SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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August 28, 1998
Dear AMP Retiree:
As you undoubtedly have seen and heard, AlliedSignal is waging a massive
public relations campaign to try to drum up support for its opportunistic
$44.50 offer. I can assure you that their calculated effort to attack AMP
and its value will not succeed. Our job, as always, is to stay focused on
protecting the interests of our shareholders, employees and other
constituencies, including retirees, and we are confident that we have
chosen the right course with our strategic plan.
Many of you have questions about AlliedSignal's tender offer and upcoming
consent solicitation, and the impact of these events on the AMP shares you
may own directly or as a participant in the 401(k) plans. Let me address
some of these issues:
AlliedSignal's tender offer has a scheduled expiration date of September
11, 1998. In reality, that date has little significance. The offer is
subject to numerous conditions -- such as the elimination of AMP's rights
plan -- and I can assure you that these conditions cannot be met by
September 11. AlliedSignal can be expected to extend its offer for a
substantial period of time, and even shareholders who may ultimately wish
to consider the offer have no need to tender their shares now.
AlliedSignal also intends to engage in a consent solicitation, asking AMP
shareholders to more than double the size of the Board and "pack" the Board
with 17 AlliedSignal officers and directors. These AlliedSignal insiders,
if elected, would constitute a majority of our Board and, not surprisingly,
would support the AlliedSignal takeover.
AMP will be conducting an active countersolicitation, asking our
shareholders to oppose AlliedSignal's solicitation of consents. Only
shareholders of record on October 15, 1998 will be eligible to vote, so you
can expect that this solicitation will not begin in earnest until
mid-October.
We believe that AlliedSignal's desire to pack AMP's Board with 17 of its
own officers and directors is particularly outrageous and would create
irreconcilable conflicts of interest. It is hard to imagine a circumstance
in which AlliedSignal's nominees would want to continue our efforts to
increase the value of AMP. It is, after all, in AlliedSignal's own
interest to pay our shareholders as low a price as possible for their
shares.
AMP's Board recently amended our shareholder rights plan in order to
protect AMP's shareholders, employees and other constituencies, including
retirees. AlliedSignal has complained long and loud about this -- just as
we expected they would -- because the amendments were designed to prevent
AlliedSignal from buying AMP on the cheap. The rights plan now provides
that if AMP's independent directors cease to constitute a majority of the
Board, the rights plan could not be "redeemed" until November 1999.
The effect of the rights plan, as amended, is that if AlliedSignal places
its nominees on AMP's Board, AMP could not be sold until November 1999
giving AMP the opportunity to realize the benefits of its profit
improvement plan. Of course, once AMP has demonstrated the ability to meet
-- and hopefully beat -- the profit improvement plan, AMP will no longer be
a bargain purchase opportunity for AlliedSignal, which may well cause it to
lose interest.
As evidence of its confidence in the AMP management team and in all of our
employees -- and in the expected results of our strategic program -- our
Board also resolved not to adopt a new shareholder rights plan for at least
6 months following the expiration of our existing plan in November 1999.
Finally, I want to reiterate what I said about our profit improvement plan
at our Town Meeting with employees on Monday: we are accelerating its
implementation with a renewed spirit and an absolute determination to make
AMP a stronger and more competitive company for all of us.
I will continue to provide you with regular updates as events develop --
and you should feel free to contact me with any thoughts or questions you
may have.
Our best response to AlliedSignal's opportunistic offer is to really move
the performance needle. I am urging employees to direct their energy and
skills to making AMP the premier company we know it to be.
For those of you that are shareholders, we urge you not to tender your
shares to AlliedSignal and we ask you to oppose their solicitation of
consents.
These are challenging times for AMP, and I need your support.
Robert Ripp
Chairman and CEO
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.
