Employment Agreement, dated March 26, 2007 - James E. Schuster



 Exhibit 10.5.1 
 EMPLOYMENT AGREEMENT 
 EMPLOYMENT AGREEMENT, dated as of March 26, 2007 (the “Employment
Agreement”), by and between Hawker Beechcraft Corporation, a Kansas corporation (the “Company”), and James E. Schuster (the “Executive”). 
 WHEREAS, Hawker Beechcraft, Inc., a Delaware corporation and indirect parent of the Company (“HBI”) is party to the Stock Purchase
Agreement, dated as of December 20, 2006 (the “Stock Purchase Agreement”), among HBI, Greenbulb Limited, a company organized under the laws of England and Wales (“U.K. Buyer”), Raytheon Company, a Delaware
corporation (“Parent”), Raytheon Aircraft Holdings, Inc., a Delaware corporation (“RAHI”), and Raytheon Aircraft Services Limited, a company organized under the laws of England and Wales (“RASL”);

 WHEREAS, Parent directly owns all of the outstanding capital stock of RAHI and indirectly owns all of the outstanding capital stock of
RASL, and RAHI directly owns all of the outstanding membership interests of Raytheon Aircraft Acquisition Company LLC, a Delaware limited liability company (“RAAC”); 
 WHEREAS, U.K. Buyer and RASL are also party to that certain Asset Purchase Agreement dated as of December 20, 2006 (the “Asset Purchase
Agreement”); 
 WHEREAS, as of the Closing (as defined in the Stock Purchase Agreement), HBI will purchase all of the equity
interests of RAAC from RAHI, and U.K. Buyer will purchase the RASL Assets (as defined in the Stock Purchase Agreement) from RASL pursuant to the Asset Purchase Agreement; and 
 WHEREAS, the Executive is currently employed as the Chief Executive Officer of Raytheon Aircraft Company, a subsidiary of RAAC, and the Company and the
Executive desire to continue the Executive’s employment with the Company on the terms and conditions set forth in this Employment Agreement. 
 NOW, THEREFORE, in consideration of the mutual covenants contained herein and other valid consideration, the sufficiency of which is acknowledged, the parties hereto agree as follows: 
 Section 1. Employment. 
 1.1. Term. The Company agrees to employ the Executive, and the Executive agrees to be
employed by the Company, in each case pursuant to this Employment Agreement, for a period commencing on the Closing Date (as defined in the Stock Purchase Agreement) (such date, the “Effective Date”) and ending on the earlier of
(i) the fifth (5th) anniversary of the Effective Date and (ii) the termination of the Executive’s employment in accordance with
Section 3 hereof (the “Term”). The term shall be extended for an additional one-year term on the fifth (5th) anniversary of the
Effective Date, and each subsequent anniversary thereof, absent ninety (90) days advance notice of non-extension from either party to the other. 







 1.2. Duties. During the Term, the Executive shall serve as the Company’s Chief Executive
Officer and such other positions as an officer or director of the Company and such affiliates of the Company as the Executive and the board of directors of Hawker Beechcraft, Inc. (the “Board”) shall mutually agree from time to
time, and shall report directly to the Board. In his position of Chief Executive Officer, the Executive shall have all authorities customary for the Chief Executive Officer of the Company’s size and nature, plus such additional duties,
consistent with the foregoing, as the Board may reasonably assign. The principal place of employment, and principal office, shall be the Company’s headquarters in Wichita, Kansas. During the term, the Executive shall serve as a member of the
Board. 
 1.3. Exclusivity. During the Term, the Executive shall devote substantially all of his business time and efforts to the
performance of his duties, shall faithfully serve the Company, and shall in all material respects conform to and comply with the lawful and reasonable directions and instructions given to him by the Board. During the Term, the Executive may, only to
the extent not interfering with his duties at the Company, (i) serve on a reasonable number of boards (with service on boards of for-profit entities being subject to the prior written approval of the Board in its sole discretion);
(ii) engage in educational, charitable and civic activities; (iii) accept and fulfill a reasonable number of speaking engagements; and (iv) manage his personal investments and affairs. 
 Section 2. Compensation. 
 2.1.
Salary. As compensation for the performance of the Executive’s services hereunder, during the Term, the Company shall pay to the Executive a salary at an annual rate of Six Hundred and Thirty Thousand dollars ($630,000) payable in
accordance with the Company’s standard payroll policies (the “Base Salary”). The Base Salary will be reviewed annually and may be adjusted upward (but not downward) by the Board (or a committee thereof) in its discretion.

 2.2. Annual Bonus. For each completed calendar year occurring during the Term, the Executive shall be eligible for potential
awards of additional compensation (the “Annual Bonus”) to be based upon such objectively determinable Company performance criteria for each such calendar year as determined by the Board in consultation with the Executive (including
a pro-rata bonus for calendar year 2007). The Executive’s target Annual Bonus opportunity for each calendar year that ends during the Term shall equal one hundred percent (100%) of the Base Salary (the “Target Annual Bonus
Opportunity”). The maximum bonus payable shall be equal to two hundred percent (200%) of the Base Salary. The amount paid depends on the extent to which objective “target” and “stretch” performance goals, set
annually by the Board in consultation with the Executive, are achieved. The Annual Bonus shall be paid within ninety (90) days of the end of the calendar year. The Annual Bonus shall be payable in cash; provided, however, that
with the Executive’s consent, up to 50% of the Annual bonus may be payable in Common Stock (as defined below). The “target” and “stretch” goals for calendar year 2007 shall be established no later than May 31, 2007.

 2.3. Equity. On the Effective Date, the Executive shall receive equity interests in the Hawker Beechcraft, Inc., a Delaware
corporation (“HBI”), as described below. 
  

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 (a) Equity Purchase. On the Effective Date, the Executive shall be granted the right to purchase,
and the Executive shall thereby agree to purchase, shares of common stock of HBI, par value $.01 per share (the “Common Stock”), pursuant to the terms and conditions of the Stock Purchase Agreement between the Executive and HBI
substantially in the form attached hereto as Exhibit A. On the Effective Date, the Executive shall purchase shares of Common Stock with an aggregate fair market value on the date of purchase equal to $2,571,497.90, pursuant to the Restricted
Stock Award Agreement between the Executive and HBI substantially in the form attached hereto as Exhibit B (the “Restricted Stock Purchase Agreement”). 
 (b) Stock Options. On the Effective Date, HBI shall grant to the Executive options to purchase 2,690,169.5 shares of Common Stock, pursuant to
(i) a time-vesting option agreement between HBI and the Executive, pursuant to which the Executive will be granted an option to purchase 1,265,962.1 shares of Common Stock, substantially in the form attached hereto as Exhibit C,
(ii) a performance-vesting option agreement between HBI and the Executive, pursuant to which the Executive will be granted an option to purchase 712,103.7 shares of Common Stock, substantially in the form attached hereto as Exhibit D and
(iii) a performance-vesting option agreement between HBI and the Executive, pursuant to which the Executive will be granted an option to purchase 712,103.7 shares of Common Stock, substantially in the form attached hereto as Exhibit E.

 2.4. Payment on Effective Date. On the day following the Effective Date, the Company shall pay the Executive $3,657,223, less all
applicable withholding taxes. Such payment shall satisfy in full the Company’s obligation to make a payment of $3,657,223 on March 31, 2008 to the Executive under the Hawker Beechcraft Corporation Retention Program adopted by the Company
as of the Effective Date in respect of the “SERP Benefit.” 
 2.5. Employee Benefits. During the Term, the Executive shall
be eligible to participate in such health and other group insurance and other employee benefit plans and programs of the Company as in effect from time to time on the same basis as other senior executives of the Company. 
 2.6. Vacation. During the Term, the Executive shall be entitled to five (5) weeks vacation per calendar year, with up to an aggregate of
five (5) weeks carry-over permissible to the extent vacation days are not used. The number of vacation days are prorated for the first and last calendar years of employment, and shall be determined by multiplying twenty-five (25) by a
fraction, the numerator of which is the number of days the Executive is employed by the Company during the applicable year and the denominator of which is 365. 
 2.7. Business Expenses. The Company shall pay or reimburse the Executive, upon presentation of documentation, for all commercially reasonable business out-of-pocket expenses that the Executive incurs during the
Term in performing his duties under this Employment Agreement and in accordance with the expense reimbursement policy of the Company as approved by the Board (or a committee thereof) and in effect from time to time. 
 2.8. Attorneys’ Fees. The Company shall promptly pay or reimburse the Executive for fifty percent (50%) of the fees and charges of the
Executive’s attorneys 

  

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reasonably incurred in connection with the negotiation and execution of this Employment Agreement up to an aggregate of $5,000. This $5,000 shall be in
addition to the fees and charges set forth in the invoices attached hereto. 
 2.9. Travel. The Company shall pay or reimburse the
Executive for first-class air travel incurred during the Term in connection with the performance of his duties. The Executive shall also have reasonable access to the Company jet for personal use, for which he will be taxed at SILF rates.

 Section 3. Employment Termination. 
 3.1. Termination of Employment. The Company may terminate the Executive’s employment for any reason during the Term at any time upon not less than thirty (30) days’ notice, or without prior
notice in connection with a termination by the Company for Cause (the date on which the Executive’s employment terminates, the “Termination Date”). Upon the termination of the Executive’s employment with the Company for
any reason, the Executive shall be entitled to (i) payment of any Base Salary earned but unpaid through the date of termination, (ii) earned but unpaid Annual Bonus for calendar years completed prior to the Termination Date (payable in
cash in the ordinary course), (iii) unused vacation days (consistent with Section 2.6 hereof) paid out at the per-business-day base salary rate, (iv) additional vested benefits (if any) in accordance with the applicable terms of
applicable Company arrangements, (v) and any unreimbursed expenses in accordance with Section 2.7 hereof (collectively, the “Accrued Amounts”). 
 3.2. Certain Terminations. 
 (a) Termination by the Company other than for Cause or Disability; Termination by the Executive
for Good Reason. If the Executive’s employment is terminated (x) by the Company other than for Cause or Disability or (y) by the Executive for Good Reason, in addition to the Accrued Amounts, the Executive shall be entitled to a
payment equal to two (2) times the sum of his Base Salary at the rate in effect immediately prior to the Termination Date plus the Target Annual Bonus Opportunity for the year of such termination (such payments, the “Severance
Payments”). In addition, the Company shall pay the Executive a pro-rata bonus for the year of termination, based on the actual performance of the Company for the full year and the number of days in such year prior to and including the
Termination Date (the “Pro-Rata Bonus”), payable at the time when annual bonuses are paid generally. The Company’s obligations to make the Severance Payments shall be conditioned upon: (i) the Executive’s continued
compliance with his obligations under Section 4 of this Employment Agreement and (ii) the Executive’s execution, delivery and non-revocation of a valid and enforceable general release of claims (the “Release”)
substantially in the form attached hereto as Exhibit F. Subject to Section 3.2(d), the Severance Payments will be paid in equal installments on the Company’s regular payroll dates occurring during the twenty-four (24) month
period beginning as soon as practicable following the effectiveness of the Release. The Company shall also provide continued health and welfare benefits to the Executive and his eligible dependents until the first (1st) anniversary of the Termination Date, on the same basis as a then active employee of the Company, with COBRA benefits commencing thereafter. 
  

