cost of the inventories at the end of each period.

        Inventories consist of the following (thousands of dollars):

<TABLE>
<CAPTION>
                          July 1,       July 2,
                           2001          2000
                          -------       -------
<S>                      <C>           <C>

Finished products        $ 1,737       $ 3,630
Work in process            8,456        12,374
Raw materials                594         1,054
LIFO adjustment           (2,182)       (2,716)
                         -------       -------
                         $ 8,605       $14,342
                         =======       =======
</Table>

        CUSTOMER TOOLING IN PROGRESS: The Company accumulates its costs for
development of certain tooling used in component production and assembly. The
costs, which are primarily from third-party tool vendors, are accumulated on the
Company's balance sheet. These amounts are then billed to the customer upon
formal acceptance by the customer of products produced with the individual tool.

        PROPERTY, PLANT, AND EQUIPMENT:  Property, plant, and equipment are
stated at cost, and depreciation is computed using the straight-line method over
the following estimated useful lives:

<Table>
<CAPTION>

                                   Expected
Classification                   Useful Lives
- --------------                   ------------
<S>                              <C>

Land improvements                20 years
Buildings and improvements       20 to 35 years
Machinery and equipment          3 to 10 years

</Table>

        Property, plant, and equipment consist of the following (thousands of
dollars):

<Table>
<CAPTION>

                              July 1,    July 2,
                               2001       2000
                              -------    -------
<S>                          <C>         <C>

Land                          $ 1,389   $ 1,317
Buildings and improvements     11,780    11,205
Machinery and equipment        82,939    77,390
                              -------   -------
                               96,108    89,912
Less: accumulated
   depreciation               (54,257)  (47,531)
                              -------   -------
                              $41,851   $42,381
                              =======   =======
</TABLE>

        Expenditures for repairs and maintenance are charged to expense as
incurred. Expenditures for major renewals and betterments, which significantly
extend the useful lives of existing plant and equipment, are capitalized and
depreciated. Upon retirement or disposition of plant and equipment, the cost and
related accumulated depreciation are removed from the accounts and any resulting
gain or loss is recognized in income.

        REVENUE RECOGNITION: Revenue is recognized upon the shipment of
products, net of estimated costs of returns and allowances.

        RESEARCH AND DEVELOPMENT COSTS:  Expenditures relating to the
development of new products and processes, including significant improvements
and refinements to existing products, are expensed as incurred.

        FOREIGN CURRENCY TRANSLATION: Since December 28, 1998, the
functional currency of the Mexican operation has been the Mexican peso.
The effects of currency fluctuations result in adjustments to the U.S.
dollar value of the Company's net assets and to the equity accounts in
accordance with Statement of Financial Accounting Standard (SFAS) No. 52,
"Foreign Currency Translation."

                         2001 STRATTEC Annual Report 17

<PAGE>   20
NOTES TO FINANCIAL STATEMENTS

        ACCUMULATED OTHER COMPREHENSIVE LOSS: The only component
of accumulated other comprehensive loss is cumulative translation
adjustments. Deferred taxes have not been provided for the
translation adjustments in accordance with SFAS No. 109,
"Accounting for Income Taxes."

        DERIVATIVE INSTRUMENTS: SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," establishes accounting and reporting
standards requiring that certain derivative instruments be recorded in the
balance sheet as either an asset or liability measured at its fair value. The
Company currently does not hold any such derivative instruments.

REVOLVING CREDIT FACILITY

        The Company has a $50 million unsecured, revolving credit facility (the
"Credit Facility"), of which $30 million expires October 31, 2001, and $20
million expires October 31, 2003. Interest on borrowings under the Credit
Facility are at varying rates based, at the Company's option, on the London
Interbank Offering Rate, the Federal Funds Rate, or the bank's prime rate. There
were no outstanding borrowings at July 1, 2001, or July 2, 2000. There were no
borrowings under the credit facility during the years ended July 1, 2001, and
July 2, 2000.

        The Credit Facility contains various restrictive covenants that require
the Company to maintain minimum levels for certain financial ratios, including
tangible net worth, ratio of indebtedness to tangible net worth and fixed charge
coverage.

