|
Delaware
|
52-2314475
|
(State
or other jurisdiction
|
(I.R.S.
Employer
|
of
incorporation or organization)
|
Identification
No.)
|
400
Collins Road NE
|
|
Cedar
Rapids, Iowa
|
52498
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Large
accelerated filer
þ
|
Accelerated filer
¨
|
Non-accelerated
filer
¨
(Do not check if a smaller
reporting company)
|
Smaller reporting company
¨
|
Page No.
|
|||
PART
I.
|
FINANCIAL
INFORMATION:
|
||
Item
1.
|
Condensed
Consolidated Financial Statements:
|
||
Condensed
Consolidated Statement of Financial Position (Unaudited) — December 31,
2010 and September 30, 2010
|
2
|
||
Condensed
Consolidated Statement of Operations (Unaudited) — Three Months Ended
December 31, 2010 and 2009
|
3
|
||
Condensed
Consolidated Statement of Cash Flows (Unaudited) — Three Months Ended
December 31, 2010 and 2009
|
4
|
||
Notes
to Condensed Consolidated Financial Statements (Unaudited)
|
5
|
||
Item
2.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
20
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
29
|
|
Item
4.
|
Controls
and Procedures
|
30
|
|
PART
II.
|
OTHER
INFORMATION:
|
||
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
31
|
|
Item
6.
|
Exhibits
|
32
|
|
Signatures
|
33
|
PART
I.
|
FINANCIAL
INFORMATION
|
Item
1.
|
Condensed
Consolidated Financial Statements
|
December 31,
|
September 30,
|
|||||||
2010
|
2010
|
|||||||
ASSETS
|
||||||||
Current
Assets:
|
||||||||
Cash
and cash equivalents
|
$ | 263 | $ | 435 | ||||
Receivables,
net
|
959 | 1,024 | ||||||
Inventories,
net
|
1,093 | 1,004 | ||||||
Current
deferred income taxes
|
127 | 129 | ||||||
Other
current assets
|
104 | 97 | ||||||
Total
current assets
|
2,546 | 2,689 | ||||||
Property
|
703 | 707 | ||||||
Goodwill
|
767 | 766 | ||||||
Intangible
Assets
|
318 | 306 | ||||||
Long-term
Deferred Income Taxes
|
374 | 389 | ||||||
Other
Assets
|
196 | 207 | ||||||
TOTAL
ASSETS
|
$ | 4,904 | $ | 5,064 | ||||
LIABILITIES
AND EQUITY
|
||||||||
Current
Liabilities:
|
||||||||
Short-term
debt
|
$ | 12 | $ | 24 | ||||
Accounts
payable
|
371 | 420 | ||||||
Compensation
and benefits
|
195 | 259 | ||||||
Advance
payments from customers
|
316 | 324 | ||||||
Product
warranty costs
|
178 | 183 | ||||||
Other
current liabilities
|
244 | 242 | ||||||
Total
current liabilities
|
1,316 | 1,452 | ||||||
Long-term
Debt, Net
|
512 | 525 | ||||||
Retirement
Benefits
|
1,403 | 1,420 | ||||||
Other
Liabilities
|
194 | 181 | ||||||
Equity:
|
||||||||
Common
stock ($0.01 par value; shares authorized: 1,000; shares issued:
183.8)
|
2 | 2 | ||||||
Additional
paid-in capital
|
1,415 | 1,420 | ||||||
Retained
earnings
|
2,930 | 2,816 | ||||||
Accumulated
other comprehensive loss
|
(1,256 | ) | (1,259 | ) | ||||
Common
stock in treasury, at cost (shares held: December 31, 2010, 29.1;
September 30, 2010, 27.0)
|
(1,615 | ) | (1,497 | ) | ||||
Total
shareowners’ equity
|
1,476 | 1,482 | ||||||
Noncontrolling
interest
|
3 | 4 | ||||||
Total
equity
|
1,479 | 1,486 | ||||||
TOTAL
LIABILITIES AND EQUITY
|
$ | 4,904 | $ | 5,064 |
Three Months Ended
|
||||||||
December 31
|
||||||||
2010
|
2009
|
|||||||
Sales:
|
||||||||
Product
sales
|
$ | 974 | $ | 906 | ||||
Service
sales
|
136 | 121 | ||||||
Total
sales
|
1,110 | 1,027 | ||||||
Costs,
expenses and other:
|
||||||||
Product
cost of sales
|
706 | 653 | ||||||
Service
cost of sales
|
89 | 81 | ||||||
Selling,
general and administrative expenses
|
124 | 109 | ||||||
Interest
expense
|
5 | 6 | ||||||
Other
income, net
|
(7 | ) | (3 | ) | ||||
Total
costs, expenses and other
|
917 | 846 | ||||||
Income
before income taxes
|
193 | 181 | ||||||
Income
tax expense
|
42 | 60 | ||||||
Net
income
|
$ | 151 | $ | 121 | ||||
Earnings
per share:
|
||||||||
Basic
|
$ | 0.97 | $ | 0.77 | ||||
Diluted
|
$ | 0.96 | $ | 0.76 | ||||
Weighted
average common shares:
|
||||||||
Basic
|
155.6 | 157.1 | ||||||
Diluted
|
157.5 | 159.2 | ||||||
Cash
dividends per share
|
$ | 0.24 | $ | 0.24 |
Three Months Ended
|
||||||||
December 31
|
||||||||
2010
|
2009
|
|||||||
Operating
Activities:
|
||||||||
Net
income
|
$ | 151 | $ | 121 | ||||
Adjustments
to arrive at cash provided by operating activities:
|
||||||||
Depreciation
|
26 | 27 | ||||||
Amortization
of intangible assets
|
8 | 9 | ||||||
Stock-based
compensation expense
|
5 | 5 | ||||||
Compensation
and benefits paid in common stock
|
17 | 17 | ||||||
Excess
tax benefit from stock-based compensation
|
0 | (2 | ) | |||||
Deferred
income taxes
|
15 | 5 | ||||||
Pension
plan contributions
|
(3 | ) | (101 | ) | ||||
Changes
in assets and liabilities, excluding effects of acquisitions and foreign
currency adjustments:
|
||||||||
Receivables
|
63 | 118 | ||||||
Inventories
|
(101 | ) | (87 | ) | ||||
Accounts
payable
|
(38 | ) | (31 | ) | ||||
Compensation
and benefits
|
(63 | ) | (13 | ) | ||||
Advance
payments from customers
|
(8 | ) | (7 | ) | ||||
Product
warranty costs
|
(5 | ) | (7 | ) | ||||
Income
taxes
|
23 | 50 | ||||||
Other
assets and liabilities
|
(33 | ) | (20 | ) | ||||
Cash
Provided by Operating Activities
|
57 | 84 | ||||||
Investing
Activities:
|
||||||||
Property
additions
|
(32 | ) | (26 | ) | ||||
Acquisition
of businesses, net of cash acquired
|
(7 | ) | (92 | ) | ||||
Other
investing activities
|
2 | (1 | ) | |||||
Cash
Used for Investing Activities
|
(37 | ) | (119 | ) | ||||
Financing
Activities:
|
||||||||
Purchases
of treasury stock
|
(149 | ) | (28 | ) | ||||
Cash
dividends
|
(38 | ) | (38 | ) | ||||
(Decrease)
increase in short-term borrowings
|
(10 | ) | 62 | |||||
Proceeds
from the exercise of stock options
|
4 | 7 | ||||||
Excess
tax benefit from stock-based compensation
|
0 | 2 | ||||||
Cash
(Used for) Provided by Financing Activities
|
(193 | ) | 5 | |||||
Effect
of exchange rate changes on cash and cash equivalents
|
1 | 1 | ||||||
Net
Change in Cash and Cash Equivalents
|
(172 | ) | (29 | ) | ||||
Cash
and Cash Equivalents at Beginning of Period
|
435 | 235 | ||||||
Cash
and Cash Equivalents at End of Period
|
$ | 263 | $ | 206 |
1.
|
Business
Description and Basis of
Presentation
|
2.
|
Recently
Issued and Adopted Accounting
Standards
|
3.
|
Acquisitions
|
4.
|
Receivables,
Net
|
December 31,
|
September 30,
|
|||||||
(in
millions)
|
2010
|
2010
|
||||||
Billed
|
$ | 633 | $ | 743 | ||||
Unbilled
|
381 | 339 | ||||||
Less
progress payments
|
(45 | ) | (48 | ) | ||||
Total
|
969 | 1,034 | ||||||
Less
allowance for doubtful accounts
|
(10 | ) | (10 | ) | ||||
Receivables,
net
|
$ | 959 | $ | 1,024 |
5.
|
Inventories,
Net
|
December 31,
|
September 30,
|
|||||||
(in
millions)
|
2010
|
2010
|
||||||
Finished
goods
|
$ | 169 | $ | 162 | ||||
Work
in process
|
278 | 242 | ||||||
Raw
materials, parts and supplies
|
342 | 336 | ||||||
Less
progress payments
|
(49 | ) | (56 | ) | ||||
Total
|
740 | 684 | ||||||
Pre-production
engineering costs
|
353 | 320 | ||||||
Inventories,
net
|
$ | 1,093 | $ | 1,004 |
6.
|
Property
|
December 31,
|
September 30,
|
|||||||
(in
millions)
|
2010
|
2010
|
||||||
Land
|
$ | 14 | $ | 14 | ||||
Buildings
and improvements
|
364 | 362 | ||||||
Machinery
and equipment
|
965 | 959 | ||||||
Information
systems software and hardware
|
284 | 282 | ||||||
Furniture
and fixtures
|
63 | 63 | ||||||
Construction
in progress
|
72 | 64 | ||||||
Total
|
1,762 | 1,744 | ||||||
Less
accumulated depreciation
|
(1,059 | ) | (1,037 | ) | ||||
Property
|
$ | 703 | $ | 707 |
7.
|
Goodwill
and Intangible Assets
|
Government
|
Commercial
|
|||||||||||
(in millions)
|
Systems
|
Systems
|
Total
|
|||||||||
Balance
at September 30, 2010
|
$ | 509 | $ | 257 | $ | 766 | ||||||
Blue
Ridge Simulation acquisition
|
3 | 0 | 3 | |||||||||
Foreign
currency translation adjustments
|
(2 | ) | 0 | (2 | ) | |||||||
Balance
at December 31, 2010
|
$ | 510 | $ | 257 | $ | 767 |
December
31,
2010
|
September
30,
2010
|
|||||||||||||||||||||||
Accum
|
Accum
|
|||||||||||||||||||||||
(in millions)
|
Gross
|
Amort
|
Net
|
Gross
|
Amort
|
Net
|
||||||||||||||||||
Intangible
assets with finite lives:
|
||||||||||||||||||||||||
Developed
technology and patents
|
$ | 216 | $ | (127 | ) | $ | 89 | $ | 214 | $ | (123 | ) | $ | 91 | ||||||||||
Customer
relationships:
|
||||||||||||||||||||||||
Acquired
|
90 | (42 | ) | 48 | 90 | (40 | ) | 50 | ||||||||||||||||
Up-front
sales incentives
|
170 | (11 | ) | 159 | 153 | (11 | ) | 142 | ||||||||||||||||
License
agreements
|
23 | (6 | ) | 17 | 22 | (6 | ) | 16 | ||||||||||||||||
Trademarks
and tradenames
|
15 | (12 | ) | 3 | 15 | (10 | ) | 5 | ||||||||||||||||
Intangible
assets with indefinite lives:
|
||||||||||||||||||||||||
Trademarks
and tradenames
|
2 | 0 | 2 | 2 | 0 | 2 | ||||||||||||||||||
Intangible
assets
|
$ | 516 | $ | (198 | ) | $ | 318 | $ | 496 | $ | (190 | ) | $ | 306 |
8.
|
Other
Assets
|
December 31,
|
September 30,
|
|||||||
(in
millions)
|
2010
|
2010
|
||||||
Long-term
receivables
|
$ | 28 | $ | 27 | ||||
Investments
in equity affiliates
|
9 | 10 | ||||||
Exchange
and rental assets (net of accumulated depreciation of $108 at December 31,
2010 and $106 at September 30, 2010)
|
50 | 51 | ||||||
Assets
held-for-sale
|
14 | 14 | ||||||
Other
|
95 | 105 | ||||||
Other
assets
|
$ | 196 | $ | 207 |
9.
|
Other
Current Liabilities
|
December 31,
|
September 30,
|
|||||||
(in
millions)
|
2010
|
2010
|
||||||
Customer
incentives
|
$ | 123 | $ | 132 | ||||
Contract
reserves
|
17 | 19 | ||||||
Income
taxes payable
|
21 | 8 | ||||||
Other
|
83 | 83 | ||||||
Other
current liabilities
|
$ | 244 | $ | 242 |
10.
