Allegion Annual Report 2013

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FY2013 Annual Report · Allegion

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Annual Report 2013

We are
Allegion

A team of experts whose histories tell

a common story: A danger perceived.

A solution realized. A crisis averted.

We believe in anticipating opportunities

by sharpening our skills as individuals

and strengthening our efforts through

collaboration.

We believe in a safer, more secure world.

We believe in peace of mind. We believe

in being true to ourselves and to those

who trust in our protection.

We are many. We are one.

We are Allegion.

Allegion (NYSE: ALLE) helps keep people safe where they live, work and visit. Allegion is pioneering safety as a provider of
security solutions for homes and businesses through 27 global brands. Allegion specializes in security around the doorway and
beyond: everything from residential and commercial locks, door closers and exit devices, steel doors and frames, to access
control and workforce productivity systems. Allegion, a member of the S&P 500, is a $2 billion business employing more than
8,000 people and offering products in more than 120 countries across the world.

Adjusted
operating
margin
17.8%

Net
revenues
$2 billion

ALLE

Dec. 2

Adjusted
earnings
per share
$2.13

Letter from CEO David Petratis

Dear
Shareholders,

At precisely 9:30 a.m. on
December 2, 2013, Allegion
debuted on the New York
Stock Exchange as a standalone,
publicly traded company.

Our commercial and residential security businesses
were separated from Ingersoll Rand and we became
an independent company—a move that allowed us to
do several things. First, we were able to pursue a more
focused strategy. Second, our Board of Directors and
management were able to focus exclusively on our
business’ growth and expansion. Third, the move
permits Allegion to align its capital allocation strategies
behind a focused security portfolio. And ﬁnally, we
were able to provide investors with a more targeted
investment opportunity.

The spin-off was a milestone in our company’s
history. But it was far from the ﬁrst. The brands that
make up Allegion were founded by some of the true
originators of the international safety and security
industry—making us a new company with over a
century of experience in developing products that
keep people safe where they live, work and visit.

Our brands span the globe—from the Americas, to
our Europe, Middle East, India and Africa (EMEIA)
and Asia-Paciﬁc regions. We own 27 brands and
do business in more than 120 countries—basically,
wherever the sun rises or sets. We operate 19
manufacturing facilities with more than 8,000
employees and 700 sales representatives—an
incomparable company of experts, all of whom
have already contributed immeasurably to
Allegion’s launch.

Letter from CEO David Petratis, cont.

It’s a good time
to be Allegion

We are in attractive, recovering markets.
We have industry-leading brands. We
possess strong operational capabilities
that support the needs of our customers.
We deliver market-leading ﬁnancial
performance and cash ﬂows. Overall,
we believe this forms the foundation for
long-term success. Already, we’re listed
on the S&P 500. We’ve begun to deliver
on our promises to our shareholders,
our customers and our employees.
We’ve declared dividends, completed
a strategic acquisition, made an equity
investment and we’re generating cash
ﬂow—which is key to our growth strategy.

The bottom line is we’re a strong,
innovative company poised for
sustainable, proﬁtable growth in
the markets we serve today. We will
continue this momentum with an eye to
the future and our customers’ success.

Five pillars
of growth

Expand in
core markets

Grow in
emerging markets

Innovation in
existing and new
product categories

Operational
excellence

Opportunistic
acquisitions

Our strategies

Allegion launched at the end of 2013. And in
our ﬁrst year, we’re forming the foundation of
our future success.

To achieve sustained, proﬁtable growth, we’ve
identiﬁed the ways in which we’re planning to
develop: by expanding in core markets; by growing
in emerging markets; by innovating in existing
and new product categories; by focusing on
operational excellence and by seeking
opportunistic acquisitions.

Expand in core markets
We understand end-user needs and regulatory
requirements in the market’s key segments,
including education; health care; government; and
general commercial and residential (single and
multi-family). We’ve developed speciﬁc value
propositions across those segments, and we’ll
continue to leverage our knowledge and experience
to ﬁnd the opportunities that best serve our
end-users. We’ll continue to invest in our products,
and we’ll expand our speciﬁcation and service
capabilities.

We see a great opportunity in the North American
market recovery, where our largest position of
revenue and proﬁtability exists.

Grow in emerging markets
As shown by our growing Asia-Paciﬁc sales, we
have a proven history of successfully entering
developing markets. And we intend to expand
further when it makes sense.

As global safety demands increase, and security
requirements grow more sophisticated, we will ﬁnd
opportunities for growth. And as economically
developing markets achieve higher living standards
and greater urbanization, we’ll be there to innovate
and to shape the security products industry, and
keep people safe where they work and live.

We’ll invest further in supply chain capabilities, and
we’ll work with local partners and code-making
bodies to promote efficient, consistent safety and
security standards.

Letter from CEO David Petratis, cont.

Innovation in existing
and new product categories
Increasingly, end-users are embracing
electronic security, with electronic-related
product sales growing at nearly twice the
rate of traditional mechanical solutions.

The future of our company lies in addressing
the needs of an increasingly connected
world—and we’re already meeting that
challenge by crafting innovative solutions
(such as a recent solution for remote
classroom lockdown in schools).

Moving forward, we intend to invest even
further in the electronic part of our business,
while maintaining a constant level of
dedication to the continuous improvement
and advancement of our mechanical
products.

According to IMS Research, we’re the world’s
leading global manufacturer and marketer of
electro-magnetic locks. Through continued
investment and product development, we
expect to expand our market leadership to
other product categories.

Operational excellence
We’re proud of our operational expertise.
But we can’t be satisﬁed. It’s in our DNA
to constantly search out ways to make our
best efforts better.

Our operational excellence begins with
understanding what our customers value.
Once we’ve identiﬁed their speciﬁc needs, we
create value that differentiates us from our
competition. Finally, we improve our internal
systems and processes as we deliver
increased value to our customers.

Our ability to deliver tailored solutions to
end-users within a short timeframe is a
competitive advantage, and one of the keys
to our success. In selected locations, our
restructuring initiatives have already begun
to reduce overall supply chain cycle time,
leveraging the Americas’ expertise in
operational excellence to drive improved
EMEIA margin performance. We will continue
to look for efficiencies in other locations
around the globe.

Opportunistic acquisitions
In January 2014, we acquired certain assets
of Schlage Lock de Columbia S.A. And in March,
we made a strategic equity investment in
Germany’s Eco Schulte. These were important
ﬁrst steps in executing our growth strategy,
and will serve us well as we expand our
product lines around the world.

But we don’t intend to stop there. A
disciplined approach to acquisitions is a
signiﬁcant part of our growth strategy. We’ve
already identiﬁed (and will continue to
identify) new targets that will broaden our
product portfolio, expand our geographic
footprint and boost our position in strategic
market segments.

Redeﬁne security
In a constantly changing industry, we’re
always seeking to address the next safety
challenges before they arrive. By addressing
the growing convergence of emerging
technology and mechanical hardware, we’re
redeﬁning security for our end-users. And as
we follow our growth strategies, we’re also
providing new measures of security for our
customers, employees and shareholders.

The increased demand for electronic security Our greatest institutional expertise has always focused on the devices that close, control and protect entry to the places where people live, work and visit. Now, we’re experiencing a technological revolution in those devices, with end-users wanting intelligent remote operations and dierent methods of gaining entry—such as cards, phones and even eyes. Our pioneering spirit gives us the capability to develop and introduce innovative electronic technologies, while retaining our leading position in the mechanical industry. Of course, none of this would be possible without our 8,000 hard-working employees around the world. Our company’s past success has been rooted in hard work and inspiration. And while individual inventions can always be improved, the hard work and innovation that create them remain timeless.We are a team of experts Our years of experience have given us a deep familiarity with the many dierent variances of building codes around the world. This expertise enables our speciﬁcation writers and engineers to accurately identify a project’s unique needs and deliver the appropriate security solutions for architects, contractors, distribution partners and end-users. Speciﬁcation writing is an important strength for us, and one that we will continue to leverage. Whenever we can establish our products in new construction, whether residential or commercial, we can remain there for the future life of that structure, to provide any required modiﬁcations or add-ons.Setting a benchmark for growthIn this, our ﬁrst year as an independent company, we stand as a respected, leading global provider of security products and solutions. In homes and businesses alike, we create peace of mind by securing all the places where people live and thrive, whether at work or play. Over 100 years and thousands of miles, our brands can boast a proud history of looking forward. And in the months, years and decades to come, we will continue to meet the security challenges of our age in the same ways that our forebears met the challenges of theirs—by anticipating the next test, by outperforming our competitors—and by pioneering safety. Regards, David Petratis Chairman, President and Chief Executive OcerAllegion plc Past. Present. Future.

Where
we’ve been

The brands that make up Allegion began by solving problems in

new ways. And they’ve remained trailblazers in the decades since.

A proud heir to that tradition, Allegion believes that those who

stay focused on the future will always ﬁnd new ground to break.

Allegion became an independent company on December 1, 2013,

and began trading on the NYSE the next day—bringing with it such

historic businesses as Schlage, Von Duprin and CISA. Though we

are a new company, we hold a wealth of experience in customer

service and expertise—a unique heritage that will enable us to

swiftly expand our leadership role.

pioneering spirit
of our originators.

In a future that may
sometimes seem perilous
and unsure, we provide
our customers with
unparalleled safety and
peace of mind. In this ﬁrst
year, and in all years to
follow, Allegion is and
will be working to give
the world a dose of
much-needed normalcy.

Where we’re going
Now, it’s 2014, and we’re
still learning what it
means to be Allegion.
We are proud of our rich
history, and excited to take
ownership of the vast
future that lies before us.

We intend to run this
company as a house of
brands—adding new ones
where it makes sense, and
keeping an eye on the
ever-evolving security
landscape. As businesses
and institutions around
the world face new
security challenges,
we will intensify our
commitment to research
and development; and
produce innovative

solutions that ease our
customers’ minds, and
free them to focus on
their goals.

As electronic and
mechanical landscapes
converge, we will continue
to lead the way, and look
ahead to new possibilities.
In emerging markets, too,
we are forging ahead—
embracing growth
opportunities, and setting
new standards for safety
and security.

Finally, as a new company
made up of long-respected,
market-leading brands,
we are acting as a team
of experts—working in
unison, and honoring the

Financials

At a
glance

YEAR ENDED DECEMBER 31, 2013

YEAR ENDED DECEMBER 31, 2012

Spin-off

related and

Adjusted

related and

Adjusted

Reported

other charges

(non-GAAP)

Reported

other charges

(non-GAAP)

Net revenues

$ 2,093.5

(52.0)1

$ 2,041.5

$ 2,046.6

(78.0)1

$ 1,968.6

Operating income

Operating margin

235.8

11.3%

127.82

363.6

17.8%

368.6

18.0%

Earnings before income taxes

Provision for income taxes

Earnings from continuing operations

218.5
174.2
44.3

127.8
(40.1)3
167.9

346.3
134.1
212.2

363.9
135.9
228.0

8.22

8.2
2.53
5.7

376.8

19.1%

372.1
138.4
233.7

Non-controlling interest

12.5

(5.3)4

7.2

5.7

—4

5.7

Net earnings from continuing

operations attributable to Allegion plc

31.8

173.2

$ 205.0

$ 222.3

5.7

$ 228.0

Diluted earnings per ordinary share

attributable to Allegion plc shareholders:

0.33

1.80

2.13

2.32

0.06

2.38

Reconciliation of GAAP to non-GAAP earnings from continuing operations

The Company has presented revenue, operating income, operating margin, provision for income taxes, earnings from continuing operations and diluted earnings per share (EPS) from
continuing operations on both a U.S. GAAP basis and on an adjusted basis because the Company’s management believes it may assist investors in evaluating the Company’s on-going
operations as a standalone public company. Adjustments to revenue, operating income, operating margin, provision for income taxes, and earnings and diluted EPS from continuing
operations include items that are considered to be unusual or infrequent in nature such as restructuring charges, non-cash goodwill impairment charges, one-time separation costs
related to the spin-off from Ingersoll Rand, gain on property sale in China and certain discrete tax expenses and beneﬁts. The Company considers these items unrelated to its core,
on-going operating performance, and believes the use of these non-GAAP measures allows comparison of operating results that are consistent over time. The Company believes these
non-GAAP disclosures provide important supplemental information to management and investors regarding ﬁnancial and business trends relating to the Company’s ﬁnancial condition
and results of operations. Management uses these non-GAAP measures internally to evaluate the performance of the business. Investors should not consider these non-GAAP
measures as alternatives to the related GAAP measures.

Cash ﬂow

Year ended December 31

(in millions)

> Capital expenditures > Available cash ﬂow

(19.6)

2012

$249.6

$269.2 net cash provided
by operating activities

(20.2)

2013

$203.7

$223.9 net cash provided
by operating activities

1 Adjustments to net revenues for the year ended December 31,
2013 and 2012 reﬂect the impact of a change in order ﬂow
through the Company’s consolidated joint venture in Asia
resulting from a revised joint venture operating agreement
signed in late 2013. Previously, the consolidated joint venture
acted as a pass-through to the end customer. Going forward,
products are shipped direct to the end customer with the joint
venture receiving a royalty in an amount that approximates
the lost margin. The consolidated joint venture will no longer
recognize the revenue and cost of goods sold on these
products. The change is not expected to have a material
impact on operating income or on cash ﬂows in future periods.

2 Adjustments to operating income for the year ended December
31, 2013 consist of $5.9 million of costs incurred as part of the
spin-off from Ingersoll Rand, $5.8 million of restructuring
charges, a $137.6 million goodwill impairment charge and a
$21.5 million gain on a property sale in China. Adjustments to
operating income for the year ended December 31, 2012 include
$8.2 million of restructuring charges and other expenses.

3 Adjustments to the provision for income taxes for the year
ended December 31, 2013 consist of $4.7 million of tax
expense related to the items excluded from operating income
discussed above and a beneﬁt of $44.8 million of discrete
adjustments consisting of $31.5 million of expense related to
valuation allowances on deferred tax assets that are no
longer expected to be utilized and $13.3 million of net tax
expense resulting primarily from transactions occurring to
effect the spin-off from Ingersoll Rand. Adjustments to the
provision for income taxes for the year ended December 31,
2012 consist of $2.5 million of tax expense related to the
items excluded from operating income discussed above.

4 Adjustments to non-controlling interest for the year ended
December 31, 2013 consist of the portion of adjustments
described in 2 and 3 above that are not attributable to
Allegion plc shareholders.

Allegion Board of Directors and Executive Leadership TeamAs our company’s most seasoned decision-makers, Allegion’s Board of Directors and Executive Leadership Team oversee our operational growth by practicing the principles that have always deﬁned us—breaking new ground, while never losing sight of the path we have traveled.The Allegion Executive Leadership TeamPictured from left to right:Ray Lewis Jr.Tracy KempBarbara SantoroChris MuhlenkampDavid PetratisTodd GravesTim EckersleyPatrick ShannonLúcia Veiga MorettiWilliam YuChartingthe courseBoard
of directors

1 David Petratis,

Chairman, President

and Chief Executive Officer

2 Kirk Hachigian

3 Michael Chesser

4 Carla Cico

5 Dean Schaffer

6 Martin Welch III

Committees of the Board
Audit
M. Welch, Chair; M. Chesser; C. Cico;
K. Hachigian; D. Schaffer

Compensation
M. Chesser, Chair; C. Cico;
K. Hachigian; M. Welch

Corporate Governance and Nominating
K. Hachigian, Chair; M. Chesser;
C. Cico; D. Schaffer; M. Welch

Global brands

Brand
leadership

The many brands of Allegion
include some of the industry’s
oldest and most prominent
names. Our brands are continually
elevating standards of safety
and security around the world—
furthering a long and inspiring
heritage of innovation.

We are
We are
many.
many. We
We are
are one.
one.
We are
We are
Allegion.
Allegion.

TABLE OF CONTENTS

SUMMARY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PROPOSALS REQUIRING YOUR VOTE

Item 1. Election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2. Advisory Approval of the Compensation of Our Named Executive Officers . . . . . . . . . . . . . . . . . . . . . .
Item 3. Advisory Approval of the Frequency of an Advisory Approval of the Compensation of Our Named

Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4. Approval of Appointment of Independent Auditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit Committee Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees of the Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CORPORATE GOVERNANCE

Corporate Governance Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Director Independence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Communication with Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Code of Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Anti-Hedging Policy and Other Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Committees of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Compensation of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
COMPENSATION DISCUSSION AND ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
COMPENSATION COMMITTEE REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
INFORMATION CONCERNING VOTING AND SOLICITATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Why Did I Receive This Proxy Statement? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Why Are There Two Sets Of Financial Statements Covering The Same Fiscal Period? . . . . . . . . . . . . . . . . . . . .
How Do I Attend The Annual General Meeting? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Who May Vote? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
How Do I Vote? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
How May Employees Vote Under Our Employee Plans? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May I Revoke My Proxy?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
How Will My Proxy Get Voted?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
What Constitutes a Quorum? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
What Vote is Required To Approve Each Proposal? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Who Pays The Expenses Of This Proxy Statement? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
How Will Voting On Any Other Matter Be Conducted? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. . . . . . . . . . . . . .
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. . . . . . . . . . . . . . . . . . . . . . . . . .
SHAREHOLDER PROPOSALS AND NOMINATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
HOUSEHOLDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Appendix A - Directions to the Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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A-1

This summary highlights information contained elsewhere in this Proxy Statement. For more complete information about these
topics, please review Allegion plc’s Annual Report on Form 10-K and the entire Proxy Statement.

SUMMARY INFORMATION

Annual General Meeting of Shareholders

Date and Time: June 11, 2014 at 2:30 p.m., local time

Place:

Druids Glen Resort
Newtownmountkennedy, County Wicklow
Ireland

Record Date:

April 14, 2014

Voting:

Shareholders as of the record date are entitled to vote. Each ordinary share is entitled to one
vote for each director nominee and each of the other proposals.

Attendance:

All shareholders may attend the meeting.

Meeting Agenda and Voting Recommendations

The following items that will be submitted for shareholder approval at the Annual General Meeting.

Agenda Item

Election of 6 directors named in the proxy statement.
Advisory approval of the compensation of the Company’s
named executive officers (“Say-on-Pay Vote”).

Vote Required
Majority of votes cast
Majority of votes cast

Board Recommendation
For
For

Page
1
4

Advisory vote on the frequency of a Say-on-Pay Vote.

Plurality of votes cast

For One Year

Approval of appointment of PricewaterhouseCoopers LLP
as the Company’s independent auditors and authorize the
Audit and Finance Committee to set auditors’ remuneration.

Majority of votes cast

For

Corporate Governance Highlights

Substantial majority of independent directors (5 of 6)
Annual election of directors
Majority vote for directors
Independent Lead Director
Term limits for non-employee directors
Succession planning at all levels, including for Board and
CEO

Annual Board and committee self-assessments
Executive sessions of non-management directors
Continuing director education
Executive and director stock ownership guidelines
Board oversight of risk management
Board oversight of sustainability program

Principal Occupation

Independent

Committee Memberships

Director Nominees

Set forth below is summary information about each director nominee:

Nominee

Michael J. Chesser

Age
65

Director
Since
2013

Carla Cico

2013

Former Chairman and
Chief Executive Officer
of Great Plains Energy
Incorporated

Former Chief Executive
Officer of Rivoli S.p.A.

Kirk S. Hachigian

2013

Chairman and CEO of
JELD-WEN, Inc.

David D. Petratis

2013

Dean I. Schaffer

2014

Martin E. Welch III

2013

Chairman, President and
Chief Executive Officer
of Allegion plc

Former Partner of Ernst
& Young LLP

Former Executive Vice
President and Chief
Financial Officer of
Visteon Corporation

Audit and Finance
Compensation
Corporate Governance
and Nominating

Audit and Finance
Corporate Governance
and Nominating

Audit and Finance
Compensation
Corporate Governance
and Nominating

Advisory Approval of Our Executive Compensation

We are asking for your advisory approval of the compensation of our named executive officers. While our Board of

Directors intends to carefully consider the shareholder vote resulting from the proposal, the final vote will not be binding on us
and is advisory in nature. Before considering this proposal, please read our Compensation Discussion and Analysis, which
explains our executive compensation program and the Compensation Committee’s compensation decisions.

Executive Compensation

Pay-for Performance

On December 1, 2013, we became an independent public company following the spin-off of our commercial and

residential security businesses from Ingersoll-Rand plc (“Ingersoll Rand”). Prior to the spin-off, our named executive officers
were employees of Ingersoll Rand and their compensation was determined by the Ingersoll Rand Compensation Committee.
In connection with his hiring, the Ingersoll Rand Compensation Committee established certain Allegion performance

targets that were required to be achieved prior to Mr. Petratis receiving an annual incentive award for 2013. Based on our 2013
performance, Mr. Petratis achieved an overall score of 194% of target.

The 2013 compensation of our other named executive officers was based on achievement of financial performance

metrics by Ingersoll Rand, which included Allegion’s performance for the full year. Ingersoll Rand achieved the following
strong financial performance in 2013:

• Adjusted annual revenue of $14.509 billion, an increase of 3% over 2012;

• Adjusted operating income of $1.639 billion, an increase of 8% over 2012;

• Adjusted operating income margin of 11.3 %, an increase of 0.5 percentage points from 10.8% in 2012;

• Adjusted available cash flow of $1.153 billion, an increase of 14% over 2012;

• Adjusted earnings per share (“EPS”) of $3.63 excluding one-time spin related expense, an increase of 10%

•

over 2012; and
3-year EPS growth (2011 - 2013) of 68.1%, which ranks at approximately the 75th percentile of the
companies in the S&P 500 Industrials Index.

