Document:

4.2 Exchange and Registration Rights Agreement

Exhibit 4.2
ALLEGION US HOLDING COMPANY INC.
$300,000,000 5.75% Senior Notes due 2021

unconditionally guaranteed as to the
payment of principal, premium, 
if any, and interest by the  
Guarantors party hereto

_____________
Exchange and Registration Rights Agreement
October 4, 2013

 

Goldman, Sachs & Co.
200 West Street,
New York, New York 10282-2198

J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179

   
   As representatives of the several Purchasers
   named in Schedule I to the Purchase Agreement 
 
 
Ladies and Gentlemen: 

Allegion US Holding Company Inc., a Delaware corporation (the “Company”), proposes to issue and sell to the Purchasers (as defined herein) upon the terms set forth in the Purchase Agreement (as defined herein) $300,000,000 in aggregate principal amount of its 5.75% Senior Notes due 2021 (the “Securities”), which are unconditionally guaranteed by Allegion public limited company (“Parent”), which, upon the completion of the Separation (as defined in the Purchase Agreement), will become the parent company of the Company and each of the other guarantors listed on Schedule II to the Purchase Agreement (together with Parent, the “Guarantors”). As an inducement to the Purchasers to enter into the Purchase Agreement and in satisfaction of a condition to the obligations of the Purchasers thereunder, the Company and the Guarantors agree with the Purchasers for the benefit of holders (as defined herein) from time to time of the Registrable Securities (as defined herein) as follows:
1.     Certain Definitions.  For purposes of this Exchange and Registration Rights Agreement (this “Agreement”), the following terms shall have the following respective meanings:

 “Base Interest” shall mean the interest that would otherwise accrue on the Securities under the terms thereof and the Indenture, without giving effect to the provisions of this Agreement.
The term “broker-dealer” shall mean any broker or dealer registered with the Commission under the Exchange Act.
“Business Day” shall have the meaning set forth in Rule 13e-4(a)(3) promulgated by the Commission under the Exchange Act, as the same may be amended or succeeded from time to time.
“Closing Date” shall mean the date on which the Securities are initially issued.
“Commission” shall mean the United States Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose.
“EDGAR System” means the EDGAR filing system of the Commission and the rules and regulations pertaining thereto promulgated by the Commission in Regulation S-T under the Securities Act and the Exchange Act, in each case as the same may be amended or succeeded from time to time (and without regard to format).
“Effective Time,” in the case of (i) an Exchange Registration, shall mean the time and date as of which the Commission declares the Exchange Registration Statement effective or as of which the Exchange Registration Statement otherwise becomes effective and (ii) a Shelf Registration, shall mean the time and date as of which the Commission declares the Shelf Registration Statement effective or as of which the Shelf Registration Statement otherwise becomes effective.
“Electing Holder” shall mean any holder of Registrable Securities that has returned a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(d)(ii) or Section 3(d)(iii) and the instructions set forth in the Notice and Questionnaire.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission thereunder, as the same may be amended or succeeded from time to time.
“Exchange Offer” shall have the meaning assigned thereto in Section 2(a).
“Exchange Registration” shall have the meaning assigned thereto in Section 3(c).
“Exchange Registration Statement” shall have the meaning assigned thereto in Section 2(a).
“Exchange Securities” shall have the meaning assigned thereto in Section 2(a).
The term “holder” shall mean each of the Purchasers and other persons who acquire Securities from time to time (including any successors or assigns), in each case for so long as such person owns any Securities.
“Indenture” shall mean the trust indenture, dated as of October 4, 2013, among the Company, the Guarantors and the Trustee, relating to the issuance of the Securities.

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 “Notice and Questionnaire” means a Notice of Registration Statement and Selling Securityholder Questionnaire substantially in the form of Exhibit A hereto.
The term “person” shall mean a corporation, limited liability company, association, partnership, organization, business, individual, government or political subdivision thereof or governmental agency.
“Purchase Agreement” shall mean the Purchase Agreement, dated as of September 27, 2013, among the Purchasers, the Company and the Guarantors relating to the Securities.
“Purchasers” shall mean the Purchasers named in Schedule I to the Purchase Agreement.
“Registrable Securities” shall mean the Securities; provided, however, that a Security shall cease to be a Registrable Security upon the earliest to occur of the following: (i) in the circumstances contemplated by Section 2(a), the Security has been exchanged for an Exchange Security in an Exchange Offer as contemplated in Section 2(a) (provided that any Exchange Security that, pursuant to the last two sentences of Section 2(a), is included in a prospectus for use in connection with resales by broker-dealers shall be deemed to be a Registrable Security with respect to Sections 5, 6 and 9 until resale of such Registrable Security has been effected within the Resale Period); (ii) in the circumstances contemplated by Section 2(b), a Shelf Registration Statement registering such Security under the Securities Act has been declared or becomes effective and such Security has been sold or otherwise transferred by the holder thereof pursuant to and in a manner contemplated by such effective Shelf Registration Statement; (iii) subject to Section 8(b), such Security is actually sold by the holder thereof pursuant to Rule 144 under circumstances in which any legend borne by such Security relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed by the Company or pursuant to the Indenture; or (iv) such Security shall cease to be outstanding.
“Registration Default” shall have the meaning assigned thereto in Section 2(c).
“Registration Default Period” shall have the meaning assigned thereto in Section 2(c).
“Registration Expenses” shall have the meaning assigned thereto in Section 4.
“Resale Period” shall have the meaning assigned thereto in Section 2(a).
“Restricted Holder” shall mean (i) a holder that is an affiliate of the Company within the meaning of Rule 405, (ii) a holder who acquires Exchange Securities outside the ordinary course of such holder’s business, (iii) a holder who has arrangements or understandings with any person to participate in the Exchange Offer for the purpose of distributing Exchange Securities and (iv) a holder that is a broker-dealer, but only with respect to Exchange Securities received by such broker-dealer pursuant to an Exchange Offer in exchange for Registrable Securities acquired by the broker-dealer directly from the Company.
“Rule 144,” “Rule 405”, “Rule 415”, “Rule 424”, “Rule 430B” and “Rule 433” shall mean, in each case, such rule promulgated by the Commission under the Securities Act (or any successor provision), as the same may be amended or succeeded from time to time.

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 “Securities” shall mean, collectively, the $300,000,000 aggregate principal amount of the Company’s 5.75% Senior Notes due 2021 to be issued and sold to the Purchasers, and securities issued in exchange therefor or in lieu thereof pursuant to the Indenture.  Each Security is entitled to the benefit of the guarantees provided by the Guarantors in the Indenture (the “Guarantees”) and, unless the context otherwise requires, any reference herein to a “Security,” an “Exchange Security” or a “Registrable Security” shall include a reference to the related Guarantees.
“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated by the Commission thereunder, as the same may be amended or succeeded from time to time.
“Shelf Registration” shall have the meaning assigned thereto in Section 2(b).
“Shelf Registration Statement” shall have the meaning assigned thereto in Section 2(b).
“Special Interest” shall have the meaning assigned thereto in Section 2(c).
“Suspension Period” shall have the meaning assigned thereto in Section 2(b).
“Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended, and the rules and regulations promulgated by the Commission thereunder, as the same may be amended or succeeded from time to time.
“Trustee” shall mean Wells Fargo Bank, N.A., as trustee under the Indenture, together with any successors thereto in such capacity.
Unless the context otherwise requires, any reference herein to a “Section” or “clause” refers to a Section or clause, as the case may be, of this Agreement, and the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision.
2.     Registration Under the Securities Act.
(a)     Except as set forth in Section 2(b) below, the Company and the Guarantors agree to file under the Securities Act a registration statement relating to an offer to exchange (such registration statement, the “Exchange Registration Statement”, and such offer, the “Exchange Offer”) any and all of the Securities for a like aggregate principal amount of debt securities issued by the Company and guaranteed by the Guarantors, which debt securities and guarantees are substantially identical to the Securities and the related Guarantees, respectively (and are entitled to the benefits of the Indenture), except that they have been registered pursuant to an effective registration statement under the Securities Act and do not contain provisions for Special Interest contemplated in Section 2(c) below (such new debt securities hereinafter called “Exchange Securities”).  The Company and the Guarantors agree to use commercially reasonable efforts to cause the Exchange Registration Statement to become effective under the Securities Act no later than 365 days after the Closing Date.  The Exchange Offer will be registered under the Securities Act on the appropriate form and will comply with all applicable tender offer rules and regulations under the Exchange Act.  Unless the Exchange Offer would not be permitted by applicable law or Commission policy, the Company further agrees to use commercially reasonable 

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efforts to (i) commence the Exchange Offer promptly following the Effective Time of such Exchange Registration Statement, (ii) hold the Exchange Offer open for at least 20 Business Days in accordance with Regulation 14E promulgated by the Commission under the Exchange Act and (iii) exchange Exchange Securities for all Registrable Securities that have been properly tendered and not withdrawn promptly following the expiration of the Exchange Offer.  The Exchange Offer will be deemed to have been “completed” only (i) if the debt securities and related guarantees received by holders other than Restricted Holders in the Exchange Offer for Registrable Securities are, upon receipt, transferable by each such holder without restriction under the Securities Act and the Exchange Act and without material restrictions under the blue sky or securities laws of a substantial majority of the States of the United States of America and (ii) upon the Company having exchanged, pursuant to the Exchange Offer, Exchange Securities for all Registrable Securities that have been properly tendered and not withdrawn before the expiration of the Exchange Offer, which shall be on a date that is at least 20 and no more than 30 Business Days following the commencement of the Exchange Offer.  The Company and the Guarantors agree (x) to include in the Exchange Registration Statement a prospectus for use in any resales by any holder of Exchange Securities that is a broker‐dealer and (y) to keep such Exchange Registration Statement effective for a period (the “Resale Period”) beginning when Exchange Securities are first issued in the Exchange Offer and ending upon the earlier of the expiration of the 180th day after the Exchange Offer has been completed or such time as such broker-dealers no longer own any Registrable Securities.  With respect to such Exchange Registration Statement, such holders shall have the benefit of the rights of indemnification and contribution set forth in Subsections 6(a), (c), (d) and (e).
(b)     If (i) on or prior to the time the Exchange Offer is completed existing law or Commission interpretations are changed such that the debt securities or the related guarantees received by holders other than Restricted Holders in the Exchange Offer for Registrable Securities are not or would not be, upon receipt, transferable by each such holder without restriction under the Securities Act, (ii) the Effective Time of the Exchange Registration Statement is not within 365 days following the Closing Date and the Exchange Offer has not been completed within 30 Business Days of such Effective Time or (iii) any holder of Registrable Securities notifies the Company after the Exchange Offer is completed but prior to the 20th Business Day following the completion of the Exchange Offer that: (A) it was prohibited by law or Commission policy from participating in the Exchange Offer, (B) it may not resell the Exchange Securities to the public without delivering a prospectus and the prospectus supplement contained in the Exchange Registration Statement is not appropriate or available for such resales or (C) it is a broker-dealer and owns Registrable Securities acquired directly from the Company or an affiliate of the Company, then the Company and the Guarantors shall, in lieu of (or, in the case of clause (iii), in addition to) conducting the Exchange Offer contemplated by Section 2(a), use commercially reasonable efforts to promptly file under the Securities Act, and in no event later than 90 days after the time such obligation to file arises (which, in the case of clause (iii) above, shall be the date that the applicable holder so notifies the Company) (but no earlier than 270 days after the Closing Date), a “shelf” registration statement providing for the registration of, and the sale on a continuous or delayed basis by the holders of, all of the Registrable Securities, pursuant to Rule 415 or any similar rule that may be adopted by the Commission (such filing, the “Shelf Registration” and such registration statement, the “Shelf Registration Statement”).  The Company shall not be obligated to file a Shelf Registration Statement pursuant to clause (iii) of the preceding sentence unless the applicable holder confirms the information specified in clauses (iii)(A) through (iii)(C) of such sentence on the date that the Company would be 

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obligated to file such Shelf Registration Statement. The Company and the Guarantors agree to use commercially reasonable efforts to cause the Shelf Registration Statement to become or be declared effective no later than 90 days after the filing of such Shelf Registration Statement (but no earlier than 365 days after the Closing Date); provided, that if at any time the Company is or becomes a “well-known seasoned issuer” (as defined in Rule 405) and is eligible to file an “automatic shelf registration statement” (as defined in Rule 405), then the Company and the Guarantors shall file the Shelf Registration Statement in the form of an automatic shelf registration statement as provided in Rule 405.  The Company and the Guarantors agree to use commercially reasonable efforts to keep such Shelf Registration Statement continuously effective for a period ending on the earlier of the second anniversary of the Effective Time or such time as there are no longer any Registrable Securities outstanding (the “Effectiveness Period”).  No holder shall be entitled to be named as a selling securityholder in the Shelf Registration Statement or to use the prospectus forming a part thereof for resales of Registrable Securities unless such holder is an Electing Holder.  The Company and the Guarantors agree, after the Effective Time of the Shelf Registration Statement and promptly upon the request of any holder of Registrable Securities that is not then an Electing Holder, to use commercially reasonable efforts to enable such holder to use the prospectus forming a part thereof for resales of Registrable Securities, including, without limitation, any action necessary to identify such holder as a selling securityholder in the Shelf Registration Statement (whether by post-effective amendment thereto or by filing a prospectus pursuant to Rules 430B and 424(b) under the Securities Act identifying such holder), provided, however, that nothing in this sentence shall (A) relieve any such holder of the obligation to return a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(d)(iii) or (B) require the Company and the Guarantors to file more than one post-effective amendment to the Shelf Registration Statement in any 45-day period.  Notwithstanding anything to the contrary in this Section 2(b), upon notice to the Electing Holders, the Company may suspend the use or the effectiveness of such Shelf Registration Statement, or extend the time period in which it is required to file the Shelf Registration Statement, for a reasonable period of time but not in excess of 60 consecutive days or more than three (3) times during any calendar year (a “Suspension Period”) if the Board of Directors of the Company determines that there is a valid business purpose for suspension of the Shelf Registration Statement; provided that the Company shall promptly notify the Electing Holders when the Shelf Registration Statement may once again be used or is effective.
(c)     In the event that (i) the Company and the Guarantors have not filed the Shelf Registration Statement on or before the date on which such registration statement is required to be filed pursuant to Section  2(b), or (ii) the Exchange Registration Statement or Shelf Registration Statement has not become effective or been declared effective by the Commission on or before the date on which such registration statement is required to become or be declared effective pursuant to Section 2(a) or Section 2(b), respectively, or (iii) the Exchange Offer has not been completed within 30 Business Days following the 365th day following the Closing Date (if the Exchange Offer is then required to be made) or (iv) any Exchange Registration Statement or Shelf Registration Statement required by Section 2(a) or Section 2(b) is filed and declared or is automatically effective but shall thereafter either be withdrawn by the Company or shall become subject to an effective stop order issued pursuant to Section 8(d) of the Securities Act suspending the effectiveness of such registration statement during, in the case of any Exchange Registration Statement, the Resale Period, and in the case of any Shelf Registration Statement, the Effectiveness Period (except as specifically permitted herein, including, with respect to any Shelf 

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Registration Statement, during any applicable Suspension Period in accordance with the last sentence of Section 2(b)) without being succeeded immediately by an additional registration statement filed and declared or becoming automatically effective (each such event referred to in clauses (i) through (iv), a “Registration Default” and each period during which a Registration Default has occurred and is continuing, a “Registration Default Period”), then, as liquidated damages for such Registration Default, subject to the provisions of Section 9(b), special interest (“Special Interest”), in addition to the Base Interest, shall accrue on all Registrable Securities then outstanding at a per annum rate of 0.25% for the first 90 days of the Registration Default Period, at a per annum rate of 0.50% for the second 90 days of the Registration Default Period, at a per annum rate of 0.75% for the third 90 days of the Registration Default Period and at a per annum rate of 1.00% thereafter for the remaining portion of the Registration Default Period commencing no earlier than the 365th day following the Closing Date in the case of clauses (i) or (iv) above; provided, however, that upon the exchange of the Exchange Securities for Securities tendered, or upon the effectiveness of the applicable Shelf Registration Statement which had ceased to remain effective, Special Interest on the Securities in respect of which such events relate as a result of such clause (or the relevant subclause thereof), as the case may be, shall cease to accrue. Notwithstanding any other provisions of this paragraph, the Company shall not be obligated to pay Special Interest provided in this paragraph during a Shelf Suspension Period permitted by Section 2(b) hereof. Special Interest shall accrue and be payable only with respect to a single Registration Default at any given time, notwithstanding the fact that multiple Registration Defaults may exist at such time.
(d)     The Company shall take, and shall cause the Guarantors to take, all actions reasonably necessary or advisable to be taken by it to ensure that the transactions contemplated herein are effected as so contemplated, including all actions reasonably necessary or desirable to register the Guarantees under any Exchange Registration Statement or Shelf Registration Statement, as applicable.
(e)     Any reference herein to a registration statement or prospectus as of any time shall be deemed to include any document incorporated, or deemed to be incorporated, therein by reference as of such time; and any reference herein to any post-effective amendment to a registration statement or to any prospectus supplement as of any time shall be deemed to include any document incorporated, or deemed to be incorporated, therein by reference as of such time.
3.     Registration Procedures.
If the Company and the Guarantors file a registration statement pursuant to Section 2(a) or Section 2(b), the following provisions shall apply:
(a)    At or before the Effective Time of the Exchange Registration or any Shelf Registration, whichever may occur first, the Company shall qualify the Indenture under the Trust Indenture Act.
(b)    In the event that such qualification would require the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture.
(c)    In connection with the Company’s and the Guarantors’ obligations with respect to the registration of Exchange Securities as contemplated by Section 2(a) (the “Exchange Registration”), if applicable, the Company and the Guarantors shall:

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(i)    prepare and file with the Commission an Exchange Registration Statement on any form which may be utilized by the Company and the Guarantors and which shall permit the Exchange Offer and resales of Exchange Securities by broker-dealers during the Resale Period to be effected as contemplated by Section 2(a), and use commercially reasonable efforts to cause such Exchange Registration Statement to become effective no later than 365 days after the Closing Date;
(ii)    as soon as practicable prepare and file with the Commission such amendments and supplements to such Exchange Registration Statement and the prospectus included therein as may be necessary to effect and maintain the effectiveness of such Exchange Registration Statement for the periods and purposes contemplated in Section 2(a) and as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such Exchange Registration Statement, and promptly provide each broker-dealer holding Exchange Securities with such number of copies of the prospectus included therein (as then amended or supplemented), in conformity in all material respects with the requirements of the Securities Act and the Trust Indenture Act, as such broker-dealer reasonably may request prior to the expiration of the Resale Period, for use in connection with resales of Exchange Securities;
(iii)    promptly notify each broker-dealer that has requested or received copies of the prospectus included in such Exchange Registration Statement, and confirm such advice in writing, (A) when such Exchange Registration Statement or the prospectus included therein or any prospectus amendment or supplement or post‐effective amendment has been filed, and, with respect to such Exchange Registration Statement or any post‐effective amendment, when the same has become effective, (B) of any comments by the Commission and by the blue sky or securities commissioner or regulator of any state with respect thereto or any request by the Commission for amendments or supplements to such Exchange Registration Statement or prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such Exchange Registration Statement or the initiation or threatening of any proceedings for that purpose, (D) if at any time the representations and warranties of the Company or any of the Guarantors contemplated by Section 5 cease to be true and correct in all material respects, (E) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Exchange Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, (F) the occurrence of any event that causes the Company to become an “ineligible issuer” as defined in Rule 405, or (G) if at any time during the Resale Period when a prospectus is required to be delivered under the Securities Act, that such Exchange Registration Statement, prospectus, prospectus amendment or supplement or post‐effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act or contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;
(iv)    in the event that the Company and the Guarantors would be required, pursuant to Section 3(c)(iii)(G), to notify any broker-dealers holding Exchange Securities (except as otherwise permitted during any Suspension Period), promptly prepare and furnish to each such 

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holder a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers of such Exchange Securities during the Resale Period, such prospectus shall conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;
(v)    use commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of such Exchange Registration Statement or any post‐effective amendment thereto at the earliest practicable date;
(vi)    use commercially reasonable efforts to (A) register or qualify the Exchange Securities under the securities laws or blue sky laws of such jurisdictions as are contemplated by Section 2(a) no later than the commencement of the Exchange Offer, to the extent required by such laws, (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions until the expiration of the Resale Period, (C) take any and all other actions as may be reasonably necessary or advisable to enable each broker-dealer holding Exchange Securities to consummate the disposition thereof in such jurisdictions and (D) obtain the consent or approval of each governmental agency or authority, whether federal, state or local, which may be required to effect the Exchange Registration, the Exchange Offer and the offering and sale of Exchange Securities by broker-dealers during the Resale Period; provided, however, that neither the Company nor the Guarantors shall be required for any such purpose to (1) qualify as a foreign corporation in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 3(c)(vi), (2) consent to general service of process in any such jurisdiction or become subject to taxation in any such jurisdiction or (3) make any changes to its certificate of incorporation or by‐laws or other governing documents or any agreement between it and its stockholders;
(vii)    obtain a CUSIP number for all Exchange Securities, not later than the applicable Effective Time; and
(viii)    otherwise use commercially reasonable best efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its securityholders no later than eighteen months after the Effective Time of such Exchange Registration Statement, an “earning statement” of the Company, the Guarantors and their respective subsidiaries complying with Section 11(a) of the Securities Act (including, at the option of the Company, Rule 158 thereunder).
(d)    In connection with the Company’s and the Guarantors’ obligations with respect to the Shelf Registration, if applicable, the Company and the Guarantors shall:
(i)    prepare and file with the Commission, within the time periods specified in Section 2(b), a Shelf Registration Statement on any form which may be utilized by the Company and which shall register all of the Registrable Securities for resale by the holders thereof in accordance 

