Table of Contents
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-278323
PROSPECTUS SUPPLEMENT
(To Prospectus dated March 28, 2024)
$400,000,000
Allegion US Holding Company Inc.
5.600% Senior Notes due 2034
Allegion USHolding Company Inc. (the "issuer") is offering $400,000,000
aggregate principal amount of its 5.600% Senior Notes due 2034 (the "notes").
The issuer will pay interest on the notes semi-annually in arrears on May 29
and November 29 of each year, beginning onNovember 29, 2024. The notes will
mature on May 29, 2034. The notes will be issued only in denominations of
$1,000 and integral multiples of $1,000 in excess thereof.
The issuer may redeem the notes in whole or in part at any time or from time
to time at the applicable redemption prices described under theheading
"Description of the Notes--Optional Redemption."
The notes are a new issue of securities with no established tradingmarket. We
will use our reasonable best efforts to list the notes on the New York Stock
Exchange (the "NYSE"). If the application is approved, we expect trading in
the notes on the NYSE to begin within 30 days after the original issue dateof
the notes.
The notes will be unsecured and will rank equally with all of the issuer's
existing and future unsecured andunsubordinated indebtedness. The notes will
be fully and unconditionally guaranteed on a senior unsecured basis by
Allegion plc (the "guarantor"), the parent company of the issuer.
Investing in the notes involves substantial risks. Please read "
Risk Factors
" beginning on page
S-5
of this prospectus supplement and page 4 of the accompanying prospectus and
the risk factors included in our periodic reports that we file with the
Securities and Exchange Commission (the "SEC") beforeyou invest in the notes.
Per Note(1) Total
Public offering price(1) 99.667 % $ 398,668,000
Underwriting discount 0.650 % $ 2,600,000
Proceeds, before expenses, to the issuer(1) 99.017 % $ 396,068,000
(1) Plus accrued interest, if any, from May 29, 2024.
Delivery of the notes, in book-entry form, will be made against payment
therefor on or about May 29, 2024, through The Depository TrustCompany ("DTC").
Neither the SEC nor any other regulatory body has approved or disapproved of
the notes or relatedguarantees or determined if this prospectus supplement or
the accompanying prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
Joint Book-Running Managers
BofA Securities Citigroup Wells Fargo Securities
Goldman Sachs & Co. LLC J.P. Morgan PNC Capital Markets LLC
Co-Managers
BNP PARIBAS Huntington Capital Markets TD Securities US Bancorp
May 21, 2024
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TABLE OF CONTENTS
Prospectus Supplement
Page
ABOUT THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYINGPROSPECTUS S-ii
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS S-iii
WHERE YOU CAN FIND MORE INFORMATION S-v
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE S-vi
SUMMARY S-1
RISK FACTORS S-5
USE OF PROCEEDS S-14
CAPITALIZATION S-15
DESCRIPTION OF THE NOTES S-16
BOOK-ENTRY; DELIVERY AND FORM S-31
CERTAIN U.S. FEDERAL INCOME TAX AND IRELAND TAXCONSIDERATIONS S-34
CERTAIN ERISA CONSIDERATIONS S-41
UNDERWRITING S-43
LEGAL MATTERS S-50
EXPERTS S-50
SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES S-51
Prospectus
Page
ABOUT THIS PROSPECTUS 1
WHERE YOU CAN FIND MORE INFORMATION 1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 1
PROSPECTUS SUMMARY 3
RISK FACTORS 4
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 4
USE OF PROCEEDS 5
DESCRIPTION OF THE DEBT SECURITIES 6
DESCRIPTION OF WARRANTS 21
DESCRIPTION OF ALLEGION PLC SHARE CAPITAL 22
DESCRIPTION OF DEPOSITARY SHARES 37
DESCRIPTION OF SHARE PURCHASE CONTRACTS AND SHARE PURCHASEUNITS 40
MATERIAL TAX CONSIDERATIONS 41
PLAN OF DISTRIBUTION 59
LEGAL MATTERS 60
EXPERTS 60
SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES 60
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ABOUT THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYINGPROSPECTUS
This document consists of two parts. The first part is this prospectus
supplement, which contains the specific terms ofthis offering of notes. The
second part is the accompanying prospectus dated March 28, 2024, which
provides more general information about securities we may offer from time to
time, some of which may not apply to this offering. This prospectussupplement
and the information incorporated by reference in this prospectus supplement
also adds to, updates and, where applicable, modifies and supersedes
information contained or incorporated by reference in the accompanying
prospectus. Ifinformation in this prospectus supplement or the information
incorporated by reference in this prospectus supplement is inconsistent with
the accompanying prospectus or the information incorporated by reference
therein, then this prospectussupplement or the information incorporated by
reference in this prospectus supplement will apply and will, to the extent
inconsistent therewith, supersede the information in the accompanying
prospectus.
We and the underwriters have not authorized any person to provide you with
information other than that contained or incorporated by referencein this
prospectus supplement, the accompanying prospectus and any related free
writing prospectus. We and the underwriters take no responsibility for, and
can provide no assurance as to the reliability of, any information that others
may give you.We are not, and the underwriters are not, making an offer to sell
the notes in any jurisdiction where the offer or sale is not permitted. You
should assume that the information appearing in this prospectus supplement,
the accompanying prospectus,the documents incorporated by reference and any
related free writing prospectus is accurate only as of the respective dates of
such information. Our business, results of operations, financial condition and
prospects may have changed since thosedates.
As used in this prospectus supplement, unless otherwise specified or the
context otherwise requires:
. "Allegion," "we," "our" and "us" mean Allegion plc, an Irish publiclimited company, together with its consolidated subsidiaries;
. the "issuer" refers to Allegion US Holding Company Inc. and not to any of its subsidiaries oraffiliates; and
. the "guarantor" refers to Allegion plc and not to any of its subsidiaries or affiliates.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in or incorporated by reference in this prospectus
supplement and the accompanying prospectus, other than purelyhistorical
information, are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933, as amended (the "Securities Act") andSection 21E of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These
forward-looking statements generally are identified by the words "believe,"
"project," "expect,""anticipate," "estimate," "forecast," "outlook," "intend,"
"strategy," "plan," "may," "should," "will," "would," "will be,""will
continue," "will likely result," or the negative thereof or variations thereon
or similar expressions generally intended to identify forward-looking
statements.
Forward-looking statements may relate to such matters as projections of
revenue, margins, expenses, tax provisions, earnings, cash flows,benefit
obligations, dividends, share purchases or other financial items; any
statements of the plans, strategies and objectives of management for future
operations, including those relating to any statements concerning expected
development,performance or market share relating to our products and services;
any statements regarding future economic conditions or our performance; any
statements regarding pending investigations, claims or disputes; any
statements of expectation or belief;and any statements of assumptions
underlying any of the foregoing. These statements are based on currently
available information and our current assumptions, expectations and
projections about future events. While we believe that our assumptions,expectati
ons and projections are reasonable in view of the currently available
information, you are cautioned not to place undue reliance on our
forward-looking statements. You are advised to review any further disclosures
we make on relatedsubjects in materials we file with or furnish to the SEC.
Forward-looking statements speak only as of the date they are made and are not
guarantees of future performance. They are subject to future events, risks and
uncertainties--many of whichare beyond our control--as well as potentially
inaccurate assumptions that could cause actual results to differ materially
from our expectations and projections. We do not undertake to update any
forward-looking statements.
Factors that might affect our forward-looking statements include, among other
things:
. ongoing macroeconomic challenges and continued economic instability;
. increased prices and inflation;
. volatility and uncertainty in the political, economic and regulatory environments in which we operate,
includingchanges to trade agreements, sanctions, import and export regulations, custom duties
and applicable tax regulations and interpretations, social and political unrest, instability,
national and international conflict, terrorist acts and othergeographical disputes and uncertainties;
. the strength and stability of the institutional, commercial and residential construction and remodeling markets;
. fluctuations in currency exchange rates;
. potential impairment of our goodwill, indefinite-lived intangible assets and/or our long-lived assets;
. instability in the U.S. and global capital and credit markets;
. our ability to make scheduled debt payments or to refinance our debt obligations;
. increased competition, including from technological developments;
. the development, commercialization and acceptance of new products and services;
. changes in customer and consumer preferences and our ability to maintain beneficial relationships with largecustomers;
. our products or solutions failing to meet certification and specification requirements, being defective,
causingproperty damage, bodily harm or injury, or otherwise falling short of customers' needs and expectations;
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. our ability to identify and successfully complete and integrate acquisitions,
including achieving theiranticipated strategic and financial benefits;
. business opportunities that diverge from our core business;
. our ability to achieve the expected improvements or financial returns we expect from our strategic initiatives;
. our ability to effectively manage and implement restructuring initiatives or other organizational changes;
. global climate change or other unexpected events, including global health crises, such as
COVID-19;
. the proper functioning of our information technology and operational technology systems,
including disruption orbreaches of our information systems, such as cybersecurity attacks;
. the failure of our third-party vendors to provide effective support for many of the
critical elements of ourglobal information and operational technology infrastructure;
. our ability to recruit and retain a highly qualified and diverse workforce;
. disruptions in our global supply chain, including product manufacturing
and logistical services provided by oursupplier partners;
. our ability to effectively manage real or perceived issues related to product
quality, safety, corporate socialresponsibility and other reputational matters;
. our ability to protect our brand reputation and trademarks;
. legal judgments, fines, penalties or settlements imposed against us
or our assets as a result of legalproceedings, claims and disputes;
. claims of infringement of intellectual property rights by third parties;
. improper conduct by any of our employees, agents or business partners;
. changes to, or changes in interpretations of, current laws and regulations;
. uncertainty and inherent subjectivity related to transfer pricing regulations in the countries in which weoperate;
. changes in tax rates, the adoption of new tax legislation or exposure to additional tax liabilities; and
. risks related to our incorporation in Ireland, including the possible effects on us of future
legislation oradverse determinations by taxing authorities that could increase our tax burden.
Some of the significant risks anduncertainties that could cause actual results
to differ materially from our expectations and projections are described more
fully in Part I, Item 1A of our most recent Annual Report on Form
10-K,
the sectionentitled "Risk Factors" in our Quarterly Reports on Form
10-Q
and as may be included from time to time in our reports filed with the SEC.
There may also be other factors that have not beenanticipated or that are not
described in our periodic filings with the SEC, generally because we did not
believe them to be significant at the time, which could cause results to
differ materially from our expectations. We caution you that theimportant
factors referenced above may not contain all of the factors that are important
to you.
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WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form
S-3
with the SEC. This prospectus supplement is part ofthe registration statement
and does not contain all the information in the registration statement on Form
S-3.
You will find additional information about us in the registration statement.
Any statement made inthis prospectus supplement concerning a contract or other
document of ours is not necessarily complete, and you should read the
documents that are filed as exhibits to the registration statement or
otherwise filed with the SEC for a more completeunderstanding of the document
or matter. Each such statement is qualified in all respects by reference to
the document to which it refers.
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. Our SEC filings are available to thepublic over the
Internet at the SEC's website at
http://www.sec.gov
and on our corporate website at
http://www.allegion.com
as soon as reasonably practicable after we electronically file such material
with, or furnish itto, the SEC. Information on our website does not constitute
part of this prospectus supplement, and any references to this website or any
other website are inactive textual references only.
Our ordinary shares are listed on the NYSE under the trading symbol "ALLE."
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC permits us to "incorporate by reference" the information contained in
documents we file with the SEC, which means that wecan disclose important
information to you by referring you to those documents rather than by
including them in this prospectus supplement and the accompanying prospectus.
Information that is incorporated by reference is considered to be part of
thisprospectus supplement and the accompanying prospectus and you should read
the information with the same care that you read this prospectus supplement
and the accompanying prospectus. Later information that we file with the SEC
will automaticallyupdate and supersede the information that is either
contained, or incorporated by reference, in this prospectus supplement and the
accompanying prospectus and will be considered to be a part of this prospectus
supplement and the accompanyingprospectus from the date those documents are
filed. We have filed with the SEC, and incorporate by reference in this
prospectus supplement and the accompanying prospectus, the following documents
(File
No. 001-35971):
. Annual Report on Form
10-K
for the fiscal year ended December 31, 2023, filed with the SEC on February 20, 2024;
. Quarterly Report on Form
10-Q
for the fiscal quarter ended March 31, 2024, filed with the SEC on April 25, 2024;
. Current Report on
Form 8-K
, filed with the SEC on May 20, 2024 (but not portions of such report which were furnished); and
. Definitive Proxy Statement
on Schedule 14A
, filed with the SEC on April 19, 2024 (excluding any portions that were
not incorporated by reference into Part III of our Annual Report on Form
10-K
for the fiscalyear ended
December 31, 2023).
The preceding list supersedes and replaces the documents listed in the
accompanyingprospectus under the heading "Incorporation of Certain Documents
by Reference." All future filings that we make under Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act until all the securities offered by this
prospectussupplement and the accompanying prospectus have been issued as
described in this prospectus supplement and the accompanying prospectus, are
deemed incorporated into and part of this prospectus supplement and the
accompanying prospectus once filed.We are not, however, incorporating, in each
case, any documents (or portions thereof) or information that we are deemed to
furnish and not file in accordance with SEC rules, unless expressly stated
otherwise therein. Any statement in this prospectussupplement, the
accompanying prospectus or in any free writing prospectus or in any document
incorporated by reference that is different from any statement contained in
any later-filed document should be regarded as changed by that later
statement.Once so changed, the earlier statement is no longer considered part
of this prospectus supplement, the accompanying prospectus or any free writing
prospectus.
You may request by phone or in writing a copy of any of the materials
incorporated (other than exhibits, unless the exhibits are themselvesspecificall
y incorporated) into this prospectus supplement or the accompanying
prospectus, and we will provide to you these materials free of charge. Please
make your request to Jeffrey N. Braun, Senior Vice President and General
Counsel, c/oSchlage Lock Company LLC, 11819 North Pennsylvania Street, Carmel,
Indiana 46032, telephone, (317)
810-3700.
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SUMMARY
This summary highlights selected information included elsewhere or
incorporated by reference in this prospectus supplement and theaccompanying
prospectus. This summary does not contain all of the information that you
should consider before investing in our securities. You should read this
entire prospectus supplement and the accompanying prospectus, including the
informationincorporated by reference, before making an investment decision.
See "Where You Can Find More Information" in this prospectus supplement and
the accompanying prospectus. Some of the statements in this prospectus
supplement areforward-looking statements. See "Cautionary Statement Regarding
Forward-Looking Statements."
Allegion
Allegion is a leading global provider of security products and solutions that
keep people and assets safe and secure in the places they live,learn, work and
connect. We create peace of mind by pioneering safety and security with a
vision of enabling seamless access and a safer world. Seamless access allows
authorized, automated and safe passage and movement through spaces and places
inthe most efficient and frictionless manner possible. Central to our vision
is partnering and developing ecosystems to create a flawless experience and
enable an uninterrupted and secure flow of people and assets. We offer an
extensive and versatileportfolio of security and access control products and
solutions across a range of market-leading brands. Our experts across the
globe deliver high-quality security hardware, software, services and systems,
and we use our deep expertise to serve astrusted partners to
end-users
who seek customized solutions to their security needs.
OtherInformation
Allegion plc is a public limited company incorporated under the laws of
Ireland on May 9, 2013. Allegion plc'sprincipal executive office is located at
Block D, Iveagh Court, Harcourt Road, Dublin 2, D02 VH94, Ireland, telephone
(317)
810-3700.
Allegion US Holding Company Inc. is a corporation incorporated under the laws
of the State of Delaware on August 5, 2013, and is a whollyowned subsidiary of
Allegion plc. The principal executive office of Allegion US Holding Company
Inc. is located at 11819 North Pennsylvania Street, Carmel, Indiana 46032,
telephone (317)
810-3700.
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The Offering
The summary below describes the principal terms of the notes. Certain of the
terms and conditions described below are subject to importantlimitations and
exceptions. The following summary is not intended to be complete. You should
carefully review "Description of the Notes" in this prospectus supplement and
"Description of the Debt Securities" in the accompanyingprospectus, which
contain a more detailed description of the terms and conditions of the notes,
including definitions of the capitalized terms used in this summary.
Issuer Allegion US Holding Company Inc.
Securities Offered $400 million aggregate principal amount of 5.600% Senior Notes due 2034.
Guarantee The notes will be fully and unconditionally guaranteed on a senior unsecured basis by Allegion plc.
Maturity The notes will mature on May 29, 2034.
Interest Interest on the notes will accrue at a rate of 5.600% per annum, payable semi-annually in
cash in arrears on May 29 and November 29 of each year, beginning on November 29, 2024.
Additional Amounts All payments made by the guarantor under or with respect to
the guarantee of the notes will be made without withholding
or deduction for or on account of any present or future
taxes or other governmental charges imposed by Ireland or
otherRelevant Taxing Jurisdictions (as defined in "Description
of the Notes--Additional Amounts"), unless such withholding
or deduction is required by law or by the interpretation or
administration thereof. In the event that any suchwithholding
or deduction is so required, the guarantor will pay to
each holder such additional amounts as may be necessary to
ensure that the net amount received by the holder after such
withholding or deduction (and after deducting any taxes on
theadditional amounts) will equal the amounts which would
have been received by the holder had no such withholding or
deduction been required, subject to certain exceptions set
forth under "Description of the Notes--Additional Amounts."
Optional Redemption The notes may be redeemed, at the issuer's option, in whole
or in part at any time at the applicable redemption prices
described under "Description of the Notes--Optional Redemption."
The notes will not have the benefit of asinking fund.
Tax Redemption If, as a result of certain tax law changes, the guarantor
would be obligated to pay additional amounts in respect of
withholding taxes or other chargesas described above under
"--Additional Amounts" with respect to the notes, and such
obligation cannot be avoided by taking reasonable measures
available to the guarantor and certain other conditions are
satisfied, the issuer may redeemthe notes in whole, but not in
part, at a price equal to 100% of the principal amount thereof
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plus accrued and unpaid interest, if any, and additional amounts, if any, to the date
of the redemption. See "Description of the Notes--Redemption for Taxation Reasons."
Change of Control Repurchase Event If a Change of Control Repurchase Event (as defined
herein) occurs, except to the extent the issuer has
exercised its right to redeem the notes, the issuer
will be required to offer to repurchase the notes
at a repurchase price equal to 101% ofthe principal
amount of the notes plus accrued interest to, but
not including, the repurchase date. See "Description
of the Notes--Change of Control Repurchase Event."
Covenants The indenture that will govern the notes offered hereby (as amended, supplemented or otherwise
modified from time to time, the "Indenture") will contain certain covenants that, among
other things, limit the ability of us or oursubsidiaries to (i) create or incur certain liens,
(ii) enter into certain sale-leaseback transactions, and (iii) enter into certain mergers,
consolidations and transfers of substantially all of our assets. These covenants are subjectto
important qualifications and exceptions. See "Description of the Notes--Limitation on
Liens", "Description of the Notes--Limitation on Sale-Leaseback Transactions" and "Description
of the Notes--Consolidation,Merger and Sale of Assets" in this prospectus supplement.
Ranking The notes will be unsecured and will rank equally with all of the issuer's
existing and future unsecured and unsubordinated indebtedness. The
guarantee will be unsecured and will rank equally with all of the
guarantor's existing andfuture unsecured and unsubordinated indebtedness.
As of March 31, 2024, on an as adjusted basis to give effect to this
offering and the use of proceeds therefrom, the issuer and the guarantor
would have had approximately $2,022.8 million of consolidatedsenior
indebtedness outstanding, none of which would have been secured.
Use of Proceeds The issuer intends to use the net proceeds of this offering to repay, at maturity, all $400.0 million
outstanding aggregate principal amount of its 3.200% Senior Notes due October 1, 2024. See "Use of Proceeds."
Risk Factors Investing in the notes involves risks and uncertainties. See "Risk
Factors" and other information included or incorporated by reference
in this prospectus supplement for a discussion of factors you
should consider carefully beforedeciding to purchase any notes.
Denomination, Form and Registration of Notes The notes will be issued in fully registered form and only in denominations
of $1,000 and integral multiples of $1,000 in excess thereof.
The notes willbe issued initially as Global Notes (as defined in
"Book-Entry; Delivery and Form"). DTC will act as depositary for
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the notes. Except in limited circumstances, Global Notes will not be exchangeable for Certificated Notes (as defined in
"Book-Entry; Delivery
andForm").
Listing We intend to apply to list the notes on the NYSE. If the application is approved, we expect trading in the notes on the NYSE
to begin within 30 days after the original issue date of the notes. Currently, there is no public market for the notes.
Trustee and Paying Agent U.S. Bank Trust Company, National Association, as trustee.
Governing Law The Indenture, the notes and the guarantee thereof will be governed by the laws of the State of New York.
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RISK FACTORS
You should carefully consider the risks described below, together with all the
other information included or incorporated by reference inthis prospectus
supplement, the accompanying prospectus and any free writing prospectus
prepared by us or on our behalf we may provide to you in connection with this
offering, in evaluating us and the notes and related guarantee offered hereby.
Therisks associated with our business can be found in our Annual Report on Form
10-K
for the year ended December 31, 2023, which is incorporated by reference
herein. If any of the risks described belowactually occurs, our business,
financial condition, results of operations and cash flows could be materially
and adversely affected. Any such adverse effect may adversely affect our
ability to repay the notes and as a result you could lose all orpart of your
investment in the notes. Our business may also be adversely affected by risks
and uncertainties not known to us or risks that we currently believe to be
immaterial.
Our leverage could harm our business by limiting our available cash and our
access to additional capital and, to the extent of our variable rateindebtedness
, exposing us to interest rate risk.
Following this offering and the use of proceeds therefrom, we will have
approximately$2,022.8 million of indebtedness, including borrowings under our
$250.0 million term loan facility (the "2021 Term Facility"), and we would
have approximately $481.7 million of additional borrowings available under
our$500.0 million revolving credit facility (the "Revolving Credit Facility"
and, together with the 2021 Term Facility, the "Credit Facilities") after
taking into account approximately $18.3 million of letters of creditoutstanding,
as of March 31, 2024. In addition, on May 20, 2024, we amended the credit
agreement governing our Revolving Credit Facility to increase the borrowings
available under the Revolving Credit Facility to $750.0 million. Ourindebtedness
will result in interest expense and may limit our ability to obtain
additional financing for working capital, capital expenditures, product
development, debt service requirements, acquisitions, restructuring and
general corporate orother purposes, limit our ability to adjust to changing
market conditions and place us at a competitive disadvantage compared to our
less leveraged competitors. Further volatility in the credit markets would
adversely impact our ability to obtainfavorable terms on financing in the
future. In addition, a portion of our cash flows from operations will be
dedicated to the payment of principal and interest on our indebtedness and
will not be available for other purposes, including ouroperations, capital
expenditures, payment of dividends, share repurchase programs and future
business opportunities. We may be more vulnerable than a less leveraged
company to a downturn in the general economic conditions or in our business,
or wemay be unable to carry out capital spending that is important to our
growth. We may be vulnerable to interest rate increases, as certain of our
borrowings, including those under our Credit Facilities, will be at variable
rates. We can give noassurance that our business will generate sufficient cash
flow from operations, that revenue growth or operating improvements will be
realized, or that future borrowings will be available under our Credit
Facilities in an amount sufficient to enableus to service our indebtedness or
to fund other liquidity needs.
The notes are subject to prior claims of any secured creditors, and if a
defaultoccurs, we may not have sufficient funds to fulfill our obligations
under the notes.
The notes and the guarantee are our seniorunsecured general obligations,
ranking equally with other senior unsecured indebtedness. As of March 31,
2024, on an
as-adjusted
basis to give effect to this offering and the use of proceeds therefrom, wehad
no secured debt outstanding. As of March 31, 2024, the issuer had $400.0
million outstanding of its 3.200% Senior Notes due 2024 (the "3.200% Senior
Notes") (which we intend to repay at maturity with the proceeds of
thisoffering), $400.0 million outstanding of its 3.550% Senior Notes due 2027
(the "3.550% Senior Notes") and $600.0 million outstanding of its 5.411%
Senior Notes due 2032 (the "5.411% Senior Notes"), while the guarantorhad
$400.0 million outstanding of its 3.500% Senior Notes due 2029 (together with
the 3.200% Senior Notes, the 3.550% Senior Notes and the 5.411% Senior Notes,
the "Existing Notes"). The Indenture that will govern the notes permits usto
incur additional debt, and the credit agreements that govern our Credit
Facilities permit us to incur certain additional debt, in each case including
certain secured debt, from time to time. If we incur any secured debt, our
assets will besubject to prior claims by our secured
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creditors. In the event of our bankruptcy, liquidation, reorganization or
other winding up, assets that secure debt will be available to pay obligations
on the notes only after all debt securedby those assets has been repaid in
full. Holders of the notes will participate in our remaining assets ratably
with all of our unsecured and unsubordinated creditors, including our trade
creditors, the holders of the Existing Notes and lenders underour Credit
Facilities. If we incur any additional obligations that rank equally with the
notes, including trade payables, the holders of those obligations will be
entitled to share ratably with the holders of the notes in any proceeds
distributedupon our insolvency, liquidation, reorganization, dissolution or
other winding up. This may have the effect of reducing the amount of proceeds
paid to you. If there are not sufficient assets remaining to pay all these
creditors, all or a portion ofthe notes then outstanding would remain unpaid.
We may not be able to generate sufficient cash to service all of our
indebtedness and may be forced totake other actions to satisfy our obligations
under our indebtedness, which actions may not be successful.
Our ability to makescheduled payments or to refinance our debt obligations
depends on our financial and operating performance, which is subject to
prevailing economic and competitive conditions and to certain financial,
business and other factors beyond our control.Our cash interest payments for
2023 were approximately $92.0 million, and we expect no material impact to
that amount based on the debt anticipated to be incurred as part of this
offering and the use of proceeds therefrom. We may not be able tomaintain a
level of cash flow from operating activities sufficient to permit us to pay
the principal, premium, if any, and interest on our indebtedness.
If our cash flows and capital resources are insufficient to fund our debt
service obligations, we may be forced to reduce or delay capitalexpenditures,
reduce or eliminate the payment of dividends, sell assets, seek additional
capital or seek to restructure or refinance our indebtedness. These
alternative measures may not be successful and may not permit us to meet our
scheduled debtservice obligations. In the absence of such operating results
and resources, we could face substantial liquidity problems and might be
required to sell material assets or operations to attempt to meet our debt
service and other obligations. Thecredit agreements that govern our Credit
Facilities contain customary financial covenants that may restrict our ability
to use the proceeds from asset sales. We may not be able to consummate those
asset sales to raise capital or sell assets atprices that we believe are fair
and proceeds that we do receive may not be adequate to meet any debt service
obligations then due.
Despite ourexpected levels of indebtedness, we may still be able to incur
substantially more debt, which could further exacerbate the risks associated
with our leverage.
We may be able to incur substantial additional indebtedness in the future.
Although the terms of the credit agreements that govern our CreditFacilities
contain customary restrictions on the incurrence of additional indebtedness at
certain of our subsidiaries, these restrictions will be subject to a number of
qualifications and exceptions, and the indebtedness incurred in compliance
withthese restrictions could be substantial. Moreover, neither the terms of
these credit agreements nor the terms of the indenture governing the Existing
Notes restrict the ability of Allegion plc or the issuer's ability to incur
certain unsecuredindebtedness, and the terms of the Indenture governing the
notes will not restrict the ability of Allegion plc, or any of its
subsidiaries' ability, to incur unsecured indebtedness. In addition, following
our amendment of the credit agreementgoverning our Revolving Credit Facility
on May 20, 2024, our Revolving Credit Facility permits borrowings of up to
$750.0 million. If we incur additional debt above the levels we expect after
giving effect to this offering and the use ofproceeds therefrom, the risks
associated with our leverage, including those described above, would increase.
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The Indenture that will govern the notes contains limited protective covenants
and may not be sufficientto protect your investment in the notes.
The Indenture for the notes does not:
. require us to maintain any financial ratios or specific levels of net worth,
revenues, income, cash flow orliquidity and, accordingly, does not protect
holders of the notes in the event that we experience significant adverse
changes in our financial condition, results of operations or cash flows;
. limit our ability to incur indebtedness;
. restrict our subsidiaries' ability to issue securities or otherwise incur indebtedness that would be
seniorto our equity interests in our subsidiaries and therefore rank effectively senior to the notes;
. restrict our ability to repurchase or prepay any other of our securities or other indebtedness;
. restrict our ability to make investments or to repurchase or pay dividends or make other
payments in respect ofour common stock or other securities ranking junior to the notes;
. restrict our ability to enter into highly leveraged transactions; or
. require us to repurchase the notes in the event of a change in control unless a Below Investment
Grade RatingsEvent (as defined in the Indenture) occurs with respect to such change in control.
Additionally, the covenantscontained in the Indenture that limit the ability
of us or our subsidiaries to (i) create or incur certain liens, (ii) enter
into certain sale-leaseback transactions and (iii) enter into certain mergers,
consolidations and transfersof substantially all of our assets are subject to
important qualifications and exceptions. See "Description of the Notes" in
this prospectus supplement and "Description of the Debt Securities" in the
accompanying prospectus.
As a result of the foregoing, when evaluating the terms of the notes, you
should be aware that the terms of the Indenture and the notes do notrestrict
our ability to engage in, or to otherwise be a party to, a variety of
corporate transactions, circumstances and events that could have an adverse
impact on your investment in the notes.
The terms of our debt covenants could limit how we conduct our business and
our ability to raise additional funds.
The terms of the credit agreements that govern our Credit Facilities, the
indenture that governs our Existing Notes and the Indenture that willgovern
the notes restrict us from taking certain actions that we may think are in the
best interests of our shareholders. A breach of the covenants or restrictions
could result in a default under the applicable indebtedness. As a result of
theserestrictions, we may be:
. limited in how we conduct our business;
. unable to raise additional debt or equity financing to operate during general economic or business downturns; or
. unable to compete effectively or to take advantage of new business opportunities.
These restrictions may affect our ability to grow in accordance with our plans.
These covenants and restrictions could affect our ability to operate our
business, and may limit our ability to react to market conditions ortake
advantage of potential business opportunities as they arise. Additionally, our
ability to comply with these covenants may be affected by events beyond our
control, including general economic and credit conditions and industry
downturns, and theother factors described in Part I, Item 1A, captioned "Risk
Factors," of our Annual Report on Form
10-K
for the year ended December 31, 2023, incorporated by reference into this
prospectussupplement.
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If we fail to comply with the covenants in our Credit Facilities and are
unable to obtain awaiver or amendment, an event of default would result, and
the lenders could, among other things, declare outstanding amounts due and
payable, refuse to lend additional amounts to us, and require deposit of cash
collateral in respect of outstandingletters of credit, which may trigger a
cross-default on the notes and the Existing Notes.
The notes and the related guarantee will not be secured byany of our assets or
the assets of the guarantor and therefore will be effectively subordinated to
our and its existing and future secured indebtedness.
The notes and the related guarantee will be general unsecured obligations
ranking effectively junior in right of payment to any secured debt.In
addition, the Indenture that will govern the notes permits us to incur
additional debt, and the credit agreements that govern our Credit Facilities
and the indenture that governs our Existing Notes permit us to incur certain
additional debt, ineach case including certain secured debt. In the event that
we are declared bankrupt, become insolvent or are liquidated or reorganized,
creditors whose debt is secured by our and the guarantor's assets will be
entitled to the remediesavailable to secured creditors under applicable laws,
including the foreclosure of the collateral securing such debt, before any
payment may be made with respect to the notes or the guarantees. As a result,
there may be insufficient assets to payamounts due on the notes, and holders
of the notes may receive less, ratably, than holders of secured indebtedness.
As of March 31, 2024, on an
as-adjusted
basis to give effect to this offering and theuse of proceeds therefrom, we had
no secured debt outstanding.
Repayment of the issuer's indebtedness, including the notes, is dependent on
cashflow generated by its and the guarantor's subsidiaries.
The issuer and the guarantor are holding companies that conduct theirrespective
operations through operating subsidiaries. The issuer's and the guarantor's
only significant assets are the capital stock of their respective
subsidiaries. As a result, the issuer's ability to make payments on the notes
isdependent upon payments it receives from the guarantor or on the generation
of cash flows by its operating subsidiaries and their ability to make such
cash available to the issuer, by dividend or otherwise. In turn, the
guarantor's ability tomake cash available to the issuer for payment on the
notes is dependent on the generation of cash flow by its operating
subsidiaries and their ability to make such cash available to the guarantor,
by dividend or otherwise. Accordingly, if the issuershould at any time be
unable to pay interest on or principal of the notes, it is highly unlikely
that the guarantor will be able to meet its obligation under its guarantee.
Since they are not guarantors of the notes, our subsidiaries (other than the
issuer) do not have any obligation to pay amounts due on thenotes or to make
funds available for that purpose. Certain subsidiaries may not be able to, or
may not be permitted to, make distributions to enable the issuer to make
payments in respect of its indebtedness, or to enable the guarantor to
makepayments to the issuer to make payments in respect of its indebtedness,
including the notes.
The ability of the subsidiaries to paydividends or make other distributions to
the issuer or the guarantor in the future will depend on their earnings, tax
considerations and covenants contained in any financing or other agreements,
among other things. Such payments may be limited as aresult of claims against
such subsidiaries by their creditors, including suppliers, vendors, lessors
and employees. Each subsidiary is a distinct legal entity and, under certain
circumstances, the issuer and the guarantor may be limited in theirability to
obtain cash from their respective subsidiaries. In the event that the issuer
does not receive distributions from its subsidiaries, or the guarantor does
not receive distributions from its subsidiaries that it can in turn make
available tothe issuer, the issuer may be unable to make required principal
and interest payments on its indebtedness, including the notes.
The notes will bestructurally subordinated to the existing and future
liabilities of our subsidiaries.
While the notes will be fully andunconditionally guaranteed on a senior
unsecured basis by Allegion plc, the notes offered hereby will not be
guaranteed by our current and future subsidiaries (other than that the notes
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will be direct obligations of the issuer), even those that provide guarantees
of our other indebtedness, such as indebtedness under our Credit Facilities.
As a result, the notes will bestructurally subordinated to all existing and
future liabilities of such
non-guarantor
subsidiaries, including guarantees they provide under our Credit Facilities.
Our rights and the rights of our creditors toparticipate in the assets of any
such
non-guarantor
subsidiary in the event that such a subsidiary is liquidated or reorganized
will be subject to the prior claims of such subsidiary's creditors. As
aresult, all indebtedness and other liabilities, including trade payables, of
such
non-guarantor
subsidiaries, whether secured or unsecured, must be satisfied before any of
the assets of such subsidiaries wouldbe available for distribution, upon a
liquidation or otherwise, to us in order for us to meet our obligations with
respect to the notes. To the extent that we may be a creditor with recognized
claims against any such
non-guarantor
subsidiary, our claims would still be subject to the prior claims of such
subsidiary's creditors to the extent that they are secured or senior to those
held by us. Subject to restrictionscontained in financing arrangements, such
non-guarantor
subsidiaries may incur additional indebtedness and other liabilities, all of
which would rank structurally senior to the notes. Such
non-guarantor
subsidiaries generate substantially all of our consolidated net revenue and
operating income, hold substantially all of our consolidated assets (other
than assets represented by Allegion's and theissuer's investments in such
subsidiaries) and are responsible for substantially all of our consolidated
liabilities, excluding intercompany liabilities (other than long-term
indebtedness).
A Change of Control Repurchase Event that would require us to repurchase the
notes is subject to a number of significant limitations, and certain change
ofcontrol events that affect the market price of the notes may not give rise
to any obligation to repurchase the notes.
Although theissuer will be required under the Indenture to make an offer to
repurchase the notes upon the occurrence of a Change of Control Repurchase
Event, the circumstances that could constitute a Change of Control Repurchase
Event are limited in scope anddo not include all change of control events that
might affect the market value of the notes. In particular, the issuer is
required to repurchase the notes as a result of a change of control only if
the notes are rated below investment grade by atleast two ratings agencies
during a specified period following such change in control or the announcement
thereof, and such ratings agencies confirm that such downgrade was the result,
in whole or in part, of the change of control. We could, in thefuture, enter
into certain transactions, including acquisitions, refinancings or other
recapitalizations that would not constitute a change of control under the
notes but that could increase the amount of indebtedness outstanding at such
time orotherwise affect our capital structure or the credit ratings of the
notes. As a result, the issuer's obligation to repurchase the notes upon the
occurrence of a Change of Control Repurchase Event is limited and may not
preserve the value of thenotes in the event of a highly leveraged transaction,
reorganization, merger or similar transaction. See "Description of the
Notes--Change of Control Repurchase Event."
Our ability to repurchase the notes upon a Change of Control Repurchase Event
may be limited.
We will be required under the Indenture to make an offer to repurchase the
notes upon a Change of Control Repurchase Event. A change of controlunder the
credit agreements that govern our Credit Facilities and the indenture
governing the Existing Notes also would constitute a default under our Credit
Facilities and could trigger a Change of Control Repurchase Event under that
indenture,respectively. Therefore, upon the occurrence of a change of control,
the lenders under our Credit Facilities would have the right to accelerate
their loans, and if so accelerated, we would be required to pay all of our
outstanding obligations undersuch facilities and we may be required to offer
to repurchase the Existing Notes. We may not be able to pay you the required
price for your notes at that time because we may not have available funds to
pay the repurchase price. In addition, theterms of other existing or future
debt may prevent us from paying you. There can be no assurance that we would
be able to repay such other debt or obtain consents from the holders of such
other debt to repurchase these notes. Any requirement tooffer to purchase any
outstanding notes may result in us having to refinance our outstanding
indebtedness, which we may not be able to do. In addition, even if we were
able to refinance our outstanding indebtedness, such financing may be on
termsunfavorable to us.
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Our variable rate indebtedness may expose us to interest rate risk, which
could cause our debt costs toincrease significantly.
A portion of our borrowings are in the form of term loans or revolving credit
facility borrowings withvariable rates of interest which expose us to interest
rate risks. We will be exposed to the risk of rising interest rates to the
extent that we fund our operations with short-term or variable-rate
borrowings. Following this offering and the use ofproceeds therefrom, we will
have approximately $2,022.8 million of aggregate debt outstanding, including
approximately $221.9 million of floating-rate term loans, $1,400.0 million of
our Existing Notes and $400 million of thefixed-rate senior notes offered
hereby, and we would have had approximately $481.7 million of additional
borrowings available under our Revolving Credit Facility after taking into
account approximately $18.3 million of letters of creditoutstanding, as of
March 31, 2024. Based on the amount of floating-rate debt outstanding as of
March 31, 2024, after giving effect to this offering and the use of proceeds
therefrom, a 100 basis point increase in the Bloomberg Short-TermBank Yield
Index rate ("BSBY") would result in an incremental annual interest expense of
approximately $2.2 million. On May 20, 2024, we amended the credit agreements
governing our Credit Facilities to, among other things, changethe interest
rate benchmark for the 2021 Term Loan Facility from the Bloomberg Short-Term
Bank Yield Index rate to a Term Secured Overnight Financing Rate ("SOFR"). We
do not expect this change to have a material impact on our sensitivityto
interest rate fluctuations. However, if BSBY, SOFR or any other potential
replacement increases in the future then the floating-rate debt could have a
material effect on our interest expense.
Our being subject to certain fraudulent transfer and conveyance statutes may
have adverse implications for the holders of the notes.
If, under relevant federal, state and foreign fraudulent transfer and
conveyance statutes, in a bankruptcy or reorganization case or a lawsuitby or
on behalf of the unpaid creditors of the issuer or the guarantor, a court were
to find that, at the time the notes were issued by the issuer or guaranteed by
the guarantor, the issuer issued or the guarantor guaranteed the notes with
theintent of hindering, delaying or defrauding current or future creditors,
the issuer or the guarantor received less than reasonably equivalent value or
fair consideration for issuing or guaranteeing the notes, as applicable; and
the issuer or theguarantor, as the case may be:
. was insolvent or was rendered insolvent by reason of the incurrence or
guarantee, as applicable, of theindebtedness constituting the notes,
. was engaged, or about to engage, in a business or transaction for which its assets constituted unreasonably smallcapital,
. intended to incur, or believed that it would incur, debts beyond its ability to pay as such debts matured, or
. was a defendant in an action for money damages, or had a judgment for money damages
docketed against it if, ineither case, after final judgment the judgment is unsatisfied,
such court could avoid or subordinate the notes and the relevantguarantee to
presently existing and future indebtedness of the issuer or the guarantor, as
the case may be, and take other action detrimental to the holders of the
notes, including, under certain circumstances, invalidating the notes or
theguarantee.
The measure of insolvency for purposes of the foregoing considerations will
vary depending upon the law of the jurisdictionthat is being applied in any
such proceeding. Generally, however, the issuer or the guarantor would be
considered insolvent if, at the time it incurs or guarantees, as the case may
be, the indebtedness constituting the notes, either:
. the sum of its debts, including contingent and prospective liabilities, is greater than its assets, at a fairvaluation;
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. the present fair saleable value of its assets is less than the amount required to pay the probable liability onits
total existing debts and liabilities, including contingent liabilities, as they become absolute and matured; or
. it is unable to pay its debts as they fall due.
We cannot give you any assurance as to what standards a court would use to
determine whether the issuer or the guarantor, as the case may be,were solvent
at the relevant time, or whether, whatever standard was used, the notes or
guarantee would not be avoided on another of the grounds described above.
As a public limited company incorporated in Ireland, the guarantor is subject
to Irish insolvency law under which certain categories of preferential
debtscould be paid in priority to the claims of the holders of the notes with
respect to the guarantee upon our liquidation.
Liquidation.
