Exhibit 10(b)

CONFORMED COPY

AGREEMENT AND PLAN OF DISTRIBUTION

dated as of December 6, 1996

among

ROCKWELL INTERNATIONAL CORPORATION,

NEW ROCKWELL INTERNATIONAL CORPORATION

ALLEN-BRADLEY COMPANY, INC.,

ROCKWELL COLLINS, INC.,

ROCKWELL SEMICONDUCTOR SYSTEMS, INC.,

ROCKWELL LIGHT VEHICLE SYSTEMS, INC.

and

ROCKWELL HEAVY VEHICLE SYSTEMS, INC.

TABLE OF CONTENTS

                                                                 Page
                                                                 ----
ARTICLE I             DEFINITIONS..........................        2

               1.1.   Definitions..........................        2

ARTICLE II            CONTRIBUTION AND ASSUMPTION..........       13

               2.1.   Contribution.........................       13
               2.2.   Assumption of Liabilities............       17
               2.3.   Transfer and Assumption
                         Documentation.....................       20
               2.4.   Nonassignable Contracts..............       20
               2.5.   Intercompany Arrangements............       21

ARTICLE III           RECAPITALIZATION OF NEWCO; MECHANICS
                      OF DISTRIBUTION......................       22

               3.1.   Newco Capitalization.................       22
               3.2.   Recapitalization of Newco............       22
               3.3.   Mechanics of Distribution............       22
               3.4.   Timing of Distribution...............       23

ARTICLE IV            OTHER AGREEMENTS.....................       23

               4.1.   Employment...........................       23
               4.2.   Cross-License of Intellectual
                         Property..........................       25
               4.3.   Use of Names, Trademarks, etc........       26
               4.4.   Further Assurances...................       29
               4.5.   Cooperation..........................       29

ARTICLE V             TAX MATTERS..........................       30

               5.1.   Tax Allocation.......................       30
               5.2.   Tax Matters .........................       30
               5.3.   Transfer Taxes.......................       30

ARTICLE VI            MUTUAL RELEASE.......................       30

               6.1.   Mutual Release, etc..................       30

                                                                 Page
                                                                 ----
ARTICLE VII    ACCESS TO INFORMATION.......................       32

               7.1.   Provision of Corporate Records.......       32
               7.2.   Access to Information................       32
               7.3.   Production of Witnesses..............       34
               7.4.   Retention of Records.................       35
               7.5.   Confidentiality......................       35

ARTICLE VIII   EMPLOYEE BENEFIT PLANS......................       36

               8.1.   Employee Benefits Generally..........       36
               8.2.   Retirement Plans.....................       36
               8.3.   Savings Plans........................       43
               8.4.   Deferred Compensation Plans and
                         Nonqualified Retirement and
                         Savings Plans.....................       44
               8.5.   Employee Stock Options...............       46
               8.6.   Long-Term Incentive Plan.............       46
               8.7.   Welfare Benefit Plans................       47
               8.8.   Retiree Medical and Life Insurance...       49
               8.9.   Retention and Severance
                         Obligations.......................       50
               8.10.   Free-Standing Plans ................       51
               8.11.   Employment, Consulting and Severance
                          Agreements ......................       51
               8.12.   Welfare Plan Funding................       52
               8.13.   Indemnification.....................       54
               8.14.   Cooperation ........................       55
               8.15.   Amendment, Modification or
                          Termination of Benefits Plan.....       55

ARTICLE IX     CONDITIONS..................................       55

               9.1.   Conditions to Obligations of the
                         Company...........................       55

ARTICLE X      MISCELLANEOUS AND GENERAL...................       56

               10.1.   Modification or Amendment...........       56
               10.2.   Waiver; Remedies....................       56
               10.3.   Counterparts........................       57
               10.4.   Governing Law.......................       57
               10.5.   Notices.............................       57
               10.6.   Entire Agreement....................       58
               10.7.   Certain Obligations.................       58

                                                    Page
                                                    ----
 10.8.   Assignment...........................       58
 10.9.   Captions.............................       59
10.10.   Specific Performance.................       59
10.11.   Severability.........................       59
10.12.   Third Party Beneficiaries............       59
10.13.   Schedules............................       60
10.14.   Consent to Jurisdiction..............       60

AGREEMENT AND PLAN OF DISTRIBUTION, dated as of December 6, 1996 (this "Agreement"), among ROCKWELL INTERNATIONAL CORPORATION, a Delaware corporation (the "Company"), NEW ROCKWELL INTERNATIONAL CORPORATION, a Delaware corporation ("Newco"), ALLEN-BRADLEY COMPANY, INC., a Wisconsin corporation ("A-B"), ROCKWELL COLLINS, INC., a Delaware corporation ("Collins"), ROCKWELL SEMICONDUCTOR SYSTEMS, INC., a Delaware corporation ("RSS"), ROCKWELL LIGHT VEHICLE SYSTEMS, INC., a Delaware corporation ("LVS"), and ROCKWELL HEAVY VEHICLE SYSTEMS, INC., a Delaware corporation ("HVS"; and together with A-B, Collins, RSS and LVS, the "Operating Subsidiaries").

W I T N E S S E T H :

WHEREAS, the Company, The Boeing Company, a Delaware corporation ("Acquiror"), and Boeing NA, Inc., a Delaware corporation and a wholly-owned subsidiary of Acquiror ("Sub"), have entered into an Agreement and Plan of Merger dated as of July 31, 1996 (the "Merger Agreement"), providing for the Merger (as defined in the Merger Agreement) of Sub with and into the Company;

WHEREAS, immediately prior to the Conversion (as defined in the recitals to the Merger Agreement), the Company's Board of Directors, subject to the approval of the Company's stockholders, expects to distribute to the holders of Common Stock, par value $1.00 per share, of the Company ("Company Common Stock") and Class A Common Stock, par value $1.00 per share, of the Company ("Company Class A Common Stock"), other than shares held in the treasury of the Company, on a pro rata basis all of the issued and outstanding shares of Common Stock, par value $1.00 per share, of Newco ("Newco Common Stock") and Class A Common Stock, par value $1.00 per share, of Newco ("Newco Class A Common Stock"), in each case with the associated Rights (as defined in
Section 1.1) (the "Distribution");

WHEREAS, immediately prior to the Distribution, the Company's Board of Directors, subject to the approval of the Company's stockholders, expects to cause (i) the Company to contribute certain assets to the Operating Subsidiaries as a capital contribution or in exchange for shares of their stock, (ii) the Company to contribute the stock of the Operating Subsidiaries and certain other assets to Newco as a capital contribution and (iii) Newco and the Operating Subsidiaries to assume certain liabilities of the Company,

all as more specifically provided herein (the transactions described in clauses
(i), (ii) and (iii) are referred to collectively as the "Contribution");

WHEREAS, the purpose of the Distribution is to make possible the Merger by divesting the Company of the businesses and operations to be conducted by Newco and the Operating Subsidiaries, which Acquiror is unwilling to acquire;

WHEREAS, it is the intention of the parties to this Agreement that the Contribution and Distribution will qualify as transactions described in Sections 351 and Section 355 of the Internal Revenue Code of 1986, as amended (the "Code") and/or a "reorganization" within the meaning of Section 368(a)(1)(D) of the Code; and

WHEREAS, this Agreement sets forth or provides for certain agreements by and among the Company, Newco and the Operating Subsidiaries in consideration of the separation of the ownership of the Company and Newco;

NOW, THEREFORE, in consideration of the premises, and of the respective covenants and agreements set forth herein, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1. Definitions. Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned to such terms in the Merger Agreement. As used in this Agreement, the following terms shall have the following respective meanings:

"A-B Business" shall mean the business heretofore and currently engaged in by the Company and its Subsidiaries and their respective predecessors of designing, building, selling, installing, modifying, repairing, servicing and supporting automation products and systems, including, without limitation, programmable controllers, human/machine interface devices, communications networks, programming and application software, AC/DC drives and drive systems, sensing and motion control devices, machine vision products, computer numeric control systems, data acquisition products, standard and engineered motors, mechanical power

transmission equipment, and support services for all of the foregoing, and activities related thereto, and shall include any former or discontinued operations primarily related to the A-B Business as previously conducted.

"Accrued Interest" shall mean all accrued and unpaid interest on the Company Debt to the Closing Date other than accretion on commercial paper to the extent such accretion is included in Company Debt.

"Additional Retained Facilities" shall mean the Company's Seal Beach, California world headquarters, the Company's Systems Development Center, the Company's Information Systems Center and the Company's Government Affairs, Marketing and International Offices located in Washington, D.C. (Arlington, VA) and related international and field offices listed on Schedule 2.1(b)(i)(D).

"Aerospace Business" shall mean the business heretofore and currently engaged in by the Company and its Subsidiaries and their respective predecessors of designing, building, selling, installing, modifying, repairing, servicing and supporting spacecraft, liquid-fueled rocket engines, military and civilian aircraft, tactical weapons, unmanned missiles, applied energy technologies (including, without limitation, solar, kinetic and laser), and parts, components and materials for the foregoing, contract work for the National Aeronautics and Space Administration and the Company's interest in United Space Alliance, LLC, and activities related thereto, and shall include any former or discontinued operations primarily related to the Aerospace Business as previously conducted, including, without limitation, the former or discontinued operations listed on Schedule 1.1(a)(i); provided, however, that Aerospace Business does not include any part of the Collins Business, any Contributed A&D Assets or any Divested Business of the Aerospace Business, including, without limitation, the Divested Businesses listed on Schedule 1.1(a)(ii).

"Affiliate" shall mean, with respect to any specified Person, a Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person; provided, however, that for purposes of this Agreement and the Post-Closing Covenants Agreement, from and after the Time of Contribution, no member of either Group shall be deemed to be an Affiliate of any member of the other Group.

"Assets" shall mean any and all assets, properties and rights, whether tangible or intangible, whether real, personal or mixed, whether fixed, contingent or otherwise, and wherever located, including, without limitation, the following:

(i) real property interests (including leases), land, plants, buildings and improvements;

(ii) machinery, equipment, tooling, vehicles, furniture and fixtures, leasehold improvements, repair parts, tools, plant, laboratory and office equipment and other tangible personal property, together with any rights or claims arising out of the breach of any express or implied warranty by the manufacturers or sellers of any of such assets or any component part thereof;

(iii) inventories, including raw materials, work- in-process, finished goods, parts, accessories and supplies;

(iv) cash, bank accounts, notes, loans and accounts receivable (whether current or not current), interests as beneficiary under letters of credit, advances and performance and surety bonds;

(v) certificates of deposit, banker's acceptances, shares of stock, bonds, debentures, evidences of indebtedness, certificates of interest or participation in profit-sharing agreements, collateral-trust certificates, preorganization certificates or subscriptions, transferable shares, investment contracts, voting-trust certificates, puts, calls, straddles, options, swaps, collars, caps and other securities or hedging arrangements of any kind;

(vi) financial, accounting and operating data and records including, without limitation, books, records, notes, sales and sales promotional data, advertising materials, credit information, cost and pricing information, customer and supplier lists, reference catalogs, payroll and personnel records, minute books, stock ledgers, stock transfer records and other similar property, rights and information;

(vii) patents, patent applications, trademarks, trademark applications and registrations, trade names,

service marks, service names, copyrights and copyright applications and registrations, commercial and technical information including engineering, production and other designs, drawings, specifications, formulae, technology, computer and electronic data processing programs and software, inventions, processes, trade secrets, know-how, confidential information and other proprietary property, rights and interests;

(viii) agreements, leases, contracts, sale orders, purchase orders, open bids and other commitments and all rights therein;

(ix) prepaid expenses, deposits and retentions held by third parties;

(x) claims, causes of action, choses in action, rights under insurance policies, rights under express or implied warranties, rights of recovery, rights of set-off, rights of subrogation and all other rights of any kind;

(xi) licenses, franchises, permits, authorizations and approvals; and

(xii) goodwill and going concern value.

"Collins Business" shall mean the business heretofore and currently engaged in by the Company and its Subsidiaries and their respective predecessors of designing, building, selling, installing, modifying, repairing, servicing and supporting avionics, communication and navigation products and systems and parts, components and materials for the foregoing, including without limitation: electronic equipment for flight control, cockpit display, navigation, voice and data communication, cockpit management, radar, global positioning and other systems for airlines, corporate aircraft, government and military applications; call center products and systems; mobile communication and information systems to the land transportation market (including the Company's Automatic Vehicle Locating System and Vision Sensor Initiatives Programs) and flat panel displays and other optical components, and activities related thereto, and shall include the Collins Avionics and Communications Division, Collins Commercial Avionics, the Communication Systems Division and any former or discontinued operations primarily related to the Collins Business as previously conducted;

provided, however, that Collins Business does not include Collins International Service Company located at 3200 East Renner Road, Richardson, Texas, Rockwell Australia Limited and its Subsidiaries or any business thereof (which shall constitute part of the Defense Business); provided, further, however, that the Collins Business shall include the Tullamarine Service Center.

"Communication Systems Division" shall mean the business heretofore and currently engaged in by the Company and its Subsidiaries and their respective predecessors of designing, building, selling, installing, modifying, repairing, servicing and supporting information message handling and communication systems and products that support command, control and communications for land, sea and air applications, including without limitation: integrated command and control systems for military and civilian agencies; fixed and airborne VLF communications; multispectrum tactical HF through satellite communications for fixed and transportable applications; satellite communications through the EHF band; airborne communication systems including platform integration; avionics and special mission systems integration and aircraft modification; medical information systems; global private networks; satellite-based air traffic management and worldwide service and support for operations and maintenance, construction and EF&I (engineer, furnish and install), and activities related thereto, and shall include any former or discontinued operations primarily related to the Communication Systems Division as previously conducted; provided, however, that the Communication Systems Division does not include Collins International Service Company located at 3200 East Renner Road, Richardson, Texas, Rockwell Australia Limited and its Subsidiaries or any business thereof (which shall constitute part of the Defense Business).

"Company Debt" shall mean indebtedness of the Company in an aggregate principal amount of $2,165,000,000, consisting of:

(i) Old Company Notes in the aggregate principal amount of $1,600,000,000, as the same may be amended pursuant to the Consent Solicitation;

(ii) commercial paper or other short-term borrowings in the aggregate principal amount of $565,000,000 (with respect to commercial paper issued at a discount, the accreted value at the Closing Date

shall be deemed to be the principal amount thereof), less the aggregate principal amount of any outstanding Rockwell Australia Debt (as defined below), or any indebtedness issued in replacement thereof or in exchange therefor; and

(iii) bank borrowings of Rockwell Australia Limited in the aggregate principal amount of not more than a United States dollar equivalent of $30,000,000 (the "Rockwell Australia Debt") (it being understood that it is the current intention of the Company to repay the Rockwell Australia Debt prior to the Time of Contribution);

provided that no short-term debt other than commercial paper shall constitute "Company Debt" unless it is prepayable in full at any time without premium or penalty and no commercial paper shall constitute "Company Debt" unless it matures or is payable or prepayable in full within 60 days after the Effective Time without premium or penalty.

For purposes of calculating the United States dollar equivalent of any Rockwell Australia Debt, the New York foreign exchange selling rate applicable to Australian dollars as published in The Wall Street Journal, Eastern Edition, for the second business day preceding the Closing Date shall be used.

"Company Group" shall mean the Company and its Subsidiaries, other than Newco and its Subsidiaries (determined after giving effect to the transfers contemplated by Article II of this Agreement).

"Contributed A&D Assets" shall have the meaning set forth in Section 2.1(a)(vii).

"DOE" shall mean the United States Department of Energy or any predecessor Governmental Entity.

"Defense Business" shall mean the business heretofore and currently engaged in by the Company and its Subsidiaries (including, without limitation, Collins International Service Company and Rockwell Australia Limited but excluding the Tullamarine Service Center) and their respective predecessors of designing, building, selling, installing, modifying, repairing, servicing and supporting the following for defense markets: aircraft electronic upgrades and modifications, tactical weapons, space defense

sensors and electronics, navigation and guidance systems for strategic missiles, tactical weapons, ships and submarines, naval combat systems for ships and submarines, proprietary programs, and parts, components and materials for the foregoing, and activities related thereto, and shall include any former or discontinued operations primarily related to the Defense Business as previously conducted, including, without limitation, the former or discontinued operations listed on Schedule 1.1(b)(i); provided, however, that the Defense Business does not include any part of the Collins Business (including the Company's Automatic Vehicle Locating System and Vision Sensor Initiatives Programs heretofore conducted by the Autonetics & Missile Systems Division of the Company), any Contributed A&D Assets or any Divested Business of the Defense Business, including, without limitation, the Divested Businesses listed on Schedule 1.1(b)(ii).

"Divested Business" shall mean any corporation, division or other business unit (including any Assets and Liabilities comprising the same) that has been sold, conveyed, assigned, transferred or otherwise divested, in whole or in part, by the Company or any of its Subsidiaries to any third party prior to the Time of Contribution, but shall not include any corporation, division, other business unit, product line or contract the operations or production of which has been discontinued, completed or otherwise terminated by the Company or any of its Subsidiaries, but not sold, conveyed, assigned, transferred or otherwise divested to a third party.

"Environmental Law" shall mean any Federal, state, local or foreign statute, law, regulation, rule or common law of, or any judgment, injunction, order or decree of or settlement agreement with, any Governmental Entity, relating to (x) the protection of the environment or (y) the use, storage, treatment, generation, transportation, processing, handling, release or disposal of Hazardous Substances, in each case as in effect on the date hereof or in the future.

"Environmental Liabilities" shall mean all Liabilities relating to or arising out of any Environmental Law or contract or agreement relating to environmental, health or safety matters (including removal, remediation or cleanup costs, investigatory costs, governmental response costs and administrative oversight costs, environmental monitoring costs, natural resources damages, property damages, personal injury damages, costs of medical

monitoring, costs of compliance with any settlement, judgment or other determination of Liability and indemnity, contribution or similar obligations) irrespective of whether such Liabilities are asserted, in the first instance, to be the responsibility of a Governmental Entity or any other Person.

"Group" shall mean the Company Group or the Newco Group.

"HVS Business" shall mean the business heretofore and currently engaged in by the Company and its Subsidiaries and their respective predecessors of designing, building, selling, installing, modifying, repairing, servicing and supporting drivetrain components and systems for heavy- and medium-duty commercial trucks, trailers, buses, off-highway commercial vehicles and government heavy-duty wheeled vehicles, and activities related thereto, and shall include any former or discontinued operations primarily related to the HVS Business as previously conducted.

"Information" shall mean all records, books, contracts, instruments, computer data and other data and information.

"Liabilities" shall mean any and all debts, liabilities, commitments and obligations, whether fixed, contingent or absolute, matured or unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown, whenever or however arising and whether or not the same would be required by generally accepted accounting principles to be reflected in financial statements or disclosed in the notes thereto.

"Litigation Matters" shall mean actual, threatened or future litigations, investigations, proceedings (including arbitration proceedings), claims or other legal matters that have been or may be asserted by or against, or otherwise affect, the Company and/or Newco (or members of either Group).

"LVS Business" shall mean the business heretofore and currently engaged in by the Company and its Subsidiaries and their respective predecessors of designing, building, selling, installing, modifying, repairing, servicing and supporting sunroof, door access control and seat adjusting systems, suspensions and wheels, anti-squeeze windows, electronic controls and automobile global positioning

systems for passenger car and light truck industries, and activities related thereto, and shall include any former or discontinued operations primarily related to the LVS Business as previously conducted.

"Newco Group" shall mean Newco and its Subsidiaries, including the Operating Subsidiaries (determined after giving effect to the transfers contemplated by Article II of this Agreement).

"Paydown Amount" shall be the excess, if any, of $2.165 billion over the aggregate principal amount of the Company Debt at the Effective Time (calculated as set forth in the definition of Company Debt).

"Person" shall mean an individual, a partnership, a joint venture, a corporation, a limited liability entity, a trust, an unincorporated organization or other entity or a government or any department or agency thereof.

"Preexisting Environmental Conditions" shall mean conditions of the environment (including ambient air, the ocean, natural resources (including flora and fauna), soil, surface water, groundwater (including potable water, navigable water and wetlands), the land surface or subsurface strata or as otherwise defined in any Environmental Law) existing at the Time of Contribution relating to or arising from the presence, use, treatment, or Release or threatened Release of any Hazardous Substance but does not include any Special Liabilities. For purposes of the definition of the term "Preexisting Environmental Condition", the term "Hazardous Substance" shall include any waste, substance, material, pollutant or contaminant now, or in the future, listed, defined, designated or classified as hazardous, toxic or radioactive, or otherwise regulated, now or in the future, under any Environmental Law, and any waste, material or substance contaminated by, or alleged to be contaminated by, any Hazardous Substance.

"Privileged Information" shall mean, with respect to either Group, Information regarding a member of such Group, or any of its operations, employees, Assets or Liabilities (whether in documents or stored in any other form or known to its employees or agents) that is or may be protected from disclosure pursuant to the attorney-client privilege, the work product doctrine or other applicable privileges, that a member of the other Group may come into

possession of or obtain access to pursuant to this Agreement or otherwise.

"Release" shall have the same meaning given such term in the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. ss. 9601(22).

"Representatives" shall mean directors, officers, employees, agents, consultants, advisors, accountants, attorneys and representatives.

"Retained Facilities" shall mean the Company's facilities identified on Schedule 2.1(b)(i)(A) and all buildings, improvements and fixtures at such facilities.

"Right" shall mean a preferred share purchase right issued pursuant to the Rights Agreement dated as of November 30, 1996 between Newco and ChaseMellon Shareholder Services, L.L.C., as Rights Agent.

"Science Center" shall mean the Company's Science Center located at 1049 Camino Dos Rios, Thousand Oaks, California and other related facilities located at Suite 400, 444 High Street, Palo Alto, California and Building 241, 3370 Miraloma Avenue, Anaheim, California.

"Semiconductor Systems Business" shall mean the business heretofore and currently engaged in by the Company and its Subsidiaries and their respective predecessors of designing, building, selling, installing, modifying, repairing, servicing and supporting semiconductors for fax, voice and data modems for fax machines, personal computers and other uses, chipsets for cellular and cordless phones, wireless modem devices for laptop computers and modules for global positioning system receivers, and activities related thereto, and shall include any former or discontinued operations primarily related to the Semiconductor Systems Business as previously conducted.

"Special Liabilities" shall mean any Liabilities of the Company or any of its Subsidiaries (including any Environmental Liability) arising out of or relating to (i) the Rocky Flats Plant, Golden, Colorado, (ii) the Hanford Nuclear Reservation, Hanford, Washington, (iii) the INEL complex in Idaho, (iv) the Company's or any of its Subsidiaries decontamination and decommissioning work at various atomic or nuclear facilities throughout the United

States (excluding, for purposes of the definition of Special Liabilities only, Santa Susana and Canoga Park, California) and (v) the Company's work relating to Interatom (Internationale Atomreaktorbau GmbH), and any Liabilities of the Company or any of its Subsidiaries (including any Environmental Liabilities), arising out of or relating to any products manufactured or any services provided by the Company or any of its Subsidiaries which involved the use, storage, treatment, generation, transportation, processing, handling, release or disposal of radioactive, fissionable or fusionable materials or any waste products or by-products of any process involving radioactive, fissionable or fusionable materials (other than activities of the Company and its Subsidiaries at Santa Susana and Canoga Park, California).

"Tax" or "Taxes" shall have the meaning assigned to such term in the Tax Allocation Agreement.

"Time of Contribution" shall mean the time immediately prior to the Time of Distribution as of which the Contribution is effective.

"Time of Distribution" shall mean the time as of which the Distribution is effective.

"Transfer Agent" shall mean ChaseMellon Shareholder Services, L.L.C., P.O. Box 444, Pittsburgh, Pennsylvania 15230-0444 or 120 Broadway, 33rd Floor, New York, New York 10271, telephone (800) 204-7800, the transfer agent for the Company Common Stock and Company Class A Common Stock.

ARTICLE II

CONTRIBUTION AND ASSUMPTION

2.1. Contribution.

(a) Subject to Section 2.1(b) and effective as of the Time of Contribution, the Company hereby contributes, grants, conveys, assigns, transfers and delivers to Newco and the Operating Subsidiaries all the Company's right, title and interest in and to any and all Assets of the

Company (collectively, the "Contributed Assets"), allocated as follows or as Newco shall otherwise direct:

(i) all Assets of the Company that are used primarily or that are held primarily for use in the A-B Business (other than the capital stock of A-B) and all of the issued and outstanding shares of capital stock of Reliance Electric Company, a Delaware corporation, are contributed to A-B as a capital contribution;

(ii) all Assets of the Company that are used primarily or that are held primarily for use in the Collins Business are contributed to Collins in exchange for 1,000 shares of the Common Stock, par value $1.00 per share, of Collins, constituting all of the outstanding shares of Collins;

(iii) all Assets of the Company that are used primarily or that are held primarily for use in the Semiconductor Systems Business and all of the issued and outstanding shares of capital stock of Brooktree Corporation, a California corporation, are contributed to RSS in exchange for 1,000 shares of the Common Stock, par value $1.00 per share, of RSS, constituting all of the outstanding shares of RSS;

(iv) all Assets of the Company that are used primarily or that are held primarily for use in the LVS Business are contributed to LVS in exchange for 1,000 shares of the Common Stock, par value $1.00 per share, of LVS, constituting all of the outstanding shares of LVS;

(v) all Assets of the Company that are used primarily or that are held primarily for use in the HVS Business are contributed to HVS in exchange for 1,000 shares of the Common Stock, par value $1.00 per share, of HVS, constituting all of the outstanding shares of HVS;

(vi) [intentionally omitted];

(vii) the Company's properties at El Segundo, California, Lakewood, California, and Building 37 at Canoga Park, California more specifically identified on Schedule 2.1(a)(vii) (collectively, the "Contributed A&D Assets") are contributed to A-B as a capital contribution;

(viii) the Science Center (other than physical assets related to extrinsic silicon detectors and MEMS gyros located at Building 241, 3370 Miraloma Avenue, Anaheim, California, which shall constitute Retained Assets) is contributed to Newco as a capital contribution;

(ix) all issued and outstanding shares of Atomics International, Inc., Narland Corporation and Rockwell Aerospace & Electronics, Inc. are contributed to Newco as a capital contribution;

(x) the Health Care Claims (as defined in the Post-Closing Covenants Agreement) are contributed to Newco as a capital contribution; and

(xi) immediately following the contributions referred to in clauses
(i) through (x) above, all of the issued and outstanding shares of Common Stock of A-B, Collins, RSS, LVS, HVS and all other Assets of the Company (other than the Retained Assets) not otherwise specifically contributed to an Operating Subsidiary pursuant to this Section 2.1(a), including (x) all cash and cash equivalents of the Company and its Subsidiaries (other than as listed on Schedule 2.1(b)(i)(C) and other than cash (including for this purpose cash held by Rockwell Australia Limited in an amount not to exceed the aggregate outstanding principal amount of the Rockwell Australia Debt) in an amount equal to the excess, if any, of (A) the sum of (1) $4,320,000 and (2) the Accrued Interest over (B) the Paydown Amount), and (y) the Company's rights under Article II of the Merger Agreement, the last sentence of Section 3.1 of the Merger Agreement, Section 4.2(j) of the Merger Agreement, Section 4.2(d)(iii) of the Merger Agreement, the second sentence of Section 5.9(a) of the Merger Agreement, Section 5.13(a) of the Merger Agreement, Section 5.18 of the Merger Agreement and Section 8.17 of the Merger Agreement, are contributed to Newco as a capital contribution.

If any Assets that are used primarily or that are held primarily for use in the A-B Business, the Collins Business, the Semiconductor Systems Business, the LVS Business or the HVS Business are held in a Subsidiary of the Company that would not be owned directly or indirectly by A-B, Collins, RSS, LVS or HVS, respectively, as a result of

the foregoing allocation, then, notwithstanding the foregoing allocation, the Company shall cause each such Subsidiary to contribute such Assets to the appropriate Operating Subsidiary or a Subsidiary thereof or as Newco otherwise directs.

(b) Notwithstanding Section 2.1(a), the Company hereby retains and does not contribute to Newco or the Operating Subsidiaries all the Company's right, title and interest in and to the following Assets (collectively, the "Retained Assets"):

(i) all the Company's right, title and interest (including minority interests) in and to (A) all Assets of the Company or any of its Subsidiaries that are used primarily in or that are held primarily for use in or that are otherwise necessary for the operation, as presently conducted, of (1) the Aerospace Business and the Defense Business, including, without limitation, in the Company's Autonetics and Missile Systems Division, the Company's North American Aircraft Division, the Company's North American Aircraft Modification Division, the Company's Rocketdyne Division, the Company's Space Systems Division and the Company's Airborne Laser Program (excluding the Communication Systems Division, but including Collins International Service Company and Rockwell Australia Limited), and including, without limitation, the Retained Facilities, and (2) the Additional Retained Facilities (other than miscellaneous furnishings, artwork, computers and other equipment and personal property used by Company employees who will become Newco Group Continuing Employees following the Time of Contribution), (B) an undivided one-half interest in the helicopters and corporate jet aircraft included on Schedule 2.1(b)(i)(B), and (C) whether or not included within the Assets set forth in clause (A) above, all Assets (including, without limitation, capital stock and partnership interests) reflected on the June 30 Balance Sheet, as such Assets may have been added to, sold in the ordinary course of business or otherwise changed since such date; provided, however, that cash or cash equivalents (other than as listed on Schedule 2.1(b)(i)(C) and cash (including for this purpose cash held by Rockwell Australia Limited in an amount not to exceed the aggregate outstanding principal amount of the Rockwell Australia Debt) in an amount equal to the excess, if any, of (D) the sum of

(1)$4,320,000 and (2) the Accrued Interest over (E) the Paydown Amount), the Contributed A&D Assets, the assets associated with services to be provided by Newco pursuant to Schedule 3.4 of the Post-Closing Covenants Agreement and the assets associated with the headquarters functions described in the Retained Business Audited Financial Statements shall not constitute Retained Assets;

(ii) all issued and outstanding shares of capital stock of the Subsidiaries of the Company identified on Schedule 2.1(b)(ii) (the "Retained Subsidiaries");

(iii) all rights in and use of the names "Autonetics", "North American Aviation" and "Rocketdyne" and all derivatives thereof;

(iv) all rights of the Company under the Reorganization Agreements (including the Merger Agreement), except as otherwise specifically provided therein and except that the Company's rights under Section 2.1(a)(xi)(y) of this Agreement shall not constitute Retained Assets; and

(v) the Environmental Coverage Claims.

If any Assets that are used primarily or that are held primarily for use in or that are otherwise necessary for the operation, as presently conducted, of the Aerospace Business, the Defense Business or the Additional Retained Facilities (other than miscellaneous furnishings, artwork, computers and other equipment and personal property used by Company employees who will become Newco Group Continuing Employees following the Time of Contribution and other than the assets excluded from the definition of Retained Assets by the proviso to
Section 2.1(b)(i)) are held in a Subsidiary of the Company that is not a Retained Subsidiary, then the Company shall cause each such Subsidiary to contribute such Assets to the appropriate Retained Subsidiary.