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 (b) Termination by Death, Disability, or
Non-Extension of the Term by the Company. If the Executive’s employment is terminated by reason of the Executive’s death, Disability, or by non-extension of the Term by the Company, the Company shall pay the Executive (or his heirs
upon a termination by death) the Pro-Rata Bonus at the time when bonuses are paid, if at all, generally. In the event of termination by non-extension of the Term by the Company, the Company will continue to provide health and welfare benefits to the
Executive through the first anniversary of the Termination Date. In the event of termination by reason of the Executive’s death, the Company shall continue to provide health and welfare benefits to the Executive’s eligible dependants
through the first (1st) anniversary of the Termination Date, with COBRA benefits commencing thereafter. 
 (c) Definitions. For purposes of Section 3, the following terms have the following meanings: 
 (1) “Cause” shall mean (i) the Executive’s willful refusal to substantially perform, or his willful failure to make good faith
efforts to substantially perform, his material duties for the Company, or willful failure or refusal to comply with the Company’s policies, which refusal or failure remains uncured for fifteen (15) days after he receives written notice
from the Board demanding cure; (ii) in carrying out his duties under this Agreement, the Executive engages in gross misconduct or gross neglect; or (iii) the Executive is convicted of, or enters a plea of guilty or nolo contendere to, a
felony or a misdemeanor involving moral turpitude. 
 (2) “Disability” shall mean the Executive is entitled to receive
long-term disability benefits under the long-term disability plan of the Company in which Executive participates, or, if there is no such plan, the Executive’s inability, due to physical or mental ill health, to perform the essential functions
of the Executive’s job, with or without a reasonable accommodation, for 90 days out of any 270 day consecutive day period. 
 (3)
“Good Reason” shall mean the occurrence of any of the following events without either the Executive’s prior express written consent or cure by the Company within 30 days after he gives written notice to the Company describing
the event and requesting cure: (i) any material diminution in the Executive’s authorities, titles or offices as are in effect on the Effective Date; (ii) a material change in the reporting structure so that he reports to someone other
than the Board; (iii) any relocation of the Company’s principal office, or of the Executive’s own principal place of employment, to a location more than 35 miles from Wichita, Kansas; (iv) any material breach by the Company, or
any of its affiliates, of any material obligation to the Executive; or (v) the failure of the Company to obtain the assumption in writing of its obligation to perform this Agreement by any successor to all or substantially all of the business
and assets of the Company. Executive must provide notice of termination of employment within ninety (90) calendar days of Executive’s knowledge of the event constituting Good Reason or such event shall not constitute Good Reason under this
Agreement. 
 (d) Section 409A. If the Executive is a “specified employee” for purposes of Section 409A of the
United States Internal Revenue Code of 1986, as amended (the “Code”), and the regulations thereunder, any Severance Payments required to be made pursuant to Section 3.2 which are subject to Section 409A of the Code shall
not commence until one day 

  

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after the day which is six (6) months from the Termination Date, with the first payment equaling six (6) months of his Base Salary at the rate in
effect immediately prior to the Termination Date. Notwithstanding anything to the contrary contained in Section 3.2, if Section 409A of the Code and the proposed regulations thereunder are amended such that the payout schedule of the
Severance Payments subjects the Executive to tax under Section 409A of the Code, the Company will amend such payout schedule to avoid such tax, or shall make the Executive whole for the imposition of such tax. 
 3.3. Exclusive Remedy. The foregoing payments upon termination of the Executive’s employment shall constitute the exclusive severance
payments due the Executive upon a termination of his employment under this Employment Agreement. Notwithstanding the foregoing provisions of Section 3, the Severance Payments and the Pro-Rata Bonus shall be reduced dollar for dollar by all
amounts and benefits paid or payable pursuant to the letter from Raytheon Company to the Executive dated July 27, 2006 if the termination of Executive’s employment occurs before the second anniversary of the Effective Date. 
 3.4. Resignation from All Positions. Upon the termination of the Executive’s employment with the Company for any reason, the Executive shall
resign, as of the date of such termination, from all positions he then holds as an officer, director, employee and member of the boards of directors (and any committee thereof) of the Company and its affiliates. The Executive shall be required to
execute such writings as are required to effectuate the foregoing. 
 3.5. Cooperation. Following the termination of the
Executive’s employment with the Company for any reason, the Executive shall reasonably cooperate with the Company upon reasonable request of the Board and to be reasonably available to the Company with respect to matters arising out of the
Executive’s services to the Company and its subsidiaries. The Company shall reimburse the Executive for expenses reasonably incurred in connection with such matters. 
 Section 4. Unauthorized Disclosure; Non-Competition; Non-Solicitation; Interference with Business Relationships; Proprietary Rights. 
 4.1. Unauthorized Disclosure. The Executive agrees and understands that in the Executive’s position with the Company, the Executive has been
and will be exposed to and has and will receive information relating to the confidential affairs of the Company and its affiliates, including, without limitation, technical information, intellectual property, business and marketing plans,
strategies, customer information, software, other information concerning the products, promotions, development, financing, expansion plans, business policies and practices of the Company and its affiliates and other forms of information considered
by the Company and its affiliates to be confidential or in the nature of trade secrets (including, without limitation, ideas, research and development, know-how, formulas, technical data, designs, drawings, specifications, customer and supplier
lists, pricing and cost information and business and marketing plans and proposals) (collectively, the “Confidential Information”). The Executive agrees that at all times during the Executive’s employment with the Company and
thereafter, the Executive shall not disclose such Confidential Information, either directly or indirectly, to any individual, corporation, partnership, limited liability company, association, trust or other entity or 

  

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organization, including a government or political subdivision or an agency or instrumentality thereof (each a “Person”) without the prior
written consent of the Company and shall not use or attempt to use any such information in any manner other than in connection with his employment with the Company, unless required by law to disclose such information, in which case the Executive
shall provide the Company with written notice of such requirement as far in advance of such anticipated disclosure as possible. This confidentiality covenant has no temporal, geographical or territorial restriction. Upon termination of the
Executive’s employment with the Company, the Executive shall promptly supply to the Company all property, keys, notes, memoranda, writings, lists, files, reports, customer lists, correspondence, tapes, disks, cards, surveys, maps, logs,
machines, technical data and any other tangible product or document which has been produced by, received by or otherwise submitted to the Executive during or prior to the Executive’s employment with the Company, and any copies thereof in his
(or capable of being reduced to his) possession. 
 4.2. Non-Competition. By and in consideration of the Company’s entering into
this Employment Agreement, and in further consideration of the Executive’s exposure to the Confidential Information of the Company and its affiliates, the Executive agrees that the Executive shall not, during the Executive’s employment
with the Company (whether during the Term or thereafter) and for a period of twenty-four (24) months thereafter (the “Restriction Period”), directly or indirectly, own, manage, operate, join, control, be employed by, or
participate in the ownership, management, operation or control of, or be connected in any manner with, including, without limitation, holding any position as a stockholder, director, officer, consultant, independent contractor, employee, partner, or
investor in, any Restricted Enterprise (as defined below); provided, that in no event shall ownership of one percent (1%) or less of the outstanding securities of any class of any issuer whose securities are registered under the
Securities Exchange Act of 1934, as amended, standing alone, be prohibited by this Section 4.2, so long as the Executive does not have, or exercise, any rights to manage or operate the business of such issuer other than rights as a stockholder
thereof. For purposes of this paragraph, “Restricted Enterprise” shall mean any Person that is actively engaged in any geographic area in (i) the ownership of a type certificate of, or the design, manufacture, sale, or
marketing of, general aviation aircraft of whatever description, including, without limitation, of whatever size, range, engine type, or intended use, or of military trainer aircraft, or the design, manufacture, distribution, sale, or marketing of
airframe components for general aviation aircraft or military trainer aircraft, or the provision of line fixed base operations or maintenance, repair, and/or overhaul services for general aviation aircraft or military trainer aircraft or
(ii) any other business proposed to be conducted by the Company or any of its subsidiaries in the Company’s business plan as in effect at that time. During the Restriction Period, upon request of the Company, the Executive shall notify the
Company of the Executive’s then-current employment status 
 4.3. Non-Solicitation of Employees. During the Restriction Period,
the Executive shall not directly or indirectly contact, induce or solicit (or assist any Person to contact, induce or solicit) for employment any person who is, or within twelve (12) months prior to the date of such solicitation was, an
employee of the Company or any of its affiliates. 
 4.4. Interference with Business Relationships. During the Restriction Period,
the Executive shall not directly or indirectly contact, induce or solicit (or assist any Person to contact, induce or solicit) any customer or client of the Company or its subsidiaries to 

  

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terminate its relationship or otherwise cease doing business in whole or in part with the Company or its subsidiaries, or directly or indirectly interfere
with (or assist any Person to interfere with) any material relationship between the Company or its subsidiaries and any of its or their customers or clients so as to cause harm to the Company or its affiliates. 
 4.5. Extension of Restriction Period. The Restriction Period shall be tolled for any period during which the Executive is in breach of any of
Sections 4.2, 4.3 or 4.4 hereof. 
 4.6. Proprietary Rights. The Executive shall disclose promptly to the Company any and all
inventions, discoveries, and improvements (whether or not patentable or registrable under copyright or similar statutes), and all patentable or copyrightable works, initiated, conceived, discovered, reduced to practice, or made by him, either alone
or in conjunction with others, during the Executive’s employment with the Company and related to the business or activities of the Company and its affiliates (the “Developments”). Except to the extent any rights in any
Developments constitute a work made for hire under the U.S. Copyright Act, 17 U.S.C. § 101 et seq. that are owned ab initio by the Company and/or its applicable affiliate, the Executive assigns all of his right, title and interest in all
Developments (including all intellectual property rights therein) to the Company or its nominee without further compensation, including all rights or benefits therefor, including without limitation the right to sue and recover for past and future
infringement. The Executive acknowledges that any rights in any Developments constituting a work made for hire under the U.S. Copyright Act, 17 U.S.C § 101 et seq. are owned upon creation by the Company and/or its applicable affiliate as the
Executive’s employer. Whenever requested to do so by the Company, the Executive shall execute any and all applications, assignments or other instruments which the Company shall deem necessary to apply for and obtain trademarks, patents or
copyrights of the United States or any foreign country or otherwise protect the interests of the Company and its affiliates therein. These obligations shall continue beyond the end of the Executive’s employment with the Company with respect to
inventions, discoveries, improvements or copyrightable works initiated, conceived or made by the Executive while employed by the Company, and shall be binding upon the Executive’s employers, assigns, executors, administrators and other legal
representatives. In connection with his execution of this Employment Agreement, the Executive has informed the Company in writing of any interest in any inventions or intellectual property rights that he holds as of the date hereof. If the Company
is unable for any reason, after reasonable effort, to obtain the Executive’s signature on any document needed in connection with the actions described in this Section 4.6, the Executive hereby irrevocably designates and appoints the
Company and its duly authorized officers and agents as the Executive’s agent and attorney in fact to act for and on the Executive’s behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to
further the purposes of this Section 4.6 with the same legal force and effect as if executed by the Executive. 
 4.7.
Confidentiality of Agreement. Other than with respect to information required to be disclosed by applicable law, the parties hereto agree not to disclose the terms of this Employment Agreement to any Person; provided the Executive may
disclose this Employment Agreement and/or any of its terms to the Executive’s immediate family, financial advisors and attorneys, so long as the Executive instructs every such Person to whom the Executive makes such disclosure not to disclose
the terms of this Employment Agreement further. Anytime after this agreement is filed with the SEC or any other government agency by the Company and becomes a public record, this provision shall no longer apply. 
  

