Exhibit 10-f-3


 


ROCKWELL COLLINS 2005


DEFERRED COMPENSATION PLAN


 


Amended and Restated September 17, 2010


 

















 


AMENDED AND RESTATED


 


ROCKWELL COLLINS 2005

DEFERRED COMPENSATION PLAN


 


The
purpose of this Plan is to provide certain specified benefits to a select group
of management and highly compensated employees who contribute materially to the
continued growth, development and future business success of Rockwell Collins, Inc.
and its affiliates.  This Plan is
unfunded for tax purposes and for purposes of Title I of ERISA.


 


This
Plan is established effective as of January 1, 2005 for deferred
compensation that was earned and vested after December 31, 2004 under the
Rockwell Collins Deferred Compensation Plan and for compensation deferred for
the period subsequent to the date this Plan is established.  The Plan is hereby amended and restated on September 17,
2010.


 


ARTICLE I:  DEFINITIONS


 


1.010                 Account means one of the accounts established for the
purpose of measuring and determining a Participant’s interest in this Plan,
such accounts being the Participant’s Salary Deferral Account, Company Match
Account, Incentive Compensation Deferral Account, and Performance Award
Account.


 


1.020                 Account Balance means, with respect to each Participant, an
account in the records of the Company equal to the sum of the Participant’s:


 


(a)                                  Salary Deferral Account
balance;


 


(b)                                 Company Match Account
balance;


 


(c)                                  Incentive Compensation
Deferral Account balance; and


 


(d)                                 Performance Award Account
balance.


 


The
Account Balance (and each underlying balance making up such Account Balance) is
a bookkeeping entry only and will be utilized solely as a device for the
measurement and determination of the amounts to be paid to a Participant, or
his designated Beneficiary, pursuant to this Plan.


 


1.030                 Affiliate means:


 


(a)                                  any corporation incorporated
under the laws of one of the United States of America of which the Company
owns, directly or indirectly, eighty percent (80%) or more of the
combined voting power of all classes of stock or eighty 


 


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                                                percent (80%)
or more of the total value of the shares of all classes of stock (all
within the meaning of Code Section 1563);


 


(b)                                 any partnership or other
business entity organized under such laws, of which the Company owns, directly
or indirectly, eighty percent (80%) or more of the voting power or eighty
percent (80%) or more of the total value (all within the meaning of Code Section 414(c));
and


 


(c)                                  any other company deemed to
be an Affiliate by the Company’s Board of Directors.


 


1.040                 Annual
Company Match Amount for any Plan Year means the amount
determined in accordance with Section 3.030.


 


1.050                 Annual
Deferral Amount means that portion of a Participant’s Base Annual
Salary which a Participant elects to have deferred, in accordance with
Article III, for any one Plan Year. 
In the event of a Participant’s Retirement, Disability, death or a
Separation from Service prior to the end of a Plan Year, such year’s Annual
Deferral Amount will be the actual amount withheld prior to such event.


 


1.060                 Annual
Installment Method means a benefit payment method involving a
series of annual installment payments over the number of years selected by the
Participant in accordance with this Plan, which will be calculated in the
manner set forth in this Section. The Account Balance of the Participant will
be determined as of the close of business on the last business day of the
calendar year. The annual installment will be calculated by multiplying this
balance by a fraction, the numerator of which is one (1), and the denominator
of which is the remaining number of annual payments due the Participant.  (By way of example, if a Participant were to
elect a 10-year payment under the Annual Installment Method, the first payment
would be one-tenth (1/10) of the Account Balance, calculated as described in
this definition.  The following year, the
payment would be one-ninth (1/9) of the Account Balance, calculated as
described in this definition.)  Each
annual installment will be paid within the first sixty (60) days of the
calendar year following the applicable year.


 


1.070                 Base
Annual Salary means the Employee’s annualized salary rate for
services performed by such Employee on behalf of the Company or an Affiliate,
whether or not paid to him in such calendar year or included on the Federal
Income Tax Form W-2 for such calendar year, excluding bonuses,
commissions, overtime, fringe benefits, stock options, stock appreciation
rights, restricted stock, restricted stock units, relocation expenses,
incentive payments, Performance Awards, non-monetary awards, directors fees and
other fees, automobile and other allowances (whether or not such allowances are
included in the Employee’s gross income) paid to a Participant for employment
services rendered. Base Annual Salary will be calculated before reduction for
compensation voluntarily deferred or contributed by the Participant pursuant to
all qualified or non-qualified plans of the Company or any Affiliate and will
be calculated to include amounts not otherwise included in the Participant’s
gross income under Code Section 125, 129, 223, 402(e)(3), 402(h), 403(b) or
similar provision, pursuant to plans established by the Company or an 


 


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Affiliate;
provided, however, that all such amounts will be included in compensation only
to the extent that, had there been no such plan, the amount would have been
payable in cash to the Participant.


 


1.080                 Beneficiary means one or
more persons, trusts, estates or other entities, designated in accordance with Article XI
who or which are entitled to receive benefits under this Plan upon the death of
a Participant.


 


1.090                 Beneficiary
Designation Form means the written or
electronic form established from time to time by the Committee or its delegate
that a Participant completes, signs and returns to the Committee or its
delegate, in order to  designate one or
more Beneficiaries.


 


1.100                 Board
of Directors means the Company’s Board of Directors.


 


1.110                 Change
of Control means any of the following:


 


(a)                                  The acquisition by any
individual, entity or group (within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) (a “Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either
(1) the then outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (2) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however,
that for purposes of this subsection (a), the following acquisitions shall not
constitute a Change of Control:  (w) any
acquisition directly from the Company, (x) any acquisition by the Company,
(y) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company or (z) any acquisition pursuant to a transaction which complies
with clauses (1), (2) and (3) of subsection (c) of this Section 1.110;
or


 


(b)                                 Individuals who, as of the
date hereof, constitute the Board of Directors of the Company (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board of
Directors; provided, however, that any individual becoming a director
subsequent to that date whose election, or nomination for election by the
Company’s shareowners, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board of Directors; or


 


(c)                                  Consummation of a
reorganization, merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Company or the acquisition of assets of
another entity (a “Company Transaction”), in each case, 


 


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                                                unless,
following such Company Transaction, (1) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities immediately
prior to such Company Transaction beneficially own, directly or indirectly,
more than 50% of, respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may be, of the
corporation resulting from such Company Transaction (including, without
limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries)  in
substantially the same proportions as their ownership, immediately prior to
such Company Transaction of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (2) no Person (excluding
any employee benefit plan (or related trust) of the Company or of such
corporation resulting from such Company Transaction) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Company
Transaction or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Company Transaction and (3) at least a majority of the
members of the board of directors of the corporation resulting from such
Company Transaction were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board of Directors,
providing for such Company Transaction; or


 


(d)                                 Approval by the Company’s
shareowners of a complete liquidation or dissolution of the Company.


 


1.120                 Code means the
Internal Revenue Code of 1986, as from time to time amended.


 


1.130                 Committee means the
Compensation Committee of the Board of Directors.


 


1.140                 Company means Rockwell
Collins, Inc., a Delaware corporation.


 


1.150                 Company
Match Account means:


 


(a)                                  the sum of all of a
Participant’s Annual Company Match Amounts,


 


(b)                                 adjusted by amounts credited
or debited (gains or losses) thereto, in accordance with the provisions of Section 4.020(b),
as such provisions relate to such Company Match Account, and


 


(c)                                  reduced by any amount
debited thereon equal to the amount of all distributions made to the
Participant or his Beneficiary pursuant to this Plan which are related to such
Company Match Account.


 


1.160                 Deduction
Limitation means the following described limitation on a
benefit that may otherwise be distributable pursuant to the provisions of this
Plan.  Except as otherwise


 


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                                                provided, this
limitation will be applied to all distributions that are “subject to the
Deduction Limitation” under this Plan. 
If the Company determines in good faith prior to a Change of Control
that it is reasonably anticipated that any compensation paid to a Participant
for a taxable year of the Company would not be deductible by the Company solely
by reason of the limitation under Code Section 162(m), then, to the extent
deemed necessary by the Company to ensure that the entire amount of any
distribution to the Participant pursuant to this Plan prior to the Change of
Control is deductible, the Company may defer all or any portion of a
distribution under this Plan.  Any amounts
deferred pursuant to this limitation will continue to be credited/debited with
additional amounts in accordance with Section 4.020(b), even if such
amount is being paid out in installments. 
The amounts so deferred and amounts credited thereon will be distributed
to the Participant or his Beneficiary (in the event of the Participant’s death)
at the earlier of (a) the earliest possible date in the calendar year, as
determined in good faith by the Company, on which the deductibility of
compensation paid or payable to the Participant for the taxable year of the
Company during which the distribution is made will not be limited by Section 162(m),
or (b) the Participant’s Separation from Service or Retirement.
Notwithstanding anything to the contrary in this Plan, the Deduction Limitation
will not apply to any distributions made after a Change of Control.


