-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, OrE7FpgYNDyKR4+I2gtfCvodJYexLD8XwS+6KgUeSSSAJl7tC6yervjRDqSY5Lzu rRD4asaVLA8+H3H/p+hknQ== 0000006164-95-000020.txt : 19950516 0000006164-95-000020.hdr.sgml : 19950516 ACCESSION NUMBER: 0000006164-95-000020 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMP INC CENTRAL INDEX KEY: 0000006164 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS, NEC [3679] IRS NUMBER: 230332575 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04235 FILM NUMBER: 95538616 BUSINESS ADDRESS: STREET 1: P O 3608 CITY: HARRISBURGH STATE: PA ZIP: 17105 BUSINESS PHONE: 7175640100 MAIL ADDRESS: STREET 1: PO BOX 3608 M S 176 41 CITY: HARRISBURG STATE: PA ZIP: 17105 FORMER COMPANY: FORMER CONFORMED NAME: AMP INC & PAMCOR INC DATE OF NAME CHANGE: 19890410 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN METAL PRODUCTS CO DATE OF NAME CHANGE: 19661211 10-Q 1 10Q INFORMATION SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (mark one) [XX] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 1995 OR [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _________ to _________ ******************************** Commission File No. 1-4235 AMP INCORPORATED a Pennsylvania corporation (Exact name of registrant as specified in charter, and state of incorporation) ******************************** Employer Identification No. 23-0332575 Harrisburg, Pennsylvania 17105-3608 (Address of principal executive offices of registrant) (717) 564-0100 (Registrant's telephone number, including area code) ******************************** Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X]. NO [ ]. The number of shares of AMP Common Stock (without Par Value) outstanding at May 10, 1995 was 209,689,805. AMP Incorporated & Subsidiaries PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The Consolidated Statements of Income and the Consolidated Statements of Cash Flows for the three months ended March 31, 1995 and 1994, and the Consolidated Balance Sheets at March 31, 1995 and December 31, 1994, are presented below. See the notes to these condensed consolidated financial statements at the end thereof. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (dollars in thousands, except per share data) For the Three Months Ended March 31, 1995 1994 ----------- ----------- Net Sales.......................... $ 1,202,800 $ 906,123 Cost of Sales...................... 812,716 603,967 ----------- ----------- Gross income................... 390,084 302,156 Selling, General and Administrative Expenses........... 200,484 162,173 ----------- ----------- Income from operations......... 189,600 139,983 Interest Expense................... (6,764) (4,247) Other Deductions, net.............. (14,332) (6,516) ----------- ----------- Income before income taxes..... 168,504 129,220 Income Taxes....................... 63,700 49,670 ----------- ----------- Net Income......................... $ 104,804 $ 79,550 =========== =========== *Per Share - Net income............ $.50 $.38 Cash dividends.......... $.23 $.21 *Weighted average number of shares.. 209,653,300 209,832,704 =========== =========== *Per share data and weighted average shares have been retroactively restated to reflect the 2-for-1 stock split on March 2, 1995. AMP Incorporated & Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (Condensed and Unaudited) (dollars in thousands) For the Three Months Ended March 31, 1995 1994 --------- --------- Cash and Cash Equivalents at January 1.................. $ 239,937 $ 257,678 Operating Activities: Net income................................ 104,804 79,550 Noncash adjustments - Depreciation and amortization........... 77,697 67,900 Changes in operating assets and liabilities........................ (60,844) (57,739) Other, net.............................. 10,924 (7,779) --------- --------- Cash provided by operating activities........................... 132,581 81,932 --------- --------- Investing Activities: Additions to property, plant and equipment............................ (139,380) (88,104) Other, net................................ (2,481) 9,844 --------- --------- Cash used for investing activities........................... (141,861) (78,260) --------- --------- Financing Activities: Changes in short-term debt................ 49,630 (33,473) Additions to long-term debt............... 10,466 37,974 Reductions of long-term debt.............. (13,564) (359) Purchases of treasury stock............... (112) -- Dividends paid............................ (48,220) (44,065) --------- --------- Cash used for financing activities........................... (1,800) (39,923) --------- ---------- Effect of Exchange Rate Changes on Cash.................................... 6,096 4,239 --------- ---------- Cash and Cash Equivalents at March 31....... $ 234,953 $ 225,666 ========= ========== Changes in Operating Assets and Liabilities: Receivables............................... $ (52,699) $ (98,250) Inventories............................... (16,608) (7,140) Other current assets...................... (18,937) (27,366) Payables, trade and other................. (16,585) 35,226 Accrued payrolls and benefits............. 24,251 9,735 Other accrued liabilities................. 19,734 30,056 --------- --------- $ (60,844) $ (57,739) ========= ========= Income tax payments......................... $ 51,370 $ 30,679 Interest paid during the periods was approximately equal to amounts charged to expense. AMP Incorporated & Subsidiaries CONSOLIDATED BALANCE SHEETS (Condensed) (dollars in thousands) March 31, December 31, 1995 1994 ----------- ----------- ASSETS (unaudited) Current Assets: Cash and cash equivalents.......... $ 234,953 $ 239,937 Securities available for sale...... 144,931 155,458 Receivables........................ 953,707 838,389 Inventories--- Finished goods and work in process........................ 361,963 335,028 Purchased and manufactured parts. 195,695 180,561 Raw materials.................... 63,908 65,537 ----------- ----------- Total inventories.............. 621,566 581,126 Other current assets............... 227,962 196,913 ----------- ----------- Total current assets........... 2,183,119 2,011,823 ----------- ----------- Property, Plant and Equipment........ 3,698,084 3,451,442 Less - Accumulated depreciation.... 2,114,255 1,980,249 ----------- ----------- Property, plant and equipment, net........................... 1,583,829 1,471,193 ----------- ----------- Investments and Other Assets......... 291,011 287,898 ----------- ----------- TOTAL ASSETS......................... $ 4,057,959 $ 3,770,914 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Short-term debt.................... $ 237,045 $ 175,820 Payables, trade and other.......... 424,309 388,979 Accrued liabilities................ 489,408 446,549 ----------- ----------- Total current liabilities........ 1,150,762 1,011,348 Long-Term Debt....................... 232,686 211,244 Other Liabilities and Deferred Credits................... 229,684 213,907 ----------- ----------- Total liabilities................ 1,613,132 1,436,499 Shareholders' Equity................. 2,444,827 2,334,415 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.............................. $ 4,057,959 $ 3,770,914 =========== =========== AMP Incorporated & Subsidiaries NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (March 31, 1995, Unaudited) 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The condensed financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report and Form 10-K. The information furnished reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FIRST QUARTER 1995 HIGHLIGHTS SALES Record $1.20 billion; up 33% from $906 million in first quarter 1994, up 10% from $1.10 billion in fourth quarter 1994 EARNINGS Record 50 cents/share; up 32% from 38 cents/share in first quarter 1994 and 4% from 48 cents/share in fourth quarter 1994 BOOKINGS Record $1.30 billion, up 32% from $985 million in first quarter 1994 and 19% from $1.09 billion in fourth quarter 1994 ORDER BACKLOG Up $104 million during quarter to record $729 million EMPLOYMENT Up 1,100 during quarter to 31,500 CAPITAL EXPENDITURES $139 million in first quarter; over $550 million expected for year DIVIDEND ACTION/STOCK SPLIT On Wednesday, April 26, 1995, the Board of Directors declared a regular quarterly dividend of 23 cents per share, payable June 1, 1995 to holders of record May 8, 1995. The current indicated annual rate of 92 cents per share is up from 84 cents in 1994 and 80 cents in 1993 -_ and is the 42nd consecutive annual increase. Pursuant to a two-for-one stock split on March 2, 1995, one additional share was distributed for each share held on the February 6, 1995 record date. PRODUCT EXPANSION AMP is now far more than just the world's greatest connector company. Our mission is to steadily evolve from being the leading supplier of electrical/electronic connectors (still nearly 90% of sales) into a global producer of total interconnection systems, value-added assemblies, and related electrical/electronic components. Through new product development, acquisitions, and strategic alliances we have broadened in recent years into cables, cable assemblies, panel assemblies, printed circuit boards, networking/premises wiring units, PCMCIA cards, opto-electronic devices, sensors, and wireless systems components and assemblies. Soon to be introduced will be next- generation ATM (Asynchronous Transfer Mode) telecommunications switching systems. The common thread throughout is "connectivity" - from simple terminals crimped on the end of a wire to sophisticated connection-intensive assemblies and units. Sockets for Pentium(TM), Alpha and other new semiconductor devices; MICTOR high-density board-to-board connector; AMP-AKZO printed circuit board; piezoelectric sensor for accelerometers; PCMCIA card for computer add-on capabilities; and computer cable assembly. AMP MINIWEDGE connectors are part of a growing family of electrical power line connections. ANNUAL MEETING REPORT The AMP Incorporated Annual Meeting was held April 26, 1995, at 10:30 a.m. at the M. C. Benton, Jr. Convention and Civic Center, Winston- Salem, North Carolina. FORMAL BUSINESS Chairman James E. Marley stated that 84% of the stock was represented in person or by proxy. The following Directors were elected: D.F. Baker W.J. Hudson W.F. Raab R.D. DeNunzio J.E. Marley P.G. Schloemer B.H. Franklin H.A. McInnes T. Shiina J.M. Hixon J.C. Morley Each of the directors received over 99% of the votes cast. The proposals to approve the revised Management Incentive Plan and to approve the 1993 Long-Term Equity Incentive Plan as amended were passed by over 95% of the votes cast and 89% of the shareholders entitled to vote and either present in person or represented by a proxy, respectively. The shareholder proposal relating to minority and gender inclusiveness in senior management and on the Board of Directors was defeated, having received less than 7% of the votes cast. NEWS RELEASE A news release on current results and outlook was made Wednesday, April 26, 1995: SALES AND EARNINGS Reflecting the good growth in most of the industrialized world and in the markets we serve, and also the weaker U.S. dollar, sales and earnings set new quarterly highs well ahead of year-earlier and prior quarter levels. First quarter sales of $1.20 billion and earnings of 50 cents per share were up 33% and 32% respectively from $906 million and 38 cents per share a year ago, and up 10% and 4% from $1.10 billion and 48 cents in the fourth quarter 1994. This was better than we expected when we began the quarter, but closely in line with current analyst expectations. The weakening of the U.S. dollar added $63 million to sales from the year-earlier period and $9 million from the fourth quarter. Exchange rates staying at current levels the rest of this year would add $200 million to sales and several cents to earnings. U.S. sales (40% of the worldwide total) were up 16% - similar to the 15% growth rate for all of 1994. Sales continue to be strongest in the automotive, communications equipment, and industrial/commercial electronics markets. International sales were up 34% in local currencies and 46% in U.S. dollars. European sales (35% of the worldwide total) were up 36% in local currencies and 53% in U.S. dollars - much better than the 16% local currency and 17% dollar growth rates in all of 1994. Strongest country growth was in Germany, Great Britain, and Spain; strongest markets were automotive, communications, and consumer goods. 