PRELIMINARY COPY -- SUBJECT TO COMPLETION -- DATED AUGUST 13, 1998
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
CONSENT REVOCATION STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant {X}
Filed by a Party other than the Registrant { }
Check the appropriate box:
{X} Preliminary Proxy Statement (Consent Revocation Statement)
{ } Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
{ } Definitive Proxy Statement (Consent Revocation Statement)
{ } Definitive Additional Materials
{ } Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
AMP INCORPORATED
----------------------------
(Name of Registrant as specified in its charter)
----------------------------
(Name of person(s) filing proxy statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
{X} No fee required.
{ } Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transactions:
(5) Total fee paid.
_____
{ } Fee paid previously with preliminary materials.
{ } Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
PRELIMINARY COPY
SUBJECT TO COMPLETION, DATED AUGUST 13, 1998
AMP INCORPORATED
P.O. BOX 3608
HARRISBURG, PENNSYLVANIA
___________
CONSENT REVOCATION STATEMENT
BY THE BOARD OF DIRECTORS OF AMP INCORPORATED
IN OPPOSITION TO THE SOLICITATION OF CONSENTS
BY ALLIEDSIGNAL INC. AND PMA ACQUISITION CORPORATION
___________
__________, 1998
This Consent Revocation Statement and the accompanying WHITE Consent
Revocation Card are being furnished by the Board of Directors (the "Board")
of AMP Incorporated, a Pennsylvania corporation ("AMP" or the "Company"),
to the holders of outstanding shares of AMP's common stock, without par
value (the "Common Stock"), in opposition to the solicitation by
AlliedSignal Inc. ("AlliedSignal") and its wholly owned subsidiary, PMA
Acquisition Corporation ("PMA"), of written consents from the shareholders
of AMP.
On August 4, 1998, AlliedSignal publicly announced its intention to
commence an unsolicited offer to purchase all outstanding shares of Common
Stock of AMP at a price of $44.50 per share in cash. On August 10, 1998,
AlliedSignal through PMA commenced its unsolicited tender offer to purchase
all outstanding shares of Common Stock at a price of $44.50 per share (the
"AlliedSignal Offer").
AlliedSignal is also seeking to take control of your Company's Board
of Directors by placing 17 of its own directors and executive officers (the
"AlliedSignal Nominees") on your Company's Board. The AlliedSignal
Nominees, if elected, would constitute a substantial majority of AMP's
directors. AlliedSignal proposes to do this by soliciting consents from
shareholders of the Company to amend certain provisions of the Company's
By-laws, including a proposed By-law amendment that would require the Board
to consist of 28 directors (the "Board-Packing Proposal"), thereby more
than doubling the size of the Board. At present, AMP's Board consists of
11 directors, so the AlliedSignal Board-Packing Proposal, if approved,
would create 17 new vacancies on the Board. AlliedSignal is also
soliciting consents to seek to elect the AlliedSignal Nominees to fill all
of these 17 new vacancies. If the AlliedSignal Board-Packing Proposal is
approved, the AlliedSignal Nominees would run unopposed by any candidate
nominated by your Board. Accordingly, a consent in favor of the
AlliedSignal proposals is a consent to turn over control of your Board to
AlliedSignal. CONSEQUENTLY, AMP'S BOARD OF DIRECTORS UNANIMOUSLY OPPOSES
THE ALLIEDSIGNAL CONSENT SOLICITATION AND URGES YOU NOT TO SIGN THE BLUE
CONSENT CARD SENT TO YOU BY ALLIEDSIGNAL.
EVEN IF YOU PREVIOUSLY SIGNED AND RETURNED ALLIEDSIGNAL'S BLUE CONSENT
CARD, YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE. WE URGE YOU TO SIGN, DATE
AND MAIL THE ENCLOSED WHITE CONSENT REVOCATION CARD IN THE POSTAGE-PAID
ENVELOPE PROVIDED. YOUR PROMPT ACTION IS IMPORTANT. PLEASE RETURN THE
WHITE CONSENT REVOCATION CARD TODAY.
IF YOUR SHARES ARE HELD IN "STREET NAME," ONLY YOUR BROKER OR BANKER
CAN VOTE YOUR SHARES. PLEASE CONTACT THE PERSON RESPONSIBLE FOR YOUR
ACCOUNT AND INSTRUCT HIM OR HER TO VOTE A WHITE CONSENT REVOCATION CARD ON
YOUR BEHALF TODAY.
This Consent Revocation Statement and the enclosed WHITE Consent
Revocation Card are first being mailed to shareholders on or about
____________, 1998.
If you have any questions about giving your revocation of consent or
require assistance, please call Innisfree M&A Incorporated ("Innisfree"),
the firm assisting AMP in this solicitation, at the phone numbers shown
below:
INNISFREE M&A INCORPORATED
501 MADISON AVENUE, 20TH FLOOR
NEW YORK, NEW YORK 10022
CALL TOLL FREE: (888) 750-5834
BANKS & BROKERS CALL COLLECT: (212) 750-5833
___________
REASONS FOR OPPOSING THE ALLIEDSIGNAL SOLICITATION
AlliedSignal is soliciting consents (the "AlliedSignal Consent
Solicitation") in favor of five separate proposals, including the Board-
Packing Proposal and the proposal to elect the AlliedSignal Nominees to
constitute a majority of the members of AMP's Board. Each of the
AlliedSignal proposals (the "AlliedSignal Consent Proposals") is set forth
below and the text of the proposed amendments to the Company's By-laws
(AlliedSignal Consent Proposals 1, 2 and 3) is set forth in Annex 1 hereto:
Allied Signal PROPOSAL 1.:
Amend Section 2.2 of Article II of the Company's By-laws to fix the number
of directors of the Company at twenty-eight and to provide that Section 2.2
may be amended or repealed only with the approval of shareholders of the
Company holding a majority of the Company's outstanding voting shares;
Allied Signal PROPOSAL 2.:
Amend Section 2.4 of Article II of the Company's By-laws to provide that
vacancies on the Board created as a result of a shareholder amendment to
the Company's By-laws may be filled only with the approval of shareholders
of the Company holding a majority of the Company's outstanding voting
shares and that this amendment to Section 2.4 may be further amended or
repealed only with the approval of shareholders of the Company holding a
majority of the Company's outstanding voting shares;
Allied Signal PROPOSAL 3.:
Amend Section 1.7.2 of Article I of the Company's By-laws to clarify that a
shareholder seeking to nominate persons for election to the Board by
shareholder action by written consent need not comply with the Advance
Notification Provisions and to provide that this amendment to Section 1.7.2
may be further amended or repealed only with the approval of shareholders
of the Company holding a majority of the Company's outstanding voting
shares;
Allied Signal PROPOSAL 4.:
Elect Hans W. Becherer, Lawrence A. Bossidy, Ann M. Fudge, Paul X. Kelley,
Peter M. Kreindler, Robert P. Luciano, Robert B. Palmer, Russell E. Palmer,
Frederic M. Posses, Donald J. Redlinger, Ivan G. Seidenberg, Andrew C.
Sigler, John R. Stafford, Thomas P. Stafford, Richard F. Wallman, Robert C.
Winters and Henry T. Yang, the AlliedSignal Nominees, to serve as directors
of the Company (or, if any AlliedSignal Nominee is unable to serve as a
director of the Company due to death, disability or otherwise, any other
person designated as an AlliedSignal Nominee by the remaining AlliedSignal
Nominee or Nominees); and
Allied Signal PROPOSAL 5.:
Repeal each provision of and amendment to the Company's By-laws adopted
subsequent to July 22, 1998 and prior to the effectiveness of the
AlliedSignal Consent Proposals and the seating of a sufficient number of
AlliedSignal Nominees so that the AlliedSignal Nominees constitute a
majority of the Board.
The effectiveness of each of the AlliedSignal Consent Proposals is
subject to, and conditioned upon, the adoption of each of the other
AlliedSignal Consent Proposals.
AlliedSignal commenced the AlliedSignal Offer on August 10, 1998 and
AMP's Board, with the assistance of its legal and financial advisors, is
currently reviewing the AlliedSignal Offer and related matters. AMP
shareholders should be assured that the Board is acutely aware of its
fiduciary duties and, as always, intends to, and will, act in a manner
consistent with such duties and in the best interests of AMP, its
shareholders and other relevant constituencies. In accordance with
applicable provisions of the federal securities laws, the Board will make a
recommendation with respect to the AlliedSignal Offer on or before August
21, 1998 and will inform shareholders as to its recommendation and its
reasons therefor.
AlliedSignal Consent Proposals 1, 2, 3 and 4, taken together, are
designed to enable AlliedSignal to take control of your Company's Board.
AlliedSignal Proposal 5 is designed to nullify unspecified By-laws which
may be adopted by your Board in its efforts to act in and protect the
interests of the Company. Your Board believes that the purpose of the
AlliedSignal Consent Proposals and the AlliedSignal Consent Solicitation
is to pressure your Board and limit its options and flexibility in
evaluating and responding to the AlliedSignal Offer and acting in the best
interests of AMP, its shareholders and other relevant constituencies.
While the Board recognizes that the AlliedSignal Nominees, if elected,
would have certain state law obligations to AMP, the Board firmly believes
that the AlliedSignal Nominees, all of whom are directors or executive
officers of AlliedSignal, could be expected to act in furtherance of the
interests of AlliedSignal.
The Board further believes that the interests of AMP, its shareholders
and other relevant constituencies will be best served if the Company's
current directors - who will act entirely independently of the interests of
AlliedSignal - continue to manage your Company and make all decisions with
respect to the AlliedSignal Offer and related matters.
GIVEN THESE REASONS, YOUR BOARD OF DIRECTORS UNANIMOUSLY OPPOSES THE
ALLIEDSIGNAL CONSENT SOLICITATION AND URGES YOU NOT TO SIGN THE BLUE
CONSENT CARD SENT TO YOU BY ALLIEDSIGNAL.
EVEN IF YOU PREVIOUSLY SIGNED AND RETURNED ALLIEDSIGNAL'S BLUE CONSENT
CARD, YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE. WE URGE YOU TO SIGN, DATE
AND MAIL THE ENCLOSED WHITE CONSENT REVOCATION CARD IN THE POSTAGE-PAID
ENVELOPE PROVIDED.
IF YOU HAVE ANY QUESTIONS, PLEASE CALL INNISFREE TOLL-FREE AT (888)
750-5834. BANKS AND BROKERS SHOULD CALL COLLECT AT (212) 750-5833.
THE CONSENT PROCEDURE
Under Pennsylvania law, the unrevoked consent of the holders of not
less than a majority of the shares of Common Stock outstanding and entitled
to vote on the Record Date (as defined below) must be obtained, within the
time limits specified in the Company's By-laws, to adopt each of the
AlliedSignal Consent Proposals. Each share of Common Stock is entitled to
one vote per share. Since consents are required from the holders of record
of a majority of the shares of Common Stock outstanding on the Record Date
in order for each of the AlliedSignal Consent Proposals to be adopted, a
failure to give consent or a broker non-vote will have the same effect as a
vote against such proposals.
Under Section 1.7.1 of AMP's By-laws, for the purpose of any consent,
the Board may fix a record date, which record date shall not be more than
90 days prior to the date of the action or actions for which consents are
being solicited.
Section 1.7.2 of AMP's By-laws establishes orderly procedures for the
setting of a record date for consent solicitations. Such section of the
By-laws provides that any shareholder of AMP seeking to have AMP's
shareholders authorize or take corporate action by written consent shall,
by written notice to AMP's Secretary, request the Board to fix a record
date. The Board is required to promptly, but in all events within ten days
after the date on which such request is received, adopt a resolution fixing
the record date. On August 11, 1998, AlliedSignal requested that the Board
fix a record date for the AlliedSignal Consent Solicitation. On __________
, 1998, the Board fixed a record date of ________, 1998 (the "Record Date")
for the AlliedSignal Consent Solicitation. As of the Record Date, there
were ___________ shares of Common Stock issued and outstanding.
A shareholder may revoke any previously signed consent by signing,
dating and returning a WHITE Consent Revocation Card. If no direction is
made on the Consent Revocation Card with respect to one or more of the
AlliedSignal Consent Proposals, or if a shareholder marks either the
"revoke consent" or "abstain" box on the Consent Revocation Card with
respect to one or more of the AlliedSignal Consent Proposals, all
previously executed consents with respect to such AlliedSignal Consent
Proposals will be revoked. A consent may also be revoked by delivery of a
written consent revocation to AMP or AlliedSignal. SHAREHOLDERS ARE URGED,
HOWEVER, TO DELIVER ALL CONSENT REVOCATIONS TO INNISFREE M&A INCORPORATED
("INNISFREE"), THE FIRM ASSISTING AMP IN THIS SOLICITATION, AT 501 MADISON
AVENUE, 20TH FLOOR, NEW YORK, NEW YORK 10022. AMP requests that if a
consent revocation is instead delivered to AlliedSignal, a photostatic copy
of the revocation also be delivered to AMP, c/o Innisfree, at the address
set forth above, so that AMP will be aware of all revocations. Any consent
revocation may itself be revoked at any time by signing, dating and
returning to AlliedSignal a subsequently dated blue consent card sent to
you by AlliedSignal, or by delivery of a written revocation of such consent
revocation to AMP or AlliedSignal.
If any shares of Common Stock that you owned on the Record Date were
held for you in an account with a stock brokerage firm, bank nominee or
other similar "street name" holder, you are not entitled to vote such
shares directly, but rather must give instructions to the stock brokerage
firm, bank nominee or other "street name" holder to grant or revoke consent
for the shares of Common Stock held in your name. Accordingly, you should
contact the person responsible for your account and direct him or her to
execute the enclosed WHITE Consent Revocation Card on your behalf. You are
urged to confirm in writing your instructions to the person responsible for
your account and provide a copy of those instructions to AMP, c/o
Innisfree, at the address set forth above so that AMP will be aware of your
instructions and can attempt to ensure such instructions are followed.
YOU HAVE THE RIGHT TO REVOKE ANY CONSENT YOU MAY HAVE PREVIOUSLY GIVEN
TO ALLIEDSIGNAL. TO DO SO, YOU NEED ONLY SIGN, DATE AND RETURN IN THE
ENCLOSED POSTAGE PREPAID ENVELOPE THE WHITE CONSENT REVOCATION CARD WHICH
ACCOMPANIES THIS CONSENT REVOCATION STATEMENT. IF YOU DO NOT INDICATE A
SPECIFIC VOTE ON THE WHITE CONSENT REVOCATION CARD WITH RESPECT TO ONE OR
MORE OF THE ALLIEDSIGNAL CONSENT PROPOSALS, THE CONSENT REVOCATION CARD
WILL BE USED IN ACCORDANCE WITH THE AMP BOARD'S RECOMMENDATION TO REVOKE
ANY CONSENT WITH RESPECT TO SUCH PROPOSALS.
IF YOU DO NOT SUPPORT THE ALLIEDSIGNAL CONSENT PROPOSALS AND HAVE NOT
SIGNED AN ALLIEDSIGNAL CONSENT, YOU MAY SHOW YOUR OPPOSITION TO THE
ALLIEDSIGNAL CONSENT PROPOSALS BY SIGNING, DATING AND RETURNING THE
ENCLOSED WHITE CONSENT REVOCATION CARD. THIS WILL BETTER ENABLE AMP TO
KEEP TRACK OF HOW MANY SHAREHOLDERS OPPOSE THE ALLIEDSIGNAL CONSENT
PROPOSALS.