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with such method or methods of disposition as may be specified by the holders of Registrable Securities as, from time to time, may be Electing Holders and use commercially reasonable efforts to cause such Shelf Registration Statement to become effective within the time periods specified in Section 2(b); 
(ii)    mail the Notice and Questionnaire to the holders of Registrable Securities (A) not less than 30 days prior to the anticipated Effective Time of the Shelf Registration Statement or (B) in the case of an “automatic shelf registration statement” (as defined in Rule 405), mail the Notice and Questionnaire to the holders of Registrable Securities not later than the Effective Time of such Shelf Registration Statement, and in any such case no holder shall be entitled to be named as a selling securityholder in the Shelf Registration Statement, and no holder shall be entitled to use the prospectus forming a part thereof for resales of Registrable Securities at any time, unless and until such holder has returned a completed and signed Notice and Questionnaire to the Company;
(iii)    after the Effective Time of the Shelf Registration Statement, upon the request of any holder of Registrable Securities that is not then an Electing Holder, promptly send a Notice and Questionnaire to such holder; provided that neither the Company nor any Guarantor shall be required to (A) take any action to name such holder as a selling securityholder in the Shelf Registration Statement or to enable such holder to use the prospectus forming a part thereof for resales of Registrable Securities until such holder has returned a completed and signed Notice and Questionnaire to the Company or (B) file more than one post-effective amendment to the Shelf Registration Statement in any 45-day period.
(iv)    as soon as practicable prepare and file with the Commission such amendments and supplements to such Shelf Registration Statement and the prospectus included therein as may be necessary to effect and maintain the effectiveness of such Shelf Registration Statement for the period specified in Section 2(b) and as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such Shelf Registration Statement, and furnish to the Electing Holders copies of any such supplement or amendment simultaneously with or prior to its being used or filed with the Commission to the extent such documents are not publicly available on the Commission’s EDGAR System;
(v)    comply with the provisions of the Securities Act with respect to the disposition of all of the Registrable Securities covered by such Shelf Registration Statement in accordance with the intended methods of disposition by the Electing Holders provided for in such Shelf Registration Statement;
(vi)    provide the Electing Holders and not more than one counsel for all the Electing Holders the opportunity to review and comment on such Shelf Registration Statement, each prospectus included therein or filed with the Commission and each amendment or supplement thereto;
(vii)    for a reasonable period prior to the filing of such Shelf Registration Statement, and throughout the period specified in Section 2(b), make available at reasonable times at the 

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Company’s principal place of business or such other reasonable place for inspection by the persons referred to in Section 3(d)(vi) who shall certify to the Company that they have a current intention to sell the Registrable Securities pursuant to the Shelf Registration such financial and other information and books and records of the Company and the Guarantors, and cause the officers, employees, counsel and independent certified public accountants of the Company and the Guarantors to respond to such inquiries, as shall be reasonably necessary (and in the case of counsel, not violate an attorney-client privilege, in such counsel’s reasonable belief), in the judgment of the respective counsel referred to in Section 3(d)(vi), to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that the foregoing inspection and information gathering on behalf of the Electing Holders shall be conducted by one counsel designated by the holders of at least a majority in aggregate principal amount of the Registrable Securities held by the Electing Holders at the time outstanding and provided further that each such party shall be required to maintain in confidence and not to disclose to any other person any such information or records, until such time as (A) such information becomes a matter of public record (whether by virtue of its inclusion in such Shelf Registration Statement or otherwise), or (B) such person shall be required so to disclose such information pursuant to a subpoena or order of any court or other governmental agency or body having jurisdiction over the matter (subject to the requirements of such order, and only after such person shall have given the Company prompt prior written notice of such requirement), or (C) such information is required to be set forth in such Shelf Registration Statement or the prospectus included therein or in an amendment to such Shelf Registration Statement or an amendment or supplement to such prospectus in order that such Shelf Registration Statement, prospectus, amendment or supplement, as the case may be, complies with applicable requirements of the federal securities laws and the rules and regulations of the Commission and does not contain an untrue statement of a material fact or omit to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;
(viii)    promptly notify each of the Electing Holders and confirm such advice in writing, (A) when such Shelf Registration Statement or the prospectus included therein or any prospectus amendment or supplement or post‐effective amendment has been filed, and, with respect to such Shelf Registration Statement or any post‐effective amendment, when the same has become effective, (B) of any comments by the Commission and by the blue sky or securities commissioner or regulator of any state with respect thereto or any request by the Commission for amendments or supplements to such Shelf Registration Statement or prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such Shelf Registration Statement or the initiation or threatening of any proceedings for that purpose, (D) if at any time the representations and warranties of the Company or any of the Guarantors set forth in Section 5 cease to be true and correct in all material respects, (E) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, (F) the occurrence of any event that causes the Company or any of the Guarantors to become an “ineligible issuer” as defined in Rule 405, or (G) if at any time when a prospectus is required to be delivered under the Securities 

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Act, that such Shelf Registration Statement, prospectus, prospectus amendment or supplement or post‐effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act or contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;
(ix)    use commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of such Shelf Registration Statement or any post‐effective amendment thereto at the earliest practicable date;
(x)    if requested by any Electing Holder, promptly incorporate in a prospectus supplement or post‐effective amendment such information as is required by the applicable rules and regulations of the Commission and as such Electing Holder specifies should be included therein relating to the terms of the sale of such Registrable Securities, including information with respect to the principal amount of Registrable Securities being sold by such Electing Holder, the name and description of such Electing Holder, the offering price of such Registrable Securities and any discount, commission or other compensation payable in respect thereof and with respect to any other terms of the offering of the Registrable Securities to be sold by such Electing Holder; and make all required filings of such prospectus supplement or post‐effective amendment promptly after notification of the matters to be incorporated in such prospectus supplement or post‐effective amendment;
(xi)    furnish to each Electing Holder and the counsel referred to in Section 3(d)(vi) an executed copy (or a conformed copy) of such Shelf Registration Statement, each such amendment and supplement thereto (in each case including all exhibits thereto (in the case of an Electing Holder of Registrable Securities, upon request) and documents incorporated by reference therein) and such number of copies of such Shelf Registration Statement (excluding exhibits thereto and documents incorporated by reference therein unless specifically so requested by such Electing Holder) and of the prospectus included in such Shelf Registration Statement (including each preliminary prospectus and any summary prospectus), in conformity in all material respects with the applicable requirements of the Securities Act and the Trust Indenture Act to the extent such documents are not available through the Commission’s EDGAR System, and such other documents, as such Electing Holder may reasonably request in order to facilitate the offering and disposition of the Registrable Securities owned by such Electing Holder and to permit such Electing Holder to satisfy the prospectus delivery requirements of the Securities Act; and subject to Section 3(e), the Company hereby consents to the use of such prospectus (including such preliminary and summary prospectus) and any amendment or supplement thereto by each such Electing Holder (subject to any applicable Suspension Period), in each case in the form most recently provided to such person by the Company, in connection with the offering and sale of the Registrable Securities covered by the prospectus (including such preliminary and summary prospectus) or any supplement or amendment thereto;
(xii)    use commercially reasonable efforts to (A) register or qualify the Registrable Securities to be included in such Shelf Registration Statement under such securities laws or blue sky laws of such jurisdictions as any Electing Holder shall reasonably request, (B) keep such 

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registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions during the period the Shelf Registration Statement is required to remain effective under Section 2(b) and for so long as may be necessary to enable any such Electing Holder to complete its distribution of Registrable Securities pursuant to such Shelf Registration Statement, (C) take any and all other actions as may be reasonably necessary or advisable to enable each such Electing Holder to consummate the disposition in such jurisdictions of such Registrable Securities and (D) obtain the consent or approval of each governmental agency or authority, whether federal, state or local, which may be required to effect the Shelf Registration or the offering or sale in connection therewith or to enable the selling holder or holders to offer, or to consummate the disposition of, their Registrable Securities; provided, however, that neither the Company nor the Guarantors shall be required for any such purpose to (1) qualify as a foreign corporation in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 3(d)(xii), (2) consent to general service of process in any such jurisdiction or become subject to taxation in any such jurisdiction or (3) make any changes to its certificate of incorporation or by‐laws or other governing documents or any agreement between it and its stockholders;
(xiii)    unless any Registrable Securities shall be in book-entry only form, cooperate with the Electing Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, which certificates, if so required by any securities exchange upon which any Registrable Securities are listed, shall be printed, penned, lithographed, engraved or otherwise produced by any combination of such methods, on steel engraved borders, and which certificates shall not bear any restrictive legends;
(xiv)    obtain a CUSIP number for all Securities that have been registered under the Securities Act, not later than the applicable Effective Time;
(xv)    notify in writing each holder of Registrable Securities of any proposal by the Company to amend or waive any provision of this Agreement pursuant to Section 9(h) and of any amendment or waiver effected pursuant thereto, each of which notices shall contain the text of the amendment or waiver proposed or effected, as the case may be; and
(xvi)    comply with all applicable rules and regulations of the Commission, and make generally available to its securityholders no later than eighteen months after the Effective Time of such Shelf Registration Statement an “earning statement” of the Company and its subsidiaries complying with Section 11(a) of the Securities Act (including, at the option of the Company, Rule 158 thereunder).
(e)    In the event that the Company would be required, pursuant to Section 3(d)(viii)(G), to notify the Electing Holders, the Company shall promptly prepare and furnish to each of the Electing Holders a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers of Registrable Securities, such prospectus shall conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing.  Each Electing 

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Holder agrees that upon receipt of any notice from the Company pursuant to Section 3(d)(viii)(G), such Electing Holder shall forthwith discontinue the disposition of Registrable Securities pursuant to the Shelf Registration Statement applicable to such Registrable Securities until such Electing Holder shall have received copies of such amended or supplemented prospectus, and if so directed by the Company, such Electing Holder shall deliver to the Company (at the Company’s expense) all copies, other than permanent file copies, of the prospectus covering such Registrable Securities in such Electing Holder’s possession at the time of receipt of such notice.
(f)    In the event of a Shelf Registration, in addition to the information required to be provided by each Electing Holder in its Notice and Questionnaire, the Company may require such Electing Holder to furnish to the Company such additional information regarding such Electing Holder and such Electing Holder’s intended method of distribution of Registrable Securities as may be required in order to comply with the Securities Act.  Each such Electing Holder agrees to notify the Company as promptly as practicable of any inaccuracy or change in information previously furnished by such Electing Holder to the Company or of the occurrence of any event in either case as a result of which any prospectus relating to such Shelf Registration contains or would contain an untrue statement of a material fact regarding such Electing Holder or such Electing Holder’s intended method of disposition of such Registrable Securities or omits to state any material fact regarding such Electing Holder or such Electing Holder’s intended method of disposition of such Registrable Securities required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and promptly to furnish to the Company any additional information required to correct and update any previously furnished information or required so that such prospectus shall not contain, with respect to such Electing Holder or the disposition of such Registrable Securities, an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing.
(g)    Until the expiration of the earlier of two years after the Closing Date and the date on which all Securities have ceased to be Registrable Securities, the Company will not, and will not permit any of its “affiliates” (as defined in Rule 144) to, resell any of the Securities that have been reacquired by any of them except pursuant to an effective registration statement, or a valid exemption from the registration requirements, under the Securities Act.
(h)    As a condition to its participation in the Exchange Offer, each holder of Registrable Securities shall furnish, upon the request of the Company, a written representation to the Company (which may be contained in the letter of transmittal or “agent’s message” transmitted via The Depository Trust Company’s Automated Tender Offer Procedures, in either case contemplated by the Exchange Registration Statement) to the effect that (A) it is not an “affiliate” of the Company, as defined in Rule 405 of the Securities Act, or if it is such an “affiliate”, it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (B) it is not engaged in and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of the Exchange Securities to be issued in the Exchange Offer, (C) it is acquiring the Exchange Securities in its ordinary course of business, (D) if it is a broker-dealer that holds Securities that were acquired for its own account as a result of market-making activities or other trading activities (other than Securities acquired directly from the Company or any of its affiliates), it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the Exchange Securities received 

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by it in the Exchange Offer, (E) if it is a broker-dealer, that it did not purchase the Securities to be exchanged in the Exchange Offer from the Company or any of its affiliates, and (F) it is not acting on behalf of any person who could not truthfully and completely make the representations contained in the foregoing subclauses (A) through (E).
4.     Registration Expenses.
The Company agrees to bear and to pay or cause to be paid promptly all expenses incident to the Company’s performance of or compliance with this Agreement, including (a) all Commission and any FINRA registration, filing and review fees and expenses including reasonable fees and disbursements of counsel for the Eligible Holders in connection with such registration, filing and review, (b) all fees and expenses in connection with the qualification of the Registrable Securities, the Securities and the Exchange Securities, as applicable, for offering and sale under the State securities and blue sky laws referred to in Section 3(d)(xii) and determination of their eligibility for investment under the laws of such jurisdictions described in such section, including any reasonable fees and disbursements of counsel for the Electing Holders in connection with such qualification and determination, (c) all expenses relating to the preparation, printing, production, distribution and reproduction of each registration statement required to be filed hereunder, each prospectus included therein or prepared for distribution pursuant hereto, each amendment or supplement to the foregoing, the expenses of preparing the Securities or Exchange Securities, as applicable, for delivery and the expenses of printing or producing any selling agreements and blue sky memoranda and all other documents in connection with the offering, sale or delivery of Securities or Exchange Securities, as applicable, to be disposed of (including certificates representing the Securities or Exchange Securities, as applicable), (d) messenger, telephone and delivery expenses relating to the offering, sale or delivery of Securities or Exchange Securities, as applicable, and the preparation of documents referred in clause (c) above, (e) fees and expenses of the Trustee under the Indenture, any agent of the Trustee and any counsel for the Trustee and of any collateral agent or custodian, (f) internal expenses (including all salaries and expenses of the Company’s officers and employees performing legal or accounting duties), (g) reasonable fees, disbursements and expenses of counsel and independent certified public accountants of the Company, (h) reasonable fees, disbursements and expenses of one counsel for the Electing Holders retained in connection with a Shelf Registration, as selected by the Electing Holders of at least a majority in aggregate principal amount of the Registrable Securities held by Electing Holders (which counsel shall be reasonably satisfactory to the Company), (i) any fees charged by securities rating services for rating the Registrable Securities, the Securities or the Exchange Securities, as applicable, and (j) fees, expenses and disbursements of any other persons, including special experts, retained by the Company in connection with such registration (collectively, the “Registration Expenses”).  To the extent that any Registration Expenses are incurred, assumed or paid by any holder of Registrable Securities, Securities or Exchange Securities, as applicable, the Company shall reimburse such person for the full amount of the Registration Expenses so incurred, assumed or paid promptly after receipt of a request therefor.  Notwithstanding the foregoing, the holders of the Registrable Securities being registered shall pay all agency fees and commissions and underwriting discounts and commissions, if any, and transfer taxes, if any, attributable to the sale of such Registrable Securities, Securities and Exchange Securities, as applicable, and the fees and disbursements of any counsel or other advisors or experts retained by such holders (severally or jointly), other than the counsel and experts specifically referred to above.

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5.     Representations and Warranties.
Each of the Company and the Guarantors, jointly and severally, represents and warrants to, and agrees with, each Purchaser and each of the holders from time to time of Registrable Securities that:
(a)    Each registration statement covering Registrable Securities, Securities or Exchange Securities, as applicable, and each prospectus (including any preliminary or summary prospectus) contained therein or furnished pursuant to Section 3(c) or Section 3(d) and any further amendments or supplements to any such registration statement or prospectus, when it becomes effective or is filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Securities Act and the Trust Indenture Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and at all times subsequent to the Effective Time when a prospectus would be required to be delivered under the Securities Act, other than (A) from (i) such time as a notice has been given to holders of Registrable Securities pursuant to Section 3(c)(iii)(G) or Section 3(d)(viii)(G) until (ii) such time as the Company furnishes an amended or supplemented prospectus pursuant to Section 3(c)(iv) or Section 3(e) or (B) during any applicable Suspension Period, each such registration statement, and each prospectus (including any summary prospectus) contained therein or furnished pursuant to Section 3(c) or Section 3(d), as then amended or supplemented, will conform in all material respects to the requirements of the Securities Act and the Trust Indenture Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by a holder of Registrable Securities  expressly for use therein.
(b)    Any documents incorporated by reference in any prospectus referred to in Section 5(a), when they become or became effective or are or were filed with the Commission, as the case may be, will conform or conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and none of such documents will contain or contained an untrue statement of a material fact or will omit or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by a holder of Registrable Securities expressly for use therein.
(c)    The compliance by the Company and the Guarantors with all of the provisions of this Agreement will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under,  any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (ii) result in any violation of the provisions of the Certificate of Incorporation or By‐laws or comparable governing documents of the Company or the Guarantors, or (iii) result in the violation of any applicable statute or any applicable order, rule or regulation of any court or governmental agency or regulatory authority having jurisdiction over the Company or any of its subsidiaries or any of their properties, except in the case of clauses (i) and (iii) above, as would not, individually or in the 

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aggregate, have (or reasonably be expected to have) a material adverse effect on the business, properties, management, financial position or results of operations of the Company and its subsidiaries, taken as a whole or materially adversely affect the consummation of the transactions hereunder.
(d)    No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or regulatory authority is required for the consummation by the Company or the Guarantors of the transactions contemplated by this Agreement except (x) the registration under the Securities Act of the Registrable Securities, the Securities and the Exchange Securities, as applicable, and qualification of the Indenture under the Trust Indenture Act, (y) such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or blue sky laws in connection with the offering and distribution of the Registrable Securities, the Securities and the Exchange Securities, as applicable, and (z) such consents, approvals, authorizations, registrations or qualifications that have been obtained and are in full force and effect as of the date hereof.
(e)    This Agreement has been duly authorized, executed and delivered by the Company and by the Guarantors.
6.     Indemnification and Contribution.
(a)    Indemnification by the Company and the Guarantors.  The Company and the Guarantors, jointly and severally, will indemnify and hold harmless each of the holders of Registrable Securities included in an Exchange Registration Statement and each of the Electing Holders as holders of Registrable Securities included in a Shelf Registration Statement against any losses, claims, damages or liabilities, joint or several, to which such holder or such Electing Holder may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Exchange Registration Statement or any Shelf Registration Statement, as the case may be, under which such Registrable Securities, Securities or Exchange Securities were registered under the Securities Act, or any preliminary, final or summary prospectus (including, without limitation, any “issuer free writing prospectus” as defined in Rule 433) contained therein or furnished by the Company to any such holder or any such Electing Holder, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each such holder and each such Electing Holder for any and all legal or other expenses reasonably incurred by them in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that neither the Company nor the Guarantors shall be liable to any such person in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, or preliminary, final or summary prospectus (including, without limitation, any “issuer free writing prospectus” as defined in Rule 433), or amendment or supplement thereto, in reliance upon and in conformity with written information furnished to the Company by such person expressly for use therein.
(b)    Indemnification by the Electing Holders.  The Company may require, as a condition to including any Registrable Securities in any Shelf Registration Statement filed pursuant to Section 2(b), that the Company shall have received an undertaking reasonably satisfactory to it from each Electing 

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Holder of Registrable Securities included in such Shelf Registration Statement, severally and not jointly, to (i) indemnify and hold harmless the Company, the Guarantors and all other Electing Holders of Registrable Securities included in such Shelf Registration Statement, against any losses, claims, damages or liabilities to which the Company, the Guarantors or such other Electing Holders may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in such registration statement, or any preliminary, final or summary prospectus (including, without limitation, any “issuer free writing prospectus” as defined in Rule 433) contained therein or furnished by the Company to any Electing Holder, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Electing Holder expressly for use therein, and (ii) reimburse the Company and the Guarantors for any legal or other expenses reasonably incurred by the Company and the Guarantors in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that no such Electing Holder shall be required to undertake liability to any person under this Section 6(b) for any amounts in excess of the dollar amount of the proceeds to be received by such Electing Holder from the sale of such Electing Holder’s Registrable Securities pursuant to such registration. 
(c)    Notices of Claims, Etc.  Promptly after receipt by an indemnified party under Section 6(a) or Section 6(b) above of written notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party pursuant to the indemnification provisions of or contemplated by this Section 6, notify such indemnifying party in writing of the commencement of such action; provided that the omission so to notify the indemnifying party shall not relieve it from any liability that it may have under subsection (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under the indemnification provisions of or contemplated by Section 6(a) or Section 6(b).  In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, such indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, such indemnifying party shall not be liable to such indemnified party for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation.  In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the contrary; (ii) the indemnifying party has failed within a reasonable time to retain counsel reasonably satisfactory to the indemnified party; (iii) the indemnified party shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition 

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to those available to the indemnifying party; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.  It is understood and agreed that the indemnifying party shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all indemnified parties, and that all such fees and expenses shall be reimbursed as they are incurred.  Any such separate firm for any Purchaser, its affiliates, directors and officers and any control persons of such Purchaser shall be designated in writing by the Representatives and any such separate firm for the Company, the Guarantors, their respective directors and officers and any control persons of the Company and the Guarantors shall be designated in writing by the Company.  No indemnifying party shall, without the prior written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of any indemnified party.
(d)    Contribution.  If for any reason the indemnification provisions contemplated by Section 6(a) or Section 6(b) are unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations.  The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or by such indemnified party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 6(d) were determined by pro rata allocation (even if the holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 6(d).  The amount paid or payable by an indemnified party as a result of the losses, claims, damages, or liabilities (or actions in respect thereof) referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this Section 6(d), no Electing Holder shall be required to contribute any amount in excess of the amount by which the dollar amount of the proceeds received by such holder from the sale of any Registrable Securities (after deducting any fees, discounts and commissions applicable thereto) exceeds the amount of any damages which such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall 

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be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  The holders’ obligations in this Section 6(d) to contribute shall be several in proportion to the principal amount of Registrable Securities registered by them and not joint.
(e)    The obligations of the Company and the Guarantors under this Section 6 shall be in addition to any liability which the Company or the Guarantors may otherwise have and shall extend, upon the same terms and conditions, to each officer, director and partner of each holder, each Electing Holder, and each person, if any, who controls any of the foregoing within the meaning of the Securities Act; and the obligations of the holders and the Electing Holders contemplated by this Section 6 shall be in addition to any liability which the respective holder or Electing Holder may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company or the Guarantors (including any person who, with his or her consent, is named in any registration statement as about to become a director of the Company or a Guarantor) and to each person, if any, who controls the Company within the meaning of the Securities Act, as well as to each officer and director of the other holders and to each person, if any, who controls such other holders within the meaning of the Securities Act.
7.     Underwritten Offerings.
Each holder of Registrable Securities hereby agrees with the Company and each other such holder that no holder of Registrable Securities may participate in any underwritten offering hereunder unless (a) the Company gives its prior written consent to such underwritten offering, (b) the managing underwriter or underwriters thereof shall be designated by Electing Holders holding at least a majority in aggregate principal amount of the Registrable Securities to be included in such offering, provided that such designated managing underwriter or underwriters is or are reasonably acceptable to the Company, (c) each holder of Registrable Securities participating in such underwritten offering agrees to sell such holder’s Registrable Securities on the basis provided in any underwriting arrangements approved by the persons entitled selecting the managing underwriter or underwriters hereunder and (d) each holder of Registrable Securities participating in such underwritten offering completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.  
8.     Rule 144.
(a)    Facilitation of Sales Pursuant to Rule 144.  The Company covenants to the holders of Registrable Securities that to the extent it shall be required to do so under the Exchange Act, the Company shall use commercially reasonable efforts to timely file the reports required to be filed by it under the Exchange Act or the Securities Act (including the reports under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144), and shall take such further action as any holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holder to sell Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144.  If at any time the Company is a “non-reporting issuer” as such term is defined under Rule 144(c)(2), then in connection with any sale by a holder pursuant to Rule 144(c), the Company shall deliver a statement to such holder as to the Company’s compliance with the reporting requirements contemplated by Rule 144(c)(2).

