SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No.10)
AMP INCORPORATED
(Name of Subject Company)
AMP INCORPORATED
(Name of Person(s) Filing Statement)
Common Stock, no par value
(including Associated Common Stock Purchase Rights)
(Title of Class of Securities)
031897-10-1
(CUSIP Number of Class of Securities)
David F. Henschel
Corporate Secretary
AMP Incorporated
P.O. Box 3608
Harrisburg, Pennsylvania 17105-3608
(717) 564-0100
(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of the Person(s) Filing Statement)
With a Copy to:
Peter Allan Atkins
David J. Friedman
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022-3897
(212) 735-3000
This Amendment No.10 amends and supplements the
Solicitation/Recommendation Statement of Schedule 14D-9 dated August 21,
1998, as amended, (the "Schedule 14D-9") filed by AMP Incorporated, a
Pennsylvania corporation ("AMP"), in connection with the tender offer by
PMA Acquisition Corporation, a Delaware corporation (the "Purchaser") and
wholly owned subsidiary of AlliedSignal Inc., a Delaware corporation
("AlliedSignal"), to purchase all of the issued and outstanding shares of
common stock, no par value, of AMP (the "Common Stock"), including the
associated Common Stock Purchase Rights (the "Rights" and, together with
the Common Stock, the "Shares") issued pursuant to the Rights Agreement,
dated as of October 28, 1989, and as amended on September 4, 1992, August
12, 1998 and August 20, 1998 (the "Rights Agreement"), between AMP and
ChaseMellon Shareholder Services L.L.C., as Rights Agent, at a price of
$44.50 per Share, net to the seller in cash, as disclosed in its Tender
Offer Statement on Schedule 14D-1, dated August 10, 1998, upon the terms
and subject to the conditions set forth in the Offer to Purchase, dated
August 10, 1998, and the related Letter of Transmittal.
Unless otherwise indicated, all defined terms used herein shall have
the same meaning as those set forth in the Schedule 14D-9.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
The following exhibits are filed herewith:
Exhibit
No. Description
-------- -----------
39 Slide show presentation prepared by AMP.
o o o
This document and the exhibits attached hereto may contain certain
"forward-looking" statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Exchange Act,
which are intended to be covered by the safe harbors created thereby. Such
statements should be considered as subject to risks and uncertainties that
exist in AMP's operations and business environment and could render actual
outcomes and results materially different than predicted. For a
description of some of the factors or uncertainties which could cause
actual results to differ, reference is made to the section entitled
"Cautionary Statements for Purposes of the 'Safe Harbor'" in AMP's Annual
Report on Form 10-K for the year ended December 31, 1997, a copy of which
is filed as Exhibit 19 to the Schedule 14D-9.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
Dated: September 9, 1998 AMP Incorporated
By: /s/ Robert Ripp
______________________
Name: Robert Ripp
Title: Chairman and Chief
Executive Officer
EXHIBIT INDEX
The following exhibits are filed herewith:
Exhibit
No. Description
-------- ------------
39 Slide show presentation prepared by AMP.
[AMP Logo]
AMP INCORPORATED
SEPTEMBER 1998
[Slide 1]
OUR STRATEGY
- ------------------------------------------------------------------------------
1. OPERATING PLANS
O PROFIT IMPROVEMENT PLAN AHEAD OF SCHEDULE
O EPS OF AT LEAST $2.30 IN 1999, AT LEAST $3.00 IN 2000
O WHAT'S DIFFERENT - NEW MANAGEMENT SYSTEM UNDER
BOB RIPP
2. FINANCIAL/SHAREHOLDER VALUE ASSESSMENT
O $44.50 IS INADEQUATE
O PURCHASE OF BERG AFFIRMS THIS
O EXPLORING OPTIONS TO DELIVER ENHANCED VALUE
IN THE NEAR TERM
O LONG-TERM (12 MONTHS) OPERATING PERFORMANCE EXPECTED
TO DELIVER SUPERIOR VALUE TO ALLIEDSIGNAL'S BID
3. GOVERNANCE ACTIONS
O RIGHTS PLAN EXPIRES WITH NO EXTENSION FOR AT
LEAST SIX MONTHS BEGINNING IN NOVEMBER 1999:
INTERIM END-RUN BY ALLIEDSIGNAL NOT PERMITTED
O CURRENT BOARD HAS FLEXIBILITY TO ACT ON AN ACCEPTABLE
PROPOSAL
O ALLIEDSIGNAL'S CONSENT SOLICITATION IS A PRESSURE TACTIC
TO FURTHER ITS OPPORTUNISTIC BID
[Slide 2]
- ------------------------------------------------------------------------------
OPERATING PLANS
- ------------------------------------------------------------------------------
[Slide 3]
AMP IS A COMBINATION OF TWO
DIVERSE BUSINESSES
- ------------------------------------------------------------------------------
High High
-------------------------------------------------
|Terminals & Connectors | |
|Sales Growth: 5% | |
|EBIT Margin: 16% | |
| | |
|Sales: $4.3 billion | |
| | |
Profitability |-----------------------|-----------------------|
| |Value-Added Products |
| |Sales Growth: 14% |
| |EBIT Margin: (4)% |
| | |
| |Sales: $1.3 billion |
| | |
-------------------------------------------------
Low Revenue Growth High
STRATEGIC o 12% Revenue Growth
OBJECTIVES o 17% Operating Income Margins (19% EBIT Growth Rate)
o 22% ROE
o 30% AVA
[Slide 4]
AMP SUMMARY HISTORICAL FINANCIAL DATA
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DOLLARS IN MILLIONS
1993 1994 1995 1996 1997 CAGR
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Sales $3,790.5 $4,369.1 $5,227.2 $5,468.0 $5,745.2 11.0%
% Growth NA 15.3% 19.6% 4.6% 5.1%
EBIT $504.5 $659.9 $766.7 $663.2 $745.8 10.3%
% Margin 13.3% 15.1% 14.7% 12.1% 13.0%
Currency Impact
Dollars $63 $198 $(144) $(273)
% of Sales 1.7% 4.5% (2.7)% (5.0)%
Local Currency Growth
Sales - % Growth 13.6% 15.1% 7.4% 10.1% 11.7%
EBIT - % Growth 28.9% 12.1% (11.3)% 17.1% 10.7%
</TABLE>
- ------------------------------------------------------------------------------
1) (1995) EXCLUDES $48.7 MILLION OF TRANSACTIONS COSTS AND ONE-TIME
CHARGES RELATED TO THE 1995 MERGER WITH M/A-COM, INC.
2) (1996) EXCLUDES $160.5 MILLION OF RESTRUCTURING AND OTHER ONE-TIME
CHARGES RECORDED IN OPERATING INCOME DURING 1996.
3) (1997) EXCLUDES $21.3 MILLION OF BENEFITS DUE TO THE FINAL ADJUSTMENT
OF 1996 RESTRUCTURING CHARGES.
[Slide 5]
PERFORMANCE COMPARISON
SALES GROWTH COMPETITOR 1H97 1H98 (CHANGE)
----------------------------------------------------
(LOCAL AMPHENOL 14% 6% -8%
CURRENCY) BERG 13% 3% -10%
MOLEX 20% 8% -12%
COMPOSITE* 12% 1% -11%
AMP 9% 0% -9%
----------------------------------------------------
*6 COMPETITORS INCLUDING THOSE ABOVE
---------------------------------------------------------
AMP MARGINS SALES EBIT MARGIN
---------------------------------------------------------
1H97 $2,861MM $350MM 12.2%
1H98 $2,748MM $251MM 9.1%
% GROWTH (4.0%) (28.4%)
LOCAL CURRENCY (0.3%) (25.1%)
OPERATING MARGIN
(CHANGE): MANAGEMENT ASSESSMENT (3.1%)
CURRENCY/COST (0.7%)
INVENTORY ADJUSTMENTS (1.0%)
SG&A EXPENSE (+3% GROWTH) (1.4%)
NO CONNECTOR
COMPANY HAS BEEN IMMUNE FROM CURRENT INDUSTRY DYNAMICS
[Slide 6]
ANNOUNCED PROFIT IMPROVEMENT ACTIONS:
APRIL 1998 - AUGUST 1998
- ------------------------------------------------------------------------------
O CLOSURES/DISPOSITIONS
O NORTHWEST BLVD, NC PLANT
O CONNECTWARE ATM DEVELOPMENT
O CARROLL TOUCH
O LOGANVILLE AND SELINSGROVE, PA PLANTS
O KERNERSVILLE, NC PLANT
O M/A - COM FACILITIES IN U.S. & U.K.
