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________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE
SECURITIES EXCHANGE ACT OF 1934
------------------------
AMP INCORPORATED
(NAME OF SUBJECT COMPANY)
PMA ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
ALLIEDSIGNAL INC.
(BIDDER)
COMMON STOCK, WITHOUT PAR VALUE
(INCLUDING THE COMMON STOCK PURCHASE RIGHTS)
(TITLE OF CLASS OF SECURITIES)
031897101
(CUSIP NUMBER OF CLASS OF SECURITIES)
PETER M. KREINDLER, ESQ.
ALLIEDSIGNAL INC.
101 COLUMBIA ROAD
MORRISTOWN, NEW JERSEY 07692
(973) 455-5513
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
------------------------
COPIES TO:
ARTHUR FLEISCHER, ESQ.
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
ONE NEW YORK PLAZA
NEW YORK, NEW YORK 10004-1980
(212) 859-8120
------------------------
CALCULATION OF FILING FEE
<TABLE>
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TRANSACTION VALUATION* AMOUNT OF FILING FEE**
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$9,987,952,242 $1,997,590
- ------------------------------------------------------------------------------------------------------------------
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</TABLE>
* Based on the offer to purchase all outstanding shares of Common Stock of AMP
Incorporated together with the associated Common Stock Purchase Rights at
$44.50 cash per share, the number of Shares of Common Stock reported as
outstanding in AMP Incorporated's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998 (218,601,033), and the number of shares of Common
Stock under option reported in AMP Incorporated's 1997 Annual Report on Form
10-K (5,847,332).
** 1/50 of 1% of Transaction Value.
------------------------
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
<TABLE>
<S> <C>
AMOUNT PREVIOUSLY PAID: FILING PARTY:
FORM OR REGISTRATION NO.: DATE FILED:
</TABLE>
________________________________________________________________________________
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This Schedule 14D-1 relates to a tender offer by PMA Acquisition
Corporation, a Delaware corporation (the 'Offeror'), a wholly owned subsidiary
of AlliedSignal Inc., a Delaware corporation ('Parent'), to purchase all of the
outstanding shares of common stock, without par value (the 'Shares'), including
the associated Common Stock Purchase Rights (the 'Rights'), of AMP Incorporated,
a Pennsylvania corporation (the 'Company'), at a purchase price of $44.50 per
Share, net to the seller in cash, without interest, upon the terms and subject
to the conditions set forth in the Offer to Purchase, dated August 10, 1998 (the
'Offer to Purchase'), and in the related Letter of Transmittal (which together
constitute the 'Offer'), copies of which are filed as Exhibits (a)(1) and (a)(2)
hereto, respectively, and which are incorporated herein by reference.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is AMP Incorporated. The address of the
principal executive offices of the Company is set forth in Section 8 ('Certain
Information Concerning the Company') of the Offer to Purchase and is
incorporated herein by reference.
(b) The exact title of the class of equity securities being sought in the
Offer is the common stock, without par value (the 'Common Stock'), of the
Company and the associated Common Stock Purchase Rights (the 'Rights'). The
information set forth in the Introduction to the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in Section 6 ('Price Range of Common Stock;
Dividends') of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a) through (d), (g) The information set forth in the Introduction and
Section 9 ('Certain Information Concerning Offeror and Parent') and Schedule I
of the Offer to Purchase is incorporated herein by reference.
(e) and (f) None of the Offeror or Parent, nor, to the best of their
knowledge, any of the persons listed in Schedule I of the Offer to Purchase, has
during the last five years (i) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting activities subject
to, federal or state securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) None.
(b) None.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in Sections 10 ('Source and Amount of Funds')
and 16 ('Fees and Expenses') of the Offer to Purchase is incorporated herein by
reference.
(b) Not applicable.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a) through (e) The information set forth in the Introduction, Section 11
('Background of the Offer; Past Contacts with the Company') and Section 12
('Purpose of the Offer and the Proposed Merger; Plans for the Company; Certain
Considerations') of the Offer to Purchase is incorporated herein by reference.
Except as set forth in Sections 11 and 12 of the Offer to Purchase, neither the
Parent nor the Offeror have any present plans or proposals that would result in
an extraordinary corporate transaction, such as a merger, reorganization,
liquidation or sale or transfer of a material
2
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amount of assets involving the Company, or any other material changes in the
Company's capitalization, dividend policy, corporate structure or business or
composition of its management or personnel.
(f) and (g) The information set forth in Section 7 ('Effect of the Offer on
the Market for Common Stock and Registration Under the Exchange Act') of the
Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) None.
(b) Not applicable.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
None.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and in Section 16 ('Fees and
Expenses') of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 ('Certain Information Concerning
Offeror and Parent') of the Offer to Purchase is incorporated herein by
reference.
The incorporation by reference herein of the above-mentioned financial
information does not constitute an admission that such information is material
to a decision by a security holder of the Company as whether to sell, tender or
hold Shares being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) None.
(b) and (c) The information set forth in Section 15 ('Certain Legal
Matters; Required Regulatory Approvals') of the Offer to Purchase is
incorporated herein by reference.
(d) The information set forth in Section 7 ('Effect of the Offer on the
Market for Common Stock and Registration under the Exchange Act') is
incorporated herein by reference.
(e) The information set forth in Section 15 ('Certain Legal Matters;
Required Regulatory Approvals') is incorporated herein by reference.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference in its entirety.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated August 10, 1998.
(a)(2) Letter of Transmittal.
(a)(3) Letter dated August 10, 1998, from Lazard Freres & Co. LLC and
Goldman, Sachs & Co. to brokers, dealers, commercial banks, trust companies and
other nominees.
(a)(4) Letter dated August 10, 1998, to be sent by brokers, dealers,
commercial banks, trust companies and other nominees to their clients.
(a)(5) Notice of Guaranteed Delivery.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Slides used in connection with analyst presentation on August 4,
1998.
3
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(a)(8) Form of Summary Advertisement, dated August 10, 1998.
(a)(9) Press Release issued by Parent on August 4, 1998.
(a)(10) Letter dated July 30, 1998, from Lawrence A. Bossidy, Chairman and
Chief Executive Officer of AlliedSignal Inc. to Mr. William J. Hudson, Chief
Executive Officer and President of AMP Incorporated.
(a)(11) Letter, dated August 4, 1998, from Lawrence A. Bossidy, Chairman
and Chief Executive Officer of AlliedSignal Inc. to the Board of Directors of
AMP Incorporated.
(b) None.
(c) None.
(d) None.
(e) Not applicable.
(f) None.
4
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SIGNATURE
After due inquiry and to the best of its knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: August 10, 1998
PMA ACQUISITION CORPORATION
By: /S/ PETER M. KREINDLER
...................................
NAME: PETER M. KREINDLER
TITLE: VICE PRESIDENT,
SECRETARY AND DIRECTOR
ALLIEDSIGNAL INC.
By: /S/ PETER M. KREINDLER
...................................
NAME: PETER M. KREINDLER
TITLE: SENIOR VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
5
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE NO.
- ------- -------------------------------------------------------------------------------------------- --------
<S> <C> <C>
(a)(1) -- Offer to Purchase, dated August 10, 1998....................................................
(a)(2) -- Letter of Transmittal.......................................................................
(a)(3) -- Letter dated August 10, 1998, from Lazard Freres & Co. LLC and Goldman, Sachs & Co. to
brokers, dealers, commercial banks, trust companies and other nominees......................
(a)(4) -- Letter dated August 10, 1998, to be sent by brokers, dealers, commercial banks, trust
companies and other nominees to their clients...............................................
(a)(5) Notice of Guaranteed Delivery...............................................................
(a)(6) -- Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.......
(a)(7) -- Slides used in connection with analyst presentation on August 4, 1998.......................
(a)(8) -- Form of Summary Advertisement, dated August 10, 1998........................................
(a)(9) -- Press Release issued by Parent on August 4, 1998............................................
(a)(10) -- Letter dated July 30, 1998, from Lawrence A. Bossidy, Chairman and Chief Executive Officer
of AlliedSignal Inc. to Mr. William J. Hudson, Chief Executive Officer and President of AMP
Incorporated................................................................................
(a)(11) -- Letter, dated August 4, 1998, from Lawrence A. Bossidy, Chairman and Chief Executive Officer
of AlliedSignal Inc. to the Board of Directors of AMP Incorporated..........................
</TABLE>
6
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OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
AMP INCORPORATED
AT
$44.50 NET PER SHARE OF COMMON STOCK
BY
PMA ACQUISITION CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
ALLIEDSIGNAL INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, SEPTEMBER 11, 1998, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON: (1) THERE BEING VALIDLY TENDERED AND NOT
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES OF COMMON
STOCK OF THE COMPANY (THE 'SHARES') REPRESENTING AT LEAST A MAJORITY OF ALL OF
THE OUTSTANDING SHARES ON A FULLY DILUTED BASIS (THE 'MINIMUM CONDITION'); (2)
THE COMPANY'S COMMON STOCK PURCHASE RIGHTS (THE 'RIGHTS') HAVING BEEN REDEEMED
BY THE COMPANY'S BOARD OF DIRECTORS OR OFFEROR BEING SATISFIED, IN ITS SOLE
DISCRETION, THAT THE RIGHTS HAVE BEEN INVALIDATED OR ARE OTHERWISE INAPPLICABLE
TO THE OFFER AND THE PROPOSED MERGER (THE 'RIGHTS CONDITION'); (3) THE
ACQUISITION OF SHARES PURSUANT TO THE OFFER HAVING BEEN APPROVED PURSUANT TO
CHAPTER 25, SUBCHAPTER F OF THE PENNSYLVANIA BUSINESS CORPORATION LAW (THE
'BUSINESS COMBINATION STATUTE') OR OFFEROR BEING SATISFIED, IN ITS SOLE
DISCRETION, THAT THE BUSINESS COMBINATION STATUTE IS INVALID OR OTHERWISE
INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER (THE 'BUSINESS COMBINATION
CONDITION'); (4) OFFEROR HAVING BEEN ACCORDED THE RIGHT TO VOTE THE SHARES
ACQUIRED BY IT PURSUANT TO THE OFFER UNDER CHAPTER 25, SUBCHAPTER G OF THE
PENNSYLVANIA BUSINESS CORPORATION LAW (THE 'CONTROL SHARE CONDITION'); (5) ANY
APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT
OF 1976 HAVING EXPIRED OR TERMINATED PRIOR TO THE EXPIRATION OF THE OFFER (THE
'HSR CONDITION'); AND (6) SATISFACTION OF CERTAIN OTHER TERMS AND CONDITIONS
(SEE SECTION 14).
THIS OFFER IS NOT CONDITIONED ON OFFEROR OBTAINING FINANCING. SEE
INTRODUCTION AND SECTION 10.
------------------------
PARENT IS SEEKING TO NEGOTIATE WITH THE COMPANY A MERGER OR SIMILAR
BUSINESS COMBINATION (THE 'PROPOSED MERGER') IN WHICH HOLDERS OF THE SHARES
WOULD RECEIVE CONSIDERATION CONSISTING OF CASH OR EQUITY SECURITIES OF PARENT OR
A COMBINATION OF BOTH. IN THE EVENT PARENT IS SUCCESSFUL IN NEGOTIATING THE
PROPOSED MERGER, OFFEROR RESERVES THE RIGHT TO AMEND THE OFFER (INCLUDING THE
NUMBER OF SHARES TO BE PURCHASED AND THE PROPOSED OFFER PRICE) OR, IF THE
PROPOSED MERGER DOES NOT CONTEMPLATE A TENDER OFFER, TO TERMINATE THE OFFER
WITHOUT PURCHASING ANY SHARES THEREUNDER.
------------------------
The Dealer Managers for the Offer are:
LAZARD FRERES & CO. LLC GOLDMAN, SACHS & CO.
- ------------
AUGUST 10, 1998
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(cover continued from previous page)
IMPORTANT
Any shareholder desiring to tender Shares (and, if applicable, Rights)
should either (1) complete and sign the appropriate Letter of Transmittal (or a
facsimile thereof) in accordance with the instructions in the Letter of
Transmittal, including any required signature guarantees, and mail or deliver
the Letter of Transmittal (or a facsimile thereof) with the certificates for the
tendered Shares and, if applicable, Rights and all other required documents to
the Depositary (as hereinafter defined) or tender Shares and, if applicable,
Rights pursuant to the procedures for book-entry transfer set forth in Section
3, or (2) request the shareholder's broker, dealer, commercial bank, trust
company or other nominee to effect the transaction for the shareholder.
Shareholders having Shares and, if applicable, Rights registered in the name of
a broker, dealer, commercial bank, trust company or other nominee must contact
the broker, dealer, commercial bank, trust company or other nominee if they
desire to tender Shares and, if applicable, Rights so registered. Unless and
until Offeror declares that the Rights Condition is satisfied, shareholders will
be required to tender one Right for each Share tendered in order to effect a
valid tender of a Share.
Any shareholder who desires to tender Shares and, if applicable, Rights and
whose certificates representing Shares are not immediately available, or who
cannot comply with the procedures for book-entry transfer described in Section 3
on a timely basis, must tender Shares and, if applicable, Rights by following
the procedures for guaranteed delivery set forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective addresses and telephone numbers
set forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery
and other related materials may also be obtained from the Information Agent, the
Dealer Managers or from brokers, dealers, commercial banks or trust companies.
<PAGE>
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TABLE OF CONTENTS
<TABLE>
<S> <C>
INTRODUCTION................................................................................................. 1
Certain Conditions to this Offer................................................................... 2
THE TENDER OFFER............................................................................................. 5
1. Terms of the Offer..................................................................................... 5
2. Acceptance for Payment and Payment for Shares and Rights............................................... 6
3. Procedure for Tendering Shares......................................................................... 7
Valid Tenders...................................................................................... 7
Book-Entry Transfer................................................................................ 8
Signature Guarantees............................................................................... 8
Guaranteed Delivery................................................................................ 8
Distribution of Rights............................................................................. 9
Determination of Validity.......................................................................... 9
Appointment........................................................................................ 9
4. Withdrawal Rights...................................................................................... 10
5. Certain Federal Income Tax Consequences................................................................ 11
6. Price Range of Common Stock; Dividends................................................................. 11
7. Effect of the Offer on the Market for Common Stock and Registration under the
Exchange Act.......................................................................................... 12
Stock Quotations................................................................................... 12
Exchange Act Registration.......................................................................... 13
Margin Regulations................................................................................. 13
8. Certain Information Concerning the Company............................................................. 13
Restructuring Plans................................................................................ 15
Rights Plan........................................................................................ 16
Available Information.............................................................................. 19
9. Certain Information Concerning Offeror and Parent...................................................... 19
10. Source and Amount of Funds............................................................................. 22
11. Background of the Offer; Past Contacts with the Company................................................ 22
12. Purpose of the Offer and the Proposed Merger; Plans for the Company; Certain
Considerations........................................................................................ 25
Purpose............................................................................................ 25
Plans for the Company.............................................................................. 27
Dissenters' Rights................................................................................. 27
13. Dividends and Distributions............................................................................ 28
14. Certain Conditions of the Offer........................................................................ 28
15. Certain Legal Matters; Required Regulatory Approvals................................................... 32
Antitrust Compliance............................................................................... 32
Foreign Antitrust Compliance....................................................................... 33
Other Foreign Laws................................................................................. 34
State Takeover Laws................................................................................ 34
Certain Litigation................................................................................. 37
16. Fees and Expenses...................................................................................... 38
17. Miscellaneous.......................................................................................... 38
Schedule I................................................................................................. 39
</TABLE>
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To: All Holders of Common Stock of AMP Incorporated.
INTRODUCTION
PMA Acquisition Corporation (the 'Offeror'), a Delaware corporation and a
wholly owned subsidiary of AlliedSignal Inc., a Delaware corporation ('Parent'),
hereby offers to purchase all of the outstanding shares of common stock, without
par value (the 'Shares'), of AMP Incorporated, a Pennsylvania corporation (the
'Company'), including the associated Common Stock Purchase Rights (the
'Rights'), issued pursuant to the Shareholder Rights Plan, dated as of October
25, 1989, between the Company and Chemical Bank (successor to Manufacturers
Hanover Trust) as Rights Agent, as amended (the 'Rights Agreement') at a price
of $44.50 per Share, net to the seller in cash, without interest thereon (the
'Offer Price'), upon the terms and subject to the conditions set forth in this
Offer to Purchase and in the related Letter of Transmittal (which, as either may
be amended or supplemented from time to time, collectively constitute the
'Offer'). Unless the context otherwise requires, all references to Shares
include the associated Rights, and all references to the Rights include the
benefits that may inure to holders of the Rights pursuant to the Rights
Agreement, including the right to receive any payment due upon redemption of the
Rights.
Tendering holders of Shares will not be obligated to pay brokerage fees or
commissions or, except as set forth in the Letter of Transmittal, stock transfer
taxes on the purchase of Shares pursuant to the Offer. Offeror will pay all fees
and expenses of Lazard Freres & Co. LLC ('Lazard') and Goldman, Sachs & Co.
('Goldman Sachs'), which firms are acting as dealer managers (the 'Dealer
Managers'), The Bank of New York, which firm is acting as the depositary (the
'Depositary') and Morrow & Co., Inc., which firm is acting as the information
agent (the 'Information Agent'), incurred in connection with the Offer. See
Section 16.
The purpose of the Offer is to enable Parent to acquire control of, and the
entire equity interest in, the Company. Parent currently intends, as soon as
practicable following consummation of the Offer, to propose and seek to have the
Company consummate a merger or similar business combination with Offeror or
another direct or indirect wholly owned subsidiary of Parent (a 'Proposed
Merger'). The purpose of the Proposed Merger under these circumstances would be
to acquire all Shares not tendered and purchased pursuant to the Offer or
otherwise. Pursuant to the Proposed Merger, each then outstanding Share (other
than Shares owned by Offeror, Parent, or any of their subsidiaries, Shares held
in the treasury of the Company and Shares owned by shareholders who perfect
available appraisal rights under the Pennsylvania Business Corporation Law (the
'PBCL')) would be converted into the right to receive an amount in cash equal to
the price per Share paid pursuant to the Offer.
Although Parent commenced the Offer to acquire all of the Shares for cash,
Parent is seeking to negotiate with the Company, in conjunction with or in
substitution for the Offer, a Proposed Merger in which holders of the Shares
would receive consideration consisting of cash or equity securities of Parent or
a combination of both. In the event Parent is successful in negotiating the
Proposed Merger, Offeror reserves the right to amend the Offer (including the
number of Shares to be purchased and the proposed Offer Price) or, if the
Proposed Merger does not contemplate a tender offer, to terminate the Offer
without purchasing any Shares thereunder.
Under the PBCL and the Company's articles of incorporation, holders of a
majority of the outstanding Shares may act by written consent to amend the
Company's by-laws (the 'Company By-laws') and elect directors. If the Company is
not receptive to the Offer and Proposed Merger, Parent intends to file consent
solicitation materials with the Securities and Exchange Commission (the
'Commission') for use in connection with the solicitation of written consents
from shareholders of the Company (the 'Consent Solicitation') for the following
purposes: (i) to amend Section 2.2 of Article II of the Company By-laws to fix
the number of directors of the Company at twenty-eight; (ii) to amend Section
2.4 of Article II of the Company By-laws to permit the Company's shareholders to
fill vacancies on the Company's Board of Directors (the 'Company Board'); (iii)
to amend Section 1.5.3 of Article II of the Company By-laws to clarify that
nominations of directors for election by written consent of shareholders are not
subject to the advance notification provisions of the Company By-laws; (iv) to
elect Hans W. Becherer, Lawrence A. Bossidy, Ann M. Fudge, Paul X. Kelley, Peter
M. Kreindler, Robert P. Luciano, Robert B. Palmer, Russell E. Palmer, Frederic
M. Poses, Donald J. Redlinger, Ivan G.
1
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Seidenberg, Andrew C. Sigler, John R. Stafford, Thomas P. Stafford, Richard F.
Wallman, Robert C. Winters and Henry T. Yang (the 'Nominees') to serve as
directors of the Company; and (v) to repeal each provision of the Company
By-laws or amendment(s) thereto adopted subsequent to July 22, 1998 and prior to
the effectiveness of the foregoing amendments and the seating of a sufficient
number of Nominees to constitute a majority of the Company Board.
If elected as directors of the Company, the Nominees intend to cause the
Company, subject to the fulfillment of their fiduciary duties as directors of
the Company, to enter into an agreement for a Proposed Merger (a 'Proposed
Merger Agreement') which would provide for cash consideration per Share equal to
the Offer Price. The Nominees also intend to take whatever other actions are
appropriate, subject to fulfillment of their fiduciary duties as directors of
the Company, to facilitate the Offer and Proposed Merger, including approving
the Offer and Proposed Merger under the Business Combination Statute, which
would satisfy the Business Combination Condition.
According to a letter from the Company to its shareholders relating to the
adoption of the Rights Agreement, dated November 8, 1989 and filed as an exhibit
to the Company's quarterly report on Form 10-Q for the quarter ended September
30, 1989, the Rights Agreement provides that:
'At any time until ten business days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not
in part, at a price of $.01 per Right (payable in cash, Common Stock
or other consideration deemed appropriate by the Board of Directors).
Under certain circumstances set forth in the Rights Agreement, the
decision to redeem shall require the concurrence of a majority of the
Continuing Directors. Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the Rights will terminate
and the only right of the holders of Rights will be to receive the
$.01 redemption price.
The term `Continuing Directors' means any member of the Board of
Directors of the Company who was a member of the Board prior to
[October 25, 1989], and any person who is subsequently elected to the
Board if such person is recommended or approved by a majority of the
Continuing Directors, but shall not include an Acquiring Person, or an
affiliate or associate of an Acquiring Person, or any representative
of the foregoing entities.'
Capitalized terms used in the foregoing quotation but not defined
therein are defined in Section 8.
Offeror believes that the Continuing Director provision of the Rights
Agreement (the 'Dead Hand Provision') is unenforceable. Offeror has commenced
litigation against the Company in the United States District Court for the
Eastern District of Pennsylvania seeking declaratory judgment rendering the Dead
Hand Provision of the Rights Agreement invalid. There can be no assurance that
the judgment will be obtained. See Section 15. If the Dead Hand Provision is
enforceable, the Nominees, subject to fulfillment of their fiduciary duties as
directors of the Company, intend to seek the required approval of a majority of
the Continuing Directors to redeem the Rights (or to amend the Rights
Agreement), but there can be no assurance that they will succeed in doing so.
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES OR WRITTEN CONSENTS
FROM THE COMPANY'S SHAREHOLDERS. ANY SOLICITATION OF PROXIES OR WRITTEN CONSENTS
WHICH PARENT OR OFFEROR UNDERTAKES WOULD BE MADE ONLY PURSUANT TO SEPARATE PROXY
OR CONSENT SOLICITATION MATERIALS COMPLYING WITH THE REQUIREMENTS OF SECTION
14(A) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE 'EXCHANGE ACT').
Certain Federal income tax consequences of the sale of Shares pursuant to
the Offer are described in Section 5.
CERTAIN CONDITIONS TO THIS OFFER
Consummation of the Offer is subject to the fulfillment of a number of
conditions, including the following:
THE MINIMUM CONDITION. THE OFFER IS CONDITIONED UPON THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES REPRESENTING AT LEAST A MAJORITY OF ALL OF THE OUTSTANDING SHARES ON A
FULLY DILUTED BASIS (THE 'MINIMUM CONDITION').
2
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According to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998, as of July 27, 1998, there were 218,601,033 Shares issued
and outstanding. According to the Company's Annual Report on Form 10-K for the
year ended December 31, 1997 (the 'Company 1997 Annual Report'), as of December
31, 1997, 5,847,332 Shares were issuable under then outstanding options. Based
on the foregoing and assuming that no options were granted after December 31,
1997, and that no options were exercised or expired from January 1, 1998 through
the date hereof, there would be 224,448,365 Shares outstanding on a fully
diluted basis and thus the Minimum Condition would be satisfied if there were
validly tendered and not withdrawn prior to the expiration of the Offer at least
112,224,183 Shares. However, the actual number of Shares constituting the
Minimum Condition will depend upon the facts as they exist on the date of the
purchase.
THE RIGHTS CONDITION. THE OFFER IS CONDITIONED UPON THE RIGHTS HAVING BEEN
REDEEMED BY THE COMPANY BOARD OR OFFEROR BEING SATISFIED, IN ITS SOLE
DISCRETION, THAT THE RIGHTS HAVE BEEN INVALIDATED OR ARE OTHERWISE INAPPLICABLE
TO THE OFFER AND THE PROPOSED MERGER (THE 'RIGHTS CONDITION'). A SUMMARY OF THE
RIGHTS PLAN IS PROVIDED IN SECTION 8 AND SHOULD BE REVIEWED BY SHAREHOLDERS
BEFORE MAKING A DECISION WITH RESPECT TO THE OFFER.
Offeror is hereby requesting that the Company Board redeem the Rights or
amend the Rights Agreement to make the Rights inapplicable to the Offer and the
Proposed Merger. However, there can be no assurance that the Company Board will
do so. Offeror has commenced litigation against the Company in the United States
District Court for the Eastern District of Pennsylvania seeking an order
compelling the Company Board to redeem the Rights or amend the Rights Agreement
to make the Rights inapplicable to the Offer and the Proposed Merger.
UNLESS THE RIGHTS CONDITION IS SATISFIED, SHAREHOLDERS WILL BE REQUIRED TO
TENDER ONE RIGHT FOR EACH SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF
SHARES IN ACCORDANCE WITH THE PROCEDURES FOR TENDERING SHARES SET FORTH IN
SECTION 3. UNLESS THE DISTRIBUTION DATE (AS DEFINED IN SECTION 8) OCCURS, A
TENDER OF SHARES WILL ALSO CONSTITUTE A TENDER OF RIGHTS.
THE BUSINESS COMBINATION CONDITION. THE OFFER IS CONDITIONED UPON THE
ACQUISITION OF SHARES PURSUANT TO THE OFFER HAVING BEEN APPROVED PURSUANT TO THE
BUSINESS COMBINATION STATUTE OR OFFEROR BEING SATISFIED, IN ITS SOLE DISCRETION,
THAT THE BUSINESS COMBINATION STATUTE IS INVALID OR OTHERWISE INAPPLICABLE TO
THE OFFER AND THE PROPOSED MERGER (THE 'BUSINESS COMBINATION CONDITION').
The Proposed Merger is subject to the provisions of the PBCL, including the
Business Combination Statute. In general, the Business Combination Statute
prohibits a Pennsylvania corporation from engaging in a 'Business Combination'
(defined to include a variety of transactions, including mergers) with an
'Interested Shareholder' (defined generally as a person owning shares entitled
to cast at least 20% of the voting power of a corporation) for a period of five
years following the date the person became an Interested Shareholder, unless,
among other exceptions described in Section 15: (i) before the person became an
Interested Shareholder, the Board of Directors of the corporation approved
either the Business Combination or the transaction in which the Interested
Shareholder became an Interested Shareholder, or (ii) the Business Combination
is approved by a majority of the corporation's voting shares, other than the
shares held by the Interested Shareholder, no earlier than three months after
the Interested Shareholder became, and provided that at the time of the vote the
Interested Shareholder is, the beneficial owner of shares entitled to cast at
least 80% of votes of the corporation, and the Business Combination satisfies
certain fair price criteria. See Section 15.
Offeror is hereby requesting that the Company Board adopt a resolution
approving the Offer and the Proposed Merger for purposes of the Business
Combination Statute. However, there can be no assurance that the Company Board
will do so. Offeror has commenced litigation against the Company in the United
States District Court for the Eastern District of Pennsylvania seeking an order
compelling the Company Board to approve the Offer and Proposed Merger for
purposes of the Business Combination Statute.
Pursuant to the Consent Solicitation, Offeror intends to seek to increase
the number of seats on the Company Board from eleven to twenty-eight and fill
the newly created vacancies with its Nominees, who intend to approve the
Proposed Merger pursuant to the Business Combination Statute, subject to the
fulfillment of their fiduciary duties as directors of the Company. Approval of
the Proposed Merger
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pursuant to the Business Combination Statute would satisfy the Business
Combination Condition. See Section 15.
THE CONTROL SHARE CONDITION. THE OFFER IS CONDITIONED UPON OFFEROR HAVING
BEEN ACCORDED THE RIGHT TO VOTE THE SHARES ACQUIRED BY IT PURSUANT TO THE OFFER
UNDER CHAPTER 25, SUBCHAPTER G (THE 'CONTROL SHARE ACQUISITION STATUTE') OF THE
PBCL (THE 'CONTROL SHARE CONDITION').
In general, the Control Share Acquisition Statute relates to the
acquisition by any person of voting power over voting shares of a so-called
'registered corporation' (which term includes the Company) that would entitle
that person, after the acquisition of voting shares, to vote for the first time
at least 20%, 33 1/3% or 50% of the voting shares entitled to vote in an
election for directors of the corporation. Shares subject to a control-share
acquisition are 'control shares' and the person acquiring the control shares is
an 'acquiring person.'
The language of the Control Share Acquisition Statute provides that an
acquiring person may not vote control shares unless, by separate vote, a
majority of both (i) all voting shares and (ii) 'disinterested shares' permit
the acquiring person to vote its control shares. For purposes of the Control
Share Acquisition Statute, 'disinterested shares' are voting shares held by
persons other than an acquiring person or executive officer, director or
employee stock plan of a target from 5 days prior to the acquiring person's
first public announcement of its intent to effect a control share acquisition
through the record date of the annual or special shareholders meeting at which
the shareholders of the target corporation will consider whether to grant the
acquiring person voting power over its control shares. The Control Share
Acquisition Statute does not permit a corporation to opt out of its provisions
by an amendment to its Articles of Incorporation or Bylaws. Unless Offeror has
been accorded the right to vote the Shares acquired by it pursuant to the Offer,
the Shares acquired pursuant to the Offer will not have voting rights and the
Company may redeem the Shares at a price that could result in a loss to Offeror.
If necessary, Offeror intends to comply with the procedures set forth in the
Control Share Acquisition Statute to compel the Company Board to call a special
shareholders meeting for purposes of approving voting rights for its Shares
acquired pursuant to the Offer. For a description of these procedures, see
Section 15.
