exv10w12



 





Exhibit 10.12




Employment Agreement




     This Employment Agreement (the “Agreement”) dated as of January 4, 2007 (the
“Effective Date”), is made by and between Vought Aircraft Industries, Inc., a Delaware
corporation, (together with any successor thereto, the “Company”) and Keith Howe (the
“Executive”).



RECITALS





	A.	 	It is the desire of the Company to assure itself of the services of the Executive by entering
into this Agreement.






	B.	 	The Executive and the Company mutually desire that Executive provide services to the Company
on the terms herein provided.





AGREEMENT




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



1. Employment.





	 	(a)	 	General. The Company shall employ the Executive and the Executive
shall enter the employ of the Company, for the period set forth in Section
1(b), in the position set forth in Section 1(c), and upon the other terms
and conditions herein provided.
	 
	 	(b)	 	Employment Term. The initial term of employment under this Agreement
(the “Initial Term”) shall be for the period beginning on January 16, 2007 and
ending at the end of the day on December 31, 2007, unless earlier terminated as
provided in Section 3. The employment term hereunder shall automatically be
extended for successive one-year periods (“Extension Terms” and, collectively
with the Initial Term, the “Term”) unless either party gives notice of
non-extension to the other no later than ninety (90) days prior to the expiration of
the then-applicable Term and subject to earlier termination as provided in Section
3.
	 
	 	(c)	 	Position and Duties. The Executive shall serve as the Chief Financial
Officer of the Company with such customary responsibilities, duties and authority as
may from time to time be assigned to the Executive by the Chief Executive Officer of
the Company. The Executive shall devote substantially all his working time and efforts
to the business and affairs of the Company (which may include service to its
Affiliates). The Executive agrees to observe and comply with the rules and policies of
the Company as adopted by the Company from time to time. During the Term, it shall not
be a violation of this Agreement for the Executive to (i)




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	 	 	 	serve on industry trade, civic or charitable boards or committees; (ii) deliver
lectures or fulfill speaking engagements; (iii) manage his personal investments and
affairs; and (iv) serve on the board of directors of for-profit enterprises with the
Chief Executive Officer’s prior consent, as long as such activities do not
materially interfere with the performance of the Executive’s duties and
responsibilities as an employee of the Company. During his employment and for the
12-month period following termination of his employment with the Company, (x) the
Executive agrees not to disparage in any material respect the Company, any of its
products or practices, or any of its directors, officers, agents, representatives,
stockholders or Affiliates, either orally or in writing, and (y) the Company agrees
not to disparage in any material respect the Executive.





2. Compensation and Related Matters.





	 	(a)	 	Annual Base Salary. During the Term, the Executive shall receive a
base salary at a rate of $325,000 per annum (the “Annual Base Salary”), which
shall be paid in accordance with the customary payroll practices of the Company,
subject to adjustment as determined by the Board of Directors of the Company or its
committee (“the Board”).
	 
	 	(b)	 	Annual Bonus. During the Term, the Executive will be eligible to
receive annual bonuses based upon achieving annual financial plan and organization
metrics to be determined by the Board, with a target bonus of 75% of Annual Base Salary
for calendar year 2007.
	 
	 	(c)	 	Relocation Benefits. In addition to the annual bonus opportunity, the
Executive will receive relocation benefits as described in the attached document
entitled “Relocation Benefit Summary – Plan 2.”
	 
	 	(d)	 	Lump Sum Bonus. In recognition of the financial impact resulting from
Executive’s terminating his relationship with his previous employer and accepting
employment with the Company, the Executive will receive a one-time bonus in the amount
of $200,000, payable in a lump sum within 30 days of Executive’s commencement of
employment and subject to applicable deductions and withholdings.
	 
	 	(e)	 	Incentive Award Plan. The Executive will be granted an incentive
award of 87,500 Stock-settled Stock Appreciation Rights (SSARs) and 25,000 Restricted
Stock Units (RSUs) under the Company’s Incentive Award Plan. The awards will be
eligible for vesting over a four-year period, based upon the achievement of predefined
Company performance metrics, and shall be subject to such other terms and conditions as
are established by the Board.
	 
