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 September 30, 1997
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
November 4, 1997 was 220,020,159.
Includes an Exhibit Index.
<PAGE>
AMP Incorporated & Subsidiaries
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The Consolidated Statements of Income for the three months and the nine
months ended September 30, 1997 and 1996, the Consolidated Statements of Cash
Flows for the nine months ended September 30, 1997 and 1996, and the
Consolidated Balance Sheets at September 30, 1997 and December 31, 1996, are
presented below. See the notes to these condensed consolidated financial
statements at the end thereof.
<TABLE>
<CAPTION>
AMP Incorporated & Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(dollars in thousands,
except per share data)
For the Three Months
Ended September 30,
<S> <C> <C>
1997 1996
----------- -----------
Net Sales.......................... $ 1,432,600 $ 1,336,233
Cost of Sales...................... 975,768 948,794
----------- -----------
Gross income................... 456,832 387,439
Selling, General and
Administrative Expenses........... 262,938 231,163
----------- -----------
Income from operations......... 193,894 156,276
Interest Expense................... (8,098) (7,959)
Other Income (Deductions), net..... (5,640) (3,520)
----------- -----------
Income before income taxes..... 180,156 144,797
Income Taxes....................... 58,551 49,955
----------- -----------
Net Income......................... $ 121,605 $ 94,842
=========== ===========
PER SHARE DATA:
Net income......................... $.55 $.43
Cash dividends..................... $.26 $.25
Weighted average number of shares.. 220,958,833 219,803,427
=========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMP Incorporated & Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(dollars in thousands,
except per share data)
For the Nine Months
Ended September 30,
<S> <C> <C>
1997 1996
----------- -----------
Net Sales.......................... $ 4,293,472 $ 4,064,695
Cost of Sales...................... 2,980,964 2,829,076
----------- -----------
Gross income................... 1,312,508 1,235,619
Selling, General and
Administrative Expenses........... 768,662 719,842
----------- -----------
Income from operations......... 543,846 515,777
Interest Expense................... (25,160) (24,107)
Other Income (Deductions), net
(see Note 3)..... (29,463) 7,173
----------- -----------
Income before income taxes..... 489,223 498,843
Income Taxes....................... 158,997 171,932
----------- -----------
Net Income Before Cumulative
Effect of Accounting Changes... $ 330,226 $ 326,911
Cumulative Effect of Accounting
Changes (see Note 2)........... 15,450 ---
----------- -----------
Net Income......................... $ 345,676 $ 326,911
=========== ===========
PER SHARE DATA:
Net Income Before Cumulative
Effect of Accounting Changes... $1.50 $1.49
Cumulative Effect of Accounting
Changes (see Note 2).......... .07 ---
----------- -----------
Net income......................... $1.57 $1.49
Cash dividends..................... $ .78 $ .75
Weighted average number of shares.. 220,267,576 219,523,149
=========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMP Incorporated & Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Condensed and Unaudited)
(dollars in thousands)
For the Nine Months
Ended September 30,
<S> <C> <C>
1997 1996
--------- ---------
Cash and Cash
Equivalents at January 1.................. $ 223,779 $ 212,538
Operating Activities:
Net income................................ 345,676 326,911
Noncash adjustments -
Depreciation and amortization........... 330,044 312,032
Cumulative effect of accounting changes
(see Note 2).......................... (22,889) --
Changes in operating assets
and liabilities........................ (141,184) (125,924)
Other, net.............................. 45,956 85,862
--------- ---------
Cash provided by operating
activities........................... 557,603 598,881
--------- ---------
Investing Activities:
Additions to property, plant
and equipment............................ (331,232) (438,787)
Purchase of subsidiaries -
Net of cash and cash equivalents
acquired........................... -- (36,977)
Other, net................................ (5,108) (77,603)
--------- ---------
Cash used for investing
activities........................... (336,340) (553,367)
--------- ---------
Financing Activities:
Changes in short-term debt................ 27,165 122,083
Additions to long-term debt............... 11,945 10,272
Reductions of long-term debt.............. (19,064) (25,423)
Purchases of treasury stock............... (2,636) (269)
Dividends paid............................ (171,138) (164,043)
--------- ---------
Cash used for financing
activities........................... (153,728) (57,380)
--------- ---------
Effect of Exchange Rate Changes
on Cash.................................... 1,235 2,568
--------- ---------
Cash and Cash Equivalents at
September 30.............................. $ 292,549 $ 203,240
========= =========
Changes in Operating Assets and Liabilities:
Receivables............................... $(117,863) $ (67,378)
Inventories............................... (87,412) (77,514)
Other current assets...................... (720) (10,241)
Payables, trade and other................. 10,361 (17,211)
Accrued payrolls and benefits............. 56,634 34,786
Other accrued liabilities................. (2,184) 11,634
--------- ---------
$(141,184) $(125,924)
========= =========
Interest paid during the period was approximately equal to amounts charged
to expense.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMP Incorporated & Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Condensed)
(dollars in thousands)
September 30, December 31,
1997 1996
----------- -----------
ASSETS (unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents.......... $ 292,549 $ 223,779
Securities available for sale...... 52,539 27,971
Receivables........................ 1,086,844 1,025,850
Inventories........................ 870,136 786,623
Other current assets............... 268,082 291,957
----------- -----------
Total current assets........... 2,570,150 2,356,180
----------- -----------
Property, Plant and Equipment........ 4,687,131 4,690,819
Less - Accumulated depreciation.... 2,745,344 2,663,211
----------- -----------
Property, plant and equipment,
net........................... 1,941,787 2,027,608
----------- -----------
Investments and Other Assets......... 296,074 301,917
----------- -----------
TOTAL ASSETS......................... $ 4,808,011 $ 4,685,705
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term debt.................... $ 422,701 $ 419,411
Payables, trade and other.......... 441,715 463,261
Accrued liabilities................ 589,569 562,223
----------- -----------
Total current liabilities........ 1,453,985 1,444,895
Long-Term Debt....................... 172,703 181,599
Other Liabilities and
Deferred Credits................... 283,364 269,313
----------- -----------
Total liabilities................ 1,910,052 1,895,807
Shareholders' Equity................. 2,897,959 2,789,898
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY.............................. $ 4,808,011 $ 4,685,705
=========== ===========
</TABLE>
<PAGE>
AMP Incorporated & Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(September 30, 1997, 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, and Form 10-Q as of and for the three months ended March 31, 1997
and as of and for the six months ended June 30, 1997.