|
Debt
|
December
31,
|
September
30,
|
|||||||
(in
millions)
|
2010
|
2010
|
||||||
Principal
amount of 2019 Notes, net of discount
|
$ | 299 | $ | 299 | ||||
Principal
amount of 2013 Notes
|
200 | 200 | ||||||
Principal
amount of variable rate loan due June 2011
|
12 | 24 | ||||||
Fair
value swap adjustment (Notes 16 and 17)
|
13 | 26 | ||||||
Total
|
524 | 549 | ||||||
Less
current portion
|
(12 | ) | (24 | ) | ||||
Long-term
debt, net
|
$ | 512 | $ | 525 |
Three
Months Ended
|
||||||||
December 31
|
||||||||
(in
millions)
|
2010
|
2009
|
||||||
Service
cost
|
$ | 2 | $ | 2 | ||||
Interest
cost
|
40 | 40 | ||||||
Expected
return on plan assets
|
(53 | ) | (53 | ) | ||||
Amortization:
|
||||||||
Prior
service cost
|
(5 | ) | (5 | ) | ||||
Net
actuarial loss
|
12 | 23 | ||||||
Net
benefit expense (income)
|
$ | (4 | ) | $ | 7 |
Three
Months Ended
|
||||||||
December 31
|
||||||||
(in
millions)
|
2010
|
2009
|
||||||
Service
cost
|
$ | 1 | $ | 1 | ||||
Interest
cost
|
3 | 3 | ||||||
Amortization:
|
||||||||
Prior
service cost
|
(4 | ) | (6 | ) | ||||
Net
actuarial loss
|
3 | 3 | ||||||
Net
benefit expense
|
$ | 3 | $ | 1 |
Three
Months Ended
|
||||||||
December 31
|
||||||||
(in
millions)
|
2010
|
2009
|
||||||
Stock-based
compensation expense included in:
|
||||||||
Product
cost of sales
|
$ | 1 | $ | 1 | ||||
Selling,
general and administrative expenses
|
4 | 4 | ||||||
Total
|
$ | 5 | $ | 5 | ||||
Income
tax benefit
|
$ | 2 | $ | 2 |
Performance
|
Restricted
|
Restricted
|
||||||||||||||||||||||||||||||
Options
|
Shares
|
Stock
|
Stock
Units
|
|||||||||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
Weighted
|
|||||||||||||||||||||||||||||
(shares
in thousands)
|
Number
|
Average
|
Number
|
Average
|
Number
|
Average
|
Number
|
Average
|
||||||||||||||||||||||||
Issued
|
Fair
Value
|
Issued
|
Fair
Value
|
Issued
|
Fair
Value
|
Issued
|
Fair
Value
|
|||||||||||||||||||||||||
Three
months ended
December
31, 2010
|
728.1 | $ | 14.71 | 191.9 | $ | 55.75 | 0 | $ | 0 | 60.0 | $ | 55.83 | ||||||||||||||||||||
Three
months ended
December
31, 2009
|
790.9 | $ | 12.80 | 190.3 | $ | 53.08 | 56.6 | $ | 53.08 | 6.8 | $ | 51.90 |
2011
|
2010
|
|||||||
Grants
|
Grants
|
|||||||
Risk-free
interest rate
|
0.5% - 3.1 | % | 2.7 | % | ||||
Expected
dividend yield
|
1.7 | % | 2.3 | % | ||||
Expected
volatility
|
27.0 | % | 27.0 |
%
|
||||
Expected
life
|
8
years
|
7
years
|
Three
Months Ended
|
||||||||
December 31
|
||||||||
(in
millions, except per share amounts)
|
2010
|
2009
|
||||||
Numerator:
|
||||||||
Numerator
for basic and diluted earnings per share –
Net
income
|
$ | 151 | $ | 121 | ||||
Denominator:
|
||||||||
Denominator
for basic earnings per share –
weighted
average common shares
|
155.6 | 157.1 | ||||||
Effect
of dilutive securities:
|
||||||||
Stock
options
|
1.5 | 1.7 | ||||||
Performance
shares, restricted shares and restricted stock units
|
0.4 | 0.4 | ||||||
Dilutive
potential common shares
|
1.9 | 2.1 | ||||||
Denominator
for diluted earnings per share –
adjusted
weighted average shares and assumed conversion
|
157.5 | 159.2 | ||||||
Earnings
per share:
|
||||||||
Basic
|
$ | 0.97 | $ | 0.77 | ||||
Diluted
|
$ | 0.96 | $ | 0.76 |
Three
Months Ended
|
||||||||
December 31
|
||||||||
(in
millions)
|
2010
|
2009
|
||||||
Net
income
|
$ | 151 | $ | 121 | ||||
Unrealized
foreign currency translation adjustment
|
(3 | ) | (4 | ) | ||||
Foreign
currency cash flow hedge adjustment
|
2 | 0 | ||||||
Amortization
of defined benefit plan costs
|
4 | 9 | ||||||
Comprehensive
income
|
$ | 154 | $ | 126 |
Three
Months Ended
|
||||||||
December 31
|
||||||||
(in
millions)
|
2010
|
2009
|
||||||
Royalty
income
|
$ | 0 | $ | 2 | ||||
Earnings
from equity affiliates
|
2 | 2 | ||||||
Interest
income
|
1 | 1 | ||||||
Other,
net
|
4 | (2 | ) | |||||
Other
income, net
|
$ | 7 | $ | 3 |
|
Level
1 -
|
quoted
prices (unadjusted) in active markets for identical assets or
liabilities
|
|
Level
2 -
|
quoted
prices for similar assets and liabilities in active markets or inputs that
are observable for the asset or liability, either directly or indirectly
through market corroboration, for substantially the full term of the
financial instrument
|
|
Level
3 -
|
unobservable
inputs based on the Company’s own assumptions used to measure assets and
liabilities at fair value
|
December
31, 2010
|
September
30, 2010
|
|||||||||
Fair
Value
|
Fair
Value
|
Fair
Value
|
||||||||
(in
millions)
|
Hierarchy
|
Asset
(Liability)
|
Asset
(Liability)
|
|||||||
Deferred
compensation plan investments
|
Level
1
|
$ | 41 | $ | 37 | |||||
Interest
rate swap assets
|
Level
2
|
13 | 26 | |||||||
Foreign
currency forward exchange contract assets
|
Level
2
|
7 | 9 | |||||||
Foreign
currency forward exchange contract liabilities
|
Level
2
|
(4 | ) | (8 | ) |
Asset (Liability)
|
||||||||||||||||
December 31, 2010
|
September 30, 2010
|
|||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
(in
millions)
|
Amount
|
Value
|
Amount
|
Value
|
||||||||||||
Cash
and cash equivalents
|
$ | 263 | $ | 263 | $ | 435 | $ | 435 | ||||||||
Short-term
investments
|
20 | 20 | 20 | 20 | ||||||||||||
Short-term
debt
|
12 | 12 | (24 | ) | (24 | ) | ||||||||||
Long-term
debt
|
(499 | ) | (531 | ) | (499 | ) | (558 | ) |
Asset
Derivatives
|
||||||||||
December
31,
|
September
30,
|
|||||||||
(in
millions)
|
Classification
|
2010
|
2010
|
|||||||
Foreign
currency forward exchange contracts
|
Other
current assets
|
$ | 7 | $ | 9 | |||||
Interest
rate swaps
|
Other
assets
|
13 | 26 | |||||||
Total
|
$ | 20 | $ | 35 |
Liability
Derivatives
|
||||||||||
December
31,
|
September
30,
|
|||||||||
(in
millions)
|
Classification
|
2010
|
2010
|
|||||||
Foreign
currency forward exchange contracts
|
Other
current liabilities
|
$
|
4
|
$
|
8
|
Amount
of Gain (Loss)
|
||||||||||
Three
Months Ended
|
||||||||||
(in
millions)
|
Location
of
|
December
31
|
||||||||
Gain
(Loss)
|
2010
|
2009
|
||||||||
Derivatives
Designated as Hedging Instruments:
|
||||||||||
Fair
Value Hedges
|
||||||||||
Foreign
currency forward exchange contracts
|
Cost
of sales
|
$ | 0 | $ | (2 | ) | ||||
Interest
rate swaps
|
Interest
expense
|
2 | 1 | |||||||
Cash
Flow Hedges
|
||||||||||
Foreign
currency forward exchange contracts:
|
||||||||||
Amount
of gain recognized in AOCL (effective portion, before deferred tax
impact)
|
AOCL
|
$ | 2 | $ | 3 | |||||
Amount
of gain (loss) reclassified from AOCL into income
|
Cost
of sales
|
(1 | ) | 3 |
Three
Months Ended
|
||||||||
December 31
|
||||||||
(in
millions)
|
2010
|
2009
|
||||||
Balance
at beginning of year
|
$ | 183 | $ | 217 | ||||
Warranty
costs incurred
|
(12 | ) | (14 | ) | ||||
Product
warranty accrual
|
11 | 7 | ||||||
Pre-existing
warranty adjustments
|
(4 | ) | 0 | |||||
Balance
at December 31
|
$ | 178 | $ | 210 |
Three
Months Ended
|
||||||||
December 31
|
||||||||
(in
millions)
|
2010
|
2009
|
||||||
Sales:
|
||||||||
Government
Systems
|
$ | 650 | $ | 616 | ||||
Commercial
Systems
|
460 | 411 | ||||||
Total
sales
|
$ | 1,110 | $ | 1,027 | ||||
Segment
operating earnings:
|
||||||||
Government
Systems
|
$ | 131 | $ | 134 | ||||
Commercial
Systems
|
84 | 68 | ||||||
Total
segment operating earnings
|
215 | 202 | ||||||
Interest
expense
|
(5 | ) | (6 | ) | ||||
Stock-based
compensation
|
(5 | ) | (5 | ) | ||||
General
corporate, net
|
(12 | ) | (11 | ) | ||||
Restructuring
adjustment
|
0 | 1 | ||||||
Income
before income taxes
|
193 | 181 | ||||||
Income
tax provision
|
(42 | ) | (60 | ) | ||||
Net
income
|
$ | 151 | $ | 121 |
Three
Months Ended
|
||||||||
December 31
|
||||||||
(in
millions)
|
2010
|
2009
|
||||||
Government
Systems product categories:
|
||||||||
Airborne
solutions
|
$ | 438 | $ | 410 | ||||
Surface
solutions
|
212 | 206 | ||||||
Government
Systems sales
|
$ | 650 | $ | 616 | ||||
Commercial
Systems product categories:
|
||||||||
Air
transport aviation electronics
|
$ | 250 | $ | 241 | ||||
Business
and regional aviation electronics
|
210 | 170 | ||||||
Commercial
Systems sales
|
$ | 460 | $ | 411 |
Three
Months Ended
|
||||||||
December 31
|
||||||||
(dollars
in millions)
|
2010
|
2009
|
||||||
Total
sales
|
$ | 1,110 | $ | 1,027 | ||||
Percent
increase
|
8 | % |
Three
Months Ended
|
||||||||
December 31
|
||||||||
(dollars
in millions)
|
2010
|
2009
|
||||||
Total
cost of sales
|
$ | 795 | $ | 734 | ||||
Percent
of total sales
|
71.6 | % | 71.5 | % |
|
·
|
A
$48 million increase associated with the $72 million of organic sales
growth in Government Systems and Commercial Systems. See the Government
Systems and Commercial Systems Financial Results sections below for
further discussion.
|
|
·
|
A
$15 million increase attributable to higher employee incentive
compensation expenses. Employee incentive compensation expense included
within cost of sales was $22 million and $7 million for the three months
ended December 31, 2010 and 2009,
respectively.
|
|
·
|
Incremental
cost of sales from the Air Routing acquisition of $6
million.
|
|
·
|
The
above items are partially offset by an $8 million reduction to cost of
sales attributable to lower defined benefit pension expense. As discussed
in the Retirement Plans section below, the reduction in pension expense
was primarily due to a change in the period of time over which actuarial
gains and losses are amortized. For the three months ended December 31,
2010, pension income reduced cost of sales by $4 million, compared to $4
million of pension expense during the same period last
year.
|
Three
Months Ended
|
||||||||
December 31
|
||||||||
(dollars
in millions)
|
2010
|
2009
|
||||||
Customer-funded:
|
||||||||
Government
Systems
|
$ | 109 | $ | 96 | ||||
Commercial
Systems
|
20 | 19 | ||||||
Total
customer-funded
|
129 | 115 | ||||||
Company-funded:
|
||||||||
Government
Systems
|
21 | 22 | ||||||
Commercial
Systems
|
58 | 58 | ||||||
Total
company-funded
|
79 | 80 | ||||||
Total
research and development expense
|
$ | 208 | $ | 195 | ||||
Percent
of total sales
|
18.7 | % | 19.0 | % |
Three
Months Ended
|
||||||||
December 31
|
||||||||
(dollars
in millions)
|
2010
|
2009
|
||||||
Selling,
general and administrative expenses
|
$ | 124 | $ | 109 | ||||
Percent
of total sales
|
11.2 | % | 10.6 | % |
|
·
|
$4
million of higher employee incentive compensation
costs.
|
|
·
|
$3
million of incremental SG&A expenses from the Air Routing acquisition
within Commercial Systems.
|
|
·
|
$3
million increase from bid and proposal costs associated with new pursuits
and other selling activities.
