As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 2/19/14  Spirit AeroSystems Holdings, Inc. 10-K       12/31/13  136:38M                                    Toppan Merrill-FA

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                       HTML   2.24M 
 2: EX-10.17    Material Contract                                   HTML   3.90M 
 3: EX-10.31    Material Contract                                   HTML    172K 
 4: EX-10.40    Material Contract                                   HTML    109K 
 5: EX-10.41    Material Contract                                   HTML     43K 
 6: EX-10.42    Material Contract                                   HTML     37K 
 8: EX-21.1     Subsidiaries List                                   HTML     32K 
 9: EX-23.1     Consent of Experts or Counsel                       HTML     34K 
 7: EX-12.1     Statement re: Computation of Ratios                 HTML     62K 
10: EX-31.1     Certification -- §302 - SOA'02                      HTML     40K 
11: EX-31.2     Certification -- §302 - SOA'02                      HTML     39K 
12: EX-32.1     Certification -- §906 - SOA'02                      HTML     34K 
13: EX-32.2     Certification -- §906 - SOA'02                      HTML     34K 
93: R1          Document and Entity Information                     HTML     64K 
71: R2          Consolidated Statements of Operations               HTML     95K 
88: R3          Consolidated Statements of Comprehensive Income     HTML     70K 
97: R4          Consolidated Statements of Comprehensive Income     HTML     46K 
                (Parenthetical)                                                  
124: R5          Consolidated Balance Sheets                         HTML    149K  
75: R6          Consolidated Balance Sheets (Parenthetical)         HTML     50K 
87: R7          Consolidated Statements of Changes in Shareholders  HTML     78K 
                Equity                                                           
65: R8          Consolidated Statements of Cash Flows               HTML    166K 
54: R9          Nature of Business                                  HTML     43K 
126: R10         Summary of Significant Accounting Policies          HTML    101K  
99: R11         Changes in Estimates                                HTML     62K 
98: R12         Impact from Severe Weather Event                    HTML     40K 
106: R13         Accounts Receivable, net                            HTML     52K  
107: R14         Inventory                                           HTML    219K  
103: R15         Property, Plant and Equipment, net                  HTML     56K  
108: R16         Other Assets                                        HTML     78K  
89: R17         Research and Development Milestones                 HTML     36K 
94: R18         Advance Payments and Deferred Revenue/Credits       HTML     49K 
101: R19         Government Grants                                   HTML     52K  
135: R20         Fair Value Measurements                             HTML    100K  
117: R21         Derivative and Hedging Activities                   HTML     95K  
81: R22         Investments                                         HTML     68K 
100: R23         Debt                                                HTML     87K  
84: R24         Pension and Other Post-Retirement Benefits          HTML    468K 
42: R25         Capital Stock                                       HTML     36K 
118: R26         Stock Compensation                                  HTML    189K  
131: R27         Income Taxes                                        HTML    188K  
59: R28         Equity                                              HTML    104K 
58: R29         Related Party Transactions                          HTML     44K 
63: R30         Commitments, Contingencies and Guarantees           HTML    106K 
64: R31         Other Income (Expense), Net                         HTML     48K 
66: R32         Significant Concentration of Risk                   HTML     41K 
30: R33         Supplemental Balance Sheet Information              HTML     59K 
115: R34         Segment Information                                 HTML    150K  
79: R35         Quarterly Financial Data (Unaudited)                HTML     90K 
82: R36         Condensed Consolidating Financial Information       HTML    788K 
48: R37         Subsequent Events                                   HTML     35K 
134: R38         Schedule II - Valuation and Qualifying Accounts     HTML     75K  
20: R39         Summary of Significant Accounting Policies          HTML    121K 
                (Policies)                                                       
68: R40         Summary of Significant Accounting Policies          HTML     50K 
                (Tables)                                                         
122: R41         Accounts Receivable, net (Tables)                   HTML     45K  
44: R42         Inventory (Tables)                                  HTML    223K 
57: R43         Property, Plant and Equipment, net (Tables)         HTML     50K 
62: R44         Other Assets (Tables)                               HTML     80K 
72: R45         Advance Payments and Deferred Revenue/Credits       HTML     46K 
                (Tables)                                                         
29: R46         Government Grants (Tables)                          HTML     52K 
53: R47         Fair Value Measurements (Tables)                    HTML     93K 
23: R48         Derivative and Hedging Activities (Tables)          HTML     77K 
120: R49         Investments (Tables)                                HTML     63K  
43: R50         Debt (Tables)                                       HTML     50K 
116: R51         Pension and Other Post-Retirement Benefits          HTML    469K  
                (Tables)                                                         
49: R52         Stock Compensation (Tables)                         HTML    159K 
69: R53         Income Taxes (Tables)                               HTML    164K 
22: R54         Equity (Tables)                                     HTML     95K 
26: R55         Commitments, Contingencies and Guarantees (Tables)  HTML     84K 
61: R56         Other Income (Expense), Net (Tables)                HTML     46K 
34: R57         Supplemental Balance Sheet Information (Tables)     HTML     58K 
127: R58         Segment Information (Tables)                        HTML    142K  
77: R59         Quarterly Financial Data (Unaudited) (Tables)       HTML     89K 
104: R60         Condensed Consolidating Financial Information       HTML    782K  
                (Tables)                                                         
52: R61         Schedule II - Valuation and Qualifying Accounts     HTML     35K 
                (Tables)                                                         
55: R62         Nature of Business (Details)                        HTML     35K 
113: R63         Summary of Significant Accounting Policies          HTML     95K  
                (Details)                                                        
109: R64         Changes in Estimates (Details)                      HTML     65K  
80: R65         Impact from Severe Weather Event (Details)          HTML     44K 
111: R66         Accounts Receivable, net (Details)                  HTML     54K  
50: R67         Inventory (Details)                                 HTML     58K 
85: R68         Inventory (Details 1)                               HTML     80K 
130: R69         Inventory (Details 2)                               HTML     39K  
25: R70         Inventory (Details 3)                               HTML     40K 
41: R71         Inventory (Details 4)                               HTML     43K 
70: R72         Property, Plant and Equipment, net (Details)        HTML     55K 
32: R73         Property, Plant and Equipment, net (Details         HTML     41K 
                Textual)                                                         
133: R74         Other Assets (Details)                              HTML     72K  
45: R75         Other Assets (Details Textuals)                     HTML     36K 
36: R76         Other Assets (Details 1)                            HTML     44K 
40: R77         Research and Development Milestones (Details)       HTML     37K 
27: R78         Advance Payments and Deferred Revenue/Credits       HTML     44K 
                (Details)                                                        
31: R79         Government Grants (Details)                         HTML     38K 
95: R80         Government Grants (Details 1)                       HTML     39K 
38: R81         Government Grants (Details Textuals)                HTML     36K 
128: R82         Fair Value Measurements (Details)                   HTML     58K  
67: R83         Derivative and Hedging Activities (Details)         HTML     42K 
102: R84         Derivative and Hedging Activities (Details 1)       HTML     39K  
110: R85         Derivative and Hedging Activities (Details 2)       HTML     43K  
37: R86         Derivative and Hedging Activities (Details          HTML     45K 
                Textual)                                                         
39: R87         Investments (Details)                               HTML     84K 
125: R88         Debt (Details)                                      HTML     64K  
33: R89         Debt (Details Textual)                              HTML    167K 
96: R90         Pension and Other Post Retirement Benefits          HTML    158K 
                (Details)                                                        
92: R91         Pension and Other Post Retirement Plans (Details    HTML    102K 
                1)                                                               
114: R92         Pension and Other Post Retirement Plans (Details    HTML     54K  
                2)                                                               
91: R93         Pension and Other Post Retirement Plans (Details    HTML     51K 
                3)                                                               
76: R94         Pension and Other Post Retirement Plans (Details    HTML     57K 
                4)                                                               
119: R95         Pension and Other Post Retirement Plans (Details    HTML    113K  
                5)                                                               
73: R96         Capital Stock (Details)                             HTML     52K 
46: R97         Stock Compensation (Details)                        HTML    141K 
83: R98         Income Taxes (Details)                              HTML    234K 
78: R99         Income Taxes (Details Textuals)                     HTML     99K 
60: R100        Equity (Details)                                    HTML    100K 
136: R101        Related Party Transactions (Details)                HTML     50K  
112: R102        Commitments, Contingencies and Guarantees           HTML     72K  
                (Details)                                                        
90: R103        Commitments Lease Table (Details)                   HTML     79K 
28: R104        Other Income (Expense), Net (Details)               HTML     44K 
121: R105        Significant Concentrations of Risk (Details)        HTML     41K  
129: R106        Supplemental Balance Sheet Information (Details)    HTML     71K  
123: R107        Segment Information (Details)                       HTML    157K  
86: R108        Segment Information (Details 1)                     HTML     73K 
35: R109        Quarterly Financial Data (Unaudited) (Details)      HTML     55K 
105: R110        Quarterly Financial Data (Unaudited)- Textuals      HTML     72K  
                (Details)                                                        
51: R111        Condensed Consolidating Financial Information       HTML    310K 
                (Details)                                                        
21: R112        Subsequent Events Provision for Forward Loss        HTML     35K 
                (Details)                                                        
74: R113        Schedule II - Valuation and Qualifying Accounts     HTML     57K 
                (Details)                                                        
132: XML         IDEA XML File -- Filing Summary                      XML    195K  
24: EXCEL       IDEA Workbook of Financial Reports                  XLSX    639K 
56: EXCEL       IDEA Workbook of Financial Reports (.xls)            XLS   6.02M 
14: EX-101.INS  XBRL Instance -- spr-20131231                        XML   8.46M 
16: EX-101.CAL  XBRL Calculations -- spr-20131231_cal                XML    372K 
19: EX-101.DEF  XBRL Definitions -- spr-20131231_def                 XML   1.29M 
17: EX-101.LAB  XBRL Labels -- spr-20131231_lab                      XML   3.45M 
18: EX-101.PRE  XBRL Presentations -- spr-20131231_pre               XML   1.92M 
15: EX-101.SCH  XBRL Schema -- spr-20131231                          XSD    420K 
47: ZIP         XBRL Zipped Folder -- 0001047469-14-001034-xbrl      Zip    588K 

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

THESE SPECIAL BUSINESS PROVISIONS (SBP) are entered into as of June 16, 2005 by and between Spirit AeroSystems Inc., a Delaware Corporation with its principal office in Wichita, Kansas (“Seller”), and The Boeing Company, a Delaware corporation acting by and through its Boeing Commercial Airplanes business unit (collectively and individually “Boeing”).  Hereinafter, the Seller and Boeing may be referred to jointly as “Parties” hereto.

