Document:

2008 Annual Incentive Plan

 EXHIBIT 10.1 
 FY08 Annual Incentive Compensation Plan 
 Esterline Technologies Corporation 
  

	1.	Purpose. The Board of Directors has established this Plan to encourage Esterline officers and senior managers to make prudent decisions that will strengthen current year
financial results for shareholders. The Plan is designed to reward participants for successful achievement of an earnings objective, and to provide incentives for them to achieve outstanding results. 

  

	2.	Membership. The Board will appoint selected officers and senior managers from among Esterline’s corporate staff to Plan membership. Individuals become members upon
return of a signed acceptance. 

  

	3.	Objective. The Plan’s earnings objective will be determined by the Board’s Compensation Committee, and approved by the Board at the beginning of the fiscal year.

  

	4.	Incentive Formula. 

  

	 	a.	Target Incentive Compensation. The Board will establish a target incentive compensation award level for each member (“target IC”), which will range from 5% to 60%
of the member’s base salary as of fiscal year-end. Esterline will pay the target IC amount if the corporation achieves its earnings objective, subject to other terms of this Plan. 

  

	 	b.	Threshold. Members will earn no IC if the corporation’s earnings fall below a minimum established by the Board (“Plan threshold”). At the Plan threshold,
members will earn 25% of their target IC. 

  

	 	c.	Maximum. Members may earn up to 200% of their target IC for exceptional achievement if corporate earnings exceed the Plan’s objective and reach this “Plan
maximum”. Plan members will earn no additional IC for achievement above the Plan maximum. 

  

	 	d.	Proportionate Awards. Between the Plan threshold and Plan maximum, member earnings will increase or decrease from target levels in direct proportion to incremental
achievement. 

  

	5.	General Terms. 

  

	 	a.	Plan Administration. The Board has delegated administrative authority to its Compensation Committee, which shall consider any issues arising under the Plan, oversee Plan
award calculations, and make recommendations to the Board for final approval. 

  

	 	b.	 Adjustments. The Compensation Committee may exercise its discretion to recommend the Board either subtract from or add to computed awards, provided, however,
that the Compensation committee may not adjust awards for any member 

	 	 
who is a covered employee for purposes of Section 162(m) of the Internal Revenue Code of 1986 in such a manner as would increase the amount of
compensation otherwise payable to that employee. The maximum range of such adjustments is limited to either 25% of the member’s computed award or 25% of the member’s target IC, whichever is greater. 

  

	 	c.	Calculations. Esterline will calculate earnings per share on a fully-diluted basis, as audited, and before extraordinary items. 

  

	 	d.	Payment. Esterline will pay Plan awards within 60 days following fiscal year-end, provided: 

  

	 	•	 	 Company auditors have issued an opinion that supports earnings calculations; 

  

	 	•	 	 The Board has approved the proposed awards; and, 

  

	 	•	 	 Members remain employed through the entire fiscal year and through the payment date, except as provided in sections 5f and 5g below. 

 

	 	e.	Employment. This Plan does not affect members’ terms of employment, except as specifically provided here. This Plan does not guarantee continued employment. Members
remain subject to usual Esterline policies and practices. 

  

	 	f.	Partial Year Membership. If an employee is appointed to the Plan mid-year, Esterline will pay a pro-rata amount based on the member’s period of employment, and on the
terms under which they were appointed to the Plan. 

  

	 	g.	Termination. If a member leaves Esterline employment prior to the Plan payment date for any reason, whether voluntary or involuntary, s/he shall forfeit any IC award
otherwise earned, except: 

 i. The Board may exercise its discretion to grant a pro-rata award to a terminated employee based
on his/her period of employment; or, 
 ii. If a member leaves due to retirement, disability or death, Esterline will pay a pro-rata amount
based on the member’s period of active employment. 
  

	 	h.	Entire Agreement. This Plan, together with the member’s appointment letter comprise the entire agreement between the member and Esterline with respect to these subjects.

  

	 	i.	Modification. The Board may modify or terminate this Plan at any time, provided it pays members on a pro-rata basis for any IC earned prior to such change.

