ROCKWELL AUTOMATION INC (Form: 10-Q, Received: 02/06/2008 12:23:54)

Date of Grant

Number of Shares

Exercise Price

Total Purchase Price

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934


For the Quarterly Period Ended		December 31, 2007


Commission file number		1-12383

Rockwell Automation, Inc.

(Exact name of registrant as specified in its charter)

Delaware

25-1797617

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

1201 South Second Street, Milwaukee, Wisconsin 53204

(Address of principal executive offices) (Zip Code)


Registrant's telephone number,
including area code		(414) 382-2000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer þ Accelerated Filer ¨ Non-accelerated Filer ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

148,361,042 shares of registrant's Common Stock, $1.00 par value, were outstanding on December 31, 2007.

ROCKWELL AUTOMATION, INC.

INDEX


			Page No.
PART I.	FINANCIAL INFORMATION

	Item 1.	Condensed Consolidated Financial Statements:

		Condensed Consolidated Balance Sheet—December 31, 2007 and September 30, 2007	2

		Condensed Consolidated Statement of Operations—Three Months Ended December 31, 2007 and 2006	3

		Condensed Consolidated Statement of Cash Flows—Three Months Ended December 31, 2007 and 2006	4

		Notes to Condensed Consolidated Financial Statements	5

		Report of Independent Registered Public Accounting Firm	19

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

	Item 4.	Controls and Procedures	31

PART II.	OTHER INFORMATION

	Item 1.	Legal Proceedings	31

	Item 1A.	Risk Factors	33

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

	Item 6.	Exhibits	35

Signatures			37

PART I. FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements

ROCKWELL AUTOMATION, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)

(in millions)


	December 31, 2007			September 30, 2007
ASSETS
Current assets:
Cash and cash equivalents	$	867.0		$	624.2
Receivables		937.5			927.7
Inventories		554.6			504.7
Deferred income taxes		176.3			170.2
Other current assets		131.7			155.2

Total current assets		2,667.1			2,382.0

Property, net		510.2			510.3
Goodwill		895.1			858.5
Other intangible assets, net		261.1			243.4
Deferred income taxes		38.2			25.3
Prepaid pension		392.3			384.3
Other assets		177.0			142.0


TOTAL	$	4,941.0		$	4,545.8


LIABILITIES AND SHAREOWNERS’ EQUITY
Current liabilities:
Short-term debt	$	0.1		$	173.2
Current portion of long-term debt		349.8			348.2
Accounts payable		455.6			498.5
Compensation and benefits		162.1			198.4
Income taxes payable		98.6			79.8
Other current liabilities		475.3			446.4

Total current liabilities		1,541.5			1,744.5

Long-term debt		903.9			405.7
Retirement benefits		408.2			401.4
Other liabilities		303.6			251.4

Commitments and contingent liabilities (Note 12)

Shareowners’ equity:
Common stock (shares issued: 216.4)		216.4			216.4
Additional paid-in capital		1,253.1			1,247.5
Retained earnings		4,197.9			4,098.1
Accumulated other comprehensive loss		(158.4	)		(169.7	)
Common stock in treasury, at cost (shares held: December 31, 2007, 68.0; September 30, 2007, 67.0)		(3,725.2	)		(3,649.5	)

Total shareowners’ equity		1,783.8			1,742.8


TOTAL	$	4,941.0		$	4,545.8

See Notes to Condensed Consolidated Financial Statements.

ROCKWELL AUTOMATION, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

(in millions, except per share amounts)


	Three Months Ended December 31,
	2007			2006
Sales
Products and solutions	$	1,207.2		$	1,036.3
Services		124.7			110.0

		1,331.9			1,146.3

Cost of Sales
Products and solutions		(671.8	)		(571.7	)
Services		(84.6	)		(77.0	)

		(756.4	)		(648.7	)

Gross profit		575.5			497.6

Selling, general and administrative expenses		(348.6	)		(293.1	)
Other income		10.1			0.8
Interest expense		(18.0	)		(18.4	)


Income from continuing operations before income taxes		219.0			186.9
Income tax provision		(62.4	)		(56.0	)


Income from continuing operations		156.6			130.9

Income from discontinued operations
Income from discontinued operating activities		—			34.2
Income tax benefit on divestiture (Note 14)		—			264.0

Income from discontinued operations		—			298.2


Net income	$	156.6		$	429.1


Basic earnings per share:

Continuing operations	$	1.05		$	0.78
Discontinued operations		—			1.77

Net income	$	1.05		$	2.55


Diluted earnings per share:

Continuing operations	$	1.04		$	0.76
Discontinued operations		—			1.74

Net income	$	1.04		$	2.50


Cash dividends per share	$	0.29		$	0.29


Weighted average outstanding shares:

Basic		148.7			168.6

Diluted		151.0			171.4

See Notes to Condensed Consolidated Financial Statements.

ROCKWELL AUTOMATION, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

(in millions)


	Three Months Ended December 31,
	2007			2006
Continuing Operations:
Operating Activities:
Net income	$	156.6		$	429.1
Income from discontinued operations		—			298.2

Income from continuing operations		156.6			130.9

Adjustments to arrive at cash provided by operating activities:
Depreciation		23.1			23.3
Amortization of intangible assets		8.2			5.2
Share-based compensation expense		6.8			7.0
Retirement benefits expense		11.3			11.2
Pension trust contributions		(9.3	)		(14.0	)
Net gain on disposition of securities and property		(6.1	)		(0.2	)
Income tax benefit from the exercise of stock options		0.2			0.3
Excess income tax benefit from the exercise of stock options		(2.9	)		(4.7	)
Changes in assets and liabilities, excluding effects of foreign currency adjustments:
Receivables		1.0			(35.7	)
Inventories		(48.1	)		(37.3	)
Accounts payable		(43.4	)		(14.6	)
Compensation and benefits		(37.2	)		(37.6	)
Income taxes		24.5			54.8
Other assets and liabilities		16.8			9.6

Cash Provided by Operating Activities		101.5			98.2

Investing Activities:
Capital expenditures		(26.3	)		(29.2	)
Acquisition of business, net of cash acquired		(61.6	)		—
Proceeds from sale of securities and property		36.3			2.1

Cash Used for Investing Activities		(51.6	)		(27.1	)

Financing Activities:
Net (repayments) issuance of short-term debt		(173.0	)		314.2
Issuance of long-term debt, net of financing costs		494.3			—
Repayments of long-term debt		(1.3	)		—
Cash dividends		(43.3	)		(49.2	)
Purchases of treasury stock		(97.5	)		(350.7	)
Proceeds from the exercise of stock options		9.6			11.9
Excess income tax benefit from the exercise of stock options		2.9			4.7
Other financing activities		(0.1	)		(0.2	)

Cash Provided by (Used for) Financing Activities		191.6			(69.3	)


Effect of exchange rate changes on cash		6.9			5.9

Cash Provided by Continuing Operations		248.4			7.7

Discontinued Operations:
Cash (Used for) Provided by Discontinued Operating Activities		(5.6	)		22.5
Cash Used for Discontinued Investing Activities		—			(4.0	)
Cash Used for Discontinued Financing Activities		—			(0.8	)

Cash (Used for) Provided by Discontinued Operations		(5.6	)		17.7

Increase in Cash and Cash Equivalents		242.8			25.4
Cash and Cash Equivalents at Beginning of Period		624.2			408.1

Cash and Cash Equivalents at End of Period	$	867.0		$	433.5

See Notes to Condensed Consolidated Financial Statements.

ROCKWELL AUTOMATION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.	Basis of Presentation and Accounting Policies

In the opinion of management of Rockwell Automation, Inc. (the Company or Rockwell Automation), the unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting solely of adjustments of a normal recurring nature, necessary to present fairly the financial position, results of operations, and cash flows for the periods presented. These statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended September 30, 2007. The results of operations for the three-month period ended December 31, 2007 are not necessarily indicative of the results for the full year. All date references to years and quarters herein refer to our fiscal year and fiscal quarter unless otherwise stated.

Revenue

Product and solution revenues consist of industrial automation power, control, information and custom-engineered hardware and software products and systems. Service revenues include multi-vendor customer technical support and repair, asset management and optimization consulting and training.

Cash and Cash Equivalents

Cash and cash equivalents include time deposits and certificates of deposit with original maturities of three months or less at the time of purchase.

Receivables

Receivables are stated net of allowances for doubtful accounts of $14.1 million at December 31, 2007 and $12.4 million at September 30, 2007. In addition, receivables are stated net of an allowance for certain customer returns, rebates and incentives of $9.1 million at December 31, 2007 and $8.1 million at September 30, 2007.

Income Taxes

At the end of each interim reporting period, we estimate a base effective tax rate, which is the effective tax rate that we expect for the full fiscal year based on our most recent forecast of pretax income, permanent book and tax differences and global tax planning strategies. We use this base rate to provide for income taxes on a year-to-date basis, excluding the effect of significant unusual or extraordinary items or items that are reported net of their related tax effects. We recognize the tax effect of significant unusual or extraordinary items or items that are reported net of their tax effects in the period in which they are realizable. The Financial Accounting Standards Board (FASB) issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), which became effective for us on October 1, 2007. See Note 14 for further details regarding income taxes.

Earnings Per Share

We present basic and diluted earnings per share (EPS) amounts. Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during the applicable period. Diluted EPS amounts are based upon the weighted average number of common and common equivalent shares outstanding during the applicable period. The difference between basic and diluted EPS is attributable to share-based compensation awards. We use the treasury stock method to calculate the effect of outstanding share-based compensation awards, which requires us to compute total employee proceeds as the sum of (a) the amount the employee must pay upon exercise of the award, (b) the amount of unearned share-based compensation costs attributed to future services and (c) the amount of tax benefits, if any, that would be credited to additional paid-in capital assuming exercise of the award. Share-based compensation awards for which the total employee proceeds exceed the average market price over the applicable period have an antidilutive effect on EPS, and accordingly, we exclude them from the calculation of diluted EPS. For the three months ended December 31, 2007, share-based compensation awards for 2.3 million shares were excluded from the diluted EPS calculation because they were antidilutive. For the three months ended December 31, 2006, share-based compensation awards for 2.1 million shares were excluded from the diluted EPS calculation because they were antidilutive.

ROCKWELL AUTOMATION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.	Basis of Presentation and Accounting Policies—(Continued)

The following table reconciles basic weighted average outstanding shares to diluted weighted average outstanding shares (in millions):


	Three Months Ended December 31,
	2007	2006
Weighted average outstanding shares
Basic weighted average outstanding shares	148.7	168.6
Effect of dilutive securities
Stock options	2.2	2.7
Restricted stock	0.1	0.1

Diluted weighted average outstanding shares	151.0	171.4

Non-Cash Financing Activities

During the quarter ended December 31, 2007, we repurchased 86,000 shares of our common stock for $6.0 million that did not settle until January 2008. In September 2007, we repurchased 106,893 shares of our common stock for $7.5 million that did not settle until October 2007. These outstanding purchases were recorded in accounts payable at December 31, 2007 and September 30, 2007.

In December 2007, we issued an aggregate of $500 million principal amount of our 5.65% notes due 2017 and 6.25% debentures due 2037 at a discount of $1.9 million and we incurred $3.8 million of debt issuance costs. These amounts are recorded in long-term debt and other assets, respectively, in our Condensed Consolidated Balance Sheet and will be amortized over the respective lives of the issuances.

Recent Accounting Pronouncements

Statement of Financial Accounting Standard (SFAS) No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R) (SFAS 158), became effective for us as of September 30, 2007. SFAS 158 required us to recognize an asset or liability in our consolidated balance sheet reflecting the funded status of our pension and other postretirement benefit plans, with current-year changes in the funded status recognized in shareowners’ equity. SFAS 158 did not change the existing criteria for measuring periodic benefit costs, plan assets or benefit obligations. Additionally, SFAS 158 will require us to measure the funded status as of the date of our annual audited Consolidated Balance Sheet by September 30, 2009.

In December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business Combinations (SFAS 141R). SFAS 141R requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. SFAS 141R also requires the acquirer to recognize and measure the goodwill acquired in a business combination or a gain from a bargain purchase and prescribes how to evaluate the nature and financial effects of the business combination. It also provides guidance for the accounting of pre-acquisition gain and loss contingencies and acquisition-related transaction costs. SFAS 141R is effective for us beginning in 2010. We are evaluating the statement to determine the effect on our financial statements and related disclosures.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements-an amendment of ARB No. 51 (SFAS 160). SFAS 160 amends ARB 51 to establish accounting and reporting standards for the noncontrolling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements and establishes a single method of accounting for changes in a parent’s ownership interest in a subsidiary that does not result in deconsolidation. SFAS 160 is effective for us in 2010. We are evaluating the statement to determine the effect on our financial statements and related disclosures.

ROCKWELL AUTOMATION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.	Basis of Presentation and Accounting Policies – (Continued)

Recent Accounting Pronouncements – (Continued)

In June 2007, the FASB ratified Emerging Issues Task Force Issue No. 06-11, Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards (EITF 06-11). EITF 06-11 specifies how companies should recognize the income tax benefit received on dividends that are (a) paid to employees holding equity-classified nonvested shares, equity-classified nonvested share units, or equity-classified outstanding share options and (b) charged to retained earnings under SFAS 123(R). EITF 06-11 is effective for us beginning in 2009. We do not believe EITF 06-11 will have a material effect on our financial statements and related disclosures.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS 159). SFAS 159 permits companies to choose to measure at fair value many financial instruments and certain other items that are not currently required to be measured at fair value. SFAS 159 is effective for us beginning in 2009. We do not believe SFAS 159 will have a material effect on our financial statements and related disclosures.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. It also establishes a fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability. SFAS 157 will be effective for us beginning in fiscal 2009. We do not believe SFAS 157 will have a material effect on our financial statements; we will expand our disclosures in accordance with the requirements of SFAS 157 upon adoption.

ROCKWELL AUTOMATION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2.	Share-Based Compensation

We recognized $6.8 million and $7.0 million in share-based compensation expense in income from continuing operations before income taxes during the three-months ended December 31, 2007 and 2006, respectively. Our annual grant of share-based compensation takes place during the first quarter of each fiscal year. The number of shares granted to all employees and the weighted average fair value per share during the periods presented was (in thousands except per share amounts):


	Three months ended December 31,
	2007			2006
	Grants	Wtd. Avg. Share Fair Value		Grants	Wtd. Avg. Share Fair Value
Stock options	1,533	$	17.68	1,103	$	20.03
Performance shares	122		75.61	99		72.24
Restricted stock awards	60		67.83	49		63.11

Total shares granted	1,715		23.56	1,251		25.87

3.	Acquisitions and Divestitures

Acquisitions

In November 2007, our Architecture & Software segment acquired Pavilion Technologies, Inc., a privately held company that is a recognized leader in advanced process control, production optimization and environmental compliance solutions for process and hybrid industries. We expect to complete the final purchase price allocation for this acquisition by the end of fiscal 2008 when we finalize the valuations of the intangible assets acquired.

In fiscal 2007, our Control Products & Solutions segment acquired Industrial Control Services Group Limited, which does business as ICS Triplex, and ProsCon Holdings Ltd. (ProsCon). The aggregate purchase price of these two acquisitions was approximately $268.8 million in cash.

ICS Triplex, headquartered in the United Kingdom and acquired in July 2007, is a leading global supplier of critical control and safety solutions to process industries. It develops, delivers and maintains advanced products and solutions for high availability, fault-tolerant applications in process industry segments worldwide. It serves primarily the oil and gas, chemicals and power generation industries.

ProsCon is a process solutions systems integrator headquartered in Ireland that we acquired in February 2007. Its areas of expertise include process technology and control systems and information technology, and it serves customers primarily in the pharmaceutical and biotechnology industries.

ROCKWELL AUTOMATION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.	Acquisitions and Divestitures—(Continued)

We recorded intangible assets of $126.0 million resulting from the preliminary purchase price allocations of the ICS Triplex and ProsCon acquisitions, which are pending the finalization of the intangible asset valuation and other matters.

The results of operations of the acquired businesses have been included in our Condensed Consolidated Statement of Operations since the dates of acquisition. Pro forma financial information and allocation of the purchase price is not presented as the individual effects of these acquisitions are not material to our results of operations and financial position.

Divestitures

On January 31, 2007, we divested our Dodge mechanical and Reliance Electric motors and motor repair services businesses to Baldor Electric Company (Baldor). These were the principal businesses of our former Power Systems operating segment. See Note 13 for more information.

4.	Inventories

Inventories consist of (in millions):


	December 31, 2007		September 30, 2007
Finished goods	$	197.4	$	184.9
Work in process		147.7		130.4
Raw materials, parts, and supplies		209.5		189.4

Inventories	$	554.6	$	504.7

We report inventories net of the allowance for excess and obsolete inventory of $39.2 million at December 31, 2007 and $36.3 million at September 30, 2007.

5.	Property

Property consists of (in millions):


	December 31, 2007			September 30, 2007
Land	$	7.6		$	7.5
Buildings and improvements		263.4			255.6
Machinery and equipment		1,111.7			1,097.3
Internal use software		256.5			241.7
Construction in progress		50.5			63.0

Total		1,689.7			1,665.1
Less accumulated depreciation		(1,179.5	)		(1,154.8	)

Property, net	$	510.2		$	510.3

ROCKWELL AUTOMATION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

6.	Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill for the three months ended December 31, 2007 are (in millions):


	Architecture & Software			Control Products & Solutions		Total
Balance as of September 30, 2007	$	335.1		$	523.4	$	858.5
Acquisition of business		37.4			—		37.4
Translation and other		(1.3	)		0.5		(0.8	)

Balance as of December 31, 2007	$	371.2		$	523.9	$	895.1

Other intangible assets consist of (in millions):


	December 31, 2007
	Carrying Amount		Accumulated Amortization		Net
Amortized intangible assets:
Computer software products	$	114.8	$	66.9	$	47.9
Customer relationships		57.4		3.1		54.3
Technology		64.9		26.9		38.0
Other		78.3		30.3		48.0

Total amortized intangible assets		315.4		127.2		188.2
Intangible assets not subject to amortization		72.9		—		72.9

Total	$	388.3	$	127.2	$	261.1


	September 30, 2007
	Carrying Amount		Accumulated Amortization		Net
Amortized intangible assets:
Computer software products	$	111.2	$	63.5	$	47.7
Customer relationships		58.0		2.1		55.9
Technology		65.4		25.0		40.4
Other		52.6		26.9		25.7

Total amortized intangible assets		287.2		117.5		169.7
Intangible assets not subject to amortization		73.7		—		73.7

Total	$	360.9	$	117.5	$	243.4

The Allen-Bradley ^® and ICS Triplex ^TM trademarks have been determined to have an indefinite life, and therefore are not subject to amortization.

Estimated amortization expense is $37.6 million in 2008, $28.8 million in 2009, $20.5 million in 2010, $17.1 million in 2011 and $15.3 million in 2012.

We perform the annual evaluation of our goodwill and indefinite life intangible assets for impairment as required by SFAS No. 142, Goodwill and Other Intangible Assets , during the second quarter of each year.

ROCKWELL AUTOMATION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

7.	Other Current Liabilities

Other current liabilities consist of (in millions):


	December 31, 2007		September 30, 2007
Advance payments from customers and deferred revenue	$	151.2	$	121.5
Customer returns, rebates and incentives		120.5		120.5
Unrealized losses on foreign exchange contracts		35.8		38.2
Product warranty obligations		34.1		34.9
Taxes other than income taxes		36.3		42.2
Accrued interest		24.9		10.2
Special charges		20.9		19.6
Other		51.6		59.3

Other current liabilities	$	475.3	$	446.4

8.	Product Warranty Obligations

We record a liability for product warranty obligations at the time of sale to a customer based upon historical warranty experience. Most of our products are covered under a warranty period that runs for twelve months from either the date of sale or from installation to an end-user or OEM customer. We also record a liability for specific warranty matters when they become probable and reasonably estimable. Our product warranty obligations are included in other current liabilities in the Condensed Consolidated Balance Sheet.

Changes in the product warranty obligations for the three months ended December 31, 2007 and 2006 are (in millions):


	Three Months Ended December 31,
	2007			2006
Balance at beginning of period	$	34.9		$	37.1
Warranties recorded at time of sale		9.8			11.5
Adjustments to pre-existing warranties		(0.2	)		(0.1	)
Payments		(10.4	)		(10.4	)

Balance at end of period	$	34.1		$	38.1

9.	Long-term and Short-term Debt

Long-term debt consists of (in millions):


	December 31, 2007			September 30, 2007
6.15% notes, payable in 2008	$	349.8		$	348.2
5.65% notes, payable in 2017		250.0			—
6.70% debentures, payable in 2028		250.0			250.0
6.25% debentures, payable in 2037		250.0			—
5.20% debentures, payable in 2098		200.0			200.0
Unamortized discount and other		(46.1	)		(44.3	)

Total		1,253.7			753.9
Less current portion		(349.8	)		(348.2	)

Long-term debt	$	903.9		$	405.7

ROCKWELL AUTOMATION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

9.	Long-term and Short-term Debt—(Continued)

In December 2007, we issued an aggregate of $500 million principal amount of our 5.65% notes due 2017 and 6.25% debentures due 2037. The debt offering yielded approximately $494.3 million of proceeds, which were used to repay at maturity our 6.15% notes due January 15, 2008 and for general corporate purposes.

We issued an aggregate of $800 million principal amount of our 6.15% notes, 6.70% debentures and 5.20% debentures in January 1998. The debt offering yielded approximately $750.0 million of proceeds. We issued the 5.20% debentures at a discount, and the 6.15% notes and 6.70% debentures at par.

In September 2002, we entered into an interest rate swap contract (the Swap) that effectively converted our $350.0 million aggregate principal amount of 6.15% notes, payable in 2008, to floating rate debt based on six-month LIBOR. The floating rate was 7.80 percent at December 31, 2007 and September 30, 2007. As permitted by SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS 133), as amended, we have designated the Swap as a fair value hedge. Accordingly, the fair value of the Swap was recorded in other liabilities in the Condensed Consolidated Balance Sheet with a corresponding adjustment to the carrying value of the underlying debt at December 31, 2007 and September 30, 2007. The fair value of the Swap, based upon quoted market prices for contracts with similar maturities, was a liability of $0.2 million at December 31, 2007 and a liability of $1.8 million at September 30, 2007. The swap matured on January 15, 2008.

On October 26, 2004, we entered into a five-year $600.0 million unsecured revolving credit facility. Our $600.0 million credit facility remains in effect and we have not drawn down under it at December 31, 2007 or September 30, 2007. Borrowings under our credit facility bear interest based on short-term money market rates in effect during the period the borrowings are outstanding. The terms of our credit facility contain covenants under which we would be in default if our debt-to-total-capital ratio was to exceed 60 percent. We were in compliance with all covenants under our credit facility at December 31, 2007 and September 30, 2007. In addition to our $600.0 million credit facility, short-term unsecured credit facilities of approximately $185.4 million at December 31, 2007 were available to foreign subsidiaries. There were no significant commitment fees or compensating balance requirements under any of our credit facilities. Borrowings under our credit facilities during the three months ended December 31, 2007 and 2006 were not significant.

Our short-term debt obligations primarily relate to commercial paper borrowings. We had no commercial paper borrowings outstanding at December 31, 2007 and $173.0 million of commercial paper borrowings outstanding at September 30, 2007. At September 30, 2007, the weighted average interest rate and maturity period of the commercial paper outstanding were 5.1 percent and three days, respectively.

ROCKWELL AUTOMATION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

10.

