SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
(Check the appropriate box:)
[ ]Preliminary proxy statement
[X]Definitive proxy statement
[ ]Definitive additional materials
[ ]Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
AMP Incorporated
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- ----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X]$125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ]$500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ]Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
---------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
---------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the
date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE>
NOTICE OF
ANNUAL MEETING
AND
PROXY STATEMENT
___________
ANNUAL MEETING
OF
SHAREHOLDERS
April 27, 1994
__________
AMP
AMP Incorporated
Harrisburg, Pennsylvania
<PAGE>
AMP Incorporated
Harrisburg, PA 17105-3608
AMP
Executive Offices
March 25, 1994
Dear Shareholder:
You are invited to attend the AMP Incorporated 1994 Annual Meeting of
Shareholders. This year we will again hold the Annual Meeting in the Sheraton
Inn Harrisburg, Parlours B, C, D and E, 800 E. Park Drive, Harrisburg,
Pennsylvania, on Wednesday, April 27, 1994, beginning at 10:30 A.M., local
time.
If you plan to attend the Annual Meeting, please fill out and return the
enclosed reservation form so that an admission card may be sent to you. It is
important to us that you return the reservation form at your earliest
convenience so that we can reasonably estimate the number of shareholders
attending. Only shareholders bearing an admission card will be permitted
admittance to the Annual Meeting.
Also, it is of special significance this year that your shares be
represented at the Annual Meeting. In addition to the election of directors
and other matters that may properly be brought before the Annual Meeting, the
shareholders will be asked to vote on the AMP Incorporated Stock Option Plan
for Outside Directors and two Shareholder Proposals. Please carefully read
the descriptions included in the Proxy Statement before completing, signing
and returning the accompanying proxy in the postage paid envelope provided for
that purpose.
Thank you for your prompt attention to these important matters.
Very truly yours,
JAMES E. MARLEY
Chairman of the Board
<PAGE>
AMP Incorporated
P.O. Box 3608
Harrisburg, Pennsylvania 17105-3608
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 27, 1994
To the Shareholders of
AMP Incorporated:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of AMP
Incorporated will be held at the Sheraton Inn Harrisburg, Parlours B, C, D and
E, 800 E. Park Drive, Harrisburg, Pennsylvania, on Wednesday, April 27, 1994,
at 10:30 A.M., local time, for the purpose of considering and acting upon the
following:
1. The election of a Board of Directors, thirteen in number, to serve
until the next Annual Meeting of Shareholders and until their
respective successors are elected and qualified.
2. A proposal to approve the AMP Incorporated Stock Option Plan for
Outside Directors.
3. A shareholder proposal relating to minority and gender inclusiveness
in senior management and on the Board of Directors.
4. A shareholder proposal requesting an equal employment
opportunity/affirmative action report.
5. Such other matters that may properly come before the meeting and any
adjournments thereof.
The Board of Directors has fixed the close of business on March 11, 1994
as the record date for the determination of shareholders entitled to notice of
and to vote at said meeting and any adjournments thereof.
By order of the Board of Directors
D. F. Henschel
Corporate Secretary
Dated: March 25, 1994.
<PAGE>
AMP INCORPORATED
Proxy Statement
________________
VOTING
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of AMP Incorporated (the "Corporation").
Such proxies will be voted at the Annual Meeting of Shareholders of the
Corporation to be held on Wednesday, April 27, 1994, and any adjournments or
postponements thereof, at the time and place and for the purposes set forth in
the accompanying Notice of Meeting dated March 25, 1994. The address of the
Corporation's principal executive offices is P.O. Box 3608, Harrisburg,
Pennsylvania 17105-3608. The approximate date on which this Proxy Statement
and the enclosed form of proxy are first sent or given to shareholders is
March 25, 1994. Shareholders of record at the close of business on March 11,
1994 are entitled to notice of and to vote at said meeting and any
adjournments or postponements thereof, each share being entitled to one vote.
On March 11,1994 the Corporation had outstanding 104,926,021 shares of
Common Stock, no par value, which constitutes the only class of voting
securities of the Corporation (excluding shares held in the treasury of the
Corporation, all of which are issued but not outstanding and are not entitled
to vote). A majority of the shares entitled to vote and either present in
person or represented by proxy will constitute a quorum for the transaction of
business at the Annual Meeting.
Under Pennsylvania law and the Corporation's Articles of Incorporation
and Bylaws, each nominee for election as a director shall be elected if he or
she receives the affirmative vote of a majority of the votes cast by
shareholders entitled to vote and either present in person or represented by
proxy at the Annual Meeting. Similarly each shareholder proposal will be
authorized by the shareholders if it receives the affirmative vote "for" such
proposal by a majority of the votes cast by shareholders entitled to vote and
either present in person or represented by proxy at the Annual Meeting. With
respect to the election of directors, votes may be cast in favor of or
withheld from the nominees. Shareholders are not entitled to cumulative
voting in the election of directors. Abstentions, votes that are withheld
from director nominees and broker non-votes (i.e., the inability of a broker
or other nominee holding shares for a beneficial owner to vote on behalf of
such beneficial owner on a particular non-routine matter because such broker
or nominee is not permitted, without receiving instructions from the
beneficial owner, to vote such owner's shares on that matter, notwithstanding
that the broker or nominee has discretionary authority on another routine,
non-controversial matter and has voted on such matter on behalf of the
beneficial owner) will be counted in determining whether a quorum has been
reached but will be excluded entirely from the vote and will have no effect
thereon.
On the other hand, the Corporation's proposal to adopt the Stock Option
Plan for Outside Directors (the "Option Plan Proposal") will be approved by
the shareholders if it receives the affirmative vote "for" such proposal by a
majority of the shareholders entitled to vote and either present in person or
represented by proxy. Abstentions not only are counted in determining whether
a quorum is present but also are counted in determining the total number of
shares present in person or represented by proxy and entitled to vote. While
not counted as votes for or against the Option Plan Proposal, abstentions have
the same effect as votes against the proposal. Broker non-votes continue to
be counted only for purposes of determining whether a quorum is present at the
Annual Meeting.
Any proxy given pursuant to this solicitation may be revoked in writing
by the person giving it at any time before it is exercised. Under the laws of
Pennsylvania, attendance at the Annual
1
<PAGE>
Meeting by a shareholder who has given a proxy does not have the effect of
revoking such proxy unless the shareholder files at any time prior to the
voting of the proxy a written notice of revocation with the Corporate
Secretary at the Corporation's principal executive offices set forth above or
at the Annual Meeting, including but not limited to the timely filing of a
duly executed proxy bearing a later date or the voting of the shares subject
to this proxy by written ballot cast at the Annual Meeting. All shares
represented by valid proxies received by the Board of Directors pursuant to
this solicitation in time to be voted and not revoked will be voted. If the
proxy indicates a choice with respect to any matter to be acted upon, the
shares will be voted in accordance with the direction made therein. Except
as set forth above with respect to brokers, if no direction is made, the shares
will be voted as to each proposal in accordance with the recommendations of
your Board of Directors. The proxy of a shareholder who is a participant in
the Corporation's Dividend Reinvestment Plan will also serve as an instruction
to the agent of that Plan to vote the shares held for the account of the
participant in the same way as the shares represented by such proxy are
voted. If a shareholder's proxy is not received, the shares held for his or
her account in the Dividend Reinvestment Plan will not be voted. If a
shareholder is a participant in the Corporation's Employee Savings and Thrift
Plan, these participants will receive a separate Voting Instruction card
covering these shares. Voting Instruction cards must be returned or the shares
will be voted by the Trustee in its sole and absolute discretion.
Item 1:
ELECTION OF DIRECTORS
A Board of Directors, thirteen in number, is to be elected at the meeting
to serve until the next Annual Meeting of Shareholders and until their
respective successors are elected and qualified. Unless otherwise instructed
by the shareholder, it is the intention of the persons named in the proxy (the
"Proxy Committee") to vote such proxy for the election of the persons named in
the following list, each of whom is now a member of the Board of Directors.
The following information is supplied as to each person nominated for
election as a director. The information includes beneficial ownership of the
outstanding Common Stock of the Corporation as of March 11, 1994 by each such
person. Unless otherwise indicated, each Nominee for director possesses sole
voting and dispositive power (beneficial ownership) with respect to the shares
set forth opposite his or her name and there are no shares that any Nominee
has the right to acquire as beneficial owner within 60 days after March 11,
1994.
<TABLE>
<CAPTION>
Nominee, Age and
Year First Principal Occupation and Shares of
Elected Director Business Experience Common Stock<F5>
- ---------------- ------------------------ ----------------
<S> <C> <C>
Retired Chairman of the Board and Chief Executive 1,000
Officer of Air Products and Chemicals, Inc.,
Allentown, Pennsylvania, a supplier of industrial
gases, chemicals, and related equipment and technology.
Mr. Baker has served as a director of Air Products and
[reference Chemicals, Inc. for more than the past five years and
Appendix] he is a former chief executive officer of that company,
having served in that capacity for more than five years.
Dexter F. Baker
Age 66
1990<F3><F4>
2
Nominee, Age and
Year First Principal Occupation and Shares of
Elected Director Business Experience Common Stock<F5>
- ---------------- ------------------------ ----------------
Retired Chairman of the Board of Harsco Corporation, 3,500
Harrisburg, Pennsylvania, a manufacturer of industrial
and defense products. Mr. Burdge has served as a
director of Harsco Corporation for more than the past
five years and he is a former chief executive officer
of that company, having served in that capacity for
[reference more than five years. He also serves as a director
Appendix] of Dauphin Deposit Corporation and Pennsylvania Power
& Light Company.
Jeffrey J. Burdge
Age 71
1979<F2>
Retired director and retired Chairman of the Board 3,500
and Chief Executive Officer of Hershey Foods
Corporation, Hershey, Pennsylvania, a diversified
[reference candy and food company. Mr. Dearden served as an
Appendix] officer and director of Hershey Foods Corporation for
more than five years.
William E. Dearden
Age 71
1982<F3>
President of Harbor Point Associates, Inc., New York, 1,000
[reference New York, a private investment and consulting firm.
Appendix] He also serves as a director of Harris Corporation,
Federal Express Corporation, and NIKE, Inc.
Ralph D. DeNunzio
Age 62
1977<F3><F4>
An internationally recognized businesswoman and public 300
servant, with offices in Washington, D.C., she was most
recently the U.S. Secretary of Commerce in the Bush
Administration. Previously, she was President and CEO
of Franklin Associates, a consulting firm that provided
strategic counsel to major U.S. corporations. Ms.
Franklin has been a director of the American Institute
of Certified Public Accountants, chaired AICPA's audit
committee, and received the John J. McCloy Award from
[reference the Public Oversight Board for excellence in auditing.
Appendix] She also serves as a director of Aetna Life & Casualty
and The Dow Chemical Company.
Barbara Hackman Franklin
Age 54
1993<F2>
3
Nominee, Age and
Year First Principal Occupation and Shares of
Elected Director Business Experience Common Stock<F5>
- ---------------- ------------------------ ----------------
Chairman of the Board of Hixon Properties 796,925<F6>
Incorporated, San Antonio, Texas, maintaining real
[reference estate holdings and other investments. Mr. Hixon
Appendix] has served as a director of Hixon Properties
Incorporated for more than the past five years.
Joseph M. Hixon III
Age 55
1988<F2><F4>
Chief Executive Officer and President of the 12,675<F9>
[reference Corporation. Mr. Hudson has served as an officer
Appendix] of the Corporation for more than the past five
years. He also serves as a director of Carpenter
Technology Corporation.
William J. Hudson, Jr.
Age 59
1992<F1>
Chairman of the Board of Directors of the 14,614<F7><F9>
Corporation. Mr. Marley has served as an officer
of the Corporation for more than the past five years.
[reference He also serves as a director of Armstrong World
Appendix] Industries, Inc., Dauphin Deposit Corporation, and
Harsco Corporation.
James E. Marley
Age 58
1986<F1>
Retired Chairman of the Board of Directors and Chief 23,541
Executive Officer of the Corporation. Mr. McInnes
[reference served as an officer of the Corporation for more than
Appendix] five years. He also serves as a director of PPG
Industries, Inc.
