1992 Stock Option Plan
(As amended through January 1,
2007)
|
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. 1992 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 along with Options issued pursuant to the Plan
and, subject to certain limitations, 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
effective date of the Plan is the date of its adoption by the Board
of Directors, September 23, 1992, subject to the approval of
the Plan by the shareholders of the Company within twelve months of
the effective date. Any and all Options granted prior to such
approval shall be subject to such approval.
|
|
|
|
|
|
4.
|
|
Stock Subject to the
Plan. Subject
to adjustment in accordance with the provisions of paragraph 19,
the total number of shares of the common stock of the Company
(“Common Stock”), available for awards during the term
of this Plan shall not exceed 7,591,758 shares. 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 of the Company
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 18) in connection with the receipt of stock
appreciation rights as
|
|
|
|
provided in paragraph 18A 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 separate and apart from Options (including any grant in
connection with the surrender of outstanding Options), as provided
in paragraph 18A, 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.
|
|
|
|
|
|
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 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 and stock appreciation rights shall be granted, the
type of Options, the Option periods, limitations on Option
exercise, and the number of shares to be subject to each Option. 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.
|
2
|
|
|
(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.
|
|
|
|
|
|
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 500,000 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.
|
|
|
|
|
|
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.
|
|
|
|
|
|
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 for stock appreciation rights granted under
paragraph 18, and the per share grant price for stock appreciation
rights granted under paragraph 18A, 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
|
3
|
|
|
stock appreciation right granted
under paragraph 18A upon the surrender of any outstanding Option,
on the date of grant of such Option). The fair market value of a
share of stock on any date shall be the average of the highest and
lowest market prices of sales of the Common Stock on that date, or
on the next preceding trading day if such date was not a trading
day as reported on the New York Stock Exchange or as otherwise
determined by the Committee. However, effective January 1,
2007, 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.
|
|
|
|
|
|
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 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
|
4
|
|
|
|
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; Deferral of
Shares.
|
|
|
|
|
|
|
|
(a) The Committee shall
prescribe the manner in which a Participant may exercise an Option
which is not inconsistent with the provisions of this Plan. 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
|
|
