e424b5
Filed Pursuant to Rule 424(b)(5)
A filing fee of $267,500.00, calculated in accordance with
Rule 457(r) and offset by $115,282.50 pursuant to
Rule 457(p),
has been transmitted to the SEC in connection
with the securities offered from the registration
statement
(Reg.
No. 333-130714) by
means of this prospectus supplement.
Prospectus Supplement
(To Prospectus dated December 27, 2005)
Johnson Controls, Inc.
$500,000,000 Floating Rate Notes due 2008
Interest payable January 17, April 17,
July 17, and October 17
$800,000,000 5.250% Notes due 2011
Interest payable January 15 and July 15
$800,000,000 5.500% Notes due 2016
Interest payable January 15 and July 15
$400,000,000 6.000% Notes due 2036
Interest payable January 15 and July 15
The floating rate notes will mature on January 17, 2008.
The 2011 fixed rate notes will mature on January 15, 2011;
the 2016 fixed rate notes will mature on January 15, 2016;
and the 2036 fixed rate notes will mature on January 15,
2036. We may not redeem the floating rate notes prior to
maturity. We may redeem any series of the fixed rate notes in
whole or in part at any time at the applicable redemption price
described on
page S-8. Interest
on the floating rate notes will accrue at a floating rate equal
to three month LIBOR plus .23%. Interest on the three series of
fixed rate notes will accrue at the rate of 5.250%, 5.500% and
6.000% per year, respectively.
To read about certain factors you should consider before
investing in the notes, see Risk Factors beginning
on page S-3 of this prospectus supplement and those risk factors
incorporated by reference into this prospectus supplement.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these notes
or determined that this prospectus supplement or the
accompanying prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
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Price to | |
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Underwriting | |
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Public(1) | |
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Discounts | |
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Proceeds to Us | |
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Per Floating Rate Note
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100% |
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.225% |
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99.775% |
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Total
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$500,000,000 |
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$1,125,000 |
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$498,875,000 |
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Per 2011 Fixed Rate Note
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99.987% |
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.600% |
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99.387% |
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Total
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$799,896,000 |
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$4,800,000 |
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$795,096,000 |
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Per 2016 Fixed Rate Note
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99.886% |
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.650% |
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99.236% |
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Total
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$799,088,000 |
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$5,200,000 |
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$793,888,000 |
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Per 2036 Fixed Rate Note
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98.645% |
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.875% |
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97.770% |
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Total
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$394,580,000 |
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$3,500,000 |
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$391,080,000 |
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(1) Plus accrued interest from January 17, 2006, if
settlement occurs after that date.
The notes will not be listed on any securities exchange.
Currently, there is no public market for the notes of any series.
We expect that delivery of the notes of each series will be made
to investors through the book-entry facilities of The Depository
Trust Company, Clearstream Banking, S.A. and Euroclear Bank
S.A./ N.V. on or about January 17, 2006.
Joint Book-Running Managers
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Banc of America Securities LLC |
Citigroup |
JPMorgan |
Senior Co-Manager
Barclays Capital
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Calyon Securities (USA) |
Piper Jaffray |
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Commerzbank Corporates & Markets |
KBC Financial Products |
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LaSalle Capital Markets |
TD Securities |
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ING Financial Markets |
Wells Fargo Securities |
January 9, 2006.
Table of contents
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S-ii |
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S-1 |
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S-3 |
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S-15 |
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S-18 |
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S-18 |
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S-19 |
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S-i
About this prospectus supplement
This document is in two parts. The first part is this prospectus
supplement, which describes the specific terms of this offering.
The second part, the accompanying prospectus, gives more general
information, some of which may not apply to this offering. You
should read the entire prospectus supplement, as well as the
accompanying prospectus and the documents incorporated by
reference that are described under Where You Can Find More
Information in the accompanying prospectus.
You should rely only on the information contained or
incorporated by reference in this prospectus supplement and the
accompanying prospectus. We have not, and the underwriters have
not, authorized any other person to provide you with different
information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not,
and the underwriters are not, making an offer to sell these
securities in any jurisdiction where the offer or sale is not
permitted. You should assume that the information appearing in
this prospectus supplement, the accompanying prospectus and the
documents incorporated by reference is accurate only as of
respective dates of those documents in which the information is
contained. Our business, financial condition, results of
operations and prospects may have changed since those dates.
Unless the context requires otherwise, the terms we,
our, and us refer to Johnson Controls,
Inc. and its subsidiaries.
S-ii
About Johnson Controls, Inc.
We are a Wisconsin corporation organized in 1885. From 1885
through 1978, our operations were predominantly in the building
efficiency business. Since 1978, we have diversified our
operations through acquisitions and internal growth. We operate
in three primary businesses: building efficiency, interior
experience, and power solutions (the businesses were formerly
referred to as Controls Group, Seating and Interiors Group, and
Battery Group, respectively).
Products/ Systems and Services
Building efficiency
Building efficiency is a major worldwide supplier of installed
control systems and technical and facility management services
which improve the comfort, fire-safety, security, productivity,
energy efficiency, and cost-effectiveness of non-residential
buildings. We provide control systems that monitor, automate and
integrate critical building operating equipment and conditions.
These systems are customized to address each buildings
unique design and use. Building efficiency provides a broad
range of technical and facility management services that
supplement or function as in-house building staff. Technical
services include the operation, scheduled maintenance and repair
of building equipment such as control systems, chillers and
boilers. Facility management services provide on-site staff for
complete facility operations and management.
The business sells directly to building owners as well as
contractors. As of September 30, 2005, it employed sales,
engineering and service personnel working out of approximately
300 branch offices located in approximately 45 countries
throughout the world. Building efficiency employees also work
full-time at numerous customer sites.
Building efficiency also sells its control systems and products
to original equipment manufacturers, wholesalers and
distributors of air-conditioning and refrigeration systems and
commercial heating systems. Building efficiency products are
manufactured throughout the world. The segment also has
partially-owned affiliates in Asia, Europe, North America and
South America.
In fiscal 2005, 45 percent of building efficiencys
worldwide sales were derived from installed control systems and
approximately 55 percent originated from its service
offerings. Of the installed control systems, approximately
35 percent of revenues were derived from the new
construction market while 65 percent were derived from the
existing buildings market. In fiscal 2005, building efficiency
sales accounted for 21 percent of our consolidated sales.
Interior experience
Interior experience designs and manufactures products and
systems for passenger cars and light trucks, including vans,
pick-up trucks and sport/crossover utility vehicles. As of
September 30, 2005, the business produced automotive
interior systems for original equipment manufacturers and
operated approximately 240 wholly- and majority-owned
manufacturing or assembly plants in 30 countries worldwide.
Additionally, the business has partially-owned affiliates in
Asia, Europe, North America and South America.
Interior experience systems and products include complete
seating systems and components; cockpit systems, including
instrument clusters, information displays and body controllers;
overhead systems, including headliners and electronic
convenience features; floor consoles; and door systems. Interior
experience sales accounted for approximately 68 percent of total
fiscal 2005 net sales.
The business operates assembly plants that supply automotive
manufacturers with complete seats on a
just-in-time/in-sequence basis. Seats are assembled
to specific order and delivered on a predetermined schedule
directly to an automotive assembly line. Certain of the
businesss other automotive interior systems are also
supplied on a just-in-time/in-sequence basis. Foam
and
S-1
metal seating components, seat covers, seat mechanisms and other
components are shipped to these plants from the businesss
production facilities or outside suppliers.
The business has substantially grown its interior systems
capabilities through internal growth aided by acquisitions. In
fiscal 2002, the business expanded its capabilities in vehicle
electronics with its acquisition of the automotive electronics
business of France-based Sagem SA. In fiscal 2003, we acquired
Borg Instruments AG, an automotive electronics company with
headquarters in Germany.
Power Solutions
Power solutions services both automotive original equipment
manufacturers and the battery aftermarket by providing advanced
battery technology, coupled with systems engineering, marketing
and service expertise. We are the largest automotive battery
manufacturer in the world, producing more than 110 million
lead-acid batteries annually. Investments in new product and
process technology have expanded product offerings to
nickel-metal-hydride and lithium-ion battery technology to power
hybrid vehicles.
Sales of automotive batteries generated 11% of the total fiscal
2005 sales. In fiscal 2002, power solutions expanded its battery
operations into the European market through the acquisition of
the German automotive battery manufacturer Hoppecke Automotive
GmbH and Co. KG. In fiscal 2003, we continued our expansion into
the European market with our acquisition of VARTA Automotive
GmbH and the 80 percent majority ownership in VB
Autobatterie GmbH, a major European automotive battery
manufacturer headquartered in Germany. In fiscal 2004, we
acquired the remaining 51 percent interest in our Latin
American joint venture with Grupo IMSA, S.A. de C. V. More
recently, in fiscal 2005, we acquired Delphi Corporations
global battery business and received a global long-term contract
to supply General Motors with original equipment and original
equipment service batteries. The acquisitions support our growth
strategies and provide new opportunities to strengthen our
global leadership position in the automotive battery industry.
Batteries and plastic battery containers are manufactured at
plants in North America, South America, Asia and Europe and via
a partially-owned affiliate in India.
Recent Developments
On December 9, 2005, we completed the acquisition of
York International Corporation, or York, in an all-cash
transaction pursuant to which York become our wholly-owned
subsidiary. The total value of the acquisition was approximately
$3.2 billion, including approximately $565 million of
York debt.
York, which is headquartered in York, Pennsylvania, is a
supplier of heating, ventilation, air-conditioning, and
refrigeration (HVAC&R) systems and solutions. York designs,
manufactures, sells, and services HVAC systems for commercial
and residential markets; gas-compression equipment for
industrial processing; industrial and commercial refrigeration
equipment; and compressors for residential and commercial
air-conditioning.
S-2
Risk factors
Before you decide to invest in the Notes, you should consider
the factors set forth below as well as the risk factors
discussed in our Form 8-K filing with the Securities and
Exchange Commission dated January 9, 2006 as incorporated
by reference into this prospectus supplement and the
accompanying prospectus. See Where You Can Find More
Information.
Risks Related to the Notes
An increase in market interest rates could result in a
decrease in the value of any notes bearing interest at a fixed
rate.
In general, as market interest rates rise, notes bearing
interest at a fixed rate generally decline in value because the
premium, if any, over market interest rates will decline.
Consequently, if you purchase fixed rate notes and market
interest rates increase, the market value of your notes may
decline. We cannot predict the future level of market interest
rates.
Ratings of each series of notes may not reflect all risks
of an investment in the notes.
Each series of notes will be rated by at least one nationally
recognized statistical rating organization. The ratings of our
notes will primarily reflect our financial strength and will
change in accordance with the rating of our financial strength.
Any rating is not a recommendation to purchase, sell or hold any
particular security, including the notes. These ratings do not
comment as to market price or suitability for a particular
investor. In addition, ratings at any time may be lowered or
withdrawn in their entirety. The ratings of each series of notes
may not reflect the potential impact of all risks related to
structure and other factors on any trading market for, or
trading value of, your notes.
There may be no public trading market for the
notes.
We have not applied and do not intend to apply for listing of
the notes on any securities exchange or any automated quotation
system. As a result, a market for the notes may not develop or,
if one does develop, it may not be maintained. If an active
market for the notes fails to develop or be sustained, the
trading price and liquidity of the notes could be adversely
affected.
If you are able to resell your notes, many other factors
may affect the price you receive, which may be lower than you
believe to be appropriate.
If you are able to resell your notes, the price you receive will
depend on many other factors that may vary over time, including:
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our financial performance; |
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the amount of indebtedness we have outstanding; |
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the market for similar securities; |
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market interest rates; |
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the redemption and repayment features of the notes to be sold;
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the time remaining to maturity of your notes. |
As a result of these factors, you may only be able to sell your
notes at prices below those you believe to be appropriate,
including prices below the price you paid for them.
S-3
The notes do not restrict our ability to incur additional
debt or prohibit us from taking other action that could
negatively impact holders of the notes.
We are not restricted under the terms of the indenture or the
notes from incurring additional indebtedness. The terms of the
indenture limit our ability to secure additional debt without
also securing the notes, to enter into sale and leaseback
transactions and to transfer certain of our assets to
unrestricted subsidiaries. However, these limitations are
subject to numerous exceptions. See Description of Debt
Securities Covenants Applicable to Senior Debt
Securities in the accompanying prospectus. In addition,
the notes do not require us to achieve or maintain any minimum
financial results relating to our financial position or results
of operations. Our ability to recapitalize, incur additional
debt, secure existing or future debt or take a number of other
actions that are not limited by the terms of the indenture and
the notes, including repurchasing subordinated indebtedness or
common stock or to transfer assets to our parent if we were to
form a holding company, could have the effect of diminishing our
ability to make payments on the notes when due.
Our financial performance and other factors could
adversely impact our ability to make payments on the
notes.
Our ability to make scheduled payments with respect to our
indebtedness, including the notes, will depend on our financial
and operating performance, which, in turn, is subject to
prevailing economic conditions and to financial, business and
other factors beyond our control.
Effective subordination of the notes may reduce amounts
available for payment of the notes.
The notes will be unsecured. As of December 31, 2005, we
had no secured debt outstanding. The holders of any secured debt
that we may have in the future may foreclose on our assets
securing our debt, reducing the cash flow from the foreclosed
property available for payment of unsecured debt. The holders of
any secured debt that we may have also would have priority over
unsecured creditors in the event of our liquidation. In the
event of our bankruptcy, liquidation or similar proceeding, the
holders of secured debt that we may have would be entitled to
proceed against their collateral, and that collateral will not
be available for payment of unsecured debt, including the notes.
As a result, the notes will be effectively subordinated to any
of our secured debt that we may have.
Our corporate structure could impact amounts available for
payment of the notes.
The notes will be effectively subordinated to the indebtedness
and other liabilities of our subsidiaries. As of
September 30, 2005, our subsidiaries had debt owing to
third parties of approximately $498.4 million. In addition,
we consider from time to time the appropriate corporate
structure for Johnson Controls and its subsidiaries and intend
to continue to explore the possibility of forming a holding
company. If we were to form a holding company, we anticipate
that it generally would assume responsibility for indebtedness
of Johnson Controls for borrowed money, including our
obligations under the notes. However, if that is not the case,
then the transfer of the assets to the parent as part of the
formation of the holding company could reduce the assets and
cash flow available to the holders of the notes. By its nature,
a holding company does not have significant direct operations or
related assets, and its principal assets are its
subsidiaries shares. Consequently, a holding company
depends on dividends, debt, interest and other payments from its
subsidiaries to make payments on its obligations as they become
due. To the extent we implement a holding company structure, it
is our intention that such action, on its own, would not have a
material adverse impact on the noteholders.
S-4
Cautionary statement about forward-looking statements
We have made forward-looking statements in this prospectus
supplement that are based on preliminary data and are subject to
risks and uncertainties. All statements other than statements of
historical fact are statements that are or could be deemed
forward-looking statements, including information concerning
possible or assumed future risks. For those statements, we
caution that numerous important factors, such as the integration
of the acquisition of York International Corporation, automotive
vehicle production levels and schedules, the ability to increase
prices to offset higher raw material costs, the strength of the
U.S. or other economies, currency exchange rates, our effective
tax rate, cancellation of commercial contracts, as well as those
factors discussed in our Form 8-K filing with the
Securities and Exchange Commission (dated January 9, 2006),
could affect our actual results and could cause our actual
consolidated results to differ materially from those expressed
in any forward-looking statement made by us or on our behalf.
S-5
Use of proceeds
We will use the net proceeds that we receive from the sale of
the notes, which will be approximately $2.479 billion,
after deducting underwriting discounts and our offering
expenses, to refinance a significant portion of our commercial
paper obligations issued to finance the acquisition of York
International Corporation. Those commercial paper obligations
bear interest at an average rate of 4.40% and have maturities of
less than 30 days. Pending such use, we will invest the net
proceeds in short-term, interest-bearing securities.
S-6
Description of the notes
General
For purposes of the accompanying prospectus, the notes are
Senior Debt Securities. We refer you to the
description of Senior Debt Securities in the prospectus, which
you should read carefully. The following description of the
particular terms of each series of notes offered by this
prospectus supplement supplements, and to the extent
inconsistent with the description in the accompanying prospectus
replaces, that description. The notes of each series will be
issued under an Indenture, dated as of January 17, 2006
(the Senior Indenture), between us and JPMorgan
Chase Bank, National Association, a national banking
association. JPMorgan Chase Bank, National Association will be
the trustee for the notes. Except as otherwise defined in this
prospectus supplement, capitalized terms used in this prospectus
supplement have the meanings specified in the accompanying
prospectus. The notes of each series will be issued in the form
of one or more fully registered global securities which will be
deposited with, or on behalf of, The Depository
Trust Company, or DTC, as the depositary, and registered in
the name of the depositarys nominee. See
Delivery and Form below and Description of Debt
Securities Book Entry Delivery and Settlement in the
accompanying prospectus.
Principal Amount; Maturity
Floating Rate Notes
We will issue a total of $500,000,000 initial principal amount
of floating rate notes. The floating rate notes will mature on
January 17, 2008. We may, without the consent of the
holders, reopen the series of floating rate notes
and issue more floating rate notes that have the same ranking,
interest rate, maturity date and other terms as the floating
rate notes being offered by this prospectus supplement. These
additional floating rate notes, together with the floating rate
notes offered by this prospectus supplement, will constitute a
single series of debt securities under the Senior Indenture.
Fixed Rate Notes
We will issue three series of fixed rate notes. We will issue a
total of $800,000,000 initial principal amount of fixed rate
notes that will mature on January 15, 2011 (the 2011
Fixed Rate Notes), $800,000,000 initial principal amount
of fixed rate notes that will mature on January 15, 2016
(the 2016 Fixed Rate Notes), and $400,000,000
initial principal amount of fixed rate notes that will mature on
January 15, 2036 (the 2036 Fixed Rate Notes,
and, together with the 2011 Fixed Rate Notes and the 2016 Fixed
Rate Notes, the Fixed Rate Notes). We may, without
the consent of the holders, reopen any series of
Fixed Rate Notes and issue more fixed rate notes of that series
that have the same ranking, interest rate, maturity date and
other terms as the Fixed Rate Notes being offered by this
prospectus supplement. These additional fixed rate notes,
together with the Fixed Rate Notes of that series offered by
this prospectus supplement, will constitute a single series of
debt securities under the Senior Indenture.