AMP has retained Innisfree to assist in communicating with
shareholders in connection with the AlliedSignal Consent Solicitation and
to assist in our efforts to obtain consent revocations. If you have any
questions about how to complete or submit your WHITE Consent Revocation
Card or any other questions, Innisfree will be pleased to assist you. You
may call Innisfree toll-free at (888) 750-5834. Banks and brokers should
call collect at (212) 750-5833.
CERTAIN LITIGATION
On August 4, 1998, AlliedSignal filed a complaint against AMP in the
United States District Court for the Eastern District of Pennsylvania
(AlliedSignal Corporation v. AMP Incorporated, Civil Action No. 98-CV-
4058). In the complaint, AlliedSignal seeks a declaratory judgement as to,
among other things, the applicability and/or validity of the Continuing
Director provisions contained in AMP's Rights Agreement (the "Rights Plan")
and the constitutionality of certain provisions of the Pennsylvania
Business Corporation Law under the Commerce Clause and Supremacy Clause of
the United States Constitution. In addition, AlliedSignal seeks to enjoin
AMP from, among other things, (i) fixing a record date for determining the
shareholders entitled to vote on the proposals in the AlliedSignal Consent
Solicitation more than ten days after the date of AlliedSignal's written
notice requesting that a record date be set; (ii) increasing the size of
AMP's Board and filling the new seats with Board nominees after
commencement of the AlliedSignal Consent Solicitation; (iii) refusing to
redeem AMP's Rights Plan or amending the Rights Plan so as to make the
Rights inapplicable to the AlliedSignal Offer, and refusing to grant prior
approval of the AlliedSignal Offer and second-step merger for purposes of
the Pennsylvania Business Combination Statute; (iv) amending its By-laws to
in any way impede the effective exercise of the stockholder franchise; or
(v) taking any steps to impede or frustrate the ability of AMP's
shareholders to consider or make their own determination as to whether to
accept the terms of the AlliedSignal Offer and the proposals in the
AlliedSignal Consent Solicitation, or taking any other action to thwart or
interfere with the AlliedSignal Offer or the AlliedSignal Consent
Solicitation.
AMP has not yet filed an answer, but intends to vigorously defend the
claims in AlliedSignal's complaint.
On or about August 6, 1998, a shareholder lawsuit purported to be a
class action was filed against AMP and the members of its Board of
Directors in the United States District Court for the Eastern District of
Pennsylvania (Blum v. William J. Hudson, Jr. et al., Civil Action No. 98-
CV-4109) (the "Blum Action"). In the complaint, plaintiff alleges that AMP
and its directors have improperly refused to consider the AlliedSignal
Offer and have wrongfully relied upon the Rights Plan and certain
provision of Pennsylvania Business Corporation Law in an attempt to block
the AlliedSignal Offer. Plaintiff seeks, among other things, a declaration
(i) that certain aspects of the Company's Rights Plan are invalid and in
violation of the Board's fiduciary duties, compelling the Board to amend
the Rights Plan and enjoining the enforcement of certain provisions
thereof; (ii) that the Rights Plan is unconstitutional because it violates
the Commerce Clause; (iii) enjoining AMP and the Board from taking any
steps to prevent AMP's shareholders from making their own determination as
to whether to accept the terms of the AlliedSignal Offer; (iv) enjoining
AMP and the Board from commencing any litigation relating to the lawsuit
in any other forum that would delay commencement and consummation of the
AlliedSignal Offer; and (v) ordering the Board to (a) cooperate fully with
any entity, including AlliedSignal, having a bona fide interest in proposing
any transaction that would maximize shareholder value; (b) immediately
undertake an evaluation of AMP's worth as a merger/acquisition candidate;
(c) take appropriate steps to enhance AMP's value and attractiveness as a
merger/acquisition candidate, including the creation of an active auction
of the Company; (d) act independently so that the interests of the
Company's public shareholders will be protected; and (e) ensure that no
conflicts of interest exist between the Board and their fiduciary
obligations. Three other purported class action lawsuits have also been
filed in the United States District Court for the Eastern District of
Pennsylvania alleging similar claims as set forth in the Blum Action.
AMP has not yet filed an answer, but intends to vigorously defend the
claims in the Blum Action and other shareholder suits.
BOARD OF DIRECTORS
The following table identifies the current members of the Board.
Director, Age and
Year First Elected
Director Principal Occupation and Business Experience
------------------ --------------------------------------------
Ralph D. DeNunzio President of Harbor Point Associates, Inc.,
Age 66 New York, New York, a private investment and
1977 (3)(5) consulting firm, having served in that
capacity for more than the past five years.
Mr. DeNunzio also serves as a director of
Harris Corporation, Federal Express Corporation,
and NIKE, Inc.
Barbara Hackman President and Chief Executive Officer of Barbara
Franklin Franklin Enterprises, Washington, D.C., a private,
Age 58 international consulting and investment firm, since
1993(2)(4) 1995. Ms. Franklin served as the U.S. Secretary of
Commerce in the Bush Administration. She also serves
as a director of Aetna, Inc., Cincinnati Milacron Inc.,
The Dow Chemical Company, and MedImmune, Inc.
Joseph M. Hixon III Retired Chairman of the Board of Hixon Properties
Age 60 Incorporated, San Antonio, Texas, maintaining real
1988(2)(5) estate holdings and other investments. Mr. Hixon
served as Chairman of Hixon Properties Incorporated
for more than five years.
William J. Hudson, Jr. Chief Executive Officer and President of the Company.
Age 64 Mr. Hudson has served as an officer of the
1992(1)(5) Company for more than the past five years.
He also serves as a director of Carpenter Technology
Corporation and The Goodyear Tire & Rubber Company.
Joseph M. Magliochetti President, Chief Operating Officer and a director
Age 56 of Dana Corporation, Toledo, Ohio, a manufacturer
1996(2) of automotive components and systems. Mr. Magliochetti
has served as President of Dana Corporation
since 1995, prior to which he was President of Dana's
North American operations. He was elected a director
of Dana Corporation in 1996 and elected Chief Operating
Officer in 1997.
James E. Marley Chairman of the Board of Directors of the Company.
Age 63 Mr. Marley has served as an officer of the Company
1986(1)(5) for more than the past five years. He also serves as
a director of Armstrong World Industries, Inc.
and Harsco Corporation.
Harold A. McInnes Retired Chairman of the Board of Directors and Chief
Age 70 Executive Officer of the Company. Mr. McInnes
1981(1)(4) served as an officer of the Company for more than five
years.
Jerome J. Meyer Chairman of the Board and Chief Executive Officer
Age 60 of Tektronix, Inc., Wilsonville, Oregon, an electronic
1996(2) equipment manufacturer. Mr. Meyer has served as
Chairman of the Board and Chief Executive Officer
and as a director of Tektronix for more than
the past five years. He also serves as a director of
Esterline Technologies Corporation and Enron, Corp.
John C. Morley President of Evergreen Ventures, Ltd., Cleveland, Ohio,
Age 66 a family-owned investment company, since 1995.
1991(3)(5) Mr. Morley is a former President, Chief Executive
Officer and director of Reliance Electric Company,
Cleveland, Ohio, a manufacturer of electrical,
mechanical power transmission, and telecommunications
equipment and systems, having served in that capacity
for more than five years. He also serves as a director
of Cleveland Cliffs, Inc., Ferro Corporation, and
Lamson & Sessions, Inc.
Paul G. Schloemer Retired President and Chief Executive Officer
Age 70 of Parker Hannifin Corporation, Cleveland, Ohio,
1991(3)(4) an international manufacturer of hydraulic, pneumatic
and electromechanical components. Mr. Schoemer has
served as a director of Parker Hannifin Corporation
for more than the past five years and he is a former
President and Chief Executive Officer of that
company, having served in that capacity for more than
five years. He also serves as a director of Esterline
Technologies Corporation and Rubbermaid Inc.
Takeo Shiina Chairman of the Advisory Council of IBM Japan, Ltd.,
Age 69 a manufacturer of computer systems located in Japan.
1995(2) Mr. Shiina served as a board member of IBM Japan, Ltd.
from 1962 until his retirement as Chief Executive
Officer in 1992, having served in the capacity as
Chief Executive Officer for more than five years.
He also serves as a director of Air Products and
Chemicals, Inc. and as a member of the European
Advisory Board of Bankers Trust Company.
- ----------
(1) Member of the Executive Committee of the Board.
(2) Member of the Audit Committee of the Board.
(3) Member of the Compensation and Management Development Committee of
the Board.
(4) Member of the Nominating and Governance Committee of the Board.
(5) Member of the Finance Committee of the Board.
SECURITY OWNERSHIP OF DIRECTORS
The Company's Corporate Governance guidelines encourage each member of
the Board to hold Common Stock in an amount having a market value of at
least four times the annual retainer fee. The following table sets forth,
as of August __, 1998, the number of shares of Common Stock beneficially
owned by each director.
<TABLE>
<CAPTION>
Amount of Beneficial Amount of Phantom Total Beneficial and
Ownership Ownership Phantom Ownership
Name of Owner (shares)(1)(2) (shares)(3) (shares)
------------- -------------------- ----------------- --------------------
<S> <C> <C> <C>
Ralph D. DeNunzio 10,000 3,192 13,192
Barbara Hackman Franklin 7,400 1,892 9,292
Joseph M. Hixon III 1,651,114(5) 8,305 1,659,419
William J. Hudson, Jr. 409,138(8)(9) 35,957(4) 445,095
Joseph M. Magliochetti 4,000 2,183 6,183
James E. Marley 315,100(6)(8)(9) 26,453(4) 341,553
Harold A. McInnes 42,689 0 42,689
Jerome J. Meyer 7,300 3,160 10,460
John C. Morley 9,400 6,969 16,369
Paul G. Schloemer 10,000 0 10,000
Takeo Shiina 8,120 2,811 10,931
</TABLE>
---------
(1) Each director owns less than 1% of the Company's outstanding
Common Stock.
(2) Unless otherwise indicated, each director possesses sole voting
and dispositive power (beneficial ownership) with respect to the
shares set forth opposite his or her name. Numbers shown in this
column include options the director has the right to acquire
as beneficial owner within sixty days after August 3, 1998.
(3) Numbers shown in this column include phantom shares: (i)
credited to outside directors under the Outside Directors
Deferred Stock Accumulation Plan; and (ii) credited to outside
and non-employee directors for compensation deferred at the
election of the director as described on page __ of this Consent
Revocation Statement.
(4) Designated executive officers are entitled to defer receipt of
all or a portion of their annual cash bonus. Deferred
compensation may be allocated to a phantom AMP Common Stock
account under the Company's Deferred Compensation Plan as
described in footnote 1 to the Summary Compensation Table on page
of this Consent Revocation Statement. Such phantom shares
are reported in this number. This number also includes phantom
shares of Common Stock credited to the designated executive
officer in an amount equal to the dividend earned on Performance
Restricted Shares, as described in footnote 3 to the Summary
Compensation Table on page __ and footnote 3 to the Security
Ownership of Executive Officers Table on page __ of this Consent
Revocation Statement.
(5) Mr. Hixon holds 15,791 and 120,000 of these shares in two limited
partnerships and shares voting and dispositive powers. In
addition to the beneficial ownership shown in the table, Mr.
Hixon has a 2% residual beneficial interest but no voting or
dispositive powers in a trust that holds 7,392 shares of Common
Stock of the Company.
(6) In addition, 211 shares of Common Stock of the Company are owned
by members of the immediate family of the Nominee; Mr. Marley
disclaims beneficial ownership of this stock. Additionally, 499
shares of Common Stock of the Company are owned by a member of
the immediate family of Mr. Marley in a custodial account over
which Mr. Marley has voting and dispositive powers; Mr. Marley
disclaims beneficial ownership of this stock.
(7) Mr. Schloemer holds 1,400 of these shares of Common Stock of the
Company in a family trust of which he is co-trustee with his wife
and shares voting and dispositive powers.
(8) A portion of the shares reported for Messrs. Hudson and Marley
are Performance Restricted Shares granted under the Company's
1993 LongTerm Equity Incentive Plan. Further, a portion of the
shares reported for Messrs. Hudson and Marley are held in the
Company's Employee Savings and Thrift Plan.
(9) Under the Company's former Bonus Plan (Stock Plus Cash), at
August 3, 1998, Mr. Hudson also had 6,668 Stock Bonus Units.
Under the current 1993 Long-Term Equity Incentive Plan, Mr.
Hudson has 419,500 Stock Options, including 61,800 Stock Options
transferred to a family limited partnership for the benefit of
Mr. Hudson's immediate family; Mr. Marley has 303,600 Stock
Options.
THE BOARD OF DIRECTORS
COMPENSATION
A director who is not an employee of the Company is paid $26,000 per
year for services as a director and also $1,000 for each day in attendance
at a meeting of the Board. Additionally, a director is paid $1,000 for
attendance at each meeting of any committee of the Board on which he or she
serves. The chairperson of any such committee is paid an annual retainer
of $2,500. An outside or non-employee director may also be paid $1,000 per
day for special services or assignments requested by either the Chairman or
the Chief Executive Officer and President of the Company. A director who
is also an employee of the Company does not receive any director or
committee fees. During 1997 the Board of Directors held six meetings.
In 1997, total compensation earned by the directors was as follows:
Director Total Director
Compensation
-------------------------------------------------- --------------
Ralph D. DeNunzio . . . . . . . . . . . . . . . . $ 43,500
Barbara Hackman Franklin . . . . . . . . . . . . 41,500
Joseph M. Hixon III . . . . . . . . . . . . . . . 41,000(1)
William J. Hudson, Jr. . . . . . . . . . . . . . 0(2)
Joseph M. Magliochetti . . . . . . . . . . . . . 37,000(1)
James E. Marley . . . . . . . . . . . . . . . . . 0(2)
Harold A. McInnes . . . . . . . . . . . . . . . . 134,000(3)
Jerome J. Meyer . . . . . . . . . . . . . . . . . 35,000(1)
John C. Morley . . . . . . . . . . . . . . . . . 43,500(1)
Paul G. Schloemer . . . . . . . . . . . . . . . . 37,000
Takeo Shiina . . . . . . . . . . . . . . . . . . 36,000(1)
_______________
(1) This compensation includes amounts with respect to which the
director elected to defer receipt under the terms of the
Company's deferred compensation plan for outside and non-employee
directors, described below.
(2) Messrs. Hudson and Marley were employees as well as directors of
the Company and therefore did not receive any separate director
or committee fees.
(3) This compensation includes consulting fees paid to Mr. McInnes, a
former Chairman of the Board and Chief Executive Officer of the
Company, under a consulting agreement with the Company. Under
the agreement Mr. McInnes was paid a monthly fee of $8,333 for
services other than in his capacity as a director. The
consulting agreement expired on December 31, 1997.
Outside and non-employee directors are permitted to defer receipt of
all or a portion of the annual retainer and the meeting fees. The period
of the deferral is within the discretion of each director, provided however
that payment must be made or commenced no later than the earliest of the
death of the director, a change in control and termination of the
director's services, or the year following the year in which he or she
reaches the age of 72. Deferred compensation may be allocated to either or
both of the following investment options: (i) an interest-bearing account
with interest credited monthly based on 120% of the Long Term Applicable
Federal Rate as published by the Internal Revenue Service and adjusted
quarterly; and (ii) a phantom AMP Common Stock account in which phantom
dividends are reinvested in further phantom stock units. Allocations or
changes in allocations can be made annually and apply prospectively to
compensation earned in future years. Payments of deferred director
compensation can be made in a lump sum or in up to ten annual installments.
The Stock Option Plan for Outside Directors provides that the outside
directors shall receive a grant of 2,000 stock options in the Company's
Common Stock when they are first elected to the Board and in each July
thereafter. Up to a maximum of 10 awards may be made to any one director
and up to 300,000 shares may be awarded to all outside directors in the
aggregate during the 10-year term of the plan. These options vest after 1
year and remain exercisable for 9 years.
