Document:

exv10w2

Exhibit 10.2

SEPARATION AND MUTUAL RELEASE

AGREEMENT

     THIS AGREEMENT (“Agreement”) is made as of the 18th day of June, 2010,
by and between JOSEPH A. FERRARA (“Executive”) and TOLLGRADE COMMUNICATIONS, INC., a
Pennsylvania corporation (the “Corporation”) (Executive and the Corporation are referred
to sometimes hereinafter individually as “Party” and collectively as, the “Parties”).

W I T N E S S E T H:

     WHEREAS, Executive served as the Corporation’s Chief Executive Officer from
November 16, 2007 to the Date of Termination; and

     WHEREAS, pursuant to that certain Employment Agreement dated as of April 10, 2008,
as amended from time to time (the “Employment Agreement”), Executive was employed by the
Corporation as its Chief Executive Officer; and

     WHEREAS, the Executive’s employment with the Corporation terminated effective as of
June 8, 2010 (the “Date of Termination”); and

     WHEREAS, Executive served as a member of the Board of Directors of the Corporation
(the “Board” or “Board of Directors”) and as a director of certain of the Corporation’s
subsidiaries; and

     WHEREAS, the Executive has resigned as a director of the Corporation effective as
of the Date of Termination as required in the Employment Agreement; and

     WHEREAS, on and subject to the terms and conditions of this Agreement, Executive
and the Corporation desire to settle fully and finally all matters between them,
including, without limitation, any matters that relate to Executive’s employment, the
termination of that employment, or Executive’s association with the Corporation
generally, whether as an employee, director, officer, shareholder or otherwise.

     NOW, THEREFORE, in consideration of the premises and the covenants and agreements
set forth herein, the Parties hereto, intending to be legally bound, agree as follows:

	1.	 	Termination/Resignation. Executive acknowledges that his employment
with the Corporation has terminated and hereby resigns his position as an officer
and director of the Corporation and any and all positions he holds with the
Corporation, its subsidiary companies, or any of its other affiliates, effective as
of the Date of Termination. From and after the Date of Termination, Executive
shall not make any statements or engage in conduct which would lead any person or
entity to believe that he is an employee, officer, director, consultant, agent or
other authorized representative of the Corporation or any of its subsidiaries.
	 
	2.	 	Separation Pay, Employee Benefits, Corporation-Related Business
Expenses, Indemnity and D&O Coverage, and Other Obligations. The Corporation
shall pay to 

 

 

	 	 	Executive as separation pay the payments as may be required in the
Employment Agreement. The Corporation shall provide to or on behalf of Executive
all of the benefits and coverages as may be required pursuant to the Employment
Agreement. All the provisions of the Employment Agreement which specifically
survive termination of the Employment Agreement are incorporated into this
Agreement as though fully set forth herein.

	3.	 	Return of Corporation Property. Executive agrees that he will
promptly return to the Corporation all property belonging to the Corporation and
that he will otherwise comply with the Corporation’s normal employment termination
procedures. By way of example only, the Corporation’s property includes, but is
not limited to, items such as keys, vehicles, credit cards, cell phones, pagers,
computers, all originals and copies (regardless of the form or format on which such
originals and copies are maintained) of all Corporation specifications and pricing
information, all customer lists and other customer-related information, all
supplier lists and other supplier-related information, computer discs, tapes and
other documents which relate to the business of the Corporation and/or its
customers and/or its suppliers.
	 
	4.	 	Standstill Provision. Through the second anniversary of the Date of
Termination, Executive and his Representatives (as defined below) shall not,
directly or indirectly, without the prior written consent of the Board: (a)
acquire or offer or agree to acquire, directly or indirectly, by purchase or
otherwise, more than 5% of any outstanding class of voting securities or securities
convertible into voting securities of the Corporation, (b) propose to, or attempt
to induce any other individual or entity to, enter into, directly or indirectly,
any merger, consolidation, business combination, asset purchase (other than routine
purchases in the ordinary course of business of product offered for sale by the
Corporation) or other similar transaction involving the Corporation or any of its
affiliates, (c) make, or in any way participate in any solicitation of proxies to
vote, execute any consent as a Corporation shareholder, act to call a meeting of
the Corporation’s shareholders, make a proposal to be acted upon by the
Corporation’s shareholders or seek to advise or influence any person with respect
to the voting or not voting of any securities of the Corporation, (d) form, join or
in any way participate in a partnership, syndicate, joint venture or other “group”
(as defined under Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the “1934 Act”)), with respect to any voting securities of the Corporation
or transfer Executive’s voting rights with respect to any securities of the
Corporation (by voting trust or otherwise), (e) otherwise act, alone or in concert
with others, to seek to control or influence the management, Board or policies of
the Corporation or seek a position on the Board, (f) disclose any intention, plan
or arrangement inconsistent with the foregoing, or (g) advise, assist or encourage
any other persons in connection with any of the foregoing. If Executive has
initiated any of the foregoing activities prior to the date hereof, Executive shall
cease, terminate and otherwise refrain from conducting such activities and shall
take any and all necessary steps to effect the foregoing and any proposals made by
Executive as a shareholder of the Corporation on or before the date hereof, are
hereby withdrawn. As used herein, the term “Representative” shall include
Executive’s employees, agents, investment bankers,
advisors, affiliates and associates of any of the foregoing and persons under the
control of any of the foregoing (as the term “affiliate,” “associate” and
“control” are defined under 

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	 	 	the 1934 Act). Executive also agrees during such
period not to request the Corporation or its representatives, directly or
indirectly, to amend or waive any provision of this Section 5 (including this
sentence) to take any action which might require the Corporation to make a public
announcement regarding the possibility of a merger, consolidation, business
combination or other transaction of any kind with the Executive or any affiliate
of the Executive.

	5.	 	Mutual General Release and Covenant Not-to-Sue.

	 	(a)	 	By Executive.

	 	(i)	 	Except as is otherwise explicitly provided
herein, Executive, for himself, his agents, attorneys,
Representatives, affiliates, heirs and assigns and all persons
claiming by, through, for or under any of them or on any of their
behalf, hereby fully and forever releases and discharges the
Corporation, its subsidiaries and other affiliates, predecessors and
successors, their respective shareholders, officers, directors,
employees, heirs and assigns (individually, a “Releasee” and
collectively, “Releasees”), from any and all Claims which Executive
may have had, may now have, or may hereafter claim or assert against
the Releasees on account of any matter whatsoever, arising out of or
relating to (A) Executive’s employment or termination of employment
or other association with the Corporation, its subsidiaries or other
affiliates (as an employee, director, officer, shareholder or
otherwise) or (B) any other act, event, failure to act or thing which
has occurred or was created at any time on or before the date of
signing this Agreement. As used herein, “Claims” shall mean all
claims, counterclaims, cross-claims, actions, causes of action,
demands, obligations, debts, disputes, covenants, contracts,
agreements, rights, suits, rights of contribution and indemnity,
liens, expenses, assessments, penalties, charges, injuries, losses,
costs (including, without limitation, attorneys’ fees and costs of
suit), damages (including, without limitation, compensatory,
consequential, bad faith or punitive damages), and liabilities,
direct or indirect, of any and every kind, character, nature and
manner whatsoever, in law or in equity, civil or criminal,
administrative or judicial, in contract or in tort (including,
without limitation, bad faith and negligence of any kind) or
otherwise, whether now known or unknown, claimed or unclaimed,
asserted or unasserted, suspected or unsuspected, discovered or
undiscovered, accrued or unaccrued, anticipated or unanticipated,
fixed or contingent, liquidated or unliquidated, state or federal,
under common law, statute or regulation. Without limiting the
generality hereof, this release (and the defined term “Claims” as
used in this Agreement) covers Claims based upon torts (such as, for
example, negligence, fraud, defamation, wrongful discharge); express
and implied contracts (except this Agreement); federal, state or
local statutes and
ordinances; and every other source of legal rights and obligations
which may be validly waived or released.

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	 	(ii)	 	Executive covenants and represents that he has
not filed and will not in the future file or permit to be filed in
his name, or on his behalf, any lawsuit or other legal proceeding
asserting Claims which are within the scope of the release in Section
5(a)(i) against any of the Releasees. Further, Executive represents
and warrants that he has not suffered any on-the-job injury for which
he has not filed a claim.
	 
	 	(iii)	 	Nothing contained in this Section 5(a) shall be
deemed to waive any remedy available to Executive at law or in equity
in the event of a breach by the Corporation (or any of its
successors) of its or their obligations under this Agreement.
	 
	 	(iv)	 	Excluded from the release and covenant not to
sue set forth in Sections 5(a)(i) and 5(a)(ii), respectively, are any
Claims which cannot be waived by law and any rights that may arise
after the date of signing this Agreement (including matters arising
pursuant to this Agreement, any benefit policy, plan or program, and
the provisions of the Employment Agreement which specifically survive
termination of the Employment Agreement) and any claims against any
Releasee for fraud, deceit, theft or misrepresentation.
	 
	 	(v)	 	Executive acknowledges and agrees that it is his
intention that the release set forth in Section 5(a)(i) be effective
as a full and final release of each and every thing released herein.

	 	(b)	 	By the Corporation.

	 	(i)	 	Except as is otherwise expressly provided
herein, the Corporation, for itself, its subsidiaries and other
affiliates, agents, attorneys, representatives, officers, directors,
shareholders, predecessors, successors and assigns and all persons
claiming by, through, for or under any of them or on any of their
behalf, hereby fully and forever releases and discharges Executive,
his affiliates, heirs and assigns (individually, an “Executive
Releasee” and collectively, “Executive Releasees”), from any and all
Claims which the Corporation may have had, may now have, or may
hereafter claim or assert against the Executive Releasees, on account
of any matter whatsoever, arising out of or relating to (A)
Executive’s employment or termination of employment, service as an
officer, director of or fiduciary acting on behalf of the
Corporation, or any other association with the Corporation, its
subsidiaries or any of its other affiliates (whether as an employee,
officer, director, shareholder or otherwise), or (B) any other act,
event, failure to act or thing which has occurred or was created at
any time on or before the date of signing this Agreement.
	 
	 	(ii)	 	The Corporation covenants and represents that it
has not filed and will not in the future file or permit to be filed
in its name, or on its behalf, any 

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	 	 	 	lawsuit or other legal proceeding
asserting Claims which are within the scope of this release against
any of the Executive Releasees.

