EMPLOYMENT AGREEMENT
 
 
 
     THIS  EMPLOYMENT  AGREEMENT,  executed  this 31st day of May,  2007, by and
between Audiovox Corporation,  180 Marcus Boulevard,  Hauppauge,  New York 11788
(the  "Company"),  and Patrick M. Lavelle,  an individual  residing at 49 Sunset
Drive, Sayville, New York 11782 (the "Executive").
 
                                   WITNESSETH:
 
     WHEREAS, as of March 1, 2007 (the "Effective Date"), the Company desires to
employ the Executive as President and Chief Executive  Officer and to enter into
a written employment agreement embodying the terms of such relationship; and
 
     WHEREAS,  the  Executive  is willing to be so  employed  by the  Company as
President  and  Chief  Executive  Officer  upon  the  terms  set  forth  in this
Agreement.
 
 
     NOW,  THEREFORE,  in  consideration  of the promises  and mutual  covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency  of which are hereby  mutually  acknowledged  by the Company and the
Executive, the parties agree as follows:
 
1.   TERM OF AGREEMENT
     -----------------
 
     1.1  This  Agreement  shall  constitute  the  binding   obligation  of  the
          Executive and the Company as of the Effective  Date and shall continue
          for a period of three (3) years thereafter (hereinafter referred to as
          the "Initial Term").  Thereafter,  this Agreement shall  automatically
          renew for  additional  one (1)-year  terms (each, a Renewal Term" and,
          together with the Initial Term, the "Employment  Period") unless,  not
          less than one hundred eighty (180) days prior to the expiration of the
          Initial or Renewal Term, as the case may be, either party notifies the
          other in writing of his or its intention not to renew this Agreement.
 
2.   EMPLOYMENT
     ----------
 
     2.1  As of the  Effective  Date,  the  Executive  shall be  employed by the
          Company  as, and will  perform  the duties  and  responsibilities  of,
          President and Chief Executive Officer of the Company, reporting solely
          and directly to the Board of Directors.  In that  capacity,  Executive
          shall  perform  such  services,   acts,  and  functions  necessary  or
          advisable to oversee,  manage and conduct the business of the Company,
          and shall  perform  such other duties and  responsibilities  as may be
          reasonably  assigned by the Board of Directors.  During the Employment
          Period, the Executive shall not render services to any other person or
          organization  for  compensation  without the prior written approval of
          the Company.  The  Executive's  principal  work  location  shall be in
          Hauppauge, New York, but the Executive shall travel to the extent, and
          to  the  places,  reasonably  necessary  for  the  performance  of the
          Executive's duties hereunder.
 
 
 
                                       1
<PAGE>
 
 
 
     2.2  During the Employment  Period,  the Executive  shall serve as a voting
          member of the Board of Directors of the Company.
 
3.   COMPENSATION AND OTHER BENEFITS
     -------------------------------
 
 
     During  the  Employment  Period,  the  Executive  shall be  compensated  as
follows:
 
     3.1  BASE  SALARY.  The  Company  shall pay the  Executive a base salary of
          Seven Hundred Fifty Thousand  Dollars  ($750,000) per annum (the "Base
          Salary"), payable in accordance with the standard payroll practices of
          the Company as are in effect from time to time, less all deductions or
          withholdings  required by  applicable  law. The Board of Directors may
          increase  the  Executive's  Base  Salary  at any time and from time to
          time.
 
     3.2  ANNUAL INCENTIVE BONUS.  During the Employment  Period,  the Executive
          shall be paid an annual  bonus (the "Annual  Incentive  Bonus") of Two
          Hundred and Fifty Thousand  ($250,000) Dollars (less all deductions or
          withholdings  required  by  applicable  law) for each and  every  Five
          Million  ($5,000,000)  Dollars of pre-tax profit earned by the Company
          during the fiscal year.  By way of example  only, if the Company earns
          Five Million  ($5,000,000)  Dollars of pre-tax  profit,  the Executive
          shall be paid an Annual  Incentive Bonus of Two Hundred Fifty Thousand
          ($250,000)  Dollars for the fiscal  year;  if the  Company  earns Nine
          Million Nine Hundred Thousand  ($9,900,000)  Dollars of pre-tax profit
          for the fiscal year, the Executive  shall be paid an Annual  Incentive
          Bonus of Two Hundred Fifty Thousand ($250,000) Dollars; if the Company
          earns  a  pre-tax   profit  of  Ten  Million   One  Hundred   Thousand
          ($10,100,000) Dollars for the fiscal year, the Executive shall be paid
          an Annual Incentive Bonus of Five Hundred Thousand ($500,000) Dollars;
          and if the Company earns Four Million  ($4,000,000) Dollars of pre-tax
          profit for the fiscal year, the Executive  shall not be paid an Annual
          Incentive Bonus. The Annual Incentive Bonus shall be determined at the
          end of each fiscal year of the Company in  accordance  with  generally
          accepted accounting principles,  as in effect from time to time in the
          United States of America,  consistently  applied. The Annual Incentive
          Bonus  shall  be due and  payable  not  later  than  sixty  (60)  days
          following the closing of the relevant fiscal year of the Company.
 
     3.3  DISCRETIONARY   BONUS.  The  Executive  may  also  receive  an  annual
          discretionary  merit based bonus,  at the sole discretion of the Board
          (the "DISCRETIONARY  BONUS"), based on the Company's performance.  Any
          Discretionary   Bonus  shall  be  in   addition  to  any   stock-based
          compensation  provided under this  Agreement,  but upon the request of
          the   Executive  may  be  utilized  as  a  vehicle  for  awarding  any
          stock-based compensation due the Executive, including, but not limited
          to, that provided under Section 3.5. below.  Any  Discretionary  Bonus
          shall be paid no later than sixty (60) days  following  the closing of
          the relevant fiscal year.
 
