exv10wi



 




EXHIBIT 10.I




JOHNSON CONTROLS, INC.

EQUALIZATION BENEFIT PLAN




ARTICLE 1.

PURPOSE AND DURATION



Section 1.1. Purpose. The purpose of the Johnson Controls Equalization Benefit
Plan is to restore retirement benefits to certain participants in the Company’s
pension or savings plans whose benefits under said plans are or will be limited
by reason of Code Sections 401(a)(17), 401(k), 401(m), 402(g) or 415 and/or by
reason of the election of such employees to defer income or reduce salary
pursuant to this Plan or the Johnson Controls, Inc. Incentive Compensation Plan
(Deferred Option Qualified). This Plan is completely separate from the
tax-qualified pension plans maintained by the Company and is not funded or
qualified for special tax treatment under the Code. The Plan is intended to be
an unfunded plan covering a select group of management and highly compensated
employees for purposes of ERISA.



Section 1.2. Duration of the Plan. The Plan became effective as of January 1,
1980, and was most recently amended and restated effective October 1, 2003.
The provisions of the Plan as amended and restated apply to each individual
with an interest hereunder on or after October 1, 2003. The Plan shall remain
in effect until terminated by the Board pursuant to Article 9.




ARTICLE 2.

DEFINITIONS AND CONSTRUCTION



Section 2.1. Definitions. Wherever used in the Plan, the following terms shall
have the meanings set forth below and, where the meaning is intended, the
initial letter of the word is capitalized:




     (a) “Account” means the record keeping account or accounts maintained to
record the interest of each Participant under the Plan, and shall include the
aggregate of the Participant’s Retirement Supplement Account and Savings
Supplement Account. An Account is established for record keeping purposes only
and not to reflect the physical segregation of assets on the Participant’s
behalf, and may consist of such subaccounts or balances as the Administrator
may determine to be necessary or appropriate.




     (b) “Administrator” means the Employee Benefits Policy Committee of the
Company.




     (c) “Board” means the Board of Directors of the Company.




     (d) “Code” means the Internal Revenue Code of 1986, as interpreted by
regulations and rulings issued pursuant thereto, all as amended and in effect
from time to time. Any reference to a specific provision of the Code shall be
deemed to include reference to any successor provision thereto.




     (e) “Committee” means the Compensation Committee of the Board.





 








 



     (f) “Company” means Johnson Controls, Inc., a Wisconsin corporation, and
its successors as provided in Article 14.




     (g) “ERISA” means the Employee Retirement Income Security Act of 1974, as
interpreted by regulations and rulings issued pursuant thereto, all as amended
and in effect from time to time. Any reference to a specific provision of
ERISA shall be deemed to include reference to any successor provision thereto.




     (h) “Exchange Act” means the Securities Exchange Act of 1934, as
interpreted by regulations and rules issued pursuant thereto, all as amended
and in effect from time to time. Any reference to a specific provision of the
Exchange Act shall be deemed to include reference to any successor provision
thereto.




     (i) “Fair Market Value” means with respect to a Share, except as otherwise
provided herein, the closing sales price of a Share on the New York Stock
Exchange as of 4:00 p.m. EST on the date in question (or the immediately
preceding trading day if the date in question is not a trading day), and with
respect to any other property, such value as is determined by the
Administrator.




     (j) “Incentive Plan” means the Johnson Controls, Inc. Executive Incentive
Compensation Plan (Deferred Option Qualified) as from time to time amended and
in effect and any successor to such plan maintained by the Company or any
successor or affiliate of the Company.




     (k) “Investment Options” means the investment options offered under the
Savings Plan (excluding the Company stock fund), the Share Unit Account, and
any other alternatives made available by the Administrator, which shall be used
for the purpose of measuring hypothetical investment experience attributable to
a Participant’s Account.




     (l) “Participant” means an employee of the Company or a subsidiary who is
a participant in both the Incentive Plan and in the Retirement Plan or the
Savings Plan, and whose benefits under the Company’s pension or savings plans
are limited as described in Section 1.1; provided that the Committee shall
limit the foregoing group of eligible employees to a select group of management
and highly compensated employees, as determined by the Committee in accordance
with ERISA. Where the context so requires, a Participant also means a former
employee entitled to receive a benefit hereunder.




     (m) “Retirement Plan” means the defined benefit pension plan maintained by
the Company known as the Johnson Controls Pension Plan and any successor to
such plan maintained by the Company or any successor or affiliate of the
Company.