Based on this performance, Ingersoll Rand achieved an annual incentive program financial score of 124.6 % of target
for the enterprise, 138.1% of target for Security Technologies, 145.2% for Security Technologies - Commercial Americas and
99.8% for Security Technologies - Asia Pacific.

Advisory Vote on Frequency of Approval of Our Executive Compensation

We are seeking your advisory vote on whether to hold an advisory vote on the compensation of our named executive

officers every one, two or three years.

Approval of Appointment of Independent Auditors

We are asking you to approve the appointment of PricewaterhouseCoopers LLP (“PwC”) as our independent auditors

for 2014 and to authorize the Audit and Finance Committee to set PwC’s remuneration.

2015 Annual Meeting

Deadline for shareholder proposals for inclusion in the proxy statement:
Deadline for business proposals and nominations for director:

December 26, 2014
March 13, 2015

iii

• Chairman and Chief Executive Officer of JELD-WEN, Inc. (global manufacturer of doors and windows) since

•

February 2014
Former Chairman, President and Chief Executive Officer of Cooper Industries plc (global manufacturer of
electrical components for the industrial, utility and construction markets) from 2006 to 2012

• Current Directorships:
Paccar Inc.
NextEra Energy

•

Former Directorships:

Cooper Industries plc

Mr. Hachigian’s experience as chairman and chief executive officer of a $6 billion New York Stock Exchange (“NYSE”)
global diversified manufacturing organization brings substantial expertise to all of our operational and financial matters,
including global manufacturing, engineering, marketing, labor relations, channel management and investor relations. His
prior work will benefit our Board of Directors and management team as we pursue future business opportunities globally.
He has a successful track record of creating value to shareholders, recently completing the $13 billion merger of Cooper
Industries with Eaton Corporation. In addition, his leadership of an organization incorporated in Ireland provides valuable
oversight experience to our Irish financial reporting and accounting requirements. His executive leadership positions
directly correspond to key elements of our growth and operational strategies.

(d) David D. Petratis - age 56; Chairman and director since 2013

•
•

•

President and Chief Executive Officer of Allegion plc since October 2013
Former Chairman, President and Chief Executive Officer of Quanex Building Products Corporation (a
manufacturer of engineered material and components for the building products markets) from 2008 to July 2013
Former President and Chief Executive Officer of the North American Operating Division of Schneider Electric (a
global electrical and automation manufacturer) from 2004 to 2008

• Current Directorships: None
Former Directorships:
•

Gardner Denver, Inc.
Quanex Building Products Corporation

Mr. Petratis’s successful leadership of global manufacturing companies brings significant experience and expertise to the
Company’s management and governance. In particular, Mr. Petratis has an extensive background in the building products
industry, as well as strong experience with operations and lean manufacturing, distribution and channel marketing and
management, the merger and acquisition process, and strategy development.

(e) Dean I. Schaffer - age 62; Director since 2014

Former Partner of Ernst & Young LLP (an international public accounting firm) from 1975 to March 2014

•
• Current Directorships: None

Mr. Schaffer’s experience as a partner of an international accounting firm brings significant expertise to the Board of
Directors in the areas of taxation, governance, strategy and acquisitions. During his career, Mr. Schaffer served on Ernst &
Young’s Americas Executive Board, as the co-lead of the Americas Office of the Chairman Global Accounts Network and
senior partner in the New York office and worked with many of the firm’s largest clients. Mr. Schaffer’s expertise will
benefit the Board of Directors as it oversees our financial reporting and our governance and as it develops our tax and
growth strategies.

(f) Martin E. Welch III - age 65; Director since 2013

•

Former Executive Vice President and Chief Financial Officer of Visteon Corporation (a global automotive parts
supplier) from 2011 to 2012
Former Executive Vice President and Chief Financial Officer of United Rentals, Inc. (an equipment rental
company) from 2005 to 2009

• Current Directorships:

Global Brass and Copper Holdings, Inc.

•

Former Directorships:

Delphi Corporation

• Other Activities:

Trustee, University of Detroit Mercy

Mr. Welch’s experience as a chief financial officer brings substantial financial expertise to our Board. His senior leadership
experience with global manufacturing companies will benefit our Board as it develops our growth strategy and will help
drive our operational improvement. In addition, Mr. Welch’s experience as a business advisor to a private equity firm will
benefit the Company’s long-term strategic planning.

Item 2. Advisory Approval of the Compensation of Our Named Executive Officers

We are presenting the following proposal, commonly known as a “Say-on-Pay” proposal, which gives you as a
shareholder the opportunity to endorse or not endorse our compensation program for named executive officers (“NEOs”) by
voting for or against the following resolution:

“RESOLVED, that the shareholders approve the compensation of the Company’s NEOs, as disclosed in the
Compensation Discussion and Analysis, the compensation tables, and the related disclosure contained in the Company’s
proxy statement.”

While our Board of Directors intends to carefully consider the shareholder vote resulting from the proposal, the final vote

will not be binding on us and is advisory in nature.

On December 1, 2013, our commercial and residential security businesses spun-off from Ingersoll-Rand plc (“Ingersoll

Rand”) and we became an independent public company (the “Spin-off”). Prior to the Spin-off, the Ingersoll Rand
Compensation Committee established the compensation for our NEOs in 2013. Mr. Petratis’s annual incentive compensation
was based on certain financial metrics established for Allegion. For our other NEOs, their annual incentive compensation was
based on Ingersoll Rand’s 2013 performance for the full year, including Allegion’s performance for the post-Spin-off period.

Going forward, our Compensation Committee has adopted the following design principles for our executive

compensation program:

• Create and reinforce our pay-for-performance culture;

• Align the interests of management with our shareholders;

• Attract, retain and motivate executive talent by providing competitive levels of salary and total targeted pay;

•

Provide incentive compensation that promotes desired behavior without encouraging unnecessary and excessive
risk; and

Integrate with the our performance management process of goal setting and formal evaluation.

By following these design principles, we believe that our compensation program for NEOs is strongly aligned with the

long-term interests of our shareholders.

The Board of Directors recommends that you vote FOR advisory approval of the compensation of our NEOs as

disclosed in the Compensation Discussion and Analysis, the compensation tables, and the related disclosure contained in
this proxy statement.

Item 3. Advisory Vote on the Frequency of Holding a Say-on-Pay Vote

As part of its commitment to understanding shareholder sentiment on our executive compensation philosophy and
practices, the Board of Directors is seeking shareholders’ views on how frequently we should submit executive compensation
for consideration by shareholders.

Shareholders may vote to hold an advisory vote on executive compensation every one, two or three years or abstain.
After careful consideration, the Board of Directors is recommending that shareholders approve holding the Say-on-Pay vote
every year.

The Board of Directors believes holding an annual advisory vote on executive compensation is consistent with its policy

of seeking regular input from shareholders on corporate governance matters and our executive compensation philosophy and
practices. This vote is not binding but rather will provide the Compensation Committee with shareholders’ view on how
frequently they desire to consider executive compensation. Although the vote is advisory, the Compensation Committee will
take into account the outcome of the vote when considering how frequently we will submit executive compensation to a
shareholder vote.

The Board of Directors will carefully consider and expects to be guided by the alternative that receives the most
shareholder support in determining the frequency of future say-on-pay votes. Notwithstanding the outcome of the shareholder
vote, the Board of Directors may in the future decide to conduct advisory votes on a more or less frequent basis and may vary
its practice based on factors such as discussions with shareholders and the adoption of material changes to compensation
programs.

The Board of Directors recommends that you vote to hold the Say-on-Pay vote every year.

Item 4. Approval of Appointment of Independent Auditors

At the Annual General Meeting, shareholders will be asked to approve the appointment of PricewaterhouseCoopers

(“PwC”) as our independent auditors for the fiscal year ending December 31, 2014, and to authorize the Audit and Finance
Committee of our Board of Directors to set the independent auditors’ remuneration. PwC acted as our independent auditor in
2013 and has familiarity with our affairs. Based on such familiarity and its ability, we believe PwC is best qualified to perform
this important function.

Representatives of PwC will be present at the Annual General Meeting and will be available to respond to appropriate

questions. They will have an opportunity to make a statement if they so desire.

The Board of Directors recommends a vote FOR the proposal to approve the appointment of PwC as
independent auditors of the Company and to authorize the Audit and Finance Committee of the Board of Directors to
set the auditors’ remuneration.

Audit and Finance Committee Report

While management has the primary responsibility for the financial statements and the reporting process, including the
system of internal controls, the Audit and Finance Committee reviews the Company’s audited financial statements and financial
reporting process on behalf of the Board of Directors. The independent auditors are responsible for performing an independent
audit of the Company’s consolidated financial statements in accordance with the standards of the Public Company Accounting
Oversight Board (United States) and to issue a report thereon. The Audit and Finance Committee monitors those processes. In
this context, the Audit and Finance Committee has met and held discussions with management and the independent auditors
regarding the fair and complete presentation of the Company’s results. The Audit and Finance Committee has discussed
significant accounting policies applied by the Company in its financial statements, as well as alternative treatments.
Management has represented to the Audit and Finance Committee that the Company’s consolidated financial statements were
prepared in accordance with United States generally accepted accounting principles, and the Audit and Finance Committee has
reviewed and discussed the consolidated financial statements with management and the independent auditors. The Audit and
Finance Committee also discussed with the independent auditors the matters required to be discussed by Auditing Standard
No. 16, as amended (Communication with Audit Committees), as adopted by the Public Company Accounting Oversight
Board (United States).

In addition, the Audit and Finance Committee has received and reviewed the written disclosures and the letter from

PwC required by the Public Company Accounting Oversight Board regarding PwC’s communications with the Audit and
Finance Committee concerning independence and discussed with PwC the auditors’ independence from the Company and its
management in connection with the matters stated therein. The Audit and Finance Committee also considered whether the
independent auditors’ provision of non-audit services to the Company is compatible with the auditors’ independence. The Audit
and Finance Committee has concluded that the independent auditors are independent from the Company and its management.

The Audit and Finance Committee discussed with the Company’s internal and independent auditors the overall scope

and plans for their respective audits. The Audit and Finance Committee meets separately with the internal and independent
auditors, with and without management present, to discuss the results of their examinations, the evaluations of the Company’s
internal controls and the overall quality of the Company’s financial reporting.

In reliance on the reviews and discussions referred to above, the Audit and Finance Committee recommended to the

Board of Directors, and the Board has approved, that the audited financial statements be included in the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2013 (“2013 Form 10-K”), for filing with the Securities and
Exchange Commission (the “SEC”). The Audit and Finance Committee has selected PwC, subject to shareholder approval, as
the Company’s independent auditors for the fiscal year ending December 31, 2014.

AUDIT AND FINANCE COMMITTEE

Martin E. Welch III (Chair)
Michael J. Chesser
Carla Cico
Kirk S. Hachigian

Fees of the Independent Auditors

The following table shows the fees we paid or accrued for audit and other services provided by PwC for the fiscal

years ended December 31, 2013 and 2012:

Audit Fees (b)
Audit-Related Fees (c)
Tax Fees
All Other Fees
Total

_______________

2013 (a)

2012 (a)

2,511,000
4,800
—
—
2,515,800

—
—
—
—
—

(a)

(b)

For the fiscal year ended December 31, 2012, we did not pay any fees for professional services to PwC. Prior to the
Spin-off on December 1, 2013, Ingersoll Rand paid any audit, audit-related, tax and other fees of PwC. We will
provide such disclosure of expenses on a standalone go forward basis.

Audit Fees for the fiscal year ended December 31, 2013 were for professional services rendered for the audits of our
annual consolidated financial statements, including statutory audits.

(c)

Audit-Related Fees consists of certain assurance services related to specific transactions.

The Audit and Finance Committee has adopted policies and procedures which require that the Audit and Finance

Committee pre-approve all non-audit services that may be provided to the Company by its independent auditors. The policy: (i)
provides for pre-approval of an annual budget for each type of service; (ii) requires Audit and Finance Committee approval of
specific projects over $50,000, even if included in the approved budget; and (iii) requires Audit and Finance Committee
approval if the forecast of expenditures exceeds the approved budget on any type of service. The Audit and Finance Committee
pre-approved all of the services described under “Audit-Related Fees.” The Audit and Finance Committee has determined that
the provision of all such non-audit services is compatible with maintaining the independence of PwC.

CORPORATE GOVERNANCE

Corporate Governance Guidelines

Our Corporate Governance Guidelines, together with the charters of the various Board committees, provide a

framework for the corporate governance of the Company. The following is a summary of our Corporate Governance
Guidelines. A copy of our Corporate Governance Guidelines, as well as the charters of each of our Board committees, are
available on our website at www.allegion.com under the heading “About Allegion – Corporate Governance.”

Role of the Board of Directors

Our business is managed under the direction of the Board of Directors. The role of the Board of Directors is to oversee

our management and governance and monitor senior management’s performance.

Board Responsibilities

The Board of Directors’ core responsibilities include, among other things:

•

selecting, monitoring, evaluating and compensating senior management;

assuring that management succession planning is ongoing;

overseeing the implementation of management’s strategic plans and capital allocation strategy;

reviewing our financial controls and reporting systems;

overseeing our management of enterprise risk;

reviewing our ethical standards and compliance procedures; and

evaluating the performance of the Board of Directors, Board committees and individual directors.

Board Leadership Structure

The positions of Chairman of the Board and Chief Executive Officer (“CEO”) of the Company are held by the same

person. It is the Board of Directors’ view that our corporate governance principles, the quality, stature and substantive business
knowledge of the members of the Board, as well as the Board’s culture of open communication with the CEO and senior
management are conducive to Board effectiveness with a combined Chairman and CEO position. The Board reserves the right
to separate the roles of Chairman and CEO in the event that there are changes in circumstances or performance.

In addition, the Board of Directors has a strong, independent Lead Director and it believes this role adequately
addresses the need for independent leadership and an organizational structure for the independent directors. The Chairman and
CEO is responsible for working with the Lead Director so that together they achieve the Board governance objectives outlined
by the Board.

The Board of Directors appoints a Lead Director for a three-year minimum term from among the Board’s independent

directors. The Lead Director coordinates the activities of all of the Board’s independent directors. The Lead Director is the
principal confidant to the CEO and ensures that the Board of Directors has an open, trustful relationship with the Company’s
senior management team. In addition to the duties of all directors, as set forth in the Company’s Governance Guidelines, the
specific responsibilities of the Lead Director are as follows:

• Chair the meetings of the independent directors when the Chairman is not present;

• Ensure the full participation and engagement of all Board members in deliberations;

• Lead the Board of Directors in all deliberations involving the CEO’s employment, including hiring, contract

negotiations, performance evaluations, and dismissal;

• Counsel the Chairman on issues of interest/concern to directors and encourage all directors to engage the

Chairman with their interests and concerns;

• Work with the Chairman to develop an appropriate schedule of Board meetings and approve such schedule, to
ensure that the directors have sufficient time for discussion of all agenda items, while not interfering with the
flow of Company operations;

• Work with the Chairman to develop the Board and Committee agendas and approve the final agendas;

• Keep abreast of key Company activities and advise the Chairman as to the quality, quantity and timeliness of
the flow of information from Company management that is necessary for the directors to effectively and
responsibly perform their duties; although Company management is responsible for the preparation of
materials for the Board of Directors, the Lead Director will approve information provided to the Board and
may specifically request the inclusion of certain material;

• Engage consultants who report directly to the Board of Directors and assist in recommending consultants that

work directly for Board Committees;

• Work in conjunction with the Corporate Governance and Nominating Committee in compliance with

Governance Committee processes to interview all Board candidates and make recommendations to the Board
of Directors;

• Assist the Board of Directors and Company officers in assuring compliance with and implementation of the
Company’s Governance Guidelines; work in conjunction with the Corporate Governance Committee to
recommend revisions to the Governance Guidelines;

• Call, coordinate and develop the agenda for and chair executive sessions of the Board’s independent

directors; act as principal liaison between the independent directors and the CEO;

• Work in conjunction with the Corporate Governance and Nominating Committee to identify for appointment

the members of the various Board Committees, as well as selection of the Committee chairs;

• Be available for consultation and direct communication with major shareholders in coordination with the

CEO;

• Make a commitment to serve in the role of Lead Director for a minimum of three years; and

• Help set the tone for the highest standards of ethics and integrity.

Mr. Hachigian has been the Board’s Lead Director since December 2013.

Board Risk Oversight

The Board of Directors has oversight responsibility of the processes established to report and monitor systems for

material risks applicable to us. The Board of Directors focuses on our general risk management strategy and the most
significant risks we face and ensures that appropriate risk mitigation strategies are implemented by management. The full
Board is responsible for considering strategic risks and succession planning and receives reports from each committee as to risk
oversight within their areas of responsibility. The Board of Directors has delegated to its various committees the oversight of
risk management practices for categories of risk relevant to their functions as follows:

• The Audit and Finance Committee oversees risks associated with our systems of disclosure controls and

internal controls over financial reporting, as well as our compliance with legal and regulatory requirements.
The Audit and Finance Committee also oversees risks associated with foreign exchange, insurance, credit and
debt.

• The Compensation Committee considers risks related to the attraction and retention of talent and risks related

to the design of compensation programs and arrangements.

• The Corporate Governance and Nominating Committee oversees risks associated with sustainability.

We have appointed the Chief Financial Officer (“CFO”) as our Chief Risk Officer and, in that role, the Chief Risk

Officer periodically reports on risk management policies and practices to the relevant Board Committee or to the full Board so
that any decisions can be made as to any required changes in our risk management and mitigation strategies or in the Board’s
oversight of these.

Finally, as part of its oversight of our executive compensation program, the Compensation Committee considers the
impact of the executive compensation program and the incentives created by the compensation awards that it administers on
our risk profile. In addition, we review all of our compensation policies and procedures, including the incentives that they
create and factors that may reduce the likelihood of excessive risk taking, to determine whether they present a significant risk to
the Company. When establishing our executive compensation program prior to the Spin-off, the Ingersoll Rand Compensation
Committee concluded that the compensation policies and procedures are not reasonably likely to have a material adverse effect
on the Company.

Director Compensation and Stock Ownership

It is the policy of the Board of Directors that directors’ fees be the sole compensation received from us by any non-

employee director, other than an initial grant of $50,000 of restricted stock units (“RSUs”) upon appointment to the Board of
Directors. We have a director share ownership requirement of $210,000 of ordinary shares, which is equal to the directors’
annual retainer. Directors must purchase $50,000 of ordinary shares each year until the share ownership requirement is met.
Directors are required to meet the share ownership requirement within five years of appointment to the Board of Directors.

Board Size and Composition

The Board of Directors consists of a substantial majority of independent, non-employee directors. In addition, our

Corporate Governance Guidelines require that all members of the committees of the Board must be independent directors. The
Board of Directors has the following three standing committees: Audit and Finance Committee, Compensation Committee and
Corporate Governance and Nominating Committee. The Board of Directors has determined that each member of each of these
committees is “independent” as defined in the NYSE listing standards and our Guidelines for Determining Independence of
Directors. Each director, other than Mr. Schaffer, serves on each Board committee. We expect to rotate chairs of the
committees periodically.

Board Diversity

Our policy on Board diversity relates to the selection of nominees for the Board of Directors. In selecting a nominee

for the Board, the Corporate Governance and Nominating Committee considers the skills, expertise and background that would
complement the existing Board and ensure that its members are of sufficiently diverse and independent backgrounds,
recognizing that our businesses and operations are diverse and global in nature. The Board of Directors has one female director.

Board Advisors

The Board of Directors and its committees may, under their respective charters, retain their own advisors to assist in

carrying out their responsibilities.

Executive Sessions

Our independent directors meet privately in regularly scheduled executive sessions, without management present, to
consider such matters as the independent directors deem appropriate. These executive sessions are required to be held no less
than twice each year.

Board Evaluation

The Corporate Governance and Nominating Committee assists the Board in evaluating its performance and the
performance of the Board committees. Each committee also conducts an annual self-evaluation. The effectiveness of individual
directors is considered each year when the directors stand for re-nomination.

Director Orientation and Education

We have developed an orientation program for new directors and provide continuing education for all directors. In

addition, the directors are given full access to management and corporate staff as a means of providing additional information.

Director Nomination Process

The Corporate Governance and Nominating Committee reviews the composition of the full Board to identify the

qualifications and areas of expertise needed to further enhance the composition of the Board, makes recommendations to the
Board concerning the appropriate size and needs of the Board and, on its own or with the assistance of management, a search
firm or others, identifies candidates with those qualifications. Each director, other than Mr. Schaffer, was identified by Ingersoll
Rand, with the assistance of a search firm, and elected to the Board of Directors by our private shareholders prior to the Spin-
off. Mr. Schaffer was nominated by the Corporate Governance and Nominating Committee following a review of candidates
recommended by an unaffiliated third party that provides non-search services to us from time to time. In considering
candidates, the Corporate Governance and Nominating Committee will take into account all factors it considers appropriate,
including breadth of experience, understanding of business and financial issues, ability to exercise sound judgment, diversity,
leadership, and achievements and experience in matters affecting business and industry. The Corporate Governance and
Nominating Committee considers the entirety of each candidate’s credentials and believes that at a minimum each nominee
should satisfy the following criteria: highest character and integrity, experience and understanding of strategy and policy-
setting, sufficient time to devote to Board matters, and no conflict of interest that would interfere with performance as a
director. Shareholders may recommend candidates for consideration for Board membership by sending the recommendation to
the Corporate Governance and Nominating Committee, in care of the Secretary of the Company. Candidates recommended by
shareholders are evaluated in the same manner as director candidates identified by any other means.