As a public limited company incorporated in Ireland, we may be wound up under
Irish law. Upon a liquidation of an Irishcompany, certain categories of
preferential debts and the claims of secured/preferential creditors (including
the Irish Revenue Commissioners in the case of certain unpaid taxes) would be
paid in priority to the claims of unsecured creditors. If webecome subject to
an insolvency proceeding and if we have obligations to creditors that are
treated under Irish law as creditors that are senior relative to the holders
of the notes, the holders of the notes may suffer losses as a result during
suchinsolvency proceedings.
Examinership.
Examinership is a legal mechanism in Ireland for the temporary protection and
potentialrescue or reconstruction of an ailing but potentially viable Irish
company. An Irish company, its directors, its shareholders who hold, at the
date of presentation of the relevant petition, not less than
one-tenth
of its voting share capital, or a contingent, prospective or actual creditor,
are each entitled to petition the Irish High Court for the appointment of an
examiner.
While a company is in examinership, it may not, for the duration of the
protection period, be wound up, creditors may not enforce their claimsor their
security in respect of the company or its assets, and proceedings cannot be
issued or potentially continued against it without the leave of the Irish High
Court. The protection period may be up to 100 days (and, in exceptionalcircumsta
nces, may be extended further). Further, a company in examinership cannot
discharge any liability incurred by it before the presentation to the Irish
High Court of a petition for examinership except in strictly defined
circumstances. Theexaminer, once appointed, has the power to set aside
contracts and certain arrangements entered into by the company after his
appointment and, in certain circumstances, can avoid a negative pledge given
by the company prior to his appointment.
Where possible, an examiner will formulate proposals for a compromise or
scheme of arrangement in respect of a company in examinership (the"Proposals")
which the examiner believes will ensure the survival of the company or the
whole or any part of its undertaking as a going concern. The Proposals will
detail, among other things, how each class of creditor is to be treated inthe
context of the examinership and in particular the dividend, if any, they are
to receive. A scheme of arrangement may be approved by the Irish High Court
when at least one class of creditors, whose interests would be impaired under
the Proposals,has voted in favor of the Proposals and the Irish High Court is
satisfied that such Proposals are fair and equitable in relation to any class
of members or creditors who have not accepted the Proposals and whose
interests would be impaired by theimplementation of the scheme of arrangement
and the Proposals are not unfairly prejudicial to any interested party and in
any case shall not confirm any Proposals if the sole or primary purpose of
them is the avoidance of the payment of tax due.
If, for any reason, an examiner was appointed to us while any amounts due
under the notes were unpaid, the primary risks to the holdersof the notes
would include the following:
. the trustee, on behalf of the holders of the notes, would not be able to initiate proceedings
to enforce rightsunder the notes or the guarantee against us during the period of examinership;
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. a scheme of arrangement may be approved involving the writedown of the
debt owed by us to the holders of thenotes irrespective of their views;
. an examiner may seek to set aside any negative pledge given by us prohibiting the creation of security or
theincurring of borrowings by us to enable the examiner to borrow to fund us during the protection period; and
. in the event that a scheme of arrangement is not approved and we subsequently go into liquidation,
theexaminer's remuneration and expenses and the claims of certain other creditors referred
to above (including the Irish Revenue Commissioners in the case of certain unpaid taxes) will
take priority over the amounts due by us under the guaranteeto the holders of the notes.
Applicable Irish law may allow courts, under specific circumstances, to void,
vary or subordinate theguarantee and require the holders of the notes to
return payments received from the guarantor.
The guarantor is incorporated under thelaws of Ireland. Obligations under the
guarantee may not be enforceable in all circumstances under Irish law. For
example, there is a risk that the guarantee from the guarantor may be
challenged as unenforceable on the basis that there is an absenceof corporate
benefit on the part of the guarantor or that it is not for the purpose of
carrying on the business of the guarantor. Where an Irish guarantor is a
direct or indirect holding company of the subsidiary whose debts are being
guaranteed (asis the case in respect of the guarantee of the notes), there is
less risk of an absence of a corporate benefit on the basis that the holding
company could justify the decision to give a guarantee to protect or enhance
its investment in its direct orindirect subsidiary.
In addition, pursuant to Section 604 of the Irish Companies Act 2014 (as
amended) (the "CompaniesAct"), if an Irish company goes into liquidation, any
payment or any act by it (usually an absolute transfer or a mortgage) relating
to property in favor of any creditor which was made or done at a time when
that Irish company was unable to payits debts as they fell due with a view to
preferring that creditor over its other creditors and within six months (or
two years if that creditor is a "connected person" as defined in Section
559(1) of the Companies Act) before theguarantor became the subject of
liquidation proceedings, shall be an unfair preference and invalid.
Also, in circumstances where an Irishcompany is or is likely to be unable to
pay its debts, then that company, the directors of that company, a contingent,
prospective or actual creditor of that company, or certain shareholders of
that company may be entitled to petition the court forthe appointment of an
examiner (as discussed above under the
sub-heading
"Examinership").
Irish lawdiffers from the laws in effect in the United States and may afford
less protection to the holders of the notes.
We have been advisedthat the United States currently does not have a treaty
with Ireland providing for the reciprocal recognition and enforcement of
judgments in civil and commercial matters. We have also been advised that,
provided that certain requirements aresatisfied and subject to certain
exceptions, the courts of Ireland may enforce a judgment of the courts of New
York in respect of contractual obligations. However, there is some uncertainty
as to whether the courts of Ireland would recognize orenforce judgments of
U.S. courts obtained against an Irish company or its directors or officers
based on the civil liabilities provisions of the U.S. federal or state
securities laws or hear actions against an Irish company or its directors
orofficers based solely on those laws, although such act may potentially give
rise to a cause of action under the local laws of Ireland. This process would
be subject to numerous established principles and would involve the
commencement of a new setof proceedings.
An active trading market for the notes may not develop.
The notes constitute a new issue of securities, for which there is no existing
market. While we will use our reasonable best efforts to causethe notes to be
listed on the NYSE, we cannot guarantee you that the notes will
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become or will remain listed. Even if the notes are listed, an active trading
market may not develop. We will have no obligation to maintain such listing,
and we may delist the notes at any time.In addition, the liquidity of any
trading market in the notes, and the market price quoted for the notes may be
adversely affected by the changes in the overall market for these notes,
prevailing interest rates and changes in our consolidatedfinancial condition,
results of operations or prospects. A liquid trading market in the notes may
not develop, which could decrease the amounts you would otherwise receive upon
a sale or disposition of the notes and your ability to transfer thenotes may
be limited.
If a trading market for the notes does develop, changes in our credit ratings
or the debt markets could adversely affect themarket price of the notes.
The price for the notes depends on many factors, including:
. our credit ratings;
. prevailing interest rates being paid by, or the market prices for debt securities issued by, other companiessimilar to us;
. our financial condition, financial performance and prospects; and
. the overall conditions of the general economy and the financial markets.
The conditions of the financial markets and prevailing interest rates have
fluctuated in the past and are likely to fluctuate in the future.Such
fluctuations could have an adverse effect on the price of the notes.
Our credit ratings may not reflect all risks of your investments in thenotes.
Our credit ratings are an assessment by rating agencies of our ability to pay
our debts when due. Consequently, real oranticipated changes in our credit
ratings will generally affect the market value of the notes.
These credit ratings may not reflect thepotential impact of risks relating to
the structure or marketing of the notes. Agency ratings are not a
recommendation to buy, sell or hold any security, and may be revised or
withdrawn at any time by the issuing organization. Each agency'srating should
be evaluated independently of any other agency's rating.
Redemption may adversely affect your return on the notes.
We have the right to redeem some or all of the notes prior to maturity. We may
redeem the notes at times when prevailing interest rates may berelatively low.
Accordingly, you may not be able to reinvest the amount received upon a
redemption in a comparable security at an effective interest rate as high as
that of the notes.
Investors in the notes may be unable to enforce judgments obtained in U.S.
courts against the issuer or the guarantor.
The guarantor is incorporated under the laws of Ireland, and a portion of our
assets are located outside the United States. As a result, it maynot be
possible for investors to enforce against the guarantor judgments obtained in
U.S. courts predicated upon the civil liability provisions of the federal
securities laws of the United States. Litigation in
non-U.S.
jurisdictions is also subject to rules of procedures that differ from the U.S.
rules, including with respect to the taking and admissibility of evidence, the
conduct of the proceedings, and theallocation of costs. See "Service of
Process and Enforcement of Liabilities."
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USE OF PROCEEDS
We estimate that the net proceeds from the offering, after deducting the
underwriting discount and offering fees and expenses payable by us,will be
approximately $394.0 million.
We intend to use the net proceeds from the sale of the notes in this offering
to repay, atmaturity, all $400.0 million outstanding aggregate principal
amount of our 3.200% Senior Notes due October 1, 2024. Pending this use, we
intend to invest the net proceeds of this offering in certificates of deposit,
United Statesgovernment securities and certain other interest-bearing
securities.
Certain of the underwriters hold Existing Notes and may thereforereceive
proceeds from this offering in connection with the repayment of the Existing
Notes.
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CAPITALIZATION
The following table sets forth our unaudited cash and capitalization as of
March 31, 2024 on a historical basis and on an
as-adjusted
basis to give effect to this offering and the use of proceeds therefrom.
We are providingthe capitalization table below for informational purposes
only. It should not be construed to be indicative of our capitalization or
financial condition had this offering and the application of the use of
proceeds therefrom been completed on thedate assumed. The capitalization table
below is not necessarily indicative of our future capitalization or financial
condition.
Thistable should be read in conjunction with the information set forth under
"Use of Proceeds" in this prospectus supplement and the accompanying
prospectus and our consolidated financial statements and the notes thereto
incorporated byreference in this prospectus supplement and the accompanying
prospectus.
As of March 31, 2024
(in millions) Actual As
adjusted
Cash and cash equivalents(1) $ 391.8 $ 385.8
Indebtedness:
Revolving Credit Facility(2) -- --
2021 Term Facility 221.9 221.9
3.200% Senior Notes due 2024 400.0 --
3.550% Senior Notes due 2027 400.0 400.0
3.500% Senior Notes due 2029 400.0 400.0
5.411% Senior Notes due 2032 600.0 600.0
Senior notes offered hereby -- 400.0
Other debt 0.9 0.9
Total indebtedness(3) $ 2,022.8 $ 2,022.8
Equity:
Ordinary shares, $0.01 par value 0.9 0.9
Retained earnings(3) 1,635.5 1,635.5
Accumulated other comprehensive loss (285.5 ) (285.5 )
Total equity $ 1,350.9 $ 1,350.9
Total capitalization $ 3,373.7 $ 3,373.7
(1) Reflects net proceeds from the offering, after deducting the underwriting discount and offering fees andexpenses payable by us.
(2) As of March 31, 2024, we had $18.3 million of letters of credit outstanding.
(3) The
as-adjusted
amount includes the
write-off
of deferred financing costs.
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DESCRIPTION OF THE NOTES
In this description, (i) the term "Issuer" refers only to Allegion US Holding
Company Inc. and not to any of itssubsidiaries or affiliates, (ii) the
"Guarantor" refers to Allegion plc and not to any of its subsidiaries or
affiliates, and (iii) the terms "we," "our" and "us" each refer to Allegion
plc and itsconsolidated subsidiaries.
The following description of the particular terms and conditions of the notes
supplements, and to theextent inconsistent therewith, replaces the description
of the general terms and conditions of the debt securities set forth under
"Description of the Debt Securities" in the accompanying prospectus. You
should read this prospectussupplement and the accompanying prospectus together
for a more complete description of the Indenture (as defined below) and the
notes. The following description and the description set forth under
"Description of the Debt Securities" inthe accompanying prospectus are only
summaries of the material provisions of the Indenture and the notes, do not
purport to be complete and are qualified in their entirety by reference to the
provisions of the Indenture, including the definitionstherein of certain terms
used below. We urge you to read the Indenture because it, not the following
description, defines your rights as Holders of the notes.
General
The Issuer willissue $400 million aggregate principal amount of 5.600% Senior
Notes due 2034 (the "notes") under an indenture to be dated as of the Issue
Date, as supplemented by a supplemental indenture to be dated as of the Issue
Date (as amendedand supplemented from time to time, the "Indenture"), among
the Issuer, the Guarantor and U.S. Bank Trust Company, National Association,
as trustee. The terms of the notes include those stated in the Indenture and
those made part of theIndenture by reference to the Trust Indenture Act.
Copies of the form of the Indenture may be obtained from the Issuer upon
request. The "Issue Date" refers to the date of issuance of the notes.
The notes will be the Issuer's general unsecured obligations and will rank
equally with all of its other unsecured and unsubordinatedindebtedness and
senior in right of payment to any future subordinated indebtedness of the
Issuer that expressly provides for subordination to the notes. The notes will
be guaranteed on a senior unsecured basis by the Guarantor and will rank
equallywith all of the Guarantor's existing and future senior unsecured
obligations and effectively junior to the Guarantor's existing and future
secured obligations to the extent of the value of the assets securing such
obligations. The noteswill be structurally subordinated to indebtedness and
other liabilities of the subsidiaries of the Issuer, none of which will
guarantee the notes. The notes will be effectively subordinated in right of
payment to any future secured indebtedness ofthe Issuer to the extent of the
value of the assets securing such indebtedness. As of March 31, 2024, on an as
adjusted basis to give effect to this offering and the use of proceeds
therefrom, the Issuer had no secured or subordinatedindebtedness outstanding.
The Issuer may redeem the notes in whole or in part at any time at the
applicable redemption prices describedunder "--Optional Redemption" below. The
Issuer may issue additional notes from time to time after this offering. The
notes and any additional new notes subsequently issued under the Indenture
would be treated as a single series forall purposes under the Indenture,
including, without limitation, waivers, amendments and redemptions. If the
additional notes, if any, are not fungible with the notes offered hereby for
U.S. federal income tax purposes, the additional notes willhave a separate
CUSIP number. The notes will not have the benefit of a sinking fund. If a
Change of Control Repurchase Event (as defined below) occurs, except to the
extent the Issuer has exercised its right to redeem the notes, the Issuer will
berequired to offer to repurchase the notes, as described under "--Change of
Control Repurchase Event" below.
The Indenturedoes not limit the aggregate amount of debt securities which may
be issued. Other than the provisions relating to a Change of Control
Repurchase Event and the limitation on creating or incurring certain liens as
described in "--Limitationson Liens" below and the limitation on entering into
certain sale-leaseback
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transactions as described in "--Limitations on Sale-Leaseback Transactions"
below, the Indenture does not contain any debt covenants or provisions which
would afford the holders ofthe notes protection in the event of a highly
leveraged transaction.
The trustee will not be liable for special, indirect, exemplary,incidental,
punitive or consequential or other similar loss or damage of any kind under
the Indenture. The Indenture also provides (among other things) the trustee
with certain rights, benefits, protections, immunities, indemnities, and
privileges.The Issuer, the Guarantor, and the trustee, and each holder of a
note by its acceptance thereof, irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of orrelating to the Indenture, the notes or any
transaction contemplated thereby.
The notes will be issued only in fully registered formwithout coupons in
denominations of $1,000 and integral multiples of $1,000 in excess of $1,000.
The notes will be represented by one or more permanent global notes registered
in the name of DTC or its nominee, as described under "Book-Entry;Delivery and
Form." The transferor of any note shall provide or cause to be provided to the
trustee all information necessary to allow the trustee to comply with any
applicable tax reporting obligations, including without limitation, any
costbasis reporting obligations under Section 6045 of the Internal Revenue
Code of 1986, as amended (the "Code"). The trustee may rely conclusively on
information provided to it and shall have no responsibility to verify or
ensure theaccuracy of such information.
Guarantee
The notes and the other payment obligations of the Issuer under the Indenture
will be fully and unconditionally guaranteed on a seniorunsecured basis (the
"Guarantee") by the Guarantor.
The Guarantee will rank equally with all of the Guarantor's otherexisting and
future unsecured and unsubordinated indebtedness and senior in right of
payment to any future subordinated indebtedness of the Guarantor that
expressly provides for subordination to the Guarantee. The Guarantee will be
effectivelysubordinated to any secured indebtedness of the Guarantor to the
extent of the value of the assets securing such indebtedness. As of March 31,
2024, on an as adjusted basis to give effect to this offering and the use of
proceeds therefrom, theGuarantor had no secured or subordinated indebtedness
outstanding. The notes will be structurally subordinated to indebtedness and
other liabilities of the subsidiaries of the Guarantor (other than the
Issuer), none of which will guarantee thenotes.
The obligations of the Guarantor under the Guarantee will be limited as
necessary to prevent such Guarantee from constituting afraudulent conveyance
under applicable law and, therefore, are limited to the amount that the
Guarantor could guarantee without such Guarantee constituting a fraudulent
conveyance; this limitation, however, may not be effective to prevent
suchGuarantee from constituting a fraudulent conveyance. If the Guarantee was
rendered voidable, it could be subordinated by a court to all other
indebtedness (including guarantees and other contingent liabilities) of the
Guarantor, and, depending onthe amount of such indebtedness, the Guarantor's
liability on its Guarantee could be reduced to zero. In such an event, the
notes offered hereby would be structurally subordinated to the indebtedness
and other liabilities of the Guarantor. See"Risk Factors--Our being subject to
certain fraudulent transfer and conveyance statutes may have adverse
implications for the holders of the notes" and "Risk Factors--Applicable Irish
law may allow courts, under specificcircumstances, to void, vary or
subordinate the guarantee and require the holders of the notes to return
payments received from the guarantor."
Interest and Maturity
The notes will bear interest at the rate of 5.600% per year. Interest on the
notes will be computed on the basis of a
360-day
year of twelve
30-day
months. Interest on the notes will be payable semi-annually in arrears
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on May 29 and November 29, commencing November 29, 2024, and ending on the
maturity date of the notes, to the persons in whose names the notes are
registered on the precedingMay 14 and November 14 (whether or not that date is
a business day). If the maturity date of the notes falls on a day that is not
a business day, the related payment of principal and interest will be made on
the next business day as if itwere made on the date such payment was due, and
no interest will accrue on the amounts so payable for the period from and
after such date to the next business day. If any payment date would otherwise
be a day that is not a business day, the relatedpayment will be made on the
next business day as if it were made on the date such payment was due, and no
interest will accrue on the amounts so payable for the period from and after
such date to the next business day. Interest on the notes willaccrue from the
most recent interest payment date or, if no interest has been paid, from the
Issue Date.
The notes will mature onMay 29, 2034.
Mandatory Redemption; Offers to Purchase; Open Market Purchases
The Issuer is not required to make any mandatory redemption or sinking fund
payments with respect to the notes. However, under certaincircumstances, the
Issuer may be required to offer to purchase the notes as described under the
caption "--Change of Control Repurchase Event." We may at any time and from
time to time purchase notes in the open market, negotiatedtransactions or
otherwise.
Optional Redemption
Prior to March 1, 2034 (three months prior to their maturity date) (the "Par
Call Date"), the Issuer may redeem the notes atits option, in whole or in
part, at any time and from time to time, at a redemption price (expressed as a
percentage of principal amount and rounded to three decimal places) equal to
the greater of:
(1) (a) the sum of the present values of the remaining scheduled payments of principal and interest thereondiscounted
to the redemption date (assuming the notes matured on the Par Call Date) on a semi-annual basis (assuming a
360-day
year consisting of twelve
30-day
months)at the Treasury
Rate plus 20 basis points,
less
(b) interest accrued to the
date of redemption, and
(2) 100% of the principal amount of the notes to be redeemed,
plus, in either case, accrued and unpaid interest thereon to the redemption
date.
On or after the Par Call Date, the Issuer may redeem the notes, in whole or in
part, at any time and from time to time, at a redemption priceequal to 100% of
the principal amount of the notes being redeemed plus accrued and unpaid
interest thereon to the redemption date.
"
Treasury Rate
" means, with respect to any redemption date, the yield determined by the
Issuer in accordance with thefollowing two paragraphs.
The Treasury Rate shall be determined by the Issuer after 4:15 p.m., New York
City time (or after such time asyields on U.S. government securities are
posted daily by the Board of Governors of the Federal Reserve System), on the
third business day preceding the redemption date based upon the yield or
yields for the most recent day that appear after suchtime on such day in the
most recent statistical release published by the Board of Governors of the
Federal Reserve System designated as "Selected Interest Rates (Daily)--H.15"
(or any successor designation or publication)("H.15") under the caption "U.S.
government securities-Treasury constant maturities-Nominal" (or any successor
caption or heading). In determining the Treasury Rate, the Issuer shall
select, as applicable: (1) theyield for the Treasury constant maturity on H.15
exactly equal to the period from the redemption date to the Par Call Date (the
"Remaining Life"); or (2) if there is no such Treasury constant maturity
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on H.15 exactly equal to the Remaining Life, the two yields--one yield
corresponding to the Treasury constant maturity on H.15 immediately shorter
than and one yield corresponding to theTreasury constant maturity on H.15
immediately longer than the Remaining Life--and shall interpolate to the Par
Call Date on a straight-line basis (using the actual number of days) using
such yields and rounding the result to three decimalplaces; or (3) if there is
no such Treasury constant maturity on H.15 shorter than or longer than the
Remaining Life, the yield for the single Treasury constant maturity on H.15
closest to the Remaining Life. For purposes of this paragraph, theapplicable
Treasury constant maturity or maturities on H.15 shall be deemed to have a
maturity date equal to the relevant number of months or years, as applicable,
of such Treasury constant maturity from the redemption date.
If on the third business day preceding the redemption date H.15 or any
successor designation or publication is no longer published, the Issuershall
calculate the Treasury Rate based on the rate per annum equal to the
semi-annual equivalent yield to maturity at 11:00 a.m., New York City time, on
the second business day preceding such redemption date of the United States
Treasury securitymaturing on, or with a maturity that is closest to, the Par
Call Date, as applicable. If there is no United States Treasury security
maturing on the Par Call Date but there are two or more United States Treasury
securities with a maturity dateequally distant from the Par Call Date, one
with a maturity date preceding the Par Call Date and one with a maturity date
following the Par Call Date, the Issuer shall select the United States
Treasury security with a maturity date preceding the ParCall Date. If there
are two or more United States Treasury securities maturing on the Par Call
Date or two or more United States Treasury securities meeting the criteria of
the preceding sentence, the Issuer shall select from among these two or
moreUnited States Treasury securities the United States Treasury security that
is trading closest to par based upon the average of the bid and asked prices
for such United States Treasury securities at 11:00 a.m., New York City time.
In determining theTreasury Rate in accordance with the terms of this
paragraph, the semi-annual yield to maturity of the applicable United States
Treasury security shall be based upon the average of the bid and asked prices
(expressed as a percentage of principalamount) at 11:00 a.m., New York City
time, of such United States Treasury security, and rounded to three decimal
places.
TheIssuer's actions and determinations in determining the redemption price
shall be conclusive and binding for all purposes, absent manifest error.
Notice of any redemption will be mailed or electronically delivered (or
otherwise transmitted in accordance with the depositary'sprocedures) at least
10 days but not more than 60 days before the redemption date to each holder of
notes to be redeemed.
Any notice ofredemption may, at the Issuer's discretion, be subject to one or
more restrictions or conditions, including completion of an equity offering or
other corporate transaction. If any such restriction or condition has not been
satisfied, the Issuerwill provide notice to the trustee no later than the
close of business the Business Day prior to the Redemption Date that such
condition precedent has not been satisfied, the notice of redemption is
rescinded or delayed and the redemption subject tothe satisfaction of such
restriction or condition shall not occur or shall be delayed.
Unless the Issuer defaults in payment of theredemption price, on and after the
redemption date interest will cease to accrue on the notes or portions thereof
called for redemption.
Change of Control Repurchase Event
If a Change of Control Repurchase Event occurs with respect to the notes,
except to the extent the Issuer has exercised its right to redeemthe notes as
described above, the Issuer will make an offer to each holder of the notes to
repurchase all or any part (in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof) of that holder's notes at a
repurchaseprice (the "repurchase price") in cash equal to 101% of the
aggregate principal amount of such notes repurchased plus any accrued and
unpaid interest on such notes repurchased to, but not including, the
repurchase date. Within 30 daysfollowing a Change of Control Repurchase
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Event or, at the Issuer's option, prior to a Change of Control, but after the
public announcement of such Change of Control, the Issuer will mail, or cause
to be mailed, or otherwise deliverin accordance with the applicable procedures
of DTC, a notice to each holder of the notes, with a copy to the trustee,
describing the transaction or transactions that constitute or may constitute
the Change of Control Repurchase Event and offeringto repurchase the notes on
the payment date specified in the notice (such offer the "repurchase offer"
and such date the "repurchase date"), which repurchase date will be no earlier
than 30 days and no later than 60 days from thedate such notice is mailed or
delivered, pursuant to the procedures described in such notice. The notice
shall, if mailed or delivered prior to the date of consummation of the Change
of Control, state that the repurchase offer is conditioned on aChange of
Control Repurchase Event occurring on or prior to the repurchase date.
The Issuer will comply with the requirements of Rule
14e-1
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and any other securities laws and regulations to the extent those laws and
regulations are applicable in connection withthe repurchase of the notes as a
result of a Change of Control Repurchase Event. To the extent that the
provisions of any securities laws or regulations conflict with the Change of
Control Repurchase Event provisions of the notes, the Issuer willcomply with
the applicable securities laws and regulations and will not be deemed to have
breached its obligations under the Change of Control Repurchase Event
provisions of the notes by virtue of such conflict.
On the repurchase date following a Change of Control Repurchase Event, the
Issuer will, to the extent lawful:
(1) accept for payment all notes or portions of notes properly tendered pursuant to the repurchase offer;
(2) deposit with the trustee or with such paying agent as the trustee may designate an amount equal
to theaggregate repurchase price for all notes or portions of notes properly tendered; and
(3) deliver, or cause to be delivered, to the trustee the notes properly
accepted for payment by the Issuer,together with an officer's
certificate stating the aggregate principal amount of notes being
repurchased by the Issuer pursuant to the repurchase offer.
The trustee will promptly mail, or cause the paying agent to promptly mail, or
otherwise deliver in accordance with the applicable proceduresof DTC, to each
holder of notes, or portions of notes, properly tendered and accepted for
payment by the Issuer the repurchase price for such notes, or portions of
notes.
The Issuer will not be required to make a repurchase offer upon a Change of
Control Repurchase Event if a third party makes such an offer inthe manner, at
the times and otherwise in compliance with the requirements for such an offer
made by the Issuer and such third party purchases all notes or portions of
notes properly tendered and not withdrawn under its offer.
If Holders of not less than 90% in aggregate principal amount of the
outstanding notes validly tender and do not withdraw such notes inconnection
with a Change of Control Repurchase Event and the Issuer, or any third party
making a repurchase offer in lieu of the Issuer as described above, purchases
all of the notes validly tendered and not withdrawn by such Holders, the
Issuer orsuch third party will have the right, upon not less than 10 days' nor
more than 60 days' prior notice, provided, that such notice is given not more
than 30 days following such repurchase date pursuant to the repurchase offer
describedabove, to redeem all notes that remain outstanding following such
repurchase date on a date and at a price in cash equal to the repurchase price
described above.
For purposes of the foregoing discussion of a repurchase at the option of
holders, the following definitions are applicable:
"Below Investment Grade Ratings Event" means, with respect to the notes, on
any day within the
60-day
period (which period shall be extended so long as the rating of the notes is
under publicly announced
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consideration for a possible downgrade by any Rating Agency) after the earlier
of (1) the occurrence of a Change of Control, or (2) public announcement of
the occurrence of a Change ofControl or the Issuer's intention to effect a
Change of Control, the notes are rated below Investment Grade by at least two
of the three Rating Agencies. Notwithstanding the foregoing, a Below
Investment Grade Ratings Event otherwise arising byvirtue of a particular
reduction in rating shall not be deemed to have occurred in respect of a
particular Change of Control (and thus shall not be deemed a Below Investment
Grade Ratings Event for purposes of the definition of Change of ControlRepurchas
e Event hereunder) if the Rating Agencies making the reduction in rating to
which this definition would otherwise apply do not publicly announce or
publicly confirm or inform us in writing that the reduction was the result, in
whole or inpart, of any event or circumstance comprised of or arising as a
result of, or in respect of, the applicable Change of Control (whether or not
the applicable Change of Control shall have occurred at the time of the Below
Investment Grade RatingsEvent).
"Change of Control" means the occurrence of any of the following: (a) the
consummation of any transaction(including, without limitation, any merger or
consolidation) the result of which is that any "person" or "group" (as those
terms are used in Section 13(d)(3) of the Exchange Act), other than (1) the
Guarantor or any ofits subsidiaries, (2) any employee benefit plan (or a trust
forming a part thereof) maintained by the Guarantor or any of its
subsidiaries, or (3) any underwriter temporarily holding Voting Stock of the
Guarantor pursuant to an offering ofsuch Voting Stock, becomes the beneficial
owner (as defined in Rules
13d-3
and
13d-5
under the Exchange Act), directly or indirectly, of more than 50% of the
combinedvoting power of the Guarantor's Voting Stock or other Voting Stock
into which the Guarantor's Voting Stock is reclassified, consolidated,
exchanged or changed measured by voting power rather than number of shares;
(b) the direct orindirect sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the assets of the
Guarantor and its subsidiaries taken as awhole to any "person" or "group" (as
those terms are used in Section 13(d)(3) of the Exchange Act) other than to
the Guarantor or one of its subsidiaries; or (c) the Guarantor consolidates
with, or merges with or into,any person, or any person consolidates with, or
merges with or into, the Guarantor, in any such event pursuant to a
transaction in which any of the outstanding Voting Stock of the Guarantor or
such other person is converted into or exchanged forcash, securities or other
property, other than any such transaction where the shares of the Voting Stock
of the Guarantor outstanding immediately prior to such transaction constitute,
or are converted into or exchanged for, a majority of the VotingStock of the
surviving person immediately after giving effect to such transaction.
"Change of Control Repurchase Event" meansthe occurrence of both a Change of
Control and a Below Investment Grade Ratings Event with respect to the notes.
"Fitch" meansFitch Ratings Inc., and its successors.
"Investment Grade" means, with respect to Fitch, a rating of BBB- or better
(orits equivalent under any successor rating categories of Fitch), with
respect to Moody's, a rating of Baa3 or better (or its equivalent under any
successor rating categories of Moody's), and with respect to S&P, a rating of
BBB- orbetter (or its equivalent under any successor rating categories of
S&P), or if the applicable securities are not then rated by Fitch, Moody's or
S&P an equivalent investment grade credit rating by any additional Rating
Agency or RatingAgencies selected by the Issuer.
"Moody's" means Moody's Investors Service, Inc., a subsidiary of Moody'sCorporat
ion, and its successors.
"Rating Agency" means (1) each of Fitch, Moody's and S&P, and (2) if any
ofFitch, Moody's or S&P ceases to rate the notes or fails to make a rating of
the notes publicly available for reasons outside of the Issuer's control, a
different "nationally recognized statistical rating organization" (asdefined
in Section 3(a)(62) of the Securities Act) selected by the Issuer as a
replacement agency for Fitch, Moody's or S&P, or each of them, as applicable.
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"S&P" means S&P Global Ratings, a division of S&P Global Inc., and
itssuccessors.
"Voting Stock" of any specified "person" (as that term is used in Section
13(d)(3) of the ExchangeAct) as of any date means the capital stock of such
person that is at the time entitled to vote generally in the election of the
board of directors of such person.
The Change of Control Repurchase Event provisions of the notes may in certain
circumstances make more difficult or discourage a sale ortakeover of the
Guarantor and, thus, the removal of incumbent management. The Issuer or the
Guarantor could, in the future, enter into certain transactions, including
acquisitions, refinancings or other recapitalizations, that would not
constitute aChange of Control Repurchase Event under the notes, but that could
increase the amount of indebtedness outstanding at such time or otherwise
affect the Issuer's or the Guarantor's capital structure or credit ratings on
the notes.
If the Issuer experiences a Change of Control Repurchase Event, the Issuer may
not have sufficient financial resources available to satisfyits obligations to
repurchase all notes or portions of notes properly tendered. Furthermore, debt
agreements to which the Issuer may become a party in the future may contain
restrictions and provisions limiting its ability to repurchase the notes.The
Issuer's failure to repurchase the notes as required under the Indenture would
result in a default under the Indenture, which could have material adverse
consequences for the Issuer and the holders of the notes.
Selection and Notice
With respect to any partial redemption or repurchase of the notes made
pursuant to the Indenture, if less than all of the notes are to beredeemed or
repurchased at any given time, selection of such notes for redemption or
repurchase will be made by the trustee (a) if such notes are listed on any
securities exchange, in compliance with the requirements of the principal
securitiesexchange on which such notes are listed, (b) on a pro rata basis to
the extent practicable or such other method that the trustee deems fair and
appropriate or (c) by lot or such other similar method in accordance with the
procedures ofDTC; provided, that no notes of $1,000 or less shall be redeemed
or repurchased in part.
If any note is to be purchased or redeemed inpart only, any notice of purchase
or redemption that relates to such note shall state the portion of the
principal amount thereof that has been or is to be purchased or redeemed. If
any notes are to be purchased or redeemed in part only, the Issuerwill issue a
new note (or cause to be transferred by book entry) in principal amount equal
to the unredeemed or unpurchased portion of the original note in the name of
the Holder thereof upon cancellation of the original note; provided that each
newnote will be in a principal amount equal to $1,000 or any integral multiple
of $1,000 in excess thereof.
Notes called for redemption orrepurchase become due on the date fixed for
redemption or repurchase. On and after the redemption or repurchase date,
unless the Issuer defaults in payment of the redemption or repurchase price,
interest shall cease to accrue on notes or portionsthereof called for
redemption or repurchase.
Limitation on Liens
Neither we nor any of our subsidiaries may, directly or indirectly, create,
incur, issue, assume, guarantee or otherwise become directly orindirectly
liable, contingently or otherwise, with respect to any Indebtedness secured by
a Lien (other than a Permitted Lien) upon any Principal Property or upon the
Capital Stock of any subsidiary (in each case, whether owned on the Issue Date
orthereafter acquired) without equally and ratably securing the notes then
outstanding, unless the aggregate principal amount of all outstanding
Indebtedness of us and our subsidiaries that is secured by Liens (other than
Permitted Liens) on anyPrincipal Property or upon the Capital Stock of any
subsidiary (in each case, whether owned on the Issue Date or thereafter
acquired) plus the
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amount of all outstanding Attributable Debt incurred pursuant to the first
bullet under the covenant entitled "Limitation on Sale-Leaseback Transactions"
would not exceed 15% ofConsolidated Net Tangible Assets calculated as of the
date of the creation or incurrence of the Lien. This limitation does not apply
to Permitted Liens.
Limitation on Sale-Leaseback Transactions
Neither we nor any of our subsidiaries may sell any Principal Property
(whether owned on the Issue Date or thereafter acquired) with theintention of
taking back a lease of that property for a period of more than three years
(including renewals at the option of the lessee) other than leases between us
and any of our subsidiaries or leases between our subsidiaries (a"Sale-Leaseback
Transaction"), unless:
. after giving effect thereto, the aggregate amount of all outstanding
Attributable Debt with respect to all suchtransactions, plus the amount of
outstanding indebtedness secured by a Lien (other than a Permitted Lien)
upon any Principal Property or upon the Capital Stock of any subsidiary
(in each case, whether owned on the Issue Date or thereafter acquired)incurred
without equally and ratably securing the notes pursuant to the
covenant entitled "Limitation on Liens" would not exceed 15% of Consolidated
Net Tangible Assets calculated at the time of the transaction; or
. within one year after such sale and leaseback transaction, we or such subsidiary
applies an amount equal to thegreater of the net proceeds of such sale and leaseback
transaction and the fair market value at the time of the transaction of the Principal
Property so leased to the retirement of Funded Debt of us or any of our subsidiaries.
For purposes of the foregoing discussion of limitation on liens and limitation
on sale-leaseback transactions, the following definitions areapplicable:
"Attributable Debt" in respect of a Sale and Leaseback Transaction means, at
the time of the determination, thepresent value of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such Sale and Leaseback Transaction including any period for which such
lease has been extended or may, at the option of thelessor, be extended. Such
present value shall be calculated using a discount rate equal to the rate of
interest implicit in such transaction, determined in accordance with U.S.
generally accepted accounting principles ("GAAP").
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares, interests,
participations, rights orother equivalents (however designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership
interests (whether general or limited)or membership interests; and
(4) any other interest or participation that confers on a Person the right to receive a
share of the profits andlosses of, or distributions of assets of, the issuing Person;
but excluding from all of the foregoing any debtsecurities convertible into
Capital Stock, whether or not such debt securities include any right of
participation with Capital Stock.
"Consolidated Net Tangible Assets" means the aggregate amount of our and our
consolidated subsidiaries' assets (less applicablereserves and other properly
deductible items) after deducting therefrom (a) all current liabilities
(excluding any current liabilities constituting Funded Debt by reason of being
extendible or renewable), (b) all goodwill, trade names,trademarks, patents,
unamortized debt discount and expense and other
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like intangibles and (c) minority equity interests in any of our subsidiaries
that is not a wholly owned subsidiary, all as set forth on or included in our
balance sheet for its most recentcompleted fiscal quarter for which internal
financial statements are available computed in accordance with GAAP.
"Financing LeaseObligation" means an obligation that is required to be
accounted for as a financing or capital lease (and, for the avoidance of
doubt, not a straight-line or operating lease) on both the balance sheet and
income statement for financialreporting purposes in accordance with GAAP. At
the time any determination thereof is to be made, the amount of the liability
in respect of a financing or capital lease would be the amount required to be
reflected as a liability on such balance sheet(excluding the footnotes
thereto) in accordance with GAAP.
"Funded Debt" means all Indebtedness, whether or not evidenced by abond,
debenture, note or similar instrument or agreement, of any Person, for the
repayment of borrowed money having a maturity of more than 12 months from the
date of its creation or having a maturity of less than 12 months from the date
of itscreation but by its terms being renewable or extendible beyond 12 months
from such date at the option of such Person. For the purpose of determining
"Funded Debt" of any Person, there will be excluded any particular
Indebtedness if, on orprior to the maturity thereof, there will have been
deposited with the proper depository in trust the necessary funds for the
payment, redemption or satisfaction of such Indebtedness.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under any interest rate swap agreement,interest rate cap
agreement, interest rate collar agreement, commodity swap agreement, commodity
cap agreement, commodity collar agreement, foreign exchange contract, currency
swap agreement or similar agreement providing for the transfer ormitigation of
interest rate, commodity price or currency risks either generally or under
specific contingencies.
"Indebtedness"means, with respect to any specified Person, any indebtedness of
such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreementsin respect thereof);
(3) in respect of bankers' acceptances;
(4) representing Financing Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase price of any property,
except any such balancethat constitutes an accrued expense or trade payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of
thespecified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
thespecified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;and
(2) the principal amount of the Indebtedness, together with any interest on the
Indebtedness that is more than 30days past due, in the case of any other Indebtedness.
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"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge,security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease
in the nature thereof,any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Permitted Liens" means:
(1) Liens existing on the Issue Date;
(2) Liens in favor of us or any of our subsidiaries;
(3) Liens on property of a Person existing at the time such Person is merged with or into or
consolidated with usor any of our subsidiaries; provided that such Liens were not created
in contemplation of such merger or consolidation and do not extend to any assets other
than those of the Person merged into or consolidated with us or any of our subsidiaries;
(4) Liens on property existing at the time of the acquisition, construction or improvement of such property by usor any
of our subsidiaries after the date the notes were first issued; provided that such Liens were created or assumed
contemporaneously with, or within 180 days of, such acquisition, construction or improvement and which are created to
secure, orprovide for the payment of, all or any part of the cost of such acquisition, construction or improvement;
(5) Liens to secure the performance of statutory or regulatory obligations, surety or appeal bonds,
performancebonds or other obligations of a like nature incurred in the ordinary course of business;
(6) Liens for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are beingcontested in good faith by appropriate proceedings
promptly instituted and diligently concluded; provided that any reserve or other
appropriate provision as is required in conformity with GAAP has been made therefor;
(7) any extension, renewal or replacement of any Lien referred to above; provided that (a) such
extension,renewal or replacement Lien is limited to the same property that secured the original Lien (plus
improvements and accessions to such property) and (b) the Indebtedness secured by the new Lien is
not greater than the Indebtedness secured by theLien that is extended, renewed or replaced; and
(8) zoning restrictions, easements,
rights-of-way,
restrictions on the use of property, other similar encumbrances
incurred in the ordinary course of business and minor irregularities
of title, which donot materially interfere with the ordinary conduct
of our or any of our subsidiaries' business taken as a whole.
"Person" means an individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company,trust, unincorporated
organization, governmental authority or other entity of whatever nature.
"Principal Property" means anymanufacturing plant, warehouse or other similar
facility or any parcel of real estate or group of contiguous parcels of real
estate owned by us or any of our subsidiaries (whether owned on the Issue Date
or thereafter acquired) that has a gross bookvalue on the date as of which the
determination is being made, without deduction of any depreciation reserves,
exceeding 3% of Consolidated Net Tangible Assets.
Additional Amounts
TheGuarantor will be required to make all payments under or with respect to
the Guarantee free and clear of and without withholding or deduction for or on
account of any present or future tax, duty, levy, impost, assessment or other
governmental charge(including penalties, interest and other liabilities
related thereto)
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(hereinafter "Taxes") imposed or levied by or on behalf of (i) Ireland or any
political subdivision or any authority or agency therein or thereof having
power to tax, (ii) anyother jurisdiction in which the Guarantor is organized
or is otherwise resident for tax purposes or any political subdivision or any
authority or agency therein or thereof having the power to tax, or (iii) any
jurisdiction from or through whichpayment under or with respect to the
Guarantee is made or any political subdivision or any authority or agency
therein or thereof having the power to tax (each a "Relevant Taxing
Jurisdiction"), unless the withholding or deduction of suchTaxes is required
by law or by the official interpretation or administration thereof.
