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Ireland
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98-1108930
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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Earlsfort Centre
Earlsfort Terrace
Dublin 2
Ireland
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(Address of principal executive offices, including zip code)
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(353)(0)
18707400
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(Registrant's phone number, including area code)
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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x
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(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Exhibit
Number
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Exhibit Description
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2.1
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Form of Separation and Distribution Agreement between Ingersoll-Rand plc and Allegion plc*
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3.1
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Form of Memorandum and Articles of Association of Allegion plc**
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3.2
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Certificate of Incorporation of Allegion plc**
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10.1
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Form of Employee Matters Agreement between Ingersoll-Rand plc and Allegion plc*
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10.2
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Form of Tax Matters Agreement between Ingersoll-Rand plc and Allegion plc*
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10.3
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Form of Intellectual Property License Agreement between Ingersoll-Rand plc and Allegion plc*
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10.4
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Form of Transition Services Agreement between Ingersoll-Rand plc and Allegion plc*
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21.1
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List of subsidiaries of Allegion plc*
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99.1
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Preliminary Information Statement of Allegion plc, subject to completion, dated August 14, 2013.**
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*
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To be filed by amendment.
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**
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Filed herewith.
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ALLEGION PLC
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By:
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/s/ Patrick S. Shannon
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Name:
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Patrick S. Shannon
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Title:
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Director
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Exhibit
Number
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Exhibit Description
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2.1
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Form of Separation and Distribution Agreement between Ingersoll-Rand plc and Allegion plc*
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3.1
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Form of Memorandum and Articles of Association of Allegion plc**
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3.2
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Certificate of Incorporation of Allegion plc**
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10.1
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Form of Employee Matters Agreement between Ingersoll-Rand plc and Allegion plc*
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10.2
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Form of Tax Matters Agreement between Ingersoll-Rand plc and Allegion plc*
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10.3
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Form of Intellectual Property License Agreement between Ingersoll-Rand plc and Allegion plc*
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10.4
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Form of Transition Services Agreement between Ingersoll-Rand plc and Allegion plc*
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21.1
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List of subsidiaries of Allegion plc*
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99.1
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Preliminary Information Statement of Allegion plc, subject to completion, dated August 14, 2013.**
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*
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To be filed by amendment.
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**
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Filed herewith.
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1.
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The name of the Company is Allegion public limited company.
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2.
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The Company is to be a public limited company.
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3.
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The objects for which the Company is established are:
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(1)
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(a)
To carry on the business of a global company that provides security products and solutions through the design, manufacture, sale and service of security products, and to do all things usually dealt in by persons carrying on the above mentioned businesses or any of them or likely to be required in connection with any of the said businesses.
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(b)
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To carry on the business of a holding company and to co-ordinate the administration, finances and activities of any subsidiary companies or associated companies, to do all lawful acts and things whatever that are necessary or convenient in carrying on the business of such a holding company and in particular to carry on in all its branches the business of a management services company, to act as managers and to direct or coordinate the management of other companies or of the business, property and estates of any company or person and to undertake and carry out all such services in connection therewith as may be deemed expedient by the Company's board of directors and to exercise its powers as a shareholder of other companies.
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(c)
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To acquire the entire issued share capital of the companies holding the commercial and residential security businesses of Ingersoll-Rand plc.
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(2)
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To acquire shares, stocks, debentures, debenture stock, bonds, obligations and securities by original subscription, tender, purchase, exchange or otherwise and to subscribe for the same either conditionally or otherwise, and to guarantee the subscription thereof and to exercise and enforce all rights and powers conferred by or incidental to the ownership thereof.
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(3)
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To facilitate and encourage the creation, issue or conversion of and to offer for public subscription debentures, debenture stocks, bonds, obligations, shares, stocks, and securities and to act as trustees in connection with any such securities and to take part in the conversion of business concerns and undertakings into companies.
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(4)
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To purchase or by any other means acquire any freehold, leasehold or other property and in particular lands, tenements and hereditaments of any tenure, whether subject or not to any charges or incumbrances, for any estate or interest whatever, and any rights, privileges or easements over or in respect of any property, and any buildings, factories, mills, works, wharves, roads, machinery, engines, plant, live and dead stock, barges, vessels or things, and any real or personal property or rights whatsoever which may be necessary for, or may conveniently be used with, or may enhance the value or property of the Company, and to hold or to sell, let, alienate, mortgage, charge or otherwise deal with all or any such freehold, leasehold, or other property, lands, tenements or hereditaments, rights, privileges or easements.
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(5)
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To sell or otherwise dispose of any of the property or investments of the Company.
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(6)
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To establish and contribute to any scheme for the purchase of shares in the Company to be held for the benefit of the Company's employees and to lend or otherwise provide money to such schemes or
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(7)
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To grant, convey, transfer or otherwise dispose of any property or asset of the Company of whatever nature or tenure for such price, consideration, sum or other return whether equal to or less than the market value thereof and whether by way of gift or otherwise as the Directors shall deem fit and to grant any lease or to enter into any agreement for letting or hire of any such property or asset for a rent or return equal to or less than the market or rack rent therefor or at no rent and subject to or free from covenants and restrictions as the Directors shall deem appropriate.
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(8)
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To acquire and undertake the whole or any part of the business, good-will and assets of any person, firm or company carrying on or proposing to carry on any of the businesses which this Company is authorised to carry on, and as part of the consideration for such acquisition to undertake all or any of the liabilities of such person, firm or company, or to acquire an interest in, amalgamate with, or enter into any arrangement for sharing profits, or for co-operation, or for limiting competition or for mutual assistance with any such person, firm or company and to give or accept by way of consideration for any of the acts or things aforesaid or property acquired, any shares, debentures, debenture stock or securities that may be agreed upon, and to hold and retain or sell, mortgage or deal with any shares, debentures, debenture stock or securities so received.
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(9)
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To apply for, purchase or otherwise acquire any patents, brevets d'invention, licences, concessions and the like conferring any exclusive or non-exclusive or limited rights to use or any secret or other information as to any invention which may seem capable of being used for any of the purposes of the Company or the acquisition of which may seem calculated directly or indirectly to benefit the Company, and to use, exercise, develop or grant licences in respect of or otherwise turn to account the property, rights or information so acquired.
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(10)
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To enter into partnership or into any arrangement for sharing profits, union of interests, co-operation, joint venture, reciprocal concession or otherwise with any person or company carrying on or engaged in or about to carry on or engage in any business or transaction which the Company is authorised to carry on or engage in or any business or transaction capable of being conducted so as directly to benefit this Company.
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(11)
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To invest and deal with the moneys of the Company not immediately required upon such securities and in such manner as may from time to time be determined.
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(12)
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To lend money to and guarantee the performance of the contracts or obligations of any company, firm or person, and the repayment of the capital and principal of, and dividends, interest or premiums payable on, any stock, shares and securities of any company, whether having objects similar to those of this Company or not, and to give all kinds of indemnities.
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(13)
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To engage in currency exchange and interest rate transactions including, but not limited to, dealings in foreign currency, spot and forward rate exchange contracts, futures, options, forward rate agreements, swaps, caps, floors, collars and any other foreign exchange or interest rate hedging arrangements and such other instruments as are similar to, or derived from, any of the foregoing whether for the purpose of making a profit or avoiding a loss or managing a currency or interest rate exposure or any other exposure or for any other purpose.
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(14)
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To guarantee, support or secure, whether by personal covenant or by mortgaging or charging all or any part of the undertaking, property and assets (both present and future) and uncalled capital of the Company, or by both such methods, the performance of the obligations of, and the repayment or payment of the principal amounts of and premiums, interest and dividends on any securities of, any person, firm or company including (without prejudice to the generality of the foregoing) any company which is for the time being the Company's holding company as defined by Section 155 of the Companies Act, 1963 or a subsidiary as therein defined of any such holding company or otherwise associated with the Company in business.
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(15)
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To borrow or secure the payment of money in such manner as the Company shall think fit, and in particular by the issue of debentures, debenture stocks, bonds, obligations and securities of all kinds,
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(16)
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To draw, make, accept, endorse, discount, execute, negotiate and issue promissory notes, bills of exchange, bills of lading, warrants, debentures and other negotiable or transferable instruments.
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(17)
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To subscribe for, take, purchase or otherwise acquire and hold shares or other interests in, or securities of any other company having objects altogether or in part similar to those of this Company, or carrying on any business capable of being conducted so as directly or indirectly to benefit this Company.
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(18)
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To hold in trust as trustees or as nominees and to deal with, manage and turn to account, any real or personal property of any kind, and in particular shares, stocks, debentures, securities, policies, book debts, claims and choses in actions, lands, buildings, hereditaments, business concerns and undertakings, mortgages, charges, annuities, patents, licences, and any interest in real or personal property, and any claims against such property or against any person or company.
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(19)
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To constitute any trusts with a view to the issue of preferred and deferred or other special stocks or securities based on or representing any shares, stocks and other assets specifically appropriated for the purpose of any such trust and to settle and regulate and if thought fit to undertake and execute any such trusts and to issue dispose of or hold any such preferred, deferred or other special stocks or securities.
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(20)
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To give any guarantee in relation to the payment of any debentures, debenture stock, bonds, obligations or securities and to guarantee the payment of interest thereon or of dividends on any stocks or shares of any company.
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(21)
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To construct, erect and maintain buildings, houses, flats, shops and all other works, erections, and things of any description whatsoever either upon the lands acquired by the Company or upon other lands and to hold, retain as investments or to sell, let, alienate, mortgage, charge or deal with all or any of the same and generally to alter, develop and improve the lands and other property of the Company.
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(22)
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To provide for the welfare of persons in the employment of or holding office under or formerly in the employment of or holding office under the Company including Directors and ex-Directors of the Company and the wives, widows and families, dependants or connections of such persons by grants of money, pensions or other payments and by forming and contributing to pension, provident or benefit funds or profit sharing or co-partnership schemes for the benefit of such persons and to form, subscribe to or otherwise aid charitable, benevolent, religious, scientific, national or other institutions, exhibitions or objects which shall have any moral or other claims to support or aid by the Company by reason of the locality of its operation or otherwise.
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(23)
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To remunerate by cash payments or allotment of shares or securities of the Company credited as fully paid up or otherwise any person or company for services rendered or to be rendered to the Company whether in the conduct or management of its business, or in placing or assisting to place or guaranteeing the placing of any of the shares of the Company's capital, or any debentures or other securities of the Company or in or about the formation or promotion of the Company.
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(24)
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To enter into and carry into effect any arrangement for joint working in business or for sharing of profits or for amalgamation with any other company or association or any partnership or person carrying on any business within the objects of the Company.
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(25)
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To distribute in
specie or otherwise as may be resolved, any assets of the Company among its members and in particular the shares, debentures or other securities of any other company belonging to this Company or of which this Company may have the power of disposing.
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(26)
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To vest any real or personal property, rights or interest acquired or belonging to the Company in any person or company on behalf of or for the benefit of the Company, and with or without any declared trust in favour of the Company.
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(27)
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To transact or carry on any business which may seem to be capable of being conveniently carried on in connection with any of these objects or calculated directly or indirectly to enhance the value of or facilitate the realisation of or render profitable any of the Company's property or rights.
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(28)
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To accept stock or shares in or debentures, mortgages or securities of any other company in payment or part payment for any services rendered or for any sale made to or debt owing from any such company, whether such shares shall be wholly or partly paid up.
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(29)
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To pay all costs, charges and expenses incurred or sustained in or about the promotion and establishment of the Company or which the Company shall consider to be preliminary thereto and to issue shares as fully or in part paid up, and to pay out of the funds of the Company all brokerage and charges incidental thereto.
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(30)
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To procure the Company to be registered or recognised in any part of the world.
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(31)
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To do all or any of the matters hereby authorised in any part of the world or in conjunction with or as trustee or agent for any other company or person or by or through any factors, trustees or agents.
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(32)
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To make gifts or grant bonuses to the Directors or any other persons who are or have been in the employment of the Company including substitute and alternate directors.
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(33)
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To do all such other things that the Company may consider incidental or conducive to the attainment of the above objects or as are usually carried on in connection therewith.
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(34)
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To carry on any business which the Company may lawfully engage in and to do all such things incidental or conducive to the business of the Company.
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(35)
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To make or receive gifts by way of capital contribution or otherwise.
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4.
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The liability of the members is limited.
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5.
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The share capital of the Company is €40,000 and US$4,010,000 divided into 40,000 ordinary shares of €1 each, 400,000,000 ordinary shares of US$0.01 each and 10,000,000 preferred shares of US$0.001 each.
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6.
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The shares forming the capital, increased or reduced, may be increased or reduced and be divided into such classes and issued with any special rights, privileges and conditions or with such qualifications as regards preference, dividend, capital, voting or other special incidents, and be held upon such terms as may be attached thereto or as may from time to time be provided by the original or any substituted or amended articles of association and regulations of the Company for the time being, but so that where shares are issued with any preferential or special rights attached thereto such rights shall not be alterable otherwise than pursuant to the provisions of the Company's articles of association for the time being.
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Names, addresses and descriptions
of subscribers
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Number of shares taken
by each subscriber
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for and on behalf of
Enceladus Holding Limited
Arthur Cox Building
Earlsfort Terrace Dublin 2 Corporate Body |
Thirty Nine Thousand, Nine Hundred
and Ninety Four Ordinary Shares
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for and on behalf of
DIJR Nominees Limited
Arthur Cox Building Earlsfort Terrace Dublin 2 Corporate Body |
One Ordinary Share
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for and on behalf of
Fand Limited
Arthur Cox Building
Earlsfort Terrace
Dublin 2 Corporate Body |
One Ordinary Share
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for and on behalf of
Arthur Cox Nominees Limited
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Corporate Body
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One Ordinary Share
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for and on behalf of
Arthur Cox Registrars Limited
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Corporate Body
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One Ordinary Share
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for and on behalf of
Arthur Cox Trust Services Limited
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Corporate Body
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One Ordinary Share
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for and on behalf of
Arthur Cox Trustees Limited
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Corporate Body
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One Ordinary Share
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1.
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The regulations contained in Table A in the First Schedule to the Companies Act 1963 shall not apply to the Company.
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2.
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(a)
In these articles:
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“Act”
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means the Companies Act 1963 as amended by the Companies Acts 1977 to 2005 and Parts 2 and 3 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006, the Companies (Amendment) Act 2009, the Companies (Miscellaneous Provisions) Act 2009 and the Companies (Amendment) Act 2012, all enactments which are to be read as one with, or construed or read together as one with, the Acts and every statutory modification and re-enactment thereof for the time being in force.
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“1983 Act”
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the Companies (Amendment) Act 1983.
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“1990 Act”
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means the Companies Act 1990.
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“Acts”
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means the Companies Acts 1963 to 2005 and Parts 2 and 3 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006, the Companies (Amendment) Act 2009, the Companies (Miscellaneous Provisions) Act 2009 and the Companies (Amendment) Act 2012, all enactments which are to be read as one with, or construed or read together as one with, the aforementioned enactments and every statutory modification and re-enactment thereof for the time being in force.
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“address”
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includes any number or address used for the purposes of communication by way of electronic mail or other electronic communication.
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“Assistant Secretary”
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means any person appointed by the Secretary from time to time to assist the Secretary.
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“Clear Days”
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in relation to the period of notice, means that period excluding the day when the notice is given or deemed to be given and the day for which it is given or on which it is to take effect.
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“electronic communication”
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has the meaning given to those words in the Electronic Commerce Act 2000.
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“electronic signature”
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has the meaning given to those words in the Electronic Commerce Act 2000.
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“Ordinary Resolution”
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means a resolution of which the normal notice for an annual general meeting or extraordinary meeting has been given and which has been passed by a simple majority of members present in person or by proxy and who were entitled to vote.
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“Redeemable Shares”
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means redeemable shares in accordance with Section 206 of the 1990 Act.
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“Register”
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means the register of members to be kept as required in accordance with Section 116 of the Act.
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“Special Resolution”
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means a special resolution of the Company's members within the meaning of Section 141 of the Act.
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“the Company”
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means the company whose name appears in the heading to these articles.
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“the Directors” or
“the Board”
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means the directors from time to time and for the time being of the Company or the directors present at a meeting of the board of directors and includes any person occupying the position of director by whatever name called.
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“the Group”
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means the Company and its subsidiaries from time to time and for the time being.
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“the Holder”
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in relation to any share, means the member whose name is entered in the Register as the holder of the share or, where the context permits, the members whose names are entered in the Register as the joint holders of shares.
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“the Office”
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means the registered office from time to time and for the time being of the Company.
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“the Seal”
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means the common seal of the Company, if any, and includes every duplicate seal.
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“the Secretary”
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means any person appointed to perform the duties of the secretary of the Company.
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“these articles”
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means the articles of association of which this article 2 forms part, as the same may be amended and may be from time to time and for the time being in force.
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(b)
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Expressions in these articles referring to writing shall be construed, unless the contrary intention appears, as including references to printing, lithography, photography and any other modes of representing or reproducing words in a visible form except as provided in these articles and/or where it constitutes writing in electronic form sent to the Company, and the Company has agreed to its receipt in such form. Expressions in these articles referring to execution of any document shall include any mode of execution whether under seal or under hand or any mode of electronic signature as shall be approved by the Directors. Expressions in these articles referring to receipt of any electronic communications shall, unless the contrary intention appears, be limited to receipt in such manner as the Company has approved.
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(c)
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Unless the contrary intention appears, words or expressions contained in these articles shall bear the same meaning as in the Acts or in any statutory modification thereof in force at the date at which these articles become binding on the Company.
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(d)
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A reference to a statute or statutory provision shall be construed as a reference to the laws of Ireland unless otherwise specified and includes:
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(i)
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any subordinate legislation made under it including all regulations, bye-laws, orders and codes made thereunder;
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(ii)
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any repealed statute or statutory provision which it re-enacts (with or without modification); and
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(iii)
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any statute or statutory provision which modifies, consolidates, re-enacts or supersedes it.
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(e)
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The masculine gender shall include the feminine and neuter, and vice versa, and the singular number shall include the plural, and vice versa, and words importing persons shall include firms or companies
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(f)
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Reference to US$, USD, or dollars shall mean the currency of the United States of America and to €, euro, EUR or cent shall mean the currency of Ireland.
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3.
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(a)
The share capital of the Company is €40,000 and US$4,010,000 divided into 40,000 ordinary shares of €1 each, 400,000,000 ordinary shares of US$0.01 each and 10,000,000 preferred shares of US$0.001 each.
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(b)
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The rights and restrictions attaching to the ordinary shares shall be as follows:
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(i)
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subject to the right of the Company to set record dates for the purposes of determining the identity of members entitled to notice of and/or to vote at a general meeting and the authority of the Board and chairman of the meeting to maintain order and security, the right to attend any general meeting of the Company and to exercise one vote per ordinary share held at any general meeting of the Company;
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(ii)
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the right to participate pro rata in all dividends declared by the Company; and
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(iii)
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the right, in the event of the Company's winding up, to participate pro rata in the total assets of the Company.
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(c)
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The Board is empowered to cause the preferred shares to be issued from time to time as shares of one or more series of preferred shares, and in the resolution or resolutions providing for the issue of shares of each particular series, before issuance, the Board is expressly authorised to fix:
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(i)
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the distinctive designation of such series and the number of shares which shall constitute such series, which number may be increased (except as otherwise provided by the Board in creating such series) or decreased (but not below the number of shares thereof then in issue) from time to time by resolution of the Board;
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(ii)
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the rate of dividends payable on shares of such series, whether or not and upon what conditions dividends on shares of such series shall be cumulative and, if cumulative, the date or dates from which dividends shall accumulate;
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(iii)
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the terms, if any, on which shares of such series may be redeemed, including without limitation, the redemption price or prices for such series, which may consist of a redemption price or scale of redemption prices applicable only to redemption in connection with a sinking fund (which term as used herein shall include any fund or requirement for the periodic purchase or redemption of shares), and the same or a different redemption price or scale of redemption prices applicable to any other redemption;
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(iv)
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the terms and amount of any sinking fund provided for the purchase or redemption of shares of such series;
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(v)
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the amount or amounts which shall be paid to the holders of shares of such series in case of liquidation, dissolution or winding up of the Company, whether voluntary or involuntary;
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(vi)
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the terms, if any, upon which the holders of shares of such series may convert shares thereof into shares of any other class or classes or of any one or more series of the same class or of another class or classes;
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(vii)
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the voting rights, full or limited, if any, of the shares of such series; and whether or not and under what conditions the shares of such series (alone or together with the shares of one or more other series having similar provisions) shall be entitled to vote separately as a single class, for the election of one or more additional Directors of the Company in case of dividend arrears or other specified events, or upon other matters;
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(viii)
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whether or not the holders of shares of such series, as such, shall have any preemptive or preferential rights to subscribe for or purchase shares of any class or series of shares of the Company, now or hereafter authorised, or any securities convertible into, or warrants or other evidences of optional rights to purchase or subscribe for, shares of any class or series of the Company, now or hereafter authorised;
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(ix)
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whether or not the issuance of additional shares of such series, or of any shares of any other series, shall be subject to restrictions as to issuance, or as to the preferences, rights and qualifications of any such other series; and
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(x)
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such other rights, preferences and limitations as may be permitted to be fixed by the Board under the laws of Ireland as in effect at the time of the creation of such series.
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(d)
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An ordinary share shall be deemed to be a Redeemable Share on, and from the time of, the existence or creation of an agreement, transaction or trade between the Company (or any agent appointed on its behalf) and any third party pursuant to which the Company (or any agent on its behalf) agrees to acquire or will acquire ordinary shares, or an interest in ordinary shares, from the relevant third party. In these circumstances, the agreement, transaction or trade relating to such shares, or an interest in such shares, shall constitute the redemption of a Redeemable Share in accordance with Part XI of the 1990 Act.
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4.
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Subject to the provisions of Part XI of the 1990 Act and the other provisions of this article, the Company may:
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(a)
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pursuant to Section 207 of the 1990 Act, issue any shares of the Company which are to be redeemed or are liable to be redeemed at the option of the Company or the member on such terms and in such manner as may be determined by the Board; or
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(b)
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Subject to and in accordance with the provisions of the Acts and without prejudice to any relevant special rights attached to any class of shares pursuant to Section 211 of the 1990 Act, purchase any of its own shares (including any Redeemable Shares and without any obligation to purchase on any pro rata basis as between members or members of the same class) and may cancel any shares so purchased or hold them as treasury shares (as defined in Section 209 of the 1990 Act) and may reissue any such shares as shares of any class or classes.
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5.
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Without prejudice to any special rights previously conferred on the Holders of any existing shares or class of shares or to the authority conferred on the Directors pursuant to article 3 to issue the preferred shares, any share in the Company may be issued with such preferred or deferred or other special rights or such restrictions, whether in regard to dividend, voting, return of capital or otherwise, as the Company may from time to time by Ordinary Resolution determine.
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6.
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(a) Without prejudice to the authority conferred on the Directors pursuant to article 3 to issue shares in the capital of the Company, if at any time the share capital is divided into different classes of shares the rights attached to any class or series may, whether or not the Company is being wound up, be varied or abrogated with the consent in writing of the Holders of 75% of the shares then in issue of that class, or with the sanction of a Special Resolution passed at a separate general meeting of the Holders of the shares of that class or series. To every such meeting the provisions of article 31 shall apply.
|
(b)
|
The redemption or purchase of preferred shares or any class or series of preferred shares shall not constitute a variation of rights of the preferred Holders.
|
(c)
|
The issue, redemption or purchase of any of the 10,000,000 preferred shares of US$0.001 shall not constitute a variation of the rights of the Holders of ordinary shares.
|
(d)
|
The issue of preferred shares or any class or series of preferred shares which rank pari passu with, or junior to, any existing preferred shares or class of preferred shares shall not constitute a variation of the existing preferred shares or class of preferred shares.
|
7.
|
The rights conferred upon the Holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.
|
8.
|
(a)
Subject to the provisions of these articles relating to new shares, the shares shall be at the disposal of the Directors, and they may (subject to the provisions of the Acts) allot, grant options over or otherwise dispose of them to such persons, on such terms and conditions and at such times as they may consider to be in the best interests of the Company and its members.
|
(b)
|
Subject to any requirement to obtain the approval of members under any laws, regulations or the rules of any stock exchange to which the Company is subject, the Board is authorised, from time to time,
|
(c)
|
The Directors are, for the purposes of Section 20 of the 1983 Act, generally and unconditionally authorised to exercise all powers of the Company to allot and issue relevant securities (as defined by the said Section 20) up to the amount of the Company's authorised share capital as of the date of adoption of this article or the date of renewal of this authority and to allot and issue any shares purchased by the Company pursuant to the provisions of Part XI of the 1990 Act and held as treasury shares and this authority shall expire five years from the date of adoption of these articles of association or renewal of this authority. The Company may before the expiry of such authority make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the Directors may allot relevant securities in pursuance of such an offer or agreement notwithstanding that the authority hereby conferred has expired.
|
(d)
|
The Directors are hereby empowered pursuant to Sections 23 and 24(1) of the 1983 Act to allot equity securities within the meaning of the said Section 23 for cash pursuant to the authority conferred by article 8(c) as if Section 23(1) of the said 1983 Act did not apply to any such allotment. The Company may before the expiry of such authority make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of such an offer or agreement as if the power conferred by this article 8(d) had not expired.
|
(e)
|
Nothing in these articles shall preclude the Directors from recognising a renunciation of the allotment of any shares by any allottee in favour of some other person.
|
9.
|
The Company may pay commission to any person in consideration of a person subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares in the Company or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares in the Company on such terms and subject to such conditions as the Directors may determine, including, without limitation, by paying cash or allotting and issuing fully or partly paid shares or any combination of the two. The Company may also, on any issue of shares, pay such brokerage fees and commissions as may be lawful.
|
10.
|
Except as required by law, no person shall be recognised by the Company as holding any share upon any trust, and the Company shall not be bound by or be compelled in any way to recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any share or any interest in any fractional part of a share or (except only as by these articles or by law otherwise provided) any other rights in respect of any share except an absolute right to the entirety thereof in the Holder.
|
11.
|
No person shall be entitled to a share certificate in respect of any ordinary share held by them in the share capital of the Company, whether such ordinary share was allotted or transferred to them, and the Company shall not be bound to issue a share certificate to any
such person entered in the Register.
|
12.
|
The Company shall not give, whether directly or indirectly and whether by means of a loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares in the Company or in its holding company, except as permitted by Section 60 of the Act.
|
13.
|
(a)
The instrument of transfer of any share may be executed for and on behalf of the transferor by the Secretary, an Assistant Secretary or more person(s) (whether an individual, body corporate, officeholder or firm) that the Secretary or Assistant Secretary nominates for that purpose from time to time (whether in respect of specific transfers or pursuant to a general standing authorisation), and the Secretary, Assistant Secretary or a relevant nominee shall be deemed to have been irrevocably appointed agent for the transferor of such share or shares with full power to execute, complete and deliver in the name of and on behalf of the transferor of such share or shares all such transfers of shares held by the members in the share capital of the Company. Any document which records the name of the transferor, the name of the transferee, the class and number of shares agreed to be transferred and
|
(b)
|
The Company, at its absolute discretion, may, or may procure that a subsidiary of the Company shall, pay Irish stamp duty arising on a transfer of shares on behalf of the transferee of such shares of the Company. If stamp duty resulting from the transfer of shares in the Company which would otherwise be payable by the transferee is paid by the Company or any subsidiary of the Company on behalf of the transferee, then in those circumstances, the Company shall, on its behalf or on behalf of its subsidiary (as the case may be), be entitled to (i) seek reimbursement of the stamp duty from the transferor or transferee (at the Company's discretion), (ii) set-off the stamp duty against any dividends payable to the transferor or transferee (at the Company's discretion) and (iii) to claim a first and permanent lien on the shares on which stamp duty has been paid by the Company or its subsidiary for the amount of stamp duty paid. The Company's lien shall extend to all dividends paid on those shares.
|
(c)
|
Notwithstanding the provisions of these articles and subject to any regulations made under Section 239 of the 1990 Act, title to any shares in the Company may also be evidenced and transferred without a written instrument in accordance with Section 239 of the 1990 Act or any regulations made thereunder. The Directors shall have power to permit any class of shares to be held in uncertificated form and to implement any arrangements they think fit for such evidencing and transfer which accord with such regulations and in particular shall, where appropriate, be entitled to disapply or modify all or part of the provisions in these articles with respect to the requirement for written instruments of transfer and share certificates (if any), in order to give
effect to such regulations.
|
14.
|
Subject to such of the restrictions of these articles and to such of the conditions of issue of any share warrants as may be applicable, the shares of any member and any share warrant may be transferred by instrument in writing in any usual or common form or any other form which the Directors may approve.
|
15.
|
The Directors may decline to register or recognise any instrument of transfer, including where the instrument of transfer is in respect of more than one class of share.
|
16.
|
If the Directors refuse to register a transfer they shall, within two months after the date on which the transfer was lodged with the Company, send to the transferee notice of the refusal.
|
17.
|
(a)
The Directors may from time to time fix any date as the record date for the purposes of determining the rights of members to notice of and/or to vote at any general meeting of the Company: provided that such record date shall not be more than sixty days before the date of such general meeting. If no record date is fixed by the Directors, the record date for determining members' entitlement to notice of or to vote at a meeting of the members shall be the close of business on the day next preceding the day on which notice is given. Unless the Directors determine otherwise, a determination of members of record entitled to notice of and/or to vote at a meeting of members shall apply to any adjournment or postponement of the meeting.
|
(b)
|
In order that the Directors may determine the members entitled to receive payment of any dividend or other distribution or allotment of any rights or the members entitled to exercise any rights in respect of any change, conversion or exchange of shares, or for the purpose of any other lawful action, the Board may fix any date as the record date: provided that such record date shall not be more than sixty days before the date of such action. If no record date is fixed, the record date for determining members for such purpose shall be at the close of business on the day on which the Directors adopt the resolution relating thereto.
|
18.
|
Registration of transfers may be suspended at such times and for such period, not exceeding in the whole 30 days in each year, as the Directors may from time to time determine subject to the requirements of Section 121 of the Act.
|
19.
|
All instruments of transfer shall upon their being lodged with the Company remain the property of the Company and the Company shall be entitled to retain them.
|
20.
|
In the case of the death of a member, the survivor or survivors where the deceased was a joint Holder, and the personal representatives of the deceased where he was a sole Holder, shall be the only persons recognised by the Company as having any title to his interest in the shares, but nothing herein contained shall release the estate of a deceased joint Holder from any liability in respect of any share which had been jointly held by him with other persons.
|
21.
|
Any person becoming entitled to a share in consequence of the death or bankruptcy of a member may, upon such evidence being produced as may from time to time properly be required by the Directors and subject as herein provided, elect either to be registered himself as Holder of the share or to have some person nominated by him registered as the transferee thereof, but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the shares by that member before his death or bankruptcy, as the case may be.
|
22.
|
If the person so becoming entitled elects to be registered himself, he shall deliver or send to the Company a notice in writing signed by him stating that he so elects. If he elects to have another person registered, he shall evidence his election by executing a transfer of the share to that person. All the limitations, restrictions and provisions of these regulations relating to the right to transfer and the registration of transfers of shares shall be applicable to any such notice or transfer as aforesaid as if the death or bankruptcy of the member had not occurred and the notice of transfer were a transfer signed by that member.
|
23.
|
A person becoming entitled to a share by reason of the death or bankruptcy of the Holder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered Holder of the share, except that he shall not, before being registered as a member in respect of the share, be entitled in respect of it to exercise any right conferred by membership in relation to the meetings of the Company, so, however, that the Directors may at any time give notice requiring such person to elect either to be registered himself or to transfer the share, and if the notice is not complied with within 90 days, the Directors may thereupon withhold payment of all dividends, bonuses or other moneys payable in respect of the share until the requirements of the notice have been complied with.
|
24.
|
The Company may from time to time by Ordinary Resolution increase the authorised share capital by such sum, to be divided into shares of such amount, as the resolution shall prescribe.
|
25.
|
The Company may by Ordinary Resolution:
|
(a)
|
consolidate and divide all or any of its share capital into shares of larger amount than its existing shares;
|
(b)
|
subdivide its existing shares, or any of them, into shares of smaller amount than is fixed by the memorandum of association subject, nevertheless, to Section 68(1)(d) of the Act; or
|
(c)
|
cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and reduce the amount of its authorised share capital by the amount of the shares so cancelled.
|
26.
|
The Company may by Special Resolution reduce its share capital, any capital redemption reserve fund or any share premium account in any manner and with and subject to any incident authorised, and consent required, by law.
|
27.
|
Whenever as a result of an alternation or reorganisation of the share capital of the Company any members would become entitled to fractions of a share, the Directors may, on behalf of those members, sell the aggregated number of shares representing the fractions for the best price reasonably obtainable to any person and distribute the proceeds of sale in due proportion among those members, and the Directors may authorise any person to execute an instrument of transfer of the shares to, or in accordance with the directions of, the purchaser. The transferee shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity in or invalidity of the proceedings in reference to the sale.
|
28.
|
The Company shall in each year hold a general meeting as its annual general meeting in addition to any other meeting in that year, and shall specify the meeting as such in the notices calling it. Not more than fifteen months shall elapse between the date of one annual general meeting of the Company and that of the next. Subject to compliance with Section 140 of the Act, all general meetings of the Company may be held outside of Ireland.
|
29.
|
All general meetings other than annual general meetings shall be called extraordinary general meetings.
|
30.
|
(a)
The Chairman or the Board by vote of a majority of the Board may convene an extraordinary general meeting.
|
(b)
|
Extraordinary general meetings may also be convened on requisition, or in default by such requisitionists, as provided in Section 132 of the Act.
|
31.
|
All provisions of these articles relating to general meetings of the Company shall, mutatis mutandis, apply to every separate general meeting of the Holders of any class or series of shares in the capital of the Company, except that:
|
(a)
|
the necessary quorum shall be two or more persons holding or representing by proxy (whether or not such Holder actually exercises his voting rights in whole, in part or at all at the relevant general meeting) at least one-third in nominal value of the issued shares of the class or series or, at any adjourned meeting of such Holders, one Holder present in person or by proxy, whatever the amount of his holding, shall be deemed to constitute a meeting; and
|
(b)
|
on a poll, each Holder of shares of the class or series shall have one vote in respect of every share of the class held by him.
|
32.
|
A Director shall be entitled, notwithstanding that he is not a member, to attend and speak at any general meeting and at any separate meeting of the Holders of any class of shares in the Company.
|
33.
|
(a)
The Board may, in its absolute discretion, authorise the Secretary to postpone any general meeting called in accordance with the provisions of these articles (other than a meeting requisitioned under article 30(b) of these articles or the postponement of which would be contrary to the Acts or a court order pursuant to the Acts) if the Board considers that, for any reason, it is impractical or unreasonable to hold the general meeting, provided that notice of postponement is given to each member before the time for such meeting. Fresh notice of the date, time and place for the postponed meeting shall be given to each member in accordance with the provisions of these articles.
|
(b)
|
The Board may, in its absolute discretion, authorise the Secretary to cancel any general meeting called in accordance with the provisions of these articles (other than a meeting requisitioned under article 30(b) of these articles or the cancellation of which would be contrary to the Acts or a court order pursuant to the Acts) if the Board considers that, for any reason, it is impractical or unreasonable to hold the general meeting, provided that notice of cancellation is given to each member before the time for such meeting.
|
34.
|
(a)
Subject to the provisions of the Acts allowing a general meeting to be called by shorter notice, an annual general meeting, and an extraordinary general meeting called for the passing of a special resolution, shall be called by not more than sixty Clear Days' notice and not less than twenty-one Clear Days' notice and all other extraordinary general meetings shall be called by not more than sixty Clear Days' notice and not less than fourteen Clear Days' notice.
|
(b)
|
Any notice convening a general meeting shall specify the time and place of the meeting and, in the case of special business, the general nature of that business and, in reasonable prominence, that a member entitled to attend and vote is entitled to appoint a proxy to attend, speak and vote in his place and that a proxy need not be a member of the Company. It shall also give particulars of any Directors who are to retire at the meeting and of any persons who are recommended by the Directors for appointment or re-appointment as Directors at the meeting or in respect of whom notice has been duly given to the Company of the intention to propose them for appointment or re-appointment as Directors at the meeting. Notwithstanding the foregoing, the latter requirement shall only apply where the
|
(c)
|
The accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by, any person entitled to receive notice shall not invalidate the proceedings at the meeting.
|
(d)
|
Where, by any provision contained in the Acts, extended notice is required of a resolution, the resolution shall not be effective (except where the Directors of the Company have resolved to submit it) unless notice of the intention to move it has been given to the Company not less than twenty-eight days (or such shorter period as the Acts permit) before the meeting at which it is moved, and the Company shall give to the members notice of any such resolution as required by and in accordance with the provisions of the Acts.
|
35.
|
All business shall be deemed special that is transacted at an extraordinary general meeting, and also all that is transacted at an annual general meeting, with the exception of declaring a dividend, the consideration of the accounts, balance sheets and the reports of the Directors and auditors, the election of Directors, the re-appointment of the retiring auditors and the fixing of the remuneration of the auditors.
|
36.
|
(a)
At any annual general meeting only such business shall be conducted as shall have been brought before the meeting (i) by or at the direction of the Board or (ii) by any member entitled to vote at such meeting who complies with the procedures set forth in this article.
