<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Johnson Controls, Inc.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
Johnson Controls, Inc. LOGO
JOHNSON CONTROLS, INC.
POST OFFICE BOX 591
MILWAUKEE, WISCONSIN 53201
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, JANUARY 28, 1998
To the Shareholders of Johnson Controls, Inc.:
NOTICE IS HEREBY GIVEN that the annual meeting of the shareholders of Johnson
Controls, Inc., a Wisconsin corporation, will be held in the Superior Room,
Milwaukee Athletic Club, 758 North Broadway Street, Milwaukee, Wisconsin, on
Wednesday, January 28, 1998, at 2:00 o'clock P.M. (Central Standard Time), for
the following purposes:
(1) To elect four directors of the class to serve for a term of three years
expiring at the annual meeting to be held in 2001 or until the
director's earlier retirement;
(2) To consider and act upon a proposal to ratify the appointment of Price
Waterhouse as auditors for 1998; and
(3) To consider and act upon any other matters which may properly come
before the meeting or any adjournments thereof.
Holders of Common Stock and Preferred Stock units of record at the close of
business on November 20, 1997, will be entitled to vote at the meeting and any
adjournments thereof.
BY ORDER OF THE BOARD OF DIRECTORS,
John P. Kennedy
John P. Kennedy, Secretary
Milwaukee, Wisconsin
December 5, 1997
A PROXY FOR THE MEETING AND A PROXY STATEMENT ARE ENCLOSED HEREWITH. YOU ARE
REQUESTED TO FILL IN AND SIGN THE ENCLOSED FORM OF PROXY, WHICH IS SOLICITED BY
THE COMPANY'S BOARD OF DIRECTORS, AND TO MAIL IT PROMPTLY. SHAREHOLDERS WHO
EXECUTE PROXIES RETAIN THE RIGHT TO REVOKE THEM AT ANY TIME BEFORE THEY ARE
VOTED.
<PAGE> 3
JOHNSON CONTROLS, INC.
5757 NORTH GREEN BAY AVENUE
P.O. BOX 591
MILWAUKEE, WISCONSIN 53201
DECEMBER 5, 1997
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JANUARY 28, 1998
This proxy statement is furnished to the shareholders of Johnson Controls, Inc.
(the Company), in connection with the solicitation by the Board of Directors of
the Company of proxies for use at the annual meeting of shareholders to be held
at the Milwaukee Athletic Club at 758 North Broadway Street, Milwaukee,
Wisconsin, on January 28, 1998, at 2:00 o'clock P.M., Central Standard Time, and
any adjournments of such meeting.
Execution of a proxy given in response to this solicitation will not affect a
shareholder's right to attend the meeting and to vote in person. Presence at the
meeting of a shareholder who has signed a proxy does not alone revoke a proxy.
Any shareholder giving a proxy may revoke it at any time before it is exercised
by giving notice thereof to the Company in writing. Unless so revoked, the
shares represented by proxies will be voted at the meeting and at any
adjournments thereof. Where a shareholder specifies a choice by means of a
ballot provided in the proxy, the shares will be voted in accordance with such
specification.
Only owners of the Company's Common Stock and Preferred Stock units of record on
November 20, 1997, will be entitled to vote at the meeting. As of November 20,
1997, there were 84,101,403 shares of the Company's Common Stock outstanding,
each share having one vote. As of November 20, 1997, there were also 279.649
shares of the Company's Preferred Stock outstanding. Each share of Preferred
Stock consists of 10,000 units, each unit having two votes. On October 31, 1997,
the directors, nominees for directors, and officers of the Company as a group
were beneficial owners of 1,601,334 shares of the Company's Common Stock
(including 963,860 shares subject to options exercisable within 60 days)
constituting approximately 1.9% of the outstanding shares of Common Stock, and
11,097 units of the Company's Preferred Stock, constituting less than 1% of the
outstanding units.
Set forth below is a tabulation indicating those persons whom the management of
the Company believes to be beneficial owners of more than 5% of any class of the
Company's securities. The following information is based on reports on Schedules
13G filed with the Securities and Exchange Commission or other information
believed to be reliable.
<TABLE>
<CAPTION>
Amount and
Name and Address of Nature of Percent
Title of Class Beneficial Owner Ownership of Class
-------------------- --------------------------------- ---------- --------
<S> <C> <C> <C>
Common Stock FMR Corporation 4,575,704(1) 5.5%
$0.16 2/3 Par Value 82 Devonshire Street
Boston, MA 02109
Common Stock J.P. Morgan & Co. Incorporated 5,595,080(2) 6.7%
$0.16 2/3 Par Value 60 Wall Street
New York, N.Y. 10260
</TABLE>
1
<PAGE> 4
<TABLE>
<CAPTION>
Series D Convertible Fidelity Management Trust Company 279.970(3) 100%
Amount and
Name and Address of Nature of Percent
Title of Class Beneficial Owner Ownership of Class
-------------------- --------------------------------- ---------- --------
<S> <C> <C> <C>
Preferred Stock 82 Devonshire Street
$1.00 Par Value Boston, MA 02109
</TABLE>
----------------------------
(1) FMR Corporation's most recent report as of October 31, 1997 showed sole
voting power with respect to 270,464 shares, and sole dispositive power with
respect to 4,575,704 shares. The report includes shares beneficially owned
by Fidelity Management & Research Company, a wholly-owned subsidiary of FMR
Corp.
(2) J. P. Morgan & Co. Incorporated's most recent report as of October 31, 1997
showed sole voting power with respect to 3,612,240 shares, sole dispositive
power with respect to 5,340,580 shares, shared voting power with respect to
120,500 shares and shared power to dispose with respect to 174,900 shares.
(These numbers reflect the post March 31, 1997 stock split equivalents of
the Schedule 13G report.) The report includes shares beneficially owned by
Morgan Guaranty Trust Company of New York, J.P. Morgan Investment
Management, Inc. and J.P. Morgan Florida Federal Savings Bank.
(3) Fidelity Management Trust Company reported that as of October 31, 1997 it
held shared voting power and sole dispositive power with respect to the
shares indicated above in its capacity as trustee of the Johnson Controls,
Inc. Employee Stock Ownership Trust.
