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EXHIBIT 10.5
EXECUTION COPY
EMPLOYMENT AGREEMENT AMENDMENT FOR DOUGLAS W. PEACOCK
THIS EMPLOYMENT AGREEMENT AMENDMENT, dated as of January 17, 2002 (this
"AMENDMENT"), is made by and between TransDigm Holding Company, a Delaware
corporation (the "COMPANY"), and Douglas W. Peacock (the "EXECUTIVE").
WHEREAS, the Company and the Executive are parties to an employment
agreement, dated as of May 19, 1999 and effective as of December 3, 1998 (the
"EMPLOYMENT AGREEMENT");
WHEREAS, pursuant to Section 18 of the Employment Agreement, the parties
thereto may amend such agreement from time to time by an instrument in writing
that is executed by the Executive and the Chairman of the Compensation Committee
of the Board of Directors of the Company; and
WHEREAS, the Company and the Executive now desire to amend the Employment
Agreement as provided herein.
NOW THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below, the parties hereto agree as follows:
1. The third "WHEREAS" clause of the Employment Agreement shall be
amended to delete the phrase "(the "Effective Date")" at the end thereof.
2. Section 1(h) of the Employment Agreement shall be amended to revise
subpart (ii) of the definition of Date of Termination as follows:
(ii) if the Executive's employment is terminated pursuant to
Sections 5(a)(ii)-5(a)(vii), the date specified in the
Notice of Termination;
3. Section 1(k) of the Employment Agreement shall be amended to revise
the definition of Effective Date as follows:
"EFFECTIVE DATE" shall mean December 3, 2001.
4. Section 1(p) of the Employment Agreement shall be amended to read as
follows:
"GOOD REASON" shall mean the occurrence of any of the following: (i) a
material diminution in the Executive's title, duties or
responsibilities, without his prior written consent, (ii) a reduction
of the Executive's aggregate cash compensation (including bonus
opportunities), benefits or perquisites, without his prior written
consent or (iii) W. Nicholas Howley's termination of employment with
the Company for "Good Reason" as defined in subsections (i) and (ii)
of this subsection.
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5. Section 1(s) of the Employment Agreement shall be amended to delete
the definition of Non-Executive Term and to renumber the remaining subsections
of Section 1 accordingly.
6. Section 1(y) of the Employment Agreement shall be amended to read as
follows:
"RETIREMENT" shall mean the termination of the Executive's services
with the Company as a result of his retirement from active service as
the Chairman of the Board during the Term; PROVIDED, HOWEVER, that as
set forth in Section 4(l)(i), for purposes of the Management
Stockholders' Agreement, the Executive shall not be deemed to have
incurred a "Retirement" until the termination of his service as
Chairman of the Board on or after attaining age 65.
7. Section 1(z) of the Employment Agreement shall be amended to revise
the definition of Term as follows:
"TERM" shall have the meaning set forth in Section 2.
8. Section 2 of the Employment Agreement shall be amended by removing the
reference to Subsection "(a)" at the beginning thereof and by deleting
Subsection 2(b) in its entirety.
9. Section 2 of the Employment Agreement shall be further amended by
inserting the phrase ", or upon the occurrence of a Change in Control, if
sooner," following the word "thereof" in the fifth line.
10. Section 3(a) of the Employment Agreement shall be amended to delete
the phrase "and Chief Executive Officer of each" from the first sentence
thereof.
11. Section 3(a) of the Employment Agreement shall be further amended to
delete the second sentence thereof in its entirety.
12. The first two sentences of Section 3(b) of the Employment Agreement
shall be deleted and replaced with the following:
During the Term, the Board shall propose the Executive for re-election
to the Board and the Principal Stockholders shall vote all of their
shares of Common Stock in favor of such re-election.
13. Section 4(a) of the Employment Agreement shall be amended to delete
the figure "$330,000" in the first sentence thereof and replace it with
"$100,000."
14. Section 4(l) of the Employment Agreement shall be amended to restate
subpart (i) and the first two sentences of subpart (ii) thereof as follows:
(i) The date on which the Executive ceases to serve as Chairman
of the Board shall be deemed to be the date of his termination of
employment for purposes of the Management Stockholders' Agreement and
the reason for his termination of
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such service (i.e., death, Disability, for Cause, Retirement) shall be
deemed to be the reason for his termination of employment for purposes
of the Management Stockholders' Agreement.
(ii) Subject to Section 7 of the Management Stockholders'
Agreement, for so long as the Executive continues to serve as the
Chairman of the Board (the "Put Period"), the Executive shall have the
right to sell to Holdings, and Holdings shall have the obligation to
purchase from the Executive, at their Fair Market Value, that number
of shares of Common Stock not to exceed in the aggregate 80% of the
sum of (A) the number of shares of Common Stock held by the Executive
at the Effective Date, and (B) the number of shares of Common Stock
that could be acquired by the Executive at the Effective Date upon the
exercise of Options that are Exercisable Options (the "Aggregate
Stock"), in accordance with the provisions of this Section 4(l)(ii)
(the "Additional Put"). The Executive shall have the right to exercise
the Additional Put at any time during the Put Period as of which the
Executive is then serving as Chairman of the Board; PROVIDED, HOWEVER,
that (x) the Executive may not exercise the Additional Put within six
months following a prior exercise of the Additional Put; (y) the
Additional Put may not be exercised for less than 10% of the Aggregate
Stock; and (z) the Additional Put may only be exercised with respect
to shares that the Executive has held for at least six months.
15. Section 5(a) of the Employment Agreement shall be amended by deleting
Subsection 5(a)(vii) and to renumber the remaining subsections thereof
accordingly.
16. Section 6(a) of the Employment Agreement shall be amended by adding
the following to the end thereof.
Notwithstanding any other provision of this Agreement, in the event
that Executive's employment is terminated due to the expiration of the
Term as described in Section 2(a), Executive shall be entitled only to
the payments and benefits set forth in Section 6(a) and Section 6(c)
and such termination shall not be considered a Termination without
Cause or Resignation for Good Reason (or without Good Reason).
17. Section 6(b)(i) of the Employment Agreement shall be amended by
deleting the proviso at the end thereof.
18. Section 6(c) of the Employment Agreement shall be amended by deleting
the phrase "on or after the third anniversary of the Effective Date."
19. Section 8(a) of the Employment Agreement shall be amended by deleting
the phrase "and during the Non-Executive Term."
20. Section 15(a) of the Employment Agreement shall be amended by changing
the notice provision for the Company's counsel to be delivered to the attention
of Bradd L. Williamson.
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21. Section 15(b) of the Employment Agreement shall be amended by changing
the notice provision for the Executive's counsel to read as follows:
Shearman & Sterling
555 California Street
San Francisco, CA 94104
22. In all other respects, the Employment Agreement shall remain in full
force and effect.
23. This Amendment may be executed in several counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same Amendment.
IN WITNESS WHEREOF, the parties have executed this Amendment on the date
and year first above written.
TRANSDIGM HOLDING COMPANY
By: /s/ Stephen Berger
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Stephen Berger
Chairman of the Compensation Committee
EXECUTIVE
/s/ Douglas W. Peacock
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Douglas W. Peacock
Accepted and agreed to for purposes of
Section 3(b) of the Employment Agreement
ODYSSEY INVESTMENT PARTNERS
FUND, LP
By: ODYSSEY CAPITAL PARTNERS,
LLC, its general partner
By: /s/ Stephen Berger
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