HSR CONDITION. CONSUMMATION OF THE OFFER IS CONDITIONED UPON ANY APPLICABLE
WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976
(THE 'HART-SCOTT-RODINO ACT') HAVING EXPIRED OR BEEN TERMINATED PRIOR TO THE
EXPIRATION OF THE OFFER (THE 'HSR CONDITION').
Offeror will file with the Federal Trade Commission (the 'FTC') and the
Antitrust Division of the United States Department of Justice (the 'Antitrust
Division') a Pre-merger Notification and Report Form in connection with its
purchase of Shares pursuant to the Offer and the Proposed Merger. The purchase
of Shares pursuant to the Offer and the Proposed Merger cannot be consummated
until any applicable waiting period has expired or been terminated by the FTC or
the Antitrust Division. See Section 15.
CERTAIN OTHER CONDITIONS TO THE CONSUMMATION OF THE OFFER ARE DESCRIBED IN
SECTION 14.
THE OFFER IS NOT CONDITIONED ON OFFEROR OBTAINING FINANCING. SEE SECTION
10.
OFFEROR RESERVES THE RIGHT (SUBJECT TO THE APPLICABLE RULES AND REGULATIONS
OF THE COMMISSION) TO AMEND OR WAIVE THE MINIMUM CONDITION, THE RIGHTS
CONDITION, THE BUSINESS COMBINATION CONDITION, THE CONTROL SHARE CONDITION, THE
HSR CONDITION AND ANY OTHER TERMS AND CONDITIONS OF THE OFFER. SEE SECTIONS 1
AND 14.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
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THE TENDER OFFER
1. TERMS OF THE OFFER. Upon the terms and subject to the conditions of the
Offer (including, if the Offer is extended or amended, the terms and conditions
of any extension or amendment), Offeror will accept for payment and thereby
purchase all Shares (and, if applicable, Rights) validly tendered and not
theretofore withdrawn in accordance with the procedures set forth in Section 4
prior to the Expiration Date. The term 'Expiration Date' means 12:00 Midnight,
New York City time, on September 11, 1998, unless Offeror shall have extended
the period of time for which the Offer is open, in which event the term
'Expiration Date' will mean the latest time and date at which the Offer, as so
extended by Offeror, will expire.
THE OFFER IS CONDITIONED UPON SATISFACTION OF THE MINIMUM CONDITION, THE
RIGHTS CONDITION, THE BUSINESS COMBINATION CONDITION, THE CONTROL SHARE
CONDITION, THE HSR CONDITION AND ANY OTHER TERMS AND CONDITIONS SET FORTH IN
SECTION 14. THE OFFER IS NOT CONDITIONED ON OFFEROR OBTAINING FINANCING (SEE
SECTION 10).
Offeror reserves the right (but will not be obligated), in accordance with
applicable rules and regulations of the Commission, to amend or waive the
Minimum Condition or any other condition of the Offer. If the Minimum Condition
or any of the other conditions set forth in Section 14 have not been satisfied
by 12:00 Midnight, New York City time, on September 11, 1998 (or any other time
then set as the Expiration Date), Offeror may elect to: (i) extend the Offer
and, subject to applicable withdrawal rights, retain all tendered Shares until
the expiration of the Offer, as extended; (ii) subject to complying with
applicable rules and regulations of the Commission, waive all of the unsatisfied
conditions and accept for payment and pay for all Shares so tendered prior to
the Expiration Date and not withdrawn; or (iii) terminate the Offer and not
accept for payment or pay for any Shares and return all tendered Shares to
tendering shareholders.
If Offeror decides, in its sole discretion, to increase the consideration
offered in the Offer to holders of Shares and if, at the time that notice of the
increase is first published, sent or given to holders of Shares in the manner
specified below, the Offer is scheduled to expire at any time earlier than the
expiration of a period ending on the tenth business day from, and including, the
date that this notice is first so published, sent or given, then the Offer will
be extended until the expiration of 10 business days from the date the notice of
the increase is first published, sent or given to holders of Shares. For
purposes of the Offer, a 'business day' means any day other than a Saturday,
Sunday or a federal holiday, and consists of the time period from 12:01 a.m.
through 12:00 Midnight, New York City time. IF, PRIOR TO THE EXPIRATION DATE,
OFFEROR INCREASES THE CONSIDERATION BEING PAID FOR SHARES ACCEPTED FOR PAYMENT
PURSUANT TO THE OFFER, THIS INCREASED CONSIDERATION WILL BE PAID TO ALL
SHAREHOLDERS WHOSE SHARES ARE PURCHASED PURSUANT TO THE OFFER WHETHER OR NOT THE
SHARES WERE TENDERED PRIOR TO THE INCREASE IN CONSIDERATION.
Offeror expressly reserves the right (but will not be obligated), in its
sole discretion, at any time and from time to time, to extend the period during
which the Offer is open for any reason by giving oral or written notice of the
extension to the Depositary and by making a public announcement of the
extension. There can be no assurance that Offeror will exercise its right to
extend the Offer. During any extension, all Shares previously tendered and not
withdrawn will remain subject to the Offer and subject to the right of a
tendering shareholder to withdraw the Shares.
Subject to the applicable rules and regulations of the Commission, Offeror
also expressly reserves the right, at any time and from time to time, in its
sole discretion, and regardless of whether or not any of the events or facts set
forth in Section 4 shall have occurred, (i) to delay acceptance of, or payment
for, any Shares regardless of whether the Shares had theretofore been accepted
for payment, or to terminate the Offer and not to accept for payment or pay for
any Shares not theretofore accepted for payment or paid for, by giving oral or
written notice of the delay or termination to the Depositary and (ii) at any
time or from time to time, to amend the Offer in any respect by giving oral or
written notice to the Depositary. Offeror's right to delay payment for any
Shares or not to pay for any Shares theretofore accepted for payment is subject
to the applicable rules and regulations of the Commission, including Rule
14e-l(c) under the Securities Exchange Act of 1934, as amended (the 'Exchange
Act'), relating to Offeror's obligation to pay the consideration offered or
return tendered Shares promptly after the termination or withdrawal of the
Offer.
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Any extension of the period during which the Offer is open, delay in
acceptance for payment or payment, termination or amendment of the Offer will be
followed as promptly as practicable by a public announcement. This announcement
in the case of an extension is to be issued not later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date, in accordance with the public announcement requirements of Rules 14d-4(c)
and 14e-l(d) under the Exchange Act. Without limiting the obligation of Offeror
under this rule or the manner in which Offeror may choose to make any public
announcement, Offeror currently intends to make announcements by issuing a press
release to the Dow Jones News Service and making any appropriate filing with the
Commission.
If Offeror makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer (including a waiver of the Minimum Condition), Offeror will disseminate
additional tender offer materials and extend the Offer if and to the extent
required by Rules 14d-4(c), 14d-6(d) and 14(e)-l under the Exchange Act or
otherwise. The minimum period during which a tender offer must remain open
following material changes in the terms of the offer or the information
concerning the offer, other than a change in price or a change in percentage of
securities sought, will depend upon the facts and circumstances, including the
relative materiality of the terms or information changes. With respect to a
change in price or a change in the percentage of securities sought, a minimum of
10 business days is required to allow for adequate dissemination to
shareholders.
As of the date of this Offer to Purchase, the Rights are evidenced by
certificates for Shares and do not trade separately. Accordingly, by tendering
certificates for Shares, a shareholder is automatically tendering a similar
number of associated Rights. If, however, pursuant to the Rights Agreement or
for any other reason, the Rights detach and separate certificates for Rights are
issued, shareholders will be required to tender one Right for each Share
tendered in order to effect a valid tender of a Share.
A request is being made to the Company pursuant to Rule 14d-5 of the
Exchange Act and under Pennsylvania law for the use of the Company's shareholder
lists and security position listings for the purpose of disseminating the Offer
to shareholders. Upon compliance by the Company with this request, this Offer to
Purchase, the Letter of Transmittal and all other relevant materials will be
mailed to record holders of Shares and will be furnished to brokers, dealers,
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on shareholders lists, or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares following receipt of these lists or
listings from the Company or by the Company if it so elects.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES AND RIGHTS. Upon the terms
and subject to the conditions of the Offer (including, if the Offer is extended
or amended, the terms and conditions of the Offer as so extended or amended),
Offeror will accept for payment and will pay for all Shares (and, if applicable,
Rights) validly tendered prior to the Expiration Date and not theretofore
withdrawn in accordance with Section 4 promptly after the later to occur of (a)
the Expiration Date and (b) subject to compliance with Rule 14e-1(c) under the
Exchange Act, the satisfaction or waiver of the conditions set forth in Section
14. Subject to compliance with Rule l4e-1(c) under the Exchange Act, Offeror
expressly reserves the right to delay payment for Shares in order to comply in
whole or in part with any applicable law. See Sections 1 and 15.
Payment for Shares accepted for payment pursuant to the Offer will be made
only after timely receipt by the Depositary of (i) certificates for the Shares
or timely confirmation (a 'Book-Entry Confirmation') of a book-entry transfer of
the Shares into the Depositary's account at The Depository Trust Company (the
'Book-Entry Transfer Facility'), pursuant to the procedures set forth in Section
3, (ii) a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile) with all required signature guarantees or an Agent's
Message (as hereinafter defined) in connection with a book-entry transfer of
Shares and (iii) any other documents required by the Letter of Transmittal.
The term 'Agent's Message' means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility who is tendering the Shares that the participant has received
and agrees to
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be bound by the terms of the related Letter of Transmittal and that Offeror may
enforce the agreement against the participant.
For purposes of the Offer, Offeror will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn, if
and when Offeror gives oral or written notice to the Depositary of Offeror's
acceptance of the Shares for payment pursuant to the Offer. In all cases, upon
the terms and subject to the conditions of the Offer, payment for Shares
purchased pursuant to the Offer will be made by deposit of the purchase price
with the Depositary, which will act as agent for tendering shareholders for the
purpose of receiving payment from Offeror and transmitting the payment to
validly tendering shareholders. If, for any reason whatsoever, acceptance for
payment of any Shares tendered pursuant to the Offer is delayed, or Offeror is
unable to accept for payment Shares tendered pursuant to the Offer, then,
without prejudice to Offeror's rights under Section 1, the Depositary may,
nevertheless, on behalf of Offeror, retain tendered Shares, and the Shares may
not be withdrawn, except to the extent that the tendering shareholders are
entitled to withdrawal rights as described in Section 4 below and as otherwise
required by Rule 14e-l(c) under the Exchange Act. UNDER NO CIRCUMSTANCES WILL
INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID BY OFFEROR, REGARDLESS OF ANY
EXTENSION OF THE OFFER OR ANY DELAY IN MAKING PAYMENT.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if certificates are submitted for
more Shares than tendered, certificates for unpurchased or untendered Shares
will be returned, without expense to the tendering shareholder (or, in the case
of Shares delivered by book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility, these Shares will be credited to an account
maintained within the Book-Entry Transfer Facility), as promptly as practicable
following the expiration, termination or withdrawal of the Offer.
If, prior to the Expiration Date, Offeror increases the consideration to be
paid per Share pursuant to the Offer, Offeror will pay the increased
consideration for all the Shares purchased pursuant to the Offer, whether or not
the Shares were tendered prior to the increase in consideration.
Offeror reserves the right to transfer or assign, in whole at any time, or
in part from time to time, to Parent or any one or more of Parent's direct or
indirect wholly owned subsidiaries, the right to purchase all or any portion of
the Shares tendered pursuant to the Offer, provided that any transfer or
assignment will not relieve Offeror of its obligations under the Offer and will
in no way prejudice the rights of tendering shareholders to receive payment for
Shares validly tendered and accepted for payment pursuant to the Offer.
3. PROCEDURE FOR TENDERING SHARES.
VALID TENDERS
For Shares (or, if applicable, Rights) to be validly tendered pursuant to
the Offer, a properly completed and duly executed Letter of Transmittal relating
to the Shares (or a manually signed facsimile thereof), with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message, and any other required documents, must be received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase on or
prior to the Expiration Date, or the tendering shareholder must comply with the
guaranteed delivery procedures set forth below. In addition, either (i)
certificates representing those Shares must be received by the Depositary or the
Shares must be tendered pursuant to the procedures for book-entry set forth
below and a Book-Entry Confirmation must be received by the Depositary, in each
case prior to the Expiration Date or (ii) the guaranteed delivery procedures set
forth below must be complied with. No alternative, conditional or contingent
tenders will be accepted.
THE METHOD OF DELIVERY OF SHARES, THE RELATED LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH A BOOK-ENTRY TRANSFER
FACILITY, IS AT THE SOLE OPTION AND RISK OF THE TENDERING SHAREHOLDER, AND THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED; IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
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BOOK-ENTRY TRANSFER
The Depositary will make a request to establish an account with respect to
the Shares (or, if applicable, Rights) at each Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in a Book-Entry
Transfer Facility's system may make book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer Shares into the Depositary's account at
a Book-Entry Transfer Facility in accordance with the Book-Entry Transfer
Facility's procedures for transfers. Although delivery of Shares may be effected
through book-entry transfer at a Book-Entry Transfer Facility prior to the
Expiration Date, (i) an appropriate Letter of Transmittal (or a manually signed
facsimile), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message in connection with a book-entry transfer, and
any other required documents, must, in any case, be transmitted to and received
by the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase or (ii) the guaranteed delivery procedures described below
must be complied with. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY
IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
SIGNATURE GUARANTEES
No signature guarantee is required on the Letter of Transmittal (a) if the
Letter of Transmittal is signed by the registered holder(s) of Shares (which
includes any participant in any of the Book-Entry Transfer Facilities' systems
whose name appears on a security position listing as the owner of the Shares)
and Rights tendered herewith, unless such registered holder(s) has completed
either the box entitled 'Special Payment Instructions' or the box entitled
'Special Delivery Instructions' on the Letter of Transmittal or (b) if such
Shares and Rights are tendered for the account of a financial institution
(including most commercial banks, savings and loan associations and brokerage
houses) that is a participant in the Security Transfer Agents Medallion Program,
the New York Stock Exchange Medallion Signature Guarantee Program or the Stock
Exchange Medallion Program (an 'Eligible Institution'). In all other cases, all
signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 5 of the Letter of Transmittal.
If the certificates evidencing Shares are registered in the name of a
person or persons other than the signer of the Letter of Transmittal, or if
payment is to be made, or delivered to, or certificates for unpurchased Shares
are to be issued or returned to, a person other than the registered holder or
holders, then the tendered certificates must be endorsed or accompanied by duly
executed stock powers, in either case signed exactly as the name or names of the
registered holder or holders appear on the certificates, with the signatures on
the certificates or stock powers guaranteed by an Eligible Institution as
provided in the Letter of Transmittal. See Instructions 1 and 5 of the related
Letter of Transmittal.
GUARANTEED DELIVERY
If a shareholder desires to tender Shares (or, if applicable, Rights)
pursuant to the Offer and the shareholder's certificates for Shares are not
immediately available or time will not permit all required documents to reach
the Depositary on or prior to the Expiration Date or the procedures for
book-entry transfer cannot be completed on a timely basis, these Shares may
nevertheless be tendered if all of the following guaranteed delivery procedures
are duly complied with:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Offeror, is received by the
Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for all tendered Shares and, if applicable,
Rights, in proper form for transfer (or a Book-Entry Confirmation),
together with a properly completed and duly executed Letter of Transmittal
relating to the Shares (or a manually signed facsimile thereof), and any
required signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message, and any other documents required by the Letter of
Transmittal are received (a) in the case of Shares, by the Depositary
within three New York Stock Exchange ('NYSE') trading days after the date
of the
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Notice of Guaranteed Delivery or (b) in the case of Rights, a period ending
on the later of (1) three NYSE trading days after the execution of the
Notice of Guaranteed Delivery or (2) three business days after the date
certificates for Rights are distributed to Shareholders by the Company or
the Rights Agent. The Notice of Guaranteed Delivery may be delivered by
hand or transmitted by telegram, telex, facsimile transmission or mail to
the Depositary and must include a guarantee by an Eligible Institution in
the form set forth in the Notice of Guaranteed Delivery.
Notwithstanding any other provision of this Offer, payment for Shares
accepted for payment pursuant to the Offer will in all cases be made only after
timely receipt by the Depositary of (i) certificates for the Shares or a Book
Entry Confirmation, (ii) a properly completed and duly executed Letter of
Transmittal relating to the Shares (or a manually signed facsimile thereof),
with all required signature guarantees, or, in the case of a book-entry
transfer, an Agent's Message and (iii) any other documents required by the
Letter of Transmittal. Accordingly, tendering shareholders may be paid at
different times depending upon when certificates for Shares or Book-Entry
Confirmations are actually received by the Depositary. UNDER NO CIRCUMSTANCES
WILL INTEREST ON THE PURCHASE PRICE OF THE SHARES BE PAID BY OFFEROR, REGARDLESS
OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING PAYMENT.
DISTRIBUTION OF RIGHTS
Holders of Shares will be required to tender one Right for each Share
tendered to effect a valid tender of a Share. Unless and until the Distribution
Date (as defined in Section 8 below) occurs, the Rights are represented by and
transferred with the Shares. Accordingly, if the Distribution Date does not
occur prior to the Expiration Date of the Offer, a tender of Shares will
constitute a tender of the associated Rights. If a Distribution Date has
occurred, certificates representing a number of Rights equal to the number of
Shares being tendered must be delivered to the Depositary in order for the
Shares to be validly tendered in accordance with the procedures described in
this Section 3. If a Distribution Date has occurred, a tender of Shares without
Rights constitutes an agreement by the tendering shareholder to deliver
certificates representing a number of Rights equal to the number of Shares
tendered pursuant to the Offer to the Depositary within three NYSE trading days
after the date the certificates are distributed. Offeror reserves the right to
require that it receive these certificates prior to accepting Shares for
payment. Payment for Shares tendered and purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of these certificates, if the
certificates have been distributed to holders of Shares. Offeror will not pay
any additional consideration for the Rights tendered pursuant to the Offer.
DETERMINATION OF VALIDITY
All questions as to the form of documents and the validity, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
(or, if applicable, Rights) will be determined by Offeror, in its sole
discretion, and its determination will be final and binding on all parties.
Offeror reserves the absolute right to reject any or all tenders of any Shares
that are determined by it not to be in proper form or the acceptance of or
payment for which may, in the opinion of Offeror, be unlawful. Offeror also
reserves the absolute right to waive any of the conditions of the Offer or any
defect or irregularities in the tender of any particular Shares, whether or not
similar defects or irregularities are waived in the case of other Shares.
Offeror's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the Instructions) will be final and
binding on all parties. No tender of Shares will be deemed to have been validly
made until all defects and irregularities have been cured or waived by Offeror.
None of Offeror or any of its affiliates or assignees, the Dealer Managers, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in tenders or incur any
liability for failure to give any notification.
APPOINTMENT
By executing the appropriate Letter of Transmittal as set forth above, a
tendering shareholder irrevocably appoints designees of Offeror as the
shareholder's attorneys-in-fact and proxies, each with
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full power of substitution, in the manner set forth in the Letter of
Transmittal, to the full extent of the shareholder's right with respect to the
Shares (or, if applicable, Rights) tendered by that shareholder and accepted for
payment by Offeror (and any and all other Shares or other securities or rights
issued or issuable in respect of these Shares on or after August 10, 1998). All
powers of attorney and proxies will be considered irrevocable and coupled with
an interest in the tendered Shares. This appointment is effective upon the
acceptance for payment of Shares by Offeror in accordance with the terms of the
Offer. Upon acceptance for payment, all prior proxies, other than any consents
in favor of proposals set forth in the Consent Solicitation, given by the
shareholder with respect to these Shares or other securities or rights will,
without further action, be revoked and no subsequent proxies may be given or
written consents executed (and, if given or executed, will not be deemed
effective). The designees of Offeror will, with respect to the Shares and other
securities or rights, be empowered to exercise all voting and other rights of
the shareholder as they, in their sole judgment, deem proper in respect of any
annual or special meeting of the Company's shareholders, or any adjournment or
postponement thereof, or by consent in lieu of any meeting or otherwise. Offeror
reserves the right to require that, in order for Shares to be deemed validly
tendered, immediately upon Offeror's payment for the Shares, Offeror or its
designee must be able to exercise full voting and other rights with respect to
the Shares and the other securities or rights issued or issuable in respect of
the Shares, including voting of Common Stock at any shareholders meeting
(whether annual or special or whether or not adjourned) in respect of the
Shares.
4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 4,
tenders of Shares (and, if applicable, Rights) made pursuant to the Offer are
irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date and, unless theretofore accepted for payment
pursuant to the Offer, may also be withdrawn at any time after September 11,
1998. Shares (and, if applicable, Rights) may not be withdrawn unless the
associated Rights are also withdrawn. A withdrawal of Shares (and, if
applicable, Rights) will also constitute a withdrawal of the associated Rights.
If purchase of or payment for Shares (and, if applicable, Rights) is delayed for
any reason or if Offeror is unable to purchase or pay for Shares for any reason,
then, without prejudice to Offeror's rights under the Offer, tendered Shares may
be retained by the Depositary on behalf of Offeror and may not be withdrawn
except to the extent that tendering shareholders are entitled to withdrawal
rights as set forth in this Section 4, subject to Rule 14e-1(c) under the
Exchange Act, which provides that no person who makes a tender offer shall fail
to pay the consideration offered or fail to return the securities deposited by
or on behalf of security holders promptly after the termination or withdrawal of
the Offer.
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase. Any notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn and
the name in which the certificates representing Shares are registered, if
different from that of the person who tendered the Shares. If certificates for
Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of these certificates, the
serial numbers shown on these certificates must be submitted to the Depositary
and, unless the Shares have been tendered by an Eligible Institution, the
signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer set forth in Section 3, any notice of withdrawal must also
specify the name and number of the account at the applicable Book-Entry Transfer
Facility to be credited with the withdrawn Shares, in which case a notice of
withdrawal will be effective if delivered to the Depositary by any method of
delivery described in the first sentence of this paragraph. Withdrawals of
Shares may not be rescinded. Any Shares properly withdrawn will be deemed not
validly tendered for purposes of the Offer, but may be retendered at any
subsequent time prior to the Expiration Date by following any of the procedures
described in Section 3.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Offeror, in its sole discretion, and
its determination will be final and binding on all parties. None of Offeror, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any notification.
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5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following is a summary of
the principal federal income tax consequences of the Offer to holders whose
Shares (and, if applicable, Rights) are purchased pursuant to the Offer. The
discussion applies only to holders of Shares who hold Shares as capital assets,
and may not apply to Shares received upon conversion of securities or exercise
of warrants or other rights to acquire Shares or pursuant to the exercise of
stock options or otherwise as compensation, or to holders of Shares who are in
special tax situations (such as insurance companies, tax-exempt organizations,
non-U.S. persons, dealers in securities or commodities, or persons who hold
Shares as a position in a 'straddle' or as part of a 'hedging' or 'conversion'
transaction for United States federal income tax purposes).
THE FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW ARE INCLUDED FOR
GENERAL INFORMATIONAL PURPOSES ONLY AND ARE BASED UPON CURRENT LAW. BECAUSE
INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH HOLDER OF SHARES SHOULD CONSULT THAT
HOLDER'S OWN TAX ADVISOR TO DETERMINE THE APPLICABILITY OF THE RULES DISCUSSED
BELOW TO THAT SHAREHOLDER AND THE PARTICULAR TAX EFFECTS OF THE OFFER, INCLUDING
THE APPLICATION AND EFFECT OF STATE, LOCAL AND OTHER INCOME TAX LAWS.
The receipt of cash for Shares pursuant to the Offer will be a taxable
transaction for federal income tax purposes (and also may be a taxable
transaction under applicable state, local and other income tax laws). In
general, for federal income tax purposes, a holder of Shares will recognize gain
or loss equal to the difference between his adjusted tax basis in the Shares
sold pursuant to the Offer and the amount of cash received. Gain or loss
generally must be determined separately for each block of Shares (i.e., Shares
acquired at the same cost in a single transaction) sold pursuant to the Offer.
This gain or loss will be capital gain or loss and will be long-term gain or
loss if, on the date of sale, the Shares were held for more than one year. In
the case of an individual, net long-term capital gain may be subject to a
reduced rate of tax and net capital losses may be subject to limits on
deductibility.
In order to avoid 'backup withholding' of federal income tax with respect
to payments of cash pursuant to the Offer, each shareholder surrendering Shares
in the Offer must provide the Depositary with the shareholder's correct taxpayer
identification number ('TIN') on a Substitute Form W-9 and certify under penalty
of perjury that this TIN is correct and that the shareholder is not subject to
backup withholding. Certain shareholders (including all corporations and certain
foreign individuals and entities) are exempt recipients not subject to backup
withholding. If a shareholder does not provide its correct TIN or fails to
provide the certifications described above, the Internal Revenue Service may
impose a penalty on the shareholder, and payment of cash to that shareholder
pursuant to the Offer may be subject to backup withholding of 31%. All
shareholders surrendering Shares pursuant to the Offer (physically or
electronically through book-entry transfer) should complete and sign the main
signature form and the Substitute Form W-9 included as part of the Letter of
Transmittal to provide the information and certification necessary to avoid
backup withholding (unless an applicable exemption exists and is proved in a
manner satisfactory to Offeror and the Depositary). Non-corporate foreign
shareholders should complete and sign the main signature form and a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See the Letter of Transmittal.
6. PRICE RANGE OF COMMON STOCK; DIVIDENDS. According to the Company 1997
Annual Report, the Company's common stock is listed on the NYSE and traded on
the New York, Boston, Cincinnati, Chicago, Pacific and Philadelphia Exchanges
under the symbol 'AMP.' The following table sets forth, for the periods
indicated, the high and low sales prices per share for the common stock as
reported on the NYSE:
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<TABLE>
<CAPTION>
HIGH LOW
--- ---
<S> <C> <C>
1998:
Third Quarter (through July 30, 1998).............................................. $34 3/4 $28 9/16
Second Quarter..................................................................... 44 3/16 33 1/2
First Quarter...................................................................... 44 11/16 36 5/8
1997:
Fourth Quarter..................................................................... 54 1/4 39 1/16
Third Quarter...................................................................... 56 11/16 41 3/4
Second Quarter..................................................................... 43 1/8 33 1/8
First Quarter...................................................................... 43 33 7/8
1996:
Fourth Quarter..................................................................... 39 7/8 32 7/8
Third Quarter...................................................................... 41 3/4 36 1/8
Second Quarter..................................................................... 46 1/8 39
First Quarter...................................................................... 44 3/4 36 3/8
</TABLE>
On August 3, 1998, the last full trading day before the first public
announcement of the intention to commence the Offer, the last reported closing
sales price of the Shares on the NYSE was $28 7/8 per Share. SHAREHOLDERS ARE
URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
The Company declares annual dividends which are paid on a quarterly basis.
The annual dividend for 1996 was $1.00 per Share and for 1997 was $1.04 per
Share. On January 28, 1998 and April 4, 1998, the Company Board declared first
and second quarterly dividends, both of $0.27 per Share, which were paid on
March 2, 1998 and June 1, 1998, respectively. On July 22, 1998, the Company
Board declared a regular quarterly dividend of $0.27 per share, payable Tuesday,
September 1, 1998 to shareholders of record at the close of business on Monday,
August 3, 1998. See Section 13.
As of the date of this Offer to Purchase, the Rights are attached to the
Shares and not traded separately. As a result, the sales quotations per Share
set forth above are also the high and low sales quotations per Share and
associated Right during those periods. Upon the occurrence of the Distribution
Date, the Rights will detach and may trade separately from the Shares. See
Section 8. Offeror believes that as a result of the commencement of the Offer,
the Distribution Date may occur as early as August 24, 1998, unless prior to
this date the Company Board redeems the Rights, amends the Rights Agreement to
make the Rights inapplicable to the Offer and Proposed Merger or delays the
Distribution Date. IF THE DISTRIBUTION DATE OCCURS AND THE RIGHTS BEGIN TO TRADE
SEPARATELY FROM THE SHARES, SHAREHOLDERS SHOULD ALSO OBTAIN A CURRENT MARKET
QUOTATION FOR THE RIGHTS.
7. EFFECT OF THE OFFER ON THE MARKET FOR COMMON STOCK AND REGISTRATION
UNDER THE EXCHANGE ACT. The purchase of Shares pursuant to the Offer will reduce
the number of Shares that might otherwise trade publicly and will reduce the
number of holders of Shares, which will likely adversely affect the liquidity
and market value of the remaining Shares held by shareholders other than
Offeror. The extent of the public market, if any, for Shares and the
availability of price quotations in respect thereof following the purchase of
Shares pursuant to the Offer will depend upon the number of holders of Shares
remaining at that time, the interest in maintaining a market in the Shares on
the part of securities firms, the possible termination of registration of the
Shares under the Exchange Act, as described below, and other factors.
STOCK QUOTATIONS
Depending on the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the NYSE's listing requirements. The NYSE would
consider delisting the Shares if the number of record holders of at least 100
Shares should fall below 1,200, the number of publicly held Shares (exclusive of
holdings of officers, directors and their families and other concentrated
holdings of 10% or more (the 'NYSE Excluded Holdings')) should fall below
600,000 or the aggregate market value of publicly held Shares (exclusive of NYSE
Excluded Holdings) should fall below $5,000,000. If, as a result of the purchase
of Shares pursuant to the Offer or otherwise, the Shares no longer meet the
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requirements of the NYSE for continued listing and the listing of the Shares is
discontinued, the market for the Shares could be adversely affected.
If the NYSE were to delist the Shares, it is possible that the Shares would
continue to trade on another securities exchange or in the over-the-counter
market and that price or other quotations would be reported by the exchange or
through the National Association of Securities Dealers Automated Quotations
('NASDAQ') or other sources. The extent of the public market therefor and the
availability of the quotations would depend, however, upon factors such as the
number of shareholders and/or the aggregate market value of the securities
remaining at that time, the interest in maintaining a market in the Shares on
the part of securities firms, the possible termination of registration under the
Exchange Act, as described below, and other factors. Offeror cannot predict
whether the reduction in the number of Shares that might otherwise trade
publicly would have an adverse or beneficial effect on the market price for or
marketability of the Shares or whether it would cause future market prices to be
higher or lower than the Offer Price.
