exv10wm



 





Exhibit 10.M




JOHNSON CONTROLS, INC.

DIRECTOR SHARE UNIT PLAN




ARTICLE 1.

PURPOSE AND DURATION




          Section 1.1.  Purpose. The purpose of the Johnson Controls, Inc. Director Share
Unit Plan is to advance the Company’s growth and success, and to advance the interests of its
shareholders, by attracting and retaining well-qualified Outside Directors upon whose judgment the
Company is largely dependent for the successful conduct of its operations and by providing such
individuals with incentives to put forth maximum effort for the long-term success of the Company’s
business, thereby aligning their interests more closely with the interests of shareholders.




          Section 1.2.  Duration. The Plan was originally effective on November 18, 1998.
The Plan is amended and restated effective January 1, 2008. The provisions of the Plan as amended
and restated apply to each individual with an interest hereunder on or after January 1, 2008.




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, when the meaning is intended, the initial letter of the word
is capitalized:




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




          (b) “Affiliate” means each entity that is required to be included in the Company’s controlled
group of corporations within the meaning of Code Section 414(b), or that is under common control
with the Company within the meaning of Code Section 414(c); provided that for purposes of
determining when a Participant has incurred a Separation from Service, the phrase “at least 50
percent” shall be used in place of the phrase “at least 80 percent” in each place that phrase
appears in the regulations issued thereunder.




          (c) “Beneficiary” means the person or persons entitled to receive the interest of a
Participant in the event of the Participant’s death as provided in Section 3.7.




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




          (e) “Change of Control” has the meaning ascribed to such term in Section 10.2.




          (f) “Committee” means the Corporate Governance Committee of the Board; provided, however, that
if the Corporate Governance Committee does not include two or more “non-employee directors” within
the meaning of Rule 16b-3 of the Exchange Act, then the term




 









 







“Committee” means such other committee appointed by the Board consisting of two or more
“non-employee directors.”




          (g) “Company” means Johnson Controls, Inc., a Wisconsin corporation, and any successor thereto
as provided in Article 11.




          (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) “Investment Options” means the investment options offered under the Johnson Controls
Savings and Investment (401k) Plan (excluding the Company stock fund) or any successor plan
thereto, the Share Units, 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 Retirement Account.




          (k) “Outside Director” means a member of the Board who is not an officer or employee of the
Company or an Affiliate.




          (l) “Participant” means each Outside Director who has a Retirement Account under the Plan.
Where the context so requires, a Participant also means a former director who is entitled to a
benefit under the Plan.




          (m) “Plan” means the arrangement described herein, as from time to time amended and in effect.




          (n) “Retirement Account” means the record keeping account maintained to record the interest of
each Participant under the Plan. A Retirement 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.




          (o) “Separation from Service” means a Participant’s cessation of service as a Board member,
for any reason, provided the cessation of service is a good-faith and complete termination of the
Participant’s relationship with the Company and its Affiliates, within the meaning of Code Section
409A. If, at the time the Participant’s service as a Board member ends, the Participant begins
providing services to the Company or an Affiliate as an employee, the Participant shall not incur a
Separation from Service under the terms of the Plan until the Participant has a separation from
service from the Company or an Affiliate as an employee within the meaning of Code Section 409A.




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          (p) “Share” means a share of the Company’s common stock, $0.16 par value.




          (q) “Share Units” means the hypothetical Shares that are credited to the Participant’s
Retirement Account in accordance with Article 5.




          (r) “Total and Permanent Disability” means the Participant’s inability to engage in any
substantial gainful activity as a result of a medically-determinable physical or mental impairment
which can be expected to result in death or which can be expected to last for a continuous period
of at least twelve (12) months, as determined by the Administrator. The Administrator may require
the Participant 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.




          (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 Retirement Account.




          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 use 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 said 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 or not be composed of members of the Board who qualify as
“non-employee directors”, then the Board shall administer the Plan (with the assistance of the
Administrator) and all references herein to the Committee shall be deemed to include the Board.




