Exhibit 10.1

Execution Copy

THIRD AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AGREEMENT, dated as of August 28, 2014, is made by and between TransDigm
Group Incorporated, a Delaware corporation (the “Company”), and W. Nicholas
Howley (the “Executive”).

RECITALS:

WHEREAS, the Executive is a party to a Second Amended and Restated Employment
Agreement with the Company dated as of February 24, 2011, as amended as of
October 24, 2012 (the “Prior Employment Agreement”); and

WHEREAS, the term under the Prior Employment Agreement expires December 31,
2015; and

WHEREAS, the Company and the Executive would like to continue the Executive’s
employment with the Company on the terms set forth herein.

NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below, the parties hereto agree as follows:

1. Certain Definitions.

(a) “Annual Base Salary” shall have the meaning set forth in Section 4(a).

(b) “Black Scholes Value” shall have the meaning set forth in Section 4(c).

(c) “Board” shall mean the Board of Directors of the Company.

(d) “Cause” shall mean either of the following: (i) the repeated failure by the
Executive, after written notice from the Board, substantially to perform his
material duties and responsibilities as an officer or employee or director of
the Company or any of its subsidiaries (other than any such failure resulting
from incapacity due to reasonably documented physical or mental illness),
(ii) any willful misconduct by the Executive that has the effect of materially
injuring the business of the Company or any of its subsidiaries, including,
without limitation, the disclosure of material secret or confidential
information of the Company or any of its subsidiaries, or (iii) the Executive’s
conviction of, or pleading “guilty” or “ no contest” to a felony that is or
could reasonably be expected to result in material harm to the Company or any of
its subsidiaries.

(e) “Change in Control” shall mean the occurrence of an event described in (i),
(ii), (iii) or (iv) below:

(i) A change in ownership or control of the Company after the Effective Date
effected through a transaction or series of transactions (other than an offering
of Common Stock to the general public through a registration statement filed
with the Securities and Exchange Commission), including by way of merger,
consolidation or otherwise, whereby any “person” or related “group” of “persons”
(as such terms are used in Sections

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13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its
subsidiaries, an employee benefit plan maintained by the Company or any of its
subsidiaries or a “person” that, prior to such transaction, directly or
indirectly controls, is controlled by, or is under common control with, the
Company) directly or indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) of securities of the Company
possessing more than fifty percent (50%) of the total combined voting power of
the Company’s securities outstanding immediately after such acquisition.

(ii) The individuals who, as of the date hereof, are members of the Board of
Directors of the Company (the “Incumbent Board”), cease for any reason to
constitute at least fifty percent (50%) of the members of the Board; provided,
however, that if the election, or nomination for election by the Company’s
common stockholders, of any new director was approved by a vote of at least
two-thirds of directors then comprising the Incumbent Board, such new director
shall, for purposes of this Plan, be considered as a member of the Incumbent
Board; provided further, however, that no individual shall be considered a
member of the Incumbent Board if such individual initially assumed office as a
result of either an actual or threatened “Election Contest” (as described in
Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board (a “Proxy Contest”) including by reason of any agreement intended to avoid
or settle any Election Contest or Proxy Contest.

(iii) The consummation of a complete liquidation or dissolution of the Company.

(iv) The consummation of a sale or other disposition of all or substantially all
of the assets of the Company to any Person (other than a transfer to a
subsidiary).

(f) “Code” shall mean the Internal Revenue Code of 1986, as amended. Reference
to a Section of the Code includes all rulings, regulations, notices,
announcements, decisions, orders and other pronouncements that are issued by the
United States Department of the Treasury, the Internal Revenue Service, or any
court of competent jurisdiction that are lawful and pertinent to the
interpretation, application or effectiveness of such Section.

(g) “Common Stock” shall mean the common stock of the Company, $0.01 par value
per share.

(h) “Common Stock Limit” shall have the meaning set forth in Section 4(g).

(i) “Company” shall have the meaning set forth in the preamble hereto.

(j) “Company Equity” shall have the meaning set forth in Section 4(g).

(k) “Compensation Committee” shall mean the Compensation Committee of the Board
whose members shall be appointed by the Board from time to time.

 

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(l) “Date of Termination” shall mean (i) if the Executive’s employment is
terminated by reason of his death, the date of his death, and (ii) if the
Executive’s employment is terminated pursuant to Sections 5(a)(ii)—(vi), the
date specified in the Notice of Termination.

(m) “Disability” shall mean the inability of the Executive to perform his duties
and responsibilities as an officer or employee of the Company or any of its
subsidiaries on a full-time basis for more than six months within any 12-month
period because of a physical, mental or emotional incapacity resulting from
injury, sickness or disease.

(n) “Effective Date” shall mean August 28, 2014.

(o) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(p) “Executive” shall have the meaning set forth in the preamble hereto.