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.
Net Income and Cash Dividends per share: per share amounts were calculated
using the weighted average number of shares outstanding during each period,
adjusted for the impact of the Company's stock option and restricted stock plans
using the Treasury Stock Method when the effect is dilutive.
2. ACCOUNTING CHANGES
During the first quarter of 1997, the Company made two changes to the
accounting practices used to develop its inventory standard costs. The first
change was made to standardize globally the definition of capacity used to
determine volume assumptions for overhead rates. The new definition more
properly reflects the Company's objectives for plant and equipment utilization
and provides for consistent measurements of AMP facilities.
In an effort to provide increased focus on engineering efforts for both
product development and manufacturing cost reductions, the Company also changed
its inventory costing methodology to include manufacturing engineering costs in
the inventory standard costs. Previously, these costs were expensed in the
period incurred and included in the cost of sales line on the Consolidated
Statement of Income.
The net benefit of the preceding changes in accounting for inventory of
$15.5 million, or $.07 per share, was presented as a cumulative effect of
accounting changes on the Consolidated Statement of Income for the nine months
ended September 30, 1997.
In February of 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share." This
statement changes the required methods used to calculate earnings per share
data, harmonizing U.S. GAAP requirements with that of International Accounting
Standards No. 33. The major change from the previous calculation is the
disclosure of basic EPS, which is computed by dividing reported earnings by the
weighted average common shares outstanding (without any adjustments for common
stock equivalents), versus the current primary EPS calculation required by the
superseded APB Opinion No. 15. Fully diluted EPS, now called diluted EPS, is
still required, with the average market price of common stock used to determine
common stock equivalents rather than the greater of the average market price or
period ending closing price. This statement must be adopted by the Company in
the fourth quarter of 1997 with restatement at that time of all prior periods
presented. The effect on the Company's EPS as a result of this rule change is
not expected to be significant.
3. IMT/CONNECTWARE LITIGATION
In the second quarter of 1997, the Company recorded a litigation reserve of
$17.7 million, pretax ($.05 per share) in connection with the IMT/Connectware
arbitration decision. This litigation was settled on September 12, 1997 and
resulted in a payment to IMT in the third quarter of 1997.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Net sales for the third quarter of 1997 were $1.433 billion, representing
an increase of 7.2% in U.S. dollars and 12.9% in local currencies from the
$1.336 billion in the corresponding quarter of the prior year. For the nine
months ended September 30, 1997, net sales were $4.293 billion, representing an
increase of 5.6% in U.S. dollars and 10.3% in local currencies from the $4.065
billion for the nine months ending September 30, 1996. Further strengthening of
the U.S. dollar in 1997 decreased worldwide net sales by $76 million for the
quarter and $191 million for the nine months ending September 30, 1997.
Bookings for the third quarter were $1.436 billion, representing an
increase of 8.4% in U.S. dollars and 14.4% in local currencies from the $1.325
billion in the corresponding quarter of the prior year. The Company's order
backlog stood at $1.044 billion at September 30, 1997, representing a slight
increase from the $1.041 billion at June 30, 1997. After adjusting for the
negative effects of currency changes, the Company's order backlog increased $15
million from June 30, 1997.
Sales growth was broad-based across all of the Company's major market
segments, and the Company continued to see the improving effectiveness of its
global automotive, communications, personal computer, and power technology
divisions. The Company is encouraged by the breadth of net sales growth. Net
sales also increased across most of the Company's products and all three of the
Company's geographies.
For the quarter ending September 30, 1997, net sales in the Americas region
(including the United States), accounting for 50% of the worldwide total,
increased 9% over the comparable prior year period. The Company experienced
solid growth in the communications equipment, networking, instrumentation, and
electronic/electrical component markets. U.S. net sales increased 9%, while
Argentina, Canada and Mexico led the rest of the Americas with double digit
growth. For the nine months ending September 30, 1997, net sales increased 8%
over the comparable prior year period.
Net sales in the European, Middle East, and Africa region, accounting for
30% of the worldwide total, increased 17% in local currencies and 2% in U.S.
dollars in the third quarter of 1997 over the comparable prior year period.
Overall, growth accelerated in most European countries during the third quarter
of 1997. In Germany, growth was approximately 13% in local currency, buoyed by
automobile exports. Northern Europe and Spain continued their pattern of strong
growth. Regional growth was strongest in the motor vehicles, computers, and
communications equipment markets. For the nine months ending September 30, 1997,
net sales increased 10% in local currencies but decreased slightly in U.S.
dollars, by 1% over the comparable prior year period, primarily due to slow
sales growth in the first quarter of 1997.
For the quarter ending September 30, 1997, net sales in the Asia/Pacific
region, accounting for 20% of the worldwide total, increased 16% in local
currencies and 9% in U.S. dollars over the comparable prior year period. The
moderation of growth in the region during the quarter was due to sustained
weakness in the Japanese economy and some abatement of what was previously
exceptional demand in the personal computer markets. Japan grew approximately 7%
in local currency. The strongest growth occurred in the computer, communications
equipment, and business/retail equipment markets. For the nine months ending
September 30, 1997, net sales increased 18% in local currencies and 10% in U.S.
dollars over the comparable prior year period.
