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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
(AMENDMENT NO. 15)
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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) 564-0100
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICE AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
WITH A COPY TO:
PETER ALLAN ATKINS
DAVID J. FRIEDMAN
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022-3897
(212) 735-3000
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This Amendment No. 15 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9 dated August 21, 1998, as amended (the "Schedule
14D-9"), filed by AMP Incorporated, a Pennsylvania corporation ("AMP"), in
connection with the tender offer by PMA Acquisition Corporation, a Delaware
corporation (the "Purchaser") and wholly owned subsidiary of AlliedSignal
Inc., a Delaware corporation ("AlliedSignal"), to purchase shares of common
stock, no par value, of AMP (the "Common Stock"), including the associated
Common Stock Purchase Rights (the "Rights" and, together with the Common
Stock, the "Shares") issued pursuant to the Rights Agreement, dated as of
October 25, 1989, and as amended on September 4, 1992, August 12, 1998, August
20, 1998 and September 17, 1998 (the "Rights Agreement"), between AMP and
ChaseMellon Shareholder Services L.L.C., as Rights Agent, at a price of $44.50
per Share, net to the seller in cash, as disclosed in its Tender Offer
Statement on Schedule 14D-1, dated August 10, 1998, as amended, upon the terms
and subject to the conditions set forth in the Offer to Purchase, dated August
10, 1998, and as amended on September 14, 1998, and the related Letter of
Transmittal.
Unless otherwise indicated, all defined terms used herein shall have the
same meaning as those set forth in the Schedule 14D-9.
ITEM 2. TENDER OFFER OF THE BIDDER.
Item 2 is hereby amended by adding the following paragraph at the end
thereof:
On September 14, 1998, the Purchaser disclosed in Amendment No. 15 to the
Schedule 14D-1 that, pursuant to the "Amended AlliedSignal Offer", it has
reduced the number of Shares sought and is now offering to purchase 40,000,000
Shares at a price of $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 as amended on September 14, 1998, and the related Letter
of Transmittal. The Purchaser also disclosed an intention to commence,
following consummation of the Amended AlliedSignal Offer, another offer to
purchase the Shares not purchased in the Amended AlliedSignal Offer at a price
of $44.50 per Share, net to the seller in cash.
Also on September 14, 1998, AlliedSignal revised the Consent Solicitation to
include a proposal to amend AMP's By-laws to provide that the Board be
stripped of all powers, rights and duties with respect to the Rights
Agreement, or any similar agreement, and that all such rights, powers and
duties be vested in and exercised by certain individuals to be designated (but
who have not yet been identified) by AlliedSignal in such proposal (the
"Rights Plan Proposal"). THIS AMENDMENT TO THE 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 4. THE SOLICITATION OR RECOMMENDATION.
(a) RECOMMENDATION OF THE BOARD OF DIRECTORS.
Subsection (a) of Item 4 is hereby amended by adding the following paragraph
at the end thereof:
THE BOARD HAS DETERMINED, BY THE UNANIMOUS VOTE OF THOSE PRESENT, THAT THE
AMENDED 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 AMENDED ALLIEDSIGNAL OFFER, NOT TENDER
1
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THEIR SHARES PURSUANT TO THE AMENDED ALLIEDSIGNAL OFFER AND WITHDRAW ANY
SHARES WHICH MAY HAVE PREVIOUSLY BEEN TENDERED.
(b) BACKGROUND; REASONS FOR THE RECOMMENDATION.