(q) “Fair Market Value” of Common Stock shall mean, as of any date, the closing
price of the Common Stock on the New York Stock Exchange or any other exchange
on which the Common Stock is traded on the trading day immediately preceding
such date.

(r) “Good Reason” shall mean the occurrence of any of the following: (i) a
material diminution in the Executive’s title, position, duties or
responsibilities (including reporting responsibilities), without his prior
written consent, it being understood that a change in the Executive’s title to
Executive Chairman shall not constitute Good Reason so long as (I) Executive
Chairman is a full-time executive employee position, (II) the Executive has
duties and responsibilities that are consistent with those customarily
associated with the title of Executive Chairman and that are acceptable to the
Executive, and (III) there is no reduction in any element of the Executive’s
compensation or benefits, (ii) a reduction of the Executive’s Annual Base Salary
or annual bonus opportunity without his prior written consent, (iii) Executive
is not re-elected to the Board, (iv) the Company requires the Executive, without
his prior written consent, to be based at any office or location that requires a
relocation greater than 30 miles from Cleveland, Ohio, or (v) any material
breach of this Agreement by the Company. In addition to the foregoing, the term
“Good Reason” shall also be deemed to exist if the requirements of clauses
(i) and (ii) below are met:

(i) Any of the following events occurs:

(A) There is a change in the Executive’s title, position, duties or
responsibilities (including reporting responsibilities) which does not represent
a promotion from the title, position, duties or responsibilities that are
provided for under this Agreement;

(B) The Executive is assigned any duties or responsibilities which are
inconsistent with his title, position, duties or responsibilities that are
provided for under this Agreement; or

(C) There is a reduction of the Executive’s aggregate cash compensation
(including bonus opportunities), or a change in Executive’s benefits such that
following such change, Executive’s benefits are not substantially

 

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comparable to those to which he was entitled immediately prior to such change,
in each case without his prior written consent.

(ii) The event described in clause (i) above occurs under any of the following
circumstances:

(A) Within the one year period following a Change in Control,

(B) Prior to the date of a Change in Control, at the request of a third party
who has indicated an intention or taken steps reasonably calculated to effect a
Change in Control, or

(C) Otherwise in connection with, or in anticipation of, a Change in Control
which has been threatened or proposed.

(s) “Notice of Termination” shall have the meaning set forth in Section 5(b).

(t) “Option Agreements” shall mean the written agreements between the Company
and the Executive pursuant to which the Executive holds or is granted options to
purchase Common Stock, including, without limitation, agreements evidencing
options granted under the Option Plan.

(u) “Option Plan” shall mean any option plan adopted or maintained by the
Company for employees generally.

(v) “Options” as of any date of determination shall mean options held by the
Executive as of such date to purchase Common Stock of the Company.

(w) “Payment Period” shall have the meaning set forth in Section 6(b)(i).

(x) “Prior Employment Agreement” shall have the meaning set forth in the
Recitals.

(y) “Retention Limit” shall have the meaning set forth in Section 4(g).

(z) “Retirement” shall mean voluntary termination of employment by the Executive
after age 60 and after 15 years of service with the Company.

(aa) “Term” shall have the meaning set forth in Section 2.

2. Employment. The Company shall continue to employ the Executive and the
Executive shall remain in the employ of the Company, for the period set forth in
this Section 2, in the positions set forth in Section 3 and upon the other terms
and conditions herein provided. The term of employment under this Agreement (the
“Term”) shall be for the period beginning on the Effective Date and ending on
September 30, 2019 unless earlier terminated as provided in Section 5.

3. Position and Duties. During the Term, the Executive shall serve as the
Chairman and Chief Executive Officer of the Company with such customary
responsibilities, duties and

 

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authority as may from time to time be assigned to the Executive by the Board. In
order to provide for the orderly transition of senior executive leadership, the
Board may, during the Term and with the Executive’s consent, determine that the
Executive shall serve as Executive Chairman, which shall be a full-time
executive officer position, entitling the Executive to all of the compensation,
rights and benefits provided for in this Agreement. During the Term, the
Executive shall devote substantially all his working time and efforts to the
business and affairs of the Company; provided, that it shall not be considered a
violation of the foregoing for the Executive to (i) with the prior consent of
the Board (which consent shall not unreasonably be withheld), serve on
corporate, industry, civic or charitable boards or committees (provided, that
without such prior consent of the Board, the Executive shall, subject to the
limitation set forth below, be permitted to continue to serve as a member of the
board of directors (or board of trustees) or as a committee member, as the case
may be, of Case Western Reserve University, Consolidated Precision Products
Corp., Cristo Rey National Network, St. Martin de Porres, and the Rock and Roll
Hall of Fame), and (ii) manage his personal or family investments, so long as
none of such activities significantly interferes with the Executive’s duties
hereunder.