 


1.170                 Deferral
Election means a written or electronic election made
pursuant to Article III by a Participant to defer receipt of a part of his
Base Annual Salary, or to defer receipt of all or a part of his Incentive
Compensation or any Performance Award.


 


1.180                 Deferral
Election Form means the form established
from time to time by the Committee or its delegate that a Participant
completes, signs and returns to the Committee or its delegate to make a
Deferral Election pursuant to Article III, in order to defer receipt of a
part of his Base Annual Salary or to defer receipt of all or a part of his
Incentive Compensation or any Performance Award.


 


1.190                 Disability has the
meanings set forth in Section 409A. 
Specifically, for purposes of this Plan and Section 409A, a
Participant will be considered to have incurred a Disability if the Participant
is:


 


(a)                              unable to engage in any
substantial gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months;
or


 


(b)                             by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of less than twelve
(12) months, receiving income replacement benefits for a period of not less
than three (3) months under an accident or health plan covering employees
of the Company or any Affiliate.


 


1.200                 Effective
Date means January 1, 2005.


 


1.210                 Eligible
Employee means:


 


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(a)                                  For the Plan Year commencing
January 1, 2005, any Employee who is employed in the United States by the
Company or any Affiliate whose Base Annual Salary for 2005 is greater than or
equal to $110,000.


 


(b)                                 For the Plan Year commencing
January 1, 2006, any Employee who is employed in the United States by the
Company or any Affiliate whose Base Annual Salary for 2006 is greater than or
equal to $120,000.


 


(c)                                  For Plan Years commencing on
or after January 1, 2007, any Employee who is employed in the United
States by the Company or an Affiliate whose Pay Grade on or after January 1,
2007 is equal to D5, E6, M0, or M5 through M9 before July 23, 2007, or is
equal to D5, E6, M0, M1, or M6 through M9 on or after July 23, 2007.


 


1.220                 Employee means any
person who is employed by the Company or by an Affiliate.


 


1.230                 ERISA means the Employee
Retirement Income Security Act of 1974, as from time to time amended.


 


1.240                 Exchange
Act means the Securities Exchange Act of 1934, as amended.


 


1.245                 409A
Change of Control means a “Change of Control Event” as defined
in Treasury Regulation Section 1.409A-3(i)(5)(i) and set forth in
Treasury Regulation Section 1.409A-3(i)(5)(v)-(vii), applying the default rules and
percentages set forth in such Treasury Regulation.


 


1.250                 Incentive
Compensation means any award payable to a Participant under an
incentive compensation plan sponsored by the Company or an Affiliate which, but
for a Deferral Election under the Plan, would be paid to the Participant and
considered to be “wages” for purposes of United States federal income tax
withholding, including without limitation any incentive compensation payable
pursuant to the Company’s incentive payment plan(s) and annual incentive
compensation plan(s) for Senior Executives, and any change of control
agreement entered into between the Company and a Participant.


 


1.260                 Incentive
Compensation Deferral means a deferral by a Participant of part or
all of his Incentive Compensation otherwise payable to him with respect to a
particular fiscal year of the Company. In the event of a Participant’s
Retirement, Disability, death or a Separation from Service prior the completion
of the fiscal year for which the Incentive Compensation is payable, such year’s
Incentive Compensation Deferral will be zero and any Incentive Compensation
payable with respect to such partial fiscal year will be paid at the same time
Incentive Compensation is paid to employees who did not elect to make a
deferral of Incentive Compensation.


 


1.270                 Incentive
Compensation Deferral Account means:


 


(a)                                  the sum of all of a
Participant’s Incentive Compensation Deferrals,


 


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(b)                                 adjusted by amounts credited
or debited (gains or losses) thereto, in accordance with the provisions of Section 4.020(b) which
are related to such Incentive Compensation Deferral Account, and


 


(c)                                  reduced by any amount
debited thereon equal to the amount of all distributions made to the
Participant or his Beneficiary pursuant to this Plan which are related to such
Incentive Compensation Deferral Account.


 


1.280                 Measurement
Funds means the investment vehicles offered under this
Plan which are identified and described in communication materials made
available to Participants by the Company.


 


1.290                 Named
Fiduciary means the Committee, its delegates, the Trustee
and, following the occurrence of a Change of Control, the third-party fiduciary
described in Section 14.020 of this Plan.


 


1.300                 Non-Qualified
Savings Plan means the Rockwell Collins 2005 Non-Qualified
Retirement Savings Plan, as amended from time to time.


 


1.310                 Participant means any Eligible
Employee:


 


(a)                                  who is an employee of
Rockwell Collins, Inc. (or one of its Affiliates);


 


(b)                                 who elects to participate in
the Plan;


 


(c)                                  who completes a
Participation Agreement and a Beneficiary Designation Form;


 


(d)                                 whose completed
Participation Agreement and Beneficiary Designation Form are accepted by
the Committee or its delegate;


 


(e)                                  who commences participation
in the Plan; and


 


(f)                                    who has not elected to
terminate participation in the Plan.


 


A
spouse or former spouse of a Participant will not be treated as a Participant
in the Plan or have an Account Balance under the Plan, even if the spouse or
former spouse has an interest in the Participant’s benefits under the Plan as a
result of applicable law or property settlements resulting from legal separation
or divorce.


 


Notwithstanding
any other provision of this Plan to the contrary, no Eligible Employee or any
other person, individual or entity shall become a Participant in this Plan on
or after the day on which a Change of Control occurs.


 


1.320                 Participation Agreement means a written or
electronic agreement, as may be amended from time to time, which is provided to
an Eligible Employee or Participant by the Committee or its delegate.  The Participation Agreement bearing the latest
date by the Committee or its delegate will supersede all previous such
Participation Agreements in their entirety and will govern the Eligible
Employee’s or Participant’s entitlement to 


 


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benefits
hereunder.  The terms of any such
Participation Agreement may be different for a particular Participant.


 


1.325                 Performance Award  means any Performance Share or Performance Unit awarded under (and as
defined in) the Company’s 2001 Long-Term Incentives Plan or 2006 Long-Term
Incentives Plan.


 


1.326                 Performance Award Deferral  means any deferral of a Performance Award made pursuant to and in
accordance with the terms of this Plan.  In the event of
a Participant’s Retirement, Disability, death or a Separation from Service
prior to the end of the performance period for which the Performance Award was
granted, such Performance Award Deferral will be zero and any Performance Award
payable with respect to such partial performance period will be paid at the
same time it is paid to employees who did not elect to make a deferral of a
Performance Award.


 


1.328                 Performance Award Account  means:


 


(a)                                  the sum of all of a Participant’s Performance Award Deferrals;


 


(b)                                 adjusted by amounts credited or debited (gains or losses) thereto, in
accordance with the provisions of Section 4.020(b), as such provisions
relate to such Performance Award Account; and


 


(c)                                  reduced by any amount debited thereon equal to the amount of all
distributions made to the Participant or his Beneficiary pursuant to this Plan
which are related to such Performance Award Account.


 


1.330                 Plan means this
Amended and Restated Rockwell Collins 2005 Deferred Compensation Plan, which is
evidenced by this instrument and by the forms associated with the said
instrument, as they may be amended from time to time.


 


1.340                 Plan
Year means each
twelve-month period ending on the last day of December.


 


1.350                 Pre-Retirement
Survivor Benefit means the benefit set forth in Article VII.


 


1.360                 Qualified
Savings Plan means the Rockwell Collins Retirement Savings Plan,
as amended from time to time.


 


1.370                 Retirement, Retire(s) or Retired means, with respect to
an Employee, “separation from service” with the Company and all of its
Affiliates, within the meaning of Section 409A, on or after the attainment
of age 55, other than for reasons of Disability or death.


 


1.380                 Retirement
Benefit means the benefit set forth in Article VI.


 


1.390                 Salary
Deferral Account means:


 


(a)                                  the sum of all of a
Participant’s Base Annual Salary deferral amounts,


 


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(b)                                 adjusted by amounts credited
or debited (gains or losses) thereto, in accordance with the provisions of Section 4.020(b),
as such provisions relate to such Salary Deferral Account, and


 


(c)                                  reduced by any amount debited
thereon equal to the amount of all distributions made to the Participant or his
Beneficiary pursuant to this Plan which are related to such Salary Deferral
Account.