	 	(iii)	 	Excluded from the release and covenant not to
sue set forth in Sections 5(b)(i) and 5(b)(ii), respectively, are any
Claims which cannot be waived by law, any rights that may arise after
the date of signing this Agreement (including matters arising
pursuant to this Agreement) and any Claims against any Executive
Releasee for fraud, deceit, theft or misrepresentation.
	 
	 	(iv)	 	The Corporation acknowledges and agrees that it
is its intention that the release set forth in Section 5(b)(i) be
effective as a full and final release of each and every thing
released herein.

	6.	 	Corporation’s Information; Nondisclosure; Related Matters.
Executive covenants and agrees to be bound by the provisions of Section 5 of the
Employment Agreement.
	 
	7.	 	Executive’s Noncompetition. Executive covenants and agrees to be
bound by the provisions of Section 6 of the Employment Agreement.
	 
	8.	 	Non-Admission of Liability. It is acknowledged and agreed that
nothing contained herein, including but not limited to the consideration paid
hereunder, constitutes or will be construed as an admission of liability or of any
wrongdoing or violation of law on the part of either Party hereto.
	 
	9.	 	Non-Disparagement.

	 	(a)	 	Executive agrees that he will not, at any time, make any
disparaging statements about the Corporation or any Releasee to any current,
former or prospective employer, any applicant referral source, any current,
former or prospective employee of the Corporation, any current, former or
prospective customer or supplier of the Corporation, the media, or to any
other person or entity.
	 
	 	(b)	 	The Corporation agrees that none of the members of the Board
or the Executive Council of the Corporation as constituted on the date
hereof, at no time, will make any disparaging statements about Executive to
any former or prospective employer of Executive, the media, or to any other
person or entity. The Corporation will instruct its employees not to make
any disparaging statements about Executive.
	 
	 	(c)	 	As used in this Section 9, the term “disparaging statement”
means any communication, oral or written, which would cause or tend to cause
the recipient of the communication to question the integrity, competence, or
good character of the person or entity to whom the communication relates.

	10.	 	Remedies for Breach. Each Party will be entitled to pursue any
remedy available at law or in equity for any breach of this Agreement by the other
Party. Each Party acknowledges that remedies at law may be inadequate to protect
against its breach of this 

5

 

	 	 	Agreement and hereby in advance agrees, without
prejudice to any rights to judicial relief the other Party may otherwise have, to
the granting of equitable relief, including injunctive relief, in the other Party’s
favor without proof of actual damages.

	11.	 	Representations/Warranties by Executive. Executive represents and
warrants to the Corporation that the following statements are true and correct:

	 	(a)	 	Executive is signing this Agreement voluntarily and is legally
competent to do so.
	 
	 	(b)	 	Executive has been advised to consult, and has in fact
consulted, an attorney of his own choice before signing this Agreement.
	 
	 	(c)	 	Executive has read and fully understands each of the
provisions of this Agreement, he has been given sufficient and reasonable
time to consider each of them and fully understands his rights under all
applicable laws and the ramifications and consequences of his execution of
this Agreement.
	 
	 	(d)	 	No promises, agreements or representations have been made to
Executive to induce him to sign this Agreement, except those that are
written in this Agreement.
	 
	 	(e)	 	Executive has not, in whole or in part, sold, assigned,
transferred, conveyed or otherwise disposed of any of the Claims covered by
the release set forth in Section 5(a) (the “Executive’s Release”).
	 
	 	(f)	 	The consideration received by Executive for the Executive’s
Release constitutes lawful and adequate consideration.
	 
	 	(g)	 	Executive has not engaged in any of the activities listed in
subsections (a)-(g) of Section 4 hereof.
	 
	 	(h)	 	Executive waives any notice requirements under the
Corporation’s by-laws with respect to any of the Board’s meetings to
consider the approval of the terms and conditions of this Agreement.

	12.	 	Representations/Warranties by the Corporation. The Corporation
represents and warrants to Executive that the following statements are true and
correct:

	 	(a)	 	This Agreement has been duly authorized and executed by the
Corporation.
	 
	 	(b)	 	The Corporation has not, in whole or in part, sold, assigned,
transferred, conveyed or otherwise disposed of any of the Claims covered by
the release set forth in Section 5(b) (the “Corporation’s Release”).
	 
	 	(c)	 	The consideration received by the Corporation for the
Corporation’s Release constitutes lawful and adequate consideration.

	13.	 	Waiver of Rights. If on one or more instances either Party fails to
insist that the other Party perform any of the terms of this Agreement, such
failure shall not be construed as a 

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	 	 	waiver by such Party of any past, present, or
future right granted under this Agreement; and the obligations of both Parties
under this Agreement shall continue in full force and effect.

	14.	 	Severability/Applicability. If any provision, section or subsection
of this Agreement is adjudged by any court to be void or unenforceable in whole or
in part, this adjudication shall not affect the validity of the remainder of this
Agreement, including any other provision, section or subsection. Each provision,
section and subsection of this Agreement is separable from every other provision,
section and subsection, and constitutes a separate and distinct covenant.
	 
	15.	 	Successors & Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the Parties and their respective successors, assigns,
executors, administrators and personal representatives.
	 
	16.	 	Notices. All notices, requests, demands, claims and other
communications under this Agreement shall be in writing. Any notice, request,
demand, claim or other communication hereunder shall be deemed duly given the next
business day (or when received if sooner) if it is sent by (a) confirmed facsimile
or (b) overnight delivery and addressed, to the respective address of such Party
specified below its or his signature below. Either Party may send any notice,
request, demand, claim or other communication hereunder to the intended recipient
at the address set forth below using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, registered or
certified mail, return receipt requested, postage prepaid, or electronic mail), but
no such notice, request, demand, claim or other communication shall be deemed to
have been duly given unless and until it is actually received by the intended
recipient. Either Party may change the address to which notices, requests,
demands, claims and other communications hereunder are to be delivered by giving
the other Party notice in the manner provided in this Agreement. Each Party
irrevocably consents to service of process in connection with disputes arising out
of this Agreement or otherwise in the manner provided for notices in this Section
16. Nothing in this Agreement will affect the right of any Party to service
process in any other manner permitted by law.
	 
	17.	 	Public Announcement of Termination/Resignation. The Parties agree
that the Corporation will file with the Securities and Exchange Commission (the
“SEC”) a report on Form 8-K and the Corporation will issue a press release each of
which will disclose Executive’s resignation as a Director and termination as an
executive officer of the Corporation. Executive acknowledges and agrees that he
has received and reviewed those provisions of the press release that will be issued
that relate to the termination of employment and resignation from the Board, agrees
fully with the statements made by the Corporation therein with respect thereto, and
has not provided and will not provide to the Corporation any written correspondence
concerning the circumstances surrounding his termination or employment of
resignation as a Director. Executive acknowledges and agrees that his resignation
as a Director did not involve any disagreement with the
Corporation on any matter relating to the Corporation’s operations, policies or
practices within the meaning contemplated by Form 8-K.

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	18.	 	Sub-certification of 2010 Annual Report. In connection with the
preparation of the Corporation’s Annual Report on Form 10-K for the fiscal year
ending December 31, 2010 (the “Annual Report”) and prior to the filing by the
Corporation of such Annual Report with the SEC, Executive shall provide to the
Corporation promptly following the Corporation’s request (and in no event more than
seven business days after such request) a duly executed original of the Certificate
attached hereto as Exhibit A (the “Sub-certification Certificate”). The
Corporation shall provide to Executive a copy of the Annual Report and the
Corporation’s Proxy Statement on Schedule 14A at the time of requesting such
Certificate. If the Corporation requests that Executive provide the
Sub-certification Certificate and Executive provides the same to the Corporation
within the foregoing time frame, the Corporation shall indemnify, defend and hold
harmless Executive, to the fullest extent provided under applicable law, against
any losses, claims, damages, liabilities, action, suit, proceeding, cost or expense
(including reasonable attorney’s fees) (collectively, “Liabilities”) arising out of
or pertaining to any action against Executive for any material misstatement or
omission in the Annual Report; provided, however, notwithstanding the foregoing
provisions of this sentence, the Corporation shall have no obligation to indemnify,
defend or hold harmless Executive for Liabilities arising out of or pertaining to
any material misstatement or omission in the Annual Report which is actually known
to Executive (without duty of investigation) and not disclosed by him to the
Corporation at the time of his delivery to the Corporation of the Sub-certification
Certificate.
	 
	19.	 	Entire Agreement. This Agreement supersedes and replaces all prior
and contemporaneous written or oral agreements relating to Executive’s employment,
compensation and employment termination, including the Employment Agreement (other
than the post-termination provisions which survive the termination of the
Employment Agreement as provided therein), but not including any and all stock
option agreements between Executive and the Corporation and any employee benefit
plans or programs.
	 
	20.	 	Interpretation; Enforcement. This Agreement will be interpreted and
enforced according to the laws of the Commonwealth of Pennsylvania, without regard
to its conflicts of laws provision. The parties hereto further agree that any
action to enforce any right or obligation under this Agreement shall be subject to
the exclusive jurisdiction of the courts of the Commonwealth of Pennsylvania. Each
Party hereby consents to personal jurisdiction in any action brought in any court,
federal or state, within the Commonwealth of Pennsylvania having subject matter
jurisdiction in this matter. Each Party hereby irrevocably waives any objection,
including, without limitation, any objection to the laying of venue or based on the
grounds of forum non conveniens, which it may now or hereafter have to the bringing
of any such action or proceeding in such jurisdiction.
	 
	21.	 	Amendment. No provision of this Agreement may be modified, amended
or revoked, except in a writing signed by Executive and an authorized official of
the Corporation.
	 
	22.	 	Acknowledgment of Waiver of Claims Under ADEA. Executive
acknowledges that he is waiving and releasing any rights he may have under the Age
Discrimination in Employment Act of 1967 (“ADEA”) and that this waiver and release
is knowing and 

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	 	 	voluntary. Executive and the Corporation agree that this waiver and
release does not apply to any rights that or claims that might arise under the ADEA
after the date of this Agreement. Executive acknowledges that the consideration
given for this waiver and release agreement is in addition to anything of value to
which Executive was already entitled. Executive further acknowledges that he has
been advised by this writing that (a) he has at least twenty-one (21) days within
which to consider this Agreement, (b) he has seven days following the execution of
this Agreement by the Parties to revoke the Agreement and (c) this Agreement shall
not be effective until the revocation period has expired. Any revocation should be
in writing and delivered to the Corporation by the close of business on the seventh
day from the date that Executive signs this Agreement.