If the Guarantor is so required to withhold ordeduct any amount for or on
account of Taxes imposed or levied by or on behalf of a Relevant Taxing
Jurisdiction from any payment made under or with respect to the Guarantee, the
Guarantor will be required to pay such additional amounts("Additional
Amounts") as may be necessary so that the net amount received by a holder
(including Additional Amounts) after such withholding or deduction (including
any such withholding or deduction in respect of such Additional Amounts)will
not be less than the amount such holder would have received if such Taxes had
not been withheld or deducted; provided, however, that the foregoing
obligation to pay Additional Amounts does not apply to (1) any Taxes that
would not havebeen so imposed but for the existence of any present or former
connection between the holder, applicable recipient of payment or beneficial
owner of the note or any payment in respect of such note (each, a "relevant
holder") (or between afiduciary, settlor, beneficiary, member or shareholder
of, or possessor of power over, the relevant holder, if the relevant holder is
an estate, nominee, partnership, trust, corporation or other business entity)
and the Relevant Taxing Jurisdiction(including being a citizen or resident or
national of, or carrying on a business or maintaining a permanent
establishment in, or being physically present in, the Relevant Taxing
Jurisdiction, but excluding a connection arising solely from theacquisition,
ownership or holding of such note or the receipt of any payment in respect of
such note or the Guarantee or the exercise or enforcement of rights under such
note or the Guarantee); (2) any estate, inheritance, gift, sales, use,
valueadded, excise, transfer, personal property tax or similar tax, assessment
or governmental charge; (3) any Taxes imposed as a result of the failure of
the relevant holder of the notes to comply with a timely request in writing of
the Issuer orthe Guarantor (such request being made at a time that would
enable such relevant holder acting reasonably to comply with that request) to
provide information concerning such relevant holder's nationality, residence,
identity or connection withany Relevant Taxing Jurisdiction, if and to the
extent that due and timely compliance with such request under applicable law,
regulation or administrative practice would have reduced or eliminated such
Taxes with respect to such relevant holder;(4) any Taxes that are payable
other than by deduction or withholding from a payment on the Guarantee; (5)
any Taxes that would not have been so imposed if the relevant holder had
presented the note for payment (where presentation isrequired) to, or
otherwise accepted payment from, another paying agent in a member state of the
European Union; or (6) any Taxes withheld or deducted pursuant to Sections
1471 through 1474 of the Code, or any comparable or successor version ofsuch
Sections, any U.S. Treasury regulations promulgated thereunder, any official
interpretations thereof or any agreements or treaties (including any law
implementing any such agreement or treaty) entered into in connection with the
implementationthereof; nor will the Guarantor pay Additional Amounts (a) to
the extent the payment could have been made without such deduction or
withholding if the note had been presented for payment (where presentation is
permitted or required for payment)within 30 days after the date on which such
payment or such note became due and payable or the date on which payment
thereof is duly provided for, whichever is later, (b) with respect to any
payment on a note to any holder who is a fiduciary orpartnership (including an
entity treated as a partnership for tax purposes) or any person other than the
sole beneficial owner of such payment, to the extent that a beneficiary or
settlor with respect to such fiduciary, a member of such apartnership or the
beneficial owner of such payment would not have been entitled to the
Additional Amounts had such beneficiary, settlor, member or beneficial owner
been the actual holder of such note, or (c) in respect of any note to
theextent such withholding or deduction is imposed as a result of any
combination of clauses (1), (2), (3), (4), (5), (6), (a) and (b) of this
paragraph.
The Guarantor will make any required withholding or deduction and remit the
full amount deducted or withheld to the Relevant TaxingJurisdiction in
accordance with applicable law. The Guarantor will provide the trustee, for
the benefit of the holders, with official receipts evidencing the payment of
any Taxes so withheld or
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deducted. If, notwithstanding the Guarantor's efforts to obtain such receipts,
the same are not obtainable, the Guarantor will provide the trustee with other
evidence. In no event, however,shall the Guarantor be required to disclose any
information that the Guarantor reasonably deems to be confidential.
If the Guarantor isor will become obligated to pay Additional Amounts under or
with respect to any payment made on the Guarantee, at least 30 days prior to
the date of such payment, the Guarantor will deliver to the trustee an
officer's certificate stating thatAdditional Amounts will be payable and the
amount so payable and such other information necessary to enable the paying
agent to pay Additional Amounts to holders on the relevant payment date.
Whenever in the Indenture there is mentioned, in anycontext:
(x) the payment of principal or interest;
(y) redemption prices or purchase prices in connection with a redemption or purchase of notes; or
(z) any other amount payable on or with respect to the Guarantee;
such reference shall be deemed to include payment of Additional Amounts as
described under this heading to the extent that, in such context,
AdditionalAmounts are, were or would be payable in respect thereof. Neither
the trustee nor the paying agent shall have any responsibility or liability
for the determination, verification or calculation of any Additional Amounts.
The Issuer will pay any present or future stamp, court or documentary Taxes or
any other excise, property or similar Taxes that arise in theUnited States or
in any Relevant Taxing Jurisdiction from the execution, delivery, enforcement
or registration of the notes, the Indenture, the Guarantee or any other
document or instrument in relation thereto, and will agree to indemnify
therelevant holders for any such Taxes paid by such holders. The obligations
described under this heading will survive any termination, defeasance or
discharge of the Indenture and any transfer of the notes and will apply,
mutatis mutandis, to anyjurisdiction in which any successor to the Guarantor
is organized or resident for tax purposes or any political subdivision or
taxing authority or agency thereof or therein (each of which shall also be
treated as a Relevant Taxing Jurisdiction).
Redemption for Taxation Reasons
The Issuer is entitled to redeem the notes, at its option, at any time in
whole but not in part, at 100% of the principal amount thereof, plusaccrued
and unpaid interest and all Additional Amounts (if any), to the date of
redemption (subject to the right of holders of record on the relevant record
date to receive interest due on the relevant interest payment date), in the
event theGuarantor has become or would become obligated to pay, on the next
date on which any amount would be payable with respect to the notes, any
Additional Amounts with respect to the notes as a result of:
(1) a change in or an amendment to the laws (including any regulations, protocols or rulings promulgated
andtreaties enacted thereunder) of any Relevant Taxing Jurisdiction affecting taxation; or
(2) any change in or amendment to, or the introduction of, any official
position regarding the application,administration or interpretation
of such laws, regulations, treaties or rulings (including a
holding, judgment or order by a court of competent jurisdiction),
which change or amendment is announced or becomes effective on or after the
Issue Date and the Guarantor cannot avoid such obligation by taking
reasonablemeasures available to it; provided, that for this purpose reasonable
measures shall not include any change in the Guarantor's jurisdiction of
organization or location of its principal executive office. Notice of such
redemption (which noticeshall be irrevocable) shall be delivered electronically
or mailed by first-class mail, postage prepaid, at least 10 days but not more
than 60 days before the redemption date to each holder of the notes at such
holder's registered address orotherwise in accordance with the procedures of
DTC. Notwithstanding the foregoing, no such notice of redemption will be given
(i) earlier
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than 90 days prior to the earliest date on which the Guarantor would be
obliged to make such payment of Additional Amounts and (ii) unless at the time
such notice is given, such obligationto pay such Additional Amounts remains in
effect.
Before the Issuer mails or delivers notice of redemption of the notes as
describedabove, the Issuer will deliver to the trustee an officer's
certificate stating that the Guarantor cannot avoid its obligation to pay
Additional Amounts by taking reasonable measures available to it and that all
conditions precedent to theredemption have been complied with. The Issuer will
also deliver an opinion of counsel to the effect that the Guarantor would be
obligated to pay Additional Amounts as a result of a change in tax laws or
regulations or a new application orinterpretation of such laws or regulations
(as described in (1) or (2) in the first paragraph above) and that all
conditions precedent to the redemption have been complied with.
The foregoing will apply, mutatis mutandis, to any jurisdiction in which any
successor to the Guarantor is incorporated or organized or anypolitical
subdivision or taxing authority or agency thereof or therein.
Reports and Other Information
The Indenture will provide that, notwithstanding that the Guarantor may not be
required to be or remain subject to the reporting requirementsof Section 13(a)
or 15(d) of the Exchange Act, the Guarantor will file with the SEC (unless
such filing is not permitted under the Exchange Act or by the SEC), so long as
any notes are outstanding, the annual reports, information, documents andother
reports that the Guarantor is required to file with the SEC pursuant to such
Section 13(a) or 15(d) or would be so required to file if Guarantor were so
subject.
Notwithstanding the foregoing, the Guarantor will not be obligated to file
such reports with the SEC if the SEC does not permit such filing,so long as
the Guarantor provides such information to the trustee and the Holders by the
date the Guarantor would be required to file such information pursuant to the
preceding paragraph. The requirements set forth in this paragraph and
thepreceding paragraph may be satisfied by delivering such information to the
trustee and posting copies of such information on a website (which may be
nonpublic and may be maintained by the Guarantor or a third party) to which
access will be given toHolders.
Delivery of such statements, reports, notices and other information and
documents to the trustee pursuant to any of theprovisions of this covenant is
for informational purposes only and the trustee's receipt of such shall not
constitute actual or constructive notice of any information contained therein
or determinable from information contained therein,including the Issuer's
compliance with any of its covenants hereunder (as to which the trustee is
entitled to rely exclusively on officer's certificates). The trustee shall not
be obligated to monitor or confirm, on a continuing basis orotherwise, the
Issuer's or the Guarantor's compliance with the covenants or with respect to
any reports or other documents filed with the SEC or EDGAR or any website
under the Indenture, or participate in any conference calls.
Notwithstanding the foregoing, if at any time the Guarantor is no longer
required under GAAP to consolidate the Issuer in its consolidatedfinancial
statements, the requirements set forth in this section shall apply to the
Issuer, not the Guarantor.
Consolidation, Mergerand Sale of Assets
The Issuer may consolidate with or merge with or into any other person, and
may sell, transfer, lease or conveyall or substantially all of its properties
and assets to another person, provided that the following conditions are
satisfied:
. the Issuer is the continuing entity, or the resulting, surviving or transferee person (the "SuccessorIssuer")
is a corporation, partnership, limited liability company, trust or other entity organized and
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validly existing under the laws of the United States of America, any
state thereof or the District of Columbia, and the Successor Issuer
(if not the Issuer) will expressly assume, by supplementalindenture,
all obligations of the Issuer under the notes and the Indenture;
. immediately after giving effect to that transaction, no default or
event of default under the Indenture hasoccurred and is continuing;
. the Guarantor, unless it is the other party to the transactions described above, will by supplemental indentureconfirm that its
Guarantee shall apply to the obligations of the Successor Issuer (if not the Issuer) under the Indenture and the notes; and
. the Issuer delivers to the trustee an officer's certificate and an opinion of counsel each stating that suchconsolidation,
merger, sale, transfer, lease or conveyance and such supplemental indenture, if any, complies with the Indenture.
The Guarantor may consolidate with or merge with or into any other person, and
may sell, transfer, lease or convey all or substantially all ofits properties
and assets to another person, provided that the following conditions are
satisfied:
. the Guarantor is the continuing entity, or the resulting, surviving
or transferee person (the "SuccessorGuarantor") is a corporation,
partnership, limited liability company, trust or other entity
organized and validly existing under the laws of the United
States of America, any state thereof or the District of Columbia,
any Member State of theEuropean Union, Bermuda, Cayman
Islands, British Virgin Islands, Gibraltar, the British Crown
Dependencies, any member country of the Organisation for Economic
Co-operation
and Development, or any
politicalsubdivision of any of the
foregoing, and the Successor Guarantor
(if not the Guarantor) will
expressly assume, by supplemental
indenture, all of the Guarantor's
obligations under the Indenture
and the notes issued thereunder;
. immediately after giving effect to that transaction, no default or event
of default under the Indenture hasoccurred and is continuing; and
. the Guarantor delivers to the trustee an officer's certificate and
an opinion of counsel that the merger,consolidation, transfer, sale,
lease or conveyance and any supplemental indenture, as the case
may be, complies with the applicable provisions of the Indenture.
The Successor Issuer or Successor Guarantor, as the case may be, will succeed
to, and be substituted for, the Issuer or the Guarantor,respectively, under
the Indenture and the notes issued thereunder and the Issuer or the Guarantor,
as the case may be, will automatically be released and discharged from its
obligations under the Indenture and the notes issued thereunder.
For purposes of this covenant, "person" means any individual, corporation,
partnership, limited liability company, joint venture,association, joint-stock
company, trust, unincorporated organization or governmental authority or other
entity of whatever nature.
Thecovenant described under this heading replaces and supersedes the
description set forth under "Description of the Debt Securities--Covenants--Cons
olidation, Merger and Sale of Assets" in the accompanying prospectus.
Additional Events of Default
In addition to the events of default specified in clauses (1) through (7)
under "Description of the Debt Securities--Events ofDefault" in the
accompanying prospectus, the following shall be events of default with respect
to the notes issued hereby:
(1) the Guarantee of the Guarantor with respect to the notes shall for any reason cease to be in full force
(exceptas contemplated by the terms thereof or by the Indenture) and effect or be declared null and
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void or any responsible officer of the Guarantor denies that it has any further liability under its Guarantee with
respect to the notes or gives notice to such effect, other than by reason of thetermination of the Indenture; and
(2) default under any mortgage, indenture or instrument under which there is issued or by which there is secured
orevidenced any Indebtedness for money borrowed by the Guarantor or any of its subsidiaries or the payment of which
is guaranteed by the Guarantor or any of its subsidiaries, other than Indebtedness owed to the Guarantor or any
of its subsidiaries,whether such Indebtedness or guarantee now exists or is created after the Issue Date, if both
(A) such default either results from the failure to pay any principal of such Indebtedness at its stated
finalmaturity (after giving effect to any applicable grace periods) or relates to an obligation other than the
obligation to pay principal of any such Indebtedness at its stated final maturity and results in the holder
or holders of such Indebtednesscausing such Indebtedness to become due prior to its stated maturity, and
(B) the principal amount of such Indebtedness, together with the principal amount of any
other such Indebtedness indefault for failure to pay principal at stated final maturity
(after giving effect to any applicable grace periods), or the maturity of which has
been so accelerated, aggregate $100.0 million or more at any one time outstanding.
Concerning the Trustee
U.S. Bank Trust Company, National Association, has agreed to serve as the
trustee, registrar, paying agent and custodian for DTC under theIndenture and
assumes (and shall have) no responsibility or liability for the accuracy,
correctness, or completeness of the information (including such information
concerning us or our affiliates or any other party) contained in this document
or therelated documents or for any failure by us or any other party to
disclose events that may have occurred and may affect the significance or
accuracy of such information. Neither the trustee nor any paying agent shall
be responsible for determiningwhether any Change of Control or Change of
Control Repurchase Event has occurred and whether any repurchase offer with
respect to the notes is required. Neither the trustee nor any paying agent
shall be responsible for monitoring our rating status,making any request upon
any Rating Agency, determining whether any rating event with respect to the
notes has occurred. We now have, and may from time to time conduct, other
banking transactions, including lending transactions, or maintainingdeposit
accounts with, an affiliate of the trustee in the ordinary course of business.
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BOOK-ENTRY;
DELIVERY AND FORM
The notes will be represented by one or more global notes in registered,
global form without interest coupons(collectively, the "Global Notes"). The
Global Notes initially will be deposited upon issuance with the trustee as
custodian for DTC, and registered in the name of DTC or its nominee, in each
case for credit to an account of a direct orindirect participant as described
below.
Except as set forth below, the Global Notes may be transferred, in whole and
not in part, onlyto another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in the Global Notes may not be exchanged for
Notes in certificated form except in the limited circumstances described
below. See "--Exchange of GlobalNotes for Certificated Notes." In addition,
transfers of beneficial interests in the Global Notes will be subject to the
applicable rules and procedures of DTC and its direct or indirect
participants, which may change from time to time.
The notes may be presented for registration of transfer and exchange at the
offices of the registrar.
Depositary Procedures
The followingdescription of the operations and procedures of DTC is provided
solely as a matter of convenience. These operations and procedures are solely
within the control of the respective settlement systems and are subject to
changes by them. We take noresponsibility for these operations and procedures
and urge investors to contact the system or their participants directly to
discuss these matters.
DTC has advised us that DTC is a limited-purpose trust company organized under
the laws of the State of New York, a "bankingorganization" within the meaning
of the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the Uniform Commercial Code and a
"clearing agency" registered pursuant tothe provisions of Section 17A of the
Exchange Act. DTC was created to hold securities for its participating
organizations (collectively, the "participants") and to facilitate the
clearance and settlement of transactions in thosesecurities between
participants through electronic book-entry changes in accounts of its
participants. The participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations. Access
toDTC's system is also available to other entities such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly (collectively,
the "indirectparticipants"). Persons who are not participants may beneficially
own securities held by or on behalf of DTC only through the participants or
the indirect participants. The ownership interests in, and transfers of
ownership interests in, eachsecurity held by or on behalf of DTC are recorded
on the records of the participants and indirect participants.
DTC has also advised usthat, pursuant to procedures established by it:
(1) upon deposit of the Global Notes, DTC will credit the accounts of participants designated
by the underwriterswith portions of the principal amount of the Global Notes; and
(2) ownership of these interests in the Global Notes will be shown on, and the transfer
of ownership of theseinterests will be effected only through, records maintained by
DTC (with respect to the participants) or by the participants and the indirect
participants (with respect to other owners of beneficial interests in the Global Notes).
Investors in the Global Notes who are participants in DTC's system may hold
their interests therein directlythrough DTC. Investors in the Global Notes who
are not participants may hold their interests therein indirectly through
organizations which are participants in such system. All interests in a Global
Note may be subject to the procedures andrequirements of DTC. The laws of some
states require that certain persons take physical delivery in definitive form
of securities that they own. Consequently, the ability to transfer beneficial
interests in a Global Note to such persons will belimited to that extent.
Because DTC can act only on behalf of participants, which in
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turn act on behalf of indirect participants, the ability of a person having
beneficial interests in a Global Note to pledge such interests to persons that
do not participate in the DTC system, orotherwise take actions in respect of
such interests, may be affected by the lack of a physical certificate
evidencing such interests.
Except as described below, owners of an interest in the Global Notes will not
have notes registered in their names, will not receivephysical delivery of
notes in certificated form and will not be considered the registered owners or
"holders" thereof under the Indenture for any purpose.
Payments in respect of the principal of, and interest and premium, if any, on
a Global Note registered in the name of DTC or its nominee willbe payable to
DTC in its capacity as the registered holder under the Indenture. Under the
terms of the Indenture, we and the trustee will treat the persons in whose
names the notes, including the Global Notes, are registered as the owners of
thenotes for the purpose of receiving payments, notices and for all other
purposes. Consequently, neither we, the trustee nor any agent of us or the
trustee has or will have any responsibility or liability for:
(1) any aspect of DTC's records or any participant's or indirect participant's records relating
toor payments made on account of beneficial ownership interests in the Global Notes or for
maintaining, supervising or reviewing any of DTC's records or any participant's or indirect
participant's records relating to the beneficialownership interests in the Global Notes; or
(2) any other matter relating to the actions and practices of DTC or any of its participants or indirectparticipants.
DTC has advised us that its current practice, upon receipt of any payment in
respect of securities suchas the notes (including principal and interest), is
to credit the accounts of the relevant participants with the payment on the
payment date unless DTC has reason to believe it will not receive payment on
such payment date. Each relevant participantis credited with an amount
proportionate to its beneficial ownership of an interest in the principal
amount of the relevant security as shown on the records of DTC. Payments by
the participants and the indirect participants to the beneficial ownersof
notes will be governed by standing instructions and customary practices and
will be the responsibility of the participants or the indirect participants
and will not be the responsibility of DTC, the trustee or us. Neither we nor
the trustee willbe liable for any delay by DTC or any of its participants in
identifying the beneficial owners of the notes, and we and the trustee may
conclusively rely on and will be protected in relying on instructions from DTC
or its nominee for all purposes.
Transfers between participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in
same-day
funds.
DTC has advised us that it will take any action permitted to be taken by a
holder ofnotes only at the direction of one or more participants to whose
account DTC has credited the interests in the Global Notes and only in respect
of such portion of the aggregate principal amount of the notes as to which
such participant orparticipants has or have given such direction. However, if
there is an event of default under the notes, DTC reserves the right to
exchange the Global Notes for definitive notes in registered certificated form
("Certificated Notes"), andto distribute such notes to its participants.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers ofinterests in the Global Notes among participants, it is under no
obligation to perform such procedures, and such procedures may be discontinued
or changed at any time. Neither we, the trustee nor any agent of us or the
trustee will have anyresponsibility or liability for or relating to the
performance by DTC or its participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
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Exchange of Global Notes for Certificated Notes
A Global Note is exchangeable for Certificated Notes if:
(1) DTC (A) notifies us that it is unwilling or unable to continue as depositary for the Global Notes or(B) has ceased to
be a clearing agency registered under the Exchange Act and, in each case, a successor depositary is not appointed;
(2) we, at our option, notify the trustee in writing that we elect to cause the issuance of the Certificated Notes;or
(3) there has occurred and is continuing an event of default with respect to the notes.
In all cases, Certificated Notes delivered in exchange for any Global Note or
beneficial interests in Global Notes will be registered in thenames, and
issued in any approved denominations, requested by or on behalf of the
depositary (in accordance with its customary procedures). In connection with
any proposed exchange of a Certificated Note for a Global Note, we or DTC
shall berequired to provide or cause to be provided to the trustee all
information necessary to allow the trustee to comply with any applicable tax
reporting obligations, including without limitation any cost basis reporting
obligations underSection 6045 of the Code. The trustee may rely conclusively
on information provided to it and shall have no responsibility to verify or
ensure the accuracy of such information.
Same-Day
Settlement and Payment
We will make payments in respect of the notes represented by the Global Notes
(including principal, premium, if any, and interest, if any) bywire transfer
of immediately available funds to the accounts specified by the Global Note
holder. We will make all payments of principal, interest and premium, if any,
with respect to Certificated Notes by wire transfer of immediately
availablefunds to the accounts specified by the holders of the Certificated
Notes or, if no such account is specified, by mailing a check to each such
holder's registered address. The notes represented by the Global Notes are
expected to be eligible totrade in DTC's
Same-Day
Funds Settlement System, and any permitted secondary market trading activity
in such notes will, therefore, be required by DTC to be settled in immediately
available funds. Weexpect that secondary trading in any Certificated Notes
will also be settled in immediately available funds.
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CERTAIN U.S. FEDERAL INCOME TAX AND IRELAND TAXCONSIDERATIONS
United States
The following discussion summarizes certain U.S. federal income tax
considerations that may be relevant to the acquisition, ownership
anddisposition of the notes. This discussion is based upon the provisions of
the Code, applicable U.S. Treasury Regulations promulgated thereunder,
judicial authority and administrative interpretations, as of the date of this
document, all of which aresubject to change, possibly with retroactive effect,
or are subject to different interpretations. We cannot assure you that the
Internal Revenue Service ("IRS") will not challenge one or more of the tax
consequences described in thisdiscussion, and we have not obtained, nor do we
intend to obtain, a ruling from the IRS or an opinion of counsel regarding the
tax consequences of acquiring, owning or disposing of the notes.
This discussion is limited to holders who purchase the notes in this offering
for cash at the "issue price" of the notes(
i.e.
, the first price at which a substantial amount of the notes is sold for cash
other than to bond houses, brokers or similar persons or organizations acting
in the capacity of underwriters, placement agents or wholesalers) and who
holdthe notes as "capital assets" within the meaning of Section 1221 of the
Code (generally, property held for investment). In addition, this discussion
does not address any state, local or
non-U.S.
taxation, or any taxes other than income taxes, and does not address all tax
considerations that may be important to a particular holder in light of the
holder's circumstances, or to certain categories of investors that may be
subject tospecial rules, such as:
. persons that hold any of our outstanding borrowings under the Existing Notes or the Credit
Facilities that arerepaid (in whole or in part) with the proceeds of this offering, if any;
. dealers in securities;
. traders in securities that have elected the
mark-to-market
method of accounting for their securities;
. U.S. holders (as defined below) whose functional currency is not the U.S. dollar;
. U.S. holders who hold notes through
non-U.S.
brokers or other
non-U.S.
intermediaries;
. persons holding notes as part of a hedge, straddle, conversion or other "synthetic security" orintegrated transaction;
. former U.S. citizens or long-term residents of the United States;
. financial institutions;
. insurance companies;
. regulated investment companies;
. real estate investment trusts;
. persons subject to the alternative minimum tax;
. accrual basis taxpayers subject to special tax accounting rules under Section 451(b) of the Code;
. entities that are
tax-exempt
for U.S. federal income tax purposes; and
. partnerships and other pass-through entities and holders of interests therein.
If an entity or arrangement treated as a partnership for U.S. federal income
tax purposes holds notes, the U.S. federal income tax treatmentof a partner of
the partnership generally will depend upon the status of the partner and the
activities of the partnership and upon certain determinations made at the
partner level. If you are a partner of a partnership considering an investment
inthe notes, you are urged to consult your own tax advisor about the U.S.
federal income tax consequences of acquiring, holding owning and disposing of
the notes.
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INVESTORS CONSIDERING THE PURCHASE OF THE NOTES ARE URGED TO CONSULT THEIR OWN
TAXADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO
THEIR PARTICULAR SITUATION AS WELL AS ANY TAX CONSEQUENCES OF THE PURCHASE,
ACQUISITION, OWNERSHIP AND DISPOSITION OF THE NOTES UNDER OTHER U.S. FEDERAL
TAX LAWS OR UNDER THELAWS OF ANY STATE, LOCAL OR
NON-U.S.
JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.
In certain circumstances (see "Description of the Notes--Optional Redemption"
and "Description of the Notes--Change ofControl Repurchase Event"), we may be
obligated to pay amounts on the notes that are in excess of stated interest or
principal, or prior to their scheduled payment dates. These potential payments
may implicate the provisions of the U.S.Treasury Regulations relating to
"contingent payment debt instruments." We do not intend to treat the
possibility of paying such additional amounts as causing the notes to be
treated as contingent payment debt instruments. Our position isbinding on a
holder unless such holder discloses its contrary position to the IRS in the
manner required by applicable Treasury Regulations. Our position is not,
however, binding on the IRS. It is possible that the IRS may take a different
position,in which case, if such position is sustained, a holder might be
required to accrue ordinary interest income at a higher rate than the stated
interest rate, and to treat as ordinary income (rather than capital gain) any
gain realized on the taxabledisposition of the notes. The remainder of this
discussion assumes that the notes will not be treated as contingent payment
debt instruments.
YOU ARE ENCOURAGED TO CONSULT YOUR OWN TAX ADVISOR REGARDING THE POSSIBLE
APPLICATION OF THE CONTINGENT PAYMENT DEBT INSTRUMENT RULES TOTHE NOTES.
Tax consequences to U.S. holders
The following summary will apply to you if you are a U.S. holder of the notes.
You are a "U.S. holder" for purposes of thisdiscussion if you are a beneficial
owner of a note and you are for U.S. federal income tax purposes:
. an individual who is a U.S. citizen or U.S. resident alien;
. a corporation that was created or organized in or under the laws of
the United States, any state thereof or theDistrict of Columbia;
. an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
. a trust (1) if a court within the United States is able to exercise primary supervision over
theadministration of the trust and one or more United States persons have the authority
to control all substantial decisions of the trust, or (2) that has a valid election in
effect under applicable U.S. Treasury Regulations to be treated as aUnited States person.
Interest on the notes
It is anticipated, and this discussion assumes, that the issue price of the
notes will be equal to the stated principal amount, or if the issueprice is
less than the stated principal amount, the difference will be a de minimis
amount (generally, 0.25% of the stated principal amount multiplied by the
number of complete years to maturity). In general, however, if the notes are
issued withmore than de minimis original issue discount, a U.S. holder will be
required to include original issue discount in gross income, as ordinary
income.
The gross amount of stated interest on a note will generally be taxable to you
as ordinary income at the time it is paid or accrued inaccordance with your
regular method of accounting for U.S. federal income tax purposes.
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Disposition of the notes
You generally will recognize gain or loss on the sale, redemption, exchange,
retirement or other taxable disposition of a note equal to thedifference, if
any, between the proceeds you receive (excluding any proceeds attributable to
accrued but unpaid interest, which will be taxable as ordinary interest income
to the extent you have not previously included such amounts in income) andyour
adjusted tax basis in the note. The proceeds you receive will include the
amount of any cash and the fair market value of any other property received
for the note. Your adjusted tax basis in the note will generally equal the
amount you paid forthe note. Any gain or loss will be long-term capital gain
or loss if you held the note for more than one year at the time of the sale,
redemption, exchange, retirement or other taxable disposition. Otherwise, such
gain or loss will be short-termcapital gain or loss. Long-term capital gains
of individuals, estates and trusts currently are eligible for reduced rates of
U.S. federal income tax. The deductibility of capital losses may be subject to
limitation.
Information reporting and backup withholding
Information reporting generally will apply to payments of interest on, and the
proceeds of the sale or other disposition (including aredemption, exchange or
retirement) of, notes held by you, and backup withholding generally will apply
to such payments unless you certify under penalties of perjury as to your
status as a United States person, as well as certain other information,or
otherwise establish an exemption from backup withholding.
Backup withholding is not an additional tax. Any amount withheld under
thebackup withholding rules is allowable as a credit against your U.S. federal
income tax liability, if any, and a refund may be obtained from the IRS if the
amounts withheld exceed your actual U.S. federal income tax liability and you
timely providethe required information or appropriate claim form to the IRS.
Tax consequences to
non-U.S.
holders
The following summary will apply to you if you are a
non-U.S.
holder of notes. You are a
"non-U.S.
holder" for purposes of this discussion if you are a beneficial owner of notes
that is, for U.S. federal income tax purposes, an individual, corporation,
estate or trust that is not a U.S.holder.
Interest on the notes
Subject to the discussions of backup withholding and FATCA (as defined below)
withholding below, payments to you of interest on the notesgenerally will not
be subject to U.S. federal income tax and will be exempt from withholding of
U.S. federal income tax under the "portfolio interest" exemption if you
properly certify as to your foreign status, as described below, and:
. you do not own, actually or constructively, 10% or more of the total
combined voting power of all classes of ourstock entitled to vote;
. you are not a "controlled foreign corporation" that is related to us (actually or constructively);
. you are not a bank whose receipt of interest on the notes is in connection with an extension of credit
madepursuant to a loan agreement entered into in the ordinary course of your trade or business; and
. interest on the notes is not effectively connected with your conduct
of a U.S. trade or business (or, if requiredby an applicable
income tax treaty, such gain is not attributable to a permanent
establishment in the United States that you maintain).
The portfolio interest exemption generally applies only if you appropriately
certify as to your foreign status. You can generally meet thecertification
requirement by providing a properly executed IRS Form
W-8BEN
or IRS Form
W-8BEN-E
(or other applicable or successorform) to the applicable withholding agent. If
you hold the notes through a financial institution or other agent acting on
your behalf, you may be required to provide
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appropriate certifications to the agent. Your agent will then generally be
required to provide appropriate certifications to the applicable withholding
agent, either directly or through otherintermediaries. Special rules apply to
foreign partnerships, estates and trusts, and in certain circumstances
certifications as to the foreign status of partners, trust owners or
beneficiaries may have to be provided to the withholding agent. Inaddition,
special rules apply to qualified intermediaries that enter into withholding
agreements with the IRS.
If you cannot satisfy therequirements described above, payments of interest
made to you will be subject to U.S. federal withholding tax at a 30% rate,
unless you provide the applicable withholding agent with a properly executed
IRS Form
W-8BEN
or IRS Form
W-8BEN-E
(or other applicable or successor form) claiming an exemption from (or a
reduction of) withholdingunder the benefits of an income tax treaty, or an IRS
Form W-8ECI
(or applicable successor form) certifying that the payments of interest are
effectively connected with your conduct of a trade or businessin the United
States. (See "--Income or gain effectively connected with a U.S. trade or
business.")
The certificationsdescribed above and below must be provided to the applicable
withholding agent prior to the payment of interest and may be required to be
updated periodically. If you do not timely provide the applicable withholding
agent with the requiredcertification, but you qualify for a reduced rate of
withholding under an applicable income tax treaty, you may obtain a refund of
any excess amounts withheld if you timely provide the required information or
appropriate claim form to the IRS.
Disposition of the notes
Subject to thediscussions of backup withholding and FATCA (as defined below)
withholding below, you generally will not be subject to U.S. federal income
tax on any gain realized on the sale, redemption, exchange, retirement or
other taxable disposition of a note(such amount excludes any amount allocable
to accrued and unpaid interest, which generally will be treated as interest
and will be subject to the rules discussed above in "--Interest on the notes")
unless:
. the gain is effectively connected with the conduct by you of a U.S. trade or business (and, if required by anapplicable
income tax treaty, you maintain a permanent establishment in the United States to which such gain is attributable); or
. you are a
non-resident
alien individual who has been present in theUnited States for 183 days or more
in the taxable year of disposition and certain other requirements are met.
If yourgain is described in the first bullet point above, you generally will
be subject to U.S. federal income tax in the manner described under "--Income
or gain effectively connected with a U.S. trade or business." If you are a
non-U.S.
holder described in the second bullet point above, a flat 30% rate (or lower
applicable income tax treaty rate) generally will apply to the gain derived
from the sale or other disposition, which may beoffset by U.S. source capital
losses, provided that you timely file U.S. federal income tax returns with
respect to such losses.
Income or gaineffectively connected with a U.S. trade or business
If any interest on the notes or gain from the sale, exchange or other
taxabledisposition of the notes is effectively connected with the conduct by
you of a U.S. trade or business conducted (and, if required by an applicable
income tax treaty, you maintain a permanent establishment in the United States
to which such gain isattributable), then the interest income or gain will be
subject to U.S. federal income tax at regular graduated income tax rates
generally in the same manner as if you were a U.S. holder, unless an exemption
applies under an applicable income taxtreaty. Effectively connected interest
income will not be subject to U.S. federal withholding tax if you satisfy
certain certification requirements by providing to the applicable withholding
agent a properly executed IRS Form
W-8ECI,
or successor form. In addition, a corporate holder may also be subject to a
"branch profits tax" at a 30% rate on its effectively connected earnings and
profits that are not reinvested in theUnited States, unless an applicable
income tax treaty provides for a lower rate.
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Information reporting and backup withholding
Payments to you of interest on a note, and amounts withheld from such
payments, if any, generally will be required to be reported to the IRSand to
you. Copies of the information returns reporting such interest payments and
withholding may also be made available to the tax authorities of the country
in which you reside or are established under the provisions of a specific
treaty oragreement.
Backup withholding generally will not apply to payments to you of interest on
a note if the certification described in"--Interest on the notes" is duly
provided or you otherwise establish an exemption, provided that the applicable
withholding agent does not have actual knowledge or reason to know that you
are a United States person.
Proceeds from the disposition of a note effected by the U.S. office of a U.S.
or foreign broker will be subject to information reportingrequirements and
backup withholding unless you properly certify under penalties of perjury as
to your foreign status on IRS Form
W-8BEN
or IRS Form
W-8BEN-E
(or other applicable or successor form) and certain other conditions are met
or you otherwise establish an exemption. Information reporting requirements
and backup withholding generally will notapply to any proceeds from the
disposition of a note effected outside the United States by a foreign office
of a broker. However, unless such a broker has documentary evidence in its
records that you are not a United States person and certain otherconditions
are met, or you otherwise establish an exemption, information reporting will
apply to a payment of the proceeds of the disposition of a note effected
outside the United States by such a broker if it has certain relationships
with theUnited States.
Backup withholding is not an additional tax. Any amount withheld is allowable
as a credit against your U.S. federal incometax liability, if any, and a
refund may be obtained from the IRS if the amounts withheld exceed your actual
U.S. federal income tax liability and you timely provide the required
information or appropriate claim form to the IRS.
Withholding on payments to certain foreign entities
Sections 1471 through 1474 of the Code and the U.S. Treasury regulations and
administrative guidance issued thereunder (referred to as"FATCA") impose a 30%
U.S. federal withholding tax on payments of interest on the notes and, subject
to the proposed U.S. Treasury regulations discussed below, on the gross
proceeds from the sale or other disposition of the notes, if paidto a "foreign
financial institution" or a
"non-financial
foreign entity" (each as defined in the Code) (including, in some cases, when
such foreign financial institution or
non-financial
foreign entity is acting as an intermediary), unless: (i) in the case of a
foreign financial institution, such institution enters into an agreement with
the U.S. government to withhold on certainpayments, and to collect and provide
to the U.S. tax authorities substantial information regarding U.S. account
holders of such institution (which includes certain equity and debt holders of
such institution, as well as certain account holders thatare foreign entities
with U.S. owners); (ii) in the case of a
non-financial
foreign entity, such entity certifies that it does not have any "substantial
United States owners" (as defined in the Code)or provides the withholding
agent with a certification identifying its direct and indirect substantial
United States owners (generally by providing an IRS Form
W-8BEN-E);
or (iii) the foreign financial institution or
non-financial
foreign entity otherwise qualifies for an exemptionfrom these rules and
provides appropriate documentation (such as an IRS Form
W-8BEN-E).
Foreign financial institutions located in jurisdictions that have
anintergovernmental agreement with the United States with respect to these
rules may be subject to different rules. Under certain circumstances, a
beneficial owner of notes might be eligible for refunds or credits of such
taxes.
The FATCA withholding tax will apply to all "withholdable payments" without
regard to whether the beneficial owner of the paymentwould otherwise be
entitled to an exemption from imposition of general U.S. withholding tax
pursuant to an applicable income tax treaty with the United States or U.S.
domestic law. The U.S. Department of the Treasury has released proposedregulatio
ns which, if finalized in their present form,
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would eliminate the U.S. federal withholding tax applicable to the gross
proceeds of a sale or disposition of debt instruments. In its preamble to the
proposed regulations, the U.S. Treasurystated that taxpayers may generally
rely on the proposed regulations until final regulations are issued.
Prospective investors shouldconsult their tax advisors regarding the potential
application of withholding under FATCA to their investment in the notes.
THEPRECEDING DISCUSSION OF CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS IS
FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. WE URGE YOU TO CONSULT
YOUR OWN TAX ADVISOR REGARDING THE PARTICULAR U.S. FEDERAL, STATE, LOCAL AND
NON-U.S.
TAX CONSEQUENCES OF ACQUIRING, OWNING AND DISPOSING OF ISSUER'S NOTES.
Ireland
The following is a summary, based on the laws and practices currently in force
in Ireland, of certain matters regarding the taxposition of investors who are
the absolute beneficial owners of the notes and who are not associated with
the issuer, the guarantor or their subsidiaries and affiliates (otherwise than
by virtue of holding the notes) and should be treated withappropriate caution.
Particular rules may apply to certain classes of taxpayers holding notes
including dealers in securities and trusts. The summary does not constitute
tax or legal advice and the comments below are of a general nature
only.Investors should consult their professional advisers on the tax
implications of the purchase, holding, redemption or sale of the notes and the
receipt of interest thereon under the laws of their country of residence,
citizenship or domicile.
Withholding Tax
Tax at thestandard rate of income tax (currently 20%) is required to be
withheld from payments of Irish source interest. An issuer of notes will not
be obliged to withhold tax from
payments of interest and premium (if any) on the notes so long as suchpayments
do not constitute Irish source income. Interest and any premium paid on the
notes may be treated as having an Irish source if:
. the issuer is resident in Ireland for tax purposes;
. the issuer has a branch or permanent establishment in Ireland, the
assets or income of which are used to fund thepayment on the notes; or
. the issuer is not resident in Ireland for tax purposes but the register for the notes is maintained
in Ireland or(if the notes are in bearer form) the notes are physically held in Ireland.
The issuer confirms that it is not and willnot be resident in Ireland for tax
purposes and that it will not maintain a register of any registered notes in
Ireland. If the guarantor were to make payments under the guarantee, it is
possible that such payments could be treated as having anIrish source, in
which case tax at the standard rate of income tax (currently 20%) could be
required to be withheld from such payments. We expect that, if such
withholding were required, Additional Amounts would be due on such payments.
Interest paid on a quoted Eurobond
The guarantor will not be obliged to make a withholding or deduction for or on
account of Irish income tax from a payment of interest on a noteissued by the
issuer where:
. the notes are quoted Eurobonds (i.e., securities which are issued by a company which are listed
on a recognisedstock exchange (e.g., such as the NYSE) and which carry a right to interest); and
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. the person by or through whom the payment is made is not in Ireland, or if such person is in Ireland, either:
(a) the notes are held in a clearing system recognised by the Irish Revenue
Commissioners (e.g., DTC are, amongstothers, so recognised); or
(b) the person who is the beneficial owner of the note and who is beneficially entitled to the interest is notresident in
Ireland and has made a declaration to a relevant person (such as a paying agent located in Ireland) in the prescribed form.
Thus, so long as the notes are quoted on the NYSE and held in DTC, interest on
the notes can be paid by any paying agent acting on behalf ofthe guarantor
free of any withholding or deduction for or on account of Irish income tax. If
the notes are quoted but cease to be held in a recognised clearing system,
interest on the notes may be paid without any withholding or deduction for or
onaccount of Irish income tax, provided such payment is made through a paying
agent outside Ireland.
Encashment Tax
Irish tax will be required to be withheld at a rate of 25% from interest on
any note issued by the issuer, where such interest is collected orrealised by
a bank or encashment agent in Ireland on behalf of any noteholder. There is an
exemption from encashment tax where (i) the beneficial owner of the interest
is not resident in Ireland and has made a declaration to this effect in
theprescribed form to the encashment agent or bank, or (ii) the beneficial
owner of the interest is a company which is within the charge to Irish
corporation tax in respect of the interest.
Stamp Duty
As the issuer is notregistered in Ireland, stamp duty will not arise on a
document effecting a transfer of the notes so long as (i) the notes do not
derive their value or the greater part of their value directly or indirectly
from any
non-residential
immovable property situated in Ireland, and (ii) the instrument of transfer of
the notes does not relate to:
. any immoveable property in Ireland or any right over or interest in such property; or
. stocks or marketable securities of a company registered in Ireland.
