Attached files
file | filename |
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8-K - FORM 8-K - JOHNSON CONTROLS INC | c62750e8vk.htm |
EX-3.2 - EX-3.2 - JOHNSON CONTROLS INC | c62750exv3w2.htm |
EX-3.1 - EX-3.1 - JOHNSON CONTROLS INC | c62750exv3w1.htm |
EX-10.1 - EX-10.1 - JOHNSON CONTROLS INC | c62750exv10w1.htm |
Exhibit 10.2
JOHNSON CONTROLS, INC.
LONG-TERM INCENTIVE PERFORMANCE PLAN
LONG-TERM INCENTIVE PERFORMANCE PLAN
ARTICLE 1.
PURPOSE AND DURATION
PURPOSE AND DURATION
Section 1.1. Purpose. The purpose of the Johnson Controls, Inc. Long-Term
Incentive Performance Plan is to motivate key employees of the Company and its Affiliates who have
the prime responsibility for the operations of the Company and its Affiliates to achieve
performance objectives measured on a long-term basis, which is intended to result in increased
value to the shareholders of the Company.
Section 1.2. Duration. The Plan was originally effective October 1, 2005. The
Plan is amended and restated effective as of January 1, 2008. The Plan will remain in effect until
terminated pursuant to Article 11.
ARTICLE 2.
DEFINITIONS AND CONSTRUCTION
DEFINITIONS AND CONSTRUCTION
Section 2.1. Definitions. Wherever used in the Plan, the following terms shall
have the meanings set forth below and, when the meaning is intended, the initial letter of the word
is capitalized:
(a) Administrator means, with respect to executive officers of the Company, the Committee,
and with respect to all other key employees, the Chief Executive Officer of the Company.
(b) Affiliate has the meaning ascribed to such term in Rule 12b-2 promulgated under the
Exchange Act, or any successor rule or regulation thereto.
(c) Base Salary of a Participant means the annual rate of base pay in effect for such
Participant as of the last day of the Performance Period (or such other date as the Administrator
may specify by action taken at the time of grant of a Long Term Performance Award).
(d) Board means the Board of Directors of the Company.
(e) Beneficiary means the person or persons entitled to receive any amounts due to a
Participant in the event of the Participants death as provided in Article 8.
(f) Cause means: (1) if the Participant is subject to an employment agreement that contains
a definition of cause, such definition, or (2) otherwise, any of the following as determined by
the Administrator: (A) violation of the provisions of any employment agreement, non-competition
agreement, confidentiality agreement, or similar agreement with the Company or an Affiliate, or the
Companys or an Affiliates code of ethics, as then in effect, (B) conduct rising to the level of
gross negligence or willful misconduct in the course of employment with the Company or an
Affiliate, (C) commission of an act of dishonesty
or disloyalty involving the Company or an Affiliate, (D) violation of any federal, state or
local law in connection with the Participants employment, or (E) breach of any fiduciary duty to
the Company or an Affiliate.
(g) Code means the Internal Revenue Code of 1986, as amended. Any reference to a particular
provision of the Code shall be deemed to include any successor provision thereto.
(h) Company means Johnson Controls, Inc., a Wisconsin corporation, and any successor thereto
as provided in Article 14.
(i) Committee means the Compensation Committee of the Board, which shall consist of not less
than two (2) members of the Board each of whom is a non-employee director as defined in
Securities and Exchange Commission Rule 16b-3(b)(3), or as such term may be defined in any
successor regulation under Section 16 of the Securities Exchange Act of 1934, as amended. In
addition, each member of the Committee shall be an outside director within the meaning of Code
Section 162(m).
(j) Exchange Act means the Securities Exchange Act of 1934, as amended. Any reference to a
particular provision of the Exchange Act shall be deemed to include any successor provision
thereto.