Harold A. McInnes
Age 66
1981<F1><F4>
4
Nominee, Age and
Year First Principal Occupation and Shares of
Elected Director Business Experience Common Stock<F5>
- ---------------- ------------------------ ----------------
President, Chief Executive Officer and a director 700
of Reliance Electric Company, Cleveland, Ohio, a
manufacturer of electrical, mechanical power
transmission, and telecommunications equipment.
Mr. Morley has served as an officer and director
[reference of Reliance Electric Company for more than the past
Appendix] five years. He also serves as a director of Society
Corporation and Ferro Corporation.
John C. Morley
Age 62
1991<F2>
Retired Chairman of the Board of Directors and Chief 26,683<F8>
Executive Officer of the Corporation. Mr. Raab served
as an officer of the Corporation for more than five
[reference years. He also serves as a director of The West Company,
Appendix] Dauphin Deposit Corporation, Air Products and Chemicals,
Inc., and Harris Corporation.
Walter F. Raab
Age 69
1975<F1><F4>
Executive Vice President and Chief Financial Officer 13,235
[reference of the Corporation. Mr. Savidge has served as an
Appendix] officer of the Corporation for more than the past five
years.
Benjamin Savidge
Age 64
1990<F1>
Retired President and Chief Executive Officer of Parker 700
Hannifin Corporation, Cleveland, Ohio, an international
manufacturer of hydraulic, pneumatic and electromechanical
components. Mr. Schloemer has served as a director of
Parker Hannifin Corporation for more than the past five
years and he is a former president and chief executive
[reference officer of that company, having served in that capacity
Appendix] for more than five years. He also serves as a director
of Esterline Technologies Corporation and Rubbermaid Inc.
Paul G. Schloemer
Age 65
1991<F3>
5
_________
<FN>
<F1> Member of the Executive Committee of the Board.
<F2> Member of the Audit Committee of the Board.
<F3> Member of the Compensation and Management Development Committee of the
Board.
<F4> Member of the Nominating Committee of the Board.
<F5> Each director owns less than 1% of the Corporation's outstanding Common
Stock.
<F6> Mr. Hixon has a 2% residual beneficial interest but no voting or
dispositive powers in a trust that holds 3,696 shares of Common Stock of
the Corporation.
<F7> In addition, 96.6 shares of Common Stock of the Corporation are owned by
a member of the immediate family of the Nominee; Mr. Marley disclaims
beneficial ownership of such stock. Additionally, 225 shares of Common
Stock of the Corporation are owned by a member of the immediate family of
Mr. Marley in a custodial account over which the Nominee has voting and
dispositive powers; Mr. Marley disclaims beneficial ownership of such
stock.
<F8> In addition, 5,000 shares of Common Stock of the Corporation are owned by
a member of the immediate family of Mr. Raab; Mr. Raab disclaims
beneficial ownership of such stock.
<F9> A portion of the shares reported for Messrs. Hudson and Marley are held
in the Corporation's Employee Savings and Thrift Plan. Through further
contributions to this plan, each may acquire an undeterminable number of
additional shares within 60 days after March 11, 1994.
</TABLE>
Although the Board of Directors does not contemplate that any of the
Nominees for director will be unable to serve, in the event a vacancy in the
original slate of nominees is occasioned by death or other unexpected
occurrence, (a) shares of stock represented by the proxies shall be voted for
the election of such other nominee as may be designated by the Board of
Directors, or (b) prior to the meeting, the Board of Directors will amend the
Corporation's Bylaws in order to eliminate that office of director for which
such nominee is unable to accept election, or (c) in the event that neither
(a) nor (b) occurs, the Proxy Committee shall nominate other persons in their
discretion and vote the proxies for the election of such persons as directors.
THE BOARD OF DIRECTORS
Compensation
During 1993 a director who was not an employee of the Corporation was
paid $24,000 per year for services as a director and also $1,000 for each day
in attendance at a meeting of the Board. Additionally, a director was paid
$800 for attendance at each meeting of any committee of the Board on which he
or she served, except the chairman of any such committee who was paid $1,000
for any meeting attended. Effective January 1, 1994 these fees were changed
and a non-employee director now receives $26,000 per year for services as a
director and $1,000 for each day in attendance at a meeting of the Board. A
director is also paid $1,000 for attendance at each meeting of a committee of
the Board on which he or she serves, and the chairman of the committee
receives an additional $250 for each such meeting. In addition, a
non-employee director may be paid an amount equivalent to the then-current
committee meeting fee for special services or assignments requested by either
the Chairman of the Board or the CEO and President of the Corporation. A
director who is also an employee of the Corporation does not receive any
director or committee fees. During 1993 the Board of Directors held six
meetings.
6
<PAGE>
In 1993 total compensation earned by the directors was as follows:
<TABLE>
<CAPTION>
Total Director
Director Compensation
------------------- --------------
<S> <C>
Dexter F. Baker........... $ 37,200
Jeffrey J. Burdge......... 37,000
William E. Dearden........ 38,200
Ralph D. DeNunzio......... 42,000
Barbara H. Franklin....... 11,800
Joseph M. Hixon III....... 39,600
William J. Hudson, Jr. ... 0<F1>
James E. Marley........... 0<F1>
Harold A. McInnes......... 136,400<F2>
John C. Morley............ 37,200
Walter F. Raab............ 136,400<F3>
Benjamin Savidge.......... 0<F1>
Paul G. Schloemer......... 36,200
- ------------
<FN>
<F1> Messrs. Hudson, Marley and Savidge are employees as well as directors of
the Corporation, and therefore did not receive any separate director or
committee fees.
<F2> This compensation includes consulting fees paid to Mr. McInnes, a former
Chairman of the Board and Chief Executive Officer of the Corporation,
under a consulting agreement with the Corporation. Under the agreement
Mr. McInnes is paid a monthly fee of $8,333 for services other than in
his capacity as a director. The consulting agreement will expire on
December 31,1995 unless extended by agreement of the parties.
<F3> This compensation includes consulting fees paid to Mr. Raab, a former
Chairman of the Board and Chief Executive Officer of the Corporation,
under a consulting agreement with the Corporation. Under the agreement
Mr. Raab is paid a monthly fee of $8,333 for services other than in his
capacity as a director. The consulting agreement will expire on December
31,1994.
</TABLE>
Effective January 1, 1994 non-employee directors are also permitted to
defer receipt of all or a portion of the annual retainer and the meeting fees.
The period of the deferral is within the discretion of each non-employee
director, provided however that payment must be made or commenced no later
than the earliest of the death of the director, a change in control and
termination of the director's services, or the year following the year in
which he or she reaches the age of 72. Deferred compensation may be allocated
to either or both of the following investment options: i) an interest-bearing
account with interest credited monthly based on 120% of the Long Term
Applicable Federal Rate as published by the Internal Revenue Service and
adjusted quarterly; and ii) a phantom AMP Common Stock account in which
phantom dividends are reinvested in further phantom stock units. Allocations
or changes in allocations can be made annually and apply prospectively to
compensation earned in future years. Payments of deferred director
compensation can be made in a lump sum or in up to ten annual installments.
Retirement
The Corporation has a retirement plan for directors who are not and have
not been employees of the Corporation (an "outside director"). Under the
plan, an outside director who has either reached the normal retirement date
(the end of the calendar year in which the director reaches age
7
<PAGE>
72) or retired early due to disability, and who has served a minimum of five
years on the Board, is eligible for an annual retirement benefit. The annual
retirement benefit is equal to a percentage of the outside director's annual
base retainer at the time of retirement, with the actual percentage being
based on the outside director's years of service.
In the event of a "change of control", the annual retirement benefit to
which an outside director would be entitled based on his or her years of
service at the date service to the Board ceases for any reason shall be fully
vested and payable immediately, without regard to the outside director's then
attained age.
A "change of control" as that term is used in this Proxy Statement would,
unless otherwise indicated, generally be deemed to have occurred if (a) any
person or group acquires beneficial ownership of 30% or more of the
Corporation's issued and outstanding shares of Common Stock, or (b) there
occurs a change in the Board such that the directors constituting the Board at
a given point in time (the "Incumbent Board") and any subsequently elected
directors who were recommended or approved by a majority of the Incumbent
Board no longer constitute a majority of the Board, or (c) a reorganization,
merger or consolidation of the Corporation is approved by the shareholders in
which said shareholders will no longer own more than 50% of the Corporation's
issued and outstanding shares of Common Stock, or (d) there occurs a
liquidation or dissolution of the Corporation or the sale of all or
substantially all of the assets of the Corporation.
Committees and Meetings
The Board of Directors has four standing committees: the Audit Committee,
the Compensation and Management Development Committee, the Nominating
Committee, and the Executive Committee.
The Audit Committee of the Board of Directors nominates the independent
auditors for appointment by the full Board and holds periodic meetings with
the Corporation's internal and independent auditors and financial officers to
monitor the control of the Corporation's financial resources and audit
functions, including a review of the arrangements and related fees for and the
scope of the independent auditors' examination, and consideration of the audit
findings and management response. During 1993 the Audit Committee held four
meetings.
The Compensation and Management Development Committee of the Board of
Directors makes recommendations to the Board regarding successors to and the
salaries of the Chairman of the Board and the Chief Executive Officer and
President; conducts annual performance reviews of the Chairman of the Board
and the Chief Executive Officer and President; reviews the salary budget for
the executive officers as a group and salary recommendations made by the Chief
Executive Officer and President for the named executive officers; makes
recommendations to the Board regarding changes to the Corporation's incentive
compensation plans, executive-only benefit plans and tax-qualified pension and
thrift plans; acts on awards under the AMP Management Incentive Plan, the 1993
Long-Term Equity Incentive Plan and the Incentive Cash (or Stock) Bonus Plan;
acts on payouts under the AMP Management Incentive Plan; and oversees the
development of a continuing management succession plan. During 1993 the
Compensation and Management Development Committee held five meetings.
8
<PAGE>
The Nominating Committee of the Board of Directors establishes the
criteria for selecting candidates for nomination to the Board; actively seeks
candidates who meet those criteria, are highly qualified and have diverse
backgrounds; makes recommendations to the Board of nominees to fill vacancies
on, or as additions to, the Board; makes recommendations to the Board on
changes in the size, composition and structure of the Board; makes
recommendations to the Board on compensation programs for the Board; and, as
appropriate, reviews the performance of the directors and reports its findings
to the Chairman of the Board and, in its discretion, to the Board itself. The
Nominating Committee will consider nominees for election to the Board that are
recommended by shareholders provided that a complete description of the
nominees' qualifications, experience and background, together with a statement
signed by each nominee in which he or she consents to act as such, accompany
the recommendations. Such recommendations should be submitted in writing to
the attention of the Chairman of the Board of the Corporation, and should not
include self-nominations. During 1993 the Nominating Committee
held two meetings.
EXECUTIVE COMPENSATION
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long Term Compensation
------------------------------------ ----------------------
Awards
----------------------
Other Annual Securities Underlying All Other
Name and principal Salary Bonus Compensation Options/SARs Compensation
position Year ($) ($) ($) (#) ($)
- ----------------------- --------- ---------- --------- -------------- -------------------- --------------------
(a) (b) (c) (d) (e)<F1> (f)<F2> (g)
- ----------------------- --------- ---------- --------- -------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
William J. Hudson, Jr. 1993 533,333 196,747 8,350 66,000 105,196<F3>
Chief Executive Officer 1992 363,750 122,800 30,937 6,100 61,462
and President, and a 1991 286,181 60,600 24,333 ...... 27,613
Director <F8>
James E. Marley 1993 475,000 162,023 26,372 42,000 54,146<F4>
Chairman of the 1992 429,167 141,100 83,438 ...... 49,187
Board <F8> 1991 400,000 80,000 54,489 8,000 59,438
Benjamin Savidge 1993 332,500 114,181 67,522 26,700 167,251<F5>
Executive Vice 1992 305,000 95,700 82,780 ...... 152,792
President and Chief 1991 280,000 56,000 48,987 ...... 114,793
Financial Officer,
and a Director
Jean Gorjat 1993 245,000 66,224 340,596 13,000 135,800<F6>
Vice President 1992 208,958 36,100 200,144 ....... 83,800
1991 132,500 20,300 9,532 4,000 27,800
Javad K. Hassan 1993 228,750 56,433 7,155 17,000 32,142<F7>
Vice President 1992 190,833 59,800 6,443 ....... 17,406
1991 171,542 12,400 ....... 3,200 33,368
Gerhard M. Schmidt 1993 296,776 92,627 24,719 7,000 .......
