10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended September 30, 2002

Commission File Number 333-71397

TransDigm Inc.	TransDigm Holding Company
(Exact name of registrant as specified in its charter)	(Exact name of registrant as specified in its charter)

Delaware	Delaware
(State or other Jurisdiction of incorporation or organization)	(State or other Jurisdiction of incorporation or organization)

34-1750032	13-3733378
(I.R.S. Employer Identification No.)	(I.R.S. Employer Identification No.)

26380 Curtiss Wright Parkway, Richmond Heights, Ohio	44143
(Address of principal executive offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (216) 289-4939

Securities Registered Pursuant to Section 12(b) of The Act: None

Securities Registered Pursuant to Section 12(g) of The Act: None

Indicate by checkmark whether the registrant: (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirement for the past 90 days.  Yes  x  No  ¨

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Annual Report on Form 10-K or any amendment to this Form 10-K.  x

Indicate by checkmark whether the Co-Registrants are accelerated filers (as defined in the Exchange Act Rule 12b-2).  Yes  ¨  No  x

There currently is no established publicly traded market for the common equity of TransDigm Holding Company held by non-affiliates.

Indicate the number of shares outstanding of each of the Co-Registrants’ classes of common stock, as of the latest practicable date.

Common Stock (Voting) of TransDigm Holding Company, $0.01 Par Value	119,789
(Class)	(Outstanding at September 30, 2002)
Class A Common Stock (Non-Voting) of TransDigm Holding Company, $.01 Par Value	-0-
(Class)	(Outstanding at September 30, 2002)

All of the outstanding capital stock of TransDigm Inc. is held by TransDigm Holding Company.

Documents incorporated by reference: See Exhibit Index included elsewhere in this Form 10-K.

SECTIONS OF THE 10K

INDEX

		Page
PART I
ITEM 1	BUSINESS	1
ITEM 2	PROPERTIES	13
ITEM 3	LEGAL PROCEEDINGS	13
ITEM 4	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	13
PART II
ITEM 5	MARKET FOR OUR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS	14
ITEM 6	SELECTED FINANCIAL DATA	14
ITEM 7	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	18
ITEM 8	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	27
ITEM 9	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	27
PART III
ITEM 10	DIRECTORS AND EXECUTIVE OFFICERS	28
ITEM 11	EXECUTIVE COMPENSATION	31
ITEM 12	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	37
ITEM 13	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	39
ITEM 14	CONTROLS AND PROCEDURES	39
ITEM 15	EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K	40
	SIGNATURES	43
	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	F-1 - F-30
	EXHIBIT INDEX	F-31

Special Note Regarding Forward-Looking Statements

This Report on Form 10-K (this “Report”) contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and 27A of the Securities Act. Discussions containing such forward-looking statements may be found in Items 1, 3, and 7 hereof, as well as within this Report generally. In addition, when used in this Report, the words “believes,” “anticipates,” “expects” and similar expressions are intended to identify forward-looking statements. Although the Company believes that its plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, such forward-looking statements are subject to a number of risks and uncertainties, and we can give no assurance that such plans, intentions or exceptions will be achieved. Important factors that could cause actual results to differ materially from the forward-looking statements made in this Report are set forth under the caption “Risk Factors” and elsewhere in this Report. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements.

Many such factors are outside the control of TransDigm Holding Company and its subsidiaries. Consequently, such forward-looking statements should be regarded solely as our current plans, estimates and beliefs. We do not undertake and specifically decline any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

In this Report, the term “TransDigm” refers to TransDigm Inc. and its subsidiaries. The term “Holdings” refers to TransDigm Holding Company which holds all of the outstanding capital stock of TransDigm. The term “Company” refers to Holdings, together with TransDigm and its subsidiaries.

PART I

ITEM 1.     BUSINESS

The Company

TransDigm is a leading supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft. Most of the Company’s products share three common characteristics: (1) highly engineered and proprietary; (2) significant aftermarket content; and (3) large shares of niche markets.

TransDigm sells its products to commercial airlines, aircraft maintenance facilities, aircraft and aircraft system original equipment manufacturers (“OEMs”) and various agencies of the United States and foreign governments. TransDigm generates the majority of its earnings before interest, taxes, depreciation and amortization (“EBITDA”) from sales of replacement parts in the commercial and defense aftermarkets. Most of TransDigm’s OEM sales are on an exclusive sole source basis; therefore, in most cases, TransDigm is the only certified provider of these parts in the aftermarket. Aftermarket parts sales are driven by the size and usage of the worldwide aircraft fleet, are historically relatively stable and generate recurring revenues over the life of an aircraft that are many times the size of the original OEM purchases. TransDigm has over 40 years of experience in most of its product lines, which allows it to benefit from a large and growing installed base of aircraft.

TransDigm focuses its businesses on continual value creation. The business philosophy is centered around three value principles: (1) obtaining profitable new business by applying its technical capabilities to specific engineering problems; (2) striving to continually improve productivity; and (3) pricing its product to fairly reflect the unique value provided. Additionally, the Company continually seeks acquisition opportunities compatible with its value creation philosophy. The Company has a demonstrated capability to acquire, integrate and improve aerospace businesses.

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TransDigm differentiates itself based on its engineering and manufacturing capabilities, and typically will not bid on non-proprietary “build to print” business. TransDigm products have strong brand names within the airline industry and a reputation for high quality, reliability and customer service. TransDigm focuses on developing highly customized products to solve specific problems of aircraft operators and manufacturers. While aftermarket sales accounted for approximately 70% of TransDigm’s fiscal 2002 net sales and OEM sales account for the remaining 30%, aftermarket sales typically carry a substantially higher gross margin than sales to OEMs.

TransDigm was formed in 1993 through a management-led buyout of the Aerospace Components Group of IMO Industries Inc. Since its formation, TransDigm has successfully established leadership positions in well-defined, profitable niches of the aircraft components market that it believes offer sustainable growth and opportunities.

Products

TransDigm’s products have a long history in the aircraft component industry and are found on virtually all types of commercial and military aircraft. Management estimates that over 75% of TransDigm’s net sales are derived from products for which it has achieved sole source designation, and that over 90% of TransDigm’s net sales are derived from products of proprietary design. TransDigm’s products are organized into two groupings: Power System Components and Airframe System Components. For financial disclosure purposes, the Company reports as one business segment because of the similar nature of its products (a majority are highly engineered aircraft components) as well as the similarity of the customers, distribution methods, production processes and regulatory environment across the Company.

Power System Components generated 63% of TransDigm reported net sales in fiscal 2002 and primarily serve the power requirements of commercial and military aircraft. The major customers for these products include substantially all worldwide engine/auxiliary power unit, or APU, end users such as American Airlines, British Airways, Delta, Air France, and Lufthansa and engine/APU OEMs such as United Technologies, Rolls Royce, General Electric, and Honeywell; regional and business jet end users such as Comair, Mesa and Continental Express, and regional and business jet OEMs such as Bombardier, Cessna, Gulfstream and Raytheon; and various United States and foreign defense agencies and OEMs such as Lockheed Martin. The major products are ignition system components such as igniters, exciters and spark plugs, used to start and restart turbine and reciprocating aircraft engines; gear pumps used primarily in lubrication and fuel applications; actuators and controls used in numerous motion applications and batteries/chargers used to provide engine start and system back-up power.

Airframe System Components generated 37% of TransDigm reported net sales in fiscal 2002 and primarily serve the requirements of various airframe systems used in commercial and military aircraft. The major customers for these products are the worldwide large commercial transport end users and OEMs such as Boeing and Airbus; the regional and business jet end users and OEMs mentioned above, and the various United States and foreign defense agencies and OEMs. The major products are engineered connectors used in fuel, pneumatic and hydraulic applications; engineered latches used in various bin, security, door and other applications on both the interior and exterior of the airframe; and lavatory hardware and components.

The Power System Components and Airframe System Components are produced and sold under a number of industry trade names. The Power System Components are manufactured by the AeroControlex, Champion Aerospace and Marathon product groups. AeroControlex’s major products are gear pumps, actuators and controls. Champion Aerospace produces various ignition system components, including igniters, spark plugs and exciters. Marathon manufactures nickel cadmium batteries/chargers. The Airframe System Components are manufactured by AdelWiggins and Adams Rite Aerospace product groups. AdelWiggins’ major product line is an extensive offering of engineered connectors. Adams Rite Aerospace primarily offers engineered latches and lavatory components.

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Sales and Marketing

Consistent with TransDigm’s overall strategy, TransDigm’s sales and marketing organization is structured to understand and anticipate the needs of customers in order to continually develop a stream of technical solutions that generate significant value. In particular, TransDigm focuses on the high-margin, repeatable aftermarket segment.

TransDigm has structured its sales efforts along their major product lines, assigning a product line manager to each line. The product line managers are expected to grow the sales and profitability of their product line faster than the served market and to achieve the targeted annual level of bookings, sales, new business and profitability for each product. Assisting the product line managers are account managers and sales engineers who are responsible for covering major OEM and airline accounts. Account managers and sales engineers are expected to be familiar with the personnel, organization and needs of specific customers, for achieving total bookings and new business goals at each account, and, in conjunction with the product line managers, for determining when additional resources are required at customer locations. Most of TransDigm’s sales personnel are compensated in part on their bookings and sales and ability to identify and convert new business opportunities.

Though the majority are employees, the account manager function may be performed by independent representatives depending on the specific customer, product and geographic location. TransDigm also uses a number of distributors to provide logistical support as well as primary customer contact with certain smaller accounts. TransDigm’s major distributors are Aviall, Satair and AAR.

Backlog

Management believes that sales order backlog (i.e., orders for products that have not yet been shipped) is a useful indicator of future sales. As of September 30, 2002, the Company estimated its sales order backlog at $124.7 million compared to an estimated $116.8 million as of September 30, 2001. The majority of the purchase orders outstanding as of September 30, 2002 are scheduled for delivery within the next twelve months. Purchase orders may be subject to cancellation by the customer prior to shipment. The level of unfilled purchase orders at any given date during the year will be materially affected by the timing of the Company’s receipt of purchase orders and the speed with which those orders are filled. Accordingly, the Company’s backlog as of September 30, 2002 may not necessarily represent the actual amount of shipments or sales for any future period.

Foreign Operations

Although the Company manufactures all of its products in the United States, some components are purchased from foreign suppliers. The Company’s direct sales to foreign customers were approximately 24% of sales or $59.4 million in fiscal 2002. In addition, a portion of the Company’s products sold to domestic distributors are resold to foreign end-users. All of these sales are subject to numerous additional risks, including the impact of foreign government regulations, currency fluctuations, political uncertainties and differences in business practices. There can be no assurance that foreign governments will not adopt regulations or take other action that would have a direct or indirect adverse impact on the business or market opportunities of the Company within such governments’ countries. Furthermore, there can be no assurance that the political, cultural and economic climate outside the United States will be favorable to the Company’s operations and growth strategy.

Manufacturing and Engineering

TransDigm maintains five manufacturing facilities. Each facility serves its respective product lines and comprises manufacturing, distribution, engineering as well as administrative functions, including management, sales and finance. The facilities encompass approximately 105,000, 44,000, 150,000, 50,000 and 169,000 square feet of manufacturing space in Los Angeles, California, Cleveland, Ohio, Waco, Texas, Fullerton, California, and Liberty, South Carolina, respectively. The Company continually takes various steps to improve productivity and reduce costs, including consolidating operations, developing improved control systems that

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allow for accurate product line profit and loss accounting, investing in equipment and tooling, installing modern information systems and implementing broad-based employee training programs. Management believes that TransDigm’s manufacturing systems and equipment are critical competitive factors that permit it to meet the rigorous tolerances and cost sensitive price structure of aircraft customers. TransDigm focuses its manufacturing activities by product line, alternating its equipment among designs as demand requires.

Each of TransDigm’s operating groups attempt to differentiate itself from its competitors by efficiently and consistently producing uniquely engineered products with high quality and timely delivery. TransDigm’s proprietary products are designed by its engineering staff and intended to serve unmet needs in the aircraft component industry, particularly through its new product initiatives. See “Business-Products.” These proprietary designs must withstand the extraordinary conditions and stresses that will be endured by products during use and meet the rigorous demands of TransDigm’s customers’ tolerance and quality requirements.

TransDigm uses sophisticated equipment and procedures to ensure the quality of its products and to comply with military specifications and Federal Aviation Administration (“FAA”) and OEM certification requirements. TransDigm performs a variety of testing procedures, including testing under different temperature, humidity and altitude levels, shock and vibration testing and X-ray fluorescent measurement. These procedures, together with other customer approved techniques for document, process and quality control, are used throughout TransDigm’s manufacturing facilities.

Customers

TransDigm’s customers include: (A) worldwide commercial airlines, including national and regional airlines, particularly for aftermarket maintenance, repair and overhaul (“MRO”) components, (B) large commercial transport and regional and business aircraft OEMs, (C) various agencies of the United States and foreign governments, including the United States military, (D) military OEMs, and (E) various other industrial customers. For the year ended September 30, 2002, Aviall (a distributor of aftermarket parts to airlines throughout the world), the United States Government and Honeywell International, Inc. each accounted for approximately 11% of the Company’s net sales.

TransDigm has strong customer relationships with virtually all important large commercial transport, regional, general aviation and military OEMs. The demand for TransDigm’s aftermarket parts and services is related to TransDigm’s extensive installed base, revenue passenger miles and, to a lesser extent, airline profitability and the size and age of the worldwide aircraft fleet. Some of TransDigm’s business is executed under long-term agreements with customers, which encompass many products under a common agreement. TransDigm is also a leading supplier of components used on United States’ designed military aircraft. TransDigm’s products are used on a variety of fighter aircraft, freighters and helicopters, including the Boeing F-15 and F-18, Lockheed Martin F-16, the E2C (Hawkeye), Joint Strike Fighter, Boeing C-17, Lockheed C-130 and the Blackhawk and Apache helicopters.

Competition

TransDigm competes with a number of established companies, including divisions of larger companies that have significantly greater financial, technological and marketing resources. The niche markets within the aerospace industry served by TransDigm are relatively fragmented with several competitors for each of the products and services provided by the Company. Due to the global nature of the commercial aircraft industry, competition in these categories comes from both U.S. and foreign companies. TransDigm knows of no single competitor, however, that provides the same range of products and services as those provided by TransDigm. Competitors in TransDigm’s product lines range in size from divisions of large corporations to small privately held entities, with only one or two components in their entire product line. TransDigm believes that its ability to compete depends on high product performance, consistently high quality and timely delivery, competitive price, and superior customer service and support. There can be no assurance that TransDigm will be able to compete successfully with respect to these or other factors in the future.

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Governmental Regulation

The commercial aircraft component industry is highly regulated by both the FAA in the United States and by the Joint Aviation Authorities in Europe and other agencies throughout the world, while the military aircraft component industry is governed by military quality specifications. TransDigm, and the components it manufactures, are required to be certified by one or more of these entities, and, in some cases, by individual OEMs, in order to engineer and service parts and components used in specific aircraft models. If material authorizations or approvals were revoked or suspended, the operations of TransDigm would be adversely affected. In the future, new and more stringent government regulations may be adopted, or industry oversight may be heightened, which may have an adverse impact on TransDigm.

TransDigm must also satisfy the requirements of its customers, including OEMs and airlines that are subject to FAA regulations, and provide these customers with products and services that comply with the government regulations applicable to commercial flight operations. In addition, the FAA requires that various maintenance routines be performed on aircraft components, and TransDigm currently satisfies or exceeds these maintenance standards in its repair and overhaul services. Several of TransDigm’s operating divisions include FAA approved repair stations.

TransDigm’s operations are also subject to a variety of worker and community safety laws. The Occupational Health and Safety Act (“OHSA”) mandates general requirements for safe workplaces for all employees. In addition, OHSA provides special procedures and measures for the handling of certain hazardous and toxic substances. TransDigm believes that its operations are in material compliance with OHSA’s health and safety requirements.

Raw Materials and Patents

TransDigm requires the use of various raw materials, including titanium, aluminum, nickel powder, nickel screen, stainless steel, iridium and cadmium, in its manufacturing processes. The availability and prices of such raw materials may fluctuate and TransDigm may not be able to recover price increases in these supplies. TransDigm also purchases a variety of manufactured component parts from various suppliers. At times, TransDigm’s operating units concentrate their orders among a few suppliers in order to strengthen their supplier relationships. Raw materials and component parts are generally available from multiple suppliers at competitive prices. However, any delay in TransDigm’s ability to obtain necessary raw materials and component parts may affect its ability to meet customer production needs.

TransDigm has various trade secrets, proprietary information, trademarks, trade names, patents, copyrights and other intellectual property rights, which TransDigm believes, in the aggregate but not individually, are important to its business.

Environmental Matters

TransDigm’s operations and current and/or former facilities are subject to federal, state and local environmental laws and to regulation by government agencies, including the Environmental Protection Agency. Among other matters, these regulatory authorities impose requirements that regulate the emission, discharge, generation, management, transportation and disposal of hazardous materials and pollutants, govern response actions to hazardous materials which may be or have been released to the environment, and require TransDigm to obtain and maintain permits in connection with its operations. The extensive regulatory framework imposes significant compliance burdens and risks on TransDigm. Although management believes that TransDigm’s operations and its facilities are in compliance in all material respects with applicable environmental laws, there can be no assurance that future changes in such laws, regulations or interpretations thereof or the nature of TransDigm’s operations will not require TransDigm to make significant additional expenditures to ensure compliance in the future. According to some environmental laws, a current or previous owner or operator of real property may be liable for the costs of investigations, removal or remediation of hazardous materials at such property. Those laws typically impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous materials. Persons who arrange, or are deemed to have arranged, for disposal or

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treatment of hazardous materials also may be liable for the costs of investigation, removal or remediation of those substances at the disposal or treatment site, regardless of whether the affected site is owned or operated by that person. Because TransDigm owns and/or operates a number of facilities, and because TransDigm arranges for the disposal of hazardous materials at many disposal sites, TransDigm may incur costs for investigation, removal and remediation, as well as capital costs associated with compliance. Although those environmental costs have not been material in the past and are not expected to be material in the future, there can be no assurance that changes in environmental laws or unexpected investigations and clean-up costs will not be material. TransDigm does not currently contemplate material capital expenditures for environmental compliance remediation for fiscal 2003.

TransDigm has been addressing contaminated soil and groundwater beneath the facility in Waco, Texas. Although TransDigm cannot provide assurance that material expenditures will not be required in the future to address currently unidentified contamination or to satisfy further requirements of the Texas Natural Resources Conservation Commission (“TNRCC”), TransDigm believes, based upon information currently available, that the current soil and groundwater remediation at our Waco facility will not require the incurrence of material expenditures.

In connection with the acquisition of Marathon in fiscal 1997, a $2.0 million escrow was created to cover the cost of remediation that TNRCC might require for those contaminants at the Waco facility. During September 1998, the former owner of Marathon filed a lawsuit against the Company to release the environmental escrow alleging that TransDigm had violated the requirements of the stock purchase agreement relating to the investigation of the presence of certain contaminants at the Waco, Texas facility. The Company has filed counter claims against the seller and cannot presently determine the ultimate outcome of this matter. Current estimates indicate the $2.0 million escrow is adequate to cover any costs that may be required to meet TNRCC requirements.

Employees

As of September 30, 2002, TransDigm had approximately 950 employees. Approximately 9% of TransDigm employees were represented by the United Steelworkers Union, and approximately 6% were represented by the United Automobile, Aerospace and Agricultural Implement Workers of America. Collective bargaining agreements between TransDigm and these labor unions expire in April 2005 and November 2004, respectively. TransDigm considers its relationship with its employees generally to be satisfactory.

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Risk Factors

Set forth below are important risks and uncertainties that could cause our actual results to differ materially from those expressed in forward-looking statements made by our management. In this section only, the words “TransDigm,” “we,” “us” and “our” refer to TransDigm Inc. and our subsidiaries unless the context otherwise indicates. The term “Holdings” refers to TransDigm Holding Company. References to the “Company” are to Holdings, together with TransDigm and its subsidiaries.

Substantial Leverage—Our substantial indebtedness could adversely affect our financial health.

The Company has a significant amount of indebtedness. The following chart shows certain of the Company’s important credit statistics:

	At September 30, 2002
	(dollars in millions)
Total TransDigm indebtedness	$	377.7
Total Holdings indebtedness	$	31.3

In addition, at September 30, 2002, the Company had a consolidated stockholders’ deficiency of $77.2 million, which resulted from the merger consideration paid in fiscal 1999 in conjunction with the recapitalization being charged directly to Holdings equity (see Note 1 to the consolidated financial statements included elsewhere in this report).

The Company’s substantial indebtedness could have important consequences. For example, it could:

• increase our vulnerability to general adverse economic and industry conditions;

• limit our ability to fund future working capital, capital expenditures, research and development costs and other general corporate requirements;

• require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, research and development efforts and other general corporate purposes;

• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

• place us at a competitive disadvantage compared to our competitors that have less debt; and

• limit, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds.

In addition to the restrictive covenants contained in our senior secured credit facility (the “Senior Credit Facility”) and the Indenture governing the Senior Subordinated Notes and the Holdings PIK Notes (the “Indentures”), the Senior Credit Facility contains covenants that require us to meet certain financial ratios. Any failure to comply with the restrictions of the Senior Credit Facility, the Indentures or any other subsequent financing agreements may result in an event of default. An event of default may allow the creditors, if the agreements so provide, to accelerate the related debt as well as any other debt to which a

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cross-acceleration or cross-default provision applies. In addition, the lenders may be able to terminate any commitments they had made to supply us with further funds.

Additional Borrowings Available—Despite current indebtedness levels, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks associated with our substantial leverage.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of the indenture governing the Senior Subordinated Notes do not fully prohibit us or our subsidiaries from doing so. Our Senior Credit Facility will permit additional borrowings of up to $180.0 million, including $30.0 million under our Revolving Credit Facility and $150.0 million of uncommitted, additional bank borrowings. All of those borrowings would be senior to the Notes and the related guarantees. If new debt is added to our subsidiaries’ current debt levels, the related risks that we and they now face could intensify.

Ability to Service Debt—To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control.

Our ability to make payments on and to refinance our indebtedness, or to fund planned capital expenditures and research and development, will depend on our ability to generate cash in the future, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

Based upon the current level of operations and anticipated cost savings and operating improvements and absent any disruptive events, we believe our cash flow from operations and available cash, together with available borrowings under the Senior Credit Facility, will be adequate to meet our future liquidity needs for at least the next several years.

We cannot provide assurance, however, that our business will generate sufficient cash flow from operations, that currently anticipated cost savings and operating improvements will be realized on schedule or at all or that future borrowings will be available to us under the Senior Credit Facility in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness on or before maturity. We cannot provide assurance that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all.

Risks Related to Terrorism—We may not yet know the full impact of the September 11, 2001 terrorist attacks, and any future terrorist attacks may have a material adverse impact on our business.

On September 11, 2001, the United States was subjected to multiple terrorist attacks, which involved the hijacking of four U.S. commercial aircraft. In the aftermath of the terrorist attacks, passenger traffic on commercial flights was significantly lower than prior to the attacks and many commercial airlines reduced their operating schedules. The overall result of the terrorist attacks was billions of dollars in losses to the airlines industry. The full impact of these events and any future terrorist attacks is not yet known and could result in further reductions in the use of commercial aircraft. Such future reductions may cause airlines to delay purchases of spare parts and new aircraft or file for bankruptcy. If demand for new aircraft and spare parts decreases, there may be a decrease in demand for certain of our products.

Dependence on Major Customers—We rely heavily on certain customers for much of our sales.

Our three largest customers for the year ended September 30, 2002, were Aviall (a distributor of aftermarket parts to airlines throughout the world), the United States Government and Honeywell International, Inc. These customers each accounted for approximately 11% of our consolidated net sales in fiscal 2002. Our top ten customers for the year ended September 30, 2002 accounted for approximately 60% of our consolidated net sales. The loss of any one or more of these key customers could have a material adverse effect on our business.

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Customer Contracts—We generally do not have guaranteed future sales of our products. Further, we are obligated under fixed price contracts with some of our customers, so we take the risk for cost overruns.

As is customary in our business, we do not have long-term contracts with most of our aftermarket customers and therefore do not have guaranteed future sales. Although we do have long-term contracts with many of our OEM customers, some of those customers may terminate these contracts on short notice and, in many other cases, our customers have not committed to buy any minimum quantity of our products. In addition, in certain cases, we must anticipate the future volume of orders based upon the historic purchasing patterns of customers and upon our discussions with customers as to their anticipated future requirements. Cancellations, reductions or delays in orders by a customer or a group of customers could have a material adverse effect on our business, financial condition and results of operations.

We also have entered into multi-year, fixed-price contracts with some of our customers, where we agree to perform the work for a fixed price and, accordingly, realize all the benefit or detriment resulting from any decreased or increased costs for making these products. Sometimes we accept a fixed-price contract for a product which we have not yet produced, which increases the risks of delays or cost overruns.

Most of our contracts do not permit us to recover for increases in input prices, taxes or labor costs, although some contracts provide for renegotiation to address certain material adverse changes. Any such increases are likely to have an adverse effect on our business.

Aircraft Components Segment Risks—Our business is sensitive to the number of flight hours that our customers’ planes spend aloft and to our customers’ profitability. These items are, in turn, affected by general economic conditions. In addition, our sales to manufacturers of new large aircraft are cyclical.

We compete in the aircraft component segment of the aerospace industry. Our business is directly affected by economic factors and other trends that affect our customers, including projected market growth that may not materialize or be sustainable. Specifically, the aircraft component segment is sensitive to changes in the number of miles flown by paying customers of commercial airlines, which we refer to as revenue passenger miles, and, to a lesser extent, to changes in the profitability of the commercial airline industry and the size and age of the worldwide aircraft fleet.

Revenue passenger miles and airline profitability have historically been correlated with the general economic environment, although national and international events can also play a key role. For example, revenue passenger miles declined primarily as a result of increased security concerns among airline customers following the events of September 11, 2001. See “—Risks Related to Terrorism.” Any future reduction would reduce the use of commercial aircraft and, consequently, the need for spare parts and new aircraft. During periods of reduced airline profitability, some airlines may elect to delay purchases of spare parts, preferring instead to deplete existing inventories or file for bankruptcy. If demand for new aircraft and spare parts decreases, there may be a decrease in demand for certain of our products. Therefore, any future decline in revenue passenger miles, airline profitability or the size of the worldwide aircraft fleet, for any reason, could have a material adverse effect on our business.

In addition, sales to manufacturers of large commercial aircraft, which accounted for approximately 13% of our net sales in fiscal 2002, have historically experienced periodic downturns. In the past, these sales have been affected by airline profitability, which is impacted by fuel and labor costs and price competition, and other things. Due in part to these factors, the number of large commercial aircraft delivered has dropped from a peak of approximately 914 aircraft in 1999. As a result of the events of September 11, 2001 and a weakened economy, many industry analysts expect aircraft deliveries to trend significantly downward over the next few years. Prior downturns have adversely effected our net sales, gross margin and net income. These and certain other factors may cause a downturn in sales to manufacturers of large commercial aircraft in the future which may have a material adverse effect on our business

.

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Fluctuations in Defense Spending—A decline in the U.S. defense budget may adversely affect our sales of parts used in military aircraft.

Approximately 23% of our sales in fiscal 2002 were related to products used in military aircraft, most of which were spare parts provided to various governmental agencies.

The United States’ defense budget has fluctuated in recent years, at times resulting in reduced demand for new aircraft and spare parts. In addition, foreign military sales are affected by U.S. government regulations, regulations by the purchasing foreign government and political uncertainties in the United States and abroad. The United States’ defense budget may continue to fluctuate, and may decline, and sales of defense related items to foreign governments may decrease. If there is a decline which reduces demand for our components, our business may be adversely affected.

In addition, the terms of defense contracts with the U.S. government generally permit the government to terminate contracts partially or completely, with or without cause, at any time. Approximately 11% of our sales in fiscal 2002 were to the U.S. government. Any unexpected termination of a significant government contract could have an adverse effect on our business.

Government Regulation and Industry Oversight—Our business would be adversely affected if we lost our government or industry approvals or if more onerous government regulations were enacted or industry oversight increased.

The aircraft component industry is highly regulated in the United States and in other countries. In order to sell our components, we and the components we manufacture must be certified by the Federal Aviation Administration, the United States Department of Defense and similar agencies in foreign countries and by individual manufacturers.

If new and more stringent government regulations are adopted or if industry oversight increases we might incur significant expenses to comply with any new regulations or heightened industry oversight. If material authorizations or approvals were revoked or suspended, our business would be adversely affected.

To the extent that we operate outside the United States, we are subject to the Foreign Corrupt Practices Act, or FCPA, which generally prohibits United States companies and their intermediaries from bribing foreign officials for the purpose of obtaining or keeping business or otherwise obtaining favorable treatment. In particular, we may be held liable for actions taken by our strategic or local partners even though such partners are foreign companies that are not subject to the FCPA. Any determination that we have violated the FCPA could result in sanctions that could have a material adverse effect on our business.

Risks Associated with our Workforce—We are dependent on our highly trained employees and any work stoppage or difficulty hiring similar employees would adversely affect our business.

Because our products are complicated and very detailed, we are highly dependent on an educated and trained workforce. There is substantial competition for skilled personnel in the aircraft component industry and we could be adversely affected by a shortage of skilled employees. We may not be able to fill new positions or vacancies created by expansion or turnover or attract and retain qualified personnel.

At September 30, 2002, approximately 9% of our employees were represented by the United Steelworkers Union, and approximately 6% were represented by the United Automobile, Aerospace and Agricultural Implement Workers of America. Our collective bargaining agreements with these labor unions expire in April 2005 and November 2004, respectively. Although we believe that our relations with our employees are good, we cannot provide assurance that we will be able to negotiate a satisfactory renewal of these collective bargaining agreements or that our employee relations will remain stable. Because we maintain a relatively small inventory of finished goods any work shortage could have a material adverse effect on our business.

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Dependence on Key Personnel—If we lose our senior management or technical personnel, our business may be adversely affected.

Our success is dependent upon our senior management, as well as on our ability to attract and retain qualified personnel, including engineers. There is substantial competition for these kinds of personnel in the aircraft component industry. We may not be able to retain our existing senior management or engineering staff, fill new positions or vacancies created by expansion or turnover, or attract additional qualified personnel. Although we have entered into employment agreements with certain executive officers, these agreements may not be renewed.

Risks Associated with Suppliers—Our business is dependent on the availability of certain components and raw materials that we buy from suppliers.

Our business is affected by the price and availability of the raw materials and component parts that we use to manufacture our components. Our business, therefore, could be adversely impacted by factors affecting our suppliers, or by increased costs of such raw materials or components if we are unable to pass along such price increases to our customers. Because we maintain a relatively small inventory of raw materials and component parts, our business could be adversely affected if we are unable to obtain these raw materials and components from our suppliers in the quantities we require or on favorable terms. Although we believe that we could identify alternative suppliers, or alternative raw materials or component parts, the lengthy and expensive FAA and OEM certification process associated with aerospace products could prevent efficient replacement of a material or supplier and could have a material adverse effect on our business.

Potential Exposure to Environmental Liabilities—We may be liable for penalties under a variety of environmental laws, even if we did not cause any environmental problems. Changes in environmental laws or unexpected investigations could adversely affect our business.

Our business and our facilities are subject to a number of federal, state and local laws and regulations, which govern, among other things, the discharge of hazardous materials into the air and water as well as the handling, storage and disposal of such materials.

Pursuant to certain environmental laws, a current or previous owner or operator of land may be liable for the costs of investigation, removal or remediation of hazardous materials at such property. These laws typically impose liability whether or not the owner or operator knew of, or was responsible for, the presence of any hazardous materials. Persons who arrange (as defined under these statutes) for the disposal or treatment of hazardous materials also may be liable for the costs of investigation, removal or remediation of such substances at the disposal or treatment site, regardless of whether the affected site is owned or operated by them.

Because we own and operate a number of facilities, and because we arrange for the disposal of hazardous materials at many disposal sites, we may incur costs for investigation, removal and remediation, as well as capital costs associated with compliance with these laws. Although such environmental costs have not been material in the past and are not expected to be material in the future, changes in environmental laws or unexpected investigations and clean-up costs could have a material adverse effect on our business.

Risks Associated with International Operations—Our international business exposes us to risks relating to increased regulation and political or economic instability, globally or within certain foreign countries.

Although the Company manufactures all of its products in the United States, some components are purchased from foreign suppliers. Our direct sales to foreign customers were approximately $59.4 million, $54.8 million and $36.2 million in fiscal 2002, fiscal 2001 and fiscal 2000, respectively. In addition, a portion of the products we sell to domestic distributors is resold to foreign end-users. All of these sales are subject to numerous additional risks, including the impact of foreign government regulations, currency fluctuations, political uncertainties and differences in business practices.

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Foreign governments could adopt regulations or take other actions that would have a direct or indirect adverse impact on our business or market opportunities abroad. Furthermore, the political, cultural and economic climate outside the United States may not be favorable to our business and growth strategy.

Risks Related to Potential Future Acquisitions—We intend to pursue future acquisitions and our business may be adversely affected if we cannot consummate acquisitions on satisfactory terms or effectively integrate new operations.

We intend to pursue acquisitions that we believe will present opportunities consistent with the Company’s value generation strategy. This acquisition strategy may require substantial capital, and we may not be able to raise the necessary funds on terms satisfactory to us or at all. Our acquisition strategy is also limited by the availability of suitable acquisition candidates. We cannot provide assurance that we will be able to consummate any future acquisitions.

We regularly engage in discussions with respect to potential acquisition and investment opportunities. If we consummate an acquisition, our capitalization and results of operations may change significantly. Future acquisitions would likely result in the incurrence of debt and contingent liabilities and an increase in interest expense and amortization expenses or periodic impairment charges related to goodwill and other intangible assets, which could have a material adverse effect upon our business.

Acquisitions involve numerous risks, including difficulties in the assimilation of the operations, technologies, services and products of the acquired companies and the diversion of management’s attention from other business concerns. For all of these reasons, if any such acquisitions occur, our business could be adversely affected.

Competition—We face significant competition.

We operate in a highly competitive global industry and compete against a number of companies, including divisions of larger companies, some of which have significantly greater financial, technological and marketing resources than us. Competitors in our product lines are both U.S. and foreign companies and range in size from divisions of large corporations to small privately held entities. We believe that our ability to compete depends on high product performance, consistently high quality, short lead-time and timely delivery, competitive price, superior customer service and support and continued certification under customer quality requirements and assurance programs. Our inability to compete successfully with respect to these or other factors may materially adversely affect our business and financial condition.

Control by Odyssey—We are controlled by Odyssey, whose interests may not be aligned with yours.

Odyssey Investment Partners (“Odyssey”) and its co-investors indirectly own approximately 83% of the common equity interests in our parent company, Holdings, on a fully diluted basis (including shares issuable upon exercise of warrants but excluding shares issuable upon exercise of stock options) and, therefore, have the power, subject to certain exceptions, to control Holdings. They also control the appointment of management and the entering into of mergers, sales of substantially all assets and other extraordinary transactions. The interests of Odyssey may not in all cases be aligned with the Company’s creditors and other shareholders.

Product Liability; Claims Exposure—We could be adversely affected as a result of a lawsuit if one of our components causes an aircraft to crash and we are not covered by our insurance policies.

