ALLIEDSIGNAL INC, DEF 14A, 1998-03-10

ALLIEDSIGNAL INC
DEF 14A, 1998-03-10
MOTOR VEHICLE PARTS & ACCESSORIES

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Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12

AlliedSignal Inc.
.................................................................
(Name of Registrant as Specified In Its Charter)

.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11

(1) Title of each class of securities to which transaction
applies:

............................................................

(2) Aggregate number of securities to which transaction
applies:

.......................................................

(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth
the amount on which the filing fee is calculated and state
how it was determined):

.......................................................

(4) Proposed maximum aggregate value of transaction:

.......................................................

(5) Total fee paid:

.......................................................

[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

.......................................................

(2) Form, Schedule or Registration Statement No.:

.......................................................

(3) Filing Party:

.......................................................

(4) Date Filed:

.......................................................

[LOGO]

AlliedSignal Inc.
P.O. Box 3000
Morristown, NJ 07962-2496

LARRY BOSSIDY
Chairman and
Chief Executive Officer

March 10, 1998

Dear Shareowner:

It is my pleasure to invite you to attend AlliedSignal's 1998 Annual Meeting of
Shareowners. The meeting will be held on Monday, April 27, 1998 at 10:00 a.m.
local time at the Company's headquarters, 101 Columbia Road, Morris Township,
New Jersey. The Notice of Annual Meeting and Proxy Statement accompanying this
letter describe the business to be transacted at the meeting.

During the meeting, I will report to you on the Company's continued earnings
growth and other achievements during 1997 and on our goals for 1998. We welcome
this opportunity to have a dialogue with our shareowners and look forward to
your comments and questions.

If you are a shareowner of record who plans to attend the meeting, please mark
the appropriate box on your proxy card. If your shares are held by a bank,
broker or other intermediary and you plan to attend, please send written
notification to the Company's Shareholder Relations Department, P.O. Box 50000,
Morristown, New Jersey 07962, and enclose evidence of your ownership (such as a
letter from the bank, broker or intermediary confirming your ownership or a bank
or brokerage firm account statement). The names of all those indicating they
plan to attend will be placed on an admission list held at the registration desk
at the entrance to the meeting.

It is important that your shares be represented at the meeting, regardless of
the number you may hold. Whether or not you plan to attend, please sign, date
and return your proxy card as soon as possible. This will not prevent you from
voting your shares in person if you are present.

A map and directions to the Company's headquarters appear at the end of the
Proxy Statement. I look forward to seeing you on April 27.

Sincerely,

Larry Bossidy

NOTICE OF ANNUAL MEETING

The Annual Meeting of Shareowners of AlliedSignal Inc. (the 'Company') will
be held on Monday, April 27, 1998 at 10:00 a.m. local time at the headquarters
of the Company, 101 Columbia Road, Morris Township, New Jersey, to consider and
take action upon the following matters described in the accompanying Proxy
Statement:

(1) Election of five directors;

(2) Appointment of Price Waterhouse LLP as independent accountants for
1998;

(3) A shareowner proposal regarding executive severance pay;

(4) A shareowner proposal regarding shareowner voting provisions;

(5) A shareowner proposal regarding the annual election of directors; and

to transact such other business as may properly come before the meeting.

The Board of Directors has determined that owners of record of the
Company's Common Stock at the close of business on March 2, 1998, are entitled
to notice of and to vote at the meeting.

By Order of the Board of Directors

PETER M. KREINDLER
Senior Vice President,
General Counsel and Secretary

AlliedSignal Inc.
101 Columbia Road
Morris Township, NJ 07962
March 10, 1998

YOUR VOTE IS IMPORTANT
To vote your shares, please indicate your choices,
sign and date the proxy card, and return it in the
enclosed postage-paid envelope. You may vote in person
at the meeting even though you send in your proxy.

<TABLE>
<CAPTION>
Table of Contents Page
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<S> <C>

General Information.................................................................................. 1

1 -- Election of Directors........................................................................... 2

The Board of Directors and Committees of the Board.............................................. 8

Compensation of Directors....................................................................... 9

Voting Securities.................................................................................... 10

Executive Compensation............................................................................... 12

2 -- Appointment of Independent Accountants.......................................................... 20

Shareowner Proposals................................................................................. 21

3 -- Proposal regarding executive severance pay................................................. 21

4 -- Proposal regarding shareowner voting provisions............................................ 23

5 -- Proposal regarding the annual election of directors........................................ 25

Additional Information............................................................................... 27

Directions to Company Headquarters................................................................... A-1
</TABLE>

PROXY STATEMENT

GENERAL INFORMATION

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of AlliedSignal Inc. (the 'Company') for use
at the Annual Meeting of Shareowners to be held on Monday, April 27, 1998, and
at any adjournment thereof. The solicitation of proxies provides all shareowners
who are entitled to vote on matters that come before the meeting with an
opportunity to do so whether or not they are able to attend the meeting in
person. This Proxy Statement and the related proxy card are first being sent to
the Company's shareowners on or about March 10, 1998.

Owners of record of the Company's Common Stock (the 'Common Stock') at the
close of business on March 2, 1998, are entitled to notice of and to vote at the
Annual Meeting. At February 20, 1998, there were 567,901,259 shares of Common
Stock outstanding. The owners of a majority of the shares entitled to vote,
present in person or represented by proxy, will constitute a quorum for the
transaction of business at the meeting. Shareowners are entitled to one vote for
each share held. If a shareowner is a participant in the Company's Dividend
Reinvestment and Share Purchase Plan (the 'Dividend Reinvestment Plan'), the
proxy card represents shares in the participant's plan account, as well as
shares held of record in the participant's name.

The shares represented by a properly signed and returned proxy card will be
voted as specified by the shareowner. If a proxy card is signed and returned but
no specification is made, the shares will be voted FOR the election of all
nominees for director (Proposal 1) and the appointment of independent
accountants (Proposal 2), and AGAINST the shareowner proposals described in this
Proxy Statement (Proposals 3 through 5). A proxy may be revoked by a shareowner
at any time before it is voted by notice in writing delivered to the Secretary,
by submission of another proxy bearing a later date or by voting in person at
the Annual Meeting.

Abstentions are not counted as votes 'for' or 'against' a proposal, but are
counted in determining the number of shares present or represented on a
proposal. Therefore, since approval of Proposals 2 through 5 requires the
affirmative vote of a majority of the shares of Common Stock present or
represented, abstentions have the same effect as a vote 'against' those
proposals. New York Stock Exchange rules prohibit brokers from voting on
Proposals 3 through 5 without receiving instructions from the beneficial owner
of the shares. In the absence of instructions, shares subject to such 'broker
non-votes' will not be counted as voted or as present or represented on those
proposals.

It is the policy of the Company that any proxy, ballot or other voting
material that identifies the particular vote of a shareowner will, if requested
thereon by the shareowner, be kept confidential, except in the event of a
contested proxy solicitation or as may be required by law. The Company may be
informed whether or not a particular shareowner has voted and will have access
to any comment written on a proxy, ballot or other material and to the identity
of the commenting shareowner. Under the policy, the inspectors of election at
any meeting will be independent parties unaffiliated with the Company.

1 -- ELECTION OF DIRECTORS

The Company's Board of Directors is divided into three classes that serve
staggered three-year terms and are as nearly equal in number as possible. The
Board has nominated five candidates for election as directors for a term ending
at the 2001 Annual Meeting. The vote of a plurality of the shares of Common
Stock present or represented and entitled to vote at the Annual Meeting is
required for election as a director.

All current directors were previously elected by the shareowners, except
Daniel P. Burnham and Frederic M. Poses, who joined the Board in October 1997.
Each nominee for election has consented to being named in the Proxy Statement
and to serve if elected. If prior to the Annual Meeting any nominee should
become unavailable to serve, the shares represented by a properly signed and
returned proxy card will be voted for the election of such other person as may
be designated by the Board of Directors, or the Board may determine to leave the
vacancy temporarily unfilled or reduce the authorized number of directors
pursuant to the By-laws. All directors serve subject to the retirement policy
described on page 8.

Certain information regarding each nominee and each director continuing in
office after the Annual Meeting is set forth below, including age and principal
occupation, a brief account of business experience during at least the last five
years, certain other directorships currently held and the year in which the
individual was first elected a director of the Company or one of its predecessor
companies.

NOMINEES FOR ELECTION

<TABLE>
<S> <C>
[Photo of Daniel DANIEL P. BURNHAM, Vice Chairman of the Company
P. Burnham]
Mr. Burnham became Vice Chairman and a member of the Board of Directors in October 1997.
He joined the Company as Vice President and Controller in 1982. He held several
executive positions with AlliedSignal Engineered Materials, including President of its
Plastics and Performance Materials Group and President of its Fibers Group, before
joining AlliedSignal Aerospace in 1990 as President of its AiResearch Group. He was
named President of AlliedSignal Aerospace and an Executive Vice President of the Company
in 1992, and continued in those positions until he became Vice Chairman.

Director since 1997 Age 51
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</TABLE>

<TABLE>
<S> <C>
[Photo of Russell RUSSELL E. PALMER, Chairman and Chief Executive Officer of The Palmer Group
E. Palmer]
Mr. Palmer established The Palmer Group, a private investment firm, in 1990, after
serving seven years as Dean of The Wharton 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.

Director since 1987 Age 63
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[Photo of Ivan IVAN G. SEIDENBERG, Vice Chairman, President and Chief Operating Officer of Bell
G. Seidenberg] Atlantic Corporation

Mr. Seidenberg assumed his current position with Bell Atlantic Corporation, a
telecommunications and information services provider, upon the merger of NYNEX
Corporation and Bell Atlantic in 1997. He had joined NYNEX in 1983 and served in several
senior management positions 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 is a director of American Home Products Corporation, Boston
Properties, Inc., CVS Corporation and Viacom Inc.

