Document:

EX-10(N)

Exhibit 10.N

JOHNSON CONTROLS, INC.

38,447,427 Shares

Common Stock

JOHNSON CONTROLS, INC. 2000 STOCK OPTION PLAN

Original Effective Date: January 1, 2000

(Adjusted to reflect 3-for-1 stock split effective September 14, 2007)

     This document sets forth information relating to participation in the Johnson Controls, Inc.
2000 Stock Option Plan (the “Plan”) and to shares of our common stock that we are offering under
the Plan. Each share of our common stock issued under the Plans will include one right to purchase
our common stock. In this document, unless the context otherwise requires, all references to our
common stock includes the accompanying rights. We are offering participation in the Plan to our
officers and other key employees and those of our subsidiaries.

     This document will be accompanied or preceded by our latest Annual Report to Shareholders. If
you have previously received a copy of our Annual Report to Shareholders but wish to have another
copy, then we will furnish an additional copy without charge upon written or oral request to us.

     Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of the securities offered pursuant to the Plan or determined if this
prospectus is truthful and complete. Any representation to the contrary is a criminal offense.

     You should rely only on the information contained in this document or to which we have
referred you. We have not authorized anyone to provide you with information that is different.
The information in this document may only be accurate on the date of the document. This document
may only be used where it is legal to sell these securities.

     This document may not be used for resales of shares acquired under the Plan.

 

 

THE COMPANY

     We are a global market leader in automotive systems and facility management and control. In
the automotive market, we are a major supplier of seating and interior systems, and batteries. For
nonresidential facilities, we provide building control systems and services, energy management and
integrated facility management. Our principal executive offices are located at 5757 North Green
Bay Avenue, P.O. Box 591, Milwaukee, Wisconsin 53201. Our telephone number is (414) 524-1200.

     1. Establishment. JOHNSON CONTROLS, INC. (the “Company”) hereby establishes a stock option plan
for certain officers and other key employees, as described herein, which shall be known as the
JOHNSON CONTROLS, INC. 2000 STOCK OPTION PLAN (the “Plan”). It is intended that certain of the
stock options issued pursuant to the Plan may constitute incentive stock options within the meaning
of Section 422 of the Internal Revenue Code (“Incentive Stock Options”) and the remainder of the
options issued pursuant to the Plan shall constitute nonqualified options. Incentive Stock Options
and nonqualified stock options are hereinafter jointly referred to as “Options.” The Committee may
also award stock appreciation rights apart from Options issued pursuant to the Plan.

     2. Purpose. The purpose of the Plan is to induce certain officers and other key employees to
remain in the employ of the Company or its subsidiaries and to encourage such employees to secure
or increase on reasonable terms their stock ownership in the Company. The Board of Directors of
the Company (the “Board of Directors”) believes that the Plan will promote continuity of management
and increased incentive and personal interest in the welfare of the Company by those who are
responsible for shaping and carrying out the long-range plans of the Company and securing its
continued growth and financial success.

     3. Effective Date of the Plan. The Plan was adopted by the Board of Directors on November 17,
1999, and was most recently amended effective January 1, 2009. The Plan was approved by the
shareholders of the Company within twelve months of the effective date of the Plan, January 1,
2000. Any and all Options granted prior such adoption were granted subject to shareholder
approval.

     4. Stock Subject to the Plan. Subject to adjustment in accordance with the provisions of this
paragraph and paragraph 17, the total number of shares of the common stock of the Company (“Common
Stock”) available for awards during the term of the Plan shall be an amount calculated as follows:
(a) fifteen percent (15%) of the number of shares of Common Stock outstanding upon the effective
date of the Plan minus (b) the number of shares of Common Stock subject to awards made under any
prior stock option plan of the Company (a “Prior Plan”) and outstanding upon the effective date of
the Plan (“Prior Plan Awards”). Shares of Common Stock to be delivered upon exercise of Options or
settlement of stock appreciation rights under the Plan shall be made available from presently authorized but unissued Common Stock or authorized and issued shares of Common Stock
reacquired and held as treasury shares, or a combination thereof. If any Option or stock
appreciation right shall be canceled, expire or terminate without having been exercised in full, or
to the extent a stock appreciation right is settled in cash, the shares of Common Stock allocable
to the unexercised, canceled, forfeited portion of such Option or stock appreciation right, or
portion of such stock appreciation right

 

 

which is settled in cash, shall again be available for the purpose of the Plan. The surrender of any Options (and the surrender of any related stock
appreciation rights granted under paragraph 16) in connection with the receipt of stock
appreciation rights as provided in paragraph 16 shall, as to such Options, have the same effect
under this paragraph 4 as the cancellation or termination of such Options without having been
exercised. If any stock appreciation rights are granted under the Plan (including any grant in
connection with the surrender of outstanding Options), as provided in paragraph 16, and shares of
Common Stock may be issuable in connection with such stock appreciation rights, then the grant of
such stock appreciation rights shall be deemed to have the same effect under this paragraph 4 as
the grant of Options; provided, however, if any such stock appreciation rights shall be canceled,
expire or terminate without having been exercised in full, or to the extent a stock appreciation
right is settled in cash, the shares of Common Stock allocable to the unexercised, canceled,
forfeited portion of such stock appreciation right, or portion of such stock appreciation right
which is settled in cash, shall again be available for the purpose of the Plan. If the exercise
price of any Option granted under the Plan is satisfied by tendering shares of Common Stock to the
Company (by either actual delivery or by attestation), only the number of shares of Common Stock
issued net of the shares of Common Stock tendered shall be deemed delivered for purposes of
determining the maximum number of shares of Common Stock available for delivery under the Plan. If
any Participant satisfies the Company’s withholding tax requirements upon the exercise of an Option
by properly electing to have the Company withhold shares of Common Stock, then the shares of Common
Stock so withheld shall again be available for the purpose of the Plan, except that such shares
shall not be available for the granting of Incentive Stock Options. After the effective date of
the Plan, if any event occurs as a result of which shares of Common Stock subject to Prior Plan
Awards would again become available for the purpose of the relevant Prior Plan if the Prior Plan
were still in effect and the Company could grant awards under the Prior Plan, then such shares
shall be available for the purpose of the Plan rather than such Prior Plan (subject to any
applicable limitation on the use of such shares for the granting of Incentive Stock Options) and
thereby increase the shares available under the Plan as determined under the first sentence of this
paragraph.

     5. Administration.

	 	(a)	 	The Plan shall be administered by the Compensation Committee (the “Committee”)
consisting of not less than three members of the Board of Directors appointed from time
to time by the Board of Directors. No member of the Committee shall be, nor at any
time during the preceding one-year period have been, eligible to receive stock, stock
options or stock appreciation rights of the Company or of its subsidiaries pursuant to
the Plan or any other plan of the Company or its subsidiaries, other than a plan for
directors of the Company who are not officers or employees of the Company which
provides for automatic grants without exercise of discretion by any member of the Board of Directors, or by
any officer or employee of the Company.
	 
	 	(b)	 	Subject to the express provisions of the Plan, the Committee shall have
authority to establish such rules and regulations as it deems necessary or advisable
for the proper administration of the Plan, and in its discretion, to determine the
individuals (the “Participants”) to whom, and the time or times at which, Options

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	 	 	 	and stock appreciation rights shall be granted, the type of Options, the periods of Options
or stock appreciation rights, limitations on exercise of Options or stock appreciation
rights, and the number of shares to be subject to each Option or award of stock
appreciation rights. In making such determinations, the Committee may take into
account the nature of the services rendered by the respective employees, their present
and potential contributions to the success of the Company or its subsidiaries, and such
other factors as the Committee, in its discretion, shall deem relevant.

	 	(c)	 	Subject to the express provisions of the Plan, the Committee shall also have
complete authority to interpret the Plan, to prescribe, amend, and rescind rules and
regulations relating to it, to determine the terms and provisions of the respective
Option Agreements (which need not be identical) and to make all other determinations
necessary or advisable for the administration of the Plan. The Committee’s
determinations on the matters referred to in this paragraph 5 shall be conclusive and
binding upon all parties.
	 
	 	(d)	 	Neither the Committee nor any member thereof shall be liable for any act,
omission, interpretation, construction or determination made in connection with the
Plan in good faith, and the members of the Committee shall be entitled to
indemnification and reimbursement by the Company in respect of any claim, loss, damage
or expense (including attorneys fees) arising therefrom to the full extent permitted by
law and under any directors and officers liability insurance that may be in effect from
time to time.
	 