Our operations expose us to potential liabilities for personal injury or death as a result of the failure of an aircraft component that has been designed, manufactured or serviced by us. While we believe that our liability insurance is adequate to protect us from future products liability claims, if claims were to arise, such insurance coverage may not be adequate.

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Additionally, we may not be able to maintain insurance coverage in the future at an acceptable cost. Any such liability not covered by insurance or for which third party indemnification is not available could have a material adverse effect on our business.

Forward-Looking Statements—Our Forward-Looking Statements May Prove To Be Inaccurate.

This Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, including statements about forecasts, our plans, strategies and prospects in this Report. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we can give no assurance that they will be achieved. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this Report are set forth above in this “Risk Factors” section and elsewhere in this Report. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements.

ITEM 2.     PROPERTIES

TransDigm owns and operates a 130,000 square foot facility in Los Angeles, California, a 44,000 square foot facility in Cleveland, Ohio, a 219,000 square foot facility in Waco, Texas and a 219,000 square foot facility in Liberty, South Carolina. In addition, TransDigm leases and operates a 100,000 square foot facility in Fullerton, California and approximately 19,000 square feet in Richmond Heights, Ohio, which is also TransDigm’s headquarters. TransDigm also leases certain of its other non-material facilities. Management believes that its machinery, plants and offices are in satisfactory operating condition and will have sufficient capacity to meet foreseeable future needs without incurring significant additional capital expenditures.

ITEM 3.     LEGAL PROCEEDINGS

During the ordinary course of business, TransDigm is from time to time threatened with, or may become a party to, legal actions and other proceedings. While TransDigm is currently involved in some legal proceedings, management believes the results of these proceedings will not have a material effect on the financial condition, results of operations or cash flows of TransDigm. TransDigm believes that its potential exposure to those legal actions is adequately covered by its aviation product and general liability insurance.

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted during the fourth quarter of the fiscal year covered by this report to a vote of our security holders.

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PART II

ITEM 5.     MARKET FOR OUR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

There is no established public market for the common stock of Holdings.

Holders

As of September 30, 2002, there were 22 record holders of Holdings’ common stock. Holdings is the sole shareholder of TransDigm’s common stock.

Dividends

There have been no cash dividends declared on any class of common equity for the two most recent fiscal years. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and Note 9 to the consolidated financial statements appearing elsewhere in this Report for restrictions on Holdings’ ability to pay dividends and TransDigm’s ability to transfer funds to Holdings.

Securities Authorized for Issuance under Equity Compensation Plans

See “Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters” elsewhere in this Report.

ITEM 6.     SELECTED FINANCIAL DATA

Selected Historical Financial and Other Data of TransDigm Holding Company

The following table sets forth selected historical consolidated financial and other data of Holdings for each of the fiscal years ended September 30, 1998 through 2002 which have been derived from Holdings’ audited consolidated financial statements for those years. Separate historical financial information of TransDigm is not presented since the Senior Subordinated Notes are guaranteed by Holdings and all direct and indirect subsidiaries of TransDigm and since Holdings has no significant operations or assets separate from its investment in TransDigm.

The Company acquired Marathon Power Technologies Company on August 8, 1997, ZMP, Inc. and its wholly-owned subsidiary, Adams Rite Aerospace, on April 23, 1999 and Christie Electric Corp. on March 8, 2000. On March 26, 2001, the Company acquired an exclusive, worldwide license to produce and sell products composed of a lubrication and scavenge pump product line along with certain related equipment and inventory. On May 31, 2001, the Company (through Champion Aerospace) acquired substantially all of the assets and certain liabilities of the Champion Aviation Products business (“Champion Aviation”) from Federal Mogul Ignition Company, a wholly-owned subsidiary of Federal-Mogul Corporation. All of the acquisitions were accounted for as purchases. The results of operations of Champion Aerospace, Marathon, ZMP, Adams Rite Aerospace, Christie Electric Corp. and the acquired product line are included in Holdings’ consolidated financial statements from the date of each of the acquisitions.

The information presented below should be read together with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and the consolidated financial statements and the notes thereto included elsewhere herein.

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	Fiscal Year Ended September 30,
	1998		1999			2000		2001		2002
	(Dollars in Thousands)
Statement of Operations Data:
Net sales	$	110,868	$	130,818		$	150,457	$	200,773	$	248,802
Gross profit (1)		51,473		60,867			68,264		82,248		114,227
Selling and administrative		10,473		13,620			16,799		20,669		21,905
Amortization of intangibles		2,438		2,063			1,843		2,966		6,294
Research and development		1,724		2,139			2,308		2,943		2,057
Merger expenses		—		40,012			—		—		—
Operating income (1)		36,838		3,033			47,314		55,670		83,971
Interest expense, net (2)		3,175		22,722			28,563		31,926		36,538
Warrant put value adjustment		6,540		—			—		—		—
Pre-tax income (loss)		27,123		(19,689	)		18,751		23,744		47,433
Provision (benefit) for income taxes		12,986		(2,772	)		7,972		9,386		16,804
Net income (loss)	$	14,137	$	(16,917	)	$	10,779	$	14,358	$	30,629

	Fiscal Year Ended September 30,
	1998			1999			2000			2001			2002
	(Dollars in Thousands)
Balance Sheet Data (at end of period):
Cash and Cash Equivalents	$	19,486		$	2,729		$	4,309		$	11,221		$	49,206
Working capital		16,654			35,531			39,437			55,672			99,035
Total assets		115,785			164,417			168,833			372,898			402,226
Long-term debt, including current portion		45,000			266,557			261,601			413,209			408,952
Total stockholders’ equity (deficiency)		36,427			(127,622	)		(118,409	)		(103,388	)		(77,156	)
Other Financial Data:
Cash flows provided by (used in):
Operating activities	$	23,455		$	(16,219	)	$	16,305		$	22,761		$	56,452
Investing activities		(4,295	)		(44,599	)		(5,120	)		(173,588	)		(5,439	)
Financing activities		(5,071	)		44,061			(9,605	)		157,739			(13,028	)
EBITDA (3)		43,305			9,407			53,826			64,316			97,463
EBITDA, As Defined (4)		43,547			50,562			54,011			70,955			97,463
EBITDA, As Defined, margin		39.3	%		38.7	%		35.9	%		35.3	%		39.2	%
Depreciation and amortization	$	6,467		$	6,374		$	6,512		$	8,646		$	13,492
Capital expenditures		5,061			3,043			4,368			4,486			3,816
Ratio of earnings to fixed charges (5)		9.0x			.1x			1.6x			1.7x			2.3x
Ratio of EBITDA, As Defined, to interest expense		13.7x			2.2x			1.9x			2.2x			2.7x
Ratio of EBITDA, As Defined, to interest expense, As Defined (6)		13.7x			2.4x			2.1x			2.4x			3.0x
Ratio of total debt to EBITDA, As Defined		1.0x			5.3x			4.8x			5.8x			4.2x

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(1) Gross profit and operating income include the effect of a non-cash charge of $242 in fiscal 1998 due to a purchase accounting adjustment to inventory associated with the acquisition of Marathon, a non-cash charge of $1,143 in fiscal 1999 due to a purchase accounting adjustment to inventory associated with the acquisition of Adams Rite Aerospace, a non-cash charge of $185 in fiscal 2000 due to a purchase accounting adjustment to inventory associated with the acquisition of Christie, and non-cash charges of $3,193 and $3,446 in fiscal 2001 due to purchase accounting adjustments to inventory associated with the acquisitions of assets and liabilities from Champion Aviation and a lube pump product line, respectively.

(2) All of the interest expense reported for fiscal 1998 represents interest expense of TransDigm. Holdings had no interest expense prior to the Recapitalization discussed in Note 1 to the consolidated financial statements of Holdings included elsewhere in this Report. After the Recapitalization, Holdings incurred $3,706, $2,988, $2,670 and $2,000 of interest expense during fiscal 2002, 2001, 2000 and 1999, respectively, relating to the Holdings PIK Notes. Holdings has no other interest expense. TransDigm is not an obligor or a guarantor under the Holdings PIK Notes.

(3) EBITDA represents earnings before interest, taxes, depreciation, amortization and warrant put value adjustment. EBITDA is presented because management believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in Holdings’ industry. However, other companies in Holdings’ industry may calculate EBITDA differently than Holdings does. EBITDA is not a measurement of financial performance under accounting principles generally accepted in the United States of America and should not be considered as an alternative to cash flow from operating activities, as a measure of liquidity or an alternative to net income as indicators of Holdings’ operating performance or any other measures of performance derived in accordance with accounting principles generally accepted in the United States of America. See Holdings’ consolidated statements of cash flows included in Holdings’ consolidated financial statements included elsewhere in this Report.

(4) EBITDA, As Defined, is calculated as follows:

	1998		1999		2000		2001		2002
EBITDA	$	43,305	$	9,407	$	53,826	$	64,316	$	97,463
Adjustments:
Merger Expenses		—		40,012		—		—		—
Inventory Purchase Accounting
Adjustments		242		1,143		185		6,639		—
EBITDA, As Defined	$	43,547	$	50,562	$	54,011	$	70,955	$	97,463

EBITDA, As Defined, is presented herein to provide additional information with respect to the ability of Holdings to satisfy its debt service, capital expenditure and working capital requirements and because certain types of covenants in TransDigm’s and Holdings’ borrowing arrangements are tied to similar measures. While EBITDA-based measures are frequently used as measures of operations and the ability to meet debt service requirements, they are not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation.

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(5) For purposes of computing the ratio of earnings to fixed charges, earnings consist of earnings before income taxes plus fixed charges. Fixed charges consist of interest expense, amortization of debt expense and the portion (approximately 33%) of rental expense that management believes is representative of the interest component of rental expense. Earnings were insufficient to cover fixed charges by $19,689 for fiscal 1999.

(6) Interest Expense, As Defined, represents the Company’s consolidated interest expense exclusive of the non-cash interest expense recognized for the Holdings PIK Notes issued in connection with the Recapitalization. This ratio is provided because a debt covenant in the Company’s credit facility is based on a similar measure.

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ITEM 7.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

General

TransDigm is a leading supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft. Most of the Company’s products share three common characteristics: (1) highly engineered and proprietary; (2) significant aftermarket content; and (3) large shares of niche markets. TransDigm sells its products to commercial airlines, aircraft maintenance facilities, aircraft and aircraft system original equipment manufacturers (“OEMs”) and various agencies of the United States and foreign governments. TransDigm generates the majority of its income from operations and earnings before interest, taxes, depreciation and amortization (“EBITDA”) from sales of replacement parts in the commercial and defense aftermarkets. Most of TransDigm’s OEM sales are on an exclusive sole source basis; therefore, in most cases, TransDigm is the only certified provider of these parts in the aftermarket. Aftermarket parts sales are driven by the size and usage of the worldwide aircraft fleet, are historically relatively stable and generate recurring revenues over the life of an aircraft that are many times the size of the original OEM purchases. TransDigm has over 40 years of experience in most of its product lines, which allows it to benefit from a large and growing installed base of aircraft.

In connection with the Recapitalization that occurred during fiscal 1999, including the financing and the application of the proceeds thereof, TransDigm incurred certain nonrecurring costs and charges, consisting primarily of compensation costs for management bonuses and stock options that were canceled in conjunction with the recapitalization, the cost of terminating a financial advisory services agreement with an affiliate of one of our stockholders, the write-off of deferred financing costs, and professional, advisory and financing fees. TransDigm recorded a one-time charge of approximately $40.0 million ($29.0 million after tax) related to the Recapitalization during the year ended September 30, 1999. Because the cash costs included in this charge were funded principally through the proceeds of Senior Subordinated Notes and borrowings under our credit facility, this cost did not materially impact our liquidity, ongoing operations or market position.

The following is management’s discussion and analysis of certain significant factors that have affected the Company’s financial position and operating results during the periods included in the accompanying consolidated financial statements. The Company’s fiscal year ends on September 30.

Recent Developments

The aerospace industry was hit particularly hard by the events of September 11, 2001. The immediate reduction in air traffic severely impacted the profitability of the airline industry, which began to curtail flights and stretch out or cancel airframe deliveries. Facing this expected downturn, the Company implemented a series of actions to significantly reduce its cost structure while maintaining its ability to respond to market dynamics and develop new business. As part of this effort, the Company significantly reduced its workforce in October 2001.

The Company generated net sales, operating income and EBITDA, As Defined, of $248.8 million, $84.0 million and $97.5 million, respectively for fiscal 2002, and $200.8 million, $55.7 million and $71.0 million for fiscal 2001. As previously reported, on a pro forma basis (as if the Champion Aerospace acquisition had occurred on the first day of the fiscal year), the Company’s net sales, operating income and EBITDA, As Defined were $247.8 million, $65.6 million and $84.2 million in fiscal 2001. During fiscal year 2002, the Company was selected by Airbus to provide certain cockpit door security mechanisms for a complete retrofit of both their wide body and narrow body fleet. The Company received orders from Airbus for these cockpit door security mechanisms totaling approximately $22 million during fiscal 2002 and anticipates receiving additional orders in fiscal 2003 and beyond. Approximately $11 million of the orders were shipped and

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recorded as sales through September 30, 2002. Shipments will continue into fiscal 2003 and future years. The Airbus sales helped to offset declines in sales from other products during 2002 as a result of the events of September 11, 2001.

EBITDA represents earnings before interest, taxes, depreciation, and amortization. EBITDA, As Defined, is calculated by adding to EBITDA the incremental inventory costs associated with the write up of inventory required by the purchase accounting treatment applied to the acquisitions of Champion Aerospace and a product line. EBITDA and EBITDA, As Defined, are presented herein to provide additional information with respect to the ability of the Company to satisfy its debt service, capital expenditure and working capital requirements and because certain types of covenants in TransDigm’s and Holdings’ borrowing arrangements are tied to similar measures. While EBITDA-based measures are frequently used as measures of operations and the ability to meet debt service requirements, they are not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. EBITDA and EBITDA, As Defined, are not measurements of financial performance under accounting principles generally accepted in the United States of America and should not be considered as an alternative to cash flow from operating activities, as a measure of liquidity or an alternative to net income as indicators of the Company’s operating performance or any other measures of performance derived in accordance with accounting principles generally accepted in the United States of America.

This section includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. There can be no assurances that the Company’s current outlook will prove to be correct.

Significant Acquisition

In the ordinary course of business, the Company pursues acquisitions where management believes it can enhance value, reduce costs and develop new business. The following is a summary of a significant acquisition during fiscal 2001.

On May 31, 2001, TransDigm (through Champion Aerospace) acquired substantially all of the assets and certain liabilities of the Champion Aviation Products business from Federal Mogul Ignition Company, or Federal-Mogul, a wholly-owned subsidiary of Federal-Mogul Corporation, for approximately $160.1 million in cash, subject to adjustment based on the level of acquired working capital as of the closing of the acquisition. Champion Aerospace is engaged in researching, designing, developing, engineering, manufacturing, marketing, distributing and selling ignition systems and related components and other products. The products include, without limitation, igniters, spark plugs and exciters for turbine and piston aircraft applications as well as other aerospace engine and industrial applications.

Significant Accounting Policies

Holdings’ consolidated financial statements reflect the selection and application of accounting policies that require management to make significant estimates and assumptions. The Company’s significant accounting policies are described in Note 3 to Holdings’ consolidated financial statements included elsewhere in this Report.

Accounting estimates are an integral part of Holdings’ consolidated financial statements and are based on knowledge and experience about past and current events and on assumptions about future events. Significant accounting estimates reflected in Holdings’ consolidated financial statements for fiscal years 2000, 2001 and 2002 include the valuation allowances for inventory obsolescence and uncollectible accounts receivable, accrued liabilities recognized for losses on uncompleted contracts, environmental costs, sales returns and repairs, and allocations of purchase prices for business combinations, along with pending purchase price adjustment amounts.

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Results of Operations

The following table sets forth, for the periods indicated, certain operating data of the Company as a percentage of net sales.

	Fiscal Year Ended September 30,
	2000		2001		2002
Net sales	100	%	100	%	100	%
Gross profit	45		41		46
Selling and administrative	11		10		9
Amortization of intangibles	1		2		2
Research and development	2		1		1
Income from operations	31		28		34
Interest expense—net	19		16		15
Income tax provision	5		5		7
Net income	7	%	7	%	12	%

Changes in Results of Operations

Fiscal Year Ended September 30, 2002 Compared With Fiscal Year Ended September 30, 2001.

• Net Sales.  Net sales increased by $48.0 million, or 23.9%, to $248.8 million for the year ended September 30, 2002 from $200.8 million for the year ended September 30, 2001, primarily due to the Champion Aerospace and product line acquisitions as well as new business with Airbus relating to the sale of certain cockpit security door mechanisms, which more than offset decreases in sales resulting from the industry events triggered in part by the September 11, 2001 terrorist attacks.

• Gross Profit.  Gross profit (net sales less cost of sales) increased by $32.0 million, or 38.9%, to $114.2 million for the year ended September 30, 2002 from $82.2 million for the year ended September 30, 2001. This increase is attributable to higher sales discussed above and $6.6 million, or 3.3% of sales, of non-cash charges in 2001 resulting from inventory purchase price accounting adjustments pertaining to the Champion Aerospace and product line acquisitions. Gross profit as a percentage of net sales increased to 46% for the year ended September 30, 2002 from 41% for the year ended September 30, 2001, principally due to 2001 non-cash charges discussed above, cost saving actions taken after the September 11, 2001 terrorist attacks, and the strength of the Company’s propriety products and market positions.

• Selling and Administrative.  Selling and administrative expenses increased by $1.2 million, or 6.0%, to $21.9 million for the year ended September 30, 2002 from $20.7 million for the year ended September 30, 2001, primarily due to the Champion Aerospace acquisition offset by cost saving actions taken after the September 11, 2001 terrorist attacks. Selling and administrative expenses as a percentage of net sales decreased slightly from 10% for the year ended September 30, 2001 to 9% for the year ended September 30, 2002 due to increased selling and administrative efficiencies as a result of the Champion Aerospace acquisition and September 11th related cost reductions.

• Amortization of Intangibles.  Amortization of intangibles increased by $3.3 million, or 112%, to $6.3 million for the year ended September 30, 2002 from $3.0 million for the year ended September 30, 2001, primarily as a result of the intangible assets recognized in connection with the Champion Aerospace acquisition.

• Research and Development.  Research and development expense decreased $0.6 million, or 30.1%, from $2.9 million for the year ended September 30, 2001 to $2.1 million for the year ended September 30, 2002, primarily due to September 11th related cost reductions. Research and development expense as a

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percentage of net sales was consistent at 1% for each of the years ended September 30, 2002 and September 30, 2001.

• Income from Operations.  Income from operations increased $28.3 million, or 50.8%, from $55.7 million for the year ended September 30, 2001 to $84.0 million for the year ended September 30, 2002, due to the factors described previously.

• Interest Expense.  Interest expense increased by $4.6 million, or 14.4%, to $36.5 million for the year ended September 30, 2002 from $31.9 million for the year ended September 30, 2001. This was caused by an increase in the average level of outstanding borrowings as a result of the Champion Aerospace acquisition and the issuance of $75 million in aggregate principal amount of additional Senior Subordinated Notes in June 2002, partially offset by a decrease in interest rates on borrowings under the Company’s credit facility.

• Income Taxes.  Income tax expense as a percentage of income before income taxes was 35.4% for fiscal 2002 compared to 39.5% for fiscal 2001, primarily due to increased tax benefits generated by research and development tax credits and a decline in non-deductible goodwill amortization and interest expense as a percentage of income before income taxes. During the year ended September 30, 2002, the Company filed amended income tax returns for fiscal years 1998 through 2000 with the Internal Revenue Service (“IRS”) requesting refunds totaling approximately $1.8 million for research and development tax credits that had not been claimed on previously filed tax returns. Because these income tax returns are currently being audited by the IRS, the Company has not recorded potential tax refunds that could result from these additional credits.

• Net Income.  The Company earned $30.6 million for the year ended September 30, 2002 compared to $14.4 million for the year ended September 30, 2001 primarily as a result of the factors referred to above.

Fiscal Year Ended September 30, 2001 Compared With Fiscal Year Ended September 30, 2000.

• Net Sales.  Net sales increased by $50.3 million, or 33.4%, to $200.8 million for the year ended September 30, 2001 from $150.5 million for the year ended September 30, 2000. Approximately $34.3 million of the increase was due to the Champion Aerospace and product line acquisitions and the remainder was due to increased pricing and volume on existing products and new business opportunities.

• Gross Profit.  Gross profit (net sales less cost of sales) increased by $13.9 million, or 20.5%, to $82.2 million for the year ended September 30, 2001 from $68.3 million for the year ended September 30, 2000. This increase is attributable to higher sales discussed above. Gross profit as a percentage of net sales declined to 41% for the year ended September 30, 2001 from 45% for the year ended September 30, 2000, principally due to $6.6 million, 3.3% of sales, of non-cash charges from inventory purchase accounting adjustments related to the Champion Aerospace and product line acquisitions.

• Selling and Administrative.  Selling and administrative expenses increased by $3.9 million, or 23%, to $20.7 million for the year ended September 30, 2001 from $16.8 million for the year ended September 30, 2000. Approximately $2.1 million of the increase was due to the Champion Aerospace and product line acquisitions and the remainder was due to additional new business initiatives. Selling and administrative expenses as a percentage of net sales decreased slightly from 11% for the year ended September 30, 2000 to 10% for the year ended September 30, 2001.

• Amortization of Intangibles.  Amortization of intangibles increased by $1.2 million, or 60.9%, to $3.0 million for the year ended September 30, 2001 from $1.8 million for the year ended September 30, 2000. This increase is primarily the result of amortization of intangible assets recognized in connection with the Champion Aerospace acquisition.

• Research and Development.  Research and development expense increased $0.6 million, or 27.5%, to $2.9 million for the year ended September 30, 2001 compared to $2.3 million for the year ended September 30, 2000, principally due to the Champion Aerospace acquisition and additional research and development activities to complement the Company’s sales efforts. Research and development expense as a percentage of net sales decreased slightly from 2% for the year ended September 30, 2000 to 1% for the year ended September 30, 2001.

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• Income from Operations.  Income from operations increased $8.4 million, or 17.7%, from $47.3 million for the year ended September 30, 2000 to $55.7 million for the year ended September 30, 2001, due to the factors described previously.

• Interest Expense.  Interest expense increased by $3.3 million, or 11.8%, to $31.9 million for the year ended September 30, 2001 from $28.6 million for the year ended September 30, 2000. This was caused by an increase in the average level of outstanding borrowings in connection with the Champion Aerospace acquisition, partially offset by a decrease in interest rates.

• Income Taxes.  Income tax expense as a percentage of income before income taxes was 39.5% for fiscal 2001 compared to 42.5% for fiscal 2000, primarily due to increased tax benefits generated by foreign sales and a decline in non-deductible goodwill amortization and interest expense as a percentage of income before income taxes.

• Net Income.  The Company earned $14.4 million for the year ended September 30, 2001 compared to $10.8 million for the year ended September 30, 2000 primarily as a result of the factors referred to above.

Inflation

Many of the Company’s raw materials and operating expenses are sensitive to the effects of inflation, which could result in changing operating costs. The effects of inflation on the Company’s businesses during the years ended September 30, 2002, 2001 and 2000 were not significant.

Liquidity and Capital Resources

The Company generated approximately $56.5 million of cash from operating activities during the year ended September 30, 2002 compared to approximately $22.8 million during the year ended September 30, 2001. The increase is primarily due to increased earnings from the Champion Aerospace and product line acquisitions, cost saving actions the Company undertook as a result of the September 11, 2001 terrorist attacks, a decrease in accounts receivable, and the strength of the Company’s proprietary products and market positions.

Cash used in investing activities was approximately $5.4 million during the year ended September 30, 2002 compared to approximately $173.6 million used during the year ended September 30, 2001. The decrease is mainly due to the acquisitions of Champion Aerospace and a product line in fiscal 2001.

Cash used by financing activities during the year ended September 30, 2002 was approximately $13.0 million compared to approximately $157.7 million provided by financing activities during the year ended September 30, 2001. The cash used in financing activities during fiscal 2002 resulted from the repayment of approximately $84.8 million in term loans under the Company’s senior secured credit facility (the “Senior Credit Facility”) offset by proceeds from the issuance of additional Senior Subordinated Notes, net of fees, of $73.6 million. The cash provided by financing activities of approximately $157.7 million during fiscal 2001 was primarily due to the incurrence of substantial indebtedness relating to the acquisition of Champion Aerospace.

The Company’s Senior Credit Facility consists of (1) a $30.0 million Revolving Credit Facility maturing in November 2004 and (2) a Term Loan Facility in an aggregate principal amount of $263.8 million, consisting of a $43.3 million Tranche A Facility which was repaid in fiscal 2002, a $105.5 million Tranche B Facility maturing in May 2006 and a $115.0 million Tranche C Facility maturing in May 2007. As of September 30, 2002, the outstanding balances of the Revolving Credit Facility and the Tranche A, B and C facilities were $0, $0, $83.6 million and $92.2 million, respectively. No additional borrowings are available under the Tranche A, B and C facilities of the Term Loan Facility.

The interest rate for the Senior Credit Facility is, at the Company’s option, either (A) a floating rate equal to the base rate plus the applicable margin, as defined in the Senior Credit Facility, or (B) the Eurodollar rate for fixed periods of one, two, three, or six months, plus the applicable margin. The overall interest rate and applicable margin are determined based on (1) in the case of the Tranche A Facility and the Revolving Credit

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Facility, (A) an interest rate determined by the base rate, plus 2.25%, 2.00%, 1.75% or 1.50% depending on Holdings’ ability to achieve the respective debt coverage ratio specified in the Senior Credit Facility, as amended; or (B) an interest rate determined by the Eurodollar Rate, plus 3.25%, 3.00%, 2.75% or 2.50% depending on Holdings’ ability to achieve the respective debt coverage ratio specified in the Senior Credit Facility, as amended; and (2) in the case of the Tranche B Facility and the Tranche C Facility, (A) an interest rate determined by the base rate, plus 2.50%; or (B) an interest rate determined by the Eurodollar rate, plus 3.50%. The Senior Credit Facility is subject to mandatory prepayment with a defined percentage of net proceeds from certain asset sales, insurance proceeds or other awards that are payable in connection with the loss, destruction or condemnation of any assets, certain new debt and equity offerings and, during fiscal 2003 and thereafter, 50% of excess cash flow (as defined in the Senior Credit Facility) in excess of a predetermined amount under the Senior Credit Facility.

The Senior Credit Facility requires the Company to repay the outstanding indebtedness on a periodic basis through the various maturity dates. The Senior Credit Facility and the indentures governing the Senior Subordinated Notes and the Holdings PIK Notes (the “Indentures”) also contain restrictive covenants that, among other things, limit the incurrence of additional indebtedness, the payment of dividends, transactions with affiliates, asset sales, acquisitions, mergers and consolidations, liens and encumbrances, and prepayments of other indebtedness. In addition, the Senior Credit Facility and Indentures require the Company to meet certain financial ratios. Any failure to comply with the restrictions of the Senior Credit Facility, the Indentures or any other subsequent financing agreements may result in an event of default. An event of default may allow the creditors, if the agreements so provide, to accelerate the related debt as well as any other debt to which a cross-acceleration or cross-default provision applies. In addition, the lenders may be able to terminate any commitments they had made to supply the Company with further funds. The Company is currently in compliance with the covenants contained in the Senior Credit Facility and the Indentures.

TransDigm repaid the Tranche A facility and part of the Tranche B and C facilities with the net proceeds from the offering of $75 million in aggregate principal amount of additional Senior Subordinated Notes in fiscal 2002. In addition, TransDigm amended its Senior Credit Facility in connection with the offering of the additional Senior Subordinated Notes. The amendments to the Senior Credit Facility:

• allowed TransDigm to incur the indebtedness represented by the Senior Subordinated Notes;

• allow TransDigm to pay dividends to Holdings for the purpose of retiring the Holdings PIK Notes;

• allow TransDigm to incur up to $150.0 million of additional bank borrowings or subordinated debt (for which there are currently no commitments to provide such funds), subject to certain restrictions, including a requirement that such debt must be used:

• to finance acquisitions permitted by the Senior Credit Facility, as amended, or

• to pay the dividends to Holdings to retire the Holdings PIK Notes;

• allow TransDigm to effect permitted acquisitions, with the aggregate amount paid for all such permitted acquisitions not to exceed $225.0 million;

• require that at least $10.0 million must remain unused and available under the $30.0 million Revolving Credit Facility immediately following any acquisition;

• modified certain existing financial covenants; and

• waived any mandatory prepayment from excess cash flow for fiscal 2002.

The Chairman of the Board of Directors of TransDigm and Holdings, Mr. Peacock, holds a presently-exercisable put option enabling him to require Holdings to purchase up to 80% of his common stock (including shares that may be acquired through the exercise of stock options and held at least six months) at

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fair value, subject to certain restrictions under the Company’s long-term debt agreements and subject to his continued service as Chairman of the Board of TransDigm and Holdings. As of September 30, 2002, 8,114 shares of common stock that Mr. Peacock can acquire under presently-exercisable stock options are subject to the put. The estimated fair value of the 6,491 shares Mr. Peacock could require Holdings to purchase, net of the exercise price of the related stock options, totaled approximately $15.0 million at September 30, 2002. Mr. Peacock and other members of management hold put rights that may become exercisable in the future with respect to other shares of common stock, including shares of common stock subject to options. See “Management – Employment Agreements” and “Management – Stock Option Plans.” Also see Notes 13 and 16 of the consolidated financial statements included elsewhere in this Report.

The prepayment provision of the Holdings PIK Notes contains a prepayment penalty that begins to increase on December 4, 2003. TransDigm may pay a dividend to Holdings to repurchase the Holdings PIK Notes prior to December 4, 2003. The Senior Credit Facility, as amended, will permit this dividend. In addition, TransDigm anticipates that, on the date of its payment, this dividend will be permitted under the restricted payments covenant of the Indenture governing the Senior Subordinated Notes.

The following table sets forth the Company’s contractual cash obligations and other commercial commitments for the next several fiscal years (in millions):

	2003		2004		2005		2006		2007		2008 and Thereafter		Total
Contractual Cash Obligations:
Long-Term Debt (1)	$	4.5	$	13.1	$	36.7	$	54.9	$	66.6	$	231.3	$	407.1
Operating Leases		1.3		1.3		1.2		1.0		.7		3.8		9.3
Redeemable Preferred Stock (2)		—		—		—		—		—		18.4		18.4
Other Long-Term Obligations		2.6		2.2		2.2		—		—		—		7.0
Total Contractual Cash Obligations	$	8.4	$	16.6	$	40.1	$	55.9	$	67.3	$	253.5	$	441.8

(1) This assumes repayment of $31.3 million of Holdings PIK Notes in fiscal 2009. As mentioned earlier, TransDigm may pay a dividend to Holdings to be used to prepay the Holdings PIK Notes before the end of fiscal 2004. The amounts also exclude a $1.9 million premium incurred in connection with the offering of the additional Senior Subordinated Notes in fiscal 2002 which will be amortized over the term of the notes.

(2) This amount excludes $2.3 million of unamortized original issue discount and issuance costs as of September 30, 2002.

The Company’s primary future cash needs will consist of debt service, working capital and capital expenditures. The Company incurs capital expenditures for the purpose of maintaining and replacing existing equipment and facilities and, from time to time, for facility expansion. Capital expenditures totaled approximately $3.8 million and $4.5 million during fiscal 2002 and 2001, respectively. The Company expects its capital expenditures will increase moderately in the future.

The Company may from time to time seek to retire its outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, the Company’s liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. In addition, the Company may issue additional debt if prevailing market conditions are favorable to doing so.

The Company intends to pursue additional acquisitions that present opportunities consistent with the Company’s value generation strategy. The Company regularly engages in discussions with respect to potential acquisitions and investments. However, there are no binding agreements with respect to any material acquisitions at this time, and there can be no assurance that the Company will be able to reach an

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agreement with respect to any future acquisition. The Company’s acquisition strategy may require substantial capital, and no assurance can be given that the Company will be able to raise any necessary funds on acceptable terms or at all. If the Company incurs additional debt to finance acquisitions, total interest expense will increase.

The Company’s ability to make scheduled payments of principal of, or to pay the interest on, or to refinance, the Company’s indebtedness, or to fund planned capital expenditures and research and development efforts, will depend on its ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond its control. Based on its current level of operations and anticipated cost savings and operating improvements, management believes that cash flow from operations, available cash and available borrowings under the Senior Credit Facility, will be adequate to meet future liquidity needs for at least the next several years. There can be no assurance, however, that the Company’s business will generate sufficient cash flow from operations, that currently anticipated cost savings and operating improvements will be realized on schedule or at all or that future borrowings will be available to the Company under the Senior Credit Facility in an amount sufficient to enable it to pay its indebtedness or to fund its other liquidity needs. The Company may need to refinance all or a portion of its indebtedness on or before maturity. There can be no assurance that the Company will be able to refinance any of its indebtedness on commercially reasonable terms or at all. See “Risk Factors.”

New Accounting Standards

In June 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets which became effective for the Company on October 1, 2002. Under the provisions of SFAS No. 142 amortization of goodwill ceased effective October 1, 2002. The adoption of this statement will result in the elimination of approximately $5 million of annual goodwill amortization expense beginning in fiscal 2003. Goodwill amortization will be replaced with the requirement to test goodwill at least annually for impairment. The initial impairment test must be completed within six months of adoption of the new standard. The Company has not determined the impact, if any, that the impairment test will have on its consolidated financial position or results of operations.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations. This statement requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. The amount recorded as a liability will be capitalized by increasing the carrying amount of the related long-lived asset. Subsequent to initial measurement, the liability is accreted to the ultimate amount anticipated to be paid and is also adjusted for revisions to the timing of the amount of estimated cash flows. The capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, an entity either settles the obligation for its recorded amount or incurs a gain or loss upon settlement. The provisions of this statement became effective for the Company’s fiscal year ending September 30, 2003. The Company has not determined the impact, if any, that this statement will have on its consolidated financial position or results of operations.

In August 2001, the FASB issued SFAS No. 144, Accounting for Impairment or Disposals of Long-Lived Assets. This statement specifies the accounting model to be used for long-lived assets to be disposed of by sale (whether previously held and used or newly acquired) and by broadening the presentation of discontinued operations to include more disposal transactions. The provisions of this statement became effective for the Company’s fiscal year ending September 30, 2003. The Company has not determined the impact, if any, that this statement will have on its consolidated financial position or results of operations.

In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities”, which changes the accounting for costs such as lease termination costs and certain employee severance costs that are associated with a restructuring, discontinued operation, plant closing, or other exit or disposal activity initiated after December 31, 2002. The statement requires companies to recognize the fair value of costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. The Company anticipates that the adoption of this statement will not have a material effect on its financial position or results of operations.

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Quantitative and Qualitative Disclosure About Market Risk

At September 30, 2002, the Company is subject to interest rate risk with respect to borrowings under its Senior Credit Facility as the interest rates on such borrowings vary with market conditions and, thus, the amount of outstanding borrowings approximates the fair value of the indebtedness. The weighted average interest rate on the $175.8 million of borrowings outstanding under the Senior Credit Facility at September 30, 2002 was 5.4%. The effect of a hypothetical one percentage point increase in interest rates would increase the Company’s annual interest costs under the Senior Credit Facility by approximately $1.8 million based on the amount of borrowings outstanding at September 30, 2002.