[Intentionally Left Blank]

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.

WITNESS:

	 	 	 	 	 	 
	 	 	 
	 	 	/s/ Joseph A. Ferrara
 	 
	 	 	Joseph A. Ferrara 	 
	 
	 	Address: 	 	 
	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	 	 
	 	TOLLGRADE COMMUNICATIONS, INC.

 	 
	 	By:  	/s/ Jennifer M. Reinke
 	 
	 	 	Name:  	Jennifer M. Reinke 	 
	 	 	Title:  	General Counsel and Secretary
	 
	 	 	Address:  	493 Nixon Road

Cheswick, PA  15024 	 
	 

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Exhibit A

CERTIFICATE

The undersigned hereby certifies as follows:

	1.	 	I understand that this certificate will be relied upon by the Chief
Executive Officer and Chief Financial Officer of Tollgrade Communications, Inc.
(the “Corporation”) in making the certifications required of them in the
Corporation’s annual report for its 2010 fiscal year on Form 10-K (the “Annual
Report”).
	 
	2.	 	I have reviewed the Annual Report (as distributed on                     , 20___). I did
not participate in the preparation of the Annual Report.
	 
	3.	 	Based on my actual knowledge (without duty of investigation) gained during
my employment by the Corporation, except as set forth in the Schedule attached
hereto, nothing has come to my attention that causes me to believe that the Annual
Report contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading.
	 
	4.	 	Based on my actual knowledge (without duty of investigation) gained during
my employment by the Corporation, except as set forth in the Schedule attached
hereto, nothing has come to my attention that causes me to believe that the
financial statements and other financial information included in the Annual Report,
do not fairly present in all material respects the financial conditions, results of
operations and cash flows of the corporation as of, and for, the year ended
December 31, 2010.
	 
	5.	 	Based on my actual knowledge (without duty of investigation) gained during
my employment by the Corporation, except as set forth in the Schedule attached
hereto, nothing has come to my attention that causes me to believe that there is
any material weakness or significant deficiency in the design or operation of the
Corporation’s disclosure controls and procedures or the Corporation’s internal
controls over financial reporting as they existed and were utilized as of the last
day of my employment by the Corporation, which could adversely affect the
Corporation’s ability to timely and accurately report the financial and other
information required to be disclosed by the Corporation in its periodic reports
required to be filed pursuant to the Securities Exchange Act of 1934, as amended.

Date:                     , 20___

	 	 	 	 	 
	 	Joseph A. Ferraraexv10wy

Exhibit 10.Y

JOHNSON CONTROLS, INC.

EXECUTIVE EMPLOYMENT AGREEMENT

     In consideration of the employment of the undersigned employee (“Executive”) by Johnson
Controls, Inc., or its affiliated companies (“Company”), it is agreed between Executive and Company
as follows in lieu of any other agreements or commitments relating to such employment, whether
written or oral and whether past or present, unless expressly included or incorporated herein:

     1. DUTIES. The Company agrees to employ Executive as a manager with duties and
responsibilities which the Company acting either through its Board of Directors or its Chief
Executive Officer, its sole discretion believes are appropriate to Executive’s skills, training and
experience. Executive agrees to perform such assigned duties by devoting full time, due care,
loyalty and best efforts thereto and complying with all applicable laws and the requirements of the
Company’s policies and procedures on employee conduct, including but not limited to the Ethics and
no-harassment policies.

     2. TERM. This Agreement will be for an initial period of one year, and will
thereafter automatically renew for successive one-year periods unless terminated as provided in
Section 4, replaced or amended as provided in Section 5, or superceded as provided in Section 6.

     3. COMPENSATION. Executive shall be paid or be eligible for the base salary, bonuses,
and benefits set forth in Exhibit A, subject to the terms and conditions set forth in this Section,
Exhibit A and in Section 4. The salary, benefits, and bonuses will be reviewed and adjusted
periodically in accordance with the Company’s policies then in existence. Those policies and any
benefit and bonus programs may be amended from time to time at the Company’s discretion.

     4. TERMINATION. Executive’s employment with the Company may be terminated as follows,
and Executive’s sole right to receive compensation, benefits, or bonuses after the termination
shall be exclusively as set forth below. At the time of any such termination, upon request of the
Company, such Executive agrees to resign in writing from all positions and board memberships of the
Company and its subsidiaries and affiliates.

     (a) DEATH. If Executive dies during the term of this Agreement, this Agreement shall
terminate and the Company shall be obligated to pay a lump sum payment equal to six (6) months of
Executive’s monthly base salary to the beneficiaries set out in Exhibit A, or to his estate if no
beneficiaries have been designated, no later than thirty (30) days after the date of the
Executive’s death. However, all benefit plans or bonuses in effect upon Executive’s death shall
operate in accordance with their terms covering death of the Executive or terminate immediately if
silent.

     (b) DISABILITY. If Executive becomes disabled during the term of this Agreement, the
Company may terminate Executive’s employment and this Agreement, and Executive’s sole remedy shall
be to the Company’s Short and Long Term Disability Policies in effect at that time and Executive’s
“disability” shall be determined in accordance with such plan provisions. All other bonuses and
benefits in effect at that time shall operate in accordance with their provisions relating to
disability or terminate if there is no such provision.

 

 

     (c) BY EMPLOYEE. Executive may terminate his or her employment and this Agreement at
any time for any reason, including resignation or retirement. All compensation, bonuses, or
benefits in effect at that time shall cease as of the date of termination, unless specifically
provided otherwise with respect to voluntary terminations in the applicable bonus or benefit
policies. Without limiting the Company’s discretion generally, the Company specifically reserves
the right to grant or not grant stock options, restricted stock, bonuses or other awards to an
employee who has voluntarily terminated employment or announced his intention to do so.

     (d) FOR CAUSE. The Company may terminate Executive for theft, dishonesty, fraudulent
misconduct, violation of Section 7 or 8 of this Agreement, gross dereliction of duty, grave
misconduct injurious to the Company or serious violation of the law or the Company’s policies and
procedures on employee conduct. In the event the Company terminates Executive for cause hereunder,
the Executive shall not be due any compensation, bonuses or benefits after the Termination Date
unless earned in full prior to such date in accordance with the applicable provisions of the plan
or plans. The Company, if allowed by law, may set off losses, fines or damages the Executive has
caused it as a result of such misconduct.

     (e) WITHOUT CAUSE. The Company, acting through its Board of Directors or through its
Chief Executive Officer, may terminate Executive for any reason other than as set out in Sec. 4. a.
- d. In such an event, Executive shall receive a severance allowance under the Company’s severance
policy in effect at that time provided Executive signs a full release in form and substance
acceptable to the Company; however, in no event shall such benefits be less than Executive’s base
salary for one (1) year or twice the severance payments provided under the then current severance
policy, whichever is greater. The severance payment shall be paid in a single sum as soon as
practicable, but in no event more than ten (10) business days, following the date of Executive’s
separation from service. Executive shall also receive any bonus or benefits in effect at that time
under plan provisions for terminations without cause or none if such plans are silent. For
purposes hereof, whether Executive has separated from service will be determined pursuant to the
provisions of Section 409A of the Internal Revenue Code of 1986, as amended, which will generally
occur when the Executive terminates employment from the Company and its affiliates (within the
meaning of Section 414(b) and (c) of the Internal Revenue Code of 1986, as amended, provided that
the phrase “at least 50 percent” shall be used in place of “at least 80 percent” each place it
appears in the regulations thereunder). Executive will be presumed to have terminated employment
when the level of bona fide services provided by Executive to the Company and its affiliates
permanently decreases to a level of twenty percent (20%) or less of the level of services rendered
by Executive, on average, during the immediately preceding 36 months (or such lesser period of
service); provided that if Executive takes a leave of absence from the Company or an affiliate for
purposes of military leave, sick leave or other bona fide leave of absence. Executive will not be
deemed to have a separation from service for the first six (6) months of the leave of absence, or
if longer, for so long as Executive’s right to reemployment is provided either by statute or by
contract; provided that if the leave of absence is due to Executive’s medically determinable
physical or mental impairment that can be expected to result in death or can be expected to last
for a continuous period of six (6) months or more, and such impairment causes Executive to be
unable to perform the duties of his position with the Company or an affiliate or a substantially
similar position of employment, then the leave period may be extended for up to a total of
twenty-nine (29) months without causing a separation from service.

2

 

     5. AMENDMENT. The Company may at any time in its discretion amend, modify or replace
this Agreement; however, such changes shall not reduce the benefits provided Executive for
termination without cause under Sec. 4.e.

     6. CHANGE OF CONTROL. In the event there is a “change of control” in the Company, as
such term is defined in the Agreement attached as Exhibit B, then the Agreement set forth in
Exhibit B shall supersede and replace this Agreement in all respects.

     7. NONCOMPETITION. (a) Executive agrees that for a period of one year after the
termination of active employment hereunder, he shall not, except as permitted by the Company’s
prior written consent, in any capacity in which Confidential

Information or Trade Secrets of the Company would reasonably be regarded as useful, engage in, be
employed by, or in any way advise or act for any business which is a competitor of the Company with
respect to the products or services provided by any division or group within the Company to which
Executive devoted substantial attention in the year preceding termination of employment with the
Company, and within the national and international geographic markets served by any such division
or group. This restriction shall also apply to any ownership or other financial interest in such a
competitor except the ownership of less than five percent of the shares of any corporation whose
shares are listed on a recognized stock exchange or trade in an over-the-counter market. Depending
on the scope of Executive’s responsibilities in the year preceding termination of employment with
the Company, this covenant could potentially apply to a geographic area coextensive with the
Company’s operations, including but not limited to all of North America and the European Economic
Community. This covenant shall survive the termination of this Agreement.

