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.6)
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. 6 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 3. IDENTITY AND BACKGROUND.
Item 3 is hereby amended as follows:
The second paragraph of the Section entitled "Management Succession"
in Item 3(b) is hereby amended to state that the per share exercise price
of the option grant made to Mr. Robert Ripp by AMP on August 20, 1998 is
$44.85, a 15% premium to the closing price of AMP's Common Stock on August
20, 1998. In connection with the restricted stock award made to Mr. Ripp
by AMP on August 20, 1998, such paragraph is also amended to state that (A)
upon the occurrence of a Change of Control a cash payment would be made for
any then outstanding restricted shares on the date such shares would
otherwise have vested (i.e., on Mr. Ripp's normal retirement date or at his
earlier death, disability or mutually agreed upon termination of
employment); provided, that if this cashout provision would adversely
affect AMP's ability to consummate a transaction which is to be accounted
for as a pooling of interests, the restricted shares would not be cashed
out, but rather the shares would be cancelled and the appropriate number of
unrestricted shares would be delivered on the otherwise applicable vesting
date, and (B) such restricted stock award would be subject to the terms of
Mr. Ripp's Executive Severance Agreement. The description of the
restricted stock grant to Mr. Ripp provided herein is qualified in its
entirety by reference to (A) the revised Restricted Stock Agreement and (B)
the revised amendment to Mr. Ripp's Executive Severance Agreement, copies
of which are filed herewith as Exhibits 30 and 31, respectively and are
incorporated herein by reference. The revised agreements filed herewith
supercede and replace the forms of agreements previously filed as Exhibits
2 and 3, respectively, to the Schedule 14D-9.
The Section entitled "Rabbi Trust" in Item 3(b) is hereby amended by
adding the following sentence to the end thereof:
On August 27, 1998, AMP contributed to the Rabbi Trust an irrevocable
letter of credit in an amount equal to $120 million (which amount
represents the total contribution currently estimated to be necessary to
fund the benefits in the Executive Severance Agreements and the other plans
and programs described in this Section with respect to the Rabbi Trust).
Item 5. Persons Retained, Employed or to be Compensated.
Item 5 is hereby amended by inserting the following paragraphs before
the last paragraph thereof:
AMP has retained Donaldson, Lufkin & Jenrette Securities Corporation
("DLJ") to act as its financial advisor for a period of twelve months with
respect to the AlliedSignal Offer and the Consent Solicitation pursuant to
a letter agreement, dated August 26, 1998 (the "DLJ Engagement Letter"),
between DLJ and AMP. The DLJ Engagement Letter provides for the payment to
DLJ of an initial advisory fee of $750,000, payable upon execution of the
DLJ Engagement Letter (the "DLJ Initial Advisory Fee"), plus a fee of
$1,500,000, payable every 90 calendar days (not to exceed $6,000,000 in the
aggregate) with the first payment payable 90 days after the date of the DLJ
Engagement Letter (the "DLJ Quarterly Advisory Fees"); provided, however,
that no additional DLJ Quarterly Fees shall be payable after a Transaction
(as defined below) has been consummated. In addition, if during the term
of the DLJ Engagement Letter or within two years after expiration or
termination of the DLJ Engagement Letter AMP consummates a sale, merger,
consolidation or any other business combination with AlliedSignal or any
third party, in one or a series of transactions, involving all or a
substantial amount of the business, securities or assets of AMP (a
"Transaction") or enters into an agreement providing for a Transaction
which is subsequently consummated, a transaction fee equal to 0.09% of the
Transaction Consideration (as defined below) involved in the Transaction
(the "DLJ Transaction Fee") shall be payable to DLJ. If during the term
of the DLJ Engagement Letter or within two years after the expiration or
termination of the DLJ Engagement Letter, in response to the AlliedSignal
Offer AMP shall (i) conduct a repurchase of a significant amount of its
securities, a recapitalization or a spin-off, split-off or other
extraordinary dividend of cash, securities or other assets to its
shareholders or (ii) acquire all or a substantial amount of the business,
securities or assets of another company, in one or a series of
transactions, by purchase, merger, consolidation or any other business
combination (each such transaction, an "Alternate Transaction"), a
customary transaction fee shall be payable to DLJ as shall be determined by
mutual agreement between DLJ and AMP (the "DLJ Alternate Transaction
Fee") based on the total consideration paid or payable in such transaction
and such other factors as AMP and DLJ shall mutually agree. The DLJ
Initial Advisory Fee will be credited (to the extent paid) against any fees
payable pursuant to the DLJ Quarterly Advisory Fees; and the DLJ Initial
Advisory Fee and the DLJ Quarterly Advisory Fees will be credited (to the
extent paid) against any fees payable pursuant to the DLJ Transaction Fee.