4. Compensation and Related Matters.

(a) Annual Base Salary. During the Term, the Executive shall receive a base
salary (the “Annual Base Salary”) at a rate that is no less than $1,040,000 per
annum in calendar year 2014, payable in accordance with the Company’s normal
payroll practices. The rate of the Annual Base Salary shall be reviewed by the
Compensation Committee on or prior to each anniversary of the Effective Date
during the Term and may be increased, but not decreased, upon such review.

(b) Bonus. For each fiscal year during the Term, the Executive shall be eligible
to participate in the Company’s annual cash bonus plan in accordance with the
terms and provisions applicable to other senior executives of the Company,
which, for fiscal years beginning with fiscal year 2015, shall be consistent
with the Company’s executive bonus policy adopted in July 2014. The Executive’s
target bonus for each fiscal year during the term (beginning with fiscal year
2014) will be 125% of his Annual Base Salary.

(c) Long-Term Incentive Compensation. During the Term, the Executive shall be
entitled to participate in the Option Plan or any successor plan thereto or any
other long-term incentive plan implemented by the Company. Specifically, in the
first three months of fiscal 2015 in accordance with the Company’s customary
practices and timing, the Company will award to the Executive a number of stock
options equal to $10,600,000 divided by the Black Scholes Value. The “Black
Scholes Value” shall be an amount derived by using the Black Scholes method of
valuing an option to purchase a share of Common Stock using the following
assumptions: a current market price equal to the average of the closing prices
of the Common Stock for the 45 trading days ending on the trading day
immediately preceding the date of grant, a strike price equal to the closing
price of a share of Common Stock on the trading day immediately preceding the
grant date, a risk free rate of 1.88%, a volatility of 35% and an expected life
of six years. It is understood that the agreed upon assumptions for calculating
the Black Scholes Value equal approximately 37% of the market price of a share
of Common Stock used in calculating the Black Scholes Value. Such options will
vest at the end of fiscal year 2019. The Company will award to the Executive, in
the first three months of fiscal years 2016

 

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through 2019 in accordance with the Company’s customary practices and timing, a
number of stock options equal to (i) $10,600,000, increased by 3.5% each fiscal
year of the term beginning with fiscal year 2016 divided by (ii) the Black
Scholes Value. Such options will vest at the end of the fourth fiscal year
following the date of grant for options granted in the first three months of
fiscal years 2016 and 2017, and the third fiscal year for options granted in the
first three months of fiscal years 2018 and 2019. The terms of the stock options
will provide that if the Executive incurs a termination of employment under any
of the circumstances described in Section 5(a)(i), 5(a)(ii), 5(a)(iv) or 5(a)(v)
or upon the Executive’s Retirement, vesting will continue with respect to a
percentage of such options after such termination of employment as set forth on
Exhibit A. The vesting provisions for the options to be granted under this
Section 4(c), including the performance vesting criteria and calculation
methodology, shall be no less favorable to the Executive than the vesting
provisions used for options granted by the Company in fiscal years 2013 and 2014
year to date, including options that vested based upon the Company’s financial
statements as of September 30, 2013.

(d) Benefits. During the Term, the Executive shall be entitled to participate in
the other employee benefit plans, programs and arrangements of the Company now
(or, to the extent determined by the Board or Compensation Committee, hereafter)
in effect which are applicable to the senior officers of the Company generally,
subject to and on a basis consistent with the terms, conditions and overall
administration thereof (including the right of the Company to amend, modify or
terminate such plans).

(e) Expenses. Pursuant to the Company’s customary policies in force at the time
of payment, the Executive shall be reimbursed for all expenses properly incurred
by the Executive on the Company’s behalf in the performance of the Executive’s
duties hereunder.

(f) Vacation Pay. The Executive shall be entitled to an amount of annual
vacation days per year, and to compensation in respect of earned but unused
vacation days, in accordance with the Company’s vacation policy as in effect as
of the Effective Date. The Executive shall also be entitled to paid holidays in
accordance with the Company’s practices with respect to same as in effect as of
the Effective Date.

(g) Stock Retention Guidelines. At all times during the Executive’s continued
full-time employment by the Company, the Executive shall hold an aggregate
amount of “Company Equity” with a value equal to or greater than $10,000,000
(the “Retention Limit”), at least $5,000,000 of which shall constitute Common
Stock held by the Executive (the “Common Stock Limit”). This Retention Limit and
the Common Stock Limit will supersede any Retention Limit in any prior dated
option or other agreement between the Company and the Executive. For purposes of
this Section 4(g), the Company Equity shall be an amount equal to (i) the Fair
Market Value of any Common Stock held by the Executive plus (ii) the value of
all vested options then held by the Executive, which will be equal to the Fair
Market Value of the Common Stock underlying the options over the exercise price.
If at any time after the date hereof the aggregate amount of Company Equity held
by the Executive falls below the Retention Limit or if the aggregate amount of
Common Stock held by the Executive falls below the Common Stock Limit, in either
case, because of a decline in the Fair Market Value of the Common Stock from its
Fair Market Value as of the date hereof, the Executive will have three (3) years
to reach the Retention Limit or the Common Stock Limit, as applicable. The
Executive agrees not to make

