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                                                                    EXHIBIT 10.4
                                                                       [5/30/01]

                                    FORM OF
                             ROCKWELL COLLINS, INC.
                     ANNUAL INCENTIVE COMPENSATION PLAN FOR
                            SENIOR EXECUTIVE OFFICERS


1.  PURPOSE

         The purposes of the Annual Incentive Compensation Plan for Senior
Executive Officers (the Plan) are to provide a reward and an incentive to the
Corporation's Senior Executive Officers who have contributed and in the future
are likely to contribute to the success of the Corporation, to enhance the
Corporation's ability to attract and retain outstanding persons to serve as its
Senior Executive Officers and to preserve for the Corporation the benefit of
federal income tax deductions with respect to annual incentive compensation paid
to Senior Executive Officers.

2.  DEFINITIONS.

         (a) Applicable Earnings. For any fiscal year, the net income before
provision for income taxes. This measure shall be determined in accordance with
generally accepted accounting principles as consistently applied by the
Corporation and, if so determined by the Committee and to the extent permitted
under Code Section 162(m), adjusted to omit the effects of extraordinary items,
gain or loss on the disposal of a business segment, unusual or infrequently
occurring events and transactions and cumulative effects of changes in
accounting principles. Amounts charged or credited to earnings under the ICP
shall not be included in determining Applicable Earnings.

         (b) Board of Directors.  The Board of Directors of Rockwell Collins.

         (c) Code. The Internal Revenue Code of 1986, as amended from time to
time.

         (d) Committee. The Compensation and Management Development Committee
designated by the Board of Directors from among its members who are not eligible
to receive an award under the Plan.

         (e)  Corporation.  Rockwell Collins and its consolidated subsidiaries.

         (f) Covered Employees Performance Fund. An incentive compensation fund
for each fiscal year in which the Plan is applicable from which awards may be
made under the Plan, which shall be equal to 1.5% of the Applicable Earnings for
that fiscal year.

         (g) ICP. The Corporation's annual Incentive Compensation Plan for
executives other than those eligible under this plan.

         (h) Rockwell. Rockwell International Corporation, a Delaware
corporation.

         (i)  Rockwell Collins.  Rockwell Collins, Inc., a Delaware corporation.


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         (j) Senior Executive Officers. Rockwell Collins' chief executive
officer on the last day of each fiscal year and four other executive officers
(as defined in Rule 3b-7 under the Securities Exchange Act of 1934, as amended)
which the Committee shall designate on or before the last day of that fiscal
year. No member of the Corporation's Board of Directors who is not also an
employee of the Corporation shall be eligible to participate in the Plan.

3.       DETERMINATION OF APPLICABLE EARNINGS AND COVERED EMPLOYEES PERFORMANCE
         FUND; ALLOCATION OF POTENTIAL AWARDS.

         (a) After the end of each fiscal year, the independent certified public
accountants who audit the Corporation's accounts shall compute the Applicable
Earnings and the amount of the Covered Employees Performance Fund for that
fiscal year. Those computations shall be reported to the Board of Directors and
the Committee.

         (b) There shall be allocated from the Covered Employees Performance
Fund for each fiscal year potential awards to each of the Senior Executive
Officers equal to the following respective percentages of the Covered Employees
Performance Fund for that fiscal year:

         Chief Executive Officer - 35%
         Each Chief Operating Officer - 20%
         Each Other Senior Executive Officer - 15%

If there is more than one Chief Operating Officer, the percentages allocable to
each other Senior Executive Officer, excluding the Chief Executive Officer,
shall be reduced ratably so that the total amount of the Covered Employees
Performance Fund allocated to all Senior Executive Officers shall equal 100%.

4.  AWARDS.

         (a) After the computations, reports and allocations prescribed under
Section 3(a) have been made, the Committee shall determine, in its discretion,
the amounts, if any, allocated to the Senior Executive Officers pursuant to
Section 3(b) to be awarded from the Covered Employees Performance Fund for that
fiscal year; and the form, terms and conditions of awards, including whether and
to what extent awards shall be paid in installments.