Director since 1995 Age 51
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[Photo of Andrew ANDREW C. SIGLER, Retired Chairman and Chief Executive Officer of Champion International
C. Sigler] Corporation

Mr. Sigler began his career at Champion International Corporation, a paper and forest
products company, in 1956. He was elected President and Chief Executive Officer in 1974
and served as Chairman and Chief Executive Officer from 1979 until his retirement in
1996. He is a director of Bristol-Myers Squibb Company, The Chase Manhattan Corporation
and General Electric Company.

Director since 1994 Age 66
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</TABLE>

<TABLE>
<S> <C>
[Photo of Thomas THOMAS P. STAFFORD, Consultant, General Technical Services, Inc.
P. Stafford]
Lt. Gen. Stafford joined the consulting firm of General Technical Services, Inc. in
1984. He is also Vice Chairman and co-founder of Stafford, Burke and Hecker, Inc., a
Washington-based 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.

Director since 1981 Age 67
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INCUMBENT DIRECTORS CONTINUING IN OFFICE FOR TERM EXPIRING IN 1999

[Photo of Hans HANS W. BECHERER, Chairman and Chief Executive Officer of Deere & Company
W. Becherer]
Mr. Becherer began his business career with Deere & Company, a manufacturer of mobile
power machinery and a supplier of financial services, in 1962. 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
Schering-Plough Corporation.

Director since 1991 Age 62
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[Photo of Paul PAUL X. KELLEY, Partner, J.F. Lehman & Company
X. Kelley]
General Kelley was Vice Chairman of Cassidy & Associates, Inc., a Washington-based
government relations firm, from 1989 until early 1998, when he became a Partner of J.F.
Lehman & Company, an investment firm. He previously 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.

Director since 1987 Age 69
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</TABLE>

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<S> <C>
[Photo of Robert ROBERT P. LUCIANO, Chairman of the Board of Schering-Plough Corporation
P. Luciano]
Mr. Luciano joined Schering-Plough Corporation, a manufacturer and marketer of
pharmaceuticals and consumer products, 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.

Director since 1989 Age 64
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[Photo of Robert ROBERT B. PALMER, Chairman, President and Chief Executive Officer of Digital Equipment
B. Palmer] Corporation

Mr. Palmer joined Digital Equipment Corporation, a provider of networked computer
systems, software and services, in 1985. He advanced through a series of executive
positions until he became President and Chief Executive Officer in 1992 and Chairman of
the Board in 1995.

Director since 1995 Age 57
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[Photo of John JOHN R. STAFFORD, Chairman, President and Chief Executive Officer of American Home
R. Stafford] Products Corporation

Mr. Stafford has held a number of positions with American Home Products, a manufacturer
of pharmaceutical, health care, animal health and agricultural products, since joining
that company in 1970. He served as General Counsel, Vice President, Senior Vice
President and Executive Vice President before becoming President in 1981, an office he
held until 1990 and which he resumed in early 1994. Mr. Stafford 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.

Director since 1993 Age 60
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</TABLE>

INCUMBENT DIRECTORS CONTINUING IN OFFICE FOR TERM EXPIRING IN 2000
<TABLE>
<S> <C>
[Photo of Lawrence LAWRENCE A. BOSSIDY, Chairman of the Board and Chief Executive Officer of the Company
A. Bossidy]
Mr. Bossidy became Chief Executive Officer of the Company 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, a diversified services and manufacturing
company, which he joined in 1957. 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 the Company. He is a director of Champion International Corporation, J. P.
Morgan & Co. Incorporated and Merck & Co., Inc.

Director since 1991 Age 63
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[Photo of Ann ANN M. FUDGE, Executive Vice President of Kraft Foods, Inc.
M. Fudge]
Ms. Fudge joined General Foods USA in 1986 and held several planning and marketing
positions before being appointed Executive Vice President and General Manager of the
Dinners and Enhancers Division in 1991. In 1994, she was named President of Kraft
General Foods' Maxwell House Coffee Company. In 1995, Ms. Fudge became Executive Vice
President of Kraft Foods, Inc. (the successor to Kraft General Foods, Inc., of which
General Foods USA was an operating unit), while continuing to head the Maxwell House
Coffee Division as General Manager. She became President of Kraft's Coffee and Cereal
Division in 1997. Kraft is the multinational food business of Philip Morris Companies
Inc. Ms. Fudge is a director of Liz Claiborne, Inc.

Director since 1993 Age 46
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</TABLE>

<TABLE>
<S> <C>
[Photo of Frederic FREDERIC M. POSES, Vice Chairman of the Company
M. Poses]
Mr. Poses began his career with the Company 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 the Company. In October 1997, he was named Vice Chairman and
a member of the Board of Directors.

Director since 1997 Age 55
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[Photo of Robert ROBERT C. WINTERS, Chairman Emeritus of The Prudential Insurance Company of America
C. Winters]
Mr. Winters joined Prudential, a provider of insurance and financial services, in 1953.
During his career with Prudential, 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. He retired as Chairman and Chief Executive Officer and
became Chairman Emeritus in December 1994.

Director since 1989 Age 66
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[Photo of Henry HENRY T. YANG, Chancellor of the University of California, Santa Barbara
T. Yang]
Dr. Yang became Chancellor of the University of California, Santa Barbara in 1994. Prior
to his current position, he served in a number of faculty and administrative positions
at Purdue 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.

Director since 1996 Age 57
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</TABLE>

THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD

The business of the Company is managed under the direction of the Board of
Directors. There were eight meetings of the Board in 1997, with individual
attendance averaging 97% of the meetings. Average attendance by incumbent
directors at all meetings of the Board and Committees of the Board on which they
served was 95%.

The Board of Directors' retirement policy establishes 70 as the retirement
age for non-employee directors. A director who reaches retirement age shall
serve until the next Annual Meeting. The policy also provides that non-employee
directors who discontinue the principal position or identification which
prevailed at the time of their election (other than by virtue of a promotion)
shall offer to tender their resignations as directors and that an employee
director shall resign from the Board effective upon termination of service as an
active employee of the Company. The Board has discretion to make exceptions to
the policy.

Because of the number of matters requiring Board consideration, and to make
the most effective use of individual Board members' capabilities, the Board of
Directors has established Committees to devote attention to specific subjects
and to assist it in the discharge of its responsibilities. The functions of
these Committees, their current members and the number of meetings held during
1997 are described below. A non-employee director may also attend a Committee
meeting as an alternate member at the request of the Committee Chairman (with
the concurrence of the Chairman of the Board).

The Audit Committee recommends the firm to be appointed as independent
accountants to audit the Company's financial statements and to perform services
related to the audit; reviews the scope and results of the audit with the
independent accountants; reviews with management and the independent accountants
the Company's interim and year-end operating results; considers the adequacy of
the internal accounting and auditing procedures of the Company; and considers
the accountants' independence. The members of the Audit Committee, which met
five times in 1997, are Messrs. R. E. Palmer (Chairman), Becherer, J. Stafford
and Winters, Ms. Fudge and Gen. Kelley.

The Corporate Governance Committee reviews policies and makes
recommendations to the Board, as appropriate, concerning Board-related issues,
such as the size and composition of the Board, the criteria and qualifications
for election to the Board, retirement from the Board, director compensation and
benefits, and the structure, composition and membership of Board committees. The
Committee also considers and recommends individuals for nomination as directors.
The names of potential director candidates are drawn from a number of sources,
including recommendations from members of the Board, management and shareowners.
Shareowners wishing to recommend Board nominees should submit their
recommendations in writing to the Secretary, AlliedSignal Inc., P.O. Box 4000,
Morristown, New Jersey 07962, with the submitting shareowner's name and address
and pertinent information about the proposed nominee similar to that set forth
in this Proxy Statement for Board nominees, including current principal
occupation and employment, principal positions held during the last five years
and a list of all companies which the individual serves as a director. (See the
heading 'Additional Information -- Other Action at the Meeting' for a summary of
the procedure applicable to a shareowner nomination at an annual meeting.) This
Committee is responsible for the periodic review of the overall effectiveness of
the Board and, when appropriate, making recommendations for improvements. The
members

of the Corporate Governance Committee, which met two times in 1997, are Messrs.
Becherer (Chairman), Luciano, R. E. Palmer, Seidenberg and Winters.

The Corporate Responsibility Committee reviews the policies and programs
that are designed to assure the Company's compliance with legal and ethical
standards and that affect its role as a responsible corporate citizen, including
those relating to human resources issues such as equal employment opportunity,
to health, safety and environmental matters, and to proper business practices.
The members of the Committee are Gen. Kelley (Chairman), Ms. Fudge, Messrs. R.
B. Palmer and Sigler, Lt. Gen. T. Stafford and Dr. Yang. It met three times in
1997.

The Management Development and Compensation Committee reviews and
recommends the compensation arrangements for officers; approves such
arrangements for other senior level employees; considers matters related to
management development and succession and recommends individuals for election as
officers; and reviews or takes such other action as may be required in
connection with the bonus, stock and other benefit plans of the Company and its
subsidiaries. It met six times in 1997. The Committee members are Messrs.
Luciano (Chairman), Becherer, Seidenberg, Sigler and J. Stafford.

The Retirement Plans Committee appoints the trustees for funds under the
employee pension benefit plans of the Company and certain subsidiaries; reviews
funding strategies; sets investment policy for fund assets; and oversees and
appoints members of other committees investing fund assets. This Committee met
three times in 1997. Its members are Messrs. Winters (Chairman), Luciano, R. E.
Palmer, Sigler and J. Stafford and Ms. Fudge.

The Technology Committee reviews corporate-wide technology matters,
including research, development and engineering, and advises the Company with
respect to its technology program and budget, proposed changes in corporate
strategy where technology is a significant component, and technologies of
importance to the Company's existing or new business areas. The members of this
Committee are Lt. Gen. T. Stafford (Chairman), Gen. Kelley, Messrs. R. B. Palmer
and Seidenberg and Dr. Yang. It met two times in 1997.

