UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): September 15, 2017 (September 14, 2017)

 

 

JOHNSON CONTROLS INTERNATIONAL PLC

(Exact name of registrant as specified in its charter)

 

 

 

Ireland   001-13836   98-0390500

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification Number)

1 Albert Quay

Cork, Ireland

(Address of principal executive offices)

Registrant’s telephone number, including area code: 353-21-423-5000

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions ( see General Instruction A.2. below):

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On September 14, 2017, Johnson Controls International plc (“JCI”) (the “Company”) and Brian J. Stief, the Company’s Executive Vice President and Chief Financial Officer, terminated Mr. Stief’s Change of Control Executive Employment Agreement dated as of July 28, 2010, as amended (the “Stief COC Agreement”). In order to incentivize Mr. Stief to terminate the Stief COC Agreement and defer his plans for retirement, the Committee approved a comprehensive retention arrangement for Mr. Stief. The retention arrangement is designed to retain his services through December 2020. The Board of Directors and the Committee believe retaining the services of Mr. Stief will provide crucial continuity of senior management and will also facilitate and support the successful execution of the Company’s post-merger integration and succession planning activities.

Under the terms of the Stief COC Agreement, the merger between Johnson Controls, Inc. and a wholly owned subsidiary of Tyco International plc (“Tyco”) on September 2, 2016, referred to herein as the “Merger,” was deemed to constitute a “Change of Control” (as such term is defined in the Stief COC Agreement). Under the Stief COC Agreement, following a Change of Control, in the event of a qualifying termination of employment of Mr. Stief within 36 months of the Merger, including a resignation for “Good Reason” (as such term is defined in the Stief COC Agreement), Mr. Stief would be entitled to:

 

  •   a lump sum severance payment equal to three times Mr. Stief’s annual cash compensation, which includes his annual base salary and the greater of (a) the average of his annualized annual cash bonuses and long-term performance awards for the three fiscal years preceding the change of control, and (b) the sum of the annual cash bonuses and long-term performance awards for the most recently completed fiscal year (such greater amount, the “average performance bonus”);

 

  •   payment of a pro rata portion of Mr. Stief’s average performance bonus for the fiscal year in which he is terminated;

 

  •   a cash payment equal to the lump sum value of the additional benefits Mr. Stief would have accrued for the remainder of the employment period under JCI’s pension plan and JCI’s Retirement Restoration Plan, assuming Mr. Stief is fully vested in such benefits at the time of termination; and

 

  •   continued medical and welfare benefits for two years following termination of employment without cause or with good reason.

As a result of the integration of legacy Johnson Controls, Inc. and legacy Tyco, including changes in reporting relationships and responsibilities, Mr. Stief has the ability to trigger a Good Reason resignation at any time prior to September 2019 and receive the benefits described above. In the event Mr. Stief were to experience a qualifying termination event, including a resignation for Good Reason, the total cash payment he would be entitled to receive is approximately $12 million.

In consideration for Mr. Stief’s agreement to terminate the Stief COC Agreement, and to incentivize Mr. Stief to remain Executive Vice President and Chief Financial Officer through December 2020, on September 14, 2017, the Committee approved the following awards to Mr. Stief under the Johnson Controls International plc 2012 Share and Incentive Plan (the “Plan”):

 

  •  

299,251 restricted share units (“Retention RSUs/PSUs”), representing a target value of $12 million, which vest on or about December 7, 2020 (the “Vesting Date”). In the event of Mr. Stief’s death, disability, retirement or involuntary termination prior to the Vesting Date, such Retention RSUs/PSUs would immediately vest in full. Such award will be paid in shares as soon as practicable after the award vests. However, in the event Mr. Stief remains continuously employed through the Vesting Date, the restricted share units will be converted into performance share units if the performance goals established for the award are met at or above target, and they will be paid out in shares based on the level of attainment of

 

such performance goals. The Retention RSUs/PSUs will be subject to the same performance goals as the performance share units granted to all eligible employees in December 2017 under the Company’s Long-Term Incentive Performance Program (the “2018 LTIPP Awards”). If the award is converted into performance share units, then, consistent with the 2018 LTIPP Awards, the Retention RSUs/PSUs may payout up to 200% of the original award in the event the performance goals are satisfied at the maximum level;

 

  •   99,750 performance share units (“Retention PSUs”), representing a target value of $4 million, which vest on or about December 7, 2020 at the end of a three year performance period. The Retention PSUs will be subject to the same performance criteria as the 2018 LTIPP Awards. In the event Mr. Stief retires, or the Company terminates his employment other than for Cause, prior to end of the three year performance period, he would be entitled to a pro-rated portion of the Retention PSUs at the end of the performance period to the extent the performance criteria are met. In the event of Mr. Stief’s termination due to death or disability, he would be entitled to receive all of the Retention PSUs at the end of the performance period, but only to the extent the performance criteria are met; and

 

  •   99,750 restricted share units (“Retention RSUs”), representing a target value of $4 million, which vest on the third anniversary of the date of grant provided that Mr. Stief remains employed with the Company through the date of vesting. In the event of Mr. Stief’s termination due to death or disability, the Retention RSUs would vest in full. In the event the Company terminates Mr. Stief’s employment other than for Cause, a pro rata portion of such Retention RSUs will vest. Such RSUs would not vest in the event of Mr. Stief’s retirement prior to the third anniversary of the grant date.

All shares earned under any of the above awards will be credited to Mr. Stief’s account under the Company’s Deferred Compensation Plan.

The awards above are in addition to Mr. Stief’s annual awards of stock options, RSUs and PSUs under the Company’s Long-Term Incentive Performance Program. The terms of the Retention RSUs/PSUs above are set forth in the Terms of Unit Award under the Johnson Controls International plc 2012 Share and Incentive Plan for Brian J. Stief (the “Stief Terms of RSU/PSU Retention Award”). The terms of the Retention PSUs above are set forth in the Terms of PSU Award under the Johnson Controls International plc 2012 Share and Incentive Plan for Brian J. Stief (the “Stief Terms of PSU Retention Award”). The terms of the Retention RSUs above are set forth in the Terms of RSU Award under the Johnson Controls International plc 2012 Share and Incentive Plan for Brian J. Stief (the “Stief Terms of RSU Retention Award”).

In addition, the Committee approved a separate agreement with Mr. Stief dated as of September 14, 2017, the (“Stief Letter Agreement”), which provides that to the extent the value of the Retention RSUs/PSUs (without regard to any dividend equivalent units credited thereon) at the time of vesting is less than $12 million, JCI would pay Mr. Stief a cash payment representing the difference between $12 million and the value of the Retention RSUs/PSUs (without regard to dividend equivalents) at the time of vesting. This Stief Letter Agreement also includes an acknowledgement of the termination of the Stief COC Agreement and contains customary covenants not to compete with the Company or solicit employees of the Company.