2.2. Assumption of Liabilities.

(a) Subject to Section 2.2(b) and effective as of the Time of Contribution, Newco and the Operating Subsidiaries, in partial consideration for the Contribution, hereby unconditionally assume and undertake to pay, satisfy and discharge when due in accordance with their terms the

following Liabilities of the Company and any of its Subsidiaries (collectively, the "Assumed Liabilities"), allocated as follows or as Newco shall otherwise direct:

(i) all Liabilities relating primarily to or arising primarily from the A-B Business are assumed by A-B and Newco;

(ii) all Liabilities relating primarily to or arising primarily from the Collins Business are assumed by Collins and Newco;

(iii) all Liabilities relating primarily to or arising primarily from the Semiconductor Systems Business are assumed by RSS and Newco;

(iv) all Liabilities relating primarily to or arising primarily from the LVS Business are assumed by LVS and Newco;

(v) all Liabilities relating primarily to or arising primarily from the HVS Business are assumed by HVS and Newco;

(vi) [intentionally omitted];

(vii) all Special Liabilities are assumed by Newco;

(viii) all Liabilities (including without limitation indemnification obligations) relating primarily to or arising primarily from (A) the reports, registration statements and other documents filed by the Company with the SEC prior to the Time of Contribution (including the Company's consolidated financial statements for periods prior to the Time of Contribution included or incorporated by reference therein) and (B) any breach or alleged breach by any director of the Company of his fiduciary duties to the Company and its stockholders occurring at or prior to the Time of Contribution, in each case referred to in the foregoing clauses (A) and (B) notwithstanding the fact that such Liabilities may relate primarily to or arise primarily from the Aerospace Business, the Defense Business or the Additional Retained Facilities, are assumed by Newco, but excluding any matter for which the Company would be required to provide indemnification pursuant to Section 2.2(ii) of the Post-Closing Covenants Agreement;

(ix) all Liabilities relating primarily to or arising primarily from any Divested Business of the Aerospace Business or the Defense Business, including, without limitation, the Divested Businesses listed on Schedules 1.1(a)(ii) and 1.1(b)(ii), are assumed by Newco;

(x) all Liabilities relating primarily to or arising primarily from Atomics International, Inc., Narland Corporation and Rockwell Aerospace & Electronics, Inc. are assumed by Newco;

(xi) all Liabilities relating to the Contributed A&D Assets are assumed by Newco;

(xii) all Liabilities in respect of indebtedness for borrowed money (including any guarantees in respect of indebtedness for borrowed money of any third party of the Company and any of its Subsidiaries) other than the Company Debt are assumed by Newco;

(xiii) all Liabilities that are contemplated by the Reorganization Agreements as Liabilities to be retained by any member of the Newco Group, and any agreements, obligations and Liabilities of the Newco Group under the Reorganization Agreements (including any Liabilities of the Company described in Sections 4.1(p) and 5.13 of the Merger Agreement) are assumed by Newco; and

(xiv) all other Liabilities, other than the Retained Liabilities, are assumed by Newco.

The Liabilities referred to in clauses (i) - (xiii) above are referred to collectively as the "Newco Liabilities". If any Liabilities relating primarily to or arising primarily from the A-B Business, the Collins Business, the Semiconductor Systems Business, the LVS Business or the HVS Business are obligations of a Subsidiary of the Company other than A-B, Collins, RSS, LVS or HVS, or a direct or indirect Subsidiary thereof, as a result of the allocation of Assets of the Company set forth in Section 2.1, then, notwithstanding the foregoing allocation or the allocation of Assets of the Company set forth in
Section 2.1, the appropriate Operating Subsidiary or a Subsidiary thereof shall assume each such Liability.

(b) Notwithstanding Section 2.2(a), the Company hereby retains, and Newco and the Operating Subsidiaries do not assume and will have no liability with respect to, the following Liabilities (collectively, the "Retained Liabilities"):

(i) the Company Debt, together with the Accrued Interest;

(ii) all Liabilities (A) relating primarily to or arising primarily from the Aerospace Business or the Defense Business as conducted at any time prior to, on or after the Time of Contribution or any other Retained Assets or (B) associated with the current and former operations of the Additional Retained Facilities; provided, however, that the Retained Liabilities shall not include any Newco Liabilities; and

(iii) all Liabilities that are contemplated by the Reorganization Agreements (including the Schedules thereto) (other than the Merger Agreement) as Liabilities to be retained by any member of the Company Group, and any agreements, obligations and Liabilities of the Company Group under the Reorganization Agreements (other than the Merger Agreement), except as otherwise specifically provided herein or therein and except for obligations which are required or contemplated to be performed prior to the Effective Time.

If any Liabilities relating primarily to or arising primarily from the Aerospace Business, the Defense Business or the Additional Retained Facilities are obligations of a Subsidiary of the Company other than a Retained Subsidiary as a result of the allocation of Assets of the Company set forth in Section 2.1, then, notwithstanding the foregoing allocation or the allocation of Assets of the Company set forth in Section 2.1, the Company shall, or shall cause the appropriate Retained Subsidiary to, assume each such Liability.

2.3. Transfer and Assumption Documentation. In furtherance of the contribution, grant, conveyance, assignment, transfer and delivery of the Contributed Assets and the assumption of the Assumed Liabilities set forth in this Article II, at the Time of Contribution or as promptly as practicable thereafter (i) the Company shall execute and deliver, and cause its Subsidiaries to execute and deliver,

such deeds, bills of sale, stock powers, certificates of title, assignments of leases and contracts and other instruments of contribution, grant, conveyance, assignment, transfer and delivery necessary to evidence such contribution, grant, conveyance, assignment, transfer and delivery and (ii) Newco or the appropriate member of the Newco Group shall execute and deliver such instruments of assumption as and to the extent necessary to evidence such assumption.

2.4 Nonassignable Contracts. Anything contained herein to the contrary notwithstanding, this Agreement shall not constitute an agreement to assign any lease, license agreement, contract, agreement, sales order, purchase order, open bid or other commitment or Asset if an assignment or attempted assignment of the same without the consent of the other party or parties thereto would constitute a breach thereof or in any way impair the rights of the Newco Group or the Company Group thereunder. The Company shall, prior to the Time of Contribution, use reasonable best efforts (it being understood that such efforts shall not include any requirement of the Company Group to expend money or offer or grant any financial accommodation) as requested by Newco, and Newco shall cooperate in all reasonable respects with the Company, to obtain all consents and waivers and to resolve all impracticalities of assignments or transfers necessary to convey to Newco and the Operating Subsidiaries the Contributed Assets. If any such consent is not obtained or if an attempted assignment would be ineffective or would impair either Group's rights under any such lease, license agreement, contract, agreement, sales order, purchase order, open bid or other commitment or Asset so that Newco or the Operating Subsidiaries would not receive all such rights, then (x) the Company shall use reasonable best efforts (it being understood that such efforts shall not include any requirement of the Company Group to expend money or offer or grant any financial accommodation) to provide or cause to be provided to Newco or the appropriate Operating Subsidiary, to the extent permitted by law, the benefits of any such lease, license agreement, contract, agreement, sales order, purchase order, open bid or other commitment or Asset and the Company shall promptly pay or cause to be paid to Newco or the appropriate Operating Subsidiary when received all moneys received by the Company Group with respect to any such lease, license agreement, contract, agreement, sales order, purchase order, open bid or other commitment or Asset and (y) in consideration thereof Newco or the appropriate Operating Subsidiary shall pay, perform and discharge on

behalf of the Company Group all of the Company Group's debts, liabilities, obligations and commitments thereunder in a timely manner and in accordance with the terms thereof. In addition, the Company shall take such other actions (at Newco's expense) as may reasonably be requested by Newco in order to place Newco, insofar as reasonably possible, in the same position as if such lease, license agreement, contract, agreement, sales order, purchase order, open bid or other commitment or Asset had been transferred as contemplated hereby and so all the benefits and burdens relating thereto, including possession, use, risk of loss, potential for gain and dominion, control and command, shall inure to the Newco Group. If and when such consents and approvals are obtained, the transfer of the applicable Asset shall be effected in accordance with the terms of this Agreement.

2.5. Intercompany Arrangements. All agreements, contracts, arrangements and commitments between the Retained Business or any operating unit thereof, on the one hand, and the Company or any operating unit thereof (other than the Retained Business or any operating unit thereof), on the other hand, entered into prior to the Closing Date for the purchase or sale of goods or services ("Intercompany Arrangements") including, without limitation, Rockwell Internal Customer Agreements, shall remain in effect on and after the Closing Date (subject to amendment as provided in the Transition Agreement). All amounts under such Intercompany Arrangements which are unbilled and have not been charged to the related prime contract as of the Closing Date shall be billed and payable on and after the Closing Date in accordance with the terms thereof. At or before the Closing, the Company shall cause all intercompany indebtedness (which shall include payables and receivables but which shall not include unbilled amounts under Intercompany Arrangements) between the Retained Business or any operating unit thereof, on the one hand, and the Company or any operating unit thereof (other than the Retained Business or any operating unit thereof), on the other hand, to be settled or otherwise eliminated.

ARTICLE III

RECAPITALIZATION OF NEWCO; MECHANICS OF DISTRIBUTION

3.1. Newco Capitalization. The current equity capitalization of Newco consists of 1,000 issued and outstanding shares of Newco Common Stock (the "Existing

Newco Common Stock"), all of which is outstanding and owned beneficially and of record by the Company.

3.2. Recapitalization of Newco. Immediately prior to the Time of Distribution, the Company shall cause Newco to amend its Certificate of Incorporation to, among other things, (i) increase the authorized number of shares of capital stock of Newco to 1,125,000,000 shares, consisting of 25,000,000 shares of Preferred Stock, without par value, 1,000,000,000 shares of Newco Common Stock and 100,000,000 shares of Newco Class A Common Stock, and
(ii) exchange the Existing Newco Common Stock owned by the Company for a total number of shares of Newco Common Stock and Newco Class A Common Stock, in each case with the associated Rights, equal to the total number of shares of Company Common Stock and Company Class A Common Stock, respectively (other than Company Common Stock and Company Class A Common Stock held in the treasury of the Company), outstanding as of the Record Date (as defined below).

3.3. Mechanics of Distribution. The Distribution shall be effected by the distribution to each holder of record of Company Common Stock and Company Class A Common Stock, as of the record date designated for the Distribution by or pursuant to the authorization of the Board of Directors of the Company (the "Record Date"), of certificates representing one share of Newco Common Stock and one associated Right for each share of Company Common Stock and one share of Newco Class A Common Stock and one associated Right for each share of Company Class A Common Stock held by such holder.

3.4. Timing of Distribution. The Board of Directors of the Company shall formally declare the Distribution and shall authorize the Company to pay it immediately prior to the Effective Time, subject to the satisfaction or waiver of the conditions set forth in Article IX, by delivery of certificates for Newco Common Stock and Newco Class A Common Stock to the Transfer Agent for delivery to the holders entitled thereto. The Distribution shall be deemed to be effective upon notification by the Company to the Transfer Agent that the Distribution has been declared and that the Transfer Agent is authorized to proceed with the distribution of Newco Common Stock and Newco Class A Common Stock.

ARTICLE IV

OTHER AGREEMENTS

4.1. Employment. Newco or one of its Subsidiaries shall offer employment or continued employment from the Time of Contribution (or such later time as Newco Inactive Employees (as defined herein) first become eligible to return to employment, it being understood that each Newco Inactive Employee will continue to be eligible to receive from the Newco Group the same compensation and benefits payable during the period prior to such Newco Inactive Employee's return to employment that such Newco Inactive Employee is entitled to receive during such Newco Inactive Employee's absence from employment immediately prior to the Time of Contribution) to all employees of the Company and its Subsidiaries (including employees not actively at work at the Time of Contribution due to leave of absence, disability leave, military leave or layoff with recall rights ("Newco Inactive Employees")), except those to whom Acquiror or the Company Group has an obligation to offer employment or continued employment pursuant to Section 5.12(a) of the Merger Agreement (collectively "Company Group Continuing Employees"), on terms that are substantially the same as the terms on which they were employed by the Company or a Subsidiary of the Company immediately prior to the Time of Contribution; provided, however, that nothing contained in this Section 4.1 is intended to confer upon any employee who so continues to be employed or who accepts such an offer of employment by Newco or any of its Subsidiaries ("Newco Group Continuing Employees") any right to continued employment after the Time of Contribution. The Company hereby consents to Newco or one of its Subsidiaries making such offers. Newco shall recognize the service with the Company and its Subsidiaries through the Time of Contribution of each Newco Group Continuing Employee and, where applicable, each former employee of the businesses which, at the Time of Contribution, comprise the Newco Group (a "Newco Group Former Employee"), and shall credit, as of the Time of Contribution, such service with Newco (i) for all plan purposes under any employee benefit plan, arrangement or policy of the Newco Group in effect as of the Time of Contribution in which they are then participating and (ii) for eligibility and vesting purposes only under any employee benefit plan, arrangement or policy for which they become eligible on or following the Time of Contribution; provided, however, that, except as otherwise required by law or by the terms of any collective bargaining agreement,

service will be recognized under clause (i) or (ii) only to the extent such service was recognized under the Company's comparable plan or program prior to the Time of Contribution. Newco shall, or shall cause the applicable member of the Newco Group to, assume or maintain (as applicable) as of the Time of Contribution and perform the obligations of each of the Company and its Subsidiaries under the collective bargaining agreements relating to Newco Group Continuing Employees and Newco Group Former Employees and any and all collateral agreements related thereto, including those affecting all terms and conditions of employment, and to be bound by such agreements. The Company shall, or shall cause the applicable member of the Company Group to, assume or maintain (as applicable) as of the Time of Contribution and perform the obligations of each of the Company and its Subsidiaries under the collective bargaining agreements relating to Company Group Continuing Employees and former employees of the businesses which, at the Time of Contribution, comprise the Company Group ("Company Group Former Employees"), and any and all collateral agreements related thereto, including those affecting all terms and conditions of employment, and to be bound by such agreements.

4.2. Cross-License of Intellectual Property. (a) Effective as of the Time of Distribution, the Company on behalf of itself and its Subsidiaries, in consideration for the rights granted by Newco and its Subsidiaries pursuant to
Section 4.2(b), hereby grants to the Newco Group a royalty-free, world-wide, irrevocable, non-exclusive license, under all intellectual property rights (including, without limitation, patents, patent applications, trade secrets, copyrights or other similar industrial property rights, except for trademarks, trade names, service marks, trade dress or any other form of trade identity) which are owned by the Company Group as Retained Assets immediately after the Time of Contribution or under which the Company Group has a right to license as Retained Assets immediately after the Time of Contribution, and which are used in the conduct of the businesses of the Company other than the Aerospace Business or the Defense Business (whether or not such rights are also used in the conduct of the Aerospace Business or the Defense Business) at the Time of Contribution to make, have made, use, import, sell or otherwise dispose of products, or to practice any process in connection therewith, in the businesses of the Newco Group as conducted by the Company at the Time of Contribution; said non-exclusive license being transferable only in

connection with the sale of all or any part of the Newco Group's business to which such intellectual property rights relate. To the extent that the Newco Group does not have copies of any information or materials relating to such intellectual property rights, the Company shall upon reasonable request supply to the Newco Group copies of any such information or materials relating to such intellectual property rights. The Company makes no representations or warranties of any kind with respect to the validity, scope or enforceability of any such intellectual property rights licensed hereunder and the Company has no obligation to file or prosecute any patent applications or maintain any patents in force in connection therewith. The Company will, at no cost to Newco, promptly execute or cause a member of the Company Group promptly to execute such further documents as Newco may reasonably request as necessary or desirable to carry out the terms of this Section 4.2(a).

(b) Effective as of the Time of Distribution, Newco on behalf of itself and its Subsidiaries, in consideration for the rights granted by the Company and its Subsidiaries pursuant to Section 4.2(a), hereby grants to the Company Group a royalty-free, world-wide, irrevocable, non-exclusive license, under all intellectual property rights (including, without limitation, patents, patent applications, trade secrets, copyrights or other similar industrial property rights, except for trademarks, trade names, service marks, trade dress or any other form of trade identity), which are owned by the Newco Group as Contributed Assets immediately after the Time of Contribution or under which the Newco Group has a right to license as Contributed Assets immediately after the Time of Contribution, and which are used in the conduct of the Aerospace Business or the Defense Business (whether or not such rights are also used in the conduct of the other businesses of the Company) at the Time of Contribution to make, have made, use, import, sell or otherwise dispose of products, or to practice any process in connection therewith, in the Aerospace Business and the Defense Business as conducted by the Company at the Time of Contribution; said non-exclusive license being transferable only in connection with the sale of all or any part of the Company Group's business to which such intellectual property rights relate. To the extent that the Company Group does not have copies of any information or materials relating to such intellectual property rights, Newco shall upon reasonable request supply to the Company Group copies of any such information or materials relating to such intellectual property rights. Newco makes no

representations or warranties of any kind with respect to the validity, scope or enforceability of any such intellectual property rights licensed hereunder and Newco has no obligation to file or prosecute any patent applications or maintain any patents in force in connection therewith. Newco will, at no cost to the Company, promptly execute or cause a member of the Newco Group promptly to execute such further documents as the Company may reasonably request as necessary or desirable to carry out the terms of this Section 4.2(b).

(c) No provision in the Reorganization Agreements shall be construed to permit any transfer of intellectual property relating to the Airborne Laser Program from any member of the Company Group to Acquiror or any other Subsidiary of Acquiror prior to award of a Government Contract for the Airborne Laser Program.

4.3. Use of Names, Trademarks, etc. (a) From and after the Effective Time, Newco shall have all rights in and, except as provided in Section 4.3(b), use of the names "Rockwell", "Rockwell International", and "Collins" and all other names, marks, scripts, type fonts, forms, styles, logos, designs, devices, trade dress, symbols and other forms of trade identity constituting Contributed Assets, and all derivatives thereof. From and after the Effective Time, the Company shall have all rights in and, except as provided in Section 4.3(c), use of the names "Autonetics", "North American Aviation" and "Rocketdyne" and all other names, marks, scripts, type fonts, forms, styles, logos, designs, devices, trade dress, symbols and other forms of trade identity constituting Retained Assets, and all derivatives thereof. Prior to or promptly after the Effective Time, the Company shall change the name of any Subsidiary or other Person under its control to eliminate therefrom the names "Rockwell", "Rockwell International" and "Collins" and all derivatives thereof, and Newco shall change the name of any Subsidiary or other Person under its control to eliminate therefrom the names "Autonetics", "North American Aviation" and "Rocketdyne" and all derivatives thereof.

(b) From and after the Effective Time, except as permitted in this
Section 4.3(b), the Company Group shall not use or have any rights to the names "Rockwell", "Rockwell International" and "Collins" or any derivatives thereof or any trademark, trade name, service mark or logo of the Newco Group constituting a Contributed Asset, including the trademarks, trade names and service marks

"Rockwell", "Rockwell International" and "Collins", or any corporate symbol related thereto or any thereof or any name or mark which includes the words "Rockwell", "Rockwell International" or "Collins" or any other Contributed Asset or any derivative thereof or name or mark confusingly similar thereto or special script, type font, form, style, logo, design, device, trade dress, or symbol used or possessed by the Company before the Effective Time or Newco after the Effective Time which contains the trademark, trade name or service mark "Rockwell", "Rockwell International" or "Collins" or any other Contributed Asset or any derivative thereof or name or mark confusingly similar thereto and the Company Group will not hold itself out as having any affiliation with the Newco Group. However, the Company Group may utilize without obligation to pay royalties to Newco the trademarks or trade names "Rockwell", "Rockwell International" or "Collins" or any corporate symbol related thereto or any thereof in connection with stationery, supplies, labels, catalogs, vehicles, signs, finished goods inventory and work-in-process constituting Retained Assets as of the Time of Contribution, subject to the terms and conditions of this Section 4.3:

(i) All documents constituting Retained Assets as of the Time of Contribution within the following categories may be used for the duration of the periods following the Effective Time indicated below or until the supply is exhausted, whichever is the first to occur:

                                                    Maximum Period of
                                                      Permitted Use
                                                      Following the
            Category of Documents                     Effective Time
            ---------------------                   -----------------

A.  Stationery                                         4 months

B.  Invoices, purchase orders,
    debit and credit memos and
    other similar documents of a
    transactional nature                               4 months

C.  Business cards                                     3 months

D.  Other outside forms such as
    packing lists, labels,
    packing materials and
    cartons, etc.                                      4 months

E.  Forms for internal use only                       12 months

F.  Product literature                                12 months;

provided, however, that no document within any of the above categories A, B or F may be used by the Company Group for any purpose within the stated period unless such document clearly and prominently displays a statement, the form of which is approved by Newco, to the effect that the Aerospace Business or the Defense Business, as the case may be, is no longer affiliated with Newco.

(ii) All vehicles constituting Retained Assets as of the Time of Contribution may continue to be used without re-marking (except as to legally required permit numbers, license numbers, etc.) for a period not to exceed six months following the Effective Time or the date of disposition of the vehicle, whichever is the first to occur. The Company shall cause all markings on such vehicles to be removed or permanently obscured prior to disposition of such vehicles.

(iii) Within three months following the Effective Time, the Company shall cause to be removed from display at all facilities constituting Retained Assets as of the Time of Contribution all demountable displays which contain the trademarks or trade names "Rockwell", "Rockwell International" or "Collins" or any corporate symbol related thereto or any thereof constituting Contributed Assets and the Company shall remove, or shall cause the removal of all signs displaying any such trademark, trade name or corporate symbol constituting Contributed Assets at all such facilities no later than six months following the Effective Time.

(iv) Products in finished goods inventory and work-in-process constituting Retained Assets as of the Time of Contribution may be disposed of by the Company Group following the Effective Time without re-marking.

(c) From and after the Effective Time, the Newco Group will not hold itself out as having an affiliation with the Company Group. However, the Newco Group shall have rights to use trademarks or trade names or corporate symbols related thereto or any thereof constituting Retained Assets of the Company Group in connection with stationery, supplies, labels, catalogs, vehicles, signs and finished goods inventory constituting Contributed Assets as of the

Time of Contribution on the same terms and subject to the same conditions as are set forth in Section 4.3(b).

4.4. Further Assurances. Each of the parties hereto, at its own cost and expense, promptly shall execute such documents and other instruments and take such further actions as may be reasonably required or desirable to carry out the provisions hereof and to consummate the transactions contemplated hereby.

4.5. Cooperation. The parties shall cooperate with each other in all reasonable respects to ensure the transfer to Newco or to one of the Operating Subsidiaries of the Contributed Assets, the Assumed Liabilities and the businesses related thereto, and the retention by the Company of the Retained Business, including, without limitation, (i) allocating rights and obligations under contracts, agreements and other arrangements, if any, of the Company that relate to both the Retained Business and the businesses contributed to Newco or the Operating Subsidiaries and (ii) determining whether to enter into any service or other sharing agreements on a mutually acceptable arms-length basis that may be necessary to assure a smooth and orderly transition.

ARTICLE V

TAX MATTERS

5.1. Tax Allocation. Prior to the Time of Distribution, Newco, Acquiror and the Company shall enter into a Tax Allocation Agreement in substantially the form attached as Annex B to the Merger Agreement.

5.2. Tax Matters. Notwithstanding anything to the contrary in this Agreement, liabilities of the parties for Taxes are subject to the terms of the Tax Allocation Agreement. All obligations of Newco under the Tax Allocation Agreement shall be treated as Assumed Liabilities and not as Retained Liabilities under this Agreement and all obligations of the Company under the Tax Allocation Agreement shall be treated as Retained Liabilities and not as Assumed Liabilities under this Agreement. The Contribution and Distribution are intended to qualify as transactions described in Sections 351 and 355 of the Code and/or a "reorganization" within the meaning of Section 368(a)(1)(D) of the Code and the Merger is intended

to qualify as a "reorganization" within the meaning of Section 368(a)(1)(B) of the Code.

5.3. Transfer Taxes. Newco (or, if actually paid prior to the Effective Time, the Company) shall pay or cause to be paid any Transfer Taxes (as defined in the Tax Allocation Agreement) imposed in connection with or as a result of the Contribution or the Distribution.

ARTICLE VI

MUTUAL RELEASE

6.1. Mutual Release, etc. Effective as of the Time of Distribution and except as otherwise specifically set forth in the Reorganization Agreements or the Transition Agreement, each of Newco, on the one hand, and the Company, on the other hand, on its own behalf and on behalf of each of its respective Subsidiaries, releases and forever discharges the other and its Subsidiaries, and its and their respective officers, directors, agents, Affiliates, record and beneficial security holders (including, without limitation, trustees and beneficiaries of trusts holding such securities), advisors and Representatives (in their respective capacities as such) and their respective heirs, executors, administrators, successors and assigns, of and from all debts, demands, actions, causes of action, suits, accounts, covenants, contracts, agreements, damages, claims and Liabilities whatsoever of every name and nature, both in law and in equity, which the releasing party has or ever had, which arise out of or relate to events, circumstances or actions taken by such other party occurring or failing to occur or any conditions existing on or prior to the Time of Distribution; provided, however, that the foregoing general release shall not apply to (i) any Liabilities (including Liabilities with respect to indemnification) under the Transition Agreement or assumed, transferred, assigned, allocated or arising under any of the Reorganization Agreements and shall not affect any party's right to enforce the Reorganization Agreements or the Transition Agreement in accordance with their terms, (ii) any Liability arising from or relating to Intercompany Arrangements to the extent such Liabilities are not required pursuant to Section 2.5 to be settled or otherwise eliminated at or before the Closing, (iii) any Liability the release of which would result in the release of any Person other than a Person released pursuant to this Section 6.1 (provided that the parties agree not to

bring suit or permit any of their Subsidiaries to bring suit against any Person with respect to any Liability to the extent such Person would be released with respect to such Liabilities by this Section 6.1 but for the proviso to this clause (iii)) or (iv) any matter set forth on Schedule 6.1. Each party understands and agrees that, except as otherwise specifically provided in the Reorganization Agreements, neither Group is, in the Reorganization Agreements or otherwise, representing or warranting in any way as to the Assets, business or Liabilities transferred, assumed or retained as contemplated hereby or as to any consents or approvals required in connection with the consummation of the transactions contemplated by the Reorganization Agreements, it being agreed and understood that each party shall take or keep all of its Assets "as is" and that it shall bear the economic and legal risk that conveyance of such Assets shall prove to be insufficient or that the title to any Assets shall be other than good and marketable and free from encumbrances of any nature whatsoever.

ARTICLE VII

ACCESS TO INFORMATION

7.1. Provision of Corporate Records. Prior to or as promptly as practicable after the Time of Contribution the Company shall deliver to Newco all minute books and other records of meetings of the Board of Directors, committees of the Board of Directors, stockholders and security owners of the Company and its predecessors, all stockholder and security owner records of the Company and its predecessors, all corporate books and records of the Newco Group in its possession and the relevant portions (or copies thereof) of all corporate books and records of the Company Group relating directly and primarily to the Contributed Assets or the Assumed Liabilities, including, in each case, all active agreements, active litigation files and government filings. From and after the Time of Contribution, all such books, records and copies shall be the property of Newco. Prior to or as promptly as practicable after the Time of Contribution, Newco shall deliver to the Company all corporate books and records of the Retained Subsidiaries in Newco's possession and the relevant portions (or copies thereof) of all corporate books and records of the Newco Group relating directly and primarily to the Retained Assets, the Aerospace Business, the Defense Business, the Additional Retained Facilities

(except to the extent relating primarily to the business of the Newco Companies)
or the Retained Liabilities, including, in each case, all active agreements, active litigation files and government filings. From and after the Time of Contribution, all such books, records and copies shall be the property of the Company.

7.2. Access to Information. From and after the Time of Contribution, each of the Company and Newco shall afford to the other and to the other's Representatives reasonable access and duplicating rights (at the requesting party's expense) during normal business hours and upon reasonable advance notice to all Information within the possession or control of any member of the Company Group or the Newco Group, as the case may be, relating to the business, Assets or Liabilities as they existed prior to the Time of Contribution or relating to or arising in connection with the relationship between the constituent elements of the Groups on or prior to the Time of Contribution, insofar as such access is reasonably required for a reasonable purpose, subject to the provisions below regarding Privileged Information. Without limiting the foregoing, Information may be requested under this Section 7.2 for audit, accounting, claims, litigation and Tax purposes, as well as for purposes of fulfilling disclosure and reporting obligations. In furtherance of the foregoing:

(a) Each party hereto acknowledges that (i) each of the Company and Newco (and the members of the Company Group and the Newco Group, respectively) has or may obtain Privileged Information; (ii) there are a number of Litigation Matters affecting each or all of the Company, Newco and the Operating Subsidiaries; (iii) the Company, Newco and the Operating Subsidiaries have a common legal interest in Litigation Matters, in the Privileged Information, and in the preservation of the confidential status of the Privileged Information, in each case relating to the business of the Company Group or the Newco Group as it existed prior to the Time of Contribution or relating to or arising in connection with the relationship between the constituent elements of the Groups on or prior to the Time of Contribution; and (iv) both the Company and Newco intend that the transactions contemplated by the Reorganization Agreements and any transfer of Privileged Information in connection therewith shall not operate as a waiver of any potentially applicable privilege.

(b) Each of the Company and Newco agrees, on behalf of itself and each member of the Group of which it is a member, not to disclose or otherwise waive any privilege attaching to any Privileged Information relating to the business of the Newco Group or the Company Group as it existed prior to the Time of Contribution, respectively, or relating to or arising in connection with the relationship between the Groups on or prior to the Time of Contribution, without providing prompt written notice to and obtaining the prior written consent of the other, which consent shall not be unreasonably withheld and shall not be withheld if the other party certifies that such disclosure is to be made in response to a likely threat of suspension or debarment or similar action; provided, however, that the Company and Newco may make such disclosure or waiver with respect to Privileged Information if such Privileged Information relates solely to the business of the Company Group as it existed prior to the Time of Contribution in the case of the Company or the business of the Newco Group as it existed prior to the Time of Contribution in the case of Newco. In the event of a disagreement between any member of the Company Group and any member of the Newco Group concerning the reasonableness of withholding such consent, no disclosure shall be made prior to a final, nonappealable resolution of such disagreement by a court of competent jurisdiction.

(c) Upon any member of the Company Group or any member of the Newco Group receiving any subpoena or other compulsory disclosure notice from a court, other governmental agency or otherwise which requests disclosure of Privileged Information, in each case relating to the business of the Newco Group or the Company Group, respectively, as it existed prior to the Time of Contribution or relating to or arising in connection with the relationship between the constituent elements of the Groups on or prior to the Time of Contribution, the recipient of the notice shall promptly provide to the other Group (following the notice provisions set forth herein) a copy of such notice, the intended response, and all materials or information relating to the other Group that might be disclosed. In the event of a disagreement as to the intended response or disclosure, unless and until the disagreement is resolved as provided in subsection (b), the parties shall cooperate to assert all defenses to

disclosure claimed by either Group, at the cost and expense of the Group claiming such defense to disclosure, and shall not disclose any disputed documents or information until all legal defenses and claims of privilege have been finally determined.