 

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any sales of vested Options unless the Executive would, at the time of the sale,
be in compliance with the Retention Limit and the Common Stock Limit. The
Executive’s failure to hold Company Equity or Common Stock in accordance with
this Section 4(g) shall, after notice from the Company to the Executive and a
30-day opportunity to cure, result in the Executive’s forfeiture of all unvested
Options, unless otherwise determined by the Compensation Committee of the Board,
in its sole discretion. In the event the aggregate amount of Company Equity held
by the Executive falls below the Retention Limit or if the aggregate amount of
Common Stock held by the Executive falls below the Common Stock Limit, in either
case, because of a decline in the Fair Market Value of the Common Stock from its
Fair Market Value as of the date hereof, the notice giving rise to the 30-day
opportunity to cure shall not be given by the Company to the Executive until the
three (3) year period referred to above has expired.

5. Termination.

(a) The Executive’s employment hereunder may be terminated by the Company or the
Executive, as applicable, without any breach of this Agreement only under the
following circumstances and in accordance with subsection (b):

(i) Death. The Executive’s employment hereunder shall terminate upon his death.

(ii) Disability. If the Company determines in good faith that the Executive has
incurred a Disability, the Company may give the Executive written notice of its
intention to terminate the Executive’s employment. In such event, the
Executive’s employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive, provided that within such 30
day period the Executive shall not have returned to full-time performance of his
duties. The Executive shall continue to receive his Annual Base Salary until the
90th day following the date of the Notice of Termination.

(iii) Termination for Cause. The Company may terminate the Executive’s
employment hereunder for Cause.

(iv) Resignation for Good Reason. The Executive may resign his employment
hereunder for Good Reason.

(v) Termination without Cause. The Company may terminate the Executive’s
employment hereunder without Cause.

(vi) Resignation without Good Reason. The Executive may resign his employment
hereunder without Good Reason.

(b) Notice of Termination. Any termination of the Executive’s employment by the
Company or by the Executive under this Section 5 (other than termination
pursuant to subsection (a)(i)) shall be communicated by a written notice from
the Board or the Executive to the other, indicating the specific termination
provision in this Agreement relied upon, setting forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated, and specifying a Date
of Termination

 

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which, except in the case of Termination by reason of Disability or Termination
for Cause pursuant to Section 5(a)(ii) or 5(a)(iii), respectively, shall be at
least 90 days following the date of such notice (a “Notice of Termination”). In
the event of Termination for Cause pursuant to Section 5(a)(iii), the Executive
shall have the right, if the basis for such Cause is curable, to cure the same
within 15 days following the Notice of Termination for Cause, and Cause shall
not be deemed to exist if the Executive cures the event giving rise to Cause
within such 15-day period. In the event of Termination by the Executive for Good
Reason pursuant to Section 5(a)(iv), the Company shall have the right, if the
basis for such Good Reason is curable, to cure the same within 15 days following
the Notice of Termination for Good Reason, and Good Reason shall not be deemed
to exist if the Company cures the event giving rise to Good Reason within such
15-day period. The Executive shall continue to receive his Annual Base Salary,
annual bonus and all other compensation and perquisites referenced in Section 4
through the Date of Termination.

6. Severance Payments.

(a) Termination for any Reason. In the event the Executive’s employment with the
Company is terminated for any reason, the Company shall pay the Executive (or
his beneficiary in the event of his death) any unpaid Annual Base Salary that
has accrued as of the Date of Termination, any unreimbursed expenses due to the
Executive and an amount for accrued but unused sick days and vacation days. The
Executive shall also be entitled to accrued, vested benefits under the Company’s
benefit plans and programs as provided therein. The Executive shall be entitled
to the additional payments and benefits described below only as set forth
herein. Notwithstanding any provision to the contrary in any outstanding option
agreement or in any existing or future equity-based incentive plan of the
Company or any award agreement thereunder, in no event will any vested options
of the Executive be forfeited on termination of employment for any reason;
provided, however, that in connection with a termination of the Executive for
Cause, any vested options shall terminate if they are not exercised within 18
months following the Date of Termination for Cause.