Subsection (b) of Item 4 is hereby amended by adding the following
paragraphs at the end thereof:
At a meeting held on September 17, 1998, the Board determined, by the
unanimous vote of those present, that the Amended AlliedSignal Offer is not in
the best interests of AMP and its relevant constituencies, including its
shareholders. In reaching its determination, the Board considered a number of
factors, in addition to the factors enumerated in the Schedule 14D-9 filed
with the Securities and Exchange Commission on August 21, 1998 relating to the
original offer (the "Original AlliedSignal Offer"), including the following:
(i) the Board's belief that the purpose of the Amended AlliedSignal Offer
and other actions announced by AlliedSignal on September 14, 1998 is to
further an acquisition of AMP which the Board has rejected as inadequate,
not reflective of the value or prospects of AMP and not in the best
interests of AMP and its relevant constituencies, including its
shareholders;
(ii) the Amended AlliedSignal Offer is a partial offer, which offers no
new value to AMP and its relevant constituencies, including its
shareholders;
(iii) there is no assurance that AlliedSignal would consummate a second-
step transaction after November 6, 1999, when the Rights Agreement expires,
and if it does, that the consideration paid would not be inadequate;
(iv) the Board's belief that the presence of AlliedSignal as an 18%
minority shareholder intent on taking control of AMP is likely to be a
deterrent to any third party interest in a business combination transaction
with AMP in the future, and likely to have a serious and immediate
dampening effect on the ability of AMP to carry out its profit improvement
plan;
(v) the Board's belief that the implementation of the profit improvement
plan should provide over time greater value than the Amended AlliedSignal
Offer, the Original AlliedSignal Offer and any other offer which
AlliedSignal has indicated that it may commence;
(vi) the Board's concern that Shares tendered and purchased pursuant to
the Amended AlliedSignal Offer will not receive the benefit of any value
enhancement action undertaken by AMP or of any higher price offered by
AlliedSignal or any other party in a subsequent offer; and
(vii) the Board's belief, after having reviewed the matter with counsel,
that AlliedSignal's actions in connection with the Amended AlliedSignal
Offer and its future offer to purchase any Shares not purchased pursuant to
the Amended AlliedSignal Offer raise serious concerns under the federal
securities laws regulating tender offers.
In light of the numerous factors evaluated in connection with its
consideration of the Amended AlliedSignal Offer, the Board determined that the
Amended 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
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 Amended AlliedSignal Offer, the Board 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 received the advice of Credit Suisse First Boston, Donaldson, Lufkin
& Jenrette Securities Corporation, Skadden, Arps, Slate, Meagher & Flom LLP
and other advisors who were retained to advise the Board in connection with
AlliedSignal's original tender offer.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
Subsection (a) of Item 7 is hereby amended by adding the following paragraph
at the end of the first paragraph thereof:
2
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As previously reported, 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 business
strategy, for enhancing value in the nearer term. In furtherance of the
foregoing, management, with the assistance of AMP's financial and legal
advisors, is seriously exploring the feasibility of engaging in transactions
which would provide value to the shareholders of AMP in the nearer term (by
way of share repurchase, special dividend or other means), and in connection
therewith, expects to engage in discussions and/or negotiations with various
parties which may provide financing, on a debt and/or equity basis, for such a
transaction or transactions.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
(A) SHAREHOLDER RIGHTS PLAN
Subsection (a) of Item 8 is hereby amended by adding the following
paragraphs at the end thereof:
At a meeting held on September 17, 1998, the Board approved Amendment No. 4
to the Rights Agreement which will amend the definition of the term "Acquiring
Person" to reduce from 20% to 10% the threshold at which a person who has made
an unsolicited acquisition proposal may become an Acquiring Person and thereby
trigger a number of the provisions of the Rights Agreement. Amendment No. 4
also provides that the Rights Agreement shall not be amendable, the Rights
shall not be redeemable and the Board will not be entitled to exercise certain
discretionary authority otherwise available or take certain other actions,
upon the adoption of a By-law intended to limit the authority of the Board
and/or confer authority on any person other than the Board to take action with
respect to the Rights Agreement and the Rights issued thereunder. The Rights
Plan Proposal is such a By-law. A copy of Amendment No. 4 to the Rights
Agreement is filed as Exhibit 51 hereto and is incorporated herein by
reference. Amendment No. 4 will not become effective until September 24, 1998,
provided that, once effective, Amendment No. 4 shall apply to all actions
which shall have occurred on or after September 17, 1998 (the date of the
amendment).
Amendment No. 4 to the Rights Agreement was adopted by the Board in response
to AlliedSignal's recent actions, including the Amended AlliedSignal Offer and
the Rights Plan Proposal, which the Board believes are intended to "end-run"
the amendments to the Rights Agreement previously adopted by the Board at its
August 20, 1998 meeting and reflected in Amendment No. 3 to the Rights
Agreement. As previously described, one of the proposals for which
AlliedSignal intends to seek consents is the Rights Plan Proposal, a proposal
which would have the effect of stripping the Board of all authority, rights
and duties with respect to the Rights Agreement and vest such authority,
rights and duties in individuals hand picked by AlliedSignal. By reducing the
threshold at which the Rights will be triggered, and by making the Rights
nonredeemable and limiting the discretionary authority of directors if the
Rights Plan Proposal is adopted, Amendment No. 4, like Amendment No. 3, is
intended to enhance AMP's ability to implement the profit improvement plan
through November 6, 1999, the expiration date of the Rights Agreement, and
thereby protect the value expected to be generated by the profit improvement
plan for AMP and its relevant constituencies, including its shareholders.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
The following exhibits are filed herewith:
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
51 Amendment No. 4 to the Rights Agreement, dated September 17, 1998, by
and between AMP and ChaseMellon Shareholder Services L.L.C., as Rights
Agent.