1995 results include the results of SIMEL and ARA acquired in December 1994, which will add about 5% to our European sales this year. Asia/Pacific sales (21% of the total) grew 27% in local currencies and 40% in U.S. dollars - much better than the 11% local currency and 18% U.S. dollar growth rates for all of 1994. Strongest country growth was in Hong Kong, Korea, and Taiwan; strongest markets were utilities, networking, and consumer electronics. In contrast to the slow recovery of the Japanese economy, our Japanese sales (over half of regional sales) grew 17% in local currency and 33% in U.S. dollars compared to the year-earlier period. Sales in the Americas outside the U.S. were up 34%, compared to 29% for all of 1994. The recession and weaker peso in Mexico did not have a significant effect on our regional performance. Worldwide profit margins (15.8% operating, 14.0% pretax, 8.7% after- tax) held fairly steady with the first quarter of 1994 (15.4%, 14.3%, 8.8%) and for all of 1994 (16.1%, 14.8%, 9.2%). The current tax rate of 37.8% is similar to the year-earlier 38.4% and 37.8% for all of 1994. Return on shareholders' equity improved to 17.5% from 15.2% in first quarter 1994 and 16.8% for all of 1994. Other Deductions, net, was higher than expected primarily because of higher than usual legal expenses. OUTLOOK We believe the outlook is good for continued AMP growth during the rest of this year. The significant increase in the order backlog should lead to record sales again in the second quarter _ which should permit further earnings growth. Our assumptions are that we are in a period of broadening, sustainable economic growth throughout the world, and that the electrical/electronic markets we serve have excellent prospects of continuing to grow two to three times GDP growth in most countries. The only sign of slowing we've seen is in the interest-sensitive, housing-related U.S. appliance market, which looks flat this year after modest annual growth for several years. However, we do not believe this is a forerunner of a broad cyclical downturn and recession, but rather of a more modest, sustainable growth rate ahead for the U.S. economy. We still expect our U.S. sales growth this year to be similar to last year's 15%. Worldwide we think that if present economic trends and currency exchange rate levels continue, our sales growth rate could be better than last year when sales rose 17% to $4.0 billion. We are just past the mid-point of the decade of the 1990s. During the first half, while experiencing recessions in the U.S., Europe, and Japan, we continued to build our long-term growth capabilities. As the decade began, we launched our Journey to Excellence to accelerate our productivity, quality and service improvement efforts, and our formal product/market diversification program, and intensified our acquisition/strategic alliance activities. We continued to make timely entry into new geographic markets each year, increase capital expenditures, and modernize and expand facilities. We also maintained spending on research, development, and engineering at 11-12% of sales - - and our position as one of the top 25 U.S. patent holders. So far during the 1990s we have: - - Increased sales from $2.8 billion in 1989 to about $5 billion expected this year - - Increased earnings from $1.32 per share in 1989 to over $2.00 expected this year. (In 1994 earnings rose 24% to $1.76 per share.) - - Increased capital spending from $252 million in 1989 to over $550 million expected this year - - Increased RD&E spending from $333 million in 1989 to over $525 million expected in 1995 - - Formed subsidiaries in ten more countries, and - - Significantly improved quality, deliveries, customer approval ratings, sales per employee, and sales per sq. ft. Our goal is to grow better than 1 1/2 times the 6-9% annual growth rate expected for the connector industry - to reach or exceed $10 billion sales early in the next century - while restoring profit margins and return on shareholders' equity to earlier levels (18% pretax, 20% ROE). With the foundation we've built in recent years, we believe the prospects are good for achieving our goals assuming favorable business conditions. We continue to gain share in our core business of connection devices (nearly 90% of sales, 20% market share in a $22 billion market); while making good progress in addressing new, large, fast-growing markets - over $60 billion - in cables, cable assemblies, printed circuit boards, panel assemblies, networking/premises wiring units and assemblies, sensors, "smart" cards, and ATM switching systems. EXPANSION Capital expenditures have risen from $330 million in 1993 and $457 million last year to over $550 million expected this year as we steadily add capabilities for producing new products (currently 200 new part numbers/day; 50,000/year) and add capacity for the good growth expected in the next few years. With expansion planned in over a dozen countries, we expect to add more space than last year when floor area rose 700,000 sq. ft. to 10.8 million sq. ft. We entered our 36th country outside the U.S. with the recent formation of a subsidiary in Slovenia. MERGER WITH M/A-COM On March 10, 1995, we announced a proposed merger of M/A-COM, Inc. into AMP by offering .28 AMP shares for each M/A-COM share. About 8 million AMP shares will be issued. Based in Lowell, MA, M/A-COM is a leading producer of RF, microwave and millimeter wave components (including connectors) for the wireless communications market. 1994 sales were $342 million; income from continuing operations $3.4 million. A vote by M/A-COM shareholders is expected in mid-June. The merger, which is not expected to significantly affect earnings this year, will give AMP much greater participation in a fast growing market and give M/A-COM products much better market exposure throughout the world. The two companies serve many of the same customers. When the merger is completed, M/A-COM results will be included in our worldwide results. - ---------------------------------------------------------------------------- Comments at the annual meeting included a review by President and CEO William J. Hudson of our accelerated efforts to transform AMP into a more sharply focused, globally integrated organization pursuing a clearly understood strategy of core business growth accompanied by aggressive product and market diversification. Chairman James E. Marley reviewed our broadening activities in human resources - education, training, managerial and executive development, and organizational planning. Jay Hassan, Vice President-Global Interconnect Systems Business, reviewed our product/market diversification efforts - particularly our growing involvement in the rapidly evolving "Information Superhighway." FORTUNE 500 RANKINGS (based on 1994 results) Overall** Electronics* Sales 285 12 Net Income 173 9 Net Income as % of Sales (9.2%) 100 12 Net Income as % of Assets (9.8%) 45 10 Net Income as % of Equity (15.8%) 187 21 10-Year Earnings Per Share Growth Rate (6.5%) 173 17 *39 Companies **Now includes both industrial and service companies PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS The Annual Meeting of Shareholders of AMP Incorporated was held on Wednesday, April 26, 1995 beginning at 10:30 a.m., local time, at the M.C. Benton, Jr. Convention and Civic Center, Winston-Salem, North Carolina. As of the record date (March 10, 1995) for the Annual Meeting, 209,679,077 shares of Common Stock were outstanding and entitled to vote. 176,137,772 shares, representing over 84% of the outstanding Common Stock eligible to vote, were represented at the Annual Meeting either in person or by proxy. * All of the directors of the Company, eleven in number, were elected at the Annual Meeting, each by an affirmative vote of at least 99% of the votes cast. The results of the vote tabulation for each director are as follows: Director Votes For Votes Withheld -------- --------- -------------- Dexter F. Baker 175,319,160 818,612 Ralph D. DeNunzio 175,404,330 733,442 Barbara H. Franklin 175,439,242 698,530 Joseph M. Hixon III 175,461,713 676,059 William J. Hudson, Jr. 175,471,319 666,453 James E. Marley 175,463,469 674,303 Harold A. McInnes 175,331,280 806,492 John C. Morley 175,457,415 680,357 Walter F. Raab 175,250,675 887,097 Paul G. Schloemer 175,329,512 808,260 Takeo Shiina 175,436,428 701,344 * The proposal for shareholder approval of the Company's revised AMP Management Incentive Plan, under which the Company will annually reward the Company's officers and key senior executives for the achievement of corporate-wide and business unit-specific financial performance targets pre-established by the Compensation and Management Development Committee, together with individual nonfinancial performance objectives determined in advance for each participant, was passed by an affirmative vote of over 95% of the votes cast. On this matter, which was deemed a routine proposal under the rules of the New York Stock Exchange, 166,050,540 votes were for the proposal, 7,722,610 votes were against, and 3,364,622 votes abstained. Abstentions and broker non-votes were not counted as votes cast. * The proposal for shareholder approval of the Company's AMP Incorporated 1993 Long-Term Equity Incentive Plan as amended, under which the Company can award multiple year performance-based restricted stock in addition to the Company's historical Stock Bonus Units, Supplemental Cash Bonuses, and Stock Options to attract, retain and motivate the Company's key employees, was passed by an affirmative vote of just over 89% of the shares of Common Stock entitled to vote and either present in person or represented by proxy. On this matter, which was deemed a routine proposal under the rules of the New York Stock Exchange, 156,928,551 votes were for the proposal, 17,043,631 votes were against, and 2,165,590 votes abstained. Abstentions were counted in determining the total number of shares present in person or represented by proxy and entitled to vote. * The shareholder proposal submitted by The Dominican Sisters of Adrian, Michigan and seeking action by the Company's Board of Directors to i) publicly commit the Company to a policy of greater diversity in senior management and Board positions; ii) develop a plan to effect such diversity, including time line expectations, and periodically report on progress in the implementation of the plan; and iii) establish a Nominating Committee to further the first two objectives, did not pass, receiving only 10,562,829 votes, or less than 7%, of the votes cast. On this matter, which was deemed non- routine under the rules of the New York Stock Exchange, 140,983,260 votes were against the proposal, 13,037,709 votes abstained, and 11,553,974 votes were broker non-votes. Abstentions and broker non- votes were not counted as votes cast. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) Exhibits -- 10.A - Amendments dated March 1, 1995 to executive life insurance agreements in the form dated October, 1990 10.B - Executive split-dollar life insurance agreements in the form dated January, 1995 10.C - AMP Incorporated Pension Restoration Plan (January 1, 1995 Restatement), a supplemental employee retirement plan 10.D - AMP Incorporated Deferred Compensation Plan effective January 1, 1995 for selected management and highly compensated employees 27 - Financial Data Schedule (B) Reports on Form 8-K -- A Current Report on Form 8-K dated January 25, 1995 was filed by the Company during the quarter ended March 31, 1995. In Item 5 of such report it was disclosed that the Board of Directors had declared a two-for-one split of the Company's Common Stock without par value for shares issued as of the close of business on February 6, 1995. The report indicated that certificates representing one additional share for each share of Common Stock issued as of said date would be distributed to shareholders on or about March 1, 1995. The report also disclosed that, as permitted under Section 1914(c)(3)(ii) of the Pennsylvania Business Corporation Law of 1988, as amended, the Board of Directors on its own action increased the number of authorized shares of Common Stock from 350 million to 700 million, in proportion to the 2-for-1 stock split. A Current Report on Form 8-K dated March 10, 1995 was also filed by the Company during the quarter ended March 31, 1995. In Item 5 of such report it was disclosed that the Company and M/A-Com, Inc., a Massachusetts corporation, had jointly announced in a press release that they had entered into an Agreement and Plan of Merger pursuant to which a wholly-owned subsidiary of the Company will, subject to the satisfaction of certain conditions, merge with and into M/A-Com, Inc., with M/A-Com, Inc. surviving as a wholly-owned subsidiary of the Company. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: May 12, 1995 AMP INCORPORATED (Registrant) By: __________________________________ R. Ripp Vice President and Chief Financial Officer By: __________________________________ David C. Cornelius Controller EXHIBIT INDEX ------------- Exhibit Number Description ------- ----------- 10.A - Amendments dated March 1, 1995 to executive life insurance agreements in the form dated October, 1990 10.B - Executive split-dollar life insurance agreements in the form dated January, 1995 10.C - AMP Incorporated Pension Restoration Plan (January 1, 1995 Restatement), a supplemental employee retirement plan 10.D - AMP Incorporated Deferred Compensation Plan effective January 1, 1995 for selected management and highly compensated employees 27 - Financial Data Schedule EX-10.A 2 EX-10.A AMEND SPLIT-DOLLAR LIFE INSURANCE AGR EX- 10.A -------- AMP Incorporated Split-Dollar Life Insurance Agreement First Amendment Amendment Dated & Effective March 1, 1995 Whereas AMP Incorporated (hereinafter, the "Corporation") and the undersigned Employee entered into a Split-Dollar Life Insurance Agreement (the "Agreement") originally effective October 1, 1990 for the purpose of assisting the Employee with a personal life insurance program in recognition of the Employee's contributions to the business success of the Corporation and also as an inducement to the Employee's continued employment; Whereas Section 6.2 of the Agreement allows that the original Agreement may be amended only by express written agreement signed by both the Employee and a duly authorized representative of the Corporation; Whereas the Corporation desires to amend the Agreement in the following manner with the agreement of the Employee; Now, Therefore, in consideration of the foregoing, the Employee and the Corporation agree as follows, effective March 1, 1995: 1. Section 1.2 is hereby deleted in its entirety and a new Section 1.2 substituted therefore to read as follows: " 1.2 Plan Death Benefits. The Employee's death benefit under the Plan shall be the amount listed in Exhibit E, a copy of which is attached." 