Document:

exv10wb

 

Exhibit 10.B

JOHNSON CONTROLS, INC.

COMMON STOCK PURCHASE PLAN FOR EXECUTIVES

as amended through November 17, 2004

Section 1

Purpose

The purpose of this Plan is to establish an employee benefit plan in the form
of a stock purchase plan to facilitate the acquisition of Company Stock by
those executives subject to the Executive Stock Ownership Policy previously
adopted by the Board of Directors and as amended from time to time, and to make
such purchases eligible for an exemption from Section 16 of the Securities
Exchange Act of 1934 (the “Act”) under Rule 16b-3(c) under the Act.

Section 2

Effective Date and Termination Date

	 	 	 
	2.1

	 	The Plan is adopted March 28, 2001 and shall be effective as of October 1, 2000.
	 
	 	 
	2.2

	 	This Plan shall remain in effect until terminated by the Board of Directors.

Section 3

Definitions

	 	 	 
	3.1

	 	The “Board” is the Board of Directors of the Company.
	 
	 	 
	3.2

	 	The “Company” is Johnson Controls, Inc., a Wisconsin corporation, and any successor thereto that adopts the Plan.
	 
	 	 
	3.3

	 	The “Automatic Dividend Reinvestment and Common Stock Purchase Plan” is a separate stock purchase plan for employees of the Company other than those
officers or key executives subject to the Company’s Executive Stock Ownership Policy.
	 
	 	 
	3.4

	 	“Company Stock” shall mean the common stock of the Company.
	 
	 	 
	3.5

	 	The “Plan” is the Johnson Controls, Inc., Common Stock Purchase Plan for Executives.
	 
	 	 
	3.6

	 	A “Participant” is an officer or key executive of the Company or a subsidiary who has elected to participate in the Plan.

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Exhibit 10.B

JOHNSON CONTROLS, INC.

COMMON STOCK PURCHASE PLAN FOR EXECUTIVES

as amended through November 17, 2004

Section 4

Eligibility

	 	 	 
	4.1

	 	All officers and key executives of the Company or a subsidiary subject to the Company’s Executive Stock Ownership Policy, and only such officers and
key executives, may participate in the Plan. All other employees of the Company who reside in the United States, Canada, or Puerto Rico and have
reached the age of majority in their respective states, provinces, or territories may participate in the Automatic Dividend Reinvestment and
Common Stock Purchase Plan without complying with the requirements of this
Plan.

Section 5

Incorporation of

the Automatic Dividend Reinvestment

and Common Stock Purchase Plan

	 	 	 
	5.1

	 	The terms and conditions of the Automatic Dividend Reinvestment and Common Stock Purchase Plan, as may be amended from time to time, are
hereby incorporated as terms and conditions of the Plan, provided that in the event of a conflict between the Automatic Dividend Reinvestment and
Common Stock Purchase Plan and the Plan, the terms and conditions set forth herein shall control.

Section 6

Administration

	 	 	 
	6.1

	 	Administration of the Plan, except as otherwise provided herein, shall be the same as, and shall be conducted as part of, the administration of the
Automatic Dividend Reinvestment and Common Stock Purchase Plan for the Company, as set forth in JCI Publication 8777 (Rev. 3/93), or any
successor plan thereto. The Company’s transfer agent and registrar is responsible for the administration of the Plan, subject to the supervision
and control of the Compensation Committee of the Board of Directors of the Company.
	 
	 	 
	6.2

	 	Prior to participating in the Plan, a Participant shall enter into a written agreement with the Company in which the Participant shall agree
(1) that any derivative security related to the Plan shall not be transferable other than by will or descent or pursuant to a qualified
domestic relations order, and (2) that the Participant shall notify the Company of any open-market transaction in Company Stock or derivative
securities of the Company no later than the third business day of the month immediately following such transaction.
	 
	 	 
	6.3

	 	The price of each share of the Company Stock purchased under the Plan

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Exhibit 10.B

JOHNSON CONTROLS, INC.