52 Text of a press release issued by AMP on September 18, 1998.
53 Letter to Shareholders, dated September 18, 1998.*
</TABLE>
- --------
* Included in copies of the Amendment No. 15 to the Schedule 14D-9 mailed to
shareholders.
* * *
3
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This document and the exhibits attached hereto contain certain "forward-
looking" statements which AMP believes are within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. The safe harbors intended to be created thereby are not available to
statements made in connection with a tender offer and AMP is not aware of any
judicial determination as to the applicability of such safe harbor to forward-
looking statements made in proxy solicitation materials when there is a
simultaneous tender offer. However, shareholders should be aware that any such
forward-looking statements should be considered as subject to the risks and
uncertainties that exist in AMP's operations and business environment which
could render actual outcomes and results materially different than predicted.
For a description of some of the factors or uncertainties which could cause
actual results to differ, reference is made to the section entitled
"Cautionary Statements for Purposes of the "Safe Harbor"' in AMP's Annual
Report on Form 10-K for the year ended December 31, 1997, a copy of which was
also filed as Exhibit 19 to the Schedule 14D-9. In addition, the realization
of the benefits anticipated from the strategic initiatives will be dependent,
in part, on management's ability to execute its business plans and to motivate
properly the AMP employees, whose attention may have been distracted by the
AlliedSignal Offer and whose numbers will have been reduced as a result of
these initiatives.
4
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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: September 18, 1998
5
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EXHIBIT INDEX
The following exhibits are filed herewith:
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
51 Amendment No. 4 to the Rights Agreement, dated September 17, 1998, by
and between AMP and ChaseMellon Shareholder Services L.L.C., as Rights
Agent.
52 Text of a press release issued by AMP on September 18, 1998.
53 Letter to Shareholders, dated September 18, 1998.
</TABLE>
<PAGE>
EXHIBIT 51
AMENDMENT No. 4 TO THE RIGHTS AGREEMENT
---------------------------------------
Amendment No. 4 to the Rights Agreement, dated as of September 17, 1998
(the "Amendment No. 4"), 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 25, 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, 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 and on
August 20, 1998, the Company and ChaseMellon Shareholder Services L.L.C. entered
into Amendment No. 3 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.
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. Amendment of "Certain Definitions" Section.
------------------------------------------
(a) The definition of "Acquiring Person" contained in Section 1 of
the Agreement is hereby amended by adding after the parenthetical "(the
"Pennsylvania BCL")" and before the word "other", the following:
"(except that with respect to any Person and its Affiliates on whose
behalf, directly or indirectly, an Unsolicited Acquisition Proposal (as
hereinafter defined) has
<PAGE>
been made, for purposes of this Agreement all references in Section 2553 to
"20%" shall read "10%")."
Section 2. 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, (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, or (iv) the adoption of any By-law
intended to limit the authority of the Board of Directors and/or confer
authority on any Person other than the Board of Directors to take action with
respect to this Agreement or the Rights issued hereunder, 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."
2
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Section 3. Amendment to "Supplements and Amendments" Section. The last
-------------------------------------------------
sentence of Section 26 of the Agreement is amended, in its entirety, to read as
follows:
"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. In addition, at
a time when the Rights are not redeemable, the Board of Directors shall not (x)
have any discretionary authority otherwise granted to it hereunder to take or
omit to take any action hereunder, other than (i) to defer the distribution of
the Rights following the commencement of a tender offer to a date no later
than the date immediately prior to the date on which a Person becomes an
Acquiring Person or (ii) to take, or omit to take, action if such action or
omission is solely ministerial or administrative in nature and has no material
affect on the Rights, or (y) take any action which will have the same effect as
a redemption or termination of the Rights."
Section 4. 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. 4 shall be deemed to refer to this Amendment No. 4. 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. This
Amendment No. 4 shall become effective on September 24, 1998, provided that,
once effective, this Amendment No. 4 shall apply to all actions which shall
have occurred on or after the date of this Amendment No.4.