EXCHANGE ACT REGISTRATION
The Shares are currently registered under the Exchange Act. This
registration may be terminated upon application by the Company to the Commission
if the Shares are not listed on a national securities exchange and there are
fewer than 300 record holders of the Shares. The termination of registration of
the Shares under the Exchange Act would substantially reduce the information
required to be furnished by the Company to holders of Shares and to the
Commission and would make certain provisions of the Exchange Act, such as the
short-swing profit recovery provisions of Section 16(b), the requirement of
furnishing a proxy statement in connection with shareholders' meetings pursuant
to Section 14(a) and the requirements of Rule 13e-3 under the Exchange Act with
respect to 'going private' transactions no longer applicable to the Shares. In
addition, 'affiliates' of the Company and persons holding 'restricted
securities' of the Company may be deprived of the ability to dispose of these
securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as
amended (the 'Securities Act').
Based on publicly available information, the Rights are registered under
the Exchange Act, but are attached to the Shares and are not currently
separately transferable. Offeror believes that as a result of the commencement
of the Offer, the Distribution Date may occur as early as August 24, 1998,
unless prior to this date the Company Board redeems the Rights, amends the
Rights Agreement to make the Rights inapplicable to the Offer and Proposed
Merger or delays the Distribution Date. See Section 8. According to the Rights
Agreement, certificates for Rights will be sent to all holders of Rights and the
Rights will become transferable apart from the Shares. If the Distribution Date
occurs and the Rights separate from the Shares, the discussion above with
respect to the effect of the Offer on Exchange Act registration would apply to
the Rights in a similar manner.
If the registration of the Shares is not terminated prior to the Proposed
Merger, then the Shares will be delisted from all stock exchanges and the
registration of the Shares and Rights under the Exchange Act will be terminated
following consummation of the Proposed Merger.
If registration of the Shares under the Exchange Act were terminated, the
Shares would no longer be eligible for listing on the NYSE and for trading on
the New York, Boston, Cincinnati, Chicago, Pacific and Philadelphia Stock
Exchanges.
MARGIN REGULATIONS
Shares of common stock are currently 'margin securities' under the
regulations of the Board of Governors of the Federal Reserve System (the
'Federal Reserve Board'), which has the effect of allowing brokers to extend
credit on the collateral of common stock like the Shares. Depending upon factors
similar to those described above regarding listing and market quotations,
following the Offer, it is possible that the common stock would no longer
constitute 'margin securities' for the purposes of the margin regulations of the
Federal Reserve Board and therefore could no longer be used as collateral for
loans made by brokers.
8. CERTAIN INFORMATION CONCERNING THE COMPANY. Except as otherwise set
forth herein, the information concerning the Company contained in this Offer to
Purchase, including financial
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information, has been taken from or based upon the Company Annual Report and
other publicly available documents and records on file with the Commission and
other public sources. Although none of Parent, Offeror, the Dealer Managers or
Information Agent has any knowledge that would indicate that statements
contained in this Offer based upon these documents are untrue, none of Parent,
Offeror, the Dealer Managers or the Information Agent assumes any responsibility
for the accuracy or completeness of the information concerning the Company,
furnished by the Company, or contained in these documents and records or for any
failure by the Company to disclose events which may have occurred or may affect
the significance or accuracy of any information but which are unknown to
Offeror, Parent, the Dealer Managers or Information Agent.
According to the Company 1997 Annual Report, the Company is a Pennsylvania
corporation with its principal executive offices located at 470 Friendship Road,
Harrisburg, Pennsylvania, 17111. The Company 1997 Annual Report states that:
'The Company designs, manufactures and markets a broad range of
electronic, electrical and electrooptic connection devices and an
expanding number of interconnection systems and connector-intensive
assemblies. The Company's products have potential uses wherever an
electronic, electrical, computer or telecommunications system is
involved, and are becoming increasingly critical to the performance of
these systems as voice, data and video communications converge. The
Company's customers are as diverse as the products themselves, and
include such differing types of accounts as original equipment
manufacturers (OEMs) and their subcontractors, utilities, government
agencies, distributors, value-added resellers, and customers who
install, maintain and repair equipment. The industries covered by
these accounts include Automotive, Power Technology, Personal
Computer, Communications, and Consumer/Industrial. The Company markets
its products worldwide primarily through its own direct sales force,
but also through distributors and value-added resellers to respond to
customer buying preferences. In 1997, 84% of product was sold through
direct channels to market and 16% through distribution. The Company
has established more than 330 facilities located in 53 countries to
serve customers in the current and emerging markets throughout the
world.'
Set forth below is certain summary consolidated financial information with
respect to the Company excerpted or derived from financial information contained
in the Company 1997 Annual Report and the Company's Quarterly Report on Form
10-Q for the second quarter ended June 30, 1998. More comprehensive financial
information is included in reports and other documents filed by the Company with
the Commission, and the following summary is qualified in its entirety by
reference to reports and other documents and all the financial information
(including any related notes) contained therein. Reports and other documents
should be available for inspection and copies should be obtainable in the manner
set forth below under 'Available Information'.
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AMP INCORPORATED
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
--------------------- --------------------------
1998 1997 1997 1996 1995
----------- ------ ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales..................................................... $ 2,748 $2,861 $5,745 $5,468 $5,227
Income from operations........................................ 250 350 767 503 718
Net income before cumulative effect of accounting changes..... 157 209 458 287 427
Cumulative effect of accounting changes, net of income
taxes....................................................... -- 15 15 -- --
Net income.................................................... 157 224 473 287 427
PER SHARE AMOUNTS:
Before cumulative effect of accounting changes
Basic.................................................... $ .72 $ .95 $ 2.08 $ 1.31 $ 1.97
Diluted.................................................. $ .72 $ .95 $ 2.08 $ 1.31 $ 1.96
Cumulative effect of accounting changes
Basic.................................................... -- $ .07 $ .07 -- --
Diluted.................................................. -- $ .07 $ .07 -- --
Net income
Basic.................................................... $ .72 $ 1.02 $ 2.15 $ 1.31 $ 1.97
Diluted.................................................. $ .72 $ 1.02 $ 2.15 $ 1.31 $ 1.96
BALANCE SHEET DATA:
Current assets................................................ $ 2,476 $2,537 $2,650 $2,356 $2,278
Property, plant and equipment, net............................ 1,897 1,989 1,916 2,028 1,938
Total assets.................................................. 4,670 4,814 4,848 4,686 4,505
Current liabilities........................................... 1,306 1,508 1,445 1,445 1,266
Long-term debt................................................ 168 186 160 182 213
Shareholders' equity.......................................... 2,898 2,851 2,952 2,790 2,768
</TABLE>
RESTRUCTURING PLANS
The Company's press release announcing its results of operations for the
quarter ended June 30, 1998 contained the following statements regarding the
Company's restructuring plans:
'AMP Incorporated Chief Executive Officer and President William J.
Hudson said, `We are obviously disappointed with second quarter results.
Despite our successful 'globalization' efforts in recent years, we still
need to better balance our manufacturing capacity in and between
geographical regions to reduce the costs of exporting and
importing -- and we are committed to doing this as quickly as possible
without disrupting customer service. Additionally, our aggressive growth
strategies are focused on responding to customer needs faster, at more
competitive prices, and with guarantees to back up our claims.
Supporting these growth strategies is a program to reduce the costs and
overhead that impedes our responsiveness. We are determined to
strengthen investor confidence by generating the financial results that
will produce significant long-term returns for investors.'
Hudson noted that plans to boost sales will come by simplifying
prices, enhancing distribution sales, and servicing customers through
more direct sales people and other means. To reduce costs, he said, AMP
has implemented mandatory one-week furloughs in the U.S., eliminated
most overtime, accelerated insourcing of manufacturing services, and has
frozen hiring and wage increases.
`Our strategic financial goals' Hudson said, `will be realized
through our current efforts to reduce the global workforce by 3,500
through early retirements, attrition, and layoffs;
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outsource certain support functions; close plants and consolidate
production into integrated facilities; and leverage the economic
advantages of expanding capacity in Asia/Pacific and Europe.'
The cash impact of the charges associated with the actions is
estimated to be $100 to $130 million.'
On July 31, 1998 the Company issued the following press release:
'AMP Incorporated to Phase Out Operations of Selinsgrove; Company
Will Transfer Work to Other AMP Plants
Harrisburg, PA (July 31, 1998) -- AMP Incorporated today announced
the phasing out and transfer of operations at its Automachine Systems
Group plant in Selinsgrove, Pennsylvania.
Transfer locations in the United States include AMP's Fourth Street
and 100 AMP Drive facilities in Harrisburg, PA, Waynesboro, PA and Mount
Sidney, VA. Remaining product lines will be transferred to an AMP
tooling center in Cochin, India and AMP's Strategic Tooling Center in
Monterrey, Mexico.
About 130 jobs will move as a result of the transfer. Most
manufacturing employees will be offered jobs at plants that are gaining
work.
The transfers will result in a conversion to continuous operations
at the Fourth Street and Waynesboro plants. AMP's Mount Sidney facility
is already operating 24-hours a day.
The action, which is planned to take place over the next 19 months,
is part of the company's recently announced reshaping strategy aimed at
making AMP more competitive in the global marketplace. The strategy
allows AMP operations to focus, simplify and grow. This is being done by
a series of divestitures and closedowns, major manufacturing and
overhead cost reductions, and new initiatives in sales.
`From a technical and financial perspective, AMP is taking major
steps to respond more quickly to changes in the global economy,' CEO and
President William J. Hudson said, explaining `in the weeks and months
ahead we can be expected to do all that is needed to make AMP a more
customer-responsive company.'
`To stay competitive, AMP will have to use lower cost tooling
approaches and fully integrate production in the United States,' adding
AMP 'clearly is improving the use of its vast complement of
manufacturing assets.'
RIGHTS PLAN
The following is based upon, and is qualified in its entirety by reference
to, a letter from the Company to its Shareholders relating to the adoption of
the Rights Plan, dated November 8, 1989, filed as an exhibit to the Company's
quarterly report on Form 10-Q for the quarter ended September 30, 1989 and the
Rights Agreement, as amended, filed with the Commission. The Company undertook a
2 for 1 stock split in 1995. As a result, each Right, as and when exercisable,
now entitles the registered holder to purchase from the Company one Share at a
purchase price of $87.50 per share. The aforementioned letter states:
'SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On October 25, 1989, the Board of Directors of AMP Incorporated (the
`Company') declared a dividend distribution of one Right for each
outstanding share of Common Stock, no par value (the `Common Stock'), of
the Company to shareholders of record at the close of business on November
6, 1989. Each Right entitles the registered holder to purchase from the
Company one share of Common Stock at a Purchase Price of $175.00 per share,
subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the `Rights Agreement') between the Company
and Manufacturers Hanover Trust Company, as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from
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the Common Stock and a Distribution Date will occur upon the earlier of
(i) 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 Pennsylvania Business Corporation Law (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 below (such public announcement date being
referred to below as the 'Stock Acquisition Date') and (ii) 10 business
days (or such later date as the Board shall determine) following the
commencement of a tender offer or exchange offer that would result in a
person becoming an Acquiring Person. Until the Distribution Date, (I) the
Rights will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates, (II) new
Common Stock certificates issued after November 6, 1989 will contain a
notation incorporating the Rights Agreement by reference and (III) the
surrender for transfer of any certificates for Common Stock outstanding
will also constitute the transfer of the Rights associated with the Common
Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on November 6, 1999, unless earlier
redeemed by the Company as described below. Shares of Common Stock issuable
upon exercise of the Rights shall represent a proportional beneficial
interest in the shares of common stock of Pamcor, Inc. held in trust
pursuant to an Agreement among AMP Incorporated, Pamcor, Inc. and Bankers
Trust Company dated as of November 1, 1956 and amended as of April 23, 1970
and as of April 23, 1981.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of
the close of business on the Distribution Date and, thereafter, the
separate Rights Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Directors, only shares of Common Stock
issued prior to the Distribution Date will be issued with Rights.
In the event that a person becomes an Acquiring Person except pursuant
to an offer for all outstanding Common Stock which the independent
directors (excluding officers of the Company) determine, after receiving
advice from one or more investment banking firms, to be fair to and
otherwise in the best interests of the Company and its shareholders (a
'Qualifying Offer'), each holder of a Right will thereafter have the right
to receive, upon exercise, Common Stock (or in certain circumstances, cash,
property or other securities of the Company) having a value equal to two
times the exercise price of the Right. However, the Rights will not be
exercisable following the occurrence of any such event until such time as
the Rights are no longer redeemable by the Company as set forth below.
Notwithstanding any of the foregoing, following the occurrence of any such
event, all Rights that are, or (under certain circumstances specified in
the Rights Agreement) were, beneficially owned by any Acquiring Person (or
certain related parties) will be null and void.
For example, at an exercise price of $175.00 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following an
event set forth in the preceding paragraph would entitle its holder to
purchase $350.00 worth of Common Stock (or other consideration, as noted
above) for $175.00. Assuming that the Common Stock had a per share value of
$45.00 at such time, the holder of each valid Right would be entitled to
purchase 7.78 shares of Common Stock for $175.00.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation (other
than a merger which follows a Qualifying Offer and satisfies certain other
requirements), (ii) the company is acquired in a merger or other business
combination transaction in which the Company is the surviving corporation
but all or part of the Common Stock is changed into or exchanged for
securities of the other person or other property, or (iii) 50% or more of
the Company's assets, cashflow or earning power is sold or transferred,
each holder of a Right (except Rights which previously have been voided as
set forth above) shall thereafter have the right to receive, upon exercise,
common stock of the acquiring company having a value equal to two times the
exercise price of the Right. The events set forth in this paragraph and in
the second preceding paragraph are referred to as the `Triggering Events.'
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The Purchase Price payable, and the number of shares of Common Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Stock, (ii) if holders of the Common Stock
are granted certain rights or warrants to subscribe for Common Stock or
convertible securities at less than the current market price of the Common
Stock, or (iii) upon the distribution to holders of the Common Stock of
evidences of indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than those referred
to above).
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of the Common
Stock on the last trading date prior to the date of exercise.
At any time until ten business days following the Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in part, at a
price of $.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors). Under certain
circumstances set forth in the Rights Agreement, the decision to redeem
shall require the concurrence of a majority of the Continuing Directors.
Immediately upon the action of the Board of Directors ordering redemption
of the Rights, the Rights will terminate and the only right of the holders
of Rights will be to receive the $.01 redemption price.
The term 'Continuing Directors' means any member of the Board of
Directors of the Company who was a member of the Board prior to [October
25, 1989], and any person who is subsequently elected to the Board if such
person is recommended or approved by a majority of the Continuing
Directors, but shall not include an Acquiring Person, or an affiliate or an
associate of an Acquiring Person, or any representative of the foregoing
entities.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to shareholders or to the Company, shareholders may,
depending upon the circumstances, recognize taxable income in the event
that the Rights become exercisable for Common Stock (or other
consideration) of the Company or for common stock of the acquiring company
as set forth above.
Any of the provisions of the Rights Agreement may be amended in any
respect by the Board of Directors of the Company prior to the Distribution
Date. After the Distribution Date, the provisions of the Rights Agreement
may be amended by the Board (in certain circumstances, with the occurrence
of the Continuing Directors) in order to cure any ambiguity, to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or to shorten or
lengthen any time period under the Rights Agreement; provided, however,
that no amendment to adjust the time period governing redemption shall be
made at such time as the Rights are not redeemable.'
Offeror has commenced litigation against the Company in the United States
District Court for the Eastern District of Pennsylvania seeking an order
compelling the Company Board to redeem the Rights or to amend the Rights
Agreement to make the Rights inapplicable to the Offer and Proposed Merger and a
declaratory judgment rendering the Dead Hand Provision of the Rights Agreement
invalid. There can be no assurance that this order or judgment will be obtained.
See Section 15. If the Dead Hand Provision is enforceable, the Nominees, subject
to fulfillment of their fiduciary duties as directors of the Company, intend to
seek the required approval of a majority of the Continuing Directors to redeem
the Rights (or to amend the Rights Agreement to make the Rights otherwise
inapplicable to the Offer and Proposed Merger). Redemption of the Rights (or an
amendment of the Rights Agreement to make the Rights otherwise inapplicable to
the Offer and Proposed Merger) would satisfy the Rights Condition.
THE OFFER IS CONDITIONED UPON THE RIGHTS HAVING BEEN REDEEMED BY THE
COMPANY BOARD OR OFFEROR BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE
RIGHTS HAVE BEEN INVALIDATED OR ARE OTHERWISE INAPPLICABLE TO THE OFFER.
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UNLESS THE RIGHTS CONDITION IS SATISFIED, SHAREHOLDERS WILL BE REQUIRED TO
TENDER ONE RIGHT FOR EACH SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF
SHARES IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN SECTION 3. UNLESS THE
DISTRIBUTION DATE OCCURS, A TENDER OF SHARES WILL ALSO CONSTITUTE A TENDER OF
THE RIGHTS.
AVAILABLE INFORMATION
The Company is subject to the information and reporting requirements of the
Exchange Act and is required to file reports and other information with the
Commission relating to its business, financial condition and other matters.
Information, as of particular dates, concerning the Company's directors and
officers, their remuneration, stock options granted to them, the principal
holders of the Company's securities, any material interests of these persons in
transactions with the Company and other matters is required to be disclosed in
proxy statements distributed to the Company's shareholders and filed with the
Commission. These reports, proxy statements and other information should be
available for inspection at the public reference facilities of the Commission
located in Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
also should be available for inspection and copying at prescribed rates at the
following regional offices of the Commission: Seven World Trade Center, New
York, New York 10048; and 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of this material may also be obtained by mail, upon payment of the
Commission's customary fees, from the Commission's principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549. The Commission also maintains an Internet
web site at http://www.sec.gov that contains reports, proxy statements and other
information. Reports, proxy statements and other information concerning the
Company should also be available for inspection at the offices of the NYSE, 20
Broad Street, New York, New York 10005.
9. CERTAIN INFORMATION CONCERNING OFFEROR AND PARENT.
OFFEROR
Offeror is a newly incorporated Delaware corporation organized in
connection with the Offer and has not carried on any activities other than in
connection with the Offer. The principal offices of Offeror are located at 101
Columbia Road, Morristown, NJ 07962. Offeror is a wholly owned subsidiary of
Parent. Until immediately prior to the time that Offeror will purchase Shares
pursuant to the Offer, it is not expected that Offeror will have any significant
assets or liabilities or engage in activities other than those incident to its
formation and capitalization and the transactions contemplated by the Offer.
Because Offeror is newly formed and has minimal assets and capitalization, no
meaningful financial information regarding Offeror is available.
PARENT
Parent is a Delaware corporation with its principal executive offices
located at 101 Columbia Road, Morristown, NJ 07962. Parent is an advanced
technology and manufacturing company serving customers worldwide with aerospace
and automotive products, chemicals, fibers, plastics and advanced materials.
Parent is organized into eleven strategic business units and reports its results
of operations in the following five business segments: Aerospace Systems,
Specialty Chemicals & Electronic Solutions, Turbine Technologies, Performance
Polymers and Transportation Products. The Company's products are used by major
industries including textiles, construction, plastics, electronics, automotive,
chemicals, housing, telecommunications, utilities, packaging, agriculture,
military and commercial aviation and aerospace and in the space program.
Parent is subject to the information and reporting requirements of the
Exchange Act and is required to file reports and other information with the
Commission relating to its business, financial condition and other matters.
Information, as of particular dates, concerning Parent's directors and officers,
their remuneration, stock options granted to them, the principal holders of
Parent's securities, any material interests of these persons in transactions
with Parent and other matters is required to be disclosed in proxy statements
distributed to Parent's shareholders and filed with the Commission. These
reports, proxy statements and other information should be available for
inspection and copies may be obtained in the same manner as set forth for the
Company under 'Available Information' in Section 8.
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Parent's common stock is listed on the NYSE, and reports, proxy statements and
other information concerning Parent should also be available for inspection at
the offices of the NYSE, 20 Broad Street, New York, New York 10005.
Set forth below is certain selected historical consolidated financial
information relating to Parent and its subsidiaries which has been excerpted or
derived from audited financial statements presented in Parent's 1997 Annual
Report to Shareholders and from Parent's unaudited consolidated financial
statements contained in Parent's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1998. More comprehensive financial information is
included in these reports and other documents filed by Parent with the
Commission. The financial information summary set forth below is qualified in
its entirety by reference to reports and other documents which have been filed
with the Commission, including the financial information and related notes
contained therein, which are incorporated herein by reference. These reports and
other documents may be inspected at and copies may be obtained from the offices
of the Commission or the NYSE in the manner set forth above.
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ALLIEDSIGNAL INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
------------------ -----------------------------
1998 1997 1997 1996 1995
------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales.................................................. $ 7,515 $ 6,905 $14,472 $13,971 $14,346
Income from operations(1).................................. 953 785 1,636 1,059 1,260
Net income(1).............................................. 650 564 1,170 1,020 875
EARNINGS PER SHARE INFORMATION:
Earnings per share of common stock
Basic(1).............................................. $ 1.15 $ 1.00 $ 2.07 $ 1.80 $ 1.54
Assuming dilution(1).................................. $ 1.13 $ .97 $ 2.02 $ 1.76 $ 1.52
BALANCE SHEET DATA:
Current assets............................................. $ 5,312 $ 5,638 $ 5,573 $ 5,839 $ 4,890
Property, plant and equipment -- net....................... 4,197 4,200 4,251 4,219 4,742
Total assets............................................... 13,897 12,912 13,707 12,829 12,465
Current liabilities........................................ 3,918 3,594 4,436 3,696 3,804
Long-term debt, excluding current portion.................. 1,638 1,263 1,215 1,317 1,366
Total shareowners' equity.................................. 4,823 4,352 4,386 4,180 3,592
</TABLE>
- ------------
(1) In 1997 includes a fourth quarter pre-tax provision of $237 million
(after-tax $159 million, or $.28 per share) for repositioning and other
charges. Also includes in 1997 a fourth quarter pre-tax gain of $277 million
(after-tax $196 million, or $.35 per share) on the sale of the safety
restraints business and a fourth quarter pre-tax charge of $51 million
(after-tax $33 million, or $.06 per share) for the settlement of the 1996
braking business sale. In 1996 includes a second quarter pre-tax provision
of $637 million (after-tax $359 million, or $.63 per share) for
repositioning and other charges. Also includes in 1996 a second quarter
pre-tax gain of $655 million (after-tax $368 million, or $.65 per share) on
the sale of the braking business. In 1995 includes a pre-tax provision of
$115 million (after-tax $71 million or $.13 per share) for repositioning
charges. Also includes in 1995 a pre-tax gain of $71 million (after-tax $71
million, or $.13 per share) on the transfer of the HDPE business.
The name, citizenship, business address, principal occupation or employment
and five-year employment history for each of the directors and executive
officers of Offeror and Parent are set forth on Schedule I.
Except as set forth in this Offer to Purchase, neither Parent nor Offeror
or, to the best knowledge of Parent or Offeror, any of the persons listed in
Schedule I has, during the past 60 days from the date hereof, effected any
transaction in the Shares. Parent owns 100 Shares.
Except as set forth in this Offer to Purchase, neither Parent nor Offeror
or, to the best knowledge of Parent or Offeror, any of the persons listed in
Schedule I has any contract, arrangement, understanding or relationship with any
other person with respect to any securities of the Company, including, without
limitation, any contract, arrangement, understanding or relationship concerning
the transfer or the voting of any securities of the Company, joint ventures,
loan or option arrangements, puts or calls, guaranties of loans, guaranties
against loss or the giving or withholding of proxies.
Except as set forth in this Offer to Purchase, neither Parent nor Offeror
or, to the best knowledge of Parent or Offeror, any of the persons listed in
Schedule I has had any transactions with the Company, or any of its executive
officers, directors or affiliates that would require reporting under the rules
of the Commission.
Except as set forth in this Offer to Purchase, there have been no
contracts, negotiations or transactions between Parent or Offeror, or their
respective subsidiaries, or, to the best knowledge of Parent or Offeror, any of
the persons listed in Schedule I, on the one hand, and the Company or its
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executive officers, directors or affiliates, on the other hand, concerning a
merger, consolidation or acquisition, tender offer or other acquisition of
securities, election of directors, or a sale or other transfer of a material
amount of assets.
10. SOURCE AND AMOUNT OF FUNDS. Offeror estimates that the total amount of
funds required to acquire the outstanding Shares pursuant to the Offer and to
pay related fees and expenses will be approximately $10,050,000,000. See
Section 16. Offeror expects to obtain the funds required to consummate the Offer
through capital contributions or advances made by Parent. Parent plans to obtain
the funds for these capital contributions or advances by issuing commercial
paper and/or engaging in other short-term borrowing programs in the bank,
private or public debt markets.
It is anticipated that approximately $1,500,000,000 of the short-term
indebtedness initially incurred by Parent in connection with the Offer will be
repaid from the issuance of equity securities of Parent, approximately
$2,000,000,000 from the disposition of assets and the remainder from a
combination of short, medium and possibly long-term borrowings in the bank,
private or public debt markets. Such borrowings are expected to be repaid from
funds internally generated by Parent and its subsidiaries (including, after the
Proposed Merger is consummated, cash flow of the surviving corporation), and the
curtailment of Parent's stock buy-back program. No final decisions have been
made concerning the method Parent will employ to repay its initial short-term
borrowings incurred to consummate the Offer. These decisions, when made, will be
based on Parent's review from time to time of the advisability of particular
actions, as well as on prevailing interest rates, stock market and financial and
other economic conditions. Furthermore, of course, there can be no assurance
that Parent will be able to utilize any one or more of the repayment options or
of the amount that will be available under any of them.
THE OFFER IS NOT CONDITIONED ON OFFEROR OBTAINING FINANCING.
11. BACKGROUND OF THE OFFER; PAST CONTACTS WITH THE COMPANY. Approximately
one year ago, Mr. Lawrence A. Bossidy, Chairman and Chief Executive Officer of
Parent, contacted Mr. Ralph D. DeNunzio, a director of the Company, to discuss
the possible combination of Parent and the Company. Mr. Bossidy was subsequently
informed that the Company Board had no interest in entertaining discussions
concerning the possible combination of Parent and the Company.
On July 29, 1998, Mr. Bossidy telephoned Mr. William J. Hudson, Chief
Executive Officer and President of the Company, to discuss with him the possible
combination of Parent and the Company. Mr. Bossidy was informed by an assistant
to Mr. Hudson that Mr. Hudson was unavailable.
On July 30, 1998, Mr. Bossidy delivered the following letter to Mr. Hudson:
'July 30, 1998
Mr. William J. Hudson
Chief Executive Officer and President
AMP Incorporated
470 Friendship Road
Harrisburg, PA 17111
Dear Bill:
I tried to reach you by telephone yesterday for purposes of setting
up a meeting to discuss a combination of our two companies. In my view,
a combination makes compelling business sense and would produce a unique
opportunity for your shareowners to realize maximum value for their
shares and would be in the long-term interest of your employees. I would
like to meet with you as soon as possible, but I thought it would be
useful to make a proposal for you to consider in advance of our meeting.
AlliedSignal is prepared to offer $43.50 per share in cash for all
of AMP's outstanding shares, a premium of about 50% over the current
market value. We would consider a higher price if all or a significant
portion of the consideration were AlliedSignal shares rather than cash.
Cash, of course, would provide your shareowners the opportunity to
realize today the future value of AMP, while equity on a tax free basis
would give your shareowners the option
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to participate in the future growth of a new AlliedSignal/AMP
enterprise. Our Board of Directors has approved the transaction, and
adequate financing is available.
AlliedSignal has annual revenues of $15 billion, with operations in
the aerospace, automotive and engineered materials industries and with
the demonstrated ability to achieve sales and earnings growth on a
consistent basis. Our vision is to 'become a premier company,
distinctive and successful in everything we do.' Since we began our
Total Quality journey more than six years ago, our earnings per share
have grown at a compound average annual rate of 21% and our market value
has grown more than six-fold, from less than $4 billion to more than $25
billion.
Recently, we have focused our resources on developing a diversified
portfolio of high-growth, high-margin businesses as a means of being
both competitive and successful in the new century. A particular area of
interest is electronic materials, where we already have several
offerings. Our strategic interest in this area would assure that AMP has
the continued management and financial support necessary to maintain its
leadership position in its own businesses.
AlliedSignal offers the following:
Size and scale. We are a global company operating in some 40
countries, with the size and scale to realize economies in areas such
as purchasing, marketing and shared business services.
Technology. Both our electronic materials businesses and our
aerospace businesses can be both technology partners and customers. I
am confident that there would be synergistic benefits to both our
companies.
Management Team. Over the last six years we have developed an
outstanding management team that has demonstrated the ability to lead
in the 1990's and to cope with the issues that all of us will face as
we move into the next century. Our management team is respected
around the world -- by suppliers, by customers and by the investment
community.
Operational Strength; Processes. We have a proven track record
of operational success, increasing productivity by 5% or more for the
past five years. Most recently, we have launched new initiatives
across the company (which we refer to as 'six sigma') to ensure that
we achieve world-class design and production capabilities.
Financial Strength; Credibility. We also have an excellent
track record and a strong balance sheet.
In addition, our size and diversity offer other benefits to AMP in
a combination:
Consistent Performance. Our different businesses and
geographical markets provide a buffer for a cyclical downturn in any
one area. AMP cannot achieve that kind of consistent performance on
its own.
Business Processes. AMP can take advantage of the business
processes and best practices we have developed across a wide array of
businesses in different industries.
Employees. Our businesses also would offer many more career
opportunities for your employees. In addition, we have a
state-of-the-art education program. For example, we have been able to
drive our 'six sigma' initiatives throughout the company largely by
using internal resources.
If we are to be successful, both confidentiality and speed are of
the essence. Hence, this proposal is conditioned on your keeping the
existence of this letter and the proposal confidential, and I ask that
you respond to me promptly. I am available to meet with you at your
convenience next week and to begin discussions immediately. We are
willing to discuss any and all concerns you may have.
Bill, as you may know, I have thought about this possible
combination for a long time, and I am convinced that together we will
become a powerful force in the ever more competitive
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marketplace of tomorrow. If permitted, I will do all within my power to
convince you of the merits of this combination.
You can reach me at [telephone number omitted].
Sincerely,
/s/ Larry'
On the morning of August 4, 1998, Mr. Bossidy attempted to contact Mr.