Retirement Benefits

The components of net periodic benefit cost in income from continuing operations are (in millions):


	Pension Benefits
	Three Months Ended December 31,
	2007			2006
Service cost	$	14.5		$	13.3
Interest cost		37.4			29.0
Expected return on plan assets		(48.3	)		(36.9	)
Amortization:
Prior service cost		(1.1	)		(1.2	)
Net actuarial loss		4.9			5.9

Net periodic benefit cost	$	7.4		$	10.1


	Other Postretirement Benefits
	Three Months Ended December 31,
	2007			2006
Service cost	$	1.0		$	0.8
Interest cost		3.4			2.4
Amortization:
Prior service cost		(3.6	)		(4.1	)
Net actuarial loss		3.1			2.0

Net periodic benefit cost	$	3.9		$	1.1

Excluded from these net periodic benefit cost tables but included in income from discontinued operations in the Condensed Consolidated Statement of Operations is pre-tax pension benefit cost of $1.4 million and pre-tax other postretirement benefit cost of $2.0 million for the three months ended December 31, 2006 related to our Dodge mechanical and Reliance Electric motors and motor repair services businesses. In connection with the sale of these businesses and included in these net periodic benefit cost tables, we retained the pension liability related to eligible Power Systems participants in our U.S. Plan and Canada Salary Plan and the other postretirement benefit liability for eligible U.S. non-union and Canada Salary retirees as of the date of the sale, which will result in ongoing net periodic benefit cost for us. Pension liabilities for our Canada Hourly Plan and Mexico Dodge Plan, as well as other postretirement liabilities, including for U.S. union active and retiree participants, have been transferred with the sale of these businesses.

In the first three months of fiscal 2007, we made a voluntary contribution of $8.0 million to our U.S. qualified pension plan trust, which increased our prepaid pension asset in the Condensed Consolidated Balance Sheet.

ROCKWELL AUTOMATION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

11.

Comprehensive Income

Comprehensive income consists of (in millions):


	Three Months Ended December 31,
	2007			2006
Net income	$	156.6		$	429.1
Other comprehensive income:
Unrecognized pension and postretirement benefit plan liabilities		1.6			—
Currency translation adjustments		11.5			21.2
Net unrealized losses on cash flow hedges		(0.3	)		(4.3	)
Other		(1.5	)		(0.4	)

Other comprehensive income		11.3			16.5

Comprehensive income	$	167.9		$	445.6

12.

Commitments and Contingent Liabilities

Various lawsuits, claims and proceedings have been or may be instituted or asserted against us relating to the conduct of our business, including those pertaining to product liability, safety and health, intellectual property, employment and contract matters. Although the outcome of litigation cannot be predicted with certainty and some lawsuits, claims or proceedings may be disposed of unfavorably to us, we believe the disposition of matters that are pending or have been asserted will not have a material adverse effect on our business or financial condition.

We (including our subsidiaries) have been named as a defendant in lawsuits alleging personal injury as a result of exposure to asbestos that was used in certain components of our products many years ago. Currently there are thousands of claimants in lawsuits that name us as defendants, together with hundreds of other companies. In some cases, the claims involve products from divested businesses, and we are indemnified for most of the costs. However, we have agreed to defend and indemnify asbestos claims associated with products manufactured or sold by our Dodge mechanical and Reliance Electric motors and motor repair services businesses prior to their divestiture by us, which occurred on January 31, 2007. We also are responsible for half of the costs and liabilities associated with asbestos cases against Rockwell International Corporation’s (RIC’s) divested measurement and flow control business. But in all cases, for those claimants who do show that they worked with our products or products of divested businesses for which we are responsible, we nevertheless believe we have meritorious defenses, in substantial part due to the integrity of the products, the encapsulated nature of any asbestos-containing components, and the lack of any impairing medical condition on the part of many claimants. We defend those cases vigorously. Historically, we have been dismissed from the vast majority of these claims with no payment to claimants.

We have maintained insurance coverage that we believe covers indemnity and defense costs, over and above self-insured retentions, for most of these claims. We initiated litigation in the Milwaukee County Circuit Court on February 12, 2004 to enforce the insurance policies against Nationwide Indemnity Company and Kemper Insurance, the insurance carriers that provided liability insurance coverage to our former Allen-Bradley subsidiary. As a result, the insurance carriers have paid some past defense and indemnity costs and have agreed to pay the substantial majority of future defense and indemnity costs for Allen-Bradley asbestos claims, subject to policy limits. If either carrier becomes insolvent or the policy limits of either carrier are exhausted, our share of future defense and indemnity costs may increase. However, coverage under excess policies may be available to pay some or all of these costs.

The uncertainties of asbestos claim litigation and the long term solvency of our insurance carriers make it difficult to predict accurately the ultimate outcome of asbestos claims. That uncertainty is increased by the possibility of adverse rulings or new legislation affecting asbestos claim litigation or the settlement process. Subject to these uncertainties and based on our experience defending asbestos claims, we do not believe these lawsuits will have a material adverse effect on our financial condition.

ROCKWELL AUTOMATION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

12.

Commitments and Contingent Liabilities—(Continued)

In connection with the divestiture of our former aerospace and defense businesses (the A&D Business) to The Boeing Company (Boeing), we agreed to indemnify Boeing for certain matters related to operations of the A&D Business for periods prior to the divestiture. In connection with the spinoffs of our former automotive component systems business, semiconductor systems business and Rockwell Collins avionics and communications business, the spun-off companies have agreed to indemnify us for substantially all contingent liabilities related to the respective businesses, including environmental and intellectual property matters.

In connection with the sale of our Dodge mechanical and Reliance Electric motors and motor repair services businesses, we agreed to indemnify Baldor for costs and damages related to certain legal, legacy environmental and asbestos matters of these businesses arising before January 31, 2007, for which the maximum exposure would be capped at the purchase price.

We have, from time to time, divested certain of our businesses. In connection with such divestitures, lawsuits, claims and proceedings may be instituted or asserted against us related to the period that we owned the businesses.

In many countries we provide a limited intellectual property indemnity as part of our terms and conditions of sale. We also at times provide limited intellectual property indemnities in other contracts with third parties, such as contracts concerning: the development and manufacture of our products; the divestiture of businesses; and the licensing of intellectual property. Due to the number of agreements containing such provisions, we are unable to estimate the maximum potential future payments. However, we believe that future payments, if any, would not be material to our business or financial condition.

ROCKWELL AUTOMATION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

13.

Discontinued Operations

The following is a summary of the composition of income from discontinued operations included in the Condensed Consolidated Statement of Operations for the three months ended December 31, 2006 (in millions):


Power Systems net income from operations	$	34.8
Rocky Flats net loss from operations		(0.6	)
Income tax benefit on divestiture (Note 14)		264.0

Income from discontinued operations	$	298.2

Power Systems

On January 31, 2007, we divested our Dodge mechanical and Reliance Electric motors and motor repair services businesses to Baldor. These businesses are reported as a discontinued operation in the Condensed Consolidated Financial Statements for all periods presented.

Rocky Flats

During the quarter ended December 31, 2006, we incurred $1.0 million ($0.6 million after-tax) of legal fees associated with the former Rockwell International Corporation’s former operation of the Rocky Flats facility for the U.S. Department of Energy (DOE). We paid $6.2 million to the DOE during the quarter ended December 31, 2007 related to this facility.

Summarized Results

Summarized results of discontinued operations for the three months ended December 31, 2006 are (in millions):


Sales	$	248.1

Income before income taxes	$	51.3
Income tax expense		(17.1	)

Net income	$	34.2

ROCKWELL AUTOMATION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

14.

Income Taxes

We adopted the provisions of FIN 48 as of October 1, 2007. As a result, we recognized a $6.7 million decrease in shareowners’ equity. As of October 1, 2007, the gross liability for unrecognized tax benefits recorded on adoption of FIN 48 and reported in other liabilities in the Condensed Consolidated Balance Sheet was $135.3 million. Of this amount, $83.7 million would reduce our effective tax rate if recognized.

We recognize interest and penalties related to unrecognized tax benefits in tax expense. As of October 1, 2007, the combined amount of accrued interest and penalties included in the $135.3 million liability was $18.8 million.

We do not expect a significant increase or decrease of the total amount of unrecognized tax benefits within the next twelve months. There was no material change of the amount of unrecognized tax benefits in the first quarter of fiscal 2008.

We conduct business globally and are routinely audited by the various tax jurisdictions in which we operate. Our U.S. federal tax returns for 2006 and 2007, Wisconsin tax returns for 2003 through 2007, and tax returns for other major states and foreign jurisdictions for 1998 through 2007 remain subject to examination by taxing authorities.

The base tax rate determined as provided under Income Taxes in Note 1 for the full year is estimated to be in a range of 28 to 29 percent, subject to quarterly variability, based on our current forecast of pretax income, permanent book and tax differences and global tax planning strategies for our continuing operations. The effective tax rate for the first quarter of 2008 was 28.5 percent.

The tax rate applied to our discontinued operations for the three months ended December 31, 2006 was approximately 33 percent. This rate reflects that most of the taxable income from discontinued operations is generated in higher tax jurisdictions. The income tax benefit of $264.0 million recognized in the first quarter of 2007 represents recognition of a deferred tax asset on the difference between our tax basis in the stock of the Power Systems subsidiaries that were sold and the book value of their net assets as well as the reversal of the deferred tax liabilities that will not be realized due to the stock sale. In accordance with the FASB Emerging Issues Task Force Issue 93-17, Recognition of Deferred Tax Assets for a Parent Company’s Excess Tax Basis in the Stock of a Subsidiary that Is Accounted for as a Discontinued Operation , the tax benefit is recognized upon classification of the subsidiaries as a discontinued operation, which occurred in our first quarter of 2007.

15.

Special Charges

During 2007, we recorded special charges of $43.5 million ($27.7 million after tax or $0.17 per diluted share) related to various restructuring actions designed to execute on our cost productivity initiatives and to advance our globalization strategy. Actions include workforce reductions, realignment of administrative functions, and rationalization and consolidation of global operations. We paid $2.7 million related to these charges during the quarter ended December 31, 2007.

ROCKWELL AUTOMATION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

16.

Business Segment Information

The following tables reflect the sales and operating results of our reportable segments (in millions):


	Three Months Ended December 31,
	2007			2006
Sales
Architecture & Software	$	577.9		$	529.0
Control Products & Solutions		754.0			617.3

Total	$	1,331.9		$	1,146.3


Segment Operating Earnings
Architecture & Software	$	148.5		$	147.3
Control Products & Solutions		109.0			79.7

Total		257.5			227.0

Purchase accounting depreciation and amortization		(6.3	)		(2.7	)
General corporate – net		(14.2	)		(19.0	)
Interest expense		(18.0	)		(18.4	)
Income tax provision		(62.4	)		(56.0	)

Income from continuing operations	$	156.6		$	130.9

Among other considerations, we evaluate performance and allocate resources based upon segment operating earnings before income taxes, interest expense, costs related to corporate offices, certain nonrecurring corporate initiatives, gains and losses from the disposition of businesses, earnings and losses from equity affiliates that are not considered part of the operations of a particular segment and incremental acquisition related expenses resulting from purchase accounting adjustments such as intangible asset amortization, depreciation, inventory and purchased research and development charges. Depending on the product, intersegment sales that are within a single legal entity are either at cost or cost plus a mark-up, which does not necessarily represent a market price. Sales between legal entities are at an appropriate transfer price. Costs incurred related to shared segment operating activities are allocated to the segments using a methodology consistent with the expected benefit.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareowners of

Rockwell Automation, Inc.

Milwaukee, Wisconsin

We have reviewed the accompanying condensed consolidated balance sheet of Rockwell Automation, Inc. and subsidiaries (the “Company”) as of December 31, 2007, and the related condensed consolidated statements of operations and cash flows for the three-month periods ended December 31, 2007 and 2006. These interim financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such condensed consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Rockwell Automation, Inc. and subsidiaries as of September 30, 2007, and the related consolidated statements of operations, shareowners’ equity, cash flows and comprehensive equity for the year then ended (not presented herein); and in our report dated November 15, 2007, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of September 30, 2007 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

As described in Note 14 to the Condensed Consolidated Financial Statements, on October 1, 2007, the Company adopted Financial Accounting Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes.”

/s/ DELOITTE & TOUCHE LLP

Milwaukee, Wisconsin

February 6, 2008

ROCKWELL AUTOMATION, INC.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Results of Operations

Forward-Looking Statement

This Quarterly Report contains statements (including certain projections and business trends) that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Words such as “believe”, “estimate”, “project”, “plan”, “expect”, “anticipate”, “will”, “intend” and other similar expressions may identify forward-looking statements. Actual results may differ materially from those projected as a result of certain risks and uncertainties, many of which are beyond our control, including but not limited to:

•

economic and political changes in global markets where we compete, such as currency exchange rates, inflation rates, interest rates, recession, policies of foreign governments and other external factors we cannot control, and U.S. and local laws affecting our activities abroad and compliance therewith;

•

successful development of advanced technologies and demand for and market acceptance of new and existing products;

•

general global and regional economic, business or industry conditions, including levels of capital spending in industrial markets;

•

the availability, effectiveness and security of our information technology systems;

•

competitive product and pricing pressures;

•

disruption of our operations due to natural disasters, acts of war, strikes, terrorism, or other causes;

•

intellectual property infringement claims by others and the ability to protect our intellectual property;

•

our ability to successfully address claims by taxing authorities in the various jurisdictions where we do business;

•

our ability to attract and retain qualified personnel;

•

the uncertainties of litigation;

•

disruption of our North American distribution channel;

•

the availability and price of components and materials;

•

successful execution of our cost productivity and our globalization initiatives;

•

our ability to execute strategic actions, including acquisitions and integration of acquired businesses; and

•

other risks and uncertainties, including but not limited to those detailed from time to time in our Securities and Exchange Commission filings.

These forward-looking statements reflect our beliefs as of the date of filing this report. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Non-GAAP Measures

The following discussion includes organic sales and free cash flow, which are non-GAAP measures. See Supplemental Sales Information for a reconciliation of reported sales to organic sales and a discussion of why we believe this non-GAAP measure is useful to investors. See Financial Condition for a reconciliation of cash flows from operating activities to free cash flow and a discussion of why we believe this non-GAAP measure is useful to investors.

ROCKWELL AUTOMATION, INC.

Overview

We are a leading global provider of industrial automation power, control and information products, solutions and services. Overall demand for our products is driven by:

•

investments in manufacturing capacity, including upgrades, modifications, and expansions of existing manufacturing facilities, and the creation of new manufacturing facilities;

•

our customers’ needs for greater productivity, cost reduction, quality, and overall global competitiveness;

•

industry factors that include our customers’ new product introductions, trends in the actual and forecasted demand for our customers’ products or services, and the regulatory and competitive environments in which our customers operate;

•

levels of global industrial production;

•

regional factors that include local political, social, regulatory and economic circumstances; and

•

the seasonal capital spending patterns of our customers due to their annual capital budgeting processes and their working schedules.

ROCKWELL AUTOMATION, INC.

U.S. Industrial Economic Trends

The various indicators we use to gauge the direction and momentum of our U.S. served markets include:

•

Industrial Equipment Spending, which is an economic statistic compiled by the Bureau of Economic Analysis (BEA). This statistic provides insight into spending trends in the broad U.S. industrial economy and is utilized, along with other economic indicators, to forecast industrial equipment spending. This measure over the longer term has proven to have reasonable predictive value as a directional indicator of our domestic growth.

•

Capacity Utilization, which is an indication of plant operating activity published by the Federal Reserve. Historically there has been a meaningful correlation between Capacity Utilization and the level of capital investment made by our U.S. customers in their manufacturing base.

•

The Manufacturing Purchasing Managers’ Index (PMI), published by the Institute for Supply Management (ISM), which is an indication of the current and near-term state of manufacturing activity in the U.S. According to the ISM, a PMI measure above 50 indicates that the U.S. manufacturing economy is generally expanding while a measure below 50 indicates that it is generally contracting.

The table below shows a sequential decline in the U.S. Industrial Equipment Spending from September 2007, although it has increased on a year over year basis compared to December 2006. Capacity Utilization has remained above 80 since September 2006 and is in line with recent quarters. For the month of December, the PMI fell below 50 for the first time in 11 months.


	Industrial Equipment Spending (in billions)		Capacity Utilization (percent)	PMI
Fiscal 2008
December 2007	$	175.6	81.4	48.4

Fiscal 2007
September 2007		180.6	81.9	50.5
June 2007		176.0	81.8	53.4
March 2007		168.1	81.4	50.7
December 2006		167.5	81.6	51.5

Fiscal 2006
September 2006		169.2	82.0	51.9

Note: Economic indicators are subject to revisions by the issuing organizations.

ROCKWELL AUTOMATION, INC.

Non-U.S. Regional Trends

Outside the U.S., demand for our products and services is principally driven by the strength of the industrial economy in each region and by our customers’ ability and propensity to invest in their manufacturing assets. These customers may include both multinational companies with expanding global presence and a growing number of local companies. Recent strength in demand for our products and services has, in part, been driven by investment in infrastructure in developing economies, investments in basic materials production capacity in response to higher end-product pricing and in expanding consumer markets. In the first quarter of 2008, we continued to see strong demand in Latin America and continued improved performance in Asia-Pacific.

Revenue by Geographic Region

In the first quarter of 2008, sales to non-U.S. customers accounted for approximately 50 percent of our total sales. The table below presents our sales for the quarter ended December 31, 2007 by geographic region and the change in sales from the quarter ended December 31, 2006 (in millions, except percentages):


	Three Months Ended Dec. 31, 2007(1)		Change vs. Three Months Ended Dec. 31, 2006	Change in Sales Excluding Effect of Currency vs. Three Months Ended Dec. 31, 2006(2)	Change in Organic Sales vs. Three Months Ended Dec. 31, 2006(2)
United States	$	671.4	6%	5%	4%
Canada		95.2	25%	8%	7%
Europe, Middle East and Africa		304.7	33%	20%	7%
Asia-Pacific		163.4	21%	13%	11%
Latin America		97.2	37%	28%	28%

Total Sales	$	1,331.9	16%	11%	7%

(1)	We attribute sales to the geographic regions based upon country of destination.

(2)	Organic sales and sales excluding effect of currency are non-GAAP measures. See Supplemental Information for information on these non-GAAP measures.

Industry Views

We serve customers in a wide range of industries, including consumer, resource-based and transportation.

Our consumer industry customers are engaged in the food and beverage, home and personal care, and life sciences industries. These customers’ needs include global expansion, incremental capacity from existing facilities, an increasingly flexible manufacturing environment and regulatory compliance. In addition, these customers operate in an environment where product innovation and time to market are critical factors. Consumer products customers’ capital investments are generally less cyclical than those of resource-based customers.

Our customers in resource-based industries, including oil and gas, mining, aggregates, metals, water/wastewater, forest products and cement, all benefit from higher commodity prices and higher global demand for basic materials, both of which encourage investment in capacity and productivity in these industries. Higher energy prices have historically caused customers across all industries to consider investing in more energy-efficient manufacturing processes and technologies, such as intelligent motor controls.

In transportation, factors such as excess capacity, geographic expansion, investment in new model introductions and more flexible manufacturing technologies affect our sales.

ROCKWELL AUTOMATION, INC.

Summary of Results of Operations

2008 First Quarter Compared to 2007 First Quarter


	Three Months Ended December 31,
	2007			2006
Sales
Architecture & Software	$	577.9		$	529.0
Control Products & Solutions		754.0			617.3

Total	$	1,331.9		$	1,146.3

Segment Operating Earnings
Architecture & Software	$	148.5		$	147.3
Control Products & Solutions		109.0			79.7
Purchase accounting depreciation and amortization		(6.3	)		(2.7	)
General corporate – net		(14.2	)		(19.0	)
Interest expense		(18.0	)		(18.4	)
Income tax provision		(62.4	)		(56.0	)

Income from continuing operations		156.6			130.9
Discontinued operations		—			298.2

Net income	$	156.6		$	429.1

Diluted earnings per share:
Continuing operations	$	1.04		$	0.76
Discontinued operations		—			1.74

Net income	$	1.04		$	2.50

Diluted weighted average outstanding shares		151.0			171.4

See Note 16 in the Condensed Consolidated Financial Statements for the definition of segment operating earnings.

Sales

Sales increased 16 percent compared to the first quarter of 2007. Regional expansion and the ongoing diversification of our revenue base contributed to our growth rate as approximately 50 percent of our sales during the quarter were to non-U.S. customers. Organic sales increased 7 percent, as foreign currency translation and acquisitions added 5 and 4 percentage points to the growth rate, respectively. We continued to see strong organic growth in Latin America of 28 percent, benefiting from continued strength in resource-based industries. We demonstrated continued improved performance in the Asia-Pacific region with organic growth of 11 percent and solid organic growth rates in the U.S. and Canada. Europe, Middle East and Africa experienced strong growth in Eastern Europe, but was sluggish in the developed countries, particularly the U.K. We experienced healthy revenue growth in our key process and OEM growth initiatives. During the quarter we also realized above average growth in the life sciences and oil and gas industries, partially offset by below average growth in the automotive industry due to the continued weakness in the Detroit automotive market.

Purchase Accounting Depreciation and Amortization

Purchase accounting depreciation and amortization expenses were $6.3 million in the first quarter of 2008 compared to $2.7 million in the first quarter of 2007. The increase is primarily due to our recent acquisitions of Pavilion Technologies, ICS Triplex and ProsCon Holdings.

General Corporate-Net

General corporate expenses were $14.2 million in the first quarter of 2008 compared to $19.0 million in the first quarter of 2007. The decrease is primarily due to a $6.2 million gain on the sale of the remaining Baldor shares received from the divestiture of Power Systems.

ROCKWELL AUTOMATION, INC.

2008 First Quarter Compared to 2007 First Quarter—(Continued)

Income Taxes

The effective tax rate for the first quarter of 2008 was 28.5 percent compared to 30.0 percent in the first quarter of 2007. The effective tax rate was lower than the U.S. statutory tax rate of 35 percent because we benefited from lower non-U.S. tax rates and the utilization of foreign tax credits.

Income from Continuing Operations

Income from continuing operations increased 20 percent to $156.6 million, compared to the first quarter of 2007. The increase is primarily due to strong productivity performance, higher volume and the sale of the remaining Baldor shares. Productivity realization allowed us to generate strong earnings, while sustaining investments to drive globalization, growth and technology leadership.

Discontinued Operations

Amounts reported for discontinued operations primarily relate to the results of our former Power Systems operating segment. Power Systems sales in the first quarter of 2007 were $248.1 million. Operating earnings were $53.2 million. Operating earnings in 2007 included the benefit of discontinuing depreciation and amortization of $5.7 million ($3.8 million after tax, or $0.02 per diluted share) during the period held for sale.

The tax rate applied to our discontinued operations was approximately 33 percent. This rate reflects that most of the taxable income from discontinued operations was generated in higher tax jurisdictions. The income tax benefit of $264.0 million on the divestiture represents recognition of a deferred tax asset on the difference between our tax basis in the stock of the Power Systems subsidiaries that were sold and the book value of their net assets as well as the reversal of the deferred tax liabilities that were not realized due to the stock sale. In accordance with the FASB Emerging Issues Task Force Issue 93-17, Recognition of Deferred Tax Assets for a Parent Company’s Excess Tax Basis in the Stock of a Subsidiary that Is Accounted for as a Discontinued Operation , the tax benefit is recognized upon classification of the subsidiaries as a discontinued operation.

See also Note 13 in the Condensed Consolidated Financial Statements for additional information on discontinued operations.

Architecture & Software


(in millions, except percentages)	2008	2007	Increase (Decrease)
Sales	$577.9	$529.0	$48.9
Segment operating earnings	148.5	147.3	1.2
Segment operating margin	25.7%	27.8%	(2.1) pts

Sales

Sales by the Architecture & Software operating segment increased 9 percent in the first quarter of 2008 compared to the first quarter of 2007. Foreign currency translation added 5 percentage points to the growth rate. Our growth during the quarter was primarily driven by our OEM initiatives, process applications and Logix offerings, partially offset by a decline in our legacy processor product offerings.