 
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<PAGE>
 
 
 
     3.4  DEFERRED COMPENSATION.
 
          (1)  Effective as of the first  fiscal year that the Company  achieves
               any year-end pre-tax profit,  and for each fiscal year thereafter
               during  the  Employment  Period,  the  Company  shall  credit the
               Company's Deferred  Compensation Plan for the Executive's benefit
               (the  "Deferred  Compensation  Account"),  the sum of Two Hundred
               Fifty Thousand  ($250,000)  Dollars (the  "Deferred  Compensation
               Sum"),  which  Sum shall be  credited  in  addition  to any other
               amounts  that  the  Company  may  be  required  to  pay  for  the
               Executive's  benefit  under  such  Plan  or  any  other  deferred
               compensation  plan  established  for the benefit of the Executive
               and/or other key  executives of the Company,  such as any Company
               matching contributions.  In the event that the Company's Deferred
               Compensation  Plan  is  discontinued,   the  Company  shall  make
               arrangements  to provide  the  Executive  with  another  deferred
               compensation vehicle so that the Executive shall realize the same
               benefit as he would have if the Company's  Deferred  Compensation
               Plan had been continued.
 
          (2)  The  Executive's  interest in the Deferred  Compensation  Account
               shall fully vest  immediately,  and at all times shall remain one
               hundred percent (100%) vested.
 
          (3)  The Company shall administer and interpret this Section 3.4 so as
               to ensure the Executive is not taxed with respect to the Deferred
               Compensation Sum until his actual receipt thereof.
 
     3.5  STOCK OPTIONS.  As of the Effective  Date, the Executive holds options
          to  acquire  269,926  shares  of  common  stock  of the  Company.  The
          Executive  shall  retain  any and all  rights  to all such  previously
          awarded  stock  options to purchase  shares of the common stock of the
          Company.   The  Executive   shall   continue  to  participate  in  all
          stock-based   compensation   programs  at  the  Company  available  to
          employees. Each fiscal year during the Employment Period the aggregate
          of the incentive  stock options,  non qualified  options,  restrictive
          stock awards, deferred shares,  performance shares, stock appreciation
          rights  and any  combination  thereof  that  shall be  awarded  to the
          Executive  shall be  appropriate  to his position in the  Company,  as
          determined by the Board of Directors in its sole discretion.
 
     3.6  WELFARE  BENEFIT PLANS.  During the Employment  Period,  the Executive
          (and,  if  permitted by the terms of the plans,  his family)  shall be
          eligible to  participate  in all  retirement,  deferred  compensation,
          profit  sharing,  medical,  disability  and other  welfare  plans (the
          "Employee Benefit Plans") applicable to senior officers of the Company
          generally in accordance with the terms of such plans as in effect from
          time to time.  The  foregoing  shall  not be  construed  to limit  the
          ability of the Company or any of its  affiliates  to amend,  modify or
          terminate any such benefit plans,  policies or programs at any time or
          from time to time;  provided  --------  that at all times the  Company
          shall, either by group or separate, individual plan for the benefit of
          the Executive,  provide  Executive  (including to the extent permitted
          his family) with not less than the level of the benefits the Executive
          is receiving on the Effective Date.
 
 
 
                                       3
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     3.7  EXECUTIVE LIFE INSURANCE.  During the Employment  Period,  the Company
          shall maintain and pay all premiums on one or more term life insurance
          policies for the benefit of the  Executive,  providing a death benefit
          of not less  than  Nine  Hundred  Fifty  Thousand  ($950,000)  Dollars
          (collectively the "Life Insurance Policy"') payable to the Executive's
          designated beneficiaries.
 
     3.8  PAID TIME OFF.  During the Employment  Period,  the Executive shall be
          entitled  to not less than four (4) weeks paid  vacation  each  fiscal
          year  at  such  times  as  will  not  materially  interfere  with  the
          performance of the Executive's duties.
 
     3.9  AUTOMOBILE.  The Company  shall  lease,  and shall pay all  insurance,
          maintenance, repair and other charges relating to, a late model luxury
          automobile for use by the Executive.
 
     3.10 EXPENSE  REIMBURSEMENT.  During the Employment  Period,  the Executive
          shall be entitled to utilize Company credit cards for Company business
          related  activities.  Furthermore,  the Company  shall pay or promptly
          reimburse  the  Executive  for  all  reasonable  expenses,   including
          reasonable  business  travel  expenses,  incurred by the  Executive in
          connection  with  his  duties  and  responsibilities   hereunder  upon
          submission of appropriate documentation or receipts in accordance with
          the policies and  procedures of the Company as are in effect from time
          to time.
 
4.   TERMINATION OF EMPLOYMENT
     -------------------------
 
 
     Subject to the notice and other  provisions  of this Section 4, the Company
     shall have the right to terminate the Executive's employment hereunder, and
     the  Executive  shall have the right to resign,  at any time.  The "Date of
     Termination"  (1) for Cause or by resignation  without Good Reason shall be
     determined in accordance  with the provisions of Section 4.3.; (2) by death
     or  disability  shall  be the date of death  or  disability  determined  in
     accordance  with the  provisions  of Section 4.2;  (3) without  Cause or by
     resignation  with Good Reason shall be determined  in  accordance  with the
     provisions  of  Section  4.1;  or (4) shall  mean the date  this  Agreement
     expires.
 