Interest
Floating Rate Notes
The floating rate notes will bear interest at a floating
interest rate from January 17, 2006, payable quarterly in
arrears on January 17, April 17, July 17, and
October 17 of each year and on the date of maturity.
Interest will be paid to the person in whose name the floating
rate notes are registered at the close of business on the
fifteenth calendar day prior to the interest payment date. The
initial interest payment date will be April 17, 2006.
Interest payable on any interest payment date or on the date of
maturity will be the amount of interest accrued from and
S-7
including the date of original issuance or from and including
the most recent interest payment date on which interest has been
paid or duly made available for payment to but excluding the
interest payment date or the date of maturity, as the case may
be.
The interest rate for the initial interest period will be the
three-month London Interbank offer rate (LIBOR),
determined as described in Description of Debt
Securities General Floating Rate Notes in the
accompanying prospectus, on January 17, 2006, plus
23 basis points. The interest rate on the floating rate
notes for each subsequent interest period will be reset
quarterly on each interest payment date. The floating rate notes
will bear interest at an annual rate (computed on the basis of
the actual number of days elapsed over a 360-day year) equal to
LIBOR plus 23 basis points.
See Description of Debt Securities General
Floating Rate Note in the accompanying prospectus for a
discussion about the payment of principal and interest, at
maturity or any interest payment date, on a day that is not a
LIBOR Business Day.
Fixed Rate Notes
The 2011 Fixed Rate Notes will bear interest at an annual rate
of 5.250% per year. The 2016 Fixed Rate Notes will bear interest
at an annual rate of 5.500% per year. The 2036 Fixed Rate Notes
will bear interest at an annual rate of 6.000% per year. Each
series of Fixed Rate Notes will bear interest from
January 17, 2006. Interest is payable semiannually on
January 15 and July 15 and on the date of maturity to
holders of record at the close of business on the January 1
and July 1 (whether or not that date is a business day), as
the case may be, immediately preceding such interest payment
date. If the date of maturity of a series of Fixed Rate Notes
falls on a day that is not a business day, the related payment
of principal and interest of that series 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. The first interest payment date on each series of Fixed
Rate Notes will be July 15, 2006. If any interest payment
date would otherwise be a day that is not a business day, that
interest payment date will be postponed to the next date that is
a business day.
Optional Redemption
Floating Rate Notes
The floating rate notes will not be redeemable prior to maturity.
Fixed Rate Notes
Each of the 2011 Fixed Rate Notes, the 2016 Fixed Rate Notes and
the 2036 Fixed Rate Notes are redeemable, in whole at any time
or in part from time to time, at our option at a redemption
price equal to the greater of (1) 100% of the principal
amount of the fixed rate notes, and (2) the sum of the
present values of the remaining scheduled payments of principal
and interest on the fixed rate notes to be redeemed (not
including any portion of such payments of interest accrued to
the date of redemption) discounted to the date of redemption on
a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the applicable Treasury Rate (as
defined in Description of Debt Securities Optional
Redemption in the accompanying prospectus), plus
15 basis points with respect to the 2011 Fixed Rates Notes,
20 basis points with respect to the 2016 Fixed Rates Notes,
and 25 basis points with respect to the 2036 Fixed Rates
Notes, plus in each case accrued and unpaid interest on the
principal amount being redeemed to the redemption date. Please
see Description of Debt Securities Optional
Redemption in the accompanying prospectus for a further
description of the redemption features of each series of notes.
S-8
Defeasance
The defeasance provisions of Section 13.02 of the Indenture
will apply to each series of notes. See Description of
Debt Securities Defeasance, Satisfaction and Discharge or
Redemption Defeasance of Any Series in the
accompanying prospectus.
Same-Day Settlement and Payment
Settlement for the notes will be made in same-day funds. All
payments of principal and interest will be made by us in
immediately available funds. To the extent any notes are held by
DTC, such notes will trade in DTCs Same-Day Funds
Settlement System until maturity, and therefore DTC will require
secondary trading activity in the notes to be settled in
immediately available funds. Please see Description of
Debt Securities Book Entry Delivery and Form in the
accompanying prospectus for a further description of book entry
procedures.
Delivery and Form
Each series of notes will be represented by one or more
permanent global certificates (each a Global Note
and collectively, the Global Notes) deposited with,
or on behalf of, DTC and registered in the name of Cede &
Co. (DTCs partnership nominee). Each series of notes will
be available for purchase in denominations of $2,000 and
integral multiples of $1,000 in book-entry form only. Unless and
until certificated notes are issued under the limited
circumstances described in the accompanying prospectus, no
beneficial owner of a note shall be entitled to receive a
definitive certificate representing a note. So long as DTC or
any successor depositary (collectively, the
Depositary) or its nominee is the registered owner
of the Global Notes, the Depositary, or such nominee, as the
case may be, will be considered to be the sole owner or holder
of the senior notes for all purposes of the Senior Indenture.
Beneficial interests in the Global Notes will be represented
through book-entry accounts of financial institutions acting on
behalf of beneficial owners as direct and indirect participants
in DTC. Investors may elect to hold interests in the Global
Notes through DTC either directly if they are participants in
DTC or indirectly through organizations that are participants in
DTC.
Clearstream. Clearstream Banking, S.A. 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 Clearstream Participants with, among other things,
services for safekeeping, administration, clearance and
establishment of internationally traded securities and
securities lending and borrowing. Clearstream interfaces with
domestic markets in several countries. As a professional
depositary, Clearstream is subject to regulation by the
Luxembourg Monetary Institute. Clearstream Participants are
recognized financial institutions around the world, including
underwriters, securities brokers and dealers, banks, trust
companies, clearing corporations and certain other
organizations, and may include the underwriters. Indirect access
to Clearstream is also available to others, such as banks,
brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Clearstream Participant
either directly or indirectly.
Distributions with respect to notes held beneficially through
Clearstream will be credited to cash accounts of Clearstream
Participants in accordance with its rules and procedures to the
extent received by the U.S. Depositary for Clearstream.
Euroclear. Euroclear Bank SP./N.V. 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
S-9
eliminating the need for physical movement of certificates and
any risk from lack of simultaneous transfers of securities and
cash. Euroclear includes various other services, including
securities lending and borrowing and interfaces with domestic
markets in several markets in several countries. Euroclear is
operated by Euroclear Bank S.A./ N.V. (the Euroclear
Operator), under contract with Euro-clear Clearance
Systems S.C., a Belgian cooperative corporation (the
Cooperative). 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 the Cooperative. The Cooperative
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 and may include the
underwriters. 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 regulated and examined by the Belgian
Banking Commission.
Links have been established among DTC, Clearstream and Euroclear
to facilitate the initial issuance of the senior notes sold
outside of the United States and cross-market transfers of the
senior notes associated with secondary market trading.
Although DTC, Clearstream and Euroclear have agreed to the
procedures provided below in order to facilitate transfers, they
are under no obligation to perform these procedures, and these
procedures may be modified or discontinued at any time.
Clearstream and Euroclear will record the ownership interests of
their participants in much the same way as DTC, and DTC will
record the total ownership of each of the U.S. agents of
Clearstream and Euroclear, as participants in DTC. When notes
are to be transferred from the account of a DTC participant to
the account of a Clearstream participant or a Euroclear
participant, the purchaser must send instructions to Clearstream
or Euroclear through a participant at least one day prior to
settlement. Clearstream or Euroclear, as the case may be, will
instruct its U.S. agent to receive senior notes against payment.
After settlement, Clearstream or Euroclear will credit its
participants account. Credit for the notes will appear on
the next day (European time).
Because settlement is taking place during New York business
hours, DTC participants will be able to employ their usual
procedures for sending notes to the relevant U.S. agent acting
for the benefit of Clearstream or Euroclear participants. The
sale proceeds will be available to the DTC seller on the
settlement date. As a result, to the DTC participant, a
cross-market transaction will settle no differently than a trade
between two DTC participants.
When a Clearstream or Euroclear participant wishes to transfer
notes to a DTC participant, the seller will be required to send
instructions to Clearstream or Euroclear through a participant
at least one business day prior to settlement. In these cases,
Clearstream or Euroclear will instruct its U.S. agent to
transfer these notes against payment for them. The payment will
then be reflected in the account of the Clearstream or Euroclear
participant the following day, with the proceeds back valued to
the value date, which would be the preceding day, when
settlement occurs in New York, if settlement is not completed on
the intended value date, that is, the trade fails, proceeds
credited to the Clearstream or Euroclear participants
account will instead be valued as of the actual settlement date.
You should be aware that you will only be able to make and
receive deliveries, payments and other communications involving
the senior notes through Clearstream and Euroclear on the days
when those clearing systems are open for business. Those systems
may not be open for business on days when banks, brokers and
other institutions are open for business in the United States.
In addition, because of time zone differences there may be
problems with completing transactions involving Clearstream and
Euroclear on the same business day as in the United States.
S-10
Material U.S. federal income tax considerations
This discussion is of a general nature and is included herein
solely for information purposes. This summary is not intended to
be, and should not be, construed to be legal or tax advice. No
representation with respect to the consequences to any
particular purchaser of the notes is made. Prospective
purchasers should consult their own advisors with respect to
their particular circumstances.
The following is a summary of the material U.S. federal income
tax consequences to U.S. Holders and Non-U.S. Holders (as
defined below) relating to the purchase, ownership and
disposition of the notes. This discussion is based upon current
provisions of the Internal Revenue Code of 1986, as amended (the
Internal Revenue Code), existing and proposed
Treasury regulations promulgated thereunder, rulings,
pronouncements, judicial decisions and administrative
interpretations of the Internal Revenue Service, all of which
are subject to change, possibly on a retroactive basis, at any
time by legislative, judicial or administrative action. We
cannot assure you that the Internal Revenue Service will not
challenge the conclusions stated below, and no ruling from the
Internal Revenue Service has been (or will be) sought on any of
the matters discussed below.
The following discussion does not purport to be a complete
analysis of all the potential U.S. federal income tax effects
relating to the purchase, ownership, and disposition of the
notes. Without limiting the generality of the foregoing, the
discussion does not address the effect of any special rules
applicable to certain types of holders, including, without
limitation, dealers in securities or currencies, insurance
companies, financial institutions, thrifts, regulated investment
companies, tax-exempt entities, U.S. persons whose functional
currency is not the U.S. dollar, U.S. expatriates, persons who
hold notes as part of a straddle, hedge, conversion transaction,
or other risk reduction or integrated investment transaction,
investors in securities that elect to use a mark-to-market
method of accounting for their securities holdings, individual
retirement accounts or qualified pension plans, or investors in
pass through entities, including partnerships and Subchapter S
corporations. In addition, this discussion is limited to holders
who are the initial purchasers of the notes at their original
issue price and hold the notes as capital assets within the
meaning of Section 1221 of the Internal Revenue Code. This
discussion does not address the effect of any U.S. state or
local income or other tax laws, any U.S. federal estate and gift
tax laws, any foreign tax laws, or any tax treaties.
The discussion of federal tax issues in this prospectus
supplement is written in connection with the promotion or
marketing of the transactions addressed herein and is not
intended or written to be relied upon, and cannot be relied
upon, by holders of notes for the purpose of avoiding penalties
that may be imposed on such holders under the Internal Revenue
Code. Holders of notes should seek advice based on their
particular circumstances from an independent tax advisor.
U.S. Holders
The term U.S. Holder means a beneficial owner of a
note that is:
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an individual who is a citizen of the United States or who is a
resident alien of the United States for U.S. federal income tax
purposes; |
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a corporation or other entity taxable for U.S. federal income
tax purposes as a corporation created or organized in or under
the laws of the United States, any state thereof or the District
of Columbia; |
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an estate the income of which is subject to U.S. federal income
taxation regardless of its source; or |
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a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one
or more U.S. persons have the authority to control all |
S-11
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substantial decisions of the trust, or if a valid election is in
effect under applicable Treasury regulations to be treated as a
U.S. person. |
Taxation of interest
All of the notes bear interest at a fixed-rate or will bear
interest at a floating rate that is either a qualified floating
rate or an objective rate under the rules regarding original
issue discount. Moreover, we do not intend to issue the notes at
a discount that will exceed a de minimis amount of original
issue discount. Accordingly, interest on a note will generally
be includable in income of a U.S. Holder as ordinary income at
the time the interest is received or accrued, in accordance with
the holders regular method of accounting for U.S. federal
income tax purposes.
Sale, exchange, or retirement of a note
A U.S. Holder will generally recognize capital gain or loss on a
sale, exchange, redemption, retirement or other taxable
disposition of a note measured by the difference, if any, between
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the amount of cash and the fair market value of any property
received, except to the extent that the cash or other property
received in respect of a note is attributable to accrued
interest on the note not previously included in income, which
amount will be taxable as ordinary income; and |
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the holders adjusted tax basis in the note. |
Such capital gain or loss will be treated as a long-term capital
gain or loss if, at the time of the sale or exchange, the note
has been held by the holder for more than one year; otherwise,
the capital gain or loss will be short-term. Non-corporate
taxpayers may be subject to a lower federal income tax rate on
their net long-term capital gains than that applicable to
ordinary income. All taxpayers are subject to certain
limitations on the deductibility of their capital losses.
In addition, a U.S. holder will generally recognize capital gain
or loss on the defeasance of a note.
Information reporting and backup withholding
U.S. Holders of notes may be subject, under certain
circumstances, to information reporting and backup withholding
(currently at a rate of 28%) on payments of interest, principal,
gross proceeds from disposition of notes, and redemption
premium, if any. Backup withholding generally applies only if
the U.S. Holder:
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fails to furnish its social security or other taxpayer
identification number within a reasonable time after a request
for such information; |
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furnishes an incorrect taxpayer identification number; |
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fails to report interest properly; or |
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fails, under certain circumstances, to provide a certified
statement, signed under penalty of perjury, that the taxpayer
identification number provided is its correct number and that
the U.S. Holder is not subject to backup withholding. |
Backup withholding is not an additional tax. Any amount withheld
from a payment to a U.S. Holder under the backup withholding
rules is allowable as a credit against such U.S. Holders
U.S. federal income tax liability and may entitle such holder to
a refund provided such holder furnishes the required information
to the Internal Revenue Service. Certain persons are exempt from
backup withholding, including corporations and financial
institutions. U.S. Holders of notes should consult their tax
advisors as to their qualification for exemption from backup
withholding and the procedure for obtaining such exemption. We
cannot refund amounts once withheld.
S-12
We will furnish annually to the Internal Revenue Service, and to
record holders of the notes to whom we are required to furnish
such information, information relating to the amount of interest
paid and the amount of backup withholding, if any, with respect
to payments on the notes.
Non-U.S. Holders
The following summary is limited to the U.S. federal income tax
consequences relevant to a beneficial owner of a note who is not
classified as a partnership for U.S. federal income tax purposes
and who is not a U.S. Holder (a Non-U.S. Holder). In
the case of a Non-U.S. Holder who is an individual, the
following summary assumes that this individual was not formerly
a United States citizen, and was not formerly a resident of the
United States for U.S. federal income tax purposes.
Taxation of interest
Subject to the summary of backup withholding rules below,
payments of interest on a note to any Non-U.S. Holder will not
generally be subject to U.S. federal income or withholding tax
provided we or the person otherwise responsible for withholding
U.S. federal income tax from payments on the notes receives a
required certification from the Non-U.S. Holder and the holder
is not:
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an actual or constructive owner of 10% or more of the total
combined voting power of all our voting stock; |
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a controlled foreign corporation related, directly or
indirectly, to us through stock ownership; or |
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a bank receiving interest described in Section 881(c)(3)(A)
of the Internal Revenue Code; or |
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receiving such interest payments as income effectively connected
with the conduct by the Non-U.S. Holder of a trade or business
within the United States. |
In order to satisfy the certification requirement, the Non-U.S.
Holder must provide a properly completed Internal Revenue
Service Form W-8BEN (or substitute Form W-8BEN or the
appropriate successor form) under penalties of perjury that
provides the Non-U.S. Holders name and address and
certifies that the Non-U.S. Holder is not a U.S. person.
Alternatively, in a case where a security clearing organization,
bank or other financial institution holds the notes in the
ordinary course of its trade or business on behalf of the
Non-U.S. Holder, certification requires that we or the person
who otherwise would be required to withhold U.S. federal income
tax receive from the financial institution a certification under
penalties of perjury that a properly completed Form W-8BEN
(or substitute Form W-8BEN or the appropriate successor
form) has been received by it, or by another such financial
institution, from the Non-U.S. Holder, and a copy of such a form
is furnished to the payor. Special rules apply to foreign
partnerships, estates and trusts, and in certain circumstances,
certifications as to foreign status of partners, trust owners,
or beneficiaries may have to be provided to our paying agent or
to us. In addition, special rules apply to payments made through
a qualified intermediary.
A Non-U.S. Holder that does not qualify for exemption from
withholding under the preceding paragraphs generally will be
subject to withholding of U.S. federal income tax at the rate of
30%, or lower applicable treaty rate, on payments of interest on
the notes that are not effectively connected with the conduct by
the Non-U.S. Holder of a trade or business in the United States.
If the payments of interest on a note are effectively connected
with the conduct by a Non-U.S. Holder of a trade or business in
the United States, such payments will be subject to U.S. federal
income tax on a net basis at the rates applicable to U.S.
persons generally. If the Non-U.S. Holder is a corporation for
U.S. federal income purposes, such payments also may be subject
to a 30% branch profits tax. If payments are subject to U.S.
federal income tax on a net basis in accordance with the rules
described in the preceding two sentences, such payments will not
be subject to U.S.