ELECTION OF DIRECTORS
The Board of Directors consists of 12 members of whom approximately one-third
are elected each year to serve for terms of three years or until the director's
earlier retirement pursuant to the Board of Directors Retirement Policy(1). It
is intended that the enclosed form of proxy will be voted for the election of
Messrs. William F. Andrews, Robert L. Barnett, Willie D. Davis and Richard F.
Teerlink, all of whom are now members of the Board, for three year terms or
until the director's earlier retirement.
Directors are elected by a plurality of the votes cast by the holders of the
Company's Common Stock and Preferred Stock units at a meeting at which a quorum
is present. "Plurality" means that the individuals who receive the largest
number of votes cast are elected as directors up to the maximum number of
directors to be chosen at the meeting. Consequently, any shares not voted
(whether by abstention, broker nonvote or otherwise) have no impact in the
election of directors except to the extent the failure to vote for an individual
results in another individual receiving a larger number of votes.
- -------------------------
(1) The Board of Directors has adopted a Retirement Policy that requires a
director to retire as of the last regular Board of Directors' meeting held
in the year of his or her 70th birthday or, in the event a shareholders'
meeting is held on that date, then such retirement shall be effective the
next day. The Retirement Policy does not apply to Mr. Brengel.
2
<PAGE> 5
The Directors Committee of the Board of Directors has no reason to believe that
any of such nominees will be unable or unwilling to serve as a director if
elected, but if any nominee should be unable or for good cause unwilling to
serve, the shares represented by proxies solicited by the Board of Directors
will be voted for the election of such other person for the office of director
as the Board of Directors may recommend in place of such nominee. Set forth
below is information with respect to the nominees and the other directors on the
Board.
<TABLE>
<S> <C>
CLASS OF 2001 (ALL OF WHOM ARE NOMINEES)
- ------------------ WILLIAM F. ANDREWS Director
since 1991
Age 66
Chairman of Schrader-Bridgeport International, Inc. and
Chairman of Scovill Fasteners Inc., since 1995. Chairman,
President and Chief Executive Officer, Amdura Corporation
from 1993-1995. President and Chief Executive Officer, UNR
Industries, Inc., Chicago, Illinois (diversified
manufacturer) from 1991 to 1993, President of Massey
Investment Company, Nashville, Tennessee (private investment
company) from 1989 to 1990, and Chairman, CEO and President
of Singer Sewing Machine Company (SSMC) Inc., Shelton,
Connecticut (diversified manufacturer) from 1986 to 1989.
Mr. Andrews is a director of Black Box Corp., Corrections
Corporation of America, Katy Industries, Navistar
International Corporation, Northwestern Steel & Wire Co.,
and Southern New England Telecommunications Corporation.
Member of Compensation and Directors Committees.
- ------------------ ROBERT L. BARNETT Director
since 1986
Age 57
Executive Vice President, Motorola Inc. and President, Land
Mobile Products Sector since April 1997. Corporate Vice
President, iDen Group, Motorola Inc., Schaumburg, Illinois,
1995 to 1997. Consultant in the field of international
communications from 1992 to 1995. Vice-Chairman, Ameritech
and President, Ameritech Bell Group, American Information
Technologies Corporation, Chicago, Illinois
(telecommunications) from 1989 to 1993 and President,
Ameritech Enterprise Group, from 1987 to 1989. Mr. Barnett
is a director of USG Corp. Member of Executive Committee and
Chairman of Directors Committee.
- ------------------ WILLIE D. DAVIS Director
since 1991
Age 63
President of All Pro Broadcasting Incorporated, Los Angeles,
California (radio broadcasting) since 1977. Mr. Davis is a
director of Alliance Bank Co., Dow Chemical Company, Kmart
Corporation, MGM Grand, Inc., Sara Lee Corporation, and
WICOR, Inc. Mr. Davis is also a director of 42 funds for
which Strong Capital Management, Inc. is the investment
adviser. Member of Audit Committee.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
<S> <C> <C>
- ------------------ RICHARD F. TEERLINK Director
since 1994
Age 61
Chairman of the Board of Harley-Davidson, Inc., Milwaukee,
Wisconsin, since May 1997, President and Chief Executive
Officer of Harley from May 1989 to June 1997, and Chairman
since May, 1996. Mr. Teerlink is a director of Firstar Bank
Milwaukee, and Snap On Inc.. Member of Audit Committee and
member of Executive Committee.
CLASS OF 2000
- ------------------ JOHN M. BARTH Director
since 1997
Age 51
Executive Vice President, Johnson Controls, Inc., Milwaukee,
Wisconsin since 1991. In 1987, Mr. Barth was named Vice
President and General Manager of the Plastics Technology
Group. In 1990, he became Vice President and General Manager
of the Plastics Technology Group and the Automotive Systems
Group. Mr. Barth is a director of Handleman Company and
Edwards Brothers.
- ------------------ PAUL A. BRUNNER Director
since 1983
Age 62
President and Chief Executive Officer, Spring Capital, Inc.,
Stamford, Connecticut (international investment management)
since 1985. President and Chief Executive Officer, ASEA,
Inc., 1982-1984. President and Chief Executive Officer,
Crouse Hinds Co., 1967-1982. Chairman of Audit Committee and
member of Compensation Committee.
- ------------------ SOUTHWOOD J. MORCOTT Director
since 1993
Age 59
Chairman since 1990, President since 1986 to 1996, and Chief
Executive Officer since 1989 of Dana Corporation, Toledo,
Ohio (vehicular and industrial component manufacturer). Mr.
Morcott is a director of CSX Corporation, Dana Corporation,
and Phelps-Dodge Corporation. Chairman of Compensation
Committee and member of Directors Committee.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
<S> <C> <C>
- ------------------ GILBERT R. WHITAKER, JR. Director
since 1986
Age 66
Dean and H. J. Nelson Professor of Business Economics, Jesse
Jones Graduate School of Administration, Rice University
since July of 1997. Professor of Business Economics,
University of Michigan, 1979 through June 1997. Provost and
Executive Vice-President for Academic Affairs, University of
Michigan, 1990-1995. Mr. Whitaker served as Dean, School of
Business Administration, University of Michigan, from 1979
to 1990. Mr. Whitaker is a director of Handleman Company,
Lincoln National Corporation, and Structural Dynamics
Research Corp. Chairman of Pension and Benefits Committee.
