Corporate Governance Guidelines

JOHNSON CONTROLS INC.

CORPORATE GOVERNANCE GUIDELINES

Johnson Controls, Inc.'s vision is a more comfortable, safe and sustainable world. In addition to achieving financial performance objectives, the Johnson Controls Board of Directors and management believe that the Company must assume a leadership position in the area of corporate governance to fulfill its vision.

Board Duties

The Board of Directors shall among other things, in discharging its obligations under law:

Corporate Focus

Confirm that processes are in place that are designed to maintain the integrity and ethical conduct of the Company, including the integrity of its financial statements, its compliance with law and ethics and its relationships with shareholders, customers, employees and the communities in which the Company operates
Review and approve strategic plans to enhance shareholder value
Review corporate performance: financial, operations, customer and supplier relations, and community relations
Be apprised of relations with shareholders

Management Focus

Oversee and evaluate management’s systems for internal control, financial reporting and public disclosure
Oversee and evaluate senior management performance and compensation
Plan for effective succession of the chief executive officer and senior management, including leader development and promoting diversity
Provide advice and counsel to senior management
Oversee pension investment and management

Board Focus

Represent the shareholders in carrying out its statutory role and to oversee management to assure that the long-term interests of the shareholders are being served
Assess major risks facing the Company and review options for their mitigation
Establish corporate governance standards
Undertake an annual performance evaluation of the Board of Directors

Director Focus

Recommend candidates to the shareholders for election to the Board of Directors
Set standards for Director qualification
Set standards for Director orientation and continuing education

Process

The Corporate Governance Committee of the Board has been empowered by its charter to review and recommend corporate governance practices and policies of Johnson Controls, which may include continuously comparing the corporate governance practices of Johnson Controls to those of other public companies and those recommended by the investment community, and to make recommendations to the Board to assure the Company's leadership in this area. In this regard, the Committee regularly reviews guidelines or practices adopted by other leading public companies, surveys and trend information published by academia and the investment community, reports on investor forums in the subject area and the written policies of the Company's institutional investors. In addition, periodic contacts are made directly to some of the Company's largest institutional investors to solicit their views on specific governance issues. The Company's proxy results and any voting trends apparent from the overall proxy season of other public companies are reviewed annually. The Committee then reports its findings and recommendations for action by the entire Board. These Guidelines will be made available on the Johnson Controls website and written copies will be provided to shareholders requesting them.

Practices

Johnson Controls believes its leadership in the corporate governance area is evident in the following practices:

Director Independence. The Board shall establish and maintain standards used to determine which Directors are independent. These standards shall comport with the New York Stock Exchange's (the "NYSE") definition of "independence," as stated in section 303A-02 of the NYSE regulations. Under the standards, the following relationships that currently exist or that have existed, including during the preceding three years, will not be considered to be material relationships that would impair a Director's independence:

a) A family member of the Director is or was an employee (other than an executive officer) of the Company.

b) A Director, or a family member of the Director, receives or received less than $100,000 during any twelve-month period in direct compensation from the Company, other than Director and committee fees and pension or other forms of deferred compensation for prior service (provided that such compensation is not contingent in any way on continued service with the Company). Compensation received by (a) a Director for former service as an interim Chairperson or Chief Executive Officer or other executive officer of the Company or (b) a family member of the Director for service as a non-executive employee of the Company need not be considered.

c) A Director, or a family member of the Director, is a former partner or employee of the Company's internal or external auditor but did not personally work on the Company's audit within the last three years; or a family member of a Director is employed by an internal or external auditor of the Company but does not participate in such auditor’s audit, assurance or tax compliance practice.

d) A Director, or a family member of the Director, is or was an employee, other than an executive officer, of another company where any of the Company's present executives serve on that company's compensation committee.

e) A Director is or was an executive officer, employee or director of, or has or had any other relationship (including through a family member) with, another company, that makes payments (other than contributions to tax exempt organizations) to, or receives payments from, the Company for property or services in an amount which, in any single fiscal year, does not exceed the greater of $1 million or 2% of such other company's consolidated gross revenues. Both the payments and the consolidated gross revenues to be measured shall be those reported in the last completed fiscal year.

