|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Consideration(1)(2)
|
|
|
|
|
|
|
|
|
Exchange
Consideration(1)
|
|
Early
Participation
Premium(2)
|
|
|
|
|
|
|
|
|
JCI plc
Notes for
TIFSA Notes
(principal
amount)
|
|
|
Aggregate
Principal
Amount
(mm)
|
|
Series of TIFSA
Notes to Be Exchanged
|
|
CUSIP No. / ISIN
|
|
Series of JCI plc
Notes to Be Issued
by JCI plc
|
|
JCI plc
Notes
(principal
amount)
|
|
Cash
|
|
JCI plc
Notes
(principal
amount)
|
|
Cash
|
$67.08
|
|
3.750% Notes due 2018
|
|
902118BP2 / US902118BP22
|
|
3.750% Notes due 2018
|
|
$970
|
|
$1
|
|
$30
|
|
$1,000
|
|
$1
|
$42.166
|
|
4.625% Notes due 2023
|
|
902118BQ0 / US902118BQ05
|
|
4.625% Notes due 2023
|
|
$970
|
|
$1
|
|
$30
|
|
$1,000
|
|
$1
|
€500
|
|
1.375% Notes due 2025
|
|
902118BR8 / XS1195465676
|
|
1.375% Notes due 2025
|
|
€970
|
|
€1
|
|
€30
|
|
€1,000
|
|
€1
|
$750
|
|
3.900% Notes due 2026
|
|
902118BS6 / US902118BS60
|
|
3.900% Notes due 2026
|
|
$970
|
|
$1
|
|
$30
|
|
$1,000
|
|
$1
|
$750
|
|
5.125% Notes due 2045
|
|
902118BT4 / US902118BT44
|
|
5.125% Notes due 2045
|
|
$970
|
|
$1
|
|
$30
|
|
$1,000
|
|
$1
|
-
(1)
-
Consideration,
representing principal amount of JCI plc Notes, per $1,000 principal amount of JCI Inc. Notes or TIFSA Notes, or per
€1,000 principal amount of TIFSA Euro Notes, as applicable, validly tendered, subject to any rounding as described herein.
-
(2)
-
The
term "JCI plc Notes" refers, in each case, to the series of JCI plc Notes corresponding to the series of JCI Inc. Notes or TIFSA Notes, as
applicable, of like tenor and coupon.
-
(3)
-
Includes
the Early Participation Premium for JCI Inc. Notes and TIFSA Notes, as applicable, validly tendered prior to the Early Consent Date described below
and not validly withdrawn.
Each
series of JCI plc Notes is a new series of debt securities that will be issued under an Indenture and a supplemental indenture thereto, in each case to be dated as of the
Settlement Date (collectively, the "
JCI plc Indenture
"), between JCI plc and U.S. Bank National Association, as trustee (the
"
Trustee
"). Elavon Financial Services DAC, UK Branch, as paying agent for the JCI plc Euro Notes, and Elavon Financial Services DAC, as transfer
agent and security registrar, will also be party to such supplemental indenture. We intend to enter into an agency agreement among us, Elavon Financial Services DAC, UK Branch, as paying agent for the
JCI plc Euro Notes, and Elavon Financial Services DAC, as transfer agent and security registrar for each series of the JCI plc Notes. The terms of the JCI plc Notes will include
those expressly set forth in such notes and the JCI plc Indenture and those made part of the JCI plc Indenture by reference to the Trust Indenture Act.
This
description is a summary of the material provisions of the JCI plc Notes and the JCI plc Indenture. This description does not restate those agreements and instruments
in their entirety. You should refer to the applicable JCI plc Notes and the JCI plc Indenture, copies of the forms of which are filed as exhibits to the registration statement of which
this prospectus forms a part. You are encouraged to read the applicable JCI plc Notes and the JCI plc Indenture carefully and in their entirety as they contain information not
included in this summary.
General
The JCI plc Notes will be unsecured, unsubordinated obligations of JCI plc, will rank equally in right of payment with all other
existing and future unsubordinated indebtedness and other obligations of JCI plc and will be effectively subordinated in right of payment to all existing and future secured indebtedness and
other obligations of JCI plc (to the extent of the value of the collateral securing such obligations).
The
JCI plc Notes will also be structurally subordinated to all obligations of the subsidiaries of JCI plc with respect to the assets of such subsidiaries (including
JCI Inc., TIFSA and their respective subsidiaries), other than any subsidiaries that may guarantee the JCI plc Notes in the future.
101
Table of Contents
As of September 30, 2016, after giving pro forma effect to the spin-off of Adient and the transactions related thereto and the repayment of
$1,304 million of debt on or about the date of this prospectus, but without giving effect to the Credit Agreement Amendment or the exchange offers, Johnson Controls would have had outstanding,
on a consolidated basis, approximately $12,789 million of total debt, $184 million of which would constitute debt of subsidiaries of JCI Inc. to which the JCI Inc. Notes
would have been structurally subordinated, and $4,457 million of which would constitute debt of the subsidiaries of TIFSA to which the TIFSA Notes would have been structurally subordinated.
As
of September 30, 2016, after giving pro forma effect to the spin-off of Adient and the transactions related thereto and after giving effect to the repayment of $1,304 million
of debt on or about the date of this prospectus, the Credit Agreement Amendment and completion of the exchange offers:
-
-
assuming all of the Subsidiary Notes are validly tendered for exchange for JCI plc Notes before the Early Consent Date and accepted,
Johnson Controls would have had outstanding, on a consolidated basis, approximately $12,789 million of total debt, $4,641 million of which would constitute debt of the subsidiaries of
the consolidated company to which the JCI plc Notes would have been structurally subordinated; or
-
-
assuming only 50.1% of the Subsidiary Notes are validly tendered for exchange for JCI plc Notes before the Early Consent Date and
accepted, Johnson Controls would have had outstanding, on a consolidated basis, approximately $12,789 million of total debt, $8,056 million of which would constitute debt of the
subsidiaries of the consolidated company to which the JCI plc Notes would have been structurally subordinated.
As
of September 30, 2016, Johnson Controls would have had no secured indebtedness outstanding. We expect the level of debt incurred by our subsidiaries to decrease over time.
The
JCI plc Notes (other than the JCI plc Euro Notes) (the "
JCI plc Dollar Notes
") issued pursuant to the exchange
offers will be issued in book-entry form, represented by one or more Dollar Global Securities (as defined below), and delivered through the facilities of DTC promptly on the Settlement Date. The
JCI plc Euro Notes issued pursuant to the exchange offers will be issued in book-entry form, represented by one or more Euro Global Securities (as defined below) deposited with or on behalf of
a common depositary on behalf of Clearstream and Euroclear and registered in the name of the nominee of the common depositary for the accounts of Clearstream and Euroclear.
The
JCI plc Dollar Notes will be issued in registered form without interest coupons and only in denominations of $2,000 and whole multiples of $1,000 in excess thereof. The
JCI plc Euro Notes will be issued in registered form without interest coupons and only in denominations of €100,000 and whole multiples of €1,000 in excess
thereof.
The
interest rate, interest payment dates and maturity date of each series of JCI plc Notes to be issued by JCI plc in the exchange offers will be the same as those of the
corresponding series of Subsidiary Notes to be exchanged. The JCI plc Notes received in exchange for the tendered Subsidiary Notes will accrue interest from (and including) the most recent date
to which interest has been paid on those Subsidiary Notes. In the event that the record date for an interest payment on a series of Subsidiary Notes occurs prior to the Expiration Date and the related
interest payment date would occur thereafter, interest will be paid, in full for the entire interest period and on the scheduled date for such payment (even if occurring after the Settlement Date), as
if such Subsidiary Notes had not been exchanged in the applicable exchange offer, to the holders of record of such Subsidiary Notes as of the close of business on such record date, and the
corresponding JCI plc Notes will accrue interest from and including the date to which such interest is paid. Interest will only accrue with respect to the aggregate principal amount of
JCI plc Notes you receive, which may be less than the principal amount
102
Table of Contents
of
Subsidiary Notes you tendered for exchange. Except as otherwise set forth above under "The Exchange Offers and Consent SolicitationsTerms of Exchange Offers and Consent Solicitations,"
you will not receive a payment for accrued and unpaid interest on Subsidiary Notes you exchange at the time of the exchange.
The
table below sets forth the interest rate and calculation method, interest payment dates, and maturity date for each series of JCI plc Notes. Interest with respect to each
series of JCI plc Notes will be payable on each interest payment date to the holders of record at the close of business on each corresponding record date indicated below;
provided
, that if the
record date indicated below corresponding to an interest payment date for a series of JCI plc Notes is after the Expiration
Date and prior to the Settlement Date, the record date for such interest payment date for such series of JCI plc Notes shall be the Settlement Date.
|
|
|
|
|
|
|
|
|
Series of JCI plc Notes
|
|
Interest Rate and
Calculation Method
|
|
Interest
Payment Dates
|
|
Record Dates
|
|
Maturity Date
|
2.355% Senior Notes due 2017
|
|
2.355% per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months
|
|
March 31 and September 30
|
|
Preceding March 15 and September 15, respectively
|
|
March 31, 2017
|
7.125% Notes Due July 15, 2017
|
|
7.125% per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months
|
|
July 15 and January 15
|
|
Preceding July 1 and January 1, respectively
|
|
July 15, 2017
|
1.400% Senior Notes due 2017
|
|
1.400% per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months
|
|
May 2 and November 2
|
|
Preceding April 18 and October 18, respectively
|
|
November 2, 2017
|
5.000% Senior Notes due 2020
|
|
5.000% per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months
|
|
March 30 and September 30
|
|
Preceding March 15 and September 15, respectively
|
|
March 30, 2020
|
4.25% Senior Notes due 2021
|
|
4.25% per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months
|
|
March 1 and September 1
|
|
Preceding February 15 and August 15, respectively
|
|
March 1, 2021
|
3.750% Senior Notes due 2021
|
|
3.750% per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months
|
|
June 1 and December 1
|
|
Preceding May 15 and November 15, respectively
|
|
December 1, 2021
|
3.625% Senior Notes due 2024
|
|
3.625% per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months
|
|
January 2 and July 2
|
|
Preceding December 18 and June 18, respectively
|
|
July 2, 2024
|
6.000% Notes due 2036
|
|
6.000% per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months
|
|
January 15 and July 15
|
|
Preceding January 1 and July 1, respectively
|
|
January 15, 2036
|
5.70% Senior Notes due 2041
|
|
5.70% per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months
|
|
March 1 and September 1
|
|
Preceding February 15 and August 15, respectively
|
|
March 1, 2041
|
5.250% Senior Notes due 2041
|
|
5.250% per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months
|
|
June 1 and December 1
|
|
Preceding May 15 and November 15, respectively
|
|
December 1, 2041
|
4.625% Senior Notes due 2044
|
|
4.625% per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months
|
|
January 2 and July 2
|
|
Preceding December 18 and June 18, respectively
|
|
July 2, 2044
|
6.950% Debentures due December 1, 2045
|
|
6.950% per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months
|
|
June 1 and December 1
|
|
Preceding May 15 and November 15, respectively
|
|
December 1, 2045
|
4.950% Senior Notes due 2064
|
|
4.950% per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months
|
|
January 2 and July 2
|
|
Preceding December 18 and June 18, respectively
|
|
July 2, 2064
|
103
Table of Contents
|
|
|
|
|
|
|
|
|
Series of JCI plc Notes
|
|
Interest Rate and
Calculation Method
|
|
Interest
Payment Dates
|
|
Record Dates
|
|
Maturity Date
|
3.750% Notes due 2018
|
|
3.750% per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months
|
|
January 15 and July 15
|
|
Preceding January 1 and July 1, respectively
|
|
January 15, 2018
|
4.625% Notes due 2023
|
|
4.625% per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months
|
|
January 15 and July 15
|
|
Preceding January 1 and July 1, respectively
|
|
January 15, 2023
|
1.375% Notes due 2025
|
|
1.375% per annum, calculated based on the actual number of days in the period for which interest is being calculated and the actual number of days from and including the last date on which interest was paid (or
February 25, 2016, if no interest has been paid), to but excluding the next scheduled interest payment date (ACTUAL/ACTUAL (ICMA)).
|
|
February 25
|
|
Preceding February 10
|
|
February 25, 2025
|
3.900% Notes due 2026
|
|
3.900% per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months
|
|
February 14 and August 14
|
|
Preceding February 1 and August 1, respectively
|
|
February 14, 2026
|
5.125% Notes due 2045
|
|
5.125% per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months
|
|
March 14 and September 14
|
|
Preceding March 1 and September 1, respectively
|
|
September 14, 2045
|
Except
as provided below, the JCI plc Notes shall not be subject to redemption, repurchase or repayment at the option of any holder thereof, upon the occurrence of any particular
circumstance or otherwise. The JCI plc Notes will not have the benefit of any sinking fund. The JCI plc Notes are not convertible into shares or other securities of JCI plc.
JCI plc Indenture May Be Used for Future Issuances
We may, without the consent of the then existing holders of the JCI plc Notes of any series, "re-open" any series of JCI plc Notes
and issue additional JCI plc Notes of such series, which additional JCI plc Notes will have the same terms as the JCI plc Notes of such series offered hereby except for the issue
price, issue date and, under some circumstances, the first interest payment date;
provided that, if such additional JCI plc Notes are not fungible with the JCI plc Notes of the applicable series for U.S. federal income tax purposes, such additional JCI plc
Notes will have a separate CUSIP, ISIN and/or other identifying number, as applicable. Additional JCI plc Notes issued in this manner will form a single series with the JCI plc
Notes of the applicable series offered hereby.