CLASS OF 1999
- ------------------ FRED L. BRENGEL Director
since 1964
Age 74
Chairman of the Board, Johnson Controls, Inc., Milwaukee,
Wisconsin, from 1985 to 1993. Mr. Brengel served as the
Chief Executive Officer of Johnson Controls, Inc., from 1967
to 1988. Mr. Brengel is a director of Rexworks, Inc. Member
of Executive Committee.
- ------------------ ROBERT A. CORNOG Director
since 1992
Age 57
President, Chief Executive Officer and Chairman of the Board
of Directors of Snap-on Incorporated (tool manufacturer)
since 1991. Mr. Cornog is a director of Snap-on
Incorporated, Wisconsin Electric Power Company, and
Wisconsin Energy Corporation. Member of Audit Committee and
Executive Committee.
- ------------------ JAMES H. KEYES Director
since 1985
Age 57
Chairman and Chief Executive Officer, Johnson Controls,
Inc., Milwaukee, Wisconsin. In 1985 Mr. Keyes was named
Executive Vice President and subsequently became Chief
Operating Officer and a member of the Board of Directors. He
became President of Johnson Controls, Inc., in 1986, its
Chief Executive Officer in 1988, and Chairman in 1993. Mr.
Keyes is a director of Firstar Corp., LSI Logic Corporation,
and Universal Foods Corporation. Chairman of Executive
Committee.
- ------------------ WILLIAM H. LACY Director
since 1997
Age 52
Chairman and Chief Executive Officer of Mortgage Guaranty
Insurance Corporation (MGIC), and President and Chief
Executive Officer of its parent company, MGIC Investment
Corporation, since 1987. Mr. Lacy is a Director of Firstar
Bank Milwaukee, Columbia Health System, Inc. and MGIC
Investment Corporation.
</TABLE>
5
<PAGE> 8
Each of the directors or nominees for director has had the principal occupation
indicated or in certain instances has served in another executive position with
the employer indicated or an affiliate thereof during the last five years.
The Audit Committee of the Board of Directors met three times during fiscal
1997. Its functions include, but are not necessarily limited to, the following:
(1) to review the adequacy of internal controls established by management; (2)
to assess the adequacy of the financial reporting process and selection of
accounting policies; (3) to review management's evaluation and proposed
selection of independent accountants, including the appropriateness of fees, and
to recommend to the Board of Directors the appointment of independent
accountants subject to the ratification by the shareholders; (4) to review the
adequacy of audit plans prepared by internal audit and independent accountants;
(5) to review periodically the status of significant issues and internal control
recommendations; (6) to meet and to consult with the Company's internal auditors
and accounting and financial personnel and with independent public accountants
concerning the foregoing matters; (7) to report on the results of these
activities periodically to the Board of Directors; (8) to review significant
issues concerning litigation, contingent liabilities, and tax and insurance; (9)
to review management information systems of the Company; and (10) to monitor
compliance procedures of the Company and their implementation.
The Compensation Committee of the Board of Directors met five times during
fiscal 1997. Its functions include, but are not necessarily limited to, the
following: (1) to consider and make recommendations to the Board of Directors
regarding the selection and retention of elected officers and certain other
principal officers and key employees of the Company and its subsidiaries; (2) to
consider and make recommendations regarding salary structure, officer gradings,
and salaries for elected officers; (3) to administer, make grants and awards,
make rules, and recommend amendments to the Company's executive compensation
plans; (4) to consider and make recommendations to the Board concerning bonus
awards, perquisites, and other remuneration to executive officers; (5) to
consider and make recommendations concerning the total compensation package for
all elected officers and to approve the disclosure of such information in the
Company's proxy statement; (6) to oversee the selection of, and to meet with,
outside consultants to review the Company's executive compensation programs as
appropriate; (7) to review and make recommendations concerning management
succession; (8) to recommend to the Board of Directors the selection of the
Chief Executive Officer of the Company; and (9) in the case of the Chairman of
the Board of Directors being precluded from fulfilling his/her duties by death,
disability or other debilitating circumstances, the Chair of the Committee is to
call a Special Board Meeting, as provided in the By-Laws, and chair the Board
Meeting until the Board elects a new Chairman of the Board.
The Directors Committee of the Board of Directors met three times during fiscal
1997. Its function includes, but is not necessarily limited to, the following:
(1) to review the qualifications of, and to make recommendations to the Board of
Directors concerning, nominees for directors; (2) to review and consider
candidates for election as directors submitted by the shareholders; (3) to
consider and make recommendations concerning the size and composition of the
Board of Directors; (4) to develop and recommend guidelines and criteria to
determine the qualifications of directors; (5) to recommend an overall
compensation program for directors; (6) to review and recommend committees and
committee structure for the Board; (7) to recommend performance criteria for the
Board of Directors and to review its performance; and (8) to review conflicts of
interest that may affect directors. Shareholders wishing to propose director
candidates for consideration by the Directors Committee may do so by writing to
the Secretary of the Company, giving the candidate's name, biographical data and
qualifications. Further, the Company's By-Laws set forth certain requirements
for shareholders wishing to nominate director candidates for consideration by
shareholders. With respect to elections of directors to be held at an annual
meeting, among other things, a shareholder must give written notice of an intent
to make such a nomination complying with the By-Laws to the
6
<PAGE> 9
Secretary of the Company not less than 60 days nor more than 90 days prior to
the fourth Tuesday in the month of January.
The Executive Committee of the Board of Directors did not meet during fiscal
1997. Its functions include the exercise of certain powers of the Board of
Directors in the general supervision and control of the business and affairs of
the Company during intervals between meetings of the Board of Directors.
The Pension and Benefits Committee of the Board of Directors met four times
during fiscal 1997. Its functions include, but are not necessarily limited to,
the following: (1) to review annually actuarial assumptions and actuarial
valuation of the pension plans of the Company; (2) to review investment policy
of the funds of the employee benefit plans of the Company; (3) to select and to
terminate investment managers as appropriate; (4) to review with investment
advisors past performance and current investment strategy; (5) to review and
approve the adoption of any new trust agreements or master trusts implementing
the plans; (6) to monitor and oversee Company policies affecting employee
benefit plans; and (7) to oversee administration of plans, to review annually
plan provisions, and to recommend amendments to the plans as appropriate.
