Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
__________________
JOHNSON CONTROLS, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 39-0380010
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5757 N. Green Bay Avenue
P. O. Box 591
Milwaukee, Wisconsin 53201
(Address of principal executive offices) (Zip Code)
Johnson Controls Northern New Mexico, L.L.C.
Retirement Savings Plan
(Full title of the plan)
____________________
John P. Kennedy
Secretary
Johnson Controls, Inc.
5757 N. Green Bay Avenue
P. O. Box 591
Milwaukee, Wisconsin 53201
(414) 228-1200
(Name, address and telephone number, including area code,
of agent for service)
__________________________
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities to to be Price Offering Registration
be Registered Registered Per Share Price Fee
Common Stock, 250,000 $47.3125(1) $11,828,125 $3,584.28
$0.16-2/3 par shares (1)
value (2)
(2)
Common Stock 250,000 (2)
Purchase rights
Rights
(1) Estimated pursuant to Rule 457(c) under the Securities Act of
1933 solely for the purpose of calculating the registration fee
based on the average of the high and low prices for Johnson
Controls, Inc. Common Stock on the New York Stock Exchange
consolidated reporting system on September 23, 1997.
(2) The value attributable to the Common Stock Purchase Rights is
reflected in the market price of the Common Stock to which the
Rights are attached.
In addition, pursuant to Rule 416(c) under the Securities Act of
1933, this Registration Statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document or documents containing the information specified
in Part I are not required to be filed with the Securities and Exchange
Commission (the "Commission") as part of this Form S-8 Registration
Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Commission by Johnson
Controls, Inc. (the "Company") or by the Johnson Controls Northern New
Mexico, L.L.C. Retirement Savings Plan (the "Plan") are hereby
incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for its fiscal
year ended September 30, 1996.
2. The Company's Quarterly Reports on Form 10-Q for the
quarters ended December 31, 1996, March 31, 1997 and June 30, 1997.
3. The Company's Current Reports on Form 8-K filed October 4,
1996, December 10, 1996, March 10, 1997 (two reports) (which financial
statements have been restated to give effect to the reclassification of
the Plastic Container division as a discontinued operation and for the
stock split distributed on March 31, 1997 to shareholders of record on
March 7, 1997) and May 30, 1997.
4. The description of the Company's Common Stock contained in
Item 1 of the Company's Registration Statement on Form 8-A dated April 23,
1965, as superseded by the description contained in the Company's
definitive proxy/registration statement (Form S-14 Registration No. 2-
62382) incorporated by reference as Exhibit 1 to Current Report on Form 8-
K, dated October 23, 1978, and in the Company's Registration Statement on
Form S-14, dated April 18, 1985 (Registration No. 2-97136), and any
amendments or reports filed for the purpose of updating such description.
5. The description of the Company's Common Stock Purchase
Rights contained in Item 1 of the Company's Registration Statement on Form
8-A, filed November 30, 1994, and any amendments or reports filed for the
purpose of updating such description.
All documents subsequently filed by the Company or the Plan
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, as amended, after the date of filing of this Registration
Statement and prior to such time as the Company files a post-effective
amendment to this Registration Statement which indicates that all
securities offered hereby have been sold or which deregisters all
securities then remaining unsold shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the
date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
None.
Item 6. Indemnification of Directors and Officers.
Pursuant to the Wisconsin Business Corporation Law and the
Company's Bylaws, directors and officers of the Company are entitled to
mandatory indemnification from the Company against certain liabilities
and expenses (i) to the extent such officers or directors are successful
in the defense of a proceeding and (ii) in proceedings in which the
director or officer is not successful in the defense thereof, unless (in
the latter case only) it is determined that the director or officer
breached or failed to perform his duties to the Company and such breach
or failure constituted: (a) a willful failure to deal fairly with the
Company or its shareholders in connection with a matter in which the
director or officer had a material conflict of interest; (b) a violation
of the criminal law, unless the director or officer had reasonable cause
to believe his or her conduct was lawful or had no reasonable cause to
believe his or her conduct was unlawful; (c) a transaction from which the
director or officer derived an improper personal. profit; or (d) willful
misconduct. The Wisconsin Business Corporation Law specifically states
that it is the policy of Wisconsin to require or permit indemnification in
connection with a proceeding involving securities regulation, as described
therein, to the extent required or permitted as described above.
Additionally, under the Wisconsin Business Corporation Law, directors of
the Company are not subject to personal liability to the Company, its
shareholders or any person asserting rights on behalf thereof for certain
breaches or failures to perform any duty resulting solely from their status
except in circumstances paralleling those in subparagraphs (a) through (d)
outlined above.
Expenses for the defense of any action for which indemnification
may be available may be advanced by the Company under certain
circumstances.
The indemnification provided by the Wisconsin Business
Corporation Law and the Company's By-Laws is not exclusive of any other
rights to which a director or officer of the Company may be entitled. The
general effect of the foregoing provisions may be to reduce the
circumstances which an officer or director may be required to bear the
economic burden of the foregoing liabilities and expense.
The Company maintains a liability insurance policy for its
directors and officers as permitted by Wisconsin law which may extend to,
among other things, liability arising under the Securities Act of 1933, as
amended.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The exhibits filed herewith or incorporated herein by reference
are set forth in the attached Exhibit Index.
The undersigned Registrant hereby undertakes to submit the Plan,
as amended, to the Internal Revenue Service ("IRS") in a timely manner and
will make all changes required by the IRS in order to continue the
qualification of the Plan under Section 401 of the Internal Revenue Code
of 1986, as amended.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Securities and Exchange Commission by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934, as amended, that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, as amended, each such post-effective amendment
shall be deemed to be a new Registration Statement relating to the
securities offered herein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, as
amended, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended,
that is incorporated by reference in this Registration Statement shall be
deemed to be a new Registration Statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933, as amended, may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities
Act of 1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and
has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Milwaukee,
State of Wisconsin, as of September 24, 1997.
JOHNSON CONTROLS, INC.
By: /s/ John P. Kennedy
John P. Kennedy
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below as of September 24, 1997, by
the following persons in the capacities indicated. Each person whose
signature appears below constitutes and appoints James H. Keyes, Stephen
A. Roell and John P. Kennedy, and each of them individually, his or her
attorneys-in-fact and agents, with full power of substitution and
resubstitution for him or her and in his or her name, place and stead, in
any and all capacities, to sign any and all amendments (including post-
effective amendments) to the Registration Statement and to file the same,
with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
/s/ James H. Keyes Chairman, Chief Executive Officer and
James H. Keyes Director (principal executive officer)
/s/ Stephen A. Roell Vice President and Chief Financial Officer
Stephen A. Roell (principal financial and accounting
officer)
/s/ William F. Andrews Director
William F. Andrews
/s/ Robert L. Barnett Director
Robert L. Barnett
/s/ Fred L. Brengel Director
Fred L. Brengel
/s/ Paul A. Brunner Director
Paul A. Brunner
/s/ Robert A. Cornog Director
Robert A. Cornog
/s/ Willie D. Davis Director
Willie D. Davis
/s/ Southwood J. Morcott Director
Southwood J. Morcott
/s/ Martha R. Seger Director
Martha R. Seger
/s/ Donald Taylor Director
Donald Taylor
Director
Richard F. Teerlink
/s/ Gilbert R. Whitaker, Director
Jr.
Gilbert R. Whitaker, Jr.
/s/ R. Douglas Ziegler Director
R. Douglas Ziegler
<PAGE>
The Plan. Pursuant to the requirements of the Securities Act of
1933, as amended, the Benefits Administration Committee, which administers
the Plan, has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Milwaukee, and the State of Wisconsin, on this 24th day of September,
1997.
JOHNSON CONTROLS
NORTHERN NEW MEXICO, L.L.C.
RETIREMENT SAVINGS PLAN
By:/s/ Jerome D. Okarma
Jerome D. Okarma
By: /s/ Darlene M. Rose
Darlene M. Rose
By:/s/ Carol S. Willenbrock
Carol S. Willenbrock
The foregoing persons are all members of the
Johnson Controls Northern New Mexico, L.L.C.
Benefits Administration Committee, which is the
administrator of the Johnson Controls Northern
New Mexico, L.L.C. Retirement Savings Plan.
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
(4.1) Johnson Controls Northern New Mexico, L.L.C.
Retirement Savings Plan.
(4.2) Rights Agreement between the Registrant and Firstar
Trust Company (Rights Agent), as amended November
16, 1994 (incorporated by reference to Exhibit 4.C
to the Registrant's Annual Report on Form 10-K for
the fiscal year ended September 30, 1994 (Commission
File No. 1-5097)).
(23.1) Consent of Price Waterhouse LLP.
(24) Powers of Attorney relating to subsequent amendments
(included on the signature page to this Registration
Statement).
JOHNSON CONTROLS
NORTHERN NEW MEXICO, L.L.C.
RETIREMENT SAVINGS PLAN
(Effective October 1, 1997)
<PAGE>
JOHNSON CONTROLS
NORTHERN NEW MEXICO, L.L.C.