(k) Excluded Items means any gains or losses from the sale of assets outside the ordinary
course of business, any gains or losses from discontinued operations, any extraordinary gains or
losses, the effects of accounting changes, any unusual, nonrecurring, transition, one-time or
similar items or charges, the diluted impact of goodwill on acquisitions, and any other items
specified by the Administrator; provided that, for Long Term Performance Awards intended to qualify
as performance-based compensation under Code Section 162(m), the Administrator shall specify the
Excluded Items in writing at the time the Long Term Performance Award is made unless, after
application of the Excluded Items, the amount payable under the Long Term Performance Award is
reduced.
(l) Inimical Conduct means any act or omission that is inimical to the best interests of the
Company or any Affiliate, as determined by the Administrator in its sole discretion, including but
not limited to: (1) violation of any employment, noncompete, confidentiality or other agreement in
effect with the Company or any Affiliate, (2) taking any steps or doing anything which would damage
or negatively reflect on the reputation of the Company or an Affiliate, or (3) failure to comply
with applicable laws relating to trade secrets, confidential information or unfair competition.
(m) Long Term Performance Award means an opportunity granted to a Participant to receive a
payment of cash based in whole or part on the extent to which one or more Performance Goals for one
or more Performance Measures are achieved for the Performance Period, subject to the conditions
described in the Plan and that the Administrator otherwise imposes.
(n) Participant means a key employee of the Company or an Affiliate who has been selected by
the Administrator to participate in the Plan.
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(o) Performance Measures means the following categories (in all cases after taking into
account any Excluded Items, as applicable), including in each case any measure based on such
category:
(1) | Basic earnings per common share for the Company on a consolidated basis. |
(2) | Diluted earnings per common share for the Company on a consolidated basis. |
(3) | Total shareholder return. |
(4) | Net sales. |
(5) | Cost of sales. |
(6) | Gross profit. |
(7) | Selling, general and administrative expenses. |
(8) | Operating income. |
(9) | Earnings before interest and the provision for income taxes (EBIT). |
(10) | Earnings before interest, the provision for income taxes, depreciation and amortization (EBITDA). |
(11) | Net income. |
(12) | Accounts receivable. |
(13) | Inventories. |
(14) | Trade working capital. |
(15) | Return on equity. |
(16) | Return on assets. |
(17) | Return on invested capital. |
(18) | Return on sales. |
(19) | Economic value added, or other measure of profitability that considers the cost of capital employed. |
(20) | Net cash provided by operating activities. |
(21) | Free cash flow. |
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(22) | Net increase (decrease) in cash and cash equivalents. |
(23) | Customer satisfaction. |
(24) | Market share. |
(25) | Quality. |
The Performance Measures described in items (4) through (25) may be measured (A) for the
Company on a consolidated basis, (B) for any one or more Affiliates or divisions of the Company
and/or (C) for any other business unit or units of the Company or an Affiliate as defined by the
Administrator at the time of selection.
In addition, with respect to Long Term Performance Awards that are not intended to comply with
Code Section 162(m), the Administrator may designate other categories, including categories
involving individual performance and subjective targets, not listed above.
(p) Performance Goal means the level(s) of performance for a Performance Measure that must
be attained in order for a payment to be made under a Long Term Performance Award, and/or to
determine the amount of such payment based on the Performance Scale.
(q) Performance Period means a period of more than one fiscal year of the Company or an
Affiliate as selected by the Administrator.
(r) "Performance Scale means, with respect to a Performance Measure, a scale from which the
level of achievement may be calculated for any given level of actual performance for such
Performance Measure. The Performance Scale may be a linear function, a step function, a
combination of the two, or any other manner of measurement as determined by the Administrator.
(s) Plan means the arrangement described herein, as from time to time amended and in effect.
(t) Retirement means termination of employment from the Company and its Affiliates (without
Cause) on or after attainment of age fifty-five (55) with at least ten (10) years of vesting
service or age sixty-five (65) with at least five (5) years of vesting service (such vesting
service to be determined within the meaning of the Johnson Controls Pension Plan or such other plan
or methodology prescribed by the Administrator).
(u) Total and Permanent Disability means the Participants inability to perform the material
duties of his or her occupation as a result of a medically-determinable physical or mental
impairment which can be expected to result in death or which has lasted or can be expected to last
for a period of at least twelve (12) months, as determined by the Administrator. The Participant
will be required to submit such medical evidence or to undergo a medical examination by a doctor
selected by the Administrator as the Administrator determines is necessary in order to make a
determination hereunder.