BENEFIT PLANS
The Company provides benefits to the directors, the amount of which
varies dependent upon whether the director is presently or was ever
employed by the Company. The Company provides Director and Officer
Liability and Indemnification insurance coverage for all directors.
Directors who are not presently and have never been employed by the Company
(an "Outside Director") are provided with life insurance coverage. Travel
accident insurance coverage is provided to directors who are not currently
employed by the Company.
All directors are eligible to participate in the Company's Employee
Gift Matching Program. Under this program, the Company will match
qualifying charitable contributions made by directors to accredited public
and private schools, colleges, universities and graduate schools in the
United States. The maximum aggregate of a director's gifts to all
institutions during a calendar year that will be matched is $5,000.
RETIREMENT
Currently there are two plans that provide retirement-oriented
deferred compensation for Outside Directors (as defined above), conditioned
upon 5 years of service as a member of the Board. Outside Directors
elected to the Board on or after January 1, 1996 generally receive
"retirement" compensation under the Outside Director Deferred Stock
Accumulation Plan ("Accumulation Plan"). Outside Directors who joined the
Board prior to January 1, 1996 were provided a one-time election to
continue participation in the retirement plan in place prior to adoption of
the Accumulation Plan or convert to the Accumulation Plan.
Under the Accumulation Plan, each Outside Director will receive 300
shares of phantom AMP Common Stock when first elected to the Board, and on
the first day of each of the nine subsequent calendar years of Board
service. The phantom share awards are credited to a deferred phantom stock
account and have no voting rights. On each dividend payment date, phantom
dividends corresponding to the number of accumulated phantom shares are
credited to the phantom stock account and deemed to be invested in
additional phantom shares.
An Outside Director's deferred phantom stock account vests upon the
earlier of the date the director has at least 5 years of service on the
Board, the date of the director's death while serving on the Board, or the
date of the director's 72nd birthday. If the director terminates Board
service with less than 5 years of service (other than on account of death
or attainment of age 72), the account is forfeited. The vested balance in
the deferred phantom stock account is paid to the Outside Director in cash
upon termination of Board service.
Under the retirement plan in effect prior to adoption of the
Accumulation Plan, an Outside Director who has either reached the normal
retirement date (the end of the calendar year in which the director reaches
age 72) or retired early due to disability, and who has served a minimum of
five years on the Board, is eligible for an annual retirement benefit. The
annual retirement benefit is equal to a percentage of the Outside
Director's annual base retainer at the time of retirement, with the actual
percentage being based on the Outside Director's years of service.
In the event of a "change of control", the annual retirement benefit
to which an Outside Director would be entitled based on his or her years of
service at the date service to the Board ceases for any reason shall be
fully vested and payable immediately, without regard to the Outside
Director's then attained age.
A "change of control" as that term is used in this Consent Revocation
Statement, unless otherwise indicated, would generally be deemed to have
occurred if (a) any person or group directly or indirectly acquires
beneficial ownership of 30% or more of the Company 's issued and
outstanding shares of Common Stock, or (b) there occurs a change in the
Board such that the directors constituting the Board at a given point in
time (the "Incumbent Board") and any subsequently elected directors (other
than directors whose initial assumption of office is in connection with an
election contest) who were approved by a vote of at least two-thirds of the
directors still in office who either were directors on the Incumbent Board
or whose assumption of office was previously so approved, no longer
constitute a majority of the Board, or (c) a merger or consolidation of the
Company or the issuance of voting securities of the Company in connection
therewith, other than (i) a merger or consolidation resulting in the voting
securities of the Company continuing to represent at least 66 2/3% of the
combined voting power of the voting securities of the surviving entity, or
(ii) a merger or consolidation effected to implement a recapitalization of
the Company in which no person or group directly or indirectly acquires
beneficial ownership of 30% or more of the Company's issued and outstanding
shares of Common Stock, or (d) the shareholders 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 of all or
substantially all of the assets of the Company, other than such a sale or
disposition to an entity of which at least 70% of the combined voting power
of the voting securities are held by shareholders in substantially the same
proportions as their ownership of the Company immediately prior to such
sale. If the AlliedSignal Offer is consummated or if the AlliedSignal
Nominees are elected, a "change in control" will occur.
COMMITTEES AND MEETINGS
The Board of Directors has five standing committees: the Audit
Committee, the Compensation and Management Development Committee, the
Nominating and Governance Committee, the Finance Committee and the
Executive Committee.
The Audit Committee of the Board of Directors consults with the
Company's management regarding selection of the independent public
accountant; concurs in the appointment or dismissal of the Director,
Internal Audit; holds periodic meetings with the Company's internal and
independent auditors and financial officers as appropriate to monitor
control of the Company's financial resources and audit functions; reviews
the arrangements and related fees for and the scope of the independent
auditor's examination; considers the audit findings and management
response; reviews the independent public accountant's non-audit fees;
reviews significant accounting issues, regulatory changes and accounting or
reporting developments and the impact of such on the Company's financial
statements; reviews the status of special investigations; reviews the
financial statements; oversees the quarterly reporting process; discusses
with the Company's management, the Director, Internal Audit and in-house
legal counsel significant issues relating to litigation or compliance with
environmental or governmental regulations; reviews the Company's electronic
data processing procedures and controls; and reviews the Corporate Code of
Conduct and Conflict of Interest policies and receives reports of
disclosures of any deviations from these policies. During 1997 the Audit
Committee held five meetings.
The Compensation and Management Development Committee of the Board of
Directors makes recommendations to the Board regarding successors to and
the salaries of the Chairman and the Chief Executive Officer and President;
conducts annual performance reviews of the Chairman and the Chief Executive
Officer and President; reviews the salary budget for the executive officers
as a group and salary recommendations made by the Chief Executive Officer
and President for the named executive officers; makes recommendations to
the Board regarding changes to the Company's incentive compensation plans,
executive-only benefit plans and tax-qualified pension and thrift plans;
and reviews participation in, establishes certain targets for, and acts on
awards under the Company's incentive compensation plans for management and
key employees. During 1997 the Compensation and Management Development
Committee held five meetings.
The Nominating and Governance Committee of the Board of Directors
establishes the criteria for selecting candidates for nomination to the
Board; actively seeks candidates who meet those criteria, are highly
qualified and have diverse backgrounds, including qualified female and
minority candidates; makes recommendations to the Board of nominees to fill
vacancies on, or as additions to, the Board; makes recommendations to the
Board on changes in the size, composition and structure of the Board; makes
recommendations to the Board on compensation and benefit programs for the
Board; as appropriate, reviews the performance of the directors and reports
its findings to the Chairman and, in its discretion, to the Board itself;
and considers matters relating to corporate governance and makes decisions
concerning those matters that should be recommended for action by the Board
in executive session. The Nominating and Governance Committee will
consider nominees for election to the Board that are recommended by
shareholders provided that a complete description of the nominees'
qualifications, experience and background, together with a statement signed
by each nominee in which he or she consents to act as such, accompany the
recommendations. Such recommendations should be submitted in writing to
the attention of the Chairman of the Company, and should not include self-
nominations. During 1997 the Nominating and Governance Committee held one
meeting.
The Finance Committee of the Board of Directors reviews and considers
key financial objectives and measures in the AMP Global Strategic Plan, the
Company's cost of capital, cash generation, cash balance objectives and
balance sheet objectives. The Committee also reviews strategic
transactions valued in excess of $10 million; receives periodic reports on
the portfolio of equity/venture capital investments; reviews and assesses
the performance and results of acquisitions and related finance and
accounting practices; reviews management's recommendations regarding public
stock issues and public and private debt issues; advises management and the
Board on the Company's share repurchase strategies; periodically reviews
the Company's dividend policy, dividend recommendations, stock split
proposals and investor relations plans; reviews periodically the Company's
risk management policies and practices (not including internal operating
controls and financial reporting procedures relating to risk management
policies and practices); reviews periodic reports from the Company's
Pension Committee concerning the investment status, investment policy
guidelines and accounting treatment of the Company's benefit plans
involving funds held in trust or otherwise managed and invested on behalf
of the participants in the benefit plans; reviews and approves the
investment policy guidelines for the AMP Foundation's assets; and reviews
the annual charitable giving by the AMP Foundation and the Company, and the
policy guidelines governing such charitable giving. During 1997 the
Finance Committee held three meetings.
The Executive Committee of the Board of Directors has been delegated
the authority to act on behalf of the Board with respect to any matter
within the ordinary course of the business of the Company. The Committee
typically acts on proposed capital expenditures and financial transactions
that require immediate Board action at times that are not near to the
regularly scheduled Board meetings. Certain matters, including those that
under the Pennsylvania Business Corporation Law cannot be delegated by the
Board, are specifically excluded from the authority of the Executive
Committee. All actions taken by the Committee are reported at the next
meeting of the Board for concurrence by the full Board. During 1997 the
Executive Committee did not meet and took no action either in a meeting of
the Committee or by written consent in lieu of a meeting.
<TABLE>
<CAPTION>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
-------------------------------------------- ----------------------------------
Awards
----------------------------------
Other Annual Restricted Securities All Other
Name and principal position Salary Bonus Compensation Stock Awards Underlying Compensation
Year ($) ($) ($) ($) Options/ SARs (#) ($)
--------------------------- ------- ---------- ------- -------------- ------------ ----------------- ------------
(a) (b) (c) (1) (d) (1) (e) (2) (f) (3) (g) (4) (h)
--------------------------- ------- ---------- ------- -------------- ------------ ----------------- ------------
<S> <C> <C> <C> <C> <C> <C>
William J. Hudson, Jr. 1997 810,000 534,600 35,608 1,861,200 63,900 126,940(5)
Chief Executive Officer 1996 810,000 0 32,548 1,717,713 75,600 110,640
and President, and a Director 1995 700,000 437,000 17,947 1,071,875 60,000 173,380
James E. Marley 1997 648,000 429,624 57,707 1,489,900 51,100 99,852(6)
Chairman 1996 648,000 0 26,018 1,373,438 60,500 85,952
1995 560,000 291,000 40,707 857,500 45,000 83,840
Robert Ripp 1997 400,008 198,804 3,440 733,200 25,100 71,915(7)
Executive Vice President 1996 375,000 46,875 24,157 578,675 25,500 67,000
1995 325,008 137,933 13,560 390,163 16,700 61,001
Juergen Gromer(9) 1997 393,189 176,111 28,141 437,100 15,000 0
Vice President 1996 425,626 67,975 19,018 0 22,400 0
1995 412,917 63,687 13,517 0 21,200 0
John E. Gurski 1997 370,008 183,894 165,623 620,400 21,200 49,680(8)
Vice President 1996 350,004 46,200 225,067 538,388 23,800 40,000
1995 285,000 124,315 172,587 317,275 13,600 55,357
</TABLE>
_____________________________
(1) Under the Deferred Compensation Plan, designated executive
officers are permitted to defer receipt of up to 50% of
their annual base salary and all officers of the Company are
entitled to defer receipt of all or a portion of their
annual cash bonus. The period of deferral is within the
discretion of the executive, but is generally until the year
following termination of employment. During the period of
deferral, the deferred compensation may be allocated or
reallocated by the executive between and among the following
investment options: (i) an interest-bearing account with
interest credited monthly based on 120% of the Mid-Term
Applicable Federal Rate as published by the Internal Revenue
Service, adjusted monthly and (ii) a phantom AMP Common
Stock Account in which the phantom dividends are reinvested
in the phantom stock units. Payments of the deferred
compensation can be made at the executive's election in
either a lump sum or up to ten annual installments. Amounts
of salary or bonus attributable to 1995, 1996 and 1997, the
receipt of which has been deferred under this plan, are
nevertheless included in columns (c) and (d), as
appropriate, of the Summary Compensation Table.
(2) Unless otherwise indicated, no executive officer named in
the Summary Compensation Table received personal benefits or
perquisites in excess of the lesser of $50,000 or 10% of his
total compensation reported in columns (c) and (d).
Reported in this column is annual compensation related to:
(i) the Cash Bonus paid under the Company's former Bonus
Plan (Stock Plus Cash) to cover United States income taxes
as described in footnote 1 to the Aggregated Option/SAR
Exercises in 1997 and FY-End Option/SAR Values" table, pages
_____, and fractional shares of the Bonus Plan Stock Bonus;
and (ii) reimbursement of relocation expenses and payments
of estimated income taxes relating to reimbursement of
relocation expenses to Mr. Ripp in 1995 through 1997 and Mr.
Gurski in 1996 and 1997; (iii) overseas allowances for Mr.
Gurski in 1995 and 1996, and (iv) certain payments of
estimated taxes relating to Mr. Gurski's assignment overseas
during 1995 and 1996, including payments made in 1996 and
1997 with regard to previous years' tax obligations and
reimbursements or refunds received by the Company for tax
payments made in previous years.
(3) During 1997, 180,900 shares of restricted stock were granted
by the Company, resulting in a total of 438,620 shares of
restricted stock held at December 31, 1997. These shares
had an aggregate value of $18,422,040 based upon a $42.00
per share closing price of the Company's Common Stock as
reported on the New York Stock Exchange Composite Tape on
December 31, 1997, and dividends are paid on 43,120 of these
shares to the same extent as any other shares of the
Company's Common Stock. The number of shares of restricted
stock includes certain time-vesting restricted shares as
well as Performance Restricted Shares awarded under the
Company's 1993 Long-Term Equity Incentive Plan, which vest
in 3 years based on achievement of minimum average annual
return on equity and average annual earnings growth
objectives for the Company. Dividends earned on Performance
Restricted Shares, of which 395,500 were held at December
31, 1997, are credited to the executive officer's account
and are deemed to be invested in phantom shares of Common
Stock. These phantom shares vest only when, and to the
extent, the associated Performance Restricted Shares vest.
(4) Includes awards made pursuant to the Company's 1993 Long-
Term Equity Incentive Plan. The Long-Term Equity Incentive
Plan is described in footnote 1 to the "Option/SAR Grants in
1997" table on pages ______ of this Consent Revocation
Statement.
(5) Includes $3,840 as the company-matching contribution under
the Employee Savings and Thrift Plan; $15,600 as the
company-matching contribution under the Deferred
Compensation Plan; and $107,500 as the total premium paid by
the Company in 1997 under a split-dollar insurance plan,
including both the portion of the premium that is
attributable to term life insurance coverage for Mr. Hudson
and the full dollar value of the remainder of the premium.
The split-dollar insurance plan provides life insurance
coverage for Mr. Hudson equal to twice his base salary (in
lieu of the coverage available under the Company 's group-
term life insurance plan), and a substantial portion of the
value of the advances made to pay the premium as shown in
this table will be repaid to the Company from policy
proceeds.
(6) Includes $3,840 as the company-matching contribution under
the Employee Savings and Thrift Plan; $11,712 as the
company-matching contribution under the Deferred
Compensation Plan; $4,800 as total director fees paid to Mr.
Marley in 1997 by two wholly-owned subsidiaries of the
Company, and $79,500 as the total premium paid by the
Company in 1997 under a split-dollar insurance plan,
including both the portion of the premium that is
attributable to term life insurance coverage for Mr. Marley
and the full dollar value of the remainder of the premium.
The split-dollar insurance plan provides life insurance
coverage for Mr. Marley equal to twice his base salary (in
lieu of the coverage available under the Company's group-
term life insurance plan), and a substantial portion of the
value of the advances made to pay the premium as shown in
this table will be repaid to the Company from policy
proceeds.