COMMITMENTS AND CONTINGENCIES

        In 1995, the Company recorded a provision of $3.0 million for estimated
costs to remediate a site at the Company's Milwaukee facility that was
contaminated by a solvent spill, which occurred in 1985. The Company continues
to monitor and evaluate the site and minimal activity has taken place since the
provision was recorded in 1995. The ultimate resolution of this matter is still
unknown. However, management believes, based upon findings-to-date and known
environmental regulations, that the environmental reserve at July 1, 2001, is
adequate to cover any future developments.

INCOME TAXES

The provision for income taxes consists of the following (thousands of dollars):

<TABLE>
<CAPTION>

                           2001     2000     1999
                           ----     ----     ----
<S>                     <C>      <C>       <C>

Currently payable:
  Federal                $5,817   $ 8,809   $ 8,106
  State                   1,535     2,044     1,976
  Foreign                   610       591       416
                         ------   -------   -------
                          7,962    11,444    10,498
Deferred tax
(benefit) provision        (312)      392        (7)
                         ------   -------   -------
                         $7,650   $11,836   $10,491
                         ======   =======   =======
</Table>

      A reconciliation of the U.S. statutory tax rates to the
effective tax rates follows:

<Table>
<CAPTION>

                        2001     2000    1999
                        ----     ----    ----
<S>                     <C>      <C>    <C>

U.S. statutory rate     35.0%    35.0%   35.0%
State taxes, net of
  federal tax benefit    4.6      4.5     4.7
Foreign sales benefit    (.9)     (.6)    (.5)
Other                   (1.7)      .1    (1.1)
                        ----     ----    ----
                        37.0%    39.0%   38.1%
                        =====    =====   =====
</Table>


        The components of deferred tax assets and (liabilities) are as follows
(thousands of dollars):

<Table>
<CAPTION>

                               July 1, July 2,
                                2001    2000
                                ----    ----
<S>                            <C>     <C>

Future income tax benefits:
Customer tooling              $    95  $   156
Payroll-related accruals          523      507
Environmental reserve           1,045    1,080
Other                             217      349
                              -------  -------
                              $ 1,880  $ 2,092
                              =======  =======

Deferred income taxes:
Accrued pension obligations   $ 4,034  $ 3,837
Accumulated depreciation       (5,625)  (5,810)
Postretirement obligations      1,721    1,674
                              -------  -------
                                 $130    ($299)
                              =======  =======
</TABLE>

        Foreign income before the provision for income taxes was not significant
for each of the years indicated.

RETIREMENT PLANS AND POSTRETIREMENT COSTS

        The Company has a noncontributory defined benefit pension plan covering
substantially all U.S. associates. Benefits are based on years of service and
final average compensation. The Company's policy is to fund at least the minimum
actuarially computed annual contribution required under the Employee Retirement
Income Security Act of 1974 (ERISA). Plan assets consist primarily of listed
equity and fixed income securities. The Company recognizes the expected cost of
retiree health care benefits for substantially all U.S. associates during the
years that the associates render service. Effective June 1, 2001, any new U.S.
associates hired after the above date are no longer eligible for postretirement
plan benefits. The postretirement health care plan is unfunded.


                         2001 STRATTEC Annual Report 18

<PAGE>   21
NOTES TO FINANCIAL STATEMENTS

        The following tables summarize the pension and postretirement plans'
income and expense, funded status, and actuarial assumptions for the years
indicated (thousands of dollars):

<TABLE>
<CAPTION>

                             Pension           Postretirement
                             Benefits            Benefits
                        ----------------      ----------------
                        2001        2000      2001        2000
                        ----        ----      ----        ----
<S>                    <C>          <C>       <C>         <C>

CHANGE IN BENEFIT
OBLIGATION:
Benefit obligation
  at beginning
  of year             $ 31,320     $29,187  $ 3,729     $ 4,500
Service cost             1,614       1,535      184         220
Interest cost            2,403       2,097      286         293
Settlement of
  postretirement
  Life benefit               -           -        -        (419)
Plan amendments            389           -      (78)          -
Actuarial (gain) loss    3,233        (830)     508        (711)
Benefits paid             (862)       (669)    (242)       (154)
                      --------     -------  -------     -------
Benefit obligation
  at end of year      $ 38,097     $31,320  $ 4,387     $ 3,729
                      ========     =======  =======     =======