     4.1  TERMINATION  WITHOUT CAUSE,  RESIGNATION FOR GOOD REASON OR EXPIRATION
          OF THE AGREEMENT.
 
          4.1A DISABILITY.  For purposes of this Agreement,  "disability"  shall
               have the same  definition of  disability as triggers  payments to
               the Executive  under the Company  provided  disability  insurance
               policy  covering  the  Executive,  as in  effect  at the time the
               determination of "disability" is to be made. If no such policy is
               then in effect,  then  "disability"  shall  mean the  Executive's
               inability, by reason of any physical or mental injury or illness,
               to substantially  perform the services  required by him hereunder
               for a period in excess of ninety (90)  Business Days in any three
               hundred  sixty  (360)  day  period.  In such  event,  Executive's
               employment  shall be  deemed  to have  terminated  by  reason  of
               disability  on the  last day of such  ninety  (90)  Business  Day
               period.
 
 
 
                                       4
<PAGE>
 
 
 
          4.1B CAUSE DEFINED. For purposes of this Agreement, "Cause" shall mean
               a termination of the Executive's employment by the Company due to
               any of the following reasons:
 
               (1)  the entry of a final  non-appealable  judgment of conviction
                    of the Executive by a court for a felony committed after the
                    Effective  Date,  or entry of a plea of no lo  contendere by
                    the Executive to such a felony; or
 
               (2)  the Executive's willful failure, or gross negligence,  other
                    than by reason of his disability or legal  incompetence,  to
                    substantially carry out his duties hereunder within ten (10)
                    Business Days of written notice from its Board of Directors,
                    specifying such failure or gross negligence; or
 
               (3)  the Executive's  willful engagement in illegal or fraudulent
                    conduct  or  his  willful  violation  of any  material  laws
                    applicable to the Executive.
 
          For  purposes of this  Section  4.1B,  no act or failure to act by the
          Executive shall be considered  "willful" if such act or failure to act
          by the  Executive is the result of the  Executive's  good faith belief
          that the act or failure to act is or was in the best  interests of the
          Company.
 
          4.1C CHANGE IN CONtROL.  For purposes of this Agreement,  a "Change in
               Control of the Company"  shall mean a merger,  reorganization  or
               sale of all or substantially  all of the assets of the Company or
               similar transaction  (excluding a merger where the Company is the
               surviving entity),  where the successor entity fails to expressly
               assume all of the Company's obligations under this Agreement.
 
          4.1D GOOD REASON.  For purposes of this  Agreement,  a resignation for
               "Good Reason" shall mean the Executive's resignation:  (A) within
               twelve (12) months of a Change in Control of the Company;  or (B)
               within  one  hundred  eighty  (180)  days   following:   (1)  the
               Executive's  not being a voting  member of the Board of Directors
               of the Company;  or (2) Executive's written notice to the Company
               of (i) a  material  reduction  in the  scope  of the  Executive's
               powers, duties, title or responsibilities, (ii) the assignment to
               the  Executive  of  duties  materially   inconsistent  with  this
               Agreement or an adverse change in his title or authority or (iii)
               the  Company's   material  breach  of  this  Agreement;   or  (3)
               Executive's  written  notice  to the  Company  of a change in the
               Executive's  primary  place of work,  in each  case  which is not
               cured by the Company  within ten (10)  Business Days of receiving
               such notice.
 
 
 
 
                                       5
<PAGE>
 
 
 
 
          4.1E TERMINATION PROCEDURE.  The Company may terminate the Executive's
               employment  hereunder  at any time  without  Cause on twenty (20)
               Business  Days' prior written  notice to the Executive  (the term
               "Business  Day" meaning a day other than one on which  commercial
               banks in New York City are  permitted or required to close).  The
               Executive may terminate his employment  hereunder for Good Reason
               at any time on twenty (20) Business Days prior written  notice to
               the Company.  The Date of  Termination in either such event shall
               be the  twentieth  Business  Day  following  the  giving  of such
               notice. If the Agreement  expires,  the Date of Termination shall
               be the date the Agreement expires.
 
          4.1F POST-EMPLOYMENT   BENEFITS.   If  the  Company   terminates   the
               Executive's employment hereunder without Cause (other than due to
               death  or  disability),   or  if  the  Executive  terminates  his
               employment  hereunder  for  Good  Reason  or  if  the  Employment
               Agreement  expires  by reason of the  Company  not  renewing  the
               Employment  Period,  the  Executive,  upon  execution  of  mutual
               releases  reasonably   satisfactory  to  the  Executive  and  the
               Company,  and provided the  Executive is in  compliance  with his
               duties and obligations under Section 5 hereof,  shall be entitled
               to receive only:
 
               (1)  his  Base  Salary   through  and   including   the  Date  of
                    Termination;
 
               (2)  any  bonus(es)   actually   awarded  and  earned  for  prior
                    completed  fiscal years,  but not yet paid as of the Date of
                    Termination,  and a pro rata  portion of the bonus set forth
                    in Section  3.2 hereof for the fiscal year in which the Date
                    of Termination  occurs,  determined  based on the numbers of
                    full  months  in  such  fiscal  year  prior  to the  Date of
                    Termination  divided by twelve,  and the pre-tax  profit for
                    such fiscal year  through the last month ending prior to the
                    Date  of  Termination  annualized  for a full  twelve  month
                    period;
 