     (b) REMEDIES. The Executive acknowledges and agrees that the terms of Section 7 and
8: (i) are reasonable in geographic and temporal scope, (ii) are necessary to protect legitimate
proprietary and business interests of the Company in, inter alia, near permanent customer
relationships and confidential information. The Executive further acknowledges and agrees that (x)
the Executive’s breach of the provisions of Section 7 will cause the Company irreparable harm,
which cannot be adequately compensated by money damages, and (y) if the Company elects to prevent
the Executive from breaching such provisions by obtaining an injunction against the Executive,
there is a reasonable probability of the Company’s eventual success on the merits. The Executive
consents and agrees that if the Executive commits any such breach or threatens to commit any
breach, the Company shall be entitled to temporary and permanent injunctive relief from a court of
competent jurisdiction, in addition to, and not in lieu of, such other remedies as may be available
to the Company for such breach, including the recovery of money damages. The Parties further
acknowledge and agree that the provisions of Section 10(d) below are accurate and necessary because
(A) this Agreement is entered into in the State of Wisconsin, (B) as of the Effective Date,
Wisconsin will have a substantial relationship to the Parties and to this transaction, (C) as of
the date of this Agreement, Wisconsin is the headquarters state of the Company, which has
operations globally and has a compelling interest in having its employees treated uniformly, (D)
the use of Wisconsin law provides certainty to the Parties in any covenant litigation in the United
States, and (E) enforcement of the provision of this Section 7 would not violate any fundamental
public policy of Wisconsin or any other jurisdiction. If any of the provisions of Sections 7 or 8
are determined to be wholly or partially unenforceable, the Executive hereby agrees that this
Agreement or any provision hereof may be reformed so that it is enforceable to the maximum extent

3

 

permitted by law. If any of the provisions of Sections 7 or 8 are determined to be wholly or
partially unenforceable in any jurisdiction, such determination shall not be a bar to or in any way
diminish the Company’s right to enforce any such covenant in any other jurisdiction.

     8. CONFIDENTIAL INFORMATION. (a) The Executive shall hold in a fiduciary capacity for
the benefit of the Company all secret or confidential information, knowledge or data relating to
the Company or any of its affiliated companies, and their respective businesses, which shall have
been obtained by the Executive during the Executive’s employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement). During employment
and for two years after termination of the Executive’s employment with the Company, the Executive,
except as may otherwise be required by law or legal process, shall not use any such information
except on behalf of the Company and shall not communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it. This covenant shall
survive the termination of this Agreement. Nothing in this paragraph is intended or shall be
construed to limit in any way Executive’s independent duty not to misappropriate Trade Secrets of
the Company.

     (b) “Trade Secret” means information of the Company, including a formula, pattern,
compilation, program, device, method, technique or process, that derives independent economic
value, actual or potential, from not being generally known to, and not being readily ascertainable
by proper means by, other persons who can obtain economic value from its disclosure or use, and
that is the subject of efforts by the Company to maintain its secrecy that are reasonable under the
circumstances. During employment with the Company, Executive shall preserve and protect Trade
Secrets of the Company from unauthorized use or disclosure, and after termination of such
employment, Executive shall not use or disclose any Trade Secret of the Company until such time as
that Trade Secret is no longer a secret as a result of circumstances other than a misappropriation
involving the Executive.

     9. MANDATORY ARBITRATION. As a condition of his employment with the Company, and in
consideration for that employment, Executive agrees that if he has any legal disputes with the
Company or its supervisors, managers, directors, or agents concerning his employment or termination
of employment, those disputes will be brought and resolved exclusively through binding arbitration.
For example, any claims by the Executive that he has been demoted, denied promotion, or discharged
because of age discrimination, race discrimination, or unlawful retaliation will be resolved
through binding arbitration. Arbitrations involving employment issues under this provision will be
conducted pursuant to the terms and conditions of the Company’s Employment Dispute Resolution
Program (copy attached), except that use of arbitration under the Program to resolve employment
disputes will be mandatory rather than voluntary. Arbitrations under this agreement will be
conducted pursuant to the procedural rules established for resolving employment disputes by the
American Arbitration Association (copy available). By signing this Agreement, Executive releases
and waives any right he has to resolve employment disputes (including claims of unlawful discharge)
through filing a lawsuit in court, and agrees instead that the disputes will be resolved
exclusively though binding arbitration. Because Executive is giving up the legal right to file a
lawsuit against the Company or its supervisors, managers, directors, or agents involving any and
all legal disputes arising from his employment or termination of employment, the Company encourages
him to consult with an attorney prior to signing this Agreement.

4

 

Executive understands that he has twenty-one days to consider whether to sign this agreement.
If he signs it, for a period of seven days following the signing he may revoke the agreement. In
order to make the revocation effective, he must deliver a signed revocation to the Company within
the seven-day revocation period. Notwithstanding the foregoing, Executive agrees that the Company
may seek enforcement of Sections 7 and 8 of this Agreement by filing an action in a court of
competent jurisdiction seeking temporary, preliminary and permanent injunctive relief and such
other relief as may be necessary to protect the Company from threatened, imminent, or existing
irreparable harm.

     10. MISCELLANEOUS. (a) This Agreement is personal to the Executive and without the
prior written consent of the Company shall not be assignable by the Executive otherwise than by
will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s legal representatives.

     (b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns. Executive hereby grants the Company unlimited authority to assign its
rights under this Agreement and consents to any and all such assignments.

     (c) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially of the business and/or assets of the Company to
assume expressly and agree to perform this Agreement in the same manner and at the same extent that
the Company would be required to perform it if no such succession had taken place. As used in this
Agreement, “Company” shall mean the Company as hereinbefore defined and any successor its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law,
or otherwise.

     (d) This Agreement shall be governed by and construed in accordance with the laws of the State
of Wisconsin, without reference to principles of conflict of laws. The captions of this Agreement
are not part of the provisions hereof and shall have no force or effect.

     (e) All notices and other communications hereunder shall be in writing and shall be given by
hand delivery to the other party or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:

If to the Executive:

To the address appearing immediately below Executive’s signature.

If to the Company:

Johnson Controls, Inc.

5757 North Green Bay Avenue

Milwaukee, WI 53209

Attention: General Counsel

5

 

or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective when actually received by the addressee.

     (f) The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.

     (g) The Company may withhold from any amounts payable under this Agreement such Federal, state
or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the
authorization from its Board of Directors, Johnson Controls, Inc. has caused these presents to be
executed in its name on its behalf, all as of the day and year written below.

	 	 	 	 	 
	 	  	 
	 	Executive: 	 
	 
	 	Address:

JOHNSON CONTROLS, INC.

 	 
	 	By:  	 	 
	 	 	Stephen A. Roell, Chairman & CEO 	 
	 
	 	Date:  	
 	 
	 

6

 

JOHNSON CONTROLS, INC.

EXECUTIVE EMPLOYMENT AGREEMENT

EXHIBIT A

	 	 	 

	Executive:
	 	 
	 
	 	 
	Base Salary:

	 	$ 
	 
	 	 
	Benefits:

	 	Executive is eligible to participate in the
following benefits provided by Johnson Controls,
Inc., in addition to those benefits provided all
salaried employees. However, Executive is not
assured an award under any such benefit in any
year. Each award will be granted each year in
accordance with the terms of the benefit plan.
	 
	 	 
	 

	 	Annual Incentive Performance Plan
	 
	 	 
	 

	 	Long Term Incentive Performance Plan
	 
	 	 
	 

	 	Stock Option Plan
	 
	 	 
	 

	 	Executive Deferred Compensation Plan
	 
	 	 
	 

	 	Restricted Stock Plan
	 
	 	 
	 

	 	Retirement Restoration Plan
	 
	 	 
	 

	 	Executive Survivor Benefits Plan
	 
	 	 
	 

	 	Flexible Perquisites Program
	 
	 	 
	Participation:

	 	Participant is subject to the applicable terms of
the plan. In addition to any vesting and/or
forfeiture provision that may apply under the
applicable plan, the Company reserves the right, at
its discretion, to revoke or forfeit some or all of
the stock options, restricted stock or other stock
based awards with respect to a fiscal year, and/or
to pay all, some, or no bonuses with respect to a
fiscal year if the Executive voluntarily resigns
his/her employment or is discharged for cause prior
to the end of the applicable fiscal year. In all
other instances, the terms of the respective plans
shall apply.
	 
	 	 
	Beneficiaries:

	 	The following beneficiaries will receive death
benefits provided under the above benefits unless
beneficiaries have been designated under a specific
Benefit plan by the Executive. If more than one
beneficiary is listed, each beneficiary, if living
at the time of payment, will share equally, unless
an unequal allocation has been expressly indicated.

	 	 	 	 	 	 	 	 	 	 	 

	 

	 	Name:
	 	 	 	Relationship	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	Relationship	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	Relationship	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	 

	 	Relationship
	 	 

	 	 
	 

	 	 	 	 
	 	 	 	 	 	 

7

 

EXHIBIT B

JOHNSON CONTROLS, INC.

CHANGE OF CONTROL

EXECUTIVE EMPLOYMENT AGREEMENT

     AGREEMENT by and between Johnson Controls, Inc. a Wisconsin corporation (the “Company”) and
Executive Name (the “Executive”), dated
                                        
.

     The Board of Directors of the Company (the “Board”) has determined that it is in the best
interests of the Company and its shareholders to assure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change of
Control (as defined below) of the Company. The Board believes it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal uncertainties and risks created
by a pending or threatened Change of Control and to encourage the Executive’s full attention and
dedication to the Company currently and in the event of any threatened or pending Change of
Control, and to provide the Executive with compensation and benefits arrangements upon a Change of
Control which ensure that the compensation and benefits expectations of the Executive will be
satisfied and which are competitive with those of other corporations. Therefore, in order to
accomplish these objectives, the Board has caused the Company to enter into this Agreement.

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     11. Certain Definitions.

     (a) i. The “Effective Date” shall mean the first date during the Change of Control Period (as
defined in Section 1(b)) on which a Change of Control (as defined in Section 2) occurs. (ii)
Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and if
the Executive’s employment with the Company is terminated or the Executive ceases to be an officer
of the Company prior to the date on which the Change of Control occurs, and if it is reasonably
demonstrated by the Executive that such termination of employment or cessation of status as an
officer (A) was at the request of a third party who has taken steps reasonably calculated to effect
the Change of Control or (B) otherwise arose in connection with or anticipation of the Change of
Control, then for all purposes of this Agreement the “Effective Date” shall mean the date
immediately prior to the date of such termination of employment or cessation of status as an
officer.

