EXHIBIT 10.1

Esterline Technologies Corporation

ANNUAL INCENTIVE COMPENSATION PLAN

Fiscal Year 2014

 

A. Purpose.  Esterline has designed this Plan to reward key employees for
achieving strong business performance that creates more value for Esterline
shareholders. The Plan encourages participants to make business decisions that:

 

  1. Produce profit growth over the prior year; and

 

  2. Earn good returns on Company investment.

 

B. Participation and Awards

 

  1. Employees become Plan participants after selection by their president or
general manager, approval by Esterline officers, and issuance of an appointment
letter.

 

  2. Esterline will establish an incentive compensation target award the
participant will earn if the Company achieves the Plan’s performance goals. The
target award will be expressed as a percentage of the participant’s annual base
salary rate in effect on the last day of the fiscal year.

 

  3. Participants’ actual awards will vary depending on Company performance, and
will be calculated as a percentage of their target award.

 

C. Performance Goals

 

  1. The Plan’s two performance goals are growth in operating earnings (EBIT)1
over the prior fiscal year, and return on operating investment (“ROI”)2. The
goals for this Plan are stated on the participant’s appointment letter, titled
“Incentive Plan Performance Goals” (“Plan Goals”). The goals are weighted based
on Esterline priorities for your company’s performance this year.

 

  2. Participants will receive 100% of their target award if the Company
achieves its Plan Goals. Participants will receive no award if Company
performance falls short or equals the thresholds. They will receive less than
their target award for results that exceed the thresholds, but fall short of
Plan Goals. If Company performance exceeds Plan Goals, participants will receive
more than their target award, up to a maximum of 200%. Performance above those
maximums will earn no additional IC.

 

D. Payment Calculations and Eligibility

 

  1. For purposes of calculating both ROI and earnings growth achievement, the
Company will round actual results upward to the next half percentage point. For
example, an actual ROI achievement of 21.1% would be rounded to 21.5%.

 

 

1 “Earnings” is defined as total fiscal year operating earnings after all
incentive plan accruals, but before interest, federal taxes and corporate
charge.

2 “Investment” means the average monthly book investment, plus capitalized
leases, less “corporate” goodwill attributable yo acquisition decisions made by
Esterline.

 

LOGO [g658904logo_bottom.jpg]

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

Esterline Annual IC Plan FY14

Page 2

 

  2. At fiscal year-end, the Company will calculate Plan results for approval by
Esterline. Such approval is contingent in part on Esterline Board of Directors
Audit Committee acceptance of the corporation’s year-end financial statements.
The Company will make Plan payments by January 10 of the following fiscal year,
subject to these conditions.

 

  3. Participants must be employed by an Esterline company through the day on
which Plan payments are made to be eligible for payment under this Plan. Terms
for new participants who enter the Plan during the year will normally be
specified in a written job offer or compensation agreement approved by
Esterline. If not otherwise specified, payments will be pro-rated based on the
number of full calendar months a participant has been employed by the Company in
the fiscal year.

 

  4. If a participant’s employment or his/her participation in the Plan ends for
any reason prior to the date on which Plan payments are made, the participant
shall not be entitled to receive any IC payment. Provided, however, in the
instance of:

 

  a. a participant’s bona fide retirement, disability, or death, a pro rata
amount based on full calendar months of employment will be paid to the
participant or to his/her estate; and,

 

  b. In its discretion, Esterline may make other exceptions to this rule in
individual cases, if such exceptions are in writing and approved by the
Company’s Group Vice President, the VPHR, and the CEO.

General Terms

 

  1. The figures used in IC calculations will come from the Company’s usual
financial statements, prepared according to Esterline’s Accounting Policies and
to generally accepted accounting principles. Further information regarding Plan
calculations is available from the Company’s finance director and from
Esterline.

 

  2. This document, together with the following information, comprises the
entire Plan: (a) Participant’s target award appointment letter; and (b) Plan
Goals and any adjustments shown on Attachment A to the appointment letter.

 

  3. Esterline may modify or terminate this Plan at any time with advance,
written notice to affected participants.

 

  4. This Plan does not affect participants’ terms of employment, except as
specifically provided here. This Plan does not guarantee continued employment.
Participants remain subject to the Company’s usual policies and practices.

Established and approved:

 

/s/ Curtis C. Reusser

President & CEO

Esterline Technologies Corporation

December 5, 2013

 

LOGO [g658904logo_bottom.jpg]