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CERTAIN ERISA CONSIDERATIONS
The following is a summary of certain considerations associated with the
acquisition and holding of the notes by (i) employee benefitplans that are
subject to Title I of the U.S. Employee Retirement Income Security Act of
1974, as amended ("ERISA"), (ii) plans, individual retirement accounts
("IRAs") and other arrangements that are subject to Section 4975of the Code,
or provisions under any other federal, state, local,
non-U.S.
or other laws or regulations that are similar to Title I of ERISA or Section
4975 of the Code (collectively, "SimilarLaws"), and (iii) entities and
accounts whose underlying assets are considered to include "plan assets" of
any such plan, account or arrangement (each, a "Plan").
General Fiduciary Matters
ERISA andSection 4975 of the Code impose certain duties on persons who are
fiduciaries of a Plan subject to Title I of ERISA or Section 4975 of the Code
(each, an "ERISA Plan") and prohibit certain transactions involving the assets
of anERISA Plan and its fiduciaries or other interested parties. Under ERISA
and Section 4975 of the Code, any person who exercises any discretionary
authority or control over the management or administration of such an ERISA
Plan or the managementor disposition of the assets of such an ERISA Plan, or
who renders investment advice for a fee or other compensation to such an ERISA
Plan, is generally considered to be a fiduciary of the ERISA Plan.
In considering an investment of a portion of the assets of any Plan in the
notes, a fiduciary should determine whether the investment is inaccordance
with the documents and instruments governing the Plan and the applicable
provisions of ERISA, the Code or any Similar Laws relating to a fiduciary's
duties to the Plan including, without limitation, the prudence, diversification,
delegation of control and prohibited transaction provisions of ERISA, the Code
and any other applicable Similar Laws.
Each Plan shouldconsider the fact that none of the issuer, underwriters or
guarantor, or any of their respective affiliates (collectively, the
"Transaction Parties") is acting, or will act, as a fiduciary to any Plan with
respect to the decision toacquire or hold the notes and is not undertaking to
provide any advice or recommendation, including, without limitation, in a
fiduciary capacity, with respect to such decision. The decision to acquire the
notes must be made solely by eachprospective Plan on an arm's length basis.
Prohibited Transaction Issues
Section 406 of ERISA and Section 4975 of the Code prohibit ERISA Plans from
engaging in specified transactions involving "planassets" with persons or
entities who are "parties in interest," within the meaning of ERISA, or
"disqualified persons," within the meaning of Section 4975 of the Code, unless
an exemption is available. The fiduciary ofa Plan that proposes to acquire and
hold any of the notes with the assets of such Plan should consider, among
other things, whether such acquisition and holding may constitute or result in
a direct or indirect prohibited transaction with a party ininterest or
disqualified person with respect to such Plan, and if so, whether exemptive
relief may be available. Such parties in interest or disqualified persons
could include, without limitation, the issuer, the underwriters or any of
theirrespective affiliates.
A party in interest or disqualified person who engages in a
non-exempt
prohibited transaction may be subject to excise taxes and other penalties and
liabilities under ERISA and/or the Code. In addition, the fiduciary of the
ERISA Plan that engages in such a
non-exempt
prohibitedtransaction may be subject to penalties and liabilities under ERISA
and/or the Code. The acquisition and/or holding of the notes by an ERISA Plan
with respect to which a Transaction Party is considered a party in interest or
a disqualified personmay constitute or result in a direct or indirect
prohibited transaction in violation of Section 406 of ERISA and/or Section
4975 of the Code, unless the notes are acquired and held in accordance with an
applicable statutory, class orindividual prohibited transaction exemption.
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The U.S. Department of Labor has issued prohibited transaction class
exemptions, or"PTCEs," that may provide exemptive relief for direct or
indirect prohibited transactions resulting from the acquisition or holding of
the notes. These class exemptions include, without limitation, PTCE
84-14
respecting transactions determined by independent qualified professional asset
managers, PTCE
90-1
respecting insurance company pooled separate accounts, PTCE
91-38
respecting bank collective investment funds, PTCE
95-60
respecting insurance company general accounts, and PTCE
96-23
respectingtransactions determined by
in-house
asset managers. Additionally, Section 408(b)(17) of ERISA and Section
4975(d)(20) of the Code provide a statutory exemption for certain transactions
between a Planand certain
non-fiduciary
service providers or their affiliates, provided that the Plan neither receives
less than nor pays more than "adequate consideration" in connection with such
transaction.Each of the above-noted exemptions contains conditions and
limitations on its application. Fiduciaries of ERISA Plans considering
acquiring and/or holding the notes in reliance on these or any other exemption
should carefully review such exemptionto assure its applicability. There can
be no assurance that all of the conditions of any such exemptions will be
satisfied. Even if the conditions specified in one or more exemptions are met,
the scope of the relief provided by an exemption may notcover all acts which
might be construed as prohibited transactions.
Governmental plans,
non-U.S.
plans and certain church plans, while not subject to fiduciary responsibility
provisions of ERISA or the prohibited transaction provisions of ERISA and
Section 4975 of the Code, may nevertheless be subject to Similar Laws. Any
fiduciary of agovernmental,
non-U.S.
or such a church plan considering an acquisition of the notes should consult
with its counsel before acquiring the notes to consider the applicable
fiduciary standards and to determinethe need for, and, if necessary, the
availability of, any exemptive relief under any applicable Similar Laws.
Because of the foregoing,the notes should not be acquired or held by any Plan,
unless such acquisition and holding will not constitute or result in a
non-exempt
prohibited transaction under ERISA and/or Section 4975 of the Codeor a
violation of any applicable Similar Laws.
Representation
Accordingly, by the acquisition and holding of a note, or any interest
therein, each person who authorizes such acquisition and holding andeach
subsequent transferee will be deemed to have represented and warranted that
either (i) no portion of the assets used to acquire or hold the note, or any
interest therein, constitutes assets of any Plan or (ii) the acquisition
andholding of the notes by such purchaser or transferee will not constitute or
result in a
non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code
or a violation underany applicable Similar Laws, and none of the Transaction
Parties is a fiduciary to such purchaser or transferee in connection with such
acquisition and holding of the notes.
The foregoing discussion is general in nature and is not intended to be
all-inclusive.
It is notintended to be a complete discussion, nor is it to be construed as
legal advice or a legal opinion. Due to the complexity of these rules and the
penalties that may be imposed upon persons involved in
non-exempt
prohibited transactions or violations of Similar Laws, it is particularly
important that fiduciaries, or other persons considering acquiring the notes
(and holding the notes) on behalf of, or withthe assets of, any Plan, consult
with their counsel regarding the potential applicability of ERISA, Section
4975 of the Code and any Similar Laws to such acquisition and holding of the
notes and whether an exemption would be applicable to suchacquisition and
holding of the notes.
Purchasers of the notes have the exclusive responsibility for ensuring that
their purchase andholding of the notes complies with the fiduciary
responsibility rules of ERISA and does not violate the prohibited transaction
rules of ERISA, Section 4975 of the Code or applicable Similar Laws. We make
no representation as to whether aninvestment in the notes is appropriate for
any Plan in general or whether such investment is appropriate for any
particular plan or arrangement.
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UNDERWRITING
We are offering the notes described in this prospectus supplement and the
accompanying prospectus through a number of underwriters. BofASecurities,
Inc., Citigroup Global Markets Inc. and Wells Fargo Securities, LLC are acting
as joint active bookrunners of the offering and as representatives of the
underwriters. We will enter into an underwriting agreement with the
underwriters.Subject to the terms and conditions of the underwriting
agreement, we will agree to sell to the underwriters, and each underwriter
will severally and not jointly agree to purchase, at the initial public
offering price less the underwriting discountsset forth on the cover page of
this prospectus supplement, the principal amount of notes listed next to its
name in the following table:
Underwriter Principal Amount
of notes
BofA Securities, Inc. $ 80,000,000
Citigroup Global Markets Inc. 80,000,000
Wells Fargo Securities, LLC 80,000,000
Goldman Sachs & Co. LLC 32,000,000
J.P. Morgan Securities LLC 32,000,000
PNC Capital Markets LLC 32,000,000
BNP Paribas Securities Corp. 16,000,000
Huntington Securities, Inc. 16,000,000
TD Securities (USA) LLC 16,000,000
U.S. Bancorp Investments, Inc. 16,000,000
Total $ 400,000,000
The underwriters will be committed to purchase all the notes offered by us if
they purchase any notes. Theunderwriting agreement will also provide that if
an underwriter defaults, the purchase commitments of
non-defaulting
underwriters may also be increased or the offering may be terminated.
The underwriters propose to offer the notes directly to the public at the
initial public offering price set forth on the cover page of thisprospectus
supplement and to certain dealers at that price less a concession not in
excess of 0.400% of the principal amount of the notes. The underwriters may
allow, and any such dealers may reallow, a concession not in excess of 0.250%
of theprincipal amount of the notes to certain other brokers or dealers. After
the initial public offering of the notes, the offering price and other selling
terms may be changed by the underwriters. Sales of the notes made outside of
the United Statesmay be made by affiliates of the underwriters. The offering
of the notes by the underwriters is subject to receipt and acceptance and
subject to the underwriters' right to reject any order in whole or in part.
The underwriting fee is equal to the public offering price less the amount
paid by the underwriters to us for the notes. The following tableshows the
underwriting discount to be paid to the underwriters.
Paid by us
Per note 0.650 %
Total $ 2,600,000
We estimate that the total expenses of the offering, including registration,
filing and listing fees, printingfees and legal and accounting expenses, but
excluding the underwriting discount, will be approximately $2.1 million.
We will agreethat we will not, without the prior written consent of BofA
Securities, Inc., Citigroup Global Markets Inc. and Wells Fargo Securities,
LLC, during the period beginning on the date of this prospectus supplement and
continuing until the closing dateof this offering, offer, sell, contract to
sell, pledge, grant any option to purchase, make any short sale or otherwise
transfer or dispose of, directly or indirectly, or file with the
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SEC a registration statement under the Securities Act relating to any of our
securities that are substantially similar to the notes, or publicly disclose
the intention to make any such offer,sale, pledge, disposition or filing.
We will agree to indemnify the several underwriters against certain
liabilities, includingliabilities under the Securities Act.
The notes are new issues of securities, and there is currently no established
trading market forthe notes. We will use our reasonable best efforts to cause
the notes to be listed on the NYSE. If the notes are not listed on the NYSE we
intend to list the notes on another securities exchange. If such listing is
obtained, we will have noobligation to maintain such listing, and we may
delist the notes at any time. In addition, the underwriters have advised us
that they intend to make a market in the notes, but they are not obligated to
do so. The underwriters may discontinue anymarket-making in the notes at any
time in their sole discretion. Accordingly, we cannot assure you that a liquid
trading market will develop for the notes, that you will be able to sell your
notes at a particular time or that the prices you receivewhen you sell will be
favorable.
In connection with the offering, the underwriters may engage in overallotment,
stabilizing transactionsand syndicate covering transactions. Overallotment
involves sales in excess of the offering size, which creates a short position
for the underwriters. Stabilizing transactions involve bids to purchase the
notes in the open market for the purpose ofpegging, fixing or maintaining the
price of the notes. Syndicate covering transactions involve purchases of the
notes in the open market after the distribution has been completed in order to
cover short positions. Stabilizing transactions andsyndicate covering
transactions may cause the price of the notes to be higher than it would
otherwise be in the absence of those transactions. If the underwriters engage
in stabilizing or syndicate covering transactions, they may discontinue them
atany time.
We expect that delivery of the notes will be made against payment therefor on
or about May 29, 2024, which is the fifthbusiness day following the date of
pricing of the notes (this settlement cycle being referred to as "T+5"). Under
Rule
15c6-1
of the Exchange Act, trades in the secondary market generally arerequired to
settle in two business days, unless the parties to any such trade expressly
agree otherwise. Accordingly, purchasers who wish to trade notes on the date
of pricing or the four next succeeding business days will be required, by
virtue ofthe fact that the notes initially will settle in T+5, to specify an
alternate settlement cycle at the time of any such trade to prevent a failed
settlement and should consult their own advisors.
The underwriters and their respective affiliates are full service financial
institutions engaged in various activities, which may includesales and
trading, commercial and investment banking, advisory, investment management,
investment research, principal investment, hedging, market making, brokerage
and other financial and
non-financial
activities and services. Certain of the underwriters and their respective
affiliates have provided, and may in the future provide, a variety of these
services to us and to persons and entities with relationships to us, for which
they received orwill receive customary fees and expenses. For example, certain
of the underwriters and their respective affiliates are lenders or agents
under the Credit Facilities or acted as underwriters for the offering of the
Existing Notes. Additionally,certain of the underwriters hold Existing Notes
and may therefore receive proceeds from this offering in connection with the
repayment of the Existing Notes. If the underwriters or their respective
affiliates have a lending relationship with us,certain of those underwriters
and their respective affiliates routinely hedge, and certain other of the
underwriters and their respective affiliates may hedge, their credit exposure
to us consistent with their customary risk management policies.Typically,
these underwriters and their respective affiliates would hedge such exposure
by entering into transactions which consist of either the purchase of credit
default swaps or the creation of short positions in our securities or the
securitiesof our affiliates, which may include the notes offered hereby. Any
such credit default swaps or short positions could adversely affect future
trading prices of the notes offered hereby. In addition, U.S. Bancorp
Investments, Inc., one of theunderwriters, is an affiliate of the trustee and
paying agent.
In the ordinary course of their various business activities, theunderwriters
and their respective affiliates, officers, directors and employees may
purchase, sell or hold a broad array of investments and actively trade
securities, derivatives, loans, commodities, currencies, credit default swaps
and otherfinancial instruments for
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their own account and for the accounts of their customers, and such investment
and trading activities may involve or relate to assets, securities or
instruments of ours (directly, as collateralsecuring other obligations or
otherwise) or persons and entities with relationships with us. The
underwriters and their respective affiliates may also communicate independent
investment recommendations, market color or trading ideas and/or publishor
express independent research views in respect of such assets, securities or
instruments and may at any time hold, or recommend to clients that they should
acquire, long and/or short positions in such assets, securities and
instruments. Inaddition, from time to time, certain of the underwriters and
their respective affiliates may effect transactions for their own account or
the account of customers, and hold on behalf of themselves or their customers,
long and/or short positions inour debt or equity securities or loans, and may
do so in the future.
Selling Restrictions
Other than in the United States, no action has been taken by us or the
underwriters that would permit a public offering of the notes offered bythis
prospectus supplement and the accompanying prospectus in any jurisdiction
where action for that purpose is required. The notes offered by this
prospectus supplement and the accompanying prospectus may not be offered or
sold, directly orindirectly, nor may this prospectus supplement, the
accompanying prospectus, registration statement, free writing prospectus or
any other offering material or advertisement in connection with the offer and
sale of any such notes be distributed orpublished in any jurisdiction, except
under circumstances that will result in compliance with the applicable rules
and regulations of that jurisdiction. Persons into whose possession this
prospectus supplement and the accompanying prospectus comeare advised to
inform themselves about and to observe any restrictions relating to the
offering and the distribution of this prospectus supplement and the
accompanying prospectus. This prospectus supplement and the accompanying
prospectus do notconstitute an offer to sell or a solicitation of an offer to
buy any notes offered by this prospectus supplement and the accompanying
prospectus in any jurisdiction in which such offer or solicitation is unlawful.
Notice to Prospective Investors in the European Economic Area
The notes are not intended to be offered, sold or otherwise made available to
and should not be offered, sold or otherwise made available toany retail
investor in the European Economic Area ("EEA"). For these purposes, a retail
investor means a person who is one (or more) of: (i) a retail client as
defined in point (11) of Article 4(1) of Directive 2014/65/EU asamended
("MiFID II"); (ii) a customer within the meaning of Directive 2016/97/EU (as
amended), where that customer would not qualify as a professional client as
defined in point (10) of Article 4(1) of MiFID II; or (iii) not aqualified
investor as defined in Regulation 2017/1129 (EU) (as amended or superseded,
the "Prospectus Regulation").
Consequently, no key information document required by Regulation (EU) No
1286/2014 (as amended, the "PRIIPs Regulation") foroffering or selling the
notes or otherwise making them available to retail investors in the EEA has
been prepared and therefore offering or selling the notes or otherwise making
them available to any retail investor in the EEA may be unlawful underthe
PRIIPs Regulation. This prospectus supplement has been prepared on the basis
that any offer of notes in any Member State of the EEA will be made pursuant
to an exemption under the Prospectus Regulation from the requirement to
publish aprospectus for offers of notes. This prospectus supplement is not a
prospectus for the purposes of the Prospectus Regulation.
Notice to ProspectiveInvestors in the United Kingdom
The notes are not intended to be offered, sold or otherwise made available to
and should not beoffered, sold or otherwise made available to any retail
investor in the United Kingdom ("U.K."). For these purposes, a retail investor
means a person who is one (or more) of: (i) a retail client, as defined in
point (8) ofArticle 2 of Regulation (EU) No 2017/565 as it forms part of
domestic law by virtue of the European Union (Withdrawal) Act 2018 ("EUWA");
(ii) a customer within the meaning of the provisions of the Financial Services
and Markets Act 2000(as amended, "FSMA") and any rules or regulations made
under the FSMA to implement Directive
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(EU) 2016/97, where that customer would not qualify as a professional client,
as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it
forms part of domestic law byvirtue of the EUWA or (iii) not a qualified
investor as defined in Article 2 of Regulation (EU) 2017/1129 as it forms part
of domestic law by virtue of the EUWA (the "U.K. Prospectus Regulation").
Consequently, no key informationdocument required by Regulation (EU) No
1286/2014 as it forms part of domestic law by virtue of the EUWA (the "U.K.
PRIIPs Regulation") for offering or selling the notes or otherwise making them
available to retail investors in the U.K.has been prepared and therefore
offering or selling the notes or otherwise making them available to any retail
investor in the U.K. may be unlawful under the U.K. PRIIPs Regulation. This
prospectus supplement and the accompanying prospectus havebeen prepared on the
basis that any offer of notes in the UK will be made pursuant to an exemption
under the UK Prospectus Regulation and the FSMA from the requirement to
publish a prospectus for offers of notes. This prospectus supplement and
theaccompanying prospectus are to be considered not a prospectus for the
purposes of the UK Prospectus Regulation or the FSMA.
This documentis for distribution only to persons who (i) have professional
experience in matters relating to investments and who qualify as investment
professionals within the meaning of Article 19(5) of the Financial Services
and Markets Act 2000(Financial Promotion) Order 2005 (as amended, the
"Financial Promotion Order"), (ii) are persons falling within Article 49(2)(a)
to (d) ("high net worth companies, unincorporated associations etc.") of the
Financial PromotionOrder, (iii) are outside the United Kingdom, or (iv) are
persons to whom an invitation or inducement to engage in investment activity
(within the meaning of Section 21 of the FSMA) in connection with the issue or
sale of anysecurities may otherwise lawfully be communicated or caused to be
communicated (all such persons together being referred to as "relevant
persons"). This document is directed only at relevant persons and must not be
acted on or relied on bypersons who are not relevant persons. Any investment
or investment activity to which this document relates is available only to
relevant persons and will be engaged in only with relevant persons.
Notice to Prospective Investors in Ireland
The notes are not being offered or sold to any person, underwritten or placed
in Ireland except in conformity with the provisions of(a) the European Union
(Markets in Financial Instruments) Regulation, 2017 (as amended, the "MiFiD II
Regulations"), including Regulation 5 (Requirement for Authorisation (and
certain provisions concerning MTFs and OTFs)) thereof orany codes of conduct
made under the MiFiD II Regulations and the provisions of the Investor
Compensation Act 1998 (as amended); (b) the Companies Act, the Irish Central
Bank Acts 1942 to 2018 (as amended) and any codes of practice made
underSection 117(1) of the Central Bank Act 1989 (as amended); (c) the
Prospectus Regulation, the European Union (Prospectus) Regulations 2019 and
any rules and guidance issued by the Central Bank under Section 1363 of the
Companies Act; and(d) the Market Abuse Regulation (EU) 596/2014 (as amended),
the European Union (Market Abuse) Regulations 2016 (as amended) and any rules
and guidance issued by the Central Bank under Section 1370 of the Companies
Act.
Notice to Prospective Investors in Canada
The notes may be sold only to purchasers purchasing, or deemed to be
purchasing, as principal that are accredited investors, as defined inNational
Instrument
45-106
Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario),
and are permitted clients, as defined in National Instrument
31-103
Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any
resale of the notes must be made in accordance with an exemption from, or in a
transaction not subject to, the prospectusrequirements of applicable
securities laws.
Securities legislation in certain provinces or territories of Canada may
provide a purchaserwith remedies for rescission or damages if this prospectus
supplement (including any amendment thereto) and the accompanying prospectus
(including any amendment thereto) contains a misrepresentation, provided that
the remedies for
rescission or damages are exercised by the purchaser within the time limit
prescribed by the securities legislation
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of the purchaser's province or territory. The purchaser should refer to any
applicable provisions of the securities legislation of the purchaser's
province or territory for particularsof these rights or consult with a legal
advisor.
Pursuant to section 3A.3 of National Instrument
33-105
Underwriting Conflicts (NI
33-105),
the underwriters are not required to comply with the disclosure requirements
of NI
33-105
regarding underwriter conflicts of interest in connection with this offering.
Notice to ProspectiveInvestors in Hong Kong
Each underwriter (a) has not offered or sold and will not offer or sell in
Hong Kong, by means of anydocument, any notes other than (i) to "professional
investors" as defined in the Securities and Futures Ordinance (Cap. 571) of
Hong Kong (the "SFO") and any rules made under that Ordinance; or (ii) in
othercircumstances which do not result in the document being a "prospectus" as
defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance
(Cap. 32) of Hong Kong or which do not constitute an offer to the public
within themeaning of that Ordinance; and (b) it has not issued or had in its
possession for the purposes of issuance, and will not issue or have in its
possession for the purposes of issuance, whether in Hong Kong or elsewhere,
any advertisement,invitation or document relating to the notes, which is
directed at, or the contents of which are likely to be accessed or read by,
the public of Hong Kong (except if permitted to do so under the securities
laws of Hong Kong) other than with respectto the notes which are or are
intended to be disposed of only to persons outside Hong Kong or only to
"professional investors" as defined in the SFO and any rules made under that
Ordinance.
Notice to Prospective Investors in Japan
The notes have not been and will not be registered under the Financial
Instruments and Exchange Act. Accordingly, none of the notes nor anyinterest
therein may be offered or sold, directly or indirectly, in Japan or to, or for
the benefit of, any resident of Japan (which term as used herein means any
person resident in Japan, including any corporation or other entity organized
underthe laws of Japan), or to others for
re-offering
or resale, directly or indirectly, in Japan or to or for the benefit of a
resident of Japan, except pursuant to an exemption from the registration
requirementsof, and otherwise in compliance with, the Financial Instruments
and Exchange Act and any other applicable laws, regulations and ministerial
guidelines of Japan.
Notice to Prospective Investors in Singapore
This prospectus supplement and the accompanying prospectus have not been
registered as a prospectus with the Monetary Authority of Singapore.Accordingly,
each underwriter has not offered or sold any notes or caused such notes to be
made the subject of an invitation for subscription or purchase and will not
offer or sell such notes or cause such notes to be made the subject of
aninvitation for subscription or purchase, and has not circulated or
distributed, nor will it circulate or distribute, this prospectus supplement
or any other document or material in connection with the offer or sale, or
invitation for subscription orpurchase, of such notes, whether directly or
indirectly, to persons in Singapore other than (a) to an institutional
investor under Section 274 of the Securities and Futures Act, Chapter 289 of
Singapore (the "SFA"), (b) to arelevant person pursuant to Section 275(1), or
any person pursuant to Section 275(1A), and in accordance with the conditions
specified in Section 275, of the SFA, or (c) otherwise pursuant to, and in
accordance with theconditions of, any other applicable provision of the SFA.
Where the shares are subscribed or purchased under Section 275 of the SFAby a
relevant person which is:
(a) a corporation (which is not an accredited investor (as defined
in Section 4A of the SFA)) the solebusiness of which is to hold
investments and the entire share capital of which is owned by one
or more individuals, each of whom is an accredited investor; or
(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and
eachbeneficiary of the trust is an individual who is an accredited investor, securities (as defined in
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Section 239(1) of the SFA) of that corporation or the beneficiaries' rights
and interest (howsoever described) in that trust shall not be transferred
within six months after thatcorporation or that trust has acquired the
shares pursuant to an offer made under Section 275 of the SFA except:
(i) to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to
anyperson arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;
(ii) where no consideration is or will be given for the transfer;
(iii) where the transfer is by operation of law;
(iv) as specified in Section 276(7) of the SFA; or
(v) as specified in Regulation 32 of the Securities and Futures (Offers
of Investments) (Shares and Debentures)Regulations 2005 of Singapore.
Singapore SFA Product Classification
. Solely for the purposes of our obligationspursuant to Section 309B(1)(A) and
309B(1)(c) of the SFA, we have determined, and hereby notify all relevant
persons (as defined in Section 309A of the SFA) that the shares are
"prescribed capital markets products" (as defined inthe Securities and Futures
(Capital Markets Products) Regulations 2018) and Excluded Investment Products
(as defined in MAS Notice SFA
04-N12:
Notice on the Sale of Investment Products and MAS Notice
FAA-N16:Notice
on Recommendations on Investment Products).
Notice to Prospective Investors in Switzerland
This prospectus supplement is not intended to constitute an offer or
solicitation to purchase or invest in the notes describedherein. No notes have
been offered or will be offered to the public in Switzerland, except that
offers of notes may be made to the public in Switzerland at any time under the
following exemptions under the Swiss Financial Services Act("FinSA"):
(a) to any person which is a professional client as defined under the FinSA;
(b) to fewer than 500 persons (other than professional clients as defined under the
FinSA), subject to obtainingthe prior consent of lead manager for any such offer; or
(c) in any other circumstances falling within Article 36 FinSA in
connection with Article 44 of the Swiss FinancialServices Ordinance,
provided that no such offer of notes shall require the Company or any bank to
publish a prospectus pursuant toArticle 35 FinSA.
The notes have not been and will not be listed or admitted to trading on a
trading venue in Switzerland.
Neither this document nor any other offering or marketing material relating to
the notes constitutes a prospectus as such term is understoodpursuant to the
FinSA and neither this document nor any other offering or marketing material
relating to the notes may be publicly distributed or otherwise made publicly
available in Switzerland.
Notice to Prospective Investors in Australia
No placement document, prospectus, product disclosure statement or other
disclosure document (as defined in the Corporations Act 2001 (Cth)(the
"Corporations Act")) has been or will be lodged with the Australian Securities
and Investments Commission or any other governmental agency, in relation to
the offering. This prospectus supplement and the accompanying prospectus do
notconstitute a prospectus, product disclosure
statement or other disclosure document for the purposes of the Corporations
Act, and does not purport toinclude
the information required for a prospectus, product disclosure statement or
other disclosure document under the Corporations Act.
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Any offer in Australia of the notes may only be made to persons (the
"ExemptInvestors") who are "sophisticated investors" (within the meaning of
section 708(8) of the Corporations Act), "professional investors" (within the
meaning of section 708(11) of the Corporations Act) or otherwise pursuant
toone or more exemptions contained in section 708 of the Corporations Act so
that it is lawful to offer the notes without disclosure to investors under
Chapter 6D of the Corporations Act.
The notes applied for by Exempt Investors in Australia must not be offered for
sale in Australia in the period of 12 months after the date ofallotment under
the offering, except in circumstances where disclosure to investors under
Chapter 6D of the Corporations Act would not be required pursuant to an
exemption under section 708 of the Corporations Act or otherwise or where the
offer ispursuant to a disclosure document which complies with Chapter 6D of
the Corporations Act. Any person acquiring the notes must observe such
Australian
on-sale
restrictions. This prospectus supplement and theaccompanying prospectus
contain general information only and do not take account of the investment
objectives, financial situation or particular needs of any particular person.
It does not contain any securities recommendations or financial productadvice.
Before making an investment decision, investors need to consider whether the
information in this prospectus supplement and the accompanying prospectus is
appropriate to their needs, objectives and circumstances, and, if necessary,
seekexpert advice on those matters.
Notice to Prospective Investors in Taiwan
The notes have not been and will not be registered or filed with, or approved
by, the Financial Supervisory Commission of Taiwan and/or otherregulatory
authority of Taiwan pursuant to relevant securities laws and regulations and
may not be sold, issued or offered within Taiwan through a public offering or
in circumstances which constitute an offer within the meaning of the
Securities andExchange Act of Taiwan or relevant laws and regulations that
requires a registration, filing or approval of the Financial Supervisory
Commission of Taiwan and/or other regulatory authority of Taiwan. No person or
entity in Taiwan has been authorizedto offer or sell the notes in Taiwan.
Notice to Prospective Investors in the Dubai International Financial Centre
("DIFC")
This document relates to an Exempt Offer in accordance with the Markets Rules
2012 of the Dubai Financial Services Authority("DFSA"). This document is
intended for distribution only to persons of a type specified in the Markets
Rules 2012 of the DFSA. It must not be delivered to, or relied on by, any
other person. The DFSA has no responsibility for reviewing orverifying any
documents in connection with Exempt Offers. The DFSA has not approved this
prospectus supplement nor taken steps to verify the information set forth
herein and has no responsibility for this document. The securities to which
thisdocument relates may be illiquid and/or subject to restrictions on their
resale. Prospective purchasers of the securities offered should conduct their
own due diligence on the securities. If you do not understand the contents of
this document youshould consult an authorized financial advisor.
In relation to its use in the DIFC, this document is strictly private and
confidentialand is being distributed to a limited number of investors and must
not be provided to any person other than the original recipient, and may not
be reproduced or used for any other purpose. The interests in the securities
may not be offered or solddirectly or indirectly to the public in the DIFC.
Notice to Prospective Investors in the United Arab Emirates
The notes have not been, and are not being, publicly offered, sold, promoted
or advertised in the United Arab Emirates (including theDIFC) other than in
compliance with the laws of the United Arab Emirates (and the DIFC) governing
the issue, offering and sale of securities. Further, this prospectus
supplement and the accompanying prospectus do not constitute a public offer
ofsecurities in the United Arab Emirates (including the DIFC) and is not
intended to be a public offer. This prospectus supplement and accompanying
prospectus have not been approved by or filed with the Central Bank of the
United Arab Emirates, theSecurities and Commodities Authority or the Dubai
Financial Services Authority.
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LEGAL MATTERS
The validity of the issuance of the notes and the related guarantees will be
passed upon for us by Kirkland & Ellis LLP, Chicago,Illinois, with respect to
U.S. legal matters, and by Arthur Cox LLP, Ireland, special Irish counsel,
with respect to Irish legal matters. The underwriters have been represented by
Davis Polk & Wardwell LLP.
EXPERTS
The financial statements and management's assessment of the effectiveness of
internal control over financial reporting (which is includedin Management's
Report on Internal Control Over Financial Reporting) incorporated in this
prospectus supplement by reference to the Annual Report on Form
10-K
for the year ended December 31, 2023have been so incorporated in reliance on
the report of PricewaterhouseCoopers LLP, an independent registered public
accounting firm, given on the authority of said firm as experts in auditing
and accounting.
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SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES
Allegion has been advised by its Irish counsel, Arthur Cox LLP, that a
judgment for the payment of money rendered by a court in the UnitedStates
would not be automatically enforceable in Ireland. There is no treaty between
Ireland and the United States providing for the reciprocal enforcement of
foreign judgments. In order to enforce a monetary judgment obtained in the
United Statesin Ireland, separate proceedings have to be issued seeking an
Irish judgment in the terms of the U.S. judgment. A summary procedure is
available in circumstances where an applicant can establish that:
. the U.S. judgment is for a definite sum;
. the U.S. judgment is final and conclusive; and
. the U.S. judgment is of a court which, as a matter of Irish law, is of competent jurisdiction.
Even if the matters referred to above are established by an applicant, an
Irish court may on certain grounds refuse toenforce the U.S. judgment. These
grounds include:
. the U.S. judgment having being obtained by fraud;
. the U.S. judgment violating Irish public policy or constituting a judgement of a penal or revenue (tax) nature;
. the U.S. judgment being in breach of natural justice or constitutional justice under the laws of Ireland;
. the U.S. judgment being irreconcilable with an earlier judgment; or
. there being no practical benefit to the party in whose favor the U.S.
judgement is made in seeking to have thatjudgement enforced in Ireland.
It may be difficult for a securityholder to effect service of process within
the U.S. orto enforce judgments obtained against Allegion plc in U.S. courts.
Allegion plc has agreed that it may be served with process with respect to
actions based on offers and sales of securities made in the United States and
other violations of U.S.securities laws by having Allegion US Holding Company
Inc., a Delaware limited liability company and subsidiary of Allegion plc, be
its U.S. agent appointed for that purpose. Allegion US Holding Company Inc. is
located at 11819 North PennsylvaniaStreet, Carmel, Indiana 46032. A judgment
obtained against Allegion plc in a U.S. court would be enforceable in the
United States but could be executed upon only to the extent Allegion plc has
assets in the United States. An act that results inAllegion plc or its
respective directors or officers being in breach of the civil liability
provisions of U.S. law would not, by virtue of the breach of U.S. law, be
actionable before a court in Ireland, although such act may potentially give
riseto a cause of action under the local laws of Ireland.
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PROSPECTUS
Allegion plc
Debt Securities
Guarantees of Debt Securities
Ordinary Shares
Preferred Shares
Depositary Shares
SharePurchase Contracts
Share Purchase Units
Warrants
Allegion USHolding Company Inc.
Debt Securities
Guarantees of Debt Securities
We may offer,issue and sell the types of securities set forth above from time
to time, together or separately. This prospectus describes some of the general
terms that may apply to these securities. We will provide a prospectus
supplement each time we offer andissue any of these securities. The specific
terms of any securities to be offered will be described in the related
prospectus supplement. The prospectus supplement may also add, update or
change information contained in this prospectus. You shouldread this
prospectus and any applicable prospectus supplement carefully before making an
investment decision.
We may offer and sell thesesecurities to or through one or more underwriters,
dealers and agents, or directly to purchasers, on a continuous or delayed
basis. This prospectus may not be used to sell securities unless accompanied
by a prospectus supplement.
Our ordinary shares are listed on the New York Stock Exchange under the
trading symbol "ALLE."
INVESTING IN OUR SECURITIES INVOLVES RISK. PLEASE READ "
RISK FACTORS
" ON PAGE 4 OF THISPROSPECTUS AND THE RISK FACTORS INCLUDED IN OUR PERIODIC
REPORTS THAT WE FILE WITH THE SECURITIES AND EXCHANGE COMMISSION BEFORE YOU
INVEST IN OUR SECURITIES.
None of theSecurities and Exchange Commission, any state securities commission
or any other regulatory body has approved or disapproved of these securities
or passed upon the accuracy or adequacy of this prospectus. Any representation
to the contrary is acriminal offense.
March 28, 2024
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TABLE OF CONTENTS
ABOUT THIS PROSPECTUS 1
WHERE YOU CAN FIND MORE INFORMATION 1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 1
PROSPECTUS SUMMARY 3
RISK FACTORS 4
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 4
USE OF PROCEEDS 5
DESCRIPTION OF THE DEBT SECURITIES 6
DESCRIPTION OF WARRANTS 21
DESCRIPTION OF ALLEGION PLC SHARE CAPITAL 22
DESCRIPTION OF DEPOSITARY SHARES 37
DESCRIPTION OF SHARE PURCHASE CONTRACTS AND SHARE PURCHASEUNITS 40
MATERIAL TAX CONSIDERATIONS 41
PLAN OF DISTRIBUTION 59
LEGAL MATTERS 60
EXPERTS 60
SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES 60
We have not authorized any person to provide you with information different
from that contained in or incorporated by reference into thisprospectus, any
amendment or supplement to this prospectus or in any free writing prospectus
prepared by us or on our behalf. We do not take any responsibility for, and
cannot provide any assurance as to the reliability of, any information
otherthan the information contained or incorporated by reference in this
prospectus, any amendment or supplement to this prospectus or in any free
writing prospectus prepared by us or on our behalf. This prospectus and any
prospectus supplement does notconstitute an offer to sell, or a solicitation
of an offer to buy, any securities or related guarantee offered by this
prospectus and any prospectus supplement by any person in any jurisdiction in
which it is unlawful for such person to make such anoffer or solicitation.
Neither the delivery of this prospectus, any prospectus supplement, nor any
sale made under it implies that there has been no change in our affairs or
that the information in this prospectus and any prospectus supplement
iscorrect as of any date after the date of this prospectus and any prospectus
supplement.
This document does not constitute aprospectus within the meaning of section
1348 of the Companies Act 2014 of Ireland (as amended). No offer of securities
of Allegion plc to the public is made, or will be made, that requires the
publication of a prospectus pursuant to Irishprospectus law (within the
meaning of section 1348 of the Companies Act 2014 of Ireland (as amended)) in
general, or in particular pursuant to the Prospectus Regulation (EU) 2017/1129
of 14 June 2017 (as amended), the European Union(Prospectus) Regulations 2019
of Ireland (S.I. No. 380/2019), or the Central Bank (Investment Market
Conduct) Rules (S.I. No. 366 of 2019). This document has not been approved or
reviewed by or registered with the Central Bank of Ireland.
This document does not constitute investment advice or the provision of
investment services within the meaning of the European Union(Markets in
Financial Instruments) Regulations 2017 (S.I. No. 375 of 2017) (as amended) of
Ireland or otherwise. Allegion plc is not an authorized investment firm within
the meaning of the European Union (Markets in Financial Instruments)Regulations
2017 (S.I. No. 375 of 2017) (as amended) of Ireland, and the recipients of
this document should seek independent legal and financial advice in
determining their actions in respect of or pursuant to this document.
As used in this prospectus and any prospectus supplement, "Allegion," "we,"
"our," "us" and the"Company" mean Allegion plc, an Irish public limited
company, together with its consolidated subsidiaries, unless otherwise
specified or the context otherwise requires.
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form
S-3
that we filed with the Securities andExchange Commission (the "Commission" or
"SEC"), using a "shelf" registration process as a "well-known seasoned issuer"
as defined in Rule 405 under the Securities Act of 1933, as amended (the
"SecuritiesAct"). Pursuant to this registration statement, we may offer, issue
and sell securities as set forth on the cover page of this prospectus.
We may offer, issue and sell the securities from time to time, together or
separately. This prospectus describes some of the general termsthat may apply
to these securities. We will provide a prospectus supplement each time we
offer and issue any of these securities. The specific terms of any securities
to be offered will be described in the related prospectus supplement including
thespecific amounts, prices and terms of the securities offered or sold. The
prospectus supplement may also add, update or change information contained in
this prospectus. The registration statement that we filed with the SEC
includes exhibits thatprovide more detail on the matters discussed in this
prospectus. If there is any inconsistency between the information in this
prospectus and any prospectus supplement, you should rely on the information
in the prospectus supplement. You should readthis prospectus and any
applicable prospectus supplement(s) and the related exhibits filed with the
SEC, together with the additional information described under the headings
"Where You Can Find More Information" and "Incorporation ofCertain Documents
by Reference" prior to purchasing any of the securities offered by this
prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form
S-3
with the SEC. This prospectus is part of theregistration statement and does
not contain all the information in the registration statement on Form
S-3.
You will find additional information about us in the registration statement.
Any statement made inthis prospectus concerning a contract or other document
of ours is not necessarily complete, and you should read the documents that
are filed as exhibits to the registration statement or otherwise filed with
the SEC for a more complete understandingof the document or matter. Each such
statement is qualified in all respects by reference to the document to which
it refers.
We fileannual, quarterly and current reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's website at
http://www.sec.gov
and on our corporate website at
http://www.allegion.com
as soon as reasonably practicable after we electronically file such material
with, or furnish it to, the SEC. Information on our website does not
constitute part of this prospectus, and any references to thiswebsite or any
other website are inactive textual references only.
Our ordinary shares are listed on the New York Stock Exchange (the"NYSE")
under the trading symbol "ALLE."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC permits us to "incorporate by reference" the information contained in
documents we file with the SEC, which meansthat we can disclose important
information to you by referring you to those documents rather than by
including them in this prospectus. Information that is incorporated by
reference is considered to be part of this prospectus and you should read
theinformation with the same care that you read this prospectus. Later
information that we file with the SEC will automatically update and supersede
the information that is either contained, or incorporated by reference, in
this prospectus and will beconsidered to be a part of this prospectus from the
date those documents are filed. We have filed with the SEC, and incorporate by
reference in this prospectus, the following documents (File
No. 001-35971):
. Annual Report on
Form
10-K
for the fiscal year ended December 31, 2023, filed with the SEC on February 20, 2024; and
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. The description of our ordinary shares
contained in our Annual Report on
Form
10-K
for the fiscal year ended December 31, 2019, filed with the SEC on February 18, 2020,
including all amendments and reports filed for the purpose of updating such description.
All future filings that we make under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934, asamended (the "Exchange Act"), until all
the securities offered by this prospectus have been issued as described in
this prospectus, are deemed incorporated into and part of this prospectus once
filed. We are not, however, incorporating, ineach case, any documents (or
portions thereof) or information that we are deemed to furnish and not file in
accordance with SEC rules, unless expressly stated otherwise therein. Any
statement in this prospectus, in any prospectus supplement, or inany document
incorporated by reference that is different from any statement contained in
any later-filed document should be regarded as changed by that later
statement. Once so changed, the earlier statement is no longer considered part
of thisprospectus or any prospectus supplement.