RETIREMENT SAVINGS PLAN
Table of Contents
Page
ARTICLE I. NAME, PURPOSE AND EFFECTIVE DATE OF PLAN . . . . . . . . . 1
ARTICLE II. DEFINITIONS AND CONSTRUCTION . . . . . . . . . . . . . . 2
Section 2.01. Definitions. . . . . . . . . . . . . . . . . . . . 2
Section 2.02. Construction. . . . . . . . . . . . . . . . . . . 8
ARTICLE III. PARTICIPATION AND PARTICIPANT DEPOSITS AND CONTRIBUTIONS 10
Section 3.01. Participation. . . . . . . . . . . . . . . . . . 10
Section 3.02. Participant Deposits. . . . . . . . . . . . . . 10
Section 3.03. Participant Contributions. . . . . . . . . . . . 15
Section 3.04. Payment of Participant Deposits and Participant
Contributions to Trustee. . . . . . . . . . . . . . . . . . 15
Section 3.05. Transfers of Employment. . . . . . . . . . . . . 15
Section 3.06. Status of Leased Employees. . . . . . . . . . . 15
Section 3.07. Rollover Contributions. . . . . . . . . . . . . 16
Section 3.08. Special Rules Applicable to Returning Veterans. 16
ARTICLE IV. EMPLOYER CONTRIBUTIONS . . . . . . . . . . . . . . . . 18
Section 4.01. Employer Contributions. . . . . . . . . . . . . 18
Section 4.02. Funding Policy. . . . . . . . . . . . . . . . . 23
Section 4.03. Maximum Annual Additions. . . . . . . . . . . . 23
ARTICLE V. INVESTMENT; PARTICIPANT'S ACCOUNTS . . . . . . . . . . . 25
Section 5.01. Establishment of Accounts. . . . . . . . . . . . 25
Section 5.02. Investment of Accounts. . . . . . . . . . . . . 25
Section 5.03. Allocations to Employer Contributions Accounts. 25
Section 5.04. Valuation of Accounts. . . . . . . . . . . . . . 26
Section 5.05. Transfer of Account. . . . . . . . . . . . . . . 26
Section 5.06. Transfer to the Participant's Account. . . . . . 26
Section 5.07. Voting of Company Stock . . . . . . . . . . . . 27
ARTICLE VI. VESTING AND DISTRIBUTION OF ACCOUNTS UPON TERMINATION OF
EMPLOYMENT . . . . . . . . . . . . . . . . . . . . . 28
Section 6.01. Vesting. . . . . . . . . . . . . . . . . . . . . 28
Section 6.02. Time and Form of Distributions. . . . . . . . . 28
Section 6.03. Compliance with Code Section 401(a)(9). . . . . 29
Section 6.04. Eligible Rollover Distributions. . . . . . . . . 29
ARTICLE VII. WITHDRAWALS DURING EMPLOYMENT AND LOANS . . . . . . . 31
Section 7.01. Hardship Withdrawals. . . . . . . . . . . . . . 31
Section 7.02. Withdrawal After Age Fifty-Nine and One-Half. . 32
Section 7.03. Withdrawal from Participant Contributions Account. 32
Section 7.04. Rollovers from Other Plans. . . . . . . . . . . 33
Section 7.05. Miscellaneous. . . . . . . . . . . . . . . . . . 33
ARTICLE VIII. PLAN ADMINISTRATION . . . . . . . . . . . . . . . . . 34
Section 8.01. Allocation of Responsibility Among Fiduciaries for Plan
and Trust Administration. . . . . . . . . . . . . . . . . . 34
Section 8.02. Benefits Administration Committee. . . . . . . . 34
Section 8.03. Use of Professional Services. . . . . . . . . . 37
Section 8.04. Fees and Expenses. . . . . . . . . . . . . . . . 37
Section 8.05. Claims Procedure. . . . . . . . . . . . . . . . 37
Section 8.06. Trustee's Responsibilities. . . . . . . . . . . 38
Section 8.07. Fiduciary Insurance and Indemnification. . . . . 39
Section 8.08. Agent for Service of Process. . . . . . . . . . 39
Section 8.09. Allocation of Fiduciary Responsibility. . . . . 39
Section 8.10. Selection of Investment Managers. . . . . . . . 40
Section 8.11. Liability for Breach of Co-Fiduciary. . . . . . 40
Section 8.12. Communications. . . . . . . . . . . . . . . . . 40
ARTICLE IX. AMENDMENTS AND TERMINATION . . . . . . . . . . . . . . 41
Section 9.01. Amendments and Termination. . . . . . . . . . . 41
ARTICLE X. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 42
Section 10.01. Non-Guarantee of Employment. . . . . . . . . . . 42
Section 10.02. Rights to Plan Assets. . . . . . . . . . . . . . 42
Section 10.03. Non-Recommendation of Investment. . . . . . . . 42
Section 10.04. Indemnification of Benefits Administration
Committee. . . . . . . . . . . . . . . . . . . 42
Section 10.05. Non-Alienation. . . . . . . . . . . . . . . . . 43
Section 10.06. Facility of Payment. . . . . . . . . . . . . . . 43
Section 10.07. Transfers from Other Qualified Plans. . . . . . 44
Section 10.08. Mergers, Consolidations and Transfers of Plan
Assets. . . . . . . . . . . . . . . . . . . . . 44
Section 10.09. Fiduciaries. . . . . . . . . . . . . . . . . . . 44
Section 10.10. Top-Heavy Restrictions. . . . . . . . . . . . . 44
ARTICLE I. NAME, PURPOSE AND EFFECTIVE DATE OF PLAN
The Plan, effective October 1, 1997, is intended to satisfy the
requirements of Section 401(a) of the Internal Revenue Code applicable to
qualified plans and the requirements of Section 401(k) of such Code
relating to a "qualified cash or deferred arrangement." The purpose of
the Plan is to offer eligible employees an opportunity and an incentive to
provide financial security for themselves and their families through
savings and investment on a tax-advantaged basis. The plan is a spin-off
of a portion of the Johnson Controls World Services Retirement Savings
Plan in connection with the formation of Johnson Controls Northern New
Mexico, L.L.C. as a joint venture among Johnson Controls World Services,
Inc. and several other unrelated entities.
ARTICLE II. DEFINITIONS AND CONSTRUCTION
Section 2.01. Definitions. For purposes of the Plan, unless
the context clearly or necessarily indicates the contrary, the following
words and phrases shall have the meaning set forth in the definitions
below:
(a) "Accounts" shall mean the accounts under the Plan to be
maintained for each Participant as provided in Section 5.01.
(b) "Affiliate" shall mean one or more corporations, trades or
businesses that, together with the Company, constitute a controlled group
of corporations within the meaning of Section 414(b) of the Code, a group
of trades or businesses under common control within the meaning of Section
414(c) of the Code, an affiliated service group within the meaning of
Section 414(m) of the Code or a designated group within the meaning of
Section 414(o) of the Code.
(c) "Approved Absence" shall mean a period during which no
duties are performed by an Employee, with the approval of his Employer,
and shall include such periods as vacation, sick leave, paid holidays,
jury duty, leave of absence, and military service. In addition, an
Approved Absence may be granted by an Employer for other reasons, under
rules uniformly applied to all Employees similarly situated. An Approved
Absence, in the case of an Employee in the military service of the United
States, will not exceed that period during which such Employee's re-
employment rights are protected by law. An Approved Absence will, for
purposes of the Plan, be considered service with an Employer, except that
no contributions hereunder will be made by or on behalf of an Employee
while so absent unless the Employee receives Earnings during such Approved
Absence.
(d) "Beneficiary" shall mean the person, trust or other entity
designated on Timely Notice by a Participant to receive benefits
accumulated hereunder in the event of the Participant's death. In the
event a Participant is married at the time of his death, the Beneficiary
shall be the Participant's spouse at such time, unless the Participant is
survived by a Beneficiary designated as such in the manner described above
and either (i) the Participant's spouse has consented in writing to the
designation of such Beneficiary, with such consent being witnessed by a
Plan representative appointed by the Benefits Administration Committee or
a notary public, or (ii) the Participant has demonstrated to the Benefits
Administration Committee that he has no spouse, his spouse cannot be
located or he is excused because of other circumstances recognized under
the Code. In the event the Participant is not survived by either a spouse
or a designated Beneficiary, the Participant's estate shall be the
Beneficiary.
(e) "Benefits Administration Committee" shall mean the committee
appointed pursuant to Article VIII of the Plan.
(f) "Board" shall mean the Board of Directors of the Company.
(g) "Code" shall mean the Internal Revenue Code of 1986, as
amended and in effect from time to time, and the regulations thereunder.
(h) "Company" shall mean Johnson Controls Northern New Mexico,
L.L.C., a New Mexico limited liability company.
(i) "Company Stock" shall mean Stock of Johnson Controls, Inc.
or its successor.
(j) "Compensation" shall mean the base compensation paid to an
Employee while he is a Participant during a Plan Year for services
rendered to an Employer, plus bonuses, any Participant Deposits and any
salary reduction pursuant to Code Section 125, but excluding overtime,
commissions, reimbursements or other expense allowances, fringe benefits,
moving expenses and welfare benefits paid with respect to a Plan Year by
the Employer to an Employee. The maximum annual compensation taken into
account hereunder for purposes of calculating any Participant's accrued
benefit (including the right to any optional benefit) and for all of the
purposes under the Plan shall be $150,000 or such higher amount permitted
pursuant to Code Section 401(a)(17)).
(k) "Employee" means any individual who is a common law employee
of an Employer on a corporate payroll as such who is not (i) in a
bargaining unit covered by a collective bargaining agreement (unless such
agreement specifically refers to the applicability of this Plan to such
unit), (ii) a resident of a country other than the United States of
America with no United States source income, or (iii) in a group of
employees that has specifically been excluded by the Board or by the board
of directors of such individual's Employer.
(l) "Employer" shall mean the Company and any Affiliate that
adopts the Plan by resolution of its board of directors, subject to the
approval of the Board.
(m) "Employer Contributions" shall mean amounts contributed by
Employers pursuant to Section 4.01.
(n) "Employment Commencement Date" shall mean the first day for
which an Employee is credited with an Hour of Service.
(o) "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as from time to time amended.
(p) "Highly Compensated Employee" means an employee of any
Employer who satisfies either of the following conditions:
(i) The employee was at any time during the current or
immediately preceding Plan Year a five percent (5%)
owner within the meaning of Sections 414(q) and 416(i)
or of the Code, including the constructive ownership
rules of Section 318 of the Code; or
(ii) The employee received "compensation" from any Employer
during the preceding Plan Year that, in the aggregate,
exceeds $80,000 as indexed in accordance with Code
Section 414(q) for cost-of-living adjustment. For
purposes of determining whether an Employee is a Highly
Compensated Employee under this Section 2.01(n),
"compensation" shall mean the Employee's compensation
within the meaning of Section 415(c)(3) of the Code,
plus to the extent not otherwise included under Section
415(c)(3), any amount paid by any Employer during the
Plan Year as a Participant Deposit to this Plan or pre-
tax employee contributions to any other plan maintained
by an Employer if such contributions are excluded from
the gross income of the Participant in accordance with
Code Sections 125, 402(e)(3) or 402(h).
(q) "Hour of Service" means each hour for which a Participant
has been directly or indirectly compensated or paid, or entitled to such
compensation or other payment, by an Employer for performance of work
(whether as an Employee or in any other capacity) or for reasons other
than the performance of work, such as vacation, holiday, illness,
incapacity (including disability), lay off, jury duty and authorized
leaves of absence, including any hour for which back pay is awarded;
provided, however, that no credit shall be given in excess of 501 hours
during any single continuous period during which no work is performed nor
for any hour as to which a payment is made or due for the sole purpose of
complying with applicable workers' compensation or unemployment
compensation or disability insurance laws; provided further, that each
hour shall count only once in determining a Participant's Hours of Service
even though he may receive more than straight time pay for such hour. A
Participant's Hours of Service shall be determined by the Benefits
Administration Committee on the basis of actual hours worked and Hours of
Service credited with respect to periods in which no work was performed
shall be determined with reference to the Participant's straight time rate
of pay and allocated to the Plan Year in which such hours occur in
accordance with Department of Labor Regulations '2530.200b-2(b) and (c),
which are incorporated herein by this reference. Hours of Service shall
also include the straight-time hours for which a Participant would
otherwise have been compensated while he is absent from work due to
entering the Armed Forces of the United States, provided he returns to
active service with an Employer within the period of time during which the
Participant has reemployment rights under federal law. The Benefits
Administration Committee's determination, to the extent consistent with
the terms hereof and ERISA requirements, shall be final and conclusive for
all purposes hereof.
(r) "Investment Fund" shall mean an unsegregated fund under the
Trust established at the direction of the Benefits Administration
Committee and invested in securities, insurance contracts or other
property of such type and general characteristics as the Benefits
Administration Committee shall determine.
(s) "Investment Manager" shall mean any person, insurance
company or corporation appointed by the Benefits Administration Committee
to direct the investment and reinvestment of all or any portion of the
assets held by the Trustee under the Trust.
(t) "Maximum Deferred Amount" shall mean the maximum amount or
rate that may be designated by a Participant as Participant Deposits, as
established by the Benefits Administration Committee pursuant to
subsection 3.02(e).
(u) "Minimum Eligibility Service" shall mean:
(i) with respect to a Part-Time Employee or Temporary
Employee, the 12-month period commencing on the
Employee's Employment Commencement Date during which he
completes at least 1,000 Hours of Service or any Plan
Year commencing after the Employee's Employment
Commencement Date during which he completes at least
1,000 Hours; or
(ii) with respect to any other Employee, 90 "Days of
Service".
90 "Days of Service" will be credited to an Employee if
on the ninetieth day following the date on which the
employee first performed an Hour of Service
("Commencement of Employment"), he is still employed by
an Employer. For this purpose, an Employee's service,
if any, with (a) the prior contractor at LANL or (b)
Johnson Controls World Services Inc. (or a company
presently or historically affiliated with Johnson
Controls World Services Inc.), as applicable, will be
counted.