In
addition, the JCI plc Indenture will not limit the amount of debt securities that can be issued thereunder and will provide that debt securities of any series may be issued
thereunder up to the aggregate principal amount that we may authorize from time to time. All debt securities issued as a series, including those issued pursuant to any reopening of a series, will vote
together as a single class. Debt securities issued pursuant to the JCI plc Indenture may have terms that differ from those of the JCI plc Notes issued pursuant to the exchange offers, as
set forth in Section 2.01 of the JCI plc Indenture.
Issuance of JCI plc Euro Notes in Euros
All payments of interest and principal, including payments made upon any redemption or repurchase of the JCI plc Euro Notes, will be
payable in euros. If, on or after the date of this prospectus, the euro is unavailable to us due to the imposition of exchange controls or other circumstances beyond our control or if the euro is no
longer being used by the then member states of the European Monetary Union that have adopted the euro as their currency or for the settlement of transactions by public institutions of or within the
international banking community, then all payments in respect of the JCI plc Euro Notes will be made in U.S. dollars until the euro is again available to us
104
Table of Contents
or
so used. In such circumstances, the amount payable on any date in euros will be converted into U.S. dollars at the rate mandated by the U.S. Federal Reserve Board as of the close of business
on the second business day prior to the relevant payment date or, in the event the U.S. Federal Reserve Board has not mandated a rate of conversion, on the basis of the then most recent U.S.
dollar/euro exchange rate available on or prior to the second business day prior to the relevant payment date as determined by JCI plc in its sole discretion. Any payment in respect of the
JCI plc Euro Notes so made in U.S. dollars will not constitute an Event of Default (as defined below) under the JCI plc Euro Notes or the JCI plc Indenture. Neither the
Trustee nor the paying agent for the JCI plc Euro Notes shall have any responsibility for any calculation or conversion in connection with the foregoing.
The
November 23, 2016 closing euro/U.S. dollar exchange rate was €1.00 = $1.0557, as published by Bloomberg L.P. Investors in the JCI plc Euro
Notes will be subject to currency exchange
risks as to payments of principal and interest that may have important economic and tax consequences to them. See "Risk Factors."
Optional Redemption
JCI plc Dollar Notes
Prior to the applicable Par Call Date set forth in the table below, JCI plc may, at its option, redeem the JCI plc Dollar Notes of
any series (other than the JCI plc Dollar Notes designated as "non-par callable" under the caption "Par Call Date" and/or "non-callable prior to maturity" under the caption "Applicable Spread"
in the table below), in whole at any time or in part from time to time (in $1,000 increments, provided that any remaining principal amount thereof shall be at least the minimum authorized denomination
thereof), at a redemption price equal to the greater of (the "
Applicable Par Call Date Notes Premium
"):
(i) 100%
of the principal amount of the JCI plc Dollar Notes of the applicable series to be redeemed, and
(ii) as
determined by the Quotation Agent and delivered to the Trustee in writing, the sum of the present values of the remaining scheduled payments of principal and
interest thereon that would be due if the applicable JCI plc Dollar Notes matured on the applicable Par Call Date (exclusive of interest accrued to the redemption date), discounted to the
redemption date (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Redemption Treasury Rate plus the Applicable Spread set forth in the table below, plus, in either situation
(i) or (ii), accrued and unpaid interest, if any, thereon to, but excluding, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due
on the relevant interest payment date).
On
or after the applicable Par Call Date, JCI plc may, at its option, redeem the JCI plc Dollar Notes of any series (other than the JCI plc Dollar Notes designated
as "non-par callable" under the caption "Par Call Date" and/or "non-callable prior to maturity" under the caption "Applicable Spread" in the table below), in whole at any time or in part from time to
time (in $1,000 increments, provided that any remaining principal amount thereof shall be at least the minimum authorized denomination thereof), at a redemption price equal to 100% of the principal
amount of the JCI plc Dollar Notes of the applicable
series to be redeemed, plus accrued and unpaid interest, if any, thereon to, but excluding, the redemption date (subject to the right of holders of record on the relevant record date to receive
interest due on the relevant interest payment date).
JCI plc
may, at its option, redeem each series of JCI plc Dollar Notes designated as "non-par callable" under the caption "Par Call Date" and not designated as
"non-callable prior to maturity" under the caption "Applicable Spread" in the table below, in whole at any time or in part from time to time (in $1,000 increments, provided that any remaining
principal amount thereof shall be at least the
105
Table of Contents
minimum
authorized denomination thereof), at a redemption price equal to the greater of (the "
Applicable Non-Par Call Date Notes Premium
"):
(i) 100%
of the principal amount of the JCI plc Dollar Notes of the applicable series to be redeemed, and
(ii) as
determined by the Quotation Agent and delivered to the Trustee in writing, the sum of the present values of the remaining scheduled payments of principal and
interest thereon (exclusive of interest accrued to the redemption date), discounted to the redemption date (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Redemption
Treasury Rate plus the Applicable Spread set forth in the table below, plus, in either situation (i) or (ii), accrued and unpaid interest, if any, thereon to, but excluding, the redemption date
(subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).
Each
series of JCI plc Dollar Notes designated as "non-callable prior to maturity" under the caption "Applicable Spread" in the table below is not redeemable prior to maturity.
The
Par Call Date, Applicable Spread and minimum authorized denominations for each series of JCI plc Dollar Notes are as follows:
|
|
|
|
|
|
|
|
|
Series of JCI plc Dollar Notes
|
|
Par Call Date
|
|
Applicable Spread
|
|
Minimum
Authorized
Denominations
|
|
2.355% Senior Notes due 2017
|
|
non-par callable
|
|
20 basis points
|
|
$
|
2,000
|
|
1.400% Senior Notes due 2017
|
|
non-par callable
|
|
10 basis points
|
|
$
|
2,000
|
|
7.125% Notes due July 15, 2017
|
|
non-par callable
|
|
non-callable prior to maturity
|
|
$
|
2,000
|
|
5.000% Senior Notes due 2020
|
|
non-par callable
|
|
25 basis points
|
|
$
|
2,000
|
|
4.25% Senior Notes due 2021
|
|
non-par callable
|
|
15 basis points
|
|
$
|
2,000
|
|
3.750% Senior Notes due 2021
|
|
September 1, 2021 (three months prior to the maturity date)
|
|
25 basis points
|
|
$
|
2,000
|
|
3.625% Senior Notes due 2024
|
|
April 2, 2024 (three months prior to the maturity date)
|
|
15 basis points
|
|
$
|
2,000
|
|
6.000% Notes due 2036
|
|
non-par callable
|
|
25 basis points
|
|
$
|
2,000
|
|
5.70% Senior Notes due 2041
|
|
non-par callable
|
|
20 basis points
|
|
$
|
2,000
|
|
5.250% Senior Notes due 2041
|
|
June 1, 2041 (six months prior to the maturity date)
|
|
35 basis points
|
|
$
|
2,000
|
|
4.625% Senior Notes due 2044
|
|
January 2, 2044 (six months prior to the maturity date)
|
|
20 basis points
|
|
$
|
2,000
|
|
6.950% Debentures due 2045
|
|
non-par callable
|
|
non-callable prior to maturity
|
|
$
|
2,000
|
|
4.950% Senior Notes due 2064
|
|
January 2, 2064 (six months prior to the maturity date)
|
|
25 basis points
|
|
$
|
2,000
|
|
3.750% Notes due 2018
|
|
non-par callable
|
|
15 basis points
|
|
$
|
2,000
|
|
4.625% Notes due 2023
|
|
October 15, 2022 (three months prior to the maturity date)
|
|
20 basis points
|
|
$
|
2,000
|
|
3.900% Notes due 2026
|
|
November 14, 2025 (three months prior to the maturity date)
|
|
30 basis points
|
|
$
|
2,000
|
|
5.125% Notes due 2045
|
|
March 14, 2045 (six months prior to the maturity date)
|
|
35 basis points
|
|
$
|
2,000
|
|
106
Table of Contents
"
Adjusted Redemption Treasury Rate
," with respect to any redemption date for the JCI plc Dollar Notes of any series, means the rate
equal to the semiannual equivalent yield to maturity or interpolated (on a 30/360 day count basis) yield to maturity of the Comparable Redemption Treasury Issue, assuming a price for the
Comparable Redemption Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Redemption Treasury Price for such redemption date.
"
Comparable Redemption Treasury Issue
" means the United States Treasury security selected by the Quotation Agent as having a maturity
comparable to the remaining term of the JCI plc Dollar Notes to be redeemed that would be utilized at the time of selection and in accordance with customary financial practice in pricing new
issues of corporate debt securities of comparable maturity to the remaining term of such JCI plc Dollar Notes.
"
Comparable Redemption Treasury Price
," with respect to any redemption date for the JCI plc Dollar Notes of any series, means
(i) the average of the Redemption Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Redemption Reference Treasury Dealer Quotations
(unless there is more than one highest or lowest quotation, in which case only one such highest and/or lowest quotation shall be excluded), or (ii) if the Quotation Agent obtains fewer than
four such Redemption Reference Treasury Dealer Quotations, the average of all such Redemption Reference Treasury Dealer Quotations.
"
Independent Investment Banker
" means one of the Redemption Reference Treasury Dealers appointed by us.
"
Quotation Agent
" means a Redemption Reference Treasury Dealer appointed as such agent by JCI plc.
"
Redemption Reference Treasury Dealer
" means (1) each of Citigroup Global Markets Inc. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated (or their respective Affiliates that are Primary Treasury Dealers (as defined below)) and their respective successors and (2) two other Primary Treasury
Dealers selected by JCI plc after consultation with the Independent Investment Banker; provided, however, that if any of the foregoing shall cease to be a primary U.S. government securities
dealer in New York City (a "
Primary Treasury Dealer
"), JCI plc will substitute therefor another Primary Treasury Dealer.
"
Redemption Reference Treasury Dealer Quotations
," with respect to each Redemption Reference Treasury Dealer and any redemption date for
the JCI plc Dollar Notes of any series, means the average, as determined by the Quotation Agent, of the bid and offer prices at 11:00 a.m., New York City time, for the Comparable
Redemption Treasury Issue (expressed in each case as a percentage of its principal amount) for settlement on the redemption date quoted in writing to the Quotation Agent by such Redemption Reference
Treasury Dealer on the third business day preceding such redemption date.
JCI plc Euro Notes
Prior to November 25, 2024 (three months prior to the maturity date), JCI plc may, at its option, redeem the JCI plc Euro
Notes, in whole at any time or in part from time to time (in €1,000 increments, provided that any remaining principal amount thereof shall be at least the minimum authorized
denomination of €100,000), at a redemption price equal to the greater of (the "
Applicable Euro Notes Premium
") (i) 100% of the
principal amount of the JCI plc Euro Notes to be redeemed and (ii) the sum of the present values of the Remaining Scheduled Payments (as defined below) discounted to the redemption date,
on an annual basis (ACTUAL/ACTUAL (ICMA)), at a rate equal to the Treasury Rate (as defined below) plus 20 basis points plus, in either case, accrued and unpaid interest, if any, thereon to, but
excluding, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).
107
Table of Contents
On or after November 25, 2024 (three months prior to their maturity date), JCI plc may, at its option, redeem the JCI plc Euro Notes, in
whole at any time or in part from time to time (in €1,000 increments, provided that any remaining principal amount thereof shall be at least the minimum authorized denomination of
€100,000), at a redemption price equal to 100% of the principal amount of the JCI plc Euro Notes to be redeemed, plus accrued and unpaid interest, if any, thereon to, but
excluding, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).
"
Treasury Rate
" means the rate per annum (which, if less than zero, shall be deemed to be zero) equal to the annual equivalent yield to
maturity of the Reference Bond (as defined below), assuming a price for the Reference Bond (expressed as a percentage of its principal amount) equal to the middle market price of the Reference Bond
prevailing at 11:00 a.m. (London time) on the third business day preceding such redemption date as determined by us or an independent investment bank appointed by us.
"
Reference Bond
" means, in relation to any Treasury Rate calculation, a German government bond whose maturity is closest to the maturity
of the JCI plc Euro Notes, or if we or an independent investment bank appointed by us considers that such similar bond is not in issue, such other German
government bond as we or an independent investment bank appointed by us, with the advice of three brokers of, and/or market makers in, German government bonds selected by us or an independent
investment bank appointed by us, determine to be appropriate for determining the Treasury Rate.
"
Remaining Scheduled Payments
" means, with respect to each JCI plc Euro Note to be redeemed, the remaining scheduled payments of
principal of and interest on the relevant JCI plc Euro Note that would be due after the related redemption date but for the redemption. If that redemption date is not an interest payment date
with respect to a JCI plc Euro Note, the amount of the next succeeding scheduled interest payment on the relevant JCI plc Euro Note will be reduced by the amount of interest accrued on
the JCI plc Euro Note to the redemption date.