CHANGE IN
PLAN ASSETS:
Fair value of plan
   assets at
   beginning of year  $ 34,612     $29,177        -           -
Actual return on
   plan assets          (2,753)      6,104        -           -
Employer contributions     306           -      242         154

Benefits paid             (862)       (669)    (242)       (154)
                      --------     -------  -------     -------
Fair value of plan
   assets at end of
   year                 31,303      34,612        -           -
                      --------     -------  -------     -------
Funded status           (6,794)      3,292   (4,387)     (3,729)
Unrecognized net gain   (3,696)    (12,478)    (280)       (813)

Unrecognized prior
  service cost             372          (5)     139         249
Unrecognized net
  transition asset        (499)       (648)       -           -
                      --------     -------  -------     -------
Accrued benefit cost  $(10,617)    $(9,839) $(4,528)    $(4,293)
                      ========     =======  =======     =======
<CAPTION>

                        July 1,     July 2,   July 1,     July 2,
                         2001        2000      2001        2000
                        -------     -------  -------     -------
<S>                     <C>         <C>      <C>         <C>

WEIGHTED-AVERAGE
ASSUMPTIONS
Discount rate              7.5%       7.75%     7.5%       7.75%
Expected return on
  plan assets              8.5%        8.5%      n/a        n/a
Rate of compensation
  increases                4.0%        4.0%      n/a        n/a
</Table>

        For measurement purposes, a 7 percent annual rate of increase in the per
capita cost of covered health care benefits was assumed for 2001; the rate was
assumed to remain at that level thereafter.

<Table>
<CAPTION>

                             Pension            Postretirement
                             Benefits              Benefits
                        --------------       ------------------
                        2001      2000       2001          2000
                        ----      ----       ----          ----
<S>                    <C>       <C>        <C>            <C>

COMPONENTS OF
NET PERIODIC
BENEFIT COST:
Service cost           $1,614    $1,535     $184           $220
Interest cost           2,403     2,097      286            293
Expected return
  on plan assets       (2,491)   (2,193)       -              -
Amortization of
  prior service cost       12        12       16             16
Amortization of
  unrecognized
  net gain               (304)     (132)     (25)             -
Amortization of
  net transition asset   (150)     (150)       -              -
                       ------    ------     ----           ----
Net periodic
  benefit cost         $1,084    $1,169     $461           $529
                       ======    ======     ====           ====
</Table>

        The health care cost trend assumption has a significant effect on the
postretirement benefit amounts reported. A 1% change in the health care cost
trend rates would have the following effects (thousands of dollars):

<Table>
<CAPTION>

                         1% Increase  1% Decrease
                         -----------  -----------
<S>                      <C>          <C>

Effect on total of
  service and interest
  cost components          $ 94          ($78)
Effect on postretirement
  benefit obligation       $665         ($564)

</TABLE>

        All U.S. associates of the Company may participate in a 401(k) Plan. The
Company contributes a fixed percentage of up to the first 6 percent of eligible
compensation that a participant contributes to the plan. The Company's
contributions totaled approximately $679,000 in 2001, $679,000 in 2000, and
$635,000 in 1999.

SHAREHOLDERS' EQUITY

        The Company has 12,000,000 shares of authorized common stock, par value
$.01 per share, with 4,046,089 and 4,452,609 shares issued and outstanding at
July 1, 2001, and July 2, 2000, respectively. Holders of Company common stock
are entitled to one vote for each share on all matters voted on by shareholders.

        On February 27, 1995, one common stock purchase right (a "right") was
distributed for each share of the Company's common stock outstanding. The rights
are not currently exercisable, but would entitle shareholders to buy one-half of
one share of the Company's common stock at an exercise price of $30 per share if
certain events occurred relating to the acquisition or attempted acquisition of
20 percent or more of the outstanding shares. The rights expire in the year
2005, unless redeemed or exchanged by the Company earlier.

                         2001 STRATTEC Annual Report 19
<PAGE>   22
NOTES TO FINANCIAL STATEMENTS

         The Board of Directors of the Company authorized a stock repurchase
program to buy back up to 2,639,395 outstanding shares. As of July 1, 2001,
2,160,026 shares have been repurchased at a cost of approximately $69.0 million.