 

Now, therefore, in consideration of the mutual covenants set forth herein, the Parties agree as follows:

 

SPECIAL BUSINESS PROVISIONS

 

1.0                               DEFINITIONS

 

The definitions used herein are the same as those used in the GTA.  In addition, the following terms are defined as follows:

 

A.                        “Aircraft” means a completed Program Airplane ready for delivery or delivered to a Customer.

 

B.                        “Boeing Proprietary Spare Parts” means all Spare Parts, which are manufactured (i) by Boeing, or (ii) to Boeing’s detailed design with Boeing’s authorization, or (iii) in whole or in part using Boeing Proprietary Information.

 

C.                        “Boeing-Use Tooling” means certain gauge and interface Tooling (not including Boeing master gauges) manufactured by Seller in accordance with designs provided by Boeing, to be used exclusively by Boeing.

 

D.                        “Common-Use Tooling” means all Contractor-Use Tooling that enters into a Boeing facility or Boeing designated destination and that is required for use by Boeing and Seller, and, if applicable, a third party.

 

E.                         “Contract Change Notice” or “CCN” means any written notice sent by Boeing to Seller describing any Change to the general scope of this SBP pursuant to SBP Section 6.0 and authorizing Seller to proceed with the performance of work hereunder in accordance with such Change description.

 

F.                          “Contractor-Use Tooling” (also known as “Seller-Use Tooling”) means all Tooling needed to manufacture and deliver Products (including but not limited to, Supplier-Use Tools, Common-Use Tools, Mechanical Handling Equipment, Rotating Tools, Shipping Equipment, Interface Control Tools and Interface Production Tools as defined in Boeing Document D33200-1).

 

9

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

G.                        “Cycle Time” means the period of time that elapses between the dates the Program executes a Customer implementation directive for a Program Airplane and delivery of such Program Airplane to such Customer.

 

H.                       “Dataset” means any compilation of data or information (including, without limitation, numerical data, geometric definitions, program instructions or coded information) which may be used directly in, integrated with or applied to, a computer program for further processing.  A Dataset may be a composite of two or more other Datasets or an extract of a larger Dataset.

 

I.                            “Derivative” means any model airplane that either (1) can be FAA certificated by an amendment to an existing Type Certificate through addition of a new minor model, or by a Supplemental Type Certificate; and bears the same major model designation as an airplane currently being manufactured (e.g., 737, 747, 767, 777) by Boeing:  or (2) includes all of the following conditions: (a) has the same number of engines as the existing model airplane; (b) utilizes essentially the same aerodynamic and propulsion design, major assembly components, and systems as the existing model airplane; (c) achieves other payload/range combinations by changes in body length, engine thrust or variations in certified gross weight; (d) has the same body cross-section as the subject model aircraft; and (e) uses substantially the same technology, design, materials, specifications, and manufacturing processes as existing Program Airplane.  Derivative does not mean Boeing Integrated Defense Systems (IDS) Products or any BCA aircraft delivered to Boeing IDS except as currently provided in Attachment 4.  A Derivative does not include any subject model airplane, which has been or was currently in production as of the date of execution of this SBP, or any new airplane program receiving a new major model designation and which requires a new Type Certificate.

 

J.                            “Drawing” means an electronic or manual depiction of graphics or technical information representing a Product or any part thereof and which includes the parts list and specifications relating thereto.

 

K.                       “Effective Date” means the date on which both parties fully execute this SBP.

 

L.                         “End Item Assembly” means any Product which is described by a single part number and which is comprised of more than one component part.

 

M.                     “Engineering Release” means engineering Drawings, Datasets or other Documents, that define the design requirements of any Product.

 

10

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

N.                        “Existing Tooling” means all accountable Tooling relating to this SBP in the possession of Boeing on the date hereof, “Existing Boeing-Use Tooling”, “Existing Common-Use Tooling” and “Existing Contractor-Use Tooling” means respectively “Boeing-Use Tooling”, “Common-Use Tooling” and “Contractor-Use Tooling” that are not New Tooling.

 

O.                        “Life Cycle Product Team” or “LCPT”, Integrated Product Team” or “IPT” or “Design Build Team” or “DBT” means a team composed of representatives from engineering, operations, procurement, finance, design-to-cost and other disciplines as Boeing and Seller shall specify whose objective is to optimize designs for cost, weight, performance and producibility.

 

P.                          “Manufacturing Work Package” or “Work Package” means manufacturing effort that Seller will provide under this SBP.

 

Q.                        “Miscellaneous Work” is Seller performed work or services that includes, but is not limited to provision of additional test articles, New Boeing-Use Tooling, test support, field support and Boeing-used supplier facilities.

 

R.                        “New Tooling” means all Tooling other than Existing Tooling.  “New Boeing-Use Tooling”, “New Common-Use Tooling”, or “New Contractor-Use Tooling”, respectively, means Boeing-Use Tooling, Common-Use Tooling, or Contractor-Use Tooling, respectively, that is not Existing Tooling.

 

S.                          “Nonrecurring Work” is Seller performed work other than Recurring Work or Spares and Miscellaneous Work, which may include, but is not limited to Product Definition, product development, Tooling, static and fatigue test articles, Transportation Devices and planning.

 

T.                         “Obsolescence” means the discontinuation of the requirement for any Product as a result of engineering or manufacturing change, which has rendered such Product no longer usable in the production of the Program Airplane or any Derivative.

 

U.                        “Person” means any individual, partnership, corporation, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof or any other entity.

 

V.                        “Price” means the amount to be paid by Boeing to Seller for any Product in accordance with the terms of this SBP.

 

W.                     “Products” In addition to the definition in the GTA, “Products” has the meaning of Product Definition.

 

11

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

X.                        “Product Definition” means the engineering design deliverables (layouts, interface drawings, stress notes, etc.) required to design, build, test, certify, deliver and support Orders.

 

Y.                        “Production Articles” means those completed assemblies defined and configured, including SCD Products, as set forth in SBP Attachment 1 and 2 “Production Article Definition and Contract Change Notices” for the Program Airplane and any Derivative, and not including Products or Production Articles used for modification or retrofit of previously delivered Program Airplanes, except as provided in SBP Section 4.3.1. Purchases of Parts or Production Articles for modifications or retrofits, other than those described in Section 4.3.1, shall be governed by SBP number SBP-6-5118-AEC-016.

 

Z.                         “Program” means the design, development, marketing, manufacture, sales and customer support of Program Airplanes, Derivatives and Products.

 

AA.               “Program Airplane” means a Boeing commercial transport aircraft having a model designation of 737, 747, 767 or 777 for which Seller shall provide Product Definition and Production Articles pursuant to this SBP.

 

BB.               “Purchased on Assembly” (POA) means any detail component needed to replace a component on an End Item Assembly currently in Boeing’s assembly line process.

 

CC.               “Recurring Shipset Price” or “Recurring Price” means the Price for the Recurring Work associated with each Shipset and or part as identified in Attachment 1.

 

DD.               “Recurring Work” means work Seller performs in producing Product Definition and Production Articles.  The cost of Recurring Work can include, but is not limited to design, tool maintenance, replacement, and storage, packaging, disposable shipping fixtures and maintenance of production planning.

 

EE.                 “Replacement” means any model airplane that is not a Derivative airplane and substantially takes the place of a current model or models, or serves the same market segment or both.

 

FF.                   “SCD Products” means all goods, including components and parts thereof, designed to a Boeing Specification Control Drawing by Seller or its subcontractors or suppliers, and provided or manufactured under this Contract.

 

GG.               “Shipset” means the total set of Production Articles provided by Seller hereunder necessary for production of one Program Airplane or Derivative.

 

12

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

HH.             “Tooling” For purposes of this SBP, Tooling means all tooling, used in production or inspection of Products, either provided to Seller by Boeing or supplied by Seller whereby Boeing agrees to pay Seller for the manufacture of such tooling, including New Tooling and Existing Tooling.

 

2.0                               CONTRACT FORMATION

 

2.1                               Order

 

Any Order to which this SBP applies will include a statement incorporating this SBP by reference unless otherwise specifically agreed to in writing by the Parties.

 

Each such Order will be governed by and be deemed to include the provisions of this SBP.

 

2.2                               Entire Agreement

 

The Order, this SBP, the GTA, the AA, and the EAA sets forth the entire agreement, and supersede any and all other prior agreements, understandings and communications between Boeing and Seller related to the subject matter of an Order.  The rights and remedies afforded to Boeing or Customers pursuant to any provisions of an Order are in addition to any other rights and remedies afforded by any other provisions of the Order, the General Terms Agreement (GTA) or the SBP, by law or otherwise.

 

2.3                               Incorporated by Reference

 

General Terms Agreement (“GTA”) BCA-65530-0016 dated June 16, 2005 is incorporated in and made a part of this SBP by this reference.

 

Administrative Agreement (“AA”) AA-65530-0010 dated June 16, 2005 is incorporated in and made a part of this SBP by this reference.

 

In addition to any other documents incorporated elsewhere in this SBP or GTA by reference, the Documents set forth in SBP Section 12.1 “Supporting Documentation” are incorporated in and made a part of this SBP by reference with full force and effect, as if set out in full text.  It is the Seller’s responsibility to comply with the latest revision of these documents as made available by Boeing.

 

2.4                               Written Authorization to Proceed

 

Boeing’s Procurement Representative may give written or electronic authorization to Seller to commence performance before Boeing issues an Order as provided in the GTA.

 

13

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

3.0                               SUBJECT MATTER OF SALE

 

3.1                               Subject Matter of Sale

 

Subject to the provisions of this SBP, Seller shall sell to Boeing and Boeing shall purchase from Seller certain Products as described in this SBP including, certain Production Articles and other recurring Products as described in SBP Section 3.4 “Recurring Work”, and other Miscellaneous Work as described in SBP Section 3.5 “Product Support and Miscellaneous Work”.  In addition, Seller shall be responsible for providing engineering services and other Nonrecurring Work as described in SBP Section 3.3 “Nonrecurring Work”

 

3.2                               Period of Performance

 

The period of performance for this SBP shall include manufacturing and all other activities required to support delivery of Products from June 16, 2005 through life of Program Airplanes and Derivatives of those Program Airplanes.

 

3.3                               Nonrecurring Work

 

3.3.1                                             Engineering Services

 

3.3.1.1                                                           Engineering Services

 

Seller is responsible for engineering activities as set forth in Attachment 4 “Additional Statement of Work”.  Seller responsibilities for the work packages defined in Attachment 1 include those items outlined in Attachment 4.

 

Design shall conform to the standards and requirements set forth in Attachment 4 “Additional Statement of Work” and Product Definition in schedules set forth in Attachment 13 and the applicable documents referred to in SBP Section 12.1 “Supporting Documentation”.