     (n) “Retirement Plan Benefits” means the aggregate monthly benefits
payable under the terms of the Retirement Plan.




     (o) “Savings Plan” means the defined contribution plan maintained by the
Company pursuant to Section 401(k) of the Code known as the Johnson Controls
Savings and Investment (401(k)) Plan and any successor to such plan maintained
by the Company or any successor or affiliate of the Company.





 








 



     (p) “Share” means a share of common stock of the Company.




     (q) “Share Unit Account” means the account described in Section 5.4, which
is deemed invested in Shares.




     (r) “Share Units” means the hypothetical Shares that are credited to the
Share Unit Accounts in accordance with Section 5.4.




     (s) “Valuation Date” means each day when the United States financial
markets are open for business, as of which the Administrator will determine the
value of each Account and will make allocations to Accounts.



Section 2.2. Construction. Wherever any words are used in the masculine, they
shall be construed as though they were used in the feminine in all cases where
they would so apply; and wherever any words are used in the singular or the
plural, they shall 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. Titles
of articles and sections are for general information only, and the Plan is not
to be construed by reference to such items.



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 illegal or invalid provision had not been included.




ARTICLE 3.

ADMINISTRATION



Section 3.1. General. The Committee shall have overall authority with respect
to administration of the Plan, provided that the Administrator shall have
responsibility for the general operation and daily administration of the Plan
as specified herein. If at any time the Committee shall not be in existence,
then the administrative functions of the Committee shall be assumed by the
Board (with the assistance of the Administrator), and any references herein to
the Committee shall be deemed to include references to the Board.



Section 3.2. Authority and Responsibility. In addition to the authority
specifically provided herein, the Committee and the Administrator shall have
the discretionary authority to take any action or make any determination it
deems necessary for the proper administration of the Plan with respect to its
respective duties, including but not limited to the power and authority to: (a)
prescribe rules and regulations for the administration of the Plan; (b)
prescribe forms for use with respect to the Plan; (c) interpret and apply all
of the Plan’s provisions, reconcile inconsistencies or supply omissions in the
Plan’s terms; (d) make appropriate determinations, including factual
determinations, and calculations; and (e) prepare all reports required by law.
Any action taken by the Committee shall be controlling over any contrary action
of the Administrator. The Committee or Administrator may delegate its
ministerial duties to a third party and to the extent of such delegation,
references to the Committee or Administrator hereunder shall mean such delegee.





 








 





Section 3.3. Decisions Binding. The Committee’s and the Administrator’s
determinations shall be final and binding on all parties with an interest
hereunder, unless determined to be arbitrary and capricious.



Section 3.4. Procedures for Administration. The Committee’s 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 the members 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 Company’s By-laws
and Wisconsin law for their services as directors of the Company. The
Administrator’s determinations shall be made in accordance with procedures it
establishes.



Section 3.5. Restrictions to Comply with Applicable Law. Notwithstanding any
other provision of the Plan to the contrary, the Company shall have no
liability to make any payment unless such payment would comply with all
applicable laws and the applicable requirements of any securities exchange or
similar entity. In addition, transactions under the Plan are intended to
comply with all applicable conditions of Rule 16b-3 under the Exchange Act.
The Committee and the Administrator shall administer the Plan so that
transactions under the Plan will be exempt from or comply with Section 16 of
the Exchange Act, and shall have the right to restrict or rescind any
transaction, or impose other rules and requirements, to the extent it deems
necessary or desirable for such exemption or compliance to be met.




ARTICLE 4.

RETIREMENT PLAN SUPPLEMENT



Section 4.1. Eligibility for Retirement Plan Supplement. Any Participant who
retires under the Retirement Plan on or after January 1, 1980, or such
Participant’s spouse or other beneficiary who is entitled to a benefit under
the Retirement Plan, shall be entitled to a benefit payable hereunder in
accordance with this Article 4.



Section 4.2. Amount of Retirement Plan Supplement. The amount of benefits to
which an eligible individual is entitled shall equal the excess, if any, of:




     (a) The amount of such Participant’s, surviving spouse’s or other
beneficiary’s Retirement Plan Benefits computed under the provisions of the
Retirement Plan, without regard to the limitations imposed by reason of Section
415 of the Code or the limit on considered compensation under Section
401(a)(17) of the Code, and on the assumption that all amounts of cash
compensation which the Participant elected to defer under the Incentive Plan
and/or under Article 5 of this Plan were paid as “Compensation” as defined in
the Retirement Plan (to the extent not already included in such “Compensation”
under the applicable Retirement Plan definition); over





 








 



     (b) The amount of Retirement Plan Benefits actually payable to such
Participant, surviving spouse or other beneficiary for each month under the
Retirement Plan, as computed under the provisions of the Retirement Plan and
subject to the above mentioned limitations.