You may request by phone or in writing a copy of any of the materials
incorporated (other thanexhibits, unless the exhibits are themselves
specifically incorporated) into this prospectus, and we will provide to you
these materials free of charge. Please make your request to Jeffrey N. Braun,
Senior Vice President and General Counsel, c/oSchlage Lock Company LLC, 11819
North Pennsylvania Street, Carmel, Indiana, 46032, telephone, (317)
810-3700.
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PROSPECTUS SUMMARY
This summary highlights selected information included or incorporated by
reference in this prospectus. This summary does not contain all ofthe
information that you should consider before investing in our securities. You
should read this entire prospectus, including the information incorporated by
reference, before making an investment decision. See "Where You Can Find
MoreInformation" in this prospectus. Some of the statements in this prospectus
are forward-looking statements. See "Cautionary Statement Regarding
Forward-Looking Statements."
Allegion plc
Allegionplc is a leading global provider of security products and solutions
that keep people and assets safe and secure in the places they live, learn,
work and connect. We create peace of mind by pioneering safety and security
with a vision of enablingseamless access and a safer world. Seamless access
allows authorized, automated and safe passage and movement through spaces and
places in the most efficient and frictionless manner possible. Central to our
vision is partnering and developingecosystems to create a flawless experience
and enable an uninterrupted and secure flow of people and assets. We offer an
extensive and versatile portfolio of security and access control products and
solutions across a range of market-leading brands.Our experts across the globe
deliver high-quality security hardware, software, services and systems, and we
use our deep expertise to serve as trusted partners to
end-users
who seek customized solutions totheir security needs. Our 10 largest customers
represented approximately 25% of our total Net revenues in 2023. No single
customer represented 10% or more of our total Net revenues in 2023.
We are headquartered in Dublin, Ireland, with our North American corporate
office in Carmel, Indiana. As of December 31, 2023, we hadapproximately 12,400
employees worldwide and have a global manufacturing footprint with 31
principal production and assembly facilities around the world. For the fiscal
year ended December 31, 2023, we generated revenues of$3,650.8 million.
The principal executive office of Allegion plc is located at Block D, Iveagh
Court, Harcourt Road, Dublin 2, D02VH94, Ireland, telephone (317)
810-3700.
Allegion US Holding Company Inc.
Allegion US Holding Company Inc. ("ALLE Holdings") is a corporation
incorporated under the laws of the State of Delaware onAugust 5, 2013, and is
a wholly owned subsidiary of Allegion plc. The principal executive office of
ALLE Holdings is located at 11819 North Pennsylvania Street, Carmel, Indiana,
46032, telephone
(317) 810-3700.
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RISK FACTORS
Investment in any securities offered pursuant to this prospectus involves
risks. Before acquiring any such securities, you should carefullyconsider the
risk factors incorporated by reference to our most recent Annual Report on Form
10-K
and each subsequently filed Quarterly Report on Form
10-Q,
the otherinformation contained or incorporated by reference in this
prospectus, as updated by our subsequent filings under the Exchange Act, and
the risk factors and other information contained in the applicable prospectus
supplement.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in or incorporated by reference in this prospectus, other
than purely historical information, are "forward-lookingstatements" within the
meaning of the Private Securities Litigation Reform Act of 1995, Section 27A
of the Securities Act and Section 21E of the Exchange Act. These forward-looking
statements generally are identified by the words"believe," "project,"
"expect," "anticipate," "estimate," "forecast," "outlook," "intend,"
"strategy," "plan," "may," "should,""will," "would," "will be," "will
continue," "will likely result," or the negative thereof or variations thereon
or similar expressions generally intended to identify forward-looking
statements.
Forward-looking statements may relate to such matters as projections of
revenue, margins, expenses, tax provisions, earnings, cash flows,benefit
obligations, dividends, share purchases or other financial items; any
statements of the plans, strategies and objectives of management for future
operations, including those relating to any statements concerning expected
development,performance or market share relating to our products and services;
any statements regarding future economic conditions or our performance; any
statements regarding pending investigations, claims or disputes; any
statements of expectation or belief;and any statements of assumptions
underlying any of the foregoing. These statements are based on currently
available information and our current assumptions, expectations and
projections about future events. While we believe that our assumptions,expectati
ons and projections are reasonable in view of the currently available
information, you are cautioned not to place undue reliance on our
forward-looking statements. You are advised to review any further disclosures
we make on relatedsubjects in materials we file with or furnish to the SEC.
Forward-looking statements speak only as of the date they are made and are not
guarantees of future performance. They are subject to future events, risks and
uncertainties--many of whichare beyond our control--as well as potentially
inaccurate assumptions that could cause actual results to differ materially
from our expectations and projections. We do not undertake to update any
forward-looking statements.
Factors that might affect our forward-looking statements include, among other
things:
. ongoing macroeconomic challenges and continued economic instability;
. increased prices and inflation;
. volatility and uncertainty in the political, economic and regulatory environments in which we operate,
includingchanges to trade agreements, sanctions, import and export regulations, custom duties
and applicable tax regulations and interpretations, social and political unrest, instability,
national and international conflict, terrorist acts and othergeographical disputes and uncertainties;
. the strength and stability of the institutional, commercial and residential construction and remodeling markets;
. fluctuations in currency exchange rates;
. potential impairment of our goodwill, indefinite-lived intangible assets and/or our long-lived assets;
. instability in the U.S. and global capital and credit markets;
. our ability to make scheduled debt payments or to refinance our debt obligations;
. increased competition, including from technological developments;
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. the development, commercialization and acceptance of new products and services;
. changes in customer and consumer preferences and our ability to maintain beneficial relationships with largecustomers;
. our products or solutions failing to meet certification and specification requirements, being defective,
causingproperty damage, bodily harm or injury, or otherwise falling short of customers' needs and expectations;
. our ability to identify and successfully complete and integrate acquisitions,
including achieving theiranticipated strategic and financial benefits;
. business opportunities that diverge from our core business;
. our ability to achieve the expected improvements or financial returns we expect from our strategic initiatives;
. our ability to effectively manage and implement restructuring initiatives or other organizational changes;
. global climate change or other unexpected events, including global health crises, such as
COVID-19;
. the proper functioning of our information technology and operational technology systems,
including disruption orbreaches of our information systems, such as cybersecurity attacks;
. the failure of our third-party vendors to provide effective support for many of the
critical elements of ourglobal information and operational technology infrastructure;
. our ability to recruit and retain a highly qualified and diverse workforce;
. disruptions in our global supply chain, including product manufacturing
and logistical services provided by oursupplier partners;
. our ability to effectively manage real or perceived issues related to product
quality, safety, corporate socialresponsibility and other reputational matters;
. our ability to protect our brand reputation and trademarks;
. legal judgments, fines, penalties or settlements imposed against us
or our assets as a result of legalproceedings, claims and disputes;
. claims of infringement of intellectual property rights by third parties;
. improper conduct by any of our employees, agents or business partners;
. changes to, or changes in interpretations of, current laws and regulations;
. uncertainty and inherent subjectivity related to transfer pricing regulations in the countries in which weoperate;
. changes in tax rates, the adoption of new tax legislation or exposure to additional tax liabilities; and
. risks related to our incorporation in Ireland, including the possible effects on us of future
legislation oradverse determinations by taxing authorities that could increase our tax burden.
These events, risks and uncertaintiesare further described in Part I, Item 1A
of our most recent Annual Report on Form
10-K,
our Quarterly Reports on Form
10-Q
in the section entitled "RiskFactors" and as may be included from time to time
in our reports filed with the SEC. We caution you that the important factors
referenced above may not contain all of the factors that are important to you.
USE OF PROCEEDS
Except as otherwise set forth in the applicable prospectus supplement, we
intend to use the net proceeds from sales of the securities forgeneral
corporate purposes, which may include, but is not limited to, funding for
working capital, repayment of indebtedness, capital expenditures, repurchases
of our capital stock and acquisitions.
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DESCRIPTION OF THE DEBT SECURITIES
We have summarized below general terms and conditions of the debt securities
or guarantees of debt securities that we may offer and sellpursuant to this
prospectus, or the guarantees in respect of debt securities. When we offer to
sell a particular series of debt securities, we will describe the specific
terms and conditions of the series in a prospectus supplement to thisprospectus.
We will also indicate in the applicable prospectus supplement whether the
general terms and conditions described in this prospectus apply to the series
of debt securities. In addition, the terms and conditions of the debt
securities of aseries may be different in one or more respects from the terms
and conditions described below. If so, those differences will be described in
the applicable prospectus supplement. We may, but need not, describe any
additional or different terms andconditions of those debt securities in an
annual report on Form
10-K,
a quarterly report on Form
10-Q
or a current report on Form
8-K
filed with the SEC, the information in which would be incorporated by
reference in this prospectus and that report will be identified in the
applicable prospectus supplement.
We will issue the debt securities in one or more series, which will consist of
either our senior debt or our subordinated debt, under anindenture among us,
ALLE Holdings, the guarantors named therein, and (unless specified in the
applicable supplemental indenture) U.S. Bank Trust Company, National
Association, as trustee. The debt securities of any series, whether senior
orsubordinated, may be issued as convertible debt securities or exchangeable
debt securities. We may use different trustees for different series of debt
securities issued under the indenture. The following summary of provisions of
the indenture doesnot purport to be complete and is subject to, and qualified
in its entirety by reference to, all of the provisions of the indenture,
including definitions therein of certain terms. This summary may not contain
all of the information that you mayfind useful. The terms and conditions of
the debt securities of each series will be set forth in those debt securities
and may also be set forth in an indenture supplemental to the indenture. For a
comprehensive description of any series of debtsecurities being offered
pursuant to this prospectus, you should read both this prospectus and the
applicable prospectus supplement.
Wehave filed the indenture as an exhibit to the registration statement of
which this prospectus forms a part. A form of each debt security, reflecting
the specific terms and provisions of that series of debt securities, will be
filed with the SEC inconnection with each offering and will be incorporated by
reference in the registration statement of which this prospectus forms a part.
The indenture does not contain any provision that gives you protection in the
event we issue a large amount ofdebt or we are acquired by another entity.
Copies of the indenture, any supplemental indenture and any form of debt
security that has been filed may be obtained in the manner described under
"Where You Can Find More Information."
Capitalized terms used and not defined in this summary have the meanings
specified in the indenture. For purposes of this section of thisprospectus,
references to "we," "us" and "our" are Allegion plc and not to any of its
subsidiaries. References to the "applicable prospectus supplement" are to the
prospectus supplement to this prospectus thatdescribes the specific terms and
conditions of a series of debt securities.
General
We may offer the debt securities from time to time in as many distinct series
as we may determine. Our senior debt securities will be oursenior obligations
and will rank equally in right of payment with all of our senior indebtedness.
If we issue subordinated debt securities, the terms of the subordination will
be described in the applicable prospectus supplement. Holders ofsubordinated
debt securities should recognize that contractual provisions may prohibit us
from making payments on those debt securities. The indenture does not limit
the amount of debt securities that we may issue under that indenture. We
may,without the consent of the holders of the debt securities of any series,
issue additional debt securities ranking equally with, and otherwise similar
in all respects to, the debt securities of the series (except for the public
offering price and theissue date) so that those additional debt securities
will be consolidated and form a single series with the debt securities of the
series previously offered and sold. We may also issue debt securities with
terms different from those of debtsecurities previously issued under the
indenture or existing indentures.
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The debt securities of each series will be issued in fully registered form
without interestcoupons, unless we specify otherwise in the applicable
prospectus supplement. We currently anticipate that the debt securities of
each series offered and sold pursuant to this prospectus will be issued as
global debt securities as described under"--Book-Entry; Delivery and Form;
Global Securities" and will trade in book-entry form only.
Debt securities denominated inU.S. dollars will be issued in denominations of
$1,000 and any integral multiple of $1,000 in excess thereof, unless otherwise
specified in the applicable prospectus supplement. If the debt securities of a
series are denominated in a foreign orcomposite currency, the applicable
prospectus supplement will specify the denomination or denominations in which
those debt securities will be issued.
Unless otherwise specified in the applicable prospectus supplement, we will
repay the debt securities of each series at 100% of theirprincipal amount,
together with accrued and unpaid interest thereon at maturity, except if those
debt securities have been previously redeemed or purchased and cancelled.
Unless otherwise specified in the applicable prospectus supplement, the debt
securities of each series will not be listed on any securitiesexchange.
Provisions of Indenture
The indenture provides that debt securities may be issued under it from time
to time in one or more series. For each series of debt securities,this
prospectus and the applicable prospectus supplement will describe the
following terms and conditions of that series of debt securities:
. the title of the series;
. the maximum aggregate principal amount, if any, established for debt securities of the series, payable at itsstated maturity;
. the person to whom any interest on a debt security of the series will
be payable, if other than the person inwhose name that debt security
(or one or more predecessor debt securities) is registered at the
close of business on the regular record date for that interest;
. whether the debt securities rank as senior debt, subordinated debt or any combination thereof and the terms ofany subordination;
. the date or dates on which the principal of any debt securities of the
series will be payable or the method usedto determine or extend those dates;
. the rate or rates at which any debt securities of the series will bear interest,
if any, the date or dates fromwhich interest, if any, will accrue, the
interest payment dates on which interest, if any, will be payable and the
regular record date for interest, if any, payable on any interest payment date;
. the place or places where the principal of and premium, if any, and interest on any debt
securities of the serieswill be payable and the manner in which any payment may be made;
. the period or periods within which, the price or prices at which and the terms
and conditions upon which any debtsecurities of the series may be redeemed, in
whole or in part, at our option and, if other than by a board resolution, the
manner in which any election by us to redeem the debt securities will be evidenced;
. our obligation or right, if any, to redeem or purchase any debt securities
of the series pursuant to any sinkingfund or analogous provision
or at the option of the holder thereof and the period or periods within
which, the price or prices at which and the terms and conditions
upon which any debt securities of the series will be redeemed or
purchased, in wholeor in part, pursuant to that obligation, and if other
than by a board resolution or officer's certificate, the manner in which
any election by us to redeem any debt securities shall be evidenced;
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. if other than denominations of $1,000 and any integral multiple of $1,000 in excess
thereof, the denominations inwhich any debt securities of the series will be issuable;
. if the amount of principal of or premium, if any, or interest on
any debt securities of the series may bedetermined with reference
to a financial or economic measure or index or pursuant to a
formula, the manner in which those amounts will be determined;
. if other than U.S. dollars, the currency, currencies or currency units in which the principal
of or premium, ifany, or interest on any debt securities of the series will be payable
and the manner of determining the equivalent thereof in U.S. dollars for any purpose,
including for the purpose of making payment in the currency of the United States of America;
. if the principal of or premium, if any, or interest on any debt securities of the
series is to be payable, at ourelection or the election of the holder thereof,
in one or more currencies or currency units other than that or those in which
those debt securities are stated to be payable, the currency, currencies or
currency units in which the principal of orpremium, if any, or interest on the
debt securities as to which that election is made will be payable, the periods
within which and the terms and conditions upon which that election is to be made
and the amount so payable (or the manner in whichthat amount will be determined);
. if other than the entire principal amount thereof, the portion of the principal amount of any debt securities ofthe
series which will be payable upon declaration of acceleration of the maturity thereof pursuant to the indenture;
. if the principal amount payable at the stated maturity of any debt securities
of the series will not bedeterminable as of any one or more dates prior
to the stated maturity, the amount which will be deemed to be the principal
amount of those debt securities as of any date for any purpose, including
the principal amount thereof which will be due andpayable upon any maturity
other than the stated maturity or which will be deemed to be outstanding
as of any date prior to the stated maturity (or, in any case, the manner
in which the amount deemed to be the principal amount will be determined);
. if other than by a board resolution, the manner in which any election by us or
any of the guarantors to defeaseany debt securities of the series pursuant to
the indenture will be evidenced; whether any debt securities of the series other
than debt securities denominated in U.S. dollars and bearing interest at a
fixed rate are to be subject to the defeasanceprovisions of the indenture; or,
in the case of debt securities denominated in U.S. dollars and bearing interest
at a fixed rate, if applicable, that the debt securities of the series, in
whole or any specified part, will not be defeasible pursuantto the indenture;
. if applicable, that any debt securities of the series will be issuable in whole or in
part in the form of one ormore global securities and, in that case, the respective
depositaries for those global securities and the form of any legend or legends which
will be borne by any global securities, and any circumstances in which any global
security may be exchangedin whole or in part for debt securities registered, and any
transfer of a global security in whole or in part may be registered, in the name or
names of persons other than the depositary for that global security or a nominee
thereof and any otherprovisions governing exchanges or transfers of global securities;
. any addition to, deletion from or change in the events of default
applicable to any debt securities of the seriesand any change in
the right of the trustee or the requisite holders of those debt
securities to declare the principal amount thereof due and payable;
. any addition to, deletion from or change in the covenants described
in this prospectus applicable to debtsecurities of the series;
. if the debt securities of the series are to be convertible into or
exchangeable for cash and/or any securities orother property of any
person (including us or the guarantors), the terms and conditions upon
which those debt securities will be so convertible or exchangeable;
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. whether the debt securities of the series will be guaranteed by any persons and, if
so, the identity of thosepersons, the terms and conditions upon which those debt
securities will be guaranteed and, if applicable, the terms and conditions upon which
those guarantees may be subordinated to other indebtedness of the respective guarantors;
. whether the debt securities of the series will be secured by any collateral
and, if so, the terms and conditionsupon which those debt securities
will be secured and, if applicable, upon which those liens may be subordinated
to other liens securing other indebtedness of us or of any guarantor;
. if other than U.S. Bank Trust Company, National Association is to act as trustee for the
debt securities of suchseries, the name and corporate trust office of such trustee;
. any other terms of the debt securities of the series and the guarantees thereof (which may
modify or delete anyprovision of the indenture, insofar as it applies to such series); and
. the CUSIP and/or ISIN number(s) of the debt securities of the series.
Interest and Interest Rates
General
In the applicable prospectus supplement, we will designate the debt securities
of a series as being either debt securities bearing interest ata fixed rate of
interest or debt securities bearing interest at a floating rate of interest.
Each debt security will begin to accrue interest from the date on which it is
originally issued. Interest on each debt security will be payable in arrearson
the interest payment dates set forth in the applicable prospectus supplement
and as otherwise described below and at maturity or, if earlier, the
redemption date described below. Interest will be payable to the holder of
record of the debtsecurities at the close of business (or, if no business is
conducted by the trustee at its corporate trust office on such date, at 5:00
p.m. New York City time on such date) on the record date for each interest
payment date, which record dates willbe specified in the applicable prospectus
supplement.
As used in the indenture, the term "business day" means, with respect todebt
securities of a series, any day, other than a Saturday or Sunday, that is not
a day on which the trustee or banking institutions are authorized or obligated
by law, regulation or executive order to close in the place where the
principal of andpremium, if any, and interest on the debt securities of that
series are payable.
Fixed Rate Debt Securities
If the debt securities of a series being offered will bear interest at a fixed
rate of interest, the debt securities of that series will bearinterest at the
annual interest rate specified on the cover page of the applicable prospectus
supplement. Interest on those debt securities will be payable semi-annually in
arrears on the interest payment dates for those debt securities. If
thematurity date, the redemption date or an interest payment date is not a
business day, we will pay principal, premium, if any, the redemption price, if
any, and interest on the next succeeding business day, and no interest will
accrue from and afterthe relevant maturity date, redemption date or interest
payment date to the date of that payment. Unless otherwise specified in the
applicable prospectus supplement, interest on the fixed rate debt securities
will be computed on the basis of a
360-day
year of twelve
30-day
months.
Floating Rate Debt Securities
If the debt securities of a series being offered will bear interest at a
floating rate of interest, the debt securities of thatseries will bear
interest during each relevant interest period at the rate determined as set
forth in the applicable prospectus supplement. In the applicable prospectus
supplement, we will indicate any spread or spread multiplier to be applied
inthe interest rate formula to determine the interest rate applicable in any
interest period. The applicable prospectus supplement will identify the
calculation agent for each series of floating rate debt securities, which will
compute the interestaccruing on the debt securities of the relevant series.
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Optional Redemption or Repurchase
If specified in the applicable prospectus supplement, we may elect to redeem
all or part of the outstanding debt securities of a series fromtime to time
before the maturity date of the debt securities of that series. Upon such
election, we will notify the trustee of the redemption date and the principal
amount of debt securities of the series to be redeemed. If less than all the
debtsecurities of the series are to be redeemed, and the securities are global
securities, the securities to be redeemed will be selected in accordance with
applicable DTC procedures. If the notes to be redeemed are not global
securities, the particulardebt securities of that series to be redeemed will
be selected by the trustee by such method as the trustee deems fair and
appropriate. The applicable prospectus supplement will specify the redemption
price for the debt securities to be redeemed (orthe method of calculating such
price), in each case in accordance with the terms and conditions of those debt
securities.
Notice ofredemption will be given to each holder of the debt securities to be
redeemed not less than 30 nor more than 60 days prior to the date set for such
redemption. This notice will include the following information: the redemption
date; the redemptionprice (or the method of calculating such price); if less
than all of the outstanding debt securities of such series are to be redeemed,
the identification (and, in the case of partial redemption, the respective
principal amounts) of the particulardebt securities to be redeemed; the place
or places where such debt securities are to be surrendered for payment of the
redemption price; and, if applicable, the CUSIP number of the debt securities
to be redeemed (provided that no representationwill be made as to the
correctness or accuracy of the CUSIP number, if any, listed in such notice or
printed on the securities).
By nolater than 11:00 a.m. (New York City time) on the redemption date, we
will deposit or cause to be deposited with the trustee or with a paying agent
(or, if we are acting as our own paying agent with respect to the debt
securities being redeemed, wewill segregate and hold in trust as provided in
the indenture) an amount of money sufficient to pay the aggregate redemption
price of, and (except if the redemption date shall be an interest payment date
or the debt securities of such series provideotherwise) accrued interest on,
all of the debt securities or the part thereof to be redeemed on that date. On
the redemption date, the redemption price will become due and payable upon all
of the debt securities to be redeemed, and interest, ifany, on the debt
securities to be redeemed will cease to accrue from and after that date. Upon
surrender of any such debt securities for redemption, we will pay those debt
securities surrendered at the redemption price together, if applicable,
withaccrued interest to the redemption date.
Any debt securities to be redeemed only in part must be surrendered at the
office or agencyestablished by us for such purpose, and we will execute, and
the trustee will authenticate and deliver to a holder without service charge,
new debt securities of the same series and of like tenor, of any authorized
denominations as requested by thatholder, in a principal amount equal to and
in exchange for the unredeemed portion of the debt securities that holder
surrenders.
Additionally, we or our affiliates may purchase debt securities from investors
who are willing to sell from time to time, either in the openmarket at
prevailing prices or in private transactions at negotiated prices. Debt
securities that we or they purchase may, at our discretion, be held, resold or
canceled.
Payment and Transfer or Exchange
Principal of and premium, if any, and interest on the debt securities of each
series will be payable, and the debt securities may be exchangedor
transferred, at the office or agency maintained by us for that purpose (which
initially will be the corporate trust office of the trustee). Payment of
principal of and premium, if any, and interest on a global security registered
in the name ofor held by The Depository Trust Company ("DTC") or its nominee
will be made in immediately available funds to DTC or its nominee, as the case
may be, as the registered holder of that global security. If any of the debt
securities are nolonger represented by a global security, payment of interest
on certificated debt securities in definitive form may, at our option, be made
by check mailed directly to holders at their registered addresses. See
"--Book-Entry; Delivery andForm; Global Securities."
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A holder may transfer or exchange any certificated debt securities in
definitive form at thecorporate trust office of the trustee. No service charge
will be made for any registration of transfer or exchange of debt securities,
but we may require payment of a sum sufficient to cover any transfer tax or
other similar governmental chargepayable in connection therewith.
We are not required to transfer or exchange any debt security selected for
redemption for a period of 15days before sending of a notice of redemption of
the debt security to be redeemed.
The registered holder of debt securities will betreated as the owner of those
debt securities for all purposes.
Subject to any applicable abandoned property law, all amounts in respectof
principal of and premium, if any, or interest on the debt securities paid by
us that remain unclaimed two years after that payment was due and payable will
be repaid to us, and the holders of those debt securities will thereafter look
solely tous for payment.
Guarantees
Eachprospectus supplement will describe, as to the debt securities to which it
relates, any guarantees by us or our direct and indirect subsidiaries which
may guarantee the debt securities, including the terms of subordination, if
any, of suchguarantees.
Covenants
The indenturesets forth limited covenants, including the covenant described
below, that will apply to each series of debt securities issued under the
indenture, unless otherwise specified in the applicable prospectus supplement.
However, these covenants do not,among other things:
. limit the amount of indebtedness or lease obligations that may be incurred by us or our subsidiaries;
. limit our ability or that of our subsidiaries to issue, assume or guarantee debt secured by liens; or
. restrict us from paying dividends or making distributions on our capital stock or purchasing or redeeming ourcapital stock.
Consolidation, Merger and Sale of Assets
The indenture provides that we may consolidate with or merge with or into any
other person, and may sell, transfer, lease or convey all orsubstantially all
of our properties and assets to another person, provided that the following
conditions are satisfied:
. we are the continuing entity, or the resulting, surviving or transferee
person (the "Successor") is acorporation, partnership, limited liability
company, trust or other entity organized and validly existing under
the laws of any domestic or foreign jurisdiction and the Successor
(if not us) will expressly assume, by supplemental indenture, all ofour
obligations under the debt securities and the indenture and, for
each security that by its terms provides for conversion, provide for
the right to convert that security in accordance with its terms;
. immediately after giving effect to that transaction, no default or event
of default under the indenture hasoccurred and is continuing; and
. the trustee receives from us an officer's certificate and an
opinion of counsel that the merger,consolidation, transfer, sale,
lease or conveyance and the supplemental indenture, as the case
may be, complies with the applicable provisions of the indenture.
If we consolidate or merge with or into any other person or sell, transfer,
lease or convey all or substantially all of our properties andassets in
accordance with the indenture, the Successor will be substituted for us under
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the indenture, with the same effect as if it had been an original party to the
indenture. As a result, the Successor may exercise our rights and powers under
the indenture, and we will bereleased from all our liabilities and obligations
under the indenture and the debt securities.
Any substitution of the Successor for usmight be deemed for federal income tax
purposes to be an exchange of the debt securities for "new" debt securities,
resulting in recognition of gain or loss for those purposes and possibly
certain other adverse tax consequences tobeneficial owners of the debt
securities. Holders should consult their own tax advisors regarding the tax
consequences of any substitution.
For purposes of this covenant, "person" means any individual, corporation,
partnership, limited liability company, joint venture,association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof or any other entity.
Events of Default
Each of the followingevents are defined in the indenture as an "event of
default" (whatever the reason therefor and whether or not it will be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any courtor any order, rule or regulation of any
administrative or governmental body) with respect to the debt securities of
any series, which may be changed or eliminated with respect to any particular
series, as specified in a supplemental indenture:
(1) default in the payment of any installment of interest on any debt securities of that series, which continuesfor
60 days after becoming due (subject to the deferral of any interest payment in the case of an extension period);
(2) default in the payment of principal of or premium, if any, on any debt securities of that series when
itbecomes due and payable at its stated maturity, upon optional redemption, upon declaration or otherwise;
(3) default in the deposit of any sinking fund payment, which continues for 60
days after becoming due by the termsof any debt securities of that series;
(4) default in the performance, or breach, of any covenant or agreement of ours in the indenture with respect
tothe debt securities of that series (other than as referred to in clause (1), (2) or (3) above), which
continues for a period of 90 days after written notice to us by the trustee or to us and the trustee by the
holders of at least 25% inaggregate principal amount of the outstanding debt securities of that series;
(5) we, pursuant to or within the meaning of the Bankruptcy Law:
. commence a voluntary case or proceeding;
. consent to the entry of an order for relief against us in an involuntary case or proceeding;
. consent to the appointment of a Custodian of us or for all or substantially all of our property;
. make a general assignment for the benefit of our creditors;
. file a petition in bankruptcy or answer or consent seeking reorganization or relief;
. consent to the filing of a petition in bankruptcy or the appointment of or taking possession by a Custodian; or
. take any comparable action under any foreign laws relating to insolvency;
(6) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
. is for relief against us in an involuntary case, or adjudicates us insolvent or bankrupt;
. appoints a Custodian of us or for all or substantially all of our property; or
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. orders the
winding-up
or liquidation of us (or any similar relief isgranted under any foreign
laws); and the order or decree remains unstayed and in effect for 90 days; or
(7) any other event of default provided with respect to debt securities
of that series occurs as specified in asupplemental indenture.
"
Bankruptcy Law
" means Title 11, United States Code or any similar federal orstate or foreign
law for the relief of debtors.
"
Custodian
" means any custodian, receiver, trustee, assignee, liquidatoror other similar
official under any Bankruptcy Law.
If an event of default with respect to debt securities of any series (other
than anevent of default relating to certain events of bankruptcy, insolvency,
or reorganization of us) occurs and is continuing, the trustee for that series
by notice to us, or the holders of at least 25% in aggregate principal amount
of the outstandingdebt securities of that series by notice to us and the
trustee, may declare the principal of and premium, if any, and accrued and
unpaid interest on all the debt securities of that series to be due and
payable. Upon a declaration of this type, thatprincipal, premium and accrued
and unpaid interest will be due and payable immediately. If an event of
default relating to certain events of bankruptcy, insolvency or reorganization
of us occurs and is continuing, the principal of and premium, ifany, and
accrued and unpaid interest on the debt securities of that series will become
and be immediately due and payable without any declaration or other act on the
part of the trustee of that series or any holders.
The holders of not less than a majority in aggregate principal amount of the
outstanding debt securities of any series may rescind adeclaration of
acceleration and its consequences, if we have deposited certain sums with the
trustee and all events of default with respect to the debt securities of that
series, other than the
non-payment
ofthe principal or interest which have become due solely by that acceleration,
have been cured or waived, as provided in the indenture.
Anevent of default for a particular series of debt securities does not
necessarily constitute an event of default for any other series of debt
securities issued under the indenture.
If an event of default occurs, the trustee will have special duties. In that
situation, the trustee will be obligated to use those of itsrights and powers
under the indenture, and to use the same degree of care and skill in doing so,
that a prudent person would use in that situation in conducting his or her own
affairs.
We are required to furnish the trustee annually a statement by certain of our
officers to the effect that, to the best of their knowledge, weare not in
default in the fulfillment of any of our obligations under the indenture or,
if there has been a default in the fulfillment of any obligation of us,
specifying each default.
No holder of any debt securities of any series will have any right to
institute any judicial or other proceeding with respect to theindenture, or
for the appointment of a receiver or trustee, or for any other remedy unless:
(1) an event of default has occurred and is continuing and that holder has given the trustee prior written
noticeof that continuing event of default with respect to the debt securities of that series;
(2) the holders of not less than 25% of the aggregate principal amount of the outstanding debt securities
of thatseries have requested the trustee to institute proceedings in respect of that event of default;
(3) the trustee has been offered security or indemnity satisfactory to it against
its costs, expenses, fees andliabilities in complying with that request;
(4) the trustee has failed to institute proceedings 60 days after the
receipt of that notice, request and offer ofsecurity or indemnity; and
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(5) no direction inconsistent with that written request has been given for 60 days by the holders
of a majority inaggregate principal amount of the outstanding debt securities of that series.
The holders of a majority in aggregateprincipal amount of outstanding debt
securities of a series will have the right, subject to certain limitations, to
direct the time, method and place of conducting any proceeding for any remedy
available to the trustee with respect to the debtsecurities of that series or
exercising any trust or power conferred to the trustee, and to waive certain
defaults. The indenture provides that if an event of default occurs and is
continuing, the trustee will exercise those of its rights and powersunder the
indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
that person's own affairs. Subject to those provisions, the trustee will
beunder no obligation to exercise any of its rights or powers under the
indenture at the request or direction of any of the holders of the debt
securities of a series unless they will have offered to the trustee security
or indemnity satisfactory tothe trustee against the costs, expenses and
liabilities which might be incurred by it in compliance with that request.
Notwithstandingthe foregoing, the holder of any debt security will have an
absolute and unconditional right to receive payment of the principal of and
premium, if any, and interest on that debt security on or after the due dates
expressed in that debt security andto institute suit for the enforcement of
payment.
Modification and Waivers
Modification and amendments of the indenture and the debt securities of any
series may be made by us and the trustee with the consent of theholders of not
less than a majority in aggregate principal amount of the outstanding debt
securities of that series affected thereby; provided, however, that no
modification or amendment may, without the consent of the holder of each
outstandingdebt security of that series affected thereby:
. change the stated maturity of the principal of, or installment of interest on, any debt security;
. reduce the principal amount of any debt security or reduce the amount of the principal of any debt security whichwould be due
and payable upon a declaration of acceleration of the maturity thereof or reduce the rate of interest on any debt security;
. reduce any premium payable on the redemption of any debt security or
change the date on which any debt securitymay or must be redeemed;
. change the coin or currency in which the principal of or premium, if any, or interest on any debt security ispayable;
. impair the right of any holder to institute suit for the enforcement of any payment on or after the
statedmaturity of any debt security (or, in the case of redemption, on or after the redemption date);
. reduce the percentage in principal amount of the outstanding debt securities,
the consent of whose holders isrequired in order to take certain actions;
. reduce the requirements for quorum or voting by holders of debt securities in the indenture or the debt security;
. modify any of the provisions in the indenture regarding the waiver of past defaults and the
waiver of certaincovenants by the holders of debt securities except to increase any percentage
vote required or to provide that certain other provisions of the indenture cannot be
modified or waived without the consent of the holder of each debt security affectedthereby;
. make any change that adversely affects in any material respect the right to convert
or exchange any debt securityor decreases the conversion or exchange rate or
increases the conversion price of any convertible or exchangeable debt security,
unless that decrease or increase is permitted by the terms of the debt securities; or
. modify any of the above provisions.
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We and the trustee may, without the consent of any holders, modify or amend
the terms of theindenture and the debt securities of any series with respect
to the following:
. to add to our covenants for the benefit of holders of the debt securities
of all or any series or to surrenderany right or power conferred upon us;
. to evidence the succession of another person to, and the assumption by the successor of our covenants, agreementsand obligations
under, the indenture pursuant to the covenant described under "--Covenants--Consolidation, Merger and Sale of Assets";
. to add any additional events of default for the benefit of holders of the debt securities of all or any series;
. to add one or more guarantees or additional guarantors in respect of debt
securities, and to evidence the releaseand discharge of any guarantor from its
obligations under its guarantee of debt securities and its obligations under
the applicable indenture in accordance with the terms of such indenture;
. to secure the debt securities pursuant to the covenants of the indenture;
. to add or appoint a successor or separate trustee or other agent;
. to provide for the issuance of additional debt securities of any series;
. to establish the form or terms of debt securities of any series as permitted by the indenture;
. to comply with the rules of any applicable securities depository;
. to add to or change any of the provisions of the indenture to
such extent as shall be necessary to permit orfacilitate the
issuance of debt securities in definitive form, or to permit or
facilitate the issuance of debt securities in uncertificated form;
. to add to, change or eliminate any of the provisions of the indenture in respect of one or more
series of debtsecurities (and if such addition, change or elimination is to apply with respect to
less than all debt securities of a series, stating that it is expressly being made to apply solely
with respect to such debt securities within a series); providedthat any such addition, change
or elimination (a) shall neither (1) apply to any debt security of any series created prior to
the execution of that supplemental indenture and entitled to the benefit of that provision nor
(2) modifythe rights of the holder of any debt security with respect to that provision or (b)
shall become effective only when there is no debt security described in clause (1) outstanding;
. to comply with requirements of the SEC in order to effect or maintain the
qualification of the indenture underthe Trust Indenture Act of 1939, as amended;
. to conform any provision of the indenture, any supplemental indenture, one
or more series of debt securities orany related guarantees or security
documents to the description of such securities contained in our
prospectus, prospectus supplement, offering memorandum or similar document
with respect to the offering of the securities of such series to
theextent that such description was intended to be a verbatim recitation
of a provision in the indenture, such securities or any related guarantees
or security documents as set forth in an officer's certificate;
. to cure any ambiguity, omission, defect or inconsistency, or to make any other
provisions with respect to mattersor questions arising under the indenture;
. to add to or change any of the provisions of the indenture with respect to any debt
securities that by theirterms may be converted into securities or other property
other than debt securities of the same series and of like tenor, in order to
permit or facilitate the issuance, payment or conversion of such debt securities;
. to make any amendment to the provisions of the indenture relating to the transfer and legending of
debtsecurities; provided that compliance with the amended indenture would not cause debt securities to be
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transferred in violation of applicable securities law and that the amendment does not
adversely affect the rights of holders of debt securities to transfer debt securities; or
. to change any other provision; provided that the change does not adversely affect the interests of the
holders ofdebt securities of any series in any material respect, as evidenced by an officer's certificate.
The holders of atleast a majority in aggregate principal amount of the
outstanding debt securities of any series may, on behalf of the holders of all
debt securities of that series, waive compliance with certain restrictive
provisions of the indenture. The holdersof not less than a majority in
aggregate principal amount (including waivers obtained in connection with a
purchase of, or tender offer or exchange offer for, debt securities) of the
outstanding debt securities of a series to be affected under theindenture may,
on behalf of the holders of all debt securities of that series, waive any past
or existing default and its consequences under the indenture with respect to
the debt securities of that series, except a default (1) in the paymentof
principal of or premium, if any, or interest on debt securities of that series
or (2) in respect of a covenant or provision of the indenture that cannot be
modified or amended without the consent of the holder of each debt security of
thatseries. Upon any waiver, that default will cease to exist, and any event
of default arising therefrom will be deemed to have been cured, for every
purpose of the indenture; however, no waiver will extend to any subsequent or
other default or eventof default or impair any rights consequent thereon. A
waiver of any past default and its consequences given by or on behalf of any
holder of debt securities in connection with a purchase of, or tender or
exchange offer for, such holder'ssecurities will not be rendered invalid by
such purchase, tender or exchange.
Special Rules for Action by Holders
Only holders of outstanding debt securities of the applicable series will be
eligible to take any action under the indenture, such as giving anotice of
default, declaring an acceleration, approving any change or waiver or giving
the trustee an instruction with respect to debt securities of that series.
Also, we will count only outstanding debt securities in determining whether
the variouspercentage requirements for taking action have been met.
We will generally be entitled to set any day as a record date for the purpose
ofdetermining the holders that are entitled to take action under the
indenture. In certain limited circumstances, only the trustee will be entitled
to set a record date for action by holders. If we or the trustee sets a record
date for an approval orother action to be taken by holders, that vote or
action may be taken only by persons or entities who are holders on the record
date and must be taken during the period that we specify for this purpose, or
that the trustee specifies if it sets therecord date. We or the trustee, as
applicable, may shorten or lengthen this period from time to time. In
addition, record dates for any global debt security may be set in accordance
with procedures established by the depositary from time to time.Accordingly,
record dates for global debt securities may differ from those for other debt
securities.
Discharge, Defeasance and Covenant Defeasance
We may discharge certain obligations to holders of the debt securities of a
series that have not already been delivered to the trusteefor cancellation and
that either have become due and payable or will become due and payable within
one year (or scheduled for redemption within one year) by depositing with the
trustee, in trust, funds in U.S. dollars in an amount sufficient to paythe
entire indebtedness including the principal and premium, if any, and interest
to the date of deposit (if the debt securities have become due and payable) or
to the maturity thereof or the redemption date of the debt securities of that
series, asthe case may be. We may direct the trustee to invest those funds in
U.S. Treasury securities with a maturity of one year or less (but in no event
later than the date the debt securities are due and payable) or in a money
market fund that investssolely in short-term U.S. Treasury securities.
The indenture provides that we may elect either (1) to defease and be
discharged fromany and all obligations with respect to the debt securities of
a series (except for, among other things, obligations to register the transfer
or exchange of the debt securities, to replace temporary or mutilated,
destroyed, lost or stolen debt
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securities, to maintain an office or agency with respect to the debt
securities and to hold moneys for payment in trust) ("legal defeasance") or
(2) to be released from ourobligations to comply with the restrictive
covenants under the indenture, and any omission to comply with those
obligations will not constitute a default or an event of default with respect
to the debt securities of a series and clauses (4) and(7) under "--Events of
Default" will no longer be applied ("covenant defeasance"). Legal defeasance
or covenant defeasance, as the case may be, will be conditioned upon, among
other things, the irrevocable deposit by us withthe trustee, in trust, of an
amount in U.S. dollars, or U.S. government obligations, or both, applicable to
the debt securities of that series which through the scheduled payment of
principal and interest in accordance with their terms will providemoney in an
amount sufficient to pay the principal of and premium, if any, and interest on
the debt securities on the scheduled due dates therefor.
If we effect legal defeasance or covenant defeasance with respect to the debt
securities of any series, the amount in U.S. dollars, or U.S.government
obligations, or both, on deposit with the trustee will be sufficient, in the
written opinion of a nationally recognized firm of independent accountants, a
nationally recognized investment bank or a nationally recognized appraisal
orvaluation firm delivered to the trustee, to pay amounts due on the debt
securities of that series at the time of the stated maturity but may not be
sufficient to pay amounts due on the debt securities of that series at the
time of the accelerationresulting from that event of default. However, we
would remain liable to make payment of amounts due at the time of acceleration.
We willbe required to deliver to the trustee an opinion of counsel that the
deposit and related defeasance will not cause the holders and beneficial
owners of the debt securities of that series to recognize income, gain or loss
for federal income taxpurposes. If we elect legal defeasance, that opinion of
counsel must be based upon a ruling from the U.S. Internal Revenue Service or
a change in law to that effect.
We may exercise our legal defeasance option notwithstanding our prior exercise
of our covenant defeasance option.
Same-Day
Settlement and Payment
Unless otherwise provided in the applicable prospectus supplement, the debt
securities will trade in the
same-day
funds settlement system of DTC until maturity or until we issue the debt
securities in certificated form. DTC will therefore require secondary market
trading activity in the debt securities to settlein immediately available
funds. We can give no assurance as to the effect, if any, of settlement in
immediately available funds on trading activity in the debt securities.