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 4.8. Remedies. The Executive agrees that any breach of the terms of this Section 4 would
result in irreparable injury and damage to the Company for which the Company would have no adequate remedy at law; the Executive therefore also agrees that in the event of said breach or any threat of breach, the Company shall be entitled to an
immediate injunction and restraining order to prevent such breach and/or threatened breach and/or continued breach by the Executive and/or any and all Persons acting for and/or with the Executive, without having to prove damages, in addition to any
other remedies to which the Company may be entitled at law or in equity, including, without limitation, the obligation of the Executive to return any Severance Payments made by the Company to the Company. The terms of this paragraph shall not
prevent the Company from pursuing any other available remedies for any breach or threatened breach hereof, including, without limitation, the recovery of damages from the Executive. The Executive and the Company further agree that the provisions of
the covenants contained in this Section 4 are reasonable and necessary to protect the businesses of the Company and its affiliates because of the Executive’s access to Confidential Information and his material participation in the
operation of such businesses. 
 Section 5. Representation. The Executive represents and warrants that (i) he is not subject
to any contract, arrangement, policy or understanding, or to any statute, governmental rule or regulation, that in any way limits his ability to enter into and fully perform his obligations under this Employment Agreement and (ii) he is not
otherwise unable to enter into and fully perform his obligations under this Employment Agreement. 
 Section 6.
Non-Disparagement. From and after the Effective Date and following termination of the Executive’s employment with the Company, the Executive and the Company agree not to make any statement that criticizes, ridicules, disparages or is
otherwise derogatory of the other Party or, in the case of statements about the Company, any of its subsidiaries, affiliates, employees, officers, directors or stockholders. For such purpose, statements by “the Company” shall mean only
(i) the Company by press release or other formally released announcement and (ii) the executive officers and directors thereof and not any other employees. 
 Section 7. Taxes. 
 7.1. Withholding. All amounts paid to the Executive under this
Employment Agreement during or following the Term shall be subject to withholding and other employment taxes imposed by applicable law. The Executive shall be solely responsible for the payment of all taxes imposed on him relating to the payment or
provision of any amounts or benefits hereunder. 
 7.2. Effect of Section 280G of the Code. Anything in this Employment
Agreement to the contrary notwithstanding and except as set forth below, if it is determined that any payment or distribution by the Company to or for your benefit (whether paid or payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise, but determined without regard to any additional payments required under this Section 7.2) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code, or any interest
or penalties are 

  

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incurred by you with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as
the “Excise Tax”), then you shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by you of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, you retain an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 7.2, in the event that a reduction to the Payments in respect of the Executive of 25% or less would cause no Excise Tax to be payable, the Executive will
not be entitled to a Gross-Up Payment and the Payments shall be reduced to the extent necessary so that the Payments shall not be subject to the Excise Tax. Unless the Executive shall have given prior written notice to the Company specifying a
different order by which to effectuate the foregoing, the Company shall reduce or eliminate the Payments (x) by first reducing or eliminating the portion of the Payments which are not payable in cash (other than that portion of the Payments
subject to clause (z) hereof), (y) then by reducing or eliminating cash payments (other than that portion of the Payments subject to clause (z) hereof) and (z) then by reducing or eliminating the portion of the Payments (whether
payable in cash or not payable in cash) to which Treasury Regulation Section 1.280G-1 Q/A 24(c) (or successor thereto) applies, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the
date of the change in control of the Company. Any notice given by the Executive pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing the Executive’s rights and
entitlements to any benefits or compensation. 
 Section 8. Miscellaneous. 
 8.1. Indemnification. The Company shall indemnify the Executive to the fullest extent provided under Delaware law and shall provide the Executive,
with respect to claims arising or asserted during the Term and for six years thereafter, Directors and Officers Insurance no less favorable that then apply to the Company’s directors and officers generally. 
 8.2. Amendments and Waivers. This Employment Agreement and any of the provisions hereof may be amended, waived (either generally or in
a particular instance and either retroactively or prospectively), modified or supplemented, in whole or in part, only by written agreement signed by the parties hereto; provided, that, the observance of any provision of this Employment
Agreement may be waived in writing by the party that will lose the benefit of such provision as a result of such waiver. The waiver by any party hereto of a breach of any provision of this Employment Agreement shall not operate or be construed as a
further or continuing waiver of such breach or as a waiver of any other or subsequent breach, except as otherwise explicitly provided for in such waiver. Except as otherwise expressly provided herein, no failure on the part of any party to exercise,
and no delay in exercising, any right, power or remedy hereunder, or otherwise available in respect hereof at law or in equity, shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party
preclude any other or further exercise thereof or the exercise of any other right, power or remedy. 
  

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 8.3. Assignment; No Third-Party Beneficiaries. This Employment Agreement, and the
Executive’s rights and obligations hereunder, may not be assigned by the Executive, and any purported assignment by the Executive in violation hereof shall be null and void. Nothing in this Employment Agreement shall confer upon any Person not
a party to this Employment Agreement, or the legal representatives of such Person, any rights or remedies of any nature or kind whatsoever under or by reason of this Employment Agreement, except the personal representative of the deceased Executive
may enforce the provisions hereof applicable in the event of the death of the Executive. The Company is authorized to assign this Employment Agreement to a successor to substantially all of its assets. 
 8.4. Notices. Unless otherwise provided herein, all notices, requests, demands, claims and other communications provided for under the terms of
this Employment Agreement shall be in writing. Any notice, request, demand, claim or other communication hereunder shall be sent by (i) personal delivery (including receipted courier service) or overnight delivery service, (ii) facsimile
during normal business hours, with confirmation of receipt, to the number indicated, (iii) reputable commercial overnight delivery service courier or (iv) registered or certified mail, return receipt requested, postage prepaid and
addressed to the intended recipient as set forth below: 
  

			
	If to the Company:	  	c/o GS Capital Partners
		  	85 Broad Street
		  	New York, NY 10004
		  	Attention: Sanjeev Mehra
		  	Facsimile: 212-357-5505
		
		  	and
		
		  	c/o Onex Partners Advisor LP
		  	161 Bay Street, 49th Floor
		  	Toronto, ON M5J 2S1
		  	Attention: Nigel Wright
		  	Facsimile: 416-362-5765
		
		  	with a copy to:
		
		  	Fried, Frank, Harris, Shriver & Jacobson LLP
		  	One New York Plaza
		  	New York, NY 10004
		  	Attention: Christopher Ewan, Esq.
		  	Facsimile: 212-859-4000
		
	If to the Executive:	  	James E. Schuster at his principal office at the Company (during the Term), and at all times to his principal residence as reflected in the records of the Company.

  

 11 









			
		  	with a copy to:
		
		  	Foulston Siefkin LLP
		  	Attn: Harvey R. Sorensen
		  	1551 N. Waterfront Parkway, Suite 100
		  	Wichita, KS 67206-4466

 All such notices, requests, consents and other communications shall be deemed to have been given
when received. Either party may change its facsimile number or its address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other parties hereto notice in the manner then set forth.

 8.5. Governing Law. This Employment Agreement shall be construed and enforced in accordance with, and the rights and obligations
of the parties hereto shall be governed by, the laws of the State of New York, without giving effect to the conflicts of law principles thereof. 
 8.6. Arbitration. Each party irrevocably submits that all disputes arising out of or relating to this Agreement shall be resolved through the American Arbitration Association in New York, New York. It is further agreed that each
party will bear its own costs in connection with such arbitration. 
 8.7. Severability. Whenever possible, each provision or portion
of any provision of this Employment Agreement, including those contained in Section 4 hereof, will be interpreted in such manner as to be effective and valid under applicable law but the invalidity or unenforceability of any provision or
portion of any provision of this Employment Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Employment Agreement in that jurisdiction or the validity or enforceability of this Employment
Agreement, including that provision or portion of any provision, in any other jurisdiction. In addition, should a court or arbitrator determine that any provision or portion of any provision of this Employment Agreement, including those contained in
Section 4 hereof, is not reasonable or valid, either in period of time, geographical area, or otherwise, the parties hereto agree that such provision should be interpreted and enforced to the maximum extent which such court or arbitrator deems
reasonable or valid. 
 8.8. Entire Agreement. From and after the Effective Date, this Employment Agreement constitutes the
entire agreement between the parties hereto, and supersede all prior representations, agreements and understandings (including any prior course of dealings), both written and oral, between the parties hereto with respect to the subject matter
hereof. 
 8.9. Counterparts. This Employment Agreement may be executed in any number of counterparts, each of which shall be deemed
an original, but all such counterparts shall together constitute one and the same instrument. 
  

 12 








 8.10. Binding Effect. This Employment Agreement shall inure to the benefit of, and be binding on,
the successors and assigns of each of the parties, including, without limitation, the Executive’s heirs and the personal representatives of the Executive’s estate and any successor to all or substantially all of the business and/or assets
of the Company. 
 8.11. General Interpretive Principles. The name assigned this Employment Agreement and headings of the sections,
paragraphs, subparagraphs, clauses and subclauses of this Employment Agreement are for convenience of reference only and shall not in any way affect the meaning or interpretation of any of the provisions hereof. Words of inclusion shall not be
construed as terms of limitation herein, so that references to “include,” “includes” and “including” shall not be limiting and shall be regarded as references to non-exclusive and non-characterizing illustrations.

  

 13 








 IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first written
above. 
  

			
	HAWKER BEECHCRAFT CORPORATION
		
	By:	 	 /s/ Gail E. Lehman

	Name:	 	
	Title:	 	
	
	 /s/ James E. Schuster

	James E. Schuster









 Exhibit A 
 Stock Purchase Agreement 







 HAWKER BEECHCRAFT, INC. 
 STOCK PURCHASE AGREEMENT 
 THIS AGREEMENT (the “Agreement”), is made effective as of
March 26, 2007 (the “Date of Grant”), between Hawker Beechcraft, Inc., a Delaware corporation (the “Company”), and James E. Schuster (the “Executive”). 
 R E C I T A L S: 
 WHEREAS, the
Board of Directors of the Company (the “Board”) has determined that it would be in the best interests of the Company and its shareholders to enter into this Agreement pursuant to the terms set forth herein. 
 NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties agree as follows: 
 1. Grant of the Purchase Right. The Company hereby grants to the Executive the right to purchase, and the Executive hereby agrees to purchase,
pursuant to the terms and conditions hereinafter set forth, 124,934.4 Shares (the “Purchase Right”). The aggregate purchase price for the Shares shall be $1,249,343.40, which the Company and the Executive agree is not less than the fair
market value of the Shares as of the date hereof. 
 2. Exercisability. The Purchase Right is 100% vested and the Executive may
purchase all of the Shares as of the date hereof. 
 3. Mandatory Purchase. 
 (a) Purchase Period. The Executive must purchase all of the Shares no later
than the twenty-fifth (25th) day following the first to occur of (i) the second (2nd) anniversary of the date hereof, and (ii) a termination of the Executive’s employment with the Company in the circumstances described in Section 5(C) of the Retention Agreement between the
Raytheon Company and the Executive dated July 27, 2006 (the “Expiration Date”). 
 (b) If there
is a Transaction prior to the Expiration Date, the Executive must provide notice of exercise of the Purchase Right no later than ten (10) days following the execution of the definitive agreement (including, without limitation, any purchase
agreement, merger agreement, or agreement relating to the support or implementation of a tender offer) that, if consummated, would result in the Transaction. Such notice shall provide that the Executive is exercising the Purchase Right and
purchasing the Shares on the date of consummation. Once made, such notice shall be irrevocable unless the Transaction is not consummated. The Company shall notify the Executive in writing within five (5) days following execution of such
agreement. 
 (c) Method of Exercise. 
 (i) The Shares shall be purchased by delivery of the written notice attached hereto as Exhibit A to the Board together with payment in
full of the purchase price in 








 
cash or by check or wire transfer. The Executive shall not have any rights to dividends or other rights of a stockholder with respect to Shares until the
Executive has given written notice of purchase of the Shares, paid in full for such Shares, satisfied any applicable withholding requirements and, if applicable, satisfied any other conditions imposed by the Committee or pursuant to this Agreement.