	 	(e)	 	A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or acts
approved in writing by a majority of the Committee without a meeting, shall be the acts
of the Committee.
	 
	 	(f)	 	The Chief Executive Officer of the Company shall have the same authority as the
Committee with respect to the grant and administration of awards of options and stock
appreciation rights made to (or to be made to) individuals eligible for the Plan,
excluding officers and employees who are subject to the provisions of Section 16 of the
Exchange Act or who are covered by Section 162(m) of the Code at the time in question.

     6. Eligibility. Options and stock appreciation rights may be granted to officers and other key employees of the
Company and of any of its present and future subsidiaries. The maximum number of shares of Common
Stock covered by Options which may be granted to any Participant within any two consecutive
calendar year periods shall not exceed 1.5 million shares in the aggregate. No Option or stock
appreciation right shall be granted to any person who owns, directly or indirectly, shares of stock
possessing more than 10% of the total combined voting power of all classes of stock of the Company.
A director of the Company or of a subsidiary who is not also an employee of the Company or of a
subsidiary will not be eligible to receive any Option or stock appreciation right hereunder.

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     7. Rights of Employees. Nothing in this Plan or in any Option or stock appreciation right shall
interfere with or limit in any way the right of the Company and any of its subsidiaries to
terminate any Participant’s or employee’s employment at any time, nor confer upon any Participant
or employee any right to continue in the employ of the Company and its subsidiaries. No employee
shall have any right to be granted an award under this Plan, even if an award was granted to such
employee at any prior time, or if a similarly-situated employee is or was granted an award under
similar circumstances.

     8. Option Agreements. All Options and stock appreciation rights granted under the Plan shall be
evidenced by written agreements (an “Option Agreement”) in such form or forms as the Committee
shall determine.

     9. Option Price. The per share Option price for Options and the per share grant price for stock
appreciation rights granted under paragraph 16, as determined by the Committee, shall be an amount
not less than 100% of the fair market value of the stock on the date such Options or stock
appreciation rights are granted (or, if the Committee so determines, in the case of any stock
appreciation right granted under paragraph 16 upon the surrender of any outstanding Option, on the
date of grant of such Option). Fair market value means, per share of stock on a particular date,
the closing sales price on such date on the New York Stock Exchange, or if no sales of stock occur
on the date in question, on the last preceding date on which there was a sale on such market. If
the shares not listed on the New York Stock Exchange, but are traded on a national securities
exchange or in an over-the-counter market, the closing sales price (or if there is no closing sales
price reported, the average of the closing bid and asked prices) for the shares on the particular
date, or on the last preceding date on which there was a sale of shares on that exchange or market,
will be used. If the shares are neither listed on a national securities exchange nor traded in an
over-the-counter market, the price determined by the Committee, in its discretion, will be used.
However, in connection with an exercise of Options, to the extent the Participant sells any shares
acquired upon such exercise in a market transaction on the date of exercise, the sale price(s) for
any such shares shall be the fair market value of such shares.

     10. Option Period. The term of each Option and stock appreciation right shall be as determined by
the Committee but in no event shall the term of an Option or stock appreciation right exceed a
period of ten (10) years from the date of its grant. Each Option and stock appreciation right granted hereunder may
granted at any time on or after the effective date of the Plan, and prior to its termination,
provided that no Option or stock appreciation right may be granted later than ten years after the
date this Plan is adopted. The Committee shall determine whether any Option or stock appreciation
right shall become exercisable in cumulative or non-cumulative installments or in full at any time.
An exercisable Stock Option or stock appreciation right, or portion thereof, may be exercised in
whole or in part only with respect to whole shares of Common Stock.

     11. Maximum Value of Incentive Stock Options. The aggregate fair market value (as defined in
paragraph 9) of the Common Stock for which any Incentive Stock Options are exercisable for the
first time by a Participant during any calendar year under the Plan or any other plan of the
Company or any subsidiary shall not exceed $100,000. To the extent the fair market value of the
shares of Common Stock attributable to Incentive Stock Options first

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exercisable in any calendar year exceeds $100,000, the excess portion of the Incentive Stock Options shall be treated as
nonqualified options.

     12. Transferability of Option or Stock Appreciation Right. No Option or stock appreciation right
granted hereunder shall be transferable other than options specifically designated by the
Compensation Committee as such and meeting the following requirements of transfer:

	 	(a)	 	by will or by the laws of descent and distribution; or
	 
	 	(b)	 	in the case of a nonqualified option:
	 
	 	 	 	(i) pursuant to a “Qualified Domestic Relations Order” as defined in Section 414(p)
of the Internal Revenue Code; or
	 
	 	 	 	(ii) to (A) his or her spouse, children or grandchildren (“Immediate Family
Members”), (B) a partnership in which the only partners are the Participant’s
Immediate Family Members, or (C) a trust or trusts established solely for the
benefit of one or more of the Participant’s Immediate Family Members (collectively,
the Permitted Transferees), provided that there may be no consideration for any such
transfer by a Participant.

     Following transfer (if applicable), such Options and stock appreciation rights shall continue
to be subject to the same terms and conditions as were applicable immediately prior to transfer,
provided that such Options and stock appreciation rights may be exercised during the life of the
Participant only by the Participant or, if applicable, by the alternate payee designated under a
Qualified Domestic Relations Order or the Participant’s Permitted Transferees.

     13. Exercise of Option. The Committee shall prescribe the manner in which a Participant may
exercise an Option which is not inconsistent with the provisions of this Plan. However, no Option
shall be exercisable, in whole or in part, for a period of at least six months commencing on the
date of grant, except as provided in paragraph 20 in the event of a Change in Control. An Option may be
exercised, subject to limitations on its exercise contained in the Option Agreement and in this
Plan, in full, at any time, or in part, from time to time, only by (A) written notice of intent to
exercise the Option with respect to a specified number of shares, and (B) by payment in full to the
Company at the time of exercise of the Option, of the option price of the shares being purchased.
Payment of the Option price may be made (i) in cash, (ii) if permitted by the applicable Option
Agreement, by tendering of shares of Common Stock equivalent in fair market value (as defined in
paragraph 9), or (iii) if permitted by the applicable Option Agreement, partly in cash and partly
in shares of Common Stock. Common Stock may be tendered either by actual delivery of shares of
Common Stock or by attestation.

     14. Withholding. If permitted by the applicable Option Agreement, a Participant may be permitted
to satisfy the Company’s withholding tax requirements by electing (i) to have the Company withhold
shares of Common Stock of the Company, or (ii) to deliver to the Company shares of Common Stock of
the Company having a fair market value on the date income is recognized on the exercise of a
nonqualified option equal to the minimum amount

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required to be withheld. The election shall be made in writing and according to such rules and in such form as the Committee shall determine.

     Notwithstanding the foregoing, the election and satisfaction of any withholding requirement
through the withholding of Common Stock or the tender of shares of Company Stock may be made only
at such times as are permitted, without incurring liabilities, by Rule 16b-3 of the Securities
Exchange Act of 1934, as amended, or such other securities laws, rules or regulations as may be
applicable.

     15. Termination of Employment.

	 	(a)	 	In the event a Participant’s employment with the Company or any of its
subsidiaries shall be terminated for any reason, except early or normal retirement,
death or total and permanent disability, a Participant may exercise his or her Options
and stock appreciation rights (to the extent vested and exercisable as of the date of
the Participant’s termination of employment) for a period of thirty (30) days after the
date of the Participant’s termination of employment, unless such Option or stock
appreciation right expires earlier under the terms of the award agreement. Thereafter,
all rights to exercise an Option or stock appreciation right shall terminate.
	 
	 	(b)	 	If the Participant should die while employed by the Company or any subsidiary
prior to the expiration of the term of the Option or stock appreciation right, the
Option or stock appreciation right shall be exercisable immediately to the extent it
would have been exercisable had the Participant remained employed for twelve months
after the date of death and may be exercised by the person to whom it is transferred by
will or by the applicable laws of descent and distribution by giving notice as provided
in paragraph 13, at any time within twelve months after the date of death unless such Option or stock appreciation right expires earlier under
the terms of the Option Agreement. For purposes of this paragraph, the six-month
limitation imposed pursuant to paragraph 13 shall not be applicable.
	 
