exv10w7






EXHIBIT (10.7)




FIRST AMENDMENT TO KEITH HOWE EMPLOYMENT AGREEMENT




          THIS FIRST AMENDMENT, dated as of December 31, 2008 (the “Amendment Effective Date”),
is entered into by and between Vought Aircraft Industries, Inc., a Delaware corporation (the
“Company”) and Keith Howe (the “Executive”).



RECITALS




          WHEREAS, the Company and the Executive previously entered into an employment agreement, dated
as of January 4, 2007, (the “Employment Agreement”), that sets forth the terms and
conditions of the Executive’s employment with the Company;



          WHEREAS, the Company and Executive mutually desire to amend the Employment Agreement to take
into consideration certain requirements imposed by Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”); and



          WHEREAS, Section 15 of the Employment Agreement provides that the Employment Agreement may be
amended pursuant to a written agreement between the Company and the Executive.



          NOW, THEREFORE, the Company and the Executive hereby agree that, effective as of the Amendment
Effective Date, for good and valuable consideration, the receipt of which is hereby acknowledged,
the Employment Agreement is hereby amended as follows:



          1. The following sentence is hereby added to the end of Section 2(b) of the Employment
Agreement:




“Any annual bonus that becomes payable pursuant to this Section 2(b) shall be paid
no later than March 15th of the year following the year in which such
annual bonus is earned. Provided, however, that if the Board shall determine that
it is administratively impracticable, which may include inability of the Company to
gain certification of its financial statements, to make such annual bonus payment by
March 15th, any such payment shall be made as soon as reasonably
practicable after such period and in no event later than December 31st of
the year following the year the year for which such annual bonus was earned.”



          2. Section 2(i) of the Employment Agreement is hereby deleted and replaced in its
entirety with the following:




	 	“(i)  	 	Expenses. During the Term, the Company shall reimburse the Executive
for all reasonable travel and other business expenses incurred by him in the
performance of his duties to the Company in accordance with the Company’s expense
reimbursement policy. To the extent that any reimbursements, including without
limitation any reimbursements pursuant to Section 2(c) above, Section 2(g) above and/or
pursuant to this Section 2(i), are determined to constitute taxable compensation to the
Executive, then reimbursement requests with respect to such expenses must be timely
submitted by the Executive and, if timely submitted, such expenses shall be reimbursed
no later than December 31st of the year following the year in which the
expense was incurred. In no event shall the Executive be entitled to any such
reimbursement payments after December 31st of the year following the year in
which the expense was incurred. The amount of any such expenses reimbursed in one year
shall not affect the amount eligible for reimbursement in any subsequent year, except
for the reimbursement of medical expenses referred to in Section 105(b) of the Internal
Revenue Code of 1986, as amended (the “Code”) and the Executive’s right to
reimbursement of any such expenses shall not be subject to liquidation or exchange for
any other benefit.”




 









 











     3. Section 2(k) of the Employment Agreement is hereby deleted and replaced in its
entirety with the following:




	 	“(k)  	 	Indemnification. The Executive shall be indemnified and held harmless
by the Company to the fullest extent authorized by the Company’s certificate of
incorporation or bylaws against all costs, expenses, liabilities and losses reasonably
incurred or suffered by the Executive with respect to any bona fide claim against the
Executive or the Company, where such claim is based on actions taken by the Executive
in good faith and in his capacity as an officer of the Company. Notwithstanding the
foregoing, no amounts shall be paid or advanced in accordance with this Section 2(k) to
the extent that any such amounts would fail to be exempt from the application of
Section 409A (as defined below) in accordance with Treasury Regulation
1.409A-1(b)(10).”





     4. Section 4(b) of the Employment Agreement is hereby amended and restated in its
entirety to read as follows:




	 	“(b) 	 	Termination without Cause or resignation for Good Reason. If, during
the Term, the Executive incurs a “separation from service” from the Company (within the
meaning of Section 409A(a)(2)(A)(i) of the Code and Treasury Regulation Section
1.409A-1(h)) (a “Separation from Service”) by reason of a termination of the
Executive’s employment without Cause pursuant to Section 3(a)(iv) or for Good
Reason pursuant to Section 3(a)(v), the Company shall, subject to the Executive
signing and not revoking, within thirty (30) days following the Separation from
Service, a release of claims in substantially the form attached hereto as Exhibit
A:






	 	(i)	 	pay to the Executive, in equal installments over the twelve
(12) month period following the Date of Termination in accordance with the
Company’s regular payroll practice, an amount equal to the Annual Base Salary
that the Executive would have been entitled to receive if the Executive had
continued his employment hereunder for a period of twelve (12) months following
the Date of Termination, which amounts shall be payable commencing on the
Company’s first payroll date occurring on or after the 30th day
following the Separation from Service (the “First Payroll Date”), and
any amounts that would otherwise have been paid pursuant to this Section
4(b)(i) prior to such payroll date shall be paid in a lump-sum on the First
Payroll Date; and
	 
	 	(ii)	 	pay to the Executive a lump-sum amount equal, as determined by
the Company, to the total aggregate annual premium costs for group medical,
dental and vision benefit coverage for the Executive and the Executive’s spouse
and dependents, in each case, as in effect with respect to each such individual
immediately prior to such Separation from Service, which payment shall be made
on the First Payroll Date and which payment may be applied by the Executive, in
his discretion, to the purchase of comparable coverage. For the avoidance of
doubt, the payment described in this Section 4(b)(ii) shall be subject to
withholding of any federal, state, local or foreign withholding or other taxes
or charges which the Company is required to withhold.”




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     5. Section 4(d) of the Employment Agreement is hereby deleted and replaced in its
entirety with the following:




	 	“(d) 	 	409A. Notwithstanding anything to the contrary in this Section
4, no payments in this Section 4 will be paid during the six-month period
following the Executive’s Separation from Service unless the Company determines, in its
good faith judgment, that paying such amounts at the time or times indicated in this
Section would not cause the Executive to incur an additional tax under Section 409A (in
which case such amounts shall be paid at the time or times indicated in this Section).
If the payment of any amounts are delayed as a result of the previous sentence, on the
first day following the end of the six-month period (or such earlier date upon which
such amount can be paid under Section 409A without being subject to such additional
taxes, including upon the Executive’s death), the Company will pay the Executive a
lump-sum amount equal to the cumulative amount that would have otherwise been
previously paid to the Executive under this Agreement.”





     6. Clause (D) of Section 9(e) of the Employment Agreement is hereby deleted and
replaced in its entirety, and clauses “(E)” and “(F)” in the last paragraph of Section
9(e) are hereby renumbered as clauses “(D)” and “(E)”, respectively.



     7. Section 21 of the Employment Agreement is hereby deleted and replaced in its
entirety with the following:



     “21. Section 409A. To the extent that the Company reasonably determines that any
compensation or benefits payable under this Agreement are subject to Section 409A, this Agreement
shall incorporate the terms and conditions required by Section 409A reasonably determined by the
Company and the Executive. To the extent applicable, this Agreement shall be interpreted in
accordance with Section 409A of the Code and Department of Treasury regulations and other
interpretative guidance issued thereunder, including without limitation any such regulations or
other such guidance that may be issued after the Effective Date (“Section 409A”).
Notwithstanding any provision of this Agreement to the contrary, in the event that following the
Effective Date the Company reasonably determines that any compensation or benefits payable under
this Agreement may be subject to Section 409A, the Company and the Executive shall work together to
adopt such amendments to this Agreement or adopt other policies or procedures (including
amendments, policies and procedures with retroactive effective), or take any other commercially
reasonable actions necessary or appropriate to (a) preserve the intended tax treatment of the
compensation and benefits payable hereunder, to preserve the economic benefits of such compensation
and benefits, and/or to avoid less favorable accounting or tax consequences for the Company and/or
(ii) to exempt the compensation and benefits payable hereunder from Section 409A or to comply with
the requirements of Section 409A and thereby avoid the application of penalty taxes thereunder;
provided, however, that this Section 21 does not, and shall not be construed so as to, create any
obligation on the part of the Company to adopt any such amendments, policies or procedures or to
take any other such actions or to indemnify the Executive for any failure to do so.”



     9. Except as expressly modified by the terms of this First Amendment to the Employment
Agreement, the terms and conditions of the Employment Agreement shall remain in full force and
effect.



[Signature page follows]





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          IN WITNESS WHEREOF, the Company and the Executive agree to the terms of this [First] Amendment
to the Employment Agreement, effective as of the Effective Date.



	 	 	 	 	 
	 	VOUGHT AIRCRAFT INDUSTRIES, INC.

 	 
	 	By:  	/s/ THOMAS F. STUBBINS
 	 
	 	 	Name:  	Thomas F. Stubbins 	 
	 	 	Title:  	Vice President, Human Resources 	 
	 
	 	EXECUTIVE

 	 
	 	/s/ KEITH B. HOWE
 	 
	 	Keith B. Howe 	 
	 	 	 
	 




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