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(b)    Availability of Rule 144 Not Excuse for Obligations under Section 2.  The fact that holders of Registrable Securities may become eligible to sell such Registrable Securities pursuant to Rule 144 shall not (1) cause such Securities to cease to be Registrable Securities or (2) excuse the Company’s and the Guarantors’ obligations set forth in Section 2 of this Agreement, including without limitation the obligations in respect of an Exchange Offer, Shelf Registration and Special Interest.
9.     Miscellaneous.
(a)    No Inconsistent Agreements.  The Company and each of the Guarantors represents, warrants, covenants and agrees that it has not granted, and shall not grant, registration rights with respect to Registrable Securities, Exchange Securities or Securities, as applicable, or any other securities which would be inconsistent with the terms contained in this Agreement.
(b)    Specific Performance.  The parties hereto acknowledge that there would be no adequate remedy at law if the Company fails to perform any of its obligations hereunder and that the Purchasers and the holders from time to time of the Registrable Securities may be irreparably harmed by any such failure, and accordingly agree that the Purchasers and such holders, in addition to any other remedy to which they may be entitled at law or in equity, shall be entitled to compel specific performance of the obligations of the Company under this Agreement in accordance with the terms and conditions of this Agreement, in any court of the United States or any State thereof having jurisdiction.  Time shall be of the essence in this Agreement.
(c)    Notices.  All notices, requests, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand, if delivered personally, by facsimile or by courier, or three days after being deposited in the mail (registered or certified mail, postage prepaid, return receipt requested) as follows: If to the Company, to it at 11819 N. Pennsylvania St., Carmel, IN 46032, and if to a holder, to the address of such holder set forth in the security register or other records of the Company, or to such other address as the Company or any such holder may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
(d)    Parties in Interest.  All the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto, the holders from time to time of the Registrable Securities and the respective successors and assigns of the foregoing.  In the event that any transferee of any holder of Registrable Securities shall acquire Registrable Securities, in any manner, whether by gift, bequest, purchase, operation of law or otherwise, such transferee shall, without any further writing or action of any kind, be deemed a beneficiary hereof for all purposes and such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities such transferee shall be entitled to receive the benefits of, and be conclusively deemed to have agreed to be bound by all of the applicable terms and provisions of this Agreement.  If the Company shall so request, any such successor, assign or transferee shall agree in writing to acquire and hold the Registrable Securities subject to all of the applicable terms hereof.
(e)    Survival.  The respective indemnities, agreements, representations, warranties and each other provision set forth in this Agreement or made pursuant hereto shall remain in full force and effect 

21 

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[[NYCORP:3425658v9:4340W: 10/03/2013--02:19 PM]]

regardless of any investigation (or statement as to the results thereof) made by or on behalf of any holder of Registrable Securities, any director, officer or partner of such holder, or any controlling person of any of the foregoing, and shall survive delivery of and payment for the Registrable Securities pursuant to the Purchase Agreement, the transfer and registration of Registrable Securities by such holder and the consummation of an Exchange Offer.
(f)    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
(g)    Headings.  The descriptive headings of the several Sections and paragraphs of this Agreement are inserted for convenience only, do not constitute a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement.
(h)    Entire Agreement; Amendments.  This Agreement and the other writings referred to herein (including the Indenture and the form of Securities) or delivered pursuant hereto which form a part hereof contain the entire understanding of the parties with respect to its subject matter.  This Agreement supersedes all prior agreements and understandings between the parties with respect to its subject matter.  This Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument duly executed by the Company and the holders of at least a majority in aggregate principal amount of the Registrable Securities at the time outstanding.  Each holder of any Registrable Securities at the time or thereafter outstanding shall be bound by any amendment or waiver effected pursuant to this Section 9(h), whether or not any notice, writing or marking indicating such amendment or waiver appears on such Registrable Securities or is delivered to such holder.
 (i)    Counterparts.  This Agreement may be executed by the parties in counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument.
(j)    Severability.  If any provision of this Agreement, or the application thereof in any circumstance, is held to be invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of such provision in every other respect and of the remaining provisions contained in this Agreement shall not be affected or impaired thereby.
(l)    Agent for Service; Submission to Jurisdiction.  Holdings irrevocably appoints Schlage Lock Company LLC, a Delaware limited liability company, located at 11819 North Pennsylvania Street, Carmel, Indiana 46032, and Schlage Lock Company LLC hereby accepts such appointment, as Holdings’ authorized agent in the Borough of Manhattan in The City of New York upon which process may be served in any such suit or proceeding, and agrees that service of process upon such authorized agent, and written notice of such service to Holdings or Schlage Lock Company LLC, as the case may be, by the person serving the same to the address provided in this clause 9(l), shall be deemed in every respect effective service of process upon Holdings in any such suit or proceeding. Holdings hereby represents and warrants that such authorized agent has accepted such appointment and has agreed to act as such authorized agent for service of process. Nothing herein shall affect the right of any Purchaser or any person controlling any Purchaser to serve process in any other manner permitted by law.

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If the foregoing is in accordance with your understanding, please sign and return to us one counterpart hereof for each of the Company, the Guarantors and each of the Representatives plus one for each counsel, and upon the acceptance hereof by you, on behalf of each of the Purchasers, this letter and such acceptance hereof shall constitute a binding agreement between each of the Purchasers, the Guarantors and the Company.  It is understood that your acceptance of this letter on behalf of each of the Purchasers is pursuant to the authority set forth in a form of Agreement among Purchasers, the form of which shall be submitted to the Company for examination upon request, but without warranty on your part as to the authority of the signers thereof.

23 

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[[NYCORP:3425658v9:4340W: 10/03/2013--02:19 PM]]

Very truly yours,
ALLEGION US HOLDING COMPANY INC.
By: /s/ Patrick S. Shannon        
Name: Patrick S. Shannon
Title: President

ALLEGION public limited company
By: /s/ Patrick S. Shannon        
Name: Patrick S. Shannon
Title: Senior Vice President and Chief Financial Officer

Schlage Lock Company LLC
By: /s/ Patrick S. Shannon        
Name: Patrick S. Shannon
Title: Vice President and Treasurer

Von Duprin LLC
By: /s/ Patrick S. Shannon        
Name: Patrick S. Shannon
Title: Vice President and Treasurer
 

                                     

                       

24 

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[[NYCORP:3425658v9:4340W: 10/03/2013--02:19 PM]]

  Accepted as of the date hereof:

Goldman, Sachs & Co.

By: /s/ Michael Hickey        
Name: Michael Hickey
Title: Vice President

J.P. Morgan Securities LLC

By: /s/ Stathis Karanikolaidis
Name: Stathis Karanikolaidis
Title: Managing Director

On behalf of each of the Purchasers

Very truly yours,
ALLEGION US HOLDING COMPANY INC.
By:        
Name:
Title:
 
ALLEGION PUBLIC LIMITED COMPANY
By:        
Name:
Title:

 
SCHLAGE LOCK COMPANY LLC
By:        
Name:
Title:

VON DUPRIN LLC
By:        
Name:
Title:
 
 

                                      
 
 
 
 
 
                                    
Accepted as of the date hereof:

Goldman, Sachs & Co.

By:        
Name:
 
Title: 

J.P. Morgan Securities LLC

By:        
 
Name:
 
Title:

On behalf of each of the Purchasers

Exhibit A
Allegion US Holding Company Inc.
INSTRUCTION TO DTC PARTICIPANTS
(Date of Mailing)
URGENT - IMMEDIATE ATTENTION REQUESTED
DEADLINE FOR RESPONSE:  [DATE] * 

The Depository Trust Company (“DTC”) has identified you as a DTC Participant through which beneficial interests in the Allegion US Holding Company Inc. (the “Company”) [●]% Senior Notes due 2021 (the “Securities”) are held.
The Company is in the process of registering the Securities under the Securities Act of 1933 for resale by the beneficial owners thereof.  In order to have their Securities included in the registration statement, beneficial owners must complete and return the enclosed Notice of Registration Statement and Selling Securityholder Questionnaire.
It is important that beneficial owners of the Securities receive a copy of the enclosed materials as soon as possible as their rights to have the Securities included in the registration statement depend upon their returning the Notice and Questionnaire by [Deadline For Response].  Please forward a copy of the enclosed documents to each beneficial owner that holds interests in the Securities through you.  If you require more copies of the enclosed materials or have any questions pertaining to this matter, please contact Allegion US Holding Company Inc., [Address and Telephone Number of Issuer].
Allegion US Holding Company Inc.
Notice of Registration Statement 
and 
Selling Securityholder Questionnaire
(Date)

Reference is hereby made to the Exchange and Registration Rights Agreement (the “Exchange and Registration Rights Agreement”) between Allegion US Holding Company Inc. (the “Company”) and the Purchasers named therein.  Pursuant to the Exchange and Registration Rights Agreement, the Company has filed or will file with the United States Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (the “Shelf Registration Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Company’s 5.75% Senior Notes due 2021 (the “Securities”).  A copy of the Exchange and Registration Rights Agreement has been filed as an exhibit to the Shelf Registration Statement and can be obtained from the Commission’s website at www.sec.gov.  All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Exchange and Registration Rights Agreement.
Each beneficial owner of Registrable Securities (as defined below) is entitled to have the Registrable Securities beneficially owned by it included in the Shelf Registration Statement.  In order to have Registrable Securities included in the Shelf Registration Statement, this Notice of Registration Statement and Selling Securityholder Questionnaire (“Notice and Questionnaire”) must be completed, executed and delivered to the Company’s counsel at the address set forth herein for receipt ON OR BEFORE [Deadline for Response].  Beneficial owners of Registrable Securities who do not properly complete, execute and return this Notice and Questionnaire by such date (i) will not be named as selling securityholders in the Shelf Registration Statement and (ii) may not use the Prospectus forming a part thereof for resales of Registrable Securities.
Certain legal consequences arise from being named as a selling securityholder in the Shelf Registration Statement and related Prospectus.  Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling securityholder in the Shelf Registration Statement and related Prospectus.
The term “Registrable Securities” is defined in the Exchange and Registration Rights Agreement.

ELECTION

The undersigned holder (the “Selling Securityholder”) of Registrable Securities hereby elects to include in the Shelf Registration Statement the Registrable Securities beneficially owned by it and listed below in Item (3).  The undersigned, by signing and returning this Notice and Questionnaire, agrees to be bound with respect to such Registrable Securities by the terms and conditions of this Notice and Questionnaire and the Exchange and Registration Rights Agreement, including, without limitation, Section 6 of the Exchange and Registration Rights Agreement, as if the undersigned Selling Securityholder were an original party thereto.
Pursuant to the Exchange and Registration Rights Agreement, the undersigned has agreed to indemnify and hold harmless the Company, its officers who sign any Shelf Registration Statement, and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act of 1934, as amended (the “Exchange Act”), against certain losses arising out of an untrue statement, or the alleged untrue statement, of a material fact in the Shelf Registration Statement or the related prospectus or the omission, or alleged omission, to state a material fact required to be stated in such Shelf Registration Statement or the related prospectus, but only to the extent such untrue statement or omission, or alleged untrue statement or omission, was made in reliance on and in conformity with the information provided in this Notice and Questionnaire.
Upon any sale of Registrable Securities pursuant to the Shelf Registration Statement, the Selling Securityholder will be required to deliver to the Company and Trustee the Notice of Transfer set forth in Appendix A to the Prospectus and as Exhibit B to the Exchange and Registration Rights Agreement.
The Selling Securityholder hereby provides the following information to the Company and represents and warrants that such information is accurate and complete:
QUESTIONNAIRE

		
	(1)
	(a)        Full legal name of Selling Securityholder:

            
(b)        Full legal name of registered Holder (if not the same as in (a) above) of Registrable Securities listed in Item (3) below:
            
(c)        Full legal name of DTC Participant (if applicable and if not the same as (b) above) through which Registrable Securities listed in Item (3) below are held:
            

		
	(2)
	Address for notices to Selling Securityholder:

            
            
            
Telephone:        
Fax:        
Contact Person:        
E-mail for Contact Person:     

		
	(3)
	Beneficial Ownership of Securities:

Except as set forth below in this Item (3), the undersigned does not beneficially own any Securities.
(a)    Principal amount of Registrable Securities beneficially owned:      
 
CUSIP No(s). of such Registrable Securities:      
(b)    Principal amount of Securities other than Registrable Securities beneficially owned:
 
    
 
CUSIP No(s). of such other Securities:      
(c)    Principal amount of Registrable Securities that the undersigned wishes to be included in the Shelf Registration Statement:      
 
CUSIP No(s). of such Registrable Securities to be included in the Shelf Registration Statement:      

		
	(4)
	Beneficial Ownership of Other Securities of the Company:

Except as set forth below in this Item (4), the undersigned Selling Securityholder is not the beneficial or registered owner of any other securities of the Company, other than the Securities listed above in Item (3).
State any exceptions here:
            
            
            

		
	(5)
	Individuals who exercise dispositive powers with respect to the Securities:

If the Selling Securityholder is not an entity that is required to file reports with the Commission pursuant to Section 13 or 15(d) of the Exchange Act (a “Reporting Company”), then the Selling Securityholder must disclose the name of the natural person(s) who exercise sole or shared dispositive powers with respect to the Securities.  Selling Securityholders should disclose the beneficial holders, not nominee holders or other such others of record.  In addition, the Commission has provided guidance that Rule 13d-3 of the Securities Exchange Act of 1934 should be used by analogy when determining the person or persons sharing voting and/or dispositive powers with respect to the Securities.
(a)    Is the holder a Reporting Company?
Yes            No        

If “No”, please answer Item (5)(b).
		
	(b)
	List below the individual or individuals who exercise dispositive powers with respect to the Securities:

            
            
            
Please note that the names of the persons listed in (b) above will be included in the Shelf Registration Statement and related Prospectus.
		
	(6)
	Relationships with the Company:

Except as set forth below, neither the Selling Securityholder nor any of its affiliates, officers, directors or principal equity holders (5% or more) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.
State any exceptions here:
            
            
            

		
	(7)
	Plan of Distribution:

Except as set forth below, the undersigned Selling Securityholder intends to distribute the Registrable Securities listed above in Item (3) only as follows (if at all):  Such Registrable Securities may be sold from time to time directly by the undersigned Selling Securityholder.  Such Registrable Securities may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale, or at negotiated prices.  Such sales may be effected in transactions (which may involve crosses or block transactions) (i) on any national securities exchange or quotation service on which the Registered Securities may be listed or quoted at the time of sale, (ii) in the over-the-counter market, (iii) in transactions otherwise than on such exchanges or services or in the over-the-counter market, or (iv) through the writing of options.  In connection with sales of the Registrable Securities or otherwise, the Selling Securityholder may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the Registrable Securities in the course of hedging the positions they assume.  The Selling Securityholder may also sell Registrable Securities short and deliver Registrable Securities to close out such short positions, or loan or pledge Registrable Securities to broker-dealers that in turn may sell such securities.
State any exceptions here:
            
            
            
Note:  In no event may such method(s) of distribution take the form of an underwritten offering of Registrable Securities without the prior written agreement of the Company.

		
	(8)
	Broker-Dealers:

The Commission requires that all Selling Securityholders that are registered broker-dealers or affiliates of registered broker-dealers be so identified in the Shelf Registration Statement.  In addition, the Commission requires that all Selling Securityholders that are registered broker-dealers be named as underwriters in the Shelf Registration Statement and related Prospectus, even if they did not receive the Registrable Securities as compensation for underwriting activities.
(a)    State whether the undersigned Selling Securityholder is a registered broker-dealer:
Yes            No        
(b)    If the answer to (a) is “Yes”, you must answer (i) and (ii) below, and (iii) below if applicable.  Your answers to (i) and (ii) below, and (iii) below if applicable, will be included in the Shelf Registration Statement and related Prospectus.
		
	(i)
	Were the Securities acquired as compensation for underwriting activities?

Yes            No        
If you answered “Yes”, please provide a brief description of the transaction(s) in which the Securities were acquired as compensation:
            
            
            
		
	(ii)
	Were the Securities acquired for investment purposes?

Yes            No        
		
	(iii)
	If you answered “No” to both (i) and (ii), please explain the Selling Securityholder’s reason for acquiring the Securities:

            
            
            

(c)    State whether the undersigned Selling Securityholder is an affiliate of a registered broker-dealer and, if so, list the name(s) of the broker-dealer affiliate(s):
Yes            No        
            
            
            
(d)    If you answered “Yes” to question (c) above:
(i)    Did the undersigned Selling Securityholder purchase Registrable Securities in the ordinary course of business?
Yes            No        
If the answer is “No” to question (d)(i), provide a brief explanation of the circumstances in which the Selling Securityholder acquired the Registrable Securities:
            
            
            
(ii)    At the time of the purchase of the Registrable Securities, did the undersigned Selling Securityholder have any agreements, understandings or arrangements, directly or indirectly, with any person to dispose of or distribute the Registrable Securities?
Yes            No        
If the answer is “Yes” to question (d)(ii), provide a brief explanation of such agreements, understandings or arrangements:
            
            
            
If the answer is “No” to Item (8)(d)(i) or “Yes” to Item (8)(d)(ii), you will be named as an underwriter in the Shelf Registration Statement and the related Prospectus.
		
	(9)
	Hedging and short sales:

(a)    State whether the undersigned Selling Securityholder has or will enter into “hedging transactions” with respect to the Registrable Securities:
Yes            No        
If “Yes”, provide below a complete description of the hedging transactions into which the undersigned Selling Securityholder has entered or will enter and the purpose of such hedging transactions, including the extent to which such hedging transactions remain in place:
            
            
            
(b)    Set forth below is Interpretation A.65 of the Commission’s July 1997 Manual of Publicly Available Interpretations regarding short selling:
“An issuer filed a Form S-3 registration statement for a secondary offering of common stock which is not yet effective.  One of the selling shareholders wanted to do a short sale of common stock “against the box” and cover the short sale with registered shares after the effective date.  The issuer was advised that the short sale could not be made before the registration statement becomes effective, because the shares underlying the short sale are deemed to be sold at the time such sale is made.  There would, therefore, be a violation of Section 5 if the shares were effectively sold prior to the effective date.”
By returning this Notice and Questionnaire, the undersigned Selling Securityholder will be deemed to be aware of the foregoing interpretation.

*    *    *    *    *

By signing below, the Selling Securityholder acknowledges that it understands its obligation to comply, and agrees that it will comply, with the provisions of the Exchange Act, particularly Regulation M (or any successor rule or regulation).
The Selling Securityholder hereby acknowledges its obligations under the Exchange and Registration Rights Agreement to indemnify and hold harmless the Company and certain other persons as set forth in the Exchange and Registration Rights Agreement.
In the event that the Selling Securityholder transfers all or any portion of the Registrable Securities listed in Item (3) above after the date on which such information is provided to the Company, the Selling Securityholder agrees to notify the transferee(s) at the time of the transfer of its rights and obligations under this Notice and Questionnaire and the Exchange and Registration Rights Agreement.
By signing below, the Selling Securityholder consents to the disclosure of the information contained herein in its answers to Items (1) through (9) above and the inclusion of such information in the Shelf Registration Statement and related Prospectus.  The Selling Securityholder understands that such information will be relied upon by the Company in connection with the preparation of the Shelf Registration Statement and related Prospectus.
In accordance with the Selling Securityholder’s obligation under Section 3(d) of the Exchange and Registration Rights Agreement to provide such information as may be required by law for inclusion in the Shelf Registration Statement, the Selling Securityholder agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein which may occur subsequent to the date hereof at any time while the Shelf Registration Statement remains in effect and to provide such additional information that the Company may reasonably request regarding such Selling Securityholder and the intended method of distribution of Registrable Securities in order to comply with the Securities Act.  Except as otherwise provided in the Exchange and Registration Rights Agreement, all notices hereunder and pursuant to the Exchange and Registration Rights Agreement shall be made in writing, by hand-delivery, first-class mail, or air courier guaranteeing overnight delivery as follows:
(i)    To the Company:
_________________________
_________________________
_________________________
_________________________
_________________________
(ii)    With a copy to:
_________________________
_________________________
_________________________
_________________________
_________________________

Once this Notice and Questionnaire is executed by the Selling Securityholder and received by the Company’s counsel, the terms of this Notice and Questionnaire, and the representations and warranties contained herein, shall be binding on, shall inure to the benefit of and shall be enforceable by the respective successors, heirs, personal representatives, and assigns of the Company and the Selling Securityholder (with respect to the Registrable Securities beneficially owned by such Selling Securityholder and listed in Item (3) above.  This Notice and Questionnaire shall be governed in all respects by the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.
Dated:      

        
Selling Securityholder
(Print/type full legal name of beneficial owner of Registrable Securities)

By:      
Name:
Title:

PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY’S COUNSEL AT:
_________________________
_________________________
_________________________
_________________________
_________________________

Exhibit B
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
Wells Fargo Bank, N.A.
Allegion US Holding Company Inc.
c/o Wells Fargo Bank, N.A.
10 South Wacker Drive, 13th Floor
Chicago, Illinois 60606
Attention: Gregory S. Clarke 

Attention:  Trust Officer
Re:    Allegion US Holding Company Inc. (the “Company”)
5.75% Senior Notes due 2021

Dear Sirs:
Please be advised that ___                 has transferred $                 aggregate principal amount of the above-referenced Notes pursuant to an effective Registration Statement on Form [      ] (File No. 333-         ) filed by the Company.
We hereby certify that the prospectus delivery requirements, if any, of the Securities Act of 1933, as amended, have been satisfied and that the above-named beneficial owner of the Notes is named as a “Selling Holder” in the Prospectus dated [date] or in supplements thereto, and that the aggregate principal amount of the Notes transferred are the Notes listed in such Prospectus opposite such owner’s name.
Dated:
Very truly yours,
                    
(Name)
By:                    
(Authorized Signature)

25 

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[[NYCORP:3425658v9:4340W: 10/03/2013--02:19 PM]]10.1 Form of Employee Matters Agreement

 
Exhibit 10.1
EMPLOYEE MATTERS AGREEMENT
THIS EMPLOYEE MATTERS AGREEMENT, dated as of [], 2013, is entered into by and between Ingersoll-Rand plc (“IR”), and Allegion plc (“Allegion”).  IR and Allegion are also referred to in this Agreement individually as a “Party” and collectively as the “Parties.” 
RECITALS
WHEREAS, IR has determined that it would be appropriate, desirable and in the best interests of IR and the shareholders of IR to separate the Allegion Business from IR; 
WHEREAS, IR and Allegion have entered into the Separation and Distribution Agreement, dated as of [], 2013 (the “Distribution Agreement”), in connection with the separation of the Allegion Business from IR (the “Transaction”) and the Distribution of Allegion Ordinary Shares to shareholders of IR; 
WHEREAS, the Distribution Agreement also provides for the execution and delivery of certain other agreements, including this Agreement, in order to facilitate and provide for the separation of Allegion and its subsidiaries from IR; and 
WHEREAS, to ensure an orderly transition under the Distribution Agreement, it will be necessary for the Parties to allocate between them Assets, Liabilities and responsibilities with respect to certain employee compensation and benefit plans and programs, and certain other employment matters. 
NOW, THEREFORE, in consideration of the foregoing and the covenants and agreements set forth below and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows: 
Article I
DEFINITIONS
Section 1.1    Definitions.  As used in this Agreement, the following terms shall have the meanings set forth in this Section 1.1.  Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms in the Distribution Agreement.
“Adjusted Exercisable IR Award” has the meaning set forth in Section 4.2(a)(i).
“Adjusted Exercisable IR Award Spread Value Allocation” means an amount equal to (X) multiplied by ((Y) divided by (Z)), where (X) equals the Exercisable IR Award Spread Value, (Y) equals the IR Post-Distribution Share Value, and (Z) equals the sum of (a) (the Allegion Post-Distribution Share Value multiplied by the Distribution Ratio), plus (b) the IR Post-Distribution Share Value.
“Adjusted Unexercisable IR Award” has the meaning set forth in Section 4.2(a)(ii)(A).
“Affiliate” has the meaning set forth in the Distribution Agreement.
“Agreement” means this Employee Matters Agreement, together with all schedules hereto and all amendments, modifications, and changes hereto entered into pursuant to Section 15.9.
“Allegion” has the meaning set forth in the preamble to this Agreement.
“Allegion Actuary” means an independent actuary selected by Allegion.