Section 4.3. Payment of Benefits. Retirement Plan supplement benefits under
this Article 4 shall become payable when a Participant or the Participant’s
spouse or other beneficiary begins to receive Retirement Plan payments and
shall be payable in the same manner and subject to all the same options,
conditions, privileges and restrictions as are applicable to the benefits
payable to the Participant, his spouse or other beneficiary under the
Retirement Plan.




ARTICLE 5.

SAVINGS PLAN SUPPLEMENT



Section 5.1. Election and Crediting of Account. For each calendar year
beginning on or after December 31, 1986, each Participant may elect, in such
form and manner and within such time periods as the Administrator may
prescribe, that, in the event the Participant’s ability to make Before-Tax
Matched Contributions under the Savings Plan is limited by reason of Sections
401(k), 402(g) or 415 of the Code and/or the limit on considered compensation
under Section 401(a)(17) of the Code, then the difference between the
Participant’s actual Before-Tax Matched Contributions under the Savings Plan
for any calendar year and the amount that would have been contributed as
Before-Tax Matched Contributions but for such limits shall be credited, as of
December 31 of such year, to the Participant’s Savings Supplement Account;
provided that, when determining a Participant’s compensation for purposes of
this Article 5, the only bonus that may be included is the amount a Participant
receives under the Incentive Plan for the calendar year. Such Savings
Supplement Account shall also be credited as of each December 31 with an amount
equal to the difference between the amount of Matching Contributions actually
credited to the Participant’s Savings Plan account for the year and the amount
of Matching Contributions that would have been so credited if the amount
determined under the preceding sentence had actually been contributed to the
Savings Plan (determined without regard to the limitations imposed by Sections
401(m) and 415 of the Code); provided the Participant has met the eligibility
requirements to receive a Matching Contribution under the Savings Plan for such
year. An election under this Article 5 shall constitute an election by the
Participant to reduce the Participant’s salary by the amount determined under
the first sentence of this Section 5.1, and shall remain in effect from time to
time unless and until terminated prospectively by the Participant in such form
and manner and within such time periods as the Administrator may prescribe.
The Matching Contributions credited hereunder shall be subject to the same
vesting requirements as are imposed under the Savings Plan.



Section 5.2. Termination of Election. A Participant’s election to make
supplemental Before-Tax Contributions to this Plan shall terminate at the same
time as his election under the Savings Plan is terminated.



Section 5.3. Investment Election. Amounts credited to a Participant’s Savings
Supplement Account shall reflect the investment experience of the Investment
Options selected by the Participant. The Participant may make an initial
investment election at the time of enrollment in the Plan (or with respect to a
Participant who has a Savings Supplement Account balance on the restatement
effective date, within such period of time after such effective date as is
specified by





 








 





the Administrator) in whole increments of one percent (1%). A Participant may
also elect to reallocate his or her Savings Supplement Account, and may elect
to allocate any future deferrals, among the various Investment Options in whole
increments of one percent (1%) from time to time as prescribed by the
Administrator. Such investment elections shall remain in effect until changed
by the Participant. All investment elections shall become effective as soon as
practicable after receipt of such election, and must be made in the form and
manner and within such time periods as the Administrator may prescribe in order
to be effective. In the absence of an effective election, the Participant’s
Savings Supplement Account shall be deemed invested in the default fund under
the Savings Plan. Deferrals will be deemed invested in an Investment Option as
of the date on which the deferrals are allocated pursuant to Section 5.1.



On each Valuation Date, the Administrator or its designee shall credit the
deemed investment experience with respect to the selected Investment Options to
each Participant’s Savings Supplement Account.



Notwithstanding anything herein to the contrary, the Company retains the right
to allocate actual amounts hereunder without regard to a Participant’s request.