The foregoing descriptions of the Stief Terms of RSU/PSU Retention Award, the Stief Terms of PSU Retention Award, the Stief Terms of RSU Retention Award and the Stief Letter Agreement do not purport to be complete and are qualified in their entirety by reference to such agreements copies of which are attached hereto as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, the terms of which are incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

 

10.1    Terms of Unit Award under the Johnson Controls International plc 2012 Share and Incentive Plan for Brian J. Stief.
10.2    Terms of PSU Award under the Johnson Controls International plc 2012 Share and Incentive Plan for Brian J. Stief.
10.3    Terms of RSU Award under the Johnson Controls International plc 2012 Share and Incentive Plan for Brian J. Stief.
10.4    Letter Agreement dated September 14, 2017 between Johnson Controls International plc and Brian J. Stief.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    JOHNSON CONTROLS INTERNATIONAL PLC
Date: September 15, 2017     By:   /s/ Matthew R.A. Heiman
    Name:   Matthew R.A. Heiman
    Title:   Vice President and Corporate Secretary

Exhibit 10.1

 

LOGO

JOHNSON CONTROLS INTERNATIONAL PLC

2012 SHARE AND INCENTIVE PLAN (AMENDED AND RESTATED AS

OF SEPTEMBER 2, 2016) (THE “PLAN”)

RESTRICTED SHARE UNIT AND PERFORMANCE UNIT

AWARD AGREEMENT

Terms of Unit Award

The Plan has been adopted to permit awards to be made to certain key employees of the Company or any Affiliate. The Company desires to provide incentives and potential rewards for future performance by the Participant by providing the Participant with a means to increase his proprietary interest in the Company’s success.

Definitions . Capitalized terms used in this Award Agreement have the following meanings:

 

(a) “Award” means this grant of Units.

 

(b) “Award Notice” means the Award notification delivered to the Participant.

 

(c) “Cause” means (i) if the Participant is covered by the Johnson Controls International plc Severance and Change in Control Policy for Officers (or any successor policy), the definition of “Cause” contained in such policy, or (ii) otherwise, any of the following as determined by the Committee: (A) violation of the provisions of any employment agreement, non-competition agreement, confidentiality agreement, or similar agreement with the Company or a Subsidiary, or the Company’s or a Subsidiary’s code of ethics, as then in effect, (B) conduct rising to the level of gross negligence or willful misconduct in the course of employment with the Company or a Subsidiary, (C) commission of an act of dishonesty or disloyalty involving the Company or a Subsidiary, (D) violation of any federal, state or local law in connection with the Participant’s employment or service, or (E) breach of any fiduciary duty to the Company or a Subsidiary.

 

(d) “Company” means Johnson Controls International plc, an Irish public limited company, or any successor thereto.

 

(e) “Fair Market Value” means, per Share on a particular date, the closing sales price on such date on the New York Stock Exchange, or if no sales of Shares occur on the date in question, on the next preceding date on which there was a sale on such market.

 

(f) “Performance Unit” means the right to receive one Share, to the extent the Performance Goals specified in the Summary of Terms and Conditions delivered to the Participant are achieved.

 

(g) “Plan” means the Johnson Controls International plc 2012 Share and Incentive Plan (as amended and restated as of September 2, 2016) and as may be further amended from time to time.

 

(h) “Restricted Share Unit” means the right to receive a payment, in cash or Shares, equal to the Fair Market Value of one Share, that is subject to a risk of forfeiture during the Restriction Period.

 

(i) “Restriction Period” means the length of time indicated in the Award Notice during which the Award is subject to vesting. During the Restriction Period, the Participant cannot sell, transfer, pledge, assign or otherwise encumber the Restricted Share Units (or a portion thereof) subject to this Award.

 

(j) “Retirement” means termination of employment from the Company and its Subsidiaries (for other than Cause) on or after attainment of age fifty-five (55) and completion of five (5) years of continuous service with the Company and its Subsidiaries (including, for Participants who are Legacy Johnson Controls Employees, service with Johnson Controls, Inc. and its affiliates prior to the Merger).

 

(k) “Share” means an ordinary share in the capital of the Company.

 

(l) “Unit” means a Restricted Share Unit or a Performance Unit.

Other capitalized terms used in this Award Agreement have the meanings given in the Plan. The parties agree as follows:

 

1. Grant of Award. Subject to the terms and conditions of the Plan, a copy of which has been delivered to the Participant and made a part of this Award, and to the terms and conditions of this Award Agreement, the Company grants to the Participant an award of Restricted Share Units on the date and with respect to the number of Units specified in the Award Notice. If, however, (a) the Participant remains continuously employed by the Company or an Affiliate through the end of the Restriction Period, and (b) the Compensation Committee certifies that the Performance Goals described in the Summary of Terms and Conditions have been achieved at an above target level, then the Restricted Share Units shall be converted into Performance Units, and shall be earned and settled as provided in paragraph 3 in lieu of paragraph 2.

 

2. Terms of Restricted Share Units.

 

  a. Restriction Period . During the Restriction Period, the Restricted Share Units shall be subject to forfeiture as provided in subparagraph d.

 

  b. Settlement of Restricted Share Units . All Restricted Share Units earned hereunder shall be credited to the Participant’s account under the Johnson Controls Senior Executive Deferred Compensation Plan (or any successor or similar deferred compensation plan for which the Participant is eligible).

 

  c. Dividend Equivalent Units . Any cash dividends or other distributions paid or delivered with respect to the Shares for which the record date occurs on or before the last day of the Restriction Period will result in a credit to a bookkeeping account for the benefit of the Participant. The credit will be equal to the dividends or other distributions that would have been paid with respect to the Shares subject to the Restricted Share Units had such Shares been outstanding. The account will be converted into and settled in additional Shares at the same time as the Restricted Share Units are allocated to the Johnson Controls Senior Executive Deferred Compensation Plan. Prior to the end of the Restriction Period, such account will be subject to the same terms and conditions (including risk of forfeiture) as the Restricted Share Units to which the dividends or other distributions relate.

 

  d. Termination of Employment . If, prior to the end of the Restriction Period, the Participant’s employment with the Company and its Affiliates is terminated by the Company or an Affiliate without Cause, or if the Participant’s employment ends due to death, Disability, or Retirement, in all cases at a time when the Participant could not have been terminated for Cause, then the Participant shall become fully vested in the Restricted Share Units. If the Participant’s employment is terminated for any reason not described above (including for Cause), then any Restricted Share Units (and all dividend equivalents credited thereon) shall automatically be forfeited. The Company may suspend payment or delivery of Shares (without liability or interest thereon) pending the Committee’s determination of whether the Participant was or should have been terminated for Cause.

 

3. Terms of Performance Units .

 

  a. Performance Units Earned . If the Restricted Share Units are converted into Performance Units as provided under Paragraph 1, then at the end of the performance period indicated in the Award Notice, the number of Performance Units earned by the Participant shall be determined, in the sole discretion of the Committee, as set forth in the Summary of Terms and Conditions delivered to the Participant.

 

  b. Settlement of Performance Units . All Performance Units earned hereunder shall be credited to the Participant’s account under the Johnson Controls Senior Executive Deferred Compensation Plan (or any successor or similar deferred compensation plan for which the Participant is eligible).

 

2

  c. Dividend Equivalent Units . Any cash dividends or other distributions paid or delivered with respect to the Shares for which the record date occurs on or before the last day of the performance period will result in a credit to a bookkeeping account for the benefit of the Participant. The credit will be equal to the dividends or other distributions that would have been paid with respect to the Shares subject to the Performance Units had such Shares been outstanding. The account will be converted into and settled in additional Shares at the same time as the Performance Units are allocated to the Johnson Controls Senior Executive Deferred Compensation Plan. Prior to the end of the performance period, such account will be subject to the same terms and conditions (including Performance Goals and risk of forfeiture) as the Performance Units to which the dividends or other distributions relate.

4.     Alienation of Award . The Participant (or beneficiary) shall not have any right to assign, transfer, sell, pledge or otherwise encumber this Award.

5.     No Voting Rights . The Participant shall not have any voting rights with respect to the number of Shares underlying the Units until such Shares have been earned and issued.

