EXHIBIT 10.40

ESTERLINE TECHNOLOGIES CORPORATION

AMENDED AND RESTATED
NON-EMPLOYEE DIRECTORS’ STOCK COMPENSATION PLAN

        This Non-Employee Directors’ Stock Compensation Plan (the “Plan”)
provides for the award (each an “Award” and collectively the “Awards”) of shares
of Common Stock, $.20 par value (the “Common Stock”), of Esterline Technologies
Corporation, a Delaware corporation (the “Company”).

1.     PURPOSE.

        The purpose of this Plan is to compensate non-employee directors of the
Company.

2.     ELIGIBILITY.

        Persons eligible to receive options under this Plan shall be directors
of the Company who are not otherwise employed by the Company or any Related
Corporation (the “Non-Employee Directors” or “Non-Employee Director”).

        As used in this Plan, the term “Related Corporation,” when referring to
a subsidiary corporation, shall mean any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if, at the time an
Award is granted, each of the corporations other than the last corporation in
the unbroken chain owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock of one of the other
corporations in such chain. When referring to a parent corporation, the term
“Related Corporation” shall mean any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, at the time an Award
is awarded, each of the corporations other than the Company owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock of one of the other corporations in such chain.

3.      STOCK.

        Subject to approval of the Plan by shareholders of the Company, within
forty-five days following each annual meeting of shareholders of the Company at
which directors of the Company are elected (commencing with the Annual Meeting
of Shareholders of the Company held in fiscal 1995), each person who is then a
Non-Employee Director of the Company shall be awarded shares of the Company’s
authorized but unissued, or reacquired, Common Stock with an aggregate Fair
Market Value of $10,000. Each Award shall consist of that number of shares of
Common Stock determined by dividing $10,000 by the price per share at which the
Company’s Common Stock last traded on the New York Stock Exchange on the date of
such annual meeting of shareholders. Awards of a maximum of 100,000 shares of
Common Stock in the aggregate may be granted pursuant to the Plan, subject to
adjustment as set forth in Section 4(c) hereof.

 

--------------------------------------------------------------------------------

4.     TERMS AND CONDITIONS OF AWARDS.

        (a)        TRANSFER OF AWARD.

        The shares of Common Stock awarded under this Plan and the rights and
privileges conferred by this Plan may not be transferred, assigned or pledged in
any manner (whether by operation of law or otherwise) for at least six months
from the date of an Award, other than by will or by applicable laws of descent
and distribution or pursuant to a qualified domestic relations order, as defined
by the Internal Revenue Code of 1986, as amended (the “Code”), or the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), or the rules and
regulations thereunder, and shall not be subject to execution, attachment or
similar process. Any attempt to transfer, assign, pledge or otherwise dispose of
any such shares or of any right or privilege conferred by this Plan contrary to
the provisions hereof, or any attempt to sell, levy or any attachment or similar
process upon the rights and privileges conferred by this Plan will be null and
void.

        (b)        SECURITIES REGULATION; “GROSS-UP” PAYMENTS; TAX WITHHOLDING.

                     (1)        Shares of Common Stock shall not be issued with
respect to an Award unless the issuance and delivery of such shares shall comply
with all relevant provisions of law, including, without limitation, any
applicable state securities laws, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), the rules and
regulations thereunder (including, without limitation, Rule 16b-3 under the
Exchange Act) and the requirements of any stock exchange upon which such shares
may then be listed, and such issuance shall be further subject to the approval
of counsel for the Company with respect to such compliance, including the
availability of an exemption from registration for the issuance of such shares.
The inability of the Company to obtain from any regulatory body the authority
deemed by the Company to be necessary for the lawful issuance of any shares
under this Plan, or the unavailability of an exemption from registration for the
issuance of any shares under this Plan, shall relieve the Company of any
liability with respect to the non-issuance of such shares.

                     As a condition to the issuance of such shares, the Company
may require a Non-Employee Director to represent and warrant in writing at the
time of such issuance that the shares will be held only for investment and
without any then-present intention to sell or distribute such shares. At the
option of the Company, a stop-transfer order against such shares may be placed
on the stock books and records of the Company, and a legend indicating that the
shares may not be pledged, sold or otherwise transferred unless an opinion of
counsel is provided stating that such transfer is not in violation of any
applicable law or regulation, may be stamped on the certificates representing
such shares in order to assure an exemption from registration. The Company also
may require such other documentation as may from time to time be necessary to
comply with federal and state securities laws. THE COMPANY HAS NO OBLIGATION TO
UNDERTAKE REGISTRATION OF THE SHARES OF COMMON STOCK ISSUABLE UNDER THIS PLAN.

-2-

--------------------------------------------------------------------------------

                     (2)        In connection with each Award, the Company shall
pay Non-Employee Directors cash or immediately available funds representing the
federal income tax liabilities which might be imposed upon such Non-Employee
Directors with respect to such Awards, computed as follows: The sum of $10,000
divided by (1 minus the maximum federal income tax rate for individuals per
Section 1 of the Code) minus $10,000.

                     (3)        As a condition to the issuance of any shares of
Common Stock awarded under this Plan, each Non-Employee Director shall make such
arrangements as the Company may require for the satisfaction of any federal,
state or local withholding tax obligations that may arise in connection with
such issuance.

                     (4)        The issuance, transfer or delivery of
certificates representing shares of Common Stock awarded under this Plan may be
delayed, at the discretion of the Board, until the Company is satisfied that the
applicable requirements of the federal and state securities laws and the
withholding provisions of the Code have been met.

        (c)        SIGNIFICANT TRANSACTIONS; ADJUSTMENTS.

                     (1)        If (i) the Company shall at any time be involved
in a transaction described in Section 424(a) of the Code (or any successor
provision) or any “corporate transaction” described in the regulations
thereunder; (ii) the Company shall declare a dividend payable in, or shall
subdivide or combine, its Common Stock or (iii) any other event with
substantially the same effect shall occur, the number of shares of Common Stock
available under Section 3 of this Plan shall automatically be increased or
decreased, as the case may be, proportionately, without further action on the
part of the Company or the Company’s shareholders.

                     (2)        The grant of shares of Common Stock under this
Plan shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure, to merge, consolidate or dissolve, to liquidate or to sell
or transfer all or any part of its business or assets.

5.     EFFECTIVE DATE; TERM.

        Subject to approval of this Plan by shareholders of the Company, this
Plan shall be effective as of the date it is approved by the Board and Awards
may be granted in accordance with this Plan until the earlier of the following:
(1) the Plan is terminated by the Company or (2) no further shares are available
for grant hereunder. If there are insufficient shares available to satisfy in
full the number of shares of Common Stock to be included in each Award pursuant
to Section 3, then the remaining number of shares available for award hereunder
shall be awarded to the Non-Employee Directors on a pro rata basis.

6.     AMENDMENT OF PLAN.

        The Company may, at any time, modify, amend or terminate this Plan,
including, without limitation, such modifications or amendments as are necessary
to maintain

-3-

--------------------------------------------------------------------------------

compliance with applicable statutes, rules or regulations; provided, that: (i)
the approval of the holders of a majority of the Company’s outstanding shares of
voting capital stock represented at a meeting at which a quorum is present is
required for any amendment that will permit Awards to a class of persons other
than those currently eligible to receive Awards under this Plan or that would
cause this Plan to no longer comply with Rule 16b-3 under the Exchange Act, as
amended, or any successor rule or other regulatory requirements; and (ii) this
Plan shall not be amended more than once every six (6) months, other than to
comport with changes in the Code, ERISA, or the rules thereunder.

-4-

--------------------------------------------------------------------------------