Redemption Upon Changes in Withholding Taxes
JCI plc may redeem all, but not less than all, of the JCI plc Notes of any series under the following
conditions:
-
-
if there is an amendment to, or change in, the laws or regulations of a Relevant Taxing Jurisdiction (as defined below) or any change in the
application or official interpretation of such laws, including any action taken by, or a change in published administrative practice of, a taxing authority or a holding by a court of competent
jurisdiction, regardless of whether such action, change or holding is with respect to JCI plc, which amendment or change is announced on or after the Settlement Date (or, in the case of any
Relevant Taxing Jurisdiction that becomes a Relevant Taxing Jurisdiction after the Settlement Date, after such later date);
-
-
as a result of such amendment or change, JCI plc becomes, or there is a material probability that JCI plc will become, obligated
to pay Additional Amounts (as defined below), on the next payment date with respect to the JCI plc Notes of such series;
-
-
JCI plc delivers to the Trustee a written opinion of independent tax counsel to JCI plc of recognized standing to the effect that
JCI plc has, or there is a material probability that it will become obligated, to pay Additional Amounts as a result of a change, amendment, official interpretation or application described
above; and
-
-
following the delivery of the opinion described in the previous bullet point, JCI plc provides notice of redemption not less than
30 days, but not more than 90 days, prior to the redemption date. The notice of redemption cannot be given more than 90 days before the earliest date on
108
Table of Contents
Upon
the occurrence of each of the bullet points above, JCI plc may redeem the JCI plc Notes of such series at a redemption price equal to 100% of the principal amount
thereof, together with accrued and unpaid interest, if any, thereon to, but excluding, the redemption date (subject to the right of holders of record on the relevant record date to receive interest
due on the relevant interest payment date).
The
foregoing provisions shall apply
mutatis mutandis
to any Successor Person (as defined below) to JCI plc.
Notice of Redemption
Notice of any redemption will be mailed, or delivered electronically if the JCI plc Notes are held by any depositary, at least
30 days but not more than 90 days before the date fixed for such redemption to each holder of JCI plc Notes of a series to be redeemed. If less than all the JCI plc Notes
of such series are to be redeemed, the Trustee will select the outstanding JCI plc Notes of such
series to be redeemed in accordance with a method that complies with the requirements, if any, of any stock exchange on which such JCI plc Notes are listed, and the applicable procedures of the
depositary, if the JCI plc Notes of such series are held by any depositary; provided, however, that with respect to any JCI plc Notes not listed on any stock exchange and/or held by a
depositary, the Trustee will select such JCI plc Notes by lot or by such other method that the Trustee considers fair and appropriate.
Interest
on such JCI plc Notes or portions of JCI plc Notes will cease to accrue on and after the date fixed for redemption, unless JCI plc defaults in the payment
of such redemption price and accrued interest (if any) with respect to any such JCI plc Note or portion thereof.
If
any redemption date of any JCI plc Note is not a business day, then payment of principal and interest may be made on the next succeeding business day with the same force and
effect as if made on the nominal redemption date and no interest will accrue for the period after such nominal date.
Payment of Additional Amounts
All payments in respect of the JCI plc Notes will be made by JCI plc free and clear of, and without withholding or deduction for
or on account of, any present or future taxes, duties, levies, imposts, assessments or governmental charges of whatever nature ("
Taxes
") unless the
withholding or deduction of such Taxes is required by law.
In
the event that JCI plc is required to withhold or deduct any amount for or on account of any Taxes imposed or levied by or on behalf of Ireland or any other jurisdiction (other
than the United States of America) in which JCI plc is organized, resident or doing business for tax purposes or from or through which payments by or on behalf of JCI plc are made, or
any political subdivision or any authority thereof or therein (each, but not including the United States of America or any political subdivision or any authority thereof or therein, a
"
Relevant Taxing Jurisdiction
") from any payment made under or with respect to any JCI plc Note, JCI plc will pay such additional amounts
("
Additional Amounts
") so that the net amount received by each holder of JCI plc Notes (including Additional Amounts) after such withholding or
deduction will equal the amount that such holder would have received if such Taxes had not been required to be withheld or deducted.
Additional
Amounts will not be payable with respect to a payment made to a holder of JCI plc Notes or a holder of beneficial interests in Global Securities where such holder is
subject to taxation on
109
Table of Contents
such
payment by the Relevant Taxing Jurisdiction for any reason other than such Person's mere ownership of the JCI plc Notes or beneficial interests or for or on account
of:
-
-
any Taxes that are imposed or withheld solely because such holder or a fiduciary, settlor, beneficiary, or member of such holder if such holder
is an estate, trust, partnership, limited liability company or other fiscally transparent entity, or a Person holding a power over an estate or trust administered by a fiduciary
holder:
-
-
is or was present or engaged in, or is or was treated as present or engaged in, a trade or business in the Relevant Taxing
Jurisdiction or has or had a permanent establishment in the Relevant Taxing Jurisdiction;
-
-
has or had any present or former connection (other than the mere fact of ownership of such JCI plc Notes) with the Relevant
Taxing Jurisdiction, including being or having been a national citizen or resident thereof, being treated as being or having been a resident thereof or being or having been physically present therein;
-
-
any estate, inheritance, gift, transfer, excise, personal property or similar Taxes imposed with respect to the JCI plc Notes;
-
-
any Taxes imposed solely as a result of the presentation of such JCI plc Notes, where presentation is required, for payment on a date
more than 30 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever is later, except to the extent that the
beneficiary or holder thereof would have been entitled to the payment of Additional Amounts had such JCI plc Notes been presented for payment on any date during such 30-day period;
-
-
any Taxes imposed or withheld solely as a result of the failure of such holder or any other Person to comply with applicable certification,
information, documentation or other reporting requirements concerning the nationality, residence, identity or connection with the Relevant Taxing Jurisdiction, if such compliance is required by
statute or regulation of the Relevant Taxing Jurisdiction as a precondition to relief or exemption from such Taxes;
-
-
any Taxes that are payable by any method other than withholding or deduction by JCI plc or any paying agent from payments in respect of
such JCI plc Notes;
-
-
any Taxes required to be withheld by any paying agent from any payment in respect of any JCI plc Notes if such payment can be made
without such withholding by at least one other paying agent;
-
-
any withholding or deduction for Taxes which would not have been imposed if the relevant JCI plc Notes had been presented to another
paying agent in a Member State of the European Union;
-
-
any withholding or deduction required pursuant to sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (or
any amended or successor provisions), any regulations, rules, practices or agreements entered into pursuant thereto, official interpretations thereof or any law implementing an intergovernmental
approach thereto; or
-
-
any combination of the above conditions.
Additional
Amounts also will not be payable to any holder of JCI plc Notes or the holder of a beneficial interest in a global JCI plc Note that is a fiduciary, partnership,
limited liability company or other fiscally transparent entity, or to such holder that is not the sole holder of such JCI plc Note or holder of such beneficial interests in such JCI plc
Note, as the case may be. This exception, however,
will apply only to the extent that a beneficiary or settlor with respect to the fiduciary, or a beneficial owner or member of the partnership, limited liability company or other fiscally transparent
entity,
110
Table of Contents
would
not have been entitled to the payment of an Additional Amount had the beneficiary, settlor, beneficial owner or member received directly its beneficial or distributive share of the payment.
JCI plc
also:
-
-
will make such withholding or deduction of Taxes;
-
-
will remit the full amount of Taxes so deducted or withheld to the relevant tax authority in accordance with all applicable laws;
-
-
will use its commercially reasonable efforts to obtain from each relevant tax authority imposing such Taxes certified copies of tax receipts
evidencing the payment of any Taxes so deducted or withheld; and
-
-
upon request, will make available to the holders of the JCI plc Notes, within 90 days after the date the payment of any Taxes
deducted or withheld is due pursuant to applicable law, certified copies of tax receipts evidencing such payment by JCI plc (unless, notwithstanding JCI plc's efforts to obtain such
receipts, the same are not obtainable).
At
least 30 days prior to each date on which any payment under or with respect to the JCI plc Notes of a series is due and payable, if JCI plc will be obligated to
pay Additional Amounts with respect to such
payment, JCI plc will deliver to the Trustee an Officer's Certificate stating the fact that such Additional Amounts will be payable, the amounts so payable and such other information as is
necessary to enable the Trustee to pay such Additional Amounts to holders of such JCI plc Notes on the payment date.
In
addition, JCI plc will pay any stamp, issue, registration, documentary or other similar taxes and duties, including interest, penalties and Additional Amounts with respect
thereto, payable in a Relevant Taxing Jurisdiction in respect of the creation, issue, offering, enforcement, redemption or retirement of the JCI plc Notes.
The
foregoing provisions shall survive any termination or the discharge of the JCI plc Indenture and shall apply
mutatis mutandis
to any Successor Person to JCI plc.
Whenever
in the JCI plc Indenture, any JCI plc Notes, or in this "
Description of JCI plc Notes
" there is mentioned,
in any context, the payment of principal, premium, if any, redemption price, repurchase price, interest or any other amount payable under or with respect to any JCI plc Notes, such mention
shall be deemed to include the payment of Additional Amounts to the extent payable in the particular context.
Offer to Repurchase Upon Change of Control Triggering Event
Upon the occurrence of a Change of Control Triggering Event with respect to a series of JCI plc Notes (other than the 6.000% Notes due
2036, the 7.125% Notes Due July 15, 2017 and the 6.950% Debentures due December 1, 2045), unless we have exercised our right to redeem the JCI plc Notes of such series by giving
irrevocable notice on or prior to the 30th day after the Change of Control Triggering Event in accordance with the JCI plc Indenture, each holder of JCI plc Notes of such series
will have the right to require us to purchase all or a portion of such holder's JCI plc Notes of such series pursuant to the offer described below (the "
Change of
Control Offer
"), at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, thereon to, but excluding, the date of purchase
(subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date) (the "
Change of Control
Payment
"). If the Change of Control Payment Date (as defined below) falls on a day that is not a business day, the related payment of the Change of Control Payment will be made
on the next business day as if it were made on the date such payment was due, and no interest will accrue on the amounts so payable for the period from and after such date to the next business day.
111
Table of Contents
Within 30 days following the date upon which the Change of Control Triggering Event occurs or, at our option, prior to any Change of Control but after the
public announcement of the pending Change of Control, we will be required to send, by first class mail, or deliver electronically if the applicable JCI plc Notes are held by any depositary, a
notice to each holder of JCI plc Notes of the applicable series, with a copy to the Trustee, which notice will govern the terms of the Change of Control Offer. Such notice will state, among
other things, the purchase date, which must be no earlier than 30 days nor later than 60 days from the date such notice is mailed or delivered electronically (or, in the case of a notice
mailed or delivered electronically prior to the date of consummation of a Change of Control, no earlier than 30 days nor later than 60 days from the date of the Change of Control
Triggering Event), other than as may be required by law (the "
Change of Control Payment Date
"). The notice, if mailed or delivered electronically prior
to the date of consummation of the Change of Control, will state that the Change of Control Offer is conditioned on the Change of Control being consummated on or prior to the Change of Control Payment
Date.
On
the Change of Control Payment Date, we will, to the extent lawful:
-
-
accept or cause a third party to accept for payment all JCI plc Notes of the applicable series properly tendered pursuant to the Change
of Control Offer;
-
-
deposit or cause a third party to deposit with the applicable paying agent an amount equal to the Change of Control Payment in respect of all
JCI plc Notes of the applicable series properly tendered; and
-
-
deliver or cause to be delivered to the Trustee the JCI plc Notes of the applicable series properly accepted together with an Officer's
Certificate stating the aggregate principal amount of JCI plc Notes of each series being repurchased.
We
will not be required to make a Change of Control Offer with respect to the JCI plc Notes of the applicable series if a third party makes such an offer in the manner, at the
times and otherwise in compliance with the requirements for such an offer made by us and such third party purchases all the JCI plc Notes of the applicable series properly tendered and not
withdrawn under its offer. In addition, we will not repurchase any JCI plc Notes of the applicable series if there has occurred and is continuing on the Change of Control Payment Date an Event
of Default under the JCI plc Indenture, other than a Default in the payment of the Change of Control Payment on the Change of Control Payment Date.
We
must comply in all material respects with the requirements of Rule 14e-1 under the Exchange Act, and any other securities laws and regulations thereunder to the extent those
laws and regulations are applicable in connection with the repurchase of the JCI plc Notes of the applicable series as a result of a Change of Control Triggering Event. To the extent that the
provisions of any such securities laws or regulations conflict with the Change of Control Offer provisions of the JCI plc Notes of the applicable series, we will be required to comply with
those securities laws and regulations and will not be deemed to have breached our obligations under the Change of Control Offer provisions of the JCI plc Notes of such series by virtue of any
such conflict.
The
definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of "all or substantially all" of the
properties or assets of JCI plc and its subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise, established
definition of the phrase under applicable law. Accordingly, the applicability of the requirement that we offer to repurchase the JCI plc Notes as a result of a sale, lease, transfer, conveyance
or other disposition of less than all of the assets of JCI plc and its subsidiaries taken as a whole to another "person" or "group" (as those terms are used in Section 13(d)(3) of the
Exchange Act) may be uncertain.
112
Table of Contents
Other Provisions of the JCI plc Euro Notes
Claims against JCI plc for the payment of principal or Additional Amounts, if any, of the JCI plc Euro Notes will be prescribed
ten years after the applicable due date for payment thereof. Claims against JCI plc for the payment of interest, if any, of the JCI plc Euro Notes will be prescribed five years after the
applicable due date for payment of interest.