7.3. Production of Witnesses. Subject to Section 7.2, after the Time of Contribution, each of the Company and Newco shall, and shall cause each member of the Company Group and the Newco Group, respectively, to, make available to Newco or any member of the Newco Group or to the Company or any member of the Company Group, as the case may be, upon written request, such Group's directors, officers, employees and agents as witnesses to the extent that any such Person may reasonably be required in connection with any Litigation Matters, administrative or other proceedings in which the requesting party may from time to time be involved and relating to the business of the Newco Group or the Company Group as it existed prior to the Time of Contribution or relating to or in connection with the relationship between the constituent elements of the Groups on or prior to the Time of Contribution, provided that the same shall not unreasonably interfere with the conduct of business by the Group of which the request is made. The Group requesting such assistance shall reimburse the other Group for all reasonable out-of-pocket expenses incurred by the other Group in complying with any such request.

7.4. Retention of Records. Except as provided in the Reorganization Agreements or as otherwise agreed in writing, if any Information relating to the business, Assets or Liabilities of a member of a Group as they existed prior to the Time of Contribution is retained by a member of the other Group, each of the Company and Newco shall, and shall cause the members of the Group of which it is a member to, retain all such Information in such Group's possession or under its control until such Information is at least ten years old except that if, prior to the expiration of such period, any member of either Group wishes to destroy or dispose of any such Information that is at least three years old, prior to destroying or disposing of any of such Information, (1) Newco or the Company, on behalf of the member of its Group that is proposing to dispose of or destroy any such Information, shall provide no less than 30 days' prior written notice to the other party, specifying the Information proposed to be destroyed or disposed of, and (2) if, prior to the scheduled date for such destruction or disposal, the other party requests in writing that any of

the Information proposed to be destroyed or disposed of be delivered to such other party, the party whose Group is proposing to dispose of or destroy such Information promptly shall arrange for the delivery of the requested Information to a location specified by, and at the expense of, the requesting party.

7.5. Confidentiality. Subject to Section 7.2, which shall govern Privileged Information, from and after the Time of Contribution, each of the Company and Newco shall hold, and shall use reasonable efforts to cause its Affiliates and Representatives to hold, in strict confidence all Information concerning the other party's Group obtained by it prior to the Time of Contribution or furnished to it by such other party's Group pursuant to the Reorganization Agreements and shall not release or disclose such Information to any other Person, except its Affiliates and Representatives, who shall be bound by the provisions of this Section 7.5, and each party shall be responsible for a breach of this Section 7.5 by any of its Affiliates or Representatives; provided, however, that any member of the Company Group or the Newco Group may disclose such Information to the extent that (a) disclosure is compelled by judicial or administrative process or, in the opinion of such Person's counsel, by other requirements of law, or (b) such Person can show that such Information was (i) available to such Person on a nonconfidential basis (other than from a member of the other party's Group) prior to its disclosure by such Person, (ii) in the public domain through no fault of such Person or (iii) lawfully acquired by such Person from another source after the time that it was furnished to such Person by the other party's Group, and not acquired from such source subject to any confidentiality obligation on the part of such source, or on the part of the acquiror, known to the acquiror. Notwithstanding the foregoing, each of the Company and Newco shall be deemed to have satisfied its obligations under this
Section 7.5 with respect to any Information (other than Privileged Information) if it exercises the same care with regard to such Information as it takes to preserve confidentiality for its own similar Information.

ARTICLE VIII

EMPLOYEE BENEFIT PLANS

8.1. Employee Benefits Generally. All obligations of the Newco Group under this Article VIII with respect to employee benefit plans, arrangements or policies for the benefit of employees and former employees (and their beneficiaries) of the Company and its Subsidiaries in place immediately prior to the Time of Contribution shall be treated as Assumed Liabilities and not as Retained Liabilities under this Agreement. All obligations of the Company Group under this Article VIII with respect to the employee benefit plans, arrangements or policies for the benefit of employees and former employees (and their beneficiaries) of the Company and its Subsidiaries in place immediately prior to the Time of Contribution shall be treated as Retained Liabilities and not as Assumed Liabilities under this Agreement.

8.2. Retirement Plans.

(a) Rockwell Retirement Plan for Eligible Employees.

(i) Prior to the Time of Contribution, the Company shall have established a new group trust under the Rockwell Retirement Plan, which shall be exempt from taxation under Section 501(a) of the Code (the "Newco Group Trust") and the purpose of which shall be to hold, as provided below, certain assets of the Rockwell Retirement Plan and assets attributable to the liabilities under the defined benefit pension plans set forth in Schedule 8.2(b) hereto (the "Reliance Retirement Plans"). Prior to the Time of Contribution, an amount of assets equal to the sum of (A) the accumulated benefit obligation ("ABO") (as determined in the following sentence) of the current and former employees of the Company and its Subsidiaries who are expected to be, as of the Time of the Contribution, Newco Group Transferred Participants (as defined in Section 8.2(a)(ii) hereof) and (B) $200,000,000 shall have been transferred from the Rockwell Group Trust to the Newco Group Trust in the amounts, form and manner described in Section 8.2(c) below. Such ABO shall have been determined as of December 31, 1995 in accordance with the Statement of Financial Accounting Standards No. 87 ("FAS 87") utilizing a discount rate of 7% and

actuarial assumptions (other than such discount rate) specified in the actuarial valuation for the Rockwell Retirement Plan prepared as of January 1, 1996 (the "January 1, 1996 Actuarial Valuation"). Such ABO shall have been determined by an enrolled actuary appointed by Newco (the "Newco Actuary") and shall be binding and conclusive upon Newco, the Company and Acquiror other than as provided in Sections 8.2(a)(iv) and 8.2(a)(v) hereof.

(ii) Prior to the Time of Contribution, the Company or Newco shall have established a defined benefit pension plan which shall be qualified under Section 401(a) of the Code (the "Newco Retirement Plan") effective as of the Time of Contribution covering (A) Newco Group Continuing Employees and (B) former employees of the Company and its Subsidiaries who terminated employment on or after January 1, 1996 (other than Company Group Former Employees) (such Newco Group Continuing Employees and such former employees are hereinafter referred to as "Newco Group Transferred Participants"). The Newco Retirement Plan shall contain provisions comparable in all material respects to and no less favorable in the aggregate than those of the Rockwell Retirement Plan immediately prior to the time of adoption of the Newco Retirement Plan. As soon as practicable following the establishment of the Newco Retirement Plan, but in no event later than 30 days prior to the Time of Contribution, the Company and Newco shall have filed with the IRS proper notice on IRS Forms 5310-A regarding the transfer of assets and liabilities from the Rockwell Retirement Plan to the Newco Retirement Plan.

(iii) Effective as of the Time of Contribution, Newco shall sponsor the Newco Retirement Plan and assume the Newco Group Trust. Effective as of the Time of Contribution, the Company shall continue to sponsor the Rockwell Retirement Plan and Rockwell Group Trust, and shall change the name of the Rockwell Retirement Plan and Rockwell Group Trust to eliminate any reference to "Rockwell". The Company and Newco shall take such further actions as may be necessary or appropriate to (A) establish Newco as the sponsor of the Newco Retirement Plan and provide for the assumption of the Newco Group Trust by Newco and (B) provide for the continued sponsorship of the

Rockwell Retirement Plan and the Rockwell Group Trust by the Company. As soon as practicable following the latest of (A) the Time of Contribution, (B) the expiration of the applicable waiting period without receiving an adverse response from the appropriate government agencies and (C) receipt by the Company of an opinion of Newco's counsel, in a form reasonably satisfactory to the Company, that the form of the Newco Retirement Plan meets the requirements of Section 401(a) of the Code, the Rockwell Retirement Plan shall transfer to the Newco Retirement Plan (1) all accrued benefits and other liabilities attributable to Newco Group Transferred Participants (collectively, the "Transferred Benefits") and
(2) the assets attributable thereto (the "Transferred Amount") in the amounts, form and manner described in this Section 8.2(a) and Section 8.2(c) below. Following the transfers of the Transferred Amount and the Transferred Benefits from the Rockwell Retirement Plan and Rockwell Group Trust to the Newco Retirement Plan and Newco Group Trust as provided herein, the Company Group shall have no further liability whatsoever (either under this Agreement or otherwise) with respect to the Newco Group Transferred Participants for benefits under the Rockwell Retirement Plan and, except as otherwise provided in Section 8.2(a)(vi), the Newco Group shall have no further liability whatsoever (either under this Agreement or otherwise) with respect to the participants under the Rockwell Retirement Plan. The Rockwell Retirement Plan shall retain liability for the Newco Group Former Employees who were participants in the Rockwell Retirement Plan and who terminated employment with the Company or any of its Subsidiaries prior to January 1, 1996.

(iv) Within 150 days following the Time of Contribution, Newco shall cause the Newco Actuary to prepare and deliver to Newco an actuarial valuation (the "Actuarial Valuation") which shall: (A) certify the ABO for Newco Group Transferred Participants and the ABO for all other participants in the Rockwell Retirement Plan and the Newco Retirement Plan as of the Time of Contribution, each of which ABO shall be determined in accordance with FAS 87, utilizing a discount rate of 8% and actuarial assumptions (other than such discount rate) specified in the January 1, 1996 Actuarial Valuation; (B) set forth the fair market value of the assets for the Rockwell Retirement Plan

and the Newco Retirement Plan as of the Time of Contribution and (C) set forth the calculation of the Transferred Amount (equal to the product of (A) multiplied by (B) as defined in Section 8.2(a)(v)), which amount shall be calculated in accordance with Section 414(l) of the Code, the Treasury Regulations thereunder and this Section 8.2(a)(iv). Newco shall deliver to the Company the Actuarial Valuation. Within 60 days of receipt of the Actuarial Valuation, the Company shall (A) cause an enrolled actuary selected by the Company (the "Company Actuary") to confirm the accuracy (based upon the assumptions referred to in clause (A) of this Section 8.2(a)(iv)) of the Actuarial Valuation (including the underlying data used by the Newco Actuary to prepare such Actuarial Valuation) and (B) provide to Newco a written statement of whether the Company Actuary has confirmed the accuracy of such Actuarial Valuation. In the event that the Company Actuary disputes the accuracy of the Actuarial Valuation within such 60-day period, Newco and the Company shall, within 30 days following the end of the 60-day period described in the preceding sentence, make all reasonable efforts to cause the Newco Actuary and the Company Actuary to resolve the dispute or, if such dispute cannot be resolved, select an actuarial firm of national repute (the "Third Actuary") to determine the amounts referred to in clauses (A), (B) and (C) of the first sentence of this Section 8.2(a)(iv), which determination shall be final and binding upon Newco, the Company and the Acquiror. In the event that Newco and the Company are unable to select a Third Actuary within such 30-day period, an arbitrator shall appoint such Third Actuary, which determination shall be final and binding upon Newco, the Company and the Acquiror. Such arbitrator shall be appointed in accordance with the rules of the New York, New York office of the American Arbitration Association. The Company shall pay the cost of the Company Actuary, Newco shall pay the cost of the Newco Actuary and, to the extent necessary, the cost of the Third Actuary and arbitrator shall be shared equally by the Company and Newco. The use of a Third Actuary and arbitrator and the allocation of the costs thereof shall be referred to as the "Actuarial Dispute Resolution Process".

(v) As soon as practicable following the satisfaction of the conditions set forth in Section 8.2(a)(iv), an amount determined in accordance with

this Section 8.2(a)(v) shall be transferred from the Rockwell Retirement Plan to the Newco Retirement Plan (or from the Newco Retirement Plan to the Rockwell Retirement Plan, as the case may be). For purposes of this
Section 8.2(a)(v), (A) is the fraction, the numerator of which is the ABO for the Newco Group Transferred Participants as of the Time of Contribution, and the denominator of which is the total ABO for all participants covered under the Rockwell Retirement Plan and Newco Retirement Plan as of the Time of Contribution, (B) is the total combined fair market value of the assets of the Rockwell Retirement Plan and Newco Retirement Plan as of the Time of Contribution, (C) is the fair market value of the assets in the Newco Retirement Plan as of the Time of Contribution and (D) is an amount equal to the product of (A) multiplied by (B). For all purposes of this Section 8.2(a)(v), the amount of ABO shall be determined in accordance with Section 8.2(a)(iv). If (D) is greater than (C), then an amount equal to the excess of (D) over (C) shall be transferred from the Rockwell Retirement Plan to the Newco Retirement Plan. If (D) is less than (C), then an amount equal to the excess of (C) over (D) shall be transferred from the Newco Retirement Plan to the Rockwell Retirement Plan. Any amount to be transferred pursuant to this
Section 8.2(a)(v) shall bear interest from the Time of Contribution to the date of payment (calculated based on actual days elapsed in a 365-day year) at a rate of 8% per annum and, to the extent applicable, shall be decreased by the amount of any benefit payments and normal expenses of administration not attributable to participants in the plan from which the amount is transferable.

(vi) Newco shall reimburse the Company, on an annual plan-year basis, for any additional amounts paid to or in respect of Newco Group Former Employees who are not Newco Group Transferred Participants and their beneficiaries under the Rockwell Retirement Plan as a result of any increase in the benefits provided to such Newco Group Former Employees and their beneficiaries over the benefits payable to such persons at the Time of Contribution which increase is implemented by the Company upon the written request of Newco. Such increase for each year shall be the aggregate amount actually paid under the Rockwell Retirement Plan to or in respect of the Newco Group Former Employees who are

not Newco Group Transferred Participants and their beneficiaries during such plan year over the aggregate amount payable to such persons under the Rockwell Retirement Plan as in effect at the Time of Contribution. The determination of the amount to be reimbursed to the Company by Newco shall be made by the Company Actuary and shall be subject to review by the Newco Actuary. If the Company Actuary and the Newco Actuary shall disagree as to the amount to be reimbursed, the Company and Newco shall use the Actuarial Dispute Resolution Process to determine the amount of reimbursement.

(b) Reliance Retirement Plans.

(i) Prior to the Time of Contribution, the assets attributable to the liabilities under the Reliance Retirement Plans shall have been transferred from the Rockwell Group Trust to the Newco Group Trust. The assets transferred from the Rockwell Group Trust to the Newco Group Trust to fund the liabilities under the Reliance Retirement Plans shall have been determined in the manner set forth in Section 8.2(c).

(ii) Effective as of the Time of Contribution, Newco shall cause the appropriate member or members of the Newco Group to continue sponsorship of the Reliance Retirement Plans. Prior to, on and after the Time of Contribution, the Company and Newco and the appropriate member of the Newco Group each shall have taken and shall take such actions as may be necessary or appropriate to establish the appropriate member of the Newco Group to continue the sponsorship of the Reliance Retirement Plans.

(c) Selection of Assets.

(i) The assets that shall have been transferred from the Rockwell Group Trust to the Newco Group Trust pursuant to Sections 8.2(a)(i) and 8.2(b) shall have been selected as hereinafter set forth in this Section
8.2(c)(i). First, assets invested in insurance and annuity contracts that were attributable specifically to the subplans and groups of Newco Group Transferred Participants or participants in the Reliance Retirement Plans (the "Earmarked Investments") shall have been transferred to the Newco Group Trust. Second, the remaining assets transferred from the

Rockwell Group Trust to the Newco Group Trust shall have been comprised of assets invested by each such investment manager set forth on Schedule 8.2(c) (each, an "Investment Manager"). The amount of assets managed by each Investment Manager that shall have been allocated to the Newco Group Trust from the Rockwell Group Trust shall be an amount equal to the product of (A) multiplied by (B), where (A) equals a fraction, the numerator of which is the fair market value of the assets managed by such individual Investment Manager as of the close of business on the day immediately preceding the date of transfer and the denominator of which is the aggregate fair market value of the assets as of the close of business on the day immediately preceding the date of transfer managed by all of the Investment Managers, and where (B) equals the amount of assets transferred to the Newco Group Trust pursuant to Section 8.2(a)(i) and 8.2(b) minus the amount of Earmarked Assets. The selection of specific assets managed by each Investment Manager transferred to the Newco Group Trust or liquidated to fund such transfer, in the amount determined in accordance with the immediately preceding sentence, shall have been made on a pro rata basis among the assets managed by such Investment Manager. Notwithstanding the foregoing, if the total fair market value of the assets managed by the Investment Managers as of the close of business on the day immediately preceding the date of the transfer was less than the amount set forth in clause (B) of the preceding sentence, then the remaining assets that shall have been transferred to the Newco Group Trust shall have been determined on a basis mutually agreed upon by the Company and Newco.

(ii) The assets to be transferred from the Rockwell Group Trust to the Newco Group Trust or from the Newco Group Trust to the Rockwell Group Trust, as the case may be, pursuant to Section 8.2(a)(v) shall be in cash and marketable securities as mutually agreed upon by the Company and Newco.

(d) The Company and Newco shall use and shall have used their reasonable best efforts to effectuate the actions contemplated under this
Section 8.2 on a timely basis as provided herein.

8.3. Savings Plans.

(a) Rockwell International Corporation Savings Plan. Effective as of the Time of Contribution, Newco shall assume sponsorship of the Rockwell International Corporation Savings Plan (the "Rockwell Savings Plan") and trust related thereto and shall cause each Company Group Continuing Employee to have a fully nonforfeitable right to such Continuing Employee's account balances, if any, under the Rockwell Savings Plan. The account balances of each Company Group Continuing Employee shall be maintained under the Rockwell Savings Plan until distributed in accordance with the terms of the Rockwell Savings Plan and applicable law.

(b) Rockwell Hourly Savings Plans. Effective as of the Time of Contribution, Newco shall, or shall cause one or more of its Subsidiaries to, assume sponsorship of the Rockwell Retirement Savings Plan for Certain Employees (the "Rockwell Hourly Savings Plan") and the trust related thereto and shall cause each Company Group Continuing Employee to have a fully nonforfeitable right to such Company Group Continuing Employee's account balances, if any, under the Rockwell Hourly Savings Plan. The account balances of each Company Group Continuing Employee shall be maintained under the Rockwell Hourly Savings Plan until distributed in accordance with the terms of the Rockwell Hourly Savings Plan and applicable law.

(c) Plant Savings Plans. Effective as of the Time of Contribution, Newco shall, or shall cause one or more of its Subsidiaries to, assume sponsorship of the Asheville Employees Retirement Savings Plan Truck Axle Division, the Rockwell International Corporation Gordonsville, Tennessee Employees Savings Plan, the Rockwell International Corporation Retirement Plan for Hourly Employees, Gordonsville, Tennessee and the York Employees Retirement Savings Plan Truck Axle Division and the respective trusts related thereto.

(d) Rockwell Savings Plan for Certain Eligible Employees. If the Rockwell Savings Plan for Certain Eligible Employees has not been merged into and with the Rockwell International Corporation Savings Plan as of the Time of Contribution, then effective as of the Time of Contribution, the Company shall, or shall cause a member of the Company Group to, assume sponsorship of the Rockwell Savings Plan for Certain Eligible Employees and the trust related thereto and shall cause each Newco Group Continuing

Employee to have a fully nonforfeitable right to such Newco Group Continuing Employee's account balances, if any, under the Rockwell Savings Plan for Certain Eligible Employees. The account balances of each Newco Group Continuing Employee shall be maintained under the Rockwell Savings Plan for Certain Eligible Employees until distributed in accordance with the terms thereof and applicable law.

8.4. Deferred Compensation Plans and Nonqualified Retirement and Savings Plans.

(a) Deferred Compensation Plans. Effective as of the Time of Contribution, Newco shall assume liability for and shall pay when due all benefits accrued as of the Time of Contribution (including, in the case of Company Group Continuing Employees and, if any, Company Group Former Employees, such individuals' vested and nonvested benefits which are accrued as of the Time of Contribution) by, and attributable to, all employees and former employees of the Company and its Subsidiaries and all present and former non-employee directors of the Company under the Rockwell International Corporation Deferred Compensation Plan as amended and restated effective July 1, 1995, the Rockwell International Corporation Annual Incentive Compensation Plan for Senior Executive Officers effective as of October 1, 1995 and the Rockwell International Corporation Deferred Compensation Policy for Non-Employee Directors (the "Deferred Compensation Plans"), and shall perform, pay and discharge fully all of the Company's and its Subsidiaries' duties, liabilities or obligations thereunder with respect to such employees, former employees and present and former non-employee directors of the Company and its Subsidiaries. Effective as of the Time of Contribution, Newco shall cause each Company Group Continuing Employee and Company Group Former Employee to have a fully nonforfeitable right to such individual's entire account balance, if any, under the Deferred Compensation Plans.

(b) Nonqualified Retirement Plans. Effective as of the Time of Contribution, Newco shall assume liability for and shall pay when due all benefits accrued as of the Time of Contribution by, and attributable to, employees and former employees of the Company and its Subsidiaries (other than Company Group Continuing Employees and Company Group Former Employees) under the Rockwell International Corporation Supplemental Retirement Plan for Highly Compensated Employees, the Rockwell International Corporation Excess Benefit Retirement Plan and the Rockwell

International Corporation Excess Benefit Plan (the "Nonqualified Retirement Plans"), and shall perform, pay and discharge fully all of the Company's and its Subsidiaries' duties, liabilities or obligations thereunder with respect to such employees and former employees. Effective as of the Time of Contribution, the Company shall assume liability for and shall pay when due all benefits accrued as of the Time of Contribution by, and attributable to, Company Group Continuing Employees and Company Group Former Employees (including such individual's vested and nonvested benefits which are accrued as of the Time of Contribution) under the Nonqualified Retirement Plans and shall perform, pay and discharge fully all of the Company's and its Subsidiaries' duties, liabilities or obligations with respect thereto.

(c) Nonqualified Savings Plans. Effective as of the Time of Contribution, Newco shall assume liability for and shall pay when due all benefits accrued as of the Time of Contribution (including, in the case of Company Group Continuing Employees and, if any, Company Group Former Employees, such individuals' vested and nonvested benefits which are accrued as of the Time of Contribution) by, and attributable to, all employees and former employees of the Company and its Subsidiaries under the Rockwell International Corporation Supplemental Savings Plan for Highly Compensated Employees and the Rockwell International Corporation Excess Benefit Savings Plan (the "Nonqualified Savings Plans"), and shall perform, pay and discharge fully all of the Company's and its Subsidiaries' duties, liabilities or obligations thereunder with respect thereto. Effective as of the Time of Contribution, Newco shall cause each Company Group Continuing Employee and Company Group Former Employee to have a fully nonforfeitable right to such individual's entire account balance, if any, under the Nonqualified Savings Plans.

8.5. Employee Stock Options. Effective as of the Time of Contribution, Newco shall assume the Company Stock Plans. The Board of Directors of the Company shall amend the Company Stock Plans, make adjustments and take actions (and Newco shall take such actions as are reasonably required to implement the same) with respect to options to acquire shares of Company Common Stock or Company Class A Common Stock, as the case may be, pursuant to any Company Stock Plan ("Company Options") which are outstanding immediately prior to the Time of Distribution to provide that, pursuant to the equitable adjustment provisions of the

applicable Company Stock Plan under which such Company Options were granted, effective as of the Time of Distribution such Company Options will be converted into and represent the right to acquire shares of Newco Common Stock and Newco Class A Common Stock, in each case with the associated Rights, with such other amendments and adjustments as are reasonable and appropriate, including such amendments as are reasonable and appropriate to ensure that any optionholder who becomes a Company Group Continuing Employee or a Company Group Former Employee as of the Time of Contribution will not forfeit any such converted options on such date under the termination of employment provisions of such plans as a result of not becoming a Newco Group Continuing Employee or a Newco Group Former Employee, and will be entitled to vesting and exercisability rights comparable to those that such optionholder has immediately prior to the Time of Contribution to the extent that such optionholder remains in continuous employment with any member of the Company Group.

8.6. Long-Term Incentive Plan. Effective as of the Time of Contribution, (i) the Company shall retain liability for all amounts due under the Rockwell International Business Unit Long-Term Incentive Plan (the "LTIP") with respect to the Company Group Continuing Employees and Company Group Former Employees and (ii) Newco shall assume liability for all amounts due under the LTIP with respect to the Newco Group Continuing Employees and Newco Group Former Employees. The amounts payable under clause (i) of the preceding sentence shall be determined by the Company on the basis that (x) the target award for each uncompleted cycle will be prorated to reflect the portion of such cycle completed as of the Time of Contribution and (y) where payment is based, in whole or in part, on the trading price of the Company Common Stock, such price shall be the average closing price per share of Company Common Stock reported on the NYSE for each full trading day during the months of August and September immediately preceding the Time of Contribution. The amount due each participant under the LTIP who is a Company Group Continuing Employee shall be paid by the Company within 90 days following the Time of Contribution. Newco shall promptly reimburse the Company, upon written request from the Company therefor, for any amount paid by the Company under the LTIP as a result of this
Section 8.6 the expense of which is not reimbursed by the United States of America under applicable Government Contracts, provided, however, that Newco shall have the opportunity to participate in any negotiations with the

applicable Governmental Entity with respect to such reimbursement or to designate counsel or a representative reasonably satisfactory to the Company to so participate on Newco's behalf unless such participation by Newco (or its counsel or representative) is barred by such agency, in which case, the Company shall consult with Newco and keep Newco apprised of any developments with respect to such negotiations. The Company shall not establish, or cause to be established, any new performance cycles under the LTIP with respect to Company Group Continuing Employees and Company Group Former Employees prior to the Time of Contribution.

8.7. Welfare Benefit Plans.

(a) Effective as of the Time of Contribution, the Company shall, or shall cause a member of the Company Group to, maintain each "employee welfare benefit plan", as defined in Section 3(1) of ERISA, and each other employee welfare benefit or fringe benefit arrangement (collectively, "Company Group Welfare Benefit Plans") sponsored or maintained by the Company or any of its Subsidiaries immediately prior to the Time of Contribution for the benefit of Company Group Continuing Employees and Company Group Former Employees (including but not limited to those plans set forth on Schedule 8.7(a)). The Company shall credit the dollar amount of all expenses incurred by Company Group Continuing Employees and Company Group Former Employees and their respective eligible dependents during the applicable plan year in which occurs the Time of Contribution for purposes of satisfying such plan year's deductible and co-payment limitations and shall credit service with the Company and its Subsidiaries earned prior to the Time of Contribution under the relevant welfare benefit plans of the Company Group. The Company shall credit each Company Group Continuing Employee with the unused vacation days and any personal and sickness days accrued in accordance with the vacation and personnel policies and labor agreements of the Company and its Subsidiaries applicable to such employees in effect as of the Time of Contribution.

(b) Effective as of the Time of Contribution, Newco shall, or shall cause a member of the Newco Group to, establish or maintain "employee welfare benefit plans", as defined in Section 3(1) of ERISA, and other employee welfare benefit or fringe benefit arrangements (collectively, "Newco Group Welfare Benefit Plans") which are comparable in the

aggregate to the "employee welfare benefit plans" and other employee benefit welfare or fringe benefit arrangements which had been maintained by the Company and its Subsidiaries immediately prior to the Time of Contribution for the benefit of Newco Group Continuing Employees and Newco Group Former Employees. Newco shall credit the dollar amount of all expenses incurred by Newco Group Continuing Employees and Newco Group Former Employees and their respective eligible dependents during the applicable plan year in which occurs the Time of Contribution for purposes of satisfying such plan year's deductible and co-payment limitations and shall credit service with the Company and its Subsidiaries earned prior to the Time of Contribution under the relevant welfare benefit plans of the Newco Group. Newco shall credit each Newco Group Continuing Employee with the unused vacation days and any personal and sickness days accrued in accordance with the vacation and personnel policies and labor agreements of the Company and its Subsidiaries applicable to such employees in effect as of the Time of Contribution.

(c) As of the Time of Contribution, the Company shall retain and continue to be responsible for all welfare benefit programs (including, but not limited to, medical, dental, life, travel accident, short- and long-term disability, hospitalization and other insurance benefits) under which claims have been incurred for expenses prior to the Time of Contribution by Company Group Continuing Employees, Company Group Former Employees and their dependents and such reimbursement for such medical and dental expenses associated with such claims (including claims submitted on behalf of disabled employees and their dependents) shall be determined in accordance with the terms of the welfare benefit programs of the Company Group as in effect immediately prior to the Time of Contribution. As of the Time of Contribution, Newco shall assume and be responsible for all welfare benefit programs (including, but not limited to, medical, dental, life, travel accident, short- and long-term disability, hospitalization and other insurance benefits) under which claims have been incurred for expenses incurred prior to the Time of Contribution by Newco Group Continuing Employees, Newco Group Former Employees and their dependents and such reimbursement for such medical and dental expenses associated with such claims (including claims submitted on behalf of disabled employees and their dependents) shall be determined in accordance with the terms of the welfare benefit programs of the Company

Group as in effect immediately prior to the Time of Contribution.

8.8. Retiree Health and Life Insurance.

(a) The Company and the Company Group, or where appropriate, the Company Group Welfare Benefit Plans, shall retain liability for all retiree health benefits and retiree life insurance which were payable prior to the Time of Contribution and/or are payable on or after the Time of Contribution to
(i) all eligible Company Group Continuing Employees (and their beneficiaries) and (ii) all eligible Company Group Former Employees (and their beneficiaries). The Company shall credit the dollar amount of all expenses incurred by Company Group Continuing Employees and Company Group Former Employees and their respective eligible dependents during the applicable plan year in which occurs the Time of Contribution for purposes of satisfying such plan year's deductible and co-payment limitations and shall credit service with the Company and its Subsidiaries earned prior to the Time of Contribution under the relevant retiree welfare benefit plans of the Company Group.

(b) Newco and the Newco Group, or where appropriate, the Newco Group Welfare Benefit Plans, shall assume liability for all retiree health benefits and retiree life insurance benefits which were payable prior to the Time of Contribution and/or are payable on or after the Time of Contribution to
(i) all eligible Newco Group Continuing Employees (and their beneficiaries) and
(ii) all eligible Newco Group Former Employees (and their beneficiaries). Newco shall credit the dollar amount of all expenses incurred by Newco Group Continuing Employees and Newco Group Former Employees and their respective eligible dependents during the applicable plan year in which occurs the Time of Contribution for purposes of satisfying such plan year's deductible and co-payment limitations and shall credit service with the Company and its Subsidiaries earned prior to the Time of Contribution under the relevant retiree welfare benefit plans of the Newco Group.