“Allegion Benefit Plan” means any Benefit Plan sponsored or maintained by a member of the Allegion Group following the Effective Time.
“Allegion Business” has the meaning set forth in the Distribution Agreement.
“Allegion Canada DC Pension Plan” has the meaning set forth in Section 14.5.
“Allegion Deferred Compensation Plan Beneficiary” has the meaning set forth in Section 8.1(a).
“Allegion Deferred Compensation Plans” has the meaning set forth in Section 8.1(a).
“Allegion Entity” means any member of the Allegion Group, including any Transferred Group Entity. 
“Allegion Equity Plan” means the plan adopted by Allegion prior to the Effective Time under which the Allegion equity-based awards described in Article IV shall be issued.
“Allegion Exercisable Award” has the meaning set forth in Section 4.2(a)(i).
“Allegion Exercisable Award Spread Value Allocation” means an amount equal to (X) multiplied by ((Y) divided by (Z)), where (X) equals the Exercisable IR Award Spread Value, (Y) equals Allegion Post-Distribution Share Value multiplied by the Distribution Ratio, and (Z) equals the sum of (a) (the Allegion Post-Distribution Share Value multiplied by the Distribution Ratio) plus (b) the IR Post-Distribution Share Value.
“Allegion FSA” has the meaning set forth in Section 9.3(b).
“Allegion Group” shall have the same meaning as the term “Allegion Group” in the Distribution Agreement.
“Allegion Group Employee” means any individual who primarily provides services for the benefit of a member of the Allegion Group, including a Transferred Group Entity, immediately prior to the Effective Time.  Schedule A attached hereto provides a non-exhaustive list of Allegion Group Employees, which may be updated from time to time.
“Allegion HRA” has the meaning set forth in Section 9.2(d).
“Allegion Notional Shares” has the meaning set forth in Section 4.5(b).
“Allegion Ordinary Share Unit Fund” means an investment fund in the Schlage Lock, Company LLC 401(k) Plan or the IR Savings Plan, as applicable, that holds units of Allegion Ordinary Shares and cash.
“Allegion Ordinary Shares” means the ordinary shares, par value $[] per share, of Allegion.
“Allegion Pension Plan Participants” has the meaning set forth in Section 14.1.
“Allegion Post-Distribution Share Value” means the opening price per share of Allegion Ordinary Shares trading on the NYSE during Regular Trading Hours on the first Trading Day following the Effective Time.
“Allegion Ratio” means the quotient obtained by dividing the Allegion Post-Distribution Share Value by the IR Pre-Distribution Share Value.
“Allegion RSUs” has the meaning set forth in Section 4.3(b).
“Allegion Severance Arrangements” shall have the meaning set forth in Section 12.2.
“Allegion Severance Plan Adoption Date” shall have the meaning set forth in Section 12.1.
“Allegion Spin-Off Protection Plan” has the meaning set forth in Section 12.1.

“Allegion UK Pension Plan” has the meaning set forth in Section 14.1.
“Allegion Unexercisable Award” has the meaning set forth in Section 4.2(a)(ii)(B).
“Allegion Welfare Plan” means any Welfare Plan sponsored or maintained by any one or more members of the Allegion Group immediately after the Effective Time.
“Allegion Welfare Plan Implementation Date” has the meaning set forth in Section 9.1.
“Allegion Welfare Plan Participants” has the meaning set forth in Section 9.1.
“Assets” has the meaning set forth in the Distribution Agreement.
“Benefit Management Records” has the meaning set forth in Section 3.3(b).
“Benefit Plan” means any contract, agreement, policy, practice, program, plan, trust, commitment or arrangement providing for benefits, perquisites or compensation of any nature to any Employee, or to any eligible family member, dependent, or beneficiary of any such Employee, including pension plans (qualified and nonqualified), thrift plans, deferred compensation plans (qualified and nonqualified), supplemental pension plans and welfare plans, and contracts, agreements, policies, practices, programs, plans, trusts, commitments and arrangements providing for terms of employment, fringe benefits, severance benefits, change in control protections or benefits, medical, retiree medical, dental, vision, travel and accident, life, disability and accident insurance, tuition reimbursement, travel reimbursement, vacation, sick, personal or bereavement days, leaves of absences and holidays of IR or Allegion, as applicable.
“Business Days” means any day other than a Saturday or Sunday or a day on which banking institutions in Davidson, North Carolina are authorized or requested by Law to close.
“Canadian DC Pension Plan” has the meaning set forth in Section 14.4.
“Canadian Pension Plan Assignee” has the meaning set forth in Section 14.4.
“Canadian Pension Plan Member” means an Employee of a Transferred Group Entity in Canada who has an entitlement to a defined contribution account balance under the Canadian DC Pension Plan as of the Effective Time.
“COBRA” means the U.S. Consolidated Omnibus Budget Reconciliation Act of 1985, as codified at Section 601 et seq. of ERISA and at Section 4980B of the Code.
“Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder by the U.S. Department of the Treasury.
“Collective Bargaining Agreements” shall have the meaning set forth in Section 3.1(h).
“Distribution” has the meaning set forth in the Distribution Agreement.
“Distribution Agreement” has the meaning set forth in the recitals to this Agreement.
“Distribution Date” has the meaning set forth in the Distribution Agreement.
“Distribution Ratio” shall be the ratio of 1 Allegion Ordinary Shares for every 3 shares of IR Ordinary Shares.
“Effective Time” means the effective time of the Distribution.
“Employee” means any IR Group Employee, Former IR Group Employee, Allegion Group Employee or Former Allegion Group Employee.
“ERISA” means the U.S. Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

“Estimated Pension Plan Transfer Amount” shall have the meaning set forth in Section 6.2(b)(ii).
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Exercisable IR Award” has the meaning set forth in Section 4.2(a)(i).
“Exercisable IR Award Spread Value” means, with respect to any Exercisable IR Award, an amount equal to the number of IR Ordinary Shares subject to such Exercisable IR Award immediately prior to the Effective Time multiplied by the difference between (i) the IR Pre-Distribution Share Value and (ii) the exercise price of such Exercisable IR Award immediately prior to the Effective Time.
“FICA” has the meaning set forth in Section 3.1(f).
“Final Pension Plan Transfer Amount” shall have the meaning set forth in Section 6.2(b)(iv).
“Final Transfer Date” shall have the meaning set forth in Section 6.2(b)(v).
“FMLA” means the U.S. Family and Medical Leave Act, as amended, and the regulations promulgated thereunder.
“Former Allegion Group Employees” means all former employees of the IR Group who (i) primarily provided services for the benefit of the Allegion Business at the time their employment terminated or (ii) at the time of termination of employment, primarily provided services for a business for which any Liability, including Liabilities associated with Employees, is reflected on the Allegion Balance Sheet.  Schedule B attached hereto provides a non-exhaustive list of Former Allegion Group Employees, which may be updated from time to time.
“Former IR Group Employee” means all former employees of the IR Group who have an employment end date on or before the Effective Time, excluding all Allegion Group Employees and Former Allegion Group Employees.  
“FSA Participation Period” has the meaning set forth in Section 9.3(b)(i).
“FUTA” has the meaning set forth in Section 3.1(f).
“HIPAA” means the Health Insurance Portability and Accountability Act of 1996, as amended, and the regulations promulgated thereunder.
“HRA” shall have the meaning set forth in Section 9.2(a)(i).
“Hussmann Group” has the meaning set forth in Section 14.1.
“Initial Transfer Amount” shall have the meaning set forth in Section 6.2(b)(iii).
“IR” has the meaning set forth in the preamble to this Agreement.
“IR Actuary” means an independent actuary selected by IR.
“IR Benefit Plan” means any Benefit Plan sponsored or maintained by a member of the IR Group immediately prior to the Effective Time, excluding any such Benefit Plan that becomes an Allegion Benefit Plan.
“IR Bonus Plans” shall have the meaning set forth in Section 5.1.
“IR Deferred Compensation Plans” means, collectively, the IR Executive Deferred Compensation Plan, the IR Executive Deferred Compensation Plan II, the IR-plc Director Deferred Compensation and Stock Award Plan, the IR-plc Director Deferred Compensation and Stock Award Plan II, the Ingersoll-Rand Company Supplemental Employee Savings Plan, the Ingersoll-Rand Company Supplemental Employee Savings Plan II, the Trane Inc. Deferred Compensation Plan, the Trane Inc. Supplemental Savings Plan, the Ingersoll-Rand Company Supplemental Savings Plan, the Ingersoll-Rand Company Supplemental Savings Plan II, the Management Incentive Unit Plan of Ingersoll-Rand Company, the 

Ingersoll-Rand Company Elected Officers Supplemental Program, the Ingersoll-Rand Company Key Management Supplemental Program, the Ingersoll-Rand Company Supplemental Pension Plan and the Ingersoll-Rand Company Supplemental Pension Plan II.
“IR Director” means any individual who is or was previously a non-employee member of the board of directors of IR.
“IR Entity” means any member of the IR Group.
“IR Equity Plan” means any equity incentive plan sponsored or maintained by IR immediately prior to the Effective Date.
“IR Group” has the meaning set forth in the Distribution Agreement.
“IR Group Employee” means any individual who is employed by a member of the IR Group immediately prior to the Effective Time, excluding any Allegion Group Employee.
“IR HRA Participation Period” has the meaning set forth in Section 9.2(d)(i).
“IR Major Restructuring Severance Plan” means the IR Major Restructuring Severance Plan, effective as of December 10, 2012. 
“IR Notional Shares” means any notional, phantom or similar interests that settle in IR Ordinary Shares or in cash based upon the value of IR Ordinary Shares that have been awarded under, or otherwise notionally held pursuant to the terms of, any of the IR Deferred Compensation Plans.
“IR Options” means options to purchase IR Ordinary Shares granted pursuant to any IR Equity Plan.
“IR Ordinary Share Unit Fund” means an investment fund in the Schlage Lock Company LLC 401(k) Plan or the IR Savings Plan, as applicable, which holds IR Ordinary Share Units and cash.
“IR Ordinary Share Units” means units of IR Ordinary Shares.
“IR Ordinary Shares” means the ordinary shares, par value $1.00 per share, of IR.
“IR Pension Plan” means the Ingersoll-Rand Pension Plan Number One.
“IR Post-Distribution Share Value” means the opening price per share of IR Ordinary Shares trading on the NYSE during Regular Trading Hours on the Trading Day immediately following the Effective Time.
“IR Pre-Distribution Share Value” means the closing price per share of IR Ordinary Shares on the Distribution Date based on “regular way” trading on the NYSE during Regular Trading Hours.
“IR PSUs” means performance share awards or performance share units, as applicable, issued under any IR Equity Plan.
“IR Ratio” means the quotient obtained by dividing the IR Post-Distribution Share Value by the IR Pre-Distribution Share Value.
“IR RSUs” means restricted share units granted under any IR Equity Plan, other than those which are IR PSUs.
“IR Savings Plans” means the Ingersoll-Rand Company Employee Savings Plan and the Ingersoll-Rand Company Employee Savings Plan for Bargained Employees.
“IR Savings Plan Beneficiaries” has the meaning set forth in Section 7.3(a).
“IR Stock Appreciation Rights” means stock appreciation rights covering IR Ordinary Shares granted pursuant to any IR Equity Plan.

“IR UK Pension Plan” has the meaning set forth in Section 14.1.
“IR Welfare Plan” means any Welfare Plan sponsored or maintained by any one or more members of the IR Group as of immediately prior to the Effective Time.
“IRS” means the Internal Revenue Service.
“Law” has the meaning set forth in the Distribution Agreement.
“Liabilities” has the meaning set forth in the Distribution Agreement.
“NYSE” means the New York Stock Exchange.
“Parent Pension Plans” has the meaning set forth in Section 6.1.
“Party” or “Parties” has the meaning set forth in the preamble to this Agreement.
“Person” has the meaning set forth in the Distribution Agreement.
“Privacy Contract” means any contract entered into in connection with applicable privacy protection Laws or regulations.
“Regular Trading Hours” means the period beginning at 9:30 A.M. New York City time and ending at 4:00 P.M. New York City time.
“Revised Pension Plan Transfer Amount” shall have the meaning set forth in Section 6.2(b)(iv).  
“Schlage Lock Company LLC 401(k) Plans” has the meaning set forth in Section 7.1.
“Schlage Lock Company LLC 401(k) Plan Beneficiaries” has the meaning set forth in Section 7.2.
“Schlage Lock Company LLC Pension Plan” shall have the meaning set forth in Section 6.1.
“Schlage Lock Company LLC Pension Plan Participants” shall have the meaning set forth in Section 6.1.
“Subsidiary” has the meaning set forth in the Distribution Agreement.
“Tax” has the meaning set forth in the Tax Matters Agreement.
“Tax Matters Agreement” means the Tax Matters Agreement, dated as of [•], 2013 by and among IR and Allegion.
“Trading Day” means the period of time during any given calendar day, commencing with the determination of the opening price on the NYSE and ending with the determination of the closing price on the NYSE, in which trading and settlement in IR Ordinary Shares or Allegion Ordinary Shares are permitted on the NYSE.
“Transaction” has the meaning set forth in the recitals to this Agreement.
“Transferred Group Adoption Date” means the applicable date prior to the Effective Time on which IR and/or Allegion determine to have any or all of the Allegion Benefit Plans adopted by a Transferred Group Entity.
“Transferred Group Entity” means each IR Entity that will become an Allegion Entity as of the Effective Time.
“Transition Services Agreement” has the meaning set forth in the Distribution Agreement.
“True-Up Amount” has the meaning set forth in Section 6.2(b)(v).
“Unexercisable IR Award” has the meaning set forth in Section 4.2(a)(ii)(A).
“U.S.” means the United States of America.

“WARN” means the U.S. Worker Adjustment and Retraining Notification Act, as amended, and the regulations promulgated thereunder, and any applicable state or local Law equivalent.
“Welfare Plan” means, where applicable, a “welfare plan” (as defined in Section 3(1) of ERISA) or a “cafeteria plan” under Section 125 of the Code, and any benefits offered thereunder, and any other plan offering health benefits (including medical, wellness, prescription drug, dental, vision, and mental health and substance abuse), disability benefits, or life, accidental death and disability, and business travel insurance, pre-tax premium conversion benefits, dependent care assistance programs, employee assistance programs, paid time off programs, contribution funding toward a health savings account, flexible spending accounts, or cashable credits of IR or Allegion, as applicable.
Section 1.2    Interpretation.  In this Agreement, unless the context clearly indicates otherwise: 
(a)words used in the singular include the plural and words used in the plural include the singular; 
(b)if a word or phrase is defined in this Agreement, its other grammatical forms, as used in this Agreement, shall have a corresponding meaning; 
(c)reference to any gender includes the other gender and the neuter; 
(d)the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”; 
(e)the words “shall” and “will” are used interchangeably and have the same meaning; 
(f)the word “or” shall have the inclusive meaning represented by the phrase “and/or”; 
(g)relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding” and “through” means “through and including”; 
(h)all references to a specific time of day in this Agreement shall be based upon Eastern Standard Time or Eastern Daylight Saving Time, as applicable, on the date in question; 
(i)whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified; 
(j)accounting terms used herein shall have the meanings historically ascribed to them by IR and its Subsidiaries, including Allegion for this purpose, in its and their internal accounting and financial policies and procedures in effect immediately prior to the date of this Agreement; 
(k)reference to any Article, Section or schedule means such Article or Section of, or such schedule to this Agreement, as the case may be, and references in any Section or definition to any clause means such clause of such Section or definition; 
(l)the words “this Agreement,” “herein,” “hereunder,” “hereof,” “hereto” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Section or other provision of this Agreement; 
(m)the term “commercially reasonable efforts” means efforts which are commercially reasonable to enable a Party, directly or indirectly, to satisfy a condition to, or otherwise assist in, the consummation of a desired result and which do not require the performing Party to expend funds or assume Liabilities other than expenditures and Liabilities which are customary and reasonable in nature and amount in the context of a series of related transactions similar to the Distribution; 
(n)reference to any agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and not prohibited by this Agreement; 

(o)reference to any Law (including statutes and ordinances) means such Law (including any and all rules and regulations promulgated thereunder) as amended, modified, codified or reenacted, in whole or in part, and in effect at the time of determining compliance or applicability; 
(p)references to any Person include such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement; a reference to such Person’s “Affiliates” shall be deemed to mean such Person’s Affiliates following the Distribution and any reference to a third party shall be deemed to mean a Person who is not a Party or an Affiliate of a Party; 
(q)if there is any conflict between the provisions of the main body of this Agreement and the schedules hereto, the provisions of the main body of this Agreement shall control unless explicitly stated otherwise in such schedule; 
(r)unless otherwise specified in this Agreement, all references to dollar amounts herein shall be in respect of lawful currency of the U.S.; 
(s)the titles to Articles and headings of Sections contained in this Agreement, in any schedule and Exhibit and in the table of contents to this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of or to affect the meaning or interpretation of this Agreement; and 
(t)any portion of this Agreement obligating a Party to take any action or refrain from taking any action, as the case may be, shall mean that such Party shall also be obligated to cause its relevant Subsidiaries to take such action or refrain from taking such action, as the case may be.  
Article II

GENERAL PRINCIPLES FOR ALLOCATION OF LIABILITIES 
Section 2.1    General Principles.  It is the intention of IR and Allegion that all employment-related Liabilities associated with Allegion Group Employees and Former Allegion Group Employees, whether prior to, on or after the Effective Time, are to be assumed by Allegion, except as otherwise specifically set forth herein. Each member of the IR Group and each member of the Allegion Group shall take any and all reasonable action as shall be necessary or appropriate so that active participation in the IR Benefit Plans by all Allegion Group Employees and Former Allegion Group Employees shall terminate in connection with the Distribution as and when provided under this Agreement (or if not specifically provided under this Agreement, as of the Effective Time).
(a)Except as otherwise provided in this Agreement, effective as of the Effective Time, one or more members of the Allegion Group (as determined by Allegion) shall assume, or continue the sponsorship of, and no member of the IR Group shall have any further Liability with respect to, or under, and Allegion shall indemnify each member of the IR Group, and the officers, directors, and employees of each member of the IR Group, and hold them harmless with respect to any and all:
(i)individual agreements entered into between any member of the IR Group and any Allegion Group Employee or Former Allegion Group Employee;
(ii)agreements entered into between any member of the IR Group and any individual who is an independent contractor, or leasing organization, providing services primarily for the business activities of the Allegion Group;
(iii)Collective Bargaining Agreements, collective agreements, trade union or works council agreements entered into between any member of the IR Group and any union, works council or other body representing only Allegion Group Employees;