Operating Margin

Architecture & Software segment operating margin decreased 2.1 points to 25.7 percent due to increased spending on our technology and growth initiatives and unfavorable product mix as processors and software were a lower percentage of our total sales. These items were partially offset by volume leverage and productivity initiatives.

ROCKWELL AUTOMATION, INC.

2008 First Quarter Compared to 2007 First Quarter—(Continued)

Control Products & Solutions


(in millions, except percentages)	2008	2007	Increase
Sales	$754.0	$617.3	$136.7
Segment operating earnings	109.0	79.7	29.3
Segment operating margin	14.5%	12.9%	1.6 pts

Sales

Sales of our Control Products & Solutions operating segment increased 22 percent in the first quarter of 2008 compared to the first quarter of 2007. Acquisitions and foreign currency translation each added 6 percentage points to the growth rate. Year over year results benefited from the execution of our growth initiatives and strong growth in our solutions businesses, as well as in the life sciences and oil and gas industries.

Operating Margin

Control Products & Solutions segment operating margin improved by 1.6 points to 14.5 percent. The increase is primarily due to strong productivity performance and volume leverage, partially offset by the impact of acquisitions.

ROCKWELL AUTOMATION, INC.

Financial Condition

The following is a summary of our cash flows from operating, investing and financing activities, as reflected in the Condensed Consolidated Statement of Cash Flows (in millions):


	Three Months Ended December 31,
	2007			2006
Cash provided by (used for):
Operating activities	$	101.5		$	98.2
Investing activities		(51.6	)		(27.1	)
Financing activities		191.6			(69.3	)
Effect of exchange rate changes on cash		6.9			5.9

Cash provided by continuing operations	$	248.4		$	7.7

The following table summarizes free cash flow (in millions):
Cash provided by continuing operating activities	$	101.5		$	98.2
Capital expenditures of continuing operations		(26.3	)		(29.2	)
Excess income tax benefit from the exercise of stock options		2.9			4.7

Free cash flow	$	78.1		$	73.7

Our definition of free cash flow, which is a non-GAAP financial measure, takes into consideration capital investments required to maintain the operations of our businesses and execute our strategy. In the first quarter of 2006 we adopted SFAS 123(R), which requires that we report the excess income tax benefit from the exercise of stock options as a financing cash flow rather than as an operating cash flow. We have added this benefit back to our calculation of free cash flow in order to generally classify cash flows arising from income taxes as operating cash flows. In our opinion, free cash flow provides useful information to investors regarding our ability to generate cash from business operations that is available for acquisitions and other investments, service of debt principal, dividends and share repurchases. We use free cash flow as one measure to monitor and evaluate performance. Our definition of free cash flow may be different from definitions used by other companies.

Free cash flow was a source of $78.1 million for the three months ended December 31, 2007 compared to a source of $73.7 million for the three months ended December 31, 2006. The increase in free cash flow is primarily due to an increase in current year earnings, partially offset by the timing of estimated income tax payments.

Commercial paper is our principal source of short-term financing. No commercial paper borrowings were outstanding at December 31, 2007 as a portion of the proceeds from the $500 million debt offering were used to repay outstanding balances during the quarter. At September 30, 2007, commercial paper borrowings outstanding were $173.0 million, with a weighted average interest rate of 5.1 percent.

We repurchased approximately 1.4 million shares of our common stock in the first quarter of 2008, of which 86,000 shares did not settle until January, 2008. The total cost of these shares was $96.0 million, of which $6.0 million was recorded in accounts payable at December 31, 2007. This is compared to purchases of approximately 5.6 million shares at a cost of $351.1 million in the first quarter of 2007. We anticipate continuing to repurchase stock in 2008, the amount of which will depend ultimately on business conditions, stock price, free cash flow generation and other cash requirements. At December 31, 2007, we had approximately $930.3 million remaining for stock repurchases under our existing board authorization. See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, for additional information regarding share repurchases.

ROCKWELL AUTOMATION, INC.

Financial Condition—(Continued)

We expect future uses of cash to include repayments of short-term borrowings, repurchases of common stock, dividends to shareowners, capital expenditures and acquisitions of businesses and may include additional contributions to our pension plans. We expect capital expenditures from continuing operations in 2008 to be about $145 million. We expect to fund these future uses of cash with existing cash balances, cash generated by operating activities, commercial paper borrowings, a new issue of debt or issuance of other securities.

In addition to cash generated by operating activities, we have access to existing financing sources, including the public debt markets and unsecured credit facilities with various banks. Our debt-to-total-capital ratio was 41.3 percent at December 31, 2007 and 34.7 percent at September 30, 2007. The increase is due to the $500 million of debt issued in December 2007 in anticipation of the January 15, 2008 maturity of our 6.15% notes.

In October 2004, we entered into a five-year $600.0 million unsecured revolving credit facility. Our credit facility remains in effect and we had not drawn down under it at December 31, 2007 or September 30, 2007. Borrowings under our credit facility bear interest based on short-term money market rates in effect during the period the borrowings are outstanding. The terms of our credit facility contain covenants under which we would be in default if our debt-to-total-capital ratio was to exceed 60 percent. We were in compliance with all covenants under our credit facility at December 31, 2007 and September 30, 2007. In addition to our $600.0 million credit facility, short-term unsecured credit facilities of approximately $185.4 million at December 31, 2007 were available to foreign subsidiaries.

The following is a summary of our credit ratings as of December 31, 2007:


Credit Rating Agency	Short Term Rating	Long Term Rating	Outlook
Standard & Poor’s	A-1	A	Stable
Moody’s	P-1	A2	Stable
Fitch Ratings	F1	A	Stable

Among other uses, we can draw on our credit facility as a standby liquidity facility to repay our outstanding commercial paper as it matures. This access to funds to repay maturing commercial paper is an important factor in maintaining the ratings set forth in the table above that have been given to our commercial paper. Under our current policy with respect to these ratings, we expect to limit our other borrowings under the credit facility, if any, to amounts that would leave enough credit available under the facility so that we could borrow, if needed, to repay all of our then outstanding commercial paper as it matures.

If our access to the commercial paper market is adversely affected due to a change in market conditions or otherwise, we would expect to rely on a combination of available cash and the unsecured committed credit facility to provide short-term funding. In such event, the cost of borrowings under the unsecured committed credit facility could be higher than the cost of commercial paper borrowings.

Information with respect to our contractual cash obligations is contained in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended September 30, 2007. We believe that at December 31, 2007, there has been no material change to this information, except as follows: In December 2007, we issued an aggregate of $500 million principal amount of our 5.65% notes due 2017 and 6.25% debentures due 2037. The debt offering yielded approximately $494.3 million of proceeds, which were used to repay at maturity our 6.15% notes due January 15, 2008 and for general corporate purposes. Interest payable under the new debt will be $14.7 million for the balance of 2008, $29.8 million in 2009, $29.8 million in 2010, $29.8 million in 2011, $29.8 million in 2012 and $475.9 million thereafter. The Financial Accounting Standards Board (FASB) issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), which became effective for us on October 1, 2007. The total gross liability for unrecognized tax benefits recorded on adoption of FIN 48 was $135.3 million. We are unable to make a reasonably reliable estimate of the period of cash settlement related to these liabilities for unrecognized tax benefits.

Environmental

Information with respect to the effect on us and our manufacturing operations of compliance with environmental protection requirements and resolution of environmental claims is contained in Note 17 of the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of our Annual Report on Form 10-K for the fiscal year ended September 30, 2007. We believe that at December 31, 2007, there has been no material change to this information.

ROCKWELL AUTOMATION, INC.

Supplemental Sales Information

We translate sales of subsidiaries operating outside of the United States using exchange rates effective during the respective period. Therefore, changes in currency rates affect our reported sales. Sales by businesses we acquired also affect our reported sales. We believe that organic sales, defined as sales excluding the effects of changes in currency exchange rates and acquisitions, which is a non-GAAP financial measure, provides useful information to investors because it reflects regional performance from the activities of our businesses without the effect of changes in currency rates or acquisitions. We use organic sales as one measure to monitor and evaluate our regional performance. We determine the effect of changes in currency exchange rates by translating the respective period’s sales using the same currency exchange rates that were in effect in the prior year. We determine the effect of acquisitions by excluding sales in the current period for which there are no sales in the comparable prior period. Organic sales growth is calculated by comparing organic sales to reported sales in the prior year. We attribute sales to the geographic regions based on the country of destination.

The following is a reconciliation of our reported sales to organic sales (in millions):


	Three Months Ended December 31, 2007												Three Months Ended December 31, 2006
	Sales		Effect of Changes in Currency			Sales Excluding Changes in Currency		Effect of Acquisitions			Organic Sales		Sales
United States	$	671.4	$	(2.4	)	$	669.0	$	(11.2	)	$	657.8	$	634.7
Canada		95.2		(12.8	)		82.4		(0.9	)		81.5		76.4
Europe, Middle East and Africa		304.7		(29.6	)		275.1		(28.6	)		246.5		229.5
Asia-Pacific		163.4		(11.3	)		152.1		(2.7	)		149.4		134.7
Latin America		97.2		(6.5	)		90.7		—			90.7		71.0

Total Company Sales	$	1,331.9	$	(62.6	)	$	1,269.3	$	(43.4	)	$	1,225.9	$	1,146.3

The following is a reconciliation of our reported sales by operating segment to organic sales (in millions):


	Three Months Ended December 31, 2007												Three Months Ended December 31, 2006
	Sales		Effect of Changes in Currency			Sales Excluding Changes in Currency		Effect of Acquisitions			Organic Sales		Sales
Architecture & Software	$	577.9	$	(28.6	)	$	549.3	$	(4.1	)	$	545.2	$	529.0
Control Products & Solutions		754.0		(34.0	)		720.0		(39.3	)		680.7		617.3

Total Company Sales	$	1,331.9	$	(62.6	)	$	1,269.3	$	(43.4	)	$	1,225.9	$	1,146.3

ROCKWELL AUTOMATION, INC.

Critical Accounting Policies and Estimates

We have prepared the Condensed Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States, which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Condensed Consolidated Financial Statements and revenues and expenses during the periods reported. Actual results could differ from those estimates. Information with respect to our critical accounting policies that we believe could have the most significant effect on our reported results or require subjective or complex judgments by management is contained in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended September 30, 2007. We believe that at December 31, 2007, there has been no material change to this information, except as follows:

Effective October 1, 2007, we adopted Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48). We have assessed our position with regard to tax exposures and uncertain tax positions under its requirements. The adoption of FIN 48 resulted in a decrease to shareowners’ equity of $6.7 million.

Recent Accounting Pronouncements

See Note 1 in the Condensed Consolidated Financial Statements regarding recent accounting pronouncements.

ROCKWELL AUTOMATION, INC.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Information with respect to our exposure to interest rate risk and foreign currency risk is contained in Item 7A, Quantitative and Qualitative Disclosures About Market Risk, of our Annual Report on Form 10-K for the fiscal year ended September 30, 2007. We believe that at December 31, 2007, there has been no material change to this information.

Item 4.

Controls and Procedures

Disclosure Controls and Procedures: We, with the participation of our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)) as of the end of the fiscal quarter covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the fiscal quarter covered by this report, our disclosure controls and procedures were effective.

Internal Control Over Financial Reporting: There has not been any change in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) during the fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

As previously disclosed, we are in the process of developing and implementing common global process standards and an enterprise-wide information technology system. Additional implementations will occur at most locations of our company over a multi-year period, with additional phases scheduled throughout fiscal 2008-2010.

PART II.

OTHER INFORMATION

Item 1.

Legal Proceedings

Information about our legal proceedings is contained in Item 3, Legal Proceedings, of our Annual Report on Form 10-K for the fiscal year ended September 30, 2007. Such information is updated in its entirety, as of February 6, 2008, as follows:

Rocky Flats Plant . RIC operated the Rocky Flats Plant (the Plant), Golden, Colorado, from 1975 through December 1989 for the Department of Energy (DOE). Incident to Boeing’s acquisition of RIC in 1996, we assumed and agreed to indemnify RIC and Boeing for any liability arising out of RIC’s activities at the Plant to the extent such liability is not assumed or indemnified by the government, and RIC and Boeing assigned to us the right to any reimbursements or other proceeds to which they might be entitled under RIC’s Rocky Flats contracts with the DOE.

On January 30, 1990, a class action was filed in the United States District Court for the District of Colorado against RIC and another former operator of the Plant. The action alleges the improper production, handling and disposal of radioactive and other hazardous substances, constituting, among other things, violations of various environmental, health and safety laws and regulations, and misrepresentation and concealment of the facts relating thereto. On October 8, 1993, the court certified separate medical monitoring and property value classes. On February 14, 2006, a jury empanelled to try certain of the class action plaintiffs’ property damage claims found the contractor defendants liable for trespass and nuisance, and awarded $176 million in compensatory damages and $200 million in punitive damages against the two defendants collectively. The jury also found RIC to be 10% responsible for the trespass and 70% responsible for the nuisance. No appealable judgment has been entered on the jury verdict, in part because the court has yet to decide how the damages are to be allocated between the defendants and among the plaintiff class members. Appeals are likely after judgment is entered. Effective August 1, 1996, the DOE assumed control of the defense of the contractor defendants, including RIC, in the action and has either reimbursed or paid directly the costs of RIC’s defense. We believe that RIC is entitled under applicable law and its contract with the DOE to be indemnified for the verdict and other costs associated with this action.

ROCKWELL AUTOMATION, INC.

Item 1.

Legal Proceedings—(Continued)

On November 13, 1990, RIC was served with another civil action brought against it in the same court by James Stone, claiming to act in the name of the United States, alleging violations of the U.S. False Claims Act in connection with its operation of the Plant. On April 1, 1999 a jury awarded the plaintiffs approximately $1.4 million in damages. On May 18, 1999, the court entered judgment against RIC for approximately $4.2 million, trebling the jury’s award as required by the False Claims Act, and imposing a civil penalty of $15,000. We have paid this judgment to the U.S. government. We believe that RIC is entitled under applicable law and its contract with the DOE to be indemnified for all costs and any liability associated with this action. However, as described below, the Civilian Board of Contract Appeals has denied RIC’s claim seeking reimbursement of certain of those costs.

On January 8, 1991, RIC filed suit in the United States Court of Federal Claims against the DOE, seeking recovery of $6.5 million of award fees that it alleges are owed to it under the terms of its contract with the DOE for management and operation of the Plant during the period October 1, 1988 through September 30, 1989. On January 18, 2007, the Court entered judgment in RIC’s favor, which requires the DOE to pay us $3.1 million, plus interest since 1991. We received $6.0 million from the DOE on July 2, 2007. On May 4, 2005, RIC filed another claim with the DOE, seeking recovery of $11.3 million in unreimbursed costs incurred in defense of the Stone suit. On September 30, 2005, the DOE Contracting Officer denied that claim and demanded repayment of $4 million in previously reimbursed Stone defense costs. On November 10, 2005, RIC appealed both aspects of the Contracting Officer’s decision regarding Stone defense costs to the Civilian Board of Contract Appeals. On July 9, 2007, the Board ruled that the DOE is entitled to be repaid the previously reimbursed Stone defense costs and that RIC cannot recover its unreimbursed costs. Further proceedings before the Board to determine the amount to be repaid are in their early stages. Any appeals from the Board’s rulings will be filed only after these further proceedings are concluded.

Asbestos . We (including our subsidiaries) have been named as a defendant in lawsuits alleging personal injury as a result of exposure to asbestos that was used in certain components of our products many years ago. Currently there are thousands of claimants in lawsuits that name us as defendants, together with hundreds of other companies. In some cases, the claims involve products from divested businesses, and we are indemnified for most of the costs. However, we have agreed to defend and indemnify asbestos claims associated with products manufactured or sold by our Dodge mechanical and Reliance Electric motors and motor repair services businesses prior to their divestiture by us, which occurred on January 31, 2007. We also are responsible for half of the costs and liabilities associated with asbestos cases against RIC’s divested measurement and flow control business. But in all cases, for those claimants who do show that they worked with our products or products of divested businesses for which we are responsible, we nevertheless believe we have meritorious defenses, in substantial part due to the integrity of the products, the encapsulated nature of any asbestos-containing components, and the lack of any impairing medical condition on the part of many claimants. We defend those cases vigorously. Historically, we have been dismissed from the vast majority of these claims with no payment to claimants.

The uncertainties of asbestos claim litigation and the long term solvency of our insurance companies make it difficult to predict accurately the ultimate outcome of asbestos claims. That uncertainty is increased by the possibility of adverse rulings or new legislation affecting asbestos claim litigation or the settlement process. Subject to these uncertainties and based on our experience defending asbestos claims, we do not believe these lawsuits will have a material adverse effect on our financial condition.

ROCKWELL AUTOMATION, INC.

Item 1.

Legal Proceedings—(Continued)

Foreign Corrupt Practices Act . As a result of an internal review, we determined during the fourth quarter of 2006 that actions by a small number of employees at certain of our operations in one jurisdiction may have violated the U.S. Foreign Corrupt Practices Act (FCPA) or other applicable laws. We and some of our distributors do business in this jurisdiction with government owned enterprises or government owned enterprises that are evolving to commercial businesses. These actions involved payments for non-business travel expenses and certain other business arrangements involving potentially improper payment mechanisms for legitimate business expenses. Special outside counsel has been engaged to investigate the actions and report to the Audit Committee. Their review is ongoing.

We voluntarily disclosed these actions to the U.S. Department of Justice (“DOJ”) and the Securities and Exchange Commission (“SEC”) beginning in September 2006. We are implementing thorough remedial measures, and are cooperating on these issues with the DOJ and SEC. We have agreed to update the DOJ and SEC periodically regarding any further developments as the investigation continues.

If violations of the FCPA occurred, we may be subject to consequences that could include fines, penalties, other costs and business-related impacts. We could also face similar consequences from local authorities. We do not believe the consequences of this investigation, the remediation or any related penalties or business related impacts will have a material adverse effect on our business, results of operations or financial condition.

Other . Various other lawsuits, claims and proceedings have been or may be instituted or asserted against us relating to the conduct of our business, including those pertaining to product liability, environmental, safety and health, intellectual property, employment and contract matters. Although the outcome of litigation cannot be predicted with certainty and some lawsuits, claims or proceedings may be disposed of unfavorably to us, we believe the disposition of matters that are pending or have been asserted will not have a material adverse effect on our business or financial condition.

Item 1A.

Risk Factors

Information about our most significant risk factors is contained in Item 1A of our Annual Report on Forma 10-K for the fiscal year ended September 30, 2007. We believe that at December 31, 2007 there has been no material change to this information.

ROCKWELL AUTOMATION, INC.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

Share Repurchases

The table below sets forth information with respect to purchases made by or on behalf of us of shares of our common stock during the three months ended December 31, 2007:


Period	Total Number of Shares Purchased	Average Price Paid Per Share ⁽¹⁾		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Approx. Dollar Value of shares that may yet be Purchased Under the Plans or Programs ⁽²⁾
October 1-31, 2007	241,300	$	66.96	241,300	10,165,672
November 1-30, 2007	625,058		67.12	625,058	968,210,697
December 1-31, 2007	545,000		69.54	545,000	930,309,397

Total	1,411,358		68.03	1,411,358

(1)

Average price paid per share includes brokerage commissions.

(2)

On November 7, 2007, our Board of Directors approved a $1.0 billion share repurchase program. This program was in addition to our former $1.0 billion dollar share repurchase program in effect since February 7, 2007. Our former repurchase program was completed on November 14, 2007 and no shares remained subject to repurchase under the former program after that date. Our repurchase programs allow management to repurchase shares at its discretion. However, during quarter-end “quiet periods,” defined as the period of time from quarter-end until two days following the filing of our quarterly earnings results with the SEC on Form 8-K, shares are repurchased at our broker’s discretion pursuant to a share repurchase plan subject to price and volume parameters.

ROCKWELL AUTOMATION, INC.

Item 6.

Exhibits

(a)

Exhibits:


Exhibit 4.1		- Form of certificate for the Company’s 5.65% Notes due December 1, 2017, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K dated December 3, 2007, is hereby incorporated by reference.

Exhibit 4.2		- Form of certificate for the Company’s 6.25% Debentures due December 1, 2037, filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated December 3, 2007, is hereby incorporated by reference.

Exhibit 10.1*		- Description of the Company’s performance measures and goals for the Company’s Incentive Compensation Plan and Annual Incentive Compensation Plan for Senior Executives for fiscal year 2008, contained in the Company’s Current Report on Form 8-K dated December 10, 2007, is hereby incorporated by reference.

Exhibit 10.2*		- Memorandum of Proposed Amendment and Restatement of the Rockwell Automation, Inc. Deferred Compensation Plan approved and adopted by the Board of Directors of the Company on November 7, 2007.

Exhibit 10.3*		- Memorandum of Amendments to the Rockwell Automation, Inc. 2003 Directors Stock Plan approved and adopted by the Board of Directors of the Company on November 7, 2007.

Exhibit 10.4*		- Memorandum of Proposed Amendment and Restatement of the Rockwell Automation, Inc. 2000 Long-Term Incentives Plan, as amended, approved and adopted by the Board of Directors of the Company on November 7, 2007.

Exhibit 10.5*		- Forms of Stock Option Agreement under the Company’s 2000 Long-Term Incentives Plan, as amended, for options granted to executive officers of the Company after December 1, 2007.

Exhibit 10.6*		- Form of Restricted Stock Agreement under the Company’s 2000 Long-Term Incentives Plan, as amended, for shares of restricted stock awarded after December 1, 2007.

Exhibit 10.7*		- Form of Performance Share Agreement under the Company’s 2000 Long-Term Incentives Plan, as amended, for performance shares awarded after December 1, 2007.

Exhibit 10.8*		- Change of Control Agreement dated as of November 9, 2007 between the Company and Keith D. Nosbusch, filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K dated November 15, 2007, is hereby incorporated by reference.

Exhibit 10.9*		- Form of Change of Control Agreement dated as of November 9, 2007 between the Company and each of Theodore D. Crandall, Steven A. Eisenbrown, Douglas M. Hagerman, John P. McDermott and certain other corporate officers, filed as Exhibit 99.2 to the Company’s Current Report on Form 8-K dated November 15, 2007, is hereby incorporated by reference.

ROCKWELL AUTOMATION, INC.


Exhibit 12		- Computation of Ratio of Earnings to Fixed Charges for the Three Months Ended December 31, 2007.

Exhibit 15		- Letter of Deloitte & Touche LLP regarding Unaudited Financial Information

Exhibit 31.1		- Certification of Periodic Report by the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934

Exhibit 31.2		- Certification of Periodic Report by the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934

Exhibit 32.1		- Certification of Periodic Report by the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 32.2		- Certification of Periodic Report by the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*Management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		ROCKWELL AUTOMATION, INC.
		(Registrant)

Date:	February 6, 2008	By:	/ S / T HEODORE D. C RANDALL
			Theodore D. Crandall Senior Vice President and Chief Financial Officer (Principal Financial Officer)




Date:	February 6, 2008	By:	/ S / D AVID M. D ORGAN
			David M. Dorgan Vice President and Controller (Principal Accounting Officer)

INDEX TO EXHIBITS


Exhibit No.		Exhibit
10.2		Memorandum of Proposed Amendment and Restatement of the Rockwell Automation, Inc. Deferred Compensation Plan approved and adopted by the Board of Directors of the Company on November 7, 2007.

10.3		Memorandum of Amendments to the Rockwell Automation, Inc. 2003 Directors Stock Plan approved and adopted by the Board of Directors of the Company on November 7, 2007.