2. Article V, Rights Upon Termination of Agreement or Surrender of Policy, is amended by adding at the end thereof a new Section 5.4 to read in its entirety as follows: "5.4 Rights Upon a Change in Control. Notwithstanding any other provision of this Agreement to the contrary, upon a "Change in Control," as hereinafter defined, this Agreement may not be terminated (except by mutual consent) by reason of the termination of the Employee's employment with the Corporation before the later of (i) the Policy anniversary date next following the Employee's 65th birthday, or (ii) the expiration of fifteen (15) Policy years from the date of the Policy, unless the Parties mutually consent to the continuation of this Agreement at that time. For purposes of this Agreement, a "Change in Control" shall be deemed to have occurred if: 1. The acquisition of beneficial ownership (other than from the Corporation) by any person, entity or "group," within the meaning of Section 13 (d)(3) or Section 14 (d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act"), excluding, for this purpose, the Corporation or its subsidiaries, or any employee benefit plan of the Corporation or its subsidiaries that acquires beneficial ownership of voting securities of the Corporation (within the meaning of Rule 13d-3 promulgated under the Exchange Act), of 30% or more of either the then outstanding shares of common stock or the combined voting power of the Corporation's then outstanding voting securities entitled to vote generally in the election of directors; or 2. A change in the persons constituting the Board as its exists at the date hereof (the "Incumbent Board") such that the directors of the Incumbent Board no longer constitute a majority of the Board; provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election, by the Corporation's shareholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Corporation, as such terms are used in Rule 14a- 11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this agreement, considered as though such person were a member of the Incumbent Board; or 3. Approval by the stockholders of the Corporation of a reorganization, merger, consolidation in each case with respect to which persons who were the stockholders of the Corporation immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated corporation's then outstanding voting securities, or a liquidation or dissolution of the Corporation or of the sale of all or substantially all of the assets of the Corporation. In Witness Whereof, the Employee and the Corporation agree to the above Amendment with their signatures and an acknowledgment by a witness: Executed, this _____ day of _______, 1995. ____________________________ ____________________________ Witness for Employee Signature Employee Signature ____________________________ ____________________________ Witness for Corporate Signature Authorized Corporate Signature ____________________________ Corporate Title EX-10.B 3 EX-10.B - SPLIT-DOLLAR LIFE INSURANCE AGREE. EX-10.B ------- AMP INCORPORATED SPLIT-DOLLAR LIFE INSURANCE AGREEMENT THIS AGREEMENT, made as of this 1st day of January 1995, by and between AMP Incorporated, a Pennsylvania corporation having its principal place of business in Harrisburg, Pennsylvania (hereinafter, the "Corporation"), and [name] (hereinafter, the "Employee" or the "Owner"), WITNESSETH: WHEREAS, the Employee is an active elected or divisional officer of the Corporation; WHEREAS, the Corporation wishes to assist the Employee with a personal life insurance program in recognition of the Employee's contributions to the business success of the Corporation and also as an inducement to the Employee's continued employment; WHEREAS, contemporaneously with the execution of this Agreement the Owner will acquire an insurance policy on the Employee's life (hereinafter, the "Policy"), a copy of which is attached hereto as Exhibit A and, along with any future supplementary contracts, riders, or endorsements issued in connection therewith, made a part hereof; and WHEREAS, the Owner and the Corporation wish to make the Policy subject to a split-dollar payment arrangement pursuant to the terms and conditions of this Agreement; NOW, THEREFORE, in consideration of the foregoing and the mutual covenants hereinafter set forth, the Owner and the Corporation agree as follows: ARTICLE 1 SPLIT-DOLLAR PLAN 1.1 Coverage of Plan. Any individual who is designated by the Corporation and who is an elected or divisional officer (hereinafter, an "Officer") of the Corporation as of January 1, 1995, or becomes an Officer thereafter is eligible, subject to the Corporation's approval, to become a covered Employee for purposes of the AMP Incorporated Split-Dollar Life Insurance Plan (hereinafter, the "Plan"). In order to become a covered Employee, an eligible Officer must be insurable, must enter into this form of Split-Dollar Life Insurance Agreement with the Corporation, and must execute the collateral assignment agreement and the waiver referred to in Article 2.2, below. Initial enrollments in the Plan and the related Agreements shall become effective as of January 1, 1995, or as soon thereafter as administratively practicable. New enrollments in the Plan and the related Agreements shall become effective as of the first January 1 following the date on which an individual first becomes eligible, or as soon thereafter as administratively practicable. An Employee's coverage under the Plan shall cease if either the Employee's employment with the Corporation terminates or the Employee's service as an Officer of the Corporation terminates prior to the date of his or her early or normal retirement, whichever is applicable, under the AMP Incorporated Pension Plan, unless such termination of employment or cessation of service as an Officer occurs on account of a disability that entitles the Employee to benefits under the AMP Incorporated Long Term Disability Plan. For purposes of the foregoing sentence, employment with a subsidiary of the Corporation shall be treated as employment with the Corporation and service as an officer of a subsidiary of the Corporation shall be treated as service as an Officer of the Corporation. 1.2 Plan Death Benefits. An active Employee shall be eligible under the Plan for a death benefit, payable to his designated beneficiary, in an amount determined based on the following schedule; subject, however, to the Employee's initial and continuing insurability: For 1995 and 1996, the greater of: A) Two times the Employee's Base Annual Compensation or the following schedule: B) Base Annual Compensation Death Benefit $150,000 or less $ 300,000 greater than $150,000 but not greater than $200,000 $ 400,000 greater than $200,000 but not greater than $250,000 $ 500,000 greater than $250,000 but not greater than $300,000 $ 600,000 greater than $300,000 but not greater than $375,000 $ 750,000 greater than $375,000 $1,000,000 C) Less the Death Benefit, if any, stated in the First Amendment, dated and effective March 1, 1995, to the separate AMP Incorporated Split-Dollar Life Insurance Agreement relating to the policies issued by the Connecticut General Life Insurance Company, Hartford, Connecticut. For 1997 and thereafter: D) Two times the Employee's Base Annual Compensation but not less than the initial Death Benefit under A and B above. E) Less the Death Benefit, if any, stated in the First Amendment, dated and effective March 1, 1995, to the separate AMP Incorporated Split-Dollar Life Insurance Agreement relating to the policies issued by the Connecticut General Life Insurance Company, Hartford, Connecticut. For purposes hereof, base annual compensation shall mean the Employee's annual rate of base pay, not to include any premium or bonus pay. If an active Employee becomes eligible for a larger death benefit under the Plan because of an increase in base annual compensation, the increased death benefit will become effective as of the first January 1 that follows the date the compensation increase takes effect, or as soon thereafter as administratively practicable, provided the Employee continues to be insurable and the necessary administrative steps have been taken to effect the increase. A covered Employee who is retired or who becomes disabled shall be eligible for a death benefit under the Plan equal to the amount of the death benefit he or she was entitled to receive under the Plan or the Corporation's Group Life Insurance Plan, whichever was applicable, on the date of retirement or disability. 1.3 Source of Plan Benefits. Death benefits under the Plan will be provided through the purchase by the Owner of the Policy, with the Corporation advancing for the benefit of the Employee certain of the premiums due on the policy, as provided in Article 3.2, below. Any proceeds from the Policy payable upon the death of the Employee that are in excess of the difference between the applicable death benefit reflected in the schedule in Article 1.2, above, and the principal amount of any Policy loans taken by the Owner and outstanding at the date of the Employee's death are payable to the Corporation. ARTICLE 2 OWNERSHIP OF THE POLICY 2.1 Owner. The Owner shall own the Policy and may exercise all ownership rights granted to the owner thereof by the terms of the Policy, except as may otherwise be provided herein. The Owner and the Corporation agree that the Policy shall be subject to the terms and conditions of this Agreement. 2.2 Collateral Assignment and Waiver. Contemporaneously with the execution of this Agreement and the purchase of the Policy, the Owner agrees to execute a collateral assignment agreement (hereinafter, the "Collateral Assignment") in favor of the Corporation to secure the Corporation's rights under this Agreement, with such Collateral Assignment to be in the form attached hereto as Exhibit B, and the Owner agrees to execute a waiver (hereinafter, the "Waiver") of the right to coverage under the Corporation's Group Life Insurance Plan, with such Waiver to be in the form attached hereto as Exhibit C. The Collateral Assignment shall set forth the rights of the Corporation in and with respect to the Policy pursuant to and consistent with the terms and conditions of this Agreement. The Owner and the Corporation agree to be bound by the terms of the Collateral Assignment and the Waiver. (a) Corporation's Rights. The Corporation's rights with respect to the Policy shall be as follows: (i) The right to obtain, directly or indirectly, one or more loans or advances against the cash value of the Policy, to the extent of, but not in excess of, the Corporation's Portion (as defined below in this Article 2.2), and the right to pledge or assign the Corporation's Portion as security for such loans or advances; (ii) The right to fully or partially surrender the Policy and upon surrender receive the cash value thereof, subject to the Owner's right to a thirty (30) day advance written notice of the Corporation's intent to surrender the Policy and the right, arising upon receipt of such notice, to prevent the surrender and obtain a release of the Corporation's rights by payment to the Corporation of the aggregate amount of the premiums on the Policy to date; (iii) The right to receive the proceeds of the Policy in excess of the Employee's death benefit portion (as defined in Article 4.2 below) in the event of the death of the Employee; (iv) The right to collect and receive all distributions or shares of surplus, dividend deposits, or additions to the Policy now or hereafter made or apportioned thereto, the right to exercise any and all options contained in the Policy relating thereto, and the right to exercise all non-forfeiture rights permitted by the terms of the Policy or allowed by the issuer of the Policy (hereinafter, the "Issuer") and to receive all benefits and advantages derived therefrom; (v) The right to collect from the Issuer any amount that may be due upon maturity of the Policy during the lifetime of the Employee that is in excess of the amount defined as the Employee's death benefit portion in Article 4.2, below; and (vi) The right to release the Collateral Assignment upon receipt of the amount specified in Article 5.3, below. (b) Owner's Rights. Subject to the foregoing rights of the Corporation and to any further limitations specified hereinbelow, the Owner shall retain all rights as owner of the Policy, including, but not limited to, the following: (i) The right to obtain, directly or indirectly, one or more loans or advances against the cash value of the Policy and the right to pledge or assign the Policy as security for such loans or advances, provided, however, that, except in the case of a loan