Vice President <F9> 1992 420,968 105,400 28,510 5,000 .......
1991 375,524 53,400 16,830 ...... .......
- ------------
<FN>
<F1> Unless otherwise indicated, no executive officer named in the Summary
Compensation Table received personal benefits or perquisites in excess of
the lesser of $50,000 or 10% of his total compensation reported in
columns(c) and(d).
9
Reported in this column is annual compensation related to: i) the Cash
Bonus paid under the Corporation's former Bonus Plan (Stock Plus Cash) to
cover Federal income taxes as described in footnote (1) to the
"Aggregated Option/SAR Exercises in 1993 and FY-End Option/SAR Values"
table, page 13, and fractional shares of the Bonus Plan Stock Bonus; ii)
the payment of estimated income taxes of Mr. Savidge on both
contributions to a pension security trust and income earned thereon,
under the Corporation's SERP; iii) overseas allowances for Mr. Hudson in
1991 and Mr. Gorjat in 1992 and 1993; iv) certain relocation
compensation, and payments of estimated income taxes relating to
relocation compensation, received by Mr. Hudson in 1992; and v) $33,978
as the personal benefit to Mr. Gorjat in 1993 for an automobile provided
by the Corporation.
<F2> These awards for years prior to 1993 were for SARs and were made pursuant
to the Corporation's former Bonus Plan (Stock Plus Cash), as described
in footnote (1) to the "Aggregated Option/SAR Exercises in 1993 and FY-End
Option/SAR Values" table, page 13. These awards in 1993 were made
pursuant to the Corporation's 1993 Long-Term Equity Incentive Plan and
include both options and SARs. This Plan is described in footnote (1) to
the "Option/SAR Grants in 1993" table, page 12.
<F3> Includes $5,396 as the company-matching contribution under the Employee
Savings and Thrift Plan; and $99,800 as the total premium paid by the
Corporation in 1993 under a split-dollar insurance plan, including both
the portion of the premium that is attributable to term life insurance
coverage for Mr. Hudson and the full dollar value of the remainder of the
premium. The split-dollar insurance plan provides life insurance
coverage to Mr. Hudson in the amount of $1 million (in lieu of the
coverage available under the Corporation's group-term life insurance
plan), and a substantial portion of the value of the advances made to pay
the premium as shown in this table will be repaid to the Corporation from
policy proceeds.
<F4> Includes $5,396 as the company-matching contribution under the Employee
Savings and Thrift Plan; $4,800 as total director fees paid to Mr. Marley
in 1993 by two wholly-owned subsidiaries of the Corporation; and $43,950
as the total premium paid by the Corporation in 1993 under a split-dollar
insurance plan, including both the portion of the premium that is
attributable to term life insurance coverage for Mr. Marley and the full
dollar value of the remainder of the premium. The split-dollar insurance
plan provides life insurance coverage to Mr. Marley in the amount of $1
million(in lieu of the coverage available under the Corporation's
group-term life insurance plan), and a substantial portion of the value
of the advances made to pay the premium as shown in this table will be
repaid to the Corporation from policy proceeds.
<F5> Includes $5,396 as the company-matching contribution under the Employee
Savings and Thrift Plan; $75,000 to fund a pension security trust under
the Corporation's SERP, which amount relates to benefits accrued from
1959 through 1993; $4,800 as total director fees paid to Mr. Savidge in
1993 by two wholly-owned subsidiaries of the Corporation; and $82,055 as
the total premium paid by the Corporation in 1993 under a split-dollar
insurance plan, including both the portion of the premium that is
attributable to term life insurance coverage for Mr. Savidge and the full
dollar value of the remainder of the premium. The split-dollar insurance
plan provides life insurance coverage equal to at least twice his base
salary (in lieu of the coverage available under the Corporation's
group-term life insurance plan), and a substantial portion of the value
of the advances made to pay the premium as shown in this table will be
repaid to the Corporation from policy proceeds.
<F6> Includes $135,800 as the total premium paid by the Corporation in 1993
under a split-dollar insurance plan, including both the portion of the
premium that is attributable to term life insurance coverage for Mr.
Gorjat and the full dollar value of the remainder of the premium.
10
The split-dollar insurance plan provides life insurance coverage equal to
at least twice his base salary (in lieu of the coverage available under the
Corporation's group-term life insurance plan), and a substantial portion
of the value of the advances made to pay the premium as shown in this
table will be repaid to the Corporation from policy proceeds.
<F7> Includes $5,309 as the company-matching contribution under the Employee
Savings and Thrift Plan; and $26,833 as the total premium paid by the
Corporation in 1993 under a split-dollar insurance plan, including both
the portion of the premium that is attributable to term life insurance
coverage for Mr. Hassan and the full dollar value of the remainder of the
premium. The split-dollar insurance plan provides life insurance
coverage equal to at least twice his base salary (in lieu of the coverage
available under the Corporation's group-term life insurance plan), and a
substantial portion of the value of the advances made to pay the premium
as shown in this table will be repaid to the Corporation from policy
proceeds.
<F8> Effective January 1, 1993 Mr. Hudson was elected Chief Executive Officer
and President and Mr. Marley was elected Chairman of the Board of
Directors of the Corporation.
<F9> A substantial portion of Mr. Schmidt's compensation was paid in German
marks. This compensation has been converted into U.S. dollars based on
the exchange rates in effect at the time of payments during 1993. Mr.
Schmidt resides in Saint Gallen, Switzerland.
Effective September 1, 1993 Mr. Schmidt retired from the Corporation.
The Corporation has entered into a consulting agreement with Mr. Schmidt
that has a term ending August 31, 1994 unless extended by agreement of
the parties and under which he will receive $4,583 a month plus $500 per
diem for each day in excess of 5 days per calendar month that he performs
services under the agreement, subject to a maximum performance of 45 days
per calendar quarter.
</TABLE>
<TABLE>
Option/SAR Grants in 1993
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation for
Individual Grants Option Term<F3>
-------------------------------------------------------------------------- -----------------------------
Number of
Securities % of Total
Underlying Options/SARs Exercise Market
Options/SARs Granted to or Base Price at
granted<F1> Employees in Price Grant Expiration 0% 5% 10%
Name Date (#) 1993 ($/share) ($/share) Date<F2> ($) ($) ($)
- ----------------------- --------- ----------- ------------ ---------- ---------- ------------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
William J. Hudson, Jr. .. 4/21/93 10,000<F4> 2.72 57.00 60.00 4/21/99 30,000 196,404 399,243
Chief Executive 7/27/93 56,000 15.21 60.50 60.50 7/27/2003 0 2,130,800 5,399,520
Officer and President,
and a Director
James E. Marley.......... 7/27/93 42,000 11.41 60.50 60.50 7/27/2003 0 1,598,100 4,049,640
Chairman of the Board
Benjamin Savidge......... 7/27/93 21,000 5.70 60.50 60.50 7/27/2003 0 799,050 2,024,820
Executive Vice President 7/27/93 5,700 1.55 57.75 60.50 7/27/99 15,675 111,321 227,905
and Chief Financial
Officer, and a Director
Jean Gorjat.............. 7/27/93 13,000 3.53 60.50 60.50 7/27/2003 0 494,650 1,253,460
Vice President
Javad K. Hassan.......... 7/27/93 17,000 4.62 60.50 60.50 7/27/2003 0 646,850 1,639,140
Vice President
Gerhard M. Schmidt....... 7/27/93 7,000 1.90 60.50 60.50 7/27/2003 0 266,350 674,940
Vice President
11
- ---------------
<FN>
<F1> The Corporation's 1993 Long-Term Equity Incentive Plan (the "1993 Plan")
became effective on July 1, 1993 and is a long-term incentive
compensation program that is based on stock price appreciation both in
the form of stock options (either incentive or non-qualified stock
options) and in the form of freestanding SARs payable in the
Corporation's Common Stock or occasionally, in the discretion of the
Corporation, in cash. The 1993 Plan is administered by the Compensation
and Management Development Committee of the Corporation's Board of
Directors (the "Committee"). Under the 1993 Plan, each employee
designated by the Committee to participate is credited with stock
options having an option price per share of Common Stock that is not less
than 100% of the closing price of the Common Stock on the New York Stock
Exchange Composite Tape on the award date, and/or stock bonus units
(SARs) having a designated value per unit of not less than 95% of the
average closing price of the Common Stock on the New York Stock Exchange
Composite Tape for the 10 trading days immediately prior to the award
date. Aggregate awards of stock options and stock bonus units that were
made to the named executive officers in 1993 are shown in column (f) of
the Summary Compensation Table, page 9.
With respect to stock options, all options granted in 1993 will vest 3
years from the date of award and will expire 7 years after such vesting.
They have an exercise price equal to 100% of the closing price of the
Common Stock on the New York Stock Exchange on the award date.
With respect to stock bonus units, bonus computations are made on the 4th
through 6th anniversaries of the award date for one-third of each
participant's bonus units and are based on the increase in the market
price of the Common Stock over the designated value, as established on
the award date. The bonus typically paid in stock (the "Stock Bonus") is
the number of shares of Common Stock having an aggregate market value on
the computation date equivalent to the one-third of the participant's
bonus units multiplied by the increase in market price described above. A
cash bonus (the "Supplemental Cash Bonus") is also paid under the 1993
Plan in conjunction with Stock Bonuses. The Supplemental Cash Bonus is
paid at the same time that payment of the Stock Bonus is made and is a
percentage of the value of the Stock Bonus that is designated at the time
of award and is no greater than that calculated to provide a payout
sufficient to pay the anticipated United States Federal income tax at a
maximum rate for the highest taxable bracket with respect to the
aggregate of the Stock Bonus and the Supplemental Cash Bonus.
Supplemental Cash Bonus awards are not included in this table in
connection with stock option and stock bonus unit (SAR) awards made in
1993.
<F2> The expiration date for stock options under the 1993 Plan is the date
determined by the Committee at the time of the award of such options.
With respect to the SARs, because computations of the Stock Bonus are
made on the 4th through 6th anniversaries of the award date for one-third
of each participant's bonus units granted in the award, the 6th
anniversary date has been designated as the "expiration date".
<F3> Assumed values contained in this table relate only to the stock options
and the Stock Bonus and are based on assumed appreciation rates set by
the Securities and Exchange Commission; they are not intended to forecast
possible future appreciation, if any, of the Corporation's stock price.
With respect to the stock options, these values are based on the
difference between the exercise price and the exercise price as increased
by the assumed annual appreciation rate over the 10-year term of the
options, compounded annually, with said difference multiplied by the
number of options granted as shown in the table. For the Stock Bonus,
these values have been calculated by applying the assumed annual
appreciation rate, compounded annually, for one-
12
third of the bonus units granted in the 1993 award for four years, for
one-third of such bonus units for five years, and for one-third of such
bonus units for six years, corresponding to the manner in which the stock
bonus units are used in the Stock Bonus calculations described in footnote
(1) above. With respect to the stock bonus units granted to Mr. Hudson
pursuant to the Corporation's former Bonus Plan (Stock Plus Cash), these
values have been calculated based on the designated value for that award
and without regard to an adjusted designated value, as those terms are
defined under the Bonus Plan as described in footnote (1) to the
"Aggregated Option/SAR Exercises in 1993 and FY-End Option SAR Values"
table, page 13. In addition to the stock options and the Stock Bonus,
a Supplemental Cash Bonus is paid under the 1993 Plan as described in
footnote (1) above; the amount of the Supplemental Cash Bonus has not been
included in the assumed values set forth in these columns of the table.
<F4> This grant of stock bonus units (SARs) to Mr. Hudson was made pursuant to
the Corporation's former Bonus Plan (Stock Plus Cash) described in
footnote (1) to the "Aggregated Option/SAR Exercises in 1993 and FY-End
Option/SAR Values" table, page 13.