Application of Non-U.S. Corporate Governance Codes

Our corporate governance guidelines and general approach to corporate governance as reflected in our Memorandum

and Articles of Association and our internal policies and procedures are guided by U.S. practice and applicable federal
securities laws and regulations and NYSE requirements. Although we are an Irish public limited company, we are not listed on
the Irish Stock Exchange and therefore are not subject to the listing rules of the Irish Stock Exchange or any of its governance
standards or guidelines.

Director Independence

The Board of Directors has determined that all of our current directors, except Mr. Petratis, who is our CEO, are

independent under the standards set forth in Exhibit I to our Corporate Governance Guidelines, which are consistent with the
NYSE listing standards. In determining the independence of directors, the Board evaluated transactions between us and entities
with which directors were affiliated that occurred in the ordinary course of business and that were provided on the same terms
and conditions available to other customers. A copy of Exhibit I to our Corporate Governance Guidelines is available on our
website, www.allegion.com, under the heading “About Allegion—Corporate Governance.”

Communications with Directors

Shareholders and other interested parties wishing to communicate with the Board of Directors, the non-employee
directors or any individual director (including our Lead Director and Compensation Committee Chair) may do so either by
sending a communication to the Board and/or a particular Board member, in care of the Secretary of the Company, or by e-mail
at allegionboard@allegion.com. Depending upon the nature of the communication and to whom it is directed, the Secretary
will: (a) forward the communication to the appropriate director or directors; (b) forward the communication to the relevant
department within the Company; or (c) attempt to handle the matter directly (for example, a communication dealing with a
share ownership matter).

Code of Conduct

We have adopted a worldwide Code of Conduct, applicable to all employees, directors and officers, including our

CEO, our CFO and our Controller. The Code of Conduct meets the requirements of a “code of ethics” as defined by Item 406
of Regulation S-K, as well as the requirements of a “code of business conduct and ethics” under the NYSE listing standards.
The Code of Conduct covers topics including, but not limited to, conflicts of interest, confidentiality of information, and
compliance with laws and regulations. A copy of the Code of Conduct is available on our website located at www.allegion.com
under the heading “About Allegion—Corporate Governance.” Amendments to, or waivers of the provisions of, the Code of
Conduct, if any, made with respect to any of our directors and executive officers will be posted on our website.

Anti-Hedging Policy and Other Restrictions

We prohibit our directors and executive officers from (i) purchasing any financial instruments designed to hedge or

offset any decrease in the market value of Company securities and (ii) engaging in any form of short-term speculative trading in
Company securities. Directors and executive officers are also prohibited from holding Company securities in a margin account
or pledging Company securities as collateral for a loan unless the Senior Vice President and General Counsel provides pre-
clearance after the director or executive officer clearly demonstrates the financial capability to repay the loan without resort to
the pledged securities.

Committees of the Board

Audit and Finance Committee

Members: Martin E. Welch, III (Chair)

Michael J. Chesser
Carla Cico
Kirk S. Hachigian
Dean I. Schaffer

Key Functions:

• Review annual audited and quarterly financial statements, as well as disclosures under our “Management’s
Discussion and Analysis of Financial Conditions and Results of Operations,” with management and the
independent auditors.

• Obtain and review periodic reports, at least annually, from management assessing the effectiveness of our internal

controls and procedures for financial reporting.

• Review our processes to assure compliance with all applicable laws, regulations and corporate policy.
• Oversee risk related to our financial reporting and compliance with legal and regulatory requirements.
• Recommend the accounting firm to be proposed for appointment by the shareholders as our independent auditors
and review the performance of the independent auditors, including receipt of their annual independence statement.

• Review the scope of the audit and the findings and approve the fees of the independent auditors.
• Approve in advance permitted audit and non-audit services to be performed by the independent auditors.
• Review proposed borrowings and issuances of securities and cash management policies.
• Recommend to the Board of Directors the dividends to be paid on our ordinary shares.
• Review periodic reports of the investment performance of our employee benefit plans.

The Board of Directors has determined that each member of the Audit and Finance Committee is “independent” for

purposes of the applicable rules and regulations of the SEC, as defined in the NYSE listing standards and our Corporate
Governance Guidelines and has determined that each member of the Audit and Finance Committee meets, or will meet within
one year, the qualifications of a financial expert. The Board of Directors has determined that Mr. Welch meets the
qualifications of an “audit committee financial expert” as that term is defined by rules of the SEC.

A copy of the charter of the Audit and Finance Committee is available on our website, www.allegion.com, under the

heading “About Allegion—Corporate Governance.”

Compensation Committee

Members: Michael J. Chesser (Chair)
Carla Cico
Kirk S. Hachigian
Martin E. Welch, III

Key Functions:

• Establish executive compensation policies.
• Approve the CEO’s compensation based on the evaluation by the Board of Directors of the CEO’s performance

against the goals and objectives set by the Board of Directors.

• Approve compensation of officers and key employees.
• Review and approve executive compensation and benefit programs.
• Administer our equity compensation plans.
• Review and recommend significant changes in principal employee benefit programs.
• Approve and oversee Compensation Committee consultants.

For a discussion concerning the processes and procedures for determining executive compensation and the role of
executive officers and compensation consultants in determining or recommending the amount or form of compensation, see
“Compensation Discussion and Analysis.”

The Board of Directors has determined that each member of the Compensation Committee is “independent” as defined

in the NYSE listing standards and our Corporate Governance Guidelines. In addition, the Board of Directors has determined
that each member of the Compensation Committee qualifies as a “Non-Employee Director” within the meaning of Rule 16b-3
of the Securities Exchange Act of 1934 and an “outside director” within the meaning of Section 162(m) of the Code.

A copy of the charter of the Compensation Committee is available on our website, www.allegion.com, under the

heading “About Allegion—Corporate Governance.”

Corporate Governance and Nominating Committee

Members:

Kirk S. Hachigian (Chair)
Michael J. Chesser
Carla Cico
Dean I. Schaffer
Martin E. Welch, III

Key Functions:

Identify individuals qualified to become directors and recommend the candidates for all directorships.

•
• Recommend individuals for election as officers.
• Review our Corporate Governance Guidelines and make recommendations for changes.
• Consider questions of independence and possible conflicts of interest of directors and executive officers.
• Take a leadership role in shaping our corporate governance.
• Oversee our sustainability efforts.
The Board of Directors has determined that each member of the Corporate Governance and Nominating Committee is

“independent” as defined in the NYSE listing standards and our Corporate Governance Guidelines.

A copy of the charter of the Corporate Governance and Nominating Committee is available on our website,

www.allegion.com, under the heading “About Allegion—Corporate Governance.”

Board, Committee and Annual Meeting Attendance

The Board of Directors and its committees held the following number of meetings during the fiscal year ended

December 31, 2013:

Board
Audit and Finance Committee
Compensation Committee
Corporate Governance and Nominating Committee

1
1
1
1

Each incumbent director attended 100% of the total number of meetings of the Board of Directors and the committees

on which he or she served during the year. The non-employee directors held one independent director meeting without
management present during 2013. It is the Board’s general practice to hold independent director meetings in connection with
regularly scheduled Board meetings.

We expect all Board members to attend the annual general meeting, but from time to time other commitments prevent

all directors from attending the meeting. We did not hold an annual general meeting in 2013 because we did not become an
independent public company until December 1, 2013.

Director Compensation

Compensation of Directors

Our director compensation program is designed to compensate non-employee directors fairly for work required for a
company of our size and scope and align their interests with the long-term interests of our shareholders. The program reflects
our desire to attract, retain and use the expertise of highly qualified people serving on our Board of Directors. The Corporate
Governance and Nominating Committee periodically reviews the compensation level of our non-employee directors in
consultation with the Committee’s independent compensation consultant and makes recommendations to the Board of
Directors. Employee directors do not receive any additional compensation for serving as a director.

Our director compensation program for non-employee directors consists of the following elements:

Compensation Element
Annual Cash Retainer
Audit and Finance Committee Chair Cash Retainer
Compensation Committee Chair Cash Retainer
Corporate Governance and Nominating Committee Chair Retainer
(unless also the Lead Director)
Lead Director Cash Retainer
(plus $5,000 if also the Corporate Governance and Nominating Committee Chair)
Additional Meetings or Unscheduled Planning Session Fees *
Initial Grant of RSUs

Compensation Value

210,000
15,000
10,000
8,000

20,000

$
$
$
$

$ 1,500 (per meeting or session)
50,000
$

* The Board has 5 regularly scheduled meetings each year. Each Committee, other than the Audit and Finance
Committee, has at least 3 regularly scheduled meetings each year. The Audit and Finance Committee has 8
regularly scheduled meetings each year.

Share Ownership Requirement

To align the interests of directors with shareholders, the Board of Directors has adopted a requirement that each

director invest $50,000 annually to acquire Company shares until they own ordinary shares with a value equal to their annual
retainer of $210,000, calculated as of the date of acquisition.

2013 Director Compensation

The compensation paid or credited to our non-employee directors for the year ended December 31, 2013, is

summarized in the table below. Mr. Schaffer did not serve as a director in 2013.

Name
M. J. Chesser
C. Cico
K. S. Hachigian
M. E. Welch

____________________

Fees earned
or paid
in cash
($)
—
—
—
—

All Other
Compensation
($)(a)
50,034
50,034
50,034
50,034

Total
($)
50,034
50,034
50,034
50,034

(a) The amounts in this column represent the one-time grant of RSUs to non-employee directors upon joining the Board.

For each non-employee director at December 31, 2013, the following table reflects unvested RSUs:

Name
M. J. Chesser
C. Cico
K. S. Hachigian
M. E. Welch

Number of
RSUs
(#)
1,193
1,193
1,193
1,193

This Compensation Discussion and Analysis (“CD&A”) describes the compensation philosophy and program provided

COMPENSATION DISCUSSION AND ANALYSIS

to our NEOs in 2013, both prior to and following the Spin-off.

Our NEOs for 2013 are:

Allegion NEO

Allegion Position

David D. Petratis

Chairman, President and CEO

N/A

Pre-Spin-off
Ingersoll Rand Position

Patrick S. Shannon

Senior Vice President and CFO

Vice President and Treasurer

Timothy P. Eckersley

Senior Vice President - Americas

Barbara A. Santoro

Feng (William) Yu

Senior Vice President, General
Counsel and Secretary
Senior Vice President - Asia
Pacific

President of Security Technologies -
Commercial Americas

Vice President, Corporate
Governance & Secretary
President of Security Technologies -
Asia Pacific

Our residential and commercial security businesses were a part of Ingersoll Rand until the Spin-off on December 1,

2013. The strategic rationale for the Spin-off was to: (i) position Allegion and Ingersoll Rand to pursue a more focused strategy;
(ii) allow the Board of Directors and management of each company to focus exclusively on the growth and expansion of their
respective businesses; (iii) eliminate competition for capital between the companies while still allowing each company to
preserve existing synergies; and (iv) provide investors with a more targeted investment opportunity.

Prior to the Spin-off, our NEOs were employees of Ingersoll Rand and their compensation was determined by the

Ingersoll Rand Compensation Committee. As such, the CD&A discusses Ingersoll Rand’s historical compensation program,
philosophy and design principles on which 2013 compensation decisions for the NEOs were made. Where compensation
decisions have been made following the Spin-off in 2013 and with respect to 2014, we have included a description of those
decisions in order to provide a clear picture of Allegion’s compensation philosophy following the Spin-off.

This discussion and analysis is divided into the following sections:

II.

III.

IV.

Executive Summary

Compensation Philosophy and Design Principles

Elements of Executive Compensation and Compensation Paid to NEOs in 2013

Other Compensation and Tax Matters

Executive Summary

In this section, we highlight 2013 performance and key actions that our Compensation Committee took to support our
strategic priorities and to effectively align the interests of our NEOs with shareholders. We also include a summary of changes
that our Compensation Committee made following the Spin-off to our executive compensation program.

2013 Performance

The incentive compensation targets for our NEOs for 2013 were established by the Ingersoll Rand Compensation

Committee prior to the Spin-off and payout was based on achievement of financial performance metrics that included Allegion
for the full-year. Ingersoll Rand achieved the following strong financial performance in 2013:

• Adjusted annual revenue (“Revenue”) of $14.509 billion, an increase of 3% over 2012;

• Adjusted operating income (“OI”) of $1.639 billion, an increase of 8% over 2012;

• Adjusted OI margin (“OI Margin”) of 11.3 %, an increase of 0.5 percentage points from 10.8% in 2012;

• Adjusted available cash flow (“Cash Flow”) of $1.153 billion, an increase of 14% over 2012;

• Adjusted earnings per share (“EPS”) of $3.63 excluding one-time spin related expense, an increase of 10%

•

over 2012; and
3-year EPS growth (2011 - 2013) of 68.1%, which ranks at approximately the 75th percentile of the companies
in the S&P 500 Industrials Index.

The Spin-off was completed on December 1, 2013. As a result, adjustments to Ingersoll Rand’s full year 2013 results
were necessary to include Allegion’s December results in order to ensure that performance under Ingersoll Rand’s 2013 Annual
Incentive Matrix (“AIM”) program and its 2011 - 2013 Performance Share Plan (“PSP”) program were measured on a basis
consistent with how performance goals were established.

For Ingersoll Rand’s 2013 AIM, performance was measured using full year financial results adjusted to reflect the

organizational structure in place at the time that performance objectives were approved by the Ingersoll Rand Compensation
Committee in February 2013 and to exclude one-time costs associated with the Spin-off and Ingersoll Rand’s reorganization.
Based on adjusted 2013 results for Revenue, OI, Cash Flow and OI margin, Ingersoll Rand achieved an AIM financial score of
124.6 % of target for the enterprise, 138.1% of target for Security Technologies, 145.2% for Security Technologies - Commercial
Americas and 99.8% for Security Technologies - Asia Pacific.

In connection with the hiring of Mr. Petratis on August 5, 2013, the Ingersoll Rand Compensation Committee
established certain Allegion performance targets that were required to be achieved prior to Mr. Petratis receiving an incentive
award for 2013. Based on 2013 performance, our Compensation Committee determined that Mr. Petratis achieved 194% of
target.

2013 Allegion Compensation Committee Actions

Following the Spin-off, our Compensation Committee took the following actions to align the interests of our NEOs

with shareholders:

•

Selected Meridian Compensation Partners, LLC as its independent compensation advisor;

• Amended the Compensation Committee Charter to strengthen the Compensation Committee’s oversight of

executive compensation;

• Developed Allegion’s compensation and performance benchmarking peer groups;

• Revised the stock ownership guidelines;

• Amended the Company’s compensation program; and

• Approved a Founder’s Grant for key employees.

Overview of 2013 NEO Target Compensation

The following charts summarize our NEO’s target compensation in 2013 both before and after the Spin-off:

Pre Spin-Off

NEO
D. D. Petratis (1)

P. S. Shannon

T. P. Eckersley

B. A. Santoro

F. W. Yu

Base Salary
($)

Annual Incentive
Target Value
($)

Long-term
Incentive Target
Value
($)

Total Target
Compensation
($)

900,000

370,000

408,807

318,300

344,630

990,000

222,000

245,284

175,065

172,315

3,000,000

400,000

380,000

270,000

100,000

4,890,000

992,000

1,034,091

763,365

616,945

(1) Mr. Petratis’s target compensation is shown on an annualized basis.

Post Spin-Off

NEO
D. D. Petratis (1)

P. S. Shannon

T. P. Eckersley

B. A. Santoro

F. W. Yu

Base Salary
($)

Annual Incentive
Target Value
($)

Long-term
Incentive Target
Value
($)

Total Target
Compensation
($)

900,000

425,000

408,807

350,000

344,630

990,000

297,500

245,284

227,500

172,315

3,000,000

650,000

380,000

375,000

100,000

4,890,000

1,372,500

1,034,091

952,500

616,945

(1) Mr. Petratis’s target compensation is shown on an annualized basis.

The following are the primary objectives of our executive compensation program and the guiding principles for setting

and awarding executive compensation:

• Create and reinforce our pay-for-performance culture: The compensation program should pay for

performance. Exceptional performance should result in increased compensation; missing performance goals should
result in reduced incentive pay.

• Align the interests of management with our shareholders: To better align the interests of management with the
interests of shareholders, a significant portion of executive compensation should be equity based, and stock
ownership guidelines should be utilized to better ensure a focus on long-term, sustainable growth.

• Attract, retain and motivate executive talent by providing competitive levels of salary and targeted total pay:
Compensation should be competitive with those organizations with which we compete for top talent. That would
include organizations in our industry sectors of similar size and scale to Allegion.

• Provide incentive compensation that promotes desired behavior without encouraging unnecessary and

excessive risk: Incentive compensation should help drive business strategy. The compensation program should
encourage both the desired results and the right behaviors. It should help drive business strategy and strike a
balance between short-term and long-term performance, while incorporating risk-mitigating design features to
ensure that excessive risk is not encouraged.

•

Integrate with our performance management process of goal setting and formal evaluation: Target level goals
should be aligned with the strategy and the operating budget, and be considered stretch yet achievable, as
appropriately established, for each year.

Role of the Compensation Committee and Independent Adviser

For 2013, the Ingersoll Rand Compensation Committee oversaw the compensation plans and policies, administered

equity-based programs and reviewed and approved all forms of compensation relating to our officers, including our NEOs. The
Ingersoll Rand Compensation Committee exclusively decided the elements and the amounts of compensation to be awarded to
the Ingersoll Rand CEO and considered recommendations from the CEO related to other Ingersoll Rand officers. In addition, the
Ingersoll Rand Compensation Committee was responsible for reviewing and approving amendments to executive compensation
and benefit plans and for reviewing broad-based employee benefit plans and making recommendations to the Ingersoll Rand
Board of Directors for significant amendments to, or termination of, such plans. The Ingersoll Rand CEO reviewed and
approved all compensation decisions for the direct reports of his direct reports.

The Ingersoll Rand Compensation Committee has the authority to retain an independent adviser for the purpose of

reviewing and providing guidance related to our executive compensation and benefit programs and is directly responsible for the
compensation and oversight of the independent adviser. For 2013, the Ingersoll Rand Compensation Committee engaged Hay
Group, Inc. (“Hay Group”) to serve as its independent adviser. Hay Group also provided the Ingersoll Rand Corporate
Governance and Nominating Committee advice on director compensation matters. The Ingersoll Rand Compensation Committee
evaluated whether any work provided by Hay Group raised any conflict of interest and determined that it did not.

In anticipation of the Spin-off, the Ingersoll Rand Compensation Committee played an active oversight role in the

design of our executive compensation program, approving and recommending to our Compensation Committee and our Board of
Directors certain actions with respect to our post-Spin-off executive officers. These recommendations, which were ratified by
our Board of Directors, included the levels of compensation of our NEOs following the Spin-off, including base salary, target
annual incentive award and target long-term incentive award values.

Going Forward

Our Compensation Committee has the authority to obtain advice and assistance from advisors and to determine their

fees and terms of engagement. In 2013, the Compensation Committee engaged Meridian Compensation Partners, LLC (the
“Consultant”) as its compensation consultant. In connection with this engagement, the Compensation Committee evaluated the
Consultant’s independence and determined the Consultant was independent from management. The Compensation Committee
did not engage any other advisor in 2013.

The Consultant provides advice to the Compensation Committee on our compensation program for executive officers

and incentive programs for eligible employees. The Consultant may also provide our Corporate Governance and Nominating
Committee advice on director compensation matters. The Consultant does not provide any services to the Company. The
Compensation Committee evaluated whether any work provided by the Consultant raised any conflict of interest and determined
that it did not.

Maintaining Best Practices Regarding Executive Compensation

Going Forward

Our Compensation Committee intends to compensate our NEOs effectively and consistent with the objectives and

guiding principles outlined above. We have adopted the following compensation practices, which are intended to promote strong
governance and alignment with shareholder interests:

Independence of Committee members

Independent Compensation Consultant

Annual risk assessment

Compensation at Risk

Target Pay at the Median Level

Mitigate Undue Risk

Stock Ownership Guidelines

Clawback Policy

Anti-Hedging and Pledging Policy

“Double triggers” in change in control
agreements

No tax gross ups on change in control
benefits

Compensation Committee Practices

Committee members satisfy the NYSE independence standards, are “non-employee
directors” under SEC rules and satisfy the requirements of an “outside director” for
purposes the Internal Revenue Code (the “Code”).

The Compensation Committee reviewed independence criteria and determined that its
compensation consultant is independent.

The Compensation Committee will annually assess the materiality and likelihood of our
executive compensation program to ensure that its plans and awards are designed and
working in a way to not encourage excessive risk taking.

Executive Compensation Practices

We grant a high percentage of at-risk compensation. We believe this is essential to
creating a culture of pay-for-performance.

We target all components of pay to be at or near the median level of the Compensation
Benchmarking Group (as defined below) and allow performance (both operational and
shareholder return) to determine actual or realized pay. Actual pay may be above or
below the target median based on performance.

We mitigate undue risk in our compensation program by instituting governance policies
such as capping potential payments, instituting clawback provisions, utilizing multiple
performance metrics, striking a balance between short and long-term incentives and
cash and stock ownership requirements.

The Compensation Committee has adopted stock ownership guidelines for the CEO and
his direct reports. The ownership guidelines are detailed in Section “IV. Other
Compensation and Tax Matters.”

We have the right to seek to recoup all or part of annual cash incentives or performance
share units (“PSUs”) that relate to a performance period beginning after January 1, 2014
if there is a: (1) significant or material restatement of our financial statements covering
any of the three fiscal years preceding the grant or payment, or (2) a restatement of our
financial statements for any such year which results from fraud or willful misconduct
committed by an award holder.