	 	(c)	 	In the event of a Participant’s termination of employment with the Company due
to early or normal retirement, or due to total and permanent disability, prior to the
expiration of the term of an Option or stock appreciation right, the Option or stock
appreciation right: (i) shall be exercisable in full without regard to any vesting
requirements; provided that an Option or stock appreciation right of a Participant who
retires shall be exercisable in full only if the Participant retires on or after the
last day of the calendar year following the calendar year in which such Option or stock
appreciation right was granted, unless the Committee determines otherwise, and (ii) may
be exercised by the Participant at any time within thirty-six months after the date of
such early or normal retirement or termination due to total and permanent disability,
as the case may be, unless such Option or stock appreciation right expires earlier
under the terms of the award agreement. Provided, however, that for certain
participants who are officers of the Company or who are selected by the Compensation
Committee of the Board, nonqualified stock options may be exercised by the Participant
for up to ten (10) years after the date of such early or

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	 	 	 	normal retirement, or for five (5) years after the date of such total and permanent disability, as the case may be, in
the event of termination of employment with the Company due to early or normal
retirement, or due to total and permanent disability, prior to the expiration of the
term of the Option or stock appreciation right, unless such Option or stock
appreciation right expires earlier under the terms of the Option Agreement. For
purposes hereof, a Participant’s employment shall be deemed to have terminated due to
(a) early or normal retirement if such Participant is then eligible to receive
immediate early or normal retirement benefits under the provisions of any of the
Company’s or its subsidiaries defined benefit pension plans; or, in the absence of a
defined benefit plan, provided such Participant retires with ten years of service and
is at least 55 years old or retires with five years of service and is at least 65 years
old and (b) total and permanent disability if he is permanently disabled within the
meaning of Section 22(e)(3) of the Internal Revenue Code, as in effect from time to
time.
	 
	 	 	 	For purposes of this Plan: (a) a transfer of an employee from the Company to a 50%
or more owned subsidiary, partnership, joint venture or other affiliate (whether or
not incorporated) or vice versa, or from one subsidiary, partnership, joint venture
or other affiliate to another or (b) a leave of absence duly authorized in writing
by the Company, provided the employee’s right to re-employment is guaranteed either
by statute or by contract, shall not be deemed a termination of employment under the
Plan, notwithstanding the foregoing, from and after a Change of Control, as defined
in paragraph 20, Options and stock appreciation rights shall continue to be
exercisable for three months after a Participant’s termination of employment.

     16. Stock Appreciation Rights. Stock appreciation rights may be granted separate from any Option granted under the Plan to any
Participant. Such stock appreciation rights may be exercised by a Participant by written notice of
intent to exercise the stock appreciation rights delivered to the Committee, which notice shall
state the number of shares of stock in respect of which the stock appreciation rights are being
exercised. Upon such exercise, the Participant shall be entitled to receive the economic value of
such stock appreciation rights determined in the manner described in subparagraph (b) of this
paragraph 16 and in the form prescribed in subparagraph (c) of this paragraph 16.

     Stock appreciation rights shall be subject to terms and conditions not inconsistent with other
provisions of the Plan as shall be determined by the Committee, which shall include the following:

	 	(a)	 	Stock appreciation rights granted in connection with the surrender of an Option
shall be exercisable or transferable at such time or times and only to the extent that
the Option to which they related was exercisable or transferable. The Committee shall
have complete authority to determine the terms and conditions applicable to other stock
appreciation rights, including the periods applicable to such rights, limitations on
exercise and the number of shares of stock in respect to which such stock appreciation
rights are exercisable.

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	 	(b)	 	Upon the exercise of stock appreciation rights, a Participant shall be entitled
to receive the economic value thereof, which value shall be equal to the excess of the
fair market value of one share of Common Stock on the date of exercise over the grant
price per share, multiplied by the number of shares in respect of which the stock
appreciation rights shall have been exercised. Stock appreciation rights which have
been so exercised shall no longer be exercisable in respect of such number of shares.
	 
	 	(c)	 	The Committee shall have the sole discretion either (i) to determine the form
in which payment of such economic value will be made (i.e., cash, stock, or any
combination thereof) or (ii) to consent to or disapprove the election of the
Participant to receive cash in full or partial payment of such economic value.
	 
	 	(d)	 	The exercise of stock appreciation rights by a Participant pursuant to the Plan
may be made only at such times as are permitted by Rule 16b-3 of the Securities
Exchange Act of 1934, without liabilities, or such other securities laws or rules as
may be applicable.
	 
	 	(e)	 	Stock appreciation rights shall be exercisable only when the fair market value
of the Common Stock to which the stock appreciation rights relate exceeds the grant
price of such stock appreciation rights.

     17. Adjustment Provisions. In the event of any change in the shares of the Common Stock of the
Company by reason of a declaration of a stock dividend (other than a stock dividend declared in
lieu of an ordinary cash dividend), spin-off, merger, consolidation recapitalization, or split-up,
combination or exchange of shares, or otherwise, the aggregate number and class of shares available
under this Plan (including the per Participant limit on awards in Section 6), the number and class of shares
subject to each outstanding Option and stock appreciation right, the option price for shares
subject to each outstanding Option, and the option price or grant price and economic value of any
stock appreciation rights shall be appropriately adjusted by the Committee, whose determination
shall be conclusive. Unless the Committee determines otherwise, any such adjustment to an award
that is exempt from Code Section 409A shall be made in manner that permits the award to continue to
be so exempt, and any adjustment to an award that is subject to Code Section 409A shall be made in
a manner that complies with the provisions thereof. Notwithstanding the foregoing, in the case of
a stock dividend (other than a stock dividend declared in lieu of an ordinary cash dividend) or
split-up (including a reverse stock split), if no action is taken by the Committee, adjustments
contemplated by this subsection that are proportionate shall nevertheless automatically be made as
of the date of such stock dividend or split-up.

     18. Termination and Amendment of Plan. The Plan shall terminate on December 31, 2009, unless
sooner terminated as hereinafter provided. The Board of Directors may at any time terminate the
Plan, or amend the Plan as it shall deem advisable including (without limiting the generality of
the foregoing) any amendments deemed by the Board of Directors to be necessary or advisable to
assure conformity of the Plan and any Incentive Stock Options granted thereunder to the
requirements of Section 422 of the Internal Revenue Code as now or hereafter in effect and to
assure conformity with any requirements of other state and

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federal laws or regulations now or hereafter in effect; provided, however, that the Board of Directors may not, without further
approval by the shareholders of the Company, amend paragraph 24 or make any modifications to the
Plan which, by applicable law, require such approval. No termination or amendment of the Plan may,
without the consent of the Participant to whom any Option or stock appreciation rights shall have
been granted, adversely affect the rights of such Participant under such Option or stock
appreciation rights. The Board of Directors may also, in its discretion, permit any Option or
stock appreciation right to be exercised prior to the earliest date fixed for exercise thereof
under the Option Agreement. Notwithstanding the foregoing, the Board specifically reserves the
right to amend the provisions of Sections 20 and 21 prior to the effective date of a Change of
Control without the need to obtain the consent of the Participants or any other individual with a
right to an award granted hereunder. Notwithstanding the foregoing, unless determined otherwise by
the Board or Committee, any such amendment shall be made in a manner that will enable an award
intended to be exempt from Code Section 409A to continue to be so exempt, or to enable an award
intended to comply with Code Section 409A to continue to so comply.

     19. Rights of a Shareholder. A Participant shall have no rights as a shareholder with respect to
shares covered by his or her Option until the date of issuance of the stock to the participant and
only after such shares are fully paid or with respect to stock appreciation rights. No adjustment
will be made for dividends or other rights for which the record date is prior to the date such
stock is issued.