The term "Transaction Consideration" shall mean the total fair market
value (on the date of payment) of all consideration (including cash,
securities, property, all debt remaining on AMP's financial statements and
other indebtedness and obligations assumed and any other form of
consideration) received or receivable, directly or indirectly, by AMP or
its shareholders in connection with a Transaction.
In the event of a change in the composition of the Board such that a
majority or more of the members of the Board holding such position were not
nominated by the directors in office as of the date of the DLJ Engagement
Letter, all remaining unpaid DLJ Quarterly Advisory Fees shall immediately
become due and payable. In such event, DLJ shall continue to be entitled
to a DLJ Transaction Fee.
In addition to the fees described above, AMP has agreed to reimburse
DLJ for DLJ's out-of-pocket expenses (including fees and expenses of
counsel) incurred by DLJ in connection with its engagement under the DLJ
Engagement Letter. AMP has also agreed to indemnify DLJ and its affiliates
against certain liabilities incurred in connection with its performance
under the DLJ Engagement Letter.
In addition to the services to be provided by DLJ pursuant to the DLJ
Engagement Letter, AMP has agreed to (i) offer DLJ the role of co-arranger
or counterparty, as applicable, in connection with any external financing,
foreign exchange or derivatives transactions undertaken by AMP in
connection with services provided by DLJ pursuant to the DLJ Engagement
Letter; and (ii) offer DLJ the role of co-managing underwriter, co-
placement agent, co-initial purchaser or co-dealer manager, as the case may
be, in connection with any offering of debt or equity securities to the
public, any private placement of debt or equity securities or any tender
offer or exchange offer for debt or equity securities during the term of
the DLJ Engagement Letter; provided, however, that DLJ shall not be
obligated to accept such role. The fees and terms applicable to the
performance of any such additional services by DLJ shall be set forth in
separate letter agreements containing terms and provisions mutually agreed
upon by DLJ and AMP.
In the ordinary course of its business, DLJ and its affiliates may
actively trade the debt and equity securities of AMP, AlliedSignal or other
entities that may be involved in a Transaction or an Alternate Transaction
for their own account and for the accounts of customers and, accordingly,
may at any time hold a long or short position in such securities.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
The following exhibits are filed herewith:
Exhibit
No. Description
-------- -----------
30 Restricted Stock Agreement, dated as of August 20, 1998,
between AMP and Robert Ripp.
31 Amendment to Executive Severance Agreement, dated as of
August 8, 1998, between AMP and Robert Ripp.
32 Letter to shareholders, dated September 1, 1998.
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 1, 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
------- -----------
30 Restricted Stock Agreement, dated as of August 20, 1998,
between AMP and Robert Ripp.
31 Amendment to Executive Severance Agreement, dated as of
August 8, 1998, between AMP and Robert Ripp.
32 Letter to shareholders, dated September 1, 1998.
Exhibit 30
RESTRICTED STOCK AGREEMENT
AGREEMENT dated this 20th day of August, 1998, by and between AMP
Incorporated, a Pennsylvania corporation with its principal offices located
in Harrisburg, Pennsylvania ("AMP") and Robert M. Ripp, of Harrisburg,
Pennsylvania ("Ripp").