We prohibit our executive officers from hedging Allegion securities. Pledging is
permitted in limited circumstances where the executive officer can demonstrate the
financial ability to repay the loan without resort to the pledged securities.

The NEOs and other executive officers do not receive change in control benefits unless
their employment is terminated without cause (or by the executive for good reason)
within a specified period following a change in control.

The NEOs and other executive officers are not entitled to tax gross ups in the event that
their change in control benefits are subject to the “golden parachute” excise tax under
the Code.

Composition and Purpose of the Compensation Benchmarking Peer Group

Prior to the Spin-Off, the Ingersoll Rand Compensation Committee annually compared its compensation program with

the following companies (“Ingersoll Rand Compensation Survey Group”):

Cummins, Inc.

Danaher Corp

Dover

Eaton Corp

Johnson Controls Inc.

Pentair

Emerson Electric

Paccar Inc.

Stanley Black & Decker

Honeywell International

Parker Hannifin Corp

Textron

Illinois Tool Works

PPG Industries

Tyco International

In anticipation of the Spin-off, the Ingersoll Rand Compensation Committee reviewed the Ingersoll Rand

Compensation Survey Group and determined it would not accurately reflect our market competitors. Based on this evaluation,
the Ingersoll Rand Compensation Committee approved the new compensation benchmarking group for Allegion set forth below
(the “Spin-off Compensation Benchmarking Group”), consisting of companies with the following attributes:

•

Similar business (products and markets);

Similar revenue size and market capitalization;

• Executive positions similar in breadth, complexity and scope of responsibility; and

• Competitors for executive talent.

ADT Corp

Brady

Brinks Co

CACI International

Checkpoint Systems

Diebold Inc.

Enersys

Enpro Industries, Inc.

Flir Systems

Fortune Brands Home & Security

Griffon Corp

Quanex Building Products

ScanSource, Inc.

Steelcase Inc.

Going Forward

Our Compensation Committee reviewed the Spin-off Compensation Benchmarking Group and determined, in
consultation with its consultant, to increase the number of companies in our peer group to give the Compensation Committee a
peer group that more broadly represents who we compete with for executive talent. Our Compensation Committee will use this
peer group to review and evaluate executive compensation levels and practices and as the primary compensation benchmark peer
group. This compensation peer group is comprised of the following 30 U.S. listed publicly-traded companies that have
comparable revenue and/or industries that fit with our lines of business (the “Allegion Compensation Benchmarking Group”):

ADT Corp

Diebold Inc.

ITT Corp

Regal-Beloit Corp

Apogee Enterprises, Inc.

Donaldson Co.

Lennox International Inc.

Roper Industries Inc.

Armstrong World Industries

Enersys

Masco Corp

ScanSource, Inc.

Brady

Brinks Co.

Enpro Industries, Inc.

NCI Building Systems Inc.

A.O. Smith Corp

Esterline Technologies Corp

Nortek Inc.

Builder’s FirstSource

Flir Systems

Ply Gem Holdings Inc.

Steelcase Inc.

USG Corp

CACI International

Fortune Brands Home &
Security

Checkpoint Systems

Griffon Corp

Quanex Building Products

Valmont Industries Inc.

Our Compensation Committee will review the Allegion Compensation Benchmarking Group on an annual basis and

determine whether any changes are appropriate.

Composition and Purpose of the Performance Peer Group

The Ingersoll Rand Compensation Committee uses a performance peer group to evaluate the linkage of pay and

performance and for determining the relative Total Shareholder Return (“TSR”) and relative EPS measures in the PSP. For
awards granted prior to the Spin-off, the Ingersoll Rand Compensation Committee utilized the S&P 500 Industrial Index to
evaluate performance.

Going Forward

We will continue to utilize a performance peer group. Our Compensation Committee adopted a new performance peer
group consisting of the companies in the S&P 400 Capital Goods Index (the “Allegion Performance Peer Group”). Our Allegion
Performance Peer Group will be used for assessing relative TSR performance for post Spin-off periods.

III.

Elements of Executive Compensation and Compensation Paid to NEOs in 2013

Summary of Elements of Executive Compensation

The following table summarizes the elements, objectives, and other key features of Ingersoll Rand’s total direct

compensation program for officers.

Element

Base Salary

Objective of Element
including Risk Mitigation Factors

To provide a sufficient and stable
source of cash compensation.

Annual Incentive Matrix Program

Performance Share Program

Stock Options/Restricted Stock Units

To serve as an annual cash award based
on the achievement of pre-established
performance objectives.

Structured to take into consideration
the unique needs of the various
businesses.

Amount of compensation earned
cannot exceed a maximum payout of
200% of individual target levels and is
also subject to a claw-back in the event
of a financial restatement.

To serve as a long-term incentive based
on the achievement of pre-established
performance objectives relative to
companies in the S&P 500 Industrials
Index.

To promote long-term strategic
planning and discourage an
overemphasis on attaining short-term
goals.

Amount earned cannot exceed a
maximum payout of 200% of
individual target levels and is also
subject to a claw-back in the event of a
financial restatement.

Aligns the interests of the NEOs and
shareholders.

Awards provide a balanced approach
between risk and retention.

Awards are subject to a claw-back in
the event of a financial restatement.

Key Features Relative to NEOs

Targeted, on average, at the 50th percentile of our peer group.

Future adjustments are determined based on an evaluation of the
executive’s proficiency in fulfilling his or her responsibilities.

Officers have an AIM target expressed as a percentage of base
salary. Targets are set based on the compensation levels of similar
jobs in comparable companies, as well as on the officer’s
experience and proficiency level in performing the duties of the
role.

Actual AIM payouts are dependent on business and/or enterprise
financial performance and individual performance. The financial
metrics used to determine the awards for 2013 were Revenue, OI,
and Cash Flow, modified up or down based on OI Margin
performance.

Earned over a 3-year performance period.

Equity earned is based on our EPS growth (from continuing
operations) relative to the companies in the S&P 500 Industrials
Index for awards granted through 2011.

Beginning in 2012, equity earned is based on relative TSR and
relative EPS growth compared to companies within the S&P 500
Industrials Index (with equal weight given to each metric).

Actual value of the PSP shares earned depends on our share price
at the time of payment.

Stock options and RSUs are granted annually, with stock options
having an exercise price equal to the fair market value of ordinary
shares on the date of grant.

Both stock options and RSUs typically vest ratably over three
years, one third per year.

Stock options expire on the 10th anniversary (less one day) of the
grant date (unless employment terminates sooner).

Going Forward

The following table summarizes the key elements of our executive compensation program:

Category

Specific Award

Description

Cash Compensation

Base Salary

Targeted, on average, at the 50th percentile of our peer group.

Annual Incentive

Equity Compensation

PSUs

Reviewed annually and adjusted depending on individual
performance, market data, internal pay equity and Company and/or
region performance.

Cash payment determined based upon achievement of pre-
established performance goals.

Target payment for each NEO expressed as a percentage of base
salary. Actual payouts of annual incentives can range from 0% to
200% of target, based upon the achievement of performance goals.

Performance goals for corporate officers were based upon total
Company performance. Performance goals for region Presidents
are based on a combination of Company performance and their
region’s performance.

Equity awards that pay out in Company ordinary shares if specified
performance goals for cumulative EPS (weighted 50%) and relative
TSR compared to companies within the S&P 400 Capital Goods
Index (weighted 50%) for the period are met.

The PSUs are earned at the end of the applicable performance
period, subject to achievement of performance goals.

RSUs

Time-vested awards paid in shares of Company ordinary shares.

Stock Options

Non-Cash Compensation

Minimal

Compensation Provided to NEOs in 2013

Base Salary

The RSUs vest in three equal annual installments.

Options are granted with an exercise price equal to fair market
value and become exercisable in three equal annual installments
that expire ten years after the grant date.

Limited non-cash benefits provided to certain employees, including
an auto allowance, executive health reimbursement, financial
counseling reimbursement and executive long-term disability.

During 2013, the Ingersoll Rand Compensation Committee determined that two of our NEOs, Mr. Shannon and Ms.

Santoro, should receive an increase in base salary following the Spin-off to reflect their new roles and increased responsibilities
with Allegion. These salary increases were approved by our Board of Directors and became effective on December 1, 2013 as
noted in the table below:

NEO

D. D. Petratis (1)
P. S. Shannon (2)
T. P Eckersley (3)
B. A. Santoro (4)
F. W. Yu (5)

2012 Base Salary
($)

2013 Pre-Spin-off
Base Salary
($)

Post-Spin-off Base
Salary
($)

Increase
($)

—

370,000

396,900

309,000

296,067

900,000

381,500

408,807

318,300

344,630

900,000

425,000

408,807

350,000

344,630

—%

15%

13%

16%

(1) Mr. Petratis was hired on August 5, 2013.
(2) Mr. Shannon received a lump sum merit payment of $11,500 in February 2013 and a promotional increase of 11% effective on

December 1, 2013.

(3) Mr. Eckersley received a merit increase of 3% in February 2013.
(4) Ms. Santoro received a merit increase of 3% in February 2013 and a promotional increase of 10% effective on December 1,

2013.

(5) Mr. Yu received an increase of 16% which reflects prior year’s performance and cost of living in China.

Our Compensation Committee will review the base salaries of our NEOs annually to determine whether they

adequately reward our NEOs for their services and remain competitive in the market for talent based on a comparison to
executives in the Allegion Compensation Benchmarking Group who have similar roles and responsibilities. It is our
Compensation Committee’s philosophy that NEOs will not receive automatic annual merit increases. The Compensation
Committee will consider a NEO’s experience, proficiency, performance and potential to impact future business results, as well as
behavior against competencies and key enterprise values, in making future base salary decisions.

Annual Cash Incentives

Annual Incentive Target Opportunities

In February 2013, Ingersoll Rand established the annual incentive opportunities for our NEOs, other than Mr. Petratis.
Mr. Petratis’s target opportunity was established in connection with his hiring in August 2013. During 2013, the Ingersoll Rand
Compensation Committee determined that two of our NEOs, Mr. Shannon and Ms. Santoro, should receive an increase in target
annual incentive opportunity following the Spin-off to reflect their new roles and increased responsibilities with Allegion. These
increases were approved by our Board and are effective, proratably from December 1, 2013, as noted in the table below:

Annual Bonus Target Opportunity (As a % of Salary)

NEO
D. D. Petratis
P. S. Shannon
T. P. Eckersley
B. A. Santoro
F. W. Yu

2012
—%
60%
60%
55%
50%

2013 Pre-Spin-off
110%
60%
60%
55%
50%

Post-Spin-off
110%
70%
60%
65%
50%

Target % Increase
—%
17%
—%
18%
—%

Our Compensation Committee will review the target annual incentive opportunities of our NEOs annually to determine

whether they adequately reward our executives for their services and remain competitive in the market for talent.

CEO 2013 Annual Cash Incentive Award

In connection with the hiring of Mr. Petratis, the Ingersoll Rand Compensation Committee established an annual

incentive plan to reward the achievement of the following financial metrics:

Performance Levels and Goals
($ millions)

Metric

Revenue
Operating Income
Operating Income %
Cash Flow

Target
$2,109.1
$397.3
18.8%
$378.0

Maximum
$2,132.6
$410.8
19.3%
$390.4

The Ingersoll Rand Compensation Committee established Mr. Petratis’s target 2013 annual incentive at $412,500 for
the period worked beginning in August 2013, which represents the prorated target bonus of $990,000. Payout of Mr. Petratis’s
annual incentive award opportunity ranges from 0% to 200% of the target amount. The Compensation Committee will also
evaluate Mr. Petratis’s individual performance and assign him a score ranging from 0% to 150%.

Ingersoll Rand’s Annual Incentive Matrix Program

The NEOs annual cash incentives were determined based on their participation in the Ingersoll Rand AIM program for

2013 and approved by our Compensation Committee. Ingersoll Rand’s annual cash incentive program is designed to reward
executives for profitable Revenue growth, the delivery of strong Cash Flow and individual contributions. Individual AIM
payouts are calculated as the product of a financial performance score and an individual performance score, both of which are
based on achievement relative to pre-established performance objectives adopted by the Compensation Committee.

For 2013, the AIM program was redesigned to better align growth and profitability as well as to improve the alignment

of payouts with performance. This change replaced the 2012 “matrix” approach, which was based on the relationship between
Revenue and OI percent modified by Cash Flow performance. The new design utilizes the same core performance metrics of
Revenue, OI and Cash Flow, with each metric equally weighted. OI margin remains a focus, acting as a modifier to the funded
portion of awards. We believe that the 2013 AIM design provides participants with greater clarity on how they can generate
incentive opportunity based on strong performance relative to each metric. The Ingersoll Rand Compensation Committee

designed the 2013 AIM program to avoid excessive risk taking by limiting incentive opportunity if performance results are not
balanced relative to the other two metrics.

Financial performance: The AIM incentive opportunity is tied to established goals for three performance metrics (“Core

Financial Metrics”): Revenue, OI, and Cash Flow. Each of these Core Financial Metrics are equally weighted (33.33%) with
incentives independently calculated, as a percent of target, for each metric based on performance results relative to pre-
established threshold, target, and maximum performance levels. Threshold performance for each metric must be achieved in
order for any incentive to be payable for that metric. The financial AIM payout is the sum of the calculated payout percentage
for each metric, adjusted by an OI margin percentage multiplier (“Multiplier”), which can range from 85% to 115%.

The Ingersoll Rand Compensation Committee retains the authority to adjust Ingersoll Rand’s reported financial results
for the impact of changes in accounting principles, extraordinary items and unusual or non-recurring gains or losses, including
significant differences from the assumptions contained in the financial plan upon which the incentive targets were established.
Adjustments to reported financial results are intended to better reflect executives’ line of sight and ability to affect performance
results, align award payments with decisions which support the Annual Operating Plan (“AOP”), avoid artificial inflation or
deflation of awards due to unusual or non-recurring items in the applicable period and emphasize Ingersoll Rand’s preference for
long-term and sustainable growth.

The 2013 AIM metrics, goals, and weightings are presented in the table below:

Pre-Established Financial Targets ($ million)

Revenue

Cash Flow

Payout
as % of
Target

OI Margin

OI Margin
Multiplier

Ingersoll Rand Enterprise
Threshold

$13,680.0

Target

Maximum

$14,400.0

$14,760.0

Security Technologies
Threshold

$1,508.6

Target

Maximum

$1,588.0

$1,627.7

$1,485.0

$1,650.0

$1,794.0

$292.5

$325.0

$354.0

Security Technologies - Commercial Americas
Threshold
$273.6

$944.0

Target

Maximum

$993.7

$1,018.3

Security Technologies - Asia Pacific
Threshold

$158.4

Target

Maximum

$166.6

$170.8

$304.4

$329.8

$8.2

$9.1

$9.9

$990.0

$1,100.0

$1,200.0

$281.7

$313.0

$341.0

$273.7

$300.2

$326.4

$(18.2)

$(16.5)

$(15.1)

30%

100%

200%

30%

100%

200%

30%

100%

200%

30%

100%

200%

10.9%

11.5%

12.2%

19.4%

20.5%

21.7%

19.4%

20.5%

21.7%

19.4%

20.5%

21.7%

85%

100%

115%

85%

100%

115%

85.0%

100.0%

115.0%

85.0%

100.0%

115.0%

AIM performance metrics are aligned with individuals’ line of sight and scope of impact. Executives serving in a

corporate level role are measured based on the enterprise financial metrics. The business unit Presidents (Messrs. Eckersley and
Yu) are measured based on a combination of enterprise financial objectives, sector financial objectives and applicable business
unit financial objectives. We believe this combination focuses business unit Presidents on achieving the pre-established
objectives for their sector and their business unit as well as aligning their interests with enterprise goals to help create sustainable
shareholder value.

NEOs

P. S. Shannon

T. P. Eckersley

B. A. Santoro

F. W. Yu

Sector Weighting

Ingersoll Rand
Enterprise

Security Technologies

Security Technologies
- Commercial
Americas

Security Technologies
- Asia Pacific

100%

35%

100%

35%

30%

Individual performance: Individual objectives are established annually and include strategic initiatives with both
financial and non-financial metrics. Participants are evaluated based upon non-financial metrics including core competencies. At
the end of the fiscal year, the CEO evaluates performance against the pre-established individual objectives for officers other than
himself and submits a recommendation to the Compensation Committee. The Board evaluates the CEO’s performance against
his pre-established individual objectives. Based on the Board’s evaluation of the CEO and the CEO’s recommendation, the
Compensation Committee determines the individual performance score for each officer, which can range from 0% to 150%. For
2013, the individual performance rating for each NEO was:

NEO

Individual Performance Ratings

P. S. Shannon

T. P. Eckersley

B. A. Santoro

F. W. Yu

125%

115%

105%

110%

Determination of Payout

CEO 2013 Annual Cash Incentive Award Payout

Our Compensation Committee evaluated Mr. Petratis’s individual performance and his performance against the

financial metrics pre-established by the Ingersoll Rand Compensation Committee. Based on its review, our Compensation
Committee determined Mr. Petratis achieved an individual performance rating of 115% and his bonus be awarded at the
“maximum” level based on the actual performance of Allegion for 2013:

Performance Levels
($ millions)

Metric

Actual Performance

Resulting Rating

Revenue

Operating Income

Operating Income %

Cash Flow

$2,117.2

$412.4

19.5%

$466.7

Maximum

Annual Incentive Matrix Payout

The actual AIM payout is determined by multiplying the individual target award by the financial performance score and

multiplying that result by the individual performance score. AIM payouts cannot exceed 200% of the target award. The NEO
payouts were determined based on the achievement of the goals pre-established by the Ingersoll Rand Compensation Committee.

To ensure that performance under the 2013 AIM was measured on a full year basis consistent with how 2013
performance goals were established, 2013 performance for AIM payout determinations was calculated based on full year 2013
financial results to reflect the organizational structure in place at the time that performance objectives were approved by the
Ingersoll Rand Compensation Committee in February 2013, prior to the Spin-off. Therefore, for purposes of measuring 2013
performance, the full year financial results for the Ingersoll Rand enterprise include full year financial results for Allegion. One-
time expenses associated with the Spin-off were excluded from calculation of 2013 financial results.

In addition, in determining the achievement of the 2013 AIM financial goals for the Ingersoll Rand enterprise, the

Ingersoll Rand Compensation Committee made the following adjustments: (a) adjusted OI downward to reflect only the net after
tax benefit excluding the non-controlling interest from the sale of the Fu Hsing facilities in China, (b) adjusted Revenue upward
to reflect revenue not recognized for customer orders placed directly with the Taiwan Fu Hsing manufacturing entities following
dissolution of the joint venture, (c) adjusted Revenue upward to offset the detrimental impact of a change in the accounting
approach for jobs sold through independent offices, and (d) adjusted Revenue, OI and Cash Flow upward to offset the impact of
flood damage to facilities in Shanghai, China. These adjustments were made to align 2013 AIM incentive awards and
performance for the year taking into consideration the impact of certain events not contemplated when 2013 AIM performance
objectives were established. Prior to the Ingersoll Rand Compensation Committee making these adjustments they were also
reviewed with the Ingersoll Rand Audit Committee. Our Compensation Committee reviewed the adjusted results approved by
the Ingersoll Rand Compensation Committee and approved them with one exception. Our Compensation Committee accepted
our management’s proposal to cap the Taiwan Fu Hsing adjustments for Security Technologies, which decreased the financial
score from 143.65% to 138.10%.

The table below shows the actual adjusted performance for the Ingersoll Rand enterprise, Security Technologies,

Security Technologies - Commercial Americas and the Security Technology - Asia Pacific for 2013 compared to the pre-
established financial performance targets.

Financial
Targets

Adjusted
Financial
Performance

Payout as a
% of Target

Aggregate
Payout as
% of Target

OI Margin
Multiplier

AIM Financial
Payout

11.3%

$1,575.0
$330.3
$358.8

$14,509.0
$1,639.0
$1,153.0

11.5%

$1,588.0
$325.0
$313.0

$14,400.0
$1,650.0
$1,100.0

Ingersoll Rand Enterprise
Revenue
OI
Cash Flow
OI Margin
Security Technologies
Revenue
OI
Cash Flow
OI Margin
Security Technologies - Commercial Americas
Revenue
OI
Cash Flow
OI Margin
Security Technologies - Asia Pacific
Revenue
OI
Cash Flow
OI Margin

$166.6
$9.1
$(16.5)

$993.7
$304.4
$300.2

20.5%

$153.5
$12.1
$(13.4)

$996.2
$307.9
$335.6

20.5%

141.5%
95.2%
153.2%
N/A

88.5%
126.5%
200.0%
N/A

113.7%
122.7%
200.0%
N/A

—%
100.0%
200.0%
N/A

130.0%

95.9%

124.6%

138.2%

99.9%

138.1%

145.3%

99.9%

145.2%

99.9%

99.8%

2013 Payouts to NEOs

Our Compensation Committee approved the following annual cash incentive awards for our NEOs based on achieving

both the 2013 financial and individual objectives:

NEO

Target Incentive as a % of
Target Bonus
Base Salary
Amount
(%)
($)
412,500 (1)
110%
70%
297,500
60%
245,284
65%
227,500
50%
172,315
(1) Represents a pro-rated target amount based on an annual target of $990,000.