S-13
withholding tax so long as the holder provides us, or the person
who otherwise would be required to withhold U.S. federal income
tax, with the appropriate certification.
Non-U.S. Holders should consult their tax advisors regarding any
applicable income tax treaties, which may provide for a lower
rate of withholding tax, exemption from or reduction of branch
profits tax, or other rules different from those described above.
Sale, exchange, or disposition
Subject to the summary of backup withholding rules below, any
gain realized by a Non-U.S. Holder on the sale, exchange,
retirement or other disposition of a note generally will not be
subject to U.S. federal income tax, unless:
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such gain is effectively connected with the conduct by such
Non-U.S. Holder of a trade or business within the United States;
or |
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the Non-U.S. Holder is an individual who is present in the
United States for 183 days or more in the taxable year of
the disposition and certain other conditions are satisfied. |
Proceeds from the disposition of a note that are attributable to
accrued but unpaid interest generally will be subject to, or
exempt from, tax to the same extent as described above with
respect to interest paid on a note, although such proceeds
generally are not subject to withholding tax.
Information reporting and backup withholding
Any payments of interest to a Non-U.S. Holder will generally be
reported to the Internal Revenue Service and to the Non-U.S.
Holder. Copies of these information returns also may be made
available under the provisions of a specific treaty or other
agreement to the tax authorities of the country in which the
Non-U.S. Holder resides.
The backup withholding tax and certain additional information
reporting generally will not apply to payments of interest with
respect to which either the requisite certification, as
described above, has been received or an exemption otherwise has
been established, provided that neither we nor the person who
otherwise would be required to withhold U.S. federal income tax
has actual knowledge or reason to know that the holder is, in
fact, a U.S. person or that the conditions of any other
exemption are not, in fact, satisfied.
The payment of the proceeds from the disposition of the notes by
or through the U.S. office of any broker, U.S. or foreign, will
be subject to information reporting and backup withholding
unless the holder certifies as to its non-U.S. status under
penalties of perjury or otherwise establishes an exemption,
provided that the broker does not have actual knowledge or
reason to know that the holder is a U.S. person or that the
conditions of any other exemption are not, in fact, satisfied.
The payment of the proceeds from the disposition of the notes by
or through a non-U.S. office of a non-U.S. broker will not be
subject to information reporting or backup withholding unless
the non-U.S. broker has certain types of relationships with the
United States (a U.S. related person). In the case
of the payment of the proceeds from the disposition of the notes
by or through a non-U.S. office of a broker that is either a
U.S. person or a U.S. related person, the Treasury regulations
require information reporting, but not backup withholding, on
the payment unless the broker has documentary evidence in its
files that the owner is a Non-U.S. Holder and the broker has no
knowledge or reason to know to the contrary.
Backup withholding is not an additional tax. Any amounts
withheld under the backup withholding rules may be refunded or
credited against the Non-U.S. Holders U.S. federal income
tax liability provided such holder furnishes the required
information to the Internal Revenue Service.
S-14
Underwriting
Subject to the terms and conditions set forth in the
Underwriting Agreement dated the date hereof, we have agreed to
sell to each of the underwriters named below, severally, and
each of the underwriters has severally agreed to purchase, the
principal amount of each series of notes set forth opposite its
name below:
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Principal Amount | |
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Principal Amount | |
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Principal Amount | |
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Principal Amount | |
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of Floating Rate | |
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of 2011 Fixed | |
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of 2016 Fixed | |
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of 2036 Fixed | |
Underwriter |
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Notes | |
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Rate Notes | |
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Rate Notes | |
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Rate Notes | |
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Banc of America Securities LLC
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$ |
135,000,000 |
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$ |
216,000,000 |
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$ |
216,000,000 |
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$ |
108,000,000 |
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Citigroup Global Markets
Inc.
|
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135,000,000 |
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216,000,000 |
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216,000,000 |
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108,000,000 |
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J.P. Morgan Securities
Inc.
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110,000,000 |
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176,000,000 |
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176,000,000 |
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88,000,000 |
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Barclays Capital Inc.
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35,000,000 |
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56,000,000 |
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56,000,000 |
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28,000,000 |
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Commerzbank Capital Markets
Corp.
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15,000,000 |
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24,000,000 |
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24,000,000 |
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12,000,000 |
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ING Financial Markets LLC
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15,000,000 |
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24,000,000 |
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24,000,000 |
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12,000,000 |
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Piper Jaffray & Co.
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15,000,000 |
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24,000,000 |
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24,000,000 |
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12,000,000 |
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Wells Fargo Securities, LLC
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15,000,000 |
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24,000,000 |
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24,000,000 |
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12,000,000 |
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LaSalle Financial Services,
Inc.
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6,250,000 |
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10,000,000 |
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10,000,000 |
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5,000,000 |
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Calyon Securities (USA)
Inc.
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6,250,000 |
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10,000,000 |
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10,000,000 |
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5,000,000 |
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KBC Financial Products USA
Inc.
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6,250,000 |
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10,000,000 |
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10,000,000 |
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5,000,000 |
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TD Securities (USA) LLC
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6,250,000 |
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10,000,000 |
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10,000,000 |
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5,000,000 |
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Total
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$ |
500,000,000 |
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$ |
800,000,000 |
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$ |
800,000,000 |
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$ |
400,000,000 |
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The Underwriting Agreement provides that the obligations of the
underwriters to purchase each series of notes in this offering
are subject to approval of legal matters by counsel and to other
conditions. If the underwriters take any of the notes of any
series, then the underwriters are obligated to take and pay for
all of the notes of that series.
The underwriters initially propose to offer a portion of the
notes of each series directly to the public at the offering
prices described on the cover page of this prospectus supplement
and part to certain dealers at a price that represents a
concession not in excess of .150% of the principal amount of the
floating rate notes, and .350% of the principal amount of the
2011 Fixed Rate Notes, .400% of the principal amount of the 2016
Fixed Rate Notes and .500% of the principal amount of the 2036
Fixed Rate Notes. Any underwriter may allow, and any such dealer
may reallow, a concession not in excess of .100% of the
principal amount of the floating rate notes, and .225% of the
principal amount of the 2011 Fixed Rate Notes, .250% of the
principal amount of the 2016 Fixed Rate Notes and .250% of the
principal amount of the 2036 Fixed Rate Notes to certain other
dealers. After the initial offering of the notes, the
underwriters may from time to time vary the offering prices and
other selling terms.
We have also agreed to indemnify the underwriters against
certain liabilities, including liabilities under the Securities
Act of 1933, as amended, or to contribute to payments which the
underwriters may be required to make in respect of any such
liabilities.
The notes of each series are a new issue of securities with no
established trading market and will not be listed on any
national securities exchange. The underwriters have advised us
that they intend to make a market in the notes each of series,
but they have no obligation to do so and may discontinue any
market making activities at any time without providing notice.
No assurance can be given as to the liquidity of any trading
market for any series of notes.
In connection with the offering of each series of notes, the
underwriters may engage in transactions that stabilize, maintain
or otherwise affect the price of such notes. Specifically, the
underwriters may overallot in connection with the offering of
such notes, creating a short position.
S-15
In addition, the underwriters may bid for, and purchase, notes
in the open market to cover syndicate short positions or to
stabilize the price of such notes. Finally, the underwriting
syndicate may reclaim selling concessions allowed for
distributing such notes in the offering of the notes, if the
syndicate repurchases previously distributed notes in syndicate
covering transactions, stabilization transactions or otherwise.
Any of these activities may stabilize or maintain the market
price of such notes above independent market levels. The
underwriters are not required to engage in any of these
activities and may end any of them at any time.
We expect to deliver the securities against payment therefor on
or about January 17, 2006, which will be the fifth business
day following the date of this prospectus supplement and of the
pricing of the securities. Under
Rule 15c6-1 of the
Exchange Act, trades in the secondary market generally are
required to settle in three business days, unless the parties to
any such trade expressly agree otherwise. Accordingly,
purchasers who wish to trade securities on the pricing date or
the next succeeding business day will be required, by virtue of
the fact that the securities initially will settle in five
business days (T+5), to specify alternative settlement
arrangements to prevent a failed settlement.
Each underwriter has agreed that it will not offer, sell or
deliver any of the notes, directly or indirectly, or distribute
the final prospectus or any other offering material relating to
the notes, in or from any jurisdiction except under
circumstances that will, to the knowledge and belief of such
underwriter, result in compliance with the applicable laws and
regulations thereof and that will not impose any obligations on
us except as set forth in the Underwriting Agreement.
In relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive (each, a
Relevant Member State), each underwriter has
represented and agreed that, with effect from and including the
date on which the Prospectus Directive is implemented in that
Relevant Member State (the Relevant Implementation
Date), it has not made and will not make an offer of any
series of notes to the public in that Relevant Member State
prior to the publication of a prospectus in relation to such
notes that has been approved by the competent authority in that
Relevant Member State or, where appropriate, approved in another
Relevant Member State and notified to the competent authority in
that Relevant Member State, all in accordance with the
Prospectus Directive, except that it may, with effect from and
including the Relevant Implementation Date, make an offer of
notes to the public in that Relevant Member State at any time:
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(a) to legal entities which are authorized or regulated to
operate in the financial markets or, if not so authorized or
regulated, whose corporate purpose is solely to invest in
securities; |
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(b) to any legal entity which has two or more of
(1) an average of at least 250 employees during the last
financial year; (2) a total balance sheet of more than
43,000,000 and
(3) an annual net turnover of more than
50,000,000, as shown
in its last annual or consolidated accounts; or |
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(c) in any other circumstances which do not require the
publication by us of a prospectus pursuant to Article 3 of
the Prospectus Directive. |
For the purposes of this provision, the expression an
offer of notes to the public in relation to any
series of notes in any Relevant Member State means the
communication in any form and by any means of sufficient
information on the terms of the offer and the notes to be
offered so as to enable an investor to decide to purchase or
subscribe the notes, as the same may be varied in that Member
State by any measure implementing the Prospectus Directive in
that Member State and the expression Prospectus Directive means
Directive 2003/71/ EC and includes any relevant implementing
measure in each Relevant Member State.
S-16
Each underwriter has represented and agreed that:
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(a) it has only communicated or caused to be communicated
and will only communicate or cause to be communicated an
invitation or inducement to engage in investment activity
(within the meaning of Section 21 of the Financial Services
and Markets Act 2000 (FSMA)) received by it in
connection with the issue or sale of the notes in circumstances
in which Section 21(1) of the FSMA does not apply to
Johnson Controls, Inc.; and |
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(b) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in
relation to the notes in, from or otherwise involving the United
Kingdom. |
No series of notes may be offered or sold by means of any
document other than to persons whose ordinary business is to buy
or sell shares or debentures, whether as principal or agent, or
in circumstances which do not constitute an offer to the public
within the meaning of the Companies Ordinance (Cap. 32) of Hong
Kong, and no advertisement, invitation or document relating to
the any series of notes may be issued, whether in Hong Kong or
elsewhere, which is directed at, or the contents of which are
likely to be accessed or read by, the public in Hong Kong
(except if permitted to do so under the securities laws of Hong
Kong) other than with respect to notes which are or are intended
to be disposed of only to persons outside Hong Kong or only to
professional investors within the meaning of the
Securities and Futures Ordinance (Cap. 571) of Hong Kong and any
rules made thereunder.
The securities have not been and will not be registered under
the Securities and Exchange Law of Japan (the Securities and
Exchange Law) and each underwriter has agreed that it will not
offer or sell any securities, directly or indirectly, in Japan
or to, or for the benefit of, any resident of Japan (which term
as used herein means any person resident in Japan, including any
corporation or other entity organized under the laws of Japan),
or to others for re-offering or resale, directly or indirectly,
in Japan or to a resident of Japan, except pursuant to an
exemption from the registration requirements of, and otherwise
in compliance with, the Securities and Exchange Law and any
other applicable laws, regulations and ministerial guidelines of
Japan.
This prospectus supplement has not been registered as a
prospectus with the Monetary Authority of Singapore.
Accordingly, this prospectus supplement and any other document
or material in connection with the offer or sale, or invitation
for subscription or purchase, of any series of notes may not be
circulated or distributed, nor may the notes be offered or sold,
or be made the subject of an invitation for subscription or
purchase, whether directly or indirectly, to persons in
Singapore other than (i) to an institutional investor under
Section 274 of the Securities and Futures Act,
Chapter 289 of Singapore (the SFA),
(ii) to a relevant person, or any person pursuant to
Section 275(1A), and in accordance with the conditions,
specified in Section 275 of the SFA or (iii) otherwise
pursuant to, and in accordance with the conditions of, any other
applicable provision of the SFA.
Where any series of notes are subscribed or purchased under
Section 275 by a relevant person which is: (a) a
corporation (which is not an accredited investor) the sole
business of which is to hold investments and the entire share
capital of which is owned by one or more individuals, each of
whom is an accredited investor; or (b) a trust (where the
trustee is not an accredited investor) whose sole purpose is to
hold investments and each beneficiary is an accredited investor,
shares, debentures and units of shares and debentures of that
corporation or the beneficiaries rights and interest in
that trust shall not be transferable for 6 months after
that corporation or that trust has acquired the notes under
Section 275 except: (1) to an institutional investor
under Section 274 of the SFA or to a relevant person, or
any person pursuant to Section 275(1A), and in accordance
with the conditions, specified in Section 275 of the SFA;
(2) where no consideration is given for the transfer; or
(3) by operation of law.
S-17
Expenses associated with this offering, to be paid by us, are
estimated to be $250,000. The underwriters have agreed to
reimburse us for certain of our expenses in connection with this
offering.
In the ordinary course of their respective businesses, the
underwriters or their affiliates have engaged, or may in the
future engage in a full range of treasury services with us or
our affiliates, including commercial banking or investment
banking transactions, investment management and currency and
derivative trading, for which they have received or will receive
customary fees and expenses. Additionally, an affiliate of J.P.
Morgan is serving as trustee for the notes in this offering.
Legal opinions
The legality of the notes is being passed upon for us by Jerome
D. Okarma, our Vice President, Secretary and General Counsel,
and/or Foley & Lardner LLP, Milwaukee, Wisconsin, and
certain legal matters will be passed upon for the underwriters
by Mayer, Brown, Rowe & Maw LLP, Chicago, Illinois.
Experts
The financial statements and managements assessment of the
effectiveness of internal control over financial reporting
(which is included in Managements Report on Internal
Control Over Financial Reporting) incorporated in this
prospectus supplement and the accompanying prospectus by
reference to the Annual Report on Form 10-K for the year
ended September 30, 2005 have been so incorporated in
reliance on the report (which contains an explanatory paragraph
relating to the Companys restatement of its financial
statements as described in Notes 18 and 21 to the financial
statements and an adverse opinion on the effectiveness of
internal control over financial reporting) of
PricewaterhouseCoopers LLP, an independent registered public
accounting firm, given on the authority of said firm as experts
in auditing and accounting.
S-18
Where you can find more information
We file annual, quarterly and current reports, proxy statements
and other information with the SEC under the Securities Exchange
Act of 1934. You may read and copy that information at the
SECs public reference room located at 100 F Street, N.E.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330
for further information relating to the public reference room.
You may also obtain copies of this information by mail from the
Public Reference Section of the Commission, 100 F Street, N. E.,
Washington, D.C. 20549, at prescribed rates.
The SEC also maintains a web site that contains reports, proxy
statements and other information about issuers, including
Johnson Controls, that file electronically with the SEC. The
address of that site is http://www.sec.gov. You can also inspect
reports, proxy statements and other information about us at the
offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005. Our common stock is listed under the
ticket symbol JCI.
The SEC allows us to incorporate by reference
information into this prospectus supplement. This means that we
can disclose important information to you by referring you to
another document filed separately with the SEC. The information
incorporated by reference is considered to be a part of this
prospectus supplement, except for any information that is
superseded by information that is included directly in this
document.
This prospectus supplement incorporates by reference the
documents listed below that we have previously filed with the
SEC. The documents contain important information about us and
our financial condition.
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Our Filings with the SEC |
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Annual Report on Form 10-K
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Year ended September 30, 2005
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Current Report on Form 8-K
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December 6, 2005
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December 9, 2005
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January 9, 2006
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We also incorporate by reference any future filings we make with
the SEC under Sections 13(a), 13(c), 14(d) or l5(d) of the
Securities Exchange Act of 1934 after the date of the filing of
the registration statement to which this prospectus supplement
and the accompanying prospectus relates, and until we have sold
all of the securities to which this prospectus supplement and
the accompanying prospectus relates or the offering is otherwise
terminated. Our subsequent filings with the SEC will
automatically update and supersede information in this
prospectus supplement.
You may obtain a copy of any of the documents incorporated by
reference in the registration statement to which this prospectus
supplement and the accompanying prospectus relates (excluding
exhibits to those documents unless they are specifically
incorporated by reference into those documents) at no cost by
writing to or calling our Secretary at:
Johnson Controls, Inc.
5757 North Green Bay Avenue
Milwaukee, Wisconsin 53209
(414) 524-1200
S-19
PROSPECTUS
Johnson Controls, Inc.
Common Stock,
Preferred Stock,
Debt Securities,
Warrants to Purchase Common Stock
or Preferred Stock
or Debt Securities,
Stock Purchase Contracts
and Stock Purchase Units
We may offer and sell from time to time securities in one or
more offerings. This prospectus provides you with a general
description of the securities we may offer.
We may offer and sell the following securities:
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common stock; |
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preferred stock, which may be convertible into our common stock; |
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senior or subordinated debt securities, which may be convertible
into our common stock or preferred stock; |
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warrants to purchase common stock, preferred stock or debt
securities; and |
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stock purchase contracts and stock purchase units. |
Each time securities are sold using this prospectus, we will
provide a supplement to this prospectus and possibly other
offering material containing specific information about the
offering. The supplement or other offering material may also
add, update or change information contained in this prospectus.
You should read this prospectus and any supplement carefully
before you invest.