(c) As of the Time of Contribution, the Company shall retain and continue to be responsible for all retiree welfare benefit programs (including, but not limited to, medical, dental, life, travel accident, short- and long-term disability, hospitalization and other insurance benefits) under which claims have been incurred for expenses prior to the Time of Contribution by Company Group Continuing

Employees, Company Group Former Employees and their dependents and such reimbursement for such medical and dental expenses associated with such claims (including claims submitted on behalf of disabled employees and their dependents) shall be determined in accordance with the terms of the welfare benefit programs of the Company and its Subsidiaries as in effect immediately prior to the Time of Contribution. As of the Time of Contribution, Newco shall assume and be responsible for all retiree welfare benefit programs (including, but not limited to, medical, dental, life, travel accident, short- and long-term disability, hospitalization and other insurance benefits) under which claims have been incurred for expenses incurred prior to the Time of Contribution by Newco Group Continuing Employees, Newco Group Former Employees and their dependents and such reimbursement for such medical and dental expenses associated with such claims (including claims submitted on behalf of disabled employees and their dependents) shall be determined in accordance with the term of the retiree welfare benefit programs of the Company and its Subsidiaries as in effect immediately prior to the Time of Contribution.

8.9. Retention and Severance Obligations. The Company and Newco agree that the transactions contemplated by this Agreement shall not constitute a severance of employment of any Company Group Continuing Employee and Newco Group Continuing Employee prior to or as a result of the consummation of the transactions contemplated hereby, and that such employees will have continuous and uninterrupted employment with the Company Group or Newco Group, as applicable, before and immediately after the Time of Contribution. Without limiting the generality of Section 8.9, effective as of the Time of Contribution, the Company shall retain liability for and shall pay when due all amounts which may become payable under the Rockwell Retention and Severance Arrangement.

8.10. Free-Standing Plans. Effective as of the Time of Contribution, Newco shall assume, or shall cause the Newco Group to assume, all liabilities and obligations under each employee benefit plan, arrangement or policy which, prior to the Time of Contribution, is exclusively for the benefit of Newco Group Continuing Employees, Newco Group Former Employees, and their eligible beneficiaries (the "Newco Group Free-Standing Plans"). Effective as of the Time of Contribution, the Company shall retain, or shall cause the Company Group to retain, all liabilities and obligations under each employee benefit plan, arrangement or

policy which, prior to the Time of Contribution, is exclusively for the benefit of Company Group Continuing Employees, Company Group Former Employees, and their eligible beneficiaries (the "Company Group Free-Standing Plans"). The Company and Newco shall take, or cause to be taken, all such action as may be necessary or appropriate to establish the Newco Group as successor to the Company or its Subsidiaries as to all rights, assets, duties, liabilities and obligations under, or with respect to, the Newco Group Free-Standing Plans and to establish the Company Group as successor to the Company or its Subsidiaries as to all rights, assets, duties, liabilities and obligations with respect to the Company Group Free-Standing Plans.

8.11. Employment, Consulting and Severance Agreements. Effective as of the Time of Contribution, Newco shall assume, or cause the Newco Group to assume, all liabilities and obligations attributable to Newco Group Continuing Employees and Newco Group Former Employees under their respective employment, consulting and severance agreements with the Company or its Subsidiaries, as the same are in effect immediately prior to the Time of Contribution. Effective as of the Time of Contribution, the Company shall retain, or cause the Company Group to retain, all liabilities and obligations attributable to Company Group Continuing Employees and Company Group Former Employees under their respective employment, consulting and severance agreements with the Company or its Subsidiaries, as the same are in effect immediately prior to the Time of Contribution.

8.12. Welfare Plan Funding.

(a) Non-Collectively Bargained Voluntary Employees' Beneficiary Association. Prior to the Time of Contribution, Newco shall have established a voluntary employees' beneficiary association (the "Newco VEBA") under Section 501(c)(9) of the Code covering Newco Group Continuing Employees and Newco Group Former Employees who are covered under the Trust for Employee Welfare Benefit Programs of Rockwell International Corporation (the "Rockwell VEBA"). The Newco VEBA shall contain provisions comparable in all material respects to and no less favorable in the aggregate to its participants than those of the Rockwell VEBA. Prior to the Time of Contribution, the Rockwell VEBA shall have transferred to the Newco VEBA assets attributable to the Newco Group Continuing Employees and Newco Group Former Employees covered under the Rockwell VEBA. The amount of assets transferred from the Rockwell

VEBA to the Newco VEBA pursuant to this Section 8.12(a) shall have been based upon the value of the assets in the applicable employee group insurance plan as of the date of the transfer multiplied by the ratio that the costs allocated for the Newco Group Continuing Employees and Newco Group Former Employees bear to the total costs allocated under the Rockwell VEBA for the Company's government accounting fiscal year in which such transfer occurs to the date of the transfer. The Company and Newco agree to adjust the initial asset allocation set forth in the preceding sentence, based upon actual claims cost experience at such time as the actual experience is known pursuant to the Company's practices existing on the date hereof. Effective as of the Time of Contribution, Newco shall continue to sponsor the Newco VEBA. Effective as of the Time of Contribution, the Company shall continue to sponsor the Rockwell VEBA and shall change the name of the Rockwell VEBA to eliminate any reference to "Rockwell".

(b) Collectively Bargained Voluntary Employees' Beneficiary Association. Prior to the Time of Contribution, Newco shall have established a voluntary employees' beneficiary association (the "Newco Collectively Bargained VEBA") under Section 501(c)(9) covering Newco Group Continuing Employees and Newco Group Former Employees who are covered under the Agreement of Trust for Certain Collectively Bargained Welfare Benefit Plans of Rockwell International Corporation (the "Rockwell Collectively Bargained VEBA"). The Newco Collectively Bargained VEBA shall contain provisions comparable in all material respects to and no less favorable in the aggregate to its participants than those of the Rockwell Collectively Bargained VEBA. Prior to the Time of Contribution, the Rockwell Collectively Bargained VEBA shall have transferred to the Newco Collectively Bargained VEBA assets attributable to the Newco Group Continuing Employees and Newco Group Former Employees covered under the Rockwell Collectively Bargained VEBA. The amount of assets transferred from the Rockwell Collectively Bargained VEBA to the Newco Collectively Bargained VEBA pursuant to this Section 8.12(b) shall have been based upon the value of the assets in the Rockwell Collectively Bargained VEBA as of the date of the transfer multiplied by the ratio that the costs allocated for the Newco Group Continuing Employees and Newco Group Former Employees bear to the total costs allocated under the applicable employee group insurance plan for the Company's government accounting fiscal year in which such transfer occurs to the date of the transfer. Effective as of the

Time of Contribution, Newco shall continue to sponsor the Newco Collectively Bargained VEBA. Effective as of the Time of Contribution, the Company shall continue to sponsor the Rockwell Collectively Bargained VEBA and shall change the name of the Rockwell Collectively Bargained VEBA to eliminate any reference to "Rockwell".

(c) Continued Life Insurance Reserve Fund. Prior to the Time of Contribution, Newco shall have established a continued life insurance reserve fund (the "Newco CLIR Fund") covering Newco Group Continuing Employees and Newco Group Former Employees who are covered under the Continued Life Insurance Reserve Fund (the "Rockwell CLIR Fund"). The Newco CLIR Fund shall contain provisions comparable in all material respects to and no less favorable in the aggregate to its participants than those of the Rockwell CLIR Fund. Prior to the Time of Contribution, the Rockwell CLIR Fund shall have transferred to the Newco CLIR Fund assets attributable to the Newco Group Continuing Employees and Newco Group Former Employees covered under the Rockwell CLIR Fund. The amount of assets transferred from the Rockwell CLIR Fund to the Newco CLIR Fund pursuant to this Section 8.12(c) shall have been based upon the proportionate values of the assets in the Rockwell CLIR Fund attributable to Newco Group Continuing Employees and Newco Group Former Employees as of the most recent actuarial valuation for the Rockwell CLIR Fund prepared by the Newco Actuary, subject to review by the Company Actuary. In the event of a dispute between the Newco Actuary and the Company Actuary, the Actuarial Dispute Resolution Process shall be used to determine the amount of assets to be transferred. Effective as of the Time of Contribution, Newco shall continue to sponsor the Newco CLIR Fund. Effective as of the Time of Contribution, the Company shall continue to sponsor the Rockwell CLIR Fund and shall change the name of the Rockwell CLIR Fund to eliminate any reference to "Rockwell".

(d) Additional Action. Prior to, on and after the Time of Contribution, the Company and Newco each shall take and shall have taken such further actions as may be necessary or appropriate to (i) establish Newco as the sponsor of the Newco VEBA, Newco Collectively Bargained VEBA and Newco CLIR Fund, (ii) provide for the continued sponsorship by the Company of the Rockwell VEBA, Rockwell Collectively Bargained VEBA and Rockwell CLIR Fund and
(iii) cause the transfers described in this Section 8.12 to be made in accordance with applicable law and the terms of any applicable collective bargaining agreement.

8.13. Indemnification. Except as otherwise provided in this Article VIII, Newco shall indemnify, defend and hold harmless the Company Group from and against, and pay or reimburse the Company Group for, any claims made by any Newco Group Continuing Employee or Newco Group Former Employee for severance or other separation benefits, any claims based on breach of contract and any other claims arising out of or in connection with the employment or the failure to offer employment to, or the termination of employment of, any Newco Group Continuing Employee or Newco Group Former Employee. The Company shall indemnify, defend and hold harmless the Newco Group from and against, and pay or reimburse the Newco Group for, any claims made by any Company Group Continuing Employee or Company Group Former Employee for severance or other separation benefits, any claims based on breach of contract and any other claims arising out of or in connection with the employment or the failure to offer employment to, or the termination of employment of, any Company Group Continuing Employee or Company Group Former Employee. Newco shall indemnify, defend and hold harmless the Company Group from and against, and pay or reimburse the Company Group for, all liabilities resulting from any failure to file a determination letter request with the IRS within the remedial amendment period prescribed under Section 401(b) of the Code with respect to compliance with the Tax Reform Act of 1986 for any Company Pension Plan that is intended to be tax-qualified under Section 401(a) of the Code.

8.14. Cooperation. Without limiting the generality of Article VII hereof, the Company Group and Newco Group agree to promptly furnish each other with such information concerning employees and employee benefit plans, arrangements or policies as is necessary and appropriate to effect the transactions contemplated by this Article VIII.

8.15. Amendment, Modification or Termination of Benefit Plans. From and after the Time of Contribution, (i) the Company Group expressly reserves the right, in accordance with applicable law and the terms of any applicable collective bargaining agreement, to amend, modify or terminate any Benefit Plan it sponsors or maintains for Company Group Continuing Employees and Company Group Former Employees and (ii) the Newco Group expressly reserves the right, in accordance with applicable law and the terms of any applicable collective bargaining agreement, to amend, modify or terminate any Benefit Plan it sponsors or

maintains for Newco Group Continuing Employees or Newco Group Former Employees.

ARTICLE IX

CONDITIONS

9.1. Conditions to Obligations of the Company. The obligations of the Company to consummate the Distribution hereunder shall be subject to the fulfillment of each of the following conditions:

(a) All of the transactions contemplated by Article II shall have been consummated.

(b) The recapitalization of Newco in accordance with Section 3.2 shall have been consummated.

(c) Each condition to the Closing of the Merger Agreement set forth in Article VI thereof, other than (i) the condition set forth in Sections 6.1(f) thereof as to the consummation of the Contribution and the Distribution and (ii) the condition to the Acquiror's obligations set forth in
Section 6.3(d) thereof as to the satisfaction of conditions contained in this Agreement, shall have been fulfilled or waived by the party for whose benefit such condition exists.

(d) The Board of Directors of the Company shall be reasonably satisfied that, after giving effect to the Contribution, (i) the Company will not be insolvent and will not have unreasonably small capital with which to engage in its businesses and (ii) the Company's surplus would be sufficient to permit, without violation of Section 170 of the DGCL, the Distribution.

(e) Acquiror, the Company and Newco shall each have received, in form and substance reasonably satisfactory to each, the advance agreements and approvals of Governmental Entities concerning the matters described on Schedule 9.1(e).

ARTICLE X

MISCELLANEOUS AND GENERAL

10.1. Modification or Amendment. The parties hereto may modify or amend this Agreement only by written agreement executed and delivered by duly authorized officers of the respective parties.

10.2. Waiver; Remedies. The conditions to the Company's obligation to consummate the Distribution are for the sole benefit of the Company and may be waived in writing by the Company in whole or in part to the extent permitted by applicable law. No delay on the part of any party hereto in exercising any right, power or privilege hereunder will operate as a waiver thereof, nor will any waiver on the part of any party hereto of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder, nor will any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder. Unless otherwise provided, the rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies which the parties may otherwise have at law or in equity.

10.3. Counterparts. For the convenience of the parties, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts shall together constitute the same agreement.

10.4. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to contracts made and to be performed entirely within such State, without regard to the conflicts of law principles of such State.

10.5. Notices. Any notice, request, instruction or other communication to be given hereunder by any party to any other party shall be in writing and shall be deemed to have been duly given (i) on the date of delivery if delivered personally, or by telecopy or telefacsimile, upon confirmation of receipt, (ii) on the first business day following the date of dispatch if delivered by Federal Express or other nationally reputable next-day courier service, or (iii) on the third business day following the date of mailing if delivered by registered or certified

mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

(a) If to Newco or the Operating Subsidiaries:

New Rockwell International Corporation 2201 Seal Beach Boulevard
Seal Beach, California 90740-8250 Attention: William J. Calise, Jr., Esq.

Senior Vice President, General
Counsel and Secretary

Telecopy: (310) 797-5687

with copies to:

Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, New York 10112
Attention: Peter R. Kolyer, Esq.

Telecopy: (212) 541-5369

and

Wachtell, Lipton, Rosen & Katz 51 West 52nd Street
New York, New York 10019
Attention: Eric S. Robinson, Esq.

Telecopy: (212) 403-2000

(b) If to the Company:

Boeing NA, Inc.
c/o The Boeing Company
P.O. Box 3707
M/S 13-08
Seattle, Washington 98124-2207 Attention: Theodore J. Collins, Esq.

Vice President & General Counsel

Telecopy: (206) 544-4900

and

Cravath, Swaine & Moore

Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Attention: Allen Finkelson, Esq.

Telecopy: (212) 474-3700

10.6. Entire Agreement. The Reorganization Agreements (including the Annexes and Schedules thereto), the Transition Agreement and the Confidentiality Agreement constitute the entire agreement, and supersede all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof and thereof.

10.7. Certain Obligations. Whenever this Agreement requires any of the Subsidiaries of any party to take any action, this Agreement will be deemed to include an undertaking on the part of such party to cause such Subsidiary to take such action.

10.8. Assignment. No party to this Agreement shall convey, assign or otherwise transfer any of its rights or obligations under this Agreement without the express written consent of the other parties hereto in their sole and absolute discretion, except that any party hereto may assign any of its rights hereunder to a successor to all or any part of its business. Except as aforesaid, any such conveyance, assignment or transfer without the express written consent of the other parties shall be void ab initio. No assignment of this Agreement shall relieve the assigning party of its obligations hereunder.

10.9. Captions. The Article, Section and paragraph captions herein are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof.

10.10. Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the party or parties who are or are to be thereby aggrieved shall have the right of specific performance and injunctive relief giving effect to its or their rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and

remedies shall be cumulative. The parties agree that the remedies at law for any breach or threatened breach, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived.

10.11. Severability. If any provision of this Agreement or the application thereof to any person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon any such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.

10.12. Third Party Beneficiaries. Acquiror shall be a third party beneficiary of this Agreement. Nothing contained in this Agreement is intended to confer upon any Person or entity other than the parties hereto and their respective successors and permitted assigns (other than Acquiror), any benefit, right or remedies under or by reason of this Agreement, except that the provisions of Sections 6.1 and 8.13 hereof shall inure to the benefit of the persons referred to therein.

10.13. Schedules. All Schedules attached hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Matters reflected on the Schedules are not necessarily limited to matters required by this Agreement to be reflected on such Schedules. Such additional matters are set forth for informational purposes only and do not necessarily include other matters of a similar nature. Capitalized terms used in any Schedule but not otherwise defined therein shall have the respective meanings assigned to such terms in this Agreement.

10.14. Consent to Jurisdiction. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of (i) the Superior Court of the State of

California, San Francisco County and (ii) the United States District Court for the Northern District of California for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby (and agrees not to commence any action, suit or proceeding relating hereto except in such courts). Each of the parties hereto further agrees that service of any process, summons, notice or document hand delivered or sent by registered mail to such party's respective address set forth in Section 10.5 will be effective service of process for any action, suit or proceeding in California with respect to any matters to which it has submitted to jurisdiction as set forth in the immediately preceding sentence. Each of the parties hereto irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in (i) the Superior Court of the State of California, San Francisco County or (ii) the United States District Court for the Northern District of California, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties hereto as of the date first hereinabove written.

ROCKWELL INTERNATIONAL CORPORATION

By: /s/ WILLIAM J. CALISE, JR.
    --------------------------------
    Name:   William J. Calise, Jr.
    Title:  Senior Vice President

NEW ROCKWELL INTERNATIONAL CORPORATION

By: /s/ WILLIAM J. CALISE, JR.
    --------------------------------
    Name:   William J. Calise, Jr.
    Title:  Senior Vice President

ALLEN-BRADLEY COMPANY, INC.

By: /s/ WILLIAM J. CALISE, JR.
    --------------------------------
    Name:   William J. Calise, Jr.
    Title:  Vice President

ROCKWELL COLLINS, INC.

By: /s/ WILLIAM J. CALISE, JR.
    --------------------------------
    Name:   William J. Calise, Jr.
    Title:  Vice President

ROCKWELL SEMICONDUCTOR SYSTEMS, INC.

By: /s/ WILLIAM J. CALISE, JR.
    --------------------------------
    Name:   William J. Calise, Jr.
    Title:  Vice President

ROCKWELL LIGHT VEHICLE SYSTEMS, INC.

By: /s/ WILLIAM J. CALISE, JR.
    --------------------------------
    Name:   William J. Calise, Jr.
    Title:  Vice President

ROCKWELL HEAVY VEHICLE SYSTEMS, INC.

By: /s/ WILLIAM J. CALISE, JR.
    --------------------------------
    Name:   William J. Calise, Jr.
    Title:  Vice President

Exhibit 10(c)

CONFORMED COPY

POST-CLOSING COVENANTS AGREEMENT

dated as of December 6, 1996,

among

ROCKWELL INTERNATIONAL CORPORATION,

THE BOEING COMPANY

BOEING NA, INC.

and

NEW ROCKWELL INTERNATIONAL CORPORATION

TABLE OF CONTENTS

                                                                  Page
                                                                  ----
                                   ARTICLE I

                                  DEFINITIONS

 1.1. Definitions .........................................          2


                                   ARTICLE II

                                 INDEMNIFICATION

 2.1.  Indemnification by Newco ...........................          3
 2.2.  Indemnification by the Company .....................          6
 2.3.  Procedures Relating to Indemnification .............          7
 2.4.  Certain Limitations ................................         12
 2.5.  Limitation on Newco's Indemnification
       Obligation under Section 2.1(a)(iv) ................         13
 2.6.  Exclusivity of Tax Allocation Agreement ............         14


                                   ARTICLE III

                                OTHER AGREEMENTS

 3.1.  Transfer Taxes .....................................         15
 3.2.  Conduct of Environmental Insurance Coverage
          Claims .........................................          15
 3.3.  Agreements with Respect to Acquiror Common
          Stock Received by Newco Savings Plans ...........         17
 3.4.  Transitional Arrangements ..........................         18
 3.5.  Insurance ..........................................         18
 3.6.  DOE Contracts ......................................         19
 3.7.  Reorganization Expenses ............................         19
 3.8.  Conduct of Health Care Claims Audit ................         19
 3.9.  Guaranty of Acquiror ...............................         21
3.10.  Payments Adjustments to Contribution ...............         21

 4.1.  Modification or Amendment ..........................          22
 4.2.  Waiver; Remedies ...................................          22
 4.3.  Counterparts .......................................          22
 4.4.  Governing Law ......................................          22
 4.5.  Notices ............................................          22
 4.6.  Entire Agreement ...................................          23
 4.7.  Certain Obligations ................................          23
 4.8.  Assignment .........................................          23
 4.9.  Captions ............................................         24
4.10.  Severability .......................................          24
4.11.  No Third Party Beneficiaries .......................          24
4.12.  Consent to Jurisdiction ............................          24

POST-CLOSING COVENANTS AGREEMENT dated as of December 6, 1996 (this "Agreement"), among ROCKWELL INTERNATIONAL CORPORATION, a Delaware corporation (the "Company"), THE BOEING COMPANY, a Delaware corporation ("Acquiror"), BOEING NA, INC., a Delaware corporation and a wholly-owned subsidiary of Acquiror ("Sub"), and NEW ROCKWELL INTERNATIONAL CORPORATION, a Delaware corporation ("Newco").

W I T N E S S E T H :

WHEREAS, the Company, Acquiror and Sub have entered into an Agreement and Plan of Merger dated as of July 31, 1996 (the "Merger Agreement"), providing for the Merger (as defined in the Merger Agreement) of Sub with and into the Company;

WHEREAS, the Board of Directors of the Company has approved an agreement and plan of distribution in the form attached as Annex A to the Merger Agreement (the "Distribution Agreement"), which will be entered into prior to the Effective Time (as defined in the Merger Agreement), pursuant to which (a) all the assets of the Company, other than the Retained Assets (as defined in the Distribution Agreement), will be contributed to Newco and/or to one or more of the Operating Subsidiaries (as defined in the Distribution Agreement) and all of the liabilities of the Company, other than the Retained Liabilities (as defined in the Distribution Agreement), will be assumed by Newco and/or by one or more of the Operating Subsidiaries, all as provided in the Distribution Agreement (the "Contribution"), and (b) all of the issued and outstanding shares of Common Stock, par value $1.00 per share, of Newco ("Newco Common Stock") and Class A Common Stock, par value $1.00 per share, of Newco ("Newco Class A Common Stock"), in each case with the associated Rights, will be distributed on a pro rata basis to the Company's stockholders as provided in the Distribution Agreement (the "Distribution");

WHEREAS, the execution and delivery of this Agreement by the parties hereto is a condition to the obligations of the parties to the Merger Agreement to consummate the Merger;

WHEREAS, the execution and delivery of this Agreement by the parties hereto is a condition to the

obligations of the parties to the Distribution Agreement to consummate the Distribution; and

WHEREAS, the parties to this Agreement have determined that it is necessary and desirable to set forth certain agreements that will govern certain matters that may arise following the Contribution, the Distribution and the Merger.

NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements set forth herein, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1. Definitions. Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned to such terms in the Merger Agreement or the Distribution Agreement, as the case may be. As used in this Agreement, the following terms shall have the following respective meanings:

"Acquiror Indemnitees" shall mean Acquiror, each Affiliate of Acquiror, including any of its direct or indirect Subsidiaries (including, after the Effective Time, the Retained Companies), and each of their respective Representatives and each of the heirs, executors, successors and assigns of any of the foregoing.

"Environmental Law" shall have the meaning ascribed thereto in the Distribution Agreement.

"Environmental Proceeding" means any judicial, administrative or regulatory proceeding (including, without limitation, any investigation or inquiry) by or before any Governmental Entity that has been instituted or commenced against an Acquiror Indemnitee by a party other than an Acquiror Indemnitee based on a violation of, or to enforce compliance with, any Environmental Law.

"Filings" shall mean the Registration Statements, the Proxy Statement-Prospectus, the Form 8-A and any other document filed or required to be filed with the SEC in connection with the transactions contemplated by the

Reorganization Agreements, or any preliminary or final form thereof or any amendment or supplement thereto.

"Indemnifiable Losses" shall mean, subject to Section 2.4, all losses, liabilities, damages, deficiencies, obligations, fines, expenses, claims, demands, actions, suits, proceedings, judgments or settlements, whether or not resulting from Third Party Claims (as defined in Section 2.3(a)), including interest and penalties recovered by a third party with respect thereto and out-of-pocket expenses and reasonable attorneys' and accountants' fees and expenses incurred in the investigation or defense of any of the same or in asserting, preserving or enforcing any of the Indemnitee's rights hereunder, suffered by an Indemnitee.

"Indemnitee" shall mean any of the Acquiror Indemnitees or the Newco Indemnitees who or which may seek indemnification under this Agreement.

"Newco Indemnitees" shall mean Newco, each Affiliate of Newco, including any of its direct or indirect Subsidiaries, and each of their respective Representatives and each of the heirs, executors, successors and assigns of any of the foregoing.

ARTICLE II

INDEMNIFICATION

2.1. Indemnification by Newco. (a) Except as otherwise specifically provided in any Reorganization Agreement and subject to the provisions of this Article II, Newco shall indemnify, defend and hold harmless the Acquiror Indemnitees from and against, and pay or reimburse the Acquiror Indemnitees for, all Indemnifiable Losses, as incurred:

(i) relating to or arising from the Contributed Assets or the Assumed Liabilities, including without limitation the Special Liabilities (including the failure by Newco or any member of the Newco Group to pay, perform or otherwise discharge such Assumed Liabilities in accordance with their terms), whether such Indemnifiable Losses relate to or arise from events, occurrences, actions, omissions, facts or circumstances occurring, existing or asserted before, at or after the Effective Time;

(ii) arising from or based upon any untrue statement or alleged untrue statement of a material fact contained in any of the Filings or in the Consent Statement, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; but only in each case with respect to information provided by the Company relating to the Newco Group or the Company contained in or omitted from the Filings or the Consent Statement;

(iii) relating to or arising from the breach by any member of the Newco Group of any agreement or covenant contained in a Reorganization Agreement which does not by its express terms expire at the Effective Time or which is not by its express terms required to be performed prior to the Effective Time;

(iv) relating to or arising from any breach of or inaccuracy in any representation or warranty of the Company contained in the Merger Agreement;

(v) relating to or arising from any Preexisting Environmental Condition relating to the Aerospace Business, the Defense Business or the Additional Retained Facilities;

(vi) relating to or arising from any actual or alleged criminal violation of any law, rule or regulation of any Governmental Entity by the Company or any of its Subsidiaries or any director, officer, employee or agent of the Company or any of its Subsidiaries ("Criminal Matters") occurring or alleged to have occurred prior to the Time of Contribution;

(vii) relating to or arising from any breach of any covenant or agreement of the Company contained in the Merger Agreement assumed by Newco pursuant to the Distribution Agreement;

(viii) relating to or arising from any claim that the execution, delivery or performance by the Company of each Reorganization Agreement to which it is or will be a party or the consummation of the transactions contemplated thereby results in a violation or breach of, or constitutes a default or impermissible transfer under, or gives rise to any

right of termination, first refusal or consent under or gives rise to any right of amendment, cancellation or acceleration of any material benefit under, any Designated Contract listed on Schedule 2.1(a)(viii);

(ix) relating to or arising from fines and penalties and reasonable attorneys' and accountants' fees and expenses in connection with any of the alleged safety violations or alleged improper storage and/or disposal of hazardous waste claims referred to in item 5(a) of
Section 4.1(n) of the Company Disclosure Schedule pertaining to the explosion at Santa Susana, California in 1994; or

(x) incurred in connection with the enforcement by the Acquiror Indemnitees of their rights to be indemnified, defended and held harmless under this Agreement.

(b) RAN Contract. The Retained Assets include a Contract (Contract R1000) (the "RAN Contract") between Rockwell Australia Limited and the Australian Submarine Corporation. Newco shall indemnify, defend and hold harmless the Acquiror Indemnitees for 80% of any decrease in the profit before tax realized by Rockwell Australia Limited on the RAN Contract below 40.0 million Australian dollars (A$40,000,000) as well as 80% of any loss in respect of the RAN Contract. Likewise, the Company shall pay to Newco 80% of any increase in the profit before tax realized by Rockwell Australia Limited on the RAN Contract above 40.0 million Australian dollars (A$40,000,000). The determination of profit before tax or loss for purposes of this Section 2.1(b) shall be based upon the next quarterly Estimate at Completion ("EAC") for the RAN Contract prepared after expiration of three (3) years from the Effective Time. The determination of Rockwell Australia Limited's profit before tax or loss shall be determined by the Company using the same accounting methods, policies, practices, procedures, classifications, judgments, estimation methodologies and accounting standards as were utilized in the preparation of the Retained Business Audited Financial Statements. All payments made pursuant to this Section 2.1(b) shall be computed on a tax-effected basis to take into account the benefit of any reduction, or detriment of any increase, in Taxes payable by Rockwell Australia Limited attributable to the decrease in the profit before tax (including any loss) or increase in the profit before tax realized by Rockwell Australia Limited below or above

A$40,000,000. All determinations of the amount (and timing) of any such benefit or detriment shall be determined using principles analogous to those contained in Section 6.6 of the Tax Allocation Agreement, and all payments made pursuant to this Section 2.1(b) shall be governed by Section 2.3 of this Agreement and by Section 6.6(a) of the Tax Allocation Agreement. The obligations of Newco and the Company to pay the amounts set forth in this Section 2.1(b) shall be determined without regard to the acts or omissions of the Company or any Subsidiary with respect to performance of the RAN Contract prior to, at or after the Effective Time. The Company will provide Newco with copies of all quarterly EAC's in respect of the RAN Contract and access to such books and records (including but not limited to accountants' work papers) and personnel familiar with the RAN Contract and the accounting therefor as Newco shall reasonably request. To the extent Newco disputes the EAC, the designees of the chief financial officers of Acquiror and Newco shall attempt a good faith resolution of such dispute. To the extent not so resolved within 90 days following Newco's receipt of the determination of such profit or loss, such dispute will be referred for resolution to the chief financial officers of Acquiror and Newco, and failing their resolution of such dispute within 90 days after such referral, to the chief executive officers of Acquiror and Newco. To the extent the dispute is not so resolved within 90 days following such referral, Acquiror and Newco will submit such dispute to mediation using the procedures of the Center for Public Resources, before commencing litigation to resolve such dispute.

2.2. Indemnification by the Company. Except as otherwise specifically provided in any Reorganization Agreement and subject to the provisions of this Article II, the Company shall indemnify, defend and hold harmless the Newco Indemnitees from and against, and pay or reimburse the Newco Indemnitees for, all Indemnifiable Losses, as incurred:

(i) relating to or arising from the Retained Assets or the Retained Liabilities (including the failure by the Company or any member of the Company Group to pay, perform or otherwise discharge such Retained Liabilities in accordance with their terms), whether such Indemnifiable Losses relate to or arise from events, occurrences, actions, omissions, facts or circumstances occurring, existing or asserted before, at or after the Effective Time;

(ii) arising from or based upon any untrue statement or alleged untrue statement of a material fact contained in any of the Filings or in the Consent Statement, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; but only in each case with respect to information provided by Acquiror relating to Acquiror or any of its Subsidiaries other than the Company Group contained in or omitted from the Filings or the Consent Statement;

(iii) relating to or arising from the breach by Acquiror or any member of the Company Group of any agreement or covenant contained in a Reorganization Agreement (other than, in the case of the Company Group, an agreement or covenant contained in the Merger Agreement assumed by Newco pursuant to the Distribution Agreement) which does not by its express terms expire at the Effective Time or which is not by its express terms required to be performed prior to the Effective Time; or

(iv) incurred in connection with the enforcement by the Newco Indemnitees of their rights to be indemnified, defended and held harmless under this Agreement.