10.4		Memorandum of Proposed Amendment and Restatement of the Rockwell Automation, Inc. 2000 Long-Term Incentives Plan, as amended, approved and adopted by the Board of Directors of the Company on November 7, 2007.

10.5		Forms of Stock Option Agreement under the Company’s 2000 Long-Term Incentives Plan, as amended, for options granted to executive officers of the Company after December 1, 2007.

10.6		Form of Restricted Stock Agreement under the Company’s 2000 Long-Term Incentives Plan, as amended, for shares of restricted stock awarded after December 1, 2007.

10.7		Form of Performance Share Agreement under the Company’s 2000 Long-Term Incentives Plan, as amended, for performance shares awarded after December 1, 2007.

12		Computation of Ratio of Earnings to Fixed Charges for the Three Months Ended December 31, 2007.

15		Letter of Deloitte & Touche LLP regarding Unaudited Financial Information.

31.1		Certification of Periodic Report by the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.

31.2		Certification of Periodic Report by the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.

32.1		Certification of Periodic Report by the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Periodic Report by the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 10.2

MEMORANDUM OF PROPOSED AMENDMENT AND

RESTATEMENT OF THE ROCKWELL AUTOMATION

DEFERRED COMPENSATION PLAN

(November 7, 2007)

It is proposed that the Rockwell Automation Deferred Compensation Plan (the “Plan”) be amended and restated in its entirety, effective as of January 1, 2005, in accordance with the requirements of Section 409A of the Internal Revenue Code of 1986, to make certain revisions, including to eliminate deferrals of base salary during a severance period, permit the Plan Administrator to modify annual salary eligibility as required to maintain the Plan’s tax deferral status, limit enrollment to one time per year, increase the minimum base salary deferral from 1% to 5%, and increase the minimum incentive compensation deferral from 1% to 10%. The amended and restated Plan shall be in the form set forth in the document attached hereto as Exhibit A, subject to technical revisions that may be made, but which will not affect the substance of the Plan’s terms and provisions.

ROCKWELL AUTOMATION

DEFERRED COMPENSATION PLAN

Restated on October 1, 2007

ROCKWELL AUTOMATION

DEFERRED COMPENSATION PLAN

The purpose of this Plan is to provide certain specified benefits to a select group of management and highly compensated employees who contribute materially to the continued growth, development and future business success of Rockwell Automation, Inc. (or any successor thereto) and its affiliates. This Plan is unfunded for tax purposes and for purposes of Title I of ERISA and is a successor to the Rockwell Collins Deferred Compensation Plan, effective as of June 30, 2001 (the “Predecessor Plan”). The Plan has been previously amended and restated so as to continue the provision of such specified benefits with respect to amounts earned and accrued by Participants on or after January 1, 2005 and is intended to satisfy and be in compliance with the provisions of the Internal Revenue Code of 1986 (the “Code”) as they relate to deferred compensation benefits, with particular emphasis on §409A of the said Code. If any provision or term of this document would be prohibited by or inconsistent with the requirements of Section 409A of the Code, then such provision or term shall be deemed to be reformed to comply with Section 409A of the Code.

The Company now desires to make certain administrative and other changes to the Plan, including changes related to the final regulations under Section 409A of the Code. To that end, the Plan is hereby amended and restated, effective as of October 1, 2007, subject to the provisions set forth below:

ARTICLE I: DEFINITIONS

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

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

(a)	Deferral Account balance, and

(b)	Company Match Account balance.

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

1.030 Affiliate means:

(a)

any corporation incorporated under the laws of one of the United States of America of which the Company owns, directly or indirectly, eighty percent (80%) or more of the combined voting power of all classes of stock or eighty percent (80%) or more of the total value of the shares of all classes of stock (all within the meaning of Code §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 §414(c)); and

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

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

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

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

1.070 Base Annual Salary means the annual cash compensation relating to services performed during any calendar year, whether or not paid in such calendar year or included on the Federal Income Tax Form W-2 for such calendar year, excluding bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non-monetary awards, directors fees and other fees, automobile and other allowances (whether or not such allowances are included in the Employee’s gross income) paid to a Participant for employment services rendered, and, after December 31, 2007, excluding severance pay. Base Annual Salary will be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or non-qualified plans of the Company or any Affiliate and will be calculated to include amounts not otherwise included in the Participant’s gross income under Code §125, 402(e)(3), 402(h), or 403(b), pursuant to plans established by the Company or an Affiliate; provided, however, that all such amounts will be included in compensation only to the extent that, had there been no such plan, the amount would have been payable in cash to the Participant.

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

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

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

1.110 Change of Control means any of the following occurring at any time after June 29, 2001:

(a)

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

(b)

Individuals who, as of October 1, 2007, 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 60% 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, of Rockwell 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 Company corporation from such Company Transaction or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Company Transaction and (3) at least a majority of the members of the board of directors of the corporation resulting from such Company Transaction were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Directors, providing for such Company Transaction; or

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

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

1.130 Committee means the Compensation and Management Development Committee of the Board of Directors.

1.140 Company means Rockwell Automation, Inc., a Delaware corporation and its predecessor, Rockwell International Corporation.

1.150 Company Match Account means:

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

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

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

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

1.170 Deferral Election means an election made pursuant to Article III by a Participant to defer receipt of a part of his Base Annual Salary or to defer receipt of all or a part of his Incentive Compensation.

1.180 Deferral Election Form means the form established from time to time by the Committee or its delegate that a Participant completes, signs and returns to the Committee or its delegate or completes electronically to make a Deferral Election pursuant to Article III, in order to defer receipt of a part of his Base Annual Salary or to defer receipt of all or a part of his Incentive Compensation and to designate the form of distribution for such deferrals and the earnings thereon.

1.190 Determination Date which only has applicability with respect to the provisions of Appendix A of this Plan, as such appendix applies to the interests of individuals who were participants in a Predecessor Plan and as it defines the value from time to time of amounts deferred under such Predecessor Plans prior to the Effective Date, means the last day of each calendar year quarter (i.e., March 31 ^st , June 30 ^th , September 30 ^th and December 31 ^st ).

1.200 Disability means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. Notwithstanding the foregoing, a Participant shall not be considered to have a termination of employment due to Disability unless the Participant has had a Separation from Service.

1.210 Effective Date means June 1, 2000 for this Plan.

1.220 Eligible Employee means any Employee who is employed in the United States or paid from United States payroll by the Company or an Affiliate and whose Base Annual Salary is equal to or greater than One Hundred Thousand Dollars ($100,000.00); provided, however, that effective January 1, 2006, such Base Annual Salary requirement shall be One Hundred and Twenty-Five Thousand Dollars ($125,000.00) and effective for the Plan Year beginning January 1, 2008, such Base Annual Salary Requirement (to be measured as of October 1, 2007 in accordance with Section 2.020) shall be One Hundred and Fifty Thousand Dollars ($150,000), or such other amount as determined by the Company’s Vice President, Compensation & Benefits in accordance with Section 11.020 of this Plan.

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

1.240 Employee Matters Agreement means the Employee Matters Agreement, dated as of June 29 , 2001, by and among Rockwell International Corporation, Rockwell Collins, Inc. and Rockwell Scientific Company LLC.

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

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

1.270 Incentive Compensation means any award payable to a Participant under an Incentive Compensation Plan sponsored by the Company or an Affiliate which, but for a Deferral Election under the Plan, would be paid to the Participant and considered to be “wages” for purposes of United States federal income tax withholding.

1.280 Incentive Compensation Deferral means a deferral by a Participant of part or all of his Incentive Compensation otherwise payable to him with respect to a particular fiscal year of the Company.

1.290 Incentive Compensation Deferral Account means:

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

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

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

1.300 Measurement Funds means the investment vehicles offered under this Plan which are the same as the Investment Funds offered under the Rockwell Automation, Inc. Savings Plan for Salaried Employees other than the Rockwell Automation Stock Fund, each of whose purpose is to mirror, to the greatest extent reasonably possible, the investment performance of a particular benchmark mutual fund sponsored and offered by Fidelity Investments.

1.310 Named Fiduciary means the Committee, its delegates, the Trustee and, following the occurrence of a Change of Control, the third-party fiduciary described in Section 13.020 of this Plan.

1.320 Non-Qualified Savings Plan means the Rockwell Automation Non-Qualified Savings Plan, as amended from time to time.

1.330 Participant means an Eligible Employee:

(a)	who elects to participate in the Plan;

(b)	who signs a Deferral Election Form and a Beneficiary Designation Form;

(c)	whose signed Deferral Election Form and Beneficiary Designation Form are accepted by the Committee or its delegate;

(d)	who commences participation in the Plan; and

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

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

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

1.340 Plan means this Rockwell Automation Deferred Compensation Plan, which is evidenced by this instrument and by the forms associated with the said instrument, as they may be amended from time to time.

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

1.360 Predecessor Plan means the deferred compensation arrangements (namely the Rockwell International Corporation Deferred Compensation Plan and the Allen-Bradley Company, Inc. Deferred Compensation Plan) which were in effect and applicable to certain of the Participants hereunder immediately prior to the Effective Date of this Plan, as such arrangements were administered during the period preceding such Effective Date, it being specifically understood and herein provided that such Predecessor Plans form parts of this Plan. To the extent a Predecessor Plan remains in effect with respect to a Participant, it will be governed by the terms of this Plan, except as otherwise provided in Appendix A.

1.370. [Reserved.]

1.380 Qualified Savings Plan means the Rockwell Automation Retirement Savings Plan for Salaried Employees, as amended from time to time.

1.390. [Reserved.]

1.400 Retirement , Retire(s) or Retired means, with respect to an Employee, severance from employment with the Company and all of its Affiliates for any reason other than a leave of absence, death or Disability on or after the attainment of his normal retirement or early retirement age. Notwithstanding the foregoing, a Participant shall not be considered to have Retired until such Participant has had a Separation from Service. Further notwithstanding the foregoing, for purposes of eligibility to elect an installment form of distribution, a Participant shall not be considered to have Retired unless his Separation from Service followed earliest of date on which he reached age 55 with 10 years of service with the Company; he reached age 65; or the sum of his age and years of service with the Company equaled at least 75.

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

1.420 Salary Deferral Account means:

(a)	the sum of all of a Participant’s Annual Salary Deferral Amounts,

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

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

1.430 Separation from Service means a termination of employment with the Company and all affiliates of the Company for any reason (including Retirement, death, Disability or other termination) subject to the following:

(a)

The employment relationship is treated as continuing intact while the individual is on military leave, sick leave, or other bona fide leave of absence (such as temporary employment by the government) if the period of such leave does not exceed six months, or if longer, so long as the individual’s right to reemployment with the Company is provided either by statute or by contract. If the period of leave exceeds six months and the individual’s right to reemployment is not provided either by statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period.

(b)

Whether a termination of employment has occurred is determined based on the facts and circumstances. Where an employee either actually or purportedly continues in the capacity of an employee, such as through the execution of an employment agreement under which the employee agrees to be available to perform services if requested, but the facts and circumstances indicate that the employer and the employee did not intend for the employee to provide more than insignificant services for the employer, an employee will be treated as having a Separation from Service. For purposes of the preceding sentence, an employer and employee will not be treated as having intended for the employee to provide insignificant services where the employee continues to provide services as an employee at an annual rate that is at least equal to 20 percent of the services rendered, on average, during the immediately preceding three full calendar years of employment (or, if employed less than three years, such lesser period). Where an employee continues to provide services to a previous employer in a capacity other than as an employee, a Separation from Service will not be deemed to have occurred if the former employee is providing services at an annual rate that is 50 percent or more of the services rendered, on average, during the immediately preceding three full calendar years of employment (or if employed less than three years, such lesser period) and the annual remuneration for such services is 50 percent or more of the annual remuneration earned during the final three full calendar years of employment (or if less, such lesser period). For purposes of this definition, the annual rate of providing services is determined based upon the measurement used to determine the individual’s base compensation (for example, amounts of time required to earn salary, hourly wages, or payments for specific projects).

1.440 Short-Term Payout means the payout set forth in Section 5.010 of the Plan.

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

1.460 Termination of Employment means the severing of a Participant’s employment with the Company and all Affiliates, voluntarily or involuntarily, for any reason other than Retirement, Disability, death or an authorized leave of absence. Notwithstanding the foregoing, a Participant shall not be considered to have a Termination of Employment for purposes of this Plan unless the Participant has had a Separation from Service.

1.470 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”).

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

1.490 Trustee means Wells Fargo Bank N.A., or any successor trustee of the Trust described in Section 1.480 of this Plan.

1.500 Unforeseeable Financial Emergency means an unanticipated emergency that is caused by an event beyond the control of the Participant which would result in severe financial hardship to the Participant and which itself results from:

(a)	a sudden and unexpected illness or accident of the Participant or the spouse or a dependent (as defined in Code Section 152(a)) of the Participant,

(b)	a loss of the Participant’s property due to casualty, or

(c)	such other extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined in the discretion of the Committee or its delegate.

ARTICLE II: PARTICIPATION

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

2.020 Commencement of Participation . In order to participate during a Plan Year, an Employee must, except as otherwise provided in Section 2.040, be an Eligible Employee as of the October 1 preceding the first day of the applicable Plan Year. As a condition to initial participation in this Plan, each Eligible Employee who wishes to participate in the Plan will be required to complete a Deferral Election Form in accordance with Article III of the Plan and within the timeframes described below.

(a)

Prior to January 1, 2005, in the case of such an Eligible Employee’s initial election to become a Participant in a particular Plan Year, such documentation must be provided by the Eligible Employee to the Committee or its delegate within sixty (60) days following his being notified of his status as an Eligible Employee. Effective on and after January 1, 2005, such documentation must be provided by the Eligible Employee to the Committee or its delegate before the December 15 ^th immediately preceding the Plan Year for which the deferral is intended.

(b)

If an Eligible Employee has met all enrollment requirements set forth in this Plan and required by the Committee or its delegate (including returning all required documents to the Committee or its delegate) in the time frames described in the above subsections, that Eligible Employee will become a Plan Participant on the first day of the Plan Year following the month in which he completes all such enrollment requirements.

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

2.030 Termination of Participation and/or Deferrals . If the Committee or its delegate determines in good faith that a Participant no longer qualifies as a member of a select group of management or highly compensated employees, as membership in such group is determined in accordance with ERISA §§201(2), 301(a)(3) and 401(a)(1), the Participant shall be prevented from making future Deferral Elections.

2.040 Special Enrollment Window . Notwithstanding any other provision of the Plan to the contrary, the Committee, or its delegate, may in its sole discretion allow a newly hired Eligible Employee who is a senior executive and who meets the participation requirements of this Article II other than the requirement that such individual was employed on the October 1 preceding the beginning of the current Plan Year to enroll in the Plan within 30 days of such Employee’s hire. Such an employee will become a Plan Participant on the first day of the month following the month in which he completes all enrollment requirements. If such Employee was hired prior to April 1, he shall be permitted to elect both a Base Salary Deferral pursuant to Section 3.010 and an Incentive Compensation Deferral pursuant to Section 3.020. If such Employee was hired after March 31, he shall only be permitted to elect a Base Salary Deferral pursuant to Section 3.010 and shall not be permitted to elect an Incentive Compensation Deferral pursuant to Section 3.020.

ARTICLE III: DEFERRAL AND COMPANY MATCH CREDITS

3.010 Base Annual Salary Deferral . Each Plan Participant will be permitted to make an irrevocable election to defer (such Deferral Election to be made in whole percentages) receipt of an amount equal to one percent (1%) through fifty percent (50%) of his Base Annual Salary; provided, however, effective January 1, 2008, the minimum Base Annual Salary deferral percentage will be an amount equal to five percent (5%) of a Participant’s Base Annual Salary.

(a)

If an Eligible Employee first becomes a Participant after the first day of a Plan Year, the Base Annual Salary Deferral will be for an amount equal to the percentage set forth above, multiplied by a fraction, the numerator of which is the number of complete months remaining in the Plan Year and the denominator of which is twelve (12), with the effect that the Participant’s deferred Base Annual Salary would be limited to the amount of salary not yet earned by the Participant as of the date the Participant submits a Deferral Election Form to the Company or an Affiliate for acceptance.

(b)

For each succeeding Plan Year, a Participant, will be permitted, in his sole discretion, to make a similar irrevocable election for the following Plan Year (and such other elections as the Committee or its delegate deems necessary or desirable) and must deliver such Deferral Election to the Company or an Affiliate on a new Deferral Election Form before December 15 ^th of the Plan Year immediately preceding the Plan Year for which the deferral is intended. If no such Deferral Election Form is timely delivered for a Plan Year, the Annual Deferral Amount will be zero for that Plan Year. Elections shall not carry over from year to year.

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

3.020 Incentive Compensation Deferral . In addition to the Base Annual Salary deferral described in the preceding Section, each Participant will be permitted to irrevocably elect to defer receipt of an amount equal to one percent (1%) through one hundred percent (100%), such Deferral Election to be made in whole percentages, of the amount of any Incentive Compensation which he might be awarded; provided, however, that effective January 1, 2008, the minimum Incentive Compensation deferral percentage shall be ten percent (10%) of Incentive Compensation. In general, such Deferral Election will be made on a Deferral Election Form and will apply to Incentive Compensation to which the Participant might be entitled for the fiscal year immediately following such Deferral Election.

The Incentive Compensation Deferral Amount will be withheld at the time the said Incentive Compensation are or otherwise would be paid to the Participant, whether or not this occurs during the Plan Year itself.

3.030 Annual Company Match Amount . A Participant’s Annual Company Match Amount for any Plan Year will be equal to the amount that the Company would have contributed to the Participant’s account in the Qualified Savings Plan as a matching contribution or other employer contribution to that Plan or would have credited to such Participant’s account in the Non-Qualified Savings Plan as a matching credit or other similar credit, but for the fact that the Participant elected to defer Base Annual Salary pursuant to the provisions of Section 3.010 of this Plan. The Annual Company Match Amount which is attributable to a Participant’s Annual Salary Deferral Amount for a particular Plan Year will be calculated in the first month of the immediately succeeding Plan Year and will be credited to the Participant’s Company Match Account within sixty (60) days of such succeeding Plan Year.

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

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

Notwithstanding the foregoing, the Company Match Amount shall be reduced for any Plan Year by the amount necessary to comply with the final regulations issued under Code Section 409A relating to the coordination of deferral elections under qualified plan with the benefits provided under nonqualified plans.

ARTICLE IV: PLAN ACCOUNTS

4.010 Vesting . A Participant will have a one hundred percent (100%) vested interest in his Deferral Account and in his Company Match Account.

4.020 Crediting/Debiting of Account Balances . In accordance with, and subject to, the rules and procedures that are established from time to time by the Committee or its delegate, in its sole discretion, amounts will be credited or debited to a Participant’s Account Balance in the manner set forth in the provisions of this Section; provided, however, that the said provisions will apply individually to, and be administered separately for, on the one hand, the Participant’s Salary Deferral and Company Match Accounts and, on the other hand, his Incentive Compensation Deferral Account, with the intention that that the Participant will be permitted to make separate elections with respect to each. Amounts earned and vested hereunder prior to January 1, 2005, and the earnings on such amounts shall be accounted for separately under the Plan.

(a)

Allocation to Measurement Funds . A Participant, in connection with his initial Deferral Election in accordance with Section 3.010 or 3.020 above, will be permitted to also elect to have one or more Measurement Funds used to determine the amounts to be credited to his Account Balance and his election will continue to be in effect thereafter, unless it should be changed in accordance with subsection (c).

(b)

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

(1)

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

(2)

the portion of the Annual Deferral Amount that was actually deferred during any calendar quarter were invested in the Measurement Fund(s) selected by the Participant, in the percentages applicable on such day, no later than the close of business on the first business day after the day on which such amounts are actually deferred from the Participant’s Base Annual Salary through reductions in his payroll, at the closing price on such date; and

(3)

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

(c) Transfers among Measurement Funds . The Participant will be permitted to change, on a daily basis, any previous Measurement Fund election or elections he has made with regard to his Account Balance. The elections and changes to such elections which a Participant makes pursuant to this subsection will be made by means of any method (including any available telephonic or electronic method which is acceptable to the Committee or its delegate at the time the election or change is made by the Participant), and may be made at any time and will be effective as of the New York Stock Exchange closing immediately following the making of that election or change; provided, however, if it is determined by the Committee or its delegate that an investment election made by a Participant is invalid or defective, the Participant’s election, until duly corrected by him, will be deemed to have been made in favor of whatever short-term, money market vehicle is available under the Plan at that time.

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

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

4.030 Amounts Credited Pursuant to Predecessor Plans . Notwithstanding the provisions of Section 4.020, in the case of amounts which were credited to any Predecessor Plan prior to the Effective Date as incentive compensation plan deferrals, such amounts will be separately accounted for hereunder and will continue to be adjusted and administered (specifically including application, on a quarterly basis, of the Interest Rate to a Participant’s account in such Predecessor Plan) in the manner previously in effect under such Predecessor Plan and as set forth in Appendix A; provided, however, that, unless otherwise provided in the said Appendix A, administration of such Predecessor Plan deferrals will be in accordance with the provisions of this Plan as they apply to amounts deferred after the Effective Date.

4.040 FICA and Other Taxes .

(a)

Annual Deferral Amounts . For each Plan Year in which an Annual Deferral Amount is being withheld from a Participant or an Annual Company Match Amount is credited, the Company or any Affiliate employing the Participant will withhold from that portion of the Participant’s Base Annual Salary and Incentive Compensation which is not being deferred the Participant’s share of FICA and other employment taxes on such Annual Deferral Amount and Annual Company Match Account.

(b)

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

ARTICLE V: SHORT-TERM PAYOUTS AND WITHDRAWALS

5.010 Short-Term Payouts . Effective with respect to Account Balances associated with amounts deferred or credited hereunder prior to January 1, 2005 and in connection with each election to defer an Annual Deferral Amount, a Participant may irrevocably elect to receive a future Short-Term Payout from the Plan with respect to such Annual Deferral Amount.

(a)

Subject to the Deduction Limitation, the said Short-Term Payout will be a lump sum payment in an amount that is equal to the Annual Deferral Amount, as adjusted for amounts credited or debited in the manner provided in Section 4.020 on that amount, determined at the time that the Short-Term Payout becomes payable (rather than at the date of a Termination of Employment).

(b)

Subject to the Deduction Limitation and the other terms and conditions of this Plan, each Short-Term Payout elected will be paid out during a sixty (60) day period commencing immediately after the last day of any Plan Year designated by the Participant that is at least three Plan Years after the Plan Year in which the Annual Deferral Amount is actually deferred. By way of example, if a three-year Short-Term Payout is elected for Annual Deferral Amounts that are deferred in the Plan Year commencing January 1, 2001, the three-year Short-Term Payout would become payable during a sixty (60) day period commencing January 1, 2005.

(c)

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

(d)

Notwithstanding any other provision in this Plan to the contrary, the Short-Term Payout described in this Section will only be available with respect to Annual Deferral Amounts which are deferred after the Effective Date and will specifically not be available to amounts which were deferred by a Participant pursuant to the provisions of a Predecessor Plan.

No amounts deferred or credited hereunder on or after January 1, 2005 will be eligible for short-term payout under this Section 5.010.

5.020 Withdrawal for Unforeseeable Financial Emergencies . In the event that any Participant should encounter an Unforeseeable Financial Emergency, such Participant may for amounts deferred or credited hereunder prior to January 1, 2005:

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

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

(b)	the amount reasonably needed to satisfy the Unforeseeable Financial Emergency (which may include amounts necessary to pay any Federal, state or local income taxes or penalties reasonably anticipated to result from the distribution).

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

No amounts deferred or credited hereunder on or after January 1, 2005 will be eligible for early withdrawal under this Section 5.020.