Certain Covenants
The JCI plc Indenture will contain the following covenants:
JCI plc will not, and will not permit any Restricted Subsidiary to, issue, incur, assume or guarantee any Indebtedness that is secured by
a lien upon any asset that at the time of such issuance, assumption or guarantee constitutes a Principal Property, or any shares of stock of or Indebtedness issued by any Restricted Subsidiary,
whether now owned or hereafter acquired, without effectively providing that, for so long as such lien shall continue in existence with respect to such secured Indebtedness, the JCI plc Notes
(together with, if JCI plc shall so determine, any other Indebtedness of JCI plc ranking equally with the JCI plc Notes, it being understood that for purposes hereof, Indebtedness
which is secured by a lien and Indebtedness which is not so secured shall not, solely by reason of such lien, be deemed to be of different ranking) shall be equally and ratably secured by a lien
ranking ratably with or equal to (or at JCI plc's option prior to) such secured Indebtedness; provided, however, that the foregoing covenant shall not apply
to:
-
-
liens existing on the date the JCI plc Notes of the applicable series are first issued;
-
-
liens on the stock, assets or Indebtedness of a Person existing at the time such Person becomes a Restricted Subsidiary, unless created in
contemplation of such Person becoming a Restricted Subsidiary;
-
-
liens on any assets or Indebtedness of a Person existing at the time such Person is merged with or into or consolidated with or acquired by
JCI plc or a Restricted Subsidiary or at the time of a purchase, lease or other acquisition of the assets of a corporation or firm as an entirety or substantially as an entirety by
JCI plc or any Restricted Subsidiary; provided, however, that no such lien shall extend to any other Principal Property of JCI plc or such Restricted Subsidiary prior to such acquisition
or to any other Principal Property thereafter acquired other than additions to such acquired property;
-
-
liens on any Principal Property existing at the time of acquisition thereof by JCI plc or any Restricted Subsidiary, or liens to secure
the payment of the purchase price of such Principal Property by JCI plc or any Restricted Subsidiary, or to secure any Indebtedness incurred, assumed or guaranteed by JCI plc or a
Restricted Subsidiary for the purpose of financing all or any part of the purchase price of such Principal Property or improvements or construction thereon, which Indebtedness is incurred, assumed or
guaranteed prior to, at the time of or within one year after such acquisition, or in the case of real property, completion of such improvement or construction or commencement of full operation of such
property, whichever is later; provided, however, that in the case of any such acquisition, construction or improvement, the lien shall not apply to any other Principal Property, other than the
Principal Property so acquired, constructed or improved, and accessions thereto and improvements and replacements thereof and the proceeds of the foregoing;
-
-
liens securing Indebtedness owing by any Restricted Subsidiary to JCI plc or a subsidiary thereof;
113
Table of Contents
-
-
liens in favor of the United States of America or any State thereof, or any department, agency or instrumentality or political subdivision of
the United States of America or any State thereof, or in favor of any other country or any political subdivision thereof, to secure partial, progress, advance or other payments pursuant to any
contract, statute, rule or regulation or to secure any Indebtedness incurred or guaranteed for the purpose of financing all or any part of the purchase price, or, in the case of real property, the
cost of construction or improvement, of the Principal Property subject to such liens, including liens incurred in connection with pollution control, industrial revenue or similar financings;
-
-
pledges, liens or deposits under workers' compensation or similar legislation, and liens thereunder that are not currently dischargeable, or in
connection with bids, tenders, contracts, other than for the payment of money, or leases to which JCI plc or any Restricted Subsidiary is a party, or to secure the public or statutory
obligations of JCI plc or any Restricted Subsidiary, or in connection with obtaining or maintaining self-insurance, or to obtain the benefits of any law, regulation or arrangement pertaining to
unemployment insurance, old age pensions, social security or similar matters, or to secure surety, performance, appeal or customs bonds to which JCI plc or any Restricted Subsidiary is a party,
or in litigation or other proceedings in connection with the matters heretofore referred to in this clause, such as interpleader proceedings, and other similar pledges, liens or deposits made or
incurred in the ordinary course of business;
-
-
liens created by or resulting from any litigation or other proceeding that is being contested in good faith by appropriate proceedings,
including liens arising out of judgments or awards against JCI plc or any Restricted Subsidiary with respect to which JCI plc or such Restricted Subsidiary in good faith is prosecuting
an appeal or proceedings for review or for which the time to make an appeal has not yet expired; or final unappealable judgment liens which are satisfied within 15 days of the date of judgment;
or liens incurred by JCI plc or any Restricted Subsidiary for the purpose of obtaining a stay or discharge in the course of any litigation or other proceeding to which JCI plc or such
Restricted Subsidiary is a party;
-
-
liens for taxes or assessments or governmental charges or levies not yet due or delinquent; or that can thereafter be paid without penalty, or
that are being contested in good faith by appropriate proceedings; landlord's liens on property held under lease; and any other liens or charges incidental to the conduct of the business of
JCI plc or any Restricted Subsidiary, or the ownership of their respective assets, that were not incurred in connection with the borrowing of money or the obtaining of advances or credit and
that, in the opinion of the Board of Directors of JCI plc, do not materially impair the use of such assets in the operation of the business of JCI plc or such Restricted Subsidiary or
the value of such Principal Property for the purposes of such business;
-
-
liens to secure JCI plc's or any Restricted Subsidiary's obligations under agreements with respect to spot, forward, future and option
transactions, entered into in the ordinary course of business;
-
-
liens not permitted by the foregoing clauses, inclusive, if at the time of, and after giving effect to, the creation or assumption of any such
lien, the aggregate amount of all outstanding Indebtedness of JCI plc and its Restricted Subsidiaries, without duplication, secured by all such liens not so permitted by the foregoing bullets,
inclusive, together with the Attributable Debt in respect of Sale and Lease-Back Transactions permitted by the first bullet under "
Limitation on Sale and Lease-Back
Transactions
" below, do not exceed the greater of $100,000,000 and 10% of Consolidated Net Worth; and
-
-
any extension, renewal or replacement (or successive extensions, renewals or replacements) in whole or in part, of any lien referred to in the
foregoing bullets inclusive; provided, however, that the principal amount of Indebtedness secured thereby unless otherwise excepted under the
114
Table of Contents
foregoing
bullets shall not exceed the principal amount of Indebtedness so secured at the time of such extension, renewal or replacement (plus any premium, fee, cost, expense or charge payable in
connection with any such extension, renewal or replacement), and that such extension, renewal or
replacement shall be limited to all or a part of the assets, or any replacements therefor, that secured the lien so extended, renewed or replaced, plus improvements and construction on such assets.
Limitation on Sale and Lease-Back Transactions
JCI plc will not, and will not permit any Restricted Subsidiary to, enter into any Sale and Lease-Back Transaction
unless:
-
-
JCI plc or such Restricted Subsidiary, at the time of entering into a Sale and Lease-Back Transaction, would be entitled to incur
Indebtedness secured by a lien on the Principal Property to be leased in an amount at least equal to the Attributable Debt in respect of such Sale and Lease-Back Transaction, without equally and
ratably securing the JCI plc Notes of the applicable series pursuant to the covenant described under "
Limitations on Liens
" above; or
-
-
the direct or indirect proceeds of the sale of the Principal Property to be leased are at least equal to the fair value of such Principal
Property, as determined by JCI plc's Board of Directors in good faith, and an amount equal to the net proceeds from the sale of the assets so leased is applied, within 180 days of the
effective date of any such Sale and Lease-Back Transaction, to the purchase or acquisition (or, in the case of real property, commencement of the construction) of assets or to the retirement (other
than at maturity or pursuant to a mandatory sinking fund or mandatory redemption or prepayment provision) of the JCI plc Notes or of Funded Indebtedness ranking on a parity with or senior to
the JCI plc Notes; provided that there shall be credited to the amount of net proceeds required to be applied pursuant to this provision an amount equal to the sum of (i) the principal
amount of the JCI plc Notes delivered within 180 days of the effective date of such Sale and Lease-Back Transaction to the Trustee for retirement and cancellation and (ii) the
principal amount of other Funded Indebtedness voluntarily retired by JCI plc within such 180-day period, excluding retirements of the JCI plc Notes and other Funded Indebtedness at
maturity or pursuant to mandatory sinking fund or mandatory redemption or prepayment provisions.
Merger and Consolidation
JCI plc will not, directly or indirectly, consolidate with or merge with or into, or convey, transfer or lease all or substantially all
its assets in one or a series of related transactions to, any Person, unless:
(1) the
resulting, surviving or transferee Person (the "
Successor Person
") will be a corporation, limited liability company,
public limited company, limited partnership or other entity organized and existing under the laws of (u) the United States of America, any State thereof or the District of Columbia,
(v) Ireland, (w) England and Wales, (x) Jersey, (y) any member state of the European Union as in effect on the date the JCI plc Notes of the applicable series are
first issued or (z) Switzerland; provided that the Successor Person (if not JCI plc) will expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, all the obligations of JCI plc under the JCI plc Notes of the applicable series and the JCI plc Indenture;
(2) immediately
after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Person or any Restricted Subsidiary as a
result of such transaction as having been incurred by the Successor Person or such Restricted Subsidiary at the time of such transaction), no Default shall have occurred and be continuing; and
115
Table of Contents
(3) JCI plc
shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel under the JCI plc Indenture, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any) comply with the JCI plc Indenture.
Notwithstanding
the foregoing, (A) any conveyance, transfer or lease of assets between or among JCI plc and its subsidiaries shall not be prohibited under the
JCI plc Indenture and (B) JCI plc may, directly or indirectly, consolidate with or merge with or into an Affiliate incorporated solely for the purpose of reincorporating
JCI plc in another jurisdiction within the United States of America, any State thereof or the District of Columbia, Ireland, England and Wales, Jersey, any member state of the European Union as
in effect on the date the JCI plc Notes of the applicable series are first issued or Switzerland to realize tax or other benefits.
The
Successor Person will succeed to, and be substituted for, and may exercise every right and power of, JCI plc under the JCI plc Indenture, and the predecessor issuer,
other than in the case of a lease, will be automatically released from all obligations under the JCI plc Notes and the JCI plc Indenture, including, without limitation, the obligation to
pay the principal of and interest on the JCI plc Notes of the applicable series.
Reports by JCI plc
So long as any JCI plc Notes are outstanding, JCI plc shall file with the Trustee, within 15 days after JCI plc is
required to file with the SEC, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may from time to time by
rules and regulations prescribe) that JCI plc may be required to file with the SEC pursuant to Section 13 or Section 15(d) of the Exchange Act. JCI plc shall be deemed to
have complied with the previous sentence to the extent that such information, documents and reports are filed with the SEC via EDGAR, or any successor electronic delivery procedure; provided, however,
that the Trustee shall have no obligation whatsoever to determine whether or not such information, documents or reports have been filed pursuant to the EDGAR system (or its successor). Delivery of
such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including JCI plc's compliance with any of its covenants under the JCI plc Indenture (as to which the Trustee is entitled to
rely exclusively on Officer's Certificates).
JCI plc
will furnish to the Trustee on or before 120 days after the end of each fiscal year an Officer's Certificate stating that in the course of the performance by the
signers of their duties as Officers of JCI plc, they would normally have knowledge of any Default by JCI plc in the performance or fulfillment or observance of any covenants or
agreements contained in the JCI plc Indenture during the preceding fiscal year, stating whether or not they have knowledge of any such Default and, if so, specifying each such Default of which
the signers have knowledge and the nature thereof.
Listing
We intend to apply to list the JCI plc Notes on the New York Stock Exchange. The listing application will be subject to approval by the
New York Stock Exchange. If such a listing is obtained, we will have no obligation to maintain such listing, and we may delist the JCI plc Notes at any time.
Events of Default
As to any series of JCI plc Notes, an "
Event of Default
" means any one of the following
events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be
116
Table of Contents
effected
by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):
(1) failure
to pay any interest on the JCI plc Notes of that series when due, which failure continues for 30 days;
(2) failure
to pay principal or premium, if any, with respect to the JCI plc Notes of that series when due;
(3) failure
on the part of JCI plc to observe or perform any other covenant, warranty or agreement in the JCI plc Notes of that series, or in the
JCI plc Indenture as it relates to the JCI plc Notes of that series, other than a covenant, warranty or agreement, a Default in whose performance or whose breach is specifically dealt
with elsewhere in the section of the JCI plc Indenture governing Events of Default, if the failure continues for 90 days after written notice by the Trustee or the holders of at least
25% in aggregate principal amount of the JCI plc Notes of that series then outstanding;
(4) an
Event of Default with respect to any other series of debt securities issued under the JCI plc Indenture or an uncured or unwaived failure to pay principal of
or interest on any of our other obligations for borrowed money beyond any period of grace with respect thereto if, in either case, (a) the aggregate principal amount thereof is in excess of
$200,000,000; and (b) the default in payment is not being contested by us in good faith and by appropriate proceedings; and
(5) specified
events of bankruptcy, insolvency, receivership or reorganization.
However,
the Event of Default in clause (4) above is subject to the following:
-
-
if such Event of Default with respect to such other series of debt securities issued under the JCI plc Indenture or such default in payment
with respect to such other obligations for borrowed money shall be remedied or cured by JCI plc or waived by the requisite holders of such other series of debt securities or such other
obligations for borrowed money, then the Event of Default under the JCI plc Indenture by reason thereof shall be deemed likewise to have been thereupon remedied, cured or waived without further
action upon the part of either the Trustee or any of the holders of JCI plc Notes; and
-
-
subject to certain duties, responsibilities and rights of the Trustee under the JCI plc Indenture, the Trustee shall not be charged with
knowledge of any such Event of Default with respect to such other series of debt securities issued under the JCI plc Indenture or such payment default with respect to such other obligations for
borrowed money unless written notice thereof shall have been given to a Trust Officer of the Trustee by JCI plc, by the holder or an agent of the holder of such other obligations for borrowed
money, by the trustee then acting under any indenture or other instrument under which such payment default with respect to such other obligations for borrowed money shall have occurred, or by the
holders of not less than 25% in aggregate principal amount of outstanding debt securities of such other series.