Section 5.4. Valuation of Share Unit Account. When any amounts are to be
allocated to a Share Unit Account (whether in the form of deferrals or amounts
that are deemed transferred from another Investment Option), such amount shall
be converted to whole and fractional Share Units, with fractional units
calculated to three decimal places, by dividing the amount to be allocated by
the Fair Market Value of a Share on the effective date of such allocation. If
any dividends or other distributions are paid on Shares while a Participant has
Share Units credited to his Account, such Participant shall be credited with a
dividend award equal to the amount of the cash dividend paid or Fair Market
Value of other property distributed on one Share, multiplied by the number of
Share Units credited to his Share Unit Account on the date the dividend is
declared. The dividend award shall be converted into additional Share Units as
provided above using the Fair Market Value of a Share on the date the dividend
is paid or distributed. Any other provision of this Plan to the contrary
notwithstanding, if a dividend is declared on Shares in the form of a right or
rights to purchase shares of capital stock of the Company or any entity
acquiring the Company, no additional Share Units shall be credited to the
Participant’s Share Unit Account with respect to such dividend, but each Share
Unit credited to a Participant’s Share Unit Account at the time such dividend
is paid, and each Share Unit thereafter credited to the Participant’s Share
Unit Account at a time when such rights are attached to Shares, shall
thereafter be valued as of any point in time on the basis of the aggregate of
the then Fair Market Value of one Share plus the then Fair Market Value of such
right or rights then attached to one Share.



Section 5.5. Payment of Benefits.




     (a) Subject to the provisions of subsection (b), a Participant, at the
time he commences participation in the Plan, shall make a distribution election
with respect to his Savings Supplement Account in such form and manner and
within such time periods as the Administrator may prescribe. The election
shall specify whether distributions shall be made in a single lump sum or in
annual installments of from two (2) to ten (10) years.





 








 



     (b) A distribution election shall be effective only when it is received
and approved by the Administrator, and shall remain in effect until modified by
the Participant. A Participant may from time to time modify his distribution
election by completing a revised distribution election, in such form and manner
and within such time periods as the Administrator may prescribe. The
Administrator may refuse to honor a distribution election that is not completed
in the manner and in such time as is prescribed by the Administrator. If no
valid election is in effect, distributions shall be made in ten (10) annual
installments.




     (c) Notwithstanding subsections (a) and (b), a Participant who is employed
by the Company or its subsidiaries when the Company provides the initial
distribution election after July 1, 2003, may make an election as described
above, and such election shall become immediately effective on the date
received by the Company, provided the election is received by the Company
within thirty (30) days after the election is made available to currently
employed Participants. Any change in such election shall be governed by the
provisions of subsection (b).




     (d) Payment of the amounts credited to a Participant’s Savings Supplement
Account hereunder shall be paid as follows:




(1) If payment is to be made in a lump sum, payment shall be made
in the first calendar quarter of the year immediately following the
year of the Participant’s termination of employment with the
Company and its subsidiaries (or on such earlier date after the
Participant’s termination of employment as is approved by the
Committee with respect to Participants who are subject to Section
16(b) of the Exchange Act, or approved by the Administrator with
respect to all other Participants). Payment shall be made in an
amount equal to the vested balance of the Participant’s Savings
Supplement Account as of the Valuation Date immediately preceding
the distribution date.




(2) If payment is to be made in annual installments, the first
annual payment shall be made in the first calendar quarter of the
year following the year of the Participant’s termination of
employment with the Company and its subsidiaries (or on such
earlier date after the Participant’s termination of employment as
is approved by the Committee with respect to Participants who are
subject to Section 16(b) of the Exchange Act, or approved by the
Administrator with respect to all other Participants), and shall be
in an amount equal to the value of 1/10th (or 1/9th, 1/8th, 1/7th,
etc. depending on the number of installments elected) of the vested
balance of the Participant’s Savings Supplement Account as of the
Valuation Date immediately preceding the distribution date. A
second annual payment shall be made in the first calendar quarter
of the second year after the year of the Participant’s termination
of employment with the Company and its subsidiaries (or on such
earlier date as is approved by the Committee with respect to
Participants who are subject to Section 16(b) of the Exchange Act,
or approved by the Administrator with respect to all other
Participants), and shall be in an amount equal to the value of
1/9th (or 1/8th, 1/7th, 1/6th, etc. depending on the number of
installments elected) of the vested balance of the Participant’s
Savings Supplement Account as of the Valuation Date immediately
preceding the distribution date. Each succeeding installment
payment (if any) shall be





 








 



determined in a similar manner, until the final installment which
shall equal the then remaining vested balance of such account as of
the Valuation Date immediately preceding the final distribution
date. Notwithstanding the foregoing provisions, if the balance of
a Participant’s Savings Supplement Account at any time is less than
$50,000 during the payout period, the remaining balance shall
immediately be paid in the form of a lump sum.




