AMP INC, SC 14D9, 1998-08-21

AMP INC
SC 14D9, 1998-08-21
ELECTRONIC CONNECTORS

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934

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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) 574-0100
(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

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ITEM 1. SECURITY AND SUBJECT COMPANY.

The name of the subject company is AMP Incorporated, a Pennsylvania
corporation ("AMP"), and the address of the principal executive offices of AMP
is P.O. Box 3608, Harrisburg, PA 17105-3608. The title of the class of equity
securities to which this statement relates is the 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.

ITEM 2. TENDER OFFER OF THE BIDDER.

This Schedule 14D-9 relates to a tender offer by PMA Acquisition
Corporation, a Delaware corporation (the "Purchaser") and wholly owned
subsidiary of AlliedSignal Inc., a Delaware corporation ("AlliedSignal"),
disclosed in a Tender Offer Statement on Schedule 14D-1, dated August 10, 1998
(the "Schedule 14D-1"), under which the Purchaser is offering to purchase all
Shares at a price of $44.50 per Share (the "Offer Price"), net to the seller
in cash, upon the terms and subject to the conditions set forth in the Offer
to Purchase, dated August 10, 1998, and the related Letter of Transmittal
(which, as amended from time to time, together constitute the "AlliedSignal
Offer"). None of AlliedSignal, the Purchaser or any of their affiliates are
affiliated with AMP and the AlliedSignal Offer was not solicited by AMP. As
set forth in the Schedule 14D-1, the principal executive offices of the
Purchaser and AlliedSignal are located at 101 Columbia Road, Morristown,
New Jersey 07692.

In the Offer to Purchase, AlliedSignal indicates that it may seek to solicit
consents to increase the size of the Board of Directors of AMP (the "Board")
and to elect such number of persons designated by it as would constitute a
majority of the members of the Board (the "Consent Solicitation"). THIS
SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 DOES NOT CONSTITUTE A
SOLICITATION OF CONSENTS OR PROXIES FOR USE AT ANY MEETING OF AMP'S
SHAREHOLDERS OR OTHERWISE OR OF REVOCATIONS OF CONSENTS OR PROXIES. ANY SUCH
SOLICITATION WHICH AMP MAY MAKE WILL BE MADE ONLY BY MEANS OF SEPARATE
PROXY/CONSENT MATERIALS COMPLYING WITH THE REQUIREMENTS OF SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER.

ITEM 3. IDENTITY AND BACKGROUND.

(a) The name and address of AMP, which is the person filing this Schedule
14D-9, are set forth in Item 1 above.

(b) Reference is made to the information contained under the captions
"Security Ownership of Directors"; "The Board Of Directors--Compensation," "--
Benefit Plans," and "--Retirement"; "Executive Compensation--Summary
Compensation Table," "--Option/SAR Grants in 1997," "--Retirement Benefits,"
and "--Security Ownership of Executive Officers"; "The Compensation and
Management Development Committee Report on Executive Compensation";
"Termination of Employment and Change of Control Arrangements"; and "Proposal
For Shareholder Approval of the AMP Incorporated 1998 Employee Stock Purchase
Plan" in AMP's Proxy Statement, dated March 16, 1998, relating to AMP's 1998
Annual Meeting of Shareholders . The relevant sections thereof are filed as
Exhibit 1 hereto and are incorporated herein by reference. The 1998 Employee
Stock Purchase Plan was approved by AMP's shareholders at the 1998 Annual
Meeting and became effective on July 1, 1998.

At meetings of the Compensation and Management Development Committee (the
"Compensation Committee") of the Board or of the entire Board held on the
dates set forth below, the Compensation Committee and/or the Board, in
connection with certain existing employee benefit plans and arrangements, took
the actions described below.
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Annual Equity Award Grants

On July 21, 1998, the Compensation Committee made its customary annual grant
of option and Performance Restricted Share awards under AMP's 1993 Long-Term
Equity Incentive Plan (the "1993 Plan"). Options to purchase an aggregate of
2,606,200 shares of Common Stock were granted (the "1998 Grant"), each of
which vests 100% at the end of three years, has a per share exercise price of
$30.375, and a ten year term. The vesting of each such option is subject to
acceleration in the event of a Change of Control of AMP (as defined in the
1993 Plan, a "Change of Control"). Of the options awarded in the 1998 Grant,
options to purchase an aggregate of 252,000 shares of Common Stock were
granted to AMP's executive officers. Messrs. Ripp and Gurski and Dr. Gromer
received grants of 41,100, 27,200 and 17,400 options, respectively. Neither
Mr. Hudson nor Mr. Marley received a 1998 Grant.

In addition to these options, certain of AMP's executive officers received a
contemporaneous grant of Performance Restricted Shares under the 1993 Plan. An
aggregate of 140,900 Performance Restricted Shares were granted to executive
officers of AMP. These shares are subject to a three year performance cycle
(ending December 31, 2000) and will vest if AMP achieves certain return on
equity and average annual earnings growth targets or if there is a Change of
Control during the performance cycle. Messrs. Ripp and Gurski and Dr. Gromer
received grants of 27,900, 18,500 and 11,900 Performance Restricted Shares,
respectively. Neither Mr. Hudson nor Mr. Marley received such a grant of
Performance Restricted Shares.

Management Succession

Effective as of August 20, 1998, the Board, upon the recommendation of a
Board committee regarding CEO succession, elected Mr. Robert Ripp to the Board
as its Chairman and to the position of Chief Executive Officer of AMP; elected
Mr. Herbert Cole to the position of Senior Vice President-Operations of AMP;
and elected Dr. Juergen Gromer as Senior Vice President-Global Industry
Businesses of AMP. Messrs. Hudson and Marley retired from their current
positions with AMP as of such date and Mr. Marley resigned from his position
on the Board. Mr. Hudson has been appointed as Vice Chairman through AMP's
1999 Annual Meeting of Shareholders, after which he will remain employed as
AMP's Former President and Chief Executive Officer through his normal
retirement date of June 1, 1999, whereupon he shall have the title of Retired
President and Chief Executive Officer through the end of his Chairmanship of
the National Association of Manufacturers in the Fall of 1999. Mr. Marley will
remain employed by AMP until his normal retirement date of August 1, 2000.

In connection with the assumption of his new positions with AMP, Mr. Ripp's
salary was increased to an annual rate of $600,000 and he was granted (i)
options under the 1993 Plan to purchase 60,000 shares of Common Stock at an
exercise price equal to $39 per share, the closing price of Common Stock on
August 20, 1998, which option will vest 100% after three years, and (ii) a
restricted stock award of 25,000 shares of Common Stock, vesting on August 1,
2006 (Mr. Ripp's normal retirement date) or at his earlier death, disability
or mutually agreed upon termination of employment. The vesting of the
restricted stock award described in the preceding sentence is not subject to
acceleration upon a Change of Control. The foregoing description of the
restricted stock grant to Mr. Ripp is qualified in its entirety by reference
to the Restricted Stock Agreement, a copy of which is filed as Exhibit 2
hereto and incorporated herein by reference. The Compensation Committee also
authorized an amendment to Mr. Ripp's Executive Severance Agreement (as
hereinafter defined) to provide for an increase in the severance multiplier
from 2 to 3 and to provide that the restricted stock award described above
would not be subject to the terms of Mr. Ripp's Executive Severance Agreement.
The foregoing description of the amendment of Mr. Ripp's Executive Severance
Agreement is qualified in its entirety by reference to the amendment, a copy
of which is filed as Exhibit 3 hereto and incorporated herein by reference.

Mr. Cole has previously elected to participate in AMP's Voluntary Early
Retirement Program (as more fully described below, the "VERP"). Pursuant to
the terms of the VERP, AMP has elected to require Mr. Cole to remain in the
service of AMP until the earlier of (a) January 1, 2001 and (b) the date of
any involuntary termination of employment, in order to receive benefits under
the VERP. Mr. Cole will continue to remain

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eligible for certain benefits under his Executive Severance Agreement,
according to the terms of such agreement, as modified by his election to
participate in the VERP.

Each of Messrs. Hudson and Marley will continue to be paid salary at the
current annual rate and will continue to receive existing employee benefits.
Mr. Hudson will also be entitled to receive office space (separate from the
executive management area) and support staff services through the end of his
Chairmanship of the National Association of Manufacturers in the Fall of 1999.
Further, AMP and each of Messrs. Hudson and Marley have agreed that each
executive's Executive Severance Agreement will remain in effect until the
executive's retirement date. Each executive has agreed not to claim "Good
Reason" (as defined in his agreement) to terminate his employment with AMP
prior to the occurrence of a Change of Control (as defined in his agreement).
AMP has agreed that if a Change of Control occurs prior to the Executive's
retirement date, such executive can terminate his employment with AMP between
the Change of Control date and his retirement date and such termination will
be treated as a "Good Reason" termination pursuant to the terms of his
agreement.

Voluntary Early Retirement Program

Employees of AMP (other than Messrs. Hudson and Marley) who will be 55 years
of age and who will have 10 years' service with AMP as of October 1, 1998 were
given the opportunity until August 15, 1998 to elect early retirement under
the VERP. Participants in the VERP receive, among other things, the following
benefits: (i) credit for an additional 3 years of service for purposes of
AMP's pension plans; (ii) calculation of retirement benefits using the
employee's final year's pay rate (and, under supplemental retirement plans,
the employee's final bonus); (iii) immediate commencement of retirement
benefits without actuarial reduction for early retirement and (iv) the right
to elect to take the value of their entire pension benefit, or the value of
the benefit which is attributable to the VERP enhancements, in a lump sum cash
payment. In addition, an employee participating in the VERP will be entitled
to continued medical benefits until his or her 65th birthday as if he or she
remained an active employee. Most participants in the VERP will be required to
retire as of October 1, 1998, but certain otherwise eligible employees (which
may include participants who are executive officers of AMP) will be required
to remain employed by AMP for a longer period of time in order to qualify for
VERP benefits. As noted above, AMP has required Mr. Cole to remain in
employment until the earlier of January 1, 2001 or an involuntary termination
of employment in order to qualify for VERP benefits.

Of the 5 executive officers of AMP who were eligible to participate in the
VERP, 3 elected to participate (the "Electing Executives"). The Executive
Severance Agreements to which each of the Electing Executives is a party will
continue in effect in accordance with their respective terms, except that the
Electing Executive will no longer be entitled to any termination-related
benefits should a Change of Control occur during the term of the agreement. As
a result of his election to participate in the VERP, at the time of his
retirement, an Electing Executive will forfeit the award of Performance
Restricted Shares made within the preceding 12 months. Any remaining
Performance Restricted Shares granted to any Electing Executive will remain
outstanding in accordance with their terms and subject to the applicable
Executive Severance Agreement. All options held by any Electing Executive
will, following retirement, remain outstanding for the entire term of such
options and will vest as set forth in the applicable option agreement, subject
to the terms of the applicable option plan and Executive Severance Agreement.
Electing Executives currently hold options to acquire an aggregate of 222,700
shares.

Rabbi Trust

AMP has previously established the Supplemental Benefit Trust Agreement (the
"Rabbi Trust") for the purpose of funding the Executive Severance Agreements,
and AMP's SERPs (the Pension Restoration Plan and the Supplemental Executive
Pension Plan), Deferred Compensation Plan, Split-Dollar Life Insurance
Agreements, Deferred Stock Accumulation Plan for Outside Directors (a
directors phantom stock plan), the Retirement Plan for Outside Directors, and
the Deferred Compensation Plan for Non-Employee Directors. The

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Rabbi Trust must be funded upon the occurrence of a Change of Control and may
be funded at an earlier time, except that the Executive Severance Agreements
entered into between AMP and its executive officers require AMP to contribute
to the Rabbi Trust, within 30 days following the occurrence of a Pending
Change of Control (as defined in such agreements), assets sufficient to
provide for payment of all amounts under such agreements. The announcement by
AlliedSignal of its intention to make the AlliedSignal Offer constituted a
Pending Change of Control for these purposes. Accordingly, AMP intends to
contribute to the Rabbi Trust, as required by the terms of the Executive
Severance Agreements, an irrevocable letter of credit in the amount of at
least $78,000,000, the minimum amount required for the purposes of funding the
benefits under such agreements.

Executive Severance Agreements

AMP has entered into severance agreements with its executive officers (the
"Executive Severance Agreements"), the terms of which are described in AMP's
annual proxy statement, except that certain executive officers with such
agreements have severance multipliers of one.

On August 20, 1998, the Compensation Committee authorized certain amendments
to the Executive Severance Agreements. Each of the Executive Severance
Agreements had provided that (1) "Stock plus Cash" awards (stock bonus units)
would be fully cashed out on a Change of Control and (2) if the executive is
party to a restricted stock agreement, in the event of a Change of Control a
cash payment would be made for restricted shares on the date(s) the shares
would otherwise have vested. As a result of these amendments, the Executive
Severance Agreements will provide that if these cashout provisions would
adversely affect AMP's ability to consummate a transaction which is to be
accounted for as a pooling of interests, (i) stock bonus units would be paid
out in stock rather than cash, (ii) restricted stock would not be cashed out;
rather, the shares would be canceled and the appropriate number of
unrestricted shares would be delivered on the otherwise applicable vesting
dates. The foregoing description of the amendments to the Executive Severance
Agreements is qualified in its entirety by reference to a form of such
amendment, a copy of which is filed as Exhibit 4 hereto and incorporated
herein by reference.

On August 20, 1998, the Compensation Committee authorized amendments to
certain restricted stock agreements. Two executives of AMP who are not parties
to an Executive Severance Agreement are parties to restricted stock
agreements. These restricted stock agreements provide that they will terminate
upon the occurrence of certain events, including the occurrence of certain
mergers or the date on which AMP's stock is no longer listed for trading on a
national securities exchange. If the restricted stock agreements terminate for
one of the reasons specified above, any unvested shares would be cashed out,
with payments being made on the applicable vesting dates. As a result of these
amendments, the restricted stock agreements will provide that, in the event
these cashout provisions would preclude AMP from entering into a transaction
which would be accounted for as a pooling of interests, the restricted stock
would not be cashed out; rather, the shares would be canceled and the
appropriate number of unrestricted shares would be delivered on the otherwise
applicable vesting dates. The foregoing description of the amendments to the
restricted stock agreements is qualified in its entirety by reference to a
form of such amendment, a copy of which is filed as Exhibit 5 hereto and
incorporated herein by reference.

Employee Severance Plan

On August 20, 1998, the Compensation Committee approved an Employee
Severance Plan (the "Severance Plan") covering most AMP employees, who for
purposes of the Severance Plan are classified into four different tiers, as
described below (hereinafter Tier I, Tier II, Tier III and Tier IV employees).
Tier I is comprised of approximately 50 divisional officers and management
designated corporate staff directors; Tier II is comprised of approximately
350 director level and manager level executives who have been granted options
to purchase Common Stock; Tier III is comprised of approximately 1,000
employees (other than members of Tier I and Tier II) who are in AMP's salary
band M; and Tier IV is comprised of all other exempt employees, numbering
approximately 4,300. The following employees are excluded from participation
in the Severance Plan: (1) executives who are parties to Executive Severance
Agreements; (2) employees who are covered by a collective

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bargaining agreement; and (3) employees who have elected to participate in the
VERP or who, prior to the occurrence of a Change of Control, receive notice
pursuant to any other reduction in force program of AMP.

Benefits are generally paid to Severance Plan participants upon any
involuntary termination of employment with AMP (other than for cause) within
two years following a Change of Control. The Severance Plan also provides
benefits for Tier I and II employees upon voluntary terminations of employment
for "Good Reason" (as defined below) within two years following such Change of
Control. Good Reason is defined as a reduction in salary (other than across-
the-board salary reductions generally applicable to all employees of both AMP
and the entity effecting the Change of Control) or a workplace relocation of
more than 50 miles.

Upon a qualifying termination of employment, benefits are paid to
participants as follows: Tier I employees are paid two week's compensation per
year of service with a 6 month minimum and a one year maximum; Tier II
employees are paid two week's compensation per year of service with a 3 month
minimum and a one year maximum; Tier III employees are paid two week's
compensation per year of service with a two month minimum and a 9 month
maximum; and Tier IV employees are paid one week's compensation per year of
service with a one month minimum and a 9 month maximum. Severance is paid in a
lump sum. For purposes of the Severance Plan, "compensation" means (1) a
participant's weekly rate of salary plus (2) 1/52 of such participant's target
bonus for the year of termination or the year of the Change of Control,
whichever is higher.

Benefits under the Severance Plan also include health care coverage
continuation during the severance periods described above and outplacement
assistance for Tiers I, II and III. Severance payments are subject to offset
for similar benefits received (e.g., severance benefits payable pursuant to
foreign law) and are reduced to the extent required to ensure that
participants do not receive "excess parachute payments" from AMP.

AMP may generally amend or terminate the Severance Plan; however, no
termination or adverse amendment may be effected during the existence of a
Pending Change of Control (as defined in the Severance Plan), or for six
months thereafter, or for two years following a Change of Control. The
foregoing description of the Severance Plan is qualified in its entirety by
reference to the Severance Plan, a copy of which is filed as Exhibit 6 hereto
and incorporated herein by reference.

Retention Bonus Program

On August 20, 1998 the Compensation Committee authorized AMP's management to
pay retention bonuses to certain key employees (other than employees who are
parties to Executive Severance Agreements), provided such employees remain in
AMP's employment for a designated retention period. Retention bonuses shall be
for a minimum of three month's salary and a maximum of twelve month's salary
and shall be subject to the approval of Messrs. Ripp, Cole or Urkiel or Dr.
Gromer.

AMP Pension

AMP maintains the AMP Incorporated Pension Plan (the "Pension Plan"), a tax-
qualified defined benefit plan. Upon the occurrence of a Change of Control (as
defined in the Pension Plan), certain enhanced benefits are provided to plan
participants. On August 20, 1998, the Board, upon the recommendation of the
Compensation Committee, authorized an amendment to the Pension Plan to conform
the Change of Control definition in the Pension Plan to that used in AMP's
other benefit and compensation plans.

The foregoing description of the amendment to the Pension Plan is qualified
in its entirety by reference to the amendment to the Pension Plan, a copy of
which is filed as Exhibit 7 hereto and incorporated herein by reference.

Except as described in this Schedule 14D-9 or incorporated herein by
reference, to the knowledge of AMP, as of the date of this Schedule 14D-9,
there are no material contracts, agreements, arrangements or understandings
and no actual or potential conflicts of interest between AMP and its
affiliates and (i) its executive officers, directors or affiliates or (ii) the
Purchaser or AlliedSignal or their respective, executive officers, directors
or affiliates.

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ITEM 4. THE SOLICITATION OR RECOMMENDATION.

(a) RECOMMENDATION OF THE BOARD OF DIRECTORS.

THE AMP BOARD OF DIRECTORS HAS DETERMINED, BY THE UNANIMOUS VOTE OF THOSE
PRESENT, THAT THE ALLIEDSIGNAL OFFER IS INADEQUATE, DOES NOT REFLECT THE VALUE
OR PROSPECTS OF AMP AND IS NOT IN THE BEST INTERESTS OF AMP AND ITS RELEVANT
CONSTITUENCIES, INCLUDING ITS SHAREHOLDERS, AS DESCRIBED IN MORE DETAIL BELOW.
ACCORDINGLY, THE BOARD BY SUCH UNANIMOUS VOTE RECOMMENDS THAT AMP'S
SHAREHOLDERS REJECT THE ALLIEDSIGNAL OFFER AND NOT TENDER THEIR SHARES
PURSUANT TO THE ALLIEDSIGNAL OFFER.

(b) BACKGROUND; REASONS FOR THE RECOMMENDATION.

A little over a year ago, Mr. Lawrence A. Bossidy, Chairman of the Board and
Chief Executive Officer of AlliedSignal, telephoned a director of AMP to
inquire as to whether AMP had an interest in exploring a possible combination
of the two companies. The inquiry was referred to the Finance Committee of the
Board of Directors for consideration. Upon consideration, it was the
conclusion of the Finance Committee that such a combination did not offer any
benefits to AMP's businesses and, accordingly, that there was no interest in
pursuing such a combination. The Finance Committee's determination was
communicated through the director by telephone to Mr. Bossidy. Until July 29,
1998, there were no further communications from Mr. Bossidy with respect to a
potential business combination.

On Wednesday, July 29, 1998, Mr. Bossidy placed a phone call to Mr. William
J. Hudson, Chief Executive Officer and President of AMP, who was out of the
country visiting some of AMP's facilities. This was followed up with a letter
delivered in the afternoon of Friday, July 31, 1998. Mr. Hudson first read the
letter on Sunday, August 2, 1998, following his return to his home.

In the letter, Mr. Bossidy expressed his belief that a business combination
made business sense and requested that a meeting be set up to discuss a
combination of the two companies. Mr. Bossidy indicated that AlliedSignal was
prepared to offer $43.50 per share in cash for all outstanding Shares, but
would consider a higher price if all or a significant portion of the
consideration were AlliedSignal's shares rather than cash.

On Monday, August 3, 1998, Mr. Hudson shared the letter with other members
of management, as well as with AMP's legal and financial advisors and several
members of the Board of Directors. A telephonic meeting of the Board of
Directors was called for Wednesday, August 5, 1998, to consider the letter.

On Tuesday, August 4, 1998, Mr. Bossidy placed another call to Mr. Hudson.
Mr. Hudson's office returned the call to let Mr. Bossidy know that Mr. Hudson
was out of the office and would be in touch on the following day. Later in the
day, a letter from Mr. Bossidy addressed to the Board of Directors of AMP was
telecopied to AMP headquarters. In the August 4th letter, Mr. Bossidy
indicated that AlliedSignal had decided to commence a tender offer for all
outstanding Shares at a price of $44.50 per share in cash. Mr. Bossidy
reiterated his belief that a combination was in the best interests of both
companies and all of their constituencies and that AlliedSignal was committed
to completing the combination. In that regard, Mr. Bossidy stated that if AMP
was unwilling to enter into negotiations, AlliedSignal would be prepared to
initiate a consent solicitation to increase the size of the AMP Board of
Directors and to add a majority of directors who would be responsive to its
proposal. The complete texts of these letters are contained in the Offer to
Purchase.

At the August 5, 1998 meeting, the Board of Directors, among other things,
reviewed preliminarily the various letters sent by AlliedSignal, heard
presentations as to their fiduciary responsibilities and duties in considering
acquisition proposals such as the one set forth in those letters and were
advised as to the work to be performed by AMP's advisors to assist the Board
in its consideration of the AlliedSignal Offer and the various alternatives
available to AMP.

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On August 10, 1998, Mr. Bossidy sent Mr. Hudson another letter to request a
meeting to discuss a possible business combination and to advise AMP of
AlliedSignal's intention to file materials shortly with the Securities and
Exchange Commission with respect to its Consent Solicitation. By letter dated
August 11, 1998, Mr. Hudson indicated to Mr. Bossidy that since the Board had
not yet reviewed AlliedSignal's offer or Mr. Bossidy's request for a meeting,
it would be premature for a meeting. Mr. Bossidy, nonetheless, called Mr.
Hudson later on August 11, at which time Mr. Hudson reiterated the essence of
his letter. Also, on August 11, 1998, AlliedSignal delivered a letter to AMP
requesting the Board of Directors set a record date for purposes of
determining those shareholders entitled to consent in connection with
AlliedSignal's Consent Solicitation.

On August 12, 1998, the Board held a meeting at which the Board reviewed
with AMP management and Credit Suisse First Boston, AMP's financial advisor
("CSFB"), Skadden, Arps, Slate, Meagher & Flom LLP, AMP's principal legal
advisor ("Skadden Arps"), and other legal advisors, the AlliedSignal Offer and
its terms and conditions. The Board also received and considered, among other
things, a review and update by AMP's management of AMP's business strategy and
the steps being taken by AMP to improve the profitability of its businesses, a
presentation by Pennsylvania counsel as to fiduciary duties and
responsibilities and a presentation from CSFB regarding its preliminary
analysis relating to the AlliedSignal Offer and various alternatives. On
August 12, 1998, AlliedSignal filed with the Securities and Exchange
Commission preliminary copies of its consent solicitation materials. On August
13, 1998, AMP filed with the Securities and Exchange Commission preliminary
copies of its consent revocation materials.

On August 18, 1998, Mr. Bossidy contacted a number of AMP's directors and
communicated to them his desire to proceed on a "non-hostile" basis and
AlliedSignal's willingness to include AlliedSignal stock as part of the
consideration.

On August 20, 1998, the Board held a meeting at which the Board again
reviewed the AlliedSignal Offer and its terms and conditions with AMP
management, CSFB, Skadden Arps and other legal advisors. At such meeting, CSFB
presented its financial analysis of the AlliedSignal Offer and reviewed
various alternatives available to AMP. AMP's senior management also reviewed
the potential impact of the AlliedSignal Offer on AMP's various constituencies
including its shareholders, employees, customers, suppliers and the
communities served by it. After lengthy discussions, and the presentations
from CSFB, Skadden Arps, other legal advisors and AMP's senior management, the
Board determined, based in part on the recommendation of all of the
independent directors present, that the best course of action under all
prevailing circumstances was for AMP to continue aggressively to pursue its
strategic initiatives and business plans. The Board concluded that, given the
values inherent in AMP's businesses and the steps being taken to improve the
profitability of these businesses, the AlliedSignal Offer was not in the best
interests of AMP and its relevant constituencies. In particular, the Board
determined that AMP's current strategic initiatives and business plans offer
the potential for greater benefits for AMP's various constituencies, including
its shareholders, than the AlliedSignal Offer. A copy of a letter to
shareholders communicating the Board of Directors' recommendation and a form
of press release announcing such recommendation are filed as Exhibits 8 and 9
hereto, respectively, and are incorporated herein by reference.

Also, following the recommendation, reached prior to the AlliedSignal Offer,
of a Board committee formed several months ago, effective as of August 20,
1998, the Board appointed Robert Ripp as Chairman and Chief Executive Officer
to lead AMP in its efforts aggressively to implement its profit improvement
program on a timely and successful basis. The Board also appointed Herbert
Cole, formerly Corporate Vice President and President, Global Terminal and
Connector Operations, as Senior Vice President for Operations and Dr. Juergen
Gromer, formerly Corporate Vice President, Global Automotive Division, as
Senior Vice President, Global Industry Businesses. James E. Marley has retired
as Chairman, and William J. Hudson has assumed the position of Vice Chairman.

ACCORDINGLY, THE AMP BOARD OF DIRECTORS, BY THE UNANIMOUS VOTE OF THOSE
PRESENT, RECOMMENDS THAT AMP'S SHAREHOLDERS REJECT THE ALLIEDSIGNAL OFFER AND
NOT TENDER THEIR SHARES PURSUANT TO THE ALLIEDSIGNAL OFFER.

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Factors Considered.

The Board's determination, which was reached at the meeting held on August
20, 1998 and took into account the unanimous recommendation of those
independent directors present, was based on the Board's review and
consideration of the interests of AMP and its shareholders and all other
factors permitted by applicable law, including the interests of employees,
suppliers, customers, creditors and the communities in which offices or other
AMP establishments are located; the short-term and long-term interests of AMP,
including benefits that may accrue to AMP from its long-term plans and the
possibility that these interests may be best served by the continued
independence of AMP; and the intentions of AlliedSignal with respect to AMP as
publicly expressed by AlliedSignal as well as its past conduct.

In reaching its determinations and recommendations described above, the
Board considered a number of factors, including, without limitation, the
following:

(i) the Board's belief, based on the factors described below, that the
AlliedSignal Offer is inadequate and does not reflect the inherent value of
AMP as the world's largest supplier of electrical and electronic
connectors;

(ii) the Board's familiarity with, and management's review of, AMP's
business, financial condition, results of operations, business strategy and
future prospects, as well as the steps being taken to improve the
profitability of AMP, including:

. reshaping AMP's manufacturing into a "global manufacturing
competency", including the consolidation and redeployment of
manufacturing operations;

. reshaping AMP's focus on customer services and pricing policies to
enhance AMP's competitiveness; and

. reducing costs, including through a redeployment and reduction in
work force representing approximately 14% of AMP's professional and
support services work force;

(iii) the Board's strong commitment to this program for improving
significantly AMP's operating and financial performance, and the Board's
concomitant belief that the market price of a Share should increase
significantly as the strategic initiatives announced prior to the
commencement of the AlliedSignal Offer start to take effect;

(iv) the Board's belief that the new management team is well suited to
implement the profit improvement program;

(v) the depressing effect which the disruption in the Asian market and
the overall decline in the stock market has had on the trading price of the
Shares;

(vi) the fact that the Offer Price is significantly less than the highest
price at which the Shares traded in the last twelve months;

(vii) the fact that AlliedSignal had solicited AMP's interest a little
over a year ago, but waited until the Shares were trading at their lowest
levels in years before making the AlliedSignal Offer so as to create an
impression that the offer is at a premium;

(viii) the written opinion, dated August 20, 1998, of CSFB that, as of
such date, the AlliedSignal Offer was inadequate, from a financial point of
view, to the holders of Shares (other than AlliedSignal and its
affiliates); the full text of the opinion of CSFB, setting forth the
assumptions made, matters considered and limitations on the reviews
undertaken, is included as Exhibit 10 hereto and should be read in its
entirety;

(ix) the numerous conditions to which the AlliedSignal Offer is subject;

(x) the apparent lack of overlap and potential synergies between the
respective businesses of AMP and AlliedSignal, evidenced in the Board's
view, by AlliedSignal's disposition of Amphenol, a competitor of AMP, in
1987, as well as the market's reaction to the Offer as reflected in the
significant decline in the trading value of AlliedSignal's shares following
its announcement of the AlliedSignal Offer;

8
<PAGE>

(xi) the Board's belief that AlliedSignal, with its lower growth rate, is
seeking to acquire AMP as a means to enhance its own growth opportunities;

(xii) the disruption that consummation of the AlliedSignal Offer could
have on AMP's employees, suppliers, customers and the communities where AMP
operates, as well as concerns expressed by a number of these constituencies
to AMP;

(xiii) the impact that the consummation of the AlliedSignal Offer may
have on the credit rating of AMP; and

(xiv) the Board's commitment to protecting the best interests of AMP and
enhancing the value of AMP for the benefit of shareholders and other
relevant constituencies.

In light of the numerous factors evaluated in connection with its
consideration of the AlliedSignal Offer, the Board determined that the
AlliedSignal Offer is not in the best interests of AMP and its various
constituencies.

The foregoing discussion of the information and factors considered by the
AMP Board is not intended to be exhaustive but includes all material factors
considered by the Board. In reaching its determination to recommend rejection
of the AlliedSignal Offer, the Board of Directors did not assign any relative
or specific weights to the foregoing factors, and individual directors may
have given differing weights to different factors. Throughout its
deliberations, the Board of Directors received the advice of CSFB, Skadden
Arps and other advisors who were retained to advise the Board in connection
with the AlliedSignal Offer.

ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.

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 an initial advisory fee of
$2,500,000, payable upon execution of the CSFB Engagement Letter (the "Initial
Advisory Fee"), plus a fee of $5,000,000, payable every 90 calendar days (not
to exceed $20,000,000 in the aggregate), provided that AlliedSignal does not
acquire more than 50% of the outstanding voting securities of AMP during such
90 day period, with the first payment payable 90 days after the date of the
CSFB Engagement Letter (the "Quarterly Advisory Fees"). In addition, if during
the term of the CSFB Engagement Letter or within two years after termination
of the CSFB Engagement Letter by AMP, AMP or substantially all of its assets
are acquired by AlliedSignal or any third party or AMP enters into an
agreement providing for such an acquisition, a transaction fee equal to 0.3%
of the Aggregate Consideration (as defined below) involved in the sale (the
"Transaction Fee") shall be payable to CSFB. If during the term of the CSFB
Engagement Letter or within two years after termination of the CSFB Engagement
Letter by AMP, in response to the AlliedSignal Offer another transaction is
consummated, a customary transaction fee shall be payable to CSFB as
determined by mutual agreement between CSFB and AMP (the "Alternate
Transaction Fee") based on the Aggregate Consideration of the transaction. The
CSFB Engagement Letter also provides for the payment to CSFB of a fee of
$2,500,000 upon CSFB rendering, whether in oral or written form, an opinion as
to the adequacy from a financial point of view of the consideration offered in
the AlliedSignal Offer (the "Opinion Fee"). The Initial Advisory Fee and the
Opinion Fee will be credited (to the extent paid) against any fees payable
pursuant to the Quarterly Advisory Fees; the Initial Advisory Fee, the Opinion
Fee and the Quarterly Advisory Fees will be credited (to the extent paid)
against any fees payable pursuant to the Transaction Fee; and the Initial
Advisory Fee will be credited (to the extent paid) against any fees payable
pursuant to the Alternate Transaction Fee. All fees and expenses payable to
CSFB pursuant to the CSFB Engagement Letter shall be net of any applicable
withholding and similar taxes. "Aggregate Consideration" is defined in the
CSFB Engagement Letter to mean the total fair market value (on the date of
payment) of all consideration (including cash, securities, property, all debt
remaining on AMP's financial statements and other indebtedness and obligations
assumed and any other form of consideration) received or receivable, directly
or indirectly, by AMP or its shareholders in connection with the sale.

9
<PAGE>

In addition to the fees described above, 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 its affiliates against certain liabilities
incurred in connection with its performance under the CSFB Engagement Letter.

In addition to the services to be provided by CSFB pursuant to the CSFB
Engagement Letter, AMP has agreed to (i) offer CSFB the role of lead arranger
or principal counterparty, as applicable, in connection with any external
financing, foreign exchange or derivatives transaction undertaken by AMP in
connection with services provided by CSFB pursuant to the CSFB Engagement
Letter; (ii) offer CSFB the role of lead managing underwriter or exclusive
placement agent, as the case may be, in connection with an offering of
securities to the public or a private placement of securities during the term
of the CSFB Engagement Letter; and (iii) continue to retain CSFB as its share
repurchase agent. The fees and terms applicable to the performance of any such
additional services by CSFB shall be set forth in separate letter agreements
containing terms and provisions mutually agreed upon by CSFB and AMP.

CSFB has provided certain investment banking services to AMP from time to
time for which CSFB has received customary compensation. In the ordinary
course of its business, CSFB and its affiliates may actively trade the debt
and equity securities of both AMP and AlliedSignal on their own account and
for the accounts of customers and, accordingly, may at any time hold a long or
short position in such securities.