Notice and Declaration of Defaults
The JCI plc Indenture provides that the Trustee will, within the later of 90 days after the occurrence of a Default with respect
to any series for which there are JCI plc Notes outstanding which is continuing and which is known to a Trust Officer of the Trustee, or 60 days after such Default is actually known to
such Trust Officer of the Trustee or written notice of such Default is received by the Trustee, give to the holders of such JCI plc Notes notice, by mail as the names and addresses of such
holders appear on the security register, or electronically if such JCI plc Notes are held by any depositary, of all uncured Defaults known to it, including events specified above without grace
periods, unless such Defaults shall have been cured before the giving of such notice; provided, that except in
117
Table of Contents
the
case of Default in the payment of the principal of, premium, if any, or interest on any of the JCI plc Notes of any series, or in the payment of any sinking fund installment with respect to
the JCI plc Notes of any series, the Trustee shall be protected in withholding such notice to the holders if the Trustee in good faith determines that withholding of such notice is in the
interests of the holders of the JCI plc Notes of such series.
The
Trustee or the holders of not less than 25% in aggregate principal amount of the outstanding JCI plc Notes of any series may declare the JCI plc Notes of that series
immediately due and payable upon the occurrence of any Event of Default. The holders of a majority in principal amount of the outstanding JCI plc Notes of all series affected by such waiver
(voting as one class), on behalf of the holders of all of the JCI plc Notes of all such series, may waive any existing Default and its consequences, except a Default in the payment of
principal, premium, if any, or interest, including sinking fund payments (provided, however, that only holders of a majority in principal amount of the JCI plc Notes of an applicable series may
rescind an acceleration with respect to such series and its consequences, including any related payment Default that resulted from such acceleration).
Actions upon Default
In case an Event of Default with respect to any series of JCI plc Notes occurs and is continuing, the JCI plc Indenture provides
that the Trustee will be under no obligation to exercise any of its rights or powers under the JCI plc Indenture at the request, order or direction of any of the holders of JCI plc Notes
outstanding of any series unless the applicable holders have offered to the Trustee reasonable security and indemnity, satisfactory to the Trustee in its sole discretion, against any loss, liability
or expense which may be incurred thereby. The right of a holder to institute a proceeding with respect to the JCI plc Notes of the applicable series is subject to conditions precedent including
notice and indemnity to the Trustee, but the holder has an absolute and unconditional right to receipt of principal, premium, if any, and interest on their due dates or to institute suit for the
enforcement thereof.
The
holders of a majority in aggregate principal amount of the JCI plc Notes outstanding of the series in Default will have the right to direct the time, method and place for
conducting any proceeding for any remedy available to the Trustee or exercising any power or trust conferred on the Trustee, in each case with respect to such series. Any direction by such holders
will be in accordance with law and the provisions of the JCI plc Indenture. Subject to certain provisions of the JCI plc Indenture, the Trustee shall have the right to decline to follow
any such direction if the Trustee in good faith, by a Trust Officer or Trust Officers of the Trustee, shall determine that the action or proceeding so directed may not be lawfully taken, would involve
the Trustee in personal liability, would be materially or unjustly prejudicial to the rights of holders of JCI plc Notes of such series not joining in such direction or would
be unduly prejudicial to the interests of the holders of JCI plc Notes and other debt securities issued under the JCI plc Indenture of all series not joining in the giving of such
direction. The Trustee will be under no obligation to act in accordance with any such direction unless the applicable holders offer the Trustee reasonable security and indemnity, satisfactory to the
Trustee in its sole discretion, against costs, expenses and liabilities which may be incurred thereby.
Modification of the JCI plc Indenture
JCI plc and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental to the JCI plc
Indenture, which shall conform to the provisions of the Trust Indenture Act as then in effect, without the consent of the holders of any series of JCI plc Notes for one or more of the following
purposes:
-
-
to cure any ambiguity, defect or inconsistency in the JCI plc Indenture or JCI plc Notes of any series, including making any such
changes as are required for the JCI plc Indenture to comply with the Trust Indenture Act;
118
Table of Contents
-
-
to add an additional obligor on the JCI plc Notes or to add a guarantor of any outstanding series of JCI plc Notes, or to
evidence the succession of another Person to JCI plc or any additional obligor or guarantor of the JCI plc Notes, or successive successions, and the assumption by the Successor Person of
the covenants, agreements and obligations of JCI plc or such obligor or guarantor, as the case may be, pursuant to provisions in the JCI plc Indenture concerning consolidation, merger,
the sale of assets or successor entities;
-
-
to provide for uncertificated JCI plc Notes in addition to or in place of certificated JCI plc Notes;
-
-
to add to the covenants of JCI plc for the benefit of the holders of any outstanding series of JCI plc Notes or to surrender any
of JCI plc's rights or powers under the JCI plc Indenture;
-
-
to add any additional Events of Default for the benefit of the holders of any outstanding series of JCI plc Notes;
-
-
to change or eliminate any of the provisions of the JCI plc Indenture, provided that any such change or elimination shall not become
effective with respect to any outstanding JCI plc Note of any series created prior to the execution of such supplemental indenture which is entitled to the benefit of such provision;
-
-
to secure the JCI plc Notes of any series;
-
-
to make any other change that does not adversely affect the rights of any holder of outstanding JCI plc Notes in any material respect;
-
-
to provide for the issuance of and establish the form and terms and conditions of a series of debt securities, to provide which, if any, of the
covenants of JCI plc shall apply to such series, to provide which of the Events of Default shall apply to such series, to name one or more guarantors and provide for guarantees of such series,
to provide for the terms and conditions upon which the guarantee by any guarantor of such series may be released or terminated, or to define the rights of the holders of such series of debt
securities;
-
-
to issue additional JCI plc Notes of any series to the extent permitted by the JCI plc Indenture; provided that such additional
JCI plc Notes have the same terms as, and be deemed part of the same series as, the applicable series of JCI plc Notes to the extent required under the JCI plc Indenture; or
-
-
to evidence and provide for the acceptance of appointment under the JCI plc Indenture by a successor Trustee with respect to the
JCI plc Notes of one or more series and to add to or change any of the provisions of the JCI plc Indenture as shall be necessary to provide for or facilitate the administration of the
trust thereunder by more than one Trustee.
In
addition, under the JCI plc Indenture, with the consent (evidenced as provided in the JCI plc Indenture) of the holders of not less than a majority in aggregate
principal amount of the outstanding JCI plc Notes of all series affected by such supplemental indenture or indentures (voting as one class), JCI plc and the Trustee from time to time and
at any time may enter into an indenture or indentures supplemental to the JCI plc Indenture for the purpose of adding any provisions to or changing in any manner or eliminating any of the
provisions of the JCI plc Indenture or of any supplemental indenture thereto or of modifying in any manner not covered by the immediately preceding paragraph the rights of the holders of the
JCI plc Notes of each such series under the JCI plc Indenture. However, the following changes may only be made with the consent of each holder of outstanding JCI plc Notes
affected:
-
-
extend a fixed maturity of or any installment of principal of any JCI plc Notes of any series or reduce the principal amount thereof or
reduce the amount of principal of any original issue
119
Table of Contents
A
supplemental indenture that changes or eliminates any covenant, Event of Default or other provision of the JCI plc Indenture that has been expressly included solely for the
benefit of one or more particular series of JCI plc Notes, if any, or which modifies the rights of the holders of JCI plc Notes of such series with respect to such covenant, Event of
Default or other provision, shall be deemed not to affect the rights under the JCI plc Indenture of the holders of securities of any other series.
Notwithstanding
anything herein or otherwise, the provisions under the JCI plc Indenture relative to JCI plc's obligation to make any offer to repurchase the JCI plc
Notes of any series as a result of a Change of Control Triggering Event as described under the heading "
Offer to Repurchase Upon Change of Control Triggering
Event
" may be waived or modified with the written consent of the holders of a majority in principal amount of the outstanding JCI plc Notes of the applicable series or
multiple affected series.
It
will not be necessary for the consent of the holders of the JCI plc Notes of any series to approve the particular form of any proposed supplement, amendment or waiver, but it
shall be sufficient if such consent approves the substance thereof.
Information Concerning the Trustee
If an Event of Default with respect to the JCI plc Notes of a series has occurred and is continuing, the Trustee shall exercise with
respect to the JCI plc Notes of such series such of the rights and powers vested in it by the JCI plc Indenture, and use the same degree of care and skill in its exercise, as a prudent
Person would exercise or use under the circumstances in the conduct of such Person's own affairs. If an Event of Default has occurred and is continuing, the Trustee will be under no obligation to
exercise any of its rights or powers under the JCI plc Indenture at the request, order or direction of any holders of JCI plc Notes of the applicable series, unless such holders shall
have offered to the Trustee security and indemnity, satisfactory to it in its sole discretion, against any loss, liability or expense which may be incurred thereby, and then only to the extent
required by the terms of the JCI plc Indenture. No provision of the JCI plc Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in
the performance of any of its duties under the JCI plc Indenture or in the exercise of any of its rights or powers.
The
Trustee may resign with respect to the JCI plc Notes of a series at any time by giving a written notice to JCI plc. The holders of a majority in principal amount of the
outstanding JCI plc
120
Table of Contents
Notes
of a particular series may remove the Trustee with respect to such series of JCI plc Notes by notifying JCI plc and the Trustee in writing. JCI plc may remove the Trustee
if:
-
-
the Trustee has or acquires a "conflicting interest," within the meaning of Section 310(b) of the Trust Indenture Act, and fails to
comply with the provisions of Section 310(b) of the Trust Indenture Act, or otherwise fails to comply with the eligibility requirements provided in the JCI plc Indenture and fails to
resign after written request therefor by JCI plc in accordance with the JCI plc Indenture;
-
-
the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any bankruptcy law;
-
-
a custodian or public officer takes charge of the Trustee or its property; or
-
-
the Trustee becomes incapable of acting.
If
the Trustee resigns or is removed or if a vacancy exists in the office of Trustee with respect to the JCI plc Notes of any series for any reason, JCI plc shall promptly
appoint a successor Trustee with respect to the JCI plc Notes of such series.
A
resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of the appointment as provided in the
JCI plc Indenture.
The
Trustee and its Affiliates have engaged, currently are engaged, and may in the future engage in financial or other transactions with JCI plc and our Affiliates in the ordinary
course of their respective businesses.
Payment and Paying Agents
JCI plc will pay the principal of, premium, if any, and interest on the JCI plc Notes at any office of ours or any agency
designated by us.
The
Trustee will initially be appointed by JCI plc as paying agent with regard to the JCI plc Dollar Notes. The location of the corporate trust office of the Trustee for
payment on the JCI plc Dollar Notes
is U.S. Bank Global Corporate Trust Services, Attn: Payments, EP-MN-WS2N, 111 Fillmore Ave E, St. Paul, MN 55107-1402.
The
initial paying agent for the JCI plc Euro Notes will be Elavon Financial Services DAC, UK Branch. For so long as the JCI plc Euro Note are in global form (see
"Book-Entry, Delivery and Form"), payment of principal and interest on, and any other amount due in respect of, the JCI plc Euro Notes will be made by or to the order of the paying
agent on behalf of the common depositary or its nominee as the registered holder thereof. After payment by JCI plc or the paying agent of interest, principal or other amounts in respect of the
JCI plc Euro Notes to the common depositary (or its nominee), JCI plc will not have responsibility or liability for such amounts to Euroclear or Clearstream, or to holders or beneficial
owners of book-entry interests in the JCI plc Euro Notes.
In
addition JCI plc will maintain a transfer agent and a security registrar for the JCI plc Notes. The initial transfer agent and security registrar will be Elavon
Financial Services DAC.
The
security registrar as to any series of JCI plc Notes will maintain a register reflecting ownership of the JCI plc Notes of such series outstanding from time to time, if
any, and together with the applicable transfer agent, will make payments on and facilitate transfers of the JCI plc Notes of such series on behalf of JCI plc. No service charge will be
made for any registration of transfer or exchange of JCI plc Notes. However, we may require holders to pay any transfer taxes or other similar governmental charges payable in connection with
any such transfer or exchange.
121
Table of Contents
JCI plc
may change or appoint any paying agent, security registrar or transfer agent with respect to the JCI plc Notes of a series without prior notice to the holders of
the JCI plc Notes of such series. JCI plc or any of its subsidiaries may act as paying agent, transfer agent or security registrar in respect of any JCI plc Notes.
Governing Law
The JCI plc Indenture and any JCI plc Notes issued thereunder shall be deemed to be a contract made under the internal laws of the
State of New York, and for all purposes shall be construed in accordance with the laws of the State of New York without regard to conflicts of laws
principles that would require the application of any other law. The JCI plc Indenture is subject to the provisions of the Trust Indenture Act that are required to be part of the JCI plc
Indenture and shall, to the extent applicable, be governed by such provisions.
