Exhibit 10.S
JOHNSON CONTROLS, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
ARTICLE 1.
PURPOSE AND DURATION
Section 1.1.
Purpose . The Johnson Controls, Inc. Executive Deferred
Compensation Plan (the “Plan”) permits certain
employees of the Company and its Affiliates to defer amounts
otherwise payable or shares deliverable under separate bonus or
equity plans or programs maintained by the Company or an
Affiliate.
Section 1.2.
Duration . The Plan was originally effective on
October 1, 2001, as a consolidation of the deferral features
of various separate plans. The Plan is amended and restated
effective as of January 1, 2008. The Plan shall remain in
effect until terminated by the Board pursuant to
Section 9.6.
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. 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) “Act” means the
Securities Act of 1933, 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 Act shall be
deemed to include reference to any successor provision
thereto.
(c) “Administrator”
means the Employee Benefits Policy Committee of the Company.
(d) “Affiliate”
means each entity that is required to be included in the
Company’s controlled group of corporations within the meaning
of Code Section 414(b), or that is under common control with
the Company within the meaning of Code Section 414(c);
provided that for purposes of determining when a Participant has
incurred a Separation from Service, the phrase “at least 50
percent” shall be used in place of the phrase “at least
80 percent” in each place that phrase appears in the
regulations issued thereunder.
(e) “Beneficiary”
means the person(s) or entity(ies) designated by a Participant to
be his beneficiary for purposes of this Plan as provided in
Section 9.2.
(f) “Board” means
the Board of Directors of the Company.
(g) “Change of
Control” has the meaning ascribed in Section 8.3.
(h) “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.
(i) “Committee”
means the Compensation Committee of the Board, which shall consist
of not less than two members of the Board, each of whom is also a
director of the Company and qualifies as a “non-employee
director” for purposes of Rule 16b-3 of the Exchange
Act.
(j) “Company” means
Johnson Controls, Inc., and its successors as provided in
Section 9.8.
(k) “Deferral” means
the amount credited, in accordance with a Participant’s
election or as required by the Plan, to the Participant’s
Account in lieu of the payment in cash thereof, or the issuance of
Shares with respect thereto. Deferrals include the following:
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(1) |
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Annual Incentive Deferrals: A deferral of all or a portion of a
Participant’s performance cash award under the Johnson
Controls, Inc. Annual Incentive Performance Plan (or any successor
plan thereto) and, with the consent of the Administrator, any other
annual bonus plan maintained by the Company or an Affiliate. |
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(2) |
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Long-Term Incentive Deferrals: A deferral of all or a portion
of a Participant’s performance cash award under the Johnson
Controls, Inc. Long-Term Incentive Performance Plan (or any
successor plan thereto) and, with the consent of the Administrator,
any other multi-year bonus plan maintained by the Company or an
Affiliate. |
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(3) |
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Share Deferrals: On or before December 31, 2007, a
deferral of the Shares that would have otherwise been issued to a
Participant in the form of restricted stock under any plan of the
Company providing for the grant of restricted stock. Effective
January 1, 2008, Share Deferrals are not permitted under the
Plan. |
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(4) |
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Deferred Restricted Stock Dividends: A deferral of the
dividends paid on restricted shares granted under any plan of the
Company while such shares are subject to a period of
restriction. |
(l) “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.
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(m) “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.
(n) “Fair Market
Value” means with respect to a Share, except as otherwise
provided herein, the closing sales price 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.
(o) “Investment
Options” means the investment options offered under the
Johnson Controls Savings and Investment (401k) Plan (excluding the
Company stock fund) or any successor plan thereto, the Share 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.
(p) “Participant”
means an employee of the Company or any Affiliate who is employed
in the United States and is participating in the Company’s
Stock Ownership Program, and any other employee of the Company or
any Affiliate who is selected for participation under a Company or
Affiliate plan described in paragraph (k) and who is offered
the ability (or is required) to make Deferrals hereunder.
Notwithstanding the foregoing, the Committee shall limit the
foregoing group of eligible employees to a select group of
management and highly compensated employees, as determined by the
Committee in accordance with ERISA. Where the context so requires,
a Participant also means a former employee entitled to receive a
benefit hereunder.
(q) “Plan Year”
means the fiscal year of the Company.
