2005 Stock Option Plan

1.

Purpose .

2.

Definitions .

2.1

“1933 Act” means the Federal Securities Act of 1933 and applicable state securities laws.

2.2

“1934 Act” means the Securities Exchange Act of 1934.

2.3

“Board” means the Board of Directors of Rockford Corporation.

2.4

“Code” means the Internal Revenue Code of 1986.

2.5

“Committee” means the Compensation Committee of the Board of Directors of Rockford Corporation.

2.6

“Corporation” means Rockford Corporation and any Subsidiary.

2.7

“Fair Market Value” means, as applied to a specific date, the closing price for the Stock on such date as reported on the principal stock exchange upon which the Corporation’s Stock is listed (currently, the Nasdaq Stock Market — National Market System (“NASDAQ”); or, if the stock is not listed, then the mean between the most recent bid and asked prices of any other recognized trading market or if no stock was traded on the relevant date, on the next preceding day on which the Stock was so traded. If no such market exists, then the Committee shall determine in good faith the fair market value of the Stock.

2.8

“Grant Date” means the date on which an Option is granted as specified by the Committee, contingent on the Optionee executing a Stock Option Agreement in form satisfactory to the Committee.

2.9

“Incentive Option” means an Option eligible for tax treatment as an incentive option under Section 422 of the Code.

2.10

“Non-Qualified Option” means an Option that is not eligible for tax treatment as an incentive option under Section 422 of the Code.

2.11

“Option” means an option to purchase Stock granted under this Plan.

2.12

“Optionee” means an employee or director to whom an Option has been granted under the Plan.

2.13

“Plan” means the Rockford Corporation 2005 Stock Option Plan, the terms and conditions of which are covered in this instrument.

2.14

“Stock” means the common stock of the Corporation.

2.15

“Stock Option Agreement” means a written agreement entered into between the Corporation and the Optionee that provides for the price and terms of an Option.

2.16

“Subsidiary” means any corporation of which the majority of the outstanding capital stock is owned, directly or indirectly, by the Corporation and which meets the definition of a subsidiary corporation as set forth in Section 424(f) of the Code, at the time of the granting of the Option.

2.17

“Ten Percent Shareholder” means an individual who owns more than 10% of the total combined voting power of all classes of stock of the Corporation.

3.1

The Plan shall be administered by the Compensation Committee of the Board, which Committee shall satisfy the requirements for “outside directors” as set forth in section 162 (m) of the Code and “non-employee directors” as set forth in rule 16b-3 of the 1934 Act. Without limiting the powers of the Committee, the Committee shall have the power to determine the times during which any Option shall be exercisable, the events upon which any Option shall terminate, the amounts, if any, payable to beneficiaries of an Optionee upon the death of such Optionee, the exercisability of any Option on the sale of all, or substantially all, of the assets of the Corporation, or a merger where the Corporation is not the surviving corporation (other than a merger that is only a change in form), and other terms of exercise. No member of the Committee shall be eligible to vote on the grant of Options to him or her. All decisions and determinations of the Committee in administering the Plan shall be final.

3.2

If changes are made to the Code that make it advisable, in the Committee’s sole discretion, to change the character of Options for income tax purposes, the Committee may change the character of Options and may impose on Options any conditions deemed necessary or appropriate to comply with the Code requirements. However, except as otherwise provided herein, the Committee may not change the character or terms of an outstanding Option without the Optionee’s consent.

3.3

The Committee, subject to the provisions of the Plan, shall make determinations regarding:

4.

Tax and Other Characteristics of Options .