Satisfaction and Discharge of the JCI plc Indenture
The JCI plc Indenture shall cease to be of further effect with respect to a series of JCI plc Notes if, at any time:
(a) JCI plc
has delivered or has caused to be delivered to the Trustee for cancellation all JCI plc Notes of such series theretofore authenticated, other than
any JCI plc Notes that have been destroyed, lost or stolen and that have been replaced or paid as provided in the JCI plc Indenture, and JCI plc Notes for whose payment funds or
governmental obligations have theretofore been deposited in trust or segregated and held in trust by JCI plc and thereupon repaid to JCI plc or discharged from such trust, as provided in
the JCI plc Indenture; or
(b) all
such JCI plc Notes of a particular series not theretofore delivered to the Trustee for cancellation have become due and payable or are by their terms to
become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and JCI plc
shall irrevocably deposit or cause to be deposited with the Trustee as trust funds the entire amount, in funds or governmental obligations, or a combination thereof, sufficient to pay at maturity or
upon redemption all JCI plc Notes of such series not theretofore delivered to the Trustee for cancellation, including principal, premium, if any, and interest due or to become due on such date
of maturity or redemption date, as the case may be, and if in either case JCI plc shall also pay or cause to be paid all other sums payable under the JCI plc Indenture with respect to
such series by JCI plc.
With
respect to any redemption of any JCI plc Notes that requires the payment of the Applicable Par Call Date Notes Premium, Applicable Non-Par Call Date Notes Premium or
Applicable Euro Notes Premium, as applicable, the amount deposited pursuant to the above paragraph shall be sufficient for purposes of the JCI plc Indenture to the extent that an amount is so
deposited with the Trustee or paying agent, as applicable, equal to the Applicable Par Call Date Notes Premium, Applicable Non-Par Call Date Notes Premium or Applicable Euro Notes Premium, as
applicable, on such JCI plc Notes calculated as of the date of the notice of redemption, with any deficit on the redemption date only required to be deposited with the Trustee or paying agent,
as applicable, on or prior to the redemption date.
Notwithstanding
the above, JCI plc may not be discharged from the following obligations, which will survive until the date of maturity or the redemption date, as the case may be,
for the applicable series of JCI plc Notes:
-
-
to make any interest or principal payments that may be required with respect to the JCI plc Notes of such series;
-
-
to register the transfer or exchange of the JCI plc Notes of such series;
122
Table of Contents
-
-
to execute and authenticate the JCI plc Notes of such series;
-
-
to replace stolen, lost or mutilated JCI plc Notes of such series;
-
-
to maintain an office or agency with respect to the JCI plc Notes of such series;
-
-
to maintain paying agencies with respect to the JCI plc Notes of such series; and
-
-
to appoint new Trustees with respect to the JCI plc Notes of such series as required.
JCI plc
also may not be discharged from the following obligations, which will survive the satisfaction and discharge of the applicable series of JCI plc
Notes:
-
-
to compensate and reimburse the Trustee in accordance with the terms of the JCI plc Indenture;
-
-
to receive unclaimed payments held by the Trustee for at least one year after the date upon which the principal, if any, or interest on the
JCI plc Notes of such series shall have respectively come due and payable and remit those payments to the holders thereof if required; and
-
-
to withhold or deduct taxes as provided in the JCI plc Indenture.
For
purposes of this "
Description of JCI plc Notes
," the term "
governmental
obligations
" shall have the following meaning with respect to the JCI plc Euro Notes: (x) any security which is (i) a direct obligation of the German
government or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the German government the payment of which is fully and unconditionally
guaranteed by the German government, the central bank of the German government or a governmental agency of the German government, which, in either case (x)(i) or (ii), is not callable or redeemable at
the option of the issuer thereof, and (y) certificates, depositary receipts or other instruments which evidence a direct ownership interest in obligations described in clause (x)(i) or
(x)(ii) above or in any specific principal or interest payments due in respect thereof.
Defeasance and Discharge of Obligations
JCI plc's obligations with respect to the JCI plc Notes of any series will be discharged upon compliance with the conditions under
the caption "
Covenant Defeasance
"; provided that JCI plc may not be discharged from the following obligations, which will survive until such date
of maturity or the redemption date, as the case may be, for the applicable series of JCI plc Notes:
-
-
to make any interest or principal payments that may be required with respect to the JCI plc Notes of such series;
-
-
to register the transfer or exchange of the JCI plc Notes of such series;
-
-
to execute and authenticate the JCI plc Notes of such series;
-
-
to replace stolen, lost or mutilated JCI plc Notes of such series;
-
-
to maintain an office or agency with respect to the JCI plc Notes of such series;
-
-
to maintain paying agencies with respect to the JCI plc Notes of such series; and
-
-
to appoint new Trustees with respect to the JCI plc Notes of such series as required.
JCI plc
also may not be discharged from the following obligations, which will survive the satisfaction and discharge of the applicable series of JCI plc
Notes:
-
-
to compensate and reimburse the Trustee in accordance with the terms of the JCI plc Indenture;
-
-
to receive unclaimed payments held by the Trustee for at least one year after the date upon which the principal, if any, or interest on the
JCI plc Notes of such series shall have respectively come due and payable and remit those payments to the holders thereof if required; and
123
Table of Contents
-
-
to withhold or deduct taxes as provided in the JCI plc Indenture.
Covenant Defeasance
Upon compliance with specified conditions, JCI plc, at its option and at any time, by written notice executed by an Officer delivered to
the Trustee, may elect to have its obligations, to the extent applicable, under the covenants described under "
Offer to Repurchase Upon Change of Control
Triggering Event
" and "
Certain Covenants
" above, and the operation of the Event of Default described in
clause (4) of the first paragraph under the caption "
Events of Default
" above, discharged with respect to all outstanding
JCI plc Notes of a series and the JCI plc Indenture insofar as such JCI plc Notes are concerned. For this purpose, such covenant defeasance means that, with respect to the
outstanding JCI plc Notes of a series, JCI plc may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference in the JCI plc Indenture to any such covenant or by reason of reference in any such covenant to any other provision of the JCI plc
Indenture or in any other document, and such omission to comply shall not constitute a Default or an Event of Default relating to the applicable series of JCI plc Notes. These conditions
are:
-
-
JCI plc irrevocably deposits in trust with the Trustee or, at the option of the Trustee, with a trustee satisfactory to the Trustee and
JCI plc, as the case may be, under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, funds or governmental obligations or a combination thereof
sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay principal of, premium, if
any, and interest on the outstanding JCI plc Notes of such series to maturity or redemption, as the case may be, and to pay all other amounts payable by it under the JCI plc Indenture
(provided that, with respect to any redemption of any JCI plc Notes that requires the payment of the Applicable Par Call Date Notes Premium, Applicable Non-Par Call Date Notes Premium or
Applicable Euro Notes Premium, as applicable, the amount deposited pursuant to the above paragraph shall be sufficient for purposes of the JCI plc Indenture to the extent that an amount is so
deposited with the Trustee or paying agent, as applicable, equal to the Applicable Par Call Date Notes Premium, Applicable Non-Par Call Date Notes Premium or Applicable Euro Notes Premium, as
applicable, on such JCI plc Notes calculated as of the date of the notice of redemption, with any deficit on the redemption date only required to be deposited with the Trustee or paying agent,
as applicable, on or prior to the redemption date), provided that (A) the trustee of the irrevocable trust shall have been irrevocably instructed to pay such funds or the proceeds of such
governmental obligations to the Trustee and (B) the Trustee shall have been irrevocably instructed to apply such funds or the proceeds of such governmental obligations to the payment of such
principal, premium, if any, and interest with respect to the JCI plc Notes of such series;
-
-
JCI plc delivers to the Trustee an Officer's Certificate stating that all conditions precedent specified herein relating to defeasance
or covenant defeasance, as the case may be, have been complied with, and an Opinion of Counsel to the same effect;
-
-
no Event of Default shall have occurred and be continuing, and no event which with notice or lapse of time or both would become such an Event
of Default shall have occurred and be continuing, on the date of such deposit; and
-
-
JCI plc shall have delivered to the Trustee an Opinion of Counsel (which, in the case of a defeasance, must be based on a change in law)
or a ruling received from the U.S. Internal Revenue Service to the effect that the beneficial owners of the JCI plc Notes of such series will not recognize income, gain or loss for U.S. federal
income tax purposes as a result of JCI plc's exercise of such defeasance or covenant defeasance and will be subject to U.S. Federal income tax in the same amount and in the same manner and at
the same times as would have been the case if such election had not been exercised.
124
Table of Contents
Definitions
As used in the JCI plc Notes and this "
Description of JCI plc Notes
," the
following defined terms shall have the following meanings with respect to the JCI plc Notes:
"
Affiliate
", with respect to any specified Person, means any other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person. For the purposes of this definition, "
control
" when used with respect to any specified
Person means the power to direct the management and policies of such Person, directly or indirectly, whether through ownership of voting securities, by contract or otherwise; and the terms
"
controlling
" and "
controlled
" have meanings correlative to the foregoing.
"
Attributable Debt
," in connection with a Sale and Lease-Back Transaction, as of any particular time, means the aggregate of present
values (discounted at a rate that, at the inception of the lease, represents the effective interest rate that the lessee would have incurred to borrow over a similar term the funds necessary to
purchase the leased assets) of the obligations of JCI plc or any Restricted Subsidiary for net rental payments during the remaining term of the applicable lease, including any period for which
such lease has been extended or, at the option of the lessor, may be extended. The term "
net rental payments
" under any lease of any period shall mean
the sum of the rental and other payments required to be paid in such period by the lessee thereunder, not including any amounts required to be paid by such lessee, whether or not designated as rental
or additional rental, on account of maintenance and repairs, reconstruction, insurance, taxes, assessments, water rates or similar charges required to be paid by such lessee thereunder or any amounts
required to be paid by such lessee thereunder contingent upon the amount of sales, maintenance and repairs, reconstruction, insurance, taxes, assessments, water rates or similar charges.
"
Board of Directors
" means the Board of Directors of JCI plc or any duly authorized committee of such Board of Directors.
"
business day
" means any day other than a Saturday or Sunday, (1) that is not a day on which banking institutions in the City of
New York or London are authorized or obligated by law, executive order or regulation to close, and (2) in respect of the JCI plc Euro Notes, on which the Trans-European Automated
Real-time Gross Settlement Express Transfer System (the TARGET2 system), or any successor thereto, is open.
"
Change of Control
" means the occurrence of any of the following after the date of issuance of the JCI plc Notes of the applicable
series:
(1) the
direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions,
of all or substantially all of our assets and the assets of our subsidiaries taken as a whole to any "person" or "group" (as those terms are used in Section 13(d)(3) of the Exchange Act) other
than to us or one of our subsidiaries, other than any such transaction or series of related transactions where holders of our Voting Stock outstanding immediately prior thereto hold Voting Stock of
the transferee Person representing a majority of the voting power of the transferee Person's Voting Stock immediately after giving effect thereto;
(2) the
consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" or "group" (as those terms are
used in Section 13(d)(3) of the Exchange Act) (other than us or one of our subsidiaries) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of our Voting Stock representing a majority of the voting power of our outstanding Voting Stock;
125
Table of Contents
(3) we
consolidate with, or merge with or into, any Person, or any Person consolidates with, or merges with or into, us, in any such event pursuant to a transaction in which
any of our outstanding Voting Stock or Voting Stock of such other Person is converted into or exchanged for cash, securities or other property, other than any such transaction where our Voting Stock
outstanding immediately prior to such transaction constitutes, or is converted into or exchanged for, Voting Stock representing a majority of the voting power of the Voting Stock of the surviving
Person (or its parent) immediately after giving effect to such transaction; or
(4) the
adoption by our shareholders of a plan relating to our liquidation or dissolution.
Notwithstanding
the foregoing, a transaction will not be deemed to involve a change of control under clause (2) above if (1) we become a direct or indirect wholly-owned
subsidiary of a holding company or other Person and (2)(A) the direct or indirect holders of the Voting Stock of such holding company or other Person immediately following that transaction are
substantially the same as the holders of our Voting Stock immediately prior to that transaction or (B) immediately following that transaction no person (as that term is used in
Section 13(d)(3) of the Exchange Act) (other than a holding company or other Person satisfying the requirements of this sentence) is the beneficial owner, directly or indirectly, of more than
50% of the Voting Stock of such holding company or other Person.
"
Change of Control Triggering Event
" means, with respect to the applicable series of JCI plc Notes, the JCI plc Notes of
such series cease to be rated Investment Grade by each of the Rating Agencies on any date during the period (the "
Trigger Period
") commencing
60 days prior to the first public announcement by us of any Change of Control (or pending Change of Control) and ending 60 days following consummation of such Change of Control (which
Trigger Period will be extended following consummation of a Change of Control for so long as any of the Rating Agencies has publicly announced that it is considering a possible ratings downgrade or
withdrawal). However, a Change of Control Triggering Event otherwise arising by virtue of a particular reduction in, or withdrawal of, rating shall not be deemed to have occurred in respect of a
particular Change of Control (and thus shall not be deemed a Change of Control Triggering Event for purposes of the definition of Change of Control Triggering Event) if the Rating Agencies making the
reduction in, or withdrawal of, rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing at our request that the reduction or
withdrawal was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable
Change of Control shall have occurred at the time of the Change of Control Triggering Event). If a Rating Agency is not providing a rating for the JCI plc Notes of such series at the
commencement of any Trigger Period, the JCI plc Notes of such series will be deemed to have ceased to be rated Investment Grade by such Rating Agency during that Trigger Period.
Notwithstanding
the foregoing, no Change of Control Triggering Event will be deemed to have occurred in connection with any particular Change of Control unless and until such Change of
Control has actually been consummated.