(b) Termination without Cause, Resignation for Good Reason or Termination by
Reason of Death or Disability. Subject to Section 6(c) and (d) and the
restrictions contained herein, in the event of the Executive’s Termination
without Cause (pursuant to Section 5(a)(v)), Resignation for Good Reason
(pursuant to Section 5(a)(iv)) or termination by reason of death or Disability
(pursuant to Section 5(a)(i) or (ii), respectively), the Company shall pay to
the Executive the amounts described in subsection (a). In addition, subject to
Section 6(c) and (d) and the restrictions contained herein, the Company shall do
all of the following:

(i) The Company shall pay to the Executive (or his beneficiary in the event of
his death) an amount equal to the “Severance Amount” described below. For
purposes of this Agreement, the Severance Amount is equal to the sum of:

(A) 2.0 times his Annual Base Salary and

(B) 2.0 times the greater of (I) the total of all bonuses paid (or payable) to
Executive in respect of the fiscal year ending immediately prior to the Date of
Termination, excluding any bonuses that are extraordinary in nature (e.g. a

 

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transaction related bonus), or (II) the target bonuses for the fiscal year in
which the Date of Termination falls, determined in accordance with the Company’s
bonus program or programs, if any.

The Severance Amount as so determined shall be payable to the Executive (or his
beneficiary) in substantially equal installments over the 24 month period
following the Date of Termination (the “Payment Period”) in accordance with the
Company’s regular payroll practices. Notwithstanding the foregoing, in the event
of a Resignation for Good Reason based on clause (II) of the definition of Good
Reason, the Severance Amount shall be equal to the sum of 1.0 times the
Executive’s Annual Base Salary and 1.0 times the greater of the bonus amounts
described in clauses (i)(B)(I) and (II) of this Section 6(b).

(ii) The Company shall offer to Executive continuation of any health plan
coverage of Executive in accordance with the requirements of applicable law
(e.g. “COBRA coverage” under the Employee Retirement Income Security Act of
1974), at a monthly cost to Executive that is not greater than the monthly cost
that Executive is being charged for such coverage or coverages as of the Date of
Termination. The Company may require Executive to complete and file any election
forms that are generally required of other employees to obtain COBRA coverage;
and Executive’s COBRA coverage may be terminable in accordance with applicable
law.

(iii) Notwithstanding the foregoing, in the event that the Company, in good
faith, and based upon clear and compelling written evidence, determines that, at
any time during the Payment Period, Executive is in material breach of his
obligations under Section 7 hereof, upon written notice to Executive, the
Company shall be entitled to suspend payment of the Severance Amount, pending
final determination of breach by a court of competent jurisdiction. In the event
such court finally determines the occurrence of a material breach, the Company
shall be entitled to retain any portion of the Severance Amount then unpaid, and
the Company shall have no further obligation with respect thereto. If instead,
such court finally determines that no such material breach occurred, upon such
determination the Company shall promptly pay Executive the full amount of any
portion of the Severance Amount that was not retained by the Company during such
suspension of payment, plus an amount of interest equal to the prime rate (as
reported in The Wall Street Journal on the date prior to the date of payment)
plus two percent (2%), and shall also reimburse Executive for his court costs
and attorney fees.

(c) Benefits Provided Upon Termination of Employment. If Executive’s termination
or resignation does not constitute a “separation from service,” as such term is
defined under Code Section 409A, Executive shall nevertheless be entitled to
receive all of the payments and benefits that Executive is entitled to receive
under this on account of his termination of employment. However, the payments
and benefits that Executive is entitled to under this Agreement shall not be
provided to Executive until such time as Executive has incurred a “separation
from service” within the meaning of Code Section 409A.

(d) Specified Employee Status Under Section 409A. Furthermore, notwithstanding
any provision of this Agreement to the contrary, if the Executive is a
“specified employee” (as

 

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defined by Code Section 409A) at the time of his termination of employment under
this Agreement (or, if later, his “separation from service” under Code
Section 409A), to the extent that a payment, reimbursement or benefit under
Section 6(b) is considered to provide for a “deferral of compensation” (as
determined under Code Section 409A), then such payment, reimbursement or benefit
shall not be paid or provided until six months after the Executive’s separation
from service, or his death, whichever occurs first. Any payments, reimbursements
or benefits that are withheld under this provision for the first six months
shall be payable in a lump sum on the 181st day after such termination of
employment (or, if later, separation from service).

The restrictions in this Section 6(d) shall be interpreted and applied solely to
the minimum extent necessary to comply with the requirements of Code
Section 409A(a)(2)(B). Accordingly, payments, benefits or reimbursements under
Section 6(b) or any other part of this Agreement may nevertheless be provided to
Executive within the six month period following the date of the Executive’s
termination of employment under this Agreement (or, if later, his “separation
from service” under Code Section 409A), to the extent that it would nevertheless
be permissible to do so under Code Section 409A because those payments,
reimbursements or benefits are (i) described in Treasury Regulations
Section 1.409A-1(b)(9)(iii) (i.e. payments within the limitations therein that
are being made on account of an involuntary termination or termination for good
reason, within the meaning of the Treasury Regulations), or (ii) benefits
described in Treasury Regulations Section 1.409A-1(b)(9)(v) (e.g. health care
benefits).