The securities will be offered directly to investors or through
underwriters, dealers or agents. The supplements to this
prospectus will provide the specific terms of the plan of
distribution.
Our common stock is listed on the New York Stock Exchange under
the symbol JCI.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful and
complete. Any representation to the contrary is a criminal
offense.
This prospectus is dated December 27, 2005
Table of contents
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About this prospectus
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Cautionary note for forward-looking
information
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Johnson Controls, Inc
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Ratio of earnings to fixed charges
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Use of proceeds
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Description of capital stock
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Description of the debt securities
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Description of the warrants to
purchase common stock or preferred stock
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Description of the warrants to
purchase debt securities
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Description of the stock purchase
contracts and stock purchase units
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Legal matters
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Experts
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Where you can find more information
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i
About this prospectus
You should rely only on the information contained or
incorporated by reference in this prospectus. Incorporated
by reference means that we can disclose important
information to you by referring you to another document filed
separately with the Securities and Exchange Commission, or SEC.
We have not authorized any other person to provide you with
different information. If anyone provides you with different
information, you should not rely on it. We are not making, nor
will we make, an offer to sell securities in any jurisdiction
where the offer or sale is not permitted. You should assume that
information appearing in this prospectus and any supplement to
this prospectus is current only as of the dates on their covers.
Our business, financial condition, results of operations and
prospects may have changed since that date.
Unless the context otherwise requires, references in this
prospectus to we , us, our,
the Company and Johnson Controls refer
to Johnson Controls, Inc. and its subsidiaries, collectively.
References to the common stock refer to Johnson
Controls common stock, par value $0.04
1/6
per share. References to the preferred stock refers
to Johnson Controls preferred stock, par value $1.00 per
share. References to $ are to United States
currency, and the terms United States and
U.S. mean the United States of America, its states,
territories, possessions and all areas subject to its
jurisdiction.
PERSONS PARTICIPATING IN THE OFFERING MADE BY THIS PROSPECTUS
AND ANY PROSPECTUS SUPPLEMENT AND/ OR OTHER OFFERING MATERIAL
MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE
AFFECT THE PRICE OF THE OFFERED SECURITIES IN CONNECTION WITH
THE OFFERING, INCLUDING OVER-ALLOTMENT, STABILIZING AND
SHORT-COVERING TRANSACTIONS IN THE SECURITIES AND THE IMPOSITION
OF A PENALTY BID. THESE ACTIONS, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
Cautionary note for forward-looking information
This prospectus, any supplement to this prospectus and/or other
offering material and the information incorporated by reference
in this prospectus or any prospectus supplement and/or other
offering material may contain forward-looking statements within
the meaning of Private Securities Litigation Reform Act of 1995.
We intend these forward-looking statements to be covered by the
safe harbor provisions for forward-looking statements in the
Private Securities Litigation Reform Act of 1995.
Forward-looking statements include information concerning
possible or assumed future risks and may be preceded by or
include forward-looking words such as believes,
expects, may, anticipates,
projects or similar expressions. All statements
other than statements of historical facts included in this
prospectus or any supplement to this prospectus and/or other
offering material, including those regarding our financial
position, business strategy and plans and objectives of
management for future operations, are forward-looking
statements. We caution that these statements and any other
forward-looking statements in this prospectus, any supplement to
this prospectus and the information incorporated by reference in
this prospectus or any prospectus supplement and/or other
offering material only reflect our expectations and are not
guarantees of performance. These statements involve risks,
uncertainties and assumptions, including, among others, those we
identify from time to time in materials that we file with the
SEC that are incorporated by reference into this prospectus.
Numerous important factors described in this prospectus, or any
supplement to this prospectus and/or other offering material and
the information incorporated by reference in this prospectus or
any prospectus supplement and/or other offering material could
affect these statements and could cause actual results to differ
materially from our expectations. We undertake no obligation to
update or revise publicly any forward-looking statements,
whether as a result of new information, future events or
otherwise.
ii
Johnson Controls, Inc.
We are a Wisconsin corporation organized in 1885. From 1885
through 1978, our operations were predominantly in the building
efficiency business. Since 1978, our operations have been
diversified through acquisitions and internal growth. We operate
in three primary businesses: building efficiency, interior
experience, and power solutions (the businesses were formerly
referred to as Controls Group, Seating and Interiors Group, and
Battery Group, respectively).
The building efficiency business is a global market leader in
providing installed building control systems and technical and
facility management services, including comfort, energy and
security management for the non-residential buildings market.
The business installed systems integrate the management,
operation and control of building control systems such as
temperature, ventilation, humidity, fire safety and security.
The business technical and facility management services
provide a complete suite of integrated solutions to improve
building operations and maintenance.
In 1985, we entered the automotive seating market through the
acquisition of Hoover Universal, Inc. During the late
1990s, we expanded into additional interior systems and
geographic markets. Our automotive seating and interior systems
business operates under the name interior experience, and we are
among the worlds largest automotive suppliers. Interior
experience provides seating, instrument panel, overhead, floor
console and door systems for motor vehicles.
In 1978, we entered the North American battery market through
the acquisition of Globe-Union, Inc. and grew in this market
through internal growth and strategic acquisitions. Our power
solutions business services both automotive original equipment
manufacturers and the general vehicle battery aftermarket by
providing advanced battery technology, coupled with systems
engineering, marketing and service expertise. We produce
lead-acid batteries and offer nickel-metal-hydride and
lithium-ion battery technology to power hybrid vehicles.
Our principal executive offices are located at 5757 North Green
Bay Avenue, Milwaukee, Wisconsin 53209 and our phone number is
(414) 524-1200.
Ratio of earnings to fixed charges
The following table shows our ratio of earnings to fixed charges
for each of our last five fiscal years:
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For the purposes of computing this ratio, earnings
consist of income from continuing operations before income
taxes, minority interest in earnings or losses of consolidated
subsidiaries and income from equity affiliates plus
(a) amortization of previously capitalized interest,
(b) distributed income from equity affiliates and
(c) fixed charges, minus interest capitalized during the
period. Fixed charges consist of (i) interest
incurred and amortization of debt expense plus (ii) the
portion of rent expense representative of the interest factor.
Use of proceeds
We intend to use the net proceeds from the sales of the
securities as set forth in the applicable prospectus supplement
and/or other offering material.
1
Description of capital stock
We are authorized to issue up to 602,000,000 shares of capital
stock, 600,000,000 of which are shares of common stock, par
value $0.04
1/6
per share, and 2,000,000 shares of which are preferred stock,
par value $1.00 per share. As of November 17, 2005, there
were 193,511,283 shares of common stock issued and outstanding
and no shares of preferred stock issued and outstanding. Shares
of our common stock are listed on the New York Stock Exchange
under the symbol JCI.
The following description of our capital stock summarizes
general terms and provisions that apply to our capital stock.
Since this is only a summary, it does not contain all of the
information that may be important to you. The summary is subject
to and qualified in its entirety by reference to our restated
articles of incorporation and our by-laws, as amended, which are
filed as exhibits to the registration statement of which this
prospectus is a part. See Where You Can Find More
Information.
Common Stock
Preemptive Rights
Our common shareholders do not have any preemptive rights except
as the board of directors may otherwise determine.
Dividends
After all dividends on all of our preferred stock outstanding
have been paid or declared and set apart for payment, the
holders of our common stock are entitled to receive dividends as
may be declared from time to time by our board of directors, in
its discretion, out of funds legally available therefor.
Liquidation or Dissolution
In the event of a liquidation, dissolution or winding up of our
affairs, holders of our common stock are entitled to share
ratably in the distribution of our assets that remain after
provision for payment of all liabilities to creditors and
payment of liquidation preferences and accrued dividends, if
any, to our preferred shareholders.
Voting Rights and Extraordinary Transactions
Our common shareholders are entitled to one vote for each share
of common stock held on all questions on which our shareholders
are entitled to vote, and our common shareholders vote together
share for share with our preferred shareholders as one class,
except as otherwise provided by law or as determined by our
board of directors at the time of establishment of a series of
preferred stock.
Provisions of our articles of incorporation and bylaws might
discourage some types of transactions that involve an actual or
threatened change of control. Our articles of incorporation
provide that, subject to specified exceptions, the affirmative
vote or consent of the holders of four-fifths of all classes of
our capital stock, considered as one class, is required
(1) for the adoption of any agreement for the merger or
consolidation of us with or into any other corporation or
(2) to authorize any sale, lease, exchange, mortgage,
pledge or other disposition of all or any substantial part of
our assets to, or any sale, lease, exchange, mortgage, pledge,
other disposition to us in exchange for our securities or any
assets of, any other corporation, person or other entity, if, in
either case, the other corporation, person or entity is the
beneficial owner, directly or indirectly, of more than 10% of
our outstanding capital stock. Any corporation, person or other
entity will be deemed to be the beneficial owner of all shares
of our capital stock which are beneficially owned,
2
directly or indirectly, by it and its affiliates and associates,
and which it and its affiliates and associates have the right to
acquire pursuant to any agreement, or upon exercise of
conversion rights, warrants or options, or otherwise.
The provisions of our articles of incorporation requiring a
four-fifths vote are not applicable to (1) any merger or
consolidation of us with or into any other corporation, or any
sale, lease, exchange, mortgage, pledge or other disposition of
all or any substantial part of our assets to, or any sale,
lease, mortgage, pledge or other disposition to us in exchange
for our securities or any assets of, any other corporation,
person or other entity, if our board of directors by resolution
has approved a memorandum of understanding with the other
corporation, person or other entity, with respect to and
substantially consistent with the proposed transaction, prior to
the time the other corporation, person or other entity has
become a beneficial owner of more than 10% of our outstanding
capital stock or (2) any merger or consolidation of us
with, or any sale, lease, exchange, mortgage, pledge or other
disposition to as of any assets of, any corporation of which a
majority of the outstanding capital stock is held by us.
No amendment to our articles of incorporation may amend, alter,
change or repeal any of the provisions of our articles of
incorporation requiring a four-fifths vote unless the amendment
effecting the amendment, alteration, change or repeal receives
the affirmative vote or consent of the holders of four-fifths of
all of our capital stock, considered as one class.
Provisions of Wisconsin law might also discourage some types of
transactions that involve an actual or threatened change of
control of Johnson Controls. Sections 180.1140 through
180.1144 of the Wisconsin Business Corporation Law contain
limitations and special voting provisions applicable to
specified business combinations involving Wisconsin
corporations, including Johnson Controls, and a significant
stockholder, unless the board of directors of the corporation
approves the business combination or the stockholders
acquisition of shares before the shares are acquired. Similarly,
Sections 180.1130 through 180.1133 of the Wisconsin
Business Corporation Law contain special voting provisions
applicable to specified business combinations unless minimum
price and procedural requirements are met. Following
commencement of a takeover offer, Section 180.1134 of the
Wisconsin Business Corporation Law imposes special voting
requirements on specified share repurchases effected at a
premium to the market and on specified asset sales by the
corporation unless, as it relates to the potential sale of
assets, the corporation has at least three independent directors
and a majority of the independent directors vote not to have the
provision apply to the corporation.
Section 180.1150 of the Wisconsin Business Corporation Law
provides that the voting power of shares of Wisconsin
corporations, including Johnson Controls, held by any person or
persons acting as a group in excess of 20% of the voting power
of the corporation is limited to 10% of the full voting power of
those shares. This restriction does not apply to shares acquired
directly from the corporation or in specified transactions or
shares for which full voting power has been restored pursuant to
a vote of shareholders.
Number and Tenure of Board of Directors; Special
Meetings
As of July 27, 2005, our bylaws provide that our board of
directors is composed of thirteen directors divided into three
classes, consisting of two classes with four members each, and
one class of five members. A director may be removed from office
by shareholders prior to the expiration of his or her term, but
only:
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at a special meeting called for the purpose of removing the
director; |
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by the affirmative vote of two-thirds of the outstanding shares
entitled to vote for the election of the director; and |
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for cause, but if the board of directors, by resolution adopted
by the affirmative vote of at least two-thirds of the directors
then in office plus one director, recommends removal of a
director, then the shareholders may remove the director without
cause by the vote described in the two clauses above. |
A special meeting of shareholders may be called only by the
chairman of the board of directors, the President or the board
of directors, and will be called by the chairman of the board of
directors or the President upon the demand of shareholders
representing at least 10% of all of the votes entitled to be
cast at the special meeting.
The affirmative vote of (1) shareholders possessing at
least four-fifths of the voting power of the outstanding shares
of all classes of our capital stock, considered as one class
(subject to the rights of holders of any class or series of
stock having a preference over the common stock as to dividends
or upon liquidation) or (2) at least two-thirds of the
directors then in office plus one director, is required to
amend, alter, change or repeal the provisions of the bylaws
relating to the number and tenure of members of our board of
directors.
Preferred Stock
General
Our articles of incorporation authorize our board of directors
to issue shares of preferred stock in one or more series and
with rights, preferences, privileges and restrictions, including
dividend rights, voting rights, conversion rights, terms of
redemption and liquidation preferences, as may be designated by
our board of directors without any further vote or action by our
shareholders, provided that the aggregate liquidation preference
of all shares of preferred stock outstanding may not exceed
$100,000,000. The issuance of preferred stock may have the
effect of delaying, deferring or preventing a change in control
of Johnson Controls.
The specific terms of a particular series of preferred stock
offered pursuant to this prospectus will be described in the
prospectus supplement and/or other offering material relating to
that series. The related prospectus supplement and/or other
offering material will contain a description of material United
States federal income tax consequences relating to the purchase
and ownership of the series of preferred stock described in the
prospectus supplement and/or other offering material.
The rights, preferences, privileges and restrictions of the
preferred stock of each series will be fixed by articles of
amendment to the articles of incorporation relating to that
series. A prospectus supplement and/or other offering material,
relating to each series, will specify the terms of the preferred
stock as follows:
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the maximum number of shares to constitute, and the designation
of, the series; |
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the annual dividend rate, if any, on shares of the series,
whether the rate is fixed or variable or both, and the date or
dates from which dividends will begin to accrue or accumulate; |
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the price at and the terms and conditions on which the shares of
the series may be redeemed; |
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the liquidation preference, if any, that the holders of shares
of the series would be entitled to receive upon the liquidation,
dissolution or winding up of our affairs; |
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whether or not the shares of the series will be subject to
operation of a retirement or sinking fund, and, if so, the
extent and manner in which that fund would be applied to the
purchase or redemption of the shares of the series for
retirement or for other corporate purposes, and the terms and
provisions relating to the operation of the fund; |
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the terms and conditions, if any, on which the shares of the
series will be convertible into, or exchangeable for, shares of
common stock, including the price or prices or the rate or rates
of conversion or exchange and the method, if any, of adjusting
the same and whether that conversion is mandatory or optional;
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the voting rights, if any, of the shares of the series. |
Dividends
The holders of our preferred stock will be entitled to receive
dividends at the rate per year set by our board of directors,
payable quarterly on the last day of March, June, September, and
December in each year for the respective calendar quarter ending
on those dates, when and as declared by our board of directors.
Dividends will accrue on each share of preferred stock from the
first day of each quarterly dividend period in which the share
is issued or from another date as our board of directors may fix
for that purpose. All dividends on preferred stock will be
cumulative so that if we do not pay or set apart for payment the
dividend, or any part thereof, for any dividend period on the
preferred stock then issued and outstanding, the unpaid portion
of the dividend will thereafter be fully paid or declared and
set apart for payment, but without interest, before any dividend
will be paid or declared and set apart for payment on our common
stock. The holders of our preferred stock will not be entitled
to participate in any of our other or additional earnings or
profits, except for those premiums, if any, as may be payable in
case of redemption, liquidation, dissolution or winding up of
our affairs.
Any dividend paid upon our preferred stock at a time when any
accrued dividends for any prior dividend period are delinquent
will be expressly declared to be in whole or partial payment of
the accrued dividends to the extent there are accrued dividends,
beginning with the earliest dividend period for which dividends
are then wholly or partly delinquent, and will be so designated
to each shareholder to whom payment is made. No dividends will
be paid upon any shares of any series of preferred stock for a
current dividend period unless there has been paid or declared
and set apart for payment dividends required to be paid to the
holders of each other series of preferred stock for all past
dividend periods of the other series. If any dividends are paid
on any of our preferred stock with respect to any past dividend
period at any time when less than the total dividends then
accumulated and payable for all past dividend periods on all of
the preferred stock then outstanding are to be paid or declared
and set apart for payment, then the dividends being paid will be
paid on each series of preferred stock in the proportions that
the dividends then accumulated and payable on each series for
all past dividend periods bear to the total dividends then
accumulated and payable for all past dividend periods on all
outstanding preferred stock.
Liquidation or Dissolution
In case of our voluntary or involuntary liquidation, dissolution
or winding up of our affairs, the holders of each series of
preferred stock would be entitled to receive out of our assets
in money or moneys worth the liquidation preference with
respect to that series of preferred stock, together with all
accrued but unpaid dividends thereon, whether or not earned or
declared, before any of our assets would be paid or distributed
to holders of our common stock. In case of our voluntary or
involuntary liquidation, dissolution or winding up of our
affairs, if our assets would be insufficient to pay the holders
of all of the series of our preferred stock then outstanding the
full amounts to which they may be entitled, the holders of each
outstanding series would share ratably in our assets in
proportion to the amounts which would be payable with respect to
that series if all amounts payable thereon were paid in full.
Our consolidation or merger with or into any other corporation,
or a sale of all or any part of our assets, will not be deemed a
liquidation, dissolution or winding up of our affairs for
purposes of this paragraph.
5
Redemption
Except as otherwise provided with respect to a particular series
of our preferred stock, the following general redemption
provisions will apply to each series of preferred stock.