Gross income increased to 31.9% of net sales for the quarter ending
September 30, 1997, from 29.0% in the comparable prior year quarter. The
increase in gross margin was primarily due to the benefits of cost reduction
programs and the benefits of the Company's restructuring actions being realized
in the third quarter of 1997.
Selling, general, and administrative expenses (S,G&A) for the quarter
ending September 30, 1997 of 18.4% of net sales represents an increase from
17.3% in the comparable prior year quarter. The increase in S,G&A expenses is
primarily related to additional investments in information systems and sales
deployment.
Net income for the third quarter of 1997 was $121.6 million ($0.55 per
share), representing a 28% increase from the third quarter of 1996 net income of
$94.8 million ($0.43 per share).
Capital expenditures for the third quarter of 1997 were $101 million,
representing a 30% decrease from the $145 million in the comparable prior year
quarter. The Company continues to focus on improving existing asset utilization
and productivity. Investment in research, development, and new product
engineering remained level with the prior year and consistent with the Company's
strategy of technological and product leadership. Capital expenditures for 1997
are expected to be in the $500 - $525 million range, down from the 1996 capital
expenditures of $592 million.
During the third quarter of 1997, the Company concluded all remaining
operating shut-downs, that were part of the restructuring plans announced in
December 1996. All product discontinuances and plant closures are now complete
and the benefits of the Company's restructuring actions were largely reflected
in the margin improvements posted in the third quarter of 1997.
DIVIDEND ACTION
- ---------------
On October 22, 1997, the Board of Directors declared a regular quarterly
dividend of 26 cents per share, payable Dec. 1, 1997 to shareholders of record
Nov. 3, 1997. The total 1997 dividend of $1.04 per share is up from $1.00 in
1996 and 92 cents in 1995, and is the 44th consecutive annual increase.
CAUTIONARY STATEMENTS FOR PURPOSES OF THE "SAFE HARBOR"
- -------------------------------------------------------
Statements in this Report on Form 10-Q that are not strictly historical
facts are "forward-looking" statements which should be considered as subject to
the many uncertainties that exist in the company's operations and business
environment. These uncertainties, which include economic and currency
conditions, market demand and pricing, competitive and cost factors, and the
like, are set forth in the AMP Report on Form 10-K for the year ended December,
31, 1996 filed with the Securities and Exchange Commission on March 27, 1997.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In the Company's Report on Form 10-Q for the period ended June 30, 1997,
the Company disclosed the creation of a litigation reserve to cover a $17.7
million arbitration panel award against Connectware, Inc., a Delaware
corporation and wholly owned subsidiary of the Company. The Company further
reported that an appeal of the arbitration award had been filed. In August,
1997 the 193rd Judicial District Court, Dallas County, Texas entered judgment
confirming the arbitration award and ordering post-arbitration award interest
and post-judgment interest. Effective September 12, 1997 all parties to the
matter executed a Compromise Settlement Agreement and Release settling the
matter on terms agreeable to the parties. Further, on October 15, 1997, the
Court of Appeals for the Fifth District of Texas at Dallas, upon joint motion
of the parties, vacated the decision of the District Court and dismissed the
cause with prejudice.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits --
10.A Second Amendment to the AMP Incorporated 1993 Long-Term Equity
Incentive Plan effective as of July 22, 1997.
10.B Fourth Amendment to the AMP Incorporated Deferred Compensation Plan
for select management and highly compensated employees effective
July 22, 1997.
10.C First Amendment to the AMP Incorporated Supplemental Executive Pension
Plan effective July 22, 1997.
10.D First Amendment to the Supplemental Benefit Trust Agreement effective
September 25, 1997.
10.E Second Amendment to the AMP Incorporated Stock Option Plan for
Outside Directors effective July 22, 1997.
10.F Second Amendment to the Deferred Compensation Plan for Non-Employee
Directors effective as of July 22, 1997.
10.G Second Amendment to the Deferred Stock Accumulation Plan for Outside
Directors effective as of July 22, 1997.
10.H First Amendment to the Retirement Plan for Outside Directors effective
as of July 22, 1997.
10.I First Amendment to the Split-Dollar Life Insurance Agreement in the
form dated January 1995, Amendment effective as of September 25, 1997.
10.J Second Amendment to the Split-Dollar Life Insurance Agreement in the
form dated October 1990, Amendment effective as of September 25, 1997.
10.K Fifth Amendment to the AMP Incorporated Pension Plan dated
October 1, 1997.
10.L Third Amendment to the AMP Incorporated Pension Restoration Plan dated
August 6, 1997.
27 Financial Data Schedule
(B) Reports on Form 8-K --
A Current Report on Form 8-K was filed by the Company on July 8, 1997. In
Item 5 of the Report on Form 8-K the Company disclosed action taken by
Connectware, Inc., a wholly owned subsidiary of AMP Incorporated, to file an
appeal with the Texas State Court seeking to reverse a July 1, 1997 adverse
decision by the majority of an arbitration panel considering certain claims
filed by Connectware and IMT, Inc., a corporation based in Texas.
<PAGE>
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: November 13, 1997 AMP INCORPORATED
(Registrant)
By: /s/ Robert Ripp
----------------------------------
R. Ripp
Vice President and
Chief Financial Officer
By: /s/ William S. Urkiel
----------------------------------
William S. Urkiel
Vice President, Finance
EXHIBIT INDEX
-------------
Exhibit
Number Description
- ------- -----------
(A) Exhibits --
10.A Second Amendment to the AMP Incorporated 1993 Long-Term Equity
Incentive Plan effective as of July 22, 1997.
10.B Fourth Amendment to the AMP Incorporated Deferred Compensation Plan
for select management and highly compensated employees effective
July 22, 1997.
10.C First Amendment to the AMP Incorporated Supplemental Executive Pension
Plan effective July 22, 1997.
10.D First Amendment to the Supplemental Benefit Trust Agreement effective
September 25, 1997.