Also outstanding at September 30, 2002 was $200.0 million of Company indebtedness in the form of the Senior Subordinated Notes, $31.3 million of Holdings PIK Notes and Holdings 16% Redeemable Preferred Stock with an aggregate liquidation preference of $18.4 million. In addition, as of September 30, 2002, 8,114 shares of common stock that the Chairman of the Board of Directors of TransDigm and Holdings, Mr. Peacock, can acquire under presently-exercisable stock options are subject to a put that enables Mr. Peacock to require Holdings to repurchase, at fair market value, up to 80% of such shares after such shares are held at least six months, subject to certain restrictions under the Company’s long-term debt agreements and subject to his continued service as Chairman of the Board of TransDigm and Holdings. The estimated fair value of the 6,491 shares that Mr. Peacock could require Holdings to purchase, net of the exercise price of the related stock options, totaled approximately $15.0 million at September 30, 2002. Mr. Peacock and other members of management hold put rights that may become exercisable in the future with respect to other shares of common stock, including shares of common stock subject to options. The interest rates on the Senior Subordinated Notes and the Holdings PIK Notes are fixed at 10 3/8 % and 12% per year, respectively, and the dividends accrue on the Holdings 16% Redeemable Preferred Stock at 16% annually. The fair value of the Senior Subordinated Notes was approximately $205 million at September 30, 2002, based upon quoted market prices. A determination of the fair value of the Holdings PIK Notes and the Holdings 16% Redeemable Preferred Stock is not considered practicable because they are not publicly traded. Because the common stock subject to put rights is required to be repurchased at fair market value, the value of Holdings’ repurchase obligation will increase to the extent the fair market value of Holdings’ common stock increases.

Additional Disclosure Required by Indenture

Separate financial statements of TransDigm Inc. are not presented since Holdings has no operations or assets separate from its investment in TransDigm Inc. and since the Senior Subordinated Notes are guaranteed by Holdings and all direct and indirect subsidiaries of TransDigm Inc. (other than one wholly-owned, non-guarantor subsidiary that has inconsequential assets, liabilities and equity). In addition, Holdings’ only obligations at September 30, 2002 other than its guarantees of debt under the indenture that governs the Senior Subordinated Notes and the Senior Credit Facility consist of (1) the Holdings PIK Notes of $31.3 million due in fiscal 2009; (2) the Holdings 16% Redeemable Preferred Stock with an aggregate liquidation preference of $18.4 million; and (3) “put” rights held by certain persons to require Holdings to repurchase, at fair market value, shares of Holdings’ common stock (including shares that may be acquired through the exercise of stock options) held by such persons. The Holdings PIK Notes bear interest in the form of additional Holdings PIK Notes at 12% annually and the Holdings 16% Redeemable Preferred Stock accrues dividends in cash, or at Holdings’ option, in the form of additional shares of Holdings cumulative redeemable preferred stock, at 16% annually. Interest expense recognized on the Holdings PIK Notes during the year ended September 30, 2002 was $3.7 million. Dividend accrual on the Holdings 16% Redeemable Preferred Stock during the year ended September 30, 2002 was $2.6 million. As of September 30, 2002, up to 80% of the 8,114 shares of common stock that the Chairman of the Board of Directors of TransDigm and Holdings, Mr. Peacock, can acquire under presently-exercisable stock options are subject to a put after such shares are held at least six months, subject to certain restrictions under the Company’s long-term debt agreements and subject to his continued service as Chairman of the Board of TransDigm and Holdings. The estimated fair value of the 6,491 shares that Mr. Peacock could require Holdings to purchase, net of the exercise price of the related stock options, totaled approximately $15.0 million at September 30, 2002. Mr. Peacock and other members of management hold put rights that may become exercisable in the future with respect to other

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shares of common stock, including shares of common stock subject to options. Because the common stock subject to put rights is required to be repurchased at fair market value, the value of Holdings’ repurchase obligation will increase to the extent the fair market value of Holdings’ common stock increases.

ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The response to this item is submitted in a separate section of this report following the signature page.

ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL                    DISCLOSURE

There were no changes in or disagreements with accountants on accounting and financial disclosure.

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PART III

ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information concerning the directors and executive officers of Holdings and the Company:

Name	Age	Position
Douglas W. Peacock	64	Chairman of the Board of Directors
W. Nicholas Howley	50	President, Chief Executive Officer and Director
Robert S. Henderson	46	President, AdelWiggins Group
Raymond F. Laubenthal	41	President, AeroControlex Group
John F. Leary	55	President, Adams Rite Aerospace, Inc.
Albert J. Rodriguez	42	President, Marathon Power Technologies Company
W. Todd Littleton	39	President, Champion Aerospace Inc.
Gregory Rufus	46	Vice President and Chief Financial Officer
Stephen Berger	63	Director
Muzzafar Mirza	44	Director
William Hopkins	39	Director
Thomas R. Wall, IV	44	Director
John W. Paxton	65	Director

Mr. Peacock has been Chairman of the Board of Directors of TransDigm since its inception in September 1993 and Chairman of the Board of Directors of Holdings since the consummation of the Recapitalization. Prior to December 2001, Mr. Peacock also served as Chief Executive Officer of TransDigm and Holdings. He is also a director of Microporous Products, L.P. Prior to joining TransDigm, Mr. Peacock spent six years with IMO Industries Inc. as Executive Vice President of IMO’s Instruments and Aero Components Group from 1991 to 1993, Executive Vice President of Power Systems from 1989 to 1991, and managed IMO’s Turbomachinery business from 1987 to 1989. Prior to joining IMO, Mr. Peacock spent 15 years in various managerial positions at Westinghouse Electric Corp. Mr. Peacock received a B.S. degree in chemical engineering from Washington State University and a Ph.D. in physical chemistry from the University of Illinois.

Mr. Howley has been a Director and President of TransDigm and Holdings since the consummation of the Recapitalization. He has served as Chief Executive Officer of TransDigm and Holdings since December 2001. From the completion of the Recapitalization until December 2001, Mr. Howley served as President and Chief Operating Officer of TransDigm and Holdings. Mr. Howley served as Executive Vice President of TransDigm and President of the AeroControlex Group from TransDigm’s inception in September 1993 to the date of the consummation of the Recapitalization. Prior to joining TransDigm, Mr. Howley served as General Manager of IMO Industries Inc. Aeroproducts Division, and Director of Finance for the 15 divisions of IMO’s Turbomachinery, Aerospace, and Power Transmission groups. Mr. Howley received his B.S. in engineering from Drexel University and an MBA from the Harvard University Graduate School of Business.

Mr. Henderson became President of the AdelWiggins Group in August 1999. He previously had served as President of Marathon Power Technologies Company since March 1998. From November 1994 until March 1998, he served as Manager of Operations for the AdelWiggins Group. From 1991 until 1994, Mr. Henderson served as Operations Manager at RainBird Sprinkler. Mr. Henderson received his B.A. in mathematics from Brown University and attended the Harvard University Graduate School of Business.

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Mr. Laubenthal has been President of the AeroControlex Group since November 1998. From December 1996 until November 1998, Mr. Laubenthal served as Director of Manufacturing and Engineering for the AeroControlex Group and had prior extensive experience in manufacturing and engineering at Parker Hannifin Corporation and Textron. From October 1993 to December 1996, Mr. Laubenthal served as Director of Manufacturing for the AeroControlex Group. Mr. Laubenthal received a B.S. degree in mechanical engineering from Case Western Reserve University and an MBA from Northern Illinois University.

Mr. Leary has been President of Adams Rite Aerospace, Inc. since June 1999. From 1995 to June 1999, Mr. Leary was a General Operations Manager with Furon Company. From 1991 to 1995, Mr. Leary was the Plant Manager of Emerson Electric, Chromalox Division. Mr. Leary received a B.S. degree in Mechanical Engineering from the New Jersey Institute of Technology.

Mr. Rodriguez has been President of Marathon Power Technologies Company since September 1999. From January 1998 until September 1999, Mr. Rodriguez served as Director of Commercial Operations for the AeroControlex Group. From 1993 to 1997, Mr. Rodriguez served as Director of Sales and Marketing for the AeroControlex Group. Mr. Rodriguez has prior experience with IMO Industries, Esterline, as well as Kaiser Aerospace. Mr. Rodriguez received his Bachelor of Engineering with a concentration in Chemical Engineering from Stevens Institute of Technology.

Mr. Littleton has been President of Champion Aerospace Inc. since March 2002. He previously had served as Director of Operations, Engineering for Champion Aerospace Inc. since July 2001. Mr. Littleton came to this position from Robert Bosch Corp. where he was Director of Manufacturing for Anti-Lock Brakes and Fuel Systems Products in Anderson, S.C. from 1989 to July 2001. Prior to that, he was Business Unit Manager with responsibility for Bosch’s fuel systems product business. His prior experience also includes various operating management and engineering assignments with WABCO and T&S Brass. Mr. Littleton received a B.S. degree in mechanical engineering from Auburn University and has completed the Executive Leadership Skills Program at the University of South Carolina.

Mr. Rufus became Vice President and Chief Financial Officer in August 2000. Prior to joining TransDigm, Mr. Rufus spent 19 years at Emerson Electric, including divisional vice president responsibilities at Ridge Tool, Liebert Corp., and Harris Calorific, all part of the Emerson organization. Prior to Emerson, Mr. Rufus spent four years with Ernst & Young. Mr. Rufus received his CPA certification in Ohio in 1980. Mr. Rufus received a B.A. degree in accounting from Baldwin-Wallace College and attended the Weatherhead School of Management at Case Western Reserve University.

Mr. Berger has served as a Director of Holdings and TransDigm since the consummation of the Recapitalization. He is also currently serving as Chairman of Odyssey Investment Partners, LLC. Prior to joining Odyssey Investment Partners, LLC, Mr. Berger was a general partner of Odyssey Partners, LP. From 1990 to 1993, Mr. Berger served as Chairman and CEO of FGIC, a wholly-owned subsidiary of GE Capital Corp., and subsequently became Executive Vice President of GE Capital Corp. From 1985 to 1990, Mr. Berger was Executive Director of the Port Authority of New York and New Jersey. Mr. Berger presently serves as a member of the Board of Trustees of Brandeis University and a member of the Board of Directors of Dayton Superior.

Mr. Mirza has served as a Director of Holdings and TransDigm since the consummation of the Recapitalization. Mr. Mirza is also currently a Managing Principal of Odyssey Investment Partners, LLC and was a principal in the private equity investing group of Odyssey Partners, LP from 1993 to 1997. In addition, Mr. Mizra is currently a member of the Board of Directors of Dresser, Inc. From 1988 to 1993, Mr. Mirza was employed by the merchant banking group of GE Capital Corp.

Mr. Hopkins has served as a Director of Holdings and TransDigm since the consummation of the Recapitalization. Mr. Hopkins is also currently a Managing Principal of Odyssey Investment Partners, LLC and was a principal in the private equity investing group of Odyssey Partners, LP from 1994 to 1997. In addition, Mr. Hopkins is currently a member of the Board of Directors of Dayton Superior Corporation. Prior to joining Odyssey, Mr. Hopkins was a member of the merchant banking group of GE Capital Corp.

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Mr. Wall has served as a Director of Holdings and TransDigm since their inception in 1993. Mr. Wall joined Kelso & Company in 1983 and has served as a Managing Director of Kelso & Company since 1990. Mr. Wall presently serves as a member of the Board of Directors of Citation Corporation, Consolidated Vision Group, Inc., Key Components, Inc., Mitchell Supreme Fuel Company, Mosler Inc., Peebles, Inc., and 21st Century Newspapers, Inc.

Mr. Paxton has served as a Director of Holdings and TransDigm since the consummation of the Recapitalization. Mr. Paxton has been President of the Bar Code Business Unit of Zebra Technologies since February 2002 and is currently a member of its Board of Directors. Immediately prior to joining Zebra, Mr. Paxton headed Paxton Associates, LLC, a Business Consulting Firm. From March 1999 to December 2000, Mr. Paxton was Chairman and Chief Executive Officer of Telxon Corporation. In December 1998, Mr. Paxton became Chairman of Odyssey Industrial Technologies, LLC, a joint venture partnership with Odyssey Investment Partners, a private equity fund engaged in making investments primarily in middle market companies in a variety of industries. Beginning in October 1995, he was affiliated with Monarch Marking Systems and Paxar Corporation, following Paxar’s acquisition of Monarch in March 1997. In October 1995, Mr. Paxton was named Monarch’s President and Chief Executive Officer and served on Monarch’s board of directors. In October 1997, he became Executive Vice President of Paxar Corporation and President of the company’s Printing Solutions Group and served in these positions until the end of 1998. Mr. Paxton is a director of Dayton Superior Corporation, whose board he joined in 2001.

Board Committees

Holdings’ Board of Directors has a Compensation Committee and an Audit Committee. The Compensation Committee, which is comprised of Messrs. Berger, Mirza and Hopkins, establishes salaries, incentives and other forms of compensation for executive officers and administers incentive compensation and benefit plans provided for employees. The Audit Committee, which is comprised of Messrs. Mirza and Hopkins, reviews Holdings’ and TransDigm’s audit policies and oversees the engagement of Holdings’ and TransDigm’s independent auditors.

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ITEM 11.     EXECUTIVE COMPENSATION

The following table sets forth the aggregate compensation paid or accrued by TransDigm for services rendered during fiscal 2002, 2001, and 2000 to each Chief Executive Officer of TransDigm during fiscal 2002 and each of the four other most highly paid individuals who were serving as executive officers of TransDigm at the end of fiscal 2002 (collectively the “Named Executive Officers”):

SUMMARY COMPENSATION TABLE

									Long-Term Compensation
	Annual Compensation								Awards
Name and Principal Position	Fiscal Year	Salary		Bonus		Other Annual Compensation (2)			Securities Underlying Options/SARs	All Other Compensation
Douglas W. Peacock,	2002	$	162,500	$	10,000	$	24,193	(9)	—	$	14,786	(3)
Chairman of the Board and	2001		345,000		420,000				—		17,795
Chief Executive Officer (1)	2000		330,000		200,000				—		18,575
W. Nicholas Howley,	2002		310,000		200,000				—		13,922	(4)
President, Chief Executive	2001		243,750		335,000				—		12,641
Officer and Director (1)	2000		225,000		135,000				—		12,094
Robert S. Henderson,	2002		166,875		65,000				—		10,046	(5)
President of AdelWiggins	2001		160,250		87,500				—		10,595
	2000		155,000		45,000				—		10,583
Raymond F. Laubenthal	2002		150,000		75,000				—		10,482	(6)
President of AeroControlex	2001		134,250		90,000				—		9,020
	2000		121,998		37,500				—		8,660
John F. Leary	2002		160,125		70,000				50 options		10,555	(7)
President of Adams Rite	2001		154,500		65,000				—		9,091
Aerospace	2000		148,750		55,000				—		8,742
Gregory Rufus,	2002		147,000		65,000				175 options		10,206	(8)
Vice President and	2001		137,250		92,500				—		7,185
Chief Financial Officer	2000		13,207		40,000				575 options		279

(1) Effective December 3, 2001, Mr. Howley was named to the position of President and Chief Executive Officer. He previously served as President, Chief Operating Officer and Director. Mr. Peacock, who previously served as Chief Executive Officer, continues to serve as Chairman of the Board.

(2) Does not include perquisites and other personal benefits because the value of these items did not exceed the lesser of $50,000 or 10% of reported salary and bonus of any of the listed executives, other than Mr. Peacock.

(3) Includes $6,000 in contributions by TransDigm, as projected to calendar year end 2002, to a plan established under Section  401(k) of the Internal Revenue Code (the “401(k) plan”) and $8,786 of Company paid life insurance.

(4) Includes $12,000 in contributions by TransDigm, as projected to calendar year end 2002, to the 401(k) plan and $1,922 in Company-paid life insurance.

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(5) Includes $8,706 in contributions by TransDigm, as projected to calendar year end 2002, to the 401(k) plan and $1,340 in Company-paid life insurance.

(6) Includes $9,180 in contributions by TransDigm, as projected to calendar year end 2002, to the 401(k) plan and $1,302 in Company-paid life insurance.

(7) Includes $9,690 in contributions by TransDigm, as projected to calendar year end 2002, to the 401(k) plan and $865 in Company-paid life insurance.

(8) Includes $9,000 in contributions by TransDigm, as projected to calendar year end 2002, to the 401(k) plan and $1,206 in Company-paid life insurance.

(9) Includes perquisites, $18,168 of which was for the imputed value for use of a Company automobile.

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AGGREGATED OPTION/SAR EXERCISES

IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES

Name	Exercise Price		Shares Acquired on Exercise	Value Realized	Number of Shares Underlying Unexercised Options/SAR at Fiscal Year-End		Value of Unexercised In- The Money Options/SARs At Fiscal Year-End (2)
Douglas W. Peacock,	$	100	—	—	Exercisable	2,992	Exercisable	$	7,420,160
Chairman of the Board (1)					Unexercisable	—	Unexercisable		—
		335	—	—	Exercisable	3,097	Exercisable		6,952,765
					Unexercisable	—	Unexercisable		—
		1,040	—	—	Exercisable	2,025	Exercisable		3,118,500
					Unexercisable	2,475	Unexercisable		3,811,500
W. Nicholas Howley,		100	—	—	Exercisable	3,890	Exercisable		9,647,200
President, Chief Executive					Unexercisable	—	Unexercisable		—
Officer and Director (1)		335	—	—	Exercisable	1,900	Exercisable		4,265,500
					Unexercisable	—	Unexercisable		—
		1,040	—	—	Exercisable	2,025	Exercisable		3,118,500
					Unexercisable	2,475	Unexercisable		3,811,500
Robert S. Henderson,		154	—	—	Exercisable	172	Exercisable		417,272
President of AdelWiggins					Unexercisable	—	Unexercisable		—
		200	—	—	Exercisable	400	Exercisable		952,000
					Unexercisable	—	Unexercisable		—
		335	—	—	Exercisable	200	Exercisable		449,000
					Unexercisable	—	Unexercisable		—
		1,040	—	—	Exercisable	315	Exercisable		485,100
					Unexercisable	385	Unexercisable		592,900
Raymond F. Laubenthal		100	—	—	Exercisable	80	Exercisable		198,400
President of AeroControlex					Unexercisable	—	Unexercisable		—
		200	—	—	Exercisable	400	Exercisable		952,000
					Unexercisable	—	Unexercisable		—
		335	—	—	Exercisable	300	Exercisable		673,500
					Unexercisable	—	Unexercisable		—
		1,040	—	—	Exercisable	315	Exercisable		485,100
					Unexercisable	385	Unexercisable		592,900
John F. Leary		1,040	—	—	Exercisable	225	Exercisable		346,500
President of Adams Rite					Unexercisable	275	Unexercisable		423,500
Aerospace		1,490	—	—	Exercisable	0	Exercisable		—
					Unexercisable	50	Unexercisable		54,500
Gregory Rufus,		1,180	—	—	Exercisable	259	Exercisable		362,600
Vice President and					Unexercisable	316	Unexercisable		442,400
Chief Financial Officer		1,490	—	—	Exercisable	—	Exercisable		—
					Unexercisable	175	Unexercisable		190,750

(1) Effective December 3, 2001, Mr. Howley was named to the position of President and Chief Executive Officer. He previously served as President, Chief Operating Officer and Director. Mr. Peacock, who previously served as Chief Executive Officer, continues to serve as Chairman of the Board.

(2) The value of an unexercised option equals the aggregate fair value of the shares underlying the option (based on a per share value of $2,580 at September 30, 2002), less the aggregate exercise price of the option. The $2,580 per share value used in this calculation is only an estimate as of September 30, 2002. The actual share value on that date may have been different, and share values are subject to change over time.

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Management Stockholders’ Agreement

In connection with the Recapitalization, Holdings, Odyssey and the employee stockholders of Holdings, including the Named Executive Officers (the “Management Stockholders”) entered into a Management Stockholders’ Agreement (the “Management Stockholders’ Agreement”) which governs the shares of common stock of Holdings (the “Common Stock”) retained by such persons after the Recapitalization and any new shares acquired thereafter, including pursuant to the exercise of options. Subsequent to the Recapitalization, certain additional Management Stockholders have been signatories to the Management Stockholders’ Agreement. See “Executive Compensation—Stock Option Plan.”

The Management Stockholders’ Agreement provides that, except for certain transfers to family members and family trusts, no Management Stockholder may transfer Common Stock until the fifth anniversary of the Recapitalization, and thereafter, any proposed transfer will be subject to Holdings’ right of first refusal.

The Management Stockholders’ Agreement also provides that upon termination of the employment of a Management Stockholder under certain circumstances, that Management Stockholder will have certain put rights and Holdings will have certain call rights regarding any Common Stock or any options to purchase Common Stock, in each case, owned by him at that time.

Pursuant to his employment agreement, as amended, Mr. Peacock has additional rights to require Holdings to repurchase a portion of his Common Stock under certain circumstances. See “Executive Compensation-Employment Agreements.”

If the provisions of any law, the terms of credit and financing arrangements or Holdings’ financial circumstances would prevent Holdings from making a repurchase of shares pursuant to the Management Stockholders’ Agreement, Holdings will not make such purchase until all such prohibitions lapse, and will then pay the Management Stockholder, in addition to the repurchase price, a specified rate of interest on the repurchase price.

The Management Stockholders’ Agreement further provides that, in the event of certain types of transfers of Common Stock by Odyssey, the Management Stockholders may participate in those transfers and/or Odyssey may require the Management Stockholders to transfer their shares in those transactions, in each case, on a pro rata basis.

Pursuant to the Management Stockholders’ Agreement, the Management Stockholders are entitled to participate on a pro rata basis with, and on the same terms as, Odyssey in any future offering of Common Stock. Those participation rights will lapse following a public offering of Common Stock if the Common Stock so offered is then listed on a national exchange or if the public offering includes 50% or more of the outstanding Common Stock that will have been issued following the offering.

Employment Agreements

In connection with the Recapitalization, Holdings entered into an employment agreement with each of Messrs. Peacock and Howley. Effective as of December 3, 2001, Mr. Peacock resigned from his position as Chief Executive Officer of Holdings and TransDigm, but continues to serve as Holdings’ and TransDigm’s Chairman of the Board. Mr. Howley has succeeded Mr. Peacock to the position of Chief Executive Officer of Holdings and TransDigm. In connection with these events, Holdings amended the terms of its employment agreements with Messrs. Peacock and Howley.

Pursuant to the amended agreement with Mr. Peacock, Mr. Peacock will serve as Holdings’ and TransDigm’s Chairman of the Board through the earlier of December 3, 2006 or the occurrence of a “change in control” (as defined in his employment agreement), during which time he will receive an annual base salary at a rate no less than $100,000. In the event Mr. Peacock’s service terminates by reason of death, disability, termination without “cause” or resignation with “good reason” (all as defined in his employment agreement), Holdings will continue payment of base salary, bonus and other perquisites and benefits for 18 months thereafter. In the event Mr. Peacock’s services are terminated for any reason (other than for ”cause”), Holdings will provide medical coverage for Mr. Peacock and his spouse following such termination for their respective lives.

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Under Mr. Howley’s amended employment agreement, Mr. Howley will serve as Holdings’ and TransDigm’s President and Chief Executive Officer for a period of at least five years, during which time he will receive an annual base salary at a rate no less than $335,000. In the event Mr. Howley’s employment terminates by reason of death, disability, termination without “cause” or resignation with “good reason” (all as defined in his employment agreement), Holdings will continue payment of base salary, bonus and other perquisites and benefits for 18 months thereafter.

Pursuant to these employment agreements, Messrs. Peacock and Howley are also eligible for annual salary increases as determined by Holdings’ Compensation Committee, and annual cash bonuses based on achievement of performance criteria established by Holdings’ Board of Directors.

Additionally, Mr. Peacock’s employment agreement provides that so long as he serves as Chairman of the Board, Mr. Peacock can require Holdings to repurchase up to 80% of his common stock (including certain options to purchase common stock), provided that Holdings satisfy certain financial targets. Mr. Peacock’s right to require the repurchase of these shares became exercisable in fiscal 2002 and Mr. Peacock shall have this right so long as he continues to serve as Chairman of the Board for Holdings and TransDigm. Holdings will be permitted to honor this repurchase obligation to Mr. Peacock by issuing notes under certain circumstances. Mr. Peacock may also require repurchase of his common stock under certain circumstances as set forth in the management stockholders’ agreement. See “Management Stockholders’ Agreement.”

1994 Stock Incentive Plan

In May 1994, Holdings adopted the TransDigm Holding Company Stock Incentive Plan (the “1994 Plan”). The 1994 Plan governs the 14,716 options outstanding as of September 30, 2002 that were retained pursuant to the Recapitalization (the “Rollover Options”), including the Rollover Options held by the Named Executive Officers. A total of 37,500 shares of Common Stock of Holdings were reserved for issuance under the 1994 Plan. However, Holdings has no intention of issuing any future options under the 1994 Plan.

The Compensation Committee has discretion under the 1994 Plan to adjust options to reflect certain specified events such as stock dividends, stock splits, recapitalizations, mergers or reorganizations of, or by Holdings. In addition, the Board of Directors has the right to suspend or terminate the 1994 Plan, provided that no action of the Board of Directors may alter or impair a 1994 Plan participant’s rights without his or her consent. The stock option agreements issued under the 1994 Plan may be altered or amended by the Compensation Committee, provided that no action of the Compensation Committee may adversely affect a 1994 Plan participant’s rights under any such stock option agreement without his or her consent.

The Rollover Options are fully vested, nonforfeitable and have exercise prices equal to the per-share fair market value of Holdings’ Common Stock at the time of grant. Certain of the Rollover Options are intended to qualify as “incentive stock options” to the extent permitted under the Internal Revenue Code. The Rollover Options generally will expire 10 years after grant and may expire earlier in the event of a participant’s termination of employment.

1998 Stock Option Plan

During fiscal 1999, Holdings adopted the 1998 Stock Option Plan (the “Option Plan”), pursuant to which stock options may be granted to Independent Directors (as defined in the Option Plan), or to employees or consultants of Holdings, TransDigm and any subsidiary of Holdings or TransDigm (collectively, the “Plan Participants”). A total of 18,990 shares of Common Stock of Holdings were reserved for issuance under the Option Plan and 1,975, 1,570, 1,695 and 15,115 of the options were issued during fiscal 2002, 2001, 2000 and 1999, respectively. During fiscal 2002, 2001 and 2000, stock options pertaining to 960, 320 and 1,995 shares of Common Stock, respectively, were forfeited by employees due to terminations of such employees’ employment. Options to purchase these shares may be reissued by Holdings to other Plan Participants in the future. Holdings’ Chief Executive Officer has discretion to select the Plan Participants and to specify the terms of such options, including the number of shares, the exercise price and the terms of vesting and expiration of options, subject to approval by the Compensation Committee.

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The Compensation Committee has discretion under the Option Plan to adjust options to reflect certain specified events such as stock dividends, stock splits, recapitalizations, mergers or reorganizations of, or by Holdings. In addition, the Board of Directors has the right to amend, suspend or terminate the Option Plan, subject to stockholder approval for certain amendments.

In connection with the Recapitalization, and subsequent thereto, Holdings has granted options to certain employees of TransDigm, including the Named Executive Officers, for the purchase of shares of Common Stock of Holdings (the “New Options”). Such New Options are intended to qualify as “incentive stock options” to the extent permitted under the Internal Revenue Code, and have an exercise price equal to the price per share paid by Odyssey in connection with the Recapitalization (with respect to the New Options issued in connection with the Recapitalization) or the per-share fair market value of Holdings’ Common Stock at the time of grant (with respect to later grants of New Options). The New Options generally will expire 10 years after grant and may expire earlier in the event of a holder’s termination of employment.

Prior to May 31, 2001, the New Options vested upon the passage of time and/or upon Holdings’ attainment of certain financial targets. On May 31, 2001, the New Options were modified to provide for the vesting of an additional percentage of each optionee’s New Options so that a total of 45% of each optionee’s (including each Named Executive Officer’s) New Options outstanding as of May 31, 2001 were vested effective September 30, 2001. Additionally, such May 31, 2001 modification provided that, subject to each optionee’s (including each Named Executive Officer’s) continued employment with Holdings or TransDigm and, in the case of Mr. Peacock, continued service as Chairman of the Board of Holdings and TransDigm, the remaining 55% of each optionee’s (including each Named Executive Officer’s) New Options were eligible to become exercisable upon the earlier of (1) the date which is seven years and nine months after such New Option was granted, or (2) a “change in control,” if any, on or prior to September 30, 2003, pursuant to which certain investor return targets are satisfied.

Effective July 8, 2002, the New Options were further modified so that, subject to each optionee’s (including each Named Executive Officer’s) continued employment with TransDigm or Holdings and, in the case of Mr. Peacock, continued service as Chairman of the Board of Holdings and TransDigm, the remaining 55% of each optionee’s (including each Named Executive Officer’s) New Options are eligible to become exercisable upon the earlier of (1) the date which is seven years and nine months after such New Option was granted, or (2) a “change in control”, if any, on or prior to September 30, 2004, pursuant to which certain investor return targets are satisfied.

New Options issued after May 31, 2001 vest as follows: 45% of each such New Option is eligible to become exercisable, subject to each optionee’s continued employment with TransDigm or Holdings, on the first anniversary of the grant date of such New Option and the remaining 55% of each such New Option is eligible to become exercisable, subject to each optionee’s continued employment with TransDigm or Holdings, upon the earlier of (i) the date which is seven years and nine months after such grant date, or (ii) a “change in control,” if any, on or prior to September 30, 2004, pursuant to which certain investor return targets are satisfied.

1999 Stock Purchase Plan

During fiscal 1999, Holdings adopted the 1999 Stock Purchase Plan of TransDigm Holding Company (the “Stock Purchase Plan”), pursuant to which Holdings may grant employees, consultants and other persons having a unique relationship with Holdings or one of its subsidiaries the right to purchase Common Stock of Holdings (“Grants”). A total of 671 shares of Common Stock of Holdings have been reserved for Grants under the Stock Purchase Plan.

The Compensation Committee has discretion to select the Stock Purchase Plan’s participants and to specify the terms of the Grants, including the price of the Common Stock to be purchased under a Grant and any conditions on a participant’s right to transfer or sell his Common Stock, which terms shall be set forth in a subscription agreement. The price of the Common Stock purchased under a Grant may not be less than 50% of the Fair Market Value of the Common Stock on the date of a Grant. Each Grant shall be subject to the Management Stockholders’ Agreement.

The Compensation Committee has discretion under the Stock Purchase Plan to adjust options to reflect certain specified events such as stock dividends, stock splits, recapitalizations, mergers or reorganizations of, or by Holdings. The Compensation Committee may also make amendments to outstanding Grants consistent with the Stock Purchase Plan, provided that amendments adverse to a participant may only be made with a participant’s consent unless the amendment is provided for or contemplated in the subscription agreement and the Management Stockholders Agreement. In addition, the Board of Directors has the right to amend, suspend or terminate the Stock Purchase Plan at any time.

No Grants may be made beyond five years after the effective date of the Stock Purchase Plan. Holdings has not yet awarded any Grants under the Stock Purchase Plan.

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ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of the Common Stock of Holdings as of September 30, 2002 with respect to each beneficial owner of more than 5% of the outstanding shares of Holdings:

	Common Stock Beneficially Owned
Name and Address of Beneficial Owner	Shares		Percentage
Odyssey Investment Partners, LP	100,240	(1)	83.7	%
280 Park Avenue
West Tower, 38th Floor
New York, NY 10017
Kelso & Company	18,422	(2)	15.4
320 Park Avenue, 24 Floor
New York, NY 10022

The following table sets forth the beneficial ownership as of September 30, 2002 of the Common Stock of Holdings by each director, the Named Executive Officers and by all officers and directors as a group:

	Common Stock Beneficially Owned
Name of Beneficial Owner	Shares		Percentage
Directors
Stephen Berger	100,240	(1)	83.7
William Hopkins	100,240	(1)	83.7
W. Nicholas Howley	7,815	(3)	6.1
Muzzafar Mirza	100,240	(1)	83.7
John W. Paxton	—		*
Douglas W. Peacock	8,925	(4)	7.0
Thomas R. Wall, IV	18,422	(2)	15.4
Non-Directors
Robert S. Henderson	1,087	(5)	*
Raymond F. Laubenthal	1,095	(6)	*
John F. Leary	225	(7)	*
Gregory Rufus	259	(8)	*
All officers and directors as a group (13 members)	139,065	(9)	99.8

• Less than 1.0%

(1) Consists of 100,240 shares of common stock owned by Odyssey Investment Partners, LP (the “Fund”), Odyssey Coinvestment, LLC (“Coinvestment”), TD Coinvestment I, LLC (“TD I”), and TD Coinvestment II, LLC (“TD II” and together with the Fund, Coinvestment and TD I, “Odyssey”). Odyssey Capital Partners, LLC is the general partner of the Fund. Odyssey Investment Partners, LLC is the manager of the Fund and the managing member of each of Coinvestment, TD I and TD II. Stephen Berger, Muzzafar Mirza, William Hopkins (directors of Holdings) and Brian Kwait and Paul Barnett are managing members of Odyssey Capital Partners, LLC and Odyssey Investment Partners, LLC and, therefore, may each be deemed to share voting and investment power with respect to such shares deemed to be owned by Odyssey. Each of them disclaims beneficial ownership of such shares.

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(2) KIA IV-TD, LLC (“KIA IV-TD) and Kelso Equity Partners II, L.P. (“KEP II”) have beneficial ownership of 17,473 and 949 shares, respectively. Due to their common control, KIA IV-TD, Kelso Partners IV, L.P., the managing member of KIA IV-TD (“KP IV” and, together with KIA IV-TD and KEP II, “Kelso”), and KEP II could be deemed to beneficially own each other’s shares, but each disclaims such beneficial ownership. In addition, Mr. Wall, Joseph S. Schuchert, Frank T. Nickell, George E. Matelich, Michael B. Goldberg, David I. Wahrhaftig, Frank K. Bynum, Jr. and Phillip E. Berney may be deemed to share beneficial ownership of shares beneficially owned by KIA IV-TD, KP IV and KEP II by virtue of their status as general partners of KP IV, which is the managing member of KIA IV-TD, and as general partners of KEP II, but each disclaims such beneficial ownership.

(3) Includes options to purchase 7,815 shares exercisable within 60 days.

(4) Includes options to purchase 8,114 shares exercisable within 60 days and 811 shares and votes owned by TD Equity LLC, of which Mr. Peacock is the managing member. Mr. Peacock disclaims ownership of the 811 shares and votes owned by TD Equity LLC.

(5) Includes options to purchase 1,087 shares exercisable within 60 days.

(6) Includes options to purchase 1,095 shares exercisable within 60 days.

(7) Includes options to purchase 225 shares exercisable within 60 days.

(8) Includes options to purchase 259 shares exercisable within 60 days.

(9) As described in footnotes (1), (2), and (4), Messrs. Berger, Hopkins and Mirza may each be deemed to share investment and voting power with respect to 100,240 shares deemed to be beneficially owned by the General Partner of Odyssey, Mr. Wall may be deemed to share investment and voting power with respect to 18,422 shares owned by Kelso and Mr. Peacock may be deemed to share investment and voting power with respect to 811 shares owned by TD Equity LLC. Each of Messrs. Berger, Hopkins, Mirza, Wall and Peacock disclaims ownership of such shares. Excluding such shares, all officers and directors as a group beneficially own 19,592 shares, or 14.1%, which are purchasable within 60 days upon the exercise of options.