On or prior to the date fixed for redemption of a particular
series of our preferred stock or any part of a particular series
of our preferred stock as specified in the notice of redemption
for that series, we will deposit adequate funds for the
redemption, in trust for the account of holders of that series,
with a bank having trust powers or a trust company in good
standing, organized under the laws of the United States or the
State of Wisconsin doing business in the State of Wisconsin and
having capital, surplus and undivided profits aggregating at
least $1,000,000. If the name and address of the bank or trust
company and the deposit of or intent to deposit the redemption
funds in the trust account is stated in the notice of
redemption, then from and after the mailing of the notice and
the making of the deposit, the shares of the series called for
redemption will no longer be deemed to be outstanding for any
purpose whatsoever, and all rights of the holders of the shares
of the series in or with respect to us will cease and terminate
except only the right of the holders of the shares:
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to transfer shares prior to the date fixed for redemption; |
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to receive the redemption price of the shares, including accrued
but unpaid dividends to the date fixed for redemption, without
interest, upon surrender of the certificate or certificates
representing the shares to be redeemed; and |
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on or before the close of business on the fifth day preceding
the date fixed for redemption, to exercise privileges of
conversion, if any, not previously expired. |
Any money deposited by us that remains unclaimed by the holders
of the shares called for redemption and not converted will, at
the end of six years after the date fixed for redemption, be
paid to us upon our request, after which repayment the holders
of the shares called for redemption will no longer look to the
bank or trust company for the payment of the redemption price
but will look only to us or to others, as the case may be, for
the payment of any lawful claim for the money which holders of
the shares may still have. After the six-year period, the right
of any shareholder or other person to receive payment for its
shares in the series redeemed may be forfeited in the manner and
with the effect provided under Wisconsin law. Any portion of the
money so deposited by us, in respect of shares of our preferred
stock called for redemption that are converted into our common
stock, will be repaid to us upon our request.
In case of redemption of only a part of a series of preferred
stock, we will designate by lot, in the manner our board of
directors may determine, the shares to be redeemed, or we will
effect the redemption pro rata.
Conversion Rights
Except as otherwise provided with respect to a particular series
of our preferred stock, the following general conversion
provisions will apply to each series of our preferred stock that
is convertible into common stock.
All shares of our common stock issued upon conversion will be
fully paid and nonassessable, and will be free of all taxes,
liens and charges with respect to the issuance except taxes, if
any, payable by reason of issuance in a name other than that of
the holder of the share or shares converted and except as
otherwise provided by applicable Wisconsin law.
The number of shares of our common stock issuable upon
conversion of a particular series of preferred stock at any time
will be the quotient obtained by dividing the aggregate
conversion value of the shares of the series surrendered for
conversion by the conversion price per share of
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common stock then in effect for that series. We will not be
required, however, upon any such conversion, to issue any
fractional share of common stock, but in lieu of fractional
shares we will pay to the holder who would otherwise be entitled
to receive a fractional share a sum in cash equal to the value
of the fractional share at the rate of the then-prevailing
market value per share of our common stock. The then-prevailing
market value per share means for these purposes the last
reported sale price of our common stock on the New York Stock
Exchange. Shares of our preferred stock will be deemed to have
been converted as of the close of business on the date the
transfer agent receives the certificate for the shares to be
converted, duly endorsed, together with written notice by the
holder of its election to convert the shares.
The basic conversion price per share of common stock for a
series of our preferred stock, as fixed by the board of
directors, will be subject to adjustment from time to time as
follows:
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If we (1) pay a dividend or make a distribution to all of
our common shareholders as a class in shares of common stock,
(2) subdivide or split the outstanding shares of common stock
into a larger number of shares, or (3) combine the
outstanding shares of our common stock into a smaller number of
shares, the basic conversion price per share of common stock in
effect immediately prior thereto will be adjusted so that the
holder of each outstanding share of each series of our preferred
stock which by its terms is convertible into common stock will
thereafter be entitled to receive upon the conversion of that
share the number of shares of common stock which the holder
would have owned and been entitled to receive after the
happening of any of the events described above had that share of
preferred stock been converted immediately prior to the
happening of the event. |
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If we issue to all of our common shareholders as a class any
rights or warrants enabling them to subscribe for or purchase
shares of our common stock at a price per share less than the
current market price per share of our common stock, the
conversion price per share of common stock in effect immediately
prior thereto for each series of preferred stock which by its
terms is convertible into common stock will be adjusted by
multiplying the conversion price by a fraction. The numerator of
the fraction would be the sum of the number of shares of common
stock outstanding and the number of shares of common stock which
the aggregate exercise price, before deduction of underwriting
discounts or commissions and other expenses we would incur in
connection with the issue, of the total number of shares so
offered for subscription or purchase would purchase at the
current market price per share. The denominator of the fraction
would be the sum of the number of shares of common stock
outstanding at the record date and the number of additional
shares of common stock so offered for subscription or purchase. |
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If we distribute to all of our common shareholders as a class
evidences of our indebtedness or assets, other than cash
dividends, the basic conversion price per share of common stock
in effect immediately prior thereto for each series of preferred
stock which by its terms is convertible into common stock would
be adjusted by multiplying the basic conversion price by a
fraction, of which the numerator will be the difference between
the current market price per share of common stock and the fair
value, as determined by our board of directors, of the portion
of the evidences of indebtedness or assets, other than cash
dividends, so distributed with respect to one share of common
stock, and of which the denominator would be the current market
price per share of common stock. |
Any adjustment to the conversion price for any series of our
preferred stock is made retroactively. No adjustment will be
made in the conversion price for any series of our preferred
stock if the amount of the adjustment would be less than fifty
cents, but any adjustments which are not made for that reason
will be carried forward and taken into account in any subsequent
adjustment and all adjustments will be made not later than the
earlier of three years after the occurrence of the event giving
rise to the adjustment or the date as of which the adjustment
would require an
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increase or decrease of at least 3% in the aggregate number of
shares of common stock issued and outstanding on the first date
on which an event occurred which required the making of a
computation described above. All adjustments will be made to the
nearest cent or to the nearest 1/100th of a share, as the case
may be.
In the case of any capital reorganization or reclassification of
our common stock, or if we consolidate with or merge into, or
sell or dispose of all or substantially all of our property and
assets to, any other corporation, proper provisions will be made
as part of the terms of the capital reorganization,
reclassification, consolidation, merger or sale that any shares
of a particular series of preferred stock at the time
outstanding will thereafter be convertible into the number of
shares of stock or other securities or property to which a
holder of the number of shares of common stock deliverable upon
conversion of the shares of a particular series would have been
entitled upon the capital reorganization, reclassification,
consolidation or merger.
No adjustment with respect to dividends upon any series of our
preferred stock or with respect to dividends upon our common
stock will be made in connection with any conversion.
Whenever there is an issuance of additional shares of our common
stock requiring an adjustment in the conversion price, and
whenever there occurs any other event which results in a change
in the existing conversion rights of the holders of shares of a
series of our preferred stock, we will file with our transfer
agent or agents, and at our principal office in Milwaukee,
Wisconsin, a statement signed by our president or a vice
president and by our treasurer or an assistant treasurer
describing specifically the issuance of additional shares of
common stock or other event (and, in the case of a capital
reorganization, reclassification, consolidation or merger, the
terms thereof), the actual conversion prices or basis of
conversion as changed by the issuance or event and the change,
if any, in the securities issuable upon conversion. Whenever we
issue to all holders of our common stock as a class any rights
or warrants enabling them to subscribe for or purchase shares of
common stock, we will also file in like manner a statement
describing the issuance and the consideration we received as a
result of that issuance. The statement so filed may be inspected
by any holder of record of shares of any series of our preferred
stock.
We will at all times have authorized and will at all times
reserve and set aside a sufficient number of duly authorized
shares of our common stock for the conversion of all stock of
all then outstanding series of preferred stock which are
convertible into common stock.
Reissuance of Shares
Any shares of our preferred stock retired by purchase,
redemption, through conversion, or through the operation of any
sinking fund or redemption or purchase account, will thereafter
have the status of authorized but unissued shares of preferred
stock, and may thereafter be reissued as part of the same series
or may be reclassified and reissued by our board of directors in
the same manner as any other authorized and unissued shares of
preferred stock.
Voting Rights
Holders of our preferred stock will be entitled to one vote for
each share held on all questions on which our shareholders are
entitled to vote and will vote together share for share with the
holders of our common stock as one class, except as otherwise
provided by law or as described below or as otherwise determined
by the board of directors at the time of the establishment of a
series of preferred stock.
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The affirmative vote or written consent of the holders of record
of at least two-thirds of the outstanding shares of a series of
our preferred stock is a prerequisite of our right:
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to create any shares or any securities convertible into or
evidencing the right to purchase shares ranking prior to that
series of our preferred stock with respect to the payment of
dividends or of assets upon liquidation, dissolution or winding
up; or |
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to change the designations, preferences, limitations, or
relative rights of the outstanding shares of that series of
preferred stock in any manner prejudicial to the holders thereof. |
The affirmative vote or written consent of the holders of a
majority of the outstanding shares of each series of our
preferred stock will be a prerequisite to our right to authorize
any shares of preferred stock in excess of 2,000,000 shares or
any other shares ranking on a parity with our preferred stock
with respect to the payment of dividends or of assets upon
liquidation, dissolution or winding up.
Special Voting Rights for the Election of Directors upon
our Failure to Pay Dividends
Whenever dividends payable on any series of our preferred stock
are in arrears in an aggregate amount equivalent to six full
quarterly dividends on the shares of all of the preferred stock
of that series then outstanding, the holders of preferred stock
of that series will have the exclusive and special right, voting
separately as a class, to elect two of our directors, and the
number of directors constituting our board of directors will be
increased to the extent necessary to effectuate that right.
Whenever the holders of any series of our preferred stock have
the right to elect two of our directors, that right may be
exercised initially either at a special meeting of the holders
possessing that right or at any annual meeting of our
shareholders, and thereafter at annual meetings of our
shareholders. The right of the holders of any series of our
preferred stock voting separately as a class to elect members of
our board of directors will continue until the time all
dividends accumulated on that series of our preferred stock have
been paid in full, at which time the right of the holders of
that series of our preferred stock to vote separately as a class
for the election of directors will terminate, subject to
revesting in the event of any subsequent default in an aggregate
amount equivalent to six full quarterly dividends.
At any time when the holders of any series of preferred stock
have special voting rights as a result of our failure to make
dividends, a proper officer will, upon the written request of
the holders of at least 10% of the series of our preferred stock
then outstanding entitled to the special voting rights addressed
to our Secretary, call a special meeting of the holders of that
series of our preferred stock for the purpose of electing
directors. The special meeting will be held at the earliest
practicable date in the place designated pursuant to our bylaws
or, if there be no designation, at our principal office in
Milwaukee, Wisconsin. If the special meeting is not called by
the proper officers within 20 days after personal service
of the written request upon our Secretary, or within
30 days after mailing the written request within the United
States by registered or certified mail addressed to our
Secretary at our principal office, then the holders of at least
10% of the series of our preferred stock then outstanding may
designate in writing one of the holders to call a special
meeting at our expense, and the meeting may be called by that
person upon the notice required for annual meetings of
shareholders and will be held in Milwaukee, Wisconsin. In no
event, however, will a special meeting be called during the
period within 90 days immediately preceding the date fixed
for our next annual meeting of shareholders.
At any annual or special meeting at which the holders of any
series of our preferred stock will have the special right,
voting separately as a class, to elect directors as a result of
our failure to pay dividends, the presence, in person or by
proxy, of the holders of
331/3%
of the series of preferred stock entitled to the special voting
rights will be required to constitute a quorum of that series
for the election of any director by the holders of that series
as a class. At that meeting or
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adjournment thereof, the absence of a quorum of the series of
our preferred stock entitled to special voting rights will not
prevent the election of directors other than those to be elected
by that series of preferred stock voting as a class, and the
absence of a quorum for the election of other directors will not
prevent the election of the directors to be elected by that
series of preferred stock voting as a class. In the absence of
either or both quorums, a majority of the holders present in
person or by proxy of the stock or stocks which lack a quorum
will have power to adjourn the meeting for the election of
directors which they are entitled to elect until a quorum is
present, without notice other than announcement at the meeting.
During any period in which the holders of any series of
preferred stock have the right to vote as a class for directors
as described above, any vacancies in our board of directors will
be filled only by vote of a majority (even if that be only a
single director) of the remaining directors elected by the
holders of the series or class of stock which elected the
directors whose offices have become vacant. During that period
the directors so elected by the holders of any series of
preferred stock will continue in office (1) until the next
succeeding annual meeting or until their successors, if any, are
elected by those holders and qualify, or (2) unless
required by applicable law to continue in office for a longer
period, until termination of the special voting rights of those
holders, if earlier. If and to the extent permitted by
applicable law, immediately upon any termination of the right of
the holders of any series of our preferred stock to vote as a
class for directors as described in this prospectus, the term of
office of the directors then in office so elected by the holders
of that series will terminate.
Other Restrictions upon our Failure to Pay Dividends or
Retire Shares of Preferred Stock
If we fail at any time to pay dividends in full on our preferred
stock, thereafter and until dividends in full, including all
accrued and unpaid dividends for all past quarterly dividend
periods on our preferred stock outstanding, have been declared
and set apart in trust for payment or paid, or if at any time we
fail to pay in full amounts payable with respect to any
obligations to retire shares of our preferred stock, thereafter
and until those amounts have been paid in full or set apart in
trust for payment, we cannot:
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without the affirmative vote or consent of the holders of at
least
662/3%
of our preferred stock at the time outstanding, redeem less than
all of our preferred stock at the time outstanding; or |
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purchase any of our preferred stock except in accordance with a
purchase offer made in writing to all holders of our preferred
stock of all series upon the terms our board of directors, in
its sole discretion after consideration of the respective annual
dividend rate and other relative rights and preferences of the
respective series, determines (which determination will be final
and conclusive) will result in fair and equitable treatment
among the respective series. We may, to meet the requirements of
any purchase, retirement or sinking fund provisions with respect
to any series, use shares of that series that we acquired prior
to our failure to pay dividends. We may also complete the
purchase or redemption of shares of our preferred stock for
which a purchase contract was entered into for any purchase,
retirement or sinking fund purposes, or the notice of redemption
of which was initially mailed, prior to our failure to pay
dividends; or |
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redeem, purchase or otherwise acquire any shares of any other
class of our stock ranking junior to the preferred stock as to
dividends and upon liquidation. |
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Description of the debt securities
The following description of the debt securities sets forth the
material terms and provisions of the debt securities to which
any prospectus supplement and/or other offering material may
relate. The particular terms of the debt securities offered by
any prospectus supplement and/or other offering material and the
extent, if any, to which the provisions described in this
prospectus may apply to the offered debt securities will be
described in the prospectus supplement and/or other offering
material relating to the offered debt securities.
Senior debt securities will be issued under an indenture between
Johnson Controls and JPMorgan Chase Bank, National Association,
as trustee, a form of which is incorporated by reference as an
exhibit to the registration statement of which this prospectus
is a part. The indenture relating to the senior debt securities,
as amended or otherwise supplemented by any supplemental
indentures, is referred to in this prospectus as the senior
indenture. Subordinated debt securities will be issued under an
indenture between Johnson Controls and the trustee, the form of
which is incorporated by reference as an exhibit to the
registration statement of which this prospectus is a part. The
indenture relating to the subordinated debt securities, as
amended or otherwise supplemented by any supplemental
indentures, is referred to in this prospectus as the
subordinated indenture. The senior indenture and the
subordinated indenture are sometimes referred to in this
prospectus collectively as the indentures and each individually
as an indenture.
The following summaries of the material provisions of the
indentures and the debt securities do not purport to be complete
and are subject to, and are qualified in their entirety by
reference to, all of the provisions of the indentures, including
the definitions of specified terms used in the indentures, and
the debt securities. Wherever particular articles, sections or
defined terms of an indenture are referred to, it is intended
that those articles, sections or defined terms will be
incorporated herein by reference, and the statement in
connection with which reference is made is qualified in its
entirety by the article, section or defined term in the
indenture.
General
The indentures do not limit the amount of debt, either secured
or unsecured, which we may issue under the indentures or
otherwise. The debt securities may be issued in one or more
series with the same or various maturities and may be sold at
par, a premium or an original issue discount. Some of the debt
securities may be issued under the applicable indenture as
original issue discount securities to be sold at a substantial
discount below their principal amount. Federal income tax and
other considerations applicable to any original issue discount
securities will be described in the related prospectus
supplement and/or other offering material. We have the right to
reopen a previous issue of a series of debt by
issuing additional debt securities of such series.
Because we are a holding company, our right, and hence the
rights of our creditors and shareholders, to participate in any
distribution of assets of any of our subsidiaries upon its
liquidation or reorganization or otherwise is subject to prior
claims of the creditors of the subsidiary, except to the extent
that any claim of ours as a creditor of the subsidiary may be
recognized.
The prospectus supplement and/or other offering material
relating to the particular debt securities offered thereby will
describe the following terms of the offered debt securities:
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the title of the offered debt securities; |
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any limit on the aggregate principal amount of the offered debt
securities; |
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the price at which the offered debt securities will be issued,
expressed as a percentage of the aggregate principal amount
thereof; |
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the date or dates on which the offered debt securities mature
and any provisions for the extension of any maturity date or
dates; |
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the rate or rates per year, which may be fixed or variable, at
which the offered debt securities will bear interest, if any, or
the method by which the rate or rates will be determined
including, if applicable, any remarketing option or similar
methods; |
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the date from which interest will accrue, the dates on which
interest, if any, will be payable, the date on which payment of
interest will commence and any regular record dates applicable
to the dates on which interest will be so payable; |
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the place or places where the principal of and premium, if any,
and interest, if any, on the offered debt securities will be
payable and each office or agency where the offered debt
securities may be presented for transfer or exchange; |
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the dates on which and the price or prices at which the offered
debt securities will, pursuant to any mandatory sinking fund
provisions, or may, pursuant to any optional sinking fund
provisions, be redeemed by us, and the other terms and
provisions of the sinking fund; |
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the currency in which payment of the principal of, premium, if
any, and interest on, the offered debt securities will be
payable, if other than the currency of the United States; |
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the period or periods within which, and the terms and conditions
upon which, an election may be made by us or a holder, as the
case may be, for payment of the principal and premium, if any,
and interest, if any, on the offered debt securities, other than
that in which the offered debt securities are stated to be
payable; |
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whether the offered debt securities are to be issued in the form
of one or more permanent global security or securities and, if
so, the identity of the depositary for the global security or
securities; |
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the date after which, the price or prices at which and the
currency in which the offered debt securities may , pursuant to
any optional redemption provisions, be redeemed at our option or
the option of the holder, and the other terms and provisions of
any optional redemption; |
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the inapplicability of specified provisions relating to
discharge and defeasance described in this prospectus with
respect to the offered debt securities; |
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if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which the offered debt securities
will be issuable; |
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information with respect to book-entry procedures, if any; |
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any deletions from, modifications of or additions to the events
of default or covenants with respect to the offered debt
securities; and |
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any other terms of the offered debt securities, which terms will
not be inconsistent with the provisions of the related indenture. |
Unless otherwise indicated in any prospectus supplement and/or
other offering material, principal of and premium, if any, and
interest, if any, on the offered debt securities will be
payable, and transfers of the offered debt securities will be
registerable, at the corporate trust office of the trustee.