 


1.400                 Section 409A means Section 409A of the Code and any regulations or other
guidance issued thereunder.


 


1.410                 Separation from Service means a “separation from service” from the Company and all of its
Affiliates, within the meaning of Section 409A, other than for reasons of
Retirement or death.


 


1.420                 Short-Term
In-Service Payout means the payout set forth in
Section 5.010 of the Plan.


 


1.430                 Specified Employee  has
the meaning set forth in Section 409A, as determined each year in
accordance with procedures established by the Company.


 


1.440                 Termination
Benefit means the benefit set forth in Article VIII.


 


1.450                 Third-Party
Administrator means an independent third party selected by the
Trustee and approved by the individual who, immediately prior to a Change of
Control, was the Company’s Chief Executive Officer or, if not so identified, the
Company’s highest ranking officer immediately prior to the Change of Control
(the “Ex-CEO”).


 


1.460                 Trust means the
master trust established by agreement between the Company and the Trustee,
which will be a grantor trust.


 


1.470                 Trustee means Wells
Fargo Bank N.A., or any successor trustee of the Trust described in Section 1.460
of this Plan.


 


1.480                 Unforeseeable
Financial Emergency has the meaning set forth in Section 409A.  Specifically, for purposes of this Plan and Section 409A,
an Unforeseeable Financial Emergency means a severe financial hardship to the
Participant resulting from an illness or accident of the Participant, the
Participant’s spouse, or a dependent (as defined in Section 152(a) of
the Code) of the Participant, loss of the Participant’s property due to
casualty, or other similar extraordinary or unforeseeable circumstances arising
as a result of events beyond the control of the Participant.  The requirements of this Section 1.480
are met only if, as determined under Section 409A, the amount distributed
with respect to the emergency does not exceed the amounts necessary to satisfy
such emergency plus amounts necessary to pay taxes reasonably anticipated as a
result of the distribution, after taking into account the extent to which such
hardship may be relieved through reimbursement or compensation by insurance or
otherwise by liquidation of the Participant’s assets (to the extent the
liquidation of such assets would not itself cause severe financial hardship).


 


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ARTICLE II:  PARTICIPATION


 


2.010                 Select
Group Defined.   Since
participation in the Plan is intended to be limited to a select group of
management and highly compensated Employees, the Plan is only available to
Eligible Employees of the Company and its Affiliates.


 


2.020                 Commencement
of Participation.   As a
condition to initial participation in this Plan, each Eligible Employee who
wishes to participate in the Plan will be required to complete, execute and
return to the Committee or its delegate a written or electronic Deferral
Election Form.


 


In
the case of such an Eligible Employee’s initial election to become a
Participant in a particular Plan Year (after taking into account the plan
aggregation rules of Section 409A), such documentation must be provided
by the Eligible Employee to the Committee or its delegate within thirty (30)
days following his first becoming an Eligible Employee.  Such initial election made shall apply only
with respect to amounts paid for services performed after the election and any
such initial election to defer Incentive Compensation must be approved by the
Vice President of Compensation and Benefits.


 


If
an Eligible Employee has met all enrollment requirements set forth in this Plan
and required by the Committee or its delegate (including returning all required
documents to the Committee or its delegate) in the time frames described in the
above subsections, that the Eligible Employee will become a Plan Participant as
soon as administratively practicable after he completes all such enrollment
requirements, except that, if an individual becomes an Eligible Employee during
the last three months of a calendar year, that Eligible Employee will become a
Plan Participant on the first day of the next calendar year.


 


If
an Eligible Employee fails to meet all such requirements within the period
required under this Section 2.020 that Eligible Employee will not be
entitled to participate in the Plan until the first day of a subsequent Plan
Year following the delivery to and acceptance by the Committee or its delegate
of the required documents. In addition, the Committee or its delegate will
establish from time to time such other enrollment requirements as it determines
in its sole discretion are necessary.


 


2.025                 Circumstances
in which Eligible Employee Initially Eligible Again.  An Eligible Employee who ceased to be an
Eligible Employee and who subsequently becomes an Eligible Employee again will
be treated as an Eligible Employee for the first time (i.e.,
entitled to make deferrals within the first 30 days of eligibility with respect
to services performed after the election as set forth in Sections 2.020 and
3.010(b)) if such employee satisfies either (a) or (b) below.


 


(a) 
After 24 Month Break. He or she was not an Eligible Employee or otherwise
eligible to participate in the Plan (except with respect to the accrual of
earnings on previously deferred amounts) at all times during the 24-month
period immediately preceding the date he or she again became an Eligible
Employee; or


 


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(b) After
Full Distribution.  All amounts he or
she previously deferred under the Plan  
have been fully paid, and on and before the date of the last such
payment he or she was not an Eligible Employee or otherwise eligible to
participate in the Plan for periods after the last payment.


 


2.030                 Termination of Participation and/or Deferrals.  If the Committee or its delegate determines
in good faith that a Participant no longer qualifies as a member of a select
group of management or highly compensated employees, as membership in such
group is determined in accordance with ERISA Sections 201(2), 301(a)(3) and
401(a)(1), the Committee will have the right, in its sole discretion, to
prevent the Participant from making future deferral elections.


 


ARTICLE III:  DEFERRAL AND COMPANY MATCH CREDITS


 


3.010                 Base Annual Salary Deferral.  Each Plan Participant will be permitted to
make an irrevocable election to defer (such Deferral Election to be made in
whole percentages) receipt of an amount equal to one percent (1%) through fifty
percent (50%) of his Base Annual Salary.


 


(a)                                  For each Plan Year, a
Participant, will be permitted, in his sole discretion, to make an irrevocable
election to defer Base Annual Salary for the following Plan Year and must
deliver such Deferral Election to the Company or an Affiliate on a new Deferral
Election Form before December 31st of the Plan
Year immediately preceding the Plan Year for which the deferral is
intended.  If no such Deferral Election Form is
timely delivered for a Plan Year, the Annual Deferral Amount will be zero for
that Plan Year.


 


(b)                                 Notwithstanding the
foregoing, any Participant who first becomes eligible to participate in the
Plan (taking into account the aggregation rules set forth in Section 409A)
within the first nine months of a Plan Year may, within thirty (30) days after
first becoming eligible to participate in the Plan (taking into account the
plan aggregation rules set forth in Section 409A), make an
irrevocable election to defer Base Annual Salary for the Plan Year commencing
as soon as administratively practicable following the Deferral Election.


 


(c)                                  During each Plan Year, the
Base Annual Salary Deferral Amount will be withheld from each regularly
scheduled Base Annual Salary payroll in equal amounts, as adjusted from time to
time for increases and decreases in Base Annual Salary.


 


3.020                 Incentive Compensation Deferral.  In addition to the Base Annual Salary
deferral described in the preceding Section, each Participant will be permitted
to irrevocably elect to defer receipt of an amount equal to one percent (1%)
through one hundred percent (100%), such Deferral Election to be made in whole
percentages, of the amount of any Incentive Compensation which he might be
awarded.


 


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(a)                                  In general, such Deferral
Election will be made on a Deferral Election Form and will apply to
Incentive Compensation to which the Participant might be entitled for the
fiscal year commencing immediately following such Deferral Election.


 


(b)                                 Except as otherwise
permitted by Section 409A, any election made pursuant to this Section 3.020
must be made by the close of the fiscal year immediately preceding the fiscal
year to which such Incentive Compensation relates commences.  Notwithstanding the foregoing, to the extent
permitted under Section 409A, if the Company in its sole discretion
determines that the Incentive Compensation (or any portion thereof) meets the
requirements for “performance-based compensation” within the meaning of Section 409A,
the Committee may permit such election to be made after the start of the fiscal
year for which the Incentive Compensation may be payable for the portion that
qualifies as performance-based compensation, but any such election must be made
at least six months prior to the end of the fiscal year for which  the Incentive Compensation may be
payable.  A Participant will not be
permitted to make an election under the preceding sentence unless the
Participant is in service with the Company or an Affiliate continually from the
later of the beginning of the fiscal year or the date performance criteria are
established through the date of the election and no such election may be made
with respect to compensation that has become readily ascertainable.


 


The
Incentive Compensation Deferral Amount will be withheld at the time the said
Incentive Compensation are or otherwise would be paid to the Participant.


 


3.025 Performance Award Deferral.  If permitted by the Committee or its delegate,
each Participant will be permitted to irrevocably elect to defer receipt of an
amount equal to one percent (1%) through one hundred percent (100%), such
Deferral Election to be made in whole percentages, of his Performance Shares
and/or Performance Units.