6.     Withholding. The Participant agrees to remit to the Company any foreign, Federal, state and/or local taxes (including the Participant’s FICA tax obligation) required by law to be withheld with respect to the vesting of the Units or the issuance of Shares under this Award. The Company can delay the issuance of Shares or can withhold from cash or property, including Shares issuable to the Participant under this Award (including on a deferred basis), in the amount needed to satisfy any withholding obligations; provided that, to the extent Shares are withheld to satisfy taxes, the amount to be withheld may not exceed the total maximum statutory tax withholding obligations associated with the transaction to the extent needed for the Company and its Subsidiaries to avoid an accounting charge. Notwithstanding anything to the contrary in this Award, if the Company or any Affiliate of the Company is required to withhold any Federal, state or local taxes or other amounts in connection with the Award, then the Company may require the Participant to pay to the Company, in cash, promptly on demand, amounts sufficient to satisfy such tax obligations or make other arrangements satisfactory to the Company regarding the payment to the Company of the aggregate amount of any such taxes and other amounts.

7.     No Claim for Forfeiture . Neither the Award nor any benefit accruing to the Participant from the Award will be considered to be part of the Participant’s normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments. In no event may the Award or any benefit accruing to the Participant from the Award be considered as compensation for, or relating in any way to, past services for the Company or any Affiliate. In consideration of the Award, no claim or entitlement to compensation or damages shall arise from forfeiture of the Award resulting from termination of the Participant’s employment by the Company or any Affiliate (for any reason whatsoever and whether or not in breach of local labor laws) and the Participant irrevocably releases the Company and its Affiliates from any such claim that may arise. If, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by acknowledging the grant, the Participant shall have been deemed irrevocably to have waived any entitlement to pursue such claim.

8.     Electronic Delivery . The Company or its Affiliates may, in its or their sole discretion, decide to deliver any documents related to current or future participation in the Plan or related to this Award by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. The Participant hereby agrees that all on-line acknowledgements shall have the same force and effect as a written signature.

 

3

9.     Securities Compliance. The Company may place a legend or legends upon the certificates for Shares issued under the Plan and may issue “stop transfer” instructions to its transfer agent in respect of such Shares as it determines to be necessary or appropriate to (a) prevent a violation of, or to obtain an exemption from, the registration requirements of the Securities Act of 1933, as amended, applicable state securities laws or other legal requirements, or (b) implement the provisions of the Plan, this Award or any other agreement between the Company and the Participant with respect to such Shares.

10.     Successors. All obligations of the Company under this Award shall be binding on any successor to the Company. The terms of this Award and the Plan shall be binding upon and inure to the benefit of the Participant and his heirs, executors, administrators or legal representatives.

11.     Legal Compliance. The granting of this Award and the issuance of Shares under this Award shall be subject to all applicable laws, rules, and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.

12.     Governing Law; Arbitration. This Award, and the interpretation of this Award Agreement, shall be governed by (a) the internal laws of Ireland (without reference to conflict of law principles thereof that would direct the application of the laws of another jurisdiction) with respect to the validity and authorization of any Shares issued under this Award, and (b) the internal laws of the State of Wisconsin (without reference to conflict of law principles thereof that would direct the application of the laws of another jurisdiction) with respect to all other matters. Arbitration will be conducted per the provisions in the Plan.

13.     Data Privacy and Sharing . As a condition of the granting of the Award, the Participant acknowledges and agrees that it is necessary for some of the Participant’s personal identifiable information to be provided to certain employees of the Company, the third party data processor that administers the Plan and the Company’s designated third party broker in the United States. These transfers will be made pursuant to a contract that requires the processor to provide adequate levels of protection for data privacy and security interests in accordance with the EU Data Privacy Directive 95/46 EC and the implementing legislation of the Participant’s home country (or any successor or superseding regulation). By acknowledging the Award, the Participant acknowledges having been informed of the processing of the Participant’s personal identifiable information described in the preceding paragraph and consents to the Company collecting and transferring to the Company’s Shareholder Services Department, and its independent benefit plan administrator and third party broker, the Participant’s personal data that are necessary to administer the Award and the Plan. The Participant understands that his personal information may be transferred, processed and stored outside of the Participant’s home country in a country that may not have the same data protection laws as his home country, for the purposes mentioned in this Award.

This Award, the Award Notice, the Summary of Terms and Conditions delivered to the Participant and any other documents expressly referenced in this Award contain all of the provisions applicable to the Award and no other statements, documents or practices may modify, waive or alter such provisions unless expressly set forth in writing, signed by an authorized officer of the Company and delivered to the Participant.

14.     Non-Competition; Non-Solicitation .

 

  a. Except as prohibited by law, the Participant agrees that during his employment with the Company or its Affiliates, and for the one year period following the Participant’s termination of employment for any reason, the Participant will not directly or indirectly, own, manage, operate, control (including indirectly through a debt, equity investment, or otherwise), provide services to, or be employed by, any person or entity engaged in any business that is (i) located in a region with respect to which the Participant had substantial responsibilities while employed by the Company or its Affiliates, and (ii) competitive, with (A) the line of business or businesses of the Company or its Subsidiaries that the Participant was employed with during the Participant’s employment (including any prospective business to be developed or acquired that was proposed at the date of termination), or (B) any other business of the Company or its Subsidiaries with respect to which the Participant had substantial exposure during such employment.

 

  b.

Except as prohibited by law, the Participant further agrees that during his employment with the Company or its Affiliates, and for the two-year period thereafter, the Participant

 

4

  will not, directly or indirectly, on his own behalf or on behalf of another (i) solicit, recruit, aid or induce any employee of the Company or any of its Affiliates to leave their employment with the Company or its Affiliates in order to accept employment with or render services to another person or entity unaffiliated with the Company or its Subsidiaries, or hire or knowingly take any action to assist or aid any other person or entity in identifying or hiring any such employee, or (ii) solicit, aid, or induce any customer of the Company or any of its Affiliates to purchase goods or services then sold by the Company or its Affiliates from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such customer, or (iii) otherwise interfere with the relationship of the Company or any of its Subsidiaries with any of its employees, customers, agents, or representatives.

 

  c. Irreparable injury will result to the Company, and to its business, in the event of a breach by the Participant of any of the Participant’s covenants and commitments under this Award, including the covenants of non-competition and non-solicitation. Therefore, in the event of a breach of such covenants and commitments, in the sole discretion of the Company, any of the Participant’s unvested Units shall be immediately rescinded and the Participant will forfeit any rights he or she has with respect thereto. In the event of such a breach, upon demand by the Company, the Participant hereby agrees and promises immediately to deliver to the Company the number of Shares (or, in the discretion of the Company, the cash value of said Shares) the Participant received for Units that vested or were delivered during the period beginning six months prior to the Participant’s termination of employment and ending on the six-month anniversary of such termination of employment. In addition, the Company reserves all rights to seek any and all remedies and damages permitted under law, including, but not limited to, injunctive relief, equitable relief and compensatory damages. The Participant further acknowledges and confirms that the terms of this paragraph 14, including but not limited to the time and geographic restrictions, are reasonable, fair, just and enforceable by a court.

 

  d. The Participant understands and agrees that by accepting this Award (and the opportunity to acquire Shares hereunder), the provisions of this paragraph 14 are binding upon the Participant, regardless of whether Shares are ultimately issued pursuant to this Award. These provisions survive the termination of this Award Agreement.

Failure of the Participant to affirmatively ACKNOWLEDGE or reject this Award within the sixty (60) day period following the date of grant will result in the Participant’s IMMEDIATE AND AUTOMATIC acceptance of this Award and the terms and conditions of this Award Agreement and the Plan, including the non-competition and non-solicitation provisions contained herein.