Alternatively, at our option, payment of interest may be made by
check mailed to the address of the person entitled thereto as it
appears in the debt security register.
Floating Rate Notes
Floating rate notes issued under the indentures will bear
interest at a floating interest rate. Interest payable on any
interest payment date or on the date of maturity will be the
amount of
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interest accrued from and including the date of original
issuance or from and including the most recent interest payment
date on which interest has been paid or duly made available for
payment to but excluding the interest payment date or the date
of maturity, as the case may be.
The interest rate for the initial interest period will be the
three-month London Interbank offer rate (LIBOR),
determined as described below as of the applicable determination
date, plus a number of basis points to be described in the
related prospectus supplement and/or other offering material.
The interest rate on the floating rate notes for each subsequent
interest period will be reset quarterly on each interest payment
date. The floating rate notes will bear interest at an annual
rate (computed on the basis of the actual number of days elapsed
over a 360-day year) equal to LIBOR plus a number of basis
points to be described in the related prospectus supplement
and/or other offering material.
The interest rate in effect for the floating rate notes on each
day will be (a) if that day is an interest reset date, the
interest rate determined as of the determination date (as
defined below) immediately preceding such interest reset date or
(b) if that day is not an interest reset date, the interest
rate determined as of the determination date immediately
preceding the most recent interest reset date. The determination
date will be the second London Business Day immediately
preceding the applicable interest reset date.
The calculation agent will be the trustee initially. LIBOR will
be determined by the calculation agent as of the applicable
determination date in accordance with the following provisions:
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LIBOR will be determined on the basis of the offered rates for
deposits in U.S. dollars of not less than U.S. $1,000,000 having
a three-month maturity, beginning on the second London Business
Day immediately following that determination date, which appears
on Telerate Page 3750 (as defined below) as of
approximately 11:00 a.m., London time, on that
determination date. Telerate Page 3750 means
the display designated on page 3750 on
Moneyline Telerate, Inc. (or such other page as may replace the
3750 page on that service, any successor service or such other
service or services as may be nominated by the British
Bankers Association for the purpose of displaying London
interbank offered rates for U.S. dollar deposits). If no
rate appears on Telerate Page 3750, LIBOR for such
determination date will be determined in accordance with the
provisions of paragraph (2) below. |
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With respect to a determination date on which no rate appears on
Telerate Page 3750 as of approximately 11:00 a.m., London
time, on that determination date, the calculation agent will
request the principal London office of each of four major
reference banks (which may include an affiliate of one or more
underwriters) in the London interbank market selected by the
calculation agent (after consultation with us) to provide the
calculation agent with a quotation of the rate at which deposits
of U.S. dollars having a three-month maturity, beginning on the
second London Business Day immediately following that
determination dale, are offered by it to prime banks in the
London interbank market as of approximately 11:00 a.m., London
time, on that determination date in a principal amount equal to
an amount of not less than U.S. $1,000,000 that is
representative for a single transaction in that market at that
time. If at least two quotations are provided, LIBOR for that
determination date will be the arithmetic mean of the quotations
as calculated by the calculation agent. If fewer than two
quotations are provided, LIBOR for that determination date will
be the arithmetic mean of the rates quoted as of approximately
11:00 a.m., New York City time, on that determination date
by three major banks selected by the calculation agent (after
consultation with us) for loans in U.S. dollars to leading
European banks having a three-month maturity beginning on the
second London Business Day immediately following that
determination date and in a principal amount equal to an amount
of not less than U.S. $1,000,000 that is representative for a
single transaction in that market at that time; provided,
however, that if the banks selected by the calculation agent are
not quoting the |
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rates described in this sentence, LIBOR for that determination
dale will be LIBOR determined with respect to the immediately
preceding determination date, or in the case of the first
determination date, LIBOR for the initial interest period. |
If the date of maturity of the floating rate notes falls on a
day that is not a LIBOR Business Day, the related payment of
principal and interest will be made on the next LIBOR 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 LIBOR Business Day. If any
interest reset date or interest payment date (other than at the
date of maturity) would otherwise be a day that is not a LIBOR
Business Day, that interest reset date and interest payment date
will be postponed to the next date that is a LIBOR Business Day,
except that if such LIBOR Business Day is in the next calendar
month, such interest reset date and interest payment date (other
than at the date of maturity) shall be the immediately preceding
LIBOR Business Day.
LIBOR Business Day means any day other than Saturday
or Sunday or a day on which banking institutions or trust
companies in the City of New York are required or authorized to
close and that is also a London Business Day.
London Business Day means any day on which dealings
in deposits in U.S. dollars are transacted in the London
interbank market.
Optional Redemption
Floating rate notes issued under the indentures will not be
redeemable prior to maturity. Fixed rate notes will be
redeemable, in whole at any time or in part from time to time,
at our option at a redemption price equal to the greater of
(1) 100% of the principal amount of the fixed rate notes,
and (2) the sum of the present values of the remaining
scheduled payments of principal and interest on the fixed rate
notes to be redeemed (not including any portion of such payments
of interest accrued to the date of redemption) discounted to the
date of redemption on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the applicable
Treasury Rate, plus a number of basis points to be described in
the related prospectus supplement and/or other offering
material, plus in each case accrued and unpaid interest on the
principal amount being redeemed to the redemption date.
Treasury Rate means, with respect to any redemption
date, (1) the yield, under the heading which represents the
average for the immediate preceding week, appearing in the most
recently published statistical release designated
H.15(519) or any successor publication which is
published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded
U.S. Treasury securities adjusted to constant maturity under the
caption Treasury Constant Maturities, for the
maturity corresponding to the Comparable Treasury Issue (if no
maturity is within three months before or after the Remaining
Life, yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue will be
determined and the Treasury Rate will be interpolated or
extrapolated from such yields on a straight line basis, rounding
to the nearest month) or (2) if such release (or any
successor release) is not published during the week preceding
the calculation date or does not contain such yields, the rate
per annum equal to the semi-annual equivalent yield to maturity
of the Comparable Treasury Issue, calculating using a price for
the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for
such redemption date. The Treasury Rate will be calculated on
the third business day preceding the redemption date.
Comparable Treasury Issue means the U.S. Treasury
security selected by an Independent Investment Banker as having
a maturity comparable to the remaining term (Remaining
Life) of the fixed rate notes to be redeemed that would be
utilized, at the time of selection and in
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accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to
the remaining term of such fixed rate notes.
Independent Investment Banker means an independent
investment banking institution of national standing appointed by
us.
Comparable Treasury Price means (1) the average
of five Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest Reference Treasury
Dealer Quotations, or (2) if the Independent Investment
Banker obtains fewer than five such Reference Treasury Dealer
Quotations, the average of all such quotations.
Reference Treasury Dealer means a primary U.S.
Government securities dealer in New York City selected by us
after consultation with the Independent Investment Banker.
Reference Treasury Dealer Quotations means, with
respect to each Reference Treasury Dealer and any redemption
date, the average, as determined by the Independent Investment
Banker, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Independent Investment Banker
at 5:00 p.m., New York City time, on the third business day
preceding such redemption date.
Holders of fixed rate notes to be redeemed will receive notice
thereof by first-class mail at least 30 and not more than
60 days prior to the date fixed for redemption. If fewer
than all of the fixed rate notes are to be redeemed, the trustee
will select, not more than 60 days prior to the redemption
date, the particular fixed rate notes or portions thereof for
redemption from the outstanding not previously called by such
method as the trustee deems fair and appropriate.
Denominations, Registration and Transfer
Unless otherwise indicated in any prospectus supplement and/or
other offering material, the offered debt securities will be
issued only in fully registered form without coupons in
denominations of $1,000 or any integral multiple of $1,000, or
the equivalent in foreign currency. No service charge will be
made for any registration of transfer or exchange of offered
debt securities, but we may require payment of a sum sufficient
to cover any tax or other governmental charge payable in
connection with any transfer or exchange.
If the purchase price of any of the offered debt securities is
denominated in a foreign currency or currencies or foreign
currency unit or units or if the principal of, premium, if any,
or interest, if any, on any series of offered debt securities is
payable in a foreign currency or currencies or foreign currency
unit or units, the restrictions, elections, tax consequences,
specific terms and other information with respect to the issue
of offered debt securities and the foreign currency or
currencies or foreign currency unit or units will be described
in the related prospectus supplement and/or other offering
material.
We will not be required to issue, register the transfer of, or
exchange debt securities of any series during the period from
15 days prior to the mailing of notice of redemption of
debt securities of that series to the date the notice is mailed.
We will also not be required to register the transfer of or
exchange any debt security so selected for redemption, except
the unredeemed portion of any debt security being redeemed in
part.
Conversion and Exchange
The terms, if any, on which debt securities of any series are
convertible into or exchangeable for common stock or preferred
stock, property or cash, or a combination of any of the
foregoing, will be set forth in the related prospectus
supplement and/or other offering material. Terms may include
provisions for conversion or exchange that is either mandatory,
at the option of the holder, or at our option. The number of
shares of common stock or preferred stock to be received
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by the holders of the debt securities will be calculated in the
manner, according to the factors and at the time as described in
the related prospectus supplement and/or other offering material.
Covenants Applicable to Senior Debt Securities
Limitations on Secured Debt
We may not, and may not permit our restricted subsidiaries to,
create, assume, or guarantee any indebtedness secured by
mortgages, pledges, liens, security interest or encumbrances,
which we refer to collectively as security interests, in any of
its principal properties without making effective provision for
securing the senior debt securities offered under this
prospectus and any prospectus supplement and/or other offering
material equally and ratably with the secured debt.
Notwithstanding this limitation on secured debt, we and our
restricted subsidiaries may have debt secured by:
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specified purchase money mortgages created to secure payment for
the acquisition or construction of any property including, among
other things, any indebtedness we incur prior to, at the time
of, or within 180 days after the later of the acquisition,
the completion of construction (including any improvements on an
existing property) or the commencement of commercial operation
of that property. Any indebtedness incurred pursuant to this
exception must have as its purpose the financing of all or any
part of the purchase price of the property or construction or
improvements on the property; or |
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security interests on property, or any conditional sales
agreement or any title retention with respect to property,
existing at the time the property is acquired, whether or not
assumed by us or a restricted subsidiary; or |
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security interests on property or shares of capital stock or
indebtedness of any corporation or firm existing at the time
that corporation or firm becomes a restricted subsidiary; or |
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security interests in property or shares of capital stock or
indebtedness of a corporation existing at the time that
corporation is merged into or consolidated with us or a
restricted subsidiary, or at the time of a sale, lease, or other
disposition of the properties of a corporation or firm as an
entirety or substantially as an entirety to us or a restricted
subsidiary. No security interests allowed pursuant to this
exception will extend to any other principal property of ours or
a restricted subsidiary prior to its acquisition or to other
principal property thereafter acquired, other than additions to
the acquired property; or |
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security interests on property of ours or a restricted
subsidiary in favor of the United States or any state thereof,
or in favor of any other government or governmental entity,
including, among other things, security interests to secure
indebtedness of the pollution control or industrial revenue
type, in order to permit us or any restricted subsidiary to
perform a contract or to secure indebtedness incurred for the
purpose of financing all or any part of the purchase price for
the cost of constructing or improving the property subject to
those security interests or which is required by law or
regulation as a condition to the transaction of any business or
the exercise of any privilege, franchise or license; or |
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security interests on any property or assets of any restricted
subsidiary to secure indebtedness owing by it to us or to
another restricted subsidiary; or |
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mechanics, materialmens, carriers or other
similar liens arising in the ordinary course of business,
including the construction of facilities, in respect of
obligations which are not yet due or which are being contested
in good faith; or |
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security interests for taxes, assessments or government charges
or levies not yet delinquent, or already delinquent, but the
validity of which is being contested in good faith; or |
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security interests arising in connection with legal proceedings
being contested in good faith, including any judgment lien so
long as execution thereof is being stayed; or |
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landlords liens on fixtures located on premises leased by
us or a restricted subsidiary in the ordinary course of
business; or |
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any extension, renewal or replacement, or successive extensions,
renewals or replacements, in whole or in part, of any security
interests referred to in any of the previous clauses. |
Limitation on Sale and Leaseback Transactions
We and our restricted subsidiaries may not engage in sale and
leaseback transactions, including, among other things, specified
leases of more than three years, of any of our principal
properties, completion of construction of which and commencement
of full operation of which have occurred more than 180 days
prior to the occurrence of the sale or transfer.
The sale and leaseback of a principal property is not
prohibited, however, if we and our restricted subsidiaries are
entitled to incur secured debt equal in amount to the amount
realized or to be realized upon the sale or transfer secured by
a lien on the principal property to be leased without equally
and ratably securing the senior debt securities. We and our
restricted subsidiaries may also engage in an otherwise
prohibited sale and leaseback transaction if an amount equal to
the value of the principal property so leased is applied,
subject to credits for specified voluntary retirements of the
senior debt securities, to the retirement, within 120 days
of the effective date of the arrangement, of specified
indebtedness for borrowed money incurred or assumed by us or a
restricted subsidiary, as shown on our most recent consolidated
balance sheet and, in the case of our indebtedness, the
indebtedness is not subordinate and junior in right of payment
to the prior payment of the senior debt securities.
Permitted Secured Debt
Notwithstanding the limitations on secured debt and sale and
leaseback transactions described in this prospectus, we and our
restricted subsidiaries may, without securing the senior debt
securities, issue, assume or guarantee secured debt which would
otherwise be subject to the foregoing restrictions, provided
that after giving effect to any secured debt permitted by this
exception, the aggregate amount of our secured debt and that of
our restricted subsidiaries then outstanding and the aggregate
value of sale and leaseback transactions, other than sale and
leaseback transactions in connection with which indebtedness has
been, or will be, retired in accordance with the preceding
paragraph, at such time does not exceed 10% of our consolidated
stockholders equity.
For purposes of determining the amount of secured debt permitted
by the exception described in the paragraph above,
consolidated stockholders equity means, at any
date, our stockholders equity and that of our consolidated
subsidiaries determined on a consolidated basis as of such date
in accordance with generally accepted accounting principles;
provided that, our consolidated stockholders equity
and that of our consolidated subsidiaries is to be calculated
without giving effect to (i) the application of Financial
Accounting Standards Board Statement No. 106 or
(ii) the cumulative foreign currency translation
adjustment. The term consolidated subsidiary means,
as to any person, each subsidiary of such person (whether now
existing or hereafter created or acquired) the financial
statements of which shall be (or should have been) consolidated
with the financial statements of such person in accordance with
generally accepted accounting principles, but excluding any such
consolidated subsidiary of York International Corporation that
would not be so consolidated but for the effect of Financial
Accounting Standards Board Interpretation No. 46.
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Restrictions on Transfer of Principal Properties to
Specified Subsidiaries
The senior indenture provides that, so long as the senior debt
securities of any series are outstanding, we will not, and will
not cause or permit any restricted subsidiary to, transfer any
principal property to any subsidiary which was not a restricted
subsidiary at the time of transfer, unless the subsidiary that
is not a restricted subsidiary shall apply within one year after
the effective date of the transaction, or shall have committed
within one year of the effective date to apply, an amount equal
to the fair value of the principal property at the time of
transfer:
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to the acquisition, construction, development or improvement
o£ properties, facilities or equipment which are, or upon
the acquisition, construction, development or improvement will
be, a principal property or properties or a part thereof; |
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to the redemption of senior debt securities; |
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to the repayment of indebtedness for money borrowed having a
maturity of more than 12 months from the date of our most
recent consolidated balance sheet, other than any indebtedness
owed to any restricted subsidiary; or |
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in part to an acquisition, construction, development or
improvement and in part to redemption and/or repayment, in each
case as described above. |
The fair value of any principal property for purposes of this
paragraph will be as determined by our board of directors. In
lieu of applying all or any part of any amount to redemption of
senior debt securities, we may, within one year of the transfer,
deliver to the trustee under the senior indenture senior debt
securities of any series, other than senior debt securities made
the basis of a reduction in a mandatory sinking fund payment,
for cancellation and thereby reduce the amount to be applied to
the redemption of senior debt securities by an amount equivalent
to the aggregate principal amount of the senior debt securities
so delivered.