During fiscal 1997, the Board of Directors met seven times. Each director
attended 80% or more of the total number of meetings held during fiscal 1997
while he or she was a member of the Board, including meetings of committees of
which the director is a member.
Directors who are not employees receive a $36,000 annual retainer, plus $1,200
for each Board meeting they attend, $1,200 for each meeting they attend of Board
committees of which they are members, $1,500 for each meeting they attend of
Board committees of which they are chairmen, plus expenses.
Directors, who are not covered by other insurance and who are under 65 years of
age, may purchase medical coverage on the same basis as Company employees. A
director who retires after attaining the age of 65 and 6 years of service as a
director will be paid the annual retainer in effect upon his or her retirement
for life. The value of this retirement plan per annum depends on life expectancy
at retirement, the retainer at retirement and the number of years of Board
Service. The annual value for current directors ranges from $8,549 to $24,808.
Under the Stock Plan for Outside Directors adopted on January 27, 1993, up to
50% of the retainer fee will be paid in Common Stock each year. The remainder
will be paid in cash at the same time. The stock will be priced as of the date
of the Annual Meeting. In addition, new directors receive an initial grant of
400 shares of Common Stock upon election or appointment. New directors also
receive a pro rata share of the annual retainer for the remainder of that year,
and the stock provided as part of the annual retainer will be priced as of the
date of the first meeting of the Board at which the new director participates.
7
<PAGE> 10
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The Summary Compensation Table below shows the compensation for the past three
fiscal years of each of the Company's five most highly compensated executive
officers, including the Chief Executive Officer (the named executive officers).
STOCK OPTION/STOCK APPRECIATION RIGHT GRANTS
The Company has in effect employee stock option plans pursuant to which options
to purchase Common Stock of the Company and stock appreciation rights (SARs),
which are rights, granted in tandem with an option, to receive cash payments
equal to any appreciation in value of the shares subject to option from the date
of the option grant to the date of exercise in lieu of exercise of the option,
are granted to officers and other key employees of the Company and its
subsidiaries. The table on page 9 shows Options/SAR grants in fiscal 1997 to the
named executive officers. Of the stock options shown in the Summary Compensation
Table below and the Option/SAR Grant Table on page 9, 50% of the options were
options with tandem SARs.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL YEAR AND OPTION/SAR VALUE TABLE
The table on page 9 shows information concerning the exercise of stock options
or tandem SARs during fiscal 1997 by each of the named executive officers and
the fiscal year-end value of unexercised options and SARs.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation --------------------
-------------------------------- Long-Term
Other Annual Options/ Incentive All Other
Fiscal Salary Bonus Compensation SARs Payout Compensation
Name and Principal Position Year ($) ($) ($)(1) (#)(2) ($) ($)(3)
- ----------------------------- ------ ------- ------- ------------ -------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
James H. Keyes 1997 875,001 689,000 -- 120,000 730,000 67,714
Chairman and Chief Executive 1996 787,503 575,000 -- 80,000 450,000 62,925
Officer 1995 731,250 599,400 -- 60,000 363,000 54,858
John M. Barth 1997 487,503 371,000 -- 48,000 277,000 34,966
Executive Vice-President 1996 441,249 260,000 -- 48,000 204,000 31,693
1995 407,496 264,649 -- 40,000 165,000 27,230
Joseph W. Lewis 1997 384,999 229,000 -- 34,000 239,000 26,643
Executive Vice-President 1996 365,247 171,000 -- 34,000 188,000 24,550
1995 346,000 175,463 -- 30,000 156,200 22,791
Stephen A. Roell 1997 348,747 246,000 -- 34,000 202,000 25,510
Vice-President and 1996 324,999 188,000 -- 34,000 101,000 23,789
Chief Financial Officer 1995 302,496 200,136 -- 30,000 79,200 19,123
John P. Kennedy 1997 304,998 194,000 -- 24,000 157,000 22,752
Vice-President, Secretary, 1996 280,503 172,000 -- 24,000 91,000 18,492
and General Counsel 1995 248,500 144,547 -- 14,000 78,100 15,241
</TABLE>
- -------------------------
(1) The aggregate amount of "Other Annual Compensation," which includes
perquisites and personal benefits was less than the required reporting
threshold (the lesser of $50,000 or 10% of the officer's annual salary and
bonus for the year).
(2) The Options/SAR's reflect the effects of the 2 for 1 stock split which took
place on March 31, 1997.
(3) "All Other Compensation" consists of contributions by the Company on behalf
of the named individuals to the Company's savings and investment plans.
8
<PAGE> 11
OPTIONS/SAR GRANTS IN FISCAL 1997(1)
<TABLE>
<CAPTION>
Individual Grants Potential Realizable
- -------------------------------------------------------------------------------------- Value at Assumed
% of Total Annual Rates of Stock
Options/SARs Exercise Price Appreciation for
Granted to or Base Full Option Term
Options/SARs Employees in Price Expiration -----------------------
Name Granted(2) Fiscal 1997 ($/Share)(2) Date 5% 10%
- ----------------------------- ------------ ------------ ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
OPTIONS/SARs GRANTED November 20, 1996
James H. Keyes 120,000 7.75% $36.9375 11/20/06 $2,787,575 $7,064,263
John M. Barth 48,000 3.10% $36.9375 11/20/06 $1,115,030 $2,825,705
Joseph W. Lewis 34,000 2.19% $36.9375 11/20/06 $ 789,813 $2,001,541
Stephen A. Roell 34,000 2.19% $36.9375 11/20/06 $ 789,813 $2,001,541
John P. Kennedy 24,000 1.55% $36.9375 11/20/06 $ 557,515 $1,412,853
</TABLE>
- -------------------------
(1) The Stock Option/SAR plans are administered by the Compensation Committee of
the Board of Directors, which has authority to determine the individuals to
whom and the terms at which option and SAR grants shall be made, certain
terms of the options, and the number of shares to be subject to each option.
The per share option/SAR prices are the fair market value of the Company's
Common Stock on the date of the grant, and the term of the options is 10
years. Fifty percent of each award is exercisable two years after the grant,
and the remainder is exercisable three years after the grant.