     20. Change of Control. Notwithstanding the foregoing, upon Change of Control, all previously granted Options and stock
appreciation rights shall immediately become exercisable to the full extent of the original grant.
For purposes of this Plan, a “Change of Control” means any of the following events: (i) the
acquisition, other than from the Company, by any individual, entity or group (within the meaning of
Section 13(d) or 14(d)(2) of the Securities Exchange Act of 1934, as amended from time to time)
(the “Exchange Act”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 20% or more of either (A) the then outstanding shares of common stock of the
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 “Company Voting Securities”), provided, however, that any acquisition by (x) the
Company of any of its subsidiaries, or any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its subsidiaries or (y) any corporation with respect to which,
following such acquisition, more than 60% of respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Common Stock and Company Voting
Securities immediately prior to such acquisition in substantially the same proportion as their
ownership, immediately prior to such acquisition of the Outstanding Company Common Stock and
Company Voting Securities, as the case may be, shall not constitute a change in control of the
Company; or (ii) individuals who, as of September 28, 1994, constitute the Board of Directors of
the Company (the “Incumbent Board”) cease for any reason to constitute at least a majority of the
Board, provided that any individual becoming a director subsequent to September 28, 1994, whose
election or nomination for election by the Company’s shareholders

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was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the Directors of the Company (as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act); or (iii) approval by the
shareholders of the Company of consummation of a reorganization, merger or consolidation (a
“Business Combination”), in each case, with respect to which all or substantially all of the of the
individuals and entities who were the respective beneficial owners of the Outstanding Company
Common Stock and Company Voting Securities immediately prior to such Business Combination do not,
following such Business Combination, beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of directors, as the case
may be, of the corporations resulting from such Business Combination in substantially the same
proportion as their ownership immediately prior to such Business Combination or the Outstanding
Company Common Stock and Company Voting Securities, as the case may be; or (iv) (A) a complete
liquidation or dissolution of the company or a (B) sale or other disposition of all or
substantially all of the assets of the Company other than to a corporation with respect to which,
following such sale or disposition, more than 60% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors is then owned beneficially, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Company Voting Securities
immediately prior to such sale or disposition in substantially the same proportion as their
ownership of the Outstanding Company Common Stock and Company Voting Securities, as the case may
be, immediately prior to such sale or disposition.

     21. Termination of Awards. Notwithstanding the foregoing, upon a Change in Control, the Committee
may in its discretion, commencing at the time of a Change in Control and continuing for a period of
sixty days thereafter, cancel each outstanding Option or stock appreciation right in exchange for a
cash payment to the holder thereof in an amount equal to the number of Options or stock
appreciation rights that have not been exercised multiplied by the excess of the fair market value
per Share on the date of the Change in Control (or, if the Change in Control is the result of a
transaction or a series of transactions described in paragraphs (i) or (ii) of the definition of
Change in Control and the Option or stock appreciation right is cancelled on the date of the Change
in Control, the highest price per Share paid in such transaction or series of transactions on the
date of the Change in Control) over the exercise price of the Option or the grant price of the
stock appreciation right, as the case may be.

     22. Governing Law and Arbitration. The Plan, and all awards hereunder, and all determinations made
and actions taken pursuant to the Plan, shall be governed by the internal laws of the State of
Wisconsin (without reference to conflict of law principles thereof) and construed in accordance
therewith, to the extent not otherwise governed by the laws of the United States or as otherwise
provided hereinafter. Notwithstanding anything to the contrary herein, if any individual brings a
claim that relates to benefits under this Plan, regardless of the basis of the claim (including but
not limited to wrongful discharge or Title VII discrimination), such claim shall be settled by
final binding arbitration in accordance with the rules of the

10

 

American Arbitration Association (“AAA”) and the following provisions, and judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof.

	 	(a)	 	Initiation of Action. Arbitration must be initiated by serving or
mailing a written notice of the complaint to the other party. Normally, such written
notice should be provided to the other party within one year (365 days) after the day
the complaining party first knew or should have known of the events giving rise to the
complaint. However, this time frame may be extended if the applicable statute of
limitation provides for a longer period of time. If the complaint is not properly
submitted within the appropriate time frame, all rights and claims that the complaining
party has or may have against the other party shall be waived and void. Any notice
sent to the Company shall be delivered to:

Office of General Counsel

Johnson Controls, Inc.

5757 North Green Bay Avenue

P.O. Box 591

Milwaukee, WI 53201-0591

	 	 	 	The notice must identify and describe the nature of all complaints asserted and the
facts upon which such complaints are based. Notice will be deemed given according
to the date of any postmark or the date of time of any personal delivery.
	 
	 	(b)	 	Compliance with Personnel Policies. Before proceeding to arbitration
on a complaint, the claimant must initiate and participate in any complaint resolution
procedure identified in the Company’s or subsidiary’s personnel policies. If the
claimant has not initiated the complaint resolution procedure before initiating
arbitration on a complaint, the initiation of the arbitration shall be deemed to begin
the complaint resolution procedure. No arbitration hearing shall be held on a
complaint until any applicable Company or subsidiary complaint resolution procedure has
been completed.
	 
	 	(c)	 	Rules of Arbitration. All arbitration will be conducted by a single
arbitrator according to the Employment Dispute Arbitration Rules of the AAA. The
arbitrator will have authority to award any remedy or relief that a court of competent
jurisdiction could order or grant including, without limitation, specific performance
of any obligation created under the award or policy, the awarding of punitive damages,
the issuance of any injunction, costs and attorney’s fees to the extent permitted by
law, or the imposition of sanctions for abuse of the arbitration process. The
arbitrator’s award must be rendered in a writing that sets forth the essential findings
and conclusions on which the arbitrator’s award is based.
	 
	 	(d)	 	Representation and Costs. Each party may be represented in the
arbitration by an attorney or other representative selected by the party. The Company
or subsidiary shall be responsible for its own costs, the AAA filing fee and all other
fees, costs and expenses of the arbitrator and AAA for administering the arbitration.
The claimant shall be responsible for his attorney’s or representative’s fees, if any.

11

 

	 	 	 	However, if any party prevails on a statutory claim which allows the prevailing party
costs and/or attorneys’ fees, the arbitrator may award costs and reasonable attorneys’
fees as provided by such statute.
	 
	 	(e)	 	Discovery; Location; Rules of Evidence. Discovery will be allowed to
the same extent afforded under the Federal Rules of Civil Procedure. Arbitration will
be held at a location selected by the Company. AAA rules notwithstanding, the
admissibility of evidence offered at the arbitration shall be determined by the
arbitrator who shall be the judge of its materiality and relevance. Legal rules of
evidence will not be controlling, and the standard for admissibility of evidence will
generally be whether it is the type of information that responsible people rely upon in
making important decisions.
	 
	 	(f)	 	Confidentiality. The existence, content or results of any arbitration
may not be disclosed by a party or arbitrator without the prior written consent of both
parties. Witnesses who are not a party to the arbitration shall be excluded from the
hearing except to testify.

     23. Unfunded Plan. This Plan shall be unfunded. No person shall have any rights greater than
those of a general creditor of the Company.

     24. Repricing. Except for adjustments pursuant to paragraph 17, neither the per share Option price
for any outstanding Option granted under the Plan nor the per share grant price for stock
appreciation rights granted under the Plan may be decreased after the date of grant nor may an
outstanding Option or stock appreciation right granted under the Plan or a Prior Plan be
surrendered to the Company as consideration for the grant of a new Option or stock appreciation
right with a lower exercise or grant price.

     25. Termination for Cause or Inimical Conduct. Notwithstanding any provisions of the Plan or an
award agreement to the contrary, a Participant’s Option or stock appreciation right shall be
immediately cancelled and forfeited, regardless of vesting, and any pending exercises shall be
cancelled, on the date that: (a) the Company or subsidiary terminates the Participant’s employment
for Cause, (b) the date that the Committee determines that the Participant’s employment could have
been terminated for Cause if the Company or subsidiary had all relevant facts in its possession as
of the date of the Participant’s termination, or (c) the Committee determines the Participant has
engaged in Inimical Conduct. The Committee may suspend all exercises or delivery of cash or
shares (without liability for interest thereon) pending its determination of whether the
Participant has been or should have been terminated for Cause or has engaged in Inimical Conduct.
For purposes hereof:

	 	(a)	 	“Cause” means: (1) if the Participant is subject to an employment agreement
that contains a definition of “cause,” such definition, or (2) otherwise, any of the
following as determined by the Committee: (a) violation of the provisions of any
employment agreement, non-competition agreement, confidentiality agreement, or similar
agreement with the Company or subsidiary, or the Company’s or subsidiary’s code of
ethics, as then in effect, (b) conduct rising to the level of gross negligence or
willful misconduct in the course of employment with the

12

 

	 	 	 	Company or subsidiary, (c) commission of an act of dishonesty or disloyalty involving the Company or subsidiary,
(d) violation of any federal, state or local law in connection with the Participant’s
employment, or (e) breach of any fiduciary duty to the Company or a subsidiary.
	 