COMMON STOCK PURCHASE PLAN FOR EXECUTIVES

as amended through November 17, 2004

	 	 	 
	

	 	shall be 100% of the average price of shares purchased by the administrator of the Plan as agent for the Participants. Participants
will be charged fees and/or commissions in connection with the purchase of shares of Common Stock to the extent the Automatic Dividend
Reinvestment and Common Stock Purchase Plan contemplates such fees or commissions in connection with the purchase of shares of Company Stock
by other employees. Funds representing cash dividends (both on stock held in the name of the Participant and on any full or fractional
shares held under the Plan) will be applied to the purchase of Company Stock under the Plan on the cash dividend payment date or as soon as
practicable thereafter, in the same manner and pursuant to the same terms and conditions, including fees and/or commissions, as apply to
purchases of shares of Company Stock by other employees under the Automatic Dividend Reinvestment and Common Stock Purchase Plan.
	 
	 	 
	6.4

	 	Except for a Participant’s initial election to purchase shares under the Plan, the purchase of shares by a Participant pursuant to payroll
deduction, an increase of amounts deducted from pay, the termination of payroll deductions, the sale of shares, or the closure of the account
shall be made only pursuant to an irrevocable election made by the Participant at least six months in advance of the designated transaction.
	 
	 	 
	6.5

	 	Participants that terminate payroll deductions, sell shares, or close accounts shall be prohibited from participating again in the Plan until
six months after such transaction. Because any sale or other disposition of Company Stock under the Plan or any purchase under the Plan made other
than by normal payroll deductions is not exempt from Section 16 of the Act, such a transaction must be reported on a Form 4 by the tenth day of
the month immediately following such transaction and may subject a Participant to Section 16 short-swing profit liability.
	 
	 	 
	6.6

	 	The maximum amount that may be deducted from a Participant’s pay each month shall be $2,500.
	 
	 	 
	6.7

	 	The Company shall bear the expenses of administering the Plan.

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Exhibit 10.B

JOHNSON CONTROLS, INC.

COMMON STOCK PURCHASE PLAN FOR EXECUTIVES

as amended through November 17, 2004

Section 7

Miscellaneous

	 	 	 
	7.1

	 	The Board of Directors of the Company or the Compensation Committee of the Board of Directors may amend the Plan from time to time; however, any
amendments requiring approval of the shareholders of the Company pursuant to Rule 16b-3 of the Securities and Exchange Act of 1934 shall be
effective only upon such shareholder approval.
	 
	 	 
	7.2

	 	This Plan shall be construed, administered and governed in all respects in accordance with the federal securities laws and regulations and rules
promulgated thereunder and the laws of the State of Wisconsin.
	 
	 	 
	7.3

	 	Except when otherwise indicated by the context, any masculine terminology used herein shall also include the feminine gender, and the definition of
any term herein in the singular shall also include the plural.

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EXHIBIT 10.I

JOHNSON CONTROLS, INC.

EQUALIZATION BENEFIT PLAN

ARTICLE 1.

PURPOSE AND DURATION

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

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

ARTICLE 2.

DEFINITIONS AND CONSTRUCTION

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

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

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

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

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

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

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

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

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

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

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

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

     (l) “Participant” means an officer of the Company or a subsidiary who is a
participant in both the Incentive Plan and in the Retirement Plan or the
Savings Plan, and whose benefits under the Company’s pension or savings plans
are limited as described in Section 1.1. Where the context so requires, a
Participant also means a former employee entitled to receive a benefit
hereunder.

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

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

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

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

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

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

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

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

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

ARTICLE 3.

ADMINISTRATION

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

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

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

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Section 3.4. Procedures for Administration. The Committee’s
determinations must be made by not less than a majority of its members present
at the meeting (in person or otherwise) at which a quorum is present, or by
written majority consent, which sets forth the action, is signed by the members
of the Committee and filed with the minutes for proceedings of the Committee.
A majority of the entire Committee shall constitute a quorum for the
transaction of business. Service on the Committee shall constitute service as
a director of the Company so that the Committee members shall be entitled to
indemnification, limitation of liability and reimbursement of expenses with
respect to their Committee services to the same extent that they are entitled
under the Company’s By-laws and Wisconsin law for their services as directors
of the Company. The Administrator’s determinations shall be made in accordance
with procedures it establishes.

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

ARTICLE 4.

RETIREMENT PLAN SUPPLEMENT

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

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

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

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

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

ARTICLE 5.