"
Consolidated Net Worth
" at any date means total assets less total liabilities, in each case appearing on the most recently prepared
consolidated balance sheet of JCI plc and its subsidiaries as of the end of a fiscal quarter of JCI plc, prepared in accordance with United States generally accepted accounting
principles as in effect on the date of the consolidated balance sheet.
"
Consolidated Tangible Assets
" at any date means total assets less all intangible assets appearing on the most recently prepared
consolidated balance sheet of JCI plc and its subsidiaries as of the end of a fiscal quarter of JCI plc, prepared in accordance with United States generally accepted accounting
principles as in effect on the date of the consolidated balance sheet.
126
Table of Contents
"
Default
" means any event, act or condition that with notice or lapse of time, or both, would constitute an Event of Default.
"
Funded Indebtedness
" means any Indebtedness of JCI plc or any consolidated subsidiary maturing by its terms more than one year
from the date of the determination thereof, including any Indebtedness renewable or extendable at the option of the obligor to a date later than one year from the date of the determination thereof.
"
Indebtedness
" means, without duplication, the principal amount (such amount being the face amount or, with respect to original issue
discount bonds or zero coupon notes, bonds or debentures or similar securities, determined based on the accreted amount as of the date of the most recently prepared consolidated balance sheet of
JCI plc and its subsidiaries as of the end of a fiscal quarter of JCI plc prepared in accordance with United States generally accepted accounting principles as in effect on the date of
such consolidated balance sheet) of (i) all obligations for borrowed money, (ii) all obligations evidenced by debentures, notes or other similar instruments, (iii) all obligations
in respect of letters of credit or bankers acceptances or similar instruments or reimbursement obligations with respect thereto (such instruments to constitute Indebtedness only to the extent that the
outstanding reimbursement obligations in respect thereof are collateralized by cash or cash equivalents reflected as assets on a balance sheet prepared in accordance with United States generally
accepted accounting principles), (iv) all obligations to pay the deferred purchase price of property or services, except (A) trade and similar accounts payable and accrued expenses,
(B) employee compensation, deferred compensation and pension obligations, and other obligations arising from employee benefit programs and agreements or
other similar employment arrangements, (C) obligations in respect of customer advances received and (D) obligations in connection with earnout and holdback agreements, in each case in
the ordinary course of business, (v) all obligations as lessee to the extent capitalized in accordance with United States generally accepted accounting principles and (vi) all
Indebtedness of others consolidated in such balance sheet that is guaranteed by JCI plc or any of its subsidiaries or for which JCI plc or any of its subsidiaries is legally responsible
or liable (whether by agreement to purchase indebtedness of, or to supply funds or to invest in, others).
"
Intangible assets
" means the amount, if any, stated under the headings "Goodwill" and "Other intangible assets, net" or under any other
heading of intangible assets separately listed, in each case on the face of the most recently prepared consolidated balance sheet of JCI plc and its subsidiaries as of the end of a fiscal
quarter of JCI plc, prepared in accordance with United States generally accepted accounting principles as in effect on the date of the consolidated balance sheet.
"
Investment Grade
" means a rating of Baa3 or better by Moody's (or its equivalent under any successor rating category of Moody's) and a
rating of BBB or better by S&P (or its equivalent under any successor rating category of S&P), and the equivalent investment grade credit rating from any replacement rating agency or
rating agencies selected by us under the circumstances permitting us to select a replacement rating agency and in the manner for selecting a replacement rating agency, in each case as set forth in the
definition of "
Rating Agency
."
"
lien
" means a mortgage, pledge, security interest, lien or encumbrance.
"
Moody's
" means Moody's Investors Service, Inc., a subsidiary of Moody's Corporation, and its successors.
"
Officer
" means any director, any managing director, the chairman or any vice chairman of the Board of Directors, the chief executive
officer, the president, the chief financial officer, any vice president, the treasurer, any assistant treasurer, the secretary or any assistant secretary, or any equivalent of the foregoing, of
JCI plc or any Person duly authorized to act for or on behalf of JCI plc.
"
Officer's Certificate
" means a certificate, signed by any Officer of JCI plc, that is delivered to the Trustee in accordance with
the terms of the JCI plc Indenture.
127
Table of Contents
"
Opinion of Counsel
" means a written opinion acceptable to the Trustee from legal counsel licensed in any State of the United States of
America and applying the laws of such State. The counsel may be an employee of or counsel to JCI plc.
"
Person
" means any individual, corporation, partnership, limited liability company, business trust, association, joint-stock company,
joint venture, trust, incorporated or unincorporated organization or government or any agency or political subdivision thereof.
"
Principal Property
" means any manufacturing, processing or assembly plant or any warehouse or distribution facility, or any office or
parcel of real property (including fixtures but excluding leases and other contract rights which might otherwise be deemed real property) of JCI plc or any of its subsidiaries that is used by
any U.S. Subsidiary of JCI plc and is located in the United States of America (excluding its territories and possessions and Puerto Rico) and (A) is owned by JCI plc or any
subsidiary of JCI plc on the date the JCI plc Notes of the applicable series are issued, (B) the initial construction of which has been completed after the date on which the
JCI plc Notes of the applicable series are issued, or (C) is acquired after the date on which the JCI plc Notes of the applicable series are issued, in each case, other than any
such plants, facilities, warehouses or portions thereof, that in the opinion of the Board of Directors of JCI plc, are not collectively of material importance to the total business conducted by
JCI plc and its subsidiaries as an entirety, or that have a net book value (excluding any capitalized interest expense), on the date the JCI plc Notes of the applicable series are issued
in the case of clause (A) of this definition, on the date of completion of the initial construction in the case of clause (B) of this definition or on the date of acquisition in the case
of clause (C) of this definition, of less than 2.0% of Consolidated Tangible Assets on the consolidated balance sheet of JCI plc and its subsidiaries as of the applicable date.
"
Rating Agency
" means each of Moody's and S&P; provided, that if any of Moody's or S&P ceases to provide rating services to issuers or
investors, we may appoint another "nationally recognized statistical rating organization" as defined under Section 3(a)(62) of the Exchange Act as a replacement for such Rating Agency;
provided, that we shall give notice of such appointment to the Trustee.
"
Restricted Subsidiary
" means any subsidiary of JCI plc that owns or leases a Principal Property.
"
Sale and Lease-Back Transaction
" means an arrangement with any Person providing for the leasing by JCI plc or a Restricted
Subsidiary of any Principal Property whereby such Principal Property has been or is to be sold or transferred by JCI plc or a Restricted Subsidiary to such Person other than JCI plc or
any of its subsidiaries; provided, however, that the foregoing shall not apply to any such arrangement involving a lease for a term, including renewal rights, for not more than three years.
"
S&P
" means Standard & Poor's Global Ratings, a division of S&P Global Inc., and its successors.
"
Trust Officer
" means any officer within the corporate trust department of the Trustee, including any vice president, senior associate,
associate, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to
whom any corporate trust matter is referred because of such Person's knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of the
JCI plc Indenture.
"
U.S. Subsidiary
" means any subsidiary of JCI plc that was formed under the laws of the United States of America, any State thereof
or the District of Columbia (but not any territory thereof).
"
Voting Stock
" of any specified Person as of any date means the capital stock of such Person that is at the time entitled to vote
generally in the election of the board of directors of such Person.
128
Table of Contents
BOOK-ENTRY, DELIVERY AND FORM
We have obtained the information in this section concerning DTC, Clearstream and Euroclear and their book-entry systems and procedures from
sources that we believe to be reliable. We take no responsibility for an accurate portrayal of this information. In addition, the description of the clearing systems in this section reflects our
understanding of the rules and procedures of DTC, Clearstream and Euroclear as they are currently in effect. The clearing systems may change their rules and procedures at any time without notice.
The JCI plc Dollar Notes
The JCI plc Dollar Notes of a series will be issued in whole or in part in the form of one or more global securities
("
Dollar Global Securities
") that will be deposited with, or on behalf of, DTC and registered in the name of Cede & Co., DTC's nominee.
Beneficial
interests in the Dollar Global Securities will be represented through book-entry accounts of financial institutions acting on behalf of beneficial owners as direct or indirect
participants in DTC. Investors may elect to hold their interests in the Dollar Global Securities through either DTC (in the United States of America) or (in Europe) through Clearstream or through
Euroclear. Investors may hold their interests in the Dollar Global Securities directly if they are participants of such systems, or indirectly through organizations that are participants in these
systems. Clearstream and Euroclear will hold interests on behalf of their participants through customers' securities accounts in Clearstream's and Euroclear's names on the books of their respective
U.S. depositaries, which in turn will hold these interests in customers' securities accounts in the depositaries' names on the books of DTC. Beneficial interests in the Dollar Global Securities will
be held in denominations of $2,000 and whole multiples of $1,000 in excess thereof. Except as set forth below, the Dollar Global Securities may be transferred, in whole and not in part, only to
another nominee of DTC or to a successor of DTC or its nominee.
JCI plc
Dollar Notes represented by a Dollar Global Security can be exchanged for definitive securities in registered form only if:
-
-
DTC notifies JCI plc that it is unwilling or unable to continue as depositary for such Dollar Global Security and JCI plc does
not appoint a successor depositary for such Dollar Global Security within 90 days after receiving that notice;
-
-
at any time DTC ceases to be a clearing agency registered or in good standing under the Exchange Act or other applicable statute or regulation
and JCI plc does not appoint a successor depositary for such Dollar Global Security within 90 days after becoming aware that DTC has ceased to be registered as a clearing agency;
-
-
JCI plc determines that such Dollar Global Security will be exchangeable for definitive securities in registered form and notifies the
Trustee of its decision; or
-
-
Upon the request of a holder of any JCI plc Dollar Note upon the occurrence and continuance of an Event of Default with respect to such
JCI plc Dollar Note.
A
Dollar Global Security that can be exchanged as described in the preceding sentence will be exchanged for definitive securities ("
Dollar Definitive
Securities
") issued in authorized denominations in registered form for the same aggregate amount. The Dollar Definitive Securities will be registered in the names of the owners
of the beneficial interests in the Dollar Global Security as directed by DTC.
We
will make payment of interest, principal or other amounts in respect of the JCI plc Dollar Notes represented by a Dollar Global Security to the applicable paying agent, which
in turn will make payment to DTC or its nominee, as the case may be (subject to such paying agent having received cleared funds sufficient to make such payments), as the sole registered owner and the
sole holder of
129
Table of Contents
the
JCI plc Dollar Notes represented by a Dollar Global Security for all purposes under the JCI plc Indenture. Accordingly, we, the Trustee and any paying agent will have no
responsibility or liability for:
-
-
any aspect of DTC's records relating to, or payments made on account of, beneficial ownership interests in a JCI plc Dollar Note
represented by a Dollar Global Security; and
-
-
any other aspect of the relationship between DTC and its participants or the relationship between those participants and the owners of
beneficial interests in a Dollar Global Security held through those participants; or the maintenance, supervision or review of any of DTC' s records relating to those beneficial ownership interests.
We
understand that DTC's current practice is to credit participants' accounts on each payment date with payments in amounts proportionate to their respective beneficial interests in the
principal amount of such Dollar Global Security as shown on DTC's records, upon DTC's receipt of funds and corresponding detail information. The dealer managers will initially designate the accounts
to be credited. Payments by participants to owners of beneficial interests in a Dollar Global Security will be governed by standing instructions and customary practices, as is the case with securities
held for customer accounts registered in "street name," and will be the sole responsibility of those participants. Book-entry JCI plc Dollar Notes may be more difficult to pledge because of the
lack of a physical note.
So
long as DTC or its nominee is the registered owner of a Dollar Global Security, DTC or its nominee, as the case may be, will be considered the sole registered owner and the sole
holder of the JCI plc Dollar Notes represented by a Dollar Global Security for all purposes under the JCI plc Indenture. Except as otherwise provided herein, owners of beneficial
interests in the JCI plc Dollar Notes will not be entitled to have JCI plc Dollar Notes registered in their names, will not receive or be entitled to receive physical delivery of the
JCI plc Dollar Notes in definitive form and will not be considered owners or holders of JCI plc Dollar Notes under the JCI plc Indenture. Accordingly, each person owning a
beneficial interest in a Dollar Global Security must rely on the procedures of DTC and, if that person is not a DTC participant, on the procedures of the participant through which that person owns its
interest, to exercise any rights of a holder of JCI plc Dollar Notes. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of the securities in
certificated form. These laws may impair the ability to transfer beneficial interests in a Dollar Global Security. Beneficial owners may experience delays in receiving distributions on their
JCI plc Dollar Notes since distributions will initially be made to DTC and must then be transferred through the chain of intermediaries to the beneficial owner's account.
We
understand that, under existing industry practices, if we request holders to take any action, or if an owner of a beneficial interest in a Dollar Global Security desires to take any
action which a holder of JCI plc Dollar Notes is entitled to take under the JCI plc Indenture, then DTC would authorize the participants holding the relevant beneficial interests to take
that action and those participants would authorize the beneficial owners owning through such participants to take that action or would otherwise act upon the instructions of beneficial owners owning
through them.
Beneficial
interests in a Dollar Global Security will be shown on, and transfers of those ownership interests will be effected only through, records maintained by DTC and its
participants for that Dollar Global Security. The conveyance of notices and other communications by DTC to its participants and by its participants to owners of beneficial interests in the
JCI plc Dollar Notes will be governed by arrangements among them, subject to any statutory or regulatory requirements in effect.