Hudson and was informed that Mr. Hudson was unavailable. Mr. Hudson's assistant
called later that day to inform Mr. Bossidy that Mr. Hudson would contact him no
later than August 5, 1998. Also on the morning of August 4, 1998, Mr. Peter M.
Kreindler, Senior Vice President, General Counsel and Secretary of Parent,
attempted, unsuccessfully, to contact Mr. Charles W. Goonrey, Vice President and
General Legal Counsel of the Company. Subsequent to these telephone calls, Mr.
Bossidy sent the following letter to the Company:
'August 4, 1998
Board of Directors
AMP Incorporated
470 Friendship Road
Harrisburg, PA 17111
I am writing to you after my unsuccessful attempts to make contact
with Bill Hudson to discuss a proposal for the strategic combination of
our two companies in a manner that truly serves the vital best interests
of the employees, customers, shareowners and communities of which we are
a part. Specifically, in our letter of July 30 I proposed that
AlliedSignal acquire all the outstanding shares of AMP for $43.50 per
share in cash, or for a higher price if all or a significant portion of
the consideration were AlliedSignal shares rather than cash.
It is our desire to enter into direct discussions about this
transaction with you. However, because Mr. Hudson has not responded to
my calls and letter, we have decided to commence a tender offer for all
outstanding shares of AMP for an enhanced price of $44.50 per share in
cash. A combination is clearly in the best interests of both companies
and all of their constituencies, and we are committed to completing it.
The AlliedSignal Board of Directors has unanimously authorized this
offer, and adequate financing is available. Accordingly, if AMP is
unwilling to enter negotiations, AlliedSignal is prepared to initiate a
consent solicitation to increase the size of the AMP Board of Directors
and to add a majority of directors who will be responsive to our
proposal.
As I said in my letter to Mr. Hudson last week, and as I will tell
you in person if you permit me to present our proposal in person, a
combination of our companies makes compelling business sense and is
consistent with both the letter and spirit of the laws governing
businesses in Pennsylvania. I hope that we can work together in a
professional and constructive manner so that your constituencies can
enjoy the benefits of our combination as soon as possible. In
particular:
For AMP shareowners, an acquisition of AMP shares for $44.50
in cash provides the opportunity to realize an immediate premium of
about 55% over the market price of AMP's shares. If we exchange
AlliedSignal shares for AMP shares on a tax-free basis, your
shareowners would be able to participate in the future growth of a
new AlliedSignal/AMP enterprise. We are confident that our business
approach, which over the past six years has enabled us to grow
earnings per share at a compound average annual rate of 21% and
increase our market value six-fold, would create significant value
if applied to AMP's business. AlliedSignal can also bring to bear
on AMP's business the important advantages we have in size and
scale, technology, management depth, operational excellence and
financial strength. Finally, AMP shareowners would benefit from
owning a stock with a demonstrated record of consistent performance.
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For AMP employees, the size of AlliedSignal and scope of our
businesses would offer many more career opportunities than they have
currently. AlliedSignal has been named by Fortune as one of the best
100 companies in America for which to work.
For AMP customers, our business approach and Six Sigma
operational initiatives ensure that we achieve world-class design and
production capabilities in all our businesses, everywhere we operate.
I look forward to speaking with you soon.
Sincerely,
Larry Bossidy
Chairman and Chief Executive Officer'
12. PURPOSE OF THE OFFER AND THE PROPOSED MERGER; PLANS FOR THE COMPANY;
CERTAIN CONSIDERATIONS.
PURPOSE
The purpose of the Offer is to enable Parent to acquire control of, and the
entire equity interest in, the Company. Parent currently intends, as soon as
practicable following consummation of the Offer, to propose and seek to have the
Company consummate a Proposed Merger. The purpose of the Proposed Merger under
these circumstances would be to acquire all Shares not tendered and purchased
pursuant to the Offer or otherwise. Pursuant to the Proposed Merger, each then
outstanding Share (other than Shares owned by the Offeror, Parent, or any of
their subsidiaries, Shares held in the treasury of the Company and Shares owned
by shareholders who perfect available appraisal rights under the PBCL) would be
converted into the right to receive an amount in cash equal to the price per
Share paid pursuant to the Offer.
Although Parent commenced the Offer to acquire all of the Shares for cash,
Parent is seeking to negotiate with the Company, in conjunction with or in
substitution for, the Offer, a Proposed Merger in which holders of the Shares
would receive consideration consisting of cash or equity securities of Parent or
a combination of both. In the event Parent is successful in negotiating the
Proposed Merger, Offeror reserves the right to amend the Offer (including the
number of Shares to be purchased and the proposed Offer Price) or, if the
Proposed Merger does not contemplate a tender offer, to terminate the Offer
without purchasing any Shares thereunder.
Except in the case of a 'short-form' merger under Section 1924(b)(1)(ii) of
the PBCL as described below, under the PBCL and the Company's articles of
incorporation, the approval of the Company Board (including for purposes of the
Business Combination Statute) and the affirmative vote of holders of 66 2/3% of
the outstanding Shares (including any Shares owned by Offeror) would be required
to approve the Proposed Merger (assuming that Offeror complies with Subchapter D
of Chapter 25 of the PBCL by providing consideration in the Proposed Merger to
holders of Shares not less than the highest amount paid by Offeror to acquire
Shares). See Section 15. Accordingly, if, under these circumstances Offeror
acquires, through the Offer or otherwise, voting power with respect to at least
66 2/3% of the outstanding Shares and such Shares are accorded voting rights
under the Control Share Acquisition Statute (see Section 15), it would have
sufficient voting power to effect the Proposed Merger without the vote of any
other shareholder of the Company.
Section 1924(b)(1)(ii) of the PBCL provides that if a parent company owns
at least 80% of each class of stock of a subsidiary, the parent company can
effect a 'short-form' merger with that subsidiary without a shareholder vote.
The provisions of Subchapter D of Chapter 25 are not applicable to a
'short-form' merger under Section 1924(b)(1)(ii) of the PBCL and, since a vote
of shareholders is not required for this type of transaction, Offeror may, under
these circumstances, elect not to seek a vote of shareholders under the Control
Share Acquisition Statute. Accordingly, if, as a result of the Offer or
otherwise, Offeror acquires at least 80% of the outstanding Shares, Offeror
could, and intends to, effect the Proposed Merger without prior notice to, or
any action by, any other shareholder of the Company.
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If a Proposed Merger Agreement has not been executed, Offeror or an
affiliate of Offeror may, either following the consummation or termination of
the Offer (whether or not the Purchaser purchases Shares pursuant to the Offer),
or from time to time thereafter, seek to acquire additional Shares through open
market purchases, privately negotiated transactions, a tender offer or exchange
offer or otherwise, upon such terms and at such prices as it may determine,
which may be more or less than the price to be paid pursuant to the Offer.
Alternatively, Offeror and its affiliates reserve the right to sell or otherwise
dispose of any or all of the Shares acquired by them pursuant to the Offer or
otherwise, upon such terms and at such prices as they shall determine.
Under the PBCL and the Company's articles of incorporation, holders of a
majority of the outstanding Shares may act by written consent to amend the
Company's By-laws and elect directors. If the Company is not receptive to the
Offer and Proposed Merger, the Parent intends to file a Consent Solicitation for
the following purposes: (i) to amend Section 2.2 of Article II of the Company
By-laws to fix the number of directors of the Company at twenty-eight; (ii) to
amend Section 2.4 of Article II of the Company By-laws to permit the Company's
shareholders to fill vacancies on the Company Board; (iii) to amend Section
1.5.3 of Article II of the Company By-laws to clarify that nominations of
directors for election by written consent of shareholders are not subject to the
advance notification provisions of the Company By-laws; (iv) to elect the
Nominees to serve as directors of the Company; and (v) to repeal each provision
of the Company By-laws or amendment(s) thereto adopted subsequent to July 22,
1998 and prior to the effectiveness of the foregoing amendments and the seating
of a sufficient number of Nominees to constitute a majority of the Company
Board.
If elected as directors of the Company, the Nominees intend to cause the
Company, subject to the fulfillment of their fiduciary duties as directors of
the Company, to enter into a Proposed Merger Agreement, which would provide for
cash consideration per Share equal to the Offer Price. The Nominees also intend
to take whatever other actions are appropriate, subject to fulfillment of their
fiduciary duties as directors of the Company, to facilitate the Offer and the
Proposed Merger, including approving the Offer and the Proposed Merger under the
Business Combination Statute, which would satisfy the Business Combination
Condition.
Offeror believes that the Dead Hand Provision is unenforceable. Offeror has
commenced litigation against the Company in the United States District Court for
the Eastern District of Pennsylvania seeking declaratory judgment rendering the
Dead Hand Provision of the Rights Agreement invalid. There can be no assurance
that the judgment will be obtained. See Section 15. If the Dead Hand Provision
is enforceable, the Nominees, subject to fulfillment of their fiduciary duties
as directors of the Company, intend to seek the required approval of a majority
of the Continuing Directors to redeem the Rights (or amend the Rights
Agreement), but there can be no assurance that they will succeed in doing so.
The precise timing and other details of the Proposed Merger or any merger
or business combination transaction will depend on a variety of factors such as
general economic conditions and prospects, the prices of the common stock of the
Parent and of the Shares, interest rates, the level of the stock markets, the
future prospects, asset value and earnings of the Company, the number of shares
acquired by Offeror pursuant to the Offer or otherwise and the applicable
statutory requirements under Pennsylvania law. Offeror can give no assurance
that a merger or other business combination will be proposed or that, if it is
proposed, it will not be delayed or abandoned. Offeror expressly reserves the
right not to propose any merger or similar business combination involving the
Company, or to propose a merger or other business combination on terms other
than those set forth herein, and its ultimate decision could be affected by
information hereafter obtained by Offeror, changes in general economic or market
conditions or in the business of the Company or other factors.
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES OR WRITTEN CONSENTS
FROM THE COMPANY'S SHAREHOLDERS. ANY SOLICITATION OF PROXIES OR WRITTEN CONSENTS
WHICH PARENT OR OFFEROR UNDERTAKES WOULD BE MADE ONLY PURSUANT TO SEPARATE PROXY
OR CONSENT SOLICITATION MATERIALS IN COMPLIANCE WITH THE REQUIREMENTS OF SECTION
14(a) OF THE EXCHANGE ACT.
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PLANS FOR THE COMPANY
In connection with the Offer and Proposed Merger, Parent has reviewed, and
will continue to review, on the basis of publicly available information, various
possible business strategies that it might consider in the event that Offeror
acquires control of the Company, whether pursuant to the Offer and Proposed
Merger or otherwise. In particular, based on publicly available information
relating to the Company and its leading competitors, Parent has estimated that,
through cost initiatives and synergies, the Proposed Merger could result in
annual cost savings of approximately $250,000,000 in 1999 and approximately
$500,000,000 in 2000, which would result in the Company achieving better margins
than its historical levels and those of its leading competitors. If Offeror
acquires control of the Company, Parent intends to conduct a detailed review of
the Company and its assets, corporate structure, dividend policy,
capitalization, operations, properties, policies, management and personnel and
to consider and determine what, if any, changes would be desirable in light of
the circumstances which then exist. In this regard, if Offeror acquires control
of the Company, Parent intends to examine measures already taken or proposed by
the Company as part of its strategy to become more competitive in the global
marketplace, including various cost cutting measures, plant closures,
manufacturing rationalization and workplace reductions. See Section 8. Upon
completion of its review, Parent may continue, extend and accelerate the cost
cutting and restructuring measures commenced by the Company, including further
reductions in the global workforce and the shutting down and further
rationalization of plants and facilities. The nature and extent of any measures
will be determined only after Parent has had an opportunity to examine the
operations of the Company.
Except as indicated in this Offer to Purchase, neither Parent nor Offeror
has any present plans or proposals which relate to or would result in an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation involving the Company or any of its subsidiaries, a sale or transfer
of a material amount of assets of the Company or any of its subsidiaries or any
material change in the Company's capitalization or dividend policy or any other
material changes in the Company's corporate structure or business, or the
composition of the Company Board or management.
DISSENTERS' RIGHTS
No appraisal rights are available in connection with the Offer.
If a Proposed Merger is consummated involving all or part cash
consideration, dissenters' rights would be provided in accordance with Section
1930(a) of the PBCL. In that event, any issued and outstanding Shares held by
persons who object to the Proposed Merger and comply with all the provisions of
the PBCL concerning the right of holders of Shares to dissent from the Proposed
Merger and require valuation of their Shares (each a 'Dissenting Shareholder')
will not be converted into the right to receive the consideration to be paid
pursuant to the Proposed Merger but will become the right to receive payment of
the 'fair value' of their Shares (exclusive of any element of appreciation or
depreciation in anticipation of the Proposed Merger). However, any Shares
outstanding immediately prior to the effective time of the Proposed Merger and
held by a Dissenting Shareholder who, after that time, withdraws his demand for
payment or loses his right to dissent, in either case pursuant to the PBCL, will
be deemed to be converted as of the effective time of the Proposed Merger into
the right to receive the consideration to be paid pursuant to the Proposed
Merger, without interest.
Dissenters' rights cannot be exercised at this time. Shareholders who will
be entitled to dissenters' rights, if any, in connection with the Proposed
Merger (or similar business combination) will receive additional information
concerning any available dissenters' rights and the procedures to be followed in
connection therewith before the shareholders have to take any action relating
thereto.
Shareholders who sell shares in the Offer will not be entitled to exercise
any dissenters' rights with respect to Shares purchased, but rather, will
receive the Offer Price.
13. DIVIDENDS AND DISTRIBUTIONS. If, on or after the date of this Offer to
Purchase, the Company should (i) split, combine or otherwise change the Shares
or its capitalization, (ii) issue or sell any additional securities of the
Company or otherwise cause an increase in the number of outstanding securities
of the Company or (iii) acquire currently outstanding Shares or otherwise cause
a reduction in the number of outstanding Shares, then, subject to the provisions
of Section 14, Offeror, in its sole
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discretion, may make those adjustments as it deems appropriate in the Offer
Price and other terms of the Offer, including, without limitation, the amount
and type of securities offered to be purchased.
If, on or after the date of this Offer to Purchase, the Company should
declare or pay any dividend on the Shares, other than the regular quarterly
dividend of not more than $0.27 per share, or make any distribution (including,
without limitation, the issuance of additional Shares pursuant to a stock
dividend or stock split, the issuance of other securities or the issuance of
rights for the purchase of any securities) with respect to the Shares that is
payable or distributable to shareholders of record on a date prior to the
transfer to the name of Offeror or its nominee or transferee on the Company's
share register of the Shares purchased pursuant to the Offer, then, subject to
the provisions of Section 14, (i) the Offer Price payable by Offeror pursuant to
the Offer will be reduced by the amount of any cash dividend or cash
distribution and (ii) any non-cash dividend, distribution or right to be
received by the tendering shareholders will be received and held by the
tendering shareholders for the account of Offeror and will be required to be
promptly remitted and transferred by each tendering shareholder to the
Depositary for the account of Offeror, accompanied by appropriate documentation
of transfer. Pending this remittance and subject to applicable law, Offeror will
be entitled to all rights and privileges as owner of this non-cash dividend,
distribution or right and may withhold the entire purchase price or deduct from
the purchase price the amount of value thereof, as determined by Offeror in its
sole discretion.
14. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other terms of the
Offer, and in addition to (and not in limitation of) Offeror's rights to extend
and amend the Offer at any time in its sole discretion, Offeror will not be
required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1(c) under the Exchange Act
(relating to Offeror's obligation to pay for or return tendered Shares promptly
after termination or withdrawal of the Offer), pay for, and may delay the
acceptance for payment of or, subject to the restriction above, the payment for,
any tendered Shares, and may terminate the Offer as to any Shares not then paid
for, if, Offeror, in its sole discretion determines (1) at or prior to the
expiration of the Offer any one or more of the Minimum Condition, the Rights
Condition, the Business Combination Condition, the Control Share Condition or
the HSR Condition has not been satisfied or (2) at any time after July 30, 1998
and prior to acceptance for payment of Shares, any of the following events shall
occur:
(a) there shall have been threatened, instituted or pending any
action, proceeding, application or counterclaim before any court or
governmental regulatory or administrative agency, authority, tribunal or
commission, domestic or foreign, by any government or governmental
authority or agency or commission, domestic or foreign, or by any other
person, domestic or foreign (whether brought by the Company, an affiliate
of the Company or any other person), which (i) challenges or seeks to
challenge or make illegal the acquisition by Parent or Offeror (or any
affiliate thereof) of the Shares, restrains, delays or prohibits or seeks
to restrain, delay or prohibit the making of the Offer and Proposed Merger,
consummation of the transactions contemplated by the Offer and Proposed
Merger or any other subsequent business combination, restrains, prohibits
or seeks to restrain or prohibit the performance of any of the contracts or
other arrangements entered into by Offeror or any of its affiliates in
connection with the acquisition of the Company or obtains or seeks to
obtain any material damages or otherwise directly or indirectly relating to
the transactions contemplated by the Offer or the Proposed Merger (ii)
prohibits or limits or seeks to prohibit or limit Parent's or Offeror's
ownership or operation of all or any portion of their or the Company's
business or assets (including without limitation the business or assets of
their respective affiliates and subsidiaries) or compels or seeks to compel
Parent or Offeror to dispose of or hold separate all or any portion of
their own or the Company's business or assets (including without limitation
the business or assets of their respective affiliates and subsidiaries or
imposes or seeks to impose any limitation on the ability of Parent, Offeror
or any affiliate of either of them to conduct its own business or own the
assets as a result of the transactions contemplated by the Offer and
Proposed Merger or any other subsequent business combination, (iii) makes
or seeks to make the acceptance for payment, purchase of, or payment for,
some or all of the Shares pursuant to the Offer or the Proposed Merger
illegal or results in a delay in, or restricts, the ability of Parent or
Offeror, or renders Parent or Offeror unable, to accept for payment,
purchase or pay for some or all of the Shares or to consummate the Offer
and Proposed Merger, (iv) imposes or seeks to impose limitations on the
ability of Parent or Offeror or any affiliate of either of them effectively
to acquire
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or hold or to exercise full rights of ownership of the Shares, including,
without limitation, the right to vote the Shares purchased by them on an
equal basis with all other Shares on all matters properly presented to the
shareholders of the Company, (v) in the sole judgment of Parent or Offeror,
might adversely affect the Company or any of its subsidiaries or affiliates
or Parent, Offeror, or any of their respective affiliates or subsidiaries,
(vi) in the sole judgment of Parent or Offeror, might result in a
diminution in the value of the Shares or the benefits expected to be
derived by Parent or Offeror as a result of the transactions contemplated
by the Offer and Proposed Merger (vii) in the sole judgment of Parent or
Offeror, imposes or seeks to impose any material condition to the Offer
unacceptable to Parent or Offeror or (viii) otherwise directly or
indirectly relates to the Offer, the Proposed Merger or any other business
combination with the Company;
(b) there shall be any action taken, or any statute, rule, regulation
or order or injunction shall be sought, proposed, enacted, promulgated,
entered, enforced or deemed or become applicable to (i) Parent, Offeror or
any other affiliate of Parent or (ii) the Offer, the Proposed Merger or
other subsequent business combination between Parent or Offeror (or any
affiliate thereof) and the Company or any affiliate of the Company or any
other action shall have been taken, proposed or threatened, by any
government, governmental authority or other regulatory or administrative
agency or commission or court, domestic, foreign or supranational, that, in
the sole judgment of Parent or Offeror, might, in each case, directly or
indirectly, result in any of the consequences referred to in clauses (i)
through (viii) of paragraph (a) above;
(c) any change (or any condition, event or development involving a
prospective change) shall have occurred or been threatened in the business,
properties, assets, liabilities, capitalization, shareholders' equity,
condition (financial or otherwise), operations, licenses, franchises,
permits, permit applications, results of operations or prospects of the
Company or any of its subsidiaries or affiliates which, in the sole
judgment of Parent or Offeror, is or may be materially adverse to the
Company or any of its subsidiaries or affiliates, or Parent or Offeror
shall have become aware of any fact which, in the sole judgment of Parent
or Offeror, has or may have material adverse significance with respect to
either the value of the Company or any of its subsidiaries or the value of
the Shares to Parent, Offeror or any other affiliate thereof;
(d) there shall have occurred or been threatened (i) any general
suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market in the
United States (ii) any extraordinary or material adverse change in the
financial markets or major stock exchange indices in the United States or
abroad or in the market price of Shares (iii) any change in the general
political, market, economic or financial conditions in the United States or
abroad that could, in the sole judgment of Offeror, have a material adverse
effect upon the business, properties, assets, liabilities, capitalization,
stockholders' equity, condition (financial or otherwise), operations,
licenses or franchises, results or operations or prospects of the Company
or material change in United States currency exchange rates or a suspension
of, or limitation on, the markets therefor (iv) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States, (v) any limitation (whether or not mandatory) by any government,
domestic, foreign or supranational, or governmental entity on, or other
event that, in the sole judgment of Offeror, might affect, the extension of
credit by banks or other lending institutions (vi) a commencement of a war
or armed or hostilities or other national or international calamity
directly or indirectly involving the United States or (vii) in the case of
any of the foregoing existing at the time of the commencement of the Offer,
a material acceleration or worsening thereof;
(e) other than the redemption of the Rights at the Redemption Price
(as defined in Section 8), the Company shall have (i) issued, distributed,
pledged, sold or authorized, proposed or announced the issuance of or sale,
distribution or pledge to any person of (A) any shares of its capital stock
(other than sales or issuances pursuant to options outstanding on July 30,
1998 in accordance with their terms as disclosed on that date of the Shares
or securities convertible into shares or any rights, warrants or options to
acquire shares or convertible securities or any other securities of the
Company) or (B) any other securities in respect of, in lieu of or in
substitution for Shares
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outstanding on July 30, 1998, (ii) purchased, acquired or otherwise caused
a reduction in the number of, or proposed or offered to purchase, acquire
or otherwise reduce the number of, any outstanding Shares or other
securities, (iii) declared, paid or proposed to declare or pay any dividend
or distribution on Shares (other than regular quarterly dividends on the
Shares not in excess of $0.27 per share, and with record and payment dates,
in accordance with recent practice) or on any other security or issued,
authorized, recommended or proposed the issuance or payment of any other
distribution in respect of the Shares whether payable in cash, securities
or other property, (iv) altered or proposed to alter any material term of
any outstanding security, (v) incurred any debt other than in the ordinary
course of business and consistent with past practice or any debt containing
burdensome covenants, (vi) issued, sold or authorized or announced or
proposed the issuance of or sale to any person of any debt securities or
any securities convertible into or exchangeable for debt securities or any
rights, warrants or options entitling the holder thereof to purchase or
otherwise acquire any debt securities or incurred or announced its
intention, to incur any debt other than in the ordinary course of business
and consistent with past practice, (vii) split, combined or otherwise
changed, or authorized or proposed the split, combination or other change
of the Shares or its capitalization, (viii) authorized, recommended,
proposed or entered into or publicly announced its intent to enter into any
consolidation, liquidation, dissolution, acquisition or disposition of a
material amount of assets or securities, any material change in its
capitalization, any waiver, release or relinquishment of any material
contract rights or comparable right of the Company of any of its
subsidiaries or any agreement contemplating any of the foregoing of any
comparable event not in the ordinary course of business, or taken any
action to implement any transaction previously authorized, recommended,
proposed or publicly announced, (ix) transferred into escrow any amounts
required to fund any existing benefit, employment or severance agreements
with any of its employees or entered into any employment, severance or
similar agreement, arrangement or plan with any of its employees other than
in the ordinary course of business and consistent with past practice or
entered into or amended any agreements, arrangements or plans so as to
provide for increased benefits to the employees as a result of or in
connection with the transactions contemplated by the Offer or any other
change in control of the Company, (x) except as may be required by law,
taken any action to terminate or amend any employee benefit plan (as
defined in Section 3(2) of ERISA) of the Company or Parent or Offeror shall
have become aware of any action which was not previously disclosed in
publicly available filings, (xi) except as contemplated by the Offer,
amended or proposed or authorized any amendment to its articles of
incorporation or bylaws or similar organizational documents, (xii)
authorized, recommended, proposed or entered into any other transaction
that in the sole judgment of Parent or Offeror could, individually or in
the aggregate, adversely affect the value of the Shares to Parent or
Offeror or (xiii) agreed in writing or otherwise to take any of the
foregoing actions or Parent or Offeror shall have learned about any action
which has not previously been publicly disclosed by the Company and also
set forth in filings with the Commission;
(f) a tender or exchange offer for any Shares shall be made or
publicly proposed to be made by any other person (including the Company or
any of its subsidiaries or affiliates) or it shall be publicly disclosed or
Offeror shall otherwise learn that (i) any person, entity (including the
Company or any of its subsidiaries) or 'group' (within the meaning of
Section 13(d)(3) of the Exchange Act) shall have acquired or proposed to
acquire beneficial ownership of more than 5% of any class or series of
capital stock of the Company (including the Shares), through the
acquisition of stock, the formation of a group or otherwise, or shall have
been granted any right, option or warrant, conditional or otherwise, to
acquire beneficial ownership of more than 5% of any class or series of
capital stock of the Company (including the Shares) other than acquisitions
for bona fide arbitrage purposes only and except as disclosed in a Schedule
13D or Schedule 13G on file with the Commission on the date of this Offer
to Purchase, (ii) any such person, entity or group which, before the date
of this Offer to Purchase, had filed such a Schedule with the Commission,
has acquired or proposes to acquire, through the acquisition of stock, the
formation of a group or otherwise, beneficial ownership of an additional 1%
or more of any class or series of capital stock of the Company (including
the Shares), or shall have been granted any right, option or warrant,
conditional or otherwise, to acquire beneficial ownership of an additional
1% or more of
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any class or series of capital stock of the Company (including the Shares),
(iii) any person or group shall enter into a definitive agreement or an
agreement in principle or make a proposal with respect to a tender offer or
exchange offer or a merger, consolidation or other business combination
with or involving the Company or (iv) any person shall file a Notification
and Report Form under the Hart-Scott-Rodino Act or make a public
announcement reflecting an intent to acquire the Company or any assets or
securities of the Company;
(g) the Company and Parent or Offeror shall have reached an agreement
or understanding that the Offer be terminated or amended or Parent or
Offeror (or one of their respect affiliates) shall have entered into a
definitive agreement or an agreement in principle to acquire the Company by
merger or similar business combination;
(h) Parent or Offeror shall become aware (i) that any material
contractual right of the Company or any of its subsidiaries or affiliates
shall be impaired or otherwise adversely affected or that any material
amount of indebtedness of the Company of any of its subsidiaries shall
become accelerated or otherwise become due prior to its stated due date, in
either case with or without notice of the lapse of time or both, as a
result of the transactions contemplated by the Offer or the Proposed Merger
or (ii) of any covenant, term or condition in any of the Company's or any
of its subsidiaries' instruments or agreements that are or may be
materially adverse to the value of the Shares in the hands of Offeror or
any other affiliate of Parent (including, but not limited to, any event of
default that may ensue as a result of the consummation of the Offer, the
Proposed Merger or any other business combination or the acquisition of
control of the Company); or
(i) Parent or Offeror shall not have obtained any waiver, consent,
extension, approval, action or non-action from any governmental authority
or agency which in its judgment is necessary to consummate the Offer or the
Proposed Merger;
which, in the sole judgment of Parent or Offeror in any case, and regardless of
the circumstances (including any action or inaction by Parent or Offeror or any
of their affiliates), giving rise to any condition, makes it inadvisable to
proceed with the Offer and/or with acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Parent and Offeror and
may be asserted by Parent and Offeror in their sole discretion regardless of the
circumstances giving rise to any conditions or may be waived by Parent or
Offeror in their sole discretion in whole or in part at any time and from time
to time. The failure by Parent or Offeror at any time to exercise any of the
foregoing rights will not be deemed a waiver of any right and each right shall
be deemed an ongoing right which may be asserted at any time and from time to
time. Any determination by Parent or Offeror concerning any condition or event
described in this Section 14 shall be final and binding upon all parties.
15. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS. Except as set
forth in this Offer to Purchase, including under the caption 'State Approvals'
below, based on its review of publicly available filings by the Company with the
Commission, neither Offeror nor Parent is aware of (i) any license or regulatory
permit that appears to be material to the business of the Company and its
subsidiaries, taken as a whole, and that might be adversely affected by
Offeror's acquisition of Shares as contemplated in this Offer, or (ii) any
filing, approval or other action by or with any governmental authority,
administrative or regulatory agency or authorized, domestic or foreign, that
would be required for the acquisition or ownership of the Shares by Offeror
pursuant to this Offer as contemplated herein. Should any approval or other
action be required, Parent and Offeror contemplate that this approval or action
would be sought. While Offeror does not currently intend to delay acceptance for
payment of Shares tendered pursuant to the Offer, there can be no assurance that
any approval or action, if needed, would be obtained without substantial
conditions or that adverse consequences might not result to the Company or
businesses of the Company, Parent or Offeror, or that certain parts of the
businesses of the Company, Parent or Offeror might not have to be disposed of or
held separate or other substantial conditions complied with in order to obtain
approval or action or in the event that approvals were not obtained or actions
were not taken. Offeror's obligation to purchase and pay for Shares is subject
to certain conditions, including conditions with respect to litigation and
governmental actions. See the Introduction.
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ANTITRUST COMPLIANCE
DOMESTIC ANTITRUST COMPLIANCE
Under the Hart-Scott-Rodino Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions, including the Offer and
Proposed Merger, may not be consummated unless certain information has been
furnished to the Antitrust Division and the FTC and certain waiting period
requirements have been satisfied.