WHEREAS, Ripp has been appointed as of the date hereof to the
positions of Chairman of the Board and Chief Executive Officer of AMP and,
in connection with such appointment, AMP has agreed to make the grant of
restricted stock on the terms set forth herein;
WHEREAS, both AMP and Ripp desire to set forth in writing the nature
of the above described grant of restricted stock and its contractual
limitations.
NOW THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Grant.
1.1. AMP hereby grants to Ripp 25,000 shares of common stock of AMP,
subject to the restrictions set forth under Sections 2 and 3
hereof (the "Shares"). The Shares distributed to Ripp hereunder
will be issued shares reacquired on the open market by and held
in the treasury of AMP. No Shares distributed pursuant to this
Agreement will have been registered under the Securities Act of
1933, as amended (the "Securities Act"). The Shares include the
25,000 shares granted hereunder, as adjusted in the event of any
subsequent stock dividend, dividend reinvestment,
recapitalization, merger, consolidation, split-up, combination,
exchange of shares or similar event.
2. Restrictions.
2.1. The Shares are subject to the following restrictions:
a. Ripp's ownership of the Shares shall vest on the earlier of
(i) August 1, 2006 (his normal retirement date), (ii) the
date of Ripp's death or disability, (iii) the termination of
Ripp's employment with AMP that is mutually agreed upon by
the parties.
b. Upon a Change of Control (as defined below), then, subject
to Section 2.1.g. below, the Shares shall be cancelled and
AMP agrees to thereafter pay Ripp an amount equal to the
value of the Shares, calculated based on the last closing
price of the AMP common stock on the New York Stock Exchange
Composite Tape prior to the Change of Control. This payment
shall be made on the earliest of (i) August 1, 2006, (ii)
the date of Ripp's earlier death or disability, and (iii)
the date of termination of Ripp's employment with AMP that
is mutually agreed upon by the parties.
c. Upon any termination of Mr. Ripp's employment not described
in clauses (i), (ii) or (iii) of Section 2.1(a) hereof,
which termination occurs prior to a Change of Control, the
Shares shall be forfeited and promptly returned to AMP
without further consideration. For purposes of this
Agreement, termination of employment means the termination
of employment by AMP or by a subsidiary of AMP, but not the
transfer of employment from AMP to a subsidiary or vice
versa, or from one subsidiary of AMP to another such
subsidiary. For purposes of this subsection 2.1(c),
employment shall not be considered as terminated if Ripp
continues to perform services for AMP or a subsidiary
thereof on either a full or part-time basis either as an
independent contractor or on a consulting basis or
otherwise, provided, however, that Ripp during such period
does not, whether full time or part time, engage in or
perform any services as an employee, independent contractor,
consultant, advisor or otherwise for a business that is
engaged in the manufacture, sale or other disposition of a
product or products that are in competition to a product or
products of AMP or its subsidiaries, partnerships or joint
ventures.
d. Except as provided hereafter, no Shares may be transferred
by Ripp prior to the vesting of such shares as set forth in
Subsection 2.1(a) above. "Transferred" means any change of
ownership of a Share, including without limitation being
sold, assigned, exchanged, gifted or granted, pledged or
hypothecated.
e. For the purpose of this Agreement, a change of control of
AMP ("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 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
(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 of Directors of AMP (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
(iii) 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 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
(iv) 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.
f. 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) 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.
g. If it is determined that application of the provisions of
Subsection 2.1(b) of this Agreement would adversely affect
AMP's ability to consummate a Change of Control transaction
that is intended to be accounted for as a "pooling of
interests," such provision shall not be implemented and, in
lieu thereof, all of the Shares, which would otherwise have
been cancelled and paid in cash in accordance with such
Subsection 2.1(b), shall instead be cancelled, and
unrestricted shares of common stock of AMP or the
corporation or other entity effecting a Change of Control
(in either case, appropriately adjusted to reflect such
transaction) shall be delivered to Ripp on the earliest of
(i) August 1, 2006, (ii) the date of Ripp's death or
disability, and (iii) the date of termination of Ripp's
employment with AMP that is mutually agreed upon by the
parties.