(7) Includes $3,840 as the company-matching contribution under
the Employee Savings and Thrift Plan; $5,760 as the company-
matching contribution under the Deferred Compensation Plan;
$4,800 as total director fees paid to Mr. Ripp in 1997 by
two wholly-owned subsidiaries of the Company; and $57,515 as
the total premium paid by the Company in 1997 under a split-
dollar insurance plan, including both the portion of the
premium that is attributable to term life insurance coverage
for Mr. Ripp and the full dollar value of the remainder of
the premium. The split-dollar insurance plan provides life
insurance coverage for Mr. Ripp equal to twice his base
salary (in lieu of the coverage available under the
Company's group term life insurance plan), and a substantial
portion of the value of the advances made to pay the premium
as shown in this table will be repaid to the Company from
policy proceeds.
(8) Includes $3,840 as the company-matching contribution under
the Employee Savings and Thrift Plan; $5,040 as the company-
matching contribution under the Deferred Compensation Plan;
and $40,800 as the total premium paid by the Company in 1997
under a split-dollar insurance plan, including both the
portion of the premium that is attributable to term life
insurance coverage for Mr. Gurski and the full dollar value
of the remainder of the premium. The split-dollar insurance
plan provides life insurance coverage for Mr. Gurski equal
to twice his base salary (in lieu of the coverage available
under the Company's group-term life insurance plan), and a
substantial portion of the value of the advances made to pay
the premium as shown in this table will be repaid to the
Company from policy proceeds.
(9) Mr. Gromer's compensation was paid in German marks. The
amounts reported for Mr. Gromer have been converted to U.S.
dollars based on the average monthly conversion rate
calculated using the daily conversion rates listed by
Bloomberg Financial Markets Commodities News.
OPTION/SAR GRANTS IN 1997
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation for
Individual Grants Option Term(3)
--------------------------------------------------------------- ---------------------------------
Number
of Secu- # of Total
rities Un- Options/
derlying SARs
Options/ Granted Exercise Market
SARs to Em- or Base Expira- Price at
Granted ployees Price tion Grant
Name Date (#)(1) in 1997 ($/share) Date(2) ($/share) 0% ($) 5% ($) 10% ($)
------ ---- ---------- -------- --------- ------- --------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
William J. Hudson, 7/22/97 63,900 3.16 47.0 7/22/07 47.0 0 1,888,759 4,786,487
Jr. . . . . . . . .
Chief Executive
Officer and Presi-
dent, and a Director
James E. Marley . . 7/22/97 51,100 2.53 47.0 7/22/07 47.0 0 1,510,416 3,827,691
Chairman
Robert Ripp . . . . 7/22/97 25,100 1.24 47.0 7/22/07 47.0 0 741,907 1,880,138
Executive Vice
President
Juergen W. Gromer .
Vice President 7/22/97 15,000 0.74 47.0 7/22/07 47.0 0 443,370 1,123,588
John E. Gurski . . 7/22/97 21,200 1.05 47.0 7/22/07 47.0 0 626,631 1,588,005
Vice President
</TABLE>
- ---------------
(1) The Company's 1993 Long-Term Equity Incentive Plan ("1993
Plan") became effective on July 1, 1993 and is a long-term
incentive compensation program that is based on stock price
appreciation in the form of stock options (either incentive
or non-qualified stock options) and infrequently, in the
discretion of the Company, in the form of freestanding SARs
payable in the Company's Common Stock or from time to time,
in the Company's sole discretion, in cash. The 1993 Plan
also provides for the award of performance-based restricted
stock ("Performance Restricted Shares"). The 1993 Plan is
administered by the Compensation and Management Development
Committee of the Company's Board of Directors ("Committee").
Under the 1993 Plan, each employee designated by the
Committee to participate is credited with stock options
having an option price per share of Common Stock that is not
less than 100% of the closing price of the Common Stock on
the New York Stock Exchange Composite Tape on the award
date, and/or stock bonus units (SARS) having a designated
value per unit of not less than 95% of the average closing
price of the Common Stock on the New York Stock Exchange
Composite Tape for the 10 trading days immediately prior to
the award date, and/or Performance Restricted Shares. No
SAR awards were made under the 1993 Plan in 1997. Awards of
Performance Restricted Shares and stock options that were
made to the named executive officers in 1997 are shown in
columns (f) and (g), respectively, of the Summary
Compensation Table, on page __ of this Consent Revocation
Statement.
With respect to stock options, all options granted in 1997
to the named executive officers will vest 3 years from the
date of award and will expire 7 years after vesting. They
have an exercise price equal to 100% of the closing price of
the Common Stock on the New York Stock Exchange on the award
date. Under the authorization of the Committee, all options
granted in 1997 include a term that permits their transfer
to immediate family members, trusts for the exclusive
benefit of such members, or partnerships in which such
members are the only partners. Transferred options may not
be further transferred by immediate family members except by
will or by the laws of descent and distribution, and the
named executive officers remain responsible for the income
taxes and tax withholding requirements arising upon the
exercise of transferred options.
When SAR awards are made, bonus computations with respect to
the stock bonus units are made on the 4th through 6th
anniversaries of the award date for one-third of each
participant's bonus units and are based on the increase in
the market price of the Common Stock over the designated
value, as established on the award date. The bonus typically
paid in stock ("Stock Bonus") is the number of shares of
Common Stock having an aggregate market value on the
computation date equivalent to one-third of the
participant's bonus units multiplied by the increase in
market price described above. A cash bonus ("Supplemental
Cash Bonus") is also paid under the 1993 Plan in conjunction
with Stock Bonuses. The Supplemental Cash Bonus is paid at
the same time that payment of the Stock Bonus is made and is
a percentage of the value of the Stock Bonus that is
designated at the time of award and is no greater than that
calculated to provide a payout sufficient to pay the
anticipated United States income tax at a maximum rate for
the highest taxable bracket with respect to the aggregate of
the Stock Bonus and the Supplemental Cash Bonus.
Supplemental Cash Bonus awards are not included in this
table when stock bonus unit (SAR) awards are made in the
reported year and disclosed in this table.
(2) The expiration date for stock options under the 1993 Plan is
the date determined by the Committee at the time of the
award of such options. When SARs are granted in the
reported year and disclosed in this table, the 6th
anniversary date is designated as the "expiration date"
because computations of the Stock Bonus are made on the 4th
through 6th anniversaries of the award date for one-third of
each participant's bonus units granted in the award.
(3) In 1997 the named executive officers received awards under
the 1993 Plan entirely in either stock options or
Performance Restricted Shares awards, and therefore assumed
values contained in this table relate only to the options.
These values are based on assumed appreciation rates set by
the Securities and Exchange Commission and are not intended
to forecast possible future appreciation, if any, of the
Company's stock price. The values are based on the
difference between the exercise price and the exercise price
as increased by the assumed annual appreciation rate over
the 10-year term of the options, compounded annually, with
said difference multiplied by the number of options granted
as shown in the table.
AGGREGATED OPTION/SAR EXERCISES (1) IN 1997 AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised In-the-
Options/SARs on Money Options/SARs on
December 31, 1997 (#) December 31, 1997 ($)
---------------------- -----------------------------
Shares Acquired Value Real- Exercis-
Name on Exercise (#) ized ($) (2) able/Unexercisable (3) Exercisable/Unexercisable (3)(4)
-------------------- ---------------- ------------ ------------------------- --------------------------------
<S> <C> <C> <C> <C>
William J. Hudson, Jr 4,861 118,880 220,000 / 216,902 1,980,350 / 643,799
Chief Executive
Officer and
President, and
a Director
James E. Marley . . . 2,520 115,290 157,000 / 156,600 1,447,813 / 325,188
Chairman
Robert Ripp . . . . . 0 0 40,000 / 67,300 252,500 / 137,063
Executive Vice President
Juergen W. Gromer . . 11,103 282,606 15,600 / 64,200 98,475 / 120,400
Vice President
John E. Gurski . . . 621 21,425 44,800 / 58,600 402,425 / 127,925
Vice President
</TABLE>
------------------
(1) Exercises shown in this table relate to stock bonus units
(SARS) granted under the Company's Bonus Plan (Stock Plus
Cash) ("Bonus Plan"), which preceded the 1993 Plan, and to
both stock bonus units (SARS) and stock options awarded
under the 1993 Plan.
With respect to stock bonus units granted under the Bonus
Plan and the 1993 Plan, the incentive compensation is based
on stock price appreciation in the form of freestanding
SARs payable in the Company's Common Stock or occasionally,
in the discretion of the Company, in cash. Each employee
designated by the Board of Directors to participate in the
Bonus Plan was credited with stock bonus units having a
designated value per unit of not less than 95% of the
closing price of the Common Stock on the New York Stock
Exchange on the award date. Under the 1993 Plan, the stock
bonus units have a designated value per unit of not less
than 95% of the average price of the Common Stock on the
New York Stock Exchange Composite Tape for the 10 trading
days immediately prior to the award date. The 1993 Plan is
more fully described in footnote 1 to the table entitled
"Options/Grants in 1997" on pages ____ of this Consent
Revocation Statement.
Bonus computations are made on the 4th through 6th
anniversaries of the award date for one-third of each
participant's stock bonus units. Bonus computations for
stock bonus units granted under the Bonus Plan are made
using the greater of the increase in the market price of
the Common Stock (a) over the designated value, as
established on the award date, or (b) over an adjusted
designated value. The adjusted designated value is 95% of
an amount determined by discounting the market price of the
Common Stock on the computation date by a percentage (not
to exceed 7.5% per year) equal to one-half of the Company's
compound average annual growth rate in earnings per share
during the period between the award date and the
computation date. Bonus computations for stock bonus units
granted under the 1993 Plan are made by simply using the
increase in the market price of the Common Stock over the
designated value as established on the award date. The
bonus typically paid in stock under either plan ("Stock
Bonus") is the number of shares of the Common Stock having
an aggregate market value on the computation date
equivalent to the amount computed as described above.
A cash bonus is also paid under both the Bonus Plan and the
1993 Plan. For awards under the Bonus Plan that were made
between January 27, 1988 and June 30, 1993, the cash bonus
is an amount sufficient to pay the anticipated United
States income tax with respect to both the Bonus Plan Stock
Bonus and the cash bonus as determined at the time of the
distribution of the bonuses, not to exceed an amount that
is 50% of the value of the Bonus Plan Stock Bonus. The cash
bonus under the 1993 Plan is described in footnote 1 of the
table entitled "Options/SAR Grants in 1997" on pages _____
of this Consent Revocation Statement. The amounts of the
cash bonus paid in 1997 based on distributions made in that
year under these plans are included in column (e), "Other
Annual Compensation", of the Summary Compensation Table on
page __ of this Consent Revocation Statement.
In view of the foregoing, "exercises" for purposes of this
table are deemed to be the Stock Bonus computations that
are made on the 4th through 6th anniversaries of the award
date for one-third of each participant's stock bonus units
granted in an award under the Company's Bonus Plan and 1993
Plan, together with stock options under the 1993 Plan that
were exercised during 1997. The stock options awarded under
the 1993 Plan are described in footnote 1 of the table
entitled "Options/SAR Grants in 1997" on pages _____ of
this Consent Revocation Statement.
(2) "Value Realized" includes the amount of appreciation
realized upon exercise of stock options under the 1993 Plan,
together with the Stock Bonus paid under the Bonus Plan and
the 1993 Plan based on stock price appreciation. The
figures reported in this column do not include the cash
bonus as described in footnote 1 above.
(3) The stock bonus units (SARS) awarded under the Bonus Plan
and the 1993 Plan are not exercised by the participants, but
are paid based on bonus computations made on the 4th through
6th anniversaries of the award date for one-third of each
participant's stock bonus units.
(4) These values relate only to stock options granted under the
1993 Plan and the Stock Bonus described in footnote 1 above
under both the Bonus Plan and the 1993 Plan. A cash bonus
under the Bonus Plan and the 1993 Plan is also paid as
previously described, but is not included in the values
disclosed in this column. With respect to Stock Bonuses
under the Bonus Plan, these values also have been calculated
based on the designated values for the respective awards and
without regard to adjusted designated values, as those terms
are defined under the Bonus Plan and described in footnote 1
above.
RETIREMENT BENEFITS
The Company maintains a pension plan ("Pension Plan") for its
employees that is designed and administered to qualify under Section 401(a)
of the Internal Revenue Code of 1986, as amended ("Code"). The Pension
Plan has been noncontributory since January 1, 1991. Prior to January 1,
1994 the Pension Plan was a career average defined benefit plan under
which, for each year of covered service with the Company, an employee
accrued a benefit equal to 1.67% of his or her current base earnings. The
Pension Plan also included an alternative formula that updated pension
benefits for prior service based on most-recent 3 years average base
earnings rates. An employee received the greater of the benefit the
employee had otherwise earned under the Pension Plan or the benefit
calculated under the alternative formula based on most-recent average base
earnings and years of credited service.
Effective as of January 1, 1994 the Company amended the Pension Plan
to provide benefits based on final average base earnings and total years of
credited service at retirement. The final average base earnings is
determined based on the average of the year-end annual earnings rates for
the 3 years that represent the employee's highest 3 years average during
such employee's last 10 years of service. The benefit is calculated by
adding (1) 1.0% of such final average base earnings, up to the then-current
Social Security covered compensation level ($31,128 in 1998), multiplied by
the employee's credited years of past service (not to exceed 35 years), (2)
1.5% of such final average base earnings in excess of the Social Security
covered compensation level, multiplied by the employee's credited years of
past service (not to exceed 35 years), and (3) 1.2% of such final average
base earnings, multiplied by the number of the employee's credited years of
past service in excess of 35 years. Credited years of past service are
counted back to age 21 and one year of service for participants who joined
the Pension Plan when first eligible, otherwise back to the date of actual
enrollment in the Pension Plan. Employees who were age 60 or older as of
January 1, 1994 will receive the higher of the benefit under the prior
career average defined benefit approach or the benefit under the new final
average base earnings method.
Earnings used to calculate benefits under the Pension Plan are
restricted to (a) annual base salary, including amounts deferred under the
Company's Employee Savings and Thrift Plan, amounts applied to the employee
portion of the welfare benefit plan premiums pursuant to a salary reduction
agreement, and amounts credited to health care and dependent care flexible
spending accounts pursuant to a salary reduction agreement and (b) for
individuals paid on a commission basis, annual base salary (as described
above) plus commissions, but commissions are included only to the extent
that the sum of the annual base salary and commissions does not exceed a
designated amount. Normal Retirement Date under the Pension Plan is
defined as age 65, but there is no actuarial reduction of a participant's
pension for early retirement between the ages of 60 and 65.
The Pension Plan also provides for a special pension benefit formula
that would be used to recalculate benefits in the event of a change in
control of the Company. The special formula, which the Company plans to
review and modify from time to time as the funding status of the Pension
Plan warrants, is intended to ensure that excess Pension Plan assets at the
time of a change in control are used to provide increased retirement
benefits for covered employees. The special formula is similar in design
to the final average earnings formula described above under the amended
Pension Plan, with the 1%, 1.5% and 1.2% factors replaced by 1.25%, 1.75%,
and 1.67%, respectively.
In accordance with Code requirements, the Pension Plan limits the
maximum amount of annual compensation that may be taken into account under
the Pension Plan ($160,000 in 1998) and the maximum annual employer
provided benefit that can be paid under the Pension Plan ($130,000 in
1998). The Company maintains a supplemental employee retirement program
("SERP") pursuant to which certain employees whose retirement benefits
otherwise payable under the Pension Plan are limited by these Code
restrictions will receive payment of a supplemental pension from non-
Pension Plan sources. The total benefit payable under both the Pension
Plan and the SERP is calculated without regard to the Code limitations
applicable to the Pension Plan using the same pension formula(s) applicable
under the Pension Plan and using a 3 years average of both base earnings
and annual cash bonus (whether paid or deferred). The total benefit thus
calculated, reduced by the restricted benefit actually payable from the
Pension Plan, is the benefit payable from the SERP.
