SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(mark one)
[XX] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1995
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from _________ to _________
********************************
Commission File No. 1-4235
AMP INCORPORATED
a Pennsylvania corporation
(Exact name of registrant as specified in charter,
and state of incorporation)
********************************
Employer Identification No. 23-0332575
Harrisburg, Pennsylvania 17105-3608
(Address of principal executive offices of registrant)
(717) 564-0100
(Registrant's telephone number, including area code)
********************************
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days. YES [X]. NO [ ].
The number of shares of AMP Common Stock (without Par Value)
outstanding at May 10, 1995 was 209,689,805.
AMP Incorporated & Subsidiaries
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The Consolidated Statements of Income and the Consolidated
Statements of Cash Flows for the three months ended March 31, 1995 and
1994, and the Consolidated Balance Sheets at March 31, 1995 and
December 31, 1994, are presented below. See the notes to these
condensed consolidated financial statements at the end thereof.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(dollars in thousands,
except per share data)
For the Three Months
Ended March 31,
1995 1994
----------- -----------
Net Sales.......................... $ 1,202,800 $ 906,123
Cost of Sales...................... 812,716 603,967
----------- -----------
Gross income................... 390,084 302,156
Selling, General and
Administrative Expenses........... 200,484 162,173
----------- -----------
Income from operations......... 189,600 139,983
Interest Expense................... (6,764) (4,247)
Other Deductions, net.............. (14,332) (6,516)
----------- -----------
Income before income taxes..... 168,504 129,220
Income Taxes....................... 63,700 49,670
----------- -----------
Net Income......................... $ 104,804 $ 79,550
=========== ===========
*Per Share - Net income............ $.50 $.38
Cash dividends.......... $.23 $.21
*Weighted average number of shares.. 209,653,300 209,832,704
=========== ===========
*Per share data and weighted average shares have been retroactively
restated to reflect the 2-for-1 stock split on March 2, 1995.
AMP Incorporated & Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Condensed and Unaudited)
(dollars in thousands)
For the Three Months
Ended March 31,
1995 1994
--------- ---------
Cash and Cash
Equivalents at January 1.................. $ 239,937 $ 257,678
Operating Activities:
Net income................................ 104,804 79,550
Noncash adjustments -
Depreciation and amortization........... 77,697 67,900
Changes in operating assets
and liabilities........................ (60,844) (57,739)
Other, net.............................. 10,924 (7,779)
--------- ---------
Cash provided by operating
activities........................... 132,581 81,932
--------- ---------
Investing Activities:
Additions to property, plant
and equipment............................ (139,380) (88,104)
Other, net................................ (2,481) 9,844
--------- ---------
Cash used for investing
activities........................... (141,861) (78,260)
--------- ---------
Financing Activities:
Changes in short-term debt................ 49,630 (33,473)
Additions to long-term debt............... 10,466 37,974
Reductions of long-term debt.............. (13,564) (359)
Purchases of treasury stock............... (112) --
Dividends paid............................ (48,220) (44,065)
--------- ---------
Cash used for financing
activities........................... (1,800) (39,923)
--------- ----------
Effect of Exchange Rate Changes
on Cash.................................... 6,096 4,239
--------- ----------
Cash and Cash Equivalents at March 31....... $ 234,953 $ 225,666
========= ==========
Changes in Operating Assets and Liabilities:
Receivables............................... $ (52,699) $ (98,250)
Inventories............................... (16,608) (7,140)
Other current assets...................... (18,937) (27,366)
Payables, trade and other................. (16,585) 35,226
Accrued payrolls and benefits............. 24,251 9,735
Other accrued liabilities................. 19,734 30,056
--------- ---------
$ (60,844) $ (57,739)
========= =========
Income tax payments......................... $ 51,370 $ 30,679
Interest paid during the periods was approximately equal to amounts
charged to expense.
AMP Incorporated & Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Condensed)
(dollars in thousands)
March 31, December 31,
1995 1994
----------- -----------
ASSETS (unaudited)
Current Assets:
Cash and cash equivalents.......... $ 234,953 $ 239,937
Securities available for sale...... 144,931 155,458
Receivables........................ 953,707 838,389
Inventories---
Finished goods and work in
process........................ 361,963 335,028
Purchased and manufactured parts. 195,695 180,561
Raw materials.................... 63,908 65,537
----------- -----------
Total inventories.............. 621,566 581,126
Other current assets............... 227,962 196,913
----------- -----------
Total current assets........... 2,183,119 2,011,823
----------- -----------
Property, Plant and Equipment........ 3,698,084 3,451,442
Less - Accumulated depreciation.... 2,114,255 1,980,249
----------- -----------
Property, plant and equipment,
net........................... 1,583,829 1,471,193
----------- -----------
Investments and Other Assets......... 291,011 287,898
----------- -----------
TOTAL ASSETS......................... $ 4,057,959 $ 3,770,914
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term debt.................... $ 237,045 $ 175,820
Payables, trade and other.......... 424,309 388,979
Accrued liabilities................ 489,408 446,549
----------- -----------
Total current liabilities........ 1,150,762 1,011,348
Long-Term Debt....................... 232,686 211,244
Other Liabilities and
Deferred Credits................... 229,684 213,907
----------- -----------
Total liabilities................ 1,613,132 1,436,499
Shareholders' Equity................. 2,444,827 2,334,415
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY.............................. $ 4,057,959 $ 3,770,914
=========== ===========
AMP Incorporated & Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(March 31, 1995, Unaudited)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. It is
suggested that these condensed financial statements be read in
conjunction with the financial statements and the notes thereto
included in the Company's latest annual report and Form 10-K.
The information furnished reflects all adjustments which are, in
the opinion of management, necessary for a fair statement of the
results for the interim periods.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FIRST QUARTER 1995
HIGHLIGHTS
SALES Record $1.20 billion; up 33% from $906 million in first quarter
1994, up 10% from $1.10 billion in fourth quarter 1994
EARNINGS Record 50 cents/share; up 32% from 38 cents/share in first
quarter 1994 and 4% from 48 cents/share in fourth quarter 1994
BOOKINGS Record $1.30 billion, up 32% from $985 million in first
quarter 1994 and 19% from $1.09 billion in fourth quarter 1994
ORDER BACKLOG Up $104 million during quarter to record $729 million
EMPLOYMENT Up 1,100 during quarter to 31,500
CAPITAL EXPENDITURES $139 million in first quarter; over $550
million expected for year
DIVIDEND ACTION/STOCK SPLIT
On Wednesday, April 26, 1995, the Board of Directors declared a
regular quarterly dividend of 23 cents per share, payable June 1, 1995
to holders of record May 8, 1995. The current indicated annual rate of
92 cents per share is up from 84 cents in 1994 and 80 cents in 1993 -_
and is the 42nd consecutive annual increase. Pursuant to a two-for-one
stock split on March 2, 1995, one additional share was distributed for
each share held on the February 6, 1995 record date.
PRODUCT EXPANSION
AMP is now far more than just the world's greatest connector company.
Our mission is to steadily evolve from being the leading supplier of
electrical/electronic connectors (still nearly 90% of sales) into a
global producer of total interconnection systems, value-added
assemblies, and related electrical/electronic components. Through new
product development, acquisitions, and strategic alliances we have
broadened in recent years into cables, cable assemblies, panel
assemblies, printed circuit boards, networking/premises wiring units,
PCMCIA cards, opto-electronic devices, sensors, and wireless systems
components and assemblies. Soon to be introduced will be next-
generation ATM (Asynchronous Transfer Mode) telecommunications
switching systems. The common thread throughout is "connectivity" -
from simple terminals crimped on the end of a wire to sophisticated
connection-intensive assemblies and units.
Sockets for Pentium(TM), Alpha and other new semiconductor
devices; MICTOR high-density board-to-board connector; AMP-AKZO
printed circuit board; piezoelectric sensor for accelerometers; PCMCIA
card for computer add-on capabilities; and computer cable assembly.
AMP MINIWEDGE connectors are part of a growing family of
electrical power line connections.
ANNUAL MEETING REPORT
The AMP Incorporated Annual Meeting was held April 26, 1995, at 10:30
a.m. at the M. C. Benton, Jr. Convention and Civic Center, Winston-
Salem, North Carolina.
FORMAL BUSINESS
Chairman James E. Marley stated that 84% of the stock was represented
in person or by proxy.
The following Directors were elected:
D.F. Baker W.J. Hudson W.F. Raab
R.D. DeNunzio J.E. Marley P.G. Schloemer
B.H. Franklin H.A. McInnes T. Shiina
J.M. Hixon J.C. Morley
Each of the directors received over 99% of the votes cast. The
proposals to approve the revised Management Incentive Plan and to
approve the 1993 Long-Term Equity Incentive Plan as amended were
passed by over 95% of the votes cast and 89% of the shareholders
entitled to vote and either present in person or represented by a
proxy, respectively.
The shareholder proposal relating to minority and gender
inclusiveness in senior management and on the Board of Directors was
defeated, having received less than 7% of the votes cast.
NEWS RELEASE
A news release on current results and outlook was made Wednesday,
April 26, 1995:
SALES AND EARNINGS
Reflecting the good growth in most of the industrialized world and in
the markets we serve, and also the weaker U.S. dollar, sales and
earnings set new quarterly highs well ahead of year-earlier and prior
quarter levels. First quarter sales of $1.20 billion and earnings of
50 cents per share were up 33% and 32% respectively from $906 million
and 38 cents per share a year ago, and up 10% and 4% from $1.10
billion and 48 cents in the fourth quarter 1994. This was better than
we expected when we began the quarter, but closely in line with
current analyst expectations. The weakening of the U.S. dollar added
$63 million to sales from the year-earlier period and $9 million from
the fourth quarter. Exchange rates staying at current levels the rest
of this year would add $200 million to sales and several cents to
earnings.
U.S. sales (40% of the worldwide total) were up 16% - similar to the
15% growth rate for all of 1994. Sales continue to be strongest in the
automotive, communications equipment, and industrial/commercial
electronics markets. International sales were up 34% in local
currencies and 46% in U.S. dollars.
European sales (35% of the worldwide total) were up 36% in local
currencies and 53% in U.S. dollars - much better than the 16% local
currency and 17% dollar growth rates in all of 1994. Strongest country
growth was in Germany, Great Britain, and Spain; strongest markets
were automotive, communications, and consumer goods. 1995 results
include the results of SIMEL and ARA acquired in December 1994, which
will add about 5% to our European sales this year.
Asia/Pacific sales (21% of the total) grew 27% in local currencies
and 40% in U.S. dollars - much better than the 11% local currency and
18% U.S. dollar growth rates for all of 1994. Strongest country growth
was in Hong Kong, Korea, and Taiwan; strongest markets were utilities,
networking, and consumer electronics. In contrast to the slow recovery
of the Japanese economy, our Japanese sales (over half of regional
sales) grew 17% in local currency and 33% in U.S. dollars compared to
the year-earlier period.
Sales in the Americas outside the U.S. were up 34%, compared to 29%
for all of 1994. The recession and weaker peso in Mexico did not have
a significant effect on our regional performance.
Worldwide profit margins (15.8% operating, 14.0% pretax, 8.7% after-
tax) held fairly steady with the first quarter of 1994 (15.4%, 14.3%,
8.8%) and for all of 1994 (16.1%, 14.8%, 9.2%). The current tax rate
of 37.8% is similar to the year-earlier 38.4% and 37.8% for all of
1994. Return on shareholders' equity improved to 17.5% from 15.2% in
first quarter 1994 and 16.8% for all of 1994. Other Deductions, net,
was higher than expected primarily because of higher than usual legal
expenses.
OUTLOOK
We believe the outlook is good for continued AMP growth during the
rest of this year. The significant increase in the order backlog
should lead to record sales again in the second quarter _ which should
permit further earnings growth. Our assumptions are that we are in a
period of broadening, sustainable economic growth throughout the
world, and that the electrical/electronic markets we serve have
excellent prospects of continuing to grow two to three times GDP
growth in most countries. The only sign of slowing we've seen is in
the interest-sensitive, housing-related U.S. appliance market, which
looks flat this year after modest annual growth for several years.
However, we do not believe this is a forerunner of a broad cyclical
downturn and recession, but rather of a more modest, sustainable
growth rate ahead for the U.S. economy. We still expect our U.S. sales
growth this year to be similar to last year's 15%. Worldwide we think
that if present economic trends and currency exchange rate levels
continue, our sales growth rate could be better than last year when
sales rose 17% to $4.0 billion.
We are just past the mid-point of the decade of the 1990s. During the
first half, while experiencing recessions in the U.S., Europe, and
Japan, we continued to build our long-term growth capabilities. As the
decade began, we launched our Journey to Excellence to accelerate our
productivity, quality and service improvement efforts, and our formal
product/market diversification program, and intensified our
acquisition/strategic alliance activities. We continued to make timely
entry into new geographic markets each year, increase capital
expenditures, and modernize and expand facilities. We also maintained
spending on research, development, and engineering at 11-12% of sales
- - and our position as one of the top 25 U.S. patent holders.