</TABLE>
<TABLE>
Aggregated Option/SAR Exercises<F1> In 1993 and FY-End Option/SAR Values
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options/SARs on In-The-Money Options/SARs
Shares Acquired Value December 31, 1993 (#) on December 31, 1993 ($)
on Exercise Realized ------------------------------- -----------------------------------
Name (#) ($)<F2> Exercisable/Unexercisable<F3> Exercisable/Unexercisable<F3><F4>
- ------------------------- ---------------- ----------- ------------------------------- -----------------------------------
<S> <C> <C> <C> <C>
William J. Hudson, Jr. ........ 292 16,644 0 / 74,767 0 / 302,910
Chief Executive Officer
and President, and a
Director
James E. Marley................ 849 52,638 0 / 52,666 0 / 284,903
Chairman of the Board
Benjamin Savidge............... 445 25,365 0 / 36,366 0 / 300,373
Executive Vice President
and Chief Financial
Officer, and a Director
Jean Gorjat.................... 265 16,430 0 / 17,834 0 / 111,035
Vice President
Javad K. Hassan................ 237 14,220 0 / 21,200 0 / 105,600
Vice President
Gerhard M. Schmidt............. 795 49,290 0 / 17,333 0 / 132,410
Vice President
- --------------
<FN>
<F1> All exercises shown in this table relate to stock bonus units (SARs)
granted under the Corporation's Bonus Plan (Stock Plus Cash), which
preceded the 1993 Plan. The Corporation first awarded stock options in
1993, under the 1993 Plan. Because these options generally will not vest
until 3 years after the date of award, no exercises occurred in 1993.
Similarly, computations of Stock Bonuses under the 1993 Plan will not
commence until the 4th anniversary of the award date and, since such
awards under the 1993 Plan were first made in 1993, no computations (in
other words, "exercises") were made in 1993.
With respect to the stock bonus units granted under the Corporation's
Bonus Plan (Stock Plus Cash) (the "Bonus Plan"), the Bonus Plan was a
long-term incentive compensation program that was based on stock price
appreciation in the form of freestanding SARs payable in the
13
Corporation's Common Stock or occasionally, in the discretion of the
Corporation, in cash. Under the Bonus Plan, each employee designated by
the Board of Directors to participate was credited with bonus units
having a designated value per unit of not less than 95% of the closing
price of the Common Stock on the New York Stock Exchange on the award
date.
Bonus computations are made on the 4th through 6th anniversaries of the
award date for one-third of each participant's bonus units and are based
on the greater of the increase in the market price of the Common Stock
(a) over the designated value, as established on the award date, or (b)
over an adjusted designated value. The adjusted designated value is 95%
of an amount determined by discounting the market price of the Common
Stock on the computation date by a percentage (not to exceed 7.5% per
year) equal to one-half of the Corporation's compound average annual
growth rate in earnings per share during the period between the award
date and the computation date. The bonus typically paid in stock (the
"Bonus Plan Stock Bonus") is the number of shares of the Common Stock
having an aggregate market value on the computation date equivalent to
the amount computed as described above.
A cash bonus (the "Cash Bonus") is also paid under the Bonus Plan. For
awards made prior to January 27, 1988, the Cash Bonus is an amount equal
to a percentage designated at the time of award (not more than 50%) of
the value of the Bonus Plan Stock Bonus. For awards under the Bonus Plan
that were made between January 27, 1988 and June 30, 1993, the Cash Bonus
is an amount sufficient to pay the anticipated United States Federal
income tax with respect to both the Bonus Plan Stock Bonus and the Cash
Bonus as determined at the time of the distribution of the bonuses, not
to exceed an amount that is 50% of the value of the Bonus Plan Stock
Bonus. The amounts of the Cash Bonus paid in 1993 based on distributions
made in that year are included in column (e), "Other Annual
Compensation", of the Summary Compensation Table, page 9.
In view of the foregoing, "exercises" for purposes of this table are
deemed to be the Bonus Plan Stock Bonus computations that are made on the
4th through 6th anniversaries of the award date for one-third of each
participant's bonus units granted in an award under the Corporation's
Bonus Plan.
<F2> "Value Realized" includes only the Bonus Plan Stock Bonus paid under the
Bonus Plan based on stock price appreciation, and does not include the
Cash Bonus as described in footnote (1) above.
<F3> The stock bonus units (SARs) awarded under the Bonus Plan and the stock
bonus units (SARs) awarded under the 1993 Plan are not exercised by the
participants, but are paid based on bonus computations made on the 4th
through 6th anniversaries of the award date for one-third of each
participant's bonus units.
<F4> These values relate only to the Bonus Plan Stock Bonus described in
footnote (1) above and the Stock Bonus paid under the 1993 Plan as
described in footnote (1) of the table entitled "Option/SAR Grants in
1993", page 12. A Cash Bonus under the Bonus Plan and a Supplemental
Cash Bonus under the 1993 Plan is also paid as previously described, but
is not included in the values disclosed in this column. With respect to
Bonus Plan Stock Bonuses, these values also have been calculated based on
the designated values for the respective awards and without regard to
adjusted designated values, as those terms are defined under the Bonus
Plan and described in footnote (1) above.
14
</TABLE>
<PAGE>
Retirement Benefits
The Corporation maintains a pension plan ("Pension Plan") for its
employees that is designed and administered to qualify under Section 401(a) of
the Internal Revenue Code of 1986, as amended ("Code"). The Pension Plan has
been noncontributory since January 1, 1991. Prior to January 1, 1994 the
Pension Plan was a career average defined benefit plan under which, for each
year of covered service with the Corporation, an employee accrued a benefit
equal to a percentage---1.67% for 1993---of his or her current base earnings;
the total accrued benefits for all years of covered service were payable
annually to the employee as a straight life annuity beginning at his or her
Normal Retirement Date. The Pension Plan also included an alternative formula
that updated pension benefits for prior service. Under this formula, an
employee received the greater of the benefit the employee had otherwise earned
under the Pension Plan or .9% of the average of the annual earnings in effect
on December 31st of the last 3 completed calendar years, up to the
then-current Social Security covered compensation level ($22,716 in 1993),
plus 1.4% of such average annual earnings in excess of said Social Security
level, multiplied by years of service (not to exceed 35 years) back to age 21
and one year of service for participants who joined the Pension Plan when
first eligible, otherwise back to the date of actual enrollment in the Pension
Plan. With respect to years of service in excess of 35, the number of such
years of service was multiplied by 1.2% of the three-year average earnings
described above, and the result was added to the benefit calculated for the
first 35 years of service.
Effective as of January 1, 1994 the Corporation amended the Pension Plan
to provide benefits based on final average base earnings and total years of
credited service at retirement. The final average base earnings is determined
based on the average of the year-end annual earnings rates for the
3-consecutive year period that represents the employee's highest 3-year
average during such employee's last 10 years of service. The benefit is
calculated by adding (1) 1.0% of such final average base earnings, up to the
then-current Social Security covered compensation level, multiplied by the
employee's credited years of past service (not to exceed 35 years), (2) 1.5%
of such final average base earnings in excess of the Social Security covered
compensation level, multiplied by the employee's credited years of past
service (not to exceed 35 years), and (3) 1.2% of such final average base
earnings multiplied by the number of the employee's credited years of past
service in excess of 35 years. Credited years of past service are counted
back to age 21 and one year of service for participants who joined when first
eligible, otherwise back to the date of actual enrollment in the Pension Plan.
Employees who are age 60 or older as of January 1, 1994 will receive the
higher of the benefit under the prior career average defined benefit approach
or the benefit under the new final average base earnings method.
Earnings used to calculate benefits are restricted to (a) annual base
salary, including amounts deferred under the Corporation's Employee Savings
and Thrift Plan, amounts applied to the employee portion of the health care
plan premiums pursuant to a salary reduction agreement, and amounts credited
to health care and dependent care flexible spending accounts pursuant to a
salary reduction agreement and (b), for individuals paid on a commission
basis, annual base salary (as described above) plus commissions, but
commissions are included only to the extent that the sum of the annual base
salary and commissions do not exceed a designated amount. Normal Retirement
Date under the Pension Plan is defined as age 65, but there is no actuarial
reduction of a participant's pension for early retirement between the ages of
60 and 65.
The Pension Plan also provides for a special pension benefit formula that
would be used to recalculate benefits in the event of a change in control of
the Corporation. The special formula,
15
<PAGE>
which the Corporation plans to review and modify from time to time as the
funding status of the Pension Plan warrants, is intended to ensure that excess
Pension Plan assets at the time of a change in control are used to provide
increased retirement benefits for covered employees. The special formula is
similar in design to the prior service update formula described above in
connection with the alternative formula to the career average defined pension
benefit approach used in the past by the Corporation, with the .9%, 1.4% and
1.2% factors replaced by 1.25%, 1.75%, and 1.67%, respectively. For purposes
of this provision of the Pension Plan, a "change in control" would be deemed
to have occurred if (a) any person or group acquires beneficial ownership of
30% or more of the Corporation's issued and outstanding shares of Common
Stock, or (b) there occurs a change in the Board such that the directors
constituting the Board in the immediately preceding year ("Incumbent Board")
and any subsequently elected directors who were recommended or approved by a
majority of the Incumbent Board no longer constitute a majority of the Board.
In accordance with Code requirements, the Pension Plan limits the maximum
amount of annual compensation that may be taken into account under the Pension
Plan ($235,840 in 1993 and $150,000 in 1994) and the maximum annual
employer-provided benefit that can be paid under the Pension Plan ($115,641 in
1993 and $118,800 in 1994). The Corporation maintains a supplemental employee
retirement program ("SERP") pursuant to which certain employees whose
retirement benefits otherwise payable under the Pension Plan are limited by
these Code restrictions will receive payment of the restricted amount from
non-Pension Plan sources. Effective as of January 1, 1994 the Corporation
amended the SERP to provide that earnings used to calculate SERP benefits will
include the amount of an employee's annual cash bonus under the Management
Incentive Plan, together with amounts otherwise taken into account under the
Pension Plan. Effective May 23, 1988 the Corporation established a pension
security trust (the "Trust"), with a national bank as trustee, to fund
certain SERP benefits. During 1993 the Corporation contributed to the Trust
$75,000 to further fund the restricted Pension Plan benefits that have been
earned by Mr. Savidge and are attributable to all years of service through
1993. The Corporation also paid to Mr. Savidge an amount ($54,754) calculated
to cover his estimated Federal, state, and local income taxes with respect to
both the Corporation's contribution to the Trust and income earned thereon.
Such amounts are included in the Summary Compensation Table, page 9.
16
<PAGE>
The following table shows the annual retirement benefit payable to the
Corporation's executive officers named in the Summary Compensation Table under
both the Pension Plan and the SERP, as amended effective January 1, 1994, upon
normal retirement, based on the indicated amount of final average base
earnings and number of credited years of service:
<TABLE>
PENSION PLAN TABLE <F3>
<CAPTION>
Years of Service <F2>
---------------------------------------------------
Renumeration<F1> 15 20 25 30 35 40
- ----------------- ------ ------ ------ ------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
250,000......... 54,550 72,730 90,910 109,090 127,270 142,270
300,000......... 65,800 87,730 109,660 131,590 153,520 171,520
350,000......... 77,050 102,730 128,410 154,090 179,770 200,770
400,000......... 88,300 117,730 147,160 176,590 206,020 230,020
450,000......... 99,550 132,730 165,910 199,090 232,270 259,270
500,000......... 110,800 147,730 184,660 221,590 258,520 288,520
550,000......... 122,050 162,730 203,410 244,090 284,770 317,770
600,000......... 133,300 177,730 222,160 266,590 311,020 347,020
650,000......... 144,550 192,730 240,910 289,090 337,270 376,270
700,000......... 155,800 207,730 259,660 311,590 363,520 405,520
750,000......... 167,050 222,730 278,410 334,090 389,770 444,770
800,000......... 178,300 237,730 297,160 356,590 416,020 464,020
850,000......... 189,550 252,730 315,910 379,090 442,270 493,270
900,000......... 200,800 267,730 334,660 401,590 468,520 522,520
- ---------------
<FN>
<F1> The compensation covered by the Pension Plan and SERP includes the
employee's final average earnings, as determined by the average of the
3-consecutive year period that represents the employee's highest base
earnings during such employee's last 10 years of service, together with
the amount of the employee's annual cash bonus under the Management
Incentive Plan for those employees who are participants in the SERP. In
the case of the named executive officers, the annual base earnings
considered in such a determination includes the amount of salary and
bonus shown in columns (c) and (d) of the Summary Compensation Table,
page 9. Annual earnings in excess of the applicable Code limitation,
which in 1993 was $235,840 and for 1994 is $150,000, is recognized in
computing the benefit payable under the SERP.