The Company has caused this Award to be executed by one of its authorized officers as of the date of grant.

JOHNSON CONTROLS INTERNATIONAL PLC

/s/ Judith A. Reinsdorf

Judith A. Reinsdorf

Executive Vice President and General Counsel

 

5

Exhibit 10.2

 

LOGO

JOHNSON CONTROLS INTERNATIONAL PLC

2012 SHARE AND INCENTIVE PLAN (AMENDED AND RESTATED

AS OF SEPTEMBER 2, 2016) (THE “PLAN”)

PERFORMANCE SHARE UNIT AWARD AGREEMENT

Terms for Performance Share Units

The Plan has been adopted to permit awards of performance share units to be made to certain key employees of the Company or any Affiliate. The Company desires to provide incentives and potential rewards for future performance by the Participant by providing the Participant with a means to acquire or to increase his/her proprietary interest in the Company’s success.

Definitions . Capitalized terms used in this Award Agreement have the following meanings:

 

(a) “Award” means this grant of Performance Units.

 

(b) “Award Notice” means the Award notification delivered to the Participant.

 

(c) “Cause” means (i) if the Participant is subject to an employment agreement with the Company or a Subsidiary that contains a definition of “cause”, such definition, or (ii) otherwise, any of the following as determined by the Committee: (A) violation of the provisions of any employment agreement, non-competition agreement, confidentiality agreement, or similar agreement with the Company or a Subsidiary, or the Company’s or a Subsidiary’s code of ethics, as then in effect, (B) conduct rising to the level of gross negligence or willful misconduct in the course of employment with the Company or a Subsidiary, (C) commission of an act of dishonesty or disloyalty involving the Company or a Subsidiary, (D) violation of any federal, state or local law in connection with the Participant’s employment or service, or (E) breach of any fiduciary duty to the Company or a Subsidiary.

 

(d) “Company” means Johnson Controls International plc, an Irish public limited company, or any successor thereto.

 

(e) “Fair Market Value” means, per Share on a particular date, the closing sales price on such date on the New York Stock Exchange, or if no sales of Shares occur on the date in question, on the next preceding date on which there was a sale on such market.

 

(f) “Inimical Conduct” means any act or omission that is inimical to the best interests of the Company or any Affiliate as determined by the Committee in its sole discretion, including but not limited to: (i) violation of any employment, noncompete, confidentiality or other agreement in effect with the Company or any Affiliate, (ii) taking any steps or doing anything which would damage or negatively reflect on the reputation of the Company or an Affiliate, or (iii) failure to comply with applicable laws relating to trade secrets, confidential information or unfair competition.

 

(g) “Performance Unit” or “Unit” means the right to receive one Share, to the extent the Performance Goals specified in the Summary of Terms and Conditions delivered to the Participant are achieved.

 

(h) “Plan” means the Johnson Controls International plc 2012 Share and Incentive Plan (as amended and restated as of September 2, 2016) and as may be further amended from time to time.

 

(i) “Retirement” means termination of employment from the Company and its Subsidiaries (for other than Cause) on or after attainment of age fifty-five (55) and completion of five (5) years of continuous service with the Company and its Subsidiaries (including, for Participants who are Legacy Johnson Controls Employees, service with Johnson Controls, Inc. and its affiliates prior to the Merger).

 

(j) “Share” means an ordinary share in the capital of the Company.

Other capitalized terms used in this Award Agreement have the meanings given in the Plan.

The parties agree as follows:

1.     Grant of Award . Subject to the terms and conditions of the Plan, a copy of which has been delivered to the Participant and made a part of this Award, and to the terms and conditions of this Award, the Company grants to the Participant an award of Performance Units on the date and with respect to the number of Units specified in the Award Notice.

2.     Units Earned . At the end of the performance period indicated in the Award Notice, the number of Units earned by the Participant shall be determined, in the sole discretion of the Committee, as set forth in the Summary of Terms and Conditions delivered to the Participant.

3.     Dividend Equivalent Units . Any cash dividends or other distributions paid or delivered with respect to the Shares for which the record date occurs on or before the last day of the performance period will result in a credit to a bookkeeping account for the benefit of the Participant. The credit will be equal to the dividends or other distributions that would have been paid with respect to the Shares subject to the Performance Units had such Shares been outstanding. The account will be converted into and settled in additional Shares at the same time as the Performance Units are allocated to the Johnson Controls Senior Executive Deferred Compensation Plan. Prior to the end of the performance period, such account will be subject to the same terms and conditions (including Performance Goals and risk of forfeiture) as the Performance Units to which the dividends or other distributions relate

4.     Settlement of Units . All Performance Units earned hereunder shall be credited to the Participant’s account under the Johnson Controls Senior Executive Deferred Compensation Plan (or any successor or similar deferred compensation plan for which the Participant is eligible).

5.     Alienation of Award . The Participant (or beneficiary) shall not have any right to assign, transfer, sell, pledge or otherwise encumber this Award.

6.     No Voting Rights . The Participant shall not have any voting rights with respect to the number of Shares underlying the Units until such Shares have been earned and issued.

7.     Termination of Employment – Risk of Forfeiture.

 

  a. Retirement or Involuntary Termination . If, prior to the settlement of the Units, the Participant’s employment with the Company and its Affiliates is terminated (i) by the Participant due to Retirement, or (ii) by the Company or an Affiliate, in either case at a time when the Participant’s employment could not have been terminated for Cause, then the Participant shall be eligible to earn a number of Units at the end of the performance period based on actual performance but prorated based on the number of full months of the Participant’s employment during the performance period prior to such termination compared to the total number of full months in the performance period (with an offset for any Units that have previously vested). Any Units subject to this Award that do not become vested under this paragraph as a result of such Retirement and actual performance shall automatically be forfeited and returned to the Company as of the date on which actual performance is determined.

 

       Notwithstanding the foregoing, if the Participant engages in Inimical Conduct, as determined by the Committee, the Participant’s right to receive any Units shall automatically be forfeited as of the date of the Committee’s determination.

 

  b.

Death or Disability . If, prior to the settlement of the Units, the Participant terminates employment from the Company and its Affiliates due to death or Disability at a time when the Participant’s employment could not have been terminated for Cause, then the Participant shall be eligible to earn the Units at the end of the performance period based on actual performance (and without

 

- 2 -

  pro ration for the number of months of employment during the performance period). Any Units subject to this Award that do not become vested under this paragraph as a result of such termination due to death or Disability and actual performance shall automatically be forfeited and returned to the Company as of the date on which actual performance is determined.

 

       Notwithstanding the foregoing, if the Participant engages in Inimical Conduct, as determined by the Committee, the Participant’s right to receive any Units shall automatically be forfeited as of the date of the Committee’s determination.

 

  c. Other Termination. If the Participant’s employment terminates for any reason not described above (including by the Company for Cause) prior to the settlement of the Units, then this Award shall automatically be forfeited in its entirety immediately upon such termination. The Company may suspend payment or delivery of Shares (without liability for interest thereon) pending the Committee’s determination of whether the Participant was or should have been terminated for Cause or whether the Participant has engaged in Inimical Conduct.