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Section 2.2. Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein includes the feminine, the plural includes the singular, and the
singular the plural.
Section 2.3. Severability. In the event any provision of the Plan is held
illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining
parts of the Plan, and the Plan shall be construed and enforced as if the said illegal or invalid
provision had not been included.
ARTICLE 3.
ELIGIBILITY
ELIGIBILITY
Section 3.1. Selection of Participants. The Administrator shall select the key
employees of the Company or an Affiliate for participation in the Plan. No employee shall have any
right to receive a Long Term Performance Award in any year even if a Long Term Performance Award
has been previously granted in prior years. In general, it is expected that the Administrator will
determine which key employees are to receive a Long-Term Performance Award prior to, or within the
first ninety (90) days of, the first day of the applicable Performance Period.
Section 3.2. Termination of Approval. Until the earlier of the end of a
Performance Period or a Participants termination of employment, the Administrator may at any time
withdraw its approval for a Participants participation in the Plan. In the event of the
Administrators withdrawal of approval, the employee concerned shall cease to be a Participant as
of the date selected by the Administrator, the employees Long Term Performance Award shall be
cancelled, and the employee shall not be entitled to any payment under that Long Term Performance
Award unless the Administrator determines otherwise. If payment is approved by the Administrator
notwithstanding the withdrawal of approval, the payment shall be made in accordance with Section
5.2, subject to Section 5.3, after the end of the Performance Period, and the payment amount shall
equal the award amount calculated under Section 5.1, reduced in such manner or by such amount (if
at all) as determined in the sole discretion of the Administrator. A Participant shall be notified
of the Administrators withdrawal of its approval for the Participants participation in the Plan
as soon as practicable following such action.
Section 3.3. Transfers In, Out and Between Eligible Positions.
(a) Notwithstanding Section 3.1, if a key employee is hired or promoted into a position that
is eligible for a Long Term Performance Award, the Administrator may (1) select such key employee
as a Participant at any time during the course of a Performance Period, (2) take action resulting
in a key employees receipt of an additional Long Term Performance Award, where, with respect to a
particular Performance Period already in progress, the key employee is currently a Participant in
the Plan and already has a Long Term Performance Award for that Performance Period, or (3) change
the Performance Goals, Performance Measures, Performance Scale or potential award amount under a
Long Term Performance Award that is already in effect; provided that the Administrator may not
apply the discretion described in clause (3) with regard to any Long Term Performance Award that is
intended to qualify as performance-based compensation under Code Section 162(m). The Administrator
may, but is
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not required to, prorate the amount that would have otherwise been payable to the Participant
under such Long Term Performance Award had the Participant been employed during the entire
Performance Period to reflect the Participants actual period of employment during the Performance
Period.
(b) If a Participant is demoted during a Performance Period, the Administrator may decrease
the potential award amount of any Long Term Performance Award the Participant may be eligible to
receive, or revise the Performance Goals, Performance Measures or Performance Scale applicable to
the Participant (provided that any such revision as applied to an individual who is a covered
employee under Code Section 162(m) may result only in a reduction of the amount that would have
otherwise been payable absent such revision), as the Administrator determines is necessary to
reflect the Participants demotion, or the Administrator may withdraw its approval for the
Participants participation in the Plan in accordance with Section 3.2.
(c) If a Participant is transferred from employment by the Company to the employment of an
Affiliate, or vice versa, the Administrator may revise the Participants Long Term Performance
Award to reflect the transfer, including but not limited to, changing the potential award amount,
Performance Measures, Performance Goals and Performance Scale applicable to the Participant
(provided that any such revision as applied to an individual who is a covered employee under Code
Section 162(m) may result only in a reduction of the amount that would have otherwise been payable
absent such revision).
Section 3.4. Termination of Employment.