If an Employee who had not completed 90 "Days of
Service" has a Termination of Employment and then
subsequently has another Commencement of Employment
("Re-Employment") by an Employer, he shall be deemed to
have met the 90 "Days of Service" requirement,
(A) in the case where he is Re-Employed by an
Employer before a One Year Break in Service has
occurred on the later of
(1) 90 days after the Employee's original
Commencement of Employment; or
(2) the date of Re-Employment;
(B) in the case where he is Re-Employed by an
Employer after incurring a One Year Break in
Service but before five consecutive One Year
Breaks in Service have occurred, on the date when
the sum of the Employee's prior service with the
Employer plus current service with the Employer
equals 90 "Days of Service";
(C) in the case where he is Re-Employed by an
Employer after five consecutive One Year Breaks
in Service have occurred, on the date when the
Employee's service measured from his date of Re-
Employment equals 90 "Days of Service".
(v) "One Year Break in Service" shall mean the twelve
consecutive month period beginning on the date of an Employee's
Termination of Employment during which the Employee is not in the employ
of any Employer. If an Employee is absent from service for Parental
Leave, the first "One-Year-Break-in-Service" means the twelve-month period
beginning on the second anniversary of the date on which the Parental
Leave began during which the Employee does not return to the employee of
any Employer.
For the purpose of this Section, "Parental Leave" means an absence from
work for any of the following reasons:
(a) the pregnancy of the Employee;
(b) the birth of a child of the Employee;
(c) the placement of a child with the Employee in connection
with the adoption of the child by the Employee;
(d) the need to care for a child immediately after its birth or
placement.
(w) "Part-Time Employee" shall mean an Employee whose regular
scheduled work week is for less hours than the normal work week for
Employees at his location.
(x) "Participant" shall mean an Employee who has satisfied the
requirements of Section 3.01. An individual who has become a Participant
shall continue as a Participant until all of his Accounts have been
distributed pursuant to the Plan.
(y) "Participant Contributions" shall mean after-tax amounts
contributed at the direction of a Participant pursuant to Section 3.03(a).
(z) "Participant Deposits" shall mean pre-tax amounts
contributed at the direction of a Participant pursuant to Section 3.02(a),
which are made pursuant to a cash or deferred arrangement described in
Code Section 401(k).
(aa) "Plan Year" shall mean (i) October 1, 1997 through December
31, 1997 and (ii) thereafter, each 12-month period beginning on January 1
of a year and ending December 31 of the same year.
(bb) "Temporary Employee" shall mean an Employee who is hired for
an assignment that is expected to be of less than 150 calendar days. A
Temporary Employee shall be deemed to have completed 190 Hours of Service
for each month in which he completes one or more Hours of Service.
(cc) "Termination of Employment" shall mean severance of the
employee-employer relationship with any Employer or Affiliate by reason of
quit, discharge, retirement or death.
In addition, if an Employee is a member of a collective bargaining
unit whose labor agreement with an Employer Affiliate defines a lay-off as
a termination of employment, the lay-off of such Employee shall be
considered a Termination of Employment for all purposes of the Plan, as of
the date the lay-off begins.
Termination of Employment also means completion of a period of
twelve months of absence from service for any reason other than quit,
discharge, retirement or death, except as specified in the following
sentence. There shall be no such Termination of Employment upon
completion of twelve months of absence if (i) the Employee is on an
Approved Absence and subsequently, the Employee returns to the employment
of an Employer or Affiliate at or before the end of the Approved Absence
or (ii) if the Employee is then on lay-off and the Employee is a member of
a collective bargaining unit whose labor agreement with an Employer or
Affiliate does not define a lay-off as a termination of employment and the
Employee returns to Employment with an Employer or Affiliate before the
expiration of the recall period. Failure to return to employment of an
Employer or Affiliate when recalled from lay-off, or expiration of a
recall period (without a recall), or failure to return to the employment
of an Employer or Affiliate at the end of an Approved Absence shall
constitute a discharge as of the earlier of (i) the date of such failure
or expiration or (ii) twelve months after the beginning of the period of
lay-off or Approved Absence.
(dd) "Timely Notice" shall mean a notice in the form prescribed
by the Benefits Administration Committee and filed at such places and at
such reasonable times as shall be required by the rules of such Benefits
Administration Committee.
(ee) "Trust" shall mean any trust which holds or is intended to
hold assets of the Plan, as in effect from time to time.
(ff) "Trust Agreement" shall mean any trust agreement in effect
between (i) the Benefits Administration Committee or the Company and (ii)
a Trustee.
(gg) "Trust Fund" shall mean the property which shall be held
from time to time by the Trustee in trust under the terms of a trust
agreement.
(hh) "Trustee" shall mean the qualified and acting Trustee under
the provisions of any applicable trust agreement.
(ii) "Valuation Date" shall mean every regular business day.
Section 2.02. Construction. (a) Wherever any words are used
herein in the masculine, they shall be construed as though they were used
in the feminine in all cases where they would so apply; and wherever any
words are used herein in the singular or the plural, they shall be
construed as though they were used in the plural or the singular, as the
case may be, in all cases where they would so apply. The words "hereof,"
"herein," "hereunder," and other similar compounds of the word "here"
shall mean and refer to this entire document and not to any particular
Article or Section. Titles of Articles and Sections are for general
information only, and the Plan is not to be construed by reference
thereto.
(b) Applicable Law. The Plan is a profit sharing plan intended
to qualify under Code Section 401(a). The Plan includes a cash or
deferred arrangement intended to qualify under Code Section 401(k). It is
intended that the investment options offered under the Plan comply with
the requirements of ERISA Section 404(c) and regulations promulgated
thereunder. The Plan shall be interpreted so as to comply with the
applicable requirements thereof, where such requirements are not clearly
contrary to the express terms hereof. In all other respects, the Plan
shall be construed and its validity determined according to the laws of
the State of New Mexico to the extent such laws are not preempted by
applicable requirements of federal law. In case any provision of the Plan
shall be held illegal or invalid for any reason, such illegality or
invalidity shall not affect the remaining provisions of the Plan, and the
Plan shall be construed and enforced as if said illegal or invalid
provisions had never been included herein.
ARTICLE III. PARTICIPATION AND PARTICIPANT DEPOSITS
AND CONTRIBUTIONS
Section 3.01. Participation. An Employee who on September 30,
1997 has completed the Minimum Eligibility Service requirements may elect
upon Timely Notice to participate in the Plan effective as of October 1,
1997. Each other Employee who completes the Minimum Eligibility Service
may elect to participate in the Plan as soon as administratively feasible
(or on the January 1 or July 1, if earlier) following the month of
completion of the Minimum Eligibility Service requirements and Timely
Notice.
Section 3.02. Participant Deposits. (a) Amount of
Participant Deposits. Each Participant shall designate the rate of his
Participant Deposits at the time of his election to participate in the
Plan, which may be at the rate of any whole percentage of his Compensation
up to 10%. Such Participant Deposits shall be made for the Participant
through regular payroll deductions from his Compensation.
(b) Change in or Suspension of Participant Deposits. A
Participant may change his designated rate of Participant Deposits at any
time effective as soon as administratively feasible following Timely
Notice.
(c) Participant Deposits for any Participant for any Plan Year
shall not exceed the lesser of:
(i) $7,000, as adjusted for cost of living increases
pursuant to Code Section 402(g)(5).
(ii) The maximum amount permitted under Section 3.02(d).
(d) Maximum Deferred Amount.
(i) The Plan is subject to the limitations of Code Section
401(k), which are incorporated herein by this
reference. Accordingly, and except as provided in
Section 3.02(e)(iv) and (v), the average deferral
percentage for any Plan Year for the group of Highly
Compensated Employees who are eligible to participate
in the Plan shall not exceed the greater of:
(A) 125 percent of the average deferral percentage for the
preceding Plan Year for all Employees who are eligible
to participate in the Plan other than Highly
Compensated Employees ("Non-Highly Compensated
Employees who are eligible to participate in the
Plan"); or
(B) the lesser of (A) the average deferral percentage for
the group of Non-Highly Compensated Employees who are
eligible to participate in the Plan for the preceding
Plan Year plus two percent; or (B) two times the
average deferral percentage for the group of Non-Highly
Compensated Employees who are eligible to participate
in the Plan for the preceding Plan Year.
(ii) The deferral percentage for any Non-Highly Compensated
Employee who is eligible to participate in the Plan is
calculated by dividing the amount of the Non-Highly
Compensated Employee's Participant Deposits for
preceding Plan Year by the Employee's compensation (as
defined in Section 414(q)(4) and 415(c)(3) of the Code)
for such preceding Plan Year. The deferral percentage
for any Highly Compensated Employee who is eligible to
participate in the Plan is calculated by dividing the
amount of the Highly Compensated Employee's Participant
Deposits for the Plan Year by the Highly Compensated
Employee's compensation (as defined in Section
414(q)(4) and 415(c)(3) of the Code) for the Plan Year.
The average deferral percentage for the group of Highly
Compensated Employees and the group of Non-Highly
Compensated Employees is the average of the deferral
percentages calculated for each member of the
applicable group. In accordance with rules promulgated
by the Internal Revenue Service, the Benefits
Administration Committee, in calculating a
Participant's deferral percentage, may elect to treat
qualified elective contributions and qualified non-
elective contributions (if any) as if they were
Participant Deposits.
(iii) The Benefits Administration Committee may from time to
time establish limits (and as appropriate, modify any
such limit) on the amount or percentage of Participant
Deposits that may be made by or on behalf of Highly
Compensated Employees for the Plan Year. In addition,
the Benefits Administration Committee may prospectively
decrease the rate of Participant Deposits of any
Participant at any time, if the Benefits Administration
Committee determines that such action is necessary or
desirable to enable the Plan to comply or to ensure
compliance with the average deferral percentage
limitations or the requirements of Sections 401(k),
402(g), 415 or other applicable provisions of the Code.
(iv) For the Plan Year beginning October 1, 1997 ("1997 Plan
Year"), the Benefits Administration Committee may elect
to calculate the maximum deferral percentage for Highly
Compensated Employees who are eligible to participate
in the Plan based upon either (A) the average deferral
percentage of Non-Highly Compensated Employees who are
eligible to participate in the Plan for the 1997 Plan
Year, or (B) the average deferral percentage of
employees who were Non-Highly Compensated Employees who
were eligible to participate in the Plan for the 1996
Plan Year (determined using the definition of highly
compensated employee as in effect under Section 414(q)
of the Code as in effect for the 1996 Plan Year prior
to the amendment of Section 414(q) by the Small
Business Job Protection Act of 1996).
(v) For Plan Years beginning on or after January 1, 1998,
the maximum deferral percentage for Highly Compensated
Employees for a Plan Year shall be calculated in
accordance with Section 3.02(d)(i) using the average
deferral percentage for Non-Highly Compensated
Employees for the preceding Plan Year ("Prior Year
Method") unless the Benefits Administration Committee
has elected to determine the maximum deferral
percentage of Highly Compensated Employees based upon
the average deferral percentage of Non-Highly
Compensated Employees for the current Plan Year
("Current Year Method"). If the Benefits Administration
Committee elects to use the Current Year Method, the
election shall apply to all subsequent Plan Years
unless the Internal Revenue Service has authorized the
Plan to again utilize Prior Year Method described in
Section 3.02(d)(i) above.