|
(b)
|
Any member entitled to vote at any annual general meeting may propose business to be included in the agenda of such meeting only if written notice of such member's intent is given to the Secretary of the Company, either by personal delivery or mail or by facsimile, not later than 90 days in advance of the anniversary of the immediately preceding annual general meeting or if the date of the annual general meeting of members 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 on the seventh day following the date on which notice of such meeting is given to members. A member's notice to the Secretary shall set forth in writing as to each matter such member proposes to bring before the annual general meeting (i) a brief description of the business desired to be brought before the annual general meeting and the reasons for conducting such business at the annual general meeting, (ii) the name and address, as they appear on the Company's Register, of the members proposing such business, (iii) the class and number of shares of the Company which are beneficially owned by the member and (iv) any material interest of the member in such business. Notwithstanding anything in these articles to the contrary, no business shall be conducted at an annual general meeting except in accordance with the procedures set forth in this article. The Chairman or other person presiding at the annual general meeting shall, if the facts so warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this article 36(b), and, if such Chairman or other person should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.
|
(c)
|
Any member entitled to vote for the election of Directors at a meeting or to express a consent in writing without a meeting may nominate a person or persons for election as a Director only if written notice of such member's intent to make such nomination is given to the Secretary of the Company, either by personal delivery, mail or facsimile not later than (i) with respect to an election to be held at an annual general meeting of members, 90 days in advance of the anniversary of the immediately preceding annual general meeting or if the date of the annual general meeting of members 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 on the seventh day following the date on which notice of such meeting is given to members and (ii) in the case of any member who wishes to nominate a person or persons for election as a Director pursuant to consents in writing by members without a meeting (to the extent election by such consents is permitted under applicable law and these articles), 60 days in
|
37.
|
Except as otherwise provided by law, at any extraordinary general meeting only such business shall be conducted as is set forth in the notice thereof or otherwise properly brought before the meeting by or at the direction of the Board.
|
38.
|
Except as otherwise provided by law, the memorandum of association or these articles, the chairman of the meeting shall have the power to determine whether a nomination or any other business proposed to be brought before a general meeting was made or proposed, as the case may be, in accordance with these articles and, if any proposed nomination or other business is not in compliance with these articles, to declare that no action shall be taken on such nomination or other proposal and such nomination or other proposal shall be disregarded.
|
39.
|
No business shall be transacted at any general meeting unless a quorum is present at the time when the meeting proceeds to business. The Holders of shares, present in person or by proxy (whether or not such Holder actually exercises his voting rights in whole, in part or at all at the relevant general meeting), entitling them to exercise a majority of the voting power of the Company on the relevant record date shall constitute a quorum.
|
40.
|
If the holders of the number of shares necessary to constitute a quorum shall fail to attend in person or by proxy at the time and place fixed by these articles for a general meeting, a majority in interest of the members present, in person or by proxy, may adjourn from time to time without notice other than announcement at the meeting until the holders of the amount of shares requisite to constitute a quorum shall attend. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified.
|
41.
|
The Chairman, if any, of the Board, shall preside as chairman at every general meeting of the Company, or if there is no such Chairman, or if he is not present within fifteen minutes after the time appointed for the holding of the meeting or is unwilling to act, the Directors present shall elect one of their number to be chairman of the meeting.
|
42.
|
If at any meeting no Director is willing to act as Chairman or if no Director is present within fifteen minutes after the time appointed for holding the meeting, the members present shall choose one of their number to be chairman of the meeting.
|
43.
|
The Chairman of the meeting may, with the consent of a majority of the members, in any general meeting at which a quorum is present (and shall if so directed), adjourn the meeting. Unless the meeting is adjourned to a specific date and time, fresh notice of the date, time and place for the resumption of the adjourned meeting shall be given to each member in accordance with the provisions of these articles.
|
44.
|
At any general meeting a resolution put to the vote of the meeting shall be decided by poll.
|
45.
|
A poll shall be taken in such manner as the Chairman directs, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was taken.
|
46.
|
Subject to Section 141 of the Act, a resolution in writing signed by all of the members for the time being entitled to attend and vote on such resolution at a general meeting (or being bodies corporate by their duly authorised representatives) shall be as valid and effective for all purposes as if the resolution had been passed
|
47.
|
The Board may, and at any general meeting, the Chairman of such meeting may make any arrangement and impose any requirement or restriction it or he considers appropriate to ensure the security of a general meeting including, without limitation, requirements for evidence of identity to be produced by those attending the meeting, the searching of their personal property and the restriction of items that may be taken into the meeting place. The Board and, at any general meeting, the chairman of such meeting are entitled to refuse entry to a person who refuses to comply with any such arrangements, requirements or restrictions.
|
48.
|
(a)
The Board may make such arrangements as it considers appropriate to enable the members to participate in any general meeting by means of electronic or other communication facilities, so as to permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.
|
(b)
|
The Board may, and at any general meeting, the chairman of such meeting may make any arrangement and impose any requirement as may be reasonable for the purpose of verifying the identity of members participating by way of electronic or other communication facilities, as described in article 48(a).
|
49.
|
Where there is an equality of votes on a poll, the Chairman of the meeting shall be entitled to a casting vote in addition to any other vote he may have.
|
50.
|
Subject to any special rights or restrictions as to voting for the time being attached by or in accordance with these articles to any class of shares on a poll every member who is present in person or by proxy shall have one vote for each share of which he is the Holder.
|
51.
|
When there are joint Holders, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint Holders: and for this purpose, seniority shall be determined by the order in which the names stand in the Register.
|
52.
|
A member of unsound mind, or in respect of whom an order has been made by any court having jurisdiction (whether in Ireland or elsewhere) in matters concerning mental disorder, may vote by his committee, receiver, guardian or other person appointed by that court and any such committee, receiver, guardian or other person may vote by proxy on a poll. Evidence to the satisfaction of the Directors of the authority of the person claiming to exercise the right to vote shall be received at the Office or at such other address as is specified in accordance with these articles for the receipt of appointments of proxy, not less than forty-eight hours before the time appointed for holding the meeting or adjourned meeting at which the right to vote is to be exercised and in default the right to vote shall not be exercisable.
|
53.
|
No objection shall be raised to the qualification of any voter except at the meeting or adjourned meeting at which the vote objected to is given or tendered, and every vote not disallowed at such meeting shall be valid for all purposes. Any such objection made in due time shall be referred to the chairman of the meeting, whose decision shall be final and conclusive.
|
54.
|
Votes may be given either personally or by proxy.
|
55.
|
(a)
Every member entitled to attend and vote at a general meeting may appoint a proxy to attend, speak and vote on his behalf and may appoint more than one proxy to attend, speak and vote at the same meeting. The appointment of a proxy shall be in any form which the Directors may approve and, if required by the Company, shall be signed by or on behalf of the appointor. In relation to written proxies, a body corporate may sign a form of proxy under its common seal or under the hand of a duly authorised officer thereof or in such other manner as the Directors may approve. A proxy need not be a member of the Company. The appointment of a proxy in electronic or other form shall only be effective in such manner as the Directors may approve.
|
(b)
|
Without limiting the foregoing, the Directors may from time to time permit appointments of a proxy to be made by means of a telephonic, electronic or internet communication or facility and may in a similar manner permit supplements to, or amendments or revocations of, any such telephonic,
|
56.
|
Any body corporate which is a member of the Company may authorise such person as it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company and the person so authorised shall be entitled to exercise the same powers on behalf of the body corporate which he represents as that body corporate could exercise if it were an individual member of the Company. The Company may require evidence from the body corporate of the due authorisation of such person to act as the representative of the relevant body corporate.
|
57.
|
An appointment of proxy relating to more than one meeting (including any adjournment thereof) having once been received by the Company for the purposes of any meeting shall not require to be delivered to, deposited with or received by the Company again for the purposes of any subsequent meeting to which it relates.
|
58.
|
Receipt by the Company of an appointment of proxy in respect of a meeting shall not preclude a member from attending and voting at the meeting or at any adjournment thereof. An appointment of proxy shall be valid, unless the contrary is stated therein, for any adjournment of the meeting to which it relates.
|
59.
|
(a)
A vote given in accordance with the terms of an appointment of proxy or a resolution authorising a representative to act on behalf of a body corporate shall be valid notwithstanding the death or insanity of the principal, or the revocation of the appointment of proxy or of the authority under which the proxy was appointed or of the resolution authorising the representative to act or transfer of the share in respect of which the proxy was appointed or the authorisation of the representative to act was given, provided that no notice in writing (whether in electronic form or otherwise) of such death, insanity, revocation or transfer shall have been received by the Company at the Office, at least one hour before the commencement of the meeting or adjourned meeting at which the appointment of proxy is used or at which the representative acts PROVIDED HOWEVER, that where such notice is given in electronic form it shall have been received by the Company at least 24 hours (or such lesser time as the Directors may specify) before the commencement of the meeting.
|
(b)
|
The Directors may send, at the expense of the Company, by post, electronic mail or otherwise, to the members forms for the appointment of a proxy (with or without stamped envelopes for their return) for use at any general meeting or at any class meeting, either in blank or nominating any one or more of the Directors or any other persons in the alternative.
|
60.
|
The number of Directors shall not be less than two nor more than fifteen. The continuing Directors may act notwithstanding any vacancy in their body, provided that if the number of the Directors is reduced below the prescribed minimum the remaining Director or Directors shall appoint forthwith an additional Director or additional Directors to make up such minimum or shall convene a general meeting of the Company for the purpose of making such appointment. If, at any annual general meeting of the Company, the number of Directors is reduced below the prescribed minimum due to the failure of any Directors to be re-elected, then in those circumstances, the two Directors which receive the highest number of votes in favour of re-election shall be re-elected and shall remain Directors until such time as additional Directors have been appointed to replace them as Directors. If, at any annual general meeting of the Company, the number of Directors is reduced below the prescribed minimum in any circumstances where one Director is re-elected, then that Director shall hold office until the next annual general meeting and the Director which (excluding the re-elected Director) receives the highest number of votes in favour of re-election shall be re-elected and shall remain a Director until such time as one or more additional Directors have been appointed to replace him or her. If there be no Director or Directors able or willing to act then any two members may summon a general meeting for the purpose of appointing Directors. Any additional Director so appointed shall hold office (subject to the provisions of the
|
61.
|
Each Director shall be paid a fee for the services at such rate as may from time to time be determined by the Board. The Directors may also be paid all traveling, hotel and other expenses properly incurred by them in attending and returning from meetings of the Directors or any committee of the Directors or general meetings of the Company or in connection with the business of the Company.
|
62.
|
If any Director shall be called upon to perform extra services which in the opinion of the Directors are outside the scope of the ordinary duties of a Director, the Company may remunerate such Director either by a fixed sum or by a percentage of profits or otherwise as may be determined by a resolution passed at a meeting of the Directors and such remuneration may be either in addition to or in substitution for any other remuneration to which he may be entitled as a Director.
|
63.
|
No shareholding qualification for Directors shall be required. A Director who is not a member of the Company shall nevertheless be entitled to attend and speak at general meetings.
|
64.
|
Unless the Company otherwise directs, a Director of the Company may be or become a Director or other officer of, or otherwise interested in, any company promoted by the Company or in which the Company may be interested as Holder or otherwise, and no such Director shall be accountable to the Company for any remuneration or other benefits received by him as a Director or officer of, or from his interest in, such other company.
|
65.
|
Subject to Part III of the 1983 Act, the Directors may exercise all the powers of the Company to borrow or raise money, and to mortgage or charge its undertaking, property, assets and uncalled capital or any part thereof and to issue debentures, debenture stock and other securities whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party, without any limitation as to amount.
|
66.
|
The business of the Company shall be managed by the Directors, who may pay all expenses incurred in promoting and registering the Company and may exercise all such powers of the Company as are not, by the Acts or by these articles, required to be exercised by the Company in general meeting, subject, nevertheless, to any of these articles and to the provisions of the Acts.
|
67.
|
The Directors may from time to time and at any time by power of attorney appoint any company, firm or person or body of persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under these articles) and for such period and subject to such conditions as they may think fit, and any such power of attorney may contain such provisions for the protection of persons dealing with any such attorney as the Directors may think fit, and may also authorise any such attorney to delegate all or any of the powers, authorities and discretions vested in him.
|
68.
|
A Director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the Company shall declare the nature of his interest at a meeting of the Directors in accordance with Section 194 of the Act.
|
69.
|
(a)
A Director shall be entitled (in the absence of some other material interest than is indicated below) to vote (and be counted in the quorum) in respect of any resolutions concerning any of the following matters, namely:
|
(i)
|
the giving of any security, guarantee or indemnity to him in respect of money lent by him to the Company or any of its subsidiary or associated companies or obligations incurred by him or by any other person at the request of or for the benefit of the Company or any of its subsidiary or associated companies;
|
(ii)
|
the giving of any security, guarantee or indemnity to a third party in respect of a debt or obligation of the Company or any of its subsidiary or associated companies for which he
|
(iii)
|
any proposal concerning any offer of shares or debentures or other securities of or by the Company or any of its subsidiary or associated companies for subscription, purchase or exchange in which offer he is or is to be interested as a participant in the underwriting or sub-underwriting thereof;
|
(iv)
|
any proposal concerning any other company in which he is interested, directly or indirectly and whether as an officer or member or otherwise howsoever, provided that he is not the Holder of or beneficially interested in 1% or more of the issued shares of any class of such company or of the voting rights available to members of such company (or of a third company through which his interest is derived) (any such interest being deemed for the purposes of this article to be a material interest in all circumstances);
|
(v)
|
any proposal concerning the adoption, modification or operation of a superannuation fund or retirement benefits scheme under which he may benefit and which has been approved by or is subject to and conditional upon approval for taxation purposes by the appropriate Revenue authorities;
|
(vi)
|
any proposal concerning the adoption, modification or operation of any scheme for enabling employees (including full time executive Directors) of the Company and/or any subsidiary thereof to acquire shares in the Company or any arrangement for the benefit of employees of the Company or any of its subsidiaries under which the Director benefits or may benefit; or
|
(vii)
|
any proposal concerning the giving of any indemnity pursuant to article 117 or the discharge of the cost of any insurance coverage purchased or maintained pursuant to article 75 and article 117(c).
|
(b)
|
Where proposals are under consideration concerning the appointment (including fixing or varying the terms of appointment) of two or more Directors to offices or employments with the Company or any company in which the Company is interested, such proposals may be divided and considered in relation to each Director separately and in such case each of the Directors concerned (if not debarred from voting under article 69(a)(iv)) shall be entitled to vote (and be counted in the quorum) in respect of each resolution except that concerning his own appointment.
|
(c)
|
If a question arises at a meeting of Directors or of a committee of Directors as to the materiality of a Director's interest or as to the right of any Director to vote and such question is not resolved by his voluntarily agreeing to abstain from voting, such question may be referred, before the conclusion of the meeting, to the chairman of the meeting and his ruling in relation to any Director other than himself shall be final and conclusive. In relation to the Chairman, such question may be resolved by a resolution of a majority of the Directors (other than the Chairman) present at the meeting at which the question first arises.
|
(d)
|
For the purposes of this article, an interest of a person who is the spouse or a minor child of a Director shall be treated as an interest of the Director.
|
(e)
|
The Company by Ordinary Resolution may suspend or relax the provisions of this article to any extent or ratify any transaction not duly authorised by reason of a contravention of this article.
|
70.
|
A Director may hold and be remunerated in respect of any other office or place of profit under the Company or any other company in which the Company may be interested (other than the office of auditor of the Company or any subsidiary thereof) in conjunction with his office of Director for such period and on such terms as to remuneration and otherwise as the Directors may determine, and no Director or intending Director shall be disqualified by his office from contracting or being interested, directly or indirectly, in any contract or arrangement with the Company or any such other company either with regard to his tenure of any such other office or place of profit or as
vendor, purchaser or otherwise nor shall any Director so contracting or being so interested be liable to account to the Company for any profits and advantages accruing to him from any such contract or arrangement by reason of such Director holding that office or of the fiduciary relationship thereby established.
|
71.
|
The Directors may exercise the voting powers conferred by shares of any other company held or owned by the Company in such manner in all respects as they think fit and in particular they may exercise their voting powers in favour of any resolution appointing the Directors or any of them as Directors or officers of such other company or providing for the payment of remuneration or pensions to the Directors or officers of such other company.
|
72.
|
Any Director may act by himself or his firm in a professional capacity for the Company, and he or his firm shall be entitled to remuneration for professional services as if he were not a Director, but nothing herein contained shall authorise a
Director or his firm to act as auditor to the Company.
|
73.
|
All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for money paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, by such person or persons and in such manner as the Directors shall from time to time by resolution determine.
|
74.
|
The Directors shall cause minutes to be made in books provided for the purpose:
|
(a)
|
of all appointments of officers made by the Directors;
|
(b)
|
of the names of the Directors present at each meeting of the Directors and of any committee of the Directors; and
|
(c)
|
of all resolutions and proceedings at all meetings of the Company and of the Directors and of committees of Directors.
|
75.
|
The Directors may procure the establishment and maintenance of or participate in, or contribute to any non-contributory or contributory pension or superannuation fund, scheme or arrangement or life assurance scheme or arrangement for the benefit of, and pay, provide for or procure the grant of donations, gratuities, pensions, allowances, benefits or emoluments to any persons (including Directors or other officers) who are or shall have been at any time in the employment or service of the Company or of any company which is or was a subsidiary of the Company or of the predecessor in business of the Company or any such subsidiary or holding Company and the wives, widows, families, relatives or dependants of any such persons. The Directors may also procure the establishment and subsidy of or subscription to and support of any institutions, associations, clubs, funds or trusts calculated to be for the benefit of any such persons as aforesaid or otherwise to advance the interests and well-being of the Company or of any such other Company as aforesaid, or its members, and payments for or towards the insurance of any such persons as aforesaid and subscriptions or guarantees of money for charitable or benevolent objects or for any exhibition or for any public, general or useful object. Provided that any Director shall be entitled to retain any benefit received by him under this article, subject only, where the Acts require, to disclosure to the members and the approval of the Company in general meeting.
|
76.
|
The office of a Director shall be vacated ipso facto if the Director:
|
(a)
|
is restricted or disqualified to act as a Director under the provisions of Part VII of the 1990 Act;
|
(b)
|
resigns his office by notice in writing to the Company or in writing offers to resign and the Directors resolve to accept such offer;
|
(c)
|
is or becomes bankrupt or makes any arrangement or composition with his or her creditors generally;
|
(d)
|
is or becomes of unsound mind or dies; or
|
(e)
|
is removed from office under article 81.
|
77.
|
At every annual general meeting of the Company, each of the Directors shall retire from office unless re-elected by Ordinary Resolution at the annual general meeting. A Director retiring at a meeting shall retain office until the close or adjournment of the meeting.
|
78.
|
Every Director nominated for re-election by the Board shall be eligible to stand for re-election at an annual general meeting.
|
79.
|
If a Director nominated for re-election by the Board offers himself for re-election, he shall be deemed to have been re-elected unless at such meeting the Ordinary Resolution for the re-election of such Director has been defeated.
|
80.
|
The Company may from time to time by Special Resolution increase or reduce the maximum number of Directors.
|
81.
|
The Company may, by Ordinary Resolution, of which extended notice has been given in accordance with Section 142 of the Act, remove any Director before the expiration of his period of office notwithstanding anything in these regulations or in any agreement between the Company and such Director. Such removal shall be without prejudice to any claim such Director may have for damages for breach of any contract of service between him and the Company.
|
82.
|
The Company may, by Ordinary Resolution, appoint another person in place of a Director removed from office under article 81 and, without prejudice to the powers of the Directors under article 60 or article 83, the Company in general meeting by Ordinary Resolution may appoint any person to be a Director either to fill a casual vacancy or as an additional Director, subject to the maximum number of Directors set out in article 60.
|
83.
|
The Directors may appoint a person who is willing to act to be a Director, either to fill a vacancy or as an additional Director, provided that the appointment does not cause the number of Directors to exceed any number fixed by or in accordance with these articles as the maximum number of Directors. A Director so appointed shall hold office only until the next following annual general meeting. If not re-appointed at such annual general meeting, such Director shall vacate office at the conclusion thereof.
|
84.
|
(a)
The quorum necessary for the transaction of business at all meetings of the Board shall be a majority of the Directors then in office. If at any meeting of the Board there be less than a quorum present, a majority of those present or any Director solely present may adjourn the meeting from time to time without further notice.
|
(b)
|
Regular meetings of the Board shall be held at such times and intervals as the Board may from time to time determine.
|
(c)
|
Special meetings of the Board shall be held on the requisition of the Chairman, if there is one, or if not, by 33⅓% of the Directors then in office.
|
(d)
|
Directors may participate in any meeting of the Board by means of such telephone, electronic or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.
|
(e)
|
Unless a greater number is expressly required by law or these articles, the affirmative votes of a majority of the votes cast by the Directors present at a meeting at which a quorum is in attendance shall be the act of the Board or a committee thereof, as appropriate. At any time that these articles provide that Directors elected by the holders of a class or series of shares shall have more or less than one vote per Director on any matter, every reference in these articles to a majority or other proportion of Directors shall refer to a majority or other proportion of the votes of such Directors.
|
85.
|
The continuing Directors may act notwithstanding any vacancy in their number but, if and so long as their number is reduced below the number fixed by or pursuant to these articles as the necessary quorum of Directors, the continuing Directors or Director may act for the purpose of increasing the number of Directors to that number or of summoning a general meeting of the Company but for no other purpose.
|
86.
|
Unless otherwise agreed by a majority of those attending and entitled to attend and vote thereat, the Chairman, if there be one, shall act as chairman at all meetings of the Board, or in the absence of the Chairman, a chairman shall be appointed or elected by those present at the meeting and entitled to vote.
|
87.
|
The Board may from time to time designate committees of the Board, with such powers and duties as the Board may decide to confer on such committees, and shall, for those committees and any others provided for herein, elect a Director or Directors to serve as the member or members, designating, if it desires, other Directors as alternate members who may replace any absent or disqualified member at any meeting of the committee.
|
88.
|
A committee may elect a chairman of its meeting. If no such Chairman is elected, or if at any meeting the Chairman is not present within five minutes after the time appointed for holding the same, the members present may choose one of their number to be chairman of the meeting.
|
89.
|
All acts done by any meeting of the Directors or of a committee of Directors or by any person acting as a Director shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such Director or person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and was qualified to be a Director.
|
90.
|
(a)
Notice of a regular meeting of the Board shall be deemed to be duly given to a Director if it is given to such Director verbally in person or by telephone or otherwise communicated or sent to such Director by mail, courier service, telecopier, facsimile, printing, computer generated email or other mode of representing words in a legible and non-transitory form at such Director's last known address or any other address given by such Director to the Company for this purpose before the proposed date of the meeting, but a failure of the Secretary to send such notice shall not invalidate any proceedings of the Board at such meeting.
|
(b)
|
Notice of a special meeting of the Board shall be deemed to be duly given to a Director if it is sent to such Director by mail before the proposed date of the meeting, or given to such Director verbally in person or by telephone or otherwise communicated or sent to such Director by mail, courier service, telecopier facsimile, printing, computer generated email or other mode of representing words in a legible and non-transitory form, at such Director's last known address or any other address given by such Director to the Company for this purpose at least one day before the proposed date of the meeting, but such notice may be waived by any Director. At any special meeting at which every Director shall be present, even without notice, any business may be transacted.
|
91.
|
A resolution or other document in writing (in electronic form or otherwise) signed (whether by electronic signature, advanced electronic signature or otherwise as approved by the Directors) by all the Directors entitled to receive notice of a meeting of Directors or of a committee of Directors shall be as valid as if it had been passed at a meeting of Directors or (as the case may be) a committee of Directors duly convened and held and may consist of several documents in the like form each signed by one or more Directors, and such resolution or other document or documents when duly signed may be delivered or transmitted (unless the Directors shall otherwise determine either generally or in any specific case) by facsimile transmission, electronic mail or some other similar means of transmitting the contents of documents.
|
92.
|
(a)
The executives of the Company shall consist of a Chief Executive Officer and a Secretary (who may or may not be Directors) and the Board and, if so authorized by the Board, the Chief Executive Officer may appoint such other executives (who may or may not be Directors) as the Board may from time to time determine, including, without limitation, presidents, chief operating officers, chief financial officers, senior vice-presidents, vice-presidents, treasurers, controllers, assistant treasurers and assistant secretaries. A Person may hold any number of positions simultaneously.
|
(b)
|
The executives shall have the powers typically exercised by persons holding such positions or such powers as may be delegated to them by the Board from time to time and will perform the usual duties pertaining to such positions as well as perform such duties in the management, business and affairs of the Company as may be delegated to them by the Board from time to time.
|
93.
|
(a)
The Directors shall ensure that the Seal (including any official securities seal kept pursuant to the Acts) shall be used only by the authority of the Directors or of a committee authorised by the Directors and that every instrument to which the seal shall be affixed shall be signed by a Director or some other person appointed by the Chairman, Secretary or Assistant Secretary for that purpose.
|
(b)
|
The Company may have for use in any place or places outside Ireland, a duplicate Seal or Seals each of which shall be a duplicate of the Seal of the Company.
|
(c)
|
The Company may exercise the powers conferred by the Acts with regard to having an official seal for use abroad and such powers shall be vested in the Directors.
|
94.
|
The Company in general meeting may declare dividends, but no dividends shall exceed the amount recommended by the Directors.
|
95.
|
The Directors may from time to time pay to the members such interim dividends as appear to the Directors to be justified by the profits of the Company.
|
96.
|
No dividend or interim dividend shall be paid otherwise than in accordance with the provisions of Part IV of the 1983 Act.
|
97.
|
The Directors may, before recommending any dividend, set aside out of the profits of the Company such sums as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for any purpose to which the profits of the Company may be properly applied and pending such application may at the like discretion either be employed in the business of the Company or be invested in such investments as the Directors may lawfully determine. The Directors may also, without placing the same to reserve, carry forward any profits which they may think it prudent not to divide.
|
98.
|
Subject to the rights of persons, if any, entitled to shares with special rights as to dividend, all dividends shall be declared and paid according to the amounts paid or credited as paid on the shares in respect whereof the dividend is paid. All dividends shall be apportioned and paid proportionately to the amounts paid or credited as paid on the shares during any portion or portions of the period in respect of which the dividend is paid: but if any share is issued on terms providing that it shall rank for dividend as from a particular date, such share shall rank for dividend accordingly.
|
99.
|
The Directors may deduct from any dividend payable to any member all sums of money (if any) immediately payable by him to the Company in relation to the shares of the Company.
|
100.
|
Any general meeting declaring a dividend or bonus and any resolution of the Directors declaring an interim dividend may direct payment of such dividend or bonus or interim dividend wholly or partly by the distribution of specific assets and in particular of paid up shares, debentures or debenture stocks of any other company or in any one or more of such ways, and the Directors shall give effect to such resolution, and where any difficulty arises in regard to such distribution, the Directors may settle the same as they think expedient, and in particular may issue fractional certificates and fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any members upon the footing of the value so fixed, in order to adjust the rights of all the parties, and may vest any such specific assets in trustees as may seem expedient to the Directors.
|
101.
|
Any dividend or other moneys payable in respect of any share may be paid by cheque or warrant sent by post, at the risk of the person or persons entitled thereto, to the registered address of the Holder or, where there are joint Holders, to the registered address of that one of the joint Holders who is first named on the members Register or to such person and to such address as the Holder or joint Holders may in writing direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent and payment of the cheque or warrant shall be a good discharge to the Company. Any joint Holder or other person jointly entitled to a share as aforesaid may give receipts for any dividend or other moneys payable in respect of the share. Any such dividend or other distribution may also be paid by any other method (including payment in a currency other than US$, electronic funds transfer, direct debit, bank transfer or by means of a relevant system) which the Directors consider appropriate and any member who elects for such method of payment shall be deemed
|
102.
|
No dividend shall bear interest against the Company.
|
103.
|
If the Directors so resolve, any dividend which has remained unclaimed for twelve years from the date of its declaration shall be forfeited and cease to remain owing by the Company. The payment by the Directors of any unclaimed dividend or other moneys payable in respect of a share into a separate account shall not constitute the Company a trustee in respect thereof.
|
104.
|
(a)
The Directors shall cause to be kept proper books of account, whether in the form of documents, electronic form or otherwise, that:
|
(i)
|
correctly record and explain the transactions of the Company;
|
(ii)
|
will at any time enable the financial position of the Company to be determined with reasonable accuracy;
|
(iii)
|
will enable the Directors to ensure that any balance sheet, profit and loss account or income and expenditure account of the Company complies with the requirements of the Acts; and
|
(iv)
|
will enable the accounts of the Company to be readily and properly audited.
|
(b)
|
The books of account shall be kept at the Office or, subject to the provisions of the Acts, at such other place as the Directors think fit and shall be open at all reasonable times to the inspection of the Directors.
|
(c)
|
In accordance with the provisions of the Acts, the Directors shall cause to be prepared and to be laid before the annual general meeting of the Company from time to time such profit and loss accounts, balance sheets, group accounts and reports as are required by the Acts to be prepared and laid before such meeting.
|
(d)
|
A copy of every balance sheet (including every document required by law to be annexed thereto) which is to be laid before the annual general meeting of the Company together with a copy of the Directors' report and Auditors' report shall be sent (within the meaning of Article 109(b)) by post, electronic mail or any other means of communication (electronic or otherwise), not less than twenty-one Clear Days before the date of the annual general meeting, to every person entitled under the provisions of the Acts to receive them: provided that in the case of those documents sent by electronic mail or any other means of electronic communication, such documents shall be sent with the consent of the recipient, to the address of the recipient notified to the Company by the recipient for such purposes.
|
105.
|
The Directors shall determine from time to time whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of members, not being Directors, and no member (not being a Director) shall have any right of inspecting any account or book or document of the Company except as conferred by the Acts or authorised by the Directors or by the Company in general meeting. No member shall be entitled to require discovery of or any information respecting any detail of the Company's trading, or any matter which is or may be in the nature of a trade secret, mystery of trade, or secret process which may relate to the conduct of the business of
|
106.
|
Without prejudice to any powers conferred on the Directors as aforesaid, and subject to the Directors' authority to issue and allot shares under articles 8(c) and 8(d), the Directors may resolve to capitalise any
part of the amount for the time being standing to the credit of any of the Company's reserve accounts or to the credit of the profit and loss account which is not available for distribution by applying such sum in paying up in full unissued shares to be allotted as fully paid bonus shares to those members of the Company who would have been entitled to that sum if it were distributable and had been distributed by way of dividend (and in the same proportions) and the Directors shall give effect to such resolution. Whenever such a resolution is passed in pursuance of this article, the Directors shall make all appropriations and applications of the undivided profits resolved to be capitalised thereby and all allotments and issues of fully paid shares or debentures, if any, and generally shall do all acts and things required to give effect thereto with full power to the Directors to make such provisions as they shall think fit for the case of shares or debentures becoming distributable in fractions (and, in particular, without prejudice to the generality of the foregoing, either to disregard such fractions or to sell the shares or debentures represented by such fractions and distribute the net proceeds of such sale to and for the benefit of the Company or to and for the benefit of the members otherwise entitled to such fractions in due proportions) and to authorise any person to enter on behalf of all the members concerned into an agreement with the Company providing for the allotment to them respectively, credited as fully paid up, of any further shares or debentures to which they may become entitled on such capitalisation or, as the case may require, for the payment up by the application thereto of their respective proportions of the profits resolved to be capitalised of the amounts remaining unpaid on their existing shares and any agreement made under such authority shall be binding on all such members.
|
107.
|
Auditors shall be appointed and their duties regulated in accordance with the Acts, in particular with Sections 187 to 193 of the 1990 Act or any statutory amendment thereof.
|
108.
|
Any notice to be given, served, sent or delivered pursuant to these articles shall be in writing (whether in electronic form or otherwise).
|
109.
|
(a)
A notice or document to be given, served, sent or delivered in pursuance of these articles may be given to, served on or delivered to any member by the Company:
|
(i)
|
by handing same to him or his authorised agent;
|
(ii)
|
by leaving the same at his registered address;
|
(iii)
|
by sending the same by the post in a pre-paid cover addressed to him at his registered address; or
|
(iv)
|
by sending, with the consent of the member to the extent required by law, the same by means of electronic mail or other means of electronic communication approved by the Directors, with the consent of the member, to the address of the member notified to the Company by the member for such purpose (or if not so notified, then to the address of the member last known to the Company).
|
(b)
|
For the purposes of these articles and the Act, a document shall be deemed to have been sent to a member if a notice is given, served, sent or delivered to the member and the notice specifies the website or hotlink or other electronic link at or through which the member may obtain a copy of the relevant document.
|
(c)
|
Where a notice or document is given, served or delivered pursuant to article 109(a)(i) or 109(a)(ii), the giving, service or delivery thereof shall be deemed to have been effected at the time the same was handed to the member or his authorised agent, or left at his registered address (as the case may be).
|
(d)
|
Where a notice or document is given, served or delivered pursuant to article 109(a)(iii), the giving, service or delivery thereof shall be deemed to have been effected at the expiration of twenty-four hours after the cover containing it was posted. In proving service or delivery it shall be sufficient to prove that such cover was properly addressed, stamped and posted.
|
(e)
|
Where a notice or document is given, served or delivered pursuant to article 109(a)(iv), the giving, service or delivery thereof shall be deemed to have been effected at the expiration of 48 hours after despatch.
|
(f)
|
Every legal personal representative, committee, receiver, curator bonis or other legal curator, assignee in bankruptcy, examiner or liquidator of a member shall be bound by a notice given as aforesaid if sent to the last registered address of such member, or, in the event of notice given or delivered pursuant to article 109(a)(iv), if sent to the address notified by the Company by the member for such purpose notwithstanding that the Company may have notice of the death, lunacy, bankruptcy, liquidation or disability of such member.
|
(g)
|
Notwithstanding anything contained in this article the Company shall not be obliged to take account of or make any investigations as to the existence of any suspension or curtailment of postal services within or in relation to all or any part of any jurisdiction or other area other than Ireland.
|
(h)
|
Any requirement in these articles for the consent of a member in regard to the receipt by such member of electronic mail or other means of electronic communications approved by the Directors, including the receipt of the Company's audited accounts and the Directors' and auditor's reports thereon, shall be deemed to have been satisfied where the Company has written to the member informing him/her of its intention to use electronic communications for such purposes and the member has not, within four weeks of the issue of such notice, served an objection in writing on the Company to such proposal. Where a member has given, or is deemed to have given, his/her consent to the receipt by such member of electronic mail or other means of electronic communications approved by the Directors, he/she may revoke such consent at any time by requesting the Company to communicate with him/her in documented form PROVIDED HOWEVER that such revocation shall not take effect until five days after written notice of the revocation is received by the Company.
|
(i)
|
Without prejudice to the provisions of articles 109(a)(i) and 109(a)(ii), if at any time by reason of the suspension or curtailment of postal services in any territory, the Company is unable effectively to convene a general meeting by notices sent through the post, a general meeting may be convened by a public announcement and such notice shall be deemed to have been duly served on all members entitled thereto at noon on the day on which the said public announcement is made. In any such case the Company shall put a full copy of the notice of the general meeting on its website. For purposes of this article 109(i), “public announcement” shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Company with the U.S. Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder.
|
110.
|
A notice may be given by the Company to the joint Holders of a share by giving the notice to the joint Holder whose name stands first in the Register in respect of the share and notice so given shall be sufficient notice to all the joint Holders.
|
111.
|
(a)
Every person who becomes entitled to a share shall before his name is entered in the Register in respect of the share, be bound by any notice in respect of that share which has been duly given to a person from whom he derives his title.
|
(b)
|
A notice may be given by the Company to the persons entitled to a share in consequence of the death or bankruptcy of a member by sending or delivering it, in any manner authorised by these articles for the giving of notice to a member, addressed to them at the address, if any, supplied by them for that purpose. Until such an address has been supplied, a notice may be given in any manner in which it might have been given if the death or bankruptcy had not occurred.
|
112.
|
The signature (whether electronic signature, an advanced electronic signature or otherwise) to any notice to be given by the Company may be written (in electronic form or otherwise) or printed.
|
113.
|
A member present, either in person or by proxy, at any meeting of the Company or the Holders of any class of shares in the Company shall be deemed to have received notice of the meeting and, where requisite, of the purposes for which it was called.
|
114.
|
If the Company shall be wound up and the assets available for distribution among the members as such shall be insufficient to repay the whole of the paid up or credited as paid up share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the members in proportion to the capital paid up or credited as paid up at the commencement of the winding up on the shares held by them respectively. If in a winding up the assets available for distribution among the members shall be more than sufficient to repay the whole of the share capital paid up or credited as paid up at the commencement of the winding up, the excess shall be distributed among the members in proportion to the capital at the commencement of the winding up paid up or credited as paid up on the said shares held by them respectively. Notwithstanding the foregoing, this article shall not affect the rights of the Holders of shares issued upon special terms and conditions.
|
115.
|
(a)
In case of a sale by the liquidator under Section 260 of the Act, the liquidator may by the contract of sale agree so as to bind all the members for the allotment to the members directly of the proceeds of sale in proportion to their respective interests in the Company and may further by the contract limit a time at the expiration of which obligations or shares not accepted or required to be sold shall be deemed to have been irrevocably refused and be at the disposal of the Company, but so that nothing herein contained shall be taken to diminish, prejudice or affect the rights of dissenting members conferred by the said Section.
|
(b)
|
The power of sale of the liquidator shall include a power to sell wholly or partially for debentures, debenture stock, or other obligations of another company, either then already constituted or about to be constituted for the purpose of carrying out the sale.
|
116.