So far during the 1990s we have:
- - Increased sales from $2.8 billion in 1989 to about $5 billion
expected this year
- - Increased earnings from $1.32 per share in 1989 to over $2.00
expected this year. (In 1994 earnings rose 24% to $1.76 per share.)
- - Increased capital spending from $252 million in 1989 to over $550
million expected this year
- - Increased RD&E spending from $333 million in 1989 to over $525
million expected in 1995
- - Formed subsidiaries in ten more countries, and
- - Significantly improved quality, deliveries, customer approval
ratings, sales per employee, and sales per sq. ft.
Our goal is to grow better than 1 1/2 times the 6-9% annual growth
rate expected for the connector industry - to reach or exceed $10
billion sales early in the next century - while restoring profit
margins and return on shareholders' equity to earlier levels (18%
pretax, 20% ROE). With the foundation we've built in recent years, we
believe the prospects are good for achieving our goals assuming
favorable business conditions. We continue to gain share in our core
business of connection devices (nearly 90% of sales, 20% market share
in a $22 billion market); while making good progress in addressing
new, large, fast-growing markets - over $60 billion - in cables, cable
assemblies, printed circuit boards, panel assemblies,
networking/premises wiring units and assemblies, sensors, "smart"
cards, and ATM switching systems.
EXPANSION
Capital expenditures have risen from $330 million in 1993 and $457
million last year to over $550 million expected this year as we
steadily add capabilities for producing new products (currently 200
new part numbers/day; 50,000/year) and add capacity for the good
growth expected in the next few years. With expansion planned in over
a dozen countries, we expect to add more space than last year when
floor area rose 700,000 sq. ft. to 10.8 million sq. ft. We entered our
36th country outside the U.S. with the recent formation of a
subsidiary in Slovenia.
MERGER WITH M/A-COM
On March 10, 1995, we announced a proposed merger of M/A-COM, Inc.
into AMP by offering .28 AMP shares for each M/A-COM share. About 8
million AMP shares will be issued. Based in Lowell, MA, M/A-COM is a
leading producer of RF, microwave and millimeter wave components
(including connectors) for the wireless communications market. 1994
sales were $342 million; income from continuing operations $3.4
million. A vote by M/A-COM shareholders is expected in mid-June. The
merger, which is not expected to significantly affect earnings this
year, will give AMP much greater participation in a fast growing
market and give M/A-COM products much better market exposure
throughout the world. The two companies serve many of the same
customers. When the merger is completed, M/A-COM results will be
included in our worldwide results.
- ----------------------------------------------------------------------------
Comments at the annual meeting included a review by President and CEO
William J. Hudson of our accelerated efforts to transform AMP into a
more sharply focused, globally integrated organization pursuing a
clearly understood strategy of core business growth accompanied by
aggressive product and market diversification. Chairman James E.
Marley reviewed our broadening activities in human resources -
education, training, managerial and executive development, and
organizational planning. Jay Hassan, Vice President-Global
Interconnect Systems Business, reviewed our product/market
diversification efforts - particularly our growing involvement in the
rapidly evolving "Information Superhighway."
FORTUNE 500 RANKINGS
(based on 1994 results)
Overall** Electronics*
Sales 285 12
Net Income 173 9
Net Income as % of Sales (9.2%) 100 12
Net Income as % of Assets (9.8%) 45 10
Net Income as % of Equity (15.8%) 187 21
10-Year Earnings Per Share
Growth Rate (6.5%) 173 17
*39 Companies
**Now includes both industrial and service companies
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
The Annual Meeting of Shareholders of AMP Incorporated was held on
Wednesday, April 26, 1995 beginning at 10:30 a.m., local time, at the
M.C. Benton, Jr. Convention and Civic Center, Winston-Salem, North
Carolina. As of the record date (March 10, 1995) for the Annual
Meeting, 209,679,077 shares of Common Stock were outstanding and
entitled to vote. 176,137,772 shares, representing over 84% of the
outstanding Common Stock eligible to vote, were represented at the
Annual Meeting either in person or by proxy.
* All of the directors of the Company, eleven in number, were
elected at the Annual Meeting, each by an affirmative vote of
at least 99% of the votes cast. The results of the vote
tabulation for each director are as follows:
Director Votes For Votes Withheld
-------- --------- --------------
Dexter F. Baker 175,319,160 818,612
Ralph D. DeNunzio 175,404,330 733,442
Barbara H. Franklin 175,439,242 698,530
Joseph M. Hixon III 175,461,713 676,059
William J. Hudson, Jr. 175,471,319 666,453
James E. Marley 175,463,469 674,303
Harold A. McInnes 175,331,280 806,492
John C. Morley 175,457,415 680,357
Walter F. Raab 175,250,675 887,097
Paul G. Schloemer 175,329,512 808,260
Takeo Shiina 175,436,428 701,344
* The proposal for shareholder approval of the Company's revised
AMP Management Incentive Plan, under which the Company will annually
reward the Company's officers and key senior executives for the
achievement of corporate-wide and business unit-specific financial
performance targets pre-established by the Compensation and Management
Development Committee, together with individual nonfinancial
performance objectives determined in advance for each participant, was
passed by an affirmative vote of over 95% of the votes cast. On this
matter, which was deemed a routine proposal under the rules of the New
York Stock Exchange, 166,050,540 votes were for the proposal,
7,722,610 votes were against, and 3,364,622 votes abstained.
Abstentions and broker non-votes were not counted as votes cast.
* The proposal for shareholder approval of the Company's AMP
Incorporated 1993 Long-Term Equity Incentive Plan as amended, under
which the Company can award multiple year performance-based restricted
stock in addition to the Company's historical Stock Bonus Units,
Supplemental Cash Bonuses, and Stock Options to attract, retain and
motivate the Company's key employees, was passed by an affirmative
vote of just over 89% of the shares of Common Stock entitled to vote
and either present in person or represented by proxy. On this matter,
which was deemed a routine proposal under the rules of the New York
Stock Exchange, 156,928,551 votes were for the proposal, 17,043,631
votes were against, and 2,165,590 votes abstained. Abstentions were
counted in determining the total number of shares present in person or
represented by proxy and entitled to vote.
* The shareholder proposal submitted by The Dominican Sisters of
Adrian, Michigan and seeking action by the Company's Board of
Directors to i) publicly commit the Company to a policy of greater
diversity in senior management and Board positions; ii) develop a plan
to effect such diversity, including time line expectations, and
periodically report on progress in the implementation of the plan; and
iii) establish a Nominating Committee to further the first two
objectives, did not pass, receiving only 10,562,829 votes, or less
than 7%, of the votes cast. On this matter, which was deemed non-
routine under the rules of the New York Stock Exchange, 140,983,260
votes were against the proposal, 13,037,709 votes abstained, and
11,553,974 votes were broker non-votes. Abstentions and broker non-
votes were not counted as votes cast.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits --
10.A - Amendments dated March 1, 1995 to executive life
insurance agreements in the form dated October, 1990
10.B - Executive split-dollar life insurance agreements in
the form dated January, 1995
10.C - AMP Incorporated Pension Restoration Plan (January 1,
1995 Restatement), a supplemental employee retirement plan
10.D - AMP Incorporated Deferred Compensation Plan effective
January 1, 1995 for selected management and highly compensated
employees
27 - Financial Data Schedule
(B) Reports on Form 8-K --
A Current Report on Form 8-K dated January 25, 1995 was
filed by the Company during the quarter ended March 31, 1995. In Item
5 of such report it was disclosed that the Board of Directors had
declared a two-for-one split of the Company's Common Stock without par
value for shares issued as of the close of business on February 6,
1995. The report indicated that certificates representing one
additional share for each share of Common Stock issued as of said date
would be distributed to shareholders on or about March 1, 1995. The
report also disclosed that, as permitted under Section 1914(c)(3)(ii)
of the Pennsylvania Business Corporation Law of 1988, as amended, the
Board of Directors on its own action increased the number of
authorized shares of Common Stock from 350 million to 700 million, in
proportion to the 2-for-1 stock split.
A Current Report on Form 8-K dated March 10, 1995 was also
filed by the Company during the quarter ended March 31, 1995. In Item 5 of
such report it was disclosed that the Company and M/A-Com, Inc., a
Massachusetts corporation, had jointly announced in a press release
that they had entered into an Agreement and Plan of Merger pursuant to
which a wholly-owned subsidiary of the Company will, subject to the
satisfaction of certain conditions, merge with and into M/A-Com, Inc.,
with M/A-Com, Inc. surviving as a wholly-owned subsidiary of the
Company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Date: May 12, 1995 AMP INCORPORATED
(Registrant)
By:
__________________________________
R. Ripp
Vice President and
Chief Financial Officer
By:
__________________________________
David C. Cornelius
Controller
EXHIBIT INDEX
-------------
Exhibit
Number Description
------- -----------
10.A - Amendments dated March 1, 1995 to executive life insurance
agreements in the form dated October, 1990
10.B - Executive split-dollar life insurance agreements in the
form dated January, 1995
10.C - AMP Incorporated Pension Restoration Plan (January 1, 1995
Restatement), a supplemental employee retirement plan
10.D - AMP Incorporated Deferred Compensation Plan effective
January 1, 1995 for selected management and highly
compensated employees
27 - Financial Data Schedule
EX- 10.A
--------
AMP Incorporated Split-Dollar Life Insurance Agreement
First Amendment
Amendment Dated & Effective March 1, 1995
Whereas AMP Incorporated (hereinafter, the "Corporation") and the
undersigned Employee entered into a Split-Dollar Life Insurance
Agreement (the "Agreement") originally effective October 1, 1990 for
the purpose of assisting the Employee with a personal life insurance
program in recognition of the Employee's contributions to the business
success of the Corporation and also as an inducement to the Employee's
continued employment;
Whereas Section 6.2 of the Agreement allows that the original
Agreement may be amended only by express written agreement signed by
both the Employee and a duly authorized representative of the
Corporation;
Whereas the Corporation desires to amend the Agreement in the
following manner with the agreement of the Employee;
Now, Therefore, in consideration of the foregoing, the Employee and
the Corporation agree as follows, effective March 1, 1995:
1. Section 1.2 is hereby deleted in its entirety and a new Section 1.2
substituted therefore to read as follows:
" 1.2 Plan Death Benefits. The Employee's death benefit under the
Plan shall be the amount listed in Exhibit E, a copy of which is
attached."
2. Article V, Rights Upon Termination of Agreement or Surrender of
Policy, is amended by adding at the end thereof a new Section 5.4 to
read in its entirety as follows:
"5.4 Rights Upon a Change in Control. Notwithstanding any other
provision of this Agreement to the contrary, upon a "Change in
Control," as hereinafter defined, this Agreement may not be
terminated (except by mutual consent) by reason of the termination
of the Employee's employment with the Corporation before the later
of (i) the Policy anniversary date next following the Employee's
65th birthday, or (ii) the expiration of fifteen (15) Policy years
from the date of the Policy, unless the Parties mutually consent to
the continuation of this Agreement at that time. For purposes of
this Agreement, a "Change in Control" shall be deemed to have
occurred if:
1. The acquisition of beneficial ownership (other than from the
Corporation) by any person, entity or "group," within the meaning
of Section 13 (d)(3) or Section 14 (d)(2) of the Securities
Exchange Act of 1934 (the "Exchange Act"), excluding, for this
purpose, the Corporation or its subsidiaries, or any employee
benefit plan of the Corporation or its subsidiaries that acquires
beneficial ownership of voting securities of the Corporation
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act), of 30% or more of either the then outstanding shares of
common stock or the combined voting power of the Corporation's
then outstanding voting securities entitled to vote generally in
the election of directors; or
2. A change in the persons constituting the Board as its exists at
the date hereof (the "Incumbent Board") such that the directors of
the Incumbent Board no longer constitute a majority of the Board;
provided that any person becoming a director subsequent to the
date hereof whose election, or nomination for election, by the
Corporation's shareholders was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board
(other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the
Directors of the Corporation, as such terms are used in Rule 14a-
11 of Regulation 14A promulgated under the Exchange Act) shall be,
for purposes of this agreement, considered as though such person
were a member of the Incumbent Board; or
3. Approval by the stockholders of the Corporation of a
reorganization, merger, consolidation in each case with respect to
which persons who were the stockholders of the Corporation
immediately prior to such reorganization, merger or consolidation
do not, immediately thereafter, own more than 50% of the combined
voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated corporation's
then outstanding voting securities, or a liquidation or
dissolution of the Corporation or of the sale of all or
substantially all of the assets of the Corporation.