 (ii) Notwithstanding any other provision of this Agreement to the contrary, the Shares may not be purchased prior to the
completion of any registration or qualification of the Purchase Right or the Shares under applicable state and federal securities or other laws, or under any ruling or regulation of any governmental body or national securities exchange
(collectively, the “Legal Requirements”) that the Committee shall in good faith based on advice of counsel determine to be necessary or advisable, unless an exemption to such registration or qualification is available and satisfied. The
Committee may establish additional procedures as it deems necessary or desirable in connection with the purchase of any Shares to comply with any Legal Requirements. 
 (iii) Upon the Committee’s determination that the Shares have been validly purchased, and that the Executive has paid in full for the
Shares and satisfied any applicable withholding requirements, the Company shall issue certificates in the Executive’s name for the Shares. 
 (iv) The Executive agrees that as a condition precedent to the purchase of the Shares he will become a party to the Stockholders Agreement. 
 4. No Right to Continued Employment. The granting of the Purchase Right evidenced hereby and this Agreement shall impose no obligation on the
Company or any other member of the Company Group to continue the employment of the Executive and shall not lessen or affect the Company’s or such other member’s right to terminate the employment of such Executive. 
 5. Legend on Certificates. The certificates representing the Shares purchased shall be subject to such stop transfer orders and other restrictions
as the Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission and any stock exchange upon which such Shares are listed, and any applicable Federal or state laws, and the Committee
may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. 
 6.
Transferability. The Purchase Right and the Executive’s other rights and obligations under this Agreement may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Executive without the prior
written consent of the Company otherwise than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against any member of
the Company Group; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. Notwithstanding the foregoing, in the event of the Executive’s death prior to
the Expiration Date his heirs and legatees shall have the right to exercise the Purchase Right and purchase the Shares in accordance with the terms hereof. 
  

 - 2 - 








 7. Withholding. Whenever the Shares are purchased, the Company shall have the Executive remit to
the Company cash sufficient to satisfy all federal, state and local withholding tax requirements prior to issuance of the Shares and the delivery of any certificate or certificates for such Shares. 
 8. Securities Laws. Upon the acquisition of any Shares pursuant to the Purchase Right, the Executive will make or enter into such written
representations, warranties and agreements as the Committee may reasonably request in order to comply with applicable securities laws or with this Agreement. 
 9. Notices. Any notice necessary under this Agreement shall be addressed to the Company in care of its Secretary at the principal executive office of the Company and to the Executive at the address appearing in
the personnel records of the Company for the Executive or to either party hereto at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee.

 10. Choice of Law. This agreement shall be governed by and construed in accordance with the laws of the State of New York without
regard to principles of conflicts of laws. 
 11. Signature in Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 
 12. Certain
Definitions. The following capitalized terms used but not otherwise defined in this Agreement have the respective meanings set forth in this Section 12. 
  

	 	(a)	Transaction shall have the meaning set forth in the Hawker Beechcraft, Inc. 2007 Stock Option Plan (the “Plan”). 

  

	 	(b)	Committee: The Board or such committee of the Board as may be designated by the Board from time to time to administer the Plan. 

  

	 	(c)	Company Group: Collectively, the Company, its subsidiaries and its or their respective successors and assigns. 

  

	 	(d)	Shares: Shares of common stock, par value $.01 per share, of the Company and any other securities into which such shares of common stock are changed or for which such shares
of common stock are exchanged. 

  

	 	(e)	Stockholders Agreement: The Stockholders Agreement dated as of March 26, 2007 (as amended and restated from time to time) by and among the Company and such other Persons
who are or become parties thereto. 

 [signature page attached] 
  

 - 3 - 








 IN WITNESS WHEREOF, the parties hereto have executed this Agreement, effective as of the date hereof.

  

			
	HAWKER BEECHCRAFT, INC.
		
	By:	 	 
	Name:	 	
	Title:	 	


  

	
	Agreed and acknowledged as of the Date of Grant:
	
	  
	James E. Schuster








 Exhibit B 
 Restricted Stock Award Agreement 







 HAWKER BEECHCRAFT, INC. 
 RESTRICTED STOCK AWARD AGREEMENT 
 THIS RESTRICTED STOCK AWARD AGREEMENT (this
“Agreement”), made as of March 26, 2007 (the “Grant Date”), between Hawker Beechcraft, Inc., a Delaware corporation (the “Company”), and James E. Schuster (the “Grantee”).

 WHEREAS, the Board of Directors of the Company (the “Board”) has determined to grant to the Grantee an award of
restricted common stock of the Company, par value $0.01 per share, as provided herein (the “Restricted Stock”). 
 NOW,
THEREFORE, the parties hereto agree as follows: 
 1. Grant of Restricted Stock. 
 The Company hereby grants to the Grantee an award of 257,149.8 shares of Restricted Stock (the “Award”). The shares of
Restricted Stock granted pursuant to the Award shall be issued in the form of book-entry shares in the name of the Grantee as soon as reasonably practicable after the Grant Date and shall be subject to the execution and return of this Agreement and
the Shareholders Agreement by the Grantee. 
 2. Restrictions on Transfer. 
 The shares of Restricted Stock issued under this Agreement may not be sold, transferred, assigned or otherwise disposed of, and may not be
pledged or otherwise hypothecated, other than pursuant to the Shareholders Agreement, and shall be held by the Secretary of the Company for the Grantee’s benefit until such time as restrictions on such Restricted Stock shall have lapsed in the
manner provided in Section 3 or such Restricted Stock is forfeited to the Company as provided in Section 4 hereof. 
 3. Lapse
of Restrictions Generally. 
 (a) The shares of Restricted Stock issued hereunder shall vest, and, subject to the
Shareholders Agreement, the restrictions with respect to such Restricted Stock shall lapse, at the same time and in the same proportion as the payments due to the Grantee under the Retention Program, as set forth on Schedule A hereto. 
 (b) Notwithstanding Section 3(a), the Grantee shall be 100% vested in all of the shares of Restricted Stock immediately upon a
termination of the Grantee’s employment in the precise circumstances described in Section 4.2 of the Retention Program. 







 4. Forfeiture of Restricted Stock. 
 Any and all shares of Restricted Stock which have not vested shall be forfeited and shall revert to the Company upon the termination
by the Company or its subsidiaries of the Grantee’s employment for Cause (as defined in the Retention Program). Subject to Section 3 hereof, any and all shares of Restricted Stock which have not vested shall be forfeited and shall revert
to the Company upon the termination of the Grantee’s employment with the Company or its subsidiaries for any reason. 
 5. Delivery
of Restricted Stock. 
 Evidence of book-entry shares with respect to shares of Restricted Stock in respect of which the
restrictions have lapsed pursuant to Section 3 hereof shall be delivered to the Grantee as soon as practicable following the date on which the restrictions on such Restricted Stock have lapsed, free of all restrictions hereunder. 
 6. Execution of Agreements. 
 The shares of Restricted Stock granted to the Grantee pursuant to the Award shall be subject to the Grantee’s execution and return of this Agreement and the Shareholders Agreement. 
 7. No Right to Continued Employment. 
 Nothing in this Agreement shall interfere with or limit in any way the right of the Company or its subsidiaries to terminate the Grantee’s employment, nor confer upon the Grantee any right to continuance of
employment by the Company Group or continuance of service as a member of the board of directors of any member of the Company Group. 
 8.
Withholding of Taxes. 
 Prior to the delivery to the Grantee (or the Grantee’s estate, if applicable) of evidence
of book-entry shares with respect to shares of Restricted Stock in respect of which all restrictions have lapsed, the Grantee (or the Grantee’s estate) shall pay to the Company the federal, state and local income taxes and other amounts as may
be required by law to be withheld by the Company with respect to such Restricted Stock. The Company is authorized by the Grantee (or the Grantee’s estate, if applicable) to make such withholdings from amounts due by the Company to the Grantee.

 9. Modification of Agreement. 
 This Agreement may be modified, amended, suspended or terminated, and any terms or conditions may be waived, but only by a written instrument executed by the parties hereto. 
  

 -2- 








 10. Severability. 
 Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the
remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms. 
 11. Governing Law. 
 The validity, interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of New York, without giving effect to the conflicts of laws principles thereof. 
 12. Successors in
Interest. 
 This Agreement shall inure to the benefit of and be binding upon any successor to the Company. This Agreement
shall inure to the benefit of the Grantee’s legal representatives. All obligations imposed upon the Grantee and all rights granted to the Company under this Agreement shall be binding upon the Grantee’s heirs, executors, administrators and
successors. 
 13. No Liability. 
 No member of the Board shall be liable for any action or determination made in good faith with respect to the Award or this Agreement. 
 14. Resolution of Disputes. 
 Any dispute or disagreement which may arise under, or as
a result of, or in any way relate to, the interpretation, construction or application of this Agreement shall be determined by the Board. Any determination made hereunder shall be final, binding and conclusive on the Grantee, the Grantee’s
heirs, executors, administrators and successors, and the Company and its subsidiaries for all purposes. 
 15. Entire Agreement.

 This Agreement and the terms and conditions of the Shareholders Agreement constitute the entire understanding between the
Grantee and the Company and its subsidiaries with respect to the Award, and supersede all other agreements, whether written or oral, with respect to the Award. The Grantee acknowledges and agrees that the Retention Program is hereby amended to
reduce the amount owing to the Grantee thereunder dollar for dollar by (x) the dollar value of the Restricted Stock, or $2,571,498, and (y) the amount of the payment to the Grantee of $3,657,223 on the date following the date hereof, and
Exhibits A and B thereto are amended as follows: 
  

 -3- 








 Exhibit A 
  

				
	 James E. Schuster
	  	$	1,932,001

 Exhibit B 
  

							
	 	  	Equity Awards	  	 SERP
 Benefit

	 June 30, 2007
	  	$	283,477	  		
	 March 31, 2008
	  	$	417,343	  	$	0
	 June 30, 2008
	  	$	287,215	  		
	 March 31, 2009
	  	$	518,706	  		
	 June 30, 2009
	  	$	287,237	  		
	 June 30, 2010
	  	$	138,023	  		

 16. Headings. 
 The headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. 
 17. Counterparts. 
 This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which taken together shall constitute one and the same agreement. 
 18. Certain Definitions. 
 The following capitalized terms used but not otherwise defined in this Agreement have the respective meanings set forth in this Section 18. 
 Company Group: Collectively, the Company, its subsidiaries and its or their respective successors and assigns. 
 Retention Program: The Retention Program of Hawker Beechcraft Corporation, substantially in the form set forth as Exhibit I to the Stock Purchase Agreement, dated as of December 20, 2006, by and among
Hawker Beechcraft Corporation, a Delaware corporation, Greenbulb Limited, a company organized under the laws of England and Wales, Raytheon Company, a Delaware corporation, Raytheon Aircraft 

  

 -4- 








 
Holdings, Inc., a Delaware corporation, and Raytheon Aircraft Services Limited, a company organized under the laws of England and Wales. 
 Shareholders Agreement: The Shareholders Agreement dated as of March 26, 2007 (as amended and restated from time to time) by
and among the Company and such other persons who are or become parties thereto. 
  