f) A Director is or was an executive officer, employee or director of, or has or had any other relationship (including through a family member) with, a tax exempt organization to which the Company's and its foundation's contributions in any single fiscal year do not exceed the greater of $1 million or 2% of such organization's consolidated gross revenues.

g) A Director is a shareholder of the Company.

h) A Director has a relationship that currently exists or that has existed (including through a family member) with a company that has a relationship with the Company, but the Director's relationship with the other company is through the ownership of the stock or other equity interests of that company that constitutes less than 10% of the outstanding stock or other equity interests of that company.

i) A family member of the Director, other than his or her spouse, is an employee of a company that has a relationship with the Company but the family member is not an executive officer of that company.

j) A family member of the Director has a relationship with the Company but the family member is not an immediate family member of the Director. An "immediate family member" includes a person's spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-laws, and anyone (other than domestic employees) who shares such person's home.

k) Any relationship that a Director (or an immediate family member of the Director) previously had that constituted an automatic bar to independence under NYSE listing standards after such relationship no longer constitutes an automatic bar to independence in accordance with NYSE listing standards.

The Board will on an on-going basis, and at least once annually by way of a Directors and Officers Questionnaire, affirmatively determine for each Director whether or not he or she has a material relationship with Johnson Controls according to the standards expressed above, and report such determinations (and the standards used to make such determinations) in the proxy statement. A substantial majority of the Board (and in any case at least two-thirds) will be independent.

Director Qualifications. The Corporate Governance Committee shall establish qualifications that the Committee believes are necessary for one or more of the Directors to meet, criteria to evaluate any candidate's capabilities to serve as a Director and a selection procedure. The criteria for selecting new Directors shall include the skill sets, professional experience, independence, other time demands (including service on other boards), diversity, technical capabilities, international and industry experience of the current Board and which need to be addressed in the selection of new Directors. Each Director who will stand for reelection at the next annual shareholders' meeting will receive a performance evaluation during the period of March through September of the prior year. The evaluation shall contain a review of the Director's attendance, changes in independence or other qualifications or criteria or status, participation, expertise and other contributions to the Board and its committees. This evaluation will be led by the Chairs of the Board and the Corporate Governance Committee and reviewed with the Corporate Governance Committee prior to being discussed with the Director being evaluated. This evaluation shall form the basis for a decision on whether the Director would be renominated by the Board to stand for reelection. The Corporate Governance Committee is responsible for determining how Directors’ performance is evaluated.

Director Responsibilities. Each Director is expected to use his or her best efforts to personally attend all Board and committee meetings on which such Director serves and to review all background and explanatory materials (including interim financial and operational reports sent to the Directors) that are distributed at or prior to such meetings and otherwise be prepared to participate actively at such meetings. Attendance by phone is acceptable with the prior consent of the Chair of the Board if a Director cannot attend meetings due to travel problems, conflicts, or similar causes. Directors are expected to attend the annual meeting of the Company’s shareholders.

Committee Independence. The Audit Committee, the Compensation Committee, the Finance Committee and the Corporate Governance Committee are comprised entirely of independent Directors.

Committee Structure. Each of the committees has a written charter, which specifies its responsibilities and scope. Each committee will annually review its charter, and each committee will submit proposed changes to its charter to the Board for review and approval. Each committee has also adopted written procedures. An annual calendar is published indicating the schedule of the regular topics to be considered by each committee at each of its meetings during the year. The Corporate Governance Committee regularly reviews such issues as the number of committees, member assignments and rotation and the need for any restructuring of committees.

Committee Operation. Each Committee Chair, in consultation with the members of the committee, determines the frequency and length of their meetings, as well as any additional agenda items. Minutes of each committee shall be distributed to all Directors prior to their next meeting.

