**Exhibit 10.1****SEPARATION AGREEMENT**     This Agreement is entered into by and between **Erich G. Smith**(“Executive”), a resident of thestate of Texas, and Vought Aircraft Industries, Inc., a Delaware corporation with its principalplace of business in Dallas, Texas (“Vought” or the “Company”).     Executive and Vought (“the parties”) have agreed that Executive’s employment with the Companywill conclude as provided in this Agreement. In connection with this separation from employment andsubject to this Agreement, Vought has agreed to provide Executive with certain payments and otherbenefits to which Executive would not be entitled absent his execution of this Agreement. Further,Executive and Vought desire to settle any and all disputes between the parties arising out of theemployment relationship or separation from employment.     Therefore, in consideration of the covenants and agreements set forth in this Agreement,Executive and Vought agree as follows:     1. Executive agrees that he will separate from employment with Vought effective **May 31, 2006**(“**Separation Date**”).     2. *Compensation:*In connection with the Executive’s separation from Vought, and in lieuof other benefits that might be provided under any other layoff or severance policy, plan oragreement, Vought will provide Executive the following payments and benefits in exchange for hisfulfillment of the terms and obligations in this Agreement:a. *Separation Pay:*Within thirty (30) days after the **Effective Date**of this Agreement(as defined in Paragraph 11), Vought will pay to Executive a one-time lump sum equal tofifty-two (52) times Executive’s current weekly, regular base salary. This payment will bemade only on the conditions that Executive has signed this Agreement, has not exercised hisright to revoke this Agreement (as described more fully in Paragraph 10), and has fulfilledthe other obligations set forth in this Agreement. This payment will not be consideredeligible compensation for purposes of the Vought Retirement Plan or the Savings andInvestment Plan.b. *Accrued Vacation.*Within ten (10) days after the **Separation Date**, Executive willreceive payment for all accrued but unused vacation, if any.c. *Employee Benefits:*Except as otherwise specified in this Agreement or under terms ofthe applicable employee benefit plans, all of Executive’s privileges, perquisites andbenefits as a Vought employee will end as of the close of business on the **Separation Date**.Neither Executive nor his dependents will be eligible for coverage under the Company’semployee health and welfare benefit plan or any supplemental health care benefits planafter midnight Central Time on the **Separation Date**.
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     Executive may elect to continue existing group medical and dental benefits coveragefor himself and his eligible dependents under COBRA at regular COBRA rates. The Companywill pay Executive a one-time lump sum equal to the amount of his regular COBRAcontinuation coverage costs for twelve months, less the amount of his applicable weeklycontributions for such coverage, as calculated on the **Separation Date**. If Executive is notcovered by medical and dental benefits as of the **Separation Date**, Executive is not eligibleto receive this payment.     Executive is responsible for paying the applicable cost of any COBRA coverage, alongwith any administrative fees (with after-tax dollars). If rates for active employeesincrease during the COBRA continuation period, Executive’s costs will also increase.Likewise, the coverage offered is the same as is offered to similarly-situated activeemployees, including any amendments to or terminations of the group medical and dentalplans occurring after the **Separation Date**.d. *Outplacement Assistance*: Outplacement services will be provided to Executive by theCompany’s designated outplacement service provider through **March 15, 2007**. All serviceswill be subject to then-applicable contract terms between the Company and the provider.e. *Withholdings:*Vought will withhold all required payroll deductions, including anyapplicable taxes, from the above payments.     3. *Inclusive of Income and All Other Benefits:*Except as provided in Paragraph 2 above,Executive acknowledges and agrees that that this Agreement provides for compensation over and aboveanything to which he would have otherwise been entitled and that he has no further claim to anycompensation, severance pay or other benefits from Vought under any plan, policy, practice oragreement.     4. *Equity Plans:*The terms of Executive’s Stock Option Agreements, if any, shall govern theexercisability and timing of exercising of his stock options. In accordance with those agreements,all non-vested stock options shall be forfeited, and no further vesting shall occur, following the**Separation Date**. Executive may continue to hold shares of stock purchased before the **SeparationDate**, under the terms and conditions set forth in the applicable Shareholders’ Agreement.     5. *Confidential Information:*Executive acknowledges and agrees that in the course of hisemployment with Vought, he has had access to Confidential Information relating to the businessaffairs of Vought and its suppliers and customers. “Confidential Information” means the Company’sconfidential and/or proprietary information and/or trade secrets that cannot be obtained readily bythird parties from outside sources. Confidential Information includes, by way of example only, thefollowing information regarding customers, employees, suppliers, and the industry not generallyknown to the