(e) Retirement Benefits. Without duplicating any benefits provided under
Section 6(b)(ii), following the Executive’s Retirement from the Company he will
be entitled to the benefits set forth on Exhibit B.

7. Competition; Nonsolicitation.

(a) During the Term and, following any termination of Executive’s employment for
any reason, for a period equal to (i) the Payment Period, in the case of a
termination of employment for which payments are made pursuant to Section 6(b)
hereof, or (ii) 24 months from the date of such termination in the event of a
voluntary termination of employment by the Executive without Good Reason, or a
termination by the Company for Cause, the Executive shall be subject to the
following restrictions:

(i) The Executive shall not, without the prior written consent of the Board,
directly or indirectly engage in, or have any interest in, or manage or operate
any person, firm, corporation, partnership or business (whether as director,
officer, employee, agent, representative, partner, security holder, consultant
or otherwise) that engages in any business (other than a business that
constitutes less than 5% of the relevant entity’s net revenue and a
proportionate share of its operating income) which competes with any business of
the Company or any entity owned by it anywhere in the world; provided, however,
that the Executive shall be permitted to acquire a stock interest in such a
corporation provided such stock is publicly traded and the stock so acquired
does not represent more than one percent of the outstanding shares of such
corporation.

(ii) The Executive shall not render services to any person, firm, corporation,
partnership or business (whether as director, officer, employee, agent,
representative,

 

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partner, security holder, consultant or otherwise) that are designed to advise,
assist or otherwise enable such person, firm, corporation, partnership or
business to acquire the stock of, an interest in, or the assets of, another
corporation or business operation that, within the 24 month period preceding the
Date of Termination, the Company has actively pursued, or had demonstrable plans
to pursue, as an acquisition target.

(b) During the Term and for a period of two years following any termination of
the Executive’s employment, the Executive shall not, directly or indirectly, on
his own behalf or on behalf of any other person or entity, whether as an owner,
employee, service provider or otherwise, solicit or induce any person who is or
was employed by, or providing consulting services to, the Company or any of its
direct or indirect subsidiaries during the twelve-month period prior to the date
of such termination, to terminate their employment or consulting relationship
with the Company or any such subsidiary.

(c) In the event the agreement in this Section 7 shall be determined by any
court of competent jurisdiction to be unenforceable by reason of its extending
for too great a period of time or over too great a geographical area or by
reason of its being too extensive in any other respect, it shall be interpreted
to extend only over the maximum period of time for which it may be enforceable,
and/or over the maximum geographical area as to which it may be enforceable
and/or to the maximum extent in all other respects as to which it may be
enforceable, all as determined by such court in such action.

8. Nondisclosure of Proprietary Information.

(a) Except as required in the faithful performance of the Executive’s duties
hereunder or pursuant to subsection (c), the Executive shall, in perpetuity,
maintain in confidence and shall not directly, indirectly or otherwise, use,
disseminate, disclose or publish, or use for his benefit or the benefit of any
person, firm, corporation or other entity any confidential or proprietary
information or trade secrets of or relating to the Company and its direct and
indirect subsidiaries, including, without limitation, information with respect
to the Company’s and such subsidiaries’ operations, processes, products,
inventions, business practices, finances, principals, vendors, suppliers,
customers, potential customers, marketing methods, costs, prices, contractual
relationships, regulatory status, compensation paid to employees or other terms
of employment, except for such information which is or becomes publicly
available other than as a result of a breach by the Executive of this Section 8,
or deliver to any person, firm, corporation or other entity any document,
record, notebook, computer program or similar repository of or containing any
such confidential or proprietary information or trade secrets. The parties
hereby stipulate and agree that as between them the foregoing matters are
important, material and confidential proprietary information and trade secrets
and affect the successful conduct of the businesses of the Company and its
direct and indirect subsidiaries (and any successor or assignee thereof).

(b) Upon termination of the Executive’s employment with the Company for any
reason, the Executive shall, upon the Company’s written request, promptly
deliver to the Company all correspondence, drawings, manuals, letters, notes,
notebooks, reports, programs, plans, proposals, financial documents, or any
other documents concerning the Company’s and its direct and indirect
subsidiaries’ customers, business plans, marketing strategies, products or
processes and/or which contain proprietary information or trade secrets.

 

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(c) The Executive may respond to a lawful and valid subpoena or other legal
process but shall give the Company the earliest possible notice thereof, shall,
as much in advance of the return date as possible, make available to the Company
and its counsel the documents and other information sought and shall assist such
counsel in resisting or otherwise responding to such process.