Certain Definitions
The following are the meanings of terms that are important in
understanding the covenants previously described:
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principal property means any manufacturing plant,
warehouse, office building or parcel of real property, including
fixtures but excluding leases and other contract rights which
might otherwise be deemed real property, owned by us or any of
its restricted subsidiaries, whether owned on the date of the
senior indenture or thereafter, that has a gross book value in
excess of 2% of the consolidated net tangible assets owned by
Johnson Controls or any restricted subsidiary. Any plant,
warehouse, office building or parcel of real property or portion
thereof which our board of directors determines is not of
material importance to the business conducted by us and our
restricted subsidiaries taken as a whole will not be principal
property. |
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restricted subsidiary means any subsidiary other
than an unrestricted subsidiary, and any subsidiary which is an
unrestricted subsidiary but which is designated by our board of
directors to be a restricted subsidiary. Our board of directors
may not designate any subsidiary to be a restricted subsidiary
if we would thereby breach any covenant or agreement contained
in the senior indenture, assuming for the purpose of determining
whether such a breach would occur that any secured debt of that
subsidiary was incurred at the time of the designation and that
any sale and leaseback transaction to which the subsidiary is
then a party was entered into at the time of the designation. |
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secured debt means indebtedness for borrowed money
which is secured by a security interest in any principal
property or any shares of capital stock or indebtedness of any
restricted subsidiary. |
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subsidiary means any corporation of which we, or we
and one or more of our subsidiaries, or any one or more of our
subsidiaries, directly or indirectly owns more than 50% of the
capital stock entitled to vote in the election of members of the
corporations board of directors. |
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unrestricted subsidiary means any subsidiary: |
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acquired or organized after March 31, 1989, other than any
subsidiary acquired or organized after that date that is a
successor, directly or indirectly, to any restricted subsidiary; |
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whose principal business or assets are located outside the
United States, its territories and possessions, Puerto Rico or
Canada; |
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the principal business of which consists of financing or
assisting in financing of customer construction projects or the
acquisition or disposition of products of dealers, distributors
or other customers; |
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engaged in the insurance business or whose principal business is
the ownership, leasing, purchasing, selling or development of
real property; and |
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substantially all the assets of which consist of stock or other
securities of a subsidiary or subsidiaries referred to above in
this sentence, unless and until that subsidiary is designated by
our board of directors to be a restricted subsidiary. |
Merger
Each indenture provides that we may, without the consent of the
holders of debt securities, consolidate with, or sell, lease or
convey all or substantially all of its assets to, or merge into
any other corporation, provided that:
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the successor corporation is a corporation organized and
existing under the laws of the United States or a state thereof; |
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the successor corporation expressly assumes the due and punctual
payment of the principal of and premium, if any, and interest on
all debt securities, according to their tenor, and the due and
punctual performance and observance of all the covenants and
conditions of the indenture to be performed by us by
supplemental indenture satisfactory to the trustee, executed and
delivered to the trustee by the successor corporation; and |
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immediately after giving effect to the transaction, no default
under the indenture has occurred and is continuing. |
In addition, we must provide to the trustee an opinion of legal
counsel that any such transaction and any assumption by a
successor corporation complies with the applicable provisions of
the indenture and that we have complied with all conditions
precedent provided in the indenture relating to such transaction.
Other than the covenants described above, or as set forth in any
accompanying prospectus supplement and/or other offering
material, neither indenture contains any covenants or other
provisions designed to afford holders of the debt securities
protection in the event of a takeover, recapitalization or a
highly leveraged transaction involving us.
Modification of the Indentures
With the consent of the holders of more than 50% in aggregate
principal amount of any series of debt securities then
outstanding under the applicable indenture, waivers,
modifications and
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alterations of the terms of either indenture may be made which
affect the rights of the holders of the series of debt
securities. However, no modification or alteration may be made
which will:
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extend the time or terms of payment of the principal at maturity
of, or the interest on, any series of debt securities, or reduce
principal or premium or the rate of interest, without the
consent of each holder of such series of debt securities; or |
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without the consent of all of the holders of any series of debt
securities then outstanding, reduce the percentage of debt
securities of that series, the holders of which are required to
consent to: |
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any supplemental indenture; |
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rescind and annul a declaration that the debt securities of any
series are due and payable as a result of the occurrence of an
event of default; |
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waive any past event of default under the applicable indenture
and its consequences; and |
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waive compliance with other specified provisions of the
applicable indenture. |
In addition, as described in the description of Events of
Default set forth below, holders of more than 50% in
aggregate principal amount of the debt securities of any series
then outstanding may waive past events of default in specified
circumstances and may direct the trustee in enforcement of
remedies.
We and the trustee may, without the consent of any holders,
modify and supplement the applicable indenture:
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to evidence the succession of another corporation to us under
the applicable indenture; |
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to evidence and provide for the replacement of the trustee; |
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with our concurrence, to add to our covenants for the benefit of
the holders; |
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to modify the applicable indenture to permit the qualification
of any supplemental indenture under the Trust Indenture Act of
1939; and |
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for other specified purposes. |
Defeasance, Satisfaction and Discharge to Maturity or
Redemption
Defeasance of any Series
If we deposit with the trustee, in trust, at or before maturity
or redemption, lawful money or direct obligations of the United
States, or of any other government which issued the currency in
which the debt securities of a series are denominated, or
obligations which are guaranteed by the United States or the
other government in the amounts and with a maturity so that the
proceeds therefrom will provide funds sufficient, in the opinion
of a nationally-recognized firm of independent public
accountants, to pay when due the principal, premium, if any, and
interest to maturity or to the redemption date, as the case may
be, with respect to any series of debt securities then
outstanding, then we may cease to comply with the terms of the
related indenture, including the restrictive covenants described
in this prospectus and events of default relating to the payment
of other indebtedness and the performance of covenants that are
not specifically described as events of default in the related
indenture, except that the following obligations would continue:
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our obligation to duly and punctually pay the principal of and
premium, if any, and interest on the series of debt securities
if the debt securities are not paid from the money or securities
held by the trustee; |
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the other events of default as described under Events of
Default below; and |
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other specified provisions of the applicable indenture
including, among others, those relating to registration,
transfer and exchange, lost or stolen securities, maintenance of
place of payment and, to the extent applicable to the series,
the redemption and sinking fund provisions of the applicable
indenture. |
Defeasance of debt securities of any series is subject to the
satisfaction of specified conditions, including, among others,
the absence of an event of default at the date of the deposit
and the perfection of the holders security interest in the
deposit.
Satisfaction and Discharge of any Series
Upon the deposit of money or securities contemplated above and
the satisfaction of specified conditions, we may also cease to
comply with our obligation to pay duly and punctually the
principal of and premium, if any, and interest on a particular
series of debt securities, or with any events of default, and
thereafter the holders of the series of debt securities will be
entitled only to payment out of the money or securities
deposited with the trustee. The specified conditions include,
among others, except in limited circumstances involving a
deposit made within one year of maturity or redemption:
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the absence of an event of default at the date of deposit or on
the 91st day thereafter; |
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our delivery to the trustee of an opinion of
nationally-recognized tax counsel, or our receipt or publication
of a ruling by the Internal Revenue Service, to the effect that
holders of the debt securities of the series will not recognize
income, gain or loss for federal income tax purposes as a result
of the deposit and discharge, and the holders will be subject to
federal income tax on the same amounts and in the same manner
and at the same times as would have been the case if the deposit
and discharge had not occurred; and |
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that the satisfaction and discharge will not result in the
delisting of the debt securities of that series from any
nationally-recognized exchange on which they are listed. |
Events of Default
As to any series of debt securities, an event of default is
defined in the indentures as being:
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default for 30 days in payment of any interest on the debt
securities of that series; or |
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failure to pay principal or premium, if any, with respect to the
debt securities of that series when due; or |
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failure in the deposit of any sinking fund installment with
respect to any series of debt securities when due; or |
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failure to observe or perform any other covenant in the
applicable indenture or debt securities of any series, other
than a covenant or warranty, a default in whose performance or
whose breach is specifically dealt with in the section of the
applicable indenture governing events of default, if the failure
continues for 75 days after written notice by the trustee
or the holders of at least 25% in aggregate principal amount of
the debt securities of the series then outstanding; or |
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uncured or unwaived failure to pay principal of or interest on
any of our other obligations for borrowed money, including
default under any other series of debt securities and including
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default on any guaranty of an obligation for borrowed money of a
restricted subsidiary, beyond any period of grace with respect
thereto if |
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the aggregate principal amount of any the obligation is in
excess of $50,000,000; and |
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the default in payment is not being contested by us in good
faith and by appropriate proceedings; or |
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specified events of bankruptcy, insolvency, receivership or
reorganization; or |
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any other event of default provided with respect to debt
securities of that series. |
Notice and Declaration of Defaults
So long as the debt securities of any series remain outstanding,
we will be required to furnish annually to the trustee a
certificate of one of our corporate officers stating whether, to
the best of their knowledge, we are in default under any of the
provisions of the applicable indenture, and specifying all
defaults, and the nature thereof, of which they have knowledge.
We will also be required to furnish to the trustee copies of
specified reports filed by us with the SEC.
Each indenture provides that the trustee will, within
90 days after the occurrence of a default with respect to
any series for which there are debt securities outstanding which
is continuing, give to the holders of those debt securities
notice of all uncured defaults known to it, including events
specified above without grace periods. Except in the case of
default in the payment of principal, premium, if any, or
interest on any of the debt securities of any series or the
payment of any sinking fund installment on the debt securities
of any series, the trustee may withhold notice to the holders if
the trustee in good faith determines that withholding notice is
in the interest of the holders of the debt securities.
The trustee or the holders of 25% in aggregate principal amount
of the outstanding debt securities of any series may declare the
debt securities of that series immediately due and payable upon
the occurrence of any event of default after expiration of any
applicable grace period. In some cases, the holders of a
majority in principal amount of the debt securities of any
series then outstanding may waive any past default and its
consequences, except a default in the payment of principal,
premium, if any, or interest, including sinking fund payments.
Actions upon Default
Subject to the provisions of the applicable indenture relating
to the duties of the trustee in case an event of default with
respect to any series of debt securities occurs and is
continuing, the applicable indenture provides that the trustee
will be under no obligation to exercise any of its rights or
powers under the applicable indenture at the request, order or
direction of any of the holders of debt securities outstanding
of any series unless the holders have offered to the trustee
reasonable indemnity. The right of a holder to institute a
proceeding with respect to the applicable indenture is subject
to conditions precedent including notice and indemnity to the
trustee, but the holder has a right to receipt of principal,
premium, if any, and interest on their due dates or to institute
suit for the enforcement thereof, subject to specified
limitations with respect to defaulted interest.
The holders of a majority in principal amount of the debt
securities 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. Any
direction by the holders will be in accordance with law and the
provisions of the related indenture, provided that the trustee
may decline to follow any such direction if the trustee
determines on the advice of counsel that the proceeding may not
be lawfully taken or would be materially or unjustly prejudicial
to holders not joining in the direction. The trustee will be
under no obligation to act in
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accordance with the direction unless the holders offer the
trustee reasonable security or indemnity against costs, expenses
and liabilities which may be incurred thereby.
Subordination of Subordinated Debt Securities
The senior debt securities will constitute part of our senior
indebtedness and will rank equally with all outstanding senior
debt. Except as set forth in the related prospectus supplement
and/or other offering material, the subordinated debt securities
will be subordinated, in right of payment, to the prior payment
in full of the senior indebtedness, including the senior debt
securities, whether outstanding at the date of the subordinated
indenture or thereafter incurred, assumed or guaranteed. The
term senior indebtedness means:
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the principal, premium, if any, and unpaid interest on
indebtedness for money borrowed; |
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purchase money and similar obligations; |
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obligations under capital leases; |
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guarantees, assumptions or purchase commitments relating to, or
other transactions as a result of which we are responsible for
the payment of, indebtedness of others; |
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renewals, extensions and refunding of any senior indebtedness; |
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interest or obligations in respect of any senior indebtedness
seeming after the commencement of any insolvency or bankruptcy
proceedings; and |
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obligations associated with derivative products, including
interest rate and currency exchange contracts, foreign exchange
contracts, commodity contracts, and similar arrangements unless,
in each case, the instrument by which we incurred, assumed or
guaranteed the indebtedness or obligations described in the
foregoing clauses expressly provides that the indebtedness or
obligation is not senior in right of payment to the subordinated
debt securities. |
Upon any distribution of our assets in connection with any
dissolution, winding up, liquidation or reorganization of our
company, whether in a bankruptcy, insolvency, reorganization or
receivership proceeding or upon an assignment for the benefit of
creditors or any other marshalling of our assets and liabilities
or otherwise, except a distribution in connection with a merger
or consolidation or a conveyance or transfer of all or
substantially all of our properties in accordance with the
subordinated indenture, the holders of all senior indebtedness
will first be entitled to receive payment of the full amount due
on the senior indebtedness, or provision will be made for that
payment in money or moneys worth, before the holders of
any of the subordinated debt securities are entitled to receive
any payment in respect of the subordinated debt securities.
In the event that a payment default occurs and is continuing
with respect to the senior indebtedness, the holders of all
senior indebtedness will first be entitled to receive payment of
the full amount due on the senior indebtedness, or provision
will be made for that payment in money or moneys worth,
before the holders of any of the subordinated debt securities
are entitled to receive any payment in respect of the
subordinated debt securities. In the event that the principal of
the subordinated debt securities of any series is declared due
and payable pursuant to the subordinated indenture and that
declaration is not rescinded and annulled, the holders of all
senior indebtedness outstanding at the time of the declaration
will first be entitled to receive payment of the full amount due
on the senior indebtedness, or provision will be made for that
payment in money or moneys worth, before the holders of
any of the subordinated debt securities are entitled to receive
any payment in respect of the subordinated debt securities.
This subordination will not prevent the occurrence of any event
of default with respect to the subordinated debt securities.
There is no limitation on the issuance of additional senior
indebtedness in the subordinated indenture.
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Governing Law
The indentures and the debt securities will be governed by, and
construed in accordance with, the law of the State of New York.
Concerning the Trustee
We and our affiliates utilize a full range of treasury services,
including investment management and currency and derivative
trading, from the trustee and its affiliates in the ordinary
course of business to meet our funding and investment needs.
Under each indenture, the trustee is required to transmit annual
reports to all holders regarding its eligibility and
qualifications as trustee under the applicable indenture and
specified related matters.
Book-Entry, Delivery and Form
Except as set forth below, debt securities will be represented
by one or more permanent, global notes in registered form
without interest coupons (the Global Notes).
The Global Notes will be deposited upon issuance with the
trustee as custodian for The Depository Trust Company
(DTC), in New York, New York, and registered in the
name of DTCs nominee, Cede & Co., in each case for
credit to an account of a direct or indirect participant in DTC
as described below. Beneficial interests in the Global Notes may
be held through the Euroclear System (Euroclear) and
Clearstream Banking, S.A. (Clearstream) (as indirect
participants in DTC).
Except as set forth below, the Global Notes may be transferred,
in whole but not in part, only to another nominee of DTC or to a
successor of DTC or its nominee. Beneficial interests in the
Global Notes may not be exchanged for Certificated Notes except
in the limited circumstances described below. See
Exchange of Global Notes for Certificated Notes. Except in
the limited circumstances described below, owners of beneficial
interests in the Global Notes will not be entitled to receive
physical delivery of Certificated Notes.
Transfers of beneficial interests in the Global Notes will be
subject to the applicable rules and procedures of DTC and its
direct or indirect participants (including, if applicable, those
of Euroclear and Clearstream), which may change from time to
time.
Depository Procedures
The following description of the operations and procedures of
DTC, Euroclear and Clearstream are provided solely as a matter
of convenience. These operations and procedures are solely
within the control of the respective settlement systems and are
subject to changes by them. We take no responsibility for these
operations and procedures and urge investors to contact the
system or their participants directly to discuss these matters.
DTC has advised us that DTC is a limited-purpose trust company
created to hold securities for its participating organizations
(collectively, the Participants) and to facilitate
the clearance and settlement of transactions in those securities
between Participants through electronic book-entry changes in
accounts of its Participants. The Participants include
securities brokers and dealers (including the initial
purchasers), banks, trust companies, clearing corporations and
certain other organizations. Access to DTCs system is also
available to other entities such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly
(collectively, the Indirect Participants). Persons
who are not Participants may beneficially own securities held by
or on behalf of DTC only through the Participants or the
Indirect Participants. The ownership interests in, and transfers
of ownership
24
interests in, each security held by or on behalf of DTC are
recorded on the records of the Participants and Indirect
Participants.
DTC has also advised us that, pursuant to procedures established
by it:
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upon deposit of the Global Notes, DTC will credit the accounts
of Participants designated by the initial purchasers with
portions of the principal amount of the Global Notes; and |
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ownership of these interests in the Global Notes will be shown
on, and the transfer of ownership of these interests will be
effected only through, records maintained by DTC (with respect
to the Participants) or by the Participants and the Indirect
Participants (with respect to other owners of beneficial
interests in the Global Notes). |
Investors in the Global Notes who are Participants in DTCs
system may hold their interests therein directly through DTC.
Investors in the Global Notes who are not Participants may hold
their interests therein indirectly through organizations
(including Euroclear and Clearstream) which are Participants in
such system. Euroclear and Clearstream may hold interests in the
Global Notes on behalf of their participants through
customers securities accounts in their respective names on
the books of their respective depositories, which are Euroclear
Bank S.A./ N.V., as operator of Euroclear, and Citibank, N.A.,
as operator of Clearstream. All interests in a Global Note,
including those held through Euroclear or Clearstream, may be
subject to the procedures and requirements of DTC. Those
interests held through Euroclear or Clearstream may also be
subject to the procedures and requirements of such systems.
The laws of some states require that certain Persons take
physical delivery in definitive form of securities that they
own. Consequently, the ability to transfer beneficial interests
in a Global Note to such Persons will be limited to that extent.
Because DTC can act only on behalf of Participants, which in
turn act on behalf of Indirect Participants, the ability of a
Person having beneficial interests in a Global Note to pledge
such interests to Persons that do not participate in the DTC
system, or otherwise take actions in respect of such interests,
may be affected by the lack of a physical certificate evidencing
such interests.
Except as described below, owners of an interest in the
Global Notes will not have notes registered in their names, will
not receive physical delivery of Certificated Notes and will not
be considered the registered owners or Holders
thereof under the indenture for any purpose.