The following table shows the combined annual retirement benefit
payable to the Company's executive officers named in the Summary
Compensation Table, except Mr. Gromer, under both the Pension Plan and the
SERP, as amended effective January 1, 1994, upon normal retirement, based
on the indicated amount of final average remuneration and number of
credited years of service. Mr. Gromer's annual retirement benefit is
calculated under the terms of a retirement plan maintained by AMP
Deutschland that is similar in design to the U.S. Pension Plan described
above. As of January 1, 1998, Mr. Gromer's accrued annual retirement
benefit payable upon normal retirement (age 65) under the AMP Deutschland
plan was $271,118, based upon the average monthly conversion rate for
January 1998, calculated as described in footnote 9 to the Summary
Compensation table on page __ of this Consent Revocation Statement.
PENSION PLAN TABLE (4)
YEARS OF SERVICE (1)(3)
-----------------------
Renumeration (2) 15 20 25 30 35 40
------ ------- ------- ------- ------- -------
$400,000 . . . . . . . 87,665 116,887 146,109 175,331 204,553 228,553
450,000 . . . . . . . 98,915 131,887 164,859 197,831 230,803 257,803
500,000 . . . . . . . 110,165 146,887 183,609 220,331 257,053 287,053
550,000 . . . . . . . 121,415 161,887 202,359 242,831 283,303 316,303
600,000 . . . . . . . 132,665 176,887 221,109 265,331 309,553 345,553
650,000 . . . . . . . 143,915 191,887 239,859 287,831 335,803 374,803
700,000 . . . . . . . 155,165 206,887 258,609 310,331 362,053 404,053
750,000 . . . . . . . 166,415 221,887 277,359 332,831 388,303 433,303
800,000 . . . . . . . 177,665 236,887 296,109 355,331 414,553 462,553
850,000 . . . . . . . 188,915 251,887 314,859 377,831 440,803 491,803
900,000 . . . . . . . 200,165 266,887 333,609 400,331 467,053 521,053
950,000 . . . . . . . 211,415 281,887 352,359 422,831 493,303 550,303
1,000,000 . . . . . . 222,665 296,887 371,109 445,331 519,553 579,553
1,050,000 . . . . . . 233,915 311,887 389,859 467,831 545,803 608,803
1,100,000 . . . . . . 245,165 326,887 408,609 490,331 572,053 638,053
1,150,000 . . . . . . 256,415 341,887 427,359 512,831 598,303 667,303
1,200,000 . . . . . . 267,665 356,887 446,109 535,331 624,553 696,553
1,250,000 . . . . . . 278,915 371,887 464,859 557,831 650,803 725,803
1,300,000 . . . . . . 290,165 386,887 483,609 580,331 677,053 755,053
1,350,000 . . . . . . 301,415 401,887 502,359 602,831 703,303 784,303
1,400,000 . . . . . . 312,665 416,887 521,109 625,331 729,553 813,553
1,450,000 . . . . . . 323,915 431,887 539,859 647,831 755,803 842,803
1,500,000 . . . . . . 335,165 446,887 558,609 670,331 782,053 872,053
1,550,000 . . . . . . 346,415 461,887 577,359 692,831 808,303 901,303
1,600,000 . . . . . . 357,665 476,887 596,109 715,331 834,553 930,553
1,650,000 . . . . . . 368,915 491,887 614,859 737,831 860,803 959,803
1,700,000 . . . . . . 380,165 506,887 633,609 760,331 887,053 989,053
(1) Effective in April 1997, Mr. Ripp became a participant under
the newly created AMP Incorporated Supplemental Executive
Pension Plan, which was implemented to provide a competitive
annual retirement benefit to executives, such as Mr. Ripp,
who are first employed by the Company mid-to late-career.
Under this plan, Mr. Ripp's annual retirement benefit at
Normal Retirement Date is the greater of the combined annual
retirement benefit payable under the Pension Plan and the
SERP, as described above, or 30% of his highest 3 years
average of base compensation and annual cash bonuses.
(2) The compensation covered by the combination of the Pension
Plan and SERP includes the employee's final average
earnings, as determined by the average of the 3 years that
represents the employee's highest base earnings during such
employee's last 10 years of service, together with the
average of the employee's annual cash bonus payments also
paid in such 3 years. In the case of the named executive
officers other than Mr. Gromer, the annual base earnings
considered in such a determination includes the amount of
salary and bonus shown in columns (c) and (d) of the Summary
Compensation Table on page ____ of this Consent Revocation
Statement.
(3) The current estimated credited years of service for the
named executive officers, except J. Gromer, discussed above,
are as follows: W. J. Hudson, Jr. - 32 years; J. E. Marley -
33.5 years; R. Ripp - 3.3 years; and J. Gurski - 24.5 years.
The estimated credited years of service for the named
executive officers, except J. Gromer, discussed above, at
the Normal Retirement Date are as follows: W. J. Hudson, Jr.
- 33.42 years; J. E. Marley - 36.08 years; R. Ripp - 11.92
years; and J. Gurski - 32.5 years.
(4) The retirement benefit shown in the Pension Plan Table is a
straight life annuity amount and is not subject to any
reduction for Social Security or other offset amounts.
However, as required by law, the form of payment for married
employees under the Pension Plan is a 50% joint and survivor
annuity, which is typically less than the straight life
annuity amount.
SECURITY OWNERSHIP OF EXECUTIVE OFFICERS
In order to further align the interests of the Company's executives
with increasing the long-term value of the Company, in January 1995 the
Company implemented Stock Ownership Guidelines for Senior Management
("Stock Guidelines"). The Stock Guidelines apply to approximately 130
executives presently participating in the Stock Option or SAR segment of
the 1993 Long-Term Equity Incentive Plan. Affected executives are
encouraged to directly own a minimum number of real or phantom shares of
stock, the value of which is expressed as a multiple of the executive's
annualized base salary. The multiplier ranges from 4 times salary for the
Chairman and the CEO and President, to .5 times base salary for executives
in less senior management positions. Executives are expected to comply
with the Stock Guidelines within a 5-year period.
The AMP equity security ownership as of August 3, 1998 by the named
executive officers and all the executive officers and directors of the
Company on that date is as follows:
<TABLE>
<CAPTION>
Total
Beneficial
Beneficial Amount of and Phan-
Amounts and Nature Ownership Phantom tom Own-
Name and Address of Beneficial Owner- as a Percent Ownership ership
Title of Class of Beneficial Owner ship (shares) of Class (shares)(3) (shares)
- --------------- ------------------ ------------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Common Stock William J. Hudson, Jr. 409,138(1)(2)(3) less than 1 35,957 445,095
Harrisburg, Pennsylvania
Common Stock James E. Marley 315,100(2)(3) less than 1 26,453 341,553
Harrisburg, Pennsylvania
Common Stock Robert Ripp 145,643(3) less than 1 16,314 161,957
Harrisburg, Pennsylvania
Common Stock Juergen W. Gromer 70,454(3) less than 1 226 70,680
Langen, Germany
Common Stock John E. Gurski
Harrisburg, Pennsylvania 116,197(3) less than 1 12,826 129,023
Common Stock All Executive Officers 3,096,221(1)(2)(3) 1.49 155,832 3,252,053
(17 persons)
and Directors as a Group
</TABLE>
______________
(1) A portion of the shares reported for 17 executive officers
are held in the Company's Employee Savings and Thrift Plan.
Through further contributions to this plan, all 17 executive
officers may acquire an undeterminable number of additional
shares within 60 days after August 3, 1998.
(2) Numbers in this column include phantom shares credited to
executive officers under a deferred compensation plan and/or
in association with dividend reinvestment of Performance
Restricted Shares issued to designated officers. Pursuant
to the deferred compensation plan, designated executive
officers may defer receipt of up to 50% of their annual base
salary and all officers of the Company may defer receipt of
all or a portion of their annual cash bonus. Deferred
compensation may be allocated to a phantom AMP Common Stock
account, as described in footnote 1 to the Summary
Compensation Table on page ___ of this Consent Revocation
Statement. Dividends earned on Performance Restricted
Shares are credited to the executive officer's account and
are deemed to be invested in phantom shares of Common Stock.
These phantom shares vest only when, and to the extent the
associated Performance Restricted Shares vest, as described
in footnote 3 to the Summary Compensation Table on page
of this Consent Revocation Statement.
(3) In addition, a total of 16,888 shares are held by immediate
family members of five executive officers, either directly
or in a custodial account over which the executive officer
has voting and dispositive powers; the executive officers
disclaim beneficial ownership. Additionally, a director has
a 2% residual beneficial interest, but no voting or
dispositive powers in a trust that holds 7,392 shares of
Common Stock of the Company. Of the beneficial ownership
reported in this number, 15,791 and 120,000 shares are held
by a director in two limited partnerships over which he
shares voting and dispositive powers, and another director
holds 1,400 shares in a family trust of which he is co-
trustee with his wife and shares voting and dispositive
powers. Also, eight directors hold a total of 80,000
options, some of which are exercisable within 60 days after
August 3, 1998 and are reported in this number, and
seventeen executive officers hold a total of 1,851,345
options, some of which are exercisable within 60 days after
August 3, 1998 and are reported in this number. The number
does not include 27,602 Stock Bonus Units granted to the
executives, none of which will convert within 60 days of
August 3, 1998. Of the total number of options held by
executive officers and described above, 419,500 are held by
Mr. Hudson, of which 61,800 have been transferred to a
family limited partnership.
PERFORMANCE GRAPH
The graph shown below depicts the cumulative total shareholder return
(assuming a $100 investment and dividend reinvestment) during the 5-year
period from 1992-1997 for the Common Stock of the Company compared to the
cumulative total return during the same period for the Standard & Poor's
500 Stock Index, the peer group index contained in the Company's 1997 Proxy
Statement ("Prior Peer Group") and the peer group index to be included in
this Consent Revocation Statement and future Proxy Statements ("New Peer
Group"). The Prior Peer Group was established in 1996 and essentially
consisted of the companies included in the Electrical Equipment industrial
classification of Standard & Poor's, together with the publicly-held
competitors of the Company that were not included in that classification.
The New Peer Group also contains the companies included in the
Electrical Equipment industrial classification of Standard & Poor, together
with publicly-held competitors of the Company that are not included in such
classification. The New Peer Group does not include one company listed in
Standard & Poor's Electrical Equipment industrial classification, General
Electric Co. ("GE"), because of GE's dissimilar market capitalization and
overall product offering. GE also was not part of the Prior Peer Group.
Differences between the Prior Peer Group and the New Peer Group are: the
addition of Berg Electronics Corp., a competitor of the Company that became
publicly-held in 1996; the addition of Belden, Inc., a competitor in one of
the Company's emerging product lines; the removal of Augat Inc. due to
Thomas & Betts Corp.'s acquisition of Augat Inc. in 1997; the deletion of
Elexsys Intl. Inc. due to Sanmina Company's acquisition of Elexsys Intl.
Inc. in 1997; and the deletion of Westinghouse Electric Corp. (now part of
CBS Corp.) because it no longer is included in Standard & Poor's Electrical
Equipment industrial classification. Further, ADC Telecommunications, Inc.
and Altron Inc. are not part of the New Peer Group because they are not
included in Standard & Poor's Electrical Equipment industrial
classification and, while these companies have some product lines that
compete with some of the Company's product lines, overall the Company
believes these companies do not adequately represent the Company's
industries and do not provide a valid comparison of performance. The
Company believes the New Peer Group is representative of the Company's
industries and provides a valid comparison of performance.
CUMULATIVE TOTAL SHAREHOLDER RETURN
1992-97
<TABLE>
<CAPTION>
$300 |
| Base Period Indexes / Cumulative Returns
|
<S> | <C> <C> <C> <C> <C> <C>
$275 | Company/Index Name 1992 1993 1994 1995 1996 1997
| ------------------ ---- ---- ---- ---- ---- ----
| AMP Incorporated 100 111.76 132.01 142.08 146.24 163.85
| S&P 500 100 110.08 111.53 153.45 188.68 251.63
$250 | New Peer Group 100 110.69 115.17 115.17 195.09 241.93
| Prior Peer Group 100 109.55 115.65 151.96 192.19 226.39
|
$225 |
|
|
$200 |
TOTAL |
SHAREHOLDER |
RETURNS(3) $175 |
(DOLLARS) |
|
$150 |
| AMP ___________________
| S&P 500 ..............
$125 | New Peer Group _____.____ (2)
| Prior Peer Group __ __ __ (1)
|
$100 |
| ---------------------------------------------------------
| 92 93 94 95 96 97
</TABLE>
___________
(1) The Prior Peer Group includes the following companies:
ADC Telecommunications Inc. Honeywell, Inc.
Altron Inc. Hubbell Inc., -- CL B
Amphenol Corp. Methode Electronics -- CL A
Augat Inc. Molex Inc.
Elexsys Intl. Inc. Raychem Corp.
Emerson Electric Co. Robinson Nugent Inc.
General Signal Corp. Thomas & Betts Corp.
Grainger (W W) Inc. Westinghouse Electric Corp.
(2) The New Peer Group includes the following companies:
Amphenol Corp. Hubbell Inc. -- CL B
Belden, Inc. Methode Elecronics -- CL A
Berg Electronics Corp. Molex Inc.
Emerson Electric Co. Raychem Corp.
General Signal Corp. Robinson Nugent Inc.
Grainger (W W) Inc. Thomas & Betts Corp.
Honeywell Inc.
(3) The Total Shareholder Return assumes a fixed investment of $100 in the
AMP Common Stock or indicated index, and a reinvestment of dividends.
The total return of each company included in the S&P 500, the Prior
Peer Group and the New Peer Group indexes has been weighted in
accordance with the company's market capitalization as of the
beginning of the year reported. The weighting was accomplished by:
(i) calculating the market capitalization for each company at the
beginning of the respective calendar year based on the closing stock
price and outstanding shares; (ii) determining the percentage that
each such market capitalization represents against the total of such
market capitalizations for all companies included in the index; and
(iii) multiplying the percentage determined in (ii) above by the total
shareholder return of the company in question for the year being
reported.
THE COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Compensation and Management Development Committee of the Board of
Directors, among other responsibilities, has responsibility for the
Company's executive compensation program. The Committee, which is composed
entirely of outside directors, is chaired by Mr. Ralph D. DeNunzio,
President, Harbor Point Associates, Inc. The other Committee members in
1997 were Mr. Dexter F. Baker (who served as director of AMP until April
22, 1998), Retired Chairman and CEO, Air Products and Chemicals, Inc.; Mr.
John C. Morley, President of Evergreen Ventures, Ltd. and Retired President
and CEO, Reliance Electric Company; and Mr. Paul G. Schloemer, Retired
President and CEO, Parker Hannifin Corporation.
Included within the Committee's executive compensation oversight
charter are the review and approval of salary levels and salary increases
for executive officers, annual Management Incentive Plan cash bonus awards
for officers and other key executives, performance restricted stock and
stock option awards under the 1993 Long-Term Equity Incentive Plan, and any
special benefit programs affecting officers and key executives such as
supplemental retirement plans, deferred compensation plans, change of
control agreements and other plans. The Committee in appropriate cases
makes recommendations to the Board of Directors on matters involving
executive compensation.