	 	(b)	 	”Inimical Conduct” means any act or omission that is inimical to the best of
interests of the Company or any subsidiary, as determined by the Committee in its sole
discretion, including but not limited to: (1) violation of any employment, noncompete,
confidentiality or other agreement in effect with the Company or any subsidiary, (2)
taking any steps or doing anything which would damage or negatively reflect on the
reputation of the Company or a subsidiary, or (3) failure to comply with applicable laws relating to trade secrets, confidential information
or unfair competition.

     26. Offset. The Company shall have the right to offset, from any amount payable or stock
deliverable hereunder, any amount that the Participant owes to the Company or any subsidiary
without the consent of the Participant or any individual with a right to the Participant’s award.

     27. Severability. In the event any provision of the Plan or any award agreement is held illegal or
invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the
Plan or such award agreement, and the Plan or award agreement shall be construed and enforced as if
the said illegal or invalid provision had not been included.

     28. Code Section 409A. The provisions of Code Section 409A are incorporated herein by reference to
the extent necessary for any award that is subject to Code Section 409A to comply therewith.
Notwithstanding any provisions of the Plan, the Company does not guarantee to any Participant or
any other person with an interest in an award that any award intended to be exempt from Code
Section 409A shall be so exempt, nor that any award intended to comply with Code Section 409A shall
so comply, nor will the Company or any affiliate indemnify, defend or hold harmless any individual
with respect to the tax consequences of any such failure.

13EX-10(W)

Exhibit 10.W

JOHNSON CONTROLS, INC.

ANNUAL INCENTIVE PERFORMANCE PLAN

ARTICLE 1.

PURPOSE AND DURATION

          Section 1.1.  Purpose. The purpose of the Johnson Controls, Inc. Annual Incentive
Performance Plan is to motivate key employees of the Company and its Affiliates who have the prime
responsibility for the operations of the Company and its Affiliates to achieve performance
objectives measured on an annual basis, which is intended to result in increased value to the
shareholders of the Company.

          Section 1.2.  Duration. The Plan was originally effective October 1, 2005. The
Plan is amended and restated effective as of January 1, 2008. The Plan will remain in effect until
terminated pursuant to Article 11.

ARTICLE 2.

DEFINITIONS AND CONSTRUCTION

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

          (a) “Administrator” means, with respect to executive officers of the Company, the Committee,
and with respect to all other key employees, the Chief Executive Officer of the Company.

          (b) “Affiliate” has the meaning ascribed to such term in Rule 12b-2 promulgated under the
Exchange Act, or any successor rule or regulation thereto.

          (c) “Annual Performance Award” means an opportunity granted to a Participant to receive a
payment of cash based in whole or part on the extent to which one or more Performance Goals for one
or more Performance Measures are achieved for the Performance Period, subject to the conditions
described in the Plan and that the Administrator otherwise imposes.

          (d) “Base Salary” of a Participant means the annual rate of base pay in effect for such
Participant as of the last day of the Performance Period (or such other date as the Administrator
may specify by action taken at the time of grant of an Annual Performance Award).

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

          (f) “Beneficiary” means the person or persons entitled to receive any amounts due to a
Participant in the event of the Participant’s death as provided in Article 8.

          (g) “Cause” means: (1) if the Participant is subject to an employment agreement that contains
a definition of “cause”, such definition, or (2) otherwise, any of the

 

 

following as determined by the Administrator: (A) violation of the provisions of any employment agreement, non-competition
agreement, confidentiality agreement, or similar agreement with the Company or an Affiliate, or the
Company’s or an Affiliate’s code of ethics, as then in effect, (B) conduct rising to the level of
gross negligence or willful misconduct in the course of employment with the Company or an
Affiliate, (C) commission of an act of dishonesty or disloyalty involving the Company or an
Affiliate, (D) violation of any federal, state or local law in connection with the Participant’s
employment, or (E) breach of any fiduciary duty to the Company or an Affiliate.

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

          (i) “Company” means Johnson Controls, Inc., a Wisconsin corporation, and any successor thereto
as provided in Article 14.

          (j) “Committee” means the Compensation Committee of the Board, which shall consist of not less
than two (2) members of the Board each of whom is a “non-employee director” as defined in
Securities and Exchange Commission Rule 16b-3(b)(3), or as such term may be defined in any
successor regulation under Section 16 of the Securities Exchange Act of 1934, as amended. In
addition, each member of the Committee shall be an outside director within the meaning of Code
Section 162(m).

          (k) “Exchange Act” means the Securities Exchange Act of 1934, as amended. Any reference to a
particular provision of the Exchange Act shall be deemed to include any successor provision
thereto.

          (l) “Excluded Items” means any gains or losses from the sale of assets outside the ordinary
course of business, any gains or losses from discontinued operations, any extraordinary gains or
losses, the effects of accounting changes, any unusual, nonrecurring, transition, one-time or
similar items or charges, the diluted impact of goodwill on acquisitions, and any other items
specified by the Administrator; provided that, for Annual Performance Awards intended to qualify as
performance-based compensation under Code Section 162(m), the Administrator shall specify the
Excluded Items in writing at the time the Annual Performance Award is made unless, after
application of the Excluded Items, the amount payable under the Annual Performance Award is
reduced.

          (m) “Inimical Conduct” means any act or omission that is inimical to the best interests of the
Company or any Affiliate, as determined by the Administrator in its sole discretion, including but
not limited to: (1) violation of any employment, noncompete, confidentiality or other agreement in
effect with the Company or any Affiliate, (2) taking any steps or doing anything which would damage
or negatively reflect on the reputation of the Company or an Affiliate, or (3) failure to comply
with applicable laws relating to trade secrets, confidential information or unfair competition.

          (n) “Participant” means a key employee of the Company or an Affiliate who has been selected by
the Administrator to participate in the Plan.

2

 

          (o) “Performance Measures” means the following categories (in all cases after taking into
account any Excluded Items, as applicable), including in each case any measure based on such
category:

	 	(1)	 	Basic earnings per common share for the Company on a
consolidated basis.
	 
	 	(2)	 	Diluted earnings per common share for the Company on a
consolidated basis.
	 
	 	(3)	 	Total shareholder return.
	 
	 	(4)	 	Net sales.
	 
	 	(5)	 	Cost of sales.
	 
	 	(6)	 	Gross profit.
	 
	 	(7)	 	Selling, general and administrative expenses.
	 
	 	(8)	 	Operating income.
	 
	 	(9)	 	Income before interest and/or the provision for income taxes.
	 
	 	(10)	 	Net income.
	 
	 	(11)	 	Accounts receivables.
	 
	 	(12)	 	Inventories.
	 
	 	(13)	 	Return on equity.
	 
	 	(14)	 	Return on assets.
	 
	 	(15)	 	Return on capital.
	 
	 	(16)	 	Economic value added, or other measure of profitability that
considers the cost of capital employed.
	 
	 	(17)	 	Net cash provided by operating activities.
	 
	 	(18)	 	Net increase (decrease) in cash and cash equivalents.
	 
	 	(19)	 	Customer satisfaction.
	 
	 	(20)	 	Market share.
	 
	 	(21)	 	Product quality.

3

 

          The Performance Measures described in items (4) through (21) may be measured (A) for the
Company on a consolidated basis, (B) for any one or more Affiliates or divisions of the Company
and/or (C) for any other business unit or units of the Company or an Affiliate as defined by the
Administrator at the time of selection.

          In addition, with respect to Annual Performance Awards that are not intended to comply with
Code section 162(m), the Administrator may designate other categories, including categories
involving individual performance and subjective targets, not listed above.

          (p) “Performance Goal” means the level(s) of performance for a Performance Measure that must
be attained in order for a payment to be made under an Annual Performance Award, and/or to
determine the amount of such payment based on the Performance Scale.

          (q) “Performance Period” means a period of one fiscal year or less of the Company or an
Affiliate as selected by the Administrator.

          (r) “Performance Scale” means, with respect to a Performance Measure, a scale from which the
level of achievement may be calculated for any given level of actual performance for such
Performance Measure. The Performance Scale may be a linear function, a step function, a
combination of the two, or any other manner of measurement as determined by the Administrator.