O SENSORS DIVISION
T&C ANNUAL SAVINGS OF $110 MILLION PLUS ADDITIONAL
NON-T&C SAVINGS
[Slide 7]
ANNOUNCED PROFIT IMPROVEMENT ACTIONS:
APRIL 1998 - AUGUST 1998
- ------------------------------------------------------------------------------
o Headcount Related
o Announced furloughs at selected plants in April
o Announced mandatory furloughs, voluntary early
retirement and layoffs in June
o Indirect headcount reductions of 3,500 in July
o 25% is non-T&C related
A 3,500 HEADCOUNT REDUCTION YIELDS ANNUAL SAVINGS OF $210 MILLION
o Sales Initiatives
o Our plan is predicated on 2% sales growth in 1999 and 7%
growth in 2000. Each additional 1% in sales growth adds
5(cent)/share EPS.
o Responsive and competitive to marketplace requirements
IN TOTAL, THIS PLAN WILL YIELD $320 MILLION IN ANNUAL SAVINGS BY 2000
[Slide 8]
PROFIT IMPROVEMENT ACTIONS: STATUS
- ------------------------------------------------------------------------------
o Closures/Dispositions - T&C
o 11 facilities announced for closure
o Phase I T&C realignment announced
o Phase II and III T&C realignment identified,
announcement pending
o Closures/Dispositions - Non-T&C
o Harlow U.K. facility closed
o Sensors sale completed
o Connectware closed
o Carroll Touch in negotiations
[Slide 9]
PROFIT IMPROVEMENT ACTIONS: STATUS
- ------------------------------------------------------------------------------
o Headcount Related
o 1,700 accepted voluntary early retirement in U.S.
o 100-120 expected to accept M/A - COM voluntary
separation by 9/15/98
o International voluntary early retirement in process
o Technology layoffs completed
o Ongoing attrition
o Sales initiatives completed
o Simplified pricing structure (1,000 parts repriced
- more to come)
o Immediate shipping of strategic parts
o 24-hour customer service
o Distributor Inventory Management and Enterprise
agreements by year end
[Slide 10]
AMP 1999-2000
PROFIT IMPROVEMENT MAP
- ------------------------------------------------------------------------------
(DOLLARS IN MILLIONS)
IMPACT ON OPERATING INCOME
-----------------------------------
DRIVERS 1999 2000
- ------------------------------------------------------------------------
GROWTH/PRODUCTIVITY $ 75 $242
INVESTMENTS (50) (120)
---------------- ------------------
SUBTOTAL $25 $122
OPERATING MARGIN 10.0% 14.6%
PROFIT IMPROVEMENT PLAN $205 $115
---------------- ------------------
TOTAL $230 $237
OPERATING MARGIN 13.5% 16.5%
---------------- ------------------
[Slide 11]
COMPONENTS OF MARGIN IMPROVEMENT
- ------------------------------------------------------------------------------
[Image of a bar graph]
1998 MARGINS - 9.7%
ANNOUNCED ACTIONS -3.6 % resulting in an EPS impact of $0.65
GROWTH - 0.2% resulting in an EPS impact of $0.10
1999 MARGINS - 13.5%
ANNOUNCED ACTIONS - 1.9% resulting in an EPS impact of $0.36
GROWTH - 1.1% resulting in an EPS impact of $0.34
2000 MARGINS - 16.5%
[Slide 12]
MANAGEMENT'S FINANCIAL PLAN*
- -----------------------------------------------------------------------------
DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA
- -----------------------------------------------------------------------------
1998E 1999E 2000E
- -----------------------------------------------------------------------------
REVENUES $5,615 $5,727 $6,128
OPERATING INCOME $543 $773 $1,011
MARGIN % 9.7% 13.5% 16.5%
NET INCOME $340 $505 $660
EPS $1.55 $2.30 $3.00
REVENUE GROWTH 2.0% 7.0%
EPS GROWTH 48.4% 30.4%
- ------------------------------------------------------------------------------
* BASED ON COMPLETED STATUS TO DATE OF THE PROFIT IMPROVEMENT ACTIONS.