|
If the Company is wound up, the liquidator, with the sanction of a Special Resolution and any other sanction required by the Acts, may divide among the members in specie or kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not), and, for such purpose, may value any assets and determine how the division shall be carried out as between the members or different classes of members. The liquidator, with the like sanction, may vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributories as, with the like sanction, he determines, but so that no member shall be compelled to accept any assets upon which there is a liability.
|
117.
|
(a)
Subject to the provisions of and so far as may be admitted by the Acts, every Director and the Secretary of the Company shall be entitled to be indemnified by the Company against all costs, charges, losses, expenses and liabilities incurred by him in the execution and discharge of his duties or in relation thereto including any liability incurred by him in defending any proceedings, civil or criminal, which relate to anything done or omitted or alleged to have been done or omitted by him as an officer or employee of the Company and in which judgement is given in his favour (or the proceedings are otherwise disposed of without any finding or admission of any material breach of duty on his part) or in which he is acquitted or in connection with any application under any statute for relief from liability in respect of any such act or omission in which relief is granted to him by the Court.
|
(b)
|
The Company shall indemnify any person who was, is or is threatened to be made a party to a Proceeding (as hereinafter defined) by reason of the fact that he or she (a) is or was an “officer” of the Company as such term is defined in the rules of the U.S. Securities and Exchange Commission promulgated under the U.S. Securities Exchange Act of 1934, as amended (excluding any Director or Secretary) or (b) is or was serving at the request of the Company as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, general or
|
(c)
|
The Directors shall have power to purchase and maintain for any Director, the Secretary or other employees of the Company or any director, officer, employee or agent of any of its subsidiaries insurance against any liability referred to in Section 200 of the Act or otherwise.
|
(d)
|
The Company may additionally indemnify any employee or agent of the Company or any director, officer, employee or agent of any
of its subsidiaries to the fullest extent permitted by law.
|
(e)
|
The rights conferred on any person indemnified by this article shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of the Memorandum of Association of the Company, these articles, agreement, vote of the members or disinterested Directors or otherwise.
|
(f)
|
The Company's obligation, if any, to indemnify or to advance expenses to any person indemnified who was or is serving at its request as a Director or officer or otherwise of another person described in article 117(a) or 117(b) shall be reduced by any amount such person may collect as indemnification or advancement of expenses from such other person.
|
(g)
|
This article shall not limit the right of the Company, to the extent and in the manner permitted by law, to indemnify and to advance expenses to persons other than persons authorised for indemnification under this article when and as authorised by appropriate corporate action.
|
(h)
|
The indemnity provided by this article shall not extend to any matter in respect of any fraud or dishonesty which may attach to any of said persons.
|
(i)
|
“
Proceeding
,”
for purposes of this article, means any threatened, pending or completed action, suit, claim or proceeding, whether civil, criminal, administrative, arbitrative or investigative, any appeal in such an action, suit, claim or proceeding, and any inquiry or investigation that could lead to such an action, suit, claim or proceeding.
|
118.
|
(a)
The Company shall be entitled to sell at the best price reasonably obtainable any share or stock of a member or any share or stock to which a person is entitled by transmission if and provided that:
|
(i)
|
for a period of twelve years (not less than three dividends having been declared and paid) no cheque or warrant sent by the Company through the post in a prepaid letter addressed to the member or to the person entitled by transmission to the share or stock at his address on the Register or other the last known address given by the member or the person entitled by transmission to which cheques and warrants are to be sent has been cashed and no communication has been received by the Company from the member or the person entitled by transmission;
|
(ii)
|
at the expiration of the said period of twelve years the Company has given notice by advertisement in a leading Dublin newspaper and a newspaper circulating in the area in which the address referred to in this article 118(a) is located of its intention to sell such share or stock; and
|
(iii)
|
the Company has not during the further period of three months after the date of the advertisement and prior to the exercise of the power of sale received any communication from the member or person entitled by transmission.
|
(b)
|
To give effect to any such sale the Company may appoint any person to execute as transferor an instrument of transfer of such share or stock and such instrument of transfer shall be as effective as if it had been executed by the registered Holder of or person entitled by transmission to such share or stock. The Company shall account to the member or other person entitled to such share or stock for the net proceeds of such sale by carrying all monies in respect thereof to a separate account which shall be a permanent debt of the Company and the Company shall be deemed to be a debtor and not a trustee in respect thereof for such member or other person. Monies carried to such separate account may either be employed in the business of the Company or invested in such investments (other than shares of the Company or its holding company if any) as the Directors may from time to time think fit.
|
(c)
|
To the extent necessary in order to comply with any laws or regulations to which the Company is subject in relation to escheatment, abandonment of property or other similar or analogous laws or regulations (“
Applicable Escheatment Laws
”), the Company may deal with any share of any member and any unclaimed cash payments relating to such share in any manner which it sees fit, including (but not limited to) transferring or selling such share and transferring to third parties any unclaimed cash payments relating to such share.
|
(d)
|
The Company may only exercise the powers granted to it in article 118(a) above in circumstances where it has complied with, or procured compliance with, the required procedures (as set out in the Applicable Escheatment Laws) with respect to attempting to identify and locate the relevant member of the Company.
|
(e)
|
Any stock transfer form to be executed by the Company in order to sell or transfer a share pursuant to article 118(a) may be executed in accordance with article 13(a).
|
119.
|
The Company may destroy:
|
(a)
|
any dividend mandate or any variation or cancellation thereof or any notification of change of name or address, at any time after the expiry of two years from the date such mandate variation, cancellation or notification was recorded by the Company;
|
(b)
|
any instrument of transfer of shares which has been registered, at any time after the expiry of six years from the date of registration; and
|
(c)
|
any other document on the basis of which any entry in the Register was made, at any time after the expiry of six years from the date an entry in the Register was first made in respect of it
|
(i)
|
the foregoing provisions of this article shall apply only to the destruction of a document in good faith and without express notice to the Company that the preservation of such document was relevant to a claim;
|
(ii)
|
nothing contained in this article shall be construed as imposing upon the Company any liability in respect of the destruction of any such document earlier than as aforesaid or in any case where the conditions of article 119(a) above are not fulfilled; and
|
(iii)
|
references in this article to the destruction of any document include references to its disposal in any manner.
|
120.
|
Without limiting the generality of the foregoing, the sale, lease or exchange of all or substantially all of the assets of the Company shall, except as otherwise expressly provided in these articles, require the approval of members by way of an affirmative vote of a majority of the votes cast by the members in person or by proxy appointed by instrument in writing subscribed by such member or by his or her duly authorised attorney and delivered to the chairman of the meeting.
|
121.
|
(a)
The Company may not engage, at any time, in any Business Combination with any Interested Member unless the Business Combination receives the affirmative vote of the holders of two thirds of the shares then in issue of all classes of shares of the Company entitled to vote, considered for the purposes of this provision as one class.
|
(b)
|
Interested Member status of a member is determined as of the date of any action taken by the Board with respect to such transaction or as of any record date for the determination of members entitled to notice and to vote with respect thereto or immediately prior to the consummation of such transaction. Any determination made in good faith by the Board, on the basis of information at the time available to it, as to whether any person is an Interested Member, shall be conclusive and binding for all purposes of these articles.
|
(c)
|
The provisions of article 121(a) shall not apply to (i) any Business Combination with an Interested Member that has been approved by the Board or (ii) any agreement for the amalgamation, merger or consolidation of any subsidiary of the Company with the Company or with another subsidiary of the Company if (A) the provisions of this article 121(c) shall not be changed or otherwise affected by or by virtue of the amalgamation, merger or consolidation and (B) the holders of greater than 50% of the voting power of the Company 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 amalgamated company immediately following the amalgamation, merger or consolidation.
|
(d)
|
For the purposes of this article, “
Business Combination
” means:
|
(i)
|
any amalgamation, merger or consolidation of the Company or one of its subsidiaries with an Interested Member or with any person that is, or would be after such amalgamation, merger or consolidation, an affiliate or associate of an Interested Member;
|
(ii)
|
any transfer or other disposition to or with an Interested Member or any affiliate or associate of an Interested Member of all or any material part of the assets of the Company or one of its subsidiaries; and
|
(iii)
|
any issuance or transfer of shares of the Company upon conversion of or in exchange for the securities or assets of any Interested Member, or with any person that is, or would be after such amalgamation, merger or consolidation, an affiliate or associate of an Interested Member.
|
(e)
|
For the purposes of this article, “
Interested Member
” means any member that:
|
(iv)
|
is the beneficial owner, directly or indirectly, of 10% or more of the voting power of the voting shares of the Company then in issue; or
|
(v)
|
is an affiliate or associate of the Company and at any time within the five-year period immediately prior to the date in question was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the shares then in issue of the Company. For the purpose of determining whether a member is an Interested Member, the number of voting shares of the Company then in issue shall include shares deemed to be beneficially owned by such member, but shall not include any other unissued voting shares of the Company which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.
|
Names, addresses and descriptions
of subscribers
|
Number of shares taken
by each subscriber
|
|
|
|
|
for and on behalf of Enceladus Holding Limited Arthur Cox Building
Earlsfort Terrace Dublin 2 Corporate Body |
Thirty Nine Thousand, Nine Hundred
and Ninety Four Ordinary Shares
|
for and on behalf of DIJR Nominees Limited
Arthur Cox Building Earlsfort Terrace Dublin 2 Corporate Body |
One Ordinary Share
|
for and on behalf of
Fand Limited
Arthur Cox Building
Earlsfort Terrace
Dublin 2 Corporate Body |
One Ordinary Share
|
for and on behalf of
Arthur Cox Nominees Limited
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Corporate Body
|
One Ordinary Share
|
for and on behalf of
Arthur Cox Registrars Limited
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Corporate Body
|
One Ordinary Share
|
for and on behalf of
Arthur Cox Trust Services Limited
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Corporate Body
|
One Ordinary Share
|
for and on behalf of
Arthur Cox Trustees Limited
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Corporate Body
|
One Ordinary Share
|
|
|
|
Page
|
SUMMARY
|
|
RISK FACTORS
|
|
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
|
|
THE SPIN-OFF
|
|
DIVIDENDS
|
|
CAPITALIZATION
|
|
SELECTED HISTORICAL COMBINED FINANCIAL DATA
|
|
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
|
|
BUSINESS
|
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
MANAGEMENT
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
EXECUTIVE COMPENSATION
|
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
|
DESCRIPTION OF MATERIAL INDEBTEDNESS
|
|
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
|
|
DESCRIPTION OF OUR SHARE CAPITAL
|
|
WHERE YOU CAN FIND MORE INFORMATION
|
|
INDEX TO FINANCIAL STATEMENTS
|
|
RELEVANT TERRITORIES
|
•
|
“Allegion,” “we,” “our” and “us” refer to Allegion plc and its consolidated subsidiaries, after giving effect to the internal reorganization and the distribution;
|
•
|
“Allegion plc” refers to Allegion plc on an unconsolidated basis; and
|
•
|
“Ingersoll Rand” refers to Ingersoll-Rand plc and, unless the context otherwise requires, its consolidated subsidiaries, other than, for all periods following the spin-off, Allegion.
|
•
|
the series of internal transactions described under “The Spin-Off - Manner of Effecting the Spin-Off - Internal Reorganization” that will result in the allocation and transfer or assignment of certain assets and liabilities to Allegion as the “internal reorganization”;
|
•
|
the distribution of Allegion ordinary shares to Ingersoll Rand shareholders as the “distribution”; and
|
•
|
the internal reorganization and the distribution collectively as the “spin-off.”
|
•
|
Expertise required to design custom-configured solutions for our end-users.
|
•
|
Diversified portfolio of market-leading brands.
|
•
|
Long history of delivering innovative and high-quality products and solutions.
|
•
|
Operational excellence capabilities that enable a highly variable product mix while meeting exacting customer-delivery timetables.
|
•
|
Robust network of value-added channel and distribution relationships.
|
•
|
Deep and action-oriented consumer insight.
|
•
|
Strong financial performance and cash-generation capabilities.
|
•
|
Invest in attractive developing markets.
|
•
|
Invest in emerging technology product categories.
|
•
|
Leverage our expertise to deliver differentiated products and solutions in key market segments.
|
•
|
Build upon our operational excellence program to be a world-class supplier of security products and solutions.
|
•
|
Selectively pursue acquisitions to accelerate expansion into attractive markets and products.
|
Q:
|
What is the spin-off?
|
A:
|
The spin-off is the series of transactions by which Ingersoll Rand will transfer its commercial and residential security businesses to us in return for which we will issue our ordinary shares to Ingersoll Rand shareholders pro rata to their respective holdings. For the purposes of Irish law, this will be treated as Ingersoll Rand having made a dividend in specie, or a non-cash dividend, to its shareholders. Following the spin-off, we will be an independent, publicly-traded company.
|
Q:
|
What is Allegion?
|
A:
|
Allegion is an Irish public limited company incorporated on May 9, 2013 for the purpose of holding Ingersoll Rand’s commercial and residential security businesses following the spin-off. Prior to the transfer by Ingersoll Rand to us of its commercial and residential security businesses, which will occur in connection with the spin-off, we will have no operations other than those incidental to our formation and in preparation for the spin-off.
|
Q:
|
Why is the separation of Allegion structured as a spin-off?
|
A:
|
The Board of Directors of Ingersoll Rand has approved a plan to spin off Ingersoll Rand’s commercial and residential security businesses into a new publicly-traded company. Ingersoll Rand currently believes a spin-off is the most efficient way to accomplish a separation of our businesses from Ingersoll Rand for various reasons, including: (i) a spin-off provides a high degree of assurance that decisions regarding our capital structure will support future financial stability; (ii) a spin-off offers a high degree of certainty of completion in a timely manner, lessening disruption to current business operations; and (iii) a spin-off would be a tax-free distribution of Allegion ordinary shares to Ingersoll Rand shareholders. After consideration of strategic opportunities, Ingersoll Rand believes that a tax-free spin-off will enhance the long-term value of both Ingersoll Rand and us. See “The Spin-Off - Reasons for the Spin-Off.”
|
Q
:
|
Can Ingersoll Rand decide to cancel the spin-off even if all the conditions have been met?
|
A:
|
Yes. The spin-off is subject to the satisfaction or waiver by Ingersoll Rand of certain conditions. See “The Spin-Off - Conditions to the Spin-Off.” Even if all such conditions are met, Ingersoll Rand has the right not to complete the spin-off if, at any time prior to the distribution, the Board of Directors of Ingersoll Rand determines, in its sole discretion, that the spin-off is not in the best interests of Ingersoll Rand or its shareholders, that a sale or other alternative is in the best interests of Ingersoll Rand or its shareholders, or that market conditions or other circumstances are such that it is not advisable at that time to separate the commercial and residential security businesses from Ingersoll Rand.
|
Q:
|
What will I receive in the spin-off?
|
A:
|
As a holder of Ingersoll Rand ordinary shares, you will retain your Ingersoll Rand ordinary shares and will receive one Allegion ordinary share for every three Ingersoll Rand ordinary shares you own as of the record date. The number of shares of Ingersoll Rand you own and your proportionate interest in Ingersoll Rand will not change as a result of the spin-off. See “The Spin-Off.”
|
Q:
|
When is the record date for the distribution?
|
A:
|
The record date is [ ], 2013.
|
Q:
|
When will the distribution occur?
|
A:
|
The distribution date of the spin-off is [ ], 2013. The distribution agent, acting on behalf of Ingersoll Rand, will distribute the Allegion ordinary shares to Ingersoll Rand shareholders as soon as practicable after the distribution date. The ability to trade Allegion shares will not be affected during that time.
|
Q:
|
What do I have to do to participate in the spin-off?
|
A:
|
Nothing. You are not required to take any action to receive your Allegion ordinary shares, although you are urged to read this entire document carefully. No shareholder approval of the distribution is required or sought. You are not being asked for a proxy. You will neither be required to pay anything for the new shares nor be required to surrender any Ingersoll Rand ordinary shares to participate in the spin-off.
|
Q:
|
What are Ingersoll Rand’s reasons for the spin-off?
|
A:
|
Ingersoll Rand is a multi-industry conglomerate which generates value, in part, from synergies among its various businesses. However, as industries evolve and change, the added value from synergies for some business units may become outweighed by the benefits to be gained from the focus that comes from being a stand-alone company. Such is now the case with Ingersoll Rand’s commercial and residential security businesses. Ingersoll Rand’s Board of Directors has determined that the spin-off is in the best interests of Ingersoll Rand and its shareholders because the spin-off will provide the following key benefits:
|
•
|
Strategic Focus.
Position each company to pursue a more focused strategy based on the needs of their respective businesses and the dynamics of their respective industries.
|
•
|
Board and Management Focus.
Allow the Board of Directors and management of each company to focus exclusively on the growth and expansion of their respective businesses, with greater ability to anticipate and respond faster to changing markets and new opportunities, including potential strategic acquisitions, as well as increase our management’s ability to attract and retain industry-specific skilled employees and management.
|
•
|
Access to Capital, Capital Structure and Preservation of Synergies.
Eliminate competition for capital while still allowing each company to preserve existing synergies. Both companies will have direct access to the debt and equity capital markets to fund their respective growth strategies and to establish a capital structure and dividend policy appropriate to their business needs.
|
•
|
Investor Choice.
Provide investors with a more targeted investment opportunity in each company that offers different investment and business characteristics, including different opportunities for growth, capital structure, and financial returns. This will allow investors to evaluate the separate and distinct merits, performance and future prospects of each company.
|
Q:
|
If I sell, on or before the distribution date, Ingersoll Rand ordinary shares
that I held on the record date, am I still entitled to receive Allegion ordinary shares
distributable with respect to the Ingersoll Rand ordinary shares I sold?
|
A:
|
Beginning on or shortly before the record date and continuing through the distribution date for the spin-off, Ingersoll Rand’s ordinary shares will begin to trade in two markets on the New York Stock Exchange (“NYSE”): a “regular-way” market and an “ex-distribution” market. If you hold Ingersoll Rand ordinary shares as of the record date for the distribution and choose to sell those shares in the “regular-way” market after the record date for the distribution and on or before the distribution date, you also will be selling the right to receive the Allegion ordinary shares in connection with the spin-off. However, if you hold Ingersoll Rand ordinary shares as of the record date for the distribution and choose to sell those shares in the “ex-distribution” market after the record date for the distribution and on or before the distribution date, you will still receive the Allegion ordinary shares in the spin-off.
|
Q:
|
Will the spin-off affect the trading price of my Ingersoll Rand ordinary shares?
|
A
:
|
Yes, the trading price of Ingersoll Rand ordinary shares immediately following the distribution is expected to be lower than immediately prior to the distribution because its trading price will no longer reflect the value of the our businesses. However, we cannot provide you with any guarantees as to the price at which the Ingersoll Rand shares will trade following the spin-off.
|
Q:
|
What indebtedness will Allegion have following the spin-off?
|
A:
|
We expect that, prior to the completion of the spin-off, we will incur indebtedness in an amount estimated to be $[ ], net proceeds of which will be distributed to Ingersoll Rand. See “Description of Material Indebtedness.”
|
Q:
|
What are the risks associated with the spin-off?
|
A:
|
There are a number of risks associated with the spin-off and ownership of Allegion ordinary shares. These risks are discussed under “Risk Factors.”
|
Q:
|
Where can I get more information?
|
A.
|
If you have any questions relating to the mechanics of the distribution, you should contact the distribution agent at:
|
Distributed Company . . . . . . . . . . . . . . .
|
Allegion plc, an Irish public limited company formed to hold the commercial and residential security businesses of Ingersoll Rand. After the spin-off, Allegion will be an independent, publicly-traded company.
|
Distributed Securities. . . . . . . . . . . . . . .
|
All of the ordinary shares of Allegion issued and outstanding at the time of the distribution.
|
Record Date. . . . . . . . . . . . . . . . . . . . . .
|
The record date for the distribution is [ ], 2013.
|
Distribution Date. . . . . . . . . . . . . . . . . .
|
The distribution date is [ ], 2013.
|
Internal Reorganization. . . . . . . . . . . . .
|
A
s part of the spin-off, Ingersoll Rand will undergo an internal reorganization that will, among other things and subject to limited exceptions, result in the allocation and transfer or assignment to us of the assets and liabilities in respect of the activities of the commercial and residential security businesses and certain other current and former businesses and activities of Ingersoll Rand.
|
•
|
we will own and operate the commercial and residential security businesses currently owned and operated by Ingersoll Rand; and
|
•
|
Ingersoll Rand will continue to own and operate its Climate Solutions, Residential Solutions (excluding the residential security business) and Industrial Technologies businesses.
|
Distribution Ratio. . . . . . . . . . . . . . . . .
|
Each holder of Ingersoll Rand ordinary shares will receive one Allegion ordinary share for every three ordinary shares of Ingersoll Rand held on [ ], 2013.
|
The Distribution. . . . . . . . . . . . . . . . . . .
|
On the distribution date, the distribution agent will distribute to Ingersoll Rand shareholders all of Allegion’s ordinary shares. The distribution of shares will be made by direct registration or in book-entry form, which means that no physical share certificates will be issued. The distribution agent will issue shares of Allegion as soon as practicable to registered holders of Ingersoll Rand by way of direct registration or to beneficial holders’ banks or brokerage firms electronically in book-entry form. Trading of our shares will not be affected during that time. Following the spin-off, shareholders whose shares are held by direct registration may request that their shares of Allegion be transferred to a brokerage or other account at any time. You will not be required to make any payment on, surrender or exchange your Ingersoll Rand shares or take any other action to receive your Allegion shares.
|
Fractional Shares. . . . . . . . . . . . . . . . . .
|
The distribution agent will not distribute any fractional shares of Allegion to Ingersoll Rand shareholders. Fractional shares of Allegion to which Ingersoll Rand shareholders would otherwise be entitled will be aggregated and sold in the public market by the distribution agent. The aggregate net cash proceeds of the sales will be distributed ratably to those shareholders who would otherwise have received fractional shares of Allegion. Receipt of the proceeds from these sales will generally result in a taxable gain or loss to those shareholders. Each shareholder entitled to receive cash proceeds from these shares should consult his, her or its own tax adviser as to such shareholder’s particular circumstances. The tax consequences of the distribution are described in more detail under “The Spin-Off - U.S. Federal Income Tax Consequences of the Spin-Off” and “The Spin-Off - Irish Income Tax Consequences of the Spin-Off.”
|
Tax Consequences. . . . . . . . . . . . . . . . .
|
Unless waived by Ingersoll Rand, the spin-off is conditioned on the receipt by Ingersoll Rand of a ruling from the U.S. Internal Revenue Service (the “IRS”) substantially to the effect that, among other things, the distribution of our ordinary shares, together with certain related transactions, will qualify under Sections 355 and 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), with the result that Ingersoll Rand and Ingersoll Rand’s shareholders will not recognize any taxable
|
Trading Market and Symbol. . . . . . . . . .
|
We intend to file an application to list Allegion ordinary shares on the NYSE under the ticker symbol “ALLE.” We anticipate that, at least two trading days prior to the record date, trading of Allegion ordinary shares will begin on a “when-issued” basis and will continue up to and including the distribution date, and we expect “regular-way” trading of Allegion ordinary shares will begin the first trading day after the distribution date. We also anticipate that, at least two trading days prior to the record date, there will be two markets in Ingersoll Rand ordinary shares: a “regular-way” market on which Ingersoll Rand shares will trade with an entitlement for the purchaser to receive Allegion ordinary shares to be distributed pursuant to the distribution, and an “ex-distribution” market on which Ingersoll Rand shares will trade without an entitlement for the purchaser to receive Allegion ordinary shares. For more information, see “The Spin-Off - Trading Market.”
|
Conditions to the Spin-Off. . . . . . . . . . .
|
Completion of the spin-off is subject to the satisfaction or waiver by Ingersoll Rand of the following conditions:
|
•
|
our Registration Statement on Form 10, of which this Information Statement forms a part, shall have been declared effective by the Securities and Exchange Commission (the “SEC”), no stop order suspending the effectiveness thereof shall be in effect, no proceedings for such purpose shall be pending before or threatened by the SEC, and this Information Statement, or a Notice of Internet Availability of Information Statement Materials, shall have been mailed to the Ingersoll Rand shareholders;
|
•
|
Allegion ordinary shares shall have been approved for listing on the NYSE, subject to official notice of distribution;
|
•
|
Ingersoll Rand shall have obtained the IRS Ruling, in form and substance satisfactory to Ingersoll Rand, and such ruling shall remain in effect as of the distribution date, to the effect, among other things, that the distribution, together with certain related transactions, will qualify as tax-free under Sections 355 and 368(a) of the Code;
|
•
|
Ingersoll Rand shall also have obtained opinions from its tax adviser, Simpson Thacher & Bartlett LLP, in form and substance satisfactory to Ingersoll Rand, as to
|
•
|
prior to the distribution date, Ingersoll Rand’s Board of Directors shall have obtained opinions from a nationally recognized valuation firm, in form and substance satisfactory to Ingersoll Rand, with respect to the capital adequacy and solvency of Ingersoll Rand and us;
|
•
|
all regulatory approvals and other consents necessary to consummate the distribution shall have been received;
|
•
|
no order, injunction or decree issued by any governmental entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of all or any portion of the distribution shall be pending, threatened, issued or in effect, and no other event outside the control of Ingersoll Rand shall have occurred or failed to occur that prevents the consummation of all or any portion of the distribution;
|
•
|
no other events or developments shall have occurred or failed to occur that, in the judgment of the Board of Directors of Ingersoll Rand, would result in the distribution having a material adverse effect on Ingersoll Rand or its shareholders;
|
•
|
the financing transactions described in “Description of Material Indebtedness” and elsewhere in this Information Statement as having occurred prior to the distribution shall have been consummated on or prior to the distribution;
|
•
|
the internal reorganization shall have been completed, except for such steps as Ingersoll Rand in its sole discretion shall have determined may be completed after the distribution date or, alternatively, such steps as cannot be completed until after the distribution date for local regulatory reasons;
|
•
|
Ingersoll Rand shall have taken all necessary action, in the judgment of the Board of Directors of Ingersoll Rand, to cause our Board of Directors to consist of the individuals identified in this Information Statement as our directors;
|
•
|
all necessary actions shall have been taken to adopt the form of Amended and Restated Memorandum and Articles of Association we file with the SEC as exhibits to the Registration Statement on Form 10, of which this Information Statement forms a part;
|
•
|
the Board of Directors of Ingersoll Rand shall have approved the spin-off, which approval may be given or withheld at its absolute and sole discretion; and
|
•
|
each of the Separation and Distribution Agreement, the Tax Matters Agreement, the Employee Matters Agreement, the Transition Services Agreement, the Intellectual Property License Agreement and the other ancillary agreements shall have been executed by each party.
|
after the Spin-Off. . . . . . . . . . . . . . . . . .
|
We will enter into a Separation and Distribution Agreement and other agreements with Ingersoll Rand related to the spin-off. These agreements will govern the relationship between us and Ingersoll Rand after completion of the spin-off and provide for the allocation between us and Ingersoll Rand of various assets, liabilities, rights and obligations (including employee benefits, insurance and tax-related assets and liabilities). We intend to enter into a Transition Services Agreement with Ingersoll Rand pursuant to which certain services will be provided on an interim basis following the distribution. We also intend to enter into an Employee Matters Agreement that will set forth the agreements between us and Ingersoll Rand concerning certain employee compensation and benefit matters. We also intend to enter into an Intellectual Property License Agreement under which Ingersoll Rand will license to us the right to use certain intellectual property. Further, we intend to enter into a Tax Matters Agreement with Ingersoll Rand regarding the sharing of taxes incurred before and after completion of the spin-off, certain indemnification rights with respect to tax matters and certain restrictions to preserve the tax-free status of the spin-off. In addition, we intend to enter into one or more real estate agreements that will provide for the use of shared office space and other real estate on a temporary basis. We describe these arrangements in greater detail under “Certain Relationships and Related Party Transactions - Agreements with Ingersoll Rand Related to the Spin-Off,” and describe some of the risks of these arrangements under “Risk Factors - Risks Relating to the Spin-Off.”
|
Dividend Policy. . . . . . . . . . . . . . . . . . .
|
Following the distribution, we expect to pay regular dividends. The recommendation, declaration, amount and payment of any dividend in the future by us will be subject to the sole discretion of our Board of Directors and will depend upon many factors. See “Dividends.”
|
Transfer Agent. . . . . . . . . . . . . . . . . . . .
|
Computershare Trust Company, N.A. (“Computershare”).
|
Risk Factors. . . . . . . . . . . . . . . . . . . . . .
|
We face both general and specific risks and uncertainties relating to our business, our relationship with Ingersoll Rand and our being an independent, publicly-traded company. We are also subject to risks relating to the spin-off. You should carefully read the risk factors set forth in the section entitled “Risk Factors” in this Information Statement.
|
•
|
changes in laws and regulations or imposition of currency restrictions and other restraints in various jurisdictions;
|
•
|
limitation of ownership rights, including expropriation of assets by a local government, and limitation on the ability to repatriate earnings;
|
•
|
sovereign debt crisis and currency instability in developed and developing countries;
|
•
|
imposition of burdensome tariffs and quotas;
|
•
|
difficulty in staffing and managing global operations;
|
•
|
difficulty of enforcing agreements, collecting receivables and protecting assets through non-U.S. legal systems;
|
•
|
national and international conflict, including war, civil disturbances and terrorist acts; and
|
•
|
economic downturns and social and political instability.
|
•
|
diversion of management time and attention from daily operations;
|
•
|
difficulties integrating acquired businesses, technologies and personnel into our business;
|
•
|
difficulties in obtaining and verifying the financial statements and other business information of acquired businesses;
|
•
|
inability to obtain required regulatory approvals and/or required financing on favorable terms;
|
•
|
potential loss of key employees, key contractual relationships or key customers of acquired companies or of us;
|
•
|
assumption of the liabilities and exposure to unforeseen liabilities of acquired companies; and
|
•
|
dilution of interests of holders of shares of our ordinary shares through the issuance of equity securities or equity-linked securities.
|
•
|
limited in how we conduct our business;
|
•
|
limited in our ability to pay dividends or make other distributions to our shareholders;
|
•
|
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.
|
•
|
Prior to our spin-off, our business was operated by Ingersoll Rand as part of its broader corporate organization, rather than as an independent, publicly-traded company. In addition, prior to our spin-off, Ingersoll Rand, or one of its affiliates, performed significant corporate functions for us, including tax and treasury administration and certain governance functions, including internal audit and external reporting. Our historical and pro forma financial statements reflect allocations of corporate expenses from Ingersoll Rand for these and similar functions and may not reflect the costs we will incur for similar services in the future as an independent company. Furthermore, following the spin-off, we will also be responsible for the additional costs associated with being an independent, publicly-traded company, including costs related to corporate governance and external reporting.
|
•
|
Our working capital requirements and capital for our general corporate purposes, including acquisitions and capital expenditures, historically have been satisfied as part of the company-wide cash management practices of Ingersoll Rand. While our businesses have historically generated sufficient cash to finance our working capital and other cash requirements, following the spin-off, we will no longer have access to Ingersoll Rand’s cash pool. Without the opportunity to obtain financing from Ingersoll Rand, we may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities or other arrangements.
|
•
|
Other significant changes may occur in our cost structure, management, financing and business operations as a result of our operating as a company separate from Ingersoll Rand.
|
•
|
approving or allowing any transaction that results in a change in ownership of more than 50% of our ordinary shares when combined with any other changes in ownership of our shares,
|
•
|
redeeming or repurchasing equity securities,
|
•
|
selling or otherwise disposing of substantially all of our assets, or
|
•
|
engaging in certain internal transactions.
|
•
|
our business profile and market capitalization may not fit the investment objectives of some Ingersoll Rand shareholders and, as a result, these Ingersoll Rand shareholders may sell our shares after the distribution;
|
•
|
actual or anticipated fluctuations in our operating results due to factors related to our business;
|
•
|
success or failure of our business strategy;
|
•
|
our quarterly or annual earnings, or those of other companies in our industry;
|
•
|
our ability to obtain third-party financing as needed;
|
•
|
announcements by us or our competitors of significant acquisitions or dispositions;
|
•
|
changes in accounting standards, policies, guidance, interpretations or principles;
|
•
|
the failure of securities analysts to cover our ordinary shares after the spin-off;
|
•
|
changes in earnings estimates by securities analysts or our ability to meet those estimates;
|
•
|
the operating and share price performance of other comparable companies;
|
•
|
investor perception of our company;
|
•
|
natural or other disasters that investors believe may affect us;
|
•
|
overall market fluctuations;
|
•
|
results from any material litigation or government investigations;
|
•
|
changes in laws and regulations affecting our business; and
|
•
|
general economic conditions and other external factors.
|
•
|
a provision of our Articles of Association which generally prohibits us from engaging in a business combination with an interested shareholder (being (i) the beneficial owner of the relevant percentage of our voting shares or (ii) an affiliate or associate of us that has at any time within the previous five years been the beneficial owner of the relevant percentage of our voting shares), subject to certain exceptions;
|
•
|
rules regarding how shareholders may present proposals or nominate directors for election at shareholder meetings;
|
•
|
the right of our Board of Directors to issue preferred shares without shareholder approval in certain circumstances, subject to applicable law; and
|
•
|
the ability of our Board of Directors to fill vacancies on our Board of Directors in certain circumstances.
|
•
|
we will be an independent, publicly-traded company (NYSE: ALLE), focused on security
products and solutions markets globally
; and
|
•
|
Ingersoll Rand will continue to be an independent, publicly-traded company (NYSE: IR) and continue to own and operate its Climate Solutions, Residential Solutions (excluding the residential security business) and Industrial Technologies businesses.
|
•
|
Strategic Focus.