Equity Compensation Plan Information

The following table gives information about the Company’s common stock that may be issued upon the exercise of options under its 1994 Stock Incentive Plan, its 1998 Stock Option Plan and its 1999 Stock Purchase Plan as of September 30, 2002.

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)	(c)
Equity compensation plans approved by security holders	0	n/a	0
Equity compensation plans not approved by security holders (1)	31,706	$698	2,581
Total	31,706	$698	2,581

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(1) Includes information regarding Holdings’ 1999 Stock Purchase Plan, 1998 Stock Option Plan and 1994 Stock Incentive Plan, with the exception of column (c), which does not include options available for future issuance under Holdings’ 1994 Stock Incentive Plan. The Company has not issued any options under the 1994 Stock Incentive Plan since the consummation of the Recapitalization and does not intend to issue any options under the 1994 Stock Incentive Plan in the future. For descriptions of the 1994 Stock Incentive Plan, the 1998 Stock Option Plan and the 1999 Stock Purchase Plan, see “Executive Compensation—1994 Stock Incentive Plan,” “Executive Compensation—1998 Stock Option Plan” and “Executive Compensation—1999 Stock Purchase Plan.”

ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Tax Allocation Agreement

TransDigm and Holdings are parties to a Tax Allocation Agreement. Under the terms of the Tax Allocation Agreement, TransDigm is obligated to make payments to Holdings equal to the amount of income taxes that TransDigm and subsidiaries would have owed for federal and state income taxes if TransDigm and subsidiaries were, for tax purposes, a separate consolidated group.

Stockholders’ Agreements

Pursuant to a merger agreement, Holdings, Odyssey and KIA IV-TD and KEP II entered into a stockholders agreement (the “Stockholders Agreement”) concurrently with consummation of the Recapitalization. The Stockholders Agreement provides for customary transfer restrictions, tag-along and drag-along rights, registration rights and an agreement among the parties to vote their shares of Common Stock, including the agreement of Odyssey to designate a representative of Kelso to the Board of Directors of Holdings. See also “Executive Compensation – Management Stockholders’ Agreement” and “Executive Compensation – Employment Agreements” for a description of certain agreements that TransDigm and Holdings have entered into with certain members of management in connection with the Recapitalization.

Odyssey Financial Services

TransDigm reimburses Odyssey for all of Odyssey’s reasonable and customary out of pocket expenses that it incurs in connection with advisory services that it provides to TransDigm. Odyssey is the majority stockholder of Holdings. In addition, Messrs. Berger, Hopkins and Mirza, each a director of Holdings and TransDigm, are managing members of the General Partner of Odyssey.

ITEM 14.     CONTROLS AND PROCEDURES

Holdings and TransDigm maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in Holdings’ and TransDigm’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to Holdings’ and TransDigm’s management, including their Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Within 90 days prior to the date of this report, Holdings and TransDigm carried out an evaluation, under the supervision and with the participation of Holdings’ and TransDigm’s management, including Holdings’ and TransDigm’s Chief Executive Officer and the Holdings’ and TransDigm’s Chief Financial Officer, of the effectiveness of the design and operation of Holdings’ and TransDigm’s disclosure controls and procedures. Based on the foregoing, Holdings’ and TransDigm’s Chief Executive Officer and Chief Financial Officer concluded that Holdings’ and TransDigm’s disclosure controls and procedures were effective.

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There have been no significant changes in Holdings’ or TransDigm’s internal controls or in other factors that could significantly affect the internal controls subsequent to the date Holdings and TransDigm completed their evaluations.

ITEM 15.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a) (1)                 Financial Statements

The following consolidated financial statements of Holdings are included in a separate section of this Report following the signature pages:

Independent Auditors’ Report

Consolidated Balance Sheets – September 30, 2002 and 2001

Consolidated Statements of Income – Years Ended September 30, 2002, 2001 and 2000

Consolidated Statements of Changes in Stockholders’ Deficiency – Years Ended September 30, 2002, 2001 and 2000

Consolidated Statements of Cash Flows – Years Ended September 30, 2002, 2001 and 2000

Notes to Consolidated Financial Statements

(a) (2)                 Financial Statement Schedules

The following financial statement schedule is included in a separate section of this Report following the signature pages – Valuation and Qualifying Accounts – Years Ended September 30, 2002, 2001 and 2000.

(a) (3)                 Exhibits

Number	Description of Exhibit
2.1*	Agreement and Plan of Merger, dated August 3, 1998, between Phase II Acquisition Corp. and TransDigm Holding Company.
2.2*	Amendment One, dated November 9, 1998, to the Agreement and Plan of Merger between Phase II Acquisition Corp. and TransDigm Holding Company.
2.3*	Agreement and Plan of Reorganization, dated as of March 31, 1999, by and among TransDigm Inc., ARA Acquisition Corporation, ZMP, Inc. and TCW Special Placements Fund II.
2.4	Asset Purchase Agreement, dated as of April 29, 2001, by and between Aviation Acquisition Corporation and Federal-Mogul Ignition Company. (Incorporated herein by reference to Exhibit 2.1 to Holdings’ Form 10-Q for the period ended March 31, 2001). (File No. 1631079).
3.1	Restated Certificate of Incorporation, filed on May 31, 2001, of TransDigm Holding Company. (Incorporated herein by reference to Exhibit 3.1 to Holdings’ Form 8-K dated May 31, 2001). (File No. 1658668).
3.2	Certificate of Designations, Preferences and Relative, Participating, Optional and Other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions Thereof of 16% Cumulative Redeemable Preferred Stock of TransDigm Holding Company. (Incorporated herein by reference to Exhibit 4.1 to Holdings’ Form 8-K dated May 31, 2001). (File No. 1658668).
3.3*	Certificate of Ownership and Merger, filed on December 3, 1998, merging Phase II Acquisition Corp. with and into TransDigm Holding Company.
3.4*	Certificate of Incorporation, filed on July 2, 1993, of NovaDigm Acquisition, Inc. (TransDigm Inc.).
3.5*	Certificate of Amendment, filed on July 22, 1993, of the Certificate of Incorporation of NovaDigm Acquisition, Inc. (TransDigm Inc.).
3.6*	Certificate of Ownership and Merger, filed on September 13, 1993, merging IMO Aerospace Company with and into TransDigm Inc.
3.8*	Bylaws of TransDigm Holding Company.

-40-

Number	Description of Exhibit
3.9*	Bylaws of NovaDigm Acquisition, Inc. (TransDigm Inc.).
4.1*	Indenture, dated December 3, 1998, among TransDigm Inc., TransDigm Holding Company and Marathon Power Technologies Company and State Street Bank and Trust Company, as trustee, relating to the 10 3/8% Senior Subordinated Notes due 2008 and the registered 10 3/8% Senior Subordinated Notes due 2008.
4.2*	Supplemental Indenture, dated April 23, 1999, among ZMP, Inc. and Adams Rite Aerospace, Inc. and State Street Bank and Trust Company, as trustee.
4.3*	Specimen Certificate of 10 3/8% Senior Subordinated Notes due 2008 (included in Exhibit 4.1 hereto).
4.4*	Specimen Certificate of the registered 10 3/8% Senior Subordinated Notes due 2008 (included in Exhibit 4.1 hereto).
4.5*	Registration Rights Agreement, dated December 3, 1998, among TransDigm Inc., TransDigm Holding Company and Marathon Power Technologies Company and BT Alex. Brown Incorporated and Credit Suisse First Boston Corporation.
4.6***	Registration Rights Agreement, dated June 7, 2002, among TransDigm Inc., the Guarantors and the Initial Purchasers (each as defined therein), relating to the $75 million of 10 3/8% Senior Subordinated Notes due 2008.
4.7*	Indenture, dated December 3, 1998, between TransDigm Holding Company and State Street Bank and Trust Company, as trustee, relating to $20,000,000 aggregate principal amount of 12% Pay-in-Kind Senior Notes due 2009.
4.8*	Specimen Certificate of 12% Pay-in-Kind Senior Notes due 2009 (included in Exhibit 4.7 hereto).
4.9*	Registration Rights Agreement, dated December 3, 1998, among TransDigm Holding Company and Kelso Investment Associates IV, L.P. and Kelso Equity Partners II, L.P.
4.10	Investment Agreement, dated as of May 31, 2001, by and between TransDigm Holding Company and First Union Investors, Inc. (Incorporated herein by reference to Exhibit 4.3 to Holdings’ Form 8-K dated May 31, 2001). (File No. 1658668).
4.11***	Supplemental Indenture, dated June 26, 2001, among Champion Aerospace Inc., Christic Electric Corp. TransDigm Inc., TransDigm Holding Company, Adams Rite Aerospace, Inc., ZMP, Inc., and Marathon Power Technologies Company and State Street Bank and Trust Company, as trustee.
10.1*	Stockholders’ Agreement, dated December 3, 1998, by and among TransDigm Holding Company, Odyssey Investment Partners Fund, LP, Odyssey Coinvestors, LLC, TD-Equity LLC, KIA IV-TD, LLC and Kelso Equity Partners II, L.P.
10.2*	Stockholders’ Agreement, dated December 3, 1998, by and among TransDigm Holding Company, Odyssey Investment Partners Fund and certain employee stockholders of TransDigm Holding Company.
10.3+	First Amendment to the Management Stockholders’ Agreement
10.4*	Tax Allocation Agreement, dated December 3, 1998, between TransDigm Holding Company and TransDigm Inc.
10.5**	Employment Agreement dated May 19, 1999, between TransDigm Holding Company and Douglas W. Peacock.
10.6***	Employment Agreement Amendment, dated January 17, 2002, between TransDigm Holding Company and Douglas W. Peacock.
10.7**	Employment Agreement dated May 19, 1999, between TransDigm Holding Company and W. Nicholas Howley.
10.8***	Employment Agreement Amendment, dated January 17, 2002, between TransDigm Holding Company and W. Nicholas Howley.
10.9+	TransDigm Inc. Executives Retirement Savings Plan.
10.10+	1994 Stock Incentive Plan of TransDigm Holding Company.
10.11+	1998 Stock Option Plan of TransDigm Holding Company.
10.12+	1999 Stock Purchase Plan of TransDigm Holding Company.
10.13	Amended and Restated Credit Agreement, dated as of December 3, 1998 and amended and restated as of May 31, 2001, by and among TransDigm Holding Company, TransDigm Inc., various lending institutions party thereto, Credit Suisse First Boston, as Syndication Agent and Bankers Trust Company, as Administrative Agent. (Incorporated herein by reference to Exhibit 4.2 to Holdings’ Form 8-K dated May 31 2001). (File No. 1658668).
10.14***	First Amendment and Consent, dated as of May 14, 2002, to the Amended and Restated Credit

-41-

Number	Description of Exhibit
	Agreement.
12.1+	Statement of Computation of Ratio of Earnings to Fixed Charges.
12.2+	Ratio of EBITDA (as defined) to Interest Expense.
12.3+	Ratio of EBITDA (as defined) to Interest Expense (as defined).
12.4+	Ratio of Total Debt to EBITDA (as defined).
21.1+	Subsidiaries of TransDigm Holding Company.
24.1+	TransDigm Holding Company Power of Attorney (included in the signature pages to this Report).
24.2+	TransDigm Inc. Power of Attorney (included in the signature pages to this Report).

+ Filed herewith.

* (Incorporated by reference to same titled exhibit to the Co-Registrants’ Registration Statement on Form S-4 dated January 29, 1999 File No. 333-71397, as amended.)

** (Incorporated by reference to same titled exhibit to the Co-Registrants’ Form 10-K dated December 23, 1999 File No. 333-71397.)

*** Incorporated by reference to the same titled exhibit to the Co-Registrants’ Registration Statement on Form S-4 dated June 28, 2002 File No. 333-91574, as amended.)

(b)    Reports on Form 8-K

On July 26, 2002, the Company filed a report on Form 8-K related to TransDigm Inc.’s press release announcing its offer to exchange up to $75 million in aggregate principal amount of its registered 10 3/8% Senior Subordinated Notes due 2008 for its outstanding unregistered 10 3/8% Senior Subordinated Notes due 2008.

On August 13, 2002, the Company filed a report on Form 8-K related to disclosure of information not previously publicly disclosed in accordance with Regulation FD. Such disclosure related to the certifications provided to the SEC by the Co-Registrants as required by 18 U.S.C. Section 1350 (as created by Section 906 of the Sarbanes-Oxley Act of 2002) in connection with the filing by the Co-Registrants of their Quarterly Report on Form 10-Q.

On September 24, 2002, the Company filed a report on Form 8-K related to TransDigm Inc.’s press release updating its earnings guidance to investors for the fiscal year ended September 30, 2002.

(c) Exhibits

The exhibits which are listed under Item 15(a)(3) are filed or incorporated by reference herein.

(d) Separate Financial Statements and Schedules

The following financial statement schedule is included in a separate section of this Report following the signature page—Valuation and Qualifying Accounts—Years Ended September 30, 2002, 2001 and 2000.

-42-

SIGNATURES

Pursuant to the requirements of Section 13 of the Securities Act of 1934, as amended, each of the Co-Registrants has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Richmond Heights, State of Ohio, on December 20, 2002.

TRANSDIGM HOLDING COMPANY
By:	/s/    Gregory Rufus
	Gregory Rufus
	Chief Financial Officer
TRANSDIGM INC.
By:	/s/    Gregory Rufus
	Gregory Rufus
	Chief Financial Officer

-43-

TRANSDIGM HOLDING COMPANY

The undersigned directors and officers of TransDigm Holding Company, hereby constitute and appoint Gregory Rufus, with full power of substitution and resubstitution, as attorney-in-fact for each of the undersigned, and in the name, place and stead of each of the undersigned, to execute on behalf of each of the undersigned an Annual Report on Form 10-K for the fiscal year ended September 30, 2002 pursuant to Section 13 of the Securities and Exchange Act of 1934 and to execute any and all amendments to such report and to file the same, with all exhibits thereto and other documents required to be filed in connection therewith, granting to such attorney full power to act with or without the others, and to have full power and authority to do and perform, in the name and on behalf of each of the undersigned, every act whatsoever necessary, advisable or appropriate to be done in the premises, hereby ratifying and approving the act of said attorney and any such substitute.

This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original with respect to the person executing it.

Pursuant to the requirements of the Securities Act of 1934, this Report has been signed below by the following persons on behalf of the Co-Registrant and in the capacities and as of the dates indicated.

Signature	Title	Date
/s/ Douglas W. Peacock           Douglas W. Peacock	Chairman of the Board	December 20, 2002
/s/ W. Nicholas Howley            W. Nicholas Howley	President and Chief Executive Officer (Principal Executive Officer) and Director	December 20, 2002
/s/ Gregory Rufus            Gregory Rufus	Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	December 20, 2002
/s/ Stephen Berger            Stephen Berger	Director	December 20, 2002
/s/ William Hopkins            William Hopkins	Director	December 20, 2002
/s/ Muzzafar Mirza           Muzzafar Mirza	Director	December 20, 2002
/s/ John W. Paxton           John W. Paxton	Director	December 20, 2002
/s/ Thomas R. Wall, IV            Thomas R. Wall, IV	Director	December 20, 2002

-44-

CERTIFICATIONS

I, W. Nicholas Howley, certify that:

1.    I have reviewed this annual report on Form 10-K of TransDigm Holding Company;

2.    Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.    Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules l3a-14 and 15d-14) for the registrant and we have:

a)    Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

c)    Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s boards of directors (or persons performing the equivalent function):

a)    All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.    The registrant’s other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: December 20, 2002	/s/    W. Nicholas Howley
	W. Nicholas Howley
	President and Chief Executive Officer
	(Principal Executive Officer)

-45-

I, Gregory Rufus, certify that:

1.    I have reviewed this annual report on Form 10-K of TransDigm Holding Company;

2.    Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.    Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules l3a-14 and 15d-14) for the registrant and we have:

a)    Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

c)    Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s boards of directors (or persons performing the equivalent function):

a)    All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.    The registrant’s other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: December 20, 2002	/s/ Gregory Rufus
	Gregory Rufus
	Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

-46-

TRANSDIGM INC.

The undersigned directors and officers of TransDigm Inc., hereby constitute and appoint Gregory Rufus, with full power of substitution and resubstitution, as attorney-in-fact for each of the undersigned, and in the name, place and stead of each of the undersigned, to execute on behalf of each of the undersigned an Annual Report on Form 10-K for the fiscal year ended September 30, 2002 pursuant to Section 13 of the Securities and Exchange Act of 1934 and to execute any and all amendments to such report and to file the same, with all exhibits thereto and other documents required to be filed in connection therewith, granting to such attorney full power to act with or without the others, and to have full power and authority to do and perform, in the name and on behalf of each of the undersigned, every act whatsoever necessary, advisable or appropriate to be done in the premises, hereby ratifying and approving the act of said attorney and any such substitute.

This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original with respect to the person executing it.

Pursuant to the requirements of the Securities Act of 1934, this Report has been signed below by the following persons on behalf of the Co-Registrant and in the capacities and as of the dates indicated.

Signature	Title	Date
/s/ Douglas W. Peacock           Douglas W. Peacock	Chairman of the Board	December 20, 2002
/s/ W. Nicholas Howley            W. Nicholas Howley	President and Chief Executive Officer (Principal Executive Officer) and Director	December 20, 2002
/s/ Gregory Rufus            Gregory Rufus	Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	December 20, 2002
/s/ Stephen Berger            Stephen Berger	Director	December 20, 2002
/s/ William Hopkins            William Hopkins	Director	December 20, 2002
/s/ Muzzafar Mirza           Muzzafar Mirza	Director	December 20, 2002
/s/ John W. Paxton           John W. Paxton	Director	December 20, 2002
/s/ Thomas R. Wall, IV            Thomas R. Wall, IV	Director	December 20, 2002

-47-

CERTIFICATIONS

I, W. Nicholas Howley, certify that:

1.    I have reviewed this annual report on Form 10-K of TransDigm Inc.;

2.    Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.    Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules l3a-14 and 15d-14) for the registrant and we have:

a)    Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

c)    Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s boards of directors (or persons performing the equivalent function):

a)    All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.    The registrant’s other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: December 20, 2002	/s/    W. Nicholas Howley
	W. Nicholas Howley
	President and Chief Executive Officer
	(Principal Executive Officer)

-48-

I, Gregory Rufus, certify that:

1.    I have reviewed this annual report on Form 10-K of TransDigm Inc.;

2.    Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.    Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules l3a-14 and 15d-14) for the registrant and we have:

a)    Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

c)    Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s boards of directors (or persons performing the equivalent function):

a)    All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.    The registrant’s other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: December 20, 2002	/s/    Gregory Rufus
	Gregory Rufus
	Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

-49-

TRANSDIGM HOLDING COMPANY AND SUBSIDIARIES

ANNUAL REPORT ON FORM 10-K:

FISCAL YEAR ENDED SEPTEMBER 30, 2002

ITEM 8 AND ITEM 15(a) (1)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX

Financial Statements:	Page
Independent Auditors’ Report	F-1
Consolidated Balance Sheets as of September 30, 2002 and 2001	F-2
Consolidated Statements of Income for the Years Ended
September 30, 2002, 2001 and 2000	F-3
Consolidated Statements of Changes in Stockholders’ Deficiency for the
Years Ended September 30, 2002, 2001 and 2000	F-4
Consolidated Statements of Cash Flows for the Years Ended
September 30, 2002, 2001 and 2000	F-5
Notes to Consolidated Financial Statements	F-6 – F-28
Supplementary Data:
Independent Auditors’ Report	F-29
Valuation and Qualifying Accounts for the Years Ended
September 30, 2002, 2001 and 2000	F-30

-50-

INDEPENDENT AUDITORS’ REPORT

To the Shareholders and Board of Directors of

TransDigm Holding Company

We have audited the accompanying consolidated balance sheets of TransDigm Holding Company and subsidiaries (the “Company”) as of September 30, 2002 and 2001, and the related consolidated statements of income, changes in stockholders’ deficiency and cash flows for each of the three years in the period ended September 30, 2002. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of TransDigm Holding Company and subsidiaries as of September 30, 2002 and 2001, and the results of their operations and their cash flows for each of the three years in the period ended September 30, 2002 in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP

Cleveland, Ohio

December 2, 2002

F-1

TRANSDIGM HOLDING COMPANY

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2002 AND 2001

(In Thousands of Dollars)

	2002			2001
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	49,206		$	11,221
Accounts receivable, net (Note 4)		37,341			40,215
Inventories (Note 5)		51,429			47,872
Deferred income taxes (Note 12)		9,959			9,749
Prepaid expenses and other		715			447
Total current assets		148,650			109,504
PROPERTY, PLANT AND EQUIPMENT – Net (Note 6)		39,192			42,095
INTANGIBLE ASSETS – Net (Note 7)		200,023			203,858
DEBT ISSUE COSTS – Net		11,622			12,494
DEFERRED INCOME TAXES AND OTHER (Note 12)		2,739			4,947
TOTAL ASSETS	$	402,226		$	372,898
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
CURRENT LIABILITIES:
Current portion of long-term liabilities (Notes 9 and 11)	$	7,084		$	15,822
Accounts payable		11,835			9,181
Accrued liabilities (Note 8)		30,696			28,829
Total current liabilities		49,615			53,832
LONG-TERM DEBT—Less current portion (Note 9)		404,468			399,587
OTHER NON-CURRENT LIABILITIES (Note 11)		6,268			8,033
Total liabilities		460,351			461,452
CUMULATIVE REDEEMABLE PREFERRED STOCK (Note 13)		16,124			13,222
REDEEMABLE COMMON STOCK (Note 13)		2,907			1,612
STOCKHOLDERS’ DEFICIENCY:
Common stock, $.01 par value (Note 13)		102,080			102,080
Warrants (Note 13)		1,934			1,934
Retained deficit		(180,506	)		(206,901	)
Accumulated other comprehensive loss		(664	)		(501	)
Total stockholders’ deficiency		(77,156	)		(103,388	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY	$	402,226		$	372,898

See notes to consolidated financial statements.

F-2

TRANSDIGM HOLDING COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands of Dollars)

	Years Ended September 30,
	2002		2001		2000
NET SALES (Note 4)	$	248,802	$	200,773	$	150,457
COST OF SALES (Including charges of $6,639 and $185 in 2001 and 2000, respectively, due to inventory purchase accounting adjustments) (Note 2)		134,575		118,525		82,193
GROSS PROFIT		114,227		82,248		68,264
OPERATING EXPENSES:
Selling and administrative		21,905		20,669		16,799
Amortization of intangibles		6,294		2,966		1,843
Research and development		2,057		2,943		2,308
Total operating expenses		30,256		26,578		20,950
INCOME FROM OPERATIONS		83,971		55,670		47,314
INTEREST EXPENSE—NET		36,538		31,926		28,563
INCOME BEFORE INCOME TAXES		47,433		23,744		18,751
INCOME TAX PROVISION (Note 12)		16,804		9,386		7,972
NET INCOME	$	30,629	$	14,358	$	10,779

See notes to consolidated financial statements.

F-3

TRANSDIGM HOLDING COMPANY

CONSOLIDATED STATEMENTS OF CHANGES IN

STOCKHOLDERS’ DEFICIENCY

(In Thousands of Dollars)

	Common Stock			Warrants		Retained Deficit			Accumulated Other Comprehensive Loss			Total
BALANCE, OCTOBER 1, 1999	$	102,097				$	(229,237	)	$	(482	)	$	(127,622	)
Comprehensive income:
Net income							10,779						10,779
Other comprehensive income										32			32
Comprehensive income													10,811
Exercise of stock options		274											274
Income tax benefit from stock options		460											460
Adjustment of redeemable common stock		(675	)				(1,657	)					(2,332	)
BALANCE, SEPTEMBER 30, 2000		102,156					(220,115	)		(450	)		(118,409	)
Comprehensive income:
Net income							14,358						14,358
Other comprehensive loss										(51	)		(51	)
Comprehensive income													14,307
Issuance of warrants for purchase of common stock				$	1,934								1,934
Purchase of common stock		(125	)										(125	)
Income tax benefit from stock options		49											49
Adjustment of redeemable common stock							(256	)					(256	)
Cumulative redeemable preferred stock:
Dividends accrued							(800	)					(800	)
Accretion for original issuance discount							(88	)					(88	)
BALANCE, SEPTEMBER 30, 2001		102,080			1,934		(206,901	)		(501	)		(103,388	)
Comprehensive income:
Net income							30,629						30,629
Other comprehensive loss										(163	)		(163	)
Comprehensive income													30,466
Adjustment of redeemable common stock							(1,332	)					(1,332	)
Cumulative redeemable preferred stock:
Dividends accrued							(2,629	)					(2,629	)
Accretion for original issuance discount							(273	)					(273	)
BALANCE, SEPTEMBER 30, 2002	$	102,080		$	1,934	$	(180,506	)	$	(664	)	$	(77,156	)

See notes to consolidated financial statements.

F-4

TRANSDIGM HOLDING COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of Dollars)

	Years Ended September 30,
	2002			2001			2000
OPERATING ACTIVITIES:
Net income	$	30,629		$	14,358		$	10,779
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		7,198			5,680			4,669
Amortization of intangibles		6,294			2,966			1,843
Amortization/write-off of debt issue costs and note premium		4,146			1,946			1,705
Interest deferral on Holdings PIK Notes		3,659			2,958			2,639
Changes in assets and liabilities, net of effects from acquisition of businesses (Note 2):
Accounts receivable		3,020			(13,331	)		(3,970	)
Inventories		(3,542	)		4,530			(2,337	)
Prepaid expenses and other assets		887			2,325			2,328
Accounts payable		2,524			(947	)		191
Accrued and other liabilities		1,637			2,276			(1,542	)
Net cash provided by operating activities		56,452			22,761			16,305
INVESTING ACTIVITIES:
Capital expenditures		(3,816	)		(4,486	)		(4,368	)
Acquisition of Champion Aviation (Note 2)					(162,318	)
Acquisition of lube pump product line (Note 2)					(6,784	)
Acquisition of ZMP, Inc. (Note 2)								1,648
Acquisition of Christie Electric Corp. (Note 2)								(2,400	)
Other		(1,623	)
Net cash used in investing activities		(5,439	)		(173,588	)		(5,120	)
FINANCING ACTIVITIES:
Borrowings under credit facility, net of fees of $5,040					157,560
Proceeds from senior subordinated notes, net of fees of $3,377		73,629
Proceeds from exercise of stock options								295
Proceeds from issuance of cumulative redeemable preferred stock and warrants, net of fees of $733 (Note 2)					14,267
Repayment of amounts borrowed under credit facility		(84,820	)		(13,949	)		(7,595	)
Payment of Honeywell license obligation		(1,800	)
Purchase of common stock, including redeemable common stock		(37	)		(139	)		(2,305	)
Net cash (used in) provided by financing activities		(13,028	)		157,739			(9,605	)
NET INCREASE IN CASH AND CASH EQUIVALENTS		37,985			6,912			1,580
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		11,221			4,309			2,729
CASH AND CASH EQUIVALENTS, END OF YEAR	$	49,206		$	11,221		$	4,309
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for interest	$	27,431		$	26,078		$	23,955
Cash paid during the year for income taxes	$	15,684		$	6,200		$	5,004

See notes to consolidated financial statements.

F-5

TRANSDIGM HOLDING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2002, 2001 AND 2000

1. DESCRIPTION OF THE BUSINESS AND RECAPITALIZATION

Description of the Business - TransDigm Holding Company (“Holdings”), through its wholly-owned operating subsidiary, TransDigm Inc. (“TransDigm”), is a premier supplier of engineered power system and airframe components servicing predominantly the aerospace industry. TransDigm, which includes the AeroControlex and AdelWiggins Groups, along with its wholly-owned subsidiaries, Champion Aerospace Inc. (“Champion”), Marathon Power Technologies Company (“Marathon”), ZMP, Inc. (“ZMP”), and Adams Rite Aerospace, Inc. (“Adams Rite”) (collectively, the “Company”) offers a broad line of proprietary aerospace components. Major product offerings in the Power System Components categories include ignition system components, fuel and lube pumps, mechanical controls, and batteries and chargers. Major product offerings in the Airframe System Components categories include engineered connectors, engineered latches, and lavatory hardware and components.

Recapitalization - On December 3, 1998, an entity formed by affiliates of Odyssey Investment Partners, LP (“Odyssey”), and Holdings consummated a definitive agreement and plan of merger (the “Merger Agreement” or the “Merger”). Pursuant to the terms of the Merger, Holdings was the surviving corporation in the Merger. In connection with the Merger, owners of Holdings’ outstanding common stock received, in exchange for each outstanding share of common stock (except for shares held directly or indirectly by Holdings or the Rolled Shares, as defined in the Merger Agreement), the “Per Share Merger Consideration,” as defined in the Merger Agreement. The aggregate consideration payable pursuant to the Merger, including amounts payable to holders of options and warrants, was approximately $299.7 million.

The Merger was treated as a recapitalization for financial reporting purposes, which had no impact on the historical basis of Holdings’ consolidated assets and liabilities but resulted in the majority of the merger consideration being charged directly to Holdings’ equity, creating the Company’s stockholders’ deficiency.

Separate Financial Statements - Separate financial statements of TransDigm are not presented since TransDigm’s Senior Subordinated Notes (see Note 9) are guaranteed by Holdings and all direct and indirect subsidiaries of TransDigm and since Holdings has no significant operations or assets separate from its investment in TransDigm.

2. ACQUISITIONS

Champion Aviation - Through a newly-formed, wholly-owned subsidiary, Champion Aerospace Inc., TransDigm acquired substantially all of the assets and certain liabilities of the Champion Aviation Products (“Champion Aviation”) business on May 31, 2001 (the “Acquisition”), from Federal Mogul Ignition Company (“Federal-Mogul”), a wholly-owned subsidiary of Federal-Mogul Corporation, for approximately $160.1 million in cash, subject to adjustment based on the level of acquired working capital as of the closing of the Acquisition. Champion Aviation is engaged in researching, designing, developing, engineering, manufacturing, marketing, distributing and selling ignition systems and related components and other products (including, without limitation, igniters, spark plugs, and exciters) for turbine and piston aircraft applications as well as other aerospace engine and industrial applications.

The purchase price consideration of $160.1 million in cash and $2.2 million of costs associated with the Acquisition was funded through: (1) $147.6 million of new borrowings under the Company’s existing Senior Credit Facility, (2) $14.3 million received (net of fees of $.7 million) from the issuance of $15 million of Holdings’ 16% Cumulative Redeemable Preferred Stock (see Note 13) and warrants to

F-6

purchase 1,381.87 shares of Holdings’ common stock (see Note 13), and (3) the use of $.4 million of the Company’s existing cash balances. TransDigm also borrowed an additional $15 million under the Senior Credit Facility to pay $5 million of debt issuance costs and provide $10 million of working capital for future operations. Fees paid to Odyssey in connection with the acquisition totaled approximately $1.7 million.

Approximately $2.6 million of the additional borrowings were obtained under the Company’s revolving credit line, $45 million was added to the Company’s existing Tranche B Facility, and $115 million was borrowed in the form of a new Tranche C Facility maturing in May 2007 under the Senior Credit Facility.

The Company accounted for the Acquisition as a purchase and included the results of operations of the acquired business in its fiscal 2001 consolidated financial statements from the effective date of the Acquisition. The purchase price was allocated based on the estimated fair values of the assets and liabilities acquired in conjunction with the Acquisition and resulted in goodwill of approximately $134 million being recorded on the Company’s consolidated balance sheet. This goodwill is being amortized on a straight-line basis over forty years.

The following table summarizes the unaudited, consolidated pro forma results of operations of the Company, as if the Acquisition had occurred at the beginning of the years ended September 30 (in thousands):

	2001		2000
Net sales	$	247,761	$	219,073
Operating income		65,560		60,879
Net income		15,137		10,380

This pro forma information is not necessarily indicative of the results that actually would have been obtained if the operations had been combined as of the beginning of the years presented and is not intended to be a projection of future results.

Lube Pump Product Line - During the first and second quarters of fiscal 2001, the Company entered into a series of agreements with Honeywell International, Inc. (“Honeywell”) which provided the Company an exclusive, worldwide license to produce and sell products composing Honeywell’s lube pump product line for at least forty years and enabled the Company to acquire approximately $5.9 million of inventory pertaining to the product line, along with certain related assets. Under the agreements, the Company made cash payments approximating $6.6 million at closing and is required to make future, specified (see Note 11) and variable royalty payments for the license. The Company also agreed to supply certain products to Honeywell for a period of five years.

The Company accounted for the acquisition as a purchase and has included the results of operations of the acquired product line (which were not material through September 30, 2001) in its fiscal 2001 consolidated financial statements from the effective date of the acquisition (March 26, 2001). Intangible assets of $15.7 million, consisting of the license agreement and goodwill that were recorded as a result of the acquisition are being amortized on a straight-line basis over twenty years.

The purchase price of the inventory acquired from Honeywell is subject to adjustment based upon a final determination of the value acquired, as defined.

Pro forma net sales and results of operations for this acquisition, had the acquisition occurred at the beginning of the years ended September 30, 2001 and 2000, are not significant and, accordingly, are not provided.

F-7

On March 8, 2000, Marathon acquired all of the issued and outstanding common shares of Christie Electric Corp. (“Christie”) for $2.4 million. The Company accounted for the acquisition as a purchase and included the results of operations of Christie, which are not material to the Company’s consolidated results of operations, in its fiscal 2000 consolidated financial statements from the effective date of acquisition. Goodwill of $1.8 million, which resulted from the acquisition, is being amortized on a straight-line basis over forty years.

On April 23, 1999, TransDigm acquired all of the outstanding common stock of ZMP, Inc., the corporate parent of Adams Rite Aerospace, Inc. through a merger. During the year ended September 30, 2000, the Company received a purchase price adjustment of $1.6 million, net of expenses, and credited the amount against goodwill previously recognized in connection with the merger.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation - The accompanying consolidated financial statements include the accounts of TransDigm Holding Company and subsidiaries. All significant intercompany balances and transactions have been eliminated.

Revenue Recognition - Revenue is recognized when products are shipped to the customer. Any anticipated losses on contracts are charged to earnings when identified.

Cash Equivalents - The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Allowance for Uncollectible Accounts - The Company reserves for amounts determined to be uncollectible based on specific identification and historical experience.

Inventories - Inventories are stated at the lower of cost or market. Cost of inventories is determined by the average cost and the first-in, first-out (FIFO) methods. Provision for potentially obsolete or slow-moving inventory is made based on management’s analysis of inventory levels and future sales forecasts. In accordance with industry practice, all inventories are classified as current assets even though a portion of the inventories may not be sold within one year.

Property, Plant and Equipment - Property, plant and equipment are stated at cost. Depreciation is computed using the straight-line method at rates based on the estimated useful lives of the assets.

Debt Issue Costs, Premiums and Discounts - The cost of obtaining financing as well as premiums and discounts are amortized using the interest method over the terms of the respective obligations/securities.

Intangible Assets - Intangible assets are amortized on a straight-line basis over their respective estimated useful lives ranging from 5 to 40 years. The Company assesses the recoverability of intangibles by determining whether the amortization over the remaining life can be recovered through projected, undiscounted, cash flows from future operations.

Income Taxes - The Company accounts for income taxes using an asset and liability approach. Deferred taxes are recorded for the difference between the book and tax basis of various assets and liabilities.