<F2> The current estimated credited years of service for the named executive
officers are as follows: W. J. Hudson, Jr. - 32 years; J. E. Marley - 31
years; B. Savidge - 34 years; J. Gorjat - 33 years; J. K. Hassan - 6
years; and G. M. Schmidt - 38 years. The estimated credited years of
service for the named executive officers at the Normal Retirement Date are
as follows: W. J. Hudson, Jr. - 37 years; J. E. Marley - 37 years; B.
Savidge - 35 years; J. Gorjat - 35 years; J. K. Hassan - 17 years;
and G. M. Schmidt - 38 years.
<F3> Annual benefits in excess of the applicable Code limitation, which in
1993 was $115,641 and for 1994 is $118,800, are payable under the SERP.
The retirement benefit shown in the Pension Plan Table is a straight life
annuity amount and is not subject to any deduction for Social Security or
other offset amounts. However, as required by law, the form of payment
for married employees under the Pension Plan and SERP is a 50% joint and
survivor annuity, which is typically less than the straight life annuity
amount.
</TABLE>
17
<PAGE>
Security Ownership of Executive Officers
The AMP equity security ownership as of March 11, 1994 by executive
officers of the Corporation is as follows:
<TABLE>
<CAPTION>
Amounts and Nature
Name and Address of Beneficial Ownership Percent
Title of Class of Beneficial Owner (shares) Of Class
- -------------- ------------------------ ----------------------- ------------
<S> <C> <C> <C>
Common Stock....William J. Hudson, Jr. 12,675<F2> less than 1
Harrisburg, Pennsylvania
Common Stock....James E. Marley 14,614<F2> less than 1
Harrisburg, Pennsylvania
Common Stock....Benjamin Savidge 13,235 less than 1
Harrisburg, Pennsylvania
Common Stock....Jean Gorjat 964 less than 1
Tokyo, Japan
Common Stock....Javad K. Hassan 804<F1> less than 1
Harrisburg, Pennsylvania
Common Stock....Gerhard M. Schmidt 1,682 less than 1
Saint Gallen, Switzerland
Common Stock....all Executive Officers<F1><F2><F3> 923,182 0.88
(14 persons)
and Directors as a Group
- -----------------
<FN>
<F1> Four executive officers have the right to acquire an undeterminable
number of shares under the Corporation's Bonus Plan (Stock Plus Cash)
within 60 days after March 11, 1994.
<F2> A portion of the shares reported for four executive officers are held in
the Corporation's Employee Savings and Thrift Plan. Through further
contributions to this plan, each may acquire an undeterminable number of
additional shares within 60 days after March 11, 1994.
<F3> In addition, a total of 5,384 shares are held by immediate family members
of two directors and two executive officers; the directors and executive
officers disclaim beneficial ownership. Additionally, a director has a
2% residual beneficial interest but no voting or dispositive powers in a
trust that holds 3,696 shares of Common Stock of the Corporation.
18
</TABLE>
<PAGE>
<TABLE>
Performance Graph
<CAPTION>
CUMULATIVE TOTAL SHAREHOLDER RETURN
1988-93
<S> <C> <C>
220 |
|
|
200 |
|
|
180 | [The Performance Graph in paper copy was filed with
| the Securities and Exchange Commission under cover
| of Form SE.]
160 |
|
TOTAL |
SHAREHOLDER 140 |
RETURN<F2> |
(DOLLARS) |
120 |
| AMP _________
| S&P 500 ..........
100 | PEER GROUP<F1> _ _ _ _
|
80 |___________________________________________________________
1988 1989 1990 1991 1992 1993
- -------------
<FN>
<F1> The Peer Group includes the following companies:
Advanced Micro Services Moore Corporation Ltd.
Amdahl Corporation Motorola Inc.
Apple Computer National Semiconductor Corporation
Ceridian Corporation Perkin Elmer Corporation
Compaq Computer Corporation Pitney Bowes Inc.
Cray Research Inc. Raychem Corporation
Data General Corporation Tandem Computers Inc.
Digital Equipment Corporation Textronix Inc.
Emerson Electric Company Texas Instruments Inc.
W. W. Grainger Inc. Thomas & Betts Corporation
Hewlett Packard Inc. Unisys Corporation
Honeywell Inc. Wang Laboratories Inc.
Intel Corporation Westinghouse Electric Corporation
Intergraph Corporation Xerox Corporation
The Peer Group remains unchanged from last year and essentially consists
of all companies included in the following Standard and Poor's industrial
classifications as of April, 1993: Electrical Equipment, Electronics
(Instrumentation), Office Equipment, Computer Systems, and Electronics
(Semiconductors). However the Peer Group does not include the
Corporation, which is one of the companies listed in the Electrical
Equipment classification, and it also does not include General Electric
Company and International Business Machines Corporation because of their
dissimilar market capitalizations. Although changes have occurred since
1993 to the composition of the Standard and Poor's industrial
classifications that the Corporation relied on in determining its
original Peer Group, the Corporation has elected at this time to continue
with the Peer Group as originally devised in order to enhance the
comparability of the Performance Graph year-to-year.
<F2> The Total Shareholder Return assumes a fixed investment of $100 in the
AMP Common Stock or indicated index, and a reinvestment of dividends.
The total return of each company included in the S&P 500 and Peer Group
indexes has been weighted in accordance with the company's market
capitalization as of the beginning of the year reported. The weighting
was accomplished by: i) calculating the market capitalization for each
company at the beginning of the respective calendar year based on the
closing stock price and outstanding shares; ii) determining the
percentage that each such market capitalization represents against the
total of such market capitalizations for all companies included in the
index; and iii) multiplying the percentage determined in ii) above by the
total shareholder return of the company in question for the year being
reported.
</TABLE>
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The Compensation and Management Development Committee Report on
Executive Compensation.
The Compensation and Management Development Committee of the Board of
Directors, among other responsibilities, has responsibility for the
Corporation's executive compensation program. The Committee is currently
composed entirely of outside directors. The Committee is chaired by Mr. Ralph
D. DeNunzio, President, Harbor Point Associates, Inc. Other Committee members
include Mr. William E. Dearden, Retired Chairman and CEO, Hershey Foods
Corporation; Mr. Dexter F. Baker, Retired Chairman and CEO, Air Products and
Chemicals, Inc.; and Mr. Paul G. Schloemer, Retired President and CEO, Parker
Hannifin Corporation.
The Committee is responsible for reviewing and approving compensation and
benefit programs that cover officers and key executives of the Corporation.
This includes oversight of salary levels and salary increases for senior
officers, annual Management Incentive Plan cash bonus awards and payment
decisions, awards of stock bonuses and stock options under the 1993 Long-Term
Equity Incentive Plan, and any special benefits affecting officers and key
executives such as supplemental retirement plans, change of control agreements
and other plans. The Committee in appropriate cases makes recommendations to
the Board of Directors on matters involving the executive compensation
program.
The Corporation's compensation philosophy is to ensure that the delivery
of compensation, both in the short- and long-term, is consistent with the
sustained progress, growth and profitability of the Corporation and acts as an
inducement to attract and retain qualified individuals. The Corporation's
intent is to have annual and long-term incentive compensation plans that
correlate to the growth, success and profitability of the Corporation and thus
align the interests of the Corporation's executives with its shareholders.
These at-risk, performance-based incentive compensation plans are intended to
form a significant portion of the total compensation opportunity for all
participants. Base salary compensation and compensation that is incidental
and/or supplemental to base compensation is kept competitive with the
participant's counterparts in industry, with due regard to country site and
appropriate business custom.
The Corporation annually reviews compensation surveys and other published
compensation data covering the electrical/electronics industry and industry in
general to assess whether its own executive salary ranges and compensation
practices remain competitive. Where they do not remain competitive,
appropriate adjustments are made. In this comparative process, the
compensation levels and practices at the companies comprising the Peer Group
Index in the Performance Graph at page 19 are not specifically or separately
analyzed, but to a substantial extent these Peer Group companies and their
compensation practices are included in the general electrical/electronic
industry and industry in general surveys that are reviewed and considered by
the Corporation in setting its CEO and other executive compensation levels and
practices. The salaries, and any periodic increases thereof, of the Chairman
of the Board and the Chief Executive Officer and President are determined by
the Board of Directors of the Corporation based on recommendations made by the
Committee. These officers in turn formulate the salary plan for
the other executive officers, with the review and oversight of the Committee.
The level of base salary compensation for officers and key executives is
determined by both their scope of responsibility and the salary ranges for
officers and key executives of the Corporation established by the process
described above. Periodic increases in base salary are dependent on the
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individual's performance in his or her position for a given period, on the
individual's competency, skill and experience, and on general levels of wage
and price inflation.
The AMP Management Incentive Plan provides opportunity for annual cash
bonuses based on two or more of the following weighted performance components:
(1) overall corporate earnings per share (EPS) performance for a given year
measured against an EPS target for the year (weighted two-thirds for
participants such as the CEO with corporate-wide responsibilities and
one-third for those with specific unit responsibilities); (2) operating unit
performance for a given year measured against the operating unit income or
sales target for the year (weighted one-third for those with specific unit
responsibilities); and (3) individual performance for a given year measured
against individual performance objectives for such year (weighted one-third).
The Committee sets the EPS target for the year at the start of each year, with
the approval of the Board of Directors, and also sets the individual
performance objectives of the Chairman of the Board and the CEO. The EPS
target for 1993 was $3.00 and the actual EPS performance was $2.83. The unit
and individual performance targets for 1993 and the actual unit and individual
performance levels for 1993 necessarily varied widely between units and
individuals. In addition, the Committee assigns to each participant under the
Management Incentive Plan a minimum, target and maximum bonus percentage,
which vary from participant to participant to reflect competitive practice,
the participant's position, and the scope of the participant's responsibility.
Actual performance between 90% and 120% of the target performance levels
results in a bonus calculation that ranges between the participant's minimum
and maximum bonus percentages.
Long-term incentive compensation awards in the form of bonus units
(essentially, stock appreciation rights) and stock options are made under the
1993 Long-Term Equity Incentive Plan. Both the bonus units and the stock
options deliver value to the participant when the value of the Corporation's
stock rises. In this way, long-term compensation is tied to increased
shareholder value and service to the Corporation. With respect to bonus unit
awards under the Plan, the Committee has discretion as to the timing and
amount of the awards. The general practice, however, is to make bonus unit
awards on a three-year cycle and to use the quotient obtained by dividing the
participant's annual base salary by the fair market value of a share of Common
Stock on the award date as a benchmark for determining the number of bonus
units to award. The designated value of a bonus unit is set on the award
date, at no less than 95% of the fair market value of a share of Common
Stock as defined under the Plan.
The Committee also has discretion with respect to the timing and amount of
stock option awards under the Plan. In granting during 1993 the Corporation's
first-ever stock option awards, the Committee gave considerable weight to the
annual stock option award levels and practices of a diverse range of 270
public companies included in a recent Towers Perrin survey of long-term
incentive compensation practices. Of the twenty-eight companies comprising
the Peer Group Index in the Performance Graph at page 19, twelve were included
in the Towers Perrin survey. The stock option award levels for 1993 were
generally set at between the 50th and the 75th percentile of the option award
levels reflected in the Towers Perrin survey. The exercise price of each
option awarded in 1993 was set at $60.50, which was 100% of the fair market
value of a share of Common Stock as defined under the Plan. It is the current
intention of the Committee to grant stock option awards on an annual cycle.
It is extremely improbable that the 1994 aggregate compensation of any
executive will equal or exceed the newly-imposed $1,000,000 per executive
annual limitation on Federal tax-deductible
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compensation. However, in anticipation of possible future growth in executive
compensation to levels that do exceed this $1,000,000 per year limit, the
Corporation will analyze during 1994 the alternatives available under the law
to maximize the tax-deductibility of future compensation paid to executives,
including in particular the alternative of submitting performance-based
compensation plans to the Corporation's shareholders for approval in 1995.