Book-Entry; Delivery and Form; Global Securities
Unless otherwise specified in the applicable prospectus supplement, the debt
securities of each series will be issued in the form of one ormore global debt
securities, in definitive, fully registered form without interest coupons,
each of which we refer to as a "global security." Each global security will be
deposited with the trustee as custodian for DTC and registered inthe name of a
nominee of DTC for the accounts of participants in DTC.
Investors may hold their interests in a global security directlythrough DTC if
they are DTC participants, or indirectly through organizations that are DTC
participants. Except in the limited circumstances described below, holders of
debt securities represented by interests in a global security will not
beentitled to receive their debt securities in fully registered certificated
form.
DTC has advised us as follows: DTC is a limited-purposetrust company organized
under New York Banking Law, a "banking organization" within the meaning of the
New York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New YorkUniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. DTC was created to hold securities of institutions that have
accounts with DTC ("participants") and tofacilitate the
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clearance and settlement of securities transactions among its participants in
those securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the needfor physical movement of securities
certificates. DTC's participants include both U.S. and
non-U.S.
securities brokers and dealers, banks, trust companies, clearing corporations
and certain otherorganizations. Access to DTC's book-entry system is also
available to others, such as both U.S. and
non-U.S.
securities brokers and dealers, banks, trust companies and clearing
corporations that clearthrough or maintain a custodial relationship with a
participant, whether directly or indirectly.
Ownership of Beneficial Interests
Upon the issuance of each global security, DTC will credit, on its book-entry
registration and transfer system, the respective principal amountof the
individual beneficial interests represented by the global security to the
accounts of participants. Ownership of beneficial interests in each global
security will be limited to participants or persons that may hold interests
throughparticipants. Ownership of beneficial interests in each global security
will be shown on, and the transfer of those ownership interests will be
effected only through, records maintained by DTC (with respect to
participants' interests) and thoseparticipants (with respect to the owners of
beneficial interests in the global security other than participants).
So long as DTC or itsnominee is the registered holder and owner of a global
security, DTC or that nominee, as the case may be, will be considered the sole
legal owner of the debt security represented by the global security for all
purposes under the indenture, the debtsecurities and applicable law. Any
notices required to be given to the holders while the debt securities are
global securities will be given to DTC. Except as set forth below, owners of
beneficial interests in a global security will not be entitledto receive
certificated debt securities and will not be considered to be the owners or
holders of any debt securities represented by the global security. We
understand that under existing industry practice, in the event an owner of a
beneficialinterest in a global security desires to take any actions that DTC,
as the holder of the global security, is entitled to take, DTC would authorize
the participants to take that action, and that participants would authorize
beneficial owners owningthrough those participants to take that action or
would otherwise act upon the instructions of beneficial owners owning through
them. No beneficial owner of an interest in a global security will be able to
transfer that interest except in accordancewith DTC's applicable procedures,
in addition to those provided for under the indenture. Because DTC can only
act on behalf of participants, who in turn act on behalf of others, the
ability of a person having a beneficial interest in a globalsecurity to pledge
that interest to persons that do not participate in the DTC system, or
otherwise to take actions in respect of that interest, may be impaired by the
lack of a physical certificate representing that interest.
All payments on the debt securities represented by a global security
registered in the name of and held by DTC or its nominee will be made toDTC or
its nominee, as the case may be, as the registered owner and holder of the
global security.
We expect that DTC or its nominee,upon receipt of any payment of principal or
premium, if any, or interest in respect of a global security, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amountof the global security
as shown on the records of DTC or its nominee. We also expect that payments by
participants to owners of beneficial interests in the global security held
through those participants will be governed by standing instructions
andcustomary practices as is now the case with securities held for accounts
for customers registered in the names of nominees for those customers. These
payments, however, will be the responsibility of those participants and
indirect participants, andnone of we, the trustee or any paying agent will
have any responsibility or liability for any aspect of the records relating
to, or payments made on account of, beneficial ownership interests in any
global security or for maintaining, supervising orreviewing any records
relating to those beneficial ownership interests or for any other aspect of
the relationship between DTC and its participants or the relationship between
those participants and the owners of beneficial interests in a globalsecurity.
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Unless and until it is exchanged in whole or in part for certificated debt
securities, eachglobal security may not be transferred except as a whole by
DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of
DTC. Transfers between participants in DTC will be effected in the ordinary
way in accordance with DTC rules andwill be settled in
same-day
funds.
We expect that DTC will take any action permitted to be takenby a holder of
debt securities only at the direction of one or more participants to whose
account the DTC interests in a global security are credited and only in
respect of that portion of the aggregate principal amount of the debt
securities as towhich that participant or participants has or have given that
direction. However, if there is an event of default under the debt securities,
DTC will exchange each global security for certificated debt securities, which
it will distribute to itsparticipants.
Although we expect that DTC will agree to the foregoing procedures in order to
facilitate transfers of interests in eachglobal security among participants of
DTC, DTC is under no obligation to perform or continue to perform those
procedures, and those procedures may be discontinued at any time. Neither we
nor the trustee will have any responsibility for theperformance or
nonperformance by DTC or its participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
The indenture provides that the global securities will be exchanged for debt
securities in certificated form of like tenor and of an equalprincipal amount,
in authorized denominations in the following limited circumstances:
(1) DTC notifies us that it is unwilling or unable to continue as depository or if DTC ceases to
be eligible underthe indenture and we do not appoint a successor depository within 90 days;
(2) we determine that the debt securities will no longer be represented by global
securities and execute anddeliver to the trustee an order to that effect; or
(3) an event of default with respect to the debt securities has occurred and is continuing, and DTC notifies
thetrustee and the registrar of its decision to exchange the global securities for definitive securities.
Thesecertificated debt securities will be registered in the name or names as
DTC instructs the trustee. It is expected that those instructions may be based
upon directions received by DTC from participants with respect to ownership of
beneficialinterests in global securities.
The information in this section of this prospectus concerning DTC and DTC's
book-entry system hasbeen obtained from sources that we believe to be reliable.
Euroclear and Clearstream
If the depositary for a global security is DTC, you may hold interests in the
global security through Clearstream Banking,
societe anonyme
, which we refer to as "Clearstream," or Euroclear Bank SA/NV, as operator of
the Euroclear System, which we refer to as "Euroclear," in each case, as a
participant in DTC. Euroclear andClearstream will hold interests, in each
case, on behalf of their participants through customers' securities accounts
in the names of Euroclear and Clearstream on the books of their respective
depositaries, which in turn will hold thoseinterests in customers' securities
in the depositaries' names on DTC's books.
Payments, deliveries, transfers, exchanges,notices and other matters relating
to the debt securities made through Euroclear or Clearstream must comply with
the rules and procedures of those systems. Those systems could change their
rules and procedures at any time. We have no control overthose systems or
their participants, and we take no responsibility for their activities.
Transactions between participants in Euroclear or Clearstream, on one hand,
and other participants in DTC, on the other hand, would also be subject
toDTC's rules and procedures.
Investors will be able to make and receive through Euroclear and Clearstream
payments, deliveries,transfers, exchanges, notices and other transactions
involving any securities held through those systems only on
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days when those systems are open for business. Those systems may not be open
for business on days when banks, brokers and other institutions are open for
business in the United States.
In addition, because of time-zone differences, U.S. investors who hold their
interests in the debt securities through these systems and wishon a particular
day, to transfer their interests, or to receive or make a payment or delivery
or exercise any other right with respect to their interests, may find that the
transaction will not be effected until the next business day in Luxembourgor
Brussels, as applicable. Thus, investors who wish to exercise rights that
expire on a particular day may need to act before the expiration date. In
addition, investors who hold their interests through both DTC and Euroclear or
Clearstream mayneed to make special arrangements to finance any purchase or
sales of their interests between the U.S. and European clearing systems, and
those transactions may settle later than transactions within one clearing
system.
Governing Law
The indenture, the debtsecurities and any associated guarantees will be
governed by, and construed in accordance with, the laws of the State of New
York.
Regarding theTrustee
U.S. Bank Trust Company, National Association is the trustee under the
indenture (unless specified in the applicablesupplemental indenture). As of
the date of this prospectus, the corporate trust office of the trustee is
located at Global Corporate Trust Services, 190 S. LaSalle Street, Chicago, IL
60603.
The trustee is permitted to engage in transactions, including commercial
banking and other transactions, with us and our subsidiaries fromtime to time;
provided that if the trustee acquires any conflicting interest as defined in
the Trust Indenture Act it must eliminate that conflict upon the occurrence of
an event of default, or else resign.
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DESCRIPTION OF WARRANTS
The following description of warrants sets forth certain general terms and
provisions of warrants. This summary does not contain all of theinformation
that you may find useful. The particular terms of the warrants offered will be
described in the prospectus supplement relating to those warrants. As used in
this section only, "we", "our" and "us" refers toAllegion plc.
General
We may issuewarrants to purchase our securities or rights (including rights to
receive payment in cash or securities based on the value, rate or price of one
or more specified commodities, currencies or indices) or securities of other
issuers or any combinationof the foregoing. Warrants may be issued
independently or together with any securities and may be attached to or
separate from such securities. Each series of warrants will be issued under a
separate warrant agreement to be entered into between usand a warrant agent we
select. Unless otherwise specified in the applicable prospectus supplement,
the warrant agreements and the warrants will be governed by and construed in
accordance with the law of the State of New York.
You should review the applicable prospectus supplement for the specific terms
of any warrants that may be offered, including:
. the title of the warrants;
. the aggregate number of the warrants;
. the price or prices at which the warrants will be issued;
. the currency or currencies, including composite currencies, in which the price of the warrants may be payable;
. our securities or rights (including rights to receive payment in cash
or securities based on the value, rate orprice of one or more specified
commodities, currencies or indices) or securities of other issuers or any
combination of the foregoing purchasable upon exercise of such warrants;
. the price at which and the currency or currencies, including composite currencies,
in which the securitiespurchasable upon exercise of the warrants may be purchased;
. the date on which the right to exercise the warrants will commence and the date on which that right will expire;
. if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
. if applicable, the designation and terms of the securities with which the
warrants are issued and the number ofwarrants issued with each such security;
. if applicable, the date on and after which the warrants and the related securities will be separatelytransferable;
. information with respect to book-entry procedures, if any;
. if applicable, a discussion of certain United States federal income tax considerations; and
. any other terms of the warrants, including terms, procedures and
limitations relating to the exchange andexercise of the warrants.
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DESCRIPTION OF ALLEGION PLC SHARE CAPITAL
The following description of Allegion plc's share capital is a summary. This
summary is not complete and is subject to the complete textof Allegion plc's
memorandum and articles of association previously filed with the Commission
and to the Companies Act 2014 of Ireland (as amended) (the "Irish Companies
Act"). The Irish Companies Act can be accessed online for freeat http://www.iris
hstatutebook.ie or can be purchased in hardcopy format from the Irish
Government Publications Office by calling +353 76 46 942 3100 or by
e-mailing
publications@opw.ie. We encourage you toread those laws and documents carefully.
There were 87,554,388 ordinary shares of Allegion plc outstanding as of
February 14, 2024.There are no preferred shares outstanding.
Capital Structure
Authorized Share Capital.
The authorized share capital of Allegion plc is 40,000 and $4,010,000,
divided into 40,000 ordinaryshares with a nominal value of 1.00 per share,
400,000,000 ordinary shares with a nominal value of $0.01 per share and
10,000,000 preferred shares with a nominal value of $0.001 per share.
Allegion plc may issue shares subject to the maximum prescribed by its
authorized share capital contained in its memorandum of association andsubject
to the maximum authorized by shareholders from time to time.
As a matter of Irish company law, the directors of a company mayissue new
ordinary or preferred shares without shareholder approval once authorized to
do so by the articles of association of the company or by an ordinary
resolution adopted by the shareholders at a general meeting. An ordinary
resolution requiresover 50% of the votes of a company's shareholders cast at a
general meeting. The authority conferred can be granted for a maximum period
of five years, at which point it must be renewed by the shareholders of the
company by an ordinaryresolution. The articles of association authorize the
board of directors of Allegion plc to issue new ordinary or preferred shares
without shareholder approval for a period of five years from the date of
adoption of the amended and restated articlesof association. The current
authorization will expire 18 months from June 8, 2023 or at Allegion plc's
2024 annual general meeting, whichever is earlier, unless previously renewed,
varied or revoked. Allegion plc expects to propose therenewal of this
authorization at its annual general meetings in subsequent years, which is the
customary practice for listed Irish companies.
The authorized share capital may be increased or reduced by way of an ordinary
resolution of Allegion plc's shareholders but not belowthe number of shares
then outstanding. The shares comprising the authorized share capital of
Allegion plc may be divided into shares of such nominal value as the
resolution prescribes.
The rights and restrictions to which the ordinary shares are subject are
prescribed in Allegion plc's articles of association. Thearticles of
association entitle the board of directors, without shareholder approval, to
determine the terms of the preferred shares issued by Allegion plc. Preferred
shares may be preferred as to dividends, rights on a winding up or voting in
suchmanner as the directors may resolve. The preferred shares may also be
redeemable at the option of the holder of the preferred shares or at Allegion
plc's option, and may be convertible into or exchangeable for shares of any
other class orclasses of Allegion plc, depending on the terms of such
preferred shares.
Irish law does not recognize fractional shares held of record;accordingly,
Allegion plc's articles of association do not provide for the issuance of
fractional shares of Allegion plc, and the official Irish share register of
Allegion plc will not reflect any fractional shares.
Pre-emption
Rights, Share Warrants and Share Options
Certain statutory
pre-emption
rights apply automatically in favor of Allegion plc's shareholderswhere shares
in Allegion plc are to be issued for cash. However, Allegion plc has
disapplied these
pre-emption
rights in
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its articles of association as permitted under Irish company law. Irish law
provides that this disapplication expires after five years unless renewed by a
special resolution of the shareholdersand the current authorization will
expire 18 months from June 8, 2023 or at Allegion plc's 2024 annual general
meeting, whichever is earlier, unless previously renewed, varied or revoked.
Allegion plc expects to propose the renewal of thewaiver of
pre-emptive
authorization at its annual general meetings in subsequent years, which is the
customary practice in Ireland for listed companies that elect to disapply
statutory
pre-emption
rights. A special resolution requires not less than 75% of the votes cast by
shareholders at a general meeting. If the disapplication is not renewed,
shares issued for cash must be offered to
pre-existing
shareholders
pro-rata
to their existing shareholding before the shares can be issued to any new
shareholders. The statutory
pre-emption
rights do not apply where shares are issued for
non-cash
consideration and do not apply to the issue of
non-equity
shares (that is, shares that have the right to participate only up to a
specified amount in income and capital distributions).
Thearticles of association of Allegion plc provide that, subject to any
shareholder approval requirement under any laws, regulations or the rules of
any stock exchange to which Allegion plc is subject, the board of directors is
authorized, from time totime, in its discretion, to grant such persons, for
such periods and upon such terms as the board of directors deems advisable,
options to purchase such number of shares of any class or classes or of any
series of any class as the board may deemadvisable, and to cause warrants or
other appropriate instruments evidencing such options to be issued. The Irish
Companies Act provides that directors may issue share warrants or options
without shareholder approval once authorized to do so by thearticles of
association or an ordinary resolution of shareholders. Under Irish law, the
board of directors may issue shares upon exercise of validly issued warrants
or options without shareholder approval or authorization.
Allegion plc is subject to the rules of the NYSE that require shareholder
approval of certain equity compensation plans.
Dividends
Holders of ordinary shares atthe record date will rank pari passu for
dividends paid on the ordinary shares. Under Irish law, dividends and
distributions may only be made from distributable reserves. Distributable
reserves, broadly, means the accumulated realized profits ofAllegion plc less
accumulated realized losses. In addition, no distribution or dividend may be
made unless Allegion plc's net assets are equal to, or in excess of, the
aggregate of its share capital which has been paid up or which is payable
inthe future plus undistributable reserves and the distribution does not
reduce Allegion plc's net assets below such aggregate. Undistributable
reserves include a company's undenominated capital and the amount by which
Allegion plc'saccumulated unrealized profits, so far as not previously
utilized by any capitalization, exceed Allegion plc's accumulated unrealized
losses, so far as not previously written off in a reduction or reorganization
of capital.
The determination as to whether or not Allegion plc has sufficient
distributable reserves to fund a dividend must be made by reference to
the"relevant financial statements" of Allegion plc. The "relevant financial
statements" will be either the last set of Allegion plc's unconsolidated
annual audited financial statements or unaudited interim financial
statementsprepared in accordance with the Irish Companies Act and Generally
Accepted Accounting Principles in Ireland, which give a "true and fair view"
of Allegion plc's unconsolidated financial position. The relevant financial
statements mustbe filed in the Companies Registration Office (the official
public registry for companies in Ireland). The most recent relevant financial
statements of Allegion plc that have been filed with the Companies
Registration Office, being its financialstatements for the financial year
ended December 31, 2023, show distributable reserves of approximately $3.9
billion as of December 31, 2023.
The mechanism as to who declares a dividend and when a dividend becomes
payable is governed by the articles of association of Allegion plc.Allegion
plc's articles of association authorize the directors to declare such
dividends as appear justified from the profits without the approval of the
shareholders at a general meeting. The board of directors may also recommend a
dividend tobe approved and declared by the shareholders at a general meeting.
Although the shareholders may direct that the payment be made by distribution
of assets, shares
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or cash, no dividend issued may exceed the amount recommended by the
directors. The dividends declared by directors or shareholders may be paid in
the form of assets, shares or cash.
The directors may deduct from any dividend payable to any shareholder all sums
of money (if any) payable by such shareholder to Allegion plcin relation to
the shares of Allegion plc.
The directors are also entitled to issue shares with preferred rights to
participate individends declared by Allegion plc. The holders of such
preferred shares may, depending on their terms, be entitled to claim arrears
of a declared dividend out of subsequently declared dividends in priority to
ordinary shareholders.
For information about the Irish tax issues relating to dividend payments,
please see "Material Tax Considerations--Irish TaxConsiderations" below.
Share Repurchases and Redemptions
Overview
Article 3(d) of Allegionplc's articles of association provide that any
ordinary share that Allegion plc has acquired or agreed to acquire shall be
deemed to be a redeemable share. Accordingly, for Irish company law purposes,
the repurchase of ordinary shares byAllegion plc will technically be effected
as a redemption of those shares as described below under "--Repurchases and
Redemptions by Allegion plc." If the articles of association of Allegion plc
did not contain this provision,repurchases by Allegion plc would be subject to
many of the same rules that apply to purchases of Allegion plc shares by
subsidiaries described below under "--Purchases by Subsidiaries of Allegion
plc," including the shareholderapproval requirements described below and the
requirement that any
on-market
purchases be effected on a "recognized stock exchange." Except where otherwise
noted, when we refer elsewhere in thisprospectus to repurchasing or buying
back ordinary shares of Allegion plc, we are referring to the redemption of
ordinary shares by Allegion plc pursuant to its articles of association or the
purchase of ordinary shares of Allegion plc by one of itssubsidiaries, in each
case in accordance with Allegion plc's articles of association and Irish
company law as described below.
Repurchases andRedemptions by Allegion plc
Under Irish law, a company can issue redeemable shares and redeem them out of
distributable reserves(which are described above under "--Dividends") or the
proceeds of a new issue of shares for that purpose. Irish law also provides
that Allegion plc cannot redeem any of its shares if as a result of such
redemption, the nominal valueof its issued share capital which is not
redeemable would be less than 10% of the nominal value of its total issued
share capital. Shareholder approval will not be required to redeem Allegion
plc ordinary shares pursuant to the articles ofassociation.
The board of directors of Allegion plc will also be entitled to issue
preferred shares which may be redeemed at eitherAllegion plc's option or the
option of the shareholder, depending on the terms of such preferred shares.
For additional information on redeemable shares, see "--Capital Structure"
above.
Repurchased and redeemed shares may be cancelled or held as treasury shares.
The nominal value of treasury shares held by Allegion plc at anytime must not
exceed 10% of the nominal value of the issued share capital of Allegion plc.
While Allegion plc holds shares as treasury shares, it cannot exercise any
voting rights in respect of those shares. Treasury shares may be cancelled
byAllegion plc or
re-issued
subject to certain conditions.
Purchases by Subsidiaries of Allegion plc
Under Irish law, it may be permissible for an Irish or
non-Irish
subsidiary to purchaseshares of Allegion plc either
on-market
or
off-market.
A general authority of the shareholders of Allegion plc is required to allow a
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subsidiary of Allegion plc to make
on-market
purchases of Allegion plc shares; however, as long as this general authority
has been granted, no specificshareholder authority for a particular
on-market
purchase of Allegion plc shares by a subsidiary of Allegion plc is required.
If we choose to repurchase shares through a subsidiary, we will seek such
generalauthority, which would expire no later than 5 years after the date on
which it was granted. In order for a subsidiary of Allegion plc to make an
on-market
purchase of Allegion plc shares, such shares must bepurchased on a market that
has been recognized for the purposes of section 1072 of the Irish Companies
Act. The NYSE, on which shares of Allegion plc are listed, has been recognized
for this purpose by Irish company law. For an
off-market
purchase by a subsidiary of Allegion plc, the proposed purchase contract must
be authorized by special resolution of the shareholders of Allegion plc before
the contract is entered into. The person whoseshares are to be bought back
cannot vote in favor of the special resolution and, from the date of the
notice of general meeting at which the resolution is to be proposed, the
purchase contract must be furnished to shareholders of Allegion plc onrequest
or made available for inspection by shareholders at the registered office of
Allegion plc and at the general meeting of shareholders itself.
The number of shares held by the subsidiaries of Allegion plc at any time will
count as treasury shares and will be included in anycalculation of the
permitted treasury share threshold of 10% of the company capital of Allegion
plc. While a subsidiary holds shares of Allegion plc, it cannot exercise any
voting rights in respect of those shares. The acquisition of the shares
ofAllegion plc by a subsidiary must be funded out of distributable reserves of
the subsidiary.
Existing Share Repurchase Program
The board of directors of Allegion plc has authorized a program to repurchase
up to $500 million of its ordinary shares. Based on marketconditions, share
repurchases will be made from time to time in the open market and in privately
negotiated transactions at the discretion of management. The repurchase
program does not have a prescribed expiration date. As of December 31,2023,
Allegion plc had approximately $460.0 million available under this repurchase
program.
As noted above, because repurchases ofAllegion plc shares by Allegion plc will
technically be effected as a redemption of those shares pursuant to Article
3(d) of the articles of association, shareholder approval for such repurchases
will not be required.
Bonus Shares
Under Allegion plc'sarticles of association, the board of directors may
resolve to capitalize any amount credited to any of Allegion plc's reserve
accounts or profit and loss account which is not available for distribution
through the issuance of fully
paid-up
bonus shares on the same basis of entitlement as would apply in respect of a
dividend distribution.
Consolidation and Division; Subdivision
Under its articles of association, Allegion plc may by ordinary resolution
consolidate and divide all or any of its share capital into sharesof larger
nominal value than its existing shares or subdivide its shares into smaller
amounts than is fixed by its articles of association.
Reductionof Share Capital
Allegion plc may, by ordinary resolution, reduce its authorized share capital
in any way. Allegion plc also may, byspecial resolution and subject to
confirmation by the High Court of Ireland, reduce or cancel its company
capital (which includes share premium) in any way. Under Irish law,
distributable reserves, discussed above in "--Dividends", canbe created by way
of a reduction of company capital, including a reduction of undenominated
capital (which includes share premium).
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General Meetings of Shareholders
Allegion plc is required to hold an annual general meeting at intervals of no
more than fifteen months, provided that an annual general meetingis held in
each calendar year following the first annual general meeting. Any annual
general meeting may be held outside Ireland if Allegion plc makes arrangements
to ensure that shareholders can participate in any such meeting by
technologicalmeans without leaving Ireland. Because of the fifteen-month
requirement described in this paragraph, Allegion plc's articles of
association include a provision reflecting this requirement of Irish law. At
any general meeting, only such businessshall be conducted as shall have been
brought before the meeting (a) by or at the direction of the board, or (b) by
any member entitled to vote at such meeting who complies with the procedures
set forth in the articles of association.
Extraordinary general meetings of Allegion plc may be convened by (i) the
chairman of the board of directors, (ii) the board ofdirectors, (iii) on the
requisition of one or more shareholders holding not less than 10% of the
paid-up
share capital of Allegion plc carrying voting rights, (iv) on requisition of
Allegionplc's auditors upon their resignation, or (v) in certain limited
circumstances, the High Court of Ireland. Extraordinary general meetings are
generally held for the purposes of approving shareholder resolutions as may be
required from timeto time.
Notice of a general meeting must be given to all of the shareholders of
Allegion plc and to its auditors. The articles ofassociation of Allegion plc
provide that the maximum notice period is 60 days. Under Irish law, the
minimum notice periods are 21 days' notice in writing for an annual general
meeting or an extraordinary general meeting to approve a specialresolution and
14 days' notice in writing for any other extraordinary general meeting.
General meetings may be called by shorter notice, but only with the consent of
Allegion plc's auditors and all of the shareholders of Allegion plcentitled to
attend and vote thereat. Because of the
21-day
and
14-day
requirements described in this paragraph, Allegion plc's articles of
association includeprovisions reflecting these requirements of Irish law.
In the case of an extraordinary general meeting convened on the requisition of
oneor more shareholders of Allegion plc, the proposed purpose of the meeting
must be set out in the requisition notice. The requisition notice can contain
any resolution. Upon receipt of this requisition notice, the board of
directors has 21 days toconvene a meeting of shareholders to vote on the
matters set out in the requisition notice. This meeting must be held within
two months of the receipt of the requisition notice. If the board of directors
does not convene the meeting within such
21-day
period, the requisitioning shareholders, or any of them representing more than
one half of the total voting rights of all of them, may themselves convene a
meeting, which meeting must be held within threemonths of the receipt of the
requisition notice.
The only matters which must, as a matter of Irish company law, be transacted
at anannual general meeting are the consideration of the statutory financial
statements and the reports of the auditors and directors thereon, the review
by the shareholders of the company's affairs, the appointment or
re-appointment
of auditors and the fixing of the auditor's remuneration (or delegation of
same). If no resolution is made in respect of the reappointment of an auditor
at an annual general meeting, theprevious auditor will be deemed to have
continued in office.
If the directors become aware that the net assets of Allegion plc are halfor
less of the amount of Allegion plc's share capital that has been paid up or
which is payable in the future, the board of directors must convene an
extraordinary general meeting of shareholders not later than 28 days from the
date that theylearn of this fact. This meeting must be convened for the
purposes of considering whether any, and if so what, measures should be taken
to address the situation.
Voting
Where a vote is to be taken at ageneral meeting, every shareholder has one
vote for each ordinary share that he or she holds as of the record date for
the meeting. Voting rights may be exercised by shareholders registered
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in Allegion plc's share register as of the record date for the meeting or by a
duly appointed proxy of such a registered shareholder, which proxy need not be
a shareholder. All proxies mustbe appointed in the manner prescribed by
Allegion plc's articles of association and the Irish Companies Act. The
articles of association of Allegion plc authorize the board of directors to
permit the appointment of proxies by the shareholdersto be notified to
Allegion plc electronically.
In accordance with the articles of association of Allegion plc, the directors
of Allegionplc may from time to time cause Allegion plc to issue preferred
shares. These preferred shares may have such voting rights as may be specified
in the terms of such preferred shares (
e.g.
, they may carry more votes per share than ordinaryshares or may entitle their
holders to a class vote on such matters as may be specified in the terms of
the preferred shares).
Treasuryshares and shares of Allegion plc held by its subsidiaries will not be
entitled to vote at general meetings of shareholders.
Irishcompany law requires "special resolutions" of the shareholders at a
general meeting to approve certain matters. A special resolution requires not
less than 75% of the votes cast of shareholders present in person or by proxy
at a generalmeeting. This may be contrasted with "ordinary resolutions," which
require a simple majority of the votes cast of shareholders present in person
or by proxy at a general meeting. Examples of matters requiring special
resolutions include:
. amending the objects of Allegion plc (
i.e.
, main purposes);
. amending the memorandum of association and articles of association of Allegion plc;
. approving the name change of Allegion plc;
. authorizing the entering into of a guarantee or provision of security in connection with a loan, quasi-loan orcredit transaction
to a director or a person who is deemed to be "connected" to a director for the purposes of the Irish Companies Act;
. disapplication of
pre-emption
rights on the issuance of new shares;
. re-registration
of Allegion plc from a public limited company to aprivate company;
. variation of class rights attaching to classes of shares (where the articles of association do not provideotherwise);
. purchasing Allegion plc shares
off-market;
. the reduction of company capital;
. resolving that Allegion plc be wound up by the Irish courts;
. resolving in favor of a shareholders' voluntary
winding-up;
. re-designation
of shares into different share classes;
. setting the
re-issue
price of treasury shares; and
. mergers with companies incorporated in Ireland or the European Economic Area (EEA) (each as described below).
Variation of Rights Attaching to a Class or Series of Shares
Variation of all or any special rights attached to any class or series of
Allegion plc shares are addressed in the articles of association ofAllegion
plc, as well as the Irish Companies Act. Any variation of class rights
attaching to Allegion plc issued shares must be approved by a special
resolution of the shareholders of the class or series affected.
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Quorum for General Meetings
The presence, in person or by proxy, of the holders of Allegion plc shares
entitling them to exercise a majority of the voting powerconstitutes a quorum
for the conduct of business. No business may take place at a general meeting
if a quorum is not present in person or by proxy. The board of directors has
no authority to waive quorum requirements stipulated in Allegionplc's articles
of association. Abstentions and broker
non-votes
will be counted as present for purposes of determining whether there is a
quorum in respect of the proposals.
Requirements for Advance Notification of Director Nominations and Proposals of
Shareholders
Irish law and Allegion plc's articles of association establish advance notice
procedures with respect to shareholder proposals (includingnomination of
candidates for election as directors other than nominations made by or at the
direction of Allegion plc's board of directors or a committee of its board of
directors).
Unanimous Shareholder Consent to Action Without Meeting
The Irish Companies Act provides that shareholders of Allegion plc may approve
an ordinary or special resolution of shareholders without ameeting only if (a)
all shareholders sign the written resolution, and (b) Allegion plc's articles
of association do not prevent written resolutions of shareholders. Allegion
plc's articles of association permit unanimous writtenresolutions of
shareholders.
Inspection of Books and Records
Under Irish law, shareholders have the right to: (1) receive a copy of the
memorandum and articles of association; (2) inspect andobtain copies of the
minutes of general meetings and resolutions of Allegion plc; (3) inspect and
receive a copy of the register of shareholders, register of directors and
secretaries, register of directors' interests and other statutoryregisters
maintained by Allegion plc; (4) receive copies of statutory financial
statements and the directors' and auditors' reports thereon which have
previously been sent to shareholders prior to an annual general meeting of
Allegionplc; and (5) receive balance sheets of a subsidiary of Allegion plc
that have previously been sent to shareholders prior to an annual general
meeting for the preceding ten years. Allegion plc's auditors also have the
right to inspect allaccounting records of Allegion plc. The auditors' report
must be circulated to the shareholders 21 days before the annual general
meeting, along with Allegion plc's financial statements prepared in accordance
with the Irish Companies Act,and must be laid before the shareholders at the
annual general meeting.
Acquisitions and Appraisal Rights
There are a number of mechanisms for acquiring an Irish public limited
company, including:
(a) a court-approved scheme of arrangement under the Irish Companies Act. A scheme of
arrangement with shareholdersrequires a court order from the High Court of Ireland
and the approval of: (1) 75% of the voting shareholders by value; and (2) 50% in
number of the voting shareholders, at a meeting called to approve the scheme;
(b) through a tender offer by a third party for all of the shares of Allegion plc. Where the
holders of 80% or moreof Allegion plc's shares have accepted an offer by a bidder for their
shares, the remaining shareholders may be statutorily required to also transfer their
shares to such bidder. If the bidder does not exercise its "squeeze out"right, then the
non-accepting
shareholders also have a statutory right to require the bidder to acquire their shares
on the same terms. If Allegion plc shares were listed on the official list of the
IrishStock Exchange (trading as Euronext Dublin) or another regulated stock exchange
in the European Economic Area (EEA), this threshold would be increased to 90%; and
(c) through a merger with an Irish incorporated company under the Irish Companies Act or with an EEA incorporatedcompany under
Directive (EU) 2017/1132 (as amended). In most circumstances, such mergers must be approved by a special resolution.
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Under Irish law, there is no requirement for a company's shareholders to
approve asale, lease or exchange of all or substantially all of a company's
property and assets. However, Allegion plc's articles of association provide
that the affirmative vote of a majority of the votes cast by members at a
general meeting inperson or by proxy is required to approve a sale, lease or
exchange of all or substantially all of its property or assets.
Generally,under Irish law, shareholders of an Irish company do not have
appraisal rights. However, under the European Union (Cross-Border Conversions,
Mergers and Divisions) Regulations 2023 of Ireland (as amended) governing the
merger of an Irish publiccompany limited by shares, such as Allegion plc, and
a company incorporated in another member state of the EEA, a shareholder (a)
of the
non-surviving
company who voted against the special resolutionapproving the merger, or (b)
of a
non-surviving
company in which 90% of the shares is held by the company that is the other
party to the merger, has the right to request that the surviving company
acquireits shares for cash at a price determined in accordance with the share
exchange ratio set out in the merger agreement.
Under the IrishCompanies Act, which governs the merger of Irish companies
limited by shares, a shareholder of either of the merging companies who voted
against the special resolution approving the merger, or any shareholder, other
than the successor company, wherethe successor company held 90% or more of the
voting shares in the transferor company, may, not later than 15 days after the
shareholder meeting of the relevant merging company at which the merger was
approved, request in writing that the successorcompany acquire his, her or its
shares for cash.
Disclosure of Interests in Shares
Under the Irish Companies Act, subject to certain limited exceptions, a
shareholder must notify Allegion plc (but not the public at large) ifas a
result of a transaction, the shareholder will be interested in 3% or more of
any class of Allegion plc shares carrying voting rights; or if as a result of
a transaction, a shareholder who was interested in more than 3% of any class
of Allegionplc shares carrying voting rights ceases to be so interested. Where
a shareholder is interested in more than 3% of any class of Allegion plc
shares carrying voting rights, any alteration of his or her interest that
brings his or her total holdingthrough the nearest whole percentage number,
whether an increase or a reduction, must also notify Allegion plc (but not the
public at large). The relevant percentage figure is calculated by reference to
the aggregate nominal value of the class ofshares in which the shareholder is
interested as a proportion of the entire nominal value of the issued shares of
that class. Where the percentage level of the shareholder's interest does not
amount to a whole percentage, this figure may berounded down to the next whole
number. All such disclosures must be notified to Allegion plc within five
business days of the transaction or alteration of the shareholder's interests
that gave rise to the requirement to notify. Where a personfails to comply
with the notification requirements described above, no right or interest of
any kind whatsoever in respect of any of Allegion plc shares concerned, held
by such person, will be enforceable by such person, whether directly
orindirectly, by action or legal proceeding. However, such person may apply to
the court to have the rights attaching to the shares concerned reinstated.
In addition to the above disclosure requirement, Allegion plc, under the Irish
Companies Act, may by notice in writing require a person whomit knows or has
reasonable cause to believe to be or, at any time during the three years
immediately preceding the date on which such notice is issued, to have been
interested in shares comprised in Allegion plc relevant share capital: (a)
toindicate whether or not it is the case, and (b) where such person holds or
has during that time held an interest in any class of Allegion plc shares
carrying voting rights, to give such further information as may be required by
Allegion plc,including particulars of such person's own past or present
interests in such class of Allegion plc shares. Any information given in
response to the notice is required to be given in writing within such
reasonable time as may be specified in thenotice.
Where such a notice is served by Allegion plc on a person who is or was
interested in any class of Allegion plc shares carryingvoting rights and that
person fails to give Allegion plc any information required within the
reasonable time specified, Allegion plc may apply to the court for an order
directing that the affected shares be subject to certain restrictions.
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Under the Irish Companies Act, the restrictions that may be placed on the
shares by thecourt are:
(a) any transfer of those shares, or in the case of unissued shares any transfer
of the right to be issued withshares and any issue of shares, is void;
(b) no voting rights are exercisable in respect of those shares;
(c) no further shares may be issued in right of those shares or in pursuance of any offer made to the holder ofthose shares; and
(d) no payment may be made of any sums due from us on those shares, whether in respect of capital or otherwise.
Where Allegion plc shares are subject to these restrictions, the court may
order the shares to be sold and may alsodirect that the shares will cease to
be subject to these restrictions.
Anti-Takeover Provisions
Business Combinations with Interested Shareholders
Allegion plc's articles of association provide that the affirmative vote of
the holders of
two-thirds
of the shares then in issue of all classes of shares entitled to vote,
considered for purposes of this provision as one class, is required for
Allegion plc to engage in any "businesscombination" with any interested
shareholder (generally, a 10% or greater shareholder), provided that the above
vote requirement does not apply to:
. any business combination with an interested shareholder that has been approved by the board of directors; or
. any agreement for the amalgamation, merger or consolidation of any of Allegion
plc's subsidiaries withAllegion plc or with another of its subsidiaries if (1) the
relevant provisions of Allegion plc's articles of association will not be changed
or otherwise affected by or by virtue of the amalgamation, merger or consolidation;
and(2) the holders of greater than 50% of the voting power of Allegion plc or the
subsidiary, as appropriate, immediately prior to the amalgamation, merger or
consolidation continue to hold greater than 50% of the voting power of the
amalgamatedcompany immediately following the amalgamation, merger or consolidation.
Allegion plc's articles of associationprovide that "business combination" means:
. any amalgamation, merger or consolidation of Allegion plc or one of
its subsidiaries with an interestedshareholder or with any person
that is, or would be after such amalgamation, merger or consolidation,
an affiliate or associate of an interested shareholder;
. any transfer or other disposition to or with an interested shareholder or any affiliate or associate of
aninterested shareholder of all or any material part of Allegion plc's assets or one of its subsidiaries; and
. any issuance or transfer of our shares upon conversion of or in
exchange for the securities or assets of anyinterested shareholder,
or with any company that is, or would be after such merger or
consolidation, an affiliate or associate of an interested shareholder.
Share Issuances
Subject to theIrish Takeover Rules described below, the board of directors has
the power to cause Allegion plc to issue any of our authorized and unissued
shares on such terms and conditions as the board of directors may determine
(as described under"--Capital Structure" above) and any such action must be
taken in Allegion plc's best interests. It is possible, however, that the
terms and conditions of any issue of preferred shares could discourage a
takeover or othertransaction that holders of some or a majority of the
ordinary shares believe to be in their best interests or in which holders
might receive a premium for their shares over the then market price of the
shares.
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Irish Takeover Rules
A transaction by virtue of which a third party is seeking to acquire 30% or
more of the voting rights of Allegion plc will be governed by theIrish
Takeover Panel Act 1997 and the Irish Takeover Rules made thereunder and will
be regulated by the Irish Takeover Panel. The "General Principles" of the
Irish Takeover Rules and certain important aspects of the Irish Takeover
Rulesare described below.
General Principles
. The Irish Takeover Rules are built on the following General Principles which
will applyto any transaction regulated by the Irish Takeover Panel:
. in the event of an offer, all classes of shareholders of the target company should be afforded equivalenttreatment
and, if a person acquires control of a company, the other holders of securities must be protected;
. the holders of securities in the target company must have sufficient time and
information to allow them to makean informed decision regarding the offer;
. the board of directors of a company must act in the interests of the company as a whole and must not denyshareholders
the opportunity to decide on the merits of an offer. If the board of directors of the target company
advises the holders of securities as regards the offer, it must advise on the effects of the implementation
of the offer on employment,employment conditions and the locations of the target company's place of business;
. false markets (
i.e.
, a market based on erroneous, imperfect or unequally disclosed information) in thesecurities
of the target company or any other company concerned by the offer must not be created;
. a bidder can only announce an offer after ensuring that he or she can pay in full the consideration offered;
. a target company may not be hindered longer than is reasonable by an offer
for its securities. This is arecognition that an offer will disrupt the
day-to-day
running of a target company particularly if the offer is hostile and the board of
directors of the target companymust divert its attention to resist the offer; and
. acquisitions of securities (whether such acquisition is to be effected by one transaction or a series oftransactions)
will only be allowed to take place at an acceptable speed and subject to adequate and timely disclosure. Specifically,
the acquisition of 10% or more of the issued voting shares within a seven day period that would take ashareholders'
holding to or above 15% of the issued voting shares (but less than 30%) is prohibited, subject to certain exemptions.
Mandatory Bid
. If an acquisition of shares or other securities were to increase the
aggregate holding/entitlement of an acquirer andits concert parties to 30% or
more of the voting rights of Allegion plc, the acquirer and, depending on the
circumstances, its concert parties, would be required (except with the consent
of the Irish Takeover Panel) to make a cash offer for theoutstanding shares at
a price not less than the highest price paid for the shares by the acquirer or
its concert parties during the previous 12 months. This requirement would also
be triggered by an acquisition of shares or other securities by aperson
holding (together with its concert parties) shares or other securities
carrying between 30% and 50% of the voting rights of Allegion plc if the
effect of such acquisition were to increase the percentage of the voting
rights held by thatperson (together with its concert parties) by 0.05% within
a twelve-month period. A single holder (that is, a holder excluding any
parties acting in concert with the holder) holding or entitled to more than
50% of the voting rights of a company isnot subject to this rule.
Voluntary Bid; Requirements to Make a Cash Offer and Minimum Price Requirements
. A voluntary offer is anoffer that is not a mandatory offer. If a bidder or
any of its concert parties has acquired Allegion plc shares within the period
of three months prior to the commencement of the voluntary offer, the offer
price must be not less than the highestprice paid for that class of Allegion
plc shares by the bidder or its concert parties during that
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period. The Irish Takeover Panel has the power to extend the "look back"
period to 12 months if the Irish Takeover Panel, having regard to the General
Principles, believes it isappropriate to do so.