          Section 3.2.  Authority. In addition to the authority specifically provided
herein, the Committee and the Administrator shall have full power and discretionary authority to
take any action or make any determination deemed necessary for the proper administration of the
Plan with respect to the respective duties of each under the Plan, including but not limited to the
power and authority to: (a) interpret the Plan; (b) correct errors, supply omissions or reconcile
inconsistencies in the Plan’s terms; (c) establish, amend or waive rules and regulations, and
appoint such agents, as it deems appropriate for the Plan’s administration; and (d) make any other
determinations, including factual determinations, and take any other action as it determines is
necessary or desirable for the Plan’s administration. Any action taken by the Committee shall




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be controlling over any contrary action of the Administrator. The Committee and the Administrator
may delegate their ministerial duties to third parties and to the extent of such delegation,
references to the Committee or Administrator herein shall mean such delegates, if any.




          Section 3.3.  Decision Binding. The Committee’s and the Administrator’s
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, and such determinations and decisions shall not be reviewable.




          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. The
Administrator’s determinations shall be made in accordance with such procedures it establishes.




          Section 3.5.  Indemnification. Neither the Committee, nor the Administrator, nor
any member thereof shall be liable for any act, omission, interpretation, construction or
determination made in connection with the Plan in good faith and the members of the Committee and
the Administrator shall be entitled to indemnification and reimbursement by the Company in respect
of any claim, loss, damage or expense (including attorneys’ fees) arising therefrom to the full
extent permitted by law and under any directors’ and officers’ liability insurance that may be in
effect from time to time.




          Section 3.6.  Restrictions to Comply with Applicable Law. 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.




          Section 3.7.  Designation of Beneficiary. Each Participant may designate a
Beneficiary in such form and manner and within such time periods as the Administrator may
prescribe. 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 Administrator while the Participant is 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 distribution, the designation shall vest in the Beneficiary all of the distribution
payable after the Participant’s death, and any distributions remaining upon the Beneficiary’s death
shall be made to the Beneficiary’s estate. If there is no valid beneficiary designation in effect
at the time of the Participant’s death, if the Beneficiary does not survive the Participant, or if
the beneficiary designation 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




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shall become null and void on the date the Administrator receives notice of the Participant’s
divorce or legal separation.




ARTICLE 4.

PARTICIPATION




          Each Outside Director shall automatically become a Participant on the date the individual is
first elected to become an Outside Director. No new Participants shall be added to the Plan after
October 1, 2006.




ARTICLE 5.

RETIREMENT ACCOUNTS




          Section 5.1.  Establishment of Retirement Account. Each Participant shall have a
Retirement Account established under this Plan on his behalf. A Participant’s Retirement Account
shall be credited with “Share Units” and otherwise subject to adjustment as follows:




          (a) Conversion of Accrued Benefits. For each Participant who was an Outside Director
of the Company as of December 1, 1998, the Administrator shall calculate the value of such Outside
Director’s accrued benefits under the Company’s Director Retirement Plan as of September 30, 1998.
Each such Outside Director’s Retirement Account shall be credited with a number of Share Units
equal to the result obtained by (i) dividing (A) the value of such Outside Director’s accrued
benefits under the Company’s Director Retirement Plan as of September 30, 1998 by (B) the Fair
Market Value of a Share as of the first trading day in December 1998.




          (b) Annual Credit of Share Units. On the date of each regular meeting of the Board
held in November, the Retirement Account of each Participant who is then an Outside Director shall
be credited with a number of additional Share Units equal to the result obtained by (i) dividing
(A) the amount determined for such year by the Committee by (B) the Fair Market Value of a Share on
such date. Effective October 1, 2006, no additional Share Units shall be credited to a
Participant’s Retirement Account under this subsection (b).




          Section 5.2.  Interim Election. Any Outside Director whose election to the Board
is first effective at any time other than the regular meeting of the Board held in November shall
have credited to his or her Retirement Account a proportionate share of the Annual Credit at the
time of effectiveness of his election. Such credit shall be based on the Fair Market Value of a
Share on the date on which his election is effective. Effective October 1, 2006, no Share Units
shall be credited to a Participant’s Retirement Account under this Section 5.2.




          Section 5.3.  Investment Election. Effective November 15, 2006, amounts credited
to a Participant’s Retirement Account shall reflect the investment experience of the Investment
Options selected by the Participant. A Participant may elect to reallocate his or her Retirement
Account among the various Investment Options in whole increments of one percent (1%) from time to
time as prescribed by the Administrator, subject to any restrictions on re-allocation with respect
to Share Units as may be imposed by the Company. 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 by the Administrator or its




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designee, and must be made in the form and manner and within such time periods as the Administrator
prescribes in order to be effective. In the absence of an effective election, the Participant’s
Account shall be deemed invested in the Share Unit Account.