     (b) The “Change of Control Period” shall mean the period commencing on the date hereof and
ending on the second anniversary of such date; provided, however, that commencing on the date one
year after the date hereof, and on each annual anniversary of such date (such date and each annual
anniversary thereof shall be hereinafter referred to as the “Renewal Date”), the Change of Control
Period shall be automatically extended so as to terminate two years from such Renewal Date, unless
at least 60 days prior to the Renewal Date the Company shall give notice to the Executive that the
Change of Control Period shall not be so extended.

8

 

     (c) A “Change of Control” shall mean the first to occur of the following events:

     i. The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”)
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
35% or more of either (A) the then-outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (B) the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that the following acquisitions shall not
constitute a Change of Control: (I) any acquisition directly from the Company, (II) any
acquisition by the Company, (III) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Affiliated Company, or (IV) any acquisition by any
corporation pursuant to a transaction that complies with Sections 1(c)(iii)(A), 1(c)(iii)(B) and
1(c)(iii)(C);

     ii. Any time at which individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof 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 occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the Board;

     iii. Consummation of a reorganization, merger, statutory share exchange or consolidation or
similar corporate transaction involving the Company or any of its subsidiaries, a sale or other
disposition of all or substantially all of the assets of the Company, or the acquisition of assets
or stock of another entity by the Company or any of its subsidiaries (each, a “Business
Combination”), in each case unless, following such Business Combination, (A) all or substantially
all of the individuals and entities that were the beneficial owners of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of 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 (including, without limitation, a corporation that, as a result of such
transaction, owns the Company or all or substantially all of the Company’s assets either directly
or through one or more subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or related trust) of the
Company or an Affiliated Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 35% or more of, respectively, the then-outstanding
shares of common stock of the corporation resulting from such Business Combination or the combined
voting power of the then-outstanding voting securities of such corporation, except to the extent
that such ownership existed prior to the Business Combination, and (C) at least a majority of the
members of the board of directors of the corporation resulting from such Business

9

 

Combination were members of the Incumbent Board at the time of the execution of the initial
agreement or of the action of the Board providing for such Business Combination; or

     iv. Approval by the shareholders of the Company of a complete liquidation or dissolution of
the Company.

     (d) As used in this Agreement, the term “Affiliated Company” or “Affiliated Companies” shall
include any company or companies controlled by, controlling or under common control with the
Company; provided that when determining when the Executive has experienced a Separation from
Service for purposes of this Agreement, control shall be determined pursuant to Code Section 414(b)
or 414(c), except that the phrase “at least 50 percent” shall be used in place of the phrase “at
least 80 percent” in each place it appears in the regulations thereunder.

     (e) “Code” shall mean the Internal Revenue Code of 1986, as amended. Any reference to a
specific provision of the Code shall be deemed to include any successor provision thereto.

     (f) “Separation from Service” shall mean the Executive’s Termination of Employment, except
that if the Executive continues to provide services following his or her Termination of Employment,
such later date as is considered a separation from service, within the meaning of Code Section
409A, from the Company and its Affiliated Companies. Specifically, if the Executive continues to
provide services to the Company or an Affiliated Company in a capacity other than as an employee,
such shift in status is not automatically a Separation from Service.

     (g) For purposes of this Agreement, the Executive will be considered a “Specified Employee”
if, on the date of the Executive’s Separation from Service, the Executive is a key employee of the
Company or an affiliate of the Company (within the meaning of Code Section 414(b) or (c)) any of
the stock of which is publicly traded on an established securities market or otherwise. The
Executive is considered a key employee for the 12-month period beginning on the first day of the
fourth month following the key employee identification date, which is December 31 of each year,
such that if the Executive satisfies the requirements for key employee status as of December 31 of
a year, the Executive shall be treated as a key employee for the 12-month period beginning April 1
of the following calendar year. The Executive will meet the requirements for key employee status
as of December 31 of a year if the Executive meets the requirements of Code Section
416(i)(1)(A)(i), (ii) or (iii), applied in accordance with the regulations under Code Section 416,
but disregarding Code Section 416(i)(5), at any time during the 12-month period ending on such
December 31. For purposes of determining whether the Executive is a key employee, the definition
of compensation under Treasury Regulation § 1.415-2(a) shall be used, applied as if the Company and
its affiliates were not using any safe harbor under Treasury Regulation § 1.415-2(d), any of the
special timing rules of Treasury Regulation § 1.415-2(e) or any of the special rules provided in
Treasury Regulation § 1.415-2(g).

     In lieu of the foregoing, if, in the transaction constituting a Change of Control, the Company
is merged with or acquired by another entity, and immediately following the Change of Control the
stock of either the Company or the acquirer or successor in such transaction is publicly traded on
an established securities market or otherwise, then the Executive shall be considered a key
employee for the period between the effective date of such transaction and the next specified
employee effective date of the acquirer or

10

 

survivor if the Executive is on the combined list of the specified employees of each entity
participating in the transaction, as re-ordered to identify the top 50 key employees (as well as 1%
and 5% owners that are considered key employees) in accordance with Treasury Regulations
§1.409A-1(i)(6)(i).

     (h) For purposes of this Agreement, the Executive’s “Termination of Employment” (or variations
thereof, such as “Terminates Employment” or “Employment Termination”) shall occur when the
Executive permanently ceases to perform services for the Company and its Affiliated Companies as an
employee or when the level of bona fide services the Executive performs as an employee of the
Company and its Affiliated Companies permanently decreases to no more than twenty percent (20%) of
the average level of bona fide services performed by the Executive (whether as an employee or
independent contractor) for the Company and its Affiliated Companies over the immediately preceding
thirty-six (36)-month period (or such lesser period of services). Notwithstanding the foregoing,
if the Executive takes a leave of absence for purposes of military leave, sick leave or other bona
fide reason, the Executive will not be deemed to have experienced a Termination of Employment for
the first six (6) months of the leave of absence, or if longer, for so long as the Executive’s
right to reemployment is provided either by statute or by contract, including this Agreement;
provided that if the leave of absence is due to a medically determinable physical
or mental impairment that can be expected to result in death or last for a continuous period of not
less than six (6) months, where such impairment causes the Executive to be unable to perform the
duties of his or her position of employment or any substantially similar position of employment,
the leave may be extended by the Company for up to twenty-nine (29) months without causing a
Termination of Employment.

     12. Employment Period. The Company hereby agrees to continue the Executive in its employ for the
period commencing on the Effective Date and ending on the second anniversary of such date (the
“Employment Period”), subject to the provisions of Section 4.

     13. Terms of Employment. (a) Position and Duties. i. During the Employment Period, (A) the
Executive’s position (including status, offices, titles and reporting requirements), authority,
duties and responsibilities shall be at least commensurate in all material respects with the most
significant of those held, exercised and assigned at any time during the 90-day period immediately
preceding the Effective Date and (B) the Executive’s services shall be performed at the location
where the Executive was employed immediately preceding the Effective Date or any office or location
less than 35 miles from such location.

     ii. During the Employment Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote reasonable attention and time
during normal business hours to the business and affairs of the Company and, to the extent
necessary to discharge the responsibilities assigned to the Executive hereunder, to use the
Executive’s reasonable best efforts to perform faithfully and efficiently such responsibilities.
During the Employment Period it shall not be a violation of this Agreement for the Executive to (A)
serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill
speaking engagements or teach at educational institutions and (C) manage personal investments, so
long as such activities do not significantly interfere with the performance of the Executive’s
responsibilities as an employee of the Company in accordance with this Agreement. It
is expressly understood and agreed that to the extent that any such activities have been
conducted by the Executive prior to the Effective Date, the continued conduct of such

11

 

activities
(or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date
shall not thereafter be deemed to interfere with the performance of the Executive’s
responsibilities to the Company.

     (b) Compensation. i. Base Salary. During the Employment Period, the
Executive shall receive an annual base salary (“Annual Base Salary”), which shall be paid at a
monthly rate, at least equal to twelve times the highest monthly base salary paid or payable to the
Executive by the Company and its Affiliated Companies for any month during the twelve-month period
immediately preceding the month in which the Effective Date occurs. During the Employment Period,
the Annual Base Salary shall be reviewed at least annually and shall be increased at any time and
from time to time as shall be substantially consistent with increases in base salary generally
awarded in the ordinary course of business to other peer executives of the Company and its
Affiliated Companies. Any increase in Annual Base Salary shall not serve to limit or reduce any
other obligation to the Executive under this Agreement. Annual Base Salary shall not be reduced
after any such increase and the term Annual Base Salary as utilized in this Agreement shall refer
to Annual Base Salary as so increased.

     ii. Annual Bonus. In addition to Annual Base Salary, the Executive shall be awarded,
for each fiscal year ending during the Employment Period, an annual bonus (the “Annual Bonus”) in
cash at least equal to the average annualized (for any fiscal year consisting of less than twelve
full months or with respect to which the Executive has been employed by the Company for less than
twelve full months) bonuses paid or payable, including any amount that would have been paid or have
been payable were it not for a mandatory or voluntary deferral of such amount, including pursuant
to the Annual and Long-Term Incentive Plans or any counterpart or successor plan(s) thereto, to the
Executive by the Company and its Affiliated Companies in respect of the three fiscal years
immediately preceding the fiscal year in which the Effective Date occurs (the “Recent Average
Bonus”). Each such Annual Bonus shall be paid no later than the fifteenth (15th) day of
the third month of the fiscal year next following the fiscal year for which the Annual Bonus is
awarded, unless the Executive shall elect to defer the receipt of such Annual Bonus in accordance
with the terms of any deferred compensation plan then in effect.