Product Warranty Costs - The Company generally provides a one year warranty on certain products beginning on the date the product is installed on an aircraft. A provision for estimated sales returns and the cost of repairs is recorded at the time of sale and periodically adjusted to reflect actual experience.

F-8

Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Comprehensive Loss - The Company’s accumulated other comprehensive loss, consisting principally of its minimum pension liability adjustment, is reported separately in the accompanying consolidated balance sheets and statements of changes in stockholders’ deficiency, net of taxes of $521,000, $404,000, and $317,000 at September 30, 2002, 2001, and 2000, respectively.

Segment Reporting - The Company’s principal business, aircraft component supplier, is reported as one segment. Substantially all of the Company’s operations are located within the United States.

Reclassifications - Certain reclassifications have been made to the fiscal 2001 and 2000 financial statements and related notes to conform to the classifications used in fiscal 2002.

4. SALES AND ACCOUNTS RECEIVABLE

Sales - The Company’s sales and receivables are concentrated in the aerospace industry. The major customers for Power System Components include commercial and defense aftermarket end users of engines and APUs, engine and APU OEMs, and regional and business jet OEMs and end users. The major customers for Airframe System Components include commercial and defense aftermarket end users, commercial transport OEMs, and regional and business jet OEMs and end users.

Information concerning the Company’s net sales by its major system component categories is as follows for the years ended September 30 (in thousands):

	2002		2001		2000
Power System Components	$	156,222	$	106,811	$	67,275
Airframe System Components		92,580		93,962		83,182
Total	$	248,802	$	200,773	$	150,457

For the year ended September 30, 2002, three customers each accounted for approximately 11% of the Company’s net sales. Two customers represented approximately 17% and 8% of the Company’s net sales during the year ended September 30, 2001 and two customers represented approximately 10% and 9% of the Company’s net sales for the year ended September 30, 2000. Export sales to customers, primarily in Western Europe, were $59.4 million in fiscal 2002, $54.8 million in fiscal 2001, and $36.2 million in fiscal 2000.

Accounts Receivable - Accounts receivable consist of the following at September 30 (in thousands):

	2002			2001
Due from U.S. government or prime contractors under
U.S. government programs	$	2,670		$	3,798
Commercial customers		35,976			37,573
Allowance for uncollectible accounts		(1,305	)		(1,156	)
Accounts receivable - net	$	37,341		$	40,215

F-9

Approximately 28% of the Company’s receivables at September 30, 2002 were due from two customers. In addition, approximately 39% of the Company’s receivables were due from entities which principally operate outside of the United States. Credit is extended based on an evaluation of each customer’s financial condition and collateral is generally not required.

5. INVENTORIES

Inventories consist of the following at September 30 (in thousands):

	2002			2001
Work-in-progress and finished goods	$	28,534		$	30,990
Raw materials and purchased component parts		30,010			24,177
Total		58,544			55,167
Reserve for excess and obsolete inventory		(7,115	)		(7,295	)
Inventories - net	$	51,429		$	47,872

6. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following at September 30 (in thousands):

	2002			2001
Land and improvements	$	5,464		$	4,881
Buildings and improvements		15,287			19,316
Machinery and equipment		43,421			38,024
Furniture and fixtures		5,893			5,560
Construction in progress		1,252			814
Total		71,317			68,595
Accumulated depreciation		(32,125	)		(26,500	)
Property, plant and equipment - net	$	39,192		$	42,095

7. INTANGIBLE ASSETS

Intangible assets, net of accumulated amortization, consist of the following at September 30 (in thousands):

	2002		2001
Goodwill	$	158,453	$	191,630
Trademarks and trade names		19,852
Honeywell license agreement (Note 2)		11,191		11,946
Technology		9,078
Other		1,449		282
Total	$	200,023	$	203,858

Accumulated amortization of intangibles was $29.6 million at September 30, 2002 and $23.3 million at September 30, 2001.

F-10

During fiscal 2002, the purchase price allocation of the Champion Aviation acquisition (see Note 2) was finalized and resulted in the recognition of trademarks and trade names intangible assets of $20.5 million and technology (patented and unpatented) intangible assets of $10.9 million, with a corresponding reduction in previously recorded goodwill.

8. ACCRUED LIABILITIES

Accrued liabilities consist of the following at September 30 (in thousands):

	2002		2001
Estimated losses on uncompleted contracts	$	8,429	$	10,233
Interest		7,310		5,540
Compensation and related benefits		6,155		6,650
Sales returns and repairs		4,249		3,363
Professional services		1,291		688
Income taxes payable		282		1,062
Other		2,980		1,293
Total	$	30,696	$	28,829

9. DEBT

Summary - The Company’s long-term debt consists of the following at September 30 (in thousands):

	2002			2001
Term loans:
Tranche A				$	40,713
Tranche B	$	83,629			105,186
Tranche C		92,163			114,713
Senior Subordinated Notes		200,000			125,000
Holdings PIK Notes		31,256			27,597
Premium on Senior Subordinated Notes		1,904
Total debt		408,952			413,209
Current maturities		(4,484	)		(13,622	)
Long-term portion	$	404,468		$	399,587

Revolving Credit and Term Loans – TransDigm’s Senior Credit Facility totals $293 million, which consists of (1) a $30 million revolving credit line maturing in November 2004 and (2) a term loan facility in the aggregate of $263 million, consisting of a $43 million Tranche A Facility, which was repaid in fiscal 2002, a $105 million Tranche B Facility maturing in May 2006, and a $115 million Tranche C Facility maturing in May 2007. At September 30, 2002, the Company had $30 million of borrowings (the entire revolving credit line) available under the credit facility.

The interest rate under the credit facility is, at TransDigm’s option, either (A) a floating rate equal to the Base Rate plus the Applicable Margin, as defined in the credit facility; or (B) the Eurodollar Rate for fixed periods of one, two, three, or six months, plus the Applicable Margin. The credit facility is subject to mandatory prepayment with a defined percentage of net proceeds from certain asset sales, insurance proceeds or other awards that are payable in connection with the loss, destruction or condemnation of any assets, certain new debt and equity offerings and 50% of excess cash flow (as defined in the credit facility) over a predetermined amount defined in the credit facility. The interest rate on outstanding borrowings at September 30, 2002 was 5.375%.

F-11

All obligations under the Senior Credit Facility are guaranteed by Holdings and each of the subsidiaries, direct and indirect, of TransDigm. The indebtedness outstanding under the Senior Credit Facility is secured by a pledge of the stock of TransDigm and all of its domestic subsidiaries and a perfected lien and security interest in assets other than real estate (tangible and intangible) of TransDigm, its direct and indirect subsidiaries and Holdings. The agreement also contains a number of restrictive covenants that, among other things, restrict Holdings, TransDigm and their subsidiaries from various actions, including mergers and sales of assets, use of proceeds, granting of liens, incurrence of indebtedness, voluntary prepayment of indebtedness, capital expenditures, payment of dividends, business activities, investments and acquisitions, and transactions with affiliates. The agreement also requires the Company to comply with certain financial covenants pertaining to earnings, interest coverage and leverage. The Company was in compliance with all financial covenants of the Senior Credit Facility as of September 30, 2002. The maturities of the Company’s term loans by fiscal year are as follows: $ 4.5 million in fiscal 2003, $13.1 million in fiscal 2004, $36.7 million in fiscal 2005, $54.9 million in fiscal 2006, and $66.6 million in fiscal 2007.

On June 7, 2002, the Senior Credit Facility was amended to, among other things, permit TransDigm to: (1) incur up to $150 million of additional bank borrowings or subordinated debt (for which there are currently no commitments to provide such funds) to finance permitted acquisitions or pay dividends to Holdings to retire certain “paid-in-kind” subordinated notes issued by Holdings (the “Holdings PIK Notes”) and (2) make future permitted acquisitions as long as the aggregate purchase price of such permitted acquisitions does not exceed $225 million and certain other conditions are met. The amendment also modified certain financial covenants and waived any mandatory prepayment of amounts owed under the Senior Credit Facility from excess cash flow, if any, generated by TransDigm during fiscal 2002.

Senior Subordinated Notes - TransDigm’s Senior Subordinated Notes (the “Notes”) bear interest at an annual rate of 10³/₈%, maturing on December 1, 2008, and are unsecured obligations of TransDigm ranking subordinate to the Company’s senior debt, as defined in the note agreement. The Notes are redeemable after December 1, 2003, in whole or in part, at specified redemption prices, which decline over the remaining term of the Notes. If a change in control of the Company occurs, the holders of the Notes will have the right to demand that the Company redeem the Notes at a purchase price equal to 101% of the principal amount of the Notes plus accrued interest. The Notes contain many of the same restrictive covenants included in the Senior Credit Facility. The Company was in compliance with all financial covenants of the Notes as of September 30, 2002.

On June 7, 2002, the Company issued $75 million of additional Notes at a premium of approximately $2 million. The proceeds of the additional Notes, net of fees and expenses of approximately $3 million, were used to repay $74 million of the borrowings outstanding under the Company’s Senior Credit Facility ($33 million under the Tranche A Facility, $19.5 million under the Tranche B Facility, and $21.5 million under the Tranche C Facility).

Holdings PIK Notes - In connection with the Merger (see Note 1), Holdings issued $20 million of pay-in-kind notes due in fiscal 2009 (“Holdings PIK Notes” or “PIK Notes”). The PIK Notes are unsecured obligations of Holdings, which has no significant assets or operations. Interest on the PIK Notes is accrued at an annual fixed rate of 12% and is payable semi-annually in the form of additional PIK Notes through December 2003. Thereafter, cash interest is payable semi-annually commencing in the year 2004. The PIK Notes are redeemable by Holdings prior to their maturity under certain circumstances and contain many of the same restrictive covenants included in the Notes and Senior Credit Facility. The Company was in compliance with all financial covenants of the PIK Notes as of September 30, 2002.

10. RETIREMENT PLANS

The Company has two non-contributory defined benefit pension plans, which together cover certain union employees. The plans provide benefits of stated amounts for each year of service. The

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Company’s funding policy is to contribute actuarially determined amounts allowable under Internal Revenue Service regulations. The plans’ assets consist primarily of guaranteed investment contracts with an insurance company.

Financial information for the defined benefit plans is provided below (in thousands):

	Years Ended September 30,
	2002			2001
Change in benefit obligation:
Benefit obligation, beginning of year	$	5,394		$	5,034
Service cost		82			82
Interest cost		379			359
Benefits paid		(271	)		(298	)
Actuarial losses		392			217
Benefit obligation, end of year	$	5,976		$	5,394

	2002			2001
Change in plan assets:
Fair value of plan assets, beginning of year	$	4,422		$	3,846
Actual return on plan assets		250			239
Employer contribution		518			635
Benefits paid		(271	)		(298	)
Fair value of plan assets, end of year	$	4,919		$	4,422

	2002			2001
Amounts recognized in the consolidated balance sheets at September 30 consist of:
Intangible assets	$	390		$	311
Accrued liabilities		(396	)		(551	)
Other non-current liabilities		(661	)		(421	)
Accumulated other comprehensive loss		1,181			880
Net amount recognized	$	514		$	219

	2002		2001
Weighted-average assumptions as of September 30:
Discount rate	6.5	%	7.0	%
Expected return on plan assets	6.0	%	6.0	%

	Years Ended September 30,
	2002			2001			2000
Components of net periodic benefit cost:
Service cost	$	82		$	82		$	87
Interest cost		379			359			333
Expected return on plan assets		(271	)		(236	)		(210	)
Net amortization and deferral		91			83			71
Net periodic pension cost	$	281		$	288		$	281

F-13

The Company also sponsors certain defined contribution employee savings plans that cover substantially all of the Company’s non-union employees. Under the plans, the Company contributes a percentage of employee compensation and matches a portion of employee contributions. The cost recognized for such contributions under these plans for the years ended September 30, was approximately $1.8 million, $1.0 million, and $1.2 million in fiscal 2002, 2001, and 2000, respectively.

11. OTHER NON-CURRENT LIABILITIES

Other non-current liabilities consist of the following at September 30 (in thousands):

	2002			2001
Obligation under Honeywell license agreement (net of imputed interest of $557 in fiscal 2002 and $1,043 in 2001) (Note 2)	$	6,443		$	7,757
Accrued pension costs (Note 10)		661			421
Other		1,764			2,055
Total		8,868			10,233
Current portion of Honeywell license agreement obligation		(2,600	)		(2,200	)
Other non-current liabilities	$	6,268		$	8,033

The Honeywell license agreement obligation is non-interest bearing and is due as follows: $2.6 million in fiscal 2003 and $2.2 million in both fiscal 2004 and 2005. The obligation has been recorded at its present value using an imputed interest rate of 8%.

12. INCOME TAXES

The provision for income taxes consists of the following for the years ended September 30 (in thousands):

	2002		2001			2000
Current	$	14,904	$	9,239		$	6,288
Deferred		1,433		186			1,545
Net operating loss carryforward - state and local income taxes		467		(39	)		139
Total	$	16,804	$	9,386		$	7,972

The differences between the provision for income taxes at the federal statutory income tax rate and the tax provision shown in the consolidated statements of income for the years ended September 30 are as follows (in thousands):

	2002			2001			2000
Tax at statutory rate of 35%	$	16,601		$	8,310		$	6,563
State and local income taxes		1,910			650			700
Benefit from foreign sales		(934	)		(483	)		(363	)
Nondeductible goodwill amortization and interest expense		790			746			711
Research and development credits		(1,272	)
Other - net		(291	)		163			361
Provision for income taxes	$	16,804		$	9,386		$	7,972

F-14

The components of the deferred tax assets at September 30 consist of the following (in thousands):

	2002			2001
CURRENT ASSET:
Estimated losses on uncompleted contracts	$	3,304		$	3,991
Inventory		1,928			1,844
Employee benefits		1,589			1,723
Sales returns and repairs		1,786			1,012
Other accrued liabilities		1,352			1,179
Total	$	9,959		$	9,749
NON-CURRENT ASSET:
Holdings PIK Notes interest	$	4,097		$	2,761
Intangible assets		(579	)		1,910
Retirement and other accrued obligations		1,098			870
Property, plant and equipment		(2,388	)		(1,785	)
Net operating loss carryforwards - state and local income taxes (expiring in fiscal 2022)		34			499
Total	$	2,262		$	4,255

During the year ended September 30, 2002, the Company filed amended income tax returns for fiscal years 1997 through 2000 with the Internal Revenue Service (“IRS”) requesting refunds totaling approximately $1.8 million for research and development tax credits that had not been claimed on previously filed tax returns for these years. Because these income tax returns are currently being audited by the IRS, the Company has not recorded potential tax refunds that could result from these credits.

13. CAPITAL STOCK, WARRANTS, AND OPTIONS

Common Stock - Authorized common stock of the Company consists of 900,000 shares of common stock (voting), par value $.01 per share and 100,000 shares of Class A (non-voting) common stock. The total number of shares of voting common stock outstanding at September 30, 2002 and 2001 was 119,789 and 119,814, respectively. No shares of Class A (non-voting) common stock were outstanding at September 30, 2002 and 2001. Common stock issued to management personnel is subject to certain agreements, which provide management shareholders the right (a “put”) to require the Company to repurchase their shares of common stock under certain conditions at fair market value. Accordingly, the estimated put value of the outstanding shares of voting common stock held by management (1,127 and 1,152 shares at September 30, 2002 and 2001, respectively) has been classified as redeemable common stock in the accompanying consolidated balance sheets.

Common Stock Options - Holdings has granted options to purchase Common Stock to certain employees of TransDigm and Holdings. All outstanding options issued prior to the Recapitalization (See Note 1) are vested. Prior to May 31, 2001, the terms of any stock options issued subsequent to, or in connection with, the Recapitalization (the “New Options”) vested upon the passage of time and/or upon Holdings’ attainment of certain financial targets. On May 31, 2001, the New Options were modified to provide for the vesting of an additional percentage of each optionee’s New Options so that a total of 45% of each of the New Options outstanding at May 31, 2001 were vested effective September 30, 2001. Additionally, such May 31, 2001 modification provided that, subject to each optionee’s continued employment with Holdings or TransDigm and, in the case of the Chairman of the Board of Holdings and TransDigm, continued service as Chairman of the Board of Holdings and TransDigm, the remaining 55% of the New Options were eligible to become exercisable upon the earlier of (1) the date which is seven years and nine months after such New Option was granted, or (2) a “change in control,” if any, on or prior to September 30, 2003, pursuant to which certain investor return targets are satisfied.

F-15

Effective July 8, 2002, the New Options were further modified so that, subject to each optionee’s continued employment with TransDigm or Holdings and, in the case of the Chairman of the Board of Holdings and TransDigm, continued service as Chairman of the Board of Holdings and TransDigm, the remaining 55% of each optionee’s New Options are eligible to become exercisable upon the earlier of (1) the date which is seven years and nine months after such New Option was granted, or (2) a “change in control”, if any, on or prior to September 30, 2004, pursuant to which certain investor return targets are satisfied.

New Options issued after May 31, 2001 vest as follows: 45% of each such New Option is eligible to become exercisable, subject to each optionee’s continued employment with TransDigm or Holdings, on the first anniversary of the grant date of such New Option and the remaining 55% of each such New Option is eligible to become exercisable, subject to each optionee’s continued employment with TransDigm or Holdings, upon the earlier of (i) the date which is seven years and nine months after such grant date, or (ii) a “change in control,” if any, on or prior to September 30, 2004, pursuant to which certain investor return targets are satisfied.

None of the options to purchase Common Stock (including the New Options and the Rollover Options) are exercisable more than ten years after the date the options were granted.

A summary of the status of the Company’s stock option plans as of September 30, 2002, 2001, and 2000 and changes during the years then ended is presented below:

	2002				2001				2000
	Shares		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
Outstanding at beginning of year	30,781		$	668	29,531		$	634	30,399		$	623
Granted	1,975			1,490	1,570			1,400	1,695			1,180
Exercised/cancelled	(1,050	)		1,307	(320	)		1,128	(2,563	)		864
Outstanding at end of year	31,706			698	30,781			668	29,531			634
Exercisable at end of year	21,475			481	21,428			477	16,516			300

The following table summarizes information about stock options outstanding at September 30, 2002:

Exercise Prices	Options Outstanding
	Number Outstanding	Weighted-Average Remaining Contractual Life	Number Exercisable
$    100	7,002	1.2	7,002
154	172	2.5	172
200	1,245	3.5	1,245
335	6,297	4.7	6,297
1,040	12,850	6.6	5,784
1,180	1,295	7.8	583
1,400	870	8.7	392
1,490	1,975	9.4	—
	31,706		21,475

At September 30, 2002, 1,910 remaining options were available for award under the Company’s stock option plans. In addition, 8,114 of the exercisable stock options at September 30, 2002, with exercise prices of $100 (2,992 options), $335 (3,097 options), and $1,040 (2,025 options), provide the holder a right under certain conditions, to require the Company to purchase, at fair value, 80% of the shares that can be acquired from the exercise of the options.

The Company applies Accounting Principles Board Opinion No. 25 and related interpretations in accounting for its stock option plans. No compensation cost has been recognized for the Company’s stock option plans because the exercise price of the options issued equaled the fair value of the common stock on the grant date. Had

F-16

compensation cost for the Company’s stock option plans been determined based on the fair value at the grant dates for awards under those plans consistent with the method specified in Statement No. 123 of the Financial Accounting Standards Board (“FASB”), the Company’s net income for the year ended September 30, 2002 would have been reduced by approximately $523,000; the Company’s net income for the year ended September 30, 2001 would have been reduced by approximately $1,730,000; and the Company’s net income for the year ended September 30, 2000 would have been reduced by $509,000.

The weighted average fair value of options granted during the years ended September 30, 2002, 2001, and 2000 was $351, $411, and $399, respectively. The fair value of the options granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: risk-free interest rates ranging from 3.5% to 5.4%, expected life of approximately seven years, expected volatility and dividend yield of 0%.

Warrants to Purchase Common Stock - At September 30, 2002, warrants to purchase 1,381.87 shares of Holdings’ common stock were issued and outstanding. The warrants were issued in connection with the acquisition of Champion Aviation (see Note 2) and were recorded at their estimated fair value at the date of issuance. The warrants are exercisable through May 2011 at an exercise price per share of $0.01.

Cumulative Redeemable Preferred Stock - The authorized preferred stock of Holdings consists of 75,000 shares of 16% cumulative redeemable preferred stock with a par value of $.01 per share. As of September 30, 2002, 17,496 shares of the preferred stock were issued and outstanding. The preferred stock has a stated liquidation preference of $1,000 per share. Dividends accrue and accumulate at 16% per annum, based on the liquidation preference amount, and are payable semi-annually in cash or delivery of additional shares of preferred stock. The recorded value of the preferred stock includes $0.9 million of accrued dividends that will be paid-in-kind and is net of remaining, unamortized original issuance discount and issuance costs of $2.3 million. The preferred stock, including all accumulated and unpaid dividends, is also subject to mandatory redemption in 2010. Prior to the date of mandatory redemption, under certain circumstances (including a change in control), the preferred stock is subject to optional redemption. The terms of the preferred stock require the Company to comply with certain covenants, including covenants that limit (1) acquisition indebtedness, (2) restricted payments, (3) distributions by subsidiaries, (4) transactions with affiliates, (5) dividend and other payment restrictions and (6) mergers or consolidations.

14. LEASES

The Company leases office space for its corporate headquarters and two of its divisions. The Company also leases a manufacturing facility. The office space lease requires rental payments of approximately $200,000 per year through 2004. TransDigm may also be required to share in the operating costs of the facility under certain conditions. The facility lease requires annual rental payments ranging from $540,000 to $780,000 through December 2012. TransDigm also has commitments under operating leases for vehicles and equipment. Rental expense was $1,257,000 in 2002, $1,106,000 in 2001, and $978,000 in 2000. Future, minimum rental commitments at September 30, 2002 under operating leases having initial or remaining non-cancelable lease terms exceeding one year are $1,336,000 in 2003, $1,283,000 in 2004, $1,178,000 in 2005, $990,000 in 2006, $707,000 in 2007, and $3,837,000 thereafter.

15. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company has various financial instruments, including cash and cash equivalents, accounts receivable and payable, accrued liabilities and long-term debt. The carrying value of the Company’s cash and cash equivalents, accounts receivable and payable, and accrued liabilities approximates their fair value due to the short-term maturities of these assets and liabilities. The Company also believes that the aggregate fair value of its term loans approximates its carrying amount because the interest rates on the debt are reset on a frequent basis to reflect current market rates. The fair value of the Company’s Senior Subordinated Notes approximated $205 million at September 30, 2002 based upon quoted market prices. A determination of the fair value of the Holdings PIK Notes and cumulative redeemable preferred stock is not considered practicable because they are not publicly traded.

F-17

16. CONTINGENCIES

Environmental - The Company has been addressing contaminated soil and groundwater beneath its facility in Waco, Texas. Although there can be no assurance that material expenditures will not be required in the future to address currently unidentified contamination or to satisfy further requirements of the Texas Natural Resources Conservation Commission (“TNRCC”), the Company believes, based upon information currently available, that the current soil and groundwater remediation at the Waco facility will not require the incurrence of material expenditures in excess of the escrow fund created in August 1997.

In connection with the Company’s acquisition of Marathon, a $2 million escrow was created to cover the cost of remediation that TNRCC might require at the facility. During September 1998, the former owner of Marathon filed a lawsuit against the Company to release the environmental escrow alleging that the Company had violated the requirements of the stock purchase agreement relating to the investigation of the presence of certain contaminants at the Waco, Texas facility. The Company has filed counter claims against the seller and cannot presently determine the ultimate outcome of this matter. Current estimates indicate the $2.0 million escrow is adequate to cover any costs that may be required to meet TNRCC requirements.

Put Options - During fiscal 2002, a put option (“put”) became exercisable enabling the holder to require the Company to purchase up to 80% of his Common Stock (including shares acquired through the exercise of stock options and held at least six months) at fair value, subject to certain restrictions under the Company’s long-term debt agreements and his continued service as Chairman of the Board of Holdings and TransDigm. As of September 30, 2002, there were no outstanding shares of Common Stock subject to the put; however, 8,114 shares of Common Stock that can be acquired under exercisable stock options at September 30, 2002 are subject to the put. The estimated fair value of the 6,491 shares that the Chairman of the Board could require Holdings to purchase, net of the exercise price of the related stock options, totaled approximately $15.0 million at September 30, 2002. An additional 2,475 shares of Common Stock that are issuable in the future if certain stock options become exercisable upon the occurrence of certain events (change in control, achievement of certain earnings targets, etc.) or certain specified dates in the option agreements are also subject to the put. The estimated fair value of 80% of the additional 2,475 shares, net of the exercise price of the related stock options, totaled approximately $3.0 million at September 30, 2002. Also, the Chairman of the Board and other members of management hold put rights that may become exercisable in the future with respect to other shares of common stock, including shares of common stock subject to options.

Other - During the ordinary course of business, the Company is from time to time threatened with, or may become a party to, legal actions and other proceedings. While the Company is currently involved in some legal proceedings, it believes the results of these proceedings will not have a material adverse effect on its financial condition, results of operations, or cash flows. The Company believes that its potential exposure to such legal actions is adequately covered by its aviation product and general liability insurance.

F-18

17. QUARTERLY FINANCIAL DATA (UNAUDITED)

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(In Thousands)
Year Ended September 30, 2002
Net sales	$	57,725	$	59,888	$	63,045	$	68,144
Gross profit		26,027		27,438		30,594		30,168
Net income		5,703		6,586		8,575		9,765
Year Ended September 30, 2001
Net sales	$	35,780	$	42,084	$	54,201	$	68,708
Gross profit		15,787		19,257		21,088		26,116
Net income		1,986		3,929		3,582		4,861

18. NEW ACCOUNTING STANDARDS

In June 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets which became effective for the Company on October 1, 2002. Under the provisions of SFAS No. 142 amortization of goodwill ceased effective October 1, 2002. The adoption of this statement will result in the elimination of approximately $5 million of annual goodwill amortization expense beginning in fiscal 2003. Goodwill amortization will be replaced with the requirement to test goodwill at least annually for impairment. The initial impairment test must be completed within six months of adoption of the new standard. The Company has not determined the impact, if any, that the impairment test will have on its consolidated financial position or results of operations.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations. This statement requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. The amount recorded as a liability will be capitalized by increasing the carrying amount of the related long-lived asset. Subsequent to initial measurement, the liability is accreted to the ultimate amount anticipated to be paid and is also adjusted for revisions to the timing of the amount of estimated cash flows. The capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, an entity either settles the obligation for its recorded amount or incurs a gain or loss upon settlement. The provisions of this statement became effective for the Company’s fiscal year ending September 30, 2003. The Company has not determined the impact, if any, that this statement will have on its consolidated financial position or results of operations.

In August 2001, the FASB issued SFAS No. 144, Accounting for Impairment or Disposals of Long-Lived Assets. This statement specifies the accounting model to be used for long-lived assets to be disposed of by sale (whether previously held and used or newly acquired) and by broadening the presentation of discontinued operations to include more disposal transactions. The provisions of this statement became effective for the Company’s fiscal year ending September 30, 2003. The Company has not determined the impact that this statement will have on its consolidated financial position or results of operations.

F-19

In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities”, which changes the accounting for costs such as lease termination costs and certain employee severance costs that are associated with a restructuring, discontinued operation, plant closing, or other exit or disposal activity initiated after December 31, 2002. The statement requires companies to recognize the fair value of costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. The Company anticipates that the adoption of this statement will not have a material effect on its financial position or results of operations.

19. SUPPLEMENTAL GUARANTOR INFORMATION

TransDigm’s Senior Subordinated Notes, including the additional notes issued on June 7, 2002 (see Note 9), are unconditionally guaranteed by Holdings and all direct and indirect subsidiaries of TransDigm (other than one wholly-owned, non-guarantor subsidiary that has inconsequential assets, liabilities and equity) on a senior subordinated basis. The Holdings guarantee of the Senior Subordinated Notes is subordinated to Holdings’ obligations under the Holdings PIK Notes, as well as the Holdings’ guarantee of TransDigm’s borrowings under its Senior Credit Facility. The following supplemental consolidating condensed financial information presents the balance sheets of the Company as of September 30, 2002 and 2001 and its statements of income and cash flows for the years ended September 30, 2002, 2001 and 2000.

F-20

TRANSDIGM HOLDING COMPANY

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF SEPTEMBER 30, 2002

(In Thousands of Dollars)

	Holdings			TransDigm		Subsidiary Guarantors			Eliminations			Total Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents				$	50,866	$	(1,660	)				$	49,206
Accounts receivable, net					13,636		23,705						37,341
Inventories					20,131		31,298						51,429
Deferred income taxes					9,959								9,959
Prepaid expenses and other					299		416						715
Total current assets					94,891		53,759						148,650
INVESTMENT IN SUBSIDIARIES AND INTERCOMPANY BALANCES	$	(144,430	)		377,723		(123,047	)	$	(110,246	)
PROPERTY, PLANT AND EQUIPMENT - Net					9,568		29,624						39,192
INTANGIBLE ASSETS - Net					22,665		177,358						200,023
DEBT ISSUE COSTS - Net		209			11,413								11,622
DEFERRED INCOME TAXES AND OTHER					2,739								2,739
TOTAL ASSETS	$	(144,221	)	$	518,999	$	137,694		$	(110,246	)	$	402,226
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Current portion of long-term liabilities				$	7,084							$	7,084
Accounts payable					5,551	$	6,284						11,835
Accrued liabilities					17,413		13,283						30,696
Total current liabilities					30,048		19,567						49,615
LONG-TERM DEBT - Less current portion	$	31,256			373,212								404,468
OTHER NON-CURRENT LIABILITIES					4,981		1,287						6,268
Total liabilities		31,256			408,241		20,854						460,351
CUMULATIVE REDEEMABLE PREFERRED STOCK		16,124											16,124
REDEEMABLE COMMON STOCK		2,907											2,907
STOCKHOLDERS’ EQUITY (DEFICIENCY)		(194,508	)		110,758		116,840		$	(110,246	)		(77,156	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)	$	(144,221	)	$	518,999	$	137,694		$	(110,246	)	$	402,226

F-21

TRANSDIGM HOLDING COMPANY

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF SEPTEMBER 30, 2001

(In Thousands of Dollars)

	Holdings			TransDigm		Subsidiary Guarantors			Eliminations			Total Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents				$	12,294	$	(1,073	)				$	11,221
Accounts receivable - net					17,481		22,734						40,215
Inventories					19,353		28,519						47,872
Deferred income taxes					9,749								9,749
Prepaid expenses and other					132		315						447
Total current assets					59,009		50,495						109,504
INVESTMENTS IN SUBSIDIARIES AND INTERCOMPANY BALANCES	$	(144,774	)		395,987		(141,163	)	$	(110,050	)
PROPERTY, PLANT AND EQUIPMENT - Net					10,954		31,141						42,095
INTANGIBLE ASSETS - Net					19,384		184,474						203,858
DEBT ISSUE COSTS- Net		255			12,239								12,494
DEFERRED INCOME TAXES AND OTHER					4,947								4,947
TOTAL ASSETS	$	(144,519	)	$	502,520	$	124,947		$	(110,050	)	$	372,898
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Current portion of long-term liabilities				$	15,822							$	15,822
Accounts payable					4,909	$	4,272						9,181
Accrued liabilities					17,836		10,993						28,829
Total current liabilities					38,567		15,265						53,832
LONG-TERM DEBT - Less current portion	$	27,597			371,990								399,587
OTHER NON-CURRENT LIABILITIES					6,671		1,362						8,033
Total liabilities		27,597			417,228		16,627						461,452
CUMULATIVE REDEEMABLE PREFERRED STOCK		13,222											13,222
REDEEMABLE COMMON STOCK		1,612											1,612
STOCKHOLDERS’ EQUITY (DEFICIENCY)		(186,950	)		85,292		108,320		$	(110,050	)		(103,388	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)	$	(144,519	)	$	502,520	$	124,947		$	(110,050	)	$	372,898

F-22

TRANSDIGM HOLDING COMPANY

CONDENSED CONSOLIDATING STATEMENT OF INCOME

FOR THE YEAR ENDED SEPTEMBER 30, 2002

(In Thousands of Dollars)

	Holdings			TransDigm		Subsidiary Guarantors		Eliminations		Total Consolidated
NET SALES				$	115,367	$	133,435			$	248,802
COST OF SALES					55,108		79,467				134,575
GROSS PROFIT					60,259		53,968				114,227
OPERATING EXPENSES:
Selling and administrative					12,823		9,082				21,905
Amortization of intangibles					1,137		5,157				6,294
Research and development					1,616		441				2,057
Total operating expenses					15,576		14,680				30,256
INCOME FROM OPERATIONS					44,683		39,288				83,971
INTEREST EXPENSE - Net	$	3,706			23,291		9,541				36,538
INCOME (LOSS) BEFORE INCOME TAXES		(3,706	)		21,392		29,747				47,433
INCOME TAX PROVISION (BENEFIT)		(1,313	)		7,578		10,539				16,804
NET INCOME (LOSS)	$	(2,393	)	$	13,814	$	19,208	$	—	$	30,629

F-23

TRANSDIGM HOLDING COMPANY

CONDENSED CONSOLIDATING STATEMENT OF INCOME

FOR THE YEAR ENDED SEPTEMBER 30, 2001

(In Thousands of Dollars)

	Holdings			TransDigm		Subsidiary Guarantors		Eliminations		Total Consolidated
NET SALES				$	108,650	$	92,123			$	200,773
COST OF SALES					61,554		56,971				118,525
GROSS PROFIT					47,096		35,152				82,248
OPERATING EXPENSES:
Selling and administrative					14,867		5,802				20,669
Amortization of intangibles					480		2,486				2,966
Research and development					1,983		960				2,943
Total operating expenses					17,330		9,248				26,578
INCOME FROM OPERATIONS					29,766		25,904				55,670
INTEREST EXPENSE - Net	$	2,988			24,656		4,282				31,926
INCOME (LOSS) BEFORE INCOME TAXES		(2,988	)		5,110		21,622				23,744
INCOME TAX PROVISION (BENEFIT)		(1,181	)		2,020		8,547				9,386
NET INCOME (LOSS)	$	(1,807	)	$	3,090	$	13,075	$	—	$	14,358

F-24

TRANSDIGM HOLDING COMPANY

CONDENSED CONSOLIDATING STATEMENT OF INCOME

FOR THE YEAR ENDED SEPTEMBER 30, 2000

(In Thousands of Dollars)

	Holdings			TransDigm		Subsidiary Guarantors			Eliminations		Total Consolidated
NET SALES				$	88,824	$	61,633				$	150,457
COST OF SALES					46,125		36,068					82,193
GROSS PROFIT					42,699		25,565					68,264
OPERATING EXPENSES:
Selling and administrative					12,120		4,679					16,799
Amortization of intangibles					450		1,393					1,843
Research and development					1,550		758					2,308
Total operating expenses					14,120		6,830					20,950
INCOME FROM OPERATIONS					28,579		18,735					47,314
INTEREST EXPENSE - Net	$	2,670			25,925		(32	)				28,563
INCOME (LOSS) BEFORE INCOME TAXES		(2,670	)		2,654		18,767					18,751
INCOME TAX PROVISION (BENEFIT)		(1,135	)		1,131		7,976					7,972
NET INCOME (LOSS)	$	(1,535	)	$	1,523	$	10,791		$	—	$	10,779