 -5- 









					
	HAWKER BEECHCRAFT, INC.
		
	By:	 	 
		 	Name:	 	
		 	Title:	 	
	
	GRANTEE
	
	 
	James E. Schuster









 Schedule A 
  


						
	 Date
	  	 Shares of
 Restricted Stock
 Eligible to Vest
	  	 % of Shares of
 Restricted Stock
 Vesting
	 
	 June 30, 2007
	  	37,730.8	  	14.67	%
	 March 31, 2008
	  	55,548.5	  	21.60	%
	 June 30, 2008
	  	38,228.3	  	14.87	%
	 March 31, 2009
	  	69,040.0	  	26.85	%
	 June 30, 2009
	  	38,231.2	  	14.87	%
	 June 30, 2010
	  	18,370.9	  	7.14	%










 Exhibit C 
 Time-Vesting Option Agreement 
  

 17 








 HAWKER BEECHCRAFT, INC. 
 NONQUALIFIED STOCK OPTION AGREEMENT 
 (Time-Vesting) 
 THIS AGREEMENT (the “Agreement”), is made effective as of March 26, 2007 (the “Date of Grant”), between Hawker Beechcraft, Inc.,
a Delaware corporation (the “Company”), and James E. Schuster (the “Participant”). 
 R E C I
T A L S: 
 WHEREAS, the Company has adopted the Hawker Beechcraft, Inc. 2007 Stock Option Plan (the
“Plan”), which Plan is incorporated herein by reference and made a part of this Agreement. Capitalized terms not otherwise defined herein shall have the meanings given thereto in the Plan; 
 WHEREAS, the Participant, the Company and Hawker Beechcraft Corporation (“HBC”) have entered into that certain Employment Agreement dated as of
March 26, 2007 (the “Employment Agreement”); and 
 WHEREAS, the Committee has determined that it would be in the best
interests of the Company and its shareholders to grant an Option to the Participant pursuant to the Plan and the terms set forth herein. 
 NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties agree as follows: 
 1. Grant of the
Option. The Company hereby grants to the Participant the right and option to purchase, pursuant to Section 6 of the Plan and the terms and conditions hereinafter set forth, all or any part of an aggregate of 1,265,962.1 Shares, subject to
adjustment as set forth in the Plan. The Option Price shall be $10.00 per share, which the Company and the Participant agree is not less than the Fair Market Value of the Shares as of the date hereof. The Option is granted pursuant to and is
governed in all respects by the Plan. This Option is not intended to constitute an incentive stock option under Section 422 of the Code. 
 2. Vesting; Termination of Employment. 
 (a) Subject to Section 2(b) hereof and the earlier termination
or cancellation of the Option as set forth herein or in the Plan, the Option shall vest and become exercisable as follows, in each case so long as the Participant’s Employment has not theretofore terminated: 
 (i) Prior to the first (1st) anniversary of the Date of Grant, no portion of the Option shall vest or be exercisable; 
 (ii) On and after the first (1st
) anniversary of the Date of Grant, the Option shall vest and be exercisable with respect to an aggregate of 253,192.4 Shares; 
 (iii) On and after the second (2nd
) anniversary of the Date of Grant, the Option shall vest and be exercisable with respect to an aggregate of 506,384.8 Shares; 







 (iv) On and after the third
(3rd) anniversary of the Date of Grant, the Option shall vest and be exercisable with respect to an aggregate of 759,577.2 Shares; 

(v) On and after the fourth (4th) anniversary of the Date of Grant, the Option shall vest and be exercisable with respect to an aggregate of 1,012,769.6 Shares; and 
 (vi) On and after the fifth (5th
) anniversary of the Date of Grant, the Option shall vest and be exercisable with respect to an aggregate of 1,265,962.1 Shares. 
 The portion of the Option which has become vested and exercisable as described herein is hereinafter referred to as the “Vested Portion.” 
 (b) If the Participant’s Employment is terminated for Cause, the Option shall, whether or not then vested, be automatically canceled
without payment of consideration therefor. 
 (c) If the Participant’s Employment is terminated without Cause, by the
Participant for Good Reason (as defined in the Employment Agreement), by reason of the Company or HBC providing notice to the Participant that it is not renewing the term of the Employment Agreement, or due to the Participant’s death or
Disability, the Participant shall be vested in an additional 20% of the Shares originally subject to the Option. The Option shall, to the extent not previously vested or vesting as described in this Section 2(c), be automatically canceled
without payment of consideration therefor, and the Vested Portion of the Option shall remain exercisable for the applicable period set forth in Section 3(a). 
 (d) Upon termination of the Participant’s Employment for any reason other than those set forth in Paragraph (b) or (c) of
this Section 2, the Option shall, to the extent not previously vested, be automatically canceled without payment of consideration therefor, and the Vested Portion of the Option shall remain exercisable for the period set forth in
Section 3(a). 
 (e) Upon the occurrence of a Transaction, the Option shall, to the extent not then vested, automatically
become fully vested and exercisable. 
 (f) In the event of a Transaction the Committee may either (i) cancel the Option
and make payment in connection with such cancellation equal to the excess, if any, of the Fair Market Value of the Shares subject to such Option over the aggregate Option Price of such Option or (ii) provide for the issuance of substitute
options or other awards that will preserve, as nearly as practicable, the economic terms of the Option, in each case as determined by the Committee in good faith and, in each case, in compliance, to the extent applicable, with Section 409A of
the Code as determined by the Board. 
 3. Exercise of Option. 
 (a) Period of Exercise. 
 (i) In the case of termination of the Participant’s Employment due to the
Participant’s death or Disability, subject to any provisions of the Plan and this Agreement to the contrary, the Participant (or his heir or legatee, if applicable) may exercise all or any part of the Vested Portion of the Option at any time
prior to earliest to occur of (x) the tenth (10th) anniversary of the Date of Grant and (y) the first (1st) anniversary of the date of termination of Employment. 
  

 2 








 (ii) In the case of termination of
the Participant’s Employment for any reason other than the Participant’s death or Disability, subject to any provisions of the Plan and this Agreement to the contrary, the Participant may exercise all or any part of the Vested Portion of
the Option at any time prior to the earliest to occur of (x) the tenth (10th) anniversary of the Date of Grant and (y) 5:00 pm (Eastern
time) on the ninetieth (90th) day following the date of the Participant’s termination of Employment. 
 (b) Method of Exercise. 
 (i) Subject to Section 3(a), the Vested Portion of the Option may be exercised by delivering to the Company at its principal office written notice of intent to so exercise; provided that the Option may be
exercised with respect to whole Shares only. Such notice shall specify the number of Shares for which the Option is being exercised (the “Purchased Shares”) and shall be accompanied by payment in full of the Option Price in cash or by
check or wire transfer; provided, however, that payment of such aggregate exercise price may instead be made, in whole or in part, by (i) the delivery to the Company of a certificate or certificates representing Shares, duly endorsed or
accompanied by a duly executed stock power, which delivery effectively transfers to the Company good and valid title to such Shares, free and clear of any pledge, commitment, lien, claim or other encumbrance (such shares to be valued on the basis of
the aggregate Fair Market Value thereof on the date of such exercise), or (ii) by a reduction in the number of Purchased Shares to be issued upon such exercise having a Fair Market Value on the date of exercise equal to the aggregate Option
Price in respect of the Purchased Shares, provided that the Company is not then prohibited from purchasing or acquiring such Shares. The Participant shall not have any rights to dividends or other rights of a stockholder with respect to Shares
subject to the Option until the Participant has given written notice of exercise of the Option, paid in full for such Shares, satisfied any applicable withholding requirements and, if applicable, satisfied any other conditions imposed by the
Committee or pursuant to the Plan or this Agreement. 
 (ii) Notwithstanding any other provision of the Plan or this Agreement
to the contrary, the Option may not be exercised prior to the completion of any registration or qualification of the Option or the Shares under applicable state and federal securities or other laws, or under any ruling or regulation of any
governmental body or national securities exchange (collectively, the “Legal Requirements”) that the Committee shall in its sole discretion determine to be necessary or advisable, unless an exemption to such registration or qualification is
available and satisfied. The Committee may establish additional procedures as it deems necessary or desirable in connection with the exercise of the Option or the issuance of any Shares upon such exercise to comply with any Legal Requirements. Such
procedures may include but are not limited to the establishment of limited periods during which the Option may be exercised or that following receipt of the notice of exercise, and prior to the completion of the exercise, the Participant will be
required to affirm the exercise of the Option following receipt of any disclosure deemed necessary or desirable by the Committee. 
  

 3 








 (iii) Upon the Committee’s determination that the Option has been validly exercised
as to any of the Shares, and that the Participant has paid in full for such Shares and satisfied any applicable withholding requirements, the Company shall issue certificates in the Participant’s name for such Shares. 
 (iv) In the event of the Participant’s death, the Vested Portion of the Option shall remain exercisable by the Participant’s
executor or administrator, or the person or persons to whom the Participant’s rights under this Agreement shall pass by will or by the laws of descent and distribution as the case may be, to the extent set forth in Section 3(a)(i) (and the
term “Participant” shall be deemed to include such heir or legatee). Any such heir or legatee of the Participant shall take rights herein granted subject to the terms and conditions hereof. 
 (v) In consideration of the grant of this Option, the Participant agrees that, as a condition to the exercise of any option to purchase
Shares (whether this Option or any other option), the Participant shall, with respect to such Shares, have become a party to the Shareholders Agreement. 
 4. No Right to Continued Employment. The granting of the Option evidenced hereby and this Agreement shall impose no obligation on the Company or any other member of the Company Group to continue the Employment
of the Participant and shall not lessen or affect the Company’s or such other member’s right to terminate the Employment of such Participant. 
 5. Legend on Certificates. The certificates representing the Shares purchased upon the exercise of the Option shall be subject to such stop transfer orders and other restrictions as the Committee may deem
advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission and any stock exchange upon which such Shares are listed, and any applicable Federal or state laws, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate reference to such restrictions. 
 6. Transferability. The
Option and the Participant’s other rights and obligations under the Plan and this Agreement may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant without the prior written consent of
the Company otherwise than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any of its
Affiliates; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. No such permitted transfer of the Option to heirs or legatees of the Participant shall be
effective to bind the Company unless the Committee shall have been furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions hereof. During the Participant’s lifetime, the Option is exercisable only by the Participant. 
 7. Withholding. Whenever Shares are to be issued upon exercise of the Option, the Company shall have the right to require the Participant to remit to the Company cash sufficient to satisfy all federal, state and local withholding tax
requirements prior to issuance of the Shares 

  

 4 








 
and the delivery of any certificate or certificates for such Shares. The Participant may satisfy such tax withholding obligation by surrendering to the
Company at the time of exercise Purchased Shares (valued in the manner provided in Section 3(b)(i) above), provided that the Company is not then prohibited from purchasing or acquiring such Shares. 
 8. Securities Laws. Upon the acquisition of any Shares pursuant to the exercise of the Option, the Participant will make or enter into such
written representations, warranties and agreements as the Committee may reasonably request in order to comply with applicable securities laws or with this Agreement. 
 9. Notices. Any notice necessary under this Agreement shall be addressed to the Company in care of its Secretary at the principal executive office of the Company and to the Participant at the address appearing
in the personnel records of the Company for the Participant or to either party hereto at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the
addressee. 
 10. Choice of Law. This agreement shall be governed by and construed in accordance with the laws of the state of New
York without regard to principles of conflicts of laws. 
 11. Option Subject to Plan. By entering into this Agreement, the
Participant agrees and acknowledges that the Participant has received and read a copy of the Plan. The Option is subject to the Plan. The terms and provisions of the Plan, as it may be amended from time to time, are hereby incorporated herein by
reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail. 
 12. Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. 
  