EARNINGS PER SHARE (EPS)

         A reconciliation of the components of the basic and diluted per share
computations follows (thousands of dollars, except per share amounts):

<TABLE>
<CAPTION>
                               2001
                  ------------------------------
                    Net                Per-Share
                  Income     Shares     Amount
                  -------    ------   ----------
<S>               <C>        <C>      <C>
Basic EPS         $13,026    4,310       $3.02
Stock Options                   91       =====
                             -----
Diluted EPS       $13,026    4,401       $2.96
                             =====       =====
</TABLE>

<TABLE>
<CAPTION>
                               2000
                  ------------------------------
                    Net                Per-Share
                  Income     Shares     Amount
                  -------    ------   ----------
<S>               <C>        <C>      <C>
Basic EPS         $18,513     4,936      $3.75
Stock Options                   143      =====
                              -----
Diluted EPS       $18,513     5,079      $3.65
                              =====      =====
</TABLE>

<TABLE>
<CAPTION>
                               1999
                  ------------------------------
                    Net                Per-Share
                  Income     Shares     Amount
                  -------    ------   ----------
<S>               <C>        <C>      <C>
Basic EPS         $17,015     5,639     $3.02
Stock Options                   152     =====
                              -----
Diluted EPS       $17,015     5,791     $2.94
                              =====     =====
</TABLE>

         Options to purchase the following shares of common stock were
outstanding as of each date indicated but were not included in the computation
of diluted EPS because the options' exercise prices were greater than the
average market price of the common shares:

<TABLE>
<CAPTION>
                     Shares       Exercise Price
                     ------       --------------
<S>                  <C>              <C>
July 1, 2001         80,000           $45.79
                     80,000           $43.07
                     78,623           $37.88
                      5,000           $35.97
                     20,000           $33.63

July 2, 2000         80,000           $45.79
                     78,623           $37.88
                      5,000           $35.97

June 27, 1999        80,000           $37.88
                      5,000           $32.13
                     80,000           $31.98
                      5,000           $30.81
</TABLE>

STOCK OPTION AND PURCHASE PLANS

         The Company maintains an omnibus stock incentive plan, which provides
for the granting of stock options. The Board of Directors has designated
1,200,000 shares of the Company's common stock available for grant under the
plan at a price not less than the fair market value on the date the option is
granted. Options become exercisable as determined at the date of grant by a
committee of the Board of Directors and expire 5 to 10 years after the date of
grant unless an earlier expiration date is set at the time of grant.

<TABLE>
<CAPTION>
                                             Weighted
                                              Average
                                             Exercise
                            Shares             Price
                            ------           ---------
<S>                         <C>              <C>
Balance at
  June 28, 1998             615,889           $17.23
Granted                     110,000           $35.44
Exercised                    68,148           $15.40
Terminated                   20,303           $25.76
                            -------
Balance at
  June 27, 1999             637,438           $20.30
                            -------
Granted                     105,000           $43.01
Exercised                   175,490           $15.72
Terminated                    1,377           $37.88
                            -------
Balance at
  July 2, 2000              565,571           $25.89
                            -------
Granted                     136,000           $38.49
Exercised                    75,101           $15.18
Terminated                    2,500           $30.81
                            -------
Balance at
  July 1, 2001              623,970           $29.91
                            =======
Exercisable as of
  July 1, 2001              316,847           $20.07
Available for grant as
  of July 1, 2001           165,541
</TABLE>

                         2001 STRATTEC Annual Report 20

<PAGE>   23


NOTES TO FINANCIAL STATEMENTS

         The Company accounts for its stock-based compensation plans in
accordance with APB Opinion No. 25 and related Interpretations as permitted by
SFAS No. 123, "Accounting for Stock-Based Compensation. Accordingly, no
compensation cost related to these plans was charged against earnings in 2001,
2000 and 1999. Had compensation cost for these plans been determined consistent
with SFAS No. 123, the pro forma impact on earnings per share would have been as
follows (thousands of dollars):

<TABLE>
<CAPTION>
                       July 1,   July 2,   June 27,
                        2001      2000      1999
                       -------   -------   --------
<S>                    <C>       <C>       <C>
Net income
  As reported          $13,026   $18,513   $17,015
  Pro forma            $12,447   $17,961   $16,464
Basic earnings
  per share
  As reported            $3.02     $3.75     $3.02
  Pro forma              $2.89     $3.64     $2.92
Diluted earnings
  per share
  As reported            $2.96     $3.65     $2.94
  Pro forma              $2.84     $3.54     $2.85
</TABLE>

         The fair value of each option grant was estimated as of the date of
grant using the Black-Scholes pricing model. The resulting pro-forma
compensation cost is amortized over the vesting period.