In Witness Whereof, the Employee and the Corporation agree to the
above Amendment with their signatures and an acknowledgment by a witness:
Executed, this _____ day of _______, 1995.
____________________________ ____________________________
Witness for Employee Signature Employee Signature
____________________________ ____________________________
Witness for Corporate Signature Authorized Corporate Signature
____________________________
Corporate Title
EX-10.B
-------
AMP INCORPORATED SPLIT-DOLLAR
LIFE INSURANCE AGREEMENT
THIS AGREEMENT, made as of this 1st day of January 1995, by and
between AMP Incorporated, a Pennsylvania corporation having its
principal place of business in Harrisburg, Pennsylvania (hereinafter,
the "Corporation"), and [name] (hereinafter, the "Employee" or the
"Owner"),
WITNESSETH:
WHEREAS, the Employee is an active elected or divisional officer
of the Corporation;
WHEREAS, the Corporation wishes to assist the Employee with a
personal life insurance program in recognition of the Employee's
contributions to the business success of the Corporation and also as an
inducement to the Employee's continued employment;
WHEREAS, contemporaneously with the execution of this Agreement
the Owner will acquire an insurance policy on the Employee's life
(hereinafter, the "Policy"), a copy of which is attached hereto as
Exhibit A and, along with any future supplementary contracts, riders,
or endorsements issued in connection therewith, made a part hereof; and
WHEREAS, the Owner and the Corporation wish to make the Policy
subject to a split-dollar payment arrangement pursuant to the terms and
conditions of this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants hereinafter set forth, the Owner and the Corporation agree as
follows:
ARTICLE 1
SPLIT-DOLLAR PLAN
1.1 Coverage of Plan. Any individual who is designated by the
Corporation and who is an elected or divisional officer (hereinafter,
an "Officer") of the Corporation as of January 1, 1995, or becomes an
Officer thereafter is eligible, subject to the Corporation's approval,
to become a covered Employee for purposes of the AMP Incorporated
Split-Dollar Life Insurance Plan (hereinafter, the "Plan"). In order
to become a covered Employee, an eligible Officer must be insurable,
must enter into this form of Split-Dollar Life Insurance Agreement with
the Corporation, and must execute the collateral assignment agreement
and the waiver referred to in Article 2.2, below. Initial enrollments
in the Plan and the related Agreements shall become effective as of
January 1, 1995, or as soon thereafter as administratively practicable.
New enrollments in the Plan and the related Agreements shall become
effective as of the first January 1 following the date on which an
individual first becomes eligible, or as soon thereafter as
administratively practicable. An Employee's coverage under the Plan
shall cease if either the Employee's employment with the Corporation
terminates or the Employee's service as an Officer of the Corporation
terminates prior to the date of his or her early or normal retirement,
whichever is applicable, under the AMP Incorporated Pension Plan,
unless such termination of employment or cessation of service as an
Officer occurs on account of a disability that entitles the Employee to
benefits under the AMP Incorporated Long Term Disability Plan. For
purposes of the foregoing sentence, employment with a subsidiary of the
Corporation shall be treated as employment with the Corporation and
service as an officer of a subsidiary of the Corporation shall be
treated as service as an Officer of the Corporation.
1.2 Plan Death Benefits. An active Employee shall be eligible
under the Plan for a death benefit, payable to his designated
beneficiary, in an amount determined based on the following schedule;
subject, however, to the Employee's initial and continuing
insurability:
For 1995 and 1996, the greater of:
A) Two times the Employee's Base Annual Compensation or the
following schedule:
B) Base Annual Compensation Death Benefit
$150,000 or less $ 300,000
greater than $150,000 but not greater than $200,000 $ 400,000
greater than $200,000 but not greater than $250,000 $ 500,000
greater than $250,000 but not greater than $300,000 $ 600,000
greater than $300,000 but not greater than $375,000 $ 750,000
greater than $375,000 $1,000,000
C) Less the Death Benefit, if any, stated in the First Amendment,
dated and effective March 1, 1995, to the separate AMP Incorporated
Split-Dollar Life Insurance Agreement relating to the policies issued
by the Connecticut General Life Insurance Company, Hartford,
Connecticut.
For 1997 and thereafter:
D) Two times the Employee's Base Annual Compensation but not less
than the initial Death Benefit under A and B above.
E) Less the Death Benefit, if any, stated in the First Amendment,
dated and effective March 1, 1995, to the separate AMP Incorporated
Split-Dollar Life Insurance Agreement relating to the policies issued
by the Connecticut General Life Insurance Company, Hartford,
Connecticut.
For purposes hereof, base annual compensation shall mean
the Employee's annual rate of base pay, not to include any premium or
bonus pay. If an active Employee becomes eligible for a larger death
benefit under the Plan because of an increase in base annual
compensation, the increased death benefit will become effective as of
the first January 1 that follows the date the compensation increase
takes effect, or as soon thereafter as administratively practicable,
provided the Employee continues to be insurable and the necessary
administrative steps have been taken to effect the increase. A covered
Employee who is retired or who becomes disabled shall be eligible for a
death benefit under the Plan equal to the amount of the death benefit
he or she was entitled to receive under the Plan or the Corporation's
Group Life Insurance Plan, whichever was applicable, on the date of
retirement or disability.
1.3 Source of Plan Benefits. Death benefits under the Plan will
be provided through the purchase by the Owner of the Policy, with the
Corporation advancing for the benefit of the Employee certain of the
premiums due on the policy, as provided in Article 3.2, below. Any
proceeds from the Policy payable upon the death of the Employee that
are in excess of the difference between the applicable death benefit
reflected in the schedule in Article 1.2, above, and the principal
amount of any Policy loans taken by the Owner and outstanding at the
date of the Employee's death are payable to the Corporation.
ARTICLE 2
OWNERSHIP OF THE POLICY
2.1 Owner. The Owner shall own the Policy and may exercise all
ownership rights granted to the owner thereof by the terms of the
Policy, except as may otherwise be provided herein. The Owner and the
Corporation agree that the Policy shall be subject to the terms and
conditions of this Agreement.
2.2 Collateral Assignment and Waiver. Contemporaneously with the
execution of this Agreement and the purchase of the Policy, the Owner
agrees to execute a collateral assignment agreement (hereinafter, the
"Collateral Assignment") in favor of the Corporation to secure the
Corporation's rights under this Agreement, with such Collateral
Assignment to be in the form attached hereto as Exhibit B, and the
Owner agrees to execute a waiver (hereinafter, the "Waiver") of the
right to coverage under the Corporation's Group Life Insurance Plan,
with such Waiver to be in the form attached hereto as Exhibit C. The
Collateral Assignment shall set forth the rights of the Corporation in
and with respect to the Policy pursuant to and consistent with the
terms and conditions of this Agreement. The Owner and the Corporation
agree to be bound by the terms of the Collateral Assignment and the
Waiver.
(a) Corporation's Rights. The Corporation's rights with respect
to the Policy shall be as follows:
(i) The right to obtain, directly or indirectly, one or more
loans or advances against the cash value of the Policy, to the extent
of, but not in excess of, the Corporation's Portion (as defined below
in this Article 2.2), and the right to pledge or assign the
Corporation's Portion as security for such loans or advances;
(ii) The right to fully or partially surrender the Policy
and upon surrender receive the cash value thereof, subject to the
Owner's right to a thirty (30) day advance written notice of the
Corporation's intent to surrender the Policy and the right, arising
upon receipt of such notice, to prevent the surrender and obtain a
release of the Corporation's rights by payment to the Corporation of
the aggregate amount of the premiums on the Policy to date;
(iii) The right to receive the proceeds of the Policy in
excess of the Employee's death benefit portion (as defined in Article
4.2 below) in the event of the death of the Employee;
(iv) The right to collect and receive all distributions or
shares of surplus, dividend deposits, or additions to the Policy now or
hereafter made or apportioned thereto, the right to exercise any and
all options contained in the Policy relating thereto, and the right to
exercise all non-forfeiture rights permitted by the terms of the Policy
or allowed by the issuer of the Policy (hereinafter, the "Issuer") and
to receive all benefits and advantages derived therefrom;
(v) The right to collect from the Issuer any amount that may
be due upon maturity of the Policy during the lifetime of the Employee
that is in excess of the amount defined as the Employee's death benefit
portion in Article 4.2, below; and
(vi) The right to release the Collateral Assignment upon
receipt of the amount specified in Article 5.3, below.
(b) Owner's Rights. Subject to the foregoing rights of the
Corporation and to any further limitations specified hereinbelow, the
Owner shall retain all rights as owner of the Policy, including, but
not limited to, the following:
(i) The right to obtain, directly or indirectly, one or more
loans or advances against the cash value of the Policy and the right to
pledge or assign the Policy as security for such loans or advances,
provided, however, that, except in the case of a loan specifically
authorized by Article 5.2, below, the right of the Owner to borrow
against the cash value of the Policy or to use it as security shall be
limited to that portion of the cash value that is in excess of
Corporation's Portion, shall be limited to the extent necessary to
insure that the policy does not lapse due to insufficient cash value,
shall require the advance written consent of the Corporation, and shall
not be exercisable prior to the later of the Employee's normal or early
retirement, whichever is applicable, under the terms of the AMP
Incorporated Pension Plan or the sixth anniversary date of the Policy;
(ii) The right to collect from the Issuer any amount payable
upon maturity of the Policy that is not payable to the Corporation
pursuant to Article 2.2(a)(v), above;
(iii) The right to designate and to change the beneficiary
or beneficiaries of the portion of the proceeds of the Policy payable,
upon the death of the Employee, to the beneficiary, pursuant to Article
4.2, below (hereinafter the "Employee's Portion");
(iv) The right to elect any optional form of settlement
available with respect to the Employee's Portion; and
(v) The right to assign the Owner's rights in and with
respect to the Policy.
For purposes hereof, the Corporation's Portion of the cash value shall
be an amount equal to the aggregate premiums for the Policy that are
paid or scheduled to be paid by the Corporation and the Employee,
pursuant to Article 3.2, below. The Corporation's Portion shall be
increased by the excess, if any, of the cash value of the Policy over
the sum of the Employee's applicable death benefit under Article 1.2
and the aggregate premiums for the Policy paid by the Corporation and
the Employee.
ARTICLE 3
PAYMENT OF PREMIUMS
3.1 Premium. As used herein, the term "premium" shall mean the
planned yearly amount agreed upon between the Corporation and the
Employee as the contribution toward the Policy for any year; provided,
however, that such amount shall never be less than the Policy's minimum
required premium for such year. "Premium" shall also include all costs
associated with all supplementary contracts, riders, and endorsements
to the Policy.
3.2 Premium Payment; Timing.
(a) Retired Employees. In the case of an Employee who has elected
and commenced a normal or early retirement under the AMP Incorporated
Pension Plan, the Corporation shall pay the premium on the Policy to
the Issuer on or before the due date of each premium payment; and in
any event, not later than the expiration of the grace period under the
Policy for such premium payment. Notwithstanding the above provisions
of this Article 3.2, if the Corporation shall fail to make any premium
payment within twenty (20) days after its due date, then the retired
Employee or the Owner may make such premium payment, and the
Corporation shall fully reimburse the retired Employee for such premium
payment within ten (10) days of the making of such payment. The
Corporation shall furnish an annual statement to the retired Employee
setting forth the amount of imputed income, if any, reportable by the
retired Employee as a result of the Corporation's payments hereunder.
(b) Active Employees. In the case of an Active Employee, the
Corporation shall pay the premium on the Policy to the Issuer on or
before the due date of each premium payment, and in any event, not
later than the expiration of the grace period under the Policy for such
premium payment. The Corporation shall advance as a bonus payment and
withhold from the compensation of the active Employee an amount
sufficient to reimburse the Corporation for that portion of the premium
payment equal to the annual cost of the pure insurance protection on
the life of the active Employee under the Policy for the ensuing Policy
Year. Such bonus and corresponding withholding shall be equal to the
lesser of the following:
(i) that rate per $1,000 of pure insurance protection
promulgated by the Internal Revenue Service in Rev. Rul. 55-747, 1955-2
C.B. 228, as the same may be amended or replaced from time to time by
published ruling (hereinafter, the "PS-58 rate") as applied to the
amount of pure insurance protection provided to the Employee pursuant
to the terms of this Agreement; or
(ii) that current published rate per $1,000 of pure
insurance protection charged by the Issuer for initial-issue individual
one-year term insurance policies available to all standard risks as
applied to the amount of pure insurance protection provided to the
active Employee pursuant to the terms of this Agreement.
Notwithstanding the above provisions of this Article 3.2, if the
Corporation shall fail to make any premium payment within twenty (20)
days after its due date, then the Employee or the Owner may make such
premium payment, and the Corporation shall reimburse the Employee or
the Owner for the portion of such premium payment not payable by the
Employee hereunder within ten (10) days of the making of such premium
payment by the Employee.