F-25

TRANSDIGM HOLDING COMPANY

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED SEPTEMBER 30, 2002

(In Thousands of Dollars)

	Holdings			TransDigm			Subsidiary Guarantors			Eliminations		Total Consolidated
OPERATING ACTIVITIES:
Net income (loss)	$	(2,393	)	$	13,814		$	19,208				$	30,629
Adjustments to reconcile net income (loss) to net cash provided by operating activities		3,766			12,259			7,998					24,023
Net cash provided by operating activities		1,373			26,073			27,206					54,652
INVESTING ACTIVITIES:
Capital expenditures					(1,719	)		(2,097	)				(3,816	)
Other					(1,623	)							(1,623	)
Net cash used in investing activities					(3,342	)		(2,097	)				(5,439	)
FINANCING ACTIVITIES:
Changes in intercompany activities		(1,336	)		27,032			(25,696	)				—
Proceeds from senior subordinated notes					73,629								73,629
Repayment of term loans					(84,820	)							(84,820	)
Purchase of capital stock		(37	)										(37	)
Net cash provided by (used in) financing activities		(1,373	)		15,841			(25,696	)				(11,228	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS					38,572			(587	)				37,985
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD					12,294			(1,073	)				11,221
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	—		$	50,866		$	(1,660	)	$	—	$	49,206

F-26

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED SEPTEMBER 30, 2001

(In Thousands of Dollars)

	Holdings			TransDigm			Subsidiary Guarantors			Eliminations		Total Consolidated
OPERATING ACTIVITIES:
Net income (loss)	$	(1,807	)	$	3,090		$	13,075				$	14,358
Adjustments to reconcile net income (loss) to net cash provided by operating activities		2,988			5,869			(454	)				8,403
Net cash provided by operating activities		1,181			8,959			12,621					22,761
INVESTING ACTIVITIES:
Capital expenditures					(919	)		(3,567	)				(4,486	)
Business acquisitions					(169,102	)							(169,102	)
Net cash used in investing activities					(170,021	)		(3,567	)				(173,588	)
FINANCING ACTIVITIES:
Changes in intercompany activities		(15,309	)		25,191			(9,882	)				—
Borrowings under credit facility					157,560								157,560
Proceeds from issuance of cumulative redeemable preferred stock and warrants		14,267											14,267
Repayment of amounts borrowed under credit facility					(13,949	)							(13,949	)
Purchase of common stock, including redeemable common stock		(139	)										(139	)
Net cash provided by (used in) financing activities		(1,181	)		168,802			(9,882	)				157,739
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS					7,740			(828	)				6,912
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD					4,554			(245	)				4,309
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	—		$	12,294		$	(1,073	)	$	—	$	11,221

F-27

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED SEPTEMBER 30, 2000

(In Thousands of Dollars)

	Holdings			TransDigm			Subsidiary Guarantors			Eliminations		Total Consolidated
OPERATING ACTIVITIES:
Net income (loss)	$	(1,535	)	$	1,523		$	10,791				$	10,779
Adjustments to reconcile net income (loss) to net cash provided by operating activities		2,670			3,431			(575	)				5,526
Net cash provided by operating activities		1,135			4,954			10,216					16,305
INVESTING ACTIVITIES:
Capital expenditures					(1,781	)		(2,587	)				(4,368	)
Business acquisitions					(752	)							(752	)
Net cash used in investing activities					(2,533	)		(2,587	)				(5,120	)
FINANCING ACTIVITIES:
Changes in intercompany activities		875			7,510			(8,385	)				—
Proceeds from exercise of stock options		295											295
Repayment of amounts borrowed under credit facility					(7,595	)							(7,595	)
Purchase of common stock, including redeemable common stock		(2,305	)										(2,305	)
Net cash used in financing activities		(1,135	)		(85	)		(8,385	)				(9,605	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS					2,336			(756	)				1,580
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD					2,218			511					2,729
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	—		$	4,554		$	(245	)	$	—	$	4,309

* * * * * *

F-28

INDEPENDENT AUDITORS’ REPORT

To the Shareholders and Board of Directors of

TransDigm Holding Company

We have audited the consolidated balance sheets of TransDigm Holding Company and subsidiaries (the ”Company”) as of September 30, 2002 and 2001, and the related consolidated statements of income, changes in stockholders’ deficiency and cash flows for each of the three years in the period ended September 30, 2002 and have issued our report thereon dated December 2, 2002; such consolidated financial statements and report are included on pages F-1 through F-28 of this Form 10-K. Our audits also included the consolidated financial statement schedule of the Company, shown on page F-30. This consolidated financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

DELOITTE & TOUCHE LLP

Cleveland, Ohio

December 2, 2002

F-29

TRANSDIGM HOLDING COMPANY
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED SEPTEMBER 30, 2002, 2001 AND 2000 (in thousands)
Column A	Column B		Column C								Column D		Column E
			Additions
Description	Balance at Beginning of Period		Charged to Costs and Expenses		Christie Acquisition		Champion Aviation Acquisition		Honeywell Acquisition		Deductions from Reserve (1)		Balance at End of Period
Year Ended September 30, 2002:
Allowance for doubtful accounts	$	1,156	$	953							$	804	$	1,305
Reserve for excess and obsolete inventory		7,295		2,007								2,187		7,115
Sales returns and repairs		3,363		3,442								2,556		4,249
Year Ended September 30, 2001:
Allowance for doubtful accounts		371		839								54		1,156
Reserve for excess and obsolete inventory		6,431		504			$	841	$	350		831		7,295
Sales returns and repairs		1,870		1,096				1,676				1,279		3,363
Year Ended September 30, 2000:
Allowance for doubtful accounts		441		60	$	20						150		371
Reserve for excess and obsolete inventory		7,110		684		100						1,463		6,431
Sales returns and repairs		2,163		14		100						407		1,870

(1) For the allowance for doubtful accounts and reserve for excess and obsolete inventory, the amounts in this column represent charge-offs net of recoveries. For the sales returns and repairs accrued liabilities, the amounts primarily represent expenditures charged against liabilities.

F-30

EXHIBIT INDEX

TO FORM 10-K FOR THE YEAR ENDED SEPTEMBER 30, 2002

EXHIBIT NO.	DESCRIPTION
10.3	First Amendment to the Management Stockholders’ Agreement
10.9	TransDigm Inc. Executives Retirement Savings Plan
10.10	1994 Stock Incentive Plan of TransDigm Holding Company
10.11	1998 Stock Option Plan of TransDigm Holding Company
10.12	1999 Stock Purchase Plan of TransDigm Holding Company
12.1	Computation of Ratio of Earnings to Fixed Charges
12.2	Ratio of EBITDA (As Defined) to Interest Expense
12.3	Ratio of EBITDA (As Defined) to Interest Expense (As Defined)
12.4	Ratio of Total Debt to EBITDA (As Defined)
21.1	Subsidiaries of TransDigm Holding Company

F-31

EX-10.3

Exhibit 10.3

FIRST AMENDMENT TO THE

MANAGEMENT STOCKHOLDERS’ AGREEMENT

THIS FIRST AMENDMENT, dated as of December 12, 2002 (this “Amendment”), is made to that certain Management Stockholders’ Agreement, dated as of December 3, 1998 (the “Management Stockholders’ Agreement”), by and among TransDigm Holding Company, a Delaware corporation (“Holdings”), Odyssey Investment Partners Fund, LP (“Odyssey”), and those employees of TransDigm Inc. (“TransDigm”) listed on Schedule A to the Management Stockholders’ Agreement, as such Schedule has been amended though the date hereof (the “Management Stockholders”).

RECITALS

WHEREAS, pursuant to the Management Stockholders’ Agreement, certain of the Management Stockholders (the “Roll-Over Stockholders”) hold certain Roll-Over Options (as defined in the Management Stockholders’ Agreement) to purchase the number of shares of common stock of Holdings, $0.01 par value (“Common Stock”) listed opposite such Roll-Over Stockholder’s name on Exhibit A hereto (such Common Stock, the “Roll-Over Shares”);

WHEREAS, the Roll-Over Stockholders have been granted, and from time to time may be granted, additional options to purchase shares of Common Stock, and may otherwise now own or hereafter acquire additional shares of Common Stock;

WHEREAS, the Roll-Over Stockholders desire to amend the pricing terms applicable to the rights of Holdings to repurchase the Roll-Over Shares under certain circumstances;

WHEREAS, pursuant to Section 13 of the Management Stockholders’ Agreement, Holdings, Odyssey and the Majority Management Stockholders (as such term is defined in the Management Stockholders’ Agreement) may amend such agreement from time to time by an instrument in writing;

WHEREAS, as consideration for, and as an inducement to the willingness of Holdings, Odyssey and the Majority Management Stockholders to agree to, such amendment, each of the Roll-Over Stockholders desire to grant to Odyssey an irrevocable proxy to exercise such Roll-Over Stockholder’s power to vote his respective Common Stock (including Roll-Over Shares) in accordance with the terms hereof; and

WHEREAS, the parties now desire to amend the Management Stockholders’ 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.    Section 3.1 of the Management Stockholders’ Agreement is hereby deleted in its entirety and replaced with the following Section 3.1:

“3.1    Holdings’ Rights.  Subject to all subsections of this Section 3 and Section 7, Holdings shall have the right to purchase from a Management Stockholder, and such Management Stockholder shall have the obligation to sell to Holdings, all, but not less than all, of such Management Stockholder’s shares of Common Stock:

(a)    With respect to shares of Common Stock other than Roll-Over Shares, at the Fair Market Value of the shares of Common Stock to be purchased if such Management Stockholder’s employment with Holdings or any of its subsidiaries is terminated as a result of any of (i) the termination by Holdings or any such subsidiary of such Management Stockholder’s employment without Cause, (ii) the death or Disability of such Management Stockholder or (iii) the resignation of such Management Stockholder for Good Reason or without Good Reason;

(b)    With respect to shares of Common Stock other than Roll-Over Shares, at the lesser of the Fair Market Value and the Carrying Value of the shares of Common Stock to be purchased if such Management Stockholder’s employment with Holdings or any of its subsidiaries is terminated by Holdings or any such subsidiary for Cause; or

(c)    With respect to shares of Common Stock that are Roll-Over Shares, at the greater of the Fair Market Value and the Carrying Value of the shares of Common Stock to be purchased if such Management Stockholder’s employment with Holdings or any of its subsidiaries is terminated for any reason.”

2.    Section 3.3 of the Management Stockholders’ Agreement is hereby amended to add the phrase “and Section 3.1(c)” after the reference to Section 3.1(a) in the second line thereof.

3.    Section 6.4 of the Management Stockholders’ Agreement is hereby deleted in its entirety and replaced with the following Section 6.4:

“6.4    Carrying Value.

For the purposes of this Agreement, the “Carrying Value” of a share of Common Stock being purchased by Holdings shall be:

(a)    With respect to shares of Common Stock other than Roll-Over Shares, the price paid by the selling Management Stockholder for any such share plus simple interest at a rate per annum equal to 6% which shall be deemed to be the carrying cost, from the date of the purchase of such share by the selling Management Stockholder through the date of such purchase by Holdings, less the amount of dividends paid to such Management Stockholder in respect of such share (to the extent that the amount of such dividends does not exceed such simple interest); and

(b)    With respect to shares of Common Stock that are Roll-Over Shares, $1,040 per share plus simple interest at a rate per annum of 6% commencing as of December 3, 1998, less the amount of dividends paid to a Management Stockholder in respect of such shares (to the extent that the amount of such dividends does not exceed such simple interest).”

2

4.    Section 20(c) is hereby amended by deleting “Maureen A. Riley, Esq.” and replacing it with “Robert F. Kennedy.”

5.    A new Section 26 is hereby inserted immediately following Section 25.19 of the Management Stockholders’ Agreement as follows:

“26.    Voting Agreement and Irrevocable Proxy.

26.1    Irrevocable Proxy.  Notwithstanding anything to the contrary in Section 9, effective as of the Effective Time (as defined below), each Management Stockholder set forth on Exhibit A hereto (each, a “Roll-Over Stockholder”) hereby grants to Odyssey or any affiliate of Odyssey such Roll-Over Stockholder’s proxy, and appoints Odyssey or any affiliate of Odyssey as such Roll-Over Stockholder’s attorney-in-fact (with full power of substitution), to vote or act by written consent with respect to the Common Stock now or hereafter owned by such Roll-Over Stockholder in connection with any and all matters, including, without limitation, matters set forth hereunder as to which any vote or actions may be requested or required. This proxy is coupled with an interest and shall be irrevocable, and each Roll-Over Stockholder will take such further action or execute such other instruments as may be reasonably necessary to effectuate the intent of this proxy and, effective as of the Effective Time, hereby revokes any proxy previously granted by him with respect to his Common Stock. This irrevocable proxy shall not apply to any shares of Common Stock held by TD Equity, LLC, provided that if TD Equity, LLC distributes, sells, or otherwise transfers any of its shares of Common Stock to a Roll-Over Stockholder, such shares shall be subject to this irrevocable proxy upon such distribution, sale or transfer.

26.2    Representations and Warranties of the Roll-Over Stockholders.  Each Roll-Over Stockholder hereby severally and not jointly represents and warrants to Odyssey that:

(a)    Due Authorization.  All corporate, partnership or trust action, if applicable, on the part of such Roll-Over Stockholder necessary for the authorization, execution and delivery of this Agreement has been taken and this Agreement constitutes the valid and legally binding obligation of each Roll-Over Stockholder enforceable against such Roll-Over Stockholder in accordance with its terms, subject to applicable bankruptcy, insolvency, and other similar laws affecting creditors’ rights, and rules of law governing specific performance.

(b)    Ownership of Securities.  Upon exercise of the Roll-Over Options held by any Roll-Over Stockholder, such Roll-Over Stockholder will be the record and beneficial owner of the number of Roll-Over Shares set forth on Exhibit A attached hereto. Upon exercise of Options (other than the Roll-Over Options) held by such Roll-Over Stockholder, such Roll-Over Stockholder will be the record and beneficial owner of the Common Stock subject thereto. Such Roll-Over Stockholder will have sole voting power and sole power to issue instructions with respect to the voting of all shares of Common Stock (including the Roll-Over Shares) issued upon exercise of Options or otherwise acquired or held by the Roll-Over Stockholder, sole power of disposition, sole power of exercise or conversion and the sole power to demand appraisal rights, in each case with respect to all of the shares of Common Stock (including the Roll-Over Shares) issued

3

upon exercise of Options or otherwise acquired or held by the Roll-Over Stockholder, except as limited hereby.

26.3    Covenants of the Roll-Over Stockholders.  Each Roll-Over Stockholder hereby covenants severally and not jointly to not, directly or indirectly, take any action that would make any representation or warranty contained herein untrue or incorrect or have the effect of preventing or disabling such Roll-Over Stockholder from performing his obligations under this Section 26.

26.4    Specific Performance.  Each Roll-Over Stockholder hereby acknowledges that damages would be an inadequate remedy for any breach of the provisions of this Section 26 and agrees that the obligations of the Roll-Over Stockholder shall be specifically enforceable and that Odyssey shall be entitled to injunctive or other equitable relief upon such a breach by any Roll-Over Stockholder. This provision is without prejudice to any other rights that Odyssey may have against a Roll-Over Stockholder for any failure to perform the Roll-Over Stockholder’s obligations under this Section 26 or under this Agreement generally.

26.5    Effective Time.  The proxy and power of attorney granted pursuant to Section 26.1 hereof by each Roll-Over Stockholder with respect to each share of Common Stock shall be effective upon the later of (a) the date on which such share of Common Stock is issued to such Roll-Over Stockholder and (b) the termination of such Roll-Over Stockholder’s employment for any reason (the “Effective Time”).”

6.    Exhibit A attached hereto shall be attached to the Management Stockholders’ Agreement as Exhibit A.

7.    In all other respects, the Management Stockholders’ Agreement shall remain in full force and effect.

8.    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.

[signature pages follow]

4

IN WITNESS WHEREOF, the parties have executed this Amendment on the date and year first above written.

TRANSDIGM HOLDING COMPANY

By:

Name:

Title:

ODYSSEY INVESTMENT PARTNERS FUND, LP
By:	ODYSSEY CAPITAL PARTNERS, LLC, its general partner
By:
Name:
Title:

MAJORITY MANAGEMENT STOCKHOLDERS

Douglas W. Peacock

W. Nicholas Howley

5

By signing below, each of the undersigned grants the irrevocable proxy set forth in Section 26 of the Management Stockholders Agreement, included in Section 5 of this Amendment, and makes the representations, warranties and covenants as set forth therein.

ROLL-OVER STOCKHOLDERS MAJORITY

Douglas W. Peacock

W. Nicholas Howley

Raymond F. Laubenthal

Robert S. Henderson

Bernt G. Iversen, II

Albert J. Rodriguez

James F. Skulina

Gray W. McMurtrey

6

Exhibit A

Name of Roll-Over Stockholder	Roll-Over Shares
Douglas W. Peacock	6,089
W. Nicholas Howley	5,790
Raymond F. Laubenthal	780
Robert S. Henderson	772
Bernt G. Iversen, II	462
Albert J. Rodriguez	583
James F. Skulina	200
Gray W. McMurtrey	40

EX-10.9

Exhibit 10.9

Preamble

TransDigm Inc. (the “Company”) hereby establishes the TransDigm Inc. Executives Retirement Savings Plan (the “Plan”), effective as of the date specified herein. The Company intends to establish and maintain the plan as an unfunded retirement plan for a select group of management or highly compensated employees.

The purpose of the Plan is to permit designated executives of the Company and its affiliates to accumulate additional retirement income through a nonqualified deferred compensation plan that enables them to make elective deferrals in addition to or in lieu of those permitted under the TransDigm, Inc. Retirement and 401(k) Plan.

ARTICLE 1.

Definitions

As used in this Plan, the following capitalized words and phrases have the meanings indicated, unless the context requires a different meaning:

1.1.  “Account” means the amounts credited to a Participant’s Salary Reduction Account under the Plan pursuant to the Participation’s Salary Reduction Agreement.

1.2.  “Allocation Date” means the last day of any Plan Year and any other dates chosen by the committee.

1.3.  “Beneficiary” means the person or persons designated by a Participant, or otherwise entitled, to receive any amount credited to his Account that remains undistributed at his death.

1.4.  “Board of Directors” or “Board” means the board of directors of the Company.

1.5.  “Committee” means the committee appointed in accordance with Section 8.1 to administer the Plan.

1.6.  “Company” means TransDigm, Inc., a Delaware corporation, and any successor thereto.

1.7.  “Compensation” means the aggregate compensation paid to a Participant by the Company for a Plan Year, including salary, overtime pay, commissions, bonuses and all other items that constitute wages within the meaning of section 3401(a) of the Code or are required to be reported under section 6041(d), 6051(a)(3) or 6052 of the Code. Compensation also includes Salary Reduction Accruals under this Plan and any elective deferrals under cash-or-deferred arrangements or cafeteria plans that are not includible in gross income by reason of section 125 or 402(a)(8) of the Code but does not include any other amounts contributed pursuant to, or received under.

TransDigm Inc. Executive Retirement Savings Plan

Page 1

1.8.  “Disability” means a mental or physical condition that, in the opinion of a licensed physician approved by the Committee, renders a Participant permanently incapable of satisfactorily performing his usual duties for the Company or the duties of such other position as the Company may make available to him for which he is qualified by reason of training, education or experience.

1.9.  “Early Retirement Date” means the day the Participant actually retires from active employment with the Company or an affiliate due to the later of (a) a Participant’s fifty-fifth (55th) birthday; or (b) his completion of five (5) Years of Service.

1.10.  “Effective Date” means January 1, 1997, the date on which this Plan went into effect.

1.11.  “Eligible Employee” means any key executive of the Company or an affiliate as determined annually at the discretion of the Board of Directors. The Board of Directors shall determine prior to the beginning of each Plan Year the employees eligible to participate in the Plan for that particular Plan Year. An eligible employee shall be a member of a “select group of management or highly compensated employees” as referred to in Title I of ERISA.

1.12.  “Entry Date” means the Effective Date and each January 1st thereafter.

1.13.  “Normal Retirement Date” means the day the Participant actually retires from active employment with the Company or an affiliate due to the attainment of age 65.

1.14.  “Participant” means any Eligible Employee who satisfies the conditions for participation in the Plan set forth in Section 2.1.

1.15.  “Plan” means the TransDigm Inc. Executive Retirement Savings Plan, as set forth herein and as from time to time amended.

1.16.  “Plan Year” means the accounting year of the Plan, ending each calendar year, December 31st.

1.17.  “Salary Reduction Accrual” means an amount credited to the Salary Reduction Account pursuant to a Salary Reduction Agreement.

1.18.  “Salary Reduction Account” means the account established to record Salary Reduction Accruals authorized by Participants under the terms of this Plan.

1.19.  “Salary Reduction Agreement” means an agreement between a Participant and the Company, under which the Participant agrees to a reduction in his Compensation and the Company agrees to credit him with Salary Reduction Accruals under this Plan.

TransDigm Inc. Executive Retirement Savings Plan

Page 2

1.20.  “Termination of Employment” means a Participant’s or former Participant’s separation from the service of the Company (including all affiliates of the Company) by reason of his resignation, retirement, discharge or death.

1.21.  “Trust” or “Trust Fund” means any trust established to hold amounts set aside by the Company or its affiliates in accordance with Section 4.5.

1.22.  “Trustee” means National City Bank and any additional or successor trustee of the Trust Fund.

1.23.  “Valuation Date” means any Allocation Date and any other date chosen by the Committee as of which the value of Participants’ Accounts is determined.

1.24.  “Years of Service” means the total number of years for which a Participant has received credit toward vesting under the TransDigm, Inc. Retirement and 401(k) Plan.

1.25.  Rules of construction

1.25.1.  Governing law.    The construction and operation of this Plan and Trust are governed by the laws of the State of Ohio.

1.25.2.  Undefined terms.    Unless the context clearly requires another meaning, any term not specifically defined in this Plan is used in the sense given to it by the TransDigm, Inc. Retirement and 401(k) Plan.

1.25.3.  Headings.    The headings of Articles, Sections and Subsections are for reference only and are not to be utilized in construing the Plan.

1.25.4.  Gender.    Unless clearly inappropriate, all pronouns of whatever gender refer indifferently to persons or objects of any gender.

1.25.5.  Singular and plural.    Unless clearly inappropriate, singular terms refer also to the plural number and vice versa.

1.25.6.  Severability.    If any provision of this Plan is held illegal or invalid for any reason, the remaining provisions are to remain in full force and effect and to be construed and enforced in accordance with the purposes of the Plan as if the illegal or invalid provision did not exist.

TransDigm Inc. Executive Retirement Savings Plan

Page 3

ARTICLE 2.

Participation in the Plan

2.1.  Commencement of participation.    An employee of the Company or an affiliate becomes a Participant on the earliest Entry Date on which he satisfies all of the following conditions:

(a) he is an Eligible Employee; and

(b) he has executed a valid Salary Reduction Agreement that is still in effect.

2.2.  Cessation of participation.    If a Participant ceases to satisfy any of the conditions set forth in Section 2.1, his participation in this Plan terminates immediately, except that his Account will continue to be held for his benefit and will be distributed to him in accordance with the provisions of Article 6. He may resume participation as of any Entry Date on which he again satisfies the conditions of Section 2.1.

ARTICLE 3.

Accounts Under the Plan

3.1.  Establishment of Accounts.    The accounts specified in this Section 3.1 are established under the Plan to record the liability of the Company to Participants. All Accounts are maintained on the books of the Company, and the Company is under no obligation to segregate any assets to provide for these liabilities.

3.1.1.  Salary Reduction Accounts.    A Salary Reduction Account is maintained for each Participant for the purpose of recording the current value of his Salary Reduction Accruals.

3.2.  Valuation of Accounts

3.2.1.  Timing of valuation.    All Accounts are valued as of each Allocation Date and as of any other Valuation Date fixed by the Committee.

3.3.  Method of valuing Accounts.    The value of a Participant’s Account as of any Valuation Date shall reflect each Participant’s interest in the Plan. The Participant’s interest shall be calculated as if the Participant’s Salary Reduction Account balance were actually invested in accordance with the directions of the Participant made in accordance with the terms of this Plan, including applicable default provisions. The Company shall have no obligation to actually invest any amounts in accordance with such directions.

TransDigm Inc. Executive Retirement Savings Plan

Page 4

ARTICLE 4.

Accrual of Benefits

4.1.  Salary Reduction Accruals.    For any Plan Year, Salary Reduction Accruals are credited to each Participant to the extent specified in his Salary Reduction Agreement in effect for the Plan Year.

4.2.  Timing of accruals.    Salary Reduction Accruals are deemed to accrue on the date on which the Participant would otherwise have received the Compensation that he elected to defer. A Participant whose Termination of Employment occurred before the date on which any amount described in Section 4.1 would otherwise have accrued is not entitled to that accrual, unless his Termination of Employment was due to his Death, Disability or retirement at or after his Early Retirement Date or Normal Retirement Date.

4.3.  Salary Reduction Agreements

4.3.1.  Authorization of Salary Reduction Accruals.    By executing a Salary Reduction Agreement and filing it with the Committee with respect to a Plan Year, a Participant may elect to have Salary Reduction Accruals credited under the Plan on his behalf. The current salary and bonus of a Participant who executes and files a Salary Reduction Agreement are reduced by the amount specified in his election, and an equal amount is accrued under the Plan in accordance with Section 4.1. An agreement may specify either a dollar amount or a percentage reduction and may specify whether the reduction is applied to regular salary, to bonuses or to both. Salary Reduction Contributions may not be made with respect to Compensation other than salary and bonuses.

4.3.2.  Timing of Salary Reduction Agreements.    A Salary Reduction Agreement with respect to regular salary for any Plan Year after 1997 must be executed and filed with the Committee no later than the last day of the preceding Plan Year. A Salary Reduction Agreement with respect to regular salary for the 1997 Plan Year must be executed and filed with the Committee before the Effective Date. A Salary Reduction Agreement with respect to regular salary for a Plan Year may be changed, prospectively, by an administratively reasonable date prior to the first day of a calendar quarter in such Plan Year. A Salary Reduction Agreement with respect to a bonus must be executed and filed with the Committee at least sixty (60) days prior to the date the amount of such bonus is determined by the Board (or other appropriate individual or entity) or such earlier date as the Committee shall direct. No Salary Reduction Agreement may be amended or revoked after the last day on which it could have been executed, except that an agreement is automatically revoked if the Participant who executed it ceases to be eligible to participate in the Plan.

4.3.3.  Limitations on Salary Reduction Accruals.    The maximum amount (if any) that may be deferred by a Participant in accordance with Section 4.1. shall be determined by the Committee.

TransDigm Inc. Executive Retirement Savings Plan

Page 5

4.4.  Investment of Accruals.    The Salary Reduction Accounts of Participants and former Participants shall be accounting entities only.

4.4.1  Deemed Investments.    The Company shall make available one or more deemed investment options for Participants and former Participants with Salary Reduction Account balances. Participants and former Participants may direct the deemed investment of such Account balances in accordance with a uniform procedure established by the Committee which may provide an interest only option paying a reasonable rate of interest and/or investment alternatives modeled after real world alternatives. The Committee shall cause appropriate records to be maintained in order to determine the Account balances of Participants and former Participants.

4.4.2.  Contributions to Trust Fund.    The Company may establish a Trust Fund and make contributions to it corresponding to any or all amounts accrued under Section 4.1. These contributions shall be credited with income, expense, gains and losses in accordance with the investment experience of the Trust Fund and the terms and provisions of any applicable trust agreement.

4.5.  Status of the Trust Fund.    Notwithstanding any other provision of this plan, all assets of the Trust Fund remain the property of the Company and are subject to the claims of its creditors. No Participant has any priority claim on Trust assets or any security interest or other rights in or to them superior to the rights of general creditors of the Company.

4.6.  Nonalienability.    A Participant’s or former Participant’s rights under this Plan may not be voluntarily or involuntarily assigned or alienated. If a Participant or former Participant attempts to assign his rights or enters into bankruptcy proceedings, his right to receive payments personally under the Plan will terminate, and the Committee may apply them in such manner as will, in its judgment, serve the best interests of the Participant or former Participant.

ARTICLE 5.

Vesting

5.1.  Definition of “vesting”.    A Participant’s interest in his Accounts is “vested” when it is not subject to forfeiture for any reason.

5.2.  Vesting requirements  A Participant’s interest in his Salary Reduction Accrual Account, is fully (100%) vested at all times.

ARTICLE 6.

Distributions to Participants

6.1  Timing and manner of distribution.

TransDigm Inc. Executive Retirement Savings Plan

Page 6

6.1.1  Election of distribution date and manner of distribution.    Each Salary Reduction Agreement must specify when and in what form benefits accrued under the Plan while the Agreement is in effect will be distributed to the Participant or his Beneficiary. A Participant may elect any date and form of distribution that is acceptable to the Committee, except that the date of distribution may not in any case be earlier than his date of Termination of Employment. The Participant and the Committee may agree to change the time or manner of distribution specified in a Salary Reduction Agreement, but only if the change is agreed to ninety (90) days preceding Termination of Employment, or such earlier date as shall be determined by the committee.

6.1.2  Methods of distribution.    Participants may receive distributions from the Plan only upon the occurrence of one or more of the events specifically described in Section 6.2. Distribution will be made in one of the following methods as previously elected by the Participant and applicable to his entire Account balance: (1) payment in a one-time, single sum distribution payable as soon as administratively feasible, but no later than 90 days after the occurrence of a triggering event; (2) payment in three equal annual installments commencing as soon as administratively feasible, but no later than 90 days after the occurrence of a triggering event; or (3) payment in the form of an annuity contract to be purchased from a qualified insurance carrier at the discretion of the Committee, which annuity contract shall be distributed to such Participant as soon as administratively feasible, but no later than 90 days after the occurrence of a triggering event.

6.1.3.  Payments from Company of Trust Fund.    Payment of benefits under this Plan may be made either directly from the Company or from any Trust Fund established by the Company, at the discretion of the Company. Payments from the Trust Fund shall offset the liability of the Company hereunder and payments directly by the Company shall offset the liability of any such Trust Fund.

6.2.  Events triggering distribution.    The occurrence of any of the following events may result in a distribution of a Participant’s accrued benefit under the Plan:

6.2.1.  Death, disability, or early or normal retirement.    The death of a Participant, termination of his employment with the Company by reason of total and permanent disability, or his attainment of early or normal retirement. Whether a Participant’s termination of employment is due to total and permanent disability shall be determined by the Committee in good faith.

6.2.2.  Change of control.    Change of control or ownership of the Company as defined in this Section, shall mean (a) the purchase or other acquisition in one or more transactions other than from the Company, by any individual, entity or group of persons, within the meaning of Section 13(d)(3) or 14(d) of the Securities Exchange Act of 1934 or any comparable successor provisions, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934) of 50 percent or more of either the outstanding shares of common stock or the combined voting power of the Company’s parent company, Kelso Corporation’s then outstanding voting securities entitled to vote generally; (b) the approval by the stockholders of the Company or Kelso Corporation of a reorganization, merger, or consolidation, in each case, with respect to which persons who were stockholders of the Company or Kelso Corporation immediately prior to a such reorganization, merger or consolidation do not immediately

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thereafter own more than 50 percent of the combined voting power of the reorganized, merged or consolidated Company’s then outstanding securities that are entitled to vote generally in the election of directors; or (c) the sale of substantially all of the Company’s assets. The Committee shall determinate whether a Change in Control shall result in a distribution of a Participant’s accrued benefit under the Plan.

6.2.3.  Change in employment status.    A change in a Participant’s employment status by reason of termination, voluntary or involuntary, or retirement from active employment with the Company, whether prior or subsequent to the Participant’s attaining normal retirement age.

6.2.4.  Significant below-plan financial performance.    The Company’s “earnings before interest and taxes” or “EBIT” falls 15% or more below Company established fiscal plan goals or targets for two consecutive fiscal quarters. At such point in time, the Committee shall review all of the pertinent facts and circumstances surrounding the decrease in EBIT and shall in its sole discretion determine whether this is in the best interest of the Plan Participant that the accrued benefit be paid.

6.2.5.  Filing of material litigation.    The filing of any state or federal lawsuit alleging material damages against the Company that pose a real and substantial threat to the continued viable existence of the Company as an ongoing, profitable concern. The Committee shall have sole discretion in determining the extent of the threat posed and potential damages thereunder. This provision shall apply regardless of whether the Company was named directly in the suit, named or joined as a class action or third-party defendant, or made subject to any cross-or counter-claims under the applicable procedural rules of any state or federal jurisdiction.

6.2.6.  Unforeseeable emergency.    The occurrence of an unforeseeable emergency. In order to qualify as such, the emergency must constitute an unanticipated emergency caused by an event beyond the control of the participant or beneficiary that would result in financial hardship to the individual if early withdrawal were not permitted. Specifically, unforeseeable emergency is financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent of the Participant, loss of the Participant’s property due to casualty, or other similar circumstances arising as a result of events beyond the control of the Participant as further defined in Treas. Reg. §1.457-2(h). The amount of any withdrawal or distribution under this Section is limited to that amount reasonably necessary to meet the emergency.

6.2.7.  Special Distribution.    A Participant or former Participant may demand payment of the adjusted current balance of his Salary Deferral Account at any time. Such demand shall be in writing, signed by the Participant or former Participant, and submitted to the Committee and shall indicate the date of payment which shall not be earlier than an administratively reasonable period of time following the date the demand is filed with the Committee. Such payment shall be in a single sum. The amount of the payment shall be ninety percent (90%) of the Participant’s or former Participant’s Account balance on the date of distribution. The remaining ten percent (10%) shall be permanently forfeited.

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6.2.8.  Marginal tax rate increase.    The proposal or enactment of any federal legislation that will increase the marginal individual income tax rates so that the deferral of income to future years will result in greater income tax liability when compared with current recognition of income. Such determination of the likely effect of any proposed or enacted legislation shall be made by the Committee.

6.3.  Type of property to be distributed.    All distributions from the Plan to Participants and Beneficiaries are made in cash, unless the Participant has elected distribution in the form of an annuity contract in which case the distribution shall be made in the form of such contract

6.4.  Manner of distribution to minors or incompetents.    If at any time any distributee is, in the judgment of the Committee, legally, physically or mentally incapable of receiving any distribution due to him, the distribution may, if the Committee so directs, be made to the guardian or legal representative of the distributee, or, if none exists, to any other person or institution that, in the Committee’s judgment, will apply the distribution in the best interests of the intended distributee.

6.5.  Election of Beneficiary

6.5.1.  Designation or change of Beneficiary by Participant.    When an Eligible Employee qualifies for participation in the Plan, the Committee will send him a Beneficiary designation form, on which he may designate one or more Beneficiaries and successor Beneficiaries. A Participant may change his Beneficiary designation at any time by filing the prescribed form with the Committee. No Beneficiary has any rights under this Plan except as are provided by its terms. The rights of a Beneficiary who predeceases the Participant who designated him immediately terminate, unless the Participant has specified otherwise.

6.5.2.  Beneficiary if no election is made.    Unless a different Beneficiary has been elected in accordance with Section 6.5.1., the Beneficiary of any Participant who is lawfully married on the date of death is his surviving spouse. The Beneficiary of any other Participant who dies without having designated a Beneficiary in his estate.

ARTICLE 7.