3
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IN WITNESS WHEREOF, the parties have caused this Amendment No. 4 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
By:/s/ David F. Henschel By:/s/ Robert Ripp
---------------------- ------------------------
Name: David F. Henschel Name: Robert Ripp
Title: Corporate Secretary Title: Chairman and Chief Executive
Officer
Attest: ChaseMellon Shareholder
Services L.L.C.
By:/s/ Robert G. Scott, Jr. By:/s/ Michael A. Nespoli
------------------------ ------------------------
Name: Robert G. Scott, Jr. Name: Michael A. Nespoli
Title: Vice President Title: Vice President
4
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EXHIBIT 52
FOR IMMEDIATE RELEASE
AMP BOARD OF DIRECTORS REJECTS
ALLIEDSIGNAL'S AMENDED PARTIAL OFFER
Board Adopts Rights Plan Amendments in Response
to AlliedSignal's Latest Maneuvers
HARRISBURG, Pennsylvania (September 18, 1998) - AMP Incorporated (NYSE: AMP)
today announced that its Board of Directors, by a unanimous vote of the
directors present, has recommended that shareholders reject AlliedSignal Inc.'s
amended tender offer for 40 million shares of AMP stock, or approximately 18% of
all outstanding shares, at a price of $44.50 per share. In rejecting
AlliedSignal's amended partial offer, AMP's Board determined that the 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. AMP's Board previously rejected AlliedSignal's original offer for
all outstanding shares at the same $44.50 price.
The Board recommended that AMP shareholders not tender their shares to
AlliedSignal and if shareholders have tendered any shares they should withdraw
them. In this connection, AMP noted the following:
. AMP's Profit Improvement Plan is working and is being accelerated.
. AMP expects to be announcing shortly action designed to enhance value to AMP
shareholders in the nearer term.
. Any shares purchased by AlliedSignal in its amended partial offer at its
current expiration date of September 25, 1998 will neither benefit from any
such value enhancement action by AMP nor from any higher price AlliedSignal
might offer to pay for AMP's shares in a subsequent tender offer.
. The presence of AlliedSignal as an 18% minority shareholder intent upon
acquiring control of AMP is, in the Board's view, likely to be a deterrent to
any third party interest in a business combination transaction with AMP in
the future, and could have a serious and immediate dampening effect on the
ability of AMP to carry out its Profit Improvement Plan.
Robert Ripp, AMP's chairman and chief executive officer, said, "It is not AMP's
strategy to sell the Company. We have been quite clear about this. We have
been equally clear, however, that AMP's directors fully understand their
responsibilities to deal with reasonable acquisition and business combination
proposals, if presented. At the same time, our Board recognizes its
responsibilities when presented with an unreasonable proposal. AlliedSignal's
original offer and its amended offer are clearly unreasonable in our Board's
considered view. We are sharply focused on building value for and delivering it
to AMP's constituencies, including our shareholders. For the many reasons we
have stated, AlliedSignal's takeover bid simply does not measure up to the new
AMP as a value proposition."
-more-
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-2-
AMP also announced that in light of its continuing concerns about AlliedSignal's
offer, including those noted above, it has amended its Shareholder Rights Plan,
in response to AlliedSignal's amended partial offer, to reduce the threshold at
which the Rights become exercisable from 20% to 10%. In addition, in order to
block AlliedSignal's attempt to end-run the previously adopted protective
features of the Rights Plan, the Board amended the Rights Plan to provide that
it is not amendable, and the Rights are non-redeemable, upon the adoption of a
By-law intended to limit the Board's authority, rights and duties with respect
to the Rights Plan and the Rights. On September 14, 1998, AlliedSignal said it
would solicit consents in favor of a new By-law which purportedly would strip
the Board of all authority regarding the Rights Plan and vest such authority in
certain individuals designated by AlliedSignal. AlliedSignal has not yet
revealed the identities of these individuals.
Mr. Ripp said, "There is a carefully constructed statutory framework under
Pennsylvania law which, together with our Shareholder Rights Plan, is designed
to protect AMP and all of our constituencies, including our shareholders, from
AlliedSignal's opportunistic bid. Clearly, AlliedSignal is spending an
inordinate amount of time searching for loopholes in these protective
provisions.