5.030 Withdrawal Election . With respect to Account Balances hereunder associated with Plan Year’s prior to January 1, 2005, a Participant (or, after a Participant’s death, the Participant’s Beneficiary) may elect, at any time, to withdraw some or all of the Participant’s Account Balance, even though the Participant (or the Participant’s Beneficiary) has not encountered an Unforeseeable Financial Emergency at the time of such withdrawal, but the withdrawal will be subject to the provisions of this Section.

(a)	The amount of the withdrawal will be subject to imposition of a withdrawal penalty equal to ten percent (10%) of such amount (the net amount being referred to in this Section as the “Withdrawal Amount”).

(b)	Such an election may be made at any time, before or after the Participant’s Retirement, Disability, death or Termination of Employment, and whether or not the Participant (or Beneficiary) is in the process of being paid pursuant to an installment payment schedule.

The Participant (or his Beneficiary) will be required to make this election by giving the Committee or its delegate advance written notice of the election in a form determined from time to time by the Committee or its delegate. Effective January 1, 2005, a withdrawal election may only be made pursuant to this Section 5.030 at a time when the Participant has no Deferral Elections in effect under Sections 3.010 or 3.020 of this Plan. The Participant (or his Beneficiary) will be paid the Withdrawal Amount within sixty (60) days of his election. Once a Withdrawal Amount has been paid, the Participant’s participation in the Plan will be suspended and the Participant will not be eligible to elect Base Annual Salary Deferrals and Incentive Compensation Deferrals, nor will he be eligible to have Annual Company Match Amounts credited to his Company Match Account, during the three-year period immediately following payment of the Withdrawal amount; provided, however, that such Participant will be eligible to have a pro rata portion of the Company Match Amount attributable to the portion of the Plan Year immediately prior to such a withdrawal credited to his Company Match Account. The payment of this Withdrawal Amount will not be subject to the Deduction Limitation.

No amounts deferred or credited hereunder on or after January 1, 2005 will be eligible for withdrawal under this Section 5.030.

5.040 Inclusion in Income Under Section 409A . Notwithstanding any other provision of this Plan, in the event this Plan fails to satisfy the requirements of Code Section 409A and regulations thereunder with respect to any Participant, there shall be distributed to such Participant as promptly as possible after the Committee becomes aware of such fact of noncompliance such portion of the Participant’s Account balance hereunder as is included in income as a result of the failure to comply, but no more.

ARTICLE VI: RETIREMENT BENEFITS

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

6.020 Payment of Retirement Benefit . A Participant, in connection with his commencement of participation in the Plan, may elect in his Deferral Election Form to receive the Retirement Benefit in a lump sum or pursuant to an Annual Installment Method of periods of from two (2) through fifteen (15) years. Subject to the provisions of Section 6.025, a Participant may change any election he has previously made to a different payout period permitted hereunder, but only one such a change may be made with respect to any single election. Such change will be accomplished by the Participant submitting notice of such change to the Committee or its delegate in the form prescribed by the to the Committee, but such change will not be valid, unless it has been submitted by the Participant and accepted by the Committee or its delegate (in the Committee’s or delegate’s discretion) at least one (1) year prior to the Participant’s Retirement. The Deferral Agreement most recently accepted by the Committee or its delegate shall govern the payout of the Retirement Benefit. If a Participant does not make any election with respect to the payment of the Retirement Benefit, then such benefit shall be payable in a lump sum. Any payment made shall be subject to the Deduction Limitation.

A lump sum payment of amounts deferred and credited hereunder on or after January 1, 2005 may not be made, nor may installment payments of such amounts commence herefrom, earlier than July 1 ^st of the Plan Year following the Plan Year during which a Participant Retires. Payment of amounts deferred or credited hereunder prior to January 1, 2005 shall be made or commence in February of the Plan Year following the Plan Year during which the Participant Retires.

6.025 Changes to Retirement Benefit Payment Methods .

(a)	A Participant may change any election he has previously made pursuant to Section 6.020, but; provided, however, that only one such change may be made and that with respect to amounts deferred or credited hereunder on or after January 1, 2005, any such change must:

(1)

not result in the acceleration of payments;

(2)

not be effective for 12 months after such change is made;

(3)

result in the deferral of payments with respect to which the election is changed for a period of at least 5 years (e.g., change from lump sum to installments commencing 5 years from a participant’s termination date);

(4)

not be made less than 12 months prior to the first scheduled payment.

(b)

Notwithstanding subsection 6.020(a), a Participant may make a new election applicable to such Participant’s Account during the transition period specified in the final regulations issued under Code Section 409A, so long as such election satisfies the requirements for new elections contained in the final regulations issued under Code Section 409A.

(c)	The change in election described in this Section 6.025 is not available for amounts deferred or credited hereunder prior to January 1, 2005.

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

6.040 Death Prior to Retirement . If a Participant dies while still employed with the Company and prior to Retirement, the Participant’s benefits shall be paid to the Participant’s Beneficiary over the number of years and in the same amounts as that benefit would have been paid to the Participant had the Participant survived to Retirement.

6.050 Small Accounts . Notwithstanding any other provision herein to the contrary, if the aggregate total of a Participant’s Account Balance along with the value of such Participant’s account balance or benefits under any other plan of the Company with which this Plan is required to be aggregated with under Section 409A of the Code as of such Participant’s Retirement date does not exceed the dollar amount of the deferral limit then in effect under Section 402(g) of the Code, the Participant’s Retirement Benefit shall be paid in a lump sum. A lump sum payment may not be made earlier than July 1 of the Plan Year following the Plan Year during which the Participant Retires.

ARTICLE VII: TERMINATION BENEFIT

7.010 Termination Benefit . Subject to the Deduction Limitation, the Participant will receive a Termination Benefit, which will be equal to the Participant’s Account Balance if a Participant experiences a Termination of Employment prior to his Retirement, death or Disability.

7.020 Payment of Termination Benefit . The form of payment of a Participant’s Account Balance, if such payment is due to the Participant’s Termination of Employment will in all cases be a lump sum. A lump sum payment of amounts deferred or credited hereunder on or after January 1, 2005 may not be made earlier than July 1 of the Plan Year following the Plan Year during which the Participant terminates. Payment of amounts deferred or credited hereunder prior to January 1, 2005 shall be made in February of the Plan Year following the Plan Year during which the Participant terminates.

ARTICLE VIII: DISABILITY WAIVER AND BENEFIT

8.010 Continued Eligibility; Disability Benefit . A Participant suffering a Disability will receive a Disability Benefit equal to his Account Balance at the time of the Disability determination; provided, however, that should the Participant otherwise have been eligible to Retire, he or she will be paid in accordance with Article VI. The Disability Benefit will be paid in a lump sum within sixty (60) days of the Disability determination. Any payment made will be subject to the Deduction Limitation.

ARTICLE IX: BENEFICIARY DESIGNATION

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

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

9.030 Spousal Consent Required . If a Participant names someone other than his spouse as a Beneficiary, a spousal consent, in the form designated by the Third-Party Administrator, must be signed by that Participant’s spouse and returned to the Third-Party Administrator.

9.040 Acknowledgment . No designation or change in designation of a Beneficiary will be effective until received by the Third-Party Administrator.

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

9.060 Doubt as to Beneficiary . If the Committee or its delegate has any doubt as to the proper Beneficiary to receive payments pursuant to this Plan, the Committee or its delegate will have the right, exercisable in its discretion, to withhold such payments until this matter is resolved to the Committee’s or the delegate’s satisfaction.

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

ARTICLE X: LEAVE OF ABSENCE

10.010 Paid Leave of Absence . If a Participant is authorized by the Company or the Affiliate employing the Participant for any reason to take a paid leave of absence, the Participant will continue to be considered to be an Employee and the Annual Deferral Amount will continue to be withheld during such paid leave of absence.

10.020 Unpaid Leave of Absence . If a Participant is authorized by the Company or the Affiliate employing the Participant to take an unpaid leave of absence, the Participant will continue to be considered to be an Employee and the Participant will be excused from making deferrals until the earlier of the date the leave of absence expires or the Participant returns to a paid employment status. Upon such expiration or return, deferrals will resume for the remaining portion of the Plan Year in which the expiration or return occurs, based on the Deferral Election, if any, made for that Plan Year. If no Deferral Election was made for that Plan Year, no deferral will be withheld.

ARTICLE XI: TERMINATION, AMENDMENT OR MODIFICATION

11.010 Termination . Although the Company and each Affiliate anticipates that it will continue the Plan for an indefinite period of time, there is no guarantee that the Company or any such Affiliate will continue the Plan or will not terminate the Plan at any time in the future. Accordingly, the Company reserves the right to discontinue sponsorship of the Plan and/or to terminate the Plan at any time with respect to any or all of its participating Employees, by action of the Board of Directors.

If this Plan is terminated, no additional deferrals or contributions shall be credited to any Participant Account hereunder. Following Plan termination, Participants’ Accounts shall be paid at such time and in such form as provided under the Plan. Notwithstanding the preceding sentence, either at the time of termination or on a subsequent date the Company may, in its discretion, determine to distribute the then existing Account balances of Participants and Beneficiaries and, following such distribution, there shall be no further obligation to any Participant or Beneficiary under this Plan; provided, however, that the authority granted to the Company under this sentence shall be implemented only to the extent permissible under Code Section 409A and regulations and other guidance issued by the Internal Revenue Service interpreting the provisions of that Section.

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

(a)

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

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

Notwithstanding the foregoing, the Committee may make any amendment it deems necessary or desirable for purposes of compliance with the requirements of Code Section 409A and regulations thereunder.

Further notwithstanding the foregoing, the Company’s Vice President of Compensation and Benefits may, at any time prior to the beginning of a Plan Year, amend the Base Annual Salary minimum requirement for purposes of the definition of Eligible Employee in Section 1.220 of this Plan to be effective for such Plan Year.

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

ARTICLE XII: ADMINISTRATION

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

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

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

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

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

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

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

(b)

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

(c)

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

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.

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

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

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

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

ARTICLE XIII: OTHER BENEFITS AND AGREEMENTS

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

ARTICLE XIV: CLAIMS PROCEDURE

14.010 Presentation of Claim . Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the Committee or its delegate a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant. All other claims must be made within one hundred and eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.

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

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

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

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

(1)

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

(2)

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

(3)

an explanation of the claim review procedure set forth in Section 14.030 below.

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

(a)	may review pertinent documents;

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

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

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

(a)	specific reasons for the decision;

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

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

14.050 Legal Action . A Claimant’s compliance with the foregoing provisions of this Article 14 is a mandatory prerequisite to a Claimant’s right to commence any legal action with respect to any claim for benefits under this Plan.

ARTICLE XV: TRUST

15.010 Establishment of the Trust . The Company previously established 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). After the Trust has become irrevocable with respect to the Plan, except as otherwise provided in the Trust agreement, the Trust shall remain irrevocable with respect to the Plan until all benefits due under this Plan and benefits and account balances due to participants and beneficiaries under any other plan covered by the Trust have been paid in full.

15.020 Interrelationship of the Plan and the Trust . The provisions of the Plan and each Participant’s Deferral Election Forms 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.

15.030 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.

15.040 Rabbi Trust . The Rabbi Trust shall:

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

(b)	become irrevocable upon a Change of Control (to the extent not then irrevocable); 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.

ARTICLE XVI: MISCELLANEOUS

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

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

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

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

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

16.060 Furnishing Information . A Participant or his Beneficiary will cooperate with the Committee or its delegate by furnishing any and all information requested by the Committee or its delegate and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Committee or its delegate may deem necessary.

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

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

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

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

Vice President, Compensation and Benefits

Rockwell Automation, Inc.

1201 South Second Street

Milwaukee, Wisconsin 53204

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

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

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

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

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

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

16.150 Court Order . The Committee or its delegate is authorized to make any payments directed by court order in any action in which the Plan or the Committee has been named as a party. In addition, if a court determines that a spouse or former spouse of a Participant has an interest in the Participant’s benefits under the Plan in connection with a property settlement or otherwise, the Committee or its delegate, in its sole discretion, will have the right, notwithstanding any election made by a Participant, to immediately distribute the spouse’s or former spouse’s interest in the Participant’s benefits under the Plan to that spouse or former spouse.

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

16.170 Legal Fees To Enforce Rights After Change of Control . The Company is aware that upon the occurrence of a Change of Control, the Board of Directors (which might then be composed of new members) or a shareholder of the Company or of any successor corporation might then cause or attempt to cause the Company, an Affiliate or such successor to refuse to comply with its obligations under the Plan and might cause or attempt to cause the Company or the Affiliate to institute, or may institute, litigation seeking to deny Participants the benefits intended under the Plan. In these circumstances, the purpose of the Plan could be frustrated. Accordingly, if, following a Change of Control, it should appear to any Participant that the Company, an Affiliate of the Company or any successor corporation has failed to comply with any of its obligations under the Plan or any agreement thereunder or, if the Company, such Affiliate or any other person takes any action to declare the Plan void or unenforceable or institutes any litigation or other legal action designed to deny, diminish or to recover from any Participant the benefits intended to be provided, then the Company irrevocably authorizes such Participant to retain counsel of his choice at the expense of the Company to represent such Participant in connection with the initiation or defense of any litigation or other legal action, whether by or against the Company, one or more of its Affiliates or any director, officer, shareholder or other person affiliated with the Company, any such Affiliate any successor thereto in any jurisdiction.

16.180 Requirement for Release . Any payment to any Participant or a Participant’s present, future or former spouse or Beneficiary in accordance with the provisions of this Plan will, to the extent thereof, be in full satisfaction of all claims against the Plan, the Trustee and the Company, and the Trustee may require such Participant or Beneficiary, as a condition precedent to such payment to execute a receipt and release to such effect.

Appendix A

PREDECESSOR PLAN PROVISIONS

The following provisions shall apply with respect to the Participants, as applicable, in the Rockwell Predecessor Plans.

I.	Accounts.

With respect to a Participant’s incentive compensation deferrals under one of the Predecessor Plans for periods prior to the Effective Date, the value of any such Participant’s account will be determined as of the last day of a calendar year quarter (the “Determination Date”) and will be equal to the total of the Participant’s Lump Sum Payment and Installment Payment Sub-Accounts.

The value of each such Sub-Account will consist of:

(1)

the balance of such Sub-Account as of the last preceding Determination Date, plus

(2)

any Deferred Compensation credited to such Sub-Account since the last preceding Determination date, plus

(3)

the sum of the three (3) monthly amounts determined by multiplying the average daily balance of such Sub-Account during each of the three calendar months since the last preceding Determination Date by the Interest Rate applicable to such month, minus

(4)

the amount of all Plan Benefits, if any, paid during the period since the last preceding Determination Date.

Interest, determined as provided in (3) above, will be credited to each such Sub-Account as of the Determination Date as of which such Sub-Account is valued.

II.

Retirement Distributions and Withdrawals of Predecessor Plan Accounts.

(a)

With respect to the provisions of the Predecessor Plans which were in effect immediately prior to the Effective Date of this Plan as they regard benefits payable at retirement or employment termination to a Participant, or at the time of a Participant’s death, to his Beneficiary, such provisions shall remain in effect hereunder, but only with respect to amounts deferred prior to the Effective Date of this Plan (and earnings thereon pursuant to the preceding Section of this Appendix).

(b)

No Plan Benefit shall be payable to a Participant in one of the Predecessor Plans prior to his termination of employment, except that, in the case of the Rockwell Predecessor Plan, the Committee or its delegate may permit a Participant or, after a Participant’s death, a Participant’s Beneficiary or other person or entity entitled to receive such Predecessor Plan benefit to withdraw from his Account prior to his termination of employment:

(1)

an amount necessary to meet a financial hardship, or

(2)

his entire Account balance

Either type of withdrawal shall be requested by written notice to the Committee or its delegate and the amount of the withdrawal shall be paid within forty-five (45) days after receipt of the written notice.

III.

Funding of Rabbi Trust for Account Balances upon Change of Control.

The Company shall fund the Trust in immediately available funds for the benefit of each Participant, surviving spouse, joint annuitant or beneficiary with respect to Accounts under the Predecessor Plans in accordance with the terms of the Trust. Such trust, as it regards such Predecessor Plan amounts, shall:

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

(b)	become irrevocable upon a change of Control (to the extent not then irrevocable); 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.

Table of Contents


		Page
ARTICLE I:	DEFINITIONS	3

ARTICLE II:	PARTICIPATION	12

ARTICLE III:	DEFERRAL AND COMPANY MATCH CREDITS	13

ARTICLE IV:	PLAN ACCOUNTS	14

ARTICLE V:	SHORT-TERM PAYOUTS AND WITHDRAWALS	16

ARTICLE VI:	RETIREMENT BENEFITS	18

ARTICLE VII:	TERMINATION BENEFIT	20

ARTICLE VIII:	DISABILITY WAIVER AND BENEFIT	20

ARTICLE IX:	BENEFICIARY DESIGNATION	21

ARTICLE X:	LEAVE OF ABSENCE	21

ARTICLE XI:	TERMINATION, AMENDMENT OR MODIFICATION	22

ARTICLE XII:	ADMINISTRATION	23

ARTICLE XIII:	OTHER BENEFITS AND AGREEMENTS	24

ARTICLE XIV:	CLAIMS PROCEDURE	25

ARTICLE XV:	TRUST	26

ARTICLE XVI:	MISCELLANEOUS	27

-i-

Exhibit 10.3

ROCKWELL AUTOMATION, INC.

MEMORANDUM OF AMENDMENTS

TO THE ROCKWELL AUTOMATION, INC.

2003 DIRECTORS STOCK PLAN

ADOPTED BY THE BOARD OF DIRECTORS ON NOVEMBER 7, 2007

Amend the second paragraph of Section 6 of the Plan to read in its entirety as follows:

Each Non-Employee Director may elect each year, not later than December 31 of the year preceding the year in which the annual award of Shares is to be made, to receive the annual award in the form of restricted stock units (Restricted Stock Units) in a number equal to the Annual Share Amount. Each Restricted Stock Unit shall entitle the recipient to receive one Share on the day on which the recipient retires from the Board under the Board’s retirement policy or the recipient resigns from the Board or ceases to be a director by reason of the antitrust laws, compliance with Rockwell Automation’s conflict of interest policies, death, disability or other circumstances the Board determines not to be adverse to the best interests of Rockwell Automation, provided that such retirement or resignation constitutes a “separation from service” within the meaning of Section 409A of the Internal Revenue Code and the regulations and other guidance promulgated thereunder (“Section 409A”). If such retirement or resignation does not so constitute such a “separation from service”, each Restricted Stock Unit shall entitle the recipient to receive one Share upon such “separation from service”. From the date of grant of Restricted Stock Units under the Plan until delivery of the Shares underlying such Restricted Stock Units in accordance with the terms of the Plan, the recipient will be entitled to receive dividend equivalents in respect of each Restricted Stock Unit in an amount equal to the amount or value of any cash or other dividends or distributions payable on an equivalent number of Shares at the times such dividends or distributions are payable in respect of the Shares. Any recipient who holds Restricted Stock Units shall have no ownership interest in any Shares underlying Restricted Stock Units until and unless payment with respect to such Restricted Stock Units is actually made in Shares. If a Change of Control as defined in Article III, Section 13(I)(1) of Rockwell Automation’s By-Laws shall occur that meets the requirements of a “Change of Control Event” (as defined under Treasury Regulation Section 1.409A-3(i)(5)(v)-(vii), applying the default rules and percentages set forth in such regulation under Section 409A), then Shares underlying Restricted Stock Units granted under the Plan shall be delivered as promptly as practicable to the Non-Employee Directors in whose names they are registered and in any event within the year in which such “Change of Control Event” occurs.

Amend Sections 8(a), 8(c) and 8(d) of the Plan by deleting the phrase “Restricted Shares” in all places it appears therein and inserting in lieu thereof in all such places the phrase “Restricted Stock Units”.

Amend Section 8(b) of the Plan to read in its entirety as follows:

Each Non-Employee Director may elect each year, not later than December 31 of the year preceding the year as to which an election is to be applicable, to receive all or any part of the cash portion of his or her retainer or other fees to be paid for board, committee or other service in the following calendar year through the delivery of a whole number of Restricted Stock Units determined by dividing such retainer amount by the Fair Market Value of the Shares on the date when each payment of such retainer amount would otherwise be made in cash (or on the next preceding day that Shares were traded if they were not traded on such date) and rounding up to the next higher whole number.

Exhibit 10.4

MEMORANDUM OF PROPOSED AMENDMENT AND

RESTATEMENT OF THE ROCKWELL AUTOMATION, INC. 2000

LONG-TERM INCENTIVES PLAN, AS AMENDED

(November 7, 2007)

It is proposed that the Rockwell Automation, Inc. 2000 Long-Term Incentives Plan (the “Plan”) be amended and restated in its entirety, effective as of January 1, 2005, to make certain changes in respect of Section 409A of the Internal Revenue Code of 1986, as amended, including to add the Section 409A definition of change of control and to revise the provisions related to the deferral of awards and payment of awards to satisfy the requirements for exemption under Section 409A. The amended and restated Plan shall be in the form set forth in the document attached hereto, subject to technical revisions that may be made, but which will not affect the substance of the Plan’s terms and provisions.

ROCKWELL AUTOMATION, INC.

2000 LONG-TERM INCENTIVES PLAN

(As Amended through November 7, 2007)

Section 1: Purpose

The purpose of the Plan is to promote the interests of the Corporation (as defined in Section 2) and its shareowners by providing incentive compensation opportunities to assist in (i) attracting, motivating and retaining Employees (as defined in Section 2) and (ii) aligning the interests of Employees participating in the Plan with the interests of the Corporation’s shareowners.

Section 2: Definitions

As used in the Plan, the following terms shall have the respective meanings specified below.

“Award” means an award granted pursuant to Section 4.

“Award Agreement” means a document described in Section 6 setting forth the terms and conditions applicable to an Award granted to a Participant.

“Board of Directors” means the Board of Directors of the Corporation, as it may be comprised from time to time.

“Change of Control” means any of the following:

(i)

The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of 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 (A) the then outstanding shares of common stock of the Corporation (the “Outstanding Rockwell Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the “Outstanding Rockwell Voting Securities”); provided, however, that for purposes of this subparagraph (i), the following acquisitions shall not constitute a Change of Control: (w) any acquisition directly from the Corporation, (x) any acquisition by the Corporation, (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any corporation controlled by the Corporation or (z) any acquisition pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) of this Section 2(d); or

(ii)

Individuals who, as of December 1, 1999, constitute the Board of Directors (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 Corporation’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

(iii)

Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Corporation or the acquisition of assets of another entity (a “Corporate Transaction”), in each case, unless, following such Corporate Transaction, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Rockwell Common Stock and Outstanding Rockwell Voting Securities immediately prior to such Corporate Transaction beneficially own, directly or indirectly, more than 60% 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 Corporate Transaction (including, without limitation, a corporation which as a result of such transaction owns the Corporation or all or substantially all of the Corporation’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Rockwell Common Stock and Outstanding Rockwell Voting Securities, as the case may be, (B) no Person (excluding any employee benefit plan (or related trust) of the Corporation or such corporation resulting from such Corporate Transaction) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Corporate 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 Corporate Transaction and (C) at least a majority of the members of the board of directors of the corporation resulting from such Corporate 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 Corporate Transaction; or

(iv)

Approval by the Corporation’s shareowners of a complete liquidation or dissolution of the Corporation.

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

“Committee” means the Compensation and Management Development Committee of the Board of Directors, as it may be comprised from time to time.

“Corporation” means Rockwell Automation, Inc. and any successor thereto.

“Covered Employee” means a covered employee within the meaning of Code Section 162(m)(3).

“Dividend Equivalent” means an amount equal to the amount of cash dividends payable with respect to a share of Stock after the date specified in an Award Agreement with respect to an Award settled in Stock or an Award of Restricted Stock.

