Exhibit 10-d-1


 


ROCKWELL
COLLINS, INC.


INCENTIVE
COMPENSATION PLAN


 


1.              Purposes


 


The purposes of the Incentive Compensation Plan (the “Plan”) are to
provide a reward and an incentive to employees of the Corporation in
managerial, staff or technical capacities who have contributed and in the
future are likely to contribute to the success of the Corporation and to
enhance the Corporation’s ability to attract and retain outstanding persons to
serve in such capacities.


 


2.              Definitions


 


For the purpose of the Plan, the following terms shall have the
meanings shown:


 


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


 


(b)           Committee.  The Compensation Committee of
Rockwell Collins or such other Incentive Compensation Committee as may be
designated by the Board of Directors, consisting of members of the Board of
Directors who are not eligible to participate in the Plan.


 


(c)           Designated
Senior Executives.  The CEO,
executives reporting directly to the CEO, persons designated as executive
officers by the Board and VP/GM of business units.


 


(d)           Corporation.  
Rockwell Collins and its subsidiaries.


 


(e)           Employees.
Persons in the salaried employ of the Corporation (including those on
authorized leave of absence) during some part of the fiscal year for which an
award is made.  Unless he or she is also
an employee of the Corporation, no member of the Board of Directors shall be
eligible to participate in the Plan.


 


(f)            Goals.  The financial goals and measures for the
enterprise established by the Committee for the Plan each fiscal year.


 


(g)           Rockwell Collins.  Rockwell Collins, Inc.


 


(h)           Senior
Executive Plan.  Rockwell
Collins’ Annual Incentive Compensation Plan for Senior Executive Officers.


 


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(i)            Target Incentive.  An estimated amount, expressed as a
percentage of an eligible Employee’s base earnings, that is targeted to be paid
after the end of the Corporation’s fiscal year to such eligible Employee if the
Goals are achieved at the targeted performance level.


 


3.              Annual Goals


 


(a)           Prior
to the beginning of the fiscal year, the Committee will consider key enterprise
measures; the weighting of the measures; and the threshold, target and maximum
performance required for payment of awards as part of the establishment of the
Goals for the new fiscal year.  The
Goals may include performance measures tied to business unit or shared service
measures for the Employees assigned to each unit.  These measures for the business units or share services will be
subject to approval by the Chief Executive Officer.


 


(b)           The
Committee may review the Goals during the fiscal year and make adjustments as
necessary for prior year performance or unforeseen current fiscal year events.


 


(c)           After
the end of the fiscal year, the Committee will review the Corporation’s level
of actual achievement of the key measures relative to the Goals for the year.


 


(d)           Eligible
employees will prepare and review with their supervisors individual goals for
each new fiscal year.  Performance
reviews on these individual goals between eligible Employees and their
supervisors may be held during the fiscal year and will be held after the end
of the fiscal year to evaluate individual performance.


 


4.              Awards


 


(a)            The
Target Incentive for each eligible Employee shall be established by the
Corporation and communicated to the Employee each fiscal year.  The Target Incentives for the Designated
Senior Executives shall be subject to approval by the Committee.


 


(b)            The
Chief Executive Officer of Rockwell Collins shall submit to the Committee,
within two and one-half months after the end of each completed fiscal year,
recommendations concerning awards for the completed fiscal year based on
enterprise and individual performance evaluation process contemplated in paragraph
3.


 


(c)            The
Committee, in its discretion, following its receipt of a recommendation
described in paragraph 4(b), shall determine for the immediately preceding
fiscal year (i) the extent to which awards, if any, shall be


 


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made; (ii) the total dollars paid or payable for the awards to all
eligible Employees under this Plan (excluding amounts payable to Designated
Senior Executives, which are independently approved by the Committee); and
(iii) the amount of any award payable to each Designated Senior Executive.  The CEO is delegated the authority to
determine other individual awards consistent with the Committee approved level
of funding and general category of participants, for persons below the level of
the Designated Senior Executives.


 


(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 an employee who has died.  Any such award shall be paid to the legal
representative or representatives of the estate of such employee.


 


(f)            No unpaid installment of any award shall bear interest.


 


(g)            No
employee who receives an award under the Senior Executive Plan for any fiscal
year of the Corporation shall be eligible for award under this Plan 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 or Chief Executive Officer under
or in connection with the Plan shall be final, conclusive and binding upon all
concerned.


 


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 no such action shall adversely affect rights under an award already
made, without the consent of the person affected.


 


7.              Miscellaneous


 


(a)           A
majority of the members of the Committee shall constitute a quorum.  The Committee may act by the vote of a
majority of a quorum at a meeting, or by a writing or writings signed by a
majority of the members of the Committee.


 


(b)           Notwithstanding
any other provisions of the Plan, if a Change of Control (as defined in Article
III, Section 13 (I) (1) of Rockwell Collins’ By-Laws)


 


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shall occur, then unless prior to the occurrence thereof the Board of
Directors shall determine otherwise by vote of at least two-thirds of its
members, all unpaid installments of any awards made under the Plan prior to
such Change of Control shall forthwith become due and payable.


 


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


 


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