8.     Withholding. The Participant agrees to remit to the Company any foreign, Federal, state and/or local taxes (including the Participant’s FICA tax obligation) required by law to be withheld with respect to the Units or the issuance of Shares under this Award. The Company can delay the issuance of Shares or can withhold from cash or property, including cash or Shares under this Award, payable or issuable to the Participant, in the amount needed to satisfy any withholding obligations; provided that, to the extent Shares are withheld to satisfy taxes, the amount to be withheld may not exceed the total maximum statutory tax withholding obligations associated with the transaction to the extent needed for the Company and its Subsidiaries to avoid an accounting charge.

Notwithstanding anything to the contrary in this Award, if the Company or any Affiliate of the Company is required to withhold any Federal, state or local taxes or other amounts in connection with the Award, then the Company may require the Participant to pay to the Company, in cash, promptly on demand, amounts sufficient to satisfy such tax obligations or make other arrangements satisfactory to the Company regarding the payment to the Company of the aggregate amount of any such taxes and other amounts.

9.     No Claim for Forfeiture . Neither the Award nor any benefit accruing to the Participant from the Award will be considered to be part of the Participant’s normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments. Notwithstanding anything to the contrary in this Award, in no event may the Award or any benefit accruing to the Participant from the Award be considered as compensation for, or relating in any way to, past services for the Company or any Affiliate, nor shall the Participant have at any time a legally binding right to compensation under this Award unless and until the Committee approves, in its discretion, the number of Units earned at the completion of the performance period. In consideration of the Award, no claim or entitlement to compensation or damages shall arise from forfeiture of the Award resulting from termination of the Participant’s employment by the Company or any Affiliate (for any reason whatsoever and whether or not in breach of local labor laws) and the Participant irrevocably releases the Company and its Affiliates from any such claim that may arise. If, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by acknowledging the grant, the Participant shall have been deemed irrevocably to have waived any entitlement to pursue such claim.

10.     Electronic Delivery . The Company or its Affiliates may, in its or their sole discretion, decide to deliver any documents related to current or future participation in the Plan or related to this Award by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. The Participant hereby agrees that all on-line acknowledgements shall have the same force and effect as a written signature.

 

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11.     Securities Compliance. The Company may place a legend or legends upon the certificates for Shares issued under the Plan and may issue “stop transfer” instructions to its transfer agent in respect of such Shares as it determines to be necessary or appropriate to (a) prevent a violation of, or to obtain an exemption from, the registration requirements of the Securities Act of 1933, as amended, applicable state securities laws or other legal requirements, or (b) implement the provisions of the Plan, this Award or any other agreement between the Company and the Participant with respect to such Shares.

12.     Successors. All obligations of the Company under this Award shall be binding on any successor to the Company. The terms of this Award and the Plan shall be binding upon and inure to the benefit of the Participant and his heirs, executors, administrators or legal representatives.

13.     Legal Compliance. The granting of this Award and the issuance of Shares under this Award shall be subject to all applicable laws, rules, and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.

14.     Governing Law; Arbitration. This Award, and the interpretation of this Award Agreement, shall be governed by (a) the internal laws of Ireland (without reference to conflict of law principles thereof that would direct the application of the laws of another jurisdiction) with respect to the validity and authorization of any Shares issued under this Award, and (b) the internal laws of the State of Wisconsin (without reference to conflict of law principles thereof that would direct the application of the laws of another jurisdiction) with respect to all other matters. Arbitration will be conducted per the provisions in the Plan.

15.     Data Privacy and Sharing . As a condition of the granting of the Award, the Participant acknowledges and agrees that it is necessary for some of the Participant’s personal identifiable information to be provided to certain employees of the Company, the third party data processor that administers the Plan and the Company’s designated third party broker in the United States. These transfers will be made pursuant to a contract that requires the processor to provide adequate levels of protection for data privacy and security interests in accordance with the EU Data Privacy Directive 95/46 EC and the implementing legislation of the Participant’s home country (or any successor or superseding regulation). By acknowledging the Award, the Participant acknowledges having been informed of the processing of the Participant’s personal identifiable information described in the preceding paragraph and consents to the Company collecting and transferring to the Company’s Shareholder Services Department, and its independent benefit plan administrator and third party broker, the Participant’s personal data that are necessary to administer the Award and the Plan. The Participant understands that his personal information may be transferred, processed and stored outside of the Participant’s home country in a country that may not have the same data protection laws as his home country, for the purposes mentioned in this Award.

This Award, the Award Notice, the Summary of Terms and Conditions delivered to the Participant and any other documents expressly referenced in this Award contain all of the provisions applicable to the Award and no other statements, documents or practices may modify, waive or alter such provisions unless expressly set forth in writing, signed by an authorized officer of the Company and delivered to the Participant.

16.     Non-Competition; Non-Solicitation .

 

  a. Except as prohibited by law, the Participant agrees that during his employment with the Company or its Affiliates, and for the one year period following the Participant’s termination of employment for any reason, the Participant will not directly or indirectly, own, manage, operate, control (including indirectly through a debt, equity investment, or otherwise), provide services to, or be employed by, any person or entity engaged in any business that is (i) located in a region with respect to which the Participant had substantial responsibilities while employed by the Company or its Affiliates, and (ii) competitive, with (A) the line of business or businesses of the Company or its Subsidiaries that the Participant was employed with during the Participant’s employment (including any prospective business to be developed or acquired that was proposed at the date of termination), or (B) any other business of the Company or its Subsidiaries with respect to which the Participant had substantial exposure during such employment.

 

- 4 -

  b. Except as prohibited by law, the Participant further agrees that during his employment with the Company or its Affiliates, and for the two-year period thereafter, the Participant will not, directly or indirectly, on his own behalf or on behalf of another (i) solicit, recruit, aid or induce any employee of the Company or any of its Affiliates to leave their employment with the Company or its Affiliates in order to accept employment with or render services to another person or entity unaffiliated with the Company or its Subsidiaries, or hire or knowingly take any action to assist or aid any other person or entity in identifying or hiring any such employee, or (ii) solicit, aid, or induce any customer of the Company or any of its Affiliates to purchase goods or services then sold by the Company or its Affiliates from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such customer, or (iii) otherwise interfere with the relationship of the Company or any of its Subsidiaries with any of its employees, customers, agents, or representatives.

 

  c. Irreparable injury will result to the Company, and to its business, in the event of a breach by the Participant of any of the Participant’s covenants and commitments under this Award, including the covenants of non-competition and non-solicitation. Therefore, in the event of a breach of such covenants and commitments, in the sole discretion of the Company, any of the Participant’s unvested Units shall be immediately rescinded and the Participant will forfeit any rights he or she has with respect thereto. In the event of such a breach, upon demand by the Company, the Participant hereby agrees and promises immediately to deliver to the Company the number of Shares (or, in the discretion of the Company, the cash value of said Shares) the Participant received for Units that vested or were delivered during the period beginning six months prior to the Participant’s termination of employment and ending on the six-month anniversary of such termination of employment. In addition, the Company reserves all rights to seek any and all remedies and damages permitted under law, including, but not limited to, injunctive relief, equitable relief and compensatory damages. The Participant further acknowledges and confirms that the terms of this paragraph 16, including but not limited to the time and geographic restrictions, are reasonable, fair, just and enforceable by a court.

 

  d. The Participant understands and agrees that by accepting this Award (and the opportunity to acquire shares hereunder), the provisions of this paragraph 16 are binding upon the Participant, regardless of whether Shares are ultimately issued pursuant to this Award. These provisions survive the termination of this Award Agreement.

Failure of the Participant to affirmatively ACKNOWLEDGE or reject this Award within the sixty (60) day period following the date of grant will result in the Participant’s IMMEDIATE AND AUTOMATIC acceptance of this Award and the terms and conditions of this Award Agreement and the Plan, including the non-competition and non-solicitation provisions contained herein.