D. D. Petratis
P. S. Shannon
T. P. Eckersley
B. A. Santoro
F. W. Yu

Actual Bonus Paid
($)
800,000
355,749
382,228
234,862
231,029

Transition Bonus

In recognition of the critical nature of the role and assistance required in implementing the Spin-off and to retain critical

talent during the transition period, Ingersoll Rand granted certain of our NEOs a transition cash bonus to be paid 50% on the
effective date of the Spin-off and 50% on the first anniversary of that date. To be eligible for a payment, individuals must be
actively employed by us on each of the payment dates. This bonus was contingent on the Spin-off actually taking place, with no
transition bonus paid if the Spin-off was not completed. The following transition awards were granted to our NEOs:

Name
P. S. Shannon
T. P. Eckersley
B. A. Santoro
F. W. Yu

Transition Bonus
($)
150,000
400,000
150,000
300,000

Paid in 2013
($)
75,000
200,000
75,000
150,000

Long-Term Incentive Program

Long-term Incentive (“LTI”) Target Opportunities

During 2013, the Ingersoll Rand Compensation Committee determined that two of our NEOs, Mr. Shannon and Ms.

Santoro, should receive an increase in target LTI opportunity following the Spin-off to reflect their new roles and increased
responsibilities with Allegion. These increases were approved by our Board and are effective as of December 1, 2013 as noted in
the table below:

NEO

D. D. Petratis

P. S. Shannon

T. P. Eckersley

B. A. Santoro

F. W. Yu

Pre-Spin Target LTI
Opportunity
($)

Post-Spin 2013 Target
LTI Opportunity
($)

3,000,000

400,000

380,000

270,000

100,000

3,000,000

650,000

380,000

375,000

100,000

Increase
(%)

—%

63%

—%

39%

—%

Ingersoll Rand’s Long-Term Incentive Program

Ingersoll Rand’s long-term incentive program is comprised of stock options, RSUs and PSUs and is designed to align

the executives’ interests with the interests of shareholders. This approach aligns long-term strategies with the best interest of
shareholders.

Performance Share Program: The Ingersoll Rand PSP is an equity-based incentive compensation program that provides
executives with an opportunity to earn PSUs based on Ingersoll Rand’s performance relative to other companies in the
S&P 500 Industrials Index. For awards granted prior to 2012, PSUs are earned based on Ingersoll Rand’s relative EPS
growth (from continuing operations) as compared to the companies within the S&P 500 Industrials Index over a three-
year performance period. For awards granted in 2013, PSUs are earned based equally on Ingersoll Rand’s relative EPS
growth (from continuing operations) and TSR as compared to the companies within the S&P 500 Industrials Index over
a three-year performance period. The actual number of PSUs earned for grants made in 2013 (which can range from 0%
to 200% of target) is based on the following criteria:

Ingersoll Rand’s Performance Relative to the
Companies within the S&P 500 Industrials Index

< 25th Percentile
25th Percentile
50th Percentile

75th Percentile
* Results are interpolated between percentiles achieved.

% of Target PSUs Earned*
No Awards Earned
25%
50%
100%

PSU target awards are set by assessing competitive market values for executives in the Ingersoll Rand
Compensation Survey Group that have similar roles and responsibilities. Targets are expressed as a dollar amount and
are converted to share equivalents (PSUs) based on the fair market value of the shares on the date that the award is
granted. The Ingersoll Rand Compensation Committee retains the authority and discretion to make downward
adjustments to the calculated PSP award payouts, either as a percentage or a dollar amount, or not to grant any award
payout regardless of actual performance against pre-established goals.

EPS is calculated in accordance with GAAP, subject to adjustments for extraordinary, unusual or infrequent

items; the impact of any change in accounting principles; goodwill and other intangible asset impairments; and gains or
charges associated with discontinued operations or with obtaining or losing control of a business.

Dividend equivalents are accrued on outstanding PSU awards at the same time and at the same rate as
dividends are paid to shareholders. Dividend equivalents are not earned until the PSUs vest and are payable in cash at
the time of distribution unless the NEO elected to defer the PSUs into our executive deferred compensation plan, in
which case the dividends are also deferred.

Stock Options/Restricted Stock Units: Ingersoll Rand grants executives an equal mix of stock options and RSUs in
order to provide an effective balance between risk and retention. Stock options are considered “at risk” since there is no
value unless the stock price appreciates during the term of the option period. RSUs, on the other hand, provide strong
retentive value because they have value even if our stock price does not grow during the restricted period.

Stock option and RSU targets are expressed in dollar amounts which are converted to a number of shares

based on the fair market value of Ingersoll Rand’s shares on the date that the award is granted. In order to determine the
target stock option and RSU awards for our NEOs, the Ingersoll Rand Compensation Committee considers factors such
as market competitiveness with its peer group, demonstrated potential to drive future business results and sustained
individual performance.

Both stock options and RSUs generally vest ratably, one third per year, over a three-year period following the
grant. Stock options expire on the tenth anniversary (less one day) of the grant date. Dividend equivalents are accrued
on outstanding RSU awards at the same time and at the same rate as dividends are paid to shareholders. Dividend
equivalents on RSUs are only payable if the underlying RSU award vests. At the time of vesting, one ordinary share is
issued for each RSU and any accrued dividend equivalents are paid in cash.

2013 Equity Awards

In 2013, the Ingersoll Rand Compensation Committee approved stock option, RSU and PSU awards based on
evaluation of market competitiveness and each of our NEO’s demonstrated potential to drive future business results and
sustained individual performance. The values in the following table reflect equity-based award values approved in 2013. These
values differ from the corresponding values reported in the Summary Compensation Table and the Grants of Plan-Based Awards
Table due to different methodologies used in assigning the economic value of equity-based awards required for accounting and
proxy statement reporting purposes. Equity award determinations are based on values as of January 1, while the accounting and
proxy statement values are determined as of the grant date. The difference is most significant for the PSU awards which are
earned, in part, based on TSR relative to the S&P 500 Industrials Index over a three-year performance period. The accounting
and proxy report values are greater because Ingersoll Rand’s stock price increased by a greater percentage relative to other
companies in the S&P 500 Industrials Index for the period from January 1, 2013 through February 22, 2013, the grant date.

NEO

D. D. Petratis

P. S. Shannon

T. P. Eckersley

B. A. Santoro

F. W. Yu

Target 2013-15
PSU Award
($)

Target 2013-15
PSU Award
(#)

Stock Option
Award
($)

Stock Option
Award
(#)

RSU Award
($)

RSU Award
(#)

—

160,000

152,000

108,000

40,000

—

3,042

2,890

2,054

761

—

120,000

125,000

81,000

33,000

—

7,273

7,600

4,910

2,000

—

120,000

125,400

81,000

33,000

—

2,282

2,385

1,540

628

2011 - 2013 Performance Cycle

As discussed above, PSUs for the 2011-2013 performance period were earned based on Ingersoll Rand’s EPS growth

(from continuing operations) performance relative to all of the companies in the S&P 500 Industrials Index. Ingersoll Rand
achieved an adjusted EPS from continuing operations of $3.63 in 2013 and achieved an adjusted EPS from continuing operations
of $2.16 in 2010. This represents an EPS growth rate of 68.1%, which ranks at approximately the 75th percentile of the
companies in the S&P 500 Industrials Index. As a result of this level of performance, the payout was 199% of target. For
purposes of measuring EPS growth, 2013 EPS was measured based on the combined 2013 EPS of both Ingersoll Rand and
Allegion to ensure a consistent basis for determining EPS growth. In addition, consistent with the terms of the award
agreements, one-time costs associated with the Spin-off as well as debt restructuring costs incurred in consideration of the Spin-
off were excluded from the 2013 EPS calculations in determining the PSU payout level for the 2011-2013 performance period.

Our NEOs received the following based on 2011-2013 actual vs. performance goals:

NEO

P. S. Shannon

T. P. Eckersley

B. A. Santoro

F. W. Yu

2011-13 PSU award

Target

Earned

($)

200,000

190,000

80,000

—

(#)

5,160

4,901

2,065

—

($)

614,343

583,473

245,881

—

(#)

10,269

9,753

4,110

—

Equity Conversion at Spin-off

In conjunction with the Spin-off, all outstanding equity awards were adjusted in the manner described in footnote (f) to

the 2013 Grants of Plan-Based Awards table to preserve the economic value of the awards immediately following the Spin-off.

Hiring Grant

In August 2013, the Ingersoll Rand Compensation Committee granted Mr. Petratis RSUs that cliff vest after three years

with a value of $1,587,820. This grant of RSUs replaced the equity awards he forfeited at his former employer.

Founder’s Grant

In December 2013, the Compensation Committee approved a one-time equity grant to select employees, including our

NEOs, in connection with the Spin-off (the “Founder’s Grant”). The Founder’s Grant was intended to ensure alignment with
shareholders and provide a retention incentive to key employees. Our NEO’s received a combination of PSUs and stock options.
The PSUs are earned based on our three-year TSR relative to the Performance Peer Group measured from December 2013 to
December 2016. The PSUs and stock options vest after three years; and the NEO must be employed by Allegion on the vesting
date.

For the NEOs, the Founder’s Grants had the following values:

Total Founder’s
Grant
($)

PSU Award
(50%)
($)

PSU Award
(#)

Stock Option
Award
(50%)
($)

Stock Option
Award
(#)

1,350,000

637,500

613,210

525,000

516,945

675,000

318,750

306,605

262,500

258,473

15,568

7,352

7,072

6,054

5,962

675,000

318,750

306,605

262,500

258,473

43,243

20,421

19,643

16,817

16,559

NEO

D. D. Petratis

P. S. Shannon

T. P. Eckersley

B. A. Santoro

F. W. Yu

The number of stock options was determined based on the Black-Scholes ratio on December 31, 2013 and the fair

market value of our ordinary shares on the date of the grant. The number of RSUs was determined using the fair market value of
our ordinary shares on the date of grant. The PSU values in the above table reflect values approved by our Compensation
Committee. These values differ from the corresponding values reported in the Summary Compensation Table and the Grants of
Plan-Based Awards Table due to different methodologies used in assigning the economic value of equity-based awards required
for accounting and proxy statement reporting purposes. For accounting and proxy purposes, the value of the PSUs are lower
because the grant date fair value of the PSUs are based on a Monte Carlo simulation we use to value the awards that considers
award performance metrics, maximum and target payouts among other factors.

IV.

Other Compensation and Tax Matters

2014 Compensation Decisions

Annual Incentive Program (“AIP”)

For 2014, our NEOs, including the CEO, will participate in a new annual incentive plan adopted by our Compensation

Committee, the AIP. The AIP will pay annual incentive awards based on the following metrics:

• Revenue;

• Earnings Before Income, Tax, Depreciation and Amortization (“EBITDA”) for corporate and OI for regions; and

• Available Cash Flow for corporate and Operations Cash Flow for regions.

The Compensation Committee believes the metrics are equally important and will weigh them equally. In order to

further emphasize the importance of meeting profitability goals, we must achieve an actual EBITDA for corporate or OI for the
regions equal to a pre-established threshold performance level in order for any incentive award to be earned (the “Threshold
Goal”). If the Threshold Goal is not attained, no incentive award will be earned under the AIP. The Compensation Committee
will also evaluate each NEO’s individual performance during the year when determining the amount of any incentive to be paid.

Long-term Incentive (“LTI”) Program

Our Compensation Committee reviewed the NEO target LTI opportunities in the first quarter of 2014 to determine whether
they adequately reward our executives for their services and remain competitive in the market for talent. Based on comparison to
the Allegion Compensation Benchmarking Group and, upon advice from its Consultant, our Compensation Committee approved
the LTI target opportunities, RSUs, stock options, and target PSU awards for the 2014 - 2016 performance period set forth below
to each of our NEOs. For the 2014 - 2016 performance period, the actual number of PSUs earned will be based the following
metrics:

• EPS performance over a three year time period compared to pre-established goals; and

• TSR relative to the S&P 400 Capital Goods Index over the applicable performance period.

2014 Target
LTI
Opportunity
($)

Target 2014-16
PSU Award
(50%)
($)

Target 2014-16
PSU Award
(#)

Stock Option
Award
(25%)
($)

Stock Option
Award
(#)

NEO

D. D. Petratis

3,000,000

1,500,000

P. S. Shannon

T. P. Eckersley

B. A. Santoro
F. W. Yu

750,000

500,000

375,000
150,000

375,000

250,000

187,500
75,000

27,714

6,929

4,619

3,465
1,386

750,000

187,500

125,000

93,750
37,500

38,344

9,586

6,391

4,793
1,918

RSU
Award
(25%)
($)

750,000

187,500

125,000

93,750
37,500

RSU
Award
(#)

13,857

3,465

2,310

1,733
693

The number of stock options was determined based on the Black-Scholes ratio on the grant date and the closing market
value of our ordinary shares on the grant date. The number of RSUs and target PSUs was determined using the fair market value
of our ordinary shares on the grant date.

Performance Share Units - Outstanding Performance Cycles

At the time of the Spin-off, we prorated and replaced outstanding target PSUs denominated in Ingersoll Rand equity

into PSUs of Allegion. Our Compensation Committee established new metrics and goals for the outstanding performance cycles.
Accordingly, in 2014 our NEOs received a prorated number of Allegion target PSUs that will be earned based on Allegion’s
performance against pre-established cumulative EPS target and TSR performance relative to the S&P 400 Capital Goods Index.

2013 - 2015 Performance Cycle

NEO

D. D. Petratis

P. S. Shannon

T. P. Eckersley

B. A. Santoro

F. W. Yu

2012 - 2014 Performance Cycle

NEO

D. D. Petratis

P. S. Shannon

T. P. Eckersley

B. A. Santoro

F. W. Yu

Target 2013-15
PSU Award
($)

1,000,000

216,668

137,300

125,000

36,200

Target 2013-15
PSU Award
(#)

18,476

4,004

2,537

2,310

669

Target 2012-14
PSU Award
($)

Target 2012-14
PSU Award
(#)

9,238

2,002

1,270

1,155

335

500,000

108,355

68,700

62,500

18,100

Stock Ownership Guidelines

The Compensation Committee believes NEOs and other senior executives should have a significant equity stake in

Allegion in order to more closely align their interests with those of our shareholders. Therefore, the Board of Directors has
established executive stock ownership guidelines on our NEOs. The requirements are as follows:

Position

CEO

CFO

SVP

Stock Ownership Level as a
Multiple of Annual Base Salary

Under these guidelines executives must retain 25% of net after-tax shares until the target ownership level is met.

Retirement Programs and Other Benefits

We maintain qualified and nonqualified defined benefit pension plans intended to provide fixed benefits upon
retirement based on the individual’s age and number of years of service. Refer to the Pension Benefits table below for additional
details on these programs.

We maintain a qualified defined contribution 401(k) plan called the ESP for the salaried and hourly U.S. workforce. The
ESP provides a dollar-for-dollar match on the first 6% of the employee’s eligible contributions to the ESP. The ESP has a number
of investment options and is an important component of the retirement program. Employees who were actively employed by
Ingersoll Rand prior to July 1, 2012 were given a one-time choice between continuing to participate in the defined benefit plan
until December 31, 2022 or moving to an enhanced version of the ESP effective January 1, 2013 under which they would receive
an employer core contribution of 2% of eligible pay in addition to the matching contribution and no longer accrue benefits under
the defined benefit plan after December 31, 2012. Employees hired by Ingersoll Rand on or after July 1, 2012 were
automatically covered under the enhanced version of the ESP and do not participate in the defined benefit plan. Employees hired
after the Spin-off are not eligible for the 2% employer core contribution. Effective as of December 31, 2022, accruals in the
qualified defined benefit plan will cease for all employees.

We also maintain a nonqualified, defined contribution plan called the Supplemental Employee Savings Plan (the
“Supplemental ESP”). The Supplemental ESP is an unfunded plan that makes up matching and core contributions that cannot be
made to the ESP due to Internal Revenue Service (“IRS”) or plan limitations. The Supplemental ESP is deemed invested in
funds selected by participants and includes the same funds available in the ESP except for a self-directed brokerage account,
which is not available in the Supplemental ESP.

We maintain a nonqualified executive deferred compensation plan (“EDCP”) that allows eligible employees to defer

receipt of a part of their annual salary, annual incentive award and/or PSP award in exchange for investments in ordinary shares
or mutual fund investment equivalents. Refer to the Nonqualified Deferred Compensation table for additional details on the
deferred compensation plans.

We also maintain the Huabao Service Retention Bonus Plan (the “Huabao Plan”) for Chinese employees that provides

for an annual company contribution equal to a percentage of annual base salary after income tax deduction (excluding bonus,
allowance and/or benefits). Participants in the Huabao Plan vest at the earlier of retirement, death, permanent disability or
company initiated termination.

An enhanced, long-term disability plan is provided to certain executives in order to provide for a higher monthly
maximum than the standard group plan and a more favorable definition of disability and has an underlying individual policy that
is portable when the executive terminates.

We also provide certain other benefits believed to be consistent with prevailing market practice and to be competitive

with peer company practices. These other benefits and their incremental costs to the Company are reported in “All Other
Compensation” shown in the Summary Compensation Table.

Severance Arrangements

We have not adopted a formal severance policy for executives. In most cases, we would expect to provide for severance

in the event of termination without cause.

We adopted a Spin-off Protection Plan and adopted equity award agreements to provide certain employees, including
officers, with certain benefits in the event of a termination of employment without cause or for good reason between December
1, 2013 and December 1, 2014 (the first anniversary of the Spin-off). This is a continuation of the Major Restructuring Plan
adopted by Ingersoll Rand prior to the Spin-off. The benefits available in the Spin-off Protection Plan are also described in the
Post-Employment Benefits section.

In connection with recruiting certain officers, we generally enter into employment arrangements that provide for
severance payments upon certain termination events, other than in the event of a change in control (which is described in
“Change-In-Control Provisions” below). In the event of an involuntary termination other than for cause following the expiration
of the Spin-off Protection Plan, Mr. Petratis, Mr. Shannon and Ms. Santoro will be eligible to receive severance equal to two
times (Mr. Petratis) or one times (Mr. Shannon and Ms. Santoro) base salary plus actual annual incentive award, not to exceed
target and pro-rated for the number of days worked during the performance period.

Change-In-Control Provisions

In preparation for the Spin-off, the Ingersoll Rand Compensation Committee approved a change in control plan (“CIC

Plan”) that covers our NEOs in order to focus them on the best interests of our shareholders and to assure continuity of
management in circumstances that reduce or eliminate job security and might otherwise lead to accelerated departures in the
event of a change in control. This CIC Plan provides cash severance benefits in the event that a change in control of Allegion
occurs and an officer is terminated within two years of that change in control for reasons other than cause. Cash severance
benefits in the event of a qualifying termination will be based on an individually defined Severance Multiple ranging from 1.5
for officers up to 2.0 for the CEO. Individual cash severance benefits will include (i) base salary in effect at termination times
the Severance Multiple, (ii) current cash target incentive award times the Severance Multiple, and (iii) actual incentive award in
the year of termination pro-rated for the portion of the performance cycle completed through the date of termination. In 2014,
the Severance Multiple for the CEO was increased to 3.0 and the amount of the pro-rata payout of the annual incentive was
changed to be based on target performance instead of actual performance. Cash severance benefits under the CIC Plan will be
reduced by severance-related benefits provided through any other Allegion severance program, including the Spin-off Protection
Plan. NEOs will also immediately vest in their Elected Officer Supplemental Program (“EOSP”) and Key Management
Supplemental Pension Plan (“KMP”) benefits following a change in control. For purposes of calculating Mr. Shannon’s and Ms.
Santoro’s EOSP benefits, two years would be added to both their age and service if their employment is terminated within two
years after a change in control. In addition, participants in the CIC Plan will, in the event of a qualifying termination, receive
continued health and welfare coverage for a term of years equal to the Severance Multiple and outplacement benefits of up to
$25,000.

The CIC Plan does not provide for payment of, or reimbursement for, any tax payments or other tax gross ups related to
the severance benefits. However, the CIC Plan does provide for cash severance benefits to be adjusted such that participants will
receive the better after tax benefit treatment (“Best of Net” approach) between (i) cash severance payments paid in full, with the
executive responsible for all taxes incurred, or (ii) cash severance payments reduced to avoid triggering excise taxes.

Senior Executive Performance Plan (“SEPP”)

The SEPP is a shareholder approved plan that funds the annual cash incentive awards that may be granted to each of the

NEOs under the AIP. Under the SEPP, the maximum amount of cash incentive that can be paid to the CEO is 1.5% of
Consolidated OI from Continuing Operations (as defined in the SEPP) and the maximum amount of cash incentive that can be
paid to any other covered executive is 0.6% of Consolidated OI from Continuing Operations. Our Compensation Committee
generally exercises its discretion to pay less than the maximum amount to the NEOs, after considering the factors described in
the AIP.

Tax and Accounting Considerations

Section 162(m) of the Code imposes a limit of $1,000,000 on the amount that a publicly-traded company may deduct
for federal income tax purposes in any taxable year for compensation paid to our CEO and the three other highest-paid NEOs,
other than our CFO, who are employed as of the end of the year. To the extent that compensation is “performance-based” within
the meaning of Section 162(m), the Section’s limitations will not apply. To qualify as performance based, compensation must,
among other things, be paid pursuant to a shareholder approved plan upon the attainment of objective performance criteria.

Our Compensation Committee believes that the tax deductibility of compensation is an important factor, but not the

sole factor, in setting executive compensation policies and in rewarding superior executive performance. Accordingly, our
executive compensation program has been designed with the intent that most of the variable compensation (i.e., AIP, PSP and
stock options) paid to NEOs would qualify as performance-based within the meaning of Section 162(m) so as to be tax
deductible to avoid the loss of a tax deduction due to Section 162(m). However, the Compensation Committee reserves the right
to approve the payment of compensation to our executive officers that does not qualify as “performance-based” within the
meaning of Section 162(m) and therefore, may not be deductible for federal income tax purposes.

