JOHNSON CONTROLS, INC.
1992 Stock Option Plan
(Adjusted to reflect 3-for-1 stock split effective
September 14, 2007)
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1.
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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.
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2.
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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.
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3.
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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, and was most recently
amended effective January 1, 2009. The Plan was approved by the
shareholders of the Company within twelve months of the adoption
date. Any and all Options granted prior to such adoption were
granted subject to shareholder approval.
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4.
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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 22,775,274 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
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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.
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5.
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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.
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(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.
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(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.
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6.
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Eligibility. Options and stock appreciation
rights may be granted to officers and other key employees of the
Company and of any of its present and future subsidiaries. The
maximum number of shares of Common Stock covered by Options which
may be granted to any Participant within any two consecutive
calendar year periods shall not exceed 1.5 million shares in
the aggregate. No Option or stock appreciation right shall be
granted to any person who owns, directly or indirectly, shares of
stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company. A director of the Company
or of a subsidiary who is not also an employee of the Company or of
a subsidiary will not be eligible to receive any Option or stock
appreciation right hereunder.
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7.
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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.
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8.
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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.
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9.
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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
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appreciation rights are granted (or,
if the Committee so determines, in the case of any stock
appreciation right granted under paragraph 18A upon the surrender
of any outstanding Option, on the date of grant of such Option).
Fair market value means, per share of stock on a particular date,
the closing sales price on such date on the New York Stock
Exchange, or if no sales of stock occur on the date in question, on
the last preceding date on which there was a sale on such market.
If the shares not listed on the New York Stock Exchange, but are
traded on a national securities exchange or in an over-the-counter
market, the closing sales price (or if there is no closing sales
price reported, the average of the closing bid and asked prices)
for the shares on the particular date, or on the last preceding
date on which there was a sale of shares on that exchange or
market, will be used. If the shares are neither listed on a
national securities exchange nor traded in an over-the-counter
market, the price determined by the Committee, in its discretion,
will be used. However, in connection with an exercise of Options,
to the extent the Participant sells any shares acquired upon such
exercise in a market transaction on the date of exercise, the sale
price(s) for any such shares shall be the fair market value of such
shares.
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10.
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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.
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11.
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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.
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12.
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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:
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(a)
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by
will or by the laws of descent and distribution; or
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(b)
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in
the case of a nonqualified option:
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(i)
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pursuant to a “Qualified
Domestic Relations Order” as defined in Section 414(p) of the
Internal Revenue Code; or
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(ii)
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to
(A) his or her spouse, children or grandchildren
(“Immediate Family Members”), (B) a partnership in
which the only partners are the Participant’s Immediate
Family Members, or (C) a trust or trusts established solely
for the benefit of one or more of the Participant’s Immediate
Family Members (collectively, the Permitted Transferees), provided
that there may be no consideration for any such transfer by a
Participant
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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.
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13.
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Exercise of Option; Deferral of
Shares.
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(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) writte
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