	 	(f)	 	Additional Compensation. The Company shall work with the Executive to
establish a compensation program that is meant to compensate him for some or all of the
pension benefits and other material compensation that the Executive forfeited as a
result of his terminating employment with his previous employer.




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	 	 	 	Such program and the amounts paid thereunder shall be subject to approval by the
Board and shall take into account the compensation and benefits provided in this
Agreement.
	 
	 	(g)	 	Benefits. During the Term, the Executive shall be entitled to
participate in employee benefit plans, programs and arrangements of the Company, as may
be amended from time to time, which are applicable to the senior officers of the
Company. During the Term, the Executive shall also be entitled to receive (i) annual
reimbursements for financial and tax planning, and (ii) reasonable temporary living
expenses and long-range commuting expenses as mutually agreed to by the Executive and
the Chief Executive Officer.
	 
	 	(h)	 	Vacation. During the Term, the Executive shall be entitled to
participate in the Company’s vacation policy as follows: (i) in calendar year 2007 the
Executive shall be entitled to four (4) weeks of paid vacation, and (ii) following
calendar year 2007, the Executive shall accrue at least four (4) weeks of paid vacation
each year. Any vacation shall be taken at the reasonable and mutual convenience of the
Company and the Executive.
	 
	 	(i)	 	Expenses. During the Term, the Company shall reimburse the Executive
for all reasonable travel and other business expenses incurred by him in the
performance of his duties to the Company in accordance with the Company’s expense
reimbursement policy.
	 
	 	(j)	 	Key Person Insurance. At any time during the Term, the Company shall
have the right to insure the life of the Executive for the Company’s sole benefit.
The Company shall have the right to determine the amount of insurance and the type of
policy. The Executive shall cooperate with the Company in obtaining such insurance by
submitting to physical examinations, by supplying all information reasonably required
by any insurance carrier, and by executing all necessary documents reasonably required
by any insurance carrier. The Executive shall incur no financial obligation by
executing any required document, and shall have no interest in any such policy.
	 
	 	(k)	 	Indemnification. The Executive shall be indemnified and held harmless
by the Company to the fullest extent authorized by the Company’s certificate of
incorporation or bylaws against all costs, expenses, liabilities and losses reasonably
incurred or suffered by the Executive as a result of actions taken by the Executive in
good faith and in his capacity as an officer of the Company.





3. Termination.




     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:




	 	(a)	 	Circumstances.




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	 	(i)	 	Death. The Executive’s employment hereunder shall terminate
upon his death.
	 
	 	(ii)	 	Disability. If the Executive has incurred a Disability, the
Company may give the Executive written notice of its intention to terminate the
Executive’s employment.
	 
	 	(iii)	 	Termination for Cause. The Company may terminate the
Executive’s employment for Cause.
	 
	 	(iv)	 	Termination without Cause. The Company may terminate the
Executive’s employment without Cause.
	 
	 	(v)	 	Resignation for Good Reason. The Executive may resign his
employment for Good Reason.
	 
	 	(vi)	 	Resignation without Good Reason. The Executive may resign
his employment without Good Reason.
	 
	 	(vii)	 	Non-extension of Term by the Company. The Company may give
notice of non-extension to the Executive pursuant to Section 1(b).

	 
	 	(viii)	 	Non-extension of Term by the Executive. The Executive may
give notice of non-extension to the Company pursuant to Section 1(b).