 


(a)                                  In general, such Deferral
Election will be made on a Deferral Election Form and will apply to
Performance Awards to which the Participant might be granted for the fiscal
year commencing immediately following such Deferral Election.


 


(b)                                 Except as otherwise
permitted by Section 409A, any election made pursuant to this Section 3.025
must be made by the close of the fiscal year immediately preceding the first
fiscal year for which the Performance Award is granted. Notwithstanding the
foregoing, to the extent permitted under Section 409A, if the Company in
its sole discretion determines that the Performance Award (or any portion
thereof) meets the requirements for “performance-based compensation” within the
meaning of Section 409A, the Committee may permit such election to be made
after the Performance Award is granted for the portion that qualifies as
performance-based compensation, but any such election must be made at least six
months prior to the end of the performance period to which the Performance
Award relates.  A Participant will not be
permitted to make an election under the preceding sentence unless the
Participant is in service with the Company or an Affiliate continually from the
later of the beginning of the performance period or


 


12

















 


                                                 the date performance criteria are established
through the date of the election, and no such election may be made with respect
to compensation that has become readily ascertainable.


 


The
Performance Award Deferral Amount will be withheld at the time the said
Performance Award otherwise would have been paid to the Participant.


 


3.030      Annual
Company Match Amount.  The
Plan provided certain matching contributions for Plan Years commencing prior to
January 1, 2006.  These
contributions will be governed by the terms of the Plan as in effect without
regard to the November 17, 2009 amendment.


 


For
Plan Years commencing on and after January 1, 2009, a Participant’s
Company Match Account will be credited with an amount equal to the “Company
Matching Contributions” that would have been made with respect to the
Participant under the Qualified Savings Plan and the Non-Qualified Retirement
Savings Plan for the Plan Year, but which was not made due to the Participant’s
election to participate in this Plan. 
The Annual Company Match Amount will be determined by applying the
applicable matching contribution percentage in the Qualified Savings Plan to
the Participant’s “Basic After-tax Contributions” and “Basic Pre-Tax
Contributions” for the corresponding period that would apply if “Base
Compensation” under the Qualified Savings Plan (as such terms are defined in
the Qualified Savings Plan) included the deferral of Base Annual Salary to this
Plan for the corresponding period, reduced by the amount of “Company Matching
Contribution” actually payable for such period under the terms of the Qualified
Savings Plan and the Rockwell Collins 2005 Non-Qualified Retirement Savings
Plan.


 


For
purposes of this calculation, (a) the Participant’s Qualified Savings Plan
deferral election shall be deemed to be the Qualified Savings Plan deferral
election on file for the Participant as of the last day of the year preceding
such Plan Year (or, in the case of a newly hired Participant who makes an election
to participate under the second paragraph of Section 2.020, based upon the
Participant’s Qualified Savings Plan deferral election in effect on, or soonest
made within thirty (30) days following, his first becoming an Eligible
Employee); (b) no change to the Participant’s written or electronic
deferral election to the Qualified Savings Plan during the applicable Plan Year
shall be considered (other than a permitted suspension of contributions due to
financial hardship); and (c) “Base Compensation” shall be determined
without regard to the Code Section 401(a)(17) limit.


 


The
Annual Company Match Amount which is attributable to a Participant’s deferral
of Base Annual Salary for a particular Plan Year will be calculated in the
first month of the immediately succeeding Plan Year and will be credited to the
Participant’s Company Match Account no later than January 31st of such succeeding Plan Year.  Subject to the provisions of the preceding
sentence:


 


13

















 


(a)                                  In the event of
a Participant’s Retirement or death, the Participant’s Company Match Account
will be credited with the Annual Company Match Amount for the Plan Year in
which he retires or dies; and


 


(b)                                 If a
Participant is not employed by the Company or an Affiliate as of the last day
of a Plan Year for any reason other than the Participant’s Retirement or death,
the Annual Company Match for such Plan Year will be zero.


 


Annual
Company Match Amounts with respect to Plan Years commencing on and after January 1,
2009, will be paid in accordance with the Participant’s Deferral Election
applicable to Base Annual Salary for the corresponding period.  Such Annual Company Match Amounts will be
available for withdrawal due to Unforeseeable Financial Emergency under Section 5.020.


 


In
accordance with Section 4.020 below, Annual Company Match Amounts with
respect to Plan Years commencing on and after January 1, 2009, will be
allocated in accordance with the Participant’s investment election, into one or
more of the Plan’s available Measurement Funds, that is in effect at the time
such Annual Company Match Amount is credited.


 


ARTICLE IV:  PLAN ACCOUNTS


 


4.010      Vesting.


 


(a)                                  A Participant will have a
one hundred percent (100%) vested interest in his Account Balance.


 


(b)                                 Notwithstanding anything to
the contrary contained in this Plan, in the event of a Change of Control, a
Participant’s Account Balance and any other interest of his under this Plan at
the time of the occurrence of the Change of Control will remain one hundred
percent (100%) vested, if such interest is already 100% vested at that time
and, if such interest is not one hundred percent (100%) vested at that time,
will immediately become one hundred (100%) vested.


 


4.020                 Crediting/Debiting of Account Balances.  In accordance with, and subject
to, the rules and procedures that are established from time to time by the
Committee or its delegate, in its sole discretion, amounts will be credited or
debited to a Participant’s Account Balance in the manner set forth in the
provisions of this Section.


 


(a)                                  Allocation to Measurement
Funds.  A Participant, in connection
with his initial Deferral Election in accordance with Section 3.010 or
3.020 above, will be permitted to also elect to have one or more Measurement
Funds used to determine the amounts to be credited to his Account Balance and
his election will continue to be in effect thereafter, unless it should be
changed in accordance with subsection (c). 
If it is determined by the Committee or its delegate that an investment
election made by a Participant is invalid or defective, the Participant’s
election, until duly corrected by him, will be deemed to have been made in
favor


 


14

















 


                                                of the Fidelity
Puritan® Fund or such other Measurement Fund as may be designated by the Vice
President of Compensation and Benefits from time to time.


 


(b)                                 Crediting or Debiting Method.  The performance (either positive or negative)
of each elected Measurement Fund will be determined by the Committee or its
delegate, based on the performance of the Measurement Funds themselves.  A Participant’s Account Balance will be
credited or debited on a daily basis based on the performance of each
Measurement Fund selected by the Participant, as determined by the Committee or
its delegate in its sole discretion, as though:


 


(1)                                  a Participant’s Account
Balance were actually invested in the Measurement Fund(s) selected by the
Participant as of the close of business on any business day, at the closing
price on that day;


 


(2)                                  the portion of the amount
actually deferred during any pay period was invested in the Measurement Fund(s) selected
by the Participant, in the percentages applicable on such day, no later than
the close of business on the first business day after the day on which such
amounts are actually deferred, at the closing price on such date; and


 


(3)                                  any distribution made to a
Participant that decreases such Participant’s Account Balance ceased being
invested in the Measurement Fund(s), in the applicable percentages, no earlier
than one business day prior to the distribution, at the closing price on such
date.


 


(c)                                  Transfers among Measurement
Funds.  The Participant will be
permitted to change, on a daily basis, any previous Measurement Fund election
or elections he has made with regard to his Account Balance.  The elections and changes to such elections
which a Participant makes pursuant to this subsection will be made by means of
any method (including any available telephonic or electronic method which is acceptable
to the Committee or its delegate at the time the election or change is made by
the Participant), and may be made at any time and will be effective as of the
New York Stock Exchange closing immediately following the making of that
election or change.


 


(d)                                 No Actual Investment.  Notwithstanding any other provision of this
Plan that may be interpreted to the contrary, the Measurement Funds are to be
used for measurement purposes only, and a Participant’s election of any such
Measurement Fund, the allocation to his Account Balance thereto, the
calculation of additional amounts and the crediting or debiting of such amounts
to a Participant’s Account Balance will not be considered or construed in any
manner as an actual investment of his Account Balance in any such Measurement
Fund.  In the event that the Company or
the Trustee, in its own discretion, decides to invest funds in any or all of
the Measurement Funds, no Participant will have any rights in or to such investments
themselves.  Without limiting the
foregoing, a Participant’s Account Balance will at all times be a bookkeeping
entry only and will not represent any 


 


15

















 


                                                investment made
on his behalf by the Company or the Trust. 
The Participant will at all times remain an unsecured creditor of the
Company.


 


(e)                                  Company Reservation of
Rights.  Consistent with the preceding
sentence, nothing to the contrary in this Plan or any of its forms or
communication material, nor in any document associated with the Trust, should
be interpreted or understood to provide Participants or their Beneficiaries
with any current, direct rights with respect to the assets held by the Trustee
in the Trust.