The overriding objectives of the Company's executive compensation
program are to attract and retain qualified executive leadership and to
reward performance that creates shareholder value. In furtherance of these
objectives, the Company's executive compensation philosophy is (1) to
deliver base salary compensation that is kept competitive with the
executive's counterparts in the electrical/electronics industry and
industry in general and (2) to provide short-, intermediate-, and long-term
incentive compensation plans that supplement base salary and that correlate
to the growth, success and profitability of the Company. As explained
below in greater detail, these at-risk, performance-based incentive
compensation plans directly align the interests of the Company's executives
with its shareholders and form a significant portion of the total
compensation opportunity for all officers and key executives.
The Company annually reviews for the Committee's consideration
compensation surveys and other published compensation data covering
comparably-sized companies in both the electrical/electronics industry and
industry in general to assess whether its executive base salary ranges and
total compensation opportunities remain competitive. Where they do not
remain competitive, appropriate adjustments are made. In this process of
comparing the Company's executive compensation levels and practices against
those of other companies, the compensation levels and practices at the
companies comprising the New Peer Group Index in the Performance Graph on
pages _______ of this Consent Revocation Statement are periodically
reviewed separately, but due to the small sample size the New Peer Group
data alone is not used as the primary comparative benchmark. Rather, the
comparative data relied upon by the Committee is drawn from broader surveys
of comparably-sized companies in the electrical/electronics industry and
industry in general, which surveys include 7 of the 13 new Peer Group
companies.
The salaries, and any periodic increases thereof, of the Chairman and
the CEO are determined by the Board of Directors of the Company based on
recommendations made by the Committee. These officers in turn recommend
the salary adjustments for the other executive officers, with the review
and oversight of the Committee. The level of base salary compensation for
officers and key executives is determined by both their scope of
responsibility and the competitive salary ranges established by the survey
process described above. Periodic increases in base salary are dependent
on the individual's performance in his or her position for a given period,
on the individual's competency, skill and experience, and on the growth of
salary levels both inside and outside the Company.
The AMP Management Incentive Plan provides opportunity for annual cash
bonuses based on two or more of the following weighted performance
components: (1) overall corporate performance for a given year, adjusted to
net out extraordinary, non-recurring gains or losses and then compared
against corporate performance targets for the year (this component is
weighted 80% for named executive officer participants such as the CEO with
corporate-wide responsibilities and 60% for those named executive officers
with specific unit responsibilities); (2) operating unit performance for a
given year measured against operating unit income and AMP value added (AVA)
targets for the year (this component is weighted 20% for named executive
officer participants with specific operating unit responsibilities); and
(3) individual performance for a given year measured against individual
performance objectives for such year (this component is weighted 20% for
all named executive officer participants). For the named executive
officers, the corporate performance component of the Management Incentive
Plan annual cash bonus is based on attainment of an earnings per share
(EPS) target. The Committee sets the EPS target for the year at the start
of each year, with the review of the Board of Directors, and also sets the
individual performance objectives of the Chairman and the CEO. In addition
to setting the EPS target, the Committee assigns to each participant under
the Management Incentive Plan minimum, target and maximum bonus
percentages, which vary from participant to participant to reflect
competitive practice and the scope of the participant's responsibility.
Actual corporate and unit performance between 90% and 120% of the target
performance levels results in a bonus calculation that ranges between the
participant's assigned minimum and maximum bonus percentages. The EPS
target for 1997 was set at $2.25, which target performance was to be
exclusive of any EPS impact resultant from planned 1997 changes in
accounting methods. The actual EPS performance for 1997 (adjusted for plan
purposes) was $2.23. In keeping with the pay-for-performance design and
intent of the Management Incentive Plan, this 1997 EPS performance resulted
in a bonus being paid for 1997 under the Management Incentive Plan's
corporate performance component to the named executive officers at a level
that fell between their respective minimum and target bonus levels. The
unit and individual performance targets for 1997 and the actual unit and
individual performance results for 1997 varied widely between units and
individuals.
In granting long-term incentive awards during 1997, the Committee gave
considerable weight to the annual long-term incentive award levels and
practices of a diverse range of over 350 major companies that participated
in the Towers Perrin survey of long-term incentive compensation practices.
Of the 13 companies comprising the New Peer Group Index in the Performance
Graph on pages _______ of this Consent Revocation Statement, 7 were
included in this Towers Perrin survey. The Company's long-term incentive
award levels for 1997 were generally set at between the 50th and the 75th
percentile of the award levels reflected in the Towers Perrin Survey.
Long-term incentive compensation awards in the form of performance
restricted shares and stock options were made by the Committee in 1997
under the 1993 Long-Term Equity Incentive Plan. The named executive
officers and the other officers who comprise the Company's Global Planning
Committee received a 1997 long-term incentive award that was split so that
approximately 50% of the value of the 1997 award was provided in the form
of performance restricted shares, with the balance provided in the form of
stock options. All other recipients of a 1997 long-term incentive award
received 100% of the award in the form of stock options.
The performance restricted shares granted in 1997 will be forfeited at
the end of 1999 if the Company fails to attain for the three-year period
from January 1, 1997 through December 31, 1999 a minimum average annual
level of return on equity ("ROE") that was set by the Committee at the
beginning of 1997. For this purpose, the Company's annual ROE result for
each of the three years will be separately determined, totaled, and divided
by three to determine the average annual ROE. If the average annual ROE
over the three-year period is at least equal to this minimum level, then
the extent to which the performance restricted shares granted in 1997 will
become vested at the end of 1999 will be determined by the Company's
average annual earnings growth rate over the same three-year period. A
target level of average annual earnings growth over the three-year period
was set by the Committee at the beginning of 1997, and average annual
earnings growth between 0% and this target level will result in vesting of
the performance restricted shares that ranges proportionately from 0% to
100%. The Committee also set a super-target level of average annual
earnings growth at the beginning of 1997, and average annual earnings
growth between the target level and the super-target level will result in
vesting of the performance restricted shares that ranges proportionately
from 100% to 200%. Performance restricted shares that are forfeited at the
end of 1999 either because of the Company's failure to attain the minimum
average annual ROE level or to attain the target level of average annual
earnings growth will be canceled and revert to the Company.
In general, the stock options granted in 1997 vest on the third
anniversary of the grant date, are exercisable thereafter until the tenth
anniversary of the award date, and have an exercise price equal to the
award date fair market value of a share of the Company's Common Stock.
In 1995, with the review and approval of the Committee, the Company
implemented formal share ownership guidelines applicable to its key
executives. By the end of a phase-in period, the guidelines require that
the Chairman and the CEO each own real or phantom shares of Company Common
Stock with a value of at least four times annual base salary. The
guideline applicable to the other named executive officers is ownership of
shares with a value of at least three times annual base salary. The
primary intent of these guidelines is to significantly increase the extent
to which the personal wealth of the Company's executives is directly linked
to the performance of the Company's Common Stock, thereby materially
expanding the community of interest between the executives and the
Company's shareholders.
Section 162(m) of the Internal Revenue Code imposes a $1,000,000 per
year per named executive officer limitation on the amount of non-
performance based compensation that can be paid and deducted by the
Company. The Company's policy with respect to this limitation is to
maximize the deductibility of all compensation paid to each named executive
officer by (1) delivering compensation to named executive officers that to
a substantial extent meets the Code Section 162(m) definition of
performance-based compensation and (2) affording the named executive
officers the opportunity to defer receipt of compensation to years after
their retirement. In furtherance of this policy, the Company's Management
Incentive Plan, under which the named executive officers have an
opportunity to earn an annual cash bonus, and the 1993 Long-Term Equity
Incentive Plan, under which the named executive officers receive long-term
incentive compensation awards, have been designed and are administered so
that all or a significant portion of the compensation received pursuant to
such plans will qualify as performance-based compensation within the
meaning of Section 162(m). In addition, the Company has implemented a
Deferred Compensation Plan under which the named executive officers may
defer receipt of up to 50% of annual base salary and up to 100% of annual
cash bonus amounts. All compensation paid to the named executive officers
in 1997 was deductible and it is anticipated that all compensation to be
paid to named executive officers in 1998 will be deductible.
1997 CEO COMPENSATION
Mr. Hudson's base salary rate per annum for 1997 remained at the same
level that was in effect for 1996, $810,000. In deciding not to adjust Mr.
Hudson's salary for 1997, the Committee considered primarily the Company's
disappointing growth and performance in 1996.
Mr. Hudson's assigned minimum, target, and maximum annual cash bonus
percentages under the Management Incentive Plan for 1997 were 10%, 65% and
100%, respectively. Accordingly, Mr. Hudson had the potential to earn an
annual bonus of up to 100% of base annual salary if the Company were to
attain 120% or more of the $2.25 EPS target and Mr. Hudson were to fully
accomplish his individual performance targets. Based on the Company's
adjusted EPS performance for 1997 and the Committee's assessment of Mr.
Hudson's individual performance, Mr. Hudson's aggregate bonus under the
Plan for 1997 was 66% of his base salary, or $534,600.
On July 22, 1997 Mr. Hudson was awarded 63,900 stock options (2,100
incentive stock options and 61,800 non-qualified stock options) under the
1993 Long-Term Equity Incentive Plan, all with an exercise price of $47.00.
These options will first be exercisable July 22, 2000 and remain
exercisable to July 22, 2007. On the same date, Mr. Hudson was also
awarded 39,600 performance restricted shares of Common Stock of the Company
under the 1993 Long-Term Equity Incentive Plan. These shares will either
vest or be forfeited at the end of 1999 based on the Company's performance
in 1997, 1998 and 1999 with respect to average annual return on equity and
average annual earnings growth targets that were set by the Committee. In
making these long-term incentive awards, the Committee's intent was to
continue a practice begun in 1993, when the Company's first stock option
plan became effective, of increasing the proportion of stock-based
compensation in the total compensation package of the Company's senior
executive officers, particularly the CEO, thereby further increasing the
executives' community of interest with the Company's shareholders. The
aggregate long-term incentive award levels set for Mr. Hudson in 1997 were
at approximately the 60th percentile of comparable long-term incentive
award recipients reflected in Towers Perrin survey data relied upon by the
Committee. Since the 1993 inception of the Long-Term Equity Incentive
Plan, Mr. Hudson has been granted a total of 425,500 stock options and
111,500 performance restricted shares of Common Stock of the Company.
As of the end of 1997, a portion of the initial performance restricted
share grant made to Mr. Hudson in 1995 under the 1993 Long-Term Equity
Incentive Plan was vested based on the Company's performance over the
three-year period of 1995, 1996 and 1997. The Company's average annual ROE
over the three-year period, adjusted for Plan purposes, exceeded the
minimum threshold that had been set by the Committee in 1995, and the
Company's average earnings growth rate over the three-year period, as
defined for Plan purposes, of 8.42% resulted in Mr. Hudson becoming vested
in 56.13%, or 14,033, of the 25,000 performance restricted shares (plus
56.13%, or 869, of the related dividend reinvestment shares) that had been
granted to him in 1995. The unvested 10,967 share balance of the 25,000
share grant (along with the 679 share balance of the related dividend
reinvestment shares) was forfeited back to the Company.
In April 1992, Mr. Hudson had been awarded 12,200 stock bonus units
under the Company's former Stock Plus Cash Bonus Plan, with a designated
value of $27.88 and an unspecified cash bonus percentage (not in excess of
50%) to cover United States taxes on the payout, and in April 1993, Mr.
Hudson had been awarded 20,000 stock bonus units under the Company's former
Stock Plus Cash Bonus Plan, with a designated value of $28.50 and an
unspecified cash bonus percentage (not in excess of 50%) to cover United
States taxes on the payout. In April 1997, when the fair market value of a
share of the Company's Common Stock had increased to $34.50, 4,066 of the
12,200 1992 stock bonus units and 6,666 of the 20,000 1993 stock bonus
units matured, resulting in a stock bonus payment to Mr. Hudson of 2,061
shares of Common Stock of the Company and a cash payment of $35,608. In
making these payout calculations, the award date designated value of $28.50
per stock bonus unit was used to determine the spread applicable to the
maturing April 1993 stock bonus units in lieu of the alternative designated
value defined under the Plan, but the alternative designated value defined
under the Plan of $26.84 was used to determine the spread applicable to the
maturing April 1992 stock bonus units in lieu of the April 1992 award date
designated value of $27.88. The Plan's alternative designated value, which
is based on earnings per share growth between the award date and the
maturity date, is used in payout calculations whenever it would result in a
greater stock bonus payout than would the award date designated value.
(For an explanation of the alternative designated value, see footnote 1 to
the Aggregated Option/SAR Exercises in 1997 and FY-End Option/SAR Values
Table, pages ________).
The Compensation and Management Development Committee:
Dexter F. Baker Ralph D. DeNunzio, Chairman
John C. Morley Paul G. Schloemer
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
The Company has entered into agreements with the named executive
officers and certain other executive officers to assure their unbiased
counsel and continued dedication in the event of an unsolicited tender
offer or other occurrence that may result in a change of control. The
terms of the agreements provide that, in the event of a change of control,
as previously defined on pages _____ of this Consent Revocation Statement,
and the termination of the executives employment at any time during the
2-year period thereafter, the executive will be paid a lump sum equal to a
multiplier of 1, 2 or 3 times the sum of his highest salary rate in effect
during the 12 months prior to termination of employment and his highest
annual bonus paid during the prior 3-year period, together with payment of
an amount necessary to pay any excise tax, and any taxes thereon, due on
the lump sum or other payment. The consummation of the AlliedSignal Offer
or the election of the AlliedSignal Nominees to the Board would constitute
a change in control within the meaning of such agreements
Additionally, upon a change of control: (i) all awards that the
executive has received under any bonus plans he is participating in will
be immediately vested and either paid or exercisable, as appropriate; (ii)
the executive will be paid in cash installments per the terms of the
applicable contract for all restricted stock, if any, issued by contract;
(iii) he will be vested in deferred compensation matching amounts; and
(iv) he will receive continuation of any existing split dollar life
insurance policy until the latter of the policy anniversary date following
the executives 65th birthday or the 15th anniversary of the policy. Upon a
change of control and termination of the executive's employment within 2
years thereafter, the executive also shall be vested in all pension
benefits based on the highest annual salary rate in effect during the 12
months prior to termination of employment with respect to the pension plan
and, with respect to the pension restoration plan, the amount of
compensation on which the lump sum severance payment described above is
calculated, plus an additional accrual for 1, 2 or 3 years; shall receive
the conversion of the executives group term life insurance policy, if any,
to a fully paid permanent life insurance policy remaining in effect for 1,
2 or 3 years at the Company's cost; and shall receive continuation of
health, dental, and disability benefits until the latter of 1, 2 or 3
years, attainment of the age or other condition at which the benefits
discontinue according to the terms of the related plan, reduced to the
extent of comparable benefits provided by a new employer without cost.
DISSENTERS' RIGHTS
Shareholders of AMP are not entitled to dissenters' rights in
connection with the AlliedSignal Consent Proposals.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1997 there were: (a) no transactions between the Company and
management, the Directors (or related third parties; (b) no business
relationship between the Company and a Director; and (c) no indebtedness to
the Company by management, the Directors or related third parties or
entities, that must be disclosed.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers, directors, and persons owning more than
ten percent of a registered class of the Company's equity securities file
reports of ownership and changes in ownership of all equity and derivative
securities of the Company with the Securities and Exchange Commission
("SEC") and the New York Stock Exchange. The SEC regulations also require
that a copy of all such Section 16(a) forms filed must be furnished to the
Company by the officers, directors and greater than ten percent
shareholders.
Based solely on a review of the copies of such forms and amendments
thereto received by the Company, or written representations from the
Company's officers and directors that no Forms 5 were required to be filed,
the Company believes that during 1997 all Section 16(a) filing requirements
applicable to its officers, directors and greater than ten-percent
beneficial owners were met with the exception of Richard P. Clark, for whom
inadvertently 153 shares held by one son rather than two sons were reported
in a Form 3 as beneficially owned, and Juergen W. Gromer, for whom an
exercise of stock options was incorrectly reported as a "same day sale"
rather than a "cashless for stock" exercise whereby his holdings were
increased by a net of 4,299 shares. Late or amended filings were made
promptly upon discovery of the oversight.