(a) Except as otherwise provided under the terms of an employment or severance agreement
between a Participant and the Company, no Participant shall earn an incentive award for a
Performance Period unless the Participant is employed by the Company or an Affiliate (or is on an
approved leave of absence) on the last day of such Performance Period, unless the Participants
employment was terminated during the year as a result of Retirement, Total and Permanent Disability
or death at a time when the Participant could not have been terminated for Cause, or unless payment
is approved by the Administrator after considering the cause of the Participants termination. If
payment is approved by the Administrator, the payment shall be made in accordance with Section 5.2,
subject to Section 5.3, after the end of the Performance Period, and the payment amount shall equal
the award amount calculated under Section 5.1, reduced in such manner or by such amount (if at all)
as determined in the sole discretion of the Administrator.
(b) If a Participants employment is terminated as a result of death, Total and Permanent
Disability or Retirement, at a time when the Participant could not have been terminated for Cause,
then unless otherwise determined by the Administrator, the Participant (or the Participants
Beneficiary or estate in the event of his or her death) shall be entitled to receive an amount
equal to the product of (x) the award amount calculated under Section 5.1 and (y) a fraction, the
numerator of which is the number of the Participants whole calendar months of employment during
the Performance Period for such award and the denominator of which is the number of calendar months
in the Performance Period for such award. Payment shall be made in accordance with Section 5.2,
subject to Section 5.3.
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ARTICLE 4.
CONTINGENT LONG TERM PERFORMANCE AWARDS
CONTINGENT LONG TERM PERFORMANCE AWARDS
The Administrator shall determine, at the time a Long Term Performance Award is granted, the
Performance Period, the Performance Measure(s), the Performance Goal(s) for such Performance
Measure, the Performance Scale (which may vary for different Performance Measures), and the amount
payable to the Participant if and to the extent the Performance Goals are met (as measured under
the Performance Scale). The amount payable to a Participant for meeting the Performance Goal(s)
may be designated as a flat dollar amount or as a percentage of the Participants Base Salary, or
may be determined by any other means specified by the Administrator at the time the Long Term
Performance Award is granted.
ARTICLE 5.
PAYMENT
PAYMENT
Section 5.1. Evaluating Performance and Computing Awards. As soon as practicable
following the close of a Performance Period, the Administrator shall determine and certify whether
and to what extent the Performance Goals and other material terms of the Long Term Performance
Award for that Performance Period were satisfied. Based on such certification, the Administrator
(or its delegate) shall determine the award amount payable to a Participant under the Long Term
Performance Award for that Performance Period, provided that the maximum award amount for any
Participant shall be, with respect to any and all Long Term Performance Awards of such Participant
with Performance Periods ending on the last day of, or at any time within, the same fiscal year of
the Company, no more than six million dollars ($6,000,000).
Section 5.2. Timing and Form of Payment. When the payment due to the Participant
has been determined, unless otherwise deferred pursuant to a Participants election under the
Companys deferred compensation plan, payment shall be made in a cash lump sum by the
75th day following the close of the Performance Period.
Section 5.3. Inimical Conduct. Notwithstanding the foregoing, after the end of
the Performance Period for which a payment for a Long Term Performance Award has accrued, but
before payment or deferral of such amount actually occurs, if the Participant engages in Inimical
Conduct, or if the Company determines after a Participants termination of employment that the
Participant could have been terminated for Cause, the Long Term Performance Award shall be
automatically cancelled and no payment or deferral shall be made. The Administrator may suspend
payment or deferral (without liability for interest thereon) pending the Administrators
determination of whether the Participant was or should have been terminated for Cause or whether
the Participant has engaged in Inimical Conduct.
ARTICLE 6.
CHANGE OF CONTROL
CHANGE OF CONTROL
Section 6.1. Acceleration of Payment. Notwithstanding any other provision of
this Plan, within thirty (30) days after a Change of Control (as defined below), the Company shall
pay each Participant, with respect to each Long Term Performance Award of the
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Participant, a lump sum payment in cash equal to the product of (x) such Participants maximum
potential award amount for the Performance Period(s) in which the Change of Control occurs, as
specified in the Performance Award and (y) a fraction, the numerator of which is the number of days
after the first day of the Performance Period on which the Change of Control occurs and the
denominator of which is the number of days in the Performance Period. If, however, the Participant
has a deferral election in effect with respect to any amount payable under this Section 6.1, such
amount shall be deferred pursuant to such election and shall not be paid in a lump sum as provided
herein.