|
Three
Months Ended
|
||||||||
December 31
|
||||||||
(dollars
in millions, except per share amounts)
|
2010
|
2009
|
||||||
Net
income
|
$ | 151 | $ | 121 | ||||
Net
income as a percent of sales
|
13.6 | % | 11.8 | % | ||||
Diluted
earnings per share
|
$ | 0.96 | $ | 0.76 |
Three
Months Ended
|
||||||||
December 31
|
||||||||
(dollars
in millions)
|
2010
|
2009
|
||||||
Airborne
solutions
|
$ | 438 | $ | 410 | ||||
Surface
solutions
|
212 | 206 | ||||||
Total
|
$ | 650 | $ | 616 | ||||
Percent
increase
|
6 | % |
|
·
|
A
$22 million increase from rotary wing avionics sales on various
platforms.
|
|
·
|
A
$10 million increase comprised of higher simulation and training revenues
primarily from recent programs for the E-2 aircraft and increased
development effort on the CRIIS
program.
|
|
·
|
The
above items were partially offset by an $8 million reduction in sales from
the KC-135 Global Air Traffic Management program which is expected to
complete this year.
|
|
·
|
An
$18 million increase to sales resulting from higher deliveries of iForce
systems to the California Highway
Patrol.
|
|
·
|
Partially
offset by a $13 million reduction in revenue resulting from a recently
completed satellite communication upgrade
program.
|
Three
Months Ended
|
||||||||
December 31
|
||||||||
(dollars
in millions)
|
2010
|
2009
|
||||||
Operating
earnings
|
$ | 131 | $ | 134 | ||||
Percent
of sales
|
20.2 | % | 21.8 | % |
|
·
|
A
$6 million reduction in operating earnings attributable to the combined
impact of a $10 million increase in employee incentive compensation costs
and a $4 million decrease in pension expense as discussed in the
Retirement Plans section below.
|
|
·
|
The
$34 million increase in sales discussed in the Government Systems sales
section above resulted in a $31 million increase to costs and incremental
operating earnings of $3 million. The higher costs primarily resulted from
a lower margin mix of customer-funded development programs and higher
deliveries of iForce systems discussed in the Government Systems Sales
section above.
|
Three
Months Ended
|
||||||||
December 31
|
||||||||
(dollars
in millions)
|
2010
|
2009
|
||||||
Air
transport aviation electronics:
|
||||||||
Original
equipment
|
$ | 115 | $ | 98 | ||||
Aftermarket
|
108 | 100 | ||||||
Wide-body
in-flight entertainment products and services
|
27 | 43 | ||||||
Total
air transport aviation electronics
|
250 | 241 | ||||||
Business
and regional aviation electronics:
|
||||||||
Original
equipment
|
118 | 103 | ||||||
Aftermarket
|
92 | 67 | ||||||
Total
business and regional aviation electronics
|
210 | 170 | ||||||
Total
|
$ | 460 | $ | 411 | ||||
Percent
increase
|
12 | % |
|
·
|
Air
transport original equipment manufacturer (OEM) revenues increased $17
million, or 17 percent, driven by higher Boeing 787 revenues and
deliveries of single-aisle in-flight entertainment
products.
|
|
·
|
Air
transport aftermarket sales increased $8 million, or 8 percent, primarily
related to service and support
sales.
|
|
·
|
Wide-body
in-flight entertainment products and services (Wide-body IFE) decreased
$16 million. Wide-body IFE includes sales of twin-aisle IFE products and
systems to customers in the air transport aviation electronics market and
also includes related revenue from wide-body service and support
activities. Previously, revenues from Wide-body IFE service and support
activities were included in air transport aftermarket sales. For the three
months ended December 31, 2009, $25 million was reclassified out of air
transport aftermarket sales and into Wide-body IFE products and services
in order to conform to the current period presentation. We expect revenue
from Wide-body IFE products and services to continue to decline based upon
the Company’s previously announced decision to cease R&D investment in
this product area and as customers continue to retire older aircraft or
replace their IFE systems.
|
|
·
|
Business
and regional OEM sales increased $15 million, or 15 percent, primarily due
to the combined impact of higher avionics sales for Cessna’s CJ-4 aircraft
which had limited production in the prior year and higher product
deliveries to Bombardier on various
platforms.
|
|
·
|
Incremental
revenue from the Air Routing acquisition contributed $11 million to
business and regional aftermarket
sales.
|
|
·
|
Organic
business and regional aftermarket sales increased $14 million, or 21
percent, due to $8 million of higher retrofits and spares sales and $6
million of higher service and support revenues resulting from improved
aircraft utilization.
|
Three
Months Ended
|
||||||||
December 31
|
||||||||
(dollars
in millions)
|
2010
|
2009
|
||||||
Operating
earnings
|
$ | 84 | $ | 68 | ||||
Percent
of sales
|
18.3 | % | 16.5 | % |
|
·
|
The
$49 million increase in sales discussed in the Commercial Systems sales
section above resulted in a $27 million increase to costs and incremental
operating earnings of $22 million.
|
|
·
|
Operating
earnings included a $7 million benefit related to a change in estimate
recorded in 2011 to reduce the provision for certain customer incentives.
This benefit was offset by the absence of a $4 million favorable contract
settlement which occurred in 2010.
|
|
·
|
The
above items were offset by a $9 million reduction in operating earnings
primarily attributable to the combined impact of an increase in selling,
general and administrative expense and higher employee incentive
compensation costs, partially offset by lower pension expenses as
discussed in the Retirement Plans section
below.
|
Three
Months Ended
|
||||||||
December 31
|
||||||||
(dollars
in millions)
|
2010
|
2009
|
||||||
General
corporate, net
|
$ | 12 | $ | 11 |
Three
Months Ended
|
||||||||
December
31
|
||||||||
(in
millions)
|
2010
|
2009
|
||||||
Pension
benefits
|
$ | (4 | ) | $ | 7 | |||
Other
retirement benefits
|
3 | 1 | ||||||
Net
benefit expense (income)
|
$ | (1 | ) | $ | 8 |
|
·
|
total
sales in the range of $4.8 billion to $5.0
billion
|
|
·
|
diluted
earnings per share in the range of $3.85 to
$4.05
|
|
·
|
cash
provided by operating activities in the range of $650 million to $750
million
|
|
·
|
capital
expenditures of about $150 million
|
|
·
|
total
company and customer-funded R&D expenditures in the range of $900
million to $950 million, or about 19 percent of
sales
|
Three
Months Ended
|
||||||||
December 31
|
||||||||
(in
millions)
|
2010
|
2009
|
||||||
Cash
provided by operating activities
|
$ | 57 | $ | 84 |
|
·
|
Payments
for inventory and other operating costs increased $97 million to $1,023
million in 2011 compared to $926 in 2010. The increase was primarily due
to higher costs associated with organic sales growth in 2011 as discussed
in the Results of Operations section above, as well as inventory purchases
for anticipated production volume and higher pre-production engineering
effort.
|
|
·
|
Payments
for incentive pay increased $71 million in 2011 compared to 2010.
Incentive pay is expensed in the year it is incurred and paid in the first
fiscal quarter of the following year. During the first three months of
2011, $71 million was paid for employee incentive pay costs incurred
during 2010. For the full fiscal year 2009, no incentive pay costs were
incurred; accordingly, there was no 2010 payment for incentive
pay.
|
|
·
|
Contributions
to our pension plans decreased $98 million in 2011 compared to 2010.
During the first three months of 2011, $3 million was contributed compared
to $101 million during the same period last year. Subsequent to our first
quarter of 2011, we made a $100 million contribution to our U.S. qualified
pension plan. See discussion in Retirement Plans section
above.
|
|
·
|
Cash
receipts from customers increased $40 million to $1,158 million in 2011
compared to $1,118 million in 2010, primarily due to the higher sales in
2011 discussed in the Results of Operations section
above.
|
Three
Months Ended
|
||||||||
December 31
|
||||||||
(in
millions)
|
2010
|
2009
|
||||||
Cash
used for investing activities
|
$ | (37 | ) | $ | (119 | ) |
|
·
|
In
the first three months of 2011 we acquired Blue Ridge Simulation, Inc.
(Blue Ridge Simulation) for $6 million compared to the 2010 acquisition of
Air Routing for $91 million.
|
|
·
|
Partially
offset by a $6 million increase in property additions in 2011 compared to
2010.
|
Three
Months Ended
|
||||||||
December 31
|
||||||||
(in
millions)
|
2010
|
2009
|
||||||
Cash
provided by (used for) financing activities
|
$ | (193 | ) | $ | 5 |
|
·
|
Repurchases
of common stock increased $121 million in 2011 compared to 2010. During
the three months ended December 31, 2010, we had $149 million of cash
repurchases of common stock compared to $28 million during the same period
last year.
|
|
·
|
$72
million of the increase is due to changes in net-borrowings. During the
three months ended December 31, 2010 we had $10 million of net short-term
debt repayments compared to net-borrowings of $62 million during the same
period last year.
|
December
31,
|
September
30,
|
|||||||
(in
millions)
|
2010
|
2010
|
||||||
Cash
and cash equivalents
|
$ | 263 | $ | 435 | ||||
Short-term
investments
|
20 | 20 | ||||||
Short-term
debt
|
(12 | ) | (24 | ) | ||||
Long-term
debt, net
|
(512 | ) | (525 | ) | ||||
Net debt
(1)
|
$ | (241 | ) | $ | (94 | ) | ||
Total
equity
|
$ | 1,479 | $ | 1,486 | ||||
Debt to total
capitalization
(2)
|
26 | % | 27 | % | ||||
Net debt to total
capitalization
(3)
|
14 | % | 6 | % |
|
(1)
|
Calculated
as total of short-term and long-term debt, net (Total Debt), less cash and
cash equivalents and short-term
investments
|
|
(2)
|
Calculated
as Total Debt divided by the sum of Total Debt plus Total
equity
|
|
(3)
|
Calculated
as Net debt divided by the sum of Net debt plus Total
equity
|
Credit Rating Agency
|
Short-Term Rating
|
Long-Term Rating
|
Outlook
|
|||
Fitch
Ratings
|
F1
|
A
|
Stable
|
|||
Moody’s
Investors Service
|
P-1
|
A1
|
Stable
|
|||
Standard
& Poor’s
|
A-1
|
A
|
Stable
|
Period
|
Total Number
of Shares
Purchased
|
Average Price
Paid per Share
|
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
|
Maximum Number
(or Appropriate
Dollar Value) of
Shares that May Yet
Be Purchased Under
the Plans or
Programs
1
|
||||||||||||
October
1, 2010 through October 31, 2010
|
300,000 | $ | 60.27 | 300,000 | $ | 308 million | ||||||||||
November
1, 2010 through November 30, 2010
|
1,900,000 | 56.75 | 1,900,000 | 200 million | ||||||||||||
December
1, 2010 through December 31, 2010
|
300,000 | 58.21 | 300,000 | 182 million | ||||||||||||
Total
|
2,500,000 | $ | 57.35 | 2,500,000 | $ | 182 million |
(1)
|
On
September 16, 2010, our Board authorized the repurchase of an additional
$300 million of our common stock. This authorization has no stated
expiration.
|
(a)
|
Exhibits
|
|
10-g-3
|
The
Company’s 2005 Non-Qualified Retirement Savings Plan, as
amended.
|
|
10-h-6
|
The
Company’s 2005 Non-Qualified Pension Plan, as
amended.
|
|
31.1
|
Certification
by Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934.
|
|
31.2
|
Certification
by Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934.
|
|
32.1
|
Certification
by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
32.2
|
Certification
by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
101.INS
|
XBRL
Instance Document
|
|
101.SCH
|
XBRL
Taxonomy Extension Schema
|
|
101.CAL
|
XBRL
Taxonomy Extension Calculation
Linkbase
|
|
101.DEF
|
XBRL
Taxonomy Extension Definition
Linkbase
|
|
101.LAB
|
XBRL
Taxonomy Extension Label Linkbase
|
|
101.PRE
|
XBRL
Taxonomy Extension Presentation
Linkbase
|
ROCKWELL COLLINS, INC.
|
|||
(Registrant)
|
|||
Date:
|
January
28, 2011
|
By
|
/s/ M. A. Schulte
|
M.
A. Schulte
|
|||
Vice
President, Finance and Controller
|
|||
(Principal
Accounting Officer)
|
|||
Date:
|
January
28, 2011
|
By
|
/s/ G. R. Chadick
|
G.