PRINCIPAL SHAREHOLDERS
As of August , 1998, the only persons known to management to own
beneficially more than 5% of the outstanding shares of Common Stock of the
Company are named below:
<TABLE>
<CAPTION>
Amount and Na-
ture of Benefi- Percent
Title of Class Name and Address of Beneficial Owner cial Ownership of Class
-------------- ------------------------------------ --------------- --------
<S> <C> <C> <C>
Common Stock FMR Corp. 15,908,145 7.23
82 Devonshire Street,
Boston, Massachusetts 02109
The nature of ownership is as follows:
Sole Voting Powers . . . . . . . . . . . . . . . . . . . . 935,115
Shared Voting Powers . . . . . . . . . . . . . . . . . . . 0
Sole Dispositive Powers . . . . . . . . . . . . . . . . . . 15,908,145
Shared Dispositive Powers . . . . . . . . . . . . . . . . . 0
</TABLE>
SOLICITATION OF REVOCATIONS
The cost of the solicitation of revocations of consent will be borne
by AMP. AMP estimates that the total expenditures in connection with such
solicitation (including the fees and expenses of AMP's attorneys, public
relations advisers and solicitors, and advertising, printing, mailing,
travel and other costs, but excluding salaries and wages of officers and
employees), will be approximately $______, of which $______ has been spent
to date. Directors, officers and other AMP employees may, without
additional compensation, solicit revocations by mail, in person, by
telecommunication or by other electronic means.
AMP has retained Innisfree, at an estimated fee of $250,000 plus
reasonable out-of-pocket expenses, to assist in the solicitation of
revocations, as well as to assist AMP with its communications with its
shareholders with respect to, and to provide other services to AMP in
connection with, AMP's opposition to the AlliedSignal Consent Solicitation.
Approximately 50 persons will be utilized by Innisfree in its efforts. AMP
will reimburse brokerage houses, banks, custodians and other nominees and
fiduciaries for out-of-pocket expenses incurred in forwarding AMP's consent
revocation materials to, and obtaining instructions relating to such
materials from, beneficial owners of Common Stock. AMP has agreed to
indemnify Innisfree against certain liabilities and expenses in connection
with its engagement, including certain liabilities under the federal
securities laws.
PARTICIPANTS IN THE SOLICITATION
Under applicable regulations of the SEC, each member of the Board,
certain executive officers of AMP, certain other members of management of
AMP and certain other persons may be deemed to be a "participant" in AMP's
solicitation of revocations of consent. The principal occupations and
business addresses of each participant are set forth in Schedule A.
Information about the present ownership by directors and the named
executive officers of AMP of AMP's securities is provided in this Consent
Revocation Statement and the present ownership of AMP's securities by other
participants is listed on Schedule A.
SHAREHOLDER PROPOSALS
In order to be considered for inclusion in AMP's proxy materials for
the 1999 Annual Meeting, shareholder proposals must be received by AMP at
its headquarters office not later than November 16, 1998 and must have
satisfied the conditions established by the SEC under Rule 14a-8 for
shareholder proposals to be included in AMP's proxy materials for that
meeting. In order for a shareholder proposal made outside of Rule 14a-8 to
be considered "timely" within the meaning of Rule 14a-4(c), such proposal
must be received by AMP at its headquarters office not later than January
29, 1999.
AMP INCORPORATED
___________ ___, 1998
IMPORTANT
1. If your shares are registered in your own name, please sign, date and
mail the enclosed WHITE Consent Revocation Card to Innisfree in the
postage-paid envelope provided.
2. If you have previously signed and returned a blue consent card to
AlliedSignal, you have every right to change your vote. Only your latest
dated card will count. You may revoke any blue consent card already sent
to AlliedSignal by signing, dating and mailing the enclosed WHITE Consent
Revocation Card in the postage-paid envelope provided.
3. If your shares are held in the name of a brokerage firm, bank nominee
or other institution, only it can sign a WHITE Consent Revocation Card
with respect to your shares and only after receiving your specific
instructions. Accordingly, please sign, date and mail the enclosed
WHITE Consent Revocation Card in the postage-paid envelope provided.
To ensure that your shares are voted, you should also contact the
person responsible for your account and give instructions for a WHITE
Consent Revocation Card to be issued representing your shares.
4. After signing the enclosed WHITE Consent Revocation Card, do not sign
or return the blue consent card. Do not even use AlliedSignal's blue
consent card to indicate your opposition to the AlliedSignal Consent
Proposals.
If you have any questions about giving your revocation of consent or
require assistance, please call:
INNISFREE M&A INCORPORATED
501 MADISON AVENUE, 20TH FLOOR
NEW YORK, NEW YORK 10022
CALL TOLL FREE: (888) 750-5834
BANKS & BROKERS CALL COLLECT: (212) 750-5833
SCHEDULE A
INFORMATION CONCERNING THE DIRECTORS AND CERTAIN EXECUTIVE OFFICERS OF AMP
AND CERTAIN EMPLOYEES OF AMP AND OTHER PARTICIPANTS WHO MAY ALSO SOLICIT
REVOCATIONS OF CONSENTS
The following table sets forth the name, principal business address
and the present office or other principal occupation or employment, and the
name, principal business and the address of any corporation or other
organization in which such employment is carried on, of the directors and
certain executive officers of AMP and certain employees and other
representatives of AMP who may also solicit revocations of consents from
shareholders of AMP. Unless otherwise indicated, the principal occupation
refers to such person's position with AMP and the business address is AMP
Incorporated, P. O. Box 3608, Harrisburg, Pennsylvania 17105.
DIRECTORS
The principal occupations of the Company's directors who are deemed
participants in the solicitation are set forth on pages __ and __ of this
Consent Revocation Statement. The principal business address of Messrs.
Hudson, Marley and McInnes is that of the Company. The name, business and
address of the other participants' organization of employment are as
follows:
Name Address
---- -------
Ralph D. DeNunzio Harbor Point Associates, Inc.
Suite 2602
375 Park Avenue
New York, NY 10152
Barbara Hackman Franklin Barbara Franklin Enterprises
2600 Virginia Avenue NW, Suite 506
Washington, DC 20037
Joseph M. Hixon III Hixon Investments
4400 Marsh Landing Boulevard, Suite 7
Ponte Vedra Beach, FL 32082-1287
Joseph M. Magliochetti Dana Corporation
4500 Dorr Street
Toledo, OH 43615
Jerome J. Meyer Tektronix, Inc.
26600 SW Parkway
Wilsonville, OR 97070-1000
John C. Morley Evergreen Ventures, Ltd.
30195 Chagrin Boulevard, Suite 210N
Pepper Pike, OH 44124
Paul G. Schloemer Parker Hannifin Corporation
18321 Jamboree Road
P.O. Box C 19510
Irvine, CA 92612
Takeo Shiina IBM Japan, Ltd.
2-12 Roppongi 3-chome
Minato-tu, Tokyo 106-8711
Japan
EXECUTIVE OFFICERS AND MANAGEMENT
The principal occupation of the Company's executive officers and
certain other members of management who are deemed participants in the
solicitation are set forth below. Except as otherwise specified below, the
principal business address of each of such persons is that of the Company.
Name Principal Occupation
---- --------------------
Robert Ripp Executive Vice President, Global Businesses
William S. Urkiel Corporate Vice President and Chief Financial Officer
Richard P. Clark Divisional Vice President, Global Wireless Products
Group
Herbert M. Cole Corporate Vice President and President, Global
Terminal and Connector Operations
Thomas J. 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
Juergen W. Gromer Corporate Vice President and President, Global
AMP Deutschland Automotive Division
Ampere Str. 7-11
63225 Langen
Germany
John E. Gurski Corporate Vice President and President, Global
Value-Added Operations and President, Global
Operating Division
David F. Henschel Corporate Secretary
William J. Hudson, Jr. Chief Executive Officer and President
John H. Kegel Corporate Vice President, Asia/Pacific
c/o Asia Pacific
Operations Office
KSP C-7F No. 725
3-2-1 Sakado, Takatsu-Ku
Kawasaki, Japan
Mark E. Lang Corporate Controller
Philippe Lemaitre Corporate Vice President and
Chief Technology Officer
James E. Marley Chairman of the Board
Joseph C. Overbaugh Corporate Treasurer
Nazario Proietto Corporate Vice President and President, Global
Consumer, Industrial and Power Technology
Division
Douglas Wilburne Director, Investor Relations
Mary Rakoczy Manager, Shareholder Services
CREDIT SUISSE FIRST BOSTON
Certain employees of Credit Suisse First Boston Corporation ("CSFB")
may also assist in the solicitation of proxies, including by communicating
in person, by telephone, or otherwise with limited number of institutions,
brokers, or other persons who are shareholders of AMP. CSFB will not
receive any separate fee for its solicitation activities. Credit Suisse
First Boston is an investment banking firm that provides a full range of
financial services for institutional and individual clients. Although CSFB
does not admit that it or any of its directors, officers, employees or
affiliates are a "participant," as defined in Schedule 14A promulgated
under the Securities Exchange Act of 1934 by the Securities and Exchange
Commission, or that such Schedule 14A requires the disclosure of certain
information concerning CSFB, CSFB may assist AMP in such a solicitation.
CSFB engages in a full range of investment banking, securities trading,
market-making and brokerage services for institutional and individual
clients. In the normal course of its business, CSFB may trade securities
of AMP for its own account and the account of its customers and,
accordingly, may at any time hold a long or short position in such
securities. As of August 12, 1998, CSFB held a net long position of 99,766
shares of AMP Common Stock. Additionally, in the normal course of its
business, CSFB may finance its securities positions by bank and other
borrowings and repurchase and securities borrowing transactions.
Information with respect to the employees of CSFB who may be deemed
"participants" is set forth below. None of the individuals named below
owns any shares of Common Stock or has engaged in any transaction
involving the Common Stock during the past two years. The principal
business address of each of the persons listed below is Eleven Madison
Avenue, New York, New York 10010, except that Mr. Koch's principal business
is Credit Suisse First Boston, AT&T Corporate Center, 227 West Monroe St.,
Chicago, IL 60606.
Name Principal Occupation
---- --------------------
Alan H. Howard Managing Director, Investment Banking
Steven Koch Co-Head of M&A Group and Managing Director
D. Scott Lindsay Co-Head of M&A Group and Managing Director
AMP has retained CSFB to act as its lead financial advisor with
respect to the AlliedSignal Offer pursuant to a letter agreement, dated
August 5, 1998 (the "CSFB Engagement Letter"), between CSFB and AMP. The
CSFB Engagement Letter provides for the payment to CSFB of customary fees.
In addition to customary fees, AMP has agreed to reimburse CSFB for CSFB's
out-of-pocket expenses, including fees and expenses of CSFB's legal
counsel, if any, and any other advisor retained by CSFB (which, except in
the case of legal counsel, shall only be retained with the prior approval
of AMP), resulting from or arising out of the CSFB Engagement Letter. AMP
has also agreed to indemnify CSFB and certain related persons against
certain liabilities incurred in connection with its performance under the
CSFB Engagement Letter.
INFORMATION REGARDING OWNERSHIP OF THE COMPANY'S SECURITIES BY PARTICIPANTS
None of the participants owns any of the Company's securities of
record but not beneficially. The number of shares of Common Stock held by
directors and the named executive officers is set forth on pages __ and __
of this Consent Revocation Statement. The number of shares of Common Stock
held by the other participants is set forth below:
Name Share Ownership
---- ---------------
William S. Urkiel 22,987
Richard P. Clark 34,135
Herbert M. Cole 87,891
Thomas J. DiClemente 32,924
Rudolf Gassner 53,117
Charles W. Goonrey 16,817
David F. Henschel 5,133
John H. Kegel 36,649
Mark E. Lang 3,841
Philippe Lemaitre 16,406
Joseph C. Overbaugh 24,024
Nazario Proietto 42,197
Douglas Wilburne 1
Mary Rakoczy 110
INFORMATION REGARDING TRANSACTIONS IN THE COMPANY'S SECURITIES BY
PARTICIPANTS
The following table sets forth purchases and sales of AMP's equity
securities by the participants listed below during the past two years.
Unless otherwise indicated, all transactions are in the public market.