(vi) If the average deferral percentage of Highly
Compensated Employees for any Plan Year exceeds the
applicable deferral percentage limitation for such
year, each affected Highly Compensated Employee shall
receive a distribution of the amount of his excess
Participant Deposits, together with income on such
Participant Deposits for the Plan Year in which the
contributions were made (but not including any gap
period income). Such distribution shall be made on or
before the last day of the Plan Year following the Plan
Year to which the excess Participant Deposits relate;
provided that the relevant Employer will be subject to
an excise tax if excess Participant Deposits are not
distributed within two and one-half months following
the close of the Plan Year in which the Participant
Deposits were made. The aggregate amount of
Participant Deposits to be refunded shall be determined
by reducing (or leveling) the maximum allowable level
of Participant Deposits to a percentage determined by
the Benefits Administration Committee that, if applied
to all Highly Compensated Employees who are eligible to
participate in the Plan with a deferral percentage
above that level, would result in the average deferral
percentage test being satisfied. The aggregate amount
required to be refunded shall be allocated among (and
distributed to) Highly Compensated Employees who are
eligible to participate in the Plan by reducing (or
leveling) the maximum dollar amount of Participant
Deposits for the Plan Year to an amount determined by
the Committee that, if applied to all Highly
Compensated Employees who are eligible to participate
in the Plan with Participant Deposits above that level,
would result in a refund of Participant Deposits equal
to the aggregate amount of excess Participant Deposits
calculated in accordance with the preceding sentence.
The amount required to be distributed to any Highly
Compensated Employees who are eligible to participate
in the Plan shall be reduced by the amount of excess
Participant Deposits (if any) previously distributed to
the Participant in order to comply with Section
402(g)(5) of the Code.
(vii) To the extent that Participant Deposits refunded to
Highly Compensated Employees in accordance with Section
3.02(d)(vi) above resulted in Matching Contributions
being allocated to the Participant's account, such
Matching Contributions, together with all income on
such Matching Contributions for the Plan Year to which
the Matching Contributions relate (but not including
any gap period income) shall be forfeited.
(viii) In the event that the Benefits Administration Committee
determines that Section 401(k) of the Code (including
the regulations thereunder) may be applied in a manner
different than that prescribed in this Section 3.02(d),
the Benefits Administration Committee, in its
discretion, may make appropriate adjustments. In
addition, the Benefits Administration Committee may
promulgate such further rules and procedures as it may
deem necessary for the proper application of this
Section 3.02(d).
(ix) Following the application of this Section 3.02(d) and
the average contribution requirements of Section
4.01(b), the Administrator shall make further
adjustments as necessary to comply with the "multiple
use" test of Section 401(m)(9) of the Code and the
regulations thereunder.
Section 3.03. Participant Contributions. (a) Amount of
Participant Contributions. Each Participant shall designate the rate of
his Participant Contributions at the time of his election to participate
in the Plan, which may be at the rate of any whole percentage of his
compensation up to 7%. Such Participant Contributions shall be made for
the Participant through regular payroll deductions from his Compensation.
(b) Change in or Suspension of Contributions. A Participant may
change his designated rate of Participant Contributions at any time
effective as soon as administratively feasible following Timely Notice.
Section 3.04. Payment of Participant Deposits and Participant
Contributions to Trustee. Each Employer shall remit to the Trustee within
15 business days after the end of each calendar month the amount withheld
from the Compensation of its Employees during such month as Participant
Deposits and/or Participant Contributions under the Plan. Such amounts
shall be credited to each respective Participant's Account(s).
Section 3.05. Transfers of Employment. Any person who
performed services as an employee of an Employer in any capacity other
than as an Employee as defined herein, shall, upon becoming an Employee,
be credited with his employment in such other capacity, for purposes of
determining whether he has completed the Minimum Eligibility Service.
Section 3.06. Status of Leased Employees. A person who is a
"leased employee" within the meaning of Code Section 414(n) or (o) shall
not be eligible to participate in the Plan, but in the event such a person
was participating or subsequently becomes eligible to participate herein,
credit shall be given for the person's service as a "leased employee" with
any Employer toward completion of the Plan's eligibility requirements.
Section 3.07. Rollover Contributions. In accordance with
uniform rules prescribed by the Benefits Administration Committee and in
accordance with Code Sections 402 and 408, an Employee may make a rollover
to the Plan from another plan qualified under Code Section 401(a) or from
a conduit individual retirement account. In the event an Employee makes a
rollover contribution prior to becoming eligible to participate under
Section 3.01, he shall be considered a Participant in the Plan solely for
purposes of such rollover contribution and the gains or losses
attributable thereto. An Employee shall be entitled to allocate and/or
reallocate his rollover contributions to one or more of the Investment
Funds in a manner consistent with the rules described in Section 5.02.
Section 3.08. Special Rules Applicable to Returning Veterans.
The following provisions shall apply to a Participant who is absent from
active employment with any Employer on account of military service and who
returns from such military service to active employment with any Employer
under terms and conditions that entitle the Participant to the protections
of the Uniformed Services Employment and Reemployment Rights Act of 1994,
as amended:
(a) The Employer shall contribute to the Trust as an Employer
Contribution an amount equal to the Employer Contribution that the
Participant would have had allocated to his account had he remained
continuously employed with the Employer during the period of military
service.
(b) The Participant may elect (either in lieu of or in addition
to the Participant Deposits and/or Participant Contributions that the
Participant may elect to make under Section 3.02 or 3.03, respectively
with respect to Compensation earned on and after his reemployment) to make
Participant Deposits or Participant Contributions, with respect to his
period of eligible military service ("Make-up Contributions"). The
Participant may elect Make-up Contributions during the period that begins
on the date of the Participant's reemployment from covered military
service and extends for the lesser of: (i) five years from the date of
reemployment, or (ii) a period equal to three times the Participant's
period of covered military service. The Make-up Contributions may not
exceed the maximum amount of Participant Deposits or Participant
Contributions that would have been permitted under the Plan and applicable
Code provisions had the Participant been continuously employed by the
Employer during the period of military service, reduced by the amount of
Participant Deposits or Participant Contributions (if any) actually made
by the Participant during the period of military service.
(c) The Employer shall make Employer Contributions with respect
to Make-up Contributions in an amount equal to the amount of Employer
Contributions that would have been made on behalf of the Participant had
the Make-up Contributions been made during the period of military service.
(d) For purposes of determining the amount of the Employer
Contributions under Section 3.08(a) or the maximum amount of Make-up
Contributions permissible under Section 3.08(b), the Participant's
compensation during the period of eligible military service shall be
deemed to equal the rate of pay that the Participant would have received
from the Employer but for the military service; provided that if such
compensation cannot be determined with reasonable certainty, the
Participant's compensation for the period of military service shall be
deemed to equal the Participant's average compensation from the Employer
for the twelve (12) month period immediately preceding the Participant's
military service (or if the Participant was employed for less than the
full twelve (12) month period immediately preceding his military service,
the Participant's average compensation from the Employer for the
Participant's entire period of employment with the Employer preceding the
Participant's military service).
(e) No adjustment shall be made to a Participant's Accounts to
reflect the gain or loss that would have been credited (or charged) to the
Participant's Accounts had the Employer Contributions and Make-up
Contributions described in this Section 3.08 been made during the period
of military service rather than following the Participant's return to
active employment.
ARTICLE IV. EMPLOYER CONTRIBUTIONS
Section 4.01. Employer Contributions. (a) For each payroll
period, the Employers shall contribute to the Plan, on behalf of each
Participant an amount equal to: (i) 3% of his Compensation for such
payroll period if combined Participant Deposits and Participant
Contributions total 0% or 1% of his Compensation; (ii) 4% of his
Compensation for such payroll period if his Participant Deposits and
Participant Contributions total 2% or 3% of his Compensation; or (iii) 5%
of his Compensation for such payroll period if his Participant Deposits
and Participant Contributions total 4% or greater of his Compensation.
Amounts in excess of 3% of Compensation shall be deemed "Matching
Contributions" for purposes of the limits and rules described in Section
4.01(b). All such amounts shall be credited to the Participant's Employer
Contributions Account.
(b) Maximum Participant Contributions and Matching
Contributions.
(i) The Plan is subject to the limitations of Code Section
401(m), which are incorporated herein by this
reference. Accordingly, and except as provided in
Section 4.01(b)(iv) and (v), the average contribution
percentage for any Plan Year for the group of Highly
Compensated Employee who are eligible to participate in
the Plan shall not exceed the greater of:
(A) 125 percent of the average contribution percentage for
the preceding Plan Year for Participants other than
Highly Compensated Employees who are eligible to
participate in the Plan ("Non-Highly Compensated
Participants who are eligible to participate in the
Plan"); or
(B) the lesser of (A) the average contribution percentage
for the group of Non-Highly Compensated Employees for
the preceding Plan Year plus two percent; or (B) two
times the average contribution percentage for the group
of Non-Highly Compensated Employees who are eligible to
participate in the Plan for the preceding Plan Year.
(ii) The contribution percentage for any Non-Highly
Compensated Employees who are eligible to participate
in the Plan is calculated by dividing the amount of the
Employee's Participant Contributions and Matching
Contributions for the preceding Plan Year by the
Participant's compensation (as defined in Section
414(q)(4) and 415(c)(3) of the Code) for such preceding
Plan Year. The contribution percentage for any Highly
Compensated Employees who are eligible to participate
in the Plan is calculated by dividing the amount of the
Employee's Participant Contributions and Matching
Contributions for the Plan Year by the Employee's
compensation (as defined in Section 414(q)(4) and
415(c)(3) of the Code) for the Plan Year. The average
contribution percentage for the group of Highly
Compensated Employees who are eligible to participate
in the Plan and the group of Non-Highly Compensated
Employees who are eligible to participate in the Plan
is the average of the contribution percentages
calculated for each member of the applicable group. In
accordance with rules promulgated by the Internal
Revenue Service, the Benefits Administration Committee,
in calculating an Employee's contribution percentage,
may elect to take into account (in calculating
contribution percentages) Participant Deposits and
qualified non-elective contributions (if any).
(iii) The Benefits Administration Committee may from time to
time establish limits (and as appropriate, modify any
such limit) on the amount or percentage of Participant
Contributions and Matching Contributions that may be
made by or on behalf of Highly Compensated Employees
for the Plan Year. In addition, the Benefits
Administration Committee may prospectively decrease the
rate of Participant Contributions and Matching
Contributions of any Participant if the Benefits
Administration Committee determines that such action is
necessary or desirable to enable the Plan to comply or
to ensure compliance with the average contribution
percentage limitations or the requirements of Sections
401(m), 415 or other applicable provisions of the Code.
(iv) For the Plan Year beginning October 1, 1997 ("1997 Plan
Year"), the Benefits Administration Committee may elect
to calculate the maximum contribution percentage for
Highly Compensated Employees who are eligible to
participate in the Plan based upon either (A) the
average contribution percentage of Non-Highly
Compensated Employees who are eligible to participate
in the Plan for the 1997 Plan Year, or (B) the average
contribution percentage of employees who were Non-
Highly Compensated Employees who are eligible to
participate in the Plan for the 1996 Plan Year
(determined using the definition of highly compensated
employee as in effect under Section 414(q) of the Code
as in effect for the 1996 Plan Year prior to the
amendment of Section 414(q) by the Small Business Job
Protection Act of 1996).
(v) For Plan Years beginning on or after January 1, 1998,
the maximum contribution percentage for Highly
Compensated Employees who are eligible to Participate
in the Plan for a Plan Year shall be calculated in
accordance with Section 4.01(b)(i) using the average
contribution percentage for Non-Highly Compensated
Employees who were eligible to participate in the Plan
for the preceding Plan ("Prior Year Method") unless the
Benefits Administration Committee has elected to
determine the maximum contribution percentage of Highly
Compensated Employees who are eligible to participate
in the Plan based upon the average contribution
percentage of Non-Highly Compensated Employees who are
eligible to participate in the Plan for the current
Plan Year ("Current Year Method"). If the Benefits
Administration Committee elects to use the Current Year
Method, the election shall apply to all subsequent Plan
Years unless the Internal Revenue Service has
authorized the Plan to again utilize the Prior Year
Method described in Section 4.01(b)(i) above.