 Approved by the Board and issued on its behalf: 
  

	
	 /s/ Robert W. Cremin

	Robert W. Cremin
	Chairman, President & CEO
	December 6, 2007

  

 

 
 FY08 Annual IC Plan 
 Page 2Long-Term Incentive Plan

 EXHIBIT 10.2 
 Esterline Technologies Corporation 
 2004 Equity Incentive Plan 
 LONG TERM INCENTIVE PLAN 
 1.
Purpose. Esterline Technologies Corporation (the “Company”) has designed this Long Term Incentive Plan (“LTIP”) to reward its officers and selected senior executives for their contributions to the long-term performance of the
Company. The LTIP rewards effective use of the Company’s resources to achieve expected and superior performance. 
 2.
Participation. 
 (a) The Company’s officers and other senior executive employees are eligible to participate in this LTIP,
subject to selection and appointment by the Company’s Board of Directors (“the Board”) at the beginning of each performance period. Appointment as a participant in one or more performance periods does not entitle employees to
continued participation for subsequent periods. Each participant in this LTIP for a particular performance period will receive an appointment in the form attached. 
 (b) The Board may also appoint new participants during any current performance period. They will receive a pro-rata award based on the remaining portion of the performance period. 
 3. Performance Periods. The LTIP performance periods will be three years in duration, beginning on the first day of the Company’s fiscal year
and ending on the last day of the third fiscal year thereafter, except for an initial implementation phase. A new three-year performance period will start with each new fiscal year, such that when the LTIP is fully-implemented, there will be three
overlapping LTIP performance periods at any given time, as illustrated below. The Board may establish shorter performance periods as it determines are reasonable to implement this LTIP. 
 

 
 4. Performance Measures & Goals. The LTIP has two performance measures: average return on
invested capital (“ROIC”); and cumulative compound earnings per share growth (“EPSG”). At the beginning of each performance period the Board will set ROIC and EPSG goals combined on a matrix to show their relative relationship
and importance (“LTIP Matrix”). A sample LTIP matrix is attached. 
 

 

 5. Target and Actual Awards. The Board will establish a target cash award for each participant.
Participants’ actual awards will equal their target awards if the Company fully achieves the target LTIP goals. Participants’ actual awards will vary from their target awards if the Company performs above or below target LTIP goals.
Participants will receive no award for performance less than the minimum LTIP goals. Actual awards for superior performance are subject to a maximum of 400% of a participant’s target award. 
 6. Calculations. The Board will use the following formulas to determine Company performance and actual awards: 
 (a) Average Return on Invested Capital (ROIC) — Fiscal year end net income (before extraordinary items), divided by the monthly average
invested capital during the corresponding fiscal year, averaged over the applicable performance period, and expressed as a percentage. 
 (b) Cumulative Compound Earnings Per Share Growth (EPSG) — Cumulative growth in fully diluted EPS (net income before extraordinary items, divided by the monthly average of total common shares outstanding), measured as the
annualized percentage compound growth over the applicable performance period. 
 (c) Pro-rata participants – For participants
appointed during a performance period under section 2c above, the Company will calculate a pro forma amount as though the participant had been appointed for the full performance period, and then reduce that amount by an appropriate factor, based on
the participant’s appointment date. 
 7. Adjustments. In rare circumstances, the Board may exercise its discretion, consistent
with the 2004 Plan, to either: (a) subtract from or add to a participant’s actual award; or (b) adjust the LTIP’s performance goals. This would occur only if unusual events or business conditions develop after the beginning of a
performance period, such as significant acquisitions or divestitures that materially alter earnings or returns. Provided, however, the Board may not adjust awards for any participant who is a covered employee for purposes of Section 162(m) of
the Internal Revenue Code of 1986 in such a manner as would increase the amount of compensation otherwise payable to that employee. 
 8.
Payments. The Company will pay LTIP awards no later than two-and-a-half months following approval by the Board’s Audit Committee of the Company’s financial reports for the pertinent fiscal periods. 
 9. Continuous Employment. Except as provided below, to receive an LTIP award payment participants must be actively employed by the Company
throughout the entire performance period and through the date on which the Company pays LTIP awards for that performance period. Appointments will end automatically for participants who do not satisfy this employment condition and no LTIP award
payments will be earned or due. The Company considers approved leaves of absence to be active employment, provided they do not exceed the amount of leave to which a participant might be entitled under applicable Company policies, and under
disability, family and medical leave laws. For approved leaves that exceed such limits, payment of LTIP awards, if any, is subject to Board discretion. 
  