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public: technical information concerning products, equipment, services, and processes;procurement procedures and pricing techniques; the names of and other information concerningcustomers, investors, and business affiliates and the Company’s relationship with them; pricingstrategies; positions, plans, and strategies for expansion or acquisitions; budgets; research;financial and sales data; evaluations, opinions, and interpretations of information and data;prospective customers’ names and marks; electronic databases; models; specifications; computerprograms; internal business records; contracts benefiting or obligating the Company; bids orproposals submitted to any third party; technologies and methods; and other such information.Executive agrees that he will continue to maintain the complete confidentiality of thisConfidential Information and will otherwise comply with all applicable fiduciary duties owed to theCompany in connection with Executive’s position as an officer of the Company. Executive agrees thatat no time after he signs this Agreement will he disclose, use, or otherwise make available to anyperson, company and/or other entity, Vought’s Confidential Information.     a. **Unfair Competition Restrictions**. Ancillary to the rights provided to Executive followingemployment termination as set forth in this Agreement and any addenda or amendments to thisAgreement, the Company’s provision of Confidential Information, specialized training, and goodwillsupport to Executive, and Executive’s agreements regarding the use of same, and in order to protectthe value of any equity-based compensation, training, goodwill support and/or the ConfidentialInformation described above, the Company and Executive agree to the following provisions againstunfair competition:     i. Executive agrees that for a period of twelve (12) months following the **SeparationDate**(“Restricted Term”), Executive will not, directly or indirectly, for Executive or forothers, anywhere in the United States (the “Restricted Area”) do the following, unlessexpressly authorized to do so in writing by the Chief Executive Officer of the Company:Engage in, or assist any person, entity, or business engaged in, the selling or providingof products or services that would displace the products or services that (i) the Companyis currently in the business of providing, or was planning to be in the business ofproviding, as of the time Executive separated from the Company, and (ii) that Executive hadinvolvement in or received Confidential Information about in the course of employment.Executive further understands that the foregoing restrictions may limit his ability toengage in certain businesses during the Restricted Term, but acknowledges that theserestrictions are necessary to protect the Confidential Information the Company has providedto Executive.     ii. A failure to comply with the foregoing restrictions will create a presumption thatExecutive is engaging in unfair competition. Executive agrees that this covenant does notprevent Executive from using and offering the skills that Executive possessed prior toreceiving access to Confidential Information, confidential training, and knowledge from theCompany. This Agreement creates an advance approval process, and nothing herein isintended, or will be construed
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as, a general restriction against the pursuit of lawful employment in violation of anycontrolling state or federal laws. Executive shall be permitted to engage in activitiesthat would otherwise be prohibited by this covenant if such activities are determined inthe sole discretion of the Chief Executive Officer of the Company to be no material threatto the legitimate business interests of the Company.     b. **Enforcement of Covenants.**Executive acknowledges that a breach of the covenants setforth above will cause irreparable damage to the Company, for which the Company’s remedy at lawfor damages will be inadequate. Therefore, in the event of breach or anticipatory breach of thecovenants set forth in this section by Executive, that the Company shall be entitled to seekthe following particular forms of relief, in addition to remedies otherwise available at law orequity: (A) injunctions enjoining or restraining such breach or anticipatory breach in anycourt of competent jurisdiction; and (B) recovery of all reasonable sums expended and costs,including reasonable attorney’s fees, incurred by the Company to enforce the covenants setforth in Paragraph 5.     c. **Separability of Covenants.**If a court decides that any of the covenants set forth inParagraph 5 exceed the time, geographic, or occupational limitations permitted by applicablelaws, the parties agree that such provisions shall be reformed to the maximum time, geographic,or occupational limitations permitted by applicable laws.     6. *Non-Solicitation*: Executive also agrees that, for a period starting on the **Separation Date**and ending on the first anniversary of that date, he will not, either on his own behalf or jointlywith or as a manager, agent, officer, employee, consultant, partner, joint venturer, owner orshareholder, or otherwise on behalf of any other person, firm or corporation, directly orindirectly solicit or attempt to solicit away from the Company any of its officers or employees;provided, however, that a general advertisement to which an employee of the Company responds shallnot be deemed, standing alone, to result in a breach of this paragraph.     7. *Return of Vought Property:*Executive agrees to immediately return all property owned byVought in his possession including, but not limited to, any Company files, documents, drawings,plans, or photographs; any Vought credit card (or credit card for which Vought is the guarantor);and any badge, personal digital assistant, computer, telephone, pager, fax machine, or printer.     8. *Waiver and Release:*Executive, for and on behalf of himself and his heirs,administrators, executors, successors and assigns, hereby releases and forever discharges Voughtand its subsidiaries, affiliates and related companies, and the current and former directors,officers, executives, managers, agents, attorneys, insurers, independent contractors and employeesof Vought and all its related entities (the “Released Parties”), from any and all claims, whetherdirect or indirect, fixed or contingent, now known or unknown, which Executive ever had, has now,or may claim to have against the Released Parties, by reason of any matter, act, action, inaction,decision, event or subject existing or occurring as of the time Executive signs this Agreement.