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

          (t) “Retirement” means termination of employment from the Company and its Affiliates (without
Cause) on or after attainment of age fifty-five (55) with at least ten (10) years of vesting
service or age sixty-five (65) with at least five (5) years of vesting service (such vesting
service to be determined within the meaning of the Johnson Controls Pension Plan or such other plan
or methodology prescribed by the Administrator).

          (u) “Total and Permanent Disability” means the Participant’s inability to perform the material
duties of his or her occupation as a result of a medically-determinable physical or mental
impairment which can be expected to result in death or which has lasted or can be expected to last
for a period of at least twelve (12) months, as determined by the Administrator. The Participant
will be required to submit such medical evidence or to undergo a medical examination by a doctor
selected by the Administrator as the Administrator determines is necessary in order to make a
determination hereunder.

          Section 2.2.  Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein includes the feminine, the plural includes the singular,
and the singular the plural.

          Section 2.3.  Severability. In the event any provision of the Plan is held illegal or invalid for any reason, the illegality
or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the said illegal or invalid provision had not been included.

4

 

ARTICLE 3.

ELIGIBILITY

          Section 3.1.  Selection of Participants. The Administrator shall select the key
employees of the Company or an Affiliate for participation in the Plan. No employee shall have any
right to receive an Annual Performance Award in any year even if an Annual Performance Award has
been previously granted in prior years. In general, it is expected that the Administrator will
determine which key employees are to receive an Annual Performance Award prior to, or within the
first ninety (90) days of, the first day of the applicable Performance Period.

          Section 3.2.  Termination of Approval. Until the earlier of the end of a
Performance Period or a Participant’s termination of employment, the Administrator may at any time
withdraw its approval for a Participant’s participation in the Plan. In the event of the
Administrator’s withdrawal of approval, the employee concerned shall cease to be a Participant as
of the date selected by the Administrator, the employee’s Annual Performance Awards shall be
cancelled, and the employee shall not be entitled to any payment under those Annual Performance
Awards unless the Administrator determines otherwise. If payment is approved by the Administrator
notwithstanding the withdrawal of approval, the payment shall be made in accordance with Section
5.2, subject to Section 5.3, after the end of the Performance Period, and the payment amount shall
equal the award amount calculated under Section 5.1, reduced in such manner or by such amount (if
at all) as determined in the sole discretion of the Administrator. A Participant shall be notified
of the Administrator’s withdrawal of its approval for the Participant’s participation in the Plan
as soon as practicable following such action.

          Section 3.3.  Transfers In, Out and Between Eligible Positions.

          (a) Notwithstanding Section 3.1, if a key employee is hired or promoted into a position that
is eligible for an Annual Performance Award, the Administrator may (1) select such key employee as
a Participant at any time during the course of a Performance Period, (2) take action resulting in a
key employee’s receipt of an additional Annual Performance Award, where, with respect to a
particular Performance Period already in progress, the key employee is currently a Participant in
the Plan and already has an Annual Performance Award for that Performance Period, or (3) change the
Performance Goals, Performance Measures, Performance Scale or potential award amount under an
Annual Performance Award that is already in effect; provided that the Administrator may not apply
the discretion described in clause (3) with regard to any Annual Performance Award that is intended
to qualify as performance-based compensation under Code Section 162(m). The Administrator may, but
is not required to, prorate the amount that would have otherwise been payable to the Participant
under such Annual Performance Award had the Participant been employed during the entire Performance Period to
reflect the Participant’s actual period of employment during the Performance Period.

          (b) If a Participant is demoted during a Performance Period, the Administrator may decrease
the potential award amount of any Annual Performance Award the Participant may be eligible to
receive, or revise the Performance Goals, Performance Measures or Performance Scale applicable to
the Participant (provided that any such revision as applied to an individual who is a covered
employee under Code Section 162(m) may result only in a reduction of the amount that would have
otherwise been payable absent such revision), as the Administrator

5

 

determines is necessary to reflect the Participant’s demotion, or the Administrator may withdraw its approval for the
Participant’s participation in the Plan in accordance with Section 3.2.

          (c) If a Participant is transferred from employment by the Company to the employment of an
Affiliate, or vice versa, the Administrator may revise the Participant’s Annual Performance Award
to reflect the transfer, including but not limited to, changing the potential award amount,
Performance Measures, Performance Goals and Performance Scale applicable to the Participant
(provided that any such revision as applied to an individual who is a covered employee under Code
Section 162(m) may result only in a reduction of the amount that would have otherwise been payable
absent such revision).

          Section 3.4.  Termination of Employment.

          (a) Except as otherwise provided under the terms of an employment or severance agreement
between a Participant and the Company, no Participant shall earn an incentive award for a
Performance Period unless the Participant is employed by the Company or an Affiliate (or is on an
approved leave of absence) on the last day of such Performance Period, unless the Participant’s
employment was terminated during the year as a result of Retirement, Total and Permanent Disability
or death at a time when the Participant could not have been terminated for Cause, or unless payment
is approved by the Administrator after considering the cause of the Participant’s termination. If
payment is approved by the Administrator, the payment shall be made in accordance with Section 5.2,
subject to Section 5.3, after the end of the Performance Period, and the payment amount shall equal
the award amount calculated under Section 5.1, reduced in such manner or by such amount (if at all)
as determined in the sole discretion of the Administrator.

          (b) If a Participant’s employment is terminated as a result of death, Total and Permanent
Disability or Retirement, at a time when the Participant could not have been terminated for Cause,
then unless otherwise determined by the Administrator, the Participant (or the Participant’s
Beneficiary or estate in the event of his or her death) shall be entitled to receive an amount
equal to the product of (x) the award amount calculated under Section 5.1 and (y) a fraction, the
numerator of which is the number of the Participant’s whole calendar months of employment during
the Performance Period for such award and the denominator of which is the number of calendar months
in the Performance Period for such award. Payment shall be made in accordance with Section 5.2,
subject to Section 5.3.

ARTICLE 4.

CONTINGENT ANNUAL PERFORMANCE AWARDS

          The Administrator shall determine, at the time an Annual Performance Award is granted, the
Performance Period, the Performance Measure(s), the Performance Goal(s) for such Performance
Measure, the Performance Scale (which may vary for different Performance Measures), and the amount
payable to the Participant if and to the extent the Performance Goals are met (as measured under
the Performance Scale). The amount payable to a Participant for meeting the Performance Goal(s)
may be designated as a flat dollar amount or as a percentage of the Participant’s Base Salary, or
may be determined by any other means specified by the Administrator at the time the Annual
Performance Award is granted.

6

 

ARTICLE 5.

PAYMENT

          Section 5.1.  Evaluating Performance and Computing Awards.

          (a) As soon as practicable following the close of a Performance Period, the Administrator
shall determine and certify whether and to what extent the Performance Goals and other material
terms of the Annual Performance Award for that Performance Period were satisfied, and shall
determine whether any discretionary adjustments under Subsection (b) shall be made. Based on such
certification, the Administrator (or its delegate) shall determine the award amount payable to a
Participant under the Annual Performance Award for that Performance Period, provided that the
maximum award amount for any Participant shall be, with respect to any and all Annual Performance
Awards of such Participant with Performance Periods covering (or ending within) the same fiscal
year of the Company, no more than six million dollars ($6,000,000).

          (b) The Administrator may adjust each Participant’s potential award amount under any Annual
Performance Award, based upon overall individual performance and attainment of goals, as follows:

	 	(1)	 	With respect to Participants who are subject to Code Section
162(m), the amount of the Annual Performance Award may be reduced by as much as
twenty percent (20%); and
	 
	 	(2)	 	With respect to all other Participants, based upon the
recommendation of the Participant’s supervisor and approval by the Chief
Executive Officer of the Company, the amount of the Annual Performance Award
may be increased by up to a maximum of twenty percent (20%) or reduced by a
maximum of twenty percent (20%).

          Section 5.2.  Timing and Form of Payment. When the payment due to the Participant
has been determined, unless otherwise deferred pursuant to a Participant’s election under the
Company’s deferred compensation plan, payment shall be made in a cash lump sum by the
75th day following the close of the Performance Period.