 

 
 Long Term Incentive Plan 
 Page 2 

 10. End of Employment. 
 (a) Suspension, Resignation, or Discharge. All a participant’s rights under this plan will be suspended during any period of suspension from
employment. A participant’s appointment will automatically end when s/he leaves employment with the Company for any reason other than Retirement, Disability, or death. 
 (b) Retirement, Disability, or Death. If a participant leaves employment with the Company due to Retirement, Disability, or death, the Company
will pay the participant’s actual award for the full performance period in the normal course, provided the participant completed at least one year of continuous, active employment during the performance period. If a participant does not
complete this minimum employment period, his/her appointment will automatically end, and no LTIP award will be earned or due. 
 (c)
Other. The Board may immediately cancel a participant’s appointment and recover any payments made if it discovers facts that, if known earlier, would have constituted grounds for termination of employment for Cause. 
 11. LTIP Terms. The Company established this LTIP pursuant to its 2004 Equity Incentive Plan (“2004 Plan”). The terms of a
participant’s appointment, this LTIP document, and the 2004 Plan together constitute the “LTIP terms.” 
 12. Employment
Terms. The LTIP terms do not affect participants’ terms of employment, except as specifically provided in the LTIP terms. They do not guarantee continued employment. Participants remain subject to usual Company policies and practices, and
to any other employment agreements, service terms, appointments, or mandates to which they are otherwise subject. 
 13. Plan
Administration. The Board has delegated administrative authority to its Compensation Committee (“Committee”), which will consider any issues arising under the LTIP terms, oversee award calculations, and make recommendations to the
Board for final approval. The Board has sole and final authority to determine Plan achievement and actual awards. 
 14. Plan
Interpretation. All references to the “Company” include a “Related Company”, as that term is defined in the 2004 Plan. Definitions in the 2004 Plan apply to terms used in this LTIP unless otherwise defined here. On any issues
of interpretation, the Committee’s decisions will be final and binding. 
 15. Modification. The Board may modify or terminate
this LTIP at any time. 
 Approved by the Board December 6, 2007. 
  

	
	 /s/ Robert W. Cremin

	Robert W. Cremin
	Chairman, President & CEO

  

			
	Attachments:	  	Sample LTIP Matrix
		  	LTIP Appointment form

  

 

 
 Long Term Incentive Plan 
 Page 3 

	
	

 Esterline Technologies Corporation 
 2004 Equity Incentive Plan 
 LONG TERM INCENTIVE PLAN APPOINTMENT

 1. Appointment, Terms & Conditions. Esterline Technologies Corporation (the “Company”) has appointed
Participant to its Long Term Incentive Plan (“LTIP”), subject to all terms and conditions stated here, in the LTIP document, and in the 2004 Equity Incentive Plan (the “2004 Plan”), which are incorporated by reference.

  

			
	Participant:	  	 
		
	Performance Period:	  	Cycle 6 -- FY08 through FY10
		
	Target Award:	  	
		
	Form of Payment:	  	Cash
		
	Payment Timing:	  	By January 10 following the end of the performance period

 2. LTIP Matrix. Attached is a copy of the LTIP Matrix the Company will use to determine
your actual award. Your actual award will vary depending on Company performance, and will be calculated as a percentage of your target award. You will receive 100% of your target award if the Company achieves the performance goals shown on the LTIP
Matrix. You will receive no award if Company performance falls short of certain minimums shown on the LTIP Matrix. You will receive a fractional percentage of your target award for results that meet or exceed the minimums, but fall short of plan
goals. If Company performance exceeds plan goals, you will receive more than your target award, up to a maximum of 400% of your target award. See the attached LTIP Matrix, LTIP document, and the 2004 Plan for further information, terms, and
conditions. 
 3. Congratulations on your appointment. Our success as a corporation depends on your effective leadership. We look
forward to good results for you personally and for the Company as a whole. 
 Approved by the Board December 6, 2007. 
  

	
	Esterline Technologies Corporation
	
	 /s/ Robert W. Cremin

	Robert W. Cremin
	Chairman, President & CEO

  

			
	Attachments:	  	LTIP Matrix
		  	Long Term Incentive Compensation Plan

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