In determining variable compensation program designs, our Compensation Committee considers other tax and

accounting implications of particular forms of compensation, such as the implications of Section 409A of the Code governing
deferred compensation arrangements and favorable accounting treatment afforded certain equity based plans that are settled in
shares. The forms of variable compensation utilized are determined primarily by their effectiveness in creating maximum
alignment between key strategic objectives and the interests of shareholders.

Timing of Awards

We intend to regularly grant annual equity grants on the business day after the filing of our Annual Report on Form 10-

K. The equity grant date is never selected or changed to increase the value of equity awards for executives.

COMPENSATION COMMITTEE REPORT

We have reviewed and discussed with management the Compensation Discussion and Analysis contained in this Proxy

Statement.

Based on our review and discussion, we recommended to the Board of Directors that the Compensation Discussion
and Analysis be included in this Proxy Statement as well as the Company’s Annual Report on Form 10-K for the year ended
December 31, 2013.

COMPENSATION COMMITTEE

Michael J. Chesser (Chair)
Carla Cico
Kirk S. Hachigian
Martin E. Welch, III

EXECUTIVE COMPENSATION

The following table provides summary information concerning compensation paid to or accrued on behalf of our NEOs for
services rendered during the years ended December 31, 2013 and 2012. The services rendered by our NEOs in 2013 and 2012 were,
in some instances, in capacities not equivalent to the positions in which they now serve Allegion. The information below is not
necessarily indicative of the compensation these individuals will receive as executive officers of Allegion.

Summary Compensation Table

Bonus
($)(b)

Stock
Awards
($)(c)

Option
Awards
($)(d)

Non-
Equity
Incentive
Plan
Compensation
($)(e)

Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(f)

All
Other
Compensation
($)(g)

Total
($)

1,330,000

2,039,921

675,023

—

73,858

54,116

4,536,379

75,000

—

516,040

319,554

445,057

113,147

200,000
—

504,273
314,970

437,924
118,236

75,000

—

380,078

206,187

350,548

67,415

355,749

167,588

382,228
265,455

234,862

132,459

—

395,851

32,122
187,116

17,776

423,923

281,723

56,593

2,057,877

1,408,490

57,919
45,868

79,783

58,469

2,020,525
1,326,311

1,454,420

1,195,203

Salary
($)(a)

363,461

384,308

355,757

406,059
394,666

316,373

306,750

331,529

289,221

150,000

—

251,891

82,890

307,155

31,122

231,029

144,525

—

84,164

56,559

1,355,768

604,317

Name and
Principal
Position

D. D. Petratis

Chairman, President
and Chief Executive
Officer

P. S. Shannon

Senior Vice
President and Chief
Financial Officer

T. P. Eckersley
Senior Vice
President - Americas

B. A. Santoro

Senior Vice
President, General
Counsel and
Secretary
F. W. Yu (h)

Senior Vice
President - Asia
Pacific

______________

Year

2013

2012

2013
2012

2013

2012

2013

2012

(a) A portion of a participant’s annual salary may be deferred into a number of investment options under our EDCP or Ingersoll

Rand’s deferred compensation plans. In 2013, no NEO deferred any salary.

(b) For Mr. Petratis, $800,000 represents an annual bonus and $530,000 represents a sign-on award to replace his lost annual

incentive award from his prior employer. For our other NEOs, the amount represents 50% of a transition cash bonus awarded by
Ingersoll Rand in recognition of the critical nature of the role and assistance required in implementing the Spin-off. The
remaining 50% will be paid on December 1, 2014, the first anniversary of the Spin-off, assuming the executive is employed on
that date.

(c) The amounts shown in this column reflect the aggregate grant date fair value of PSU awards and any RSU awards granted for the
year under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 and do not reflect
amounts paid to or realized by the NEOs. Amounts also include the incremental fair value associated with the conversion of
Ingersoll Rand RSU awards into Allegion RSU awards.

In determining the aggregate grant date fair value of the PSU awards, the awards are valued assuming target level performance
achievement. The PSU awards granted in December 2013 only pay out at the target level if performance is achieved. If the
maximum level performance achievement is assumed for the PSU awards granted in February 2013, the aggregate grant date fair
value of the PSU awards would be as follows:

Name

D. D. Petratis

P. S. Shannon

T. P. Eckersley

B. A. Santoro

F. W. Yu

Maximum Grant Date
Value Of
2013-15 PSU Awards
($)

—

364,918

346,684

246,398

91,290

The PSU awards granted in February 2013 pay out in Ingersoll Rand shares based on Ingersoll Rand performance for the
performance period. The NEOs will receive that portion of the PSU awards for the period they were employed by Ingersoll Rand.

For a discussion of the assumptions made in determining the ASC 718 values, see Note 13, “Share-Based Compensation,” to our
consolidated financial statements contained in the 2013 Form 10-K. The ASC 718 grant date fair value of the PSU award is
spread over the number of months of service required for the grant to become non-forfeitable, disregarding any adjustments for
potential forfeitures.
Please see also the Grants of Plan-Based Awards table for additional details of the 2013 grants included in this column.

(d) The amounts in this column reflect the aggregate grant date fair value of stock option grants for financial reporting purposes for
the year under ASC 718 and do not reflect amounts paid to or realized by the NEOs. Amounts also include the incremental fair
value associated with the Ingersoll Rand equity awards adjusted in connection with the Spin-off. For a discussion of the
assumptions made in determining the ASC 718 values, see Note 13, “Share-Based Compensation,” to our consolidated financial
statements contained in the 2013 Form 10-K.

(e) This column reflects the amounts earned as annual awards under Ingersoll Rand’s AIM program. Unless deferred into the EDCP,
AIM program payments are made in cash. Mr. Eckersley elected to defer 50% of his AIM payment. Amounts shown in this
column are not reduced to reflect deferrals of AIM awards into the EDCP.

(f) Amounts reported in this column reflect the aggregate increase in the actuarial present value of the benefits under the qualified
Pension Plan (the “Pension Plan”), Supplemental Pension Plan, KMP and EOSP, as applicable. The change in pension benefits
value is attributable to the additional year of service and age, the annual AIM award and any annual salary increase and the
interest rates used to value the benefits. The changes in pension benefit values during 2013 were less than 2012 due to the
increase in interest rates used to value the benefits. The plans do not permit above-market or preferential earnings on any
nonqualified deferred compensation. In 2013, the pension value for Mr. Shannon declined by $589.

(g) The following table summarizes the components of this column for 2013:

Name

D. D. Petratis
P. S. Shannon
T. P. Eckersley
B. A. Santoro
F. W. Yu
_____________

Company
Matching
Contributions
($)(1)

19,454
33,114
40,291
26,930
34,010

Company
Cost for
Life
Insurance
($)
1,518
866
958
1,328
—

Retiree
Medical
Plan
($)(2)

—
—
—
608
—

Tax
Assistance
($)(3)

6,749
85,933
—
2,183
—

Other
Benefits
($)(4)

26,395
161,811
16,671
48,735
50,153

Total
($)

54,116
281,723
57,919
79,783
84,164

(1) Represents matching contributions under Ingersoll Rand’s and Allegion’s ESP and Supplemental ESP plans for Messrs.

Petratis, Shannon and Eckersley and Ms. Santoro and under the Huabao Plan for Mr. Yu.

(2) Represents the estimated interest on the value of the retiree medical plan benefit, calculated based on the methods used

for financial statement reporting purposes.

(3) Represents tax assistance provided to the NEOs in connection with relocation costs incurred.
(4) The other benefits the NEOs received in 2013 are:

Name

D. D. Petratis
P. S. Shannon
T. P. Eckersley
B. A. Santoro
F. W. Yu

Car Usage
($)(i)

7,500
26,829
14,927
16,389
49,826

Executive
Long-term
Disabilty
($)

—
850
1,744
1,815
—

Relocation
($)

15,520
130,710
—
20,055
—

Financial
Counseling
($)

3,375
3,422
—
7,791
—

Executive
Health
Program
($)

—
—
—
2,685
327

Total
($)

26,395
161,811
16,671
48,735
50,153

(i) Represents the incremental cost of the leased cars, calculated based on the lease, insurance, fuel and

maintenance costs for all NEOs other than Mr. Yu. For Mr. Yu, the amount represents the value of the car and
driver provided under the Chinese car policy.

(h) Cash amounts for Mr. Yu were paid in Chinese Yuan. For reporting purposes, these amounts have been converted from Chinese

Yuan to United States dollars in this table and throughout this Proxy Statement. Where amounts are reported as of a point in time,
Chinese Yuan were converted to United States dollars using the closing currency exchange rate as of December 31, 2013. Where
payments were made throughout the year, Chinese Yuan were converted to United States dollars using the closing currency
exchange rate as of the last day of the month in which the cash compensation was received or deemed to have been received.

The following table shows all plan-based awards granted to the NEOs during 2013. The number of awards included in this

table reflect the pre-Spin-off unadjusted numbers. This table is supplemental to the Summary Compensation Table and is intended to
complement the disclosure of equity awards and grants made under non-equity incentive plans in the Summary Compensation Table.

2013 Grants of Plan-Based Awards

Estimated Future Payouts
Under Non-Equity
Plan Awards

Estimated Future Payouts
Under Equity
Incentive Plan Awards

Name

D. D. Petratis

Grant
Date

Threshold
($)(a)

Target
($)(a)

Maximum
($)(a)

Threshold
(#)(b)

Target
(#)(b)

Maximum
(#)(b)

RSUs

8/9/2013

PSUs (2013-16)

12/13/2013

Options

RSUs (f)

P. S. Shannon

12/13/2013

8/9/2013

—

AIM

2/22/2013

114,205

228,410

456,820

PSUs (2013-15)

2/22/2013

Options

RSUs

2/22/2013

PSUs (2013-16)

12/13/2013

Options

RSUs (f)

Options (f)

T. P. Eckersley

12/13/2013

2/14/2011

2/24/2012

2/22/2013

2/16/2010

2/14/2011

2/24/2012

—

AIM

2/22/2013

122,642

245,284

490,568

PSUs (2013-15)

2/22/2013

Options

RSUs

2/22/2013

PSUs (2013-16)

12/13/2013

Options

RSUs (f)

Options (f)

12/13/2013

2/14/2011

11/1/2011

2/24/2012

2/22/2013

2/16/2010

2/14/2011

2/24/2012

—

— 15,568

—

3,042

6,084

—

7,352

—

2,890

5,780

—

7,072

—

761

—

723

—

All
Other
Stock
Awards:
Number
of
Shares
of Stock
or Units
(#)(c)

All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)(c)

Exercise
or Base
Price of
Option
Awards
($/Sh)
(d)

Closing
Stock
Price on
Grant
Date
($/Sh)

26,000

—

26,000

—

2,282

—

2,113

2,949

2,282

—

2,385

—

2,208

10,000

3,082

2,385

—

43,243

43.360

43.25

—

7,273

52.600

52.61

—

20,421

43.360

43.25

—

8,505

7,018

8,271

—

31.590

47.340

40.700

—

7,600

52.600

52.61

—

19,643

43.360

43.25

—

9,781

7,334

8,643

31.590

47.340

40.700

—

Grant
Date
Fair
Value of
Stock
and
Option
Awards
($)(e)

1,587,820

452,095

675,023

—

182,459

120,005

120,033

213,502

318,772

1,283

1,113

3,884

—

173,342

125,400

125,451

205,371

306,627

1,475

779

3,643

Estimated Future Payouts
Under Non-Equity
Plan Awards

Estimated Future Payouts
Under Equity
Incentive Plan Awards

Name

B. A. Santoro

Grant
Date

Threshold
($)(a)

Target
($)(a)

Maximum
($)(a)

Threshold
(#)(b)

Target
(#)(b)

Maximum
(#)(b)

All
Other
Stock
Awards:
Number
of
Shares
of Stock
or Units
(#)(c)

All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)(c)

Exercise
or Base
Price of
Option
Awards
($/Sh)
(d)

Closing
Stock
Price on
Grant
Date
($/Sh)

Grant
Date
Fair
Value of
Stock
and
Option
Awards
($)(e)

AIM

2/22/2013

62,831

179,517

359,034

PSUs (2013-15)

2/22/2013

Options

RSUs

2/22/2013

PSUs (2013-16)

12/13/2013

2/14/2011

2/24/2012

2/22/2013

2/7/2007

2/16/2010

2/14/2011

2/24/2012

Options

RSUs (f)

Options (f)

F. W. Yu

AIM

—

2/22/2013

25,771

128,854

257,708

PSUs (2013-15)

2/22/2013

Options

RSUs

2/22/2013

PSUs (2013-16)

12/13/2013

Options

RSUs (f)

SARs (f)

Options (f)

12/13/2013

2/14/2011

11/1/2011

2/24/2012

2/22/2013

2/2/2005

2/1/2006

2/14/2011

11/1/2011

2/24/2012

___________________

—

514

—

190

—

2,054

—

6,054

—

761

—

5,962

—

4,108

—

1,522

—

1,540

—

2,007

1,757

1,540

—

628

—

634

4,000

811

628

—

4,910

52.600

52.61

—

16,817

43.360

43.25

—

17,090

8,930

6,667

4,928

—

43.125

31.592

47.335

40.700

—

2,000

52.600

52.61

—

16,559

43.360

43.25

—

2,000

1,420

2,104

38.690

39.430

47.340

13,237

30.420

2,275

40.700

—

123,199

81,015

81,004

175,808

262,513

2,310

1,346

1,062

2,301

—

45,645

33,000

33,033

173,136

258,486

360

500

630

13,239

940

(a) The target award levels for the AIM program were established by the Ingersoll Rand Compensation Committee in February

2013. Refer to Compensation Discussion and Analysis under the heading “Annual Incentive Matrix Program” for a description
of the Ingersoll Rand Compensation Committee’s process for establishing AIM program target award levels. The amounts
reflected in the “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” columns represent the threshold, target
and maximum amounts for awards under the AIM program that were paid in February 2014, based on performance in 2013.
Thus, the amounts shown in the “threshold, target and maximum” columns reflect the range of potential payouts when the
target award levels were established in February 2013. The AIM program pays $0 for performance below threshold. The actual
amounts paid pursuant to those awards are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary
Compensation Table.

(b) The amounts reflected in the “Estimated Future Payouts Under Equity Incentive Plan Awards” columns represent the threshold,
target and maximum amounts for annual PSU awards for the 2013-2015 performance period and the special PSU awards for the
2013-2016 performance period. The special PSU awards only payout at target if performance is achieved. The PSP pays $0 for
performance below threshold. The annual PSU awards granted for the 2013-2015 performance period were truncated for the
period the NEOs were employed by Ingersoll Rand. For a description of the Compensation Committee’s process for
establishing PSP target award levels and the terms of PSU awards, please refer to Compensation Discussion and Analysis under
the heading “Long-Term Incentive Program” and the “Post-Employment Benefits” section below.

February 2013 and December 2013. The RSU awards and stock option awards granted in February 2013 were converted into
Allegion RSUs and stock options in connection with the Spin-off. For a description of the Compensation Committee’s process
for determining stock option and RSU awards and the terms of such awards, see Compensation Discussion and Analysis under
the heading “Long-Term Incentive Program” and the “Post-Employment Benefits” section below.

(d) Stock options granted prior to December 1, 2013 were granted under Ingersoll Rand’s Incentive Stock Plan of 2007. Stock
options granted after December 1, 2013 were granted under our Incentive Stock Plan of 2013 (the “2013 Plan”). Each plan
requires stock options to be granted at an exercise price equal to the fair market value of the applicable company’s ordinary
shares on the date of grant. The fair market value is defined as the average of the high and low composite price of the
applicable company’s ordinary shares listed on the NYSE on the grant date.

(e) The grant date fair value of the equity awards granted in February 2013 and December 2013 was calculated in accordance with
ASC 718. We caution that the actual amount ultimately realized by each NEO from the stock option awards will likely vary
based on a number of factors, including stock price fluctuations, differences from the valuation assumptions used and timing of
exercise or applicable vesting. For a description of the assumptions made in valuing the equity awards see Note 13, “Share-
Based Compensation” to our consolidated financial statements contained in its 2013 Form 10-K. For PSUs, the grant date fair
value has been determined based on achievement of target level performance, which is the performance threshold we believe is
the most likely to be achieved under the grants.

(f) In connection with the Spin-off, the adjustments set forth below were made to outstanding Ingersoll Rand equity awards in

order to maintain their pre-Spin-off intrinsic values. Due to rounding when adjusting the awards, incremental value was created
for these stock options, stock appreciation rights (“SARs”) and RSUs.

• Vested and Exercisable Stock Options and SARs: Vested and exercisable Ingersoll Rand stock options and SARs were
converted into vested and exercisable stock options and SARs of both of Ingersoll Rand and Allegion with the same
terms and provisions. Holders received 1 stock option or SAR of Allegion for every 3 Ingersoll Rand vested and
exercisable stock options or SARs held, subject to rounding. Exercise prices were adjusted to preserve the intrinsic
value (subject to rounding) immediately before and after Spin-off.

• Unvested Stock Options: Unvested Ingersoll Rand stock options were converted into unvested Allegion stock options

with the same terms and provisions. Both the number of stock options and exercise price were adjusted to preserve the
intrinsic value (subject to rounding) immediately before and after the Spin-off.

• Restricted Stock Units: Unvested Ingersoll Rand RSUs were converted into unvested Allegion RSUs with the same
terms and provisions. The number of outstanding RSUs was adjusted to preserve the intrinsic value (subject to
rounding) of the RSUs immediately before and after the Spin-off.

Outstanding Equity Awards at December 31, 2013

The following table shows, for each of the NEOs, all equity awards that were outstanding as of December 31, 2013. The
information included in the table below reflects equity awards held following the conversion of Ingersoll Rand equity awards into
Allegion equity awards.

Option Awards

Stock Awards

Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
(a)

Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(a)

Number of
Shares or
Units of
Stock that
have Not
Vested
(#)
(c)

Market Value
of Shares or
Units of Stock
that have Not
Vested ($)
(d)

Option
Exercise
Price
($)

Option
Expiration
Date
(b)

—

—
2,835

1,559

—

919

—

3,260

—

5,696

2,979

1,481

—

547

—

3,253

2,310

2,280

—

43,243
—

—

3,806

—

8,970

11,832

20,421

—

3,977

—

9,374

12,364

19,643

—

3,616

—

5,345

7,987

16,817

—

1,142

21,535

2,467

3,253

16,559

—

43.3600
19.4547

29.1159

29.0956

25.0472

25.0173

32.3319

43.3600

19.4579

29.0956

—

25.0173

32.3319

43.3600

26.5334

19.4519

29.1158

29.0956

25.0357

25.0173

32.3319

43.3600

23.7787

24.2336

29.0956

18.6969

25.0173

32.3319

43.3600

—

42,229

1,866,100

12/13/2023
2/15/2020

2/13/2021

2/23/2022

2/21/2023

12/13/2023

2/15/2020

2/13/2021

—

2/23/2022

2/21/2023

12/13/2023

2/6/2017

2/15/2020

2/13/2021

2/23/2022

2/21/2023

12/13/2023

2/1/2015

1/31/2016

2/13/2021

10/31/2021

2/23/2022

2/21/2023

12/13/2023

—
—

—

1,147

—

3,199

3,713

—

1,198

16,269

3,344

3,881

—

1,089

—

1,907

2,506

—

345

6,508

881

1,022

—

—
—

—

50,686

—

141,364

164,077

—

52,940

718,927

147,771

171,501

—

48,123

—

84,270

110,740

—

15,246

287,589

38,931

45,162

—

Name

Grant
Date

D. D. Petratis

8/9/2013

P. S. Shannon

12/13/2013
2/16/2010

2/14/2011

2/24/2012

2/22/2013

12/13/2013

T. P. Eckersley

2/16/2010

B. A. Santoro

F. W. Yu

2/14/2011

11/1/2011

2/24/2012

2/22/2013

12/13/2013

2/7/2007

2/16/2010

2/14/2011

2/24/2012

2/22/2013

12/13/2013

2/2/2005

2/1/2006

2/14/2011

11/1/2011

2/24/2012

2/22/2013

12/13/2013

Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights that
have Not
Vested
(#)
(e)

—

15,568
—

—

Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights that
have Not
Vested
($)
(d)

—

687,950
—

—

7,352

324,885

—

7,072

312,512

—

6,054

267,526

—

1,023

379

5,962

—

45,206

16,748

263,461

___________________

(a) These columns represent stock option and SARs awards. Except for the stock option awards granted on December 13, 2013, these
awards generally become exercisable in three equal installments beginning on the first anniversary after the date of grant, subject
to continued employment or retirement. The stock option awards granted on December 13, 2013 vest 100% on the third
anniversary of the grant date.

(b) Stock options granted prior to December 1, 2013 expire on the tenth anniversary (less one day) of the grant date. Stock options

granted following December 1, 2013 expire on the tenth anniversary of the grant date.

(c) This column represents unvested RSUs. Except as described in the following sentence, RSUs generally become exercisable in

three equal installments beginning on the first anniversary after the date of grant, subject to continued employment or retirement.
In the case of Mr. Petratis’s grant dated August 9, 2013, 100% of it vests on the third anniversary of the grant date.

(d) The market value was computed based on $44.19, the closing market price of our ordinary shares on the NYSE at December 31,

2013.

