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                                                                    EXHIBIT 10.4

                              EMPLOYMENT AGREEMENT
                              --------------------

THIS AGREEMENT, dated as of May 19, 1999 and effective as of December 3, 1998,
as described herein, is made by and between TransDigm Holding Company, a
Delaware corporation (the "Company"), and Douglas W. Peacock (the "Executive").

                                   RECITALS:

WHEREAS, the Executive has heretofore been employed by the Company as Chairman
of the Board and Chief Executive Officer; and

WHEREAS, in connection with a contemplated merger and recapitalization of the
Company, it is the desire of the Company to assure itself of the continuity of
the management services of the Executive following the consummation of such
transactions; and

WHEREAS, the Company and the Executive intend this Agreement to be effective as
of the consummation of the aforementioned contemplated merger and
recapitalization, which occurred on December 3,1998 (the "Effective Date");

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)   "BOARD" shall mean the Board of Directors of the Company.

      (c)   "CAUSE" shall mean either of the following: (i) the continued
            failure by the Executive, after written notice from the Board,
            substantially to perform his 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), or (ii)
            the engagement by the Executive in serious misconduct which is
            material to the performance by the Executive of his duties and
            obligations for 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,

      (d)   "CHANGE IN CONTROL" shall mean a change in ownership or control of
            the Company 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) whereby any "person" or related "group" of
            "persons" (as such terms are used in Sections 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, a Principal Stockholder or a "person" that, prior to
            such transaction, directly or indirectly controls, is controlled by,
            or is under common control with, the Company or a Principal
            Stockholder) 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.

      (e)   "COMMON STOCK" shall mean the common stock of the Company, $0.01 par
            value per share.

      (f)   "COMPANY" shall have the meaning set forth in the preamble hereto.

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      (g)   "COMPENSATION COMMITTEE" shall mean the Compensation Committee of
            the Board whose members shall be appointed by the Board from time to
            time and shall initially include Stephen Berger, as Chairman,
            Muzzafar Mirza and William Hopkins.

      (h)   "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) - (viii), the date specified in the Notice of
            Termination; PROVIDED, HOWEVER, that as set forth in Section
            4(l)(i), for purposes of the Management Stockholders' Agreement, the
            Executive shall not be deemed to have incurred a termination of
            employment upon the commencement of or during the Non-Executive
            Term.

      (i)   "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.

      (j)   "EBITDA" with respect to any period of determination shall mean the
            sum of the following (without duplication): (i) consolidated net
            income (or loss) of the Company and, if applicable, its subsidiaries
            for such period (exclusive of the effect of extraordinary items and
            non-cash gains and losses), as determined by the Company's
            independent certified public accountants in accordance with
            generally accepted accounting principles consistently applied, as
            such principles are in effect at the date hereof, plus (ii) amounts
            deducted from net revenues in determining such net income (or loss)
            on account of (w) depreciation and amortization, (x) interest
            expense (net of interest income), (y) all taxes on income and (z)
            any management or acquisition fee charged to the Company by the
            Principal Stockholder.


      (k)   "EFFECTIVE DATE" shall have the meaning set forth in the recitals
            hereto.

      (l)   "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
            amended.

      (m)   "EXECUTIVE" shall have the meaning set forth in the preamble hereto.

      (n)   "EXERCISABLE OPTIONS" as of any date of determination, shall mean
            those Options (or portions thereof) held by the Executive that are
            then exercisable Options.

      (o)   "FAIR MARKET VALUE" shall have the meaning ascribed to such term
            under the Management Stockholders' Agreement.

      (p)   "GOOD REASON" shall mean the occurrence of any of the following: (i)
            a material diminution in the Executive's title, duties or
            responsibilities, without his prior written consent, (ii) a
            reduction of the Executive's aggregate cash compensation (including
            bonus opportunities), benefits or perquisites, without his prior
            written consent, (iii) the occurrence of a Change in Control or (iv)
            W. Nicholas Howley's termination of employment with the Company for
            "Good Reason" as defined in subsections (i), (ii) and (iii) of this
            subsection.