2.3. Procedures Relating to Indemnification. (a) In order for an Indemnitee to be entitled to any indemnification provided for under this Agreement in respect of, arising out of or involving a claim made by any Person who is not an Indemnitee against the Indemnitee (a "Third Party Claim"), such Indemnitee must notify the party who may become obligated to provide indemnification hereunder (the "indemnifying party") in writing, and in reasonable detail, of the Third Party Claim reasonably promptly, and in any event within 20 business days after receipt by such Indemnitee of written notice of the Third Party Claim; provided, however, that failure to give such notification shall not affect the indemnification provided hereunder except to the extent the indemnifying party shall have been actually prejudiced as a result of such failure (except that the indemnifying party shall not be liable for any expenses incurred during the period in which the Indemnitee failed to give such notice); and provided further, however, that with respect to any matter for which Newco is the indemnifying

party, Newco shall be deemed to have received notice with respect to all matters by or against any member of the Company Group that were concluded or initiated prior to, or otherwise pending at, the Time of Contribution. After any required notification (if applicable), the Indemnitee shall deliver to the indemnifying party, promptly after the Indemnitee's receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third Party Claim.

(b) If a Third Party Claim is made against an Indemnitee, the indemnifying party will be entitled to participate in the defense thereof and, if it so chooses, to assume the defense thereof (at the expense of the indemnifying party) with counsel selected by the indemnifying party and reasonably satisfactory to the Indemnitee; provided, however, that in case of a claim made by any person against an Indemnitee relating to a Special Liability (a "Special Liability Claim"), Newco (at Newco's expense) shall assume the defense thereof with counsel selected by Newco. Should the indemnifying party so elect (or, in the case of a Special Liability Claim, be obligated) to assume the defense of a Third Party Claim, the indemnifying party will not be liable to the Indemnitee for any legal expenses subsequently incurred (or, in the case of a Special Liability Claim, incurred) by the Indemnitee in connection with the defense thereof (unless, in case of a Special Liability Claim, Newco breaches its obligation to assume the defense thereof). If the indemnifying party assumes (or, in the case of a Special Liability Claim, is obligated to assume) such defense, the Indemnitee shall have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the indemnifying party, it being understood that the indemnifying party shall control such defense. The indemnifying party shall be liable for the fees and expenses of counsel employed by the Indemnitee for any period during which the indemnifying party has not assumed (or, in the case of a Special Liability Claim, is in breach of its obligation to assume) the defense thereof (other than during any period in which the Indemnitee shall have failed to give notice of the Third Party Claim as provided above). If the indemnifying party chooses (or, in the case of a Special Liability Claim, is obligated) to defend or prosecute a Third Party Claim, all the parties hereto shall cooperate in the defense or prosecution thereof, which cooperation shall include the retention in accordance with the Distribution Agreement and (upon the

indemnifying party's request) the provision to the indemnifying party of records and information which are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. If the indemnifying party chooses (or, in the case of a Special Liability Claim, is obligated) to defend or prosecute any Third Party Claim, the Indemnitee will agree to any settlement, compromise or discharge of such Third Party Claim which the indemnifying party may recommend and which by its terms obligates the indemnifying party to pay the full amount of liability in connection with such Third Party Claim; provided, however, that, without the Indemnitee's consent, the indemnifying party shall not consent to entry of any judgment or enter into any settlement (w) that provides for injunctive or other nonmonetary relief affecting the Indemnitee, (x) that does not include as an unconditional term thereof the giving by each claimant or plaintiff to such Indemnitee of a release from all liability with respect to such claim, (y) in the case of a Criminal Matter or (z) that involves an allegation of conduct which could result in the suspension or debarment of the Indemnitee from contracting with the United States Government. Whether or not the indemnifying party shall have assumed the defense of a Third Party Claim, the Indemnitee shall not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the indemnifying party's prior written consent (which consent shall not be unreasonably withheld). Notwithstanding the foregoing, Newco shall be solely responsible for, and shall pay directly, the fees and expenses of its counsel in connection with any Special Liability Claim and shall reimburse the Company on a monthly basis for any support or other services provided at Newco's request in respect of any Special Liability Claim in an amount equal to the Company's costs thereof determined in accordance with the cost accounting standards applicable to Government Contracts.

(c) In order for an Indemnitee to be entitled to any indemnification provided for under this Agreement in respect of a claim that does not involve a Third Party Claim, the Indemnitee shall deliver notice of such claim with reasonable promptness to the indemnifying party. The failure by any Indemnitee so to notify the indemnifying party shall not relieve the indemnifying party from any liability which it may have to such Indemnitee under this Agreement, except to the extent that the indemnifying party

shall have been actually prejudiced by such failure. Any notice pursuant to this Section 2.3(c) shall contain a statement, in prominent and conspicuous type, that if the indemnifying party does not dispute its liability to the Indemnitee with respect to the claim made in such notice by notice to the Indemnitee prior to the expiration of a 30-calendar-day period following the indemnifying party's receipt of the second notice of such claim, the claim shall be conclusively deemed a liability of the indemnifying party. If the Indemnitee has provided the indemnifying party two such notices not less than 30 days apart and the indemnifying party does not notify the Indemnitee prior to the expiration of a 30-calendar-day period following its receipt of the second such notice that the indemnifying party disputes its liability to the Indemnitee under this Agreement, such claim specified by the Indemnitee in such notice shall be conclusively deemed a liability of the indemnifying party under this Agreement and the indemnifying party shall pay the amount of such liability to the Indemnitee on demand or, in the case of any notice in which the amount of the claim (or any portion thereof) is estimated, on such later date when the amount of such claim (or such portion thereof) becomes finally determined. If the indemnifying party has timely disputed its liability with respect to such claim, as provided above, the indemnifying party and the Indemnitee shall proceed in good faith to negotiate a resolution of such dispute and, if not resolved through negotiations, such dispute shall be resolved by litigation in an appropriate court of competent jurisdiction.

(d) Unless the Company or the appropriate Retained Subsidiary shall have made a good faith determination that a particular Indemnifiable Loss relating to or arising from a Preexisting Environmental Condition is not eligible for treatment as an allowable overhead cost or other allowable cost (in which case, the Company or the appropriate Retained Subsidiary may request Newco to indemnify, defend and hold it harmless without complying with the following additional procedures), Newco shall have no obligation to indemnify, defend or hold harmless any Acquiror Indemnitee hereunder in respect of an Indemnifiable Loss arising from or relating to a Preexisting Environmental Condition unless (i) the Company or the appropriate Retained Subsidiary has submitted a claim for such Indemnifiable Loss as an allowable overhead cost or other allowable cost in connection with relevant Government Contracts and used its reasonable best efforts to obtain a favorable determination

of such claim, (ii) such claim has been disallowed based on an act or omission by the Company or any of its Subsidiaries prior to the Effective Time,
(iii) the Company or the appropriate Retained Subsidiary has given Newco timely notice of such disallowance and (iv) Newco has been permitted, at its own expense, to direct and control the appeal of such disallowance until finally determined pursuant to one or more final and nonappealable orders, decrees or judgments or by one or more settlement agreements approved by Newco and the Company, such approval not to be unreasonably withheld by the Company.

Notwithstanding anything in this Agreement to the contrary, Indemnifiable Losses relating to or arising from Preexisting Environmental Conditions shall be limited to costs and expenses of containing, removing, responding to, remediating, cleaning-up and abating Preexisting Environmental Conditions, natural resource damage claims, penalties and fines, and any administrative oversight costs incurred by any Governmental Entity actually paid by an Acquiror Indemnitee following the Time of Contribution relating to or arising from the presence, use, treatment, Release or threatened Release of any Hazardous Substance on or originating from a facility of the Retained Business prior to the Time of Contribution, provided that any such containment, removal, response, remediation, clean-up or abatement shall be (i) required by an enforcement order or decree entered by a Governmental Entity as a result of an Environmental Proceeding; (ii) necessary to comply with an Environmental Law in response to an Environmental Proceeding or threatened Environmental Proceeding; or (iii) in response to a condition which in the Company's reasonable judgment is likely to result in an Environmental Proceeding if no responsive action is taken. The costs and expenses for which Newco shall be obligated to indemnify, defend and hold harmless the Acquiror Indemnitees shall be limited to those costs and expenses which are necessary to achieve compliance with the minimum requirements of Environmental Law based upon a reasonable low cost approach under the circumstances. Without prejudice to the rights and obligations of the parties under Section 2.3(a), (b) or (c), the Company shall provide Newco with all information reasonably requested by Newco to allow Newco to evaluate all proposed responsive actions in connection with any Preexisting Environmental Condition. Newco shall have no obligation to indemnify, defend or hold harmless an Acquiror Indemnitee in respect of any Preexisting Environmental Condition for (i) any cost or expense incurred in connection with the normal, day-to-day

operation, including maintenance, of the facilities of the Retained Business (except for groundwater monitoring costs or other maintenance expenses related to any investigation or remediation), and including any discharges pursuant to, and any closure or post-closure obligations under any permit or authorization granted by a Governmental Entity unless such post-closure obligation is related to or gives rise to an obligation to investigate, monitor or remediate under Environmental Law, or (ii) any cost or expense relating to or arising from any change in use of a facility of the Retained Business or acts or omissions of any Acquiror Indemnitee or other person who is not a member of the Newco Group after the Time of Contribution which increase the scope of any required containment, removal, response, remediation, clean-up or abatement or otherwise increase the liability of Newco hereunder.

(e) Unless the Company or the appropriate Retained Subsidiary shall have made a good faith determination that a particular Indemnifiable Loss relating to or arising from a Criminal Matter is not eligible for treatment as an allowable overhead cost or other allowable cost (in which case, the Company or the appropriate Retained Subsidiary may request Newco to indemnify, defend and hold it harmless without complying with the following additional procedures), Newco shall have no obligation to indemnify, defend or hold harmless any Acquiror Indemnitee hereunder in respect of an Indemnifiable Loss arising from or relating to a Criminal Matter unless (i) the Company or the appropriate Retained Subsidiary has submitted a claim for such Indemnifiable Loss as an allowable overhead cost or other allowable cost in connection with relevant Government Contracts and used its reasonable best efforts to obtain a favorable determination of such claim, (ii) such claim has been disallowed based on an act or omission by the Company or its Subsidiaries prior to the Effective Time, (iii) the Company or the appropriate Retained Subsidiary has given Newco prompt notice of such disallowance and (iv) Newco has been permitted, at its own expense, to direct and control the appeal of such disallowance until finally determined pursuant to one or more final and nonappealable orders, decrees or judgments or by one or more settlement agreements approved by Newco and the Company, such approval not to be unreasonably withheld by the Company. Newco's obligation to indemnify Acquiror Indemnitees for Criminal Matters pursuant to Section 2.1(a)(vi) shall be limited to amounts paid for fines or penalties and reasonable attorneys' and accountants' fees and expenses that are not allowable or

that are not allowed as an overhead cost or other allowable cost in connection with a Government Contract. Any Criminal Matter for which indemnification may be sought pursuant to Section 2.1(a)(vi) shall be a Third Party Claim for purposes of this Agreement.

2.4. Certain Limitations. (a) The amount of any Indemnifiable Losses or other liability for which indemnification is provided under this Agreement shall be net of any amounts actually recovered by the Indemnitee from third parties (including, without limitation, amounts actually recovered under insurance policies) with respect to such Indemnifiable Losses or other liability. Any indemnifying party hereunder shall be subrogated to the rights of the Indemnitee upon payment in full of the amount of the relevant Indemnifiable Loss. An insurer who would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or, solely by virtue of the indemnification provisions hereof, have any subrogation rights with respect thereto. If any Indemnitee recovers an amount from a third party in respect of an Indemnifiable Loss for which indemnification is provided in this Agreement after the full amount of such Indemnifiable Loss has been paid by an indemnifying party or after an indemnifying party has made a partial payment of such Indemnifiable Loss and the amount received from the third party exceeds the remaining unpaid balance of such Indemnifiable Loss, then the Indemnitee shall promptly remit to the indemnifying party the excess (if any) of (A) the sum of the amount theretofore paid by the indemnifying party in respect of such Indemnifiable Loss plus the amount received from the third party in respect thereof, less (B) the full amount of such Indemnifiable Loss or other liability.

(b) The amount of any Indemnifiable Losses or other Liability for which indemnification is provided under this Agreement or any other amounts payable or reimbursable by one party to another under this Agreement shall be increased or decreased to take account of any net Tax (as defined in the Tax Allocation Agreement) cost or any net Tax benefit in a manner analogous to that described in Section 6.6 of the Tax Allocation Agreement.

2.5. Limitation on Newco's Indemnification Obligation under
Section 2.1(a)(iv). (a) Newco shall not have any liability under Section 2.1(a)(iv) unless the aggregate of all Indemnifiable Losses for which Newco would, but for this Section 2.5, be liable under Section 2.1(a)(iv)

exceeds on a cumulative pre-tax basis an amount equal to $20,000,000 (the "Basket Amount"); provided, however, that (i) if Indemnifiable Losses for which Newco would, but for this Section 2.5, be liable under Section 2.1(a)(iv) as a result of the breach of or the inaccuracy in any representation or warranty which arises from a particular state of facts or event exceed $5,000,000 on a pre-tax basis, Newco shall be liable under Section 2.1(a)(iv) for the entire amount of such Indemnifiable Losses, and such Indemnifiable Losses shall not be taken into account in calculating whether Newco's cumulative liability under
Section 2.1(a)(iv) had exceeded the Basket Amount or the Threshold Amount (as defined below), and (ii) if the aggregate of all Indemnifiable Losses for which Newco would, but for this Section 2.5, be liable under Section 2.1(a)(iv) exceeds on a cumulative pre-tax basis the Basket Amount, Newco's liability under Section 2.1(a)(iv) shall be equal to $10,000,000 (the "Threshold Amount") plus any Indemnifiable Losses under Section 2.1(a)(iv) in excess of $20,000,000.

(b) Newco shall not have any liability under Section 2.1(a)(iv) with respect to the breach of or inaccuracy in any representation or warranty which arises from a particular state of facts or event if the Indemnifiable Losses resulting therefrom are less than $250,000 on a pre-tax basis, and such Indemnifiable Losses shall not be taken into account in calculating whether Newco's cumulative liability under Section 2.1(a)(iv) had exceeded the Basket Amount or the Threshold Amount.

(c) No Indemnifiable Losses actually paid by Newco pursuant to any provision other than Section 2.1(a)(iv) and no Indemnifiable Losses relating to or arising from a Preexisting Environmental Condition or a Criminal Matter for which Newco is not yet obligated to provide indemnity pursuant to
Section 2.1(a)(v) or Section 2.1(a)(vi) shall be deemed to be an Indemnifiable Loss relating to or arising from a breach of or inaccuracy in a representation or warranty of the Company contained in the Merger Agreement for purposes of determining whether the aggregate amount of Indemnifiable Losses relating to or arising from breaches of or inaccuracies in such representations or warranties exceeds the Basket Amount or the Threshold Amount. Newco shall not have any liability under Section 2.1(a)(iv) with respect to the breach of or inaccuracy in any representation or warranty unless notice of any such breach or inaccuracy is given pursuant to Section 2.3 prior to the expiration of the survival period

provided in the Merger Agreement for the relevant representation or warranty.

2.6 Exclusivity of Tax Allocation Agreement. Notwithstanding anything in this Agreement to the contrary, the Tax Allocation Agreement shall be the exclusive agreement among the parties with respect to all Tax matters, including indemnification in respect of Tax matters.

ARTICLE III

OTHER AGREEMENTS

3.1. Transfer Taxes. Newco and Acquiror shall comply with
Section 2.2(h) of the Merger Agreement.

3.2. Conduct of Environmental Insurance Coverage Claims. (a) Pursuant to the Distribution Agreement, the Company will retain as part of the Retained Assets the Environmental Coverage Claims (as defined below) to the extent that they have not been resolved prior to the time of Contribution. As used herein, "Environmental Coverage Claims" shall mean all existing and future claims, as the same may be amended from time to time, by the Company against any and all insurance companies that have provided (or that the Company or Newco alleges have provided) to the Company, its predecessors or its or their affiliates, insurance coverage in respect of environmental matters as the same may relate to the businesses of the Company, its predecessors or its or their affiliates as now or previously owned or operated (including without limitation any discontinued or divested operations, including Divested Businesses) at any time prior to the Effective Time, including without limitation the claims asserted in the action against Aetna Casualty et al. filed in the Superior Court of California for Los Angeles County and any other claims that may be asserted by or on behalf of the Company against any provider or alleged provider of insurance coverage for such environmental matters for any period prior to the Effective Time. The Company agrees to use diligent efforts to prosecute the Environmental Coverage Claims in accordance with this Section 3.2 until the same are finally determined pursuant to one or more final and nonappealable orders, decrees or judgments by a court of competent jurisdiction or by one or more settlement agreements approved by Newco in its sole discretion. The Company agrees (i) that Newco and such legal counsel as Newco may

from time to time designate shall have the exclusive right to control and to direct the prosecution of all Environmental Coverage Claims (it being understood and agreed that in connection with the prosecution or settlement of any Environmental Coverage Claims, Newco may in its sole discretion agree on behalf of the Company to surrender, cancel or otherwise limit any related insurance policies or coverages thereunder in whole or in part or as to any particular business, property, period or event), (ii) to make available such personnel, records and other resources in its possession or reasonably accessible to it as shall be reasonably required by Newco or its counsel to support the prosecution of the Environmental Coverage Claims, and (iii) except as may otherwise be required by law or judicial process, not to make any admission in respect of the Environmental Coverage Claims or take any action in respect thereof without the prior written consent of Newco. The Company shall pay to Newco any and all amounts received by it in respect of the Environmental Coverage Claims as and when the same are received, provided that the Company shall be entitled to retain that portion of the amount, if any, received in respect of the Environmental Coverage Claims as the Company shall be required to pay and/or credit to the United States Government in accordance with the agreement to be entered into between the Company and the appropriate United States Government contracting officer referred to in Section 3.2(b).

(b) If, at the Time of Contribution, the Company has reached an agreement with the appropriate government contracting officer on the amount required to be paid to the United States Government in respect of the Environmental Coverage Claims but such amount has not been paid and/or credited in full by the Company, then Newco shall remit the unpaid balance to the Company on or before the date that payment is required to be made and/or credited by the Company to the United States Government. The Company agrees that if, at the Time of Contribution, the Company has not entered into such an agreement with the appropriate government contracting officer, Newco and such legal counsel as Newco may from time to time designate shall have the exclusive right to control and to direct the negotiation of such agreement. The Company shall enter into any such agreement with the appropriate United States Government contracting officer which Newco may recommend, provided that Newco pays to the Company on or before the date that payment is required to be made and/or credited by the Company to the United States Government an amount equal to the excess, if

any, of the amount that the Company is required to pay and/or credit to the United States Government over the amount received by the Company after the Effective Time in respect of the Environmental Coverage Claims that has not previously been remitted to Newco.

(c) Newco shall be solely responsible for and shall pay directly the fees and expenses (including legal fees and expenses) of pursuing the Environmental Coverage Claims and shall reimburse the Company periodically for any support or other services provided at Newco's request in respect of the Environmental Coverage Claims in an amount equal to the Company's costs thereof determined in accordance with cost accounting standards applicable to Government Contracts.

(d) Taxes on amounts received and Tax benefits and Tax costs in respect of amounts paid and/or credited with respect to the Environmental Coverage Claims and the related agreement with the United States Government shall be allocated between the Company and Newco in the manner set forth in
Section 5.5 of the Tax Allocation Agreement.

3.3. Agreements with Respect to Acquiror Common Stock Received by Newco Savings Plans. (a) Acquiror and the Newco Savings Plan and any other savings plan sponsored or maintained by Newco or any of its Affiliates (the "Savings Plans") shall cooperate with each other in supplying such information as may be necessary for any of such parties to complete and file any information reporting forms presently or hereafter required by the SEC or any commissioner or other authority administering the "blue sky" or securities laws of any jurisdiction where the shares of Acquiror Common Stock received by the Savings Plans in the Merger (the "Shares") are proposed to be sold which are required to be filed as a condition to the availability of an exemption from registration or qualification of an offer or sale of the Shares under the Securities Act, or any such "blue sky" or securities laws.

(b) Until the earlier of two years from the Effective Time or the sale by the Savings Plans of all Shares, Acquiror shall file in a timely manner all reports contemplated by Rule 144 (c)(1) under the Securities Act as satisfying the condition that adequate public information with respect to Acquiror is available.

(c) The provisions of this Section 3.3 shall not be applicable if Newco or the Company has obtained a "No-Action" letter or other written advice from the staff of the SEC that the Savings Plans may sell the Shares publicly at any time after the Effective Time without limitation in terms of the volume of Shares that may be sold, the manner in which the Shares may be sold and the information that must be publicly available with respect to Acquiror in order to permit such sale and without any requirement that the Savings Plans file any notice of sale of Shares or intention to sell Shares with the SEC other than any filings required pursuant to Section 13(d) of the Exchange Act in respect of the beneficial ownership by the Savings Plans of Acquiror Common Stock. Newco agrees to use its reasonable best efforts to obtain such "No-Action" letter or other written advice.

3.4. Transitional Arrangements. Concurrently herewith Newco, the Company and Acquiror will enter into an agreement with respect to certain transitional arrangements (the "Transition Agreement") in conformity with the Outline of Terms set forth as Schedule 3.4 and such other transitional arrangements as shall be mutually agreed upon.

3.5. Insurance. (a) Except as otherwise specifically provided in any Reorganization Agreement or the Transition Agreement, with respect to any loss, liability or damage with respect to the Retained Assets arising out of events occurring prior to the Time of Contribution (other than any loss, liability or damage arising out of or relating to any Environmental Coverage Claims) for which Newco or any of its Subsidiaries would be entitled to assert a claim for recovery under any third-party "occurrence basis" policy of insurance maintained prior to the Time of Contribution ("Occurrence Basis Insurance") in accordance with the terms thereof, at the request of Acquiror, Newco will use reasonable efforts in asserting, or to assist Acquiror in asserting, claims under such Occurrence Basis Insurance with respect to such loss, liability or damage; provided that (i) all of Newco's costs and expenses incurred in connection with the foregoing are promptly paid by Acquiror, (ii) Newco and its Subsidiaries may, at any time, without liability or obligation to Acquiror, amend, buy-out, extinguish liability under or otherwise modify any Occurrence Basis Insurance (and such claims shall be subject to any such amendments, buy-outs, extinguishments and modifications) and (iii) such claims shall be subject to (and recovery thereon shall be reduced by the amount of) any

applicable deductibles, retentions, self-insurance provisions or any payment or reimbursement obligations of Newco or any of its Subsidiaries or Affiliates in respect thereof.

(b) Except as otherwise specifically provided in any Reorganization Agreement or the Transition Agreement, with respect to any loss, liability or damage with respect to the Contributed Assets arising out of events occurring prior to the Time of Contribution (other than any loss, liability or damage arising out of or relating to any Environmental Coverage Claims) for which the Company or any of the Retained Subsidiaries would be entitled to assert a claim for recovery under any Occurrence Basis Insurance in accordance with the terms thereof, at the request of Newco, Acquiror will use reasonable efforts in asserting, or to assist Newco in asserting, claims under such Occurrence Basis Insurance with respect to such loss, liability or damage; provided that (i) all of Acquiror's costs and expenses incurred in connection with the foregoing are promptly paid by Newco, (ii) Acquiror and its Subsidiaries may, at any time, without liability or obligation to Newco, amend, buy-out, extinguish liability under or otherwise modify any Occurrence Basis Insurance (and such claims shall be subject to any such amendments, buy-outs, extinguishments and modifications) and (iii) such claims shall be subject to (and recovery thereon shall be reduced by the amount of) any applicable deductibles, retentions, self-insurance provisions or any payment or reimbursement obligations of Acquiror or any of its Subsidiaries or Affiliates in respect thereof.

3.6. DOE Contracts. As soon as practicable following the Effective Time, Newco and the Company shall take such actions as shall be consistent with the advance agreements referred to in Section 9.1(e) of the Distribution Agreement.

3.7. Reorganization Expenses. Except as otherwise expressly provided in the Reorganization Agreements (including but not limited to the last sentence of Section 2.2(b) of the Merger Agreement and Sections 2.2(h), 4.1(p), 4.2(j) and 5.13 of the Merger Agreement and Section 5.3 of the Distribution Agreement), Acquiror and Newco (and not the Company) shall be responsible for and agree to pay all reorganization expenses of the Company directly related to the Contribution, the Distribution and the Merger in accordance with Schedule 3.7

hereto, provided that the Company may, prior to the Effective Time, pay any such expenses that are otherwise the responsibility of Newco.

3.8. Conduct of Health Care Claims Audit. (a) Pursuant to the Distribution Agreement, Newco will receive as part of the Contributed Assets the Health Care Claims (as defined below). As used herein, "Health Care Claims" shall mean all existing and future claims arising out of audits of health care claims paid by the Company for any period prior to the Effective Time made by the Company (or if after the Effective Time, Newco) against any and all health care administrators ("Health Care Administrators") that have provided to the Company, its predecessors or its or their affiliates, health care administration services in respect of the employees of the Company, its predecessors or its or their affiliates as now or previously owned or operated (including without limitation any discontinued or divested operations, including Divested Businesses) at any time prior to the Effective Time, including, without limitation, the claims asserted in the pending audits of Metropolitan Insurance Company for the years 1993-1994 and Value Rx Pharmacy Program, Inc. for the years 1993-1995 and any other claims that may be asserted by or on behalf of the Company (or if after the Effective Time, Newco) against any Health Care Administrator for any period prior to the Effective Time. Newco agrees to use diligent efforts to prosecute the Health Care Claims in accordance with this Section 3.8 until the same are finally settled by Newco in its sole discretion. The Company agrees (i) that Newco shall have the exclusive right to control and to direct the audit of the Health Care Administrators and the negotiation of all settlements of the Health Care Claims, (ii) to make available such personnel, records and other resources in its possession or reasonably accessible to it as shall be reasonably required by Newco to support the prosecution of the Health Care Claims and (iii) not to make any admission or settlement in respect of the Health Care Claims or take any action in respect thereof without the prior written consent of Newco. Newco shall pay to the Company as and when the same are received by Newco an equitable allocation of the net proceeds from settlement of the Health Care Claims.

(b) Newco shall be solely responsible for and shall pay directly the fees and expenses (including legal fees and expenses) of pursuing the Health Care Claims and

shall reimburse the Company periodically for any support or other services provided at Newco's request in respect of the Health Care Claims in an amount equal to the Company's costs thereof determined in accordance with cost accounting standards applicable to Government Contracts.

(c) Taxes on amounts received and Tax benefits and Tax costs in respect of amounts paid and/or credited with respect to the Health Care Claims and the related agreement with the United States Government shall be allocated between the Company and Newco in the manner set forth in Section 5.5 of the Tax Allocation Agreement.

3.9. Guaranty of Acquiror. Acquiror, for itself and its successors in interest and assigns, hereby unconditionally and irrevocably guarantees to Newco and its successors in interest and assigns the full and faithful performance and observation by the Company under the Reorganization Agreements (other than the Merger Agreement) and the Transition Agreement of all covenants, conditions and agreements (other than any indemnification obligations of the Company in respect of Retained Assets or Retained Liabilities) in the Reorganization Agreements (other than the Merger Agreement) and the Transition Agreement to be performed and observed by the Company after the Effective Time without requiring any notice of nonpayment, nonperformance or nonobservance or proof of notice or demand whereby to charge Acquiror therefor, all of which Acquiror hereby expressly waives. This is a continuing guaranty and shall remain in effect notwithstanding any bankruptcy, reorganization or insolvency of the Company, or any successor in interest or assignee thereof, or any disaffirmance or abandonment by a trustee thereof. Acquiror hereby waives notice of acceptance of this Guaranty. Acquiror hereby agrees to indemnify, defend and hold harmless Newco for all Indemnifiable Losses, as incurred, relating to or arising from any breach or inaccuracy in the representations and warranties contained in Sections 4.2(j) and 4.2(d)(iii) of the Merger Agreement. Effective as of the Effective Time, Acquiror will execute and deliver guarantees of the Company's performance and obligations under the Designated Contracts set forth in Schedule 2.1(a)(viii) to the counterparties on such Contracts.

3.10. Payments Adjustments to Contribution. It is the intention of the parties to this Agreement that payments and asset transfers made by the parties to each

other after the Effective Time pursuant to the Reorganization Agreements are to be treated as relating back to the Contribution as an adjustment to the assets and liabilities contributed thereunder, and the parties shall take positions consistent with such intention with any Taxing Authority (as defined in the Tax Allocation Agreement), unless with respect to any payment any party receives an opinion of counsel to the effect that there is no substantial authority for such a position.

ARTICLE IV

MISCELLANEOUS AND GENERAL

4.1. Modification or Amendment. The parties hereto may modify or amend this Agreement only by written agreement executed and delivered by duly authorized officers of the respective parties.

4.2. Waiver; Remedies. No delay on the part of any party hereto in exercising any right, power or privilege hereunder will operate as a waiver thereof, nor will any waiver on the part of any party hereto of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder, nor will any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder. No waiver will be effective hereunder unless it is in writing. Unless otherwise provided, the rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies which the parties may otherwise have at law or in equity.

4.3. Counterparts. For the convenience of the parties, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts shall together constitute the same agreement.

4.4. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to contracts made and to be performed entirely within such State, without regard to the conflicts of law principles of such State.

4.5. Notices. Any notice, request, instruction or other communication to be given hereunder by any party to

any other shall be in writing and shall be deemed to have been duly given (i) on the date of delivery if delivered personally, or by telecopy or telefacsimile, upon confirmation of receipt, (ii) on the first business day following the date of dispatch if delivered by Federal Express or other nationally reputable next-day courier service, or (iii) on the third business day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

(a) If to Newco:

NEW ROCKWELL INTERNATIONAL CORPORATION
2201 Seal Beach Boulevard
Seal Beach, California 90740-8250
Attention: William J. Calise, Jr., Esq.
Senior Vice President,
General Counsel and Secretary
Telecopy: (310) 797-5687

(b) if to Acquiror, the Company or Sub:

BOEING NA, INC.
c/o The Boeing Company
P.O. Box 3707
M/S 13-08
Seattle, WA 98124-2207
Attention: Theodore J. Collins, Esq.
Vice President & General Counsel
Telecopy: (206) 544-4900

4.6. Entire Agreement. The Reorganization Agreements (including the Annexes and Schedules thereto), the Transition Agreement and the Confidentiality Agreement constitute the entire agreement, and supersede all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof and thereof.