10.E Second Amendment to the AMP Incorporated Stock Option Plan for
Outside Directors effective July 22, 1997.
10.F Second Amendment to the Deferred Compensation Plan for Non-Employee
Directors effective as of July 22, 1997.
10.G Second Amendment to the Deferred Stock Accumulation Plan for Outside
Directors effective as of July 22, 1997.
10.H First Amendment to the Retirement Plan for Outside Directors effective
as of July 22, 1997.
10.I First Amendment to the Split-Dollar Life Insurance Agreement in the
form dated January 1995, Amendment effective as of September 25, 1997.
10.J Second Amendment to the Split-Dollar Life Insurance Agreement in the
form dated October 1990, Amendment effective as of September 25, 1997.
10.K Fifth Amendment to the AMP Incorporated Pension Plan dated
October 1, 1997.
10.L Third Amendment to the AMP Incorporated Pension Restoration Plan dated
August 6, 1997.
27 Financial Data Schedule
Second Amendment
to the
AMP Incorporated 1993 Long Term Equity Incentive Plan
(as Amended and Restated Effective January 1, 1995)
Pursuant to an action taken by the Board of Directors of AMP Incorporated
on July 22, 1997, the AMP Incorporated 1993 Long Term Equity Incentive Plan, as
amended and restated in its entirety effective January 1, 1995 and amended in
part effective as of October 23, 1996 by the First Amendment to the AMP
Incorporated 1993 Long Term Equity Incentive Plan (the "1993 Plan"), is further
amended effective as of July 22, 1997 in the following respects:
1. Section 12(a)(iii) of the 1993 Plan is amended to delete the term "50%" in
subpart (A) thereof and to substitute the term "66 2/3%" in lieu thereof.
2. The first paragraph of Section 18(b) of the 1993 Plan is amended and
restated as follows:
"b) The Committee may, in its sole discretion, either at the time of an
Award under the Plan or thereafter upon request of a Participant,
authorize all or a portion of the Options granted or to be granted to
a Participant to be on terms that permit the transfer of such Options
by the Participant to (i) the spouse, children or grandchildren of
Participant (the "Immediate Family Members"), (ii) a trust or trusts
for the exclusive benefit of such Immediate Family Members, (iii) a
partnership in which such Immediate Family Members are the only
partners, or (iv) such other persons or entities as the Committee, in
its sole discretion, may permit. Such transfer of Options by a
Participant shall only be permitted if 1) the Option Agreements
covering the transferable Options are approved or amended by the
Committee and expressly provide for transferability in a manner
consistent with this Section 18, 2) subsequent transfers of
transferred Options are prohibited except to the extent they occur by
will or by the laws of descent and distribution, and 3) the
Participant remains responsible for any Federal, state and/or local
withholding tax requirements upon exercise of the transferred
Options."
Except as provided above, all terms, conditions and provisions of the 1993
Plan shall remain in full force and effect and without any further change or
modification whatsoever.
Executed this 25th day of September, 1997.
AMP Incorporated
Attest:___________________ By: _________________________
Corporate Secretary J. E. Marley
Chairman
Fourth Amendment
to the
AMP Incorporated Deferred Compensation Plan
Pursuant to an action taken by the Board of Directors of AMP Incorporated
on July 22, 1997, the AMP Incorporated Deferred Compensation Plan, as first
adopted effective January 1, 1995 and subsequently amended on three prior
occasions (the "Plan"), is further amended effective as of July 22, 1997 in the
following respect:
1. Section 2.6(a)(iii) of the Plan is amended to delete the term "50%" in
subpart (A) thereof and to substitute the term "66 2/3%" in lieu
thereof.
Except as provided above, all terms, conditions and provisions of the Plan
shall remain in full force and effect and without any further change or
modification whatsoever.
Executed this 25th day of September, 1997.
AMP Incorporated
Attest:___________________ By: _________________________
Corporate Secretary J. E. Marley
Chairman
First Amendment
to the
AMP Incorporated Supplemental Executive Pension Plan
Pursuant to an action taken by the Board of Directors of AMP Incorporated
on July 22, 1997, the AMP Incorporated Supplemental Executive Pension Plan, as
first adopted effective January 1, 1997, (the "Plan"), is amended effective as
of July 22, 1997 in the following respect:
1. Section 9.3(c) of the Plan is amended to delete the term "50%" in
subpart (A) thereof and to substitute the term "66 2/3%" in lieu
thereof.
Except as provided above, all terms, conditions and provisions of the Plan
shall remain in full force and effect and without any further change or
modification whatsoever.
Executed this 25th day of September, 1997.
AMP Incorporated
Attest:___________________ By: _________________________
Corporate Secretary J. E. Marley
Chairman
First Amendment Agreement
AMP Incorporated Supplemental Benefit Trust Agreement
This FIRST AMENDMENT AGREEMENT (the "Amendment") is made this 25th day of
September, 1997 by and between AMP Incorporated, a corporation organized and
existing under the laws of the Commonwealth of Pennsylvania ("AMP"), and Dauphin
Deposit Bank and Trust Company, a banking association organized and existing
under the laws of the Commonwealth of Pennsylvania (the "Trustee").
WITNESSETH:
WHEREAS, AMP and the Trustee entered into a Supplemental Benefit Trust
Agreement on April 1, 1997 (the "Agreement") under which AMP established with
the Trustee certain funded Trusts, Fee Trusts and Shortfall Trusts, as defined
in the Agreement, to provide both a source of payment of benefits to be provided
to designated participants under certain supplemental retirement and life
insurance plans, deferred compensation plans and severance arrangements and a
source of payment of fees incurred by either the Trustee in the administration
of the Trusts or by said participants in enforcing their rights under the
Agreement;
WHEREAS, pursuant to Section 12.1 of the Agreement AMP may, from time to
time, amend the provisions of the Agreement without the written consent of
Trustee, provided that such amendments do not make the Agreement revocable or
increase the duties of the Trustee, and Trustee has agreed pursuant to Section
12.2 to execute any amendment agreements that may be necessary to give effect to
said amendments; and
WHEREAS, AMP desires to amend the Agreement as hereinafter set forth, which
amendments neither render the Agreement revocable nor increase the duties of the
Trustee.