(r) “Separation from
Service” means a Participant’s cessation of service for
the Company and all Affiliates within the meaning of Code
Section 409A, including the following rules:
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(1) |
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If a Participant takes a leave of absence from the Company or
an Affiliate for purposes of military leave, sick leave or other
bona fide leave of absence, the Participant’s employment will
be deemed to continue for the first six (6) months of the
leave of absence, or if longer, for so long as the
Participant’s right to reemployment is provided by either by
statute or by contract; provided that if the leave of absence is
due to the Participant’s medically determinable physical or
mental impairment that can be expected to result in death or can be
expected to last for a continuous period of six (6) months or more,
and such impairment causes the Participant to be unable to perform
the duties of his position with the Company or an Affiliate or a
substantially similar position of employment, then the leave period
may be extended for up to a total of twenty-nine (29) months. If
the period of the leave exceeds the time periods set forth above
and the Participant’s right to reemployment is not provided
by either |
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statute or contract, the Participant will be considered to have
incurred a Separation from Service on the first day following the
time periods set forth above. |
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(2) |
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A Participant will be presumed to have incurred a Separation
from Service when the level of bona fide services performed by the
Participant for the Company and its Affiliates permanently
decreases to a level equal to 20% or less of the average level of
services performed by the Participant for the Company or its
Affiliates during the immediately preceding thirty-six (36) month
period (or such lesser period of service). |
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(3) |
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The Participant will be presumed not to have incurred a
Separation from Service while the Participant continues to provide
bona fide services to the Company or an Affiliate in any capacity
(whether as an employee or independent contractor) at a level that
is at least 50% or more of the average level of services performed
by the Participant for the Company or its Affiliates during the
immediately preceding thirty-six (36) month period (or such
lesser period of service). |
(s) “Share” means a
share of common stock of the Company.
(t) “Share Unit
Account” means the account described in Article 7, which
is deemed invested in Shares.
(u) “Share Units”
means the hypothetical Shares that are credited to the Share Unit
Account in accordance with Article 7.
(v) “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 use
in the singular or the plural, they shall be construed as though
they were used in the plural or the singular, as the case may be,
in all cases where they would so apply. Titles of articles and
sections are for general information only, and the Plan is not to
be construed by reference to such items.
Section 2.3.
Severability . In the event any provision of the Plan is
held illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining parts of the Plan, and
the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included.
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ARTICLE 3.
PARTICIPATION
Section 3.1.
Effective Date . Each individual for whom an Account is
maintained under the Plan as of December 31, 2007, shall
continue in participation hereunder on January 1, 2008.
Section 3.2. New
Participants . Each employee of the Company or an Affiliate
shall automatically become a Participant on the date he makes (or
is deemed to make) a deferral election under Article 4.
ARTICLE 4.
DEFERRALS OF COMPENSATION
Section 4.1. Annual
Incentive Deferrals . A Participant may elect during the first
180 days of the performance period for which an annual
incentive award is made, to have all or a part of the amount
payable under his annual incentive award (but not less than $1,000)
deferred under this Plan. A Participant’s election to defer
an annual incentive award payment shall be effective only for the
award to which the election relates, and shall not carry over from
award to award. Notwithstanding the foregoing, if the Administrator
determines that an annual incentive award does not qualify as
performance-based compensation within the meaning of Code
Section 409A, or determines that at the time of the election
described above the compensation payable under such award will be
readily ascertainable, then the Administrator may specify an
earlier election period consistent with the requirements of Code
Section 409A. As of the end of the election period, the
Participant’s deferral election shall be irrevocable except
as provided in Section 4.4.
Section 4.2.
Long-Term Incentive Deferrals . A Participant may elect
during the first 180 days of the performance period for which
a long-term incentive award is made, to have all or a part of the
amount payable under his long-term incentive award (but not less
than $1,000) deferred under this Plan. A Participant’s
election to defer a long-term incentive payment shall be effective
only for the award to which the election relates, and shall not
carry over from award to award. Notwithstanding the
foregoing:
(a) if the Administrator
determines that a long-term incentive award qualifies as
performance-based compensation within the meaning of Code
Section 409A and that at the time of the election no portion
of the compensation payable under such award will be readily
ascertainable, the Administrator may specify a later election
period, which in all events must be prior to the first day of the
final year of the performance period for such award (whether a
calendar year or the fiscal year of the Company or an Affiliate, as
applicable), or
(b) if the Administrator
determines that a long-term incentive award does not qualify as
performance-based compensation within the meaning of Code
Section 409A, or determines that at the time of the election
described above the compensation payable under such award will be
readily ascertainable, then the Administrator may specify an
earlier election period consistent with the requirements of Code
Section 409A. .
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As of the end of the election period,
the Participant’s deferral election shall be irrevocable
except as provided in Section 4.4.
Section 4.3. Deferral
of Dividends on Restricted Stock . All cash dividends paid with
respect to restricted stock granted by the Company to a Participant
while such stock is subject to a period of restriction shall be
automatically deferred as Deferred Restricted Stock Dividends.