Position each company to pursue a more focused strategy based on the needs of their respective businesses and the dynamics of their respective industries.
|
•
|
Board and Management Focus
. Allow the Board of Directors and management of each company to focus exclusively on the growth and expansion of their respective businesses, with greater ability to anticipate and respond faster to changing markets and new opportunities, including potential strategic acquisitions, as well as increase our management’s ability to attract and retain industry-specific skilled employees and management.
|
•
|
Access to Capital, Capital Structure and Preservation of Synergies
. Eliminate competition for capital while still allowing each company to preserve existing synergies. Both companies will have direct access to the debt and equity capital markets to fund their respective growth strategies and to establish a capital structure and dividend policy appropriate to their business needs.
|
•
|
Investor Choice
. Provide investors with a more targeted investment opportunity in each company that offers different investment and business characteristics, including different opportunities for growth, capital structure, and financial returns. This will allow investors to evaluate the separate and distinct merits, performance and future prospects of each company.
|
•
|
Outstanding stock options and stock appreciation rights (“SARs”) that are vested and exercisable at the time of the spin-off will be treated in a manner similar to Ingersoll Rand shareholders and their awards will be deemed bifurcated into corresponding awards of the same type with respect to both Ingersoll Rand ordinary shares and Allegion ordinary shares. These bifurcated awards will be subject to the same terms and conditions after the effective time of the spin-off as the terms and conditions applicable to such awards prior to the spin-off, except:
|
▪
|
With respect to each bifurcated award covering Ingersoll Rand ordinary shares, the per-share exercise price will be adjusted so that the two bifurcated awards will retain, in the aggregate, the same intrinsic value as the corresponding award immediately prior to the distribution (subject to rounding); and
|
▪
|
With respect to each bifurcated award covering Allegion ordinary shares, the number of underlying shares will be determined based on application of the distribution ratio to the number of Ingersoll Rand ordinary shares subject to the award prior to bifurcation, and the per-share exercise price will be adjusted so that the two bifurcated awards will retain, in the aggregate, the same intrinsic value as the corresponding award immediately prior to the distribution (subject to rounding).
|
•
|
Outstanding stock options and SARs that are not vested and exercisable at the time of the spin-off will not be converted into awards of both Ingersoll Rand and Allegion ordinary shares, but instead will be converted, in their entirety, into corresponding awards of the same type with respect to Allegion ordinary shares, with adjustments to exercise prices and the number of underlying shares as appropriate to preserve the intrinsic value of such awards immediately prior to the distribution (subject to rounding);
|
•
|
Performance share units (“PSUs”) will be adjusted by dividing the PSUs by a fraction, the numerator of which is the opening trading price of the ordinary shares of Ingersoll Rand immediately following the distribution and the denominator of which is the closing price of the ordinary shares of Ingersoll Rand immediately prior to the distribution and then prorating the resulting PSUs based on the number of days elapsed during the applicable performance period through the consummation of the distribution (subject to rounding), and finally by adjusting the calculation of “earnings per share” and “total shareholder return” to appropriately reflect the spin-off ; and
|
•
|
All other stock-based awards, including any outstanding restricted stock units (“RSUs”) and notional shares will be converted into corresponding awards of the same type with respect to Allegion ordinary shares, with adjustments to the number of underlying shares as appropriate to preserve the intrinsic value of such awards immediately prior to the distribution (subject to rounding).
|
•
|
no gain or loss will be recognized by, and no amount will be included in the income of, holders of Ingersoll Rand ordinary shares upon their receipt of our ordinary shares in the distribution;
|
•
|
the basis of Ingersoll Rand ordinary shares immediately before the distribution will be allocated between the Ingersoll Rand ordinary shares and our ordinary shares received in the distribution, in proportion to their relative fair market values at the time of the distribution;
|
•
|
the holding period of our ordinary shares received by each Ingersoll Rand shareholder will include the period during which the shareholder held the Ingersoll Rand ordinary shares on which the distribution is made, provided that the Ingersoll Rand ordinary shares are held as a capital asset on the distribution date;
|
•
|
any cash received in lieu of fractional share interests in our ordinary shares will give rise to a taxable gain or loss equal to the difference between the amount of cash received and the tax basis allocable to the fractional share interests, determined as described above, and such gain will be a capital gain or loss if the Ingersoll Rand ordinary shares on which the distribution is made are held as a capital asset on the distribution date; and
|
•
|
no gain or loss will be recognized by Ingersoll Rand upon the distribution of our ordinary shares.
|
•
|
a taxable dividend to the extent of the shareholder’s pro rata share of Ingersoll Rand’s current and accumulated earnings and profits;
|
•
|
a reduction in the shareholder’s basis in Ingersoll Rand ordinary shares to the extent the amount received exceeds such shareholder’s share of earnings and profits;
|
•
|
taxable gain from the exchange of Ingersoll Rand ordinary shares to the extent the amount received exceeds both the shareholder’s share of earnings and profits and the shareholder’s basis in Ingersoll Rand ordinary shares; and
|
•
|
basis in our stock equal to its fair market value on the distribution date.
|
•
|
the distribution does not qualify as tax-free under Section 355 of the Code; and
|
•
|
there are one or more acquisitions (including issuances) of either our stock or the stock of Ingersoll Rand, representing 50% or more, measured by vote or value, of the then-outstanding stock of that corporation, and the acquisition or acquisitions are deemed to be part of a plan or series of related transactions that include the distribution. Any such acquisition of our stock or the stock of Ingersoll Rand within two years before or after the distribution (with exceptions, including public trading by less-than-5% shareholders and certain compensatory stock issuances) generally will be presumed to be part of such a plan unless that presumption is rebutted.
|
•
|
there is no change in the beneficial ownership of such shares; and
|
•
|
at the time of the transfer into DTC there is no agreement in place for the sale of the shares by the beneficial owner to a third party.
|
•
|
an individual resident for tax purposes in a “relevant territory” (including the U.S.) and is neither resident nor ordinarily resident in Ireland (for a list of “relevant territories” for DWT purposes, please see Annex A to this Information Statement);
|
•
|
a company resident for tax purposes in a “relevant territory,” provided such company is not under the control, whether directly or indirectly, of a person or persons who is or are resident in Ireland;
|
•
|
a company, wherever resident, that is controlled, directly or indirectly, by persons resident in a “relevant territory” and who is or are (as the case may be) not controlled by, directly or indirectly, persons who are not resident in a “relevant territory”;
|
•
|
a company, wherever resident, whose principal class of shares (or those of its 75% direct or indirect 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 company, wherever resident, that is wholly owned, directly or indirectly, 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 Irish Minister for Finance;
|
•
|
its broker (and the relevant information is further transmitted to us or any qualifying intermediary appointed by us) before the record date for the dividend if its shares are held through DTC, or
|
•
|
our transfer agent at least seven business days before such record date if its shares are held outside of DTC.
|
•
|
our Registration Statement on Form 10, of which this Information Statement forms a part, shall have been declared effective by the SEC, no stop order suspending the effectiveness thereof shall be in effect, no proceedings for such purpose shall be pending before or threatened by the SEC, and this Information Statement, or a Notice of Internet Availability of Information Statement Materials, shall have been mailed to the Ingersoll Rand shareholders;
|
•
|
Allegion ordinary shares shall have been approved for listing on the NYSE, subject to official notice of distribution;
|
•
|
Ingersoll Rand shall have obtained the IRS Ruling, in form and substance satisfactory to Ingersoll Rand, and such ruling shall remain in effect as of the distribution date, to the effect, among other things, that the distribution, together with certain related transactions, will qualify as tax-free under Sections 355 and 368(a) of the Code;
|
•
|
Ingersoll Rand shall have obtained opinions from its tax adviser, Simpson Thacher & Bartlett LLP, in form and substance satisfactory to Ingersoll Rand, as to the satisfaction of certain requirements necessary for the
|
•
|
prior to the distribution date, Ingersoll Rand’s Board of Directors shall have obtained opinions from a nationally recognized valuation firm, in form and substance satisfactory to Ingersoll Rand, with respect to the capital adequacy and solvency of Ingersoll Rand and us;
|
•
|
all regulatory approvals and other consents necessary to consummate the distribution shall have been received;
|
•
|
no order, injunction or decree issued by any governmental entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of all or any portion of the distribution shall be pending, threatened, issued or in effect, and no other event outside the control of Ingersoll Rand shall have occurred or failed to occur that prevents the consummation of all or any portion of the distribution;
|
•
|
no other events or developments shall have occurred or failed to occur that, in the judgment of the Board of Directors of Ingersoll Rand, would result in the distribution having a material adverse effect on Ingersoll Rand or its shareholders;
|
•
|
the financing transactions described in “Description of Material Indebtedness” and elsewhere in this Information Statement as having occurred prior to the distribution shall have been consummated on or prior to the distribution;
|
•
|
the internal reorganization shall have been completed, except for such steps as Ingersoll Rand in its sole discretion shall have determined may be completed after the distribution date or, alternatively, such steps as cannot be completed until after the distribution date for local regulatory reasons;
|
•
|
Ingersoll Rand shall have taken all necessary action, in the judgment of the Board of Directors of Ingersoll Rand, to cause our Board of Directors to consist of the individuals identified in this Information Statement as our directors;
|
•
|
all necessary actions shall have been taken to adopt the form of amended and restated Memorandum and Articles of Association we file with the SEC as exhibits to the Registration Statement on Form 10, of which this Information Statement forms a part;
|
•
|
the Board of Directors of Ingersoll Rand shall have approved the distribution, which approval may be given or withheld at its absolute and sole discretion; and
|
•
|
each of the Separation and Distribution Agreement, the Tax Matters Agreement, the Employee Matters Agreement, the Transition Services Agreement, the Intellectual Property License Agreement and the other ancillary agreements shall have been executed by each party.
|
|
|
As of June 30, 2013
|
||||||
In millions
|
|
Historical
(Unaudited)
|
|
Pro Forma, as adjusted
(Unaudited)
|
||||
Cash and cash equivalents
|
|
$
|
322.2
|
|
|
$
|
322.2
|
|
|
|
|
|
|
||||
Indebtedness:
|
|
|
|
|
||||
Short-term borrowings and current maturities of long-term debt
|
|
$
|
2.4
|
|
|
$
|
0.5
|
|
Long-term debt
|
|
2.6
|
|
|
2.6
|
|
||
Total indebtedness
|
|
$
|
5.0
|
|
|
$
|
3.1
|
|
Equity:
|
|
|
|
|
||||
Ordinary shares, $0.01 par value
|
|
—
|
|
|
1.0
|
|
||
Capital in excess of par value
|
|
—
|
|
|
1,445.0
|
|
||
Parent company investment
|
|
1,417.1
|
|
|
—
|
|
||
Accumulated other comprehensive earnings (losses)
|
|
(17.0
|
)
|
|
(55.9
|
)
|
||
Noncontrolling interest
|
|
24.7
|
|
|
24.7
|
|
||
Total equity
|
|
$
|
1,424.8
|
|
|
$
|
1,414.8
|
|
|
|
|
|
|
||||
Total capitalization
|
|
$
|
1,429.8
|
|
|
$
|
1,417.9
|
|
|
|
As of and for the Six Months Ended June 30
|
|
As of and for the Years Ended December 31
|
|
||||||||||||||||||||||||
In millions
|
|
2013
|
|
2012
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
||||||||||||||
Net revenues
|
|
$
|
1,007.6
|
|
|
$
|
998
|
|
|
$
|
2,046.6
|
|
|
$
|
2,021.2
|
|
|
$
|
1,967.7
|
|
|
$
|
2,038.8
|
|
|
$
|
2,413.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net earnings (loss) attributable to Allegion:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Continuing operations (b)
|
|
100.1
|
|
|
104.7
|
|
|
222.3
|
|
|
225.4
|
|
|
194.3
|
|
|
180.4
|
|
|
(77.0
|
)
|
(a)
|
|||||||
Discontinued operations
|
|
(0.4
|
)
|
|
(0.6
|
)
|
|
(2.7
|
)
|
|
(7.3
|
)
|
|
(2.5
|
)
|
|
(3.0
|
)
|
|
0.6
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total assets
|
|
2,025.9
|
|
|
|
|
1,983.8
|
|
|
2,036.2
|
|
|
2,052.5
|
|
|
2,016.2
|
|
|
1,979.2
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total debt, including capital leases
|
|
5.0
|
|
|
|
|
5.0
|
|
|
4.9
|
|
|
6.2
|
|
|
7.9
|
|
|
10.5
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total Parent Company equity
|
|
1,400.1
|
|
|
|
|
1,343.2
|
|
|
1,413.8
|
|
|
1,457.4
|
|
|
1,378.8
|
|
|
1,367.6
|
|
|
•
|
the incurrence of $[ ] of debt;
|
•
|
the cash distribution of approximately $[ ] to Ingersoll Rand;
|
•
|
the issuance of approximately 97.3 million of our $0.01 par value ordinary shares; and
|
•
|
assets, liabilities and related expenses assumed from Ingersoll Rand not included in our historical combined financial statements.
|
In millions
|
|
For the Six Months Ended June 30, 2013
|
|
For the Year Ended December 31, 2012
|
||||
Centrally managed service costs
|
|
$
|
41.6
|
|
|
$
|
94.8
|
|
Historical Ingersoll Rand corporate overhead allocations
|
|
20.2
|
|
|
53.5
|
|
||
Incremental corporate costs not previously allocated to businesses
|
|
15.8
|
|
|
28.4
|
|
||
Total
|
|
$
|
77.6
|
|
|
$
|
176.7
|
|
|
||||||||||||
In millions, except per share data
|
|
Allegion
|
|
Pro Forma Adjustments
|
|
Pro Forma
|
||||||
Net revenues
|
|
$
|
2,046.6
|
|
|
$
|
—
|
|
|
$
|
2,046.6
|
|
Cost of goods sold
|
|
(1,220.6
|
)
|
|
(0.5
|
)
|
(a)
|
(1,221.1
|
)
|
|||
Selling and administrative expenses
|
|
(457.4
|
)
|
|
(0.2
|
)
|
(a)
|
(457.6
|
)
|
|||
Operating income
|
|
368.6
|
|
|
(0.7
|
)
|
|
367.9
|
|
|||
Interest expense
|
|
(1.5
|
)
|
|
0.1
|
|
(a)(b)
|
(1.4
|
)
|
|||
Other, net
|
|
(3.2
|
)
|
|
—
|
|
|
(3.2
|
)
|
|||
Earnings before income taxes
|
|
363.9
|
|
|
(0.6
|
)
|
|
363.3
|
|
|||
Provision for income taxes
|
|
(135.9
|
)
|
|
0.2
|
|
(c)
|
(135.7
|
)
|
|||
Earnings from continuing operations
|
|
228.0
|
|
|
(0.4
|
)
|
|
227.6
|
|
|||
Less: Net earnings from continuing operations attributable to noncontrolling interests
|
|
(5.7
|
)
|
|
—
|
|
|
(5.7
|
)
|
|||
Earnings from continuing operations attributable to Allegion
|
|
$
|
222.3
|
|
|
$
|
(0.4
|
)
|
|
$
|
221.9
|
|
Pro forma earnings per share from continuing operations attributable to Allegion:
|
|
|
|
|
|
|
||||||
Basic (d)
|
|
|
|
|
|
$
|
2.19
|
|
||||
Diluted (e)
|
|
|
|
|
|
$
|
2.19
|
|
||||
Pro forma weighted-average shares outstanding:
|
|
|
|
|
|
|
||||||
Basic (d)
|
|
|
|
|
|
101.3
|
|
|||||
Diluted (e)
|
|
|
|
|
|
101.4
|
|
|
||||||||||||
In millions, except per share data
|
|
Allegion
|
|
Pro Forma Adjustments
|
|
Pro Forma
|
||||||
Net revenues
|
|
$
|
1,007.6
|
|
|
$
|
—
|
|
|
$
|
1,007.6
|
|
Cost of goods sold
|
|
(603.0
|
)
|
|
(0.3
|
)
|
(a)
|
(603.3
|
)
|
|||
Selling and administrative expenses
|
|
(236.5
|
)
|
|
(0.1
|
)
|
(a)
|
(236.6
|
)
|
|||
Operating income
|
|
168.1
|
|
|
(0.4
|
)
|
|
167.7
|
|
|||
Interest expense
|
|
(0.9
|
)
|
|
0.1
|
|
(a)(b)
|
(0.8
|
)
|
|||
Other, net
|
|
(6.7
|
)
|
|
—
|
|
|
(6.7
|
)
|
|||
Earnings before income taxes
|
|
160.5
|
|
|
(0.3
|
)
|
|
160.2
|
|
|||
Provision for income taxes
|
|
(56.6
|
)
|
|
0.1
|
|
(c)
|
(56.5
|
)
|
|||
Earnings from continuing operations
|
|
103.9
|
|
|
(0.2
|
)
|
|
103.7
|
|
|||
Less: Earnings from continuing operations attributable to noncontrolling interests
|
|
(3.8
|
)
|
|
—
|
|
|
(3.8
|
)
|
|||
Earnings from continuing operations attributable to Allegion
|
|
$
|
100.1
|
|
|
$
|
(0.2
|
)
|
|
$
|
99.9
|
|
Pro forma earnings per share from continuing operations attributable to Allegion:
|
|
|
|
|
|
|
||||||
Basic (d)
|
|
|
|
|
|
$
|
1.01
|
|
||||
Diluted (e)
|
|
|
|
|
|
$
|
1.00
|
|
||||
Pro forma weighted-average shares outstanding:
|
|
|
|
|
|
|
||||||
Basic (d)
|
|
|
|
|
|
99.4
|
|
|||||
Diluted (e)
|
|
|
|
|
|
99.5
|
|
In millions, except share and per share data
|
|
Allegion
|
|
Pro Forma Adjustments
|
|
Pro Forma
|
||||||
ASSETS
|
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
322.2
|
|
|
$
|
—
|
|
(f)(g)
|
$
|
322.2
|
|
Accounts receivable from third parties, net
|
|
318.0
|
|
|
—
|
|
|
318.0
|
|
|||
Costs in excess of billings on uncompleted contracts
|
|
111.8
|
|
|
—
|
|
|
111.8
|
|
|||
Inventories
|
|
158.4
|
|
|
—
|
|
|
158.4
|
|
|||
Other current assets
|
|
45.8
|
|
|
—
|
|
|
45.8
|
|
|||
Total current assets
|
|
956.2
|
|
|
—
|
|
|
956.2
|
|
|||
Property, plant and equipment, net
|
|
220.5
|
|
|
—
|
|
|
220.5
|
|
|||
Goodwill
|
|
632.8
|
|
|
—
|
|
|
632.8
|
|
|||
Intangible assets, net
|
|
144.7
|
|
|
—
|
|
|
144.7
|
|
|||
Other noncurrent assets
|
|
71.7
|
|
|
3.6
|
|
(a)(g)
|
75.3
|
|
|||
Total assets
|
|
$
|
2,025.9
|
|
|
$
|
3.6
|
|
|
$
|
2,029.5
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
|
||||||
Accounts payable
|
|
$
|
205.4
|
|
|
$
|
—
|
|
|
$
|
205.4
|
|
Accrued compensation and benefits
|
|
51.0
|
|
|
—
|
|
|
51.0
|
|
|||
Accrued expenses and other current liabilities
|
|
105.6
|
|
|
—
|
|
|
105.6
|
|
|||
Short-term borrowings and current maturities of long-term debt
|
|
2.4
|
|
|
(1.9
|
)
|
(a)(g)
|
0.5
|
|
|||
Total current liabilities
|
|
364.4
|
|
|
(1.9
|
)
|
|
362.5
|
|
|||
Long-term debt
|
|
2.6
|
|
|
—
|
|
(g)
|
2.6
|
|
|||
Postemployment and other benefit liabilities
|
|
132.4
|
|
|
15.5
|
|
(a)
|
147.9
|
|
|||
Deferred and noncurrent income taxes
|
|
86.7
|
|
|
—
|
|
(c)
|
86.7
|
|
|||
Other noncurrent liabilities
|
|
15.0
|
|
|
—
|
|
|
15.0
|
|
|||
Total liabilities
|
|
601.1
|
|
|
13.6
|
|
|
614.7
|
|
|||
Equity:
|
|
|
|
|
|
|
||||||
Allegion shareholders’ equity
|
|
|
|
|
|
|
||||||
Preferred shares $0.001 par value; 10,000,000 authorized 0 issued and outstanding on a pro forma basis
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ordinary shares $0.01 par value; 400,000,000 authorized 97,300,000 issued and outstanding on a pro forma basis
|
|
—
|
|
|
1.0
|
|
(h)
|
1.0
|
|
|||
Capital in excess of par value
|
|
—
|
|
|
1,445.0
|
|
(i)
|
1,445.0
|
|
|||
Parent company investment
|
|
1,417.1
|
|
|
(1,417.1
|
)
|
(i)
|
—
|
|
|||
Accumulated other comprehensive income (loss)
|
|
(17.0
|
)
|
|
(38.9
|
)
|
(a)
|
(55.9
|
)
|
|||
Total parent company investment / Allegion shareholders’ equity
|
|
1,400.1
|
|
|
(10.0
|
)
|
|
1,390.1
|
|
|||
Noncontrolling interest
|
|
24.7
|
|
|
—
|
|
|
24.7
|
|
|||
Total equity
|
|
1,424.8
|
|
|
(10.0
|
)
|
|
1,414.8
|
|
|||
Total liabilities and equity
|
|
$
|
2,025.9
|
|
|
$
|
3.6
|
|
|
$
|
2,029.5
|
|
(a)
|
While our historical combined financial statements reflect the allocation to us of certain assets and liabilities from Ingersoll Rand, as of the spin-off date, we anticipate assuming from, and transferring to, Ingersoll Rand certain assets, liabilities and related expenses that were excluded/included in our historical combined financial statements. We anticipate assuming from Ingersoll Rand approximately $15.5 million of net liabilities, $3.6 million of deferred tax assets and $38.9 million of accumulated other comprehensive loss related to defined benefit pension plans and transferring to Ingersoll Rand approximately $1.9 million of liabilities and $0.1 million of interest expense related to short-term borrowings, which results in a net increase in Parent company investment of $28.9 million from Ingersoll Rand. There may be additional assets, liabilities or related expenses transferred to or from us in the spin-off for which the transfer has not been finalized.
|
(b)
|
Represents interest expense and amortization of debt issuance costs related to approximately $[ ] of debt that we expect to incur as described in (g). We expect the weighted-average interest rate on the debt to be approximately [ ]%. Interest expense may be higher or lower if our actual interest rate or credit ratings change. A 1/8% change to the annual interest rate would change interest expense by approximately $[ ] on an annual basis.
|
(c)
|
Reflects the tax effects of the pro forma adjustments at the applicable statutory income tax rate. The effective tax rate of Allegion could be different (either higher or lower) depending on activities subsequent to the spin-off. The impacts of pro forma adjustments on long-term deferred tax assets and liabilities were offset against existing long-term deferred tax assets and liabilities reflected in our historical combined balance sheet based on jurisdiction.
|
(d)
|
Pro forma basic earnings per share from continuing operations and pro forma weighted-average basic shares outstanding are based on the number of Ingersoll Rand weighted-average basic shares outstanding for the year ended December 31, 2012 and for the
six
months ended
June 30, 2013
as adjusted for an expected distribution ratio of one ordinary share of Allegion for every three ordinary shares of Ingersoll Rand.
|
(e)
|
Pro forma diluted earnings per share from continuing operations and pro forma weighted-average diluted shares outstanding, after giving effect to the distribution described in (d), reflect potential dilution from the issuance of Ingersoll Rand’s equity plans awarded to Allegion employees.
|
(f)
|
Reflects a $[ ] cash distribution to Ingersoll Rand prior to the spin-off based on the assumed net proceeds of the debt described in (g). The amount of cash proceeds received from debt incurred prior to the spin-off, and thus the amount of cash distributed to Ingersoll Rand, will depend on market conditions at the time we incur the debt, which is not certain at this time.
|
(g)
|
Reflects the anticipated incurrence of $[ ] of debt, net of estimated debt issuance costs of $[ ]. We expect the debt to be comprised of a bond offering, term loans or a combination of these and other financing arrangements.
|
(h)
|
Reflects the pro forma recapitalization of our equity based on the number of Ingersoll Rand ordinary shares outstanding on June 28, 2013. As of the distribution date, Ingersoll Rand’s net investment in our business will be exchanged to reflect the distribution of our ordinary shares to Ingersoll Rand’s shareholders. Ingersoll Rand’s shareholders will receive shares based on an expected distribution ratio of one ordinary share of Allegion for every three ordinary shares of Ingersoll Rand.
|
(i)
|
Represents the elimination of net parent company investment and adjustments to capital in excess of par to reflect the following:
|
Reclassification of net parent company investment
|
|
$
|
1,417.1
|
|
Cash distribution described in (f)
|
|
—
|
|
|
Assumption of net liabilities described in (a)
|
|
28.9
|
|
|
Total net parent company investment / shareholders’ equity
|
|
1,446.0
|
|
|
Allegion ordinary shares described in (h)
|
|
(1.0
|
)
|
|
Total capital in excess of par
|
|
$
|
1,445.0
|
|
Allegion Principal Products
|
||
Door closers and controls
|
|
Door and door frames (steel)
|
Electronic security products
|
|
Electronic and biometric access-control systems
|
Exit devices
|
|
Locks, locksets and key systems
|
Time, attendance, and workforce productivity systems
|
|
Video analytics systems
|
Other accessories
|
|
|
•
|
Our extensive and versatile product portfolio, combined with our deep expertise, which enables us to deliver the right products and solutions to meet diverse security and functional specifications;
|
•
|
Our consultative approach and experience, which enables us to develop the most efficient and appropriate building security and access-control specifications to fulfill the unique needs of our end-users and their partners, including architects, contractors, home-builders and engineers; and
|
•
|
Our operational excellence capabilities, including our global manufacturing operations and agile supply chain, which facilitates our ability to deliver specific product and system configurations to end-users worldwide, quickly and efficiently.
|
Allegion Brands
(listed alphabetically for each region) |
||||||
Product Category
|
|
Americas
|
|
EMEIA
|
|
Asia Pacific
|
Locks / Locksets / Key Systems
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Door Closers and Controls / Exit Devices
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronic Products and Access Control Systems, including Time, Attendance and Workforce Productivity and Video Analytics Systems
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Doors and Door Frames
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Accessories
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue By Geographic Destination
|
|
Revenue By Product Category
|
|
|
|
•
|
Von Duprin, established in 1908, was awarded the first exit device patent in 1909;
|
•
|
Schlage, established in 1920, was awarded the first patents granted for the cylindrical lock and the push button lock;
|
•
|
LCN, established in 1926, created the door closer;
|
•
|
CISA, established in 1926, devised the first electrically controlled lock; and
|
•
|
Steelcraft Doors, established in 1927, developed the first mass-produced hollow metal door in 1942.
|
•
|
We combine product breadth and depth with aesthetics and functionality.
We offer an extensive and versatile portfolio of mechanical and electronic products to meet the needs of our end-users, including products in a broad range of styles and colors with a variety of specific functionalities. For example, we can deliver more than 70 million unique configurations of our Von Duprin exit devices for our end-users, and we generally ship any sized order within one week from receipt of the order.
|
•
|
We have deep building code expertise.
Most of the markets we serve have complex national, regional and local building codes and standard-making bodies that require end-users to adhere to specific safety requirements. Our long history provides us with a depth of experience that allows us to identify and deliver the right security solutions that meet these requirements and the end-user’s particular needs. We employ global teams of specification writers who work with end-users, architects, contractors and distribution partners to design solutions tailored to their unique needs while meeting the applicable building codes and standards.
|
•
|
We have a versatile, advanced electronic products offering.
Our portfolio of products and solutions positions us favorably as the security products industry becomes increasingly electronic. We offer wireless access and biometric access control solutions, electro-magnetic locks, electric latches, and automatic door operators, in addition to numerous other supporting components. Our electronics strategy includes designing products that employ interoperable, non-proprietary technologies, which we believe provides end-users with a level of flexibility that they prefer. For instance, Schlage’s AD-Series electronic lock employs open architecture that is compatible with and works with nearly any existing access-control software system.
|
•
|
in 2013, a Schlage Touchscreen Deadbolt lock, designed for the home that combines stylish design with high-quality functionality, including alarm and motion detection capabilities;
|
•
|
in 2013, our CISA eSigno hospitality platform that allows hotel owners to choose easily between different product types compatible with a single modular platform;
|
•
|
in 2012, our Interflex eVayo platform, an award-winning platform of access control and time and attendance reader terminals;
|
•
|
in 2012, our innovative Von Duprin concealed vertical cable platform that enables shorter installation time and simplifies maintenance;
|
•
|
in 2012, our aptiQ credential and reader platform that allows end-users around the world to use a single product family globally while also enabling the utilization of magnetic stripe, proximity and smart card credentials; and
|
•
|
in 2010, our Schlage AD/CO electronics line of products that create flexibility and modularity and extend the life of end-users’ electronic lock investments through low-cost module replacement.
|
•
|
Locks, locksets and key systems
: A broad array of tubular and mortise door locksets, security levers, and master key systems that are used to protect and control access. We also offer a range of portable security products, including bicycle, small vehicle and travel locks.
|
•
|
Door closers and exit devices
: An extensive portfolio of life-safety products generally installed on fire doors and facility entrances and exits. Door closers are devices that automatically close doors after they are opened. Exit devices are generally horizontal attachments to doors and enable rapid exit from the premises.
|
•
|
Electronic Security Products and Access Control Systems
: A broad range of electrified locks, door closers, exit devices, access control systems, biometric hand reader systems, key card and reader systems, accessories, and automatic doors.
|
•
|
Time, Attendance and Workforce Productivity Systems
: Products and services designed to help business customers manage and monitor workforce access control parameters, attendance and employee scheduling. We offer ongoing aftermarket services in addition to design and installation offerings.
|
•
|
Video Analytics
: Electronic video analytics systems and services, primarily for business and government customers in Asia Pacific. We offer ongoing aftermarket services in addition to design and installation offerings.
|
•
|
Doors and Door Frames
: A portfolio of hollow metal doors and door frames. In select geographies, we also provide installation and service maintenance services.
|
•
|
Other Accessories
: A variety of additional security and product components, including hinges, door levers, door stops and other accessories, as well as certain bathroom fittings products.
|
Production Facilities
|
||||
Americas
|
|
EMEIA
|
|
Asia Pacific
|
Blue Ash, Ohio
|
|
Durchhausen, Germany
|
|
Auckland, New Zealand
|
Caracas, Venezuela
|
|
Duzce, Turkey
|
|
Shanghai, China
|
Chino, California
|
|
Faenza, Italy
|
|
|
Ensenada, Mexico
|
|
Feuquieres, France
|
|
|
Indianapolis, Indiana
|
|
Renchen, Germany
|
|
|
Princeton, Illinois
|
|
Monsampolo, Italy
|
|
|
Security, Colorado
|
|
Sittingbourne, England
|
|
|
Tecate, Mexico
|
|
|
|
|
Tijuana, Mexico
|
|
|
|
|
In millions
|
2013
|
|
% of
revenues |
|
2012
|
|
% of
revenues |
||||
Net revenues
|
$
|
1,007.6
|
|
|
|
|
$
|
998.0
|
|
|
|
Cost of goods sold
|
(603.0
|
)
|
|
59.8%
|
|
(597.2
|
)
|
|
59.8%
|
||
Selling and administrative expenses
|
(236.5
|
)
|
|
23.5%
|
|
(228.0
|
)
|
|
22.8%
|
||
Operating income
|
168.1
|
|
|
16.7%
|
|
172.8
|
|
|
17.3%
|
||
Interest expense
|
(0.9
|
)
|
|
|
|
(0.7
|
)
|
|
|
||
Other, net
|
(6.7
|
)
|
|
|
|
(0.9
|
)
|
|
|
||
Earnings before income taxes
|
160.5
|
|
|
|
|
171.2
|
|
|
|
||
Provision for income taxes
|
(56.6
|
)
|
|
|
|
(63.5
|
)
|
|
|
||
Earnings from continuing operations
|
103.9
|
|
|
|
|
107.7
|
|
|
|
||
Discontinued operations, net of tax
|
(0.4
|
)
|
|
|
|
(0.6
|
)
|
|
|
||
Net earnings
|
103.5
|
|
|
|
|
107.1
|
|
|
|
||
Less: Net earnings attributable to noncontrolling interests
|
(3.8
|
)
|
|
|
|
(3.0
|
)
|
|
|
||
Net earnings attributable to Allegion
|
$
|
99.7
|
|
|
|
|
$
|
104.1
|
|
|
|
Pricing
|
1.4
|
%
|
Currency exchange rates
|
(0.4
|
)%
|
Total
|
1.0
|
%
|
In millions
|
|
2013
|
|
2012
|
||||
Interest income
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Exchange gain (loss)
|
|
(6.9
|
)
|
|
(0.8
|
)
|
||
Other
|
|
0.1
|
|
|
(0.2
|
)
|
||
Other, net
|
|
$
|
(6.7
|
)
|
|
$
|
(0.9
|
)
|
In millions
|
|
2012
|
|
% of Revenues
|
|
2011
|
|
% of Revenues
|
|
2010
|
|
% of Revenues
|
||||||
Net revenues
|
|
$
|
2,046.6
|
|
|
|
|
$
|
2,021.2
|
|
|
|
|
$
|
1,967.7
|
|
|
|
Cost of goods sold
|
|
(1,220.6
|
)
|
|
59.7%
|
|
(1,211.4
|
)
|
|
59.9%
|
|
(1,201.7
|
)
|
|
61.1%
|
|||
Selling and administrative expenses
|
|
(457.4
|
)
|
|
22.3%
|
|
(450.8
|
)
|
|
22.3%
|
|
(441.0
|
)
|
|
22.4%
|
|||
Operating income
|
|
368.6
|
|
|
18.0%
|
|
359.0
|
|
|
17.8%
|
|
325.0
|
|
|
16.5%
|
|||
Interest expense
|
|
(1.5
|
)
|
|
|
|
(1.4
|
)
|
|
|
|
(1.8
|
)
|
|
|
|||
Other, net
|
|
(3.2
|
)
|
|
|
|
4.6
|
|
|
|
|
3.5
|
|
|
|
|||
Earnings before income taxes
|
|
363.9
|
|
|
|
|
362.2
|
|
|
|
|
326.7
|
|
|
|
|||
Provision for income taxes
|
|
(135.9
|
)
|
|
|
|
(130.5
|
)
|
|
|
|
(125.7
|
)
|
|
|
|||
Earnings from continuing operations
|
|
228.0
|
|
|
|
|
231.7
|
|
|
|
|
201.0
|
|
|
|
|||
Discontinued operations, net of tax
|
|
(2.7
|
)
|
|
|
|
(7.3
|
)
|
|
|
|
(2.5
|
)
|
|
|
|||
Net earnings
|
|
225.3
|
|
|
|
|
224.4
|
|
|
|
|
198.5
|
|
|
|
|||
Less: Net earnings attributable to noncontrolling interests
|
|
(5.7
|
)
|
|
|
|
(6.3
|
)
|
|
|
|
(6.7
|
)
|
|
|
|||
Net earnings attributable to Allegion
|
|
$
|
219.6
|
|
|
|
|
$
|
218.1
|
|
|
|
|
$
|
191.8
|
|
|
|
Pricing
|
2.3
|
%
|
Volume/product mix
|
0.3
|
%
|
Currency exchange rates
|
(1.3
|
)%
|
Total
|
1.3
|
%
|
Pricing
|
2.3
|
%
|
Volume/product mix
|
(1.3
|
)%
|
Currency exchange rates
|
1.7
|
%
|
Total
|
2.7
|
%
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Interest income
|
|
$
|
0.1
|
|
|
$
|
0.4
|
|
|
$
|
0.5
|
|
Exchange gain (loss)
|
|
(3.3
|
)
|
|
4.1
|
|
|
3.1
|
|
|||
Other
|
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
|||
Other, net
|
|
$
|
(3.2
|
)
|
|
$
|
4.6
|
|
|
$
|
3.5
|
|
Dollar amounts in millions
|
|
2013
|
|
% change
|
|
2012
|
|||
Net revenues
|
|
749.1
|
|
|
2.5
|
%
|
|
730.8
|
|
Segment operating income
|
|
193.3
|
|
|
|
|
|
182.6
|
|
Segment operating margin
|
|
25.8
|
%
|
|
|
|
25.0
|
%
|
Dollar amounts in millions
|
|
2012
|
|
% change
|
|
2011
|
|
% change
|
|
2010
|
||||||
Net revenues
|
|
$
|
1,471.9
|
|
|
5.0%
|
|
$
|
1,402.2
|
|
|
1.7%
|
|
$
|
1,379.2
|
|
Segment operating income
|
|
377.2
|
|
|
|
|
347.8
|
|
|
|
|
322.3
|
|
|||
Segment operating margin
|
|
25.6
|
%
|
|
|
|
24.8
|
%
|
|
|
|
23.4
|
%
|
Pricing
|
2.9
|
%
|
Volume/product mix
|
2.3
|
%
|
Currency exchange rates
|
(0.2
|
)%
|
Total
|
5.0
|
%
|
Pricing
|
2.8
|
%
|
Volume/product mix
|
(1.7
|
)%
|
Currency exchange rates
|
0.6
|
%
|
Total
|
1.7
|
%
|
Dollar amounts in millions
|
|
2013
|
|
% change
|
|
2012
|
|||||
Net revenues
|
|
$
|
204.6
|
|
|
(5.5
|
)%
|
|
$
|
216.5
|
|
Segment operating income
|
|
(7.4
|
)
|
|
|
|
|
0.8
|
|
||
Segment operating margin
|
|
(3.6
|
)%
|
|
|
|
0.4
|
%
|
Dollar amounts in millions
|
|
2012
|
|
% change
|
|
2011
|
|
% change
|
|
2010
|
||||||
Net revenues
|
|
$
|
428.3
|
|
|
(10.0)%
|
|
$
|
476.0
|
|
|
1.2%
|
|
$
|
470.5
|
|
Segment operating income
|
|
8.2
|
|
|
|
|
19.4
|
|
|
|
|
17.2
|
|
|||
Segment operating margin
|
|
1.9
|
%
|
|
|
|
4.1
|
%
|
|
|
|
3.7
|
%
|
Pricing
|
1.3
|
%
|
Volume/product mix
|
(5.0
|
)%
|
Currency exchange rates
|
(6.3
|
)%
|
Total
|
(10.0
|
)%
|
Pricing
|
1.4
|
%
|
Volume/product mix
|
(4.3
|
)%
|
Currency exchange rates
|
4.1
|
%
|
Total
|
1.2
|
%
|
Dollar amounts in millions
|
|
2013
|
|
% change
|
|
2012
|
|||||
Net revenues
|
|
$
|
53.9
|
|
|
6.3
|
%
|
|
$
|
50.7
|
|
Segment operating income
|
|
(1.9
|
)
|
|
|
|
|
0.9
|
|
||
Segment operating margin
|
|
(3.5
|
)%
|
|
|
|
1.8
|
%
|
Dollar amounts in millions
|
|
2012
|
|
% change
|
|
2011
|
|
% change
|
|
2010
|
||||||
Net revenues
|
|
$
|
146.4
|
|
|
2.4%
|
|
$
|
143.0
|
|
|
21.2%
|
|
$
|
118.0
|
|
Segment operating income
|
|
11.4
|
|
|
|
|
11.9
|
|
|
|
|
11.0
|
|
|||
Segment operating margin
|
|
7.8
|
%
|
|
|
|
8.3
|
%
|
|
|
|
9.3
|
%
|
Pricing
|
0.8
|
%
|
Volume/product mix
|
(0.2
|
)%
|
Currency exchange rates
|
1.8
|
%
|
Total
|
2.4
|
%
|
Pricing
|
1.1
|
%
|
Volume/product mix
|
14.0
|
%
|
Currency exchange rates
|
6.1
|
%
|
Total
|
21.2
|
%
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Net revenues
|
|
$
|
—
|
|
|
$
|
72.2
|
|
|
$
|
78.0
|
|
Pre-tax earnings (loss) from operations
|
|
(2.8
|
)
|
|
(2.9
|
)
|
|
(4.1
|
)
|
|||
Pre-tax gain (loss) on sale
|
|
(1.5
|
)
|
|
(6.7
|
)
|
|
—
|
|
|||
Tax benefit (expense)
|
|
1.6
|
|
|
2.3
|
|
|
1.6
|
|
|||
Discontinued operations, net of tax
|
|
$
|
(2.7
|
)
|
|
$
|
(7.3
|
)
|
|
$
|
(2.5
|
)
|
In millions
|
2012
|
|
2011
|
|
2010
|
||||||
Net revenues
|
$
|
—
|
|
|
$
|
72.2
|
|
|
$
|
78.0
|
|
After-tax earnings (loss) from operations
|
$
|
(0.5
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
(2.5
|
)
|
Gain (loss) on sale, net of tax
|
(1.5
|
)
|
|
(5.2
|
)
|
|
—
|
|
|||
Discontinued operations, net of tax
|
$
|
(2.0
|
)
|
|
$
|
(6.5
|
)
|
|
$
|
(2.5
|
)
|
|
|
June 30,
|
|
December 31,
|
||||||||||||
In millions
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||
Cash and cash equivalents
|
|
$
|
322.2
|
|
|
$
|
317.5
|
|
|
$
|
376.8
|
|
|
$
|
378.3
|
|
Short-term borrowings and current maturities of long-term debt
|
|
2.4
|
|
|
2.2
|
|
|
1.4
|
|
|
1.0
|
|
||||
Long-term debt, including capital leases
|
|
2.6
|
|
|
2.8
|
|
|
3.5
|
|
|
5.2
|
|
||||
Total debt
|
|
5.0
|
|
|
5.0
|
|
|
4.9
|
|
|
6.2
|
|
||||
Total Parent Company equity
|
|
1,400.1
|
|
|
1,343.2
|
|
|
1,413.8
|
|
|
1,457.4
|
|
||||
Total equity
|
|
1,424.8
|
|
|
1,366.2
|
|
|
1,435.8
|
|
|
1,481.6
|
|
||||
Debt-to-total capital ratio
|
|
0.3
|
%
|
|
0.4
|
%
|
|
0.3
|
%
|
|
0.4
|
%
|
|
|
June 30,
|
|
December 31,
|
||||||||
In millions
|
|
2013
|
|
2012
|
|
2011
|
||||||
Current maturities of long-term debt
|
|
$
|
0.5
|
|
|
$
|
0.9
|
|
|
$
|
1.4
|
|
Short-term borrowings
|
|
1.9
|
|
|
1.3
|
|
|
—
|
|
|||
Total
|
|
$
|
2.4
|
|
|
$
|
2.2
|
|
|
$
|
1.4
|
|
|
|
June 30,
|
|
December 31,
|
||||||||||||||||
In millions
|
|
2013
|
|
2012
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Operating cash flow provided by (used in) continuing operations
|
|
$
|
59.6
|
|
|
$
|
116.0
|
|
|
$
|
271.9
|
|
|
$
|
272.8
|
|
|
$
|
208.0
|
|
Investing cash flow provided by (used in) continuing operations
|
|
(6.9
|
)
|
|
(7.9
|
)
|
|
(17.5
|
)
|
|
(3.5
|
)
|
|
(20.1
|
)
|
|||||
Financing cash flow provided by (used in) continuing operations
|
|
(35.9
|
)
|
|
(184.4
|
)
|
|
(317.9
|
)
|
|
(253.6
|
)
|
|
(106.3
|
)
|
In millions
|
|
Less than
1 year
|
|
1 - 3
years
|
|
3 - 5
years
|
|
More than
5 years
|
|
Total
|
||||||||||
Short-term debt and interest
|
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.3
|
|
Long-term debt and interest, including capital leases
|
|
0.9
|
|
|
1.8
|
|
|
1.1
|
|
|
—
|
|
|
3.8
|
|
|||||
Purchase obligations
|
|
104.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
104.4
|
|
|||||
Operating leases
|
|
19.3
|
|
|
22.5
|
|
|
12.9
|
|
|
2.3
|
|
|
57.0
|
|
|||||
Total contractual cash obligations
|
|
$
|
125.9
|
|
|
$
|
24.3
|
|
|
$
|
14.0
|
|
|
$
|
2.3
|
|
|
$
|
166.5
|
|
•
|
Allowance for doubtful accounts – We maintain an allowance for doubtful accounts receivable which represents our best estimate of probable loss inherent in our accounts receivable portfolio. This estimate is based upon our two step policy that results in the total recorded allowance for doubtful accounts. The first step is to create a specific reserve for significant accounts as to which the customer’s ability to satisfy their financial obligation to the Company is in doubt due to circumstances such as bankruptcy, deteriorating operating results or financial position. In these circumstances, management uses its judgment to record an allowance based on the best estimate of probable loss, factoring in such considerations as the market value of collateral, if applicable. The second step is to record a portfolio reserve based on the aging of the outstanding accounts receivable portfolio and the Company’s historical experience with our end markets, customer base and products. Actual results could differ from those estimates. These estimates and assumptions are reviewed periodically, and the effects of changes, if any, are reflected in the statement of operations in the period that they are determined.