specifically authorized by Article 5.2, below, the right of the Owner to borrow against the cash value of the Policy or to use it as security shall be limited to that portion of the cash value that is in excess of Corporation's Portion, shall be limited to the extent necessary to insure that the policy does not lapse due to insufficient cash value, shall require the advance written consent of the Corporation, and shall not be exercisable prior to the later of the Employee's normal or early retirement, whichever is applicable, under the terms of the AMP Incorporated Pension Plan or the sixth anniversary date of the Policy; (ii) The right to collect from the Issuer any amount payable upon maturity of the Policy that is not payable to the Corporation pursuant to Article 2.2(a)(v), above; (iii) The right to designate and to change the beneficiary or beneficiaries of the portion of the proceeds of the Policy payable, upon the death of the Employee, to the beneficiary, pursuant to Article 4.2, below (hereinafter the "Employee's Portion"); (iv) The right to elect any optional form of settlement available with respect to the Employee's Portion; and (v) The right to assign the Owner's rights in and with respect to the Policy. For purposes hereof, the Corporation's Portion of the cash value shall be an amount equal to the aggregate premiums for the Policy that are paid or scheduled to be paid by the Corporation and the Employee, pursuant to Article 3.2, below. The Corporation's Portion shall be increased by the excess, if any, of the cash value of the Policy over the sum of the Employee's applicable death benefit under Article 1.2 and the aggregate premiums for the Policy paid by the Corporation and the Employee. ARTICLE 3 PAYMENT OF PREMIUMS 3.1 Premium. As used herein, the term "premium" shall mean the planned yearly amount agreed upon between the Corporation and the Employee as the contribution toward the Policy for any year; provided, however, that such amount shall never be less than the Policy's minimum required premium for such year. "Premium" shall also include all costs associated with all supplementary contracts, riders, and endorsements to the Policy. 3.2 Premium Payment; Timing. (a) Retired Employees. In the case of an Employee who has elected and commenced a normal or early retirement under the AMP Incorporated Pension Plan, the Corporation shall pay the premium on the Policy to the Issuer on or before the due date of each premium payment; and in any event, not later than the expiration of the grace period under the Policy for such premium payment. Notwithstanding the above provisions of this Article 3.2, if the Corporation shall fail to make any premium payment within twenty (20) days after its due date, then the retired Employee or the Owner may make such premium payment, and the Corporation shall fully reimburse the retired Employee for such premium payment within ten (10) days of the making of such payment. The Corporation shall furnish an annual statement to the retired Employee setting forth the amount of imputed income, if any, reportable by the retired Employee as a result of the Corporation's payments hereunder. (b) Active Employees. In the case of an Active Employee, the Corporation shall pay the premium on the Policy to the Issuer on or before the due date of each premium payment, and in any event, not later than the expiration of the grace period under the Policy for such premium payment. The Corporation shall advance as a bonus payment and withhold from the compensation of the active Employee an amount sufficient to reimburse the Corporation for that portion of the premium payment equal to the annual cost of the pure insurance protection on the life of the active Employee under the Policy for the ensuing Policy Year. Such bonus and corresponding withholding shall be equal to the lesser of the following: (i) that rate per $1,000 of pure insurance protection promulgated by the Internal Revenue Service in Rev. Rul. 55-747, 1955-2 C.B. 228, as the same may be amended or replaced from time to time by published ruling (hereinafter, the "PS-58 rate") as applied to the amount of pure insurance protection provided to the Employee pursuant to the terms of this Agreement; or (ii) that current published rate per $1,000 of pure insurance protection charged by the Issuer for initial-issue individual one-year term insurance policies available to all standard risks as applied to the amount of pure insurance protection provided to the active Employee pursuant to the terms of this Agreement. Notwithstanding the above provisions of this Article 3.2, if the Corporation shall fail to make any premium payment within twenty (20) days after its due date, then the Employee or the Owner may make such premium payment, and the Corporation shall reimburse the Employee or the Owner for the portion of such premium payment not payable by the Employee hereunder within ten (10) days of the making of such premium payment by the Employee. ARTICLE 4 RIGHTS UPON DEATH OF EMPLOYEE 4.1 Corporation's Death Benefit Portion. Upon the death of the Employee, the Corporation shall be entitled to receive the proceeds of the Policy less the Employee's death benefit portion as defined in Article 4.2. 4.2 Employee's Death Benefit Portion. The beneficiary or beneficiaries under the Policy, as designated on Exhibit D hereto, shall be entitled to receive an amount equal to the Employee's applicable death benefit under Article 1.2 decreased by the principal amount of any Policy loans taken by the Owner and outstanding at the date of the Employee's death. The Owner and the Corporation agree to conform the beneficiary designation of the Policy to the provisions hereof. ARTICLE 5 RIGHTS UPON TERMINATION OF AGREEMENT OR SURRENDER OF POLICY 5.1 Termination Defined. This Agreement shall automatically terminate upon the occurrence of any of the following events: (a) the bankruptcy, receivership or dissolution of the Corporation; (b) the termination of employment of the Employee with the Corporation or the termination of the Employee's status as an Officer of the Corporation prior to his normal or early retirement under the AMP Incorporated Pension Plan other than as a result of a disability under the terms of the AMP Incorporated Long Term Disability Plan; (c) the Corporation's exercise of its right to surrender the Policy; (d) the decision by the Board of Directors of the Corporation to terminate the Plan; or (e) the mutual written agreement of the Employee, the Owner, and the Corporation. For purposes of Article 5.1(b), employment with a subsidiary of the Corporation shall be treated as employment with the Corporation and service as an officer of a subsidiary of the Corporation shall be treated as service as an Officer of the Corporation. 5.2 Rights Upon Termination. Upon the termination of this Agreement as specified above, the Owner may, at his or its option, pay to the Corporation the amount determined pursuant to Article 5.3 below. To facilitate the Owner's reimbursement to the Corporation of the aggregate premiums pursuant to this Article, the Corporation shall repay to the Issuer the full amount of any indebtedness on the Policy incurred by the Corporation and the Owner shall be entitled to borrow against the entire cash value of the Policy without regard to the limitations on Owner Policy loans specified in Article 2.2(b)(i). Upon receipt of such reimbursement amount from the Owner, the Corporation shall take all steps necessary to release the Collateral Assignment so that the Owner shall own the Policy free of all encumbrances thereon in favor of the Corporation pursuant to this Agreement. 5.3 Termination Amount: Living Proceeds. The Corporation shall be entitled to receive from the Owner, as specified in Article 5.2, above, an amount equal to the aggregate premiums on the policy paid by the Employee and the Corporation. 5.4 Rights Upon a Change in Control. Notwithstanding any other provision of this Agreement to the contrary, upon a "Change in Control," as hereinafter defined, this Agreement may not be terminated (except by mutual consent) by reason of the termination of the Employee's employment with the Corporation before the later of (i) the Policy anniversary date next following the Employee's 65th birthday, or (ii) the expiration of fifteen (15) Policy years from the date of the Policy, unless the Parties mutually consent to the continuation of this Agreement at that time. For purposes of this Agreement, a "Change in Control" shall be deemed to have occurred if: 1. The acquisition of beneficial ownership (other than from the Corporation) by any person, entity or "group," within the meaning of Section 13 (d)(3) or Section 14 (d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act"), excluding, for this purpose, the Corporation or its subsidiaries, or any employee benefit plan of the Corporation or its subsidiaries that acquires beneficial ownership of voting securities of the Corporation (within the meaning of Rule 13d-3 promulgated under the Exchange Act), of 30% or more of either the then outstanding shares of common stock or the combined voting power of the Corporation's then outstanding voting securities entitled to vote generally in the election of directors; or 2. A change in the persons constituting the Board as its exists at the date hereof (the "Incumbent Board") such that the directors of the Incumbent Board no longer constitute a majority of the Board; provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election, by the Corporation's shareholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Corporation, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this agreement, considered as though such person were a member of the Incumbent Board; or 3. Approval by the stockholders of the Corporation of a reorganization, merger, consolidation in each case with respect to which persons who were the stockholders of the Corporation immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated corporation's then outstanding voting securities, or a liquidation or dissolution of the Corporation or of the sale of all or substantially all of the assets of the Corporation. ARTICLE 6 ADMINISTRATIVE PROVISIONS 6.1 Issuer's Responsibility. The Issuer shall not be considered a party to this Agreement and shall not be bound hereby. No provision of this Agreement, or any amendment hereof, shall in any way enlarge, change, vary or affect the obligations of the Issuer as expressly provided in the Policy, except as the same may become a part of the Policy by acceptance by the Issuer of the Collateral Assignment. 6.2 Amendment and Termination. This Agreement may be amended only by express written Agreement signed by the Owner and a duly authorized representative of the Corporation. The Plan may be terminated at any time and for any reason by action of the Board of Directors of the Corporation. 6.3 Notice. Any and all notices required to be given under the terms of this Agreement shall be given in writing, signed by the appropriate party, and sent by certified mail, postage prepaid, to the appropriate address set forth below: (a) to the Owner at: [name] [address] (b) to the Corporation at: AMP Incorporated P. O. Box 3608 Harrisburg, PA 17105-3608 Attention: Director of Executive Compensation, M/S 176-49 Notice of any change in any of the above addresses shall be sent at least thirty (30) days prior to the effective date of such changes, in the same manner as any other notice hereunder, and shall also be appended to this Agreement and incorporated herein as an amendment with a signed acknowledgment by the parties hereto. 6.4 Heirs, Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Owner, his or her successors, heirs, executors, or administrators, and to the Corporation and its successors. The Owner and the Corporation agree that any party may assign its interest under this Agreement upon the prior written consent of the other parties hereto, and any assignee shall be bound by the terms and conditions of this Agreement as if an original party hereto. 6.5 Interpretation. This Agreement and the interests of the Owner and the Corporation hereunder shall be governed by and construed in accordance with the laws of the State of Pennsylvania. 6.6 Term. This Agreement shall be effective as of the date first above written, and shall continue until terminated as herein provided or until all covenants herein activated by the death of the Employee are fully carried out. 6.7 Headings. Any headings or captions in this Agreement are for reference purposes only, and shall not expand, limit, change or affect the meaning of any provision of this Agreement. 6.8 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same Agreement. 6.9 Fiduciary. The Corporation shall serve as the named Fiduciary and administrator (hereinafter the "Fiduciary") of the split-dollar life insurance plan established pursuant to this Agreement. The Fiduciary shall have the full and absolute discretionary power and authority to administer this Agreement and the Plan and to interpret the provisions hereof, and the Fiduciary's actions with respect hereto shall be binding and conclusive upon all persons for all purposes; subject to Article 6.10. The Fiduciary shall not be liable to any person for any action taken or omitted in connection with its responsibilities, rights and duties under this Agreement unless attributable to willful misconduct or lack of good faith. 