A Notification and Report Form with respect to the Offer is expected to be
filed under the Hart-Scott-Rodino Act shortly, and the waiting period with
respect to the Offer under the Hart-Scott-Rodino Act will expire at 11:59 p.m.,
New York City time, on the fifteenth calendar day after this filing, unless
previously terminated. Before this time, however, either the FTC or the
Antitrust Division may extend the waiting period by requesting additional
information or materials from Offeror. If this request is made, the waiting
period will expire at 11:59 p.m., New York City time, on the tenth calendar day
after Offeror has substantially complied with the request. After an initial
extension, the waiting period may only be extended by court order or with
Offeror's consent. After an extension by court order, the waiting period will
not be affected either by the failure of the Company (as opposed to Parent or
Offeror) to file a Notification and Report Form or to comply with any request
for additional information or materials issued by the FTC or the Antitrust
Division.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
Offeror pursuant to the Offer. At any time before or after the purchase of
Shares pursuant to the Offer by Offeror, the FTC or the Antitrust Division could
take action under the antitrust laws as it deems necessary or desirable in the
public interest, including seeking to enjoin the purchase of the Shares pursuant
to the Offer or seeking divestiture of Shares purchased by Offeror or the
divestiture of substantial assets of Offeror, the Company or their respective
subsidiaries. Private parties and state attorneys general may also bring legal
action under federal or state antitrust laws under certain circumstances. Based
upon an examination of information available to Offeror relating to the
businesses in which Parent, Offeror and their respective subsidiaries are
engaged, Offeror believes that the acquisition of the Company pursuant to the
Offer and Proposed Merger will not violate the antitrust laws. Nevertheless,
there can be no assurance that a challenge to the Offer and Proposed Merger on
antitrust grounds will not be made or, if this challenge is made, what the
result would be. See Introduction and Section 14 for certain conditions to the
Offer.
FOREIGN ANTITRUST COMPLIANCE
CANADIAN NATIONAL MERGER REQUIREMENTS
INVESTMENT CANADA ACT. According to the Company Annual Report, the Company
conducts certain operations in Canada. The Investment Canada Act (the 'ICA')
requires that notice of the acquisition of 'control' (as defined in the ICA) by
'non-Canadians' (as defined in the ICA) of any 'Canadian business' (as defined
in the ICA) be furnished to Industry Canada, a Canadian Governmental Entity.
The acquisition of Shares by Offeror pursuant to the Offer may constitute
an indirect acquisition of a 'Canadian business' within the meaning of the ICA.
Offeror intends to file any notice required under the ICA.
CANADIAN PRE-MERGER NOTIFICATION REQUIREMENTS. Certain provisions of
Canada's Competition Act require pre-notification to the Director of
Investigation and Research appointed under the Competition Act (the 'Canadian
Director') of significant transactions, such as the acquisition of a large
percentage of the stock of a public company that has Canadian operations.
Pre-notification is generally required with respect to a transaction in which
the parties to the transactions and their affiliates have assets in Canada, or
annual gross revenues from sales in, from or into Canada, in excess of Cdn. $400
million and which involve the direct or indirect acquisition of an operating
business, the value of the assets of which, or the annual gross revenues from
sales in or from Canada generated from these assets, exceed Cdn. $35 million.
For a transaction subject to the notification requirements, notice must be given
seven or 21 days
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prior to the completion of the transaction depending on the information provided
to the Canadian Director. After the applicable waiting period expires, the
transaction may be completed. If the Canadian Director determines that the
proposed transaction prevents or lessens, or is likely to prevent or lessen,
competition substantially in a definable market, the Canadian Director may apply
to the Competition Tribunal, a special purpose Canadian tribunal, to, among
other things, require the disposition of all or part of the Canadian assets
acquired in the transaction. Offeror intends to file any required notice and
information with respect to its proposed acquisition with the Canadian Director
and, to the extent necessary, observe the applicable waiting period and/or apply
to the Canadian Director for an advance ruling certificate to the effect that
the Offer or Proposed Merger would not prevent or lessen, or be likely to
prevent or lessen, competition substantially.
EEA AND NATIONAL MERGER REGULATION
According to the Company Annual Report, the Company conducts substantial
operations in the European Economic Area (the 'EEA'). EEC Regulation 4064/89 as
amended (the 'Merger Regulation') and Article 57 of the European Economic Area
Agreement require that concentrations with a 'Community dimension' be notified
in prescribed form to the Commission of the European Communities (the 'European
Commission') for review and approval prior to being put into effect. In these
cases, the European Commission will, with certain exceptions, have exclusive
jurisdiction to review the concentration as opposed to the individual countries
within the EEA.
The Offer and the Proposed Merger will be deemed to have a 'Community
dimension' if the combined aggregate worldwide annual revenues of both Parent
and the Company exceeds (a) ECU 5 billion, or (b)(1) the Community-wide annual
revenues of each of Parent and the Company exceed ECU 250 million and both
Parent and the Company do not receive more than two-thirds of their respective
Community-wide revenues from one and the same country or (2) the combined
aggregate worldwide annual revenues of both Parent and the Company exceed ECU
2.5 billion; the Community-wide annual revenues of each Parent and the Company
exceed ECU 100 million; the combined aggregate revenue of the Parent and the
Company exceeds ECU 100 million in at least three member states of the EU (with
each Parent and the Company having at least ECU 25 million in each of those
member states) and both Parent and the Company do not receive more than
two-thirds of their respective Community-wide revenues from one and the same
country. Concentrations that are found not to be subject to the Merger
Regulation may be subject to the various national merger control regimes of the
countries of the EEA, resulting in the possibility that it may be necessary or
desirable to obtain approvals from the various national authorities.
Based upon information contained in the Company Annual Report, Offeror
currently believes that the Offer should be considered to have a 'Community
dimension,' as the Community-wide revenues of the Company for 1997 appear to
exceed ECU 250 million. Therefore, Offeror intends to file a notification in the
proscribed form with the European Commission in accordance with the Merger
Regulation.
The European Commission has one month from the date of Offeror's filing to
complete its preliminary investigation of the Offer and the Proposed Merger
subject to certain extensions for holidays or if an individual country has
requested a referral of the transaction (or part of it). If, following this
initial one-month period, the European Commission considers that its needs to
examine the Offer and the Proposed Merger more closely, it may initiate a Phase
II investigation. If the European Commission initiates a Phase II investigation,
it must make a final determination with respect to the Offer and the Proposed
Merger no later than four months after the initial investigation. If the
European Commission does not make a decision within this four month period, the
Offer and the Proposed Merger will automatically be deemed compatible with the
European market and Offeror will be allowed to proceed.
Transactions subject to the filing requirements of the Merger Regulation
are suspended automatically until such time as they have either been cleared
during the one-month review or approved pursuant to the Phase II review.
However, in the case of a public bid the bidder may acquire shares of the target
company during the suspension period (provided that the transaction has been
duly notified to the European Commission), but may not vote the shares until
after the end of the suspension period
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unless the European Commission grants permission to do so in order to maintain
the full value of the bidder's investment.
If the European Commission declares the Offer and Proposed Merger to be
incompatible with the European market, it may prevent the consummation of the
Offer and Proposed Merger, order a divestiture if the transactions have already
been consummated or impose conditions or other obligations.
There can be no assurance that a challenge to the Offer will not be made
pursuant to the Merger Regulation or by legal action brought by private parties
or, if a challenge is made, what the outcome will be. See Section 14.
OTHER FOREIGN LAWS
The Company Annual Report indicates that the Company and certain of its
subsidiaries conduct business in other foreign countries where regulatory
filings or approvals may be required or desirable in connection with the
consummation of the Offer. Certain of these filings or approvals, if required or
desirable, may not be made or obtained prior to the expiration of the Offer.
After commencement of the Offer, Offeror will seek further information regarding
the applicability of any laws and currently intends to take action as may be
required or desirable. If any government or governmental authority or agency
takes any action prior to the completion of the Offer that, in the sole judgment
of Offeror, might have certain adverse effects, Offeror will not be obligated to
accept for payment or pay for any Shares tendered. See Section 14.
STATE TAKEOVER LAWS
Various states throughout the United States have enacted takeover statutes
that purport, in varying degrees, to be applicable to attempts to acquire
securities of corporations that are incorporated or have substantial assets,
shareholders, principal executive offices or principal places of business
therein. In 1982, in Edgar v. Mite Corp., the Supreme Court of the United States
held that the Illinois Business Takeover Act, which involved state securities
laws that made the takeover of certain corporations more difficult, imposed a
substantial burden on interstate commerce and therefore was unconstitutional. In
1987, in CTS Corp. v. Dynamics Corp. of America, however, the Supreme Court of
the United States upheld the Indiana Control Share Acquisition Statute, holding
that a state may, as a matter of corporate law and, in particular, those laws
concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without prior
approval of the remaining shareholders, provided that these laws were applicable
only under certain conditions. The Pennsylvania Control Share Acquisition
Statute is similar, in general, to the Indiana anti-takeover statute upheld in
CTS Corp. v. Dynamics Corp. of America.
The Pennsylvania Takeover Disclosure Law (the 'PTDL') purports to regulate
certain attempts to acquire a corporation which (i) is organized under the laws
of Pennsylvania or (ii) has its principal place of business and substantial
assets located in Pennsylvania. The PTDL requires, among other things, that an
offeror, 20 days prior to any takeover offer, file a registration statement for
the takeover offer with the Pennsylvania Securities Commission (the 'PSC') and
publicly disclose the offering price of the disclosed offer. However, in Crane
Co. v. Lam, 509 F. Supp. 782 (E.D. Pa. 1981), the United States District Court
for the Eastern District of Pennsylvania preliminarily enjoined, on grounds
arising under the United States Constitution, enforcement of at least that
portion of the PTDL involving the pre-offer waiting period thereunder.
Offeror has initiated discussions with the PSC regarding a proposed consent
order that would enjoin enforcement of the PTDL as it relates to the Offer. The
PSC has entered into such agreements with respect to previous takeover offers
made in Pennsylvania, and it is anticipated that an agreement will be reached as
to the Offer and submitted for court approval shortly.
Chapter 25 of the PBCL contains other provisions relating generally to
takeovers and acquisitions of certain publicly owned Pennsylvania corporations
such as the Company that have a class or series of shares entitled to vote
generally in the election of directors registered under the Exchange Act (a
'registered corporation'). The following discussion is a general and highly
abbreviated summary of
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certain features of Chapter 25, is not intended to be complete or to address
further potentially applicable exceptions or exemptions, and is qualified in its
entirety by reference to the full text of Chapter 25 of the PBCL. The Company is
a registered corporation.
Subchapter D of Chapter 25 of the PBCL includes provisions requiring
approval of a merger of a registered corporation with an 'interested
shareholder' by the affirmative vote of the shareholders entitled to cast at
least a majority of the votes that all shareholders other than the interested
shareholder are entitled to cast with respect to the transaction without
counting the votes of the interested shareholder. This disinterested shareholder
approval requirement is not applicable to a transaction: (i) approved by a vote
of the board of directors, without counting the votes of directors who are
directors or officers of, or who have a material equity interest in, the
interested shareholder; (ii) in which the consideration to be received by
shareholders is not less than the highest amount paid by the interested
shareholder in acquiring his shares; or (iii) effected without submitting the
transaction to a vote of shareholders as permitted by Section 1924(b)(1)(ii) of
the PBCL (see Section 12).
Offeror believes that the approval requirements under Subchapter D would
not apply to the Proposed Merger because Offeror expects that the value of the
consideration offered to the Company's shareholders pursuant to the Proposed
Merger would not be less than the highest amount paid by Offeror acquiring
shares pursuant to the Offer. If the approval requirements under Subchapter D
were applicable to the Proposed Merger, the Proposed Merger would have to be
approved by the affirmative vote of the holders of a majority of the votes which
all shareholders other than Offeror are entitled to cast. Offeror reserves the
rights to challenge the applicability and validity of Subchapter D.
Subchapter E of Chapter 25 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 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.
Subchapter F of Chapter 25, the Business Combination Statute, purports to
prohibit under certain circumstances a 'registered corporation' from engaging in
a 'business combination' with an 'interested shareholder' for a period of five
years following the date this person became an 'interested shareholder' unless:
(i) before this person became an interested shareholder, the board of directors
of the corporation approved either the business combination or the transaction
in which the interested shareholder became an interested shareholder; (ii) the
business combination is approved by a majority vote of the corporation's voting
shares, other than shares held by the interested shareholder, no earlier than
three months after the interested shareholder became, and provided that at the
time of the vote the interested shareholder is, the beneficial owner of shares
entitled to cast at least 80% of votes of the corporation, and the business
combination satisfies the 'fair price' criteria (generally, the higher of (a)
the highest price per share paid by the interested shareholder at a time when
the interested shareholder was the beneficial owner of at least five percent of
the voting power of the corporation and (b) the market value per share on the
announcement date with respect to the business combination or on the interested
shareholder acquisition date, whichever is higher, plus, in any case, interest
and less the value of any distributions in respect of the shares); (iii) the
business combination is approved by all of the holders of the corporation's
outstanding shares; (iv) the business combination is approved by a majority vote
of the corporation's voting shares, other than shares held by the interested
shareholder, no earlier than five years after the interested shareholder became
an interested shareholder; or (v) the business combination is approved by a
majority vote of the corporation's voting shares no earlier than five years
after the interested shareholder became an interested shareholder and the
business combination satisfies the 'fair price' criteria described above.
The Business Combination Statute provides that during a five-year period
the corporation may not engage in certain business transactions with the
interested shareholder or any affiliate or associate, including (i) any merger,
consolidation, share exchange or division of the corporation or any subsidiary
of the corporation (a) with the interested shareholder or (b) with, involving or
resulting in any other corporation which is, or after the merger, consolidation,
share exchange or division would be, an affiliate or associate of the interested
shareholder, (ii) any sale, lease, exchange, mortgage, pledge, transfer or
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other disposition to or with an interested shareholder or any affiliate or
associate of assets having an aggregate market value equal to at least 10% of
the aggregate market value of all assets on a consolidated basis or all
outstanding shares, or representing at least 10% of the net income on a
consolidated basis, in each case of the business corporation, and (iii) other
specified self-dealing transactions between the corporation and an interested
shareholder or any affiliate or associate thereof.
Offeror believes that under applicable law and under the circumstances of
the Offer, the Company Board is obligated by its fiduciary responsibilities to
approve the Offer and the Proposed Merger for purposes of the Business
Combination Statute and that its failure to do so would be a violation of law.
Offeror is hereby requesting that the Company Board adopt a resolution approving
the Offer and the Proposed Merger for purposes of the Business Combination
Statute. However, there can be no assurance that the Company Board will do so.
Offeror has commenced litigation against the Company in the United States
District Court for the Eastern District of Pennsylvania seeking an order
compelling the Company Board to approve the Offer and the Proposed Merger for
purposes of the Business Combination Statute. See Section 15. Pursuant to the
Consent Solicitation, Offeror expects to seek to increase the number of seats on
the Company Board from eleven to twenty-eight and fill the newly created
vacancies with its Nominees, who intend to approve the Proposed Merger pursuant
to the Business Combination Statute, subject to the fulfillment of their
fiduciary duties as directors of the Company. Approval of the Proposed Merger
pursuant to the Business Combination Statute would satisfy the Business
Combination Condition.
Subchapter G of Chapter 25 the Control Share Acquisition Statute, relating
to 'control-share acquisitions,' prevents under certain circumstances the owner
of a control-share block of shares (a number of shares in excess of 20%, 33 1/3%
or 50% of the outstanding shares) of a registered corporation from voting these
shares unless a majority of (i) all shares outstanding and (ii) 'disinterested'
shares approve the voting rights. 'Disinterested' shares are shares held (i) by
persons other than a potential acquiror or the executive officers of a target
corporation and (ii) by the same person from 5 days prior to a potential
acquiror's announcement to engage in a 'control share acquisition' through the
record date of the shareholder meeting at which the control-share acquisition is
to be considered. Failure to obtain this approval may result in a forced sale by
the control-share owner of the control-share block to the corporation at a
possible loss.
In order for the shareholders to consider the control-share acquisition,
the target company must hold a special shareholders' meeting within 50 days, but
no sooner than 30 days, after a potential acquiror simultaneously (i) files an
information statement with the target company, (ii) requests a shareholders'
meeting, (iii) has made a bona fide written offer to engage in a control-share
acquisition, (iv) delivered definitive financing agreements for any financing
necessary to consummate the control-share acquisition and (v) agrees to
reimburse the target company for expenses incurred in connection with the
shareholders' meeting.
Unless Offeror is otherwise satisfied that the Control Share Acquisition
Statue is invalid or that it can consummate the Proposed Merger without
submitting the transaction to a vote of shareholders as permitted by Section
1924(b)(1)(ii) of the PBCL (see Section 12), Offeror will comply with the
procedures set forth in the Control Share Acquisition Statute to compel the
Company's Board to call a special shareholders meeting for the purpose of
according voting rights for Shares it acquired pursuant to the Offer. If Offeror
does not comply with the procedures of the Control Share Acquisition Statute
described above, the Shares acquired pursuant to the Offer will not have voting
rights.
Subchapter H of Chapter 25 of the PBCL, relating to disgorgement of profits
by certain controlling shareholders of a registered corporation, provides that
under certain circumstances any profit realized by a controlling person from the
disposition of shares of the corporation to any person (including to the
corporation under Subchapter G or otherwise) will be recoverable by the
corporation.
Subchapter I of Chapter 25 of the PBCL entitles 'eligible employees' of a
registered corporation to a lump sum payment of severance compensation under
certain circumstances if the employee is terminated, other than for willful
misconduct, within two years after control share approval (a 'Control Share
Approval'), which occurs when the shareholders of a registered corporation
accord voting rights to shares acquired under a control-share acquisition
pursuant to the Control Share Acquisition Statute. Subchapter J of Chapter 25 of
the PBCL provides protection against termination or impairment under
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certain circumstances of 'covered labor contracts' of a registered corporation
as a result of a 'business combination' transaction if the business operation to
which the covered labor contract relates was owned by the registered corporation
at the time voting rights are accorded voting rights by a Control Share
Approval. The Company intends to comply with Subchapters I and J in the event
that either or both Subchapters are applicable to the Offer or Proposed Merger.
Section 2504 of the PBCL provides that the applicability of Chapter 25 of
the PBCL to a registered corporation having a class or series of shares entitled
to vote generally in the election of directors registered under the Exchange Act
or otherwise satisfying the definition of a registered corporation under Section
2502(1) of the PBCL will terminate immediately upon the termination of the
status of the corporation as a registered corporation.
Offeror has not complied with any state takeover statute or regulation,
except Offeror is making a filing under the PTDL. Offeror reserves the right to
challenge the applicability or validity of any state law purportedly applicable
to the Offer and the Proposed Merger and nothing in this Offer to Purchase or
any action taken in connection with the Offer is intended as a waiver of this
right. If it is asserted that any state takeover statute is applicable to the
Offer and the Proposed Merger and an appropriate court does not determine that
it is inapplicable or invalid as applied to the Offer and the Proposed Merger,
Offeror might be required to file certain information with, or to receive
approvals from, the relevant state authorities, and Offeror might be unable to
accept for payment or pay for Shares tendered pursuant to the Offer, or be
delayed in consummating the Offer. In this case, Offeror may not be obliged to
accept for payment or pay for any Shares tendered pursuant to the Offer. See
Section 14.
CERTAIN LITIGATION
On August 4, 1998, Parent filed a complaint against the Company in the
United States District Court for the Eastern District of Pennsylvania (the
'Complaint'). The Complaint seeks: (i) declaratory relief declaring the Dead
Hand Provision of the Rights Agreement invalid; (ii) injunctive relief requiring
the Company Board to redeem the Rights and exempt the Offer from the provisions
of the Pennsylvania Business Combination Statute; (iii) declaratory and
injunctive relief prohibiting any effort by the Company to manipulate or
otherwise subvert the process of corporate democracy by (a) amending the Company
By-laws, (b) increasing the size of the Company Board, (c) fixing a record date
for determining shareholders entitled to execute consents in response to the
Consent Solicitation more than ten (10) days after the date that Parent gives
notice demanding that such a record date be fixed, or (d) taking any other
action to frustrate the Offer or the proxy contest and Consent Solicitation that
Parent plans to conduct to facilitate the Offer and Proposed Merger; and (iv)
declaratory relief declaring that, to the extent that the Dead Hand Provision
and other anti-takeover devices that preclude tender offers and consent
solicitations are permitted under Pennsylvania law, such law is unconstitutional
under the Supremacy and Commerce Clauses of the United States Constitution.
16. FEES AND EXPENSES. Neither Offeror, nor any officer, director,
shareholder, agent or other representative of Offeror, will pay any fees or
commissions to any broker, dealer or other person (other than the Dealer
Managers, the Information Agent and the Depositary) for soliciting tenders of
Shares or Rights, if applicable, pursuant to the Offer. Brokers, dealers,
commercial banks and trust companies and other nominees will, upon request, be
reimbursed by Offeror for customary mailing and handling expenses incurred by
them in forwarding materials to their customers.
Lazard and Goldman Sachs are acting as Dealer Managers in connection with
the Offer and are providing certain financial advisory services to Parent in
connection with the Offer and related transactions. Each of Lazard and Goldman
Sachs will be paid $12,000,000 in connection therewith. In addition, Offeror has
agreed to reimburse each of Lazard and Goldman Sachs for all its expenses
incurred in connection with the Offer, including the reasonable fees of its
counsel, and to indemnify Lazard and Goldman Sachs against certain liabilities
and expenses, including certain liabilities under the federal securities laws.
Offeror has retained Morrow & Co., Inc., as Information Agent, and the Bank
of New York, as Depositary, in connection with the Offer. The Information Agent
and the Depositary will receive reasonable and customary compensation for their
services hereunder and reimbursement for their reasonable out-of-pocket
expenses. The Information Agent and the Depositary will also be indemnified by
Offeror against certain liabilities in connection with the Offer.
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17. MISCELLANEOUS. The Offer is not being made to, nor will tenders be
accepted from or on behalf of, holders of Shares or Rights, if applicable,
residing in any jurisdiction in which the making or acceptance thereof would not
be in compliance with the securities, blue sky or other laws of the
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer will be
deemed to be made on behalf of Offeror by one or more registered brokers or
dealers licensed under the laws of the jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of Offeror other than as contained in this Offer to
Purchase or in the Letter of Transmittal, and, if any information or
representation is given or made, it should not be relied upon as having been
authorized by Offeror.
Offeror has filed with the Commission the Schedule 14D-1 pursuant to
Section 14(d)(1) of the Exchange Act and Rule 14d-1 promulgated thereunder,
furnishing certain information with respect to the Offer. The Schedule 14D-1 and
any amendments, including exhibits, may be examined and copies may be obtained
at the same places and in the same manner as set forth with respect to the
Company in Section 8 (except that they will not be available at the regional
offices of the Commission).
August 10, 1998 PMA ACQUISITION CORPORATION
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SCHEDULE I
CERTAIN INFORMATION CONCERNING THE DIRECTORS
AND EXECUTIVE OFFICERS OF PARENT AND OFFEROR
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. Set forth below is the name,
age, present principal occupation or employment and five-year employment history
of each director and executive officer of Parent. All persons listed below are
citizens of the United States of America, except that Mr. Wild is a citizen of
the United Kingdom.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME, AGE AND BUSINESS ADDRESS OFFICE HELD IN PARENT FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------ ------------------------ ------------------------------------------------
<S> <C> <C>
William J. Amelio, 40 President-Turbocharging Mr. Amelio has been President- Turbocharging
Systems Systems since April 1997. He was with
International Business Machines Corporation
(IBM) from 1979 to 1997, and most recently held
positions with IBM's Personal Computer Company,
including Vice President, Re-Engineering and
Information Systems, from 1996 to 1997, and Vice
President, Operations, from 1994 to 1995.
Hans W. Becherer, 63 Director Mr. Becherer is Chairman and Chief Executive
Deere & Company Officer of Deere & Company, a manufacturer of
One John Deere Place mobile power machinery and a supplier of
Moline, IL 61265-8098 financial services. After serving in a variety
of managerial and executive positions, he became
a director of Deere in 1986 and was elected
President and Chief Operating Officer in 1987,
President and Chief Executive Officer in 1989
and Chairman and Chief Executive Officer in
1990. He is a director of The Chase Manhattan
Corporation and Schering-Plough Corporation.
David E. Berges, 48 President-Automotive Mr. Berges has been President-Automotive
Products Group Products Group since January 1998. He was
President, Bendix/Jurid, of the Automotive
Products Group in 1997, and held positions with
the Engine Systems and Accessories unit of
Aerospace Equipment Systems from 1994 to 1997,
first as Director of Engine Controls and then as
Vice President and General Manager. He served as
President and Chief Operating Officer of Barnes
Aerospace, Barnes Group Inc., from 1986 to 1994.
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<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME, AGE AND BUSINESS ADDRESS OFFICE HELD IN PARENT FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------ ------------------------ ------------------------------------------------
<S> <C> <C>
Lawrence A. Bossidy, 63 Chairman of the Board Mr. Bossidy became Chief Executive Officer in
and Chief Executive July 1991 and Chairman of the Board in January
Officer and Director 1992. He previously served in a number of
executive and financial positions with General
Electric Company. Mr. Bossidy was Chief
Operating Officer of General Electric Credit
Corporation (now General Electric Capital
Corporation) from 1979 to 1981, Executive Vice
President and Sector Executive of GE's Services
and Materials Sector from 1981 to 1984, and Vice
Chairman and Executive Officer of GE from 1984
until he joined Parent. He is a director of
Champion International Corporation, J.P. Morgan
& Co. Incorporated and Merck & Co., Inc.
Karen K. Clegg, 49 President-Federal Ms. Clegg has been President-Federal
Manufacturing & Manufacturing & Technologies (FM&T) since May
Technologies 1995. She was Vice President of FM&T from 1990
to 1995, except for one year served as Vice
President, Field Services, with AlliedSignal
Technical Services Corporation.
Ann M. Fudge, 47 Director Ms. Fudge is Executive Vice President of Kraft
Maxwell House and Post Foods, Inc. She joined General Foods USA in 1986
Division and held several planning and marketing
Kraft Foods, Inc. positions before being appointed Executive Vice
555 South Broadway-Mail Code President and General Manager of the Dinners and
TA1-2 Enhancers Division in 1991. In 1994, she was
Tarrytown, NY 10591 named President of Kraft General Foods' Maxwell
House Coffee Company. In 1995, Ms. Fudge assumed
her current position, while continuing to head
the Maxwell House Coffee Division as General
Manager. She became President of Kraft's Maxwell
House and Post Division in 1997. Kraft is the
multinational food business of Philip Morris
Companies Inc. Ms. Fudge is a director of Liz
Claiborne, Inc.
Robert D. Johnson, 50 President-Electronic & Mr. Johnson has been President-Electronic &
Avionics Systems Avionics Systems since October 1997. He was Vice
President and General Manager, Aerospace
Marketing, Sales and Service, Repair and
Overhaul, from 1994 to 1997. He served as Group
Vice President, Manufacturing and Services, of
AAR Corp. from 1993 to 1994.
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<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME, AGE AND BUSINESS ADDRESS OFFICE HELD IN PARENT FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------ ------------------------ ------------------------------------------------
<S> <C> <C>
Paul X. Kelley, 69 Director General Kelley is a Partner of J. F. Lehman &
700 13th Street, N.W. Company, an investment firm. He previously was
Suite 400 Vice Chairman of Cassidy & Associates, Inc., a
Washington, DC Washington-based government relations firm, from
20005-5917 1989 until early 1998, and served as Commandant
of the Marine Corps and as a Member of the Joint
Chiefs of Staff from 1983 until his retirement
in 1987. General Kelley is a director of GenCorp
Inc., Saul Centers, Inc., Sturm, Ruger &
Company, Inc., UST Inc. and The Wackenhut
Corporation.
Larry B. Kittelberger, 49 Vice President and Chief Mr. Kittelberger has been Vice President and
Information Officer Chief Information Officer since August 1995. He
was Corporate Chairman-Information Officer
Leadership Committee of Tenneco Inc. from June
1989 to July 1995.
Peter M. Kreindler, 53 Senior Vice President, Mr. Kreindler has been Senior Vice President,
General Counsel and General Counsel and Secretary since December
Secretary 1994. He was Senior Vice President and General
Counsel from March 1992 to November 1994.
Tig H. Krekel, 45 President-Aerospace Mr. Krekel has been President-Aerospace
Equipment Systems Equipment Systems since October 1997. He held
other positions in Aerospace Equipment Systems
from 1993 to 1997, including Vice President and
General Manager, Environmental Control Systems,
from August to October 1997, and Vice President,
Military Product Support, from April 1994 to
September 1995. He also served as Vice President
and General Manager, Military Customer Support,
Aerospace Marketing, Sales and Service, from
September 1995 to August 1997.
Joseph B. Leonard, 55 Senior Vice President Mr. Leonard has been Senior Vice President since
and President-Aerospace December 1997 and President-Aerospace Marketing,
Marketing, Sales & Sales & Service since October 1997. He was
Service Senior Vice President of Aerospace Marketing,
Sales & Service from September 1993 to October
1997. He served as Executive Vice President,
Customer Support, at Northwest Airlines from
1991 to 1993.
Steven R. Loranger, 46 President-Engines Mr. Loranger has been President-Engines since
July 1997. He was President-Truck Brake Systems
from 1995 to 1997, and Vice President, Air
Transport, Engines, from 1993 to 1995.
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<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME, AGE AND BUSINESS ADDRESS OFFICE HELD IN PARENT FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------ ------------------------ ------------------------------------------------
<S> <C> <C>
Robert P. Luciano, 64 Director Mr. Luciano is Chairman of the Board of
Schering-Plough Corporation Schering-Plough Corporation, a manufacturer and
One Giralda Farms marketer of pharmaceuticals and consumer
Madison, NJ 07940 products, which he joined in 1978. He served as
President from 1980 to 1986 and Chief Executive
Officer from 1982 through 1995. He has been
Chairman of the Board since 1984. He is a
director of C.R. Bard, Inc. and Merrill Lynch &
Co.
Paul J. Norris, 51 Senior Vice President Mr. Norris has been Senior Vice President since
and President-Specialty December 1997 and President- Specialty Chemicals
Chemicals since January 1997. He was President-Polymers
from 1995 to 1997, President-Fibers, from 1994
to 1995, and President-Chemicals and Catalysts,
from 1989 to 1994.
Robert B. Palmer, 57 Director Mr. Palmer is the former Chairman, President and
124 Mount Auburn Street Chief Executive Officer of Digital Equipment
Suite 200 North Corporation, a provider of networked computer
Cambridge, MA 02138 systems, software and services. He had advanced
through a series of executive positions after
joining Digital in 1985, becoming President and
Chief Executive Officer in 1992 and Chairman of
the Board in 1995.