      (q)   "MANAGEMENT STOCKHOLDERS' AGREEMENT" shall mean that certain
            Management Stockholders' Agreement dated as of December 3, 1998
            among the Company, Odyssey Investment Partners Fund, LP, the
            Executive and the other stockholders party thereto, as amended from
            time to time.

      (r)   "NOTICE OF TERMINATION" shall have the meaning set forth in Section
            5(b).

      (s)   "NON-EXECUTIVE TERM" shall have the meaning set forth in Section
            3(b).


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      (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 and agreements governing the terms of "Roll-Over Options" (as
            defined in the Management Stockholders' Agreement).

      (u)   "Option Plan" shall mean the 1998 Stock Option Plan of TransDigm
            Holding Company, as amended from time to time.

      (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)   "Principal Stockholder" shall mean Odyssey Investment Partners Fund,
            LP and any of its Permitted Assignees (as such term is defined in
            the Management Stockholders' Agreement).

      (y)   "Retirement" shall mean the termination of the Executive's services
            with the Company as a result of his retirement from active service
            as the Chief Executive Officer of the Company upon or after the
            third anniversary of the Effective Date; provided, however, that as
            set forth in Section 4(l)(i), for purposes of the Management
            Stockholders' Agreement, the Executive shall not be deemed to have
            incurred a "Retirement" upon the commencement of or during the
            Non-Executive Term, if any, but on his termination of service as
            Chairman of the Board on or after attaining age 65.

      (z)   "Term" shall have the meaning set forth in Section 2(a).

2.       EMPLOYMENT.

      (a)   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 the fifth anniversary
            thereof unless earlier terminated as provided in Section 5;
            provided, however, that unless so earlier terminated or unless the
            Executive or the Company shall give written notice to the other of
            his or its intention not to renew this Agreement no less than sixty
            days prior to the scheduled expiration thereof, upon the fifth
            anniversary of the Effective Date, this Agreement shall
            automatically be renewed for an additional two year period.

      (b)   On or after the third anniversary of the Effective Date, the
            Executive may elect to resign as the Chief Executive Officer of the
            Company but continue to provide services to the Company as a
            non-executive Chairman, in which case the Executive shall be
            entitled to compensation for his services commensurate with his
            duties and responsibilities to the Company, as mutually agreed to by
            the Company and the Executive at such time.




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3.    POSITION AND DUTIES.

      (a)   During the Term, the Executive shall serve as the Chairman of the
            Board and Chief Executive Officer of each of the Company and its
            subsidiary, TransDigm Inc. ("TransDigm") with such customary
            responsibilities, duties and authority as may from time to time be
            assigned to the Executive by the Board. During the period of the
            Executive's active employment as Chief Executive Officer, the
            Executive shall devote substantially all his working time and
            efforts to the business and affairs of the Company and TransDigm;
            PROVIDED, that it shall not be considered a violation of the
            foregoing for the Executive to (i) continue to serve as a member of
            the Board of Directors of Microporous, LLP, (ii) with the prior
            consent of the Board (which consent shall not unreasonably be
            withheld), serve on corporate, industry, civic or charitable boards
            or committees, and (iii) manage his personal investments, so long as
            none of such activities significantly interferes with the
            Executive's duties hereunder.

      (b)   The Executive shall continue to serve as the Chairman of the Board
            during the Term, and thereafter, during the period commencing on the
            date the Executive elects to serve as the non-executive Chairman of
            the Board pursuant to Sections 2(b) and 5(a)(vii) and ending on the
            earliest of (i) the date the Executive resigns from such position,
            (ii) the date the Executive dies and (iii) the date the Executive is
            removed from the Board for Cause (the "Non-Executive Term"). During
            the Term and any such Non-Executive Term, the Board shall propose
            the Executive for re-election to the Board and the Principal
            Stockholders shall vote all of their shares of Common Stock in favor
            of such re-election. If elected or appointed thereto, and only for
            the duration of such elected term or appointment, the Executive
            shall also serve as a director of any of the Company's subsidiaries
            and/or in one or more executive offices of any entities owned by the
            Company.