(2) Options/SAR's granted are stated to reflect the effects of the 2 for 1 stock
split that took place on March 31, 1997.
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Number of Number of Unexercised In-the-Money
Shares/SARs Options/SARs at FY-End Options/SARs at FY-End
Acquired on Value ---------------------------- -------------------------
Name Exercise(1) Realized Exercisable/Unexercisable(1) Exercisable/Unexercisable
- ---------------------------------- ----------- ---------- ---------------------------- -------------------------
<S> <C> <C> <C> <C>
James H. Keyes 0 0 274,000 / 230,000 $7,186,319 / $3,500,006
John M. Barth 68,000 $1,079,870 0 / 116,000 0 / $1,864,002
Joseph W. Lewis 0 0 110,200 / 83,000 $2,905,415 / $1,340,439
Stephen A. Roell 40,000 $ 691,247 15,000 / 83,000 $361,875 / $1,340,439
John P. Kennedy 0 0 54,400 / 55,000 $1,465,201 / $859,626
</TABLE>
- -------------------------
(1) These are stated to reflect the effects of the 2 for 1 stock split which
took place on March 31, 1997.
LONG-TERM INCENTIVE PLAN AWARDS
The following table shows each Contingent Performance Award made to any named
executive officer for the 1998 fiscal year under the Company's Long-Term
Performance Plan (LTPP). Payouts of awards are tied to the Company's weighted
average return on shareholder's equity for fiscal years 1998, 1999 and 2000
compared to the median return on shareholder's equity of the Standard & Poor's
Manufacturers (Diversified Industrial) Index (S&P index) during the same
three-year period. Performance in the third year of the award is multiplied by
3/6, performance in the second year is multiplied by 2/6, and performance in the
first year is multiplied by 1/6 to establish a weighted average. If the
Company's average level of return is: (1) Less than the 45th percentile of the
return for companies in the S&P index, no award is earned; (2) equal to or
greater than the 45th
9
<PAGE> 12
percentile, the threshold amount is earned; (3) equal to or greater than the
50th percentile, the target amount is earned; (4) equal to or greater than the
55th percentile, 110% of the target amount is earned; and (5) equal to or
greater than the 60th percentile, the maximum amount is earned.
In fiscal 1997, based upon the data available at the time of this proxy, LTPP
participants were paid 100% of the maximum amount available under the criteria
established by the Compensation Committee. When the remaining comparison
companies have reported, these awards could [increase, decrease or vary].
<TABLE>
<CAPTION>
Amount of Performance
Contingent Period Until
Performance Maturation or Threshold Target Maximum
Name Award($) Payout ($) ($) ($)
---- ----------- ------------- --------- ------ -------
<S> <C> <C> <C> <C> <C>
James H. Keyes................ 810,000 1998-2000 648,000 810,000 972,000
John M. Barth................. 350,000 Fiscal Years 280,000 350,000 420,000
Joseph W. Lewis............... 234,000 157,000 234,000 281,000
Stephen A. Roell.............. 213,000 170,000 213,000 256,000
John P. Kennedy............... 171,000 137,000 171,000 205,000
</TABLE>
EMPLOYMENT CONTRACTS
The Company has employment agreements with each of the executive officers of the
Company including the named executive officers. These agreements provide that
employment shall continue for continuous terms, unless terminated by either the
Company or the employee as provided therein; the term of the agreements,
however, does not extend automatically after the employee reaches age 65. These
agreements provide for termination by the Company for cause, for death or
disability and under certain circumstances without cause. In the event of
termination without cause the employees under any of the contracts will be
entitled to receive benefits in an amount equal to the greater of two times the
Company's termination allowance policy for administrative employees or an amount
equal to 52 weeks' earnings of the employee. In the event of termination by the
Company for cause, the employee's compensation is terminated immediately. Change
of control agreements have also been entered into by the Company with these
executives. In the event of a change of control, these agreements provide for a
severance payment equal to three times the executive's annual compensation at
the time plus a lump sum payment for the actuarial equivalent of lost benefits
under the applicable retirement plan if the executive is terminated other than
for cause or has good reason to terminate his or her employment. If the amount
to be paid upon termination exceeds certain amounts established under the
Internal Revenue Code, so as to require the payment of additional federal taxes,
the executive receives an additional payment such that, after payment by the
executive of all taxes payable in connection with the agreement, the executive
will retain the full amount of the payments to which he is entitled under the
agreement. The executive has a 30-day period at the end of the first year after
a change of control to terminate his or her employment for any reason and
receive this benefit.
The Company has in effect an Executive Survivor Benefits Plan for certain
executives. Coverage under this plan is in lieu of the Company's regular group
life insurance coverage. In the event of the death of a participating executive
while he is employed by the Company, his beneficiary is entitled to payments of
between 90% and 100% (depending on the executive's age) of the executive's final
base annual salary for a period of 10 years.
The Executive Incentive Compensation Plan (EICP) provides that, in the event of
a change of control of the Company, certain participants, including the named
executive officers, may re-elect to receive early payment of deferred amounts,
and a participant may direct the Company to cause a letter of credit be issued
in an amount sufficient to provide for all payments due to such participant
under the Plan. The Long-Term Performance Plan also provides that, in the event
of a change of
10
<PAGE> 13
control of the Company, certain participants, including the named executive
officers, shall be entitled to receive early payment of deferred amounts.
SECURITY OWNERSHIP OF MANAGEMENT
Set forth below is the tabulation indicating as of October 31, 1997, the shares
of the Company's Common Stock and equivalents beneficially owned by each
director and nominee, each of the named executive officers, and directors and
executive officers of the Company as a group. No executive officer or director
owns more than 1% of the outstanding shares of Common Stock.