Notwithstanding the foregoing, with respect to amounts payable to a Participant (or the
Participants Beneficiary or estate) who is entitled to a payment hereunder because the
Participants employment terminated as a result of death or Disability, or payable to a Participant
who has met the requirements for Retirement (without regard to whether the Participant has
terminated employment), no payment shall be made unless the Change of Control (as defined below)
also constitutes a change of control within the meaning of Code Section 409A.
Section 6.2. Definition of Change of Control. A Change of Control means any of
the following events:
(a) The acquisition, other than from the Company, by any individual, entity or group of
beneficial ownership (within the meaning of Rule l3d-3 promulgated under the Exchange Act),
including in connection with a merger, consolidation or reorganization, of more than either:
(1) | Fifty percent (50%) of the then outstanding shares of common stock of the Company (the Outstanding Company Common Stock) or |
(2) | Thirty-five percent (35%) of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the Company Voting Securities), |
provided, however, that any acquisition by (x) the Company or any of its subsidiaries, or any
employee benefit plan (or related trust) sponsored or maintained by the Company or any of its
subsidiaries or (y) any corporation with respect to which, following such acquisition, more than
sixty percent (60%) of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and Company Voting
Securities immediately prior to such acquisition in substantially the same proportion as their
ownership, immediately prior to such acquisition, of the Outstanding Company Common Stock and
Company Voting Securities, as the case may be, shall not constitute a Change in Control of the
Company; or
(b) Individuals who, as of October 1, 2005, constitute the Board (the Incumbent Board) cease
for any reason to constitute at least a majority of the Board during any twelve (12)-month period,
provided that any individual becoming a director subsequent to
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October 1, 2005, whose election or nomination for election by the Companys shareholders 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; or
(c) A complete liquidation or dissolution of the Company or sale or other disposition of all
or substantially all of the assets of the Company other than to a corporation with respect to
which, following such sale or disposition, more than sixty percent (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 is then owned beneficially,
directly or indirectly, by all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and Company Voting
Securities immediately prior to such sale or disposition in substantially the same proportion as
their ownership of the Outstanding Company Common Stock and Company Voting Securities, as the case
may be, immediately prior to such sale or disposition. For purposes hereof, a sale or other
disposition of all or substantially all of the assets of the Company will not be deemed to have
occurred if the sale involves assets having a total gross fair market value of less than forty
percent (40%) of the total gross fair market value of all assets of the Company immediately prior
to the acquisition. For this purpose, gross fair market value means the value of the assets
without regard to any liabilities associated with such assets.
For purposes of this Section 6.2, persons will not be considered to be acting as a group
solely because they purchase or own stock of the Company at the same time, or as a result of the
same public offering. However, persons will be considered to be acting as a group if they are
owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock,
or similar business transaction with the Company. If a person, including an entity, owns stock in
the Company and any other corporation that enters into a merger, consolidation, purchase or
acquisition of stock, or similar transaction, such shareholder is considered to be acting as a
group with other shareholders in such corporation only with respect to the ownership in that
corporation prior to the transaction giving rise to the change and not with respect to the
ownership interest in the Company.
ARTICLE 7.
ADJUSTMENTS
ADJUSTMENTS
In the event of any change in the outstanding shares of Company Common Stock by reason of any
stock dividend or split, recapitalization, reclassification, merger, consolidation or exchange of
shares or other similar corporate change, then if the Administrator shall determine, in its sole
discretion, that such change necessarily or equitably requires an adjustment in the Performance
Goals established under a Long Term Performance Award, such adjustments shall be made by the
Administrator and shall be conclusive and binding for all purposes of this Plan. No adjustment
shall be made in connection with the issuance by the Company of any warrants, rights, or options to
acquire additional shares of Common Stock or of securities convertible into Common Stock.
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ARTICLE 8.