4.7. Certain Obligations. Whenever this Agreement requires any of the Subsidiaries of any party to take any action, this Agreement will be deemed to include an undertaking on the part of such party to cause such Subsidiary to take such action.

4.8. Assignment. No party to this Agreement shall convey, assign or otherwise transfer any of its rights or obligations under this Agreement without the express written consent of the other parties hereto in their sole and absolute discretion, except that any party hereto may assign any of its rights hereunder to a successor to all or any part of its business. Except as aforesaid, any such conveyance, assignment or transfer without the express written consent of the other parties shall be void ab initio. No assignment of this Agreement shall relieve the assigning party of its obligations hereunder.

4.9. Captions. The Article, Section and paragraph captions herein are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof.

4.10. Severability. If any provision of this Agreement or the application thereof to any person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon any such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.

4.11. No Third Party Beneficiaries. Nothing contained in this Agreement is intended to confer upon any person or entity other than the parties hereto and their respective successors and permitted assigns, any benefit, right or remedies under or by reason of this Agreement, except that the provisions of Article II hereof shall inure to the benefit of Indemnitees and the provisions of Section 3.3 shall inure to the benefit of the Savings Plans.

4.12. Consent to Jurisdiction. Each of the Company, Acquiror and Newco irrevocably submits to the exclusive jurisdiction of (i) the Superior Court of the State of California, San Francisco County and (ii) the United States District Court for the Northern District of California for the purposes of any suit, action or other proceeding

arising out of this Agreement or any transaction contemplated hereby (and agrees not to commence any action, suit or proceeding relating hereto except in such courts). Each of the Company, Acquiror and Newco further agrees that service of any process, summons, notice or document hand delivered or sent by registered mail to such party's respective address set forth in Section 4.5 will be effective service of process for any action, suit or proceeding in California with respect to any matters to which it has submitted to jurisdiction as set forth in the immediately preceding sentence. Each of the Company, Acquiror and Newco irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in (i) the Superior Court of the State of California, San Francisco County or (ii) the United States District Court for the Northern District of California, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties hereto on the date first hereinabove written.

ROCKWELL INTERNATIONAL CORPORATION

By: /s/ WILLIAM J. CALISE, JR.
    --------------------------------
    Name:   William J. Calise, Jr.
    Title:  Senior Vice President

THE BOEING COMPANY

By: /s/ PHILIP M. CONDIT
    --------------------------------
    Name:   Philip M. Condit
    Title:  President and Chief
            Executive Officer

NEW ROCKWELL INTERNATIONAL CORPORATION

By: /s/ WILLIAM J. CALISE, JR.
    --------------------------------
    Name:   William J. Calise, Jr.
    Title:  Senior Vice President

BOEING NA, INC.

By: /s/ BOYD E. GIVAN
    -------------------------------
    Name:  Boyd E. Givan
    Title: Director

Exhibit 10(d)

CONFORMED COPY

TAX ALLOCATION AGREEMENT

dated as of December 6, 1996,

by and among

ROCKWELL INTERNATIONAL CORPORATION,

NEW ROCKWELL INTERNATIONAL CORPORATION

and

THE BOEING COMPANY

ARTICLE I

DEFINITIONS.....................................................     2
     1.1.  Definitions..........................................     2

ARTICLE II

FILING OF TAX RETURNS...........................................     9
     2.1.  Preparation of Tax Returns...........................     9
     2.2.  Pre-Merger Tax Returns...............................    10
     2.3.  Post-Merger Tax Returns..............................    10

ARTICLE III

PAYMENT OF TAXES................................................    11
     3.1.  Allocation of Tax Liabilities........................    11
     3.2.  Tax Refunds, Carrybacks and California Tax
           Credits..............................................    12

ARTICLE IV

ALLOCATION AND CALCULATION OF TAXES.............................    13
     4.1.  Straddle Period Taxes................................    13
     4.2.  Share of Allowable Taxes.............................    14
     4.3.  Calculations and Determinations......................    14
     4.4.  Principles of Determination..........................    15
     4.5.  Change in Law........................................    15

ARTICLE V

NEWCO OPTIONS; COMPENSATION PAYMENTS; CERTAIN CONTRACTS;
GUNSHIP CLAIMS; ENVIRONMENTAL COVERAGE CLAIMS; HEALTH CARE
CLAIMS; B-1B CONTRACTS; FOREIGN SUBSIDIARIES;
CONSENT SOLICITATION............................................    16
     5.1.  Tax Deductions Arising in Respect of Newco
           Options..............................................    16
     5.2.  Compensation Payments................................    18
     5.3.  Percentage Completion Contracts......................    19
     5.4.  Gunship Claims.......................................    20
     5.5.  Environmental Coverage Claims and Health
           Care Claims..........................................    20
     5.6.  B-1B Contracts.......................................    21
     5.7.  Research and Experimentation Credit..................    21
     5.8.  Foreign Subsidiaries.................................    22

     5.9.  Consent Solicitation; Repayment of Short-
           Term Debt...........................................     22

ARTICLE VI

TAX INDEMNIFICATION; TAX CONTESTS..............................     23
     6.1.  Indemnification.....................................     23
     6.2.  Notice of Indemnity.................................     26
     6.3.  Tax Contests........................................     26
     6.4.  Timing Adjustments..................................     27
     6.5.  Certain Post-Distribution Transactions..............     28
     6.6.  Payments Net of Taxes...............................     30

ARTICLE VII

COOPERATION AND EXCHANGE OF INFORMATION........................     31
     7.1.  Preparation of Returns..............................     31
     7.2.  Cooperation and Exchange of Information.............     31
     7.3.  Record Retention....................................     32
     7.4.  Notification of Certain Dispositions................     33

ARTICLE VIII

MISCELLANEOUS..................................................     33
     8.1.  Entire Agreement....................................     33
     8.2.  Modification or Amendment...........................     33
     8.3.  Notices.............................................     33
     8.4.  No Third Party Beneficiaries........................     34
     8.5.  Assignment..........................................     35
     8.6.  Term................................................     35
     8.7.  Captions............................................     35
     8.8.  Severability........................................     35
     8.9.  Specific Performance................................     35
     8.10. Counterparts........................................     36
     8.11. Governing Law.......................................     36
     8.12. Agent...............................................     36

TAX ALLOCATION AGREEMENT

This TAX ALLOCATION AGREEMENT (this "Agreement"), dated as of December 6, 1996, among ROCKWELL INTERNATIONAL CORPORATION, a Delaware corporation (the "Company"), NEW ROCKWELL INTERNATIONAL CORPORATION, a Delaware corporation and a wholly owned subsidiary of the Company ("Newco"), and THE BOEING COMPANY, a Delaware corporation ("Acquiror").

W I T N E S S E T H:

WHEREAS, the Company, Acquiror and Boeing NA, Inc., a wholly owned subsidiary of Acquiror ("Sub"), have entered into an Agreement and Plan of Merger dated as of July 31, 1996 (the "Merger Agreement"), providing for the Merger (as defined in the Merger Agreement) of Sub with and into the Company;

WHEREAS, the Board of Directors of the Company has approved an agreement and plan of distribution in the form attached as Annex A to the Merger Agreement (the "Distribution Agreement");

WHEREAS, the execution and delivery of this Agreement by the parties hereto is a condition to the obligations of the parties to the Merger Agreement to consummate the Merger;

WHEREAS, the execution and delivery of this Agreement by the parties hereto is a condition to the obligations of the parties to the Distribution Agreement to consummate the Distribution (as defined in the Distribution Agreement);

WHEREAS, Acquiror and the Company, on behalf of each of them and the Company Group (as defined herein) and Newco, on behalf of itself and the Newco Group (as defined herein), wish to provide for the allocation between the Company Group and the Newco Group of all responsibilities, liabilities and benefits relating to or affecting Taxes (as hereinafter defined) paid or payable by either of them for all taxable periods, whether beginning before, on or after the Distribution Date (as hereinafter defined) and to provide for certain other matters; and

NOW, THEREFORE, in consideration of the premises and of the respective covenants and agreements set forth herein, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1. Definitions. Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned to such terms in the Merger Agreement or the Distribution Agreement, as the case may be. As used in this Agreement, the following terms shall have the following respective meanings:

"Acquiror Tax Opinion" means the opinion received by Acquiror from Cravath, Swaine & Moore pursuant to Section 6.3(c) of the Merger Agreement.

"Acquiror's Tax Representation Letter" means the representation letter delivered by Acquiror substantially in the form of Annex D to the Merger Agreement.

"Actually Realized" or "Actually Realizes" means, for purposes of determining the timing of any Taxes (or related Tax cost or benefit) relating to any payment, transaction, occurrence or event (including any Tax Refund), the time at which the amount of Taxes payable by such person is increased above or reduced below, as the case may be, the amount of Taxes that such person would be required to pay but for such payment, transaction, occurrence or event.

"Affiliated Group" means the affiliated group of which the Company is the common parent.

"Allowable Tax" means any Tax of the Company Group which is an allowable cost under the Federal Acquisition Regulation, 48 C.F.R. Chapter 1, and associated regulations and agreements between the Company and any U.S. governmental entity, which agreements are described on Schedule 1.

"B-1B Contracts" means the B-1B Full Scale Development Contract (No. F33657-81-C-0208) and the B-1B Production Contract (No. F33657-81-C-0201).

"Business Acquisition Agreement" means the Business Acquisition Agreement dated November 22, 1996 among

Rockwell Australia Limited, ACN 004 471 078 Pty Ltd and New Rockwell Australia Pty Limited, as amended by Amending Agreement dated December 4, 1996.

"California Tax Credits" means any California Tax credits for manufacturing and research property resulting from qualified costs paid or incurred on or before the Distribution Date by any member of the Company Group or the Newco Group.

"California Tax Deficiency" means any Tax Deficiency with respect to California Taxes.

"Code" means the Internal Revenue Code of 1986, as amended, and shall include corresponding provisions of any subsequently enacted Federal Tax laws.

"Combined Taxes" means all Taxes due with respect to any combined, consolidated or unitary state, local or foreign corporate Tax liability for all Pre-Merger Taxable Periods and Straddle Periods with respect to Joint Tax Returns.

"Company Employees and Former Employees" means individuals who were employees of the Company Group on or before the Distribution Date and who do not become employees of the Newco Group between the Distribution Date and the date of the event giving rise to a deduction in respect of any Newco Options held by such individuals or Compensation Payments made to such individuals or who become employees of the Newco Group on or after the Distribution Date but are employees of the Company Group when any such Newco Options are exercised or Compensation Payments are made.

"Company Group" means, solely for purposes of this Agreement and not for purposes of any other Reorganization Agreement, the Company and its affiliates, other than Newco and its affiliates (determined after giving effect to the transfers contemplated by Article II of the Distribution Agreement) and, for Post-Tax Indemnification Periods, shall include Acquiror and its affiliates.

"Company Tax Item" means a Tax Item that is attributable to the Company Group and is not a Newco Tax Item.

"Company Tax Opinions" means the opinions received by the Company from Chadbourne & Parke LLP and Wachtell,

Lipton, Rosen & Katz pursuant to Section 6.2(c) of the Merger Agreement.

"Compensation Payments" means all payments made by any member of the Newco Group under Sections 8.4 and 8.6 of the Distribution Agreement, to the extent that such payments relate to benefits accrued as of the Time of Contribution (as defined in the Distribution Agreement).

"Contract Profitability" as of the Distribution Date shall mean
(i) in the case of any long-term contract a portion of which is accounted for on the "percentage completion method" of accounting and a portion of which is accounted for on the "completed contract method" of accounting, in each case for Federal Income Tax purposes, the excess of (A) the aggregate amount of taxable income that would have been reportable for Federal Income Tax purposes for all Tax Indemnification Periods with respect to such contract if the contract had been accounted for in its entirety on the percentage completion method of accounting for Federal Income Tax purposes over (B) the actual amount of taxable income reportable for Federal Income Tax purposes for all Tax Indemnification Periods with respect to such contract, and (ii) in the case of any other long-term contract accounted for on the completed contract or percentage of completion method of accounting for Federal Income Tax purposes, the deferred contract profitability with respect to such contract as of the Distribution Date as calculated for financial accounting purposes.

"Debt Refinancing" has the meaning set forth in Section 5.9.

"Distribution Date" means the later of (i) the date on which the Distribution occurs or is deemed to occur for Federal Income Tax purposes and
(ii) the date on which the Merger occurs or is deemed to occur for Federal Income Tax purposes. Solely for purposes of this Agreement, the Distribution or the Merger, as the case may be, shall be deemed effective as of the close of business on the Distribution Date.

"Environmental Coverage Claims" shall have the meaning ascribed thereto in the Post-Closing Covenants Agreement.

"Group" means either the Company Group or the Newco Group, as the context provides.

"Health Care Claims" shall have the meaning ascribed thereto in
Section 3.8 of the Post-Closing Covenants Agreement.

"Income Tax Benefit" means for any taxable period the excess of
(i) the hypothetical Income Tax liability of the taxpayer for the taxable period calculated as if the Timing Difference or Reverse Timing Difference, as the case may be, had not occurred but with all other facts unchanged, over (ii) the actual Income Tax liability of the taxpayer for the taxable period, calculated taking into account the Timing Difference or Reverse Timing Difference, as the case may be (treating an Income Tax Refund as a negative Income Tax liability for purposes of such calculation).

"Income Tax Detriment" means for any taxable period the excess of (A) the actual Income Tax liability of the taxpayer for the taxable period, calculated taking into account the Timing Difference or Reverse Timing Difference, as the case may be, over (B) the hypothetical Income Tax liability of the taxpayer for the taxable period, calculated as if the Timing Difference or Reverse Timing Difference, as the case may be, had not occurred but with all other facts unchanged (treating an Income Tax Refund as a negative Income Tax liability for purposes of such calculation).

"Income Taxes" means any Tax based upon, measured by, or calculated with respect to (i) net income or profits (including, but not limited to, any capital gains, minimum Tax and any Tax on items of Tax preference, but not including sales, use, real property gains, real or personal property, gross or net receipts, transfer or similar Taxes) or (ii) multiple bases (including, but not limited to, corporate franchise, doing business or occupation Taxes) if one or more of the bases upon which such Tax may be based upon, measured by, or calculated with respect to, is described in clause (i) above.

"Indemnitee" has the meaning set forth in Section 6.2.

"Indemnitor" has the meaning set forth in Section 6.2.

"Indemnity Issue" has the meaning set forth in Section 6.2.

"IRS" means the Internal Revenue Service.

"Joint Tax Return" means any Tax Return that includes a member of the Company Group and a member of the Newco Group.

"Newco Group" means Newco and its affiliates, determined immediately after the Distribution and the Merger.

"Newco Options" means those options to purchase Newco Common Stock or Newco Class A Common Stock, as the case may be, resulting from the conversion of Company Options in accordance with the Distribution Agreement.

"Newco Tax Item" means a Tax Item solely attributable to the Newco Group.

"Newco's Tax Representation Letter" means the representation letter delivered by Newco and the Company substantially in the form of Annex E to the Merger Agreement.

"Other Individuals" means individuals other than Company Employees and Former Employees.

"Other Taxes" has the meaning set forth in Section 3.1(c).

"Post-Merger Taxable Period" means a taxable period beginning after the Distribution Date.

"Post-Tax Indemnification Period" means any Post-Merger Taxable Period and that portion of any Straddle Period that begins on the day after the Distribution Date.

"Pre-Merger Taxable Period" means a taxable period ending on or before the Distribution Date.

"Prior Arrangement" means the Company's existing finance policy for allocation of Taxes (including disclosed practices) a copy of which finance policy (in effect as of the date hereof) is attached hereto as Schedule 2 and the advance agreements between the Company and any U.S. governmental entity a copy of which is attached hereto as Schedule 1.

"Responsible Party" has the meaning set forth in Section 6.3.

"Reverse Timing Difference" means an increase in income, gain or recapture, or a decrease in deduction, loss or credit, as calculated for Income Tax purposes, of the taxpayer for the Tax Indemnification Period coupled with an increase in deduction, loss or credit, or a decrease in income, gain or recapture, of the taxpayer for any Post-Tax Indemnification Period.

"Rockwell Australia" has the meaning set forth in Section 5.8(a).

"Straddle Period" means a taxable period that includes but does not end on the Distribution Date.

"Tax" or "Taxes" means all forms of taxation, whenever created or imposed, and whether of the United States or elsewhere, and whether imposed by a local, municipal, governmental, state, foreign, federal or other body, and without limiting the generality of the foregoing, shall include income, sales, use, ad valorem, gross receipts, license, value added, franchise, transfer, recording, withholding, payroll, wage withholding, employment, excise, occupation, unemployment insurance, social security, business license, business organization, stamp, environmental, premium and property taxes, together with any related interest (including the actual interest that would have accrued if there were no netting of Taxes), penalties and additions to any such tax, or additional amounts imposed by any Taxing Authority (domestic or foreign) upon the Company Group, the Newco Group, the Acquiror or any of their respective members or divisions or branches or affiliates.

"Tax Audit Proceeding" means any audit or other examination, judicial or administrative proceeding relating to liability for or refunds or adjustments with respect to Taxes.

"Tax Deficiency" means a net increase in Taxes payable as a result of a Tax Audit Proceeding or an amendment of a Tax Return or an event having a similar effect.

"Tax Indemnification Period" means any Pre-Merger Taxable Period and that portion of any Straddle Period that ends on the Distribution Date.

"Tax Item" means any item of income, gain, loss, deduction, credit, provisions for reserves, recapture of credits or any other item which is taken into account in determining taxable income or is otherwise taken into account in determining Taxes paid or payable, including an adjustment under Section 481 of the Code resulting from a change in accounting method.

"Tax Opinions" means the Acquiror Tax Opinion and the Company Tax Opinions.

"Tax Records" has the meaning set forth in Section 7.3.

"Tax Refund" means a refund of Taxes (including a reduction in Taxes as a result of any credit or any offset against Taxes or Tax Items) reduced (but not below zero) by any net increase in Taxes Actually Realized by the recipient (or its affiliate) thereof as a result of the receipt thereof; provided, however, that for purposes of determining any net increase in Taxes resulting from the refund of 1994 Australian Taxes of Rockwell Australia, any reduction of foreign tax credits for U.S. Tax purposes attributable to the receipt of such refund shall not be taken into account.

"Tax Return" means any return, filing, questionnaire, information return or other document required to be filed, including requests for extensions of time, filings made with respect to estimated tax payments, claims for refund and amended returns that may be filed, for any period with any Taxing Authority (whether domestic or foreign) in connection with any Tax or Taxes (whether or not a payment is required to be made with respect to such filing).

"Taxing Authority" means any governmental or quasi-governmental body exercising any Taxing authority or Tax regulatory authority.

"Timing Difference" means an increase in income, gain or recapture, or a decrease in deduction, loss or credit, as calculated for Income Tax purposes, of the taxpayer for any Post-Tax Indemnification Period coupled with an increase in deduction, loss or credit, or a decrease in income, gain or recapture, of the taxpayer for the Tax Indemnification Period.

"Transfer Taxes" means all transfer, documentary, sales, use, registration, value-added and other similar Taxes (including all applicable real estate transfer Taxes and real property transfer gains Taxes) and related amounts (including any penalties, interest and additions to Tax) arising as a result of or otherwise incurred in connection with any of the transactions contemplated by the Reorganization Agreements.

ARTICLE II

FILING OF TAX RETURNS

2.1. Preparation of Tax Returns.

(a) Consistent with Agreements. Each of the parties to this Agreement agrees to, and to cause each of its relevant affiliates to, report the Contribution and Distribution as transactions described in Sections 351 and 355 of the Code and/or a "reorganization" under Section 368(a)(1)(D) of the Code and the Merger as a "reorganization" under Section 368(a)(1)(B) of the Code on all Tax Returns and other filings, to take no position inconsistent therewith or with the consummation of such transactions as set forth in the Merger Agreement, the Distribution Agreement, the Acquiror's Tax Representation Letter, Newco's Tax Representation Letter and the Tax Opinions (in the absence of a controlling change in law or circumstance), and to file or cause to be filed all such Tax Returns on a timely basis (including extensions).

(b) Consistent with Past Practice. All Tax Returns described in
Section 2.2 hereof filed after the date of this Agreement, in the absence of a controlling change in law or circumstances, shall be prepared on a basis consistent with the elections, accounting methods, conventions and principles of taxation used for the most recent taxable periods for which Tax Returns involving similar Tax Items have been filed and in a manner that does not unreasonably accelerate deductions or defer income between Tax Indemnification Periods and Post-Tax Indemnification Periods to the extent that a failure to do so would result in an increase in Tax payable by, or a reduction in Tax attributes of, a member of the Company Group in a Post-Tax Indemnification Period. Subject to the provisions of this Agreement, all decisions relating to the preparation of Tax Returns shall be made in the sole

discretion of the party responsible under this Agreement for such preparation.

(c) Newco Obligations. Newco agrees to cooperate in good faith with the Company to determine the appropriate amount of Tax Items attributable to the Company Group to be reflected on any Tax Returns for Pre-Merger Taxable Periods or Straddle Periods to be prepared and filed by Newco in accordance with Section 2.2. Newco further agrees to provide the Company with a copy of each such Tax Return at least three weeks before it is filed and to follow the procedures in Section 4.3 relating to the calculation of Taxes and to not file any such Tax Returns without the prior written consent of the Company, which consent shall not be unreasonably withheld. If such consent is withheld, the Company shall so notify Newco at least two weeks prior to the due date for filing such Tax Returns. Newco will promptly provide the Company with copies of all such Tax Returns after filing.

2.2. Pre-Merger Tax Returns.

(a) Consolidated Federal Tax Returns. The Affiliated Group consolidated Federal Tax Returns (including amendments thereto) required to be filed or actually filed for any Pre-Merger Taxable Period after the date hereof shall be prepared and filed or caused to be prepared and filed by Newco, and the Company hereby irrevocably designates, and agrees to cause each of its affiliates to so designate, Newco as its agent to take any and all actions necessary or incidental to the preparation and filing of such Tax Returns.

(b) Other Pre-Merger Taxable Period and Straddle Period Tax Returns. All Tax Returns (including amendments thereto) other than those described in
Section 2.2(a) which include a member of the Newco Group or the Company Group that are required to be filed or are actually filed for any Pre-Merger Taxable Period or Straddle Period shall be prepared and filed or caused to be prepared and filed by Newco. The Company hereby irrevocably designates and agrees to cause each of its affiliates to designate Newco as its agent to take any and all actions necessary or incidental to the preparation and filing of such other Tax Returns.

2.3. Post-Merger Tax Returns. All Tax Returns for all Post-Merger Taxable Periods shall be the responsibility of the Newco Group if such Tax Returns relate

to a member or members of the Newco Group or their respective assets or businesses, and shall be the responsibility of the Company Group if such Tax Returns relate to a member or members of the Company Group or their respective assets or businesses.

ARTICLE III

PAYMENT OF TAXES

3.1. Allocation of Tax Liabilities.

(a) Consolidated Federal Tax Liabilities. Except as otherwise provided in this Agreement, Newco shall pay or cause to be paid, on a timely basis, all Taxes due with respect to the consolidated Federal Tax liability for all Pre-Merger Taxable Periods of the Affiliated Group. The Company and Acquiror on behalf of the Company Group hereby assume and agree to pay directly to or at the direction of Newco, at least two days prior to the date payment (including estimated payment) thereof is due, the Company Group's allocable share of those Federal Taxes which are Allowable Taxes for all Pre-Merger Taxable Periods which have not been paid on or before the Distribution Date.

(b) Combined, Consolidated and Unitary Corporate Taxes. Except as otherwise provided in this Agreement, Newco or a member of the Newco Group shall pay or caused to be paid, on a timely basis, all Combined Taxes. The Company and Acquiror on behalf of the Company Group hereby assume and agree to pay directly to or at the direction of Newco, at least two days prior to the date payment (including estimated payment) thereof is due, (i) the Company Group's allocable share of those Combined Taxes which are Allowable Taxes for all Pre-Merger Taxable Periods and the portion of any Straddle Period ending on the Distribution Date which have not been paid on or before the Distribution Date and (ii) the Company Group's allocable share of those Combined Taxes for the portion of any Straddle Period commencing on the day after the Distribution Date which have not been paid on or before the Distribution Date.

(c) Other Taxes. Except as otherwise provided in this Agreement, Newco shall pay or caused to be paid all Taxes of the Company Group and the Newco Group other than those described in Sections 3.1(a) and 3.1(b) ("Other Taxes") for all Pre-Merger Taxable Periods and Straddle

Periods. The Company and Acquiror on behalf of the Company Group hereby assume and agree to pay directly to or at the direction of Newco, at least two days prior to the date payment (including estimated payment) thereof is due, (i) the Company Group's allocable share of those Other Taxes which are Allowable Taxes for all Pre-Merger Taxable Periods and the portion of any Straddle Period ending on the Distribution Date and which have not been paid on or before the Distribution Date and (ii) the Company Group's allocable share of those Other Taxes for the portion of any Straddle Period commencing on the day after the Distribution Date which have not been paid on or before the Distribution Date.

(d) Post-Merger Taxes. Except as provided otherwise in this Agreement, all Taxes for all Post-Merger Taxable Periods shall be paid or caused to be paid by the party responsible under this Agreement for filing the Tax Return pursuant to which such Taxes are due or, if no such Tax Returns are due, by the party liable for such Taxes.

3.2. Tax Refunds, Carrybacks and California Tax Credits.

(a) Retention and Payment of Tax Refunds. Except as otherwise provided in this Agreement, Newco shall be entitled to retain, and to receive within ten days after Actually Realized by the Company Group, the portion of all Tax Refunds (including without limitation Tax Refunds of Australian Taxes) of Taxes for which the Newco Group is liable pursuant to Section 3.1 or
Section 6.1(a), and the Company shall be entitled to retain, and to receive within ten days after Actually Realized by the Newco Group, the portion of all Tax Refunds of Taxes for which the Company Group is liable pursuant to Section 3.1 or Section 6.1(b). Notwithstanding the foregoing, all Tax Refunds (i) of Allowable Taxes or (ii) resulting from the carryback of any Company Tax Item arising in a Post-Tax Indemnification Period to a Tax Indemnification Period
(determined in a manner analogous to the determination of an Income Tax Benefit) shall be for the account and benefit of the Company Group.

(b) Carrybacks. Except as otherwise provided in this Agreement, any Tax Refund (other than a Refund of Allowable Taxes) resulting from the carryback of any Newco Tax Item arising in a Post-Tax Indemnification Period to a Tax Indemnification Period (determined in a manner analogous to the determination of an Income Tax Benefit) shall be for

the account of Newco, and the Company shall pay over to Newco any such Tax Refund within ten days after it is Actually Realized by the Company.

(c) Refund Claims. Newco shall be permitted to file at Newco's sole expense, and the Company shall reasonably cooperate with Newco in connection with, any claims for Tax Refund to which Newco is entitled pursuant to this
Section 3.2 or any other provision of this Agreement. Newco shall reimburse the Company for any reasonable out-of-pocket costs and expenses incurred by any member of the Company Group in connection with such cooperation. The Company shall be permitted to file at the Company's sole expense, and Newco shall reasonably cooperate with the Company in connection with, any claims for Tax Refund to which the Company is entitled pursuant to this Section 3.2 or any other provision of this Agreement. The Company shall reimburse Newco for any reasonable out-of-pocket costs and expenses incurred by any member of the Newco Group in connection with such cooperation.

Any claim for a Tax Refund to which Newco is entitled under this Agreement shall be subject to the Company Group's consent (such consent not to be unreasonably withheld), to be exercised in a manner analogous to that set forth in Section 2.1(c). Any claim for a Tax Refund to which the Company Group is entitled under this Agreement shall be subject to the Newco Group's consent (such consent not to be unreasonably withheld), to be exercised in a manner analogous to that set forth in Section 2.1(c).

(d) California Tax Credits. Notwithstanding anything to the contrary in this Agreement, Newco shall be entitled to receive, within ten days after Actually Realized by the Company Group, any Tax Refund attributable to any California Tax Credits.

ARTICLE IV

ALLOCATION AND CALCULATION OF TAXES

4.1. Straddle Period Taxes. In the case of any Straddle Period:

(i) the periodic Taxes of the Company Group and the Newco Group that are not based on income or receipts (e.g., property Taxes) for the portion of any Straddle

Period ending on the Distribution Date shall be computed based on the ratio of the number of days in such portion of the Straddle Period and the number of days in the entire taxable period;

(ii) Taxes of the Company Group and the Newco Group for the portion of any Straddle Period ending on the Distribution Date (other than Taxes described in Section 4.1(i) above) shall be computed as if such taxable period ended as of the close of business on the Distribution Date, and, in the case of any Taxes of the Company Group and the Newco Group attributable to the ownership by any member of the Company Group and the Newco Group of any equity interest in any partnership or other "flowthrough" entity, as if a taxable period of such partnership or other "flowthrough" entity ended as of the close of business on the Distribution Date; and

(iii) with respect to any Joint Tax Return for a Straddle Period, the allocation of Tax liability between the Company Group, on the one hand, and the Newco Group, on the other hand, shall be determined in a manner analogous to that set forth in Treasury Regulation Section 1.1552-1(a)(2).

4.2. Share of Allowable Taxes. The Company Group's and the Newco Group's allocable share of Tax liability which is attributable to Allowable Taxes for all Pre-Merger Taxable Periods and the portion of any Straddle Period ending on the Distribution Date shall be determined in accordance with the Prior Arrangement.

4.3. Calculations and Determinations. All calculations and determinations required to be made pursuant to this Agreement shall be made in good faith by Newco on a basis consistent with prior years and in a manner that does not unreasonably accelerate deductions or defer income between Tax Indemnification Periods and Post-Tax Indemnification Periods, and such calculations and determinations shall be subject to the written approval of the Company, which approval shall not be unreasonably withheld. Whenever Newco is required to make any of the calculations or determinations referred to in the prior sentence, Newco shall provide the Company with (i) preliminary drafts of any material calculations (including calculations of the amount for which the Company Group will be liable under this Agreement) or determinations as early as practicable, and final copies of such

calculations (including calculations of the amount for which the Company Group will be liable under this Agreement) or determinations no later than nine weeks prior to the date on which applicable Tax Returns are to be filed, and such other information as the Company shall reasonably request and (ii) if requested by the Company, access (during reasonable business hours and upon reasonable advance notice) to copies of the relevant portions of any Tax Returns, reports or other statements. If the Company's written approval of such calculations and determinations is withheld, the Company shall so notify Newco no later than six weeks prior to the date on which the applicable Tax Returns are to be filed.

4.4. Principles of Determination. In implementing this Agreement, except as otherwise specifically provided, the parties shall make any adjustments that are necessary to ensure that, with respect to Taxes for Straddle Periods or Pre-Merger Taxable Periods, payments and reimbursements between the parties reflect the principles that the Company is to bear responsibility for Taxes for the Company Group (and any affiliates) that
(i) are attributable to the portion of any Straddle Period after the Distribution Date (calculated by treating the day after the Distribution Date as the first day of a taxable period) or (ii) are Allowable Taxes for any Pre-Merger Taxable Period or for any Straddle Period, and that Newco is to bear responsibility for all other Taxes for Straddle Periods and Pre-Merger Taxable Periods.