“Employee” means an individual who is an employee or a leased employee of, or a consultant to, the Corporation or a Subsidiary, but excludes members of the Board of Directors who are not also employees of the Corporation or a Subsidiary.

“Exchange Act” means the Securities Exchange Act of 1934, and any successor statute, as it may be amended from time to time.

“Executive Officer” means an Employee who is an executive officer of the Corporation as defined in Rule 3b-7 under the Exchange Act as it may be amended from time to time.

“Fair Market Value” means the closing sale price of the Stock as reported in the New York Stock Exchange—Composite Transactions (or if the Stock is not then traded on the New York Stock Exchange, the closing sale price of the Stock on the stock exchange or over-the-counter market on which the Stock is principally trading on the relevant date) on the date of a determination (or on the next preceding day the Stock was traded if it was not traded on the date of a determination).

“Incentive Stock Option” means an Option (or an option to purchase Stock granted pursuant to any other plan of the Corporation or a Subsidiary) intended to comply with Code Section 422.

“Non-Qualified Stock Option” means an Option that is not an Incentive Stock Option.

“Option” means an option to purchase Stock granted pursuant to Section 4(a).

“Participant” means (i) Any Employee who has been granted an Award; (ii) any Employee (a Continuing Rockwell Collins Participant) as of the opening of business on the Rockwell Collins Distribution Date who then held one or more outstanding Awards and who on or before the close of business on the Rockwell Collins Distribution Date remained or became an employee of Rockwell Collins or any of its subsidiaries, but only for purposes of determining such an Employee’s rights with respect to his or her outstanding Awards and only so long as such an Employee shall remain an employee of Rockwell Collins or any of its subsidiaries; and (iii) any Employee (a Continuing Rockwell Science Center Participant) as of the opening of business on the Rockwell Collins Distribution Date who then held one or more outstanding Awards and who on or before the close of business on the Rockwell Collins Distribution Date remained or became an employee of Rockwell Science Center or any of its subsidiaries, but only for purposes of determining such an Employee’s rights with respect to his or her outstanding Awards and only so long as such an Employee shall remain an employee of Rockwell Science Center or any of its subsidiaries.

“Performance Goal” means the level of performance, whether absolute or relative to a peer group or index, established by the Committee as the performance goal with respect to a Performance Measure. Performance Goals may vary from Performance Period to Performance Period and from Participant to Participant and may be established on a stand-alone basis, in tandem or in the alternative.

“Performance Formula” means, for a Performance Period, one or more objective formulas or standards established by the Committee for purposes of determining whether or the extent to which an Award has been earned based on the level of performance attained with respect to one or more Performance Goals. Performance Formulas may vary from Performance Period to Performance Period and from Participant to Participant and may be established on a stand-alone basis, in tandem or in the alternative.

“Performance Measure” means one or more of the following selected by the Committee to measure the performance of the Corporation, a business unit (which may but need not be a Subsidiary) of the Corporation or both for a Performance Period: basic or diluted earnings per share; revenue; operating income; earnings before or after interest, taxes, depreciation or amortization; return on capital; return on equity; return on assets; cash flow; working capital; stock price and total shareholder return. Each such measure shall be determined in accordance with generally accepted accounting principles as consistently applied by the Corporation and, if so determined by the Committee at the time the Award is granted and to the extent permitted under Code Section 162(m), adjusted to omit the effects of extraordinary items, gain or loss on the disposal of a business segment, unusual or infrequently occurring events and transactions and cumulative effects of changes in accounting principles. Performance Measures may vary from Performance Period to Performance Period and from Participant to Participant and may be established on a stand-alone basis, in tandem or in the alternative.

“Performance Period” means one or more periods of time (of not less than one fiscal year of the Corporation), as the Committee may designate, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s rights in respect of an Award.

“Performance Share” means an Award denominated in Stock granted pursuant to Section 4(e).

“Performance Unit” means an Award denominated in cash granted pursuant to Section 4(d).

“Plan” means this 2000 Long-Term Incentives Plan as adopted by the Corporation and in effect from time to time.

“Restricted Stock” means an Award of Stock subject to restrictions granted pursuant to Section 4(c).

“Rockwell Collins” means Rockwell Collins, Inc., a Delaware corporation, and any successor thereto.

aa.

“Rockwell Collins Distribution Date” means the Distribution Date as defined in the Distribution Agreement, dated as of June 29, 2001, by and among Rockwell, Rockwell Collins and Rockwell Science Center relating, among other things, to the distribution of shares of Rockwell Collins Common Stock to Rockwell’s shareowners.

bb .

“Rockwell Science Center” means Rockwell Scientific Company LLC, a Delaware limited liability company, and any successor thereto.

cc.

“SAR” means a stock appreciation right granted pursuant to Section 4(b).

dd.

“Section 409A” means Code Section 409A, including any regulations and other guidance issued thereunder by the Department of the Treasury and/or the Internal Revenue Service.

ee.

“Stock” means shares of Common Stock, par value $1 per share, of the Corporation or any security of the Corporation issued in substitution, exchange or lieu thereof.

ff.

“Subsidiary” means (i) any corporation or other entity in which the Corporation, directly or indirectly, controls 50% or more of the total combined voting power of such corporation or other entity and (ii) any corporation or other entity in which the Corporation has a significant equity interest and which the Committee has determined to be considered a Subsidiary for purposes of the Plan.

Section 3: Eligibility

The Committee may grant one or more Awards to any Employee designated by it to receive an Award.

Section 4: Awards

The Committee may grant any one or more of the following types of Awards, and any such Award may be granted by itself, together with another Award that is linked and alternative to the Award with which it is granted or together with another Award that is independent of the Award with which it is granted:

Options. An Option is an option to purchase a specified number of shares of Stock exercisable at such time or times and subject to such terms and conditions as the Committee may determine consistent with the provisions of the Plan, including the following:

(i)

The exercise price of an Option shall not be less than 100% of the Fair Market Value of the Stock on the date the Option is granted, and no Option may be exercisable more than 10 years after the date the Option is granted.

(ii)

The exercise price of an Option shall be paid in cash or, at the discretion of the Committee, in Stock or in a combination of cash and Stock. Any Stock accepted in payment of the exercise price of an Option shall be valued at its Fair Market Value on the date of exercise.

(iii)

No fractional shares of Stock will be issued or accepted. The Committee may impose such other conditions, restrictions and contingencies with respect to shares of Stock delivered pursuant to the exercise of an Option as it deems desirable.

(iv)

Incentive Stock Options shall be subject to the following additional provisions:

No grant of Incentive Stock Options to any one Employee shall cover a number of shares of Stock whose aggregate Fair Market Value (determined on the date the Option is granted), together with the aggregate Fair Market Value (determined on the respective date of grant of any Incentive Stock Option) of the shares of Stock covered by any Incentive Stock Options which have been previously granted under the Plan or any other plan of the Corporation or any Subsidiary and which are exercisable for the first time during the same calendar year, exceeds $100,000 (or such other amount as may be fixed as the maximum amount permitted by Code Section 422(d)).

No Incentive Stock Option may be granted under the Plan after November 30, 2009.

No Incentive Stock Option may be granted to an Employee who on the date of grant is not an employee of the Corporation or a corporation that is a subsidiary of the Corporation within the meaning of Code Section 424(f).

Stock Appreciation Rights (SARs). A SAR is the right to receive a payment measured by the increase in the Fair Market Value of a specified number of shares of Stock from the date of grant of the SAR to the date on which the Participant exercises the SAR. SARs may be (i) freestanding SARs or (ii) tandem SARs granted in conjunction with an Option, either at the time of grant of the Option or at a later date, and exercisable at the Participant’s election instead of all or any part of the related Option. The payment to which the Participant is entitled on exercise of a SAR may be in cash, in Stock valued at Fair Market Value on the date of exercise or partly in cash and partly in Stock, as the Committee may determine.

Restricted Stock. Restricted Stock is Stock that is issued to a Participant subject to restrictions on transfer and such other restrictions on incidents of ownership as the Committee may determine, including but not limited to the achievement of one or more specific goals with respect to performance of the Corporation, a business unit (which may but need not be a Subsidiary) of the Corporation or that Participant over a specified period of time. Subject to the specified restrictions, the Participant as owner of those shares of Restricted Stock shall have the rights of the holder thereof, except that the Committee may provide at the time of the Award that any dividends or other distributions paid with respect to that Stock while subject to those restrictions shall be accumulated, with or without interest, or reinvested in Stock and held subject to the same restrictions as the Restricted Stock and such other terms and conditions as the Committee shall determine. Shares of Restricted Stock shall be registered in the name of the Participant and, at the Corporation’s sole discretion, shall be held in book entry form subject to the Corporation’s instructions or shall be evidenced by a certificate, which shall bear an appropriate restrictive legend, shall be subject to appropriate stop-transfer orders and shall be held in custody by the Corporation until the restrictions on those shares of Restricted Stock lapse.

Performance Units. A Performance Unit is an Award denominated in cash, the amount of which may be based on the achievement of one or more specific goals with respect to performance of the Corporation, a business unit (which may but need not be a Subsidiary) of the Corporation or the Participant to whom the Performance Units are granted over a specified period of time. The maximum amount of compensation that may be paid to any one Participant with respect to Performance Units for any one Performance Period shall be $5 million. The payout of Performance Units may be in cash, in Stock, valued at Fair Market Value on the payout date (or at the sole discretion of the Committee, the day immediately preceding that date), or partly in cash and partly in Stock, as the Committee may determine.

Performance Shares. A Performance Shares is an Award denominated in Stock, the amount of which may be based on the achievement of one or more specific goals with respect to performance of the Corporation, a business unit (which may but need not be a Subsidiary) of the Corporation or the Participant to whom the Performance Shares are granted over a specified period of time. The payout of Performance Shares may be in Stock, in cash or partly in cash and partly in Stock, as the Committee may determine. Unless otherwise determined by the Committee, a grantee of Performance Shares shall not receive any dividends or other distributions paid with respect to such Performance Shares.

Performance Compensation Awards.

(i)

The Committee may, at the time of grant of an Award (other than an Option or SAR) designate such Award as a Performance Compensation Award in order that such Award constitute qualified performance-based compensation under Code Section 162(m); provided, however, that no Performance Compensation Award may be granted to an Employee who on the date of grant is a leased employee of, or a consultant to, the Corporation or a Subsidiary. With respect to each such Performance Compensation Award, the Committee shall (on or before the 90 ^th day of the applicable Performance Period), establish, in writing, a Performance Period, Performance Measure(s), Performance Goal(s) and Performance Formula(s). Once established for a Performance Period, such items shall not be amended or otherwise modified if and to the extent such amendment or modification would cause the compensation payable pursuant to the Award to fail to constitute qualified performance-based compensation under Code Section 162(m).

(ii)

A Participant shall be eligible to receive payment in respect of a Performance Compensation Award only to the extent that the Performance Goal(s) for that Award are achieved and the Performance Formula as applied against such Performance Goal(s) determines that all or some portion of such Participant’s Award has been earned for the Performance Period. As soon as practicable after the close of each Performance Period, the Committee shall review and determine whether, and to what extent, the Performance Goal(s) for the Performance Period have been achieved and, if so, determine the amount of the Performance Compensation Award earned by the Participant for such Performance Period based upon such Participant’s Performance Formula. The Committee shall then determine the actual amount of the Performance Compensation Award to be paid to the Participant and, in so doing, may in its sole discretion decrease, but not increase, the amount of the Award otherwise payable to the Participant based upon such performance. The maximum Performance Compensation Award for any one Participant for any one Performance Period shall be determined in accordance with Sections 4(d) and 5(b), as applicable.

Deferrals. The Committee may require or permit Participants to defer the issuance or vesting of shares of Stock or the settlement of Awards under such rules and procedures as it may establish under the Plan. The Committee may also provide that deferred settlements include the payment of, or crediting of interest on, the deferral amounts or the payment or crediting of Dividend Equivalents on deferred settlements in shares of Stock. Notwithstanding the foregoing, no deferral will be permitted if it will result in the Plan becoming an “employee pension benefit plan” under Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is not otherwise exempt under Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. Notwithstanding the foregoing, it is the intent of the Corporation that any deferral made under this Section 4(g) shall (A) satisfy the requirements for exemption under Section 409A or (B) satisfy the requirements of Section 409A.

Other Section 409A Provisions. In addition to the provisions related to the deferral of Awards under the Plan set forth in Section 4(g) and notwithstanding any other provision of the Plan to the contrary, the following provisions shall apply to Awards:

(i)

To the extent not otherwise set forth in the Plan, it is the intent of the Corporation that the Award Agreement for each Award shall set forth (or shall incorporate by reference to the Corporation’s Deferred Compensation Plan) such terms and conditions as are necessary to (A) satisfy the requirements for exemption under Section 409A or (B) satisfy the requirements of Section 409A; and

(ii)

Without limiting the generality of the foregoing, it is the intent of the Corporation that the payment of dividends on Restricted Stock or the payment of Dividend Equivalents on Performance Shares shall (A) satisfy the requirements for exemption under Section 409A or (B) satisfy the requirements of Section 409A, including without limitation, to the extent necessary, the establishment of a separate written arrangement providing for the payment of such dividends or Dividend Equivalents.

(iii)

Notwithstanding any other provision of this Plan or an Award Agreement to the contrary, any Performance Share Award granted under this Plan prior to November 7, 2007 shall be payable in the calendar year in which the Performance Period ends.

(iv)

Notwithstanding any other provision of this Plan to the contrary, the Corporation makes no representation that the Plan or any Award will be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to the Plan or any Award.

Section 5: Stock Available under Plan

Subject to the adjustment provisions of Section 9, the number of shares of Stock which may be delivered upon exercise of Options or upon grant or in payment of other Awards under the Plan shall not exceed 24 million, and the number of those shares which may be delivered upon grant or in payment of all Awards other than Options and SARs shall not exceed 4 million. In addition, (i) no more than 4 million shares of Stock shall be granted in the form of Restricted Stock or delivered in payment of Performance Shares; and (ii) SARs shall be granted with respect to no more than 100,000 shares of Stock. For purposes of applying the limitations provided in this Section 5(a), all shares of Stock with respect to the unexercised, undistributed or unearned portion of any terminated or forfeited Award shall be available for further Awards.

Subject to the adjustment provisions of Section 9, no single Participant shall receive, in any fiscal year of the Corporation, Awards in the form of (i) Options with respect to more than that number of shares of Stock determined by subtracting from 2,500,000 the number of shares of Stock with respect to which Options or options to purchase Stock under any other plan of the Corporation or a Subsidiary have been granted to such Participant during the immediately preceding four fiscal years of the Corporation; and (ii) Restricted Stock or Performance Shares for more than that number of shares of Stock determined by subtracting from 1,000,000 the number of shares of Stock granted as Restricted Stock or deliverable in payment of Performance Shares granted or granted as restricted stock or deliverable in payment of performance shares granted under any other plan or program of the Corporation or a Subsidiary to such Participant during the immediately preceding four fiscal years of the Corporation.

The Stock that may be delivered on grant, exercise or settlement of an Award under the Plan may be reacquired shares held in treasury or authorized but unissued shares; provided, however, that unless otherwise determined by the Committee, shares of Stock that may be granted as Restricted Stock or delivered in payment of Performance Shares shall consist only of reacquired shares.

Section 6: Award Agreements

Each Award under the Plan shall be evidenced by an Award Agreement. Each Award Agreement shall set forth the terms and conditions applicable to the Award, including but not limited to (i) provisions for the time at which the Award becomes exercisable or otherwise vests; (ii) provisions for the treatment of the Award in the event of the termination of a Participant’s status as an Employee and (iii) any special provisions applicable in the event of an occurrence of a Change in Control, as determined by the Committee consistent with the provisions of the Plan; and (iv) in the Committee’s sole discretion, any additional provisions as may be necessary to (A) satisfy the requirements for exemption under Section 409A or (B) satisfy the requirements of Section 409A.

Section 7: Amendment and Termination

The Board of Directors may at any time amend, suspend or terminate the Plan, in whole or in part; provided, however, that, without the approval of the shareowners of the Corporation, no such action shall (i) increase the number of shares of Stock available for Awards as set forth in Section 5 (other than adjustments pursuant to Section 9); or (ii) materially increase the benefits accruing to Participants under the Plan or otherwise make any material revision to the Plan, or otherwise be effective to the extent that such approval is necessary to comply with any tax or regulatory requirement applicable to the Plan, including applicable requirements of the New York Stock Exchange; and provided, further, that subject to Section 9, no such action shall impair the rights of any holder of an Award without the holder’s consent. The Committee may, subject to the Plan, at any time alter or amend any or all Award Agreements to the extent permitted by applicable law; provided, however, that subject to Section 9, no such alteration or amendment shall impair the rights of any holder of an Award without the holder’s consent. Notwithstanding the foregoing, neither the Board of Directors nor the Committee shall (except pursuant to Section 9) amend the Plan or any Award Agreement to reprice any Option or SAR whose exercise price is above the then Fair Market Value of the Stock subject to the Award, whether by decreasing the exercise price, canceling the Award and granting a substitute Award, or otherwise.

Section 8: Administration

The Plan and all Awards shall be administered by the Committee. The members of the Committee shall be designated by the Board of Directors from among its members who are not eligible for Awards under the Plan.

Any member of the Committee who, at the time of any proposed grant of one or more Awards, is not both an “outside director” as defined for purposes of Code Section 162(m) and a “Non-Employee Director” as defined in Rule 16b-3(b)(3)(i) under the Exchange Act shall abstain from and take no part in the Committee’s action on the proposed grant.

The Committee shall have full and complete authority, in its sole and absolute discretion, (i) to exercise all of the powers granted to it under the Plan, (ii) to construe, interpret and implement the Plan and any related document, (iii) to prescribe, amend and rescind rules relating to the Plan, (iv) to make all determinations necessary or advisable in administering the Plan, and (v) to correct any defect, supply any omission and reconcile any inconsistency in the Plan. The actions and determinations of the Committee on all matters relating to the Plan and any Awards will be final and conclusive. The Committee’s determinations under the Plan need not be uniform and may be made by it selectively among Employees who receive, or who are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated.

The Committee and others to whom the Committee has delegated such duties shall keep a record of all their proceedings and actions and shall maintain all such books of account, records and other data as shall be necessary for the proper administration of the Plan.

The Corporation shall pay all reasonable expenses of administering the Plan, including but not limited to the payment of professional fees.

It is the intent of the Corporation that the Plan and Awards hereunder satisfy, and be interpreted in a manner that satisfy, (i) in the case of Participants who are or may be Executive Officers, the applicable requirements of Rule 16b-3 under the Exchange Act, so that such persons will be entitled to the benefits of Rule 16b-3, or other exemptive rules under Section 16 of the Exchange Act, and will not be subjected to avoidable liability under Section 16(b) of the Exchange Act; and (ii) in the case of Performance Compensation Awards to Covered Employees, the applicable requirements of Code Section 162(m); and (iii) either the requirements for exemption under Section 409A or the requirements of Section 409A. If any provision of this Plan or of any Award Agreement would otherwise frustrate or conflict with the intent expressed in this Section 8(f), that provision to the extent possible shall be interpreted and deemed amended so as to avoid such conflict. To the extent of any remaining irreconcilable conflict with such intent, such provision shall be deemed void as to Executive Officers or Covered Employees, as applicable.

The Committee may appoint such accountants, counsel, and other experts as it deems necessary or desirable in connection with the administration of the Plan.

The Committee may delegate, and revoke the delegation of, all or any portion of its authority and powers to the Chief Executive Officer of the Corporation, except that the Committee may not delegate any discretionary authority with respect to substantive decisions or functions regarding the Plan or Awards to the extent inconsistent with the intent expressed in Section 8(f) or to the extent prohibited by applicable law.

Section 9: Adjustment Provisions

In the event of any change in or affecting the outstanding shares of Stock by reason of a stock dividend or split, merger or consolidation (whether or not the Corporation is a surviving corporation), recapitalization, reorganization, combination or exchange of shares or other similar corporate changes or an extraordinary dividend in cash, securities or other property, the Board of Directors shall make or take such amendments to the Plan and outstanding Awards and Award Agreements and such adjustments and actions thereunder as it deems appropriate, in its sole discretion, under the circumstances. Such amendments, adjustments and actions may include, but are not limited to, changes in the number of shares of Stock then remaining subject to the Plan, and the maximum number of shares that may be granted or delivered to any single Participant pursuant to the Plan, including those that are then covered by outstanding Awards, or accelerating the vesting of outstanding Awards.

The existence of the Plan and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Board of Directors or the shareowners of the Corporation to make or authorize any adjustment, recapitalization, reorganization or other change in the capital structure of its business, any merger or consolidation of the Corporation, any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Stock or the rights thereof, the dissolution or liquidation of the Corporation or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding.

Section 10: Miscellaneous

Change of Control. Except as otherwise determined by the Committee at the time of the grant of an Award, and except as is necessary to satisfy the requirements for exemption under Section 409A or the requirements of Section 409A (in which event, the Committee may determine to modify the definition of Change of Control in order to satisfy such requirements), upon a Change of Control, all outstanding Stock Options and SARs shall become vested and exercisable; all restrictions on Restricted Stock shall lapse; all performance goals shall be deemed achieved at levels determined by the Committee and all other terms and conditions met; all Performance Units and Performance Shares shall be paid out as promptly as practicable; and all other Awards shall be delivered or paid.

Nonassignability. Except as otherwise provided by the Committee, no Award shall be assignable or transferable except by will or by the laws of descent and distribution.

Other Payments or Awards. Nothing contained in the Plan shall be deemed in any way to limit or restrict the Corporation or a Subsidiary from making any award or payment to any person under any other plan, arrangement or understanding, whether now existing or hereafter in effect.

Payments to Other Persons. If payments are legally required to be made to any person other than the person to whom any payment is provided to be made under the Plan, the payments shall be made accordingly; provided however, to the extent that such payments would cause an Award to fail to satisfy the requirements for exemption under Section 409A or the requirements of Section 409A, the Committee may determine in its sole discretion not to make such payments in such manner. Any such payment shall be a complete discharge of the liability hereunder.

Unfunded Plan. The Plan shall be unfunded. No provision of the Plan or any Award Agreement shall require the Corporation or a Subsidiary, for the purpose of satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any assets, nor shall the Corporation or a Subsidiary maintain separate bank accounts, books, records or other evidence of the existence of a segregated or separately maintained or administered fund for such purposes. Participants shall have no rights under the Plan other than as unsecured general creditors of the Corporation or a Subsidiary, except that insofar as they may have become entitled to payment of additional compensation by performance of services, they shall have the same rights as other employees under generally applicable law.

Limits of Liability. Any liability of the Corporation or a Subsidiary to any Participant with respect to an Award shall be based solely upon contractual obligations created by the Plan and the Award Agreement. Neither the Corporation or its Subsidiaries, nor any member of the Board of Directors or of the Committee, nor any other person participating in any determination of any question under the Plan, or in the interpretation, administration or application of the Plan, shall have any liability to any party for any action taken, or not taken, in good faith under the Plan.

Rights of Employees. Status as an eligible Employee shall not be construed as a commitment that any Award shall be made under the Plan to such eligible Employee or to eligible Employees generally. Nothing contained in the Plan or in any Award Agreement shall confer upon any Employee or Participant any right to continue in the employ or other service of the Corporation or a Subsidiary or constitute any contract or limit in any way the right of the Corporation or a Subsidiary to change such person’s compensation or other benefits or to terminate the employment or other service of such person with or without cause. A transfer of an Employee from the Corporation to a Subsidiary, or vice versa, or from one Subsidiary to another, and a leave of absence, duly authorized by the Corporation, shall not be deemed a termination of employment or other service; provided, however, that, to the extent that Section 409A is applicable to an Award, Section 409A’s definition of “separation of service”, to the extent contradictory, may apply to determine when a Participant becomes entitled to a distribution upon termination of employment.