ARTICLE 4
RIGHTS UPON DEATH OF EMPLOYEE
4.1 Corporation's Death Benefit Portion. Upon the death of the
Employee, the Corporation shall be entitled to receive the proceeds of
the Policy less the Employee's death benefit portion as defined in
Article 4.2.
4.2 Employee's Death Benefit Portion. The beneficiary or
beneficiaries under the Policy, as designated on Exhibit D hereto,
shall be entitled to receive an amount equal to the Employee's
applicable death benefit under Article 1.2 decreased by the principal
amount of any Policy loans taken by the Owner and outstanding at the
date of the Employee's death. The Owner and the Corporation agree to
conform the beneficiary designation of the Policy to the provisions
hereof.
ARTICLE 5
RIGHTS UPON TERMINATION OF AGREEMENT OR SURRENDER OF POLICY
5.1 Termination Defined. This Agreement shall automatically
terminate upon the occurrence of any of the following events:
(a) the bankruptcy, receivership or dissolution of the
Corporation;
(b) the termination of employment of the Employee with the
Corporation or the termination of the Employee's status as an Officer
of the Corporation prior to his normal or early retirement under the
AMP Incorporated Pension Plan other than as a result of a disability
under the terms of the AMP Incorporated Long Term Disability Plan;
(c) the Corporation's exercise of its right to surrender the
Policy;
(d) the decision by the Board of Directors of the Corporation to
terminate the Plan; or
(e) the mutual written agreement of the Employee, the Owner, and
the Corporation.
For purposes of Article 5.1(b), employment with a subsidiary of the
Corporation shall be treated as employment with the Corporation and
service as an officer of a subsidiary of the Corporation shall be
treated as service as an Officer of the Corporation.
5.2 Rights Upon Termination. Upon the termination of this
Agreement as specified above, the Owner may, at his or its option, pay
to the Corporation the amount determined pursuant to Article 5.3 below.
To facilitate the Owner's reimbursement to the Corporation of the
aggregate premiums pursuant to this Article, the Corporation shall
repay to the Issuer the full amount of any indebtedness on the Policy
incurred by the Corporation and the Owner shall be entitled to borrow
against the entire cash value of the Policy without regard to the
limitations on Owner Policy loans specified in Article 2.2(b)(i). Upon
receipt of such reimbursement amount from the Owner, the Corporation
shall take all steps necessary to release the Collateral Assignment so
that the Owner shall own the Policy free of all encumbrances thereon in
favor of the Corporation pursuant to this Agreement.
5.3 Termination Amount: Living Proceeds. The Corporation shall be
entitled to receive from the Owner, as specified in Article 5.2, above,
an amount equal to the aggregate premiums on the policy paid by the
Employee and the Corporation.
5.4 Rights Upon a Change in Control. Notwithstanding any other
provision of this Agreement to the contrary, upon a "Change in
Control," as hereinafter defined, this Agreement may not be terminated
(except by mutual consent) by reason of the termination of the
Employee's employment with the Corporation before the later of (i) the
Policy anniversary date next following the Employee's 65th birthday, or
(ii) the expiration of fifteen (15) Policy years from the date of the
Policy, unless the Parties mutually consent to the continuation of this
Agreement at that time. For purposes of this Agreement, a "Change in
Control" shall be deemed to have occurred if:
1. The acquisition of beneficial ownership (other than from the
Corporation) by any person, entity or "group," within the meaning of
Section 13 (d)(3) or Section 14 (d)(2) of the Securities Exchange Act
of 1934 (the "Exchange Act"), excluding, for this purpose, the
Corporation or its subsidiaries, or any employee benefit plan of the
Corporation or its subsidiaries that acquires beneficial ownership of
voting securities of the Corporation (within the meaning of Rule 13d-3
promulgated under the Exchange Act), of 30% or more of either the then
outstanding shares of common stock or the combined voting power of the
Corporation's then outstanding voting securities entitled to vote
generally in the election of directors; or
2. A change in the persons constituting the Board as its exists
at the date hereof (the "Incumbent Board") such that the directors of
the Incumbent Board no longer constitute a majority of the Board;
provided that any person becoming a director subsequent to the date
hereof whose election, or nomination for election, by the Corporation's
shareholders was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an election
or nomination of an individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to
the election of the Directors of the Corporation, as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) shall be, for purposes of this agreement, considered as though
such person were a member of the Incumbent Board; or
3. Approval by the stockholders of the Corporation of a
reorganization, merger, consolidation in each case with respect to
which persons who were the stockholders of the Corporation immediately
prior to such reorganization, merger or consolidation do not,
immediately thereafter, own more than 50% of the combined voting power
entitled to vote generally in the election of directors of the
reorganized, merged or consolidated corporation's then outstanding
voting securities, or a liquidation or dissolution of the Corporation
or of the sale of all or substantially all of the assets of the
Corporation.
ARTICLE 6
ADMINISTRATIVE PROVISIONS
6.1 Issuer's Responsibility. The Issuer shall not be considered a
party to this Agreement and shall not be bound hereby. No provision of
this Agreement, or any amendment hereof, shall in any way enlarge,
change, vary or affect the obligations of the Issuer as expressly
provided in the Policy, except as the same may become a part of the
Policy by acceptance by the Issuer of the Collateral Assignment.
6.2 Amendment and Termination. This Agreement may be amended only
by express written Agreement signed by the Owner and a duly authorized
representative of the Corporation. The Plan may be terminated at any
time and for any reason by action of the Board of Directors of the
Corporation.
6.3 Notice. Any and all notices required to be given under the
terms of this Agreement shall be given in writing, signed by the
appropriate party, and sent by certified mail, postage prepaid, to the
appropriate address set forth below:
(a) to the Owner at: [name]
[address]
(b) to the Corporation at: AMP Incorporated
P. O. Box 3608
Harrisburg, PA 17105-3608
Attention: Director of Executive Compensation, M/S 176-49
Notice of any change in any of the above addresses shall be sent at
least thirty (30) days prior to the effective date of such changes, in
the same manner as any other notice hereunder, and shall also be
appended to this Agreement and incorporated herein as an amendment with
a signed acknowledgment by the parties hereto.
6.4 Heirs, Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the Owner, his or her
successors, heirs, executors, or administrators, and to the Corporation
and its successors. The Owner and the Corporation agree that any party
may assign its interest under this Agreement upon the prior written
consent of the other parties hereto, and any assignee shall be bound by
the terms and conditions of this Agreement as if an original party
hereto.
6.5 Interpretation. This Agreement and the interests of the Owner
and the Corporation hereunder shall be governed by and construed in
accordance with the laws of the State of Pennsylvania.
6.6 Term. This Agreement shall be effective as of the date first
above written, and shall continue until terminated as herein provided
or until all covenants herein activated by the death of the Employee
are fully carried out.
6.7 Headings. Any headings or captions in this Agreement are for
reference purposes only, and shall not expand, limit, change or affect
the meaning of any provision of this Agreement.
6.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same Agreement.
6.9 Fiduciary. The Corporation shall serve as the named Fiduciary
and administrator (hereinafter the "Fiduciary") of the split-dollar
life insurance plan established pursuant to this Agreement. The
Fiduciary shall have the full and absolute discretionary power and
authority to administer this Agreement and the Plan and to interpret
the provisions hereof, and the Fiduciary's actions with respect hereto
shall be binding and conclusive upon all persons for all purposes;
subject to Article 6.10. The Fiduciary shall not be liable to any
person for any action taken or omitted in connection with its
responsibilities, rights and duties under this Agreement unless
attributable to willful misconduct or lack of good faith.
6.10 Claims Procedure. Any controversy or claim arising out of or
relating to this Agreement shall be filed in writing with the
Fiduciary, which shall make all determinations concerning such claim.
Any decision by the Fiduciary concerning such claim shall be in writing
and shall be delivered within 90 days of the initial filing of the
claim to all parties in interest in accordance with the notice
provisions of Article 6.3, above, unless special circumstances require
an extension of time for processing the claim. If the decision is to
deny the claim, the decision shall set forth (a) the reasons for denial
in plain language, (b) specific reference to Agreement provisions on
which the decision is based, (c) a description of any further material
or information that would be necessary for the claimant to perfect the
claim on appeal and the reasons why such material or information is
necessary, and (d) the steps to be taken to obtain a review of the
denial. If such written denial does not resolve the claim to the
claimant's satisfaction, the claimant shall have the right to obtain a
review of the decision by making a written application to the Fiduciary
within 60 days of receipt of the decision to deny the claim, setting
forth any issues or comments and itemizing any documents pertinent to
the review that the claimant desires to examine. The Fiduciary shall
render a decision on the request for review within a reasonably prompt
period of time not exceeding sixty (60) days from the date of receipt
of the request for review, unless special circumstances required an
extension of time, in which case the decision shall be rendered as soon
as possible but in no event later than 120 days from the date of
receipt of the request for review. Written notice of any such
extension shall be given to the claimant prior to the commencement of
the extension. The decision on review shall be in writing and shall
include specific reasons for the decision, written in a manner
calculated to be understood by the claimant, as well as specific
references to the pertinent Plan provisions on which the decision is
based. In the event a decision on review is not timely furnished, the
claim shall be deemed denied on review.
IN WITNESS WHEREOF, the Parties have herebelow set their hands
and seals as of the day and year first above written.
AMP Incorporated
By:_____________________________
Its:____________________________
________________________________
[name]
By:_____________________________
Its:____________________________
EXHIBIT B
----------
COLLATERAL ASSIGNMENT AGREEMENT
A. As collateral security for any and all liabilities incurred
arising with respect to premium advances, [name] (herein
called the "Assignor"), hereby assigns, transfers and sets
over to AMP Incorporated (herein called the "Assignee"), its
successors and assigns, the following listed rights in
Policy #______________________________________ and any
supplementary contracts, riders and endorsements issued in
connection therewith (said policy and contracts being herein
called the "Policy") issued by The Manufacturers Life
Insurance Company of Toronto, Canada (herein called the
"Insurer") on the life of [name] (herein called the
"Insured") subject to all terms and conditions contained in
the Policy and to all superior liens, if any, which the
Insurer may have against the Policy. The Assignor by the
execution of this instrument and the Assignee by the
acceptance of this assignment agree to the terms and
conditions herein set forth.
B. It is expressly agreed that with the exception of those
rights specifically reserved and excluded in paragraph C
below all rights in the Policy, including but not limited
to the following, are included in this assignment and pass
by virtue hereof and may hereafter be exercised and enjoyed
by the Assignee without notice to or consent of the
Assignor.
1. The sole right to surrender the Policy and upon
surrender receive the cash value thereof,
including any dividend credits outstanding, in an
amount as its interest may appear;
2. The sole right to collect and receive all
distributions or shares of surplus, dividend
deposits or additions to the Policy now or
hereafter made or apportioned thereto, and to
exercise any and all options contained in the
Policy with respect thereto;
3. The sole right to exercise all non-forfeiture
rights permitted by the terms of the Policy or
allowed by the Insurer and to receive all
benefits and advantages derived therefrom and to
receive all benefits and advantages derived
therefrom including the right to take loans
against the security of the policy and
additionally;
4. The sole right to collect from the Insurer any
amount that may be due upon maturity of the
Policy during the lifetime of the Insured; and
5. The sole right to collect from the Insurer any
proceeds payable under the Policy on the death of
the Insured to the extent of the Assignee's
interest in the proceeds as provided in paragraph
D below.
C. It is expressly agreed that the following specific rights, so
long as the Policy has not been surrendered, are reserved and
excluded from this assignment and do not pass by virtue hereof:
1. The right to designate and change the Beneficiary
of the Policy proceeds to the extent they exceed
the Assignee's interest in the proceeds as
provided in paragraph D below;
2. The right to make a loan on the Policy in an
amount as its interest may appear;
3. The right to elect any optional method of
settlement permitted by the Policy or allowed by
the Insurer with respect to any amount that may
be payable to the Beneficiary; and
4. The right to assign the Assignor's interest in
the Policy;
but the reservation of these rights shall in no way impair
the right of the Assignee to surrender the Policy completely
with all its incidents or impair any other right of the
Assignee hereunder, and any designation or change of
Beneficiary or election of a method of settlement shall be
made subject to this assignment and to the rights of the
Assignee hereunder.