               (3)  an  amount  in  cash  equal  to the  average  of the  Annual
                    Incentive  Bonuses  awarded  in the  two  years  immediately
                    preceding the year in which the Date of  Termination  occurs
                    (the "Average  Bonus"),  payable in equal  installments on a
                    monthly basis during the twelve months immediately following
                    the  Date  of  Termination,  and  50% of the  amount  of the
                    Average Bonus,  payable in equal monthly installments during
                    the second twelve months  following the Date of  Termination
                    (the "Severance Bonus");
 
               (4)  any  and  all  vested  benefits,  including  payment  of all
                    amounts in the Deferred Compensation Account, and a pro rata
                    payment of the Deferred  Compensation  Sum determined  under
                    Section 3.4 based on the number of calendar days  transpired
                    during the fiscal year (prior to the Date of Termination) in
                    which such  termination or resignation  occurs over 365 (the
                    "Pro-Rata Deferred Compensation Payment");
 
 
 
                                       6
<PAGE>
 
 
 
               (5)  all  stock  based   compensation   previously   awarded  and
                    outstanding  shall be vested  except for those  awards which
                    vest  in  whole  or in  part  based  on  performance  of the
                    Company,  which awards shall remain  outstanding and vest in
                    accordance  with their terms  (excluding any requirement for
                    continued  employment)  on a pro  rata  basis  based  on the
                    number  of days  prior  to the  Date of  Termination  in the
                    relevant performance period;
 
               (6)  reimbursement for all expenses  incurred,  but not yet paid,
                    as of the Date of Termination;
 
               (7)  payment of the per diem value of any  unused  vacation  days
                    accruing during the Employment Period based upon Executive's
                    most recent level of Base Salary;
 
               (8)  for the greater of (a) the  remainder of the Initial Term or
                    the Renewal  Term, as the case may be, or (b) two years (the
                    "Separation   Period"),   the  Base  Salary  plus   Deferred
                    Compensation  multiplied  by the  number  of  months  of the
                    Separation  Period  divided by 12 that would be paid  during
                    such  Period to  Executive  (collectively,  the  "Separation
                    Payment"),  which shall be paid in equal  installments  on a
                    monthly basis during the Separation Period;
 
               (9)  rights to  indemnification as set forth in Section 7 of this
                    Agreement; and
 
               (10) (a)  continuation  throughout the  Separation  Period of the
                    Life Insurance  Policy,  and upon completion of such period,
                    ownership of the Life Insurance  Policy shall be transferred
                    to the  Executive  at no  cost  to the  Executive;  and  (b)
                    continuation  during  the  Separation  Period  or until  the
                    Executive  begins to participate in a subsequent  employer's
                    medical  plan,  of  medical,  disability  and  other  health
                    coverages  at the  level  in  effect  on  and  at  the  same
                    out-of-pocket  cost  to the  Executive  as of,  the  Date of
                    Termination; it being understood that the period of coverage
                    under the Consolidated Omnibus Budget  Reconciliation Act of
                    1985 shall  commence on the first day  following the Date of
                    Termination.
 
 
 
                                       7
<PAGE>
 
 
 
     4.2  TERMINATION DUE TO DEATH OR DISABILITY.
 
          4.2A TERMINATION.  Upon  Executive's  death or  disability  during the
               Employment Period, the employment  relationship  created pursuant
               to this Agreement  shall  immediately  terminate,  and no further
               compensation  shall be payable to  Executive  except as  provided
               herein in this Section 4.2.
 
          4.2B POST-EMPLOYMENT  BENEFITS.  Date of Termination shall be the date
               of death or disability, as the case may be, and in such event the
               Executive shall be entitled to receive only:
 
               (1)  his  Base  Salary   through  and   including   the  Date  of
                    Termination;
 
               (2)  any bonus(es)  actually  awarded for prior completed  fiscal
                    years,  but not yet paid as of the Date of Termination and a
                    pro rata  portion  of the  bonus set  forth in  Section  3.2
                    hereof for the fiscal year in which the Date of  Termination
                    occurs,  determined  based on the  numbers of full months in
                    such fiscal year prior to the Date of Termination divided by
                    twelve,  and the pre-tax profit for such fiscal year through
                    the last  month  ending  prior  to the  Date of  Termination
                    annualized for a full twelve month period;;
 
               (3)  payment of the Severance Bonus;
 
               (4)  any  and  all  vested  benefits,  including  payment  of all
                    amounts  in  the  Deferred   Compensation  Account  and  the
                    Pro-Rata Deferred Compensation Payment;
 
               (5)  reimbursement for all expenses  incurred,  but not yet paid,
                    as of the Date of Termination;
 
               (6)  payment of the per diem value of any  unused  vacation  days
                    accruing during the Employment Period based upon Executive's
                    most recent level of Base Salary;
 
               (7)  in the event of  termination  by reason of  disability,  (a)
                    payments equal to the Base Salary less amounts payable under
                    the  Company's  long-term  disability  policy during the one
                    year period  following the Date of Termination,  which shall
                    be paid in equal  monthly  installments  during the 12 month
                    period  following the Date of Termination;  (b) continuation
                    throughout  the  Separation  Period  of the  Life  Insurance
                    Policy, and upon completion of such period, ownership of the
                    Life Insurance  Policy shall be transferred to the Executive
                    at no cost to the Executive; and (c) continuation during the
                    Separation   Period  or  until  the   Executive   begins  to
                    participate  in a subsequent  employer's  medical  plan,  of
                    medical,  disability and other health coverages at the level
                    in  effect  on,  and at the same  out-of-pocket  cost to the
                    Executive  as  of,  the  Date  of   Termination;   it  being
                    understood   that  the   period   of   coverage   under  the
                    Consolidated Omnibus Budget Reconciliation Act of 1985 shall
                    commence on the first day following the Date of Termination;
 