"AlliedSignal apparently believed it found a way to attempt to lock up a
significant minority position in AMP at an inadequate price, while at the same
time seeking to strip the AMP Board of its authority relating to the Rights
Plan. AlliedSignal's maneuvers were designed to make more difficult the
realization of value by AMP through the implementation of our Profit Improvement
Plan and make more difficult future efforts by others to acquire AMP."
Additional information with respect to the Board's decision to recommend that
shareholders reject AlliedSignal's amended offer is contained in an amendment to
AMP's Schedule 14D-9 which is being filed today with the Securities and Exchange
Commission and will be mailed to shareholders.
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.
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
# # #
<PAGE>
-3-
AMP and certain other persons named below may be deemed to be participants in
the solicitation of revocations of consents in response to AlliedSignal's
consent solicitation. The participants in this solicitation may include the
directors of AMP (Ralph D. DeNunzio, Barbara H. Franklin, Joseph M. Hixon III,
William J. Hudson, Jr., Joseph M. Magliochetti, Harold A. McInnes, Jerome J.
Meyer, John C. Morley, Robert Ripp, Paul G. Schloemer and Takeo Shiina); the
following executive officers of AMP: Robert Ripp (Chairman and Chief Executive
Officer), William J. Hudson (Vice Chairman), James E. Marley (former Chairman),
William S. Urkiel (Corporate Vice President and Chief Financial Officer),
Herbert M. Cole (Senior Vice President for Operations), Juergen W. Gromer
(Senior Vice President, Global Industry Businesses), Richard P. Clark
(Divisional Vice President, Global Wireless Products Group), Thomas DiClemente
(Corporate Vice President and President, Europe, Middle East, Africa), Rudolf
Gassner (Corporate Vice President and President, Global Personal Computer
Division), Charles W. Goonrey (Corporate Vice President and General Legal
Counsel), John E. Gurski (Corporate Vice President and President, Global Value-
Added Operations and President, Global Operations Division), David F. Henschel
(Corporate Secretary), John H. Kegel (Corporate Vice President, Asia/Pacific),
Mark E. Lang (Corporate Controller), Philippe Lemaitre (Corporate Vice President
and Chief Technology Officer), Joseph C. Overbaugh (Corporate Treasurer),
Nazario Proietto (Corporate Vice President and President, Global Consumer,
Industrial and Power Technology Division); and the following other members of
management and employees of AMP: Merrill A. Yohe, Jr. (Vice President, Public
Affairs), Richard Skaare (Director, Corporate Communication), Douglas Wilburne
(Director, Investor Relations), Suzanne Yenchko (Director, State Government
Relations), Mary Rakoczy (Manager, Shareholder Services), Dorothy J. Hiller
(Assistant Manager, Shareholder Services), Melissa E. Witsil (Communications
Assistant) and Janine M. Porr (Executive Secretary). 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") and Donaldson,
Lufkin & Jenrette Securities Corporation ("DLJ") to act as its financial
advisors in connection with the AlliedSignal Offer, for which CSFB and DLJ will
receive customary fees, as well as reimbursement of reasonable out-of-pocket
expenses. In addition, AMP has agreed to indemnify CSFB, DLJ and certain related
persons against certain liabilities, including certain liabilities under the
federal securities laws, arising out of their engagement. CSFB and DLJ are
investment banking firms that provide a full range of financial services for
institutional and individual clients. Neither CSFB nor DLJ admits that it or any
of its directors, officers or employees is a "participant" as defined in
Schedule 14A promulgated under the Securities Exchange Act of 1934, as amended,
in the solicitation, or that Schedule 14A requires the disclosure of certain
information concerning either CSFB or DLJ. In connection with CSFB's role as
financial advisor to AMP, CSFB and the following investment banking employees of
CSFB may communicate in person, by telephone or otherwise with a limited number
of institutions, brokers or other persons who are stockholders of AMP: Alan
Howard, Steven Koch, Scott Lindsay, and Lawrence Hamdan. In connection with
DLJ's role as financial advisor to AMP, DLJ and the following investment banking
employees of DLJ may communicate in person, by telephone or otherwise with a
limited number of institutions, brokers or other persons who are stockholders of
AMP: Douglas V. Brown and Herald L. Ritch. In the normal course of its
business, each of CSFB and DLJ regularly buys and sells securities issued by AMP
for its own account and for the accounts of its customers, which transactions
may result in CSFB, DLJ or the associates of either of them having a net "long"
or net "short" position in AMP securities, or option contracts or other
derivatives in or relating to such securities. As of September 11, 1998, DLJ
held no shares of AMP common stock for its own account and CSFB had a net long
position of 103,966 shares of AMP common stock.