Russell E. Palmer, 63 Director Mr. Palmer is Chairman and Chief Executive
The Palmer Group Officer of The Palmer Group, a private
3600 Market Street, Suite investment firm he established in 1990 after
530 serving seven years as Dean of The Wharton
Philadelphia, PA 19104 School of the University of Pennsylvania. He
previously served as Managing Director and Chief
Executive Officer of Touche Ross International
and Managing Partner and Chief Executive Officer
of Touche Ross & Co. (USA) (now Deloitte and
Touche). He is a director of Bankers Trust
Company, Bankers Trust New York Corporation,
Federal Home Loan Mortgage Corporation, GTE
Corporation, The May Department Stores Company
and Safeguard Scientifics, Inc.
Frederic M. Poses, 55 President and Chief Mr. Poses began his career with Parent in 1969
Operating Officer and and advanced through a number of managerial and
Director executive positions until he was named President
of the Plastics and Engineered Materials
Division in 1983, President of the Fibers
Division in 1986, and President of AlliedSignal
Engineered Materials in 1988, when he was also
elected Executive Vice President of Parent. In
1997, he was named Vice Chairman and a member of
the Board of Directors and in mid-1998 he
assumed his current position.
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<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME, AGE AND BUSINESS ADDRESS OFFICE HELD IN PARENT FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------ ------------------------ ------------------------------------------------
<S> <C> <C>
Donald J. Redlinger, 53 Senior Vice President- Mr. Redlinger has been Senior Vice
Human Resources and President-Human Resources and Communications
Communications since February 1995. He was Senior Vice
President-Human Resources from January 1991 to
January 1995.
Ivan G. Seidenberg, 51 Director Mr. Seidenberg is Vice Chairman, President and
Bell Atlantic Corporation Chief Executive Officer of Bell Atlantic
1095 Avenue of the Americas, Corporation, a telecommunications and
39th Fl. information services provider. He had previously
New York, NY 10036 held several senior management positions with
NYNEX Corporation, which he joined in 1983,
before becoming a director and Vice Chairman of
the Board in 1991, President and Chief Operating
Officer in 1994, and Chairman and Chief
Executive Officer in 1995. He became Vice
Chairman, President and Chief Operating Officer
of Bell Atlantic in 1997, and assumed his
current position in 1998. He is a director of
American Home Products Corporation, Boston
Properties, Inc., CVS Corporation and Viacom
Inc.
Andrew C. Sigler, 66 Director Mr. Sigler retired as Chairman and Chief
Champion International Executive Officer of Champion International
Corporation Corporation, a paper and forest products
One Champion Plaza company, in 1996. He was elected President and
Stamford, CT 06921 Chief Executive Officer of Champion in 1974 and
Chairman and Chief Executive Officer in 1979. He
is a director of The Chase Manhattan Corporation
and General Electric Company.
Jeffrey I. Sinclair, 48 President-Truck Brake Mr. Sinclair has been President-Truck Brake
Systems Systems since October 1997. He was President,
Global Sales and Marketing, Friction Materials,
from 1996 to 1997. He served as Principal of
A.T. Kearney from 1995 to 1996 and President of
St. James Group from 1991 to 1995.
John R. Stafford, 60 Director Mr. Stafford is Chairman, President and Chief
American Home Products Executive Officer of American Home Products
Corporation Corporation, a manufacturer of pharmaceutical,
Five Giralda Farms health care, animal health and agricultural
Madison, NJ 07940-0874 products. After joining that company in 1970, he
held a number of executive positions before
becoming President in l981, an office he held
until 1990 and which he resumed in early 1994.
He was elected Chairman of the Board and Chief
Executive Officer in 1986. He is a director of
Bell Atlantic Corporation, The Chase Manhattan
Corporation and Deere & Company.
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PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME, AGE AND BUSINESS ADDRESS OFFICE HELD IN PARENT FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------ ------------------------ ------------------------------------------------
<S> <C> <C>
Thomas P. Stafford, 67 Director Lt. Gen. Stafford joined the consulting firm of
Stafford, Burke and Hecker, General Technical Services, Inc. in 1984. He is
Inc. also Vice Chairman and co-founder of Stafford,
1006 Cameron Street Burke & Hecker, Inc., a Washington-based
Alexandria, VA 22314 consulting firm. After serving as an astronaut
for a number of years, he retired in 1979 from
the Air Force as Deputy Chief of Staff for
Research, Development and Acquisition and served
as Vice Chairman of Gibraltar Exploration
Limited until 1984. Lt. Gen. Stafford is also
Chairman of the Board of Omega Watch Corporation
of America and is a director of CMI Corporation,
Cycomm International Inc., Seagate Technology
Inc., Timet Inc., Tracor, Inc. and Tremont
Corporation.
Richard F. Wallman, 47 Senior Vice President Mr. Wallman has been Senior Vice President and
and Chief Financial Chief Financial Officer since March 1995. He was
Officer Vice President and Controller of International
Business Machines Corp. (IBM), a manufacturer of
information-handling systems, from April 1994 to
February 1995 and General Assistant Controller
of IBM from October 1993 to March 1994. He was
Assistant Controller-Sales & Marketing of
Chrysler Corporation from April 1989 to
September 1993.
David N. Weidman, 43 President-Polymers Mr. Weidman has been President-Polymers since
March 1998. He was President-Fluorine Products
from 1995 to 1998, and Vice President and
General Manager, Performance Additives, from
1994 to 1995. He served as General Manager of
American Cyanamid's Fibers business from 1990 to
1994.
Geoffrey Wild, 42 President-Electronic Mr. Wild has been President-Electronic Materials
Materials since February 1997. He had previously held a
number of positions with Johnson Matthey plc,
including President of Electronic Materials from
1992 to 1997.
Robert C. Winters, 66 Director Mr. Winters retired as Chairman and Chief
The Prudential Insurance Executive Officer and became Chairman Emeritus
Company of The Prudential Insurance Company of America,
751 Broad Street, 11th Floor a provider of insurance and financial services,
Newark, NJ 07102-3777 in December 1994. During his career with
Prudential, which he joined in 1953, he held
various managerial positions prior to his
election as Executive Vice President in 1978,
Vice Chairman in 1984 and Chairman and Chief
Executive Officer in 1987.
</TABLE>
(table continued on next page)
44
<PAGE>
<PAGE>
(table continued from previous page)
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME, AGE AND BUSINESS ADDRESS OFFICE HELD IN PARENT FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------ ------------------------ ------------------------------------------------
<S> <C> <C>
Henry T. Yang, 57 Director Dr. Yang became Chancellor of the University of
University of California, California, Santa Barbara in 1994. Prior to his
Santa Barbara current position, he served in a number of
5221 Cheadle Hall faculty and administrative positions at Purdue
Santa Barbara, CA 93106-2030 University starting in 1969. He became Head of
Purdue's School of Aeronautics and Astronautics
in 1979 and served as Dean of the Schools of
Engineering and Director of the Computer
Integrated Design, Manufacturing and Automation
Center from 1984 until he joined the University
of California.
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF OFFEROR. Set forth below is the
name, age, present principal occupation or employment and five-year employment
history of each director and executive officer of Offeror. All persons listed
below are citizens of the United States of America.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME, AGE AND BUSINESS ADDRESS OFFICE HELD IN OFFEROR FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------ ------------------------ ------------------------------------------------
<S> <C> <C>
Lawrence A. Bossidy, 63 Director Mr. Bossidy became Chief Executive Officer of
Parent in July 1991 and Chairman of the Board in
January 1992. He previously served in a number
of executive and financial positions with
General Electric Company. Mr. Bossidy was Chief
Operating Officer of General Electric Credit
Corporation (now General Electric Capital
Corporation) from 1979 to 1981, Executive Vice
President and Sector Executive of GE's Services
and Materials Sector from 1981 to 1984, and Vice
Chairman and Executive Officer of GE from 1984
until he joined Parent. He is a director of
Champion International Corporation, J.P. Morgan
& Co. Incorporated and Merck & Co., Inc.
Peter M. Kreindler, 53 Vice President and Mr. Kreindler has been Senior Vice President,
Secretary and Director General Counsel and Secretary of Parent since
December 1994. He was Senior Vice President and
General Counsel from March 1992 to November
1994.
Frederic M. Poses, 55 President and Director Mr. Poses began his career with Parent in 1969
and advanced through a number of managerial and
executive positions until he was named President
of the Plastics and Engineered Materials
Division in 1983, President of the Fibers
Division in 1986, and President of AlliedSignal
Engineered Materials in 1988, when he was also
elected Executive Vice President of Parent. In
1997, he was named Vice Chairman and a member of
the Board of Directors and in mid-1998 he
assumed his current position.
</TABLE>
45
<PAGE>
<PAGE>
Facsimile copies of the Letters of Transmittal, properly completed and duly
executed, will be accepted. The Letters of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each shareholder
of the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary at one of its addresses set forth below:
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile: By Hand/Overnight Courier:
Tender & Exchange Department (For Eligible Institutions Only) Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, N.Y. 10286-1248 Confirm by telephone: New York, N.Y. 10286
1-800-507-9357
</TABLE>
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
set forth below. Additional copies of this Offer to Purchase, the Letters of
Transmittal and other tender offer materials may be obtained from the
Information Agent as set forth below, and will be furnished promptly at
Offeror's expense. You may also contact your broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue
20th Floor
New York, New York 10022
Toll Free (800) 566-9061
Banks and Brokerage Firms, please call:
(800) 662-5200
The Dealer Managers for the Offer are:
<TABLE>
<S> <C>
LAZARD FRERES & CO. LLC GOLDMAN, SACHS & CO.
30 Rockefeller Plaza 85 Broad Street
New York, New York 10020 New York, New York 10004
(212) 632-6717 (call collect) (800) 323-5678
</TABLE>
<PAGE>
<PAGE>
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
AMP INCORPORATED
PURSUANT TO THE OFFER TO PURCHASE
DATED AUGUST 10, 1998
BY
PMA ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
ALLIEDSIGNAL INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, SEPTEMBER 11, 1998, UNLESS THE OFFER IS EXTENDED.
The Depositary:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile: By Hand/Overnight Courier:
Tender & Exchange Department (For Eligible Institutions Only) Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Confirm by telephone: Receive and Deliver Window
New York, N.Y. 10286-1248 1-800-507-9357 New York, N.Y. 10286
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS BY FACSIMILE, OTHER THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE A
VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE
SPACE THEREFOR PROVIDED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH
BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates for Shares
and, if applicable, Rights (as such terms are defined below) are to be forwarded
herewith or, unless an Agent's Message (as defined in Section 2 of the Offer to
Purchase) is utilized, if delivery of Shares and, if applicable, Rights is to be
made by book-entry transfer (in the case of Rights, if available) to an account
maintained by the Depositary at a Book-Entry Transfer Facility as defined in
Section 2 and pursuant to the procedures set forth in Section 3 of the Offer to
Purchase or delivery of Shares is to be made using DRS (as defined below).
UNLESS THE RIGHTS CONDITION (AS DEFINED IN THE OFFER TO PURCHASE) IS SATISFIED,
SHAREHOLDERS WILL BE REQUIRED TO TENDER ONE RIGHT FOR EACH SHARE TENDERED IN
ORDER TO EFFECT A VALID TENDER OF SHARES. UNLESS THE DISTRIBUTION DATE (AS
DEFINED IN THE OFFER TO PURCHASE) OCCURS, A TENDER OF SHARES WILL ALSO
CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS. Shareholders whose certificates
for Shares and, if applicable, Rights are not immediately available or who
cannot deliver either the certificates for, or a Book-Entry Confirmation (as
defined in Section 2 of the Offer to Purchase) with respect to, their Shares
and, if applicable, Rights and all other documents required hereby to the
Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to
Purchase) must tender their Shares and, if applicable, Rights in accordance with
the guaranteed delivery procedures set forth in Section 3 of the Offer to
Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER
FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARES TENDERED
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER
SHARE OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
TOTAL SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
If you hold your Shares through direct registration, check this box and write your DRS number and the number of Shares tendered
by DRS in space provided. [ ]
DRS Number ...................................................................
Number of Shares held through DRS ............................................
- ------------------------------------------------------------------------------------------------------------------------------------
*Need not be completed by stockholders tendering by book-entry transfer.
- ------------------------------------------------------------------------------------------------------------------------------------
**Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to the Depositary are
being tendered. See Instruction 4.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF RIGHTS TENDERED*
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) RIGHTS TENDERED
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER
RIGHTS OF RIGHTS NUMBER OF
CERTIFICATE REPRESENTED BY RIGHTS
NUMBER(S)** CERTIFICATE(S)** TENDERED***
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
TOTAL RIGHTS
- ------------------------------------------------------------------------------------------------------------------------------------
*Need not be completed if Distribution Date has not occurred.
**If the tendered Rights are represented by separate certificates, complete using the certificate numbers of such certificates
for Rights. If the tendered Rights are not represented by separate certificates, or if such certificates have not been
distributed, complete using the certificate numbers of the Shares with respect to which the Rights were issued. Shareholders
tendering Rights that are not represented by separate certificates should retain a copy of this description in order to
accurately complete the Notice of Guaranteed Delivery if the Distribution Date occurs.
***Unless otherwise indicated, it will be assumed that all Rights described above are being tendered. See Instruction 4.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution .............................................
Account No. ............................................................. at
[ ] The Depository Trust Company
Transaction Code No. .......................................................
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering Stockholder(s) .......................................
Date of Execution of Notice of Guaranteed Delivery .........................
Window Ticket Number (if any) ..............................................
Name of Institution which Guaranteed Delivery ..............................
If delivery is by book-entry transfer ......................................
Name of Tendering Institution ....................................
Account No. ...................................................... at
[ ] The Depository Trust Company .....................................
Transaction Code No. .................................................
4
<PAGE>
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to PMA Acquisition Corporation, a Delaware
corporation (the 'Offeror'), a wholly owned subsidiary of AlliedSignal Inc., a
Delaware corporation (the 'Parent'), the above-described shares of Common Stock,
without par value (the 'Shares'), of AMP Incorporated, a Pennsylvania
corporation (the 'Company'), together with an equal number of any associated
Common Stock Purchase Rights (the 'Rights') issued pursuant to the Shareholder
Rights Plan, dated October 25, 1989, between the Company and Chemical Bank
(successor to Manufacturers Hanover Trust) as Rights Agent, as amended
(the 'Rights Agreement'), 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 with any amendments or supplements thereto,
collectively constitute the 'Offer'), receipt of which is hereby acknowledged.
Upon the terms of the Offer, subject to, and effective upon, acceptance for
payment of, and payment for, the Shares and, if applicable, Rights tendered
herewith in accordance with the terms of the Offer, the undersigned hereby
sells, assigns and transfers to, or upon the order of, the Offeror all right,
title and interest in and to all the Shares and, if applicable, Rights that are
being tendered hereby (and any and all other Shares, Rights or other securities
or rights issued or issuable in respect thereof on or after August 10, 1998),
and irrevocably constitutes and appoints The Bank of New York (the
'Depositary'), the true and lawful agent and attorney-in-fact of the
undersigned, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to the full extent
of the undersigned's rights with respect to such Shares and, if applicable,
Rights (and any such other Shares, Rights or securities or rights), to (a)
deliver certificates for such Shares and Rights (and any such other Shares,
Rights or securities or rights) or transfer ownership of such Shares and Rights
(and any such other Shares, Rights or securities or rights) on the account books
maintained by a Book-Entry Transfer Facility together, in any such case, with
all accompanying evidences of transfer and authenticity to, or upon the order
of, the Offeror, (b) in the case of participants in the Direct Registration
System ('DRS'), to place a stop against the Shares held under DRS and,
following expiration of the Offer, to instruct the transfer agent to transfer
such Shares, (c) present such Shares and Rights (and any such other Shares,
Rights or securities or rights) for transfer on the Company's books and (d)
receive all benefits and otherwise exercise all rights of beneficial ownership
of such Shares and Rights (and any such other Shares, Rights or securities or
rights), all in accordance with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the tendered
Shares and, if applicable, Rights (and any and all other Shares, Rights or other
securities or rights issued or issuable in respect of such Shares or Rights on
or after August 10, 1998) and, when the same are accepted for payment by the
Offeror, the Offeror will acquire good title thereto, free and clear of all
liens, restrictions, claims and encumbrances, and the same will not be subject
to any adverse claim. The undersigned will, upon request, execute any additional
documents deemed by the Depositary or the Offeror to be necessary or desirable
to complete the sale, assignment and transfer of the tendered Shares and Rights
(and any and all other Shares, Rights or other securities or rights issued or
issuable in respect thereof on or after August 10, 1998).
THE UNDERSIGNED UNDERSTANDS THAT, UNLESS THE RIGHTS CONDITION IS SATISFIED,
SHAREHOLDERS WILL BE REQUIRED TO TENDER ONE RIGHT FOR EACH SHARE TENDERED IN
ORDER TO EFFECT A VALID TENDER OF SHARES IN ACCORDANCE WITH THE PROCEDURES SET
FORTH IN SECTION 3 OF THE OFFER TO PURCHASE. If the Distribution Date occurs and
separate certificates representing the Rights are distributed to holders of
Shares prior to the time Shares are tendered herewith, certificates representing
a number of Rights equal to the number of Shares being tendered herewith must be
delivered to the Depositary or, if available, a Book-Entry Confirmation must be
received by the Depositary with respect thereto, in order for such Shares
tendered herewith to be validly tendered. If the Distribution Date occurs and
separate certificates representing the Rights are not distributed prior to the
time Shares are tendered herewith, Rights may be tendered prior to a shareholder
receiving separate certificates for Rights by use of the guaranteed delivery
procedures described in Section 3 of the Offer to Purchase. A tender of Shares
constitutes an agreement by the tendering shareholder to deliver certificates
5
<PAGE>
<PAGE>
representing a number of Rights equal to the number of Shares tendered pursuant
to the Offer to the Depositary prior to expiration of the period permitted by
such guaranteed delivery procedures for delivery of certificates for, or a
Book-Entry Confirmation with respect to, Rights (the 'Rights Delivery Period').
However, after expiration of the Rights Delivery Period, the Offeror may elect
to reject as invalid a tender of Shares with respect to which certificates for,
or a Book-Entry Confirmation with respect to, an equal number of Rights has not
been received by the Depositary. Nevertheless, the Purchaser will be entitled to
accept for payment Shares tendered by the undersigned prior to the receipt of
the certificates for the Rights required to be tendered with such Shares, or a
Book-Entry Confirmation with respect to such Rights, and either (a), subject to
complying with the applicable rules and regulations of the Securities and
Exchange Commission, withhold payment for such Shares pending receipt of the
certificates for, or a Book-Entry Confirmation with respect to, such Rights or
(b) make payment for Shares accepted for payment pending receipt of the
certificates for, or a Book-Entry Confirmation with respect to, such Rights in
reliance upon the agreement of a tendering shareholder to deliver Rights and
such guaranteed delivery procedures. Any determination by the Offeror to make
payment for Shares in reliance upon such agreement and such guaranteed delivery
procedures or, after the expiration of the Rights Delivery Period, to reject a
tender as invalid will be made in the sole and absolute discretion of the
Offeror.
All authority conferred or agreed to be conferred pursuant to this Letter
of Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned hereby irrevocably appoints representatives of the Offeror
the attorneys-in-fact and proxies of the undersigned, each with full power of
substitution, to vote at any annual, special or adjourned meeting of the
Company's shareholders or otherwise in such manner as each such attorney-in-fact
and proxy or his substitute shall in his sole discretion deem proper with
respect to, to execute any written consent concerning any matter as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper with respect to, and to otherwise act as each such attorney-in-fact and
proxy or his substitute shall in his sole discretion deem proper with respect
to, the Shares and Rights tendered hereby that have been accepted for payment by
the Purchaser prior to the time any such action is taken and with respect to
which the undersigned is entitled to vote (and any and all other Shares, Rights
or other securities or rights issued or issuable in respect of such Shares and
Rights on or after August 10, 1998). This appointment is effective when, and
only to the extent that, the Offeror accepts for payment such Shares as provided
in the Offer to Purchase. This power of attorney and proxy are irrevocable and
are granted in consideration of the acceptance for payment of such Shares and
Rights in accordance with the terms of the Offer. Upon such acceptance for
payment, all prior powers of attorney, proxies and consents given by the
undersigned with respect to such Shares (other than any consents in favor of
proposals set forth in any consent solicitation commenced by the Offeror or
the Parent). Rights or other securities or rights will, without further action,
be revoked and no subsequent powers of attorney, proxies, consents or
revocations may be given (and, if given, will not be deemed effective) by the
undersigned.
The undersigned understands that the valid tender of Shares and, if
applicable, Rights pursuant to any of the procedures described in Section 3 of
the Offer to Purchase, and in the Instructions hereto will constitute a binding
agreement between the undersigned and the Offeror upon the terms and subject to
the conditions of the Offer. Without limiting the foregoing, if the price to be
paid in the Offer is amended in accordance with the Offer, the price to be paid
to the undersigned will be the amended price notwithstanding the fact that a
different price is stated in this Letter of Transmittal.
Unless otherwise indicated herein under 'Special Payment Instructions',
please issue the check for the purchase price and/or return any certificates for
Shares or Rights not tendered or accepted for payment in the name(s) of the
registered holder(s) appearing under 'Description of Shares Tendered' and
'Description of Rights Tendered', respectively. Similarly, unless otherwise
indicated under 'Special Delivery Instructions', please mail the check for the
purchase price and/or return any certificates for Shares or Rights not tendered
or accepted for payment (and accompanying documents, as appropriate) to the
address(es) of the registered holder(s) appearing under 'Description of Shares
Tendered' and
6
<PAGE>
<PAGE>
'Description of Rights Tendered', respectively. In the event that both the
Special Delivery Instructions and the Special Payment Instructions are
completed, please issue the check for the purchase price and/or return any
certificates for Shares or Rights not tendered or accepted for payment (and any
accompanying documents, as appropriate) in the name of, and deliver such check
and/or return such certificates (and any accompanying documents, as appropriate)
to, the person or persons so indicated. Unless otherwise indicated herein under
'Special Payment Instructions', please credit any Shares and Rights tendered
herewith by book-entry transfer that are not accepted for payment by crediting
the account at the Book-Entry Transfer Facility (as defined herein) designated
above. The undersigned recognizes that the Offeror has no obligation pursuant to
the Special Payment Instructions to transfer any Shares or Rights from the name
of the registered holder thereof if the Offeror does not accept for payment any
of the Shares or Rights, respectively, so tendered.
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares or
Rights purchased or certificates for Shares or Rights not tendered or not
purchased are to be issued in the name of someone other than the
undersigned, or if Shares or Rights tendered by book-entry transfer that
are not purchased are to be returned by credit to an account at one of the
Book-Entry Transfer Facilities other than that designated above.
Issue check and/or certificates to:
Name ....................................................................
(PLEASE PRINT)
Address .................................................................
..........................................................................
(ZIP CODE)
..........................................................................
(TAXPAYER IDENTIFICATION NO.)
(SEE SUBSTITUTE FORM W-9)
[ ] Credit unpurchased Shares or Rights tendered by book-entry transfer to
the account set forth below:
.........................................................................
NAME OF ACCOUNT PARTY
.........................................................................
ACCOUNT NO.
[ ] The Depository Trust Company
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares or
Rights purchased or certificates for Shares or Rights not tendered or not
purchased are to be mailed to someone other than the undersigned or to the
undersigned at an address other than that shown below the undersigned's
signature(s).
Mail check and/or certificates to:
Name ....................................................................
(PLEASE PRINT)
Address .................................................................
.........................................................................
(ZIP CODE)
.........................................................................
(TAXPAYER IDENTIFICATION NO.)
<PAGE>
<PAGE>
SIGN HERE
(COMPLETE SUBSTITUTE FORM W-9 BELOW)
............................................................................
............................................................................
SIGNATURE(S) OF OWNER(S)
............................................................................
Name(s) .....................................................................
............................................................................
Capacity (full title) .......................................................
Address .....................................................................
............................................................................
............................................................................
(INCLUDING ZIP CODE)
............................................................................
Area Code and Telephone Number ..............................................
Taxpayer Identification Number ..............................................
Dated: ............................................................... , 1998
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by the person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, agent, officer of a corporation or other person
acting in a fiduciary or representative capacity, please set forth full title
and see Instruction 5).
If a participant in the Direct Registration System ('DRS'), the person(s)
signing above hereby directs the Transfer Agent to place a stop against the
aforementioned number of Shares held through DRS pending the expiration of
the Offer. Upon expiration of the Offer, the Transfer Agent is further
directed to follow the directions for delivery to the Depositary.
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE
BELOW.
Authorized signature(s) .....................................................
Name ........................................................................
Name of Firm ................................................................
Address .....................................................................
............................................................................
(INCLUDING ZIP CODE)
Area Code and Telephone Number ..............................................
Dated: ............................................................... , 1998
8
<PAGE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------------------------------------
PAYOR'S NAME: THE BANK OF NEW YORK
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT PART III -- Social Security Number or
RIGHT AND CERTIFY BY SIGNING AND DATING BELOW Employer Identification
Number ________________________
(If awaiting TIN write 'Applied For')
------------------------------------------------------------------------------------------
FORM W-9 PART II -- For Payees exempt from backup withholding, see the enclosed Guidelines for
DEPARTMENT OF THE TREASURY Certification of Taxpayer Identification Number on Substitute Form W-9 and complete as
INTERNAL REVENUE SERVICE instructed therein.
Certification -- Under penalties of perjury, I certify that:
PAYOR'S REQUEST
FOR TAXPAYER (1) The number shown on this form is my correct TIN (or I am waiting for a number to
IDENTIFICATION be issued to me); and
NUMBER ('TIN')
(2) I am not subject to backup withholding either because I have not been notified by
the Internal Revenue Service (IRS) that I am subject to backup withholding as a result
of a failure to report all interest or dividends, or the IRS has notified me that
I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS -- You must cross out Item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding, you received another
notification from the IRS that you were no longer subject to backup withholding, do
not cross out item (2). (Also see instructions in the enclosed Guidelines).
------------------------------------------------------------------------------------------
SIGNATURE ....................................... DATE ..................................
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING YOUR TIN.
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a TIN has not been issued to me,
and either (1) I have mailed or delivered an application to receive a TIN to the
appropriate IRS Center or Social Security Administration Office or (2) I intend
to mail or deliver an application in the near future. I understand that if I do
not provide a TIN by the time of payment, 31% of all payments pursuant to the
Offer made to me thereafter will be withheld until I provide a number.
Signature ............................... Date ..............................
- --------------------------------------------------------------------------------
9
<PAGE>
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES.
No signature guarantee is required on this Letter of Transmittal (a) if
this Letter of Transmittal is signed by the registered holder(s) (which term,
for purposes of this Section, includes any participant in any of the Book-Entry
Transfer Facilities' systems whose name appears on a security position listing
as the owner of the Shares) of Shares and Rights tendered herewith, unless such
registered holder(s) has completed either the box entitled 'Special Payment
Instructions' or the box entitled 'Special Delivery Instructions' on the Letter
of Transmittal or (b) if such Shares and Rights are tendered for the account of
a financial institution (including most commercial banks, savings and loan
associations and brokerage houses) that is a participant in the Security
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (an
'Eligible Institution'). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES.
This Letter of Transmittal is to be completed by shareholders either if
certificates are to be forwarded herewith or, unless an Agent's Message (as
defined below) is utilized, if delivery of Shares and, if applicable, Rights is
to be made pursuant to the procedures for book-entry transfer set forth in
Section 3 of the Offer to Purchase or if delivery of Shares is to be made
pursuant to DRS. For a shareholder validly to tender Shares and Rights pursuant
to the Offer, either (a) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), together with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message, and
any other required documents, must be received by the Depositary at one of its
addresses set forth herein prior to the Expiration Date and either certificates
for tendered Shares and Rights must be received by the Depositary at one of such
addresses or Shares and Rights must be delivered pursuant to the procedures for
book-entry transfer set forth herein (and a Book-Entry Confirmation received by
the Depositary), in each case prior to the Expiration Date, or (b) the tendering
shareholder must comply with the guaranteed delivery procedures set forth below
and in Section 3 of the Offer to Purchase.
UNLESS THE RIGHTS CONDITION IS SATISFIED, SHAREHOLDERS WILL BE REQUIRED TO
TENDER ONE RIGHT FOR EACH SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF
SHARES. Unless the Distribution Date occurs, a tender of Shares will also
constitute a tender of the associated Rights. If the Distribution Date occurs
and separate certificates representing the Rights are distributed prior to the
time Shares are tendered herewith, certificates representing a number of Rights
equal to the number of Shares being tendered herewith must be delivered to the
Depositary or, if available, a Book-Entry Confirmation must be received by the
Depositary with respect thereto, in order for such Shares tendered herewith to
be validly tendered. If the Distribution Date occurs and separate certificates
representing the Rights are not distributed prior to the time Shares are
tendered herewith, Rights may be tendered prior to a shareholder receiving
separate certificates for Rights by use of the guaranteed delivery procedures
described below.
Shareholders whose certificates for Shares or Rights are not immediately
available (including because certificates for Rights have not yet been
distributed following the occurrence of a Distribution Date) or who cannot
deliver their certificates and all other required documents to the Depositary or
complete the procedures for book-entry transfer prior to the Expiration Date may
tender their Shares and Rights by properly completing and duly executing the
Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set
forth in Section 3 of the Offer to Purchase. Pursuant to such procedures, (a)
such tender must be made by or through an Eligible Institution, (b) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in the
form provided by the Offeror, must be received by the Depositary prior to the
Expiration Date and (c) the certificates for all tendered Shares and/or Rights,
in proper form for transfer (or a Book-Entry Confirmation with respect to all
such Shares and/or Rights), together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message, and
any other required documents are received by the Depositary within (a), in the
case of Shares, three trading days after the date of execution of such Notice of
Guaranteed Delivery or (b), in the case of Rights, a period ending on the later
of (1) three trading days after the date of execution of such Notice of
Guaranteed Delivery or (2) three business days (as defined in the Offer to
Purchase) after the date certificates for
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Rights are distributed to shareholders, all as provided in Section 2 of the
Offer to Purchase. A 'trading day' is any day on which the New York Stock
Exchange is open for business. Shareholders may not extend the foregoing time
period for delivery of Rights to the Depositary by providing a second Notice of
Guaranteed Delivery with respect to such Rights.