|
•
|
Goodwill and indefinite-lived intangible assets – We have significant goodwill and indefinite-lived intangible assets on our balance sheet related to acquisitions. Our goodwill and other indefinite-lived intangible assets are tested and reviewed annually during the fourth quarter for impairment or when there is a significant change in events or circumstances that indicate that the fair value of an asset is more likely than not less than the carrying amount of the asset.
|
•
|
Decreases in estimated market sizes or market growth rates due to greater-than-expected declines in volumes, pricing pressures or disruptive technology;
|
•
|
Declines in our market share and penetration assumptions due to increased competition or an inability to develop or launch new products;
|
•
|
The impacts of the European sovereign debt crisis, including greater-than-expected declines in pricing, reductions in volumes, or fluctuations in foreign exchange rates;
|
•
|
The level of success of on-going and future research and development efforts, including those related to recent acquisitions, and increases in the research and development costs necessary to obtain regulatory approvals and launch new products;
|
•
|
Increase in the price or decrease in the availability of key commodities and the impact of higher energy prices;
|
•
|
Increases in our market-participant risk-adjusted weighted-average cost of capital; and
|
•
|
Changes in the structure of our business as a result of future reorganizations or divestitures of assets or businesses.
|
•
|
Long-lived assets and finite-lived intangibles – Long-lived assets and finite-lived intangibles are reviewed for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset may not be fully recoverable. Assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows can be generated. Impairment in the carrying value of an asset would be recognized whenever anticipated future undiscounted cash flows from an asset are less than its carrying value. The impairment is measured as the amount by which the carrying value exceeds the fair value of the asset as determined by an estimate of discounted cash flows. We
|
•
|
Loss contingencies – Liabilities are recorded for various contingencies arising in the normal course of business, including litigation and administrative proceedings, product warranty, worker’s compensation and other claims. We have recorded reserves in the financial statements related to these matters, which are developed using input derived from actuarial estimates and historical and anticipated experience data depending on the nature of the reserve, and in certain instances with consultation of legal counsel, internal and external consultants and engineers. Subject to the uncertainties inherent in estimating future costs for these types of liabilities, we believe our estimated reserves are reasonable and do not believe the final determination of the liabilities with respect to these matters would have a material effect on our financial condition, results of operations, liquidity or cash flows for any year.
|
•
|
Revenue recognition – Revenue is recognized and earned when all of the following criteria are satisfied: (a) persuasive evidence of a sales arrangement exists; (b) the price is fixed or determinable; (c) collectability is reasonably assured; and (d) delivery has occurred or service has been rendered. Delivery generally occurs when the title and the risks and rewards of ownership have substantially transferred to the customer. Both the persuasive evidence of a sales arrangement and fixed or determinable price criteria are deemed to be satisfied upon receipt of an executed and legally binding sales agreement or contract that clearly defines the terms and conditions of the transaction including the respective obligations of the parties. If the defined terms and conditions allow variability in all or a component of the price, revenue is not recognized until such time that the price becomes fixed or determinable. At the point of sale, we validate that existence of an enforceable claim that requires payment within a reasonable amount of time and assesses the collectability of that claim. If collectability is not deemed to be reasonably assured, then revenue recognition is deferred until such time that collectability becomes probable or cash is received. Delivery is not considered to have occurred until the customer has taken title and assumed the risks and rewards of ownership. Service and installation revenue are recognized when earned. In some instances, customer acceptance provisions are included in sales arrangements to give the buyer the ability to ensure the delivered product or service meets the criteria established in the order. In these instances, revenue recognition is deferred until the acceptance terms specified in the arrangement are fulfilled through customer acceptance or a demonstration that established criteria have been satisfied. If uncertainty exists about customer acceptance, revenue is not recognized until acceptance has occurred.
|
•
|
Product Warranties – Standard product warranty accruals are recorded at the time of sale and are estimated based upon product warranty terms and historical experience. We assess the adequacy of our liabilities and will make adjustments as necessary based on known or anticipated warranty claims, or as new information becomes available.
|
•
|
Income taxes – Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities, applying enacted tax rates expected to be in effect for the year in which the differences are expected to reverse. We recognize future tax benefits, such as net operating losses and non-U.S. tax credits, to the extent that realizing these benefits is considered in our judgment to be more likely than not. We regularly review the recoverability of our deferred tax assets considering our historic profitability, projected future taxable income, timing of the reversals of existing temporary differences and the feasibility of our tax planning strategies. Where appropriate, we record a valuation allowance with respect to a future tax benefit.
|
•
|
Employee benefit plans – Ingersoll Rand provides a range of benefits to eligible employees and retirees, including pensions, postretirement and postemployment benefits. Determining the cost associated with such benefits is dependent on various actuarial assumptions including discount rates, expected return on plan assets, compensation increases, employee mortality, turnover rates and healthcare cost trend rates. Actuarial valuations are performed to determine expense in accordance with GAAP. Actual results may differ from the actuarial assumptions and are generally accumulated and amortized into earnings over future periods. Actuarial assumptions are reviewed at each measurement date and modifications are made to the assumptions based on current rates and trends, if appropriate. The discount rate, the rate of compensation increase and the expected long-term rates of return on plan assets are determined as of each measurement date. A discount rate reflects a rate at which pension benefits could be effectively settled. Discount rates for all plans are established using hypothetical yield curves based on the yields of corporate bonds rated AA quality. Spot rates are developed from the yield curve and used to discount future benefit payments. The rate of compensation increase is dependent on expected future compensation levels. The expected long-term rate of return on plan assets reflects the average rate of returns expected on the funds invested or to be invested to provide for the benefits included in the projected benefit obligation. The expected long-term rate of return on plan assets is based on what is achievable given the plan’s investment policy, the types of assets held and the target asset allocation. The expected long-term rate of return is determined as of each measurement date. The assumptions utilized in recording our obligations under the plans are reasonable based on input from our actuaries, outside investment advisers and information as to assumptions used by plan sponsors.
|
•
|
Former Chairman and Chief Executive Officer of Great Plains Energy Incorporated (an electric utilities holding company) from 2003 to 2013
|
•
|
Current Directorships:
|
▪
|
Polypore International Inc.
|
•
|
Former Directorships:
|
▪
|
Great Plains Energy Inc.
|
▪
|
Itron Inc.
|
▪
|
UMB Financial Corp.
|
•
|
Other activities:
|
▪
|
Trustee, Midwest Research Institute
|
▪
|
Trustee, Committee for Economic Development
|
▪
|
Chairman, Partnership for Children
|
•
|
Former Chief Executive Officer of Rivoli S.p.A. (prefabricated infrastructure company) from 2009 to 2011
|
•
|
Former Chief Executive Officer of Ambrosetti Consulting (a consulting company) from 2008 to 2009
|
•
|
Current Directorships:
|
▪
|
Alcatel-Lucent
|
•
|
Former Chairman, President and Chief Executive Officer of Cooper Industries plc. (global manufacturer of electrical components for the industrial, utility and construction markets) from 2006 to 2012
|
•
|
Current Directorships:
|
▪
|
Paccar Inc.
|
•
|
Former Directorships:
|
▪
|
Cooper Industries plc
|
▪
|
Trane Inc. (formerly, American Standard Inc.)
|
•
|
President and Chief Executive Officer of Allegion plc
|
•
|
Chairman, President and Chief Executive Officer of Quanex Building Products Corporation (a manufacturer of engineered material and components for the building products markets) from 2008 to July 2013
|
•
|
President and Chief Executive Officer of the North American Operating Division of Schneider Electric (a global electrical and automation manufacturer) from 2004 to 2008
|
•
|
Current Directorships: None
|
•
|
Former Directorships:
|
▪
|
Gardner Denver, Inc.
|
▪
|
Quanex Building Products Corporation
|
•
|
Chairman, President and Chief Executive Officer of Areva SA (solutions provider for carbon-free power generation worldwide) since 2007
|
•
|
Current Directorships:
|
▪
|
Areva SA
|
•
|
Reviewing annual audited and quarterly financial statements, as well as our disclosures under “Management’s Discussion and Analysis of Financial Conditions and Results of Operations,” with management and the independent auditors.
|
•
|
Obtaining and reviewing periodic reports, at least annually, from management assessing the effectiveness of our internal controls and procedures for financial reporting.
|
•
|
Reviewing our processes to assure compliance with all applicable laws, regulations and corporate policy.
|
•
|
Recommending the public accounting firm to be proposed for appointment by the shareholders as our independent auditors and review the performance of the independent auditors.
|
•
|
Reviewing the scope of the audit and the findings and approve the fees of the independent auditors.
|
•
|
Approving in advance permitted audit and non-audit services to be performed by the independent auditors.
|
•
|
Satisfying itself as to the independence of the independent auditors and ensuring receipt of their annual independence statement.
|
•
|
Reviewing proposed borrowings and issuances of securities.
|
•
|
Recommending to the Board of Directors the dividends to be paid on our ordinary shares.
|
•
|
Reviewing cash management policies.
|
•
|
Reviewing periodic reports of the investment performance of our employee benefit plans.
|
•
|
Establishing executive compensation policies.
|
•
|
Reviewing and approving the goals and objectives relevant to the compensation of the Chief Executive Officer, evaluating the Chief Executive Officer’s performance against those goals and objectives and setting the Chief Executive Officer’s compensation level based on this evaluation.
|
•
|
Approving compensation of other officers and key employees.
|
•
|
Reviewing and approving executive compensation and benefit programs.
|
•
|
Administering our equity compensation plans.
|
•
|
Reviewing and recommending significant changes in principal employee benefit programs.
|
•
|
Approving and overseeing Compensation Committee consultants.
|
•
|
Identifying individuals qualified to become directors and recommend the candidates for all directorships.
|
•
|
Recommending individuals for election as officers.
|
•
|
Reviewing our Corporate Governance Guidelines and making recommendations for changes.
|
•
|
Considering questions of independence and possible conflicts of interest of directors and executive officers.
|
•
|
Taking a leadership role in shaping our corporate governance.
|
(i)
|
David D. Petratis, who is expected to serve as our Chairman, President and Chief Executive Officer (“CEO”);
|
(ii)
|
Patrick S. Shannon, who is expected to serve as our Senior Vice President and Chief Financial Officer (“CFO”);
|
(iii)
|
Timothy P. Eckersley, who is expected to serve as our [ ];
|
(iv)
|
John T. Evans, who is expected to serve as our [ ]; and
|
(v)
|
Barbara A. Santoro, who is expected to serve as our Senior Vice President, General Counsel and Secretary.
|
I.
|
Compensation Philosophy and Design Principles
|
II.
|
Factors Considered in the Determination of Target Total Direct Compensation
|
III.
|
Role of the Compensation Committee and its Independent Adviser
|
IV.
|
Compensation Program Descriptions and Compensation Decisions
|
V.
|
Other Compensation and Tax Matters
|
Total Direct Compensation
|
|
|||
|
Element
|
|
Description of Element
|
|
|
Base Salary
|
|
Fixed cash compensation.
|
|
|
Annual Incentive
(the Annual Incentive Matrix or “AIM”)
|
|
Cash incentive compensation where any award is based on performance against pre-defined annual Operating Income (“OI”) margin percent, revenue (“Revenue”) and cash flow (“Cash Flow”) objectives as well as individual performance.
|
|
|
Long-Term Incentives
|
|
Performance-based long-term incentive compensation that is aligned with Ingersoll Rand’s stock price and is awarded in the form of stock options, RSUs and PSUs. PSUs are only payable if Ingersoll Rand’s earnings per share (“EPS”) and total shareholder return (“TSR”) relative to companies in the S&P 500 Industrials Index exceed threshold performance against pre-defined objectives.
|
|
3M
|
Eaton Corp
|
Johnson Controls Inc.
|
Pentair
|
Cummins, Inc.
|
Emerson Electric
|
Paccar Inc.
|
Stanley Black & Decker
|
Danaher Corp
|
Honeywell International
|
Parker Hannifin Corp
|
Textron
|
Dover
|
Illinois Tool Works
|
PPG Industries
|
Tyco International
|
ADT Corporation
|
Checkpoint Systems
|
Flir Systems
|
ScanSource
|
Brady Corp.
|
Diebold
|
Fortune Brands Home Security
|
Steelcase
|
Brinks
|
Enersys
|
Griffon Corp.
|
|
CACI International
|
Enpro Industries
|
Quanex Building Products
|
|
Element
|
|
Objective of Element Including Risk Mitigation Factors
|
|
Key Features
|
Base Salary
|
|
To provide a sufficient and stable source of cash compensation.
To avoid encouraging excessive risk-taking, it is important that an appropriate level of cash compensation is not variable.
|
|
Targeted, on average, at the 50th percentile of the peer group.
Future adjustments are determined based on an evaluation of the executives’ proficiency in fulfilling his or her responsibilities.
|
Annual Incentive Matrix Program
|
|
To serve as an annual cash award based on the achievement of pre-established performance objectives.
Structured to take into consideration the unique needs of the various businesses.
Amount of compensation earned cannot exceed a maximum payout of 200% of individual target levels and is also subject to a claw-back in the event of a financial restatement.
|
|
Officers have an AIM target expressed as a percentage of base salary. Targets are set based on the compensation levels of similar jobs in comparable companies, as well as on the officer’s experience and proficiency level in performing the duties of the role.
Actual AIM payouts are dependent on business and/or enterprise financial performance and individual performance. The financial metrics used to determine the awards for 2012 were Revenue and OI margin percent, modified up or down based on Cash Flow performance.
|
Element
|
|
Objective of Element Including Risk Mitigation Factors
|
|
Key Features
|
Performance Share Program
|
|
To serve as a long-term incentive based on the achievement of pre-established performance objectives relative to companies in the S&P 500 Industrials Index.
To promote long-term strategic planning and discourage an overemphasis on attaining short-term goals.
Amount earned cannot exceed a maximum payout of 200% of individual target levels and is also subject to a claw-back in the event of a financial restatement.
|
|
Earned over a three-year performance period.
Equity earned is based on our EPS growth (from continuing operations) relative to the companies in the S&P 500 Industrials Index for awards granted through 2011.
Beginning in 2012, equity earned is based on relative TSR and relative EPS growth compared to companies within the S&P 500 Industrials Index (with equal weight given to each metric).
Actual value of the PSP shares earned depends on our share price at the time of payment.
|
Stock Options / Restricted Stock Units
|
|
Aligns the interests of the officers and shareholders.
Awards provide a balanced approach between risk and retention.
Awards are subject to a claw-back in the event of a financial restatement.
|
|
Stock options and RSUs are granted annually, with stock options having an exercise price equal to the fair market value of ordinary shares on the date of grant.
Both stock options and RSUs typically vest ratably over three years, one third per year.
Stock options expire on the 10th anniversary (less one day) of the grant date (unless employment terminates sooner).
|
Name
|
|
2011
|
|
2012
|
|
% Increase (1)
|
|||||||||
P. S. Shannon (2)
|
|
$
|
340,000
|
|
|
|
|
$
|
370,000
|
|
|
|
|
8.8
|
%
|
T. P. Eckersley
|
|
$
|
387,219
|
|
|
|
|
$
|
396,900
|
|
|
|
|
2.5
|
%
|
J. T. Evans
|
|
$
|
334,750
|
|
|
|
|
$
|
344,793
|
|
|
|
|
3.0
|
%
|
B. A. Santoro
|
|
$
|
300,000
|
|
|
|
|
$
|
309,000
|
|
|
|
|
3.0
|
%
|
(1)
|
Represents merit increases other than for Mr. Shannon.
|
(2)
|
Mr. Shannon received two increases in 2012: a merit increase of 3% effective April 1, 2012 and a market adjustment of 5.7% in connection with his change in role from Vice President of Audit to Vice President and Treasurer in August 2012.
|
•
|
Patrick S. Shannon: Strengthen capital structure through cash flow and debt reduction; continue to build enterprise awareness, accountability and effectiveness of compliance issues and best practices; provide the Audit Committee with regular and timely risk assurance reports; implement operational efficiency plans for Treasury; and leadership development.
|
•
|
Timothy P. Eckersley: Deliver operational performance through continued focus on productivity and cash flow; execute growth strategy for Electronics platforms through focused penetration in the Original Equipment Manufacturing, Integrator, and Locksmith channels; leverage IT investments to drive increased efficiency; and leadership development.
|
•
|
John T. Evans: Deliver operational performance through continued focus on productivity and cash flow; margin improvement through operational efficiency, revenue growth and quality; and leadership development.
|
•
|
Barbara A. Santoro: Manage transition to new transfer agent; provide legal and corporate governance support to management and the Board of Directors in connection with Ingersoll Rand’s consideration of strategic opportunities; and implement Disclosure Committee process enhancements.
|
|
Weight
|
|
Target Revenue
|
|
Adjusted Revenue
|
|
Target OI Margin
|
|
Adjusted OI Margin
|
|
Adjusted Cash Flow
|
|
Overall Financial Score
|
|
Individual Performance Score
|
|
AIM Payout %
|
||||||||||
P. S. Shannon
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Enterprise
|
100
|
%
|
|
$
|
14.226
|
B
|
|
$
|
14.035
|
B
|
|
11.1
|
%
|
|
10.8
|
%
|
|
111.5
|
%
|
|
77.94
|
%
|
|
100%
|
|
77.94
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
T. P. Eckersley
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Enterprise
|
35
|
%
|
|
$
|
14.226
|
B
|
|
$
|
14.035
|
B
|
|
11.1
|
%
|
|
10.8
|
%
|
|
111.5
|
%
|
|
111.47
|
%
|
|
100%
|
|
111.47
|
%
|
Security Technologies (1)
|
65
|
%
|
|
$
|
1.632
|
B
|
|
$
|
1.626
|
B
|
|
20.3
|
%
|
|
20.3
|
%
|
|
106.1
|
%
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
J. T. Evans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Enterprise
|
35
|
%
|
|
$
|
14.226
|
B
|
|
$
|
14.035
|
B
|
|
11.1
|
%
|
|
10.8
|
%
|
|
111.5
|
%
|
|
120.52
|
%
|
|
110%
|
|
132.57
|
%
|
Residential Solutions (2)
|
65
|
%
|
|
$
|
2.065
|
B
|
|
$
|
2.054
|
B
|
|
6.1
|
%
|
|
5.6
|
%
|
|
193.9
|
%
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
B. A. Santoro
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Enterprise
|
100
|
%
|
|
$
|
14.226
|
B
|
|
$
|
14.035
|
B
|
|
11.1
|
%
|
|
10.8
|
%
|
|
111.5
|
%
|
|
77.94
|
%
|
|
100%
|
|
77.94
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Performance results reflect Security Technologies performance. Calculated payout includes 35% weighting for Security Technologies with an AIM payout of 96.81% and 30% weighting for Security Technologies - Americas region with an AIM payout of 167.70%.
|
(2)
|
Performance results reflect Residential Solutions performance. Calculated payout includes 25% weighting for Residential Solutions with an AIM payout of 132.96%, 30% weighting for Residential Solutions - Residential Security business unit with an AIM payout of 200.00%, and 10% weighting for Residential Solutions - Connected Home Solutions business unit with an AIM payout of 0.00%.
|
Name
|
|
Individual AIM Target
|
|
AIM Payout Percent for 2012
|
|
AIM Award for 2012
|
|||||
P. S. Shannon (1)
|
|
60% of $358,369
|
|
77.94
|
%
|
|
|
$
|
167,588
|
|
|
T. P. Eckersley
|
|
60% of $396,900
|
|
111.47
|
%
|
|
|
$
|
265,455
|
|
|
J. T. Evans
|
|
60% of $344,793
|
|
132.57
|
%
|
|
|
$
|
274,259
|
|
|
B. A. Santoro
|
|
55% of $309,000
|
|
77.94
|
%
|
|
|
$
|
132,459
|
|
|
(1)
|
In 2012, Mr. Shannon served in the role of VP, Audit Services from January 1, 2012 through August 2, 2012 and in the role of VP, Treasurer from August 3, 2012 through December 31, 2012. His 2012 AIM target was pro-rated to reflect time served and base salary in each role.
|
Name
|
Stock
Option
Award
|
|
RSU
Award
|
|
Target 2012-14
PSU award
|
|||||||||
P. S. Shannon
|
|
$
|
120,000
|
|
|
|
|
$
|
120,000
|
|
|
$
|
160,000
|
|
T. P. Eckersley
|
|
$
|
125,400
|
|
|
|
|
$
|
125,400
|
|
|
$
|
152,000
|
|
J. T. Evans
|
|
$
|
122,100
|
|
|
|
|
$
|
122,100
|
|
|
$
|
148,000
|
|
B. A. Santoro
|
|
$
|
71,500
|
|
|
|
|
$
|
71,500
|
|
|
$
|
108,000
|
|
Ingersoll Rand Position
|
|
Individual Ownership
Requirement (Shares
and Equivalents)
|
|
Percent of Salary
(Based on Stock Price as of December 31, 2012)
|
|||
Chief Executive Officer
|
|
150,000
|
|
|
|
|
Approximately 7x multiple of salary
|
Senior Vice Presidents
|
|
40,000
|
|
|
|
|
Approximately 5x multiple of salary
|
Corporate Vice Presidents (Shannon and Santoro)
|
|
15,000
|
|
|
|
|
Approximately 2x multiple of salary
|
Other Vice Presidents (Eckersley and Evans)
|
|
6,000
|
|
|
|
|
Approximately 0.75x multiple of salary
|
Name and Position
|
|
Compensation
|
|
% of Total Compensation
|
|
D. D. Petratis, CEO
|
|
|
|
|
|
Base Salary
|
|
$
|
|
|
|
Target AIM
|
|
$
|
|
|
|
Target Long-Term Incentives
|
|
$
|
|
|
|
P. S. Shannon, SVP and CFO:
|
|
|
|
|
|
Base Salary
|
|
$
|
|
|
|
Target AIM
|
|
$
|
|
|
|
Target Long-Term Incentives
|
|
$
|
|
|
|
T. P. Eckersley, [ ]:
|
|
|
|
|
|
Base Salary
|
|
$
|
|
|
|
Target AIM
|
|
$
|
|
|
|
Target Long-Term Incentives
|
|
$
|
|
|
|
J. T. Evans, [ ]:
|
|
|
|
|
|
Base Salary
|
|
$
|
|
|
|
Target AIM
|
|
$
|
|
|
|
Target Long-Term Incentives
|
|
$
|
|
|
|
B. A. Santoro, SVP, GC and Secretary:
|
|
|
|
|
|
Base Salary
|
|
$
|
|
|
|
Target AIM
|
|
$
|
|
|
|
Target Long-Term Incentives
|
|
$
|
|
|
|
Name
|
|
Transition Bonus
|
|
P. S. Shannon
|
|
$
|
|
T. P. Eckersley
|
|
$
|
|
J. T. Evans
|
|
$
|
|
B. A. Santoro
|
|
$
|
|
Name and
Principal Position
|
|
Year
|
|
Salary
($)(a)
|
|
Stock
Awards
($)(b)
|
|
Option
Awards
($)(c)
|
|
Non-
Equity
Incentive
Plan
Compensation
($)(d)
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(e)
|
|
All
Other
Compensation
($)(f)
|
|
Total
($) |
|||||||
D. D. Petratis (g)
|
|
2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Chairman, President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
P. S. Shannon
|
|
2012
|
|
355,757
|
|
|
319,554
|
|
|
113,147
|
|
|
167,588
|
|
|
395,851
|
|
|
56,593
|
|
|
1,408,490
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
T. P. Eckersley
|
|
2012
|
|
394,666
|
|
|
314,970
|
|
|
118,236
|
|
|
265,455
|
|
|
187,116
|
|
|
45,868
|
|
|
1,326,311
|
|
[ ]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
J. T. Evans
|
|
2012
|
|
342,475
|
|
|
306,660
|
|
|
115,117
|
|
|
274,259
|
|
|
237,305
|
|
|
24,565
|
|
|
1,300,381
|
|
[ ]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
B. A. Santoro
|
|
2012
|
|
306,750
|
|
|
206,187
|
|
|
67,415
|
|
|
132,459
|
|
|
423,923
|
|
|
58,469
|
|
|
1,195,203
|
|
Senior Vice President, General Counsel and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
A portion of a participant’s annual salary may be deferred into a number of investment options under Ingersoll Rand’s deferred compensation plans. In 2012, no NEO deferred any salary.
|
(b)
|
The amounts shown in this column reflect the aggregate grant date fair value of PSU awards and any RSU awards granted for the year under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 and do not reflect amounts paid to or realized by the NEOs. In determining the aggregate grant date fair value of the PSU awards, the awards were valued assuming target level performance achievement. If the maximum level performance achievement is assumed, the aggregate grant date fair value of the PSU awards would be as follows:
|
Name
|
|
Maximum Grant Date Value
Of
2012-14 PSU Awards
($) |
|
P. S. Shannon
|
|
399,059
|
|
T. P. Eckersley
|
|
379,065
|
|
J. T. Evans
|
|
369,119
|
|
B. A. Santoro
|
|
269,354
|
|
(c)
|
The amounts in this column reflect the aggregate grant date fair value of stock option grants for financial reporting purposes for the year under ASC 718 and do not reflect amounts paid to or realized by the NEOs. For a discussion of the assumptions made in determining the ASC 718 values, see Note 14, “Share-Based Compensation,” to the annual combined financial statements included elsewhere in this Information Statement.
|
(d)
|
This column reflects the amounts earned as annual awards under the AIM program. Unless deferred into Ingersoll Rand’s deferred compensation plans, AIM program payments are made in cash. In 2012, Mr. Eckersley deferred 50% of his AIM payment. Amounts shown in this column are not reduced to reflect deferrals of AIM awards into Ingersoll Rand’s deferred compensation plans.
|
(e)
|
Amounts reported in this column reflect the aggregate increase in the actuarial present value of the benefits under the qualified Ingersoll Rand Pension Plan Number One (the “Pension Plan”), Supplemental Pension Plan I, Supplemental Pension Plan II (together with Supplemental Pension Plan I, the “Supplemental Pension Plans”), KMP and EOSP, as applicable. Amounts are higher for those NEOs who are older and closer to retirement than for those who are younger and further from retirement since the period over which the benefit is discounted to determine its present value is shorter and the impact of discounting is therefore reduced. The plans do not permit above-market or preferential earnings on any nonqualified deferred compensation.
|
(f)
|
The following table summarizes the components of this column for fiscal year 2012:
|
Name
|
|
Matching Contributions
($)(1)
|
|
Company
Cost for
Life
Insurance
($)
|
|
Retiree
Medical
Plan
($)(2)
|
|
Other
Benefits
($)(3)
|
|
Total
($)
|
|||||
P. S. Shannon
|
|
32,643
|
|
|
800
|
|
|
—
|
|
|
23,150
|
|
|
56,593
|
|
T. P. Eckersley
|
|
32,791
|
|
|
930
|
|
|
—
|
|
|
12,147
|
|
|
45,868
|
|
J. T. Evans
|
|
24,052
|
|
|
513
|
|
|
—
|
|
|
—
|
|
|
24,565
|
|
B. A. Santoro
|
|
27,543
|
|
|
1,290
|
|
|
1,100
|
|
|
28,536
|
|
|
58,469
|
|
(1)
|
Represents matching contributions under Ingersoll Rand’s ESP and Supplemental ESP plans.
|
(2)
|
Represents the estimated year-over-year increase in the value of the retiree medical plan, calculated based on the methods used for financial statement reporting purposes.
|
(3)
|
The other benefits the NEOs received in 2012 are:
|
Name
|
|
Car Usage
($)(a)
|
|
Financial Counseling
($)
|
|
|
Executive Health Program
($)
|
|
|
Total
($)
|
||||
P. Shannon
|
|
13,524
|
|
|
9,251
|
|
|
|
375
|
|
|
|
23,150
|
|
T. Eckersley
|
|
10,565
|
|
|
—
|
|
|
|
1,582
|
|
|
|
12,147
|
|
J. T. Evans
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
B. A. Santoro
|
|
17,982
|
|
|
8,490
|
|
|
|
2,064
|
|
|
|
28,536
|
|
(a)
|
Represents the incremental cost of the leased cars, calculated based on the lease, insurance, fuel and maintenance costs to Ingersoll Rand.
|
(g)
|
Mr. Petratis was not employed by Ingersoll Rand in 2012 and therefore no historical information is available for him.
|
Name
|
|
Grant Date
|
|
Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards
|
|
Estimated Future Payouts
Under Equity
Incentive Plan Awards
|
|
All Other Stock Awards: Number of Shares of Stock or Units
(#)(c)
|
|
All Other Option Awards: Number of Securities Underlying Options
(#)(c)
|
|
Exercise
or Base
Price of
Option
Awards
($/Sh)
(d)
|
|
Grant
Date
Fair
Value of
Stock
and
Option
Awards
($)(e)
|
|||||||||||||||||||
Threshold
($)(a)
|
|
Target
($)(a)
|
|
Maximum
($)(a)
|
|
Threshold
(#)(b)
|
|
Target
(#)(b)
|
|
Maximum
(#)(b)
|
|
||||||||||||||||||||||
D. D. Petratis (f)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
P. S. Shannon
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
AIM
|
|
2/24/2012
|
|
64,506
|
|
|
215,021
|
|
|
430,043
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
PSUs (2012-14)
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
983
|
|
|
3,932
|
|
|
7,864
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
199,529
|
|
|
Options
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,271
|
|
|
40.70
|
|
|
113,147
|
|
|
RSUs
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,949
|
|
|
—
|
|
|
—
|
|
|
120,024
|
|
|
T. P. Eckersley
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
AIM
|
|
2/24/2012
|
|
71,442
|
|
|
238,140
|
|
|
476,280
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
PSUs (2012-14)
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
934
|
|
|
3,735
|
|
|
7,470
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
189,533
|
|
|
Options
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,643
|
|
|
40.70
|
|
|
118,236
|
|
|
RSUs
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,082
|
|
|
—
|
|
|
—
|
|
|
125,437
|
|
|
J. T. Evans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
AIM
|
|
2/24/2012
|
|
|
62,063
|
|
|
206,876
|
|
|
413,752
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
PSUs (2012-14)
|
|
2/24/2012
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
910
|
|
|
3,637
|
|
|
7,274
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
184,560
|
|
Options
|
|
2/24/2012
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,415
|
|
|
40.70
|
|
|
115,117
|
|
RSUs
|
|
2/24/2012
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,000
|
|
|
—
|
|
|
—
|
|
|
122,100
|
|
B. A. Santoro
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
AIM
|
|
2/24/2012
|
|
50,985
|
|
|
169,950
|
|
|
339,900
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
PSUs (2012-14)
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
664
|
|
|
2,654
|
|
|
5,308
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
134,677
|
|
|
Options
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,928
|
|
|
40.70
|
|
|
67,415
|
|
|
RSUs
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,757
|
|
|
—
|
|
|
—
|
|
|
71,510
|
|
(a)
|
The target award levels established for the AIM program are established annually in February and are expressed as a percentage of the NEO’s base salary. Refer to Compensation Discussion and Analysis under the heading “Annual Incentive Matrix Program” for a description of the Ingersoll Rand Compensation Committee’s process for establishing AIM program target award levels. The amounts reflected in the “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” columns represent the threshold, target and maximum amounts for awards under the AIM program that were paid in February 2013, based on performance in 2012. Thus, the amounts shown in the threshold, target and maximum columns reflect the range of potential payouts when the target award levels were established in February 2012. The AIM program pays $0 for performance below threshold. The actual amounts paid pursuant to those awards are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.
|
(b)
|
The amounts reflected in the “Estimated Future Payouts Under Equity Incentive Plan Awards” columns represent the threshold, target and maximum amounts for PSU awards for the 2012-2014 performance period. The PSP pays $0 for
|
(c)
|
The amounts in these columns reflect the stock option and RSU awards granted in February 2012. For a description of the Ingersoll Rand Compensation Committee’s process for determining stock option and RSU awards and the terms of such awards, see Compensation Discussion and Analysis under the heading “Long-Term Incentive Program” and the “Post-Employment Benefits” sections.
|
(d)
|
Stock options were granted under the Ingersoll Rand Incentive Stock Plan of 2007 (the “2007 Plan”), which requires options to be granted at an exercise price equal to the fair market value of Ingersoll Rand’s ordinary shares on the date of grant. The fair market value is defined in the 2007 Plan as the average of the high and low composite price of Ingersoll Rand’s ordinary shares listed on the NYSE on the grant date. The closing price on the NYSE of Ingersoll Rand’s ordinary shares was $40.48 on the grant date.
|
(e)
|
The grant date fair value of the equity awards granted in February 2012 was calculated in accordance with ASC 718. The actual amount ultimately realized by each NEO from the stock option awards will likely vary based on a number of factors, including stock price fluctuations, differences from the valuation assumptions used and timing of exercise or applicable vesting. For a description of the assumptions made in valuing the equity awards, see Note 14, “Share-Based Compensation” to the annual combined financial statements included elsewhere in this Information Statement. For PSUs, the grant date fair value has been determined based on achievement of target level performance, which is the performance threshold Ingersoll Rand believes is the most likely to be achieved under the grants.
|
(f)
|
Mr. Petratis was not employed by Ingersoll Rand in 2012 and therefore no historical information is available for him.