Deferred Restricted Stock Dividends shall be subject to the same
risk of forfeiture as the restricted shares to which such Deferrals
relate.
Section 4.4.
Cancellation of Deferral Elections . If the Administrator
determines that a Participant’s deferral elections must be
cancelled in order for the Participant to receive a hardship
distribution under the Johnson Controls Savings and Investment
(401k) Plan (or any successor plan thereto), or any other 401(k)
plan maintained by the Company or an Affiliate, the
Participant’s deferral election(s) shall be cancelled if
permitted under Code Section 409A. A Participant whose
deferral election(s) are cancelled pursuant to this
Section 4.4 may make a new deferral election under
Sections 4.1 or 4.2, and pursuant to the requirements of Code
Section 409A, with respect to future incentive awards, unless
otherwise prohibited by the Administrator.
Section 4.5.
Administration of Deferral Elections . All deferral
elections must be made in the form and manner and within such time
periods as the Administrator prescribes in order to be
effective.
ARTICLE 5.
HYPOTHETICAL INVESTMENT OPTIONS
Section 5.1.
Investment Election . Amounts credited to a
Participant’s Account shall reflect the investment experience
of the Investment Options selected by the Participant, provided
that Deferred Restricted Stock Dividends shall be automatically
deemed invested in the Share Unit Account. The Participant may make
an initial investment election at the time of enrollment in the
Plan in whole increments of one percent (1%). A Participant may
also elect to reallocate his or her 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; provided that prior to
November 15, 2006, Share Deferrals and Deferred Restricted
Stock Dividends were not eligible for re-allocation out of the
Share Unit Account. On and after November 15, 2006, Share
Deferrals and Deferred Restricted Stock Dividends that are vested
may be re-allocated out of the Share Unit Account, subject to any
restrictions on re-allocation as may be imposed by the Company.
Such investment elections shall remain in effect until changed by
the Participant. All investment elections shall become effective as
soon as practicable after receipt of such election by the
Administrator, and must be made in the form and manner and within
such time periods as the Administrator prescribes in order to be
effective. In the absence of an effective election, the
Participant’s Account (to the extent the Plan does not
require Deferrals to be allocated to the Share Unit Account) shall
be deemed invested in the default fund specified for the Johnson
Controls Inc. Savings and Investment (401k) Plan (or any successor
plan thereto).
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On each Valuation Date, the
Administrator (or its designee) shall credit the deemed investment
experience with respect to the selected (or required) Investment
Options to each Participant’s Account. Notwithstanding
anything herein to the contrary, the Company retains the right to
allocate actual amounts hereunder without regard to a
Participant’s request.
Section 5.2.
Allocations to Investment Options .
(a) Incentive Deferrals
. Annual and Long-Term Incentive Deferrals will be deemed invested
in an Investment Option as of the date on which the deferrals would
have otherwise been paid to the Participant.
(b) Deferred Restricted
Stock Dividends . If a Participant is holding restricted shares
of the Company’s stock when the Company declares a cash
dividend on its Shares, the Participant’s Share Unit Account
will be credited with Deferred Restricted Stock Dividends, as of
the date the cash dividend is paid to the Company’s
shareholders. The amount of Deferred Restricted Stock Dividends
credited to the Participant’s Stock Unit Account shall be
determined by multiplying the number of restricted shares held by
such Participant on the date the dividend is declared by the amount
of the dividend paid on one Share.
Section 5.3.
Securities Law Restrictions . Notwithstanding anything to
the contrary herein, all elections under Article 5 or 6 by a
Participant who is subject to Section 16 of the Exchange Act
are subject to review by the Administrator prior to implementation.
In accordance with Section 9.3, the Administrator may restrict
additional transactions, rescind transactions, or impose other
rules and procedures, to the extent deemed desirable by the
Administrator in order to comply with the Exchange Act, including,
without limitation, application of the review and approval
provisions of this Section 5.3 to Participants who are not
subject to Section 16 of the Exchange Act.
Section 5.4. Accounts
are For Record Keeping Purposes Only . Plan Accounts and the
record keeping procedures described herein serve solely as a device
for determining the amount of benefits accumulated by a Participant
under the Plan, and shall not constitute or imply an obligation on
the part of the Company or any Affiliate to fund such
benefits.
ARTICLE 6.
DISTRIBUTION OF ACCOUNTS
Section 6.1. Form of
Distribution . A Participant, at the time he makes an initial
deferral election under the Plan pursuant to any provision of
Article 4, shall elect the form of distribution with respect
to each of the following sub-accounts:
(a) Annual Incentive Deferrals,
including interest, earnings or losses thereon.
(b) Long-Term Incentive
Deferrals, including interest, earnings or losses thereon.