The term 'Agent's Message' means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgement from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
The signatures on this Letter of Transmittal cover the Shares and the
Rights tendered hereby whether or not such Rights are delivered simultaneously
with such Shares.
THE METHOD OF DELIVERY OF SHARES, RIGHTS, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. SHARES WILL
BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN
THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS
BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares or Rights will be purchased. All tendering shareholders, by
execution of this Letter of Transmittal (or facsimile thereof), waive any right
to receive any notice of the acceptance of their Shares or Rights for payment.
3. INADEQUATE SPACE.
If the space provided herein is inadequate, the certificate numbers and/or
the number of Shares or Rights should be listed on a separate schedule attached
hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER).
If fewer than all the Shares or Rights evidenced by any certificate
submitted are to be tendered, fill in the number of Shares or Rights that are to
be tendered in the box entitled 'Number of Shares Tendered' or 'Number of Rights
Tendered', as appropriate. In any such case, new certificate(s) for the
remainder of the Shares or Rights that were evidenced by the old certificate(s)
will be sent to the registered holder, unless otherwise provided in the
appropriate box on this Letter of Transmittal, as soon as practicable after the
acceptance for payment of, and payment for, the Shares and Rights tendered
herewith. All Shares and Rights represented by certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS.
If this Letter of Transmittal is signed by the registered holder of the
Shares and Rights tendered hereby, the signature must correspond with the name
as written on the face of the certificate(s) without any change whatsoever.
If any of the Shares or Rights tendered hereby are owned of record by two
or more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares or Rights are registered in different names on
several certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Offeror of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares and Rights listed and transmitted hereby, no endorsements of certificates
or separate stock powers are required unless payment or
11
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certificates for Shares or Rights not tendered or accepted for payment are to be
issued to a person other than the registered owner(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the certificates listed, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates. Signatures on such certificates or stock powers must be guaranteed
by an Eligible Institution.
6. STOCK TRANSFER TAXES.
The Offeror will pay any stock transfer taxes with respect to the transfer
and sale of Shares or Rights to it or its order pursuant to the Offer. If,
however, payment of the purchase price is to be made to, or if certificates for
Shares or Rights not tendered or accepted for payment are to be registered in
the name of, any person(s) other than the registered holder(s), or if tendered
certificates are registered in the name(s) of any person(s) other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder(s) or such person(s)) payable on
account of the transfer to such person(s) will be deducted from the purchase
price unless satisfactory evidence of the payment of such taxes or exemption
therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTION.
If a check is to be issued in the name of, and/or certificates for Shares
or Rights not accepted for payment are to be returned to, a person other than
the signer of this Letter of Transmittal or if a check is to be sent and/or such
certificates are to be returned to a person other than the signer of this Letter
of Transmittal or to an address other than that shown above, the appropriate
boxes on this Letter of Transmittal should be completed.
8. WAIVER OF CONDITIONS.
The Offeror reserves the absolute right in its sole discretion to waive any
of the specified conditions of the Offer, in whole or in part, in the case of
any Shares or Rights tendered.
9. 31% BACKUP WITHHOLDING.
In order to avoid 'backup withholding' of federal income tax on payments of
cash pursuant to the Offer, a shareholder surrendering shares in the Offer must,
unless an exemption applies, provide the Depositary with such shareholder's
correct taxpayer identification number ('TIN') on Substitute Form W-9 in this
Letter of Transmittal and certify under penalty of perjury that such TIN is
correct and that such shareholder is not subject to backup withholding. If a
shareholder does not provide such shareholder's correct TIN or fails to provide
the certifications described above, the Internal Revenue Service (the 'IRS') may
impose a $50 penalty on such shareholder and payment of cash to such shareholder
pursuant to the Offer may be subject to backup withholding of 31%.
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the Federal income tax liability
of the person subject to the backup withholding, provided that the required
information is given to the IRS. If backup withholding results in an overpayment
of tax, a refund can be obtained by the shareholder upon filing an income tax
return.
The shareholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares. If the Shares are held in more than one name or are not in the name of
the actual owner, consult the enclosed 'Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9' for additional guidance on which
number to report.
The box in Part III of the Substitute Form W-9 may be checked if the
tendering shareholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part III is
checked, the shareholder or other payee must also complete the Certificate of
Awaiting Taxpayer Identification Number below in order to avoid backup
withholding. Notwithstanding that the box in Part III is checked and the
Certificate of Awaiting Taxpayer Identification Number is completed, the
Depositary will withhold 31% on all
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<PAGE>
payments made prior to the time a properly certified TIN is provided to the
Depositary. However, such amounts will be refunded to such shareholder if a TIN
is provided to the Depositary within 60 days.
Certain shareholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign shareholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See the
enclosed 'Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9' for more instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions and requests for assistance or additional copies of the Offer to
Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and the
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 may be directed to the Information Agent or the Dealer Managers at
their respective addresses set forth below.
11. LOST, DESTROYED OR STOLEN CERTIFICATES.
If any certificate representing Shares or Rights has been lost, destroyed
or stolen, the shareholder should promptly notify the Depositary by checking the
box immediately preceding the special payment/special delivery instructions and
indicating the number of Shares or Rights lost. The shareholder will then be
instructed as to the steps that must be taken in order to replace the
certificate. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed certificates have
been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE COPY
HEREOF (TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND
ALL OTHER REQUIRED DOCUMENTS) OR NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED
BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO
PURCHASE).
IMPORTANT TAX INFORMATION
Under federal income tax law, a shareholder whose tendered Shares or Rights
are accepted for payment is required to provide the Depositary with such
stockholder's correct TIN on the Substitute Form W-9. If such shareholder is an
individual, the TIN is such stockholder's social security number. If the
Depositary is not provided with the correct TIN, the shareholder may be subject
to a $50 penalty imposed by the Internal Revenue Service. In addition, payments
that are made to such shareholder with respect to Shares purchased pursuant to
the Offer may be subject to backup withholding.
Certain shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that stockholder must submit a statement, signed under penalty of
perjury, attesting to that individual's exempt status. Such statements may be
obtained from the Depositary. All exempt recipients (including foreign persons
wishing to qualify as exempt recipients) should see the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If backup withholding results in an
overpayment of taxes, a refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding on payments that are made
to a stockholder with respect to Shares purchased pursuant to the Offer, the
stockholder is required to notify the Depositary of his or her correct TIN by
completing the form certifying that the TIN provided on the Substitute Form W-9
is correct.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares are in more than one name or are not in the name of the actual owner,
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 for additional guidelines on which number to
report.
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The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue
20th Floor
New York, New York 10022
Toll Free (800) 566-9061
Call Collect (212) 754-8000
(or)
Banks and Brokerage Firms.
Please Call:
(800) 662-5200
The Dealer Managers for the Offer are:
<TABLE>
<S> <C>
LAZARD FRERES & CO. LLC GOLDMAN, SACHS & CO.
30 Rockefeller Plaza 85 Broad Street
New York, New York 10020 New York, New York 10004
</TABLE>
August 10, 1998
14
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<PAGE>
<TABLE>
<S> <C>
LAZARD FRERES & CO. LLC GOLDMAN, SACHS & CO.
30 Rockefeller Plaza 85 Broad Street
New York, New York 10020 New York, New York 10004
</TABLE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(AND THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
AMP INCORPORATED
AT
$44.50 NET PER SHARE
BY
PMA ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
ALLIEDSIGNAL INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, SEPTEMBER 11, 1998, UNLESS THE OFFER IS EXTENDED.
August 10, 1998
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by PMA Acquisition Corporation, a Delaware
corporation (the 'Offeror'), a wholly owned subsidiary of AlliedSignal Inc., a
Delaware corporation ('Parent'), to act as financial advisors and Dealer
Managers in connection with Offeror's offer to purchase all of the outstanding
shares of common stock, without par value (the 'Shares'), and the associated
Common Stock Purchase Rights (the 'Rights'), of AMP Incorporated, a Pennsylvania
corporation (the 'Company'), at a purchase price of $44.50 per Share, net to the
seller in cash, without interest, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated August 10, 1998 (the 'Offer to
Purchase'), and in the related Letter of Transmittal (which together constitute
the 'Offer') enclosed herewith. Holders of Shares and, if applicable, Rights
whose certificates are not immediately available or who cannot deliver their
certificates and all other required documents to the Depositary (as hereinafter
defined) on or prior to the Expiration Date, or who cannot complete the
procedures for book-entry transfer on a timely basis, must tender their Shares
and, if applicable, Rights according to the guaranteed delivery procedures set
forth in Section 3 of the Offer to Purchase.
Holders of Shares will be required to tender one Right for each Share
tendered to effect a valid tender of a Share. Unless and until the Distribution
Date (as defined in Section 8 of the Offer to Purchase) occurs, the Rights are
represented by and transferred with the Shares. Accordingly, if the Distribution
Date does not occur prior to the Expiration Date of the Offer, a tender of
Shares will constitute a tender of the associated Rights. If a Distribution Date
has occurred, certificates representing a number of Rights equal to the number
of Shares being tendered must be delivered to the Depositary in order for the
Shares to be validly tendered in accordance with the procedures described in
Section 3 of the Offer to Purchase. If a Distribution Date has occurred, a
tender of Shares without Rights constitutes an agreement by the tendering
shareholder to deliver certificates representing a number of Rights equal to the
number of Shares tendered pursuant to the Offer to the Depositary within a
period ending on the later of (1) three New York Stock Exchange trading days
after the date of execution of the Notice of Guaranteed Delivery enclosed
herewith or (2) three business days after the date certificates
for Rights are distributed to shareholders, all as provided in Section 2 of the
Offer to Purchase. Offeror reserves the right to require that it receive these
certificates prior to accepting Shares for payment. Payment for Shares tendered
and purchased pursuant to the Offer will be made only after timely receipt by
the Depositary of, among other things, these certificates, if the certificates
have been distributed to holders of Shares. Offeror will not pay any additional
consideration for the Rights tendered pursuant to the Offer.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares in your name or in the name of your nominee.
<PAGE>
<PAGE>
THE OFFER IS CONDITIONED UPON THERE BEING VALIDLY TENDERED AND NOT
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES
REPRESENTING AT LEAST A MAJORITY OF ALL OF THE OUTSTANDING SHARES ON A FULLY
DILUTED BASIS. THE OFFER IS ALSO CONDITIONED UPON CERTAIN OTHER TERMS AND
CONDITIONS CONTAINED IN THE OFFER TO PURCHASE.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated August 10, 1998.
2. The Letter of Transmittal to tender Shares and, if applicable,
Rights for your use and for the information of your clients. Facsimile
copies of the Letter of Transmittal (with manual signatures) may be used to
tender Shares and, if applicable, Rights.
3. The Notice of Guaranteed Delivery for Shares and, if applicable,
Rights to be used to accept the Offer if neither of the two procedures for
tendering Shares and, if applicable, Rights set forth in the Offer to
Purchase can be completed on a timely basis.
4. A printed form of letter which may be sent to your clients for
whose accounts you hold Shares and/or Rights registered in your name or in
the name of your nominee, with space provided for obtaining such clients'
instructions with regard to the Offer.
5. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
6. Return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, SEPTEMBER 11, 1998, UNLESS THE
OFFER IS EXTENDED.
In order to accept the Offer, an appropriate duly executed and properly
completed Letter of Transmittal and any required signature guarantees, or an
Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry delivery of Shares and/or Rights and any other documents required by
the Letter of Transmittal should be sent to the Depositary and either Share and,
if applicable, Rights Certificates representing the tendered Shares and Rights
should be delivered to the Depositary, or, in the case of book-entry delivery of
Shares or Rights, such Shares or Rights should be tendered by book-entry
transfer into the Depositary's account maintained at one of the Book Entry
Transfer Facilities (as described in the Offer to Purchase), all in accordance
with the instructions set forth in the Letter of Transmittal and the Offer to
Purchase.
If holders of Shares and, if applicable, Rights wish to tender, but it is
impracticable for them to forward their Share and, if applicable, Rights
Certificates or other required documents on or prior to the Expiration Date or
to comply with the book-entry transfer procedures on a timely basis, a tender
may be effected by following the guaranteed delivery procedures specified in
Section 3 of the Offer to Purchase.
Offeror will not pay any commissions or fees to any broker, dealer or other
person (other than the Dealer Managers and the Information Agent, as described
in Offer to Purchase) for soliciting tenders of Shares and/or Rights pursuant to
the Offer. Offeror will, however, upon request, reimburse you for customary
clerical and mailing expenses incurred by you in forwarding any of the enclosed
materials to your clients. Offeror will pay or cause to be paid any stock
transfer taxes payable on the transfer of Shares and/or Rights to it, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed material may be obtained from, the
Dealer Managers or the Information Agent, at their respective addresses and
telephone numbers set forth on the back cover of the Offer to Purchase.
Very truly yours,
LAZARD FRERES & CO. LLC GOLDMAN, SACHS & CO.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PARENT, THE OFFEROR, THE DEPOSITARY, THE
INFORMATION AGENT OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER
PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN
CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS
CONTAINED THEREIN.
2
<PAGE>
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(AND THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
AMP INCORPORATED
AT
$44.50 PER SHARE
BY
PMA ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
ALLIEDSIGNAL INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, SEPTEMBER 11, 1998, UNLESS THE OFFER IS EXTENDED.
August 10, 1998
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated August 10,
1998 (the 'Offer to Purchase'), and the related Letter of Transmittal (which as
either may be amended or supplemented from time to time, collectively constitute
the 'Offer') relating to an offer by PMA Acquisition Corporation, a Delaware
corporation (the 'Offeror'), and a wholly owned subsidiary of AlliedSignal Inc.,
a Delaware corporation ('Parent'), to purchase all of the outstanding shares of
common stock, without par value (the 'Shares'), and the associated Common Stock
Purchase Rights (the 'Rights'), of AMP Incorporated, a Pennsylvania corporation
(the 'Company'), at a purchase price of $44.50 per Share, net to the seller in
cash (the 'Offer Price'), without interest, upon the terms and subject to the
conditions set forth in the Offer.
Holders of Shares will be required to tender one Right for each Share
tendered to effect a valid tender of a Share. Unless and until the Distribution
Date (as defined in Section 8 of the Offer to Purchase) occurs, the Rights are
represented by and transferred with the Shares. Accordingly, if the Distribution
Date does not occur prior to the Expiration Date of the Offer, a tender of
Shares will constitute a tender of the associated Rights. If a Distribution Date
has occurred, certificates representing a number of Rights equal to the number
of Shares being tendered must be delivered to the Depositary in order for the
Shares to be validly tendered in accordance with the procedures described in
Section 3 of the Offer to Purchase. If a Distribution Date has occurred, a
tender of Shares without Rights constitutes an agreement by the tendering
shareholder to deliver certificates representing a number of Rights equal to
the number of Shares tendered pursuant to the Offer to the Depositary within a
period ending on the later of (1) three (3) New York Stock Exchange trading
days after the date of execution of the Notice of Guaranteed Delivery enclosed
herewith or (2) three business days after the date certificates for Rights
are distributed to shareholders, all as provided in Section 2 of the Offer
to Purchase. Offeror reserves the right to require that it receive these
certificates prior to accepting Shares for payment. Payment for Shares tendered
and purchased pursuant to the Offer will be made only after timely receipt by
the Depositary of, among other things, these certificates, if the certificates
have been distributed to holders of Shares. Offeror will not pay any additional
consideration for the Rights tendered pursuant to the Offer.
If a shareholder desires to tender Shares and, if applicable, Rights
pursuant to the Offer and the shareholder's certificates for Shares and, if
applicable, Rights are not immediately available or time will not permit all
required documents to reach the Depositary on or prior to the Expiration Date or
the procedures for book-entry transfer cannot be completed on a timely basis,
these Shares and, if
<PAGE>
<PAGE>
applicable, Rights may nevertheless be tendered if all of the following
guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase
are followed.
This material is being forwarded to you as the beneficial owner of Shares
and, if applicable, Rights carried by us in your account but not registered in
your name.
A TENDER OF SUCH SHARES AND, IF APPLICABLE, RIGHTS CAN BE MADE ONLY BY US
AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF
TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY
YOU TO TENDER SHARES AND, IF APPLICABLE, RIGHTS HELD BY US FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to tender any
or all of the Shares and Rights held by us for your account, upon the terms and
conditions set forth in the Offer.
Please note the following:
1. The Offer Price is $44.50 per Share, net to the seller in cash,
without interest.
2. The Offer is being made for all of the outstanding Shares and, if
applicable, Rights.
3. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Friday, September 11, 1998, unless the Offer is
extended.
4. The Offer is conditioned upon there being validly tendered and not
withdrawn prior to the expiration of the Offer that number of Shares
representing at least a majority of all of the outstanding Shares on a
fully diluted basis. The Offer is also subject to the satisfaction of other
terms and conditions (see the Introduction, Section 1 and Section 15 of the
Offer to Purchase).
5. Tendering Shareholders will not be obligated to pay brokerage fees
or commissions or, except as set forth in the Letter of Transmittal, stock
transfer taxes on the transfer of Shares and, if applicable, Rights
pursuant to the Offer.
6. Payment for Shares and, if applicable, accepted for payment
pursuant to the Offer will be made only after timely receipt by The Bank of
New York (the 'Depositary') of (i) certificates for the Shares and,if
applicable, or timely confirmation of a book-entry transfer of the Shares
and/or Rights into the Depositary's account at The Depository Trust Company
(the 'Book-Entry Transfer Facility'), pursuant to the procedures set forth
in Section 3 of the Offer to Purchase, (ii) a properly completed and duly
executed Letter of Transmittal (or a manually signed facsimile) with all
required signature guarantees or, in the case of book-entry transfer of
Shares, if applicable, an Agent's Message (as defined in the Offer to
Purchase) in connection with a book-entry transfer and (iii) any other
documents required by the Letter of Transmittal.
If you wish to have us tender any or all of your Shares and, if applicable,
please so instruct us by completing, executing, detaching and returning to us
the instruction form contained in this letter. An envelope to return your
instruction to us is enclosed. If you authorize tender of your Shares and, if
applicable, Rights, all such Shares and, if applicable, Rights will be tendered
unless otherwise indicated in such instruction form. PLEASE FORWARD YOUR
INSTRUCTIONS TO US AS SOON AS POSSIBLE TO ALLOW US AMPLE TIME TO TENDER YOUR
SHARES ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
Offeror is not aware of any jurisdiction where the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid state
statue. If Offeror becomes aware of any valid state statute prohibiting the
making of the Offer or the acceptance of the Shares or Rights pursuant thereto,
Offeror will make a good faith effort to comply with such state statute. If,
after such good faith effort, the Offeror cannot comply with any such state
statute, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) the holders of Shares or Rights in such state. In any jurisdiction
where the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of
Offeror by the Dealer Managers (as defined in the Offer to Purchase) or one or
more registered brokers or dealers which are licensed under the laws of such
jurisdiction.
2
<PAGE>
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK
(AND THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
AMP INCORPORATED
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated August 10, 1998 (the 'Offer to Purchase'), and the
related Letter of Transmittal (which, together with any amendments or
Supplements thereto, collectively constitute the 'Offer') in connection with the
offer by PMA Acquisition Corporation (the 'Offeror'), a Delaware corporation and
a wholly owned subsidiary of AlliedSignal Inc., a Delaware Corporation
('Parent'), to purchase all outstanding shares of Common Stock, without par
value (the 'Common Stock'), and the associated Common Stock Purchase Rights (the
'Rights'), of AMP Incorporated, a Pennsylvania corporation (the 'Company'), at a
purchase price of $44.50 per Share and, if applicable, Rights, in each case net
to the seller in cash, without interest thereon, in each case upon the terms and
subject to the conditions set forth in the Offer to Purchase.
This will instruct you to tender to the Offeror the number of shares of
Common Stock and, if applicable, Rights, indicated below (or if no number is
indicated below, all shares of Common Stock and, if applicable, Rights) which
are held by you for the account of the undersigned, upon the terms and subject
to the conditions set forth in the Offer.
Number of Shares and, if applicable, Rights to be Tendered: Shares
Unless otherwise indicated, it will be assumed that you instruct us to
tender all Shares and/or Rights held by us for your account.
- --------------------------------------------------------------------------------
SIGN HERE
Signature(s) ..................................................................
(Print Name(s)) ...............................................................
(Print Address(es)) ...........................................................
(Area Code and Telephone Number(s)) ...........................................
(Taxpayer Identification or Social Security Number(s)) ........................
- --------------------------------------------------------------------------------
3
<PAGE>
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF ALL OUTSTANDING SHARES OF COMMON STOCK
(AND ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
AMP INCORPORATED INC.
TO
PMA ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
ALLIEDSIGNAL INC.
This Notice of Guaranteed Delivery, or one substantially equivalent hereto,
must be used to accept the Offer (as defined below) if certificates for shares
of common stock, without par value (the 'Shares'), and the associated Common
Stock Purchase Rights (the 'Rights'), of AMP Incorporated, a Pennsylvania
corporation (the 'Company'), are not immediately available or if the procedure
for book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Depositary on or prior to the
Expiration Date (as defined in the Offer to Purchase). Such form may be
delivered by hand or facsimile transmission, or mailed to the Depositary. See
Section 3 of the Offer to Purchase, dated August 10, 1998 (the 'Offer to
Purchase').
The Depositary for the Offer is:
THE BANK OF NEW YORK
------------------------
<TABLE>
<S> <C> <C>
By Mail: By Facsimile: By Hand/Overnight Courier:
Tender & Exchange Department (For Eligible Institutions Only) Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Confirm by telephone: Receive and Deliver Window
New York, N.Y. 10286-1248 1-800-507-9357 New York, N.Y. 10286
</TABLE>
------------------------
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
TRANSMISSION OF INSTRUMENTS BY FACSIMILE, OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an 'Eligible Institution' under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal or an
Agent's Message and certificates for Shares to the Depositary within the time
period shown herein. Failure to do so could result in a financial loss to such
Eligible Institution.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE>
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to PMA Acquisition Corporation, a Delaware
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase, and the related Letter of Transmittal, if applicable (which
together constitute the 'Offer'), receipt of which is hereby acknowledged,
Shares and, if applicable, Rights of the Company, pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase.
Number of Shares and, if applicable, Rights:....................................
...............................................................................
Certificate No(s) (if available):
...............................................................................
...............................................................................
If Shares and, if applicable, Rights will be
tendered by book-entry transfer:................................................
Name of Tendering Institutions
...............................................................................
Account No.:................................................................ at
[ ] The Depository Trust Company
SIGN HERE
Name(s) of Record Holders:
...............................................................................
...............................................................................
(PLEASE PRINT)
Address:........................................................................
...............................................................................
(ZIP CODE)
Area Code and Telephone No.:
...............................................................................
Signature(s):...................................................................
...............................................................................
2
<PAGE>
<PAGE>
THE GUARANTEE BELOW MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a bank, broker, dealer, credit union, savings association
or other entity which is a member in good standing of the Securities Transfer
Agents Medallion Program or a bank, broker, dealer, credit union, savings
association or other entity which is an 'eligible guarantor institution,' as
such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934,
as amended, guarantees the delivery to the Depositary of the Shares and, if
applicable, Rights tendered hereby, together with a properly completed and duly
executed Letter of Transmittal (or manually signed facsimile(s) thereof) and any
other required documents, or an Agent's Message (as defined in the Offer to
Purchase) in the case of a book-entry delivery of Shares and, if applicable,
Rights, (a) in the case of Shares, three New York Stock Exchange trading days
after the date hereof, or (b) in the case of Rights, a period ending on the
later of (1) three trading days after the date of execution hereof or (2) three
business days after the date certificates for Rights are distributed to
shareholders, all as provided in Section 2 of the Offer to Purchase all within
three (3) New York Stock Exchange trading days of the date hereof.
<TABLE>
<S> <C>
Name of Firm:......................................... Title:................................................
...................................................... Name:.................................................
(AUTHORIZED SIGNATURE) (PLEASE PRINT OR TYPE)
Address............................................... Area Code and Telephone No.:..........................
</TABLE>
DO NOT SEND CERTIFICATES FOR SHARES AND, IF APPLICABLE, RIGHTS WITH THIS
NOTICE OF GUARANTEED DELIVERY.
CERTIFICATES FOR SHARES AND, IF APPLICABLE, RIGHTS SHOULD BE SENT WITH YOUR
LETTER OF TRANSMITTAL.
Dated: ......................... 1998
3
<PAGE>
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
GIVE THE TAXPAYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF --
- -----------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of the
account) account or, if combined
funds, the first
individual on the
account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. A.The usual revocable savings The grantor- trustee(1)
trust (grantor is also
trustee)
B.So-called trust account that The actual owner(1)
is not a legal or valid
trust under state law
5. Sole proprietorship The owner(3)
6. A valid trust, estate, or The legal entity (Do not
pension trust furnish the identifying
number of the personal
representative or
trustee unless the legal
entity itself is not
designated in the
account title.)(4)
<CAPTION>
GIVE THE TAXPAYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF --
- -----------------------------------------------------
<S> <C>
7. Corporate account The corporation
8. Religious, charitable, or The organization
educational organization
account
9. Partnership account The partnership
10. Association, club, or other The organization
tax-exempt organization
11. A broker or registered The broker or nominee
nominee
12. Account with the Department The public entity
of Agriculture in the name of
a public entity (such as a
state or local government,
school district, or prison)
that receives agricultural
program payments
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has an SSN, that person's number must be
furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show your individual name. You may also enter your business or 'doing
business as' name. You may use either your social security number or your
employer identification number.
(4) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name listed, the number
will be considered to be that of the first name listed.
<PAGE>
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
NOTE: SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE
UNLESS OTHERWISE NOTED.
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service (the 'IRS') and apply for a
number.
PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, payees listed in
items (1) through (13) and a person registered under the Investment Advisors Act
of 1940 who regularly acts as a broker are exempt. Payments subject to reporting
under sections 6041 and 6041A are generally exempt from backup withholding only
if made to payees described in items (1) through (7), except a corporation
(other than certain hospitals described in Regulations section 1.6041-3(c)) that
provides medical and health care services or bills and collects payments for
such services is not exempt from backup withholding or information reporting.
Only payees described in items (1) through (5) are exempt from backup
withholding for barter exchange transactions and patronage dividends.
(1) An organization exempt from tax under section 501(a), or an IRA, or a
custodial account under section 403(b)(7), if the account satisfies the
requirements of section 401(f)(2).
(2) The United States or any of its agencies or instrumentalities.
(3) A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.
(4) A foreign government or any of its political subdivisions, agencies or
instrumentalities.
(5) An international organization or any of its agencies or instrumentalities.
(6) A corporation.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United
States, the District of Columbia or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures Trading
Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the Investment
Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in the
most recent publication of the American Society of Corporate Secretaries,
Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
Payments of dividends and patronage dividends that generally are exempt from
backup withholding include the following:
Payments to nonresident aliens subject to withholding under section 1441.
Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
Payments of patronage dividends not paid in money.
Payments made by certain foreign organizations.
Section 404(k) payments made by an ESOP.
Payments of interest that generally are exempt from backup withholding include
the following:
Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid in
the course of the payer's trade or business and you have not provided your
correct taxpayer identification number to the payer.
Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
Payments described in section 6049(b)(5) to nonresident aliens.
Payments on tax-free covenant bonds under section 1451.
Payments made by certain foreign organizations.
Payments of mortgage interest to you.
Exempt payees described above should file substitute Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE 'EXEMPT' ON THE FACE OF THE FORM, SIGN AND
DATE THE FORM AND RETURN IT TO THE PAYER. IF YOU ARE A NON-RESIDENT ALIEN OR A
FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED
INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Payments that are not subject to information reporting are also not subject to
backup withholding. For details, see sections 6041, 6041A, 6042, 6044, 6045,
6049, 6050A and 6050N and the regulations promulgated thereunder.
PRIVACY ACT NOTICE. Section 6109 requires most recipients of dividends,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must generally withhold 31% of taxable interest,
dividends and certain other payments to a payee who does not furnish a taxpayer
identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. If you fail
to furnish your correct taxpayer identification number to a requester, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. If you make
a false statement with no reasonable basis which results in no imposition of
backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
[ ] By checking this box, all Old Debentures held by you for our account will be
tendered in the Exchange Offer. If fewer than all Old Debentures are to be
tendered, we have checked the box below and indicated the principal amount of
Old Debentures to be tendered by you.
[ ] $ _________Old Debentures*
* Unless otherwise indicated, it will be assumed that all such Old Debentures
are to be tendered.
<PAGE>
<PAGE>
EXHIBIT (a)(7)
A NEW SEGMENT
Why? More Diversity -- Ability to Deliver
Consistent Earnings Growth
Characteristics of Search:
Strong Fundamental Growth
Good Margins
Not Capital Intensive
Leadership Position
Manufacturing and Technology Base
Broadening Our Portfolio Makes Sense
-1-
<PAGE>
<PAGE>
AMP OVERVIEW
<TABLE>
<CAPTION>
Businesses
<S> <C>
[SEVEN PHOTOS OF ELECTRICAL Electrical Connection Devices for
CONNECTION DEVICES] the Following Industries:
Consumer & Industrial
Telecommunications
Automotive
Personal Computers
1998 Statistics Strengths
Sales $5.4B Leading Market Position
Op. Margins ~9% Global
EPS $1.50 Diverse Markets
Market Cap ~6.5B Strong Technical Capabilities
</TABLE>
World's Leading Manufacturer of Electrical & Electronic Connection Devices
-2-
<PAGE>
<PAGE>
TERMINALS & CONNECTORS ("T&C") MARKET
Industry Growth Rate
$25B Market 5 Year Average -- 9%
[BAR GRAPH SHOWING INDUSTRY GROWTH RATE]
1994 -- 13%
1995 -- 17%
1996 -- 5%
1997 -- 8%
1998 -- 4%
Source: Bishop & associates, inc.