D. The Assignee's interest in any proceeds payable under the
Policy on the death of the Insured shall be equal to the
aggregate amount of the premiums paid and any excess death
benefit over and above the following formula:
The Employee's Death Benefit will be:
For 1995 and 1996, the greater of:
A) Two times the Employee's Base Annual Compensation
or the following schedule:
B) Base Annual Compensation Death Benefit
$150,000 or less $ 300,000
greater than $150,000 but not greater than $200,000 $ 400,000
greater than $200,000 but not greater than $250,000 $ 500,000
greater than $250,000 but not greater than $300,000 $ 600,000
greater than $300,000 but not greater than $375,000 $ 750,000
greater than $375,000 $1,000,000
C) Less the Death Benefit, if any, stated in the First Amendment,
dated and effective March 1, 1995, to the separate AMP Incorporated
Split-Dollar Life Insurance Agreement relating to the policies issued
by the Connecticut General Life Insurance Company, Hartford,
Connecticut.
For 1997 and thereafter:
D) Two times the Employee's Base Annual Compensation but not less
than the initial Death Benefit in A and B above
E) Less the Death Benefit, if any, stated in the First
Amendment, dated and effective March 1, 1995, to the
separate AMP Incorporated Split-Dollar Life Insurance
Agreement relating to the policies issued by the
Connecticut General Life Insurance Company, Hartford,
Connecticut.
and this assignment shall operate to transfer the interest of any
Beneficiary in such proceeds to the Assignee to the extent of the
Assignee's interest.
E. Prior to the death of the Insured, no loans or distributions
shall be paid over by the Insurer to the Assignor unless it
shall receive a written statement signed by the Assignor and
the Assignee that indicates the respective amounts to be
loaned or disbursed and to whom such amounts should be paid.
The Insurer shall be held harmless and fully released and
discharged by the Assignor and the Assignee to the extent of
any payment made in reliance upon such statement.
F. 1. The Insurer will record and file any assignment
that is in writing on a form satisfactory to the Insurer.
2. This collateral assignment agreement is to be
completed in duplicate and both copies are to be sent to the Insurer.
One recorded copy will be returned for attachment to the Policy.
3. This assignment contemplates that a separate
written split dollar agreement exists or will
exist to specify the rights between or among the
Assignee and Assignor.
4. No assignment shall affect the Insurer until a
copy thereof is delivered to its Home Office.
5. The Insurer shall rely on the sole written representation
of the Assignee with respect to the amount payable under Paragraph D
above. The Insurer shall be held harmless and fully released and
discharged by the Assignor and the Assignee to the extent of any
payment made in reliance upon such statement.
6. This assignment is binding on the executors,
administrators, successors or assigns of the Assignor.
Executed at Harrisburg, Pennsylvania, as of this 1st day of January,
1995.
_________________________________ _________________________________
Witness [name], Assignor
AMP Incorporated, Assignee
______________________________ By:______________________________
Witness Its:
Recorded and filed at the Home Office of the Insurer
On_________________________________
By_________________________________
Authorized Signature
Appendix A
----------
Split-Dollar Life Insurance as of 1/1/95
Employee
Name Coverage Amount
---- ---------------
W. Hudson 1,400,000
J. Marley 1,120,000
T. Dalrymple 600,000
J. Gurski 600,000
R. Ripp 750,000
D. Horowitz 750,000
M. Yohe 300,000
R. Gassner 400,000
J. Gorjat 600,000
C. Goonrey 400,000
P. Guarneschelli 600,000
J. Hassan 600,000
A. Kastel 400,000
J. Kegel 400,000
G. Knerr 500,000
J. Maher 400,000
R. Seall 400,000
J. Seitchik 400,000
H. Timmins 500,000
P. Workinger 400,000
N. Proietto 500,000
H. Cole 500,000
N. Spatz 300,000
L. Miller 300,000
D. Cornelius 400,000
K. Drysdale 400,000
A. Zettlemoyer 300,000
A. Gerlinger 300,000
J. Overbaugh 300,000
C. Ritter 300,000
L. Walker 300,000
A. Keizer 300,000
H. Peiffer 400,000
D. Henschel 300,000
P. Timashenka 300,000
D. Hooper 400,000
D. Wilkie 500,000
Retiree
Name Coverage Amount
---- ---------------
W. Conner 400,000
J. Hopkins 180,000
H. McInnes 1,000,000
M. Miller 400,000
H. Narigan 400,000
W. Raab 1,000,000
B. Savidge 750,000
R. Steele 320,000
J. Sweeney 350,000
H. Walfred 300,000
P. Workinger 400,000
EX-10.C
-------
AMP INCORPORATED
PENSION RESTORATION PLAN
(January 1, 1995 Restatement)
SECTION 1
INTRODUCTION
1.1 Intent of Plan
The intention of the AMP Incorporated Pension Restoration
Plan (the "Plan") is to provide a supplemental pension
benefit to designated Retirees whose benefit under the AMP
Incorporated Pension Plan is reduced or restricted by reason
of the maximum annual limitations on benefits imposed by
Section 415 of the Internal Revenue Code of 1986, as amended
(the "Code"), by reason of the limitation imposed by Section
401(a)(17) of the Code (hereinafter collectively referred to
as the "Code Limitations"), or by reason of having a
substantial portion of annual compensation payable in the
form of an annual cash bonus.
SECTION 2
EFFECTIVE DATE
2.1 The Plan, which was originally effective as of January 1,
1983, and thereafter amended on four occasions, is hereby
amended and restated in its entirety effective as of January
1, 1995.
SECTION 3
DEFINITIONS
3.1 Administrator means that person responsible for the
administration of the Plan as set forth in Section 10
hereof.
3.2 Company means AMP Incorporated and any subsidiary or
affiliate thereof that has adopted the Pension Plan.
3.3 Employee means any person listed on appendix A who is
regularly employed by the Company. It also includes any
such person while on an authorized leave of absence granted
by the Company.
3.4 Retiree means any retired Employee listed on Appendix A, a
joint annuitant of such Retiree or a beneficiary of such
Retiree who is entitled to receive benefits under this Plan.
3.5 Retirement Date means the date of actual retirement of a
Retiree, which may be his normal, early or postponed
Retirement Date under the provisions of the Pension Plan,
and which is ordinarily the first day of the month next
following the Retiree's last day worked.
3.6 Pension Plan means the AMP Incorporated Pension Plan.
3.7 Years of Service means the years or parts thereof of an
Employee's actual period of employment with the Company, as
further defined and limited in the Pension Plan, plus any
additional credit granted to the Employee for Plan purposes
by written employment agreement.
SECTION 4
COSTS OF PLAN
4.1 All costs of this Plan, including the administration
thereof, shall be borne by the Company and no contributions
to this Plan shall be required from Employees.
SECTION 5
ELIGIBILITY FOR AND COMMENCEMENT OF BENEFITS
5.1 For periods of time after December 31, 1994, an Employee
shall be eligible for the benefits provided by this Plan
only if the Employee is listed on Appendix A hereto by name,
and no benefit under the Plan shall accrue to an Employee
prior to the Employee's eligibility effective date specified
in Appendix A. and no benefit under the Plan shall accrue to
an Employee prior to the Employee's eligibility effective
date specified in Appendix A. Payment of the benefits
provided by this Plan shall ordinarily commence concurrently
with the commencement of Pension Plan benefits on the
Retiree's Retirement Date without the necessity of filing an
application under this Plan for such benefits.
SECTION 6
AMOUNT AND PAYMENT OF BENEFIT
6.1 Effective for Retirement Dates that occur after January 1,
1995, a Retiree's monthly accrued benefit under this Plan
shall have a value on a pre-tax basis that is equal to the
difference between A and B, where A is the monthly accrued
benefit the Retiree would have been entitled to receive
under the provisions of the Pension Plan (a) disregarding
any reductions or restrictions on such benefit as a result
of the Code Limitations, (b) including in any annual
compensation or three-year average compensation
determination with respect to the Retirement Date both
annual rates of base earnings and annual cash bonus plan
payments attributable to each applicable year (without
regard to whether a portion of such base earnings or cash
bonus amounts have been deferred under the terms of the AMP
Incorporated Deferred Compensation Plan or under any AMP-
sponsored plan complying with the provisions of Sections
401(k) or 125 of the Code) and (c) augmenting a Retiree's
credited years of service with any additional credit years
of service granted to the Retiree for Plan purposes by
written employment agreement, and B is the monthly accrued
benefit actually payable to the Retiree under the Pension
Plan.
SECTION 7
FORM OF BENEFIT
7.1 If an Employee who becomes eligible to receive benefits
under this Plan has elected an optional form of benefit
under the Pension Plan, any benefits to be paid under this
Plan will be paid in the same optional form as the benefit
paid by the Pension Plan and the Employee's designations as
to joint annuitant(s) and beneficiary(ies) made under the
Pension Plan will apply under this Plan, with the exception
that the Retiree may elect payment of his Plan benefit in a
single lump sum distribution, provided such election is made
at least three months prior to and in the calendar year
prior to the Retirement Date. The mortality and interest
rate assumptions used to convert a Plan benefit into a
single lump sum amount shall be as reflected in Appendix B.
SECTION 8
DEATH BENEFITS
8.1 Death Before Retirement
A death or survivor benefit shall be payable under this Plan
in the event of death before retirement only if a survivor
benefit is payable under the provisions of the Pension Plan.
In such event, the amount of the monthly benefit payable
under this Plan to the surviving beneficiary(ies) entitled
to benefits under the Pension Plan will again be the
difference between A and B, where A is the amount of
survivor benefit that would be determined under the Pension
Plan (a) disregarding the Code Limitations, (b) including
annual cash bonus plan payments as well as base earnings
rates in annual compensation determinations, and (c)
including any additional credited years of service granted
by agreement, and B is the survivor benefit actually payable
under the Pension Plan. All survivor benefits under this
Plan will cease or reduce at the same time and in the same
manner as survivor benefits are terminated or reduced under
the provisions of the Pension Plan.
8.2 Death After Retirement
A death or survivor benefit shall be payable under this Plan
in the event of death after retirement only if the Retiree
has elected and is receiving his Plan benefit in the form of
a joint and survivor annuity or certain and continuous
annuity and such form of payment, by its terms, calls for
continuing benefit payments after the Retiree's death.
SECTION 9
SEPARATION FROM EMPLOYMENT
9.1 Upon an Employee's separation from Company employment prior
to being credited with five (5) Years of Service with the
Company, the Employee's rights to any benefits under this
Plan will cease. Furthermore, all rights of an Employee to
any benefits under this Plan will cease upon separation from
Company employment prior to the Employee's Retirement Date.
Notwithstanding the foregoing, however, any Plan survivor
benefit described in Section 8.1 of the Plan shall be
payable to the survivor of a deceased Employee without
regard to whether the Employee had been credited with five
(5) or more Years of Service or attained his Retirement
Date.
SECTION 10
ADMINISTRATION
10.1 Administrator
The Administrator of the Pension Plan shall act as the
Administrator of this Plan.
10.2 Interpretation of Provisions
The Administrator shall have the full and absolute
discretionary power and authority to administer the Plan,
interpret the provision of the Plan, and decide questions
arising in its administration. The decisions and
interpretations of the Administrator shall be final and
binding on the Company, its Employees and all other persons.
10.3 Records of Administration
The Administrator shall keep records reflecting the
administration of this Plan which shall be subject to audit
by the Company.
10.4 Denial of Claim
The Administrator shall, inter alia, provide adequate notice
in writing to any Employee or beneficiary whose claim for
benefit under this Plan has been denied, setting forth the
specific reasons for such denial. The Employee or
beneficiary will be given an opportunity for a full and fair
review by the Administrator of the decision denying the
claim. The Employee or beneficiary shall be given 30 days
from the date of the notice denying any such claim within
which to request such review.
10.5 Liability of the Administrator
The Administrator shall not be liable for any action taken
in good faith or for the exercise of any power granted to the
Administrator, except to the extent that such liability is
imposed by law as a result of a breach by the Administrator
of his fiduciary responsibilities.
SECTION 11
FACILITY OF PAYMENT AND LAPSE OF BENEFITS
11.1 Provision for Incapacity
If the Administrator deems any person entitled to receive
any payment under the provisions of this Plan incapable of
receiving or disbursing the same by reason of minority,
illness or infirmity, mental incompetency, or incapacity of
any kind, the Administrator may, in his sole discretion,
take any one or more of the following actions: he may apply
such payment directly for the health, support and
maintenance of such person; he may reimburse any person for
any such support theretofore supplied to the person entitled
to receive any such payment; or he may pay such payment to
any other person selected by him to disburse such payment
for the health, support and maintenance of the person
entitled thereto, including, without limitation to any
relative who has undertaken, wholly or partially, the
expense of such person's comfort, care and maintenance, or
any institution in whose care or custody the person entitled
to the payment may be. The Administrator may, in his sole
discretion, deposit any payment due to a minor to the
minor's credit in any savings or commercial bank of the
Administrator's choice.