Board Structure. The Corporate Governance Committee regularly reviews and makes recommendations on the size of the Board, the frequency and length of its meetings and the operation of the Board. There is a published calendar for the regular agenda items to be considered by the Board at each of its meetings. The Chair of the Board establishes any additional agenda items for each Board meeting. The Presiding Director communicates regularly with the Chair after each Board meeting to provide feedback and comments on the substance of the items presented, and any further suggestions for enhancing management’s effectiveness. Each Board member is free to suggest the inclusion of items on the agenda. The agenda includes reports from each committee that has held a meeting, and at the time of any such report Board members will have the opportunity to discuss the committee’s processes and actions.

Board Operation. Written agenda and supporting materials are distributed to the Directors sufficiently before the meeting date to allow their complete review and consideration prior to the meeting. Interim financial and operational reports are sent to the Directors every month. The Board has full authority to retain such financial, legal, or other consultants, as it deems appropriate. Management will make the necessary funds available to pay for such services.

Board Interaction. Broad exposure of the Company's business managers to the Board is sought in regular presentations on the business and its plans. Board members have complete access to the Company's management and, as necessary and appropriate, independent advisors.

Strategic Planning Role. Multiple meetings are scheduled annually at which management presents the strategic (including human resources) and profit plans for the Company to the Board. The Board reviews the proposed plans, receives answers and information on any questions, considers and discusses the plans in executive session (without management present) and approves or rejects the strategic plan of the Company by formal resolution.

Board Criteria. The Board as a whole should possess certain core competencies. All candidates will be reviewed based upon the Board’s current capabilities, any needs therein and the capabilities of the candidate in such areas as financial and other functional expertise, industry knowledge, management experience, international expertise, diversity and investment expertise. In addition, candidates must not serve on more than four other boards of publicly-traded companies. The Board requires all Directors to get final approval from the Corporate Governance Committee prior to accepting a position on the board of another publicly-traded company. Without limitation, the Corporate Governance Committee will take into account whether any Director serves on the board of directors of more than three publicly-traded companies, including the Company. Directors who attended or participated in less than seventy-five percent of the Board and committee meetings on which they serve for two consecutive years will not be eligible for reelection and may be removed by the Board unless the Board finds extenuating circumstances. The Chief Executive Officer may not serve on more than two other boards of publicly-traded companies. The Chief Executive Officer will review any service on new or additional boards with the Corporate Governance Committee before accepting such positions.

Board Selection. The Board selects nominees to become Board members for consideration by shareholders as nominees of the Board or for election by the Board to fill vacancies. The screening process is delegated to the Corporate Governance Committee with direct input from the Chair of the Board and Chief Executive Officer. The Committee may, if it deems appropriate, retain, for a fee, recruiting professionals to identify and assist in evaluating candidates. The invitation would normally be extended by the Chair of the Corporate Governance Committee and the Chair of the Board.

Board Succession. The Board has adopted the recommendations of the Corporate Governance Committee in establishing policies on a retirement age for Directors (the last day of the calendar year in which the Director reaches his or her 72nd birthday) and on changes in Director's job responsibilities. Upon change of position, a Director shall advise the Chair of the Corporate Governance Committee and tender his or her resignation. The Committee may either accept the resignation at that time, revisit and review the matter a year later or provide the Director with a reasonable period of time to obtain a comparable position. The Board has similarly determined that no Director shall serve as a Committee Chair of a committee for more than five consecutive years or after the last day of the calendar year in which the Director reaches his or her 70th birthday. The Board has also determined that, at the time a Chief Executive Officer shall either resign or retire from the Company, he or she shall resign or retire from the Board as well, following a transition period, which is mutually agreed between the Chief Executive Officer and the Compensation Committee.

Board Compensation. The Company's management annually reports to the Corporate Governance Committee the status of the Board's compensation in relation to other public companies, using the published studies of experts in the field. Changes in compensation are recommended by the Committee for action by the full Board. It is the Board's view that a compensation system should align the Directors' interests with those of the Company's shareholders. The Corporate Governance Committee shall recommend an overall compensation program for Directors including the specific elements of such compensation. Currently, half of the Board's annual retainer is paid in Company stock.