|
Name
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|||||||||||||||||||||
|
Grant Date
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
(a)
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(a)
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
(b)
|
|
Number of Shares or Units of Stock that have Not Vested
(#)
(c)
|
|
Market Value of Shares or Units of Stock that have Not Vested ($)
(d)
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have Not Vested
(#)
(e)
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that have Not Vested
($)
(d)
|
||||||||||
D. D. Petratis (f)
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
P. S. Shannon
|
|
2/2/2005
|
|
|
|
23,040
|
|
|
—
|
|
|
38.6850
|
|
|
2/1/2015
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/1/2006
|
|
|
|
17,580
|
|
|
—
|
|
|
39.4250
|
|
|
1/31/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/7/2007
|
|
|
|
17,230
|
|
|
—
|
|
|
43.1250
|
|
|
2/6/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/15/2008
|
|
|
|
22,643
|
|
|
—
|
|
|
39.0000
|
|
|
2/14/2018
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/12/2009
|
|
|
|
26,400
|
|
|
—
|
|
|
16.8450
|
|
|
2/11/2019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/16/2010
|
|
|
|
5,670
|
|
|
2,835
|
|
|
31.5916
|
|
|
2/15/2020
|
|
|
1,003
|
|
|
48,104
|
|
|
6,331
|
|
|
303,635
|
|
|
|
2/14/2011
|
|
|
|
2,339
|
|
|
4,679
|
|
|
47.3350
|
|
|
2/13/2021
|
|
|
1,409
|
|
|
67,576
|
|
|
4,226
|
|
|
202,679
|
|
|
|
2/24/2012
|
|
|
|
—
|
|
|
8,271
|
|
|
40.7000
|
|
|
2/23/2022
|
|
|
2,949
|
|
|
141,434
|
|
|
3,932
|
|
|
188,579
|
|
T. P. Eckersley
|
|
12/5/2007
|
|
|
|
20,000
|
|
|
—
|
|
|
51.5000
|
|
|
12/4/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/16/2010
|
|
|
|
6,520
|
|
|
3,261
|
|
|
31.5916
|
|
|
2/15/2020
|
|
|
1,153
|
|
|
55,298
|
|
|
6,014
|
|
|
288,431
|
|
|
|
2/14/2011
|
|
|
|
2,444
|
|
|
4,890
|
|
|
47.3350
|
|
|
2/13/2021
|
|
|
1,472
|
|
|
70,597
|
|
|
4,014
|
|
|
192,511
|
|
|
|
11/1/2011
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,000
|
|
|
479,600
|
|
|
—
|
|
|
—
|
|
|
|
2/24/2012
|
|
|
|
—
|
|
|
8,643
|
|
|
40.7000
|
|
|
2/23/2022
|
|
|
3,082
|
|
|
147,813
|
|
|
3,735
|
|
|
179,131
|
|
J. T. Evans
|
|
2/4/2004
|
|
|
|
19,240
|
|
|
—
|
|
|
32.1825
|
|
|
2/3/2014
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/2/2005
|
|
|
|
22,000
|
|
|
—
|
|
|
38.6850
|
|
|
2/1/2015
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/1/2006
|
|
|
|
17,580
|
|
|
—
|
|
|
39.4250
|
|
|
1/31/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/7/2007
|
|
|
|
17,860
|
|
|
—
|
|
|
43.1250
|
|
|
2/6/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/15/2008
|
|
|
|
19,535
|
|
|
—
|
|
|
39.0000
|
|
|
2/14/2018
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/12/2009
|
|
|
|
7,200
|
|
|
—
|
|
|
16.8450
|
|
|
2/11/2019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/16/2010
|
|
|
|
5,797
|
|
|
2,899
|
|
|
31.5916
|
|
|
2/15/2020
|
|
|
1,025
|
|
|
49,159
|
|
|
5,856
|
|
|
280,854
|
|
|
|
2/14/2011
|
|
|
|
2,380
|
|
|
4,761
|
|
|
47.3350
|
|
|
2/13/2021
|
|
|
1,434
|
|
|
68,775
|
|
|
3,909
|
|
|
187,476
|
|
|
|
2/24/2012
|
|
|
|
—
|
|
|
8,415
|
|
|
40.7000
|
|
|
2/23/2022
|
|
|
3,000
|
|
|
143,880
|
|
|
3,637
|
|
|
174,431
|
|
B. A. Santoro
|
|
2/2/2005
|
|
|
|
18,320
|
|
|
—
|
|
|
38.6850
|
|
|
2/1/2015
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/1/2006
|
|
|
|
17,580
|
|
|
—
|
|
|
39.4250
|
|
|
1/31/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/7/2007
|
|
|
|
17,090
|
|
|
—
|
|
|
43.1250
|
|
|
2/6/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/15/2008
|
|
|
|
18,334
|
|
|
—
|
|
|
39.0000
|
|
|
2/14/2018
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/12/2009
|
|
|
|
15,000
|
|
|
—
|
|
|
16.8450
|
|
|
2/11/2019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/16/2010
|
|
|
|
5,953
|
|
|
2,977
|
|
|
31.5916
|
|
|
2/15/2020
|
|
|
1,053
|
|
|
50,502
|
|
|
2,532
|
|
|
121,435
|
|
|
|
8/5/2010
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,000
|
|
|
239,800
|
|
|
—
|
|
|
—
|
|
|
|
2/14/2011
|
|
|
|
2,222
|
|
|
4,445
|
|
|
47.3350
|
|
|
2/13/2021
|
|
|
1,338
|
|
|
64,170
|
|
|
1,691
|
|
|
81,100
|
|
|
|
2/24/2012
|
|
|
|
—
|
|
|
4,928
|
|
|
40.7000
|
|
|
2/23/2022
|
|
|
1,757
|
|
|
84,266
|
|
|
2,654
|
|
|
127,286
|
|
(a)
|
These columns represent stock option awards. These awards become exercisable in three equal installments beginning on the first anniversary after the date of grant, subject to continued employment through the vesting period or retirement.
|
(b)
|
All of the stock options granted to the NEOs expire on the tenth anniversary (less one day) of the grant date.
|
(c)
|
This column represents unvested RSUs. Except as described in the following sentence, RSUs become exercisable in three equal installments beginning on the first anniversary after the date of grant, subject to continued employment through the vesting period or retirement. Mr. Eckersley’s grant dated November 1, 2011 and Ms. Santoro’s grant dated August 5, 2010 vest 100% on the third anniversary of the grant date.
|
(d)
|
The market value was computed based on $47.96, the closing market price of Ingersoll Rand’s ordinary shares on the NYSE at December 31, 2012.
|
(e)
|
This column represents unvested and unearned PSUs. PSUs vest upon the completion of a three-year performance period. The actual number of shares an NEO will receive, if any, is subject to achievement of the performance goals as certified by the Ingersoll Rand Compensation Committee, and continued employment through the performance certification date or retirement.
|
(f)
|
Mr. Petratis was not employed by Ingersoll Rand in 2012 and therefore no historical information is available for him.
|
Name
|
|
Option Awards
|
|
Stock Awards
|
||||||||||
Number of
Shares
Acquired on
Exercise
(#)
|
|
Value
Realized on
Exercise
($)
(a)
|
|
Number of Shares
Acquired on Vesting
(#)
|
|
Value
Realized on
Vesting
($)
(b) |
||||||||
D. D. Petratis (c)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
P. S. Shannon
|
|
29,900
|
|
|
473,268
|
|
|
3,467
|
|
|
133,594
|
|
||
T. P. Eckersley
|
|
8,943
|
|
|
278,619
|
|
|
3,678
|
|
|
141,930
|
|
||
J. T. Evans
|
|
2,788
|
|
|
70,606
|
|
|
3,181
|
|
|
122,897
|
|
||
B. A. Santoro
|
|
7,000
|
|
|
171,091
|
|
|
3,189
|
|
|
123,220
|
|
(a)
|
This column reflects the aggregate dollar amount realized by the NEO upon the exercise of the stock options by determining the difference between the market price of Ingersoll Rand’s ordinary shares at exercise and the exercise price of the stock options.
|
(b)
|
Reflects the value of the RSUs that vested on February 12, 2012, February 14, 2012 and February 16, 2012, based on the average of the high and low stock price of Ingersoll Rand’s ordinary shares on the vesting date.
|
(c)
|
Mr. Petratis was not employed by Ingersoll Rand in 2012 and therefore no historical information is available for him.
|
•
|
the Pension Plan;
|
•
|
the Supplemental Pension Plans; and
|
•
|
the EOSP or the KMP.
|
Name
|
|
Plan
Name
|
|
Number
of Years
Credited
Service
(#)
(a)
|
|
Present
Value of
Accumulated
Benefit
($)
(b)
|
|
Payments
During
Last Fiscal
Year
($)
|
||||||
D. D. Petratis (c)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
P. S. Shannon
|
|
Pension Plan
|
|
10.67
|
|
|
110,652
|
|
|
—
|
|
|||
|
|
Supplemental Pension Plan II
|
|
10.67
|
|
|
117,503
|
|
|
—
|
|
|||
|
|
EOSP
|
|
11.00
|
|
|
1,222,743
|
|
|
—
|
|
|||
T. P. Eckersley
|
|
Pension Plan
|
|
5.17
|
|
|
50,918
|
|
|
—
|
|
|||
|
|
Supplemental Pension Plan II
|
|
5.17
|
|
|
65,632
|
|
|
—
|
|
|||
|
|
KMP
|
|
5.17
|
|
|
391,777
|
|
|
—
|
|
|||
J. T. Evans
|
|
Pension Plan
|
|
12.75
|
|
|
130,771
|
|
|
—
|
|
|||
|
|
Supplemental Pension Plan II
|
|
12.75
|
|
|
94,806
|
|
|
—
|
|
|||
|
|
KMP
|
|
13.00
|
|
|
745,485
|
|
|
—
|
|
|||
B. A. Santoro
|
|
Pension Plan
|
|
16.58
|
|
|
233,355
|
|
|
—
|
|
|||
|
|
Supplemental Pension Plan I
|
|
8.58
|
|
|
5,581
|
|
|
—
|
|
|||
|
|
Supplemental Pension Plan II
|
|
16.58
|
|
|
98,140
|
|
|
—
|
|
|||
|
|
EOSP
|
|
17.00
|
|
|
1,700,974
|
|
|
—
|
|
(a)
|
Under the EOSP or the KMP, for officers covered prior to May 19, 2009, a full year of service is credited for any year in which they work at least one day. In the Pension Plan, the Supplemental Pension Plans, the EOSP and the KMP for officers first covered on or after May 19, 2009, the number of years of credited service is based on elapsed time (
i.e.
, credit is given for each month in which a participant works at least one day). The Supplemental Pension Plan II was established as a mirror plan, effective January 1, 2005. The years of credited service used for calculating benefits under (i) the Supplemental Pension Plan I are the years of credited service through December 31, 2004, and (ii) the Pension Plan, EOSP, KMP and Supplemental Pension Plan II are the years of credited service through December 31, 2012. The benefits earned under the Supplemental Pension Plan I serve as offsets to the benefits earned under the Supplemental Pension Plan II.
|
(b)
|
The amounts in this column reflect the estimated present value of each NEO’s accumulated benefit under the plans indicated. The calculations reflect the value of the benefits assuming that each NEO was fully vested under each plan. The benefits were computed as of December 31, 2012, consistent with the assumptions described in Note 11, “Pensions and Postretirement Benefits Other than Pensions,” to the annual combined financial statements included elsewhere in this Information Statement.
|
(c)
|
Mr. Petratis was not employed by Ingersoll Rand in 2012 and therefore no historical information is available for him.
|
Name
|
|
Executive
Contributions
in Last Fiscal
Year ($)
(a)
|
|
Registrant
Contributions
in Last Fiscal
Year
($)
(b)
|
|
Aggregate
Earnings in
Last Fiscal
Year ($)
(c)
|
|
Aggregate
Withdrawals/
Distributions
($)
|
|
Aggregate
Balance at
Last Fiscal
Year End
($)
|
|||||
D. D. Petratis (d)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
P. S. Shannon
|
|
|
|
|
|
|
|
|
|
|
|||||
EDCP II
|
|
—
|
|
|
—
|
|
|
282,530
|
|
|
—
|
|
|
1,067,830
|
|
Supplemental ESP
|
|
—
|
|
|
17,643
|
|
|
78,084
|
|
|
—
|
|
|
234,486
|
|
T. P. Eckersley
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
EDCP II
|
|
75,924
|
|
|
—
|
|
|
107,827
|
|
|
—
|
|
|
556,465
|
|
Supplemental ESP
|
|
—
|
|
|
17,791
|
|
|
47,125
|
|
|
—
|
|
|
146,990
|
|
J. T. Evans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EDCP II
|
|
—
|
|
|
—
|
|
|
74,787
|
|
|
—
|
|
|
200,020
|
|
Supplemental ESP
|
|
—
|
|
|
9,052
|
|
|
50,132
|
|
|
—
|
|
|
150,543
|
|
B. A. Santoro
|
|
|
|
|
|
|
|
|
|
|
|||||
EDCP I
|
|
—
|
|
|
—
|
|
|
935
|
|
|
—
|
|
|
7,995
|
|
Supplemental ESP
|
|
—
|
|
|
12,543
|
|
|
41,238
|
|
|
—
|
|
|
127,322
|
|
(a)
|
The annual deferrals (salary, AIM & PSP) are all reflected in the Salary column, the Non-Equity Incentive Plan column and the Stock Awards column, respectively of the Summary Compensation Table.
|
(b)
|
All of the amounts reflected in this column are included in the All Other Compensation column of the Summary Compensation Table and the Matching Contribution column of footnote (f) of the Summary Compensation Table.
|
(c)
|
Amounts in this column include gains and losses on investments, as well as dividends on ordinary shares or ordinary share equivalents. None of the earnings or losses reported in this column are included in the Summary Compensation Table.
|
(d)
|
Mr. Petratis was not employed by Ingersoll Rand in 2012 and therefore no historical information is available for him.
|
•
|
death, disability or retirement, RSUs and stock options continue to vest on the same basis as active employees and the stock options remain exercisable for a period of three years (or five years in the case of retirement for awards granted in 2007 and after) following termination;
|
•
|
group termination, RSUs and stock options immediately vest in the portion of the awards that would have vested within twelve months of termination and all vested stock options remain exercisable for a period of three years following termination;
|
•
|
death or disability, PSUs vest pro-rata based on the time worked during the performance period and the achievement of performance goals from the beginning of the performance period through the end of the calendar quarter in which employment terminated; and
|
•
|
retirement, group termination or job elimination, PSUs vest pro-rata based on the time worked during the performance period and the achievement of performance goals through the end of the performance period.
|
•
|
any base salary and annual bonus for a completed fiscal year that had not been paid;
|
•
|
an amount equal to the executive’s annual bonus for the last completed fiscal year pro-rated for the number of full months employed in the current fiscal year;
|
•
|
an amount equal to the executive’s base salary pro-rated for any unused vacation days;
|
•
|
a lump sum severance payment from Ingersoll Rand equal to two times the sum of:
|
▪
|
the executive’s annual salary in effect on the termination date, or, if higher, the annual salary in effect immediately prior to the reduction of the executive’s annual salary after the change in control; and
|
▪
|
the executive’s target AIM award for the year of termination or, if higher, the average of the AIM award amounts beginning three years immediately preceding the change in control and ending on the termination date; and
|
•
|
a lump sum payment equal to two times of: (a) the cash value of the target amount of the most recent PSU award; or (b) if higher, the average amounts of the last three PSU awards granted and paid to the NEO immediately preceding termination. This payment is in lieu of any rights the individual might have with respect to unvested PSU awards.
|
|
|
Retirement
($)
|
|
Involuntary
without
Cause
($)
|
|
Involuntary
with Cause
($)
|
|
Change in
Control
($)
|
|
Disability
($)
|
|
Death
($)
|
||||||
D. D. Petratis
(a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
P. S. Shannon
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Severance (b)
|
|
—
|
|
|
355,770
|
|
|
—
|
|
|
1,184,000
|
|
|
—
|
|
|
—
|
|
2012 Earned but Unpaid AIM Award(s) (c)
|
|
—
|
|
|
167,588
|
|
|
—
|
|
|
167,588
|
|
|
—
|
|
|
—
|
|
PSP Award Payout (d)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
320,000
|
|
|
501,853
|
|
|
501,853
|
|
Value of Unvested Equity Awards (e)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
420,869
|
|
|
366,490
|
|
|
366,490
|
|
Enhanced Retirement Benefits (f)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
703,424
|
|
|
—
|
|
|
—
|
|
Outplacement (g)
|
|
—
|
|
|
14,100
|
|
|
—
|
|
|
100,000
|
|
|
—
|
|
|
—
|
|
Tax Assistance (h)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,516,411
|
|
|
—
|
|
|
—
|
|
Health Benefits (i)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,901
|
|
|
—
|
|
|
—
|
|
Total
|
|
—
|
|
|
537,458
|
|
|
—
|
|
|
4,433,193
|
|
|
868,343
|
|
|
868,343
|
|
T. P. Eckersley
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Severance (b)
|
|
—
|
|
|
244,246
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
2012 Earned but Unpaid AIM Award(s) (c)
|
|
—
|
|
|
238,140
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
PSP Award Payout (d)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
476,483
|
|
|
476,722
|
|
|
476,722
|
|
Value of Unvested Equity Awards (e)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
872,490
|
|
|
872,490
|
|
|
872,490
|
|
Enhanced Retirement Benefits (f)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Outplacement (g)
|
|
—
|
|
|
14,100
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Tax Assistance (h)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Health Benefits (i)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
—
|
|
|
496,486
|
|
|
—
|
|
|
1,348,973
|
|
|
1,349,212
|
|
|
1,349,212
|
|
J. T. Evans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Severance (b)
|
|
—
|
|
|
258,595
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
2012 Earned but Unpaid AIM Award(s) (c)
|
|
—
|
|
|
206,876
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
PSP Award Payout (d)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
464,013
|
|
|
464,205
|
|
|
464,205
|
|
Value of Unvested Equity Awards (e)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
445,413
|
|
|
373,334
|
|
|
373,334
|
|
Enhanced Retirement Benefits (f)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Outplacement (g)
|
|
—
|
|
|
14,100
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Tax Assistance (h)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Health Benefits (i)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
—
|
|
|
479,571
|
|
|
—
|
|
|
909,426
|
|
|
837,539
|
|
|
837,539
|
|
|
|
Retirement
($)
|
|
Involuntary
without
Cause
($)
|
|
Involuntary
with Cause
($)
|
|
Change in
Control
($)
|
|
Disability
($)
|
|
Death
($)
|
||||||
B. A. Santoro
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Severance (b)
|
|
—
|
|
|
309,000
|
|
|
—
|
|
|
957,900
|
|
|
—
|
|
|
—
|
|
2012 Earned but Unpaid AIM Award(s) (c)
|
|
132,459
|
|
|
132,459
|
|
|
—
|
|
|
132,459
|
|
|
—
|
|
|
—
|
|
PSP Award Payout (d)
|
|
218,074
|
|
|
218,074
|
|
|
—
|
|
|
216,000
|
|
|
218,074
|
|
|
218,074
|
|
Value of Unvested Equity Awards (e)
|
|
526,022
|
|
|
526,022
|
|
|
—
|
|
|
575,833
|
|
|
526,022
|
|
|
526,022
|
|
Enhanced Retirement Benefits (f)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
986,855
|
|
|
—
|
|
|
—
|
|
Outplacement (g)
|
|
—
|
|
|
14,100
|
|
|
—
|
|
|
100,000
|
|
|
—
|
|
|
—
|
|
Tax Assistance (h)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,044,420
|
|
|
—
|
|
|
—
|
|
Health Benefits (i)
|
|
112,000
|
|
|
112,000
|
|
|
112,000
|
|
|
79,901
|
|
|
112,000
|
|
|
|
|
Total
|
|
988,555
|
|
|
1,311,655
|
|
|
112,000
|
|
|
4,093,368
|
|
|
856,096
|
|
|
744,096
|
|
(a)
|
Mr. Petratis was not employed by Ingersoll Rand in 2012 and therefore no historical information is available for him.
|
(b)
|
For the “Involuntary without Cause” column, the current severance guidelines permit payment of nine months of base salary plus an additional week for each year of service (rounded up) for Mr. Shannon and Ms. Santoro (capped at one year) and 6 months of base salary plus an additional week for each year of service (rounded up) for the other NEOs (capped at one year). Under the “Change in Control” column, for Mr. Shannon and Ms. Santoro, please see the section above, entitled Post-Employment Benefits, for a description of how severance is calculated.
|
(c)
|
For the “Involuntary without Cause” column, these amounts represent the prorated AIM award (up to target) that may be paid to the NEOs depending on the circumstances and timing of the termination. For the amounts under “Change in Control”, these amounts represent the actual award earned for the 2012 performance period, which may be more or less than the target award.
|
(d)
|
For the “Involuntary without Cause” column, this amount represents the cash value of the prorated PSU award payout to Ms. Santoro because she is retirement eligible. For the “Change in Control” column for Mr. Shannon and Ms. Santoro, these amounts represent the cash value of the PSU award payout, based on the appropriate multiple. For Messrs. Evans and Eckersley, these values represent what would be provided under the terms of the 2007 Plan, which provides a pro-rated payment for all outstanding awards. For the “Retirement”, “Disability” and “Death” columns, amounts represent the cash value of the prorated portion of the PSUs that vest upon such events. Amounts for each column are based on the closing stock price of the ordinary shares on December 31, 2012 ($47.96).
|
(e)
|
The amounts shown for “Retirement”, “Involuntary without Cause”, “Change in Control”, “Disability” and “Death” represent (i) the value of the unvested RSUs, which is calculated based on the number of unvested RSUs multiplied by the closing stock price of the ordinary shares on December 31, 2012 ($47.96), and (ii) the intrinsic value of the unvested stock options, which is calculated based on the difference between the closing stock price of the ordinary shares on December 31, 2012 ($47.96) and the relevant exercise price. However, only in the event of termination following a “Change in Control” is there accelerated vesting of unvested awards. In addition, in the event of a “Change in Control,” holders of outstanding stock options under the Stock Incentive Plan of 1998 may elect to receive a cash payment based on the difference between the highest fair market value of the shares during the 60 days prior to the event ($48.90) and the exercise price. For “Retirement”, “Involuntary without Cause”, “Disability” and “Death”, the awards do not accelerate but continue to vest on the same basis as active employees. Because Ms. Santoro is retirement eligible, she would continue to vest in stock options and RSUs after termination of employment for any reason other than cause.
|
(f)
|
In the event of a change in control of Ingersoll Rand and a termination of the NEOs who have change in control agreements, the present value of the pension benefits under the EOSP and Supplemental Pension Plans would be paid out as lump sums and benefits under the KMP would be paid out in accordance with the terms of the plan. While there is no additional benefit to the NEOs as a result of either voluntary retirement/resignation and/or involuntary resignation without cause, there are differences (based on the methodology mandated by the SEC) between the numbers that are shown in the Pension Benefits Table and those that would actually be payable to the NEO under these termination scenarios.
|
(g)
|
For the “Involuntary without Cause” column, each NEO is eligible for outplacement services for a twelve month period, not to exceed $14,100. For the “Change in Control” column, the amount represents the maximum expenses Ingersoll Rand would reimburse Mr. Shannon and Ms. Santoro for professional outplacement services.
|
(h)
|
Pursuant to the change-in-control agreements for Mr. Shannon and Ms. Santoro, if any payment or distribution by Ingersoll to these NEOs creates certain incremental taxes, they would be entitled to receive from Ingersoll a payment in an amount sufficient to place them in the same after-tax financial position as if such taxes had not been imposed.
|
(i)
|
Represents Ingersoll Rand’s cost of health and welfare coverage. The cost for “Change in Control” is a combination of continued active coverage for two years followed by retiree coverage, while the cost shown under the other scenarios is retiree coverage only.
|
•
|
each of our shareholders who we believe (based on the assumptions described below) will beneficially own more than 5% of our outstanding ordinary shares;
|
•
|
each of our directors following the spin-off;
|
•
|
each NEO following the spin-off; and
|
•
|
all of our directors and executive officers following the spin-off as a group.
|
Name
|
|
Ordinary Shares(a)
|
|
Notional Shares(b)
|
|
Options
Exercisable
Within 60
Days
(c)
|
Michael J. Chesser
|
|
|
|
|
|
|
Carla Cico
|
|
|
|
|
|
|
Kirk S. Hachigian
|
|
|
|
|
|
|
Luc Oursel
|
|
|
|
|
|
|
David D. Petratis
|
|
|
|
|
|
|
Patrick S. Shannon
|
|
|
|
|
|
|
Timothy P. Eckersley
|
|
|
|
|
|
|
John T. Evans
|
|
|
|
|
|
|
Barbara A. Santoro
|
|
|
|
|
|
|
All directors and executive officers as a group ([ ] persons)(e)
|
|
|
|
|
|
|
(a)
|
Represents (i) ordinary shares held directly; (ii) unvested shares, including any RSUs or PSUs that vest within 60 days of [ ], 2013; and (iii) ordinary shares held by the trustee under the ESP for the benefit of executive officers. No director or executive officer will beneficially own 1% or more of Allegion’s ordinary shares.
|
(b)
|
Represents ordinary shares and ordinary share equivalents notionally held under deferred compensation plans that are not distributable within 60 days of [ ], 2013.
|
(c)
|
Represents ordinary shares as to which directors and executive officers had stock options exercisable within 60 days of [ ], 2013, under Ingersoll Rand’s Incentive Stock Plans.
|
Name and Address of Beneficial Owner
|
|
Number of Ingersoll Rand
Ordinary Shares
|
|
Number of Allegion
Ordinary Shares |
|
Percentage
of Class
|
BlackRock, Inc.
40 East 52nd Street
New York, New York 10022
|
|
21,628,469 (a)
|
|
|
|
|
Trian Fund Management, L.P.
280 Park Avenue, 41st Floor
New York, New York 10017
|
|
21,072,305 (b)
|
|
|
|
|
Fidelity Management and Research (FMR) LLC
82 Devonshire Street
Boston, Massachusetts 02109
|
|
16,984,883 (c)
|
|
|
|
|
(a)
|
Information regarding BlackRock, Inc. and its stockholdings was obtained from a Schedule 13G filed with the SEC on January 30, 2013. The filing indicated that, as of December 31, 2012, BlackRock, Inc. had sole voting power and sole dispositive power as to all of such shares.
|
(b)
|
Information regarding Trian and its stockholdings was obtained from the Schedule 13D (Amendment No. 3) filed with the SEC on August 13, 2012. According to the Schedule 13D (Amendment No. 3), Trian Fund Management, L.P. shares voting and dispositive power over all or some of the shares with Trian Partners, L.P., Trian Partners Master Fund, L.P., Trian Partners Parallel Fund I, L.P., Trian Partners Strategic Investment Fund, L.P., Trian Partners Strategic Investment Fund-A, L.P., Trian Partners Strategic Co-Investment Fund-A, L.P., Trian Partners Master Fund (ERISA), L.P., Trian Fund Management GP, LLC, Trian SPV (SUB) VI, L.P., Trian SPV (SUB) VI-A, L.P., Trian IR Holdco Ltd., Nelson Peltz, Peter W. May and Edward P. Garden.
|
(c)
|
Information regarding the FMR LLC and its stockholdings was obtained from a Schedule 13G (Amendment No. 4) filed with the SEC on February 14, 2013. The filing indicated that, as of December 31, 2012, FMR LLC had sole voting power as to 2,931,576 of such shares and sole dispositive power as to 16,984,883 of such shares.
|
•
|
All of the assets and liabilities (including whether accrued, contingent or otherwise, and subject to certain exceptions) relating primarily to our business will be retained by or transferred to us or one of our subsidiaries, except as set forth in one of the other agreements described below.
|
•
|
All other assets and liabilities (including whether accrued, contingent or otherwise, and subject to certain exceptions) of Ingersoll Rand will be retained by or transferred to Ingersoll Rand or one of its subsidiaries (other than us or one of our subsidiaries), except as set forth in one of the other agreements described below and except for other limited exceptions that are not material that will result in us retaining or assuming other liabilities.
|
•
|
We will assume or retain any liabilities (including under applicable federal and state securities laws) arising under or in connection with us registering our ordinary shares with the SEC and from any disclosure documents that offer for sale the debt securities described therein.
|
•
|
Except as expressly set forth in the Separation and Distribution Agreement or any ancillary agreements, each party shall be responsible for its own internal fees, costs and expenses incurred following the distribution date, including any costs and expenses relating to such party’s disclosure documents filed following the distribution date.
|
•
|
the liabilities or alleged liabilities each party assumed or retained pursuant to the Separation and Distribution Agreement; and
|
•
|
any breach by us or Ingersoll Rand of any provision of this Agreement or any ancillary agreement unless such ancillary agreement expressly provides for separate indemnification therein.
|
•
|
amending our objects (
i.e.
, main purposes);
|
•
|
amending our Memorandum of Association and Articles of Association;
|
•
|
approving the change of our name;
|
•
|
authorizing the entering into of a guarantee or provision of security in connection with a loan, quasi-loan or credit transaction to a director or a person who is deemed to be “connected” to a director for the purposes of the Irish Companies Acts;
|
•
|
opting out of pre-emption rights on the issuance of new shares;
|
•
|
re-registration of us from a public limited company to a private company;
|
•
|
variation of class rights attaching to classes of shares;
|
•
|
purchasing our shares off-market;
|
•
|
the reduction of share capital;
|
•
|
resolving that we be wound up by the Irish courts;
|
•
|
resolving in favor of a shareholders’ voluntary winding-up;
|
•
|
re-designation of shares into different share classes; and
|
•
|
setting the re-issue price of treasury shares.
|
(a)
|
a court-approved scheme of arrangement under the Irish Companies Acts. A scheme of arrangement with shareholders requires 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 our shares. Where the holders of 80% or more of our 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 our shares were listed on the official list of the Irish Stock Exchange or another regulated stock exchange in the European Economic Area (EEA), this threshold would be increased to 90%; and
|
(c)
|
it is also possible for us to be acquired by way of a merger with an EEA incorporated company under the E.U. Cross Border Merger Directive 2005/56. Such a merger must be approved by a special resolution.
|
(a)
|
any transfer of those shares, or in the case of unissued shares any transfer of the right to be issued with shares 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 of those shares; and
|
(d)
|
no payment may be made of any sums due from us on those shares, whether in respect of capital or otherwise.
|
•
|
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 our subsidiaries with Allegion plc or with another of our subsidiaries if (1) the relevant provisions of our 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 amalgamated company immediately following the amalgamation, merger or consolidation.
|
•
|
any amalgamation, merger or consolidation of Allegion plc or one of our subsidiaries with an interested shareholder 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 an interested shareholder of all or any material part of our assets or one of our subsidiaries; and
|
•
|
any issuance or transfer of our shares upon conversion of or in exchange for the securities or assets of any interested shareholder, or with any company that is, or would be after such merger or consolidation, an affiliate or associate of an interested shareholder.
|
•
|
in the event of an offer, all classes of shareholders of the target company should be afforded equivalent treatment 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 make an 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 deny shareholders 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 the securities 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 a recognition 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 company must divert its attention to resist the offer; and
|
•
|
acquisitions of securities (whether such acquisition is to be effected by one transaction or a series of transactions) 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 a shareholders’ holding to or above 15% of the issued voting shares (but less than 30%) is prohibited, subject to certain exemptions.
|
(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 vote in 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 least partially implemented or is in the ordinary course of business.