R. Chadick
|
|||
Senior
Vice President,
|
|||
General
Counsel and
Secretary
|
|
(a)
|
any
corporation incorporated under the laws of one of the United States of
America of which the Company owns, directly or indirectly, eighty percent
(80%) or more of the combined voting power of all classes of stock or
eighty percent (80%) or more of the total value of the shares of all
classes of stock (all within the meaning of Code Section
1563);
|
|
(b)
|
any
partnership or other business entity organized under such laws, of which
the Company owns, directly or indirectly, eighty percent (80%) or more of
the voting power or eighty percent (80%) or more of the total value (all
within the meaning of Code Section 414(c));
and
|
|
(c)
|
any
other company deemed to be an Affiliate by the Board of
Directors.
|
|
(a)
|
the
amount which, but for application of the Compensation Limit or the Annual
Additions Limitation, a Participant would have contributed as a
Participant Contribution to the Qualified Retirement Savings Plan with
respect to each payroll period, pursuant to his existing election under
that Plan as of December 31st of the immediately preceding year;
and
|
|
(b)
|
the
Participant's actual Participant Contribution to the Qualified Retirement
Savings Plan with respect to such payroll period as a result of imposition
of the Compensation Limit or the Annual Additions
Limitation.
|
|
(a)
|
The
acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”) (a “Person”) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
20% or more of either (1) the then outstanding shares of common stock of
the Company (the “Outstanding Company Common Stock”) or (2) the combined
voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a Change
of Control: (w) any acquisition directly from the Company, (x)
any acquisition by the Company, (y) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or
any corporation controlled by the Company or (z) any acquisition pursuant
to a transaction which complies with clauses (1), (2) and (3) of
subsection (c) of this Section 1.070;
or
|
|
(b)
|
Individuals
who, as of the date hereof, constitute the Board of Directors of the
Company (the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board of Directors; provided, however, that any
individual becoming a director subsequent to that date whose election, or
nomination for election by the Company's shareowners, was approved by a
vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board of Directors;
or
|
|
(c)
|
Consummation
of a reorganization, merger or consolidation or sale or other disposition
of all or substantially all of the assets of the Company or the
acquisition of assets of another entity (a “Company Transaction”), in each
case, unless, following such Company Transaction, (1) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Company Transaction
beneficially own, directly or indirectly, more than 50% of, respectively,
the then outstanding shares of common stock and the combined voting power
of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation
resulting from such Company Transaction (including, without limitation, a
corporation which as a result of such transaction owns the Company or all
or substantially all of the Company’s assets either directly or through
one or more subsidiaries) in substantially the same proportions
as their ownership, immediately prior to such Company Transaction of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (2) no Person (excluding any employee
benefit plan (or related trust) of the Company or of such corporation
resulting from such Company Transaction) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of
common stock of the corporation resulting from such Company Transaction or
the combined voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership existed prior to
the Company Transaction and (3) at least a majority of the members of the
board of directors of the corporation resulting from such Company
Transaction were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board of
Directors, providing for such Company Transaction;
or
|
|
(d)
|
Approval
by the Company’s shareowners of a complete liquidation or dissolution of
the Company.
|
1.080
|
Code
means the Internal Revenue Code of 1986, as
amended.
|
1.090
|
Committee
means the Compensation Committee of the Board of
Directors.
|
1.100
|
Company
means Rockwell Collins, Inc., a Delaware
corporation.
|
1.110
|
Company
Matching Contribution Credits
means an amount to be credited to the
Plan by the Company, which shall be equal to the applicable Company
Matching Contribution percentage applied to a Participant’s contribution
under the Qualified Retirement Savings
Plan.
|
1.120
|
Company
Retirement Contribution Credits
means an amount to be credited to
the Plan by the Company, which shall be equal to the applicable Company
Retirement Contribution percentage applied to a Participant’s Eligible
Compensation under the Qualified Retirement Savings
Plan.
|
1.130
|
Compensation
Limit
means the limitation imposed by Section 401(a)(17) of the
Code on the amount of compensation which can be considered in determining
the amount of contributions to the Qualified Retirement Savings
Plan.
|
1.140
|
Employee
means any person who is employed by the Company or by an Affiliate,
including, to the extent permitted by Section 406 of the Code, any United
States citizen regularly employed by a foreign Affiliate of the
Company.
|
1.150
|
ERISA
means the Employee Retirement Income Security Act of 1974, as
amended.
|
1.160
|
409A
Change of Control
means a “Change of Control Event” as defined in
Treasury Regulation Section 1.409A-3(i)(5)(i) and set forth in Treasury
Regulation Section 1.409A-3(i)(5)(v)-(vii), applying the default rules and
percentages set forth in such Treasury
Regulation.
|
1.170
|
Participant
means an individual who is a participant in the Qualified Retirement
Savings Plan whose Participant Contributions to that Plan are restricted
by the Compensation Limit or the Annual Additions Limitation and who (a)
has elected or is deemed to have elected in the Plan Year immediately
preceding the current Plan Year to have one or more Base Compensation
Deferrals credited to his Account pursuant to Article II, or (b) if hired
during the current Plan Year, becomes a Participant on the first day of
the payroll period during which he or she exceeds the Annual Additions
Limitation or the Compensation Limit during such Plan Year.
Notwithstanding any other provision of this Plan or the Qualified
Retirement Savings Plan to the contrary, no Employee or any other person,
individual or entity shall become a Participant in this Plan on or after
the day on which a Change of Control
occurs.
|
1.180
|
Plan
means this Amended and Restated Rockwell Collins 2005 Non-Qualified
Retirement Savings Plan.
|
1.190
|
Plan
Administrator
means the person from time to time so designated by
name or corporate office by the Board of
Directors.
|
1.200
|
Plan
Year
means each
twelve-month period ending December
31st.
|
1.210
|
Pre-2005
Plan
means the Rockwell Collins Non-Qualified Savings
Plan.
|
1.220
|
Retirement
means “separation from service” from the Company and all of its
Affiliates, within the meaning of Section 409A, on or after attainment of
age 55 other than for reason of
death.
|
1.230
|
Qualified
Retirement Savings Plan
means the Rockwell Collins Retirement
Savings Plan.
|
1.240
|
Section
409A
means Section 409A of the Code and any regulations and other
guidance issued thereunder.
|
1.250
|
Securities
Exchange Act
means the Securities Exchange Act of 1934, as
amended.
|
1.260
|
Separation
from Service
means a “separation from service” from the Company and
all of its Affiliates, within the meaning of Section 409A, other than for
reasons of Retirement or death.
|
1.270
|
Specified
Employee
has the meaning
set forth in Section 409A, as determined each year in accordance with
procedures established by the
Company.
|
1.280
|
Sub-Accounts
refers to one of this Plan's investment vehicles (corresponding to
the Qualified Retirement Savings Plan investment funds) to which a
Participant's Base Compensation Deferrals, Company’s Matching Contribution
Credits, and Company Retirement Contribution Credits are
assigned.
|
1.290
|
Third-Party
Administrator
means an independent third party selected by the
Trustee and approved by the individual who, immediately prior to a Change
of Control, was the Company’s Chief Executive Officer or, if not so
identified, the Company’s highest ranking officer (the
“Ex-CEO”).
|
1.300
|
Trust
means the master trust established by agreement between the Company and
the Trustee, which trust will be a grantor
trust.
|
1.310
|
Trustee
means Wells Fargo Bank, N.A., or any successor trustee of the Trust
described in Section 1.300 of this
Plan.
|
2.010
|
The
Company will establish on its books a Non-Qualified Retirement Savings
Plan Account for each Participant who elects a Base Compensation
Deferral.
|
|
(a)
|
The
amount of such Base Compensation Deferral shall be credited to such
Account and allocated to one or more of this Plan's Sub-Accounts in the
manner set forth in this Section.
|
|
(1)
|
Each
such credit shall be made to such Account no later than the date on which
the corresponding contribution to the Qualified Retirement Savings Plan is
made or would have been made, but for imposition of the Compensation Limit
or the Annual Additions Limitation; provided, however, that any such
credits made as a result of any retroactive amendment to the Plan shall be
made upon adoption thereof, but in amounts which reflect the value such
credits would have had if that amendment had been in effect on its
effective date and such contributions had been made on the respective
dates of the corresponding contributions to the Qualified Retirement
Savings Plan.
|
|
(2)
|
The
Base Compensation Deferral shall, in increments of one percent (1%) and
with the total of the percentage increments equaling one hundred percent
(100%), be allocated to the Sub-Account or Sub-Accounts under this Plan
pursuant to separate Participant elections made in a method identical to
the method in which the Participant’s elections are made among Investment
Funds under the Qualified Retirement Savings
Plan.
|
|
(3)
|
A
Participant may change any previous election he has made regarding deemed
investment of his Base Compensation Deferrals under this Plan in the same
manner as he may change his previous elections regarding investment of his
Participant Contributions in the Qualified Retirement Savings
Plan.
|
|
(4)
|
If
a Participant fails to make a deemed investment election with respect to
his Base Compensation Deferrals under this Plan, the Participant will be
deemed to have elected to have his Base Compensation Deferrals under this
Plan invested in accordance with the default investment fund option under
the Qualified Retirement Savings
Plan.
|
|
(5)
|
Notwithstanding
any other provision of this Plan to the contrary, any deemed investment
elections made by the Participant with respect to Sub-Accounts under this
Plan shall be considered recommendations as to the investment of such
Sub-Accounts and the Company reserves the right in it sole discretion to
choose whether to honor such deemed investment
elections.
|
|
(b)
|
At
the time each Base Compensation Deferral is credited to a Participant's
Account, a Company Matching Contribution Credit shall also be made to such
Account. Such Company Matching Contribution Credit shall be
allocated to the Sub-Accounts under this Plan in the same manner in which
Company Matching Contributions are allocated under the Qualified
Retirement Savings Plan.
|
|
(c)
|
Notwithstanding
any other provision of this Plan to the contrary, this Plan is limited to
Base Compensation Deferrals and Company Matching Contribution Credits that
are earned and vested after December 31, 2004 (and any earnings deemed
credited thereon), and Company Retirement Contribution Credits earned
after October 1, 2006. Upon the establishment of this Plan, any
Accounts under the Pre-2005 Plan that were not earned and vested as of
December 31, 2004, and all liabilities associated therewith, were
transferred to Accounts under this Plan. No Base Compensation
Deferrals or Company Matching Contribution Credits that were earned and
vested as of December 31, 2004 (or any earnings deemed credited
thereon) shall be credited to any Account under this
Plan.
|
|
(d)
|
Notwithstanding
any other provision of this Plan to the contrary, for purposes of
determining any Base Compensation Deferrals or Company Matching
Contribution Credits with respect a Participant described in Section
1.170(a) for any Plan Year, the Participant’s written or electronic
election to make Participant Contributions to the Qualified Retirement
Savings Plan in effect on December 31st of the year immediately preceding
such Plan Year shall be deemed to be fixed and shall be deemed to be the
election to defer compensation under this Plan for purposes of Section
409A. Effective for Plan Years beginning on and after January 1,
2008, no change to the Participant’s written or electronic election to
make Participant Contributions to the Qualified Retirement Savings Plan
during such Plan Year shall be effective for purposes of determining Base
Compensation Deferrals or Company Matching Contribution Credits under this
Plan for such Plan Year. For Plan Years beginning on and after
January 1, 2005 and before January 1, 2008, for purposes of determining
any Base Compensation Deferrals or Company Matching Contribution Credits
with respect to a Participant for such Plan Year, the Participant’s
written or electronic election to make Participant Contributions to the
Qualified Retirement Savings Plan in effect on December 31st of the year
immediately preceding such Plan Year shall be deemed to be fixed and
irrevocable except for decreases permitted in accordance with good faith
operational compliance with Section 409A and shall be deemed to be the
election to defer compensation under this Plan for purposes of Section
409A.
|
|
(e)
|
Notwithstanding
any other provision of this Plan to the contrary, each Participant
described in Section 1.170(b) shall automatically have Base Compensation
Deferrals deferred to this Plan for the Plan Year of his or her hire as
described in this paragraph. For purposes of determining Base
Compensation Deferrals or Company Matching Contribution Credits with
respect to such Participant for such Plan Year, the Participant’s written
or electronic election to make Participant Contributions to the Qualified
Retirement Savings Plan for the first pay date for which an election is in
effect for such Participant shall be deemed to be fixed and the election
to defer compensation under this Plan for purposes of Section 409A;
provided, however, that no Base Compensation Deferrals or Company Matching
Contribution Credits shall be made to this Plan unless such election
occurs prior to or within 30 days after he is eligible to become a
Participant in this Plan or any similar deferred compensation plan
required to be aggregated with this Plan in accordance with the plan
aggregation rules set forth in Section 409A. No change to such new
Participant’s election to make Participant Contributions to the Qualified
Retirement Savings Plan after the date of such deemed election shall be
effective for purposes of determining Base Compensation Deferrals or
Company Matching Contribution Credits under this Plan for such Plan
Year.
|
|
Effective
October 1, 2006, for each pay period that the employee is a Participant in
this Plan, the Company will make a Company Retirement Contribution Credit
in accordance with the Company Retirement Contribution the employee would
have received in the Qualified Retirement Savings Plan. Subject to
Section 2.010(a)(5), such contributions shall be allocated to the
Sub-Account or Sub-Accounts under this Plan pursuant to separate deemed
Participant elections made in the same manner in which the Participant’s
elections are made among Investment Funds under the Qualified Retirement
Savings Plan.
|
2.020
|
With
respect to Base Compensation Deferrals, a Participant may elect to make
the Sub-Account deemed investment transfers in the same manner as is
described in the Qualified Retirement Savings Plan and, in such case, the
value of the Participant's interest in the Sub-Accounts hereunder shall be
similarly transferred (in one percent (1%) increments, in number of units
or in specified dollar amounts) to one or more of the other
Sub-Accounts.
|
2.030
|
Each
of a Participant's Sub-Accounts shall be accounted for in the manner and
valued at the times and pursuant to the method provided in the Qualified
Retirement Savings Plan for the Qualified Retirement Savings Plan
Investment Fund corresponding to such Sub-Account. A Participant's
rights in and to his Sub-Accounts shall be governed by the provisions of
the Qualified Retirement Savings Plan which are applicable to the
Investment Fund corresponding to such
Sub-Account.