Management Evaluation and Development. The Compensation Committee annually meets in executive session to establish goals with the Chief Executive Officer and to evaluate his or her performance. The Compensation Committee establishes the compensation of the Chief Executive Officer and reviews this matter with the Board. The Compensation Committee also establishes the compensation for the Company's executive officers other than the Chief Executive Officer. The Compensation Committee retains an independent outside expert to compare the Company's executive compensation with that of similar public companies. The Committee also reviews annually whether such compensation programs are effectively structured to be performance based and to align such executives' interests with those of the Company's shareholders. The Committee also considers annually the Company's succession plans for its key positions and the management development programs.

Institutional Investor Interaction. Management maintains an ongoing program of communication with its major institutional investors, and communicates such feedback to the Board. If an investor requests a contact with the Board, such request is referred to the Chair of the Board for his or her recommendation and any necessary action by the Board.

Board Stock Ownership. The Corporate Governance Committee shall establish guidelines for ownership of stock by Directors and from time to time compare these with similar guidelines established by comparable public companies. The guideline now requires that each Director own an amount of Company stock equal to three times the annual retainer within five (5) years of coming onto the Board.

Board Diversity. The Board should be, and is, composed of qualified individuals who reflect diversity of experience, gender, race, ethnicity, and age.

Board Orientation and Continuing Training. An orientation program is presented for each new Director to acquaint them with the business, the financial picture, compliance policies, and other policies relevant to Directors. In addition a “Director Information Book” is distributed annually to each Director, which contains information on Director compensation, indemnification, meeting schedules, Company Securities and Exchange Commission filings, Company holdings and corporate bylaws. Each Director is expected to attend one or more certified continuing education programs biannually, and management will advise Directors of certified continuing education programs to allow such attendance.

Presiding Director and Executive Sessions. The Board shall meet in executive session (without members of management being present) at least twice annually. Additional executive sessions of the Board shall be held as necessary or appropriate (as determined by the Board member presiding at such meetings during each two-year period) or upon the request of the Corporate Governance Committee or any two other non-management Directors. One of such sessions shall be in conjunction with the annual Strategic Planning meeting. Executive sessions shall be led by the Presiding Director, who shall be an Independent Director appointed as follows. If the designated Director is unavailable to serve as the Presiding Director for an executive session, the Director designated to follow in the rotation shall serve as Presiding Director for that meeting. The Chair of the Corporate Governance Committee shall preside at such executive sessions of the Board for calendar years 2007 and 2008, the Chair of the Audit Committee for 2009 and 2010, the Chair of the Compensation Committee for 2011 and 2012, and the Chair of the Finance Committee for 2013 and 2014, and rotating in the same fashion thereafter. The Presiding Director shall (i) communicate with the CEO after each Board meeting to provide feedback on the substance of the items presented, and any further suggestions for enhancing management’s effectiveness, (ii) coordinate, develop the agenda for and moderate executive sessions for the Board’s independent Directors, and (iii) act as principal liaison between the Independent Directors and the Chair on sensitive issues. In performing the above described responsibilities, the Presiding Director may consider comments and requests of shareholders. The Company encourages shareholders to communicate with Directors. The Corporate Governance Committee will maintain the procedures it has established for shareholders to communicate directly to the Chair of the Corporate Governance Committee, the Chair of the Audit Committee regarding financial or accounting policies or any Director. The Company may screen emails and regular mail to Directors for relevance, but not based on the content of communications that are relevant to Directors in their capacities as Directors.

Board Performance Evaluation. The Corporate Governance Committee shall conduct a performance evaluation of the Board annually, and each committee shall have an annual evaluation of its performance.