AMP has retained Innisfree M&A Incorporated to distribute information
(including this Statement on Schedule 14D-9) on behalf of AMP in connection
with the AlliedSignal Offer and related matters. AMP has also retained
Abernathy MacGregor Frank and Hill & Knowlton as public relations advisors in
connection with the AlliedSignal Offer and related matters. Such firms will
receive customary compensation for services rendered and also will be
reimbursed for their out-of-pocket expenses.

Except as set forth above, neither AMP nor any person acting on its behalf
has employed, retained or compensated any persons to make solicitations or
recommendations to shareholders with respect to the AlliedSignal Offer.

ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.

(a) To the best of AMP's knowledge, except for the transactions in Shares
set forth on Exhibit 11 hereto, no transactions in the Shares have been
effected during the past 60 days by AMP or by any executive officer, director,
affiliate or subsidiary of AMP.

(b) To the extent currently known to AMP, no executive officer, director,
affiliate or subsidiary of AMP currently intends to tender, pursuant to the
AlliedSignal Offer, any Shares which are held of record or beneficially owned
by such person or to otherwise sell any such Shares.

ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.

(a) For the reasons discussed in Item 4 above, the Board has concluded that
the AlliedSignal Offer is inadequate and not in the best interests of AMP and
that the interests of its shareholders and other constituencies would best be
served if AMP were to pursue aggressively the implementation of its business
strategy. The Board also has instructed management, with the assistance of
AMP's financial and legal advisors, to seek to develop financial or other
alternatives, on a basis consistent with the pursuit of its business strategy,
for enhancing value in the nearer term. Except as described herein, AMP is not
engaged in any negotiation in response to the AlliedSignal Offer that relates
to or would result in (i) an extraordinary transaction, such as a merger or
reorganization, involving AMP or any subsidiary of AMP; (ii) a purchase, sale
or transfer of a material amount of assets by AMP or any subsidiary of AMP;
(iii) a tender offer for or other acquisition of securities by or of AMP; or
(iv) any material change in the present capitalization or dividend policy of
AMP.

10
<PAGE>

Notwithstanding the foregoing, the Board could in the future engage in
negotiations in response to the AlliedSignal Offer that could have one of the
effects specified in the preceding sentence, and the Board has determined that
disclosure with respect to the parties to, and the possible terms of, any
transactions or proposals of the type referred to in the preceding paragraph
might jeopardize any discussions or negotiations that AMP might conduct.
Accordingly, the AMP Board has adopted a resolution instructing management not
to disclose the possible terms of any such transactions or proposals, or the
parties thereto, unless and until an agreement in principle relating thereto
has been reached or, upon the advice of counsel, as may be required by law.

(b) To the best of AMP's knowledge, there are currently no transactions,
board resolutions, agreements in principle or signed contracts in response to
the AlliedSignal Offer, other than as described herein, that relate to or
would result in one or more of the matters referred to in Item 7(a).

ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.

(a) SHAREHOLDER RIGHTS PLAN

Each Right issued pursuant to the Rights Agreement entitles the holder
thereof to purchase from AMP one share of Common Stock at an exercise price of
$87.50 per share (the "Purchase Price"), subject to adjustment in accordance
with the terms of the Rights Agreement. Upon the earliest of (i) the close of
business on the tenth business day following a public announcement that a
person (an "Acquiring Person") has become an "interested shareholder" as
defined in Section 2553 of the Pennsylvania Business Corporation Law (i.e.,
has acquired, or obtained the right to acquire, beneficial ownership of 20% or
more of the outstanding Shares) other than pursuant to a Qualifying Offer (as
defined below), (ii) the close of business on the tenth business day (or such
later date as may be determined by the Board) following the commencement of a
tender offer or exchange offer that would result in a person becoming an
Acquiring Person or (iii) a merger or other business combination transaction
involving AMP (the earliest of such dates being the "Distribution Date"), the
Rights become exercisable and trade separately from the Shares. A Qualifying
Offer is an acquisition of shares of Common Stock pursuant to a tender offer
or an exchange offer for all outstanding shares of Common Stock at a price and
on terms determined by at least a majority of the members of the Board who are
not officers of AMP and who are not representatives, nominees, or affiliates
or associates of any person making the offer, after receiving advice from one
or more investment banking firms, to be fair to the shareholders and otherwise
in the best interest of AMP and its shareholders, provided such offer is
consummated at a time when the Rights are redeemable.

In the event that a person becomes an Acquiring Person, each holder of a
Right (other than Rights held by an Acquiring Person which are voided) will
thereafter have the right to receive, upon exercise, shares of Common Stock
(and, in certain circumstances other consideration) having a value equal to
two times the exercise price of the Right. In addition, in the event that, (i)
AMP is acquired in a merger or other business combination transaction in which
AMP is not the surviving corporation, (ii) AMP is a party to a merger in which
AMP is the surviving company, but its shares are exchange for other
consideration or remain outstanding, but constitute less than 50% of the
shares outstanding immediately following consummation of the merger (other
than, with respect to clause (i) or (ii), a merger which follows a Qualifying
Offer), or (iii) more than 50% of AMP's assets or earning power is sold or
transferred, each holder of a Right (except Rights that previously have been
voided as set forth above) shall thereafter have the right to receive, upon
exercise, common stock of the surviving company (or a related party in certain
cases) having a value equal to two times the exercise price of the Right
(a "Transaction Exercise Right").

The Rights may be redeemed until ten business days following the day on
which any person becomes an Acquiring Person, provided, however, that the
Rights shall become nonredeemable if there is a change in the Board of
Directors occurring at any time following receipt of an unsolicited
acquisition proposal such that the disinterested directors (as such term is
defined under Pennsylvania law) in office prior to the first such unsolicited
acquisition proposal, together with their successors as may be approved by the
Board of Directors prior to their election, no longer constitute a majority of
the Board of Directors.

11
<PAGE>

At a meeting held on August 12, 1998, the Board resolved that the
Distribution Date shall not occur until the earlier of (i) the day immediately
prior to the date on which an Acquiring Person becomes such and (ii) such date
as may be determined by action of the Board prior to the time any person or
group becomes an Acquiring Person. As a result of such action, the
commencement of the AlliedSignal Offer will not, in and of itself, result in
the occurrence of a Distribution Date. The Board also authorized Amendment No.
2 to the Rights Agreement, which ratified the appointment of ChaseMellon
Shareholder Services L.L.C., AMP's transfer agent, as the successor Rights
Agent.

At the meeting held on August 20, 1998, the Board approved Amendment No. 3
to the Rights Agreement (which is reflected in the summary description set
forth above) to provide that (i) unless the Rights are redeemed prior thereto,
a merger or other business combination transaction will be an event triggering
a Transaction Exercise Right, irrespective of whether other events have
previously occurred to cause the Rights Certificates to have been distributed,
(ii) the Rights shall become nonredeemable upon a change in the Board
occurring at any time following receipt of an unsolicited acquisition proposal
such that the disinterested directors (as such term is defined under
Pennsylvania law) in office prior to the first such unsolicited acquisition
proposal, together with their successors as may be approved by the Board of
Directors prior to their election, no longer constitute a majority of the
Board of Directors, (iii) the Qualifying Offer exception shall be applicable
unless and until the Rights become nonredeemable under clause (ii) above, and
(iv) the Rights Agreement generally may not be amended when the Rights are not
redeemable.

The Board of Directors also adopted a resolution providing that, following
the expiration of the Rights Agreement on November 6, 1999, and for a period
of six months thereafter, AMP shall neither adopt nor have in place a
shareholder rights plan.

The foregoing description of the Rights Agreement does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement
and Amendment No. 1 thereto, which are filed, respectively, as exhibits to
AMP's Annual Report on Form 10-K for the year ended December 31, 1994 and
AMP's Annual Report on Form 10-K for the year ended December 31, 1997, each as
filed with the Securities and Exchange Commission, and to Amendment No. 2 and
Amendment No. 3 to the Rights Agreement which are filed as Exhibits 12 and 13
hereto, respectively, and are incorporated herein by reference.

(b) PENNSYLVANIA BUSINESS COMBINATION STATUTE

Subchapter F of Chapter 25 (Sections 2551-2556) of the Pennsylvania Business
Corporation Law prohibits certain business combination transactions, including
a merger, between a Pennsylvania registered domestic corporation (such as AMP)
and any "Interested Shareholder" (defined generally as any person that,
directly or indirectly, beneficially owns 20% or more of the voting power of
the outstanding stock of a Pennsylvania registered domestic corporation) for a
period of five years after the date the person becomes an Interested
Shareholder. After such five-year period, a business combination transaction
between a Pennsylvania registered domestic corporation and such Interested
Shareholder is prohibited unless (i) the transaction meets certain minimum
requirements as to price and terms or (ii) the business combination
transaction is approved by the vote of the holders of a majority of the voting
stock not beneficially owned by the Interested Shareholder. The foregoing
restrictions do not apply to a business combination transaction with an
Interested Shareholder if either (x) the Interested Shareholder's acquisition
of the corporation's shares, or (y) the business combination transaction, is
approved by the board of directors of the corporation prior to the date on
which the Interested Shareholder became an Interested Shareholder. In
addition, a business combination transaction with an Interested Shareholder
may be consummated during the five-year period if the business combination
transaction is either (u) approved by the holders of all outstanding Shares or
(v) approved by a majority of the outstanding Shares not held by the
Interested Shareholder in a transaction which complies as to certain minimum
requirements as to price and certain other terms provided that at the time of
approval the Interested Shareholder owns at least 80% of the outstanding
Shares. A short-form merger under Section 1924(b)(1)(ii) of the Pennsylvania
Business

12
<PAGE>

Corporation Law can only be implemented under Subchapter D of Chapter 25 of
the Pennsylvania Business Corporation Law if it is consistent with all
applicable requirements of Subchapter F of Chapter 25 of the Pennsylvania
Business Corporation Law.

In light of the Board's determinations with respect to the AlliedSignal
Offer (as described in Item 4), the Board of Directors has determined, based,
in part, on the unanimous recommendation of all independent directors present,
to take no action at this time which would render Subchapter F of the
Pennsylvania Business Corporation Law inapplicable to AlliedSignal.

Subchapter G of Chapter 25 (Sections 2561-2568) of the Pennsylvania Business
Corporation Law generally provides that any Shares beneficially held by a
shareholder, which causes such shareholder to be the beneficial owner of 20%
or more of the outstanding Shares, shall not be entitled to be voted unless
voting rights are granted to such Shares by the holders of a majority of the
outstanding Shares and the holders of a majority of the "disinterested shares"
(as defined in the Pennsylvania Business Corporation Law), each voting as a
separate class.

(d) PENNSYLVANIA CONTROL TRANSACTIONS STATUTE

Subchapter E of Chapter 25 (Sections 2541-2548) of the Pennsylvania Business
Corporation Law governs "control transactions" (defined generally as a
transaction in which a person acquires at least 20% of the voting power of a
corporation) and provides that following a control transaction the
shareholders are entitled to demand that they can be paid the fair value of
their shares. Pursuant to Subchapter E, the minimum value the shareholders can
receive may not be less than the highest price paid per share by the control
person within the 90-day period ending on and including the date of the
control transaction.

(e) REGULATORY FILING

On August 14, 1998, AlliedSignal filed a Notification and Report Form with
respect to the AlliedSignal Offer under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"). AMP intends to file its
Notification and Report Form with respect to the AlliedSignal Offer. Under the
provisions of the HSR Act applicable to the AlliedSignal Offer, the purchase
of shares pursuant to the AlliedSignal Offer may not be consummated until the
expiration of a fifteen-calendar day waiting period following AlliedSignal's
filing under such HSR Act. Accordingly, assuming the filing made by
AlliedSignal was not deficient, the waiting period with respect to the
AlliedSignal Offer will expire at 11:59 p.m., New York City time, on August
29, 1998, unless AlliedSignal receives a request for additional information or
documentary material or the Antitrust Division and the Federal Trade
Commission terminate the waiting period prior thereto.

(f) 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 judgment as to, among other
things, the applicability and/or validity of the Continuing Director
provisions contained in AMP's Rights Agreement 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 AlliedSignal's 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 AlliedSignal's Consent Solicitation; (iii)
refusing to redeem AMP's shareholder rights plan (the "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

13
<PAGE>

exercise of the shareholder 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 AlliedSignal's Consent Solicitation, or taking any other
action to thwart or interfere with the AlliedSignal Offer or Consent
Solicitation.

Four purported shareholder class action lawsuits have been filed by AMP
shareholders against AMP and its Board of Directors in the United States
District Court for the Eastern District of Pennsylvania on or about August 6
and 7, 1998 (Blum v. William J. Hudson, Jr. et al, Civil Action No. 98-CV-
4109; Silver v. AMP, Incorporated et al, Civil Action No. 98-CV-4120;
Goldstein v. AMP, Incorporated, et al, Civil Action No. 98-CV-4127; Margolis
Partnership v. AMP, Incorporated, et al, Civil Action No. 98-CV-4187). These
complaints allege similar acts of misconduct, i.e., that AMP and its directors
improperly refused to consider AlliedSignal's Offer and wrongfully relied upon
provisions of AMP's Rights Plan and the Pennsylvania Business Corporation law
to block AlliedSignal's Offer. Plaintiffs in these suits seek, among other
things, a declaratory judgment that (i) the continuing director provisions
contained in AMP's Rights Agreement violate Pennsylvania law and the Board's
fiduciary duties; (ii) certain provisions of the Pennsylvania Business
Corporation Law are unconstitutional under the Commerce, Supremacy and Due
Process Clauses of the United States Constitution; and (iii) establishes the
proper record date for the Consent Solicitation. In addition, plaintiff seeks
to enjoin AMP and the Board from, among other things, (i) refusing to redeem
the Rights Plan, to amend the Plan so as to eliminate the Continuing Director
provisions, or to render the Rights inapplicable to the AlliedSignal Offer and
second-step merger for purposes of the Pennsylvania Business Combination Law;
(ii) amending AMP's By-laws to impede the effective exercise of the
shareholder franchise; (iii) taking any other 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 or the proposals in
AlliedSignal's Consent Solicitation; (iv) increasing the size of AMP's Board
and filling the new seats with Board nominees after commencement of
AlliedSignal's Consent Solicitation; (v) fixing a record date for determining
the shareholders entitled to vote on the proposals in AlliedSignal's Consent
Solicitation more than ten days after the date of AlliedSignal's written
notice to AMP. Plaintiffs further requests that the Court order AMP's Board to
(i) cooperate fully with any entity or person, including AlliedSignal, having
a bona fide interest in proposing any transaction that would maximize
shareholder value; (ii) immediately undertake an appropriate evaluation of
AMP's worth as a merger or acquisition candidate; (iii) take all appropriate
steps to effectively expose AMP to the marketplace in an effort to create an
active auction of AMP; (iv) act independently so that the interests of AMP's
public shareholders will be protected; and (v) adequately ensure that no
conflicts of interest exist between the Individual Defendants' own interest
and their fiduciary obligation. Given the similarities of their suits, the
four alleged shareholder plaintiffs agreed to consolidate their suits and,
accordingly, will file an Amended Consolidated Complaint.

AMP intends to defend vigorously against these actions.

Copies of each of the complaints described above are filed as Exhibits 14
through 18 hereto and incorporated herein by reference, and the foregoing is
qualified in its entirety by reference to such exhibits.

14
<PAGE>

ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.

The following exhibits are filed herewith:

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
1 Excerpts from AMP's Proxy Statement dated March 16, 1998.
2 Restricted Stock Agreement, dated as of August 20, 1998, between AMP
and Robert Ripp.
3 Amendment to Executive Severance Agreement between AMP and Robert
Ripp.
4 Form of Amendment to Executive Severance Agreement.
5 Form of Amendment to Restricted Stock Agreement.
6 AMP Incorporated Employee Severance Plan.
7 Amendment to the AMP Incorporated Pension Plan, dated as of August 20,
1998.
8 Letter to Shareholders, dated August 21, 1998.*
9 Text of Press Release issued by AMP, dated August 21, 1998.
10 Opinion of CSFB dated August 20, 1998.*
11 Securities Transaction Chart.*
12 Amendment No. 2, dated August 12, 1998, to the Rights Agreement.
13 Amendment No. 3, dated August 20, 1998, to the Rights Agreement.
14 Complaint filed in the United States District Court for the Eastern
District of Pennsylvania in AlliedSignal Corporation v. AMP
Incorporated (Civil Action No. 98-CV-4058).
15 Complaint filed in the United States District Court for the Eastern
District of Pennsylvania in Claire Blum v. William J. Hudson, Jr., et
al. (Civil Action No. 98-CV-4109).
16 Complaint filed in the United States District Court for the Eastern
District of Pennsylvania in Scott Silver v. AMP, Inc., et al. (Civil
Action No. 98-CV-4120).
17 Complaint filed in the United States District Court for the Eastern
District of Pennsylvania in Sue Goldstein v. AMP, Inc., et al. (Civil
Action No. 98-CV-4127).
18 Complaint filed in the United States District Court for the Eastern
District of Pennsylvania in Margolis Partnership v. AMP, Inc., et al.
(Civil Action No. 98-CV-4187).
19 Excerpts from AMP's Annual Report on Form 10-K for the year ended
December 31, 1997.
</TABLE>
- --------
* Included in copies of the Schedule 14D-9 mailed to shareholders.

* * *

15
<PAGE>

This document and the exhibits attached hereto contain certain "forward-
looking" statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Exchange Act, which are intended to
be covered by the safe harbors created thereby. Such statements should be
considered as subject to risks and uncertainties that exist in AMP's
operations and business environment and could render actual outcomes and
results materially different than predicted. For a description of some of the
factors or uncertainties which could cause actual results to differ, reference
is made to the section entitled "Cautionary Statements for Purposes of the
'Safe Harbor"' in AMP's Annual Report on Form 10-K for the year ended December
31, 1997, a copy of which is filed as Exhibit 19 hereto. 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 has been distracted by
the AlliedSignal Offer and whose numbers will have been reduced as a result of
these initiatives.

16
<PAGE>

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.

AMP Incorporated

/s/ Robert Ripp
By: _________________________________
Name: Robert Ripp
Title: Chairman and Chief
Executive Officer

Dated: August 21, 1998

17
<PAGE>

EXHIBIT INDEX

The following exhibits are filed herewith:

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
1 Excerpts from AMP's Proxy Statement dated March 16, 1998.
Restricted Stock Agreement, dated as of August 20, 1998, between AMP
2 and Robert Ripp.
Amendment to Executive Severance Agreement between AMP and Robert
3 Ripp.
4 Form of Amendment to Executive Severance Agreement.
5 Form of Amendment of Restricted Stock Agreement.
6 AMP Incorporated Employee Severance Plan.
Amendment to the AMP Incorporated Pension Plan, dated as of August 20,
7 1998.
8 Letter to Shareholders, dated August 21, 1998.*
9 Text of Press Release issued by AMP, dated August 21, 1998.
10 Opinion of CSFB dated August 20, 1998.*
11 Securities Transaction Chart.*
12 Amendment No. 2, dated August 12, 1998, to the Rights Agreement.
13 Amendment No. 3, dated August 20, 1998, to the Rights Agreement.
14 Complaint filed in the United States District Court for the Eastern
District of Pennsylvania in AlliedSignal Corporation v. AMP
Incorporated (Civil Action No. 98-CV-4058).
15 Complaint filed in the United States District Court for the Eastern
District of Pennsylvania in Claire Blum v. William J. Hudson, Jr., et
al. (Civil Action No. 98-CV-4109).
16 Complaint filed in the United States District Court for the Eastern
District of Pennsylvania in Scott Silver v. AMP, Inc., et al. (Civil
Action No. 98-CV-4120).
17 Complaint filed in the United States District Court for the Eastern
District of Pennsylvania in Sue Goldstein v. AMP, Inc., et al. (Civil
Action No. 98-CV-4127).
18 Complaint filed in the United States District Court for the Eastern
District of Pennsylvania in Margolis Partnership v. AMP, Inc., et al.
(Civil Action No. 98-CV-4187).
19 Excerpts from AMP's Annual Report on Form 10-K for the year ended
December 31, 1997.
</TABLE>

- --------
* Included in copies of the Schedule 14D-9 mailed to shareholders.

<PAGE>

EXHIBIT 1

EXCERPTS FROM AMP'S 1998 ANNUAL MEETING
PROXY STATEMENT

SECURITY OWNERSHIP OF DIRECTORS

The Corporation's Corporate Governance guidelines encourage each member of
the Board of Directors to hold the Corporation's Common Stock in an amount
having a market value of at least four times the annual retainer fee. The
following table identifies the total Common Stock ownership for each Nominee for
director as of March 3, 1998.

<TABLE>
<CAPTION>
Amount of Beneficial Amount of Phantom Total Beneficial and Phantom
Ownership Ownership
Name of Owner (shares)(1)(2) (shares)(3) (shares)
- -------------------------- ------------------------- --------------------- -----------------------------
<S> <C> <C> <C>
Ralph D. DeNunzio......... 8,000(5) 3,170 11,170
Barbara H. Franklin....... 5,400(6) 1,879 7,279
Joseph M. Hixon III....... 1,653,385(7) 7,897 1,661,282
William J. Hudson, Jr..... 359,885(14)(15) 35,040(4) 394,925
Joseph M. Magliochetti.... 2,000(8) 1,945 3,945
James E. Marley........... 270,062(9)(14)(15) 25,737(4) 295,799
Harold A. McInnes......... 43,071 0 43,071
Jerome J. Meyer........... 5,300(10) 2,811 8,111
John C. Morley............ 7,400(11) 6,554 13,954
Paul G. Schloemer......... 8,000(12) 0 8,000
Takeo Shiina.............. 6,120(13) 2,628 8,748
</TABLE>

(1) Each Director owns less than 1% of the Corporation's outstanding Common
Stock.

(2) Unless otherwise indicated, each Nominee for 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 60 days after March 3, 1998.

(3) Numbers shown in this column include phantom shares: (i) credited to
outside directors under the Outside Directors Deferred Stock
Accumulation Plan, as described on page 8 of this Proxy Statement; and
(ii) credited to outside and non-employee directors for compensation
deferred at the election of the director, as described on page 7 of
this Proxy Statement.

(4) Designated executive officers of the Corporation may defer up to 50% of
their base salary and all 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 Corporation's
Deferred Compensation Plan, as described in footnote 1 to the Summary
Compensation Table on page 11 of this Proxy 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 12 and footnote 3 to the Security Ownership of Executive Officers
Table on page 20 of this Proxy Statement.

(5) Mr. DeNunzio also holds 2,000 options granted under the Corporation's
Stock Option Plan for Outside Directors that are not exercisable until
on or after July 1, 1998.

<PAGE>

(6) Ms. Franklin also holds 2,000 options granted under the Corporation's
Stock Option Plan for Outside Directors that are not exercisable until
on or after July 1, 1998.

(7) Mr. Hixon holds 15,791 and 122,192 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 Corporation. He
also holds 2,000 options granted under the Corporation's Stock Option
Plan for Outside Directors that are not exercisable until on or after
July 1, 1998.

(8) Mr. Magliochetti also holds 2,000 options granted under the
Corporation's Stock Option Plan for Outside Directors that are not
exercisable until on or after July 1, 1998.

(9) In addition, 211 shares of Common Stock of the Corporation 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 Corporation are owned by a member of the immediate family
of Mr. Marley in a custodial account over which the Nominee has voting
and dispositive powers; Mr. Marley disclaims beneficial ownership of
this stock.

(10) Mr. Meyer also holds 2,000 options granted under the Corporation's
Stock Option Plan for Outside Directors that are not exercisable until
on or after July 1, 1998.

(11) Mr. Morley also holds 2,000 options granted under the Corporation's
Stock Option Plan for Outside Directors that are not exercisable until
on or after July 1, 1998.

(12) Mr. Schloemer holds 1,400 of these shares of Common Stock of the
Corporation in a family trust of which he is co-trustee with his wife
and shares voting and dispositive powers. In addition to the beneficial
ownership shown in the table, he holds 2,000 options granted under the
Corporation's Stock Option Plan for Outside Directors that are not
exercisable until on or after July 1, 1998.

(13) Mr. Shiina also holds 2,000 options granted under the Corporation's
Stock Option Plan for Outside Directors that are not exercisable until
on or after July 1, 1998.

(14) A portion of the shares reported for Messrs. Hudson and Marley are
Performance Restricted Shares granted under the Corporation's 1993
Long-Term Equity Incentive Plan. Further, a portion of the shares
reported for Messrs. Hudson and Marley are held in the Corporation's
Employee Savings and Thrift Plan.

(15) Under the Corporation's former Bonus Plan (Stock Plus Cash), at
December 31, 1997 Mr. Hudson also had 17,402 Stock Bonus Units. Some of
the Stock Bonus Units held by Mr. Hudson will convert within 60 days
after March 3, 1998 and are reported in this number. 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; some of
these Stock Options are exercisable within 60 days after March 3, 1998
and are reported in this number. Mr. Marley has 303,600 Stock Options;
some of these Stock Options are exercisable within 60 days after March
3, 1998 and are reported in this number.

Although the Board of Directors does not contemplate that any of the
Nominees for director will be unable to serve, in the event a vacancy in the
original slate of nominees is occasioned by death or other unexpected
occurrence, (a) shares of stock represented by the proxies shall be voted for
the election of such other nominee as may be designated by the Board of
Directors, or (b) prior to the meeting, the Board of Directors will amend the
Corporation's Bylaws in order to eliminate that office of director for which
such nominee is unable to accept

2
<PAGE>

election, or (c) in the event that neither (a) nor (b) occurs,
the Proxy Committee shall nominate other persons in their discretion and vote
the proxies for the election of such persons as directors.

THE BOARD OF DIRECTORS

COMPENSATION

A director who is not an employee of the Corporation 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 Corporation. A director who is also an employee of
the Corporation 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:

Total Director
Director Compensation

Dexter F. Baker........... $ 40,500 (1)
Ralph D. DeNunzio......... 43,500
Barbara H. 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 Corporation's deferred
compensation plan for outside and non-employee directors, described
below.

3
<PAGE>

(2) Messrs. Hudson and Marley were employees as well as directors of the
Corporation 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
Corporation, under a consulting agreement with the Corporation. 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 Corporation'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 Corporation provides benefits to the directors, the amount of which
varies dependent upon whether the director is presently or was ever employed by
the Corporation. The Corporation provides Director and Officer Liability and
Indemnification insurance coverage for all directors. Directors who are not
presently and have never been employed by the Corporation (an "Outside
Director"), are provided with life insurance coverage. Travel accident
insurance coverage is provided to directors who are not currently employed by
the Corporation.

All directors are eligible to participate in the Corporation's Employee
Gift Matching Program. Under this program, the Corporation 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.

4
<PAGE>

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 Proxy 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 Corporation'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

5
<PAGE>

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 Corporation or the issuance of voting securities of the Corporation in
connection therewith, other than i) a merger or consolidation resulting in the
voting securities of the Corporation 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
Corporation in which no person or group directly or indirectly acquires
beneficial ownership of 30% or more of the Corporation's issued and outstanding
shares of Common Stock, or (d) the shareholders of the Corporation approve a
plan of complete liquidation or dissolution of the Corporation or there is
consummated an agreement for the sale or disposition of all or substantially all
of the assets of the Corporation, 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 Corporation immediately prior to such sale.

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
Corporation'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 Corporation's internal and independent
auditors and financial officers as appropriate to monitor control of the
Corporation'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 Corporation's financial statements; reviews the status of special
investigations; reviews the financial statements; oversees the quarterly
reporting process; discusses with the Corporation'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 Corporation'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

6
<PAGE>

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 Corporation'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 Corporation'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 Corporation, 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
Corporation'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 Corporation's share
repurchase strategies; periodically reviews the Corporation's dividend policy,
dividend-recommendations, stock split proposals and investor relations plans;
reviews periodically the Corporation'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 Corporation's Pension Committee concerning the investment status,
investment policy guidelines and accounting treatment of the Corporation'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 Corporation, and the
policy guidelines governing such charitable giving. During 1997 the Finance
Committee held three meetings.

7
<PAGE>

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 Corporation. 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.

EXECUTIVE COMPENSATION
<TABLE>
<CAPTION>

SUMMARY COMPENSATION TABLE
Long-Term
Compensation
-------------------------------------
Annual Compensation Awards
---------------------------------------------- -------------------------------------
Other Annual Restricted Securities Underlying All Other
Name and principal Salary Bonus Compensation Stock Awards Options/SARs Compensation
position Year ($) ($) ($) ($) ($) ($)
- --------------------------- ----- ------- ----- ------------ ----------- ------------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
(a) (b) (c)(1) (d)(1) (e)(2) (f)(3) (g)(4) (h)
- -------------------------- ---- ------- ------- ------------ ----------- ------------------- ------------
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 1995 700,000 437,000 17,947 1,071,875 60,000 173,380
Director

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 Corporation 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

8
<PAGE>

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 Corporation'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 15-16, 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
Corporation for tax payments made in previous years.

(3) During 1997, 180,900 shares of restricted stock were granted by the
Corporation, 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
Corporation'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
Corporation'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 Corporation'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 Corporation. 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 Corporation'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 13-14
of this Proxy 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 Corporation 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 Corporation'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
Corporation 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
Corporation; and $79,500 as the total premium paid by the Corporation
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

9
<PAGE>

coverage for Mr. Marley equal to twice his base salary (in lieu of the
coverage available under the Corporation'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
Corporation 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
Corporation; and $57,515 as the total premium paid by the Corporation
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 Corporation'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 Corporation 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 Corporation 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 Corporation'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
Corporation 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.
<TABLE>
<CAPTION>

OPTION/SAR GRANTS IN 1997

Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation for
Individual Grants Option Term(3)
----------------------------------------------------------------------- ----------------------------
% of
Total
Number of Options/
Securities SARs
Underlying Granted Exercise Market
Options/SARs to or Base Price at
Granted(1) Employees Price Expiration Grant 0% 5% 10%
Name Date (#) in 1997 ($/share) Date(2) ($/share) ($) ($) ($)
- -------------------------- ------- ------------ --------- --------- ---------- --------- --- --- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
William J. Hudson, Jr..... 7/22/97 63,900 3.16 47.0 7/22/07 47.0 0 1,888,759 4,786,487
Chief Executive
Officer and President,
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.......... 7/22/97 15,000 0.74 47.0 7/22/07 47.0 0 443,370 1,123,588
Vice President

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>

10
<PAGE>

_____________________________

(1) The Corporation'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 Corporation, in the form of freestanding SARs payable in
the Corporation's Common Stock or from time to time, in the
Corporation'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
Corporation'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 11 of
this Proxy 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 the 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.

11
<PAGE>

(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 Corporation'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 Value of Unexercised
Shares Unexercised Options/SARs on In-The-Money Options/SARs
Acquired Value December 31, 1997 (#) On December 31, 1997 ($)
on Exercise Realized ----------------------------- ------------------------------
Name (#) ($)(2) Exercisable/Unexercisable(3) Exercisable/Unexercisable(3)(4)
- ---------------------------- ---------- -------- ----------------------------- ------------------------------
<S> <C> <C> <C> <C>
William J. Hudson, Jr. ..... 4,861 118,880 220,000 / 218,902 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 Corporation'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 compensa tion is based on stock price
appreciation in the form of freestanding SARs payable in the
Corporation's Common Stock or occasionally, in the discretion of the
Corporation, 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 average
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 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. The 1993 Plan is more
fully described in footnote 1 to the table entitled "Options/SAR Grants
in 1997" on pages 13-14 of this Proxy Statement.

12
<PAGE>

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 Corporation'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 13-14 of this Proxy 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 11 of this Proxy 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
Corporation'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 13-14 of this Proxy Statement.

(2) "Valued 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.

13
<PAGE>

RETIREMENT BENEFITS

The Corporation 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 Corporation, 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 Corporation 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 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 Corporation'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
Corporation. The special

14
<PAGE>

formula, which the Corporation 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 Corporation
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 Corporation'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 indicted amount
of final average remuneration and number of credited years of service./(1)/ 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 13 of this Proxy Statement.

15
<PAGE>

PENSION PLAN TABLE(4)

YEARS OF SERVICE(3)

REMUNERATION(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

16
<PAGE>

(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 Corporation
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 11 of this Proxy 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 Corporation's
executives with increasing the long-term value of the Corporation, in January
1995 the Corporation 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 March 3, 1998 by the named
executive officers and the executive officers of the Corporation on that date is
as follows:

17
<PAGE>

<TABLE>
<CAPTION>
Amounts and
Nature Beneficial Amount of Total Beneficial
of Beneficial Ownership Phantom and Phantom
Name and Address Ownership as a Percent Ownership Ownership
Title of Class of Beneficial Owner (shares) of Class (shares) (shares)

<S> <C> <C> <C> <C> <C>
Common Stock...... William J. Hudson, Jr. 359,885 (1)(2)(4) less than 1 35,040 394,925
Harrisburg, Pennsylvania

Common Stock...... James E. Marley 270,062 (2)(4) less than 1 25,737 295,799
Harrisburg, Pennsylvania

Common Stock...... Robert Ripp 101,028 (4) less than 1 6,024 107,052
Harrisburg, Pennsylvania

Common Stock...... Juergen W. Gromer 39,942 (4) less than 1 158 40,100
Langen, Germany

Common Stock...... John E. Gurski 84,073 (4) less than 1 12,129 96,202
Harrisburg, Pennsylvania

Common Stock...... all Executive Officers 2,896,211 (1)(2)(4) 1.31 142,215 3,038,426
(18 persons)
and Directors as a Group
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
_______________

(1) Three executive officers have the right to acquire an undeterminable number
of shares under the Corporation's Bonus Plan (Stock Plus Cash) within 60
days after March 3, 1998.

(2) A portion of the shares reported for 17 executive officers are held in the
Corporation'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 March 3,
1998.

(3) 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 Corporation 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 11 of this Proxy 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 12 of this Proxy Statement.

(4) In addition, a total of 8,782 shares are held by immediate family members of
four 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 holders 7,392 shares of Common Stock of the Corporation. Of the
beneficial ownership reported in this number, 15,791 and 122,192 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, nine directors hold a total of 64,000 options,
some of which are exercisable within 60 days after March 3, 1998 and are
reported in this number, and eighteen executive officers hold a total of
1,606,145 options, some of which are exercisable within 60 days after March
3, 1998 and are reported in this number, and 44,304 Stock Bonus Units, some
of which will convert within 60 days after March 3, 1998 and are reported in
this number. 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.

