Exhibit 10.3

SECOND AMENDED AND RESTATED

TRANSDIGM GROUP INCORPORATED

2003 STOCK OPTION PLAN DIVIDEND EQUIVALENT PLAN

Section 1. PURPOSE.

The purpose of this Plan is to provide certain participants in the Company’s
Fourth Amended and Restated 2003 Stock Option Plan, as amended, with the right
to receive dividend equivalent payments in the event that a dividend is declared
by the Company.

Section 2. DEFINITIONS.

(a) “Affiliate” means any parent corporation or subsidiary corporation of the
Company, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f), respectively, of the Code.

(b) “Board” means the Board of Directors of the Company.

(c) “Code” means the Internal Revenue Code of 1986, as amended.

(d) “Committee” means the Compensation Committee of the Board.

(e) “Company” means TransDigm Group Incorporated, a Delaware corporation.

(f) “Option” means an option to purchase common stock of the Company under the
2003 Stock Option Plan.

(g) “Participant” means a person or entity to whom an Option is granted pursuant
to the 2003 Stock Option Plan or, if applicable, such other person or entity who
holds an outstanding Option.

(h) “Plan” means the TransDigm Group Incorporated 2003 Stock Option Plan
Dividend Equivalent Plan, as the same may be amended from time to time.

(i) “2003 Stock Option Plan” means the TransDigm Group Incorporated Fourth
Amended and Restated 2003 Stock Option Plan, as amended, as the same may be
amended from time to time.

Section 3. ADMINISTRATION.

(a) General. The Plan shall be administered by the Committee.

(b) Powers of the Committee. Subject to the provisions of the Plan, the
Committee shall have sole authority, in its absolute discretion: (i) to construe
and interpret the Plan, and to establish, amend and revoke rules and regulations
for its administration; (ii) to amend the Plan as provided in Section 5(a); and
(iii) to exercise such powers and to perform such acts as the Committee deems
necessary or expedient to promote the best interests of the Company which are
not in conflict with the provisions of the Plan.

(c) Committee Determinations. All determinations, interpretations and
constructions made by the Committee in good faith shall not be subject to review
by any person or entity and shall be final, binding and conclusive on all
persons and entities.

Section 4. PAYMENT OF DIVIDEND EQUIVALENT.

(a) Dividend Equivalents. In the event that the Company declares a dividend on
common stock of the Company, Participants shall be eligible to receive a cash
dividend equivalent payment or a reduction of the exercise price of unvested
Options as follows:

(i) Vested Options. Participants who hold vested Options at the time any such
dividend is declared shall be eligible to receive a cash dividend equivalent
payment equal to the amount that such Participant would otherwise have been
entitled to receive had his or her vested Option been fully exercised
immediately prior to such declaration. The cash dividend equivalent payment
shall be paid to Participants eligible for such payments under this
Section 4(a)(i) no later than two and one-half (2  1/2) months following the end
of the taxable year in which the Company declares a dividend in accordance with
this Section 4(a).

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(ii) Unvested Options.

(1) In the event that the Company declares such dividend other than in a
Corporate Transaction, Participants who hold unvested Options at the time such
dividend is declared shall be eligible to receive a cash dividend equivalent
payment equal to the amount that such Participant would otherwise have been
entitled to receive had his or her unvested Option been fully vested and
exercised immediately prior to such declaration; provided that such cash
dividend equivalent amount shall not be paid to any such Participant until the
later of (i) the date such Option vests pursuant to the terms set forth in such
Participant’s applicable Option agreement or (ii) two and one-half
(2  1/2) months following the end of the taxable year in which the Company
declares a dividend in accordance with this Section 4(a).

(2) In the event that the Company declares such dividend in a Corporate
Transaction, the Company shall pursuant to such Corporate Transaction replace or
assume any outstanding unvested Options with new options, the exercise price of
which shall be reduced from the original Option by the amount of such dividend
per share (but not below $0); provided that the ratio of the exercise price of
the new option to the fair market value of such new option immediately after the
substitution or assumption is not greater than the ratio of the exercise price
of the unvested Option to the fair market value of the unvested Option
immediately before such substitution or assumption. Unless otherwise determined
by the Committee, in the event the exercise price of any new option is reduced
pursuant to this Section 4(a)(ii)(2), the Participant shall not receive any cash
dividend equivalent payment with respect to any dividend paid in connection with
such Corporate Transaction. If for any reason the exercise price of an Option is
not reduced in accordance with this Section 4(a)(ii)(2), then the Participants
shall receive a dividend equivalent payment in accordance with
Section 4(a)(ii)(1).

(iii) In no event shall a cash dividend equivalent payment be tied to or
otherwise dependent upon the exercise of an Option.

(b) Taxes. Dividend equivalent payments made in accordance with subsection
(a) above shall be subject to withholding of all applicable taxes.

Section 5. MISCELLANEOUS

(a) Amendment of Plan. The Board at any time, and from time to time, may amend
the Plan.

(b) Termination or Suspension of the Plan. The Board may suspend or terminate
the Plan at any time. Unless sooner terminated, the Plan shall terminate on the
first business day following the later to occur of (i) the date on which the
2003 Stock Option Plan is terminated, or (ii) the date on which no Options are
outstanding under the 2003 Stock Option Plan.

(c) Effective Date of the Plan. The Plan shall be effective as of December 10,
2005, as amended and restated effective December 15, 2005.

(d) Governing Law. The Plan shall be governed by and construed in accordance
with the internal laws of the State of Delaware without reference to the
principles of conflicts of laws thereof.

(e) Reliance on Reports. Each member of the Committee and each member of the
Board shall be fully justified in relying, acting or failing to act, and shall
not be liable for having so relied, acted or failed to act in good faith, upon
any report made by the independent public accountant of the Company and its
Affiliates and upon any other information furnished in connection with the Plan
by any person or persons other than himself.

(f) Titles and Headings. The titles and headings of the sections in the Plan are
for convenience of reference only, and in the event of any conflict, the text of
the Plan, rather than such titles or headings shall control.

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