 
 
                                       8
<PAGE>
 
 
 
               (8)  in the event of termination by reason of death,  the Company
                    shall  take  the  steps  reasonably  necessary  to have  all
                    proceeds from the Life Insurance Policy promptly paid to the
                    beneficiaries designated thereunder;
 
               (9)  rights to  indemnification as set forth in Section 7 of this
                    Agreement; and
 
               (10) all  stock  based   compensation   previously   awarded  and
                    outstanding  shall  vest on a pro  rata  basis  based on the
                    number of days the Executive was employed during the vesting
                    period,  except for those  awards  which vest in whole or in
                    part based on the  performance of the Company,  which awards
                    shall remain  outstanding  and vest in accordance with their
                    terms  (excluding any requirement of continued  employment),
                    on a pro rata basis based on the number of days prior to the
                    Date of Termination in the relevant performance period.
 
     4.3  TERMINATION FOR CAUSE OR RESIGNATION WITHOUT GOOD REASON.
 
          4.3A PROCEDURE.  The Company may terminate the Executive's  employment
               hereunder at any time for Cause on three (3) Business Days' prior
               written notice to the Executive.  The Executive may terminate his
               employment  hereunder  without  Good Reason at any time on Twenty
               (20) Business Days prior written notice to the Company.  The Date
               of  Termination  in  either  such  event  shall be the  twentieth
               Business Day following the giving of such notice.
 
          4.3B POST-EMPLOYMENT  BENEFITS.  If,  prior to the  expiration  of the
               Initial  or any  Renewal  Term,  the  Executive's  employment  is
               terminated  by the Company for "Cause" or the  Executive  resigns
               from his employment hereunder for any reason other than for "Good
               Reason",  the  Executive  shall be entitled  to receive  only the
               following:
 
               (1)  his Base Salary up to and including the Date of Termination;
 
               (2)  any bonus(es)  actually  awarded for prior completed  fiscal
                    years, but not yet paid as of the Date of Termination;
 
               (3)  reimbursement for all expenses  incurred,  but not yet paid,
                    as of the Date of Termination;
 
               (4)  payment of the per diem value of any  unused  vacation  days
                    accruing during the Employment Period based upon Executive's
                    most recent level of Base Salary;
 
               (5)  any  and  all  vested  benefits,  including  payment  of all
                    amounts in the Deferred Compensation Account;
 
               (6)  rights to  indemnification as set forth in Section 7 of this
                    Agreement;
 
 
                                       9
<PAGE>
 
               (7)  transfer of  ownership of the Life  Insurance  Policy to the
                    Executive,  without further obligation of the Company to pay
                    premiums; and
 
               (8)  retention  of  all   stock-based   compensation   previously
                    awarded, which shall be held by the Executive until, and may
                    be executed at any time prior to, their expiration.
 
          4.3C HEARING  PROCEDURE.  The  existence of Cause must be confirmed by
               not less than a majority of the Board of  Directors  at a meeting
               called for such purpose prior to any termination.
 
               (1)  In the event the Board confirms the existence of Cause,  the
                    Company shall notify the Executive that the Company  intends
                    to terminate the Executive's employment for Cause under this
                    Section 4.A. (the "Confirmation  Notice").  The Confirmation
                    Notice  shall  specify the act,  or acts,  upon the basis of
                    which the Board has confirmed the existence of Cause and the
                    Confirmation  Notice  must  be  delivered  to the  Executive
                    within  fifteen (15) Business Days after the Board  confirms
                    the existence of Cause.
 
               (2)  If the  Executive  notifies  the  Company  in  writing  (the
                    "Opportunity Notice") within twenty (20) Business Days after
                    the  Executive  has received the  Confirmation  Notice,  the
                    Executive  (together  with  counsel)  shall be provided  the
                    opportunity to meet formally with the Board (or a sufficient
                    quorum  thereof)  to discuss  such act or acts.  The meeting
                    with the Board shall  occur at a mutually  agreed upon date,
                    but in no event more than  twenty (20)  Business  Days after
                    the  Company  receives  the  Opportunity   Notice  from  the
                    Executive,  and at the Company's headquarters.  If the Board
                    attends  such meeting and in good faith does not rescind its
                    confirmation  of Cause at such  meeting,  the Company  shall
                    immediately upon the closing of such meeting, deliver to the
                    Executive  a Notice  of  Termination  for Cause  under  this
                    Section 4.3(C).
 
 
               (3)  If  the  Executive  does  not  respond  in  writing  to  the
                    Confirmation Notice in the manner and within the time period
                    specified  in  Section  4.3C(2)  above,  the  Company  shall
                    thereafter  issue a Notice of  Termination  for Cause  which
                    shall set forth the date on which  the  Company  intends  to
                    terminate the Executive's employment.
 
               (4)  The Date of  Termination  shall be the date specified in the
                    Notice of Termination for Cause.
 
 
                                       10
<PAGE>
 
               (5)  The  procedure  set forth in this  Section 4.3C to determine
                    the  existence of Cause shall at all times be subject to the
                    requirements  of  applicable  law,  regulation,   regulatory
                    bulletin or other regulatory requirements.
 
          4.3D RESIGNATION  WITHOUT GOOD REASON.  A resignation by the Executive
               without  Good  Reason  shall  take  effect  on,  and the  Date of
               Termination shall be, the date specified in the written notice of
               resignation  from the Executive to the Company provided that such
               date  shall be at least  ninety  (90)  days  after  the date such
               written notice is given.
 