 

3.3.2                                             Product Development and Test

 

3.3.2.1                                                           Product Development and Test Activities

 

Seller is responsible for all product development and test activities required to design, build, test, deliver, certify, and support Products as set forth in SBP Attachment 4 “Additional Statement of Work”.  Seller shall also prepare, and Boeing shall have the right to review, initial product development and test planning documentation as necessary to produce Product Definition, Production Articles in accordance with SBP Attachment 2 “Production Article Definition and Contract Change Notices” and Spare Parts in accordance with SBP Attachment 7.

 

14

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

3.3.2.2                                                           Static and Fatigue Test Articles

 

Seller will provide Boeing with Products and associated hardware as set forth in SBP Attachment 2 “Production Article Definition and Contract Change Notices” for static and fatigue tests, and as scheduled in SBP Attachment 14.

 

3.3.3                                             Certification Support

 

Seller is responsible for all certification activities as set forth in SBP Attachment 4 “Additional Statement of Work” including the associated costs.

 

3.3.4                                             Tooling

 

3.3.4.1                                                           Tooling — General

 

Boeing will retain ownership of all Existing Tooling and shall acquire ownership of all New Tooling upon passage of title thereto to Boeing in accordance with Section 3.3.4.6 of this SBP, and for financial reporting purposes and income tax purposes the Parties shall treat all Tooling so owned by Boeing in a manner consistent with Boeing’s ownership thereof.  Subject only to Seller’s right of use granted by Boeing hereunder and without diminishing the obligations of Seller hereunder, Boeing shall have and retain all rights, title and interest in all Tooling.  Seller shall be entitled to use Tooling for the purposes of performing its obligations of this SBP and for Spares and MRO aftermarket according to the terms of the HMSGTA, any applicable SLA’s and any other applicable SBP’s.

 

All Tooling produced or used in performance of this SBP must conform to the provisions of Boeing Document D953W001, “General Operations Requirements Document for Suppliers External/Internal Suppliers/Program Partners,” and D33200-1, “Boeing Suppliers’ Tooling Document” or, subject to Boeing’s review and approval not to be unreasonably withheld or delayed, its equivalent or replacement document.

 

3.3.4.2                                                           Contractor Use-Tooling (also known as Seller-Use Tooling)

 

As of the date hereof, Seller is responsible for providing all New Contractor-Use Tooling (as defined in “New Tooling”) needed to manufacture and deliver Products as required in the performance of this SBP.  Seller shall plan, design, manufacture or procure, and test all New Contractor-Use Tooling.  Existing Contractor-Use Tooling (as defined in “Existing Tooling”) and New Contractor-Use Tooling shall be in the configuration, quantity and quality required to produce (i) Production Articles in accordance with SBP Attachment 14 and (ii) other Boeing requirements for Products (including, without limitation, Spare Parts).

 

3.3.4.3                                                           Common-Use Tooling

 

Seller shall design, manufacture or procure, and test all New Common-Use Tooling including, without limitation, strongback handling fixtures, rotable

 

15

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

shipping fixtures and handling fittings.  The requirements for such items will be defined and identified by Boeing.

 

3.3.4.4                                                           Use of Casting, Forging and Extrusion Tooling

 

Boeing or its designees shall have and retain the right to use all Tooling for the production of castings, forgings and extrusions produced at Seller’s direction for use under this SBP and such Tooling shall be used only in the performance of this SBP or any other SBP that Boeing may designate in writing.  Such Tooling shall be retained for use in production of castings, forgings and extrusions for Boeing or as Boeing directs until Boeing gives written notice to Seller that a requirement for the use of such Tooling no longer exists.  Subject to the terms of this SBP, Boeing hereby grants to Seller the right to use any Tooling during the term of this SBP for the production of castings, forgings or extrusions that will become part of any Product, in which Boeing has a right of use, ownership or other proprietary interest.

 

3.3.4.5                                                           Initial Planning

 

Seller will perform all Tooling and production planning activities.  Seller shall also prepare, and Boeing shall have the right to review, Tooling and production planning documentation as necessary to evaluate Seller’s ability to produce Production Articles in accordance with SBP Attachment 2 “Production Article Definition and Contract Change Notices” SBP Attachment 4 “Additional Statement of Work” and Spare Parts.

 

3.3.4.6                                                           Title to Tooling

 

Boeing shall retain title to all Existing Tooling.  Title to all New Tooling shall pass from Seller or any of Seller’s subcontractors to Boeing upon completion of the manufacture of such New Tooling by Seller or any of its subcontractors and after payment therefore by Boeing, in accordance with Section 5.2.1 or otherwise, and such title shall thereafter be retained by Boeing for all purposes.  Seller shall ensure that any subcontract for the production of New Tooling provides for the passing of title to Boeing pursuant to the immediately preceding sentence.

 

3.3.4.7                                                           Use and Disposition of Tooling

 

Seller shall use any and all Tooling only for the purpose of performing its obligations under this SBP, except as provided in SBP Section 3.3.4.1, and shall not sell, lease or otherwise dispose of any Tooling.  Seller shall, on behalf of Boeing as the owner thereof obtain and maintain in effect insurance in respect of all Seller-Use Tooling and Common-Use Tooling (other than such Tooling, which is in the actual possession of Boeing,).  Seller shall not create or be responsible for the creation by others, any lien, claim or right of any person or entity other than the rights of Boeing, in respect of any Tooling, under this SBP.

 

16

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

3.3.4.8                                                           Reserved

 

3.3.4.9                                                           Responsible Party

 

Seller shall absorb alt costs associated with non-accountable tooling manufactured and/or purchased by Seller necessary for the manufacture and delivery of the Products including but not limited to rework, repair, replacement and maintenance of the tooling.  Seller shall not use tools, which contain, convey, embody, or were made in accordance with or by reference to any Proprietary Information and Materials of Boeing, to manufacture parts for anyone other than Boeing without the prior written authorization of Boeing; provided, however, that Seller shall be entitled to use Tooling as provided in SBP Section 3.3.4.1.

 

When Boeing agrees to pay for Tooling to support the manufacture and delivery of applicable Product(s) identified herein, the amount shall be set forth in SBP Attachment 1.  The costs of necessary repair and maintenance to the Tooling are included in such amount.  Invoices received with incorrect, improperly prepared or incomplete certified tool lists will be returned for correction prior to payment.  Invoices shall be dated concurrent with, or subsequent to, shipment of the Products.  Boeing shall notify Seller of any action required for discrepant Tooling, other than Boeing-Use Tooling.

 

3.3.5                                             Life Cycle Product Teams

 

Seller shall, in accordance with SBP Section 12.15 and as mutually agreed between the Parties locate at Boeing’s facilities key personnel for Life Cycle Product Teams (LCPT’s) as may be required.

 

3.3.6                                             Weight Status Reporting

 

Seller shall report to Boeing the actual weights of Products in accordance with the requirements of Document D6T-10898-1, “Weight Compliance Requirements/Participant Contractors”.

 

3.4                               Recurring Work

 

3.4.1                                             Production Articles

 

Upon acceptance of the initial and subsequent Orders, Seller shall provide the Production Articles specified in SBP Attachment 1 “Statement of Work”, Attachment 2 “Production Article Definition and Contract Change Notices” in accordance with the delivery schedules set forth in SBP Attachment 14 and/or the Order.  All Production Articles will be designed, manufactured, certified, tested, delivered, and supported in accordance with the specifications and schedules set forth in this SBP.

 

17

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

3.4.2                                             Delivery Point and Schedule

 

Notwithstanding the provisions of GTA Section 4.1, deliveries of Production Articles shall be strictly in accordance with the quantities, the schedule and other requirements specified by Boeing.  Notwithstanding the provisions of GTA Section 4.1, all Products shall be delivered F.O.B. carrier’s transport at Seller’s plant.

 

3.4.2.1                                                           Additional Events of Excusable Delay

 

In addition to those Excusable Delays described in GTA Section 14.0, in the event of a delay caused by Boeing affecting Sellers on time delivery, Boeing and Seller shall seek commercially practical solutions to assure Boeing maintains on-schedule delivery of the airplane to the airplane customer.

 

3.4.3                                             Transportation Routing Instructions

 

Products shall be transported by the agent, carriers and routings specified by Boeing.  Seller shall obtain the prior approval of Boeing, not to be unreasonably withheld or delayed, before shipping any Products on a route other than that specified by Boeing.

 

3.4.4                                             Manufacturing Configuration

 

The pricing set forth in SBP Attachment 1, as of the date hereof, is based on the latest definition or revisions of the statement of work, as of the date hereof, and is subject to change in accordance with this SBP.

 

3.4.5                                             Sustaining Product Definition

 

Seller shall provide Product Definition and sustaining engineering in accordance with the documents set forth in Attachment 4 “Additional Statement of Work”, Attachment 13 “Product Definition Schedule” and the applicable documents referred to in SBP Section 12.1 “Supporting Documentation”.

 

3.4.6                                             Tooling Maintenance

 

Seller shall provide at no cost to Boeing on Boeing’s behalf as the owner thereof, control, accountability, care, storage, maintenance, insurance and replacements of all Contractor-Use Tooling and Common-Use Tooling in the possession of Seller or its subcontractors in accordance with Document D33200, “Boeing Suppliers’ Tooling Document” or, subject to Boeing review and approval, not to be unreasonably withheld or delayed, its equivalent or replacement, as required to support the manufacture, certification, support and delivery of Products; it being understood, however, that Boeing as the owner thereof bears the economic burden of depreciation and obsolescence of all Tooling.

 

18

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

3.4.7                                             Maintenance of Production Planning

 

Seller will revise and maintain the production planning as required to support the production and certification of Production Articles and Spare Parts.

 

3.4.8                                             Certification Support

 

Seller is responsible for all certification activities as set forth in SBP Attachment 4 “Additional Statement of Work” including the associated costs.

 

3.4.9                                             Type Design and Type Certification Data Development and Protection

 

Seller is responsible for the development and maintenance of all type design and type certification data for which they have type design/certification responsibility and/or support type design/certification, including where applicable, flow down requirements to Seller’s subcontractors and suppliers.  Seller shall maintain such type design and type certificate data in accordance with Boeing Document D6-83393, “Certification Records Retention for Boeing Suppliers” for the life of such type certificate.  As part of this SBP Boeing is entitled to access, review and receive the type design/certification and data in a manner Boeing and Seller agree to in the D6-83393 or a records management agreement.  Boeing Document D6-83393 is incorporated in and made a part hereof by this reference.  Seller shall make available to Boeing, upon request, all compliance data as set forth in the D6-83393 related to the Product(s) which is maintained by Seller or Seller’s subcontractors or suppliers.  Such records shall be made available as soon as possible but in no event later than seventy-two (72) hours of Boeing’s request.