|
2.040
|
The
distribution and withdrawal provisions of the Qualified Retirement Savings
Plan shall have no application to this Plan. Distribution to a
Participant of his Sub-Accounts hereunder shall only be made upon the
Participant's Separation from Service, Retirement, death or, subject to
the terms and conditions set forth in Section 2.050, 409A Change of
Control. All such distributions to Participants, as well as
distributions made to beneficiaries hereunder, shall be made in the form
of lump sum payments, subject to the
following:
|
|
(a)
|
Effective
for Plan Years beginning on or after January 1, 2008, except as otherwise
provided in Section 2.040(b) below, a Participant may make a one-time,
irrevocable election to have the value of such interest paid in no more
than ten (10) annual installments commencing upon Retirement, such
installments to be equal to the value of the Participant's Sub-Accounts
divided by the number of installments remaining at the time of
distribution; provided, however, that such election must be made by the
Participant no later than December 31st of the calendar year immediately
preceding the Plan Year to which such Base Compensation Deferrals, Company
Matching Contribution Credits, and Company Retirement Contribution Credits
relate. Except as otherwise provided in Section 6.020, such election
shall be irrevocable.
|
|
(b)
|
Notwithstanding
the foregoing, effective for Plan Years beginning on or after January 1,
2008, any Accounts deferred on behalf of the Participant for the first
Plan Year in which a Participant becomes eligible to participate in the
Plan (taking into account the plan aggregation rules set forth in Section
409A) will be paid in a lump sum, unless the Participant has made a
distribution election (either in writing or filed electronically) on or
before December 31 of the calendar year immediately preceding the Plan
Year to which such Base Compensation Deferrals, Company Matching
Contribution Credits, and Company Retirement Contribution Credits
relate.
|
2.050
|
A
Participant may elect to have his Accounts hereunder paid in a lump sum,
in the event of the occurrence of a 409A Change of Control, subject to the
following:
|
|
(a)
|
To
be effective, the election of a Participant pursuant to this Section 2.050
must be made in writing and filed with the Committee or filed
electronically on or before December 31st of the calendar year immediately
preceding the Plan Year in which such Base Contribution Deferrals, Company
Matching Contribution Credits, and Company Retirement Contribution Credits
relating to such installment payment were earned. Once an election
is made pursuant to this Section 2.050 it shall remain in effect for all
future years unless an election is made before December 31st of the
calendar year immediately preceding such future Plan Year. Except as
otherwise provided in Section 6.020, such election shall become
irrevocable. Notwithstanding the foregoing, a Participant may elect
to make the election described in this Section 2.050 with respect to his
interest in and to Sub-Accounts hereunder that were earned prior to
January 1, 2009 no later than December 31, 2008 (or such other date as is
permitted under Section 409A and approved by the Senior Vice President,
Human Resources of Rockwell
Collins).
|
|
(b)
|
Notwithstanding
the foregoing, if the Participant does not file a timely written or
electronic election in accordance with Section 2.050(a) to receive or not
receive his or her Accounts under the Plan in a lump sum upon a 409A
Change of Control, then such Participant’s Accounts under the Plan will
automatically be paid in a lump sum upon a 409A Change of
Control.
|
2.060
|
With
respect to distributions which are payable to a Participant or, in the
event of the Participant's death, to his
beneficiary:
|
|
(a)
|
Subject
to Section 6.030, any lump sum payments shall be paid within the sixty
(60) day period following the close of the calendar year which includes
the Participant's Separation from Service, Retirement or, if applicable,
death.
|
|
(b)
|
Subject
to Section 6.030, each annual installment payable shall be paid within the
sixty (60) day period following the close of each calendar year during the
payment period, commencing with the calendar year following the year which
includes the Participant's Retirement or, if applicable,
death.
|
|
(c)
|
Any
lump sum payments which are to be made on account of the occurrence of a
409A Change of Control shall be made within forty-five (45) days following
such 409A Change of Control.
|
|
(d)
|
All
distributions from the Stock Fund Sub-Accounts, whether in the form of
lump sum or installment payments, shall be made in
cash.
|
2.070
|
A
Participant shall have the right, at any time, to designate any person or
persons and/or charity or charities as his beneficiary or beneficiaries
(both principal as well as contingent) to whom distribution under this
Plan shall be made in the event of his death prior to distribution of his
Account. In the absence of such designation, the beneficiary
designation filed by him under the Qualified Retirement Savings Plan shall
be controlling, except that if the Participant has a spouse and his
beneficiary designation under the Qualified Retirement Savings Plan
specifies a beneficiary other than such spouse, such designation, to the
extent permitted by applicable law, shall be effective under this Plan
notwithstanding the fact that such spouse may not have consented to such
designation as required by the Qualified Retirement Savings
Plan.
|
2.080
|
Each
Participant shall receive a statement of his Account at the times and in
the form in which his Qualified Retirement Savings Plan statement is
provided.
|
2.090
|
Notwithstanding
any other provision of this Plan to the contrary, if a Participant dies
prior to commencement of distribution of his Accounts under the Plan, such
Accounts will be paid in a lump sum to his designated beneficiary within
the sixty (60) day period following the close of the calendar year which
includes the Participant’s
death.
|
2.100
|
Notwithstanding
any other provision of this Plan to the contrary, if a Participant dies
after the commencement of distribution of his Accounts under the Plan,
such Accounts will be paid in the form elected by the Participant pursuant
to Section 2.040.
|
3.010
|
Any
person claiming a right to participate in this Plan, claiming a benefit
under this Plan or requesting information under this Plan shall present
the claim or request in writing to the Committee or the person or entity
designated by the Committee, who shall respond in writing within ninety
(90) days following receipt of such
request.
|
3.020
|
If
the claim or request is denied, the written notice of denial shall
state:
|
|
(a)
|
the
reasons for denial;
|
|
(b)
|
a
description of any additional material or information required and an
explanation of why it is necessary;
and
|
|
(c)
|
an
explanation of this Plan's claim review
procedure.
|
3.030
|
Any
person whose claim or request is denied may make a request for review by
notice given in writing to the
Committee.
|
3.040
|
A
decision on a request for review shall normally be made within ninety (90)
days after the date of such request. If an extension of time is
required for a hearing or other special circumstances, the claimant shall
be notified and the time limit shall be extended by an additional sixty
(60) days from the date of such request. The decision shall be in
writing and shall be final and binding on all parties
concerned.
|
4.010
|
The
Board of Directors shall have the power to amend, suspend or terminate
this Plan at any time, except that no such action shall adversely affect
rights with respect to any Account without the consent of the person
affected. Notwithstanding the foregoing, except as otherwise
permitted by Section 409A, in the event of any termination of the Plan,
any amounts payable under the Plan shall continue to be paid in accordance
with the terms of the Plan in effect on the date of Plan
termination.
|
4.020
|
This
Plan shall be interpreted and administered by the Committee; provided,
that interpretations by the Plan Administrator of those provisions of the
Qualified Retirement Savings Plan which are also applicable to this Plan
shall be binding on the
Committee.
|
|
(a)
|
pay
all reasonable administrative expenses and fees of the Third-Party
Administrator;
|
|
(b)
|
indemnify
the Third-Party Administrator against any costs, expenses and liabilities
including, without limitation, attorney’s fees and expenses arising in
connection with the performance of such administrator hereunder, except
with respect to matters resulting from the gross negligence or willful
misconduct of the said administrator or its employees or agents;
and
|
|
(c)
|
supply
full and timely information to the Third-Party Administrator on all
matters relating to the Plan, the Trust, the Participants and their
beneficiaries, the Account balances of the Participants, the date of
circumstances of the Separation from Service, Retirement or death of the
Participants, and such other pertinent information as the Third-Party
Administrator may reasonably
require.
|
|
(d)
|
Upon
and after a Change of Control, the Third-Party Administrator may not be
terminated by the Company and may only be terminated (and a replacement
appointed) by the Trustee, but only with the approval of the Ex-CEO (as
defined in Section 1.290).
|
4.030
|
This
Plan is an unfunded employee benefit plan primarily for providing deferred
compensation to a select group of management or highly compensated
employees of the Company pursuant to the Compensation Limitation and is
also an excess benefit plan (as defined by Section 3(36) of ERISA) with
respect to the Annual Additions Limitation. This Plan is intended to
be unfunded for tax purposes and for purposes of Title I of ERISA.
Participants and their beneficiaries, estates, heirs, successors and
assigns shall have no legal or equitable rights, interest or claims in any
property or assets of the Company or any of its Affiliates. Any and
all of the assets of the Company and its Affiliates shall be, and remain,
the general, unpledged, unrestricted assets of the Company and its
Affiliates. The Company’s and any Affiliate’s sole obligation under
this Plan shall be merely that of an unfunded and unsecured promise of the
Company or such Affiliate to pay money in the
future.
|
4.040
|
Neither
a Participant nor any other person shall have any right to commute, sell,
assign, transfer, pledge, anticipate, mortgage or otherwise encumber,
transfer, hypothecate or convey, in advance of actual receipt, any
interest in an Account. Each Account and all rights therein are and
shall be nonassignable and nontransferable prior to actual distribution as
provided by this Plan. Any such attempted assignment or transfer
shall be ineffective with respect to the Company and with respect to any
Affiliate, and the Company’s and any Affiliate’s sole obligation shall be
to distribute Accounts to Participants, their beneficiaries or estates as
appropriate. No part of any Account shall, prior to actual payment
as provided by this Plan, be subject to seizure or sequestration for the
payment of any debts, judgments, alimony or separate maintenance owed by a
Participant or any other person, nor shall any Account be transferable by
operation of law in the event of a Participant's or any other persons
bankruptcy or insolvency, except as otherwise required by
law.
|
4.050
|
This
Plan shall not be deemed to constitute a contract of employment between
the Company or any of its Affiliates and any Participant, and no
Participant, beneficiary or estate shall have any right or claim against
the Company or any of its Affiliates under this Plan except as may
otherwise be specifically provided in this Plan. Nothing in this
Plan shall be deemed to give a Participant the right to be retained in the
service of the Company or any Affiliate or to interfere with the right of
the Company or any Affiliate to discipline, discharge or change the status
of a Participant at any time.
|
4.060
|
A
Participant will cooperate with the Committee by furnishing any and all
information requested by the Committee or its delegates in order to
facilitate the distribution of his Accounts under this Plan and by taking
such other action as may be reasonably requested by the Committee or its
delegates.
|
4.070
|
Subject
to ERISA, the provisions of this Plan shall be construed and interpreted
according to the laws of the State of Iowa. In the event that any
provision of this Plan shall be held illegal or invalid for any reason,
said illegality or invalidity shall not affect the remaining provisions of
this Plan, which shall be construed and enforced as if such illegal or
invalid provision were not included in this Plan. The provisions of
this Plan shall bind and obligate the Company and its Affiliates and their
successors, including, but not limited to, any corporate or other business
entity which shall, whether by merger, consolidation, purchase or
otherwise, acquire all or substantially all of the business and assets of
the Company or its Affiliates and the successors of any such company or
other business entity.
|
4.080
|
The
Company shall bear all expenses and costs in connection with the operation
and administration of this Plan. The Company, its Affiliates, the
Committee and any employee of the Company or any of its Affiliates shall
be fully protected in relying in good faith on the computations and
reports made pursuant to or in connection with this Plan by the
independent certified public accountants who audit the Company’s
accounts.
|
4.090
|
All
words used in this Plan in the masculine gender shall be construed as if
used in the feminine gender where appropriate. All words used in
this Plan in the singular or plural shall be construed as if used in the
plural or singular where
appropriate.
|
5.010
|
Establishment
of the Trust
. The Company shall establish the Trust (which
may be referred to herein as a “Rabbi Trust”). The Trust shall
become irrevocable upon a Change of Control (to the extent not then
irrevocable). Notwithstanding any other provision of this Plan to
the contrary, the Trust shall not become irrevocable or funded with
respect to this Plan upon the occurrence of an event described in Section
1.070(d). After the Trust has become irrevocable with respect to the
Plan, except as otherwise provided in Section 12 of the Trust, the Trust
shall remain irrevocable with respect to the Plan until all the Account
balances due under this Plan and all benefits and/or account balances due
to the participants (and their beneficiaries) in any other plan covered by
the Trust have been paid in full. Upon establishment of the Trust,
the Company shall provide for funding of the Trust in accordance with the
terms of the Trust.
|
5.020
|
Interrelationship
of the Plan and the Trust
. The provisions of the Plan will
govern the rights of a Participant to receive distributions pursuant to
the Plan. The provisions of the Trust will govern the rights of the
Company and its Affiliates, Participants and the creditors of the Company
and its Affiliates to the assets transferred to the Trust. The
Company and each of its Affiliates employing any Participant will at all
times remain liable to carry out their obligations under the
Plan.
|
5.030
|
Distributions
From the Trust
. The Company’s and each of its Affiliate's
obligations under the Plan may be satisfied with Trust assets distributed
pursuant to the terms of the Trust, and any such distribution will reduce
their obligations under this Plan.
|
5.040
|
Rabbi
Trust
.