     iii. Incentive, Savings and Retirement Plans. During the Employment Period, the
Executive shall be entitled to participate in all incentive, savings and retirement plans,
practices, policies and programs applicable generally to other peer executives of the Company and
its Affiliated Companies, but in no event shall such plans, practices, policies and programs
provide the Executive with incentive opportunities (measured with respect to both regular and
special incentive opportunities, to the extent, if any, that such distinction is applicable),
savings opportunities and retirement benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company and its Affiliated Companies
for the Executive under such plans, practices, policies and programs as in effect at any time
during the 90-day period immediately preceding the Effective Date or, if more favorable to the
Executive, those provided generally at any time after the Effective Date to other peer executives
of the Company and its Affiliated Companies. The amount payable to the Executive under any such
incentive program(s) for any performance period will be reduced (but not below zero) by the amount
of the Annual Bonus paid or payable to the Executive for such performance period in accordance with
Section 3(b)(ii) above. Any amounts
thereafter payable to the Executive under the incentive program(s) for any performance period
shall be paid no later than the fifteenth (15th) day of the third month of the fiscal

12

 

year next following the fiscal year that includes the performance period for which such payments
are awarded.

     iv. Welfare Benefit Plans. During the Employment Period, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for participation in and shall receive
all benefits under welfare benefit plans, practices, policies and programs provided by the Company
and its Affiliated Companies (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death and travel, accident
insurance plans and programs) to the extent applicable generally to other peer executives of the
Company and its Affiliated Companies, but in no event shall such plans, practices, policies and
programs provide the Executive with benefits which are less favorable, in the aggregate, than the
most favorable of such plans, practices, policies and programs in effect for the Executive at any
time during the 90-day period immediately preceding the Effective Date or, if more favorable to the
Executive, those provided generally at any time after the Effective Date to other peer executives
of the Company and its Affiliated Companies.

     v. Expenses. During the Employment Period, the Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the
most favorable policies, practices and procedures of the Company and its Affiliated Companies in
effect for the Executive at any time during the 90-day period immediately preceding the Effective
Date or, if more favorable to the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its Affiliated Companies.

     vi. Fringe Benefits. During the Employment Period, the Executive shall be entitled to
fringe benefits in accordance with the most favorable plans, practices, programs and policies of
the Company and its Affiliated Companies in effect for the Executive at any time during the 90-day
period immediately preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of the Company and
its Affiliated Companies.

     vii. Office and Support Staff. During the Employment Period, the Executive shall be
entitled to an office or offices of a size and with furnishings and other appointments, and to
exclusive personal secretarial and other assistance, at least equal to the most favorable of the
foregoing provided to the Executive by the Company and its Affiliated Companies at any time during
the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive,
as provided generally at any time thereafter with respect to other peer executives of the Company
and its Affiliated Companies.

     viii. Vacation. During the Employment Period, the Executive shall be entitled to paid
vacation in accordance with the most favorable plans, policies, programs and practices of the
Company and its Affiliated Companies as in effect for the Executive at any time during the 90-day
period immediately preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer incentives of the Company and
its Affiliated Companies.

     14. Termination of Employment. (a) Death or Disability. The Executive’ shall Terminate Employment automatically upon
the Executive’s death during the Employment Period. If the Company determines in good faith that
the Disability of the Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive or his legal representative
written

13

 

notice in accordance with Section 11(b) of this Agreement of its intention to Terminate the
Executive’s Employment. In such event, the Executive’s Termination of Employment shall occur
effective on the 30th day after receipt of such notice by the Executive or his legal representative
(the “Disability Effective Date”), provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the Executive’s duties. For purposes
of this Agreement, “Disability” shall mean the absence of the Executive from the Executive’s duties
with the Company on a full time basis for 180 consecutive business days as a result of a medically
determinable physical or mental impairment that can be expected to result in death or is otherwise
total and permanent as determined by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive’s legal representative (such agreement as to
acceptability not to be withheld unreasonably).

     (b) Cause. The Company may Terminate the Employment of the Executive during the
Employment Period for Cause. For purposes of this Agreement, “Cause” shall mean (i) repeated
violations by the Executive of the Executive’s obligations under Section 3(a) of this Agreement
(other than as a result of incapacity due to physical or mental illness) which are demonstrably
willful and deliberate on the Executive’s part, which are committed in bad faith or without
reasonable belief that such violations are in the best interests of the Company and which are not
remedied in a reasonable period of time after receipt of written notice from the Company specifying
such violations or (ii) the conviction of the Executive of a felony involving moral turpitude. For
purposes of this Section 4(b), no act, or failure to act, on the part of the Executive shall be
considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive’s action or omission was in the best interests of the
Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer of the Company or a
senior officer of the Company or based upon the advice of counsel for the Company (or any act which
the Executive omits to do because of the Executive’s reasonable belief that such act would violate
law or the Company’s standards of ethical conduct in its corporate policies) shall be conclusively
presumed to be done, or omitted to be done, by the Executive in good faith and in the best
interests of the Company. The cessation of employment of the Executive shall not be deemed to be
for Cause unless and until there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters of the entire membership of
the Board (excluding the Executive, if the Executive is a member of the Board) at a meeting of the
Board called and held for such purpose (after reasonable notice is provided to the Executive and
the Executive is given an opportunity, together with counsel for the Executive, to be heard before
the Board), finding that, in the good faith opinion of the Board, the Executive committed the
conduct described in Section 4(b)(i) or 4(b)(ii), and specifying the particulars thereof in detail.

     (c) Without Cause. The Company may Terminate the Employment of Executive during the
Employment Period without Cause, in which event, without limitation, the provisions of Section 5
shall apply.

     (d) Good Reason. The Executive may Terminate Employment for Good Reason during the
Employment Period. For purposes of this Agreement, “Good Reason” shall mean the occurrence of any
of the following events:

     i. the assignment to the Executive of any duties inconsistent in any respect with the
Executive’s position (including status, offices, titles and reporting requirements), authority,
duties or responsibilities as contemplated by Section 3(a) of this Agreement,

14

 

or any other action
by the Company which results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof
given by the Executive;

     ii. any failure by the Company to comply with any of the provisions of Section 3(b) of this
Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith
and which is remedied by the Company promptly after receipt of notice thereof given by the
Executive;

     iii. the Company’s requiring the Executive to be based at any office or location other than
that described in Section 3(a)(i)(B) hereof;

     iv. any purported termination by the Company of the Executive’s employment otherwise than as
expressly permitted by this Agreement;

     v. any failure by the Company to comply with and satisfy Section 10(c) of this Agreement; or

     vi. the Company’s request that the Executive perform any illegal, or wrongful act in violation
of the Company’s code of conduct policies.

For purposes of this Section 4(d), any good faith determination of “Good Reason” made by the
Executive shall be conclusive.

     (e) Without Good Reason. The Executive’s employment may be terminated during the
Employment Period by the Executive without Good Reason.

     (f) Notice of Termination. Any Termination of the Executive’s Employment by the
Company or by the Executive shall be communicated by a Notice of Termination given to the other
party hereto. Such Notice of Termination shall satisfy the requirements set forth in Section 11(b)
of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written
notice which (i) indicates the specific termination provision in this Agreement which is relied
upon as a basis for the Termination of the Executive’s Employment, (ii) to the extent applicable,
sets forth in reasonable detail the facts and circumstances claimed to provide a basis for
Termination of the Executive’s Employment under the provision so indicated and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such notice, specifies the Date
of Termination (which date shall not be more than fifteen (15) days after the date the Notice of
Termination is tendered to the other party). The failure by the Executive or the Company to set
forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company hereunder or preclude the
Executive or the Company from asserting such fact or circumstance in enforcing the Executive’s or
the Company’s rights under this Agreement. Subject to the provisions of Section 5, the
Executive’s Employment Period ends at 11:59 p.m. on the Executive’s Date of Termination.

     (g) Date of Termination. “Date of Termination” means the date of which the
Executive’s Termination of Employment occurs, as follows: (i) if the Executive’s Termination of
Employment is by the Company for Cause, or by the Executive for Good Reason or for other than Good
Reason, the date of receipt of the Notice of Termination or any later date specified therein, as
the case may be, (ii) if the Executive’s

15

 

Termination of Employment is by the Company other than for
Cause or Disability, the date on which the Company notifies the Executive of such termination and
(iii) if the Executive’s Termination of Employment is by reason of death or Disability, the date of
death of the Executive or the Disability Effective Date, as the case may be.

     15. Obligations of the Company upon Termination. (a) Good Reason; Other Than for Cause, Death or
Disability. If, during the Employment Period, the Executive’s Termination of Employment shall
be by Company other than for Cause or Disability or by the Executive for Good Reason, then, subject
to the provisions of Section 8:

     i. the Company shall pay to the Executive in a lump sum in cash the aggregate of the following
amounts (such aggregate amounts shall be hereinafter referred to as the “Special Termination
Amount”):

          (1) the sum of (1) the Executive’s Annual Base Salary through the Date of Termination and any
Annual Bonus(es) that relate to performance periods that have ended on or before the Date of
Termination, (2) the product of (x) the higher of (I) the Recent Average Bonus and (II) the Annual
Bonus paid or payable, including any amount that would have been paid or would be payable were it
not for a mandatory or voluntary deferral of such amount (and annualized for any fiscal year
consisting of less than twelve full months or for which the Executive has been employed for less
than twelve full months) for the most recently completed fiscal year during the Employment Period,
if any (the “Highest Annual Bonus”) and (y) a fraction, the numerator of which is the number of
days in the current fiscal year through the Date of Termination, and the denominator of which is
365 (provided that, if the Executive’s Date of Termination is the same day as a Change of Control
occurs as defined in the Annual and Long-Term Incentive Plans or any counterpart or successor plans
thereto, the amount payable under this clause (2) shall be reduced (but not below zero) by the
amounts paid or payable under such plans as a result of the Change of Control); and (3) any accrued
vacation pay; in each case to the extent not theretofore paid (the sum of the amounts described in
clauses (1), (2), and (3) shall be hereinafter referred to as the “Accrued Obligations”); and

          (2) the amount equal to the product of (1) three and (2) the sum of (x) the Executive’s Annual
Base Salary and (y) the Highest Annual Bonus; and

          (3) a separate lump-sum supplemental retirement benefit equal to:

               (a) if the Executive is participating in the Johnson Controls, Inc. Pension Plan (or any
successor plan thereto) (the “Pension Plan”) and/or is accruing a supplemental defined benefit
amount under the Johnson Controls, Inc. Restoration Benefit Plan (the “Restoration Plan”) or any
other supplemental and/or excess retirement plan that provides a defined benefit-type accrual for
the Executive (the
“SERP”) as of the Effective Date, the amount, if any, by which (A) the actuarial equivalent
single-sum value (utilizing for this purpose the actuarial assumptions utilized to determine lump
sum payments as of the Date of Termination with respect to the Pension Plan) of the benefit payable
under the Pension Plan, the related defined benefit component of the Restoration Plan or any other
SERP which the Executive would receive if the Executive’s employment continued at the compensation
level provided for in Sections 3(b)(i) and 3(b)(ii) of this Agreement until the second anniversary
of the Effective Date, assuming for this purpose that all accrued benefits are fully vested and
that benefit accrual formulas and the actuarial assumptions are no less advantageous to the
Executive than those most favorable to the Executive and in effect during the 90-day

16

 

period
immediately preceding the Effective Date and assuming that the benefits commence on the earliest
date following Termination of Employment on which the Executive would be eligible to commence
benefits under the Pension Plan, exceeds (B) the actuarial equivalent single-sum value (utilizing
for this purpose the same actuarial assumptions as were utilized in clause (1) above) of the
Executive’s actual benefit (paid or payable) with payment assumed to have commenced at the same
time as under clause (1) above, if any, under the Pension Plan, the Restoration Plan and the SERP;
or

               (b) if the Executive is participating in the Johnson Controls, Inc. Savings and Investment
(401k) Plan, or any successor plan thereto (the “SIP”), and/or is eligible for any supplemental
defined contribution benefits under the Restoration Plan or any other supplemental or excess
retirement plan that provides a defined contribution-type benefit for the Executive (the “DC SERP”)
as of the Effective Date, the amount equal to the Company non-matching and non-elective deferral
contributions that would have been made for the Executive under the SIP, the Restoration Plan and
the DC SERP if the Executive’s employment continued at the compensation level provided for in
Sections 3(b)(i) and 3(b)(ii) of this Agreement until the second anniversary of the Effective Date,
assuming for this purpose that the Executive’s accounts are fully vested and that the contribution
formulas are no less advantageous to the Executive than those most favorable to the Executive and
in effect during the 90-day period immediately preceding the Effective Date, but determined without
regard to any interest such amounts would have earned until the second anniversary of the Effective
Date.

     Such lump sum shall be paid within thirty (30) business days after the Executive’s Separation
from Service, provided that (x) if the Executive is a Specified Employee, payment will be delayed
until no earlier than six (6) months and no later than seven (7) months after the date of the
Executive’s Separation from Service, and if so delayed, such payment shall be accompanied by a
payment of interest at an annual rate equal to the “prime rate” as published from time to time by
The Wall Street Journal, such rate changing as and when such published rate changes (the “Prime
Rate”), compounded quarterly, and (y) if the Effective Date is prior to a Change of Control
pursuant to Section 1(a)(ii), payment will be made within thirty (30) business days following the
Change of Control.

     ii. until the second anniversary of the Effective Date, or such longer period as any plan,
program, practice or policy may provide, the Company shall continue welfare benefits to the
Executive and/or the Executive’s family at least equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies described in Section 3(b)(iv)
of this Agreement if the Executive’s Employment had not been Terminated in accordance with the most
favorable plans, practices, programs or policies of the Company and its Affiliated Companies
applicable generally to other peer executives and their families during the 90-day period
immediately preceding the Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the Company and its
Affiliated Companies and their families, provided, however, that if the Executive becomes
reemployed with another employer and is eligible to receive medical or other welfare benefits under
another employer-provided plan, the medical and other welfare benefits described herein shall be
secondary to those provided under such other plan during such applicable period of eligibility.
For purposes of determining eligibility of the Executive for retiree benefits pursuant to such
plans, practices, programs and policies, the Executive shall be considered to have remained
employed

17

 

until the second anniversary of the Effective Date and to have retired on the last day of
such period. With respect to the foregoing:

          (1) If applicable, following the end of the COBRA continuation period, if such health care
coverage is provided under a health plan that is subject to Code Section 105(h), benefits payable
under such health plan shall comply with the requirements of Treasury regulation section
1.409A-3(i)(1)(iv)(A) and (B) and, if necessary, the Company shall amend such health plan to comply
therewith. The continuation of health care coverage hereunder shall count as COBRA continuation
coverage;

          (2) If the Executive is a Specified Employee, then during the first six (6) months following
the Executive’s Separation from Service, the Executive shall pay the Company for any life insurance
coverage that provides a benefit in excess of $50,000 under a group term life insurance policy.
After the end of such six (6)-month period, the Company shall make a cash payment to the Executive
equal to the aggregate premiums paid by the Executive for such coverage, and such payment shall be
credited with interest at an annual rate equal to the Prime Rate, compounded quarterly, and
thereafter such coverage shall be provided at the expense of the Company for the remainder of the
period ending on the second anniversary of the Effective Date; and

          (3) If the Effective Date is prior to a Change of Control pursuant to Section 1(a)(ii), then
the Company shall fulfill its obligations hereunder by providing retroactive welfare benefits
coverage to the Executive’s Date of Termination and, if the Executive has paid COBRA premiums for
health care coverage from the Date of Termination through the date of the Change of Control, the
Company shall reimburse the Executive for the aggregate amount of such COBRA premiums within thirty
(30) business days following the Change of Control, without liability for interest thereon; and

     iii. to the extent not theretofore paid or provided, the Company shall timely pay or provide
to the Executive any other amounts or benefits required to be paid or provided or which the
Executive is eligible to receive pursuant to this Agreement under any plan, program, policy or
practice or contract or agreement of the Company and its Affiliated Companies (such other amounts
and benefits shall be hereinafter referred to as the “Other Benefits”).

     (b) Death. If the Executive’s Termination of Employment is by reason of the
Executive’s death during the Employment Period, this Agreement shall terminate without further
obligations to the Executive’s legal representatives under this Agreement, other than for payment
of the Special Termination Amount and the timely payment or provision of Other Benefits. The
Special Termination Amount shall be paid to the Executive’s estate or beneficiary, as applicable,
in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of
Other Benefits, the term Other Benefits as utilized in this Section 5(b) shall include, and the
Executive’s
family shall be entitled to receive, benefits at least equal to the most favorable benefits
provided by the Company and any of its Affiliated Companies to surviving families of peer
executives of the Company and such Affiliated Companies under such plans, programs, practices and
policies relating to family death benefits, if any, as in effect with respect to other peer
executives and their families at any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive and/or the Executive’s family, as in effect
on the date of the Executive’s death with respect to other peer executives of the Company and its
Affiliated Companies and their families.

18

 

     (c) Disability. If the Executive’s Termination of Employment is by reason of the
Executive’s Disability during the Employment Period, this Agreement shall terminate without further
obligations to the Executive, other than for payment of the Special Termination Amount and the
timely payment or provision of Other Benefits. The Special Termination Amount shall be paid to the
Executive at the same time and in the same manner as the payment would be made pursuant to Section
5(a). With respect to the provision of Other Benefits, the term Other Benefits as utilized in this
Section 5(c) shall include, and the Executive shall be entitled after the Disability Effective Date
to receive, disability and Other Benefits at least equal to the most favorable of those generally
provided by the Company and its Affiliated Companies to disabled executives and/or their families
in accordance with such plans, programs, practices and policies relating to disability, if any, as
in effect generally with respect to other peer executives and their families at any time during the
90-day period immediately preceding the Effective Date or, if more favorable to the Executive
and/or the Executive’s family, as in effect at any time thereafter generally with respect to other
peer executives of the Company and its Affiliated Companies and their families.

     (d) Termination by Company for Cause; Termination by Executive for Other than for Good
Reason.

     i. If the Executive’s Termination of Employment during the Employment Period is by the Company
for Cause, this Agreement shall terminate without further obligations to the Executive other than
the obligation to pay to the Executive his Annual Base Salary through the Date of Termination
(subject to any deferral election then in effect) and the payment, in accordance with the terms of
the Johnson Controls, Inc. Executive Deferred Compensation Plan and the Johnson Controls, Inc.
Retirement Restoration Plan (or other relevant nonqualified deferred compensation plan), of any
previously vested amounts, in each case to the extent theretofore unpaid.

     ii. If the Executive voluntarily Terminates Employment during the Employment Period, excluding
a Termination of Employment for Good Reason, this Agreement shall terminate without further
obligations to the Executive, other than for Accrued Obligations and the timely payment or
provision of Other Benefits. In such case, all Accrued Obligations shall be paid to the Executive
in a lump sum in cash within thirty (30) business days of the Executive’s Separation from Service;
provided that if the Executive is a Specified Employee, payment will be delayed until no earlier
than six (6) months and no later than seven (7) months after the date of Separation from Service,
and, if so delayed, such payment shall be credited with interest at an annual rate equal to the
Prime Rate, compounded quarterly.

     16. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive’s
continuing or future participation in any plan, program, policy or practice provided by the Company
or any of
its Affiliated Companies and for which the Executive may qualify, nor shall anything herein limit
or otherwise affect such rights as the Executive may have under any contract or agreement with the
Company or any of its Affiliated Companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy, practice or program of or any
contract or agreement with the Company or any of its Affiliated Companies at or subsequent to the
Date of Termination shall be payable in accordance with such plan, policy, practice or program or
contract or agreement except as explicitly modified by this Agreement.

19

 

     17. Full Settlement. The Company’s obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other employment or take
any other action by way of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and, except as provided in Section 6(a)(ii), such amounts shall not be
reduced whether or not the Executive obtains other employment. The Company agrees to pay, to the
full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur
as a result of any contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision of this Agreement or
any guarantee of performance thereof (including as a result of any contest by the Executive about
the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed
payment at the Prime Rate, compounded quarterly. The Company shall make such payment to the
Executive within thirty (30) business days (but in no event later than the end of the calendar year
following the calendar year in which the Executive incurred such fees and expenses) following
receipt from the Executive of documentation substantiating such fees and expenses.

     18. 280G Provision.

     (a) Notwithstanding any other provision of this Agreement, if any portion of the Special
Termination Amount or any other payment, distribution, or benefit in the nature of compensation
(within the meaning of Code Section 280G(b)(2)) under this Agreement, or under any other agreement
with the Executive or plan of the Company or its Affiliated Companies (in the aggregate, “Total
Payments”), would constitute an “excess parachute payment” and would, but for this Section 8(a),
result in the imposition on the Executive of an excise tax under Code Section 4999 (the “Excise
Tax”), then the Total Payments to be made to the Executive shall either be (i) delivered in full,
or (ii) delivered in such amount so that no portion of such Total Payment would be subject to the
Excise Tax, whichever of the foregoing results in the receipt by the Executive of the greatest
benefit on an after-tax basis (taking into account the applicable federal, state and local income
taxes and the Excise Tax).