BENEFICIARY
BENEFICIARY
If permitted by the Company, a Participant may designate a Beneficiary by filing a beneficiary
designation on the form provided by the Administrator. In such event, if the Participant dies
prior to receiving any payment due hereunder, such payment shall be made to the Participants
Beneficiary. If, however, the Participant has an effective deferral election in place for such
amount under the Companys deferred compensation plan, then the amount shall be deferred and paid
in accordance with that plan. A Participant entitled to file a beneficiary designation may change
his beneficiary designation at any time, provided that each beneficiary designation form filed with
the Company shall revoke the most recent form on file, and the last form received by the Company
while the Participant was alive shall be given effect. In the event there is no valid beneficiary
designation form on file, or in the event the Participants designated Beneficiary is not alive at
the time payment is to be made, or in the event a Participant is not entitled to file a beneficiary
designation, the Participants estate will be deemed the Beneficiary and will be entitled to
receive payment. If a Participant designates his spouse as a beneficiary, such beneficiary
designation automatically shall become null and void on the date of the Participants divorce or
legal separation from such spouse; provided the Administrator has notice of such divorce or legal
separation prior to payment.
ARTICLE 9.
RIGHTS OF PARTICIPANTS
RIGHTS OF PARTICIPANTS
Section 9.1. No Funding. No Participant or Beneficiary shall have any interest
in any fund or in any specific asset or assets of the Company (or any Affiliate) by reason of any
Long Term Performance Award under the Plan. It is intended that the Company has merely a
contractual obligation to make payments when due hereunder and it is not intended that the Company
(or any Affiliate) hold any funds in reserve or trust to secure payments hereunder.
Section 9.2. No Transfer. No Participant may assign, pledge, or encumber his
interest under the Plan, or any part thereof, except that a Participant may designate a Beneficiary
as provided herein.
Section 9.3. No Implied Rights; Employment. Nothing contained in this Plan shall
be construed to:
(a) Give any employee or Participant any right to receive any award other than in the sole
discretion of the Administrator;
(b) Limit in any way the right of the Company or an Affiliate to terminate a Participants
employment at any time; or
(c) Be evidence of any agreement or understanding, express or implied, that a Participant will
be retained in any particular position or at any particular rate of remuneration.
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ARTICLE 10.
ADMINISTRATION
ADMINISTRATION
Section 10.1. General. The Plan shall be administered by the Administrator. If
at any time the Committee shall not be in existence, the Board shall assume the Committees
functions and each reference to the Committee herein shall be deemed to include the Board.
Section 10.2. Authority. In addition to the authority specifically provided
herein, the Administrator shall have full power and discretionary authority to: (a) administer the
Plan, including but not limited to the power and authority to construe and interpret the Plan; (b)
correct errors, supply omissions or reconcile inconsistencies in the terms of the Plan or any Long
Term Performance Award; (c) establish, amend or waive rules and regulations, and appoint such
agents, as it deems appropriate for the Plans administration; and (d) make any other
determinations, including factual determinations, and take any other action as it determines is
necessary or desirable for the Plans administration.
Section 10.3. Delegation of Authority. The Administrator may delegate to one or
more officers of the Company any or all of the authority and responsibility of the Administrator,
except that the Committee may not delegate any authority with respect to Long Term Performance
Awards that are intended to comply with Code Section 162(m). If the Administrator has made such a
delegation, then all references to the Administrator in this Plan include such officer(s) to the
extent of such delegation.
Section 10.4. Decision Binding. The Administrators determinations and decisions
made pursuant to the provisions of the Plan and all related orders or resolutions of the Board
shall be final, conclusive and binding on all persons who have an interest in the Plan or a Long
Term Performance Award, and such determinations and decisions shall not be reviewable.
Section 10.5. Procedures of the Committee. The Committees determinations must
be made by not less than a majority of its members present at the meeting (in person or otherwise)
at which a quorum is present, or by written majority consent, which sets forth the action, is
signed by each member of the Committee and filed with the minutes for proceedings of the Committee.
A majority of the entire Committee shall constitute a quorum for the transaction of business.