4.    COMPENSATION AND RELATED MATTERS.

      (a)   ANNUAL BASE SALARY. During the Term, the Executive shall receive a
            base salary at a rate that is no less than $330,000 per annum (the
            "Annual Base Salary"), 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 terms and provisions which shall be consistent with
            the Company's executive bonus policy in effect as of the Effective
            Date.

      (c)   NON-QUALIFIED DEFERRED COMPENSATION. During the Term, the Executive
            shall be eligible to continue to participate in the Company's
            Non-Qualified Deferred Compensation Plan and Rabbi Trust in a manner
            that is consistent with that in effect as of the Effective Date. The
            Company shall continue to fund the Rabbi Trust throughout the Term
            in a manner consistent with its funding practices in effect as of
            the Effective Date.

      (d)   LONG TERM INCENTIVE COMPENSATION. During the Term, the Executive
            shall be entitled to participate in the Option Plan or any successor
            plan thereto.

      (e)   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; provided, however, that such plans, programs
            and arrangements shall be consistent in all material respects with
            those in effect as of the Effective Date.

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      (f)   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.

      (g)   VACATION. The Executive shall be entitled to an amount of annual
            vacation days, 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.

      (h)   AUTOMOBILE. During the Term, the Company shall provide the Executive
            with an annual automobile allowance at a rate not less than that in
            effect as of the Effective Date.

      (i)   CLUB MEMBERSHIP. During the Term, the Company shall pay on behalf of
            the Executive, or reimburse the Executive for, annual membership
            fees payable in connection with the Executive's membership in one
            country club of the Executive's choice.

      (j)   TAX AND FINANCIAL PLANNING ASSISTANCE. During the Term, the Company
            shall, upon submission of proper documentation, pay on behalf of the
            Executive, or reimburse the Executive for, reasonable expenses
            incurred for professional assistance in planning and preparing his
            tax returns and managing his financial affairs, provided that such
            expenses do not exceed $25,000 per annum.

      (k)   LOAN TO PURCHASE SHARES OF COMMON STOCK. In the event that during
            the Term or the Non-Executive Term, the Executive elects to
            purchase shares of Common Stock pursuant to Section 5.2 of the
            Management Stockholders' Agreement, the Company shall, or shall
            cause one of its affiliates to, lend to the Executive up to $1.5
            million in the aggregate (or such greater amount as determined by
            the Compensation Committee in its discretion) as payment for such
            shares pursuant to the terms of a recourse promissory note or notes
            bearing interest of the lowest rate specified pursuant to Section
            1274 of the Internal Revenue Code so as to avoid imputed interest,
            and security agreement(s) under which the Executive shall pledge
            such shares to the Company (or affiliate thereof, as applicable) as
            security for repayment of such loan(s). Any interest due on such
            loan shall be converted into principal and shall not be payable
            currently as it is accrued, but rather shall be payable when the
            underlying shares are sold. Any such note and security agreement
            shall have terms consistent with the forgoing and shall be in a form
            acceptable to the Company's (or its affiliate's) lenders under the
            terms of the Financing Documents (as such term is defined in the
            Management Stockholders' Agreement).

      (l)   RIGHT OF THE EXECUTIVE TO SELL COMMON STOCK TO HOLDINGS.

            (i)   For purposes of the Management Stockholders' Agreement, (A) if
                  the Executive elects to resign as Chief Executive Officer but
                  continues to provide services to the Company as non-executive
                  Chairman pursuant to Sections 2(b) and 5(b)(vii) of this
                  Agreement at any time, such resignation shall not constitute a
                  resignation, "Retirement" or other termination of employment
                  thereunder, and (B) the date on which the Executive ceases to
                  serve as non-executive Chairman shall be deemed to be the date
                  of his termination of employment for purposes of the
                  Management Stockholders' Agreement and the reason for his
                  termination of such service (I.E., death, Disability, for
                  Cause, Retirement) shall be deemed to be the reason for his
                  termination of employment for purposes of the Management
                  Stockholders' Agreement.