SECURITY OWNERSHIP OF MANAGEMENT
<TABLE>
<CAPTION>
Amount and Units Representing
Name of Nature(1) of Stock Deferred
Beneficial Owner Ownership Compensation(3)
- --------------------------------------------------- ------------------ ------------------
<S> <C> <C>
James H. Keyes 408,709(2) 97,968 units
John M. Barth 94,697(2) 16,726 units
Joseph W. Lewis 264,291(2) 52,540 units
Stephen A. Roell 78,641(2) 2,176 units
John P. Kennedy 79,620(2) 12,018 units
William F. Andrews 5,410 0 units
Robert Barnett 2,956 16,418 units
Fred L. Brengel 219,054 12,068 units
Paul A. Brunner 12,600 0 units
Robert A. Cornog 4,651 3,751 units
Willie D. Davis 3,000 0 units
Southwood J. Morcott 2,188 2,948 units
Martha R. Seger 2,678 1,541 units
Donald Taylor 6,614 2,113 units
Richard F. Teerlink 3,056 0 units
Gilbert R. Whitaker, Jr. 5,140 5,749 units
R. Douglas Ziegler 26,200 0 units
</TABLE>
All directors and executive officers as a group (not including deferred shares
referred to in
footnote (3)) TOTAL 1,623,528(2)
TOTAL PERCENT OF CLASS OF COMMON STOCK AND EQUIVALENTS 1.91%
- -------------------------
(1) Includes all shares with respect to which each officer or director directly,
through any contract, arrangement, understanding, relationship or otherwise,
has or shares the power to vote or to direct voting of such shares or to
dispose or to direct the disposition of such shares.
(2) Includes shares of Common Stock which, as of October 31, 1997, were subject
to outstanding stock options exercisable within 60 days as follows: Mr.
Keyes, 344,000; Mr. Barth, 44,000; Mr. Lewis, 142,200; Mr. Roell, 47,000;
and Mr. Kennedy, 73,400. Also reflects common stock equivalents of preferred
units that are owned by these officers.
(3) Includes deferred shares under the EICP, LTPP, and Deferred Compensation
Plan for Certain Directors, or other deferred compensation plans. Units will
not be distributed in the form of Common Stock.
11
<PAGE> 14
COMPENSATION COMMITTEE REPORT
EXECUTIVE COMPENSATION PRINCIPLES
The Company's Executive Compensation Program is based on guiding principles
designed to align executive compensation with Company values and objectives,
business strategy, management initiatives, and business financial performance.
The Johnson Controls Vision, approved by the Board of Directors, identifies
customer satisfaction, technology, growth, market leadership, and shareholder
value as the Company's primary objectives. In applying these principles the
Compensation Committee (the Committee) has established a program to:
- - Attract and retain key executives critical to the long-term success of the
Company and each of its business groups.
- - Reward executives for long-term strategic management and the enhancement of
shareholder value.
- - Integrate compensation programs with both the Company's annual and long-term
strategic planning and measuring processes, which focus on after-tax return on
shareholder equity, return on investment, growth, market share, and cost
reduction.
- - Support a performance-oriented environment that rewards performance not only
with respect to Company goals but also Company performance as compared to that
of industry performance levels.
- - The Company's policy is generally to preserve the federal income tax
deductibility of compensation paid. Accordingly, the company has taken
appropriate actions, to the extent it believes feasible, to preserve the
deductibility of annual incentives, long-term performance plan payments, and
stock option awards. However, notwithstanding the Company's general policy,
the Committee may authorize payments that may not be deductible, if it
believes that this is in the best interests of the Company and its
shareholders.
EXECUTIVE COMPENSATION PROGRAM
The total compensation program involves a market comparison of total
compensation, based on surveys provided to the Company by an independent
compensation consultant. A survey of 22 companies with annual sales between $1
billion and $12.3 billion comparing all elements of executive officer
compensation was provided by an independent compensation consultant with respect
to compensation for officers and senior managers. Average sales of these 22
companies was $6.3 billion; adjustments were made to account for differences in
annual sales between the Company and those companies in the survey. The level of
comparison is the 50th percentile for total compensation.
The program consists of both cash and equity-based compensation. The annual
compensation consists of a base salary and an annual bonus under the Executive
Incentive Compensation Plan (EICP). The Committee determines the level of salary
for key executive officers and a salary range for other executive officers.
Factors considered in determining salary amounts or ranges include prior year
salary, changes in individual job responsibilities, past performance of
individuals, and, most importantly, achievement or trends toward achievement of
specified Company goals and the salary comparison survey results. Generally, all
executive officers participate in the EICP. For each fiscal year, the Committee
determines in advance and communicates to the executive the formula for the
award, which is based on specified benchmarks for return on shareholders'
equity, or return on group or division assets, increase in market share, or cost
reduction. These benchmarks are consistent with the Company's annual and
long-term strategic planning objectives based on achievement of business plans
approved by the Board of Directors that include goals of improved performance
over the previous year and take into account industry growth and cycles. At the
end of the fiscal year, the Committee applies the formula to objective
performance results to determine an
12
<PAGE> 15
executive's award for the year. Except under the EICP Qualified Plan, where
discretionary increases to the bonus amount may no longer be made, adjustments
may then be made by the Committee, within specified ranges, for the executive's
achievement of specified objectives and individual job performance.
Long-term incentives are provided through both the Long Term Performance Plan
(LTPP) and stock options. The Committee reviews and approves the participation
of executive officers of the Company and its subsidiaries under the LTPP.
Generally, all named executive officers participate in the LTPP, which is
intended to motivate executives to achieve longer-term objectives by providing
incentive compensation based on Company performance over a three-year period.
For each award under the LTPP, the Committee assigns an executive a contingent
performance award, which the executive has the opportunity to earn based upon
the Company's return on equity during the specified three-year period.
Currently, LTPP awards are based upon a specified level of return on
shareholders' equity relative to the Standard & Poor's Manufacturers
(Diversified Industrial) Index median return on shareholders' equity. The
specified level of return is consistent with the Company's strategic planning
objectives. At the end of the period, the Committee applies the specified goal
to objective performance results to determine the executive's LTPP award.
The Committee grants stock options and stock appreciation rights (SARs) under
the 1992 Stock Option Plan. The Committee has the authority to determine the
individuals to whom stock options and SARs are awarded, the terms at which
option grants shall be made, the terms of the options, and the number of shares
subject to each option. Compensation to executives through stock options and
SARs and the LTPP, taken together, is targeted at the 50th percentile of such
compensation granted by similar companies as identified in the survey. Current
stock ownership by executives, the number of unexercised options that may be
outstanding for an executive or executives as a whole, and other factors may be
considered only for new or promoted officers. Through the award of stock option
grants, the objective of aligning executive officers' long-range interests with
those of the shareholders is met by providing the executive officers with the
opportunity to build a meaningful stake in the Company.