 

3.4.10                                      Seller Authorized Representative (AR) Requirements and Obligations

 

Seller’s AR as designated and approved by Boeing shall operate and act in accordance with Boeing Document DOA-300064-NM “Delegated Option Authorization Procedures Manual” or “BCA Delegated Compliance Organization Procedures Manual” as amended from time to time including but not limited to providing compliance findings to Boeing Delegated Compliance Organization.  Said document is incorporated and made a part hereof by this reference.

 

3.5                               Product Support and Miscellaneous Work

 

3.5.1                                             Miscellaneous Work

 

Seller shall provide to Boeing Miscellaneous Work, including, without limitation New Boeing-Use Tooling, field support or other related program support items, as may be ordered by Boeing from time to time.

 

19

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

3.5.2                                             Delivery Schedule of Other Products and Performance of Services

 

All deliveries of other Products and performance of services will be as set forth in any applicable Order, as set forth in SBP Section 3.4.2.

 

4.0                               PRICING

 

4.1                               Recurring Price

 

The Price of Recurring Products is set forth in SBP Attachment 1 and includes the total price for all work under this SBP; subject to any applicable adjustment under SBP Section 7.0.

 

Prices shall be firm fixed priced through the eighth anniversary of the first day of the month in which both Parties fully execute this SBP as developed using Attachment 20 and listed in Attachment 1.  For example, if the Parties fully execute this SBP on March 25, 2005 then the eighth anniversary of the first day of the month of that execution is March 1, 2013.  In addition, Attachment 1 work package price(s) are subject to adjustment for abnormal escalation as provided in Attachment 22.

 

Twenty Four (24) months prior to the eighth anniversary of the first day of the month in which both Parties fully execute this SBP, Seller will propose pricing for the following ten (10) years or a period agreed upon by the Parties.

 

The Parties will negotiate pricing in good faith based on then-prevailing domestic market conditions for 41 sections (all programs), 737 fuselage, 737/777 struts & nacelles and then-prevailing global market conditions for all other Products.

 

4.1.1                                             Interim Extension Pricing

 

If the Parties are unable to reach agreement on Pricing by the date which is six months prior to the end of the period for which Pricing has been fixed, then such matter shall be resolved pursuant to GTA Section 33.0.  If any dispute on Pricing continues after the eighth anniversary of the first day of the month in which both Parties fully execute this SBP, then interim Pricing shall be established.  Interim Pricing shall be the then current Base Price (as of the eighth anniversary referred to above) adjusted in accordance with SBP Attachment 20 and escalated annually using the indices outlined below.  At such time as a resolution on Pricing has been achieved, an appropriate debit or credit will be made retroactive to the day after the eighth anniversary of the first day of the month in which both Parties fully execute this SBP.  Using the example in section 4.1, the date would be March 2, 2013.

 

A.                                    Material — [*****]

 

20

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

B.                                    Labor — [*****]

 

Approximately forty-five days before the eighth anniversary of the first day of the month in which both Parties fully execute this SBP and on approximately the same date of each year thereafter until such time as a resolution on Pricing has been achieved, Boeing will use the above referenced indices to calculate the appropriate escalation factor based on actual index growth for the previous twelve (12) months using a composite of [*****] and [*****].  Then current Attachment 1 Pricing will be revised to include this escalation factor for deliveries in the following year.

 

4.2                               RESERVED

 

4.3                               Pricing of Requirements for Modification or Retrofit

 

4.3.1                                             Boeing Responsibility or Regulatory Requirement

 

Any Products required by Boeing to support a modification or retrofit program, which results from a regulatory requirement or which Boeing may be liable for the cost associated with such program, shall be provided to Boeing at the applicable price as set forth in SBP Attachment 1.

 

4.3.2                                             Reserved

 

4.4                               Expedite of Production Requirements

 

Seller agrees to support Boeing’s short flow requirements with its best effort.

 

4.5                               Pricing for Derivatives

 

Prices for Derivative(s) will be negotiated in good faith based on then-prevailing market conditions appropriate for each Product type.  If the Parties are unable to reach agreement on Pricing then the Parties shall refer to GTA Section 33.0 “Disputes” for resolution.

 

4.6                               POA Pricing

 

Seller shall expend best efforts to provide the earliest possible delivery of any spare designated as POA by Boeing.  Such effort includes but is not limited to working twenty-four (24) hours a day, seven (7) days a week and use of premium transportation.  Seller shall specify the delivery date of any such POA within two (2) hours of a POA request.

 

The price for POA requirements shall be the price for such Products listed in SBP Attachment 1 or the pro rata share of the appropriate Attachment 1 price represented by the POA multiplied by a factor of [*****].

 

21

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

5.0                               PAYMENT

 

5.1                               Invoicing

 

5.1.1                                             Invoicing Requirements

 

Seller shall submit separate invoices for items other than Pay from Receipt items (as defined in Section 5.1.5) for each applicable Order.

 

Materials purchased by Seller from Boeing shall be satisfied by Boeing issuing a debit against Seller’s account as follows:

 

In the case of Boeing Provided Details (as defined in Attachment 16), debits will be issued by Boeing as provided in Attachment 20, section titled “Billing for BPD Parts not yet transferred from Boeing”.

 

For all other materials, including materials purchased from Boeing’s Accommodation Sales group, debits will be issued by Boeing on the (net) fifteenth (15th) day from the scheduled delivery date.  If the debit amount exceeds the amount outstanding on the Seller’s account, Boeing will notify Seller and Seller will pay such amount upon receipt of such notification.

 

5.1.2                                             Invoicing Shipset Identification

 

Seller shall indicate on each invoice the line number of each Shipset included therein, as applicable.

 

5.1.3                                             Customs Invoicing

 

All specific questions and concerns on customs invoicing may be addressed to the Boeing Traffic Organization.

 

5.1.4                                             Mailing Instructions

 

All mailed invoices shall be addressed to:

 

Boeing Commercial Airplanes
P.O. Box 34656
Seattle, WA  98124-1656
Attention:  Payment Services

 

5.1.5                                             Pay From Receipt

 

An invoice shall not be required from Seller in the case of “Pay From Receipt” items.  Pay From Receipt items shall include Products (except Tooling), Production Articles, Purchase On Assembly items (POA’s) and such other items as Boeing may designate in writing (collectively, the “Pay From Receipt Items”). Each shipment shall contain an accurate and complete pack slip.  In the case of Pay From Receipt items, the date of payment is calculated from the shipment

 

22

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

date (the date items are received by carrier from Seller) as stated on such pack slip.  If the Sellers pack sip does not state the actual shipment date, the date of payment is calculated from the date the items are received by Boeing at its manufacturing site.

 

5.2                               Recurring Payment

 

Unless otherwise provided under Written agreement between the Parties, payments shall be paid in immediately available funds net [*****] calendar days after the shipment date (the date items are received by the carrier from Seller).  Except in the case of an Order requiring Pay-From Receipt, the date of payment is calculated from the later of (a) the date the items are delivered to Boeing at its manufacturing site, (b) the date of receipt of a correct and valid invoice or (c) the scheduled delivery date of such product.  Payment shall be done electronically as mutually agreed.  Boeing agrees to promptly notify the Seller if it receives an invoice Boeing believes to be incorrect.

 

All Payments are subject to adjustment for shortages, credits and rejections.

 

5.2.1                                             Non-Recurring Payment

 

Non Recurring Tooling payment shall be paid in immediately available funds net ten (10) calendar days after receipt by Boeing of both a correct and valid invoice and where required, a completed and approved certified tool list (CTL), (whichever is later).

 

Timing for non-recurring engineering, product development and test payments for Derivatives shall be tied to specific events as non-recurring effort progresses, which events shall not be limited to first shipset delivery and receipt by Boeing.  Schedule of specific events to be mutually agreed upon for each engineering development effort (i.e. 25%, 50%, 90% engineering release).

 

Future Product Development Projects will be supported up to forty (40) hours (includes technical consultation and development of ROM work statement and schedules as required) before Seller is eligible for compensation under the Technical Services Agreement (TSA) or this SBP.

 

Attachment 4 contains the Engineering Delegation requirements for sustaining products that are part of this SBP and included in the part pricing in Attachment 1.  All costs associated with Seller Engineering responsibility are included within Attachment 1 pricing for sustaining programs and will not be subject to additional payment from Boeing.

 

To maintain, repair, sustain, and replace Boeing’s Tooling and to provide certain capital property, plant, and equipment (excluding leasehold improvements and real property) required to support Seller’s activities under this Agreement, Boeing shall pay to Seller forty five million five hundred thousand dollars ($45,500,000) in 2007, an additional one hundred and sixteen million one hundred thousand dollars

 

23

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

($116,100,000) in 2008, and an additional one hundred and fifteen million four hundred thousand dollars ($115,400,000) in 2009 for such Tooling and property, plant, and equipment costs.  Within each such year, the payments are to be made in equal quarterly installments within 15 days following each Invoice Date (as defined below) and shall not be affected by the amount of costs set forth in the written list of costs delivered to Boeing on such Invoice Date pursuant to the following paragraph.

 

By March 15, June 15, September 15, and December 15 (each an “Invoice Date”) of each of 2007, 2008, and 2009, Seller will deliver to Boeing a written list of any Tooling and capital property, plant, and equipment (excluding leasehold improvements and real property) acquired after the Effective Date and prior to such Invoice Date (and not previously paid for by Boeing under this provision), and the costs thereof, the aggregate amount of which costs does not exceed the amount of the payment due within 15 days following such Invoice Date.  Pursuant to the terms of Section 3.3.4.6, upon payment by Boeing, Boeing will acquire title to and ownership of the Tooling and property, plant and equipment described in such list free of liens, claims or rights of any third party.

 

In the event Boeing acquires title to and ownership of any property, plant and equipment from Seller pursuant to this Section 5.2.1, Seller shall continue to have the right to use such property, plant and equipment to the same extent it had such right prior to such acquisition by Boeing, without paying any additional consideration to Boeing, and the Parties shall undertake in good faith to enter into any documentation necessary to evidence such right.  In addition, to the extent movable, any such property, plant and equipment acquired by Boeing shall remain at Seller’s facility subject to the terms of the Agreement, including Boeing’s rights under GTA sections 12.0 and 13.0 and SBP section 34.0, and Seller shall have the right to move any such movable property, plant and equipment in accordance with its use thereof and with the terms of the Agreement.

 

If Boeing acquires title to and ownership of any property, plant and equipment pursuant to this Section 5.2.1, then paragraphs (1) and (2) are also applicable.

