The Johnson Controls International plc 2012 Share and Incentive Plan (the "Plan"), as amended in September 2016, authorizes stock options, stock appreciation rights, restricted (non-vested) stock/units, performance shares, performance units and other stock-based awards. The Compensation Committee of the Company's Board of Directors determines the types of awards to be granted to individual participants and the terms and conditions of the awards. As of September 30, 2020, there were 76 million shares of the Company's common stock reserved and 27 million shares available for issuance under the Plan.

The Company has four share-based compensation plans, which are described below. For the fiscal years ended September 30, 2020, 2019 and 2018, compensation cost charged against income for continuing operations, excluding the offsetting impact of outstanding equity swaps, for those plans was approximately $66 million, $103 million and $89 million, respectively, all of which was recorded in selling, general and administrative expenses.

The total income tax benefit recognized for continuing operations in the consolidated statements of income for share-based compensation arrangements was approximately $16 million, $26 million and $22 million for the fiscal years ended September 30, 2020, 2019 and 2018, respectively. The tax impact from the exercise and vesting of equity settled awards was less than $1 million of tax benefit, $6 million of tax expense and $3 million of tax expense for the fiscal years ended September 30, 2020,

Stock options are granted with an exercise price equal to the market price of the Company’s stock at the date of grant. Stock option awards typically vest between two and three years after the grant date and expire ten years from the grant date.

The fair value of each option is estimated on the date of grant using a Black-Scholes option valuation model that uses the assumptions noted in the following table. The expected life of options represents the period of time that options granted are expected to be outstanding, assessed separately for executives and non-executives. The risk-free interest rate for periods during the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatility is based on the historical volatility of the Company's stock since October 2016 blended with the historical volatility of certain peer companies' stock prior to October 2016 over the most recent period corresponding to the expected life as of the grant date. The expected dividend yield is based on the expected annual dividend as a percentage of the market value of the Company’s ordinary shares as of the grant date. The Company uses historical data to estimate option exercises and employee terminations within the valuation model.


	Year Ended September 30,
	2020	2019	2018
Expected life of option (years)	6.5	6.4	6.5
Risk-free interest rate	1.67%	2.77%	2.28%
Expected volatility of the Company’s stock	22.40%	21.80%	23.70%
Expected dividend yield on the Company’s stock	2.49%	3.29%	2.78%


	Weighted Average Option Price		Shares Subject to Option	Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (in millions)
Outstanding, September 30, 2019	$	35.07	12,369,749
Granted	41.67		1,347,310
Exercised	28.80		(2,504,516)
Forfeited or expired	38.30		(1,097,638)
Outstanding, September 30, 2020	$	37.14	10,114,905	4.9	$	46
Exercisable, September 30, 2020	$	36.98	7,473,203	3.6	$	36

In conjunction with the exercise of stock options, the Company received cash payments for the fiscal years ended September 30, 2020, 2019 and 2018 of approximately $75 million, $171 million and $66 million, respectively.

At September 30, 2020, the Company had approximately $9 million of total unrecognized compensation cost related to non-vested stock options granted for continuing operations which is expected to be recognized over a weighted-average period of 1.8 years.

SARs vest under the same terms and conditions as stock option awards; however, they are settled in cash for the difference between the market price on the date of exercise and the exercise price. As a result, SARs are recorded in the Company’s consolidated statements of financial position as a liability until the date of exercise.

The fair value of each SAR award is estimated using a similar method described for stock options. The fair value of each SAR award is recalculated at the end of each reporting period and the liability and expense are adjusted based on the new fair value.


	Weighted Average SAR Price		Shares Subject to SAR	Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (in millions)
Outstanding, September 30, 2019	$	28.67	368,009

Exercised	26.88		(129,277)
Forfeited or expired	25.47		(26,095)
Outstanding, September 30, 2020	$	30.14	212,637	1.8	$	2
Exercisable, September 30, 2020	$	30.14	212,637	1.8	$	2

Restricted stock or restricted stock units are typically share settled unless the employee is a non-U.S. employee or elects to defer settlement until retirement at which point the award would be settled in cash. Restricted awards typically vest over a period of three years from the grant date. The Plan allows for different vesting terms on specific grants with approval by the Board of Directors. The fair value of each share-settled restricted award is based on the closing market value of the Company’s ordinary shares on the date of grant. The fair value of each cash-settled restricted award is recalculated at the end of each reporting period based on the closing market value of the Company's ordinary shares at the end of the reporting period, and the liability and expense are adjusted based on the new fair value.


	Weighted Average Price		Shares/Units Subject to Restriction
Non-vested, September 30, 2019	$	35.98	3,333,076
Granted	41.38		2,053,292
Vested	37.39		(1,634,306)
Forfeited	37.47		(522,183)
Non-vested, September 30, 2020	$	38.58	3,229,879

At September 30, 2020, the Company had approximately $81 million of total unrecognized compensation cost related to non-vested restricted stock arrangements granted for continuing operations which is expected to be recognized over a weighted-average period of 2.1 years.

Performance-based share unit ("PSU") awards are generally contingent on the achievement of predetermined performance goals over a performance period of three years as well as on the award holder's continuous employment until the vesting date. The PSUs are also indexed to the achievement of specified levels of total shareholder return versus a peer group over the performance period. Each PSU that is earned is settled with shares of the Company's ordinary shares following the completion of the performance period, unless the award holder elected to defer a portion or all of the award until retirement which would then be settled in cash.

The fair value of each PSU is estimated on the date of grant using a Monte Carlo simulation that uses the assumptions noted in the following table. The risk-free interest rate for periods during the contractual life of the PSU is based on the U.S. Treasury yield curve in effect at the time of grant. For fiscal 2020, the expected volatility is based on the historical volatility of the Company's stock over the most recent three-year period as of the grant date. For fiscal 2019 and 2018, the expected volatility is based on the historical volatility of the Company's stock since October 2016 blended with the historical volatility of certain peer companies' stock prior to October 2016 over the most recent three-year period as of the grant date.


	Weighted Average Price		Shares/Units Subject to PSU
Non-vested, September 30, 2019	$	39.82	1,825,519
Granted	42.48		476,939
Vested	44.98		(515,975)
Forfeited	38.87		(168,539)
Non-vested, September 30, 2020	$	39.06	1,617,944

At September 30, 2020, the Company had approximately $25 million of total unrecognized compensation cost related to non-vested performance-based share unit awards granted for continuing operations which is expected to be recognized over a weighted-average period of 1.8 years.