9. Injunctive Relief. It is recognized and acknowledged by the Executive that a
breach of the covenants contained in Sections 7 and 8 will cause irreparable
damage to the Company and its goodwill, the exact amount of which will be
difficult or impossible to ascertain, and that the remedies at law for any such
breach will be inadequate. Accordingly, the Executive agrees that in the event
of a breach of any of the covenants contained in Sections 7 and 8, in addition
to any other remedy which may be available at law or in equity, the Company
shall be entitled to specific performance and injunctive relief.

10. Survival. The expiration or termination of the Term shall not impair the
rights or obligations of any party hereto which shall have accrued hereunder
prior to such expiration.

11. Binding on Successors. This Agreement shall be binding upon and inure to the
benefit of the Company, the Executive and their respective successors, assigns,
personnel and legal representatives, executors, administrators, heirs,
distributees, devisees, and legatees, as applicable.

12. Governing Law. This Agreement shall be governed, construed, interpreted and
enforced in accordance with the substantive laws of the State of Ohio.

13. Validity. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

14. Notices. Any notice, request, claim, demand, document or other communication
hereunder to any party shall be effective upon receipt (or refusal of receipt)
and shall be in writing and delivered personally or sent by telex, telecopy, or
certified or registered mail, postage prepaid, as follows:

 

  (a) If to the Company, to:

TransDigm Group Incorporated

1301 East Ninth Street, Suite 3000

Cleveland, Ohio 44114

Attention: Corporate Secretary

with copies to:

TransDigm Group Incorporated

1301 East Ninth Street, Suite 3710

Cleveland, Ohio 44114

Attention: Chair, Compensation Committee

and

 

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Baker & Hostetler LLP

3200 PNC Center

1900 East 9th Street, Suite 3200

Cleveland, Ohio 44114 -3482

Attention: John M. Gherlein, Esq.

 

  (b) If to the Executive, to him at the home address reflected in the Company’s
records

with a copy to:

Perry & Karnatz, LLC

631 W. St. Clair Avenue

Cleveland, Ohio 44113

Attention: Dominic V. Perry, Esq.

or at any other address as any party shall have specified by notice in writing
to the other party in accordance with this Section 14.

15. Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same agreement.

16. Entire Agreement; Prior Employment Agreement. The terms of this Agreement,
together with the Option Plan and the Option Agreements, are intended by the
parties to be the final expression of their agreement with respect to the
employment of the Executive by the Company and may not be contradicted by
evidence of any prior or contemporaneous agreement, including, but not limited
to, the Prior Employment Agreement and any plans and agreements referenced
therein. The parties further intend that this Agreement, and the aforementioned
contemporaneous documents, shall constitute the complete and exclusive statement
of its terms and that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative, or other legal proceeding to vary the terms of this
Agreement. From and after the date hereof, this Agreement shall supersede the
Prior Employment Agreement, except for any rights or obligations which survive
pursuant to Section 10 thereof.

17. Amendments; Waivers. This Agreement may not be modified, amended, or
terminated except by an instrument in writing, signed by the Executive and
authorized on behalf of the Company by the Compensation Committee. By an
instrument in writing similarly executed, the Executive or the Company may waive
compliance by the other party or parties with any provision of this Agreement
that such other party was or is obligated to comply with or perform; provided,
however, that such waiver shall not operate as a waiver of, or estoppel with
respect to, any other or subsequent failure. No failure to exercise and no delay
in exercising any right, remedy or power hereunder shall preclude any other or
further exercise of any other right, remedy or power provided herein or by law
or in equity.

18. No Inconsistent Actions. The parties hereto shall not voluntarily undertake
or fail to undertake any action or course of action inconsistent with the
provisions or essential intent of

 

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this Agreement. Furthermore, it is the intent of the parties hereto to act in a
fair and reasonable manner with respect to the interpretation and application of
the provisions of this Agreement.

19. Arbitration. Any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration, conducted before a
panel of three arbitrators in Cleveland, Ohio, in accordance with the rules of
the American Arbitration Association then in effect. Judgment may be entered on
the arbitrator’s award in any court having jurisdiction; provided, however, that
the Company shall be entitled to seek a restraining order or injunction in any
court of competent jurisdiction to prevent any continuation of any violation of
the provisions of Section 7 or 8 of this Agreement and the Executive hereby
consents that such restraining order or injunction may be granted without the
necessity of the Company’s posting any bond; and provided further, that the
Executive shall be entitled to seek specific performance of his right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement. Each of the parties hereto
shall bear its share of the fees and expenses of any arbitration hereunder.