NOW, THEREFORE, in consideration of the premises and the agreements and
covenants contained herein, AMP and the Trustee, intending to be legally bound
hereby, agree as follows:
1. Section 16.3(c) of the Agreement is amended to delete the term "50%"
in subpart (A) thereof and to substitute the term "66 2/3%" in lieu
thereof.
It is expressly understood and agreed that, except as provided above, all
terms, conditions and provisions contained in the Agreement shall remain in full
force and effect and without any further change or modification whatsoever.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as
of the date first above written.
ATTEST:________________________ AMP Incorporated
Corporate Secretary
By: __________________________________
Title:__________________________________
Dauphin Deposit Bank and Trust
ATTEST:_______________________ Company (as Trustee)
Secretary
By: __________________________________
Title:__________________________________
Second Amendment
to the
AMP Incorporated Stock Option Plan for Outside Directors
Pursuant to an action taken by the Board of Directors of AMP Incorporated
on July 22, 1997, the AMP Incorporated Stock Option Plan for Outside Directors,
as amended effective as of October 23, 1996 by the First Amendment to the AMP
Incorporated Stock Option Plan for Outside Directors (the "Plan"), is further
amended effective as of July 22, 1997 in the following respect:
1. Section 7(a)(iii) of the Plan is amended to delete the term "50%" in
subpart (A) thereof and to substitute the term "66 2/3%" in lieu
thereof.
Except as provided above, all terms, conditions and provisions of the Plan
shall remain in full force and effect and without any further change or
modification whatsoever.
Executed this 25th day of September, 1997.
AMP Incorporated
Attest:___________________ By: _________________________
Corporate Secretary J. E. Marley
Chairman
Second Amendment
to the
AMP Incorporated Deferred Compensation Plan for Non-Employee Directors
Pursuant to an action taken by the Board of Directors of AMP Incorporated
on July 22, 1997, the AMP Incorporated Deferred Compensation Plan for
Non-Employee Directors, as amended effective as of October 23, 1996 by the First
Amendment to the AMP Incorporated Deferred Compensation Plan for Non-Employee
Directors (the "Plan"), is further amended effective as of July 22, 1997 in the
following respect:
1. Section 8(b)(iii) of the Plan is amended to delete the term "50%" in
subpart (A) thereof and to substitute the term "66 2/3%" in lieu
thereof.
Except as provided above, all terms, conditions and provisions of the Plan
shall remain in full force and effect and without any further change or
modification whatsoever.
Executed this 25th day of September, 1997.
AMP Incorporated
Attest:___________________ By: _________________________
Corporate Secretary J. E. Marley
Chairman
Second Amendment
to the
AMP Incorporated Deferred Stock Accumulation Plan for Outside
Directors
Pursuant to an action taken by the Board of Directors of AMP Incorporated
on July 22, 1997, the AMP Incorporated Deferred Stock Accumulation Plan for
Outside Directors, as amended effective as of October 23, 1996 by the First
Amendment to the AMP Incorporated Deferred Stock Accumulation Plan for Outside
Directors (the "Plan"), is further amended effective as of July 22, 1997 in the
following respect:
1. Section 7(b)(iii) of the Plan is amended to delete the term "50%" in
subpart (A) thereof and to substitute the term "66 2/3%" in lieu
thereof.
Except as provided above, all terms, conditions and provisions of the Plan
shall remain in full force and effect and without any further change or
modification whatsoever.
Executed this 25th day of September, 1997.
AMP Incorporated
Attest:___________________ By: _________________________
Corporate Secretary J. E. Marley
Chairman
First Amendment
to the
AMP Incorporated Retirement Plan for Outside Directors
(as Amended and Restated Effective as of October 23, 1996)
Pursuant to an action taken by the Board of Directors of AMP Incorporated
on July 22, 1997, the AMP Incorporated Retirement Plan for Outside Directors, as
amended and restated in its entirety effective as of October 23, 1996 (the
"Plan"), is amended effective as of July 22, 1997 in the following respect:
1. Section 4(b)(iii) of the Plan is amended to delete the term "50%" in
subpart (A) thereof and to substitute the term "66 2/3%" in lieu
thereof.
Except as provided above, all terms, conditions and provisions of the Plan
shall remain in full force and effect and without any further change or
modification whatsoever.
Executed this 25th day of September, 1997.
AMP Incorporated
Attest:___________________ By: _________________________
Corporate Secretary J. E. Marley
Chairman
First Amendment Agreement
AMP Incorporated Split-Dollar Life Insurance
This FIRST AMENDMENT AGREEMENT (the "Amendment") is made this 25th day of
September, 1997 by and between AMP Incorporated, a Pennsylvania corporation
having its principal place of business in Harrisburg, Pennsylvania (the
"Corporation"), and ____________________ (the "Employee").
WITNESSETH:
WHEREAS, the Corporation and the Employee entered into a Split-Dollar Life
Insurance Agreement originally effective January 1, 1995 (the "Agreement") 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 as an inducement to the Employee's continued employment;
WHEREAS, Section 6.2 of the Agreement provides that the Agreement may be
amended by express written agreement signed by both the Employee and a duly
authorized representative of the Corporation; and
WHEREAS, the Corporation desires, in agreement with the Employee, to amend
the Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the agreements and
covenants contained herein, the Corporation and the Employee, intending to be
legally bound hereby, agree as follows:
1. Section 5.4 is hereby deleted in its entirety and the following is
substituted in its place:
"5.4 Rights Upon a Change in Control.
(a) 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.