The Rabbi Trust
shall:
|
|
(a)
|
be
a non-qualified grantor trust which satisfies in all material respects the
requirement of Revenue Procedure 92-64, 1992-2 CB 122 (or any successor
Revenue Procedure or other applicable
authority);
|
|
(b)
|
be
irrevocable upon a Change of Control, to the extent not then irrevocable
(other than an event described in Section 1.070(d));
and
|
|
(c)
|
provide
that any successor trustee shall be a bank trust department or other party
that may be granted corporate trustee powers under state
law.
|
6.010
|
Section
409A Generally
. This Plan is intended to comply with Section
409A. Notwithstanding any other provision of this Plan to the
contrary, the Company makes no representation that this Plan or any
amounts payable or benefits provided under this Plan will be exempt from
or comply with Section 409A and makes no undertaking to preclude Section
409A from applying to this Plan.
|
6.020
|
Changes
in Elections
. Notwithstanding any other provision of this
Plan to the contrary, once an election is made pursuant to this Plan it
shall be irrevocable unless all of the following conditions are
met:
|
|
(a)
|
the
election to change the time or form of payment will not become effective
until the date that is one year after the date on which the election to
make the change is made;
|
|
(b)
|
except
with respect to any payment to be made upon the death of a Participant,
the form of payment, as changed, will defer payment of the Participant’s
Account Balances until five (5) years later than the date that payment of
such Participant’s Accounts would otherwise have been made under this
Plan; and
|
|
(c)
|
with
respect to a payment that is to be made upon a fixed date or schedule of
dates, the election to change the form of payment is made no less than
twelve (12) months before the date that payment of the Accounts was
otherwise scheduled to be paid.
|
6.30
|
Six
Month Wait for Specified Employees
. Notwithstanding any other
provision of this Plan to the contrary, to the extent that any Accounts
payable under the Plan constitute an amount payable upon Separation from
Service or Retirement to any Participant under the Plan who is deemed to
be a Specified Employee, then such amount will not be paid during the six
(6) month period following such Separation from Service or
Retirement. If the provisions of this Section 6.030 apply to a
Participant who incurs a Separation from Service or Retirement, within the
first six (6) months of the calendar year, then such amount will be paid
within the first sixty (60) days following the close of the calendar year
which includes the Participant’s Separation from Service or
Retirement. If the provisions of this Section 6.030 apply to a
Participant who incurs a Separation from Service or Retirement within the
last six (6) months of the calendar year, then such amount will be paid
within the first sixty (60) days after June 30th of the calendar year
following the year in which includes the Participant’s Separation from
Service or Retirement.
|
|
(a)
|
For
a lump sum calculated upon Retirement the calculation will reflect the
immediate benefit payable.
|
|
(b)
|
For
a lump sum calculated upon Separation from Service other than a
Layoff-Slide the calculation will reflect the normal age 65 retirement
benefit (as defined in the Company Pension
Plan).
|
|
(c)
|
For
a lump sum calculated upon a Layoff-Slide the calculation will reflect the
retirement benefit payable at age 55 (as defined in the Company Pension
Plan), as determined reflecting any additional age and/or service that
would be earned by age 55 under those
provisions.
|
|
(d)
|
For
annual installment payments, the calculation will reflect the immediate
benefit payable converted to a period-certain
annuity.
|
|
(e)
|
For
purposes of Section 2.030(e), a level benefit shall be determined that is
the actuarial equivalent of:
|
|
i.
|
the
benefit determined under Section 2.030 and payable without reduction for
the benefit that would be payable under the Certain Salaried Sub-Plan
until the later of (i) the earliest Annuity Starting Date under the
Certain Salaried Sub-Plan (assuming that the Participant has terminated
employment as of the earliest date identified in clause (ii))
or
(ii) the earliest of the Participant's Separation from Service,
Retirement, death or, if the Participant has elected a distribution under
Section 2.050, a 409A Change of Control,
plus
|
|
ii.
|
the
benefit payable under Section 2.030 reduced as of the later of (i) the
earliest Annuity Starting Date under the Certain Salaried Sub-Plan
(assuming that the Participant has terminated employment as of the
earliest date identified in clause (ii))
or
(ii) the earliest of the Participant's Separation from Service,
Retirement, death or, if the Participant has elected a distribution under
Section 2.050, a 409A Change of Control by the amount of the benefit that
would be payable under the Certain Salaried Sub-Plan if the Annuity
Starting Date was equal to such date and the same optional form of payment
was elected.
|
|
(f)
|
For
purposes of determining the benefit payable as of the deferred payment
date after a change in election pursuant to Section 6.020, the benefits
shall be calculated as if they commenced immediately. As of the
deferred payment date, the Participant, surviving spouse or Participant’s
estate shall receive the sum of:
|
|
i.
|
ongoing
payments, if applicable, reflecting the elected payment form and
survivorship of the Participant and, if applicable, surviving spouse,
and
|
|
ii.
|
a
one-time payment of all benefits that would have been paid during the
five-year deferral period if benefits had not been deferred due to the
requirements of Section 6.020. Each deferred payment shall be
increased from the date it otherwise would have been paid to the deferred
payment date reflecting the Interest Rate applicable to the original
benefit calculation.
|
|
(a)
|
any
company incorporated under the laws of one of the United States of America
of which the Company owns, directly or indirectly, eighty
percent (80%) or more of the combined voting power of all classes of
stock or eighty percent (80%) or more of the total value of the
shares of all classes of stock (all within the meaning of Code
Section 1563);
|
|
(b)
|
any
partnership or other business entity organized under such laws, of which
the Company owns, directly or indirectly, eighty percent (80%) or
more of the voting power or eighty percent (80%) or more of the total
value (all within the meaning of Code Section 414(c));
and
|
|
(c)
|
any
other company deemed to be an Affiliate by the Board of
Directors.
|
1.010
|
Benefit
Limitation
means the limitations on benefits payable from Defined
Benefit Plans which are imposed by Section 415 of the
Code.
|
1.020
|
Board
of Directors
means the Company's Board of
Directors.
|
1.025
|
Certain
Salaried Sub-Plan
means the Certain Salaried Plan (Sub Plan No.
003) to the Company Pension Plan.
|
1.030
|
Change
of Control
means
any of the following:
|
|
(a)
|
The
acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (a “Person”) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
20% or more of either (1) the then outstanding shares of common stock of
the Company (the “Outstanding Company Common Stock”) or (2) the combined
voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a Change
of Control: (w) any acquisition directly from the Company, (x)
any acquisition by the Company, (y) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or
any corporation controlled by the Company or (z) any acquisition pursuant
to a transaction which complies with clauses (1), (2) and (3) of
subsection (c) of this Section 1.030;
or
|
|
(b)
|
Individuals
who, as of the date hereof, constitute the Board of Directors of the
Company (the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board of Directors; provided, however, that any
individual becoming a director subsequent to that date whose election, or
nomination for election by the Company's shareowners, was approved by a
vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board of Directors;
or
|
|
(c)
|
Consummation
of a reorganization, merger or consolidation or sale or other disposition
of all or substantially all of the assets of the Company or the
acquisition of assets of another entity (a “Company Transaction”), in each
case, unless, following such Company Transaction, (1) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Company Transaction
beneficially own, directly or indirectly, more than 50% of, respectively,
the then outstanding shares of common stock and the combined voting power
of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation
resulting from such Company Transaction (including, without limitation, a
corporation which as a result of such transaction owns the Company or all
or substantially all of the Company’s assets either directly or through
one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Company Transaction of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (2) no Person (excluding any employee
benefit plan (or related trust) of the Company or of such corporation
resulting from such Company Transaction) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of
common stock of the corporation resulting from such Company Transaction or
the combined voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership existed prior to
the Company Transaction and (3) at least a majority of the members of the
board of directors of the corporation resulting from such Company
Transaction were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board of
Directors, providing for such Company Transaction;
or
|
|
(d)
|
Approval
by the Company’s shareowners of a complete liquidation or dissolution of
the Company.
|
1.040
|
Code
means the Internal Revenue Code of 1986, as
amended.
|
1.050
|
Committee
means the Compensation Committee of the Board of
Directors.
|
1.060
|
Company
means Rockwell Collins, Inc., a Delaware
corporation.
|
1.070
|
Company
Officer
means
an employee who, effective July 23, 2007 attains a Salary Grade of M0 or
M1, or who prior to July 23, 2007 but after June 30, 2006 attained a
Salary Grade of M9 or M0 or who prior to July 1, 2006 attained a Salary
Grade of 23 or higher.
|
1.080
|
Company
Pension Plan
means the Rockwell Collins Pension
Plan.
|
1.090
|
Compensation
Limit
means the limitation imposed by Section 401(a)(17) of the
Code on the amount of compensation which can be considered in determining
the amount of a participant's benefit under the Company Pension
Plan.
|
1.095
|
Corporate
Pilot
means any Participant in the Company Pension Plan whose
primary duty as an employee is the operation of aircraft as a pilot or
co-pilot for at least one year immediately preceding the
earliest of (i) Retirement, (ii) termination, if at the time of
termination the Participant is Retirement eligible, or (iii) Layoff, if
the Participant is or will become Retirement eligible while on Layoff
status.
|
1.100
|
Defined
Benefit Plan
has the same
meaning given that term in Section 3(35) of
ERISA.
|
1.105
|
Delinkage
Date
means January 1, 2009 or such other date as is permitted under
Section 409A and is approved by the Chief Executive Officer, Chief
Financial Officer, Senior Vice President, Human Resources or General
Counsel of the Company.
|
1.107
|
Electronics
Salaried Sub-Plan
means the Electronics Salaried Plan (Sub Plan No.
028) to the Company Pension Plan.
|
1.110
|
Employee
means any person who is employed by the Company or by an Affiliate,
including, to the extent permitted by Section 406 of the Code, any United
States citizen regularly employed by a foreign Affiliate of the
Company.
|
1.120
|
ERISA
means the Employee Retirement Income Security Act of 1974, as
amended.
|
1.130
|
409A
Change of Control
means
a “Change of Control Event” as defined in Treasury Regulation
Section 1.409A-3(i)(5)(i) and as set forth in Treasury Regulation
Section 1.409A-3(i)(5)(v)-(vii), applying the default rules and
percentages set forth in such Treasury
Regulations.
|
1.140
|
Highly
Compensated Employee
means a participant in or retiree under the
Company Pension Plan whose compensation would otherwise be considered
under such Plan in determining his benefits thereunder in excess of the
Compensation Limit.
|
1.150
|
Interest
Rate
means the average 30-Year Treasury Rate as published by the
Internal Revenue Service in the October preceding the year of the earliest
of the Participant's Separation from Service, Retirement, death or, if the
Participant has elected a distribution under Section 2.050, a 409A Change
of Control.
|
1.151
|
Layoff
shall have the meaning ascribed to the term “Layoff” in the Company
Pension Plan.
|
1.155
|
Layoff-Slide
means
the Separation from Service by a Participant resulting from a reduction in
force, for a Participant who has attained age 50 but not attained age 55
at the time of such Separation from Service, if service completed prior to
the Layoff-Slide will be considered in the event the Participant is
re-employed, under applicable policies or procedures. A Participant
shall be deemed to be on Layoff-Slide status for that period of time
during which such service will be reinstated in the event of such
re-employment.
|
1.160
|
Mortality
Assumptions
means the FAS 87 mortality assumptions used for the
Company’s Net Periodic Benefit Costs in the Company’s fiscal year during
which the earliest of the Participant's Separation from Service,
Retirement, death or, if the Participant has elected a distribution under
Section 2.050, a 409A Change of Control
occurs.
|
1.170
|
Participant
means any participant in the Company Pension Plan whose benefits payable
therefrom are restricted by the Benefit Limitation or the Compensation
Limit. Employees who were hired on or before September 30, 2006 who
(1) are Corporate Pilots, (2) are Company Officers hired on or after
January 1, 1993 but eligible for the pre-1993 formula under the Company
Pension Plan, or (3) are participants in the Company Pension Plan who
deferred compensation under the Rockwell Collins Deferred Compensation
Plan and attained 85 points under the Rule of 85 after December 31, 2004,
are also eligible to participate in this Plan. Notwithstanding any
other provision of this Plan or the Company Pension Plan to the contrary,
no Employee or other person, individual or entity shall become a
Participant in this Plan after the earlier of (a) September 30, 2006 or
(b) the day on which a Change of Control
occurs.
|
1.180
|
Plan
means this Amended and Restated Rockwell Collins 2005 Non-Qualified
Pension Plan.
|
1.190
|
Plan
Administrator
means the person from time to time so designated by
name or corporate office by the Board of
Directors.
|
1.200
|
Pre-2005
Plan
means the Rockwell
Collins Non-Qualified Pension Plan and its predecessor, the Rockwell
International Corporation Non-Qualified Pension
Plan.
|
1.210
|
Retirement
means “separation from service” from the Company and all of its
Affiliates, within the meaning of Section 409A, on or after attainment of
age 55 other than for reason of
death.
|
1.220
|
Rule
of 85
means, with respect to a Participant in the Electronics
Salaried or Certain Salaried sub-plans of the Company Pension Plan
attainment of at least age 55 but not more than age 62 with a sum of age
(in years and months) and Credited Service (as defined in the Company
Pension Plan) (in years and months) total 85 or more on or before the date
of Separation from Service or Retirement. For purposes of
determining eligibility, years and months of service with the Company
after September 30, 2006 shall also be
considered.