Service on the Committee shall constitute service as a director of the Company so that the
Committee members shall be entitled to indemnification, limitation of liability and reimbursement
of expenses with respect to their Committee services to the same extent that they are entitled
under the Companys By-laws and Wisconsin law for their services as directors of the Company.
ARTICLE 11.
AMENDMENT AND TERMINATION
AMENDMENT AND TERMINATION
Section 11.1. Amendment. The Committee may modify or amend, in whole or in part,
any or all of the provisions of the Plan, and may suspend the Plan, and the Employee Benefits
Policy Committee (or any successor committee thereto) of the Company may modify or amend the Plan
for ministerial or administrative changes or to conform the terms of the Plan to the requirements
of applicable law; provided that, any such amendment or modification shall be
11
approved by the Companys shareholders to the extent required by Code Section 162(m) or other
applicable law; provided, however, that no such modification, amendment, or suspension may, without
the consent of the Participant or his or her Beneficiary in the case of the Participants death,
reduce the right of a Participant, or his or her Beneficiary, as the case may be, to any payment
due under the Plan except as specifically provided herein. Notwithstanding the foregoing, the
Committee may amend the provisions of Article 6 prior to the effective date of a Change of Control.
Section 11.2. Termination. The Committee may terminate the Plan in accordance
with the provisions of this Section 11.2. In order for the provisions of this Section 11.2 to
apply, the Committee must designate in writing that the Plan is being terminated in accordance with
this Section. Upon termination of the Plan, the Committee may provide that all amounts accrued
under the Plan to the date of the Plan termination (as determined by the Committee in its sole
discretion) be paid in a lump sum, provided that payments to a Participant (or the Participants
Beneficiary or estate) who is entitled to a payment hereunder because the Participants employment
terminated as a result of death or Disability prior to the date of such Plan termination, or
amounts payable to a Participant who has met the requirements for Retirement (without regard to
whether the Participant has terminated employment) as of the date of such Plan termination may be
paid upon termination of the Plan only in the following circumstances:
(a) The Plan is terminated within twelve (12) months of a corporate dissolution taxed under
Code Section 331, or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A).
In such event, the payment must be paid no later than the latest of: (A) the last day of the
calendar year in which the Plan termination occurs, (B) the first calendar year in which the amount
is no longer subject to a substantial risk of forfeiture, or (C) the first calendar year in which
payment is administratively practicable.
(b) The Plan is terminated at any other time, provided that such termination does not occur
proximate to a downturn in the financial health of the Company or an Affiliate, and all other plans
required to be aggregate with this Plan under Code Section 409A are also terminated and liquidated.
In such event, the payment shall be paid no earlier than twelve (12) months (and no later than
twenty-four (24) months) after the date of termination. Notwithstanding the foregoing, any payment
that would otherwise be paid during the twelve (12)-month period beginning on the Plan termination
date pursuant to the terms of the Plan shall be paid in accordance with such terms. In addition,
the Company or any Affiliate shall be prohibited from adopting a similar arrangement within three
(3) years following the date of the Plans termination
ARTICLE 12.
TAX WITHHOLDING
TAX WITHHOLDING
The Company shall have the right to deduct from all cash payments made hereunder (or from any
other payments due a Participant) any foreign, federal, state, or local taxes required by law to be
withheld with respect to such cash payments.
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ARTICLE 13.
OFFSET
OFFSET
The Company shall have the right to offset from any amount payable hereunder any amount that
the Participant owes to the Company or to any Affiliate without the consent of the Participant (or
his Beneficiary, in the event of the Participants death).
ARTICLE 14.
SUCCESSORS
SUCCESSORS
All obligations of the Company under the Plan with respect to Long Term Performance Awards
granted hereunder shall be binding on any successor or assign of the Company, whether the existence
of such successor or assign is the result of a direct or indirect purchase, merger, consolidation
or otherwise, of all or substantially all of the business and/or assets of the Company. The Plan
shall be binding upon and inure to the benefit of the Participants, Beneficiaries, and their heirs,
executors, administrators and legal representatives.
ARTICLE 15.