 

(1)                                 Seller shall bear the risk of loss and shall provide at no cost to Boeing on Boeing’s behalf as the owner thereof, control, accountability, care, storage, maintenance, and insurance for such property, plant and equipment to the same extent Seller generally provides such services with respect to property, plant and equipment owned by Seller; it being understood, however, that Boeing as the owner thereof bears the economic burden of any applicable depreciation and obsolescence for such property, plant and equipment;

 

(2)                                 Seller shall not create or be responsible for the creation by others, any lien, claim or right of any person or entity other than the

 

24

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

rights of Boeing, in respect of any property, plant and equipment to which Boeing acquires title to and ownership of pursuant to this Section 5.2.1.

 

To the extent Seller did not incur Tooling or capital property, plant and equipment (excluding leasehold improvements and real property) costs prior to any Invoice Date which were not previously paid for by Boeing under this provision, in an amount equivalent to the amount paid by Boeing within 15 days following such Invoice Date, the excess amount shall be allocated to other assets not owned by Boeing, in a manner to be mutually determined by Buyer and Seller at that time.  For the avoidance of doubt, Boeing will acquire title to and ownership of the other assets to which the excess amounts are allocated free of liens, claims or rights of any third party, provided that such excess amounts allocated are equal to the book value of such other assets.

 

5.3                               Payment Method

 

All payments hereunder shall be made electronically to an account designated in writing by Seller.

 

5.4                               Payment Errors

 

If an error in payment (over payment or under payment) is discovered by Boeing or Seller, a written notification will be submitted to the other Party and resolution of the error will occur in a timely manner after discovery of such error.

 

6.0                               CHANGES

 

Notwithstanding the provisions of GTA Section 10.1, at any time, Boeing may, by written direction to Seller, make changes within the general scope of this SBP in:  (i) Statement of Work requirements and Documents, requirements for Product Definition, Drawings, designs, specifications, configurations, Datasets or any other Document (ii) Tooling (including, without limitation, the quantities thereof), services or Spare Parts to be provided by Seller under this SBP; (iii) the method of shipping or packing; (iv) the place of delivery, inspection, or acceptance for all Products (v) Program schedules, delivery rates and schedules for performance of services; including short flow requirements; (vi) Products, the Program Airplane and Derivative models and Customer variables; (vii) Boeing Furnished Material and any Boeing furnished or provided property; (viii) the allocation of responsibility as between Seller and Boeing for production of any component of any Product or the provision of any Service such that it does not significantly reduce the content of Seller’s Statement of Work for any given major end item or major sub assembly; (ix) the allocation of responsibility among Seller and third parties such that it does not significantly reduce the content of Seller’s Statement of Work for any given major end item or major sub assembly; (x) certification requirements; (xi) Miscellaneous Work requested to be performed not in then current Statement of Work (any of the foregoing a “Change”); (xii) description, time and place of Services to be performed.  Seller shall immediately comply with

 

25

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

such written direction upon receipt, irrespective of any failure by the Parties to agree that such Change shall be subject to Price adjustment in accordance with SBP Section 7.0 “Change Provisions”.

 

If Seller reasonably expects that any Document or any revision to any Document shall significantly affect Seller’s performance of any work hereunder, Seller shall, without affecting its obligation to comply, in accordance with SBP Section 12.1 “Supporting Documentation,” with any such Document as revised, so notify Boeing in writing in accordance with the Administrative Agreement within twenty (20) days of Seller’s receipt of such Document or revision.  If Seller provides notification as required by this Section, then any such revision or any written direction pursuant to the immediately preceding paragraph that constitutes or results in a Change shall be subject to Section 7.0.

 

If Seller considers that Boeing’s conduct constitutes a Change, Seller shall notify Boeing’s Procurement Representative promptly in writing as to the nature of such conduct and its effect upon Seller’s performance.  In the absence of such notification, Seller shall not be entitled to equitable adjustment.

 

SBP Sections 6.0 and 7.0 apply in lieu of GTA Section 10.0.

 

7.0                               CHANGE PROVISIONS

 

Notwithstanding the provisions of GTA Section 10.0, “Changes”, no adjustment will be made to the Price of any Products for any Change orders as provided in GTA Section 10.0 or SBP Section 6.0, “Changes” issued through the period of performance of this SBP except as may be provided under SBP Sections 7.0 through 7.10.

 

SBP Sections 6.0 and 7.0 apply in lieu of GTA Section 10.0.

 

7.1                               Price Adjustment for Changes

 

If any individual Change increases or decreases the cost or time required to perform this contract, Boeing and Seller shall negotiate in good faith an equitable adjustment in the price or schedule for recurring and non recurring work, or both, to reflect the increase or decrease subject to the following provisions:  (i) Seller shall be responsible for absorbing the cost of Seller generated changes to meet requirements and specifications of the Program Statement of Work (PSOW) as described in this SBP and as existing prior to the Change; and (ii) Seller shall be responsible for absorbing the cost of changes required to correct Seller’s deficiencies related to any delegated engineering part (statement of work) of Seller.

 

7.2                               Change Pricing Criteria

 

The following Change pricing thresholds will apply to all Changes:

 

26

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

Recurring Price:

 

An equitable adjustment (either debit or credit) shall be negotiated and incorporated into the applicable Attachment 1 recurring part Price if both of the following conditions are met:

 

a.                                      For Engineering Changes, the recurring price impact to the Attachment 1 part Price for each individual Change exceeds [*****] of the then current Price for that part or for Statement of Work allocation Changes, the recurring price impact to the Attachment 1 part Price for each individual Change exceeds [*****] of the then current Price for that part (see note 1 below), and

 

b.                                      The recurring price impact for each individual Change exceeds [*****] per year based on then current requirements forecasted for the following calendar year.

 

Note 1:  For Statement of Work allocation changes only there is an annual cumulative cap of [*****].  The annual cumulative cap will begin January 1st of each year and end December 31st of each year.  This cap will re-set to zero at the beginning of each year and only new Statement of Work allocation changes falling below the [*****] threshold will be applied against this cap.  The value attributable to each change will be as negotiated by the Parties and Seller agrees to provide information to Boeing for these Change proposals consistent with the terms of this SBP for any and all assertions believed to contribute towards the annual [*****] cap.

 

Non-Recurring

 

An equitable adjustment will be made by Boeing to Seller for non-recurring if both of the following conditions are met:

 

a.                                      The non-recurring price impact for each individual Change exceeds [*****], and

 

b.                                      The non-recurring Change is associated with a new statement of work (not for current configuration of parts defined in Attachment 1 as of June 16, 2005.

 

27

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

7.3                               Reserved

 

7.4                               Reserved

 

7.5                               Schedule Acceleration/Deceleration

 

Boeing may revise the delivery schedule and/or firing order without additional cost or change to the unit price stated in the applicable Order if (a) the delivery date of the Product under such Order is on or before the last date of contract if applicable, and (b) Boeing provides Seller with written notice of such changes, provided however that Seller shall be entitled to payment for schedule accelerations made with less than the notification lead times for acceleration and deceleration identified in SBP Attachment 6.  In case of shorter notification for acceleration, Product price for those Products shipped inside the notification period (less than [*****] notification) shall be equitably adjusted as agreed by the Parties.  In case of shorter notification for deceleration, Product price will be adjusted by [*****] for those Products shipped inside the notification period (less than [*****] notification).  Except as provided in this clause “Schedule Acceleration/Deceleration”, there shall be no other price adjustment for schedule rate or firing order changes.  The resulting payment amount shall be paid in accordance with SBP Section 5.0.  Boeing shall notify Seller of accelerations, decelerations and refirings as soon as reasonably practical.  Boeing and Seller further agree to work in good faith to decrease all lead times identified in SBP Attachment 6 in support of then current Boeing lead time objectives for each Airplane Program.  Joint reviews of the program lead times will take place at least annually during the contract period to identify opportunities for reduction.  Where the Parties mutually agree to reduce the lead times, SBP Attachment 6 will be updated and such update will not be considered a Change under SBP 6.0.

 

7.5.1                                             Production Rates

 

This SBP contains no minimum production rates.  The maximum production rates are as defined in Attachment 15 “Maximum Production Rates and Model Mix Constraint Matrix”.  Seller is responsible to support these rates at no additional cost to Boeing.  Higher rates are subject to negotiation.

 

7.6                               Total Cost Management

 

Any cost reductions resulting from incorporation of joint Boeing and Seller cost reduction initiatives (TCMS) will result in a reduction in the Attachment 1 Prices in a mutually agreed manner that equitably preserves, or enhances if market conditions allow, the anticipated economics for both Boeing and Seller.  The immediately preceding sentence does not apply to material initiatives referred to in Attachment 20.F.

 

28

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

Boeing and Seller confirm their intention for the Program Airplane to remain price and performance (including weight) competitive throughout the life of the Program by incorporating into the Program Airplane advances in design, configuration, materials, or manufacturing processes that will benefit the Parties and Boeing’s customers.

 

If Boeing reasonably demonstrates, after consultation with Seller, that a proposed cost reduction initiative that would materially increase the competetiveness of the Program Airplane in the market place can be accomplished in a manner that would preserve the anticipated economics of the Program for both Boeing and Seller, Seller shall incorporate the subject cost reduction initiative in a timely manner after reasonable notice from Boeing and reduce the price in a mutually agreed manner that equitably preserves the anticipated economics of the Program for both Boeing and Seller.

 

7.6.1                                             Boeing Generated Technical and Cost Improvement

 

At any time during the Seller’s performance under this SBP, Boeing may offer specific recommendations to Seller for the incorporation of any new technologies and process improvements intended to reduce Seller’s costs or improve product performance.  These recommendations may include, but are not limited to, Boeing proprietary information and Boeing owned patents.  Notwithstanding any other provision(s) elsewhere in this SBP, where a savings is achieved and documented as a result of the implementation of a recommendation initiated by Boeing and which Seller agrees to implement, the Parties will reduce the Price in a mutually agreed manner.

 

7.7                               Obsolescence

 

No adjustment pursuant to Section 7.1 shall include any of Seller’s costs for Obsolescence.  Not withstanding the foregoing Seller shall be entitled to payment for any Obsolescence estimated to exceed the lesser of (i) ten thousand ($10,000) dollars and (ii) ten percent (10%) of the recurring Attachment 1 Price in accordance with GTA Section 12.3.  Each Change shall, for purposes of determining Obsolescence costs, be considered separately.  Changes, for purposes of determining Obsolescence costs, may not be combined for purposes of exceeding the percentage limit as described in this SBP Section 7.7.  Seller may not defer implementation of Changes so as to avoid Obsolescence unless the priority of such Change permits such implementation.

 

7.8                               Reserved

 

7.9                               Timeframe for Price Adjustment Proposals:

 

Price adjustment proposals for Changes made prior to 100% Engineering Release shall be submitted no later than sixty (60) calendar days after 100% Engineering Release. Seller shall submit to Boeing a listing of all Changes which were received by Seller prior to 100% Engineering Release together with the Seller’s proposal for appropriate price adjustment.