     4.4  NO  MITIGATION;  NO  OFFSET.  In  the  event  of  any  termination  of
          employment  under this Section 4, except if the termination is without
          Good Reason,  the Executive shall be under no obligation to seek other
          employment or to mitigate damages and there shall be no offset against
          any amounts due the Executive  under this  Agreement.  Any amounts due
          under this  Section 4 are in the  nature of  separation  benefits,  or
          liquidated  damages,  or both, and are not in the nature of a penalty.
          Until the Date of Termination, the Executive shall be entitled, to the
          extent  not  prohibited  by  applicable  law,  regulation,  regulatory
          bulletin, and/or any other regulatory requirement,  as the same exists
          or may hereafter be promulgated  or amended,  to be paid his then Base
          Salary,  and otherwise to continue to receive all other benefits to be
          paid to him  during  the  Employment  Period,  and  there  shall be no
          reduction   whatsoever  of  any  amounts  payable  to  the  Executive,
          hereunder.
 
     4.5  NO  OBLIGATION.  Subject to the terms of this  Agreement,  the Company
          shall have no obligation to continue or maintain any Employee  Welfare
          Benefit  Plan  for any  other  employees  solely  as a  result  of the
          provisions of this Agreement.
 
     4.6  409A.  If the  Executive  is a  "specified  employee"  (as  defined in
          Section 409A of the Internal  Revenue Code of 1986, as amended) on the
          Date of  Termination,  the  Company  shall  not make any  payments  of
          "nonqualified  deferred compensation" (for purposes of Section 409A of
          the  Code)  to the  Executive  pursuant  to  Section  4 until  one day
          following the six month  anniversary of the Date of  Termination,  and
          the amount payable on that day shall equal the sum of all amounts that
          would otherwise have been paid during the first six months immediately
          following the Date of Termination.
 
 
 
                                       11
<PAGE>
 
5.   RESTRICTIVE COVENANTS
     ---------------------
 
     5.1  CONFIDENTIAL INFORMATION.
 
          5.1A The Executive agrees and acknowledges that during the performance
               of his duties with the Company he will receive and have access to
               confidential,   proprietary,   and/or  trade  secret  information
               concerning the Company (hereinafter "Confidential  Information").
               "Confidential    Information"   means   information   which   has
               substantial   value  to  the  Company,   regardless  of  form  or
               characteristic,   and  which:  (a)  the  Company  does  not  make
               available to the public,  industry, or third parties; (b) relates
               to  the  Company's  business  operations,   products,  processes,
               business plans,  purchasing,  marketing,  clients,  suppliers, or
               service providers;  and (c) may include (i) financial information
               and  data,   (ii)   information   pertaining   to  personnel  and
               compensation, (iii) marketing plans and related information, (iv)
               the names, lists, contact  information,  and practices of clients
               and  vendors,  (v) plans,  products,  designs,  design  concepts,
               drawings, software, developments,  memoranda, data, improvements,
               and  methods of  operation,  (vi)  computer  software  (including
               object  code  and  source  code),  data  and  databases,  outcome
               research,  documentation,   instructional  material,  inventions,
               processes, formulas, technology,  designs, drawings, engineering,
               hardware,   configuration  information,   models,   manufacturing
               processes,  sales  and  cost  information,   and  (vii)  business
               methods,   techniques,   plans,  and  the  information  contained
               therein.
 
          5.1B During the Employment Period and thereafter, the Executive agrees
               that  he  will  not   publish,   use  or  disclose   Confidential
               Information to anyone other than  authorized  Company  personnel.
               The  Executive  specifically  agrees that he will not make use of
               any such Confidential Information for his own purpose, or for the
               benefit of any person,  firm,  company or other entity except for
               the benefit of the Company.
 
          5.1C During the Employment Period and thereafter, the Executive agrees
               that he will  not  remove  any  printed,  written,  recorded,  or
               graphic  material,  or any  reproduction  thereof,  constituting,
               containing  or  reflecting  Confidential   Information  from  the
               Company's premises,  except for legitimate business purposes.  At
               the time his employment  with the Company  ceases,  the Executive
               agrees  that  he  will  return  any  and  all  materials   and/or
               reproductions constituting, containing or reflecting Confidential
               Information  in his possession or under his custody or control to
               the Company.
 
     5.2  COVENANT NOT TO COMPETE.  For purposes of the covenant in this Section
          5.2, a Competitive  Enterprise is any business  enterprise  located in
          the United  States that  engages in any  activity,  or owns a majority
          voting  interest  in any entity  that  engages in any  activity,  that
          competes with the Company.  The Executive  hereby covenants and agrees
          that during the course of his employment and for 24 months  thereafter
          (the "Restricted Period"),  Executive shall not directly or indirectly
          (a) form, or acquire a ten percent (10%) or greater  equity  ownership
          interest in, any Competitive Enterprise provided that this restriction
          shall not  apply to a  Competitive  Enterprise  whose  securities  are
          publicly  traded;  or  (b)  become  an  employee,   officer,  partner,
          director,  consultant,  agent or advisor of any Competitive Enterprise
          within the United States.
 
                                       12
<PAGE>
 
     5.3  NON-SOLICITATION.   During  the  Restricted   Period,   the  Executive
          expressly  agrees  not to (1) call upon,  solicit,  sell or attempt to
          sell any product or services in competition  with those offered by the
          Company to
 
          (i)  any person or firm that was a customer of the Company at any time
               during  the  twelve  (12)  month  period  prior  to the  Date  of
               Termination; or
 
          (ii) any person or firm that was a prospective customer of the Company
               and whose account Executive helped directly to solicit during the
               six (6) month period preceding the Date of Termination;
 
          or (2)  directly  or  indirectly,  solicit,  induce,  or call upon any
          employee of the Company to terminate his employment with the Company.
 