On or before December 31, 2007,
the Participant shall elect the form of distribution with respect
to any Share Deferrals, as adjusted for gains or losses thereon,
that are held in the Participant’s Share Unit Account as of
that date. Notwithstanding the foregoing, if a
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Participant receives a single lump sum payment of his or her vested
Share Deferrals under the Plan, any Share Deferrals vesting after
such payment date shall be paid in a single lump sum promptly (but
not more than seventy-five (75) days) after the vesting
date.
Such election shall be made in such
form and manner as the Administrator may prescribe, and shall be
irrevocable. The election shall specify whether distributions shall
be made in a single lump sum or from two (2) to ten
(10) annual installments. In the absence of a distribution
election with respect to a particular subaccount, payment shall be
made in ten (10) annual installments.
No distribution election shall be
made with respect to Deferred Restricted Stock Dividends, which are
automatically paid in a lump sum as provided in
Section 6.2(b).
Section 6.2. Time of
Distribution .
(a) Separation from
Service . Upon a Participant’s Separation from Service
for any reason, the Participant, or his Beneficiary in the event of
his death, shall be entitled to payment of the amount accumulated
in such Participant’s Account.
(b) Payment of Deferred
Restricted Stock Dividends . Notwithstanding anything herein to
the contrary, the portion of the Participant’s Share Unit
Account that is related to Deferred Restricted Stock Dividends
shall be paid to the Participant in a lump sum within seventy-five
(75) days of the date the shares of restricted stock to which such
Deferred Restricted Stock Dividends relate vest and are no longer
subject to a period of restriction.
Section 6.3. Manner
of Distribution . The Participant’s Account shall be paid
in cash in the following manner:
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(a) |
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Lump Sum . If payment is to be made in a lump sum, |
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(1) |
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for those Participants whose Separation from Service occurs
from January 1 through June 30 of a year, payment shall be
made in the first calendar quarter of the following year, and |
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(2) |
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for those Participants whose Separation from Service occurs
from July 1 through December 31 of a year, payment shall be
made in the third calendar quarter of the following year. |
The lump sum payment shall equal the
balance of the Participant’s Account as of the Valuation Date
immediately preceding the distribution date. Notwithstanding the
foregoing, the portion of the Participant’s Share Unit
Account related to Deferred Restricted Stock Dividends shall be
paid as provided in Section 6.2(b).
(b) Installments . If
payment is to be made in annual installments, the first annual
payment shall be made:
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(1) |
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for those Participants whose Separation from Service occurs
from January 1 through June 30 of a year, in the first
calendar quarter of the following year, and |
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(2) |
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for those Participants whose Separation from Service occurs
during the period from July 1 through December 31 of a year,
in the third calendar quarter of the following year. |
The amount of the first annual
payment shall equal the value of 1/10 th (or 1/9
th ,
1/8 th
, 1/7 th , etc.
depending on the number of installments elected) of the balance of
the Participant’s Account as of the Valuation Date
immediately preceding the distribution date. All subsequent annual
payments shall be made in the first calendar quarter of each
subsequent calendar year, and shall be in an amount equal to the
value of 1/9 th (or 1/8
th ,
1/7 th
, 1/6 th , etc.
depending on the number of installments elected) of the balance of
the Participant’s Account as of the Valuation Date
immediately preceding the distribution date. The final annual
installment payment shall equal the then remaining balance of such
Account as of the Valuation Date preceding such final payment
date.
Notwithstanding the foregoing
provisions, if the balance of a Participant’s Account as of
the Valuation Date immediately preceding a distribution date is
$50,000 or less, then the entire remaining balance of the
Participant’s Account shall be paid in a lump sum on such
distribution date.
Section 6.4.
Distribution of Remaining Account Following Participant’s
Death . In the event of the Participant’s death prior to
receiving all payments due under this Article 6, the balance
of the Participant’s Account shall be paid to the
Participant’s Beneficiary in a lump sum as soon as
practicable after (but not more than ninety (90) days
following) the Participant’s death.
Section 6.5. Tax
Withholding . The Company shall have the right to deduct from
any deferral or payment made hereunder, or from any other amount
due a Participant, the amount of cash and/or Fair Market Value of
Shares sufficient to satisfy the Company’s or
Affiliate’s foreign, federal, state or local income tax
withholding obligations with respect to such deferral (or vesting
thereof) or payment. In addition, if prior to the date of
distribution of any amount hereunder, the Federal Insurance
Contributions Act (FICA) tax imposed under Code
Sections 3101, 3121(a) and 3121(v)(2), where applicable,
becomes due, the Participant’s Account balance shall be
reduced by the amount
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