	 	(b)	 	Notice of Termination. Any termination of the Executive’s employment
by the Company or by the Executive under this Section 3 (other than termination
pursuant to paragraph (a)(i)) shall be communicated by a written notice to the other
party hereto 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 which, for terminations under paragraphs (a) (ii),
(iv) or (vi) shall be at least sixty (60) days following the date of such notice (a
“Notice of Termination”); provided, however, that the Company may, in its sole
discretion, advance the Date of Termination to any date following the Company’s receipt
of the Notice of Termination. A Notice of Termination submitted by the Company may
provide for a Date of Termination on the date the Executive receives the Notice of
Termination, or any date thereafter elected by the Company in its sole discretion. The
failure by the Executive or the Company to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Cause or Good Reason shall not
waive any right of the Executive or the Company hereunder or preclude the Executive or
the Company from asserting such fact or circumstance in enforcing the Executive’s or
the Company’s rights hereunder.
	 
	 	(c)	 	Company obligations upon termination. Upon termination of the
Executive’s employment, the Executive (or the Executive’s estate) shall be entitled to
receive the sum of the Executive’s Annual Base Salary through the Date of Termination




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	 	 	 	not theretofore paid, any expenses owed to the Executive under Section 2(i),
any accrued vacation pay owed to the Executive pursuant to Section 2(h), and
any amount accrued and arising from the Executive’s participation in, or benefits
accrued under any employee benefit plans, programs or arrangements under Section
2(g), which amounts, if any, shall be payable in accordance with the terms and
conditions of such employee benefit plans, programs or arrangements, and such other
or additional benefits as may be, or become, due to him under the applicable terms
of applicable plans, programs, agreements, corporate governance documents and other
arrangements of the Company and its subsidiaries (collectively, the “Company
Arrangements”). The Executive shall not be entitled to any other payments or
benefits, except as specifically provided in Section 4.





4. Severance Payments.





	 	(a)	 	Termination for Cause, resignation without Good Reason, upon Non-extension
of Term by the Company or the Executive, upon death or upon Disability. If the
Executive’s employment shall terminate pursuant to Section 3(a)(iii) for Cause, Section
3(a)(vi) for resignation without Good Reason, pursuant to Sections 3(a)(vii) or
3(a)(viii) due to Non-extension of the Term by the Company or the Executive, or as a
result of Executive’s death pursuant to Section 3(a)(i) or Disability pursuant to
Section 3(a)(ii), the Executive shall not be entitled to any additional severance
payment or benefits.
	 
	 	(b)	 	Termination without Cause or resignation for Good Reason. If the
Executive’s employment shall terminate without Cause pursuant to Section
3(a)(iv) or for Good Reason pursuant to Section 3(a)(v), the Company shall,
subject to the Executive signing and not revoking, within sixty (60) days following the
Date of Termination, a release of claims in substantially the form attached hereto as
Exhibit A:






	 	(i)	 	pay to the Executive, in equal installments over the twelve (12) month
period following the Date of Termination in accordance with the Company’s
regular payroll practice, an amount equal to the Annual Base Salary that the
Executive would have been entitled to receive if the Executive had continued
his employment hereunder for a period of twelve (12) months following the Date
of Termination; and
	 
	 	(ii)	 	cover the premium costs for medical, dental and vision benefit
coverage under COBRA for the Executive and, where applicable, Executive’s
spouse and dependents, for a period of twelve (12) months following the Date of
Termination under one of the Company’s group medical plans.






	 	(c)	 	Survival. The expiration or termination of the Term shall not impair
the rights or obligations of any party hereto, which shall have accrued prior to such
expiration or termination.




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	 	(d)	 	409A. Notwithstanding anything to the contrary in this Section
4, no payments in this Section 4 will be paid during the six-month period
following the Executive’s termination of employment unless the Company determines, in
its good faith judgment, that paying such amounts at the time or times indicated in
this Section would not cause the Executive to incur an additional tax under Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”) (in which
case such amounts shall be paid at the time or times indicated in this Section). If
the payment of any amounts are delayed as a result of the previous sentence, on the
first day following the end of the six-month period, the Company will pay the Executive
a lump-sum amount equal to the cumulative amount that would have otherwise been
previously paid to the Executive under this Agreement.