MANAGEMENT ANTICIPATES THAT IT IS LIKELY THAT THE 1999 AND 2000 ESTIMATES
WILL BE REVISED UPWARD IN THE NEAR TERM BASED ON NEW INITIATIVES AND
REFINED ESTIMATES OF ACTIONS CURRENTLY IN PROGRESS.
[Slide 13]
AMP INCORPORATED
WHAT'S o FOCUS
DIFFERENT? o ACCOUNTABILITY
o SIMPLICITY
o TIMELINESS
CONFIDENCE IN EXECUTION
[Slide 14]
<TABLE>
<CAPTION>
FORMER ORGANIZATION
- ----------------------------------------------------------------------------------------------------------------------------
22 DIRECT REPORTS
-----------------------------------------------------------------------------------
| W.J. HUDSON, JR. <---> J.E. MARLEY |
| President and Chief Executive Officer | Chairman of the Board |
-----------------------------------------------------------------------------------
| |
| |
------------------------------------------------------------ ------------------------------------------------------------------
<S> <C> <C> <C>
| Chief Financial Officer | Global Business | Transportation | Legal
--------------------------------- ------------------------- --------------------------------- -------------------------------
| Chief Human Resource Officer | Global Competencies | The Whitaker Corporation | Corp Secretary
--------------------------------- ------------------------- --------------------------------- -------------------------------
| Global Succession, Planning.... | AMP Technology | Corporate Development | Global Business Excellence
--------------------------------- ------------------------- --------------------------------- -------------------------------
| The Americas | Corporate Communication | Global Environ, Health & Safety | Global Opto-Electronics Group
--------------------------------- ------------------------- --------------------------------- -------------------------------
| Asia Pacific | Public Affairs | Systems Re-engineering | Global Strategy, Dev &
--------------------------------- ------------------------- | | Marketing
| Europe, Middle East & Africa | Strategy & Development --------------------------------- -------------------------------
--------------------------------- -------------------------
</TABLE>
[Slide 15]
NEW ORGANIZATION
- ------------------------------------------------------------------------------
11 DIRECT REPORTS
----------------------------------------
| R. RIPP |
| Chairman and Chief Executive Officer |
----------------------------------------
|
|
- --------------------------------------------------------
| GLOBAL OPERATIONS
- --------------------------------------------------------
| GLOBAL INDUSTRY BUSINESS
- --------------------------------------------------------
| REGIONAL BUSINESS DEVELOPMENT
- --------------------------------------------------------
| REGIONAL SALES & COUNTRY MANAGEMENT (2 DIRECT REPORTS)
- --------------------------------------------------------
| FINANCE
- --------------------------------------------------------
| TECHNOLOGY
- --------------------------------------------------------
| ADMINISTRATION
- --------------------------------------------------------
| LEGAL
- --------------------------------------------------------
| HUMAN RESOURCES
- --------------------------------------------------------
| COMMUNICATION
- --------------------------------------------------------
[Slide 16]
PROFIT IMPROVEMENT PLAN
ACCOUNTABILITY $320 MILLION
GLOBAL OPERATIONS $110 MILLION
GLOBAL INDUSTRIES $80 MILLION
LARGE ACCOUNTS
COUNTRY SALES $20 MILLION
SMALL & MEDIUM ACCOUNTS
GLOBAL/COUNTRY SUPPORT $110 MILLION
[Slide 17]
- ------------------------------------------------------------------------------
FINANCIAL/SHAREHOLDER
VALUE ASSESSMENT
- ------------------------------------------------------------------------------
[Slide 18]
AMP VS. COMPETITORS' STOCK
PRICE PERFORMANCE
- ------------------------------------------------------------------------------
[Image of a line graph depicting the percentage change in AMP's stock
price from January 1, 1998 through September 3, 1998, as compared against
the percentage change in the stock price of Molex common stock during the
same time period; on 8/3/98, Molex's common stock price was 26% below its
52 week high]
[Image of a line graph depicting the percentage change in AMP's stock
price from January 1, 1998 through September 3, 1998, as compared against
the percentage change in the stock price of Berg common stock during the
same time period; on 8/3/98, Berg's common stock price was 27% below its
52 week high]
[Image of a line graph depicting the percentage change in AMP's stock