          Section 5.3.  Inimical Conduct. Notwithstanding the foregoing, after the end of
the Performance Period for which a payment for an Annual Performance Award has accrued, but before
payment or deferral of such amount actually occurs, if the Participant engages in Inimical Conduct,
or if the Company determines after a Participant’s termination of employment that the Participant
could have been terminated for Cause, the Annual Performance Award shall be automatically cancelled
and no payment or deferral shall be made. The Administrator may suspend payment or deferral
(without liability for interest thereon) pending the Administrator’s determination of whether the
Participant was or should have been terminated for Cause or whether the Participant has engaged in
Inimical Conduct.

7

 

ARTICLE 6.

CHANGE OF CONTROL

          Section 6.1.  Acceleration of Payment. Notwithstanding any other provision of
this Plan, within thirty (30) days after a Change of Control (as defined below), the Company shall
pay each Participant, with respect to each Annual Performance Award of the Participant, a lump sum
payment in cash equal to the product of (x) such Participant’s maximum potential award amount for
the Performance Period(s) in which the Change of Control occurs, as specified in the Annual
Performance Award and (y) a fraction, the numerator of which is the number of days after the first
day of the Performance Period on which the Change of Control occurs and the denominator of which is
the number of days in the Performance Period. If, however, the Participant has a deferral election
in effect with respect to any amount payable under this Section 6.1, such amount shall be deferred
pursuant to such election and shall not be paid in a lump sum as provided herein.

          Notwithstanding the foregoing, with respect to amounts payable to a Participant (or the
Participant’s Beneficiary or estate) who is entitled to a payment hereunder because the
Participant’s employment terminated as a result of death or Disability, or payable to a Participant
who has met the requirements for Retirement (without regard to whether the Participant has
terminated employment), no payment shall be made unless the Change of Control (as defined below)
also constitutes a change of control within the meaning of Code Section 409A.

          Section 6.2.  Definition of Change of Control. A “Change of Control” means any of
the following events:

          (a) The acquisition, other than from the Company, by any individual, entity or group of
beneficial ownership (within the meaning of Rule l3d-3 promulgated under the Exchange Act), including in connection with a merger, consolidation or reorganization, of more
than either:

	 	(1)	 	Fifty percent (50%) of the then outstanding shares of common
stock of the Company (the “Outstanding Company Common Stock”) or
	 
	 	(2)	 	Thirty-five percent (35%) of the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Company Voting Securities”),

provided, however, that any acquisition by (x) the Company or any of its subsidiaries, or any
employee benefit plan (or related trust) sponsored or maintained by the Company or any of its
subsidiaries or (y) any corporation with respect to which, following such acquisition, more than
sixty percent (60%) of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and Company Voting
Securities immediately prior to such acquisition in substantially the same proportion as their
ownership, immediately prior to such acquisition, of the Outstanding Company Common

8

 

Stock and Company Voting Securities, as the case may be, shall not constitute a Change in Control of the
Company; or

          (b) Individuals who, as of October 1, 2005, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board during any twelve (12)-month period,
provided that any individual becoming a director subsequent to October 1, 2005, whose election or
nomination for election by the Company’s shareholders was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board, shall be considered as though such individual
were a member of the Incumbent Board; or

          (c) A complete liquidation or dissolution of the Company or sale or other disposition of all
or substantially all of the assets of the Company other than to a corporation with respect to
which, following such sale or disposition, more than sixty percent (60%) of, respectively, the then
outstanding shares of common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors is then owned beneficially,
directly or indirectly, by all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and Company Voting
Securities immediately prior to such sale or disposition in substantially the same proportion as
their ownership of the Outstanding Company Common Stock and Company Voting Securities, as the case
may be, immediately prior to such sale or disposition. For purposes hereof, “a sale or other
disposition of all or substantially all of the assets of the Company” will not be deemed to have
occurred if the sale involves assets having a total gross fair market value of less than forty
percent (40%) of the total gross fair market value of all assets of the Company immediately prior
to the acquisition. For this purpose, “gross fair market value” means the value of the assets
without regard to any liabilities associated with such assets.

          For purposes of this Section 6.2, persons will not be considered to be acting as a “group”
solely because they purchase or own stock of the Company at the same time, or as a result of the
same public offering. However, persons will be considered to be acting as a “group” if they are
owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock,
or similar business transaction with the Company. If a person, including an entity, owns stock in
the Company and any other corporation that enters into a merger, consolidation, purchase or
acquisition of stock, or similar transaction, such shareholder is considered to be acting as a
group with other shareholders in such corporation only with respect to the ownership in that
corporation prior to the transaction giving rise to the change and not with respect to the
ownership interest in the Company.

ARTICLE 7.

ADJUSTMENTS

          In the event of any change in the outstanding shares of Company Common Stock by reason of any
stock dividend or split, recapitalization, reclassification, merger, consolidation or exchange of
shares or other similar corporate change, then if the Administrator shall determine, in its sole
discretion, that such change necessarily or equitably requires an adjustment in the Performance
Goals established under an Annual Performance Award, such adjustments shall be made by the
Administrator and shall be conclusive and binding for all purposes of this Plan. No adjustment
shall be made in connection with the issuance by the Company of any

9

 

warrants, rights, or options to acquire additional shares of Common Stock or of securities convertible into Common Stock.

ARTICLE 8.

BENEFICIARY

          If permitted by the Company, a Participant may designate a Beneficiary by filing a beneficiary
designation on the form provided by the Administrator. In such event, if the Participant dies
prior to receiving any payment due hereunder, such payment shall be made to the Participant’s
Beneficiary. If, however, the Participant has an effective deferral election in place for such
amount under the Company’s deferred compensation plan, then the amount shall be deferred and paid
in accordance with that plan. A Participant entitled to file a beneficiary designation may change
his beneficiary designation at any time, provided that each beneficiary designation form filed with
the Company shall revoke the most recent form on file, and the last form received by the Company
while the Participant was alive shall be given effect. In the event there is no valid beneficiary
designation form on file, or in the event the Participant’s designated Beneficiary is not alive at
the time payment is to be made, or in the event a Participant is not entitled to file a beneficiary
designation, the Participant’s estate will be deemed the Beneficiary and will be entitled to
receive payment. If a Participant designates his spouse as a beneficiary, such beneficiary
designation automatically shall become null and void on the date of the Participant’s divorce or
legal separation from such spouse; provided the Administrator has notice of such divorce or legal
separation prior to payment.

ARTICLE 9.

RIGHTS OF PARTICIPANTS

          Section 9.1.  No Funding. No Participant or Beneficiary shall have any interest
in any fund or in any specific asset or assets of the Company (or any Affiliate) by reason of any
Annual Performance Award under the Plan. It is intended that the Company has merely a contractual
obligation to make payments when due hereunder and it is not intended that the Company (or any
Affiliate) hold any funds in reserve or trust to secure payments hereunder.

          Section 9.2.  No Transfer. No Participant may assign, pledge, or encumber his
interest under the Plan, or any part thereof, except that a Participant may designate a Beneficiary
as provided herein.

          Section 9.3.  No Implied Rights; Employment. Nothing contained in this Plan shall
be construed to:

          (a) Give any employee or Participant any right to receive any award other than in the sole
discretion of the Administrator;

          (b) Limit in any way the right of the Company or an Affiliate to terminate a Participant’s
employment at any time; or

          (c) Be evidence of any agreement or understanding, express or implied, that a Participant will
be retained in any particular position or at any particular rate of remuneration.

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ARTICLE 10.

ADMINISTRATION

          Section 10.1.  General. The Plan shall be administered by the Administrator. If
at any time the Committee shall not be in existence, the Board shall assume the Committee’s
functions and each reference to the Committee herein shall be deemed to include the Board.

          Section 10.2.  Authority. In addition to the authority specifically provided
herein, the Administrator shall have full power and discretionary authority to: (a) administer the
Plan, including but not limited to the power and authority to construe and interpret the Plan; (b)
correct errors, supply omissions or reconcile inconsistencies in the terms of the Plan or any
Annual Performance Award; (c) establish, amend or waive rules and regulations, and appoint such
agents, as it deems appropriate for the Plan’s administration; and (d) make any other
determinations, including factual determinations, and take any other action as it determines is
necessary or desirable for the Plan’s administration.

          Section 10.3.  Delegation of Authority. The Administrator may delegate to one or
more officers of the Company any or all of the authority and responsibility of the Administrator,
except that the Committee may not delegate any authority with respect to Annual Performance Awards
that are intended to comply with Code Section 162(m). If the Administrator has made such a
delegation, then all references to the Administrator in this Plan include such officer(s) to the
extent of such delegation.