(vi) If the average contribution percentage of Highly
Compensated Employees who are eligible to participate
in the Plan for any Plan Year exceeds the applicable
contribution percentage limitation for such year, each
affected Highly Compensated Employee who is eligible to
participate in the Plan shall receive a distribution of
the amount of his excess Participant Contributions and
Matching Contributions, together with income on such
contributions for the Plan Year in which the
contributions were made (but not including any gap
period income); provided that excess Matching
Contributions and income thereon shall be forfeited if
and to the extent the Highly Compensated Employee is
not vested in such amounts. Such distribution shall be
made on or before the last day of the Plan Year
following the Plan Year to which the excess Participant
Contributions and Matching Contributions relate;
provided that the Employer will be subject to an excise
tax if excess Participant Contributions and Matching
Contributions are not distributed within two and one-
half months following the close of the Plan Year to
which the excess contributions relate. The aggregate
amount of Participant Contributions and Matching
Contributions to be refunded shall be determined by
reducing (or leveling) the maximum allowable level of
Participant Contributions and Matching Contributions to
a percentage determined by the Benefits Administration
Committee that, if applied to all Highly Compensated
Employees are eligible to participate in the Plan with
a contribution percentage above that level, would
result in the average contribution percentage test
being satisfied. The aggregate amount required to be
refunded shall be allocated among (and distributed to)
Highly Compensated Employees eligible to participate in
the Plan (or where applicable in the case of
Participant Contributions and Matching Contributions,
forfeited) by reducing (or leveling) the maximum dollar
amount of Matching Contributions for the Plan Year to
an amount determined by the Benefits Administration
Committee that, if applied to all Highly Compensated
Employees with Participant Contributions and Matching
Contributions above that level, would result in a
refund (or where applicable, forfeiture) of Participant
Contributions and Matching Contributions equal to the
aggregate amount of excess Participant Contributions
and Matching Contributions calculated in accordance
with the preceding sentence. The determination of the
amount of excess Participant Contributions and Matching
Contributions required to be distributed to affected
Highly Compensated Employee eligible to participate in
the Plan shall be made after first determining the
amount of any excess deferrals under Section 402(g) of
the Code and then after determining the excess
contributions under Section 401(k) of the Code.
(vii) In the event that the Benefits Administration Committee
determines that Section 401(m) of the Code (including
the regulations thereunder) may be applied in a manner
different than that prescribed in this Section 4.01(b),
the Benefits Administration Committee, in its
discretion, may make appropriate adjustments. In
addition, the Benefits Administration Committee may
promulgate such further rules and procedures as it may
deem necessary for the proper application of this
Section 4.01(b).
(viii) Following the application of this Section 4.01(b) and
the average deferral requirements of Section 3.02(e),
the Administrator shall make further adjustments as
necessary to comply with the "multiple use" test of
Section 401(m)(9) of the Code and the regulations
thereunder.
Section 4.02. Funding Policy. To the extent that the funding
policy of the Plan is not expressly set forth herein, the Benefits
Administration Committee shall establish such funding policy, which may
include the establishment of goals and objectives for the Trustee and
Investment Managers in their management of assets of the Trust, and shall
communicate such policy to the parties responsible for its implementation.
Section 4.03. Maximum Annual Additions. (a) The Plan is
subject to the limitations on benefits and contributions imposed by Code
Section 415, which are incorporated herein by this reference. The
limitation year shall be the Plan Year.
(b) Any amounts that are not allocable to a Participant because
of the Section 415 limitations shall be allocated among other eligible
Participants to the extent that such additional allocation would not
exceed the Section 415 limits with respect to such other Participants. If
all Participants are precluded from receiving additional allocations as a
result of the Section 415 limitations, the unallocable amount shall be
credited to a suspense account subject to the following conditions:
(i) amounts in the suspense account shall be allocated
among eligible Participants at such time, including
termination of the Plan or complete discontinuance of
Employer contributions, as the Section 415 limitations
permit;
(ii) no investment gains or losses shall be allocated to the
suspense account;
(iii) no further Employer Contributions shall be permitted
until the Section 415 limitations permit the allocation
of the suspense account to Participants; and
(iv) upon termination of the Plan, any unallocated amounts
in the suspense account that are still unallocable
because of the limitations of Section 415 shall revert
to the Employers.
(c) To the extent that a Participant participates in multiple
plans, benefits under any defined benefit pension plan shall be restricted
to the extent necessary to comply with the requirements of Code Section
415(e) prior to the restriction of contribution or benefits under any
other plan.
(d) If, notwithstanding the foregoing provisions of this
Section, the limitations of Section 415 are exceeded as a result of a
reasonable error in estimating a Participant's compensation, a reasonable
error is estimating the amount of Participant Deposits or Participant
Contributions that a Participant may elect under the limits of Section
415, the allocation of forfeitures, or such other facts and circumstances
as the Commissioner of the Internal Revenue Service may prescribe, there
shall be deducted from the Participant's account and returned to the
Participant such portion of his Participant Deposits or Participant
Contributions, together with earnings thereon, as may be necessary to
satisfy Section 415. If the requirements are still not satisfied, there
shall be deducted from the Participant's account all or a portion of the
Employer Contribution for such limitation year as may be necessary to
comply with Section 415. Such amounts shall be reallocated among other
eligible Participants to the extent that such additional allocation would
not exceed the Section 415 limits with respect to such other Participants.
If all Participants are precluded from receiving additional allocations as
a result of the Section 415 limitations, the unallocable amount shall be
credited to a suspense account in accordance with the conditions described
above.
ARTICLE V. INVESTMENT; PARTICIPANT'S ACCOUNTS
Section 5.01. Establishment of Accounts. Each Participant
shall have one or more Accounts established for him. Such Accounts shall
consist of (i) a Participant Deposits Account; (ii) a Participant
Contributions Account; (iii) an Employer Contributions Account; and (iv)
any other Account or Accounts the Benefits Administration Committee deems
reasonably necessary.
To the extent necessary or appropriate to provide for the proper
administration of the Plan, the Accounts of Participants shall include
separate balances for interests invested in each Investment Fund, for
interests derived from different sources of contributions, and for such
other purposes as the Benefits Administration Committee shall determine.
Section 5.02. Investment of Accounts. (a) The Benefits
Administration Committee shall permit each Participant to invest his
Accounts in one or more of the Investment Funds available for such
purpose. A Participant who makes an election under this Section 5.02
shall elect to have all or any portion (expressed as a whole percentage)
of his Accounts invested in any one or more of the Investment Funds then
available. Further, any such election may be changed as soon as
administratively possible following any Valuation Date and on Timely
Notice, but shall remain in effect for successive Plan Years unless
changed by the Participant.
(b) A Participant may elect to reallocate his Accounts among the
Investment Funds as soon as administratively possible following any
Valuation Date and on Timely Notice. A Participant who elects to make
such a reallocation shall elect to have all or any portion (expressed as a
whole percentage) of his Accounts invested in any one or more Investment
Funds transferred to one or more other Investment Funds (in any whole
percentage of the amounts being transferred).
(c) In the event that a Participant shall fail to direct the
investment of his Accounts subject to his direction or fail to replace any
directions which may have been suspended or revoked, then such Accounts
shall be invested on the Participant's behalf in an Investment Fund
designated by the Benefits Administration Committee on a uniform and
nondiscriminatory basis for all similarly situated Participants.
(d) Notwithstanding the foregoing, a Participant may not
allocate more than 50 percent of his Accounts to the Johnson Controls
Common Stock Fund (or by whatever name such equivalent fund is commonly
known).
Section 5.03. Allocations to Employer Contributions Accounts.
The Employer Contributions Account maintained for each eligible
Participant shall be credited as of each payroll period, with his
allocable share of Employer Contributions and forfeitures for such Plan
Year.
Section 5.04. Valuation of Accounts. As of each Valuation
Date, the Accounts of each Participant shall be adjusted to reflect the
effect of income, collected and accrued, realized and unrealized gains and
losses, expenses and all other transactions during the period commencing
on the day after the preceding Valuation Date and ending on the current
Valuation Date with respect to the applicable Investment Funds. As soon
as practicable after the end of each calendar quarter, each Participant
shall be provided with a statement reflecting the status of his Accounts.
Section 5.05. Transfer of Account. (a) Any Participant who
ceases to be an Employee but remains an employee of an Employer or
Affiliate may elect, if such Employee is fully vested in his or her
Account, to have his or her Account transferred to a qualified defined
contribution plan of such Employer or Affiliate under which he or she
shall be covered, provided such plan has provisions for accepting such
transfer. Any such election must be made within 30 days of the date on
which the employee ceased to be an Employee.
(b) If a Participant is in a group of Participants who ceased to
be Employees because the contract between their Employer and the United
States Government for the services performed by this group of Participants
has been awarded by the United States Government to a successor
contractor, such a Participant may elect to have his or her Account
transferred to a qualified defined contribution plan of the successor
contractor, provided such plan has provisions for accepting such transfers
and provided, further, that the date as of which such transfer is to be
made shall be the same for all Participants in that group who have elected
such transfers.
Section 5.06. Transfer to the Participant's Account. (a) Any
account that has been maintained for an Employee under a qualified defined
contribution plan (other than this Plan) of an Employer or Affiliate and
that in accordance with the terms of said plan is, subject to the
Committee's consent, to be transferred to this Plan shall be credited to
this Plan upon such transfer and shall become a Special Account with
respect to the Participant under this Plan. Any such Special Account
shall be subject to all the provisions of this Plan as if originating from
contributions made under this Plan and as if the investment results
obtained on such contributions before such transfer were obtained under
this Plan.
(b) The Committee may withhold its consent to a transfer
described in subsection (a) if in its sole discretion it determines that
the account to be transferred to this Plan could not be properly
administered in accordance with this Plan, or could cause this Plan to
cease to meet the requirements of Section 401(a) of the Code. Before
giving its consent, the Committee shall require the Employee to make an
investment election, in accordance with the provisions of Section 5.02,
with respect to the Special Account resulting from the transfer.
Section 5.07. Voting of Company Stock. Company Stock held by
the Trustee (in the Johnson Controls Common Stock Fund (or by whatever
name such equivalent fund is commonly known)) shall be voted by the
Trustee in accordance with Participant's directions, as determined under
the terms of the Trust Agreement.
ARTICLE VI. VESTING AND DISTRIBUTION OF
ACCOUNTS UPON TERMINATION OF EMPLOYMENT
Section 6.01. Vesting. The entire balance in such
Participant's Accounts shall be fully vested and nonforfeitable at all
times and shall be paid to him or his Beneficiary at the time and in the
manner described in Section 6.02.
Section 6.02. Time and Form of Distributions. (a) A
Participant's interest in his Accounts shall be distributed to him as soon
as practicable following the Valuation Date which next follows his
termination of employment with the Employers. Amounts credited to his
Accounts after such distribution shall be distributed as soon as
practicable after the Valuation Date which next follows the date on which
such amounts are credited to his Accounts. Notwithstanding the foregoing,
if at any time the value of the Participant's interest in his Accounts
exceeds $3,500 ($5,000 on and after January 1, 1998) distribution shall be
made at the time prescribed above only if the Participant consents thereto
in the form prescribed by the Benefits Administration Committee or its
designee. If the Participant fails to consent within a reasonable time,
he shall be deemed to have elected to defer distribution of his Accounts,
and distribution shall be made as of any subsequent Valuation Date elected
by the Participant upon Timely Notice, but not later than the 10th of the
month following the month in which the Participant attains age 65 (or as
soon as administratively practicable thereafter), provided that
distribution shall in all events be completed not later than five years
after the date of the Participant's death. In any event, distribution
shall commence not later than 60 days after the latest of the close of the
Plan Year in which (i) the Participant attains age 65, or (ii) the
Participant actually retires, unless the Participant elects to defer the
distribution.