 


4.030      FICA and
Other Taxes.


 


(a)                                  Deferral Amounts.  For each Plan Year, the Company or any
Affiliate employing the Participant will withhold from that portion of the
Participant’s Base Annual Salary, Incentive Compensation, or Performance
Award which is being deferred the Participant’s share of FICA and other
employment taxes on such deferrals.


 


(b)                                 Annual Company Match Amounts.  For each Plan Year in which Company Match
Amount is credited to the Participant, the Company or any Affiliate employing
the Participant will withhold the Participant’s share of FICA and other employment
taxes on the amount credited to such Company Match Account.


 


(c)                                  Distributions.  The Company or any Affiliate employing the
Participant, or the Trustee of the Trust, will withhold from any payments made
to a Participant under this Plan all federal, state and local income,
employment and other taxes required to be withheld in connection with such
payments, in amounts and in a manner to be determined in the sole discretion of
the Company and the trustee of the Trust.


 


ARTICLE V: 
SHORT-TERM IN SERVICE PAYOUTS, IN-SERVICE WITHDRAWALS AND 409A
CHANGE OF CONTROL PAYMENTS


 


5.010                 Short-Term In-Service Payouts.  In connection with each election to defer, a
Participant may irrevocably elect to receive a future Short-Term In —Service
Payout from the Plan with respect to such Salary Deferral Account, Company
Match Account, Incentive Compensation Deferral Account, and Performance
Award Account.  Any such election must be
made no later than (i) December 31st of the Plan Year immediately
preceding the Plan Year to which the Base Annual Salary deferral relates and (ii) the
close of the fiscal year immediately preceding the first fiscal year to which
the Incentive Compensation or Performance Award relates; provided, however,
that if the Incentive Compensation or Performance Award qualifies as “performance-based
compensation” within the meaning of Section 409A, the Committee may permit
such election to be made at any time that is at least six months prior to the
end of the performance period to which the Incentive Compensation or
Performance Award, as the case may be, relates.


 


(a)                                  Subject to the Deduction
Limitation, the said Short-Term In-Service Payout will be a lump sum payment in
an amount that is equal to the sum of the deferrals and


 


16

















 


                                                Annual Company
Match Amount, as adjusted for amounts credited or debited in the manner
provided in Section 4.020 on that amount.


 


(b)                                 Subject to the Deduction
Limitation and the other terms and conditions of this Plan, each Short-Term In-Service
Payout elected will be paid out during a sixty (60) day period commencing
immediately after the last day of any Plan Year designated by the Participant
that is at least three Plan Years after the Plan Year in which the deferral
occurred.  By way of example, if a
three-year Short-Term In-Service Payout is elected for amounts that are
deferred in the Plan Year commencing January 1, 2008, the three-year
Short-Term In-Service Payout would become payable during a sixty (60) day
period commencing January 1, 2012.


 


(c)                                  Should an event occur that
triggers a benefit under Article VI, VII, or VIII any deferrals, plus
amounts credited or debited thereon, that is subject to a Short-Term In-Service
Payout election under this Section will not be paid in accordance with
this Section, but will instead be paid in accordance with the other applicable
Article.


 


5.020                 Withdrawal for Unforeseeable Financial Emergencies.  In the event that any
Participant should encounter an Unforeseeable Financial Emergency, such Participant
may:


 


(a)                                  petition the Committee or
its delegate to suspend any deferrals required to be made on his behalf, and/or


 


(b)                                 petition the Committee or
its delegate to permit him to receive a partial or full payout from the
Plan.  Such a payout will not exceed the
lesser of:


 


(1)                                  the Participant’s Account
Balance, calculated as if the Participant were receiving a Termination Benefit;
and


 


(2)                                  the amount reasonably needed
to satisfy the Unforeseeable Financial Emergency.


 


If,
subject to the sole discretion of the Committee or its delegate, the petition
for a suspension and/or payout is approved, suspension will take effect on the
date of approval and any payout will be made within sixty (60) days of the
date of approval.  The payment of any
amount under this Section will not be subject to the Deduction Limitation.


 


5.030                 409A Change of Control Payments.  Notwithstanding any other
provision of this Plan to the contrary, a Participant may elect to have his
interest in and to Accounts hereunder paid in a lump sum, in the event of the
occurrence of a 409A Change of Control, subject to the following:


 


(a)                                  To be effective, the
election of a Participant pursuant to this Section 5.030 must be made in
writing and filed with the Committee or filed electronically on or before the
latest of (1) December 31, 2008, (2) December 31st of the
calendar year immediately preceding the first Plan Year with respect to which
the Participant


 


17

















 


has
deferred Base Annual Salary, Incentive Compensation, Performance Award and/or Annual Company Match Amounts, or (3) the
thirtieth day after initial eligibility for the Plan or any similar Company
deferred compensation plan (in which case such election shall apply only with
respect to amounts earned after such election is filed). 
Such election shall apply to the entire Account Balance and,
except as otherwise provided in Section 10.020, shall be irrevocable.


 


(b)                                 Any lump sum payments which
are to be made on account of the occurrence of a 409A Change of Control shall
be made within forty-five (45) days following such 409A Change of Control.


 


(c)                                  Notwithstanding the
foregoing, if the Participant does not file a timely written or electronic
election in accordance with Section 5.030(a) to receive or not
receive his or her Accounts under the Plan in a lump sum upon a 409A Change of
Control, then such Participant’s Accounts under the Plan will automatically be
paid in a lump sum upon a 409A Change of Control.


 


ARTICLE VI: RETIREMENT BENEFITS


 


6.010                 Retirement Benefit.  Subject to the Deduction Limitation, a
Participant who Retires will receive, as a Retirement Benefit, his Account
Balance.


 


6.020                 Payment of Retirement Benefit.  A Participant, in connection with his
commencement of participation in the Plan, may elect to receive the Retirement
Benefit in a lump sum or pursuant to an Annual Installment Method of periods of
from two (2) through fifteen (15) years. 
The Participant may change any election he has previously made to a
different payout period permitted hereunder, but only one such a change may be
made with respect to any single election.  
Such change will be accomplished by the Participant notifying the
Committee or its delegate, but such change will not be valid, unless it has
been submitted by the Participant and accepted by the Committee or its delegate
(in the Committee’s or delegate’s discretion) in accordance with the rules set
forth in Section 10.020.  The
Participant’s most recent election accepted by the Committee or its delegate
shall govern the payout of the Retirement Benefit.  If a Participant does not make any election
with respect to the payment of the Retirement Benefit, then such benefit shall
be payable in a lump sum.  The lump sum
payment shall be made, or installment payments shall commence, within the first
sixty (60) days following the Plan Year in which the Participant
Retires.  Any payment made shall be
subject to the Deduction Limitation.


 


6.030                 Death Prior to Completion of Retirement Benefit.  If a Participant dies after
Retirement distributions commence but before the Retirement Benefit is paid in
full, the Participant’s unpaid Retirement Benefit payments shall continue and
shall be paid to the Participant’s Beneficiary over the remaining number of
years and in the same amounts and form and time of payment as that benefit
would have been paid to the Participant had the Participant survived.


 


18

















 


ARTICLE VII: PRE-RETIREMENT SURVIVOR BENEFIT


 


7.010                 Pre-Retirement Survivor Benefit.  Subject to the Deduction Limitation, the
Participant’s Beneficiary shall receive a Pre-Retirement Survivor Benefit equal
to the Participant’s Account Balance if the Participant dies before he Retires
or experiences a Separation from Service.


 


7.020                 Payment of Pre-Retirement Survivor Benefit.  Any Pre-Retirement Survivor
Benefit payable pursuant to Section 7.010 will be paid in a lump sum
within the first sixty days of the calendar year following the year which
includes the Participant’s death.  Such lump
sum payment will be paid to the Participant’s beneficiary as designated on the
Beneficiary Designation Form most recently filed in writing or
electronically with the Committee or its delegate prior to the Participant’s
death.  Any such payment made will be
subject to the Deduction Limitation.


 


ARTICLE VIII: 
SEPARATION FROM SERVICE BENEFIT


 


8.010                 Separation from Service Benefit.  Subject to the Deduction Limitation, the
Participant will receive a Separation from Service Benefit, which will be equal
to the Participant’s Account Balance if a Participant experiences a Separation
from Service prior to his Retirement or death.


 


8.020                 Payment of Separation from Service Benefit.  The form of payment of a
Participant’s Account Balance, if such payment is due to the Participant’s
Separation from Service, will in all cases be a lump sum in cash.  Payment of such Separation from Service
Benefit will be paid within the first sixty (60) days of the calendar year
immediately following the Plan Year which includes the Participant’s Separation
from Service.