5. Unfair Competition. The Company agrees to provide Executive, upon commencement of
employment, with immediate access to Confidential Information as defined below, including
Confidential Information of third parties such as customers, suppliers, and business affiliates;
specialized training regarding the Company’s methodologies and business strategies; and/or support
in the development of goodwill such as introductions, information and reimbursement of customer
development expenses consistent with Company policy. The foregoing is not contingent on continued
employment, but upon Executive’s use of the access, specialized training, and goodwill support
provided by Company for the exclusive benefit of the Company and upon Executive’s full compliance
with the restrictions on Executive’s conduct provided for in this Agreement.




     Ancillary to the rights provided to Executive as set forth in this Agreement and any addenda
or amendments to this Agreement, the Company’s provision of Confidential Information, specialized
training, and/or goodwill support to Executive, and Executive’s agreements regarding the use of
same, and in order to protect the value of any equity-based compensation, training, goodwill
support and/or the Confidential Information described above, the Company and Executive agree to the
following provisions against unfair competition:




	 	(a)	 	The Executive recognizes and agrees that in order to assure that the Executive
devotes all of the Executive’s professional time and energy to the operations of the
Company while employed by the Company, and that during and after such employment in
order to adequately protect the Company’s investment in its proprietary information and
trade secrets (“Confidential Information”) and to protect such information and
secrets and all other confidential information from disclosures to competitors and to
protect the Company from unfair competition, separate covenants not to compete, not to
solicit, and not to recruit the Company’s employees for the duration and scope set
forth below, are necessary and desirable. The Executive understands and agrees that
the restrictions imposed in these covenants represent a fair balance of the Company’s
rights to protect its business and the Executive’s right to pursue employment.
	 
	 	(b)	 	The Executive shall not, at any time during the Term or during the 12-month
period following the Date of Termination (the “Non-Compete Period”), directly
or indirectly engage in, have any equity interest in, or manage or operate any person,
firm, corporation, partnership or business (whether as director, officer,




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	 	 	 	employee, agent, representative, partner, security holder, consultant or otherwise)
that engages in any business which competes with any Business (as defined below) of
the Company or its Affiliates anywhere in the world where the Company conducts
business or, on the Date of Termination, has plans to conduct business in the twelve
(12) month period following the Executive’s Date of Termination; provided,
however, that the Executive shall be permitted to acquire a passive stock
interest in such a business provided the stock acquired is publicly traded and is
not more than two percent (2%) of the outstanding interest in such business.
	 
	 	(c)	 	During the Non-Compete Period, the Executive shall not, directly or
indirectly, recruit or otherwise solicit or induce any employee, customer, subscriber
or supplier of the Company (i) to terminate its employment or arrangement with the
Company, (ii) to otherwise change its relationship with the Company or (iii) to
establish any relationship with the Executive or any of his affiliates for any business
purpose competitive with the Business of the Company.
	 
	 	(d)	 	In the event the terms of this Section 5 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 will be interpreted to extend only over the
maximum period of time for which it may be enforceable, over the maximum geographical
area as to which it may be enforceable, 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.
	 
	 	(e)	 	As used in this Section 5, (i) the term “Company” shall
include the Company and its direct or indirect parents, if any, and subsidiaries, and
(ii) the term “Business” shall mean the development, production, sale,
maintenance and support for aerostructures with respect to commercial, military and
business jet aircraft, including (but not limited to) fuselages, wings and wing
assemblies, empennages, aircraft doors, nacelle components and control surfaces, as
such business may be expanded or altered by the Company during the Term.
	 
	 	(f)	 	It is recognized and acknowledged by the Executive that a breach of the
covenants contained in this Section 5 may cause irreparable damage to 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 covenant
contained in this Section 5, in addition to any other remedy which may be
available at law or in equity, the Company will be entitled to seek specific
performance and injunctive relief.




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6. Intellectual Property and Confidential Information. The Executive agrees to enter into
the Company’s standard Intellectual Property Agreement (the “Intellectual Property
Agreement”) upon commencing employment hereunder. 