         The grant date fair values and assumptions used to determine such
impact are as follows:

<TABLE>
<CAPTION>
Options Granted During             2001          2000          1999
                                   ----          ----          ----
<S>                               <C>           <C>           <C>
Weighted average grant
   date fair value                $42.54        $43.01        $35.44
Assumptions:
Risk free interest rates            5.38%         6.18%         5.33%
Expected volatility                24.97%        25.39%        29.09%
Expected term (in years)            5.50          5.67          5.75
</TABLE>

         The range of options outstanding as of July 1, 2001, is as follows:

<TABLE>
<CAPTION>
                                                         Weighted
                                        Weighted          Average
                      Number of          Average         Remaining
                       Options        Exercise Price    Contractual
 Price Range         Outstanding/      Outstanding/        Life
  per Share          Exercisable       Exercisable      (in years)
- -------------      ---------------    --------------    -----------
<S>                <C>                <C>               <C>
$11.75-$17.05      167,300/167,300     $12.36/$12.36       3.9
$19.68-$31.98      188,047/132,047     $29.22/$28.06       4.5
Over $31.98         268,623/17,500     $41.32/$33.54       3.7
                   ---------------     -------------    ----------
                   623,970/316,847     $29.91/$20.07       4.0
                   ===============     =============    ==========
</TABLE>

         The Company has an Employee Stock Purchase plan to provide
substantially all U.S. full-time associates an opportunity to purchase shares of
its common stock through payroll deductions. A participant may contribute a
maximum of $5,200 per calendar year to the plan. On the last day of each month,
participant account balances are used to purchase shares of stock at the average
of the highest and lowest reported sales prices of a share of the Company's
common stock on the NASDAQ National Market. A total of 100,000 shares may be
issued under the plan. Shares issued from treasury stock under the plan totaled
2,695 at an average price of $33.05 during fiscal 2001, 3,317 at an average
price of $34.07 during fiscal 2000, and 3,521 at an average price of $28.79
during fiscal 1999. A total of 89,774 shares are available for purchase under
the plan as of July 1, 2001.

EXPORT SALES

         Export sales are summarized below (thousands of dollars):

<TABLE>
<CAPTION>
              Export Sales    Percent of Net Sales
              ------------    --------------------
<S>           <C>             <C>
2001            $29,013                14%
2000            $31,745                14%
1999            $27,233                13%
</TABLE>

         These sales were primarily to automotive manufacturing assembly plants
in Canada and Mexico.

SALES TO LARGEST CUSTOMERS

         Sales to the Company's largest customers were as follows (thousands of
dollars and percent of total net sales):

<TABLE>
<CAPTION>
                           2001              2000              1999
                       Sales     %       Sales     %       Sales     %
                     --------------    --------------    --------------
<S>                  <C>        <C>    <C>        <C>    <C>        <C>
General Motors
     Corporation     $ 60,216   30%    $ 68,985   31%    $ 88,938   44%
Ford Motor
     Company           45,341   22%      54,498   24%      52,241   26%
DaimlerChrysler
     Corporation       33,939   17%      35,055   16%      30,757   15%
Delphi Automotive
     Systems           26,913   13%      31,487   14%       2,788    1%
                     --------------    --------------    --------------
                     $166,409   82%    $190,025   85%    $174,724   86%
                     ==============    ==============    ==============
</TABLE>



                         2001 STRATTEC Annual Report 21

<PAGE>   24


REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF STRATTEC SECURITY CORPORATION:

         We have audited the accompanying consolidated balance sheets of
STRATTEC SECURITY CORPORATION and subsidiaries, as of July 1, 2001, and July 2,
2000, and the related consolidated statements of income, changes in equity and
cash flows for each of the three years in the period ended July 1, 2001. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

         We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of STRATTEC SECURITY
CORPORATION and subsidiaries, as of July 1, 2001, and July 2, 2000, and the
results of their operations and their cash flows for each of the three years in
the period ended July 1, 2001, in conformity with accounting principles
generally accepted in the United States.