 


ARTICLE IX: 
DISABILITY WAIVER AND BENEFIT


 


9.010                 Disability Waiver.


 


(a)                                  Waiver of Deferral.  A Participant who is determined by the
Committee or its delegate to be suffering from a Disability will be excused
from fulfilling deferrals that would otherwise have been withheld from his Base
Annual Salary, Incentive Compensation or Performance Awards after he is
determined to have suffered a Disability. 
During the period of Disability, such Participant will continue to be
considered a Participant for all other purposes of this Plan.


 


(b)                                 Return to Work.  If a Participant returns to employment after
a Disability ceases, subject to Section 409A, the Participant may continue
to defer amounts for the remainder of the Plan Year and for every Plan Year
thereafter while he is a Participant in the Plan.


 


ARTICLE X:  SECTION 409A


 


10.010          Section 409A
Generally.  This Plan
is intended to comply with Section 409A. 
Notwithstanding any other provision of this Plan to the contrary, the
Company makes no representation that this Plan or any amounts payable or
benefits provided under this Plan


 


19

















 


                                                will be exempt
from or comply with Section 409A and makes no undertaking to preclude Section 409A
from applying to this Plan.


 


10.020          Changes
in Elections.  Notwithstanding any other
provision of this Plan to the contrary, once an election is made pursuant to
this Plan it shall be irrevocable unless all of the following conditions are
met:


 


(a)                                  the election to change the time or form of payment will not become
effective until the date that is one year after the date on which the election
to make the change is made;


 


(b)                                 except with respect to any payment to be made upon the death of a
Participant, the form of payment, as changed, will defer payment for the Plan
Year for a minimum of five (5) years later than the date that payment of
such Participant’s Account Balances would otherwise have been made under this
Plan; and


 


(c)                                  with respect to a payment that is to be made upon a fixed date or
schedule of dates, the election to change the form of payment is made no less
than twelve (12) months before the date that payment of the Account Balances
for that Plan Year was otherwise scheduled to be paid.


 


For purposes of Section 10.020(b) and
(c), all payments scheduled to be made in the form of installments attributable
to a particular Plan Year will be treated as scheduled to be made on the date
that the first installment of such series of payments is otherwise scheduled to
be made (that is, the installments will be treated as an entitlement to a
single payment for purposes of Section 409A).


 


Once a change in election is made and recorded
pursuant to the Plan, such election will be irrevocable unless all of the
conditions of this Section 10.020 are met. 
Notwithstanding any other provision of this Plan to the contrary, a
Participant will be permitted to make only one change in election pursuant to
this Section 10.020 with respect to the Account Balances to which such
election relates.


 


10.030          Six
Month Wait for Specified Employees.  Notwithstanding any other provision of this
Plan to the contrary, to the extent that any Account payable under the Plan
constitute an amount payable upon Separation from Service or Retirement to any
Participant under the Plan who is deemed to be a Specified Employee, then such
amount will not be paid during the six (6) month period following such
Separation from Service or Retirement. 
If the provisions of this Section 10.030 apply to a Participant who
incurs a Separation from Service or Retirement, within the first six (6) months
of the calendar year, then such amount will be paid within the first sixty (60)
days following the close of the calendar year which includes the Participant’s
Separation from Service or Retirement. 
If the provisions of this Section 10.030 apply to a Participant who
incurs a Separation from Service or Retirement within the last six (6) months
of the calendar year, then such amount will be paid within the first sixty (60)
days after June 30th of the calendar year following the year in which
includes the Participant’s Separation from Service or Retirement.


 


20














 


ARTICLE XI: 
BENEFICIARY DESIGNATION


 


11.010          Beneficiary.  Each Participant will have the
right, at any time, to designate his Beneficiary or Beneficiaries (both primary
and contingent) to receive any benefits payable under the Plan to a beneficiary
upon the death of a Participant.  The
Beneficiary designated under this Plan may be the same as or different from the
Beneficiary designation under any other plan of an Employer in which the
Participant participates.


 


11.020          Beneficiary
Designation or Change of Designation.  A Participant will be permitted to designate
his Beneficiary by completing and signing a written or electronic Beneficiary
Designation Form, and returning it to the
Committee or its delegate.  A Participant
will have the right to change a Beneficiary by completing, signing and
otherwise complying with the terms of the written or electronic Beneficiary
Designation Form and the Committee’s or its delegate’s rules and
procedures, as in effect from time to time. 
Upon the acceptance by the Committee or its delegate of a new written or
electronic Beneficiary Designation Form, all Beneficiary designations
previously filed will be canceled.  The
Committee or its delegate will be entitled to rely on the last written or
electronic Beneficiary Designation Form filed by the Participant and
accepted by the Committee or its delegate prior to the Participant’s death.


 


11.030          Spousal
Consent Required.  If a Participant names someone other than his
spouse as a Beneficiary, a spousal consent, in the written or electronic form
designated by the Committee or its delegate, must be signed by that Participant’s
spouse and returned to the Committee or its delegate.


 


11.040          Acknowledgment.  No designation or change in
designation of a Beneficiary will be effective until received and acknowledged
by the Committee or its delegate.


 


11.050          Absence of
Valid Beneficiary Designation.  If a Participant fails to designate a
Beneficiary as provided in the preceding Sections or, if all designated
Beneficiaries predecease the Participant or die prior to complete distribution
of the Participant’s benefits, then the Participant’s designated Beneficiary
will be deemed to be his surviving spouse. 
If the Participant has no surviving spouse, the benefits remaining under
the Plan to be paid to a Beneficiary will be payable to the executor or
personal representative of the Participant’s estate.


 


11.060          Doubt as to
Beneficiary.  Subject to and in accordance with Section 409A,
if the Committee or its delegate has any doubt as to the proper Beneficiary to
receive payments pursuant to this Plan, the Committee or its delegate will have
the right, exercisable in its discretion, to withhold such payments until this
matter is resolved to the Committee’s or the delegate’s satisfaction.


 


11.070          Discharge
of Obligations.  The payment of benefits under the Plan to a
Beneficiary will fully and completely discharge the Company and all of its
Affiliates and the Committee from all further obligations under this Plan with
respect to the Participant, and that Participant’s participation in this Plan
will terminate upon such full payment of benefits.


 


21

















 


ARTICLE XII: 
LEAVE OF ABSENCE


 


12.010          Paid Leave
of Absence.  Subject to Section 409A, if a
Participant is authorized by the Company or the Affiliate employing the
Participant for any reason to take a company-paid leave of absence, the
Participant will continue to be considered to be an Eligible Employee and
deferrals will continue to be withheld during such paid leave of absence.  Notwithstanding the foregoing, such
withholding will cease on the date such paid leave of absence is deemed to be a
Separation from Service for purposes of Section 409A.


 


12.020          Unpaid
Leave of Absence.  Subject to Section 409A, if a
Participant is authorized by the Company or the Affiliate employing the
Participant to take an unpaid leave of absence, the Participant will continue
to be considered an Eligible Employee and the Participant will not be permitted
to make deferrals until the Participant returns to a paid employment
status.  Upon such return, deferrals will
resume for the remaining portion of the Plan Year in which the return occurs,
based on the deferral election, if any, made for that Plan Year. If no election
was made for that Plan Year, no deferral will be withheld.


 


ARTICLE XIII: 
TERMINATION, AMENDMENT OR MODIFICATION


 


13.010          Termination.  Although the Company and each Affiliate
anticipates that it will continue the Plan for an indefinite period of time,
there is no guarantee that the Company or any such Affiliate will continue the
Plan or will not terminate the Plan at any time in the future.  Accordingly, the Company reserves the right
to discontinue sponsorship of the Plan and/or to terminate the Plan at any time
with respect to any or all of its participating Employees, by action of the
Board of Directors.  Notwithstanding the
foregoing, except as otherwise permitted by Section 409A, in the event of
any termination of the Plan, any amounts payable under the Plan shall continue
to be paid in accordance with the terms of the Plan in effect on the date of
Plan termination.


 


13.020          Amendment.  The Company may, at any time,
amend or modify the Plan in whole or in part by action of the Board of
Directors; provided, however, that:


 


(a)                                  no amendment or modification
shall be effective to decrease or restrict the value of a Participant’s Account
Balance in existence at the time the amendment or modification is made,
calculated as if the Participant had experienced a Separation from Service as
of the effective date of the amendment or modification or, if the amendment or
modification occurs after the date upon which the Participant was eligible to
Retire, the Participant had Retired as of the effective date of the amendment
or modification;


 


(b)                                 no amendment or modification
of this Section 13.020 Plan shall be effective; and


 


(c)                                  the amendment or
modification of the Plan shall not affect any Participant or Beneficiary who
has become entitled to the payment of benefits under the Plan as of the date of
the amendment or modification.