4.5. Change in Law. Notwithstanding the agreement with respect to reporting of Tax Items attributable to Newco Options, Compensation Payments, Environmental Coverage Claims and Health Care Claims set forth in Sections 5.1(a), 5.2(a) and 5.5(a) of this Agreement, respectively, neither the Company Group nor the Newco Group shall have any obligation to report any such Tax Items as set forth in such Sections in the event that either such party determines that there is no substantial authority to support reporting such Tax Items on a Tax Return filed by such party as a result of a change in or amendment to any law or regulation, or any change in the official interpretation thereof, effective or occurring after the date of this Agreement, and such Group provides prompt notice to the other Group of any such determination.

ARTICLE V

NEWCO OPTIONS; COMPENSATION PAYMENTS; CERTAIN CONTRACTS;
GUNSHIP CLAIMS; ENVIRONMENTAL COVERAGE CLAIMS; HEALTH CARE
CLAIMS; B-1B CONTRACTS; FOREIGN SUBSIDIARIES;
CONSENT SOLICITATION.

5.1. Tax Deductions Arising in Respect of Newco Options.

(a) Tax Deductions. Notwithstanding anything to the contrary in this Agreement, unless the IRS issues a contrary private letter ruling to the Company or Newco, or Newco and the Company otherwise agree in writing, (x) the Company Group (and not the Newco Group) shall claim the post-Distribution Date Tax deductions in respect of Newco Options held by Company Group Employees and Former Employees (e.g., due to an option cash-out, an exercise of non-incentive stock options or a disqualifying disposition) and shall pay to Newco the amount of any Tax Refund (such Tax Refund not to include, or be tax-effected for any Tax Refund of the Company's allocable share of Allowable Taxes) arising in respect of such deductions within ten days after such Tax Refund is Actually Realized by the Company Group (including the time estimated Tax payments are due), and (y) the Newco Group shall claim any post-Distribution Date Tax deductions in respect of Newco Options held by any Other Individuals. Notwithstanding anything to the contrary contained herein, to the extent that any Tax deductions of the Company Group in respect of Newco Options held by Company Group Employees and Former Employees are carried back from a Post-Tax Indemnification Period to a Tax Indemnification Period, the Company shall pay to Newco any resulting Tax Refunds to the extent required pursuant to this
Section 5.1(a), but the Company shall have no obligation to pay to Newco any additional amounts under any other provision of this Agreement (other than
Section 6.6(a)) with respect to such Tax Refunds.

(b) Notices, Withholding, Reporting. Newco shall promptly notify the Company of any post-Distribution Date event giving rise to income to any Company Employees and Former Employees in connection with the Newco Options and, if required by law, the Company shall withhold applicable Taxes and satisfy applicable Tax reporting obligations in connection therewith. Newco shall within 10 days of demand thereof reimburse the Company for all reasonable out-of-

pocket expenses incurred in connection with the Newco Options, including with respect to incremental Tax reporting obligations and any incremental employment Tax obligations; provided that the Company shall use reasonable efforts to collect any such amounts required to be paid by Company Employees and Former Employees.

(c) Tax Audit Adjustments. Notwithstanding the provisions of
Section 5.1(a), in the event a Tax Audit Proceeding shall determine (by settlement or otherwise), or the parties otherwise determine pursuant to Section 4.5, that all or a portion of the Tax deductions in respect of Newco Options held by Company Employees and Former Employees was not available to the Company Group, Newco shall pay to the Company the amount of the resulting Tax Deficiency (such Tax Refund not to include, or be tax-effected for, any Tax Refund of the Company's allocable share of Allowable Taxes) within 10 days after the Company Group has notified the Newco Group that such Tax Deficiency has been Actually Realized. In the event a Tax Audit Proceeding shall determine (by settlement or otherwise), or the parties otherwise determine pursuant to Section 4.5, that all or a portion of the Tax deductions in respect of Newco Options held by Other Individuals should have been claimed by the Company Group, the Company shall claim such Tax deductions (by an amended Tax Return or otherwise) and shall pay to Newco the amount of any Tax Refund (such Tax Refund not to include, or be tax-effected for, any Tax Refund of the Company's allocable share of Allowable Taxes) arising in respect of such Tax deduction, in each case within 10 days after such Tax Refund is Actually Realized by the Company Group (including at the time estimated Tax payments are due). In the event that any Tax Audit Proceeding shall determine (by settlement or otherwise) that the Company Group realized taxable income directly or indirectly as a result of the exercise or settlement (including payment by Newco in cash or stock) of the Newco Options or the disqualifying disposition of any stock received upon exercise thereof (determined in a manner analogous to the determination of an Income Tax Detriment), Newco shall pay to the Company the amount of any resulting Tax Deficiency (such Tax Refund not to include, or be tax-effected for, any Tax Refund of the Company's allocable share of Allowable Taxes) within 10 days after the Company Group has notified the Newco Group that such Tax Deficiency has been Actually Realized.

(d) IRS Ruling Request. At Newco's request and sole expense, Newco and the Company shall jointly seek a private letter ruling from the IRS regarding the proper party to claim the post-Distribution Date Tax deductions in respect of Newco Options.

5.2. Compensation Payments.

(a) Tax Deductions. Notwithstanding anything to the contrary in this Agreement, unless Newco and the Company otherwise agree in writing, (x) the Company Group (and not the Newco Group) shall claim the post-Distribution Date Tax deductions in respect of Compensation Payments paid to Company Group Employees and Former Employees and shall pay to Newco the amount of any Tax Refund (such Tax Refund not to include, or be tax-effected for, any Tax Refund of the Company's allocable share of Allowable Taxes) arising in respect of such Tax deductions within ten days after such Tax Refund is Actually Realized by the Company Group (including the time estimated Tax payments are due) and
(y) the Newco Group shall claim any post-Distribution Date Tax deductions in respect of Compensation Payments paid to Other Individuals. Notwithstanding anything to the contrary contained herein, to the extent that any Tax deductions of the Company Group in respect of Compensation Payments are carried back from a Post-Tax Indemnification period to a Tax Indemnification Period, the Company shall pay to Newco any resulting Tax Refunds to the extent required pursuant to this Section 5.2(a), but the Company shall have no obligation to pay to Newco any additional amounts under any other provision of this Agreement (other than
Section 6.6(a)) with respect to such Tax Refunds.

(b) Notices, Withholding, Reporting. The Company shall withhold applicable Taxes and satisfy applicable Tax reporting obligations in connection with the Compensation Payments made to Company Group Employees and Former Employees. Newco shall within 10 days of demand thereof reimburse the Company for all reasonable out-of-pocket expenses incurred in connection with the Compensation Payments, including with respect to incremental Tax reporting obligations and any incremental employment Tax obligations resulting from such Compensation Payments; provided that the Company shall use reasonable efforts to collect any such amounts required to be paid by Company Employees and Former Employees.

(c) Tax Audit Adjustments. Notwithstanding the provisions of
Section 5.2(a), in the event a Tax Audit Proceeding shall determine (by settlement or otherwise), or the parties otherwise determine pursuant to
Section 4.5, that all or a portion of the Tax deductions in respect of Compensation Payments paid to Company Employees and Former Employees was not available to the Company Group, Newco shall pay to the Company the amount of the resulting Tax Deficiency (such Tax Refund not to include, or be tax-effected for, any Tax Refund of the Company's allocable share of Allowable Taxes) within 10 days after the Company Group has notified the Newco Group that such Tax Deficiency has been Actually Realized. In the event a Tax Audit Proceeding shall determine (by settlement or otherwise), or the parties otherwise determine pursuant to Section 4.5, that all or a portion of the Tax deductions in respect of Compensation Payments paid to Other Individuals should have been claimed by the Company Group, the Company shall claim such Tax deductions (by an amended Tax Return or otherwise) and shall pay to Newco the amount of any Tax Refund (such Tax Refund not to include, or be tax-effected for, any Tax Refund of the Company's allocable share of Allowable Taxes) arising in respect of such deductions, in each case within 10 days after such Tax Refund is Actually Realized by the Company Group (including at the time estimated Tax payments are due). In the event that any Tax Audit Proceeding shall determine (by settlement or otherwise) that the Company Group realized taxable income directly or indirectly as a result of the payment of any Compensation Payments (determined in a manner analogous to the determination of an Income Tax Detriment), Newco shall pay to the Company the amount of any resulting Tax Deficiency (such Tax Refund not to include, or be tax-effected for, any Tax Refund of the Company's allocable share of Allowable Taxes) within 10 days after the Company Group has notified the Newco Group that such Tax Deficiency has been Actually Realized.

5.3. Percentage Completion Contracts.

(a) Adjustment to Contract Profitability. Newco and the Company shall each bear one-half of any interest cost due to, and be entitled to receive one-half of any interest refunded by, the IRS in respect of Tax Indemnification Periods resulting from adjustments required subsequent to the Distribution Date with respect to long-term contracts held by the Company pursuant to the look-back method of Treasury Regulation Section 1.460-6 or any comparable provision of State, local or foreign Tax law.

The Company shall pay to Newco its share of any such refunded interest within 10 days after such refund is Actually Realized by the Company, and Newco shall pay to the Company its share of any such interest due within 10 days after the Company Group has notified the Newco Group that such interest cost has been Actually Realized by the Company Group.

5.4. Gunship Claims.

(a) Gunship Claims Income Tax Paid. Newco hereby represents that prior to the date hereof the Company has reflected in taxable income on its U.S. Federal Income Tax Returns $181 million of income relating to the Gunship Claims.

(b) Tax Item Timing Adjustments. If the Newco Group so requests, the Company Group shall consent to Newco pursuing a claim for a Tax Refund, at Newco's sole expense, in respect of Federal Income Taxes paid by the Company prior to the date hereof with respect to income relating to the Gunship Claims. Any such refund claim shall be governed by Section 3.2. Notwithstanding any other provision in this Agreement, Newco shall pay to the Company the amount of any increase in Taxes for the Post-Tax Indemnification Period attributable to the receipt of any resulting Tax Refund within 10 days after the Company Group has notified the Newco Group that such increase has been Actually Realized.

5.5. Environmental Coverage Claims and Health Care Claims.

(a) Tax Return Reporting. Newco and the Company shall each report its proportionate share of Tax Items attributable to the Environmental Coverage Claims and Health Care Claims, based on the allocation of the proceeds of the Environmental Coverage Claims and Health Care Claims (in the case of income Items), and the manner in which costs are shared (in the case of deduction Items), pursuant to Sections 3.2 and 3.8, respectively, of the Post-Closing Covenants Agreement.

(b) Tax Audit Adjustments. (i) In the event a Tax Audit Proceeding shall determine (by settlement or otherwise), or the parties otherwise determine pursuant to Section 4.5, that the Company Group should have reported Tax Items in respect of the Environmental Coverage Claims or the Health Care Claims that were reported by the Newco Group

pursuant to Section 5.5(a), Newco shall pay to the Company the amount of any resulting Tax Deficiency (and shall have the right to receive or retain any resulting Tax Refund) within ten days after the Company has notified Newco that it has Actually Realized such Tax Deficiency or after the Company Group has Actually Realized such Tax Refund, as the case may be.

(ii) In the event a Tax Audit Proceeding shall determine (by settlement or otherwise), or the parties otherwise determine pursuant to
Section 4.5, that the Newco Group should have reported Tax Items in respect of the Environmental Coverage Claims or the Health Care Claims that were reported by the Company Group pursuant to Section 5.5(a), the Company shall pay to the Newco Group the amount of any resulting Tax Deficiency (and shall have the right to receive or retain any resulting Tax Refund) within ten days after Newco has notified the Company that it has Actually Realized such Tax Deficiency or after the Newco Group has Actually Realized such Tax Refund, as the case may be.

(c) For purposes of determining when a party has Actually Realized a Tax Deficiency under Section 5.5(b), in the event and to the extent Taxes payable by that the Company or Newco, as the case may be, are not increased as a result of including Tax Items in the nature of income attributable to the Environmental Coverage Claims or the Health Care Claims because such Tax Items are offset by losses, credits or other Tax Items of such party, such party shall be deemed to have paid Taxes with respect to such offset Tax Items at the highest applicable marginal rates.

5.6. B-1B Contracts.

(a) Tax Return Reporting. The Company Group shall report on its Post-Tax Indemnification Period Income Tax Returns all Tax Items arising in respect of the B-1B Contracts that are not reflected on the Company's Income Tax Returns for any Tax Indemnification Period, shall pay all Taxes with respect to such Tax Items and shall be entitled to all Tax Refunds attributable to such Tax Items.

5.7. Research and Experimentation Credit. The Company Group hereby consents to Newco pursuing its claim for Tax Refund in respect of Tax Returns filed for the Tax Indemnification Period relating to the research and experimentation tax credit.

5.8. Foreign Subsidiaries.

(a) Distribution of Australian Subsidiary. Prior to the Distribution, Rockwell Australia Limited ("Rockwell Australia") will be distributed to the Company in a transaction intended to qualify as a transaction pursuant to
Section 355 of the Code. In the event that such transaction does not so qualify and the Company Group sells or otherwise disposes of the stock of Rockwell Australia, the Company shall pay to Newco, within 10 days after such Tax Refund is Actually Realized by the Company, the amount of any Company Group Tax Refund arising because such transaction failed to so qualify.

(b) Foreign Tax Credits, Subpart F Income and PFIC Income. In the event that, during the period beginning on the Distribution Date and ending on September 30, 1997, the Company Group engages in any transaction outside of the ordinary course of business and such transaction (i) affects the foreign tax credit computation with respect to any amount taken into income by the Company Group with respect to Rockwell Australia and its subsidiaries for the Tax Indemnification Period, (ii) increases the amount includible in the Company Group's income pursuant to Section 951 et seq of the Code that is attributable to the Company's ownership interest in Rockwell Australia and its subsidiaries for the Tax Indemnification Period or (iii) increases the Company Group's Tax pursuant to Section 1291 et seq of the Code that is attributable to the Company's ownership interest in Rockwell Australia and its subsidiaries for the Tax Indemnification Period, the Company shall pay to Newco any resulting additional net Tax cost to the Newco Group for the Tax Indemnification Period within ten days after notification by Newco that the Company Group has Actually Realized such net Tax cost.

(c) In connection with the transactions contemplated under the Business Acquisition Agreement, the Company Group will cooperate with Newco, provide such information as Newco reasonably requests and take all actions as reasonably requested by Newco to minimize the Taxes payable by the Company Group or the Newco Group attributable to any action taken in connection with such transactions including, but not limited to, consenting to the filing by Newco for rollover relief.

5.9. Consent Solicitation; Repayment of Short-Term Debt.

(a) Any net Income Tax cost attributable to cancellation of indebtedness income ("CODI"), or net Income Tax benefit attributable to bond retirement premium ("BRP") (determined in each case in a manner analogous to the determination of an Income Tax Detriment and Income Tax Benefit, respectively), recognized by the Company Group as a result of the transactions described in Sections 3.1 and 5.18 of the Merger Agreement and/or a tender offer by Acquiror for the outstanding notes of the Company (collectively, the "Debt Refinancing") shall be for the account of Acquiror.

(b) The Company Group shall report any CODI or BRP resulting from the Debt Refinancing as occurring in a Post-Tax Indemnification Period in accordance with Treasury Regulation Section 1.1502-76(b)(ii)(B), unless the relevant Taxing Authority will not accept a Tax Return on such basis.

ARTICLE VI

TAX INDEMNIFICATION; TAX CONTESTS

6.1. Indemnification.

(a) Newco Indemnification. Except as otherwise provided in Article V or Section 6.1(b), Newco and the Newco Group shall be liable for and shall indemnify, defend and hold harmless the members of the Company Group and Acquiror and each of their respective affiliates and Representatives from and against (A) all Taxes of the Company Group and the Newco Group for Pre-Merger Taxable Periods other than the Company Group's allocable share of Allowable Taxes for such Pre-Merger Taxable Periods, (B) all Taxes of the Company Group and the Newco Group for the portion of any Straddle Period ending on the Distribution Date other than the Company Group's allocable share of Allowable Taxes for such portion of any such Straddle Period, (C) all Taxes of the Newco Group for the portion of any Straddle Period beginning on the day after the Distribution Date (calculated by treating the day after the Distribution Date as the first day of a taxable period), (D) all Taxes of the Newco Group for Post-Merger Taxable Periods, (E) all liability (as a result of Treasury Regulation Section 1.1502-6(a) or otherwise) for Income Taxes of any person (other than a member of the Company Group or the Newco Group) which is or has ever been affiliated with any member of the Company Group or the Newco Group or with which any member of the

Company Group or the Newco Group joins or has ever joined (or is or has ever been required to join) in filing any consolidated, combined or unitary Tax Return for any Pre-Merger Taxable Period or Straddle Period, (F) the amount of any California Tax Deficiency resulting from the receipt by the Company Group of any Tax Refund attributable to any California Tax Credits, and the amount of any other net Tax cost attributable to the California Tax Credits or any refund thereof, (G) all Taxes for which Newco is liable pursuant to Article V or
Section 6.5, (H) any Transfer Taxes imposed in connection with or as a result of the Contribution and/or the Distribution, and one-half of any Transfer Taxes imposed in connection with or as a result of the Merger, (I) 50% of any Income Taxes payable by the Company Group in any Post-Tax Indemnification Period with respect to any long-term contract accounted for Federal income Tax purposes pursuant to the "completed contract method" and/or the "percentage completion method" of accounting to the extent attributable to Contract Profitability with respect to such contract as of the Distribution Date, but only to the extent such Contract Profitability exceeds $22 million in the aggregate, (J) all Taxes for any taxable period (whether beginning before, on or after the Distribution Date) that would not have been payable but for the breach by any member of the Newco Group of any representation, warranty or obligation under this Agreement, (K) all Taxes for any taxable period (whether beginning before, on or after the Distribution Date) that would not have been payable but for the inaccuracy of the representations and warranties contained in clauses (ix) or (xii) of
Section 4.1(l) or clause (xi) of Section 4.1(m) of the Merger Agreement or the breach of the covenant contained in Section 5.1(n) of the Merger Agreement,
(L) all liability for Taxes resulting from the Contribution, Distribution and/or Merger (including the transactions described in the last sentence of each of Sections 2.1(a), 2.1(b), 2.2(a) and 2.2(b) of the Distribution Agreement), (but not including any Taxes attributable to collateral consequences of such transactions, such as a reassessment of Company property for property Tax purposes resulting from the change in control incident to the Merger), (M) all Taxes that would not have been imposed but for any reduction in the Tax attributes (including without limitation, Tax loss carryovers and Tax basis in stock) of any member of the Company Group that occurs as a result of the transactions (other than the transfer of the stock of Rockwell Australia to the Company referred to in Section 5.8(a)) contemplated under the Business Acquisition Agreement (the "Rockwell Australia

Reorganization") (such additional Taxes to be computed taking into account any Tax benefit resulting from the Rockwell Australia Reorganization actually realized by any member of the Company Group at or before the time such additional Taxes are imposed, provided, however, that if any Tax benefit resulting from the Rockwell Australia Reorganization is actually realized by any member of the Company Group after the time such Taxes are imposed, the Company Group shall reimburse Newco for the amount of any such reduction in Taxes as a result therefrom, but not in excess of the amount previously paid by the Newco Group pursuant to this Section 6.1(a)(M)), (N) all liability for Taxes incurred by any member of the Company Group that would not have been imposed except as a result of any action taken pursuant to Section 5.8(c), and (O) all liability for any reasonable legal, accounting, appraisal, consulting or similar fees and expenses relating to the foregoing. Notwithstanding the foregoing, Newco shall not indemnify, defend or hold harmless any member of the Company Group from any liability for Taxes, other than Taxes resulting from the failure of the Contribution or Distribution to qualify as transactions described in Sections 351 or 355 of the Code and/or as a "reorganization" under
Section 368(a)(1)(D) of the Code and the Merger as a "reorganization" pursuant to Section 368(a)(1)(B) of the Code, resulting from any action taken by any member of the Company Group on the Distribution Date after the Effective Time (other than actions relating to the Debt Refinancing or in the ordinary course of business) (a "Buyer Tax Act").

For purposes of clause (I) of the second preceding sentence, Newco's indemnity obligation shall arise only at such time as the Company Group Actually Realizes a Tax cost with respect to Contract Profitability in excess of $22,000,000, which shall be deemed to occur only after the Company Group has Actually Realized income items attributable to Contract Profitability with respect to long-term contracts in existence on the Distribution Date in an aggregate amount of $22,000,000.

(b) Company and Acquiror Indemnification. (i) Company Indemnification. Except as otherwise provided in Article V or Section 6.1(a), the Company shall be liable for and shall indemnify, defend and hold harmless the Newco Group from and against (A) all Taxes of the Company Group for Post-Merger Taxable Periods, (B) the Company Group's allocable share of Allowable Taxes for Pre-Merger Taxable Periods and the portion of any Straddle Period ending on the

Distribution Date, (C) all Taxes of the Company Group for the portion of any Straddle Period beginning on the day after the Distribution Date (calculated by treating the day after the Distribution Date as the first day of a taxable period), (D) all Taxes resulting from a Buyer Tax Act, (E) all Taxes for which the Company is liable pursuant to Article V or Section 6.5, (F) all Taxes for any taxable period (whether beginning before, on or after the Distribution Date) that would not have been paid but for the breach by any member of the Company Group of any representation, warranty or obligation under this Agreement and (G) all liability for any reasonable legal, accounting, appraisal, consulting or similar fees and expenses relating to the foregoing.

(ii) Acquiror Indemnification. Acquiror shall indemnify defend and hold harmless Newco for one-half of any Transfer Taxes imposed in connection with or as a result of the Merger.

(c) Payments. Subject to Section 6.6(b), any indemnity payment required to be made pursuant to this Section 6.1 shall be paid within thirty days after the indemnified party makes written demand upon the indemnifying party, but in no case earlier than five business days prior to the date on which the relevant Taxes are required to be paid (or would be required to be paid if no such Taxes are due) to the relevant Taxing Authority (including estimated Tax payments).

6.2. Notice of Indemnity. Whenever a party hereto (hereinafter an "Indemnitee") becomes aware of the existence of an issue raised by any Taxing Authority which could reasonably be expected to result in a determination that would increase the liability for any Tax of the other party hereto or any member of its Group for any Post-Tax Indemnification Period (in the case of the Company Group) or for any Tax Indemnification Period (in the case of the Newco Group) or require a payment hereunder to the other party (hereinafter an "Indemnity Issue"), the Indemnitee shall in good faith promptly give notice to such other party (hereinafter the "Indemnitor") of such Indemnity Issue. The failure of any Indemnitee to give such notice shall not relieve any Indemnitor of its obligations under this Agreement except to the extent such Indemnitor or its affiliate is actually materially prejudiced by such failure to give notice.

6.3. Tax Contests. The Indemnitor and its representatives, at the Indemnitor's expense, shall be entitled to participate (A) in all conferences, meetings or proceedings with any Taxing Authority, the subject matter of which is or includes an Indemnity Issue and (B) in all appearances before any court, the subject matter of which is or includes an Indemnity Issue. The party who has responsibility for filing the Tax Return under this Agreement (the "Responsible Party") with respect to which there could be an increase in liability for any Tax or with respect to which a payment could be required hereunder shall have the right to decide as between the parties hereto how such matter is to be dealt with and finally resolved with the appropriate Taxing Authority and shall control all audits and similar proceedings. If no Tax Return is or was required to be filed in respect of an Indemnity Issue, the Indemnitor shall be treated as the Responsible Party with respect thereto. The Responsible Party agrees to cooperate in the settlement of any Indemnity Issue with the other party and to take such other party's interests into account. If the Indemnitor is not the Responsible Party, such cooperation may include permitting the Indemnitor, at the Indemnitor's sole expense, to litigate or otherwise resolve any Indemnity Issue. If Newco is the Responsible Party and if either (x) the Taxes at issue in the aggregate may equal or exceed $50,000 (computed taking into account reasonably anticipated future year Tax costs on a present value basis) or (y) the Indemnity Issue relates to the qualification of the Contribution or the Distribution as transactions described in Sections 351 and 355 of the Code and/or a "reorganization" within the meaning of
Section 368(a)(1)(D) of the Code or the Merger as a "reorganization" within the meaning of Section 368(a)(1)(B) of the Code, (i) Newco shall not settle any such Indemnity Issue without the prior written consent of the Acquiror, which consent shall not be unreasonably withheld, (ii) the Acquiror, and counsel of its own choosing, shall have the right to participate fully, at its own expense, in all aspects of the defense of such Indemnity Issue, (iii) Newco shall inform the Acquiror, reasonably promptly in advance, of the date, time and place of all administrative and judicial meetings, conferences, hearings and other proceedings relating to such Indemnity Issue, (iv) the Acquiror shall, at its own expense, be entitled to have its representatives (including counsel, accountants and consultants) attend and participate in any such administrative and judicial meetings, conferences, hearings and other proceedings relating to such Indemnity Issue, (v) Newco shall provide to the Acquiror all

information, document requests and responses, proposed notices of deficiency, notices of deficiency, revenue agent's reports, protests, petitions and any other documents relating to such Indemnity Issue promptly upon receipt from, or in advance of submission to (as the case may be), the relevant Taxing Authority or courts and (vi) Newco shall not file or submit any protests, briefs, responses, petitions or other documents relating to such Indemnity Issue with such relevant Taxing Authority or courts without the prior written consent of the Acquiror, which consent shall not be unreasonably withheld. Notwithstanding any other provision of this Agreement, if Newco has materially satisfied its obligations under this Agreement and if the Company fails to permit Newco to control any Indemnity Issue relating to the qualification of the Contribution and Distribution as transactions described in Sections 351 and 355 of the Code and/or a "reorganization" within the meaning of Section 368(a)(1)(D) of the Code or the qualification of the Merger as a "reorganization" within the meaning of Section 368(a)(1)(B) of the Code, then Newco shall not be liable for and shall not indemnify the Company Group for any Tax Deficiency resulting from an adverse determination of such Indemnity Issue.

6.4. Timing Adjustments.

(a) Timing Differences. If a Tax Audit Proceeding or an amendment of a Tax Return results in a Timing Difference, and such Timing Difference results in a decrease in an indemnity obligation Newco has or would otherwise have under Section 6.1 and/or an increase in the amount of a Tax Refund to which Newco is entitled to under Section 3.2, then in each Post-Tax Indemnification Period in which the Company Group Actually Realizes an Income Tax Detriment, Newco shall pay to the Company an amount equal to such Income Tax Detriment; provided, however, that the aggregate payments which Newco shall be required to make under this Section 6.4(a) with respect to any Timing Difference shall not exceed the aggregate amount of the Income Tax Benefits realized by the Newco Group for all taxable periods and the Company Group for all Tax Indemnification Periods as a result of such Timing Difference. Newco shall make all such payments within ten days after the Company notifies Newco that the relevant Income Tax Detriment has been Actually Realized.

(b) Reverse Timing Differences. If a Tax Audit proceeding or an amendment of a Tax Return results in a

Reverse Timing Difference, and such Reverse Timing Difference results in an increase in an indemnity obligation of Newco under Section 6.1 and/or a decrease in the amount of a Tax Refund to which Newco is or would otherwise be entitled to under Section 3.2, then in each Post-Tax Indemnification Period in which the Company Group Actually Realizes an Income Tax Benefit, the Company shall pay to Newco within ten days after the Company has Actually Realized such Income Tax Benefit an amount equal to such Income Tax Benefit; provided, however, that the aggregate payments which the Company shall be required to make under this Section 6.4(b) which respect to any Reverse Timing Difference shall not exceed the aggregate amount of the Income Tax Detriments realized by the Company Group and the Newco Group for all Tax Indemnification Periods as a result of such Reverse Timing Difference.

6.5. Certain Post-Distribution Transactions.

(a) Consistent with Agreements. Newco shall, and shall cause each Newco Group member to, comply with and take no action inconsistent with Newco's Tax Representation Letter. Acquiror shall, and shall cause each member of the Company Group to, comply with and take no action inconsistent with Acquiror's Tax Representation Letter. The Newco Group, Acquiror and the Company Group shall use their respective best efforts to have the Contribution and the Distribution qualify as transactions described in Sections 351 and 355 of the Code and/or a "reorganization" within the meaning of Section 368(a)(1)(D) of the Code and to have the Merger qualify as a "reorganization" within the meaning of Section 368(a)(1)(B) of the Code. The parties hereto intend that the sole remedy for breach of the covenants contained in this Section 6.5(a) shall be as set forth in Section 6.5(b) hereof.

(b) Tax-Free Reorganization Treatment. Acquiror and the Company agree to indemnify and hold the Newco Group harmless from and against any Taxes resulting from any Action (as hereinafter defined) which causes either the Contribution and the Distribution to fail to qualify as transactions described in Sections 351 and 355 of the Code and/or a "reorganization" within the meaning of Section 368(a)(1)(D) of the Code or the Merger to qualify as a "reorganization" within the meaning of Section 368(a)(1)(B) of the Code. An "Action" shall mean any of the actions set forth on Schedule 6.5 hereof, taken by Acquiror or the Company or any of their respective affiliates (other than

the members of the Newco Group) within the two-year period following the Distribution Date. Notwithstanding the foregoing, an Action shall not include any transaction or action disclosed or described in Newco's Tax Representation Letter or the Acquiror's Tax Representation Letter, or required or otherwise contemplated by any Reorganization Agreement (or any agreement or document included as an exhibit thereto), or of which the Company or Newco has actual knowledge as of the Distribution Date. An Action shall not include any action on the part of any member of the Newco Group, or any of their respective shareholders, officers, directors or agents. Newco agrees to indemnify and hold the Acquiror and the Company Group harmless from and against any Tax liability resulting from or otherwise attributable to the Contribution and Distribution failing to qualify under Sections 351 and 355 of the Code and/or a "reorganization" under Section 368(a)(1)(D) of the Code or the Merger failing to qualify as a "reorganization" under Section 368(a)(1)(B) of the Code, except to the extent such Tax liability results from an Action. For purposes of this
Section 6.5(b), the amount of any Taxes resulting from an Action shall equal the difference between (i) the Taxes actually paid with respect to the Contribution, Distribution and the Merger and (ii) the greater of (x) the amount of Taxes that would have been payable with respect to the Contribution and Distribution if such transactions had qualified under Sections 351 and 355 of the Code and/or a "reorganization" under Section 368(a)(1)(D) of the Code and the Merger if such transaction had qualified as a "reorganization" under
Section 368(a)(1)(B) and (y) the amount of Taxes that would have been payable with respect to the Contribution, Distribution and the Merger in the absence of such Action.