<PAGE>

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
Corporation'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 are Mr. Dexter F.
Baker, 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 Corporation'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 Corporation'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 Corporation. As explained below in greater detail, these
at-risk, performance-based incentive compensation plans directly align the
interests of the Corporation's executives with its shareholders and form a
significant portion of the total compensation opportunity for all officers and
key executives.

The Corporation 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
Corporation'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 20-22 of this Proxy
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

19
<PAGE>

surveys of comparably-sized companies in the electrical/electronic 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 Corporation 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
Corporation.

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 for
$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.

20
<PAGE>

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
20-22 of this Proxy Statement, 7 were included in this Towers Perrin survey.
The Corporation'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 Corporation'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 Corporation 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 Corporation'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 Corporation'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 Corporation'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 Corporation.

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 Corporation's Common Stock.

In 1995, with the review and approval of the Committee, the
Corporation 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 Corporation Common
Stock with a value of at least four times annual base salary. The guideline

21
<PAGE>

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 Corporation's executives is directly linked to the performance of the
Corporation's Common Stock, thereby materially expanding the community of
interest between the executives and the Corporation'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 Corporation. The
Corporation'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
Corporation'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 Corporation 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 Corporation's
disappointing growth and performance in 1996.

Mr. Hudson's assigned minium, 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 Corporation 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 Corporation'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

<PAGE>

39,600 performance restricted shares of Common Stock of the Corporation under
the 1993 Long-Term Equity Incentive Plan. These shares will either vest or be
forfeited at the end of 1999 based on the Corporation'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 Corporation's first stock option plan became effective, of
increasing the proportion of stock-based compensation in the total compensation
package of the Corporation's senior executive officers, particularly the CEO,
thereby further increasing the executives' community of interest with the
Corporation's shareholders. The aggregate long-term incentive award levels set
for Mr. Hudson in 1997 were at approximately the 60/th/ 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 Corporation.

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 Corporation's performance over the three-year
period of 1995, 1996 and 1997. The Corporation'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 Corporation'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 Corporation.

In April 1992, Mr. Hudson had been awarded 12,200 stock bonus units
under the Corporation'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 Corporation'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 Corporation'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 Corporation 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

23
<PAGE>

designated value, see footnote 1 to the Aggregated Option/SAR Exercises in 1997
and FY-End Option/SAR Values Table, pages 15-16).

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 Corporation has entered into agreements with the named 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 8-9 of this Proxy Statement, and the
termination of the executive's employment at any time during the 2-year period
thereafter, the executive will be paid a lump sum equal to a multiplier of 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.

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 executive's 65/th/ birthday or the
15/th/ 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 2 or 3 years; shall receive the
conversion of the executive's group term life insurance policy, if any, to a
fully paid permanent life insurance policy remaining in effect for 2 or 3 years
at the Corporation's cost; and shall receive continuation of health, dental, and
disability benefits until the latter of 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.

24
<PAGE>

PROPOSAL FOR SHAREHOLDER APPROVAL OF THE
AMP INCORPORATED
1998 EMPLOYEE STOCK PURCHASE PLAN

INTRODUCTION

On October 22, 1997 the Board of Directors unanimously approved the
Corporation's 1998 Employee Stock Purchase Plan (the "ESPP"), subject to the
approval of the shareholders at the 1998 Annual Meeting. If approved by the
shareholders, the ESPP would become effective July 1, 1998 and assist eligible
employees of the Corporation and certain subsidiaries of the Corporation in the
purchase of the common stock of the Corporation (the "Common Stock"). Through
this acquisition of an increased proprietary interest in the Corporation,
participating employees will have an additional incentive to share in the growth
and prosperity of the Corporation. The Board of Directors believes that
employee participation in ownership of the Corporation is to the combined
benefit of the employee, the Corporation, its subsidiaries and the Corporation's
shareholders. The ESPP is intended to qualify as an "employee stock purchase
plan" under Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code").

MATERIAL FEATURES OF THE ESPP

Beginning July 1, 1998, eligible employees (as defined below) would
have the right (an "Option") to purchase shares of Common Stock under the ESPP
at discounted prices through automatic payroll deductions. An eligible employee
electing to participate in the ESPP may authorize payroll deductions at the rate
of any whole percentage of the employee's base cash compensation, not to exceed
25% of such compensation or such lesser percentage as designated by the
committee appointed to administer the ESPP, as described below (the
"Committee"). All payroll deductions will be held by the Corporation and
commingled with its other corporate funds, but shall be credited to an
individual stock purchase account that will be established for each
participating employee. No interest will be paid on the amounts credited to
such accounts pending investment, except where required by local law. The
purchase of Common Stock under the ESPP may only be made through payroll
deductions, and additional payments to the individual accounts will not be
accepted.

Unless a different purchase period is determined by the Committee,
Options to purchase shares of Common Stock under the ESPP will be automatically
exercised for each participant on the last business day of each calendar
quarter, that is, March 31, June 30, September 30 and December 31. All amounts
accumulated in a participant's individual stock purchase account as of those
dates will be used to purchase the number of shares of Common Stock (including
fractional shares) that can be acquired at an option price that is the lower of:
(i) the fair market value of the Common Stock on the first business day of the
applicable calendar quarter, or such other purchase period as may be determined
by the Committee, less a percentage discount as established by the Committee,
but in no event more than 15% (the "Designated Discount"), or (ii) the fair
market value on the last business day of each calendar quarter, or such other
purchase period as may be determined by the Committee, less the applicable
Designated Discount.

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<PAGE>

However, the Committee may determine at any time in advance of a purchase period
that the option price shall be the price described in (ii) above. For purposes
of the ESPP, the "fair market value" is the closing price of shares of Common
Stock on the New York Stock Exchange on the trading day that precedes the
relevant date of valuation.

In accordance with Section 423(b)(8) of the Code, no participant may
purchase Common Stock in connection with any Option under the Plan at a rate
that exceeds a total of $25,000 in fair market value of Common Stock (based on
the fair market value of the Common Stock at the time each Option is granted)
for all Options outstanding at any time during each calendar year. If a
participant's payroll deductions during a purchase period exceed the purchase
price for this maximum number of shares of Common Stock that may be purchased
under an Option outstanding in any calendar year, the excess shall be retained
in the participant's stock purchase account and applied to the next purchase
period.

If the total number of shares of Common Stock that would otherwise be
issued on the last business day of a calendar quarter or other purchase period
designated by the Committee, based on the fair market value of a share of Common
Stock on that date, exceeds the maximum number of shares offered on the first
business day of such purchase period, based on the fair market value of a share
of Common Stock on that date, then the number of shares that may be purchased
under Options granted for that purchase period shall be reduced on a pro rata
basis in as nearly a uniform manner as shall be practicable and equitable.
Payroll deductions shall also be reduced or refunded as appropriate.

The Corporation will deliver to each participant a record of the
number of shares of Common Stock purchased under the ESPP at the end of each
calendar quarter or other purchase period designated by the Committee, together
with a statement of the balance of any amount of payroll deductions remaining in
the participant's stock purchase account. Shares of Common Stock issued
pursuant to the ESPP shall be fully paid and non-assessable, but will be subject
to such delivery requirements, holding periods or other restrictions as the
Committee may establish from time to time. Once such shares have been purchased
on behalf of and delivered to the participant, the participant shall have
voting, dividend and all other shareholder rights with respect to those shares.

A participant may increase or decrease his or her rate of payroll
deductions only effective on the first day of the applicable calendar quarter or
other designated purchase period. A participant may, however, discontinue
participation in the ESPP at any time during a purchase period, in which case
his or her payroll deductions accumulated prior to the end of participation will
remain in the ESPP for the purchase of shares of Common Stock at the end of said
purchase period. Upon such cessation of participation, the employee also will be
subject to any restrictions or waiting periods that the Committee may establish
for future resumption or discontinuation of payroll deductions. In the event of
a participant's retirement, death or other termination of employment for any
reason, all accumulated amounts credited to such participant's share purchase
account shall be paid to the participant or the participant's estate without
interest (except where required by local law) and his or her participation in
the ESPP shall terminate.

26
<PAGE>

The ESPP authorizes the grant of options not governed by Section 423
of the Code if approved by the Committee. It is anticipated that this provision
will be invoked in connection with employees of affiliates in the United
Kingdom, who in the aggregate constitute 4% of the Corporation's eligible
employees globally and who will likely be offered participation in a Save-As-
You-Earn arrangement qualifying for favorable tax treatment in the United
Kingdom. If so authorized, these United Kingdom participants only will be
offered the opportunity to purchase shares at no more than 20% discount by
entering into three-year or longer contracts with a financial institution that
will hold the employees' payroll deductions pending purchase of the shares.
Under the provisions of a Save-As-You-Earn arrangement, the purchase price for
the Options will be determined at the beginning of the contract period and
participants will not be given the choice of designating a purchase price at the
end of the period. Participants also will bear the risk of currency
fluctuations during the contract period.

The Corporation will bear all administrative expenses of the ESPP.

TERM OF THE PLAN

Upon approval by the shareholders, the ESPP will become effective July
1, 1998 and continue until June 30, 2008 unless previously terminated by the
Board of Directors of the Corporation.

SHARES RESERVED FOR THE PLAN

The ESPP authorizes up to 3,000,000 shares of Common Stock to be
purchased under the plan during its term. The Board of Directors may
proportionately adjust this number of authorized shares, as well as the price
per share of Common Stock covered by each outstanding Option, the number of
shares to be purchased pursuant to such Options and the maximum number of shares
subject to any individual Option outstanding in a calendar year, as applicable,
in the event of any change in the outstanding Common Stock of the Corporation
due to one or more reorganizations, recapitalizations, spin-offs, split-ups,
rights offerings or reductions of shares. Shares covered by an outstanding
Option that is not exercised in whole or in part or is settled in cash shall, to
the extent such shares are not issued, be available for future grants under the
ESPP. Shares of Common Stock issued under the ESPP will be either treasury
shares or authorized and unissued shares. Each share of Common Stock purchased
pursuant to the ESPP will be accompanied by a share purchase right issued under
the Corporation's Rights Agreement dated as of October 25, 1989, as amended.

ELIGIBILITY

Any employee is eligible to participate in the ESPP if he or she is
regularly employed on a full-time basis by the Corporation or by any subsidiary
or affiliate of the Corporation designated by the Board of Directors as covered
by the ESPP. Participation in the ESPP is subject to such administrative rules
governing waiting periods after commencement of employment as may be established
from time to time by the Committee. The Committee also may establish criteria

27
<PAGE>

and procedures governing the eligibility of part-time employees to participate
in the ESPP. No employee holding 5% or more of the Corporation's outstanding
shares of Common Stock may participate in the plan and the Board of Directors,
in its discretion, may also determine that highly compensated employees shall be
ineligible. Approximately 42,500 employees worldwide would have been eligible
to participate in the ESPP as of March 3, 1998. This estimate of eligible
employees excluded employees working in countries with laws that prohibit or
materially restrict participation in this plan.

ADMINISTRATION OF THE PLAN

The Board of Directors of the Corporation will designate a Committee
of two or more members to administer the ESPP. Initially this Committee will
consist of the Chairman, the Chief Executive Officer and the Chief Financial
Officer of the Corporation, but the Board may change the members of the
Committee at any time. The Committee has the full power in its discretion to
promulgate rules for the proper administration of the ESPP, to interpret the
provisions of the ESPP, to make factual determinations relevant to ESPP
entitlements and to take all action that it deems necessary or advisable for the
administration of the ESPP, consistent with the terms of the ESPP. The
Committee may adopt rules relating to the operation and administration of the
ESPP to accommodate the specific requirements of local laws and procedures in
jurisdictions outside the United States. Decisions by the Committee are, in all
respects, final and binding on participants under the plan. The Committee may
delegate to one or more individuals the day-to-day administration of the ESPP.
No member of the Board of Directors or the Committee shall be liable for any
action in connection with the administration of the ESPP if such action is taken
in good faith.

AMENDMENT AND TERMINATION OF THE PLAN

The Board of Directors has the right to terminate or suspend the ESPP
at any time and for any reason, or to amend it in any respect; provided,
however, that in the absence of shareholder approval, the Board may not amend
the ESPP in a manner that: (i) materially increases the number of shares
subject to the ESPP other than by reason of an adjustment under the
circumstances described in "Shares Reserved for the Plan" above; (ii) materially
modifies the eligibility requirements for participation in the ESPP, except as
provided for under the terms of the plan; (iii) materially increases the
benefits under the ESPP; (iv) reduces the share purchase price other than by
reason of an adjustment under the circumstances described in "Shares Reserved
for the Plan" above; or (v) extends the duration of the ESPP beyond June 30,
2008.

NEW PLAN BENEFITS

The number of eligible employees that will elect to participate in the
ESPP and the extent of their participation cannot be determined either in the
future or based on the last completed calendar year as if the ESPP had been in
effect. Accordingly, it is not possible to determine with certainty the number
of shares of Common Stock or their dollar value that will be distributed under
the plan.

28
<PAGE>

The Corporation anticipates, however, that an average of approximately
300,000 shares of Common Stock will be issued annually during the 10-year term
of the ESPP. Based on a per share price of $43 5/8 (the closing price for
Common Stock on the New York Stock Exchange on March 3, 1998) and assuming each
executive officer of the Corporation participates to the fullest extent
possible, the benefits of the ESPP during 1997 would have been as follows:

AMP INCORPORATED 1998 EMPLOYEE STOCK PURCHASE PLAN
NEW PLAN BENEFITS

NAME AND POSITION BENEFIT (U.S. $) NUMBER OF SHARES
<S> <C> <C>
William J. Hudson, Jr. 3,800 575
Chief Executive Officer and President

James E. Marley 3,800 575
Chairman

Robert Ripp 3,800 575
Executive Vice President

Juergen W. Gromer 3,800 575
Vice President

John E. Gurski 3,800 575
Vice President

Executive Officers 66,800 10,200
as a Group

Non-Executive Officer 1,900,000 289,800
Employee Group
</TABLE>

NON-ASSIGNABILITY

Prior to its settlement in the form of shares of Common Stock or cash, no
Option or other right, benefit or accumulated payroll deduction under the ESPP
may be voluntarily or involuntarily assigned, transferred, pledged or otherwise
disposed of. Options under the ESPP will be exercisable during a participant's
lifetime only by the participant or the participant's guardian or legal
representative.

LIQUIDATION OR CHANGE OF CONTROL

In the event of a liquidation of the Corporation, all outstanding Options
and the ESPP itself will terminate immediately prior to such liquidation and all
accumulated payroll deductions in the stock purchase accounts will be refunded
to the participants, without interest. In the event of a change of control of
the Corporation by a sale of all or substantially all of its assets or by a
merger or consolidation of the Corporation with and into another corporation,
then, in the sole discretion of the Board of Directors, either (1) each Option
shall be assumed, or an equivalent option shall be substituted, by the successor
corporation or its affiliates, (2) all outstanding Options shall be deemed
exercisable on a date, as established by the Board, that is on or before the
effective date of the change of control, or (3) all outstanding Options and the
ESPP itself will

29
<PAGE>

terminate and all accumulated payroll deductions in the stock purchase accounts
will be refunded to the participants, without interest.

CERTAIN INCOME TAX EFFECTS OF PLAN PARTICIPATION

Set forth below is a discussion of certain U.S. income tax consequences the
Corporation believes will result from the grant and exercise of Options under
the ESPP. This discussion is based on an analysis of the Code as currently in
effect, existing laws, judicial decisions, administrative rulings and
regulations, and proposed regulations, all of which are subject to change. In
addition to being subject to the U.S. income tax consequences described below,
which is not intended to be a complete description of all U.S. income tax
aspects of participation in the ESPP, a participant may also be subject to
foreign, state and local income or other tax consequences in the jurisdiction in
which he or she works and/or resides. The summary below assumes that the ESPP
is approved by the Corporation's shareholders and it qualifies as an employee
stock purchase plan within the meaning of Section 423 of the Code; if the ESPP
is not so approved or otherwise is not qualified, or in the future becomes non-
qualified under Section 423, participants would recognize as ordinary income on
each date that the Options are exercised an amount equal to the Designated
Discount of the fair market price of the shares of Common Stock purchased upon
such exercise.

Under the Code, an eligible employee who elects to participate in an
offering under the ESPP will recognize income for the amounts withheld from his
or her paycheck for the year in which such amounts would otherwise have been
paid to the participant. These amounts will also be deductible by the
Corporation. Participants will not, however, realize additional taxable income
either at the commencement of an offering period and the grant of an Option or
when the shares of Common Stock purchased under the plan are delivered to him or
her. Each participant's basis in shares purchased will equal the amount paid
for such shares.

If the shares purchased upon the exercise of an Option under the ESPP are
not disposed of within 2 years after the date the Option was granted or, if
later, within 1 year after the date of delivery of such shares to the
participant, then upon a subsequent disposition of the shares the participant
will realize ordinary income for that year in an amount equal to the lesser of
(a) the excess of the fair market value of such shares at the time of their
disposition over the purchase price of shares, or (b) the Designated Discount of
the fair market value of the shares on the date the related Option was granted.
The participant's basis in the shares disposed will be increased by an amount
equal to the amount of ordinary income determined above, and any gains or losses
realized upon the disposition of the shares and based on this adjusted basis
will be taxable as long-term capital gain. Neither the Corporation nor any of
its subsidiaries and affiliates will be entitled to any deduction upon the
disposition of the shares under the foregoing circumstances.

If the shares are disposed of before the end of either the 2-year or 1-year
periods discussed above (a "disqualifying disposition"), the participant will
realize ordinary income in the year of disposition on an amount equal to the
excess of the fair market value of such shares on the date of purchase over
their purchase price. The participant's basis in the shares disposed of

30
<PAGE>

will be increased by an amount equal to the amount of ordinary income determined
above, and any gains or losses realized upon the disposition of the shares and
based on this adjusted basis will be taxable as either long-term or short-term
capital gain or loss, depending on the holding period for such shares. The
Corporation (or the subsidiary or affiliate for which the participant is
employed) will be entitled to a tax deduction for the amount the participant is
required to include in ordinary income as a result of such disposition.

In the event of the death of a participant prior to the disposition of the
shares (whether or not within the 2-year or 1-year periods described above), a
participant will be subject to ordinary income tax in an amount equal to the
lesser of (a) the Designated Discount of the fair market value of the shares on
the first business day of the purchase period, or (b) the amount, if any, by
which the fair market value of the shares as of the date of death exceeds the
amount actually paid for the shares.

A participant who is neither a citizen nor a resident of the United States
generally will not be subject to the U.S. income tax rules described above with
respect to the shares of Common Stock purchased under the ESPP.

The ESPP is not subject to any provision of the Employee Retirement Income
Security Act of 1974 ("ERISA").

<PAGE>

EXHIBIT 2

RESTRICTED STOCK AGREEMENT

AGREEMENT dated this 20th day of August, 1998, by and between AMP
Incorporated, a Pennsylvania corporation with its principal offices located in
Harrisburg, Pennsylvania ("AMP") and Robert M. Ripp, of Harrisburg, Pennsylvania
("Ripp").

WHEREAS, Ripp has been appointed as of the date hereof to the positions of
Chairman of the Board and Chief Executive Officer of AMP and, in connection with
such appointment, AMP has agreed to make the grant of restricted stock on the
terms set forth herein;

WHEREAS, both AMP and Ripp desire to set forth in writing the nature of the
above described grant of restricted stock and its contractual limitations.

NOW THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, and intending to be legally bound hereby, the parties
hereto agree as follows:

1. GRANT.

1.1. AMP hereby grants to Ripp 25,000 shares of common stock of AMP,
subject to the restrictions set forth under Sections 2 and 3 hereof
(the "Shares"). The Shares distributed to Ripp hereunder will be
issued shares reacquired on the open market by and held in the
treasury of AMP. No Shares distributed pursuant to this Agreement
will have been registered under the Securities Act of 1933, as
amended (the "Securities Act"). The Shares include the 25,000 shares
granted hereunder, as adjusted in the event of any subsequent stock
dividend, dividend reinvestment, recapitalization, merger,
consolidation, split-up, combination, exchange of shares or similar
event.
<PAGE>

2. RESTRICTIONS.

2.1. The Shares are subject to the following restrictions:

a. Ripp's ownership of the Shares shall vest on August 1, 2006 (his
normal retirement date), or on the date of Ripp's earlier death,
disability or other termination of Ripp's employment with AMP
that is mutually agreed upon by the parties.

b. Any Shares not vested as of the date of Ripp's death,
disability, retirement or other mutually agreed upon termination
of employment with AMP shall be forfeited and promptly returned
to AMP without further consideration. For purposes of this
Agreement, termination of employment means the termination of
employment by AMP or by a subsidiary of AMP, but not the
transfer of employment from AMP to a subsidiary or vice versa,
or from one subsidiary of AMP to another such subsidiary. For
purposes of this Agreement, employment shall not be considered
as terminated if Ripp continues to perform services for AMP or a
subsidiary thereof on either a full or part-time basis either as
an independent contractor or on a consulting basis or otherwise,
provided, however, that Ripp during such period does not,
whether full time or part time, engage in or perform any
services as an employee, independent contractor, consultant,
advisor or otherwise for a business that is engaged in the
manufacture, sale or other disposition of a product or products
that are in competition to a product or products of AMP or its
subsidiaries, partnerships or joint ventures.

c. Except as provided hereafter, no Shares may be transferred by
Ripp prior to the vesting of such shares as set forth in Section
2.1(a) above. "Transferred" means any change of ownership of a
Share, including without limitation being sold, assigned,
exchanged, gifted or granted, pledged or hypothecated.

3. COMPLIANCE WITH SEC REGULATIONS.

3.1. Separate and apart from the restrictions contained in Section 2
hereof, the Federal securities laws and the rules and regulations
thereunder impose certain restrictions on the resale, reoffer or
other disposition of shares of

Page 2
<PAGE>

AMP common stock that are unregistered under the Securities Act
and/or are held by persons who are "affiliates" of AMP, as that term
is defined in Rule 405 promulgated under the Securities Act. In view
of the fact that the grant of Shares under this Agreement consists of
unregistered AMP common stock and, further, because Ripp is an
"affiliate" of AMP, an effective registration statement must be filed
under the Securities Act covering the resale or reoffer of the
Shares, or he must comply with the requirements of Rule 144 under the
Securities Act before he can publicly sell or reoffer the Shares, or
he must otherwise rely on one of the other exemptions from
registration that may be available. None of the provisions of this
Agreement shall relieve Ripp of his obligations to comply with
applicable Federal and state securities laws in connection with the
Shares and transactions related to the Shares.

4. LEGENDS.

4.1. Each certificate evidencing the Shares shall bear three legends in
the following forms:

a. "The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), or under the securities laws of any state. These shares
may not be sold, offered for sale, transferred, pledged or
hypothecated in the absence of an effective registration
statement for the shares under the Act and applicable state
securities laws, or an opinion of counsel and other assurances
satisfactory to AMP Incorporated, prior to the transaction, that
registration is not required under the Act or under the
securities laws of any state."

b. "The registered holder of the shares represented by this
certificate may, at the time of issuance thereof, be deemed an
affiliate of the issuer under the Securities Act of 1933, as
amended."

c. "The shares represented by this certificate are subject to, and
may not be transferred except in compliance with, a Restricted
Stock Agreement dated August 20, 1998 between AMP Incorporated
and Robert M. Ripp. These shares are subject to forfeiture in
the event of a breach of the terms and conditions of said
Restricted Stock Agreement. A copy of that Agreement is
available without cost from

Page 3
<PAGE>

AMP Incorporated, Harrisburg, Pennsylvania."

4.2. In order to facilitate any sale or other disposition of the Shares by
Ripp to persons entitled to take the Shares free and clear of the
restrictions of this Agreement, AMP agrees to promptly issue, in
exchange for legended certificates for the Shares, unlegended
certificates upon written request therefor from Ripp. Any such
request shall contain a representation in reasonable detail that the
Shares represented by such legended certificates are being
transferred in conformance with the terms of this Agreement.

5. TAX WITHHOLDING.

5.1. AMP may deduct from any payment to be made to Ripp any amount that
Federal, state, local or foreign tax laws requires to be withheld
with respect to the Shares upon the vesting of, or the lapse of
restrictions on, all or any part of the Shares. As additional methods
of accomplishing such withholding, Ripp may elect to have AMP
withhold from the Shares, or he may surrender previously acquired
shares of common stock, in a number of whole shares up to but not
exceeding that number that has a then-current fair market value
sufficient to cover the amount of taxes required to be withheld at
such time.

6. WAIVER OF SECTION 83(B) ELECTION.

6.1. Ripp acknowledges his knowing waiver of his right under Section 83(b)
of the Internal Revenue Code of 1986, as amended, to elect to have
the Shares treated as taxable income for the calendar year 1998, the
year in which the Shares were received by Ripp, which tax would have
been based on the fair market valuation of the Shares as of the date
of the grant of the Shares to Ripp.

7. DIVIDENDS.

7.1. Cash dividends paid on the Shares shall, at the election of Ripp,
either be paid directly to Ripp or be automatically reinvested in
additional shares of AMP common stock under AMP's Enhanced Dividend
Reinvestment Plan. Any such additional shares, together with any
stock dividends paid on the Shares, shall not be subject to the
terms, conditions and restrictions set

Page 4
<PAGE>

forth in this Agreement and shall be acquired by Ripp notwithstanding
that the Shares with respect to which such dividend was paid may have
been forfeited under the terms of this Agreement prior to the payment
date for such dividend.

8. STOCK POWER.

8.1. Upon the request of AMP from time to time, Ripp agrees to execute and
deliver to AMP one or more stock powers in such form as may be
specified by the Corporate Secretary of AMP, authorizing the transfer
of the Shares to AMP.

9. GOVERNING LAW.

9.1. This Agreement shall be governed by and construed in all respects in
accordance with the laws of the Commonwealth of Pennsylvania and
applicable Federal law.

10. SEVERABILITY.

10.1. In the event any one or more of the provisions, or portions thereof,
contained or referenced in this Agreement shall for any reason be or
be deemed to be invalid, illegal or unenforceable, such provision
shall be construed or deemed amended to conform to applicable laws,
or if it cannot be so construed or deemed amended without materially
altering the intent of the Agreement, such provision shall be
stricken and the remaining provisions shall continue in full force
and effect and be construed as if such provision, to the extent it is
invalid, illegal or unenforceable, had never been contained herein.

11. NON-WAIVER.

11.1. The failure of any party to enforce the provisions hereof or to
exercise the rights granted hereunder, or the Agreement of the
parties to waive enforcement thereof, at any time or for any period
of time shall not constitute or be construed to be a waiver of any
other failure or breach of

Page 5
<PAGE>

such provisions or rights, or any other provision of this Agreement,
or of the right of such party thereafter to enforce each and every
such provision or right, nor shall such failure or agreement be
deemed to be an amendment to this Agreement. Each waiver under this
Agreement shall be express and in writing.

12. NOTICES.

12.1. Any notice or demand hereunder or under statute, to be effective,
must be in writing and delivered personally or sent to telegram,
facsimile, express carrier or other delivery that provides a written
confirmation, or by certified or registered mail, postage or other
expenses prepaid, to:

AMP at: Corporate Secretary
AMP Incorporated
P.O. Box 3608
M/S 176-48
Harrisburg, PA 17105

Ripp at: Robert M. Ripp
AMP Incorporated
P.O. Box 3608
M/S 176-40
Harrisburg, PA 17105

The above addresses may be changed at any time by giving prompt
written notice as provided above.

13. SUCCESSORS.

13.1. This Agreement shall be binding on the heirs, executors,
administrators and successors of the parties hereto.

14. COUNTERPARTS.

14.1. This Agreement may be executed in one or more counterparts, each of

Page 6
<PAGE>

which shall be deemed an original but all of which together shall
constitute but one and the same Agreement.

15. ENTIRE AGREEMENT.

15.1. This Agreement represents the entire understanding and agreement
between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings either written
or oral. This Agreement may be modified or amended only by an
instrument in writing duly executed by Ripp and an authorized
representative of AMP.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

AMP INCORPORATED

By: ______________________ By: ________________________
[Title] Robert M. Ripp

Page 7

<PAGE>

EXHIBIT 3

AMENDMENT TO
EXECUTIVE SEVERANCE AGREEMENT
WITH MR. RIPP

This Amendment is made to that certain Executive Severance Agreement,
dated as of August 8, 1996 as thereafter amended prior to the date hereof (the
"Agreement"), between AMP Incorporated (the "Company") and Robert Ripp (the
"Executive"). Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Agreement.

WHEREAS, the Company has determined that it is in its best interest
and that of its stockholders to amend the Agreement as set forth herein;

NOW THEREFORE, in accordance with Section 16 of the Agreement, the
Company and the Executive agree that the Agreement shall be amended as follows,
effective as of August 20, 1998:

1. The second paragraph of Section 1(a) of the Agreement is amended
to delete the number "two" wherever it appears therein and to replace it with
the number "three".

2. The first sentence of Section 2(d) of the Agreement is amended to
insert immediately following the phrase "a Restricted Stock Agreement with the
Corporation" the phrase "(other than the Restricted Stock Agreement dated as of
August 20, 1998)".

3. The last word of the first sentence of Section 3(a) of the
Agreement shall be changed from "two" to "three".

4. Clause (i) of Section 3(c) of the Agreement is amended in its
entirety to read as follows: "(i) a period of thirty-six months after
termination or".

5. The Agreement is amended by adding the following as a new Section
19, as follows:

consummate a Change of Control transaction that is intended to be accounted
for as a "pooling of interests," such provisions shall not be implemented
and, in lieu thereof, in connection with such Change of Control
transaction, (i) all outstanding Stock Bonus Units shall be distributed to
you, immediately prior to such Change of Control, in the form of shares of
the common stock of the Corporation (computed in the manner otherwise
provided under Section 2(a) of this Agreement) and (ii) all unvested
restricted shares, if any, granted to you pursuant to the terms of a
Restricted Stock Agreement with the Corporation (other than the Restricted
Stock Agreement dated as of August 20, 1998), which would otherwise have
been paid in cash in accordance with Section 2(d) of this Agreement, shall
be cancelled, and unrestricted shares of common stock of the Corporation or
other entity effecting the Change of Control transaction (in either case,
appropriately adjusted to reflect such Change of Control transaction) shall
be delivered to you in equal installments on the date designated in such
Restricted Stock Agreement for the vesting of unrestricted shares granted
thereunder.

The effective date of this Amendment shall be August 20, 1998. Except
as herein modified, the Agreement shall remain in full force and effect.

2
<PAGE>

IN WITNESS WHEREOF, the Company and the Executive have executed this
Amendment as of the date first set forth above.

AMP INCORPORATED

By:_____________________
Title:

________________________
Robert Ripp

APPROVED:

By:__________________________
Chairman, Compensation and
Management Development
Committee

<PAGE>

EXHIBIT 4
FORM OF
AMENDMENT TO
EXECUTIVE SEVERANCE AGREEMENT

This Amendment is made to the Executive Severance Agreement , dated as
of August 8, 1996, as thereafter amended prior to the date hereof (the
"Agreement"), between AMP Incorporated (the "Company") and [_________] (the
"Executive"). Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Agreement.

WHEREAS, the Company has determined that it is in its best interest
and that of its stockholders to amend the Agreement as set forth herein;

NOW THEREFORE, in accordance with Section 16 of the Agreement, the
Company and the Executive agree that the Agreement shall be amended as follows,
effective as of August 20, 1998:

1. The Agreement is amended by adding a new Section 19, as follows:

19. Pooling of Interests Transaction Provisions. If it is determined
-------------------------------------------
that application of the provisions of Sections 2(a) and (d) of this
Agreement would adversely affect the Company's ability to consummate
a Change of Control transaction that is intended to be accounted for
as a "pooling of interests," such provisions shall not be implemented
and, in lieu thereof, in connection with such Change of Control
transaction, (i) all outstanding Stock Bonus Units shall be
distributed to you, immediately prior to such Change of Control, in
the form of shares of the common stock of the Corporation (computed in
the manner otherwise provided under Section 2(a) of this Agreement)
and (ii) all unvested restricted shares, if any, granted to you
pursuant to the terms of a Restricted Stock Agreement with the
Corporation, which would otherwise have been paid in cash in
accordance with Section 2(d) of this Agreement, shall be cancelled,
and unrestricted shares of common stock of the Corporation or other
entity effecting the Change of Control transaction (in either case,
appropriately
<PAGE>

adjusted to reflect such Change of Control transaction) shall be
delivered to you in equal installments on the date designated in such
Restricted Stock Agreement for the vesting of unrestricted shares
granted thereunder.

The effective date of this Amendment shall be August 20, 1998. Except
as herein modified, the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the Company and the Executive have executed this
Amendment as of the date first set forth above.

AMP INCORPORATED

By:_____________________
Title:

________________________
[Executive]

APPROVED:

By:____________________________
Chairman, Compensation and
Management Development
Committee

<PAGE>

EXHIBIT 5

FORM OF
AMENDMENT TO
RESTRICTED STOCK AGREEMENT

This Amendment is made to that certain Restricted Stock Agreement (the
"Agreement"), dated as of [________], between AMP Incorporated (the "Company")
and [________] ("Executive"). Capitalized terms used but not defined herein
shall have the meanings ascribed to them in the Agreement.

WHEREAS, the Company has determined that it is in its best interest
and that of its stockholders to amend the Agreement as set forth herein;

NOW THEREFORE, in accordance with Section 17 of the Agreement, the
Company and the Executive agree that the Agreement shall be amended as follows,
effective as of August 20, 1998:

1. The Agreement is amended by inserting the following as a new
Section 18:

18. Pooling of Interests Transaction Provisions.

18.1 If it is determined that application of the provisions of
Subsection [10.2] [7.2] of this Agreement would adversely
affect the Company's ability to consummate a Change of Control
transaction that is intended to be accounted for as a "pooling
of interests," such provision shall not be implemented and, in
lieu thereof, in connection with such Change of Control
transaction, all remaining unvested restricted Shares, which
would otherwise have been paid in cash in accordance with such
Subsection [10.2] [7.2], shall be cancelled, and unrestricted
shares of common stock of the Corporation or other entity
effecting the Change of Control transaction (in either case,
appropriately adjusted to reflect such Change of Control
transaction) shall be delivered to [name] in equal installments
on each of the remaining vesting dates provided for in
Subsection 2.1(c) of this Agreement.
<PAGE>

The effective date of this Amendment shall be August 20, 1998. Except
as herein modified, the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the Company and the Executive have executed this
Amendment as of the date first set forth above.