We
understand that DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of
the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered under the Exchange Act.
130
Table of Contents
DTC
holds the securities of its participants and facilitates the clearance and settlement of securities transactions among its participants in such securities through electronic
book-entry changes in accounts of its participants. The electronic book-entry system eliminates the need for physical certificates. DTC's participants include securities brokers and dealers, including
underwriters, banks, trust companies, clearing corporations and certain other organizations, some of which, and/or their representatives, own DTC. Banks, brokers, dealers, trust companies and others
that clear through, or maintain a custodial relationship with, a participant, either directly or indirectly, also have access to DTC's book-entry system. The rules applicable to DTC and its
participants are on file with the SEC.
We
understand that that the above information with respect to DTC has been provided to its participants and other members of the financial community for informational purposes only and
is not intended to serve as a representation, warranty or contract modification of any kind.
The JCI plc Euro Notes
The JCI plc Euro Notes will initially be represented by one or more fully registered global notes ("
Euro Global
Securities
" and, together with Dollar Global Securities, "
Global Securities
"). Each such Euro Global Security will be deposited
with, or on behalf of, a common depositary, and registered in the name of the nominee of the common depositary for the accounts of Clearstream and Euroclear.
The
holder of a Euro Global Security shall be the only person entitled to receive payments in respect of JCI plc Euro Notes represented by such Euro Global Security and we will be
discharged by payment to, or to the order of, the holder of such Euro Global Security in respect of each amount so paid. Each of the persons shown in the records of Euroclear or Clearstream as the
beneficial holder of a particular nominal amount of JCI plc Euro Notes represented by such Euro Global Securities must look solely to Euroclear or Clearstream, as the case may be, for his share
of each payment so made by JCI plc to, or to the order of, the holder of such Euro Global Securities. After payment to the common depositary (or its nominee) of interest, principal or other
amounts in respect of the JCI plc Euro Notes represented by a Euro Global Securities, JCI plc will not have responsibility or liability for the payment of such amounts to Euroclear or
Clearstream or to holders or beneficial owners of book-entry interests in the JCI plc Euro Notes.
Except
as set forth below, the Euro Global Securities may be transferred, in whole and not in part, only to Euroclear or Clearstream or their respective nominees. You may hold your
interests in the Euro Global Securities in Europe through Clearstream or Euroclear, either as a participant in such systems or indirectly through organizations that are participants in such systems.
Clearstream and Euroclear will hold interests in the Euro Global Securities on behalf of their respective participating organizations or customers through customers' securities accounts in
Clearstream's or Euroclear's names on the books of their respective depositaries. Book-entry interests in the JCI plc Euro Notes and all transfers relating to the JCI plc Euro Notes will
be reflected in the book-entry records of Clearstream and Euroclear.
The
distribution of the JCI plc Euro Notes will be cleared through Clearstream and Euroclear. Any secondary market trading of book-entry interests in the JCI plc Euro Notes
will take place through Clearstream and Euroclear participants and will settle in same-day funds. Owners of book-entry interests in the JCI plc Euro Notes will receive payments relating to
their JCI plc Euro Notes in euros, except as described under the heading "
Description of JCI plc NotesIssuance of JCI plc Euro Notes in
Euros
."
Clearstream
and Euroclear have established electronic securities and payment transfer, processing, depositary and custodial links among themselves and others, either directly or through
custodians and depositories. These links allow the JCI plc Euro Notes to be issued, held and transferred among the clearing systems without the physical transfer of certificates. Special
procedures to facilitate clearance
131
Table of Contents
and
settlement have been established among these clearing systems to trade securities across borders in the secondary market.
The
policies of Clearstream and Euroclear will govern payments, transfers, exchanges and other matters relating to the investor's interest in the JCI plc Euro Notes held by them.
We have no responsibility for any aspect of the records kept by Clearstream or Euroclear or any of their direct or indirect participants. We also do not supervise these systems in any way.
Clearstream
and Euroclear and their participants perform these clearance and settlement functions under agreements they have made with one another or with their customers. You should be
aware that they are not obligated to perform or continue to perform these procedures and may modify them or discontinue them at any time.
Owners
of beneficial interests in the JCI plc Euro Notes will not be entitled to have the JCI plc Euro Notes registered in their names, will not receive or be entitled to
receive physical delivery of the JCI plc Euro Notes in definitive form and will not be considered the owners or holders of the JCI plc Euro Notes under the JCI plc Indenture,
including for purposes of receiving any reports delivered by us or the Trustee pursuant to the JCI plc Indenture. Accordingly, each person owning a beneficial interest in a JCI plc Euro
Note must rely on the procedures of the depositary and, if such person is not a participant, on the procedures of the participant through which such person owns its interest, in order to exercise any
rights of a holder of JCI plc Euro Notes.
If
the common depositary for any of the JCI plc Euro Notes represented by a Euro Global Security is at any time unwilling or unable to continue as common depositary and a
successor common depositary is not appointed by us within 90 days, or upon request of a holder of any JCI plc Euro Notes upon the occurrence and continuance of an Event of Default with
respect to such JCI plc Euro Notes, we will issue JCI plc Euro Notes in definitive form ("
Euro Definitive Securities
" and, together with
the Dollar Definitive Securities, the "
Definitive Securities
") (in minimum denominations of €100,000 principal amount and whole
multiples of €1,000 in excess thereof) in exchange for the Euro Global Security that had been held by the common depositary. Any JCI plc Euro Notes issued in definitive form in
exchange for a Euro Global Security will be registered in the name or names that the common depositary gives to the Trustee or other relevant agent of the Trustee. It is expected that the common
depositary's instructions will be based upon directions received by the common depositary from participants with respect to ownership of beneficial interests in the Euro Global Security that had been
held by the common depositary. In addition, we may at any time determine that the JCI plc Euro Notes shall no longer be represented by a Euro Global Security and will issue JCI plc Euro
Notes in definitive form in exchange for such Euro Global Security pursuant to the procedure described above.
Clearstream
We understand that Clearstream is incorporated under the laws of Luxembourg as a professional depositary. Clearstream holds securities for its
participating organizations ("
Clearstream Participants
") and facilitates the clearance and settlement of securities transactions between Clearstream
Participants through electronic book-entry changes in accounts of Clearstream Participants, thereby eliminating the need for physical movement of certificates. Clearstream provides to Clearstream
Participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream interfaces
with domestic securities markets in several countries. As a professional depositary, Clearstream is subject to regulation by the Luxembourg Commission for the Supervision of the Financial Sector
(
Commission de Surveillance du Secteur Financier
). Clearstream Participants are recognized financial institutions around the world, including
underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Clearstream's U.S. Participants are limited to securities brokers and
dealers and banks. Indirect access to Clearstream is also available to others, such as banks, brokers, dealers
132
Table of Contents
and
trust companies that clear through or maintain a custodial relationship with a Clearstream Participant either directly or indirectly.
Distributions
with respect to JCI plc Notes held beneficially through Clearstream will be credited to cash accounts of Clearstream Participants in accordance with its rules and
procedures (in the case of the JCI plc Dollar Notes, to the extent received by the U.S. depositary for Clearstream).
Euroclear
We understand that Euroclear was created in 1968 to hold securities for participants of Euroclear ("
Euroclear
Participants
") and to clear and settle transactions between Euroclear Participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the
need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash. Euroclear performs various other services, including securities lending and
borrowing, and interacts with domestic markets in several countries. Euroclear is operated by Euroclear Bank S.A/N.V. (the "
Euroclear Operator
"), under
contract with Euroclear plc, a U.K. corporation. All operations are conducted by the Euroclear Operator, and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts
with the Euroclear Operator, not Euroclear plc. Euroclear plc establishes policy for Euroclear on behalf of Euroclear Participants. Euroclear Participants include banks, including
central banks, securities brokers and dealers and other professional financial intermediaries. Indirect access to Euroclear is also available to other firms that clear through or maintain a custodial
relationship with a Euroclear Participant, either directly or indirectly.
The
Euroclear Operator is a Belgian bank. As such it is regulated by the Belgian Banking and Finance Commission.
Securities
clearance accounts and cash accounts with the Euroclear Operator are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of
the Euroclear System (the "
Euroclear Terms and Conditions
"), and applicable Belgian law. The Euroclear Terms and Conditions govern transfers of
securities and cash within Euroclear, withdrawals of securities and cash from Euroclear, and receipts of payments with respect to securities in Euroclear. All securities in Euroclear are held on a
fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear Operator acts under the Terms and Conditions only on behalf of Euroclear
Participants, and has no record of or relationship with persons holding through Euroclear Participants. Distributions with respect to interests in JCI plc Notes held beneficially through
Euroclear will be credited to the cash accounts of Euroclear Participants in accordance with the Euroclear Terms
and Conditions (in the case of the JCI plc Dollar Notes, to the extent received by the U.S. depositary for Euroclear).
Euroclear
has further advised us that investors that acquire, hold and transfer interests in the JCI plc Notes by book-entry through accounts with the Euroclear Operator or any
other securities intermediary are subject to the laws and contractual provisions governing their relationship with their intermediary, as well as the laws and contractual provisions governing the
relationship between such an intermediary and each other intermediary, if any, standing between themselves and the Dollar Global Securities or Euro Global Securities, as applicable.
Global Clearance and Settlement Procedures
Secondary market trading of JCI plc Dollar Notes between DTC participants will occur in the ordinary way in accordance with DTC rules and
will be settled in immediately available funds using DTC's Same-Day Funds Settlement System. Secondary market trading of JCI plc Dollar Notes between Clearstream Participants and/or Euroclear
Participants will occur in the ordinary way in accordance
133
Table of Contents
with
the applicable rules and operating procedures of Clearstream and Euroclear and will be settled using the procedures applicable to conventional eurobonds in immediately available funds.
Cross-market
transfers between persons holding JCI plc Dollar Notes directly or indirectly through DTC, on the one hand, and directly or indirectly through Clearstream
Participants or Euroclear Participants, on the other, will be effected through DTC in accordance with DTC rules on behalf of the relevant European international clearing system by its U.S. depositary;
however, such cross-market
transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in such system in accordance with its rules and procedures and within its
established deadlines (European time). The relevant European international clearing system will, if the transaction meets its settlement requirements, deliver instructions to its U.S. depositary to
take action to effect final settlement on its behalf by delivering or receiving JCI plc Dollar Notes through DTC, and making or receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. Clearstream Participants and Euroclear Participants may not deliver instructions directly to their respective U.S. Depositaries.
Because
of time-zone differences, credits of JCI plc Dollar Notes received through Clearstream or Euroclear as a result of a transaction with a DTC participant will be made during
subsequent securities settlement processing and dated the business day following the DTC settlement date. Such credits or any transactions in such JCI plc Dollar Notes settled during such
processing will be reported to the relevant Euroclear Participants or Clearstream Participants on such business day. Cash received in Clearstream or Euroclear as a result of sales of JCI plc
Dollar Notes by or through a Clearstream Participant or a Euroclear Participant to a DTC participant will be received with value on the DTC settlement date but will be available in the relevant
Clearstream or Euroclear cash account only as of the business day following settlement in DTC.
Although
DTC, Clearstream and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of JCI plc Dollar Notes among participants of DTC, Clearstream and
Euroclear, they are under no obligation to perform or continue to perform such procedures and such procedures may be modified or discontinued at any time. Neither we nor any paying agent will have any
responsibility for the performance by DTC, Euroclear or Clearstream or their respective direct or indirect participants of their obligations under the rules and procedures governing their operations.
We understand that investors that hold their JCI plc Euro Notes through Clearstream or Euroclear accounts will follow the settlement
procedures that are applicable to conventional eurobonds in registered form. JCI plc Euro Notes may be credited to the securities custody accounts of Clearstream and Euroclear participants on
the business day following the Settlement Date, for value on the Settlement Date.
We
understand that secondary market trading of JCI plc Euro Notes between Clearstream and/or Euroclear participants will occur in the ordinary way following the applicable rules
and operating procedures of Clearstream and Euroclear. Secondary market trading of JCI plc Euro Notes will be settled using procedures applicable to conventional eurobonds in registered form.
You
should be aware that investors will only be able to make and receive deliveries, payments and other communications involving the JCI plc Euro Notes through Clearstream and
Euroclear on days when those systems are open for business. Those systems may not be open for business on days when banks, brokers and other institutions are open for business in the United States of
America.
In
addition, because of time-zone differences, there may be problems with completing transactions involving Clearstream and Euroclear on the same business day as in the United States of
America. United States investors who wish to transfer their interests in the JCI plc Euro Notes, or to make or
134
Table of Contents
receive
a payment or delivery of the JCI plc Euro Notes, on a particular day, may find that the transactions will not be performed until the next business day in Luxembourg or Brussels,
depending on whether Clearstream or Euroclear is used.
Clearstream
or Euroclear will credit payments with respect to the JCI plc Euro Notes to the cash accounts of Clearstream customers or Euroclear participants, as applicable, in
accordance with the relevant system's rules and procedures, to the extent received by its depositary. Clearstream or the Euroclear Operator, as the case may be, will take any other action permitted to
be taken by a holder of JCI plc Euro Notes under the JCI plc Indenture on behalf of a Clearstream customer or Euroclear participant only in accordance with its relevant rules and
procedures.
Clearstream
and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of the JCI plc Euro Notes among participants of Clearstream and Euroclear.
However, they are under no obligation to perform or continue to perform those procedures, and they may discontinue those procedures at any time.
135
Table of Contents