6.6. Payments Net of Taxes. (a) Gross-Up and Characterization. The amount of any payment under this Agreement or under Section 2.1(b) of the Post-Closing Covenants Agreement shall be (i) increased to take account of any net Tax cost incurred by the recipient thereof as a result of the receipt or accrual of payments hereunder (grossed-up for such increase) and (ii) reduced to take account of any net Tax benefit realized by the recipient arising from the incurrence or payment of any such payment, other than any such net Tax benefit that the recipient is specifically entitled to retain pursuant to this Agreement. In computing the amount of any such Tax cost or Tax benefit, the recipient shall be deemed to recognize all other items of income, gain, loss, deduction or credit before

recognizing any item arising from the receipt or accrual of any payment hereunder. Except as provided in Section 6.6(b), or unless the parties otherwise agree to an alternative method for determining the present value of any such anticipated Tax benefit or Tax cost, any payment hereunder shall initially be made without regard to this Section and shall be increased or reduced to reflect any such net Tax cost (including gross-up) or net Tax benefit only after the recipient has Actually Realized such cost or benefit. It is the intention of the parties that payments made pursuant to this Agreement are to be treated as relating back to the Contribution as an adjustment to the assets and liabilities contributed thereunder, and the parties shall not take any position inconsistent with such intention before any Taxing Authority, except to the extent that a final determination (as defined in Section 1313 of the Code) with respect to the recipient party causes any such payment not to be so treated.

(b) Time for Payment. Notwithstanding any other provision of this Agreement, to simplify the administration of this Agreement, the payment of any amount less than $25,000 required to be made pursuant to this Agreement by one party hereto to another party hereto need not be made to such other party prior to thirty days following the later of (i) the close of the calendar quarter during which such payment obligation arose and (ii) the day during such calendar quarter when the aggregate amount of all such less than $25,000 payment obligations arising during such calendar quarter exceeds $150,000. Unless otherwise specified by the recipient for items exceeding $100,000, any such payment may be made on a net Tax basis (i.e., reduced to take account of any net Tax benefit to be realized by the recipient (computed at an effective Tax rate to be agreed upon from time-to-time by the parties)) to the extent such recipient is entitled to a corresponding deduction.

(c) Right to Offset. Any party making a payment under this Agreement shall have the right to reduce any such payment by any amounts owed to it by the other party to this Agreement.

ARTICLE VII

COOPERATION AND EXCHANGE OF INFORMATION

7.1. Preparation of Returns. The Company shall, and shall cause each appropriate member of the Company Group to, prepare and submit to Newco, at the Company's expense, (i) no later than 120 days prior to the due date (taking into account any extensions), but in no case earlier than 60 days after the close of the relevant taxable period, for any Affiliated Group consolidated Federal Tax Returns or any state, local or foreign combined or unitary corporate Joint Tax Returns, all information that Newco shall reasonably request, in such form as Newco shall have reasonably requested, to enable Newco to file such Tax Returns and (ii) no later than 120 days prior to the due date (taking into account any extensions), but in no case earlier than 60 days after the close of the relevant taxable period, for any other Tax Return for Pre-Merger Taxable Periods and Straddle Periods which Newco is responsible for filing, all information that Newco shall reasonably request, in such form as Newco shall have reasonably requested, to enable Newco to file such Tax Returns.

7.2. Cooperation and Exchange of Information. Each party hereto, on behalf of itself and its affiliates, agrees to provide the other party hereto with such cooperation and information as such other party shall reasonably request in connection with the preparation or filing of any Tax Return or claim for Tax Refund not inconsistent with this Agreement or in conducting any audit or other proceeding in respect to Taxes or to carry out the provisions of this Agreement. To the extent necessary to carry out the purposes of this Agreement and subject to the other provisions of this Agreement, such cooperation and information shall include without limitation the non-exclusive designation of an officer of Newco as an officer of the Company and Acquiror and each of their affiliates for the purpose of signing Tax Returns, cashing refund checks, pursuing refund claims, dealing with Taxing Authorities and defending audits as well as promptly forwarding copies of appropriate notices and forms or other communications received from or sent to any Taxing Authority which relate to the Company Group for the Tax Indemnification Period and providing copies of all relevant Tax Returns for the Tax Indemnification Period, together with accompanying schedules and related workpapers, documents relating to rulings or other determinations by

Taxing Authorities, including without limitation, foreign Taxing Authorities, and records concerning the ownership and Tax basis of property, which either party may possess. Subject to the rights of the Company Group under the other provisions of this Agreement, such officer shall have the authority to execute powers of attorney (including Form 2848) on behalf of each member of the Company Group with respect to Tax Returns and Taxes for the Tax Indemnification Period. Each party to this Agreement shall make, or shall cause its affiliates to make, their employees and facilities available on a mutually convenient basis to provide an explanation of any documents or information provided hereunder.

7.3. Record Retention. The Company and Newco agree to retain all Tax Returns, related schedules and workpapers, and all material records and other documents as required under Section 6001 of the Code and the regulations promulgated thereunder relating thereto ("Tax Records") existing on the date hereof or created through the Distribution Date, for 10 years from the Distribution Date and (ii) allow the other parties to this Agreement and their Representatives (and Representatives of any of its affiliates), at times and dates reasonably acceptable to the retaining party, to inspect, review and make copies of such records, and have access to such employees, as the Company and Newco may reasonably deem necessary or appropriate from time to time, such activities to be conducted during normal business hours and without disruption to either of its businesses. At the end of the 10-year period described in clause (i), the Company or Newco, as the case may be, shall transfer such records (or cause such records to be transferred) to the other party (at such other party's sole expense), unless such other party notifies the Company or Newco, as the case may be, within 90 days prior to the expiration of the 10-year period, that such other party does not desire to receive such Tax Records, in which case the Company or Newco, as the case may be, may destroy or otherwise dispose of such undesired documents.

7.4. Notification of Certain Dispositions. Acquiror shall give Newco at least 30 days prior written notice in the event that any time prior to October 1, 2002 Rockwell Australia disposes of all or any portion of the ownership interest in, or all or a substantial portion of the assets of, A.C.N. 004 471 078 Pty. Ltd. Such notice shall describe any such disposition in sufficient detail to enable Newco (i) to comply with the requirements of

Section 367 of the Code and applicable regulations thereunder and (ii) to enter into a revised gain recognition agreement under Section 367 of the Code and the applicable regulations if such disposition occurs in a transaction in which no gain or loss is required to be recognized under U.S. income tax principles or gain is recognized solely by reason of Section 357(c) of the Code.

ARTICLE VIII

MISCELLANEOUS

8.1. Entire Agreement. This Tax Allocation Agreement constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof and thereof.

8.2. Modification or Amendment. The parties hereto may modify or amend this Agreement only by written agreement executed and delivered by duly authorized officers of the respective parties. Anything in this Agreement or any other Reorganization Agreement to the contrary notwithstanding, in the event and to the extent that there shall be a conflict between the provisions of this Agreement and any other Reorganization Agreement, the provisions of this Agreement shall control.

8.3. Notices. Any notice, request, instruction or other communication to be given hereunder by any party to any other party shall be in writing and shall be deemed to have been duly given (i) on the date of delivery if delivered personally, or by telecopy or telefacsimile, upon confirmation of receipt, (ii) on the first business day following the date of dispatch if delivered by Federal Express or other nationally reputable next-day courier service, or (iii) on the third business day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or

pursuant to such other instructions as may be designated in writing by the party to receive such notice:

(a) If to Newco:

NEW ROCKWELL INTERNATIONAL CORPORATION
2201 Seal Beach Boulevard
Seal Beach, California 90740-8250
Attention: William J. Calise, Jr., Esq.
Senior Vice President, General Counsel
and Secretary
Telecopy: (310) 797-5687

with copies to:

Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, New York 10112
Attention: Peter R. Kolyer, Esq.
Telecopy: (212) 541-5369

(b) if to Acquiror or the Company:

The Boeing Company
P.O. Box 3707
M/S 13-08
Seattle, Washington 98124-2207 Attention: Theodore J. Collins Vice President & General Counsel Telecopy: (206) 544-4900

with copies to:

Cravath, Swaine & Moore Worldwide Plaza
825 Eighth Avenue
New York, New York 10019 Attention: Allen Finkelson, Esq.

Telecopy: (212) 474-3700

8.4. No Third Party Beneficiaries. Except as otherwise expressly provided herein, nothing contained in this Agreement is intended to confer upon any person or entity other than the parties hereto and their respective successors and permitted assigns, any benefit, right or remedies under or by reason of this Agreement.

8.5. Assignment. No party to this Agreement shall convey, assign or otherwise transfer any of its rights or obligations under this Agreement without the express written consent of the other parties hereto in their sole and absolute discretion. Any such conveyance, assignment or transfer without the express written consent of the other parties shall be void ab initio. No assignment of this Agreement shall relieve the assigning party of its obligations hereunder.

8.6. Term. This Agreement shall commence on the date of execution indicated below and shall continue in effect until otherwise agreed to in writing by Newco and the Company, or their successors.

8.7. Captions. The Article, Section and paragraph captions herein are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof.

8.8. Severability. If any provision of this Agreement or the application thereof to any person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon any such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.

8.9. Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the party or parties who are or are to be thereby aggrieved shall have the right of specific performance and injunctive relief giving effect to its or their rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The parties agree that the remedies at law for any breach or threatened breach, including monetary damages, are inadequate compensation for

any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived.

8.10. Counterparts. For the convenience of the parties, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts shall together constitute the same agreement.

8.11. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to contracts made and to be performed entirely within such State, without regard to the conflicts of law principles of such State.

8.12. Agent. Any consent rights of members of the Newco Group under this Agreement shall be exercised by Newco on behalf of the Newco Group, and any notices given by the Company Group to Newco shall be deemed to be given to each member of the Newco Group. Any consent rights of the Company Group under this Agreement shall be exercised by Acquiror on behalf of the Company Group, and any notices given by Newco to Acquiror shall be deemed to be given to each member of the Company Group.

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties hereto on the date first hereinabove written.

ROCKWELL INTERNATIONAL CORPORATION

By: /s/  WILLIAM J. CALISE, JR.
    ----------------------------------
    Name:  William J. Calise
    Title: Senior Vice President

NEW ROCKWELL INTERNATIONAL CORPORATION

By: /s/ WILLIAM J. CALISE, JR.
    ----------------------------------
    Name:  William J. Calise
    Title: Senior Vice President

THE BOEING COMPANY

By: /s/ PHILIP M. CONDIT
    ----------------------------------
    Name:  Philip M. Condit
    Title: President and Chief
           Executive Officer

Exhibit 10(e)

ROCKWELL INTERNATIONAL CORPORATION
1995 LONG-TERM INCENTIVES PLAN
RESTRICTED STOCK AGREEMENT

To:

In accordance with Section 7 of the 1995 Long-Term Incentives Plan, as amended (the Plan), of Rockwell International Corporation (Rockwell), _______ shares (Restricted Shares) of Common Stock of Rockwell have been granted to you today as restricted stock upon the terms and conditions of this Restricted Stock Agreement, subject in all respects to the provisions of the Plan, as it may be amended. Capitalized terms used in this Agreement and not otherwise defined herein shall have the respective meanings ascribed to them in the Plan.

1. Restricted Period; Earning of Restricted Shares

(a) The Restricted Period applicable to the Restricted Shares shall end on the January 1 immediately following your attainment of age 62 or such later age (not more than age 67) to which the Committee shall from time to time have requested, prior to your attainment of age 62 (or such later age as to which it shall have previously requested), that you remain in service as an Employee.

(b) If (i) you shall continue as an Employee throughout the Restricted Period; or (ii) you shall die or suffer a disability that shall continue for a continuous period of at least six months prior to your attainment of age
62 (or the later age prescribed pursuant to paragraph (a) of this Section);
(iii) you shall retire after December 8, 1997 under a retirement plan of the Corporation at or after attaining age 62 or accumulating 85 points (or fulfilling such other criteria as may be required for an unreduced early retirement benefit) for purposes of the applicable retirement plan; or (iv) a "Change of Control" (as defined for purposes of Article III, Section 13(I)(1) of Rockwell's By-Laws) shall have occurred and the Board of Directors shall not have determined prior thereto that the restrictions on the Restricted Shares should continue notwithstanding the occurrence thereof; then you shall be deemed to have fully earned all the Restricted Shares subject to this Agreement.

(c) If you cease to be an Employee prior to satisfaction of any of the conditions set forth in paragraph (b) of this Section, you shall be deemed not to have earned any of the Restricted Shares and shall have no further rights with respect to the Restricted Shares, or any Dividends (as hereinafter defined) thereon, or any other proceeds thereof.

2. Retention of Certificates for Restricted Shares and Dividends

Certificates for the Restricted Shares and any dividends or distributions thereon or in respect thereof (Dividends), whether in cash or otherwise (including but not limited to additional shares of Common Stock or other securities of Rockwell or securities of another entity, any such shares or other securities being collectively referred to

herein as Stock Dividends), shall be delivered to and held by Rockwell, or shall be registered in book entry form subject to Rockwell's instructions, until you shall have earned the Restricted Shares in accordance with the provisions of Section 1. To facilitate implementation of the provisions of this Agreement, you undertake to sign and deposit with Rockwell's Office of the Secretary (i) a Stock Transfer Power in the form of ATTACHMENT 1 hereto with respect to the Restricted Shares and any Stock Dividends thereon; (ii) a Dividend Order in the form of ATTACHMENT 2 hereto with respect to dividends (whether payable in cash or as Stock Dividends) or other distributions on the Restricted Shares; and (iii) such other documents appropriate to effectuate the purpose and intent of this Restricted Stock Agreement as Rockwell may reasonably request from time to time.

3. Voting Rights

Notwithstanding the retention by Rockwell of certificates (or the right to give instructions with respect to shares held in book entry form) for the Restricted Shares and any Stock Dividends, you shall be entitled to vote the Restricted Shares and any Stock Dividends held by Rockwell (or subject to its instructions) in accordance with Section 2, unless and until such shares have been forfeited in accordance with Section 5.

4. Delivery of Earned Restricted Shares

As promptly as practicable after you shall have been deemed to have earned the Restricted Shares in accordance with Section 1, Rockwell shall deliver to you (or in the event of your death, to your estate or any person who acquires your interest in the Restricted Shares by bequest or inheritance) the Restricted Shares, together with any Dividends then held by Rockwell (or subject to its instructions) and interest on the amount of Dividends paid in cash as provided in Section 7(b) of the Plan.

5. Forfeiture of Unearned Restricted Shares and Dividends

Notwithstanding any other provision of this Agreement, if at any time it shall become impossible for you to earn any of the Restricted Shares in accordance with this Agreement, all the Restricted Shares, together with any Dividends, then being held by Rockwell (or subject to its instructions) in accordance with Section 2 shall be forfeited, and you shall have no further rights of any kind or nature with respect thereto. Upon any such forfeiture, the Restricted Shares, together with any Dividends, shall be transferred to Rockwell.

6. Adjustments

If there shall be any change in or affecting Shares on account of any merger, consolidation, reorganization, recapitalization, reclassification, stock dividend, stock split or combination, or other distribution to holders of Shares (other than a cash dividend), there shall be made or taken such amendments to this Agreement or the Restricted Shares as the Board of Directors may deem appropriate under the circumstances.

7. Transferability

This grant is not transferable by you otherwise than by will or by the laws of descent and distribution, and the Restricted Shares, and any Dividends shall be deliverable, during your lifetime, only to you.

8. Withholding

Rockwell shall have the right, in connection with the delivery of the Restricted Shares and any Dividends (and interest thereon) subject to this Agreement, (i) to deduct from any payment otherwise due by Rockwell to you or any other person receiving delivery of the Restricted Shares and any Dividends (and interest thereon) an amount equal to any taxes required to be withheld by law with respect to such delivery, (ii) to require you or any other person receiving such delivery to pay to it an amount sufficient to provide for any such taxes so required to be withheld or (iii) to sell such number of the Restricted Shares and any Stock Dividends as may be necessary so that the net proceeds of such sale shall be an amount sufficient to provide for any such taxes so required to be withheld.

9. Applicable Law

This Agreement and Rockwell's obligation to deliver Restricted Shares and any Stock Dividends hereunder shall be governed by and construed and enforced in accordance with the laws of Delaware and the Federal law of the United States.

ROCKWELL INTERNATIONAL CORPORATION

Attachment 1 - Stock Transfer Power

Dated: December , 1996

Agreed to this ____ day of December, 1996

Address:

Social Security No.:

ATTACHMENT 1

STOCK TRANSFER POWER SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED, I, ______________, hereby sell, assign and transfer unto Rockwell International Corporation (Rockwell) (i) the _______ shares (the Shares) of the Common Stock of Rockwell standing in my name on the books of Rockwell evidenced by book entry dated December 9, 1996, granted to me on that date as Restricted Shares pursuant to Rockwell's 1995 Long-Term Incentives Plan, as amended, and (ii) any additional shares of Rockwell's Common Stock, other securities issued by Rockwell or securities of another entity (Stock Dividends) distributed, paid or payable on or in respect of the Shares and Stock Dividends during the period the Shares and Stock Dividends are held by Rockwell pursuant to a certain Restricted Stock Agreement dated December 9, 1996, with respect to the Shares; and I do hereby irrevocably constitute and appoint ______________________________, attorney with full power of substitution in the premises to transfer the Shares on the books of Rockwell.

Dated: December ___, 1996

WITNESS:

D I V I D E N D    O R D E R

                         Date:
                               -------------------

Until this order shall be revoked in writing by the undersigned with the written consent of the Secretary or an Assistant Secretary of Rockwell International Corporation, please comply with the following instructions with respect to the payment of all dividends or other distributions on all shares of Common Stock of Rockwell International Corporation:

Account Key:

DIVIDEND CHECKS and all rights, stock dividends, notices and other communications (other than proxy statements and proxies) pertaining to the above account are to be payable to and mailed as follows:

Office of the Secretary, Room 1402 625 Liberty Avenue Pittsburgh, PA 15222

All proxy statements, proxies and related materials pertaining to the above account are to be mailed to the undersigned at the following address:

THIS ORDER MUST BE SIGNED BY ALL REGISTERED OWNERS:

SIGNATURE(S) GUARANTEED:

ROCKWELL INTERNATIONAL CORPORATION

Exhibit 10(f)

ROCKWELL INTERNATIONAL CORPORATION
RESTRICTED STOCK AGREEMENT

To:

In accordance with Sections 6 and 9 of the Directors Stock Plan, as amended, of Rockwell International Corporation (the Corporation) and your election pursuant thereto dated December 5, 1996, _____ shares of Common Stock of the Corporation have been granted to you today as restricted stock in lieu of the retainer fees payable to you on January 2, 1997 in respect of your service on the Board of Directors (the Board) of the Corporation and the Board Committees on which you serve, valued at the closing price on the New York Stock Exchange -- Composite Transactions (Closing Price) on January 2, 1997 and additional such shares shall be granted to you as restricted stock as follows:

(i) On February 5, 1997, ____ shares in respect of your continuing service on the Board of Directors; and

(ii) On April 1, 1997, July 1, 1997, and October 1, 1997, in lieu of the retainer fees otherwise payable to you on those respective dates in respect of your service on the Board and Committees thereof on which you serve, the number of shares whose value (based on the Closing Price on those respective dates) equals the amount of retainer fees then otherwise payable to you.

In this Restricted Stock Agreement, the shares granted today and to be granted on the respective future dates set forth above, are collectively called Restricted Shares.

The Restricted Shares have been or will be granted to you upon the following terms and conditions:

1. Earning of Restricted Shares

(a) If (i) you shall continue as a director of the Corporation until you retire from the Board of Directors (the Board) of the Corporation under the Board's retirement policy; or (ii) you shall resign from the Board or cease to be a director of the Corporation by reason of the antitrust laws, compliance with the Corporation's conflict of interest policies, death or disability, then you shall be deemed to have fully earned all the Restricted Shares subject to this Restricted Stock Agreement.

(b) If you resign from the Board or cease to be a director of the Corporation for any other reason, you shall be deemed not to have earned any of the Restricted Shares and shall have no further rights with respect thereto unless the Board of Directors shall determine, in its sole discretion, that you have resigned from the Board or ceased to be a director by reason of circumstances that the Board determines not to be adverse to the best interests of the Corporation.

2. Retention of Certificates for Restricted Shares

Certificates for the Restricted Shares and any dividends or distributions thereon or in respect thereof that may be paid in additional shares of Common Stock, other securities of the Corporation or securities of another entity (Stock Dividends) shall be delivered to and held by the Corporation, or shall be registered in book entry form subject to the Corporation's instructions, until you shall have earned the Restricted Shares in accordance with the provisions of paragraph 1. To facilitate implementation of the provisions of this Restricted Stock Agreement, you undertake to sign and deposit with the Corporation's Office of the Secretary (a) a Stock Transfer Power in the form of Attachment 1 hereto with respect to the Restricted Shares and any Stock Dividends thereon and (b) such other documents appropriate to effectuate the purpose and intent of this Restricted Stock Agreement as the Corporation may reasonably request from time to time.

3. Dividends and Voting Rights

Notwithstanding the retention by the Corporation of certificates (or the right to give instructions with respect to shares held in book entry form) for the Restricted Shares and any Stock Dividends, you shall be entitled to receive any dividends that may be paid in cash on, and to vote, the Restricted Shares and any Stock Dividends held by the Corporation (or subject to its instructions) in accordance with paragraph 2, unless and until such shares have been forfeited in accordance with paragraph 5.

4. Delivery of Earned Restricted Shares

As promptly as practicable after you shall have been deemed to have earned the Restricted Shares in accordance with paragraph 1, the Corporation shall deliver to you (or in the event of your death, to your estate or any person who acquires your interest in the Restricted Shares by bequest or inheritance) the Restricted Shares, together with any Stock Dividends then held by the Corporation (or subject to its instructions).

5. Forfeiture of Unearned Restricted Shares

Notwithstanding any other provision of this Restricted Stock Agreement, if at any time it shall become impossible for you to earn any of the Restricted Shares in accordance with this Restricted Stock Agreement, all the Restricted Shares, together with any Stock Dividends, then being held by the Corporation (or subject to its instructions) in accordance with paragraph 2 shall be forfeited, and you shall have no further rights of any kind or nature with respect thereto. Upon any such forfeiture, the Restricted Shares, together with any Stock Dividends, shall be transferred to Rockwell.

6. Transferability

This grant is not transferable by you otherwise than by will or by the laws of descent and distribution, and the Restricted Shares and any Stock Dividends shall be deliverable, during your lifetime, only to you.

7. Investment Intent

By your acceptance of this Restricted Stock Agreement, you confirm that you are acquiring the Restricted Shares for investment and not with a view to their resale in a distribution within the meaning of the Securities Act of 1933.

8. Withholding

The Corporation shall have the right, in connection with the delivery of the Restricted Shares and any Stock Dividends subject to this Restricted Stock Agreement, (i) to deduct from any payment otherwise due by the Corporation to you or any other person receiving delivery of the Restricted Shares and any Stock Dividends an amount equal to any taxes required to be withheld by law with respect to such delivery, (ii) to require you or any other person receiving such delivery to pay to it an amount sufficient to provide for any such taxes so required to be withheld or (iii) to sell such number of the Restricted Shares and any Stock Dividends as may be necessary so that the net proceeds of such sale shall be an amount sufficient to provide for any such taxes so required to be withheld.

9. Applicable Law

This Restricted Stock Agreement and the Corporation's obligation to deliver Restricted Shares and any Stock Dividends hereunder shall be governed by and construed and enforced in accordance with the laws of Delaware and the Federal law of the United States.

ROCKWELL INTERNATIONAL CORPORATION

By:_______________________________________
W. J. Calise, Jr.
Senior Vice President, General Counsel
and Secretary

Attachment 1 - Stock Transfer Power

Dated: January 2, 1997

Agreed to as of the 2nd day of January, 1997

Address:

Social Security No.:

Attachment 1

STOCK TRANSFER POWER SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED, I, ________________________ hereby sell, assign and transfer unto Rockwell International Corporation (i) the ____ shares (the Granted Shares) of the Common Stock of Rockwell International Corporation (the Corporation) standing in my name on the books of the Corporation evidenced by book entry dated January 2, 1997, granted to me on that date as Restricted Shares pursuant to the Corporation's Directors Stock Plan, as amended; (ii) the additional shares (together with the Granted Shares, the Shares) of the Common Stock of the Corporation to be granted to me on February 5, 1997, April 1, 1997, July 1, 1997 and October 1, 1997 as Restricted Shares pursuant to the Corporation's Directors Stock Plan, as amended, and to be registered in my name on the books of the Corporation and evidenced by book entries dated those respective dates; and (iii) any additional shares of the Corporation's Common Stock, other securities issued by the Corporation or securities of another entity (Stock Dividends) distributed, paid or payable on or in respect of the Shares and Stock Dividends during the period the Shares and Stock Dividends are held by the Corporation pursuant to a certain Restricted Stock Agreement dated January 2, 1997, with respect to the Shares; and I do hereby irrevocably constitute and appoint ______________________________, attorney with full power of substitution in the premises to transfer the Shares on the books of the Corporation.

Dated: January __, 1997

WITNESS:

ROCKWELL INTERNATIONAL CORPORATION
RESTRICTED STOCK AGREEMENT

To:

In accordance with Section 6 of the Directors Stock Plan, as amended, of Rockwell International Corporation (the Corporation) and your election pursuant thereto dated December 5, 1996, ____ shares (Restricted Shares) of Common Stock of the Corporation have been granted to you today as restricted stock in respect of your continuing service as a director of the Corporation.

These Restricted Shares have been granted to you today upon the following terms and conditions:

1. Earning of Restricted Shares

(a) If (i) you shall continue as a director of the Corporation until you retire from the Board of Directors (the Board) of the Corporation under the Board's retirement policy; or (ii) you shall resign from the Board or cease to be a director of the Corporation by reason of the antitrust laws, compliance with the Corporation's conflict of interest policies, death or disability, then you shall be deemed to have fully earned all the Restricted Shares subject to this Restricted Stock Agreement.

(b) If you resign from the Board or cease to be a director of the Corporation for any other reason, you shall be deemed not to have earned any of the Restricted Shares and shall have no further rights with respect thereto unless the Board of Directors shall determine, in its sole discretion, that you have resigned from the Board or ceased to be a director by reason of circumstances that the Board determines not to be adverse to the best interests of the Corporation.

2. Retention of Certificates for Restricted Shares

Certificates for the Restricted Shares and any dividends or distributions thereon or in respect thereof that may be paid in additional shares of Common Stock, other securities of the Corporation or securities of another entity (Stock Dividends) shall be delivered to and held by the Corporation, or shall be registered in book entry form subject to the Corporation's instructions, until you shall have earned the Restricted Shares in accordance with the provisions of paragraph 1. To facilitate implementation of the provisions of this Restricted Stock Agreement, you undertake to sign and deposit with the Corporation's Office of the Secretary (a) a Stock Transfer Power in the form of Attachment 1 hereto with respect to the Restricted Shares and any Stock Dividends thereon and (b) such other documents appropriate to effectuate the purpose and intent of this Restricted Stock Agreement as the Corporation may reasonably request from time to time.

3. Dividends and Voting Rights

Notwithstanding the retention by the Corporation of certificates (or the right to give instructions with respect to shares held in book entry form) for the Restricted Shares and any Stock Dividends, you shall be entitled to receive any dividends that may be paid in cash on, and to vote, the Restricted Shares and any Stock Dividends held by the Corporation (or subject to its instructions) in accordance with paragraph 2, unless and until such shares have been forfeited in accordance with paragraph 5.

4. Delivery of Earned Restricted Shares

As promptly as practicable after you shall have been deemed to have earned the Restricted Shares in accordance with paragraph 1, the Corporation shall deliver to you (or in the event of your death, to your estate or any person who acquires your interest in the Restricted Shares by bequest or inheritance) the Restricted Shares, together with any Stock Dividends then held by the Corporation (or subject to its instructions).

5. Forfeiture of Unearned Restricted Shares

Notwithstanding any other provision of this Restricted Stock Agreement, if at any time it shall become impossible for you to earn any of the Restricted Shares in accordance with this Restricted Stock Agreement, all the Restricted Shares, together with any Stock Dividends, then being held by the Corporation (or subject to its instructions) in accordance with paragraph 2 shall be forfeited, and you shall have no further rights of any kind or nature with respect thereto. Upon any such forfeiture, the Restricted Shares, together with any Stock Dividends, shall be transferred to Rockwell.

6. Transferability

This grant is not transferable by you otherwise than by will or by the laws of descent and distribution, and the Restricted Shares and any Stock Dividends shall be deliverable, during your lifetime, only to you.

7. Investment Intent

By your acceptance of this Restricted Stock Agreement, you confirm that you are acquiring the Restricted Shares for investment and not with a view to their resale in a distribution within the meaning of the Securities Act of 1933.

8. Withholding

The Corporation shall have the right, in connection with the delivery of the Restricted Shares and any Stock Dividends subject to this Restricted Stock Agreement, (i) to deduct from any payment otherwise due by the Corporation to you or any other person receiving delivery of the Restricted Shares and any Stock Dividends an amount equal to any taxes required to be withheld by

law with respect to such delivery, (ii) to require you or any other person receiving such delivery to pay to it an amount sufficient to provide for any such taxes so required to be withheld or (iii) to sell such number of the Restricted Shares and any Stock Dividends as may be necessary so that the net proceeds of such sale shall be an amount sufficient to provide for any such taxes so required to be withheld.

9. Applicable Law

This Restricted Stock Agreement and the Corporation's obligation to deliver Restricted Shares and any Stock Dividends hereunder shall be governed by and construed and enforced in accordance with the laws of Delaware and the Federal law of the United States.

ROCKWELL INTERNATIONAL CORPORATION

By:_______________________________________
W. J. Calise, Jr.
Senior Vice President, General Counsel
and Secretary

Attachment 1 - Stock Transfer Power

Dated: February 5, 1997

Agreed to this 5th day of February, 1997

Address:

Social Security No.:

Attachment 1

STOCK TRANSFER POWER SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED, I _____________________, hereby sell, assign and transfer unto Rockwell International Corporation (i) the ____ shares (the Shares) of the Common Stock of Rockwell International Corporation (the Corporation) standing in my name on the books of the Corporation evidenced by book entry dated February 5, 1997, granted to me on that date as Restricted Shares pursuant to the Corporation's Directors Stock Plan, as amended, and (ii) any additional shares of the Corporation's Common Stock, other securities issued by the Corporation or securities of another entity (Stock Dividends) distributed, paid or payable on or in respect of the Shares and Stock Dividends during the period the Shares and Stock Dividends are held by the Corporation pursuant to a certain Restricted Stock Agreement dated February 5, 1997, with respect to the Shares; and I do hereby irrevocably constitute and appoint ______________________________, attorney with full power of substitution in the premises to transfer the Shares on the books of the Corporation.

Dated: February 5, 1997

WITNESS: