SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No.13)
AMP INCORPORATED
(Name of Subject Company)
AMP INCORPORATED
(Name of Person(s) Filing Statement)
Common Stock, no par value
(including Associated Common Stock Purchase Rights)
(Title of Class of Securities)
031897-10-1
(CUSIP Number of Class of Securities)
David F. Henschel
Corporate Secretary
AMP Incorporated
P.O. Box 3608
Harrisburg, Pennsylvania 17105-3608
(717) 564-0100
(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of the Person(s) Filing Statement)
With a Copy to:
Peter Allan Atkins
David J. Friedman
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022-3897
(212) 735-3000
This Amendment No.13 amends and supplements the
Solicitation/Recommendation Statement of Schedule 14D-9 dated August 21,
1998, as amended, (the "Schedule 14D-9") filed by AMP Incorporated, a
Pennsylvania corporation ("AMP"), in connection with the tender offer by
PMA Acquisition Corporation, a Delaware corporation (the "Purchaser") and
wholly owned subsidiary of AlliedSignal Inc., a Delaware corporation
("AlliedSignal"), to purchase shares of common stock, no par value, of AMP
(the "Common Stock"), including the associated Common Stock Purchase Rights
(the "Rights" and, together with the Common Stock, the "Shares") issued
pursuant to the Rights Agreement, dated as of October 28, 1989, and as
amended on September 4, 1992, August 12, 1998 and August 20, 1998 (the
"Rights Agreement"), between AMP and ChaseMellon Shareholder Services
L.L.C., as Rights Agent, at a price of $44.50 per Share, net to the seller
in cash, as disclosed in its Tender Offer Statement on Schedule 14D-1,
dated August 10, 1998, as amended, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated August 10, 1998, and
as amended September 14, 1998, and the related Letter of Transmittal.
Unless otherwise indicated, all defined terms used herein shall
have the same meaning as those set forth in the Schedule 14D-9.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
Subsection (f) of Item 8 is hereby amended by adding the following
paragraph at the end thereof:
On September 14, 1998, AlliedSignal filed a motion to amend its
complaint. The proposed amended complaint seeks (i) declaratory and
injunctive relief declaring Amendment No. 3 to the Rights Agreement,
approved by the Board on August 20, 1998, to be invalid under Pennsylvania
law; or to the extent that Amendment No. 3 is permitted under Pennsylvania
law, declaring the law as so applied unconstitutional under the Supremacy
and Commerce Clauses of the United States Constitution and (ii) declaratory
and injunctive relief prohibiting AMP's Board from taking any further
action which might interfere with the AlliedSignal Offer or its Consent
Solicitation, as amended. On the same day, AlliedSignal also filed a motion
for (i) partial summary judgment on the claim for a declaratory judgment
set forth in the amended complaint that Amendment No. 3 is invalid, or, in
the alternative, a preliminary injunction restraining enforcement of
Amendment No. 3; and (ii) a preliminary injunction prohibiting AMP's Board
from taking any action that would make the shareholder vote on the Consent
Solicitation, as amended, invalid. A copy of the Motion of Plaintiff
AlliedSignal Inc. for Summary Judgment and for an Immediate Declaratory
Judgment and Preliminary Injunction and the Verified Amended Complaint for
Declaratory and Injunctive Relief, each filed by AlliedSignal in the United
States District Court for the Eastern District of Pennsylvania on September
14, 1998, are filed herewith as Exhibits 48 and 49, respectively, and are
incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
The following exhibits are filed herewith:
Exhibit
No. Description
-------- -----------
46 Text of a press release issued by AMP on September
15, 1998.
47 Text of a newspaper advertisement published by AMP on
September 15, 1998.
48 Motion of Plaintiff AlliedSignal Inc. for Summary
Judgment and for an Immediate Declaratory Judgment,
filed on September 14, 1998 in the United States
District Court for the Eastern District of
Pennsylvania in AlliedSignal Inc. v. AMP
Incorporated, (Civil Action No. 98-CV- 4058).
49 Preliminary Injunction and the Verified Amended
Complaint for Declaratory and Injunctive Relief,
filed on September 14, 1998 in the United States
District Court for the Eastern District of
Pennsylvania in AlliedSignal Inc. v. AMP
Incorporated, (Civil Action No. 98-CV- 4058).
o o o
This document and the exhibits attached hereto contain certain
"forward-looking" statements which AMP believes are within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The safe harbors intended to be created thereby are
not available to statements made in connection with a tender offer and AMP
is not aware of any judicial determination as to the applicability of such
safe harbor to forward-looking statements made in proxy solicitation
materials when there is a simultaneous tender offer. However, shareholders
should be aware that any such forward-looking statements should be
considered as subject to the risks and uncertainties that exist in AMP's
operations and business environment which could render actual outcomes and
results materially different than predicted. For a description of some of
the factors or uncertainties which could cause actual results to differ,
reference is made to the section entitled "Cautionary Statements for
Purposes of the 'Safe Harbor'" in AMP's Annual Report on Form 10-K for the
year ended December 31, 1997, a copy of which was also filed as Exhibit 19
to AMP's Schedule 14D-9 Filed with the SEC. In addition, the realization of
the benefits anticipated from the strategic initiatives will be dependent,
in part, on management's ability to execute its business plans and to
motivate properly the AMP employees, whose attention may have been
distracted by the AlliedSignal Offer and whose numbers will have been
reduced as a result of these initiatives.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: September 15, 1998 AMP Incorporated
By:/s/ Robert Ripp
_______________________
Name: Robert Ripp
Title: Chairman and
Chief Executive Officer
EXHIBIT INDEX
The following exhibits are filed herewith:
Exhibit
No. Description
-------- -----------
46 Text of a press release issued by AMP on September
15, 1998.
47 Text of a newspaper advertisement published by AMP on
September 15, 1998.
48 Motion of Plaintiff AlliedSignal Inc. for Summary
Judgment and for an Immediate Declaratory Judgment,
filed on September 14, 1998 in the United States
District Court for the Eastern District of
Pennsylvania in AlliedSignal Inc. v. AMP
Incorporated, (Civil Action No. 98-CV- 4058).
49 Preliminary Injunction and the Verified Amended
Complaint for Declaratory and Injunctive Relief,
filed on September 14, 1998 in the United States
District Court for the Eastern District of
Pennsylvania in AlliedSignal Inc. v. AMP
Incorporated, (Civil Action No. 98-CV- 4058).
Exhibit 46
FOR IMMEDIATE RELEASE
Contacts:
Richard Skaare Dan Katcher / Judith Wilkinson
AMP Corporate Communication Abernathy MacGregor Frank
717/592-2323 212/371-5999
Doug Wilburne
AMP Investor Relations
717/592-4965
AMP ANNOUNCES "FAST" PROGRAM
TO ITS SHAREHOLDERS
HARRISBURG, PENNSYLVANIA (SEPTEMBER 15, 1998) - AMP Incorporated (NYSE:
AMP) today addressed shareholders with the following message that appeared
in various papers around the country:
"TO ALL AMP SHAREHOLDERS:
Q: WHAT'S NEW?
A: AT AMP, JUST ABOUT EVERYTHING.
AMP is moving FAST -- through FOCUS, ACCOUNTABILITY, SIMPLICITY AND
TIMELINESS -- with confidence in the success of our Profit Improvement
Plan.
FOCUS
AMP is focused on ACHIEVING RESULTS. The implementation of AMP's Profit
Improvement Plan will produce:
o SUBSTANTIAL COST SAVINGS. By 2000, AMP's Profit Improvement Plan is
expected to yield $320 million in cost savings, with an expected
$205 million in savings in 1999.
o INCREASED OPERATING MARGINS. As a result of these cost savings, AMP's
operating income margins are expected to increase to 11% in the
fourth quarter 1998, 13.5% in 1999 and 16.5% in 2000.
o IMPROVED EARNINGS OUTLOOK. Earning per share are expected to be at
least $2.30 for 1999 and at least $3.00 for 2000. We believe these
estimates are conservative and likely to be revised upward as further
profit improvement is achieved.
ACCOUNTABILITY
AMP'S $320 million in cost savings will come from four targeted areas, each
led by an experienced executive charged with the responsibility of
achieving a specified portion of these cost savings.
SIMPLICITY
Under the new leadership of Bob Ripp, a take-charge, results-oriented,
no-nonsense CEO, AMP's attitude and goals have been revitalized and
redirected, resulting in:
o INCREASED SALES INITIATIVES. AMP is simplifying and refining
ordering, pricing and delivery systems including a new pricing
structure, a larger sales force and other customer-focused programs
like 24-hour customer service and guaranteed shipment of more than
10,000 strategic parts within 24 hours.
o NEW MANAGEMENT SYSTEM. Direct reporting to the CEO has been cut in
half from 22 to 11 executives, initiating AMP's company-wide
structural transformation.
TIMELINESS
o AMP's Profit Improvement Plan is in place and already working. AMP is
actively pursuing ways to accelerate the benefits of its Plan and
exploring options to increase value further in the nearer term.
Because we are a NEW AMP we are a SIGNIFICANTLY MORE VALUABLE COMPANY today
and will be even more so tomorrow.
AlliedSignal's offer is a blatant attempt to capture the value of the NEW
AMP for AlliedSignal's own shareholders. AlliedSignal's acknowledged tactic
is to pressure your overwhelmingly independent Board by threatening to
graft its entire Board of Directors and most of its senior management
directly onto AMP's Board.
We fully recognize that the issue often comes down to one of value. The NEW
AMP is real, it has the leadership, the programs and the dedication to
deliver results - FAST. The NEW AMP is a better value alternative than
AlliedSignal's opportunistic, low-ball bid.
THE CHOICE IS CLEAR. CHOOSE VALUE. DON'T TENDER. DON'T CONSENT."
Headquartered in Harrisburg, PA, AMP is the world's leading manufacturer of
electrical, electronic, fiber-optic and wireless interconnection devices
and systems. The Company has 48,300 employees in 53 countries serving
customers in the automotive, computer, communications, consumer, industrial
and power industries. AMP sales reached $5.75 billion in 1997.
# # #
AMP and certain other persons named below may be deemed to be participants
in the solicitation of revocations of consents in response to
AlliedSignal's consent solicitation. The participants in this solicitation
may include the directors of AMP (Ralph D. DeNunzio, Barbara H. Franklin,
Joseph M. Hixon III, William J. Hudson, Jr., Joseph M. Magliochetti, Harold
A. McInnes, Jerome J. Meyer, John C. Morley, Robert Ripp, Paul G. Schloemer
and Takeo Shiina); the following executive officers of AMP: Robert Ripp
(Chairman and Chief Executive Officer), William J. Hudson (Vice Chairman),
James E. Marley (former Chairman), William S. Urkiel (Corporate Vice
President and Chief Financial Officer), Herbert M. Cole (Senior Vice
President for Operations), Juergen W. Gromer (Senior Vice President, Global
Industry Busi-nesses), Richard P. Clark (Divisional Vice President, Global
Wireless Products Group), Thomas DiClemente (Corporate Vice President and
President, Europe, Middle East, Africa), Rudolf Gassner (Corporate Vice
President and President, Global Personal Computer Division), Charles W.
Goonrey (Corporate Vice President and General Legal Counsel), John E.
Gurski (Corporate Vice President and Presi-dent, Global Value-Added
Operations and President, Global Operations Division), David F. Henschel
(Corporate Secretary), John H. Kegel (Corporate Vice President,
Asia/Pacific), Mark E. Lang (Corporate Controller), Philippe Lemaitre
(Corporate Vice President and Chief Technology Officer), Joseph C.
Overbaugh (Corporate Treasurer), Nazario Proietto (Corporate Vice President
and President, Global Consumer, Industrial and Power Technology Division);
and the following other members of management and employees of AMP: Richard
Skaare (Director, Corpo-rate Communication), Douglas Wilburne (Director,
Investor Relations), Mary Rakoczy (Manager, Shareholder Services), Dorothy
J. Hiller (Assistant Manager, Shareholder Services) and Melissa E. Witsil
(Communications Assistant). As of the date of this communication, none of
the foregoing participants individually benefi-cially own in excess of 1%
of AMP's common stock or in the aggregate in excess of 2% of AMP's common
stock.
AMP has retained Credit Suisse First Boston Corporation ("CSFB") and
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") to act as its
financial advisors in connection with the AlliedSignal Offer, for which
CSFB and DLJ will receive customary fees, as well as reimbursement of
reasonable out-of-pocket expenses. In addition, AMP has agreed to indemnify
CSFB, DLJ and certain related persons against certain liabilities,
including certain liabilities under the federal securities laws, arising
out of their engagement. CSFB and DLJ are investment banking firms that
provide a full range of financial services for institutional and individual
clients. Neither CSFB nor DLJ admits that it or any of its directors,
officers or employees is a "participant" as defined in Schedule 14A
promulgated under the Securities Ex-change Act of 1934, as amended, in the
solicitation, or that Schedule 14A requires the disclosure of certain
information concerning either CSFB or DLJ. In connection with CSFB's role
as financial advisor to AMP, CSFB and the following investment banking
employees of CSFB may communicate in person, by telephone or otherwise with
a limited number of institutions, brokers or other persons who are
stockholders of AMP: Alan Howard, Steven Koch, Scott Lindsay, and Lawrence
Hamdan. In connection with DLJ's role as financial advisor to AMP, DLJ and
the following investment banking employees of DLJ may communicate in
person, by telephone or otherwise with a limited number of institutions,
brokers or other persons who are stockholders of AMP: Douglas V. Brown and
Herald L. Ritch. In the normal course of its business, each of CSFB and DLJ
regularly buys and sells securities issued by AMP for its own account and
for the accounts of its customers, which transactions may result in CSFB,
DLJ or the associates of either of them having a net A"long" or net "short"
position in AMP securities, or option contracts or other derivatives in or
relating to such securities. As of September 1, 1998, DLJ held no shares of
AMP common stock for its own account and CSFB had a net long position of
118,566 shares of AMP common stock.
This press release contains certain "forward-looking" statements which AMP
believes are within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. The safe
harbors intended to be created thereby are not available to statements made
in connection with a tender offer and AMP is not aware of any judicial
determination as to the applicability of such safe harbor to
forward-looking statements made in proxy solicitation materials when there
is a simultaneous tender offer. However, shareholders should be aware that
any such forward-looking statements should be considered as subject to the
risks and uncertainties that exist in AMP's operations and business
environment which could render actual outcomes and results materially
different than predicted. For a description of some of the factors or
uncertainties which could cause actual results to differ, reference is made
to the section entitled "Cautionary Statements for Purposes of the 'Safe
Harbor'" in AMP's Annual Report on Form 10-K for the year ended December
31, 1997. In addition, the realization of the benefits anticipated from the
strategic initiatives will be dependent, in part, on management's ability
to execute its business plans and to motivate properly the AMP employees,
whose attention may have been distracted by AlliedSignal's tender offer and
whose numbers will have been reduced as a result of these initiatives.
Exhibit 47
TO ALL AMP SHAREHOLDERS:
Q: What's NEW?
A: At AMP, JUST ABOUT EVERYTHING.
AMP is moving FAST -- through FOCUS, ACCOUNTABILITY, SIMPLICITY and
TIMELINESS -- with confidence in the success of our Profit Improvement
Plan.
FOCUS
AMP is focused on ACHIEVING RESULTS. The implementation of
AMP's Profit Improvement Plan will produce:
o SUBSTANTIAL COST SAVINGS. By 2000, AMP's Profit Improvement
Plan is expected to yield $320 million in cost savings, with an
expected $205 million in savings in 1999.
o INCREASED OPERATING MARGINS. As a result of these cost savings,
AMP's operating income margins are expected to increase to 11%
in the fourth quarter 1998, 13.5% in 1999 and 16.5% in 2000.
o IMPROVED EARNINGS OUTLOOK. Earnings per share are expected to
be at least $2.30 for 1999 and at least $3.00 for 2000. We
believe these estimates are conservative and likely to be
revised upward as further profit improvement is achieved.
ACCOUNTABILITY
AMP's $320 million in cost savings will come from four targeted
areas, each led by an experienced executive charged with the
responsibility of achieving a specified portion of these cost
savings.
SIMPLICITY
Under the new leadership of Bob Ripp, a take-charge,
results-oriented, no-nonsense CEO, AMP's attitude and goals have been
revitalized and redirected, resulting in:
o INCREASED SALES INITIATIVES. AMP is simplifying and refining
ordering, pricing and delivery systems including a new pricing
structure, a larger sales force and other customer-focused
programs like 24-hour customer service and guaranteed shipment
of more than 10,000 strategic parts within 24 hours.
o NEW MANAGEMENT SYSTEM. Direct reporting to the CEO has been cut
in half from 22 to 11 executives, initiating AMP's company-wide
structural transformation.
TIMELINESS
AMP's Profit Improvement Plan is in place and already working.
AMP is actively pursuing ways to accelerate the benefits of its Plan
and exploring options to INCREASE VALUE FURTHER IN THE NEARER TERM.
Because we are a NEW AMP, we are a SIGNIFICANTLY MORE VALUABLE COMPANY
today and will be even more so tomorrow.
AlliedSignal's offer is a blatant attempt to capture the value of the NEW
AMP for AlliedSignal's OWN shareholders. AlliedSignal's acknowledged tactic
is to try to pressure your overwhelmingly independent Board by threatening
to graft its entire Board of Directors and most of its senior management
directly onto AMP's Board.
We fully recognize that the issue often comes down to one of value. The NEW
AMP is real. It has the leadership, the programs and the dedication to
deliver results -- FAST. The NEW AMP is a better value alternative than
AlliedSignal's opportunistic, low-ball bid.
THE CHOICE IS CLEAR. CHOOSE VALUE. DON'T TENDER. DON'T CONSENT.
September 15, 1998
IMPORTANT
IF YOU HAVE ANY QUESTIONS OR REQUIRE ANY ASSISTANCE IN WITHDRAWING
ANY SHARES YOU MAY HAVE TENDERED, PLEASE CALL:
INNISFREE
M&A INCORPORATED
CALL TOLL FREE: (888) 750-5834 O BANKS AND BROKERS CALL COLLECT: (212)750-5833
AMP and certain other persons named below may be deemed to be participants
in the solicitation of revocations of consents in response to
AlliedSignal's consent solicita-tion. The participants in this solicitation
may include the directors of AMP (Ralph D. DeNunzio, Barbara H. Franklin,
Joseph M. Hixon III, William J. Hudson, Jr., Joseph M. Magliochetti, Harold
A. McInnes, Jerome J. Meyer, John C. Morley, Robert Ripp, Paul G. Schloemer
and Takeo Shiina); the following executive officers of AMP: Robert Ripp
(Chairman and Chief Executive Officer), William J. Hudson (Vice Chairman),
James E. Marley (former Chairman), William S. Urkiel (Corporate Vice
President and Chief Financial Officer), Herbert M. Cole (Senior Vice
President for Operations), Juergen W. Gromer (Senior Vice President, Global
Industry Busi-nesses), Richard P. Clark (Divisional Vice President, Global
Wireless Products Group), Thomas DiClemente (Corporate Vice President and
President, Europe, Middle East, Africa), Rudolf Gassner (Corporate Vice
President and President, Global Personal Computer Division), Charles W.
Goonrey (Corporate Vice President and General Legal Counsel), John E.
Gurski (Corporate Vice President and Presi-dent, Global Value-Added
Operations and President, Global Operations Division), David F. Henschel
(Corporate Secretary), John H. Kegel (Corporate Vice President,
Asia/Pacific), Mark E. Lang (Corporate Controller), Philippe Lemaitre
(Corporate Vice President and Chief Technology Officer), Joseph C.
Overbaugh (Corporate Treasurer), Nazario Proietto (Corporate Vice President
and President, Global Consumer, Industrial and Power Technology Division);
and the following other members of management and employees of AMP: Richard
Skaare (Director, Corpo-rate Communication), Douglas Wilburne (Director,
Investor Relations), Mary Rakoczy (Manager, Shareholder Services), Dorothy
J. Hiller (Assistant Manager, Shareholder Services) and Melissa E. Witsil
(Communications Assistant). As of the date of this communication, none of
the foregoing participants individually benefi-cially own in excess of 1%
of AMP's common stock or in the aggregate in excess of 2% of AMP's common
stock.
AMP has retained Credit Suisse First Boston Corporation ("CSFB") and
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") to act as its
financial advisors in connection with the AlliedSignal Offer, for which
CSFB and DLJ will receive customary fees, as well as reimbursement of
reasonable out-of-pocket expenses. In addition, AMP has agreed to indemnify
CSFB, DLJ and certain related persons against certain liabilities,
including certain liabilities under the federal securities laws, arising
out of their engagement. CSFB and DLJ are investment banking firms that
provide a full range of financial services for institutional and individual
clients. Neither CSFB nor DLJ admits that it or any of its directors,
officers or employees is a "participant" as defined in Schedule 14A
promulgated under the Securities Ex-change Act of 1934, as amended, in the
solicitation, or that Schedule 14A requires the disclosure of certain
information concerning either CSFB or DLJ. In connection with CSFB's role
as financial advisor to AMP, CSFB and the following investment banking
employees of CSFB may communicate in person, by telephone or otherwise with
a limited number of institutions, brokers or other persons who are
stockholders of AMP: Alan Howard, Steven Koch, Scott Lindsay, and Lawrence
Hamdan. In connection with DLJ's role as financial advisor to AMP, DLJ and
the following investment banking employees of DLJ may communicate in
person, by telephone or otherwise with a limited number of institutions,
brokers or other persons who are stockholders of AMP: Douglas V. Brown and
Herald L. Ritch. In the normal course of its business, each of CSFB and DLJ
regularly buys and sells securities issued by AMP for its own account and
for the accounts of its customers, which transactions may result in CSFB,
DLJ or the associates of either of them having a net A"long" or net "short"
position in AMP securities, or option contracts or other derivatives in or
relating to such securities. As of September 1, 1998, DLJ held no shares of
AMP common stock for its own account and CSFB had a net long position of
118,566 shares of AMP common stock.
This press release contains certain "forward-looking" statements which AMP
believes are within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. The safe
harbors intended to be created thereby are not available to statements made
in connection with a tender offer and AMP is not aware of any judicial
determination as to the applicability of such safe harbor to
forward-looking statements made in proxy solicitation materials when there
is a simultaneous tender offer. However, shareholders should be aware that
any such forward-looking statements should be considered as subject to the
risks and uncertainties that exist in AMP's operations and business
environment which could render actual outcomes and results materially
different than predicted. For a description of some of the factors or
uncertainties which could cause actual results to differ, reference is made
to the section entitled "Cautionary Statements for Purposes of the 'Safe
Harbor'" in AMP's Annual Report on Form 10-K for the year ended December
31, 1997. In addition, the realization of the benefits anticipated from the
strategic initiatives will be dependent, in part, on management's ability
to execute its business plans and to motivate properly the AMP employees,
whose attention may have been distracted by AlliedSignal's tender offer and
whose numbers will have been reduced as a result of these initiatives.
Exhibit 48
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
- ---------------------------------------x
ALLIEDSIGNAL INC., :
a Delaware Corporation, :
P.O. Box 3000 :
Morristown, NJ 07962-2496 :
Plaintiff, :
-against- : C.A. No. 98-CV-4058
AMP INCORPORATED, :
a Pennsylvania Corporation, :
470 Friendship Road :
Harrisburg, PA 17111 :
Defendant. :
:
- ---------------------------------------x
MOTION OF PLAINTIFF ALLIEDSIGNAL INC. FOR SUMMARY JUDGMENT
AND FOR AN IMMEDIATE DECLARATORY JUDGMENT
AND PRELIMINARY INJUNCTION
Pursuant to Federal Rule of Civil Procedure 56, Federal Rule of
Civil Procedure 65 and the Declaratory Judgment Act, 28 U.S.C. ss. 2201(a),
plaintiff AlliedSignal Inc. ("AlliedSignal") hereby moves for an order for
summary judgment and for immediate declaratory judgment declaring that the
Nonredemption Provision of the Shareholder Rights Plan of defendant AMP
Incorporated ("AMP") is invalid under Pennsylvania law, or in the
alternative, a preliminary injunction enjoining AMP from enforcing, giving
effect to, or recognizing the effect of the Nonredemption Provision.
Plaintiff AlliedSignal also moves for a preliminary injunction
enjoining AMP from, directly or indirectly, 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 AlliedSignal's tender
offers and the proposals in AlliedSignal's Consent Solicitation, or taking
any other action to manipulate the corporate machinery or thwart or
interfere with AlliedSignal's tender offers or Consent Solicitation,
including, among other things, (i) amending its bylaws or Rights Agreement
in any way to impede the effective exercise of the shareholder franchise;
or (ii) utilizing the delay caused by AMP's fixing of the October 15 Record
Date to interfere with the AMP shareholders' right to vote on matters
presented by AlliedSignal's Consent Solicitation.
Grounds in support of the motion are set forth in the
accompanying memorandum.
Respectfully submitted,
/s/ Marc P. Cherno
------------------------------
Marc P. Cherno
Alexander R. Sussman
Barry G. Sher
Thea A. Winarsky
FRIED, FRANK, HARRIS,
SHRIVER & JACOBSON
(A Partnership Including Professional
Corporations)
One New York Plaza
New York, New York 10004-1980
(212) 859-8000
and
/s/ Mary A. McLaughlin
------------------------------
Mary A. McLaughlin
George G. Gordon
DECHERT, PRICE & RHOADS
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
(215) 994-4000
Attorneys for Plaintiff
Dated: September 14, 1998
CERTIFICATE OF SERVICE
I hereby certify that I caused this day the foregoing Motion
for Summary Judgment and for an immediate Declaratory Judgment and
Preliminary Injunction to be served on the following by hand delivery:
Jon A. Baughman
PEPPER HAMILTON, LLP
3000 Two Logan Sq.
18th & Arch Streets
Philadelphia, PA 19103-2799
John G. Harkins, Jr.
HARKINS CUNNINGHAM
1800 One Commerce Sq.
2005 Market St.
Philadelphia, PA 19103-7042
Stuart H. Savett
SAVETT FRUTKIN POSDELL & RYAN, P.C.
325 Chestnut Street, Ste 700
Philadelphia, PA 19106-2614
/s/ Heather A. Hoyt
--------------------
Dated: September 14, 1998 Heather A. Hoyt
EXHIBIT 49
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
- - - - - - - - - - - - - - - - - - - - - - - - -x
ALLIEDSIGNAL INC., :
a Delaware Corporation :
P.O. Box 3000 :
Morristown, NJ 07962-2496 :
:
Plaintiff, : C.A. No. 98-CV-4058
:
-against- :
:
AMP INCORPORATED, :
a Pennsylvania Corporation, :
470 Friendship Road :
Harrisburg, PA 17111 :
:
Defendant. :
- - - - - - - - - - - - - - - - - - - - - - - - -x
VERIFIED AMENDED COMPLAINT FOR
DECLARATORY AND INJUNCTIVE RELIEF
Plaintiff AlliedSignal Inc. ("AlliedSignal"), by its
undersigned attorneys, as and for its Verified Amended Complaint, alleges
upon knowledge with respect to itself and its own acts, and upon
information and belief as to all other matters, as follows:
Nature of the Action
1. This action arises out of AMP Incorporated's ("AMP's")
illegal attempt to thwart the fundamental right of AMP shareholders --
including AlliedSignal -- to vote to change the leadership and direction of
AMP, the corporation they own.
2. In contravention of Pennsylvania and federal law, and its
own governing articles of incorporation ("Articles") and bylaws ("Bylaws"),
AMP has attempted to nullify the shareholder voting process by taking
actions to delay and interfere with the ability of AMP's shareholders to
cast a meaningful vote in AlliedSignal's current consent solicitation and
to accept the benefits of the tender offer and merger proposed by
AlliedSignal.
3. In particular, AMP has attempted to effect a fundamental
change in corporate governance in the midst of a takeover contest, by
creating a new form of defensive shareholder rights plan, or "poison pill,"
that appears to be unique in the history of American corporations. This
poison pill deprives AMP shareholders of a voice in important economic
decisions by (a) making any merger or tender offer that is not approved by
AMP's current board of directors ("Board") impossible to complete, even if
supported by a majority of shareholders, and (b) preventing any directors
- -- old or newly elected to AMP's Board by the shareholders -- from
redeeming the poison pill once a new majority of directors is elected to
the Board (the "Nonredemption Provision").
4. In order to protect the fundamental voting and corporate
governance rights of AMP's shareholders, AlliedSignal seeks relief: (a)
invalidating the Nonredemption Provision of AMP's poison pill; and (b)
preventing AMP from manipulating the corporate machinery or taking other
steps to delay and obstruct the consent solicitation.
Parties
5. Plaintiff AlliedSignal is a Delaware corporation with its
principal executive offices in Morristown, New Jersey. AlliedSignal is an
advanced technology and manufacturing company with worldwide operations in
the aerospace, automotive and engineered materials businesses. AlliedSignal
is the beneficial and record owner of 100 shares of AMP common stock.
6. Defendant AMP is a Pennsylvania corporation with its
principal executive offices in Harrisburg, Pennsylvania. AMP designs,
manufactures and markets electronic, electrical and electro-optic
connection devices, interconnection systems and connector-intensive
assemblies.
Jurisdiction and Venue
7. This Court has jurisdiction over this action pursuant to
28 U.S.C. ss.ss. 1331, 1332 and 1367. The amount in controversy is in
excess of $75,000.
8. Venue is proper in this District under 28 U.S.C.ss.1391
(b) and (c).
AlliedSignal and its Proposal
9. AlliedSignal wishes to acquire AMP because it believes
that a business combination with AMP will provide an attractive business
opportunity for both AlliedSignal and AMP.
10. Accordingly, after AMP rejected AlliedSignal's overtures
for a negotiated transaction, on August 4, 1998, AlliedSignal announced
that it would commence a tender offer for all of the outstanding shares of
the common stock of defendant AMP at $44.50 in cash per share (the "Tender
Offer" or the "Offer"), pursuant to federal securities laws. AlliedSignal's
proposed $44.50 tender offer price represented a premium of more than 55%
over the trading price of AMP common stock immediately prior to the
announcement of the Offer. AlliedSignal would acquire, through a
second-step merger for the same $44.50 per share in cash (the "Merger"),
any shares of AMP that are not tendered.
11. AlliedSignal's Tender Offer gives AMP shareholders the
opportunity to accept the Offer if they determine that it is in their best
interests as the owners of AMP, and, alternatively, to reject the Offer if
they do not believe it is in their best interests.
12. On September 14, 1998, AlliedSignal amended its Offer
(the "Amended Offer") to permit it to acquire for $44.50 per share in cash
40 million AMP shares, approximately the number of shares it can acquire
without triggering AMP's poison pill. Following completion of the Amended
Offer, AlliedSignal intends to proceed with a new tender offer for all
remaining AMP shares outstanding at the $44.50 per share cash price, with
the intention of then consummating the proposed Merger.
13. AlliedSignal believes that a combined company under
AlliedSignal's strong management will permit AlliedSignal to offer a
broader range of products to a more diverse customer base in a wider
variety of markets than either company could achieve alone. Lawrence
Bossidy, AlliedSignal's chief executive officer since 1991, is a highly
respected corporate manager who, together with his management team, has
produced an almost fourfold increase in AlliedSignal's stock price since
1991. Mr. Bossidy was named "Chief Executive of the Year" in Chief
Executive magazine's July/August, 1998 issue, and Fortune magazine recently
named AlliedSignal, under Mr. Bossidy's leadership, to its lists of the
"Most Admired Companies" and "100 Best Companies To Work For." AlliedSignal
believes that Mr. Bossidy would provide similarly strong leadership to a
combined company.
14. For all of AMP's shareholders, a transaction with
AlliedSignal will provide the opportunity to be rewarded today for the
future value AlliedSignal believes it can create if it merges with AMP.
15. As of Midnight on September 11, 1998, the expiration
date for the Tender Offer, shareholders owning approximately 157 million
shares of AMP common stock, or approximately 72% of AMP's total outstanding
shares, had tendered their shares to AlliedSignal. These figures are
exceptionally high for a hostile tender offer for the shares of a publicly
held company and demonstrate the overwhelming support of AMP's shareholders
for the proposed business combination with AlliedSignal.
The Shareholder Franchise and Limitations on Directors
16. Pennsylvania statutory law and AMP's Articles and Bylaws
explicitly vest in AMP's shareholders, not AMP's Board, the ultimate
authority to decide whether to accept AlliedSignal's Offer and whether to
permit a merger with AlliedSignal. Moreover, federal law mandates
disclosure so that shareholders can make an informed choice. Thus,
corporate governance rules under Pennsylvania law and the federal
securities laws together are designed to let informed shareholders decide
the future of the corporations they own.
17. Shareholder voting rights are fundamental under
Pennsylvania law. Pennsylvania's Business Corporations Law ("PBCL") Section
1758(a) provides in pertinent part that "every shareholder of a business
corporation shall be entitled to one vote for every share standing in his
name on the books of the corporation."
18. Section 1.10(a) of AMP's Bylaws similarly provides that
each shareholder shall be entitled to one vote for each outstanding share
of AMP.
19. Pennsylvania statutory law sanctifies a shareholder's
right to vote because, ultimately, the shareholders, as the corporation's
owners, have the right and ability to direct the actions of the corporation
through that vote. PBCL Section 1757(a), for example, provides that,
"[e]xcept as otherwise provided in [the PBCL] or in a bylaw adopted by the
shareholders, whenever any corporate action is to be taken by vote of the
shareholders of a business corporation, it shall be authorized upon
receiving the affirmative vote of a majority of the votes cast by all
shareholders entitled to vote thereon. . . ." Section 1.10(b) of AMP's
Bylaws embodies this majority-vote principle.
20. The PBCL is structured to recognize and effectuate
Pennsylva-nia's underlying goal of preserving for shareholders the ultimate
authority to control the affairs of the corporations they own. For example,
PBCL Section 1521(c) provides that shareholders may adopt bylaws setting
forth "provisions regulating or restricting the exercise of corporate
powers."
21. Shareholders of Pennsylvania corporations are also
entitled to use their voting power to effect corporate action by written
consent. PBCL Section 2524(a) provides that, if a registered corporation's
articles of incorporation permit it, corporate "action may be authorized by
the shareholders [of such corporation] without a meeting by less than
unanimous written consent."
22. Under PBCL Sections 1504(c), 1766(b) and 2524(a), if
permitted by a corporation's articles or bylaws, the corporation's
shareholders may take "any action" permitted to be taken at a shareholders'
meeting "upon the written consent of shareholders who would have been
entitled to cast the minimum number of votes that would be necessary to
authorize the action at a meeting at which all shareholders entitled to
vote thereon were present and voting." PBCL ss. 1766(b).
23. Article IX of AMP's Articles authorizes shareholder
action by written consent.
24. One of the most basic rights held by shareholders is the
right to elect a corporation's directors. PBCL Section 1725 and Section
1.11 of AMP's bylaws vest the right to elect directors in AMP's
shareholders.
25. The directors serve and execute their powers pursuant to
the will of the shareholders. PBCL Section 1721 provides that "a bylaw
adopted by the shareholders" can modify, limit, or even eliminate the
authority of a board of directors to exercise corporate powers.
26. Article VII of AMP's Articles explicitly provides that:
"Except as otherwise provided . . .by By-Laws . . . , all corporate powers
may be exercised by the Board of Directors. . . ."
27. The federal securities laws, by providing for informed
voting and tendering decisions by shareholders, also recognize that
shareholders have the ultimate choice in contests for corporate control and
in deciding whether to accept or reject proposed corporate transactions.
28. All these state and federal laws are designed to give
shareholders the right to make an informed decision concerning the future
of the corporations which they own, in an environment of full disclosure.
AMP's Efforts to Frustrate Shareholder Will
29. Despite Pennsylvania's clear mandate in favor of
shareholder choice and corporate flexibility, and the policies underlying
the federal securities laws, AMP has taken illegal and manipulative actions
designed to frustrate the will of its shareholders.
30. First and foremost, AMP has a shareholder rights plan
commonly known as a "poison pill," which was adopted by the AMP Board in
1989 without shareholder approval. On August 20, 1998, AMP amended that
poison pill solely in response to AlliedSignal's Offer (as amended, the
"Poison Pill"). AMP's Poison Pill, if enforceable, makes it economically
prohibitive to acquire control of AMP in a transaction opposed by the
current AMP Board, even if the requisite majority of AMP shareholders and a
majority of a future Board favor the acquisition. The Poison Pill thus
effectively frustrates and prevents an effort by AlliedSignal or any other
hostile bidder to place into office a new majority of directors supported
by the requisite majority of AMP shareholders.
31. AMP's Poison Pill is designed to work as follows: in the
event that any person acquires more than 20% of AMP's stock, all other AMP
shareholders have the right to buy additional shares at half-price, causing
a massive dilution of the value of the holdings of the unwanted acquiror
(the "Flip-In Provision"). In addition, if AMP subsequently is acquired in
a merger, all AMP shareholders other than the acquiring corporation have
the right to buy shares of the acquiring corporation at a bargain price,
subjecting that corporation to a massive discount sale of its own stock
(the "Flip-Over Provision").
32. One function of a poison pill is to furnish a board of
directors with bargaining power to negotiate with a prospective acquiror.
To facilitate those negotiations, a board typically retains the right to
"redeem" -- or eliminate the effect of -- a poison pill, by paying rights
holders a nominal value. This permits directors on a continuing and
case-by-case basis to evaluate corporate opportunities according to their
fiduciary duties.
33. In most poison pills, a change in the composition of a
corporation's board, standing by itself, has no effect on a poison pill.
This feature protects shareholder democracy while giving any board --
whether long-incumbent or newly elected -- maximum flexibility to accept a
transaction that is in the best interests of the corporation. Indeed, a
critical aspect of the judicial acceptance of poison pills has been the
basic precept that they would not inhibit proxy contests, including those
involving a change of control of a company.
34. Until August 20, 1998, AMP's Poison Pill contained a
particularly draconian feature not typically found in poison pills -- a
so-called "Dead Hand" provision. Under the Dead Hand provision, if there
were a change in a majority of AMP's Directors, the Poison Pill would have
been redeemable only by a majority of the "continuing directors" - i.e.,
the present directors of AMP or their hand-picked successors. The Dead Hand
provision thus eliminated the authority of new directors, who would have
been elected by a majority of shareholders, to redeem the Poison Pill. For
these very reasons, comparable Dead Hand provisions have been held illegal
under the corporate law of Delaware and New York.
35. In order to avoid the impact of AMP's Dead Hand Poison
Pill, AlliedSignal commenced a consent solicitation (the "Consent
Solicitation") to obtain the consent of AMP's shareholders for certain
proposals.
36. On August 12, 1998, AlliedSignal filed a preliminary
consent statement (the "Consent Solicitation Materials") with the
Securities and Exchange Commission (the "SEC"), publicly disclosing the
precise terms of proposals upon which AlliedSignal intended to seek
shareholder approval.
37. AlliedSignal's initial consent proposals provided AMP's
shareholders with the opportunity to elect to AMP's Board AlliedSignal
nominees who, subject to their fiduciary duties, would support a business
combination with AlliedSignal. These new directors could have persuaded a
majority of AMP's continuing directors that the merits of AlliedSignal's
Offer and Merger proposal warranted redemption of the Dead Hand Poison
Pill.
The "Nonredemption" Amendment of AMP's Poison Pill
38. In light of AlliedSignal's Offer and Consent
Solicitation, the AMP Board concluded that its Dead Hand Poison Pill might
not prove draconian enough to thwart the will of its shareholders. On
August 20, 1998, AMP therefore amended its Poison Pill to include an
unprecedented, outrageous and self-destructive feature.
39. In total disregard of shareholder voting rights
generally, and of the shareholder voting rights contained in its own
Articles and Bylaws, AMP's Board amended its Poison Pill by eliminating the
Dead Hand provision and replacing it with the Nonredemption Provision. This
action by AMP's Board made the Poison Pill nonredeemable by any directors,
including "continuing" directors and even disinterested directors, if a new
majority of directors is elected to the Board. Once this Nonredemption
Provision is triggered, no tender offer or merger can be completed until
November 6, 1999, the expiration date of the Poison Pill.
40. The AMP Board also changed the Poison Pill to make it
nonamendable as soon as it becomes nonredeemable, which makes the
Nonredemption Provision, once triggered, irreversible.
41. Moreover, the AMP Board changed the definition of a
"Qualifying Offer" -- i.e., an offer that, because it is favored by the
Board, does not trigger the Poison Pill -- so that once the Pill is
nonredeemable, no offer can be deemed a Qualifying Offer.
42. Since AlliedSignal's Offer and Merger proposal would be
of no effect without, at a minimum, support of the holders of a majority of
AMP's shares, the AMP Board could have had no motive to take these actions
other than to strip the AMP shareholders of their right to elect new
directors who would act in the shareholders' interests and, subject to
their fiduciary duties, would support the Offer and Merger.
43. The Nonredemption Provision purports to prevent newly
elected directors -- whether elected through the Consent Solicitation or at
AMP's next annual meeting -- from redeeming the Poison Pill, even though
that is the very purpose for their election by the shareholders. This Board
action was designed to deny AMP's shareholders the opportunity to decide
for themselves whether to approve a change in control or sale of the
corporation.
44. The AMP Board's Nonredemption Provision also removes
from a newly constituted board of directors any ability to approve
extraordinary transactions -- such as a merger or sale of assets -- until
the Poison Pill expires, no matter how beneficial those transactions may be
to AMP and its constituents. Unilateral removal of this authority,
responsibility and discretion is an illegal encroachment on the power of
the board of directors as set forth under PBCL Sections 1502(18), 1525,
1712, 1715, and 1721.
AlliedSignal's Consent Solicitation
45. On September 14, 1998, AlliedSignal amended its Consent
Solicitation to include a proposal pursuant to PBCL Section 1721 and
Article VII of AMP's Articles (the "Shareholder Rights Proposal") which, if
approved by AMP's shareholders, will remove from AMP's Board all powers
with respect to AMP's Rights Agreement, and will vest those powers in a
group of agents (the "Rights Agreement Managing Agents").
46. The Rights Agreement Managing Agents will cause the
Rights Agreement to be amended to make it inapplicable to (i) any tender or
exchange offer (including AlliedSignal's Tender Offer), if as a result of
completion of the offer, the offeror would own a majority of outstanding
shares of AMP common stock, and (ii) any merger that either does not
require shareholder approval or is approved by the requisite vote of AMP
shareholders.
AMP's Other Manipulations of the Corporate Machinery
47. In addition to the amendment of its Poison Pill, AMP's
Board initiated several other entrenchment maneuvers.
AMP's Delay of the Record Date
48. On August 11, 1998, AlliedSignal formally requested in
writing that AMP fix August 31, 1998 as the record date for the Consent
Solicitation. On August 21, 1998, the AMP Board fixed the record date for
the AlliedSignal Consent Solicitation, not on August 31, 1998, but
forty-five days later, on October 15, 1998 (the "October 15 Record Date").
49. The purported grounds for the Board's fixing the October
15 Record Date, as publicly stated by the AMP Board, were (a) to ensure
that "adequate information is available" to AMP's shareholders, and (b) to
give AMP "sufficient time to comply with the broker search card
requirements of Rule 14a-13 under the Securities Exchange Act of 1934, as
amended" (the "Search Provision"). Neither of those purported
justifications warranted putting off the record date beyond August 31, let
alone delaying it until October 15.
50. There was no basis for the AMP Board's stated concerns
because the requested August 31 record date was suitable to provide
adequate information to AMP's shareholders. Moreover, the SEC proxy rules,
which govern the Consent Solicitation, are designed to ensure that AMP's
shareholders would have all material information to make an informed
decision before they gave their written consents. The AMP shareholders will
not be pressured or hurried to make a decision; the decision can be made
whenever they believe themselves properly knowledgeable.
51. In fact, on August 13, even before the AMP Board fixed
the record date, AMP filed with the SEC a preliminary Consent Revocation
Statement, pursuant to Section 14(a) of the Exchange Act, and the
information was publicized and made available to AMP shareholders. That
filing, which was amended on August 26, 1998 (as amended, "the preliminary
Schedule 14A"), was made for the purpose of commencing a solicitation
campaign to obtain consent revocations from AMP shareholders and thereby
seek to block AlliedSignal's Consent Solicitation.
52. Similarly, the notice period contemplated by the Search
Provision was effectively satisfied by AlliedSignal's request for the
fixing of an August 31 record date, since the request was made and widely
publicized on August 11, twenty days in advance of AlliedSignal's requested
record date.
53. AMP's fixing of the October 15 Record Date was arbitrary
and unnecessary for the orderly functioning of the consent process.
54. Nevertheless, AlliedSignal agreed not to contest the
October 15 Record Date in a letter agreement, dated September 4, 1998,
which provided for notice to be given by AMP before it took certain
actions.
AMP's Frivolous Lawsuit Against AlliedSignal
55. On August 21, 1998, AMP filed a complaint against
AlliedSignal, alleging that if "the seventeen AlliedSignal nominees to
AMP's Board were elected, they could not fulfill their fiduciary duties
both to AlliedSignal and its shareholders and to AMP" because "the
AlliedSignal officers and directors have already determined that AMP should
be combined with AlliedSignal . . ." AMP further alleges in its complaint
that "[w]hile committed to this course of action on behalf of AlliedSignal,
the AlliedSignal nominees could not fully and completely discharge their
fiduciary duty to AMP."
56. AMP's allegations are specious as a matter of law.
First, Pennsylvania law safeguards the right of shareholders to elect
directors of their own choosing, provided that such directors meet the
minimal qualifications set forth in the PBCL and AMP's Bylaws, as do all of
AlliedSignal's nominees. Nothing in Pennsylvania law or AMP's Articles or
Bylaws remotely suggests that the shareholders' right to elect the
directors of the corporation they own does not apply to the election of a
director nominee who may have an outside interest in a proposed transaction
and/or has publicly taken a position in support of a proposed transaction
prior to the election.
57. Second, under PBCL Section 1728(a)(2) and Section 2.12
of AMP's Bylaws, "Interested Directors" are clearly permitted to submit a
proposed transaction to shareholders for approval. So long as the
shareholders have the right to decide whether a transaction is in their
best interests, Pennsylvania laws permit its adoption by Interested
Directors.
58. Thus, PBCL Section 1728(a)(2) permits a transaction
between AMP and a second corporation, like AlliedSignal, "in which one or
more of its directors or officers are directors or officers or have a
financial or other interest" (an "Interested Director"'), as long as the
"material facts as to [the Interested Director's] relationship or interest
and as to the contract or transaction are disclosed or are known to the
shareholders entitled to vote thereon and the contract or transaction is
specifically approved in good faith by vote of those shareholders" (the
"Interested Director Statute"). Section 2.12 of AMP's Bylaws substantially
mirrors the provisions of the Interested Director Statute.
59. Third, unless the merger partner owns 80% or more of the
outstanding AMP shares, any merger must be approved by holders of
two-thirds of the outstanding AMP shares in accordance with Article X of
the AMP charter; this is even greater than the majority vote required under
Section 1924 of the PBCL. Moreover, if a proposed merger is consummated
involving all or part cash consideration, dissenters' rights would be
provided in accordance with Section 1930(a) of the PBCL.
60. Finally, in any event, there is no basis whatsoever for
suggesting that the nominees, who are persons of outstanding abilities,
experience and integrity, will not conduct themselves in full compliance
with their fiduciary duties to AMP. Nor will consideration of any of
AlliedSignal's proposals prevent an AMP director -- new or old -- from
acting in a manner consistent with his or her fiduciary duty.
61. In a separate claim for relief, AMP alleges in its
complaint that AlliedSignal has violated its disclosure obligations under
Section 14 of the Securities Exchange Act and the rules adopted thereunder
because AlliedSignal failed to disclose that its consent solicitation is
(allegedly) unlawful. This disclosure claim is equally frivolous. It is
well-established law that an entity is under no obligation to characterize
its consent solicitation proposals as unlawful. This is particularly true
where, as here, AlliedSignal has fully disclosed the underlying facts
giving rise to the proposals' alleged unlawfulness -- the nominees'
affiliation with AlliedSignal and their position with respect to the Tender
Offer.
AMP's Schedule 14D-9 and Public Statements
62. On August 21, 1998, AMP announced that it opposes the
Tender Offer and Merger, and filed with the SEC a Schedule 14D-9, which has
since been amended (the "Schedule 14D-9"), describing the AMP Board's
opposition to AlliedSignal's Tender Offer.
63. AMP's Schedule 14D-9 states that AlliedSignal's Tender
Offer is "not in the best interests of AMP and its relevant constituencies"
because AMP's "current strategic initiatives and business plans offer the
potential for greater benefits for AMP's various constituencies, including
its shareholders." AMP's so-called current Restructuring and AMP's
"initiatives" and "business plans," however, are merely the latest
iteration of AMP management's past unsuccessful efforts to improve AMP's
operations -- efforts which have done nothing to improve the value of AMP.
Indeed, AMP acknowledges that, prior to AlliedSignal's announcement of the
Tender Offer, AMP's share price was the lowest it has been in twelve years,
despite the prior announcement of its restructuring plan.
64. AMP's Schedule 14D-9 also describes the AMP Board's
"belief that [AMP's] new management team is well suited to implement the
profit improvement program" it allegedly has instituted. But AMP's
purported "new management" consists of the very same individuals who have
attempted, without success, to improve AMP's operations over the past
several years.
65. AMP apparently has no intention of ceasing its campaign
to keep control of AMP in the hands of current management despite the will
of AMP's shareholders. AMP's Chairman Robert Ripp was reported in a Wall
Street Journal article, dated September 11, 1998, as stating that, even if
75% of AMP's shares are tendered, he still plans to fight AlliedSignal's
Offer until AMP's Poison Pill expires in November 1999.
Risk of Irreparable Harm
66. Both the proposed Offer and the proposed Merger will
afford enormous benefits to AlliedSignal and AMP shareholders.
67. Consummating the Merger with AMP will give AlliedSignal
an important new business segment that will complement its current
businesses. AlliedSignal will be irreparably harmed if, because of the AMP
Board's actions, it is not permitted to complete its Tender Offer and
Merger within a reasonable period of time.
68. AMP's conduct effectively disenfranchises AMP's
shareholders by depriving them of the ability to control the affairs of
their corporation and to obtain desired representation on AMP's Board.
69. Through the actions described above, AMP has attempted
to deny shareholders the right to exercise their franchise by electing
directors who can remove the critical obstacle -- the Poison Pill -- to
consummation of the Offer and the proposed Merger. Furthermore, the
uncertainties created by AMP's actions in adopting a nonredeemable poison
pill adversely affect the consent process, since shareholders do not know
what actions AlliedSignal may take to implement the proposed Merger, the
timing of the Merger, or whether AlliedSignal would withdraw the Offer and
proposed Merger if the Poison Pill were not defused. AMP's interference
with the shareholder franchise will cause shareholders irreparable harm.
70. Moreover, while interference with shareholder voting
rights under any circumstances will cause shareholders irreparable harm,
the right to vote in favor of, or against, a fundamental corporate change
like AlliedSignal's Merger proposal, is one of the quintessential issues
for which voting rights are intended to be protected.
71. The Tender Offer and Merger also provide AMP's
shareholders the opportunity to realize a more than 55% premium for their
AMP stock based on AMP's market price immediately prior to the announcement
of the Offer on August 4, 1998. Presumably, AlliedSignal's Offer represents
an even greater premium value today in view of the substantial stock market
decline since that date. AMP's shareholders will lose the opportunity
presented by the Offer and proposed Merger, if the AMP Board of Directors
is permitted to frustrate the rights of AMP shareholders.
First Claim for Relief
(Declaratory Judgment and Injunctive Relief
with Respect to Illegal Nonredemption Provision of AMP's Poison Pill)
72. Plaintiff repeats and realleges the allegations
contained in each of the preceding paragraphs as if fully set forth herein.
73. The Nonredemption Provision -- which effectively strips
duly elected directors of the ability to redeem the Poison Pill --
undermines the mandate embedded in Pennsylvania law, including PBCL Section
1725, that (a) only those directors validly elected by shareholders are
entitled to manage the corporation; and (b) once directors are elected,
they cannot be prevented from acting to manage the corporation.
74. By denying the Board any ability, "following a majority
change of disinterested directors," to redeem the Poison Pill, the
Nonredemption Provision also violates Section 1.11 of AMP's Bylaws, which
provides for the election of AMP directors by AMP's shareholders, and
Section 2.1 of AMP's Bylaws, which provides that directors duly elected by
the shareholders have the authority to manage AMP's business and affairs.
75. The Nonredemption Provision also violates PBCL Section
1721, which requires that, unless otherwise provided by statute or in a
bylaw adopted by the shareholders, all powers vested in a corporation
"shall be exercised" by, or at the direction of, a corporation's directors.
One such power expressly vested in the corporation under PBCL ss. 1502(18),
is the power to "accept, reject, respond to, or take no action in respect
of an actual or potential . . . tender offer." Since the shareholders of
AMP have not (as yet) adopted a bylaw restricting their directors' ability
to exercise this power, AMP's Board cannot by itself so limit the
discretion of future directors through adoption of the Nonredemption
Provision.
76. The Nonredemption Provision is illegal under PBCL
Sections 1525, 1712 and 1715, because it restricts the Board from redeeming
the Poison Pill even if that is required by the Board members' fiduciary
duties.
77. Shareholders have fundamental voting rights that cannot
be contravened by a corporation's board of directors. In an election
contest, the adoption of a nonredeemable poison pill like AMP's is a
patently unreasonable and disproportionate defensive measure, because it is
designed to eradicate the AMP shareholders' rights to receive tender offers
and wage proxy contests and consent solicitations to replace the AMP Board.
And, because the Nonredemption Provision is specifically intended to take
effect when shareholders have voted or consented to a change in control of
the Board, it is inherently suspect as an entrenchment mechanism of the
current AMP Board and AMP management.
78. The Nonredemption Provision thus purposefully interferes
with the shareholder voting franchise without any reasonable justification.
79. In violating the PBCL and AMP's Bylaws, the adoption of
the Nonredemption Provision exceeds the powers granted to the corporation
and its directors under PBCL Section 1502. This act is, therefore, ultra
vires and of no effect.
80. AMP's adoption of the Nonredemption Provision also
constitutes fraud and/or fundamental unfairness on the part of AMP,
entitling AlliedSignal to declaratory relief, and to injunctive relief
invalidating the Nonredemption Provision under PBCL Section 1105.
Second Claim for Relief
(Declaratory Judgment
for Commerce Clause Violation)
81. Plaintiff repeats and realleges the allegations
contained in each of the preceding paragraphs as if fully set forth herein.
82. To the extent that the Nonredemption Provision and other
anti-takeover devices that preclude tender offers and consent solicitations
are permitted under Pennsylvania law, such law is unconstitutional under
the Commerce Clause because it impermissibly burdens interstate commerce
far in excess of local benefits.
83. The Nonredemption Provision renders futile the Consent
Solicitation and other contests for corporate control, because the
shareholders will be powerless to elect a board that is both willing and
able to accept an insurgent's bid. If Pennsylvania law is deemed to permit
the Nonredemption Provision, such law gives a Pennsylvania corporation's
pre-existing board of directors a de facto veto power over tender offers
and mergers, thwarts shareholder democracy and the rights of all AMP
shareholders located throughout the United States, and impermissibly
burdens interstate commerce.
84. To the extent the Nonredemption Provision is permissible
under Pennsylvania law, such law injures and will continue to injure
AlliedSignal and all AMP shareholders because it creates an absolute
barrier to the proposed Tender Offer and Merger, or any other similar
transaction proposed by anyone else, even if the holders of a majority --
or, indeed, all -- of AMP's shares support the proposed transaction.
Third Claim for Relief
(Declaratory Judgment
for Supremacy Clause Violation)
85. Plaintiff repeats and realleges the allegations
contained in each of the preceding paragraphs as if fully set forth herein.
86. To the extent that the Nonredemption Provision and other
antitakeover devices that preclude tender offers and consent solicitations
are permitted under Pennsylvania law, such law is preempted by the federal
securities laws and thereby violates the Supremacy Clause of the United
States Constitution. It frustrates the purposes and objectives of Congress
in enacting the Williams Act and proxy laws by: (a) giving intransigent
management the ability to defeat a noncoercive proposal without a vote by
shareholders; (b) impermissibly tilting the balance between management and
a potential acquiror in the context of a noncoercive proposal; and (c)
creating an absolute barrier to the right of AMP shareholders to exercise
their voting rights in favor of the proposed Tender Offer and Merger.
87. To the extent the Nonredemption Provision is permissible
under Pennsylvania law, such law injures and will continue to injure
AlliedSignal because it creates an absolute barrier to the proposed Tender
Offer and Merger, or any other similar transaction proposed by anyone else,
even if the holders of a majority of AMP's shares support the proposed
transaction.
Fourth Claim for Relief
(Declaratory Judgment and Injunctive Relief
for Record Date Abuse or Other Manipulation of AMP's Corporate Machinery)
88. Plaintiff repeats and realleges the allegations
contained in each of the preceding paragraphs as if fully set forth herein.
89. AMP should be enjoined from using the time prior to the
October 15 Record Date to take additional action that has the effect of
interfering with the rights of AMP's shareholders to vote on the Consent
Solicitation proposals.
90. In particular, AMP should be enjoined from: (a) amending
its Bylaws or Poison Pill in any way to impede the effective exercise of
the shareholder franchise; or (b) utilizing the delay caused by AMP's
fixing of the October 15 Record Date to interfere with the AMP
shareholders' right to vote on matters presented by AlliedSignal's Consent
Solicitation.
91. AlliedSignal has no adequate remedy at law.
WHEREFORE, plaintiff respectfully requests that this Court
enter judgment against defendant, as follows:
A. Declaring pursuant to the Declaratory Judgment Act, 28
U.S.C. ss. 2201(a) and Fed. R.C. P., Rule 57, that:
(a) the Nonredemption Provision is in violation of
Pennsylvania law; and
(b) to the extent Pennsylvania law authorizes the
Nonredemption Provision, such law (i) constitutes an impermissible burden
on interstate commerce in violation of the Commerce Clause of the United
States Constitution, and (ii) is preempted by the Williams Act and
therefore unconstitutional under the Supremacy Clause of the United States
Constitution.
B. Enjoining enforcement of the Nonredemption Provision of
AMP's Poison Pill.
C. Preliminarily and permanently enjoining the defendant,
its directors, officers, partners, employees, agents, subsidiaries and
affiliates, and all other persons acting in concert with or on behalf of
the defendant directly or indirectly, from 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 AlliedSignal's tender
offers and the proposals in AlliedSignal's Consent Solicitation, or taking
any other action to manipulate the corporate machinery or thwart or
interfere with AlliedSignal's tender offers or Consent Solicitation,
including, among other things, (i) amending its bylaws or Rights Agreement
in any way to impede the effective exercise of the shareholder franchise;
or (ii) utilizing the delay caused by AMP's fixing of the October 15 Record
Date to interfere with the AMP shareholders' right to vote on matters
presented by AlliedSignal's Consent Solicitation.
D. Granting compensatory damages for all incidental injuries
suffered as a result of defendant's unlawful conduct.
E. Awarding plaintiff the costs and disbursements of this
action, including attorney's fees.
F. Granting plaintiff such other and further relief as the
court deems just and proper.
/s/ Alexander R. Sussman
_____________________________
Marc P. Cherno
Alexander R. Sussman
Barry G. Sher
Thea A. Winarsky
Fried, Frank, Harris, Shriver &
Jacobson
One New York Plaza
New York, NY 10004
(212) 859-8000
and
/s/ Mary A. McLaughlin
_____________________________
Mary A. McLaughlin
George G. Gordon
Dechert, Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
(215) 994-4000
Attorneys for Plaintiff
DATED: September 14,1998
VERIFICATION
Pursuant to 28 U.S.C. ss. 1746, I, Peter M. Kreindler,
hereby verify under penalty of perjury that the allegations and averments
in the foregoing Verified Amended Complaint for Declaratory and Injunctive
Relief are, with respect to AlliedSignal and its own acts, true and correct
to my own knowledge, and as to all other matters, I believe them to be
true.
/s/ Peter M. Kreindler
_____________________________
Peter M. Kreindler, Esq.
Senior Vice President,
General Counsel and Secretary
AlliedSignal Inc.
Executed on September 14, 1998
CERTIFICATE OF SERVICE
I hereby certify that I caused this day the foregoing Motion
for Leave to File an Amended Complaint to be served on the following by
hand delivery:
Jon A. Baughman
PEPPER HAMILTON, LLP
3000 Two Logan Sq.
18th & Arch Streets
Philadelphia 19103-2799
John G. Harkins, Jr.
HARKINS CUNNINGHAM
1800 One Commerce Sq.
2005 Market St.
Philadelphia, PA 19103-7042
Stuart H. Savett
SAVETT FRUTKIN POSDELL & RYAN, P.C.
325 Chestnut Street, Ste. 700
Philadelphia, PA 19106-2614
/s/ Heather A. Hoyt
_______________________
Dated: September 14, 1998 Heather A. Hoyt