(b) In the case of a Participant who has attained age 70-1/2 and
has not retired, distribution of such Participant's Accounts shall
commence on or before April 1 of the calendar year which next follows his
attainment of such age, in installments not less than the amounts required
to be distributed under Code Section 401(a)(9). This Section 6.02(b)
shall not apply to a Participant who attains age 70-1/2 after December 31,
1998 unless such Participant is a 5-percent owner (as defined in Code
Section 416(i)).
(c) Except as provided in Section 6.02(d), any distribution due
under Section 6.02 shall be paid in a lump sum distribution in cash.
(d) Notwithstanding the foregoing, for a Participant whose
account originated from the Supplemental Variable Annuity Plan or the
Thrift and Investment Plan, distribution will be in the form of a single
life annuity contract for unmarried Participants and for married
Participants an annuity for the Participant's life with one-half of the
monthly annuity continued to the Participant's spouse for life, if the
spouse survives the Participant.
A Participant may elect instead the lump sum option by filing a
written election with the Administrator after he has been provided an
explanation of the two forms of distribution available and a period of at
least 30 days, but not more than 90 days has elapsed from the date the
explanation was provided to the date of the distribution; provided that
such 30 day period may be reduced to 7 days upon the consent of the
Participant (and his spouse, if any).
In the case of married Participants, the election of a lump sum is
valid only if, within the period specified above after a written
explanation is provided to the spouse, the Participant's spouse consents
to the election in writing witnessed by a notary public or Plan
representative.
In the case of distribution upon death, distribution shall occur in
a lump sum within an administratively reasonable period (not to exceed 6
months) after the Participant's death but not prior to the date that the
Participant would have attained age 55. Notwithstanding the foregoing, if
the Beneficiary is the Participant's spouse, distribution will be in the
form of a single life annuity for the spouse' lifetime commencing within
an administratively reasonable period (not to exceed 6 months) following
the Participant's death, unless the spouse elects, after notice and a 60
day consideration period, to defer distribution to a date no later than
the March 1 following the date the Participant would have attained age 65
and/or to take the distribution in the form of a single lump sum.
(e) In any case of deferred distribution hereunder, the
undistributed balance shall continue to share in allocations of net
increase or decrease in value under Section 5.04.
Section 6.03. Compliance with Code Section 401(a)(9). The
provisions of the Plan are intended to comply with Code Section 401(a)(9)
which prescribes certain rules regarding minimum distributions and
requires that death benefits be incidental to retirement benefits. All
distributions under the Plan shall be made in conformance with Code
Section 401(a)(9) and the regulations thereunder which are incorporated
herein by reference. The provisions of the Plan governing distributions
are intended to apply in lieu of any default provisions prescribed in
regulations; provided, however, that Code Section 401(a)(9) and the
regulations thereunder override any Plan provisions inconsistent with such
Code Section and regulations.
Section 6.04. Eligible Rollover Distributions. Notwithstanding
any provision of the Plan to the contrary that would otherwise limit a
distributee's election under this Section, a distributee may elect, at the
time and in the manner prescribed by the Benefits Administration
Committee, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a
direct rollover.
(a) "Eligible rollover distribution" means any distribution of
all or any portion of the balance to the credit of the distributee, except
that an eligible rollover distribution does not include: any distribution
that is one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code; and the
portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(b) "Eligible retirement plan" means an individual retirement
account described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan described
in Section 403(a) of the Code, or a qualified trust described in Section
401(a) of the Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover distribution
to the surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(c) "Distributee" includes an employee or former employee. In
addition, the employee's or former employee's surviving spouse and the
employee's or former employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with regard to the interest
of the spouse or former spouse.
(d) "Direct rollover" means a payment by the Plan to the
eligible retirement plan specified by the distributee.
ARTICLE VII. WITHDRAWALS DURING EMPLOYMENT AND LOANS
Section 7.01. Hardship Withdrawals. (a) Prior to the
termination of his employment, on a showing by the Participant of an
immediate and heavy financial need that cannot be met from other resources
that are reasonably available to the Participant, a Participant shall be
permitted, on Timely Notice, to make a withdrawal of an amount not
exceeding the lesser of (i) the amount needed to satisfy such need,
including any amounts necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result from the withdrawal,
or (ii) 100% of the Participant's Deposit Account, less any earnings
credited thereto on or after January 1, 1989. The amount of taxes
reasonably anticipated to result from any withdrawal shall be determined
pursuant to rules established by the Benefits Administration Committee, in
its sole discretion.
(b) For purposes of this Section, "an immediate and heavy
financial need" shall be deemed to exist if the distribution is on account
of:
(i) Expenses for medical care described in Code Section
213(d) previously incurred by the Participant, the
Participant's spouse, or any dependent of the
Participant (as defined in Code Section 152) or
necessary for any such person to obtain such medical
care;
(ii) Costs directly related to the purchase of a principal
residence for the Participant (excluding mortgage
payments);
(iii) Payment of tuition and related educational fees for the
next 12 months of post-secondary education for the
Participant, the Participant's spouse, children or
dependents (as defined in Code Section 152);
(iv) Payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure
on the mortgage on that residence; or
(v) Other events provided for in revenue rulings, notices
or other documents of general applicability published
by the Commissioner of Internal Revenue, or determined
by the Benefits Administration Committee, on a uniform
and nondiscriminatory basis, to be of a character that
is similar to the needs described in (i) - (iv) above.
(c) In order to demonstrate that a need cannot be met from other
resources, the Participant may be required to provide such documents or
information as the Benefits Administration Committee may require and to
certify that the need cannot be relieved (i) through reimbursement from
insurance, (ii) by reasonable liquidation of assets, (iii) by cessation of
Participant Deposits under the Plan, or (iv) by other withdrawals under or
loans from this or any other plan or a loan from a commercial lender, on
reasonable terms.
(d) The withdrawal shall be permitted only if the Participant
has first withdrawn or borrowed all amounts available to him under this or
any other Employer plan. The Participant's Participant Deposits shall be
suspended for a period of 12 months following such withdrawal. The amount
which the Participant may contribute as Participant Deposits for the Plan
Year following such withdrawal shall not exceed the amount described in
Section 3.02(d)(i), reduced by the amount of the Participant's actual
Participant Deposits for the Plan Year in which the withdrawal occurred.
(e) Distributions pursuant to this Section shall be made as soon
as administratively feasible after the withdrawal is approved.
(f) Distributions under this Section shall be subject to the
spousal consent rules of Section 6.02(d) if applicable.
Section 7.02. Withdrawal After Age Fifty-Nine and One-Half. A
Participant who has attained the age 59-1/2 may elect, on Timely Notice, to
withdraw any part of all of the balances credited to his Participant
Deposits Account; provided that any spousal consent required pursuant to
Section 6.02(d) is obtained. Distribution pursuant to this Section shall
occur as soon as administratively feasible after the Valuation Date which
next follows the date on which such election is made.
Section 7.03. Withdrawal from Participant Contributions
Account. (a) A Participant may at any time before termination, but not
more often than once in any six month period, elect to withdraw any
portion of his Participant Contributions Account; provided that any
spousal consent required pursuant to Section 6.02(d) is obtained.
(b) In the event that a Participant makes a withdrawal from his
Participant Contributions Account, he shall be required to suspend
Participant Contributions in accordance with Section 3.03 and shall not be
permitted to resume Participant Contributions, in accordance with Section
3.03, prior to the expiration of a period of six months from the date of
such withdrawal.
Section 7.04. Rollovers from Other Plans. A Participant may
not generally withdraw amounts rolled over to this Plan from another plan;
provided that, if such amounts have been rolled over from another plan of
an Employer or Affiliate, (i.e., into a "Special Account"), such amounts
may be withdrawn once each three months to the extent such amounts are
attributable to after-tax contributions and in accordance with Article VII
in all other respects. Any such distributions shall be subject to the
spousal consent rules of Section 6.02(d) if applicable.
Section 7.05. Miscellaneous. In the event of the death of a
Participant after his election to make a withdrawal under this Article
VII, but prior to distribution thereof, the withdrawal election shall be
deemed revoked.
ARTICLE VIII. PLAN ADMINISTRATION
Section 8.01. Allocation of Responsibility Among Fiduciaries
for Plan and Trust Administration. The Board, Benefits Administration
Committee and Trustee shall be "Named Fiduciaries" within the meaning of
Section 402(a)(2) of ERISA. The Named Fiduciaries shall have only those
specific powers, duties, responsibilities and obligations as are
specifically given them under this Plan or a Trust Agreement. In general,
the Board shall have the sole authority to appoint and remove the Trustee
and the members of the Benefits Administration Committee, and to amend or
terminate the Plan in whole or in part. The Benefits Administration
Committee shall have the sole responsibility for the administration of
this Plan, which responsibility is specifically described in this Plan,
for appointing and removing any Investment Managers, for monitoring the
performance of the Trustee and any Investment Managers, and for
determining a funding policy and investment objectives for the Plan. The
Trustee shall have the sole responsibility for the administration of a
Trust Agreement and the management of the assets held thereunder, except
to the extent such responsibility is delegated to any Investment Managers
in accordance with such Trust Agreement. Each Named Fiduciary may rely
upon any direction, information or action of any other Named Fiduciary as
being proper, and is not required to inquire into the propriety of any
such direction, information or action. It is intended under this Plan
that each Named Fiduciary shall be responsible for the proper exercise of
his own powers, duties, responsibilities and obligations under this Plan
and shall not be responsible for any act or failure to act of another
Named Fiduciary. An individual may serve in more than one fiduciary
capacity hereunder.
Section 8.02. Benefits Administration Committee. (a) The
general responsibility for carrying out the provisions of the Plan shall
be placed in a Benefits Administration Committee of not less than three
officers, directors, or employees of the Employers or any Affiliate
thereof appointed from time to time by the Board. The Benefits
Administration Committee shall be deemed the Plan Administrator under
ERISA. The Benefits Administration Committee may appoint from its members
such officers and/or subcommittees with such powers as it shall determine
and may authorize one or more of its members or any agent to execute or
deliver any instrument or make any payment on its behalf. The Benefits
Administration Committee may allocate any fiduciary responsibility to one
or more of its members and delegate any fiduciary responsibility to any
other person or persons.
(b) The Benefits Administration Committee shall hold meetings
upon such notice, at such place and at such times as it may from time to
time determine. A meeting may be held in any manner as may be determined
by the Benefits Administration Committee, but in any event, where all
members are not physically present, the actions of the Benefits
Administration Committee shall be reduced to writing and sent to all
members within ten (10) days of the date of such meeting.
(c) A majority of the Benefits Administration Committee shall
constitute a quorum, and any action which the Plan authorizes or requires
the Benefits Administration Committee to take shall require the written
approval or the affirmative vote of a majority of its members.
(d) Members of the Benefits Administration Committee shall not
be paid any compensation from the assets of the Plan.
(e) Subject to the provisions of the Plan, the Benefits
Administration Committee may from time to time establish rules for the
transaction of its business. The determination of the Benefits
Administration Committee as to any disputed question pertaining to the
Plan shall be conclusive.
(f) Any member of the Benefits Administration Committee may
resign by delivering his written resignation to the Board. Any member of
the Benefits Administration Committee may be removed by the Board, and
such removal shall be effective at such time as is provided for by the
Board. Notice of such removal shall be conveyed to the member so removed
in the manner provided by the Board.