          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 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.  Securities Law Restrictions. Notwithstanding anything to the
contrary herein, all elections under Section 5.3 by a Participant who is subject to Section 16 of
the Exchange Act are subject to review by the Administrator prior to implementation. In
accordance with Section 3.6, the Administrator may restrict additional transactions, rescind
transactions, or impose other rules and procedures, to the extent deemed desirable by the
Administrator in order to comply with the Exchange Act, including, without limitation, application
of the review and approval provisions of this Section 5.4 to Participants who are not subject to
Section 16 of the Exchange Act.




          Section 5.5.  Accounts are For Record Keeping Purposes Only. Retirement Accounts
and the record keeping procedures described herein serve solely as a device for determining the
amount of benefits accumulated by a Participant under the Plan, and shall not constitute or imply
an obligation on the part of the Company to fund such benefits.




ARTICLE 6.

RULES WITH RESPECT TO SHARE UNITS




          Section 6.1.  Transactions Affecting Common Stock. In the event of any merger,
share exchange, reorganization, consolidation, recapitalization, stock dividend, stock split or
other change in corporate structure of the Company affecting Shares, the Administrator may make
appropriate equitable adjustments with respect to the Share Units credited to the Retirement
Account of each Participant, including without limitation, adjusting the date as of which such
units are valued and/or distributed, as the Administrator determines is necessary or desirable to
prevent the dilution or enlargement of the benefits intended to be provided under the Plan.




          Section 6.2.  No Shareholder Rights With Respect to Share Units. Participants
shall have no rights as a stockholder pertaining to Share Units credited to their Retirement
Accounts. No Participant or Beneficiary shall have any right to receive a distribution of Shares
under this Plan. All distributions under the Plan are made in cash.




          Section 6.3.  Dividends. Whenever the Company declares a dividend on its Shares,
in cash or in property, at a time when Participants have Share Units credited to their Retirement
Accounts, a dividend award shall be made to all such Participants as of the date of payment of the
dividend. The dividend award for a Participant shall be determined by multiplying the Share Units
credited to the Participant’s Account as of the date the dividend is declared by the amount or Fair
Market Value of the dividend paid or distributed on one Share.




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The dividend award shall be credited to the Participant’s Retirement Account by converting such
award into Share Units by dividing the amount of the dividend award by the Fair Market Value of a
Share on the date the dividend is paid. 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 of any entity acquiring the Company, such dividend award
shall not be credited to the Participant’s Retirement Account, but each Share Unit credited to a
Participant’s Retirement Account at the time such dividend is paid, and each Share Unit thereafter
credited to the Participant’s Retirement 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 or
previously attached to one Share.




ARTICLE 7.

PAYMENT




          Section 7.1.  Distributions.




          (a) Participant’s Separation from Service. Upon a Participant’s Separation from
Service for any reason, the Participant, or his Beneficiary, in the event of his death, shall be
entitled to payment of the amount accumulated in such Participant’s Retirement Account.




          Section 7.2.  Election of Form of Distribution. A Participant, within the first
thirty (30) days following the date he commences participation in the Plan, shall make a
distribution election with respect to his Retirement Account. Such election shall be made in such
form and manner and within such time periods as the Administrator may prescribe, and shall be
irrevocable. The election shall specify whether distributions shall be made in a single lump sum
or annual installments of from two (2) to ten (10) years. If no valid election is in effect,
distribution shall be made in ten (10) annual installments.




          Section 7.3.  Manner of Distribution. A Participant’s Retirement Account shall be
paid or begin to be paid in cash as follows:




          (a) If payment is to be made in a lump sum, payment shall be made in the first calendar
quarter of the year following the year in which the Participant’s Separation from Service occurs,
and shall be in an amount equal to the balance of the Participant’s Retirement Account as of the
Valuation Date immediately preceding the distribution date.