7. Cooperation. The Executive may respond to a lawful and valid subpoena or other legal
process regarding the Company 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 at Company’s
expense in resisting or otherwise responding to such process. As used in this Section 7, the term
“Company” shall include the Company and its direct or indirect parents, if any, and
subsidiaries. 



8. Assignment and Successors.



The Company may assign its rights and obligations under this Agreement to any successor to all
or substantially all of the business or the assets of the Company (by merger or otherwise and
including any Affiliates), and may assign or encumber this Agreement and its rights hereunder as
security for indebtedness of the Company and its Affiliates. 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. None of the Executive’s rights or obligations may be assigned or
transferred by the Executive, other than the Executive’s rights to payments hereunder, which may be
transferred only by will or operation of law. Notwithstanding the foregoing, the Executive shall
be entitled, to the extent permitted under applicable law and applicable Company Arrangements, to
select and change a beneficiary or beneficiaries to receive compensation hereunder following his
death by giving written notice thereof to the Company.



9. Certain Definitions.





	 	(a)	 	Affiliate. An “Affiliate” shall mean any entity which owns or
controls, is owned or controlled by, or is under common control with, the Company.
	 
	 	(b)	 	Cause. The Company shall have “Cause” to terminate the Executive’s
employment hereunder upon:






	 	(i)	 	The Board’s good faith determination that the Executive failed to
substantially perform his duties as an employee of the Company (other than any
such failure resulting from the Executive’s Disability) which failure has not
been cured within thirty (30) days after Executive’s receipt of notice thereof
from the Board;
	 
	 	(ii)	 	the Executive’s willful misconduct, gross negligence or a breach of
fiduciary duty that, in each case or in the aggregate, results in material harm
to the Company;
	 
	 	(iii)	 	willful and material breach of this Agreement or the bylaws of the
Company which has not been cured within thirty (30) days after Executive’s
receipt of notice thereof from the Board;




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	 	(iv)	 	the Executive’s having been the subject of any order, judicial or
administrative, obtained or issued by the Securities Exchange Commission, for
any securities violation involving fraud, including, for example, any such
order consented to by the Executive in which findings of facts or any legal
conclusions establishing liability are neither admitted nor denied;
	 
	 	(v)	 	the Executive’s conviction, plea of no contest, plea of nolo
contendere, or imposition of unadjudicated probation for any felony or crime
involving moral turpitude;
	 
	 	(vi)	 	the Executive’s unlawful use (including being under the influence) or
possession of illegal drugs on the Company’s premises or while performing the
Executive’s duties and responsibilities under this Agreement; or
	 
	 	(vii)	 	the Executive’s commission of an act of fraud, embezzlement, or
misappropriation, in each case, against the Company.






	 	(c)	 	Date of Termination. “Date of Termination” shall mean (i) if the
Executive’s employment is terminated by his death, the date of his death; (ii) if the
Executive’s employment is terminated pursuant to Section 3(a)(ii) – (vi) either
the date indicated in the Notice of Termination or the date specified by the Company
pursuant to Section 3(b), whichever is earlier; (iii) if the Executive’s
employment is terminated pursuant to Section 3(a)(vii) or Section
3(a)(viii), the expiration of the then-applicable Term.
	 
	 	(d)	 	Disability. “Disability” shall mean, at any time the Company or any
of its Affiliates sponsors a long-term disability plan for the Company’s employees,
“disability” as defined in such long-term disability plan for the purpose of
determining a participant’s eligibility for benefits; provided, however, if the
long-term disability plan contains multiple definitions of disability, “Disability”
shall refer to the definition of disability that, if the Executive qualified for such
disability benefits, would provide coverage for the longest period of time. The
determination of whether the Executive has a Disability shall be made by the person or
persons required to make disability determinations under the long-term disability plan.
At any time the Company does not sponsor a long-term disability plan for its
employees, Disability shall mean the Executive’s inability to perform, with or without
reasonable accommodation, the essential functions of his position hereunder for a total
of three months during any six-month period as a result of incapacity due to mental or
physical illness as determined by a physician selected by the Company or its insurers
and acceptable to the Executive or the Executive’s legal representative, such agreement
as to acceptability not to be unreasonably withheld or delayed. Any refusal by the
Executive to submit to a medical examination for the purpose of determining Disability
shall be deemed to constitute conclusive evidence of the Executive’s Disability.