          Section 10.4.  Decision Binding. The Administrator’s determinations and decisions
made pursuant to the provisions of the Plan and all related orders or resolutions of the Board
shall be final, conclusive and binding on all persons who have an interest in the Plan or an Annual
Performance Award, and such determinations and decisions shall not be reviewable.

          Section 10.5.  Procedures of the Committee. The Committee’s determinations must
be made by not less than a majority of its members present at the meeting (in person or otherwise)
at which a quorum is present, or by written majority consent, which sets forth the action, is
signed by each member of the Committee and filed with the minutes for proceedings of the Committee.
A majority of the entire Committee shall constitute a quorum for the transaction of business.
Service on the Committee shall constitute service as a director of the Company so that the
Committee members shall be entitled to indemnification, limitation of liability and reimbursement
of expenses with respect to their Committee services to the same extent that they are entitled
under the Company’s By-laws and Wisconsin law for their services as directors of the Company.

ARTICLE 11.

AMENDMENT AND TERMINATION

          Section 11.1.  Amendment. The Committee may modify or amend, in whole or in part,
any or all of the provisions of the Plan, and may suspend the Plan, and the Employee Benefits
Policy Committee (or any successor committee thereto) of the Company may modify or amend the Plan
for ministerial or administrative changes or to conform the terms of the Plan to the requirements
of applicable law; provided that, any such amendment or modification shall be

11

 

approved by the Company’s shareholders to the extent required by Code Section 162(m) or other applicable law;
provided, however, that no such modification, amendment, or suspension may, without the consent of
the Participant or his or her Beneficiary in the case of the Participant’s death, reduce the right
of a Participant, or his or her Beneficiary, as the case may be, to any payment due under the Plan
except as specifically provided herein. Notwithstanding the foregoing, the Committee may amend the
provisions of Article 6 prior to the effective date of a Change of Control.

          Section 11.2.  Termination. The Committee may terminate the Plan in accordance
with the provisions of this Section 11.2. In order for the provisions of this Section 11.2 to
apply, the Committee must designate in writing that the Plan is being terminated in accordance with this Section. Upon termination of the Plan,
the Committee may provide that all amounts accrued under the Plan to the date of the Plan
termination (as determined by the Committee in its sole discretion) be paid in a lump sum, provided
that payments to a Participant (or the Participant’s Beneficiary or estate) who is entitled to a
payment hereunder because the Participant’s employment terminated as a result of death or
Disability prior to the date of such Plan termination, or amounts payable to a Participant who has
met the requirements for Retirement (without regard to whether the Participant has terminated
employment) as of the date of such Plan termination may be paid upon termination of the Plan only
in the following circumstances:

          (a) The Plan is terminated within twelve (12) months of a corporate dissolution taxed under
Code Section 331, or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A).
In such event, the payment must be paid no later than the latest of: (A) the last day of the
calendar year in which the Plan termination occurs, (B) the first calendar year in which the amount
is no longer subject to a substantial risk of forfeiture, or (C) the first calendar year in which
payment is administratively practicable.

          (b) The Plan is terminated at any other time, provided that such termination does not occur
proximate to a downturn in the financial health of the Company or an Affiliate, and all other plans
required to be aggregate with this Plan under Code Section 409A are also terminated and liquidated.
In such event, the payment shall be paid no earlier than twelve (12) months (and no later than
twenty-four (24) months) after the date of termination. Notwithstanding the foregoing, any payment
that would otherwise be paid during the twelve (12)-month period beginning on the Plan termination
date pursuant to the terms of the Plan shall be paid in accordance with such terms. In addition,
the Company or any Affiliate shall be prohibited from adopting a similar arrangement within three
(3) years following the date of the Plan’s termination

ARTICLE 12.

TAX WITHHOLDING

          The Company shall have the right to deduct from all cash payments made hereunder (or from any
other payments due a Participant) any foreign, federal, state, or local taxes required by law to be
withheld with respect to such cash payments.

12

 

ARTICLE 13.

OFFSET

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

ARTICLE 14.

SUCCESSORS

          All obligations of the Company under the Plan with respect to Annual Performance Awards
granted hereunder shall be binding on any successor or assign of the Company, whether the existence
of such successor or assign is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business
and/or assets of the Company. The Plan shall be binding upon and inure to the benefit of the
Participants, Beneficiaries, and their heirs, executors, administrators and legal representatives.

ARTICLE 15.

DISPUTE RESOLUTION

          Section 15.1.  Governing Law. This Plan and the rights and obligations hereunder
shall be governed by and construed in accordance with the internal laws of the State of Wisconsin
(excluding any choice of law rules that may direct the application of the laws of another
jurisdiction), except as provided in Section 15.2 hereof.

          Section 15.2.  Arbitration.

          (a) Application. Notwithstanding any employee agreement in effect between a
Participant and the Company or any Affiliate employer, if a Participant or Beneficiary (the
“claimant”) brings a claim that relates to benefits under this Plan, regardless of the basis of
the claim (including but not limited to, actions under Title VII, wrongful discharge, breach of
employment agreement, etc.), such claim shall be settled by final binding arbitration in accordance
with the rules of the American Arbitration Association (“AAA”) and judgment upon the award rendered
by the arbitrator may be entered in any court having jurisdiction thereof.

          (b) Initiation of Action. Arbitration must be initiated by serving or mailing a
written notice of the complaint to the other party. Normally, such written notice should be
provided the other party within one year (365 days) after the day the complaining party first knew
or should have known of the events giving rise to the complaint. However, this time frame may be
extended if the applicable statute of limitation provides for a longer period of time. If the
complaint is not properly submitted within the appropriate time frame, all rights and claims that
the complaining party has or may have against the other party shall be waived and void. Any notice
sent to the Company shall be delivered to:

Office of General Counsel

Johnson Controls, Inc.

5757 North Green Bay Avenue

13

 

P.O. Box 591

Milwaukee, WI 53201-0591

          The notice must identify and describe the nature of all complaints asserted and the facts upon
which such complaints are based. Notice will be deemed given according to the date of any postmark
or the date of time of any personal delivery.

          (c) Compliance with Personnel Policies. Before proceeding to arbitration on a
complaint, the claimant must initiate and participate in any complaint resolution procedure
identified in the Company’s or Affiliate’s personnel policies. If the claimant has not initiated
the complaint resolution procedure before initiating arbitration on a complaint, the initiation of
the arbitration shall be deemed to begin the complaint resolution procedure. No arbitration
hearing shall be held on a complaint until any applicable Company or Affiliate complaint resolution
procedure has been completed.

          (d) Rules of Arbitration. All arbitration will be conducted by a single arbitrator
according to the Employment Dispute Arbitration Rules of the AAA. The arbitrator will have
authority to award any remedy or relief that a court of competent jurisdiction could order or grant
including, without limitation, specific performance of any obligation created under policy, the
awarding of punitive damages, the issuance of any injunction, costs and attorney’s fees to the
extent permitted by law, or the imposition of sanctions for abuse of the arbitration process. The
arbitrator’s award must be rendered in a writing that sets forth the essential findings and
conclusions on which the arbitrator’s award is based.

          (e) Representation and Costs. Each party may be represented in the arbitration by an
attorney or other representative selected by the party. The Company or Affiliate shall be
responsible for its own costs, the AAA filing fee and all other fees, costs and expenses of the
arbitrator and AAA for administering the arbitration. The claimant shall be responsible for his
attorney’s or representative’s fees, if any. However, if any party prevails on a statutory claim
which allows the prevailing party costs and/or attorneys’ fees, the arbitrator may award costs and
reasonable attorneys’ fees as provided by such statute.

          (f) Discovery; Location; Rules of Evidence. Discovery will be allowed to the same
extent afforded under the Federal Rules of Civil Procedure. Arbitration will be held at a location
selected by the Company. AAA rules notwithstanding, the admissibility of evidence offered at the
arbitration shall be determined by the arbitrator who shall be the judge of its materiality and
relevance. Legal rules of evidence will not be controlling, and the standard for admissibility of
evidence will generally be whether it is the type of information that responsible people rely upon
in making important decisions.

          (g) Confidentiality. The existence, content or results of any arbitration may not be
disclosed by a party or arbitrator without the prior written consent of both parties. Witnesses
who are not a party to the arbitration shall be excluded from the hearing except to testify.

14

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