 

29

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

For Changes subsequent to 100% Engineering Release, Seller must submit a written notice of impact to a Boeing Procurement Agent within twenty-five (25) days of receipt of a CCN or other written direction. A fully supported proposal must be submitted within ninety (90) calendar days after receipt of such direction.

 

If Boeing does not receive a proposal within the ninety (90) day time period, unless otherwise agreed to in writing by both parties, no such adjustment shall be made to Nonrecurring and Recurring Shipset Prices.

 

Review of Price Adjustment Proposal:

 

Subject to Seller’s delivery of a proposal to Boeing within the Timeframes described above, Boeing will conduct a proposal review within thirty (30) days from receipt of Seller’s proposal. If Boeing determines that Seller’s proposal is not fully supported, Boeing will provide a detailed list of proposal deficiencies in writing including examples of types of data that were omitted. Boeing will consider proposal timing and data availability when evaluating proposals. Spirit will provide requested data as available to make proposal fully supported.

 

Once the proposal is considered fully supported, Boeing will make an offer within 90 days and engage in diligent good faith negotiations to settle the claim or request an extension for delay. A mutually agreed to negotiation schedule shall be utilized to set settlement priorities.

 

If Boeing does not request additional supporting data within thirty (30) days of receipt of Seller’s proposal, Spirit will receive an offer within ninety (90) days from date of submittal or Boeing will request an extension. The thirty (30) day review period for fully supported proposals is considered to be part of the ninety (90) day timeframe Boeing has to prepare an offer.

 

If a settlement is not subsequently reached within ninety (90) days of a formal offer, negotiations shall be elevated to the Senior Manager of Boeing Supplier Management Contracts for resolution. Until such time new Pricing is negotiated, Seller will continue to be paid at the existing Attachment 1 Price.

 

Proposal Content:

 

Seller shall provide a detailed description of each Change, the technical impact on the Product’s form, fit, and/or function, and any significant impact on manufacturing processes. Seller shall include with each proposal a complete estimate of the Change’s impact on the Seller’s cost per Product, including, but not limited to, the impact on labor hours, labor rates utilized for the proposal, processing costs, sub-tier supplier costs, overhead and raw material costs. Boeing must be able to substantiate and verify Seller’s submittal for any such price adjustment claim. Seller’s claim must be consistent with market driven prices for such Product.

 

A Fully Supported Proposal may include but is not limited to the following data as available and applicable to support the Sellers claim:

 

The standard quote form template will be used for all submittals. Data will be submitted when available unless otherwise agreed to in writing.

 

30

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

·                                          Dollars and hours on the standard quote form will be:

 

·                                          Linked via formulas which provide visibility to the calculations and links used to derive the total.

 

·                                          Linked to a separate tab on the form that contains back-up data to substantiate the numbers.

 

·                                          Priced bill of material (BOM) for the affected baseline statement of work and delta statement of work:

 

·                                          Identify part numbers by adds, deletes, and swaps.

 

·                                          BOMs will be formatted so that adds, deletes and swaps can be easily compared for delta work statement.

 

·                                          Basis of estimate (BOE), describing effort, SOW and estimating methodology used to arrive at estimate.

 

·                                          Rates and factors:

 

·                                          The rates, factors and methodology set forth in SBP Attachment 5, shall be utilized to calculate the equitable adjustment, if any, to be paid by Boeing for each individual change for which Seller estimates a value that is less than [*****].

 

·                                          For each Change for which Seller estimates a value that is greater than [*****], the proposal shall contain the above mentioned Content and stand on its own merits.

 

Additional data to be provided as available and when applicable if requested by Boeing.

 

·                                          Make/buy decision updates.

 

·                                          Learning curves with explanation of assumptions.

 

·                                          Material: TMX purchase order (PO), Spirit PO number, quantity, raw material specifications, price paid OR a BOE with supporting documentation.

 

·                                          A list of proposed in-house built parts; Boeing may select a random number of parts for validation. Competitive bid matrix for changes in excess of [*****].

 

·                                          PO, invoice and supplier quotes:

 

·                                          Spirit will provide a list of proposed vendor parts; Boeing may select a random number of parts for validation.

 

·                                          Supplier Purchase Order:

 

·                                          Provide duration, pricing, and pricing related terms, unless protected by a proprietary agreement.

 

·                                          Part card totals.

 

·                                          Tooling:

 

·                                          Tool type, tool number, tool design hours, tool fabrication hours, tool material and labor rate.

 

·                                          Supply Chain Management (SCM) tooling:

 

·                                          Provide Supplier quote, PO, invoice, or a BOE with supporting documentation.

 

31

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

·                                          Quality Assurance:

 

·                                          Validation of hours, BOE.

 

·                                          Numerically Controlled (NC) Programming: List of affected parts, number of NC programming hours per part, number of tapes per part, number of hours per tape.

 

7.10                        Apportionment and Payment of Price Adjustments

 

7.10.1                                      Recurring Work Price Adjustment

 

The amount of the Recurring Price adjustment shall be equal to the value of the Change subject to SBP Sections 6 and 7 and shall be documented in SBP Attachment 1.

 

7.10.2                                      Apportionment and Payment

 

The then-current recurring billing Price shall be adjusted to reflect the Change beginning with the first Shipset, which incorporates such Change.

 

8.0                               GOVERNING QUALITY ASSURANCE REQUIREMENTS

 

In addition to those general quality assurance requirements set forth in the GTA, the work performed under this SBP shall be in accordance with the requirements set forth in SBP Attachment 10.

 

9.0                               STATUS REPORTS/REVIEWS

 

9.1                               Notification of Shipment

 

Seller shall notify the Boeing personnel identified in the “Administrative Agreement”, as identified in SBP Section 17.0, by telephone, facsimile or other agreed means when any shipment has been made.  Such notification will include (i) a list of the items and quantities of items shipped, (ii) the Shipset number with respect to any item shipped, (iii) the number and weight of containers shipped, (iv) the shipper or packing sheet number with respect to such shipment, and (v) the date of such shipment.  Seller shall airmail, facsimile or send by other agreed means copies of shipping manifests for Common-Use Tools to Boeing.  Such manifests shall identify Common-Use Tool codes and part numbers, unit numbers of Common-Use Tools and the airplane effectivity of the Production Article contained in such Common-Use Tools.

 

Seller shall notify Boeing as soon as possible via fax, telecon, or as otherwise agreed to by the Parties of each POA requirement shipment.  Such notification shall include time and date shipped, quantity shipped, Order, pack slip, method of transportation and air bill if applicable.  Seller shall also notify Boeing immediately upon the discovery of any delays in shipment of any requirement and identify the earliest revised shipment possible.

 

32

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

9.2                               General Reports / Reviews

 

When requested by Boeing, Seller shall update and submit, as a minimum, monthly status reports or data requested by Boeing using a method mutually agreed upon by Boeing and Seller.  Boeing has the right to impose more frequent reporting on Seller to achieve program objectives, if necessary.

 

When requested by Boeing, Seller shall provide to Boeing a Product Definition and manufacturing milestone chart identifying the major engineering, purchasing, planning, Tooling and manufacturing operations for the applicable Product(s).

 

Program reviews will be held at Seller’s facility or Boeing’s facilities as requested by Boeing.  The topics of these reviews may include Product Definition status, raw material and component part status, manufacturing status, production status, Seller’s current and future capacity assessments, Boeing supplied components, inventory, Boeing’s requirements, Changes, forecasts and other issues pertinent to Seller’s performance under this SBP.  Reviews will allow formal presentations and discussion of status reports as set forth above.

 

Formal management reviews shall be held periodically by Boeing and Seller to evaluate total cost performance.  During these reviews, Seller shall present and provide actual cost performance data with respect to this SBP.  Boeing and Seller will also use these reviews to discuss production forecast information useful for Seller’s planning purposes.

 

All information normally provided under Section 8.0 of the “Administrative Agreement”, as identified in SBP Section 17.0, shall be provided by Seller.

 

9.3                               Cost Performance Visibility

 

Management reviews will be held by Boeing and Seller that will include total cost performance and schedule performance.  These reviews will be held on a regularly scheduled basis.

 

33

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

9.4                               Problem Reports

 

In the event of any anticipated or actual delay, including but not limited to delays attributed to labor disputes, that could impact Seller’s ability to deliver Product Definition or Products on time and otherwise in conformance with the terms of the Order, Seller shall promptly provide a detailed report, notifying Boeing Procurement Representative of program problems/issues.  The report shall contain a detailed description of the problem, impact on the program or affected tasks, and corrective/remedial action, with a recovery schedule.  Seller also promptly shall require each of its subcontractors supporting the Order to provide such notification to Seller concerning any such problems/issues of any subcontracted good or service to Seller.  Submittal of a report in no way relieves Seller of any obligations under the Order nor does it constitute a waiver of any rights and remedies Boeing may have with respect to any default, except as provided under GTA Section 14.0.

 

Problem reports shall be promptly submitted to the Boeing Procurement Representative within twenty-four (24) hours of a problem becoming known to Seller.  Status reports shall include, but are not limited to, the following topics:

 

A.                                    Product Definition maturity, schedule and performance updates;

 

B.                                    Delivery schedule updates, written recovery schedules, schedule impact issues and corrective action;

 

C.                                    Technical/manufacturing progress since the previous report period, including significant accomplishments, breakthroughs, problems and solutions;

 

D.                                    Identification of changes to key manpower or staffing levels;

 

E.                                     Identification of the critical events/activities expected within the next month and a discussion of potential risk factors;

 

F.                                      Progress on open action items, including closure dates;

 

G.                                    Purchased components and raw material status;

 

H.                                   Identification of quality issues and resolutions;

 

I.                                        Manufacturing and quality inspection progress of first article Products;

 

J.                                        Status on New Tooling design and fabrication, as applicable, until completion;

 

K.                                   Inventory status of castings and forgings procured by Seller (if applicable).

 

This SBP Section 9.4 applies in lieu of the 2nd sentence of GTA Section 4.1.

 

34

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

9.5                               Notice of Delay - Premium Effort

 

Where Seller has notified Boeing of a Program problem pursuant to SBP Section 9.4, Boeing may, at its sole discretion, direct Seller to use additional effort, including premium effort, and shall ship via air or other expedited routing in order to avoid or minimize delay to the maximum extent possible.  In the absence of delays caused by Boeing or its designees that have an impact on Seller’s delivery schedule, all additional costs resulting from such premium effort and/or premium transportation shall be paid by Seller.  Additional costs include, but are not limited to, all costs and expenses incurred by Boeing as a result of production line disruption attributable to Seller’s delayed delivery.  These requirements will not apply to Seller during the course of an Excusable Delay, as defined in GTA Section 14.0; however, at the conclusion of the Excusable Delay Seller will be responsible for all provisions of this Section 9.5.  Boeing’s rights under this SBP Section 9.5 are not exclusive, and any other rights provided in this contract, in law or equity, are reserved.