COMPENSATION OF DIRECTORS

Non-employee directors receive an annual Board retainer of $50,000, of
which $15,000 is automatically credited to each director's account in the
Deferred Compensation Plan for Non-Employee Directors (the 'Deferred
Compensation Plan') in the form of Common Stock equivalents (which are only
payable after termination of Board service). They also receive a fee of $1,500
for Board meetings attended on any day (eight during 1997), an annual retainer
of $5,400 for each Board Committee served, and an additional Committee Chairman
retainer of $4,000 for the Audit and Management Development and Compensation
Committees and $2,000 for all other Board Committees. While no meeting fees are
generally paid for attendance at Committee meetings, a $1,000 fee is paid for
attendance at a Committee meeting, or other extraordinary meeting related to
Board business, which occurs apart from a Board meeting, and a $1,000 per day
fee is paid for special assignments. Non-employee directors are also provided
with $350,000 in business travel accident insurance and are eligible to elect,
without contribution by them, $100,000 in term life insurance and medical and
dental coverage for themselves and their eligible dependents. All directors are
reimbursed for expenses incurred in attending meetings.

Directors may elect to defer, until a specified calendar year or retirement
from the Board, all or any portion of their annual retainers and fees that are
not automatically deferred and to have such compensation credited to their
account in the Deferred Compensation Plan. Amounts credited either accrue
amounts equivalent to interest at the same rate as that determined by the
Management Development and Compensation Committee for amounts deferred during
the same year under the Company's Incentive Compensation Plan (10% for 1998) or
are valued as if invested in Common Stock equivalents or one of the other funds
available for investments by participants in the AlliedSignal Savings Plan, as
elected by the director. All amounts credited as Common Stock equivalents under
the Deferred Compensation Plan, including those referred to above, will earn
amounts equivalent to dividends, which will be credited to the directors'
accounts as if reinvested in Common Stock, and all such deferred amounts will be
paid in cash following termination of Board service. Common Stock equivalents
credited to directors' deferred accounts are included in the table set forth
below under 'Voting Securities.' Upon a change in control, a director will be
entitled to a lump-sum cash payment of all deferred amounts.

Under the Stock Plan for Non-Employee Directors, each new non-employee
director receives a one-time grant of 3,000 shares of Common Stock, which are
subject to transfer restrictions until the director's service terminates with
the consent of a majority of the other members of the Board, provided
termination occurs at or after age 65. During the restricted period, the
director has the right to receive dividends on and the right to vote the shares.
At the end of the restricted period, a director is entitled to one-fifth of the
shares granted for each year of service (up to five). The shares will be
forfeited if the director's service terminates (other than for death or
disability) prior to the end of the restricted period. The Plan also provides
for the grant to each non-employee director continuing in office after an Annual
Meeting of an option to purchase 2,000 shares of Common Stock at 100% of the
fair market value of the Common Stock on the date of grant. Each option becomes
fully vested at the earliest of the director's retirement from the Board at or
after age 70, death, disability or April 1 of the third year after the date of
grant. Prior thereto, each option becomes exercisable in cumulative installments
of 40% of the shares subject to the option on April 1 of the year following the
grant date and an additional 30% on April 1 of each of the next two years.

VOTING SECURITIES

As of January 1, 1998, State Street Bank & Trust Company, 225 Franklin
Street, Boston, Massachusetts 02101 ('State Street'), held 62,066,850 shares, or
approximately 10.9%, of the outstanding Common Stock as trustee of the Company's
savings plans. Under the terms of the plans, State Street is required to vote
shares attributable to any participant in accordance with instructions received
from the participant and to vote all shares for which it shall not have received
instructions in the same ratio as the shares with respect to which instructions
were received. State Street disclaims beneficial ownership of the shares
referred to above. State Street also held 7,195,118 shares, or approximately
1.3%, of the outstanding Common Stock as trustee of various trusts or as
discretionary adviser, with sole voting power as to 6,498,369 shares, shared
voting power as to 147,649 shares, sole investment power as to 6,983,504 shares,
and shared investment power as to 211,614 shares.

FMR Corp. (including Fidelity Management & Research Company and Fidelity
Management Trust Company), 82 Devonshire Street, Boston, Massachusetts 02109,
has informed the Company that, as of January 1, 1998, it beneficially owned
38,708,564 shares, or approximately 6.8%, of the outstanding Common Stock,
primarily as investment adviser, with sole voting power as to 1,513,188 shares
and sole investment power as to 38,708,564 shares.

Set forth below is certain information with respect to ownership of the
Common Stock as of February 20, 1998 by each director, certain executive
officers and by all directors and executive officers of the Company as a group:

<TABLE>
<CAPTION>
Number of
Name Shares(1)(2)(3)
- ------------------------------------------------------------- ---------------

<S> <C>
Hans W. Becherer............................................. 20,637
Lawrence A. Bossidy.......................................... 4,754,592
Daniel P. Burnham............................................ 739,938
Ann M. Fudge................................................. 13,211
Paul X. Kelley............................................... 32,118
Peter M. Kreindler........................................... 334,196
Robert P. Luciano............................................ 18,213
Robert B. Palmer............................................. 7,679
Russell E. Palmer............................................ 17,967
Frederic M. Poses............................................ 988,725
Ivan G. Seidenberg........................................... 10,244
Andrew C. Sigler............................................. 24,746
John R. Stafford............................................. 32,201
Thomas P. Stafford........................................... 23,542
Richard F. Wallman........................................... 179,863
Robert C. Winters............................................ 42,445
Henry T. Yang................................................ 6,246
All directors and executive officers as a group.............. 7,754,831
</TABLE>

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

(1) The total for any individual is less than 0.9%, and the total for the group
is less than 1.4%, of the shares of Common Stock outstanding.

(2) Includes (a) shares held individually, jointly with others or in the name of
a family member or of a bank, broker or nominee for the individual's
account, (b) whole shares attributable to participants in the Dividend
Reinvestment Plan and the AlliedSignal Savings Plan, (c) restricted shares
as to which directors have sole voting power but no investment power prior
to the lapse of restrictions, and (d) the following number of shares or
share-equivalents in deferred accounts, as to which no voting or investment
power exists: Mr. Becherer, 8,437; Mr. Bossidy, 17,112; Mr. Burnham, 38,014;
Ms. Fudge, 1,011; Gen. Kelley, 13,091; Mr. Kreindler, 19,796; Mr. Luciano,
4,013; Mr. R. B. Palmer, 2,479; Mr. R. E. Palmer, 3,767; Mr. Poses, 189,802;
Mr. Seidenberg, 3,044; Mr. Sigler, 8,546; Mr. J. Stafford, 4,001; Lt. Gen.
T. Stafford, 11,322; Mr. Wallman, 20,605; Mr. Winters, 5,673; Dr. Yang,
2,446; and all directors and executive officers as a group, 374,496.

(3) Includes shares which the following have the right to acquire within 60 days
through the exercise of vested stock options: Mr. Bossidy, 3,860,000; Mr.
Burnham, 600,000; Mr. Kreindler, 302,000; Mr. R. B. Palmer, 2,200; Mr.
Poses, 755,000; Mr. Seidenberg, 4,200; Mr. Wallman, 159,000; Dr. Yang, 800;
each other non-employee director, 6,200; and all directors and executive
officers as a group, 6,209,000; no voting or investment power exists with
respect to such shares prior to acquisition.

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

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers to file reports relating to their ownership and
changes in ownership of the Common Stock with the Securities and Exchange
Commission and New York Stock Exchange. Based on information provided by the
Company's directors and officers and a review of such reports, the Company
believes that all required reports were filed on a timely basis during 1997
except that one transaction by Robert F. Friel, an officer of the Company, was
reported less than one month after the due date.

EXECUTIVE COMPENSATION

REPORT OF THE MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE

The Management Development and Compensation Committee of the Board of
Directors (the 'Committee'), subject to the approval of the Board of Directors,
determines the compensation of the Company's executive officers and oversees the
administration of executive compensation programs. The Committee is composed
solely of independent directors.

Executive Compensation Policies and Programs

The Company's executive compensation programs are designed to attract and
retain highly qualified executives and to motivate them to maximize shareowner
returns by achieving aggressive goals. The programs link each executive's
compensation directly to performance. A significant portion of each executive's
compensation is dependent upon the appreciation of the Common Stock and meeting
financial goals and other individual performance objectives.

There are three basic components to this 'pay for performance' system: base
pay; annual incentive bonus; and long-term, equity-based incentive compensation
(primarily stock options). Each component is addressed in the context of
competitive conditions. In determining competitive compensation levels, the
Company analyzes information from several independent surveys which include
information regarding comparably-sized industrial companies. Since the Company's
market for executive talent extends beyond its own industries, the survey data
include companies outside the industrial classifications represented in the
Composite Group Index referred to below under 'Performance Graph.'

Base pay. Base pay is designed to be competitive within 20% above or below
median salary levels at other large industrial companies for equivalent
positions. The executive's actual salary relative to this competitive framework
varies based on individual performance and the individual's skills, experience
and background.

Annual incentive bonus. In 1997, each executive was eligible to receive an
annual cash bonus. Award levels, like the base salary levels, are set with
reference to competitive conditions and are intended to motivate the Company's
executives by providing substantial bonus payments for the achievement of
aggressive goals. The actual amounts paid were determined by performance based
on two factors: first, financial performance, which was measured against
objectives established for net income, cash flow, productivity increases and
revenue growth; and second, the individual executive's performance against other
specific management objectives, such as improving customer satisfaction and
developing organizational capability. Financial objectives were given greater
weight than other management objectives in determining bonus payments. The types
and relative importance of specific financial and other business objectives
varied among the Company's executives depending on their positions and the
particular operations or functions for which they were responsible.

Long-term, equity-based incentive compensation. The long-term, equity-based
compensation program is tied directly to shareowner return. The executive is
rewarded if the shareowners receive the benefit of appreciation in the price of
the Common Stock. Under the program, long-term incentive compensation consists
of stock option grants which vest over a multi-year period. Options for
executive officers are granted in tandem with limited stock appreciation rights,
which are designed to provide the executive with an economic benefit comparable
to that available to all shareowners in the event of a tender offer for the
Company's shares, a change in control or similar event. The Company periodically
grants new awards to provide continuing incentives for future performance,
without regard to the number of outstanding awards. Depending on the executive,
grants are either made annually, with vesting over a three-year period, or
periodically, with vesting over a longer period but subject to acceleration if
specified financial performance objectives are achieved. Like the annual bonus,
award levels are set with regard to competitive considerations, and each
individual's actual award is based upon the individual's performance, potential
for advancement, leadership ability and commitment to the Company's total
quality efforts.

The principal purpose of the long-term incentive compensation program is to
encourage the Company's executives to enhance the value of the Company and,
hence, the price of the Common Stock and the shareowners' return. This component
of the compensation system (through extended vesting) also is designed to create
an incentive for the individual to remain with the Company. In addition, awards
of restricted units, each of which entitles the holder to one share of Common
Stock on vesting (or cash in the Committee's discretion), may be made on a
select basis to individual executives in order to enhance the retention
incentive. These units vest over an extended period of up to ten years.

The Company intends, to the extent practicable, to preserve deductibility
under the Internal Revenue Code of compensation paid to its executive officers
while maintaining compensation programs to attract and retain highly qualified
executives in a competitive environment. Accordingly, compensation paid under
the Company's 1993 Stock Plan and Incentive Compensation Plan is generally
deductible, although certain compensation paid to some executives may not be
deductible.

Annual Reviews

Each year, the Committee reviews the executive compensation policies with
respect to the linkage between executive compensation and the creation of
shareowner value, as well as the competitiveness of the programs. The Committee
determines what changes, if any, are appropriate in the compensation programs.
In conducting these annual reviews, the Committee considers information provided
by the Chief Executive Officer and the Senior Vice President-Human Resources and
Communications and uses surveys and reports prepared by independent compensation
consultants. The Committee also periodically reviews the levels of ownership in
shares and share-equivalents of the Common Stock for executive officers to
assure that they maintain ownership positions that are consistent with
guidelines established at other large industrial companies.

The Committee annually reviews with the Chief Executive Officer the
individual performance of the other executive officers and the Chief Executive
Officer's recommendations with respect to the appropriate compensation awards.
With Board authorization, the Committee approves salary actions and determines
the amount of annual bonus and the number of long-term, equity-based awards for
each officer. The Committee also reviews with the Chief Executive Officer the
financial and other objectives for the senior executive and other officers for
the following year.

In 1997, awards to executive officers as a group reflected the overall
financial performance of the Company, which included achievement of the
Company's sales, earnings per share and cash flow goals. Awards to individuals
also reflected performance against their specific management objectives, as well
as the performance of the operations or functions for which they were
responsible.

Chief Executive Officer

Based on the Company's financial performance in 1997, which included a 15%
increase in earnings per share and net income in excess of $1.1 billion, as well
as a 16% increase in the price of the Common Stock, the Company's focus on
customer excellence, and the emphasis on development of the Company's
organizational capability and leadership team, the Committee awarded Mr. Bossidy
a bonus of $3,150,000. In addition, in order to further recognize and reward Mr.
Bossidy for his extraordinary performance on behalf of the Company, given that
his base salary, incentive bonus target and eligibility for restricted units
have remained unchanged since 1994, and to provide a stock option-based
incentive to continue his contributions to the improvement of the share price
through and beyond retirement on April 1, 2000, and to assure a successful
transition, the Committee in 1997 approved a grant of 1,500,000 stock options
(after adjustment to reflect the two-for-one split of the Common Stock in
September 1997 (the 'Split')), which will vest if the Company achieves a
cumulative 45% growth in consolidated earnings per share during any consecutive
three-year period and be exercisable no sooner than age 65 (with respect to 50%
of the options) and age 66 (with respect to the remaining 50%); in any event,
the options will fully vest and be exercisable on the earlier of January 1,
2002, death or total disability.

Members of the Management Development and Compensation Committee:

Robert P. Luciano, Chairman
Hans W. Becherer
Ivan G. Seidenberg
Andrew C. Sigler
John R. Stafford

* * *

Note: Figures in the following tables relating to shares and share-equivalents
have been adjusted as appropriate to reflect the Split.

SUMMARY COMPENSATION TABLE

The following table contains information concerning the most highly
compensated executive officers of the Company, as required under applicable
rules of the Securities and Exchange Commission.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------------- -------------------------
Securities
Name and Principal Other Annual Restricted Underlying All Other
Position Year Salary Bonus Compensation Unit Awards(1) Options(#) Compensation(2)
- ------------------- ----- ---------- ----------- ------------ -------------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lawrence A. 1997 $2,000,000 $ 3,150,000 $ 4,617 -- 1,500,000 $ 572,352
Bossidy 1996 2,000,000 2,800,000 6,576 -- -- 1,028,889
Chairman of the 1995 2,000,000 2,350,000 58,206(3) -- -- 1,005,653
Board and Chief
Executive Officer
Frederic M. 1997 510,000 735,000 13,572 -- -- 112,710
Poses 1996 493,500 670,000 15,767 -- -- 101,901
Vice Chairman(4) 1995 475,000 625,000 2,710 $ 1,072,500 1,300,000 61,254

Daniel P. 1997 485,000 720,000 11,683 -- -- 77,827
Burnham 1996 473,333 575,000 61,379 -- -- 76,407
Vice Chairman(4) 1995 450,000 445,000 77,539 1,072,500 1,300,000 73,290

John W. 1997 475,000 500,000 4,393 -- -- 69,405
Barter 1996 466,667 500,000 4,385 -- -- 67,292
Executive Vice 1995 450,000 400,000 767 1,072,500 1,300,000 52,991
President(5)
Peter M. 1997 410,000 480,000 7,996 -- -- 46,305
Kreindler 1996 410,000 430,000 4,835 -- 780,000 45,315
Senior Vice 1995 410,000 380,000 468 680,000 140,000 38,855
President,
General Counsel
and Secretary
Richard F. 1997 377,917 420,000 7,568 -- -- 36,561
Wallman 1996 358,333 350,000 7,616 1,231,250 715,000 24,213
Senior Vice 1995 289,423 275,000 3,479 392,500 120,000 --
President and
Chief Financial
Officer
</TABLE>

(footnotes on next page)

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

(1) Restricted unit awards, valued on the date of the award, entitle the holder
to receive one share of Common Stock for each unit when the unit vests. The
Committee has the discretion to pay all or part of such awards in cash. None
of the units reflected in the table vests in less than three years. The
total number of units held and their value at the end of 1997 were as
follows: Mr. Bossidy, 598,296 units ($23,221,364); Mr. Poses, 61,070 units
($2,370,279); Mr. Burnham, 61,070 units ($2,370,279); Mr. Barter, 60,640
units ($2,353,590); Mr. Kreindler, 40,590 units ($1,575,399); and Mr.
Wallman, 56,600 units ($2,196,788). Common Stock dividend equivalents are
payable on each unit.

(2) Amounts shown for 1997 consist of matching contributions made by the Company
under the savings plan and supplemental savings plan: for Mr. Bossidy,
$120,006; Mr. Poses, $40,800; Mr. Burnham, $38,808; Mr. Barter, $38,004; Mr.
Kreindler, $16,404; and Mr. Wallman, $15,117; the value of life insurance
premiums: for Mr. Bossidy, $398,821; Mr. Poses, $14,640; Mr. Burnham,
$32,350; Mr. Barter, $15,666; and Mr. Kreindler, $18,670; and above-market
interest earned during 1997 on previously deferred compensation but not paid
or payable in 1997: for Mr. Bossidy, $53,525; Mr. Poses, $57,270; Mr.
Burnham, $6,669; Mr. Barter, $15,735; Mr. Kreindler, $11,231; and Mr.
Wallman, $21,444.

(3) Includes $18,627 for estate planning and $23,690 for Company-provided
transportation.

(4) Prior to October 1, 1997, Mr. Poses and Mr. Burnham were Executive Vice
Presidents of the Company and Presidents of AlliedSignal Engineered
Materials and AlliedSignal Aerospace, respectively.

(5) Mr. Barter was Executive Vice President of the Company until his retirement
on December 31, 1997 and also was President of AlliedSignal Automotive until
October 1, 1997.

OPTION TABLES

The following tables contain information concerning stock options, all of
which were granted with an exercise price equal to 100% of the fair market value
of the Common Stock on the date of grant.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
Number of % of Total
Securities Options
Underlying Granted to Exercise Grant Date
Options Employees in Price Expiration Present
Name Granted Fiscal Year ($/Sh) Date Value(1)
- ------------------------------------ --------- ------------ -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Lawrence A. Bossidy................. 1,500,000(2) 18% $35.44 4/27/07 $13,485,000
Frederic M. Poses................... -- -- -- -- --
Daniel P. Burnham................... -- -- -- -- --
John W. Barter...................... -- -- -- -- --
Peter M. Kreindler.................. -- -- -- -- --
Richard F. Wallman.................. -- -- -- -- --
</TABLE>

(footnotes on next page)

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

(1) Options are valued using a Black-Scholes option pricing model which assumes
a historic five-year average volatility of 18.6%, the average dividend yield
for the three years ended December 31, 1996 (1.8%), a 6.8% risk-free rate of
return (based on the average zero coupon five-year U.S. Treasury note yield
for the month of grant), and an expected option life of five years based on
past experience. No adjustments are made for risk of forfeiture. Options
will have no actual value unless, and then only to the extent that, the
Common Stock price appreciates from the grant date to the exercise date. If
the grant date present values are realized, total shareowner value will have
appreciated by approximately $5.1 billion, and the value of the granted
options reflected in the table will be less than 0.3% of the total
shareowner appreciation.

(2) These options will fully vest on the earlier of January 1, 2002, death,
disability or April 1 of the year following achievement of at least a
cumulative 45% growth in consolidated earnings per share for a consecutive
three-year period. The options are accompanied by tandem limited stock
appreciation rights ('LSARs'), which provide that in the event of a tender
offer for the Company's shares, a change in control or similar event, a cash
payment will be made within 90 days equal to the difference between the
option exercise price and a price for the Common Stock related to the event,
and the corresponding options will expire.

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

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES

Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options(1)
Acquired on Options at Year-End at Year-End
Exercise Value -------------------------- --------------------------
Name (#) Realized Exercisable Unexercisable Exercisable Unexercisable
- --------------------------- ----------- ----------- ----------- ------------- ----------- -------------

<S> <C> <C> <C> <C> <C> <C>
Lawrence A. Bossidy........ 850,000 $23,082,225 3,880,000 1,500,000 $82,584,300 $ 5,058,750
Frederic M. Poses.......... 170,800 3,973,359 655,000 1,100,000 13,519,288 23,124,750
Daniel P. Burnham.......... 300,000 7,252,500 500,000 1,100,000 10,166,250 23,124,750
John W. Barter............. 280,000 8,786,015 636,000 1,100,000 13,773,310 23,124,750
Peter M. Kreindler......... 240,000 5,384,955 200,000 762,000 3,542,820 10,597,545
Richard F. Wallman......... 45,000 1,082,775 68,000 696,000 1,000,040 9,619,380
</TABLE>

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

(1) 'In-the-Money Options' are those which have an exercise price that is lower
than the year-end fair market value of the underlying securities.

PERFORMANCE GRAPH

The following graph compares the five-year cumulative total return on the
Common Stock to the total returns on the Standard & Poor's 500 Stock Index and a
composite index of corporations in the same industries as the Company (the
'Composite Group Index').

<TABLE>
[PERFORMANCE GRAPH]

<S> <C> <C> <C> <C> <C>
Company
Common 133 117 166 237 279
Stock

S&P 500 110 112 153 189 252

Composite
Group 116 124 177 230 269
</TABLE>

In each case, a $100 investment on December 31, 1992 and reinvestment of
all dividends are assumed. Returns are at December 31 of each year.

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

The Composite Group Index combines the total returns on the published Dow
Jones indices for the Aerospace & Defense, Automobile Parts & Equipment
Excluding Tire and Rubber Makers, and Chemical Groups. The total return for the
Composite Group Index is calculated by adding the products obtained from
separately multiplying the total return for each of the three Dow Jones groups
by the total market capitalization of the companies included in that group and
dividing by the total market capitalization of the companies included in the
three groups. This calculation is made for each year using stock market
capitalization data as of the beginning of the year provided to the Company by
Dow Jones. Shareowners may obtain this data from the Secretary, AlliedSignal
Inc., P.O. Box 4000, Morristown, New Jersey 07962.

RETIREMENT BENEFITS

The following table illustrates the estimated annual pension benefits which
would be provided on retirement at age 65 under the Company's Retirement Program
(the 'Pension Plan') and an unfunded supplemental retirement plan (the
'Supplemental Plan'), after applicable deductions for Social Security benefits,
to salaried employees having specified average annual remuneration and years of
service.

PENSION TABLE

<TABLE>
<CAPTION>
Average Years of Service
Annual ------------------------------------------------------------------
Remuneration 5 10 15 20 25--30
- ------------ -------- -------- ---------- ---------- ----------

The benefit amounts shown in the Pension Table are computed on a straight
life annuity basis. At January 1, 1998, the following individuals had the
indicated number of years of credited service for pension purposes: Mr. Bossidy,
6.5; Mr. Poses, 28.33; Mr. Burnham, 15.67; Mr. Barter, 21.83; Mr. Kreindler,
6.0; and Mr. Wallman, 1.83.

The amounts in the Salary and Bonus columns of the Summary Compensation
Table for 1997 would be included in computing remuneration for pension purposes.
Average annual remuneration under the Pension Plan is calculated based on the
highest paid 60 consecutive months of an employee's last 120 months of
employment.

Under his employment agreement, commencing on retirement, Mr. Bossidy is
entitled to receive during his lifetime Company facilities and services
comparable to those provided prior to his retirement, and a retirement benefit
equivalent to 60% of his final average compensation (based on his highest three
years of salary and bonus) payable annually for his lifetime, and 45% of his
final average compensation payable annually thereafter to his surviving spouse
for her lifetime. If Mr. Bossidy dies prior to retirement, a benefit equivalent
to 45% of his final average compensation will be paid to his surviving spouse
for her lifetime. Benefits under the agreement will be reduced by any retirement
benefits payable under the Pension Plan and Supplemental Plan, any survivor
benefit payable under the Company's executive life insurance program, and under
certain circumstances, benefits payable under pension plans of his former
employer.

EMPLOYMENT AND TERMINATION ARRANGEMENTS

Mr. Bossidy's employment agreement with the Company provides for his
employment as Chairman and Chief Executive Officer through April 1, 2000 at a
salary of $2,000,000 per year, and a target annual incentive bonus of at least
80% of salary. Mr. Bossidy also has agreed to be available as an advisor to and
representative of the Company following retirement, as mutually agreed to by him
and his successor. His employment agreement also provides for certain post-
retirement benefits which are described under 'Retirement Benefits.' The Company
has assumed obligations for certain life insurance policies and will be
reimbursed from the proceeds of the policies for premiums it pays; the value of
these premiums is reflected in the Summary Compensation Table.

In connection with Mr. Barter's retirement, the Committee determined that
following retirement his remaining unvested stock options and one third of his
remaining unvested restricted units would vest in accordance with their original
terms.

Under the Severance Plan for Senior Executives (the 'Plan'), the other
executive officers named in the Summary Compensation Table would be entitled to
payments equivalent to base salary and annual incentive bonus (and continuation
of certain benefits, such as group life and medical insurance coverage) for a
period of time if their employment is terminated other than for 'gross cause'
(which includes fraud and criminal conduct). The period would range from 18
months for any named officer hired after June 30, 1993 to 36 months for those
named officers employed on that date (but in no event beyond age 65), provided
that payments would be made in a lump sum following a change in control. The
Plan provides for an additional payment sufficient to eliminate the effect of
any applicable excise tax on severance payments in excess of an amount
determined under Section 280G of the Internal Revenue Code. Payments subject to
the excise tax would not be deductible by the Company.

2 -- APPOINTMENT OF INDEPENDENT ACCOUNTANTS

Upon the recommendation of the Audit Committee, which is composed entirely
of independent directors, the Board of Directors has appointed Price Waterhouse
LLP ('Price Waterhouse') as independent accountants for the Company to audit its
consolidated financial statements for 1998 and to perform audit-related
services, including review of the Company's quarterly interim financial
information and periodic reports and registration statements filed with the
Securities and Exchange Commission and consultation in connection with various
accounting and financial reporting matters. Price Waterhouse also performs
non-audit services for the Company.

The Board has directed that the appointment of Price Waterhouse be
submitted to the shareowners for approval. The affirmative vote of a majority of
the shares of Common Stock present or represented and entitled to vote on the
proposal at the Annual Meeting is required for approval. If the shareowners do
not approve, the Audit Committee and the Board will reconsider the appointment.

Total fees for services rendered by Price Waterhouse in 1997 to the Company
and its subsidiaries worldwide were approximately $14,100,000. The Company has
been advised by Price Waterhouse that it will have a representative present at
the Annual Meeting who will be

available to respond to appropriate questions. The representative will also have
the opportunity to make a statement if he desires to do so.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREOWNERS VOTE FOR THE
APPROVAL OF THE APPOINTMENT OF PRICE WATERHOUSE AS INDEPENDENT ACCOUNTANTS.

SHAREOWNER PROPOSALS

Shareowners have given the Company notice of their intention to introduce
the following proposals for consideration and action by the shareowners at the
Annual Meeting. The proposed resolutions and accompanying statements have been
provided by the respective proponents and the Company is not responsible for any
inaccuracies contained therein. For the reasons stated, the Board of Directors
does not support these proposals. The affirmative vote of a majority of the
shares of Common Stock present or represented and entitled to vote on the
proposals at the Annual Meeting is required for approval of each proposal.

3 -- SHAREOWNER PROPOSAL REGARDING
EXECUTIVE SEVERANCE PAY

This proposal has been submitted by the Teamsters Affiliates Pension Plan,
25 Louisiana Avenue, N.W., Washington, D.C. 20001 (the owner of 37,800 shares of
Common Stock).

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

'Proposal: Shareholders urge that the board of directors adopt a policy
that executive severance pay of over $1 million must be approved by the
shareholders as a separate issue for vote at the annual shareholder
meeting. Such a severance package must be tied to the performance of the
company stock over the next 3 years. This should include all pay, current
and deferred, and is not limited to cash, stock, options and benefits.'

Supporting Statement:

'Recent outcry against excessive executive compensation has included
criticism of companies, such as Disney and Apple, which have awarded
general severance packages. We believe that senior executives at
AlliedSignal are already paid excessively, and shareholders should have the
right to vote no on any additional severance packages.

'In 1996 AlliedSignal CEO Lawrence Bossidy received a salary of $2,000,000,
bonus of $2,800,000 and other annual compensation of $6,576, all other
compensation $1,028,889. For example, has over $79 million in unexercised
stock options. In September of this year, Mr. Bossidy made $12 million in
personal profit in a single day by selling his stock.

'In April 1997, Business Week compiled an Executive Compensation Scorecard,
comparing compensation of top executives to both shareholder return and
corporate profit with other industry peers. In both categories AlliedSignal
scored a 5 (with 1 as the best possible score and 5 as the worst).
AlliedSignal's score was in the worst 10% of its peers in terms what
shareholders earn compared to the CEO pay package.

'In addition to unnecessarily depleting the resources of the company, we
believe that excessive executive compensation may have the larger effect of
undermining productivity.

According to Business Week: `Researchers found that overpayment of CEOs,
relative to industry norms and lower-echelon compensation, tends to harm
management loyalty. The larger the gap between the CEO's pay and those in
lower management levels, the higher the turnover among subordinates. While
the study focused on higher management levels, [Charles] O'Reilly [of
Stanford University] thinks the negative impact of outsize CEO compensation
can hurt overall employee morale.' (October 13, 1997).

'At last year's annual shareholder meeting, when questioned on his pay
package, Bossidy responded, `CEO's do get paid a lot of money . . . and if
someone is going to get it, why not me?' We do not believe that to be a
valid argument.

'For all of these reasons we urge you to vote FOR this proposal.'

BOARD OF DIRECTORS' RECOMMENDATION -- THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREOWNERS VOTE AGAINST THIS PROPOSAL FOR THE FOLLOWING REASONS:

The Company's executive compensation programs are designed to attract and
retain highly qualified executives and motivate them to maximize shareowner
returns. These programs, which have been developed to be competitive with
compensation packages offered by other comparable employers, link a significant
portion of executive compensation to performance and to appreciation in the
price of the Common Stock.

The Board of Directors oversees the compensation arrangements for the
Company's officers, primarily through the Management Development and
Compensation Committee of the Board (see the 'Report of the Management
Development and Compensation Committee' above). The Board recognizes its
responsibility to make executive compensation decisions in a manner it believes
to be in the best interest of the Company and its shareowners.

The Company's severance program is intended to enhance the Company's
ability to attract the highest quality executives. These executives often must
relocate and forfeit significant bonus, stock and accumulated pension values
with their existing employers in order to join the Company. They generally are
unwilling to take such financial risks without some protection in the event that
their positions with the Company are adversely impacted by an unanticipated
change in circumstances. In addition, the severance program is intended to keep
executives focused and objective in dealing with Company matters, rather than
being distracted by the personal financial impact of their actions. With the
severance program, the Company's executives are provided with a degree of
financial protection that allows them to act decisively in maximizing shareowner
value.

The Board believes the executive severance plan described above under
'Employment and Termination Arrangements' is appropriate to address these
concerns and is comparable to similar plans at other major companies. Placing an
arbitrary ceiling on the Board's ability to provide such payments to senior
executives may put the Company at a competitive disadvantage and unduly inhibit
the Company's flexibility in making hiring decisions. Further, the Board
believes the proposal would be impracticable because the timing of hiring and
termination decisions may not coincide with an annual shareowners' meeting.

While the proposal relates to severance pay, the primary focus of the
supporting statement is on the compensation of Mr. Bossidy, who has led the
Company as Chief Executive Officer since

mid-1991. During that period, the price of the Company's shares has appreciated
429%, compared with 161% for the S&P 500 and 171% for the Dow Jones Industrial
Average. The Company's market value has increased from $4 billion to $20
billion, and the $16 billion increase has accrued to the benefit of the
shareowners. Since 1991, net income has grown at a compound average annual rate
of more than 14%, operating margin has increased from 4.7% to 11.4%, and
productivity has increased by an average of 5.8% a year. Employee satisfaction,
as measured by an independent survey, has improved markedly. In addition, Mr.
Bossidy has led a change in the Company's business portfolio from cyclical
businesses to higher-margin, higher-growth businesses, which has put the Company
in a better position to achieve consistent and substantial earnings growth well
into the next century. The independent directors continue to believe that he is
compensated fairly, both in light of his superior contributions to the Company
and its shareowners and in comparison to chief executive officers of comparable
large companies.

FOR THE REASONS STATED ABOVE, THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST THIS PROPOSAL.

4 -- SHAREOWNER PROPOSAL REGARDING
SHAREOWNER VOTING PROVISIONS

This proposal was submitted by Mr. Harold J. Mathis, Jr., P.O. Box 1209,
Richmond, Texas 77406-1209 (the owner of 1,292 shares of Common Stock).

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

'Recommend Board of Directors take steps necessary to implement this
shareholder resolution to reinstate simple majority vote on all issues that
can be submitted to shareholder vote.

'REINSTATE SIMPLE MAJORITY VOTE TO ENHANCE SHAREHOLDER VALUE. Delete all
AlliedSignal requirements for more than a 51%-majority vote. This includes
the Corporate By-laws which has a massive 80%-supermajority requirement.

'The bi-partisan National Conference of State Legislatures urged
States to ban them. Major pension funds, including those holding
AlliedSignal stock, declare that super-majority provisions are not in the
best interest of the shareholders.

'Also, require that any future super-majority proposal be put to
shareholder vote -- as a separate issue and not as part of a resolution
package.

'The AlliedSignal super-majority provision means that if a majority of
the shareholders (but less than an overwhelming 80%) vote to change certain
items, management can ignore the majority.

'A competitive company does not need protection from change by
requiring an overwhelming 80%-vote.

'These news reports indicate that management needs to be held
accountable -- instead of an 80%-barrier to ignore the majority of
shareholders:

AlliedSignal is under fire for late deliveries of substandard jetliner
parts, according to a Boeing Feb. 1997 letter.
Arizona Business Gazette May 8, 1997

`[AlliedSignal] quality and delivery performance continue to deteriorate to
unacceptable levels,' according to Boeing executive Andrew Stefan.
Arizona Business Gazette May 8, 1997

`Rejection rates continue to rise, particularly (in) Phoenix, Tucson,
Toronto, and Tempe. Production past-dues have increased from 78 to 463
since June 1996, with major offenders being Toronto, Tempe, South Bend
(Ind.), Tucson, Phoenix, and Boyne City (Mich.).'
Arizona Business Gazette May 8, 1997

'VOTE YES FOR RESOLUTION NO. 4: REINSTATE SIMPLE MAJORITY VOTE ON ALL
ISSUES THAT CAN BE SUBMITTED TO SHAREHOLDER VOTE AND INCREASE MANAGEMENT
ACCOUNTABILITY.'

BOARD OF DIRECTORS' RECOMMENDATION -- THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREOWNERS VOTE AGAINST THIS PROPOSAL FOR THE FOLLOWING REASONS:

Most proposals submitted to a vote of the Company's shareowners, whether by
management or the shareowners, currently require a vote of a majority of the
shares represented at a meeting, whether in person or by proxy. Consistent with
applicable Delaware law, the Company's shareowners in 1985 approved a
Certificate of Incorporation and By-laws that contained provisions requiring the
vote of 80% of the outstanding shares for certain actions. These limited
provisions relate to the elimination of the classified Board of Directors,
removal of directors, the calling of special meetings of shareowners and the
requirement that shareowner action be taken at a meeting.

These so-called 'super-majority' vote provisions of the Company's
Certificate of Incorporation and By-laws are intended to provide protection for
all shareowners against self-interested actions by one or a few large
shareowners. Similar provisions are included in the governing documents of many
public corporations. Such provisions are intended to encourage a person making
an unsolicited bid for the Company to negotiate with the Board of Directors to
reach terms that are fair and provide the best results for all shareowners.
Without such provisions, it may be possible for the holders of a majority of the
shares represented at a meeting to take actions that would give them effective
control of the Company without negotiating with the Board to achieve the best
results for the other shareowners.

The proposal contains several citations to a May 1997 newspaper article,
implying that the Company has not met its supply commitments to Boeing. In fact,
the concerns noted in the article were prompted by the initial inability of the
Company, like other Boeing suppliers and Boeing itself, to keep pace with an
unprecedented worldwide market increase in aircraft production schedules. Since
that time, the Company has met Boeing's demands and the increase in rejection
rates and production past-dues cited in the article has been reversed. Further,
the Company has not been responsible for any missed shipments or scheduled
deliveries by Boeing or for any halt in its production lines.

Adoption of this proposal would not in itself effectuate the changes
contemplated by the proposal. Further action by the shareowners would be
required to amend the By-laws and the Certificate of Incorporation. Under these
documents, an 80% vote of the outstanding shares would be required for approval.
Under Delaware law, amendments to the Certificate of Incorporation require a
recommendation from the Board of Directors prior to submission to shareowners.
While the Board would consider such amendments, it would do so consistent with
its fiduciary duty to act in a manner it believes to be in the best interest of
the Company and its shareowners.

FOR THE REASONS STATED ABOVE, THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST THIS PROPOSAL.

5 -- SHAREOWNER PROPOSAL REGARDING THE
ANNUAL ELECTION OF DIRECTORS

This proposal has been submitted by Mr. John Chevedden, 2215 Nelson Avenue,
No. 205, Redondo Beach, California 90278 (the owner of 884 shares of Common
Stock).

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

'The shareholders of AlliedSignal request the Board of Directors take
the necessary steps to amend the company's governing instruments, including
the corporate by-laws, to elect the entire Board of Directors each year.
This includes the requirement that any future change in the frequency of
election of directors be submitted to shareholder vote as a stand-alone
issue.

'The Business Week Nov. 25, 1996 Cover Story said for the `The Best
Boards: PLACE THE ENTIRE BOARD UP FOR ELECTION EVERY YEAR.'

'Institutional Shareholder Services, a proxy advisory firm that
studies management and shareholder resolutions, recommended a yes vote for
this resolution in 1997.

'This same resolution was approved by an impressive 44%-vote at the
1997 shareholder meeting exceeding the 42%-vote at the 1996 shareholder
meeting.

'AlliedSignal employees get annual reviews, yet give directors 3-years
slack between shareholder review.

'AlliedSignal directors are now employed by or are directors at
successful companies that have annual election of the entire Board.

'These are shareholders topics to ask the entire Board this year:

1) AlliedSignal-Arizona is under fire from Boeing for late deliveries of
substandard jetliner parts. [Aerospace is one of 3-main AlliedSignal
sectors.]
Arizona Business Gazette May 8, 1997

EEOC criticizes AlliedSignal-Arizona for age-discrimination layoffs.
Arizona Tribune April 30, 1997

AlliedSignal-Arizona rejection rates continue to rise in 3 AlliedSignal
Arizona factories. Also, production past-dues have quadrupled -- major
offenders are 3 AlliedSignal Arizona factories.
Arizona Business Gazette May 8, 1997

2) Mr. Bossidy, we know you can cut. Now show us how to grow.
Fortune Aug. 21, 1995

AlliedSignal is now a small player in the automotive supply world.
Automotive News Oct. 6, 1997

3) 'If employees, bankers, suppliers and management sense you've taken care
of yourself -- but are asking them to sacrifice -- you won't save the
company,' said Gerald Greenwald, CEO United Airlines.
Investor's Business Daily Aug. 27, 1997

Mr. Bossidy has more than $79-Million ($79,101,000) in unexercised stock
options.
Internet -- http://www.paywatch.org

4) 'Layoffs are a statement of failure. Who let the company get bloated in
the first place?' said Gerald Greenwald, CEO United Airlines.