20. Indemnification and Insurance. The Company shall indemnify the Executive to
the fullest extent permitted by the laws of the State of Delaware, as in effect
at the time of the subject act or omission, and shall advance to the Executive
reasonable attorneys’ fees and expenses as such fees and expenses are incurred
(subject to an undertaking from the Executive to repay such advances if it shall
be finally determined by a judicial decision which is not subject to further
appeal that the Executive was not entitled to the reimbursement of such fees and
expenses) and he shall be entitled to the protection of any insurance policies
the Company shall elect to maintain generally for the benefit of its directors
and officers (“Directors and Officers Insurance”) against all costs, charges and
expenses incurred or sustained by him in connection with any action, suit or
proceeding to which he may be made a party by reason of his being or having been
a director, officer or employee of the Company or any of its subsidiaries or his
serving or having served any other enterprise as a director, officer or employee
at the request of the Company (other than any dispute, claim or controversy
arising under or relating to this Agreement). The Company covenants to maintain
during the Term and for a reasonable period of time thereafter (which period
shall not be less than five years) for the benefit of the Executive (in his
capacity as a current or former officer and director of the Company, as
applicable) Directors and Officers Insurance providing customary benefits to the
Executive with respect to all periods during the Term.

21 Legal Expenses. The Company shall pay the Executive’s reasonable fees and
costs incurred in connection with the preparation and negotiation of this
Agreement.

22 Post-Termination Assistance. The Executive agrees that, for a reasonable
period after the Executive’s termination of employment for any reason, the
Executive will assist the Company and its subsidiaries in defense of any claims
that may be made against any of them, to the extent that such claims may relate
to services performed by the Executive for any of them in connection with his
employment with the Company. The Executive agrees to promptly inform the Company
if the Executive becomes aware of any lawsuits involving such claims that may be
filed against the Company or any of its subsidiaries. The Company agrees to
reimburse the Executive for all of the Executive’s reasonable out-of-pocket
expenses associated with such assistance, including reasonable travel expenses.
The Company agrees to provide reasonable notice of its need for

 

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such assistance and compensation to Executive for such assistance at a rate
equal to $500.00 per hour, based on the actual number of hours and quarter hours
of assistance provided. Executive shall not be required to render more than 40
hours per month of assistance under this provision, but may elect to render more
hours per month. The Executive also agrees to the extent not otherwise
prohibited by law, to promptly inform the Company if asked to assist in any
investigation of the Company or any of its subsidiaries that may relate to
services performed by the Executive for any of them, regardless of whether a
lawsuit has then been filed against any of them with respect to such
investigation.

[signature page follows]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement on the date and
year first above written.

 

TRANSDIGM GROUP INCORPORATED By:   /s/ Gregory Rufus Name:   Gregory Rufus
Title:   Executive Vice President, Chief Financial Officer and Secretary
EXECUTIVE /s/ W. Nicholas Howley W. Nicholas Howley

 

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Exhibit A

The percentage of options as to which vesting will continue following a
termination of the Executive’s employment described in the last sentence of
Section 4(c) or following the Executive’s retirement (each a “covered
departure”) shall be as set forth in the following table:

 

     Options Awarded in
the first three months of fiscal year:        2015     2016     2017     2018  
  2019  

Covered departure after end of fiscal year:

          

2015

     30 %         

2016

     60 %      30 %       

2017

     80 %      60 %      30 %     

2018

     90 %      80 %      60 %      33 %   

2019

     100 %      100 %      80 %      66 %      33 % 

2020

         100 %      100 %      66 % 

2021

             100 % 

 

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Exhibit B

Retirement Benefits

The Company will reimburse the Executive for 100% of the cost of a Medicare
Supplement Policy for himself and his spouse following the Executive’s
retirement from the Company, which is intended to supplement Medicare coverage
for which the Executive and his spouse shall be responsible. In addition, the
Company will reimburse the Executive for 100% of the cost of an Exec-U-Care
coverage policy (or if Exec-U-Care coverage is no longer available,
substantially similar coverage) for himself and his spouse to further supplement
the health care coverage available to each of them. The purpose of reimbursing
the Executive for 100% of the cost of these additional coverages is to
reasonably replicate the general health insurance coverage levels provided to
Company executives from time-to-time. The Company will also make available to
the Executive the services of Claims Security of America, or a comparable
organization, to work with the Executive and his spouse in understanding their
medical coverages and to provide administrative assistance in connection with
their medical coverage support. The parties further understand that the
providing of these reimbursements and access to administrative assistance
services may be modified and/or changed by the Company, in its discretion, in
the event that providing of these reimbursements and access to administrative
assistance services creates Company welfare benefit plan Internal Revenue Code
discrimination issues or unreasonable tax results upon the Company or the
Executive and his spouse, given the benefit being provided. Should such an event
occur, the Company agrees to assure appropriate healthcare coverage continues to
be available to the Executive and his spouse on terms as nearly comparable to
the foregoing as practicable under the circumstances. The benefits described
herein shall be

 

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provided for the life of the Executive following his retirement and for the life
of his spouse if she survives him.

 

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