(3) Notwithstanding the foregoing, if the distribution under this
Section 5.5 is made within six (6) months after the Participant
ceases to be subject to Section 16(b) of the Exchange Act, then the
distribution shall be delayed until the date that is six (6) months
plus one day after the date such Participant ceases to be subject
to Section 16(b), unless the distribution is approved in advance by
the Committee or the distribution will not result in any liability
to the Participant under Section 16(b).



Section 5.6. Distribution in Event of Financial Emergency. If requested by a
Participant while employed by the Company or a subsidiary and if the
Administrator determines that a financial emergency has occurred in the
financial affairs of the Participant, all or part of the Participant’s vested
Savings Supplement Account may be paid out to the Participant at the sole
discretion of the Administrator in a cash lump sum or in such installment
payments as the Administrator may specify. The amount to be distributed to the
Participant shall only be such amount as is needed to alleviate the
Participant’s financial hardship.



Section 5.7. Death Benefit. Each Participant may designate a beneficiary in
such form and manner and within such time periods as the Administrator may
prescribe. In the event of the Participant’s death prior to receiving all
payments due from his Savings Supplement Account hereunder, the remaining
interest shall be paid to the Participant’s beneficiary in a lump sum, unless
the Committee (with respect to Participants who are subject to Section 16(b) of
the Exchange Act) or Administrator (with respect to all other Participants)
determines that payments may continue in accordance with the distribution
election in effect at the time of the Participant’s death. A Participant can
change his beneficiary designation at any time, provided that each beneficiary
designation shall revoke the most recent designation, and the last designation
received by the Company (or its delegee) while the Participant was alive shall
be given effect. If a Participant designates a beneficiary without providing in
the designation that the beneficiary must be living at the time of each
distribution, the designation shall vest in the beneficiary all of the
distribution whether payable before or after the beneficiary’s death, and any
distributions remaining upon the beneficiary’s death shall be made to the
beneficiary’s estate. In the event there is no valid beneficiary designation
in effect at the time of the Participant’s death, in the event the
Participant’s designated beneficiary does not survive the Participant, or in
the event that the beneficiary designation form provides that the Beneficiary
must be living at the time of each distribution and such designated Beneficiary
does not survive to a distribution date, the Participant’s 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
Participant’s divorce or legal separation from such spouse, provided the
Administrator has notice of such divorce or legal separation prior to payment.





 








 






EQUALIZATION BENEFIT PLAN ACCOUNTS



Section 5.8. Establishment of Accounts. The Company shall establish book
keeping reserve Accounts on behalf of each Participant with respect to each
type of benefit offered under this Plan. The first such reserve shall be known
as the “Retirement Supplement Account” and shall relate to the benefits to be
paid pursuant to Article 4 above. The second such reserve shall be known as
the “Savings Supplement Account” and shall be comprised of the individual
Participant Savings Supplement Accounts (and subaccounts) described in Article
5.



Section 5.9. Administration of Accounts. Each Account will be administered as
follows:




     (a) The Account shall serve solely as a device for determining the amount
of the accrued deferred liability for the benefit payments provided herein, and
shall not constitute or be treated as a trust fund of any kind, it being
expressly provided that the amounts credited to the Account shall be and remain
the sole property of the Company and that no Participant shall have any
proprietary rights of any nature whatsoever with respect thereto or with
respect to any investments the Company may make to aid it in meeting its
obligations hereunder.




     (b) With respect to each fiscal year of the Company while the Plan is in
effect, the Retirement Supplement Account shall be credited or charged with
such annual amounts as shall be determined to be appropriate based upon
assumptions acceptable to the Administrator, and the Savings Supplement Account
shall be credited or charged with such amounts as are prescribed in Article 5.




     (c) No funds or other assets of the Company shall be segregated and
attributable to the amounts that may from time to time be credited to the
Accounts. Benefit payments under the Plan shall be made from the general
assets of the Company at the time any such payment becomes due and payable. To
the extent that any person acquires a right to receive payments from the
Company hereunder, such right shall be no greater than the right of an
unsecured creditor.




ARTICLE 6.