3. Compliance with SEC Regulations.
3.1. Separate and apart from the restrictions contained in Section 2
hereof, the Federal securities laws and the rules and regulations
thereunder impose certain restrictions on the resale, reoffer or
other disposition of shares of AMP common stock that are
unregistered under the Securities Act and/or are held by persons
who are "affiliates" of AMP, as that term is defined in Rule 405
promulgated under the Securities Act. In view of the fact that
the grant of Shares under this Agreement consists of unregistered
AMP common stock and, further, because Ripp is an "affiliate" of
AMP, an effective registration statement must be filed under the
Securities Act covering the resale or reoffer of the Shares, or
he must comply with the requirements of Rule 144 under the
Securities Act before he can publicly sell or reoffer the Shares,
or he must otherwise rely on one of the other exemptions from
registration that may be available. None of the provisions of
this Agreement shall relieve Ripp of his obligations to comply
with applicable Federal and state securities laws in connection
with the Shares and transactions related to the Shares.
4. Legends.
4.1. Each certificate evidencing the Shares shall bear three legends
in the following forms:
a. "The securities represented by this certificate have not
been registered under the Securities Act of 1933, as amended
(the "Act"), or under the securities laws of any state.
These shares may not be sold, offered for sale, transferred,
pledged or hypothecated in the absence of an effective
registration statement for the shares under the Act and
applicable state securities laws, or an opinion of counsel
and other assurances satisfactory to AMP Incorporated, prior
to the transaction, that registration is not required under
the Act or under the securities laws of any state."
b. "The registered holder of the shares represented by this
certificate may, at the time of issuance thereof, be deemed
an affiliate of the issuer under the Securities Act of 1933,
as amended."
c. "The shares represented by this certificate are subject to,
and may not be transferred except in compliance with, a
Restricted Stock Agreement dated August 20, 1998 between AMP
Incorporated and Robert M. Ripp. These shares are subject
to forfeiture in the event of a breach of the terms and
conditions of said Restricted Stock Agreement. A copy of
that Agreement is available without cost from AMP
Incorporated, Harrisburg, Pennsylvania."
4.2. In order to facilitate any sale or other disposition of the
Shares by Ripp to persons entitled to take the Shares free and
clear of the restrictions of this Agreement, AMP agrees to
promptly issue, in exchange for legended certificates for the
Shares, unlegended certificates upon written request therefor
from Ripp. Any such request shall contain a representation in
reasonable detail that the Shares represented by such legended
certificates are being transferred in conformance with the terms
of this Agreement.
5. Tax Withholding.
5.1. AMP may deduct from any payment to be made to Ripp any amount
that Federal, state, local or foreign tax laws requires to be
withheld with respect to the Shares upon the vesting of, or the
lapse of restrictions on, all or any part of the Shares. As
additional methods of accomplishing such withholding, Ripp may
elect to have AMP withhold from the Shares, or he may surrender
previously acquired shares of common stock, in a number of whole
shares up to but not exceeding that number that has a then-
current fair market value sufficient to cover the amount of taxes
required to be withheld at such time.
6. Waiver of Section 83(b) Election.
6.1. Ripp acknowledges his knowing waiver of his right under Section
83(b) of the Internal Revenue Code of 1986, as amended, to elect
to have the Shares treated as taxable income for the calendar
year 1998, the year in which the Shares were received by Ripp,
which tax would have been based on the fair market valuation of
the Shares as of the date of the grant of the Shares to Ripp.
7. DIVIDENDS.
7.1. Cash dividends paid on the Shares shall, at the election of Ripp,
either be paid directly to Ripp or be automatically reinvested in
additional shares of AMP common stock under AMP's Enhanced
Dividend Reinvestment Plan. Any such additional shares, together
with any stock dividends paid on the Shares, shall not be subject
to the terms, conditions and restrictions set forth in this
Agreement and shall be acquired by Ripp notwithstanding that the
Shares with respect to which such dividend was paid may have been
forfeited under the terms of this Agreement prior to the payment
date for such dividend.
