JOHNSON CONTROLS, INC.
OPTION AWARD
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Number of
Options: ####
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Expiration
Date: mm/dd/yyyy
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Exercisable
Date: mm/dd/yyyy
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Option
Exercise Price: $$.$$
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2006
Stock Option Grant — Terms for Nonqualified Stock Options and
Stock Appreciation Rights
Johnson
Controls, Inc., a Wisconsin corporation with its principal office
in Milwaukee, Wisconsin, (the “Company”) has adopted
the 2000 Stock Option Plan (the “Plan”) to permit
options to purchase shares of the Company’s common stock
(“Stock”) to be granted to certain key employees of the
Company or any Subsidiary, as defined in Section 425(f) of the
Internal Revenue Code of 1986, as amended
(“Subsidiary”). The individual (the
“Optionee”) is a key employee of the Company or a
Subsidiary, and the Company desires the Optionee to remain in such
employ by providing the Optionee with a means to acquire or to
increase his/her proprietary interest in the Company’s
success.
NOW, THEREFORE,
in consideration of the premises and of the covenants and
agreements herein set forth, the parties hereby mutually covenant
and agree as follows:
1. Subject to
the terms and conditions of the Plan, a copy of which has been made
available to the Optionee and made a part hereof, and this
Agreement, the Company grants to the Optionee:
a) In the case of
a Nonqualified Stock Option, right to purchase from the Company all
or any part of an aggregate number of shares of Stock. (Hereinafter
such shares of Stock are referred to as the “Optioned
Shares” and the option to purchase the Optioned Shares is
referred to as the “Option”). The Option is intended to
constitute a “nonqualified stock option” or an option
for “stock appreciation rights.”
b) The purchase
price payable upon exercise of the Nonqualified Stock Option shall
be the option exercise price per share indicated in the Optionee
notification, subject to adjustment as described in the terms of
the Plan.
c) An Option
granted for Stock Appreciation Rights entitles the Optionee to
receive the economic value of such stock appreciation rights
determined in the manner prescribed in the Plan document,
Paragraph 16, subparagraph (b), and in the form prescribed in
Paragraph 16, subparagraph (c).
2. Subject to
the terms and conditions of the Plan and this Agreement, the Option
may be exercised by the Optionee while in the employ of the Company
or any Subsidiary, in whole or in part in increments of 100 shares
or more, from time to time, subject to the vesting dates and
expiration date. The vesting schedule of the option is as
follows:
(a) Fifty
Percent (50%) of the Option shall vest on the two-year anniversary
date of the Grant Date.
(b) Fifty
Percent (50%) of the Option shall vest on the three-year
anniversary date of the Grant Date.
The Option shall
expire ten years from the Option Grant Date.
3. The Option
may be exercised only by written notice, delivered, faxed or mailed
to the Shareholder Services Department of the Company in Milwaukee,
Wisconsin, specifying the number of Optioned Shares being
purchased. Such notice shall be accompanied by payment of the
entire option price of the Optioned Shares being purchased:
(i) in cash or its equivalent; (ii) by tendering
previously acquired shares of Stock valued at their fair market
value at the time of
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exercise; or
(iii) by any combination of (i) and (ii). For purposes of
this paragraph, fair market value shall be determined in the same
manner as the fair market value of the Stock on the Grant Date was
determined pursuant to the Plan document.
An Optionee
selected by the Compensation Committee to participate in the
Deferral Plan may defer receipt of shares of Common Stock
deliverable upon exercise by making a deferral election as set
forth in the Johnson Controls Stock Option Deferral Policies and
Procedures.
4. (a) It
shall be a condition of the obligation of the Company to issue or
transfer shares of Stock upon exercise of the Option, and that the
Optionee pay to the Company upon its demand, such amount as may be
requested by the Company for the purpose of satisfying its
liability to withhold federal, state or local income or other taxes
incurred by reason of the exercise of the Option. If the amount
requested is not paid, the Company may refuse to issue or transfer
shares of Stock upon exercise of the Option.
(b) The
Optionee shall be permitted to satisfy the Company’s
withholding tax requirements by electing (the
“Election”) to have the Company withhold shares of
Stock otherwise issuable to the Optionee or to deliver to the
Company shares of Stock having a fair market value on the date
income is recognized pursuant to the exercise of the Option (the
“Tax Date”) equal to the minimum amount required to be
withheld by the Optionee. If the number of shares of Stock
determined pursuant to the preceding sentence shall include a
fractional share, the number of shares withheld or delivered shall
be reduced to the next lower whole number and the Optionee shall
deliver to the Company cash in lieu of such fractional share, or
otherwise make arrangements satisfactory to the Company for payment
of such amount.
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i.
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The
Election must be received by the Shareholder Services Department of
the Company, at its principal office, prior to the Optionee’s
Tax Date.
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ii.
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The
Election shall be irrevocable, and shall be subject to disapproval,
in whole or in part, by the Committee. The Election shall be made
in writing and shall be made according to such rules and
regulations and in such form as the Committee shall
determine.
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5. (a) In
the event a Participant’
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