 


22

















 


13.030          Effect of
Payment.  The full payment of all applicable benefits
hereunder shall completely discharge all obligations to a Participant and his
Beneficiaries under this Plan.


 


ARTICLE XIV: 
ADMINISTRATION


 


14.010          Committee
Duties.  Except as otherwise provided in this Article,
this Plan will be administered by the Committee and its delegates.  Members of the Committee may be Participants
under this Plan.  The Committee will also
have the discretion and authority to:


 


(a)                                  make, amend, interpret, and
enforce all appropriate rules and regulations for the administration of
this Plan, and


 


(b)                                 decide or resolve any and
all questions including interpretations of this Plan, as may arise in
connection with the Plan.


 


Any
individual serving on the Committee who is a Participant will not be permitted
to vote or act on any matter relating solely to himself or herself.  When making a determination or calculation, the
Committee will be entitled to rely on information furnished by a Participant or
the Company.


 


14.020          Administration
Upon Change of Control.  Notwithstanding any other provision of this
Plan to the contrary, upon and after the occurrence of a Change of Control, the
Plan will be administered by the Third-Party Administrator.  The Third-Party Administrator so selected
will have the discretionary power to determine all questions arising in
connection with the administration of the Plan and the interpretation of the
Plan and Trust including, but not limited to, benefit entitlement
determinations; provided, however, upon and after the occurrence of a Change of
Control, such administrator will have no power to direct the investment of Plan
or Trust assets or select any investment manager or custodial firm for the Plan
or Trust.


 


Upon
and after the occurrence of a Change of Control, the Company will be required
to:


 


(a)                                  pay all reasonable
administrative expenses and fees of the Third-Party Administrator;


 


(b)                                 indemnify the Third-Party
Administrator against any costs, expenses and liabilities including, without
limitation, attorney’s fees and expenses arising in connection with the
performance of such administrator hereunder, except with respect to matters
resulting from the gross negligence or willful misconduct of the said
administrator or its employees or agents; and


 


(c)                                  supply full and timely
information to the Third-Party Administrator on all matters relating to the
Plan, the Trust, the Participants and their Beneficiaries, the Account Balances
of the Participants, the date of circumstances of the Retirement, Disability,
death or Separation from Service of the Participants, and such other pertinent
information as the Third-Party Administrator may reasonably require.


 


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Upon
and after a Change of Control, the Third-Party Administrator may not be
terminated by the Company and may only be terminated (and a replacement
appointed) by the Trustee, but only with the approval of the Ex-CEO.


 


14.030          Agents.  In the administration of this
Plan, the Committee may, from time to time, employ agents and delegate to them
such administrative duties as it sees fit (including acting through a duly
appointed representative) and may from time to time consult with counsel who
may be counsel to the Company or any Affiliate. 
The Company’s Vice President, Compensation and Benefits will at all
times, unless otherwise determined by the Committee, be deemed to be and shall
be specifically referred to herein as the Committee’s delegate for all purposes
herein.


 


14.040          Binding
Effect of Decisions.  The decision or action of the Committee or
its delegate with respect to any question arising out of or in connection with
the administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder will be final and conclusive and binding upon
all persons having any interest in the Plan.


 


14.050          Indemnity
of Committee.  The Company and its Affiliates shall indemnify
and hold harmless the members of the Committee, any Employee to whom the duties
of the Committee may be delegated, and the Committee or its delegate against
any and all claims, losses, damages, expenses or liabilities arising from any
action or failure to act with respect to this Plan, except in the case of
willful misconduct by the Committee, any of its members, or such Employee.


 


14.060          Employer
Information.  To enable the Committee and its delegates to
perform their functions, the Company will supply full and timely information to
the Committee and delegates on all matters relating to the compensation of its
Participants, the date and circumstances of the Retirement, Disability, death
or circumstances of the Retirement, Disability, death or Separation from
Service of its Participants, and such other pertinent information as the
Committee or its delegate may reasonably require.


 


ARTICLE XV: 
OTHER BENEFITS AND AGREEMENTS


 


15.10 Coordination with Other
Benefits.  The benefits provided for a Participant and
Participant’s Beneficiary under the Plan are in addition to any other benefits
available to such Participant under any other plan or program for employees of
the Company and its Affiliates.  The Plan
will supplement and will not supersede, modify or amend any other such plan or
program except as may otherwise be expressly provided.


 


ARTICLE XVI: 
CLAIMS PROCEDURE


 


16.010          Presentation
of Claim.  Any Participant or Beneficiary of a deceased
Participant (such Participant or Beneficiary being referred to below as a “Claimant”)
may deliver to the Committee or its delegate a written claim for a
determination with respect to the amounts distributable to such Claimant from
the Plan.  If such a claim relates to the
contents of a notice received by the Claimant, the claim must be made within
sixty (60) days after such 


 


24

















 


notice
was received by the Claimant. All other claims must be made within one hundred
and eighty (180) days of the date on which the event that caused the claim
to arise occurred.  The claim must state
with particularity the determination desired by the Claimant.


 


16.020          Notification
of Decision.  The Committee or its delegate will consider a
Claimant’s claim within a reasonable time, and will notify the Claimant in
writing:


 


(a)                                  that the Claimant’s
requested determination has been made, and that the claim has been allowed in
full; or


 


(b)                                 that the Committee or its
delegate has reached a conclusion contrary, in whole or in part, to the
Claimant’s requested determination, and such notice must set forth in a manner
calculated to be understood by the Claimant;


 


(c)                                  the specific reason(s) for
the denial of the claim, or any part of it;


 


(1)                                  specific reference(s) to
pertinent provisions of the Plan upon which such denial was based;


 


(2)                                  a description of any
additional material or information necessary for the Claimant to perfect the
claim, and an explanation of why such material or information is necessary; and


 


(3)                                  an explanation of the claim
review procedure set forth in Section 16.030 below.


 


16.030          Review of a
Denied Claim.  Within sixty (60) days after receiving a
notice from the Committee or its delegate that a claim has been denied, in
whole or in part, a Claimant (or the Claimant’s duly authorized representative)
may file with the Committee or its delegate a written request for a review of
the denial of the claim.  Thereafter, but
not later than thirty (30) days after the review procedure began, the
Claimant (or the Claimant’s duly authorized representative):


 


(a)                                  may review pertinent
documents;


 


(b)                                 may submit written comments
or other documents; and/or


 


(c)                                  may request a hearing, which
the Committee or its delegate, in its sole discretion, may grant.


 


16.040          Decision on
Review.  The Committee or its delegate will render any
decision on review promptly, and not later than 60 days after the filing
of a written request for review of the denial, unless a hearing is held or
other special circumstances require additional time, in which case the Committee’s
or its delegate’s decision must be rendered within one hundred and twenty
(120) days after such date.  Such
decision must be written in a manner calculated to be understood by the
Claimant, and it must contain:


 


(a)                                  specific reasons for the
decision;


 


25

















 


(b)                                 specific reference(s) to
the pertinent Plan provisions upon which the decision was based; and


 


(c)                                  such other matters as the
Committee or its delegate deems relevant.


 


16.050          Legal
Action.  A Claimant’s compliance with the foregoing
provisions of this Article XVI is a mandatory prerequisite to a Claimant’s
right to commence any legal action with respect to any claim for benefits under
this Plan.


 


ARTICLE XVII: 
TRUST


 


17.010                Establishment of the Trust.  The Company shall establish the Trust (which
may be referred to herein as a “Rabbi Trust”). 
The Trust shall become irrevocable upon a Change of Control (to the
extent not then irrevocable). 
Notwithstanding any other provision of this Plan to the contrary, the
Trust shall not become irrevocable or funded with respect to this Plan upon the
occurrence of an event described in Section 1.110(d).  After the Trust has become irrevocable with
respect to the Plan, except as otherwise provided in Section 12 of the Trust,
the Trust shall remain irrevocable with respect to the Plan until all benefits
due under the Plan and benefits and account balances due to participants and
beneficiaries under any other plan covered by the Trust have been paid in full.  Upon establishment of the Trust, the Company
shall provide for funding of the Trust in accordance with the terms of the
Trust.