/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
July 30, 2001


REPORT OF MANAGEMENT

         The management of STRATTEC SECURITY CORPORATION is responsible for the
fair presentation and integrity of the financial statements and other
information contained in this Annual Report. We rely on a system of internal
financial controls to meet the responsibility of providing financial statements.
The system provides reasonable assurances that assets are safeguarded, that
transactions are executed in accordance with management's authorization, and
that the financial statements are prepared in accordance with generally accepted
accounting principles, including amounts based upon management's best estimates
and judgments.

         The financial statements for each of the years covered in this Annual
Report have been audited by independent auditors, who have provided an
independent assessment as to the fairness of the financial statements.

         The Audit Committee of the Board of Directors meets with management and
the independent auditors to review the results of their work and to satisfy
itself that their responsibilities are being properly discharged. The
independent auditors have full and free access to the Audit Committee and have
discussions with the committee regarding appropriate matters, with and without
management present.


/s/ Harold M. Stratton II    /s/ John G. Cahill          /s/ Patrick J. Hansen
Harold M. Stratton II        John G. Cahill              Patrick J. Hansen
Chairman and                 President and               Vice President and
Chief Executive Officer      Chief Operating Officer     Chief Financial Officer


                         2001 STRATTEC Annual Report 22


<PAGE>   25


FINANCIAL SUMMARY

FIVE-YEAR FINANCIAL SUMMARY

         The financial data for each period presented below reflects the
consolidated results of the Company and its wholly owned subsidiaries. The
information below should be read in conjunction with "Management's Discussion
and Analysis," and the Financial Statements and Notes thereto included elsewhere
herein. The following data are in thousands of dollars except per share amounts.

<TABLE>
<CAPTION>
                                                                                    Fiscal Years
                                                    --------------------------------------------------------------------------------
                                                       2001             2000             1999              1998              1997
                                                    ---------         --------        ---------         ---------         ---------
<S>                                                 <C>               <C>             <C>               <C>               <C>
INCOME STATEMENT DATA
Net sales                                           $ 202,973         $224,817        $ 202,625         $ 186,805         $ 159,054
Gross profit                                           40,238           49,358           46,804            39,940            33,319
Engineering, selling, and
   administrative expenses                             19,676           20,254           20,191            18,925            17,684
                                                    ---------         --------        ---------         ---------         ---------

Income from operations                                 20,562           29,104           26,613            21,015            15,635
Interest income                                           628            1,056            1,132               351                 4
Interest expense                                            -                -                -               (19)             (214)
Other income (expense), net                              (514)             189             (239)               73               125
                                                    ---------         --------        ---------         ---------         ---------

Income before taxes                                    20,676           30,349           27,506            21,420            15,550
Provision for income taxes                              7,650           11,836           10,491             7,931             5,730
                                                    ---------         --------        ---------         ---------         ---------
Net income                                          $  13,026         $ 18,513        $  17,015         $  13,489         $   9,820
                                                    =========         ========        =========         =========         =========

Earnings per share:
   Basic                                            $    3.02         $   3.75        $    3.02         $    2.36         $    1.72
   Diluted                                          $    2.96         $   3.65        $    2.94         $    2.30         $    1.70
BALANCE SHEET DATA
Net working capital                                 $  33,174         $ 32,500        $  54,861         $  42,953         $  32,399
Total assets                                          101,648          108,982          128,194           107,998            95,669
Long-term liabilities                                  15,145           14,132           12,915            12,138            16,000
Shareholders' Equity                                   60,010           60,450           82,345            70,398            56,093
</TABLE>


QUARTERLY FINANCIAL DATA (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                       Earnings               Market Price
                                                                                       Per Share                Per Share
                                                                                    ---------------         ------------------
            Quarter           Net Sales       Gross Profit       Net Income         Basic   Diluted         High         Low
            -------           ---------       ------------       ----------         -----   -------         ----         ---
<S>         <C>               <C>             <C>                <C>                <C>     <C>            <C>         <C>
2001         First             $52,421          $11,303            $ 3,881          $ .87    $ .85         $39.500     $32.250
            Second              49,988            9,922              3,429            .77      .76          35.250      30.500
             Third              48,179            9,337              2,611            .61      .60          33.500      29.000
            Fourth              52,385            9,676              3,105            .77      .75          35.745      31.200
                              --------          -------            -------          -----    -----
             TOTAL            $202,973          $40,238            $13,026          $3.02    $2.96
                              ========          =======            =======          =====    =====