(iv)wages, salaries, incentive compensation (as the same may be modified by this Agreement), commissions, bonuses, and any other employee compensation or benefits payable to or on behalf of any Allegion Group Employees or Former Allegion Group Employees after the Effective Time, without regard to when such wages, salaries, incentive compensation, commissions, bonuses, or other employee compensation or benefits are or may have been earned;
(v)moving expenses and obligations related to relocation, repatriation, transfers or similar items incurred by or owed to any Allegion Group Employees or Former Allegion Group Employees that have not been paid prior to the Effective Time;
(vi)immigration-related, visa, work application or similar rights, obligations and Liabilities related to any Allegion Group Employees or Former Allegion Group Employees; 
(vii)Liabilities under any Allegion Benefit Plan; and 
(viii)Liabilities and obligations whatsoever with respect to claims made by, or with respect to any Allegion Group Employees or Former Allegion Group Employees, in connection with any IR Benefit Plan or IR Deferred Compensation Plan, including but not limited to, such Liabilities relating to actions or omissions of or by any member of the Allegion Group or any officer, director, employee or agent thereof on or prior to the Effective Time.  
(b)Except as otherwise provided in this Agreement, effective as of the Effective Time, no member of the Allegion Group shall have any further Liability for, and IR shall indemnify each member of the Allegion Group, and the officers, directors, and employees of each member of the Allegion Group, and hold them harmless with respect to any and all Liabilities and obligations whatsoever with respect to, claims made by or with respect to any IR Group Employees or Former IR Group Employees in connection with any IR Benefit Plan (other than with respect to Liabilities relating to Allegion Group Employees or Former Allegion Group Employees), including such Liabilities relating to actions or omissions of or by any member of the IR Group or any officer, director, employee or agent thereof prior to, on or after the Effective Time.  
Section 2.2    Service Credit.
(a)    Service for Eligibility, Vesting, and Benefit Purposes.  Except as otherwise provided in any other provision of this Agreement, the Allegion Benefit Plans shall, and Allegion shall cause each member of the Allegion Group to, recognize each Allegion Group Employee’s full service history with the IR Group for purposes of eligibility, vesting, determination of level of benefits and, to the extent applicable and subject to Section 2.4, benefit accruals under any Allegion Benefit Plan for such Allegion Group Employee’s service with any member of the IR Group on or prior to the Effective Time to the same extent such service would be credited under the IR Benefit Plans, as applicable.  Notwithstanding anything to the contrary, in connection with any Employee’s break in service, any determination as to service credit shall be made under and in accordance with the applicable Allegion Benefit Plan document, the terms of which shall control in the case of any conflict with this Section 2.2. 
(b)    Evidence of Prior Service.  Notwithstanding anything to the contrary, but subject to applicable Law, upon reasonable request by one Party to the other Party, the first Party will provide to the other Party copies of any records reasonably available to the first Party to document such service, plan participation and membership of such Employees and reasonably cooperate with the first Party to resolve any discrepancies or obtain any missing data for purposes of determining benefit eligibility, participation, vesting and calculation of benefits with respect to any Employee.
Section 2.3    Plan Administration.
(a)    Transition Services.  The Parties acknowledge that the IR Group or the Allegion Group may provide administrative services for certain of the other Party’s benefit programs for a 

transitional period under the terms of the Transition Services Agreement.  The Parties agree to enter into a business associate agreement (if required by HIPAA or other applicable health information privacy Laws) in connection with such Transition Services Agreement.  
(b)    Participant Elections and Beneficiary Designations.  Prior to the Effective Time, each participant in an Allegion Benefit Plan shall execute such elections and beneficiary designations as are promulgated by the administrator of each Allegion Benefit Plan.  Notwithstanding the foregoing, if and to the extent an Allegion Benefit Plan participant has failed to execute and file an updated election and/or designation, the participant elections and beneficiary designations made under any corresponding IR Benefit Plan prior to the Effective Time with respect to which Assets or Liabilities are transferred or allocated to Allegion Benefit Plans in accordance with this Agreement shall continue in effect under the applicable Allegion Benefit Plan, including deferral, investment and payment form elections, dividend elections, coverage options and levels, beneficiary designations and the rights of alternate payees under qualified domestic relations orders, in each case, to the extent allowed by applicable Law.
Section 2.4.    No Duplication or Acceleration of Benefits.  Notwithstanding anything to the contrary in this Agreement or the Distribution Agreement, no participant in the Allegion Benefit Plans shall receive benefits that duplicate benefits provided by the corresponding IR Benefit Plan.  Furthermore, unless expressly provided for in this Agreement or the Distribution Agreement or required by applicable Law, no provision in this Agreement shall be construed to create any right to accelerate vesting, distribution of benefits or entitlements to any compensation or Benefit Plan on the part of any IR Group Employee, Former IR Group Employee, Allegion Group Employee or Former Allegion Group Employee.
Section 2.5.    No Expansion of Participation.  Unless otherwise expressly provided in this Agreement, as otherwise determined or agreed to by IR and Allegion, as required by applicable Law, or as explicitly set forth in an Allegion Benefit Plan, an Allegion Group Employee shall be entitled to participate in the Allegion Benefit Plans only to the extent that such Employee was entitled to participate in the corresponding IR Benefit Plan as in effect immediately prior to the Effective Time, with it being the intent of the Parties that this Agreement does not result in any expansion of the number of Allegion Group Employees participating or the participation rights therein that they had prior to the Effective Time.
Section 2.6.    Special Provisions.  Notwithstanding any other provision in this Agreement to the contrary, the Senior Vice President - Human Resources and Communications of IR and the Vice President, Total Rewards of IR shall have the discretion, power and authority to adopt and implement special provisions, rules or procedures applicable to the employment, compensation and benefit arrangements of one or more individuals as are deemed equitable, necessary or advisable to give effect to the intentions of this Agreement, including without limitation, special provisions relating to (i) different equitable adjustments than as set forth in Article IV, in the case of a grantee who has outstanding equity-based awards granted under any IR Equity Plan or IR Deferred Compensation Plan, where such grantee’s circumstances warrant a different treatment (including, but not limited to, grantees in jurisdictions outside of the U.S.) to the extent that such Senior Vice President - Human Resources of IR and the Vice President, Total Rewards of IR deem such different treatment to be equitable, necessary or advisable, based on the advice of counsel; (ii) the good faith determination of the employer or former employer, as applicable, of each Employee; (iii) errors in the timing of employment transfers; (iv) issues pertaining to immigration Law requirements; and (v) any other decisions regarding the employment, compensation and benefit arrangements of one or more individuals as are deemed equitable, necessary or advisable that are not otherwise contemplated by this Agreement.

Article III

ASSIGNMENT OF EMPLOYEES 
Section 3.1.    Active Employees.
(a)Allegion Group Employees.  Except as otherwise set forth in this Agreement, effective not later than immediately preceding the Effective Time, the employment of each Allegion Group Employee shall be continued by a member of the Allegion Group or shall be assigned and transferred to a member of the Allegion Group (in each case, with such member as determined by Allegion).  Each of the Parties agrees to execute, and to seek to have the applicable employees execute, such documentation, if any, as may be necessary to reflect such assignments and transfers and comply with Section 5.1 of the Distribution Agreement (No Solicit; No Hire).
(b)IR Group Employees.  Except as otherwise set forth in this Agreement, effective not later than immediately preceding the Effective Time, the employment of each IR Group Employee shall be continued by a member of the IR Group or shall be assigned and transferred to a member of the IR Group (in each case as determined by IR).  Each of the Parties agrees to execute, and to seek to have the applicable employees execute, such documentation, if any, as may be necessary to reflect such assignments and transfers and comply with Section 5.1 of the Distribution Agreement (No Solicit; No Hire).
(c)At-Will Status.  Notwithstanding the above or any other provision of this Agreement, nothing in this Agreement shall create any obligation on the part of any member of the IR Group or any member of the Allegion Group to (i) continue the employment of any Employee or permit the return from a leave of absence for any period following the date of this Agreement or the Effective Time (except as required by applicable Law) or (ii) change the employment status of any Employee from “at will,” to the extent such Employee is an “at will” employee under applicable Law.
(d)Severance.  The Parties acknowledge and agree that the Distribution and the assignment, transfer or continuation of the employment of Employees as contemplated by this Section 3.1 shall not be deemed a severance of employment of any Employee for purposes of this Agreement or any Benefit Plan of any member of the IR Group or any member of the Allegion Group.
(e)Not a Change of Control/Change in Control.  The Parties acknowledge and agree that neither the consummation of the Distribution nor any transaction in connection with the Distribution shall be deemed a “change of control,” “change in control,” or term of similar import for purposes of any IR Benefit Plan, Allegion Benefit Plan, IR Equity Plan or Allegion Equity Plan.
(f)Payroll and Related Taxes.  With respect to the portion of the tax year occurring prior to the day immediately following the Effective Time, IR will (i) be responsible for all payroll obligations, tax withholding and reporting obligations and (ii) furnish a Form W-2 or similar earnings statement to all Allegion Group Employees for such period.  With respect to the remaining portion of such tax year, Allegion will (i) be responsible for all payroll obligations, tax withholding, and reporting obligations regarding Allegion Group Employees and (ii) furnish a Form W-2 or similar earnings statement to all Allegion Group Employees.  Following the Effective Time, IR will provide payroll obligations, tax withholding and reporting obligations in accordance with the terms of the Transition Services Agreement.  With respect to each Allegion Group Employee, IR and Allegion shall, and shall cause their respective Affiliates to (to the extent permitted by applicable Law and practicable) (a) treat Allegion (or the applicable Allegion Entity) as a “successor employer” and IR (or the applicable IR Entity) as a “predecessor,” within the meaning of Sections 3121(a)(1) and 3306(b)(1) of the Code, to the extent appropriate, for purposes of Taxes imposed under the United States Federal Insurance 

Contributions Act, as amended (“FICA”), or the United States Federal Unemployment Tax Act, as amended (“FUTA”) and (b) file tax returns, exchange wage payment information, and report wage payments made by the respective predecessor and successor employer on separate IRS Forms W-2 or similar earnings statements to each such Allegion Group Employee for the tax year in which the Effective Time occurs, in a manner provided in Section 4.02(l) of Revenue Procedure 2004-53.  Except to the extent otherwise administratively practicable, the collection of payroll taxes under FICA and FUTA will restart upon or following the Effective Time with respect to each Allegion Group Employee for the tax year during which the Effective Time occurs.
(g)Employment and Severance Arrangements; Expatriate Obligations.  Allegion will assume and honor, or will cause an Allegion Entity to assume and honor, and as otherwise required by applicable Law, any agreements to which any Allegion Group Employee is party with either any IR Entity or any joint venture with an IR Entity, including any (i) employment contract, (ii) retention or severance arrangement (including any obligations arising under the IR Major Restructuring Severance Plan (pursuant to Section 12.1 hereof) but excluding any individual change in control agreement with an IR Entity prior to the Effective Time) or (iii) expatriate (including any international assignee) contract or arrangement (including agreements and obligations regarding repatriation, relocation, equalization of Taxes and living standards in the host country).
(h)Collective Bargaining Agreements.  Schedule 3.1(h) sets forth a list of collective bargaining and/or works council agreements relating to the Allegion Group Employees in effect on the date of this Agreement (the “Collective Bargaining Agreements”). Prior to the Effective Time, IR and Allegion will take or cause to be taken any actions necessary to cause an Allegion Entity to assume the Collective Bargaining Agreements to the maximum extent permitted by applicable Law. Nothing in this Agreement is intended to alter the provisions of any Collective Bargaining Agreement or modify in any way the obligations owed to the Employees covered by any such agreement.
Section 3.2.    Employment Law Obligations.
(a)    WARN.  After the Effective Time, (i) IR shall be responsible for providing any necessary WARN notice (and meeting any similar state Law notice requirements) with respect to any termination of employment of any IR Group Employee and (ii) Allegion shall be responsible for providing any necessary WARN notice (and meeting any similar state Law notice requirements) with respect to any termination of employment of any Allegion Group Employee.
(b)    Compliance with Employment Laws.  On and after the Effective Time, (i) each member of the IR Group shall be responsible for adopting and maintaining any policies or practices, and for all other actions and inactions, necessary to comply with employment-related Laws and requirements relating to the employment of IR Group Employees and the treatment of any applicable Former IR Group Employees in respect of their former employment, and (ii) each member of the Allegion Group shall be responsible for adopting and maintaining any policies or practices, and for all other actions and inactions, necessary to comply with employment-related Laws and requirements relating to the employment of Allegion Group Employees and the treatment of any Former Allegion Group Employees in respect of their former employment.
Section 3.3.    Employee Records.
(a)    Sharing of Information.  Subject to any limitations imposed by applicable Law, IR and Allegion (acting directly or through members of the IR Group or the Allegion Group, respectively) shall provide to the other and their respective agents and vendors all information necessary for the Parties to perform their respective duties under this Agreement.  The Parties also hereby agree to enter into any business associate arrangements that may be required for the sharing of any information pursuant to this Agreement to comply with the requirements of HIPAA.

(b)    Transfer of Personnel Records and Authorization.  Subject to any limitation imposed by applicable Law, as of the Effective Time or as soon as administratively practicable thereafter, IR shall transfer and assign to Allegion all personnel records, all immigration documents, including I-9 forms and work authorizations, all payroll deduction authorizations and elections, whether voluntary or mandated by Law, including but not limited to W-4 forms and deductions for benefits under the applicable Allegion Benefit Plan and all absence management records, Family and Medical Leave Act records, insurance beneficiary designations, flexible spending account enrollment confirmations, attendance, and return to work information relating to Allegion Group Employees and Former Allegion Group Employees who participate in Allegion Benefit Plans (“Benefit Management Records”).  Subject to any limitations imposed by applicable Law, IR, however, may retain originals of, copies of, or access to personnel records, immigration records, payroll forms and Benefit Management Records as long as necessary to provide services to Allegion (acting on its behalf pursuant to the Transition Services Agreement between the Parties entered into as of the date of this Agreement).  Immigration records will, if and as appropriate, become a part of Allegion’s public access file.  Allegion will use personnel records, payroll forms and Benefit Management Records for lawful purposes only, including calculation of withholdings from wages and personnel management.  It is understood that following the Effective Time, IR records so transferred and assigned may be maintained by Allegion (acting directly or through one of its Subsidiaries) pursuant to Allegion’s applicable records retention policy.
(c)    Access to Records.  To the extent not inconsistent with this Agreement and any applicable privacy protection Laws or regulations or Privacy Contracts or the Ingersoll-Rand Data Protection and Privacy Policy, reasonable access to Employee-related records after the Effective Time will be provided to members of the IR Group and members of the Allegion Group pursuant to the terms and conditions of Section 7.3 of the Distribution Agreement.  In addition, notwithstanding anything to the contrary, Allegion shall provide IR with reasonable access to those records necessary for its administration of any Benefit Plans or programs, or employment and compensation matters, on behalf of IR Group Employees and Former IR Group Employees after the Effective Time as permitted by any applicable privacy protection Laws or regulations or Privacy Contracts or the Ingersoll-Rand Data Protection and Privacy Policy.  IR shall also be permitted to retain copies of all restrictive covenant agreements with any Allegion Group Employee in which any member of the IR Group has a valid business interest.  In addition, IR shall provide Allegion with reasonable access to those records necessary for its administration of any Benefit Plans or programs, or employment and compensation matters, on behalf of Allegion Group Employees or Former Allegion Group Employees after the Effective Time as permitted by any applicable privacy protection Laws or regulations or Privacy Contracts.  Allegion shall also be permitted to retain copies of all restrictive covenant agreements with any IR Group Employee or Former IR Group Employee in which any member of the Allegion Group has a valid business interest.
(d)    Maintenance of Records.  With respect to retaining, destroying, transferring, sharing, copying and permitting access to all Employee-related information, IR and Allegion shall comply with all applicable Laws, regulations and internal policies, and shall indemnify and hold harmless each other from and against any and all Liability, claims, actions, and damages that arise from a failure (by the indemnifying party or its Subsidiaries or their respective agents) to so comply with all applicable Laws, regulations, Privacy Contracts and internal policies applicable to such information.
(e)    Confidentiality.  Except as otherwise set forth in this Agreement, all records and data relating to Employees shall, in each case, be subject to the confidentiality provisions of the Distribution Agreement and any other applicable agreement and applicable Law, and the provisions of this Section 3.3 shall be in addition to, and not in derogation of, the provisions of the Distribution Agreement governing confidential information, including Section 7.6 of the Distribution Agreement.

(f)    Cooperation.  Each Party shall use commercially reasonable efforts to cooperate to share, retain, and maintain data and records that are necessary or appropriate to further the purposes of this Section 3.3 and for each Party to administer its respective Benefit Plans to the extent consistent with this Agreement and applicable Law, and each Party agrees to cooperate as long as is reasonably necessary to further the purposes of this Section 3.3.  No Party shall charge another Party a fee for such cooperation.
(g)    Labor Relations.  To the extent required by applicable law or any agreement with a labor union, works council or similar employee organization, Allegion shall provide notice, engage in consultation and take any similar action which may be required on its part in connection with the Distribution and shall fully indemnify IR against any Liabilities arising from its failure to comply with such requirements.  
Article IV

EQUITY AND EQUITY-BASED COMPENSATION
Section 4.1    General Principles.
(a)IR and Allegion shall take any and all reasonable actions as shall be necessary and appropriate to further the provisions of this Article IV, including, to the extent practicable, providing written notice or similar communication to each Employee who holds one or more awards granted under any IR Equity Plan or IR Deferred Compensation Plan informing such Employee of (i) the actions contemplated by this Article IV with respect to such awards and (ii) whether (and during what time period) any “blackout” period shall be imposed upon holders of awards granted under any IR Equity Plan or IR Deferred Compensation Plan during which time awards may not be exercised or settled, as the case may be.
(b)Following the Effective Time, a grantee who has outstanding equity-based awards under one or more of the IR Equity Plans or IR Deferred Compensation Plans and/or replacement equity-based awards under the Allegion Equity Plan shall be considered to have been employed by the applicable plan sponsor before and after the Effective Time for purposes of (i) vesting and (ii) determining the date of termination of employment as it applies to any such award; provided, that this Section 4.1(b) shall not govern adjustments made to the IR PSUs under Section 4.4 hereof.
(c)No award described in this Article IV, whether outstanding or to be issued, adjusted, substituted or cancelled by reason of or in connection with the Distribution, shall be adjusted, settled, cancelled, or exercisable, until in the judgment of the administrator of the applicable plan or program such action is consistent with all applicable Laws, including federal securities Laws.  Any period of exercisability will not be extended on account of a period during which such an award is not exercisable pursuant to the preceding sentence.
(d)The adjustment or conversion of IR Options, IR Stock Appreciation Rights, IR RSUs, IR PSUs and IR Notional Shares shall be effected in a manner that is intended to avoid the imposition of any accelerated, additional, penalty or other Taxes on the holders thereof pursuant to Section 409A of the Code.
(e)For reference purposes only, sample calculations showing adjustments as contemplated by Section 4.2 through Section 4.5 are attached hereto as Exhibit A.
Section 4.2.    Stock Options and Stock Appreciation Rights.
(a)    Treatment of Stock Options and Stock Appreciation Rights.  
(i)Vested and Exercisable IR Options and IR Stock Appreciation Rights.  Each IR Option or IR Stock Appreciation Right that is vested and exercisable by its terms immediately prior to the Effective Time (each an “Exercisable IR Award”), regardless of who holds such 

Exercisable IR Award, shall be deemed bifurcated into two options or stock appreciation rights, as applicable, the first an “Adjusted Exercisable IR Award” and the second, an “Allegion Exercisable Award”.  Each Adjusted Exercisable IR Award and each Allegion Exercisable Award shall be subject to the same terms and conditions after the Effective Time as the terms and conditions applicable to the corresponding Exercisable IR Award immediately prior to the Effective Time; provided, however, that from and after the Effective Time:
(A)With respect to each Adjusted Exercisable IR Award:
(x) the number of IR Ordinary Shares subject to each such Adjusted Exercisable IR Award shall be equal to the number of IR Ordinary Shares subject to the corresponding Exercisable IR Award immediately prior to the Effective Time; and 
(y) the per-share exercise price or base price, as applicable, of each Adjusted Exercisable IR Award shall be equal to ((A) the IR Post-Distribution Share Value) minus ((B)(i) Adjusted Exercisable IR Award Spread Value Allocation divided by (ii) the number of IR Ordinary Shares subject to the corresponding Exercisable IR Award immediately prior to the Effective Time), rounded up to the fourth decimal point.
(B)With respect to each Allegion Exercisable Award:
(x) the number of Allegion Ordinary Shares subject to each such Allegion Exercisable Award shall be equal to the (A) number of IR Ordinary Shares subject to the corresponding Exercisable IR Award immediately prior to the Effective Time multiplied by (B) the Distribution Ratio, with any fractional share rounded down to the nearest whole share; and
(y) the per-share exercise price or base price, as applicable, of each Allegion Exercisable Award shall be equal to ((A) the Allegion Post-Distribution Share Value) minus ((B)(i) the Allegion Exercisable Award Spread Value Allocation divided by (ii) the number of Allegion Ordinary Shares subject to such Allegion Exercisable Award (as determined pursuant to clause (x) above)), rounded up to the fourth decimal point.
(ii)Unvested and Vested but Unexercisable IR Options and IR Stock Appreciation Rights.
(A)IR Group Employees and IR Directors.  Each IR Option or IR Stock Appreciation Right that is unvested or is vested but unexercisable by its terms immediately prior to the Effective Time (an “Unexercisable IR Award”) held by an IR Group Employee, IR Director or Former IR Group Employee shall remain an option or stock appreciation right, as applicable, to purchase IR Ordinary Shares issued under the applicable IR Equity Plan (each such award, an “Adjusted Unexercisable IR Award”).  Each Adjusted Unexercisable IR Award shall be subject to the same terms and conditions after the Effective Time as the terms and conditions applicable to the corresponding Unexercisable IR Award immediately prior to the Effective Time; provided, however, that from and after the Effective Time: 

(x) the number of IR Ordinary Shares subject to each such Adjusted Unexercisable IR Award shall be equal to (A) the number of IR Ordinary Shares subject to the corresponding Unexercisable IR Award immediately prior to the Effective Time divided by (B) the IR Ratio, with any fractional share rounded down to the nearest whole share; and 
(y) the per-share exercise price or base price, as applicable, of each such Adjusted Unexercisable IR Award shall be equal to (A) the per-share exercise price of the corresponding Unexercisable IR Award immediately prior to the Effective Time multiplied by (B) the IR Ratio, rounded up to the fourth decimal point.
(B)Allegion Group Employees and Former Allegion Group Employees.  Each Unexercisable IR Award held by an Allegion Group Employee or Former Allegion Group Employee immediately prior to the Effective Time shall be converted as of the Effective Time into an option or stock appreciation right, as applicable, to purchase Allegion Ordinary Shares (each such award, an “Allegion Unexercisable Award”) pursuant to the terms of the Allegion Equity Plan, subject to terms and conditions from and after the Effective Time that are substantially similar to the terms and conditions applicable to the corresponding Unexercisable IR Award immediately prior to the Effective Time; provided, however, that from and after the Effective Time: 
(x) the number of Allegion Ordinary Shares subject to each such Allegion Unexercisable Award shall be equal to (A) the number of IR Ordinary Shares subject to the corresponding Unexercisable IR Award immediately prior to the Effective Time divided by (B) the Allegion Ratio, with any fractional share rounded down to the nearest whole share; 
(y) the per-share exercise price or base price, as applicable, of each such Allegion Unexercisable Award shall be equal to (A) the per-share exercise price of the corresponding Unexercisable IR Award immediately prior to the Effective Time multiplied by (B) the Allegion Ratio, rounded up to the fourth decimal point; and
(z) with respect to each such Allegion Unexercisable Award, “Change in Control” shall have the meaning set forth in the Allegion Equity Plan (i.e., a Change in Control of Allegion rather than IR).
Section 4.3.    Restricted Stock Units.  
(a)    Treatment of IR RSUs Held by IR Group Employees and Former IR Group Employees.  IR RSUs held by an IR Group Employee or a Former IR Group Employee immediately prior to the Effective Time shall be adjusted by dividing the number of IR RSUs subject to each grant by the IR Ratio.  If the resulting product includes a fractional share, the number of IR RSUs shall be rounded up to the nearest whole share.  The terms and conditions (including vesting terms) to which the IR RSUs are subject shall be substantially the same terms and conditions before and after the Effective Time.
(b)    Treatment of IR RSUs Held by Allegion Group Employees and Former Allegion Group Employees.  IR RSUs held by an Allegion Group Employee or Former Allegion Group Employee immediately prior to the Effective Time shall be replaced with an award of a number of Allegion restricted stock units (the “Allegion RSUs”) determined by dividing the number of IR RSUs subject to each grant by the Allegion Ratio.  If the resulting product includes a fractional share, the number of Allegion RSUs shall 

be rounded up to the nearest whole share.  The Allegion RSUs shall be subject to substantially the same terms and conditions (including vesting terms) as in effect for the corresponding IR RSUs immediately prior to the Effective Time; provided, however, with respect to each such Allegion RSU, “Change in Control” shall have the meaning set forth in the Allegion Equity Plan (i.e., a Change in Control of Allegion rather than IR).
Section 4.4.    Performance Share Units.  The number of IR Ordinary Shares underlying each IR PSU held by an IR Group Employee, Former IR Group Employee, Allegion Group Employee or Former Allegion Group Employee immediately prior to the Effective Time shall be adjusted by dividing such ordinary shares by the IR Ratio, with the result rounded up to the extent it includes a fractional share; the number of such adjusted IR PSUs held by an Allegion Group Employee or Former Allegion Group Employee shall be then pro-rated based on the number of days elapsed during the applicable performance period through the date of the consummation of the Transaction and if the resulting product includes a fractional share, the number of shares underlying any IR PSU shall be rounded up to the nearest whole share.  The terms and conditions to which the IR PSUs are subject shall be substantially the same terms and conditions before and after the Effective Time; provided, however, that the calculations of “Earnings Per Share” and “Total Shareholder Return” will be adjusted to appropriately reflect the Transaction in a manner described on Exhibit B attached hereto.
Section 4.5.    Notional Shares.
(a)    Treatment of IR Notional Shares Held by IR Group Employees, IR Directors and Former IR Group Employees.  IR Notional Shares held by an IR Group Employee, IR Director or a Former IR Group Employee immediately prior to the Effective Time shall be adjusted by dividing the number of IR Notional Shares held by such individual by the IR Ratio.  If the resulting product includes a fractional share, the number of adjusted IR Notional Shares shall be rounded up to the nearest whole share.  The terms and conditions (including vesting terms) to which the IR Notional Shares are subject shall be substantially the same terms and conditions before and after the Effective Time.
(b)    Treatment of IR Notional Shares Held by Allegion Group Employees and Former Allegion Group Employees.  IR Notional Shares held by an Allegion Group Employee or Former Allegion Group Employee immediately prior to the Effective Time shall be replaced with a number of Allegion notional shares (the “Allegion Notional Shares”) determined by dividing the number of IR Notional Shares held by such individual by the Allegion Ratio.  If the resulting product includes a fractional share, the number of Allegion Notional Shares shall be rounded up to the nearest whole share.  The Allegion Notional Shares shall be subject to substantially the same terms and conditions (including vesting terms) as in effect for the corresponding IR Notional Shares immediately prior to the Effective Time.
Section 4.6.    Section 16(b) of the Exchange Act.  By approving the adoption of this Agreement, the respective Boards of Directors of each of IR and Allegion intend to exempt from the short-swing profit recovery provisions of Section 16(b) of the Exchange Act, by reason of the application of Rule 16b-3 thereunder, all acquisitions and dispositions of equity incentive awards by directors and officers of each of IR and Allegion, and the respective Boards of Directors of IR and Allegion also intend expressly to approve, in respect of any equity-based award, the use of any method for the payment of an exercise price and the satisfaction of any applicable Tax withholding (specifically including the actual or constructive tendering of shares in payment of an exercise price and the withholding of option shares from delivery in satisfaction of applicable Tax withholding requirements) to the extent such method is permitted under the applicable IR Equity Plan, Allegion Equity Plan and any award agreement.  
Section 4.7.    Liabilities for Settlement of Awards.  
(a)    Settlement of IR Options and IR Stock Appreciation Rights.  IR shall be responsible for all Liabilities associated with IR Options and IR Stock Appreciation Rights exercised by an IR Group 