 

The SBP Section 9.5 applies in lieu of the 3rd sentence of GTA Section 4.1.

 

9.6                               Diversity Reporting Format

 

Seller shall use reasonable efforts to report to Boeing on a quarterly basis, starting from the date of this SBP award, all payments to small businesses, small disadvantaged business/minority business enterprises, women-owned small business and historically black colleges and universities and minority institutions in dollars and as a percentage of the contract price paid to Seller to date, proving the information shown on the Second Tier Report located in SBP Attachment 11.

 

9.7                               Planning Schedule

 

From time to time and at least quarterly, Boeing will provide information to facilitate Seller production forecasting.  Any such planning schedule, forecast, or quantity estimate provided by Boeing shall be used solely for informational purposes and shall not be binding on either party.

 

10.0                        BOEING ASSISTANCE

 

10.1                        Boeing Technical / Manufacturing Assistance Regarding Seller’s Nonperformance

 

Seller shall reimburse Boeing for all reasonable Boeing costs expended in providing Seller and/or Seller’s subcontractor’s technical or manufacturing assistance in resolving Seller nonperformance issues.  Such reimbursement may be offset against any pending Seller invoice, regardless of Boeing model or program; provided, that Boeing shall not be entitled to set off any such obligation, sum or amount against any invoices for payments, in the totality of $277 million, pursuant to Section 5.2.1 of this SBP.  Boeing’s rights under this clause are in addition to those available to Boeing for Seller’s nonperformance

 

35

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

issues, including those where a demand for an Assurance of Performance may be made under GTA Section 17.0.

 

10.2                        Other Boeing Assistance

 

In the event either Party believes that Seller requires Boeing technical (including engineering), manufacturing or training assistance for any activity within Seller’s area of responsibility under this SBP, Seller and Boeing shall negotiate the scope and price for such Boeing assistance.

 

11.0                        REPAIR AUTHORIZATION

 

11.1                        Boeing-Performed Work

 

In the event that any Product is rejected by Boeing pursuant to GTA Section 8.3, Seller hereby grants to Boeing the right, without prior authorization from Seller, to repair or rework such Product, or to have such Product repaired or reworked by a third party.  Such repair or rework by Boeing or such third party shall be deemed not to be inconsistent with Seller’s Ownership of such Product.

 

All reasonable costs and expenses of Boeing relating to such repair or rework shall be paid by Seller.  Such costs and expenses shall be an amount equal to Boeing’s reasonable estimated rework hours multiplied by Boeing’s then-current rate for labor and materials or the amount charged Boeing by any third party for performing such repair or rework.  Disruption costs and expenses shall be an amount equal to the portion of resultant planned installation time allocated for reasonable out-of-sequence work multiplied by Boeing’s then-current rate for labor.  These provisions shall also apply to incomplete work shipped to Boeing for completion (traveled work).

 

11.2                        Reimbursement for Repairs

 

Pursuant to this SBP Section 11.2, Boeing will either:  1) advise Seller quarterly, commencing on June 16, 2005, of costs and expenses incurred in the previous quarter for repair of Products; or 2) notify Seller, through Boeing’s automated systems, of costs and expenses incurred for each individual repair.  Seller shall notify Boeing within sixty (60) days after receipt of such advice of any significant errors detected by Seller in Boeing’s estimate of costs and expenses.  Boeing and Seller shall promptly resolve such errors.  Seller’s failure to so notify Boeing shall be deemed to be an acceptance of Boeing’s estimate of costs and expenses.  The same process shall apply where Seller is repairing products for Boeing.  Boeing shall be entitled to either (a) set off the amount of such costs and expenses against any amounts payable to Seller hereunder or (b) invoice Seller for the amount of such costs and expenses, and Seller shall pay the invoiced amount promptly upon receipt of a valid and correct invoice.

 

36

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

12.0                        OTHER REQUIREMENTS

 

12.1                        SUPPORTING DOCUMENTATION

 

12.1.1                                      Supporting Documentation and Priority

 

All Documents (as hereinafter defined) are by this reference incorporated herein and made a part of this SBP.  For purposes of this SBP, “Document” means all specifications, Drawings, Datasets, documents, publications and other similar materials, whether in a tangible or intangible form, as the same shall be revised from time to time, which relate to the design, manufacture, test, certification, delivery, support and sale of Products or the provision of services to Boeing pursuant to this SBP, including, but not limited to, the documents listed below, and any other documents specifically referred to in this SBP or in such other documents, but shall not include any SBP (including the attachments hereto or thereto), the GTA, the AA, the EAA, or any Order.  Reference in any Document to “Contractor” or “Seller” or “Supplier shall mean Seller for the purposes of this SBP.  In the event of any inconsistency between the terms and conditions of this SBP (not including any Documents) and the terms and conditions of any Document, the terms and conditions of the SBP shall control.  In the event any provisions of any Document or Documents conflict among themselves, Boeing will, on its own initiative or at the request of Seller, resolve such conflict (subject to the other provisions of this SBP and the GTA), revise such Document or Documents accordingly, and so notify Seller.  In resolving any such conflicts, this SBP shall be read as a whole and in a manner most likely to accomplish its purposes.

 

12.1.2                                      Revision of Documents

 

Subject to the terms of this SBP Section 12.1, Boeing may at any time revise any Document prepared by Boeing and Boeing shall provide Seller with revisions to Documents prepared by Boeing.  No such revision shall be effective with respect to Seller unless and until such revision is available to Seller.

 

37

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

12.1.3                                      Compliance

 

Seller shall promptly comply with the provisions of all Documents referenced in this SBP, the GTA and any Order, including any revisions Boeing may make thereto provided that no such revision shall be effective with respect to Seller unless and until such revision is available to Seller.

 

List of Certain Documents:

 

Item		No.		Title
A.		D1-4426		Boeing Approved Process Sources
B.		D6-82479		Boeing Quality Management System Requirements for Suppliers
C.		D37200		Skin Quality Acceptance Standards for Clad Aluminum Raw Material
D.		D6-9002		Appearance Control of Clad Aluminum Exterior Skins
E.		D953W001		General Operations Requirements Document For Suppliers — External/internal Suppliers/Program Partners
F.		D962W101		Supplier Change Management - Major Structures Program Partners
G.		D33200-1		Boeing Suppliers’ Tooling Document
H.		D6-17781		Material and Performance Evaluation of Designated Parts
I.		D6-1276		Control of materials and processes for designated parts and components of Boeing products
J.		D6T10898-1		Weight Compliance Requirement/Participant Contractors
K.		ATA 300		Specification for Packaging of Airline Supplies
L.		D37520-1, -1A, -1B		Supplier’s Part Protection Guides
M.		D6-51991		Quality Assurance Standard Reflecting Digital Product Definition for Boeing Suppliers Using CAD/CAM
N.		D6-81628		Shipping Label, Barcoded Preparation and Placement
O.		D6-83315		Product Support and Assurance Document (PSAD)
P.		D6-56199		Hardware and software compatibility requirements for suppliers use of BCAG CATIA native datasets as sole authority for design, manufacturing and inspection
Q.		D6-83267-201		BCA Engineering System and Process Transition and Cutover Plan to Support the Divestiture of the Wichita/Tulsa Division

 

12.2        Reserved

 

38

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

12.3                        ACCOUNTABILITY FOR TOOLING

 

Seller shall control and account for all Tooling in accordance with the provisions of Boeing Document D33200, “Boeing Suppliers’ Tooling Document” or, subject to Boeing review and approval (not to be unreasonably withheld or delayed), its equivalent or replacement.  This requirement shall apply to Boeing-Use Tooling until delivery thereof to Boeing and to Contractor-Use Tooling and Common-Use Tooling at all times prior to the removal thereof by Boeing or delivery to Boeing or Boeing’s designee pursuant to GTA Section 12.0, GTA Section 13.0 or SBP Section 33.0.  All Existing Tooling shall remain identified with its identification tag containing the Boeing Lifetime Serial Number of such Tooling.  Seller shall identify all New Tooling and any reworked or re-identified Tooling with an identification tag containing the Boeing Lifetime Serial Number of each such Tool.  Boeing Lifetime Serial Numbers may be provided to Seller by Boeing.

 

12.4                        CERTIFIED TOOL LISTS

 

Seller shall prepare a list or lists (“Certified Tool List”) in accordance with the D33200, “Boeing Suppliers’ Tooling Document” or, subject to Boeing review and approval (not to be unreasonably withheld or delayed), its equivalent or replacement, and such other information as Boeing shall request.  Seller shall prepare a separate Certified Tool List for (i) Contractor-Use Tools, (ii) Common-Use Tools, (iii) Casting/Extrusion Tools, (iv) each county in Kansas in which any such Tool is located, (v) each state in which any such Tool is located and (vi) each state in which any such Tool is first utilized.  Seller shall promptly submit each initial Certified Tool List to Boeing.  Seller shall subsequently submit from time to time as specified by Boeing new Certified Tool Lists to supplement the information contained in the initial Certified Tool Lists.

 

12.5                        BOEING FURNISHED TOOLING

 

With respect to Existing Tooling and New Tooling, and in the event Boeing furnishes Tooling to Seller, Seller shall conform to the standards and requirements of Document D33200-1.  Boeing shall notify Seller of any action required for discrepant Tooling.

 

12.6                        PACKAGING AND SHIPPING

 

In lieu of the provisions of GTA Section 7.0, the following SBP Sections shall address all packaging and shipping matters.

 

12.6.1                                      Packaging

 

The prices shown in SBP Attachment 1 include all packaging costs.  Seller shall package Product in accordance with the applicable requirements set forth in the Order.

 

39

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

12.6.2                                      Product Packaging

 

Except as expressly provided otherwise herein, all Products shall be prepared (cleaned, preserved, etc.) and packed for shipment in a manner reasonably acceptable to Boeing pursuant to Document D37520-1, -1A, & -1B, “Supplier’s Part Protection Guide,” to (i) comply with carrier regulations and (ii) prevent damage or deterioration during handling, shipment and outdoor storage at destination for up to ninety (90) days.  Packaging design shall be suitable for, and consistent with, the requirements and limitations of the transportation mode specified by Boeing.  Boeing specifically reserves the right, at Boeing’s discretion; to direct air shipment or other expedited shipping methods from the delivery point information in SBP Section 3.2.1 and Seller shall maintain a capability (where reasonably practicable) for meeting this requirement.  Seller shall submit two (2) copies of its proposed preparation procedure and packaging design to Boeing for approval (not to be unreasonably withheld or delayed) prior to the first Product delivery, and shall prepare and package each Product in accordance with the procedure and design approved by Boeing.  Notwithstanding any Boeing approval of Seller’s packaging design, Seller shall be solely liable for the manufacture of such packaging.  Any package (or unitized group of packages) weighing in excess of forty (40) pounds or otherwise not suited to manual handling shall be provided with skids to permit use of mechanical handling equipment.