1993 CEO Compensation
Effective January 1, 1993, Mr. William J. Hudson, Jr. was promoted to the
dual role of CEO and President of the Corporation from his prior position as
Executive Vice President - International. His base salary paid in 1993 was
$533,334, representing an increase of $169,584 over his 1992 base salary. In
adjusting Mr. Hudson's salary compensation upwards in 1993, the Committee was
motivated primarily by the significant increase in responsibility that
accompanied his promotion to CEO and President. In addition, the Committee
considered Mr. Hudson's performance since his prior increase, his competency,
skill and experience, and the applicable salary range and survey data and
published reports on the salary levels of his counterparts in the
electrical/electronic industry and industry in general. The salary level set
for Mr. Hudson was below the $655,000 median annual salary level for
comparable CEOs reflected in the compensation survey data relied upon by the
Committee.
Mr. Hudson's assigned minimum, target, and maximum bonus percentages
under the Management Incentive Plan for 1993 were 10%, 50% and 70%,
respectively. Accordingly, Mr. Hudson had the potential to earn an annual
bonus of up to 70% of base annual salary if the Corporation were to attain
120% or more of the $3.00 EPS target and Mr. Hudson were to fully accomplish
his individual performance targets. Based on the Corporation's EPS
performance for 1993 at 94.33% of the $3.00 EPS target for the year and the
Committee's assessment of Mr. Hudson's individual performance, Mr. Hudson's
aggregate bonus under the Plan for 1993 was 36.89% of his base salary, or
$196,747.
As part of the Corporation's first-ever grant of options, on July 27,
1993 Mr. Hudson was awarded 56,000 stock options (1,600 incentive stock
options and 54,400 nonqualified stock options) under the 1993 Long-Term
Incentive Plan, all with an exercise price of $60.50. These options will
first be exercisable July 27, 1996 and remain exercisable to July 27, 2003.
In addition, in recognition of his promotion to CEO and President, Mr. Hudson
received a special, one-time award of 10,000 bonus units under the
Corporation's former Stock Plus Cash Bonus Plan in April, 1993 with a
designated value of $57.00. The size of this special, one-time award of
bonus units was based on the Corporation's usual practice for determining
bonus unit award levels, as described above. In making these two awards, the
Committee's intent in part was to compensate Mr. Hudson competitively for the
added responsibilities he undertook in 1993 in accepting the role of CEO. But
further, it was the Committee's deliberate intent to begin to increase the
proportion of stock-based compensation in the total compensation package of
the Corporation's executive officers, particularly the CEO, to further
increase the executives' community of interest with the Corporation's
shareholders. The stock option award levels set for Mr. Hudson in
1993 were at the 75th percentile of comparable option award recipients
reflected in the Towers Perrin survey data relied upon by the Committee.
In January, 1989, Mr. Hudson had been awarded 4,000 bonus units under the
Corporation's former Stock Plus Cash Bonus Plan, with a designated value of
$44.50 and an unspecified cash bonus percentage of (not in excess of 50%) to
cover Federal taxes on the payout. In January, 1993,
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<PAGE>
when the fair market value of a share of the Corporation's Common Stock had
increased to $57.00, 1,333 of these 4,000 bonus units matured, resulting in a
stock bonus payment to Mr. Hudson of 292 shares of Common Stock of the
Corporation and a cash payment of $8,349.75. In making these payout
calculations, the award date designated value of $44.50 per bonus unit was
used to determine the spread in lieu of the alternative designated value
defined under the Plan. The Plan's alternative designated value, which is based
on earnings per share growth between the award date and the maturity date, is
used in payout calculations whenever it would result in a greater stock bonus
payout than would the award date designated value. (For an explanation of
the alternative designated value, see footnote (1) to the Aggregated Option/SAR
Exercises in 1993 and FY-End Option/SAR Values Table, page 13.)
The Compensation and Management Development Committee:
Dexter F. Baker Ralph D. DeNunzio, Chairman
William E. Dearden Paul G. Schloemer
Termination of Employment and Change of Control Arrangements
The Corporation has entered into agreements with the named executive
officers (with the exception of Mr. Gorjat) to assure their unbiased counsel
and continued dedication in the event of an unsolicited tender offer or other
occurrence that may result in a change of control.
The terms of the agreements provide that, in the event of a change of
control, as previously defined, and the termination of the executive's
employment at any time during the 2-year period thereafter, the executive will
be paid a lump sum amount equal to his highest annual base salary rate in
effect during the year of termination multiplied by the number of whole years
and fractions thereof remaining to his 65th birthday, but, depending on the
date of the agreement, such multiplier shall in no event exceed 5 or 4. Any
agreement entered into after January 1, 1990 provides for the payment of an
amount necessary to pay any excise tax, and any taxes thereon, due on the lump
sum or other payment.
Additionally, the executive will be vested and paid under any bonus plans
he is participating in; be paid a pension computed on his base salary rate
prior to termination projected to the earlier of his elected early retirement
date, entry into a new employer's pension plan or age 65; receive continuation
of his Corporation-provided life insurance; and receive continuation of
medical and dental benefits for up to 3 years.
Notwithstanding the foregoing, several executive officers have agreements
where a change in control would be deemed to have occurred only if the then-
current Board of Directors of the Corporation should cease to constitute a
majority of the Board of the Corporation as the result of an unsolicited
tender offer or a tender offer solicited in response to such unsolicited
tender offer, or if any person or group acquires 30% or more of the
Corporation's issued and outstanding shares of Common Stock.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1993 a subsidiary of the Corporation obtained legal services from
the law firm of Dr. Helmig and Partners, Wiesbaden, Germany, with which a son
of Mr. Schmidt practices law. These transactions are in the ordinary course
of business and the Corporation does not consider the amounts involved to be
material by any reasonable standard.
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PRINCIPAL SHAREHOLDERS
The Corporation knows of no person who beneficially owns more than 5% of
the outstanding Common Stock of the Corporation as of March 11, 1994.
INDEPENDENT ACCOUNTANTS
The selection of Arthur Andersen & Co. as the independent accountants for
previous years has continued during the year 1994. Arthur Andersen & Co. has
no financial interest, direct or indirect, in the Corporation or any of its
subsidiaries.
A representative of Arthur Andersen & Co. will attend the Annual Meeting
with the opportunity to make a statement if he desires to do so and to answer
questions that may be asked of him by the shareholders.
1995 SHAREHOLDER PROPOSALS
Any shareholder, whether of record or a beneficial owner, desiring to
submit a proposal for consideration to appear in the Corporation's 1995 Proxy
Statement shall submit such proposal, typewritten or printed, addressed to the
Secretary of the Corporation. Such proposal must identify the name and address
of the shareholder, the number of the Corporation's shares held of record or
beneficially, the dates upon which the shareholder acquired such shares and
documentary support for a claim of beneficial ownership. The proposal should
be sent Certified Mail - Return Receipt Requested to the attention of the
Secretary of the Corporation, P.O. Box 3608, Harrisburg, Pennsylvania
17105-3608 and must be received not later than November 25, 1994.
In addition to the foregoing procedure for inclusion of a shareholder
proposal in the Corporation's Proxy Statement, the Corporation will consider
other items of business that are properly brought before the Annual Meeting by
a shareholder. To be properly brought before the Annual Meeting, such items
must be appropriate subjects for shareholder consideration, timely notice
thereof must be given in writing to the Secretary of the Corporation, and
other applicable requirements must be met. In general, such notice is timely
if it is received at the principal executive offices of the Corporation not
less than 30 days nor more than 60 days prior to the date in the then-current
year that corresponds to the date of the previous year's Annual Meeting.
Alternative notice deadlines apply if the date of the Annual Meeting differs
by more than 15 days from the date of the previous year's Annual Meeting. The
Bylaws specify the information to be included in the shareholder's notice.
Interested shareholders can obtain full copies of the Bylaw provisions by
making a written request therefor to the Secretary of the Corporation.
Item 2:
PROPOSAL FOR SHAREHOLDER APPROVAL OF THE
AMP INCORPORATED STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
Introduction
On October 27, 1993 the Board of Directors unanimously approved the
Corporation's Stock Option Plan for Outside Directors (the "Plan"), subject to
the approval of the shareholders at the 1994 Annual Meeting of Shareholders.
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The Plan provides for an annual automatic grant of options for the
purchase of Common Stock of the Corporation (the "Common Stock") to outside
directors of the Corporation. An aggregate of 150,000 shares of Common Stock
will be available for distribution upon the exercise of options granted during
the term of the Plan, subject to adjustment in certain circumstances as
hereinafter explained. The Plan will be unfunded.
Purpose of the Plan
The purpose of the Plan is twofold. First, the grant of options to
outside directors is intended to encourage these directors to acquire a
proprietary interest in the Common Stock and to further align their interests
with the interests of the shareholders. Second, the Plan will strengthen the
ability of the Corporation to attract and retain exceptionally qualified
directors upon whom the sustained progress, growth and profitability of the
Corporation, and thereby the value of the Corporation for the benefit of its
shareholders, will in large part depend.
Administration of the Plan
The Board of Directors will designate a committee of two or more of its
members to administer the Plan (the "Committee"). The Committee will be
composed of directors who are current or former employees of the Corporation
and therefore ineligible to participate in the Plan.
The Committee has the full power in its discretion to interpret the
provisions of the Plan and to take such action as it deems necessary or
advisable for the administration of the Plan. Decisions by the Committee are
in all respects final, conclusive and binding on the participants under the
Plan. Further, decisions by the Committee need not be uniform and may be made
selectively among those outside directors who receive or are eligible to
receive options under the Plan. No member of the Committee shall be
personally liable for any action in connection with the administration of the
Plan if such action is taken in good faith.
Eligibility
All members of the Board of Directors who are outside directors (that is,
who are not current or former employees of the Corporation) and who serve as
directors on or after July 1, 1994 shall be participants under the Plan. This
would currently include the following nominees for election as a director at
the 1994 Annual Meeting of Shareholders: Dexter F. Baker, Jeffrey J. Burdge,
William E. Dearden, Ralph D. DeNunzio, Barbara H. Franklin, Joseph M. Hixon
III, John C. Morley and Paul G. Schloemer. Other individuals who are neither
current nor former employees of the Corporation and who serve as directors of
the Corporation after July 1, 1994 shall also become participants under the
Plan.
Term of the Plan
Upon approval by the shareholders, the Plan will become effective July 1,
1994. No award of options shall be made under the Plan after October 27,
2003, and the Plan will remain in effect until all options granted under the
Plan have been exercised, have expired or have been forfeited by their terms.
Award of Options
If approved by the shareholders, the Plan provides that agreements will
be entered into with each outside director pursuant to which the Corporation
will grant such participant 1000 options
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in the Common Stock on each July 1st during the term of the Plan until the
participant either receives 10 such 1000 option grants or discontinues service
as an active director of the Corporation. The Plan also provides that a new
outside director first elected to the Board of Directors during the term of the
Plan will receive a grant of 1000 options effective as of the outside director's
date of election, which grant shall be included in the maximum of 10 grants
permitted under the Plan. For current outside directors, the first award
of options will be made on July 1, 1994. The exercise price for each option
shall be equal to 100% of the fair market value of the Common Stock on the
date of award. The closing market price of the Common Stock as reported on the
New York Stock Exchange Composite Transactions listing on March 15, 1994 was
$63.75 per share.
Options shall vest and become exercisable 12 months after the date of
award and shall expire 10 years after such date of award. Options that
expire, terminate or are forfeited and remain unexercised will, to the extent
permitted by Rule 16b-3 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and any interpretations of the Securities and Exchange
Commission Staff thereunder, be returned to the Plan and will be available for
future awards under the Plan.
In the event of a participant's i) death, ii) retirement from the Board
of Directors at the end of the calendar year in which he or she reaches age
72, with a minimum of 5 years of service as a director, iii) early retirement
from the Board of Directors by reason of disability after he or she has served
as a director for a minimum of 5 years, or iv) early retirement for a reason
other than disability but after he or she has attained age 65 and had at least
10 years of service as a director, the vesting of unvested options held by
such outside director automatically shall be accelerated to the date of death
or termination of service and all options held by the outside director shall
be and remain exercisable in accordance with their terms. If the participant
ceases to be a director under other circumstances, then all options, whether
vested or unvested, will terminate immediately. Any extension of the term of
an option beyond the date of termination of service as an outside director of
the Corporation shall be contingent on such conditions as the Committee, in
its sole discretion, may determine, including but not limited to the
requirement that the participant not perform services in any capacity for a
competitor of the Corporation or its affiliates, and such extension may not
extend beyond the original option term.