 5 








 IN WITNESS WHEREOF, the parties hereto have executed this Agreement, effective as of the Date of Grant.

  

			
	HAWKER BEECHCRAFT, INC.
		
	By:	 	 
	Name:	 	
	Title:	 	


  

	
	Agreed and acknowledged as of the Date of Grant:
	
	  
	James E. Schuster








 Exhibit D 
 Performance-Vesting Option Agreement 







 TYPE A 
 HAWKER BEECHCRAFT, INC. 
 NONQUALIFIED STOCK OPTION AGREEMENT 
 (Performance-Vesting) 
 THIS AGREEMENT (the
“Agreement”), is made effective as of ________, 2007 (the “Date of Grant”), between Hawker Beechcraft, Inc., a Delaware corporation (the “Company”), and James E. Schuster (the “Participant”). 
 R E C I T A L S: 
 WHEREAS, the Company has adopted the Hawker Beechcraft, Inc. 2007 Stock Option Plan (the “Plan”), which Plan is incorporated herein by reference and made a part of this Agreement. Capitalized terms not
otherwise defined herein shall have the meanings given thereto in the Plan; 
 WHEREAS, the Participant, the Company and Hawker Beechcraft
Corporation (“HBC”) have entered into that certain Employment Agreement dated as of March 26, 2007 (the “Employment Agreement”); and 
 WHEREAS, the Committee has determined that it would be in the best interests of the Company and its shareholders to grant an Option to the Participant pursuant to the Plan and the terms set forth herein. 

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties agree as follows: 
 1. Grant of the Option. The Company hereby grants to the Participant the right and option to purchase, pursuant to Section 6 of the Plan and
the terms and conditions hereinafter set forth, all or any part of an aggregate of 712,103.7 Shares, subject to adjustment as set forth in the Plan. The Option Price shall be $10.00 per share, which the Company and the Participant agree is not less
than the Fair Market Value of the Shares as of the date hereof. The Option is granted pursuant to and is governed in all respects by the Plan. This Option is not intended to constitute an incentive stock option under Section 422 of the Code.

 2. Vesting; Termination of Employment. 
 (a) Subject to the earlier termination or cancellation of the Option as set forth herein or in the Plan, the Option is eligible to vest
and become exercisable with respect to 142,420.7 Shares for each of the Company’s 2007, 2008, 2009 and 2010 calendar years and 142,420.9 for the Company’s 2011 calendar year if the EBITDA target attached hereto as Exhibit A (the
“Target”) for such year is achieved, such vesting to occur, if at all, on the date that the Company’s audited financial statements for the applicable calendar year are presented to the Committee, and only if the Participant’s
Employment did not terminate prior to December thirty-one (31) of the applicable calendar year, and as set forth below: 
 (i) if performance is below the Target for a calendar year, no portion of the Option eligible to vest for that calendar year shall become vested and exercisable; or 







 (ii) if performance for a calendar year meets or exceeds the Target for that calendar
year, the full 20% of the Option eligible to vest for that calendar year shall become vested and exercisable. 
 The Target will be subject to adjustment in
the event of unforeseen events, including but not limited to changes in capitalization, and acquisitions and dispositions. The Committee shall determine in good faith whether the Target for a calendar year has been attained. The portion of the
Option which has become vested and exercisable as described herein is hereinafter referred to as the “Vested Portion.” 
 (b) If the Participant’s Employment is terminated for Cause, the Option shall, whether or not then vested, be automatically canceled without payment of consideration therefor. 
 (c) If the Participant’s Employment is terminated without Cause or by the Participant for Good Reason (as defined in the Employment
Agreement), the Participant shall become vested in an additional 20% of the Shares originally subject to the Option but only if the Target is met or exceeded for the year of termination. The Option shall, to the extent not previously vested or
eligible to become vested as described in this Section 2(c), be automatically canceled without payment of consideration therefor, and the Vested Portion of the Option shall remain exercisable for the applicable period set forth in
Section 3(a). 
 (d) If the Participant’s Employment is terminated due to the Participant’s death or
Disability, or by reason of the Company or HBC providing notice to the Participant that it is not renewing the term of the Employment Agreement, the Participant shall become vested in a number of Shares equal to 20% of the Shares originally subject
to the Option multiplied by a fraction, the numerator of which is the number of days elapsed in the applicable calendar year of termination prior to such termination of Employment and the denominator of which is 365, but only if the Target is met or
exceeded for the year of termination. The Option shall, to the extent not previously vested or eligible to become vested as described in this Section 2(d), be automatically canceled without payment of consideration therefor, and the Vested
Portion of the Option shall remain exercisable for the applicable period set forth in Section 3(a). 
 (e) Upon
termination of the Participant’s Employment for any reason other than those set forth in Paragraph (b), (c) or (d) of this Section 2, the Option shall, to the extent not previously vested, be automatically canceled without
payment of consideration therefor, and the Vested Portion of the Option shall remain exercisable for the period set forth in Section 3(a). 
 (f) If the Participant is employed by a member of the Company Group on the date of consummation of a Liquidity Event, all Shares originally subject to the Option (including those previously eligible for vesting under
Section 2(a) which did not vest) shall vest and become exercisable if the Existing Owner Group achieves a 30% Internal Rate of Return in connection with the Liquidity Event. 
 (g) In the event of a Transaction the Committee may either (i) cancel the Option and make payment in connection with such
cancellation equal to the excess, if any, of the Fair Market Value of the Shares subject to such Option over the aggregate Option Price of such Option or (ii) provide for the issuance of substitute options or other awards that will preserve, as


  

 2 








 
nearly as practicable, the economic terms of the Option, in each case as determined by the Committee in good faith and, in each case, in compliance, to the
extent applicable, with Section 409A of the Code as determined by the Board. 
 3. Exercise of Option. 
 (a) Period of Exercise. 
 (i) In the case of termination of the Participant’s Employment due to the
Participant’s death or Disability, subject to any provisions of the Plan and this Agreement to the contrary, the Participant (or his heir or legatee, if applicable) may exercise all or any part of the Vested Portion of the Option at any time
prior to earliest to occur of (x) the tenth (10th) anniversary of the date of grant and (y) the first (1st) anniversary of the date of termination of Employment. 
 (ii) In the case of termination of the Participant’s Employment by the Company
or HBC without Cause or by the Participant for Good Reason, or by reason of the Company or HBC providing notice to the Participant that it is not renewing the term of the Employment Agreement, subject to any provisions of the Plan and this Agreement
to the contrary, the Participant may exercise all or any part of the Vested Portion of the Option at any time prior to the earliest to occur of (x) the tenth (10th) anniversary of the Date of Grant and (y) 5:00 pm (Eastern time) on the ninetieth (90th) day following the
date the Participant is notified in writing by the Company whether the Target for the year of termination has been attained. 
 (iii) In the case of termination of the Participant’s Employment for any
reason other than those set forth in Sections 3(a)(i) or 3(a)(ii), subject to any provisions of the Plan and this Agreement to the contrary, the Participant may exercise all or any part of the Vested Portion of the Option at any time prior to the
earliest to occur of (x) the tenth (10th) anniversary of the Date of Grant and (y) 5:00 pm (Eastern time) on the ninetieth (90th) day following the date of the Participant’s termination of Employment. 
 (b) Method of Exercise. 
 (i) Subject to Section 3(a), the Vested Portion of the Option may be exercised by delivering to the Company at its principal office written notice of intent to so exercise; provided that the Option may be
exercised with respect to whole Shares only. Such notice shall specify the number of Shares for which the Option is being exercised (the “Purchased Shares”) and shall be accompanied by payment in full of the Option Price in cash or by
check or wire transfer; provided, however, that payment of such aggregate exercise price may instead be made, in whole or in part, by (i) the delivery to the Company of a certificate or certificates representing Shares, duly endorsed or
accompanied by a duly executed stock power, which delivery effectively transfers to the Company good and valid title to such Shares, free and clear of any pledge, commitment, lien, claim or other encumbrance (such shares to be valued on the basis of
the aggregate Fair Market Value thereof on the date of such exercise), provided that the Company is not then prohibited from purchasing or acquiring such Shares or (ii) by a reduction in the number of Purchased Shares to be issued upon such
exercise having a Fair Market Value on the date of exercise equal to the aggregate Option Price in respect of the 

  

 3 








 
Purchased Shares, provided that the Company is not then prohibited from purchasing or acquiring such Shares. The Participant shall not have any rights to
dividends or other rights of a stockholder with respect to Shares subject to the Option until the Participant has given written notice of exercise of the Option, paid in full for such Shares, satisfied any applicable withholding requirements and, if
applicable, satisfied any other conditions imposed by the Committee or pursuant to the Plan or this Agreement. 
 (ii)
Notwithstanding any other provision of the Plan or this Agreement to the contrary, the Option may not be exercised prior to the completion of any registration or qualification of the Option or the Shares under applicable state and federal securities
or other laws, or under any ruling or regulation of any governmental body or national securities exchange (collectively, the “Legal Requirements”) that the Committee shall in its sole discretion determine to be necessary or advisable,
unless an exemption to such registration or qualification is available and satisfied. The Committee may establish additional procedures as it deems necessary or desirable in connection with the exercise of the Option or the issuance of any Shares
upon such exercise to comply with any Legal Requirements. Such procedures may include but are not limited to the establishment of limited periods during which the Option may be exercised or that following receipt of the notice of exercise, and prior
to the completion of the exercise, the Participant will be required to affirm the exercise of the Option following receipt of any disclosure deemed necessary or desirable by the Committee. 
 (iii) Upon the Committee’s determination that the Option has been validly exercised as to any of the Shares, and that the Participant
has paid in full for such Shares and satisfied any applicable withholding requirements, the Company shall issue certificates in the Participant’s name for such Shares. 
 (iv) In the event of the Participant’s death, the Vested Portion of the Option shall remain exercisable by the Participant’s
executor or administrator, or the person or persons to whom the Participant’s rights under this Agreement shall pass by will or by the laws of descent and distribution as the case may be, to the extent set forth in Section 3(a)(i) (and the
term “Participant” shall be deemed to include such heir or legatee). Any such heir or legatee of the Participant shall take rights herein granted subject to the terms and conditions hereof. 
 (v) In consideration of the grant of this Option, the Participant agrees that, as a condition to the exercise of any option to purchase
Shares (whether this Option or any other option), the Participant shall, with respect to such Shares, have become a party to the Shareholders Agreement. 
 4. No Right to Continued Employment. The granting of the Option evidenced hereby and this Agreement shall impose no obligation on the Company or any other member of the Company Group to continue the Employment
of the Participant and shall not lessen or affect the Company’s or such other member’s right to terminate the Employment of such Participant. 
 5. Legend on Certificates. The certificates representing the Shares purchased upon the exercise of the Option shall be subject to such stop transfer orders and other restrictions as the Committee may deem
advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission and any stock exchange upon which 