price from January 1, 1998 through September 3, 1998, as compared against
the percentage change in the stock price of Amphenol common stock during
the same time period; on 8/3/98, Amphenol's common stock price was 38%
below its 52 week high]
EVERY MAJOR CONNECTOR COMPANY HAS SUFFERED SIGNIFICANT STOCK PRICE DECLINES
[Slide 19]
AMP'S 2-YEAR HISTORICAL STOCK
PRICE PERFORMANCE
- ------------------------------------------------------------------------------
SEPTEMBER 4, 1996 - SEPTEMBER 4, 1998
1/8/97 AMP announces plans to cut 1,000 jobs and close plants to
streamline certain operations
4/23/97 AMP announces Q1 1997 earnings
7/17/97 AlliedSignal privately expresses interest
10/27/97 Dow Jones Industrial Avg. drops 554 points
1/28/98 AMP announces Q4 1997 earnings
5/15/98 AMP announces 2nd Qtr. earnings will disappoint
6/26/98 AMP announces early retirement program
7/17/98 AMP announces restructuring
8/4/98 AlliedSignal announces takeover offer
[Image of a line graph depicting the stock price of AMP common stock during
the period commencing from September 4, 1996 through September 4, 1998]
49% DROP FROM 52-WEEK HIGH
[Slide 20]
CHANGES IN ANALYST PROJECTIONS
- ------------------------------------------------------------------------------
[Image of a line graph]
Average P/E*: 19.3X
2000 Target: $3.00
1999 Target: $2.30
1997 EPS 1998 EPS 1999 EPS
Estimate Estimate Estimate Stock Price
7/1/97 $2.10 $2.53 $42.1250
8/1/97 $2.13 $2.55 $51.7500
9/1/97 $2.13 $2.57 $50.0000
10/1/97 $2.13 $2.58 $52.8750
11/1/97 $2.13 $2.54 $45.0000
12/1/97 $2.13 $2.54 $45.7500
1/1/98 $2.54 $2.74 $42.0000
2/1/98 $2.40 $2.74 $40.0000
3/1/98 $2.38 $2.73 $44.1875
4/1/98 $2.37 $2.68 $43.0625
5/1/98 $2.26 $2.56 $39.7500
6/1/98 $1.91 $2.28 $37.8125
7/1/98 $1.73 $2.06 $34.5625
8/1/98 $1.51 $1.94 $29.3750
9/1/98 $1.51 $1.94 $38.0000
ANALYST ESTIMATES IN LINE WITH MANAGEMENT TARGETS
WILL DRIVE SIGNIFICANT STOCK PRICE GAINS
* Based on 12-month forward First Call consensus EPS estimates
[Slide 21]
IMPLIED VALUE FROM
FRAMATOME/BERG TRANSACTION
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
BERG AMP PRO FORMA
STATISTIC MULTIPLE PRICE
- ------------------------------------------------------------------------------
LTM EBITDA 11.6X $55
LTM NET INCOME 34.8X $63
52-WEEK HIGH 1.2X $69
52-WEEK AVERAGE 1.5X $64
- ------------------------------------------------------------------------------
BERG TRANSACTION CONFIRMS ALLIEDSIGNAL BID IS INADEQUATE
[Slide 22]
$44.50 IS INADEQUATE
---------------------------------------------------------------------------
o AMP's restructuring actions will generate a substantial portion of
projected earnings growth even with modest incremental revenues
o The Company's financial advsors have determined AlliedSignal's offer
to be inadequate
o The recent Berg transaction confirms a higher value for AMP
o No synergies exist with AlliedSignal, making it difficult for them to
pay full value
o They are attempting to capture current and future cost reduction
benefits without paying for them
o We are exploring options to deliver enhanced value to our shareholders
in the near term
[Slide 23]
- ------------------------------------------------------------------------------
GOVERNANCE ACTIONS
- ------------------------------------------------------------------------------
[Slide 24]
RIGHTS PLAN
- ------------------------------------------------------------------------------
o Rights Plan becomes irrevocable until November 1999 if
AlliedSignal's slate of "interested" and irreconcilably conflicted
directors is seated
o Rights Plan to expire for at least 6 months after November 1999
- -----------------------------------------------------------------------------
CURRENT BOARD HAS FLEXIBILITY TO ACT
ON AN ACCEPTABLE PROPOSAL
- -----------------------------------------------------------------------------
[Slide 25]
ALLIEDSIGNAL'S CONSENT PROPOSAL IS NOT IN OUR
SHAREHOLDERS' BEST INTERESTS
- ------------------------------------------------------------------------------
o The AlliedSignal slate would be an unproductive presence on AMP's
board
o AMP's board needs undivided attention on Profit Improvement Plan
until November 1999 Rights Plan expiration
o AlliedSignal slate creates irreconcilable conflict of interest,
distraction to management and no incentive to increase value
o Rights Plan is irrevocable until November 1999 if consent
is successful
- -----------------------------------------------------------------------------
DO NOT CONSENT TO A TRULY INADEQUATE BID.