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            (ii)  Subject to Section 7 of the Management Stockholders'
                  Agreement, during the Non-Executive Term, if any, and during
                  the period, if any, during which the Executive continues
                  active service as Chief Executive Officer after the third
                  anniversary of the Effective Date (each, the "Put Period"),
                  the Executive shall have the right to sell to Holdings, and
                  Holdings shall have the obligation to purchase from the
                  Executive, at their Fair Market Value, that number of shares
                  of Common Stock not to exceed in the aggregate 80% of the sum
                  of(A) the number of shares of Common Stock held by the
                  Executive at the commencement of the Non-Executive Term or at
                  the third anniversary of the Effective Date, as applicable,
                  and (B) the number of shares of Common Stock that could be
                  acquired by the Executive at the commencement of the
                  Non-Executive Term (or third anniversary of the Effective
                  Date, as applicable) upon the exercise of Options that at such
                  time are Exercisable Options (the "Aggregate Stock"), in
                  accordance with the provisions of this Section 4(l)(ii) (the
                  "Additional Put"). The Executive shall have the right to
                  exercise the Additional Put at any time during the Put Period
                  as of which (1) EBITDA for the fiscal year ending September
                  30, 2001 or for any four consecutive fiscal quarters
                  thereafter equals or exceeds $65 million, AND (2) the
                  Executive is then serving as either Chairman and Chief
                  Executive Officer or non-executive Chairman; PROVIDED,
                  HOWEVER, that (x) the Executive may not exercise the
                  Additional Put within six months following a prior exercise of
                  the Additional Put; (y) the Additional Put may not be
                  exercised for less than 10% of the Aggregate Stock and (z) the
                  Additional Put may only be exercised with respect to shares
                  which the Executive has held for at least six months. If the
                  Executive desires to exercise the Additional Put pursuant to
                  this Section 4(l)(ii), he shall notify the Company in writing,
                  specifying the number of shares to be sold pursuant to the
                  exercise of the Additional Put hereunder. Subject to Section 7
                  of the Management Stockholders' Agreement, payment for shares
                  of Common Stock sold by the Executive pursuant to this Section
                  4(l)(ii) shall be made on or prior to the date 60 days (or the
                  first business day thereafter if the 60th day is not a
                  business day) following the date of the receipt by the Company
                  of the Executive's notice described herein; PROVIDED, HOWEVER,
                  that if such payment is being made on or after the first day
                  of the seventh month of any fiscal year, then such payment
                  shall be made on or prior to the date that is 60 days (or the
                  first business day thereafter if the 60th day is not a
                  business day) following the date of the determination of Fair
                  Market Value in a manner consistent with the provisions of
                  Section 6.2(c) of the Management Stockholders' Agreement.

            (iii) If the Executive holds Exercisable Options as of the date he
                  notifies the Company of the exercise of the Additional Put
                  pursuant to Section 4(l)(ii) and together with such notice,
                  notifies the Company that he desires to exercise a specified
                  portion of such Exercisable Options (the "Specified Options"),
                  the Company shall, or shall cause an affiliate of the Company
                  to, lend to the Executive within 30 days after Holdings'
                  receipt of such notice from the Executive an amount equal to
                  the aggregate exercise price payable with respect to the
                  Specified Options and the aggregate federal, state and local
                  income tax liability, including any alternative minimum tax
                  obligations, that will actually be incurred by the Executive
                  as a result of his exercise of the Specified Options in
                  accordance with such notice. Any such loan pursuant to this
                  Section 4(l)(iii) shall be pursuant to the terms of a recourse
                  promissory note or notes which (i) shall be payable in full no
                  later than the date on which the Executive receives payment
                  from the Company for the repurchase of the shares acquired
                  upon exercise of the Specified Options, (ii) shall bear
                  interest at the applicable federal mid-term rate determined
                  pursuant to Section 1274(d) of the Internal Revenue Code of
                  1986, as amended, (iii) shall provide that any interest due on
                  such loan shall be converted into principal and shall not be
                  payable currently as it is accrued, but rather shall be
                  payable when the underlying shares are repurchased by the
                  Company and (iv) shall be in a form acceptable to the
                  Company's (or its affiliate's) lenders under the terms of the
                  Financing Documents. The parties hereto agree that to the
                  extent any of the foregoing provisions of this Section
                  4(l)(iii) result in adverse accounting consequences to the
                  Company, such provisions shall be modified in a manner
                  mutually acceptable to the parties hereto.