Option Exercise
Options may be exercised by the participant in accordance with the terms
of the related stock option agreement and paid for in cash, shares of Common
Stock (whether by delivery of previously owned shares of Common Stock or by
having the Corporation withhold a portion of the shares of Common Stock to be
received) having a fair market value at the time of exercise equal to the
exercise price, or in a combination thereof. During the life of a
participant, options will be exercisable only by the participant or, if
disabled, by such person's guardian or legal representative. In the event of
a participant's death prior to the expiration of the term of an option that
either has vested or vests by reason of such death, the participant's heirs or
legal representative may exercise the option.
Upon the exercise of options granted under the Plan by a participant,
shares of Common Stock either acquired for and held in the treasury of the
Corporation or authorized and unissued shares will be used, in whole or in
part, for the corresponding Common Stock distributions. Those shares that are
treasury shares are issued but not outstanding, and neither the treasury
shares nor the
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authorized but unissued shares are entitled to vote until distributed. After
their distribution pursuant to the Plan, these shares are added to the
outstanding shares of Common Stock entitled to vote but have a minimal dilutive
effect.
It is intended that shares of Common Stock distributed in connection with
options under the Plan will be registered under the Securities Act of 1933, as
amended (the "Securities Act"), by a registration statement on Form S-8 that
will be filed with the Securities and Exchange Commission promptly after
shareholder approval of the Plan is obtained and in any event prior to July 1,
1994. However, in the event the shares of Common Stock to be issued under the
Plan were not to be registered under the Securities Act, the terms of the Plan
provide that the Committee may place such conditions on the exercise of the
options as it deems necessary or desirable, in its discretion, to ensure
compliance with the requirements of the Securities Act and any other Federal
or state securities laws or regulations, including but not limited to the
inclusion of an appropriate legend on the certificates representing such
shares.
Change of Control
In the event of a change of control of the Corporation, as defined in the
Plan, all unvested and unexpired options will automatically become immediately
vested and exercisable for the period of their remaining terms without any
further action by the Committee.
Non-Assignability
Prior to the exercise of an option and distribution of the corresponding
share of Common Stock, no right or benefit under the Plan is subject to
anticipation, alienation, sale, assignment, pledge, encumbrance or charge
other than by will or the laws of descent and distribution, and no right or
benefit shall in any manner be liable for or subject to the debts, contracts,
liabilities or torts of the participant.
Amendment and Termination of the Plan
The Board may amend, suspend or terminate the Plan from time to time, but
amendments may not be made more than once every 6 months unless the amendment
is to bring the Plan into conformance with certain tax law changes, and no
such amendment, suspension or termination shall be effective without
shareholder approval if shareholder approval of such action would be required
in order to ensure the Plan, as changed, would continue to meet the
requirements of Rule 16b-3 promulgated under the Exchange Act. Except with the
agreement of a participant, no such amendment, suspension or termination of
the Plan will affect the rights of a participant under any award previously
granted and unexpired at the time of such action.
Adjustments
In the event of any change in the outstanding Common Stock of the
Corporation due to a stock dividend, recapitalization, merger, consolidation,
split-up, combination, exchange of shares or the like, the Committee will
adjust the maximum number of shares of Common Stock that may be issued under
the Plan and will provide for an equitable adjustment of any outstanding award
of options, or any shares issuable pursuant to outstanding options under the
Plan, so as to maintain the participant's proportionate interest.
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Certain Federal Income Tax Consequences
Set forth below is a discussion of certain Federal income tax
consequences with respect to options granted under the Plan. This discussion
is based on an analysis of the Internal Revenue Code of 1986, as amended and
currently in effect, existing laws, judicial decisions and administrative
rulings and regulations, and proposed regulations, all of which are subject to
change. In addition to being subject to the Federal income tax consequences
described below, an outside director may also be subject to foreign, state and
local income or other tax consequences in the jurisdiction in which he or she
works and/or resides.
Under present Federal income tax regulations, there will be no Federal
income tax consequences to either the Corporation or the participant upon the
grant of an option under the Plan. However, the participant generally will
realize ordinary income upon the exercise of an option in an amount equal to
the excess of the fair market value of the Common Stock acquired upon the
exercise of such option over the exercise price, and the Corporation will be
entitled to a corresponding deduction. The gain, if any, realized upon a
subsequent disposition of such Common Stock will constitute short- or
long-term capital gain, depending on the participant's holding period.
Shareholder Approval
The affirmative vote of the holders of a majority of the shares of Common
Stock present, or represented, and entitled to vote at the 1994 Annual Meeting
of Shareholders is required for approval of the Plan. Shareholder approval is
being sought for reasons related to Section 16 of the Exchange Act. If such
approval is obtained, subject to compliance with the limitations set forth in
regulations promulgated under Section 16, transactions with respect to options
granted under the Plan will be exempt from Section 16(b) of the Exchange Act.
Board of Directors' Recommendation
Your Board of Directors unanimously recommends a vote FOR approval of the
Corporation's Stock Option Plan for Outside Directors.
1994 SHAREHOLDER PROPOSALS
Item 3:
The Dominican Sisters of Adrian, Michigan, 1257 East Siena Heights Drive,
Adrian, Michigan 49221, the beneficial owners of 3000 shares of Common Stock
of the Corporation, together with two other shareholders (Catholic Healthcare
West, of San Francisco, California, and the Sisters of Charity of Saint
Vincent dePaul, of Halifax, Nova Scotia), have submitted the shareholder
proposal and supporting statement set forth below for inclusion in this Proxy
Statement and presentation at the Corporation's 1994 Annual Meeting of the
Shareholders. We are relying on Rule 14a-8(c)(11) of Regulation 14A of the
Securities and Exchange Commission in only including the proposal of the
Dominican Sisters of Adrian, Michigan in this Proxy Statement inasmuch as it
was the first of three identical shareholder proposals to be received by the
Corporation. The proposal is as follows:
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"AMP Incorporated - Inclusiveness on the Board of Directors
1993 - 1994
WHEREAS:
We believe that the Board of Directors of many publicly-owned corporations
have benefited from the perspective brought to their decision-making
process by their well-qualified Board members and senior executives of
both genders and various racial heritages;
AMP Incorporated currently has a distinguished Board of twelve Directors
all of whom are of the same gender and racial heritage;
AMP Incorporated has listed twelve officers in the 1992 Annual Report who
are all of the same gender;
The Board of AMP Incorporated has established a number of standing
committees, but NO Nominating Committee;
We believe that the Directors should take every reasonable step to be sure
that women and persons of various racial heritages are in the pool from
which Directors and senior managers are chosen.
The office of Federal Contract Compliance mandates that all companies
selected for Federal contracts must not discriminate on the basis of
gender or race;
THEREFORE, BE IT RESOLVED:
That shareholders recommend that the Board of Directors:
1. Publicly commit the company to a policy a greater diversity in senior
management and Board positions;
2. Report to shareholders a plan to implement this public commitment,
including time line expectations, and to periodically report progress
on this implementation;
3. Establish a standing Nominating Committee of the Board to assist in the
greater effort to review women and minority candidates to the Board
consonant with this public commitment.
Statement of Support
Racial and gender diversification among the work force and the purchasing
population has increased enormously. This diversification has more slowly
seeped into decision-making positions in large public corporations. AMP
Incorporated has not benefited as greatly from this movement as it could.
We ask those shareholders who agree that the judgments and perspectives
offered by a more inclusive Board and management signal this agreement
by voting YES on this recommendation to the Board of Directors."
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Your Board of Directors Unanimously Recommends a Vote AGAINST the
Resolution, for the following reasons:
Your Board of Directors shares an interest in a diversified, qualified
Board of Directors and management that can provide guidance and direction to
the Corporation in all of its varying, worldwide interests. However, we
encourage shareholders to vote against the resolution because of the efforts
we have already undertaken and the measures presently in place to further the
goals described in the resolution.
As a global company with operations in over 30 countries that are staffed
primarily with nationals, racial and gender diversity has already proven to be
a strength of the Corporation. Our management team includes not only
representatives from our global operations outside of the United States, but
also a minority and, as of September of 1993, a woman officer within the ranks
of our senior management staff for the U.S. operations.
We would like the Board of Directors to benefit by that same
inclusiveness. But in order to maintain and improve the Corporation's
position as a global company, the primary criteria for board member selection
must continue to be qualitative, focusing on practical experience and
functional (operational, technical, international and financial) skills.
Diversity provides an enhancement to this fundamental expertise. The
challenge is to develop a systematic process for identifying a more varied
pool of individuals who meet the criteria.
To this end, in April, 1993 the Board of Directors established a
nominating committee composed of three outside directors and two former CEO's
of the Corporation. The committee's charter includes a commitment to actively
seek candidates for nomination to the Board without regard for sex and race.
One of the efforts the committee has undertaken in furtherance of this
commitment is the development of an expanded list of highly qualified
candidates having diverse backgrounds and including women, minorities, and
persons associated with the European and Asian cultures in which the
Corporation has significant sales and operations.
The renewed efforts of the independent nominating committee have already
resulted in the election of the Honorable Barbara Hackman Franklin as the
thirteenth director of the Corporation. Her extensive public service under
the past five presidential administrations, including a term as U.S. Secretary
of Commerce in the Bush administration, gives her considerable experience in
international trade that will be particularly valuable in our growing emphasis
on globalization of our worldwide activities. This committee is continuing an
active search for candidates who have the operating and cultural diversity to
guide the Corporation's global business and its expansion plans into the next
decade.
We believe the foregoing actions are convincing evidence of your Board of
Directors' and the Corporation's commitment to a diversified, highly qualified
Board of Directors and management, and satisfy the requests contained in the
Adrian Dominican Sisters' shareholder resolution. Accordingly, for the
reasons expressed above,your Board recommends a vote against the resolution.
Item 4:
The Benedictine Sisters, 3120 W. Ashby, San Antonio, Texas 78228, the
beneficial owners of 235 shares of Common Stock of the Corporation, together
with two other shareholders (the
30
<PAGE>
Women's Division of the General Board of Global Ministries of the United
Methodist Church, of New York City, New York, and the Literary Society of St.
Catharine of Siena, of St. Catharine, Kentucky), have submitted the
shareholder proposal and supporting statement set forth below for inclusion in
this Proxy Statement and presentation at the Corporation's 1994 Annual Meeting
of Shareholders. We are relying on Rule 14a-8(c)(11) of Regulation 14A of the
Securities and Exchange Commission in only including the proposal of the
Benedictine Sisters in this Proxy Statement inasmuch as it was the first of
three identical shareholder proposals to be received by the Corporation. The
proposal is as follows:
"EQUAL EMPLOYMENT OPPORTUNITY/AFFIRMATIVE ACTION
REPORT
We believe there is a strong need for corporate commitment to equal
employment opportunity. We also believe a clear policy opposing all
forms of discrimination is a sign of a socially responsible corporation.
Since a substandard Equal Employment Opportunity record leaves a
company open to expensive legal action, poor employee moral and even
the loss of certain business, it is in the company's and shareholder's
interests to have information on our company's equal employment record
available. By publicizing our standards, we serve as an example to
companies with whom we do business;
We share the concerns of the 1991 United States Congressional Civil
Rights and Glass Ceiling Acts that "...additional remedies under Federal
law are needed to deter harassment and intentional discrimination in the
workplace... women and minorities remain underrepresented in management
and decision making positions in business." We support the statement,
"We continue to find that if the CEO is committed to ensuring diversity,
it can happen." as published in the U.S. Labor Department's report
"Pipelines of Progress".
We believe issues related to Equal Employment Opportunity and Affirmative
Action are important to shareholder value. Our goal is to encourage our
Board of Directors and Chief Executive Officer to improve our
corporation's Equal Employment record and that of their industry.
As a major employer we are in a position to take the lead in ensuring
that women and minority employees receive fair employment opportunities
and promotions. We believe a report containing the basic information
requested in this resolution keeps the issue high on management's agenda
and reaffirms our public commitment to Equal Employment Opportunity and
programs responsive to the concerns of women and minorities.
The report requested asks for information already gathered for the
purpose of complying with government regulations. The format of the
report requested is not the central question. Different companies use
different styles in telling their story to shareholders. Capital
Cities/American Broadcasting Company, Bristol-Myers and Travellers
produced a substantial magazine style report. Campbell Soup produced a
straightforward four page document.