Ethics Policy. The Directors shall each certify annually their compliance with the Company’s Ethics Policy. In furtherance of the Ethics Policy, the Audit Committee must approve in advance (to the extent practicable) or ratify all Related Person Transactions (as defined below) involving any executive officer, Director or nominee for Director, and each executive officer, Director or nominee for Director must disclose for review, approval or ratification by the Audit Committee the following information regarding Related Person Transactions: (i) the name of the Related Person (as defined below), and if he or she is an immediate family member of an executive officer, Director or nominee for Director, the nature of such relationship; (ii) the Related Person’s interest in the transaction; (iii) the approximate dollar value of the amount involved in the transaction; (iv) the approximate dollar value of the amount of the Related Person’s interest in the transaction; and (v) in the case of indebtedness, the largest total amount of principal outstanding since the beginning of the Company’s last fiscal year, the amount of principal outstanding as of the latest practicable date, the amount of principal paid since the beginning of the Company’s last fiscal year, and the rate or amount of interest payable on the indebtedness. Such disclosure to the Audit Committee should occur before, if possible, or as soon as practicable after the Related Person Transaction is effected, but in any event as soon as practicable after the executive officer, Director or nominee for Director becomes aware of the Related Person Transaction. In addition, the questionnaire sent annually by the Company to Directors and executive officers will solicit information regarding Related Person Transactions that are currently proposed or occurred since the beginning of the Company’s last fiscal year. Any executive officer, Director or nominee for Director who becomes aware of a Related Person Transaction between the Company and a Significant Stockholder (as defined below) will disclose to the Audit Committee as soon as practicable the information set forth above with respect to such Related Person Transaction. The Committee’s decision whether to approve or ratify the Related Person Transaction should be made in light of the Committee’s determination as to whether the Committee believes consummation of the transaction would be or was contrary to the best interests of the Company. The Committee may take into account the effect of a Director’s Related Person Transaction on such person’s status as an independent member of the Board of Directors and eligibility to serve on committees of the Board of Directors under SEC rules and NYSE listing standards. Any Related Person Transaction shall be disclosed to the full Board of Directors.

A “Related Person” means a “related person” as defined in Instruction 1 to Item 404(a) of Regulation S-K of the Securities and Exchange Commission.

A “Related Person Transaction” is a consummated transaction that Item 404(a) of Regulation S-K would require the Company to disclose or a currently proposed transaction that, if consummated, Item 404(a) of Regulation S-K would require the Company to disclose.

Any waiver or exception request to the Ethics Policy by an executive officer or Director shall be submitted to the Corporate Governance Committee in writing. The Corporate Governance Committee shall consider this request and make a recommendation to the full Board for decision. The Director requesting the waiver shall be excluded from all meetings and votes on the matter. The Committee and Board can secure any legal or other independent consultation they deem necessary to complete such consideration and decision. The Company will maintain the procedures it has established by which employees may anonymously report a possible violation of the Ethics Policy. Additionally, the Audit Committee will maintain the procedures it has established for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters and for employees to report concerns regarding questionable accounting or auditing policies or practices on a confidential, anonymous basis.

Transparency. The Board believes that it is important that the Company’s stakeholders and others are able to review its corporate governance. The Company’s Corporate Governance Guidelines, the committee charters and procedures, the Ethics Policy and other key governance materials are published on its website.

Executive Committee. The Chair of the Board, the Vice Chair, past Chairs of the Board who are current Board members, and the Chairs of the Board committees shall comprise the Executive Committee of the Board. This Committee shall meet as necessary to exercise the authority of the Board in the management of the business and affairs of the Company between meetings of the Board, to coordinate activities among the committees of the Board to ensure efficient allocation of responsibilities, to address such other issues in respect of which the Chair of the Board seeks guidance, and to act upon such other matters as the Board may delegate to it.

Confidentiality. Directors are to act on behalf of all shareholders, and must maintain the confidentiality of information entrusted to them by the Company, except when disclosure is required by law. Directors may use Company information only to the extent needed to perform their responsibilities properly. Directors should not grant interviews or provide comments to the press without prior approval from the Company. Unless Directors receive other guidance from the Company, Directors are expected to decline the opportunity to respond to any inquiries for news or information about the Company and refer the request to the appropriate Company spokesperson.

Confidential Shareholder Voting. Only the election inspectors and certain individuals, independent of the Company, who help with the processing and counting of shareholder votes have access to shareholder votes. Directors and employees of the Company may see a shareholder’s vote only if the Company needs to defend itself against a claim or if there is a proxy solicitation by someone other than the Company.

JOHNSON CONTROLS, INC.
BOARD OF DIRECTORS

Effective: September 2007