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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 writen 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 terminate 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.

          (vii)   ELECTION TO CONTINUE AS NON-EXECUTIVE CHAIRMAN. The Executive
                  may elect at any time on or after the third anniversary of the
                  Effective Date to resign as Chief Executive Officer but to
                  continue to provide services to the Company as non-executive
                  Chairman of the Board.

         (viii)   RETIREMENT. The Executive may elect to terminate his
                  employment hereunder upon his Retirement as defined in Section
                  1(y).

      (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 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"). 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.


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      (b)   TERMINATION WITHOUT CAUSE, RESIGNATION FOR GOOD REASON OR
            TERMINATION BY REASON OF DEATH OR DISABILITY. 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), and:

            (i)   pay to the Executive, in accordance with its regular payroll
                  practice, an amount equal to the Annual Base Salary and annual
                  bonus provided herein that the Executive would have been
                  entitled to receive had he continued his employment hereunder
                  for the period (the "Payment Period") beginning on the Date of
                  Termination and ending on the date that is eighteen months
                  thereafter; provided, however, that in the event of the
                  Executive's Termination of Employment under this Section 6(b)
                  prior to the third anniversary of the date hereof, the
                  "Payment Period" shall end on the later of the third
                  anniversary of the Effective Date or the date that is eighteen
                  months after the Date of Termination;

            (ii)  pay or provide to the Executive for the Payment Period the
                  perquisites to which the Executive is entitled under Sections
                  4(h), 4(i) and 4(j); and

            (iii) continue for the Payment Period the Executive's and his then
                  eligible dependents' coverage under the Company's medical
                  benefit plans.

      (c)   CONTINUED MEDICAL COVERAGE. In the event the Executive's employment
            with the Company is terminated at any time by reason of his death or
            Disability, or on or after the third anniversary of the Effective
            Date for any reason other than for Cause pursuant to Section
            5(a)(iii), in addition to the amounts described in subsection (a)
            and/or subsection (b) that may be payable to the Executive in
            accordance with the terms thereof, the Company shall continue to
            provide medical benefit coverage for the Executive and his spouse
            for their respective lives, on terms substantially consistent with
            those in effect as of the Date of Termination.

7.    OTHER TERMINATION PROVISIONS.

      Notwithstanding any provision of this Agreement or the Management
      Stockholders' Agreement to the contrary, in the event that as a
      consequence of a termination of the Executive's employment for any reason,
      the Executive is compelled to exercise any Options in order to prevent
      such Options from expiring in accordance with their terms and the Company
      is unable to repurchase the Executive's stock at such time, the Company
      shall either (i) provide the Executive with an interest-free recourse loan
      equal to the actual aggregate federal, state and local income tax
      liability (including alternative minimum tax obligations) incurred as a
      consequence of the Option exercise, which loan shall (A) be secured by a
      pledge of the shares acquired upon exercise of such Options, (B) be
      payable in full, with respect to each Option (or portion) so exercised,
      upon the earliest of (I) the tenth anniversary of the date of grant of
      such Option, (II) five days after the date in which the Executive sells,
      transfers or otherwise disposes or conveys for consideration the shares
      acquired upon exercise of such Option, and (iii) the date specified in
      Section 10 of the Management Stockholders' Agreement for the expiration of
      certain provisions thereof, (ii) permit the Executive to extend the
      post-termination exercise period of such Options (but not beyond the tenth
      anniversary of the date of Option grant) until the time that the Company
      is able to repurchase the underlying shares of Common Stock, or (iii)
      devise such other method that is acceptable to the Executive so as to
      prevent the Executive from incurring tax liability upon Option exercise at
      a time when he is not able to receive payment from the Company (or a third
      party) for the shares acquired upon such exercise.