AMP INCORPORATED

By:_____________________
Title:

________________________
[Executive]

APPROVED:

By:___________________________
Chairman, Compensation and
Management Development
Committee
2

<PAGE>

EXHIBIT 6

AMP INCORPORATED
EMPLOYEE SEVERANCE PLAN

The Company hereby adopts the AMP Incorporated Employee Severance Plan
for the benefit of certain employees of the Company and its subsidiaries, on the
terms and conditions hereinafter stated.

SECTION 1.DEFINITIONS. As hereinafter used:
-----------

1.1 "Board" means the Board of Directors of the Company.
-----

1.2 "Cause" means (i) the willful and continued failure by the
-----
Eligible Employee to substantially perform the Eligible Employee's duties with
the Employer (other than any such failure resulting from the Eligible Employee's
incapacity due to physical or mental illness), or (ii) the willful engaging by
the Eligible Employee in conduct which is demonstrably injurious to the Company,
or its subsidiaries, monetarily or otherwise. For purposes of this definition,
no act, or failure to act, on the Employee's part shall be deemed "willful"
unless done, or omitted to be done, by the Employee not in good faith and
without reasonable belief that the Employee's act, or failure to act, was in the
best interest of the Company.

1.3 "Change of Control." For the purpose of this Agreement, a change
-----------------
of control of the Company ("Change of Control") shall be deemed to have occurred
if the event set forth in any one of the following paragraphs shall have
occurred:

(i) any Person is or becomes the beneficial owner (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its affiliates)
representing 30% or more of either the then outstanding shares of common
stock of the Company or the combined voting power of the Company's then
outstanding securities; or

(ii) the following individuals cease for any reason to
constitute a majority of the number of directors then serving: individuals
who, on the Effective Date, constitute the Board and any new
<PAGE>

director (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors
of the Company) whose appointment or election by the Board or nomination
for election by the Company's stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who either
were directors on the date hereof or whose appointment, election or
nomination for election was previously so approved; or

(iii) there is consummated a merger or consolidation of the
Company with any other corporation or the issuance of voting securities of
the Company in connection with a merger or consolidation of the Company (or
any direct or indirect subsidiary of the Company) pursuant to applicable
stock exchange requirements, other than (A) a merger or consolidation that
would result in the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof) at least 66 2/3%
of the combined voting power of the voting securities of the Company, or
such surviving entity or any parent thereof, outstanding immediately after
such merger or consolidation, or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in
which no Person is or becomes the beneficial owner (as defined in Rule 13d-
3 under the Exchange Act), directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such Person
any securities acquired directly from the Company or its affiliates)
representing 30% or more of either the then outstanding shares of common
stock of the Company or the combined voting power of the Company's then
outstanding securities; or

(iv) the stockholders 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 by the Company of all or
substantially all of the Company's assets, other than a sale or disposition
by the Company of all or substantially all of the Company's assets to an
entity, at least 70% of the combined voting power of the voting securities
of which are owned by Persons in

2
<PAGE>

substantially the same proportions as their ownership of the Company
immediately prior to such sale.

1.4 "Code" means the Internal Revenue Code of 1986, as it may be
----
amended from time to time.

1.5 "Company" means AMP Incorporated or any successors thereto.
-------

1.6 "Compensation" means, with respect to a Severed Employee, such
------------
employee's (1) weekly rate of salary immediately prior to the Severance Date,
plus (2) 1/52nd of such employee's target bonus for the year in which such
employee incurs a Severance or for the year in which a Change of Control occurs,
whichever is higher. For purposes of the Plan, Compensation shall be determined
without regard to any salary reductions occurring following a Change of Control
which constitute Good Reason hereunder.

1.7 "Eligible Employee" means any employee of the Employer who is a
-----------------
Tier 1 Employee, Tier 2 Employee, Tier 3 Employee or Tier 4 Employee. An
Eligible Employee becomes a "Severed Employee" once he or she incurs a
----------------
Severance.

1.8 "Employer" means the Company or any of its subsidiaries.
--------

1.9 "Effective Date" shall mean the effective date of the Plan, which
--------------
shall be August 20, 1998.

1.10 "Exchange Act" shall mean the Securities Exchange Act of 1943, as
------------
amended from time to time.

1.11 "Excluded Employee" means each employee of the Employer (i) who,
-----------------
as of the date of a Change of Control, is a party to an Executive Severance
Agreement with the Company; (2) who is covered by a collective bargaining
agreement; or (3) who has elected to participate in the Company's 1998
Voluntary Early Retirement Program or who, prior to a Change of Control, has
received notice of inclusion in any other Company reduction in force programs.

1.12 "Good Reason" means the occurrence, on or after the date of a
-----------
Change of Control and without the affected Eligible Employee's written consent,
of (i) a reduction in the Eligible Employee's annual base salary from that in
effect

3
<PAGE>

immediately prior to the Change of Control other than as part of a general
reduction applicable to employees of the Company, any Person whose actions
result in a Change of Control and all affiliates of such Person; or (ii) the
relocation of the Eligible Employee's principal place of employment to a
location which increases his or her one way commuting distance by more than 50
miles.

1.13 "Plan" means the AMP Incorporated Employee Severance Plan, as set
----
forth herein, as it may be amended from time to time.

1.14 "Plan Administrator" means, prior to a Change in Control, a
------------------
committee consisting of the Chief Financial Officer, Treasurer and Chief Human
Resources Officer of the Company and following a Change of Control, a committee
consisting of three persons, at least two of whom were directors or executive
officers of the Company immediately prior to the Change of Control.

1.15 "Pending Change of Control" shall be deemed to have occurred,
-------------------------
whether before or after the Effective Date, if:

(i) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change of Control;

(ii) the Company or any Person publicly announces an intention
to take or to consider actions, including but not limited to proxy contests
or consent solicitations, which, if consummated, would constitute a Change
of Control;

(iii) any Person becomes the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
of the Company representing 15% or more of either the then outstanding
shares of common stock of the Company or the combined voting power of the
Company's then outstanding securities (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Company or its affiliates); or

(iv) the Board adopts a resolution to the effect that, for
purposes of this Plan, a Pending Change of Control has occurred.

4
<PAGE>

1.16 "Person" shall have the meaning given in Section 3(a)(9) of the
------
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) the Company or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its subsidiaries, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (iv) a
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.

1.17 "Severance" means the termination of an Eligible Employee's
---------
employment with the Employer on or within two years following the date of a
Change of Control, (i) by the Employer other than for Cause, or (ii) in the case
of a Tier 1 Employee or a Tier 2 Employee, for Good Reason. An Eligible
Employee will not be considered to have incurred a Severance if his or her
employment is discontinued by reason of the Eligible Employee's death or a
physical or mental condition causing such Eligible Employee's inability to
substantially perform his or her duties with the Employer, including, without
limitation, such condition entitling him or her to benefits under any sick pay
or disability income policy or program of the Employer.

1.18 "Severance Date" means the date on or after the date of the
--------------
Change of Control on which an Eligible Employee incurs a Severance.

1.19 "Severance Pay" means the payment determined pursuant to Section
-------------
2.1, 2.2, 2.3 or 2.4 hereof, as applicable.

1.20 "Tier 1 Employee" means any employee of the Employer listed on
---------------
Schedule A attached hereto.

1.21 "Tier 2 Employee" means any employee of the Employer listed on
---------------
Schedule B attached hereto.

1.22 "Tier 3 Employee" means any employee of the Employer who (i) is
---------------
not a Tier 1 or Tier 2 Employee and (ii) is, immediately prior to a Change of
Control, in the Company's salary band M.

1.23 "Tier 4 Employee" means an employee of the Employer (other than
---------------
an Excluded Employee) who (i) is not a Tier 1 Employee, Tier 2 Employee or

5
<PAGE>

Tier 3 Employee, and (ii) is an exempt employee immediately prior to a Change of
Control.

1.24 "Year of Service" means, with respect to a Severed Employee, each
---------------
twelve month period of actual service with the Company, whether or not
continuous, prior to such employee's Severance Date, rounded down to the nearest
whole number.

SECTION 2.BENEFITS
--------

2.1 Each Tier 1 Employee who incurs a Severance shall be entitled,
subject to Section 2.10, to receive Severance Pay equal to two week's
Compensation per Year of Service, provided, however, that in no event shall a
Tier 1 Employee who incurs a Severance receive less than six month's
Compensation nor more than one year's Compensation.

2.2 Each Tier 2 Employee who incurs a Severance shall be entitled,
subject to Section 2.10, to receive Severance Pay equal to two week's
Compensation per Year of Service, provided, however, that in no event shall a
Tier 2 Employee who incurs a Severance receive less than three month's
Compensation nor more than one year's Compensation.

2.3 Each Tier 3 Employee who incurs a Severance shall be entitled,
subject to Section 2.10, to receive Severance Pay equal to two week's
Compensation per Year of Service, provided, however, that in no event shall a
Tier 3 Employee who incurs a Severance receive less than two month's
Compensation nor more than nine month's Compensation.

2.4 Each Tier 4 Employee who incurs a Severance shall be entitled,
subject to Section 2.10, to receive Severance Pay equal to one week's
Compensation per Year of Service, provided, however, that in no event shall a
Tier 4 Employee who incurs a Severance receive less than one month's
Compensation nor more than nine month's Compensation.

2.5 Severance Pay shall be paid to a Severed Employee in a cash lump
sum, as soon as practicable (but in no event more than five business days)
following the Severance Date.

6
<PAGE>

2.6 The Company shall provide (i) each Severed Employee with
continued health care coverage, and (ii) each Tier 1, Tier 2 and Tier 3 Employee
who is a Severed Employee with outplacement services for a period of time equal
to the number of weeks of Compensation to which such Severed Employee is
entitled pursuant to Sections 2.1 through 2.4 hereof, as applicable. Health
care coverage shall be provided on the same basis as such coverage was provided
to the Severed Employee immediately prior to the Change of Control.
Outplacement services shall be provided on an individual basis for Tier 1
Employees and Tier 2 Employees and on a group basis for Tier 3 Employees.

2.7 In the event of a claim by an Eligible Employee as to the amount
or timing of any payment or benefit, such Eligible Employee shall present the
reason for his or her claim in writing to the Plan Administrator. The Plan
Administrator shall, within fourteen (14) days after receipt of such written
claim, send a written notification to the Eligible Employee as to its
disposition. In the event the claim is wholly or partially denied, such written
notification shall state the specific reason or reasons for the denial. In the
event an Eligible Employee wishes to appeal the denial of his or her claim, the
Eligible Employee may request a review of such denial by making application in
writing to the Plan Administrator, within sixty (60) days after receipt of such
denial or the expiration of the applicable fourteen day period, as applicable.
The Plan Administrator shall send a written notification to the Eligible
Employee of the final disposition of his or her appeal within 30 days of the
receipt of such written appeal.

2.8 The Company will pay to each Eligible Employee all reasonable
legal fees and expenses incurred by such Eligible Employee in pursuing any claim
under the Plan in which such Eligible Employee prevails in all material
respects.

2.9 The Company shall be entitled to withhold from amounts to be paid
to the Severed Employee hereunder any federal, state or local withholding or
other taxes or charges which it is from time to time required to withhold.

2.10 Notwithstanding anything in the Plan to the contrary, in the
event that any payment or benefit received or to be received by a Severed
Employee in connection with a Change of Control or such employee's Severance
(whether pursuant to the terms of this Plan, or any other plan, arrangement or
agreement with the Company, any Person whose actions result in a Change of
Control or any Person affiliated with the Company or such Person) (all such
payments and benefits, including the Severance Payments, being hereinafter
called "Total Payments") would not be

7
<PAGE>

deductible (in whole or part), by the Company, an affiliate or Person making
such payment or providing such benefit by reason of section 280G of the Code,
then, to the extent necessary to avoid such portion of the Total Payments being
nondeductible for such reason, the Severance Pay and, thereafter, the benefits
provided under Section 2.6 hereof, shall be reduced.

SECTION 3.PLAN ADMINISTRATION.
-------------------

3.1 The Plan Administrator shall administer the Plan and may
interpret the Plan, prescribe, amend and rescind rules and regulations under the
Plan and make all other determinations necessary or advisable for the
administration of the Plan, subject to all of the provisions of the Plan.

3.2 The Plan Administrator may delegate any of its duties hereunder
to such person or persons from time to time as it may designate.

3.3 The Plan Administrator is empowered, on behalf of the Plan, to
engage accountants, legal counsel and such other personnel as it deems necessary
or advisable to assist it in the performance of its duties under the Plan. The
functions of any such persons engaged by the Plan Administrator shall be limited
to the specified services and duties for which they are engaged, and such
persons shall have no other duties, obligations or responsibilities under the
Plan. Such persons shall exercise no discretionary authority or discretionary
control respecting the management of the Plan. All reasonable expenses thereof
shall be borne by the Employer.

SECTION 4.PLAN MODIFICATION OR TERMINATION.
--------------------------------

The Plan may be amended or terminated by the Board or a duly
appointed committee of the Board at any time; provided, however, that during the
-------- -------
pendency of and within six (6) months following the cessation of a Pending
Change of Control and within two years following a Change of Control, the Plan
may not be terminated nor may any amendment be adopted which is in any manner
adverse to the interests of Eligible Employees.

SECTION 5.GENERAL PROVISIONS.
------------------

5.1 Except as otherwise provided herein or by law, no right or
interest of any Eligible Employee under the Plan shall be assignable or
transferable, in whole

8
<PAGE>

or in part, either directly or by operation of law or otherwise, including
without limitation by execution, levy, garnishment, attachment, pledge or in any
manner; no attempted assignment or transfer thereof shall be effective; and no
right or interest of any Eligible Employee under the Plan shall be liable for,
or subject to, any obligation or liability of such Eligible Employee. When a
payment is due under this Plan to a Severed Employee who is unable to care for
his or her affairs, payment may be made directly to his or her legal guardian or
personal representative.

5.2 If the Employer is obligated by law or by contract to pay
severance pay, a termination indemnity, notice pay, or the like, or if the
Employer is obligated by law to provide advance notice of separation ("Notice
Period"), then any Severance Pay hereunder shall be reduced by the amount of any
such severance pay, termination indemnity, notice pay or the like, as
applicable, and by the amount of any compensation received during any Notice
Period.

5.3 Neither the establishment of the Plan, nor any modification
thereof, nor the creation of any fund, trust or account, nor the payment of any
benefits shall be construed as giving any Eligible Employee, or any person
whomsoever, the right to be retained in the service of the Employer, and all
Eligible Employees shall remain subject to discharge to the same extent as if
the Plan had never been adopted.

5.4 If any provision of this Plan shall be held invalid or
unenforceable such invalidity or unenforceability shall not affect any other
provisions hereof, and this Plan shall be construed and enforced as if such
provisions had not been included.

5.5 This Plan shall be binding upon the heirs, executors,
administrators successors and assigns, including each Eligible Employee, present
and future, and any successors to the Employer.

5.6 The headings and captions herein are provided for reference and
convenience only, shall not be considered part of the Plan, and shall not be
employed in the construction of the Plan.

5.7 The Plan shall not be funded. No Eligible Employee shall have
any right to, or interest in, any assets of any Employer which may be applied by
the Employer to the payment of benefits or other rights under this Plan.

5.8 Any notice or other communication required or permitted pursuant
to the terms hereof shall have been duly given when delivered or mailed by
United

9
<PAGE>

States Mail, first class, postage prepaid, addressed to the intended recipient
at his, her or its last known address.

5.9 This Plan shall be construed and enforced according to the laws
of the Commonwealth of Pennsylvania to the extent not preempted by federal law,
which shall otherwise control.

<PAGE>

EXHIBIT 7

AMENDMENT TO
AMP INCORPORATED PENSION PLAN

This Amendment is made to the AMP Incorporated Pension Plan (the
"Plan"), amended and restated effective January 1, 1989, and incorporating
further amendments through January 1, 1995. Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Plan.

WHEREAS, the Company has determined that it is in its best interest
and that of its stockholders to amend the Plan as set forth herein;

NOW THEREFORE, in accordance with Section 10.1 of the Plan, the Plan
shall be amended as follows, effective as of August 20, 1998:

1. The definition of "change in control" contained in the Plan is
amended in its entirety as follows:

For purposes of this Plan, a change in control of the Corporation
("Change in Control") shall be deemed to have occurred if the event
set forth in any one of the following paragraphs shall have occurred:

(a) any Person (as defined below) is or becomes the beneficial owner
(as defined in Rule 13d-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act")), directly or indirectly, of
securities of the Corporation (not including in the securities
beneficially owned by such Person any securities acquired directly
from the Corporation or its affiliates) representing 30% or more
of either the then outstanding shares of common stock of the
Corporation or the combined voting power of the Corporation's then
outstanding securities; or

(b) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who,
on on August 20, 1998, constitute the Board of Directors of the
Corporation (the "Board") and any new director (other than a
director whose initial assumption of office is in connection with
an actual or threatened election contest, including but
<PAGE>

not limited to a consent solicitation, relating to the election of
directors of the Corporation) whose appointment or election by the
Board or nomination for election by the Corporation's stockholders
was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors on the
date hereof or whose appointment, election or nomination for
election was previously so approved; or

(c) there is consummated a merger or consolidation of the Corporation
with any other corporation or the issuance of voting securities of
the Corporation in connection with a merger or consolidation of
the Corporation (or any direct or indirect subsidiary of the
Corporation) pursuant to applicable stock exchange requirements,
other than (A) a merger or consolidation that would result in the
voting securities of the Corporation outstanding immediately prior
to such merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity or any parent thereof) at least 66 2/3% of
the combined voting power of the voting securities of the
Corporation, or such surviving entity or any parent thereof,
outstanding immediately after such merger or consolidation, or (B)
a merger or consolidation effected to implement a recapitalization
of the Corporation (or similar transaction) in which no Person is
or becomes the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the
Corporation (not including in the securities beneficially owned by
such Person any securities acquired directly from the Corporation
or its affiliates) representing 30% or more of either the then
outstanding shares of common stock of the Corporation or the
combined voting power of the Corporation's then outstanding
securities; or

(d) the stockholders of the Corporation approve a plan of complete
liquidation or dissolution of the Corporation or there is
consummated an agreement for the sale or disposition by the
Corporation of all or substantially all of the Corporation's
assets, other than a sale or disposition by the Corporation of all
or substantially all of the Corporation's assets to an entity, at

2
<PAGE>

least 70% of the combined voting power of the voting securities
of which are owned by Persons in substantially the same
proportions as their ownership of the Corporation immediately
prior to such sale.

For the purpose of this definition, "Person" shall have the meaning
given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof, except that such term shall not include:

(i) the Corporation or any of its subsidiaries;

(ii) a trustee or other fiduciary holding securities under an
em ployee benefit plan of the Corporation or any of its
subsidiaries;

(iii) an underwriter temporarily holding securities pursuant to an
offering of such securities; or

(iv) a corporation owned, directly or indirectly, by the
stockholders of the Corporation in substantially the same
proportions as their ownership of stock of the Corporation.

The effective date of this Amendment shall be August 20, 1998. Except
as herein modified, the Plan shall remain in full force and effect.

3
<PAGE>

IN WITNESS WHEREOF, the Company has executed this Amendment as of the
date first set forth above.

AMP INCORPORATED

By:_________________________
Title: Chairman of the Board

And: ______________________
Title: Corporate Secretary

<PAGE>

EXHIBIT 8

LOGO

LOGO
August 21, 1998

Dear Fellow Shareholders:

On August 20, 1998, your Board of Directors took a number of important steps,
including the following two, to provide to all AMP constituencies, including
our shareholders, the opportunity to realize the full benefit of the values
inherent in AMP. First, the Board determined to reject AlliedSignal's cash
tender offer as inadequate, not reflective of the value or prospects of AMP--
particularly in light of AMP's recently announced profit improvement program,
and not in the best interests of AMP and its relevant constituencies, including
its shareholders. Second, the Board of Directors, approving a basic
recommendation of its Board committee regarding CEO succession reached before
AlliedSignal announced its offer, appointed a new management team committed to
lead aggressively the timely implementation of AMP's program to improve its
operating and financial performance.

THE OFFER

As you know, on August 10, 1998, AlliedSignal Inc. announced that its wholly
owned subsidiary, PMA Acquisition Corporation, commenced an unsolicited tender
offer for all outstanding shares of common stock of AMP Incorporated at $44.50
per share in cash.

AFTER CAREFUL CONSIDERATION, YOUR BOARD OF DIRECTORS, BY UNANIMOUS VOTE OF
THE DIRECTORS PRESENT, HAS UNANIMOUSLY DETERMINED THAT ALLIEDSIGNAL'S OFFER IS
INADEQUATE, DOES NOT REFLECT THE VALUE OR PROSPECTS OF AMP AND IS NOT IN THE
BEST INTERESTS OF AMP AND ITS RELEVANT CONSTITUENCIES, INCLUDING ITS
SHAREHOLDERS. ACCORDINGLY, THE BOARD BY SUCH UNANIMOUS VOTE RECOMMENDS THAT YOU
REJECT ALLIEDSIGNAL'S OFFER AND NOT TENDER ANY OF YOUR SHARES TO ALLIEDSIGNAL.

AMP's Board of Directors, assisted by Credit Suisse First Boston, its
financial advisor, Skadden, Arps, Slate, Meagher & Flom LLP, its principal
legal advisor, and other legal advisors, has reviewed AlliedSignal's offer
carefully. In particular, the offer was weighed against the expected benefits
of the profit improvement program announced by AMP in June prior to any recent
contacts from AlliedSignal and the commencement of the offer. As we announced,
this program, which is fully designed and in the process of being implemented,
is expected to result in estimated cost savings of at least $200 million during
1999, and in excess of $300 million annually in the ensuing years. Your Board
believes that there are substantially higher values inherent in AMP, as the
world's largest manufacturer of electrical and electronic connectors, which
should be realizable in the near term and beyond as the profit improvement
program takes effect.

It is clear to your Board of Directors that AlliedSignal's offer is an
opportunistic attempt by AlliedSignal to capture for its own shareholders the
significant benefits of this program that AMP expects to deliver to you. With
no apparent overlap or synergies between the two companies, AlliedSignal is
simply trying to adopt our program for its own benefit. AlliedSignal has
launched its offer at a time when AMP's business, like those of other companies
similarly situated, was under pressure from a significant, but ultimately
temporary, economic downturn in the Asia/Pacific region and, accordingly, when
AMP's stock price was near the low point of the past twelve years. By launching
its offer now, AlliedSignal is also seeking to move hurriedly before the
positive impact of our fully designed profit improvement program, which was
recently put in place, can even begin to be felt. Although AlliedSignal is
touting its offer as at a "premium" to AMP's pre-offer market price, the
"market" is temporarily depressed and, in reality, AlliedSignal's tactic is
designed to acquire AMP on the cheap.
<PAGE>

Simply put, as directors responsible to AMP, we strongly believe that
AlliedSignal's opportunistic offer clearly is not in the best interest of AMP,
its shareholders and other constituencies.

In reaching its determination and recommendation, the Board of Directors
took into account a variety of factors, including the opinion of its financial
advisor, Credit Suisse First Boston, that the AlliedSignal offer is
inadequate, from a financial point of view, to AMP shareholders. Your Board of
Directors was also concerned about the effect that this offer might have on
other relevant AMP constituencies, including our customers, suppliers,
employees and the communities being served by AMP.

A more detailed description of the reasons for your Board of Directors'
recommendation and the factors considered by the Board is contained in the
enclosed Schedule 14D-9. We urge you to read it carefully and in its entirety
so that you will be fully informed as to the Board of Directors'
recommendation.

Your Board of Directors is convinced that continuing actively to pursue our
strategic goals is in the best interests of AMP and the best way for AMP to
realize its inherent values. This does not mean that your Board will not
consider offers that reflect the full value of your company or steps to
enhance the delivery of value. In fact, the Board has instructed management,
with the assistance of AMP's financial and legal advisors, to seek to develop
financial or other alternatives, on a basis consistent with the pursuit of its
recently announced business strategy, for enhancing the value of AMP in the
nearer term. In addition, the Board of Directors has resolved not to adopt a
new rights plan for a period of at least six months following the expiration
of the existing plan on November 6, 1999, as, by such time, a substantial
portion of AMP's profit improvement plan is expected to have been implemented
and the benefits reflected in the value of AMP.

NEW MANAGEMENT TEAM

Effective as of today, I was elected Chairman and Chief Executive Officer of
AMP. James E. Marley and William J. Hudson are retiring from their roles as
Chairman, and Chief Executive Officer and President, respectively. Mr. Hudson
is assuming the position of Vice Chairman of the Board.

In addition, Herbert Cole, formerly Corporate Vice President and President,
Global Terminal and Connector Operations, has been elected Senior Vice
President for Operations, and Dr. Juergen Gromer, formerly Corporate Vice
President, Global Automotive Division, has been elected Senior Vice President,
Global Industry Businesses.

Having been a leader in the creation and structuring of AMP's efforts to
reshape itself as a more competitive and profitable company, I look forward to
taking full responsibility for the successful implementation of our profit
improvement program. With the appointment of Herbert Cole and Dr. Juergen
Gromer as senior executives, I believe we have the management team in place
with the focus and skills to implement this program. We, as a team, are
committed to moving AMP further and faster to unlock its inherent value. I am
confident that greater value for AMP and all its constituencies, including its
shareholders, will result.

Your Board of Directors and I greatly appreciate your continued support and
encouragement.

Sincerely,

/s/ Robert Ripp
Robert Ripp
Chairman and Chief Executive Officer

<PAGE>

EXHIBIT 9

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 BOARD OF DIRECTORS REJECTS
ALLIEDSIGNAL'S UNSOLICITED OFFER

------------------------------------------

HARRISBURG, Pennsylvania (August 21, 1998) -- AMP Incorporated (NYSE: AMP)
announced today that its Board of Director, by unanimous vote of the directors
present, has recommended that shareholders reject the unsolicited tender offer
by AlliedSignal, Inc. (NYSE: ALD) for $44.50 in cash per share for all of the
outstanding shares of AMP as not in the best interests of the Company, its
shareholders, employees, customers, suppliers and other relevant constituencies.

In its recommendation to AMP shareholders, the Board cited, among other things:

- - the Board's belief that the AlliedSignal offer is inadequate and does not
reflect the inherent value of AMP as the world's largest supplier of
electrical and electronic connectors;

- - the Board's commitment to revitalizing AMP and its belief that the Company's
stock price should increase significantly as the strategic initiatives
announced in June, prior to the commencement of the AlliedSignal offer,
start to take effect;

- - the depressing effect the disruption in the Asian market has had on AMP and
the trading price of its shares;

- - the written opinion dated August 20, 1998 of Credit Suisse First Boston that
the AlliedSignal offer is inadequate, from a financial point of view, to the
holders of shares of AMP (other than AlliedSignal and its affiliates);

- more -
<PAGE>

-2-

- - the lack of synergies between the respective businesses of AMP and
AlliedSignal; and

- - the numerous conditions to which the AlliedSignal offer is subject.

Accordingly, the Board recommends that AMP shareholders not tender
their shares to AlliedSignal.

Robert Ripp, AMP's newly elected chairman and chief executive officer, said,
"AlliedSignal has launched its offer at a time when AMP's business, like those
of other companies similarly situated, is under pressure from a significant, but
ultimately temporary, economic downturn in the Far East and, accordingly, when
AMP's stock price was near the low point of the past twelve years. Moreover,
AlliedSignal is seeking to move hurriedly before the positive impact of our
fully designed profit improvement plan, which was recently put in place, can
even begin to be felt. The offer is nothing more then than an attempt to buy
AMP on the cheap. AlliedSignal's offer is more than 20% below AMP's peak price
and 10% below our share price just a few months ago. It is clearly an
opportunistic attempt to grab a world industry leader at a bargain price."

After an in-depth review of AlliedSignal's offer by financial advisor Credit
Suisse First Boston and legal counsel Skadden, Arps, Slate, Meagher & Flom LLP,
the Board weighed the offer against the expected benefits to AMP and its
relevant constituencies, including shareholders, of the Company's profit
improvement plan, which was first announced in June 1998, a month prior to the
AlliedSignal offer. The plan is on track and 3500 employees are expected to
leave the Company through a combination of early retirement, attrition and
layoffs by year-end. Savings from those actions and others, combined with
expected improvement in sales, should generate 11% operating margins in the
fourth quarter, 13.5% operating margins in 1999 and 16.5% in 2000. Earnings per
share are expected to be $2.30 in 1999 and approximately $3.00 in 2000.

"I intend aggressively to pursue the implementation of AMP's profit improvement
initiatives, of which I am a principal architect," said Mr. Ripp. "I am sharply
focused on enhancing the value of AMP for the benefit of all its stakeholders.
AMP's business is best run by those who understand the industry and how to best
meet customers' needs. All of us at AMP are committed to moving the Company
further and faster to unlock its inherent value. I am confident that our plan
will create greater value than AlliedSignal's low-ball bid for AMP and all of
its constituencies in both the near and long-term. In addition, we have asked
our advisors to explore additional ways to enhance shareholder value while we
aggressively pursue our business strategy," he said.

AMP's profit improvement program during 1998 has included many actions to
simplify, focus, and grow the business, including: eliminating unprofitable
businesses such as the Connectware ATM business; announcing plans for selling
the sensor and touch screen businesses; reorganizing the radio frequency coax
connector business; closing and consolidating plants; expanding production in
China and increasing capacity in the cable business through a joint venture in
Asia/Pacific.

- more -

<PAGE>

-3-

Other initiatives include:

. REDUCTIONS IN SUPPORT STAFF AND OUTSOURCING OF SUPPORT FUNCTIONS
AMP's support staff is being reduced by 3,500 worldwide though a combination of
early retirement, attrition and layoffs. In addition, AMP will outsource
certain support activities to allow the Company to focus resources on core
businesses and provide flexibility to respond to fluctuations in product demand.

. PLANT CLOSINGS AND CONSOLIDATIONS
The streamlining and consolidation of the Terminal and Connector operation,
which represents the majority of AMP sales, will result in the closing of five
plants in 1998. Additionally, AMP is stepping up activities to support the fast
growing marketplace outside the United States by shifting production closer to
customers, thereby reducing transportation and other costs, and relying on
simpler, manual operations in each region for high-volume, quick turnaround
orders.

. SALES INITIATIVES
New customer-focused programs are being launched to make the ordering, pricing,
and delivery system simpler and more responsive to customers. The programs,
which will begin in the U.S., will be replicated in other regions of the world.
These include 24-hour customer service and shipment on more than 10,000 widely
used part numbers, simplified pricing and a larger sales force to improve
account coverage and presence at customer facilities.

AMP also announced today that it is filing with the Securities and Exchange
Commission, and will mail to shareholders, a Solicitation/Recommendation
Statement on Schedule 14D-9 setting forth the Board's recommendation with
respect to AlliedSignal's offer and the reasons therefor. Additional information
with respect to the Board's decision to recommend that shareholders reject the
AlliedSignal offer is contained in the Schedule 14D-9.

The Company also announced that the Board of Directors has authorized certain
amendments to AMP's Shareholder Rights Plan to enhance the Company's ability to
implement its profit improvement program. The amendments, which, among other
things, will make the rights nonredeemable following a majority change of
disinterested directors, in the Board of Directors, are described in the
Company's Statement on Schedule 14D-9 being filed with the Securities and
Exchange Commission. The Board of Directors also resolved not to adopt a new
rights plan for a period of at least 6 months following the expiration of the
existing plan on November 6, 1999, as a substantial portion of AMP's profit
improvement plan is expected to have been implemented and the benefits reflected
in the value of AMP.

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.

- more -
<PAGE>

-4-

This press release contains certain "forward-looking" statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Exchange Act, which are intended to be covered by the safe harbors
created thereby. Such statements should be considered as subject to risks and
uncertainties that exist in AMP's operations and business environment and could
render actual outcomes and results materially different than predicted. For a
description of some of the factors or uncertainties which could cause actual
results to differ, reference is made to the section entitled "Cautionary
Statements for Purposes of the `Safe Harbor'" in AMP's Annual Report on Form 10K
for the year ended December 31, 1997. In addition, the realization of the
benefits anticipated from the strategic initiatives described above will be
dependent, in part, on management's ability to execute its business plans and to
motivate properly the AMP employees, whose attention has been distracted by the
AlliedSignal offer and whose numbers will have been reduced as a result of these
initiatives.

# # #

AMP and certain other persons named below may be deemed to be participants in
the solicitation of revocations of consents in response to AlliedSignal's
consent solicitation. The participants in this solicitation may include the
directors of AMP (Ralph D. DeNunzio, Barbara H. Franklin, Joseph M. Hixon III,
William J. Hudson, Jr., Joseph M. Magliochetti, Harold A. McInnes, Jerome J.
Meyer, John C. Morley, Robert Ripp, Paul G. Schloemer and Takeo Shiina); the
following executive officers of AMP: Robert Ripp (Chairman and Chief Executive
Officer), William J. Hudson (Vice Chairman), William S. Urkiel (Corporate Vice
President and Chief Financial Officer), Herbert M. Cole (Senior Vice President
for Operations), Juergen W. Gromer (Senior Vice President, Global Industry
Businesses), Richard P. Clark (Divisional Vice President, Global Wireless
Products Group), Thomas DiClemente (Corporate Vice President and President,
Europe, Middle East, Africa), Rudolf Gassner (Corporate Vice President and
President, Global Personal Computer Division), Charles W. Goonrey (Corporate
Vice President and General Legal Counsel), John E. Gurski (Corporate Vice
President and President, Global Value-Added Operations and President, Global
Operations Division), David F. Henschel (Corporate Secretary), John H. Kegel
(Corporate Vice President, Asia/Pacific), Mark E. Lang (Corporate Controller),
Philippe Lemaitre (Corporate Vice President and Chief Technology Officer),
Joseph C. Overbaugh (Corporate Treasurer), Nazario Proietto (Corporate Vice
President and President, Global Consumer, Industrial and Power Technology
Division); and the following other members of management of AMP: Richard Skaare
(Director, Corporate Communication), Douglas Wilburne (Director, Investor
Relations) and Mary Rakoczy (Manager, Shareholder Services). As of the date of
this communication, none of the foregoing participants individually beneficially
own in excess of 1% of AMP's common stock or in the aggregate in excess of 2% of
AMP's common stock.

AMP has retained Credit Suisse First Boston Corporation ("CSFB") to act as its
financial advisor in connection with the AlliedSignal Offer, for which CSFB will
receive customary fees, as well as reimbursement of reasonable out-of-pocket
expenses. In addition, AMP has agreed to indemnify CSFB and certain related
persons against certain liabilities, including certain liabilities under the
federal securities laws, arising out of its engagement. CSFB is an investment
banking firm that provides a full range of financial services for institutional
and individual clients. CSFB does not admit that it or any of its directors,
officers or employees is a "participant" as defined in Schedule 14A promulgated
under the Securities Exchange Act of 1934, as amended, in the solicitation, or
that Schedule 14A requires the disclosure of certain information concerning
CSFB. In connection with CSFB's role as financial advisor to AMP, CSFB and the
following investment banking employees of CSFB may communicate in person, by
telephone or otherwise with a limited number of institutions, brokers or other
persons who are stockholders of AMP: Alan Howard, Steven Koch, Scott Lindsay,
and Lawrence Hamdan. In the normal course of its business, CSFB regularly buys
and sells securities issued by AMP for its own account and for the accounts of
its customers, which transactions may result in CSFB and its associates having a
net "long" or net "short" position in AMP securities, or option contracts or
other derivatives in or relating to such securities. As of August 19, 1998,
CSFB had a net long position of 124,466 shares of AMP common stock.

<PAGE>

EXHIBIT 10

LOGO

August 20, 1998

Board of Directors
AMP Incorporated
470 Friendship Road
Harrisburg, PA 17111

Members of the Board:

On August 10, 1998, PMA Acquisition Corporation (the "Purchaser"), a wholly
owned subsidiary of AlliedSignal Inc. ("Parent"), commenced a tender offer for
all outstanding shares of common stock, no par value (the "Shares"), of AMP
Incorporated ("AMP"), including the associated common stock purchase rights,
for $44.50 per Share, net to the seller in cash, upon the terms and subject to
the conditions set forth in the Offer to Purchase, dated August 10, 1998, and
the related letter of transmittal (which together constitute the "AlliedSignal
Offer").

You have asked us to advise you with respect to the adequacy of the
AlliedSignal Offer to the holders of Shares (other than Parent and its
affiliates), from a financial point of view.

In arriving at our opinion, we have reviewed and considered the AlliedSignal
Offer and the related Tender Offer Statement on Schedule 14D-1 filed by Parent
and the Purchaser with the Securities and Exchange Commission (the
"Commission") and the Solicitation/Recommendation Statement on Schedule 14D-9
which we understand may be filed by AMP with the Commission. We have also
reviewed certain publicly available business and financial information relating
to AMP and certain other information, including financial forecasts, provided
to us by AMP, and have met with the management of AMP to discuss the business
and prospects of AMP.

We have also considered certain financial and stock market data relating to
AMP, and we have compared such data with similar data for other publicly held
companies in businesses similar to AMP. In addition, we have considered the
financial terms of certain other transactions which have recently been
effected. We have also considered such other information, financial studies,
analyses and investigations and financial, economic and market criteria which
we deemed relevant.

In connection with our review, we have not assumed any responsibility for
independent verification of any of the foregoing information, including the
information in the AlliedSignal Offer, and we have relied on all such
information being complete and accurate in all material respects. With respect
to the financial forecasts, including operating cost savings projected to be
realized through AMP's various cost reduction plans, we have assumed that they
have been reasonably prepared on bases reflecting the best currently available
estimates and judgments of AMP's management as to the future financial
performance of AMP. In addition, we have not been requested to make, and have
not made, an independent evaluation or appraisal of the assets or liabilities
(contingent or otherwise) of AMP, nor have we been furnished with any such
evaluations or appraisals. Our opinion is necessarily based upon financial,
economic, market and other conditions as they exist and can be evaluated on the
date hereof.
<PAGE>

LOGO

We are acting as financial advisor to AMP in connection with the AlliedSignal
Offer and will receive a fee from AMP for our services. We will also receive a
fee for rendering this opinion.

We have also in the past performed financial advisory services for AMP and have
received customary fees for such services.

In the ordinary course of our business, we and our affiliates may actively
trade the debt and equity securities of both AMP and Parent for our and such
affiliates' own accounts and for the accounts of customers and, accordingly,
may at any time hold a long or short position in such securities.

It is understood that this letter is for the information of the Board of
Directors in connection with its consideration of the AlliedSignal Offer, does
not constitute a recommendation to any shareholder as to whether or not such
shareholder should tender Shares pursuant to the AlliedSignal Offer or vote in
favor of any proposal presented to shareholders in connection therewith, and is
not to be quoted or referred to, in whole or in part, in any registration
statement, prospectus, or proxy statement, or in any other written document
used in connection with the offering or sale of securities, nor shall this
letter be used for any other purposes, without our prior written consent,
provided that this letter may be included in its entirety in, and referred to
in, the Schedule 14D-9 required to be filed by AMP with the Commission.

Based upon and subject to the foregoing, it is our opinion that, as of the date
hereof, the AlliedSignal Offer is inadequate, from a financial point of view,
to the holders of Shares (other than Parent and its affiliates).

Very truly yours,

CREDIT SUISSE FIRST BOSTON CORPORATION

<PAGE>

EXHIBIT 11

SECURITIES TRANSACTION CHART

I. SHARES PURCHASED BY AMP INCORPORATED.

The following numbers of Shares have been purchased on behalf of AMP in
brokerage transactions in the past 60 days:

<TABLE>
<CAPTION>
PURCHASER TRADE DATE # SHARES COST/SHARE
--------- ---------- -------- ----------
<S> <C> <C> <C>
AMP....................................... 6/11/98 20,000 $37.581
AMP....................................... 6/12/98 20,000 37.230
AMP....................................... 6/15/98 5,000 36.728
AMP....................................... 6/16/98 3,000 36.332
AMP....................................... 6/18/98 5,000 37.165
AMP....................................... 6/19/98 5,000 36.674
AMP....................................... 6/22/98 30,000 35.514
AMP....................................... 6/23/98 4,500 34.978
AMP....................................... 6/24/98 20,000 35.806
AMP....................................... 6/25/98 10,000 35.456
AMP....................................... 6/29/98 2,000 35.353
AMP....................................... 6/30/98 16,600 34.849
AMP....................................... 7/1/98 30,000 34.5750
AMP....................................... 7/6/98 20,000 34.2359
AMP....................................... 7/7/98 20,000 34.2628
AMP....................................... 7/8/98 20,000 33.6375
AMP....................................... 7/9/98 20,000 33.0713
AMP....................................... 7/10/98 20,000 32.9356
AMP....................................... 7/13/98 20,000 32.1769
AMP....................................... 7/14/98 20,000 31.8466
AMP....................................... 7/15/98 5,500 31.6534
AMP....................................... 7/16/98 15,000 31.7604
AMP....................................... 7/27/98 50,000 29.6188
AMP....................................... 7/28/98 50,000 29.2456
AMP....................................... 7/29/98 5,000 29.2500
AMP....................................... 7/30/98 21,000 29.5685
AMP....................................... 7/31/98 5,000 29.6250
AMP....................................... 8/3/98 19,000 29.0553
AMP....................................... 8/4/98 3,500 28.4643
</TABLE>

II. OPEN MARKET TRANSACTIONS.

Set forth below is a list of open market transactions in Shares conducted by
executive officers and directors of AMP within the past 60 days:

1. Thomas DiClemente purchased, in the open market on July 28, 1998, 900
Shares at a price of $29.375 per share and 100 Shares at a price of
$29.3125 per share.

2. Mark Lang purchased, 172.0436 Shares on August 8, 1998, pursuant to a
voluntary cash payment through AMP's Dividend Reinvestment Plan, at a price
of $29.0625 per share and 300 Shares, on July 27, 1998, in the open market,
at a price of $29.75 per share.

3. Hal McInnes disposed of 382 Shares by way of a gift of such shares
made on June 17, 1998.

<PAGE>

III. 401K FUNDING.

Set forth below are transactions in Shares with respect to purchases made by
executive officers and directors of AMP pursuant to AMP's 401(k) Plan in the
past 60 days:

1. Mark Lang purchased, by investing in the AMP stock fund, 1,683.03
Shares at a price of $29.625 per share on July 27, 1998.

2. Joseph Overbaugh purchased, by investing in the AMP stock fund,
508.475 Shares at a price of $29.50 per share on July 28, 1998.

IV. DEFERRED COMPENSATION PLAN.

The following are transactions in Shares under AMP's Deferred Compensation
Plan in the past 60 days:

1. On July 28, 1998, Thomas DiClemente reallocated previously deferred
compensation into an AMP stock account, in an amount equal to the value of
990.86 Shares at a price of $29.50 per share.

2. On July 27, 1998, Philippe Lemaitre reallocated previously deferred
compensation into an AMP stock account, in an amount equal to the value of
5,817.5 Shares at a price of $29.625 per share.

3. On July 29, 1998, Joseph Overbaugh reallocated previously deferred
compensation into an AMP stock account, in an amount equal to the value of
508.48 Shares at a price of $29.50 per share.

4. On July 27, 1998, Robert Ripp reallocated previously deferred
compensation into an AMP stock account, in an amount equal to the value of
10,000 Shares at a price of $29.625 per share.

5. On July 27, 1998, William Urkiel reallocated previously deferred
compensation into an AMP stock account, in an amount equal to the value of
2,000 Shares at a price of $29.625 per share.

V. STOCK OPTION AWARDS.

(a) On July 1, 1998, AMP granted a total of 16,000 Non-Qualified Options
("NQOs") to purchase Shares at an exercise price of $34.5625 per share to the
directors identified below in the amounts indicated below:

1. Ralph DeNunzio received an NQO award to purchase 2,000 Shares.

2. Barbara Franklin received an NQO award to purchase 2,000 Shares.

3. Joseph Hixon received an NQO award to purchase 2,000 Shares.

4. Joseph Magliochetti received an NQO award to purchase 2,000 Shares.

5. Jerome Meyer received an NQO award to purchase 2,000 Shares.

6. John Morley received an NQO award to purchase 2,000 Shares.

7. Paul Schloemer received an NQO award to purchase 2,000 Shares.

8. Takeo Shiina received an NQO award to purchase 2,000 Shares.

(b) On July 21, 1998, AMP granted 1,664,900 NQOs and 906,500 Incentive Stock
Options ("ISOs") to purchase Shares at an exercise price of $30.375 per share.
Included in the July 21, 1998 option grants were grants to the AMP executive
officers identified below:

1. Richard Clark received an ISO award to purchase 3,200 Shares and an
NQO award to purchase 6,500 Shares.

2. Herbert Cole received an ISO award to purchase 3,200 Shares and an NQO
award to purchase 25,400 Shares.

3. Thomas DiClemente received an ISO award to purchase 3,200 Shares and
an NQO award to purchase 10,500 Shares.

2
<PAGE>

4. Rudolf Gassner received an ISO award to purchase 3,200 Shares and an
NQO award to purchase 10,000 Shares.

5. Charles Goonrey received an ISO award to purchase 3,200 Shares and an
NQO award to purchase 8,900 Shares.

6. Juergen Gromer received an NQO award to purchase 17,400 Shares.

7. John Gurski received an ISO award to purchase 3,200 Shares and an NQO
award to purchase 24,000 Shares.

8. David Henschel received an ISO award to purchase 3,200 Shares and an
NQO award to purchase 3,700 Shares.

9. John Kegel received an ISO award to purchase 3,200 Shares and an NQO
award to purchase 7,300 Shares.

10. Mark Lang received an ISO award to purchase 3,200 Shares and an NQO
award to purchase 10,800 Shares.

11. Philippe Lemaitre received an ISO award to purchase 3,200 Shares and
an NQO award to purchase 11,400 Shares.

12. Nazario Proietto received an ISO award to purchase 3,200 Shares and
an NQO award to purchase 9,800 Shares.

13. Joseph Overbaugh received an ISO award to purchase 3,200 Shares and
an NQO award to purchase 8,800 Shares.

14. Robert Ripp received an ISO award to purchase 3,200 Shares and an NQO
award to purchase 37,900 Shares.

15. William Urkiel received an ISO award to purchase 3,200 Shares and an
NQO award to purchase 15,000 Shares.

(c) In addition to the option grants identified above, on June 23, 1998, AMP
Canada, a subsidiary of AMP, granted 14,600 NQOs to purchase Shares at an
exercise price of $35.8125 and on June 25, 1998, AMP-Holland B.V., a
subsidiary of AMP, granted 34,800 NQOs to purchase Shares at an exercise price
of $35.3125 per share.

VI. STOCK BONUS DISTRIBUTION.

On July 27, 1998, AMP issued a total of 3,417 Shares pursuant to the
conversion of previously awarded stock bonus units. Included among recipients
of Shares upon conversion of the stock bonus units were the following
executive officers:

1. Thomas DiClemente received 111 Shares upon conversion of his stock
bonus units.

2. Rudolf Gassner received 141 Shares upon conversion of his stock bonus
units.

3. Juergen Gromer received 212 Shares upon conversion of his stock bonus
units.

VII. PERFORMANCE RESTRICTED SHARES.

As of August 6, 1998, AMP has reserved 158,200 shares of common stock for
issuance in connection with performance restricted stock awards issued on July
21, 1998. Included in the July 21, 1998 performance restricted stock awards
were awards to the AMP executive officers identified below:

1. On July 21, 1998, AMP awarded to Robert Ripp 27,900 restricted shares.

2. On July 21, 1998, AMP awarded to William Urkiel 12,400 restricted
shares.

3. On July 21, 1998, AMP awarded to John Gurski 18,500 restricted shares.

4. On July 21, 1998, AMP awarded to Herbert Cole 19,500 restricted shares

5. On July 21, 1998, AMP awarded to Thomas DiClemente 9,300 restricted
shares.

6. On July 21, 1998, AMP awarded to John Kegel 7,100 restricted shares.

7. On July 21, 1998, AMP awarded to Juergen Gromer 11,900 restricted
shares.

8. On July 21, 1998, AMP awarded to Rudolf Gassner 9,000 restricted
shares.

9. On July 21, 1998, AMP awarded to Nazario Proietto 8,800 restricted
shares.

10. On July 21, 1998, AMP awarded to Richard Clark 6,600 restricted
shares.

11. On July 21, 1998, AMP awarded to Philippe Lemaitre 9,900 restricted
shares.

<PAGE>

EXHIBIT 12

AMENDMENT No. 2 TO THE RIGHTS AGREEMENT
---------------------------------------

Amendment No. 2 to the Rights Agreement, dated as of August 12, 1998 (the
"Amendment No. 2"), by and between AMP Incorporated, a Pennsylvania corporation
(the "Company"), and ChaseMellon Shareholder Services L.L.C., a limited
liability company organized under the laws of the State of New Jersey (the
"Rights Agent").

WHEREAS, on October 28, 1989 the Company and Manufacturers Hanover Trust
Company, a New York corporation ("MHTCo"), entered into a Rights Agreement ("the
Original Agreement") and, on September 4, 1992, the Company and Chemical Bank
(as successor to MHTCo.) entered into an amendment thereto (the Original
Agreement, as amended by such amendment, is hereinafter referred to as the
"Agreement"), the terms of which are incorporated herein by reference and made a
part hereof;

WHEREAS, effective January, 1995, Chemical Bank and Mellon Bank Corp.
formed a joint venture, ChaseMellon Shareholder Services L.L.C., that was
assigned and assumed all responsibilities of Chemical Bank under the Agreement;
and

WHEREAS, the Company, with the approval of the Board of Directors of the
Company, and the Rights Agent have mutually agreed to modify the terms of the
Agreement in certain respects.

NOW, THEREFORE, in consideration of the premises and mutual agreements
herein set forth, and intending to be legally bound hereby, the parties hereto
agree that the Agreement shall be and hereby is amended in the following manner:

Section 1. Recognition of ChaseMellon Shareholder Services L.L.C. as
---------------------------------------------------------
Successor Rights Agent. ChaseMellon Shareholder Services L.L.C., as the
- ----------------------
successor Rights Agent to Chemical Bank, is substituted as the party that
entered into the Agreement with the Company and is hereby entitled to all the
privileges and immunities afforded to the Rights Agent under the terms and
conditions of the Agreement, as amended hereby, and that, unless and until a
successor is appointed, all reference in the Agreement to the Rights Agent shall
be deemed to refer to ChaseMellon Shareholder Services L.L.C.

<PAGE>

Section 2. Amendment of "Concerning the Rights Agent" Section. Section
--------------------------------------------------
18(a) is hereby modified and amended by inserting the following sentence at the
end of such subsection:

"Anything to the contrary notwithstanding, in no event shall the Rights
Agent be liable for special, indirect, consequential or incidental loss or
damage of any kind whatsoever (including but not limited to lost profits),
even if the Rights Agent has been advised of the likelihood of such loss or
damage."

Section 3. Amendment of "Change of Rights Agent" Section. Section 21 of
---------------------------------------------
the Rights Agreement is hereby modified and amended by deleting the fifth
sentence in its entirety and replacing it with:

"Any successor Rights Agent, whether appointed by the company or by such a
court, shall be either (a) a corporation organized and doing business under
the laws of the United States or of any state of the United States, in good
standing, which is authorized under such laws to exercise corporate trust
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100,000,000 or (b) an affiliate
of such a corporation."

Section 4. Amendment of "Notices" Section. Section 25 is amended to
------------------------------
substitute the following name and address for the Rights Agent:

ChaseMellon Shareholder Services L.L.C.
450 West 33rd Street, 15th Floor
New York, New York 10001-2697
Attention: Stock Transfer Administration

Section 5. Rights Agreement as Amended. The term "Agreement" as used in
---------------------------
the Agreement shall be deemed to refer to the Agreement as amended hereby and
shall be effective as of the date hereof. All references hereinafter to
Amendment No. 2 shall be deemed to refer to this Amendment No. 2. It is
expressly understood and agreed that except as provided above, all terms,
conditions and provisions contained in the Agreement shall remain in full force
and effect without any further change or modification whatsoever.

2
<PAGE>

IN WITNESS WHEREOF, the parties have caused this Amendment No. 2 to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

Attest: AMP Incorporated

/s/ D.F. Henschel /s/ William J. Hudson
By: _____________________________ By: _____________________________
Name: D.F. Henschel Name: William J. Hudson
Title: Corporate Secretary Title: Chief Executive Officer
and Associate General and President
Legal Counsel

Attest: ChaseMellon Shareholder
Services L.L.C.

/s/ Laura R. Picone /s/ Frances A. Wixted
By: _____________________________ By: ______________________________
Name: Laura R. Picone Name: Frances A. Wixted
Title: Vice President Title: Vice President

<PAGE>

EXHIBIT 13

AMENDMENT No. 3 TO THE RIGHTS AGREEMENT
---------------------------------------

Amendment No. 3 to the Rights Agreement, dated as of August 20, 1998 (the
"Amendment No. 3"), by and between AMP Incorporated, a Pennsylvania corporation
(the "Company"), and ChaseMellon Shareholder Services L.L.C., a limited
liability company organized under the laws of the State of New Jersey (the
"Rights Agent").

WHEREAS, on October 28, 1989 the Company and Manufacturers Hanover Trust
Company, a New York corporation ("MHTCo"), entered into a Rights Agreement
("the Original Agreement");

WHEREAS, on September 4, 1992, the Company and Chemical Bank (as successor
to MHTCo.) entered into Amendment No. 1 to the Rights Agreement and on August
12, 1998, the Company and ChaseMellon Shareholder Services L.L.C. (as successor
to Chemical Bank) entered into Amendment No. 2 to the Rights Agreement (the
Original Agreement, as amended by each of the amendments is hereinafter referred
to as the "Agreement" and the terms of which are incorporated herein by
reference and made a part hereof); and

WHEREAS, the Company, with the approval of the Board of Directors of the
Company, and the Rights Agent have mutually agreed to modify the terms of the
Agreement in certain respects.

Section 1. Amendment of "Certain Definitions" Section.
------------------------------------------

(a) The definition of "Qualifying Offer" contained in Section 1 of
the Agreement is hereby amended by adding after the word "shareholders" and
before the period, the following:

", provided that the offer shall have been consummated at a time when the
Rights are redeemable in accordance with Section 23(a) hereof.
<PAGE>

Section 2. Amendment of "Issue of Rights Certificates" Section. The first
---------------------------------------------------
sentence of paragraph (a) of Section 3 of the Agreement is hereby amended, in
its entirety, to read as follows:

"Until the earliest of (i) the close of business on the tenth Business Day
after the Stock Acquisition Date, (ii) the close of business on the tenth
Business Day (or such later date as the Board shall determine) after the date
that a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan) is
first published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act, if upon consummation
thereof, such Person would be an Acquiring Person, or (iii) the date on which
the Rights Certificates (as hereinafter defined) are distributed in accordance
with Section 13(e) hereof (the earliest of (i), (ii), and (iii) being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the holders of
the Common Stock (which Certificates for common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Common Stock (including a transfer to the Company)."

Section 3. Amendment of "Consolidation, Merger or Sale or Transfer of
----------------------------------------------------------
Assets, Cash Flow or Earning Power" Section. The first sentence of paragraph
- -------------------------------------------
(a) of Section 13 of the Agreement is hereby amended by deleting the phrase
"following the Stock Acquisition Date and by adding in clause (y) of such
paragraph after the word "property" and before the comma the following:

"or the shares of Common Stock held by stockholders of the Company
immediately prior to the consummation of the transaction which remain
outstanding shall constitute less than 50% of the total number of shares of
Common Stock outstanding immediately following consummation of the
transaction".

Section 13 is further amended by adding at the end thereof a new paragraph
(e) to read as follows:

"(e) The Company covenants and agrees not to consummate a transaction
constituting a Section 13 Event, unless a Distribution Date shall have occurred
as a

2
<PAGE>

result of the actions described in clauses (i) or (ii) of Section 3(a) hereof or
as a result of the Board of Directors taking all actions as may be necessary to
cause Rights Certificates to be distributed as contemplated by clause (iii) of
Section 3(a) hereof."

Section 4. Amendment of "Redemption and Termination" Section. Paragraph
-------------------------------------------------
(a) of Section 23 of the Agreement is hereby amended, in its entirety, to read
as follows:

"(a) The Board of Directors of the Company may, at its option, at any time
prior to the earliest of (i) the close of business on the tenth Business Day
following the Stock Acquisition Date (or, if the Stock Acquisition Date shall
have occurred prior to the Record Date, the close of business on the tenth
Business Day following the Record Date), (ii) the Final Expiration Date, or
(iii) if any Person shall have announced an intention to engage in a transaction
which, if successful, would have resulted in (A) such Person becoming an
Acquiring Person or (B) a Section 13 Event (in either case which was not
solicited in advance by the Board of Directors) (collectively, an "Unsolicited
Acquisition Proposal"), the first time thereafter at which there is a change in
the directors in office (including as a result, in whole or in part, of an
increase in the size of the Board and the election of new directors) such that
persons who were disinterested directors (as such term is defined in Section
1715(e) of the Pennsylvania BCL) immediately prior to the first such Unsolicited
Acquisition Proposal (together with any successors thereto who were approved by
the Board of Directors prior to their election) do not constitute a majority of
the members of the Board of Directors, redeem all but not less than all the then
outstanding Rights at a redemption price of $.01 per Right, as such amount may
be appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired. The Company may, at its
option, pay the Redemption Price in cash, shares of Common Stock (based on the
Current Market Price as defined in Section 11(d) hereof, of the Common Stock at
the time of redemption) or any other form of consideration deemed appropriate by
the Board of Directors of the Company."

Section 5. Amendment to "Supplements and Amendments" Section. Section 26
-------------------------------------------------
of the Agreement is amended, in its entirety, to read as follows:

3
<PAGE>

"Prior to the Distribution Date and subject to the penultimate sentence of
this Section 26, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of Common Stock. In
addition, the Company and the Rights Agent shall at any time, if the Company so
directs, supplement or amend this Agreement without the approval of any
holders of Rights Certificates in order (i) to cure ambiguity, (ii) to correct
or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder or (iv) to change or supplement the provisions hereunder
in any manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Rights Certificates (other
than an Acquiring Person). Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 26, the Rights Agent
shall execute such supplement or amendment. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Common Stock. The foregoing notwithstanding, no amendment of
this Agreement may be effected at a time when the Rights are not redeemable,
except as permitted by clauses (i) or (ii) of the second sentence of this
Section 26."

Section 6. Rights Agreement as Amended. The term "Agreement" as used in
---------------------------
the Agreement shall be deemed to refer to the Agreement as amended hereby and
shall be effective as of the date hereof. All references hereinafter to
Amendment No. 3 shall be deemed to refer to this Amendment No. 3. It is
expressly understood and agreed that except as provided above, all terms,
conditions and provisions contained in the Agreement shall remain in full force
and effect without any further change or modification whatsoever.

4
<PAGE>

IN WITNESS WHEREOF, the parties have caused this Amendment No. 3 to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

Attest: AMP Incorporated

/s/ David F. Henschel /s/ Robert Ripp
By:__________________________ By:_______________________________
Name: David F. Henschel Name: Robert Ripp
Title: Corporate Secretary Title: Chairman and Chief
Executive Officer

Attest: ChaseMellon Shareholder
Services L.L.C.

/s/ Laura R. Picone /s/ Frances A. Wixted
By:_________________________ By:______________________________
Name: Laura R. Picone Name: Frances A. Wixted
Title: Vice President Title: Vice President

<PAGE>

EXHIBIT 14

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

- - - - - - - - - - - - - - - - - - - X
ALLIEDSIGNAL CORPORATION,
a Delaware Corporation, :
P.O. Box 3000 :
Morristown, NJ 07962-2496
:
Plaintiff, :

-against- :
C.A. No. 98-CV-4058
AMP, INC., :
a Pennsylvania Corporation,
470 Friendship Road :
Harrisburg, PA 17111
:
Defendant.
- - - - - - - - - - - - - - - - - - - X

COMPLAINT FOR
DECLARATORY AND INJUNCTIVE RELIEF
---------------------------------

Plaintiff AlliedSignal Corporation ("AlliedSignal"), by its undersigned
attorneys, as and for its Complaint, alleges upon knowledge with respect to
itself and its own acts, and upon information and belief as to all other
matters, as follows:

<PAGE>

Nature of the Action
--------------------

1. AlliedSignal has today announced that it will commence a tender offer
for the stock of defendant AMP, Inc. ("AMP") at $44.50 per share, a price
representing a premium of approximately 50% over the closing trading price of
AMP common stock on August 3, 1998. This action for injunctive and declaratory
relief is brought to ensure that AlliedSignal's statutory and constitutional
rights to make its tender offer to AMP stockholders and to exercise its rights
under the federal proxy rules are protected, while also ensuring the rights of
all AMP stockholders to consider AlliedSignal's offer. AlliedSignal also seeks
to prevent AMP from manipu lating or otherwise subverting the process of
corporate democracy by impermissibly taking action to frustrate the consent
solicitation that AlliedSignal will have to conduct to gain majority
representation on the AMP Board of Directors if AMP attempts to obstruct
AlliedSignal's tender offer. This action also seeks relief declar ing AMP's so-
called "dead hand" poison pill to be inapplicable or legally impermissi ble.

Parties
-------
2. Plaintiff AlliedSignal is a Delaware corporation with its principal
executive offices in Morristown, New Jersey. AlliedSignal is a manufactur ing
company with operations in the aerospace, automotive and engineered materials

2
<PAGE>

businesses. AlliedSignal's 1997 revenues were nearly $15 billion. AlliedSignal
is the beneficial owner of 100 shares of AMP common stock.

3. 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, interconnec
tion systems and connector-intensive assemblies.

Jurisdiction and Venue
----------------------

4. This Court has jurisdiction over this action pursuant to 28 U.S.C.
(S)(S) 1331, 1332 and 1367. The amount in controversy is in excess of $75,000.

5. Venue is proper in this District under 28 U.S.C. (S) 1391 (b) and (c).

AlliedSignal's Offer
--------------------

6. On July 29, 1998, AlliedSignal Chairman and Chief Executive Officer
("CEO") Larry Bossidy telephoned AMP's CEO and President William J. Hudson, to
determine whether AMP would be interested in pursuing a business combination
with AlliedSignal. Mr. Hudson was unavailable to speak with Mr. Bossidy, and he
did not thereafter return Mr. Bossidy's telephone call.

7. On July 30, 1998, Mr. Bossidy sent a letter to Mr. Hudson proposing a
combination of AlliedSignal and AMP. The letter stated that

3
<PAGE>

AlliedSignal was prepared to offer $43.50 per share in cash for all of AMP's out
standing shares, at a premium of approximately 50% over the market value.

8. AMP has not responded to Mr. Bossidy's July 30 letter.

9. On August 4, 1998, AlliedSignal announced that it will commence within
five (5) business days a tender offer for the stock of defendant AMP at $44.50
per share (the "Tender Offer"), which, as stated in Mr. Bossidy's July 30, 1998
letter, represents approximately a 50% premium over the closing trading price of
AMP common stock on August 3, 1998. The Tender Offer gives AMP shareholders the
opportunity to accept the Offer if they determine it is in their best interests.
Upon consummation of the Tender Offer, AlliedSignal intends to acquire the
remaining shares of AMP in a second-step merger in which AMP shareholders will
receive $44.50 in cash for each AMP share they own.

10. AlliedSignal's Tender Offer and second-step merger cannot be
consummated unless the AMP Board -- voluntarily or by direction of a court --
removes or makes inapplicable various anti-takeover devices, including AMP's
"poison pill" and certain provisions of the Pennsylvania Business Corporation
Law ("PBCL").

11. In light of AMP's failure to respond to AlliedSignal's July 30, 1998
letter, the current AMP Board cannot be expected to facilitate AlliedSignal's
Tender Offer and second-step merger, but can be expected, instead, to maintain

4
<PAGE>

AMP's anti-takeover devices in place and actively oppose the Tender Offer and
merger. For this reason, AlliedSignal is preparing to conduct a consent
solicitation (the "Consent Solicitation") to gain majority representation on the
AMP Board of Directors by electing individuals nominated by AlliedSignal who
will support a sale of AMP to AlliedSignal, subject to their fiduciary duties to
AMP shareholders.

AMP's Anti-Takeover Devices
---------------------------

12. The "Dead Hand" Poison Pill. Foremost among the numerous anti-
takeover devices at AMP's disposal is its shareholders' "rights plan," better
known as a "poison pill" (the "Poison Pill"). As part of the Poison Pill, the
Board authorized and declared a dividend of one common share purchase right (a
"Right") per outstanding share of common stock of AMP, payable to shareholders
of record as of the close of business on November 6, 1989.

13. The Poison Pill provides that the Rights do not become exercisable
until ten business days following the first public announcement that a person
(an "Acquiring Person") has acquired beneficial ownership of 20% or more of the
outstanding shares of AMP common stock (the "Stock Acquisition Date"), at which
time each holder of a Right, other than an Acquiring Person, is entitled, upon
exercise of the Right to receive common stock having a market value equal to two
times the Purchase Price. The effect of this provision (the "Flip-In Provision")
thus

<PAGE>

would be a massive dilution of the value of the holdings of an unwanted acquiror
like AlliedSignal.

14. The Dead Hand Restriction. The Board may redeem the Poison Pill until
--------------------------
10 business days after a person becomes an Acquiring Person. The Board's
ability to redeem the Rights, however, is purportedly restricted by a provision
of the Poison Pill that serves no purpose other than to entrench the current
Board (the "Dead Hand Restriction").

15. Under the Dead Hand Restriction, redemption of the Poison Pill
requires the approval of a majority of Continuing Directors (i.e., members of
the Board who are not Acquiring Persons or representatives of an Acquiring
Person, and either (x) were directors prior to the institution of the Poison
Pill or (y) are nominated by a majority of Continuing Directors) if effected (i)
after a person becomes an Acquiring Person but prior to the expiration of a ten
business day period, or (ii) after a change (resulting from a proxy or consent
solicitation) in a majority of the directors in office at the time of the
commencement of a proxy or consent solicitation. Furthermore, the Dead Hand
Restriction provides that the Poison Pill can be amended only by Continuing
Directors.

16. Under the Dead Hand Restriction, directors, other than Continuing
Directors, elected pursuant to a consent or proxy solicitation in which an
Acquiring Person (or a person who intends to become an Acquiring Person)

<PAGE>

participates, are purportedly without power or authority to redeem the Rights so
that the Tender Offer may go forward.

17. Because the Dead Hand Restriction purports to prevent newly-elected,
insurgent-nominated directors from redeeming the Poison Pill and thus removing a
key obstacle to the accomplishment of the very purpose for which they were
elected, the Dead Hand Restriction effectively disenfranchises shareholders. In
effect, it denies the shareholders of AMP the opportunity to replace the current
Board and prevent any person intending to become an Acquiring Person, such as
AlliedSignal, from soliciting votes to replace the current Board. It represents
an intentional effort by the Board to manipulate the corporate machinery so as
to prevent the effectiveness of a shareholder vote.

18. The Pennsylvania Anti-Takeover Statutes. Among other provisions,
----------------------------------------
Defendant AMP also has the anti-takeover protections PBCL (S)(S) 2551-2556 (the
"Business Combination Statute").

19. Under the Business Combination Statute, an interested shareholder
cannot engage in a business combination with AMP for five years unless the
acquisition of the shares or the business combination is approved by the AMP
Board before an "Interested Shareholder" becomes the beneficial owner, directly
or indirectly, of at least 20% of AMP's shares.

<PAGE>

20. The Business Combination Statutes will delay or make more difficult
acquisitions or changes of control of AMP, have the effect of preventing changes
in the management of AMP, and make it more difficult to accomplish transactions
which AMP shareholders may otherwise deem to be in their best interests.

21. Fixing the Consent Solicitation Record Date. AlliedSignal cannot
--------------------------------------------
obtain shareholder consents to its proposals without a record date for the
determination of the shareholders entitled to vote on the proposals. AMP's by-
laws (the "By-laws") provide that any shareholder seeking to have shareholders
take action by consent must, by written notice, request that the Board fix a
record date. The By-laws require the Board to fix the record date no later than
10 days after receipt of the request. (If not fixed within 10 days, the record
date will be the day on which the first consent is received by the company.)

22. It is anticipated that the Board will seek to delay shareholder
consent action on AlliedSignal's proposals by fixing a record date outside the
required time period to impede its shareholders from exercising their franchise.

First Claim For Relief
----------------------
(Declaratory Judgment and Injunctive Relief)

23. Plaintiff repeats and realleges the allegations contained in each of
the preceding paragraphs as if fully set forth herein.

<PAGE>

24. Fixing a record date beyond the required ten (10) days would violate
AMP's Articles and By-laws and constitute an illegal interference with the
shareholder franchise, in violation of the PBCL and fundamental principles of
corporate governance.

25. Plaintiffs have no adequate remedy at law.

Second Claim for Relief
-----------------------
(Declaratory Judgment)

26. Plaintiff repeats and realleges the allegations contained in each of
the preceding paragraphs as if fully set forth herein.

27. The Dead Hand Restriction is invalid per se under Pennsylvania
statutory law, in that it purports to limit the discretion of future Boards of
AMP by denying any directors other than the Continuing Directors the power or
authority to redeem the Poison Pill so that the Tender Offer and Merger may go
forward. PBCL (S) 1721 requires that any such limitation on Board discretion be
set forth in a by-law adopted by the shareholders. Since the shareholders of AMP
have adopted no such by-law provision, the Board was without power to so limit
the discretion of future Boards of AMP by adopting the Dead Hand Restriction.

28. Moreover, PBCL (S) 1729 provides that unless otherwise provided in a
by-law adopted by the shareholders, every director shall be entitled to one
vote. The Dead Hand Restriction creates different classes of directors with
different voting rights -- those who have the power to redeem the Poison Pill,
and

9
<PAGE>

those who do not. Since the shareholders of AMP have adopted no by-law
provision creating such distinctions in the voting powers of directors, the
Board was without power to adopt the Dead Hand Restriction.

29. Additionally, the Dead Hand Restriction is invalid under AMP's By-
laws. Under Section 2.1 of AMP's By-laws, the power to manage the business and
affairs of the Corporation is broadly vested in its duly elected board of
directors. Insofar as the Dead Hand Restriction purports to restrict the power
of AMP's Board to redeem or amend the Poison Pill, it conflicts with Section 2.1
of AMP's By-laws and is therefore of no cause or effect.

30. Furthermore, the Dead Hand Restriction purposefully interferes with
the shareholder voting franchise without any compelling justification. Moreover,
the Dead Hand Restriction is an unreasonable and disproportionate defensive
measure, because it either precludes or materially abridges the sharehold ers'
rights to receive tender offers and wage proxy contests to replace the Board.

Third Claim for Relief
----------------------
(Declaratory Judgment)

31. Plaintiff repeats and realleges the allegations contained in each of
the preceding paragraphs as if fully set forth herein.

32. To the extent that the Dead Hand Restriction and other anti-takeover
devices that preclude tender offers and consent solicitations are permitted
under Pennsylvania law, such law is unconstitutional under the Commerce

10
<PAGE>

Clause because it impermissibly burdens interstate commerce far in excess of
local benefits. The Dead Hand Restriction 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 Dead Hand
Restriction, such law thus gives a Pennsylvania corporation's pre-existing board
of directors a de facto veto power over tender offers and mergers, and therefore
thwarts shareholder democracy and impermissibly burdens interstate commerce.

33. To the extent the Dead Hand Restriction is permissible under
Pennsylvania law, such law injures and will continue to injure Plaintiff because
it deprives Plaintiff of its right to proceed with its Proposed Business
Combination.

Fourth Claim for Relief
-----------------------
(Declaratory Judgment)

34. Plaintiff repeats and realleges the allegations contained in each of
the preceding paragraphs as if fully set forth herein.

35. To the extent that the Dead Hand Restriction and other anti-takeover
devices that preclude tender offers and consent solicitations are permitted
under Pennsylvania law, such law is preempted by the Williams Act and thereby
violates the Supremacy Clause of the United States Constitution. It frustrates
the full purpose and objectives of Congress in enacting the Williams Act by: (a)
giving intransigent management the ability to defeat a noncoercive proposal
without

11
<PAGE>

a vote by shareholders, (b) impermissibly tilting the balance between management
and a potential acquirer in the context of a noncoercive proposal, and (c)
depriving Plaintiff of its right to have AMP shareholders consider the Proposed
Business Combination under federal law.

36. To the extent the Dead Hand Restriction is permissible under
Pennsylvania law, such law injures and will continue to injure Plaintiff because
it deprives Plaintiff of its right to proceed with its Proposed Business
Combination as contemplated by the Williams Act and other applicable law.

Fifth Claim for Relief
----------------------
(Injunctive Relief)

37. Plaintiff repeats and realleges the allegations contained in each of
the preceding paragraphs as if fully set forth herein.

38. The effect of AMP's anti-takeover devices is to frustrate and impede
the ability of AMP shareholders to decide for themselves whether they wish to
receive the benefits of the AlliedSignal Tender Offer and proposed second-step
merger. These devices unreasonably and inequitably frustrate and impede the
ability of AlliedSignal to proceed with its Tender Offer and Consent
Solicitation. The failure of AMP and its board to (i) redeem the AMP Poison Pill
or to amend the Poison Pill by removing the Dead Hand Restriction, and (ii)
adopt a resolution approving the AlliedSignal Tender Offer for purposes of the
Business Combination

12
<PAGE>

Statute is clearly a breach of their fiduciary duty and thus a violation of
Pennsylvania law.

39. Plaintiff 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. (S)
2201(a), that:

(a) if the Board should fail to fix a record date for the Consent
Solicitation within 10 days of its receipt of AlliedSignal's written notice
requesting such a record date, the record date for the Consent Solicitation
shall be the date such written notice is delivered to AMP in accordance with
AMP's By-laws;

(b) the fixing of a record date more than ten (10) days after the date of
AlliedSignal's written notice is impermissible because it would effectively
prevent AMP's shareholders from exercising their franchise;

(c) the Dead Hand Restriction is inapplicable or, to the extent applicable,
is in violation of Pennsylvania law and the fiduciary duties owed to
AlliedSignal and all other AMP shareholders;

(d) to the extent Pennsylvania law authorizes the Dead Hand Restriction, it
(i) constitutes an impermissible burden on interstate commerce in violation of
the Commerce Clause of the United States Constitution, and (ii) is

13
<PAGE>

preempted by the Williams Act and therefore unconstitutional under the Supremacy
Clause of the United States Constitution; and

(e) AlliedSignal's tender offer and consent solicitation comply with all
applicable laws, obligations and agreements.

B. 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:

(a) fixing a record date for determining the shareholders entitled to vote
on the proposals in AlliedSignal's Consent Solicitation more than ten (10) days
after the date of AlliedSignal's written notice;

(b) increasing the size of AMP's Board and filling the new seats with Board
nominees after commencement of AlliedSignal's Consent Solicita tion;

(c) refusing to redeem AMP's Poison Pill or amending the Poison Pill so as
to make the Rights inapplicable to AlliedSignal's Tender Offer, and refusing to
grant prior approval of the Tender Offer and Merger for purposes of the
Pennsylvania Business Combination Statute;

(d) amending its By-laws to in any way impede the effective exercise of the
stockholder franchise; or

14
<PAGE>

(e) taking any other 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 Offer and the proposals in AlliedSignal's
Consent Solicitation, or taking any other action to thwart or interfere with the
Tender Offer or Consent Solicitation.

C. Granting compensatory damages for all incidental injuries suffered as a
result of defendant's unlawful conduct.

D. Awarding plaintiff the costs and disbursements of this action, including
attorney's fees.

15
<PAGE>

E. Granting plaintiff such other and further relief as the court deems just
and proper.

/s/ Alexander R. Sussman
--------------------------------------------------
Alexander R. Sussman
Barry G. Sher
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: 8/14/98
________________

CERTIFICATE OF SERVICE
----------------------

I hereby certify that I caused this day the foregoing Complaint for
Declaratory and Injunctive Relief to be served on the following by Federal
Express:

Charles Goonrey, Esq.
General Counsel
AMP Incorporated
47 Friendship Road
Harrisburg, PA 17111

/s/ Joseph A. O'Connor, Esq.
Dated: August 4, 1998 ----------------------------
Joseph A. O'Connor, Esq.

<PAGE>

EXHIBIT 15

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

CLAIRE BLUM, :
C.A. No. 98CV-4109
Plaintiff, :

- against - :
CLASS ACTION
WILLIAM J. HUDSON, JR., :
JAMES E. MARLEY, HAROLD
A. MCINNES, RALPH D. :
DENUNZIO, BARBARA HACKMAN
FRANKLIN, JOSEPH M. HIXON, III, :
JOSEPH M. MAGLIOCHETTI, :
JEROME J. MEYER, JOHN C. MORLEY,
PAUL G. SCHLOEMER, :
TAKEO SHINNA, and AMP INC., :

Defendants.

PLAINTIFF'S CLASS ACTION COMPLAINT
FOR DECLARATORY AND INJUNCTIVE RELIEF

Plaintiff, by her knowledge as to her own acts and upon information
and belief as to all other matters, alleges as follows:

NATURE OF THE ACTION

1. This is a stockholders' class action lawsuit brought on behalf of
the public stockholders of AMP, Inc. ("AMP" or the "Company") who have been,
<PAGE>

and continue to be, deprived of the opportunity to realize fully the benefits of
their investment in the Company. The individual defendants have wrongfully
refused to take the steps necessary to maximize stockholder value, including
properly considering a bona fide offer for the Company from AlliedSignal, Inc.
("Allied"). By failing and refusing to take such steps, including adequately
considering the Allied offer, defendants have breached their fiduciary duties to
plaintiff and the class. The individual defendants are using their fiduciary
positions of control over AMP to thwart others in their legitimate attempts to
acquire AMP, and the individual defendants are trying to entrench themselves in
their positions with the Company.

2. The directors of AMP have wrongfully relied upon various other
anti-takeover devices, including a "poison pill" shareholder rights plan and
certain provisions of the Pennsylvania Business Corporation Law ("PBCL") in
attempt to block Allied's offer to acquire the Company. AMP's "poison pill"
shareholder rights plan contains an unusual and illegal redemption and amendment
restriction, commonly known as a dead hand provision. The dead hand provision
prevents shareholders from electing new directors not approved by the incumbent
management - all designed to impede, delay, or prevent consummation of any offer
not previously approved of by AMP management and to improperly entrench the
incumbent directors.

2
<PAGE>

PARTIES
3. Plaintiff Claire Blum, a New York citizen, is and, at all
relevant times, has been the owner of shares of AMP common stock.

4. AMP is a corporation duly organized and existing under the laws
of the Commonwealth of Pennsylvania. AMP designs, manufactures, and markets
electronic cables and connectors. AMP maintains its principal executive offices
at 470 Friendship Road, Harrisburg, Pennsylvania. As of March 3, 1998, AMP has
219,559,875 shares of common stock outstanding and thousands of stockholders of
record. AMP's stock trades over the New York Stock Exchange.

5. Defendant William J. Hudson, Jr. ("Hudson") is the Chief
Executive Officer, President, and a director of AMP. In 1997, Reynolds received
from AMP more than $1.380 million in compensation.

6. Defendant James J. Marley ("Marley") is the Chairman of the AMP
Board of Directors. In 1997, Marley received from AMP more than $1.135 million
in compensation.

7. Harold A. McInnes ("McInnes") served as an executive officer of
AMP for more than five years and is the retired Chairman of the Board, retired
Chief Executive Officer, and a sitting director of the Company. In 1997, McInnes
received from AMP more than $134,000 in compensation as a director of the
Company.

3
<PAGE>

8. Defendants Ralph D. Denunzio, Barbara Hackman Franklin, Joseph M.
Hixon, III, Joseph M. Magliochetti, Jerome J. Meyer, John C. Morley, Paul G.
Schloemer, and Takeo Shinna are directors of AMP.

9. The defendants named in paragraphs 5 through 8 are hereinafter
referred to as the "Individual Defendants."

10. Because of their positions as officers/directors of the Company,
the Individual Defendants owe a fiduciary duty of loyalty and due care to
plaintiff and the other members of the class.

11. Each defendant herein is sued individually as a conspirator and
aider and abetter, as well as in his/her capacity as an officer and/or director
of the Company, and the liability of each arises from the fact that he or she
has engaged in all or part of the unlawful acts, plans, schemes, or transactions
complained of herein.

JURISDICTION AND VENUE

12. The Court has jurisdiction of the subject matter of this action
pursuant to 28 U.S.C. (S)(S) 1331, 1332(a), and 1367(a). The matter in
controversy exceeds the sum of $75,000, exclusive of interest and costs.

13. Venue is proper in this district pursuant to 28 U.S.C. (S)(S)
1391(a)-(c).

4
<PAGE>

CLASS ACTION ALLEGATIONS

14. Plaintiff brings this case on her own behalf and as a class
action, pursuant to Fed. R. Civ P. 23(b)(2), on behalf of all stockholders of
the Company, except defendants herein and any person, firm, trust, corporation,
or other entity related to or affiliated with any of the defendants, who will be
threatened with injury arising from defendants' actions as is described more
fully below (the "Class").

15. This action is properly maintainable as a class action.

16. The Class is so numerous that joinder of all members is
impracticable. The Company has hundreds of stockholders who are scattered
throughout the United States.

17. There are questions of law and fact common to the Class that
predominate over questions affecting any individual class member. The common
questions include, inter alia, whether:

a. defendants have breached their fiduciary duties owed by
them to plaintiff and other members of the Class by failing and refusing to
attempt in good faith to maximize stockholder value, including considering the
sale of AMP;

b. defendants have breached or aided and abetted the
breach of the fiduciary duties owed by them to plaintiff and other members of
the Class;

5
<PAGE>

c. defendants engaged in a plan and scheme to thwart and
reject offers and proposals from third parties, including the one made by
Allied; and

d. plaintiff and the other members of the Class are being
and will continue to be injured by the wrongful conduct alleged herein and, if
so, what is the proper remedy and/or measure of damages.

18. Plaintiff is committed to prosecuting the action and has retained
competent counsel experienced in litigation of this nature. Plaintiff's claims
are typical of the claims of the other members of the Class and plaintiff has
the same interests as the other members of the Class. Plaintiff is an adequate
representative of the Class.

19. The prosecution of separate actions by individual members of the
Class would create the risk of inconsistent or varying adjudications with
respect to individual members of the Class which would establish incompatible
standards of conduct for defendants, or adjudications with respect to individual
members of the Class which would as a practical matter be dispositive of the
interests of the other members not parties to the adjudications or substantially
impair or impede their ability to protect their interests.

20. The defendants have acted, or refused to act, on grounds
generally applicable to, and causing injury to, the Class and, therefore,
preliminary and final injunctive relief on behalf of the Class are appropriate.

6
<PAGE>

SUBSTANTIVE ALLEGATIONS

21. By the acts, transactions, and courses of conduct alleged herein,
defendants, individually and as part of a common plan and scheme and/or aiding
and abetting one another in total disregard of their fiduciary duties, are
attempting to deprive plaintiff and the Class unfairly of the opportunity to
maximize the value of their investment in AMP.

22. In late July 1998, Allied management initiated contact with AMP
management to discuss a strategic business combination. Specifically, Larry
Bossidy ("Bossidy"), Chairman and Chief Executive Officer of Allied, made
several attempts by telephone to speak with defendant Hudson. Every attempted
contact by Bossidy was rebuffed.

23. On July 30, 1998, Allied sent a letter to AMP proposing the terms
of a formal offer. Allied indicated that it was prepared to enter into a $9.8
billion transaction whereby Allied would pay $43.50 per share for each
outstanding share of AMP. Further Allied let it be known that it was prepared
to be "flexible" on the proposed price and terms of the transaction depending
upon due diligence and AMP's willingness to negotiate.

24. AMP's response to the Allied offer was to do nothing until August
4, 1998 when Allied publicly announced that it has made an all cash offer for

7
<PAGE>

AMP. At that time, AMP simply issued a terse statement advising shareholders
not to make any tender to Allied until the Board of Directors reviewed the
offer.

25. Allied's August 4, 1998 press release disclosed the terms of
Allied's latest offer, including the payment of $44.50 per share in cash, and
disclosed that, in light of AMP's unreasonable defensive measures such as the
poison pill, it would commence a hostile consent solicitation under which it
would be able to take control of AMP's board if it obtained 50.1% of AMP's
stock. Following the consent solicitation, Allied would obtain the remaining
shares in a second-step merger in which AMP shareholders will received $44.50.

26. Allied's $44.50 offer constituted a 50% premium over the trading
price of the stock just prior to the public announcement of Allied's offer.

27. AMP has continued to stonewall by refusing to even meet with
representatives of Allied. Instead, Allied has relied upon its anti-takeover
devices which are wholly unreasonable in light of Allied's offer.

28. On August 4, 1998, it was further disclosed that Allied has
commenced litigation against AMP seeking to declare illegal certain of AMP's
defense mechanisms, including a poison pill rights plan, containing the dead-
hand provision.

29. Despite the significant interest of AMP stockholders, defendants
have acted without regard to the fiduciary duties they owe them by, inter alia,

8
<PAGE>

failing to take the steps necessary to maximize stockholder value, including,
but not limited to, agreeing to meet with and negotiate with Allied. Defendants
have done so without business justification and without negotiation.

30. Defendants' failure to act promptly upon Allied's offer has no
valid business purpose, and simply evidences their disregard for the premium
being offered to AMP stockholders. By failing to meet promptly and negotiate,
or offer to meet and negotiate, with Allied, defendants are depriving plaintiff
and the Class of their right to share in the assets and businesses of AMP - and
receive the maximum value for their AMP shares.

31. AMP represents a highly attractive acquisition candidate.
Defendants' conduct is depriving AMP's public stockholders of the control
premium that Allied are prepared to pay, or of the enhanced premium that further
negotiation or exposure of AMP to the market could provide.

32. Defendants owe fundamental fiduciary obligations to AMP's
stockholders to take all necessary and appropriate steps to maximize the value
of their shares. In addition, the Individual Defendants have the responsibility
to act independently so that the interests of AMP's public stockholders will be
protected, to seriously consider all bona fide offers for the Company, and to
conduct fair and active bidding procedures or other mechanisms for checking the
market to assure that the highest possible price is achieved. Further, the
directors of AMP must ade-

9
<PAGE>

quately ensure that no conflict of interest exists between the Individual
Defendant's own interests and their fiduciary obligations to maximize
stockholder value or, if such conflicts exist, to insure that all such conflicts
will be resolved in the best interests of the Company's stockholders.

33. Because defendants dominate and control the business and
corporate affairs of AMP and because they are in possession of private corporate
information concerning AMP's assets, businesses and future prospects, there
exists an imbalance and disparity of knowledge of economic power between
defendants and the public shareholders of AMP. This discrepancy makes it
grossly and inher ently unfair for defendants to refrain from taking those steps
necessary to maximize stockholder value. Defendants have refused to seriously
consider Allied's offer, and have failed to announce any active auction or open
bidding procedures that would maximize stockholder value by entertaining offers
to purchase the Company.

34. The Individual Defendants have breached their fiduciary and other
common law duties owed to plaintiff and other members of the Class in that they
have not and are not exercising independent business judgment and have acted and
are acting to the detriment of the Class.

35. The Individual Defendants are acting to entrench themselves in
their offices and positions and maintain their substantial salaries and
perquisites, all at the expense and to the detriment of the public stockholders
of AMP.

10
<PAGE>

Irreparable Injury

36. AMP's and the Individual Defendant's reliance upon and refusal to
remove or nullify AMP's anti-takeover devices and other defensive measures so as
to obstruct the Allied's offer will (a) deny plaintiff and the Class the
meaningful right to decide for themselves whether or not to tender their shares
and accept Allied's offer; (b) hinder or prevent plaintiff and the Class from
exercising their fundamental shareholder rights under Pennsylvania law and (c)
cause plaintiff irreparable injury as a result of the loss of the unique
opportunity to sell their interest in AMP to Allied at a substantial premium.
These injuries will be suffered directly by plaintiff and the Class and are
separate and distinct from the injuries that such actions will cause Allied, who
will be deprived of the fundamental right to acquire control of AMP.

37. Plaintiff has no adequate remedy at law. Only through the
exercise of the Court's equitable powers will plaintiff be protected from
immediate and irreparable injury. Unless the court enjoins the application of
AMP's anti-takeover devices to the Allied's offer and enjoins AMP and the
Individual Defendants from impeding the offer by any other defensive measures,
including litigation in other forums, plaintiff will be (a) precluded from
participation in the Allied offer, which can only be consummated upon the
invalidation of AMP's wrongful anti-takeover devices, (b) denied any meaningful
control over the assets of AMP, and (c)

11
<PAGE>

hindered in or prevented from exercising their fundamental shareholder rights
under Pennsylvania law. Should that occur, plaintiff and the Class will have
lost the unique opportunity to tender their shares for a 50% premium over the
market price of AMP's shares on the trading day prior to Allied's offer.

Declaratory And Injunctive Relief

38. The Court may grant the declaratory and injunctive relief sought
herein pursuant to 28 U.S.C. (S) 2201 and Fed. R. Civ. P. 57 and 65. A
substantial controversy exists between the parties, as demonstrated by (a) the
defendants' rejection of Allied's initial offers, (b) defendants' unwillingness
even to meet with Allied to consider or discuss a combination or merger despite
Allied's premium, all-cash offer, and (c) the defendants' failure to redeem or
amend the poison pill. The adverse legal interests of the parties are real and
immediate. The existence of this controversy is causing confusion and
uncertainty in the market for public securities because investors do not know
whether they will be able to avail themselves of an advantageous financial
offer. The granting of the requested declaratory and injunctive relief will
serve the public interest by affording relief from such uncertainty and by
avoiding delay.

12
<PAGE>

COUNT I

INJUNCTIVE AND DECLARATORY RELIEF --
DEAD HAND PROVISION -- COMMERCE CLAUSE VIOLATION

39. Plaintiff repeats and realleges each allegation contained above
as if fully set forth herein.

40. AMP's shares are widely held outside Pennsylvania. Therefore,
Allied's offer constitutes a substantial securities transaction in interstate
commerce, employing interstate instrumentalities and facilities in the
communication of Allied's offer and in transactions for the purchase and sale of
AMP's securities occurring across state lines.

41. The Commerce Clause of the United States Constitution provides
that: "Congress shall have the power . . . [t]o regulate commerce . . . among
the several states." U.S. Const., art. 1, (S) 8, cl. 3.

42. To the extent the dead hand provision is applied to prevent
Allied's offer, it violates the Commerce Clause by imposing a substantial and
adverse burden on interstate commerce. Specifically, AMP's dead hand provision:

a. deters and/or substantially eliminates nationwide tender
offers for Pennsylvania corporations with such provisions,
except offers that are approved by incumbent management;

b. burdens AMP shareholders throughout the United States in
their efforts to sell their shares at a premium;

13
<PAGE>

c. burdens Allied and other prospective tender offerors in their
efforts to buy securities from willing sellers of AMP stock
located throughout the United States;

d. substantially interferes with and diminishes access to the
national securities market; and

e. impedes the injection into interstate commerce of millions of
dollars by means of Allied's offer and interferes with the
efficient allocation of economic resources.

43. These burdens imposed on interstate commerce far outweigh any
purported local benefits. To the extent that the dead hand provision reduces or
eliminates shareholder autonomy and entrenches existing management, it is
detrimental to the interests of shareholders.

44. The undue burden on interstate commerce created by the dead hand
provision has a direct and substantial impact in this case.

45. Plaintiff has no adequate remedy at law.

COUNT II

INJUNCTIVE AND DECLARATORY RELIEF --
POISON PILL -- BREACH OF FIDUCIARY DUTY

46. Plaintiff repeats and realleges each allegation contained above
as if fully set forth herein.

14
<PAGE>

47. Allied's offer is non-coercive, non-discriminatory; fair to AMP's
shareholders; and represents a substantial premium over the market price of AMP
shares as of the trading date prior to the public announcement of Allied's
offer.

48. Allied's offer complies with all applicable laws, obligations,
and agreements and pose no threat to the interests of AMP's shareholders or to
AMP's corporate policy or effectiveness. Defendants' use of or reliance upon
the Poison Pill, including its Dead Hand Provision, to prevent AMP's
shareholders from deciding for themselves whether or not to accept Allied's
offer is not proportionate to any threat posed, nor within the range of
reasonable responses to Allied's offer, forecloses effective shareholder action,
and is in breach of the Individual Defendants' fiduciary duties. Plaintiff
seeks declaratory injunctive relief against such breaches of fiduciary duties.

49. Defendant's refusal to redeem or amend the poison pill so as to
block Allied's offer also violates the Individual Defendants' fiduciary duties
because such action will deny plaintiff meaningful access to or control over the
assets of AMP and will hinder or prevent plaintiff and the Class from exercising
their fundamental shareholder rights under Pennsylvania law.

50. Plaintiff has no adequate remedy at law.

15
<PAGE>

COUNT III

INJUNCTIVE AND DECLARATORY RELIEF --
OTHER ATTEMPTS TO IMPEDE OFFER AND
PROPOSED MERGER -- BREACH OF FIDUCIARY DUTY

51. Plaintiff repeats and realleges each allegation contained above
as if fully set forth herein.

52. Allied's offer is all-cash, non-coercive, non-discriminatory, and
complies with all applicable laws, obligations, and agreements. AMP and the
Individual Defendants should not be permitted to manipulate the existing
corporate machinery or to adopt new defensive measures that would have the
effect of delaying, impeding, or blocking consideration of Allied's offer, the
election of the New Individuals, or that would have the effect of preventing
AMP's shareholders from freely considering whether to accept Allied's offer.
This matter is now before this Court, when is fully capable of resolving all
issues relating to Allied's offer.

53. Thus, AMP and the Individual Defendants should be enjoined from
using such devices for the improper purpose of impeding shareholder
consideration of Allied's offer.

54. Plaintiff has no adequate remedy at law.

WHEREFORE, plaintiff respectfully requests that this Court enter an
order:

A. declaring this to be a proper class action and certifying
plaintiff as a Class representative;

<PAGE>

B. declaring and adjudging that the dead hand provision is invalid
and is in violation of the Individual Defendants' fiduciary duties; compelling
the Individual Defendants to amend the poison pill to delete the Dead Hand
Provision and enjoining AMP, the Individual Defendants, and AMP's officers,
successors, agents, servants, subsidiaries, employees and attorneys from taking
any actions to enforce to apply the dead hand provision that (i) would interfere
with plaintiff's voting rights, (ii) discriminate in any way against plaintiff
in the exercise of their rights with respect to their AMP stock, (iii) impede or
frustrate the ability of AMP's shareholders to consider and make their own
determination as to whether to elect new individuals and/or accept the terms of
Allied's offer, or (iv) otherwise interfere, impede, or delay the commencement,
continuation, or consummation of Allied's offer;

C. declaring, in the event the dead hand provision is adjudged
permissible under PBCL, that it is unconstitutional as applied to Allied's offer
to the extent that it permits the dead hand provision because it violates the
Commerce Clause of the United States Constitution;

D. enjoining AMP, the Individual Defendants, and AMP's officers,
successors, agents, servants, subsidiaries, employees and attorneys from
taking any steps to impede or frustrate the ability of AMP's shareholders to
consider

17
<PAGE>

and make their own determination as to whether to accept the terms of Allied's
offer or taking any other action to thwart or interfere with Allied's offer;

E. declaring and adjudging that AMP, the Individual Defendants, and
AMP's officers, successors, agents, servants, subsidiaries, employees and
attorneys may not commence, and enjoining them from commencing, in any forum
other than this Court, any judicial proceedings that would require litigation,
by way of claim, defense, or counterclaim, of any of the claims, defenses, or
counterclaims which may be asserted in this lawsuit and that would delay or
impede commencement, continuation, or consummation or Allied's offer,
including, without limitation, any proceedings challenging Allied's offer or
seeking to enforce, apply, or declare the validity of any of AMP's anti-takeover
devices or other defensive measures;

F. ordering the Individual Defendants to carry out their fiduciary
duties to plaintiff and the other members of the Class by announcing their
intention to:

(i) cooperate fully with any entity or person, including Allied,
having a bona fide interest in proposing any transaction that would maximize
stockholder value including, but not limited to, a merger or acquisition of AMP;

(ii) immediately undertake an appropriate evaluation of AMP's
worth as a merger/acquisition candidate;

18
<PAGE>

(iii) take all appropriate steps to enhance AMP's value and
attractiveness as a merger/acquisition candidate;

(iv) take all appropriate steps to effectively expose AMP to the
marketplace in an effort to create an active auction of the Company;

(v) act independently so that the interests of the Company's
public stockholders will be protected; and

(vi) adequately ensure that no conflicts of interest exist between
the Individual Defendants' own interest and their fiduciary obligation to
maximize stockholder value or, in the event such conflicts exist, to ensure that
all conflicts of interest are resolved in the best interests of the public
stockholders of AMP;

19
<PAGE>

G. awarding plaintiff the costs and disbursements of this action,
including a reasonable allowance for plaintiff's attorneys' and experts' fees;
and

H. granting such other and further relief as may be just and proper.

Dated: August 6, 1998

SAVETT, FRUTKIN, PODELL & RYAN, P.C.

/s/ Stuart H. Savett
By:_________________________________
Stuart H. Savett (I.D. No. 03699)
Robert P. Frutkin (I.D. No. 21366)
325 Chestnut Street, Suite 700
Philadelphia, Pennsylvania 19160
(215) 923-5400

Attorneys for Plaintiff

Of Counsel:

WECHSLER HARWOOD HALEBIAN
& FEFFER LLP
488 Madison Avenue
New York, New York 10022
(212) 935-7400

<PAGE>

EXHIBIT 16

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

- - - - - - - - - - - - - - - - - - - - - - - x
SCOTT SILVER :
547 Phillip Road
Huntington Valley, PA 19006 : CLASS ACTION COMPLAINT

Plaintiff, :

-v- : CIVIL ACTION
NO. 98-CV-4120
AMP, INC. :
A Pennsylvania Corporation,
470 Friendship Road :
Harrisburg, PA 17111
:
WILLIAM J. HUDSON, JR.; JAMES E.
MARLEY; HAROLD A. McINNES; RALPH D. :
DeNUNZIO; BARBARA HACKMAN FRANK LIN;
JOSEPH M. HIXON, III; JOSEPH M. :
MAGLIOCHETTI; JEROME J. MEYER; JOHN
C. MORLEY; PAUL G. SCHLOEMER; and :
TAKEO SHIINA
:
Defendants.
- - - - - - - - - - - - - - - - - - - - - - - x

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
-----------------------------------------------

Plaintiff, a shareholder of defendant AMP, Inc., individually and on behalf
of the class of shareholders described herein, by undersigned attorneys, as and
for his Complaint, alleges upon knowledge with respect to himself and his own
acts, and upon information and belief as to all other matters, as follows:
<PAGE>

NATURE OF THE ACTION
--------------------

1. On August 4, 1998, Allied Signal Corporation ("AlliedSignal"), a Delaware
corporation with its principal executive offices in Morristown, New Jersey,
announced that it will commence a tender offer for the stock of defendant AMP,
Inc. ("AMP") at $44.50 per share, a price representing a premium of
approximately 50% over the closing trading price of AMP common stock on August
3, 1998. This action for injunctive and declaratory relief is brought to ensure
that the common law, statutory, and constitutional rights of plaintiff and the
class of AMP stockholders to exercise the inherent voting and property rights
incident to their ownership of AMP stock, to ensure that their rights under the
federal proxy rules are protected, to preserve their right to receive tender
offers, while also ensuring the rights to all AMP stockholders to consider
AlliedSignal's offer or any other offer by any third party to acquire their
shares and/or to merge with AMP. Plaintiff also seeks to prevent AMP from
manipulating or otherwise subverting the process of corporate democracy by
impermissibly taking action to frustrate the consent solicitation that
AlliedSignal or any other bidder will have to conduct to gain majority
representation on the AMP Board of Directors if AMP attempts to obstruct
AlliedSignal's or any other tender offer. This action also seeks relief
declaring AMP's so-called "dead hand" poison pill to be inapplicable or legally
invalid.

JURISDICTION AND VENUE
----------------------
2. This Court has jurisdiction over this action pursuant to 28 U.S.C.
(S)(S)1331 and 1367.

1
<PAGE>

3. Venue is proper in this district under 28 U.S.C. (S)1391(b) and (c).

PARTIES
-------

4. Plaintiff Scott Silver, 547 Phillip Road, Huntington Valley, Pennsylvania
19006, is and at all times relevant hereto has been the owner of shares of AMP.

5. (a) 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.

(b) Defendant William J. Hudson ("Hudson") is Chief Executive Officer and
President of the corporation. Mr. Hudson has served as an officer of the
corporation for more than the past five years.

(c) Defendant James E. Marley ("Marley"), is Chairman of the Board of
Directors of the corporation. Mr. Marley has serves as an officer of the
corporation for more than the past five years.

(d) Defendant Harold A. McInnes ("McInnes"), is retired Chairman of the
Board of Directors and Chief Executive Officer of the corporation. Mr. McInnes
served as an officer of the corporation for more than five years.

2
<PAGE>

(e) Defendants Ralph D. DeNunzio, Barbara Hackman Franklin, Joseph M.
Hixon, III, Joseph M. Magliochetti, Jerome J. Meyer, John C. Morley, Paul G.
Schloemer and Takeo Shiina are directors of AMP.

6. The defendants identified in subparagraphs (b) through (e) above are
referred to herein as the "Individual Defendants."

CLASS ACTION ALLEGATIONS
------------------------

7. Plaintiff brings this action as a class action pursuant to Rule 23 of the
Federal Rules of Civil Procedure on behalf of himself and all AMP shareholders
as of August 4, 1998 or their successors in interest (the "Class"). Excluded
from the Class are defendants herein and any person, firm, trust, corporation,
or other entity related, to affiliated with, or controlled by any of the
defendants.

8. This action is properly maintainable as a class action.

9. The class is so numerous that joinder of all members is impracticable.
As of March 3, 1998, there were approximately 219,559,875 shares of AMP common
stock outstanding. It is unknown prior to discovery how many shareholders are
in the Class, but such information is known by or available to defendants, and
it is believed that the number of shareholders comprising the Class is in the
hundreds.

10. There are questions of law and fact which are common to the Class and
which predominate over questions affecting any individual class members. The
common questions include, inter alia, the following:
----- ----

3
<PAGE>

(a) Whether defendants have engaged in conduct constituting breaches of
their fiduciary duties and other common law and statutory duties to the
detriment of the Class;

(b) Whether the Dead Hand Poison Pill is illegal, invalid,
unconstitutional, or otherwise improper and operates to the detriment of the
Class;

(c) Whether defendants have acted to impair the corporate franchise rights
of plaintiff and the other members of the Class in breach of their fiduciary
duties; and

(d) Whether defendants are engaging in a scheme to entrench and benefit
themselves to the detriment of the Class;

(e) Whether plaintiff and the other members of the Class would be
irreparably harmed were the actions of defendants complained of herein not
enjoined.

11. The claims of plaintiff are typical of the claims of the other members
of the Class and plaintiff has the same interests as the other members of the
Class. The plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. Accordingly,
plaintiff is an adequate representative of the Class and will fairly and
adequately protect the interests of the Class.

12. Plaintiff anticipates that there will be no difficulty in the management
of this litigation as a class action.

13. Defendants have acted on grounds generally applicable to the Class with
respect to the matters complained of herein, thereby making appropriate the
relief sought herein with respect to the Class as a whole.

4
<PAGE>

14. The prosecution of separate actions by individual members of the Class
would create a risk of adjudications which would, as a practical matter, be
dispositive of the interests of Class members who are not parties to such
adjudications or substantially impair or impede their ability to protect their
interests.

15. A class action is superior to other available methods for the fair and
efficient adjudication of the controversy.

ALLIEDSIGNAL'S OFFER
--------------------

16. On July 29, 1998, AlliedSignal Chairman and Chief Executive Officer
("CEO") Larry Bossidy telephoned AMP's CEO and President, William J. Hudson, to
determine whether AMP would be interested in pursuing a business combination
with Allied Signal. Mr. Hudson was unavailable to speak with Mr. Bossidy, and
he did not thereafter return Mr. Bossidy's telephone call.

17. On July 30, 1998, Mr. Bossidy sent a letter to Mr. Hudson proposing a
business combination of AlliedSignal and AMP. The letter stated that
AlliedSignal was prepared to offer $43.50 per share in cash for all of AMP's
outstanding shares, at a premium of approximately 50% over the market value.

18. AMP did not respond to Mr. Bossidy's July 30 letter.

5
<PAGE>

a 50% premium over the closing trading price of AMP common stock on August 3,
1998. The Tender Offer gives AMP shareholders the opportunity to accept the
Offer if they determine it is in their best interests. Upon consummation of the
Tender Offer, AlliedSignal intends to acquire the remaining shares of AMP in a
second-step merger in which AMP shareholders will receive $44.50 in cash for
each AMP share they own.

20. AlliedSignal's Tender Offer and second-step merger cannot be consummated
unless the AMP Board -- voluntarily or by the direction of a court -- removes or
makes inapplicable various anti-takeover devices, including AMP's "poison pill"
and certain provisions of the Pennsylvania Business Corporation Law ("PBCL").

21. In light of AMP's failure to respond to AlliedSignal's July 30, 1998
letter, the current AMP Board cannot be expected to facilitate AlliedSignal's
Tender Offer and second-step merger, but can be expected, instead, to maintain
AMP's anti-takeover devices in place and actively oppose the Tender Offer and
merger. For this reason, AlliedSignal is preparing to conduct a consent
solicitation (the "Consent Solicitation") to gain majority representation on the
AMP Board of Directors by electing individuals nominated by AlliedSignal who
will support a sale of AMP to AlliedSignal, subject to their fiduciary duties to
AMP shareholders.

AMP'S ANTI-TAKEOVER DEVICES
---------------------------

6
<PAGE>

of one common share purchase right (a "Right") per outstanding share of common
stock of AMP, payable to shareholders of record as of the close of business on
November 6, 1998.

23. The Poison Pill provides that the Rights do not become exercisable until
ten business days following the first public announcement that a person (an
"Acquiring Person") has acquired beneficial ownership of 20% or more of the
outstanding shares of AMP common stock (the "Stock Acquisition Date"), at which
time each holder of a Right, other than an Acquiring Person, is entitled, upon
exercise of the Right, to receive common stock having a market value equal to
two times the Purchase Price. The Effect of this provision (the "Flip-In
Provision") thus would be a massive dilution of the value of the holdings of an
unwanted acquiror like AlliedSignal.

24. The Dead Hand Restriction. The Board may redeem the Poison Pill until
10 business days after a person becomes an Acquiring Person. The Board's
ability to redeem the Rights, however, is purportedly restricted by a provision
of the Poison Pill that serves no purpose other than to entrench the current
Board (the "Dead Hand Restriction") and the Individual Defendants.

7
<PAGE>

business day period, or (ii) after a change (resulting from a proxy or consent
solicitation) in a majority of the directors in office at the time of the
commencement of a proxy or consent solicitation. Furthermore, the Dead Hand
restriction provides that the Poison Pill can be amended only by Continuing
Directors.

26. Under the Dead Hand Restriction, directors, other than Continuing
Directors, elected pursuant to a consent or proxy solicitation in which among
Acquiring Person (or a person who intends to become a Acquiring Person)
participates, are purportedly without power or authority to redeem the Rights so
that the Tender Offer or any other proposed business combination not endorsed by
the Continuing Directors may go forward.

27. Because the Dead Hand Restriction purports to prevent newly-elected,
insurgent-nominated directors from redeeming the Poison Pill and thus removing a
key obstacle to the accomplishment of the very purpose for which they were
elected, the Dead Hand Restriction effectively disenfranchises shareholders. In
effect, it denies the shareholders of AMP the opportunity to replace the current
Board and undermines corporate democracy, which is a fundamental right inherent
in share ownership. It also constrains any person intending to become an
Acquiring Person, such as AlliedSignal, from soliciting votes or proxies to
replace the current Board. It represents an intentional effort by the Board to
manipulate the corporate machinery so as to frustrate the effectiveness of a
shareholder vote and to impair the lawful authority of directors freely chosen
by AMP's shareholders.

<PAGE>

28. The Pennsylvania Anti-Takeover Statutes. Among other provisions,
defendant AMP also has the anti-takeover protections PBCL (S)(S)2551-2556 (the
"Business Combination Statute").

29. Under the Business Combination Statute, an interested shareholder cannot
engage in a business combination with AMP for five years unless the acquisition
of the shares or the business combination is approved by the AMP Board before an
"Interested Shareholder" becomes the beneficial owner, directly or indirectly,
of at least 20% of AMP's shares.

30. The Business Combination Statutes will delay or make more difficult
acquisitions or changes of control of AMP, have the effect of preventing changes
in the management of AMP, and make it more difficult to accomplish transactions
which AMP shareholders may otherwise deem to be in their best interests.

31. Fixing the Consent Solicitation Record Date. AlliedSignal cannot obtain
shareholder consents to its proposals without a record date for the
determination of the shareholders entitled to vote on the proposals. AMP's by-
laws (the "By-laws") provide that any shareholder seeking to have shareholders
take action by consent must, by written notice, request that the Board fix a
record date. The By-laws require the Board to fix the record date no late than
10 days after receipt of the request. (If not fixed within 10 days, the record
date will be the day on which the first consent is received by the company.)

<PAGE>

32. It is anticipated that the Board will seek to delay shareholder consent
action on AlliedSignal's proposals by fixing a record date outside the required
time period to impede its shareholders from exercising their franchise.

First Claim for Relief
----------------------
(Declaratory Judgment)

33. Plaintiff repeats and realleges the allegations contained in each of the
preceding paragraphs as if fully set forth herein.

34. The Dead Hand Restriction is invalid and unlawful because it
purposefully abridges and interferes with the shareholder voting franchise
without any compelling justifica tion. In particular, it precludes or
materially abridges the shareholders' rights to receive tender offers and wage
proxy contests to replace the Board, and it purports to tie the hands and
restrict the lawful authority of directors duly elected by the shareholders.
Morever, the Dead Hand Restriction is an unreasonable and disproportionate
defensive measure, because it improperly serves to entrench the Individual
Defendants.

35. Furthermore, the Dead Hand Restriction is invalid per se under
Pennsylvania statutory law, in that it purports to limit the discretion of
future Boards of AMP by denying any directors other than the Continuing
Directors the power or authority to redeem the Poison Pill so that the Tender
Offer and Merger or any other business combination not endorsed by the
Continuing Directors may go forward. PBCL (S)1721 requires that any such
limitation on Board discretion be set forth in a by-law adopted by the
shareholders. Since the shareholders of AMP

10
<PAGE>

have adopted no such by-law provision, the Board was without power to so limit
the discretion of future Boards of AMP by adopting the Dead Hand Restriction.

36. Moreover, PBCL (S)1729 provides that unless otherwise provided in a by-
law adopted by the shareholders, every director shall be entitled to one vote.
The Dead Hand Restriction creates different classes of directors with different
voting rights--those who have the power to redeem the Poison Pill, and those
who do not. Since the shareholders of AMP have adopted no by-law provision
creating such distinctions in the voting powers of directors, the Board was
without power to adopt the Dead Hand Restriction.

37. Additionally, the Dead Hand Restriction is invalid under AMP's By-laws.
Under Section 2.1 of the AMP's By-laws, the power to manage the business and
affairs of the Corporation is broadly vested in its duly elected board of
directors. Insofar as the Dead Hand Restriction purports to restrict the power
of AMP's Board to redeem or amend the Poison Pill, it conflicts with Section
2.1 of AMP's By-laws and is therefore of no cause or effect.

Second Claim for Relief
-----------------------
(Declaratory Judgment)

38. Plaintiff repeats and realleges the allegations contained in each of the
preceding paragraphs as if fully set forth herein.

<PAGE>

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 Dead Hand
Restriction, such law thus gives a Pennsylvania corporation's pre-existing board
of directors a de facto veto power over tender offers and mergers, and therefore
thwarts shareholder democracy and impermissibly burdens interstate commerce.

40. To the extent the Dead Hand Restriction is permissible under
Pennsylvania law, such law injures and will continue to injure plaintiff because
it deprives plaintiff of his right to proceed with its Proposed Business
Combination.

Third Claim for Relief
----------------------
(Declaratory Judgment)

41. Plaintiff repeats and realleges the allegations contained in each of the
preceding paragraphs as if fully set forth herein.

42. To extent that the Dead Hand Restriction and other anti-takeover devices
that preclude tender offers and consent solicitations are permitted under
Pennsylvania law, such law is preempted by the Williams Act and thereby violates
the Supremacy Clause of the United States Constitution. It frustrates the full
purpose and objectives of Congress in enacting the Williams Acts by: (a) giving
the Individual Defendants and intransigent management the ability to defeat a
noncoercive proposal without a vote by shareholders, (b) impermissibly tilting
the balance between the Individual Defendants and a potential acquirer in the
context of a

<PAGE>

noncoercive business combination proposal, and (c) depriving Plaintiff and the
Class of AMP shareholders of their right to consider the Proposed Business
Combination under federal law.

43. To the extent the Dead Hand Restriction is permissible under the
Pennsylvania law, such law injures and will continue to injure plaintiff and the
Class because it deprives plaintiff and the Class of their right to obtain the
benefits of the Proposed Business Combination or any other competing offer as
contemplated by the Williams Act and other applicable law.

Fourth Claim for Relief
-----------------------
(Injunctive Judgment)

44. Plaintiff repeats and realleges the allegations contained in each of the
preceding paragraphs as if fully set forth herein.

45. The effect of AMP's anti-takeover devices is to frustrate and impede the
ability of AMP shareholders to decide for themselves whether they wish to
receive the benefits of the AlliedSignal Tender Offer and proposed second-step
merger or any other business combination proposed by a third party. These
devices unreasonably and inequitably frustrate and impede the ability of
AlliedSignal to proceed with its Tender Offer and Consent Solicitation. The
failure of AMP and its board to (i) redeem the AMP Poison Pill or to amend the
Poison Pill by removing the Dead Hand Restriction, and (ii) adopt a resolution
permitting the AlliedSignal Tender Offer or an alternative business combination
to go forward for purposes of the Business Combination Statute is clearly a
breach of their fiduciary duty and thus a violation of Pennsylva nia law.

46. Plaintiff has no adequate remedy at law.

Fifth Claim for Relief
----------------------

13
<PAGE>

(Declaratory Judgment and Injunctive Relief)

47. Plaintiff repeats and realleges the allegations contained in each of the
preceding paragraphs as if fully set forth herein.

48. Fixing a record date beyond the required ten (10) days would violate
AMP's Articles and By-laws and constitute an illegal interference with the
shareholder franchise, in violation of the PBCL and fundamental principles of
corporate governance.

49. Plaintiff 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. (S)2201(a),
that:
(a) the Dead Hand Restriction is inapplicable or, to the extent applicable,
is in violation of Pennsylvania law and the fiduciary duties owed to
AlliedSignal and all other AMP shareholders;

(b) to the extent Pennsylvania law authorizes the Dead Hand Restriction, it
(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;

(c) if the Board should fail to fix a record date for the Consent
Solicitation within 10 days of its receipt of AlliedSignal's written notice
requesting such a record

14
<PAGE>

date, the record date for the Consent Solicitation shall be the date such
written notice is delivered to AMP in accordance with AMP's By-laws; and

(d) the fixing of a record date more than ten (10) days after the date of
AlliedSignal's written notice is impermissible because it would effectively
prevent AMP's shareholders from exercising their franchise.

B. Preliminarily and permanently enjoining the Defendants, their directors,
officers, partners, employees, agents, subsidiaries and affiliates, and all
other persons acting in concert with or on behalf of the defendants directly or
indirectly, from:

(a) refusing to redeem AMP's Poison Pill or amend the Poison Pill so as to
eliminate the Dead Hand Provision or to make the Rights inapplicable to
AlliedSignal's Tender Offer or other proposed alternative business combinations,
and refusing to grant prior approval of the Tender Offer and Merger or another
business combination for purposes of the Pennsylvania Business Combination
Statute.

(b) amending its By-laws to in any way impede the effective exercise of the
stockholder franchise; or

(c) taking any other 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 Offer, the proposals in AlliedSignal's
Consent Solicitation, or any other alternative business combination or taking
any other action to thwart or interfere with the Tender Offer or Consent
Solicitation or any alternative proposal;

15
<PAGE>

(d) fixing a record date for determining the shareholders entitled to vote
on the proposals in AlliedSignal's Consent Solicitation more than ten (10) days
after the date of AlliedSignal's written notice; or

(e) increasing the size of AMP's Board and filling the new seats with Board
nominees after commencement of AlliedSignal's Consent Solicitation.

C. A declaration that this action is a proper Class Action and that plaintiff
is an appropriate representative of the Class.

D. Granting compensatory damages for all injuries suffered as a result of
defendant's unlawful conduct.

E. Awarding plaintiff the costs and disbursements of this action, including
attorney's fees and expert fees.

F. Granting plaintiffs such other and further relief as the court deems just
and proper.

16
<PAGE>

Dated: August 6, 1998 BERGER & MONTAGUE, P.C.

/s/ Stephen D. Ramos
-------------------------------
Stephen D. Ramos
1622 Locust Street
Philadelphia, PA 19103
(215) 875-3000

Jerold B. Hoffman
HOFFMAN & EDELSON
45 West Court Street
Dolyestown, PA 18901
(215) 230-8043

Attorneys for Plaintiff

<PAGE>

EXHIBIT 17

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

_______________________________________x :
:
SUE GOLDSTEIN, individually : CLASS ACTION COMPLAINT
and on behalf of all those :
similarly situated, :
:
Plaintiff, : Civil Action
: No. 98-4127
v. :
:
AMP, INC., :
A Pennsylvania Corporation, :
470 Friendship Road :
Harrisburg, PA 17111 :
WILLIAM J. HUDSON, JR.; :
JAMES E. MARLEY; HAROLD A. :
McINNES; RALPH D. DeNUNZIO; :
BARBARA HACKMAN FRANKLIN; :
JOSEPH M. HIXON, III; :
JOSEPH M. MAGLIOCHETTI; :
JEROME J. MEYER; JOHN C. :
MORLEY; PAUL G. SCHLOEMER; :
and TAKEO SHIINA :
:
Defendants.
_______________________________________x

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
-----------------------------------------------

Plaintiff, a shareholder of defendant AMP, Inc., individually and on behalf
of the class of shareholders described herein, by undersigned attorneys, as and
for her Complaint, alleges upon knowledge with respect to herself and her own
acts, and upon information and belief as to all other matters, as follows:
<PAGE>

NATURE OF THE ACTION
--------------------

1. On August 4, 1998, Allied Signal Corporation ("AlliedSignal"), a
Delaware corporation with its principal executive offices in Morristown, New
Jersey, announced that it would commence a tender offer for the stock of
defendant AMP, Inc. ("AMP") at $44.50 per share, a price representing a premium
of approximately 50% over the closing trading price of AMP common stock on
August 3, 1998. This action for injunctive and declaratory relief is brought to
ensure that the common law, statutory, and constitutional rights of plaintiff
and the class of AMP stockholders to exercise the inherent voting and property
rights incident to their ownership of AMP stock, to ensure that their rights
under the federal proxy rules are protected, to preserve their right to receive
tender offers, while also ensuring the rights to all AMP stockholders to
consider AlliedSignal's offer or any other offer by any third party to acquire
their shares and/or to merge with AMP. Plaintiff also seeks to prevent AMP from
manipulating or otherwise subverting the process of corporate democracy by
impermissibly taking action to frustrate the consent solicitation that
AlliedSignal or any other bidder will have to conduct to gain majority
representation on the AMP Board of Directors if AMP attempts to obstruct
AlliedSignal's or any other tender offer. This action also seeks relief
declaring AMP's so-called "dead hand" poison pill to be inapplicable or legally
invalid.

2
<PAGE>

JURISDICTION AND VENUE
----------------------

2. This Court has jurisdiction over this action
pursuant to 28 U.S.C. (S)(S)1331 and 1387.

3. Venue is proper in this district under 28
U.S.C. (S)1391(b) and (c).

PARTIES
-------

4. Plaintiff Sue Goldstein, is and at all times
relevant hereto has been the owner of shares of AMP.

5. (a) Defendant AMP is a Pennsylvania corporation with its
principal executive offices in Harrisburg, Pennsylvania. AMP designs,
manufacturers and markets electronic, electrical and electro-optic connection
devices, interconnection systems and connector-intensive assemblies.

(b) Defendant William J. Hudson ("Hudson"), is Chief Executive
Officer and President of the corporation. Mr. Hudson has served as an officer of
the corporation for more than the past five years.

(c) Defendant James E. Marley ("Marley"), is Chairman of the Board
of Directors of the corporation. Mr. Marley has served as an officer of the
corporation for more than the past five years.

(d) Defendant Harold A. McInnes ("McInnes"), is retired Chairman
of the Board of Directors and Chief Executive Officer of the corporation. Mr.
McInnes served as an officer of the corporation for more than five years.

3
<PAGE>

(e) Defendants Ralph D. DeNunzio, Barbara Hackman Franklin, Joseph
M. Hixon, III, Joseph M. Magliochetti, Jerome J. Meyer, John C. Morley, Paul G.
Schloemer and Takeo Shiina are directors of AMP.

6. The defendants identified in subparagraphs (b) through (e) above
are referred to herein as the "Individual Defendants."

CLASS ACTION ALLEGATIONS
------------------------

7. Plaintiff brings this action as a class action pursuant to Rule 23
of the Federal Rules of Civil Procedure on behalf of himself and all AMP
shareholders as of August 4, 1998 or their successors in interest (the "Class").
Excluded from the Class are defendants herein and any person, firm, trust,
corporation, or other entity related, to affiliated with, or controlled by any
of the defendants.

8. This action is properly maintainable as a class
action.

9. The class is so numerous that joinder of all members is
impracticable. As of March 3, 1998, there were approximately 219,559,875 shares
of AMP common stock outstanding. It is unknown prior to discovery how many
shareholders are in the Class, but such information is known by or available to
defendants, and it is believed that the number of shareholders comprising the
Class is in the hundreds.

10. There are questions of law and fact which are common to the Class
and which predominate over questions affecting any individual class members.
The common questions include, inter alia, the following:
----- ----

4
<PAGE>

(a) Whether defendants have engaged in conduct constituting
breaches of their fiduciary duties and other common law and statutory duties to
the detriment of the Class;

(b) Whether the Dead Hand Poison Pill is illegal, invalid,
unconstitutional, or otherwise improper and operates to the detriment of the
Class;

(c) Whether defendants have acted to impair the corporate
franchise rights of plaintiff and the other members of the Class in breach of
their fiduciary duties;

(d) Whether defendants are engaging in a scheme to entrench and
benefit themselves to the detriment of the Class;

(e) Whether plaintiff and the other members of the Class would be
irreparably harmed were the actions of defendants complained of herein not
enjoined.

11. The claims of plaintiff are typical of the claims of the other
members of the Class and plaintiff has the same interests as the other members
of the Class. The plaintiff is committed to prosecuting this action and has
retained competent counsel experienced in litigation of this nature.
Accordingly, plaintiff is an adequate representative of the Class and will
fairly and adequately protect the interests of the Class.

12. Plaintiff anticipates that there will be no difficulty in the
management of this litigation as a class action.

5
<PAGE>

13. Defendants have acted on grounds generally applicable to the
Class with respect to the matters complained of herein, thereby making
appropriate the relief sought herein with respect to the Class as a whole.

14. The prosecution of separate actions by individual members of the
Class would create a risk of adjudications which would, as a practical matter,
be dispositive of the interests of Class members who are not parties to such
adjudications or substantially impair or impede their ability to protect their
interests.

15. A class action is superior to other available methods for the
fair and efficient adjudication of the controversy.

ALLIEDSIGNAL'S OFFER
--------------------

16. On July 29, 1996, AlliedSignal Chairman and Chief Executive
Officer ("CEO") Larry Bossidy telephoned AMP's CEO and President, William J.
Hudson, to determine whether AMP would be interested in pursuing a business
combination with AlliedSignal. Mr. Hudson was unavailable to speak with Mr.
Bossidy, and he did not thereafter return Mr. Bossidy's telephone call.

17. On July 30, 1998, Mr. Bossidy sent a letter to Mr. Hudson
proposing a business combination of AlliedSignal and AMP. The letter stated
that AlliedSignal was prepared to offer $43.50 per share in cash for all of
AMP's outstanding shares, at a premium of approximately 50% over the market
value.

18. AMP did not respond to Mr. Bossidy's July 30 letter.

6
<PAGE>

19. On August 4, 1998, AlliedSignal announced that it will commence
within five (5) business days a tender offer for the stock of defendant AMP at
$44.50 per share (the "Tender Offer"), which, as stated in Mr. Bossidy's July
30, 1998 letter, represents approximately a 50% premium over the closing trading
price of AMP common stock on August 3, 1998. The Tender Offer gives AMP
shareholders the opportunity to accept the Offer if they determine it is in
their best interests. Upon consummation of the Tender Offer, AlliedSignal
intends to acquire the remaining shares of AMP in a second-step merger in which
AMP shareholders will receive $44.50 in cash for each AMP share they own.

20. AlliedSignal's Tender Offer and second-step merger cannot be
consummated unless the AMP Board - voluntarily or by the direction of a court -
removes or makes inapplicable various anti-takeover devices, including AMP's
"poison pill" and certain provisions of the Pennsylvania Business corporation
Law ("PBCL").

21. In light of AMP's failure to respond to AlliedSignal's July 30,
1998 letter, the current AMP Board cannot be expected to facilitate
AlliedSignal's Tender Offer and second-step merger, but can be expected,
instead, to maintain AMP's anti-takeover devices in place and actively oppose
the Tender Offer and merger. For this reason, AlliedSignal is preparing to
conduct a consent solicitation (the "Consent Solicitation") to gain majority
representation on the AMP Board of Directors by electing individuals nominated
by AlliedSignal who will support a sale of AMP to AlliedSignal, subject to their
fiduciary duties to AMP shareholders.

7
<PAGE>

AMP'S ANTI-TAKEOVER DEVICES
---------------------------

22. The "Dead Hand" Poison Pill. Foremost among the numerous anti-
takeover devices at AMP's disposal is its shareholders' "rights plan," better
known as a "poison pill" (the "Poison Pill"). As part of the Poison Pill, the
Board authorized and declared a divided of one common share purchase right (a
"Right") per outstanding share of common stock of AMP, payable to shareholders
of record as of the close of business on November 6, 1998.

23. The Poison Pill provides that the Rights do not become
exercisable until ten business days following the first public announcement that
a person (an "Acquiring Person") has acquired beneficial ownership of 20% or
more of the outstanding shares of AMP common stock (the "Stock Acquisition
Date"), at which time each holder of a Right, other that an Acquiring Person, is
entitled, upon exercise of the Right, to receive common stock having a market
value equal to two times the Purchase Price. The Effect of this provision (the
"Flip-In Provision") thus would be a massive dilution of the value of the
holdings of an unwanted acquiror like AlliedSignal.

24. The Dead Hand Restriction. The Board may redeem the Poison Pill
until 10 business days after a person becomes an Acquiring Person. The Board's
ability to redeem the Rights, however, is purportedly restricted by a provision
of the Poison Pill that serves no purpose other than to entrench the current
Board (the "Dead Hand Restriction") and the Individual Defendants.

8
<PAGE>

25. Under the Dead Hand Restriction, redemption of the Poison Pill
requires the approval of a majority of Continuing Directors (i.e., members of
the Board who are not Acquiring Persons or representatives of an Acquiring
Persons, either (x) were directors prior to the institution of the Poison Pill
or (y) are nominated by a majority of Continuing Directors) if effected (i)
after a person becomes an Acquiring Person but prior to the expiration of a ten
business day period, or (ii) after a change (resulting from a proxy or consent
solicitation) in a majority of the directors in office at the time of the
commencement of a proxy or consent solicitation. Furthermore, the Dead Hand
restriction provides that the Poison Pill can be amended only by Continuing
Directors.

26. Under the Dead Hand Restriction, directors, other than Continuing
Directors elected pursuant to a consent or proxy solicitation in which among
Acquiring Person (or a person who intends to become a Acquiring Person)
participates, are purportedly without power or authority to redeem the Rights so
that the Tender Offer or any other proposed business combination not endorsed by
the Continuing Directors may go forward.

9
<PAGE>

person intending to become an Acquiring Person, such as AlliedSignal, from
soliciting votes or proxies to replace the current Board. It represents an
intentional effort by the Board to manipulate the corporate machinery so as to
frustrate the effectiveness of a shareholder vote and to impair the lawful
authority of directors freely chosen by AMP's shareholders.

28. The Pennsylvania Anti-Takeover Statutes. Among other provisions,
defendant AMP also has the anti-takeover protections PBCL (S)(S)2551-2556 (the
"Business Combination Statute").

29. Under the Business Combination Statute, an interested shareholder
cannot engage in a business combination with AMP for five years unless the
acquisition of the shares or the business combination is approved by the AMP
Board before an "Interested Shareholder" becomes the beneficial owner, directly
or indirectly, of at least 20% of AMP's shares.

30. The Business Combination Statutes will delay or make more
difficult acquisitions or changes of control of AMP, have the effect of
preventing changes in the management of AMP, and make it more difficult to
accomplish transactions which AMP shareholders may otherwise deem to be in their
best interests.

31. Fixing The Consent Solicitation Record Date. AlliedSignal cannot
obtain shareholder consents to its proposals without a record date for the
determination of the shareholders entitled to vote on the proposals. AMP's by-
laws (the "By-laws") provide that any shareholder seeking to have shareholders
take action by consent must, by written

10
<PAGE>

notice, request that the Board fix a record date. The By-laws require the Board
to fix the record date no later than 10 days after receipt of the request. (If
not fixed within 10 days, the record date will be the day on which the first
consent is received by the company).

32. It is anticipated that the Board will seek to delay shareholder
consent action on AlliedSignal's proposals by fixing a record date outside the
required time period to impede its shareholders from exercising their franchise.

FIRST CLAIM FOR RELIEF
----------------------
(DECLARATORY JUDGMENT)

33. Plaintiff repeats and realleges the allegations contained in each
of the preceding paragraphs as if fully set forth herein.

34. The Dead Hand Restriction is invalid and unlawful because it
purposefully abridges and interferes with the shareholder voting franchise
without any compelling justification. In particular, it precludes or materially
abridges the shareholders' rights to receive tender offers and wage proxy
contests to replace the Board, and it purports to tie the hands and restrict the
lawful authority of directors duly elected by the shareholders. Moreover, the
Dead Hand Restriction is an unreasonable and disproportionate defensive measure,
because it improperly serves to entrench the Individual Defendants.

35. Furthermore, the Dead Hand Restriction is invalid per se under
------
Pennsylvania statutory law, in that it purports to limit the discretion of
future Boards of AMP by denying any directors other than the Continuing
Directors the power or authority to redeem the Poison Pill so that the Tender
Offer and Merger or any other business

11
<PAGE>

combination not endorsed by the Continuing Directors may go forward. PBCL
(S)1721 requires that any such limitation on Board discretion be set forth in a
by-law adopted by the shareholders. Since the shareholders of AMP have adopted
no such by-law provision, the Board was without power to so limit the discretion
of future Boards of AMP by adopting the Dead Hand Restriction.

36. Moreover, PBCL (S)1729 provides that unless otherwise provided in
a by-law adopted by the shareholders, every director shall be entitled to one
vote. The Dead Hand Restriction creates different classes of directors with
different voting rights-those who have the power to redeem the Poison Pill,
and those who do not. Since the shareholders of AMP have adopted no by-law
provision creating such distinctions in the voting powers of directors, the
Board was without power to adopt the Dead Hand Restriction.

37. Additionally, the Dead Hand Restriction is invalid under AMP's
By-laws. Under Section 2.1 of the AMP's By-laws, the power to manage the
business and affairs of the Corporation is broadly vested in its duly elected
board of directors. Insofar as the Dead Hand Restriction purports to restrict
the power of AMP's Board of redeem or amend the Poison Pill, it conflicts with
Section 2.1 of AMP's By-laws and is therefore of no cause or effect.

SECOND CLAIM FOR RELIEF
-----------------------
(DECLARATORY JUDGMENT)

12
<PAGE>

38. Plaintiff repeats and realleges the allegations contained in each
of the preceding paragraphs as if fully set forth herein.

39. To the extent that the Dead Hand Restriction and other anti-
takeover devices that preclude tender offers and consent solicitations are
permitted under Pennsylvania law, such law is unconstitutional under the
commerce Clauses because it impermissibly burdens interstate commerce far in
excess of local benefits. The Dead Hand Restriction 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 Dead Hand
Restriction, such law thus gives a Pennsylvania corporation's pre-existing board
of directors a de facto veto power over tender offers and merges, and therefore
-- -----
thwarts shareholder democracy and impermissibly burdens interstate commerce.

THIRD CLAIM FOR RELIEF
----------------------
(DECLARATORY JUDGMENT)

41. Plaintiff repeats and realleges the allegations contained in each
of the preceding paragraphs as if fully set forth herein.

13
<PAGE>

42. To the extent that the Dead Hand Restriction and other anti-
takeover devices that preclude tender offers and consent solicitations are
permitted under Pennsylvania law, such law is preempted by the Williams Act and
thereby violates the Supremacy Clause of the United States Constitution. It
frustrates the full purpose and objectives of Congress in enacting the Williams
Acts by: (a) giving the Individual Defendants and intransigent management the
ability to defeat a noncoercive proposal without a vote by shareholders, (b)
impermissibly tilting the balance between the Individual Defendants and a
potential acquirer in the context of a noncoercive business combination
proposal, and (c) depriving Plaintiff and the Class of AMP shareholders of their
right to consider the Proposed Business Combination under federal law.

43. To the extent the Dead Hand Restriction is permissible under
Pennsylvania law, such law injures and will continue to injure plaintiff and
the Class because it deprives plaintiff and the Class of their right to obtain
the benefits of the Proposed Business Combination or any other competing offer
as contemplated by the Williams Act and other applicable law.

FOURTH CLAIM FOR RELIEF
-----------------------
(INJUNCTIVE RELIEF)

44. Plaintiff repeats and realleges the allegations contained in each
of the preceding paragraphs as if fully set forth herein.

14
<PAGE>

45. The effect of AMP's anti-takeover devices is to frustrate and
impede the ability of AMP shareholders to decide for themselves whether they
wish to receive the benefits of the AlliedSignal Tender Offer and proposed
second-step merger or any other business combination proposed by a third party.
These devices unreasonably and inequitably frustrate and impede the ability of
AlliedSignal to proceed with its Tender Offer and Consent Solicitation. The
failure of AMP and its board to (i) redeem the AMP Poison Pill or to amend the
Poison Pill by removing the Dead Hand Restriction, and (ii) adopt a resolution
permitting the AlliedSignal Tender Offer or an alternative business combination
to go forward for purposes of the Business Combination Statute is clearly a
breach of their fiduciary duty and thus a violation of Pennsylvania law.

46. Plaintiff has no adequate remedy at law.

FIFTH CLAIM FOR RELIEF
----------------------
(DECLARATORY JUDGMENT AND INJUNCTIVE RELIEF)

47. Plaintiff repeats and realleges the allegations contained in each
of the preceding paragraphs as if fully set forth herein.

48. Fixing a record date beyond the required ten (10) days would
violate AMP's Articles and By-laws and constitute an illegal interference with
the shareholder franchise in violation of the PBCL and fundamental principles of
corporate governance.

49. Plaintiff has no adequate remedy of law.

WHEREFORE, plaintiff respectfully requests that this Court enter
judgment against Defendant, as follows:

15
<PAGE>

A. Declaring pursuant to the Declaratory Judgment Act, 28 U.S.C.
(S)2201(a), that:

(a) the Dead Hand Restriction is inapplicable or, to the extent
applicable, is in violation of Pennsylvania law and the fiduciary duties owed to
AlliedSignal and all other AMP shareholders;

(b) to the extent Pennsylvania law authorizes the Dead Hand
Restriction, it (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;

(c) if the Board should fail to fix a record date for the Consent
Solicitation within 10 days of its receipt of AlliedSignal's written notice
requesting such a record date, the record date for the Consent Solicitation
shall be the date such written notice is delivered to AMP in accordance with
AMP's By-laws; and

(d) the fixing of a record date more than ten (10) days after the
date of AlliedSignal's written notice is impermissible because it would
effectively prevent AMP's shareholders from exercising their franchise.

B. Preliminarily and permanently enjoining the Defendants, their directors,
officers, partners, employees, agents, subsidiaries, and affiliates, and all
other persons acting in concert with or on behalf of the defendants directly or
indirectly, from:

<PAGE>

(a) refusing to redeem AMP's Poison Pill or amend the Poison Pill
so as to eliminate the Dead Hand Provision or to make the Rights inapplicable to
AlliedSignal's Tender Offer or other proposed alternative business combinations,
and refusing to grant prior approval of the Tender Offer and Merger or another
business combination for purposes of the Pennsylvania Business Combination
Statute;

(b) amending its By-laws to in any way impede the effective
exercise of the stockholder franchise; or

(c) taking any other 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 Offer, the proposals in AlliedSignal's
Consent Solicitation, or any other alternative business combination or taking
any other action ro thwart or interfere with the Tender Offer or Consent
Solicitation or any alternative proposal;

(d) fixing a record date for determining the shareholders entitled
to vote on the proposals in AlliedSignal's Consent Solicitation more than ten
(10) days after the date of AlliedSignal's written notice; or

(e) increasing the size of AMP's Board and filling the new seats
with Board nominees after commencement of AlliedSignal's Consent Solicitation.