6.10 Claims Procedure. Any controversy or claim arising out of or relating to this Agreement shall be filed in writing with the Fiduciary, which shall make all determinations concerning such claim. Any decision by the Fiduciary concerning such claim shall be in writing and shall be delivered within 90 days of the initial filing of the claim to all parties in interest in accordance with the notice provisions of Article 6.3, above, unless special circumstances require an extension of time for processing the claim. If the decision is to deny the claim, the decision shall set forth (a) the reasons for denial in plain language, (b) specific reference to Agreement provisions on which the decision is based, (c) a description of any further material or information that would be necessary for the claimant to perfect the claim on appeal and the reasons why such material or information is necessary, and (d) the steps to be taken to obtain a review of the denial. If such written denial does not resolve the claim to the claimant's satisfaction, the claimant shall have the right to obtain a review of the decision by making a written application to the Fiduciary within 60 days of receipt of the decision to deny the claim, setting forth any issues or comments and itemizing any documents pertinent to the review that the claimant desires to examine. The Fiduciary shall render a decision on the request for review within a reasonably prompt period of time not exceeding sixty (60) days from the date of receipt of the request for review, unless special circumstances required an extension of time, in which case the decision shall be rendered as soon as possible but in no event later than 120 days from the date of receipt of the request for review. Written notice of any such extension shall be given to the claimant prior to the commencement of the extension. The decision on review shall be in writing and shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, as well as specific references to the pertinent Plan provisions on which the decision is based. In the event a decision on review is not timely furnished, the claim shall be deemed denied on review. IN WITNESS WHEREOF, the Parties have herebelow set their hands and seals as of the day and year first above written. AMP Incorporated By:_____________________________ Its:____________________________ ________________________________ [name] By:_____________________________ Its:____________________________ EXHIBIT B ---------- COLLATERAL ASSIGNMENT AGREEMENT A. As collateral security for any and all liabilities incurred arising with respect to premium advances, [name] (herein called the "Assignor"), hereby assigns, transfers and sets over to AMP Incorporated (herein called the "Assignee"), its successors and assigns, the following listed rights in Policy #______________________________________ and any supplementary contracts, riders and endorsements issued in connection therewith (said policy and contracts being herein called the "Policy") issued by The Manufacturers Life Insurance Company of Toronto, Canada (herein called the "Insurer") on the life of [name] (herein called the "Insured") subject to all terms and conditions contained in the Policy and to all superior liens, if any, which the Insurer may have against the Policy. The Assignor by the execution of this instrument and the Assignee by the acceptance of this assignment agree to the terms and conditions herein set forth. B. It is expressly agreed that with the exception of those rights specifically reserved and excluded in paragraph C below all rights in the Policy, including but not limited to the following, are included in this assignment and pass by virtue hereof and may hereafter be exercised and enjoyed by the Assignee without notice to or consent of the Assignor. 1. The sole right to surrender the Policy and upon surrender receive the cash value thereof, including any dividend credits outstanding, in an amount as its interest may appear; 2. The sole right to collect and receive all distributions or shares of surplus, dividend deposits or additions to the Policy now or hereafter made or apportioned thereto, and to exercise any and all options contained in the Policy with respect thereto; 3. The sole right to exercise all non-forfeiture rights permitted by the terms of the Policy or allowed by the Insurer and to receive all benefits and advantages derived therefrom and to receive all benefits and advantages derived therefrom including the right to take loans against the security of the policy and additionally; 4. The sole right to collect from the Insurer any amount that may be due upon maturity of the Policy during the lifetime of the Insured; and 5. The sole right to collect from the Insurer any proceeds payable under the Policy on the death of the Insured to the extent of the Assignee's interest in the proceeds as provided in paragraph D below. C. It is expressly agreed that the following specific rights, so long as the Policy has not been surrendered, are reserved and excluded from this assignment and do not pass by virtue hereof: 1. The right to designate and change the Beneficiary of the Policy proceeds to the extent they exceed the Assignee's interest in the proceeds as provided in paragraph D below; 2. The right to make a loan on the Policy in an amount as its interest may appear; 3. The right to elect any optional method of settlement permitted by the Policy or allowed by the Insurer with respect to any amount that may be payable to the Beneficiary; and 4. The right to assign the Assignor's interest in the Policy; but the reservation of these rights shall in no way impair the right of the Assignee to surrender the Policy completely with all its incidents or impair any other right of the Assignee hereunder, and any designation or change of Beneficiary or election of a method of settlement shall be made subject to this assignment and to the rights of the Assignee hereunder. D. The Assignee's interest in any proceeds payable under the Policy on the death of the Insured shall be equal to the aggregate amount of the premiums paid and any excess death benefit over and above the following formula: The Employee's Death Benefit will be: For 1995 and 1996, the greater of: A) Two times the Employee's Base Annual Compensation or the following schedule: B) Base Annual Compensation Death Benefit $150,000 or less $ 300,000 greater than $150,000 but not greater than $200,000 $ 400,000 greater than $200,000 but not greater than $250,000 $ 500,000 greater than $250,000 but not greater than $300,000 $ 600,000 greater than $300,000 but not greater than $375,000 $ 750,000 greater than $375,000 $1,000,000 C) Less the Death Benefit, if any, stated in the First Amendment, dated and effective March 1, 1995, to the separate AMP Incorporated Split-Dollar Life Insurance Agreement relating to the policies issued by the Connecticut General Life Insurance Company, Hartford, Connecticut. For 1997 and thereafter: D) Two times the Employee's Base Annual Compensation but not less than the initial Death Benefit in A and B above E) Less the Death Benefit, if any, stated in the First Amendment, dated and effective March 1, 1995, to the separate AMP Incorporated Split-Dollar Life Insurance Agreement relating to the policies issued by the Connecticut General Life Insurance Company, Hartford, Connecticut. and this assignment shall operate to transfer the interest of any Beneficiary in such proceeds to the Assignee to the extent of the Assignee's interest. E. Prior to the death of the Insured, no loans or distributions shall be paid over by the Insurer to the Assignor unless it shall receive a written statement signed by the Assignor and the Assignee that indicates the respective amounts to be loaned or disbursed and to whom such amounts should be paid. The Insurer shall be held harmless and fully released and discharged by the Assignor and the Assignee to the extent of any payment made in reliance upon such statement. F. 1. The Insurer will record and file any assignment that is in writing on a form satisfactory to the Insurer. 2. This collateral assignment agreement is to be completed in duplicate and both copies are to be sent to the Insurer. One recorded copy will be returned for attachment to the Policy. 3. This assignment contemplates that a separate written split dollar agreement exists or will exist to specify the rights between or among the Assignee and Assignor. 4. No assignment shall affect the Insurer until a copy thereof is delivered to its Home Office. 5. The Insurer shall rely on the sole written representation of the Assignee with respect to the amount payable under Paragraph D above. The Insurer shall be held harmless and fully released and discharged by the Assignor and the Assignee to the extent of any payment made in reliance upon such statement. 6. This assignment is binding on the executors, administrators, successors or assigns of the Assignor. Executed at Harrisburg, Pennsylvania, as of this 1st day of January, 1995. _________________________________ _________________________________ Witness [name], Assignor AMP Incorporated, Assignee ______________________________ By:______________________________ Witness Its: Recorded and filed at the Home Office of the Insurer On_________________________________ By_________________________________ Authorized Signature Appendix A ---------- Split-Dollar Life Insurance as of 1/1/95 Employee Name Coverage Amount ---- --------------- W. Hudson 1,400,000 J. Marley 1,120,000 T. Dalrymple 600,000 J. Gurski 600,000 R. Ripp 750,000 D. Horowitz 750,000 M. Yohe 300,000 R. Gassner 400,000 J. Gorjat 600,000 C. Goonrey 400,000 P. Guarneschelli 600,000 J. Hassan 600,000 A. Kastel 400,000 J. Kegel 400,000 G. Knerr 500,000 J. Maher 400,000 R. Seall 400,000 J. Seitchik 400,000 H. Timmins 500,000 P. Workinger 400,000 N. Proietto 500,000 H. Cole 500,000 N. Spatz 300,000 L. Miller 300,000 D. Cornelius 400,000 K. Drysdale 400,000 A. Zettlemoyer 300,000 A. Gerlinger 300,000 J. Overbaugh 300,000 C. Ritter 300,000 L. Walker 300,000 A. Keizer 300,000 H. Peiffer 400,000 D. Henschel 300,000 P. Timashenka 300,000 D. Hooper 400,000 D. Wilkie 500,000 Retiree Name Coverage Amount ---- --------------- W. Conner 400,000 J. Hopkins 180,000 H. McInnes 1,000,000 M. Miller 400,000 H. Narigan 400,000 W. Raab 1,000,000 B. Savidge 750,000 R. Steele 320,000 J. Sweeney 350,000 H. Walfred 300,000 P. Workinger 400,000 EX-10.C 4 EX-10.C - PENSION RESTORATION PLAN EX-10.C ------- AMP INCORPORATED PENSION RESTORATION PLAN (January 1, 1995 Restatement) SECTION 1 INTRODUCTION 1.1 Intent of Plan The intention of the AMP Incorporated Pension Restoration Plan (the "Plan") is to provide a supplemental pension benefit to designated Retirees whose benefit under the AMP Incorporated Pension Plan is reduced or restricted by reason of the maximum annual limitations on benefits imposed by Section 415 of the Internal Revenue Code of 1986, as amended (the "Code"), by reason of the limitation imposed by Section 401(a)(17) of the Code (hereinafter collectively referred to as the "Code Limitations"), or by reason of having a substantial portion of annual compensation payable in the form of an annual cash bonus. SECTION 2 EFFECTIVE DATE 2.1 The Plan, which was originally effective as of January 1, 1983, and thereafter amended on four occasions, is hereby amended and restated in its entirety effective as of January 1, 1995. SECTION 3 DEFINITIONS 3.1 Administrator means that person responsible for the administration of the Plan as set forth in Section 10 hereof. 3.2 Company means AMP Incorporated and any subsidiary or affiliate thereof that has adopted the Pension Plan. 3.3 Employee means any person listed on appendix A who is regularly employed by the Company. It also includes any such person while on an authorized leave of absence granted by the Company. 3.4 Retiree means any retired Employee listed on Appendix A, a joint annuitant of such Retiree or a beneficiary of such Retiree who is entitled to receive benefits under this Plan. 3.5 Retirement Date means the date of actual retirement of a Retiree, which may be his normal, early or postponed Retirement Date under the provisions of the Pension Plan, and which is ordinarily the first day of the month next following the Retiree's last day worked. 3.6 Pension Plan means the AMP Incorporated Pension Plan. 3.7 Years of Service means the years or parts thereof of an Employee's actual period of employment with the Company, as further defined and limited in the Pension Plan, plus any additional credit granted to the Employee for Plan purposes by written employment agreement. SECTION 4 COSTS OF PLAN 4.1 All costs of this Plan, including the administration thereof, shall be borne by the Company and no contributions to this Plan shall be required from Employees. SECTION 5 ELIGIBILITY FOR AND COMMENCEMENT OF BENEFITS 5.1 For periods of time after December 31, 1994, an Employee shall be eligible for the benefits provided by this Plan only if the Employee is listed on Appendix A hereto by name, and no benefit under the Plan shall accrue to an Employee prior to the Employee's eligibility effective date specified in Appendix A. and no benefit under the Plan shall accrue to an Employee prior to the Employee's eligibility effective date specified in Appendix A. Payment of the benefits provided by this Plan shall ordinarily commence concurrently with the commencement of Pension Plan benefits on the Retiree's Retirement Date without the necessity of filing an application under this Plan for such benefits. SECTION 6 AMOUNT AND PAYMENT OF BENEFIT 6.1 Effective for Retirement Dates that occur after January 1, 1995, a Retiree's monthly accrued benefit under this Plan shall have a value on a pre-tax basis that is equal to the difference between A and B, where A is the monthly accrued benefit the Retiree would have been entitled to receive under the provisions of the Pension Plan (a) disregarding any reductions or restrictions on such benefit as a result of the Code Limitations, (b) including in any annual compensation or three-year average compensation determination with respect to the Retirement Date both annual rates of base earnings and annual cash bonus plan payments attributable to each applicable year (without regard to whether a portion of such base earnings or cash bonus amounts have been deferred under the terms of the AMP Incorporated Deferred Compensation Plan or under any AMP- sponsored plan complying with the provisions of Sections 401(k) or 125 of the Code) and (c) augmenting a Retiree's credited years of service with any additional credit years of service granted to the Retiree for Plan purposes by written employment agreement, and B is the monthly accrued benefit actually payable to the Retiree under the Pension Plan. SECTION 7 FORM OF BENEFIT 7.1 If an Employee who becomes eligible to receive benefits under this Plan has elected an optional form of benefit under the Pension Plan, any benefits to be paid under this Plan will be paid in the same optional form as the benefit paid by the Pension Plan and the Employee's designations as to joint annuitant(s) and beneficiary(ies) made under the Pension Plan will apply under this Plan, with the exception that the Retiree may elect payment of his Plan benefit in a single lump sum distribution, provided such election is made at least three months prior to and in the calendar year prior to the Retirement Date. The mortality and interest rate assumptions used to convert a Plan benefit into a single lump sum amount shall be as reflected in Appendix B. SECTION 8 DEATH BENEFITS 8.1 Death Before Retirement A death or survivor benefit shall be payable under this Plan in the event of death before retirement only if a survivor benefit is payable under the provisions of the Pension Plan. In such event, the amount of the monthly benefit payable under this Plan to the surviving beneficiary(ies) entitled to benefits under the Pension Plan will again be the difference between A and B, where A is the amount of survivor benefit that would be determined under the Pension Plan (a) disregarding the Code Limitations, (b) including annual cash bonus plan payments as well as base earnings rates in annual compensation determinations, and (c) including any additional credited years of service granted by agreement, and B is the survivor benefit actually payable under the Pension Plan. All survivor benefits under this Plan will cease or reduce at the same time and in the same manner as survivor benefits are terminated or reduced under the provisions of the Pension Plan. 8.2 Death After Retirement A death or survivor benefit shall be payable under this Plan in the event of death after retirement only if the Retiree has elected and is receiving his Plan benefit in the form of a joint and survivor annuity or certain and continuous annuity and such form of payment, by its terms, calls for continuing benefit payments after the Retiree's death. SECTION 9 SEPARATION FROM EMPLOYMENT 9.1 Upon an Employee's separation from Company employment prior to being credited with five (5) Years of Service with the Company, the Employee's rights to any benefits under this Plan will cease. Furthermore, all rights of an Employee to any benefits under this Plan will cease upon separation from Company employment prior to the Employee's Retirement Date. Notwithstanding the foregoing, however, any Plan survivor benefit described in Section 8.1 of the Plan shall be payable to the survivor of a deceased Employee without regard to whether the Employee had been credited with five (5) or more Years of Service or attained his Retirement Date. SECTION 10 ADMINISTRATION 10.1 Administrator The Administrator of the Pension Plan shall act as the Administrator of this Plan. 10.2 Interpretation of Provisions The Administrator shall have the full and absolute discretionary power and authority to administer the Plan, interpret the provision of the Plan, and decide questions arising in its administration. The decisions and interpretations of the Administrator shall be final and binding on the Company, its Employees and all other persons. 10.3 Records of Administration The Administrator shall keep records reflecting the administration of this Plan which shall be subject to audit by the Company. 10.4 Denial of Claim The Administrator shall, inter alia, provide adequate notice in writing to any Employee or beneficiary whose claim for benefit under this Plan has been denied, setting forth the specific reasons for such denial. The Employee or beneficiary will be given an opportunity for a full and fair review by the Administrator of the decision denying the claim. The Employee or beneficiary shall be given 30 days from the date of the notice denying any such claim within which to request such review. 10.5 Liability of the Administrator The Administrator shall not be liable for any action taken in good faith or for the exercise of any power granted to the Administrator, except to the extent that such liability is imposed by law as a result of a breach by the Administrator of his fiduciary responsibilities. SECTION 11 FACILITY OF PAYMENT AND LAPSE OF BENEFITS 11.1 Provision for Incapacity If the Administrator deems any person entitled to receive any payment under the provisions of this Plan incapable of receiving or disbursing the same by reason of minority, illness or infirmity, mental incompetency, or incapacity of any kind, the Administrator may, in his sole discretion, take any one or more of the following actions: he may apply such payment directly for the health, support and maintenance of such person; he may reimburse any person for any such support theretofore supplied to the person entitled to receive any such payment; or he may pay such payment to any other person selected by him to disburse such payment for the health, support and maintenance of the person entitled thereto, including, without limitation to any relative who has undertaken, wholly or partially, the expense of such person's comfort, care and maintenance, or any institution in whose care or custody the person entitled to the payment may be. The Administrator may, in his sole discretion, deposit any payment due to a minor to the minor's credit in any savings or commercial bank of the Administrator's choice. 11.2 Payments or Deposits Payments or deposits made pursuant to any provision of this Section 11 shall be a complete discharge, to the extent thereof, of all liability under the provisions of this Plan, or otherwise, of the Administrator, the Company and this Plan, and the receipt by the person or persons receiving any such payment distribution or deposit shall be a complete acquittance therefore and there shall be no liability to see to the application of any payments, distributions or deposits so made. SECTION 12 GENERAL PROVISIONS 12.1 Excess Benefit Plan This Plan, to the extent that it is designed to provide a benefit not payable under the Pension Plan because of the restrictions of Section 415 of the Code, is intended to constitute an "excess benefit plan" under the present provisions of Section 3 (36), Subtitle A of Title I of ERISA. 12.2 Frequency and Duration of Payments Except in the case where an Employee has elected payment in the form of a single lump sum distribution, all benefits under this Plan shall be paid in monthly installments at the beginning of the month to which the payment applies and shall cease with the month of the retired Employee's death unless continued to a beneficiary or joint annuitant in accordance with other provisions of this Plan. 12.3 Payments and Benefits Not Assignable Payments to and benefits under this Plan are not assignable or subject to anticipation or alienation since they are primarily for the support and maintenance of the Employees and their joint annuitants or beneficiaries. Furthermore, such payments shall not be subject to attachment, seizure, or levy by creditors or through legal process against the Company, the Administrator, any trustee or other funding agent, or any Employee, Retiree, or survivor. 12.4 No Right of Employment The provisions of this Plan shall not give an Employee the right to be retained in the service of the Company. 12.5 Adjustments At the request of the Company, the Administrator may, with respect to a Retiree, adjust such Retiree's benefit under this Plan or make such other adjustments with respect to such Retiree as are required to correct administrative errors or provide benefits in a manner consistent with the intent and purpose of this Plan. SECTION 13 AMENDMENTS AND DISCONTINUANCE 13.1 Amendment of Plan This Plan may be amended by action of the Board of Directors of the Company if, as amended, it continues to be for the exclusive benefit of Employees. 13.2 Termination The Company intends to continue this Plan indefinitely but reserves the right to terminate it at any time by action of the Board of Directors of the Company. 13.3 Effect of Amendment or Termination No amendment or termination of this Plan may adversely affect the benefit payable to any Retiree receiving benefits under the Plan prior to the effective date of the amendment or termination, or to any Employee who, as of such date, was eligible to retire with an immediate allowance under the Pension Plan, or as to any Employee who has prior to such amendment or termination accrued a benefit payable hereunder. EXECUTED at Harrisburg, Pennsylvania this ____ day of December, 1995. AMP Incorporated By:_____________________ Its: ___________________ And:____________________ Its: ___________________ APPENDIX A ----------- The following are Employees for purposes of the Plan on and after the indicated effective date: Name Eligibility Effective Date W. J. Hudson 01/01/89 J. E. Marley 01/01/89 B. Savidge 01/01/89 T. Dalrymple 12/31/93 J. Gurski 12/31/93 J. Gorjat 05/01/93 J. Hassan 10/01/93 P. Guarneschelli 12/31/93 R. Gassner 12/31/93 H. Cole 12/31/93 H. Timmins 12/31/93 A. Kastel 12/31/93 K. Drysdale 12/31/93 R. Seall 12/31/93 C. Goonrey 12/31/93 P. Workinger 12/31/93 J. Maher 12/31/93 R. Knerr 12/31/93 J. Seitchik 12/31/93 R. Ripp 08/15/94 D. Horowitz 09/12/94 N. Proietto 02/01/95 D. Cornelius 02/01/95 J. Kegel 02/01/95 D. Hooper 02/01/95 APPENDIX B ---------- TO AMP INCORPORATED PENSION RESTORATION PLAN Interest Rate: the average immediate annuity rate used by the Pension Benefit Guaranty Corporation to value immediate annuities as such rate was in effect as of the first day of the 12-months preceding the Retirement Date in question. Mortality Table: the UP-1984 Mortality Table EX-10.D 5 EX-10.D - DEFERRED COMPENSATION PLAN EX-10.D ------- AMP Incorporated DEFERRED COMPENSATION PLAN Effective - January 1, 1995 AMP INCORPORATED DEFERRED COMPENSATION PLAN Table of Contents ARTICLE I - PURPOSE.................................................. 1 1.1 Statement of Purpose; Effective Date........................ 1 ARTICLE II - DEFINITIONS............................................. 1 2.1 Account..................................................... 1 2.2 Base Salary................................................. 1 2.3 Beneficiary................................................. 1 2.4 Board....................................................... 2 2.5 Bonus....................................................... 2 2.6 Change in Control........................................... 2 2.7 Code........................................................ 3 2.8 Committee................................................... 3 2.9 Compensation................................................ 3 2.10 Corporation................................................ 3 2.11 Credited Service........................................... 3 2.12 Deferral Account........................................... 3 2.13 Deferral Benefit........................................... 4 2.14 Determination Date......................................... 4 2.15 Eligible Employee.......................................... 4 2.16 Emergency Benefit.......................................... 4 2.17 Employer................................................... 4 2.18 Investment Return Rate..................................... 4 2.19 Matching Account........................................... 4 2.20 Matching Amount............................................ 5 2.21 Matching Percentage........................................ 5 2.22 Participant................................................ 5 2.23 Participation Agreement.................................... 5 2.24 Plan....................................................... 5 2.25 Plan Year.................................................. 5 2.26 Savings Plan............................................... 5 2.27 Selected Affiliate......................................... 