11.2 Payments or Deposits
Payments or deposits made pursuant to any provision of this
Section 11 shall be a complete discharge, to the extent
thereof, of all liability under the provisions of this Plan,
or otherwise, of the Administrator, the Company and this
Plan, and the receipt by the person or persons receiving any
such payment distribution or deposit shall be a complete
acquittance therefore and there shall be no liability to see
to the application of any payments, distributions or
deposits so made.
SECTION 12
GENERAL PROVISIONS
12.1 Excess Benefit Plan
This Plan, to the extent that it is designed to provide a
benefit not payable under the Pension Plan because of the
restrictions of Section 415 of the Code, is intended to
constitute an "excess benefit plan" under the present
provisions of Section 3 (36), Subtitle A of Title I of
ERISA.
12.2 Frequency and Duration of Payments
Except in the case where an Employee has elected payment in
the form of a single lump sum distribution, all benefits
under this Plan shall be paid in monthly installments at the
beginning of the month to which the payment applies and
shall cease with the month of the retired Employee's death
unless continued to a beneficiary or joint annuitant in
accordance with other provisions of this Plan.
12.3 Payments and Benefits Not Assignable
Payments to and benefits under this Plan are not assignable
or subject to anticipation or alienation since they are
primarily for the support and maintenance of the Employees
and their joint annuitants or beneficiaries. Furthermore,
such payments shall not be subject to attachment, seizure,
or levy by creditors or through legal process against the
Company, the Administrator, any trustee or other funding
agent, or any Employee, Retiree, or survivor.
12.4 No Right of Employment
The provisions of this Plan shall not give an Employee the
right to be retained in the service of the Company.
12.5 Adjustments
At the request of the Company, the Administrator may, with
respect to a Retiree, adjust such Retiree's benefit under
this Plan or make such other adjustments with respect to
such Retiree as are required to correct administrative
errors or provide benefits in a manner consistent with the
intent and purpose of this Plan.
SECTION 13
AMENDMENTS AND DISCONTINUANCE
13.1 Amendment of Plan
This Plan may be amended by action of the Board of Directors
of the Company if, as amended, it continues to be for the
exclusive benefit of Employees.
13.2 Termination
The Company intends to continue this Plan indefinitely but
reserves the right to terminate it at any time by action of
the Board of Directors of the Company.
13.3 Effect of Amendment or Termination
No amendment or termination of this Plan may adversely
affect the benefit payable to any Retiree receiving benefits
under the Plan prior to the effective date of the amendment
or termination, or to any Employee who, as of such date, was
eligible to retire with an immediate allowance under the
Pension Plan, or as to any Employee who has prior to such
amendment or termination accrued a benefit payable
hereunder.
EXECUTED at Harrisburg, Pennsylvania this ____ day of
December, 1995.
AMP Incorporated
By:_____________________
Its: ___________________
And:____________________
Its: ___________________
APPENDIX A
-----------
The following are Employees for purposes of the Plan on and after
the indicated effective date:
Name Eligibility
Effective Date
W. J. Hudson 01/01/89
J. E. Marley 01/01/89
B. Savidge 01/01/89
T. Dalrymple 12/31/93
J. Gurski 12/31/93
J. Gorjat 05/01/93
J. Hassan 10/01/93
P. Guarneschelli 12/31/93
R. Gassner 12/31/93
H. Cole 12/31/93
H. Timmins 12/31/93
A. Kastel 12/31/93
K. Drysdale 12/31/93
R. Seall 12/31/93
C. Goonrey 12/31/93
P. Workinger 12/31/93
J. Maher 12/31/93
R. Knerr 12/31/93
J. Seitchik 12/31/93
R. Ripp 08/15/94
D. Horowitz 09/12/94
N. Proietto 02/01/95
D. Cornelius 02/01/95
J. Kegel 02/01/95
D. Hooper 02/01/95
APPENDIX B
----------
TO
AMP INCORPORATED
PENSION RESTORATION PLAN
Interest Rate: the average immediate annuity rate used by the
Pension Benefit Guaranty Corporation to value immediate annuities
as such rate was in effect as of the first day of the 12-months
preceding the Retirement Date in question.
Mortality Table: the UP-1984 Mortality Table
EX-10.D
-------
AMP Incorporated
DEFERRED COMPENSATION PLAN
Effective - January 1, 1995
AMP INCORPORATED
DEFERRED COMPENSATION PLAN
Table of Contents
ARTICLE I - PURPOSE.................................................. 1
1.1 Statement of Purpose; Effective Date........................ 1
ARTICLE II - DEFINITIONS............................................. 1
2.1 Account..................................................... 1
2.2 Base Salary................................................. 1
2.3 Beneficiary................................................. 1
2.4 Board....................................................... 2
2.5 Bonus....................................................... 2
2.6 Change in Control........................................... 2
2.7 Code........................................................ 3
2.8 Committee................................................... 3
2.9 Compensation................................................ 3
2.10 Corporation................................................ 3
2.11 Credited Service........................................... 3
2.12 Deferral Account........................................... 3
2.13 Deferral Benefit........................................... 4
2.14 Determination Date......................................... 4
2.15 Eligible Employee.......................................... 4
2.16 Emergency Benefit.......................................... 4
2.17 Employer................................................... 4
2.18 Investment Return Rate..................................... 4
2.19 Matching Account........................................... 4
2.20 Matching Amount............................................ 5
2.21 Matching Percentage........................................ 5
2.22 Participant................................................ 5
2.23 Participation Agreement.................................... 5
2.24 Plan....................................................... 5
2.25 Plan Year.................................................. 5
2.26 Savings Plan............................................... 5
2.27 Selected Affiliate......................................... 5
2.28 Retirement................................................. 6
ARTICLE III - Eligibility and Participation......................... 6
3.1 Eligibility................................................. 6
3.2 Participation............................................... 6
3.3 Termination of Participation................................ 6
3.4 Ineligible Participant...................................... 7
ARTICLE IV - DEFERRAL OF COMPENSATION................................ 7
4.1 Amount of Deferral.......................................... 7
4.2 Matching Amounts............................................ 7
4.3 Crediting Deferred Compensation and Matching Amounts........ 8
ARTICLE V - BENEFIT ACCOUNTS......................................... 8
5.1 Determination of Account.................................... 8
5.2 Crediting of Investment Return.............................. 8
5.3 Statement of Accounts....................................... 9
ARTICLE VI - PAYMENT OF BENEFITS..................................... 9
6.1 Payment of Deferral Benefit upon Retirement................. 9
6.2 Payment of Deferral Benefit upon Death, or Disability....... 9
6.3 Payment of Deferral Benefit upon Any Other Termination......10
6.4 Emergency Benefit...........................................10
6.5 Form of Payment.............................................10
6.6 Commencement of Payments....................................11
6.7 Small Benefit...............................................11
6.8 Hardship Withdrawal - "Haircut" Provisions..................11
6.9 Specific Term Deferrals.....................................11
ARTICLE VII - BENEFICIARY DESIGNATION................................12
7.1 Beneficiary Designation.....................................12
7.2 Amendments..................................................12
7.3 No Designation..............................................13
7.4 Effect of Payment...........................................12
ARTICLE VIII - ADMINISTRATION........................................12
8.1 Committee; Duties...........................................12
8.2 Agents......................................................14
8.3 Binding Effect of Decisions.................................14
8.4 Indemnity of Committee......................................14
ARTICLE IX - AMENDMENT AND TERMINATION OF PLAN.......................13
9.1 Amendment...................................................13
9.2 Termination.................................................13
ARTICLE X - MISCELLANEOUS............................................15
10.1 Funding....................................................15
10.2 Nonassignability...........................................16
10.3 Legal Fees and Expenses....................................16
10.4 Captions...................................................15
10.5 Governing Law..............................................15
10.6 Successors.................................................15
10.7 Right to Continued Service.................................15
EXHIBIT A
EXHIBIT B
EXHIBIT C
AMP Incorporated
DEFERRED COMPENSATION PLAN
ARTICLE I - PURPOSE
1.1 Statement of Purpose; Effective Date.
The purpose of the AMP Incorporated Deferred Compensation Plan
(the "Plan") is to provide selected management and highly
compensated employees of the Employer with the option to defer
the receipt of portions of their compensation payable for
services rendered to the Employer. It is intended that the Plan
will assist in attracting and retaining qualified individuals to
serve as officers and managers of the Employer. The Plan is
effective as of January 1, 1995.
ARTICLE II - DEFINITIONS
When used in this Plan and initially capitalized, the following
words and phrases shall have the meanings indicated:
2.1 Account.
"Account" means the sum of a Participant's Deferral Account and
Matching Account under the Plan.
2.2 Base Salary.
"Base Salary" means a Participant's base earnings paid by an
Employer without regard to any increases or decreases in base
earnings as a result of (i) an election to defer base earnings
under this Plan or (ii) an election between benefits or cash
provided under a Plan of an Employer maintained pursuant to
Section 125 or 401(k) of the Code and as limited in Exhibit B
attached hereto.
2.3 Beneficiary.
"Beneficiary" means the person or persons designated or deemed to
be designated by the Participant pursuant to Article VII to
receive benefits payable under the Plan in the event of the
Participant's death.
2.4 Board.
"Board" means the Board of Directors of the Corporation.
2.5 Bonus.
"Bonus" means a Participant's annual cash bonus paid by the
Employer to a Participant under the plans listed in Exhibit B
attached hereto and to the degree limited in Exhibit B, as
applicable, without regard to any decreases as a result of (i) an
election to defer all or any portion of a bonus under this Plan
or (ii) an election between benefits or cash provided under a
plan of the Employer maintained pursuant to Section 401(k) of the
Code.
2.6 Change in Control.
"Change in Control" means the date on which any of the following
is effective:
a. The acquisition of beneficial ownership (other than from the
Corporation) by any person, entity or "group," within the
meaning of Section 13 (d)(3) or Section 14 (d)(2) of the
Securities Exchange Act of 1934 (the "Exchange Act"),
excluding, for this purpose, the Corporation or its
subsidiaries, or any employee benefit plan of the
Corporation or its subsidiaries that acquires beneficial
ownership of voting securities of the Corporation (within
the meaning of Rule 13d-3 promulgated under the Exchange
Act), of 30% or more of either the then outstanding shares
of common stock or the combined voting power of the
Corporation's then outstanding voting securities entitled to
vote generally in the election of directors; or
b. A change in the persons constituting the Board as its exists
at the date hereof (the "Incumbent Board") such that the
directors of the Incumbent Board no longer constitute a
majority of the Board; provided that any person becoming a
director subsequent to the date hereof whose election, or
nomination for election, by the Corporation's shareholders
was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an
election or nomination of an individual whose initial
assumption of office is in connection with an actual or
threatened election contest relating to the election of the
Directors of the Corporation, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act)
shall be, for purposes of this agreement, considered as
though such person were a member of the Incumbent Board; or
c. Approval by the stockholders of the Corporation of a
reorganization, merger, consolidation in each case with
respect to which persons who were the stockholders of the
Corporation immediately prior to such reorganization, merger
or consolidation do not, immediately thereafter, own more
than 50% of the combined voting power entitled to vote
generally in the election of directors of the reorganized,
merged or consolidated corporation's then outstanding voting
securities, or a liquidation or dissolution of the
Corporation or of the sale of all or substantially all of
the assets of the Corporation.
2.7 Code.
"Code" means the Internal Revenue Code of 1986, as amended.
2.8 Committee.
"Committee" has the meaning set forth in Section 8.1.
2.9 Compensation.
"Compensation" means the Base Salary and Bonus payable with
respect to an Eligible Employee for each calendar year.
2.10 Corporation.
"Corporation" means AMP Incorporated (AMP) and any successor
thereto.
2.11 Credited Service.
"Credited Service" means the sum of all periods of a
Participant's employment by the Corporation or a Selected
Affiliate for which vesting service credit is given under the
Savings Plan.
2.12 Deferral Account.
"Deferral Account" means the account maintained on the books of
the Employer for the purpose of accounting for the amount of
Compensation that each Participant elects to defer under the Plan
and for the amount of investment return credited thereto pursuant
to Article V.
2.13 Deferral Benefit.
"Deferral Benefit" means the benefit payable to a Participant or
his or her Beneficiary pursuant to Article VI.
2.14 Determination Date.
"Determination Date" means a date on which the amount of a
Participant's Account is determined as provided in Article V.
The first day of each calendar month shall be a Determination
Date.
2.15 Eligible Employee.
"Eligible Employee" means a highly compensated or management
employee of the Corporation who is designated by the Committee,
by Name or group or description, in accordance with Section 3.1
as eligible to participate in the Plan.
2.16 Emergency Benefit.
"Emergency Benefit" has the meaning set forth in Section 6.2.
2.17 Employer.
"Employer" means, with respect to a Participant, the Corporation
or the Selected Affiliate which pays such Participant's
Compensation.