If the bidder or any of its concert parties has acquired (i) more than 10% of
a class of Allegion plc sharesduring the period of 12 months prior to the
commencement of the voluntary offer period, or (ii) Allegion plc shares the
subject of the voluntary offer, at any time after the commencement of the
voluntary offer period, the offer must be in cash(or accompanied by a full
cash alternative) and the price per share of the same class of Allegion plc
shares must not be less than the highest price paid by the bidder or its
concert parties during, in the case of (i), the period of 12 months priorto
the commencement of the voluntary offer and, in the case of (ii), the offer
period. The Irish Takeover Panel may apply this rule to a bidder who, together
with its concert parties, has acquired less than 10% of the total shares of a
class ofAllegion plc shares in the 12 month period prior to the commencement
of the voluntary offer period if the Irish Takeover Panel, having regard to
the General Principles, considers it just and proper to do so.
A voluntary offer period will generally commence on the date of the first
announcement of the offer or proposed offer.
Under the Irish Takeover Rules, there is also a mandatory `put up or shut up'
regime pursuant to which any announcement by a companythat commences an offer
period must identify the potential bidder in talks with the company or from
which an approach has been received. Bidders will have a period of 42 days
following the announcement in which they are first identified to announcea
firm intention to make an offer for the company or announce that they do not
intend to make an offer, in which case the bidder will be restricted from
making an offer for the company in the following 6 months.
Substantial Acquisition Rules
. The Irish Takeover Rules also contain rules governing substantial
acquisitions of shares that restrictthe speed at which a person may increase
his or her holding of voting shares and rights over voting shares to an
aggregate of between 15% and 30% of the voting rights of Allegion plc. Except
in certain circumstances, an acquisition or series ofacquisitions of shares or
rights over shares representing 10% or more of the voting rights is prohibited
if such acquisition(s), when aggregated with shares or rights already held,
would result in the acquirer holding 15% or more but less than 30%of the
voting rights of Allegion plc and such acquisitions are made within a period
of seven days. These rules also require accelerated disclosure of acquisitions
of shares or rights over shares relating to such acquisitions.
Frustrating Action
. Under the Irish Takeover Rules, Allegion plc's board of directors is not
permitted to take any action thatmight frustrate an offer for Allegion plc
shares once the board of directors has received an approach that may lead to
an offer, or has reason to believe an offer is imminent, except as noted
below. Potentially frustrating actions such as(i) the issue of shares, options
or convertible securities, (ii) material disposals, (iii) entering into
contracts other than in the ordinary course of business, or (iv) any action,
other than seeking alternative offers, whichmay result in frustration of an
offer. Exceptions to this prohibition are available:
(a) where the action is approved by the offeree at a general meeting; or
(b) with the consent of the Irish Takeover Panel where:
(i) the Irish Takeover Panel is satisfied the action would not constitute a frustrating action;
(ii) the holders of 50% of the voting rights state in writing that they approve
the proposed action and would votein favor of it at a general meeting;
(iii) such action is in accordance with a contract entered into prior to the announcement of the offer; or
(iv) the decision to take such action was made before the announcement of the offer and
either has been at leastpartially implemented or is in the ordinary course of business.
For other provisions that could be considered to havean anti-takeover effect,
see above at
"--Pre-emption
Rights, Share Warrants and Share Options," "--Disclosure of Interests in
Shares," "--Requirements for Advance
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Notification of Director Nominations and Proposals of Shareholders" and
"--Unanimous Shareholder Consent to Action Without Meeting," in addition to
"--Election ofDirectors" and "--Vacancies on the Board of Directors" below.
Corporate Governance
The articles of association of Allegion plc delegate the
day-to-day
management of Allegion plc to the board of directors. The board of directors
may then delegate management to committees of the board of directors,
executivesor to a management team, but regardless, the directors will remain
responsible, as a matter of Irish law, for the proper management of Allegion
plc's affairs. Allegion plc currently has an Audit and Finance Committee, a
Compensation and HumanCapital Committee, and a Corporate Governance and
Nominating Committee. Allegion plc has also adopted Corporate Governance
Guidelines that provide the corporate governance framework for Allegion plc.
Election of Directors
The IrishCompanies Act provides for a minimum of two directors for public
limited companies, such as Allegion plc. Allegion plc's articles of
association provide for a minimum of two directors and a maximum of fifteen
directors with the exact number ofdirectors determined from time to time
solely by the board of directors. The shareholders of Allegion plc may from
time to time increase or reduce the maximum number, or increase the minimum
number, of directors by a special resolution amending thearticles of
association.
Directors are elected by the affirmative vote of a majority of the votes cast
by shareholders in uncontestedelections and by the affirmative vote of a
plurality of the votes of the shares present in person or represented by proxy
in contested elections (a meeting where the number of director nominees
exceeds the number of directors to be elected). Inuncontested elections, any
nominee for director who receives a majority of the votes cast is elected to
the board of directors. In uncontested elections, the nominees receiving the
most votes for the available seats are elected to the board ofdirectors.
Director Nominations by Shareholders
Allegion plc's articles of association contain advance notice requirements for
shareholders to make director nominations at annual generalmeetings. Under
Allegion plc's articles of association, a shareholder must deliver to Allegion
plc's secretary a notice of such shareholder's intent to make such nomination
not later than 90 days in advance of the anniversary of theimmediately
preceding annual general meeting or if the date of the annual general meeting
occurs more than 30 days before or 60 days after the anniversary of such
immediately preceding annual general meeting, not later than the close of
business onthe seventh day following the date on which notice of the annual
general meeting is given to the shareholders of Allegion plc.
Eachnotice must contain certain information, including (i) the name and
address of the shareholder who intends to make a nomination and of the person
or persons to be nominated for election, (ii) a representation that the
shareholder is aholder of record of shares of Allegion plc and intends to
appear in person or by proxy at the meeting to nominate the person or persons
specified in the notice, (iii) a description of all arrangements or
understandings between the shareholderand each nominee, (iv) such other
information regarding each nominee proposed as would have been required to be
included in a proxy statement filed pursuant to the proxy rules of the SEC if
such nominee had been nominated for election as adirector by the board of
directors, and (v) the consent of each nominee to serve as a director if so
elected.
Vacancies on the Board of Directors
Allegion plc's articles of association provide that the directors have the
authority to appoint one or more directors to theboard of directors, subject
to the maximum number of directors allowed for in the articles of
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association. A vacancy caused by the removal of a director may be filled at
the meeting at which the director is removed by resolution of shareholders. If
not, it may be filled by the board ofdirectors.
Any director so appointed will hold office until the next annual general
meeting. During any vacancy on the board ofdirectors, the remaining directors
will have full power to act as the board of directors.
Removal of Directors
The Irish Companies Act provides that, notwithstanding anything contained in
the articles of association of a company or in any agreementbetween that
company and a director, the shareholders may by an ordinary resolution remove
a director from office before the expiration of his or her term. Accordingly,
shareholders of Allegion plc may by an ordinary resolution remove a
directorfrom office before the expiration of his or her term. The power of
removal is without prejudice to any claim for damages for breach of contract (
e.g.
, employment contract), which the director may have against Allegion plc in
respect of his orher removal.
Duration; Dissolution; Rights upon Liquidation
Allegion plc's corporate existence has unlimited duration. Allegion plc may be
dissolved at any time by way of either a shareholders'voluntary winding up or
a creditors' voluntary winding up. In the case of a shareholders' voluntary
winding up, a special resolution of the shareholders is required (
i.e.
, 75% of the votes cast, in person or by proxy, at a generalmeeting of
shareholders). Allegion plc may also be dissolved by way of court order on the
application of a creditor, or by the Companies Registration Office as an
enforcement measure where Allegion plc has failed to file certain returns.
TheCorporate Enforcement Agency of Ireland may also seek to have Allegion plc
wound-up
where the affairs of Allegion plc have been investigated by an inspector and
it appears from the report or any informationobtained by the Corporate
Enforcement Agency of Ireland that Allegion plc should be
wound-up.
Therights of the shareholders to a return of Allegion plc's assets on
dissolution or winding up, following the settlement of all claims of
creditors, may be prescribed in Allegion plc's articles of association or the
terms of any preferredshares issued by the directors from time to time. The
holders of preferred shares in particular may have the right to priority in a
dissolution or winding up of Allegion plc. If the articles of association
contain no specific provisions in respectof a dissolution or winding up, then,
subject to the priorities of any creditors, the assets will be distributed to
shareholders in proportion to the
paid-up
nominal value of the shares held. Allegionplc's articles of association
provide that the ordinary shareholders are entitled to participate pro rata in
a winding up, but their right to do so may be subject to the rights of any
preferred shareholders to participate under the terms of anyseries or class of
preferred shares.
Uncertificated Shares
Holders of ordinary shares of Allegion plc will not have the right to require
Allegion plc to issue certificates for their shares. Allegion plcwill only
issue uncertificated ordinary shares.
Stock Exchange Listing
The Allegion plc ordinary shares are listed on the NYSE under the symbol "ALLE."
No Sinking Fund
The ordinary shares haveno sinking fund provisions.
No Liability for Further Calls or Assessments
All of our issued ordinary shares are duly and validly issued and fully paid.
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Transfer and Registration of Shares
Allegion plc's official share register will be maintained by its transfer
agent or the transfer agent's affiliates. Registration inthis share register
will be determinative of membership in Allegion plc. A shareholder of Allegion
plc who holds shares beneficially will not be the holder of record of such
shares. Instead, the depository (
e.g.
, Cede & Co., asnominee for DTC) or other nominee will be the holder of record
of such shares. Accordingly, a transfer of shares from a person who holds such
shares beneficially to a person who also holds such shares beneficially
through the same depository orother nominee will not be registered in Allegion
plc's official share register, as the depository or other nominee will remain
the record holder of such shares.
A written instrument of transfer is required under Irish law in order to
register on Allegion plc's official share register any transferof shares (i)
from a person who holds such shares directly to any other person, (ii) from a
person who holds such shares beneficially to a person who holds such shares
directly, or (iii) from a person who holds such sharesbeneficially to another
person who holds such shares beneficially where the transfer involves a change
in the depository or other nominee that is the record owner of the transferred
shares. An instrument of transfer is also required for ashareholder who
directly holds shares to transfer those shares into his or her own broker
account (or vice versa). Such instruments of transfer may give rise to Irish
stamp duty, which must be paid prior to registration of the transfer on
Allegionplc's official Irish share register.
Allegion plc currently intends to pay (or cause one of its affiliates to pay)
stamp duty, ifany, in connection with share transfers made in the ordinary
course of trading by a seller who holds shares directly to a buyer who will
hold the acquired shares beneficially or directly or by a seller who holds
shares beneficially to a buyer whowill hold the acquired shares directly. In
other cases, Allegion plc may, in its absolute discretion, pay (or cause one
of its affiliates to pay) any stamp duty. Allegion plc's articles of
association provide that, in the event of any suchpayment, it (i) may seek
reimbursement from the transferor or transferee (at Allegion plc's
discretion), (ii) may
set-off
the amount of the stamp duty against future dividends payable to thetransferor
or transferee (at Allegion plc's discretion), and (iii) will have a lien
against shares of Allegion plc on which it has paid stamp duty. Parties to a
share transfer may assume that any stamp duty arising in respect of
atransaction in Allegion plc shares has been paid unless one or both of such
parties is otherwise notified by Allegion plc.
Allegionplc's articles of association delegate to the secretary, an assistant
secretary and any other persons nominated by the secretary or assistant
secretary the authority to execute an instrument of transfer on behalf of a
transferring party. Inorder to help ensure that the official share register is
regularly updated to reflect trading of Allegion plc shares occurring through
normal electronic systems, Allegion plc intends to regularly produce any
required instruments of transfer inconnection with any transactions for which
it pays stamp duty (subject to the reimbursement and
set-off
rights described above). In the event that Allegion plc notifies one or both
of the parties to a sharetransfer that it believes stamp duty is required to
be paid in connection with such transfer and that it will not pay such stamp
duty, such parties may either themselves arrange for the execution of the
required instrument of transfer (and mayrequest a form of instrument of
transfer from Allegion plc for this purpose) or request that Allegion plc
execute an instrument of transfer on behalf of the transferring party in a
form determined by Allegion plc. In either event, if the parties tothe share
transfer have the instrument of transfer duly stamped (to the extent required)
and then provide it to Allegion plc's transfer agent, the transferee will be
registered as the legal owner of the relevant shares on Allegion plc'sofficial
Irish share register (subject to the matters described below).
Under Irish law, the directors may decline to recognize anyinstrument of
transfer unless (i) it is accompanied by such evidence as the directors may
reasonably require to show the right of the transferor to make the transfer;
(ii) it is in respect of one class of share only; and (iii) a feeof 10 or
such lesser sum as the directors may from time to time require, is paid to the
company. The articles of association of Allegion plc also provide that the
board of directors may decline to register or recognize any instrument
oftransfer and if the directors refuse to register a transfer they shall,
within two months after the date on which the transfer was lodged with
Allegion plc, send the transferee notice of the refusal.
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The registration of transfers may be suspended by the directors at such times
and for suchperiod, not exceeding a total of 30 days in each year, as the
directors may from time to time determine.
Transfer Agent and Registrar
The transfer agent and registrar for the shares of Allegion plc is
Computershare Trust Company, N.A.
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DESCRIPTION OF DEPOSITARY SHARES
The following description of preferred shares represented by depositary shares
sets forth certain general terms and provisions of depositaryagreements,
depositary shares and depositary receipts. This summary does not contain all
of the information that you may find useful. The particular terms of the
depositary shares and related agreements and receipts will be described in
theprospectus supplement relating to those depositary shares. For more
information, you should review the form of deposit agreement and form of
depositary receipts relating to each series of the preferred shares, which
will be filed with the SECpromptly after the offering of that series of
preferred shares. As used in this section only, "we", "our" and "us" refers to
Allegion plc.
General
We may elect to have preferredshares represented by depositary shares. The
preferred shares of any series underlying the depositary shares will be
deposited under a separate deposit agreement between us and a bank or trust
company we select. The prospectus supplement relating toa series of depositary
shares will set forth the name and address of this preferred share depositary.
Subject to the terms of the deposit agreement, each owner of a depositary
share will be entitled, proportionately, to all the rights, preferencesand
privileges of the preferred share represented by such depositary share
(including dividend, voting, redemption, conversion, exchange and liquidation
rights).
The depositary shares will be evidenced by depositary receipts issued pursuant
to the deposit agreement, each of which will represent theapplicable interest
in a number of shares of a particular series of the preferred shares described
in the applicable prospectus supplement.
A holder of depositary shares will be entitled to receive the preferred shares
(but only in whole preferred shares) underlying thosedepositary shares. If the
depositary receipts delivered by the holder evidence a number of depositary
shares in excess of the whole number of preferred shares to be withdrawn, the
depositary will deliver to that holder at the same time a newdepositary
receipt for the excess number of depositary shares.
Unless otherwise specified in the applicable prospectus supplement,
thedepositary agreement, the depositary shares and the depositary receipts
will be governed by and construed in accordance with the law of the State of
New York.
Dividends and Other Distributions
Thepreferred share depositary will distribute all cash dividends or other cash
distributions in respect of the preferred shares to the record holders of
depositary receipts in proportion, insofar as possible, to the number of
depositary shares owned bythose holders.
If there is a distribution other than in cash in respect of the preferred
shares, the preferred share depositary willdistribute property received by it
to the record holders of depositary receipts in proportion, insofar as
possible, to the number of depositary shares owned by those holders, unless
the preferred share depositary determines that it is not feasibleto make such
a distribution. In that case, the preferred share depositary may, with our
approval, adopt any method that it deems equitable and practicable to effect
the distribution, including a public or private sale of the property
anddistribution of the net proceeds from the sale to the holders.
The amount distributed in any of the above cases will be reduced by anyamount
we or the preferred share depositary are required to withhold on account of
taxes.
Conversion and Exchange
If any preferred share underlying the depositary shares is subject to
provisions relating to its conversion or exchange, as set forth in
anapplicable prospectus supplement, each record holder of depositary shares
will have the right or obligation to convert or exchange those depositary
shares pursuant to those provisions.
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Redemption of Depositary Shares
Whenever we redeem a preferred share held by the preferred share depositary,
the preferred share depositary will redeem as of the sameredemption date a
proportionate number of depositary shares representing the preferred shares
that were redeemed. The redemption price per depositary share will be equal to
the aggregate redemption price payable with respect to the number ofpreferred
shares underlying the depositary shares. If fewer than all the depositary
shares are to be redeemed, the depositary shares to be redeemed will be
selected by lot or proportionately as we may determine.
After the date fixed for redemption, the depositary shares called for
redemption will no longer be deemed to be outstanding and all rights ofthe
holders of the depositary shares will cease, except the right to receive the
redemption price.
Voting
Upon receipt of notice of any meeting at which the holders of any preferred
shares underlying the depositary shares are entitled to vote, thepreferred
share depositary will mail the information contained in the notice to the
record holders of the depositary receipts. Each record holder of the
depositary receipts on the record date (which will be the same date as the
record date for thepreferred shares) may then instruct the preferred share
depositary as to the exercise of the voting rights pertaining to the number of
preferred shares underlying that holder's depositary shares. The preferred
share depositary will try to votethe number of preferred shares underlying the
depositary shares in accordance with the instructions, and we will agree to
take all reasonable action which the preferred share depositary deems
necessary to enable the preferred share depositary to doso. The preferred
share depositary will abstain from voting the preferred shares to the extent
that it does not receive specific written instructions from holders of
depositary receipts representing the preferred share.
Record Date
Whenever
. any cash dividend or other cash distribution becomes payable, any distribution other than cash is
made, or anyrights, preferences or privileges are offered with respect to the preferred shares; or
. the preferred share depositary receives notice of any meeting at which
holders of preferred shares are entitledto vote or of which holders of
preferred shares are entitled to notice, or of the mandatory conversion of
or any election by us to call for the redemption of any preferred share,
the preferred share depositary will in each instance fix a record date (which
will be the same as the record date for the preferred shares) for
thedetermination of the holders of depositary receipts:
. who will be entitled to receive dividend, distribution, rights, preferences or privileges or the net proceeds ofany sale; or
. who will be entitled to give instructions for the exercise of voting rights at any such meeting or to
receivenotice of the meeting or the redemption or conversion, subject to the provisions of the deposit agreement.
Amendment and Terminationof the Deposit Agreement
We and the preferred share depositary may at any time agree to amend the form
of depositary receipt and anyprovision of the deposit agreement. However, any
amendment that materially and adversely alters the rights of holders of
depositary shares will not be effective unless the amendment has been approved
by the holders of at least a majority of thedepositary shares then
outstanding. The deposit agreement may be terminated by us or by the preferred
share depositary only if all outstanding shares have been redeemed or if a
final distribution in respect of the underlying preferred shares hasbeen made
to the holders of the depositary shares in connection with the liquidation,
dissolution or winding up of us.
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Charges of Preferred Share Depositary
We will pay all charges of the preferred share depositary including charges in
connection with the initial deposit of the preferred shares, theinitial
issuance of the depositary receipts, the distribution of information to the
holders of depositary receipts with respect to matters on which the preferred
share is entitled to vote, withdrawals of the preferred share by the holders
ofdepositary receipts or redemption or conversion of the preferred share,
except for taxes (including transfer taxes, if any) and other governmental
charges and any other charges expressly provided in the deposit agreement to
be at the expense ofholders of depositary receipts or persons depositing
preferred shares.
Miscellaneous
Neither we nor the preferred share depositary will be liable if either of us
is prevented or delayed by law or any circumstance beyond ourcontrol in
performing any obligations under the deposit agreement. The obligations of the
preferred share depositary under the deposit agreement are limited to
performing its duties under the agreement without negligence or bad faith.
Ourobligations under the deposit agreement are limited to performing our
duties in good faith. Neither we nor the preferred share depositary is
obligated to prosecute or defend any legal proceeding in respect of any
depositary shares or preferredshares unless satisfactory indemnity is
furnished. We and the preferred share depositary may rely on advice of or
information from counsel, accountants or other persons that they believe to be
competent and on documents that they believe to begenuine.
The preferred share depositary may resign at any time or be removed by us,
effective upon the acceptance by its successor of itsappointment. If we have
not appointed a successor preferred share depositary and the successor
depositary has not accepted its appointment within 60 days after the preferred
share depositary delivered a resignation notice to us, the preferred
sharedepositary may terminate the deposit agreement. See "--Amendment and
Termination of the Deposit Agreement" above.
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DESCRIPTION OF SHARE PURCHASE CONTRACTS AND SHARE PURCHASEUNITS
The following description of share purchase contracts and share purchase units
sets forth certain general terms and provisionsof share purchase contracts and
share purchase units. This summary does not contain all of the information
that you may find useful. The particular terms of the share purchase
contracts, the share purchase units and, if applicable, the prepaidsecurities
will be described in the prospectus supplement relating to those securities.
For more information, you should review the share purchase contracts, the
collateral arrangements and any depositary arrangements relating to such share
purchasecontracts or share purchase units and, if applicable, the prepaid
securities and the document pursuant to which the prepaid securities will be
issued, each of which will be filed with the SEC promptly after the offering
of the securities. As used inthis section only, "we", "our" and "us" refers to
Allegion plc.
We may issue share purchase contractsrepresenting contracts obligating holders
to purchase from us and us to sell to the holders a specified number of
ordinary shares or preferred shares at a future date or dates. The price per
share of ordinary share or preferred share may be fixed atthe time the share
purchase contracts are issued or may be determined by reference to a specific
formula set forth in the share purchase contracts.
The share purchase contracts may be issued separately or as a part of units,
often known as share purchase units, consisting of a sharepurchase contract
and either
. debt securities; or
. debt obligations of third parties, including U.S. Treasury securities,
securing the holder's obligations to purchase the ordinary shares or preferred
shares under the share purchase contracts. The share purchase contractsmay
require us to make periodic payments to the holders of the share purchase
units or vice versa, and such payments may be unsecured or prefunded on some
basis. The share purchase contracts may require holders to secure their
obligations in aspecified manner and in certain circumstances we may deliver
newly issued prepaid share purchase contracts, often known as prepaid
securities, upon release to a holder of any collateral securing each holder's
obligations under the originalshare purchase contract.
Unless otherwise specified in the applicable prospectus supplement, the share
purchase contracts, the sharepurchase units and the unit agreements pursuant
to which the share purchase units will be issued will be governed by and
construed in accordance with the law of the State of New York.
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MATERIAL TAX CONSIDERATIONS
United States Federal Income Tax Considerations
The following is a summary of the material United States federal income tax
consequences, as of the date of this document, of the ownership anddisposition
of our debt securities, ordinary shares, preferred shares, depositary shares
or warrants by beneficial owners who are initial purchasers that hold the debt
securities, shares or warrants as capital assets within the meaning ofSection
1221 of the Internal Revenue Code of 1986, as amended (the "Code"). Except
where otherwise noted, this summary only addresses United States federal
income tax consequences to holders that are "United States holders."For
purposes of this summary, you are a "United States holder" if you are, for
United States federal income tax purposes:
. an individual citizen or resident of the United States;
. a corporation, or other entity taxable as a corporation for United States federal income tax purposes, created
ororganized in or under the laws of the United States, any state thereof or the District of Columbia;
. an estate the income of which is subject to United States federal income taxation regardless of its source; or
. a trust if it (1) is subject to the primary supervision of a court within the United States
and one or moreUnited States persons have the authority to control all substantial decisions
of the trust or (2) has a valid election in effect under applicable United States Department
of Treasury regulations ("Treasury regulations") to be treatedas a United States person.
For purposes of this summary, you are a
"non-United
States holder" if you are neither a United States holder nor a partnership (or
other entity treated as a partnership for United States federal income tax
purposes).
This summary is based on current law, which is subject to change, perhaps
retroactively, is for general purposes only and should not beconsidered tax
advice. A later change in law could alter significantly the tax considerations
that we describe in this summary. This summary does not represent a detailed
description of the United States federal income tax consequences to you
inlight of your particular circumstances and does not address the effects of
the Medicare tax on net investment income, or of any state, local or
non-United
States tax laws or
non-income
tax (such as gift or estate tax). In addition, it does not present a
description of the United States federal income tax consequences applicable to
you if you are subject to special treatment underthe United States federal
income tax laws, including if you are:
. a dealer in securities or currencies;
. a trader in securities that has elected to use a
mark-to-market
method of accounting for your securities holdings;
. a financial institution;
. an insurance company;
. a mutual fund;
. a pension plan;
. a
tax-exempt
organization (including a private foundation);
. a partnership or other pass-through entity for United States federal income tax purposes;
. a person liable for alternative minimum tax;
. a person holding debt securities, ordinary shares, preferred shares, depositary shares or warrants
as part of ahedging, integrated or conversion transaction, constructive sale or straddle;
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. a person owning, actually or constructively, 10% or more of our shares (by
vote or value) or 10% or more of theshares (by vote or value) of any of our
non-United
States subsidiaries;
. a United States holder whose "functional currency" is not the United States dollar;
. a United States expatriate;
. investors subject to the U.S. "inversion" rules;
. a person required to accelerate the recognition of any item of
gross income with respect to debt securities,ordinary shares,
preferred shares, depositary shares or warrants as a result of
such income being recognized on an applicable financial statement;
. a regulated investment company; or
. a real estate investment trust.
If a partnership (or other entity treated as a partnership for United States
federal income tax purposes) holds our debt securities, ordinaryshares,
preferred shares, depositary shares or warrants, the tax treatment of a
partner or member will generally depend upon the status and activities of the
partner or member and the activities of the partnership. If you are a partner
or member ofa partnership holding our debt securities, ordinary shares,
preferred shares, depositary shares or warrants, you should consult your tax
advisor.
You should consult your own tax advisor concerning the particular United
States federal income tax consequences to you of the ownership anddisposition
of debt securities, ordinary shares, preferred shares, depositary shares or
warrants, as well as the consequences to you arising under other United States
federal tax laws and the laws of any other taxing jurisdiction.
Consequences to United States Holders
DebtSecurities
The discussion below assumes that all debt securities issued hereunder will be
classified as debt for United States federalincome tax purposes, and holders
should note that in the event of an alternative characterization, the tax
consequences would differ from those discussed below. This summary is not
intended to include all of the possible types of debt securitiesthat we may
issue under this prospectus, including, for example, short-term debt
securities, foreign currency debt securities, extendible, reset or renewable
debt securities, securities providing for contingent payments, or debt
securities that areconvertible or exchangeable into our shares. We will
describe any additional United States federal income tax consequences
resulting from a specific issuance of debt securities in the applicable
prospectus supplement.
Payment of Interest
Except as provided below, stated interest on a debt security will generally be
taxable to you as ordinary income at the time it is paid oraccrued in
accordance with your method of accounting for tax purposes. In addition to
stated interest on a debt security (which includes any Irish tax withheld from
the interest payments you receive), you will be required to include in income
anyadditional amounts paid in respect of such Irish tax withheld. You may be
entitled to deduct or credit this tax, subject to certain limitations
(including that the election to deduct or credit foreign taxes applies to all
of your foreign taxes for aparticular tax year). Such stated interest
(including any additional amounts) and any OID (as defined below) on debt
securities issued by Allegion plc will generally be treated as foreign source
income and generally will be considered passivecategory income for foreign tax
credit purposes. You will generally be denied a foreign tax credit for foreign
taxes imposed with respect to a debt security where you do not meet a minimum
holding period requirement during which you are notprotected from risk of
loss. The rules governing the foreign tax credit are complex. You are urged to
consult your tax advisors regarding the availability of the foreign tax credit
under your particular circumstances.
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Original Issue Discount
If you own debt securities issued with original issue discount, which we refer
to as "OID" (such debt securities, "discount debtsecurities"), you will be
subject to special tax accounting rules, as described in greater detail below.
In that case, you should be aware that you generally must include OID in gross
income (as ordinary income) in advance of the receipt ofcash attributable to
that income. However, you generally will not be required to include separately
in income cash payments received on the debt securities, even if denominated
as interest, to the extent those payments do not constitute qualifiedstated
interest, as defined below. Notice will be given in the applicable prospectus
supplement when we expect that a particular debt security will be a discount
debt security.
A debt security generally will be issued with OID, if the difference between
its issue price and its "stated redemption price atmaturity" is equal to or
more than a
de minimis
amount. Generally
de minimis
is defined as 0.25% of the stated redemption price at maturity multiplied by
the number of complete years to maturity, and the "issue price" ofeach debt
security in a particular offering is the first price at which a substantial
amount of that particular offering is sold to the public. The stated
redemption price at maturity of a debt security is the sum of all payments
provided by thedebt security other than "qualified stated interest" payments.
The term "qualified stated interest" means stated interest that is
unconditionally payable in cash or in property, other than debt instruments of
the issuer, andmeets all of the following conditions:
. it is payable at least once per year;
. it is payable over the entire term of the debt security; and
. it is payable at a single fixed rate or at certain variable rates.
We will give you notice in the applicable prospectus supplement when we expect
that a particular debt security will bear interest that is notqualified stated
interest.
Discount debt securities containing provisions permitting them to be redeemed
prior to their stated maturityat our option may be subject to rules that
differ from the general OID rules discussed herein. If you are considering the
purchase of discount debt securities with those features, you should carefully
examine the section entitled "--
DebtSecurities Subject to Early Redemption
" below and the applicable prospectus supplement and should consult your own
tax advisors with respect to those features since the tax consequences to you
with respect to OID will depend, in part, onthe particular terms and features
of the debt securities.
If you own discount debt securities with a maturity upon issuance of more
thanone year, you generally must include OID in income in advance of the
receipt of some or all of the related cash payments using the "constant yield
method" described in the following paragraphs.
The amount of OID that you must include in income if you are the initial
holder of a discount debt security is the sum of the "dailyportions" of OID
with respect to the debt security for each day during the taxable year or
portion of the taxable year in which you held that debt security ("accrued
OID"). The daily portion is determined by allocating to each day inany
"accrual period" a pro rata portion of the OID allocable to that accrual
period. The "accrual period" for a discount debt security may be of any length
and may vary in length over the term of the debt security, provided thateach
accrual period is no longer than one year and each scheduled payment of
principal or interest occurs on the first day or the final day of an accrual
period. The amount of OID allocable to any accrual period other than the final
accrual periodis an amount equal to the excess, if any, of:
. the debt security's adjusted issue price at the beginning of the accrual period multiplied by its yield tomaturity, determined
on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period, over
. the aggregate of all qualified stated interest allocable to the accrual period.
OID allocable to a final accrual period is the difference between the amount
payable at maturity, other than a payment of qualified statedinterest, and the
adjusted issue price at the beginning of the final accrual period.
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Special rules will apply for calculating OID for an initial short accrual
period. The"adjusted issue price" of a debt security at the beginning of any
accrual period is equal to its issue price increased by the accrued OID for
each prior accrual period, determined without regard to the amortization of
any acquisition orbond premium, as described below, and reduced by any
payments previously made on the debt security other than payments of qualified
stated interest. Under these rules, you will have to include in income
increasingly greater amounts of OID insuccessive accrual periods. We are
required to provide information returns stating the amount of OID accrued on
debt securities held by persons of record other than corporations and other
exempt holders.
You may elect to treat all interest on any debt security as OID and calculate
the amount includible in gross income under the constant yieldmethod described
above. For purposes of this election, interest includes stated interest,
acquisition discount, OID,
de minimis
OID, market discount,
de minimis
market discount and unstated interest, as adjusted by any amortizable
bondpremium or acquisition premium. You must make this election for the
taxable year in which you acquired the debt security, and you may not revoke
the election without the consent of the Internal Revenue Service. You should
consult with your own taxadvisors about this election.
Debt Securities Subject to Early Redemption
Debt securities subject to optional redemption prior to maturity may be
subject to rules that differ from the general rules described above
forpurposes of determining the yield and maturity of the note (which may
affect whether the debt securities are treated as issued with OID and, if so,
the timing of accrual of the OID). Under applicable Treasury regulations, we
will generally bepresumed to exercise an option to redeem debt securities if
the exercise of the option would reduce the yield on the debt securities. If
such an option is not in fact exercised, the debt securities will be treated,
solely for purposes of calculatingOID and the timing of any such OID, as if it
were redeemed and new debt securities were issued on the presumed exercise
date for an amount equal to the debt securities' "adjusted issue price" on
such date.
Under the applicable Treasury regulations, if a debt security provides for a
fixed rate of interest that increases over the term of the debtsecurity, the
debt security's issue price is not below its stated principal amount and we
have an option to redeem the debt security for an amount equal to the stated
principal amount (plus accrued interest, if any) prior to the first date
onwhich an increased rate of interest is in effect, the yield on the debt
security will be lowered if we redeem the debt security before the initial
increase in the interest rate, and therefore our redemption option will be
treated as exercised. Sincethe debt security will therefore be treated as if
it were redeemed and reissued prior to the initial increase in the interest
rate, the debt security will not be treated as issued with OID. If a debt
security is not treated as issued with OID andif, contrary to the presumption
in the applicable Treasury regulations, we do not redeem the debt security
before the initial increase in the interest rate, the same analysis will apply
to all subsequent increases in the interest rate. This meansthat debt
securities that are deemed reissued will be treated as redeemed prior to any
subsequent increase in the interest rate, and therefore as issued without OID.
It is unclear whether these rules apply to floating rate debt securities.
Prospective holders of floating rate debt securities subject toearly
redemption should consult their tax advisors regarding the determination of
whether the debt securities are issued with OID and the timing of the accrual
of any such OID for U.S. federal income tax purposes.
Floating Rate Debt Securities
We may issue debt securities bearing interest at a floating rate ("floating
rate debt securities"). If a floating rate debt securityprovides for stated
interest at a floating rate that is either a single qualified floating rate or
a single objective rate throughout the term and otherwise qualifies as a
"variable rate debt instrument" under the Treasury regulations asdescribed
below, and if the interest on a floating rate debt security is unconditionally
payable in cash or property (other than debt instruments of the issuer) at
least annually, then the stated interest on
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the floating rate debt security will constitute qualified stated interest and
will be taxed according to the holder's regular method of tax accounting. A
floating rate debt security willqualify as a "variable rate debt instrument"
if:
. its issue price does not exceed the total noncontingent principal payments
due under the floating rate debtsecurity by more than a specified
de minimis
amount; and
. it provides for stated interest, paid or compounded at least annually, at current values of:
. one or more "qualified floating rates";
. a single fixed rate and one or more "qualifying floating rates";
. a single "objective rate"; or
. a single fixed rate and a "single objective rate" that is a qualified inverse floating rate.
A "qualified floating rate" is any variable rate where variations in the value
of such rate can reasonably beexpected to measure contemporaneous variations
in the cost of newly borrowed funds in the currency in which the debt
instrument is denominated. Although a multiple of a qualified floating rate
will generally not itself constitute a qualifiedfloating rate, a variable rate
equal to the product of a qualified floating rate and a fixed multiple that is
greater than 0.65 but not more than 1.35 will constitute a qualified floating
rate. A variable rate equal to the product of a qualifiedfloating rate and a
fixed multiple that is greater than 0.65 but not more than 1.35, increased or
decreased by a fixed rate, will also constitute a qualified floating rate. In
addition, two or more qualified floating rates that can reasonably beexpected
to have approximately the same values throughout the term of the debt
instrument (
e.g.
, two or more qualified floating rates with values within 0.25% of each other
as determined on the issue date for the debt instrument) will betreated as a
single qualified floating rate.
Notwithstanding the foregoing, a variable rate that would otherwise constitute
a qualifiedfloating rate but which is subject to one or more restrictions such
as a maximum numerical limitation (
i.e.
, a cap) or a minimum numerical limitation (
i.e.
, a floor) may, under certain circumstances, fail to be treated as a
qualifiedfloating rate unless such cap or floor is fixed throughout the term
of the debt instrument. An "objective rate" is a rate that is not itself a
qualified floating rate but which is determined using a single fixed formula
that is based onobjective financial or economic information. A rate will not
qualify as an objective rate if it is based on information that is within the
control of the issuer (or a related party) or that is unique to the
circumstances of the issuer (or a relatedparty), such as dividends, profits,
or the value of the issuer's stock (although a rate does not fail to be an
objective rate merely because it is based on the credit quality of the
issuer). A "qualified inverse floating rate" is anyobjective rate where such
rate is equal to a fixed rate minus a qualified floating rate, as long as
variations in the rate can reasonably be expected to inversely reflect
contemporaneous variations in the qualified floating rate. If a debtinstrument
provides for stated interest at a fixed rate for an initial period of one year
or less followed by a variable rate that is either a qualified floating rate
or an objective rate and if the variable rate on the issue date for the
debtinstrument is intended to approximate the fixed rate (
e.g
., the value of the variable rate on the issue date does not differ from the
value of the fixed rate by more than 0.25%), then the fixed rate and the
variable rate together willconstitute either a single qualified floating rate
or objective rate, as the case may be.
Special rules apply if a floating rate debtsecurity provides for stated
interest at either a single qualified floating rate or a single objective rate
throughout the term thereof and qualifies as a "variable rate debt instrument"
and is originally issued at a discount (
i.e.
,at a price below the floating rate debt security's stated principal amount)
in excess of a specified
de minimis
amount. In addition, if a floating rate debt security does not qualify as a
"variable rate debt instrument," thenthe floating rate debt security would be
treated as a contingent payment debt obligation. The United States federal
income tax treatment of floating rate debt securities that are issued with
original issue discount or that are treated as contingentpayment debt
obligations may be more fully described in the applicable prospectus
supplement.
Sale, Exchange and Retirement of DebtSecurities
Your adjusted tax basis in a debt security will, in general, be your cost for
that debt security, increased by OID thatyou previously included in income,
and reduced by any cash payments on the debt security other than
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qualified stated interest. Upon the sale, exchange, retirement or other
disposition of a debt security, you will recognize gain or loss equal to the
difference between the amount you realize uponthe sale, exchange, retirement
or other disposition (less an amount equal to any accrued qualified stated
interest, which will be treated as a payment of interest for United States
federal income tax purposes), and the adjusted tax basis of the debtsecurity.
Such gain or loss generally will be capital gain or loss. With respect to debt
securities issued by Allegion plc, that gain or loss will generally be treated
as United States source gain or loss for foreign tax credit limitation
purposes.Consequently, you may not be able to claim a credit for any Irish tax
imposed upon a disposition of a debt security unless such credit can be
applied (subject to applicable limitations) against tax due on other income
treated as derived from foreignsources. Capital gains of individuals derived
in respect of capital assets held for more than one year are eligible for
reduced rates of taxation. The deductibility of capital losses is subject to
limitations.
Information Reporting and Backup Withholding
In general, information reporting will apply to payments of principal,
interest, OID and premium paid on debt securities and to the proceeds ofsale
of a debt security paid to you (unless you are an exempt recipient such as a
corporation). A backup withholding tax may apply to such payments if you fail
to provide a taxpayer identification number, a certification of exempt status,
or fail toreport in full dividend and interest income.
Any amounts withheld under the backup withholding rules will be allowed as a
refund or acredit against your United States federal income tax liability,
provided you timely furnish the required information to the Internal Revenue
Service.
Ordinary Shares, Preferred Shares and Depositary Shares
The consequences of the purchase, ownership or disposition of our shares
depend on a number of factors including:
. the term of the shares;
. any put or call or redemption provisions with respect to the shares;
. any conversion or exchange features with respect to the shares; and
. the price at which the shares are sold.
The United States federal income tax treatment of our shares may be more fully
described in an applicable prospectus supplement, in which caseyou should
carefully examine the applicable prospectus supplement regarding the material
United States federal income tax consequences of the holding and disposition
of our shares.
In general, for United States federal income tax purposes, United States
holders of depositary shares will be treated as the owners of theunderlying
preferred shares that are represented by such depositary shares. Deposits or
withdrawals of preferred shares by United States holders for depositary shares
will not be subject to United States federal income tax.
Taxation of Dividends
The gross amount of distributions you receive on your ordinary shares,
preferred shares or depositary shares (including any amounts withheld
toreflect Irish withholding tax), will generally be treated as dividend income
to you if the distributions are made from Allegion plc's current or
accumulated earnings and profits, calculated according to United States
federal income taxprinciples. Such income (including withheld taxes) will be
includible in your gross income as ordinary income on the day you actually or
constructively receive it. You will not be entitled to claim a dividends
received deduction with respect todistributions you receive from Allegion plc.
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With respect to
non-corporate
United Statesinvestors, certain dividends received from a qualified foreign
corporation may be subject to reduced rates of taxation. A qualified foreign
corporation includes a foreign corporation that is eligible for the benefits
of a comprehensive income taxtreaty with the United States which the United
States Treasury Department determines to be satisfactory for these purposes
and which includes an exchange of information provision. The United States
Treasury Department has determined that the currentincome tax treaty between
the United States and Ireland meets these requirements, and Allegion plc
believes it is eligible for the benefits of that treaty. A foreign corporation
is also treated as a qualified foreign corporation with respect todividends
paid by that corporation on shares that are readily tradable on an established
securities market in the United States. United States Treasury Department
guidance indicates that Allegion plc's ordinary shares, which are listed on
theNYSE, are readily tradable on an established securities market in the
United States. There can be no assurance, however, that Allegion plc's
preferred shares or depositary shares will be considered readily tradable on
an establishedsecurities market in the United States or that Allegion plc's
ordinary shares will be so considered in later years.
Non-corporate
holders that do not meet a minimum holding period requirement during whichthey
are not protected from the risk of loss or that elect to treat the dividend
income as "investment income" pursuant to Section 163(d)(4) of the Code, will
not be eligible for the reduced rates of taxation regardless of Allegionplc's
status as a qualified foreign corporation. In addition, the reduced rate will
not apply to dividends if the recipient of a dividend is obligated to make
related payments with respect to positions in substantially similar or
relatedproperty. This disallowance applies even if the minimum holding period
has been met.