NON-ALIENATION OF PAYMENTS




            Except as specifically provided herein, benefits payable under the Plan
shall not be subject in any manner to alienation, sale, transfer, assignment,
pledge, attachment, garnishment or encumbrance of any kind. Any attempt to
alienate, sell, transfer, assign, pledge or otherwise encumber any such benefit
payment, whether currently or thereafter payable, shall not be recognized by
the Administrator or the Company. Any benefit payment due hereunder shall not
in any manner be liable for or subject to the debts or liabilities of any
Participant or other person entitled thereto. If any such person shall attempt
to alienate, sell, transfer, assign, pledge or encumber any benefit payments to
be made to that person under the Plan or any part thereof, or if by reason of
such person’s bankruptcy or other event happening at any time, such payments
would devolve upon anyone else or would not be enjoyed by such person, then the
Administrator, in its discretion, may terminate such person’s interest in any
such benefit





 








 


payment, and hold or apply it to or for the benefit of that person, the
spouse, children or other dependents thereof, or any of them, in such manner as
the Administrator deems proper.




ARTICLE 7.

LIMITATION OF RIGHTS AGAINST THE COMPANY




     Participation in this Plan, or any modifications thereof, or the payments
of any benefits hereunder, shall not be construed as giving to any person any
right to be retained in the service of the Company, limiting in any way the
right of the Company to terminate such person’s employment at any time,
evidencing any agreement or understanding that the Company will employ such
person in any particular position or at any particular rate of compensation or
guaranteeing such person any right to receive any other form or amount of
remuneration from the Company.




ARTICLE 8.

AMENDMENT OR TERMINATION



Section 8.1. Amendment or Termination. The Board may amend or terminate this
Plan at any time, provided that, except as provided in Section 9.3, no such
amendment or modification shall adversely affect the rights of any Participant,
spouse or other beneficiary then receiving benefits under this Plan or deprive
any such person of the right to receive amounts previously credited to the
Participant’s Savings Supplement Account (except as such account balance may be
reduced as a result of investment losses allocable to such Account), unless the
Company shall have substituted therefor an equivalent amount of immediate or
deferred compensation under some other plan, program or individual agreement
with such individual. In addition, the Administrator may at any time amend the
Plan to make administrative changes and changes necessary to comply with
applicable law.



Section 8.2. Entitlement to Benefits. It is understood that an individual’s
entitlement to retirement supplement benefits under Article 4 of this Plan may
be automatically reduced as the result of an increase in his Retirement Plan
Benefits. Nothing herein shall be construed in any way to limit the right of
the Company to amend or modify the Retirement Plan or Savings Plan.



Section 8.3. Termination; Change of Control. Notwithstanding the foregoing,
the Board may take the following actions without obtaining the consent of any
Participant, spouse or Beneficiary:




     (a) In the event of the Plan’s termination, the Board may provide that all
elections under this Plan then outstanding be cancelled and that all amounts
accrued to the date of termination be distributed to all Participants, their
spouses or beneficiaries, as applicable, in a single sum payment as soon as
practicable after the date of termination or on such other date as is specified
by the Board, regardless of any distribution election then in effect. In such
event, the Board shall specify the actuarial assumptions and other factors to
be used to determine a single sum value of any Retirement Supplement benefits
accrued hereunder as of the effective date of the Plan’s termination.




     (b) The Board may amend the provisions of Article 10 prior to the
effective date of a Change of Control.





 








 



ARTICLE 9.

SPECIAL RULES APPLICABLE IN THE EVENT OF A

CHANGE OF CONTROL OF THE COMPANY



Section 9.1. Acceleration of Payments. Notwithstanding any other provision of
this Plan, all amounts credited to a Participant’s Accounts under the Plan
shall be paid to the Participant, spouse or beneficiary entitled thereto, in a
lump sum in cash within 30 days after a Change of Control. In such event, the
Administrator shall specify the actuarial assumptions and other factors to be
used to determine the single sum value of any Retirement Supplement benefits
accrued hereunder as of the date of the Change of Control.



Section 9.2. Definition of a Change of Control. A “Change of Control” shall
mean any of the following events:




     (a) The acquisition, other than from the Company, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) 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 “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 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 of Control; or




     (b) Individuals who, as of May 24, 1989, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of
the Board, provided that any individual becoming a director subsequent to May
24, 1989, whose election or nomination for election by the Company’s
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, but excluding, for this
purpose, any such individual whose initial assumption of office is in
connection with an actual or threatened election contest





 








 


relating to the election of the Directors of the Company (as such terms
are used in Rule 14a-ll of Regulation l4A promulgated under the Exchange Act);
or




     (c) Consummation of a reorganization, merger or consolidation (a “Business
Combination”), in each case, with respect to which all or substantially all of
the individuals and entities who were the respective beneficial owners of the
Outstanding Company Common Stock and Company Voting Securities immediately
prior to such Business Combination do not, following such Business Combination,
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
Business Combination in substantially the same proportion as their ownership
immediately prior to such Business Combination of the Outstanding Company
Common Stock and Company Voting Securities, as the case may be; or




     (d) 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 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.