2.18 Investment Return Rate.
"Investment Return Rate" means:
(a) In the case of an investment named in Exhibit C of a
fixed income nature, the interest deemed to be
credited,
(b) In the case of an investment named in Exhibit C of an
equity investment nature, the increase and decrease in
deemed value and dividends deemed to be credited.
2.19 Matching Account.
"Matching Account" means the account maintained on the books of
the Employer for the purpose of accounting for the Matching
Amount and for the amount of investment return credited thereto
for each Participant pursuant to Article V.
2.20 Matching Amount.
"Matching Amount" means the amount credited to a Participant's
Matching Account under Section 4.3.
2.21 Matching Percentage.
"Matching Percentage" means the matching contribution percentage
(or percentages) in effect for a specific Plan Year under the
Savings Plan, which percentage is applied to the matchable
portion of a Participant's pre-tax elective contributions under
the Savings Plan to determine the amount of the Participant's
company matching contributions under the Savings Plan.
2.22 Participant.
"Participant" means any Eligible Employee who elects to
participate by filing a Participant Agreement as provided in
Section 3.2.
2.23 Participation Agreement.
"Participation Agreement" means the agreement filed by a
Participant, in the form prescribed by the Committee, pursuant to
Section 3.2.
2.24 Plan.
"Plan" means the AMP Incorporated Deferred Compensation Plan, as
amended from time to time.
2.25 Plan Year.
"Plan Year" means a twelve-month period commencing January 1 and
ending the following December 31, provided that the first Plan
year shall commence January 1, 1995, and end December 31, 1995.
2.26 Savings Plan.
"Savings Plan" means, with respect to a Participant, the AMP
Incorporated Employee Savings and Thrift Plan, as Amended and
Restated January 1, 1987, or as may be amended from time to time.
2.27 Selected Affiliate.
"Selected Affiliate" means (1) any corporation in an unbroken
chain of corporations beginning with the Corporation if each of
the corporations other than the last corporation in the chain
owns or controls, directly or indirectly, stock possessing not
less than 50 percent of the total combined voting power of all
classes of stock in one of the other corporations, or (2) any
partnership or joint venture in which one or more of such
corporations is a partner or venturer, each of which shall be
selected by the Committee.
2.28 Retirement
"Retirement" means the voluntary termination of a Participant
when retirement is permitted under the AMP Pension Plan, the AMP
Pension Restoration Plan, or any other retirement plan maintained
by the Corporation or a Selected Affiliate as defined therein.
ARTICLE III - Eligibility and Participation
3.1 Eligibility.
Eligibility to participate in the Plan is limited to Eligible
Employees. From time to time, and subject to Section 3.4, the
Committee shall prepare, and attach to the Plan as Exhibit A, a
complete list of the Eligible Employees, by individual name or by
reference to an identifiable group of persons, of whom shall be a
select group of management or highly compensated employees.
3.2 Participation.
Participation in the Plan shall be limited to Eligible Employees
who elect to participate in the Plan by filing a Participation
Agreement with the Committee. An Eligible Employee shall
commence or recommence participation in the Plan upon the first
day of the calendar year immediately following the receipt of his
or her Participation Agreement by the Committee, but in the case
of an Eligible Employee who is newly hired participation shall
commence upon the first day of his or her first payroll period
following the receipt of his or her Participation Agreement by
the Committee.
3.3 Termination of Participation.
A Participant may change a previously elected percentage of
deferral of Base Salary or elect to terminate his or her
participation in the Plan at any time by filing a written notice
thereof with the Committee. Changes will only become effective
as of the beginning of the next calendar year following receipt
of the change in election by the Committee and in accordance with
the Company's prevailing administrative procedures. Amounts
credited to such Participant's Account with respect to periods
prior to the effective date of such termination shall continue to
be payable pursuant to, receive investment return on, and
otherwise be governed by, the terms of the Plan.
3.4 Ineligible Participant.
Notwithstanding any other provisions of this Plan to the
contrary, if the Committee determines that any Participant may
not qualify as a "management or highly compensated employee"
within the meaning of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or regulations thereunder, the
Committee may determine, in its sole discretion, that such
Participant shall cease to be eligible to participate in this
Plan. Upon such determination, the Employer shall make an
immediate lump sum payment to the Participant equal to the vested
amount credited to his Account. Upon such payment, no benefit
shall thereafter be payable under this Plan either to the
Participant or any Beneficiary of the Participant, and all of the
Participant's elections as to the time and manner of payment of
his Account will be deemed to be canceled.
ARTICLE IV - DEFERRAL OF COMPENSATION
4.1 Amount of Deferral.
With respect to each Plan Year, a Participant may elect to defer
a specified percentage of his or her Compensation up to the
percentage of Compensation defined and the terms described in
Exhibit B attached hereto. A Participant may change the
percentage of his or her Compensation to be deferred by filing a
written notice thereof with the Committee. Any such change shall
be effective as of the first day of the Plan Year immediately
following the Plan Year in which such notice is filed with the
Committee.
4.2 Matching Amounts.
The Employer shall provide Matching Amounts under this Plan with
respect to each Participant based on the Matching Percentage in
effect from time to time under the Savings Plan. The total
Matching Amounts under this Plan on behalf of a Participant for
each Plan Year shall not exceed the difference between (i) the
Matching Percentage of the matchable portion of the Base Salary
deferred by a Participant under this Plan and of the
Participant's pre-tax elective deferrals for the Plan Year under
the Savings Plan, less (ii) the company matching contributions
actually allocated to the Participant under the Savings Plan for
such Plan Year. For purposes hereof, the matchable portion of
the Participant's deferrals shall be determined in the same
manner as the matchable portion of the Participant's Savings Plan
pre-tax elective deferrals, without regard however to any Code-
related limitations on compensation or contributions.
4.3 Crediting Deferred Compensation and Matching Amounts.
The amount of Compensation that a Participant elects to defer
under the Plan shall be credited by the Employer to the
Participant's Deferral Account monthly. To the extent that the
Employer is required to withhold any taxes or other amounts from
a Participant's deferred Compensation pursuant to any state,
federal or local law, such amounts shall be withheld only from
the Participant's Bonus compensation before such amounts are
credited unless the Participant notes otherwise, in writing, at
the time his election to defer is made. The Matching Amount
under the Plan for each Participant under Section 4.2 shall be
credited by the Employer no later than the time that matching
contributions are allocated under the Savings Plan.
ARTICLE V - BENEFIT ACCOUNTS
5.1 Determination of Account.
As of each Determination Date, a Participant's Account shall
consist of the balance of the Participant's Account as of the
immediately preceding Determination Date, plus the Participant's
deferred Compensation and Matching Amount credited pursuant to
Section 4.3 since the immediately preceding Determination Date,
plus investment return credited as of such Determination Date
pursuant to Section 5.2, minus the aggregate amount of
distributions, if any, made from such Account since the
immediately preceding Determination Date.
5.2 Crediting of Investment Return.
As of each Determination Date, each Participant's Deferral
Account and Matching Account shall be increased by the amount of
investment return earned since the immediately preceding
Determination Date. Investment return shall be credited at the
Investment Return Rate as of such Determination Date based on the
average balance of the Participant's Deferral Account and
Matching Account, respectively, since the immediately preceding
Determination Date, but after such Accounts have been adjusted
for any contributions or distributions to be credited or deducted
for such period. Investment return for the period prior to the
first Determination Date applicable to a Deferral Account or a
Matching Account shall be deemed earned ratably over such period.
Until a Participant or his or her Beneficiary receives his or her
entire Account, the unpaid balance thereof shall earn an
investment return as provided in this Section 5.2.
5.3 Statement of Accounts.
The Committee shall provide to each Participant, within 120 days
after the close of each Plan Year, a statement setting forth the
balance of such Participant's Account as of the last day of the
preceding Plan Year and showing all adjustments made thereto
during such Plan Year.
5.4 Vesting of Account.
Except as provided in Sections 10.1 and 10.2, a Participant shall
be 100% vested in his or her Deferral Account at all times. A
Participant's interest in his or her Matching Account shall be
100% vested as of the earlier of a Change in Control, his or her
death, disability or Retirement at or after age 65. Prior to any
of these events, a Participant's interest in his or her Matching
Account shall vest under the vesting schedule for matching
contributions under the Savings Plan.
Any nonvested portion of a Participant's Matching Account shall
be forfeited in the event of Participant's Termination for
reasons other than death, disability, or Retirement at or after
age 65. Forfeitures under the Plan shall be for the benefit of
the Employer and shall not be credited to other Participants.
ARTICLE VI - PAYMENT OF BENEFITS
6.1 Payment of Deferral Benefit upon Retirement.
Upon the termination of service of the Participant as an employee
of the Employer and all Selected Affiliates, by reason of
Retirement, the Employer shall pay to the Participant a Deferral
Benefit based on his written election pursuant to Section 6.5.
6.2 Payment of Deferral Benefit upon Death or Disability.
Upon the death or disability of a Participant, the Employer shall
pay to the Participant or his Beneficiary, as the case may be, a
Deferral Benefit equal to the balance of his vested Account
determined pursuant to Article V, less any amounts previously
distributed. Payment shall be in the form elected by the
Participant in accordance with Section 6.5, provided that upon
application by the disabled Participant or Beneficiary the
Committee, in its sole and absolute discretion, may override an
election of installment payments and direct payment of the
Deferral Benefit in a lump sum. For purposes hereof,
"disability" shall be determined in accordance with the criteria
applicable for purposes of the Corporation's long-term disability
plan.
6.3 Payment of Deferral Benefit upon Any Other Termination.
Upon the termination of service of the Participant as an employee
of the Employer and all Selected Affiliates for reasons other
than Retirement, death or disability, the Employer shall pay to
the Participant or his Beneficiary, as the case may be, a
Deferral Benefit equal to the balance of his or her vested
Account determined pursuant to Article V, less any amounts
previously distributed, twelve (12) months after termination
occurs. If, during that twelve (12) month period, the
Participant violates any confidentiality agreement, intellectual
property agreement or non-competition agreement with an Employer
in effect at the time of the termination, the Participant's
Deferral Account shall be reduced to reflect the value that it
would have on that date if it were credited with the lower of 30-
day treasury rates or 6% from the time the contributions to that
account were initially made, and the Participant's Matching
Account shall be forfeited.
6.4 Emergency Benefit.
In the event that the Committee, under written request of a
Participant, determines, in its sole discretion, that the
Participant has suffered an unforeseeable financial emergency,
the Employer shall pay to the Participant, as soon as practicable
following such determination, an amount necessary to meet the
emergency (the "Emergency Benefit"), but not exceeding the
aggregate balance of such Participant's Deferral Account (and the
vested portion of his Matching Account) as of the date of such
payment. For purposes of this Section 6.2, an "unforeseeable
financial emergency" shall mean an event that the Committee
determines to give rise to an unexpected need for cash arising
from an illness, disability, casualty loss, sudden financial
reversal or other such unforeseeable occurrence. Cash needs
arising from foreseeable events such as the purchase of a house
or education expenses for children shall not be considered to be
the result of an unforeseeable financial emergency. Amounts of
an Emergency Benefit may not exceed the amount the Committee
reasonably determines to be necessary to meet such emergency
needs (including taxes incurred by reason of a taxable
distribution). The amount of the Deferral Benefit otherwise
payable under the Plan to such Participant shall be adjusted to
reflect the early payment of the Emergency Benefit.
6.5 Form of Payment.
The Deferral Benefit payable pursuant to Section 6.1 shall be
paid in one of the following forms, as elected by the Participant
in his or her Participant Agreement on file as of one (1) year
and one (1) day prior to the date of termination
(a) Annual payments of a fixed amount which
shall amortize the vested Account balance,
or the in-service distribution portion
thereof, as of the payment commencement
date over a period not to exceed ten (10)
years (together, in the case of each annual
payment, with interest thereon credited
after the payment commencement date
pursuant to Section 5.2).
(b) A lump sum.
6.6 Commencement of Payments.
Commencement of payments under Section 6.1 of the Plan shall
begin within 60 days following receipt of written notice by the
Committee of an event which entitles a Participant (or a
Beneficiary) to payments under the Plan.
6.7 Small Benefit.
In the event the Committee determines that the balance of a
Participant's Account is less than $500 at the time of
commencement of payments, or the portion of the balance of the
Participant's Account payable to any Beneficiary is less than
$500 at the time of commencement of payments, the Committee may
inform the Employer and the Employer, in its discretion, may
choose to pay the benefit in the form of a lump sum payment,
notwithstanding any provision of the Plan or a Participant
election to the contrary. Such lump sum payment shall be equal
to the balance of the Participant's Account or the portion
thereof payable to a Beneficiary.