|
1.230
|
Section
409A
means Section 409A of the Code and any regulations or other
guidance issued thereunder.
|
1.240
|
Securities
Exchange Act
means the
Securities Exchange Act of 1934, as
amended.
|
1.250
|
Separation
from Service
means a “separation from service” from the Company and
all of its Affiliates, within the meaning of Section 409A, other than for
reasons of Retirement or death.
|
1.260
|
Specified
Employee
has the meaning
set forth in Section 409A, as determined each year in accordance with
procedures established by the
Company.
|
1.270
|
Third
Party Administrator
means
an independent third party selected by the Trustee and approved by the
individual who, immediately prior to a Change of Control, was the
Company’s Chief Executive Officer or, if not so identified, the Company’s
highest ranking officer (the
“Ex-CEO”).
|
1.280
|
Trust
means the master trust established by agreement between the Company and
the Trustee, which will be a grantor
trust.
|
1.290
|
Trustee
means Wells Fargo Bank, N.A., or any successor trustee of the Trust
described in Section 1.280 of this
Plan.
|
2.005
|
Effective
as of the close of business on September 30, 2006, and notwithstanding any
other provision in this Plan (or in the Company Pension Plan) to the
contrary, individuals who first become Employees after September 30, 2006
will not be eligible to become Participants in this Plan. No
benefits shall be accrued under this Plan after September 30, 2006, except
pursuant to the Rule of 85.
|
2.010
|
This
Plan has been established by the Company as a non-qualified pension plan
for benefits earned and vested on and after January 1, 2005 for those
employees of the Company and its Affiliates whose retirement benefits
under the Company Pension Plan are, in the determination of those
benefits, reduced by reason of application of the Compensation Limit
and/or the Benefit Limitation for benefits earned and vested on and after
January 1, 2005. The Plan also provides enhanced benefits to (a)
Corporate Pilots, (b) Company Officers hired on or after January 1, 1993
but eligible for the pre-1993 formula under the Company Pension Plan, and
(c) Participants in the Company Pension Plan who deferred compensation
under the Rockwell Collins Deferred Compensation Plan and attained 85
points under the Rule of 85 after December 31, 2004. The Company
shall pay from its general assets or from the Trust, as the case may be,
to each Participant, or to the beneficiary, surviving spouse or joint
annuitant of the Participant, a benefit which is equal to the amount of
such reduction or enhancement and reduction or enhancement for benefits
payable under the Pre-2005 Plan.
|
2.015
|
In
the case of a Participant in the Company Pension Plan who deferred
compensation under the Rockwell Collins Deferred Compensation Plan and
attained 85 points under the Rule of 85 after December 31, 2004, the
amount of the Participant’s benefits under the Company Pension Plan, to
the extent reduced because of the Participant’s election to defer
compensation under the Company’s Deferred Compensation Plan, shall instead
be provided under this Plan.
|
2.020
|
If
the monthly benefit for which a Participant would have been otherwise
eligible at retirement under the Company Pension Plan is reduced because
of application of the Compensation Limit, the amount of such
reduction shall instead be provided under this Plan. For purposes of
determining the benefit payable under this Plan, a Participant’s Average
Annual Earnings shall mean the highest amount that can be determined by
averaging the Participant’s Earnings (as defined in the Company Pension
Plan) for any five (5) calendar years within the ten (10) calendar years
(or lesser period, if applicable) of active employment which immediately
precede the earliest of the dates on which the Participant retires, dies,
terminates or commences an approved absence for disability or the date of
the Company Pension Plan freeze (September 30, 2006) in accordance with
the Company Pension Plan. In determining Average Annual Earnings (as
defined in the Company Pension Plan), any calendar year in which the
Participant has less than a full year of Credited Service (as defined in
the Company Pension Plan) shall be disregarded if doing so
would provide the Participant with a greater
benefit.
|
2.025
|
In
the case of a Participant who first becomes an Employee on or after
January 1, 1993 and, prior to the earlier of his retirement from the
Company or September 30, 2006 becomes a Company Officer, the monthly
benefit payable to such Participant from this Plan shall be calculated
pursuant to the same formula as is set forth in Article IV [Normal
Retirement Benefit for Pre-1993 Participant] of the Certain Salaried or
Electronics Salaried Sub-Plans of the Company Pension Plan for
participants in that plan who were first employed by the Company prior to
January 1, 1993, as applicable.
|
2.030
|
In
the case of a C
orporate Pilot,
t
he following provisions shall apply effective as of January 1,
1989 and shall supplement benefits earned by a Corporate Pilot under the
Certain Salaried Sub-Plan.
|
(a)
|
Normal
Retirement Benefit – At any time after attaining age 58, a Corporate Pilot
may retire and receive a normal retirement benefit as hereinafter provided
based upon Earnings and Credited Service, as determined in Article IV of
the Certain Salaried Sub-Plan, to his Retirement date. The normal
retirement benefit to which a Corporate Pilot shall be entitled shall
equal the highest amount as determined under the applicable sub-section
4.040(b), (c) or (d) of the Certain Salaried Sub-Plan by 1) substituting
all references to age 62 with age 58, 2) substituting all references to
age 55 with age 50, and 3) substituting the percentage of the Social
Security Earnings Limit Offset used in sub-sections 4.040(b)(2) and
4.040(c)(2) of the Certain Salaried or Electronics Salaried Sub-Plans of
the Company Pension Plan as
follows:
|
(b)
|
Early
Retirement Benefit – At any time after attaining age 50, a Corporate Pilot
may retire and receive a reduced early retirement benefit. The early
retirement benefit to which a Corporate Pilot shall be entitled shall
equal the Normal Retirement Benefit computed as provided in Section
2.030(a) above except that the amount of such benefit shall be reduced by
½ of 1% for each complete month by which such commencement date precedes
age 58.
|
(c)
|
Supplemental
Allowance – Any Corporate Pilot who retires under this Article II shall be
deemed to be eligible for the supplemental allowance described in
sub-section 4.040(f) [Supplemental Allowance upon Regular Early
Retirement] of the Certain Salaried Sub-Plan if, at the time benefits
become payable hereunder, he is eligible to elect to commence his
retirement benefit prior to the age as of which old age benefits first
become payable under the Federal Social Security Act (as in effect at the
date of Retirement), and at the time of such termination he satisfies
either (i) or (ii) below:
|
(d)
|
Early
Retirement under Rule of 85 – Any Corporate Pilot who has attained age 50
but not age 58, and whose Credited Service plus his age total a minimum of
85 shall be deemed to be eligible to receive retirement income, payable in
accordance with sub-section 4.040(g) of the Certain Salaried sub-plan, by
substituting the percentage of the Social Security Earnings Limit Offset
used in sub-sections 4.040(g)(1)(C), 4.040(g)(2)(A)(ii) and
4.040(g)(2)(C)(i) as follows:
|
(e)
|
The
benefit provided under this Section 2.030 shall be the Actuarial
Equivalent of the benefit otherwise payable under this Section 2.030
reduced by the Actuarial Equivalent of the benefit payable to the
Corporate Pilot under the Certain Salaried Sub-Plan. All
non-qualified pension benefits for Corporate Pilots are considered earned
and vested after December 31, 2004 and are therefore payable under
this Plan and not the Pre-2005
Plan.
|
2.035
|
Subject
to the provisions of Section 2.050, for Retirement distributions that
commence prior to the Delinkage Date, any benefit payable under this Plan
shall be paid to or in respect of the Participant in the same manner and
at the same time and form that benefits become payable under the Company
Pension Plan.
|
2.040
|
For
distributions that commence on and after the Delinkage Date, the
distribution provisions of the Company Pension Plan shall have no
application to this Plan. Effective for distributions that commence
on and after the Delinkage Date, distribution to a Participant of his or
her accrued benefit hereunder shall only be made upon the earliest of the
Participant's Separation from Service, Retirement, death or, if the
Participant has elected a distribution under Section 2.050, a 409A Change
of Control. All such distributions to Participants, as well as
distributions made to beneficiaries hereunder, shall be made in the form
of lump sum payments (including the value of any supplemental allowance
determined under Section 2.030(c) above), subject to the
following:
|
|
(a)
|
Any
lump sum distribution under this Plan shall be the Actuarial Equivalent of
the benefit otherwise payable under the
Plan.
|
|
(b)
|
Effective
for distributions commencing on or after the Delinkage Date, a Participant
may make a one-time, irrevocable election to have his or her accrued
benefit (including the value of any supplemental allowance determined
under Section 2.030(c) above) under this Plan paid in (1) no more than ten
(10) equal annual installments commencing upon Retirement that are the
Actuarial Equivalent of the Participant’s accrued benefit under this Plan,
or (2) the form of an annuity described in Exhibit A to this Plan.
Such election shall only apply to accrued benefits commencing upon
Retirement and only if the Actuarial Equivalent lump sum of the
Participant’s accrued benefit upon Retirement is greater than the amount
specified under Section 402(g)(1)(B) of the Code ($15,500 for 2008).
A Participant may elect any of the forms of annuities or installments
without the consent of such election by the Participant’s spouse.
Any such election to receive installments or an annuity shall be made no
later than December 31st immediately preceding the Delinkage Date.
Except as otherwise provided in Section 6.020, such election shall be
irrevocable.
|
2.050
|
Effective
as of the Delinkage Date, notwithstanding any other provision of this Plan
to the contrary, a Participant (including, for purposes of this Section
2.050, a retiree who is currently receiving benefits under this Plan) may
elect to have the benefits due hereunder paid as an Actuarial Equivalent
lump sum in the event of the occurrence of a 409A Change of Control,
subject to the following:
|
|
(a)
|
To
be effective, the election must be made in writing and filed with the
Committee no later than the December 31st immediately preceding the
Delinkage Date.
|
|
(b)
|
Subject
to Section 6.020, such election shall be
irrevocable.
|
|
(c)
|
Lump
sum payments to be made under this Section 2.050 to Participants or, in
the case of the Participant's death, to the Participant's beneficiary
shall be made within forty-five (45) days following the 409A Change of
Control.
|
|
(d)
|
Notwithstanding
the foregoing, if the Participant does not file a timely written or
electronic election in accordance with Section 2.050(a) to receive or not
receive his or her accrued benefit under the Plan in a lump sum upon a
409A Change of Control, then such Participant’s accrued benefit under the
Plan will automatically be paid in a lump sum upon a 409A Change of
Control.
|
|
(e)
|
For
purposes of calculating the amount of the lump-sum distribution under this
Plan, Participants who have attained age 50 but not attained age 55 at the
time of a 409A Change of Control, shall be treated as if they were
separated from service by reason of Layoff-Slide. For purposes of
calculating the amount of the lump sum distribution under this Plan,
Participants, who are age 55 or older at the time of a 409A Change of
Control, shall be treated as if they were separated from service by reason
of Retirement.
|
2.060
|
Effective
as of the Delinkage Date, with respect to distributions which are payable
to a Participant or, in the event of the Participant's death, to his
beneficiary:
|
|
(a)
|
Subject
to Section 6.030, any lump sum payments shall be paid within the sixty
(60) day period following the close of the calendar year which includes
the Participant's Separation from Service, Retirement or, if applicable,
death.
|
|
(b)
|
Subject
to Section 6.030, each annual installment payable shall be paid within the
sixty (60) day period following the close of each calendar year during the
payment period, commencing with the calendar year following the year which
includes the Participant's Retirement or, if applicable,
death.
|
2.070
|
Effective
as of the Delinkage Date, notwithstanding any other provision of this Plan
to the contrary, in the event that a Participant dies prior to
commencement of distribution of his accrued benefit under the Plan, the
Participant’s accrued benefit under this Plan shall be paid in a lump sum
to his designated beneficiary within the sixty (60) day period following
the close of the calendar year which includes the Participant’s
death. For purposes of this Section 2.070, the Participant’s accrued
benefit shall be the present value of the accrued benefit payable in the
form of a pre-retirement death benefit under the Company Pension Plan
without regard to the Benefit Limitation and Compensation Limit, reduced
by the present value of the accrued benefit payable in the form of the
pre-retirement death benefit pursuant to the Company Pension Plan.