2000         First             $49,667          $10,674            $ 3,708          $ .67    $ .65         $36.750     $31.500
            Second              56,726           12,699              4,944            .98      .95          36.875      32.625
             Third              54,539           11,992              4,390            .94      .91          35.750      31.000
            Fourth              63,885           13,993              5,471           1.20     1.17          35.875      32.500
                              --------          -------            -------          -----    -----
             TOTAL            $224,817          $49,358            $18,513          $3.75    $3.65
                              ========          =======            =======          =====    =====
</TABLE>

Registered shareholders of record at July 1, 2001, were 3,322.

                         2001 STRATTEC Annual Report 23
<PAGE>   26

DIRECTORS/OFFICERS/SHAREHOLDERS INFORMATION

BOARD OF DIRECTORS                                [PHOTO OF BOARD OF DIRECTORS]

HAROLD M. STRATTON II, 53
Chairman and Chief
Executive Officer.

JOHN G. CAHILL, 44
President and Chief
Operating Officer

ROBERT FEITLER, 70
Former President and
Chief Operating Officer
of Weyco Group, Inc.
Chairman of the Executive
Committee and Director
of Weyco Group, Inc.
Trustee of ABN.AMRO Funds

MICHAEL J. KOSS, 47
President and Chief
Executive Officer of
Koss Corporation.
Director of Koss Corporation.

FRANK J. KREJCI, 51
President and Chief
Executive Officer of
Wisconsin Furniture, LLC.

EXECUTIVE OFFICERS

HAROLD M. STRATTON II, 53

JOHN G. CAHILL, 44

PATRICK J. HANSEN, 42
Vice President-
Chief Financial Officer,
Treasurer and Secretary.

MICHAEL R. ELLIOTT, 45
Vice President-
Global Market Development.

GERALD L. PEEBLES, 58
Vice President-
General Manager
STRATTEC de Mexico.

DONALD J. HARROD, 57
Vice President-
Engineering

DONALD P. KLICK, 49
Vice President-
Business Operations

SHAREHOLDERS INFORMATION

ANNUAL MEETING

The Annual Meeting of Shareholders will convene at 2 p.m. (CST) on October 23,
2001, at the Manchester East Hotel, 7065 North Port Washington Road, Milwaukee.

COMMON STOCK

STRATTEC SECURITY CORPORATION common stock is traded on the NASDAQ National
Market under the symbol: STRT.

FORM 10-K

You may receive a copy of the STRATTEC SECURITY CORPORATION Form 10-K, filed
with the Securities and Exchange Commission, by writing to the Secretary at
STRATTEC SECURITY CORPORATION, 3333 West Good Hope Road, Milwaukee, WI 53209.

SHAREHOLDER INQUIRIES

Communications concerning the transfer of shares, lost certificates or changes
of address should be directed to the Transfer Agent.

TRANSFER AGENT AND REGISTRAR

Wells Fargo Bank Minnesota, N.A.
Shareholder Services
P.O. Box 64854
St. Paul, MN 55164-0854
1-800-468-9716


                         2001 STRATTEC Annual Report 24

<PAGE>   27


                                   [GRAPHIC]

                         STRATTEC SECURITY CORPORATION

                            3333 West Good Hope Road
                              Milwaukee, WI 53209
                     Phone: 414.247.3333 Fax: 414.247.3329
                                www.strattec.com



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>9
<FILENAME>c64800ex23.txt
<DESCRIPTION>CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
<TEXT>
<PAGE>   1

                                                                     EXHIBIT 23.








                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS



As independent public accountants, we hereby consent to the incorporation by
reference in this Form 10-K of our report dated July 30, 2001, included in the
Company's Annual Report to Shareholders of STRATTEC SECURITY CORPORATION for the
fiscal year ended July 1, 2001. It should be noted that we have not audited any
financial statements of the Company subsequent to July 1, 2001 or performed any
audit procedures subsequent to the date of our report.



ARTHUR ANDERSEN LLP


Milwaukee, Wisconsin
September 4, 2001



























                                       1

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