IT STANDS TO REASON THAT THEIR SLATE
OF DIRECTORS HAS ONE OBJECTIVE: TO SELL
OUR COMPANY TO ALLIEDSIGNAL FOR THE LOWEST PRICE.
- -----------------------------------------------------------------------------
[Slide 26]
CONCLUSION
- ------------------------------------------------------------------------------
OPERATING PLAN
o Profit Improvement Plan expected to generate EPS of at least
$2.30 in 1999 and at least $3.00 in 2000
o The plan is based on cost savings and not on aggressive pricing
and volume advances.
FINANCIAL SHAREHOLDER VALUE ASSESSMENT
o $44.50 is inadequate
o The Company's financial advisors have determined AlliedSignal's
offer to be inadequate
o The recent Berg transaction confirms a significantly higher
value for AMP
o Actively pursuing ways to increase value in the near term
GOVERNANCE ACTIONS
o It is clear that AlliedSignal's nominees on your board would
have irreconcilable conflicts of interests
o Reasonable and responsive actions to deliver AMP's superior
value to shareholders
o It is our operating plan and we are best suited to execute it
- -----------------------------------------------------------------------------
WE HAVE REJECTED THEIR BID. YOU SHOULD REJECT THEIR
ATTEMPT TO TAKE OVER YOUR BOARD AND YOUR COMPANY.
[Slide 27]
INVESTMENT ALTERNATIVES
---------------------------------------------------------------------------
MESSAGE TO AMP SHAREHOLDERS:
BEST INVESTMENT: AMP STOCK
o Dividend is sustainable
o Profit Improvement ahead of schedule (potential for addittional $0.15
EPS in 1999 and $0.30 EPS in 2000)
o Upside sales potential (each 1% of volume increase yields $0.05 EPS)
MESSAGE TO ALLIEDSIGNAL SHAREHOLDERS:
IF YOU WANT OUR HIGHER GROWTH AND BETTER MARGINS
WITHOUT DILUTION AND ALLIEDSIGNAL EXECUTION RISK...
BUY AMP - SELL ALD
[Slide 28]
PARTICIPANTS/SAFE HARBOR
- ------------------------------------------------------------------------------
THIS PRESENTATION CONTAINS CERTAIN "FORWARD-LOOKING" STATEMENTS WITHIN THE
MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND
SECTION 21E OF THE EXCHANGE ACT OF 1934, AS AMENDED, WHICH ARE INTENDED TO
BE COVERED BY THE SAFE HARBORS CREATED THEREBY. SUCH STATEMENTS SHOULD BE
CONSIDERED AS SUBJECT TO RISKS AND UNCERTAINTIES THAT EXIST IN AMP'S
OPERATIONS AND BUSINESS ENVIRONMENT AND COULD RENDER ACTUAL OUTCOMES AND
RESULTS MATERIALLY DIFFERENT THAN PREDICTED. FOR A DESCRIPTION OF SOME OF
THE FACTORS OR UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER,
REFERENCE IS MADE TO THE SECTION ENTITLED "CAUTIONARY STATEMENTS FOR
PURPOSES OF THE 'SAFE HARBOR'" IN AMP'S ANNUAL REPORT ON FORM 10K FOR THE
YEAR ENDED DECEMBER 31, 1997. IN ADDITION, THE REALIZATION OF THE BENEFITS
ANTICIPATED FROM THE STRATEGIC INITIATIVES DESCRIBED ABOVE WILL BE
DEPENDENT, IN PART, ON MANAGEMENT'S ABILITY TO EXECUTE ITS BUSINESS PLAN
AND TO MOTIVATE PROPERLY THE AMP EMPLOYEES, WHOSE ATTENTION HAS BEEN
DISTRACTED BY THE ALLIEDSIGNAL OFFER AND WHOSE NUMBERS WILL HAVE BEEN REDUCED
AS A RESULT OF THESE INITIATIVES.