(e) This column represents unvested and unearned PSUs. PSUs vest upon the completion of a three-year performance period. For the

PSUs granted on December 13, 2013, the receipt of the shares subject to the award is subject to achievement of the performance
goals as certified by the Compensation Committee, and continued employment. For Mr. Yu, his outstanding Ingersoll Rand PSUs
converted into Allegion PSUs but were truncated for the period he was an Ingersoll Rand employee.

Following the Spin-off, our NEOs held the following Ingersoll Rand stock options and PSUs:

Name

D. D. Petratis

P. S. Shannon

T. P. Eckersley

B. A. Santoro

F. W. Yu

Stock Options
(#)

—

15,940

9,781

24,106

—

PSUs
(#)

—

9,486

9,010

4,985

—

The following table provides information regarding the number of Ingersoll Rand stock options and SARs that were
exercised by our NEOs or the number of Ingersoll Rand RSUs that vested during the last fiscal year before the Spin-off. The number
of shares with respect to these stock options and RSUs is presented on a pre-Spin-off basis.

2013 Option Exercises and Stock Vested

Option Awards

Stock Awards

Number of Shares
Acquired on Exercise
(#)

—
106,893
27,770
69,234
7,291

Value
Realized on
Exercise
($) (a)

—
2,122,342
215,952
1,573,673
169,719

Number of Shares
Acquired on Vesting
(#)

—
15,289
14,884
12,346
798

Value
Realized on
Vesting
($) (b)

—
805,237
784,038
698,313
42,294

Name
D. D. Petratis
P. S. Shannon
T. P. Eckersley
B. A. Santoro
F. W. Yu

___________________

(a) This column reflects the aggregate dollar amount realized by the NEO upon the exercise of the stock options and
SARs by determining the difference between (i) for stock options, the market price of the Company’s ordinary
shares at exercise and the exercise price of the stock options or (ii) for SARs, the opening stock price of the
Company’s ordinary shares on the date of exercise and the exercise price of the SARs.

(b) Reflects the value of the RSUs that vested on February 14, 2013, February 22, 2013 and February 24, 2013, based

on the average of the high and low stock price of the Ingersoll Rand’s ordinary shares on the vesting date.

The NEOs, other than Mr. Yu, participate in one or more of the following defined benefit plans:

2013 Pension Benefits

•

the Pension Plan;

the Supplemental Pension Plan; and

the EOSP or the KMP.

The Pension Plan is a funded, tax qualified, non-contributory defined benefit plan that covers Allegion’s U.S. employees hired

prior to June 30, 2012. The Pension Plan provides for normal retirement at age 65. A participant becomes vested in the benefit: (i)
after five years of service, or (ii) while employed, the participant (a) attains age 65, (b) dies or (c) becomes disabled. The formula to
determine the lump sum benefit under the Pension Plan is 5% of final average pay (the five highest consecutive years out of the last
ten years of eligible compensation) for each year of credited service. A choice for distribution between an annuity and a lump sum
option is available. The Pension Plan was closed to new participants after June 30, 2012, and no further benefits will accrue to any
Pension Plan participant for service performed after December 31, 2022. Certain participants made an election in 2012 to forego
accruing further benefits for service performed after December 31, 2012, and, in lieu, receive a non-elective employer contribution
equal to 2% of eligible compensation in the ESP. No NEOs made this election.

The Supplemental Pension Plan is an unfunded, nonqualified, non-contributory defined benefit restoration plan. Since the IRS

limits the annual compensation recognized when calculating benefits under the qualified Pension Plan, the Supplemental Pension
Plan restores what is lost in the Pension Plan due to these limits. The Supplemental Pension Plan covers all Allegion employees who
participate in the Pension Plan and who are impacted by the IRS Code compensation limits. A participant must meet the vesting
requirements of the qualified Pension Plan to vest for benefits under the Supplemental Pension Plan. Benefits under the Supplemental
Pension Plan are available only as a lump sum distribution after termination and paid in accordance with Section 409A of the Code.
As a result of the 2012 changes to the Pension Plan, the Supplemental Pension Plan was closed to employees hired on or after June
30, 2012, and no further benefits will accrue to any Supplemental Pension Plan participant for service performed after December 31,
2022 or after December 31, 2012 to the extent the participant made an election.

The NEOs, other than Mr. Yu, participate in either the EOSP or the KMP. The EOSP, which is closed to new participants, is an

unfunded, nonqualified, non-contributory defined benefit plan, designed to replace a percentage of an officer’s final average pay
based on his or her age and years of service at the time of retirement. Final average pay is defined as the sum of the officer’s current
annual salary plus the average of his or her three highest annual incentive awards during the most recent six years. No other elements
of compensation (other than salary and annual incentive awards) are included in final average pay. The EOSP provides a benefit
pursuant to a formula in which 1.9% of an officer’s final average pay is multiplied by the officer’s years of service (up to a maximum
of 35 years) and then reduced by the value of other retirement benefits the officer will receive that are provided by Allegion under
certain qualified and nonqualified retirement plans as well as Social Security. Vesting occurs, while the officer is employed by
Allegion, at the earlier of the attainment of age 55 and the completion of 5 years of service or age 62. Unreduced benefits under the
EOSP are available at age 62 and benefits are only available as a lump sum after termination and paid in accordance with Section
409A of the Code.

The KMP, which is closed to new participants, is an unfunded, nonqualified, non-contributory defined benefit plan designed

to replace a percentage of a key employee’s final average pay based on his or her age and years of service at the time of retirement.
Final average pay is defined as the sum of the key employee’s current annual salary plus the average of the employee’s three highest
annual incentive awards during the most recent six years. No other elements of compensation (other than salary and AIM awards) are
included in final average pay. The KMP provides a benefit pursuant to a formula in which 1.7% of a key employee’s final average pay
is multiplied by years of service (up to a maximum of 30 years) and then reduced by the value of other retirement benefits the key
employee will receive that are provided by Allegion under certain qualified and nonqualified retirement plans as well as Social
Security. Vesting occurs at the earlier of the attainment of age 55 and the completion of 5 years of service or age 65. Benefits are only
available as a lump sum after termination and paid in accordance with Section 409A of the Code.

The table below represents the estimated present value of defined benefits for the plans in which each NEO participates.

Name
D. D. Petratis
P. S. Shannon

T. P. Eckersley

B. A. Santoro

F. W. Yu (c)

____________

Plan
Name

EOSP
Pension Plan
Supplemental Pension Plan
EOSP
Pension Plan
Supplemental Pension Plan
KMP
Pension Plan
Supplemental Pension Plan
EOSP
—

Number of Years
Credited Service
(#)
(a)
0.42
11.67
11.67
12.00
6.17
6.17
6.17
17.58
17.58
18.00
—

Present Value of
Accumulated
Benefit
($)
(b)
73,858
98,994
112,205
1,239,110
50,604
81,836
408,009
211,492
106,509
1,737,825
—

Payments
During
Last Fiscal
Year
($)

—
—
—
—
—
—
—
—
—
—
—

(a) Under the EOSP or the KMP, for officers covered prior to May 19, 2009 by Ingersoll Rand, a full year of service is credited for

any year in which they work at least one day. In the Pension Plan, the Supplemental Pension Plan, the EOSP and the KMP for
officers first covered on or after May 19, 2009 by Ingersoll Rand, the number of years of credited service is based on elapsed
time (i.e., credit is given for each month in which a participant works at least one day). For Ms. Santoro, the benefits previously
provided under Ingersoll Rand’s Supplemental Pension Plan I and Supplemental Pension Plan II were combined in the Spin-off
into Allegion’s Supplemental Pension Plan and are reported together in the above table.

(b) The amounts in this column reflect the estimated present value of each NEO’s accumulated benefit under the plans indicated.
The calculations reflect the value of the benefits assuming that each NEO was fully vested under each plan. The benefits were
computed as of December 31, 2013, consistent with the assumptions described in Note 10, “Pensions and Postretirement
Benefits Other than Pensions,” to the annual combined financial statements included the 2013 Form 10-K.

2013 Nonqualified Deferred Compensation

The following is a description of our nonqualified deferred compensation plans. For the period prior to December 1, 2013, our

NEOs were eligible to participate in Ingersoll Rand’s deferred compensation plans, which are substantially similar to our plans.

We maintain the EDCP, which is an unfunded, nonqualified plans that permit certain employees, including the NEOs other than

Mr. Yu, to defer receipt of up to 50% of their annual salary and up to 100% of their AIM awards, PSP awards and RSUs received
upon commencement of employment. Elections to defer must be made prior to the beginning of the performance period. These
assets are considered general assets of the Company and are available to our creditors in the event of the Company’s insolvency. For
the period prior to December 1, 2013, the NEOs were eligible to participate in deferred compensation plans maintained by Ingersoll
Rand that were substantially similar to the EDCP.

Participants are offered certain investment options (approximately 60 mutual fund investments and ordinary share equivalents)

and can choose how they wish to allocate their cash deferrals among those investment options. Participants are 100% vested in all
amounts deferred and bear the risk of any earnings and losses on such deferred amounts.

Generally, deferred amounts may be distributed following termination of employment or at the time of a scheduled in-service

distribution date chosen by the participant. If a participant has completed five or more years of service at the time of termination, or
is terminated due to long-term disability, death or retirement, the distribution is paid in accordance with the participant’s election. If
a participant terminates without meeting these requirements, the account balance for all plan years will be paid in a lump sum in the
year following the year of termination. A participant can elect to receive distributions at termination over a period of five, 10, or 15
annual installments, or in a single lump sum. A participant can elect to receive scheduled in-service distributions in future years that
are at least two years after the end of the plan year for which they are deferring. In-service distributions can be received in two to
five annual installments, or if no election is made, in a lump sum. For those participants who have investments in ordinary shares,
the distribution of these assets will be in the form of ordinary shares, not cash.

Please refer to Compensation Discussion and Analysis for a description of the Supplemental ESP.

Mr. Yu participates in two nonqualified deferred compensation plans in China. The Huabao Plan provides for an annual
company contribution equal to a percentage of annual base salary (12% in Mr. Yu's case) after income tax deduction (excluding
bonus, allowance and/or benefits). Participants in the Huabao Plan vest at the earlier of retirement, death, permanent disability or
company initiated termination. The Generali Savings Plan is a frozen deferred compensation plan that pays interest on deferred
amounts. The Generali Savings Plan was frozen in 2011 and no employee or employer contributions have been made since that
time. The Generali Savings Plan does not pay a preferential interest rate.

The following table provides information regarding contributions, distributions, earnings and balances for each NEO under

our nonqualified deferred compensation plans:

Name

D. D. Petratis

Supplemental ESP

P. S. Shannon

EDCP
Supplemental ESP

T. P. Eckersley

EDCP
Supplemental ESP

B. A. Santoro

EDCP

Supplemental ESP

F. W. Yu

Huabao Plan
Generali Savings Plan

____________

Executive
Contributions
in Last Fiscal
Year ($)
(a)

Registrant
Contributions
in Last Fiscal
Year ($)
(b)

Aggregate
Earnings in
Last Fiscal
Year ($)
(c)

Aggregate
Withdrawals/
Distributions
($)

Aggregate
Balance at
Last Fiscal
Year End ($)
(d)

—

—
—

132,727
—

—

—
—

2,169

—
17,814

—
24,991

—

11,630

34,010
—

425,984
93,492

164,047
65,729

957

53,166

845
4,310

—

—
—

2,197

1,493,814
349,100

50,576
—

—

—
—

802,663
233,470

8,952

191,720

40,867
108,107

(a) The annual deferrals (salary, annual incentive awards & PSP) are all reflected in the Salary column, the Non-Equity

Incentive Plan column and the Stock Awards column, respectively of the Summary Compensation Table.

(b) All of the amounts reflected in this column are included in the All Other Compensation column of the Summary

Compensation Table.

(c) Amounts in this column include gains and losses on investments, as well as dividends on ordinary shares or ordinary share
equivalents. None of the earnings or losses reported in this column are included in the Summary Compensation Table.

(d) The following table reflects the amounts reported in this column previously reported as compensation to the NEOs in the

Summary Compensation Table included in our Registration Statement on Form 10.

Name

D. D. Petratis

P. S. Shannon

T. P. Eckersley

B. A. Santoro

F. W. Yu

EDCP

Supplemental ESP

Huabao Plan

—

75,924

—

17,643

17,791

12,543

—

5,824

Post-Employment Benefits

The following discussion describes the compensation to which each NEO would be entitled in the event of termination of

such executive’s employment, including termination following a change in control.

Employment Arrangements and Severance. All of the NEOs are entitled to benefits upon termination of their employment

following a change in control. Messrs. Petratis and Shannon and Ms. Santoro are also entitled to severance in the event of an
involuntary termination without cause pursuant to their employment agreements. Messrs. Petratis and Shannon and Ms. Santoro are
eligible to receive for 24 months and 12 months, respectively, of base annual salary plus a prorated annual incentive award earned for
the year of termination as determined and paid at the conclusion of the full performance year in accordance with the terms of the plan.

Our equity award agreements, other than for the Founder’s Grant, provide that upon termination for:

•

death, disability or retirement, RSUs, stock options and SARs shall immediately vest and the stock options and SARs
remain exercisable for a period of three years (or five years in the case of retirement for awards granted in 2007 and
after) following termination;

group termination, RSUs, stock options and SARs immediately vest in the portion of the awards that would have
vested within twelve months of termination and all vested stock options and SARs remain exercisable for a period of
three years following termination;

death or disability, PSUs vest pro-rata based on the time worked during the performance period and the achievement
of performance goals from the beginning of the performance period through the end of the calendar quarter in which
employment terminated; and

retirement, group termination or job elimination, PSUs vest pro-rata based on the time worked during the performance
period and the achievement of performance goals through the end of the performance period.

The equity award agreements for the Founder’s Grant provide that upon death or disability, all stock options will immediately

vest and remain exercisable for three years and all PSUs will vest as if the person was employed by the Company throughout the
performance period.

Change in Control. Our CIC Plan covers certain officers, including the NEOs. The CIC Plan provides for certain payments

if the employment is terminated by the Company without “cause” (as defined in the CIC Plan) or by the NEO for “good reason” (as
defined in the CIC Plan), in each case, within two years following a change in control of the Company. The CIC Plan does not provide
for a payment to cover the impact to the executive of certain incremental taxes incurred in connection with the payments made
following a change in control. The amount paid under the CIC Plan will be reduced to avoid the payment of any excise taxes.

If an NEO’s employment is terminated “without cause” or by the NEO for “good reason” following a change in control, the

NEO is entitled to the following:

•

any accrued but unpaid base salary;

an amount equal to the NEO’s annual bonus for the year in which the termination occurred, pro-rated for the months of
service; and

a lump sum severance payment equal to the two times the sum of:

the NEO’s annual salary in effect on the termination date, or, if higher, the annual salary in effect immediately
prior to the event that constitutes “good reason”; and

the NEO’s actual annual incentive award for the year of termination.

In addition to the foregoing, the NEOs would also be eligible to participate in the Company’s welfare employee health
programs for the severance period (three years for the CEO) and (two years for the other NEOs) and the Company will pay the
premium for the first eighteen months. The Company would also provide each NEO up to $25,000 of outplacement services.

Under the 2013 Plan, outstanding unvested stock options, SARs and RSUs immediately vest and become exercisable or

payable, as applicable, following a change in control unless an alternate award is provided by the acquiring company. PSUs, other
than the Founder’s Grant PSUs, will be deemed to have earned a pro-rata award based on the target award opportunity and total
number of months worked in the applicable performance period. The Founder’s Grant PSUs will be deemed to have earned the full
amount of the award upon a change in control.

A “change in control” is defined as the occurrence of any of the following events: (i) any person unrelated to the Company

becomes the beneficial owner of 30% or more of the combined voting power of the Company’s voting stock; (ii) the directors serving
at the time the change-in-control plan was adopted (or the directors subsequently elected by the shareholders of the Company whose
election or nomination was duly approved by at least two-thirds of the then serving directors) fail to constitute a majority of the Board
of Directors; (iii) consummation of any transaction or series of transactions under which the Company is merged or consolidated with
any other company which is not an affiliate; (iv) any sale or transfer of all or substantially all of the Company’s assets, other than a
sale or transfer with a corporation where the Company owns at least 80% of the combined voting power of such corporation or its
parent after such transfer; or (v) any other event that the continuing directors determine to be a change in control; provided however,
with respect to (i), (iii) and (v) above, there shall be no change in control if shareholders of the Company own more than 50% of the
combined voting power of the voting securities of the Company or the surviving entity or any parent immediately following such
transaction in substantially the same proportion to each other as prior to such transaction.

Spin-off Protection Plan. We have adopted a Spin-off Protection Plan that provides a cash severance payment in the event a
participant’s employment is terminated due to an involuntary loss of job without Cause (as defined in the Spin-off Protection Plan) or
a Good Reason (as defined in the Spin-off Protection Plan) between December 1, 2013 and December 1, 2014, unless the termination
is substantially unrelated to the Spin-off. The cash severance payment would be equal to two and one-half times (for the CEO) or two
times (for other NEOs) (a) current base salary, and (b) current target annual incentive award. In addition, the participants will receive
a pro-rated portion of their target annual incentive award, based on actual Company and individual performance during the fiscal year
in which termination of employment occurred. Participants may receive that portion of their transition cash bonus award due to be
paid on December 1, 2014, in the discretion of the Compensation Committee. Participants in the EOSP or KMP who are not vested in
such plans will also receive a cash payment equal to the amount of the benefit to which they would have been entitled if they were
vested.

In addition, employees who terminate employment due to an involuntary loss of job without Cause (as defined in the award
agreement) or for Good Reason (as defined in the award agreement) between December 1, 2013 and December 1, 2014 will, unless
the termination is substantially unrelated to the Spin-off, (i) immediately vest in all unvested stock options and may exercise all vested
stock options at any time within the following three-year period or the remaining term of the stock option, if shorter, (ii) immediately
vest in all RSUs, except that retirement eligible participants would continue their existing vesting schedule, (iii) receive a prorated
payout of outstanding PSUs based on actual performance at the end of performance period following termination of employment, and
(iv) have the right to exercise all vested SARs at any time within the following three-year period or the remaining term of the SAR, if
shorter.

Enhanced Retirement Benefits. An officer is vested in EOSP or KMP upon the earlier of: (i) the attainment of age 55 and the
completion of 5 years of service; (ii) attainment of age 62 for the EOSP and age 65 for the KMP; (iii) death; or (iv) change in control.
For Mr. Shannon and Ms. Santoro, a termination within two years following a change in control also triggers the payment of an
enhanced benefit whereby two years would be added to both the officer’s age and service with the Company for purposes of the EOSP
benefit. There are no enhancements provided to Mr. Petratis under the EOSP or to Mr. Eckersley under the KMP. Benefits under the
EOSP and KMP are forfeited in the event of termination for cause. In order to be eligible for an EOSP or KMP benefit in the event of
disability, a participant must remain disabled until age 65. An officer becomes vested in both the Pension Plan and the Supplemental
Pension Plan upon the completion of 5 years of service. As of December 31, 2013, Mr. Shannon and Mr. Petratis were not vested in
the EOSP and Mr. Eckersley was not vested in the KMP. Mr. Yu does not participate in any company-sponsored pension plan.

Health Benefits. In the event of a change in control, health benefits are provided, which include our cost of both active health
and welfare benefits for the severance period, as well as retiree medical, if applicable. Ms. Santoro is the only NEO eligible for retiree
medical benefits due to her age and service as of January 1, 2003, when eligibility for the retiree medical benefit was frozen by
Ingersoll Rand. Ms. Santoro has reached the retirement threshold of age 55 with at least 15 years of service and would receive health
benefits in each scenario outlined in the following table.

Post-Employment Benefits Table

The following table describes the compensation to which each of the NEOs would be entitled in the event of termination of
such executive’s employment on December 31, 2013, including termination following a change in control. The potential payments
were determined under the terms of our plans and arrangements in effect on December 31, 2013. The table does not include the
pension benefits or nonqualified deferred compensation amounts that would be paid to an NEO, which are set forth in the Pension
Benefits table and the Nonqualified Deferred Compensation table above, except to the extent that the NEO is entitled to an
additional benefit as a result of the termination.

Involuntary
without
Cause
($)

Retirement
($)

Involuntary
with Cause
($)

Change in
Control
($)

Disability
($)

Death
($)

D. D. Petratis

Severance (a)

2013 Earned but Unpaid AIM Award(s) (b)

PSP Award Payout (c)

Value of Unvested Equity Awards (d)

Enhanced Retirement Benefits (e)

Outplacement (f)

Health Benefits (g)

Total

P. S. Shannon

Severance (a)

2013 Earned but Unpaid AIM Award(s) (b)

PSP Award Payout (c)

Value of Unvested Equity Awards (d)

Enhanced Retirement Benefits (e)

Outplacement (f)

Health Benefits (g)

Total

T. P. Eckersley

Severance (a)

2013 Earned but Unpaid AIM Award(s) (b)

PSP Award Payout (c)

Value of Unvested Equity Awards (d)

Enhanced Retirement Benefits (e)

Outplacement (f)

Health Benefits (g)

Total

—

3,780,000

800,000

687,950

—

687,950

1,905,085

—

25,000

18,796

—

7,216,831

2,593,035

1,445,000

355,749

324,885

742,810

765,095

25,000

18,796

—

324,885

742,810

—

324,885

742,810

—

3,677,335

1,067,695

1,308,182

382,228

312,512

—

312,512

1,493,812

—

25,000

18,796

—

3,540,530

1,806,324

—

4,725,000

800,000

—

1,869,193

86,457

—

7,480,650

1,520,000

355,749

—

725,861

1,426,406

—

4,028,016

1,508,182

382,228

—

1,477,508

642,016

—

4,009,934

Involuntary
without
Cause
($)

Retirement
($)

Involuntary
with Cause
($)

Change in
Control
($)

Disability
($)

Death
($)

B. A. Santoro

Severance (a)

2013 Earned but Unpaid AIM Award(s) (b)

PSP Award Payout (c)

—

1,230,000

234,862

—

Value of Unvested Equity Awards (d)

494,903

Enhanced Retirement Benefits (e)

Outplacement (f)

Health Benefits (g)

Total

F. W. Yu

Severance (a)

2013 Earned but Unpaid AIM Award(s) (b)

PSP Award Payout (c)

Value of Unvested Equity Awards (d)

Enhanced Retirement Benefits (e)

Outplacement (f)

Health Benefits (g)

Total

____________

—

85,000

579,903

—

85,000

2,044,765

85,000

1,183,890

231,029

40,169

1,213,484

—

2,668,572

—

1,155,000

234,862

267,526

508,862

954,322

25,000

70,806

3,216,378

1,033,890

231,029

340,528

—

267,526

508,862

—

85,000

861,388

—

267,526

508,862

—

35,000

811,388

—

340,528

1,227,228

—

25,000

30,000

—

2,887,675

1,567,756

(a) For the “Involuntary without Cause” column, the amounts are calculated in accordance with the Spin-off Protection Plan. For
the amounts shown under the “Change in Control” columns, refer to the description of how severance is calculated in the
section above, entitled Post-Employment Benefits.