Rights as a Shareowner. A Participant shall have no rights as a shareowner with respect to any Stock covered by an Award until the date the Participant becomes the holder of record thereof. Except as provided in Section 9, no adjustment shall be made for dividends or other rights, unless the Award Agreement specifically requires such adjustment.

Withholding. Applicable taxes, to the extent required by law, shall be withheld in respect of all Awards. A Participant may satisfy the withholding obligation by paying the amount of any taxes in cash or, with the approval of the Committee, shares of Stock may be delivered to the Corporation or deducted from the payment to satisfy the obligation in full or in part. The amount of the withholding and the number of shares of Stock to be paid or deducted in satisfaction of the withholding requirement shall be determined by the Committee with reference to the Fair Market Value of the Stock when the withholding is required to be made; provided, however, that the amount of withholding to be paid in respect of Options exercised through the cashless method in which all shares of Stock for which the Options are exercised are immediately sold shall be determined by reference to the price at which said shares are sold. The Corporation shall have no obligation to deliver any Stock pursuant to the grant or settlement of any Award until it has been reimbursed for all required withholding taxes.

Section Headings. The section headings contained herein are for the purpose of convenience only, and in the event of any conflict, the text of the Plan, rather than the section headings, shall control.

Construction. In interpreting the Plan, the masculine gender shall include the feminine, the neuter gender shall include the masculine or feminine, and the singular shall include the plural unless the context clearly indicates otherwise. Any reference to a statutory provision or a rule under a statute shall be deemed a reference to that provision or any successor provision unless the context clearly indicates otherwise.

Invalidity. If any term or provision contained herein or in any Award Agreement shall to any extent be invalid or unenforceable, such term or provision will be reformed so that it is valid, and such invalidity or unenforceability shall not affect any other provision or part thereof.

Applicable Law. The Plan, the Award Agreements and all actions taken hereunder or thereunder shall be governed by, and construed in accordance with, the laws of the State of Delaware without regard to the conflict of law principles thereof.

Compliance with Laws. Notwithstanding anything contained herein or in any Award Agreement to the contrary, the Corporation shall not be required to sell, issue or deliver shares of Stock hereunder or thereunder if the sale, issuance or delivery thereof would constitute a violation by the Participant or the Corporation of any provisions of any law or regulation of any governmental authority or any national securities exchange; and as a condition of any sale or issuance the Corporation may require such agreements or undertakings, if any, as the Corporation may deem necessary or advisable to assure compliance with any such law or regulation.

Supplementary Plans. The Committee may authorize Supplementary Plans applicable to Employees subject to the tax laws of one or more countries other than the United States and providing for the grant of Non-Qualified Stock Options, SARs, Restricted Stock or Performance Shares to such Employees on terms and conditions, consistent with the Plan, determined by the Committee which may differ from the terms and conditions of other Awards in those forms pursuant to the Plan for the purpose of complying with the conditions for qualification of Awards for favorable treatment under foreign tax laws. Notwithstanding any other provision hereof, Options granted under any Supplementary Plan shall include provisions that conform with Sections 4(a)(i), (ii) and (iii); SARs granted under any Supplementary Plan shall include provisions that conform with Section 4(b); Restricted Stock granted under any Supplementary Plan shall include provisions that conform with Section 4(c); and Performance Shares granted under any Supplementary Plan shall include provisions that conform with Section 4(e).

Effective Date and Term. The Plan was adopted by the Board of Directors effective as of December 1, 1999, subject to approval by the Corporation’s shareowners. The Plan was amended effective as of January 1, 2005 to make changes in respect of Section 409A. The Committee may grant Awards prior to shareowner approval; provided, however, that Awards granted prior to such shareowner approval shall be automatically canceled if shareowner approval is not obtained on or before November 30, 2000; and provided, further, that no Award may be exercisable and no shares of Stock shall be delivered pursuant to the Plan prior to the date shareowner approval is obtained. The Plan shall remain in effect until all Awards under the Plan have been exercised or terminated under the terms of the Plan and applicable Award Agreements; provided, however, that Awards under the Plan may be granted only within ten (10) years from the effective date of the Plan.

Exhibit 10.5

December , 2007

To: «Full_Legal_Name»

We are pleased to notify you that you have been granted the following stock options (the “Options”) under the Rockwell Automation, Inc. 2000 Long-Term Incentives Plan, as amended (the “Plan”):


Date of Grant	Type of Grant	Number of Shares	Option Price
12/ /2007	ISO		$
12/ /2007	NQ		$

The Options are granted under and may be exercised only upon the terms and conditions of this Stock Option Agreement, subject in all respects to the provisions of the Plan, as it may be amended. The enclosed Stock Option Terms and Conditions are incorporated in and are part of this Stock Option Agreement. Other terms and conditions are substantially the same as any options previously granted.

All option holders must activate an account with our stock option administrator, Charles Schwab, in order to exercise their stock options. There is no cost to open or maintain this account. If you already have a Schwab account, you need not open another. Please note that if you fail to activate an account with Schwab, you will experience unnecessary delays in the exercise of your options. If you have questions regarding your account, please call Charles Schwab’s Customer Service Center at (877) 804-3529. You can also find account information at http://scs.schwab.com/rockwell .

In partial consideration for the grant of the Options to you, you undertake and agree by your acceptance of this Stock Option Agreement that

(a)

during your employment with the Corporation or a Subsidiary (as such terms are defined in the Plan) and for two years after the date of your retirement or other termination of such employment, you shall not (i) directly or indirectly, except with the approval of the Corporation, engage or otherwise participate in any business that is competitive with any significant line of business of the Corporation or any of its Subsidiaries (otherwise than through ownership of not more than 5% of the voting securities of any such competitive business); or (ii) solicit or induce, or cause any other person or entity to solicit, any employee of the Corporation or any of its Subsidiaries to leave his or her employment with the Corporation or any of its Subsidiaries to accept employment or other engagement with any other person or entity; and

(b)

in the event that you breach this undertaking, in addition to any and all other remedies the Corporation may have, (i) the Corporation shall have the right to determine by written notice to you that any of the Options then outstanding shall immediately lapse and cease to be exercisable; and (ii) you agree to pay the Corporation upon written demand the amount of the excess of the Fair Market Value (as defined in the Plan) of any shares of Stock (as defined in the Plan) you acquired upon exercise of any of the Options (other than Options exercised more than two years before the date of your retirement or other termination of employment) over the exercise price for such Stock.

If a Change of Control (as defined in the Plan) shall occur, however, the foregoing provisions (a) and (b) shall immediately terminate as of, and shall not limit your activities after, the date of such Change of Control.

A copy of the Plan and the Plan Prospectus are enclosed. Please carefully read the enclosed documents and retain them for future reference.

The Options will lapse and be of no effect if a copy of this Stock Option Agreement, properly signed by you, is not received by the Corporate Compensation Department at the following address on or before January 31, 2008 , unless Rockwell Automation (in its sole discretion) elects in writing to extend that date:

Rockwell Automation, Inc.

Mail Stop: W-8S28

Corporate Compensation

1201 South Second Street

Milwaukee, WI 53204



Agreed to:		ROCKWELL AUTOMATION, INC.
Date:
		By:

Employee Signature
Employee ID:		Senior Vice President, General Counsel and Secretary

Enclosures

ROCKWELL AUTOMATION, INC.

2000 LONG-TERM INCENTIVES PLAN, AS AMENDED

STOCK OPTION TERMS AND CONDITIONS

(December , 2007)

1.	Definitions

As used in these Stock Option Terms and Conditions, the following words and phrases shall have the respective meanings ascribed to them below unless the context in which any of them is used clearly indicates a contrary meaning:

(a)

Change of Control : Change of Control shall have the same meaning as such term has in the Plan.

(b)

Charles Schwab : Charles Schwab & Co., Inc., the stock option administrator whom Rockwell Automation has engaged to administer and process all Option exercises.

(c)

Corporation : Rockwell Automation and its Subsidiaries (as such term is defined in the Plan).

(d)

Customer Service Center : Charles Schwab’s Customer Service Center that is used to facilitate Option transactions. Contact Charles Schwab at (877) 804-3529.

(e)

Exercise Request and Attestation Form : The form attached as Exhibit 1 or any other form accepted by Charles Schwab in connection with the use of already-owned shares to pay all or part of the exercise price for the Option Stock to be purchased on exercise of any of the Options.

(f)

Notice of Exercise Form : The form attached as Exhibit 2 or any other form accepted by the Secretary of Rockwell Automation in his sole discretion.

(g)

Options : The stock option or stock options listed in the first paragraph of the Stock Option Agreement dated December , 2007 to which these Stock Option Terms and Conditions are attached.

(h)

Option Stock : The Stock issuable or transferable on exercise of the Options.

(i)

Plan : Rockwell Automation’s 2000 Long-Term Incentives Plan, as such Plan may be amended and in effect at the relevant time.

(j)

Rockwell Automation : Rockwell Automation, Inc., a Delaware corporation, and any successor thereto.

(k)

Stock : Stock shall have the same meaning as such term has in the Plan.

(l)

Stock Option Agreement : These Stock Option Terms and Conditions together with the Stock Option Agreement dated December , 2007 to which they are attached.

2.	When Options May be Exercised

The Options may be exercised, in whole or in part (but only for a whole number of shares of Stock) and at one time or from time to time, as to one-third (rounded to the nearest whole number) of the Option Stock granted as nonqualified stock options (NQs) and incentive stock options (ISOs) during the period beginning on December , 2008 and ending on December , 2017, as to an additional one-third (rounded to the nearest whole number) of the Option Stock granted as NQs and ISOs during the period beginning on December , 2009 and ending on December , 2017, and as to the balance of the Option Stock granted as NQs and ISOs during the period beginning on December , 2010 and ending on December , 2017, and only during those periods, provided that :

(a)

if you die while an Employee (as defined in the Plan), your estate, or any person who acquires the Options by bequest or inheritance, may exercise all the Options not theretofore exercised within (and only within) the period beginning on your date of death (even if you die before you have become entitled to exercise all or any part of the Options) and ending three years thereafter; and

(b)

if your employment by the Corporation terminates other than by death, then:

(i)

if your retirement or other termination date is before December , 2008, the Options shall lapse on your retirement or other termination and may not be exercised at any time;

(ii)

if your employment by the Corporation is terminated for cause, as determined by the Committee (as defined in the Plan), the Options shall expire immediately upon notification of your termination and may not be exercised thereafter;

(iii)

if your employment by the Corporation terminates on or after December , 2008 by reason of your retirement under a retirement plan of Rockwell Automation, or under a retirement plan of a subsidiary or affiliate of Rockwell Automation, and if you immediately begin either to receive pension payments under any such retirement plan or to receive retiree medical benefits, you (or if you die after your retirement date, your estate or any person who acquires the Options by bequest or inheritance) may thereafter exercise the Options within (and only within) the period starting on the date you would otherwise have become entitled to exercise the part of the Options so exercised and ending on the fifth anniversary of your retirement date; or if you retire prior to age 62, the earlier of (x) the fifth anniversary of your retirement date or (y) such earlier date as the Committee shall determine by action taken not later than 60 days after your retirement date; and

(iv)

if your employment by the Corporation terminates on or after December , 2008 for any reason not specified in subparagraph (a) or in clauses (ii) or (iii) of this subparagraph (b), you (or if you die after your termination date, your estate or any person who acquires the Options by bequest or inheritance) may thereafter exercise the Options within (and only within) the period ending three months after your termination date but only to the extent they were exercisable on your termination date.

For purposes of this Section 2, if you are placed on salary continuation status in connection with your separation from the Corporation, you will be treated as not having terminated your employment with the Corporation until the last date on which you receive salary continuation payments from the Corporation, at which time your employment by the Corporation will be deemed terminated.

In no event shall the provisions of the foregoing subparagraphs (a) and (b) extend to a date after December , 2017 the period during which the Options may be exercised.

Notwithstanding any other provision of this Agreement, if a Change of Control shall occur, then all Options then outstanding pursuant to this Agreement shall forthwith become fully exercisable whether or not then otherwise exercisable in accordance with their terms.

3.	Exercise Procedure

(a)

To exercise all or any part of the Options, you (or after your death, your estate or any person who has acquired the Options by bequest or inheritance) must first obtain authorization from Rockwell Automation’s Office of the Secretary by submitting a Notice of Exercise Form to Rockwell Automation’s Office of the Secretary (Attention: Stock Option Administration; facsimile number (414) 382-4013) or by other means acceptable to the Secretary of Rockwell Automation, and then contact the stock option administrator, Charles Schwab, by using the Customer Service Center as follows:

(i)

contact the Customer Service Center by calling (877) 804-3529, Monday through Friday 9 a.m. to 9 p.m., ET, and follow the instructions provided;

(ii)

the Customer Service Center confirms the Option transaction;

(iii)

full payment of the exercise price for the Option Stock to be purchased on exercise of the Options may be made:

by check (wire) to your Charles Schwab account; or

in already-owned Stock; or

in a combination of check (wire) to your Charles Schwab account and Stock; or

by authorizing Charles Schwab or a third party approved by Rockwell Automation to sell the Stock (or a sufficient portion of the Stock) acquired upon exercise of the Options; and

(iv)

in the case of an exercise of the Options by any person other than you seeking to exercise the Options, such documents as Charles Schwab or the Secretary of Rockwell Automation shall require to establish to their satisfaction that the person seeking to exercise the Options is entitled to do so.

(b)

An exercise of the whole or any part of the Options shall be effective:

(i)

if you elect (or after your death, the person entitled to exercise the Options elects) to pay the exercise price for the Option Stock entirely by check (wire), upon (A) completion of your transaction by using the Customer Service Center and full payment of the exercise price and withholding taxes (if applicable) are received by Charles Schwab within three (3) business days following the exercise; and (B) receipt of any documents required pursuant to Section 3(a)(iv) herein; and

(ii)

if you elect (or after your death, the person entitled to exercise the Options elects) to pay the exercise price of the Option Stock in Stock or in a combination of Stock and check, upon (A) completion of your transaction by using the Customer Service Center and full payment of the exercise price (as described in Section 3(d) herein) and withholding taxes (if applicable) are received by Charles Schwab within three (3) business days following the exercise; and (B) receipt of any documents required pursuant to Section 3(a)(iv) herein.

(c)

If you choose (or after your death, the person entitled to exercise the Options chooses) to pay the exercise price for the Option Stock to be purchased on exercise of any of the Options entirely by check, payment must be made by:

delivering to Charles Schwab a check (wire) in the full amount of the exercise price of such Option Stock; or

arranging with a stockbroker, bank or other financial institution to deliver to Charles Schwab full payment, by check or (if prior arrangements are made with Charles Schwab) by wire transfer, of the exercise price of such Option Stock .

In either event, in accordance with Section 3(e) herein, full payment of the exercise price for the Option Stock purchased must be made within three (3) business days after the exercise has been completed through the Customer Service Center.

(d) (i)

If you choose (or after your death, the person entitled to exercise the Options chooses) to use already-owned Stock to pay all or part of the exercise price for the Option Stock to be purchased on exercise of any of the Options, you (or after your death, the person entitled to exercise the Options) must deliver to Charles Schwab an Exercise Request and Attestation Form and cash representing one share, per grant exercised, to settle the rounding of the exercise costs. To perform such a stock swap transaction or a partial swap transaction, the Exercise Request and Attestation Form must be submitted via fax (720) 785-8884 by 4 PM ET on the date of exercise. Any questions concerning a stock swap transaction should be referred to (877) 636-7551 (Stock Option Administration Group Hotline). The Exercise Request and Attestation Form must attest to your ownership of Stock representing:

at least the number of shares of Stock whose value, based on the Fair Market Value (as defined in the Plan) on the day you have exercised your Options through the Customer Service Center, equals the exercise price for the Option Stock; or

any lesser number of shares of Stock you desire (or after your death, the person entitled to exercise the Options desires) to use to pay the exercise price for such Option Stock and a check in the amount of such exercise price less the value of the Stock to which you are attesting, based on the Fair Market Value on the day you have exercised your Options through the Customer Service Center.

(ii)

If you choose (or after your death, the person entitled to exercise the Options chooses) to use Stock acquired upon exercise of the Options to pay all or part of the exercise price for the remaining Option Stock to be purchased on exercise of any of the Options, you (or after your death, the person entitled to exercise the Options) must contact the Customer Service Center at (877) 804-3529.

(iii)

Charles Schwab will advise you (or any other person who, being entitled to do so, exercises the Options) of the exact number of shares of Stock, valued in accordance with Section 4(a)(ii) of the Plan at their Fair Market Value on the date of exercise, and any funds required to pay in full the exercise price for the Option Stock purchased. In accordance with Section 3(e) herein, you (or such other person) must pay, by check, in Stock or in a combination of check and Stock, any balance required to pay in full the exercise price of the Option Stock purchased within three (3) business days after the exercise has been completed through the Customer Service Center.

(iv)

Notwithstanding any other provision of this Stock Option Agreement, the Secretary of Rockwell Automation may limit the number, frequency or volume of successive exercises of any of the Options in which payment is made, in whole or in part, by delivery of Stock pursuant to this subparagraph (d) to prevent unreasonable pyramiding of such exercises.

(e)

An exercise completed through the Customer Service Center, whether or not full payment of the exercise price for the Option Stock is received by Charles Schwab, shall constitute a binding contractual obligation by you (or the other person entitled to exercise the Options) to proceed with and conclude that exercise of the Options (but only so long as you continue, or the other person entitled to exercise the Options continues, to be entitled to exercise the Options on that date). By your acceptance of this Stock Option Agreement, you agree (for yourself and on behalf of any other person who becomes entitled to exercise the Options) to deliver or cause to be delivered to Charles Schwab in full the exercise price for the Option Stock, that payment being by check, wire transfer, in Stock or in a combination of check and Stock, on or before the third business day after the date on which you complete the exercise through the Customer Service Center. If such payment is not made, you (for yourself and on behalf of any other person who becomes entitled to exercise the Options) authorize the Corporation, in its discretion, to set off against salary payments or other amounts due or which may become due you (or the other person entitled to exercise the Options) any balance of the exercise price for such Option Stock remaining unpaid thereafter.

(f)

An Exercise Confirmation representing the number of shares of Option Stock purchased will be issued the third business day (i) after Charles Schwab has received full payment therefor or (ii) at Rockwell Automation’s or Charles Schwab’s election in their sole discretion, after Rockwell Automation or Charles Schwab has received (x) full payment of the exercise price of the Option Stock and (y) any reimbursement in respect of withholding taxes due pursuant to Section 5 herein.

4.	Transferability

The Options are not transferable by you otherwise than (i) by will or by the laws of descent and distribution, or (ii) in the case of Options not granted as incentive stock options, by gift (A) to any member of your immediate family or (B) to a limited liability corporation or partnership or trust for the benefit of one or more members of your immediate family or (C) to a family charitable trust established by you or a member of your immediate family; provided, however, that no transfer pursuant to this clause (ii) shall be effective unless you have notified the Corporation’s Office of the Secretary (Attention: Stock Option Administration) in writing specifying the Option or Options transferred, the date of the gift and the name, address and social security or other taxpayer identification number of the transferee. During your lifetime, only you are entitled to exercise the Options unless you have transferred any Option in accordance with this paragraph to a member of your immediate family or to a limited liability corporation or partnership or trust for the benefit of one or more members of your immediate family or to a family charitable trust established by you or a member of your immediate family, in which case only that transferee (or the legal representative of the estate or the heirs or legatees of that transferee) shall be entitled to exercise that Option. For purposes of this paragraph, your “immediate family” shall mean your spouse and natural, adopted or step-children and grandchildren.

5.	Withholding

Rockwell Automation, your employer and Charles Schwab shall have the right, in connection with the exercise of the Options in whole or in part, to deduct from any payment to be made by Rockwell Automation or Charles Schwab under the Plan an amount equal to the taxes required to be withheld by law with respect to such exercise or to require you (or any other person entitled to exercise the Options) to pay to it an amount sufficient to provide for any such taxes so required to be withheld. By your acceptance of this Stock Option Agreement, you agree (for yourself and on behalf of any other person who becomes entitled to exercise the Options) that if Rockwell Automation or Charles Schwab elects to require you (or such other person) to remit an amount sufficient to pay such withholding taxes, you (or such other person) must remit that amount within three (3) business days after the completion of the Option exercise. If such payment is not made, Rockwell Automation, in its discretion, shall have the same right of set-off with respect to payment of the withholding taxes in connection with the exercise of the Option as provided under Section 3(e) herein with respect to payment of the exercise price.

6.	Headings

The section headings contained in these Stock Option Terms and Conditions are solely for the purpose of reference, are not part of the agreement of the parties and shall in no way affect the meaning or interpretation of this Stock Option Agreement.

7.	References

All references in these Stock Option Terms and Conditions to Sections, paragraphs, subparagraphs or clauses shall be deemed to be references to Sections, paragraphs, subparagraphs and clauses of these Stock Option Terms and Conditions unless otherwise specifically provided.

8.	Entire Agreement

This Stock Option Agreement and the Plan embody the entire agreement and understanding between Rockwell Automation and you with respect to the Options, and there are no representations, promises, covenants, agreements or understandings with respect to the Options other than those expressly set forth in this Stock Option Agreement and the Plan.

9.	Applicable Laws and Regulations

This Stock Option Agreement and Rockwell Automation’s obligation to issue Option Stock hereunder are subject to applicable laws and regulations, as well as Rockwell Automation’s insider trading policies.


Exhibit 1		Exercise Request and Attestation Form (for use with already-owned shares)

Exhibit 2		Notice of Exercise Form

Exhibit 1

THE CHARLES SCHWAB & COMPANY

Exercise Request and Attestation Form - Stock Swap Method


Fax # (720) 785-8884		Account Information

Charles Schwab & Co. Account #: -


Name:								Daytime Phone Number: ( )

Address:

								Home Phone Number: ( )

Grants to Exercise


I hereby elect to exercise the option(s) shown below using the stock swap method of exercise. This Exercise Request Form includes complete attestation information, which indicates the shares to which I am attesting in order to pay the exercise price of my options. I must submit sufficient cash to cover one full share per grant before my exercise will be processed (cash, check or wire).

Option GrantID

Option Grant Date

(mm/dd/yy)

Type

(Incentive/Non-Statutory)

Option Grant

Price

Number of Options to

Exercise*

Option Exercise

Price

* Indicate a number of shares you wish to exercise.

Attestation


Although Charles Schwab has not required me to make actual delivery of my certificates or shares held at another brokerage and I will retain ownership of the shares, I Certify that I have held the Common Stock that I am tendering for at least six (6) months, and that the shares have not been used for attestation in a Stock Swap for one full year. **


Held in Certificate(s) or another Brokerage Account*	Number of Shares Attested	Acquired by Stock Option Plan Exercise if YES, indicate ISO or NSO (Indicate NO or Yes-ISO or YES-NSO)	Date(s) of Acquisition	Tax Basis for Your Records**

Charles Schwab & Co.

Account Number: -

* ATTENTION:

If shares are held in more than one name, both holders must sign below

** The swap of ISO shares within a year of original exercise may have adverse tax implications. Consult your tax advisor.

Irrevocable Tax Election

Charles Schwab will automatically sell some shares to cover any applicable withholding taxes and fees unless you elect otherwise below.

Choice A


		( ) In addition to attesting to shares for the exercise price, I want to prepay any applicable withholding taxes from my existing cash balance in my Charles Schwab account or by enclosed check. I understand that if my total funds are not sufficient to cover these amounts, Charles Schwab will sell some shares to cover the shortfall.