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8.       COMPETITION.

      (a)   The Executive shall not, at any time during the Term and during the
            Non-Executive Term and prior to the last day of the Payment Period,
            if any, 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.


      (b)   In the event the agreement in this Section 8 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.

9.    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, including, without
            limitation, information with respect to the Company's 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 9, 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
            any successor or assignee of the Company). Notwithstanding any of
            the foregoing to the contrary, the parties hereto hereby expressly
            acknowledge that the Executive may, from time to time, deliver
            lectures and/or teach courses on entrepreneurial business at
            educational institutions and that the principles to be discussed in
            the course of conducting such activities shall not constitute a
            breach of this covenant.

      (b)   Upon termination of the Executive's employment with the Company for
            any reason, the Executive shall 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 customers, business plans,
            marketing strategies, products or processes and/or which contain
            proprietary information or trade secrets.

      (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.

                                       ix
<PAGE>   10

10.   INJUNCTIVE RELIEF.

      It is recognized and acknowledged by the Executive that a breach of the
      covenants contained in Sections 8 and 9 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 8 and 9,
      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.

11.   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.

12.   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.

13.   GOVERNING LAW.

      This Agreement shall be governed, construed, interpreted and enforced in
      accordance with the substantive laws of the State of New York.

14.   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.

15.   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 Holding Company
           26380 Curtiss Wright Parkway
           Richmond Heights, Ohio 44143
           Attention:     Corporate Secretary

           with copies to:

           Odyssey Investment Partners Fund, LP
           280 Park Avenue
           West Tower, 38th Floor
           New York, New York 10017
           Attention:     William Hopkins

           and

           Latham & Watkins
           885 Third Avenue
           New York, New York 10022
           Attention:    Maureen A. Riley, Esq.

                                       x
<PAGE>   11

      (b)   If to the Executive, to him at the address set forth below under his
            signature, with a copy to:

            Shearman & Sterling
            599 Lexington Avenue
            New York, New York 10022
            Attention:     Doreen E. Lilienfeld, Esq.

      or at any other address as any party shall have specified by notice
      in writing to the other parry in accordance with this Section 15.

16. 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.

17.   ENTIRE AGREEMENT.

      The terms of this Agreement, together with the Management Stockholders'
      Agreement, 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. 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. Notwithstanding any of the foregoing to the contrary, in
      the event of a conflict between the terms of this Agreement and the
      Management Stockholders' Agreement, the terms of this Agreement shall
      govern.

18.   AMENDMENTS; WAIVERS.

      This Agreement may not be modified, amended, or terminated except by an
      instrument in writing, signed by the Executive and the Chairman of 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.

19.   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.

20.   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 New York, New York, 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 8
      or 9 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.



                                       xi

<PAGE>   12




21.   INDEMNIFICATION AND INSURANCE; LEGAL EXPENSES.


      (a)   During the Term and so long as the Executive has not breached any of
            his obligations set forth in Sections 8 and 9, 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 for the benefit of the
            Executive (in his capacity as an officer and director of the
            Company) Directors and Officers Insurance providing customary
            benefits to the Executive.

      (b)   The Company shall pay the Executive's reasonable fees and costs
            incurred in connection with the preparation and negotiation of this
            Agreement, the Option Plan, the Option Agreement that pertains to
            Options granted under the Option Plan and the Management
            Stockholders' Agreement.

[signature page follows]


                                      xii
<PAGE>   13

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

TRANSDIGM HOLDING COMPANY

By:
   ------------------------------------------
   Stephen Berger:
   Title: Chairman of the Compensation Committee

EXECUTIVE

------------------------------------------------
Douglas W. Peacock

------------------------------------------------
------------------------------------------------
------------------------------------------------
Address


Accepted and agreed to for purposes of Section 3(b)

ODYSSEY INVESTMENT PARTNERS FUND, LP


By:      ODYSSEY CAPITAL PARTNERS, LLC,
         its general partner


By:
  ------------------------------------------------
Name:
Title:


                                      xiii