DISPUTE RESOLUTION
DISPUTE RESOLUTION
Section 15.1. Governing Law. This Plan and the rights and obligations hereunder
shall be governed by and construed in accordance with the internal laws of the State of Wisconsin
(excluding any choice of law rules that may direct the application of the laws of another
jurisdiction), except as provided in Section 15.2 hereof.
Section 15.2. Arbitration.
(a) Application. Notwithstanding any employee agreement in effect between a
Participant and the Company or any Affiliate employer, if a Participant or Beneficiary (the
claimant) brings a claim that relates to benefits under this Plan, regardless of the basis of
the claim (including but not limited to, actions under Title VII, wrongful discharge, breach of
employment agreement, etc.), such claim shall be settled by final binding arbitration in accordance
with the rules of the American Arbitration Association (AAA) and judgment upon the award rendered
by the arbitrator may be entered in any court having jurisdiction thereof.
(b) Initiation of Action. Arbitration must be initiated by serving or mailing a
written notice of the complaint to the other party. Normally, such written notice should be
provided the other party within one year (365 days) after the day the complaining party first knew
or should have known of the events giving rise to the complaint. However, this time frame may be
extended if the applicable statute of limitation provides for a longer period of time. If the
complaint is not properly submitted within the appropriate time frame, all rights and claims that
the complaining party has or may have against the other party shall be waived and void. Any notice
sent to the Company shall be delivered to:
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Office of General Counsel
Johnson Controls, Inc.
5757 North Green Bay Avenue
P.O. Box 591
Milwaukee, WI 53201-0591
Johnson Controls, Inc.
5757 North Green Bay Avenue
P.O. Box 591
Milwaukee, WI 53201-0591
The notice must identify and describe the nature of all complaints asserted and the facts upon
which such complaints are based. Notice will be deemed given according to the date of any postmark
or the date of time of any personal delivery.
(c) Compliance with Personnel Policies. Before proceeding to arbitration on a
complaint, the claimant must initiate and participate in any complaint resolution procedure
identified in the Companys or Affiliates personnel policies. If the claimant has not initiated
the complaint resolution procedure before initiating arbitration on a complaint, the initiation of
the arbitration shall be deemed to begin the complaint resolution procedure. No arbitration
hearing shall be held on a complaint until any applicable Company or Affiliate complaint resolution
procedure has been completed.
(d) Rules of Arbitration. All arbitration will be conducted by a single arbitrator
according to the Employment Dispute Arbitration Rules of the AAA. The arbitrator will have
authority to award any remedy or relief that a court of competent jurisdiction could order or grant
including, without limitation, specific performance of any obligation created under policy, the
awarding of punitive damages, the issuance of any injunction, costs and attorneys fees to the
extent permitted by law, or the imposition of sanctions for abuse of the arbitration process. The
arbitrators award must be rendered in a writing that sets forth the essential findings and
conclusions on which the arbitrators award is based.
(e) Representation and Costs. Each party may be represented in the arbitration by an
attorney or other representative selected by the party. The Company or Affiliate shall be
responsible for its own costs, the AAA filing fee and all other fees, costs and expenses of the
arbitrator and AAA for administering the arbitration. The claimant shall be responsible for his
attorneys or representatives fees, if any. However, if any party prevails on a statutory claim
which allows the prevailing party costs and/or attorneys fees, the arbitrator may award costs and
reasonable attorneys fees as provided by such statute.
(f) Discovery; Location; Rules of Evidence. Discovery will be allowed to the same
extent afforded under the Federal Rules of Civil Procedure. Arbitration will be held at a location
selected by the Company. AAA rules notwithstanding, the admissibility of evidence offered at the
arbitration shall be determined by the arbitrator who shall be the judge of its materiality and
relevance. Legal rules of evidence will not be controlling, and the standard for admissibility of
evidence will generally be whether it is the type of information that responsible people rely upon
in making important decisions.
(g) Confidentiality. The existence, content or results of any arbitration may not be
disclosed by a party or arbitrator without the prior written consent of both parties. Witnesses
who are not a party to the arbitration shall be excluded from the hearing except to testify.
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