C. A declaration that this action is a proper Class Action and that
plaintiff is an appropriate representative of the Class;

17
<PAGE>

D. Granting compensatory damages for all injuries suffered as a result of
defendant's unlawful conduct.

E. Awarding plaintiff the costs and disbursements of this action, including
attorney's fees and expert fees.

18
<PAGE>

F. Granting plaintiffs such other and further relief as the court deems
just and proper.

Dated: August 7, 1998 LAW OFFICES
Bernard M. Gross, P.C.

/s/ Deborah R. Gross
__________________________________
DEBORAH R. GROSS (I.D.# 44542)
CHRISTOPHER T. REYNA (I.D.# 46488)
1500 Walnut Street, Sixth Floor
Philadelphia, PA 19102
(215) 561-3600

Myron Harris, Esq. (I.D.# 14798)
S106 Parktowne Place
22/nd/ and Ben Franklin Parkway
Philadelphia, PA 19130

Attorneys for Plaintiff

<PAGE>

Exhibit 18

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
<TABLE>
<CAPTION>
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
<S> <C>
MARGOLIS PARTNERSHIP,
CIVIL ACTION
Plaintiff,
NO. 98-CV-4187
V.

AMP, INC., JAMES E. MARLEY, WILLIAM J. HUDSON, JR., JOSEPH M. HIXON, III, JO CLASS ACTION COMPLAINT
SEPH M. MAGLIOCHETTI, JOHN C. MORLEY , HAROLD A McINNES, JEROME J. MEYER, PAUL ----------------------
G. SCHLOEMER, BARBARA H. FRANKLIN, RALPH D. DeNUNZIO, and TAKEO SHIINA,

Defendants. JURY TRIAL DEMANDED
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
</TABLE>

Plaintiff, by its attorneys, for its complaint against defendants, alleges
upon personal knowledge with respect to paragraph 9, and upon information and
belief based, inter alia, upon the investigation of counsel, as to all other
----- ----
allegations herein, as follows:

NATURE OF THE ACTION
--------------------

1. Plaintiff brings this action as a class action on behalf of itself and
all other stockholders of AMP Inc. ("AMP" or the "Company") who are similarly
situated, against the directors and/or senior officers of AMP to enjoin certain
actions of the Individual Defendants (as defined herein) which are intended to
thwart any takeover of the Company, as more fully described below.

<PAGE>

2. In particular, these shareholders are currently being deprived of the
opportunity to realize the full benefits of their investment in AMP. Among
other things, the defendants have failed to adequately consider a premium offer
to acquire control of AMP by AlliedSignal, Inc. ("Allied"), and are, on
information and belief, preparing to use and using their fiduciary positions of
control over AMP to thwart Allied and any others in any legitimate attempts to
acquire AMP.

3. In addition, defendants, in anticipation of such unsolicited bids, have
implemented or are using several anti-takeover devices, including, but not
limited to, a "poison pill." Unless the defendants are prevented from using
these anti-takeover devices improperly, Allied and other potential suitors will
effectively be prevented from consummating any legitimate offers for AMP.
Also, the Pennsylvania Anti-Takeover Statute, as alleged below, will similarly
thwart any legitimate offer or other offers from any potential acquirer, unless
AMP takes affirmative steps to avoid the impact of this statute, and thus
violates the Commerce Clause, the Supremacy Clause, and the Due Process Clause
of the United States Constitution.

4. Defendants' action and inaction represents an effort by the Individual
Defendants to entrench themselves in office so that they may continue to receive
the substantial salaries, compensation and other benefits and perquisites of
their offices.

5. The Individual Defendants are abusing their fiduciary positions of
control over AMP to thwart legitimate attempts at acquiring the Company and are
seeking

2
<PAGE>

to entrench themselves in the management of the Company. The actions of
the Individual Defendants constitute a breach of their fiduciary duties to
maximize shareholder value to not consider their own interests over those of the
public shareholders, and to respond reasonably and on an informed basis to bona
----
fide offers for the Company. These actions are contrary to federal and state
- ----
law and policy.

JURISDICTION AND VENUE
----------------------

6. This action is brought pursuant to the Supremacy Clause (art. VI, cl.
2), the Commerce Clause (art. I, (S) 8, cl. 3) and the Due Process Clause
(amends. V and XIV) of the United States Constitution; principles of common law;
and the federal Declaratory Judgments Act, 28 U.S.C. (S) 2201. In accordance
with Federal Rule of Civil Procedure 24(c), plaintiffs direct Court to U.S.C.
(S) 2403, pursuant to which the Court shall notify the state attorney general of
any action in which the constitutionality of any statute of a state is drawn
into question.

7. This Court has subject-matter jurisdiction of this action pursuant to
28 U.S.C. (S)(S) 1331 and 1367(a).
8. Venue is proper in this District pursuant to 28 U.S.C. (S)(S) 1391(b)
and (c).

THE PARTIES
-----------
9. Plaintiff Margolis Partnership is a Maryland general partnership.
At all relevant times, plaintiff has been the owner of common stock of defendant
AMP.

3
<PAGE>

10. Defendant AMP is a Pennsylvania corporation with its principal
executive offices located in Harrisburg, Pennsylvania. AMP designs, engineers,
develops, integrates, installs and operates aerospace and automotive products.

11. The Individual Defendants, and their positions, are as follows:

Ralph D. DeNunzio Director of the Company and President of Harbor Point
Associates, Inc., New York, New York, a private
investment consulting firm.

Barbara H. Franklin Director of the Company, President and Chief Executive
Officer of Barbara Franklin Enterprises, Washington,
D.C., a private, international consulting and investment
firm, since 1995.

Joseph M. Hixon, III Director of the Company and Retired Chairman of the Board
of Hixon Properties Incorporated, San Antonio, Texas.

William J. Hudson, Jr. Director of the Company and Chief Executive Officer
and President of the Company.

Joseph M. Magliochetti Director of the Company and President, Chief Operating
Officer and a director of Dana Corporation, Toledo, Ohio.

James E. Marley Chairman of the Board of Directors of the Company.

Harold A. McInnes Director of the Company, Retired Chairman of the Board of
Directors and Chief Executive Officer of the Company.

Jerome J. Meyer Director of the Company and Chairman of the Board and
Chief Executive Officer of Tektronix, Inc., Wilsonville,
Oregon.

John C. Morley Director of the Company and President of Evergreen
Ventures, Ltd., Cleveland, Ohio.

4
<PAGE>

Paul G. Schloemer Director of the Company, Retired President and Chief
Executive Officer of Parker Hannifin Corporation,
Cleveland, Ohio.

Takeo Shiina Director of the Company and Chairman of the Advisory
Council of IBM Japan, Ltd.

12. By virtue of their positions as directors and/or officers of AMP
and their exercise of control over the business and corporate affairs of AMP,
the AMP officers and directors named as defendants herein (the "Individual
Defendants") have and at all relevant times had the power to control and
influence, and did control and influence, and cause AMP to engage in the
practices complained of herein. All Individual Defendants owed and owe AMP and
its public stockholders fiduciary obligations and were and are required to: (a)
use their ability to control and manage AMP in a fair, just and equitable
manner; (b) act in furtherance of the best interests of AMP and its
stockholders; (c) act to maximize shareholder value; (d) refrain from abusing
their positions of control; and (e) not favor their own interests at the
expense of AMP and its stockholders. By reason of their fiduciary
relationships, these defendants owed and owe plaintiffs and other members of the
Class (as herein defined) the highest obligations of good faith, fair dealing,
loyalty and due care.

13. By virtue of the acts and conduct alleged herein, the Individual
Defendants, who control the actions of AMP, are breaching their fiduciary duties
to the public shareholders of AMP.

14. Each defendant herein is sued individually as a conspirator
and/or aider and abettor, or, as appropriate, in his or her capacity as a
director of the Company, and

5
<PAGE>

the liability of each arises from the fact that he, she or it has engaged in all
or part of the unlawful acts, plans, schemes or transactions complained of
herein.

CLASS ACTION ALLEGATIONS
------------------------

15. Plaintiff brings this action pursuant to Rule 23 of the Federal
Rules of Civil Procedure on its own behalf and as a class action on behalf of
all shareholders of AMP (except defendants herein and any person, firm, trust,
corporation or other entity related to, controlled by or affiliated with any of
the defendants) and their successors in interest (the "Class").

16. This action is properly maintainable as a class action for the
following reasons:

a. The Class is so numerous and geographically dispersed that
joinder of all members is impracticable. As of August, 1998, AMP reported that
there were more than 214 million shares of common stock outstanding.

b. There are questions of law and fact common to members of the
Class which predominate over any questions affecting only individual members.
The common questions include, inter alia:
----- ----
(1) whether the anti-takeover protections of sections 2551
through 2556 of the Pennsylvania Business Corporation Law ("PBCL") are
unconstitutional on their face or as applied;

6
<PAGE>

(2) whether the Individual Defendants are unlawfully impeding a
potential acquisition of AMP to the detriment of the shareholders of the
Company, and have breached their fiduciary and other common law duties owed by
them to plaintiffs and other members of the Class by failing and refusing to
attempt in good faith to maximize shareholder value by adopting strategies,
policies and plans designed to thwart offers for AMP and entrench defendants in
their positions of control and a failing to act with complete candor;

(3) whether the Individual Defendants have engaged and are
continuing to engage in an unlawful plan or scheme to perpetuate their control
over and enjoyment of the perquisites of office at the expense of AMP public
shareholders;

(4) whether defendants have breached and/or aided and abetted
the breach of fiduciary duties and other common law duties owed by them to
plaintiffs and other members of the Class; and

(5) whether plaintiff and other members of the Class are being
and will continue to be irreparably injured by the wrongful conduct alleged
herein and, if so, what is the proper remedy and/or measure of damages.

c. The claims of plaintiff are typical of the claims of other
members of the Class and plaintiffs has no interests that are adverse or
antagonistic to the interests of the Class.

7
<PAGE>

d. Plaintiffs are committed to the vigorous prosecution of this
action and have retained competent counsel experienced in litigation of this
nature. Accordingly, plaintiff is an adequate representative of the Class and
will fairly and adequately protect the interests of the Class.

e. Plaintiff anticipates that there will not be any difficulty
in the management of this litigation as a class action.

17. Defendants are acting in a manner which affects all shareholders
in the same or similar fashion and would be subjected to potentially differing
legal requirements or standards of conduct if this litigation were not
certified to proceed as a class action.

18. For the reasons stated herein, a class action is superior to other
available methods for the fair and efficient adjudication of this action and the
claims asserted herein. Because of the size of the individual Class members'
claims, few, if any, Class members could afford to seek legal redress
individually for the wrongs complained of herein. Absent a class action, the
Class members will continue to suffer damage and defendants' violations of law
will proceed without remedy.

SUBSTANTIVE ALLEGATIONS
-----------------------

19. Defendant AMP designs, manufactures and markets a broad range of
electronic, electrical and electro-optic connection devices and an expanding
number of interconnection systems and connector-intensive assemblies.

8
<PAGE>

20. Allied employs approximately 70,000 people worldwide and is a
component of the Dow Jones Industrial Average and S&P 500 index.

A. Preliminary Overtures
---------------------

21. On July 29, 1998, Allied's Chairman and Chief Executive Officer,
Larry Bossidy, telephoned AMP's CEO and President, Individual Defendant William
J. Hudson, to determine whether AMP would be interested in pursuing a business
combination with Allied. Defendant Hudson was unavailable to speak with Mr.
Bossidy, and did not thereafter return Mr. Bossidy's telephone call.

22. On July 30, 1998, Mr. Bossidy sent a letter to defendant Hudson
proposing a combination of Allied and AMP. The letter stated that Allied was
prepared to offer $43.50 per share in cash for all AMP's outstanding shares, at
a premium of approximately 50% over the market value.

23. AMP has not responded to Mr. Bossidy's July 30 letter. Upon
information and relief, AMP has not responded in any meaningful fashion to
Allied's overture.

B. The Tender Offer
----------------

24. On August 4, 1998, Allied announced that it would commence within
five business days a tender offer for the stock of defendant AMP at $44.50 per
share (the "Tender Offer"), which, as stated in Mr. Bossidy's July 30, 1998
letter, represents a premium of approximately 50% over the closing trading price
of AMP common stock on August 3,

9
<PAGE>

1998. As described by Allied, the Tender Offer would give AMP shareholders the
opportunity to accept the offer if they determine it is in their best interests
to do so. Upon consummation of the Tender Offer, Allied intends to acquire the
remaining shares of AMP in second-step merger in which AMP shareholders will
receive $44.50 in cash for each AMP share they own.

25. Allied's Tender Offer and second-step merger cannot be
consummated unless the AMP Board - voluntarily or by direction of the Court -
removes or makes inapplicable various anti-takeover devices, including AMP's
"poison pill" and certain provisions of the PBCL.

26. In light of AMP's failure to respond to Allied's July 30, 1998
letter, the current AMP Board cannot be expected to facilitate Allied's Tender
Offer and second-step merger, but can be expected, instead, to maintain AMP's
anti-takeover devices in place and actively oppose the Tender Offer and merger.
For this reason, Allied is preparing to conduct a consent solicitation (the
"Consent Solicitation") to gain majority representation on the AMP Board of
Directors by electing individual directors nominated by Allied who will support
a sale of AMP to Allied, subject to their fiduciary duties to AMP shareholders.

AMP'S ANTI-TAKEOVER DEVICES
---------------------------

27. The "Dead Hand" Poison Pill. Foremost among the numerous anti-
---------------------------
takeover devices at AMP'S disposal is its shareholders' rights plans, better
known as a "Poison Pill." On October 25, 1989, AMP's Board of Directors
declared a dividend

10
<PAGE>

distribution of one right for each outstanding share of common stock (non par
value), of the Company's shareholders of record at the close of business on
November 6, 1989. Each Right entitled the registered holder to purchase from the
Company one share of common stock at a purchase price of $175 per share, subject
to adjustment.

28. Initially, the Rights were attached to all common stock
certificates representing shares then outstanding, and no separate Rights
certificates were distributed. The Rights will separate from the Common Stock
and a Registration Date will occur upon the earlier of (1) 10 business days
-------
following a public announcement that a person (an "Acquiring Person") has become
an "Interested Shareholder" as defined in Section 2553 of the PBCL (i.e. has
acquired, or obtained the right to acquire, beneficial ownership of 20% or more
of the outstanding shares of common stock), except pursuant to a qualifying
offer (as defined elsewhere in the Rights Plan but inapplicable to this
discussion) or (ii) 10 business days (or such later date as the Board shall
--
determine) following the commencement of a tender offer or exchange that would
result in a person becoming an Acquiring Person.

29. Upon the occurrence of either circumstance (as described and
------
defined above), each holder of a Right, other than an Acquiring Person, is
entitled, upon exercise of the Right, to receive common stock having a market
value equal to two times the purchase prices of the common stock. The effect of
this provision (the "Flip-In Provision") would be a massive dilution of the
value of the holding of an unwanted acquiror like Allied.

11
<PAGE>

30. The Dead Hand Restriction. The Board May redeem the Poison Pill
-------------------------
until 10 business days after a person because an Acquiring Person. The Board's
ability to redeem the rights, however, is purportedly restricted by a provision
of the Poison Pill that serves no purpose other than to entrench the current
Board (the "Dead Hand Restriction").

31. Under the Dead Hand Restriction, redemption of the Poison Pill is
possible but can only be accomplished by satisfying numerous conditions.
Specifically, at any time until ten (10) business days following the stock
acquisition date, the Company may redeem the right, in whole or in part. The
decision to redeem requires the concurrence of a majority of the "Continuing
Directors" -- meaning any member of the Board of Directors of AMP who was a
member of the Board prior to the date of the Rights Agreement, and any person
who was subsequently elected to the Board but shall not include an Acquiring
---------------------
Person, or any affiliate or associate of any Acquiring Person.

32. Under the Dead Hand Restriction, directors, other than Continuing
Directors, elected pursuant to a consent or proxy solicitation in which an
Acquiring Person (or a person who intends to become an Acquiring Person)
participates, are purportedly without power or authority to redeem the Rights so
that the Tender Offer may go forward.

33. Because the Dead Hand Restriction purports to prevent newly-
elected, insurgent-nominated directors from redeeming the Poison Pill and thus
removing a key obstacle to the accomplishment of the very purpose for which they
were elected, the Dead Hand Restriction effectively disenfranchises
shareholders. In effect, it denies the

12
<PAGE>

shareholders of AMP the opportunity to replace the current Board and prevent any
person intended to become an Acquiring Person, such as Allied, from soliciting
votes to replace the current Board. It represents an intentional effort by the
Board to manipulate the corporate machinery so as to prevent the effectiveness
of a shareholder vote.

34. The Pennsylvania Anti-Takeover Statute. Among other provisions,
--------------------------------------
Defendant AMP also has adopted the anti-takeover protections of PBCL (S)(S)
2551-2556 (the "Business Combination Statute").

35. Under the Business Combination Statute, an interested shareholder
cannot engage in a business combination with AMP for five years unless the
acquisition of the shares or the business combination is approved by the AMP
Board before an "Interested Shareholder" becomes the beneficial owner, directly
or indirectly , of at least 20% of AMP's shares.

36. The Business Combination Statute will delay or make more
difficult acquisitions or changes of control of AMP, have the effect of
preventing changes in the management of AMP, and make it more difficult to
accomplish transactions which AMP shareholders may otherwise deem to be in their
best interests.

37. Fixing the Consent Solicitation Record Date. Allied cannot
-------------------------------------------
obtain shareholder consents to its proposals without a record date for the
determination of the shareholders entitled to vote on the proposals. AMP's by-
laws (the "By-laws") provide that any shareholder seeking to have shareholders
take action by consent must, by written notice,

13
<PAGE>

request that the Board fix a record date. The By-laws require the board to fix
the record date no later than 10 days after receipt of the request. (If not
fixed within 10 days, the record date will be the day on which the first consent
is received by the company.)

38. It is anticipated that the Board will seek to delay shareholder
consent action on Allied's proposals by fixing a record date outside the
required time period to impede its shareholders from exercising their franchise.

DECLARATORY AND INJUNCTIVE RELIEF
---------------------------------

39. The Court may grant the declaratory and injunctive relief sought
herein pursuant to 28 U.S.C. (S) 2201 and Fed. R. Civ. P.57 and 65. A
substantial controversy presently exists, as demonstrated by: (a) AMP's rebuff
of Allied's overtures of July 29, 1997 and July 30, 1998 for the acquisition of
AMP; (b) AMP's unwillingness to meet with Allied to consider or discuss a
combination or merger with Allied or any other possible acquirer; and (c) AMP's
failure to redeem or amend the poison pill and/or retract any of its other
takeover defenses and those unconstitutionally and impermissibly afforded by the
Business Combination Stature or use those defenses in a proper way.

40. The shareholders' interests in maximizing the value of their AMP
holdings is adverse to the interests of the Individual Defendants in their
desire to retain their positions on the AMP Board. The existence of this
controversy is causing confusion and uncertainty in the market for public
securities because investors do not know whether they will be able to avail
themselves of an advantageous financial offer.

14
<PAGE>

41. The granting of the requested declaratory and injunctive relief
will serve the public interest affording relief from such uncertainty and by
avoiding delay.
COUNT I
-------

FOR INJUNCTIVE AND DECLARATORY RELIEF -
UNCONSTITUTIONALITY OF THE BUSINESS COMBINATION STATUTE
-------------------------------------------------------

42. Plaintiff incorporates by reference paragraphs 1 through 41 as if
set forth herein.

43. This claim arises under the Commerce, Supremacy, and Due Process
Clauses of the United States Constitution.

44. The Tender Offer constitutes a substantial securities transaction
in interstate commerce, employing interstate instrumentalities and facilities in
the communication of the Offer, and in transactions for the purchase and sale
of AMP securities occurring across state lines.

45. The Business Combination Statute violates the Commerce Clause
because it imposes direct, substantial and adverse burdens on interstate
commerce that are excessive in relation to the local interests purportedly
served by the statutes. Among other things, the Statute may make it more
difficult to accomplish transactions which AMP shareholders may otherwise deem
to be in their best interest, because the Statute vests the boards of
Pennsylvania companies with ultimate power to thwart potential business
combinations.

15
<PAGE>

46. The Business Combination Statute is unconstitutional and null and
void on its face under the Commerce Clause. In addition, the Business
Combination Statute is unconstitutional and null and void under the Commerce
Clause in its application under the circumstances of this case. AMP's
shareholders may be prevented from accepting the Tender Offer or any other offer
to the extent the Board of AMP exercises its rights under the Business
Combination Statute in furtherance of its course of entrenchment. Accordingly,
the undue burden on interstate commerce that is created by these statutes has a
direct and substantial impact in this case.

47. The Business Combination Statute also violates the Supremacy
Clause of the United States Constitution. The Tender Offer is subject to, among
other things, the federal laws and regulations governing tender offers,
including the Williams Act amendments to the Securities Exchange Act, 15 U.S.C.
(S)(S) 78m and 78n, and the rules and regulations of the Securities and Exchange
Commission ("SEC") promulgated thereunder. The Williams Act is intended to
establish even-handed regulation of tender offers which favors neither the
offeror nor incumbent management of the target, but leaves the decision
concerning the merits of the offer to the target's stockholders.

48. By establishing policies, standards and procedures that conflict
with and are obstacles to the policies implemented by Congress through the
Williams Act and the rules and regulations of the SEC promulgated thereunder,
the Business Combination Statute is invalid and unconstitutional as applied to
the Tender Offer under the Supremacy Clause

16
<PAGE>

of the United States Constitution, art. VI, cl. 2, which accords supremacy to
federal law over conflicting state law, and violates and is preempted by Section
28(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. (S)
78bb, which prohibits and preempts state regulation that conflicts with the
provisions of the Exchange Act and the rules and regulations thereunder.

49. The Business Combination Statute also violates the Due Process
Clause of the United States Constitution. The statute prevents plaintiff and the
Class from maximizing the value of their AMP holdings due to the Individual
Defendant's entrenching efforts. Thus, those persons, acting under color of
state law, are diminishing the property interest of all class members. The class
members are thus being deprived of fundamental freedoms and property interests
guaranteed by the Due Process Clause of the United States Constitution.

50. Plaintiff seeks declaratory relief with respect to the
unconstitutionality of the Business Combination Statute pursuant to the Federal
Declaratory Judgments Act, 28 U.S.C. (S) 2201, and injunctive relief against the
application and enforcement of this unconstitutional Statute. Plaintiffs and
the Class members are or will be irreparably and imminently injured by the
wrongs alleged herein.

51. Plaintiff and the Class have no adequate remedy at law for this
claim.

17
<PAGE>

COUNT II
--------

AGAINST ALL DEFENDANTS
FOR BREACH OF FIDUCIARY DUTIES
------------------------------

52. Plaintiff incorporates by reference paragraphs 1 through 41 as if
set forth herein.

53. Defendants, acting in concert, have violated their fiduciary
duties owed to the public shareholders of AMP and put their own personal
interests ahead of the interests of the AMP public shareholders and are using
their control positions as officers and/or directors of AMP for the purpose of
retaining their positions and perquisites as Board members or executives at the
expense of AMP's public shareholders.

54. The Individual Defendants are engaged in a course of conduct
which evidences their failure to: (a) seriously evaluate the benefits to the
Company's shareholders of the Offer; (b) undertake an adequate evaluation of
AMP's worth as a potential acquisition candidate; (c) take adequate steps to
enhance AMP's value and/or attractiveness as an acquisition candidate; (d)
effectively expose AMP to the marketplace in an effort to create an open auction
for AMP; or (e) act independently so that the interests of public shareholders
would be protected. Instead, defendants have sought to chill or block any
potential offers for AMP.

55. The Individual Defendants have taken no affirmative steps to
facilitate Allied's premium Tender Offer and thus far have been content to
remain behind the

18
<PAGE>

protections of the Company's defenses, including its poison pill, from unwanted
takeovers. To act consistent with their fiduciary duties, the Individual
Defendants should evaluate all available alternatives, including negotiating
with Allied and any other potential suitors, which they have failed to do.

56. The Individual Defendants owe fundamental fiduciary obligations
under the present circumstances to take all necessary and appropriate steps to
maximize shareholder value and explore in good faith the Allied proposal. In
addition, the Individual Defendants have the responsibility to act independently
so that the interests of AMP's public stockholders will be protected, to
seriously consider all bona fide offers for the Company, and to conduct fair and
--- ---- ----
active bidding procedures or other mechanisms for checking the market to assure
that the highest possible price is achieved. Further, the directors of the
Company must adequately ensure that no conflict of interest exists between
defendants' own interests and their fiduciary obligations to maximize
stockholder value and act in the shareholders' best interests or, if such
conflicts exist, to ensure that they will be resolved in the best interests of
the Company's public stockholders.

57. AMP represents a highly attractive acquisition candidate.
Defendants' conduct has deprived and will continue to deprive the Company's
public shareholders of the very substantial control premium which Allied is
prepared to pay or of the enhanced premium which further exposure of the Company
to the market could provide. Defendants are precluding the shareholders'
enjoyment of the full economic value of their investment

19
<PAGE>

by failing to proceed expeditiously and in good faith to evaluate and pursue a
premium acquisition proposal which would provide for an acquisition for all
shares at a very attractive price.

58. AMP's Board and its top management have frustrated Allied's
current acquisition overtures and offers; even though these proposals would
result in AMP's shareholders receiving a substantial premium over recent market-
prices of AMP stock. The Individual Defendants have done this because they know
that in the event AMP were acquired by any potential bidders, most or all of the
directors of AMP and its senior management would, either in connection with the
acquisition or shortly thereafter, be removed from the Board of the surviving
company because their services would not be necessary and they would be mere
surplusage and thus an acquisition would bring an end to their power, prestige
and profit. In so acting, AMP's directors and those in management allied with
them have been aggrandizing their own personal positions and interests over
those of AMP and its broader shareholder community to whom they owe fundamental
fiduciary duties not to entrench themselves in office.

59. The poison pill is wrongfully being used in a discriminatory
manner to preclude AMP's premium acquisition proposal or any other competing
bid. Given the premium and non-coercive nature of the Offer, and its
substantial value to AMP's stockholders, the Individual Defendants should not be
permitted to deny the Company's stockholders this opportunity. Defendants' use
of AMP's poison pill or other anti-takeover

20
<PAGE>

devices to block the Offer constitute an unreasonable and draconian response
thereto in violation of the fiduciary duties owed to AMP's stockholders.

60. By virtue of the acts and conduct alleged herein, the Individual
Defendants, who control the actions of the Company, have carried out a
preconceived plan and scheme to place their own personal interests ahead of the
interests of the shareholders of AMP and thereby entrench themselves in their
offices and positions within the Company. The Individual Defendants have
violated their fiduciary duties owed to plaintiffs and the Class in that they
have not and are not exercising independent business judgment and have acted and
are acting to the detriment of the Company's public shareholders for their own
personal benefit.

61. Plaintiff seeks preliminary and permanent injunctive relief and
declaratory relief preventing defendants from inequitably and unlawfully
depriving plaintiffs and the Class of their rights to realize a full and fair
value for their stock at a substantial premium over the market price and to
compel defendants to carry out their fiduciary duties to maximize shareholder
value in selling AMP.

62. Only through the exercise of this Court's equitable powers can
plaintiffs be fully protected from the immediate and irreparable injury which
defendants' actions threaten to inflict.

63. Unless enjoined by the Court, defendants will continue to breach
their fiduciary duties owed to plaintiffs and the members of the Class, and/or
aid and abet and

21
<PAGE>

participate in such breaches of duty, will continue to entrench themselves in
office, and will prevent the sale of AMP at a substantial premium, all to the
irreparable harm of plaintiffs and the other members of the Class, who are or
will be imminently injured by such misconduct.

64. Plaintiff and the Class have no adequate remedy at law for this
claim.

PRAYER FOR RELIEF
-----------------

WHEREFORE, plaintiff demands judgment as follows:

A. Declaring this to be a proper class action and certifying plaintiff
as class representative;

B. Declaring that the Business Combination Statute either generally or
as applied herein, are unconstitutional;

C. Ordering the Individual Defendants to carry out their fiduciary
duties to plaintiffs and the other members of the Class by announcing their
intention to:

(i) cooperate fully with any entity or person, including, but not
limited, to Allied, having a bona fide interest in proposing any transaction
---- ----
which would maximize shareholder value, including, but not limited to, a buy-out
or takeover of the Company;

(ii) immediately undertake an appropriate evaluation of AMP's worth as
a merger or acquisition candidate;

(iii) take all appropriate steps to effectively expose AMP to the
marketplace in an effort to create an active auction of the Company;

22
<PAGE>

(iv) act independently so that the interests of the Company's
public shareholders will be protected; and

(v) adequately ensure that no conflicts of interest exist between
the Individual Defendants' own interest and their fiduciary obligation to
maximize shareholder value or, in the event such conflicts exist, to ensure that
all conflicts of interest are resolved in the best interests of the public
shareholders of AMP.

D. Declaring that the Individual Defendants have violated their
fiduciary duties to the Class;

E. Enjoining defendants from abusing the corporate machinery of the
Company for the purpose of entrenching themselves in office or to unduly impeded
the Offer, including, without limitation, any by-law amendments that impair the
Company's stockholders' existing rights to amend the by-laws and/or to call a
special stockholders' meeting;

F. Ordering the Individual Defendants to take steps to facilitate a
premium acquisition by utilizing the Company's anti-takeover defenses, including
the Rights Plan and the Pennsylvania Business Combination Statute (if they are
not stricken) exclusively in a manner designed to maximize shareholder value;

G. Ordering the Individual Defendants, jointly and severally, to
account to plaintiffs and the Class for all damages suffered and to be suffered
by them as a result of the acts and transactions alleged herein;

23
<PAGE>

H. Awarding plaintiff the costs and disbursements of this action,
including a reasonable allowance for plaintiffs' attorneys' and experts' fees;
and

I. Granting such other and further relief as may be just and proper.

JURY DEMAND
-----------
Pursuant to Federal Rule of Civil Procedure 38, plaintiff demands a
trial by jury of all issues so triable.

DATED: August 7, 1998 GREENFIELD & RIFKIN LLP

By: /s/ Mark C. Rifkin
----------------------------------------
Mark C. Rifkin
800 Times Building
Ardmore, PA 19003
(610) 649-3900

Fred T. Isquith
Jeffrey G. Smith
Gregory Nespole
WOLF HALDENSTEIN ADLER FREEMAN
& HERZ LLP
270 Madison Avenue
New York, NY 10016
(212) 545-4600

Charles J. Piven, Esq.
LAW OFFICES OF CHARLES J. PIVEN
111 S. Calvert Street - Suite 2700
Baltimore, MD 21202
(410) 332-0030

<PAGE>

EXHIBIT 19

EXCERPTS FROM AMP'S ANNUAL REPORT ON FORM 10-K

Cautionary Statements for Purposes of the "Safe Harbor"

Statements made by AMP Incorporated in written or oral form to various
persons, including statements made in filings with the SEC, that are not
strictly historical facts are "forward-looking" statements that are based on
current expectations about the markets in which the Company does business and
assumptions made by management. Such statements should be considered as subject
to risks and uncertainties that exist in the Company's operations and business
environment and could render actual outcomes and results materially different
than predicted. The following includes some, but not all, of the factors or
uncertainties that could cause AMP to miss its projections:

. The effects of extreme changes in monetary and fiscal policies, in the U.S.
and abroad. This would include extreme currency fluctuations in the Japanese
Yen and German Mark, continued strengthening of the U.S. dollar, and
unforeseen inflationary pressure.

. The threat of a global economic slowdown in any one, or all, of our market
segments.

. Drastic and unforeseen price pressure throughout the business. Currently the
most noticeable pressure is in the personal computer industry where OEMs are
passing the price pressure through to their suppliers. Similar price pressure
can also be seen in the cellular/mobile phone industry.

. Increased difficulties in obtaining a consistent supply of basic materials
like copper, gold, or plastic resins at stable pricing levels.

. Unpredictable difficulties or delays in the development of key new product
programs, particularly in some of the Company's non-traditional businesses.

. Unforeseen interruptions to AMP's markets due to strikes that have regional
or multi-industry impacts, such as recent situations in Korea, France and
Spain.

. Rapid escalation of the cost of regulatory compliance and litigation.

<PAGE>

. Unpredictable governmental policies and actions including, but not
limited to, protectionism, sourcing requirements, confiscation of assets, and
reductions in public spending.

. Unforeseen intergovernmental conflicts or actions, including but not limited
to, armed conflict and trade wars. For example, the possibility of armed
conflict with Iraq, and the conflict between North Korea and South Korea or
China and Taiwan could escalate and have a substantial impact on our
business in Asia/Pacific.

. During an unforeseen business downturn or a period of less-than-anticipated
growth, under-utilization of AMP's factories and plants could have a negative
impact on our business.

. Greater than anticipated startup expenses and delays related to bringing new
plants on-line could impact our projections.

. Greater than anticipated difficulties and delays in assimilating newly-
acquired businesses into our business portfolio resulting in unanticipated
expenses and unrealized savings.

. Any difficulties in obtaining the human resource competencies that AMP needs
to achieve its business objectives; includes skilled-labor shortages in the
U.S. and abroad. This also assumes that we will be able to retain key talent,
both managerial and technical.

. Risks associated with any disruptive changes in our customer, supplier, and
competitor relations as a consequence of AMP's and others' movement along the
vertical product chain.

. The risks associated with any technological shifts away from AMP technologies
or core competencies.

. Unforeseen Year 2000 compliance issues, both within AMP and among our
customers and suppliers and in general among the business and governmental
communities, could negatively impact our business results.

. The risk of not recovering research and development expenses relating to a
limited ability to enforce patents and copyright laws in certain parts of the
world.

. While AMP has traditionally been a leader in environmental compliance,
unforeseen and drastic changes to governmental environmental policies and
related government action could impact our projections.

2
<PAGE>

. Standardization, while often viewed as a positive for AMP, could have a
substantial impact on our business.

. Risks associated with market acceptance of our customers' end-products such
as technology winners in the converging computer, consumer electronics and
communications industries.

. Unforeseen interruptions to AMP's business with our largest customers,
resulting from, but not limited to, strikes, cash flow, or inventory problems
at the account.