6.8 Hardship Withdrawal - "Haircut" Provisions
Notwithstanding any other provision of the Plan, an actively-
employed Participant at any time shall be entitled to receive,
upon written request to the Committee, a lump sum distribution of
the entire amount owed to the Participant under the Plan subject
to penalties as set forth below:
(a) The lump-sum will be equal to 90% of the Participant's
then current Deferral Account and vested Matching Account
balances, and;
(b) The remaining balance shall be forfeited by the
Participant, and;
(c) The Participant will not be eligible to recommence
income deferrals until the first of the January following a one
(1) year period commencing on the date of withdrawal, and then
only if otherwise eligible to participate under the terms of the
Plan.
The amount payable under this section of the Plan shall be paid
within forty-five (45) days following receipt of written notice
by the Committee.
6.9 Specific Term Deferrals
The Company may, from time to time, offer to Participants the
opportunity to defer specific amounts of Base Salary or Bonus for
a specific duration and paid out in installments prior to normal
retirement. These deferrals will be accounted for separately and
will be paid out in accordance with an election that applies only
to that deferral.
ARTICLE VII - BENEFICIARY DESIGNATION
7.1 Beneficiary Designation.
Each Participant shall have the right, at any time, to designate
any person or persons as his Beneficiary to whom payment under
the Plan shall be made in the event of his or her death prior to
complete distribution to the Participant of his or her Account.
Any Beneficiary designation shall be made in a written instrument
provided by the Committee. All Beneficiary designations must be
filed with the Committee and shall be effective only when
received in writing by the Committee.
7.2 Amendments.
Any Beneficiary designation may be changed by a Participant by
the filing of a new Beneficiary designation, which will cancel
all Beneficiary designations previously filed.
7.3 No Designation.
If a Participant fails to designate a Beneficiary as provided
above, or if all designated Beneficiaries predecease the
Participant, then the Participant's designated Beneficiary shall
be deemed to be the Participant's estate
7.4 Effect of Payment.
Payment to a Participant's Beneficiary (or, upon the death of a
primary Beneficiary, to the contingent Beneficiary or, if none,
to the Participant's estate) shall completely discharge the
Employer's obligations to the Participant under the Plan.
ARTICLE VIII - ADMINISTRATION
8.1 Committee; Duties.
The administrative committee for the Plan (the "Committee") shall
be those members of the Compensation and Management Development
Committee of the Board who are not Participants, as long as there
are at least three such members. If there are not at least three
such non-participating persons on the Committee, the Chief
Executive Officer of the Corporation shall appoint other non-
participating Directors or Corporation officers to serve on the
Committee. The Committee shall supervise the administration and
operation of the Plan, may from time to time adopt rules and
procedures governing the Plan and shall have authority to give
interpretive rulings with respect to the Plan.
8.2 Agents.
The Committee may appoint an individual, who may be an employee
of the Corporation, to be the Committee's agent with respect to
the day-to-day administration of the Plan. In addition, the
Committee may, from time to time, employ other agents and
delegate to them such administrative duties as it sees fit, and
may from time to time consult with counsel who may be counsel to
the Corporation.
8.3 Binding Effect of Decisions.
Any decision or action of the Committee with respect to any
question arising out of or in connection with the administration,
interpretation and application of the Plan shall be final and
binding upon all persons having any interest in the Plan.
8.4 Indemnity of Committee.
The Corporation shall indemnify and hold harmless the members of
the Committee and their duly appointed agents under Section 8.2
against any and all claims, loss, damage, expense or liability
arising from any action or failure to act with respect to the
Plan, except in the case of gross negligence or willful
misconduct by any such member or agent of the Committee.
ARTICLE IX - AMENDMENT AND TERMINATION OF PLAN
9.1 Amendment.
The Corporation, on behalf of itself and of each Selected
Affiliate, may at any time amend, suspend or reinstate any or all
of the provisions of the Plan, except that no such amendment,
suspension or reinstatement may adversely affect any
Participant's Account, as it existed as of the day before the
effective date of such amendment, suspension or reinstatement,
without such Participant's prior written consent. Written notice
of any amendment or other action with respect to the Plan shall
be given to each Participant.
9.2 Termination.
The Corporation, on behalf of itself and of each Selected
Affiliate, in its sole discretion, may terminate this Plan at any
time and for any reason whatsoever. Upon termination of the
Plan, the Committee shall take those actions necessary to
administer any Accounts existing prior to the effective date of
such termination; provided, however, that a termination of the
Plan shall not adversely affect the value of a Participant's
Account, the crediting of investment return under Section 5.2 or
the timing or method of distribution of a Participant's Account,
without the Participant's prior written consent. Notwithstanding
the foregoing, a termination of the Plan shall not give rise to
accelerated or automatic vesting of any Participant's Matching
Account.
ARTICLE X - MISCELLANEOUS
10.1 Funding.
Participants, their Beneficiaries, and their heirs, successors
and assigns, shall have no secured interest or claim in any
property or assets of the Employer. The Employer's obligation
under the Plan shall be merely that of an unfunded and unsecured
promise of the Employer to pay money in the future.
Notwithstanding the foregoing, in the event of a Change in
Control, the Corporation shall create an irrevocable trust, or
before such time the Corporation may create an irrevocable or
revocable trust, to hold funds to be used in payment of the
obligations of Employers under the Plan. In the event of a
Change in Control or prior thereto, the Employers shall fund such
trust in an amount equal to no less than the total value of the
Participants' Accounts under the Plan as of the Determination
Date immediately preceding the Change in Control, provided that
any funds contained therein shall remain liable for the claims of
the respective Employer's general creditors.
10.2 Nonassignability.
No right or interest under the Plan of a Participant or his or
her Beneficiary (or any person claiming through or under any of
them), shall be assignable or transferable in any manner or be
subject to alienation, anticipation, sale, pledge, encumbrance or
other legal process or in any manner be liable for or subject to
the debts or liabilities of any such Participant or Beneficiary.
If any Participant or Beneficiary shall attempt to or shall
transfer, assign, alienate, anticipate, sell, pledge or otherwise
encumber his or her benefits hereunder or any part thereof, or if
by reason of his or her bankruptcy or other event happening at
any time such benefits would devolve upon anyone else or would
not be enjoyed by him or her, then the Committee, in its
discretion, may terminate his or her interest in any such benefit
(including the Deferral Account) to the extent the Committee
considers necessary or advisable to prevent or limit the effects
of such occurrence. Termination shall be effected by filing a
written "termination declaration" with the Secretary of the
Corporation and making reasonable efforts to deliver a copy to
the Participant or Beneficiary whose interest is adversely
affected (the "Terminated Participant").
As long as the Terminated Participant is alive, any benefits
affected by the termination shall be retained by the Employer
and, in the Committee's sole and absolute judgment, may be paid
to or expended for the benefit of the Terminated Participant, his
or her spouse, his or her children or any other person or persons
in fact dependent upon him or her in such a manner as the
Committee shall deem proper. Upon the death of the Terminated
Participant, all benefits withheld from him or her and not paid
to others in accordance with the preceding sentence shall be
disposed of according to the provisions of the Plan that would
apply if he or she died prior to the time that all benefits to
which he or she was entitled were paid to him or her.
10.3 Legal Fees and Expenses.
It is the intent of the Corporation and each Selected Affiliate
that no Eligible Employee or former Eligible Employee be required
to incur the expenses associated with the enforcement of his or
her rights under this Plan by litigation or other legal action
because the cost and expense thereof would substantially detract
from the benefits intended to be extended to an Eligible Employee
hereunder. Accordingly, if after a Change in Control it should
appear that the Employer has failed to comply with any of its
obligations under this Plan or in the event that after a Change
in Control the Employer or any other person takes any action to
declare this Plan void or unenforceable, or institutes any
litigation designed to deny, or to recover from, the Eligible
Employee the benefits intended to be provided to such Eligible
Employee hereunder, the Employer irrevocably authorizes such
Eligible Employee from time to time to retain counsel of his or
her choice, at the expense of the Employer as hereafter provided,
to represent such Eligible Employee in connection with the
initiation or defense of any litigation or other legal action,
whether by or against the Employer or any director, officer,
stockholder or other person affiliated with the Employer in any
jurisdiction. Notwithstanding any existing or prior attorney-
client relationship between the Employer and such counsel, the
Employer irrevocably consents to such Eligible Employee's
entering into an attorney-client relationship with such counsel,
and in that connection the Employer and such Eligible Employee
agree that a confidential relationship shall exist between such
Eligible Employee and such counsel. The Employer shall pay and
be solely responsible for any and all attorneys' and related fees
and expenses incurred by such Eligible Employee as a result of
the Employer's failure after a Change in Control to perform under
this Plan or any provision thereof; or as a result of the
Employer or any person contesting the validity or enforceability
of this Plan or any provision thereof.
10.4 Captions.
The captions contained herein are for convenience only and shall
not control or affect the meaning or construction hereof.
10.5 Governing Law.
The provisions of the Plan shall be construed and interpreted
according to the laws of the Commonwealth of Pennsylvania.
10.6 Successors.
The provisions of the Plan shall bind and inure to the benefit of
the Corporation, its Selected Affiliates, and their respective
successors and assigns. The term successors as used herein shall
include any corporate or other business entity which shall,
whether by merger, consolidation, purchase or otherwise, acquire
all or substantially all of the business and assets of the
Corporation or a Selected Affiliate and successors of any such
corporation or other business entity.
10.7 Right to Continued Service.
Nothing contained herein shall be construed to confer upon any
Employee the right to continue to serve as an Employee of the
Employer or in any other capacity.
Executed this day of December, 1994.
AMP Incorporated
By:
Title:
EXHIBIT A
Re: Section 3.1 -Eligible Employees
Date: January 1, 1995
The Committee has determined that the following named individuals
are eligible to participate in the Plan as Eligible Employees:
Initial
Eligibility
Name Date
H. Cole 01/01/95
D. Cornelius 01/01/95
T. Dalrymple 01/01/95
K. Drysdale 01/01/95
R. Gassner 01/01/95
C. Goonrey 01/01/95
J. Gorjat 01/01/95
P. Guarneschelli 01/01/95
J. Gurski 01/01/95
J. Hassan 01/01/95
D. Hooper 01/01/95
D. Horowitz 01/01/95
W. Hudson 01/01/95
A. Kastel 01/01/95
J. Kegel 01/01/95
R. Knerr 01/01/95
J. Maher 01/01/95
J. Marley 01/01/95
N. Proietto 01/01/95
R. Ripp 01/01/95
B. Savidge 01/01/95
R. Seall 01/01/95
C. Timmins 01/01/95
P. Workinger 01/01/95
D. Wilkie 01/01/95
EXHIBIT B
Re: Section 4.1 - Amount of Deferral
Dated: January 1, 1995
As of the date above, and effective until this Exhibit is
Modified by the Committee, the table below indicates the types of
compensation which are eligible for income deferral at the
assigned percentages as noted:
Type of Compensation Maximum Percentage Other Limitations
that can be deferred
Base Salary 15% Offset by any amount
deferred on a pre-
tax basis in the
Savings Plan.
Deferrals to this
Plan will be
modified to prevent
Participant income
for qualified plan
purposes from
falling below the
limit as described
in IRC Section 401(a)(17)
currently set
$150,000.
Management Incentive
Plan 100% In increments of 25%
Any Other Annual
Cash Bonus Plan of
an Employer 100% In Increments of 25%
EXHIBIT C
Re: Section 2.18 - Investment Return Rate
Date: January 1, 1995
The following indicate the investment account equivalents
available as of the date indicated that are used in determining
the Investment Return Rate.
Account Name Effective Date Description
Fixed Return 1/1/95 120% of the Applicable
Federal Mid-term Rate,
adjusted monthly
AMP Common Stock 1/1/95 Investment credit
equivalent to an
investment in AMP
Incorporated common
shares including
dividend reinvestment
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS
CONTAINED IN THE COMPANY'S 1995
FIRST QUARTER REPORT TO SHAREHOLDERS
AND IS QUALIFIED BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 234,953
<SECURITIES> 144,931
<RECEIVABLES> 953,707
<ALLOWANCES> 0
<INVENTORY> 621,566
<CURRENT-ASSETS> 2,183,119
<PP&E> 3,698,084
<DEPRECIATION> 2,114,255
<TOTAL-ASSETS> 4,057,959
<CURRENT-LIABILITIES> 1,150,762
<BONDS> 0
<COMMON> 12,480
0
0
<OTHER-SE> 2,432,347
<TOTAL-LIABILITY-AND-EQUITY> 4,057,959
<SALES> 1,202,800
<TOTAL-REVENUES> 1,202,800
<CGS> 812,716
<TOTAL-COSTS> 812,716
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,764
<INCOME-PRETAX> 168,504
<INCOME-TAX> 63,700
<INCOME-CONTINUING> 104,804
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 104,804
<EPS-PRIMARY> 0.50
<EPS-DILUTED> 0.50
</TABLE>