Large Growing Industry
-3-
<PAGE>
<PAGE>
TERMINALS & CONNECTORS INDUSTRY
<TABLE>
<S> <C>
Sales by Industry Sales by Region
[PIE GRAPH SHOWING SALES [PIE GRAPH SHOWING SALES BY
BY INDUSTRY] REGION]
Industrial & Consumer -- 45% North America -- 38%
Computer/Peripherals -- 25% Asia -- 30%
Telecom -- 15% Europe -- 26%
Automotive -- 15% ROW -- 6%
</TABLE>
$25B Market
Value Added Market an Additional $25B -- $30B
Diverse And Global
-4-
<PAGE>
<PAGE>
AMP'S SHARE OF T&C SALES
[BAR GRAPH SHOWING EACH COMPANY'S SHARE OF
TERMINAL AND CONNECTOR SALES]
<TABLE>
<S> <C>
AMP 20%
Molex 6%
Framatome 4%
Berg 3%
Thomas & Betts 3%
Amphenol 3%
3M 3%
</TABLE>
Leading Global Position In Fragmented Market
-5-
<PAGE>
<PAGE>
AMP'S REVENUE COMPOSITION
1998 = $5.4B
<TABLE>
<S> <C>
Sales by Industry Sales by Region
[PIE GRAPH SHOWING SALES [PIE GRAPH SHOWING SALES
BY INDUSTRY] BY REGION]
Consumer & Industrial -- $1.6B Americas -- 50%
Automotive -- $1.4B Europe -- 30%
Telecom -- $1.4B Asia/Pacific -- 20%
Personal Computer -- $1.0B
</TABLE>
77% T&C; 14% Value Added; 9% M/A -- Com
Over 15,000 Patents Issued or Pending
90,000 Customers in 145 Countries
Wide Range Of Product Offerings To Diverse Industries
-6-
<PAGE>
<PAGE>
AMP OPPORTUNITIES
Peer Revenue Comparison
- -----------------------
(1998 Projected Growth
[BAR GRAPH SHOWING A
COMPARISON OF AMP'S
PROJECTED 1998
GROWTH WITH THOSE
OF OTHER COMPANIES]
<TABLE>
<CAPTION>
Peer Group Margins
------------------
1994 1998 Chg.
---- ---- ---
<S> <C> <C> <C> <C> <C>
AMP (5.8%)
Amphenol 3% AMP 16.1% 9.4% (6.7 pts)
Berg 5% Peer Avg. 12.1% 14.6% +2.5 pts
Molex 6% Amphenol 15.0% 17.0% +2.0 pts
Thomas & Betts 8% Molex 16.3% 16.3% --
Peer Avg. 5.5% Thomas & Betts 9.4% 12.5% +3.1pts
Berg 7.8% 12.6% +4.8pts
</TABLE>
Underperforming Its Peers
-7-
<PAGE>
<PAGE>
AMP OPPORTUNITIES
Market Value ($B)
[LINE GRAPH COMPARING THE MARKET CAPITALIZATION OF AMP TO THE SUM OF THE
MARKET CAPITALIZATIONS OF ITS INDUSTRY PEERS AT THREE MONTH INTERVALS BEGINNING
JUNE 1996 AND ENDING JUNE 1998 (ALL DOLLAR AMOUNTS ARE APPROXIMATE). THE GRAPH
ALSO INCLUDES THE COMPOUND ANNUAL GROWTH RATES OF AMP (-13%) AND OF THE SUM OF
ITS INDUSTRY PEERS OVER THE SAME PERIOD.]
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Peer Group 6.5B 7.5B 8B 7.7B 9.3B 10.8B 10B 10.1B 8.5B
AMP 8.8B 8.5B 8.4B 7.7B 9.3B 12B 9.4B 9.6B 6.4B
6/96 9/96 12/96 3/97 6/97 9/97 12/97 3/98 6/98
</TABLE>
Market Recognizes Need For Change
-8-
<PAGE>
<PAGE>
ALD PERFORMANCE
<TABLE>
<CAPTION>
Earnings Per Share Market Value
- ------------------ ------------
<S> <C>
[LINE GRAPH SHOWING GROWTH IN [LINE GRAPH COMPARING ALD'S
ACTUAL EARNINGS PER SHARE FOR MARKET VALUE GROWTH VS. THE
1992 THROUGH 1997, INCLUDING S & P 500 MARKET VALUE GROWTH
AN ESTIMATE FOR 1998. EARNINGS PER FOR 1990 TO 1998. OVER THIS
SHARE IS EXPECTED TO INCREASE PERIOD, ALD'S MARKET VALUE HAS
FROM $0.96 IN 1992 TO INCREASED 6 FOLD FROM
APPROXIMATELY $2.30 TO $2.34 $4 BILLION TO $25 BILLION WHILE
IN 1998] THE MARKET VALUE OF THE S & P
500 HAS INCREASED 3.4 FOLD]
</TABLE>
26 Qtrs of 14%+ Growth
Consistency Drives Market Value
-9-
<PAGE>
<PAGE>
ALD PRODUCTIVITY PERFORMANCE
<TABLE>
<CAPTION>
Total Productivity Cost Productivity
- ------------------ -----------------
<S> <C>
[LINE GRAPH SHOWING [GRAPH SHOWING THE COMPONENTS OF
TOTAL PRODUCTIVITY AND COST PRODUCTIVITY FROM 1992 TO 1997.
THE BREAKDOWN BETWEEN IN 1992, CENSUS, REPOSITIONING AND
GROWTH PRODUCTIVITY AND MATERIAL SAVINGS COMPRISED MOST OF
COST PRODUCTIVITY FROM COST PRODUCTIVITY. OVER TIME, COST
1992 TO 1997] PRODUCTIVITY HAS INCREASINGLY COME
FROM SIX SIGMA SAVINGS COMPARED TO
CENSUS, REPOSITIONING AND MATERIAL
SAVINGS]
</TABLE>
Total Productivity
Average 5.9%
Since '92
<TABLE>
<CAPTION>
1990 1998
---- ----
<S> <C> <C> <C>
Sales/Employees $117K $200K [UP ARROW] 71%
Suppliers [MORE THAN] 10,000 [LESS THAN] 3,000 [DOWN ARROW] 70%
</TABLE>
Proven Record Of Productivity
-10-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
ALD SIX SIGMA JOURNEY
Manufacturing Quality vs. COPQ ALD Operating Margins
- ------------------------------ ---------------------
<S> <C>
[LINE GRAPH SHOWING [LINE GRAPH SHOWING ALD
IMPROVEMENT IN THE DEFECT OPERATING MARGINS INCREASING
RATE OF MANUFACTURING FROM 5% IN 1991 TO 13% IN 1998,
PROCESSES FROM 1992 (2 SIGMA) AN INCREASE OF 800 BASIS POINTS]
TO 1998 (4+ SIGMA), RESULTING
IN COST SAVINGS OF $2 BILLION
OVER THAT PERIOD]
</TABLE>
Significant Progress, Trained Resources
-11-
<PAGE>
<PAGE>
ESTIMATED MARGIN IMPROVEMENT
[BAR GRAPH]
<TABLE>
<S> <C> <C> <C> <C> <C>
AMP
$4.2B $5.4B +8% Sales Growth After 1999 $6.5B
Op. Income 15% 9% 18% Cost
$630M $495M $1170M Takeout
SG&A 18% 21% Corporate Overhead 17% $185M
$760M $1130M Shared Services $1105M
Cost of 67% 70% Six Sigma/Productivity 65% $280M
Goods Sold $2810M $3775M Purchasing $4225M
Plant Rationalization
1993-1995 1998 2001
AVG
</TABLE>
Growth & Productivity Will Improve Margins
Beyond Historic Level
-12-
<PAGE>
<PAGE>
AMP OPERATING MARGIN EXPANSION
[BAR GRAPH SHOWING AN ACTUAL AND
PROJECTED OPERATING MARGIN EXPANSION]
<TABLE>
<CAPTION>
Productivity &
Synergies
<C> <C> <C> <C> <C> <C>
15% 9% +2% +4% +3% 18%
'93-'95 1998 Volume/ Manufacturing Corporate 2001
Average Price Productivity Overhead &
Shared Svcs.
</TABLE>
Growth & Productivity Will Improve Margins
Beyond Historic Levels
-13-
<PAGE>
<PAGE>
ALD AND AMP
<TABLE>
<CAPTION>
What AMP Brings to ALD What ALD Brings to AMP
- ---------------------- ----------------------
<S> <C>
High Growth Industry Strong Management Team
Industry Leadership Productivity
Global Six Sigma
Product Differentiation Size and Scale
Technological Leadership Financial Consistency
</TABLE>
Ideal Combination
-14-
<PAGE>
<PAGE>
ALD and AMP -- $21B
1998 Pro-Forma
[PIE GRAPH]
<TABLE>
<S> <C>
Connectors $5.4
Spec Chem & Electronic Solutions $2.4
Performance Polymers $2.0
Aerospace Systems $4.9
Transportation Products $2.5
Turbine Technologies $3.9
Broad Product Offering High Growth
Diverse Customer Base High Margin Businesses
Globally Positioned Consistency
</TABLE>
Breadth Of Products And Geographical Diversity Drives Consistency
-15-
<PAGE>
<PAGE>
THE DEAL STRUCTURE
Cash Tender -- $44.50 Per Share
Funded by:
- Debt
- Internally Generated Cash Flow
- Asset Sales
- Secondary Equity Offering
Anticipated Closing -- 12/31/98
Funding Available
-16-
<PAGE>
<PAGE>
EARNINGS PER SHARE
[BAR GRAPH SHOWING THE OVERALL POSITIVE PROJECTED EFFECTS OF EACH OF ALD'S
BUSINESS GROWTH, THE ADDITION OF THE AMP BUSINESS, THE LOSS OF GOODWILL, THE
LOSS DUE TO FINANCING AND THE GAINS ON DISPOSITIONS ON THE EARNINGS PER SHARE OF
A COMBINED ALD/AMP]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Equity
Debt
$2.30-$2.34 +$0.30-$0.35 +$0.83 -$0.32 -$0.78 +$0.27 $2.60-$2.65
1998 ALD Business AMP Goodwill Financing Gains on 1999
Growth Business Dispositions
</TABLE>
[LINE GRAPH SHOWING A COMPARISON OF THE PROJECTED GROWTH RATE
OF EARNINGS PER SHARE OF ALD AND THE COMBINED ALD/AMP FROM 1998 TO 2001]
<TABLE>
<CAPTION>
Combined Includes
Disposition Gains
<S> <C> <C> <C> <C>
ALD $2.30-$2.34 13% 15% 15%
COMBINED $2.30-$2.34 13% 15% 18%
1998 1999 2000 2001
</TABLE>
No Net Dilution
-17-
<PAGE>
<PAGE>
FREE CASH FLOW
[LINE GRAPH SHOWING A PROJECTED FREE CASH FLOW FOR
ALD AND THE COMBINED ALD/AMP FROM 1998 TO 2001]
<TABLE>
<CAPTION>
Combined ALD
-------- ---
<S> <C> <C>
1998 $500 $500
1999 $500 $625
2000 $800 $780
2001 $1,300 $980
</TABLE>
Improves Cash Flow
-18-
<PAGE>
<PAGE>
ALD DEBT/CAPITAL
[BAR GRAPH SHOWING A PROJECTION OF ALD'S DEBT-TO-CAPTIAL RATIO
FROM DECEMBER 1998 TO DECEMBER 2001]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
67%
[Increase [Decrease resulting from 47%
resulting contemplated 1998 asset sales
from the ($2B), proceeds of a 39%
incurrence contemplated 1998 equity
of $10.2B offering ($1.5B), free cash flow 29%
21% of debt] and suspension of share
repurchase]
12/98 12/98 12/99 12/01 12/00
ALD Combined
</TABLE>
Manageable Transaction
-19-
<PAGE>
<PAGE>
PORTFOLIO IMPROVEMENT
<TABLE>
<S> <C> <C>
1999 1999 2001
(Without AMP) (With AMP) (Includes AMP)
[PIE GRAPH] [PIE GRAPH] [PIE GRAPH]
High Growth 67% High Growth 75% High Growth 85%
High Margin High Margin High Margin
$16.5B $22B $26B
</TABLE>
Accelerates Transformation
-20-
<PAGE>
<PAGE>
CONTINUED EVOLUTION OF ALLIED SIGNAL
Market Leadership in High Margin Growth Businesses
Broader, More Global, More Diverse
Breadth of Markets
Cost Take-out Opportunities
High Margin, High Growth Segments
Enhanced Ability For Financial Consistency
ALD And AMP Combine To Form A Premier Company
-21-
<PAGE>
<PAGE>
================================================================================
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares or Rights. The Offer is made solely by the Offer to Purchase
dated August 10, 1998 and the related Letter of Transmittal and is not being
made to (nor will tenders be accepted from or on behalf of) holders of Shares or
Rights in any jurisdiction in which the making of the Offer or the acceptance
thereof would not be in compliance with the laws of such jurisdiction. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of the Purchaser by Lazard Freres & Co. LLC and Goldman, Sachs & Co. or
one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
AMP INCORPORATED
AT
$44.50 NET PER SHARE
BY
PMA ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
ALLIEDSIGNAL INC.
PMA Acquisition Corporation, a Delaware corporation (the "Purchaser"),
which is a wholly owned subsidiary of AlliedSignal Inc., a Delaware corporation
(the "Parent"), is offering to purchase all outstanding shares of common stock,
without par value (the "Shares"), of AMP Incorporated, a Pennsylvania
corporation (the "Company"), including the associated Common Stock Purchase
Rights (the "Rights") issued pursuant to the Shareholder Rights Plan, dated as
of October 15, 1989, between the Company and Manufacturers Hanover Trust and the
Amendment Rights Agreement, dated September 4, 1992, between the Company and
Chemical Bank, at a price of $44.50 per Share, net to the seller in cash without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated August 10, 1998 and in the related Letter of Transmittal
(which, as either may be amended or supplemented from time to time, collectively
constitute the "Offer"). Unless the content otherwise requires, all references
herein to Shares shall include the Rights, and all references to the Rights
include the benefits that may inure to holders of the Rights pursuant to the
Rights Agreements referred to above, including the right to receive payment due
upon redemption of the Rights.
The purpose of the Offer is to enable the Purchaser to acquire control of
and the entire equity interest in the Company.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME,
ON FRIDAY, SEPTEMBER 11, 1998, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES REPRESENTING AT LEAST A MAJORITY OF ALL OF THE OUTSTANDING SHARES ON A
FULLY DILUTED BASIS; (2) THE RIGHTS HAVING BEEN REDEEMED BY THE COMPANY'S BOARD
OF DIRECTORS OR THE PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE
RIGHTS HAVE BEEN INVALIDATED OR ARE OTHERWISE INAPPLICABLE TO THE OFFER AND THE
PROPOSED MERGER; (3) THE ACQUISITION OF SHARES PURSUANT TO THE OFFER HAVING BEEN
APPROVED PURSUANT TO CHAPTER 25, SUBCHAPTER F OF THE PENNSYLVANIA BUSINESS
CORPORATION LAW (THE "BUSINESS COMBINATION STATUTE") OR THE PURCHASER BEING
SATISFIED, IN ITS SOLE DISCRETION, THAT THE BUSINESS COMBINATION STATUTE IS
INVALID OR OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER; (4) THE
PURCHASER HAVING BEEN ACCORDED THE RIGHT TO VOTE THE SHARES ACQUIRED BY IT
PURSUANT TO THE OFFER UNDER CHAPTER 25, SUBCHAPTER G OF THE PENNSYLVANIA
BUSINESS CORPORATION LAW; AND (5) ANY APPLICABLE WAITING PERIOD UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976 HAVING EXPIRED OR
TERMINATED PRIOR TO THE EXPIRATION OF THE OFFER.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not withdrawn,
if and when the Purchaser gives oral or written notice to The Bank of New York
(the "Depositary") of its acceptance of the Shares for payment pursuant to the
Offer. In all cases, upon the terms and subject to the conditions of the Offer,
payment for Shares purchased pursuant to the Offer will be made by deposit of
the purchase price with the Depositary, which will act as agent for tendering
shareholders for the purpose of receiving payments from the Purchaser and
transmitting the payments to validly tendering shareholders. Payment for Shares
accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of (i) certificates for the Shares or timely
Book-Entry Confirmation (as defined in the Offer to Purchase) of a book-entry
transfer of the Shares into the Depositary's account at a Book-Entry Transfer
Facility (as defined in the Offer to Purchase) and, if the Distribution Date (as
defined in the Offer to Purchase) occurs, certificates for the associated Rights
or timely Book-Entry Confirmation of such Rights, (ii) a properly completed and
duly executed Letter of Transmittal (or a manually signed facsimile) with all
required signature guarantees or an Agent's Message (as defined in the Offer to
Purchase) in connection with a book-entry transfer of Shares and (iii) any other
documents required by the Letter of Transmittal. Under no circumstances will
interest on the purchase price for Shares be paid by the Purchaser, regardless
of any extension of the Offer or any delay in making payment.
Except as otherwise provided below, tenders of Shares (and, if applicable
Rights) made pursuant to the Offer are irrevocable. Shares tendered pursuant to
the Offer may be withdrawn at any time prior to the Expiration Date and, unless
theretofore accepted for payment pursuant to the Offer, may also be withdrawn at
any time after September 11, 1998. Shares may not be withdrawn unless the
associated Rights are also withdrawn. For a withdrawal to be effective, a
written, telegraphic, telex or facsimile transmission notice of withdrawal must
be timely received by the Depositary at one of its addresses set forth on the
back page of the Offer to Purchase. Any notice of withdrawal must specify the
name of the person who tendered the Shares to be withdrawn, the number of Shares
to be withdrawn and the name in which the certificates representing Shares are
registered, if different from that of the person who tendered the Shares. If
certificates for Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of these
certificates, the serial numbers on these certificates must be submitted to the
Depositary and, unless the Shares have been tendered by an Eligible Institution
(as defined in the Offer to Purchase), the signatures on the notice of
withdrawal must be guaranteed by an Eligible Institution. If Shares have been
tendered pursuant to the procedure for book-entry transfer set forth in Section
3 of the Offer to Purchase, any notice of withdrawal must also specify the name
and number of the account at the applicable Book-Entry Transfer Facility to be
credited with the withdrawn Shares, in which case a notice of withdrawal will be
effective if delivered to the Depositary by any method of delivery described in
Section 4 of the Offer to Purchase. Withdrawals of Shares may not be rescinded.
All questions as to the form and validity (including time of receipt) of notices
of withdrawal will be determined by the Purchaser, in its sole discretion, and
its determination will be final and binding on all parties. None of the
Purchaser, the Depositary, the Information Agent or any other person will be
under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any
notification.
A request is being made to the Company for the use of the Company's
shareholder lists and security position listings for the purpose of
disseminating the Offer to shareholders. Upon compliance by the Company with
this request, the Offer to Purchase, the Letter of Transmittal and all other
relevant materials will be mailed to record holders of Shares and will be
furnished to brokers, dealers, banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on shareholders lists, or, if
applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of Shares by
the Purchaser following receipt of these lists or listings from the Company or
by the Company if it so elects.
The information required to be disclosed by paragraph (e)(1)(vii) of Rule
14d-6 under the Securities Exchange Act of 1934, as amended, is contained in the
Offer to Purchase and is incorporated herein by reference.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Questions and requests for assistance or for copies of the Offer to
Purchase, the related Letter of Transmittal and other tender offer documents may
be directed to the Information Agent or the Dealer Managers, as set forth below,
and copies will be furnished at the Purchaser's expense. Neither the Parent nor
the Purchaser will pay any fees or commissions to any broker or dealer or other
person (other than the Dealer Managers, the Depositary and the Information
Agent) in connection with the solicitation of tenders of Shares and Rights
pursuant to the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue
20th Floor
New York, New York 10022
Toll Free (800) 566-9061
Call Collect (212) 754-8000
Banks and Brokerage Firms Please Call:
(800) 662-5200
The Dealer Managers for the Offer are:
LAZARD FRERES & CO. LLC GOLDMAN, SACHS & CO.
30 Rockefeller Plaza 85 Broad Street
New York, NY 10020 New York, New York 10004
August 10, 1998
================================================================================
<PAGE>
<PAGE>
Contact: Mark Greenberg
(973) 455-5445
AlliedSignal Offers $9.8 Billion, Or $44.50 Per Share, For AMP Incorporated
MORRIS TOWNSHIP. New Jersey, August 4, 1998 -- AlliedSignal Inc. (NYSE:
ALD) said today that it intends to commence a tender offer for all of the
approximately 220 million outstanding shares of AMP Incorporated (NYSE: AMP) at
$44.50 per share in cash, a premium of more than 55%.
The offer will commence within the next five business days. The
AlliedSignal Board of Directors has unanimously approved the offer.
AlliedSignal Chairman and Chief Executive Officer Larry Bossidy said, "We
are announcing this offer after our requests for discussions were ignored by AMP
management."
"We are confident the combination of the two companies can achieve
substantial benefits for all concerned, and we have made an effort to meet with
AMP management in order to outline these benefits in friendly discussions. Their
failure to respond thus far should not prevent us from working together to
achieve these benefits as quickly as possible."
"Let me be clear. AlliedSignal prefers to conclude a negotiated transaction
with AMP, and we are prepared to be flexible with respect to the nature and
amount of consideration and the terms and conditions of an agreement."
1
<PAGE>
<PAGE>
"However, we are also determined that this process now go forward. If AMP
is not responsive to our offer, we are prepared to initiate a consent
solicitation to elect a majority of the directors of the Company who will be
responsive to our proposal and the delivery of value to AMP shareowners. We are
commencing litigation in Federal District Court for the Eastern District of
Pennsylvania to assure that AMP shareowners will not be denied the opportunity
to receive, consider and act upon our offer."
"AlliedSignal will bring a well managed, larger, financially stronger, more
diverse company together with AMP at a crucial time. This combination will
address positively all of the considerations that AMP's management and Board
must evaluate under Pennsylvania law to ensure the combination will be
advantageous to all their stakeholders."
"In particular, we can offer employees a wide range of career opportunities
and the benefit of world class education programs. This is of great advantage
when a company is going through the kind of adjustments that AMP is
experiencing, including the recent Pennsylvania plant closings and layoffs
announced by AMP."
"AlliedSignal has annual revenues of $15 billion, with operations in the
aerospace, engineered materials and automotive industries. With 26 consecutive
quarters of earnings growth of 14% or more, AlliedSignal has demonstrated its
ability to achieve growth on a consistent basis."
"Since we began our Six Sigma program more than six years ago, our earnings
per share have grown at a compound average annual rate of 21% and our market
value has
2
<PAGE>
<PAGE>
grown more than six-fold, from less than $4 billion to more than $25
billion. The combination of the two companies will assure that AMP has the
management and financial support necessary to achieve long-term success in its
business. For AlliedSignal shareowners, AMP will represent a significant new
business that will better position us to achieve our objective of consistent
earnings growth."
AlliedSignal stated that financing for its offer is available.
The tender offer will be subject to customary terms and conditions. This
news release does not constitute an offer to purchase any securities, nor
solicitation of a proxy, consent or authorization for or with respect to a
meeting of the shareowners of AlliedSignal Inc. or AMP or any action in lieu of
a meeting. Any solicitations will be made only pursuant to separate materials in
compliance with the requirements of applicable federal and state securities
laws.
AlliedSignal is an advanced technology and manufacturing company serving
customers worldwide with aerospace and automotive products, chemicals, fibers,
plastics and advanced materials. The company employs 70,500 people worldwide.
AlliedSignal is a component of the Dow Jones Industrial Average and Standard and
Poor's 500 Index, and it is included in Fortune magazine's lists of the ""Most
Admired Companies" and "Best Places to Work." Additional information on the
company is available on the World Wide Web at http://www.alliedsignal.com/.
This release contains forward-looking statements as defined in Section 21E
of the Securities Exchange Act of 1934, including statements about future
business operations, financial performance and market conditions. Such
forward-looking statements involve risks and uncertainties inherent in business
forecasts.
3
<PAGE>
<PAGE>
July 30, 1998
Mr. William J. Hudson
Chief Executive Officer and President
AMP Incorporated
P.O. Box 3608
Harrisburg, PA 17105-3608
Dear Bill:
I tried to reach you by telephone yesterday to set up a meeting to discuss with
you a possible combination of our two companies. A combination makes compelling
business sense and would produce a unique opportunity for your shareowners to
realize maximum value for their shares. I still want to meet with you as soon as
possible, but I thought it would be useful to set forth my proposal in writing
before we meet.
Specifically, AlliedSignal is prepared to offer $43.50 per share in cash for all
of AMP's outstanding shares, a premium of more than 50% over the current market
value. Alternatively, we would consider a higher price if all or a significant
portion of the consideration were AlliedSignal shares instead of cash. Cash
would provide your shareowners the opportunity to realize today the future value
of AMP, and equity the option to participate in the future growth of the new
AlliedSignal/AMP enterprise. Our Board of Directors has approved a transaction
on the terms set forth above, and we have confirmed that the necessary financing
is available.
AlliedSignal has annual revenues of $15 billion, with operations in the
aerospace, automotive and engineered materials industries and with the
demonstrated ability to achieve sales and earnings growth on a consistent basis.
Our vision is to "become a premier company, distinctive and successful in
everything we do." Since we began our Total Quality journey more than six years
ago, our earnings per share have grown at a compound average annual rate of 21%
and our market value has grown more than six-fold, from less than $4 billion to
more than $25 billion.
Recently, we have focused our resources on developing a diversified portfolio of
high-growth, high-margin businesses as a means of being both competitive and
successful in the new century. We have targeted, in particular, electronic
materials, where we have several offerings. A combination with AMP would be
consistent with this thrust. Moreover, our strategic interest in this area would
assure the management and financial support necessary to maintain AMP's
continued leadership position in its sector.
AlliedSignal offers the following strengths that will allow APPLE to achieve its
goals:
<PAGE>
<PAGE>
Size and scale. We are a $15 billion company operating in some 40 countries
with the size and scale to realize economies in areas such as purchasing
marking and shared business services.
Technology. We have a strong research and development capability in the
electronics area, both in our electronic materials business and our
aerospace businesses. I am confident that there would be synergistic
benefits to both our companies.
Management Team. Over the last six years we have developed an outstanding
management team that has demonstrated the ability to lead in the 1990's and
to cope with the issues that all of us will face as we move into the next
century. Our management team is respected around the world--by suppliers,
by customers and by the investment community.
Operational Strength; Processes. We have a proven track record of
operational success, increasing productivity year-in and year-out. Most
recently, we have launched new initiatives across the company to ensure
that we achieve world-class design and production capabilities.
Financial Strength; Credibility. Financially, we have an excellent track
record and a strong balance sheet.
In addition, there are other benefits available to AMP in a combination:
Consistent Performance. Our size and diversity both in terms of different
businesses and geographical markets provides a buffer for a cyclical
downturn in any one area of businesses. AMP cannot achieve that kind of
consistent performance on its own.
Business Processes. Our size and diversity also make it possible for AMP
to take advantage of the business processes and best practices we have
developed across a wide array of businesses in different industries.
Employees. Our size and diversity also would offer many more career
opportunities for your employees. In addition, we have a state-of-the-art
education program which affords all of our employees at least 40 hours of
training a year. For example, we have been able to drive out "six sigma"
initiatives throughout the company largely by using internal resources.
A successful transaction, of course, is dependent on confidentiality and speed.
Accordingly, our proposal is conditioned on your keeping the existence of this
letter and the proposal confidential, and I ask that you respond to me promptly.
I am available to
-2-
<PAGE>
<PAGE>
meet with you at your convenience any time next week, and we are prepared to
begin negotiations immediately. We are willing to discuss any and all concerns
you may have.
I look forward to meeting with you next week. You can reach me at 973-455-6551.
Sincerely,
/s/ Peter M. Kreindel
Peter M. Kreindel
-3-
<PAGE>
<PAGE>
August 4, 1998
Board of Directors
AMP Incorporated
470 Friendship Road
Harrisburg, PA 17111
I am writing to you after my unsuccessful attempts to make contact with
Bill Hudson to discuss a proposal for the strategic combination of our two
companies in a manner that truly serves the vital best interests of the
employees, customers, shareowners and communities of which we are a part.
Specifically, in our letter of July 30 I proposed that AlliedSignal acquire all
the outstanding shares of AMP for $43.50 per share in cash, or for a higher
price if all or a significant portion of the consideration were AlliedSignal
shares rather than cash.
It is our desire to enter into direct discussions about this transaction
with you. However, because Mr. Hudson has not responded to my calls and letter,
we have decided to commence a tender offer for all outstanding shares of AMP for
an enhanced price of $44.50 per share in cash. A combination is clearly in the
best interests of both companies and all of their constituencies, and we are
committed to completing it. The AlliedSignal Board of Directors has unanimously
authorized this offer, and adequate financing is available. Accordingly, if AMP
is unwilling to enter negotiations, AlliedSignal is prepared to initiate a
consent solicitation to increase the size of the AMP Board of Directors and to
add a majority of directors who will be responsive to our proposal.
As I said in my letter to Mr. Hudson last week, and as I will tell you in
person if you permit me to present our proposal in person, a combination of our
companies makes compelling business sense and is consistent with both the letter
and spirit of the laws governing businesses in Pennsylvania. I hope that we can
work together in a professional and constructive manner so that your
constituencies can enjoy the benefits of our combination as soon as possible. In
particular:
* For AMP shareowners, an acquisition of AMP shares for $44.50 in cash
provides the opportunity to realize an immediate premium of about 55%
over the market price of AMP's shares. If we exchange AlliedSignal
shares for AMP shares on a tax-free basis, your shareowners would be
able to participate in the future growth of a new AlliedSignal/AMP
enterprise. We are confident that our business approach, which over
the past six years has enabled us to grow earnings per share at a
compound average annual rate of 21% and increase our market value
six-fold, would create significant value if applied to AMP's business.
AlliedSignal can also bring to bear on AMP's business the important
advantages we have in size and scale, technology, management depth,
operational excellence and financial strength. Finally, AMP
<PAGE>
<PAGE>
shareowners would benefit from owning a stock with a demonstrated
record of consistent performance.
* For AMP employees, the size of AlliedSignal and scope of our
businesses would offer many more career opportunities than they have
currently. AlliedSignal has been named by Fortune as one of the best
100 companies in America for which to work.
* For AMP customers, our business approach and Six Sigma operational
initiatives ensure that we achieve world-class design and production
capabilities in all our businesses, everywhere we operate.
I look forward to speaking with you soon.
Sincerely,
Larry Bossidy
Chairman and Chief Executive Officer
-2-
<PAGE>