 

- 5 -

The Company has caused this Award to be executed by one of its authorized officers as of the date of grant.

JOHNSON CONTROLS INTERNATIONAL PLC

/s/Judith A. Reinsdorf

Judith A. Reinsdorf

Executive Vice President and General Counsel

 

- 6 -

Exhibit 10.3

 

LOGO

JOHNSON CONTROLS INTERNATIONAL PLC

2012 SHARE AND INCENTIVE PLAN (AMENDED AND RESTATED

AS OF SEPTEMBER 2, 2016) (THE “PLAN”)

RESTRICTED SHARE UNIT AWARD AGREEMENT

Terms for Restricted Share Units

The Plan has been adopted to permit awards of restricted share units to be made to certain key employees of the Company or any Affiliate. The Company desires to provide incentives and potential rewards for future performance by the Participant by providing the Participant with a means to acquire or to increase his proprietary interest in the Company’s success.

Definitions . Capitalized terms used in this Award Agreement have the following meanings:

 

(a) “Award” means this grant of Restricted Share Units.

 

(b) “Award Notice” means the Award notification delivered to the Participant.

 

(c) “Cause” means (i) if the Participant is subject to an employment agreement with the Company or a Subsidiary that contains a definition of “cause”, such definition, or (ii) otherwise, any of the following as determined by the Committee: (A) violation of the provisions of any employment agreement, non-competition agreement, confidentiality agreement, or similar agreement with the Company or a Subsidiary, or the Company’s or a Subsidiary’s code of ethics, as then in effect, (B) conduct rising to the level of gross negligence or willful misconduct in the course of employment with the Company or a Subsidiary, (C) commission of an act of dishonesty or disloyalty involving the Company or a Subsidiary, (D) violation of any federal, state or local law in connection with the Participant’s employment or service, or (E) breach of any fiduciary duty to the Company or a Subsidiary.

 

(d) “Company” means Johnson Controls International plc, an Irish public limited company, or any successor thereto.

 

(e) “Fair Market Value” means, per Share on a particular date, the closing sales price on such date on the New York Stock Exchange, or if no sales of Shares occur on the date in question, on the next preceding date on which there was a sale on such market.

 

(f) “Plan” means the Johnson Controls International plc 2012 Share and Incentive Plan (as amended and restated as of September 2, 2016) and as may be further amended from time to time.

 

(g) “Restriction Period” means the length of time indicated in the Award Notice during which the Award is subject to vesting. During the Restriction Period, the Participant cannot sell, transfer, pledge, assign or otherwise encumber the Restricted Share Units (or a portion thereof) subject to this Award.

 

(h) “Restricted Share Unit” means the right to receive one Share in the future, subject to a risk of forfeiture and the Restriction Period.

 

(i) “Retirement” means termination of employment from the Company and its Subsidiaries (for other than Cause) on or after attainment of age fifty-five (55) and completion of five (5) years of continuous service with the Company and its Subsidiaries (including, for Participants who are Legacy Johnson Controls Employees, service with Johnson Controls, Inc. and its affiliates prior to the Merger).

 

(j) “Share” means an ordinary share in the capital of the Company.

Other capitalized terms used in this Award Agreement have the meanings given in the Plan.

The parties agree as follows:

1.     Grant of Award . Subject to the terms and conditions of the Plan, a copy of which has been delivered to the Participant and made a part of this Award, and to the terms and conditions of this Award Agreement, the Company grants to the Participant an award of Restricted Share Units, as specified in the Award Notice, on the date and with respect to the number of Shares specified in the Award Notice.

2.     Terms of the Restricted Share Units :

 

  a. Restriction Period . During the Restriction Period, the Restricted Share Units shall be subject to forfeiture as provided in Section 3.

 

  b. Settlement of Restricted Share Units . All Restricted Share Units earned hereunder shall be credited to the Participant’s account under the Johnson Controls Senior Executive Deferred Compensation Plan (or any successor or similar deferred compensation plan for which the Participant is eligible).

 

  c. Dividend Equivalent Units . Any cash dividends or other distributions paid or delivered with respect to the Shares for which the record date occurs on or before the last day of the Restriction Period will result in a credit to a bookkeeping account for the benefit of the Participant. The credit will be equal to the dividends or other distributions that would have been paid with respect to the Shares subject to the Restricted Share Units had such Shares been outstanding. The account will be converted into and settled in additional Shares at the same time as the Restricted Share Units are allocated to the Johnson Controls Senior Executive Deferred Compensation Plan. Prior to the end of the Restriction Period, such account will be subject to the same terms and conditions (including risk of forfeiture) as the Restricted Share Units to which the dividends or other distributions relate.

3.     Termination of Employment – Risk of Forfeiture.

 

  a. Death . If the Participant’s employment with the Company and its Affiliates terminates because of death at a time when the Participant could not have been terminated for Cause, then, effective as of the date the Company determines the Participant’s employment terminated due to death (provided such determination is made no later than the end of the calendar year following the calendar year in which death occurs), the Participant shall become fully vested in all of the Restricted Share Units subject to this Award and any remaining Restriction Period shall automatically lapse.

 

  b. Disability . If the Participant’s employment with the Company and its Affiliates terminates because of Disability at a time when the Participant could not have been terminated for Cause, then the Participant shall become fully vested in all of the Restricted Share Units subject to this Award and any remaining Restriction Period shall automatically lapse as of the date of such termination of employment.

 

  c. Involuntary Termination . If the Participant’s employment with the Company and its Affiliates is terminated by the Company or an Affiliate at a time when the Participant could not have been terminated for Cause, then the Participant shall become vested in, and the Restriction Period shall lapse with respect to, a pro rata portion of the total number of Restricted Share Units subject to this Award based on the number of full months of the Participant’s employment during the Restriction Period prior to such termination compared to the total number of full months in the original Restriction Period (with an offset for any Restricted Share Units that have previously vested). Any Restricted Share Units subject to this Award that do not become vested under this paragraph as a result of such termination shall automatically be forfeited as of the date of such termination.

 

  d. Other Termination. If the Participant’s employment terminates for any reason not described above (including retirement or termination by the Company for Cause), then any Restricted Share Units (and all deferred dividends paid or credited thereon) still subject to the Restriction Period as of the date of such termination shall be forfeited. The Company may suspend payment or delivery of Shares (without liability for interest thereon) pending the Committee’s determination of whether the Participant was or should have been terminated for Cause.

 

- 2 -

4.     No Voting Rights . The Participant shall not have any voting rights with respect to the Number of Shares underlying the Units until such Shares have been earned and issued.

5.     Withholding . The Participant agrees to remit to the Company any foreign, Federal, state and/or local taxes (including the Participant’s FICA tax obligation) required by law to be withheld with respect to the issuance of Shares under this Award, the vesting of this Award or the payment of cash under this Award. Notwithstanding anything to the contrary in this Award, if the Company or any Affiliate of the Company is required to withhold any Federal, state or local taxes or other amounts in connection with the Award, then the Company may require the Participant to pay to the Company, in cash, promptly on demand, amounts sufficient to satisfy such tax obligations or make other arrangements satisfactory to the Company regarding the payment to the Company of the aggregate amount of any such taxes and other amounts. Alternatively, the Company can withhold Shares no longer restricted, or can withhold from cash or property, including cash or Shares under this Award, payable or issuable to the Participant, in the amount needed to satisfy any withholding obligations; provided that, to the extent Shares are withheld to satisfy taxes, the amount to be withheld may not exceed the total minimum statutory tax withholding obligations associated with the transaction to the extent needed for the Company and its Subsidiaries to avoid an accounting charge until Accounting Standards Update 2016-09 applies to the Company, after which time the amount to be withheld may not exceed the total maximum statutory tax rates associated with the transaction.