Number of
Shares of
Common Stock
Purchased
NAME (or Sold) FOOTNOTE DATE
- -------------------------------------------------------------------------
DIRECTORS
Ralph D. DeNunzio 2,000 (1) 07/01/96
2,000 (1) 07/01/97
2,000 (1) 07/01/98
Barbara Hackman Franklin 2,000 (1) 07/01/96
2,000 (1) 07/01/97
52 (10) 12/31/97
300 (8) 02/10/98
6.7 (10) 03/02/98
10 (10) 06/01/98
2,000 (1) 07/01/98
Joseph M. Hixon III 2,000 (1) 07/01/96
(51,133) (3) 09/30/96
2,000 (1) 07/01/97
(510) (3) 12/24/97
(490) (3) 12/30/97
(2,079) (3) 04/02/98
2,000 (1) 07/01/98
William J. Hudson, Jr. 2,500 (1) 07/23/96
73,100 (1) 07/23/96
46,900 (12) 07/23/96
902 (5) 04/21/97
1,159 (5) 04/21/97
(4,040) (3) 04/23/97
2,100 (1) 07/22/97
61,800 (1) 07/22/97
39,600 (12) 07/22/97
906 (4) 07/30/97
1,895 (6) 12/31/97
9,956 (13) 01/27/98
(3,398) (7) 01/27/98
(61,800) (3) 02/03/98
1,306 (5) 04/21/98
2,039 (5) 04/21/98
(3,406) (3) 04/22/98
Joseph M. Magliochetti 2,000 (1) 07/24/96
2,000 (1) 07/01/97
2,000 (1) 07/01/98
James E. Marley 2,500 (1) 07/23/96
58,000 (1) 07/23/96
31,700 (12) 07/23/96
260 (3) 10/15/96
260 (3) 10/16/96
500 (3) 10/28/96
1,536 (5) 10/28/96
2,100 (1) 07/22/97
39,000 (1) 07/22/97
31,700 (12) 07/22/97
10,000 (3) 07/28/97
10,000 (3) 07/28/97
2,520 (5) 10/28/97
1,364 (6) 12/31/97
7,965 (13) 01/27/98
(3,957) (7) 01/27/98
Judy Marley (Wife) .3936 (10) 03/02/98
.4642 (10) 06/01/98
Harold A. McInnes (5,315) (11) 10/28/96
5,315 (5) 10/28/96
(1,000) (3) 11/26/96
(6,000) (9) 04/28/97
(300) (3) 06/12/97
(382) (3) 06/17/98
Jerome J. Meyer 2,000 (1) 07/01/96
1,300 (8) 08/02/96
2,000 (1) 07/01/97
2,000 (1) 07/01/98
John C. Morley (300) (9) 06/12/96
2,000 (1) 07/01/96
2,000 (1) 07/01/97
2,000 (1) 07/01/98
Paul G. Schloemer 2,000 (1) 07/01/96
600 (8) 01/28/97
2,000 (1) 07/01/97
2,000 (1) 07/01/98
Takeo Shiina 2,000 (1) 07/01/96
2,000 (1) 07/01/97
4.60 (10) 12/31/97
0.62 (10) 03/02/98
.73 (10) 06/01/98
2,000 (1) 07/01/98
OFFICERS
-------
Richard P. Clark
2,500 (1) 07/23/96
14,300 (1) 07/23/96
326 (5) 10/28/96
2,100 (1) 07/22/97
5,500 (1) 07/22/97
4,700 (12) 07/22/97
535 (5) 10/28/97
3,472.92 (6) 12/31/97
3,200 (1) 07/21/98
6,500 (1) 07/21/98
6,600 (12) 08/17/98
Herbert M. Cole 2,500 (1) 07/23/96
19,800 (1) 07/23/96
13,800 (12) 07/23/96
460 (5) 10/28/96
1,138 (4) 07/16/97
2,100 (1) 07/22/97
19,800 (1) 07/22/97
13,600 (12) 07/22/97
917 (4) 08/06/97
756 (5) 10/28/97
2,770 (13) 01/27/98
(1,183) (7) 01/27/98
3,200 (1) 07/21/98
25,400 (1) 07/21/98
19,500 (12) 08/17/98
Thomas J. DiClemente 2,500 (1) 07/23/96
10,900 (1) 07/23/96
2,100 (1) 07/22/97
7,800 (1) 07/22/97
6,100 (12) 07/22/97
182 (6) 12/31/97
6 (10) 12/31/97
3.57 (10) 03/02/98
4.21 (10) 06/01/98
3,200 (1) 07/21/98
10,500 (1) 07/21/98
111 (5) 07/27/98
900 (8) 07/28/98
100 (8) 07/28/98
9,300 (12) 08/17/98
Rudolf Gassner 2,500 (1) 07/23/96
14,500 (1) 07/23/96
2,100 (1) 07/22/97
7,000 (1) 07/22/97
5,700 (12) 07/22/97
(500) (9) 08/05/97
1,684 (10) 12/31/97
58.85 (10) 03/02/98
(2,139) (9) 04/27/98
7 (6) 04/30/98
15.30 (10) 06/01/98
3,200 (1) 07/21/98
9,800 (1) 07/21/98
141 (5) 07/27/98
9,000 (12) 08/17/98
Charles W. Goonrey 2,500 (1) 07/23/96
8,000 (1) 07/23/96
303 (5) 04/21/97
2,100 (1) 07/22/97
7,200 (1) 07/22/97
1,348 (4) 07/31/97
(7,538) (3) 07/31/97
439 (5) 04/21/98
(439) (4) 04/21/98
3,200 (1) 07/21/98
8,900 (1) 07/21/98
Mary Goonrey (wife) 7,538 (14) 07/31/97
46.4674 (10) 03/02/98
439 (14) 04/21/98
57.9258 (10) 06/01/98
Juergen W. Gromer 22,400 (1) 07/23/96
15,000 (1) 07/22/97
9,300 (12) 07/22/97
1,103 (5) 07/27/97
1,922 (4) 07/30/97
1,377 (4) 07/30/97
17,400 (1) 07/21/98
212 (5) 07/27/98
11,900 (12) 08/17/98
John E. Gurski 2,500 (1) 07/23/96
21,300 (1) 07/23/96
14,700 (12) 07/23/96
621 (5) 04/21/97
2,100 (1) 07/22/97
19,100 (1) 07/22/97
13,200 (12) 07/22/97
672 (6) 12/31/97
2,947 (13) 01/27/98
(1,464) (7) 01/27/98
3,200 (1) 07/21/98
24,000 (1) 07/21/98
18,500 (12) 08/17/98
John E. Gurski Cust. .5538 (10) 03/02/98
for Kevin (Son) .6530 (10) 06/01/98
David F. Henschel 2,500 (1) 07/23/96
2,300 (1) 07/23/96
306 (5) 10/28/96
2,100 (1) 07/22/97
2,400 (1) 07/22/97
235 (4) 07/28/97
504 (5) 10/28/97
130 (14) 12/16/97
1,744 (6) 12/31/97
224 (10) 12/31/97
19.26 (10) 03/02/98
22.71 (10) 06/01/98
John H. Kegel 2,500 (1) 07/23/96
8,200 (1) 07/23/96
325 (5) 04/21/97
2,100 (1) 07/22/97
8,100 (1) 07/22/97
1,259 (4) 07/24/97
406 (10) 12/31/97
25.85 (10) 03/02/98
471 (5) 04/21/98
33.85 (10) 06/01/98
3,200 (1) 07/21/98
7,300 (1) 07/21/98
7,100 (12) 08/17/98
Mark E. Lang 2,500 (1) 07/23/96
4,000 (1) 07/23/96
1 (15) 06/17/97
229 (8) 07/01/97
2,100 (1) 07/22/97
4,400 (1) 07/22/97
.006 (10) 03/02/98
.007 (10) 06/01/98
3,200 (1) 07/21/98
10,800 (1) 07/21/98
1,683.03 (6) 07/27/98
172.0436 (10) 08/03/98
Philippe Lemaitre 17,500 (1) 03/12/97
2,100 (1) 07/22/97
8,100 (1) 07/22/97
6,300 (12) 07/22/97
3,200 (1) 07/21/98
11,400 (1) 07/21/98
9,900 (12) 08/17/98
Joseph C. Overbaugh 2,500 (1) 07/23/96
8,200 (1) 07/23/96
301 (5) 04/21/97
2,100 (1) 07/22/97
7,400 (1) 07/22/97
697 (6) 12/31/97
3,200 (1) 07/21/98
8,800 (1) 07/21/98
508 (6) 07/28/98
Nazario Proietto 2,500 (1) 07/23/96
11,300 (1) 07/23/96
426 (5) 10/28/96
2,100 (1) 07/22/97
5,000 (1) 07/22/97
4,400 (12) 07/22/97
617 (5) 10/28/97
86 (6) 12/31/97
24.91 (10) 03/02/98
29.37 (10) 06/01/98
3,200 (1) 07/21/98
9,800 (1) 07/21/98
8,800 (12) 08/17/98
Robert Ripp 2,500 (1) 07/23/96
23,000 (1) 07/23/96
15,800 (12) 07/23/96
2,100 (1) 07/22/97
23,000 (1) 07/22/97
15,600 (12) 07/22/97
3,624 (13) 01/27/98
(1,800) (7) 01/27/98
3,200 (1) 07/21/98
37,900 (1) 07/21/98
27,900 (12) 08/17/98
William S. Urkiel 2,500 (1) 07/23/96
16,200 (1) 07/23/96
2,100 (1) 07/22/97
18,500 (1) 07/22/97
561 (10) 12/31/97
64.4 (10) 03/02/98
75.9 (10) 06/01/98
3,200 (1) 07/21/98
15,000 (1) 07/21/98
12,400 (12) 08/17/98
OTHERS
Mary J. Rakoczy 5 (10) 10/15/96
8.42 (10) 05/01/97
5.79 (10) 02/17/98
.6276 (10) 03/02/98
.7816 (10) 06/01/98
Douglas Wilburne 1 (15) 06/01/97
.0061 (10) 03/02/98
.0071 (10) 06/01/98
John Dean Wilburne (Son) 1.16 (10) 02/17/98
1.21 (10) 03/16/98
.02 (10) 06/01/98
Douglas James Wilburne
(Son) 1.16 (10) 02/17/98
1.21 (10) 03/16/98
.02 (10) 06/01/98
FOOTNOTES:
(1) Stock option award.
(2) Acquisition pursuant to the exercise of stock options.
(3) Disposition pursuant to a bona fide gift.
(4) Cashless exercise of stock options.
(5) Conversion of derivative security.
(6) The securities were purchased through a 401(k) plan.
(7) Shares withheld for tax purposes in connection with the vesting of
restricted stock.
(8) Open market purchase.
(9) Open market sale.
(10) Shares purchased through the Dividend Reinvestment Plan.
(11) Shares sold back to AMP.
(12) Award of performance restricted shares.
(13) Acquisition of vested performance shares.
(14) Acquired pursuant to a bona fide gift.
(15) Company award.
MISCELLANEOUS INFORMATION CONCERNING PARTICIPANTS
Except as described in this Schedule A or in the Consent Revocation
Statement, none of the participants nor any of their respective affiliates
or associates (together, the "Participant Affiliates"), (i) directly or
indirectly beneficially owns any shares of Common Stock of the Company or
any securities of any subsidiary of the Company or (ii) has had any
relationship with the Company in any capacity other than as a stockholder,
employee, officer and director. Furthermore, except as described in this
Schedule A or in the Consent Revocation Statement, no Participant Affiliate
is either a party to any transaction or series of transactions since
January 1, 1997, or has knowledge of any currently proposed transaction or
series of transactions, (i) to which the Company or any of its subsidiaries
was or is to be a party, (ii) in which the amount involved exceeds $60,000,
and (iii) in which any Participant Affiliate had, or will have, a direct or
indirect material interest.
Except for the employment agreements described in the Consent
Revocation Statement, no Participant Affiliate has entered into any
agreement or understanding with any person respecting any future employment
by the Company or its affiliates or any future transactions to which the
Company or any of its affiliates will or may be a party. Except as
described in this Schedule A or in the Consent Revocation Statement, there
are no contracts, arrangements or understandings by any Participant
Affiliate within the past year with any person with respect to the
Company's securities.
ANNEX 1
FORM OF ALLIEDSIGNAL PROPOSED AMENDMENTS
TO THE COMPANY BY-LAWS
1. Proposed Amendment to Section 2.2 of Article II
Section 2.2 of Article II of the Company's By-laws is amended, in its
entirety, to read as follows:
'The number of directors of the Corporation shall be twenty-
eight. This Section 2.2 may be repealed or amended only with the
affirmative vote of holders of a majority of the shares of the Corporation
entitled to vote thereon.'
2. Proposed Amendment to Section 2.4 of Article II
Section 2.4 of Article II of the Company's By-laws is amended by
replacing the first sentence thereof with the following:
'Vacancies in the Board, however caused, may be filled by the
affirmative vote of a majority of the remaining directors even though less
than a quorum of the Board, or by the sole remaining director, provided,
however, that any vacancies in the Board created by an amendment by
shareholders of these By-laws shall be filled only by the affirmative vote
of holders of a majority of the shares entitled to vote thereon. The
preceding sentence may be repealed or amended only with the affirmative
vote of holders of a majority of the shares entitled to vote thereon.'
3. Proposed Amendment to Section 1.7.2 of Article 1
Section 1.7.2 of Article 1 is amended by adding the following
sentence after the last sentence thereof:
'Notwithstanding anything contained in any other provision of
these By-laws, any shareholder seeking to nominate candidates for election
to the Board pursuant to the shareholder action by written consent need not
comply with any advance notification provisions contained in these By-laws,
including, without limitation, Section 1.5.3 hereof. The preceding
sentence may be repealed or amended only with the affirmative vote of
holders of a majority of the shares entitled to vote thereon.'
PRELIMINARY COPY
SUBJECT TO COMPLETION, DATED AUGUST 13, 1998
[FORM OF CONSENT REVOCATION CARD -- WHITE]
AMP INCORPORATED
THIS REVOCATION OF CONSENT IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF AMP INCORPORATED
IN OPPOSITION TO THE SOLICITATION BY
ALLIEDSIGNAL CORPORATION
The undersigned, a holder of shares of Common Stock, without par
value (the "Common Stock"), of AMP Incorporated ("AMP"), acting with
respect to all of the shares of Common Stock held by the undersigned,
hereby revokes any and all consents that the undersigned may have given
with respect to each of the following proposals:
THE BOARD OF DIRECTORS OF AMP UNANIMOUSLY RECOMMENDS THAT YOU
"REVOKE CONSENT" ON EACH PROPOSAL SET FORTH BELOW. PLEASE SIGN, DATE AND
MAIL THIS CONSENT REVOCATION CARD TODAY.
1. Proposal made by AlliedSignal to amend AMP's By-laws to require that
AMP's Board of Directors consist of 28 members, more than double its
current size (the "Board-Packing Proposal"). (For complete text, see
AlliedSignal Proposal 1 in AMP's Consent Revocation Statement.)
[ ] REVOKE CONSENT [ ] DO NOT REVOKE CONSENT [ ] ABSTAIN
2. Proposal made by AlliedSignal to amend AMP's By-laws so that AMP's
shareholders may fill vacancies in AMP's Board of Directors, including
the seventeen vacancies which would be created if AlliedSignal's
Board-Packing Proposal is approved. (For complete text, see
AlliedSignal Proposal 2 in AMP's Consent Revocation Statement.)
[ ] REVOKE CONSENT [ ] DO NOT REVOKE CONSENT [ ] ABSTAIN
3. Proposal made by AlliedSignal to amend AMP's By-laws to specify that
the advance notice provisions of AMP's By-laws are not applicable to
nominations of directors for election by written consent of
shareholders. (For complete text, see AlliedSignal Proposal 3 in
AMP's Consent Revocation Statement.)
[ ] REVOKE CONSENT [ ] DO NOT REVOKE CONSENT [ ] ABSTAIN
4. Proposal made by AlliedSignal to elect the following seventeen
directors and executive officers of AlliedSignal to fill the seventeen
vacancies on AMP's Board of Directors which would be created if
AlliedSignal's Board-Packing Proposal is approved: Hans W. Becherer,
Lawrence A. Bossidy, Ann M. Fudge, Paul X. Kelley, Peter M. Kreindler,
Robert P. Luciano, Robert B. Palmer, Russell E. Palmer, Frederic M.
Poses, Donald J. Redlinger, Ivan G. Seidenberg, Andrew C. Sigler, John
R. Stafford, Thomas P. Stafford, Richard F. Wallman, Robert C. Winters
and Henry T. Yang (collectively, the "AlliedSignal Nominees"). (For
complete text, see AlliedSignal Proposal 4 in AMP's Consent Revocation
Statement.)
[ ] REVOKE CONSENT [ ] DO NOT REVOKE CONSENT [ ] ABSTAIN
INSTRUCTIONS: TO REVOKE CONSENT, WITHHOLD REVOCATION OF CONSENT OR ABSTAIN
FROM CONSENTING TO THE ELECTION OF ALL THE ALLIEDSIGNAL
NOMINEES, CHECK THE APPROPRIATE BOX. IF YOU WISH TO REVOKE
THE CONSENT TO THE ELECTION OF CERTAIN OF SUCH NOMINEES, BUT
NOT ALL OF THEM, CHECK THE "REVOKE CONSENT" BOX AND WRITE
THE NAME OF EACH SUCH PERSON AS TO WHOM YOU DO NOT WISH TO
REVOKE CONSENT IN THE FOLLOWING SPACE:
____________________________________________________
5. Proposal made by AlliedSignal to repeal each provision of AMP's By-
laws or any amendment(s) to AMP's By-laws adopted subsequent to July
22, 1998 and prior to the effectiveness of the actions sought by
AlliedSignal in Proposals 1 through 4 above. (For complete text, see
AlliedSignal Proposal 5 in AMP's Consent Revocation Statement.)
[ ] REVOKE CONSENT [ ] DO NOT REVOKE CONSENT [ ] ABSTAIN
IF NO DIRECTION IS MADE WITH RESPECT TO ONE OR MORE OF THE
FOREGOING PROPOSALS, OR IF YOU MARK EITHER THE "REVOKE CONSENT" OR
"ABSTAIN" BOX WITH RESPECT TO ONE OR MORE OF THE FOREGOING PROPOSALS, THIS
REVOCATION CARD WILL REVOKE ALL PREVIOUSLY EXECUTED CONSENTS WITH RESPECT
TO SUCH PROPOSALS.
Please sign your name below exactly as it appears hereon. If
shares are held jointly, each shareholder should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Dated: __________________, 1998
__________________________
Signature:
Title:
____________________________
Signature: (if held jointly)
Title:
PLEASE SIGN, DATE AND RETURN THIS CONSENT REVOCATION
CARD PROMPTLY