     (b) Within forty (40) days following the Executive’s Termination of Employment or notice by
one party to the other of its belief that there is a payment or benefit due the Executive that will
result in an excess parachute payment, the Executive and the Company, at the Company’s expense,
shall obtain the opinion (which need not be unqualified) of nationally recognized tax counsel
(“National Tax Counsel”) selected by the Company’s independent auditors and reasonably acceptable
to the Executive (which may be regular outside counsel to the Company), which opinion sets forth
(i) the amount of the Base Period Income (as defined below), (ii) the amount and present
value of the Total Payments, (iii) the amount and present value of any excess parachute
payments determined without regard to any reduction of Total Payments pursuant to Section 8(a), and
(iv) the net after-tax proceeds to the Executive, taking into account the tax imposed under Code
Section 4999 if (x) the Total Payments were reduced in accordance with Section 8(a)(ii), or (y) the
Total Payments were not so reduced. The opinion of National Tax Counsel shall be addressed to the
Company and the Executive and shall be binding upon the Company and the Executive. If such
National Tax Counsel opinion determines that clause (ii) of Section 8(a) applies, then the Payments
hereunder or any other payment or benefit determined by such counsel to be includable

20

 

in Total
Payments shall be reduced or eliminated so that under the bases of calculations set forth in such
opinion there will be no excess parachute payment. In such event, payments or benefits included in
the Total Payments shall be reduced or eliminated by applying the following principles, in order:
(1) the payment or benefit with the higher ratio of the parachute payment value to present economic
value (determined using reasonable actuarial assumptions) shall be reduced or eliminated before a
payment or benefit with a lower ratio; (2) the payment or benefit with the later possible payment
date shall be reduced or eliminated before a payment or benefit with an earlier payment date; and
(3) cash payments shall be reduced prior to non-cash benefits; provided that if the foregoing order
of reduction or elimination would violate Code Section 409A, then the reduction shall be made pro
rata among the payments or benefits included in the Payments (on the basis of the relative present
value of the parachute payments).

     (c) For purposes of this Agreement: (i) the terms “excess parachute payment” and “parachute
payments” shall have the meanings assigned to them in Code Section 280G and such “parachute
payments” shall be valued as provided therein. Present value for purposes of this Agreement shall
be calculated in accordance with Code Section 280G(d)(4); (ii) the term “Base Period Income” means
an amount equal to the Executive’s “annualized includible compensation for the base period” as
defined in Code Section 280G(d)(1); (iii) for purposes of the opinion of National Tax Counsel, 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 Code Sections 280G(d)(3) and
(4), which determination shall be evidenced in a certificate of such auditors addressed to the
Company and the Executive; and (iv) the Executive shall be deemed to pay federal income tax and
employment taxes at the highest marginal rate of federal income and employment taxation, and state
and local income taxes at the highest marginal rate of taxation in the state or locality of the
Executive’s domicile (determined in both cases in the calendar year in which the Covered
Termination or notice described in Section 8(b) is given, whichever is earlier), net of the maximum
reduction in federal income taxes that may be obtained from the deduction of such state and local
taxes.

     (d) If such National Tax Counsel so requests in connection with the opinion required by this
Section 8, the Executive and the Company shall obtain, at the Company’s expense, and the National
Tax Counsel may rely on, the advice of a firm of recognized executive compensation consultants as
to the reasonableness of any item of compensation to be received by the Executive solely with
respect to its status under Code Section 280G.

     (e) The Company agrees to bear all costs associated with, and to indemnify and hold harmless,
the National Tax Counsel of and from any and all claims, damages, and expenses resulting from or
relating to its determinations pursuant to this Section 8,
except for claims, damages or expenses resulting from the gross negligence or willful
misconduct of such firm.

     (f) This Section 8 shall be amended to comply with any amendment or successor provision to
Sections 280G or 4999 of the Code. If such provisions are repealed without successor, then this
Section 8 shall be cancelled without further effect.

     19. Confidential Information. (a) The Executive shall hold in a fiduciary capacity for the benefit of
the Company all secret or confidential information, knowledge or data relating to the Company or
any of its Affiliated Companies, and their respective

21

 

businesses, which shall have been obtained by
the Executive during the Executive’s employment by the Company or any of its Affiliated Companies
and which shall not be or become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement). During employment and for two
years after the Executive’s Termination of Employment, the Executive, except as may otherwise be
required by law or legal process, shall not use any such information except on behalf of the
Company and shall not communicate or divulge any such information, knowledge or data to anyone
other than the Company and those designated by it. This covenant shall survive the termination of
this Agreement. Nothing in this paragraph is intended or shall be construed to limit in any way
Executive’s independent duty not to misappropriate Trade Secrets of the Company.

     (b) “Trade Secret” means information of the Company and its Affiliated Companies, including a
formula, pattern, compilation, program, device, method, technique or process, that derives
independent economic value, actual or potential, from not being generally known to, and not being
readily ascertainable by proper means by, other persons who can obtain economic value from its
disclosure or use, and that is the subject of efforts by the Company or an Affiliated Company to
maintain its secrecy that are reasonable under the circumstances. During employment with the
Company and its Affiliated Companies, Executive shall preserve and protect Trade Secrets from
unauthorized use or disclosure, and after Termination of Employment, Executive shall not use or
disclose any Trade Secret until such time as that Trade Secret is no longer a secret as a result of
circumstances other than a misappropriation involving the Executive.

     20. Successors. (a) This Agreement is personal to the Executive and without the prior written consent
of the Company shall not be assignable by the Executive otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the
Executive’s legal representatives.

     (b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.

     (c) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such agreement prior to the effective date of such purchase,
merger,
consolidation or other transaction shall be a breach of this Agreement constituting “Good
Reason” hereunder, except that for purposes of implementing the foregoing, the date upon which such
purchase, merger, consolidation or other transaction becomes effective shall be deemed the Date of
Termination. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined
and any successor to its business and/or assets as aforesaid which assumes and agrees to perform
this Agreement by operation of law, or otherwise.

     21. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws
of the State of Wisconsin, without reference to principles of conflict of laws. The captions of
this Agreement are not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.

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     (b) All notices and other communications hereunder shall be in writing and shall be given by
hand delivery to the other party or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:

     If to the Executive:

     If to the Company:

Johnson Controls, Inc.

5757 North Green Bay Avenue

Milwaukee, Wisconsin 53209

Attention: General Counsel

or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective when actually received by the addressee.

     (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.

     (d) The Company may withhold from any amounts payable under this Agreement such Federal, state
or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.
In addition, if prior to the date of payment of any payment hereunder, the Federal Insurance
Contributions Act (FICA) tax imposed under Sections 3101, 3121(a) and 3121(v)(2), where applicable,
becomes due with respect to any payment or benefit to be provided hereunder, the Company shall
(unless otherwise directed by the Executive, to the extent such direction does not cause a
violation of Code Section 409A) provide for an immediate payment of the amount needed to pay the
Executive’s portion of such tax (plus an amount equal to the taxes that will be due on such amount)
and the Special Termination Amount shall be reduced accordingly.

     (e) The Executive’s or the Company’s failure to insist upon strict compliance with any
provision hereof or any other provision of this Agreement or the failure to assert any right the
Executive or the Company may have hereunder, including, without limitation, the right of the
Executive to Terminate Employment for Good Reason pursuant to Section 4(c)(i)-(v) of this
Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or
right of this Agreement.

     (f) The Executive and the Company acknowledge that, except as may otherwise be provided under
any other written agreement between the Executive and the Company, the employment of the Executive
by the Company is “at will” and, prior to the Effective Date, may be terminated by either the
Executive or the Company at any time. Moreover, if prior to the Effective Date, (i) the
Executive’s employment with the Company terminates or (ii) the Executive ceases to be an officer of
the Company, then the Executive shall have no further rights under this Agreement. From and after
the Effective Date, this Agreement shall supersede any other employment agreement between the
parties.

23

 

     (g) This Agreement shall be governed by the laws of the State of Wisconsin, without reference
to conflict of law principles thereof.

     i. If, after a Change of Control, any payment amount or the value of any benefit under this
Agreement is required to be included in an Executive’s income prior to the date such amount is
actually paid or the benefit provided as a result of the failure of this Agreement (or any other
arrangement that is required to be aggregated with this Agreement under Code Section 409A) to
comply with Code Section 409A, then the Executive shall receive a payment, in a lump sum, within
ninety (90) days after the date it is finally determined that the Agreement (or such other
arrangement that is required to be aggregated with this Agreement) fails to meet the requirements
of Section 409A of the Code; such payment shall equal the amount required to be included in the
Executive’s income as a result of such failure and shall reduce the amount of payments or benefits
otherwise due hereunder.

     ii. The Company and the Executive intend the terms of this Agreement to be in compliance with
Section 409A of the Code. To the maximum extent permissible, any ambiguous terms of this Agreement
shall be interpreted in a manner which avoids a violation of Section 409A of the Code.

     (h) To avoid a violation of Section 409A of the Code, the Executive acknowledges that, with
respect to payments that may be payable or benefits that may be provided under this Agreement that
are subject to Section 409A of the Code and that are not timely paid or provided, the Executive
must make a reasonable, good faith effort to collect any payment or benefit to which the Executive
believes the Executive is entitled hereunder no later than ninety (90) days after the latest date
upon which the payment should have been made or benefit provided under this Agreement, and if not
paid or provided, must take further enforcement measures within one hundred eighty (180) days after
such latest date. Failure to comply with these deadlines will not result in the loss of any
payment or benefit to which the Executive is otherwise entitled.

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the
authorization from its Board of Directors, the Company has caused these presents to be executed in
its name on its behalf, all as of the day and year first above written.

	 	 	 	 	 	 
	 	 	

JOHNSON CONTROLS, INC.

 	 
	 	 	By:  	 	 
	 	 	 	Stephen Roell, CEO 	 
	 	 	 	 	 
	 

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