6.     No Claim for Forfeiture . Neither the Award nor any benefit accruing to the Participant from the Award will be considered to be part of the Participant’s normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments. In no event may the Award or any benefit accruing to the Participant from the Award be considered as compensation for, or relating in any way to, past services for the Company or any Affiliate. In consideration of the Award, no claim or entitlement to compensation or damages shall arise from forfeiture of the Award resulting from termination of the Participant’s employment by the Company or any Affiliate (for any reason whatsoever and whether or not in breach of local labor laws) and the Participant irrevocably releases the Company and its Affiliates from any such claim that may arise. If, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by acknowledging the grant, the Participant shall have been deemed irrevocably to have waived any entitlement to pursue such claim.

7.     Electronic Delivery . The Company or its Affiliates may, in its or their sole discretion, decide to deliver any documents related to current or future participation in the Plan or related to this Award by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. The Participant hereby agrees that all on-line acknowledgements shall have the same force and effect as a written signature.

8.     Securities Compliance. The Company may place a legend or legends upon the certificates for Shares issued under the Plan and may issue “stop transfer” instructions to its transfer agent in respect of such Shares as it determines to be necessary or appropriate to (a) prevent a violation of, or to obtain an exemption from, the registration requirements of the Securities Act of 1933, as amended, applicable state securities laws or other legal requirements, or (b) implement the provisions of the Plan, this Award or any other agreement between the Company and the Participant with respect to such Shares.

9.     Successors . All obligations of the Company under this Award shall be binding on any successor to the Company. The terms of this Award and the Plan shall be binding upon and inure to the benefit of the Participant, and his heirs, executors, administrators or legal representatives.

10.     Legal Compliance . The granting of this Award and the issuance of Shares under this Award shall be subject to all applicable laws, rules, and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.

 

- 3 -

11.     Governing Law; Arbitration . This Award, and the interpretation of this Award Agreement, shall be governed by (a) the internal laws of Ireland (without reference to conflict of law principles thereof that would direct the application of the laws of another jurisdiction) with respect to the validity and authorization of any Shares issued under this Award, and (b) the internal laws of the State of Wisconsin (without reference to conflict of law principles thereof that would direct the application of the laws of another jurisdiction) with respect to all other matters. Arbitration will be conducted per the provisions in the Plan.

12.     Data Privacy and Sharing . As a condition of the granting of the Award, the Participant acknowledges and agrees that it is necessary for some of the Participant’s personal identifiable information to be provided to certain employees of the Company, the third party data processor that administers the Plan and the Company’s designated third party broker in the United States. These transfers will be made pursuant to a contract that requires the processor to provide adequate levels of protection for data privacy and security interests in accordance with the EU Data Privacy Directive 95/46 EC and the implementing legislation of the Participant’s home country (or any successor or superseding regulation). By acknowledging the Award, the Participant acknowledges having been informed of the processing of the Participant’s personal identifiable information described in the preceding paragraph and consents to the Company collecting and transferring to the Company’s Shareholder Services Department, and its independent benefit plan administrator and third party broker, the Participant’s personal data that are necessary to administer the Award and the Plan. The Participant understands that his personal information may be transferred, processed and stored outside of the Participant’s home country in a country that may not have the same data protection laws as his home country, for the purposes mentioned in this Award.

This Award, the Award Notice, the Summary of Terms and Conditions delivered to the Participant and any other documents expressly referenced in this Award contain all the provisions applicable to the Award and no other statements, documents or practices may modify, waive or alter such provisions unless expressly set forth in writing, signed by an authorized officer of the Company and delivered to the Participant.

13.     Non-Competition; Non-Solicitation .

 

  a. Except as prohibited by law, the Participant agrees that during his employment with the Company or its Affiliates, and for the one year period following the Participant’s termination of employment for any reason, the Participant will not directly or indirectly, own, manage, operate, control (including indirectly through a debt, equity investment, or otherwise), provide services to, or be employed by, any person or entity engaged in any business that is (i) located in a region with respect to which the Participant had substantial responsibilities while employed by the Company or its Affiliates, and (ii) competitive, with (A) the line of business or businesses of the Company or its Subsidiaries that the Participant was employed with during the Participant’s employment (including any prospective business to be developed or acquired that was proposed at the date of termination), or (B) any other business of the Company or its Subsidiaries with respect to which the Participant had substantial exposure during such employment.

 

  b. Except as prohibited by law, the Participant further agrees that during his employment with the Company or its Affiliates, and for the two-year period thereafter, the Participant will not, directly or indirectly, on his own behalf or on behalf of another (i) solicit, recruit, aid or induce any employee of the Company or any of its Affiliates to leave their employment with the Company or its Affiliates in order to accept employment with or render services to another person or entity unaffiliated with the Company or its Subsidiaries, or hire or knowingly take any action to assist or aid any other person or entity in identifying or hiring any such employee, or (ii) solicit, aid, or induce any customer of the Company or any of its Affiliates to purchase goods or services then sold by the Company or its Affiliates from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such customer, or (iii) otherwise interfere with the relationship of the Company or any of its Subsidiaries with any of its employees, customers, agents, or representatives.

 

  c.

Irreparable injury will result to the Company, and to its business, in the event of a breach by the Participant of any of the Participant’s covenants and commitments under this Award, including the covenants of non-competition and non-solicitation. Therefore, in the event of a breach of such covenants and commitments, in the sole discretion of the Company, any of the Participant’s unvested Units shall be immediately rescinded and the Participant will forfeit any rights he or she

 

- 4 -

  has with respect thereto. In the event of such a breach, upon demand by the Company, the Participant hereby agrees and promises immediately to deliver to the Company the number of Shares (or, in the discretion of the Company, the cash value of said Shares) the Participant received for Units that vested or were delivered during the period beginning six months prior to the Participant’s termination of employment and ending on the six-month anniversary of such termination of employment. In addition, the Company reserves all rights to seek any and all remedies and damages permitted under law, including, but not limited to, injunctive relief, equitable relief and compensatory damages. The Participant further acknowledges and confirms that the terms of this paragraph 13, including but not limited to the time and geographic restrictions, are reasonable, fair, just and enforceable by a court.

 

  d. The Participant understands and agrees that by accepting this Award (and the opportunity to acquire Shares hereunder), the provisions of this paragraph 13 are binding upon the Participant, regardless of whether Shares are ultimately issued pursuant to this Award. These provisions survive the termination of this Award Agreement.

Failure of the Participant to affirmatively ACKNOWLEDGE or reject this Award within the sixty (60) day period following the date of grant will result in the Participant’s IMMEDIATE AND AUTOMATIC acceptance of this Award and the terms and conditions of this Award Agreement and the Plan, including the non-competition and non-solicitation provisions contained herein.

The Company has caused this Award to be executed by one of its authorized officers as of the date of grant.

JOHNSON CONTROLS INTERNATIONAL PLC

/s/Judith A. Reinsdorf

Judith A. Reinsdorf

Executive Vice President and General Counsel

 

- 5 -

Exhibit 10.4

 

LOGO

September 14, 2017

Brian J. Stief

Chief Financial Officer

Johnson Controls International plc

Dear Mr. Stief,

The purpose of this letter agreement (this “Letter Agreement”) is to formalize the agreement between you and Johnson Controls International plc (the “Company”) regarding the termination of your change in control employment agreement and to address certain matters related thereto. Your execution of this Letter Agreement will represent your acceptance of all the terms set forth below.