Amendment or Termination of the Plan

7.1.  Company’s right to amend Plan.    The Board of Directors may, at any time and from time to time, amend, in whole or in part, any of the provisions of this Plan or may terminate it as a whole or with respect to any Participant or group of Participants. Any such amendment is binding upon all Participants and their Beneficiaries, the Trustee, the Committee and all other parties in interest. Such an amendment shall be evidence by a written amendment to the Plan, executed by two executive officers of the Company.

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7.2.  When amendments take effect.    A resolution amending or terminating the Plan becomes effective as of the date specified therein which date shall be set forth in the written amendment.

7.3.  Restriction on retroactive amendments.    No amendment may be made that retroactively deprives a Participant of any benefits accrued before the date of the Board’s action amending the Plan.

ARTICLE 8.

Plan Administration

8.1.  The Administrative Committee.    The Plan shall be administered by the Committee consisting of one or more persons appointed by the Board of Directors. The board may remove any member of the Committee at any time, with or without cause, and may fill any vacancy. If a vacancy occurs, the remaining member or members of the Committee have full authority to act. The Board is responsible for transmitting to the Trustee the names and authorized signatures of the members of the Committee and, as changes take place in membership, the names and signatures of new members. Any member of the Committee may resign by delivering his written resignation to the Board, the Trustee and the Committee. Any such resignation becomes effective upon its receipt by the Board or on such other date as is agreed to by the Board and the resigning member. The Committee acts by a majority of its members at the time in office and may take action either by vote at a meeting or by consent in writing without a meeting. The Committee may adopt such rules and appoint such subcommittees as it deems desirable for the conduct of its affairs and the administration of the Plan. In the event the Board does not name a Committee, the Board of Directors shall act as the Committee.

8.2.  Powers of the Committee.    In carrying out its duties with respect to the general administration of the Plan, the Committee has, in addition to any other powers conferred by the Plan or by law, the following powers:

(a)  to determine all questions relating to eligibility to participate in the Plan other than the selection of Eligible Employees which shall be done by the Board of Directors subject to the limitations of the Plan;

(b)  to compute and certify to the Trustee the amount and kind of distributions payable to Participants and their Beneficiaries;

(c)  to maintain all records necessary for the administration of the Plan that are not maintained by the Company or the Trustee;

(d)  to interpret the provisions of the Plan and to make and publish such rules for the administration of the Plan which are not inconsistent with the terms thereof;

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(e)  to establish and modify the method of accounting for the Plan or the Trust;

(f)  to employ counsel, accountants and other consultants to aid in exercising its powers and carrying out its duties hereunder; and

(g)  to perform any other acts necessary and proper for the administration of the Plan, except those that are to be performed by the Trustee.

8.3.  Indemnification.

8.3.1.  Indemnification of members of the Committee and others by the Company.    The Company agrees to indemnify and hold harmless each member of the Committee, or other individual employee of the Company or an affiliate in the administration of this Plan, against any and all expenses and liabilities arising out of his action or failure to act in such capacity, excepting only expenses and liabilities arising out of his own willful misconduct or gross negligence. This right of indemnification is in addition to any other rights to which any member of the Committee or such other individual employee may be entitled.

8.3.2.  Liabilities for which member of the Committee and others are indemnified.    Liabilities and expenses against which a member of the Committee, or other individual employee of the Company or an affiliate in the administration of this Plan, is indemnified hereunder included, without limitation, the amount of any settlement or judgment, costs, counsel fees and related charges reasonably incurred in connection with a claim asserted or a proceeding brought against him or the settlement thereof.

8.3.3.  Company’s right to settle claims.    The Company may, at its own expense, settle any claim asserted or proceeding brought against any member of the Committee, or other individual employee of the Company or an affiliate in the administration of this Plan, when such settlement appears to be in the best interests of the Company.

8.4.  Claims procedure.    If a dispute arises between the Committee and a Participant of Beneficiary over the amount of benefits payable under the Plan, the Participant of Beneficiary may file a claim for benefits by notifying the Committee in writing of his claim. The Committee will review and adjudicate the claim. If the claimant and the Committee are unable to reach a mutually satisfactory resolution of the dispute, it will be submitted to arbitration under the rules of the American Arbitration Association. Each Participant agrees, by the execution of a Salary Reduction Agreement, that arbitration will be the first means of resolving disputes arising under the Plan.

8.5.  Expenses of the Committee.    The members of the Committee serve without compensation for services. All expenses of the Committee are paid by the Company.

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ARTICLE 9.

Miscellaneous

9.1.  Plan not a contract of employment.    The adoption and maintenance of the Plan does not constitute a contract between the Company and any Participant or to be a consideration for the employment of any person. Nothing herein contained give any Participant the right to be retained in the employ of the Company or derogates from the right of the Company to discharge any Participant at any time without regard to the effect of such discharge upon his rights as a Participant in the Plan.

9.2.  No rights under Plan except as set forth herein.    Nothing in this Plan, express or implied, is intended, or shall be construed, to confer upon or give to any person, firm, association, or corporation, other than the parties hereto and their successors in interest, any right, remedy, or claim under or by reason of this Plan or any covenant, condition, or stipulation hereof, and all covenants, conditions and stipulation in this Plan, by or on behalf of any party, are for the sole and exclusive benefit of the parties hereto.

IN WITNESS WHEREOF, TransDigm Inc. has caused this Plan to be executed by its duly authorized officers this 23rd day of December 1996.

TransDigm Inc.

(the “Company”)

By:

And:

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EX-10.10

Exhibit 10.10

TRANSDIGM HOLDING COMPANY

1994 STOCK INCENTIVE PLAN

SECTION 1.

PURPOSE

         The purpose of the Plan is to foster and promote the long-term financial success of the Company and materially increase shareholder value by (a) motivating superior performance by means of performance-related incentives, (b) encouraging and providing for the acquisition of an ownership interest in the Company by Employees, and (c) enabling the Company to attract and retain the services of an outstanding management team upon whose judgment, interest, and special effort the successful conduct of its operations is largely dependent.

SECTION 2.

DEFINITIONS

         2.1. Definitions.    Whenever used herein, the following terms shall have the respective meanings set forth below: -

(a) “Act” means the Securities Exchange Act of 1934, as amended.

(b) “Adjustment Event” shall mean any stock dividend, stock split or share combination of, or extraordinary cash dividend on, the Common Stock or recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares, warrants or rights offering to purchase Common Stock at a price substantially below Fair Market Value, or other similar event affecting the common stock of the Company.

(c) “Board” means the Board of Directors of the Company.

(d) “Cause” means (i) the continued failure, after written notice, by a Participant substantially to perform his duties and responsibilities as an officer or employee of the Company or any of its Subsidiaries

(other than any such failure resulting from incapacity due to reasonably documented physical or mental illness) or (ii) the engaging by such Participant in serious misconduct which is material to the performance by such Participant of his duties and obligations for the Company or any of its Subsidiaries, including, without limitation, the disclosure of material secret or confidential information of the Company or any Subsidiary.

(e) “Change of Control” means a transaction or series of transactions (other than a Public Offering) whereby any “person” including a “group” (as such terms are used in Sections 13(d) and 14(d)(2) of the Act, but excluding the Company, any of its Subsidiaries, any employee benefit plan of the Company or any of its Subsidiaries, Kelso and its affiliates, is or becomes the “beneficial owner” (as defined in Rule 13(d)(3) under the Act), directly or indirectly, of securities of the Company representing the greater of 50% or more of the combined voting power-of the Company’s then outstanding securities;

(f) “Change in Control Price” means the highest price per share of Common Stock offered in conjunction with any transaction resulting in a Change in Control (as determined in good faith by the Committee if any part of the offered price is payable other than in cash).

(g) “Code” means the Internal Revenue Code of 1986, as amended.

(h) “Committee” means the Compensation Committee of the Board (or such other committee of the Board that the Board shall designate), which shall consist of two or more members, each of whom shall be “disinterested persons” within the meaning of Rule 16b-3, as promulgated under the Act and serving at the pleasure of the Board.

(i) “Common Stock” means the common stock of the Company, par value $0.01 per share.

(j) “Company” means TransDigm Holding Company, a Delaware corporation, and any successor thereto.

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(k) “Disability” means the inability of a Participant to perform his duties and responsibilities as an officer or employee of the Company or any of its Subsidiaries on a full-time basis for more than six months within any 12-month period because of a physical, mental or emotional incapacity resulting from injury, sickness or disease.

(1) “Employee” means any officer or other key employee of the Company or any of its Subsidiaries.

(m) “Fair Market Value” means, if no Public offering has occurred, the fair market value of a share of common Stock as determined in accordance with the stockholders’ Agreement. Following a Public Offering, the Fair Market Value, on any date, shall mean the average of the highest and lowest sales price reported for such day on a national exchange or the average of the highest and lowest bid and asked prices on such date as reported on a nationally recognized system of price quotation. In the event that there are no Common Stock transactions reported on such exchange or system on such date, Fair Market Value shall mean the closing price on the immediately preceding date on which Common Stock transactions were so reported.

(n) “Kelso” means Kelso Investment Associates IV, L.P. and Kelso Equity Partners II L.P.

(o) “Option” means the right to purchase Common stock at a stated price for a specified period of time. For purposes of the Plan, an Option may be either (i) an “Incentive Stock Option” within the meaning of Section 422 of the Code or (ii) an Option which is not an Incentive Stock Option (a “Non-Qualified Stock Option”).

(p) “Participant” means any Employee designated by the Committee to receive an Incentive Award under the Plan.

(q) “Plan” means the TransDigm Inc. 1994 Stock Incentive Plan, as set forth herein and as the same may be amended from time to time.

(r) “Public Offering” means the Company’s offering Common Stock to the general public through a registration statement filed with the Securities and

3

Exchange Commission that covers (together with prior effective registrations) not less than 25% of the then outstanding shares of Common Stock on a fully diluted basis.

(s) “Retirement” means termination of a Participant’s employment on or after the date the participant attains age 65 or such earlier date as the Committee may permit, either as to all Participants or as to any Participant.

(t) “Stockholders Agreement” means the Stockholders’ Agreement, dated as of January 25, 1994 among the Company; Kelso Investment Associates IV, L.P.; Kelso Partners IV, L.P.; Kelso Equity Partners II, L.P.; and those employees of TransDigm Inc. listed on Schedule A thereto, as currently in effect and as may be amended from time to time.

(u) “Subsidiary” means any corporation or partnership in which the Company owns, directly or indirectly, 50% or more of the total combined voting power of all classes of stock of such corporation or of the capital interest or profits interest of such partnership.

         2.2. Gender and Number. Except when otherwise indicated by the context, words in the masculine gender used in the Plan shall include the feminine gender, the singular shall include the plural, and the plural shall include the singular.

SECTION 3.

ELIGIBILITY AND PARTICIPATION

         Participants in the Plan shall be those Employees selected by the Committee to participate in the Plan.

SECTION 4.

ELIGIBILITY AND PARTICIPATION

4.1. Power to Grant and Establish Terms of Options. The Committee shall have the authority, subject to the terms of the Plan, to determine the Employees to whom

4

Options shall be granted and the terms and conditions of any and all Options, including but not limited to the number of shares of Common Stock to be covered by each Option, the time or times at which Options shall be granted, and the terms and provisions of the instruments by which Options shall be evidenced and to designate Options as Incentive Stock Options or Non-Qualified Stock Options. The proper officers of the Company may suggest to the Committee the Participants who should receive Options. The terms and conditions of each Option grant shall be determined by the Committee at the time of grant, and such terms and conditions shall not be subsequently changed in a manner which would be adverse to the Participant without the consent of the Participant to whom such Option has been granted. The Committee may establish different terms and conditions for different Participants receiving Options and for the same Participant for each Option such Participant may receive, whether or not granted at different times. The grant of any Option to any Employee shall neither entitle such Employee to, nor disqualify him from, the grant of any other Options.

4.2. Substitute Options. The Committee shall have the right, subject to the consent of Participants to whom Options have been granted, to grant in substitution for outstanding Options, replacement Options which may contain terms more favorable to the Participant than the Options they replace, including, without limitation, a lower exercise price (subject to Section 6.2), and to cancel replaced Options.

4.3. Administration. The Committee shall be responsible for the administration of the Plan. Any Options granted by the Committee may be subject to such conditions, not inconsistent with the terms of the Plan, as the Committee shall determine. The Committee, by majority action thereof, is authorized to prescribe, amend and rescind rules and regulations relating to the Plan, to provide for conditions deemed necessary or advisable to protect the interests of the Company to interpret the Plan and to make all other determinations necessary or advisable for the administration and interpretation of the Plan to carry out its provisions and purposes. Determinations, interpretations or other actions made or taken by the Committee pursuant to the provisions of the Plan shall be final, binding and conclusive for all purposes and upon all

5

persons. The Committee may consult with legal counsel, who may be counsel to the Company, and shall not incur any liability for any action taken in good faith in reliance upon the advice of counsel.

SECTION 5.

STOCK SUBJECT TO PLAN

5.1. Number. Subject to the provisions of Section 5.3, the number of shares of Common Stock subject to options under the Plan may not exceed 37,500 shares of Common Stock. The shares to be delivered under the Plan may consist, in whole or in part, of Common Stock held in treasury or authorized but unissued Common Stock, not reserved for any other purpose.

5.2. Cancelled, Terminated, or Forfeited Awards. Any shares of Common Stock subject to an Option which for any reason expires, or is cancelled, terminated or otherwise settled without the issuance of any Common Stock shall again be available under the Plan.

5.3. Adjustment in Capitalization. The aggregate number of shares of Common Stock available for grants of options under Section 5.1 or subject to outstanding Option grants and the respective prices and/or vesting criteria applicable to outstanding Options shall be proportionately adjusted to reflect, as deemed equitable and appropriate by the Committee, an Adjustment Event: provided that in no event shall any adjustment be made by reason of the exercise of warrants attached to the Senior Subordinated Notes due in the year 2000. To the extent deemed equitable and appropriate by the Committee, subject to any required action by stockholders, in any merger, consolidation, reorganization, liquidation, dissolution, or other similar transaction, any Option granted under the Plan shall pertain to the securities and other property to which a holder of the number of shares of Common Stock covered by the Option would have been entitled to receive in connection with such event.

6

SECTION 6.

STOCK OPTIONS

6.1. Grant of Options. Options may be granted to Participants at such time or times as shall be determined by the Committee. Options granted under the Plan may be of two types: (i) Incentive Stock Options and (ii) Non-Qualified Stock Options, except that no Incentive Stock Option may be granted to any Employee of a Subsidiary which is not a corporation. The date of grant of an Option under the Plan will be the date on which the Option is awarded by the Committee or, if so determined by the Committee, the date on which occurs any event the occurrence of which is an express condition precedent to the grant of the Option. The Committee shall determine the number of Options, if any, to be granted to a Participant. Each Option shall be evidenced by an Option agreement that shall specify the type of Option granted, the exercise price, the duration of the Option, the number of shares of Common Stock to which the Option pertains, and such other terms and conditions not inconsistent with the Plan as the Committee shall determine.

6.2. Option Price. Non-Qualified Stock Options and Incentive Stock Options granted pursuant to the Plan shall have an exercise price which is not less than the Fair Market Value on the date the Option is granted.

6.3. Exercise of Options. Options awarded to a Participant under the Plan shall be exercisable at such times and shall be subject to such restrictions and conditions including the performance of a minimum period of service or the satisfaction of performance goals, as the Committee may impose either at or after the time of grant of such Options, subject to the Committee’s right to accelerate the exercisability of such Option in its discretion. Notwithstanding the foregoing, no Option shall be exercisable for more than 10 years after the date on which it is granted. Except as may be provided in any provision approved by the Committee pursuant to this Section 6.3, after becoming exercisable each installment shall remain exercisable until expiration, termination or cancellation of the Option. An Option may be exercised from time to time, in whole or in part, up to the total number of shares of Common Stock with respect to which it is then exercisable.

7

6.4. Payment. The Committee shall establish procedures governing the exercise of Options, which shall require that written notice of exercise be given and that the Option price be paid in full at the time of exercise (i) in cash or cash equivalents, (ii) in shares of Common Stock which have been owned by the Participant for at least six months’ (or such greater or lesser period as the Committee shall determine) having a Fair Market Value on the date of exercise equal to such Option price or in a combination of cash and Common Stock or (iii) in accordance with such procedures or in such other form as the Committee shall from time to time determine. As soon as practicable after receipt of a written exercise notice and payment of the exercise price in accordance with this Section 6.4, the Company shall deliver to the Participant a certificate or certificates representing the acquired shares of Common stock.

6.5. Incentive Stock Options. Notwithstanding anything in the Plan to the contrary, no term of the Plan relating to Incentive Stock Options shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be so exercised, so as to disqualify the Plan under Section 422 of the Code, or, without the consent of any Participant affected thereby, to cause any Incentive Stock Option previously granted to fail to qualify for the Federal income tax treatment afforded under Section 421 of the Code.

6.6. Buyout. The Committee may at any time offer to buy out for a payment in cash any Option previously granted, based on such terms and conditions as the Committee shall establish and communicate to the optionee at the time such offer is made.

6.7. Settlement. At the time a Participant exercises an Option in lieu of accepting payment of the exercise price of the Option and delivering the number of shares of Common Stock for which the Option is being exercised, the Committee may direct that the Company either (i) pay the Participant a cash amount, or (ii) issue a lesser number of shares of Common Stock having a Fair Market Value on the date of exercise, equal to the amount, if any, by which the aggregate Fair Market Value of the shares of Common Stock as to which the Option is being exercised exceeds the aggregate exercise price for such shares, based on such term and conditions as the Committee shall

8

establish. Without limiting the generality of the foregoing, at any time prior to a Public Offering, the Committee may provide that any such settlement may take into account the length of time that has transpired since the date as of which any prior valuation of the Common Stock was conducted and may determine Fair Market Value in such circumstances based on the weighted average of the value of the common Stock as of more than one date.

6.8. Termination of Employment Due to Retirement. Unless otherwise determined by the Comittee at the time of grant, in the event a Participant’s employment with the Company or a Subsidiary terminates by reason of Retirement, any Options granted to such Participant which are then outstanding (whether or not exercisable prior to the date of such termination) may be exercised at any time prior to one (1) year following the Participant’s termination of employment or the expiration of the term of the Options, whichever period is shorter.

6.9. Termintation of Employment Due to Death or Disability. Unless otherwise determined by the Committee at the time of grant, in the event a Participant’s employment with the Company or a Subsidiary terminates by reason of death or Disability, any Options granted to such Participant which are then outstanding (whether or not exercisable prior to the date of such termination) may be exercised by the Participant or the Participant’s designated beneficiary, and if none is named, in accordance with Section 9.2, at any time prior to one (1) year following the Participant’s termination of employment or the expiration date of the term of the Options, whichever period is shorter. Notwithstanding anything else contained heiein to the contrary, a Participant’s employment may only be terminated due to Disability if such Participant shall not have returned to the full-time performance of his duties, responsibilities and obligations within 30 days after such Participant has received written notice of the intent to terminate his employment.

6.10. Termination of Employment For Cause. Unless otherwise determined by the Committee at the time of grant, in the event a Participant’s employment with the Company or a Subsidiary is teminated for Cause, all Options granted to such Participant which are then outstanding (whether or not exercisable prior to the date of such termination) shall be forfeited.

9

6.11. Termination of Employment for Any Other Reason. Unless otherwise determined by the Committee at or after the of grant, in the event the Participant’s employment with the Company or a Subsidiary terminate for any reason other than one described in Section 6.8, 6.9 or 6.10, any Options granted to such Participant which are exercisable at the date of the Participant’s termination of employment shall be exercisable at any time prior to 60 days following the Participant’s termination of employment or the expiration of the term of such Options, whichever period is shorter.

6.12. Committee Discretion. Notwithstanding anything else contained in this Section 6 to the contrary, the Committee may permit all or any portion of any Options to be exercised following a Participant’s termination of employment for any reason on such terms and subject to such conditions as the Committee shall determine for a period up to and including, but not beyond, the expiration of the term of such Options.

SECTION 7.

CHANGE IN CONTROL

7.1. Accelerated Vesting and Payment. Unless otherwise determined by the Committee at the time of grant, in the event of a Change in Control, each Option shall be cancelled in exchange for a payment in cash of an amount equal to the excess of the Change in Control Price over the exercise price for such Option (except as provided in Section 7.2 below).

7.2. Alternative Awards. Notwithstanding Section 7.1, no cancellation, cash settlement or other payment shall occur with respect to any Option if the Committee reasonably determines in good faith prior to the occurrence of a Change in Control that such Option shall be honored or assumed, or new rights substituted therefor (such honored, assumed or substituted award hereinafter called an “Alternative Award”), by a Participant’s employer (or the parent or a subsidiary of such employer) immediately following the Change in Control, provided that any such Alternative Award must:

(i) provide such Participant (or each Participant in a class of Participants) with rights and

10

entitlements substantially equivalent to or better than the rights, terms and conditions applicable under such Option, including, but not limited to, an identical or better exercise or vesting schedule and identical or better timing and methods of payment;

(ii) have substantially equivalent economic value to such Option (determined at the time of the Change in Control);

(iii) have terms and conditions which provide that in the event that the Participant’s employment is involuntarily terminated or constructively terminated, any conditions on a Participant’s rights under, or any restrictions on transfer or exercisability applicable to, each such Alternative Award shall be waived or shall lapse, as the case may be.

For this purpose, a constructive termination shall mean a termination by a Participant following a material reduction in the Participant’s compensation or a material reduction in the Participant’s responsibilities, in each case without the Participant’s written consent.

SECTION 8.

AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN

The Board may at any time terminate or suspend the Plan, and from time to time may amend or modify the Plan. No action of the Board may, without the consent of a Participant alter or impair his rights under any previously granted Option.

SECTION 9.

MISCELLANEOUS PROVISIONS

9.1. Nontransferability of Awards. Unless the Committee shall permit (on such terms and conditions as it shall establish) an Option to be transferred to a Permitted Transferee (as such term is defined in Section 1.1 of the Stockholders Agreement), no option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. All rights with respect to any

11

option granted to a Participant under the Plan shall be exercisable during his lifetime only by such Participant or, if applicable, a Permitted Transferee.

9.2. Beneficiary Designation. Each Participant under the Plan may from time to time name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid or by whom any right under the Plan is to be exercised in case of his death. Each designation will revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee, and will be effective only when filed by the Participant in writing with the Committee during his lifetime. In the absence of any such designation, benefits remaining unpaid or Options outstanding at the Participant’s death shall be paid to or exercised by the Participant’s surviving spouse, if any, or otherwise to or by his estate.

9.3. No Guarantee of Employment or Participation. Nothing in the Plan shall interfere with or limit in any way the right of the Company or any Subsidiary to terminate any Participant’s employment at any time, nor confer upon any Participant any right to continue in the employ of the Company or any Subsidiary or affiliate. No Employee shall have a right to be selected as a Participant, or, having been so selected, to receive any future Option grants.

9.4. Tax Withholding. The Company shall have the power to withhold, or require a Participant to remit to the Company promptly upon notification of the amount due, an amount sufficient to satisfy Federal, state and local withholding tax requirements on with respect to any Option, and the Company may defer payment of cash or issuance or delivery of Common Stock until such requirements are satisfied.

9.5. Indemnification. Each person who is or shall have been a member of the Committee or of the Board shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him in connection with or resulting from any claim, action, suit, or proceeding to which he may be made a party or in which he may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him in settlement thereof, with the Company’s approval, or paid by him in satisfaction of any judgment in

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any such action, suit, or proceeding against him, provided he shall give the Company an opportunity, at its own expense, to handle and defend the same before he undertakes to handle and defend it on his own behalf. The foregoing right of indemnification shall not be exclusive and shall be independent of any other rights of indemnification to which such persons may be entitled under the Company’s Articles of Incorporation or By-laws, by contract, as a matter of law, or otherwise.

9.6. No Limitation on Compensation. Nothing in the Plan shall be construed to limit the right of the Company to establish other plans or to pay compensation to its employees in cash or property, in a manner which is not expressly authorized under the Plan.

9.7. Requirements of Law. The granting of Options and the issuance of shares of Common Stock shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

9.8. Governing Law. The Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Delaware.

9.9. No Impact On Benefits. Options granted under the Plan are not compensation for purposes of calculating an Employee’s rights under any employee benefit plan.

9.10. Securities Law Compliance. Instruments evidencing the grant of Options may contain such other provisions, not inconsistent with the Plan, as the Committee deems advisable, including a requirement that the Participant represent to the Company in writing, when he receives shares upon exercise of an Option (or at such other time as the Committee deems appropriate) that he is acquiring such shares (unless they are then covered by a Securities Act of 1933 registration statement), for his own account for investment only and with no present intention to transfer, sell or otherwise dispose of such shares except such disposition by a legal representative as shall be required by will or the laws of any jurisdiction in winding up the estate of the Participant. Such shares shall be transferable only if the proposed transfer shall be permissible pursuant to the Plan and if, in the opinion of counsel satisfactory to the Company, such transfer at such time will be in compliance with applicable securities laws.

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9.11. Term of Plan. This Plan shall be effective as of May [        ], 1994, subject to approval by the holders of the Common Stock. This Plan shall expire on May [        ], 2004 (except as to Incentive Awards outstanding on that date), unless sooner terminated pursuant to Section 8 of the Plan.

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EX-10.11

Exhibit 10.11

THE 1998 STOCK OPTION PLAN

OF

TRANSDIGM HOLDING COMPANY

 TransDigm Holding Company, a Delaware corporation (the “Company”), has adopted The 1998 Stock Option Plan of TransDigm Holding Company (the “Plan”), effective as of December 3, 1998, for the benefit of its eligible employees and consultants.

 The purposes of the Plan are as follows:

 (1)    To provide an additional incentive for Employees and Consultants (as such terms are defined below) to further the growth, development and financial success of the Company by personally benefiting through the ownership of Company stock; and

 (2)    To enable the Company to obtain and retain the services of Employees and Consultants considered essential to the long range success of the Company by offering them an opportunity to own stock in the Company.

ARTICLE I.

DEFINITIONS

 Wherever the following terms are used in this Plan, they shall have the meanings specified below unless the context clearly indicates otherwise.

1.1    Award Limit.

 “Award Limit” shall mean six thousand (6,000) shares of Common Stock, as adjusted pursuant to Section 8.3 of the Plan.

1.2    Board.

 “Board” shall mean the Board of Directors of the Company.

1.3    Chief Executive Officer.

 “Chief Executive Officer” shall mean the Chief Executive Officer of the Company.

1.4    Code.

 “Code” shall mean the Internal Revenue Code of 1986, as amended.

1.5    Committee.

 “Committee” shall mean the Compensation Committee of the Board, or the Board or another committee or subcommittee of the Board, appointed as provided in Section 7.1.

1.6    Common Stock.

   “Common Stock” shall mean the common stock of the Company, par value $0.01 per share.

1.7      Company.

   “Company” shall mean TransDigm Holding Company, a Delaware corporation.

1.8      Consultant.

   “Consultant” shall mean any consultant or adviser if:

   (a)    the consultant or adviser renders bona fide services to the Company;

   (b)    the services rendered by the consultant or adviser are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities; and

   (c)    the consultant or adviser is a natural person who has contracted directly with the Company to render such services.

1.9      Director.

   “Director” shall mean a member of the Board.

1.10    DRO.

   “DRO” shall mean a domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules promulgated thereunder.

1.11    Employee.

   “Employee” shall mean any officer or other employee (as defined in accordance with Section 3401(c) of the Code) of the Company, or of any corporation which is a Subsidiary.

1.12    Exchange Act.

   “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

1.13    Fair Market Value.

   “Fair Market Value” of a share of Common Stock as of a given date shall be:

   (a)    the average closing price of a share of Common Stock on the principal exchange on which such shares are then trading, if any (or as reported on any composite index which includes such principal exchange), over the thirty trading days prior to such determination date; or

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   (b)    if Common Stock is not traded on an exchange, the average of the mean each day between the closing representative bid and asked prices for a share of Common Stock over the thirty trading days prior to the determination date as reported by NASDAQ or, if NASDAQ is not then in existence, by its successor quotation system; or

   (c)    if Common Stock is not publicly traded, the fair market value of a share of Common Stock as determined in good faith by the Board (which determination shall take into account the most recent appraisal of fair market value of a share of Common Stock as determined by an independent valuation consultant or appraiser).

1.14    Incentive Stock Option.

   “Incentive Stock Option” shall mean an Option which conforms to the applicable provisions of Section 422 of the Code and which is designated as an Incentive Stock Option by the Committee.

1.15    Independent Director.

   “Independent Director” shall mean a member of the Board who is not an Employee of the Company.

1.16    Initial Public Offering.

   “Initial Public Offering” shall mean the first issuance by the Company of any class of common equity securities that is required to be registered (other than on a Form S-8) under Section 12 of the Exchange Act.

1.17    Non-Qualified Stock Option.

   “Non-Qualified Stock Option” shall mean an Option which is not designated as an Incentive Stock Option by the Committee.

1.18    Option.

   “Option” shall mean a stock Option granted under Article IV of the Plan. An Option granted under the Plan shall, as determined by the Committee, be either a Non-Qualified Stock Option or an Incentive Stock Option; provided, however, that all Options granted to Consultants shall be Non-Qualified Stock Options.

1.19    Optionee.

   “Optionee” shall mean a person who has been granted an Option.

1.20    Plan.

   “Plan” shall mean The 1998 Stock Option Plan of TransDigm Holding Company.

1.21    Principal Stockholder.

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   “Principal Stockholder” shall mean Odyssey Investment Partners Fund, LP. and any of its “Permitted Assignees” as defined in that certain Management Stockholders’ Agreement dated as of December 3, 1998 among the Company, Odyssey Investment Partners Fund, LP, and the stockholder parties thereto, as amended from time to time.

1.22    Roll-Over Option.

   “Roll-Over Option” shall mean an option to purchase Common Stock that was outstanding prior to the effective date of the merger and recapitalization of the Company and that remain outstanding immediately thereafter pursuant to that certain Agreement and Plan of Merger dated August 2, 1998 between TD Acquisition Corp. and the Company, as amended.

1.23    Rule 16b-3.

   “Rule 16b-3” shall mean that certain Rule 16b-3 promulgated under the Exchange Act, as such Rule may be amended from time to time.

1.24    Section 162(m) Participant.

   “Section 162(m) Participant” shall mean any Employee who, after an Initial Public Offering, is designated by the Committee as an Employee whose compensation for the fiscal year in which the Employee is so designated or a future fiscal year may be subject to the limit on deductible compensation imposed by Section 162(m) of the Code.

1.25    Securities Act.

   “Securities Act” shall mean the Securities Act of 1933, as amended.

1.26    Stock Option Agreement.

   “Stock Option Agreement” shall mean a written agreement executed by an authorized officer of the Company and the Optionee which shall contain such terms and conditions with respect to an Option as the Chief Executive Officer and the Committee shall determine, consistent with the Plan.

1.27    Subsidiary.

   “Subsidiary” shall mean any corporation in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain then owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

1.28    Substitute Option.

   “Substitute Option” shall mean an Option granted under this Plan upon the assumption of, or in substitution for, outstanding equity options previously granted by a company or other entity in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock; provided, however, that in no event shall the term “Substitute

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Option” be construed to refer to an Option made in connection with the cancellation and repricing of an Option granted under the Plan. “Substitute Options” shall include all Roll-Over Options.

1.29    Termination of Consultancy.

   “Termination of Consultancy” shall mean the time when the engagement of an Optionee as a Consultant to the Company or a Subsidiary is terminated for any reason, with or without cause, including, but not by way of limitation, by resignation, discharge, death or retirement, but excluding a termination where there is a simultaneous commencement of employment with the Company or any Subsidiary. The Committee, in its sole discretion, shall determine the effect of all matters and questions relating to Termination of Consultancy, including, but not by way of limitation, the question of whether a Termination of Consultancy resulted from a discharge for good cause, and all questions of whether a particular leave of absence constitutes a Termination of Consultancy. Notwithstanding any other provision of the Plan, the Company or any Subsidiary has an absolute and unrestricted right to terminate a Consultant’s service at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in writing.

1.30    Termination of Employment.

   “Termination of Employment” shall mean the time when the employee-employer relationship between an Optionee and the Company or any Subsidiary is terminated for any reason, with or without cause, including, but not by way of limitation, a termination by resignation, discharge, death, disability or retirement, but excluding (a) a termination where there is a simultaneous reemployment or continuing employment of an Optionee by the Company or any Subsidiary, (b) at the discretion of the Committee, a termination which results in a temporary severance of the employee-employer relationship, and (c) at the discretion of the Committee, a termination which is followed by the simultaneous establishment of a consulting relationship between the Company or a Subsidiary and the former employee. The Committee, in its sole discretion, shall determine the effect of all matters and questions relating to Termination of Employment, including, but not by way of limitation, the question of whether a Termination of Employment resulted from a discharge for good cause, and all questions of whether a particular leave of absence constitutes a Termination of Employment; provided, however, that, with respect to Incentive Stock Options, unless otherwise determined by the Committee in its discretion, a leave of absence, change in status from an employee to an independent contractor or other change in the employee-employer relationship shall constitute a Termination of Employment if, and to the extent that, such leave of absence, change in status or other change interrupts employment for the purposes of Section 422(a)(2) of the Code and the then applicable regulations and revenue rulings under said Section.

ARTICLE II.

SHARES SUBJECT TO PLAN

2.1      Shares Subject to Plan.

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(a)    The shares of stock subject to Options shall be shares of the Company’s Common Stock. The aggregate number of such shares which may be issued upon exercise of such Options shall not exceed eighteen thousand nine hundred and ninety (18,990) as adjusted pursuant to Section 8.3. Options to purchase approximately fifteen thousand one hundred fifteen (15,115) shares of Common Stock will be granted contemporaneously with or as soon as practicable following the date of adoption of the Plan by the Board, and the remaining number of shares will be reserved for the grant of Options thereafter to Employees or Consultants hired after such date and/or to other Employees and Consultants as determined by the Chief Executive Officer and the Committee pursuant to Section 4.4, including, without limitation, the grant of Options to an Optionee in order to reflect such Optionee’s increased duties. The shares of Common Stock issuable upon exercise of such Options may be either previously authorized but unissued shares or treasury shares.

(b)    The maximum number of shares which may be subject to Options granted under the Plan to any individual in any calendar year shall not exceed the Award Limit. To the extent required by Section 162(m) of the Code, shares subject to Options which are canceled shall continue to be counted against such limit. Notwithstanding the foregoing, Roll-Over Options shall not be counted against the Award Limit.

2.2    Add-back of Options.

If any Option expires or is canceled without having been fully exercised, or is exercised in whole or in part for cash as permitted by the Plan, the number of shares subject to such Option but as to which such Option was not exercised prior to its expiration, cancellation or exercise may again be granted hereunder, subject to the limitations of Section 2.1. Furthermore, any shares subject to Options which are adjusted pursuant to Section 8.3 and become exercisable with respect to shares of stock of another corporation shall be considered canceled and may again be granted hereunder, subject to the limitations of Section 2.1. Shares of Common Stock which are delivered by the Optionee or withheld by the Company upon the exercise of any Option under the Plan, in payment of the exercise price thereof or tax withholding thereon, may again be granted hereunder, subject to the limitations of Section 2.1. Notwithstanding the provisions of this Section 2.2, no shares of Common Stock may again be optioned if such action would cause an Incentive Stock Option to fail to qualify as an incentive stock Option under Section 422 of the Code.

ARTICLE III.