 


17.020                Interrelationship of the Plan and the Trust.  The provisions of the Plan and
each Participant’s Participation Agreement will govern the rights of a
Participant to receive distributions pursuant to the Plan.  The provisions of the Trust will govern the
rights of the Company and its Affiliates, Participants and the creditors of the
Company and its Affiliates to the assets transferred to the Trust.  The Company and each of its Affiliates
employing any Participant will at all times remain liable to carry out their
obligations under the Plan.


 


17.030          Distributions
From the Trust.  The Company’s and each of its Affiliate’s
obligations under the Plan may be satisfied with Trust assets distributed
pursuant to the terms of the Trust, and any such distribution will reduce their
obligations under this Plan.


 


17.040   Rabbi Trust.   The Rabbi Trust shall:


 


(a)                                  be a non-qualified grantor
trust which satisfies in all material respects the requirement of Revenue
Procedure 92-64, 1992-2 CB 122 (or any successor Revenue Procedure or other
applicable authority);


 


(b)                                 become irrevocable upon a
Change of Control, to the extent not then irrevocable (other than an event
described in Section 1.110(d)); and


 


(c)                                  provide that any successor
trustee shall be a bank trust department or other party that may be granted
corporate trustee powers under state law.


 


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ARTICLE XVIII: 
MISCELLANEOUS


 


18.010          Status of
Plan.  The Plan is intended to be a plan that is not
qualified within the meaning of Code Section 401(a) and that “is
unfunded and is maintained by an employer primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees” within the meaning of ERISA Section 201(2), 301(a)(3) and
401(a)(1). The Plan will be administered and interpreted to the extent possible
in a manner consistent with that intent.


 


18.020          Unsecured
General Creditor.  Participants and their Beneficiaries, heirs,
successors and assigns shall have no legal or equitable rights, interests or
claims in any property or assets of the Company or its Affiliates.  For purposes of the payment of benefits under
this Plan, any and all of the Company’s or Affiliate’s assets shall be, and
remain, the general, unpledged unrestricted assets of the Company or
Affiliate.  The Company or Affiliate’s
obligation under the Plan shall be merely that of an unfunded and unsecured
promise to pay money in the future.


 


18.030          Company
Liability.  The Company’s or an Affiliate’s liability for
the payment of benefits will be defined only by the Plan and the Participant’s
specific Participation Agreement.  The
Company and its Affiliates will have no obligation to a Participant under the
Plan, except as expressly provided in the Plan and the Participant’s
Participation Agreement.


 


18.040          Nonassignability.  Neither a Participant nor any
other person will have any right to commute, sell, assign, transfer, pledge,
anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or
convey in advance of actual receipt, the amounts, if any, payable hereunder, or
any part thereof, which are, and all rights to which are expressly declared to
be, unassignable and non-transferable. 
No part of the amounts payable will, prior to actual payment, be subject
to seizure, attachment, garnishment or sequestration for the payment of any
debts, judgments, alimony or separate maintenance owed by a Participant or any
other person, be transferable by operation of law in the event of a Participant’s
or any other person’s bankruptcy or insolvency or be transferable to a spouse
as a result of a property settlement or otherwise.


 


18.050          Not a Contract
of Employment.  The terms and conditions of this Plan shall
not be deemed to constitute a contract of employment between the Company or any
of its Affiliates and the Participant. 
Such employment is hereby acknowledged to be an “at will” employment relationship
that can be terminated at any time for any reason, or no reason, with or
without cause, and with or without notice, unless expressly provided in a
written employment agreement. Nothing in this Plan shall be deemed to give a
Participant the right to be retained in the service of the Company or an
Affiliate or to interfere with the right of the Company or an Affiliate to
discipline or discharge the Participant at any time.


 


18.060          Furnishing
Information.  A
Participant or his Beneficiary will cooperate with the Committee or its
delegate by furnishing any and all information requested by the 


 


27

















 


Committee
or its delegate and take such other actions as may be requested in order to
facilitate the administration of the Plan and the payments of benefits
hereunder.


 


18.070          Terms.  Whenever any words are used herein in the
masculine, they should be construed as though they were in the feminine in all
cases where they would so apply; and whenever any words are used herein in the
singular or in the plural, they should be construed as though they were used in
the plural or the singular, as the case may be, in all cases where they would
so apply.


 


18.080          Captions.  The captions of the articles, sections and
paragraphs of this Plan are for convenience only and do not control or affect
the meaning or construction of any of its provisions.


 


18.090          Governing
Law.  Subject to ERISA, the
provisions of this Plan shall be construed and interpreted according to the
laws of the State of Iowa.


 


18.100          Notice.  Any notice or filing required or permitted to
be given to the Committee under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address below:


 


Vice
President, Compensation and Benefits

Rockwell Collins, Inc.

400 Rockwell Collins Road NE

Cedar Rapids, Iowa  52498


 


Such
notice will be deemed given as of the date of delivery or, if delivery is made
by mail, as of the date shown on the postmark on the receipt for registration
or certification.


 


Any
notice or filing required or permitted to be given to a Participant under this
Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to
the last known address of the Participant.


 


18.110          Successors.  The provisions of this Plan shall bind and
inure to the benefit of the Company and its successors and assigns and the
Participant and the Participant’s designated Beneficiaries.


 


18.120          Spouse’s
Interest.  The
interest in the benefits hereunder of a spouse of a Participant who has
predeceased the Participant will automatically pass to the Participant and will
not be transferable by such spouse in any manner, including but not limited to
such spouse’s will, nor will such interest pass under the laws of intestate
succession.


 


18.130          Validity.  In case any provision of this Plan should be
found to be illegal or invalid for any reason, said illegality or invalidity
will not affect the remaining parts hereof, but this Plan should be construed
and enforced as if such illegal or invalid provision had never been inserted
herein.


 


18.140          Minors, Incompetent
Persons, etc.  If
the Committee or its delegate determines that a benefit under this Plan is to
be paid to a minor, a person declared incompetent or to a 


 


28

















 


person
incapable of handling the disposition of that person’s property, the Committee
or its delegate may direct payment of such benefit to the guardian, legal
representative or person having the care and custody of such minor, incompetent
or incapable person.  The Committee or
its delegate may require proof of minority, incompetence, incapacity or
guardianship, as it may deem appropriate prior to distribution of the benefit.  Any payment of a benefit shall be a payment
for the account of the Participant and the Participant’s Beneficiary, as the
case may be, and will be a complete discharge of any liability under the Plan
for such payment amount.


 


18.150          Qualified
Domestic Relations Order.  The Committee or its delegate is authorized
to make any payments directed by court order that qualifies as a “qualified
domestic relations order” under Section 414(p) in any action in which
the Plan or the Committee has been named as a party.


 


18.160   Distribution in the Event of Taxation.


 


(a)                                  In General.  Subject to and in accordance with Section 409A,
if, for any reason, all or any portion of a Participant’s benefits under this
Plan becomes taxable to the Participant under Section 409A prior to
receipt, a Participant may petition the Committee or its delegate before a
Change of Control, or the Trustee of the Trust after a Change of Control, for a
distribution of that portion of his benefit that has become taxable under Section 409A.  Upon the grant of such a petition, which grant
should not be unreasonably withheld (and, after a Change of Control, must be
granted), the Company or, as applicable, its Affiliate will distribute to the
Participant immediately available funds in an amount equal to the taxable
portion of his benefit (which amount will not exceed a Participant’s unpaid
Account Balance under the Plan).  If the
petition is granted, the tax liability distribution will be made within 90 days
of the date when the Participant’s petition is granted.  Such a distribution will affect and reduce
the benefits to be paid under this Plan.


 


(b)                                 Trust.  If the Trust terminates in accordance with
provisions thereof and benefits are distributed from the Trust to a Participant
in accordance therewith, the Participant’s benefits under this Plan will be
reduced to the extent of such distributions.


 


18.170          Insurance.  The Company, on its own behalf or on behalf
of the trustee of the Trust, and, in its discretion, may apply for and procure
insurance on the life of the Participant, in such amounts and in such forms as
the Trust may choose.  The Company or the
trustee of the Trust, as the case may be, will be the sole owner and
beneficiary of any such insurance.  The
Participant will have no interest whatsoever in any such policy or policies, and
at the request of the Company will submit to medical examinations and supply
such information and execute such documents as may be required by the insurance
company or companies to which the Company has applied for insurance.


 


18.180          Requirement
for Release.  Any payment
to any Participant or a Participant’s present, future or former spouse or
Beneficiary in accordance with the provisions of this Plan will, to the extent
thereof, be in full satisfaction of all claims against the Plan, the Trustee
and 


 


29

















 


the
Company, and the Trustee may require such Participant or Beneficiary, as a
condition precedent to such payment to execute a receipt and release to such
effect.


 


30