Executive officers may also participate in the Company's Savings and Investment
Plan (401k Plan), which includes Company contributions to the Plan, an
Equalization Benefit Plan under which certain executives, including the named
executive officers, are entitled to additional benefits that cannot be paid
under qualified plans due to Internal Revenue Code limitations and in addition
other benefit plans generally available to all levels of salaried employees.
Also, certain executive officers may elect to defer certain awards or
compensation under plans. Deferred awards are accounted for as if invested in
various accounts.
The Board of Directors has adopted an Executive Stock Ownership Policy, which
requires that all officers and senior managers in each business group, within
five years of becoming subject to the Policy, hold common stock of the Company
in an amount, depending upon the officer or manager, of one to three times their
annual salary. Total compensation to be received by these individuals is not
affected by the policy. The 1995 Common Stock Purchase Plan for Executives
(CSPPE) facilitates the acquisition of common stock by executives subject to the
Executive Stock Ownership Policy. All officers and key executives may
participate in the CSPPE. Participants in the CSPPE may deduct from their pay up
to a maximum of $2,500 per month to purchase shares of the Company's common
stock. The price of each share of such stock will be 100% of the average price
of shares purchased by Firstar Trust Company as agent for the participants. No
brokerage fees or commissions will be charged, and the Company bears the
expenses of administering the CSPPE.
Approximately 75% of the total compensation paid to the executive officer group
is performance related, which is comparable to the average of the companies
identified in the executive compensation survey.
13
<PAGE> 16
CHIEF EXECUTIVE OFFICER COMPENSATION
The Committee relied on the same approach in determining the Chief Executive
Officer's compensation as it used for compensation of other executive officers.
The Chief Executive Officer of the Company received a base salary in fiscal 1997
of $900,000, which represented an increase of 12.5% over the previous year. The
Chief Executive Officer's base salary remained below the average base salary for
chief executive officers for the 22 companies reviewed. His fiscal 1997 EICP
award of $689,000 was based upon the return on shareholder's equity for the
Company for fiscal 1997 and represented 56% of the maximum amount available
under the criteria established by the Committee. In fiscal 1997, the Chief
Executive Officer received payments under the LTPP of $730,000, based upon the
Company's return on shareholder's equity over the past three fiscal years, and
it represented 100% of the maximum amount available under the criteria
established by the Committee based upon the data available on the date of this
proxy. When the remaining comparison companies have reported, this award could
subsequently increase to 100% of the maximum amount. Stock options were awarded
in November 1996, when the Chief Executive Officer received an option award of
60,000 shares (120,000 shares if restated to reflect the 3/31/97 stock split).
Approximately 65% of the total compensation paid to the Chief Executive Officer
is performance related, which is comparable to the historical average for the
companies identified in the survey.
COMPENSATION COMMITTEE
Southwood Morcott, Chairman
William F. Andrews
Paul A. Brunner
Donald Taylor
14
<PAGE> 17
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total shareholder
return on the Company's Common Stock, based on the market price of the Common
Stock and assuming reinvestment of dividends, with the cumulative total return
of companies on the Standard & Poor's 500 Stock Index and the S&P Manufacturers
(Diversified Industrial) Index.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG S&P 500 INDEX, S&P MANUFACTURERS (DIVERSIFIED
INDUSTRIAL) INDEX AND JOHNSON CONTROLS, INC.
<TABLE>
<CAPTION>
MANUFACTURERS
MEASUREMENT PERIOD (DIVERSIFIED
(FISCAL YEAR COVERED) S&P 500 INDUSTRIAL) JCI
<S> <C> <C> <C>
1992 100 100 100
1993 113.00 118.55 140.21
1994 117.17 131.73 131.84
1995 152.02 175.45 172.51
1996 182.93 226.03 209.31
1997 256.92 314.65 282.23
</TABLE>
ASSUMES $100 INVESTED ON SEPTEMBER 30, 1992, IN S&P 500 INDEX, S&P MANUFACTURERS
(DIVERSIFIED INDUSTRIAL) INDEX AND JOHNSON CONTROLS, INC., AND THAT DIVIDENDS
ARE REINVESTED AT THE END OF MONTH IN WHICH THEY ARE PAID.
15
<PAGE> 18
PENSION PLANS
PENSION PLAN TABLE
The following table shows the maximum annual retirement benefits payable in
dollars under the Company's plans (including amounts attributable to the
Company's Equalization Benefit Plan) at the normal retirement age for specified
remunerations and years of service under provisions in effect on September 30,
1997, and assuming retirement on that date. Compensation for purposes of the
plans for the named executive officers generally corresponds with the aggregate
of the earned salary, plus bonus or Executive Incentive Compensation Plan awards
for each such person.
<TABLE>
<CAPTION>
Maximum Annual Pension at Normal Retirement Age
Average Annual After Years of Participating Service
Compensation in (Prior to Adjustment for Social Security
Highest 5 Consecutive Years Covered Compensation)
of Last 10 Years --------------------------------------------------
Before Retirement 25 Years 30 Years 35 Years 40 Years
- --------------------------- ---------- ---------- ---------- -----------
<C> <C> <C> <C> <C>
100,000 42,500 51,000 56,750 62,500
200,000 85,000 102,000 113,500 125,000
250,000 106,250 127,500 141,875 156,250
300,000 127,500 153,000 170,250 187,500
400,000 170,000 204,000 227,000 250,000
500,000 212,500 255,000 283,750 312,500
600,000 255,000 306,000 340,500 375,000
700,000 297,500 357,000 397,250 437,500
800,000 340,000 408,000 454,000 500,000
900,000 382,500 459,000 510,750 562,500
1,000,000 425,000 510,000 567,500 625,000
1,100,000 467,500 561,000 624,250 687,500
1,200,000 510,000 612,000 681,000 750,000
1,300,000 552,500 663,000 737,750 812,500
1,400,000 595,000 714,000 794,500 875,000
1,500,000 637,500 765,000 851,250 937,500
1,600,000 680,000 816,000 908,000 1,000,000
</TABLE>
As of September 30, 1997, the persons named in the Summary Compensation Table
were credited with the following years of service under the Company's pension
plan: Mr. Keyes, 28 years; Mr. Barth, 27 years; Mr. Lewis, 36 years; Mr. Roell,
14 years; and Mr. Kennedy, 12 years.