We will eliminate 6,100 jobs.
Mr. Bossidy in USA Today July 24, 1996

AlliedSignal documents prove AlliedSignal planned to shut the Textron
Lycoming, Connecticut factory before buying it.
New Haven Advocate Feb. 27, 1997

5) AlliedSignal's U.S. defense business exceeds $1 Billion a year. [And
contributes to U.S. protection against mass destruction weapons].

AlliedSignal shipped 59 jet engines to China. The CIA reported China as
the top world trafficker in mass destruction weapons. U.S-supplied jet
engines contribute to world-wide cruise missile proliferation.
Aviation Week Aug. 4, 1997

'To encourage directors to give more attention to these important issues,
vote for ANNUAL ELECTION OF THE ENTIRE BOARD -- YES ON 5.'

BOARD OF DIRECTORS' RECOMMENDATION -- THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREOWNERS VOTE AGAINST THIS PROPOSAL FOR THE FOLLOWING REASONS:

The Board believes that directors elected to a classified board are no less
accountable to shareowners than they would be if all directors were elected
annually. Since at least four directors must stand for election each year, the
shareowners have the opportunity annually to vote against those directors as a
way of expressing any dissatisfaction they may have with the Board or
management. The Board addresses many important issues during the year and it
disagrees with any suggestion by the proponent that its attention to these
issues is in any way affected by the timing of elections.

The Company's current system of electing directors by classes was approved
by the shareowners in 1985. Under this method, as provided in the Company's
Certificate of Incorporation and By-laws, approximately one-third of the
directors are elected annually by the shareowners. For the reasons indicated
below, it is the Board's opinion that the classified Board serves the Company
and its shareowners well.

With the classified Board, the likelihood of continuity and stability in
the Board's business strategies and policies is enhanced since generally
two-thirds of the directors at all times will have had prior experience and
familiarity with the business and affairs of the Company. This enables the
directors to build on past experience and plan for a reasonable period into the
future.

The classified Board is intended to encourage persons who may seek to
acquire control of the Company to initiate such action through negotiations with
the Board. Otherwise, at least two meetings of shareowners would generally be
required to replace a majority of the Board. By reducing the threat of an abrupt
change in the composition of the entire Board, classification of directors would
provide the Board with an adequate opportunity to fulfill its duties to the
Company's shareowners to review any takeover proposal, study appropriate
alternatives and achieve the best results for all shareowners. The Board
believes that although a classified board enhances the ability to negotiate
favorable terms with a proponent of an unfriendly or unsolicited proposal, it
does not preclude takeover offers.

Adoption of this proposal would not automatically eliminate the classified
Board. Further action by the shareowners would be required to amend the By-laws
and the Certificate of Incorporation. Under these documents, an 80% vote of the
outstanding shares would be required for approval. Under Delaware law, an
amendment to the Certificate of Incorporation requires a recommendation from the
Board of Directors prior to submission to shareowners. While the Board would
consider such an amendment, it would do so consistent with its fiduciary duty to
act in a manner it believes to be in the best interest of the Company and its
shareowners.

FOR THE REASONS STATED ABOVE, THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST THIS PROPOSAL.

ADDITIONAL INFORMATION

OTHER ACTION AT THE MEETING

The Board of Directors was not aware within a reasonable time before this
solicitation of any other matter to be presented for action at the Annual
Meeting. If any additional matters are properly presented, the shares
represented by a properly signed proxy card will be voted in accordance with the
judgment of the persons named on the proxy card.

Under the Company's By-laws, a shareowner of record entitled to vote at the
Annual Meeting who intends to make a nomination for the election of directors at
the meeting must give the Secretary of the Company written notice of such
intention in accordance with the prescribed procedure. In general, the By-law
procedure (the full provisions of which govern) requires that the notice be
received at the Company's headquarters not less than 30 nor more than 60 days
prior to the meeting and that it set forth the shareowner's name, address and
number of shares of Common Stock beneficially owned, together with information
about the candidate that would be

required in a proxy statement and the candidate's written consent to be
nominated and to serve if elected. Nominations not made in accordance with the
procedure prescribed in the By-laws must be disregarded.

COST OF SOLICITATION

The cost of solicitation will be borne by the Company. In addition to
solicitation by mail, directors, officers and other employees of the Company may
solicit proxies personally or by telephone or other means of communication. The
Company will also reimburse brokers, banks and other intermediaries holding
stock in their names or those of their nominees for their reasonable expenses in
sending proxy material to the beneficial owners of the stock and obtaining their
proxies. The Company has retained Morrow & Co., New York, New York, at an
approximate total cost of $25,000, plus out-of-pocket expenses, to assist in the
solicitation of proxies by mail, personally or by telephone or other means of
communication.

SHAREOWNER PROPOSALS FOR 1999 ANNUAL MEETING

Shareowners may submit proposals on matters appropriate for shareowner
action at the Company's annual meetings, consistent with regulations adopted by
the Securities and Exchange Commission. Proposals to be considered for inclusion
in the Proxy Statement for the 1999 Annual Meeting must be received by the
Company not later than November 10, 1998. Proposals should be directed to the
attention of the Secretary, AlliedSignal Inc., P.O. Box 4000, Morristown, New
Jersey 07962.
------------------------
Shareowners are urged to send in their proxies without delay.

By Order of the Board of Directors

PETER M. KREINDLER
Senior Vice President,
General Counsel and Secretary

March 10, 1998

DIRECTIONS TO COMPANY HEADQUARTERS
101 COLUMBIA ROAD, MORRIS TOWNSHIP, N.J.

[AREA MAP]

FROM RTE. 80 (EAST OR WEST) AND RTE. 287 SOUTH:
Take Rte. 80 to Rte. 287 South to Exit 37 (Rte. 24 East -- Springfield). Follow
Rte. 24 East to Exit 2A (Rte. 510 West -- Morristown), which exits onto Columbia
Road. At second traffic light, make left into AlliedSignal.

FROM RTE. 287 NORTH:
Take Rte. 287 North to Exit 37 (Rte. 24 East -- Springfield). Follow Rte. 24
East to Exit 2A (Rte. 510 West -- Morristown), which exits onto Columbia Road.
At second traffic light, make left into AlliedSignal.

FROM NEWARK INTERNATIONAL AIRPORT:
Take Rte. 78 West to Rte. 24 West (Springfield -- Morristown). Follow Rte. 24
West to Exit 2A (Rte. 510 West -- Morristown), which exits onto Columbia Road.
At second traffic light, make left into AlliedSignal.

A-1

[LOGO]

NOTICE OF 1998 ANNUAL MEETING
AND PROXY STATEMENT

<PAGE>

APPENDIX 1
BANK OF N.Y. PROXY CARD

[LOGO] P R O X Y

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ALLIEDSIGNAL INC.
ANNUAL MEETING OF SHAREOWNERS--APRIL 27, 1998

The undersigned hereby appoints LAWRENCE A. BOSSIDY and PETER M. KREINDLER
as proxies (each with power to act alone and with full power of substitution) to
vote, as designated herein, all shares the undersigned is entitled to vote at
the Annual Meeting of Shareowners of AlliedSignal Inc. to be held on April 27,
1998, and at any and all adjournments thereof. The proxies are authorized to
vote in their discretion upon such other business as may properly come before
the Meeting and any and all adjournments thereof.

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

Your vote for the election of Directors and the other proposals described
in the accompanying Proxy Statement may be specified on the reverse side. The
nominees for Director are: Daniel P. Burnham, Russell E. Palmer, Ivan G.
Seidenberg, Andrew C. Sigler and Thomas P. Stafford.

<TABLE>
<S> <C>
NOTE: After signing, please insert this Proxy in the ALLIEDSIGNAL INC.
enclosed envelope so that the address at right shows P.O. BOX 11010
through the window. NEW YORK, N.Y. 10203-0010
</TABLE>

IF PROPERLY SIGNED, DATED AND RETURNED, THIS PROXY WILL BE VOTED AS
SPECIFIED ON THE REVERSE SIDE OR, IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE
VOTED "FOR" THE ELECTION OF ALL NOMINEES FOR DIRECTOR, "FOR" PROPOSAL 2 AND
"AGAINST" PROPOSALS 3 THROUGH 5.

(SPECIFY CHOICES AND SIGN ON THE REVERSE SIDE)

<PAGE>

Please complete (X) in blue or black ink.

A VOTE 'FOR' PROPOSALS 1 AND 2 IS RECOMMENDED BY THE BOARD OF DIRECTORS:

1. Election of Directors (D.P. Burnham, R.E. Palmer, I.G. Seidenberg, A.C.
Sigler, T.P. Stafford)

FOR all [ ] WITHHOLD AUTHORITY [ ] EXCEPTION [ ]
nominees to vote for all nominees (see Instruction)

Instruction: To withhold authority to vote for any individual nominee(s), mark
the 'Exception' box and write the name(s) on the line below.

______________________________________________________________________

2. Appointment of Independent Accountants

FOR [ ] AGAINST [ ] ABSTAIN [ ]

A VOTE 'AGAINST' PROPOSALS 3 THROUGH 5 IS RECOMMENDED BY THE BOARD OF DIRECTORS:

3. Shareowner proposal regarding executive severance pay

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. Shareowner proposal regarding shareowner voting provisions

FOR [ ] AGAINST [ ] ABSTAIN [ ]

5. Shareowner proposal regarding the annual election of directors

FOR [ ] AGAINST [ ] ABSTAIN [ ]

Please complete (X) if you:

Plan to attend the [ ] Have written comments [ ]
Annual Meeting on this card

PLEASE SIGN EXACTLY AS NAME APPEARS
ON THIS PROXY. JOINT OWNERS SHOULD
ALL SIGN. EXECUTORS, ADMINISTRATORS,
TRUSTEES AND OTHERS ACTING IN A
REPRESENTATIVE CAPACITY SHOULD
INDICATE TITLE WHEN SIGNING.

Dated ________________________, 1998

Signed _____________________________

_____________________________

PLEASE SIGN, DATE AND RETURN THIS
PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE.