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     Executive understands and agrees that by executing this Agreement, he is giving up any and allactions or causes of action, suits, debts, claims, complaints, or demands of any kind whatsoeveragainst the Company, in law or in equity, including but not limited to claims under the AgeDiscrimination in Employment Act of 1967 and under any other federal, state, or local law orregulation; as well as claims that this Agreement was procured through fraud or duress.     This Agreement does not waive or release: (i) any rights or claims that arise or commenceafter the date he signs this Agreement; (ii) Executive’s right to file a charge or participate inan investigation or proceeding conducted by the Equal Employment Opportunity Commission (althoughany rights to recovery in such a proceeding are governed by this Agreement and specifically by thisWaiver and Release paragraph); (iii) any rights or claims Employee may have for employee benefitspursuant to the terms of any Company retirement plans, savings plans, or employee welfare benefitplan providing medical, surgical or hospital benefits; or (iv) any rights or claims Executive mayhave for breach of this Agreement.     9. *Consideration Period:*Executive will have up to twenty-one (21) days from the date hereceives this Agreement to consider it. During this time period, Executive is advised to seek legalcounsel regarding the effect of this Agreement. Changes to this Agreement, whether material orimmaterial, will not restart this time period. Executive may sign and return the Agreement in lessthan twenty-one days if he wishes.     10. *Right to Rescind:*Executive can revoke the Agreement in writing within seven (7)days after signing it. The revocation must be received by W. Bruce White, Jr., General Counsel,Vought Aircraft Industries, Inc., P.O. Box 655907, Dallas, Texas 75265, no later than midnight ofthe seventh day.     11. *Effective Date:*This Agreement will become effective and enforceable eight (8) daysafter Executive signs it and returns it to the Company (the “**Effective Date**”), if not revoked asprovided in Paragraph 10.     12. *Effect of Breach:*If Executive breaches any provision of this Agreement, Vought willhave no further obligations under Paragraph 2 of this Agreement. Executive agrees that in the eventhe breaches this Agreement, Vought will be entitled to legal remedies, including but not limited torepayment of all monies paid to Executive under Paragraph 2 (excluding payment for accrued butunused vacation), together with the attorneys’ fees and costs incurred to collect these monies.     13. *No Admission of Fault or Liability:*The parties agree that this Agreement is notintended to, and does not, constitute an admission of liability or fault on the part of eitherExecutive or Vought.     14. *Enforceable Contract/Severability:*The parties agree that this Agreement is anenforceable contract under the laws of the State of Texas. The parties further agree
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that to the extent any part of this Agreement is found to be in violation of any law orunenforceable as written, that part shall be modified to achieve the objective of the parties tothe fullest extent permitted, and the balance of the Agreement shall remain in full force andeffect.     15. *Entire Agreement:*The parties agree that this Agreement constitutes the entireAgreement between Executive and Vought regarding its subject matter, unless otherwise explicitlystated herein. Any modification or addition to this Agreement, to be effective, must be in writingand signed by Executive and an officer of Vought.     16. *Governing Law:*The parties agree that this Agreement shall be governed by, andinterpreted in accordance with, the laws of the State of Texas. The parties further agree that anysuit, action or proceeding arising out of or seeking to enforce any provision of this Agreement maybe brought only in a court of competent jurisdiction in Dallas County, Texas, and the partieshereby consent to the jurisdiction of such courts.**BY SIGNING THIS AGREEMENT, EXECUTIVE ACKNOWLEDGES (i) HE HAS CAREFULLY READTHIS AGREEMENT AND VOLUNTARILY AGREES TO ITS TERMS, (ii) HE UNDERSTANDS THISAGREEMENT, AND (iii) HE HAS BEEN GIVEN THE OPPORTUNITY TO ASK ANY QUESTIONS ABOUTTHIS AGREEMENT.**IN WITNESS WHEREOF, the parties have executed this Agreement by their signatures below.     **Erich G. Smith** **Vought Aircraft Industries, Inc.**       By: Thomas F. Stubbins     /s/ Erich G. Smith   /s/ Thomas F. Stubbins            Its: Vice President, Human Resources     Dated: April 21, 2006 Dated: April 21, 2006
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