(g) In addition, the Benefits Administration Committee shall
have the following specific duties and responsibilities under the Plan:
(i) to determine a funding policy and investment objectives
in accordance with Section 4.02 herein; provided,
however, that in accomplishing the foregoing, the
Benefits Administration Committee shall not be deemed
to be superseding, restricting or otherwise modifying
the exclusive investment authority and discretion that
may have been delegated to the Trustee or any
Investment Managers;
(ii) to adopt such procedures as the Benefits Administration
Committee may deem appropriate and advisable to monitor
and review the performance of any Investment Managers
so as to determine whether the Plan assets have been
managed in accordance with the funding policy and
objectives established by the Benefits Administration
Committee and with the requirements relating to the
fiduciary duties and responsibilities to exercise
prudence, to diversify investment of Plan assets and to
refrain from engaging in certain "prohibited
transactions" that are detailed in ERISA;
(iii) to obtain such periodic written reports or other
accounting as the Benefits Administration Committee may
desire from such Investment Managers in regard to the
performance of their respective delegated duties and
responsibilities and to meet semiannually, or at such
other intervals as the Benefits Administration
Committee may determine, with such Investment Managers
for the purpose of reviewing and evaluating such
reports or other accountings with them;
(iv) to establish administrative procedures to protect the
confidentiality of Participants' decisions with respect
to the investment of their Accounts in the Company
Stock Fund and to their directions to the Trustee
concerning the exercise of shareholder rights with
respect to shares of Company Stock allocated to their
Accounts and monitor the implementation of such
procedures to insure that they are being followed;
(v) to prepare a written report with respect to the
Benefits Administration Committee's review and
evaluation of the performance of such Investment
Managers, including therein any findings and
conclusions of the Benefits Administration Committee
concerning the propriety and/or advisability of either
retaining or removing and replacing any such Investment
Manager, such report to be made at least annually and
at such other time that the Benefits Administration
Committee deems necessary and advisable;
(vi) to monitor the performance of the Trustee on an annual
or more frequent basis as the Board deems necessary and
advisable and to report its recommendations to the
Board;
(vii) to formulate, issue and apply rules and regulations;
(viii) to interpret and apply the provisions of the Plan;
(ix) to make appropriate determinations and calculations;
(x) to authorize and direct distributions or benefit
payments;
(xi) to adopt and prescribe the use of necessary forms; and
(xii) to prepare and file reports, notices, and any other
documents relating to the Plan which may be required by
law.
The Benefits Administration Committee shall exercise any authority
allocated to it hereunder in any manner consistent with ERISA and the
applicable provisions of the Plan.
Section 8.03. Use of Professional Services. (a) The Benefits
Administration Committee may retain counsel, employ agents and provide for
clerical, accounting and actuarial services as it may require.
Section 8.04. Fees and Expenses. Where the Benefits
Administration Committee utilizes services as provided in Section 8.03, it
shall review the fees and other costs for these services and shall
authorize the payment of such fees and costs. Such fees and costs and
other expenses incurred by the Benefits Administration Committee or its
members or authorized by the Benefits Administration Committee shall be
paid by the Employers or from the Plan assets as determined by the
Benefits Administration Committee.
Section 8.05 Claims Procedure. A Participant, Spouse or
beneficiary may file with the Benefits Administration Committee a claim
with respect to a benefit payable from the Plan. Any such claim shall be
filed in writing stating the nature of the claim, the facts supporting the
claim, the amount claimed and the name and address of the claimant. Such
claims shall be referred to one member of the Benefits Administration
Committee who shall prepare an appropriate response. Such Benefits
Administration Committee member within ninety (90) days (or 180 days if
special circumstances require an extension of time for processing the
claim and the Benefits Administration Committee notifies the claimant of
such extension prior to ninety (90) days from the date of the initial
filing of the claim) after receipt of the notice, shall render a written
decision on the claim. If the claim shall be denied, either in whole or
in part, the decision shall include the specific reason or reasons for the
denial; specific reference to the pertinent Plan provision or provisions
which is the basis for the denial; a description of any additional
material or information necessary for the claimant to perfect the claim
and an explanation why the information or material is necessary; and
appropriate information as to the steps to be taken if the Participant,
Spouse or beneficiary wishes to appeal the Benefits Administration
Committee's decision. The claimant may file with the Benefits
Administration Committee, within sixty (60) days after receiving such
notification from him, a written notice of request for review of the
decision. The review shall be made by two members of the Benefits
Administration Committee, neither of whom shall be the member responding
to the initial claim. In order that the Benefits Administration Committee
may expeditiously decide such appeal, the written notice of appeal should
contain (i) a statement of the ground(s) for the appeal, (ii) a specific
reference to the pertinent Plan provision or provisions on which the
appeal is based, (iii) a statement of the argument(s) and authority (if
any) supporting each ground for the appeal, and (iv) any other pertinent
documents or comments which the claimant desires to submit in support of
his appeal. The Benefits Administration Committee shall render a written
decision on the claim which shall include the specific reasons for the
decision and a reference to the pertinent Plan provisions on which the
decision was based within sixty (60) days (or 120 days if special
circumstances require an extension of time for processing the claim and
the Benefits Administration Committee notifies the claimant of such
extension prior to sixty (60) days from the date of the initial filing of
the claim) after receipt of the documents requested for review. A copy of
the Benefits Administration Committee's decision shall be mailed promptly
to the claimant. If a Participant, Spouse or beneficiary shall not file
written notice with the Benefits Administration Committee at the times set
forth above, the Participant, Spouse, or beneficiary shall have waived all
benefits other than as set forth in the notice from the Benefits
Administration Committee.
The foregoing claims procedure shall be the only method by which
claims of Participants, former Participants, Spouses, or beneficiaries
shall be decided under this Plan. Oral communications by potential
claimants to the Benefits Administration Committee or its delegate shall
have no force and effect hereunder.
Section 8.06. Trustee's Responsibilities. The duties,
authority and responsibility of any Trustee, insurance company, Investment
Manager or other person handling all or any part of the Plan assets shall
include and be limited to the duties, authority, and responsibility
expressly set forth in a written agreement between the Benefits
Administration Committee or Company and any such Trustee, insurance
company, Investment Manager or other person.
Section 8.07. Fiduciary Insurance and Indemnification. The
Company or any affiliated corporation shall maintain and keep in force
such insurance as the Benefits Administration Committee shall determine to
insure and protect the directors, officers, employees of the Company or
any affiliate thereof and any appropriately authorized delegates or
appointees of them against any and all claims, damages, liability, loss,
cost or expense (including attorneys' fees) arising out of or resulting
from (including failure to act with respect to) any responsibility, duty,
function or activity of any such person in relation to the Plan, including
without limitation, the Benefits Administration Committee, the members of
the Benefits Administration Committee and directors, officers and
employees of the Employers or any subsidiary or affiliate thereof
performing responsibilities, duties, functions, and/or actions at the
direction or under the authority of any of the foregoing.
In lieu of and/or as a supplement and in addition to the insurance
referred to in the foregoing sentence, the Employers and any affiliated
corporation shall indemnify and hold harmless its directors, officers and
employees against any and all claims, damages, liability, loss, cost or
expense (including attorneys' fees) arising out of or resulting from
(including failure to act with respect to) any responsibility, duty,
function or activity of any such person in relation to the Plan (or Trust
Agreement, if applicable) including without limitation the Benefits
Administration Committee, the members of the Benefits Administration
Committee and directors, officers and employees of the Employers or any
affiliate thereof performing responsibilities, duties, functions and/or
actions at the direction or under the authority of any of the foregoing;
provided, however, that no such indemnification shall extend to any matter
as to which it shall have been adjudged by any court of competent
jurisdiction that such person or persons have acted in bad faith or was
guilty of gross negligence in the performance of his or their duties
unless such Court shall, in view of all the circumstances of the case,
determine that such person is fairly and reasonably entitled to
indemnification.
Section 8.08. Agent for Service of Process. The Benefits
Administration Committee is hereby designated as the agent for service of
legal process with respect to all matters pertaining to the Plan.
Section 8.09. Allocation of Fiduciary Responsibility. This
Article V provides for "Named Fiduciaries" as required by Section
402(a)(1) of ERISA and a procedure for the allocation of responsibilities
as required by Section 402(b)(2) of ERISA. If the Board or Benefits
Administration Committee allocates responsibility as herein provided, such
Named Fiduciaries shall not be responsible for the actions of the
person(s) to whom the responsibility is allocated except as provided in
Section 405(c)(2) of ERISA. However, if the Benefits Administration
Committee delegates duties hereunder, such delegation shall be made
subject to the express condition that the Benefits Administration
Committee retains full and exclusive authority over and responsibility for
any activities of such person or persons.
Section 8.10. Selection of Investment Managers. If the
Benefits Administration Committee appoints one or more Investment Managers
pursuant to Section 8.01 hereof, upon the acceptance by the Investment
Manager of the fiduciary duty incident to such appointment, such manager
shall be solely liable for all investment actions taken concerning the
Plan assets which are subject to his management. The Benefits
Administration Committee shall monitor the investment performance of the
investment manager(s) with respect to the Plan assets in accordance with
the procedure set forth in Section 8.02 hereof.
Section 8.11. Liability for Breach of Co-Fiduciary. The
members of the Board and the Benefits Administration Committee shall not
be liable for the acts of commission or omission of another fiduciary
unless (i) such member knowingly participated or knowingly attempted to
conceal the act or omission of another fiduciary and he knew the act or
omission was a breach of fiduciary responsibility by the other fiduciary;
or (ii) such member has knowledge of a breach by the other fiduciary and
shall not make reasonable efforts to remedy the breach; or (iii) such
member's breach of his own fiduciary responsibility permitted the other
fiduciary to commit a breach.
Section 8.12. Communications. All requests, appeals, elections
and other communications to the Benefits Administration Committee shall be
in writing and shall be made by transmitting the same via the U.S. Mail,
certified, return receipt requested, addressed as follows:
Johnson Controls
Northern New Mexico, L.L.C.
7315 North Atlantic Avenue
Cape Canaveral, FL 32920
Attention: Benefits Administration Committee
ARTICLE IX. AMENDMENTS AND TERMINATION
Section 9.01. Amendments and Termination. (a) While it is
intended that the Plan shall continue in effect indefinitely, the Board
may from time to time modify, alter or amend the Plan, and may at any time
order the temporary suspension or complete discontinuance of Employer
contributions or may terminate the Plan, provided, however, that
(i) no such action shall make it possible for any part of
the Plan assets (except such part as is used for the
payment of expenses) to be used for or diverted to any
purpose other than for the exclusive benefit of
Participants or their Beneficiaries and the defraying
of the reasonable expenses of administering and winding
up the Plan,
(ii) no such action shall adversely affect the rights or
interests of Participants theretofore vested under the
Plan,
(iii) in the event of termination of the Plan or complete
discontinuance of Employer contributions hereunder, all
rights and interests of Participants not theretofore
vested shall become vested as of the date of such
termination or complete discontinuance.
(b) Nothing herein shall be construed to prevent any
modification, alteration or amendment of the Plan which is required in
order to comply with the provision of any law or regulation relating to
the establishment or maintenance of this Plan, including but not limited
to the establishment and maintenance of the Plan as a qualified employee
plan under the Code, even though such modification, alteration, or
amendment is made retroactively or adversely affects the rights or
interests of a Participant under the Plan. The power to amend the Plan
which is reserved to the Board shall include the right to amend the Plan
at any time to provide a life annuity form of distribution.
ARTICLE X. MISCELLANEOUS
Section 10.01. Non-Guarantee of Employment. Nothing contained
in this Plan shall be construed as a contract of employment between an
Employer and a Participant, or as a right of any Participant to be
continued in the employment of his Employer, or as a limitation of the
right of an Employer to discharge any Participant with or without cause.
Section 10.02. Rights to Plan Assets. (a) No participant or
any other person shall have any right to, or interest in, any part of the
Plan assets upon termination of his employment or otherwise, except as
provided from time to time under this Plan, and then only to the extent of
the amounts due and payable to such person out of the assets of the Plan.