Section 9.3. Maximum Payment Limitations.




     (a) Limit on Payments. Except as provided in subsection (b) below, if any
portion of the payments or benefits described in this Plan or under any other
agreement with or plan of the Company or a subsidiary (in the aggregate, “Total
Payments”), would constitute an “excess parachute payment”, then the Total
Payments to be made to the Participant shall be reduced such that the value of
the aggregate Total Payments that the Participant is entitled to receive shall
be one dollar ($1) less than the maximum amount which the Participant may
receive without becoming subject to the tax imposed by Section 4999 of the Code
or which the Company may pay without loss of deduction under Section 280G(a) of
the Code; provided that this Section shall not apply in the case of a
Participant who has in effect a valid employment contract providing that the
Total Payments to the Participant shall be determined without regard to the
maximum amount allowable under Section 280G of the Code. The terms “excess
parachute payment” and “parachute payment” shall have the meanings assigned to
them in Section 280G of the Code, and such “parachute payments” shall be valued
as provided therein. Present value shall be calculated in accordance with
Section 280G(d)(4) of the Code. Within forty (40) days following delivery of
notice by the Company to the Participant of its belief that there is a payment
or benefit due the Participant which will result in an excess parachute
payment, the Participant and the Company, at the Company’s expense, shall
obtain the opinion (which need not be unqualified) of nationally recognized tax
counsel selected by the Company’s independent auditors and acceptable to the
Participant in his sole discretion (which may be regular outside counsel to the
Company), which opinion sets forth (A) the amount of the Base Period Income,





 








 


(B) the amount and present value of Total Payments and (C) the amount and
present value of any excess parachute payments determined without regard to the
limitations of this Section. As used in this Section, the term “Base Period
Income” means an amount equal to the Participant’s “annualized includible
compensation for the base period” as defined in Section 280G(d)(1) of the Code.
For purposes of such opinion, the value of any noncash benefits or any
deferred payment or benefit shall be determined by the Company’s independent
auditors in accordance with the principles of Sections 280G(d)(3) and (4) of
the Code, which determination shall be evidenced in a certificate of such
auditors addressed to the Company and the Participant. Such opinion shall be
addressed to the Company and the Participant and shall be binding upon the
Company and the Participant. If such opinion determines that there would be an
excess parachute payment, the payments hereunder that are includible in Total
Payments or any other payment or benefit determined by such counsel to be
includible in Total Payments shall be reduced or eliminated as specified by the
Participant in writing delivered to the Company within thirty days of his
receipt of such opinion or, if the Participant fails to so notify the Company,
then as the Company shall reasonably determine, so that under the bases of
calculations set forth in such opinion there will be no excess parachute
payment. If such legal counsel so requests in connection with the opinion
required by this Section, the Participant and the Company shall obtain, at the
Company’s expense, and the legal counsel may rely on in providing the opinion,
the advice of a firm of recognized executive compensation consultants as to the
reasonableness of any item of compensation to be received by the Participant.
If the provisions of Sections 280G and 4999 of the Code are repealed without
succession, then this Section shall be of no further force or effect.




     (b) Employment Contract Governs. The provisions of subsection (a) above
shall not apply to a Participant whose employment is governed by an employment
contract that provides for Total Payments in excess of the limitation described
in subsection (a) above.




ARTICLE 10.

ERISA PROVISIONS



Section 10.1. Claims Procedures.