This press release contains certain "forward-looking" statements which AMP
believes are within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. The safe harbors intended
to be created thereby are not available to statements made in connection with a
tender offer and AMP is not aware of any judicial determination as to the
applicability of such safe harbor to forward-looking statements made in proxy
solicitation materials when there is a simultaneous tender offer. However,
shareholders should be aware that any such forward-looking statements should be
considered as subject to the risks and uncertainties that exist in AMP's
operations and business environment which could render actual outcomes and
results materially different than predicted. For a description of some of the
factors or uncertainties which could cause actual results to differ, reference
is made to the section entitled "Cautionary Statements for Purposes of the 'Safe
Harbor'" in AMP's Annual Report on Form 10-K for the year ended December 31,
1997. In addition, the realization of the benefits anticipated from the
strategic initiatives will be dependent, in part, on management's ability to
execute its business plans and to motivate properly the AMP employees, whose
attention may have been distracted by AlliedSignal's tender offer and whose
numbers will have been reduced as a result of these initiatives.
<PAGE>
EXHIBIT 53
[AMP LETTERHEAD]
September 18, 1998
Dear Fellow Shareholders:
On September 14, 1998, AlliedSignal Inc. announced that its wholly owned
subsidiary, PMA Acquisition Corporation, has reduced to 40 million the number
of shares of common stock of AMP that it is seeking to acquire pursuant to its
unsolicited tender offer. The price to be paid per share is $44.50, the same as
in the original offer.
YOUR BOARD OF DIRECTORS, BY THE UNANIMOUS VOTE OF THOSE PRESENT, HAS
DETERMINED THAT ALLIEDSIGNAL'S AMENDED OFFER IS NOT IN THE BEST INTERESTS OF
AMP AND ITS RELEVANT CONSTITUENCIES, INCLUDING ITS SHAREHOLDERS, AND RECOMMENDS
THAT YOU REJECT ALLIEDSIGNAL'S AMENDED OFFER, NOT TENDER YOUR SHARES PURSUANT
TO SUCH OFFER AND WITHDRAW ANY SHARES WHICH MAY HAVE PREVIOUSLY BEEN TENDERED.
Your Board of Directors remains convinced that continuing to pursue actively
our strategic goals is in the best interests of AMP and the best way for AMP to
realize its inherent values. In this connection, your Board noted the
following:
. AMP's profit improvement plan is working and is being accelerated.
. AMP expects to be announcing shortly action designed to enhance value to
AMP shareholders in the nearer term.
. Any shares purchased by AlliedSignal in its amended partial offer at its
current expiration date of September 25, 1998 will neither benefit from
any such value enhancement action by AMP nor from any higher price
AlliedSignal might offer to pay for AMP's shares in a subsequent tender
offer.
. The presence of AlliedSignal as an 18% minority shareholder intent upon
acquiring control of AMP is, in the Board's view, likely to be a
deterrent to any third party interest in a business combination
transaction with AMP in the future, and could have a serious and
immediate dampening effect on the ability of AMP to carry out its profit
improvement plan.
It is not AMP's strategy to sell the company. We have been quite clear about
this. We have been equally clear, however, that AMP's directors fully
understand their responsibilities to deal with reasonable acquisition and
business combination proposals, if presented. At the same time, your Board
recognizes its responsibilities when presented with an unreasonable proposal.
AlliedSignal's original offer and its amended offer are clearly unreasonable in
your Board's considered view. We are sharply focused on building value for and
delivering it to AMP's constituencies, including our shareholders. For the many
reasons we have stated, AlliedSignal's takeover bid simply does not measure up
to the new AMP as a value proposition.
At a meeting held on September 17, 1998, your Board of Directors also
authorized certain amendments to the Rights Agreement to facilitate the
implementation of the profit improvement plan for the benefit of AMP and its
relevant constituencies, including its shareholders. These amendments are
described in greater detail in the enclosed Amendment No. 15 to the Schedule
14D-9.
<PAGE>
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 Amendment No. 15 to the 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 and I greatly appreciate your continued support and
encouragement.
Sincerely,
/s/ Robert Ripp
Robert Ripp
Chairman and Chief Executive Officer
Enclosure