Subject to certain conditions and limitations, Irishwithholding taxes on
dividends may be treated as foreign taxes eligible for credit against a United
States holder's United States federal income tax liability. As discussed
further below, for purposes of calculating the foreign tax credit, onlya
portion of the distributions paid on Allegion plc's ordinary shares, preferred
shares or depositary shares that are treated as dividends for United States
federal income tax purposes are expected to be treated as income from
sourcesoutside the United States. Consequently, if any Irish withholding tax
is imposed on a dividend, a United States holder would generally not be able
to use the foreign tax credit with respect to the full amount of the tax
unless such credit canbe applied (subject to applicable limitations) against
United States federal income tax due on other foreign source income in the
appropriate category for foreign tax credit purposes. Any dividends would
generally constitute passive category incomefor foreign tax credit purposes.
Further, in certain circumstances, if a United States holder:
. has held Allegion plc's ordinary shares, preferred shares or depositary shares for less than
a specifiedminimum period during which such holder is not protected from risk of loss, or
. is obligated to make payments related to the dividends,
such United States holder will not be allowed a foreign tax credit for foreign
taxes imposed on dividends paid on such shares. The rules governing the
foreigntax credit are complex. United States holders are urged to consult
their tax advisors regarding the availability of the foreign tax credit under
their particular circumstances.
To the extent that the amount of any distribution exceeds Allegion plc's
current and accumulated earnings and profits for a taxable year,the
distribution will first be treated as a
tax-free
return of capital, causing a reduction in your adjusted basis in the ordinary
shares, preferred shares or depositary shares, thereby increasing the amountof
gain, or decreasing the amount of loss, you will recognize on a subsequent
disposition of the shares, and the balance in excess of adjusted basis will be
taxed as capital gain recognized on a sale or exchange. Consequently, such
distributions inexcess of Allegion plc's current and accumulated earnings and
profits would generally not give rise to foreign source income and a United
States holder would generally not be able to use the foreign tax credit
arising from any Irish withholdingtax imposed on such distributions unless
such credit can be applied (subject to applicable limitations) against United
States federal income tax due on other foreign source income in the
appropriate category for foreign tax credit purposes.
If, for United States federal income tax purposes, Allegion plc is classified
as a "United States-owned foreign corporation,"distributions made to you with
respect to your ordinary shares, preferred shares or
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depositary shares that are taxable as dividends generally will be treated for
United States foreign tax credit purposes as (1) foreign source income and (2)
United States source income,in proportion to Allegion plc's earnings and
profits in the year of such distribution allocable to foreign and United
States sources, respectively. For this purpose, Allegion plc will be treated
as a United States-owned foreign corporation solong as shares representing 50%
or more of the voting power or value of Allegion plc's shares are owned,
directly or indirectly, by United States persons, and it is Allegion plc's
belief that as of the date of this prospectus, UnitedStates persons own 50% or
more of the voting power and value of Allegion plc's ordinary shares. Thus, it
is anticipated that only a portion of the dividends received by a United
States holder will be treated as foreign source income forpurposes of
calculating such holder's foreign tax credit limitation.
Preferred Shares Redemption Premium
Under Section 305(c) of the Code and the applicable regulations thereunder, if
in certain circumstances the redemption price of thepreferred shares exceeds
the issue price by more than a
de minimis
amount, the difference--which we refer to as "redemption premium"--will be
taxable as a constructive distribution to you over time of additional
preferredshares. These constructive distributions would be treated first as a
dividend to the extent of Allegion plc's current and accumulated earnings and
profits and otherwise would be subject to the treatment described above for
distributions notpaid out of current and accumulated earnings and profits. If
the preferred shares provide for optional rights of redemption by Allegion plc
at prices in excess of the issue price, you could be required to recognize
such excess if, based on all ofthe facts and circumstances, the optional
redemptions are more likely than not to occur. Applicable regulations provide
a "safe harbor" under which a right to redeem will not be treated as more
likely than not to occur if (1) you arenot related to Allegion plc within the
meaning of the regulations; (2) there are no plans, arrangements, or
agreements that effectively require or are intended to compel Allegion plc to
redeem the shares and (3) exercise of the right toredeem would not reduce the
yield of the shares, as determined under the regulations. Regardless of
whether the optional redemptions are more likely than not to occur,
constructive dividend treatment will not result if the redemption premium
doesnot exceed a
de minimis
amount or is in the nature of a penalty for premature redemption. You should
also consult the applicable prospectus supplement for information regarding
any additional consequences under Section 305(c) in light ofthe particular
terms of an issuance of preferred shares.
Disposition of the Ordinary Shares, Preferred Shares or Depositary Shares
Subject to the redemption rules discussed below, when you sell or otherwise
dispose of your ordinary shares, preferred shares ordepositary shares you will
recognize capital gain or loss in an amount equal to the difference between
the amount you realize for the shares and your adjusted tax basis in them. In
general, your adjusted tax basis in the ordinary shares will be yourcost of
obtaining the shares reduced by any previous distributions that are not
characterized as dividends. In general, your adjusted tax basis in the
preferred shares or depositary shares will be your cost of obtaining those
shares increased by anyredemption premium previously included in income by you
and reduced by any previous distributions that are not characterized as
dividends. For foreign tax credit limitation purposes, such gain or loss will
generally be treated as United Statessource gain or loss. Consequently, you
may not be able to claim a credit for any Irish tax imposed upon a disposition
of an ordinary share, preferred share or depositary share unless such credit
can be applied (subject to applicable limitations)against tax due on other
income treated as derived from foreign sources. If you are an individual, and
the shares being sold or otherwise disposed of have been held for more than
one year, your gain recognized will be eligible for reduced rates oftaxation.
Your ability to deduct capital losses is subject to limitations. A redemption
of our ordinary shares, preferred shares or depositary shares may be treated,
depending upon the circumstances, as a sale or a dividend. You should consult
yourtax advisor regarding the application of these rules to your particular
circumstances.
Passive Foreign Investment Company
Allegion plc does not believe that it is, for United States federal tax
purposes, a passive foreign investment company (a"PFIC") and expects to
continue its operations in such a manner that it will not become a PFIC. If,
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however, Allegion plc is or becomes a PFIC, you could be subject to additional
federal income taxes on gain recognized with respect to the ordinary shares,
preferred shares or depositary sharesand on certain distributions, plus an
interest charge on certain taxes treated as having been deferred by you under
the PFIC rules.
Non-corporate
United States holders will not be eligible for reduced rates oftaxation on any
dividends received from us if we are a PFIC in the taxable year in which such
dividends are paid or in the preceding taxable year.
You should consult your own tax advisors concerning the United States federal
income tax consequences of holding Allegion plc's ordinaryshares, preferred
shares, depositary shares or warrants if Allegion plc is considered a PFIC in
any taxable year, including the advisability and availability of making
certain elections that may alleviate the tax consequences referred to above.
Information Reporting and Backup Withholding
In general, unless you are an exempt recipient such as a corporation,
information reporting will apply to dividends in respect of the ordinaryshares,
preferred shares or depositary shares or the proceeds received on the sale,
exchange, or redemption of the ordinary shares, preferred shares, depositary
shares or warrants paid to you within the United States and, in some cases,
outside ofthe United States. Additionally, if you fail to provide your
taxpayer identification number, or fail either to report in full dividend and
interest income or to make certain certifications, you may be subject to
backup withholding with respect tosuch payments. Any amounts withheld under
the backup withholding rules will be allowed as a refund or a credit against
your United States federal income tax liability, provided you timely furnish
the required information to the Internal RevenueService.
Warrants
You willgenerally not recognize any gain or loss upon the exercise of warrants
to purchase Allegion plc's ordinary shares or preferred shares except with
respect to cash received in lieu of a fractional ordinary share or preferred
share. You will havean initial tax basis in the ordinary shares or preferred
shares received on exercise of the warrants equal to the sum of your tax basis
in the warrants and the aggregate cash exercise price paid in respect of such
exercise less any basisattributable to the receipt of fractional shares. Your
holding period in the ordinary shares or preferred shares received on exercise
of the warrants will commence on the date after the warrants are exercised.
If a warrant expires without being exercised, you will recognize a capital
loss in an amount equal to your tax basis in the warrant. Such losswill be a
long-term capital loss if the warrant has been held for more than one year.
Upon the sale or exchange of a warrant, you will generally recognize a capital
gain or loss equal to the difference, if any, between the amount realized on
suchsale or exchange and your tax basis in such warrant. Any capital gain or
loss you recognize in connection with the lapse, sale or exchange of a warrant
will generally be treated as United States source gain or loss for foreign tax
credit limitationpurposes. Consequently, you may not be able to claim a credit
for any Irish tax imposed upon a sale or exchange of a warrant unless such
credit can be applied (subject to applicable limitations) against tax due on
other income treated as derivedfrom foreign sources. Capital gains of
individuals derived in respect of capital assets held for more than one year
are eligible for reduced rates of taxation. The deductibility of capital
losses is subject to limitations.
Under Section 305 of the Code, you may be deemed to have received a
constructive distribution from Allegion plc, which may result in theinclusion
of ordinary dividend income, in the event of certain adjustments, or the
failure to make certain adjustments, to the number of ordinary shares or
preferred shares to be issued upon exercise of a warrant.
If a decision is made to issue warrants exercisable into securities other than
Allegion plc's ordinary shares or preferred shares or thatprovide for a
cashless exercise, we will discuss the relevant income tax consequences in the
applicable prospectus supplement. We urge you to consult your own tax advisor
with respect to the U.S. federal income tax consequences of the warrants
inlight of your particular circumstances.
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Share Purchase Contracts and Share Purchase Units
If we decide to issue share purchase contracts or share purchase units, we
will discuss the relevant income tax consequences in the applicableprospectus
supplement. We urge you to consult your own tax advisor with respect to the
U.S. federal income tax consequences of the purchase contracts or share
purchase units in light of your particular circumstances.
Treatment of Certain Irish Taxes
Anystamp duty or Irish capital acquisitions tax imposed on a United States
holder as described below under the heading "Irish Tax Considerations" will
not be creditable against United States federal income taxes, although a
United Statesholder may be entitled to deduct such taxes, subject to
applicable limitations under the Code. United States holders should consult
their tax advisors regarding the tax treatment of these Irish taxes.
Consequences to
Non-United
States Holders
The following is a summary of certain United States federal income and federal
withholding tax consequences that will apply to you if you are a
non-United
States holder of our debt securities, ordinary shares, preferred shares,
depositary shares or warrants.
United States Federal Withholding Tax
Subject to the discussions below concerning backup withholding and FATCA,
under the "portfolio interest" rule, United States federalwithholding tax will
not apply to any payment of interest (which for purposes of this discussion of
non-United
States holders includes OID) on a debt security that is issued by ALLE
Holdings and is inregistered form, provided that:
. interest paid on the debt security is not effectively connected with your conduct of a trade or business in theUnited States;
. you do not actually or constructively own 10% or more of the total combined voting power of all
classes of ourvoting stock within the meaning of the Code and applicable Treasury regulations;
. you are not a controlled foreign corporation that is actually or constructively related to us through stockownership;
. you are not a bank whose receipt of interest on a debt security is described in Section 881(c)(3)(A) of theCode;
. the interest is not considered contingent interest under Section
871(h)(4)(A) of the Code and the Treasuryregulations thereunder; and
. either (a) you provide
your name and
address on an applicable IRS Form
W-8,
and certify, under penalties of perjury, that you are not a United
States person or (b) you hold your debt securities through certain
financial intermediaries and satisfy the certificationrequirements of
applicable Treasury regulations. Special certification rules apply to
non-United
States holders that are
pass-through entities
rather than corporations
or individuals.
If you cannot satisfy the requirements of the "portfolio interest" rule
described above, payments of interest on such a debtsecurity made to you will
be subject to a 30% United States federal withholding tax unless you provide
the applicable withholding agent with a properly executed (1) IRS Form
W-8BEN
or Form
W-8BEN-E
(or other applicable form) claiming an exemption from or reduction in
withholding under the benefit of an applicable income tax treaty or (2) IRS
Form
W-8ECI
(or other applicable form) stating that interest paid on the debt security is
not subject to withholding tax because it is effectively connected with your
conduct of a trade or business in the United States(as discussed below under
"United States Federal Income Tax"). Alternative
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documentation may be applicable in certain situations. The 30% United States
federal withholding tax generally will not apply to any payment of principal
or gain that you realize on the sale,exchange, retirement or other disposition
of a debt security.
United States Federal Income Tax
Subject to the discussions of backup withholding and FATCA below, under
current United States federal income tax law, interest payments on
debtsecurities, or dividends paid on our shares, that are received by a
non-United
States holder generally will be exempt from United States federal income tax.
However, you may still be subject to United Statesfederal income tax on
interest payments or dividends you receive if you are engaged in a trade or
business in the United States and interest on the debt securities or dividends
on ordinary shares, preferred shares or depositary shares, in each case,are
effectively connected with the conduct of that trade or business (and, if
required by an applicable income tax treaty, are attributable to a United
States permanent establishment).
In addition, if you are a foreign corporation, you may be subject to a branch
profits tax equal to 30% (or lower applicable treaty rate) ofyour effectively
connected earnings and profits for the taxable year, subject to adjustments.
Subject to the discussions of backupwithholding and FATCA below, you will
generally not be subject to United States federal income tax or any gain
realized on the disposition of debt securities or ordinary shares, preferred
shares, depositary shares or warrants unless:
. the gain is effectively connected with your conduct of a trade or business in the United States (and, if
requiredby an applicable income tax treaty, is attributable to a United States permanent establishment); or
. you are an individual who is present in the United States for 183 days or more
in the taxable year of thatdisposition, and certain other conditions are met.
Information Reporting and Backup Withholding
In general, subject to the next sentence, information reporting and backup
withholding will not apply to payments of interest or dividends thatwe make to
you, although you may have to comply with certain certification requirements
to establish that you are not a United States person. Information reporting
will, however, generally apply to interest payments on debt securities issued
by ALLEHoldings, regardless of whether you comply with such requirements.
Payment of the proceeds from the disposition of debt securities,ordinary
shares, preferred shares, depositary shares or warrants effected at a United
States office of a broker generally will not be subject to information
reporting or backup withholding if the payor or broker does not have actual
knowledge orreason to know that you are a United States person and you comply
with certain certification requirements to establish that you are not a United
States person.
Payment of the proceeds from the disposition of debt securities, ordinary
shares, preferred shares, depositary shares or warrants effected ata foreign
office of a broker generally will not be subject to information reporting or
backup withholding provided that such broker is not for United States federal
income tax purposes (1) a United States person, (2) a controlledforeign
corporation, (3) a foreign person that derives 50% or more of its gross income
for certain periods from the conduct of a trade or business in the United
States, or (4) a foreign partnership in which one or more United Statespersons,
in the aggregate, own more than 50% of the income or capital interests in the
partnership or which is engaged in a trade or business in the United States.
If you receive payments of such amounts outside the United States from a
foreignoffice of a broker described in the preceding sentence, the payment
will not be subject to backup withholding tax, but will be subject to
information reporting
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requirements unless (1) you are the beneficial owner and the broker has
documentary evidence in its records that you are not a United States person
and certain other conditions are met or(2) you otherwise establish an
exemption, and provided that the broker does not have actual knowledge or
reason to know that you are a United States person.
Any amounts withheld under the backup withholding rules will be allowed as a
refund or a credit against your United States federal income taxliability
provided the required information is timely furnished to the Internal Revenue
Service.
Additional Withholding Tax onPayments Made to Foreign Accounts
Withholding taxes may be imposed under Sections 1471 to 1474 of the Code (such
Sections commonlyreferred to as the Foreign Account Tax Compliance Act, or
"FATCA") on certain types of payments made to
non-United
States financial institutions and certain other
non-United
States entities. Specifically, a 30% withholding tax may be imposed on
payments (including interest in respect of debt securities and gross proceeds
from their sale, exchange or retirement) on adebt security issued by ALLE
Holdings paid to a "foreign financial institution" or a
"non-financial
foreign entity" (each as defined in the Code), unless (1) the foreign
financialinstitution undertakes certain diligence and reporting obligations,
(2) the
non-financial
foreign entity either certifies it does not have any "substantial United
States owners" (as defined inthe Code) or furnishes identifying information
regarding each substantial United States owner, or (3) the foreign financial
institution or
non-financial
foreign entity otherwise qualifies for an exemptionfrom these rules. If the
payee is a foreign financial institution and is subject to the diligence and
reporting requirements in (1) above, it must enter into an agreement with the
United States Department of the Treasury requiring, among otherthings, that it
undertake to identify accounts held by certain "specified United States
persons" or "United States owned foreign entities" (each as defined in the
Code), annually report certain information about such accounts,and withhold
30% on certain payments to
non-compliant
foreign financial institutions and certain other account holders.
However, proposed Treasury regulations provide for the elimination of the 30%
withholding tax on payments of gross proceeds from the sale,exchange or other
disposition of debt instruments. In the preamble to the proposed regulations,
the Internal Revenue Service provided that taxpayers may rely upon the
proposed Treasury regulations until the issuance of final Treasury
regulations.Further, the United States has entered into (and may enter into
more) intergovernmental agreements ("IGAs") with foreign governments relating
to the implementation of, and information sharing under, FATCA and such IGAs
may alter one ormore of the FATCA information reporting rules.
Prospective investors should consult their tax advisors regarding the
potentialapplication of withholding under FATCA to their investment in any
debt securities issued by ALLE Holdings.
Irish Tax Considerations
The following is a summary of the principal Irish tax consequences for
individuals and companies of ownership of debt securities and ordinaryshares
issued by Allegion plc based on the laws and practice of the Irish Revenue
Commissioners currently in force in Ireland and on discussions and
correspondence with the Irish Revenue Commissioners. Legislative,
administrative or judicial changesmay modify the tax consequences described
below. It deals with holders who beneficially own their debt securities or
ordinary shares as an investment. Particular rules not discussed below may
apply to certain classes of taxpayers holding debtsecurities or ordinary
shares, such as dealers in securities, trusts, insurance companies, collective
investment schemes and individuals who have or may be deemed to have acquired
their debt securities or ordinary shares by virtue of an office oremployment.
The summary does not constitute tax or legal advice and the comments below are
of a general nature only. Prospective investors in the debt securities or
ordinary shares should consult their professional advisers on the tax
implicationsof the purchase, holding, redemption or sale of the debt
securities or ordinary shares and the receipt of interest or dividends thereon
under the laws of their country of residence, citizenship or domicile.
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Taxation Of Holders Of Debt Securities
Withholding Tax
Ingeneral, tax at the standard rate of income tax (currently 20 percent), is
required to be withheld from payments of Irish source interest which should
include interest payable on the debt securities issued by Irish incorporated
or Irish
tax-resident
entities. No such entity will be obliged to make a withholding or deduction
for or on account of Irish income tax from a payment of interest on a debt
security so long as the relevant debt security is aquoted Eurobond, namely a
security which is issued by a company (such as Allegion plc), is listed on a
recognized stock exchange (such as the New York Stock Exchange) and carries a
right to interest. Provided that the debt securities issued by Irishincorporated
or Irish
tax-resident
entities are interest bearing and are listed on a recognized stock exchange,
interest paid on them can be paid free of withholding tax provided:
. the person by or through whom the payment is made is not in Ireland; or
. the payment is made by or through a person in Ireland and either:
. the debt security is held in a clearing system recognized by the Irish Revenue Commissioners
(DTC, Euroclear andClearstream, Luxembourg are, amongst others, so recognized); or
. the person who is the beneficial owner of the quoted Eurobond and who is beneficially entitled to the interest isnot resident
in Ireland and has made a declaration to a relevant person (such as a paying agent located in Ireland) in the prescribed form.
Thus, so long as the debt securities continue to be quoted on a recognized
stock exchange and are held in a recognized clearing system,interest on the
debt securities can be paid by any paying agent acting on behalf of Irish
incorporated or Irish
tax-resident
entities without any withholding or deduction for or on account of Irish
income tax.If the debt securities continue to be quoted but cease to be held
in a recognized clearing system, interest on the debt securities may be paid
without any withholding or deduction for or on account of Irish income tax
provided such payment is madethrough a paying agent outside Ireland.
Encashment Tax
In certain circumstances, Irish tax will be required to be withheld at a rate
of 25 percent from interest on any debt security, where suchinterest is
collected or realized by a bank or encashment agent in Ireland on behalf of
any holder. There is an exemption from encashment tax where (i) the beneficial
owner of the interest is not resident in Ireland and has made a declarationto
this effect in the prescribed form to the encashment agent or bank or (ii) the
beneficial owner of the interest is a company which is within the charge to
Irish corporation tax in respect of the interest.
Income Tax and Levies
Notwithstanding that a holder may receive interest on the debt securities free
of withholding tax, the holder may still be liable to pay Irishtax with
respect to such interest. Holders resident or ordinarily resident in Ireland
who are individuals may be liable to pay Irish income tax, social insurance
(PRSI) contributions, and the universal social charge in respect of interest
theyreceive on the debt securities.
Interest paid on the debt securities has an Irish source and therefore is
within the charge to Irishincome tax. In the case of holders who are
non-resident
individuals such holders may also be liable to pay the universal social charge
in respect of interest they receive on the debt securities.
Ireland operates a self-assessment system in respect of tax and any person,
including a person who is neither resident nor ordinarily residentin Ireland,
with Irish source income comes within its scope.
There are a number of exemptions from Irish income tax available to certain
non-residents.
Firstly, interest payments made by an Irish resident entity in the ordinary
course of its business are exempt from income tax
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provided the recipient is not resident in Ireland and is a company resident in
a relevant territory (being a Member State of the European Union (other than
Ireland) or a country with whichIreland has signed a double tax treaty
("Relevant Territory")) which imposes a tax that generally applies to interest
receivable in that Relevant Territory by companies from sources outside that
Relevant Territory or, where the interest isexempted from the charge to Irish
income tax under the terms of a double tax agreement which is either in force
or which will come into force once all ratification procedures have been
completed. Secondly, interest paid by an Irish
tax-resident
or Irish incorporated entity free of withholding tax under the quoted Eurobond
exemption is exempt from income tax, where the recipient is a person not
resident in Ireland and resident in a RelevantTerritory. For these purposes,
residence is determined under the terms of the relevant double tax treaty or
in any other case, the law of the country in which the recipient claims to be
resident. Interest falling within either of the aboveexemptions is also exempt
from the universal social charge.
Notwithstanding these exemptions from income tax, a corporate recipient
thatcarries on a trade in Ireland through a branch or agency in respect of
which the debt securities are held or attributed, may have a liability to
Irish corporation tax on the interest.
Relief from Irish income tax may also be available under the specific
provisions of a double tax treaty between Ireland and the country ofresidence
of the recipient.
Interest on the debt securities which does not fall within the above
exemptions is within the charge toincome tax, and, in the case of holders of
the debt securities who are individuals, is subject to the universal social
charge. In the past the Irish Revenue Commissioners have not pursued liability
to income tax in respect of persons who are notregarded as being resident in
Ireland except where such persons have a taxable presence of some sort in
Ireland or seek to claim any relief or repayment in respect of Irish tax.
However, there can be no assurance that the Irish Revenue Commissionerswill
apply this treatment in the case of any holder.
Capital Gains Tax
A holder of debt securities will not be subject to Irish tax on capital gains
on a disposal of debt securities unless such holder is eitherresident or
ordinarily resident in Ireland or carries on a trade or business in Ireland
through a branch or agency in respect of which the debt securities were used
or held.
Capital Acquisitions Tax
A gift or inheritance of debt securities will be within the charge to capital
acquisitions tax (which subject to available exemptions andreliefs will be
levied at 33 percent) if either (i) the disposer or the donee/successor in
relation to the gift or inheritance is resident or ordinarily resident in
Ireland (or, in certain circumstances, if the disposer is domiciled in
Irelandirrespective of his residence or that of the donee/successor) on the
relevant date or (ii) if the debt securities are regarded as property situate
in Ireland (i.e. if the debt securities are physically located in Ireland or
if the register ofthe debt securities is maintained in Ireland).
Stamp Duty
The issue of debt securities will not give rise to a charge to Irish stamp duty.
The transfer for cash of debt securities issued by a corporation that is not
Irish incorporated will not generally give rise to stamp duty.
The transfer of debt securities will not give rise to a charge to stamp duty
where the debt securities meet all of the followingconditions:
. they do not carry a right of conversion into stocks or marketable securities (other than loan
capital) of acompany having a register in Ireland or into loan capital having such a right;
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. they do not carry rights of the same kind as shares in the capital of a company, including
rights such as votingright, a share in the profits or a share in the surplus on liquidation;
. they are not issued for a price which is less than 90 percent of their nominal value; and
. they do not carry a right to a sum in respect of repayment or interest
which is related to certain movements inan index or indices (based wholly
or partly and directly or indirectly on stocks or marketable securities)
specified in any instrument or other document relating to loan capital.
The transfer of debt securities solely by way of delivery will not give rise
to a charge to stamp duty.
Where no exemption applies, the transfer of debt securities will give rise to
a charge to Irish stamp duty at the rate of one percent of thehigher of the
market value or the consideration paid.
Taxation Of Payments Under The Guarantee
Payments in the nature of interest, by any Irish incorporated or Irish
tax-resident
entity, under theguarantee may be liable to Irish tax. No such entity will be
obliged to make any deduction or withholding for or on account of Irish tax
provided that (i) the beneficial owner of such payment is, by virtue of the
law of a Relevant Territory,resident for the purposes of tax in a Relevant
Territory which imposes a tax that generally applies to interest receivable in
that Relevant Territory by companies from sources outside that Relevant
Territory or, where the interest is exempted fromthe charge to Irish income
tax under the terms of a double tax agreement which is either in force or
which will come into force once all ratification procedures have been
completed, and (ii) such beneficial owner does not receive any paymentunder
the guarantee in connection with a trade or business which is carried on by
such person through a branch or agency in Ireland.
Taxation OfHolders Of Ordinary Shares
Withholding Tax on Dividends
Distributions made by Allegion plc will generally be subject to dividend
withholding tax ("DWT") at a rate of 25 percent unlessone of the exemptions
described below applies. For DWT purposes, a dividend includes any
distribution made by Allegion plc to its shareholders, including cash
dividends,
non-cash
dividends and additional stockor units taken in lieu of a cash dividend.
Allegion plc is responsible for withholding DWT at source and forwarding the
relevant payment to the Irish Revenue Commissioners.
In particular, a
non-Irish
resident shareholder will not be subject to DWT on dividends received
fromAllegion plc if the shareholder is:
. an individual shareholder resident for tax purposes in a Relevant Territory,
and the individual is neitherresident nor ordinarily resident in Ireland;
. a corporate shareholder that is not resident for tax purposes in Ireland and which is
ultimately controlled,directly or indirectly, by persons resident in a Relevant Territory;
. a corporate shareholder resident for tax purposes in a Relevant Territory provided that the corporate shareholderis
not under the control, whether directly or indirectly, of a person or persons who is or are resident in Ireland;
. a corporate shareholder that is not resident for tax purposes in Ireland and whose
principal class of shares (orthose of its 75 percent parent) is substantially
and regularly traded on a recognized stock exchange either in a Relevant Territory
or on such other stock exchange approved by the Irish Minister for Finance; or
. a corporate shareholder that is not resident for tax purposes in Ireland and is wholly owned,
directly orindirectly, by two or more companies where the principal class of shares of each
of such companies is substantially and regularly traded on a recognized stock exchange in a
Relevant Territory or on such other stock exchange approved by the IrishMinister for Finance,
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and provided that, in all cases noted above but subject to the matters
described below, the shareholder hasprovided the appropriate forms to his or
her broker (in the case of shares held beneficially) or to Allegion plc's
transfer agent (in the case of shares held directly).
If any shareholder who is exempt from withholding receives a dividend subject
to DWT, he or she may make an application for a refund from theIrish Revenue
Commissioners on the prescribed form.
In addition to the exemptions described above, certain categories of
shareholder willbe exempt from DWT provided that they meet the conditions set
out below. It is worth noting that Allegion plc has an agreement in place with
the Bank of New York Mellon Corporation ("BNY Mellon") (which is recognized by
the Irish RevenueCommissioners as a "qualifying intermediary") which satisfies
one of the Irish requirements for dividends to be paid free of DWT to certain
shareholders who hold their shares through DTC, as described below. The
agreement generallyprovides for certain arrangements relating to cash
distributions in respect of those shares of Allegion plc (the "Deposited
Securities") that are held through DTC. The agreement provides that the
qualifying intermediary shall distribute orotherwise make available to Cede &
Co., as nominee for DTC, any cash dividend or other cash distribution to be
made to holders of the Deposited Securities, after Allegion plc delivers or
causes to be delivered to the qualifying intermediarythe cash to be
distributed.
Allegion plc will rely on information received directly or indirectly from
brokers and its transfer agent indetermining where shareholders reside,
whether they have provided the required U.S. tax information and whether they
have provided the required Irish dividend withholding tax forms, as described
below. Shareholders who are required to file Irishforms in order to receive
their dividends free of DWT should note that such forms are valid for five
years and new forms must be filed before the expiration of that period in
order to continue to enable them to receive dividends without DWT. Linksto the
various Irish Revenue forms are available at
http://www.revenue.ie/en/tax/dwt/forms/index.html
.
Shares Held by U.S.Resident Shareholders
Dividends paid on Allegion plc's shares that are owned by residents of the
U.S. and held beneficiallywill not be subject to DWT provided that the address
of the beneficial owner of the shares in the records of the broker is in the
U.S.
Dividends paid on Allegion plc's shares that are owned by residents of the
U.S. and held directly will not be subject to DWT providedthat the shareholder
has provided a valid Irish dividend withholding tax form to Allegion plc's
transfer agent.
If any shareholderwho is resident in the U.S. receives a dividend subject to
DWT, he or she should generally be able to make an application for a refund
from the Irish Revenue Commissioners on the prescribed form.
Shares Held by Residents of Relevant Territories Other Than the U.S.
All shareholders who are residents of Relevant Territories other than the U.S.
must complete the appropriate Irish dividend withholding taxforms in order to
receive their dividends without DWT. Such forms are valid for five years.
If any shareholder who is resident in aRelevant Territory receives a dividend
subject to DWT, he or she may make an application for a refund from the Irish
Revenue Commissioners on the prescribed form.
Please note that this exemption from DWT does not apply to a shareholder
(other than a body corporate) that is resident or ordinarily residentin
Ireland or to a body corporate that is under the control, whether directly or
indirectly, of a person or persons who is or are resident in Ireland.
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However, it may be possible for such a shareholder to rely on a double tax
treaty to limitthe applicable DWT.
Shares Held by Residents of Ireland
Most Irish tax resident or ordinarily resident shareholders will be subject to
DWT in respect of dividend payments on their shares.
Shareholders that are residents of Ireland but are entitled to receive
dividends without DWT must complete the appropriate Irish forms andprovide
them to their brokers (in the case of shares held beneficially), or to
Allegion plc's transfer agent (in the case of shares held directly). Such
forms are valid for five years.
Shareholders who are resident or ordinarily resident in Ireland or are
otherwise subject to Irish tax should consult their own tax advisor.
Timing
Inall cases, shareholders must ensure that they have provided the appropriate
U.S. forms or Irish dividend withholding tax forms to their brokers (so that
such brokers can further transmit the relevant information to Allegion plc's
qualifyingintermediary) before the record date for the next dividend payment
to which they are entitled (in the case of shares held beneficially), or to
Allegion plc's transfer agent at least 7 business days before such record date
(in the case of sharesheld directly). Allegion plc strongly recommends that
shareholders complete the appropriate forms and provide them to their brokers
or to Allegion plc's transfer agent, as the case may be, as soon as possible.
Income Tax on Dividends Paid on Allegion plc Shares
Irish income tax can arise in respect of dividends paid by Irish resident
companies.
A shareholder who is not resident or ordinarily resident in Ireland and who is
entitled to an exemption from DWT, generally has no liabilityto Irish income
tax levies on a dividend from Allegion plc unless he or she holds his or her
Company shares through a branch or agency in Ireland through which a trade is
carried on.
A shareholder who is not resident or ordinarily resident in Ireland and who is
not entitled to an exemption from DWT generally has noadditional Irish income
tax liability unless he or she holds his or her shares through a branch or
agency in Ireland through which a trade is carried on. The DWT deducted by
Allegion plc discharges such liability to Irish income tax provided thatthe
shareholder furnishes the statement of DWT imposed to the Irish Revenue
Commissioners.
Irish resident or ordinarily residentshareholders may be subject to Irish tax
on dividends received from Allegion plc. Such shareholders should consult
their own tax advisor.
Irish Tax on Chargeable Gains
Holders of shares in Allegion plc who are not resident nor, in the case of
individuals, ordinarily resident for tax purposes in Ireland shouldnot be
liable for Irish tax on chargeable gains realized on a subsequent disposal of
their shares unless such shares are used, held or acquired for the purposes of
a trade or business carried on by such holder in Ireland through a branch or
agency.
Capital Acquisitions Tax
Irish capital acquisitions tax ("CAT") comprises principally of gift tax and
inheritance tax. CAT could apply to a gift orinheritance of shares in Allegion
plc irrespective of the place of residence, ordinary residence or
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domicile of the parties. This is because the shares in Allegion plc are
regarded as property situate in Ireland as Allegion plc is incorporated in
Ireland and the share register of Allegion plcmust be held in Ireland. The
person who receives the gift or inheritance has primary liability for CAT.
CAT is levied at a rate of33 percent above certain
tax-free
thresholds. The appropriate
tax-free
threshold is dependent upon (1) the relationship between the donor and the
donee and(2) the aggregation of the values of previous gifts and inheritances
received by the donee from persons within the same group threshold. Gifts and
inheritances passing between spouses are exempt from CAT.
Stamp Duty
Atransfer of shares in Allegion plc by a seller who holds shares beneficially
to a buyer who holds the acquired shares beneficially will not be subject to
Irish stamp duty (unless the transfer involves a change in the nominee that is
the recordholder of the transferred shares).
A transfer of shares in Allegion plc by a seller who holds shares directly to
any buyer, or by aseller who holds the shares beneficially to a buyer who
holds the acquired shares directly, may be subject to Irish stamp duty
(currently at the rate of 1% of the price paid or the market value of the
shares acquired, if higher). Stamp duty is aliability of the buyer or
transferee.
A shareholder who holds shares in Allegion plc directly may transfer those
shares into his or herown broker account to hold them beneficially (or vice
versa) without giving rise to Irish stamp duty provided there is no change in
the ultimate beneficial ownership of the shares as a result of the transfer
and the transfer is not made incontemplation of a sale of the shares. In order
to benefit from this exemption from stamp duty, the seller must confirm to
Allegion plc that there is no change in the ultimate beneficial ownership of
the shares as a result of the transfer and thetransfer is not made in
contemplation of a sale of the shares.
Because of the potential Irish stamp duty on transfers of shares inAllegion
plc, Allegion plc strongly recommends that all directly registered
shareholders open broker accounts so they can transfer their shares into a
broker account, so that their shares are held beneficially, as soon as
possible.
Allegion plc currently intends to pay (or cause one of its affiliates to pay)
stamp duty in connection with share transfers made in theordinary course of
trading by a seller who holds shares directly to a buyer who holds the
acquired shares beneficially. In other cases, Allegion plc may, in its
absolute discretion, pay (or cause one of its affiliates to pay) any stamp
duty.Allegion plc's articles of association provide that, in the event of any
such payment, Allegion plc (i) may seek reimbursement from the transferor or
transferee (at its discretion), (ii) may
set-off
the amount of the stamp duty against future dividends payable to the
transferor or transferee (at its discretion), and (iii) will have a lien
against Allegion plc shares on which it has paid stamp duty and any dividends
paid on such shares.Parties to a share transfer may assume that any stamp duty
arising in respect of a transaction in shares in Allegion plc has been paid
unless one or both of such parties is otherwise notified by Allegion plc.
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PLAN OF DISTRIBUTION
We may sell the securities offered in this prospectus in any of, or any
combination of, the following ways:
. directly to purchasers;
. through agents;
. through underwriters;
. through dealers; and
. through a combination of any of these methods of sale or by any other legally available means.
We or any of our agents may directly solicit offers to purchase these
securities. If required, the applicableprospectus supplement will name any
agent, who may be deemed to be an underwriter as that term is defined in the
Securities Act, involved in the offer or sale of the securities in respect of
which this prospectus is delivered, and will set forth anycommissions payable
by us to that agent. Unless otherwise indicated in the prospectus supplement,
any such agency will be acting in a best efforts basis for the period of its
appointment (ordinarily five business days or less). Agents, dealers
andunderwriters may be customers of, engage in transactions with, or perform
services for us in the ordinary course of business.
If weutilize an underwriter or underwriters in the sale, we will execute an
underwriting agreement with such underwriters at the time of sale to them. If
required, we will set forth in the applicable prospectus supplement the names
of the underwritersand the terms of the transaction. The underwriters will use
the prospectus supplement to make releases of the securities in respect of
which this prospectus is delivered to the public.
If we utilize a dealer in the sale of the securities in respect of which this
prospectus is delivered, we will sell the securities to thedealer, as
principal. The dealer may then resell the securities to the public at varying
prices to be determined by the dealer at the time of resale. If required, the
prospectus supplement will set forth the name of the dealer and the terms of
thetransaction.
Agents, underwriters, and dealers may be entitled under the relevant
agreements to indemnification by us against certainliabilities, including
liabilities under the Securities Act.
If required, the applicable prospectus supplement will set forth the placeand
time of delivery for the securities in respect of which this prospectus is
delivered.
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LEGAL MATTERS
The validity of the debt securities, depositary shares, share purchase
contracts, share purchase units and warrants that may be issued underthis
prospectus will be passed upon by Kirkland & Ellis LLP, Chicago, Illinois. The
validity of the ordinary shares and preferred shares that may be issued by
Allegion plc under this prospectus and particular matters concerning the laws
ofIreland will be passed upon by Arthur Cox LLP, Ireland.
EXPERTS
The financial statements and management's assessment of the effectiveness of
internal control over financial reporting (which is includedin Management's
Report on Internal Control Over Financial Reporting) incorporated in this
Prospectus by reference to the Annual Report on Form
10-K
for the year ended December 31, 2023 have been soincorporated in reliance on
the report of PricewaterhouseCoopers LLP, an independent registered public
accounting firm, given on the authority of said firm as experts in auditing
and accounting.
SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES
Allegion plc has been advised by its Irish counsel, Arthur Cox LLP, that a
judgment for the payment of money rendered by a court in the UnitedStates
would not be automatically enforceable in Ireland. As at the date hereof,
there is no treaty between Ireland and the United States providing for the
reciprocal enforcement of foreign judgments. In order to enforce a monetary
judgment obtainedin the United States in Ireland, separate proceedings have to
be issued seeking an Irish judgment in the terms of the U.S. judgment. A
summary procedure is available in circumstances where an applicant can
establish that:
. the U.S. judgment is for a definite sum;
. the U.S. judgment is final and conclusive; and
. the U.S. judgment is of a court which, as a matter of Irish law, is of competent jurisdiction.
As a matter of Irish law, a court is considered one of competent jurisdiction
if one of the following criteria are met:
. the defendant was resident or present in the U.S. at the time the proceedings
were served (e.g., proof of aphysical presence or office in the jurisdiction); or
. the defendant submitted to the jurisdiction of the court by participating in the proceedings.
Even if the matters referred to above are established by an applicant, an
Irish court has discretion to refuse toenforce the U.S. judgment on certain
grounds including:
. the U.S. judgment having been obtained by fraud;
. the U.S. judgment violating Irish public policy or constituting a judgment of a penal or revenue (tax) nature;
. the U.S. judgment being in breach of natural justice or constitutional justice under the laws of Ireland;
. the U.S. judgment being irreconcilable with an earlier judgment; or
. there being no practical benefit to the party in whose favor the U.S.
judgment is made in seeking to have thatjudgment enforced in Ireland.
It may be difficult for a securityholder to effect service of process within
the U.S. orto enforce judgments obtained against Allegion plc in U.S. courts.
Allegion plc has agreed that it may be served with process with
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respect to actions based on offers and sales of securities made in the United
States and other violations of U.S. Securities laws by having Schlage Lock
Company LLC, a Delaware limited liabilitycompany and wholly-owned subsidiary
of Allegion plc, be its U.S. agent appointed for that purpose. Schlage Lock
Company LLC is located at 11819 North Pennsylvania Street, Carmel, Indiana
46032. A judgment obtained against Allegion plc in a U.S.court would be
enforceable in the United States but could be executed upon only to the extent
the company has assets in the United States. An act that results in Allegion
plc or its respective directors or officers being in breach of the
civilliability provisions of U.S. law would not, by virtue of the breach of
U.S. law, be actionable before a court in Ireland, although such act may
potentially give rise to a cause of action under the local laws of Ireland.
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Allegion US Holding Company Inc.
Exhibit 107
Calculation of Filing Fee Table
424(b)(5)
(Form Type)
Allegion US Holding Company Inc.
(Exact Name of Registrant as Specified in its Charter)
Table 1: Newly Registered Securities
Security Security Fee Amount Proposed Maximum Fee Amount of
Type Class Title Calculation Registered Maximum Aggregate Rate Registration
or OfferingPrice Offering Fee
Carry Per Price
ForwardRule Unit
Newly Registered Securities
Fees to Debt 5.600% Senior Rule $400,000,000 99.667% $398,668,000 0.00014760 $58,844
Be Paid Notes due 457(r)
2034
Fees Previously -- -- -- -- -- -- -- --
Paid
Carry Forward Securities
Carry Forward -- -- -- -- -- -- -- --
Securities
Total Offering $398,668,000
Amounts
Total Fees --
Previously Paid
Total Fee --
Offsets
Net Fee Due $58,844
{graphic omitted}