SAVINGS PLAN SUPPLEMENT

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

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

Section 5.3. Investment Election. Amounts credited to a Participant’s
Savings Supplement Account shall reflect the investment experience of the
Investment Options selected by the Participant. The Participant may make an
initial investment election at the time of enrollment in the Plan (or with
respect to a Participant who has a Savings Supplement Account balance on the
restatement effective date, within such period of time after such effective
date as is specified by the Administrator) in whole increments of one percent
(1%). A Participant may also elect to reallocate his or her Savings Supplement
Account, and may elect to allocate any future deferrals, among the various
Investment Options in whole increments of one percent (1%) from time to time as
prescribed by the Administrator. Such investment elections shall remain in
effect until

37

 

changed by the Participant. All investment elections shall become
effective as soon as practicable after receipt of such election, and must be
made in the form and manner and within such time periods as the Administrator
may prescribe in order to be effective. In the absence of an effective
election, the Participant’s Savings Supplement Account shall be deemed invested
in the default fund under the Savings Plan. Deferrals will be deemed invested
in an Investment Option as of the date on which the deferrals are allocated
pursuant to Section 5.1.

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

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

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

Section 5.5. Payment of Benefits.

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

     (b) A distribution election shall be effective only when it is received
and approved by the Administrator, and shall remain in effect until modified by
the Participant. A Participant may from time to time modify his distribution
election by completing a revised distribution election, in such form and manner
and within such time periods as the Administrator may

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prescribe. The Administrator may refuse to honor a distribution election that is not completed
in the manner and in such time as is prescribed by the Administrator. If no
valid election is in effect, distributions shall be made in ten (10) annual
installments.

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

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

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

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

39

 

time is less than $50,000 during the
payout period, the remaining balance shall immediately be paid in
the form of a lump sum.

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

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

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

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EQUALIZATION BENEFIT PLAN ACCOUNTS

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

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

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

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

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

ARTICLE 6.

NON-ALIENATION OF PAYMENTS

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

41

 

ARTICLE 7.

LIMITATION OF RIGHTS AGAINST THE COMPANY

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

ARTICLE 8.

AMENDMENT OR TERMINATION

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

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

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

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

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

42

 

ARTICLE 9.

SPECIAL RULES APPLICABLE IN THE EVENT OF A

CHANGE OF CONTROL OF THE COMPANY

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

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

     (a) The acquisition, other than from the Company, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either:

(1) The then outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or

(2) The combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the “Company Voting Securities”)

          provided, however, that any acquisition by (x) the Company or any of its
subsidiaries, or any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its subsidiaries or (y) any corporation
with respect to which, following such acquisition, more than 60% of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then
beneficially owned directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Company Voting Securities immediately
prior to such acquisition in substantially the same proportion as their
ownership, immediately prior to such acquisition, of the Outstanding Company
Common Stock and Company Voting Securities, as the case may be, shall not
constitute a Change of Control; or

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

43

 

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

     (c) Consummation of a reorganization, merger or consolidation (a “Business
Combination”), in each case, with respect to which all or substantially all of
the individuals and entities who were the respective beneficial owners of the
Outstanding Company Common Stock and Company Voting Securities immediately
prior to such Business Combination do not, following such Business Combination,
beneficially own, directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the corporation resulting from such
Business Combination in substantially the
same proportion as their ownership immediately prior to such Business
Combination of the Outstanding Company Common Stock and Company Voting
Securities, as the case may be; or

     (d) A complete liquidation or dissolution of the Company or sale or other
disposition of all or substantially all of the assets of the Company other than
to a corporation with respect to which, following such sale or disposition,
more than 60% of, respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors is then owned beneficially,
directly or indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Company Voting Securities immediately prior to such
sale or disposition in substantially the same proportion as their ownership of
the Outstanding Company Common Stock and Company Voting Securities, as the case
may be, immediately prior to such sale or disposition.

Section 9.3. Maximum Payment Limitations.

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

44

 

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

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

ARTICLE 10.

ERISA PROVISIONS

Section 10.1. Claims Procedures.

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

45

 

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

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

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

ARTICLE 11.

TAX WITHHOLDING

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

ARTICLE 12.

OFFSET

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

ARTICLE 13.

SUCCESSORS

          All obligations of the Company under the Plan shall be binding on any
successor to the Company, whether the existence of such successor is the result
of a direct or indirect

46

 

purchase, merger, consolidation or otherwise, of all or
substantially all of the business and/or assets of the Company.

ARTICLE 14.

DISPUTE RESOLUTION

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

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

Section 14.3. Arbitration.

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

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

Office of General Counsel

Johnson Controls, Inc.

5757 North Green Bay Avenue

P.O. Box 591

Milwaukee, WI 53201-0591

47

 

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

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

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

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

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

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

48

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