Employee or Former IR Group Employee, including any option exercise, share delivery, registration or other obligations related to the exercise of the IR Options.  Settlement of IR Options and IR Stock Appreciation Rights exercised by an Allegion Group Employee or Former Allegion Group Employee shall be effected as follows:  In the case of a broker-assisted cashless exercise, the award holder will instruct the award administrator, who will (in the case of an IR Option) sell the shares obtained through the exercise and who will wire the exercise price directly to IR, wire the applicable tax withholding to Allegion and wire the remaining proceeds to the brokerage account of such Allegion Group Employee or Former Allegion Group Employee.  In the case of an exercise to hold shares, the award holder will instruct the award administrator and remit the exercise price to the award administrator (in the case of an IR Option), who will (in the case of an IR Option) wire the exercise price directly to IR, wire the applicable tax withholding to Allegion and credit the remaining shares to the brokerage account of such Allegion Group Employee or Former Allegion Group Employee.
(b)    Settlement of Allegion Exercisable Awards and Allegion Unexercisable Awards.  Allegion shall be responsible for all Liabilities associated with Allegion Exercisable Awards and Allegion Unexercisable Awards exercised by an Allegion Group Employee or Former Allegion Group Employee, including any option exercise, share delivery, registration or other obligations related to the exercise of the Allegion Options.  Settlement of Allegion Exercisable Awards exercised or held by an IR Group Employee or Former IR Group Employee shall be effected as follows:  In the case of a broker-assisted cashless exercise, the award holder will instruct the award administrator, who will (in the case of an Allegion Option) sell the shares obtained through the exercise and who will wire the exercise price directly to Allegion, wire the applicable tax withholding to IR and wire the remaining proceeds to the brokerage account of such IR Group Employee or Former IR Group Employee.  In the case of an exercise to hold shares, the award holder will instruct the award administrator and remit the exercise price (in the case of an Allegion Option) to the award administrator, who will (in the case of an Allegion Option) wire the exercise price directly to Allegion, wire the applicable tax withholding to IR and credit the remaining shares to the brokerage account of such IR Group Employee or Former IR Group Employee.
(c)    Settlement of Outstanding IR RSUs, IR PSUs and IR Notional Shares.  IR shall be responsible for all Liabilities associated with IR RSUs, IR PSUs and IR Notional Shares, including any share delivery, registration or other obligations related to the settlement of the IR RSUs, IR PSUs and IR Notional Shares.
(d)    Settlement of Outstanding Allegion RSUs, Allegion PSUs and Allegion Notional Shares.  Allegion shall be responsible for all Liabilities associated with Allegion RSUs, Allegion PSUs and Allegion Notional Shares including any share delivery, registration or other obligations related to the settlement of the Allegion RSUs, Allegion PSUs and Allegion Notional Shares.  
Section 4.8.    Form S-8.  Upon or as soon as reasonably practicable and subject to applicable Law, Allegion shall prepare and file with the Securities Exchange Commission a registration statement on Form S-8 (or another appropriate form) registering under the Exchange Act the offering of a number of Allegion Ordinary Shares at a minimum equal to the number of shares subject to the Schlage Lock Company LLC 401(k) Plans, Allegion RSUs, Allegion PSUs, the Allegion Options and the interests under the Schlage Lock Company LLC 401(k) Plans and the Allegion Deferred Compensation Plans.  Allegion shall use commercially reasonable efforts to cause any such registration statement to be kept effective (and the current status of the prospectus or prospectuses required thereby to be maintained) as long as any Allegion RSUs, Allegion PSUs, and Allegion Options remain outstanding.  
Section 4.9.    Tax Reporting and Withholding for Equity-Based Awards.  Unless otherwise required by applicable Law, IR (or one of its Subsidiaries) will be responsible for all income, payroll, fringe benefit, social, payment on account or other tax reporting related to income of or otherwise owed by IR Group Employees or Former IR Group Employees from equity-based awards, and Allegion (or one 

of its Subsidiaries) will be responsible for all income, payroll, fringe benefit, social, payment on account or other tax reporting related to or otherwise owed on income of Allegion Group Employees from equity-based awards.  Similarly, IR will be responsible for all income, payroll, fringe benefit, social, payment on account or other tax reporting related to or otherwise owed on income of its non-employee directors from equity-based awards, and Allegion will be responsible for any income, payroll, fringe benefit, social, payment on account or other tax reporting related to income of or otherwise owed by its non-employee directors from equity-based awards.  Further, IR (or one of its Subsidiaries) shall be responsible for remitting applicable tax withholdings and related payments for IR Group Employees to each applicable taxing authority, and Allegion (or one of its Subsidiaries) shall be responsible for remitting applicable tax withholdings and related payments for Allegion Group Employees to each applicable taxing authority; provided, however, that to the extent necessary (and permissible) to effectuate the foregoing, either IR or Allegion may act as agent for the other company by remitting amounts withheld in the form of shares or in conjunction with an exercise transaction and related payments to an appropriate taxing authority.
Section 4.10.    Cooperation.  Each Party acknowledges and agrees to use commercially reasonable efforts to cooperate with each other and with third-party providers to effect withholding and remittance of Taxes, as well as required tax reporting, in a timely, efficient and appropriate manner to further the purposes of this Article IV and to administer all employee equity awards that are outstanding immediately following the Effective Time (including all such equity awards that are adjusted in accordance with this Article IV) to the extent consistent with this Agreement and applicable Law, for as long as is reasonably necessary to further the purposes of this Article IV.  No Party shall charge another Party a fee for such cooperation.  
Article V

BONUSES FOR ALLEGION GROUP EMPLOYEES

Section 5.1.    IR Bonus Plan Participation.  As of the Effective Time, each Allegion Group Employee shall cease to participate in any IR Benefit Plan that provides cash bonus or similar short-term cash incentive opportunities (the “IR Bonus Plans”), and from and after the Effective Time, the Allegion Group shall be solely responsible for providing cash bonus or similar short-term cash incentive opportunities to Allegion Group Employees, in accordance with this Article V.
Section 5.2.    Bonus Determination.  
(a)With respect to any performance period under IR Bonus Plans that has not been completed on or prior to the Effective Time, the Allegion Group shall provide each Allegion Group Employee with a cash bonus or similar short-term cash incentive opportunity that is equivalent to the cash bonus or similar short-term cash incentive opportunity which could have been earned under the applicable IR Bonus Plan for such incomplete performance period.  As soon as practicable following the Effective Time, IR shall transfer to Allegion and Allegion shall assume, the accrued Liability related to the IR Bonus Plans for each Allegion Group Employee for the portion of the applicable performance period beginning on the first day of the applicable performance period and ending on the Effective Time.  For purposes of determining the amount of the accrued Liability to be transferred to and assumed by Allegion, the applicable performance criteria shall be measured by IR in accordance with the terms of the applicable IR Bonus Plans for the portion of the applicable performance period up to the Effective Time and based on the 2013 forecast for IR financial results as of the Effective Time.
(b)The Allegion Group shall determine individual Allegion Group Employee bonus or similar short-term cash incentive amounts, by allocating the applicable aggregate bonus pool as if such bonus pool were being paid under the terms of the applicable IR Bonus Plan, taking into account individual performance criteria as determined by the Allegion Group in its reasonable discretion.  Following such determination, the Allegion Group shall pay each Allegion Group Employee the 

applicable bonus amounts in the same form and on the same timing that each Allegion Group Employee would have received such bonus or similar short-term cash incentive amount under the terms of the IR Bonus Plans had the Distribution not occurred.
Article VI

U.S. QUALIFIED DEFINED BENEFIT PENSION PLAN
Section 6.1.    Establishment of Schlage Lock Company LLC Pension Plan.  No later than the Effective Time, Schlage Lock Company LLC, a Transferred Group Entity, shall establish a defined benefit pension plan (such new defined benefit pension plan, the “Schlage Lock Company LLC Pension Plan”) that is intended to meet the requirements of Section 401(a) of the Code and related trust that is intended to meet the requirements of Section 501(a) of the Code to provide retirement benefits to Allegion Group Employees and Former Allegion Group Employees who immediately prior to the Effective Time were participants in the IR Pension Plan, the Retirement Plan for Former Employees of Ingersoll-Rand Company or the Trane Merged Hourly Pension Plan, as applicable (collectively, the “Parent Pension Plans”).  The Allegion Group Employees and Former Allegion Group Employees described here shall be known as the “Schlage Lock Company LLC Pension Plan Participants.”  Effective as of the Effective Time, either Schlage Lock Company LLC shall remain the plan sponsor of the Schlage Lock Company LLC Pension Plan or Allegion shall or shall cause another Allegion Entity to assume the Schlage Lock Company LLC Pension Plan.  Allegion shall be responsible for taking all necessary, reasonable, and appropriate action to establish, maintain, and administer the Schlage Lock Company LLC Pension Plan so that it is qualified under Section 401(a) of the Code and that the related trust thereunder is exempt under Section 501(a) of the Code.  Allegion (acting directly or through members of the Allegion Group) shall be responsible for any and all Liabilities (including Liability for funding) and other obligations with respect to the Schlage Lock Company LLC Pension Plan.
Section 6.2.    Schlage Lock Company LLC Pension Plan Participants.
(a)Assumption of Parent Pension Plans Liabilities. Effective as of the Effective Time, Allegion (acting directly or through members of the Allegion Group) hereby agrees to cause the Schlage Lock Company LLC Pension Plan to assume, fully perform, pay, and discharge all Liabilities under the Parent Pension Plans relating to all Schlage Lock Company LLC Pension Plan Participants as of the Effective Time.
(b)Transfer of the Parent Pension Plan Assets.
(i)The Parties intend that the portions of the Parent Pension Plans covering Schlage Lock Company LLC Pension Plan Participants shall be transferred to the Schlage Lock Company LLC Pension Plan in accordance with Section 414(l) of the Code, Treasury Regulation Section 1.414(l)-1, and Section 208 of ERISA.  No later than thirty (30) days prior to the Effective Time, IR and Allegion (acting directly or through members of the IR Group or the Allegion Group, respectively) shall, to the extent necessary, file an IRS Form 5310-A regarding the transfer of Assets and Liabilities from the IR Pension Plan to the Schlage Lock Company LLC Pension Plan.  It is intended that the transfers of Assets and Liabilities relating to Allegion Group Employees and Former Allegion Group Employees from the Retirement Plan for Former Employees of Ingersoll-Rand Company and the Trane Merged Hourly Pension Plan described hereunder shall satisfy the de minimis rule of treasury Regulations Section 414(l)-1(n)(2) and shall be deemed to comply with Section 414(l) of the Code so that no IRS Form 5310-A shall be filed with respect to such transfers.
(ii)Prior to the Effective Time (or such later time as mutually agreed by the Parties), IR shall cause the IR Actuary to determine the estimated value, as of the Effective Time, of the Assets to be transferred to the Schlage Lock Company LLC Pension Plan in accordance with 

the assumptions and valuation methodology set forth on Schedule 6.2(b) attached hereto (the “Estimated Pension Plan Transfer Amount”).
(iii)On or about the Effective Time (or such later time as mutually agreed by the Parties), IR and Allegion shall cooperate in good faith to cause an initial transfer of Assets from the trust of the Parent Pension Plans to the trust of the Schlage Lock Company LLC Pension Plan in an amount to be approximately ninety percent (90%) of the Estimated Pension Plan Transfer Amount (such amount, the “Initial Transfer Amount”).  IR shall satisfy its obligation pursuant to this Section 6.2(b)(iii) by causing the trust of the Parent Pension Plans to transfer Assets equal to the Initial Transfer Amount.  Assets may be transferred in cash, cash equivalents, securities or, if acceptable to Allegion, in kind, or in a combination thereof, as determined by IR in its sole discretion (other than in kind assets).
(iv)Within sixty (60) days (or such later time as mutually agreed by the Parties) following the Effective Time, IR shall cause the IR Actuary to provide Allegion with a revised calculation of the value, as of the Effective Time, of the Assets to be transferred to the Schlage Lock Company LLC Pension Plan determined in accordance with the assumptions and valuation methodology set forth on Schedule 6.2(b) attached hereto (the “Revised Pension Plan Transfer Amount”).  Allegion may submit, at its sole cost and expense, the Revised Pension Plan Transfer Amount to the Allegion Actuary for verification; provided, that, such verification process and any calculation performed by the Allegion Actuary in connection therewith shall be performed solely on the basis of the assumptions and valuation methodology set forth on Schedule 6.2(b) attached hereto.  In order to perform such verification, upon request from Allegion, the Allegion Actuary will receive the data and additional detailed methodology used to calculate the Initial Transfer Amount and the Final Pension Plan Transfer Amount (if reasonably needed) from the IR Actuary.  Allegion will be responsible for the cost and expense of the Allegion Actuary and IR will be responsible for the cost and expense for the IR Actuary for such data transfer.  In the event the Allegion Actuary so determines that the value, as of the Effective Time, of the Assets to be transferred to the Schlage Lock Company LLC Pension Plan differs from the Revised Pension Plan Transfer Amount, the Allegion Actuary shall identify in writing to the IR Actuary all objections to the determination within sixty (60) days following provision of the revised value calculation to Allegion pursuant to the first sentence of this paragraph (iv), and the Allegion Actuary and the IR Actuary shall use good faith efforts to reconcile any such difference.  If the Allegion Actuary and the IR Actuary fail to reconcile such differences, the Allegion Actuary and the IR Actuary shall jointly designate a third, independent actuary whose calculation of the value, as of the Effective Time, of the Assets to be transferred to the Schlage Lock Company LLC Pension Plan shall be final and binding; provided, that, such calculation must be performed within a reasonable period of time, but no more than one hundred twenty (120) days following designation of such third actuary and in accordance with the assumptions and valuation methodology set forth on Schedule 6.2(b) attached hereto; and provided, further, that such value shall be between the value determined by the Allegion Actuary and the Revised Pension Plan Transfer Amount or equal to either such value.  IR and Allegion shall each pay one-half of the costs incurred in connection with the retention of such independent actuary.  The final, verified value, as of the Effective Time, of the Assets to be transferred to the Schlage Lock Company LLC Pension Plan as determined in accordance with this Section 6.2(b)(iv) shall be referred to herein as the “Final Pension Plan Transfer Amount.”
(v)Within forty-five (45) days (or such later time as mutually agreed by the Parties) of the determination of the Final Pension Plan Transfer Amount, IR shall cause the Parent Pension Plans to transfer to the Schlage Lock Company LLC Pension Plan (the date of such transfer, the “Final Transfer Date”) the amounts, as determined by IR in its discretion) in cash, cash equivalents or securities, or if acceptable to Allegion, other assets in kind equal to (A) the 

Final Pension Plan Transfer Amount minus (B) the Initial Transfer Amount (such difference, as adjusted to reflect earnings or losses as described in this Section 6.2(b)(v), the “True-Up Amount”); provided, that, in the event the True-Up Amount is negative, IR shall not be required to cause any such additional transfer and instead Allegion shall be required to cause a transfer of cash, cash equivalents or securities (or, in its discretion, if acceptable to IR, assets in kind) from the Schlage Lock Company LLC Pension Plan to each or any of the Parent Pension Plans as required in an amount equal to the absolute value of the True-Up Amount.  The Parties acknowledge that the Parent Pension Plans' transfer of the True-Up Amounts to the Schlage Lock Company LLC Pension Plan shall be in full settlement and satisfaction of the obligations of IR to cause the transfer of, and the Parent Pension Plans to transfer, Assets to the Schlage Lock Company LLC Pension Plan pursuant to this Section 6.2(b)(v).  The True-Up Amounts, if any, shall be paid individually from the affected Parent Pension Plans to the Schlage Lock Company LLC Pension Plan, as determined by IR in its discretion in kind (if acceptable to Allegion), in cash, cash equivalents or securities, and shall be adjusted to reflect fees or charges paid or incurred, and earnings or losses during the period from the Effective Time to the Final Transfer Date.  Such earnings or losses shall be determined based on the actual rates of return of each of the affected Parent Pension Plans for the period commencing as of the Effective Time and ending as close as administratively practicable to the Final Transfer Date.  In the event that Allegion is obligated to cause the Schlage Lock Company LLC Pension Plan to reimburse any or all of the Parent Pension Plans pursuant to this Section 6.2(b)(v), such reimbursements shall be performed in accordance with the same principles set forth herein with respect to the payment of the True-Up Amount.  The Parties acknowledge that the Schlage Lock Company LLC Pension Plan's transfer of such reimbursement amounts to the affected Parent Pension Plans shall be in full settlement and satisfaction of the obligations of Allegion to cause the transfer of, and the Schlage Lock Company LLC Pension Plan to transfer, Assets to the Parent Pension Plans pursuant to this Section 6.2(b)(v). 
(vi)Notwithstanding the generality of the foregoing, all determinations, calculations and payments under this Section 6.2 with respect to any of the Parent Pension Plans shall be made separately with respect to each the Parent Pension Plans, and in no event shall the Assets or Liabilities of one of the Parent Pension Plans be utilized to satisfy the obligations of another Parent Pension Plan when giving effect to this Section 6.2 in any respect.
Section 6.3.    Tax Qualified Status.  Allegion will take all steps and make any necessary filings with the IRS to establish and maintain the Schlage Lock Company LLC Pension Plan so that such plan is qualified under Section 401(a) of the Code and the related trust is tax-exempt under Section 501(a) of the Code, including promptly seeking and obtaining a favorable determination letter from the IRS as to such qualification.  
Article VII

U.S. QUALIFIED DEFINED CONTRIBUTION PLANS 
Section 7.1.    Establishment of the Schlage Lock Company LLC 401(k) Plans.  No later than the Effective Time, Schlage Lock Company LLC, a Transferred Group Entity, shall have established  defined contribution plans that are intended to meet the requirements of Section 401(a) of the Code and a related trust that is intended to meet the requirements of Section 501(a) of the Code for the benefit of Allegion Group Employees and Former Allegion Group Employees (the “Schlage Lock Company LLC 401(k) Plans”).  Effective as of the Effective Time, either Schlage Lock Company LLC  shall remain the plan sponsor of the Schlage Lock Company LLC 401(k) Plans or Allegion shall or shall cause another Allegion Entity to assume the Schlage Lock Company LLC 401(k) Plans.  Allegion shall be responsible for taking all necessary, reasonable, and appropriate action to establish, maintain, and administer the Schlage Lock Company LLC 401(k) Plans so that they are qualified under Section 401(a) of the Code and 

that the related trust thereunder is exempt under Section 501(a) of the Code.  Allegion (acting directly or through its Affiliates) shall be responsible for any and all Liabilities and other obligations with respect to the Schlage Lock Company LLC 401(k) Plans.  
Section 7.2.    Transfer of IR Savings Plan Assets.  Not later than thirty (30) days following the Effective Time (or such later time as mutually agreed by the Parties), IR shall cause the accounts (including any outstanding loan balances) in the IR Savings Plans attributable to Allegion Group Employees and Former Allegion Group Employees who will participate in the Schlage Lock Company LLC 401(k) Plans (the “Schlage Lock Company LLC 401(k) Plan Beneficiaries”) and all of the Assets in the IR Savings Plans related thereto to be transferred to the Schlage Lock Company LLC 401(k) Plan, and Allegion shall cause the Schlage Lock Company LLC 401(k) Plans to accept such transfer of accounts and underlying Assets and, effective as of the date of such transfer, to assume and to fully perform, pay, and discharge, all obligations of the IR Savings Plans relating to the accounts of the Schlage Lock Company LLC 401(k) Plan Beneficiaries (to the extent the Assets related to those accounts are actually transferred from the IR Savings Plans to the Schlage Lock Company LLC 401(k) Plans) as of the Effective Time.  Assets invested in the IR Savings Plans in investment funds that will be replicated in the Schlage Lock Company LLC 401(k) Plan shall be transferred in kind, and Assets invested in investment funds that will not be replicated in the Schlage Lock Company LLC 401(k) Plan shall be mapped into new investment funds that will be established for such purpose.  The transfer of Assets shall be conducted in accordance with Section 414(l) of the Code, Treasury Regulation Section 1.414(1)-1, and Section 208 of ERISA.
Section 7.3.    Treatment of Allegion Ordinary Shares and IR Ordinary Shares.
(a)Allegion Ordinary Share Unit Fund; Allegion Ordinary Shares Held in IR Savings Plan Accounts.  The Schlage Lock Company LLC 401(k) Plans will provide, effective as of the Effective Time: (i) for the establishment of an Allegion Ordinary Share Unit Fund; (ii) that such Allegion Ordinary Share Unit Fund shall receive a transfer of and hold all Allegion Ordinary Shares distributed in connection with the Distribution in respect of IR Ordinary Share Units held in IR Savings Plan accounts of Schlage Lock Company LLC 401(k) Plan Beneficiaries; and (iii) that, following the Effective Time, contributions made by or on behalf of such Schlage Lock Company LLC 401(k) Plan Beneficiaries may be allocated to the Allegion Ordinary Share Unit Fund.  Allegion Ordinary Shares distributed in connection with the Distribution in respect of IR Ordinary Share Units held in IR Savings Plan accounts of IR Group Employees or Former IR Group Employees who participate in the IR Savings Plans (the “IR Savings Plan Beneficiaries”) shall be deposited in an Allegion Ordinary Share Unit Fund under the IR Savings Plans, and IR Savings Plan Beneficiaries will be prohibited from increasing their holdings in such Allegion Ordinary Share Unit Fund under the IR Savings Plans and may elect to liquidate their holdings in such Allegion Ordinary Share Unit Fund and invest those monies in any other investment fund offered under the IR Savings Plan.  Any Allegion Ordinary Share Units held in IR Savings Plan accounts of Allegion Group Employees shall be transferred in kind to the trust underlying the Schlage Lock Company LLC 401(k) Plans pursuant to Section 7.2 of this Agreement.  
(b)IR Ordinary Share Units in Schlage Lock Company LLC 401(k) Plans Accounts.  Without limiting the generality of the provisions of Section 7.2, IR Ordinary Share Units held in IR Savings Plan accounts of Schlage Lock Company LLC 401(k) Plan Beneficiaries prior to the Effective Time shall be transferred in kind to an IR Ordinary Share Unit Fund under the Schlage Lock Company LLC 401(k) Plan pursuant to Section 7.2 of this Agreement.  Schlage Lock Company LLC 401(k) Plan Beneficiaries will be prohibited from increasing their holdings in IR Ordinary Share Units under such IR Ordinary Share Unit Fund and may elect to liquidate their holdings in such IR Ordinary Share Unit Fund and invest those monies in any other investment fund offered under the Schlage Lock Company LLC 401(k) Plans.