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	 	(e)	 	Good Reason. The Executive shall have “Good Reason” to resign his
employment within ninety (90) days following the occurrence of any of the following
events:






     (A) a material diminution in the nature or scope of the Executive’s
responsibilities, authorities or duties or the assignment of duties and
responsibilities materially inconsistent with those normally associated with
Executive’s position;




     (B) a material reduction in the amount of the Executive’s Annual Base
Salary;




     (C) any material breach of this Agreement by the Company or any
Affiliate; or




     (D) any purported termination by the Company of Executive’s employment
other than as expressly provided under this Agreement.



          Notwithstanding the foregoing, the Executive may not resign his employment for Good Reason
unless (E) the Executive provided the Company with at least 30 days prior written notice of his
intent to resign for Good Reason (which 30 days shall not count against the 90-day period above);
and (F) the Company has not remedied the alleged violation(s) within the 30-day period (which 30
days shall not count against the 90-day period above).




10. Governing Law.




     This Agreement shall be governed, construed, interpreted and enforced in accordance with its
express terms, and otherwise in accordance with the substantive laws of the State of Texas, without
reference to the principles of its conflicts of law, and where applicable, the laws of the United
States.



11. 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.



12. Notices.




     Any notice, request, claim, demand, document and 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 facsimile or certified or registered mail, postage prepaid, as follows:



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	 	(a)	 	If to the Company:
	 
	 	 	 	Vought Aircraft Industries, Inc.

9314 West Jefferson Blvd.

Dallas, TX 75211

Attn: Kevin P. McGlinchey, General Counsel

Facsimile: (972) 946-5642
	 
	 	 	 	and a copy to:
	 
	 	 	 	Latham & Watkins LLP

555 Eleventh Street, N.W.

10th Floor

Washington, DC 20004

Fax: (202) 637-2201

Attn: Paul F. Sheridan, Esq.

	 
	 	(b)	 	If to the Executive:
	 
	 	 	 	Keith Howe

1940 Fulham St. Unit #301

Roseville, MN 55113





     or at any other address as any party shall have specified by notice in writing to the other
party.



13. Counterparts.




     This Agreement may be executed in several counterparts, each of which shall be deemed to be an
original, but all of which together will constitute one and the same Agreement. Signatures
delivered by facsimile shall be deemed effective for all purposes.



14. Entire Agreement.




     The terms of this Agreement, including the terms of the Intellectual Property Agreement, 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 supersede all prior understandings and agreements,
whether written or oral. The parties further intend that this Agreement shall constitute the
complete and exclusive statement of their 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.



15. Amendments; Waivers.




     This Agreement may not be modified, amended, or terminated except by an instrument in writing,
signed by the Executive and a duly authorized officer of Company. By an instrument in writing
similarly executed, the Executive or a duly authorized officer of the Company may waive compliance
by the other party or parties with any specifically identified provision of this



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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 preclude any other or further exercise of any other right, remedy, or power
provided herein or by law or in equity. Except as otherwise set forth in this Agreement, the
respective rights and obligations of the parties under this Agreement shall survive any termination
of Executive’s employment. In addition, Sections 2(k), 4, and 6 through 22 shall survive beyond
the end of the Term in accordance with their terms.




16. 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 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.