Payments in respect of the principal of, and interest and
premium, if any, on a Global Note registered in the name of DTC
or its nominee will be payable to DTC in its capacity as the
registered Holder under the indenture. Under the terms of the
indenture, the Company and the trustee will treat the Persons in
whose names the notes, including the Global Notes, are
registered as the owners of the notes for the purpose of
receiving payments and for all other purposes. Consequently,
neither the Company, the trustee nor any agent of the Company or
the trustee has or will have any responsibility or liability for:
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any aspect of DTCs records or any Participants or
Indirect Participants records relating to or payments made
on account of beneficial ownership interests in the Global Notes
or for maintaining, supervising or reviewing any of DTCs
records or any Participants or Indirect Participants
records relating to the beneficial ownership interests in the
Global Notes; or |
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any other matter relating to the actions and practices of DTC or
any of its Participants or Indirect Participants. |
DTC has advised us that its current practice, at the due date of
any payment in respect of securities such as the notes, is to
credit the accounts of the relevant Participants with the
payment on the payment date unless DTC has reason to believe it
will not receive payment on such payment date. Each relevant
Participant is credited with an amount proportionate to its
beneficial ownership of
25
an interest in the principal amount of the notes as shown on the
records of DTC. Payments by the Participants and the Indirect
Participants to the beneficial owners of notes will be governed
by standing instructions and customary practices and will be the
responsibility of the Participants or the Indirect Participants
and will not be the responsibility of DTC, the trustee or the
Company. Neither the Company nor the trustee will be liable for
any delay by DTC or any of its Participants in identifying the
beneficial owners of the notes, and the Company and the trustee
may conclusively rely on and will be protected in relying on
instructions from DTC or its nominee for all purposes.
Transfers between Participants in DTC will be effected in
accordance with DTCs procedures, and will be settled in
same-day funds, and transfers between participants in Euroclear
and Clearstream will be effected in accordance with their
respective rules and operating procedures.
Cross-market transfers between the Participants in DTC, on the
one hand, and Euroclear or Clearstream participants, on the
other hand, will be effected through DTC in accordance with
DTCs rules on behalf of Euroclear or Clearstream, as the
case may be, by its depositary; however, such cross-market
transactions will require delivery of instructions to Euroclear
or Clearstream, as the case may be, by the counterparty in such
system in accordance with the rules and procedures and within
the established deadlines (Brussels time) of such system.
Euroclear or Clearstream, as the case may be, will, if the
transaction meets its settlement requirements, deliver
instructions to its respective depositary to take action to
effect final settlement on its behalf by delivering or receiving
interests in the relevant Global Note in DTC, and making or
receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. Euroclear
participants and Clearstream participants may not deliver
instructions directly to the depositories for Euroclear or
Clearstream.
DTC has advised us that it will take any action permitted to be
taken by a Holder of notes only at the direction of one or more
Participants to whose account DTC has credited the interests in
the Global Notes and only in respect of such portion of the
aggregate principal amount of the notes as to which such
Participant or Participants has or have given such direction.
However, if there is an Event of Default under the notes, DTC
reserves the right to exchange the Global Notes for definitive
notes in registered certificated form (Certificated
Notes), and to distribute such notes to its Participants.
Although DTC, Euroclear and Clearstream have agreed to the
foregoing procedures to facilitate transfers of interests in the
Global Notes among participants in DTC, Euroclear and
Clearstream, they are under no obligation to perform or to
continue to perform such procedures, and may discontinue such
procedures at any time. None of the Company, the trustee or any
of their respective agents will have any responsibility for the
performance by DTC, Euroclear or Clearstream or their respective
participants or indirect participants of their respective
obligations under the rules and procedures governing their
operations.
Exchange of Global Notes for Certificated Notes
A Global Note is exchangeable for Certificated Notes in minimum
denominations of $1,000 and in integral multiples of $1,000, if:
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DTC (a) notifies us that it is unwilling or unable to
continue as depositary for the Global Notes or (b) has
ceased to be a clearing agency registered under the Exchange Act
and in either event the Company fails to appoint a successor
depositary within 90 days; or |
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there has occurred and is continuing an Event of Default and DTC
notifies the trustee of its decision to exchange the Global Note
for Certificated Notes. |
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Beneficial interests in a Global Note also may be exchanged for
Certificated Notes in the limited other circumstances permitted
by the indenture. In all cases, Certificated Notes delivered in
exchange for any Global Note or beneficial interests in Global
Notes will be registered in the names, and issued in any
approved denominations, requested by or on behalf of the
depositary (in accordance with its customary procedures).
Same Day Settlement and Payment
We will make payments in respect of the notes represented by the
Global Notes (including principal, premium, if any, and
interest) by wire transfer of immediately available funds to the
accounts specified by the Global Note Holder. We will make all
payments of principal, interest and premium, if any, with
respect to Certificated Notes by wire transfer of immediately
available funds to the accounts specified by the Holders of the
Certificated Notes or, if no such account is specified, by
mailing a check to each such Holders registered address.
The notes represented by the Global Notes are expected to be
eligible to trade in DTCs Same-Day Funds Settlement
System, and any permitted secondary market trading activity in
such notes will, therefore, be required by DTC to be settled in
immediately available funds. The Company expects that secondary
trading in any Certificated Notes will also be settled in
immediately available funds.
Because of time zone differences, the securities account of a
Euroclear or Clearstream participant purchasing an interest in a
Global Note from a Participant in DTC will be credited, and any
such crediting will be reported to the relevant Euroclear or
Clearstream participant, during the securities settlement
processing day (which must be a business day for Euroclear and
Clearstream) immediately following the settlement date of DTC.
DTC has advised us that cash received in Euroclear or
Clearstream as a result of sales of interests in a Global Note
by or through a Euroclear or Clearstream participant to a
Participant in DTC will be received with value on the settlement
date of DTC but will be available in the relevant Euroclear or
Clearstream cash account only as of the business day for
Euroclear or Clearstream following DTCs settlement date.
Description of the warrants to purchase common stock or
preferred stock
We may issue, alone or together with common stock or preferred
stock, stock warrants for the purchase of common stock or
preferred stock. The stock warrants will be issued under a stock
warrant agreement to be entered into between us and a warrant
agent to be selected at the time of the issue. The stock warrant
agreement may include or incorporate by reference standard
warrant provisions substantially in the form of the standard
stock warrant provisions incorporated by reference as an exhibit
to the registration statement of which this prospectus is a part.
General
If stock warrants are offered, the related prospectus supplement
and/or other offering material will describe the designation and
terms of the stock warrants, including, among other things, the
following:
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the offering price, if any; |
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the designation and terms of the common stock or preferred stock
purchasable upon exercise of the stock warrants; |
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if applicable, the date on and after which the stock warrants
and the related offered securities will be separately
transferable; |
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the number of shares of common stock or preferred stock
purchasable upon exercise of one stock warrant and the initial
price at which the shares may be purchased upon exercise; |
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the date on which the right to exercise the stock warrants will
commence and the date on which that right will expire; |
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a discussion of material federal income tax considerations; |
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the call provisions, if any; |
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the currency, currencies or currency units in which the offering
price, if any, and exercise price are payable; |
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the antidilution provisions of the stock warrants; and |
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any other terms of the stock warrants. |
Exercise of Stock Warrants
Stock warrants may be exercised by surrendering to the stock
warrant agent the stock warrant certificate with the form of
election to purchase on the reverse side of the certificate duly
completed and signed by the warrant holder, or its duly
authorized agent, with such signature to be guaranteed by a bank
or trust company, by a broker or dealer which is a member of the
National Association of Securities Dealers, Inc. or by a member
of a national securities exchange. The form of election should
indicate the warrant holders election to exercise all or a
portion of the stock warrants evidenced by the certificate.
Surrendered stock warrant certificates must be accompanied by
payment of the aggregate exercise price of the stock warrants to
be exercised, as set forth in the related prospectus supplement
and/or other offering material. The payment should be made in
U.S. dollars, unless otherwise provided in the related
prospectus supplement and/or other offering material. Upon the
stock warrant agents receipt of the surrendered stock
warrant certificates and payment of the aggregate exercise price
of the stock warrants, the stock warrant agent will request that
the transfer agent issue and deliver to or upon the written
order of the exercising warrant holder, a certificate
representing the number of shares of common stock or preferred
stock purchased. If less than all of the stock warrants
evidenced by any stock warrant certificate are exercised, the
stock warrant agent will deliver to the exercising warrant
holder a new stock warrant certificate representing the
unexercised stock warrants.
Antidilution and Other Provisions
The exercise price payable and the number of shares of common
stock or preferred stock purchasable upon the exercise of each
stock warrant, and the number of stock warrants outstanding,
will be subject to adjustment if specified events occur,
including the issuance of a stock dividend to holders of common
stock or preferred stock or a combination, subdivision or
reclassification of common stock or preferred stock. In lieu of
adjusting the number of shares of common stock or preferred
stock purchasable upon exercise of each stock warrant, we may
elect to adjust the number of stock warrants. No adjustment in
the number of shares purchasable upon exercise of the stock
warrants will be required until cumulative adjustments require
an adjustment of at least 1% of the number of shares
purchasable. We may, at our option, reduce the exercise price at
any time. No fractional shares will be issued upon exercise of
stock warrants, but we will pay the cash value of any fractional
shares otherwise issuable. In the case of any consolidation,
merger, or sale or conveyance of our property as an entirety or
substantially as an entirety, the holder of each outstanding
stock warrant will have the right to the kind and amount of
shares of stock and other securities and property (including
cash) receivable by a holder of the number of shares of common
stock or preferred stock into which the stock warrants were
exercisable immediately prior to the consolidation, merger, or
sale or conveyance.
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No Rights as Shareholders
Holders of stock warrants, by virtue of being such holders, will
not be entitled to vote, consent, receive dividends, receive
notice as shareholders with respect to any meeting of
shareholders for the election of directors of Johnson Controls
or any other matter, or to exercise any rights whatsoever as
shareholders of Johnson Controls.
Description of the warrants to purchase debt securities
We may issue, alone or together with debt securities, debt
warrants for the purchase of debt securities. The debt warrants
will be issued under debt warrant agreement to be entered into
between us and a warrant agent to be selected at the time of the
issue. The debt warrant agreement may include or incorporate by
reference standard warrant provisions substantially in the form
of the standard debt warrant provisions incorporated by
reference as an exhibit to the registration statement of which
this prospectus is a part.
General
If debt warrants are offered, the related prospectus supplement
and/or other offering material will describe the designation and
terms of the debt warrants, including, among other things, the
following:
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the offering price, if any; |
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the designation, aggregate principal amount and terms of the
debt securities purchasable upon exercise of the debt warrants; |
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if applicable, the date on and after which the debt warrants and
the related offered securities will be separately transferable; |
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the principal amount of debt securities purchasable upon
exercise of one debt warrant and the price at which that
principal amount of debt securities may be purchased upon
exercise; |
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the date on which the right to exercise the debt warrants will
commence and the date on which that right will expire; |
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a discussion of material federal income tax considerations; |
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whether the warrants represented by the debt warrant
certificates will be issued in registered or bearer form; |
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the currency, currencies or currency units in which the offering
price, if any, and exercise price are payable; |
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the antidilution provisions of the debt warrants; and |
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any other terms of the debt warrants. |
Holders of debt warrants do not have any of the rights of
holders of debt securities, including the right to receive the
payment of principal of, or interest on, the debt securities or
to enforce any of the covenants of the debt securities or the
related indenture except as otherwise provided in the related
indenture.
Exercise of Debt Warrants
Debt warrants may be exercised by surrendering the debt warrant
certificate at the warrant agent office of the debt warrant
agent, with the form of election to purchase on the reverse side
of the debt warrant certificate completed and signed by the
warrant holder, or its duly authorized agent,
29
with such signature to be guaranteed by a bank or trust company,
by a broker or dealer which is a member of the National
Association of Securities Dealers, Inc. or by a member of a
national securities exchange. The form of election should
indicate the warrant holders election to exercise all or a
portion of the debt warrants evidenced by the certificate.
Surrendered debt warrant certificates must be accompanied by
payment of the aggregate exercise price of the debt warrants to
be exercised, as set forth in the related prospectus supplement
and/or other offering material.
Upon the exercise of debt warrants, we will issue the debt
securities in authorized denominations in accordance with the
instructions of the exercising warrant holder. If less than all
of the debt warrants evidenced by the debt warrant certificate
are exercised, a new debt warrant certificate will be issued
representing the unexercised debt warrants.
Description of the stock purchase contracts and
stock purchase units
We may issue stock purchase contracts that obligate you to
purchase from us, and obligate us to sell to you, a specified or
varying number of shares of common stock at a future date or
dates. Alternatively, the stock purchase contracts may obligate
us to purchase from you, and obligate you to sell to us, a
specified or varying number of shares of common stock or
preferred stock at a future date or dates. The price per share
of common stock or preferred stock may be fixed at the time the
stock purchase contracts are entered into or may be determined
by reference to a specific formula set forth in the stock
purchase contracts. Any stock purchase contract may include
anti-dilution provisions to adjust the number of shares to be
delivered pursuant to the stock purchase contract upon the
occurrence of specified events.
The stock purchase contracts may be entered into separately or
as a part of stock purchase units consisting of a stock purchase
contract and, as security for your obligations to purchase or
sell the shares of common stock or preferred stock, as the case
may be, under the stock purchase contracts, either:
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common stock; |
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preferred stock; |
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debt securities; or |
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debt obligations of third parties, including U.S. Treasury
securities. |
If we issue stock purchase units where debt obligations of third
parties are used as security for your obligations to purchase or
sell shares of common stock or preferred stock, we will include
in the prospectus supplement and/or other offering material
relating to the offering information about the issuer of the
debt securities. Specifically, if the issuer has a class of
securities registered under the Securities Exchange Act of 1934
and is either eligible to register its securities on
Form S-3 under the
Securities Act of 1933 or meets the listing criteria to be
listed on a national securities exchange, we will include a
brief description of the business of the issuer, the market
price of its securities and how you can obtain more information
about the issuer. If the issuer does not meet the criteria
described in the previous sentence, we will include
substantially all of the information that would be required if
the issuer were making a public offering of the debt securities.
The stock purchase contracts may require us to make periodic
payments to you or vice versa, and these payments may be
unsecured or prefunded and may be paid on a current or deferred
basis. The stock purchase contracts may require you to secure
your obligations in a specified manner and,
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in some circumstances, we may deliver newly issued prepaid stock
purchase contracts upon release to you of any collateral
securing your obligations under the original stock purchase
contract.
The applicable prospectus supplement and/or other offering
material will describe the specific terms of any stock purchase
contracts or stock purchase units and, if applicable, prepaid
stock purchase contracts.
Legal matters
The validity of the securities offered by this prospectus will
be passed upon for us by Jerome D. Okarma, our Vice President,
Secretary and General Counsel, and/or Foley & Lardner LLP,
Milwaukee, Wisconsin and for any underwriters or agents by
Mayer, Brown, Rowe & Maw LLP, Chicago, Illinois. As of
December 20, 2005, Mr. Okarma beneficially owned 5,139
shares of our common stock, and held options to purchase 116,000
shares of our common stock, of which options to purchase 38,000
shares were exercisable. The opinions of Mr. Okarma, Foley
& Lardner LLP and Mayer, Brown, Rowe & Maw LLP may be
conditioned upon and may be subject to assumptions regarding
future action required to be taken by us and any underwriters,
dealers or agents in connection with the issuance and sale of
any securities. The opinions of Mr. Okarma, Foley &
Lardner LLP and Mayer, Brown, Rowe & Maw LLP with respect to
securities may be subject to other conditions and assumptions,
as indicated in the prospectus supplement.
Experts
The financial statements and managements assessment of the
effectiveness of internal control over financial reporting
(which is included in Managements Report on Internal
Control Over Financial Reporting) incorporated in this
prospectus by reference to the Annual Report on
Form 10-K for the
year ended September 30, 2005 have been so incorporated in
reliance on the report (which contains an explanatory paragraph
relating to the Companys restatement of its financial
statements as described in Notes 18 and 21 to the financial
statements and an adverse opinion on the effectiveness of
internal control over financial reporting), of
PricewaterhouseCoopers LLP, an independent registered public
accounting firm, given on the authority of said firm as experts
in auditing and accounting.
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Where you can find more information
We file annual, quarterly and current reports, proxy statements
and other information with the SEC under the Securities Exchange
Act of 1934. You may read and copy that information at the
SECs public reference room located at 100 F Street,
N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for
further information relating to the public reference room. You
may also obtain copies of this information by mail from the
Public Reference Section of the Commission, 100 F Street,
N. E., Washington, D.C. 20549, at prescribed rates.
The SEC also maintains a web site that contains reports, proxy
statements and other information about issuers, including
Johnson Controls, that file electronically with the SEC. The
address of that site is http://www.sec.gov. You can also inspect
reports, proxy statements and other information about us at the
offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
The SEC allows us to incorporate by reference
information into this prospectus. This means that we can
disclose important information to you by referring you to
another document filed separately with the SEC. The information
incorporated by reference is considered to be a part of this
prospectus, except for any information that is superseded by
information that is included directly in this document.
This prospectus incorporates by reference the documents listed
below that we have previously filed with the SEC. The documents
contain important information about us and our financial
condition.
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Our Filings with the SEC |
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Annual Report on Form 10-K
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Year ended September 30, 2005
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Current Report on Form 8-K
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December 6, 2005
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December 9, 2005
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We also incorporate by reference any future filings we make with
the SEC under Sections 13(a), 13(c), 14(d) or l5(d) of the
Securities Exchange Act of 1934 after the date of the filing of
this registration statement, and until we have sold all of the
securities to which this prospectus relates or the offering is
otherwise terminated. Our subsequent filings with the SEC will
automatically update and supersede information in this
prospectus.
You may obtain a copy of any of the documents incorporated by
reference in this registration statement (excluding exhibits to
those documents unless they are specifically incorporated by
reference into those documents) at no cost by writing to or
calling our Secretary at:
Johnson Controls, Inc.
5757 North Green Bay Avenue
Milwaukee, Wisconsin 53209
(414) 524-1200
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