Section 7.4.    Tax Qualified Status.  Allegion will take all steps and make any necessary filings with the IRS to establish and maintain the Schlage Lock Company LLC 401(k) Plans so that such plans are qualified under Section 401(a) of the Code and the related trust is tax-exempt under Section 501(a) of the Code, including promptly seeking and obtaining a favorable determination letter from the IRS as to such qualification.  Furthermore, no later than thirty (30) days prior to the Effective Time, IR and Allegion (each acting directly or through their respective Affiliates) shall, to the extent necessary, file IRS Form 5310-A regarding the transfer of Assets and Liabilities from the IR Savings Plans to the Schlage Lock Company LLC 401(k) Plans as discussed in this Article VII.
Article VIII

NONQUALIFIED DEFERRED COMPENSATION PLANS 
Section 8.1.    Nonqualified Deferred Compensation Plans.
(a)Establishing Allegion Deferred Compensation Plans.  Except as otherwise set forth on Schedule 8.1(a), as of the Transferred Group Adoption Date, Schlage Lock Company LLC, a Transferred Group Entity, shall have established and adopted deferred compensation plans for its key employees (collectively, the “Allegion Deferred Compensation Plans”) to provide each Allegion Group Employee or Former Allegion Group Employee who was a participant in the IR Deferred Compensation Plans as of immediately prior to the Effective Time (each, an “Allegion Deferred Compensation Plan Beneficiary”) benefits in respect of service and compensation following the Effective Time substantially similar to those accrued with respect to such person under the IR Deferred Compensation Plans as of immediately prior to the Effective Time.  Effective as of the Effective Time, either Schlage Lock Company LLC  shall remain the plan sponsor of the Allegion Deferred Compensation Plans or Allegion shall or shall cause another Allegion Entity to assume the Allegion Deferred Compensation Plans.  As of the Effective Time, the Allegion Group Employees and Former Allegion Group Employees shall no longer participate in the IR Deferred Compensation Plans.  The Parties agree that for purposes of the IR Deferred Compensation Plans, an Allegion Deferred Compensation Plan Beneficiary shall not be considered to have incurred a separation of service as determined under the general rules of Section 409A of the Code as a result of the Distribution or the transfer of employment or service from IR (or an IR Entity) to Allegion (or an Allegion Entity), and such employment or service shall only be considered to terminate for purposes of the Allegion Deferred Compensation Plans when the employment or service of such Allegion Deferred Compensation Plan Beneficiary with the Allegion Group terminates in accordance with the terms of the Allegion Deferred Compensation Plans and applicable Laws.  
(b)Liability and Responsibility.  The Liabilities in respect of Allegion Deferred Compensation Beneficiaries under the IR Deferred Compensation Plans shall be assumed by the member of the Allegion Group which sponsors the applicable Allegion Deferred Compensation Plan, effective as of the Effective Time.  Allegion shall have sole responsibility for the administration of the Allegion Deferred Compensation Plans and the payment of benefits thereunder to or on behalf of Allegion Group Employees and Former Allegion Group Employees, and no member of the IR Group shall have any liability or responsibility therefor.  IR shall have sole responsibility for the administration of the IR Deferred Compensation Plans and the payment of benefits thereunder to or on behalf of IR Group Employees and Former IR Group Employees, and no member of the Allegion Group shall have any liability or responsibility therefor.  

Article IX

U.S. WELFARE PLANS
Section 9.1.    Establishment of Allegion Welfare Plans.  Following the Effective Time and prior to the Allegion Welfare Plan Implementation Date, Allegion shall, or shall cause another Allegion Entity to, establish and adopt Allegion Welfare Plans that will provide welfare benefits, effective as of January 1, 2014, or such later date agreed to in writing by IR (as applicable, the “Allegion Welfare Plan Implementation Date”), to each Allegion Group Employee or Former Allegion Group Employee who is a participant in any IR Welfare Plan (and their eligible spouses and dependents, as the case may be) (collectively, the “Allegion Welfare Plan Participants”) under terms and conditions that are similar to the IR Welfare Plans.  The Parties may vary the Allegion Welfare Plan Implementation Date of each Allegion Welfare Plan.  Coverage and benefits under the Allegion Welfare Plans shall then be provided to the Allegion Welfare Plan Participants on an uninterrupted basis under the newly established Allegion Welfare Plans which shall contain similar benefit provisions as in effect under the corresponding IR Welfare Plans immediately prior to the Effective Time.  Allegion Welfare Plan Participants shall cease to be eligible for coverage under the IR Welfare Plans on the Allegion Welfare Plan Implementation Date with respect to the specific IR Welfare Plan affected on such date.  For the avoidance of doubt, Allegion Welfare Plan Participants shall not participate in any IR Welfare Plans after the time set forth in the immediately preceding sentence, and IR Group Employees and Former IR Group Employees shall not participate in any Allegion Welfare Plans at any time.

Section 9.2.    Transitional Matters Under Allegion Welfare Plans; Treatment of Claims Incurred.  
(a)Liability for Claims.  With respect to unpaid covered claims that are either incurred but not processed or that are incurred but unreported prior to the Effective Time by any Allegion Welfare Plan Participant under any IR Welfare Plans, including claims that are self-insured and claims that are fully insured through third-party insurance, Allegion shall assume and be responsible for the payment for such claims or shall cause such Allegion Welfare Plan to fully perform, pay and discharge all such claims, as the case may be.  No IR Entity shall be responsible for any Liability with respect to any such claims.  
(i)Claims Incurred.  For purposes of this Section 9.2(a), a claim or expense is deemed to be incurred (A) with respect to (I) medical (including continuous hospitalization), dental, vision and/or prescription drug benefits, upon the rendering of health services giving rise to such claim or expense; and (II) Medicare supplement premium reimbursement under the Post-65 Retiree Medical Reimbursement Account arrangement (the “HRA”), upon the date the supplemental health coverage premiums are paid; (B) with respect to life insurance, accidental death and dismemberment and business travel accident insurance, upon the occurrence of the event giving rise to such claim or expense; and (C) with respect to long-term disability benefits, upon the date of an individual’s disability, as determined by the disability benefit insurance carrier or claim administrator, giving rise to such claim or expense.
(b)Credit for Deductibles and Other Limits.  With respect to each Allegion Welfare Plan Participant, Allegion and IR shall use reasonable efforts to agree that the Allegion Welfare Plans will give credit for the plan year in which the Effective Time occurs for any amount paid, number of services obtained or provider visits by such Allegion Welfare Plan Participant toward deductibles, out-of-pocket maximums, limits on number of services or visits, or other similar limitations to the extent such amounts are taken into account under the comparable IR Welfare Plan.  For purposes of any life-time maximum benefit limit payable to an Allegion Welfare Plan Participant under any Allegion Welfare Plan, the 

Allegion Welfare Plans will recognize any expenses paid or reimbursed by an IR Welfare Plan with respect to such participant prior to the Effective Time to the same extent such expense payments or reimbursements would be recognized in respect of an active plan participant under the applicable IR Welfare Plan.  
(c)COBRA.  IR shall be responsible for administering compliance with the group health care continuation requirements of COBRA, the certificate of creditable coverage requirements of HIPAA and the corresponding provisions of the IR Welfare Plan with respect to Allegion Group Employees and Former Allegion Group Employees and their covered dependents who incur a COBRA qualifying event or loss of coverage under the IR Welfare Plan prior to the Allegion Welfare Plan Implementation Date, subject to Allegion’s obligation to reimburse IR for the cost of such administration under the Transition Services Agreement and coverage under the IR Welfare Plan.  At and after the Allegion Welfare Plan Implementation Date, Allegion shall assume all requirements with respect to COBRA and the certificate of creditable coverage requirements under HIPAA with respect to all Allegion Group Employees and Former Allegion Group Employees.
(d)Additional Details Regarding HRA.  Pursuant to Section 9.1, at or prior to the Allegion Welfare Plan Implementation Date, Allegion shall, or shall cause another Allegion Entity to, establish and adopt Allegion Welfare Plans which will provide HRA benefits to eligible Allegion Welfare Plan Participants.  To the extent that any Allegion Welfare Plan provides HRA benefits (each, an “Allegion HRA”), such Allegion Welfare Plan shall be effective as of the applicable Allegion Welfare Plan Implementation Date.
(i)It is the intention of the Parties that all activity under an Allegion Welfare Plan Participant’s HRA with IR for the plan year in which the relevant Allegion Welfare Plan Implementation Date occurs, be deemed to be activity under the corresponding Allegion HRA.  Accordingly, (A) any period of participation by an Allegion Welfare Plan Participant in an IR HRA during the plan year in which the Distribution occurs (the “IR HRA Participation Period”) will be deemed a period when the Allegion Welfare Plan Participant participated in the corresponding Allegion HRA; (B) all expenses incurred during the IR HRA Participation Period will be deemed incurred while the Allegion Welfare Plan Participant’s coverage was in effect under the corresponding Allegion HRA; (C) all reimbursements made with respect to an IR HRA Participation Period under an IR HRA will be deemed to have been made with respect to the corresponding Allegion HRA; and (D) any balance accrued under the IR HRA as of the Effective Date shall become a balance under the Allegion HRA.
Notwithstanding anything in this Section 9.3(d), at and after the relevant Allegion Welfare Plan Implementation Date, the Allegion Group shall assume, and cause the Allegion Welfare Plans to be solely responsible for, all claims by Allegion Welfare Plan Participants under the applicable IR Welfare Plan HRA that were incurred but not paid, whether incurred prior to, on, or after the Effective Time, that have not been paid in full as of the Effective Time.

(e)Employees on Leave.  As of the Effective Time, Allegion shall assume and satisfy all Liabilities with respect to any Allegion Group Employee who is, as of the Effective Time, on vacation or other approved leave of absence, whether paid or unpaid (including leave under FMLA or corresponding state Law, disability, military leave and other approved leave, including Liabilities for salary continuation, paid leave or continuing Benefit Plans).  Notwithstanding the foregoing, any individual residing in California who would have become an Allegion Group Employee as of the Effective Time but was on an approved leave of absence at the Effective Time shall become an Allegion Group Employee following the conclusion of his or her approved leave.

Section 9.3.    Continuity of Benefits, Benefit Elections and Beneficiary Designations.
(a)    Benefit Elections and Designations.  As of the first day of the month after the month in which the Distribution occurs, or if later, the Allegion Welfare Plan Implementation Date (or such other date provided for under Section 9.3(b)), Allegion shall cause the Allegion Welfare Plans to recognize and give effect to all elections and designations (including all coverage and contribution elections and beneficiary designations) made by each Allegion Welfare Plan Participant under, or with respect to, the annual enrollment conducted on behalf of the Allegion Welfare Plan by IR.  Notwithstanding the foregoing, nothing in this Section 9.3(a) will prohibit Allegion from soliciting or causing the solicitation of new election forms or beneficiary designations from Allegion Welfare Plan Participants to be effective under the Allegion Welfare Plan as of January 1, 2014.
(b)    Additional Details Regarding Flexible Spending Accounts.  Pursuant to Section 9.1, at or prior to the Allegion Welfare Plan Implementation Date, Allegion shall, or shall cause another Allegion Entity to, establish and adopt Allegion Welfare Plans which will provide health care flexible spending account or dependent care flexible spending account benefits to Allegion Welfare Plan Participants.  To the extent any Allegion Welfare Plan provides or constitutes a health care flexible spending account or dependent care flexible spending account (each an “Allegion FSA”), such Allegion Welfare Plan shall be effective as of the relevant Allegion Welfare Plan Implementation Date.  
(i)It is the intention of the Parties that all activity under an Allegion Welfare Plan Participant’s flexible spending account with IR for the plan year in which the relevant Allegion Welfare Plan Implementation Date occurs be treated instead as activity under the corresponding Allegion FSA.  Accordingly, (i) any period of participation by an Allegion Welfare Plan Participant in an IR flexible spending account during the plan year in which the relevant Allegion Welfare Plan Implementation Date occurs (the “FSA Participation Period”) will be deemed a period when the Allegion Welfare Plan Participant participated in the corresponding Allegion FSA; (ii) all expenses incurred during the FSA Participation Period will be deemed incurred while the Allegion Welfare Plan Participant’s coverage was in effect under the corresponding Allegion FSA; and (iii) all elections and reimbursements made with respect to an FSA Participation Period under an IR flexible spending account will be deemed to have been made with respect to the corresponding Allegion FSA.  
(ii)If the aggregate reimbursement payouts made to Allegion Welfare Plan Participants prior to the relevant Allegion Welfare Plan Implementation Date from the applicable IR Welfare Plan flexible spending accounts during the plan year in which the relevant Allegion Welfare Plan Implementation Date occurs are less than the aggregate accumulated contributions to such accounts made by such Allegion Welfare Plan Participants prior to the relevant Allegion Welfare Plan Implementation Date for such plan year, IR shall cause an amount equal to the amount by which such contributions are in excess of such reimbursement payouts to be transferred to Allegion (or an Allegion Entity designated by Allegion) by wire transfer of immediately available funds as soon as practicable, but in no event later than 45 days, following the relevant Allegion Welfare Plan Implementation Date.  
(iii)If the aggregate reimbursement payouts made to Allegion Welfare Plan Participants prior to the relevant Allegion Welfare Plan Implementation Date from the applicable IR Welfare Plan flexible spending accounts during the plan year in which the relevant Allegion Welfare Plan Implementation Date occurs exceed the aggregate accumulated contributions to such accounts made by the Allegion Welfare Plan Participants prior to the relevant Allegion Welfare Plan Implementation Date for such plan year, Allegion shall cause an amount equal to the amount by which such reimbursement payouts are in excess of such contributions to be transferred to IR (or an IR Group Entity designated by IR) by wire transfer of immediately available funds as soon 

as practicable, but in no event later than 45 days, following the relevant Allegion Welfare Plan Implementation Date.  
(iv)Notwithstanding anything in this Section 9.3(b), at and after the relevant Allegion Welfare Plan Implementation Date, the Allegion Group shall assume, and cause the Allegion Welfare Plans to be solely responsible for, all claims by Allegion Welfare Plan Participants under the applicable IR Welfare Plan flexible spending accounts that were incurred in the plan year in which the Distribution occurs, whether incurred prior to, on, or after the Effective Time, that have not been paid in full as of the Effective Time.  
(c)    Additional Details Regarding Health Savings Accounts.  Pursuant to Section 9.1, on or prior to the relevant Allegion Welfare Plan Implementation Date, Allegion shall, or shall cause another Allegion Entity to, establish and adopt Allegion Welfare Plans and will coordinate with a health savings account custodian to make available a health savings account option for eligible Allegion Welfare Plan Participants which will provide health savings account benefits to eligible Allegion Welfare Plan Participants similar to the benefits provided to eligible participants in the Health Savings Plan option of the IR Welfare Plan.  The health savings account made available in connection with the Allegion Welfare Plan shall, to the extent permissible under applicable IRS regulations, be effective as of the relevant Allegion Welfare Plan Implementation Date.    
(d)    Employer Non-elective Contributions.  As of immediately after the relevant Allegion Welfare Plan Implementation Date, Allegion shall cause any Allegion Welfare Plan that constitutes a “cafeteria plan” under Section 125 of the Code to recognize and give effect to all non-elective employer contributions credited toward coverage of an Allegion Welfare Plan Participant under the corresponding IR Welfare Plan that is a cafeteria plan under Section 125 of the Code for the applicable plan year.  
(e)    Waiver of Conditions or Restrictions.  Unless prohibited by applicable Law, the Allegion Welfare Plans will waive all limitations, exclusions, service conditions, waiting period limitations or evidence of insurability requirements that would otherwise be applicable to the Allegion Welfare Plan Participant following the Effective Time to the extent that such Employee had previously satisfied such limitation under the corresponding IR Welfare Plan.  
Section 9.4.    Insurance Contracts.  To the extent any IR Welfare Plan is funded through the purchase of an insurance contract or is subject to any stop loss contract, IR and Allegion will cooperate and use their commercially reasonable efforts to replicate such insurance contracts for Allegion (except to the extent changes are required under applicable state insurance Laws or filings by the respective insurers) and to maintain any pricing discounts or other preferential terms for both IR and Allegion for a reasonable term.  Neither Party shall be liable for failure to obtain such insurance contracts, pricing discounts, or other preferential terms for the other Party.  Each Party shall be responsible for any additional premiums, charges, or administrative fees that such Party may incur pursuant to this Section 9.4.  
Article X

NON-U.S. BENEFIT PLANS
Section 10.1.    Non-U.S. Retirement Plans.  
(a)Except as otherwise provided in Article XIV, with respect to any IR Benefit Plan covering non-U.S. Allegion Group Employees or Former Allegion Group Employees and which is a defined benefit or defined contribution retirement or pension plan, Allegion shall cause each such Allegion Group Employee or Former Allegion Group Employee, as applicable, to become covered by a corresponding Allegion Benefit Plan which is a defined benefit or defined contribution retirement or pension plan, effective as of the Effective Time or as soon as practicable thereafter.  To the extent such 

coverage does not commence until following the Effective Time, Allegion shall indemnify IR for any continued participation by such employee in the corresponding IR Benefit Plan.  IR will reasonably cooperate with Allegion in complying with the immediately preceding sentence.  The Parties have set forth on Schedule 10.1(a) a listing of those non-U.S. IR retirement or pension plans in which Allegion Group Employees and Former Allegion Group Employees are known to participate.  Schedule 10.1(a) may be updated by mutual written consent of IR and Allegion at any time up to 60 days after the Effective Time.
(b)Except as otherwise provided in Article XIV, with respect to any Allegion Benefit Plan covering non-U.S. IR Group Employees or Former IR Group Employees and which is a defined benefit or defined contribution retirement or pension plan, IR shall cause each such IR Group Employee or Former IR Group Employee, as applicable, to become covered by a corresponding IR benefit plan which is a defined benefit or defined contribution retirement or pension plan, effective as of the Effective Time or as soon as practicable thereafter.  To the extent such coverage does not commence until following the Effective Time, IR shall indemnify Allegion for any continued participation by such employee in the corresponding Allegion Benefit Plan.  Allegion will reasonably cooperate with IR in complying with the immediately preceding sentence.  The Parties have set forth on Schedule 10.1(b) a listing of those non-U.S. Allegion retirement or pension plans in which IR Group Employees and Former IR Group Employees are known to participate.  Schedule 10.1(b) may be updated by mutual written consent of IR and Allegion at any time up to 60 days after the Effective Time.
Section 10.2.    Non-U.S. Welfare Plans.  
(a)    Effective as of the Effective Time (or as soon as practicable thereafter), Allegion shall, or shall cause another Allegion Entity to, establish and adopt Allegion Welfare Plans for the benefit of each Allegion Group Employee or Former Allegion Group Employee who resides or works outside the United States that are substantially identical (to the extent practicable) to the welfare benefits that such Allegion Group Employee or Former Allegion Group Employee participated in immediately prior to the Effective Time.  To the extent such coverage does not commence until following the Effective Time, Allegion shall indemnify IR for any continued participation by such employee in the corresponding IR Welfare Plan.  IR will reasonably cooperate with Allegion in complying with the immediately preceding sentence.  The Parties have set forth on Schedule 10.2(a) a listing of non-U.S. IR Welfare Plans in which Allegion Group Employees are known to participate.  Schedule 10.2(a) may be updated by mutual written consent of IR and Allegion at any time up to 60 days after the Effective Time.
(b)    Effective as of the Effective Time (or as soon as practicable thereafter), IR shall, or shall cause another IR Entity to, establish and adopt IR welfare plans for the benefit of each IR Group Employee or Former IR Group Employee who resides or works outside the United States that are substantially identical (to the extent practicable) to the welfare benefits that such IR Group Employee or Former IR Group Employee participated in immediately prior to the Effective Time.  To the extent such coverage does not commence until following the Effective Time, IR shall indemnify Allegion for any continued participation by such employee in the corresponding Allegion Welfare Plan.  Allegion will reasonably cooperate with IR in complying with the immediately preceding sentence.  The Parties have set forth on Schedule 10.2(b) a listing of non-U.S. Allegion Welfare Plans in which IR Group Employees are known to participate.  Schedule 10.2(b) may be updated by mutual written consent of IR and Allegion at any time up to 60 days after the Effective Time.
Article XI