         (b) Without limiting the generality of Section 4(a) the Committee may,
in its sole discretion, reduce the amount of any award made to any Senior
Executive Officer from the amount allocated under Section 3(b), taking into
account such factors as it deems relevant, including without limitation: (i) the
Applicable Earnings; (ii) other significant financial or strategic achievements
during the year; (iii) its subjective assessment of each Senior Executive
Officer's overall performance for the year; and (iv) information


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about compensation practices at other peer group companies for the purpose of
evaluating competitive compensation levels so that the Committee may determine
that the amount of the annual incentive award is within the targeted competitive
compensation range of the Corporation's executive compensation program. The
Committee shall determine the amount of any reduction in a Senior Executive
Officer's award on the basis of the foregoing and other factors it deems
relevant and shall not be required to establish any allocation or weighting
formula with respect to the factors it considers. In no event shall any Senior
Executive Officer's award under the Plan exceed the amount of the Covered
Employees Performance Fund allocated to a potential award to that Senior
Executive Officer.

         (c) The Committee shall have no obligation to disclose the full amount
of the Covered Employees Performance Fund for any fiscal year. Amounts allocated
but not actually awarded to a Senior Executive Officer may not be re-allocated
to other Senior Executive Officers or utilized for awards in respect of other
years.

         (d) The Corporation shall promptly notify each person to whom an award
has been made and pay the award in accordance with the determinations of the
Committee.

         (e) A cash award may be made with respect to a Senior Executive Officer
who has died. Any such award shall be paid to the legal representative or
representatives of the estate of such Officer.

         (f) No person who is eligible for an award under the Plan for any
fiscal year of the Corporation shall be eligible for an award under any other
annual management incentive compensation plan of any of the Corporation's
businesses for that fiscal year.

5.  FINALITY OF DETERMINATIONS.

         The Committee shall have the power to administer and interpret the
Plan. All determinations, interpretations and actions of the Committee and all
actions of the Board of Directors under or in connection with the Plan shall be
final, conclusive and binding upon all concerned. Any member of the Committee
who, at the time of any proposed award or at the time an award is made, is not
an "outside director" as defined for purposes of Code Section 162(m) shall
abstain from, and take no part in, the Committee's action on the award.

6.  AMENDMENT OF THE PLAN.

         The Board of Directors and the Committee shall each have the power, in
its sole discretion, to amend, suspend or terminate the Plan at any time, except
that:

         (a) No such action shall adversely affect rights under an award already
made, without the consent of the person affected; and


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         (b) Without approval of the shareowners of Rockwell Collins, neither
the Board of Directors nor the Committee shall (1) so modify the method of
determining the Covered Employees Performance Fund as to increase materially the
maximum amount that may be allocated to it or (2) after the first 90 days of any
fiscal year, amend the plan in a manner that would, directly or indirectly: (i)
change the method of calculating the amount allocated to the Covered Employees
Performance Fund for that year; (ii) increase the maximum award payable to any
Senior Executive Officer for that year; or (iii) remove the amendment
restriction set forth in this sentence with respect to that year.

7.  MISCELLANEOUS.

         (a) The Corporation shall bear all expenses and costs in connection
with the operation of the Plan.

         (b) The Corporation, the Board of Directors, the Committee and the
officers of the Corporation shall be fully protected in relying in good faith on
the computations and reports made pursuant to or in connection with the Plan by
the independent certified public accountants who audit the Corporation's
accounts.

8.  EFFECTIVE DATE.

         The Plan has been approved by the Board of Directors and shall be
submitted to the sole shareowner of Rockwell Collins, and, if approved, shall
become effective on the date on which Rockwell completes the pro rata
distribution of all the outstanding shares of Rockwell Collins common stock to
Rockwell's shareowners. The Plan shall also be submitted to the shareowners of
Rockwell Collins for approval at the first annual meeting of shareowners to be
held in 2002, and, (i) if approved by the shareowners shall continue in full
force and effect as provided herein, or (ii) if not approved by the shareowners,
no award may be paid under the Plan after the date of that meeting.



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