Pension plans of the Company generally apply to all regular employees, including
officers of the Company. The Johnson Controls Pension Plan (the Plan), effective
January 1, 1989, generally covers all salaried and non-union hourly employees of
the Company. The Plan has been amended from time to time. Under the Plan,
benefits are accrued according to the following formula: 1.15% of Participant's
Average Monthly Compensation multiplied by the Participant's years of Benefit
Service plus 0.55% of Average Monthly Compensation in excess of the
Participant's Covered Compensation multiplied by the Participant's years of
Benefit Service. The amounts actually payable may be actuarially adjusted to
reflect the Participant's marital status, early retirement or termination, and,
in some circumstances, age. "Average Monthly Compensation" is defined as the
average monthly compensation for the highest five consecutive years in the last
10 years. "Benefit Service" generally means the number of years worked for the
Company. "Covered Compensation" means the average of compensation subject to
Social Security taxes for the 35-year period ending in the year the Participant
attains Social Security Retirement Age; i.e. the age at which the Participant
will be entitled to full Social Security payments.
Participants become entitled to benefits under the Plan after five years of
service with the Company or any of its subsidiaries, and the normal retirement
date is a Participant's 65th birthday.
16
<PAGE> 19
The Internal Revenue Code places maximum limitations on the amount of benefits
that may be paid under the Plan. The Company has adopted an Equalization Benefit
Plan under which certain executives, including the named executive officers, are
entitled to the additional pension benefits that cannot be paid under the
qualified plan due to these limitations and because they have elected to defer a
portion of their award under an incentive compensation plan.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the New York Stock Exchange. Officers, directors and greater than ten
percent shareholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by the Company,
or written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, since October 1, 1996,
all filing requirements applicable to its officers, directors, and greater than
ten percent beneficial owners were complied with.
SELECTION OF AUDITORS
Management will propose the adoption of a resolution ratifying the Board of
Directors' decision to appoint Price Waterhouse as auditors. If the shareholders
fail to ratify such selection, the Board will reconsider it. Representatives of
Price Waterhouse are expected to be present at the shareholders' meeting with
the opportunity to make a statement if they desire to do so and to be available
to respond to appropriate questions.
SHAREHOLDERS' PROPOSALS
Proposals of shareholders which are intended to be presented at the 1999 annual
meeting must be received by the Company no later than August 6, 1998 to be
included in the Company's proxy materials for that meeting. Further, a
shareholder who otherwise intends to present business at the 1999 annual meeting
must comply with the requirements set forth in the Company's By-Laws. Among
other things, to bring business before an annual meeting, a shareholder must
give written notice thereof, complying with the By-Laws, to the Secretary of the
Company not less than 60 days and not more than 90 days prior to the fourth
Tuesday of the month of January. The 1999 annual meeting will be held on January
27, 1999, or on such other date designated by the Board of Directors.
17
<PAGE> 20
OTHER MATTERS
The matters referred to in the notice of meeting and in the proxy statement are,
as far as management now knows, the only matters which will be presented for
consideration at the meeting. If any other matters properly come before the
meeting, the persons named in the accompanying form of proxy will vote on them
in accordance with their best judgment.
The cost of soliciting proxies will be borne by the Company. The Company expects
to solicit proxies primarily by mail. Proxies also may be solicited personally
and by telephone by certain officers and regular employees of the Company. D.F.
King & Co., Inc., has been retained for solicitation of all brokers and nominees
at a cost of approximately $11,000 plus customary out-of-pocket expenses. The
Company may reimburse brokers and other nominees for their expenses in
communicating with the persons for whom they hold stock of the Company.
The Company's 1997 Annual Report is being mailed to the shareholders with this
proxy statement.
JOHNSON CONTROLS, INC.
JOHN P. KENNEDY
John P. Kennedy, Secretary
December 5, 1997
18
<PAGE> 21
JOHNSON CONTROLS, INC.
P.O. BOX 591
MILWAUKEE, WI 53201
SHAREHOLDER'S PROXY ANNUAL MEETING-JANUARY 28, 1998
The undersigned, having received the Notice of Meeting and Proxy Statement
dated December 5, 1997, and Annual Report for 1997, hereby appoints J.P.
Kennedy and J.H. Keyes, and each of them, proxies with power of substitution to
vote for the undersigned at the annual shareholders' meeting of Johnson
Controls, Inc., on January 28, 1998, and at any adjournments thereof.
This proxy when properly executed will be voted in the manner directed therein
by the undersigned. If no direction is made, this proxy will be voted for all
nominees listed and for Proposal 2.
-- DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED --
<TABLE>
<S><C>
JOHNSON CONTROLS, INC. 1998 ANNUAL MEETING
The Board of Directors recommends a vote FOR items 1 and 2. If no direction is made, this proxy will be voted FOR all
nominees listed and FOR item 2.
1. ELECTION OF DIRECTORS: 1 - William F. Andrews 2 - Robert L. Barnett / / FOR all nominees / / WITHHOLD AUTHORITY
3 - Willie D. Davis 4 - Richard F. Teerlink listed to the left to vote for all
(except as nominees listed
specified below). to the left.
________________________________________
(Instructions: To withhold authority to vote for any indicated nominee, write | |
number(s) of nominee(s) in the box provided to the right.) -------> |______________________________________|
2. Ratification of the appointment of Price Waterhouse as auditors. / / FOR / / AGAINST / / ABSTAIN
3. In their discretion, upon any other matters which may properly come before the
meeting or any adjournments thereof, hereby revoking any proxy heretofore given by
the undersigned for such meting.
Check appropriate box Date________________________
Indicate changes below:
Address Change? / / Name Change? / / ___________________________________________
| |
| |
|_________________________________________|
SIGNATURE(S) IN BOX
Please sign name exactly as it appears
hereon. When signed as attorney, executor,
trustee or guardian, please add title. For
joint accounts, each owner should sign.
</TABLE>