     5.4  NON-DISPARAGEMENT.  During the Employment  Period and thereafter,  the
          Company  and  Executive  agree  that  they  shall  not,   directly  or
          indirectly,  make or cause or  assist  any other  person to make,  any
          statement  or other  communication  which  impugns or  attacks,  or is
          otherwise  critical of the  reputation,  business or  character of the
          other, including any of the officers,  directors,  employees, products
          or services of the Company.  Nothing  herein shall  prohibit  truthful
          statements  to  government  agencies  or  testimony  as  compelled  by
          judicial or administrative process.
 
     5.5  ENFORCEABILITY.  Each covenant in this Section 5 shall be  enforceable
          against  the  Executive  during the  Employment  Period and during the
          Restricted  Period.  If any  covenant in this  Section 5 is held to be
          unenforceable  or against public policy by the tribunal  designated in
          Section  9  below  or,  if  appropriate,   by  a  court  of  competent
          jurisdiction,  such covenant  will be considered to be divisible  with
          respect to scope,  time and  geographic  area,  and such lesser scope,
          time or  geographic  area,  or all of them,  as a court  of  competent
          jurisdiction  may  determine  to be  reasonable,  will be binding  and
          enforceable against the Executive.
 
6.   INDEMNIFICATION
     ---------------
 
     To the fullest  extent  permitted by law, but subject to the  provisions of
the Certificate of  Incorporation  of the Company and the By-laws of the Company
in effect from time to time (provided that no amendment thereto shall in any way
lessen  the  Executive's  rights  hereunder  to  less  than is  provided  in the
Certificate  of  Incorporation  and/or  By-laws as of the Effective  Date),  the
Company shall promptly, after receipt of a request by the Executive,  indemnify,
defend and hold  harmless  the  Executive  with  respect to any claims  (whether
litigated or not) against the Executive in his capacity as an employee,  officer
or  director  of the  Company,  whether  by or on  behalf  of the  Company,  its
shareholders  or third parties,  and the Company shall  promptly  advance to the
Executive  an amount  equal to the  reasonable  fees and  expenses  incurred  in
defending such matters,  promptly after receipt of a reasonably itemized request
for such  advance.  The  Company  may  procure  insurance  with  respect  to the
obligations  provided  in this  Section  7 and  shall  provide  such  additional
indemnification  protection  to  the  Executive  as  may be  provided  to  other
directors or key executive officers of the Company.
 
 
                                       13
<PAGE>
 
7.   INJUNCTIVE RELIEF AND ADDITIONAL REMEDIES
     -----------------------------------------
 
     The parties  acknowledge that the injury that would be suffered as a result
of a breach of  Section 5 of this  Agreement  would be  irreparable  and that an
award of  monetary  damages  for such a breach  would be an  inadequate  remedy.
Consequently,  each party acknowledges and expressly agrees that the other party
will have the right,  in  addition  to any other  rights it may have,  to obtain
injunctive  relief to restrain any breach or  threatened  breach or otherwise to
specifically  enforce  Section 5 of this Agreement  providing the party posts an
adequate bond or other security in seeking such relief.
 
8.   ALTERNATE DISPUTE RESOLUTION
     ----------------------------
 
     Any dispute  concerning the interpretation or enforcement of this Agreement
shall be resolved by a panel of three (3)  arbitrators  in  accordance  with the
rules of  JAMS/ENDISPUTE,  or if that  organization  shall cease to exist,  of a
successor or similar organization,  or if no such organization shall exist, then
in  accordance  with the  rules of the  American  Arbitration  Association.  The
decision of the panel of three (3) arbitrators shall be final and binding on all
parties.  All such matters  involving the issue,  as well as the  proceedings at
issue, shall be kept strictly confidential, except as may be required by law, it
being   expressly   agreed  by  all  parties  hereto  that  the  breach  of  the
confidentiality requirement hereunder shall be materially damaging, directly and
indirectly,   to  all  parties  hereto.   If  the  panel   determines  that  the
non-prevailing  party  in any such  dispute  acted  in bad  faith in  connection
therewith, the panel may award to the prevailing party reasonable legal fees and
costs associated with the dispute.
 
9.   VENUE
     -----
 
     All disputes shall be arbitrated in Nassau,  New York or Suffolk  Counties,
New York.
 
10.  NOTICES
     -------
 
 
     Any notice,  demand,  request or other  communication  hereunder  by either
party to the other  shall be given in writing by  personal  delivery,  certified
mail, return receipt requested, or (if to the Company) by facsimile, in any case
delivered to the applicable address set forth below:
 
 
                  To the Company:
 
                           Audiovox Corporation
                           180 Marcus Boulevard
                           Hauppauge, New York  11788
 
 
                  With a copy to:
 
                           Howard B. Adler, Esq.
                           Fried, Frank, Harris, Shriver & Jacobson LLP
                           One New York Plaza
                           New York, NY 10004
 
                  To the Executive:
 
                           Mr. Patrick M. Lavelle,  CEO c/o Audiovox Corporation
                           150 Marcus Boulevard Hauppauge, New York 11788
 
 
                  With a copy to:
 
                           Thomas J. Killeen, Esq.
                           Farrell Fritz, P.C.
                           1320 Reckson Plaza, 14th Floor
                           Uniondale, New York  11556-1320
 
 
                                       14
<PAGE>
 
     Any such  communication  shall be deemed  given and received on the date of
     personal  delivery or fax  transmittal  and three (3)  Business  Days after
     being sent by certified mail, return receipt requested.
 