(b) For the purpose of this Agreement, a change of control of the
Corporation ("Change of Control") shall be deemed to have occurred if
the event set forth in any one of the following paragraphs shall have
occurred:
(i) any Person (as defined below) is or becomes the beneficial owner
(as defined in Rule 13d-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act")), directly or indirectly,
of securities of the Corporation (not including in the securities
beneficially owned by such Person any securities acquired
directly from the Corporation or its affiliates) representing 30%
or more of either the then outstanding shares of common stock of
the Corporation or the combined voting power of the Corporation's
then outstanding securities; or
(ii) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals
who, on the date hereof, constitute the Board and any new
director (other than a director whose initial assumption of
office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation,
relating to the election of directors of the Corporation) whose
appointment or election by the Board or nomination for election
by the Corporation's stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who
either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved;
or
(iii) there is consummated a merger or consolidation of the
Corporation with any other corporation or the issuance of voting
securities of the Corporation in connection with a merger or
consolidation of the Corporation (or any direct or indirect
subsidiary of the Corporation) pursuant to applicable stock
exchange requirements, other than (A) a merger or consolidation
that would result in the voting securities of the Corporation
outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or
any parent thereof) at least 66 2/3% of the combined voting power
of the voting securities of the Corporation, or such surviving
entity or any parent thereof, outstanding immediately after such
merger or consolidation, or (B) a merger or consolidation
effected to implement a recapitalization of the Corporation (or
similar transaction) in which no Person is or becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Corporation
(not including in the securities beneficially owned by such
Person any securities acquired directly from the Corporation or
its affiliates) representing 30% or more of either the then
outstanding shares of common stock of the Corporation or the
combined voting power of the Corporation's then outstanding
securities; or
(iv) the stockholders of the Corporation approve a plan of complete
liquidation or dissolution of the Corporation or there is
consummated an agreement for the sale or disposition by the
Corporation of all or substantially all of the Corporation's
assets, other than a sale or disposition by the Corporation of
all or substantially all of the Corporation's assets to an
entity, at least 70% of the combined voting power of the voting
securities of which are owned by Persons in substantially the
same proportions as their ownership of the Corporation
immediately prior to such sale.
(c) Person. For the purpose of this Agreement, "Person" shall have the
meaning given in Section 3(a)(9) of the Exchange Act, as modified and
used in Sections 13(d) and 14(d) thereof, except that such term shall
not include:
(i) the Corporation or any of its subsidiaries;
(ii) a trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation or any of its subsidiaries;
(iii) an underwriter temporarily holding securities pursuant to an
offering of such securities; or
(iv) a corporation owned, directly or indirectly, by the stockholders
of the Corporation in substantially the same proportions as their
ownership of stock of the Corporation.
It is expressly understood and agreed that, except as provided above, all
terms, conditions and provisions contained in the Agreement shall remain in full
force and effect and without any further change or modification whatsoever.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as
of the date first above written.
______________________________ ________________________________
Witness for Employee Signature Employee Signature
Attest:_________________________ AMP Incorporated
Corporate Secretary
By: ________________________________
Title: ________________________________
Second Amendment Agreement
AMP Incorporated Split-Dollar Life Insurance
This SECOND AMENDMENT AGREEMENT (the "Amendment") is made this 25th day of
September, 1997 by and between AMP Incorporated, a Pennsylvania corporation
having its principal place of business in Harrisburg, Pennsylvania (the
"Corporation"), and ____________________ (the "Employee").
WITNESSETH:
WHEREAS, the Corporation and the Employee entered into a Split-Dollar Life
Insurance Agreement originally effective October 1, 1990 and amended by a First
Amendment dated and effective March 1, 1995 (the "Agreement"), 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
as an inducement to the Employee's continued employment;
WHEREAS, Section 6.2 of the Agreement provides that the Agreement may be
amended by express written agreement signed by both the Employee and a duly
authorized representative of the Corporation; and
WHEREAS, the Corporation desires, in agreement with the Employee, to amend
the Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the agreements and
covenants contained herein, the Corporation and the Employee, intending to be
legally bound hereby, agree as follows:
1. Section 5.4 is hereby deleted in its entirety and the following is
substituted in its place:
"5.4 Rights Upon a Change in Control.
(a) 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.
(b) For the purpose of this Agreement, a change of control of the
Corporation ("Change of Control") shall be deemed to have occurred if
the event set forth in any one of the following paragraphs shall have
occurred:
(i) any Person (as defined below) is or becomes the beneficial owner
(as defined in Rule 13d-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act")), directly or indirectly,
of securities of the Corporation (not including in the securities
beneficially owned by such Person any securities acquired
directly from the Corporation or its affiliates) representing 30%
or more of either the then outstanding shares of common stock of
the Corporation or the combined voting power of the Corporation's
then outstanding securities; or
(ii) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals
who, on the date hereof, constitute the Board and any new
director (other than a director whose initial assumption of
office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation,
relating to the election of directors of the Corporation) whose
appointment or election by the Board or nomination for election
by the Corporation's stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who
either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved;
or
(iii) there is consummated a merger or consolidation of the
Corporation with any other corporation or the issuance of voting
securities of the Corporation in connection with a merger or
consolidation of the Corporation (or any direct or indirect
subsidiary of the Corporation) pursuant to applicable stock
exchange requirements, other than (A) a merger or consolidation
that would result in the voting securities of the Corporation
outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or
any parent thereof) at least 66 2/3% of the combined voting power
of the voting securities of the Corporation, or such surviving
entity or any parent thereof, outstanding immediately after such
merger or consolidation, or (B) a merger or consolidation
effected to implement a recapitalization of the Corporation (or
similar transaction) in which no Person is or becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Corporation
(not including in the securities beneficially owned by such
Person any securities acquired directly from the Corporation or
its affiliates) representing 30% or more of either the then
outstanding shares of common stock of the Corporation or the
combined voting power of the Corporation's then outstanding
securities; or
(iv) the stockholders of the Corporation approve a plan of complete
liquidation or dissolution of the Corporation or there is
consummated an agreement for the sale or disposition by the
Corporation of all or substantially all of the Corporation's
assets, other than a sale or disposition by the Corporation of
all or substantially all of the Corporation's assets to an
entity, at least 70% of the combined voting power of the voting
securities of which are owned by Persons in substantially the
same proportions as their ownership of the Corporation
immediately prior to such sale.