All payments as provided for in this Plan shall be made solely out of the
assets of the Plan and neither the Employers, the Trustee, nor any member
of a Benefits Administration Committee shall be liable therefor in any
manner.
(b) The Employers shall have no beneficial interests of any
nature whatsoever in any Employer contributions after the same have been
received by the Trustee, or in the assets, income or profits of the Plan
or any part thereof. However, Employer contributions hereunder are
conditioned upon their deductibility under Code Section 404. To the
extent a tax deduction for any Employer contribution is disallowed, such
contribution shall be returned to the Employers within 1 year after such
disallowance. In addition, if the Internal Revenue Service initially
determines that the Plan, or any part thereof, fails to qualify under Code
Section 401(a), any contributions that have been made shall be returned to
the Employers within 1 year following such determination.
Section 10.03. Non-Recommendation of Investment. The
availability of any security hereunder shall not be construed as a
recommendation to invest in such security. The decision as to the choice
of investment of a Participant's Accounts must be made solely by each
Participant, and no officer or employee of any Employer or the Trustee is
authorized to make any recommendation to any Participant concerning the
allocation of his Accounts hereunder.
Section 10.04. Indemnification of Benefits Administration
Committee. The Company shall indemnify each member of the Benefits
Administration Committee and the Board and hold each of them harmless from
the consequences of his acts or conduct in his official capacity, if he
acted in good faith and in a manner he reasonably believed to be solely in
the best interests of the Participants and their beneficiaries, and with
respect to any criminal action or proceeding had no reasonable cause to
believe his conduct was unlawful. Such indemnification shall cover any
and all attorneys' fees and expenses, judgments, fines and amounts paid in
settlement, but only to the extent that such amounts are not paid to such
person(s) under the Company's fiduciary insurance policy and to the extent
that such amounts are actually and reasonably incurred by such person(s).
Section 10.05. Non-Alienation. (a) Except as otherwise provided
in subsection (b), no right or interest of any Participant or Beneficiary
in the Plan shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, charge, attachment,
garnishment, execution, levy, bankruptcy, or any other disposition of any
kind, either voluntary or involuntary, prior to actual receipt of payment
by the person entitled to such right or interest under the provisions
hereof, and any such disposition or attempted disposition shall be void.
(b) Notwithstanding anything herein to the contrary, the Plan
shall recognize and give effect to a qualified domestic relations order
with respect to child support, alimony payments, or marital property
rights if it determines that such order meets the applicable requirements
of Code Section 414(p). If a qualified domestic relations order so
directs, distribution may be made to an alternate payee designated in such
order at a time not permitted for distribution to the Participant himself,
provided the amount thereof does not exceed the amount specified in
Section 7.03(a). The Benefits Administration Committee shall establish
procedures concerning the notification of interested parties, the
determination of the validity of such orders, the determination of the
source of funds to be used to provide for distribution pursuant to such
orders, and such other issues as may be necessary or appropriate to deal
with such orders in a uniform and nondiscriminatory manner.
Section 10.06. Facility of Payment. (a) In the event that any
person who is entitled to benefits hereunder cannot be located despite
reasonable and diligent efforts to do so, then such person's benefits
shall be automatically forfeited as of the last day of the Plan Year next
following the year in which such benefits became payable; provided,
however, in the event that such person subsequently makes a claim for such
forfeited benefits prior to the termination of the Plan, such benefits
shall be reinstated.
(b) In the event the Benefits Administration Committee shall
find that any Participant to whom a benefit is payable is unable to care
for his affairs because of illness or accident, any payment due (unless
prior claim therefor shall have been made by a duly qualified guardian or
other legal representative) may be paid to the spouse, parent, brother or
sister or other person deemed by the Benefits Administration Committee to
have incurred expense for such Participant otherwise entitled to payment.
Any such payment shall be a payment for the account of the Participant and
shall be in complete satisfaction and full payment of the Participant's
Accounts hereunder. In addition, if any benefits are improperly paid to
the estate, spouse, parent, brother or sister or other person for the
account of the Participant by reason of mistake of fact, any such payment
shall be deemed (i) a payment for the account of the Participant or his
Spouse, and (ii) in complete satisfaction and full payment of the
Participant's Accounts hereunder.
Section 10.07 Transfers from Other Qualified Plans. There may
be transferred to and deposited with the Trustee to be held, invested and
distributed in accordance with the provisions of the Plan and as an
integral part of the assets held by the Trustee thereunder, assets subject
to any other defined contribution plan qualified under Code Section 401(a)
which is maintained by an Employer and is merged into the Plan. Such
transfer and merger shall be affected on such other terms and conditions
as may be determined by the Board.
Section 10.08. Mergers, Consolidations and Transfers of Plan
Assets. In the case of any merger or consolidation with, or transfer of
assets or liabilities to or from any other plan, each Employee in the Plan
must be entitled (if the Plan then terminated) to receive a benefit
immediately after the merger, consolidation, or transfer which is equal to
or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had
then terminated).
Section 10.09. Fiduciaries. Any person may serve in more than
one fiduciary capacity with respect to the Plan. Any fiduciary hereunder,
as an individual, may employ such legal, actuarial, accounting or other
assistant he may deem necessary to fulfill his obligations hereunder,
which assistants may be those consulted by any Employer, the Trustee, the
Plan or other fiduciaries.
Section 10.10 Top-Heavy Restrictions. (a) The Plan shall be a
"Top-Heavy Plan" for any Plan Year if either of the following conditions
applies:
(i) The Top-Heavy Ratio for the Plan exceeds 60% and the
Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group having a Top-Heavy Ratio
of 60% or less.
(ii) The Plan is part of a Required Aggregation Group having
a Top-Heavy Ratio which exceeds 60% and is not part of
a Permissive Aggregation Group having a Top-Heavy Ratio
of 60% or less.
If the Plan is a Top-Heavy Plan in any Plan Year the provisions of this
Section 11.12 shall supersede any conflicting provisions of the Plan. The
provisions of this Section 11.12 are intended to comply with Code Section
416 and the regulations promulgated thereunder. If there is any
discrepancy between the provisions of this Section 11.12 and the
provisions of Code Section 416 or the Income Tax Regulations thereunder,
such discrepancy shall be resolved by the Benefits Administration
Committee so as to comply with Code Section 416 and the regulations.
(b) Solely for purposes of this Section, the following terms
shall have the meanings set forth below:
(i) "Key Employee" means any employee or former employee
(and the beneficiary of such employee) whose status as
an officer or owner of the Employer makes him a "key
employee" as determined in accordance with Code Section
416(i)(1) and the regulations thereunder.
(ii) "Determination Date" means the last day of the
preceding Plan Year.
(iii) "Top-Heavy Ratio" means a fraction, the numerator of
which is the sum of account balances under any defined
contribution plans maintained by the Employer for all
Key Employees and the present value of accrued benefits
under any defined benefit plans maintained by the
Employer for all Key Employees and the denominator of
which is the sum of the account balances under such
defined contribution plans for all Participants and the
present value of accrued benefits under such defined
benefit plans for all Participants. Both the numerator
and denominator of the Top-Heavy Ratio shall be
adjusted for any distribution of an account balance or
an accrued benefit made in the 5-year period ending on
the Determination Date and any contribution due but
unpaid as of the Determination Date. For purposes of
calculating the Top-Heavy Ratio, (A) the value of
account balances and the present value of accrued
benefits shall be determined as of the most recent
Valuation Date that falls within or ends with the
12-month period ending on the Determination Date and
(B) the account balances and present values of accrued
benefits of a Participant who is not a Key Employee but
who was a Key Employee in a prior year shall be
disregarded. The calculation of the Top-Heavy Ratio,
and the extent to which distributions, rollovers and
transfers are taken into account, will be made in
accordance with Code Section 416 and the regulations
thereunder. When aggregating plans, the value of
account balances and accrued benefits will be
calculated with reference to the Determination Dates
that fall within the same calendar year. The present
value of accrued benefits shall be determined pursuant
to Code Section 416(g) using a 5% interest assumption
and the UP-1984 Mortality Table.
(iv) "Permissive Aggregation Group" means the Required
Aggregation Group of plans plus any other plan or plans
of the Employer which, when considered as a group with
the Required Aggregation Group, would continue to
satisfy the requirements of Code Sections 401(a)(4) and
410.
(v) "Required Aggregation Group" means (A) each qualified
plan of the Employer in which at least one Key Employee
participates and (B) any other qualified plan of the
Employer which enables a plan described in (i) to meet
the requirements of Code Sections 401(a)(4) and 410.
(vi) "Valuation Date" means (A) in the case of a defined
contribution plan, the Determination Date and (B) in
the case of a defined benefit plan, the date as of
which funding calculations are generally made within
the 12-month period ending on the Determination Date.
(vii) "Employer" means the employer or employers whose
employees are covered by this Plan and any other
employer which must be aggregated with any such
employer under Code Section 414(b), (c) and (m).
(c) For any year in which the Plan is a Top-Heavy Plan, the
employer-derived accrued benefit on a life-only basis commencing at the
normal retirement age of employee whose employment has not terminated at
the end of the Plan Year and who is not a Key Employee shall be at least
equal to a percentage of the highest average compensation (as defined in
Code Section 415) for 5 consecutive years, excluding any years after such
Plan permanently ceases to be a Top-Heavy Plan, such percentage being the
lesser of (i) 20% or (ii) 2% times the years of service credited for
vesting purposes under the Plan for service during all Plan Years during
which this is a Top-Heavy Plan.
(d) If the Employer maintains a defined benefit plan and a
defined contribution plan which both cover one or more of the same Key
Employees and, if such plans are Top-Heavy, then the limitation stated in
a separate provision of this Plan with respect to the Code Section 415(e)
maximum benefit limitations shall be deemed to refer to a 1.0 adjustment
on the dollar limitation rather than a 1.25 adjustment. This provision
shall not apply if the Top-Heavy Ratio is less than 90% and if the minimum
benefit requirements of subsection (e) are met when 2% is changed to 3%
and 20% is changed to an amount not greater than 30% which equals 20% plus
1% for each year this is a Top-Heavy Plan. If the highest rate allocated
to a Key Employee is less than 3%, amounts contributed as a result of any
salary reduction agreement made by any Key Employee pursuant to any
defined contribution plan maintained by an Employer shall be treated as a
portion of the allocation made pursuant to subsections (d) and (e) of this
Section 11.12.
(e) The provisions of this Section 11.12 are intended to comply
with Code Section 416 and the regulations promulgated thereunder. If
there is any discrepancy between the provisions of this Section 11.12 and
the provisions of Code Section 416 or the Income Tax Regulations
thereunder, such discrepancy shall be resolved by the Benefits
Administration Committee so as to comply with Code Section 416 and the
regulations.
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated October 21, 1996, which appears
on page 43 of the 1996 Annual Report to Shareholders of Johnson Controls,
Inc. (which financial statements have not been restated to give effect to
the reclassification of the Plastic Container division as a discontinued
operation and for the stock split distributed on March 31, 1997 to
shareholders of record on March 7, 1997), which is incorporated by
reference in Johnson Controls, Inc.'s Annual Report on Form 10-K for the
year ended September 30, 1996. We also consent to the incorporation by
reference of our report on the Financial Statement Schedule, which appears
on page 37 of such Annual Report on Form 10-K. We also consent to the
incorporation by reference of our report dated October 21, 1996, except as
to Note 13 which is as of December 5, 1996 and Note 14 which is as of
March 7, 1997, which appears on page 4 of the Current Report on Form 8-K
filed March 10, 1997 (which financial statements have been restated to
give effect to the reclassification of the Plastic Container division as a
discontinued operation and for the stock split distributed on March 31,
1997 to shareholders of record on March 7, 1997).
PRICE WATERHOUSE LLP
Milwaukee, WI
September 23, 1997