  

 4 








 
such Shares are listed, and any applicable Federal or state laws, and the Committee may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions. 
 6. Transferability. The Option and the Participant’s other rights and obligations
under the Plan and this Agreement may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant without the prior written consent of the Company otherwise than by will or by the laws of descent and
distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any of its Affiliates; provided that the designation of a beneficiary shall not
constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. No such permitted transfer of the Option to heirs or legatees of the Participant shall be effective to bind the Company unless the Committee shall have been
furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions hereof. During the
Participant’s lifetime, the Option is exercisable only by the Participant. 
 7. Withholding. Whenever Shares are to be issued
upon exercise of the Option, the Company shall have the right to require the Participant to remit to the Company cash sufficient to satisfy all federal, state and local withholding tax requirements prior to issuance of the Shares and the delivery of
any certificate or certificates for such Shares. The Participant may satisfy such tax withholding obligation by surrendering to the Company at the time of exercise Purchased Shares (valued in the manner provided in Section 3(b)(i) above),
provided that the Company is not then prohibited from purchasing or acquiring such Shares. 
 8. Securities Laws. Upon the acquisition
of any Shares pursuant to the exercise of the Option, the Participant will make or enter into such written representations, warranties and agreements as the Committee may reasonably request in order to comply with applicable securities laws or with
this Agreement. 
 9. Notices. Any notice necessary under this Agreement shall be addressed to the Company in care of its Secretary at
the principal executive office of the Company and to the Participant at the address appearing in the personnel records of the Company for the Participant or to either party hereto at such other address as either party may hereafter designate in
writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee. 
 10. Choice of Law. This
agreement shall be governed by and construed in accordance with the laws of the state of New York without regard to principles of conflicts of laws. 
 11. Option Subject to Plan. By entering into this Agreement, the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan. The Option is subject to the Plan. The terms
and provisions of the Plan, as it may be amended from time to time, are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. 
  

 5 








 12. Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 
  

 6 








 IN WITNESS WHEREOF, the parties hereto have executed this Agreement, effective as of the Date of Grant.

  

			
	HAWKER BEECHCRAFT, INC.
		
	By:	 	 
	Name:	 	
	Title:	 	


  

	
	Agreed and acknowledged as of the Date of Grant:
	
	  
	James E. Schuster








 Exhibit A 
 Annual Target: 
  

						
	Calendar
Year	  	EBITDA
Target	  	 Shares Eligible
 to Vest

	2007	  	$	417,000,000	  	142,420.7
	2008	  	$	553,000,000	  	142,420.7
	2009	  	$	616,550,000	  	142,420.7
	2010	  	$	664,050,000	  	142,420.7
	2011	  	$	661,200,000	  	142,420.9








 Exhibit E 
 Performance-Vesting Option Agreement 







 TYPE B 
 HAWKER BEECHCRAFT, INC. 
 NONQUALIFIED STOCK OPTION AGREEMENT 
 (Performance-Vesting) 
 THIS AGREEMENT (the
“Agreement”), is made effective as of March 26, 2007 (the “Date of Grant”), between Hawker Beechcraft, Inc., a Delaware corporation (the “Company”), and James E. Schuster (the “Participant”). 

R E C I T A L S: 
 WHEREAS, the Company has adopted the Hawker Beechcraft, Inc. 2007 Stock Option Plan (the “Plan”), which Plan is incorporated herein by reference and made a part of this Agreement. Capitalized terms not
otherwise defined herein shall have the meanings given thereto in the Plan; 
 WHEREAS, the Participant, the Company and Hawker Beechcraft
Corporation (“HBC”) have entered into that certain Employment Agreement dated as of March 26, 2007 (the “Employment Agreement”); and 
 WHEREAS, the Committee has determined that it would be in the best interests of the Company and its shareholders to grant an Option to the Participant pursuant to the Plan and the terms set forth herein. 

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties agree as follows: 
 1. Grant of the Option. The Company hereby grants to the Participant the right and option to purchase, pursuant to Section 6 of the Plan and
the terms and conditions hereinafter set forth, all or any part of an aggregate of 712,103.7 Shares, subject to adjustment as set forth in the Plan. The Option Price shall be $10.00 per share, which the Company and the Participant agree is not less
than the Fair Market Value of the Shares as of the date hereof. The Option is granted pursuant to and is governed in all respects by the Plan. This Option is not intended to constitute an incentive stock option under Section 422 of the Code.

 2. Vesting; Termination of Employment. 
 (a) Subject to the earlier termination or cancellation of the Option as set forth herein or in the Plan, the Option is eligible to vest
and become exercisable with respect to 142,420.7 Shares for each of the Company’s 2007, 2008, 2009 and 2010 calendar years and 142,420.9 for the Company’s 2011 calendar year if the EBITDA target attached hereto as Exhibit A (the
“Target”) for such year is achieved, such vesting to occur, if at all, on the date that the Company’s audited financial statements for the applicable calendar year are presented to the Committee, and only if the Participant’s
Employment did not terminate prior to December thirty-one (31) of the applicable calendar year, and as set forth below: 
 (i) if performance is below the Target for a calendar year, no portion of the Option eligible to vest for that calendar year shall become vested and exercisable; or 







 (ii) if performance for a calendar year meets or exceeds the Target for that calendar
year, the full 20% of the Option eligible to vest for that calendar year shall become vested and exercisable. 
 The Target will be subject to adjustment in
the event of unforeseen events, including but not limited to changes in capitalization, and acquisitions and dispositions. The Committee shall determine in good faith whether the Target for a calendar year has been attained. The portion of the
Option which has become vested and exercisable as described herein is hereinafter referred to as the “Vested Portion.” 
 (b) If the Participant’s Employment is terminated for Cause, the Option shall, whether or not then vested, be automatically canceled without payment of consideration therefor. 
 (c) If the Participant’s Employment is terminated without Cause or by the Participant for Good Reason (as defined in the Employment
Agreement), the Participant shall become vested in an additional 20% of the Shares originally subject to the Option but only if the Target is met or exceeded for the year of termination. The Option shall, to the extent not previously vested or
eligible to become vested as described in this Section 2(c), be automatically canceled without payment of consideration therefor, and the Vested Portion of the Option shall remain exercisable for the applicable period set forth in
Section 3(a). 
 (d) If the Participant’s Employment is terminated due to the Participant’s death or
Disability, or by reason of the Company or HBC providing notice to the Participant that it is not renewing the term of the Employment Agreement, the Participant shall become vested in a number of Shares equal to 20% of the Shares originally subject
to the Option multiplied by a fraction, the numerator of which is the number of days elapsed in the applicable calendar year of termination prior to such termination of Employment and the denominator of which is 365, but only if the Target is met or
exceeded for the year of termination. The Option shall, to the extent not previously vested or eligible to become vested as described in this Section 2(d), be automatically canceled without payment of consideration therefor, and the Vested
Portion of the Option shall remain exercisable for the applicable period set forth in Section 3(a). 
 (e) Upon
termination of the Participant’s Employment for any reason other than those set forth in Paragraph (b), (c) or (d) of this Section 2, the Option shall, to the extent not previously vested, be automatically canceled without
payment of consideration therefor, and the Vested Portion of the Option shall remain exercisable for the period set forth in Section 3(a). 
 (f) If the Participant is employed by a member of the Company Group on the date of consummation of a Liquidity Event, all Shares originally subject to the Option (including those previously eligible for vesting under
Section 2(a) which did not vest) shall vest and become exercisable if the Existing Owner Group achieves a 25% Internal Rate of Return in connection with the Liquidity Event. 
 (g) In the event of a Transaction the Committee may either (i) cancel the Option and make payment in connection with such
cancellation equal to the excess, if any, of the Fair Market Value of the Shares subject to such Option over the aggregate Option Price of such Option or (ii) provide for the issuance of substitute options or other awards that will preserve, as


  

 2 








 
nearly as practicable, the economic terms of the Option, in each case as determined by the Committee in good faith and, in each case, in compliance, to the
extent applicable, with Section 409A of the Code as determined by the Board. 
 3. Exercise of Option. 
 (a) Period of Exercise. 
 (i) In the case of termination of the Participant’s Employment due to the
Participant’s death or Disability, subject to any provisions of the Plan and this Agreement to the contrary, the Participant (or his heir or legatee, if applicable) may exercise all or any part of the Vested Portion of the Option at any time
prior to earliest to occur of (x) the tenth (10th) anniversary of the date of grant and (y) the first (1st) anniversary of the date of termination of Employment. 
 (ii) In the case of termination of the Participant’s Employment by the Company
or HBC without Cause or by the Participant for Good Reason, or by reason of the Company or HBC providing notice to the Participant that it is not renewing the term of the Employment Agreement, subject to any provisions of the Plan and this Agreement
to the contrary, the Participant may exercise all or any part of the Vested Portion of the Option at any time prior to the earliest to occur of (x) the tenth (10th) anniversary of the Date of Grant and (y) 5:00 pm (Eastern time) on the ninetieth (90th) day following the
date the Participant is notified in writing by the Company whether the Target for the year of termination has been attained. 
 (iii) In the case of termination of the Participant’s Employment for any
reason other than those set forth in Sections 3(a)(i) or 3(a)(ii), subject to any provisions of the Plan and this Agreement to the contrary, the Participant may exercise all or any part of the Vested Portion of the Option at any time prior to the
earliest to occur of (x) the tenth (10th) anniversary of the Date of Grant and (y) 5:00 pm (Eastern time) on the ninetieth (90th) day
following the date of the Participant’s termination of Employment. 
 (b) Method of Exercise. 