 
11.  SUCCESSORS AND ASSIGNS
     ----------------------
 
     This  Agreement is personal to  Executive  and shall not be  assignable  by
Executive.  This Agreement shall inure to the benefit of and be binding upon the
Company and its successors  and assigns.  Subject to the rights of the Executive
under this  Agreement,  the Company may assign and  transfer  its rights to, and
will require its obligations  under this Agreement to be expressly assumed by, a
successor to all or substantially all of its equity ownership interests,  assets
or business by dissolution, merger, consolidation,  transfer of assets or stock,
or otherwise.  Except as stated herein, nothing in this Agreement,  expressed or
implied,  is intended to confer on any person,  other than the parties and their
respective  successors and permitted assigns, any rights or remedies under or by
reason of this Agreement.
 
12.  VOLUNTARY AGREEMENT
     -------------------
 
     Executive  and the Company  represent  and agree that each has reviewed all
aspects of this  Agreement,  has  carefully  read,  and fully  understands,  all
provisions of this  Agreement and is voluntarily  entering into this  Agreement.
Each party  represents and agrees that such party has had  opportunity to review
any and all aspects of this Agreement with the legal,  tax, or other advisors of
such party's  choice.  Both  parties  represent  that each has  obtained  advice
regarding the legal, tax, and other  consequences of the terms and conditions of
this Agreement.
 
13.  ENTIRE AGREEMENT
     ----------------
 
     This is the  entire  agreement  between  the  parties  with  respect to the
matters set forth  herein and  supersedes  any and all prior or  contemporaneous
agreements or understandings  between them. Except as expressly provided herein,
this  Agreement  may  not be  changed  or  terminated  orally,  and  no  change,
termination,  or  attempted  waiver  of any of the  provisions  hereof  shall be
binding  unless in writing  signed by both  Executive  and the Chairman or other
duly  authorized  representative  of the  Company.  Any  such  written  changes,
terminations,  or waivers must specifically  reference this Agreement,  and such
changes as the Company may from  time-to-time  make in its general  policies and
procedures  shall not be deemed or  construed to be written  amendments  to this
Agreement, whether such changes are in writing or not.
 
14.  WAIVER
     ------
 
     No  provision  of this  Agreement  may be  waived in any  manner  except by
written  agreement of the  parties.  In the event any  provision is waived,  the
balance of the provisions shall nevertheless remain in full force and effect and
shall in no way be waived,  impaired or otherwise modified.  No failure or delay
on the part of either the Executive or the Company hereto in the exercise of any
right  hereunder  shall  impair such right or be construed to be a waiver of, or
acquiescence  in,  any  breach  of any  representation,  warranty,  covenant  or
agreement  herein,  nor shall any single or partial  exercise  of any such right
preclude other or further exercise thereof or of any other right.
 
15.  MODIFICATIONS
     -------------
 
     Neither this Agreement nor the provisions contained herein may be extended,
renewed,  amended or  modified  other than by a written  agreement  executed  by
Executive  and the  Chairman  or other  duly  authorized  representative  of the
Company.
 
16.  SEVERABILITY
     ------------
 
     Whenever possible, each provision of this Agreement shall be interpreted in
such  manner as to be  effective  and valid  under  applicable  law,  but if any
provision of this Agreement is held to be invalid,  illegal or  unenforceable in
any respect under applicable law or rule in any  jurisdiction,  such invalidity,
illegality  or  unenforceability  shall not affect  the  validity,  legality  or
enforceability  of any  other  provision  of  this  Agreement  or the  validity,
legality or enforceability of such provision in any other jurisdiction, but this
Agreement shall be reformed,  construed and enforced in such  jurisdiction as if
such  invalid,  illegal or  unenforceable  provision  had never  been  contained
herein.
 
 
                                       15
<PAGE>
 
17.  CONSTRUCTION
     ------------
 
     The rule that a contract is to be construed  against the party drafting the
contract  is  hereby  expressly  waived  by  the  parties,  and  shall  have  no
applicability in construing this Agreement or the terms hereof. Any headings and
captions  used  herein  are  only for  convenience  and  shall  not  affect  the
construction or interpretation of this Agreement.
 
18.  GOVERNING LAW
     -------------
 
     All issues concerning the enforceability,  validity,  and binding effect of
this Agreement shall be governed by and construed in accordance with the laws of
New York without giving effect to any choice of law or conflict of law provision
or rule  (whether  of New York or any other  jurisdiction)  that would cause the
application of the law of any jurisdiction other than New York.
 
19.  COUNTERPARTS
     ------------
 
     This Agreement may be executed in more than one counterpart,  each of which
shall be deemed an original,  but all of which together shall constitute but one
and the same instrument.
 
 
 
                                       16
<PAGE>
 
 
 
 
IN WITNESS  WHEREOF,  THE PARTIES HAVE  EXECUTED  THIS  AGREEMENT AS OF THE DATE
WRITTEN ABOVE.
 
 
 
 
 
                               AUDIOVOX CORPORATION
 
 
 
Date: May 31, 2007
 
                                By: /s/ John J. Shalam
                                ---------------------------
                                Name: John J. Shalam
                                Title: Chairman
 
 
 
                                /s/Patrick M. Lavelle
                                ---------------------------
                                Patrick M. Lavelle
 
 
 
                                       17
</TEXT>
</DOCUMENT>