8. Stock Power.
8.1. Upon the request of AMP from time to time, Ripp agrees to execute
and deliver to AMP one or more stock powers in such form as may
be specified by the Corporate Secretary of AMP, authorizing the
transfer of the Shares to AMP.
9. Governing Law.
9.1. This Agreement shall be governed by and construed in all respects
in accordance with the laws of the Commonwealth of Pennsylvania
and applicable Federal law.
10. Severability.
10.1. In the event any one or more of the provisions, or portions
thereof, contained or referenced in this Agreement shall for any
reason be or be deemed to be invalid, illegal or unenforceable,
such provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be so construed or deemed
amended without materially altering the intent of the Agreement,
such provision shall be stricken and the remaining provisions
shall continue in full force and effect and be construed as if
such provision, to the extent it is invalid, illegal or
unenforceable, had never been contained herein.
11. Non-Waiver.
11.1. The failure of any party to enforce the provisions hereof or
to exercise the rights granted hereunder, or the Agreement of the
parties to waive enforcement thereof, at any time or for any
period of time shall not constitute or be construed to be a
waiver of any other failure or breach of such provisions or
rights, or any other provision of this Agreement, or of the right
of such party thereafter to enforce each and every such provision
or right, nor shall such failure or agreement be deemed to be an
amendment to this Agreement. Each waiver under this Agreement
shall be express and in writing.
12. Notices.
12.1. Any notice or demand hereunder or under statute, to be
effective, must be in writing and delivered personally or sent to
telegram, facsimile, express carrier or other delivery that
provides a written confirmation, or by certified or registered
mail, postage or other expenses prepaid, to:
AMP at: Corporate Secretary
AMP Incorporated
P.O. Box 3608
M/S 176-48
Harrisburg, PA 17105
Ripp at: Robert M. Ripp
AMP Incorporated
P.O. Box 3608
M/S 176-40
Harrisburg, PA 17105
The above addresses may be changed at any time by giving prompt
written notice as provided above.
13. Successors.
13.1. This Agreement shall be binding on the heirs, executors,
administrators and successors of the parties hereto.
14. Counterparts.
14.1. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which
together shall constitute but one and the same Agreement.
15. Entire Agreement.
15.1. This Agreement represents the entire understanding and
agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and
understandings either written or oral. This Agreement may be
modified or amended only by an instrument in writing duly
executed by Ripp and an authorized representative of AMP.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
AMP INCORPORATED
By:____________________ By:_____________________
[Title] Robert M. Ripp
Exhibit 31
AMENDMENT TO
EXECUTIVE SEVERANCE AGREEMENT
WITH MR. RIPP
This Amendment is made to that certain Executive Severance
Agreement, dated as of August 8, 1996 as thereafter amended prior to the
date hereof (the "Agreement"), between AMP Incorporated (the "Company") and
Robert Ripp (the "Executive"). Capitalized terms used but not defined
herein shall have the meanings ascribed to them in the Agreement.
WHEREAS, the Company has determined that it is in its best
interest and that of its stockholders to amend the Agreement as set forth
herein;
NOW THEREFORE, in accordance with Section 16 of the Agreement,
the Company and the Executive agree that the Agreement shall be amended as
follows, effective as of August 20, 1998:
1. The second paragraph of Section 1(a) of the Agreement is
amended to delete the number "two" wherever it appears therein and to
replace it with the number "three".
2. The last word of the first sentence of Section 3(a) of the
Agreement shall be changed from "two" to "three".
3. Clause (i) of Section 3(c) of the Agreement is amended in
its entirety to read as follows: "(i) a period of thirty-six months after
termination or".