Choice B (For US Taxpayers only/use for non-statutory options only )


		( ) I want to prepay my exercise price using the attestation procedures, and I elect to use share withholding from shares exercised for the payment of any applicable taxes.

Signature

I hereby confirm that the above information is correct, attest to the ownership of the shares of the company Common Stock described under Attestation and tender such shares for the purposes set forth above.

I understand and agree that this exercise will be processed in accordance with the Terms and Conditions governing my Charles Schwab Account and the company stock option plan under which my options were granted.



Your Signature:						Today’s Date:



Joint Signature:						Today’s Date:

NOTICE OF EXERCISE FORM

FOR CORPORATE OFFICERS

To:	Rockwell Automation, Inc.

Office of the Secretary

1201 South Second Street

E-7F19

Milwaukee, WI 53204

Fax No. (414) 382-4013

1. OPTIONS EXERCISED: Subject to the terms and conditions of the Stock Option Agreement dated December , 2007, with Rockwell Automation, Inc. (Rockwell Automation), I hereby exercise the following stock option(s) granted thereunder:

2. PAYMENT: The following must be received by Charles Schwab & Co., Inc. (Charles Schwab) within three business days following the date of exercise:

•

A check payable to the Rockwell Automation Employee Stock Option Program or a wire transfer to Charles Schwab for credit to the Rockwell Automation Employee Stock Option Program in the amount of the Total Purchase Price of the above-itemized stock option(s); or

•

A number of shares of Rockwell Automation Common Stock surrendered or sold to pay the Total Purchase Price of the above-itemized stock option(s); or

•

A combination of (i) a check payable to the Rockwell Automation Employee Stock Option Program or a wire transfer to Charles Schwab for credit to the Rockwell Automation Employee Stock Option Program, and (ii) a number of Shares surrendered or sold; which together amount to the Total Purchase Price of the above-itemized stock option(s).

If full payment of the Total Purchase Price of the stock option(s) listed in Item 1 is not delivered within three (3) business days after the exercise date, Rockwell Automation is authorized forthwith to set off the balance due against any amounts due or which may become due me to satisfy my obligation to pay the Total Purchase Price.

This Stock Option Exercise may not be revoked or changed after delivery of this form, properly completed, dated and signed, to Rockwell Automation whether or not payment accompanies this form and whether this form is dated before, on or after the date of such receipt.

Signature

Print Name

Date

ROCKWELL AUTOMATION, INC.

2000 LONG-TERM INCENTIVES PLAN, AS AMENDED

STOCK OPTION TERMS AND CONDITIONS

(December , 2007)

1.	Definitions

(a)

Change of Control : Change of Control shall have the same meaning as such term has in the Plan.

(b)

Charles Schwab : Charles Schwab & Co., Inc., the stock option administrator whom Rockwell Automation has engaged to administer and process all Option exercises.

(c)

Corporation : Rockwell Automation and its Subsidiaries (as such term is defined in the Plan).

(d)

Customer Service Center : Charles Schwab’s Customer Service Center that is used to facilitate Option transactions. Contact Charles Schwab at (877) 804-3529.

(e)

(f)

Notice of Exercise Form : The form attached as Exhibit 2 or any other form accepted by the Secretary of Rockwell Automation in his sole discretion.

(g)

Options : The stock option or stock options listed in the first paragraph of the Stock Option Agreement dated December , 2007 to which these Stock Option Terms and Conditions are attached and which together with these Stock Option Terms and Conditions constitute the Stock Option Agreement.

(h)

Option Stock : The Stock issuable or transferable on exercise of the Options.

(i)

Plan : Rockwell Automation’s 2000 Long-Term Incentives Plan, as such Plan may be amended and in effect at the relevant time.

(j)

Rockwell Automation : Rockwell Automation, Inc., a Delaware corporation, and any successor thereto.

(k)

Stock : Stock shall have the same meaning as such term has in the Plan.

(l)

Stock Option Agreement : These Stock Option Terms and Conditions together with the Stock Option Agreement dated December , 2007 to which they are attached.

2.	When Options May be Exercised

(a)

(b)

if your employment by the Corporation terminates other than by death, then:

(i)

if your retirement or other termination date is before December , 2008, the Options shall lapse on your retirement or other termination and may not be exercised at any time;

(ii)

(iii)

(iv)

In no event shall the provisions of the foregoing subparagraphs (a) and (b) extend to a date after December , 2017 the period during which the Options may be exercised.

3.	Exercise Procedure

(a)

(i)

contact the Customer Service Center by calling (877) 804-3529, Monday through Friday 9 a.m. to 9 p.m., ET, and follow the instructions provided;

(ii)

the Customer Service Center confirms the Option transaction;

(iii)

full payment of the exercise price for the Option Stock to be purchased on exercise of the Options may be made:

by check (wire) to your Charles Schwab account; or

in already-owned Stock; or

in a combination of check (wire) to your Charles Schwab account and Stock; or

by authorizing Charles Schwab or a third party approved by Rockwell Automation to sell the Stock (or a sufficient portion of the Stock) acquired upon exercise of the Options; and

(iv)

(b)

An exercise of the whole or any part of the Options shall be effective:

(i)

(ii)

(c)

delivering to Charles Schwab a check (wire) in the full amount of the exercise price of such Option Stock; or

(d) (i)

(ii)

(v)

(vi)

(e)

(f)

4.	Transferability

The Options are not transferable by you otherwise than by will or by the laws of descent and distribution. During your lifetime, only you are entitled to exercise the Options.

5.	Withholding

6.	Headings

7.	References

8.	Entire Agreement

9.	Applicable Laws and Regulations


Exhibit 1		Exercise Request and Attestation Form (for use with already-owned shares)

Exhibit 2		Notice of Exercise Form

Exhibit 1

THE CHARLES SCHWAB & COMPANY

Exercise Request and Attestation Form - Stock Swap Method


Fax # (720) 785-8884		Account Information

Charles Schwab & Co. Account #: -


Name:								Daytime Phone Number: ( )

Address:

								Home Phone Number: ( )

Grants to Exercise


I hereby elect to exercise the option(s) shown below using the stock swap method of exercise. This Exercise Request Form includes complete attestation information, which indicates the shares to which I am attesting in order to pay the exercise price of my options. I must submit sufficient cash to cover one full share per grant before my exercise will be processed (cash, check or wire).

Option GrantID

Option Grant Date

(mm/dd/yy)

Type

(Incentive/Non-Statutory)

Option Grant

Price

Number of Options to

Exercise*

Option Exercise

Price

* Indicate a number of shares you wish to exercise.

Attestation


Although Charles Schwab has not required me to make actual delivery of my certificates or shares held at another brokerage and I will retain ownership of the shares, I Certify that I have held the Common Stock that I am tendering for at least six (6) months, and that the shares have not been used for attestation in a Stock Swap for one full year. **


Held in Certificate(s) or another Brokerage Account*	Number of Shares Attested	Acquired by Stock Option Plan Exercise if YES, indicate ISO or NSO (Indicate NO or Yes-ISO or YES-NSO)	Date(s) of Acquisition	Tax Basis for Your Records**

Charles Schwab & Co.

Account Number: -

* ATTENTION:

If shares are held in more than one name, both holders must sign below

** The swap of ISO shares within a year of original exercise may have adverse tax implications. Consult your tax advisor.

Irrevocable Tax Election

Charles Schwab will automatically sell some shares to cover any applicable withholding taxes and fees unless you elect otherwise below.

Choice A


		( ) In addition to attesting to shares for the exercise price, I want to prepay any applicable withholding taxes from my existing cash balance in my Charles Schwab account or by enclosed check. I understand that if my total funds are not sufficient to cover these amounts, Charles Schwab will sell some shares to cover the shortfall.

Choice B (For US Taxpayers only/use for non-statutory options only )


		( ) I want to prepay my exercise price using the attestation procedures, and I elect to use share withholding from shares exercised for the payment of any applicable taxes.

Signature



Your Signature:						Today’s Date:



Joint Signature:						Today’s Date:

NOTICE OF EXERCISE FORM

FOR CORPORATE OFFICERS

To:	Rockwell Automation, Inc.

Office of the Secretary

1201 South Second Street

E-7F19

Milwaukee, WI 53204

Fax No. (414) 382-4013

2. PAYMENT: The following must be received by Charles Schwab & Co. Inc. (Charles Schwab) within three business days following the date of exercise:

•

A number of shares of Rockwell Automation Common Stock surrendered or sold to pay the Total Purchase Price of the above-itemized stock option(s); or

•

Signature

Print Name

Date

Exhibit 10.6

ROCKWELL AUTOMATION, INC.

2000 LONG-TERM INCENTIVES PLAN, AS AMENDED

RESTRICTED STOCK AGREEMENT

(December , 2007)

To:

In accordance with Section 4(c) of the Rockwell Automation, Inc. 2000 Long-Term Incentives Plan, as amended (the Plan), shares (Restricted Shares) of Stock (as defined in the Plan) of Rockwell Automation, Inc. (Rockwell Automation) have been granted to you, effective December , 2007, as Restricted Stock (as defined in the Plan) upon the terms and conditions of this Restricted Stock Agreement, subject in all respects to the provisions of the Plan, as it may be amended. Capitalized terms used in this Agreement and not otherwise defined herein shall have the respective meanings ascribed to them in the Plan.

1.	Earning of Restricted Shares

(a) If you shall continue as an Employee from the date hereof until December , 2010, then you shall be deemed to have fully earned all the Restricted Shares subject to this Agreement.

(b) If (i) you shall die or suffer a disability that shall continue for a continuous period of at least six months during the period of your continuous service as an Employee and prior to December , 2010; or (ii) a “Change in Control” (as defined for purposes of Article III, Section 13(I)(1) of Rockwell Automation’s By-Laws) shall occur during the period of your continuous service as an Employee and prior to December , 2010; then you shall be deemed to have fully earned all the Restricted Shares subject to this Agreement.

(c) If your employment by Rockwell Automation terminates on or after the first anniversary of the date hereof and prior to December , 2010 by reason of your retirement under a retirement plan of Rockwell Automation, then you shall be deemed to have fully earned a prorated portion of the Restricted Shares subject to this Agreement equal to the number of Restricted Shares subject to this Agreement, multiplied by the percentage of days in the three-year period ended December , 2010 during which you were an Employee.

(d) If you cease to be an Employee prior to satisfaction of any of the conditions set forth in paragraph (a), (b) or (c) of this Section, notwithstanding any period of salary continuation, you shall be deemed not to have earned any of the Restricted Shares and shall have no further rights with respect to the Restricted Shares or any Stock Dividends (as hereinafter defined).

RSA - US

2.	Retention of Certificates for Restricted Shares

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

3.	Dividends and Voting Rights

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

4.	Delivery of Earned Restricted Shares

As promptly as practicable after (i) you shall have been deemed to have earned the Restricted Shares in accordance with Section 1 and (ii) Rockwell Automation has been reimbursed for all required withholding taxes in respect of your earning all the Restricted Shares and Stock Dividends that you have been deemed to have earned, Rockwell Automation shall deliver to you (or in the event of your death, to your estate or any person who acquires your interest in the Restricted Shares by bequest or inheritance) all or the part of the Restricted Shares and Stock Dividends that you have been deemed to have earned.

5.	Forfeiture of Unearned Restricted Shares

(a) Notwithstanding any other provision of this Agreement, other than as provided in Section 5(b), if at any time it shall become impossible for you to earn any of the Restricted Shares in accordance with this Agreement, all the Restricted Shares, together with any Stock Dividends, then being held by Rockwell Automation (or subject to its instructions) in accordance with Section 2 shall be forfeited, and you shall have no further rights of any kind or nature with respect thereto. Upon any such forfeiture, the Restricted Shares, together with any Stock Dividends, shall be transferred to Rockwell Automation.

(b) Notwithstanding any other provision of this Agreement, if Section 1(c) is applicable, all of the unearned Restricted Shares, together with any Stock Dividends thereon, then being held by Rockwell Automation (or subject to its instructions) in accordance with Section 2 shall be forfeited, and you shall have no further rights of any kind or nature with respect thereto. Upon any such forfeiture, such unearned Restricted Shares, together with any Stock Dividends thereon, shall be transferred to Rockwell Automation.

6.	Adjustments

If there shall be any change in or affecting shares of Stock on account of any stock dividend or split, merger or consolidation, reorganization (whether or not Rockwell Automation is a surviving corporation), recapitalization, reorganization, combination or exchange of shares or other similar corporate changes or an extraordinary dividend in cash, securities or other property, there shall be made or taken such amendments to this Agreement or the Restricted Shares as the Board of Directors may deem appropriate under the circumstances.

7.	Transferability

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

8.	Withholding

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

9.	No Acquired Rights

You acknowledge, agree and consent that: (a) the Plan is discretionary and Rockwell Automation may amend, cancel or terminate the Plan at any time; (b) the grant of the Restricted Shares subject to this Agreement is a one-time benefit offered to you and does not create any contractual or other right for you to receive any grant of Stock as Restricted Stock or benefits under the Plan in the future; (c) future grants, if any, shall be at the sole discretion of Rockwell Automation, including, but not limited to, the timing of any grant, the number of shares and forfeiture provisions; and (d) your participation in the Plan is voluntary.

10.	Applicable Law

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

11.	Entire Agreement.

This Agreement and the Plan embody the entire agreement and understanding between Rockwell Automation and you with respect to the Restricted Shares subject to this Agreement, and there are no representations, promises, covenants, agreements or understandings with respect to such Restricted Shares other than those expressly set forth in this Agreement and the Plan. In the event of any conflict between this Agreement and the Plan, the terms of the Plan shall govern.


ROCKWELL AUTOMATION, INC.

By:
		Senior Vice President, General Counsel and Secretary

Dated: December , 2007

Agreed to this day of , 200 .

Name:

Exhibit 10.7

ROCKWELL AUTOMATION, INC.

2000 LONG-TERM INCENTIVES PLAN

PERFORMANCE SHARE AGREEMENT

(December , 2007)

To:

In accordance with Section 4(e) of the 2000 Long-Term Incentives Plan (the “ Plan ”) of Rockwell Automation, Inc. (“ Rockwell Automation ”), Performance Shares (as defined in the Plan) have been granted to you today upon the terms and conditions of this Performance Share Agreement (this “ Agreement ”), subject in all respects to the provisions of the Plan, as it may be amended. Capitalized terms used in this Agreement and not otherwise defined herein shall have the respective meanings ascribed to them in the Plan.

1.	Terms of Performance Shares .

(a) Subject to the provisions of this Section 1, you shall be eligible to receive shares of Stock or cash as determined in accordance with Section 1(f) of this Agreement in respect of the Performance Shares subject to this Agreement (the “Performance Share Payout”) if you shall continue as an Employee from the date hereof until December , 2010 (the “ Performance Share Period ”). Payment of such shares of Stock or cash shall be paid in the calendar year in which the Performance Share Period ends.

(b) If (i) you shall die or suffer a disability (as determined by the Committee)(as defined in the Plan) that shall continue for a continuous period of at least six months during the period of your continuous service as an Employee and prior to the end of the Performance Share Period; or (ii) your employment by Rockwell Automation terminates on or after the first anniversary of the date hereof and prior to the end of the Performance Share Period by reason of your retirement under a retirement plan of Rockwell Automation; then you shall be eligible to receive at the time such Performance Shares would otherwise be payable pursuant to Section 1(a) of this Agreement a prorated portion of the Performance Share Payout in accordance with Section 1(f) of this Agreement equal to such Performance Share Payout, multiplied by the percentage of days in the Performance Share Period during which you were an Employee.

(c) If a “Change in Control” (as defined for purposes of Article III, Section 13(I)(1) of Rockwell Automation’s By-Laws) that qualifies as a “409A Change of Control Event” (as hereinafter defined) shall occur during the period of your continuous service as an Employee and prior to the end of the Performance Share Period; then you shall be entitled to receive promptly and in any event within sixty days following such Change in Control the Performance Share Payout in accordance with Section 1(f) of this Agreement. For purposes of this Agreement, a “409A Change of Control Event” 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.

(d) If you cease to be an Employee prior to satisfaction of any of the conditions set forth in Section 1(a), 1(b) or 1(c) of this Agreement, you shall not be entitled to receive any Performance Share Payout in respect of the Performance Shares subject to this Agreement and shall have no further rights with respect to the Performance Shares subject to this Agreement .

(e) Subject to the provisions of this Section 1 (including, if Section 1(b) of this Agreement is applicable, the proration requirements thereof), promptly following the end of the Performance Share Period (or promptly following a 409A Change in Control Event in the event Section 1(c) of this Agreement is applicable), the number of shares of Stock (or the amount of cash) payable to you in respect of the Performance Shares subject to this Agreement shall be determined by multiplying (i) the number of Performance Shares subject to this Agreement by (ii) the applicable percentage determined by the Committee in accordance with Attachment 1 hereto based on the total shareowner return of Rockwell Automation Common Stock, assuming reinvestment of all dividends, for the period from October 1, 2007 to September 30, 2010; provided, however, that if Section 1(c) of this Agreement is applicable, the percentage under this Section 1(e)(ii) shall be deemed to be 100%. In determining such total shareowner return, the price of the Stock on each of the first and last dates of such three-year period will be determined by using the average of the daily closing prices per share of the Stock as reported on the New York Stock Exchange Composite Transactions Reporting System for the 20 trading days immediately preceding such date. Any payout in respect of Performance Shares subject to this Agreement may be in Stock, in cash or partly in Stock and partly in cash, as the Committee may determine. Any cash amounts payable pursuant to this Section 1(f) will be calculated based upon the Fair Market Value of the Stock on the trading day immediately preceding the payout date (or such other date as the Committee shall determine in its sole discretion).

2.	Delivery of Shares or Cash .

As promptly as practicable after (i) shares of Stock or cash have been determined by the Committee to be payable in accordance with Section 1 of this Agreement in respect of the Performance Shares subject to this Agreement and (ii) Rockwell Automation has been reimbursed for all required withholding taxes in respect of the Stock and/or cash payable in respect of such Performance Shares, Rockwell Automation shall deliver to you (or in the event of your death, to your estate or any person who acquires your interest in such Performance Shares by bequest or inheritance) shares of Stock, cash or a combination thereof, as shall be determined by the Committee, in respect of such Performance Shares.

3.	Forfeiture of Performance Shares .

Notwithstanding any other provision of this Agreement, if at any time it shall become impossible for you to receive any Performance Share Payout in respect of the Performance Shares subject to this Agreement, all such Performance Shares shall be forfeited, and you shall have no further rights of any kind or nature with respect thereto.

4.	Adjustments .

If there shall be any change in or affecting shares of Stock on account of any stock dividend or split, merger or consolidation, reorganization (whether or not Rockwell Automation is a surviving corporation), recapitalization, reorganization, combination or exchange of shares or other similar corporate changes or an extraordinary dividend in cash, securities or other property, there shall be made or taken such amendments to this Agreement or the Performance Shares subject to this Agreement as the Board of Directors may deem appropriate under the circumstances.

5.	Transferability .

This grant is not transferable by you otherwise than by will or by the laws of descent and distribution, and the Stock and/or cash payable in respect of the Performance Shares subject to this Agreement shall be deliverable, during your lifetime, only to you.

6.	Withholding .

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

7.	No Acquired Rights .

You acknowledge, agree and consent that: (a) the Plan is discretionary and Rockwell Automation may amend, cancel or terminate the Plan at any time; (b) the grant of the Performance Shares subject to this Agreement is a one-time benefit offered to you and does not create any contractual or other right for you to receive any grant of performance shares or benefits under the Plan in the future; (c) future grants, if any, shall be at the sole discretion of Rockwell Automation, including, but not limited to, the timing of any grant, the number of shares and forfeiture provisions; and (d) your participation in the Plan is voluntary.

8.	Applicable Law .

This Agreement and Rockwell Automation’s obligation to deliver the Stock and/or cash payable in respect of the Performance Shares subject to this Agreement shall be governed by and construed and enforced in accordance with the laws of Delaware and the Federal law of the United States.

409A

This Agreement is intended to comply with Section 409A. Notwithstanding any other provision of this Agreement to the contrary, the Company makes no representation that this Plan or any amounts payable under this Agreement will be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to this Agreement.

10.	Entire Agreement .

This Agreement and the Plan embody the entire agreement and understanding between Rockwell Automation and you with respect to the Performance Shares subject to this Agreement, and there are no representations, promises, covenants, agreements or understandings with respect to such Performance Shares other than those expressly set forth in this Agreement and the Plan. In the event of any conflict between this Agreement and the Plan, the terms of the Plan shall govern.


ROCKWELL AUTOMATION, INC.

By:
		Senior Vice President, General Counsel and Secretary

Attachment 1 — Matrix

Dated:

Agreed to this day of , 200

Name

Exhibit 12

ROCKWELL AUTOMATION, INC.

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

THREE MONTHS ENDED DECEMBER 31, 2007

(in millions, except ratio)


EARNINGS AVAILABLE FOR FIXED CHARGES:
Income from continuing operations before income taxes	$	219.0
Minority interest in income of subsidiaries		0.2
Undistributed earnings of affiliates		—

		219.2

Add fixed charges included in earnings:
Interest expense		18.0
Interest element of rentals		12.8

		30.8


Total earnings available for fixed charges	$	250.0


FIXED CHARGES:
Fixed charges included in earnings	$	30.8
Capitalized interest		0.7

Total fixed charges	$	31.5


RATIO OF EARNINGS TO FIXED CHARGES (1)		7.9

(1)

In computing the ratio of earnings to fixed charges, earnings are defined as income from continuing operations before income taxes, adjusted for minority interest in income or loss of subsidiaries, undistributed earnings and losses of affiliates, and fixed charges exclusive of capitalized interest. Fixed charges consist of interest on borrowings and that portion of rentals deemed representative of the interest factor.

Exhibit 15

February 6, 2008

Rockwell Automation, Inc.

1201 South Second Street

Milwaukee, Wisconsin 53204

We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited interim financial information of Rockwell Automation, Inc. and subsidiaries for the periods ended December 31, 2007 and 2006, and have issued our report dated February 6, 2008, which includes an explanatory paragraph regarding the adoption of Financial Accounting Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes”. As indicated in such report, because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended December 31, 2007, is incorporated by reference in Registration Statement Nos. 333-17031, 333-17055, 333-17405, 333-89219, 333-93593, 333-38444, 333-101780, 333-113041, and 333-125702 on Form S-8 and Registration Statement Nos. 333-24685, 333-43071 and 333-147658 on Form S-3.

We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

/s/ DELOITTE & TOUCHE LLP

Milwaukee, Wisconsin

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Keith D. Nosbusch, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Rockwell Automation, 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;

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:

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;

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;

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

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; and

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):

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

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: February 6, 2008

/ S / K EITH D. N OSBUSCH

Keith D. Nosbusch

Chairman, President and

Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Theodore D. Crandall, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Rockwell Automation, 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;

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):

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: February 6, 2008

/ S / T HEODORE D. C RANDALL

Theodore D. Crandall

Senior Vice President and

Chief Financial Officer

Exhibit 32.1

CERTIFICATION OF PERIODIC REPORT

I, Keith D. Nosbusch, Chairman, President and Chief Executive Officer of Rockwell Automation, Inc. (the “Company”), hereby certify pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1) the Quarterly Report on Form 10-Q of the Company for the quarter ended December 31, 2007 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 6, 2008

/ S / K EITH D. N OSBUSCH

Keith D. Nosbusch

Chairman, President and

Chief Executive Officer

Exhibit 32.2

CERTIFICATION OF PERIODIC REPORT

I, Theodore D. Crandall, Senior Vice President and Chief Financial Officer of Rockwell Automation, Inc. (the “Company”), hereby certify pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 6, 2008

/ S / T HEODORE D. C RANDALL

Theodore D. Crandall

Senior Vice President and

Chief Financial Officer