     (a) Initial Claim. If a Participant, spouse or beneficiary (the
“claimant”) believes that he is entitled to a benefit under the Plan that is
not provided, the claimant or his legal representative shall file a written
claim for such benefit with the Administrator. The Administrator shall review
the claim within 90 days following the date of receipt of the claim; provided
that the Administrator may determine that an additional 90-day extension is
necessary due to circumstances beyond the Administrator’s control, in which
event the Administrator shall notify the claimant prior to the end of the
initial period that an extension is needed, the reason therefor and the date by
which the Administrator expects to render a decision. If the claimant’s claim
is denied in whole or part, the Administrator shall provide written notice to
the claimant of such denial. The written notice shall include the specific
reason(s) for the denial; reference to specific Plan provisions upon which the
denial is based; 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 a description of the Plan’s review
procedures (as set forth in subsection (b)) and the time limits applicable to
such procedures, including a statement of the claimant’s right to bring a civil
action under section 502(a) of ERISA following an adverse





 








 


determination upon review. If the claimant does not receive a written
decision within the time period(s) described above, the claim shall be deemed
denied on the last day of such period(s).




     (b) Request for Appeal. The claimant has the right to appeal the
Administrator’s decision by filing a written appeal to the Committee within 60
days after claimant’s receipt of the decision or deemed denial. The claimant
will have the opportunity, upon request and free of charge, to have reasonable
access to and copies of all documents, records and other information relevant
to the claimant’s appeal. The claimant may submit written comments, documents,
records and other information relating to his claim with the appeal. The
Committee will review all comments, documents, records and other information
submitted by the claimant relating to the claim, regardless of whether such
information was submitted or considered in the initial claim determination.
The Committee shall make a determination on the appeal within 60 days after
receiving the claimant’s written appeal; provided that the Committee may
determine that an additional 60-day extension is necessary due to circumstances
beyond the Committee’s control, in which event the Committee shall notify the
claimant prior to the end of the initial period that an extension is needed,
the reason therefor and the date by which the Committee expects to render a
decision. If the claimant’s appeal is denied in whole or part, the Committee
shall provide written notice to the claimant of such denial. The written
notice shall include the specific reason(s) for the denial; reference to
specific Plan provisions upon which the denial is based; a statement that the
claimant is entitled to receive, upon request and free of charge, reasonable
access to and copies of all documents, records, and other information relevant
to the claimant’s claim; and a statement of the claimant’s right to bring a
civil action under section 502(a) of ERISA. If the claimant does not receive a
written decision within the time period(s) described above, the appeal shall be
deemed denied on the last day of such period(s).



Section 10.2. ERISA Fiduciary. For purposes of ERISA, the Committee shall be
considered the named fiduciary under the Plan and the plan administrator.




ARTICLE 11.

TAX WITHHOLDING




            The Company shall have the right to deduct from any payment 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,
any deferrals or the vesting of any amounts hereunder.




ARTICLE 12.

OFFSET




            The Company shall have the right to offset from the benefits payable
hereunder any amount that the Participant owes to the Company or any subsidiary
without the consent of the Participant (or his spouse or beneficiary, in the
event of the Participant’s death).




ARTICLE 13.

SUCCESSORS




            All obligations of the Company under the Plan shall be binding on any
successor to the Company, whether the existence of such successor 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.




ARTICLE 14.

DISPUTE RESOLUTION



Section 14.1. Governing Law. This Plan is intended to be a plan of deferred
compensation maintained for a select group of management or highly compensated
employees as that term is used in ERISA, and shall be interpreted so as to
comply with the applicable requirements thereof. In all other respects, the
Plan is to be construed and its validity determined according to the laws of
the State of Wisconsin to the extent such laws are not preempted by federal
law.



Section 14.2. Limitation on Actions. Any action or other legal proceeding
under ERISA with respect to the Plan may be brought only after the claims and
appeals procedures of Article 11 are exhausted and only within the period
ending on the earlier of (i) one year after the date the claimant receives
notice of a denial or deemed denial upon appeal under Section 11.1(b), or (ii)
the expiration of the applicable statute of limitations period under applicable
federal law. Any action or other legal proceeding not adjudicated under ERISA
must be arbitrated in accordance with the provisions of Section 15.3.



Section 14.3. Arbitration.




     (a) Application. Notwithstanding any employee agreement in effect between
a Participant and the Company or any subsidiary employer, if a Participant,
spouse or beneficiary brings a claim that relates to benefits under this Plan
that is not covered under ERISA, and 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 to 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:




Office of General Counsel

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 Participant, spouse or beneficiary must initiate and
participate in any complaint resolution procedure identified in the Company’s
or subsidiary’s 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 subsidiary 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 attorney’s fees to
the extent permitted by law, or the imposition of sanctions for abuse of the
arbitration process. The arbitrator’s award must be rendered in a writing that
sets forth the essential findings and conclusions on which the arbitrator’s
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 subsidiary 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/her
attorney’s or representative’s 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.