(c) Person. For the purpose of this Agreement, "Person" shall have the
meaning given in Section 3(a)(9) of the Exchange Act, as modified and
used in Sections 13(d) and 14(d) thereof, except that such term shall
not include:
(i) the Corporation or any of its subsidiaries;
(ii) a trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation or any of its subsidiaries;
(iii) an underwriter temporarily holding securities pursuant to an
offering of such securities; or
(iv) a corporation owned, directly or indirectly, by the stockholders
of the Corporation in substantially the same proportions as their
ownership of stock of the Corporation.
It is expressly understood and agreed that, except as provided above, all
terms, conditions and provisions contained in the Agreement shall remain in full
force and effect and without any further change or modification whatsoever.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as
of the date first above written.
______________________________ ________________________________
Witness for Employee Signature Employee Signature
Attest:_________________________ AMP Incorporated
Corporate Secretary
By: ________________________________
Title: ________________________________
FIFTH AMENDMENT
TO THE
AMP INCORPORATED PENSION PLAN
(as amended and restated in its entirety effective January 1, 1989, and
incorporating further amendments through January 1, 1995)
The AMP Incorporated Pension Plan is maintained pursuant to an amended and
restated document that has a general effective date of January 1, 1989, which
document incorporates further amendments made to the Plan that were effective
through January 1, 1995 and has been further amended on four prior occasions.
Said document is hereby further amended as hereinafter set forth.
1. Section 2.1 of the Plan is hereby amended, effective as of October 1, 1997,
to provide as follows:
2.1 Each Employee who was a Participant in the Plan immediately before
January 1, 1989 shall continue to be a Participant in the Plan on
January 1, 1989.
Each other Employee who completes the eligibility requirements
specified in Section 2.2 on or after January 1, 1989 shall become a
Participant on the first day of the month coincident with or next
following the date on which he completed the eligibility requirements.
In no event, however, shall an Employee become or continue as a
Participant if he:
(A) is a member of a collective bargaining unit covered under a
collective bargaining agreement unless such agreement provides
for coverage of such bargaining unit members in the Plan, or
(B) is a director of the Company who is not otherwise an Employee, or
(C) is deemed to be a leased employee for purposes of this Plan under
Section 414(n) of the Code, or
(D) is an Employee on or after January 1, 1995 of the Company's
Aerospace and Government Systems West operation (i.e., an
employee recorded and accounted for in the Company's records in
company #50000), or
(E) is an Employee on or after December 1, 1995, of the Company's
operating unit or division established as a result of the
November 30, 1995 merger into the Company of Kaptron, Inc. for
the purpose of continuing the business operations of Kaptron,
Inc., or
(F) is an Employee on or after January 1, 1996 of a Company operating
unit or division established as a result of the December 31, 1995
mergers into the Company of AMP Packaging Systems, Inc., Carroll
Touch, Inc., and Precision Interconnect, Inc. for the purpose of
continuing the business operations of such former wholly- owned
subsidiaries of the Company, or
(G) is an Employee on or after January 1, 1996, of a Company
operating unit or division established as a result of the merger
into the Company of QLP Laminates, Inc. for the purpose of
continuing the business operations of such former wholly-owned
subsidiary, or
(H) is an Employee on or after July 1, 1996 of a Company operating
unit or division established as a result of the June 30, 1996
merger into the Company of the AMP Circuits Company for the
purpose of continuing the business operations of the former
AMP-AKZO joint venture, or
(I) is an Employee on or after November 1, 1996 of a Company
operating unit or division established as a result of the October
31, 1996 and November 7, 1996 acquisitions by the Company of the
assets of GCA Partners for the purpose of continuing the business
operations of such partnership, or
(J) is an Employee on or after October 1, 1997 of a Company operating
unit or division established as a result of the September 30,
1997 merger into the Company of M/A-COM, Inc. for the purpose of
continuing the business operations of such former wholly owned
subsidiary.
2. Section 4.16 of the Plan is amended, effective July 22, 1997, by the
deletion of final sentence thereof, which defines "change in control" for
purposes of the Plan, and the substitution in its place of the following:
For purposes hereof, a "change in control" shall be deemed to have occurred
if the event set forth in anyone of the following paragraphs shall have
occurred:
i. any Person (as defined below) is or becomes the beneficial owner
(as defined in Rule 13d-3 under the Securities Exchange Act of
1934 (the "Exchange Act")), directly or indirectly, of securities
of the Company (not included in the securities beneficially owned
by such Person any securities acquired directly from the Company
or its affiliates) representing 30% or more of either the then
outstanding shares of common stock of the Company or the combined
voting power of the Company's then outstanding securities; or
ii. the following individuals cease for any reason to constitute a
majority of the number of directors then serving on the Board of
Directors: individuals who, on the effective date hereof,
constitute the Board of Directors and any new director (other
than a director whose initial assumption of office is in
connection with an actual or threatened election contest,
including but not limited to a consent solicitation, relating to
the election of directors of the Company) whose appointment or
election by the Board of Directors or nomination for election by
the Company's stockholders was approved by a vote of at least
two- thirds (2/3) of the directors then still in office who
either were directors on the effective date hereof or whose
appointment, election or nomination for election was previously
so approved; or
iii. there is consummated a merger or consolidation of the Company
with any other corporation or the issuance of voting securities
of the Company in connection with a merger or consolidation of
the Company (or any direct or indirect subsidiary of the Company)
pursuant to applicable stock exchange requirements, other than
(A) a merger or consolidation that would result in the voting
securities of the Company outstanding immediately prior to such
merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof) at
least 66-2/3% of the combined voting power of the voting
securities of the Company, or such surviving entity or any parent
thereof, outstanding immediately after such merger or
consolidation, or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar
transaction) in which no Person is or becomes the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities
acquired directly from the Company or its affiliates)
representing 30% or more of either the then outstanding shares of
common stock of the Company or the combined voting power of the
Company's then outstanding securities; or
iv. the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated
an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets, other than a sale or
disposition by the Company of all or substantially all of the
Company's assets to an entity, at least 70% of the combined
voting power of the voting securities of which are owned by
Persons in substantially the same proportions as their ownership
of the Company immediately prior to such sale.