5 2.28 Retirement................................................. 6 ARTICLE III - Eligibility and Participation......................... 6 3.1 Eligibility................................................. 6 3.2 Participation............................................... 6 3.3 Termination of Participation................................ 6 3.4 Ineligible Participant...................................... 7 ARTICLE IV - DEFERRAL OF COMPENSATION................................ 7 4.1 Amount of Deferral.......................................... 7 4.2 Matching Amounts............................................ 7 4.3 Crediting Deferred Compensation and Matching Amounts........ 8 ARTICLE V - BENEFIT ACCOUNTS......................................... 8 5.1 Determination of Account.................................... 8 5.2 Crediting of Investment Return.............................. 8 5.3 Statement of Accounts....................................... 9 ARTICLE VI - PAYMENT OF BENEFITS..................................... 9 6.1 Payment of Deferral Benefit upon Retirement................. 9 6.2 Payment of Deferral Benefit upon Death, or Disability....... 9 6.3 Payment of Deferral Benefit upon Any Other Termination......10 6.4 Emergency Benefit...........................................10 6.5 Form of Payment.............................................10 6.6 Commencement of Payments....................................11 6.7 Small Benefit...............................................11 6.8 Hardship Withdrawal - "Haircut" Provisions..................11 6.9 Specific Term Deferrals.....................................11 ARTICLE VII - BENEFICIARY DESIGNATION................................12 7.1 Beneficiary Designation.....................................12 7.2 Amendments..................................................12 7.3 No Designation..............................................13 7.4 Effect of Payment...........................................12 ARTICLE VIII - ADMINISTRATION........................................12 8.1 Committee; Duties...........................................12 8.2 Agents......................................................14 8.3 Binding Effect of Decisions.................................14 8.4 Indemnity of Committee......................................14 ARTICLE IX - AMENDMENT AND TERMINATION OF PLAN.......................13 9.1 Amendment...................................................13 9.2 Termination.................................................13 ARTICLE X - MISCELLANEOUS............................................15 10.1 Funding....................................................15 10.2 Nonassignability...........................................16 10.3 Legal Fees and Expenses....................................16 10.4 Captions...................................................15 10.5 Governing Law..............................................15 10.6 Successors.................................................15 10.7 Right to Continued Service.................................15 EXHIBIT A EXHIBIT B EXHIBIT C AMP Incorporated DEFERRED COMPENSATION PLAN ARTICLE I - PURPOSE 1.1 Statement of Purpose; Effective Date. The purpose of the AMP Incorporated Deferred Compensation Plan (the "Plan") is to provide selected management and highly compensated employees of the Employer with the option to defer the receipt of portions of their compensation payable for services rendered to the Employer. It is intended that the Plan will assist in attracting and retaining qualified individuals to serve as officers and managers of the Employer. The Plan is effective as of January 1, 1995. ARTICLE II - DEFINITIONS When used in this Plan and initially capitalized, the following words and phrases shall have the meanings indicated: 2.1 Account. "Account" means the sum of a Participant's Deferral Account and Matching Account under the Plan. 2.2 Base Salary. "Base Salary" means a Participant's base earnings paid by an Employer without regard to any increases or decreases in base earnings as a result of (i) an election to defer base earnings under this Plan or (ii) an election between benefits or cash provided under a Plan of an Employer maintained pursuant to Section 125 or 401(k) of the Code and as limited in Exhibit B attached hereto. 2.3 Beneficiary. "Beneficiary" means the person or persons designated or deemed to be designated by the Participant pursuant to Article VII to receive benefits payable under the Plan in the event of the Participant's death. 2.4 Board. "Board" means the Board of Directors of the Corporation. 2.5 Bonus. "Bonus" means a Participant's annual cash bonus paid by the Employer to a Participant under the plans listed in Exhibit B attached hereto and to the degree limited in Exhibit B, as applicable, without regard to any decreases as a result of (i) an election to defer all or any portion of a bonus under this Plan or (ii) an election between benefits or cash provided under a plan of the Employer maintained pursuant to Section 401(k) of the Code. 2.6 Change in Control. "Change in Control" means the date on which any of the following is effective: a. The acquisition of beneficial ownership (other than from the Corporation) by any person, entity or "group," within the meaning of Section 13 (d)(3) or Section 14 (d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act"), excluding, for this purpose, the Corporation or its subsidiaries, or any employee benefit plan of the Corporation or its subsidiaries that acquires beneficial ownership of voting securities of the Corporation (within the meaning of Rule 13d-3 promulgated under the Exchange Act), of 30% or more of either the then outstanding shares of common stock or the combined voting power of the Corporation's then outstanding voting securities entitled to vote generally in the election of directors; or b. A change in the persons constituting the Board as its exists at the date hereof (the "Incumbent Board") such that the directors of the Incumbent Board no longer constitute a majority of the Board; provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election, by the Corporation's shareholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Corporation, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this agreement, considered as though such person were a member of the Incumbent Board; or c. Approval by the stockholders of the Corporation of a reorganization, merger, consolidation in each case with respect to which persons who were the stockholders of the Corporation immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated corporation's then outstanding voting securities, or a liquidation or dissolution of the Corporation or of the sale of all or substantially all of the assets of the Corporation. 2.7 Code. "Code" means the Internal Revenue Code of 1986, as amended. 2.8 Committee. "Committee" has the meaning set forth in Section 8.1. 2.9 Compensation. "Compensation" means the Base Salary and Bonus payable with respect to an Eligible Employee for each calendar year. 2.10 Corporation. "Corporation" means AMP Incorporated (AMP) and any successor thereto. 2.11 Credited Service. "Credited Service" means the sum of all periods of a Participant's employment by the Corporation or a Selected Affiliate for which vesting service credit is given under the Savings Plan. 2.12 Deferral Account. "Deferral Account" means the account maintained on the books of the Employer for the purpose of accounting for the amount of Compensation that each Participant elects to defer under the Plan and for the amount of investment return credited thereto pursuant to Article V. 2.13 Deferral Benefit. "Deferral Benefit" means the benefit payable to a Participant or his or her Beneficiary pursuant to Article VI. 2.14 Determination Date. "Determination Date" means a date on which the amount of a Participant's Account is determined as provided in Article V. The first day of each calendar month shall be a Determination Date. 2.15 Eligible Employee. "Eligible Employee" means a highly compensated or management employee of the Corporation who is designated by the Committee, by Name or group or description, in accordance with Section 3.1 as eligible to participate in the Plan. 2.16 Emergency Benefit. "Emergency Benefit" has the meaning set forth in Section 6.2. 2.17 Employer. "Employer" means, with respect to a Participant, the Corporation or the Selected Affiliate which pays such Participant's Compensation. 2.18 Investment Return Rate. "Investment Return Rate" means: (a) In the case of an investment named in Exhibit C of a fixed income nature, the interest deemed to be credited, (b) In the case of an investment named in Exhibit C of an equity investment nature, the increase and decrease in deemed value and dividends deemed to be credited. 2.19 Matching Account. "Matching Account" means the account maintained on the books of the Employer for the purpose of accounting for the Matching Amount and for the amount of investment return credited thereto for each Participant pursuant to Article V. 2.20 Matching Amount. "Matching Amount" means the amount credited to a Participant's Matching Account under Section 4.3. 2.21 Matching Percentage. "Matching Percentage" means the matching contribution percentage (or percentages) in effect for a specific Plan Year under the Savings Plan, which percentage is applied to the matchable portion of a Participant's pre-tax elective contributions under the Savings Plan to determine the amount of the Participant's company matching contributions under the Savings Plan. 2.22 Participant. "Participant" means any Eligible Employee who elects to participate by filing a Participant Agreement as provided in Section 3.2. 2.23 Participation Agreement. "Participation Agreement" means the agreement filed by a Participant, in the form prescribed by the Committee, pursuant to Section 3.2. 2.24 Plan. "Plan" means the AMP Incorporated Deferred Compensation Plan, as amended from time to time. 2.25 Plan Year. "Plan Year" means a twelve-month period commencing January 1 and ending the following December 31, provided that the first Plan year shall commence January 1, 1995, and end December 31, 1995. 2.26 Savings Plan. "Savings Plan" means, with respect to a Participant, the AMP Incorporated Employee Savings and Thrift Plan, as Amended and Restated January 1, 1987, or as may be amended from time to time. 2.27 Selected Affiliate. "Selected Affiliate" means (1) any corporation in an unbroken chain of corporations beginning with the Corporation if each of the corporations other than the last corporation in the chain owns or controls, directly or indirectly, stock possessing not less than 50 percent of the total combined voting power of all classes of stock in one of the other corporations, or (2) any partnership or joint venture in which one or more of such corporations is a partner or venturer, each of which shall be selected by the Committee. 2.28 Retirement "Retirement" means the voluntary termination of a Participant when retirement is permitted under the AMP Pension Plan, the AMP Pension Restoration Plan, or any other retirement plan maintained by the Corporation or a Selected Affiliate as defined therein. ARTICLE III - Eligibility and Participation 3.1 Eligibility. Eligibility to participate in the Plan is limited to Eligible Employees. From time to time, and subject to Section 3.4, the Committee shall prepare, and attach to the Plan as Exhibit A, a complete list of the Eligible Employees, by individual name or by reference to an identifiable group of persons, of whom shall be a select group of management or highly compensated employees. 3.2 Participation. Participation in the Plan shall be limited to Eligible Employees who elect to participate in the Plan by filing a Participation Agreement with the Committee. An Eligible Employee shall commence or recommence participation in the Plan upon the first day of the calendar year immediately following the receipt of his or her Participation Agreement by the Committee, but in the case of an Eligible Employee who is newly hired participation shall commence upon the first day of his or her first payroll period following the receipt of his or her Participation Agreement by the Committee. 3.3 Termination of Participation. A Participant may change a previously elected percentage of deferral of Base Salary or elect to terminate his or her participation in the Plan at any time by filing a written notice thereof with the Committee. Changes will only become effective as of the beginning of the next calendar year following receipt of the change in election by the Committee and in accordance with the Company's prevailing administrative procedures. Amounts credited to such Participant's Account with respect to periods prior to the effective date of such termination shall continue to be payable pursuant to, receive investment return on, and otherwise be governed by, the terms of the Plan. 3.4 Ineligible Participant. Notwithstanding any other provisions of this Plan to the contrary, if the Committee determines that any Participant may not qualify as a "management or highly compensated employee" within the meaning of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or regulations thereunder, the Committee may determine, in its sole discretion, that such Participant shall cease to be eligible to participate in this Plan. Upon such determination, the Employer shall make an immediate lump sum payment to the Participant equal to the vested amount credited to his Account. Upon such payment, no benefit shall thereafter be payable under this Plan either to the Participant or any Beneficiary of the Participant, and all of the Participant's elections as to the time and manner of payment of his Account will be deemed to be canceled. ARTICLE IV - DEFERRAL OF COMPENSATION 4.1 Amount of Deferral. With respect to each Plan Year, a Participant may elect to defer a specified percentage of his or her Compensation up to the percentage of Compensation defined and the terms described in Exhibit B attached hereto. A Participant may change the percentage of his or her Compensation to be deferred by filing a written notice thereof with the Committee. Any such change shall be effective as of the first day of the Plan Year immediately following the Plan Year in which such notice is filed with the Committee. 