4. The Agreement is amended by adding the following as a new
Section 19, as follows:
19. Pooling of Interests Transaction Provisions. If it is
determined that application of the provisions of Sections 2(a)
and (d) of this Agreement would adversely affect the Company's
ability to consummate a Change of Control transaction that is
intended to be accounted for as a "pooling of interests," such
provisions shall not be implemented and, in lieu thereof, in
connection with such Change of Control transaction, (i) all
outstanding Stock Bonus Units shall be distributed to you,
immediately prior to such Change of Control, in the form of
shares of the common stock of the Corporation (computed in the
manner otherwise provided under Section 2(a) of this Agreement)
and (ii) all unvested restricted shares, if any, granted to you
pursuant to the terms of a Restricted Stock Agreement with the
Corporation, which would otherwise have been paid in cash in
accordance with Section 2(d) of this Agreement, shall be
cancelled, and unrestricted shares of common stock of the
Corporation or other entity effecting the Change of Control
transaction (in either case, appropriately adjusted to reflect
such Change of Control transaction) shall be delivered to you on
the date or dates designated in such Restricted Stock Agreement
for the vesting of unrestricted shares granted thereunder,
including by reason of death, disability or mutually agreed upon
termination of employment.
The effective date of this Amendment shall be August 20, 1998.
Except as herein modified, the Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the Company and the Executive have executed
this Amendment as of the date first set forth above.
AMP INCORPORATED
By:_____________________
Title:
________________________
Robert Ripp
APPROVED:
By:________________________
Chairman, Compensation and
Management Development
Committee
Exhibit 32
AMP Letterhead
September 1, 1998
Dear Fellow Shareholder:
Your Board of Directors, after carefully considering
AlliedSignal's unsolicited offer, recommends that you REJECT THIS OFFER AND
NOT TENDER ANY OF YOUR SHARES. We are confident that the path to greater
value is through AMP's carefully designed profit improvement program. This
strategic plan, which was first announced this past June, is now being
implemented on an accelerated basis. We look forward to discussing this
with you in the coming weeks and months.
IN THE MEANTIME, YOU DO NOT NEED TO TAKE ANY ACTION NOW -- AND,
MOST IMPORTANTLY, YOU DO NOT NEED TO TENDER ANY OF YOUR SHARES.
AlliedSignal has selected September 11 as the initial expiration
date for its offer. In reality, that date has little significance. The
AlliedSignal offer has numerous conditions that are unsatisfied and will
remain unsatisfied on September 11. IT IS ENTIRELY CLEAR THAT ALLIEDSIGNAL
WILL NOT PURCHASE A SINGLE SHARE WHEN SEPTEMBER 11 HAS COME AND GONE. All
they will do is announce that they are extending their offer until sometime
in the future.
THERE IS NO NEED FOR YOU TO TAKE ANY ACTION NOW and don't let
AlliedSignal or its agents try to tell you otherwise.
On behalf of AMP's Board of Directors and management, I give you
our pledge that we will continue to do everything possible to protect the
interests of AMP's relevant constituencies, including its shareholders.
We appreciate your continued support.
Sincerely,
/s/ Robert Ripp
----------------------------------------
Robert Ripp
Chairman and Chief Executive Officer
IF YOU HAVE ANY QUESTIONS OR REQUIRE ANY ASSISTANCE
IN WITHDRAWING ANY SHARES YOU MAY HAVE TENDERED,
PLEASE CALL:
INNISFREE M&A INCORPORATED
CALL TOLL FREE: (888) 750-5834
BANKS AND BROKERS CALL COLLECT: (212) 750-5833
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), and
Dorothy J. Hiller (Assistant Manager, Shareholder Services). 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") to act as
its financial advisor in connection with the AlliedSignal Offer, for which
CSFB will receive customary fees, as well as reimbursement of reasonable
out-of-pocket expenses. In addition, AMP has agreed to indemnify CSFB and
certain related persons against certain liabilities, including certain
liabilities under the federal securities laws, arising out of its
engagement. CSFB is an investment banking firm that provides a full range
of financial services for institutional and individual clients. CSFB does
not admit 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 CSFB. 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 the normal course of its business, CSFB
regularly buys and sells securities issued by AMP for its own account and
for the accounts of its customers, which transactions may result in CSFB
and its associates 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 August 19, 1998, CSFB had a net long position of 124,466
shares of AMP common stock.