          (b) 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 in which the Participant’s Separation
from Service occurs, and shall equal the value of 1/10th (or 1/9th,
1/8th, 1/7th, etc. depending on the number of installments elected) of the
balance of the Participant’s Retirement 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 in which the Participant’s Separation from Service occurs, and shall
equal the value of
1/9th (or 1/8th, 1/7th, 1/6th, etc.
depending on the number of installments elected) of the balance of the Participant’s Retirement
Account as of the Valuation Date immediately preceding the distribution date. Each succeeding
installment payment (if any) shall be determined in a similar




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manner, until the final installment which shall equal the then remaining 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 Retirement Account
as of the Valuation Date immediately preceding a distribution date is $50,000 or less, then the
entire remaining balance of the Participant’s Retirement Account shall be paid in the form of a
lump sum on such distribution date.




          Section 7.4.  Distribution of Remaining Account Following Participant’s Death. In
the event of the Participant’s death prior to receiving all payments due under this Article 7, the
balance of the Participant’s Retirement Account shall be paid to the Participant’s Beneficiary in a
lump sum in the first calendar quarter of the year following the year of the Participant’s death.




          Section 7.5.  Tax Withholding. The Company shall have the right to deduct from
any deferral or payment made hereunder, or from any other amount due a Participant, the amount of
cash sufficient to satisfy the Company’s or Affiliate’s foreign, federal, state or local income tax
withholding obligations with respect to such deferral or payment. In addition, if prior to the
date of distribution of any amount hereunder, the Federal Insurance Contributions Act (FICA) tax
imposed under Code Sections 3101, 3121(a) and 3121(v)(2), where applicable, becomes due, the
Participant’s Retirement Account balance shall be reduced by the amount needed to pay the
Participant’s portion of such tax, plus an amount equal to the withholding taxes due under federal,
state or local law resulting from the payment of such FICA tax, and an additional amount to pay the
additional income tax at source on wages attributable to the pyramiding of the Code Section 3401
wages and taxes, but no greater than the aggregate of the FICA tax amount and the income tax
withholding related to such FICA tax amount.




          Section 7.6.  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 Participant’s death).




          Section 7.7.  Additional Payment Provisions.




          (a) Acceleration of Payment. Notwithstanding the foregoing:





	 	(1)	 	If an amount deferred under this Plan is required to be
included in income under Code Section 409A prior to the date such amount is
actually distributed, a Participant shall receive a distribution, in a lump sum
within ninety (90) days after the date the Plan fails to meet the requirements
of Code Section 409A, of the amount required to be included in the
Participant’s income as a result of such failure.
	 
	 	(2)	 	If an amount under the Plan is required to be immediately
distributed in a lump sum under a domestic relations order within the meaning
of Code Section 414(p)(1)(B), it may be distributed according to the terms of
such order, provided the Participant holds the Administrator harmless with
respect to such distribution. The Plan shall not distribute amounts required
to be distributed under a domestic relations order other than in the limited
circumstance specifically stated herein.




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          (b) Delay in Payment. Notwithstanding the foregoing:





	 	(1)	 	If a distribution required under the terms of this Plan would
jeopardize the ability of the Company to continue as a going concern, the
Company shall not be required to make such distribution. Rather, the
distribution shall be delayed until the first date that making the distribution
does not jeopardize the ability of the Company to continue as a going concern.
Any distribution delayed under this provision shall be treated as made on the
date specified under the terms of this Plan.
	 
	 	(2)	 	If the distribution will violate the terms of Section 16(b) of
the Exchange Act or other Federal securities laws, or any other applicable law,
then the distribution shall be delayed until the earliest date on which making
the distribution will not violate such law.





ARTICLE 8.

TERMS AND CONDITIONS




          Section 8.1.  No Funding. No stock, cash or other property will be deliverable to
a Participant or his or her Beneficiary in respect of the Participant’s Retirement Account until
the date or dates identified pursuant to Article 7, and all Retirement Accounts shall be reflected
in one or more unfunded accounts established for the Participant by the Company. Payment of the
Company’s obligation will be from general funds, and no special assets (stock, cash or otherwise)
have been or will be set aside as security for this obligation, unless otherwise provided by the
Administrator.




          Section 8.2.  No Transfers. Except as permitted by Section 7.5, a Participant’s
rights to payments under this Plan are not subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance by a Participant or his Beneficiary, or garnishment by a
Participant’s creditors or the creditors of his or her beneficiaries, whether by operation of law
or otherwise, and any attempted sale, transfer, assignment, pledge, or encumbrance with respect to
such payment shall be null and void, and shall be without legal effect and shall not be recognized
by the Company.