WORKERS’ COMPENSATION AND UNEMPLOYMENT COMPENSATION
Section 11.1.    Allegion Workers’ and Unemployment Compensation.  Effective as of the Effective Time, the Allegion Entity employing each Allegion Group Employee shall have (and, to the 

extent it has not previously had such obligations, such Allegion Entity shall assume) the obligations for all claims and Liabilities relating to workers’ compensation and unemployment compensation benefits for all Allegion Group Employees employed by that Allegion Entity and for Former Allegion Group Employees relating to that Allegion Entity.  Effective as of the Effective Time, Allegion, acting through the Allegion Group Entity employing each Allegion Group Employee, will be responsible for (a) obtaining workers’ compensation insurance, including providing all collateral required by the insurance carriers and (b) establishing new or transferred unemployment insurance employer accounts, policies and claims handling contracts with the applicable government agencies. 
Section 11.2.    IR Workers’ and Unemployment Compensation.  Effective as of the Effective Time, the IR Entity employing each IR Group Employee shall have (and, to the extent it has not previously had such obligations, such IR Entity shall assume) the obligations for all claims and Liabilities relating to workers’ compensation and unemployment compensation benefits for all IR Group Employees and Former IR Group Employees.  Effective as of the Effective Time, the IR Entity formerly employing each IR Group Employee shall have (and, to the extent it has not previously had such obligations, such IR Entity shall assume) the obligations for all claims and Liabilities relating to workers’ compensation and unemployment compensation benefits for all Former IR Group Employees.  
Section 11.3.    Assignment of Contribution Rights.  IR will transfer and assign (or cause another member of the IR Group to transfer and assign) to a member of the Allegion Group all rights to seek contribution or damages from any applicable third party (such as a third party who aggravates an injury to a worker who makes a workers’ compensation claim) with respect to any workers’ compensation claim for which Allegion is responsible pursuant to this Article XI.  Allegion will transfer and assign (or cause another member of the Allegion Group to transfer and assign) to a member of the IR Group all rights to seek contribution or damages from any applicable third party (such as a third party who aggravates an injury to a worker who makes a workers’ compensation claim) with respect to any workers’ compensation claim for which IR is responsible pursuant to this Article XI.  
Section 11.4.    Collateral.  On and after the Effective Time, Allegion (acting directly or through a member of the Allegion Group) shall be responsible for providing all collateral required by insurance carriers in connection with workers’ compensation claims for which Liability is allocated to the Allegion Group under this Article XI.  IR (acting directly or through a member of the IR Group) shall be responsible for providing all collateral required by insurance carriers in connection with workers’ compensation claims for which Liability is allocated to the IR Group under this Article XI.
Section 11.5    Cooperation.  Allegion and IR shall use commercially reasonable efforts to provide that workers’ compensation and unemployment insurance costs are not adversely affected for either of them by reason of the Distribution.  
Article XII

SEVERANCE 
Section 12.1.    Establishment of Allegion Major Restructuring Severance Plan.  Effective as of the Effective Time, Allegion shall, or shall cause a Transferred Group Entity to establish and adopt a severance plan (the “Allegion Spin-Off Protection Plan”) (such date, the “Allegion Severance Plan Adoption Date”) to provide each Allegion Group Employee who (i) was a participant in the IR Major Restructuring Severance Plan as of immediately prior to the Allegion Severance Plan Adoption Date or (ii) is hired or promoted by an Allegion Entity on or following the Effective Time into a position and such employee would have been eligible to participate in the IR Major Restructuring Severance Plan had such employee been employed by an IR Entity in such position immediately prior to the Effective Time, benefits in respect of a “covered termination” following the Allegion Severance Plan Adoption Date that are the same as those with respect to such person under the IR Major Restructuring Severance Plan in the 

event that a “covered termination” occurred at any time prior to the Allegion Severance Plan Adoption Date.  As of the Allegion Severance Plan Adoption Date, (i) the Allegion Group Employees will no longer participate in the IR Major Restructuring Severance Plan and (ii) no member of the IR Group shall have any further Liability for, and Allegion shall indemnify each member of the IR Group, and the officers, directors, and employees of each member of the IR Group, and hold them harmless with respect to any and all Liabilities and obligations whatsoever with respect to, claims made by or with respect to any Allegion Group Employees or Former Allegion Group Employees in connection with the Allegion Major Restructuring Severance Plan, including such Liabilities relating to actions or omissions of or by any member of the Allegion Group or any officer, director, employee or agent thereof prior to, on or after the Allegion Severance Plan Adoption Date.  
Section 12.2.    Severance Arrangements, Plans, Policies and Guidelines.  Effective as of the Transferred Group Adoption Date, a Transferred Group Entity shall establish severance arrangements, plans, policies or guidelines to be effective as of the Effective Time (“Allegion Severance Arrangements”) under  which Allegion Group Employees who, immediately prior to the Effective Time, are participants in any IR severance arrangement, plan, policy or guideline, shall be eligible to participate immediately following the Effective Time.  Effective as of the Effective Time, either the Transferred Group Entity shall remain the plan sponsor of Allegion Severance Arrangements or Allegion shall or shall cause another Allegion Entity to assume the Allegion Severance Arrangements.  Such Allegion Severance Arrangements will provide terms and conditions (including severance benefits) for Allegion Group Employees who are severed from the Allegion Group following the Effective Time or Transfer Date, as the case may be, that are substantially similar to the terms and conditions (including severance benefits) provided under the applicable IR severance arrangements, plans, policies and guidelines (excluding any change in control severance plans or agreements) in which such Allegion Group Employees participated immediately prior to the Effective Time or such Transfer Date for a period not less than one year.  For the avoidance of doubt, the Distribution and the assignment, transfer or continuation of the employment of Allegion Group Employees contemplated by Section 3.1 shall not be deemed a severance of employment for purposes of this Agreement and any IR severance arrangements, plans, policies or guidelines, and effective as of the Effective Time, Allegion Group Employees shall not be eligible to receive any severance or other benefits under any IR severance plans or policies.

Article XIII

BENEFIT ARRANGEMENTS AND OTHER MATTERS 
Section 13.1.    Termination of Participation.  Except as otherwise provided under this Agreement, effective as of immediately after the Effective Time, Allegion Group Employees shall not be eligible to participate in any IR Benefit Plan.  
Section 13.2.    Accrued Time Off.  Allegion shall recognize and assume all Liability for all unused vacation, holiday, sick leave, flex days, personal days and paid-time off and other time-off benefits with respect to Allegion Group Employees which accrued prior to the Effective Time and Allegion shall credit each Allegion Group Employee with such accrual; provided, however, all Liabilities shall be reduced, dollar for dollar, to the extent that IR has made any payment related to any such unused vacation, holiday, sick leave, flex days, personal days and paid-time off and other time-off benefits with respect to Allegion Group Employees in accordance with applicable Law.  
Section 13.3.    Leaves of Absence.  Allegion will continue to apply the same leave of absence policies applicable to inactive Allegion Group Employees who are on an approved leave of absence as of the Effective Time.  Leaves of absence taken by Allegion Group Employees prior to the Effective Time shall be deemed to have been taken as employees of a member of the Allegion Group.

Section 13.4.    Restrictive Covenants in Employment and Other Agreements.  To the fullest extent permitted by the agreements described in this Section 13.4 and applicable Law, IR shall assign, or cause an applicable member of the IR Group to assign, to Allegion or a member of the Allegion Group, as designated by Allegion, all agreements containing restrictive covenants (including confidentiality, non-competition and non-solicitation provisions) between a member of the IR Group and an Allegion Group Employee, with such assignment to be effective as of the Effective Time.  To the extent that assignment of such agreements is not permitted, effective as of the Effective Time, each member of the Allegion Group shall be considered to be a successor to each member of the IR Group for purposes of, and a third-party beneficiary with respect to, all agreements containing restrictive covenants (including confidentiality, non-competition and non-solicitation provisions) between a member of the IR Group and an Allegion Group Employee, such that each member of the Allegion Group shall enjoy all the rights and benefits under such agreements (including rights and benefits as a third-party beneficiary), with respect to the business operations of the Allegion Group; provided, however, that in no event shall IR be permitted to enforce such restrictive covenant agreements against Allegion Group Employees for action taken in their capacity as employees of a member of the Allegion Group.  
Article XIV

U.K.AND CANADIAN PENSION SCHEMEs 
Section 14.1.    Establishment of Allegion UK Pension Plan.  As of the Transferred Group Adoption Date, a Transferred Group Entity shall have established a defined benefit UK pension plan and deed of trust (the “Allegion UK Pension Plan”) to provide retirement and death benefits to Allegion Group Employees, Former Allegion Group Employees and those other members of the Ingersoll-Rand Holdings Limited Retirement Benefits Plan (1974) (the “IR UK Pension Plan”) for whom Ingersoll-Rand Securities Technologies Limited was legally responsible immediately prior to the Effective Time (the “Hussmann Group”) (Allegion Group Employees, Allegion Former Group Employees and the Hussmann Group collectively, the “Allegion Pension Plan Participants”) and their dependents.  Effective as of the Effective Time, either the Transferred Group Entity shall remain the plan sponsor of the Allegion UK Pension Plan or Allegion shall cause another Allegion Entity to assume the Allegion UK Pension Plan.  Allegion shall be responsible for taking all necessary, reasonable, and appropriate action to establish, maintain, and administer the Allegion Pension Plan so that it is properly established and operated in accordance with applicable U.K. pension regulations. 
Section 14.2.    Allegion UK Pension Plan Participants.  
(a)Benefits under the Allegion UK Pension Plan.  Effective as of the Effective Time, Allegion (acting directly or through members of the Allegion Group) hereby agrees to cause the Allegion UK Pension Plan to provide retirement and death benefits to all Allegion Pension Plan Participants and their dependents as of the Effective Time that are substantially identical (to the extent practicable) to the benefits provided under the IR UK Pension Plan at the Effective Time.
(b)The Transfer Agreement at Exhibit C sets out the provisions for the transfer of assets and liabilities from the IR UK Pension Plan to the Allegion UK Pension Plan.
Section 14.3.    Payment of Statutory Debt to IR UK Pension Plan.  As soon as practicable on or after the Effective Time, Allegion shall cause Ingersoll-Rand Security Technologies Limited to pay the statutory debt due to the IR UK Pension Plan under Section 75 of the Pensions Act of 1995 as a result of the cessation of participation of Ingersoll-Rand Security Technologies Limited in the IR UK Pension Plan.
Section 14.4.    Assignment of the Canadian DC Pension Plan.  Effective as of a date on or before the Effective Time, IR shall cause Ingersoll-Rand Canada Inc., as sponsor and administrator of the Ingersoll-Rand Canada Inc. Employee Pension Plan (the “Canadian DC Pension Plan”), to assign all of its 

rights, duties, obligations and liabilities under and in relation to the Canadian DC Pension Plan to an IR Entity that is not a Transferred Group Entity (the “Canadian Pension Plan Assignee”) and to amend the Canadian DC Pension Plan as necessary to give effect to this Section 14.3.  
Section 14.5.    Allegion Canada DC Pension Plan.  Allegion shall cause an Allegion Entity to, effective as of the Effective Time, establish a registered pension plan to provide in respect of each Canadian Pension Plan Member who was accruing benefits under the Canadian DC Pension Plan pension benefits in respect of service on and after the Effective Time (the “Allegion Canada DC Pension Plan”).  Effective as of the Effective Time, each such Canadian Pension Plan Member shall cease to actively participate in and accrue benefits under the Canadian DC Pension Plan and shall participate in and accrue benefits under the Allegion Canada DC Pension Plan.  The Allegion Canada DC Pension Plan shall provide benefits which are substantially identical  to the benefits provided under the Canadian DC Pension Plan immediately prior to the Effective Time. 
Section 14.6.    DC Asset Transfer to the Allegion Canada DC Pension Plan.  All assets and liabilities under the Canadian DC Pension Plan relating to the Canadian Pension Plan Members shall be transferred from the Canadian DC Pension Plan to the Allegion Canada DC Pension Plan, subject to obtaining any required approvals from any applicable governmental authority (including any pension regulatory authority).  As soon as practicable after the Effective Time, IR shall cause the Canadian Pension Plan Assignee to seek any required approvals from any applicable governmental authority (including any pension regulatory authority) to such transfer.  Allegion shall cause the Allegion Entity that is sponsor and administrator of the Allegion Canada DC Pension Plan to take all steps required by any applicable Laws (including to provide any notice required by any applicable Laws to the Canadian Pension Plan Members, within the period of time required by any applicable Laws) to give effect to, and to obtain all necessary approvals to implement, the transfer of assets from the Canadian DC Pension Plan to the Allegion Canada DC Pension Plan as contemplated by this Section 14.5.   
Article XV

GENERAL PROVISIONS 
Section 15.1.    Preservation of Rights to Amend.  The rights of each member of the IR Group and each member of the Allegion Group to amend, waive, or terminate any Benefit Plan shall not be limited in any way by this Agreement.  
Section 15.2.    Confidentiality.  Each Party agrees that any information conveyed or otherwise received by or on behalf of a Party in conjunction herewith that is not otherwise public through no fault of such Party is confidential and is subject to the terms of the confidentiality provisions set forth herein and in the Distribution Agreement, including Section 3.3(e) of this Agreement and Section 7.6 of the Distribution Agreement.  
Section 15.3.    Administrative Complaints/Litigation.  Except as otherwise provided in this Agreement, on and after the Effective Time, Allegion shall assume, and be solely liable for, the handling, administration, investigation, and defense of actions, including ERISA, occupational safety and health, employment standards, union grievances, wrongful dismissal, discrimination or human rights, and unemployment compensation claims asserted at any time against IR or any member of the IR Group by any Allegion Group Employee (including any dependent or beneficiary of any such Employee) or any other person, to the extent such actions or claims arise out of or relate to employment or the provision of services (whether as an employee, contractor, consultant, or otherwise) to or with respect to the business activities of any member of the Allegion Group after the Effective Time.  To the extent that any legal action relates to a putative or certified class of plaintiffs, which includes both IR Group Employees (or Former IR Group Employees) and Allegion Group Employees (or Former Allegion Group Employees) and such action involves employment or benefit plan related claims, reasonable costs and expenses incurred by the Parties in responding to such legal action shall be allocated among the Parties equitably in 

proportion to a reasonable assessment of the relative proportion of Employees included in or represented by the putative or certified plaintiff class.  The procedures contained in the indemnification and related litigation cooperation provisions of the Distribution Agreement shall apply with respect to each Party’s indemnification obligations under this Section 15.3.
Section 15.4.    Reimbursement and Indemnification.  Each Party agrees to reimburse the other Party, within 30 days of receipt from the other Party of reasonable verification or except as otherwise provided in the Transition Services Agreement, for all costs and expenses which the other Party may incur on its behalf as a result of any of the respective IR and Allegion Welfare Plans, 401(k) plans, savings plans, retirement plans, Benefit Plans, and pension plans and, as contemplated by Section 12.1, any termination or severance payments or benefits.  All Liabilities retained, assumed, or indemnified against by Allegion pursuant to this Agreement, and all Liabilities retained, assumed, or indemnified against by IR pursuant to this Agreement, shall in each case be subject to the indemnification provisions of the Distribution Agreement.  Notwithstanding anything to the contrary, (i) no provision of this Agreement shall require any member of the Allegion Group to pay or reimburse to any member of the IR Group any benefit-related cost item that a member of the Allegion Group has paid or reimbursed to any member of the IR Group prior to the Effective Time; and (ii) no provision of this Agreement shall require any member of the IR Group to pay or reimburse to any member of the Allegion Group any benefit-related cost item that a member of the IR Group has paid or reimbursed to any member of the Allegion Group prior to the Effective Time.  
Section 15.5.    Costs of Compliance with Agreement.  Except as otherwise provided in this Agreement, each Party shall pay its own expenses in fulfilling its obligations under this Agreement.  
Section 15.6.    Fiduciary Matters.  IR and Allegion each acknowledges that actions required to be taken pursuant to this Agreement may be subject to fiduciary duties or standards of conduct under ERISA or other applicable Law, and no Party shall be deemed to be in violation of this Agreement if it fails to comply with any provisions hereof based upon its good-faith determination (as supported by advice from counsel experienced in such matters) that to do so would violate such a fiduciary duty or standard.  Each Party shall be responsible for taking such actions as are deemed necessary and appropriate to comply with its own fiduciary responsibilities and shall fully release and indemnify the other Party for any Liabilities caused by the failure to satisfy any such responsibility.  
Section 15.7.    Entire Agreement.  This Agreement, together with the documents referenced herein (including the Distribution Agreement and the Benefit Plans), constitutes the entire agreement and understanding among the Parties with respect to the subject matter hereof and supersedes all prior written and oral and all contemporaneous oral agreements and understandings with respect to the subject matter hereof.  To the extent any provision of this Agreement conflicts with the provisions of the Distribution Agreement, the provisions of this Agreement shall be deemed to control with respect to the subject matter hereof.  
Section 15.8.    Binding Effect; No Third-Party Beneficiaries; Assignment.  This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.  Except as otherwise expressly provided in this Agreement, this Agreement is solely for the benefit of the Parties and should not be deemed to confer upon any third parties any remedy, claim, Liability, reimbursement, cause of action, or other right in excess of those existing without reference to this Agreement.  Except as otherwise specified herein, nothing in this Agreement is intended to amend any Benefit Plan or affect the applicable plan sponsor’s right to amend or terminate any Benefit Plan pursuant to the terms of such plan.  The provisions of this Agreement are solely for the benefit of the Parties, and no current or former Employee, officer, director, or independent contractor or any other individual associated therewith shall be regarded for any purpose as a third-party beneficiary of this Agreement.  

This Agreement may not be assigned by any Party, except with the prior written consent of the other Parties.  
Section 15.9.    Amendment; Waivers.  No change or amendment may be made to this Agreement except by an instrument in writing signed on behalf of each of the Parties.  Any Party may, at any time, (i) extend the time for the performance of any of the obligations or other acts of another Party, (ii) waive any inaccuracies in the representations and warranties of another Party contained herein or in any document delivered pursuant hereto, and (iii) waive compliance by another Party with any of the agreements, covenants, or conditions contained herein.  Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by an authorized person of the Party to be bound thereby.  No failure or delay on the part of any Party in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty, covenant, or agreement contained herein, nor shall any single or partial exercise of any such right preclude other or further exercises thereof or of any other right.  
Section 15.10.    Remedies Cumulative.  All rights and remedies existing under this Agreement or the schedules attached hereto are cumulative to, and not exclusive of, any rights or remedies otherwise available.  
Section 15.11.    Notices.  Unless otherwise expressly provided herein, all notices, claims, certificates, requests, demands and other communications hereunder shall be in writing and shall be deemed to be duly given: (i) when personally delivered, (ii) if mailed by registered or certified mail, postage prepaid, return receipt requested, on the date the return receipt is executed or the letter is refused by the addressee or its agent, (iii) if sent by overnight courier which delivers only upon the executed receipt of the addressee, on the date the receipt acknowledgment is executed or refused by the addressee or its agent, or (iv) if sent by facsimile or electronic mail, on the date confirmation of transmission is received (provided that a copy of any notice delivered pursuant to this clause (iv) shall also be sent pursuant to clause (i), (ii) or (iii)), addressed to the attention of the addressee’s General Counsel at the address of its principal executive office or to such other address or facsimile number for a Party as it shall have specified by like notice.  
Section 15.12.    Counterparts.  This Agreement, including the schedules hereto and the other documents referred to herein, may be executed in multiple counterparts, each of which when executed shall be deemed to be an original but all of which together shall constitute one and the same agreement.  
Section 15.13.    Severability.  If any term or other provision of this Agreement or the schedules attached hereto is determined by a non-appealable decision by a court, administrative agency, or arbitrator to be invalid, illegal, or incapable of being enforced by any rule of Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party.  Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the court, administrative agency, or arbitrator shall interpret this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the fullest extent possible.  If any sentence in this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.  
Section 15.14.    Governing Law.  This Agreement (and any claims or disputes arising out of or related hereto or thereto or to the transactions contemplated hereby and thereby or to the inducement of any party to enter herein and therein, whether for breach of contract, tortious conduct, or otherwise and whether predicated on common law, statute, or otherwise) shall be governed by and construed and interpreted in accordance with the Laws of the State of New York irrespective of the choice of laws 

principles of the State of New York, including all matters of validity, construction, effect, enforceability, performance, and remedies.  
Section 15.15.    Dispute Resolution.  The procedures for negotiation and binding arbitration set forth in Article VIII of the Distribution Agreement shall apply to any dispute, controversy or claim (whether sounding in contract, tort or otherwise) that arises out of or relates to this Agreement, any breach or alleged breach hereof, the transactions contemplated hereby (including all actions taken in furtherance of the transactions contemplated hereby on or prior to the date hereof), or the construction, interpretation, enforceability, or validity hereof.
Section 15.16.    Performance.  Each of IR and Allegion shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any member of the IR Group and any member of the Allegion Group, respectively.  The Parties each agree to take such further actions and to execute, acknowledge, and deliver, or to cause to be executed, acknowledged, and delivered, all such further documents as are reasonably requested by the other for carrying out the purposes of this Agreement or of any document delivered pursuant to this Agreement.  
Section 15.17.    Construction.  This Agreement shall be construed as if jointly drafted by the Parties and no rule of construction or strict interpretation shall be applied against any Party.  
Section 15.18.    Effect if Distribution Does Not Occur.  Notwithstanding anything in this Agreement to the contrary, if the Distribution Agreement is terminated prior to the Effective Time, this Agreement shall be of no further force and effect and shall be void ab initio.  
Section 15.19.    Code Sections 162(m) and 409A.  Notwithstanding anything in this Agreement to the contrary (including the treatment of supplemental and deferred compensation plans, outstanding long-term incentive awards and annual incentive awards as described herein), IR and Allegion agree to negotiate in good faith regarding the need for any treatment different from that otherwise provided herein to ensure that (i) a federal income tax deduction for the payment of any supplemental or non-qualified deferred compensation or long-term incentive award, annual incentive award or other compensation is, to the extent prescribed under the terms of the applicable plan and award agreement, not limited by reason of Section 162(m) of the Code, and (ii) the treatment of any supplemental or deferred compensation or long-term incentive award, annual incentive award or other compensation does not cause the imposition of a penalty tax under Section 409A of the Code.
Section 15.20.    Settlor Prerogatives Regarding Plan Dispositions.  Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement shall be construed to require Allegion to maintain an Allegion Benefit Plan for a specific period of time, or into perpetuity, and further, nothing herein shall be construed to inhibit or otherwise interfere with Allegion’s ability to terminate an Allegion Benefit Plan, so long as the termination of an Allegion Benefit Plan that is intended to be qualified under Section 401(a) of the Code does not jeopardize the tax-qualified status of the Allegion Benefit Plan.

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in their names by a duly authorized officer as of the date first written above.  
INGERSOLL-RAND PLC 
		
	By:
	/s/ 

Name:    
Title:    

ALLEGION PLC
		
	By:
	/s/ 

Name:    
Title:

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