AMP AND CERTAIN OTHER PERSONS NAMED BELOW MAY BE DEEMED TO BE PARTICIPANTS
IN THE SOLICITATION OF REVOCATIONS OF CONSENTS IN RESPONSE TO
ALLIEDSIGNAL'S CONSENT SOLICITATION. THE PARTICIPANTS IN THIS SOLICITATION
MAY INCLUDE THE DIRECTORS OF AMP (RALPH D. DENUNZIO, BARBARA H. FRANKLIN,
JOSEPH M. HIXON III, WILLIAM J. HUDSON, JR., JOSEPH M. MAGLIOCHETTI, HAROLD
A. MCINNES, JEROME J. MEYER, JOHN C. MORLEY, ROBERT RIPP, PAUL G. SCHLOEMER
AND TAKEO SHIINA); THE FOLLOWING EXECUTIVE OFFICERS OF AMP: ROBERT RIPP
(CHAIRMAN AND CHIEF EXECUTIVE OFFICER), WILLIAM J. HUDSON (VICE CHAIRMAN),
JAMES E. MARLEY (FORMER CHAIRMAN), WILLIAM S. URKIEL (CORPORATE VICE
PRESIDENT AND CHIEF FINANCIAL OFFICER), HERBERT M. COLE (SENIOR VICE
PRESIDENT FOR OPERATIONS), JUERGEN W. GROMER (SENIOR VICE PRESIDENT, GLOBAL
INDUSTRY BUSINESSES), RICHARD P. CLARK (DIVISIONAL VICE PRESIDENT, GLOBAL
WIRELESS PRODUCTS GROUP), THOMAS DICLEMENTE (CORPORATE VICE PRESIDENT AND
PRESIDENT, EUROPE, MIDDLE EAST, AFRICA), RUDOLF GASSNER (CORPORATE VICE
PRESIDENT AND PRESIDENT, GLOBAL PERSONAL COMPUTER DIVISION), CHARLES W.
GOONREY (CORPORATE VICE PRESIDENT AND GENERAL LEGAL COUNSEL), JOHN E.
GURSKI (CORPORATE VICE PRESIDENT AND PRESIDENT, GLOBAL VALUE-ADDED
OPERATIONS AND PRESIDENT, GLOBAL OPERATIONS DIVISION), DAVID F. HENSCHEL
(CORPORATE SECRETARY), JOHN H. KEGEL (CORPORATE VICE PRESIDENT,
ASIA/PACIFIC), MARK E. LANG (CORPORATE CONTROLLER), PHILIPPE LEMAITRE
(CORPORATE VICE PRESIDENT AND CHIEF TECHNOLOGY OFFICER), JOSEPH C.
OVERBAUGH (CORPORATE TREASURER), NAZARIO PROIETTO (CORPORATE VICE PRESIDENT
AND PRESIDENT, GLOBAL CONSUMER, INDUSTRIAL AND POWER TECHNOLOGY DIVISION);
AND THE FOLLOWING OTHER MEMBERS OF MANAGEMENT AND EMPLOYEES OF AMP: RICHARD
SKAARE (DIRECTOR, CORPORATE COMMUNICATION), DOUGLAS WILBURNE (DIRECTOR,
INVESTOR RELATIONS), MARY RAKOCZY (MANAGER, SHAREHOLDER SERVICES), DOROTHY
J. HILLER (ASSISTANT MANAGER, SHAREHOLDER SERVICES) AND MELISSA E. WITSIL
(COMMUNICATIONS ASSISTANT). AS OF THE DATE OF THIS COMMUNICATION, NONE OF
THE FOREGOING PARTICIPANTS INDIVIDUALLY BENEFICIALLY OWN IN EXCESS OF 1% OF
AMP'S COMMON STOCK OR IN THE AGGREGATE IN EXCESS OF 2% OF AMP'S COMMON
STOCK.