 

Product packaging shall be in accordance with document D6-81628, “Shipping Label, Barcoded Preparation and Placement”, which is incorporated herein by reference.

 

12.6.3                                      Disposable Shipping Fixtures

 

Seller shall design, manufacture or procure, and test disposable shipping fixtures, as requested by Boeing, to support Orders.  The requirements for such items will be defined and identified by Boeing.  The design of any disposable shipping fixture shall be approved by Boeing (not to be unreasonably withheld or delayed) and conform to the standards and requirements of the applicable documents referred to in SBP Section 2.3.

 

12.6.4                                      Packing Sheet and Test Reports

 

The No. 1 shipping container in each shipment shall contain one (1) copy in English of (i) a packing sheet listing the contents of the entire shipment in accordance with Boeing’s written instructions and (ii) any test reports required by the specifications applicable to the Products being shipped.

 

For Non-United States shipments, prior to exportation of any Product, one (1) copy of the required customs invoice shall be enclosed in a waterproof envelope or wrapper, clearly marked “Customs Invoice,” securely attached to the outside of the No. 1 shipping container of each shipment.  Each customs invoice shall contain all of the information specified in SBP Section 27.

 

40

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

12.6.5                                      Additional Copies

 

Additional copies of packing sheets, test reports shall be furnished to Boeing in accordance with Boeing’s written instructions.

 

12.6.6                                      Price Inclusive

 

Unless otherwise specified in this SBP, the Prices for Products stated in this SBP include the cost with respect to such Products of preparation, packaging, crating, shipping fixtures and containers, container marking, furnishing of packing sheets and test reports, in accordance with this SBP.

 

12.7                        CYCLE TIME REQUIREMENTS

 

Boeing and Seller acknowledge that Boeing is committed to reduce Cycle Time.  Seller agrees to support Boeing in its commitment and to work with Boeing to develop mutually acceptable actions to support Cycle Time requirements as specified by Boeing to support the Program Airplane.  Upon Boeing’s request, Seller shall submit to Boeing a written plan describing how Seller would comply with the Cycle Time schedules, as specified by Boeing.

 

12.8                        COMPATIBILITY WITH ENGINEERING BUSINESS AND PRODUCTION SYSTEMS

 

Seller shall implement and maintain systems as required to ensure:  i) compatibility with Boeing systems; and ii) Seller’s performance under this SBP, including, but not limited to, business, manufacturing and engineering systems.

 

12.9                        ELECTRONIC ACCESS AND EXCHANGE OF DIGITAL PRODUCT DEFINITION

 

12.9.1                                      Exchange of Digital Product Definition between Boeing and Seller

 

Seller’s approval to receive and use computerized data shall be in accordance with documents D6-51991 “Quality Assurance Standards Reflecting Digital Product Definition for Boeing Suppliers using CAD/CAM”, D6-56199 “Hardware and Software Compatibility Requirements for Suppliers Use of BCAG CATIA Native Datasets as Authority for Design, Manufacturing and Inspection”, and D6-81491, “Authority and Usage of CATIA Native, CATIA IGES and PDM STEP Datasets.”

 

12.9.2                                      Systems/Software Compatibility between Boeing and Seller

 

After Seller is qualified to use the data exchange methods in accordance with Boeing Document D6-51991, “Quality Assurance Standards Reflecting Digital Product Definition for Boeing Suppliers Using CAD/CAM,” Seller shall maintain compatibility with Boeing’s systems in accordance with D6-55199 “Hardware and Software Compatibility Requirements for Suppliers Use of BCAG CATIA Native

 

41

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

Datasets as authority for Design, Manufacturing and Inspection.”  Boeing shall provide timely notification to Contractor of revisions to Boeing’s systems.

 

12.9.3                                      Electronic Access, Communications and Data Exchange via Telecommunications

 

Any electronic communications and data exchange via telecommunications between the Parties shall be pursuant to an electronic access agreement executed concurrently with this SBP.  Provided, that any amendments to the SBP, GTA, AA or EAA shall be communicated in writing and not solely by electronic communication.

 

Any electronic access to Boeing by Seller or Seller by Boeing shall be pursuant to an electronic access or similar agreement.

 

12.10                 PROGRAM MANAGER

 

Seller will assign a full-time program manager whose exclusive responsibility will be to oversee and manage Seller’s performance hereunder.  The assignment of such program manager will be subject to Boeing’s prior approval of such person’s resume, such approval not to be unreasonably withheld or delayed.

 

12.11                 SUBCONTRACTING

 

During the term of this SBP, Seller agrees to work with Boeing to identify and implement opportunities to introduce into its sub-contract base substantial changes in manufacturing procedures, manufacturing technology, process specifications, and alternate sourcing to lower cost subcontractors.  Seller and Boeing shall periodically review the implementation of these opportunities and evaluate the sharing of cost savings in accordance with SBP Section 7.6.

 

In addition to the provisions of GTA Section 28.1, for subcontracts in excess of [*****] in value, subcontracting activities are subject to Boeing review and approval.  Boeing approval is not to be unreasonably withheld or delayed.

 

This SBP Section 12.11 shall apply in lieu of the first sentence of the 2nd paragraph of GTA Section 28.0.

 

42

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

12.11.1                               Subcontractors and Suppliers

 

Notwithstanding anything to the contrary set forth in this SBP or the GTA, Seller shall not be in breach of this Agreement with respect to breaches solely attributable to subcontractors or suppliers and where (i) such breach relates to an obligation of Seller with respect to a subcontractor or supplier party to an agreement originally between Boeing and such subcontractor or supplier (an “Assigned Agreement”), (ii) such breach is solely attributable to an Assigned Agreement that prohibits or does not allow, Seller to require such supplier or subcontractor to comply with such obligation and (iii) Seller has used commercially reasonable efforts to persuade such subcontractor or supplier to comply with such obligation.  Provided, however, that (i) Seller will promptly notify Boeing whenever its management becomes aware that an Assigned Agreement prohibits or does not allow Seller to require a supplier or subcontractor to comply with such an obligation; (ii) Seller will use commercially reasonable efforts to obtain the agreement of such supplier or subcontractor to comply with the obligations of Seller to Boeing with respect to subcontractors or suppliers, or both, including reasonable payments therefore.  Provided, that this clause shall not apply (i) with respect to obligations that are mandated by law or regulation or safety of flight considerations, and (ii) after two (2) years from the date of this SBP.

 

12.12                 INTERNATIONAL COOPERATION

 

12.12.1                               Market Access and Sales Support

 

Seller agrees to work with Boeing to develop a lean global supply stream through application of shared strategies and tactics which support market access, and international business strategy.  Boeing and Seller agree to work together to identify countries where Seller may subcontract and manage associated supply chain in support of Boeing’s market access and international business strategy.  With respect to work covered by this SBP, and if directed by Boeing, Seller shall use commercially reasonable efforts to procure from subcontractors and manage associated supply chain, in countries selected by Boeing, goods and services having a value of not more than twenty-five-percent (25%) of the total Shipset Price of all undelivered Shipsets as of the date of such notice.  Such direction shall be at Boeing’s sole option and may occur at any time during the performance of this SBP; provided that Seller shall not be required to breach any then existing subcontract.  Seller may satisfy such requirement through purchases either related or not related to this SBP.  Seller shall document on SBP Attachment 12 all offers to contract and executed contracts with such subcontractors including the dollars contracted.  Seller shall provide to Boeing with an updated copy of SBP Attachment 12 for the six-month periods ending June 30 and December 31 of each year.  If Seller is directed by Boeing to subcontract any part of its Work Packages and Seller anticipates an increase to the Price of the Order as a result of such direction, Seller shall notify Boeing in writing within thirty (30) days of such direction.  If there is a cost or schedule impact, Boeing shall respond within thirty (30) days on whether Seller is to proceed.  In such cases if Boeing directs Seller to proceed and there is a

 

43

 

Confidential portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.  Omissions are designated by the symbol [*****].

 

Boeing/Spirit AeroSystems Inc.

Special Business Provisions (SBP)

MS-65530-0016 Amendment 8

 

resulting increase to the Price of the Order, then the Parties will mutually agree to an equitable adjustment in Price.

 

12.12.2                               Offset Assistance

 

Seller shall use commercially reasonable efforts to cooperate with Boeing in the fulfillment of any non-United States offset program obligation that Boeing may have accepted as a condition of the sale of a Boeing product.  In the event that Seller is either directed by Boeing pursuant to Section 12.12.1, or on its own solicits bids and/or proposals for, or procures or offers to procure any goods or services relating to the work covered by this SBP from any source outside of the United States, Boeing shall be entitled, to the exclusion of all others, to all industrial benefits and other “offset” credits which may result from such solicitations, procurements or offers to procure.  Seller shall take any commercially reasonable actions that may be required on its part to assure that Boeing receives such credits.  Seller shall document on SBP Attachment 12 all offers to contract and executed contracts with such subcontractors including the dollars contracted.  Seller shall provide to Boeing an updated copy of SBP Attachment 12 for the six-month periods ending June 30 and December 31 of each year.  The reports shall be submitted on the next 1st of August and the 1st of February respectively.  If Seller is directed by Boeing to subcontract any part of its Product(s) to a country in which Boeing has an offset obligation, and Seller anticipates an increase to the Price of the Product(s) as a result of such direction, Seller shall notify Boeing in writing within thirty (30) days of such direction.  If there is a cost or schedule impact, Boeing shall respond within thirty (30) days on whether Seller is to proceed.  In such cases if Boeing directs Seller to proceed and there is a resulting increase to the Price of the Product(s), then the Parties will mutually agree to an equitable adjustment in Price.  Attachment 12, Section 2 lists obligations in place at contract signing.

 

This SBP Section 12.12.2 applies in lieu of GTA Section 36.0.

 

12.13                 SUPPLY CHAIN INTEGRATION

 

12.13.1                               Supplier Banked Material (SBM) or Boeing Provided Details (BPD)

 

Material, including but not limited to raw material, standards, detail components and assemblies, furnished to Seller by Boeing (“Boeing Furnished Material”) shall be administered in accordance with a Bonded Stores Agreement.

 

Boeing Provided Details (including raw material, standards, detail components and assemblies) to Seller’s statement of work are listed in Attachment 16 with their associated purchase price and will be updated by Boeing periodically to reflect Boeing current Price.

 

Seller shall provide Boeing with required on-dock dates for all such material and BPD.  Seller’s notice shall provide Boeing with sufficient time to acquire the material.  If any parts will be supplied by Boeing then they will be identified in Attachment 16.

 

44