The beneficiary of such pre-retirement death benefit shall be designated
as follows:
|
|
(a)
|
A
Participant who is unmarried on the date of such beneficiary designation
may designate any person or persons as his beneficiary or beneficiaries
(both principal as well as contingent) to whom distribution under this
Plan shall be made in the event of his death prior to distribution of his
accrued benefit under the Plan. In the absence of such designation,
the succession of beneficiaries, as specified in Section 8.020 of the
Company Pension Plan shall be
controlling.
|
|
(b)
|
Notwithstanding
any other provision of this Plan, in the event that a Participant is
married on the date of his death and the Participant dies prior to
commencement of distribution of benefits under this Plan, the
Participant’s surviving spouse shall be the beneficiary of the
Participant’s benefit under this
Plan.
|
2.080
|
Notwithstanding
any other provision of this Plan to the contrary, if the Participant dies
after commencement of distribution of his accrued benefit under the Plan,
such benefit will be paid in the form elected pursuant to Section
2.040.
|
2.090
|
Notwithstanding
any other provision of this Plan to the contrary, in the event that a
Participant Separates from Service prior to the Delinkage Date and prior
to distribution of benefits under the Plan, any benefit payable under this
Plan shall be paid to or in respect of the Participant in an Actuarial
Equivalent lump sum within the sixty (60) day period following the close
of the calendar year immediately preceding the Delinkage
Date.
|
3.010
|
Any
person claiming a right to participate in this Plan, claiming a benefit
under this Plan or requesting information under this Plan shall present
the claim or request in writing to the Committee, who shall respond in
writing within ninety (90) days following the receipt of the
request. If an extension of time is required for a
hearing or other special circumstances, the claimant shall be notified and
the time limit shall be extended by an additional ninety (90)
days.
|
3.020
|
If
the claim or request is denied, the written notice of denial shall
state:
|
|
(a)
|
the
reasons for denial and specific references to pertinent Plan provisions on
which the denial is based;
|
|
(b)
|
a
description of any additional material or information required and an
explanation of why it is necessary;
and
|
|
(c)
|
an
explanation of this Plan's claim review
procedure.
|
3.030
|
A
claimant whose claim is denied (or his duly authorized representative)
may, within sixty (60) days after receipt of denial of the
claim: (a) submit a written request for review to the
Committee; (b) review pertinent documents; and (c) submit issues and
comments in writing.
|
3.040
|
A
decision on a request for review shall normally be made within
sixty (60) days after the date of such request. If an extension
of time is required for a hearing or other special circumstances, the
claimant shall be notified and the time limit shall be extended by an
additional sixty (60) days. The decision shall be in writing and
shall be final and binding on all parties
concerned.
|
4.010
|
The
Board of Directors shall have the power to amend, suspend or terminate
this Plan at any time, except that no such action shall adversely affect
rights with respect to any benefit without the consent of the person
affected. Notwithstanding the foregoing, except as otherwise
permitted by Section 409A, in the event of any termination of the Plan,
any benefit payable under the Plan shall continue to be paid in accordance
with the terms of the Plan in effect on the date of Plan
termination.
|
4.020
|
This
Plan shall be interpreted and administered by the Committee. All
interpretations and decisions by the Committee in connection with the
administration of the Plan shall be final, conclusive and binding on all
Participants and any Beneficiary or other person claiming under or through
any Participant, in the absence of clear and convincing evidence that the
Committee acted arbitrarily and capriciously; provided, that
interpretations by the Plan Administrator of those provisions of the
Company Pension Plan which are also applicable to this Plan shall be
binding on the Committee.
|
|
(a)
|
pay
all reasonable administrative expenses and fees of the Third-Party
Administrator;
|
|
(b)
|
indemnify
the Third-Party Administrator against any costs, expenses and liabilities
including, without limitation, attorney’s fees and expenses arising in
connection with the performance of such administrator hereunder, except
with respect to matters resulting from the gross negligence or willful
misconduct of the said administrator or its employees or
agents;
|
|
(c)
|
supply
full and timely information to the Third-Party Administrator on all
matters relating to the Plan, the Trust, the Participants and any
surviving spouses and contingent annuitants, the benefits of the
Participants, the date of circumstances of the Retirement, death or
Separation from Service of the Participants, and such other pertinent
information as the Third-Party Administrator may reasonably require;
and
|
|
(d)
|
upon
and after a Change of Control, the Third-Party Administrator may not be
terminated by the Company and may only be terminated (and a replacement
appointed) by the Trustee, but only with the approval of the Ex-CEO (as
defined in Section 1.270).
|
4.030
|
This
Plan is an unfunded employee benefit plan primarily for providing benefits
to an identified group of management or highly compensated employees of
the Company and is also an excess benefit plan (as defined by Section
3(36) of ERISA). This Plan is intended to be unfunded for tax
purposes and for purposes of Title I of ERISA. Participants and
their beneficiaries, estates, heirs, successors and assigns shall have no
legal or equitable rights, interest or claims in any property or
assets of the Company or its Affiliates. Any and all of the assets
of the Company and its Affiliates shall be, and remain, the general,
unpledged, unrestricted assets of the Company and its Affiliates.
The Company's and any Affiliate's sole obligation under this Plan shall be
merely that of an unfunded and unsecured promise of the Company or such
Affiliate to pay money in the
future.
|
4.040
|
Neither
a Participant nor any other person shall have any right to commute, sell,
assign, transfer, pledge, anticipate, mortgage or otherwise encumber,
transfer, hypothecate or convey, in advance of actual receipt, any
interest he may have hereunder. A Participant's rights to benefits
described herein are and shall be nonassignable and nontransferable prior
to actual distribution as provided by this Plan. Any such attempted
assignment or transfer shall be ineffective with respect to the Company
and with respect to any Affiliate, and the Company's and any Affiliate's
sole obligation shall be to distribute benefits to Participants, their
beneficiaries or estates as appropriate. No part of any
Participant's benefits hereunder shall, prior to actual payment as
provided by this Plan, be subject to seizure or sequestration for the
payment of any debts, judgments, alimony or separate maintenance owed by a
Participant or any other person, nor shall any such benefits be
transferable by operation of law in the event of a Participant's
or any other persons bankruptcy or insolvency, except as otherwise
required by law.
|
4.050
|
This
Plan shall not be deemed to constitute a contract of employment between
the Company or any of its Affiliates and any Participant, and no
Participant, beneficiary or estate shall have any right or claim against
the Company or any of its Affiliate under this Plan except as may
otherwise be specifically provided in this Plan. Nothing in this
Plan shall be deemed to give a Participant the right to be retained in the
service of the Company or any Affiliate or to interfere with the right of
the Company or any Affiliate to discipline, discharge or change the status
of a Participant at any time.
|
4.060
|
A
Participant will cooperate with the Committee by furnishing any and all
information requested by the Committee or its delegates in order to
facilitate proper administration (including distributions to and in
respect of Participants) of this Plan and by taking such other action as
may be reasonably requested by the Committee or its
delegate.
|
4.070
|
Subject
to ERISA, the provisions of this Plan shall be construed and interpreted
according to the laws of the State of Iowa. In the event that any
provision of this Plan shall be held illegal or invalid for any reason,
said illegality or invalidity shall not affect the remaining provisions of
this Plan, which shall be construed and enforced as if such illegal or
invalid provision were not included in this Plan. The provisions of
this Plan shall bind and obligate the Company and its Affiliates and their
successors, including, but not limited to, any corporate or other business
entity which shall, whether by merger, consolidation, purchase or
otherwise, acquire all or substantially all of the business and assets of
the Company or its Affiliates and their successors of any such company or
other business entity.
|
4.080
|
All
words used in this Plan in the masculine gender shall be construed as if
used in the feminine gender where appropriate. All words used in
this Plan in the singular or plural shall be construed as if used in the
plural or singular where
appropriate.
|
5.010
|
Establishment
of the Trust
. The Company shall establish the Trust (which may be
referred to herein as a “Rabbi Trust”). The Trust shall become
irrevocable upon a Change of Control (to the extent not then
irrevocable). Notwithstanding any other provision of this Plan to
the contrary, the Trust shall not become irrevocable or funded with
respect to this Plan upon the occurrence of an event described in Section
1.030(d). After the Trust has become irrevocable with respect to the
Plan, except as otherwise provided in Section 12 of the Trust, the Trust
shall remain irrevocable with respect to the Plan until all benefits due
under this Plan and benefits and account balances due to any participants
and beneficiaries under any other plan covered by the Trust have been paid
in full. Upon establishment of the Trust, the Company shall provide
for funding of the Trust in accordance with the terms of the
Trust.
|
5.020
|
Interrelationship
of the Plan and the Trust
. The provisions of the Plan and any
Participant’s Participation Agreement Form will govern the rights of a
Participant to receive distributions pursuant to the Plan. The
provisions of the Trust will govern the rights of the Company and its
Affiliates, Participants and the creditors of the Company and its
Affiliates to the assets transferred to the Trust. The Company and
each of its Affiliates employing any Participant will at all times remain
liable to carry out their obligations under the
Plan.
|
5.030
|
Distributions
From the Trust
. The Company’s and each of its Affiliate's
obligations under the Plan may be satisfied with Trust assets distributed
pursuant to the terms of the Trust, and any such distribution will reduce
their obligations under this Plan.
|
5.040
|
Rabbi
Trust
. The Rabbi Trust
shall:
|
|
(a)
|
be
a non-qualified grantor trust which satisfies in all material respects the
requirement of Revenue Procedure 92-64, 1992-2 CB 122 (or any successor
Revenue Procedure or other applicable
authority);
|
|
(b)
|
be
irrevocable upon a 409A Change of Control, to the extent not then
irrevocable (other than an event described in Section 1.030(d));
and
|
|
(c)
|
provide
that any successor trustee shall be a bank trust department or other party
that may be granted corporate trustee powers under state
law.
|
6.010
|
Section
409A Generally
. This Plan is
intended to comply with Section 409A. Notwithstanding any other
provision of this Plan
to the contrary, the Company makes no
representation that this Plan or any benefit payable under this Plan will
be exempt from or comply with Section 409A and makes no undertaking to
preclude Section 409A from applying to this
Plan.
|
6.020
|
Changes
in Elections
. Effective as
of the Delinkage Date, n
otwithstanding any other provision of this
Plan to the contrary, once an election is made pursuant to this Plan it
shall be irrevocable unless all of the following conditions are
met:
|
|
(a)
|
the
election to change the time or form of payment will not become effective
until the date that is one year after the date on which the election to
make the change is made;
|
|
(b)
|
except
with respect to any payment to be made upon the death of a Participant,
the form of payment, as changed, will defer payment of the Participant’s
accrued benefit until at least five (5) years later than the date that
payment of such Participant’s accrued benefit would otherwise have been
made under this Plan; and
|
|
(c)
|
with
respect to a payment that is to be made upon a fixed date or schedule of
dates, the election to change the form of payment is made no less than
twelve (12) months before the date that payment of the accrued benefit was
otherwise scheduled to be paid.
|
6.030
|
Six
Month Wait for Specified Employees
. Effective as of the
Delinkage Date, notwithstanding any other provision of this Plan to the
contrary, to the extent that any accrued benefit payable under the Plan
constitute an amount payable upon Separation from Service or Retirement to
any Participant under the Plan who is deemed to be a Specified Employee,
then such amount will not be paid during the six (6) month period
following such Separation from Service or Retirement. If the
provisions of this Section 6.030 apply to a Participant who incurs a
Separation from Service or Retirement, within the first six (6) months of
the calendar year, then such amount will be paid within the first sixty
(60) days following the close of the calendar year which includes the
Participant’s Separation from Service or Retirement. If the
provisions of this Section 6.030 apply to a Participant who incurs a
Separation from Service or Retirement within the last six (6) months of
the calendar year, then such amount will be paid within the first sixty
(60) days after June 30th of the calendar year following the year in which
includes the Participant’s Separation from Service or
Retirement.
|
(a)
|
Participants Without a
Spouse
. The form of annuity payable to a Participant who does
not have a spouse, and who does not otherwise elect shall be paid in the
form of a single life annuity with monthly installments for the
Participant’s life.
|
(b)
|
Participants With a
Spouse
. The forms of annuities available to participant who
is married on his annuity starting date will be a single life annuity with
monthly installments for the Participant’s life and joint annuities with
60%, 75% or 100% continuation options. The monthly payments to a
Participant shall be reduced by five percent (5%) if the Participant
selects the (60%) continuation option, by percent (10%) if the Participant
selects the seventy-five percent (75%) continuation option, or by fifteen
percent (15%) if the Participant selects the one hundred percent (100%)
continuation option. The amount of the monthly benefit
payable to such surviving spouse shall equal the percentage selected of
the reduced monthly benefit payable to such
Participant.
|
1.
|
I
have reviewed the quarterly report on Form 10-Q for the quarter ended
December 31, 2010 of Rockwell Collins,
Inc.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
c)
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting;
|
5.
|
The
registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
Date:
|
January
28, 2011
|
/s/ Clayton M. Jones
|
|
Clayton
M. Jones
|
|||
Chairman,
President and
|
|||
Chief
Executive Officer
|
1.
|
I
have reviewed the quarterly report on Form 10-Q for the quarter ended
December 31, 2010 of Rockwell Collins,
Inc.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
c)
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting;
|
5.
|
The
registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
Date:
|
January
28, 2011
|
/s/ Patrick E. Allen
|
|
Patrick
E. Allen
|
|||
Senior
Vice President and
|
|||
Chief
Financial Officer
|
(1)
|
The
Company’s Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934;
and
|
(2)
|
The
information contained in the Form 10-Q fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
Date:
|
January
28, 2011
|
/s/ Clayton M. Jones
|
|
Clayton
M. Jones
|
|||
Chairman,
President and
|
|||
Chief
Executive Officer
|
(1)
|
The
Company’s Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934;
and
|
(2)
|
The
information contained in the Form 10-Q fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
Date:
|
January
28, 2011
|
/s/ Patrick E. Allen
|
|
Patrick
E. Allen
|
|||
Senior
Vice President and
|
|||
Chief
Financial Officer
|