Please complete (X) if you want your
vote kept confidential under the
policy described on page 1 of the
Proxy Statement. [ ]

<PAGE>

APPENDIX 2
SAVINGS PLAN PROXY CARD

REQUEST FOR CONFIDENTIAL INSTRUCTIONS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ALLIEDSIGNAL INC.
PURSUANT TO THE ALLIEDSIGNAL SAVINGS PLAN (THE 'PLAN')

The undersigned hereby instructs State Street Bank and Trust Company,
Trustee under the Plan, to vote, as designated herein, all shares of Common
Stock with respect to which the undersigned is entitled to instruct the Trustee
as to voting under the Plan at the Annual Meeting of Shareowners of AlliedSignal
Inc. to be held on April 27, 1998, and at any and all adjournments thereof. The
Trustee is also authorized to vote such shares in connection with the
transaction of such other business as may properly come before the Meeting and
any and all adjournments thereof.

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

IF THIS CARD IS PROPERLY SIGNED AND RETURNED, THE SHARES WILL BE VOTED AS
SPECIFIED HEREIN OR, IF NO CHOICE IS SPECIFIED, THEY WILL BE VOTED 'FOR' THE
ELECTION OF ALL NOMINEES FOR DIRECTOR, 'FOR' PROPOSAL 2 AND 'AGAINST' PROPOSALS
3 THROUGH 5. THE TRUSTEE WILL VOTE SHARES AS TO WHICH NO INSTRUCTIONS ARE
RECEIVED IN THE SAME RATIO AS SHARES WITH RESPECT TO WHICH INSTRUCTIONS HAVE
BEEN RECEIVED FROM OTHER PARTICIPANTS IN THE PLAN.

[CONTINUE AND SIGN ON THE REVERSE SIDE]

<PAGE>

A VOTE 'FOR' PROPOSALS 1 AND 2 IS RECOMMENDED BY THE BOARD OF DIRECTORS:

<TABLE>
<S> <C>
1. Election of Directors
(D.P. Burnham, R.E. Palmer, I.G. Seidenberg, A.C. Sigler and T.P. Stafford)

FOR all nominees [ ] WITHHOLD AUTHORITY [ ]
(except as noted below) to vote for all nominees
</TABLE>

INSTRUCTION: To withhold authority to vote for any individual nominee(s),
write the name(s) on the line below

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

2. Appointment of Independent Accountants

FOR [ ] AGAINST [ ] ABSTAIN [ ]

A VOTE 'AGAINST' PROPOSALS 3-5 IS RECOMMENDED BY THE BOARD OF DIRECTORS:

3. Shareowner proposal regarding executive severance pay

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. Shareowner proposal regarding shareowner voting provisions

FOR [ ] AGAINST [ ] ABSTAIN [ ]

5. Shareowner proposal regarding the annual election of directors

FOR [ ] AGAINST [ ] ABSTAIN [ ]

PLEASE SIGN EXACTLY AS NAME APPEARS.

Dated __________________________, 1998

Signed _______________________________

PLEASE SIGN, DATE AND RETURN THIS CARD PROMPTLY IN THE ENCLOSED ENVELOPE.

<PAGE>

APPENDIX 3
THRIFT PLAN PROXY CARD

REQUEST FOR CONFIDENTIAL INSTRUCTIONS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ALLIEDSIGNAL INC.
PURSUANT TO THE ALLIEDSIGNAL THRIFT PLAN (THE 'PLAN')

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

[CONTINUE AND SIGN ON THE REVERSE SIDE]

<PAGE>

A VOTE 'FOR' PROPOSALS 1 AND 2 IS RECOMMENDED BY THE BOARD OF DIRECTORS:

<TABLE>
<S> <C>
1. Election of Directors
(D.P. Burnham, R.E. Palmer, I.G. Seidenberg, A.C. Sigler and T.P. Stafford)

FOR all nominees [ ] WITHHOLD AUTHORITY [ ]
(except as noted below) to vote for all nominees
</TABLE>

INSTRUCTION: To withhold authority to vote for any individual nominee(s),
write the name(s) on the line below

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

2. Appointment of Independent Accountants

FOR [ ] AGAINST [ ] ABSTAIN [ ]

A VOTE 'AGAINST' PROPOSALS 3-5 IS RECOMMENDED BY THE BOARD OF DIRECTORS:

3. Shareowner proposal regarding executive severance pay

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. Shareowner proposal regarding shareowner voting provisions

FOR [ ] AGAINST [ ] ABSTAIN [ ]

5. Shareowner proposal regarding the annual election of directors

FOR [ ] AGAINST [ ] ABSTAIN [ ]

PLEASE SIGN EXACTLY AS NAME APPEARS.

Dated __________________________, 1998

Signed _______________________________

PLEASE SIGN, DATE AND RETURN THIS CARD PROMPTLY IN THE ENCLOSED ENVELOPE.

<PAGE>

APPENDIX 4
TRUCK BRAKE SYSTEMS PLAN PROXY CARD

REQUEST FOR CONFIDENTIAL INSTRUCTIONS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ALLIEDSIGNAL INC.
PURSUANT TO THE ALLIEDSIGNAL TRUCK BRAKE SYSTEMS COMPANY SAVINGS PLAN (THE
'PLAN')

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

[CONTINUE AND SIGN ON THE REVERSE SIDE]

<PAGE>

A VOTE 'FOR' PROPOSALS 1 AND 2 IS RECOMMENDED BY THE BOARD OF DIRECTORS:

<TABLE>
<S> <C>
1. Election of Directors
(D.P. Burnham, R.E. Palmer, I.G. Seidenberg, A.C. Sigler and T.P. Stafford)

FOR all nominees [ ] WITHHOLD AUTHORITY [ ]
(except as noted below) to vote for all nominees
</TABLE>

INSTRUCTION: To withhold authority to vote for any individual nominee(s),
write the name(s) on the line below

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

2. Appointment of Independent Accountants

FOR [ ] AGAINST [ ] ABSTAIN [ ]

A VOTE 'AGAINST' PROPOSALS 3-5 IS RECOMMENDED BY THE BOARD OF DIRECTORS:

3. Shareowner proposal regarding executive severance pay

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. Shareowner proposal regarding shareowner voting provisions

FOR [ ] AGAINST [ ] ABSTAIN [ ]

5. Shareowner proposal regarding the annual election of directors

FOR [ ] AGAINST [ ] ABSTAIN [ ]

PLEASE SIGN EXACTLY AS NAME APPEARS.

Dated __________________________, 1998

Signed _______________________________

PLEASE SIGN, DATE AND RETURN THIS CARD PROMPTLY IN THE ENCLOSED ENVELOPE.

<PAGE>

APPENDIX 5
ASEC MANUFACTURING PLAN PROXY CARD

REQUEST FOR CONFIDENTIAL INSTRUCTIONS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ALLIEDSIGNAL INC.
PURSUANT TO THE ASEC MANUFACTURING SAVINGS PLAN (THE 'PLAN')

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

[CONTINUE AND SIGN ON THE REVERSE SIDE]

<PAGE>

A VOTE 'FOR' PROPOSALS 1 AND 2 IS RECOMMENDED BY THE BOARD OF DIRECTORS:

<TABLE>
<S> <C>
1. Election of Directors
(D.P. Burnham, R.E. Palmer, I.G. Seidenberg, A.C. Sigler and T.P. Stafford)

FOR all nominees [ ] WITHHOLD AUTHORITY [ ]
(except as noted below) to vote for all nominees
</TABLE>

INSTRUCTION: To withhold authority to vote for any individual nominee(s),
write the name(s) on the line below

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

2. Appointment of Independent Accountants

FOR [ ] AGAINST [ ] ABSTAIN [ ]

A VOTE 'AGAINST' PROPOSALS 3-5 IS RECOMMENDED BY THE BOARD OF DIRECTORS:

3. Shareowner proposal regarding executive severance pay

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. Shareowner proposal regarding shareowner voting provisions

FOR [ ] AGAINST [ ] ABSTAIN [ ]

5. Shareowner proposal regarding the annual election of directors

FOR [ ] AGAINST [ ] ABSTAIN [ ]

PLEASE SIGN EXACTLY AS NAME APPEARS.

Dated __________________________, 1998

Signed _______________________________

PLEASE SIGN, DATE AND RETURN THIS CARD PROMPTLY IN THE ENCLOSED ENVELOPE.

<PAGE>

APPENDIX 6
SP LETTER

[LOGO] AlliedSignal Inc.
P.O. Box 3000
Morristown, NJ 07962-2496

LARRY BOSSIDY
Chairman and
Chief Executive Officer

March 10, 1998

Dear Plan Participant:

Thanks to the commitment and performance of AlliedSignal's employees, the
company recorded a 15% increase in earnings per share in 1997. It was the sixth
consecutive year that AlliedSignal delivered earnings growth of at least 15%.
The record of the past several years gives us confidence that AlliedSignal can
deliver consistent, substantial growth well into the future. After outperforming
the market averages in 1995 and 1996, the market performance of AlliedSignal
shares lagged the averages in 1997 but still rose by 16%. In addition, the
common stock dividend was raised again this year by 15%.

Enclosed is a meeting notice and proxy statement for the 1998 Annual Meeting of
Shareowners. As a plan participant, you are entitled to instruct the Trustee,
State Street Bank and Trust Company, how to vote the AlliedSignal shares
attributable to your plan account. The proxy statement includes the proposals to
be voted on, as well as the recommendations of the Board of Directors. A card
requesting your confidential voting instructions is enclosed for your use.

This is your opportunity to have the plan shares voted in accordance with your
wishes. All votes are important, and I urge you to exercise your right to vote
by completing the instruction card at your earliest convenience.

If you own AlliedSignal shares other than through the plans, you will receive a
separate proxy card for those shares. To vote all of your shares, you should
return your plan instruction card in the enclosed envelope to the Trustee, and
return any proxy card you receive for other shares in the separate envelope
provided with that card.

I am grateful for your support as we continue to progress and move closer to
realizing our vision of becoming one of the world's premier companies.

Sincerely,

LARRY BOSSIDY

Enclosures

<PAGE>