17. Construction.




     This Agreement shall be deemed drafted equally by both the parties. Its language shall be
construed as a whole and according to its fair meaning. Any presumption or principle that the
language is to be construed against any party shall not apply. The headings in this Agreement are
only for convenience and are not intended to affect construction or interpretation. Any references
to paragraphs, subparagraphs, sections or subsections are to those parts of this Agreement, unless
the context clearly indicates to the contrary. Also, unless the context clearly indicates to the
contrary, (a) the plural includes the singular and the singular includes the plural; (b) “and” and
“or” are each used both conjunctively and disjunctively; (c) “any,” “all,” “each,” or “every” means
“any and all,” and “each and every”; (d) “includes” and “including” are each “without limitation”;
(e) “herein,” “hereof,” “hereunder” and other similar compounds of the word “here” refer to the
entire Agreement and not to any particular paragraph, subparagraph, section or subsection; and (f)
all pronouns and any variations thereof shall be deemed to refer to the masculine, feminine,
neuter, singular or plural as the identity of the entities or persons referred to may require.



18. Arbitration.




     Any dispute or controversy arising under or in connection with this Agreement, other than
disputes or controversies arising under or in connection with the provisions of Section 5
or the provisions in the Intellectual Property Agreement, shall be settled exclusively by
arbitration, conducted before an arbitrator in Dallas, Texas in accordance with the National Rules
for the Resolution of Employment Disputes of the American Arbitration Association then in effect.
Judgment may be entered on the arbitration award in any court having jurisdiction. Only
individuals who are on the AAA register of arbitrators shall be selected as an arbitrator. Within
20 days of the conclusion of the arbitration hearing, the arbitrator(s) shall prepare written
findings of fact and conclusions of law. It is mutually agreed that the written decision of the
arbitrator(s) shall be valid, binding, final and non-appealable, provided however, that the parties
hereto agree that the arbitrator shall not be empowered to award punitive damages against any party
to such arbitration. Each party shall pay its own attorney’s fees and expenses.



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19. Enforcement.




     If any provision of this Agreement is held to be illegal, invalid or unenforceable under
present or future laws effective during the term of this Agreement, such provision shall be fully
severable; this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a portion of this Agreement; and the remaining
provisions of this Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore,
in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as
part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.



20. Withholding.




     The Company shall be entitled to withhold from any amounts payable under this Agreement any
federal, state, local or foreign withholding or other taxes or charges which the Company is
required to withhold. The Company shall be entitled to rely on an opinion of counsel if any
questions as to the amount or requirement of withholding shall arise.



     21. Section 409A. To the extent that the Company reasonably determines that any
compensation or benefits payable under this Agreement are subject to Section 409A of the Code, this
Agreement shall incorporate the terms and conditions required by Section 409A of the Code and
Department of Treasury regulations as reasonably determined by the Company and the Executive. To
the extent applicable, this Agreement shall be interpreted in accordance with Section 409A of the
Code and Department of Treasury regulations and other interpretative guidance issued thereunder,
including without limitation any such regulations or other such guidance that may be issued after
the Effective Date. Notwithstanding any provision of this Agreement to the contrary, in the event
that following the Effective Date the Company reasonably determines that any compensation or
benefits payable under this Agreement may be subject to Section 409A of the Code and related
Department of Treasury guidance (including such Department of Treasury guidance as may be issued
after the Effective Date), the Company and the Executive shall work together to adopt such
amendments to this Agreement or adopt other policies or procedures (including amendments, policies
and procedures with retroactive effective), or take any other commercially reasonable actions
necessary or appropriate to (a) exempt the compensation and benefits payable under this Agreement
from Section 409A of the Code and/or preserve the intended tax treatment of the compensation and
benefits provided with respect to this Agreement, or (b) comply with the requirements of Section
409A of the Code and related Department of Treasury guidance.



22. Employee Acknowledgement.




     The Executive acknowledges that he has read and understands this Agreement, is fully aware of
its legal effect, has not acted in reliance upon any representations or promises made by the
Company other than those contained in writing herein, and has entered into this Agreement freely
based on his own judgment.



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



	 	 	 	 	 
	 	VOUGHT AIRCRAFT INDUSTRIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Elmer Doty 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 
	 	EXECUTIVE

 	 
	 	By:  	 	 
	 	 	Name:  	Keith Howe 	 
	 	 	 	 
	 




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