GENERAL OPTION TERMS

3.1    Stock Option Agreement.

Each Option shall be evidenced by a Stock Option Agreement. Stock Option Agreements evidencing Options intended to qualify as performance-based compensation as described in Section 162(m)(4)(C) of the Code shall contain such terms and conditions as may be necessary to meet the applicable provisions of Section 162(m) of the Code. Stock Option Agreements evidencing Incentive Stock Options shall contain such terms and conditions as may be necessary to meet the applicable provisions of Section 422 of the Code.

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3.2    Provisions Applicable to Section 162(m) Participants.

The Committee, in its discretion, may determine whether an Option is to qualify as performance-based compensation as described in Section 162(m)(4)(C) of the Code.

3.3    Limitations Applicable to Section 16 Persons.

Notwithstanding any other provision of the Plan, the Plan, and any Option granted or awarded to any individual who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, the Plan and Options granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

3.4    Consideration.

In consideration of the granting of an Option under the Plan, the Optionee shall agree, in the Stock Option Agreement or other written agreement, to render faithful and efficient service as directed by the Company and to use his or her best efforts to promote the interests of the Company and its Subsidiaries.

3.5    At-Will Employment.

Nothing in the Plan or in any Stock Option Agreement hereunder shall confer upon any Optionee any right to continue in the employ of, or as a Consultant for, the Company or any Subsidiary, or shall interfere with or restrict in any way the rights of the Company and any Subsidiary, which are hereby expressly reserved, to discharge any Optionee at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written employment agreement between the Optionee and the Company or any Subsidiary.

ARTICLE IV.

GRANTING OF OPTIONS

4.1    Eligibility.

Any Employee or Consultant shall be eligible to be granted an Option.

4.2    Disqualification for Stock Ownership.

No person may be granted an Incentive Stock Option under the Plan if such person, at the time the Incentive Stock Option is granted, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any then existing Subsidiary or parent corporation (within the meaning of Section 422 of the Code) unless such Incentive Stock Option conforms to the applicable provisions of Section 422 of the Code.

4.3    Qualification of Incentive Stock Options.

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No Incentive Stock Option shall be granted to any person who is not an Employee.

4.4    Granting of Options to Employees and Consultants.

(a)    Prior to the occurrence of an Initial Public Offering, the Chief Executive Officer shall from time to time, in his or her discretion and with the approval of the Committee (which approval shall not unreasonably be withheld), and subject to applicable limitations of the Plan :

(i)    Select from among the Employees and Consultants (including Employees and Consultants who have previously received Options under the Plan) such of them as in his or her opinion should be granted Options; and

(ii)    Subject to the Award Limit, determine the number of shares to be subject to such Options granted to the selected Employees and Consultants.

(b)    After the occurrence of an Initial Public Offering, the Committee shall from time to time, in its discretion, and subject to applicable limitations of the Plan:

(i)    Select from among the Employees and Consultants (including Employees and Consultants who have previously received Options under the Plan) such of them as in its opinion should be granted Options; and

(ii)    Subject to the Award Limit, determine the number of shares to be subject to such Options granted to the selected Employees and Consultants.

(c)    Upon the selection of an Employee or Consultant to be granted an Option pursuant to subsection (a) or (b) above, the Committee shall:

(i)    subject to Section 4.3, determine whether such Options are to be Incentive Stock Options or Non-Qualified Stock Options and whether such Options are to qualify as performance-based compensation as described in Section 162(m)(4)(C) of the Code;

(ii)    determine the terms and conditions of such Options, consistent with the Plan; provided, however, that the terms and conditions of Options intended to qualify as performance-based compensation as described in Section 162(m)(4)(C) of the Code shall include, but not be limited to, such terms and conditions as may be necessary to meet the applicable provisions of Section 162(m) of the Code; and

(iii)    instruct the Secretary of the Company to issue the Option.

(d)    Any Incentive Stock Option granted under the Plan may be modified by the Committee, with the consent of the Optionee, to disqualify such Option from treatment as an “incentive stock option” under Section 422 of the Code.

4.5    Options in Lieu of Cash Compensation. Except as expressly provided in a written employment or other agreement between the Company and any Employee or Consultant, Options may be granted under the Plan to Employees and Consultants in lieu of cash bonuses which

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would otherwise be payable to such Employees and Consultants, pursuant to such policies which may be adopted by the Committee from time to time.

ARTICLE V.

TERMS OF OPTIONS

5.1    Option Price. The price per share of the shares subject to each Option shall be set by the Committee; provided, however, that such price shall be no less than the par value of a share of Common Stock, unless otherwise permitted by applicable state law, and:

(a)    in the case of Options intended to qualify as performance-based compensation as described in Section 162(m)(4)(C) of the Code, such price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date the Option is granted;

(b)    in the case of Incentive Stock Options, such price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date the Option is granted (or the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code);

(c)    in the case of Incentive Stock Options granted to an individual then owning (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or any Subsidiary or parent corporation thereof (within the meaning of Section 422 of the Code), such price shall not be less than 110% of the Fair Market Value of a share of Common Stock on the date the Option is granted (or the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code); and

(d)    in the case of an Option that is a Substitute Option, such price may be less than the Fair Market Value per share on the date of grant, provided, that the excess of

(i)    the aggregate Fair Market Value (as of the date such Substitute Option is granted) of the shares subject to the Substitute Option, over

(ii)    the aggregate exercise price thereof;

(e)    does not exceed the excess of

(i) (x)    the value (to be determined by the Board) of the shares of the predecessor entity that were subject to the grant assumed or substituted for by the Company, over

(ii) (y)    the aggregate exercise price of such shares.

5.2    Option Term.

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The term of an Option shall be set by the Committee in its discretion; provided, however, that in the case of Incentive Stock Options, the term shall not be more than ten (10) years from the date the Incentive Stock Option is granted, or five (5) years from the date the Incentive Stock Option is granted if the Incentive Stock Option is granted to an individual then owning (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or any Subsidiary or parent corporation thereof (within the meaning of Section 422 of the Code). Except as limited by requirements of Section 422 of the Code and regulations and rulings thereunder applicable to Incentive Stock Options, the Committee may extend the term of any outstanding Option in connection with any Termination of Employment or Termination of Consultancy of the Optionee, or amend any other term or condition of such Option relating to such a termination.

5.3    Option Vesting.

(a)    The period during which the right to exercise, in whole or in part, an Option vests in the Optionee shall be set by the Committee and the Committee may determine that an Option may not be exercised in whole or in part for a specified period after it is granted; provided, however, that unless the Committee otherwise provides in the terms of the Stock Option Agreement or otherwise, no Option shall be exercisable by any Optionee who is then subject to Section 16 of the Exchange Act within the period ending six months and one day after the date the Option is granted. At any time after grant of an Option, the Committee may, in its sole discretion and subject to whatever terms and conditions it selects, accelerate the period during which an Option vests.

(b)    No portion of an Option which is unexercisable at Termination of Employment or Termination of Consultancy, as applicable, shall thereafter become exercisable, except as may be otherwise provided either in the Stock Option Agreement or by action of the Committee.

(c)    To the extent that the aggregate Fair Market Value of stock with respect to which “Incentive Stock Options” (within the meaning of Section 422 of the Code, but without regard to Section 422(d) of the Code) are exercisable for the first time by an Optionee during any calendar year (under the Plan and all other Incentive Stock Option plans of the Company and any parent or subsidiary corporation (within the meaning of Section 422 of the Code) of the Company) exceeds $100,000, such Options shall be treated as Non-Qualified Options to the extent required by Section 422 of the Code. The rule set forth in the preceding sentence shall be applied by taking Options into account in the order in which they were granted. For purposes of this Section 5.3(c), the Fair Market Value of stock shall be determined as of the time the Option with respect to such stock is granted.

5.4    Terms of Roll-Over Options.

All Roll-Over Options shall be fully exercisable as of December 3, 1998.

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ARTICLE VI.

EXERCISE OF OPTIONS

6.1    Partial Exercise. An exercisable Option may be exercised in whole or in part. However, an Option shall not be exercisable with respect to fractional shares and the Committee may require that, by the terms of the Option, a partial exercise be with respect to a minimum number of shares.

6.2    Manner of Exercise. All or a portion of an exercisable Option shall be deemed exercised upon delivery of all of the following to the Secretary of the Company or his or her office:

(a)    A written notice complying with the applicable rules established by the Committee stating that the Option, or a portion thereof, is exercised. The notice shall be signed by the Optionee or other person then entitled to exercise the Option or such portion of the Option;

(b)    Such representations and documents as the Committee, in its sole discretion, deems necessary or advisable to effect compliance with all applicable provisions of the Securities Act and any other federal or state securities laws or regulations. The Committee may, in its sole discretion, also take whatever additional actions it deems appropriate to effect such compliance including, without limitation, placing legends on share certificates and issuing stop-transfer notices to agents and registrars;

(c)    In the event that the Option shall be exercised pursuant to Section 8.1 by any person or persons other than the Optionee, appropriate proof of the right of such person or persons to exercise the Option; and

(d)    Full cash payment to the Secretary of the Company for the shares with respect to which the Option, or portion thereof, is exercised. However, the Committee, may in its discretion (i) allow a delay in payment of up to thirty (30) days from the date the Option, or portion thereof, is exercised; (ii) allow payment, in whole or in part, through the delivery of shares of Common Stock which have been owned by the Optionee for at least six months, duly endorsed for transfer to the Company with a Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof; (iii) allow payment, in whole or in part, through the surrender of shares of Common Stock then issuable upon exercise of the Option having a Fair Market Value on the date of Option exercise equal to the aggregate exercise price of the Option or exercised portion thereof; (iv) allow payment, in whole or in part, through the delivery of property of any kind which constitutes good and valuable consideration; (v) allow payment, in whole or in part, through the delivery of a full recourse promissory note bearing interest (at no less than such rate as shall then preclude the imputation of interest under the Code) and payable upon such terms as may be prescribed by the Committee or the Board; (vi) allow payment, in whole or in part, through the delivery of a notice that the Optionee has placed a market sell order with a broker with respect to shares of Common Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price, provided that payment of such proceeds is then made to the Company upon settlement of such sale; or (vii) allow payment through any combination of the consideration provided in the foregoing

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subparagraphs (ii), (iii), (iv), (v) and (vi). In the case of a promissory note, the Committee may also prescribe the form of such note and the security to be given for such note. The Option may not be exercised, however, by delivery of a promissory note or by a loan from the Company when or where such loan or other extension of credit is prohibited by law.

6.3    Conditions to Issuance of Stock Certificates. The Company shall not be required to issue or deliver any certificate or certificates for shares of stock purchased upon the exercise of any Option or portion thereof prior to fulfillment of all of the following conditions:

(a)    The admission of such shares to listing on all stock exchanges on which such class of stock is then listed;

(b)    The completion of any registration or other qualification of such shares under any state or federal law, or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body which the Committee shall, in its sole discretion, deem necessary or advisable;

(c)    The obtaining of any approval or other clearance from any state or federal governmental agency which the Committee shall, in its sole discretion, determine to be necessary or advisable;

(d)    The lapse of such reasonable period of time following the exercise of the Option as the Committee may establish from time to time for reasons of administrative convenience; and

(e)    The receipt by the Company of full payment for such shares, including payment of any applicable withholding tax, which in the discretion of the Committee may be in the form of consideration used by the Optionee to pay for such shares under Section 6.2(d).

6.4    Rights as Stockholders. Optionees shall not be, nor have any of the rights or privileges of, stockholders of the Company in respect of any shares purchasable upon the exercise of any part of an Option unless and until certificates representing such shares have been issued by the Company to such Optionees.

6.5    Ownership and Transfer Restrictions. The Committee, in its sole discretion, may impose such restrictions on the ownership and transferability of the shares purchasable upon the exercise of an Option as it deems appropriate. Any such restriction shall be set forth in the respective Stock Option Agreement or other written agreement between the Company and the Optionee and may be referred to on the certificates evidencing such shares. The Optionee shall give the Company prompt notice of any disposition of shares of Common Stock acquired by exercise of an Incentive Stock Option within (a) two years from the date of granting (including the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code) such Option to such Optionee or (b) one year after the transfer of such shares to such Optionee.

6.6    Additional Limitations on Exercise of Options. Optionees may be required to comply with any timing or other restrictions with respect to the settlement or exercise of an Option, including a window-period limitation after an Initial Public Offering, as may be imposed in the good faith discretion of the Committee.

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ARTICLE VII.

ADMINISTRATION

7.1    Compensation Committee.

Prior to an Initial Public Offering, the Compensation Committee (whose members shall initially include Stephen Berger, as Chairman, Muzzafar Mirza and William Hopkins) shall administer the Plan. Following such Initial Public Offering, if any, the full Board shall administer the Plan unless and until there is appointed a Compensation Committee (or another committee or a subcommittee of the Board assuming the functions of the Committee under the Plan) that shall consist solely of two or more Independent Directors appointed by and holding office at the pleasure of the Board, each of whom is both a “non-employee director” as defined by Rule 16b-3 and an “outside director” for purposes of Section 162(m) of the Code. Appointment of Committee members shall be effective upon acceptance of appointment. Committee members may resign at any time by delivering written notice to the Board. Vacancies in the Committee may be filled by the Board in its sole discretion.

7.2    Duties and Powers of Committee.

It shall be the duty of the Committee to conduct the general administration of the Plan in accordance with its provisions. The Committee shall have the power to interpret the Plan and the Stock Option Agreements, and to adopt such rules for the administration, interpretation, and application of the Plan as are consistent therewith, to interpret, amend or revoke any such rules and to amend any Stock Option Agreement provided that the rights or obligations of the Optionee of the Option that is the subject of any such Stock Option Agreement are not affected adversely. Any such grant under the Plan need not be the same with respect to each Optionee. Any such interpretations and rules with respect to Incentive Stock Options shall be consistent with the provisions of Section 422 of the Code. In its sole discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan except with respect to matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations or rules issued thereunder, are required to be determined in the sole discretion of the Committee.

7.3    Majority Rule; Unanimous Written Consent.

The Committee shall act by a majority of its members in attendance at a meeting at which a quorum is present or by a memorandum or other written instrument signed by all members of the Committee.

7.4    Compensation; Professional Assistance; Good Faith Actions.

Members of the Committee shall receive such compensation, if any, for their services as members as may be determined by the Board. All expenses and liabilities which members of the Committee incur in connection with the administration of the Plan shall be borne by the Company. The Committee may, with the approval of the Board, employ attorneys, consultants, accountants, appraisers, brokers, or other persons. The Committee, the Company and the Company’s officers and Directors shall be entitled to rely upon the advice, opinions or valuations

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of any such persons. All actions taken and all interpretations and determinations made by the Committee or the Board in good faith shall be final and binding upon all Optionees, the Company and all other interested persons. No members of the Committee or Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or Options, and all members of the Committee and the Board shall be fully protected by the Company in respect of any such action, determination or interpretation. The Company shall indemnify the members of the Committee and the Board to the fullest extent permitted by Delaware law in connection with their performance of duties under the Plan.

7.5    Delegation of Authority to Grant Options.

The Committee may, but need not, delegate from time to time some or all of its authority to grant Options under the Plan to a committee consisting of one or more members of the Committee or of one or more officers of the Company; provided, however, that the Committee may not delegate its authority to grant Options to individuals (i) who are subject on the date of the grant to the reporting rules promulgated under Section 16(a) of the Exchange Act, (ii) who are Section 162(m) Participants or (iii) who are officers of the Company who are delegated authority by the Committee hereunder. Any delegation hereunder shall be subject to the restrictions and limits that the Committee specifies at the time of such delegation of authority and may be rescinded at any time by the Committee. At all times, any committee appointed under this Section 7.5 shall serve in such capacity at the pleasure of the Committee.

ARTICLE VIII.

MISCELLANEOUS PROVISIONS

8.1    Not Transferable.

No Option under the Plan may be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, subject to the consent of the Committee, pursuant to a DRO, unless and until such Option has been exercised, or the shares underlying such Option have been issued, and all restrictions applicable to such shares have lapsed. No Option or interest or right therein shall be liable for the debts, contracts or engagements of the Optionee or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.

During the lifetime of the Optionee, only he or she may exercise an Option (or any portion thereof) granted to him or her under the Plan, unless it has been disposed of pursuant to a DRO. After the death of the Optionee, any exercisable portion of an Option may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Stock Option Agreement, be exercised by his or her personal representative or by any person empowered to do so under the deceased Optionee’s will or under the then applicable laws of descent and distribution.

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8.2    Amendment, Suspension or Termination of the Plan.

Except as otherwise provided in this Section 8.2, the Plan may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Board or the Committee. However, without approval of the Company’s stockholders given within twelve months before or after the action by the Board or the Committee, no action of the Board or the Committee may, except as provided in Section 8.3, increase the limits imposed in Section 2.1 on the maximum number of shares which may be issued under the Plan. No amendment, suspension or termination of the Plan shall, without the consent of the Optionee, alter or impair any rights or obligations under any Option theretofore granted, unless the Option itself otherwise expressly so provides. No Options may be granted during any period of suspension or after termination of the Plan, and in no event may any Incentive Stock Option be granted under the Plan after the first to occur of the following events:

(a) The expiration of ten years from the date the Plan is adopted by the Board; or

(b) The expiration of ten years from the date the Plan is approved by the Company’s stockholders under Section 8.4.

8.3    Changes in Common Stock or Assets of the Company, Acquisition or Liquidation of the Company, Change in Control and Other Corporate Events.

(a)    Subject to Section 8.3(d), in the event that the Committee determines that any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), recapitalization, reclassification, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or exchange of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, or other similar corporate transaction or event, in the Committee’s sole discretion, affects the Common Stock such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Option, then the Committee shall, in such manner as it may deem equitable, adjust any or all of:

(i)    the number and kind of shares of Common Stock (or other securities or property) with respect to which Options may be granted or awarded (including, but not limited to, adjustments of the limitations in Section 2.1 on the maximum number and kind of shares which may be issued and adjustments of the Award Limit),

(ii)    the number and kind of shares of Common Stock (or other securities or property) subject to outstanding Options,

(iii)    the exercise price with respect to any Option, and

(iv)    the financial or other “targets” specified in each Stock Option Agreement for determining the exercisability of Options.

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(b)    Subject to Sections 8.3(b)(vi) and 8.3(d), in the event of any transaction or event described in Section 8.3(a) or any unusual or nonrecurring transactions or events affecting the Company, any affiliate of the Company, or the financial statements of the Company or any affiliate, or of changes in applicable laws, regulations, or accounting principles, the Committee, in its sole and absolute discretion, and on such terms and conditions as it deems appropriate, either by the terms of the Stock Option Agreement or by action taken prior to the occurrence of such transaction or event and either automatically or upon the Optionee’s request, is hereby authorized to take any one or more of the following actions whenever the Committee determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any Option under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles:

(i)    To provide that on or following the effective time of such event the Option shall be exercisable only for (A) the aggregate consideration (whether in the form of cash or otherwise) into which shares of Common Stock issuable upon the exercise of such Option would have been converted (or for which such shares would have been exercisable) if such Option had been exercised immediately prior to the event, or (B) the amount of cash equal to the value of the consideration described in (A);

(ii)    To provide that the Option cannot vest or be exercised after such event;

(iii)    To provide that such Option shall be exercisable as to all shares covered thereby, notwithstanding anything to the contrary in Section 5.3 or 5.4 or the provisions of such Option;

(iv)    To provide that such Option be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices;

(v)    To make adjustments in the number and type of shares of Common Stock (or other securities or property) subject to outstanding Options and/or in the terms and conditions of (including the exercise price), and the criteria included in, outstanding Options and options, rights and awards which may be granted in the future; and

(vi)    In the event of any transaction described in Section 8.3(a), each outstanding Option shall, immediately prior to the effective date of such transaction, automatically become fully exercisable for all of the shares of Common Stock at the time subject to such rights, and may be exercised for any or all of those shares. However, an outstanding Option shall not so accelerate if and to the extent: (i) such Option is, in connection with such transaction, either to be assumed by the successor or survivor corporation (or parent thereof) or to be replaced with a comparable right with respect to shares of the capital stock of the successor or survivor corporation (or parent thereof) or (ii) the acceleration of exercisability of such Option is subject to other limitations imposed by the Committee at the time of grant. The determination of comparability of

16

rights under clause (i) above shall be made by the Committee, and its determination shall be final, binding and conclusive.

(c)    Subject to Sections 8.3(d), 3.2 and 3.3, the Committee may, in its discretion, include such further provisions and limitations in any Stock Option Agreement, as it may deem equitable and in the best interests of the Company.

(d)

(i)    Except as provided in subsection (e), no provision of this Section 8.3 shall permit the Committee to delay the time as of which an Option becomes exercisable pursuant to the terms of the applicable Stock Option Agreement.

(ii)    With respect to Options which are granted to Section 162(m) Participants and are intended to qualify as performance-based compensation under Section 162(m)(4)(C), no adjustment or action described in this Section 8.3 or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause such Option to fail to so qualify under Section 162(m)(4)(C), or any successor provisions thereto. No adjustment or action described in this Section 8.3 or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause the Plan to violate Section 422(b)(1) of the Code. Furthermore, no such adjustment or action shall be authorized to the extent such adjustment or action would result in short-swing profits liability under Section 16 or violate the exemptive conditions of Rule 16b-3 unless the Committee determines that the Option is not to comply with such exemptive conditions. The number of shares of Common Stock subject to any Option shall always be rounded to the next whole number.

(e)    Notwithstanding the foregoing, in the event that the Company becomes a party to a transaction that is intended to qualify for “pooling of interests” accounting treatment and, but for one or more of the provisions of this Plan or any Option Agreement would so qualify, then this Plan and any Option Agreement shall be interpreted so as to preserve such accounting treatment, and to the extent that any provision of the Plan or any Option Agreement would disqualify the transaction from pooling of interests accounting treatment (including, if applicable, an entire Option Agreement), then such provision shall be null and void. All determinations to be made in connection with the preceding sentence shall be made by the independent accounting firm whose opinion with respect to “pooling of interests” treatment is required as a condition to the Company’s consummation of such transaction.

(f)    The existence of the Plan, the Option Agreement and the Options granted hereunder shall not affect or restrict in any way the right or power of the Company or the shareholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the company, or any sale or transfer of all or

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any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

8.4 Approval of Plan by Stockholders.

The Plan has been approved by the Company’s stockholders as of the date of the Board’s initial adoption of the Plan.

8.5 Tax Withholding.

The Company shall be entitled to require payment in cash or deduction from other compensation payable to each Optionee of any sums required by federal, state or local tax law to be withheld with respect to the issuance, vesting, exercise or payment of any Option. The Committee may in its discretion and in satisfaction of the foregoing requirement allow such Optionee to elect to have the Company withhold shares of Common Stock otherwise issuable under such Option (or allow the return of shares of Common Stock) having a Fair Market Value equal to the sums required to be withheld.

8.6 Loans.

The Committee may, in its discretion, extend one or more loans to Optionees in connection with the exercise of an Option granted under the Plan. The terms and conditions of any such loan shall be set by the Committee.

8.7 Effect of Plan Upon Options and Compensation Plans.

The adoption of the Plan shall not affect any other compensation or incentive plans in effect for the Company or any Subsidiary. Nothing in the Plan shall be construed to limit the right of the Company (a) to establish any other forms of incentives or compensation for Employees or Consultants of the Company or any Subsidiary or (b) to grant or assume options otherwise than under the Plan in connection with any proper corporate purpose including but not by way of limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, partnership, limited liability company, firm or association.

8.8 Compliance with Laws.

The Plan, the granting and vesting of Options under the Plan and the issuance and delivery of shares of Common Stock and the payment of money under the Plan or under Options granted hereunder are subject to compliance with all applicable federal and state laws, rules and regulations (including but not limited to state and federal securities law and federal margin requirements) and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Any securities delivered under the Plan shall be subject to such restrictions, and the person acquiring such securities shall, if requested by the Company, provide such assurances and representations to the Company as the Company may deem necessary or desirable to assure compliance with all applicable legal requirements. To the extent permitted by applicable law, the

18

Plan and Options granted hereunder shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

8.9 Titles.

Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of the Plan.

8.10 Governing Law.

The Plan and any agreements hereunder shall be administered, interpreted and enforced under the internal laws of the State of Delaware without regard to conflicts of laws principles thereof.

* * *

The foregoing Plan was adopted on April 22, 1999, effective as of December 3, 1998.

Executed on this      day of                     , 1999.

Douglas W. Peacock,

Chief Executive Officer

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EX-10.12

Exhibit 10.12

1999 STOCK PURCHASE PLAN

OF

TRANSDIGM HOLDING COMPANY

1.      Purpose of Plan

The 1999 Stock Purchase Plan of TransDigm Holding Company and Subsidiaries (the “Plan”) is designed:

(a)    to promote the long term financial interests and growth of TransDigm Holding Company (the “Company”) and its Subsidiaries by attracting and retaining management and personnel with the training, experience and ability to enable them to make a substantial contribution to the success of the Company’s business;

(b)    to motivate personnel by means of growth-related incentives to achieve long range goals; and

(c)    to further the identity of interests of participants with those of the stockholders of the Company through opportunities for stock ownership in the Company.

2.      Definitions

As used in the Plan, the following words shall have the following meanings:

(a)    “Board of Directors” means the Board of Directors of the Company.

(b)    “Committee” means the Compensation Committee of the Board or another committee of the Board designated by the Board to administer the Plan.

(c)    “Common Stock” means the voting common stock of the Company, $0.01 par value per share.

(d)    “Employee” means a person, including an officer, in the regular full-time employment of the Company or one of its Subsidiaries.

(e)    “Fair Market Value” of a share of Common Stock as of a given date shall mean:

(i)    the average of the closing price of a share of Common Stock on the principal exchange on which such shares are then trading, if any (or as reported on any composite index which includes such principal exchange), over the thirty trading days prior to such determination date; or

(ii)   if Common Stock is not traded on an exchange, the average of the mean each day between the closing representative bid and asked prices for a share of Common Stock over the thirty trading days prior to

the determination date as reported by NASDAQ or, if NASDAQ is not then in existence, by its successor quotation system; or

(iii)    if Common Stock is not publicly traded, the fair market value of a share of Common Stock as determined in good faith by the Board.

(f)    “Grant” means an award of Purchase Stock to a Participant pursuant to the Plan.

(g)    “Participant” means an Employee, consultant, or other person having a unique relationship with the Company or one of its Subsidiaries, to whom one or more Grants have been made and such Grants have not all been forfeited or terminated under the Plan.

(h)    “Purchase Stock” means shares of Common Stock with restrictions or conditions on the Participant’s right to transfer or sell such stock, offered to a Participant at such price as determined by the Committee; provided, however, that the price of such Purchase Stock may not be less than 50% of the Fair Market Value of the Common Stock on the date such Purchase Stock is offered.

(i)    “Stockholders’ Agreement” shall mean the Management Stockholders’ Agreement, dated as of December 3, 1998, by and among TransDigm Holding Company, Odyssey Investment Partners Fund, LP, and certain employees of TransDigm Inc. listed on Schedule A thereto, as amended from time to time.

(j)    “Subscription Agreement” means an agreement between the Company and a Participant that sets forth certain terms, conditions and limitations applicable to a Grant.

(k)    “Subsidiary” mean any corporation in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain then owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

3.      Administration of Plan

(a)    The Plan shall be administered by the Committee. The Committee may adopt its own rules of procedure, and the action of a majority of the Committee, taken at a meeting or taken without a meeting by a writing signed by such majority, shall constitute action by the Committee. The Committee shall have the power, authority and the discretion to administer, construe and interpret the Plan and Subscription Agreements, to make rules for carrying out the Plan and to make changes in such rules. Any such interpretations, rules, and administration shall be made and done in good faith and consistent with the basic purposes of the Plan.

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(b)    The Committee may delegate to the Chief Executive Officer and to other senior officers of the Company its duties under the Plan subject to such conditions and limitations as the Committee shall prescribe.

(c)    The Committee may employ attorneys, consultants, accountants, appraisers, brokers or other persons. The Committee, the Company, and the officers and directors of the Company shall be entitled to rely upon the advice, opinions or valuations of any such persons. Subject to the terms and conditions of this Plan and any applicable Subscription Agreement, all actions taken and all interpretations and determinations made by the Committee in good faith shall be final and binding upon all Participants, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the Grants, and all members of the Committee shall be fully protected by the Company with respect to any such action, determination or interpretation.

4.      Eligibility

The Committee may from time to time make Grants under the Plan to such Employees, consultants, or other persons having a unique relationship with the Company or any of its Subsidiaries, and in such form and having such terms, conditions and limitations as the Committee may determine. Grants may be granted singly, in combination or in tandem. The terms, conditions and limitations of each Grant under the Plan shall be set forth in a Subscription Agreement, in a form approved by the Committee, consistent, however, with the terms of the Plan. All Grants shall be subject to the Stockholders’ Agreement and it shall be a condition of any Grant that the Participant execute and become a party to the Stockholders’ Agreement.

5.      Limitations and Conditions

(a)    The number of shares of Common Stock available for Grants under this Plan shall be 671 shares of the authorized Common Stock as of the effective date of the Plan. Unless restricted by applicable law, shares of Common Stock related to Grants that are forfeited, terminated, canceled or expire unexercised, shall immediately become available for Grants.

(b)    No Grants shall be made under the Plan beyond five years after the effective date of the Plan, but the terms of Grants made on or before the expiration thereof may extend beyond such expiration. At the time a Grant is made or amended or the terms or conditions of a Grant are changed, the Committee may provide for limitations or conditions on such Grant.

(c)    Nothing contained herein shall affect the right of the Company or any Subsidiary to terminate any Participant’s employment at any time or for any reason.

(d)    Other than as specifically provided by will or by the applicable laws of descent and distribution or the terms of any applicable trust, no benefit under the Plan

3

shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to do so shall be void. No such benefit shall, prior to receipt thereof by the Participant, be in any manner liable for or subject to the debts, contracts, liabilities, engagements, or torts of the Participant.

(e)    Participants shall not be, and shall not have any of the rights or privileges of, stockholders of the Company in respect of any Purchase Stock purchasable or otherwise acquired in connection with any Grant unless and until certificates representing any such Purchase Stock have been issued by the Company to such Participants; provided, however, that no delay in the issuance of certificates due to be issued hereunder representing any such Purchase Stock shall operate to impair or prejudice any Participant’s rights to participate in a corporate transaction providing for the disposition of such Purchase Stock.

(f)    Absent express provisions to the contrary, no Grant under this Plan shall be deemed “compensation” for purposes of computing benefits or contributions under any retirement plan of the Company or its Subsidiaries and shall not affect any benefits under any other benefit plan of any kind now or subsequently in effect under which the availability or amount of benefits is related to level of compensation. This Plan is not a “pension plan” or “welfare plan” under the Employee Retirement Income Security Act of 1974, as amended.

(g)    Unless the Committee determines otherwise, no benefit or promise under the Plan shall be secured by any specific assets of the Company or any of its Subsidiaries, nor shall any assets of the Company or any of its Subsidiaries be designated as attributable or allocated to the satisfaction of the Company’s obligations under the Plan.

6.      Adjustments

In the event of any change in the outstanding Common Stock (including an exchange for cash) by reason of a stock split, reverse stock split, spin-off, stock dividend, stock combination or reclassification, recapitalization, reorganization, consolidation, merger, change of control, or similar event, the Committee may adjust appropriately the number and kind of shares subject to the Plan and available for or covered by Grants, and prices related to outstanding Grants, and make such other revisions to outstanding Grants as it deems are equitably required.

7.      Amendment and Termination

The Committee shall have the authority to make such amendments to any terms and conditions applicable to outstanding Grants as are consistent with this Plan provided that, except for adjustments under Paragraph 6 hereof, no such action shall modify such Grant in a manner adverse to the Participant without the Participant’s consent except as such modification is provided for or contemplated in the terms of the Subscription Agreement and Stockholders’ Agreement. The Board may amend, suspend or terminate the Plan at any time.

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8.      Withholding Taxes

The Company shall have the right to deduct from any cash payment made under the Plan any federal, state or local income or other taxes required by law to be withheld with respect to such payment. It shall be a condition to the obligation of the Company to deliver Purchase Stock that the Participant pay to the Company such amount as may be requested by the Company for the purpose of satisfying any liability for such withholding taxes.

9.      Effective Date and Termination Dates

The Plan shall be effective on and as of the date of its adoption by the Board and shall terminate five years later, subject to earlier termination by the Board of Directors pursuant to Paragraph 7.

* * * * * * * * * *

I hereby certify that the foregoing Plan was duly adopted by the Board of Directors of TransDigm Holding Company on                              , 1999.

Executed on this              day of                     , 1999.

                                                         Secretary

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EX-12.1

EXHIBIT 12.1

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(Dollars in Thousands)

	1998		1999			2000		2001		2002
Earnings:
Total earnings (loss)	$	14,137	$	(16,917	)	$	10,779	$	14,358	$	30,629
Income tax provision (credit)		12,986		(2,772	)		7,972		9,386		16,804
Pre-tax earnings (loss)		27,123		(19,689	)		18,751		23,744		47,433
Fixed charges:
Interest charges		3,175		22,722			28,563		31,926		36,538
Interest factor of operating rents		197		227			323		365		419
Total fixed charges		3,372		22,949			28,886		32,291		36,957
Earnings as adjusted	$	30,495	$	3,260		$	47,637	$	56,035	$	84,390
Ratio of earnings to fixed charges (1)		9.0		0.1			1.6		1.7		2.3

(1) In fiscal 1999, earnings were insufficient to cover fixed charges by $20.

i

EX-12.2

EXHIBIT 12.2

RATIO OF EBITDA (AS DEFINED) TO INTEREST EXPENSE

(Dollars in Thousands)

	1998		1999		2000		2001		2002
EBITDA (as defined)	$	43,547	$	50,562	$	54,011	$	70,955	$	97,463
Interest expense, net		3,175		22,722		28,563		31,926		36,538
Ratio		13.7		2.2		1.9		2.2		2.7

ii

EX-12.3

EXHIBIT 12.3

RATIO OF EBITDA (AS DEFINED) TO INTEREST EXPENSE (AS DEFINED)

(Dollars in Thousands)

	1998		1999		2000		2001		2002
EBITDA (as defined)	$	43,547	$	50,562	$	54,011	$	70,955	$	97,463
Interest expense (as defined)		3,175		20,697		25,893		28,938		32,833
Ratio		13.7		2.4		2.1		2.4		3.0

iii

EX-12.4

EXHIBIT 12.4

RATIO OF TOTAL DEBT TO EBITDA (AS DEFINED)

(Dollars in Thousands)

	1998		1999		2000		2001		2002
Total debt	$	45,000	$	266,557	$	261,601	$	413,209	$	408,952
EBITDA (as defined)		43,547		50,562		54,011		70,955		97,463
Ratio		1.0		5.3		4.8		5.8		4.2

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EX-21.1

EXHIBIT 21.1

SUBSIDIARIES OF

TRANSDIGM HOLDING COMPANY

TransDigm Inc. is a wholly-owned subsidiary of TransDigm Holding Company. TransDigm Inc. wholly-owns the following subsidiaries:

Name of subsidiary	State or jurisdiction of Incorporation or Organization
Marathon Power Technologies Company	Delaware
ZMP, Inc.	California
Adams Rite Aerospace, Inc.	California
Champion Aerospace, Inc.	Delaware
Christie Electric Corp.	California
Marathon Power Technologies Limited	England

v