|
|
|
|
|
|
|
|
|
|
|
|
|
Allegion
Combined Statements of Comprehensive Income
In millions
|
||||||||||||
For the years ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
Net revenues
|
|
$
|
2,046.6
|
|
|
$
|
2,021.2
|
|
|
$
|
1,967.7
|
|
Cost of goods sold
|
|
(1,220.6
|
)
|
|
(1,211.4
|
)
|
|
(1,201.7
|
)
|
|||
Selling and administrative expenses
|
|
(457.4
|
)
|
|
(450.8
|
)
|
|
(441.0
|
)
|
|||
Operating income
|
|
368.6
|
|
|
359.0
|
|
|
325.0
|
|
|||
Interest expense
|
|
(1.5
|
)
|
|
(1.4
|
)
|
|
(1.8
|
)
|
|||
Other, net
|
|
(3.2
|
)
|
|
4.6
|
|
|
3.5
|
|
|||
Earnings before income taxes
|
|
363.9
|
|
|
362.2
|
|
|
326.7
|
|
|||
Provision for income taxes
|
|
(135.9
|
)
|
|
(130.5
|
)
|
|
(125.7
|
)
|
|||
Earnings from continuing operations
|
|
228.0
|
|
|
231.7
|
|
|
201.0
|
|
|||
Discontinued operations, net of tax
|
|
(2.7
|
)
|
|
(7.3
|
)
|
|
(2.5
|
)
|
|||
Net earnings
|
|
225.3
|
|
|
224.4
|
|
|
198.5
|
|
|||
Less: Net earnings attributable to noncontrolling interests
|
|
(5.7
|
)
|
|
(6.3
|
)
|
|
(6.7
|
)
|
|||
Net earnings attributable to Allegion
|
|
$
|
219.6
|
|
|
$
|
218.1
|
|
|
$
|
191.8
|
|
Amounts attributable to Allegion:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
222.3
|
|
|
$
|
225.4
|
|
|
$
|
194.3
|
|
Discontinued operations
|
|
(2.7
|
)
|
|
(7.3
|
)
|
|
(2.5
|
)
|
|||
Net earnings
|
|
$
|
219.6
|
|
|
$
|
218.1
|
|
|
$
|
191.8
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
Allegion
Combined Statements of Comprehensive Income (continued)
In millions
|
||||||||||||
For the years ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
Net earnings
|
|
$
|
225.3
|
|
|
$
|
224.4
|
|
|
$
|
198.5
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
||||||
Currency translation
|
|
21.4
|
|
|
(17.9
|
)
|
|
(27.3
|
)
|
|||
Cash flow hedges and marketable securities
|
|
|
|
|
|
|
||||||
Unrealized net gains (losses) arising during period
|
|
5.3
|
|
|
(3.5
|
)
|
|
1.6
|
|
|||
Net (gains) losses reclassified into earnings
|
|
0.2
|
|
|
1.3
|
|
|
2.3
|
|
|||
Tax (expense) benefit
|
|
0.2
|
|
|
(0.4
|
)
|
|
(0.3
|
)
|
|||
Total cash flow hedges and marketable securities, net of tax
|
|
5.7
|
|
|
(2.6
|
)
|
|
3.6
|
|
|||
Pension and OPEB adjustments:
|
|
|
|
|
|
|
||||||
Prior service gains (costs) for the period
|
|
13.8
|
|
|
—
|
|
|
(0.2
|
)
|
|||
Net actuarial gains (losses) for the period
|
|
(23.0
|
)
|
|
(5.5
|
)
|
|
20.3
|
|
|||
Amortization reclassified into earnings
|
|
5.0
|
|
|
5.7
|
|
|
7.7
|
|
|||
Settlements/curtailments reclassified to earnings
|
|
2.7
|
|
|
—
|
|
|
—
|
|
|||
Currency translation and other
|
|
(1.2
|
)
|
|
(0.8
|
)
|
|
2.9
|
|
|||
Tax (expense) benefit
|
|
(2.5
|
)
|
|
1.9
|
|
|
(8.8
|
)
|
|||
Total pension and OPEB adjustments, net of tax
|
|
(5.2
|
)
|
|
1.3
|
|
|
21.9
|
|
|||
Other comprehensive income (loss), net of tax
|
|
21.9
|
|
|
(19.2
|
)
|
|
(1.8
|
)
|
|||
Total comprehensive income (loss), net of tax
|
|
$
|
247.2
|
|
|
$
|
205.2
|
|
|
$
|
196.7
|
|
Less: Total comprehensive (income) loss attributable to noncontrolling interests
|
|
(6.2
|
)
|
|
(8.2
|
)
|
|
(14.2
|
)
|
|||
Total comprehensive income (loss) attributable to Allegion
|
|
$
|
241.0
|
|
|
$
|
197.0
|
|
|
$
|
182.5
|
|
December 31,
|
|
2012
|
|
2011
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
317.5
|
|
|
$
|
376.8
|
|
Accounts receivable from third parties
|
|
288.2
|
|
|
287.4
|
|
||
Costs in excess of billings on uncompleted contracts
|
|
93.7
|
|
|
90.7
|
|
||
Inventories
|
|
166.4
|
|
|
163.8
|
|
||
Deferred taxes and current tax receivable
|
|
37.2
|
|
|
34.9
|
|
||
Other current assets
|
|
6.9
|
|
|
8.1
|
|
||
Total current assets
|
|
909.9
|
|
|
961.7
|
|
||
Property, plant and equipment, net
|
|
232.0
|
|
|
244.6
|
|
||
Goodwill
|
|
637.9
|
|
|
630.9
|
|
||
Intangible assets, net
|
|
150.5
|
|
|
157.5
|
|
||
Other noncurrent assets
|
|
53.5
|
|
|
41.5
|
|
||
Total assets
|
|
$
|
1,983.8
|
|
|
$
|
2,036.2
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
227.2
|
|
|
$
|
218.3
|
|
Accrued compensation and benefits
|
|
60.5
|
|
|
63.1
|
|
||
Accrued expenses and other current liabilities
|
|
92.8
|
|
|
91.7
|
|
||
Short-term borrowings and current maturities of long-term debt
|
|
2.2
|
|
|
1.4
|
|
||
Total current liabilities
|
|
382.7
|
|
|
374.5
|
|
||
Long-term debt
|
|
2.8
|
|
|
3.5
|
|
||
Postemployment and other benefit liabilities
|
|
121.5
|
|
|
112.2
|
|
||
Deferred and noncurrent income taxes
|
|
92.0
|
|
|
92.4
|
|
||
Other noncurrent liabilities
|
|
18.6
|
|
|
17.8
|
|
||
Total liabilities
|
|
617.6
|
|
|
600.4
|
|
||
Equity:
|
|
|
|
|
||||
Parent company investment
|
|
1,350.9
|
|
|
1,442.9
|
|
||
Accumulated other comprehensive income (loss)
|
|
(7.7
|
)
|
|
(29.1
|
)
|
||
Total Parent Company equity
|
|
1,343.2
|
|
|
1,413.8
|
|
||
Noncontrolling interests
|
|
23.0
|
|
|
22.0
|
|
||
Total equity
|
|
1,366.2
|
|
|
1,435.8
|
|
||
Total liabilities and equity
|
|
$
|
1,983.8
|
|
|
$
|
2,036.2
|
|
Allegion
Combined Statements of Equity
In millions
|
||||||||||||||||
|
|
|
|
Parent Company Equity
|
|
|
||||||||||
|
|
Total equity
|
|
Parent company’s net investment
|
|
Accumulated other
comprehensive
income
(loss)
|
|
Noncontrolling
Interest
|
||||||||
|
|
|
||||||||||||||
Balance at December 31, 2009
|
|
$
|
1,399.1
|
|
|
$
|
1,377.5
|
|
|
$
|
1.3
|
|
|
$
|
20.3
|
|
Net earnings
|
|
198.5
|
|
|
191.8
|
|
|
—
|
|
|
6.7
|
|
||||
Other comprehensive income (loss)
|
|
(1.8
|
)
|
|
—
|
|
|
(9.3
|
)
|
|
7.5
|
|
||||
Acquisition/divestiture of noncontrolling interests
|
|
(3.0
|
)
|
|
—
|
|
|
—
|
|
|
(3.0
|
)
|
||||
Dividends declared to noncontrolling interest
|
|
(6.4
|
)
|
|
—
|
|
|
—
|
|
|
(6.4
|
)
|
||||
Distribution/contribution to/from Parent Company
|
|
(103.9
|
)
|
|
(103.9
|
)
|
|
—
|
|
|
—
|
|
||||
Other
|
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
||||
Balance at December 31, 2010
|
|
$
|
1,481.6
|
|
|
$
|
1,465.4
|
|
|
$
|
(8.0
|
)
|
|
$
|
24.2
|
|
Net earnings
|
|
224.4
|
|
|
218.1
|
|
|
—
|
|
|
6.3
|
|
||||
Other comprehensive income (loss)
|
|
(19.2
|
)
|
|
—
|
|
|
(21.1
|
)
|
|
1.9
|
|
||||
Dividends declared to noncontrolling interests
|
|
(9.3
|
)
|
|
—
|
|
|
—
|
|
|
(9.3
|
)
|
||||
Distribution/contribution to/from Parent Company
|
|
(240.6
|
)
|
|
(240.6
|
)
|
|
—
|
|
|
—
|
|
||||
Other
|
|
(1.1
|
)
|
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
||||
Balance at December 31, 2011
|
|
$
|
1,435.8
|
|
|
$
|
1,442.9
|
|
|
$
|
(29.1
|
)
|
|
$
|
22.0
|
|
Net earnings
|
|
225.3
|
|
|
219.6
|
|
|
—
|
|
|
5.7
|
|
||||
Other comprehensive income (loss)
|
|
21.9
|
|
|
—
|
|
|
21.4
|
|
|
0.5
|
|
||||
Dividends declared to noncontrolling interests
|
|
(5.2
|
)
|
|
—
|
|
|
—
|
|
|
(5.2
|
)
|
||||
Distribution/contribution to/from Parent Company
|
|
(311.6
|
)
|
|
(311.6
|
)
|
|
—
|
|
|
—
|
|
||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at December 31, 2012
|
|
$
|
1,366.2
|
|
|
$
|
1,350.9
|
|
|
$
|
(7.7
|
)
|
|
$
|
23.0
|
|
Allegion
Combined Statements of Cash Flows
In millions
|
||||||||||||
For the years ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net earnings
|
|
$
|
225.3
|
|
|
$
|
224.4
|
|
|
$
|
198.5
|
|
(Income) loss from discontinued operations, net of tax
|
|
2.7
|
|
|
7.3
|
|
|
2.5
|
|
|||
Adjustments to arrive at net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
43.8
|
|
|
46.0
|
|
|
47.3
|
|
|||
(Gain) loss on sale of property, plant and equipment
|
|
0.1
|
|
|
2.0
|
|
|
0.4
|
|
|||
Deferred income taxes
|
|
(3.9
|
)
|
|
0.8
|
|
|
14.1
|
|
|||
Other items
|
|
12.8
|
|
|
9.5
|
|
|
(27.5
|
)
|
|||
Changes in other assets and liabilities
|
|
|
|
|
|
|
||||||
(Increase) decrease in:
|
|
|
|
|
|
|
||||||
Accounts and notes receivable
|
|
1.9
|
|
|
(12.0
|
)
|
|
(23.7
|
)
|
|||
Inventories
|
|
(0.6
|
)
|
|
(12.9
|
)
|
|
7.2
|
|
|||
Other current and noncurrent assets
|
|
(14.6
|
)
|
|
(22.3
|
)
|
|
(1.7
|
)
|
|||
Increase (decrease) in:
|
|
|
|
|
|
|
||||||
Accounts payable
|
|
8.0
|
|
|
25.5
|
|
|
3.0
|
|
|||
Other current and noncurrent liabilities
|
|
(3.6
|
)
|
|
4.5
|
|
|
(12.1
|
)
|
|||
Net cash (used in) provided by continuing operating activities
|
|
271.9
|
|
|
272.8
|
|
|
208.0
|
|
|||
Net cash (used in) provided by discontinued operating activities
|
|
(2.7
|
)
|
|
(7.3
|
)
|
|
(0.2
|
)
|
|||
Net cash provided by (used in) operating activities
|
|
269.2
|
|
|
265.5
|
|
|
207.8
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Capital expenditures
|
|
(19.6
|
)
|
|
(25.5
|
)
|
|
(21.8
|
)
|
|||
Proceeds from sale of property, plant and equipment
|
|
2.1
|
|
|
2.8
|
|
|
1.7
|
|
|||
Proceeds from business dispositions, net of cash sold
|
|
—
|
|
|
19.2
|
|
|
—
|
|
|||
Net cash (used in) provided by continuing investing activities
|
|
(17.5
|
)
|
|
(3.5
|
)
|
|
(20.1
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Other short-term borrowings, net
|
|
(1.0
|
)
|
|
(2.5
|
)
|
|
7.2
|
|
|||
Payments of long-term debt
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|||
Net proceeds (repayments) in debt
|
|
(1.1
|
)
|
|
(2.6
|
)
|
|
7.0
|
|
|||
Dividends paid to noncontrolling interests
|
|
(5.2
|
)
|
|
(9.3
|
)
|
|
(6.4
|
)
|
|||
Acquisition/divestiture of noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(3.0
|
)
|
|||
Net transfers from (to) Parent and affiliates
|
|
(311.6
|
)
|
|
(240.6
|
)
|
|
(103.9
|
)
|
|||
Other, net
|
|
—
|
|
|
(1.1
|
)
|
|
—
|
|
|||
Net cash (used in) provided by continuing financing activities
|
|
(317.9
|
)
|
|
(253.6
|
)
|
|
(106.3
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
6.9
|
|
|
(9.9
|
)
|
|
1.8
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
(59.3
|
)
|
|
(1.5
|
)
|
|
83.2
|
|
|||
Cash and cash equivalents – beginning of period
|
|
376.8
|
|
|
378.3
|
|
|
295.1
|
|
|||
Cash and cash equivalents – end of period
|
|
$
|
317.5
|
|
|
$
|
376.8
|
|
|
$
|
378.3
|
|
Cash paid during the year for:
|
|
|
|
|
|
|
||||||
Interest, net of amounts capitalized
|
|
$
|
1.2
|
|
|
$
|
1.2
|
|
|
$
|
1.1
|
|
Buildings
|
10
|
to
|
50
|
years
|
Machinery and equipment
|
2
|
to
|
12
|
years
|
Software
|
2
|
to
|
7
|
years
|
Customer relationships
|
25
|
years
|
Trademarks
|
25
|
years
|
Completed technology/patents
|
10
|
years
|
Other
|
25
|
years
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Centrally managed service costs
|
|
$
|
94.8
|
|
|
$
|
86.7
|
|
|
$
|
84.8
|
|
Historical Ingersoll Rand corporate overhead allocations
|
|
53.5
|
|
|
52.0
|
|
|
48.8
|
|
|||
Incremental corporate costs not previously allocated to businesses
|
|
28.4
|
|
|
21.8
|
|
|
24.2
|
|
|||
Total
|
|
$
|
176.7
|
|
|
$
|
160.5
|
|
|
$
|
157.8
|
|
|
|
2012
|
|
2011
|
||||||||||||||||||||
In millions
|
|
Amortized cost or cost
|
|
Unrealized
gains
|
|
Fair
value
|
|
Amortized cost or cost
|
|
Unrealized
gains
|
|
Fair
value
|
||||||||||||
Equity securities
|
|
$
|
5.5
|
|
|
$
|
11.2
|
|
|
$
|
16.7
|
|
|
$
|
5.7
|
|
|
$
|
4.7
|
|
|
$
|
10.4
|
|
In millions
|
|
2012
|
|
2011
|
||||
Raw materials
|
|
$
|
80.4
|
|
|
$
|
79.0
|
|
Work-in-process
|
|
22.2
|
|
|
17.1
|
|
||
Finished goods
|
|
95.5
|
|
|
98.6
|
|
||
|
|
198.1
|
|
|
194.7
|
|
||
LIFO reserve
|
|
(31.7
|
)
|
|
(30.9
|
)
|
||
Total
|
|
$
|
166.4
|
|
|
$
|
163.8
|
|
In millions
|
|
2012
|
|
2011
|
||||
Land
|
|
$
|
16.5
|
|
|
$
|
16.2
|
|
Buildings
|
|
132.7
|
|
|
129.0
|
|
||
Machinery and equipment
|
|
356.3
|
|
|
343.1
|
|
||
Software
|
|
81.3
|
|
|
69.7
|
|
||
|
|
586.8
|
|
|
558.0
|
|
||
Accumulated depreciation
|
|
(354.8
|
)
|
|
(313.4
|
)
|
||
Total
|
|
$
|
232.0
|
|
|
$
|
244.6
|
|
In millions
|
|
Americas
|
|
EMEIA
|
|
Asia Pacific
|
|
Total
|
||||||||
December 31, 2010 (gross)
|
|
$
|
336.4
|
|
|
$
|
536.3
|
|
|
$
|
105.1
|
|
|
$
|
977.8
|
|
Acquisitions and adjustments
|
|
2.6
|
|
|
0.3
|
|
|
—
|
|
|
2.9
|
|
||||
Currency translation
|
|
—
|
|
|
(4.3
|
)
|
|
2.4
|
|
|
(1.9
|
)
|
||||
December 31, 2011 (gross)
|
|
339.0
|
|
|
532.3
|
|
|
107.5
|
|
|
978.8
|
|
||||
Acquisitions and adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Currency translation
|
|
—
|
|
|
4.4
|
|
|
2.6
|
|
|
7.0
|
|
||||
December 31, 2012 (gross)
|
|
339.0
|
|
|
536.7
|
|
|
110.1
|
|
|
985.8
|
|
||||
Accumulated impairment *
|
|
—
|
|
|
(341.0
|
)
|
|
(6.9
|
)
|
|
(347.9
|
)
|
||||
Goodwill (net)
|
|
$
|
339.0
|
|
|
$
|
195.7
|
|
|
$
|
103.2
|
|
|
$
|
637.9
|
|
|
|
2012
|
|
2011
|
||||||||||||||||||||
In millions
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
||||||||||||
Completed technologies/patents
|
|
$
|
24.1
|
|
|
$
|
(21.7
|
)
|
|
$
|
2.4
|
|
|
$
|
23.4
|
|
|
$
|
(20.2
|
)
|
|
$
|
3.2
|
|
Customer relationships
|
|
103.7
|
|
|
(32.9
|
)
|
|
70.8
|
|
|
104.5
|
|
|
(31.1
|
)
|
|
73.4
|
|
||||||
Trademarks (finite-lived)
|
|
97.4
|
|
|
(31.5
|
)
|
|
65.9
|
|
|
95.4
|
|
|
(27.0
|
)
|
|
68.4
|
|
||||||
Other
|
|
15.8
|
|
|
(13.4
|
)
|
|
2.4
|
|
|
16.2
|
|
|
(12.7
|
)
|
|
3.5
|
|
||||||
Total finite-lived intangible assets
|
|
241.0
|
|
|
$
|
(99.5
|
)
|
|
141.5
|
|
|
239.5
|
|
|
$
|
(91.0
|
)
|
|
148.5
|
|
||||
Trademarks (indefinite-lived)
|
|
9.0
|
|
|
|
|
9.0
|
|
|
9.0
|
|
|
|
|
9.0
|
|
||||||||
Total
|
|
$
|
250.0
|
|
|
|
|
$
|
150.5
|
|
|
$
|
248.5
|
|
|
|
|
$
|
157.5
|
|
In millions
|
|
2012
|
|
2011
|
||||
Current maturities of long-term debt, including capital leases
|
|
$
|
0.9
|
|
|
$
|
1.4
|
|
Short-term borrowings
|
|
1.3
|
|
|
—
|
|
||
Total
|
|
$
|
2.2
|
|
|
$
|
1.4
|
|
In millions
|
|
2012
|
|
2011
|
||||
Long-term debt, including capital leases, at end-of-year average interest rates of 1.7% in 2012 and 2.3% in 2011, maturing in various amounts to 2016
|
|
$
|
2.8
|
|
|
$
|
3.5
|
|
In millions
|
|
||
2013
|
$
|
0.9
|
|
2014
|
0.8
|
|
|
2015
|
0.9
|
|
|
2016
|
1.1
|
|
|
Thereafter
|
—
|
|
|
Total
|
$
|
3.7
|
|
|
|
Asset derivatives
|
|
Liability derivatives
|
||||||||||||
In millions
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Currency derivatives designated as hedges
|
|
$
|
0.1
|
|
|
$
|
0.8
|
|
|
$
|
0.3
|
|
|
$
|
0.1
|
|
|
|
NON-U.S.
|
||||||||||
In millions
|
|
Prior service cost
|
|
Net actuarial losses
|
|
Total
|
||||||
December 31, 2011
|
|
$
|
(0.5
|
)
|
|
$
|
(44.1
|
)
|
|
$
|
(44.6
|
)
|
Current year changes recorded to Accumulated other comprehensive income (loss)
|
|
—
|
|
|
(24.3
|
)
|
|
(24.3
|
)
|
|||
Amortization reclassified to earnings
|
|
—
|
|
|
1.7
|
|
|
1.7
|
|
|||
Settlements/curtailments reclassified to earnings
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
|||
Currency translation and other
|
|
—
|
|
|
(2.6
|
)
|
|
(2.6
|
)
|
|||
December 31, 2012
|
|
$
|
(0.5
|
)
|
|
$
|
(69.0
|
)
|
|
$
|
(69.5
|
)
|
Benefit obligations at December 31,
|
|
2012
|
|
2011
|
||
Discount rate:
|
|
|
|
|
||
U.S. plans
|
|
3.75
|
%
|
|
4.25
|
%
|
Non-U.S. plans
|
|
4.50
|
%
|
|
5.25
|
%
|
Rate of compensation increase:
|
|
|
|
|
||
U.S. plans
|
|
4.00
|
%
|
|
4.00
|
%
|
Non-U.S. plans
|
|
4.25
|
%
|
|
4.25
|
%
|
In millions
|
U.S.
|
|
NON-U.S.
|
||||
2013
|
$
|
13.3
|
|
|
$
|
9.6
|
|
2014
|
13.5
|
|
|
10.9
|
|
||
2015
|
13.5
|
|
|
10.7
|
|
||
2016
|
15.4
|
|
|
10.9
|
|
||
2017
|
14.9
|
|
|
11.1
|
|
||
2018 - 2022
|
88.7
|
|
|
63.5
|
|
|
|
NON-U.S.
|
||||||||||
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Service cost
|
|
$
|
3.1
|
|
|
$
|
2.9
|
|
|
$
|
2.3
|
|
Interest cost
|
|
10.3
|
|
|
11.1
|
|
|
11.4
|
|
|||
Expected return on plan assets
|
|
(9.7
|
)
|
|
(10.7
|
)
|
|
(10.0
|
)
|
|||
Net amortization of:
|
|
|
|
|
|
|
||||||
Prior service costs
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|||
Transition amount
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Plan net actuarial losses
|
|
1.7
|
|
|
2.0
|
|
|
4.0
|
|
|||
Net periodic pension benefit cost
|
|
5.4
|
|
|
5.4
|
|
|
7.8
|
|
|||
Net curtailment and settlement (gains) losses
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|||
Net periodic pension benefit cost after net curtailment and settlement (gains) losses
|
|
$
|
5.7
|
|
|
$
|
5.4
|
|
|
$
|
7.8
|
|
Amounts recorded in continuing operations
|
|
$
|
5.7
|
|
|
$
|
5.4
|
|
|
$
|
7.8
|
|
Net periodic pension cost for the year ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
|||
Discount rate:
|
|
|
|
|
|
|
|||
U.S. plans
|
|
|
|
|
|
|
|||
For the period January 1 to June 7
|
|
4.25
|
%
|
|
5.00
|
%
|
|
5.75
|
%
|
For the period June 8 to December 31
|
|
4.00
|
%
|
|
5.00
|
%
|
|
5.75
|
%
|
Non-U.S. plans
|
|
5.25
|
%
|
|
5.50
|
%
|
|
5.50
|
%
|
Rate of compensation increase:
|
|
|
|
|
|
|
|||
U.S. plans
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
Non-U.S. plans
|
|
4.25
|
%
|
|
4.75
|
%
|
|
4.75
|
%
|
Expected return on plan assets:
|
|
|
|
|
|
|
|||
U.S. plans
|
|
5.25
|
%
|
|
7.25
|
%
|
|
7.75
|
%
|
Non-U.S. plans
|
|
5.75
|
%
|
|
6.50
|
%
|
|
7.25
|
%
|
|
|
December 31, 2012
|
|
|
||||||||||||
|
|
Fair value measurements
|
|
Total
fair value
|
||||||||||||
In millions
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
2.4
|
|
|
$
|
—
|
|
|
$
|
2.4
|
|
Commingled funds – equity specialty
(a)
|
|
—
|
|
|
43.4
|
|
|
—
|
|
|
43.4
|
|
||||
Fixed income investments:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government and agency obligations
|
|
—
|
|
|
83.9
|
|
|
—
|
|
|
83.9
|
|
||||
Corporate and non-U.S. bonds
(b)
|
|
—
|
|
|
92.3
|
|
|
—
|
|
|
92.3
|
|
||||
Asset-backed and mortgage-backed securities
|
|
—
|
|
|
4.5
|
|
|
—
|
|
|
4.5
|
|
||||
Other fixed income
(c)
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
||||
|
|
—
|
|
|
180.7
|
|
|
0.3
|
|
|
181.0
|
|
||||
Real estate
(d)
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|
2.7
|
|
||||
Total assets at fair value
|
|
$
|
—
|
|
|
$
|
226.5
|
|
|
$
|
3.0
|
|
|
$
|
229.5
|
|
Receivables and payables, net
|
|
|
|
|
|
|
|
1.4
|
|
|||||||
Net assets available for benefits
|
|
|
|
|
|
|
|
$
|
230.9
|
|
|
|
December 31, 2011
|
|
|
||||||||||||
|
|
Fair value measurements
|
|
Total
fair value
|
||||||||||||
In millions
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
3.7
|
|
|
$
|
—
|
|
|
$
|
3.7
|
|
Commingled funds – equity specialty
(a)
|
|
—
|
|
|
43.4
|
|
|
—
|
|
|
43.4
|
|
||||
Fixed income investments:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government and agency obligations
|
|
—
|
|
|
95.1
|
|
|
—
|
|
|
95.1
|
|
||||
Corporate and non-U.S. bonds
(b)
|
|
—
|
|
|
76.8
|
|
|
—
|
|
|
76.8
|
|
||||
Asset-backed and mortgage-backed securities
|
|
—
|
|
|
4.5
|
|
|
—
|
|
|
4.5
|
|
||||
Other fixed income
(c)
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
||||
|
|
—
|
|
|
176.4
|
|
|
0.3
|
|
|
176.7
|
|
||||
Real estate
(d)
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|
2.7
|
|
||||
Total assets at fair value
|
|
$
|
—
|
|
|
$
|
223.5
|
|
|
$
|
3.0
|
|
|
$
|
226.5
|
|
Receivables and payables, net
|
|
|
|
|
|
|
|
(0.4
|
)
|
|||||||
Net assets available for benefits
|
|
|
|
|
|
|
|
$
|
226.1
|
|
(a)
|
This class includes commingled and registered mutual funds that focus on equity investments. It includes both indexed and actively managed funds.
|
(b)
|
This class includes state and municipal bonds.
|
(c)
|
This class includes group annuity and guaranteed interest contracts as well as other miscellaneous fixed income securities.
|
(d)
|
This class includes several private equity funds that invest in real estate. It includes both direct investment funds and funds-of-funds.
|
|
|
December 31, 2012
|
|
|
||||||||||||
|
|
Fair value measurements
|
|
Total
fair value
|
||||||||||||
In millions
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Cash and cash equivalents
|
|
$
|
1.5
|
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
2.3
|
|
Commingled funds – equity specialty
(a)
|
|
—
|
|
|
68.4
|
|
|
—
|
|
|
68.4
|
|
||||
Commingled funds – fixed income specialty
(b)
|
|
—
|
|
|
113.2
|
|
|
—
|
|
|
113.2
|
|
||||
Real estate
(c)
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|
1.6
|
|
||||
Total assets at fair value
|
|
$
|
1.5
|
|
|
$
|
182.4
|
|
|
$
|
1.6
|
|
|
$
|
185.5
|
|
Receivables and payables, net
|
|
|
|
|
|
|
|
(2.1
|
)
|
|||||||
Net assets available for benefits
|
|
|
|
|
|
|
|
$
|
183.4
|
|
|
|
December 31, 2011
|
|
|
||||||||||||
|
|
Fair value measurements
|
|
Total
fair value
|
||||||||||||
In millions
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Cash and cash equivalents
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
Commingled funds – equity specialty
(a)
|
|
—
|
|
|
59.2
|
|
|
—
|
|
|
59.2
|
|
||||
Commingled funds – fixed income specialty
(b)
|
|
—
|
|
|
105.1
|
|
|
—
|
|
|
105.1
|
|
||||
Real estate
(c)
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|
1.5
|
|
||||
Other
(d)
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
0.5
|
|
||||
Total assets at fair value
|
|
$
|
0.3
|
|
|
$
|
164.3
|
|
|
$
|
2.0
|
|
|
$
|
166.6
|
|
Receivables and payables, net
|
|
|
|
|
|
|
|
0.3
|
|
|||||||
Net assets available for benefits
|
|
|
|
|
|
|
|
$
|
166.9
|
|
(a)
|
This class includes commingled and registered mutual funds that focus on equity investments. It includes both indexed and actively managed funds.
|
(b)
|
This class comprises commingled and registered mutual funds that focus on fixed income securities.
|
(c)
|
This class includes several private equity funds that invest in real estate. It includes both direct investment funds and funds-of-funds.
|
(d)
|
This investment comprises the Company’s non-significant pension plan assets. It mostly includes insurance contracts.
|
In millions
|
|
2012
|
|
2011
|
||||
Change in benefit obligations:
|
|
|
|
|
||||
Benefit obligation at beginning of year
|
|
$
|
28.9
|
|
|
$
|
34.3
|
|
Service cost
|
|
0.3
|
|
|
0.8
|
|
||
Interest cost
|
|
0.7
|
|
|
1.3
|
|
||
Plan participants’ contributions
|
|
0.3
|
|
|
0.3
|
|
||
Actuarial (gains) losses
|
|
3.1
|
|
|
(6.5
|
)
|
||
Benefits paid, net of Medicare Part D subsidy *
|
|
(1.3
|
)
|
|
(1.3
|
)
|
||
Amendments
|
|
(14.0
|
)
|
|
—
|
|
||
Benefit obligations at end of year
|
|
$
|
18.0
|
|
|
$
|
28.9
|
|
In millions
|
|
Prior service gains
|
|
Net actuarial losses
|
|
Total
|
||||||
Balance at December 31, 2011
|
|
$
|
0.1
|
|
|
$
|
(3.7
|
)
|
|
$
|
(3.6
|
)
|
Current year changes recorded to Accumulated other comprehensive income (loss)
|
|
14.0
|
|
|
(3.1
|
)
|
|
10.9
|
|
|||
Amortization reclassified to earnings
|
|
(2.0
|
)
|
|
0.2
|
|
|
(1.8
|
)
|
|||
Balance at December 31, 2012
|
|
$
|
12.1
|
|
|
$
|
(6.6
|
)
|
|
$
|
5.5
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Service cost
|
|
$
|
0.3
|
|
|
$
|
0.8
|
|
|
$
|
1.0
|
|
Interest cost
|
|
0.7
|
|
|
1.3
|
|
|
1.8
|
|
|||
Net amortization of:
|
|
|
|
|
|
|
||||||
Prior service gains
|
|
(2.0
|
)
|
|
(0.4
|
)
|
|
(0.5
|
)
|
|||
Net actuarial losses
|
|
0.2
|
|
|
—
|
|
|
0.6
|
|
|||
Net periodic postretirement benefit cost
|
|
(0.8
|
)
|
|
1.7
|
|
|
2.9
|
|
|||
Net curtailment and settlement (gains) losses
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net periodic postretirement benefit (income) cost after net curtailment and settlement (gains) losses
|
|
$
|
(0.8
|
)
|
|
$
|
1.7
|
|
|
$
|
2.9
|
|
Amounts recorded in continuing operations
|
|
$
|
(0.8
|
)
|
|
$
|
1.7
|
|
|
$
|
2.9
|
|
Assumptions:
|
|
2012
|
|
2011
|
|
2010
|
|||
Weighted-average discount rate assumption to determine:
|
|
|
|
|
|
|
|||
Benefit obligations at December 31
|
|
3.25
|
%
|
|
4.00
|
%
|
|
5.00
|
%
|
Net periodic benefit cost
|
|
|
|
|
|
|
|||
For the period January 1 to January 31
|
|
4.00
|
%
|
|
5.00
|
%
|
|
5.50
|
%
|
For the period February 1 to December 31
|
|
3.75
|
%
|
|
5.00
|
%
|
|
5.50
|
%
|
Assumed health-care cost trend rates at December 31:
|
|
|
|
|
|
|
|||
Current year medical inflation
|
|
8.05
|
%
|
|
8.45
|
%
|
|
8.85
|
%
|
Ultimate inflation rate
|
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
Year that the rate reaches the ultimate trend rate
|
|
2021
|
|
|
2021
|
|
|
2021
|
|
In millions
|
|
1%
Increase
|
|
1%
Decrease
|
||
Effect on postretirement benefit obligation
|
|
0.2
|
|
|
(0.2
|
)
|
In millions
|
|
||
2013
|
$
|
1.0
|
|
2014
|
1.2
|
|
|
2015
|
1.3
|
|
|
2016
|
1.4
|
|
|
2017
|
1.4
|
|
|
2018 - 2022
|
7.7
|
|
•
|
Level 1 – Inputs based on quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 – Inputs other than Level 1 quoted prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.
|
•
|
Level 3 – Unobservable inputs based on little or no market activity and that are significant to the fair value of the assets and liabilities.
|
|
|||||||||||||||
|
Fair value measurements
|
|
Total
fair value |
||||||||||||
In millions
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
|
|||||||||
Recurring fair value measurements
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
$
|
16.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16.7
|
|
Derivative instruments
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Total asset recurring fair value measurements
|
$
|
16.7
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
16.8
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
Total liability recurring fair value measurements
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
|||||||||||||||
|
Fair value measurements
|
|
Total
fair value |
||||||||||||
In millions
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
|
|||||||||
Recurring fair value measurements
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
$
|
10.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10.4
|
|
Derivative instruments
|
—
|
|
|
0.8
|
|
|
—
|
|
|
0.8
|
|
||||
Total asset recurring fair value measurements
|
$
|
10.4
|
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
11.2
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Total liability recurring fair value measurements
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
•
|
Marketable securities
– These securities include investments in publicly-traded stock of non-U.S. companies held by non-U.S. subsidiaries of the Company. The fair value is obtained for the securities based on observable market prices quoted on public stock exchanges.
|
•
|
Derivative instruments
– These instruments include forward foreign currency contracts. The fair value of the derivative instruments are determined based on a pricing model that uses spot rates and forward prices from actively quoted currency markets that are readily accessible and observable.
|
In millions
|
|
Cash flow hedges and marketable securities
|
|
Pension and OPEB Items
|
|
Foreign Currency Items
|
|
Total
|
||||||||
December 31, 2010
|
|
$
|
7.8
|
|
|
$
|
(91.8
|
)
|
|
$
|
76.0
|
|
|
$
|
(8.0
|
)
|
Other comprehensive income (loss), net of tax
|
|
(2.6
|
)
|
|
1.3
|
|
|
(19.8
|
)
|
|
(21.1
|
)
|
||||
December 31, 2011
|
|
$
|
5.2
|
|
|
$
|
(90.5
|
)
|
|
$
|
56.2
|
|
|
$
|
(29.1
|
)
|
Other comprehensive income (loss), net of tax
|
|
5.7
|
|
|
(5.2
|
)
|
|
20.9
|
|
|
21.4
|
|
||||
December 31, 2012
|
|
$
|
10.9
|
|
|
$
|
(95.7
|
)
|
|
$
|
77.1
|
|
|
$
|
(7.7
|
)
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Foreign currency items
|
|
$
|
0.5
|
|
|
$
|
1.9
|
|
|
$
|
7.5
|
|
Total other comprehensive income (loss) attributable to noncontrolling interests
|
|
$
|
0.5
|
|
|
$
|
1.9
|
|
|
$
|
7.5
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Stock options
|
|
$
|
1.7
|
|
|
$
|
2.1
|
|
|
$
|
3.1
|
|
RSUs
|
|
2.6
|
|
|
2.4
|
|
|
2.0
|
|
|||
PSUs
|
|
1.5
|
|
|
(0.1
|
)
|
|
3.1
|
|
|||
Deferred compensation
|
|
0.5
|
|
|
(0.1
|
)
|
|
0.6
|
|
|||
Pre-tax expense
|
|
6.3
|
|
|
4.3
|
|
|
8.8
|
|
|||
Tax benefit
|
|
(2.4
|
)
|
|
(1.6
|
)
|
|
(3.4
|
)
|
|||
Total
|
|
$
|
3.9
|
|
|
$
|
2.7
|
|
|
$
|
5.4
|
|
|
|
2012
|
|
2011
|
||
Dividend yield
|
|
1.33
|
%
|
|
1.33
|
%
|
Volatility
|
|
43.62
|
%
|
|
34.81
|
%
|
Risk-free rate of return
|
|
0.92
|
%
|
|
2.45
|
%
|
Expected life
|
|
5.1 years
|
|
|
5.3 years
|
|
|
|
Shares
subject
to option
|
|
Weighted-
average
exercise price
|
|
Aggregate
intrinsic
value (millions)
|
|
Weighted-
average
remaining life
|
|||||
December 31, 2009
|
|
2,239,577
|
|
|
$
|
33.37
|
|
|
|
|
|
||
Granted
|
|
235,954
|
|
|
31.71
|
|
|
|
|
|
|||
Exercised
|
|
(318,176
|
)
|
|
30.88
|
|
|
|
|
|
|||
Cancelled
|
|
(87,816
|
)
|
|
33.15
|
|
|
|
|
|
|||
Transfers, net
|
|
(122,359
|
)
|
|
34.12
|
|
|
|
|
|
|||
December 31, 2010
|
|
1,947,180
|
|
|
33.54
|
|
|
|
|
|
|||
Granted
|
|
207,962
|
|
|
44.95
|
|
|
|
|
|
|||
Exercised
|
|
(526,327
|
)
|
|
32.54
|
|
|
|
|
|
|||
Cancelled
|
|
(145,565
|
)
|
|
33.91
|
|
|
|
|
|
|||
Transfers, net
|
|
(203,693
|
)
|
|
35.22
|
|
|
|
|
|
|||
December 31, 2011
|
|
1,279,557
|
|
|
35.49
|
|
|
|
|
|
|||
Granted
|
|
144,051
|
|
|
40.63
|
|
|
|
|
|
|||
Exercised
|
|
(194,860
|
)
|
|
26.18
|
|
|
|
|
|
|||
Cancelled
|
|
(13,159
|
)
|
|
42.65
|
|
|
|
|
|
|||
Transfers, net
|
|
(113,460
|
)
|
|
35.00
|
|
|
|
|
|
|||
Outstanding December 31, 2012
|
|
1,102,129
|
|
|
$
|
37.77
|
|
|
$
|
11.3
|
|
|
5.6
|
Exercisable December 31, 2012
|
|
786,186
|
|
|
$
|
36.55
|
|
|
$
|
9.0
|
|
|
4.5
|
|
|
|
|
|
|
Options outstanding
|
|
Options exercisable
|
||||||||||||||||||
Range of
exercise price
|
|
Number
outstanding at
December 31,
2012
|
|
Weighted-
average
remaining
life
|
|
Weighted-
average
exercise
price
|
|
Number
outstanding at
December 31,
2012
|
|
Weighted-
average
remaining
life
|
|
Weighted-
average
exercise
price
|
||||||||||||||
$
|
10.01
|
|
|
—
|
|
$
|
20.00
|
|
|
116,076
|
|
|
5.5
|
|
$
|
16.78
|
|
|
116,076
|
|
|
5.5
|
|
$
|
16.78
|
|
20.01
|
|
|
—
|
|
30.00
|
|
|
1,440
|
|
|
2.1
|
|
27.35
|
|
|
1,440
|
|
|
2.1
|
|
27.35
|
|
||||
30.01
|
|
|
—
|
|
40.00
|
|
|
474,765
|
|
|
4.4
|
|
36.29
|
|
|
405,678
|
|
|
3.9
|
|
37.02
|
|
||||
40.01
|
|
|
—
|
|
50.00
|
|
|
484,950
|
|
|
6.7
|
|
43.58
|
|
|
240,027
|
|
|
5.1
|
|
43.97
|
|
||||
50.01
|
|
|
—
|
|
60.00
|
|
|
24,898
|
|
|
5.2
|
|
51.30
|
|
|
22,965
|
|
|
5.0
|
|
51.38
|
|
||||
|
|
|
|
|
|
|
|
1,102,129
|
|
|
5.6
|
|
$
|
37.77
|
|
|
786,186
|
|
|
4.5
|
|
$
|
36.55
|
|
|
|
RSUs
|
|
Weighted-
average grant
date fair value
|
|||
Outstanding and unvested at December 31, 2009
|
|
142,047
|
|
|
$
|
16.85
|
|
Granted
|
|
116,320
|
|
|
31.68
|
|
|
Vested
|
|
(44,665
|
)
|
|
16.85
|
|
|
Cancelled
|
|
(9,859
|
)
|
|
22.20
|
|
|
Transfers, net
|
|
(7,943
|
)
|
|
16.85
|
|
|
Outstanding and unvested at December 31, 2010
|
|
195,900
|
|
|
$
|
25.35
|
|
Granted
|
|
93,464
|
|
|
44.86
|
|
|
Vested
|
|
(71,438
|
)
|
|
23.88
|
|
|
Cancelled
|
|
(37,324
|
)
|
|
33.90
|
|
|
Transfers, net
|
|
(14,533
|
)
|
|
24.44
|
|
|
Outstanding and unvested at December 31, 2011
|
|
166,069
|
|
|
$
|
35.11
|
|
Granted
|
|
68,429
|
|
|
40.70
|
|
|
Vested
|
|
(72,300
|
)
|
|
29.99
|
|
|
Cancelled
|
|
(7,931
|
)
|
|
41.47
|
|
|
Transfers, net
|
|
(10,214
|
)
|
|
34.73
|
|
|
Outstanding and unvested at December 31, 2012
|
|
144,053
|
|
|
$
|
40.02
|
|
|
|
PSUs
|
|
Weighted-average grant date fair value
|
|||
Outstanding and unvested at December 31, 2009
|
|
338,708
|
|
|
$
|
18.81
|
|
Granted
|
|
92,428
|
|
|
32.23
|
|
|
Vested
|
|
(30,000
|
)
|
|
39.00
|
|
|
Transfers, net
|
|
(3,720
|
)
|
|
16.85
|
|
|
Outstanding and unvested at December 31, 2010
|
|
397,416
|
|
|
$
|
20.42
|
|
Granted
|
|
71,900
|
|
|
46.73
|
|
|
Vested
|
|
(112,496
|
)
|
|
16.95
|
|
|
Forfeited
|
|
(72,620
|
)
|
|
28.75
|
|
|
Transfers, net
|
|
(30,078
|
)
|
|
27.10
|
|
|
Outstanding and unvested at December 31, 2011
|
|
254,122
|
|
|
$
|
27.10
|
|
Granted
|
|
37,746
|
|
|
50.75
|
|
|
Forfeited
|
|
(126,982
|
)
|
|
17.80
|
|
|
Transfers, net
|
|
(22,430
|
)
|
|
39.13
|
|
|
Outstanding and unvested at December 31, 2012
|
|
142,456
|
|
|
$
|
39.13
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Americas
|
|
$
|
1.7
|
|
|
$
|
(0.8
|
)
|
|
$
|
1.7
|
|
EMEIA
|
|
5.8
|
|
|
1.1
|
|
|
0.7
|
|
|||
Asia Pacific
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|||
Total
|
|
$
|
7.5
|
|
|
$
|
0.3
|
|
|
$
|
3.0
|
|
Cost of goods sold
|
|
$
|
3.0
|
|
|
$
|
0.1
|
|
|
$
|
1.0
|
|
Selling and administrative expenses
|
|
4.5
|
|
|
0.2
|
|
|
2.0
|
|
|||
Total
|
|
$
|
7.5
|
|
|
$
|
0.3
|
|
|
$
|
3.0
|
|
In millions
|
|
Americas
|
|
EMEIA
|
|
Asia Pacific
|
|
Total
|
||||||||
December 31, 2010
|
|
$
|
4.8
|
|
|
$
|
3.4
|
|
|
$
|
0.7
|
|
|
$
|
8.9
|
|
Additions, net of reversals
|
|
(0.8
|
)
|
*
|
1.1
|
|
|
—
|
|
|
0.3
|
|
||||
Cash and non-cash uses
|
|
(2.3
|
)
|
|
(4.1
|
)
|
|
(0.7
|
)
|
|
(7.1
|
)
|
||||
Currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
December 31, 2011
|
|
1.7
|
|
|
0.4
|
|
|
—
|
|
|
2.1
|
|
||||
Additions, net of reversals
|
|
1.7
|
|
|
5.8
|
|
|
—
|
|
|
7.5
|
|
||||
Cash and non-cash uses
|
|
(3.4
|
)
|
|
(3.2
|
)
|
|
—
|
|
|
(6.6
|
)
|
||||
Currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
December 31, 2012
|
|
$
|
—
|
|
|
$
|
3.0
|
|
|
$
|
—
|
|
|
$
|
3.0
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Interest income
|
|
$
|
0.1
|
|
|
$
|
0.4
|
|
|
$
|
0.5
|
|
Exchange gain (loss)
|
|
(3.3
|
)
|
|
4.1
|
|
|
3.1
|
|
|||
Other
|
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
|||
Other, net
|
|
$
|
(3.2
|
)
|
|
$
|
4.6
|
|
|
$
|
3.5
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
United States
|
|
$
|
317.0
|
|
|
$
|
291.1
|
|
|
$
|
266.4
|
|
Non-U.S.