RESOLVED: The shareholders request the Board to prepare a report at
reasonable cost, available to shareholders and employees reporting on the
following issues. This report, which may omit confidential information,
shall be available by September 1994.
1. A chart identifying employees according to their sex and race in each
of the nine major Equal Employment Opportunity Commission defined
job categories for 1991, 1992, 1993 listing either numbers or
percentages in each category.
31
<PAGE>
2. A summary description of any Affirmative Action policies and programs
to improve performances, including job categories where women and
minorities are underutilized.
3. A description of any policies and programs oriented specifically
toward increasing the number of managers, who are qualified females
and/or belong to minorities.
4. A general description of how our company publicizes our company's
affirmative action policies and programs to merchandise suppliers and
service providers.
5. A description of any policies and programs utilizing the purchase of
goods and services from minority- and/or female-owned business
enterprises."
Your Board of Directors Unanimously Recommends A Vote AGAINST the
Resolution, for the following reasons:
The Corporation is and always has been firmly committed to equal
employment opportunity. Both in our policies and our practices, we have
promoted fair and equal employment opportunities for all persons and we have
continually sought to improve our employment of women and minorities. The
diversity evident in our global operations that currently span over 30
countries and primarily involve the employment of nationals has already proven
to be a strength of the Corporation and has evidenced the value of this
commitment by the Corporation. While historically we have found it difficult
to locate significant numbers of women and minorities interested in the
engineering discipline, that has simply made our outreach efforts all the more
important. We are proud of these affirmative efforts and are happy to make a
report on such information available to any interested shareholder or
employee.
Accordingly, the Corporation hereby expresses its commitment to prepare a
report disclosing the information outlined in the resolution set forth above,
and to make this report available prior to year-end 1994 to any shareholder or
employee of the Corporation who requests a copy of the report. Such requests
should be directed to AMP Incorporated, Shareholder Services, P.O. Box 3608,
M.S. 176-42, Harrisburg, PA 17105-3608, telephone number (717) 780-4869.
Notwithstanding the Corporation's willingness to provide a report in the
nature of the report requested in this shareholder proposal, the Board of
Directors recommends a vote against the resolution. While the Corporation
welcomes open and constructive communications with its shareholders and other
stakeholders, we do not believe that the Annual Meeting is the proper forum
to effectively address complex social issues, and particularly those relating
to matters that are regulated and monitored, with varied emphasis in the
United States and other countries in which the Corporation has a presence, by
national and state regulatory agencies and commissions. If shareholders have
thoughts and concerns on such issues, we encourage you to address these
communications to J. E. Marley, Chairman of the Board of Directors.
GENERAL AND OTHER MATTERS
The Corporation knows of no matter that will be brought before the
meeting other than the matters expressly mentioned in the Notice of Annual
Meeting of Shareholders. However, if any further matters properly come before
the meeting or any of its adjournments, the person or persons voting the
proxies will vote them in accordance with their best judgment on such matters.
32
<PAGE>
The Corporation will bear the expense of preparing, printing, and mailing
this proxy material, as well as the cost of any required solicitation. In
addition, the Corporation has retained Georgeson & Company Inc. to aid in the
solicitation of proxies from brokers, banks and other nominees as well as
institutional holders, at a fee of $8,500 plus expenses. The Corporation may
also use regular employees, without additional compensation, to solicit
proxies by personal solicitation, telephone or otherwise.
You are urged to mark, sign and return your proxy promptly to make
certain your shares will be voted at the meeting. For your convenience, a
stamped self-addressed envelope is enclosed.
The Annual Report of the Corporation for the year 1993, including
financial statements, was mailed recently to shareholders. Such Annual Report
is not incorporated in this Proxy Statement by reference, and is not deemed a
part of the proxy soliciting material.
Upon the written request of any person whose proxy is solicited
hereunder, the Corporation will furnish without charge to such person a copy
of its annual report filed with the Securities and Exchange Commission on Form
10-K, including the financial statements and schedules thereto, for the
calendar year 1993. Such written request is to be directed to J. E. Marley,
Chairman of the Board of Directors, P.O. Box 3608, Harrisburg, Pennsylvania
17105-3608.
Dated: March 25 1994.
33
<PAGE>
(Recycled Symbol) Printed on Recycled Paper
<PAGE>
[front side of first proxy card]
PROXY
AMP INCORPORATED
The undersigned hereby appoints W. J. Hudson, J. E. Marley and D. F.
Henschel, and each of them, his or her proxy, with full power of substitution,
to vote all stock of the undersigned at the ANNUAL MEETING OF THE SHAREHOLDERS
OF THE CORPORATION TO BE HELD ON WEDNESDAY, APRIL 27, 1994, AT 10:30 A.M.,
LOCAL TIME, at the Sheraton Inn Harrisburg, Harrisburg, Pennsylvania, and at
any adjournment or adjournments thereof, hereby revoking any proxy previously
given and ratifying all that said proxy or proxies may do pursuant hereto.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
(Continued and to be signed on reverse side)
[example of reverse side of first proxy card]
__________________________________
| |
| |
| |
| (1) (2) |
| |
| |
| |
| (3) |
|__________________________________|
[part (1) information is as follows:]
_________ _________
Common D.R.S.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR ALL NOMINEES" IN ITEM 1 AND "FOR"
ITEM 2.
Item 1--Election of the following For all Withheld
Nominees as Directors: D.F. Nominees for all
Baker, J.J. Burdge, Nominees
W.E. Dearden, R.D. DeNunzio,
B.H. Franklin, J.M. Hixon, [ ] [ ]
W.J. Hudson, J.E. Marley,
H.A. McInnes, J.C. Morley,
W.F. Raab, B. Savidge and
P.G. Schloemer.
Withheld for the following only (Write the name of the
Nominee(s) in the space below)
- ------------------------------------------------------
Item 2--Proposal to approve the For Against Abstain
AMP Incorporated Stock
Option Plan for Outside [ ] [ ] [ ]
Directors.
[part (2) information is as follows:]
[X]Please mark your
votes like this
in black or blue
ink
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE
"AGAINST" BOTH ITEM 3 AND ITEM 4.
Item 3--Shareholder proposal For Against Abstain
relating to minority [ ] [ ] [ ]
and gender inclusiveness
in senior management and
on the Board of Directors.
Item 4--Shareholder proposal For Against Abstain
requesting an equal [ ] [ ] [ ]
employment opportunity/
affirmative action report.
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby acknowledges receipt of the Notice
of the Annual Meeting dated March 25, 1994.
The shares represented by this proxy will
be voted as directed by the shareholder.
If no direction is made and there is no
discretionary broker vote, the shares will
be voted as to each proposal in accordance
with the recommendations of your Board of
Directors. Abstentions are not counted
as votes cast with respect to Items 1, 3
and 4, but are counted as votes present and
entitled to vote for Item 2. Broker
non-votes have no effect on the vote on any
of the Items.
[part (3) information is as follows:]
Signature(s)___________________________Date____________
NOTE: Please date and sign exactly as name appears
hereon. Each joint owner should sign. When signing
as attorney, executor, trustee, guardian or corporate
officer, please give full title as such. Corporations
should indicate full corporate name and have a duly
authorized officer sign.
<PAGE>
[front side of second proxy card]
PROXY
AMP INCORPORATED
TO: The Vanguard Fiduciary Trust Company as Trustee under the Trust Agreement
for the AMP Incorporated Employee Savings and Thrift Plan-401(k).
The Trustee named above is hereby instructed to vote by proxy, in the form
solicited by the Board of Directors, all the shares or fractional shares of
Common Stock of AMP Incorporated that are credited to the undersigned's
account as of the latest available processing date on or before March 11,
1994 at the ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON WEDNESDAY, APRIL 27,
1994, AT 10:30 A.M., LOCAL TIME, at the Sheraton Inn Harrisburg, Harrisburg,
Pennsylvania, and any adjournment or adjournments thereof, on the items set
forth on the reverse hereof, as described in the accompanying Proxy
Statement, and upon such other business as may properly come before the
meeting.
Voting rights will be exercised by the Trustee as directed on the
reverse, provided instructions are timely received by the Trustee. Under the
Employee Savings and Thrift Plan, the Trustee will vote those shares as to
which no timely instructions are received in its sole and absolute
discretion. Abstentions are not counted as votes cast with respect to Items
1, 3 and 4, but are counted as votes present and entitled to vote for Item 2.
(Continued and to be signed on reverse side)
<PAGE>
[example of reverse side of second proxy card]
__________________________________
| |
| |
| |
| (1) (2) |
| |
| |
| |
| (3) |
|__________________________________|
[part (1) information is as follows:]
____________
SHARES
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR ALL NOMINEES" IN ITEM 1 AND "FOR"
ITEM 2.
Item 1--Election of the following For all Withheld
Nominees as Directors: D.F. Nominees for all
Baker, J.J. Burdge, Nominees
W.E. Dearden, R.D. DeNunzio,
B.H. Franklin, J.M. Hixon, [ ] [ ]
W.J. Hudson, J.E. Marley,
H.A. McInnes, J.C. Morley,
W.F. Raab, B. Savidge and
P.G. Schloemer.
Withheld for the following only (Write the name of the
Nominee(s) in the space below)
- -------------------------------------------------------
Item 2--Proposal to approve the For Against Abstain
AMP Incorporated Stock
Option Plan for Outside [ ] [ ] [ ]
Directors.
[part (2) information is as follows:]
[X]Please mark your
votes like this
in black or blue
ink
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE
"AGAINST" BOTH ITEM 3 AND ITEM 4.
Item 3--Shareholder proposal For Against Abstain
relating to minority [ ] [ ] [ ]
and gender inclusiveness
in senior management and
on the Board of Directors.
Item 4--Shareholder proposal For Against Abstain
requesting an equal [ ] [ ] [ ]
employment opportunity/
affirmative action report.
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby acknowledges receipt of the Notice
of the Annual Meeting dated March 25, 1994.
The shares represented by this voting
instruction card are those held under the
AMP Incorporated Employee Savings and
Thrift Plan.
[part (3) information is as follows:]
Signature(s)___________________________Date____________
NOTE: Please mark, date and sign exactly as your name appears
hereon and return in the enclosed envelope.
<PAGE>
[Annual Meeting reservation request form]
AMP Incorporated
Harrisburg, Pennsylvania
If you plan to attend the Shareholders' meeting on April 27, 1994,
please fill out and return the attached reservation form so that an
admission card may be sent to you.
By indicating your plans in advance, we will be better able to
complete the necessary arrangements. Only shareholders bearing an
admission card will be permitted admittance to the Annual Meeting.
Your cooperation is appreciated.
D. F. Henschel
Corporate Secretary
(Detach here and return lower portion)
AMP Incorporated
Annual Meeting Reservation
I
We ...............................................................
Please print or type name(s)
Address..........................................(MS ......-......)
Please print or type (If an employee, indicate business Mail Stop)
........................................... ZIP...................
plan to attend the Annual Meeting of Shareholders to be held in the
Sheraton Inn Harrisburg, Parlours B, C, D and E, 800 E. Park Drive,
Harrisburg, Pennsylvania, Wednesday, April 27, 1994, at 10:30 A.M.
Please send ........... admission card(s).
<PAGE>
[advance reservation ticket]
ADVANCE RESERVATION
The shareholder bearing this ticket is entitled
to attend the Annual Meeting of Shareholders of
AMP Incorporated
DATE:
Wednesday, April 27, 1994
TIME:
10:30 a.m.
LOCATION:
Sheraton Inn Harrisburg
Parlours B, C, D, and E
800 E. Park Drive
Harrisburg, Pennsylvania
<PAGE>
APPENDIX
1994 Notice of Annual Meeting and Proxy Statement
ELECTION OF DIRECTORS. Page 2 includes a portrait photograph of Dexter
F. Baker, a director and nominee for director. Page 3 includes portrait
photographs of the following directors and nominees for director: Jeffrey
J. Burdge, William E. Dearden, Ralph D. DeNunzio, and Barbara Hackman Franklin.
Page 4 includes portrait photographs of the following directors and nominees
for director: Joseph M. Hixon, III, William J. Hudson, Jr., James E. Marley,
and Harold A. McInnes. Page 5 includes portrait photographs of the following
directors and nominees for director: John C. Morley, Walter F. Raab,
Benjamin Savidge, and Paul G. Schloemer.