 

  1. Termination of the Change of Control Agreement . The Change of Control Executive Employment Agreement dated as of July 28, 2010, as amended on March 31, 2016, between you and the Company (the “COC Agreement”) shall terminate as of the date hereof. Upon the termination of the COC Agreement, you shall have no further rights thereunder, including but not limited to the right to receive any payments described therein.

 

  2. Consideration . As consideration for your agreement to (i) terminate the COC Agreement and (ii) abide by the Restrictive Covenants set forth in paragraph 3 below, the Company has agreed to provide you with the following:

(a) Equity Awards . A Restricted Share Unit/Performance Share Unit Award with a grant date value of US$12,000,000 to be granted on September 14, 2017 (the “Retention RSU/PSU Award”); a Restricted Share Unit Award with a grant date value of US$4,000,000, to be granted on September 14, 2017, and a Performance Unit Award with a grant date value of US$4,000,000, to be granted on September 14, 2017. Such awards will be subject to the terms and conditions of their respective award agreements.

(b) Cash Payment . If, on the date of vesting of the Retention RSU/PSU Award, the value of the units earned under such award (without regard to any dividend equivalent units credited thereon) are less than twelve million dollars (US$12,000,000) (calculated by multiplying the number of units earned by the Fair Market Value of a Share on such date), then the Company shall (or shall cause an affiliate to) make a cash payment to you equal to the difference between (i) US$12,000,000 and (ii) the value of such units earned as of the vesting date (without regard to any dividend equivalent units credited thereon). For the sake of clarity, no cash payment shall be made if the value of the units earned under the Retention RSU/PSU Award is greater than or equal to US$12,000,000 on the date of vesting, or if you are terminated for Cause. Any capitalized term used in this paragraph 2(a) and not otherwise defined in this Letter Agreement shall have the meaning given to it in the Retention RSU/PSU Award.

 

  3. Restrictive Covenants .

(a) Confidential Information . You agree that you will not, directly or indirectly, use, make available, sell, disclose or otherwise communicate to any person, other than in the course of the your assigned duties and for the benefit of the Company or an affiliate, either during the period of your employment or at any time thereafter, any nonpublic, proprietary or confidential information, knowledge or data relating to the Company, any of its Subsidiaries, affiliated companies or

businesses, which shall have been obtained by you during your employment by the Company or an affiliate. The foregoing shall not apply to information that (i) was known to the public prior to its disclosure to you; (ii) becomes known to the public subsequent to disclosure to you through no wrongful act of you or any representative of you; or (iii) you are required to disclose by applicable law, regulation or legal process (provided that, to the extent permitted by law, regulation or legal process, you provide the Company with prior notice of the contemplated disclosure and reasonably cooperate with the Company at its expense in seeking a protective order or other appropriate protection of such information). Notwithstanding clauses (i) and (ii) of the preceding sentence, your obligation to maintain such disclosed information in confidence shall not terminate where only portions of the information are in the public domain. Notwithstanding the foregoing, nothing herein shall prohibit you from reporting or otherwise disclosing possible violations of state, local or federal law or regulation to any governmental agency or entity, or making other disclosures that, in each case, are protected under whistleblower provisions of local, state or federal law or regulation.

(b) Non-Competition . You acknowledge that you perform services of a unique nature for the Company that are irreplaceable, and that your performance of such services for a competing business will result in irreparable harm to the Company. Accordingly, except as prohibited by law, during your employment with the Company or an affiliate and for the one (1) year period following termination of employment for any reason, you agrees that you will not, directly or indirectly, own, manage, operate, control (including indirectly through a debt or equity investment), provide services to, or be employed by any person or entity engaged in any business that is (i) located in or provides services or products to a region with respect to which you had substantial responsibilities while employed by the Company or its present or former parent, subsidiaries or affiliates, and (ii) competitive with (A) the line of business or businesses of the Company or its present or predecessor parent, subsidiaries or affiliates that you were employed with during your employment (including any prospective business to be developed or acquired that was proposed at the date of termination of employment), or (B) any other business of the Company or its present or predecessor parent, subsidiaries or affiliates with respect to which you had substantial exposure during such employment. This paragraph 3(b) shall not prevent you from owning not more than one percent (1%) of the total shares of all classes of stock outstanding of any publicly held entity engaged in such business, nor will it restrict you from rendering services to charitable organizations, as such term is defined in section 501(c) of the Internal Revenue Code of 1986, as amended.

(c) Non-Solicitation . You agree that during your employment with the Company or an affiliate, and for the two-year period thereafter, you will not, directly or indirectly, on your own behalf or on behalf of another (i) solicit, recruit, aid or induce any employee of the Company or its present or former parent, subsidiaries or affiliates to leave their employment with the Company or its present or former parent, subsidiaries or affiliates in order to accept employment with or render services to another person or entity unaffiliated with the Company or its present or former parent, subsidiaries or affiliates, or (ii) hire or knowingly take any action to assist or aid any other person or entity in identifying or hiring any such employee, or solicit, aid, or induce any customer of the Company or its present or former parent, subsidiaries or affiliates to purchase goods or services then sold by the Company or its present or former parent, subsidiaries or affiliates from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such customer, or otherwise interfere with the relationship of the Company or its present or former parent, subsidiaries or affiliates with any of its employees, customers, agents, or representatives.

(d) Non-Disparagement . Each of you and the Company (for purposes hereof, the Company shall mean only the officers and directors thereof, or the officers and directors of any affiliate, and not any other employees) agrees not to make any statements that disparage the other party, or in the case of the Company, its respective subsidiaries, affiliates, employees, officers, directors, products or services. Notwithstanding the foregoing, statements made in the course of sworn testimony in administrative, judicial or arbitral proceedings (including, without limitation, depositions in connection with such proceedings) shall not be subject to this paragraph 3(d).

 

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(e) Reasonableness . In the event the provisions of this paragraph 3 shall ever be deemed to exceed the time, service, scope, geographic or other limitations permitted by applicable laws in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, service, scope, geographic or other limitations, as the case may be, permitted by applicable laws.

 

  4. Entire Agreement . This Letter Agreement constitutes a complete and exclusive statement of the terms of the agreement between the parties and supersedes all prior agreements with respect to its subject matter.

 

  5. No Right to Employment . This Letter Agreement is not to be construed as an employment contract. Nothing in this Letter Agreement is or will be construed as an agreement or understanding, express or implied, that the Company or any of its affiliates will employ you in any particular position, for any particular period of time or at any particular compensation or benefit rate.

 

  6. Waiver . The failure of any party hereto to insist, in any one or more instances, upon performance of any of the terms and conditions of this Letter Agreement, shall not be construed as a waiver or relinquishment of any right granted hereunder or of the future performance of any such term, covenant or condition.

 

  7. Governing Law . This Letter Agreement shall be governed by and construed in accordance with the internal laws of the State of Wisconsin, without reference to the conflict of law principles thereof.

[signature page follows]

 

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If you accept the terms of this Letter Agreement, then please return an originally signed copy of this Letter Agreement to Lynn Minella.

 

Sincerely,

 

JOHNSON CONTROLS INTERNATIONAL PLC

By:   /s/ Lynn Minella
Lynn Minella
Chief Human Resources Officer

Please sign below to signify your understanding an acceptance of the terms and conditions of this agreement.

 

/s/ Brian Stief
Brian Stief
Date: September 14, 2017

 

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