(i) Subject to Section 3(a), the Vested Portion of the Option may be exercised by delivering to the Company at its principal
office written notice of intent to so exercise; provided that the Option may be exercised with respect to whole Shares only. Such notice shall specify the number of Shares for which the Option is being exercised (the “Purchased
Shares”) and shall be accompanied by payment in full of the Option Price in cash or by check or wire transfer; provided, however, that payment of such aggregate exercise price may instead be made, in whole or in part, by (i) the delivery
to the Company of a certificate or certificates representing Shares, duly endorsed or accompanied by a duly executed stock power, which delivery effectively transfers to the Company good and valid title to such Shares, free and clear of any pledge,
commitment, lien, claim or other encumbrance (such shares to be valued on the basis of the aggregate Fair Market Value thereof on the date of such exercise), provided that the Company is not then prohibited from purchasing or acquiring such Shares
or (ii) by a reduction in the number of Purchased Shares to be issued upon such exercise having a Fair Market Value on the date of exercise equal to the aggregate Option Price in respect of the 

  

 3 








 
Purchased Shares, provided that the Company is not then prohibited from purchasing or acquiring such Shares. The Participant shall not have any rights to
dividends or other rights of a stockholder with respect to Shares subject to the Option until the Participant has given written notice of exercise of the Option, paid in full for such Shares, satisfied any applicable withholding requirements and, if
applicable, satisfied any other conditions imposed by the Committee or pursuant to the Plan or this Agreement. 
 (ii)
Notwithstanding any other provision of the Plan or this Agreement to the contrary, the Option may not be exercised prior to the completion of any registration or qualification of the Option or the Shares under applicable state and federal securities
or other laws, or under any ruling or regulation of any governmental body or national securities exchange (collectively, the “Legal Requirements”) that the Committee shall in its sole discretion determine to be necessary or advisable,
unless an exemption to such registration or qualification is available and satisfied. The Committee may establish additional procedures as it deems necessary or desirable in connection with the exercise of the Option or the issuance of any Shares
upon such exercise to comply with any Legal Requirements. Such procedures may include but are not limited to the establishment of limited periods during which the Option may be exercised or that following receipt of the notice of exercise, and prior
to the completion of the exercise, the Participant will be required to affirm the exercise of the Option following receipt of any disclosure deemed necessary or desirable by the Committee. 
 (iii) Upon the Committee’s determination that the Option has been validly exercised as to any of the Shares, and that the Participant
has paid in full for such Shares and satisfied any applicable withholding requirements, the Company shall issue certificates in the Participant’s name for such Shares. 
 (iv) In the event of the Participant’s death, the Vested Portion of the Option shall remain exercisable by the Participant’s
executor or administrator, or the person or persons to whom the Participant’s rights under this Agreement shall pass by will or by the laws of descent and distribution as the case may be, to the extent set forth in Section 3(a)(i) (and the
term “Participant” shall be deemed to include such heir or legatee). Any such heir or legatee of the Participant shall take rights herein granted subject to the terms and conditions hereof. 
 (v) In consideration of the grant of this Option, the Participant agrees that, as a condition to the exercise of any option to purchase
Shares (whether this Option or any other option), the Participant shall, with respect to such Shares, have become a party to the Shareholders Agreement. 
 4. No Right to Continued Employment. The granting of the Option evidenced hereby and this Agreement shall impose no obligation on the Company or any other member of the Company Group to continue the Employment
of the Participant and shall not lessen or affect the Company’s or such other member’s right to terminate the Employment of such Participant. 
 5. Legend on Certificates. The certificates representing the Shares purchased upon the exercise of the Option shall be subject to such stop transfer orders and other restrictions as the Committee may deem
advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission and any stock exchange upon which 

  

 4 








 
such Shares are listed, and any applicable Federal or state laws, and the Committee may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions. 
 6. Transferability. The Option and the Participant’s other rights and obligations
under the Plan and this Agreement may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant without the prior written consent of the Company otherwise than by will or by the laws of descent and
distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any of its Affiliates; provided that the designation of a beneficiary shall not
constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. No such permitted transfer of the Option to heirs or legatees of the Participant shall be effective to bind the Company unless the Committee shall have been
furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions hereof. During the
Participant’s lifetime, the Option is exercisable only by the Participant. 
 7. Withholding. Whenever Shares are to be issued
upon exercise of the Option, the Company shall have the right to require the Participant to remit to the Company cash sufficient to satisfy all federal, state and local withholding tax requirements prior to issuance of the Shares and the delivery of
any certificate or certificates for such Shares. The Participant may satisfy such tax withholding obligation by surrendering to the Company at the time of exercise Purchased Shares (valued in the manner provided in Section 3(b)(i) above),
provided that the Company is not then prohibited from purchasing or acquiring such Shares. 
 8. Securities Laws. Upon the acquisition
of any Shares pursuant to the exercise of the Option, the Participant will make or enter into such written representations, warranties and agreements as the Committee may reasonably request in order to comply with applicable securities laws or with
this Agreement. 
 9. Notices. Any notice necessary under this Agreement shall be addressed to the Company in care of its Secretary at
the principal executive office of the Company and to the Participant at the address appearing in the personnel records of the Company for the Participant or to either party hereto at such other address as either party may hereafter designate in
writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee. 
 10. Choice of Law. This
agreement shall be governed by and construed in accordance with the laws of the state of New York without regard to principles of conflicts of laws. 
 11. Option Subject to Plan. By entering into this Agreement, the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan. The Option is subject to the Plan. The terms
and provisions of the Plan, as it may be amended from time to time, are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. 
  

 5 








 12. Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 
  

 6 








 IN WITNESS WHEREOF, the parties hereto have executed this Agreement, effective as of the Date of Grant.

  

			
	HAWKER BEECHCRAFT, INC.
		
	By:	 	 
	Name:	 	
	Title:	 	


  

	
	Agreed and acknowledged as of the Date of Grant:
	
	  
	James E. Schuster








 Exhibit A 
 Annual Target: 
  

						
	Calendar
Year	  	EBITDA
Target	  	Shares Eligible
to Vest
	2007	  	$	417,000,000	  	142,420.7
	2008	  	$	553,000,000	  	142,420.7
	2009	  	$	616,550,000	  	142,420.7
	2010	  	$	664,050,000	  	142,420.7
	2011	  	$	661,200,000	  	142,420.9








 Exhibit F 
 Release 
 1. In consideration of the payments and benefits to be made under the Employment Agreement, dated
as of March 26, 2007 (the “Employment Agreement”), to which James E. Schuster (the “Executive”) and Hawker Beechcraft Corporation (the “Company”) (each of the Executive and the Company, a
“Party” and collectively, the “Parties”) are parties, the sufficiency of which the Executive acknowledges, the Executive, with the intention of binding himself and his heirs, executors, administrators and assigns,
does hereby release, remise, acquit and forever discharge the Company and each of its subsidiaries and affiliates (the “Company Affiliated Group”), their present and former officers, directors, executives, shareholders, agents,
attorneys, employees and employee benefit plans (and the fiduciaries thereof), and the successors, predecessors and assigns of each of the foregoing (collectively, the “Company Released Parties”), of and from any and all claims,
actions, causes of action, complaints, charges, demands, rights, damages, debts, sums of money, accounts, financial obligations, suits, expenses, attorneys’ fees and liabilities of whatever kind or nature in law, equity or otherwise, whether
accrued, absolute, contingent, unliquidated or otherwise and whether now known or unknown, suspected or unsuspected, which the Executive, individually or as a member of a class, now has, owns or holds, or has at any time heretofore had, owned or
held, arising on or prior to the date hereof, against any Company Released Party that arises out of, or relates to, the Employment Agreement, the Executive’s employment with the Company or any of its subsidiaries and affiliates, or any
termination of such employment, including claims (i) for severance or vacation benefits, unpaid wages, salary or incentive payments, (ii) for breach of contract, wrongful discharge, impairment of economic opportunity, defamation,
intentional infliction of emotional harm or other tort, (iii) for any violation of applicable state and local labor and employment laws (including, without limitation, all laws concerning unlawful and unfair labor and employment practices) and
(iv) for employment discrimination under any applicable federal, state or local statute, provision, order or regulation, and including, without limitation, any claim under Title VII of the Civil Rights Act of 1964 (“Title
VII”), the Civil Rights Act of 1988, the Fair Labor Standards Act, the Americans with Disabilities Act (“ADA”), the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the Age
Discrimination in Employment Act (“ADEA”), and any similar or analogous state statute, excepting only: 
  

	 	(A)	rights of the Executive arising under, or preserved by, this Release or Section 3 of the Employment Agreement; 

  

	 	(B)	the right of the Executive to receive COBRA continuation coverage in accordance with applicable law; 

  

	 	(C)	claims for benefits under any health, disability, retirement, life insurance or other, similar employee benefit plan (within the meaning of Section 3(3) of ERISA) of the
Company Affiliated Group; and 









	 	(D)	rights to indemnification the Executive has or may have under the by-laws or certificate of incorporation of any member of the Company Affiliated Group or as an insured under any
director’s and officer’s liability insurance policy now or previously in force. 

 2. The Executive acknowledges and
agrees that the release of claims set forth in this Release is not to be construed in any way as an admission of any liability whatsoever by any Company Released Party, any such liability being expressly denied. 
 3. The release of claims set forth in this Release applies to any relief no matter how called, including, without limitation, wages, back pay, front pay,
compensatory damages, liquidated damages, punitive damages, damages for pain or suffering, costs, and attorneys’ fees and expenses. 
 4. The Executive specifically acknowledges that his acceptance of the terms of the release of claims set forth in this Release is, among other things, a specific waiver of his rights, claims and causes of action under Title VII, ADEA, ADA
and any state or local law or regulation in respect of discrimination of any kind; provided, however, that nothing herein shall be deemed, nor does anything contained herein purport, to be a waiver of any right or claim or cause of
action which by law the Executive is not permitted to waive. 
 5. As to rights, claims and causes of action arising under the ADEA, the
Executive acknowledges that he has been given but not utilized a period of twenty-one (21) days to consider whether to execute this Release. If the Executive accepts the terms hereof and executes this Release, he may thereafter, for a period of
seven (7) days following (and not including) the date of execution, revoke this Release as it relates to the release of claims arising under the ADEA. If no such revocation occurs, this Release shall become irrevocable in its entirety, and
binding and enforceable against the Executive, on the day next following the day on which the foregoing seven-day period has elapsed. If such a revocation occurs, the Executive shall irrevocably forfeit any right to payment of the Severance Payments
(as defined in the Employment Agreement), but the remainder of the Employment Agreement shall continue in full force. 
 6. Other than as to
rights, claims and causes of action arising under the ADEA, the release of claims set forth in this Release shall be immediately effective upon execution by the Executive. 
 7. The Executive acknowledges and agrees that he has not, with respect to any transaction or state of facts existing prior to the date hereof, filed any
complaints, charges or lawsuits against any Company Released Party with any governmental agency, court or tribunal. 
 8. The Executive
acknowledges that he has been advised to seek, and has had the opportunity to seek, the advice and assistance of an attorney with regard to the release of claims set forth in this Release, and has been given a sufficient period within which to
consider the release of claims set forth in this Release. 







 9. The Executive acknowledges that the release of claims set forth in this Release relates only to claims
which exist as of the date of this Release. 
 10. The Executive acknowledges that the Severance Payments he is receiving in connection with
the release of claims set forth in this Release and his obligations under this Release are in addition to anything of value to which the Executive is entitled from the Company. 
 11. Each provision hereof is severable from this Release, and if one or more provisions hereof are declared invalid, the remaining provisions shall
nevertheless remain in full force and effect. If any provision of this Release is so broad, in scope, or duration or otherwise, as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable. 
 12. This Release constitutes the complete agreement of the Parties in respect of the subject matter hereof and shall supersede all prior agreements
between the Parties in respect of the subject matter hereof except to the extent set forth herein. 
 13. The failure to enforce at any time
any of the provisions of this Release or to require at any time performance by another party of any of the provisions hereof shall in no way be construed to be a waiver of such provisions or to affect the validity of this Release, or any part
hereof, or the right of any party thereafter to enforce each and every such provision in accordance with the terms of this Release. 
 14.
This Release 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 instrument. Signatures delivered by facsimile shall be deemed effective for all
purposes. 
 15. This Release shall be binding upon any and all successors and assigns of the Executive and the Company. 
 16. Except for issues or matters as to which federal law is applicable, this Release shall be governed by and construed and enforced in accordance with
the laws of the State of New York without giving effect to the conflicts of law principles thereof. 
 [signature page follows] 







 IN WITNESS WHEREOF, this Release has been signed by or on behalf of each of the Parties, all as of
                            . 
  

			
	HAWKER BEECHCRAFT CORPORATION
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	  

	James E. Schuster