          Section 8.3.  Unsecured Creditor. The right of a Participant or Beneficiary to
receive payments under this Plan is that of a general, unsecured creditor of the Company, and the
obligation of the Company to make payments constitutes a mere promise by the Company to pay such
benefits in the future. Further, the arrangements contemplated by this Plan are intended to be
unfunded for tax purposes and for purposes of Title I of ERISA.




          Section 8.4.  Retention as Director. Nothing contained in the Plan shall
interfere with or limit in any way the right of the shareholders of the Company to remove any
Director from the Board, nor confer upon any Director any right to continue in the service of
Company as a Director.




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ARTICLE 9.

TERMINATION AND AMENDMENT OF PLAN




          Section 9.1.  Amendment. To the extent permitted by Code Section 409A, the
Committee may at any time amend the Plan; provided, however, that (a) the Committee may not amend
the Plan more than once every six months, other than amendments the Committee deems necessary or
advisable to assure the conformity of the Plan with any requirements of state and federal law or
regulations now or hereafter in effect, and (b) subject to the provisions of Section 9.2, no
amendment shall affect adversely any of the rights of any Outside Director (except as such Outside
Director’s Retirement Account balance may be reduced as a result of investment losses allocable to
such account), without such Outside Director’s consent, under any election theretofore in effect
under the Plan; provided further that the Board must approve any amendment that expands the class
of individuals eligible for participation under the Plan, that materially increases the benefits
provided hereunder, or that is required to be approved by the Board by any applicable law or the
listing requirements of the national securities exchange upon which the Company’s common stock is
then traded. In addition, the Administrator may at any time amend the Plan to make administrative
changes and changes necessary to comply with applicable law.




          Section 9.2.  Termination. The Committee may terminate the Plan in accordance
with the following provisions. Upon termination of the Plan, the Committee may authorize the
payment of all amounts accrued under the Plan in a single sum payment without regard to any
distribution election then in effect, only in the following circumstances:





	 	(1)	 	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 single sum
payment must be distributed by 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.
	 
	 	(2)	 	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 single sum payment shall be paid no earlier than twelve (12) months
(and no later than twenty-four (24) months) after the date of the Plan’s
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
Plan’s termination.




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ARTICLE 10.

CHANGE OF CONTROL




          Section 10.1.  Acceleration of Payment. Anything in this Plan to the contrary
notwithstanding, each Participant’s Retirement Account shall be paid in cash in a lump sum within
thirty (30) days following the occurrence of a Change of Control. The amount of the cash payment
shall be determined by multiplying the number of Share Units in the Retirement Account by the Fair
Market Value of a Share as of the most recent Valuation Date preceding the occurrence of the Change
of Control.




          In determining the amount accumulated in a Participant’s Retirement Account, each Share Unit
shall have a value equal to the higher of (a) the highest reported sales price, regular way, of a
share of the Company’s common stock on the Composite Tape for New York Stock Exchange Listed Stocks
(the “Composite Tape”) during the sixty (60)-day period prior to the date of the Change of Control
of the Company and (b) if the Change of Control of the Company is the result of a transaction or
series of transactions described in Section 10.2(a), the highest price per Share of the Company
paid in such transaction or series of transactions.




          Section 10.2.  Definition of a Change of Control. A Change of Control means any
of the following events, provided that each such event would constitute a change of control within
the meaning of Code Section 409A:




          (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




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          (b) Individuals who, as of January 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 January 1, 2005, 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; 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.




          (d) For purposes of this Section 10.2, 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 11.

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. This Plan shall be binding upon and inure to the benefit of the Participants,
Beneficiaries, and their heirs, executors, administrators and legal representatives.




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ARTICLE 12.

DISPUTE RESOLUTION




          Section 12.1.  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).




          Section 12.2.  Arbitration.




          (a) Application. Notwithstanding anything to the contrary herein, if a Participant or
Beneficiary brings a claim that relates to benefits under this Plan, regardless of the basis of
the claim, 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 or Beneficiary must initiate and participate in any complaint resolution
procedure identified in the Company’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 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




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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 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 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.





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