|
|
46.9
|
|
|
71.1
|
|
|
60.3
|
|
|||
Total
|
|
$
|
363.9
|
|
|
$
|
362.2
|
|
|
$
|
326.7
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Current tax expense (benefit):
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
121.3
|
|
|
$
|
102.4
|
|
|
$
|
86.0
|
|
Non-U.S.
|
|
18.6
|
|
|
27.3
|
|
|
25.6
|
|
|||
Total:
|
|
139.9
|
|
|
129.7
|
|
|
111.6
|
|
|||
Deferred tax expense (benefit):
|
|
|
|
|
|
|
||||||
United States
|
|
(4.0
|
)
|
|
(0.4
|
)
|
|
15.0
|
|
|||
Non-U.S.
|
|
—
|
|
|
1.2
|
|
|
(0.9
|
)
|
|||
Total:
|
|
(4.0
|
)
|
|
0.8
|
|
|
14.1
|
|
|||
Total tax expense (benefit):
|
|
|
|
|
|
|
||||||
United States
|
|
117.3
|
|
|
102.0
|
|
|
101.0
|
|
|||
Non-U.S.
|
|
18.6
|
|
|
28.5
|
|
|
24.7
|
|
|||
Total
|
|
$
|
135.9
|
|
|
$
|
130.5
|
|
|
$
|
125.7
|
|
|
|
Percent of pretax income
|
|||||||
|
|
2012
|
|
2011
|
|
2010
|
|||
Statutory U.S. rate
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Increase (decrease) in rates resulting from:
|
|
|
|
|
|
|
|||
Non-U.S. tax rate differential
|
|
(0.5
|
)
|
|
(1.1
|
)
|
|
(0.5
|
)
|
State and local income taxes (1)
|
|
2.8
|
|
|
2.3
|
|
|
2.1
|
|
Reserves for uncertain tax positions
|
|
0.6
|
|
|
1.7
|
|
|
2.3
|
|
Other adjustments
|
|
(0.6
|
)
|
|
(1.9
|
)
|
|
(0.4
|
)
|
Effective tax rate
|
|
37.3
|
%
|
|
36.0
|
%
|
|
38.5
|
%
|
(1)
|
Net of changes in valuation allowances
|
In millions
|
|
2012
|
|
2011
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Inventory and accounts receivable
|
|
$
|
7.2
|
|
|
$
|
7.1
|
|
Fixed assets and intangibles
|
|
15.2
|
|
|
15.8
|
|
||
Postemployment and other benefit liabilities
|
|
12.9
|
|
|
9.1
|
|
||
Other reserves and accruals
|
|
13.8
|
|
|
15.1
|
|
||
Net operating losses and credit carryforwards
|
|
21.5
|
|
|
26.6
|
|
||
Investment and other asset basis differences
|
|
7.3
|
|
|
10.6
|
|
||
Other
|
|
1.1
|
|
|
1.0
|
|
||
Gross deferred tax assets
|
|
79.0
|
|
|
85.3
|
|
||
Less: deferred tax valuation allowances
|
|
(5.8
|
)
|
|
(9.7
|
)
|
||
Deferred tax assets net of valuation allowances
|
|
$
|
73.2
|
|
|
$
|
75.6
|
|
Deferred tax liabilities:
|
|
|
|
|
||||
Fixed assets and intangibles
|
|
(60.0
|
)
|
|
(61.5
|
)
|
||
Other reserves and accruals
|
|
(1.4
|
)
|
|
(5.3
|
)
|
||
Other
|
|
(1.1
|
)
|
|
(2.1
|
)
|
||
Gross deferred tax liabilities
|
|
(62.5
|
)
|
|
(68.9
|
)
|
||
Net deferred tax assets (liabilities)
|
|
$
|
10.7
|
|
|
$
|
6.7
|
|
In millions
|
|
Amount
|
|
Expiration
Period
|
||
U.S. Federal net operating loss carryforwards
|
|
$
|
15.0
|
|
|
2013-2032
|
U.S. Federal credit carryforwards
|
|
0.3
|
|
|
2014-Unlimited
|
|
U.S. State net operating loss carryforwards
|
|
14.4
|
|
|
2013-2032
|
|
Non-U.S. net operating loss carryforwards
|
|
42.6
|
|
|
2013-Unlimited
|
|
Non-U.S. credit carryforwards
|
|
$
|
9.4
|
|
|
Unlimited
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Beginning balance
|
|
$
|
9.7
|
|
|
$
|
9.8
|
|
|
$
|
9.4
|
|
Increase to valuation allowance
|
|
1.8
|
|
|
2.0
|
|
|
1.4
|
|
|||
Decrease to valuation allowance
|
|
(0.1
|
)
|
|
—
|
|
|
(0.8
|
)
|
|||
Net equity with parent
|
|
(5.9
|
)
|
|
(1.6
|
)
|
|
(0.1
|
)
|
|||
Accumulated other comprehensive income (loss)
|
|
0.3
|
|
|
(0.5
|
)
|
|
(0.1
|
)
|
|||
Ending balance
|
|
$
|
5.8
|
|
|
$
|
9.7
|
|
|
$
|
9.8
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Beginning balance
|
|
$
|
63.0
|
|
|
$
|
53.3
|
|
|
$
|
51.4
|
|
Additions based on tax positions related to the current year
|
|
1.7
|
|
|
1.6
|
|
|
1.8
|
|
|||
Additions based on tax positions related to prior years
|
|
4.3
|
|
|
17.6
|
|
|
5.7
|
|
|||
Reductions based on tax positions related to prior years
|
|
(3.7
|
)
|
|
(8.7
|
)
|
|
(1.9
|
)
|
|||
Reductions related to settlements with tax authorities
|
|
(1.6
|
)
|
|
—
|
|
|
(0.5
|
)
|
|||
Reductions related to lapses of statute of limitations
|
|
—
|
|
|
(0.1
|
)
|
|
(2.5
|
)
|
|||
Translation (gain)/loss
|
|
(0.1
|
)
|
|
(0.7
|
)
|
|
(0.7
|
)
|
|||
Ending balance
|
|
$
|
63.6
|
|
|
$
|
63.0
|
|
|
$
|
53.3
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Net revenues
|
|
$
|
—
|
|
|
$
|
72.2
|
|
|
$
|
78.0
|
|
Pre-tax earnings (loss) from operations
|
|
(2.8
|
)
|
|
(2.9
|
)
|
|
(4.1
|
)
|
|||
Pre-tax gain (loss) on sale
|
|
(1.5
|
)
|
|
(6.7
|
)
|
|
—
|
|
|||
Tax benefit (expense)
|
|
1.6
|
|
|
2.3
|
|
|
1.6
|
|
|||
Discontinued operations, net of tax
|
|
$
|
(2.7
|
)
|
|
$
|
(7.3
|
)
|
|
$
|
(2.5
|
)
|
In millions
|
2012
|
|
2011
|
|
2010
|
||||||
Net revenues
|
$
|
—
|
|
|
$
|
72.2
|
|
|
$
|
78.0
|
|
After-tax earnings (loss) from operations
|
$
|
(0.5
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
(2.5
|
)
|
Gain (loss) on sale, net of tax
|
(1.5
|
)
|
|
(5.2
|
)
|
|
—
|
|
|||
Discontinued operations, net of tax
|
$
|
(2.0
|
)
|
|
$
|
(6.5
|
)
|
|
$
|
(2.5
|
)
|
In millions
|
2012
|
|
2011
|
||||
Balance at beginning of period
|
$
|
9.1
|
|
|
$
|
8.6
|
|
Reductions for payments
|
(4.9
|
)
|
|
(4.5
|
)
|
||
Accruals for warranties issued during the current period
|
4.9
|
|
|
5.2
|
|
||
Changes to accruals related to preexisting warranties
|
0.4
|
|
|
(0.2
|
)
|
||
Translation
|
0.1
|
|
|
—
|
|
||
Balance at end of period
|
$
|
9.6
|
|
|
$
|
9.1
|
|
Dollar amounts in millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Americas
|
|
|
|
|
|
|
||||||
Net revenues
|
|
$
|
1,471.9
|
|
|
$
|
1,402.2
|
|
|
$
|
1,379.2
|
|
Segment operating income
|
|
377.2
|
|
|
347.8
|
|
|
322.3
|
|
|||
Segment operating margin
|
|
25.6
|
%
|
|
24.8
|
%
|
|
23.4
|
%
|
|||
Depreciation and amortization
|
|
23.3
|
|
|
22.8
|
|
|
24.2
|
|
|||
Capital expenditures
|
|
16.9
|
|
|
18.9
|
|
|
14.3
|
|
|||
Total segment assets
|
|
883.3
|
|
|
883.4
|
|
|
903.1
|
|
|||
|
|
|
|
|
|
|
||||||
EMEIA
|
|
|
|
|
|
|
||||||
Net revenues
|
|
428.3
|
|
|
476.0
|
|
|
470.5
|
|
|||
Segment operating income
|
|
8.2
|
|
|
19.4
|
|
|
17.2
|
|
|||
Segment operating margin
|
|
1.9
|
%
|
|
4.1
|
%
|
|
3.7
|
%
|
|||
Depreciation and amortization
|
|
18.3
|
|
|
20.9
|
|
|
20.7
|
|
|||
Capital expenditures
|
|
1.7
|
|
|
5.5
|
|
|
6.6
|
|
|||
Total segment assets
|
|
724.4
|
|
|
798.5
|
|
|
823.5
|
|
|||
|
|
|
|
|
|
|
||||||
Asia Pacific
|
|
|
|
|
|
|
||||||
Net revenues
|
|
146.4
|
|
|
143.0
|
|
|
118.0
|
|
|||
Segment operating income
|
|
11.4
|
|
|
11.9
|
|
|
11.0
|
|
|||
Segment operating margin
|
|
7.8
|
%
|
|
8.3
|
%
|
|
9.3
|
%
|
|||
Depreciation and amortization
|
|
2.2
|
|
|
2.3
|
|
|
2.4
|
|
|||
Capital expenditures
|
|
1.0
|
|
|
1.1
|
|
|
0.9
|
|
|||
Total segment assets
|
|
310.9
|
|
|
294.8
|
|
|
256.7
|
|
|||
|
|
|
|
|
|
|
||||||
Total net revenues
|
|
$
|
2,046.6
|
|
|
$
|
2,021.2
|
|
|
$
|
1,967.7
|
|
|
|
|
|
|
|
|
||||||
Reconciliation to Operating Income
|
|
|
|
|
|
|
||||||
Segment operating income from reportable segments
|
|
$
|
396.8
|
|
|
$
|
379.1
|
|
|
$
|
350.5
|
|
Unallocated corporate expense
|
|
(28.2
|
)
|
|
(20.1
|
)
|
|
(25.5
|
)
|
|||
Total operating income
|
|
368.6
|
|
|
359.0
|
|
|
325.0
|
|
|||
Total operating income as a percentage of revenues
|
|
18.0
|
%
|
|
17.8
|
%
|
|
16.5
|
%
|
|||
|
|
|
|
|
|
|
||||||
Depreciation and amortization from reportable segments
|
|
43.8
|
|
|
46.0
|
|
|
47.3
|
|
|||
|
|
|
|
|
|
|
||||||
Capital expenditures from reportable segments
|
|
19.6
|
|
|
25.5
|
|
|
21.8
|
|
|||
|
|
|
|
|
|
|
||||||
Assets from reportable segments
|
|
1,918.6
|
|
|
1,976.7
|
|
|
1,983.3
|
|
|||
Unallocated assets
(1)
|
|
65.2
|
|
|
59.5
|
|
|
69.2
|
|
|||
Total assets
|
|
$
|
1,983.8
|
|
|
$
|
2,036.2
|
|
|
$
|
2,052.5
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Revenues
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
1,299.3
|
|
|
$
|
1,241.3
|
|
|
$
|
1,228.3
|
|
Non-U.S.
|
|
747.3
|
|
|
779.9
|
|
|
739.4
|
|
|||
Total
|
|
$
|
2,046.6
|
|
|
$
|
2,021.2
|
|
|
$
|
1,967.7
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Revenues
|
|
|
|
|
|
|
||||||
Mechanical
|
|
$
|
1,635.8
|
|
|
$
|
1,601.8
|
|
|
$
|
1,578.3
|
|
Electronic
|
|
410.8
|
|
|
419.4
|
|
|
389.4
|
|
|||
Total
|
|
$
|
2,046.6
|
|
|
$
|
2,021.2
|
|
|
$
|
1,967.7
|
|
In millions
|
|
2012
|
|
2011
|
||||
Long-lived assets
|
|
|
|
|
||||
United States
|
|
$
|
148.1
|
|
|
$
|
153.3
|
|
Non-U.S.
|
|
225.4
|
|
|
239.8
|
|
||
Total
|
|
$
|
373.5
|
|
|
$
|
393.1
|
|
Allowances for Doubtful Accounts:
|
|
||
|
|
||
Balance December 31, 2009
|
$
|
5.1
|
|
Additions charged to costs and expenses
|
2.1
|
|
|
Deductions*
|
(2.5
|
)
|
|
Currency translation
|
(0.1
|
)
|
|
Other
|
(0.3
|
)
|
|
|
|
||
Balance December 31, 2010
|
4.3
|
|
|
Additions charged to costs and expenses
|
0.9
|
|
|
Deductions*
|
(2.0
|
)
|
|
Business acquisitions and divestitures, net
|
0.2
|
|
|
|
|
||
Balance December 31, 2011
|
3.4
|
|
|
Additions charged to costs and expenses
|
2.4
|
|
|
Deductions*
|
(1.5
|
)
|
|
Currency translation
|
0.1
|
|
|
|
|
||
Balance December 31, 2012
|
$
|
4.4
|
|
(*)
|
“Deductions” include accounts and advances written off, less recoveries.
|
|
|
Six months ended
|
||||||
|
|
June 30,
|
||||||
|
|
2013
|
|
2012
|
||||
Net revenues
|
|
$
|
1,007.6
|
|
|
$
|
998.0
|
|
Cost of goods sold
|
|
(603.0
|
)
|
|
(597.2
|
)
|
||
Selling and administrative expenses
|
|
(236.5
|
)
|
|
(228.0
|
)
|
||
Operating income
|
|
168.1
|
|
|
172.8
|
|
||
Interest expense
|
|
(0.9
|
)
|
|
(0.7
|
)
|
||
Other, net
|
|
(6.7
|
)
|
|
(0.9
|
)
|
||
Earnings before income taxes
|
|
160.5
|
|
|
171.2
|
|
||
Provision for income taxes
|
|
(56.6
|
)
|
|
(63.5
|
)
|
||
Earnings from continuing operations
|
|
103.9
|
|
|
107.7
|
|
||
Discontinued operations, net of tax
|
|
(0.4
|
)
|
|
(0.6
|
)
|
||
Net earnings
|
|
103.5
|
|
|
107.1
|
|
||
Less: Net earnings attributable to noncontrolling interests
|
|
(3.8
|
)
|
|
(3.0
|
)
|
||
Net earnings attributable to Allegion
|
|
$
|
99.7
|
|
|
$
|
104.1
|
|
Amounts attributable to Allegion:
|
|
|
|
|
||||
Continuing operations
|
|
$
|
100.1
|
|
|
$
|
104.7
|
|
Discontinued operations
|
|
(0.4
|
)
|
|
(0.6
|
)
|
||
Net earnings
|
|
$
|
99.7
|
|
|
$
|
104.1
|
|
|
|
|
|
|
||||
Total comprehensive income (loss)
|
|
$
|
94.9
|
|
|
$
|
111.8
|
|
Less: Total comprehensive (income) loss attributable to noncontrolling interests
|
|
(4.5
|
)
|
|
(2.9
|
)
|
||
Total comprehensive income (loss) attributable to Allegion
|
|
$
|
90.4
|
|
|
$
|
108.9
|
|
|
June 30,
2013 |
|
December 31,
2012 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
322.2
|
|
|
$
|
317.5
|
|
Accounts receivable from third parties
|
318.0
|
|
|
288.2
|
|
||
Costs in excess of billings on uncompleted contracts
|
111.8
|
|
|
93.7
|
|
||
Inventories
|
158.4
|
|
|
166.4
|
|
||
Other current assets
|
45.8
|
|
|
44.1
|
|
||
Total current assets
|
956.2
|
|
|
909.9
|
|
||
Property, plant and equipment, net
|
220.5
|
|
|
232.0
|
|
||
Goodwill
|
632.8
|
|
|
637.9
|
|
||
Intangible assets, net
|
144.7
|
|
|
150.5
|
|
||
Other noncurrent assets
|
71.7
|
|
|
53.5
|
|
||
Total assets
|
$
|
2,025.9
|
|
|
$
|
1,983.8
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
205.4
|
|
|
$
|
227.2
|
|
Accrued compensation and benefits
|
51.0
|
|
|
60.5
|
|
||
Accrued expenses and other current liabilities
|
105.6
|
|
|
92.8
|
|
||
Short-term borrowings and current maturities of long-term debt
|
2.4
|
|
|
2.2
|
|
||
Total current liabilities
|
364.4
|
|
|
382.7
|
|
||
Long-term debt
|
2.6
|
|
|
2.8
|
|
||
Postemployment and other benefit liabilities
|
132.4
|
|
|
121.5
|
|
||
Deferred and noncurrent income taxes
|
86.7
|
|
|
92.0
|
|
||
Other noncurrent liabilities
|
15.0
|
|
|
18.6
|
|
||
Total liabilities
|
601.1
|
|
|
617.6
|
|
||
Equity:
|
|
|
|
||||
Parent company investment
|
1,417.1
|
|
|
1,350.9
|
|
||
Accumulated other comprehensive income (loss)
|
(17.0
|
)
|
|
(7.7
|
)
|
||
Total Parent Company equity
|
1,400.1
|
|
|
1,343.2
|
|
||
Noncontrolling interest
|
24.7
|
|
|
23.0
|
|
||
Total equity
|
1,424.8
|
|
|
1,366.2
|
|
||
Total liabilities and equity
|
$
|
2,025.9
|
|
|
$
|
1,983.8
|
|
|
Six months ended
|
||||||
|
June 30,
|
||||||
|
2013
|
|
2012
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net earnings
|
$
|
103.5
|
|
|
$
|
107.1
|
|
(Income) loss from discontinued operations, net of tax
|
0.4
|
|
|
0.6
|
|
||
Adjustments to arrive at net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
22.9
|
|
|
21.3
|
|
||
(Gain) loss on sale of property, plant and equipment
|
—
|
|
|
—
|
|
||
Changes in other assets and liabilities, net
|
(78.5
|
)
|
|
(25.6
|
)
|
||
Other, net
|
11.3
|
|
|
12.6
|
|
||
Net cash provided by (used in) continuing operating activities
|
59.6
|
|
|
116.0
|
|
||
Net cash provided by (used in) discontinued operating activities
|
(0.4
|
)
|
|
(0.6
|
)
|
||
Net cash provided by (used in) operating activities
|
59.2
|
|
|
115.4
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(8.7
|
)
|
|
(9.9
|
)
|
||
Proceeds from sale of property, plant and equipment
|
1.8
|
|
|
2.0
|
|
||
Net cash provided by (used in) continuing investing activities
|
(6.9
|
)
|
|
(7.9
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Short-term borrowings, net
|
0.5
|
|
|
0.1
|
|
||
Proceeds from long-term debt
|
—
|
|
|
—
|
|
||
Payments of long-term debt
|
(0.1
|
)
|
|
—
|
|
||
Net proceeds (repayments) in debt
|
0.4
|
|
|
0.1
|
|
||
Dividends paid to noncontrolling interests
|
(2.8
|
)
|
|
(2.9
|
)
|
||
Net transfers from (to) Parent and affiliates
|
(33.5
|
)
|
|
(181.6
|
)
|
||
Net cash provided by (used in) continuing financing activities
|
(35.9
|
)
|
|
(184.4
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(11.7
|
)
|
|
(2.6
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
4.7
|
|
|
(79.5
|
)
|
||
Cash and cash equivalents - beginning of period
|
317.5
|
|
|
376.8
|
|
||
Cash and cash equivalents - end of period
|
$
|
322.2
|
|
|
$
|
297.3
|
|
In millions
|
|
2013
|
|
2012
|
||||
Centrally managed service costs
|
|
$
|
41.6
|
|
|
$
|
37.1
|
|
Historical Ingersoll Rand corporate overhead allocations
|
|
20.2
|
|
|
20.9
|
|
||
Incremental corporate costs not previously allocated to businesses
|
|
15.8
|
|
|
11.1
|
|
||
Total
|
|
$
|
77.6
|
|
|
$
|
69.1
|
|
In millions
|
June 30,
2013 |
|
December 31,
2012 |
||||
Raw materials
|
$
|
72.1
|
|
|
$
|
80.4
|
|
Work-in-process
|
32.3
|
|
|
22.2
|
|
||
Finished goods
|
85.8
|
|
|
95.5
|
|
||
|
190.2
|
|
|
198.1
|
|
||
LIFO reserve
|
(31.8
|
)
|
|
(31.7
|
)
|
||
Total
|
$
|
158.4
|
|
|
$
|
166.4
|
|
In millions
|
Americas
|
|
EMEIA
|
|
Asia Pacific
|
|
Total
|
||||||||
December 31, 2012 (gross)
|
$
|
339.0
|
|
|
$
|
536.7
|
|
|
$
|
110.1
|
|
|
$
|
985.8
|
|
Acquisitions and adjustments*
|
15.0
|
|
|
—
|
|
|
(15.0
|
)
|
|
—
|
|
||||
Currency translation
|
—
|
|
|
(4.3
|
)
|
|
(0.8
|
)
|
|
(5.1
|
)
|
||||
June 30, 2013 (gross)
|
354.0
|
|
|
532.4
|
|
|
94.3
|
|
|
980.7
|
|
||||
Accumulated impairment **
|
—
|
|
|
(341.0
|
)
|
|
(6.9
|
)
|
|
(347.9
|
)
|
||||
Goodwill (net)
|
$
|
354.0
|
|
|
$
|
191.4
|
|
|
$
|
87.4
|
|
|
$
|
632.8
|
|
|
|
June 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||||
In millions
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
||||||||||||
Completed technologies/patents
|
|
$
|
25.0
|
|
|
$
|
(22.2
|
)
|
|
$
|
2.8
|
|
|
$
|
24.1
|
|
|
$
|
(21.7
|
)
|
|
$
|
2.4
|
|
Customer relationships
|
|
102.0
|
|
|
(34.3
|
)
|
|
67.7
|
|
|
103.7
|
|
|
(32.9
|
)
|
|
70.8
|
|
||||||
Trademarks (finite-lived)
|
|
95.7
|
|
|
(32.8
|
)
|
|
62.9
|
|
|
97.4
|
|
|
(31.5
|
)
|
|
65.9
|
|
||||||
Other
|
|
15.7
|
|
|
(13.4
|
)
|
|
2.3
|
|
|
15.8
|
|
|
(13.4
|
)
|
|
2.4
|
|
||||||
Total finite-lived intangible assets
|
|
238.4
|
|
|
$
|
(102.7
|
)
|
|
135.7
|
|
|
241.0
|
|
|
$
|
(99.5
|
)
|
|
141.5
|
|
||||
Trademarks (indefinite-lived)
|
|
9.0
|
|
|
|
|
9.0
|
|
|
9.0
|
|
|
|
|
9.0
|
|
||||||||
Total
|
|
$
|
247.4
|
|
|
|
|
$
|
144.7
|
|
|
$
|
250.0
|
|
|
|
|
$
|
150.5
|
|
In millions
|
|
June 30,
2013 |
|
December 31,
2012 |
||||
Current maturities of long-term debt, including capital leases
|
|
$
|
0.5
|
|
|
$
|
0.9
|
|
Short-term borrowings
|
|
1.9
|
|
|
1.3
|
|
||
Total
|
|
$
|
2.4
|
|
|
$
|
2.2
|
|
In millions
|
|
June 30,
2013 |
|
December 31,
2012 |
||||
Long-term debt, including capital leases, maturing in various amounts to 2016
|
|
$
|
2.6
|
|
|
$
|
2.8
|
|
|
Asset derivatives
|
|
Liability derivatives
|
||||||||||||
In millions
|
June 30,
2013 |
|
December 31,
2012 |
|
June 30,
2013 |
|
December 31,
2012 |
||||||||
Currency derivatives designated as hedges
|
$
|
1.3
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
U.S.
|
|
Non-U.S.
|
||||||||||||
In millions
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Service cost
|
$
|
4.4
|
|
|
$
|
4.9
|
|
|
$
|
1.8
|
|
|
$
|
1.6
|
|
Interest cost
|
5.1
|
|
|
5.6
|
|
|
5.2
|
|
|
5.1
|
|
||||
Expected return on plan assets
|
(5.3
|
)
|
|
(5.7
|
)
|
|
(4.8
|
)
|
|
(4.8
|
)
|
||||
Net amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service costs
|
0.3
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
||||
Plan net actuarial losses
|
1.9
|
|
|
2.1
|
|
|
0.9
|
|
|
0.9
|
|
||||
Net periodic pension benefit cost
|
6.4
|
|
|
7.4
|
|
|
3.1
|
|
|
2.8
|
|
||||
Net curtailment and settlement losses
|
—
|
|
|
2.4
|
|
|
—
|
|
|
—
|
|
||||
Net periodic pension benefit cost after net curtailment and settlement losses
|
$
|
6.4
|
|
|
$
|
9.8
|
|
|
$
|
3.1
|
|
|
$
|
2.8
|
|
Amounts recorded in continuing operations
|
$
|
6.4
|
|
|
$
|
9.8
|
|
|
$
|
3.1
|
|
|
$
|
2.8
|
|
In millions
|
2013
|
|
2012
|
||||
Service cost
|
$
|
0.1
|
|
|
$
|
0.2
|
|
Interest cost
|
0.3
|
|
|
0.3
|
|
||
Net amortization of:
|
|
|
|
||||
Prior service gains
|
(1.1
|
)
|
|
(0.9
|
)
|
||
Net actuarial losses
|
0.1
|
|
|
0.1
|
|
||
Net periodic postretirement benefit cost (income)
|
$
|
(0.6
|
)
|
|
$
|
(0.3
|
)
|
Amounts recorded in continuing operations
|
$
|
(0.6
|
)
|
|
$
|
(0.3
|
)
|
•
|
Level 1 – Inputs based on quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 – Inputs other than Level 1 quoted prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.
|
•
|
Level 3 – Unobservable inputs based on little or no market activity and that are significant to the fair value of the assets and liabilities.
|
|
Fair value measurements
|
|
Total
fair value |
||||||||||||
In millions
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
|
|||||||||
Recurring fair value measurements
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
$
|
17.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17.2
|
|
Derivative instruments
|
—
|
|
|
1.3
|
|
|
—
|
|
|
1.3
|
|
||||
Total asset recurring fair value measurements
|
$
|
17.2
|
|
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
18.5
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total liability recurring fair value measurements
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|||||||||||||||
|
Fair value measurements
|
|
Total
fair value |
||||||||||||
In millions
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
|
|||||||||
Recurring fair value measurements
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
$
|
16.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16.7
|
|
Derivative instruments
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Total asset recurring fair value measurements
|
$
|
16.7
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
16.8
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
Total liability recurring fair value measurements
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
•
|
Marketable securities
– These securities include investments in publicly-traded stock of non-U.S. companies held by non-U.S. subsidiaries of the Company. The fair value is obtained for the securities based on observable market prices quoted on public stock exchanges.
|
•
|
Derivative instruments
– These instruments include forward foreign currency contracts. The fair value of the derivative instruments are determined based on a pricing model that uses spot rates and forward prices from actively quoted currency markets that are readily accessible and observable.
|
In millions
|
Parent company's net investment
|
|
Noncontrolling
interests |
|
Total
equity |
||||||
Balance at December 31, 2012
|
$
|
1,343.2
|
|
|
$
|
23.0
|
|
|
$
|
1,366.2
|
|
Net earnings
|
99.7
|
|
|
3.8
|
|
|
103.5
|
|
|||
Currency translation
|
(18.1
|
)
|
|
0.7
|
|
|
(17.4
|
)
|
|||
Change in value of marketable securities and derivatives qualifying as cash flow hedges, net of tax
|
2.7
|
|
|
—
|
|
|
2.7
|
|
|||
Pension and OPEB adjustments, net of tax
|
6.1
|
|
|
—
|
|
|
6.1
|
|
|||
Total comprehensive income
|
90.4
|
|
|
4.5
|
|
|
94.9
|
|
|||
Acquisition/divestiture of noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|||
Dividends to noncontrolling interests
|
—
|
|
|
(2.8
|
)
|
|
(2.8
|
)
|
|||
Distribution/contribution to/from Parent Company
|
(33.5
|
)
|
|
—
|
|
|
(33.5
|
)
|
|||
Balance at June 30, 2013
|
$
|
1,400.1
|
|
|
$
|
24.7
|
|
|
$
|
1,424.8
|
|
In millions
|
Parent company's net investment
|
|
Noncontrolling
interests |
|
Total
equity |
||||||
Balance at December 31, 2011
|
$
|
1,413.8
|
|
|
$
|
22.0
|
|
|
$
|
1,435.8
|
|
Net earnings
|
104.1
|
|
|
3.0
|
|
|
107.1
|
|
|||
Currency translation
|
(13.8
|
)
|
|
(0.1
|
)
|
|
(13.9
|
)
|
|||
Change in value of marketable securities and derivatives qualifying as cash flow hedges, net of tax
|
2.6
|
|
|
—
|
|
|
2.6
|
|
|||
Pension and OPEB adjustments, net of tax
|
16.0
|
|
|
—
|
|
|
16.0
|
|
|||
Total comprehensive income
|
108.9
|
|
|
2.9
|
|
|
111.8
|
|
|||
Dividends to noncontrolling interests
|
—
|
|
|
(2.9
|
)
|
|
(2.9
|
)
|
|||
Distribution/contribution to/from Parent Company
|
(181.6
|
)
|
|
—
|
|
|
(181.6
|
)
|
|||
Balance at June 30, 2012
|
$
|
1,341.1
|
|
|
$
|
22.0
|
|
|
$
|
1,363.1
|
|
In millions
|
|
Cash flow hedges and marketable securities
|
|
Pension and OPEB Items
|
|
Foreign Currency Items
|
|
Total
|
||||||||
December 31, 2012
|
|
$
|
10.9
|
|
|
$
|
(95.7
|
)
|
|
$
|
77.1
|
|
|
$
|
(7.7
|
)
|
Other comprehensive income before reclassifications
|
|
3.1
|
|
|
4.0
|
|
|
(18.1
|
)
|
|
(11.0
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
|
(0.6
|
)
|
|
2.1
|
|
|
—
|
|
|
1.5
|
|
||||
Tax (expense) benefit
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
||||
June 30, 2013
|
|
$
|
13.6
|
|
|
$
|
(89.6
|
)
|
|
$
|
59.0
|
|
|
$
|
(17.0
|
)
|
In millions
|
2013
|
|
2012
|
||||
Stock options
|
$
|
1.1
|
|
|
$
|
1.0
|
|
RSUs
|
1.5
|
|
|
1.5
|
|
||
PSUs
|
0.7
|
|
|
0.5
|
|
||
Deferred compensation
|
0.6
|
|
|
0.2
|
|
||
Pre-tax expense
|
3.9
|
|
|
3.2
|
|
||
Tax benefit
|
(1.5
|
)
|
|
(1.2
|
)
|
||
After-tax expense
|
$
|
2.4
|
|
|
$
|
2.0
|
|
|
|
2013
|
|
2012
|
||
Dividend yield
|
|
1.60
|
%
|
|
1.33
|
%
|
Volatility
|
|
42.14
|
%
|
|
43.62
|
%
|
Risk-free rate of return
|
|
0.85
|
%
|
|
0.92
|
%
|
Expected life
|
|
5.06 years
|
|
|
5.14 years
|
|
In millions
|
2013
|
|
2012
|
||||
Americas
|
$
|
0.1
|
|
|
$
|
1.7
|
|
EMEIA
|
4.5
|
|
|
6.2
|
|
||
Asia Pacific
|
—
|
|
|
—
|
|
||
Total
|
$
|
4.6
|
|
|
$
|
7.9
|
|
Cost of goods sold
|
$
|
2.3
|
|
|
$
|
3.4
|
|
Selling and administrative expenses
|
2.3
|
|
|
4.5
|
|
||
Total
|
$
|
4.6
|
|
|
$
|
7.9
|
|
In millions
|
Americas
|
|
EMEIA
|
|
Asia Pacific
|
|
Total
|
||||||||
December 31, 2012
|
$
|
—
|
|
|
$
|
3.0
|
|
|
$
|
—
|
|
|
$
|
3.0
|
|
Additions, net of reversals
|
0.1
|
|
|
4.5
|
|
|
—
|
|
|
4.6
|
|
||||
Cash and non-cash uses
|
(0.1
|
)
|
|
(1.9
|
)
|
|
—
|
|
|
(2.0
|
)
|
||||
Currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
June 30, 2013
|
$
|
—
|
|
|
$
|
5.6
|
|
|
$
|
—
|
|
|
$
|
5.6
|
|
In millions
|
2013
|
|
2012
|
||||
Interest income
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Exchange gain (loss)
|
(6.9
|
)
|
|
(0.8
|
)
|
||
Other
|
0.1
|
|
|
(0.2
|
)
|
||
Other, net
|
$
|
(6.7
|
)
|
|
$
|
(0.9
|
)
|
In millions
|
2013
|
|
2012
|
||||
Balance at beginning of period
|
$
|
9.6
|
|
|
$
|
9.1
|
|
Reductions for payments
|
(2.7
|
)
|
|
(2.4
|
)
|
||
Accruals for warranties issued during the current period
|
1.7
|
|
|
2.6
|
|
||
Changes to accruals related to preexisting warranties
|
0.1
|
|
|
(0.1
|
)
|
||
Translation
|
(0.1
|
)
|
|
(0.1
|
)
|
||
Balance at end of period
|
$
|
8.6
|
|
|
$
|
9.1
|
|
In millions
|
2013
|
|
2012
|
||||
Net revenues
|
|
|
|
||||
Americas
|
749.1
|
|
|
730.8
|
|
||
EMEIA
|
204.6
|
|
|
216.5
|
|
||
Asia Pacific
|
53.9
|
|
|
50.7
|
|
||
Total
|
$
|
1,007.6
|
|
|
$
|
998.0
|
|
Segment operating income
|
|
|
|
||||
Americas
|
193.3
|
|
|
182.6
|
|
||
EMEIA
|
(7.4
|
)
|
|
0.8
|
|
||
Asia Pacific
|
(1.9
|
)
|
|
0.9
|
|
||
Total
|
$
|
184.0
|
|
|
$
|
184.3
|
|
Reconciliation to Operating income
|
|
|
|
||||
Unallocated corporate expense
|
(15.9
|
)
|
|
(11.5
|
)
|
||
Operating income
|
$
|
168.1
|
|
|
$
|
172.8
|
|
Albania Armenia
Australia Austria Bahrain Belarus Belgium Bosnia & Herzegovina Bulgaria Canada Chile China Croatia Cyprus Czech Republic Denmark Egypt Estonia Finland France Georgia Germany Greece Hong Kong Hungary Iceland India Israel Italy Japan
Korea (Rep. of)
Kuwait Latvia Lithuania Luxembourg |
Macedonia
Malaysia Malta Mexico Moldova Montenegro Morocco Netherlands New Zealand Norway Pakistan Panama Poland Portugal Qatar Romania Russia Saudi Arabia Serbia Singapore Slovak Republic Slovenia South Africa Spain Sweden Switzerland Turkey Ukraine United Arab Emirates United Kingdom United States of America Uzbekistan Vietnam Zambia |