AMP HAS RETAINED CREDIT SUISSE FIRST BOSTON CORPORATION ("CSFB") AND
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION ("DLJ") TO ACT AS ITS
FINANCIAL ADVISORS IN CONNECTION WITH THE ALLIEDSIGNAL OFFER, FOR WHICH
CSFB AND DLJ WILL RECEIVE CUSTOMARY FEES, AS WELL AS REIMBURSEMENT OF
REASONABLE OUT-OF-POCKET EXPENSES. IN ADDITION, AMP HAS AGREED TO
INDEMNIFY CSFB, DLJ AND CERTAIN RELATED PERSONS AGAINST CERTAIN LIABILITIES,
INCLUDING CERTAIN LIABILITIES UNDER THE FEDERAL SECURITIES LAWS, ARISING
OUT OF THEIR ENGAGEMENT. CSFB AND DLJ ARE INVESTMENT BANKING FIRMS THAT
PROVIDE A FULL RANGE OF FINANCIAL SERVICES FOR INSTITUTIONAL AND INDIVIDUAL
CLIENTS. NEITHER CSFB NOR DLJ ADMITS THAT IT OR ANY OF ITS DIRECTORS,
OFFICERS OR EMPLOYEES IS A "PARTICIPANT" AS DEFINED IN SCHEDULE 14A
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, IN THE
SOLICITATION, OR THAT SCHEDULE 14A REQUIRES THE DISCLOSURE OF CERTAIN
INFORMATION CONCERNING EITHER CSFB OR DLJ. IN CONNECTION WITH CSFB'S ROLE
AS FINANCIAL ADVISOR TO AMP, CSFB AND THE FOLLOWING INVESTMENT BANKING
EMPLOYEES OF CSFB MAY COMMUNICATE IN PERSON, BY TELEPHONE OR OTHERWISE WITH
A LIMITED NUMBER OF INSTITUTIONS, BROKERS OR OTHER PERSONS WHO ARE
STOCKHOLDERS OF AMP: ALAN HOWARD, STEVEN KOCH, SCOTT LINDSAY, AND LAWRENCE
HAMDAN. IN CONNECTION WITH DLJ'S ROLE AS FINANCIAL ADVISOR TO AMP, DLJ AND
THE FOLLOWING INVESTMENT BANKING EMPLOYEES OF DLJ MAY COMMUNICATE IN
PERSON, BY TELEPHONE OR OTHERWISE WITH A LIMITED NUMBER OF INSTITUTIONS,
BROKERS OR OTHER PERSONS WHO ARE STOCKHOLDERS OF AMP: DOUGLAS V. BROWN AND
HERALD L. RITCH. IN THE NORMAL COURSE OF ITS BUSINESS, EACH OF CSFB AND DLJ
REGULARLY BUY AND SELL SECURITIES ISSUED BY AMP FOR ITS OWN ACCOUNT AND FOR
THE ACCOUNTS OF ITS CUSTOMERS, WHICH TRANSACTIONS MAY RESULT IN CSFB, DLJ
OR THE ASSOCIATES OF EITHER OF THEM HAVING A NET "LONG" OR NET "SHORT"
POSITION IN AMP SECURITIES, OR OPTION CONTRACTS OR OTHER DERIVATIVES IN OR
RELATING TO SUCH SECURITIES. AS OF SEPTEMBER 1, 1998, DLJ HELD NO SHARES OF
AMP COMMON STOCK FOR ITS OWN ACCOUNT AND CSFB HAD A NET LONG POSITION OF
118,566 SHARES OF AMP COMMON STOCK.
[Slide 29]