For the purpose of this Section, "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d)
and 14(d) thereof, except that such term shall not include:
(i) the Company or any of its subsidiaries;
(ii) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company of any of its subsidiaries;
(iii) an underwriter temporarily holding securities pursuant to an
offering of such securities; or
(iv) a corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their
ownership of stock of the Company.
EXECUTED at Harrisburg, Pennsylvania this _____ day of __________, 1997.
AMP Incorporated
By:______________________________
Its:_____________________________
And:_____________________________
Its:_____________________________
THIRD AMENDMENT
to the
AMP INCORPORATED
PENSION RESTORATION PLAN
The AMP Incorporated Pension Restoration Plan (the "Plan"), as amended and
restated in its entirety effective January 1, 1995, and thereafter amended on
two occasions is hereby further amended effective as of April 23, 1997 to add
new Sections 9.2 and 9.3, as follows:
9.2. Notwithstanding the foregoing, upon a Change of Control of AMP
Incorporated, all rights of all then active Employees who have accrued a
benefit under the Plan shall be fully vested.
9.3. For the purposes of this Section 9, a "Change of Control" of AMP
Incorporated shall mean:
(a) any Person (as defined below) is or becomes the beneficial owner (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), directly or indirectly, of securities
of AMP Incorporated ("AMP"), not including in the securities
beneficially owned by such Person any securities acquired directly
from AMP or its affiliates, representing 30% or more of either the
then outstanding shares of common stock of the Corporation or the
combined voting power of the Corporation's then outstanding
securities; or
(b) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on
the date hereof, constitute the Board and any new director (other than
a director whose initial assumption of office is in connection with an
actual or threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of AMP)
whose appointment or election by the Board or nomination for election
by AMP's stockholders was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors
on the date hereof or whose appointment, election or nomination for
election was previously so approved; or
(c) there is consummated a merger or consolidation of AMP with any other
corporation or the issuance of voting securities of AMP in connection
with a merger or consolidation of AMP (or any direct or indirect
subsidiary of AMP) pursuant to applicable stock exchange requirements,
other than (A) a merger or consolidation that would result in the
voting securities of AMP outstanding immediately prior to such merger
or consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity or any parent thereof) at least 50% (effective on and
after July 23, 1997, at least 66-2/3%) of the combined voting power of
the voting securities of AMP, or such surviving entity or any parent
thereof, outstanding immediately after such merger or consolidation,
or (B) a merger or consolidation effected to implement a
recapitalization of AMP (or similar transaction) in which no Person is
or becomes the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of AMP (not
including in the securities beneficially owned by such Person any
securities acquired directly from AMP or its affiliates, representing
30% or more of either the then outstanding shares of common stock of
AMP or the combined voting power of AMP's then outstanding securities;
or
(d) the stockholders of AMP approve a plan of complete liquidation or
dissolution of AMP or there is consummated an agreement for the sale
or disposition by AMP of all or substantially all of AMP's assets,
other than a sale or disposition by AMP of all or substantially all of
AMP's assets to an entity, at least 70% of the combined voting power
of the voting securities of which are owned by Persons in
substantially the same proportions as their ownership of AMP
immediately prior to such sale.
(e) For the purpose of this Section, "Person" shall have the meaning given
in Section 3(a)(9) of the Exchange Act, as modified and used in
Sections 13(d) and 14(d) thereof, except that such term shall not
include:
(i) AMP or any of its subsidiaries;
(ii) a trustee or other fiduciary holding securities under an employee
benefit plan of AMP or any of its subsidiaries;
(iii) an underwriter temporarily holding securities pursuant to an
offering of such securities; or
(iv) a corporation owned, directly or indirectly, by the stockholders
of AMP in substantially the same proportions as their ownership
of stock of AMP
Executed this _____ day of August, 1997.
AMP Incorporated
By:______________________________
Title:___________________________
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS
CONTAINED IN THE COMPANY'S 1997
THIRD QUARTER 10Q AND IS
QUALIFIED BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 292,549
<SECURITIES> 52,539
<RECEIVABLES> 1,086,844
<ALLOWANCES> 0
<INVENTORY> 870,136
<CURRENT-ASSETS> 2,570,150
<PP&E> 4,687,131
<DEPRECIATION> 2,745,344
<TOTAL-ASSETS> 4,808,011
<CURRENT-LIABILITIES> 1,453,985
<BONDS> 0
<COMMON> 81,595
0
0
<OTHER-SE> 2,816,362
<TOTAL-LIABILITY-AND-EQUITY> 4,808,011
<SALES> 4,293,472
<TOTAL-REVENUES> 4,293,472
<CGS> 2,980,964
<TOTAL-COSTS> 2,980,964
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25,160
<INCOME-PRETAX> 489,223
<INCOME-TAX> 158,997
<INCOME-CONTINUING> 330,226
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 15,450
<NET-INCOME> 345,676
<EPS-PRIMARY> 1.57
<EPS-DILUTED> 1.57
</TABLE>