(b) For the “Involuntary without Cause” column, the amounts are calculated in accordance with the Spin-off Protection Plan. For
the amounts under “Change in Control”, these amounts represent the actual award earned for the 2013 performance period,
which may be more or less than the target award.

(c) For the “Change in Control,” these amounts represent the value of the Founder’s Grant PSU award payout. For Mr. Yu, it
also includes the pro-rata portion of his other outstanding PSUs. Amounts for each column are based on the closing stock
price of the ordinary shares on December 31, 2013 ($44.19).

(d) The amounts shown for “Retirement”, “Involuntary without Cause”, “Change in Control”, “Disability” and “Death” represent
(i) the value of the unvested RSUs, which is calculated based on the number of unvested RSUs multiplied by the closing
stock price of the ordinary shares on December 31, 2013 ($44.19), and (ii) the intrinsic value of the unvested stock options,
which is calculated based on the difference between the closing stock price of the ordinary shares on December 31, 2013
($44.19) and the relevant exercise price. However, only in the event of termination following a “Change in Control” is there
accelerated vesting of unvested awards. For “Retirement”, “Involuntary without Cause”, “Disability” and “Death”, the
awards do not accelerate but continue to vest on the same basis as active employees. Because Ms. Santoro is retirement
eligible, she would continue to vest in stock options and RSUs after termination of employment for any reason other than
cause.

(e) In the event of a change in control of the Company and a termination of the NEOs, the present value of the pension benefits

under the EOSP, KMP and Supplemental Pension Plans would be paid out as lump sums. While there is no additional benefit
to the NEOs as a result of either voluntary retirement/resignation and/or involuntary resignation without cause, there are
differences (based on the methodology mandated by the SEC) between the numbers that are shown in the Pension Benefits
Table and those that would actually be payable to the NEO under these termination scenarios. The amounts shown under
change of control represent the estimated benefit provided in excess of the EOSP amount shown in the Pension Benefits
Table.

(f) For the “Change in Control” column, the amount represents the maximum expenses we would reimburse the NEO for

professional outplacement services.

(g) Represents our cost of health coverage. The cost for “Change in Control” is a combination of continued active coverage for
eighteen months followed by retiree coverage, while the cost shown under the other scenarios is retiree coverage only.

Why Did I Receive This Proxy Statement?

INFORMATION CONCERNING VOTING AND SOLICITATION

We sent you this Proxy Statement or a Notice of Internet Availability of Proxy Materials (”Notice”) because our Board
of Directors is soliciting your proxy to vote at the Annual General Meeting. This Proxy Statement summarizes the information
you need to know to vote on an informed basis.

Why Are There Two Sets Of Financial Statements Covering The Same Fiscal Period?

U.S. securities laws require us to send you our 2013 Form 10-K, which includes our financial statements prepared in

accordance with U.S. GAAP. These financial statements are included in the mailing of this Proxy Statement. Irish law also
requires us to provide you with our Irish Statutory Accounts for our 2013 fiscal year, including the reports of our Directors and
auditors thereon, which accounts have been prepared in accordance with Irish law. The Irish Statutory Accounts are available
on our website at www.allegion.com/irishstatutoryaccounts and will be laid before the Annual General Meeting.

How Do I Attend The Annual General Meeting?

All shareholders are invited to attend the Annual General Meeting. In order to be admitted, you must present a

form of personal identification and evidence of share ownership.

If you are a shareholder of record, evidence of share ownership will be either (1) an admission ticket, which is
attached to the proxy card and must be separated from the proxy card and kept for presentation at the meeting if you vote your
proxy by mail, or (2) a Notice.

If you own your shares through a bank, broker or other holder of record (“street name holders”), evidence of share

ownership will be either (1) your most recent bank or brokerage account statement, or (2) a Notice. If you would rather have an
admission ticket, you can obtain one in advance by mailing a written request, along with proof of your ownership of our
ordinary shares, to:

Secretary
Allegion plc
Block D
Iveagh Court
Harcourt Road
Dublin 2
Ireland

No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted at the

Annual General Meeting.

Who May Vote?

You are entitled to vote if you beneficially owned our ordinary shares at the close of business on April 14, 2014, the
Record Date. At that time, there were 96,527,154 of our ordinary shares outstanding and entitled to vote. Each ordinary share
that you own entitles you to one vote on all matters to be voted on a poll at the Annual General Meeting.

How Do I Vote?

Shareholders of record can cast their votes by proxy by:

•

using the Internet and voting at www.proxyvote.com;

calling 1-800-690-6903 and following the telephone prompts; or

completing, signing and returning a proxy card by mail. If you received a Notice and did not receive a proxy
card, you may request one at sendmaterial@proxyvote.com.

The Notice is not a proxy card and it cannot be used to vote your shares.

Shareholders of record may also vote their shares directly by attending the Annual General Meeting and casting their

vote in person or appointing a proxy (who does not have to be a shareholder) to attend the Annual General Meeting and casting
votes on their behalf in accordance with their instructions.

Street name holders must vote their shares in the manner prescribed by their bank, brokerage firm or nominee. Street
name holders who wish to vote in person at the Annual General Meeting must obtain a legal proxy from their bank, brokerage
firm or nominee. Street name holders will need to bring the legal proxy with them to the Annual General Meeting and hand it in

with a signed ballot that is available upon request at the meeting. Street name holders will not be able to vote their shares at the
Annual General Meeting without a legal proxy and a signed ballot.

Even if you plan to attend the Annual General Meeting, we recommend that you vote by proxy as described above so

that your vote will be counted if you later decide not to attend the meeting.

In order to be timely processed, your vote must be received by 5:00 p.m. Eastern Time on June 10, 2014 (or, if

you are a street name holder, such earlier time as your bank, brokerage firm or nominee may require).

How May Employees Vote Under Our Employee Plans?

If you participate in the ESP or the Schlage Lock Company LLC Employee Savings Plan for Bargained Employees,

then you may be receiving these materials because of shares held for you in those plans. In that case, you may use the enclosed
proxy card to instruct the plan trustees of those plans how to vote your shares, or give those instructions by telephone or over
the Internet. They will vote these shares in accordance with your instructions and the terms of the plan.

To allow plan administrators to properly process your vote, your voting instructions must be received by 11:59
p.m. on June 6, 2014. If you do not provide voting instructions for shares held for you in any of these plans, the plan trustees
will vote these shares in the same ratio as the shares for which voting instructions are provided.

May I Revoke My Proxy?

You may revoke your proxy at any time before it is voted at the Annual General Meeting in any of the following

ways:

•

by notifying the Company’s Secretary in writing: c/o Allegion plc, Block D, Iveagh Court, Harcourt Road,
Dublin 2, Ireland;

by submitting another properly signed proxy card with a later date or another Internet or telephone proxy at a
later date but prior to the close of voting described above; or

by voting in person at the Annual General Meeting.

Merely attending the Annual General Meeting does not revoke your proxy. To revoke a proxy, you must take one of

the actions described above.

How Will My Proxy Get Voted?

If your proxy is properly submitted, your proxy holder (one of the individuals named on the proxy card) will vote your

shares as you have directed. If you are a street name holder, the rules of the NYSE permit your bank, brokerage firm or
nominee to vote your shares on Item 4 (routine matter) if it does not receive instructions from you. However, your bank,
brokerage firm or nominee may not vote your shares on Items 1, 2 or 3 (non-routine matters) if it does not receive instructions
from you (“broker non-votes”). Broker non-votes will not be counted as votes for or against the non-routine matters, but rather
will be regarded as votes withheld and will not be counted in the calculation of votes for or against the resolution.

If you are a shareholder of record and you do not specify on the proxy card you send to the Company (or when

giving your proxy over the Internet or telephone) how you want to vote your shares, then the Company-designated
proxy holders will vote your shares in the manner recommended by our Board of Directors on all matters presented in
this Proxy Statement and as the proxy holders may determine in their discretion regarding any other matters properly
presented for a vote at the meeting.

What Constitutes A Quorum?

The presence (in person or by proxy) of shareholders entitled to exercise a majority of the voting power of the
Company on the Record Date is necessary to constitute a quorum for the conduct of business. Abstentions and broker non-votes
are treated as “shares present” for the purposes of determining whether a quorum exists.

What Vote Is Required To Approve Each Proposal?

A majority of the votes cast at the Annual General Meeting is required to approve each of Items 1, 2 and 4. A majority

of the votes cast means that the number of votes cast “for” an Item must exceed the number of votes cast “against” that Item.
The affirmative vote of a plurality of the Company’s ordinary shares represented and voting at the Annual General Meeting is
required to approve Item 3.

Although abstentions and broker non-votes are counted as “shares present” at the Annual General Meeting for the

purpose of determining whether a quorum exists, they are not counted as votes cast either “for” or “against” the resolution and,
accordingly, will not affect the outcome of the vote.

Who Pays The Expenses Of This Proxy Statement?

We have hired Georgeson Inc. to assist in the distribution of proxy materials and the solicitation of proxies for a fee

estimated at $14,000, plus out-of-pocket expenses. Proxies will be solicited on behalf of our Board of Directors by mail, in
person, by telephone and through the Internet. We will bear the cost of soliciting proxies. We will also reimburse brokers and
other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy materials to the
persons for whom they hold shares.

How Will Voting On Any Other Matter Be Conducted?

Although we do not know of any matters to be presented or acted upon at the Annual General Meeting other than the

items described in this Proxy Statement, if any other matter is proposed and properly presented at the Annual General Meeting,
the proxy holders will vote on such matters in accordance with their best judgment.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth as of the Record Date, the beneficial ownership of our ordinary shares by (i) each

director and director nominee of the Company, (ii) each executive officer of the Company named in the Summary
Compensation Table below, and (iii) all directors and executive officers of the Company as a group:

Name
M. J. Chesser
C. Cico
K. S. Hachigian
D. I. Schaffer
M. E. Welch
D. D. Petratis
P. S. Shannon
T. P. Eckersley
B. A. Santoro
F. W. Yu
All directors and executive officers as a group (14 persons)(d)

____________

Ordinary Shares(a)
—
—
—
—
—
19,230
3,924
12,185
4,831
1,836
50,393

Notional Shares(b)
—
—
—
—
—
—
20,786
6,383
—
—
27,169

Options
Exercisable or
RSUs Vesting
Within 60 Days (c)
—
—
—
—
—
—
17,548
16,045
19,650
11,302
77,246

(a) Represents (i) ordinary shares held directly; and (ii) ordinary shares held by the trustee under the ESP for the benefit of

executive officers.

(b) Represents ordinary shares and ordinary share equivalents notionally held under the EDCP that are not distributable within

60 days of the Record Date.

(c) Represents ordinary shares as to which directors and executive officers had stock options or SARs exercisable or RSUs

that vest within 60 days of the Record Date, under the 2013 Plan.

(d) The Company’s ordinary shares beneficially owned by all directors and executive officers individually and as a group
(including shares issuable under exercisable options or vesting RSUs) aggregated less than 1% of the total outstanding
ordinary shares. Ordinary shares and ordinary share equivalents notionally held under the EDCP are not counted as
outstanding shares in calculating these percentages because they are not beneficially owned; the directors and executive
officers have no voting or investment power with respect to these shares or share equivalents.

The following table sets forth each shareholder which is known by us to be the beneficial owner of more than 5% of the

outstanding ordinary shares of the Company based solely on the information filed by such shareholder on Schedule 13D or
filed by such shareholder in 2014 for the year ended December 31, 2013 on Schedule 13G under the Securities Exchange Act
of 1934:

Name and Address of Beneficial Owner
Vanguard Group
100 Vanguard Blvd
Malvern, PA 19355
Trian Fund Management, L.P.
280 Park Avenue, 41st Floor
New York, New York 10017
State Street Corporation
One Lincoln Street
Boston, Massachusetts 02111

____________

Amount and Nature of
Beneficial Ownership
6,107,616 (b)

Percent
of Class(a)
6.33%

5,740,805 (c)

5.95%

4,856,717 (d)

5.03%

(a) The ownership percentages set forth in this column are based on the Company’s outstanding ordinary shares on the Record
Date and assumes that each of the beneficial owners continued to own the number of shares reflected in the table above on
such date.

(b) Information regarding the Vanguard and its stockholdings was obtained from a Schedule 13G filed with the SEC on

February 10, 2014. The filing indicated that, as of December 31, 2013, Vanguard had sole voting power as to 157,394
shares, sole dispositive power as to 5,968,327 shares, and shared dispositive power as to 139,289 of such shares.

(c) Information regarding Trian and its stockholdings was obtained from the Schedule 13G (Amendment No. 1) filed with the
SEC on February 14, 2014. According to the Schedule 13G (Amendment No. 1), Trian Fund Management, L.P. shares
voting and dispositive power over all or some of the shares with Trian Partners, L.P., Trian Partners Master Fund, L.P.,
Trian Partners Parallel Fund I, L.P., Trian Partners Strategic Investment Fund, L.P., Trian Partners Strategic Investment
Fund-A, L.P., Trian Partners Strategic Co-Investment Fund-A, L.P., Trian Partners Master Fund (ERISA), L.P., Trian Fund
Management GP, LLC, Trian SPV (SUB) VI, L.P., Trian SPV (SUB) VI-A, L.P., Trian IR Holdco Ltd., Nelson Peltz, Peter
W. May and Edward P. Garden.

(d) Information regarding State Street Corporation and its stockholdings was obtained from a Schedule 13G filed with the
SEC on February 3, 2014. The filing indicated that, as of December 31, 2013, State Street had shared voting power and
shared dispositive power as to all of such shares.

Equity Compensation Plan Information

The following table provides information as of December 31, 2013, with respect to our ordinary shares that may be

issued under equity compensation plans:

Plan Category
Equity compensation plans approved by security holders (1)
Equity compensation plans not approved by security holders (2)
Total

____________

Number of Securities to
be Issued upon
Exercise of Outstanding
Options, Warrants and
Rights

Weighted-
Average
Exercise Price of
Outstanding
Options,
Warrants and
Rights

Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding
Securities Reflected in
First Column)

3,019,608
79,580
3,099,188

25.11
—
25.11

4,980,392
—
4,980,392

(1) Represents the 2013 Plan. The weighted average exercise price includes stock options and stock appreciation rights

outstanding under the 2013 Plan.

(2) Represents the EDCP. Plan participants acquire our shares under the EDCP as a result of the deferral of salary, annual

incentive awards and PSUs.

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

The Company does not generally engage in transactions in which its executive officers, directors or nominees for

directors, any of their immediate family members or any of its 5% shareholders have a material interest. Pursuant to the
Company’s written related person transaction policy, any such transaction must be reported to management, which will prepare
a summary of the transaction and refer it to the Corporate Governance and Nominating Committee for consideration and
approval by the disinterested directors. The Corporate Governance and Nominating Committee reviews the material terms of
the related person transaction, including the dollar values involved, the relationships and interests of the parties to the
transaction and the impact, if any, to a director’s independence. The Corporate Governance and Nominating Committee only
approves those transactions that are in the best interest of the Company. In addition, the Company’s Code of Conduct, which
sets forth standards applicable to all employees, officers and directors of the Company, generally proscribes transactions that
could result in a conflict of interest for the Company. Any waiver of the Code of Conduct for any executive officer or director
requires the approval of the Company’s Board of Directors. Any such waiver will, to the extent required by law or the NYSE,
be disclosed on the Company’s website at www.allegion.com or on a current report on Form 8-K. No such waivers were
requested or granted in 2013.

We have not made payments to directors other than the fees to which they are entitled as directors (described under the

heading “Compensation of Directors”) and the reimbursement of expenses related to their services as directors. We have made
no loans to any director or officer nor have we purchased any shares of the Company from any director or officer.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and officers, and persons

who beneficially own more than ten percent of the Company’s ordinary shares, to file reports of ownership and reports of
changes in ownership with the SEC and the NYSE. To the Company’s knowledge, based solely on its review of such forms
received by the Company and written representations that no other reports were required.

SHAREHOLDER PROPOSALS AND NOMINATIONS

Any proposal by a shareholder intended to be presented at the 2015 Annual General Meeting of Shareholders of the

Company must be received by the Company at its registered office at Block D, Iveagh Court, Harcourt Road, Dublin 2, Ireland,
Attn: Secretary, no later than December 26, 2014, for inclusion in the proxy materials relating to that meeting. Any such
proposal must meet the requirements set forth in the rules and regulations of the SEC, including Rule 14a-8, in order for such
proposals to be eligible for inclusion in our 2015 proxy statement.

Our Articles of Association set forth procedures to be followed by shareholders who wish to nominate candidates for

election to the Board of Directors in connection with annual general meetings of shareholders or pursuant to written
shareholder consents or who wish to bring other business before a shareholders’ general meeting. All such nominations must be
accompanied by certain background and other information specified in the Articles of Association. In connection with the 2015
annual general meeting, written notice of a shareholder’s intention to make such nominations or bring business before the
annual general meeting must be given to the Secretary of the Company not later than March 13, 2015. If the date of the 2015
annual general meeting occurs more than 30 days before, or 60 days after, the anniversary of the 2014 annual general meeting,
then the written notice must be provided to the Secretary of the Company not later than the seventh day after the date on which
notice of such annual general meeting is given.

The Corporate Governance and Nominating Committee will consider all shareholder recommendations for candidates

for Board membership, which should be sent to the Committee, care of the Secretary of the Company, at the address set forth
above. In addition to considering candidates recommended by shareholders, the Committee considers potential candidates
recommended by current directors, Company officers, employees and others. As stated in our Corporate Governance
Guidelines, all candidates for Board membership are selected based upon their judgment, character, achievements and
experience in matters affecting business and industry. Candidates recommended by shareholders are evaluated in the same
manner as director candidates identified by any other means.

In order for you to bring other business before a shareholder general meeting, timely notice must be received by the
Secretary of the Company within the time limits described above. The notice must include a description of the proposed item,
the reasons you believe support your position concerning the item, and other specified matters. These requirements are separate
from and in addition to the requirements you must meet to have a proposal included in our Proxy Statement. The foregoing
time limits also apply in determining whether notice is timely for purposes of rules adopted by the SEC relating to the exercise
of discretionary voting authority.

If a shareholder wishes to communicate with the Board of Directors for any other reason, all such communications

should be sent in writing, care of the Secretary of the Company, or by email at allegionboard@allegion.com.

HOUSEHOLDING

SEC rules permit a single set of annual reports and proxy statements to be sent to any household at which two or more

shareholders reside if they appear to be members of the same family. Each shareholder continues to receive a separate proxy
card. This procedure is referred to as householding. While the Company does not household in mailings to its shareholders of
record, a number of brokerage firms with account holders who are Company shareholders have instituted householding. In
these cases, a single proxy statement and annual report will be delivered to multiple shareholders sharing an address unless
contrary instructions have been received from the affected shareholders. Once a shareholder has received notice from his or her
broker that the broker will be householding communications to the shareholder’s address, householding will continue until the
shareholder is notified otherwise or until the shareholder revokes his or her consent. If at any time a shareholder no longer
wishes to participate in householding and would prefer to receive a separate proxy statement and annual report, he or she
should notify his or her broker. Any shareholder can receive a copy of the Company’s proxy statement and annual report by
contacting the Company at its registered office at Block D, Iveagh Court, Harcourt Road, Dublin 2, Ireland, Attention:
Secretary or by accessing it on the Company’s website at www.allegion.com.

Shareholders who hold their shares through a broker or other nominee who currently receive multiple copies of the

proxy statement and annual report at their address and would like to request householding of their communications should
contact their broker.

Dated: April 25, 2014

Directions to the Annual General Meeting

Appendix A

Directions from Dublin Airport to Druids Glen Resort (45 minutes)

• Take the M1 then follow M50 Southbound.
• Continue to the end of the M50 motorway and follow the signs for M11/N11 (Wexford/South East).
• M11 continues onto the N11 through Kilmacanogue Village, onwards through Glen O’ The Downs.
• Take a left turn at Exit 12 signposted for Newtownmountkennedy, take the next left off the roundabout

(signposted Druids Glen Resort) reaching a T Junction.

• Take a right at the T junction and another right at the next T junction.
• Take the next left and follow the signs to Druid Glens Resort.

A- 1