4.2 Matching Amounts. The Employer shall provide Matching Amounts under this Plan with respect to each Participant based on the Matching Percentage in effect from time to time under the Savings Plan. The total Matching Amounts under this Plan on behalf of a Participant for each Plan Year shall not exceed the difference between (i) the Matching Percentage of the matchable portion of the Base Salary deferred by a Participant under this Plan and of the Participant's pre-tax elective deferrals for the Plan Year under the Savings Plan, less (ii) the company matching contributions actually allocated to the Participant under the Savings Plan for such Plan Year. For purposes hereof, the matchable portion of the Participant's deferrals shall be determined in the same manner as the matchable portion of the Participant's Savings Plan pre-tax elective deferrals, without regard however to any Code- related limitations on compensation or contributions. 4.3 Crediting Deferred Compensation and Matching Amounts. The amount of Compensation that a Participant elects to defer under the Plan shall be credited by the Employer to the Participant's Deferral Account monthly. To the extent that the Employer is required to withhold any taxes or other amounts from a Participant's deferred Compensation pursuant to any state, federal or local law, such amounts shall be withheld only from the Participant's Bonus compensation before such amounts are credited unless the Participant notes otherwise, in writing, at the time his election to defer is made. The Matching Amount under the Plan for each Participant under Section 4.2 shall be credited by the Employer no later than the time that matching contributions are allocated under the Savings Plan. ARTICLE V - BENEFIT ACCOUNTS 5.1 Determination of Account. As of each Determination Date, a Participant's Account shall consist of the balance of the Participant's Account as of the immediately preceding Determination Date, plus the Participant's deferred Compensation and Matching Amount credited pursuant to Section 4.3 since the immediately preceding Determination Date, plus investment return credited as of such Determination Date pursuant to Section 5.2, minus the aggregate amount of distributions, if any, made from such Account since the immediately preceding Determination Date. 5.2 Crediting of Investment Return. As of each Determination Date, each Participant's Deferral Account and Matching Account shall be increased by the amount of investment return earned since the immediately preceding Determination Date. Investment return shall be credited at the Investment Return Rate as of such Determination Date based on the average balance of the Participant's Deferral Account and Matching Account, respectively, since the immediately preceding Determination Date, but after such Accounts have been adjusted for any contributions or distributions to be credited or deducted for such period. Investment return for the period prior to the first Determination Date applicable to a Deferral Account or a Matching Account shall be deemed earned ratably over such period. Until a Participant or his or her Beneficiary receives his or her entire Account, the unpaid balance thereof shall earn an investment return as provided in this Section 5.2. 5.3 Statement of Accounts. The Committee shall provide to each Participant, within 120 days after the close of each Plan Year, a statement setting forth the balance of such Participant's Account as of the last day of the preceding Plan Year and showing all adjustments made thereto during such Plan Year. 5.4 Vesting of Account. Except as provided in Sections 10.1 and 10.2, a Participant shall be 100% vested in his or her Deferral Account at all times. A Participant's interest in his or her Matching Account shall be 100% vested as of the earlier of a Change in Control, his or her death, disability or Retirement at or after age 65. Prior to any of these events, a Participant's interest in his or her Matching Account shall vest under the vesting schedule for matching contributions under the Savings Plan. Any nonvested portion of a Participant's Matching Account shall be forfeited in the event of Participant's Termination for reasons other than death, disability, or Retirement at or after age 65. Forfeitures under the Plan shall be for the benefit of the Employer and shall not be credited to other Participants. ARTICLE VI - PAYMENT OF BENEFITS 6.1 Payment of Deferral Benefit upon Retirement. Upon the termination of service of the Participant as an employee of the Employer and all Selected Affiliates, by reason of Retirement, the Employer shall pay to the Participant a Deferral Benefit based on his written election pursuant to Section 6.5. 6.2 Payment of Deferral Benefit upon Death or Disability. Upon the death or disability of a Participant, the Employer shall pay to the Participant or his Beneficiary, as the case may be, a Deferral Benefit equal to the balance of his vested Account determined pursuant to Article V, less any amounts previously distributed. Payment shall be in the form elected by the Participant in accordance with Section 6.5, provided that upon application by the disabled Participant or Beneficiary the Committee, in its sole and absolute discretion, may override an election of installment payments and direct payment of the Deferral Benefit in a lump sum. For purposes hereof, "disability" shall be determined in accordance with the criteria applicable for purposes of the Corporation's long-term disability plan. 6.3 Payment of Deferral Benefit upon Any Other Termination. Upon the termination of service of the Participant as an employee of the Employer and all Selected Affiliates for reasons other than Retirement, death or disability, the Employer shall pay to the Participant or his Beneficiary, as the case may be, a Deferral Benefit equal to the balance of his or her vested Account determined pursuant to Article V, less any amounts previously distributed, twelve (12) months after termination occurs. If, during that twelve (12) month period, the Participant violates any confidentiality agreement, intellectual property agreement or non-competition agreement with an Employer in effect at the time of the termination, the Participant's Deferral Account shall be reduced to reflect the value that it would have on that date if it were credited with the lower of 30- day treasury rates or 6% from the time the contributions to that account were initially made, and the Participant's Matching Account shall be forfeited. 6.4 Emergency Benefit. In the event that the Committee, under written request of a Participant, determines, in its sole discretion, that the Participant has suffered an unforeseeable financial emergency, the Employer shall pay to the Participant, as soon as practicable following such determination, an amount necessary to meet the emergency (the "Emergency Benefit"), but not exceeding the aggregate balance of such Participant's Deferral Account (and the vested portion of his Matching Account) as of the date of such payment. For purposes of this Section 6.2, an "unforeseeable financial emergency" shall mean an event that the Committee determines to give rise to an unexpected need for cash arising from an illness, disability, casualty loss, sudden financial reversal or other such unforeseeable occurrence. Cash needs arising from foreseeable events such as the purchase of a house or education expenses for children shall not be considered to be the result of an unforeseeable financial emergency. Amounts of an Emergency Benefit may not exceed the amount the Committee reasonably determines to be necessary to meet such emergency needs (including taxes incurred by reason of a taxable distribution). The amount of the Deferral Benefit otherwise payable under the Plan to such Participant shall be adjusted to reflect the early payment of the Emergency Benefit. 6.5 Form of Payment. The Deferral Benefit payable pursuant to Section 6.1 shall be paid in one of the following forms, as elected by the Participant in his or her Participant Agreement on file as of one (1) year and one (1) day prior to the date of termination (a) Annual payments of a fixed amount which shall amortize the vested Account balance, or the in-service distribution portion thereof, as of the payment commencement date over a period not to exceed ten (10) years (together, in the case of each annual payment, with interest thereon credited after the payment commencement date pursuant to Section 5.2). (b) A lump sum. 6.6 Commencement of Payments. Commencement of payments under Section 6.1 of the Plan shall begin within 60 days following receipt of written notice by the Committee of an event which entitles a Participant (or a Beneficiary) to payments under the Plan. 6.7 Small Benefit. In the event the Committee determines that the balance of a Participant's Account is less than $500 at the time of commencement of payments, or the portion of the balance of the Participant's Account payable to any Beneficiary is less than $500 at the time of commencement of payments, the Committee may inform the Employer and the Employer, in its discretion, may choose to pay the benefit in the form of a lump sum payment, notwithstanding any provision of the Plan or a Participant election to the contrary. Such lump sum payment shall be equal to the balance of the Participant's Account or the portion thereof payable to a Beneficiary. 6.8 Hardship Withdrawal - "Haircut" Provisions Notwithstanding any other provision of the Plan, an actively- employed Participant at any time shall be entitled to receive, upon written request to the Committee, a lump sum distribution of the entire amount owed to the Participant under the Plan subject to penalties as set forth below: (a) The lump-sum will be equal to 90% of the Participant's then current Deferral Account and vested Matching Account balances, and; (b) The remaining balance shall be forfeited by the Participant, and; (c) The Participant will not be eligible to recommence income deferrals until the first of the January following a one (1) year period commencing on the date of withdrawal, and then only if otherwise eligible to participate under the terms of the Plan. The amount payable under this section of the Plan shall be paid within forty-five (45) days following receipt of written notice by the Committee. 6.9 Specific Term Deferrals The Company may, from time to time, offer to Participants the opportunity to defer specific amounts of Base Salary or Bonus for a specific duration and paid out in installments prior to normal retirement. These deferrals will be accounted for separately and will be paid out in accordance with an election that applies only to that deferral. ARTICLE VII - BENEFICIARY DESIGNATION 7.1 Beneficiary Designation. Each Participant shall have the right, at any time, to designate any person or persons as his Beneficiary to whom payment under the Plan shall be made in the event of his or her death prior to complete distribution to the Participant of his or her Account. Any Beneficiary designation shall be made in a written instrument provided by the Committee. All Beneficiary designations must be filed with the Committee and shall be effective only when received in writing by the Committee. 7.2 Amendments. Any Beneficiary designation may be changed by a Participant by the filing of a new Beneficiary designation, which will cancel all Beneficiary designations previously filed. 7.3 No Designation. If a Participant fails to designate a Beneficiary as provided above, or if all designated Beneficiaries predecease the Participant, then the Participant's designated Beneficiary shall be deemed to be the Participant's estate 7.4 Effect of Payment. Payment to a Participant's Beneficiary (or, upon the death of a primary Beneficiary, to the contingent Beneficiary or, if none, to the Participant's estate) shall completely discharge the Employer's obligations to the Participant under the Plan. ARTICLE VIII - ADMINISTRATION 8.1 Committee; Duties. The administrative committee for the Plan (the "Committee") shall be those members of the Compensation and Management Development Committee of the Board who are not Participants, as long as there are at least three such members. If there are not at least three such non-participating persons on the Committee, the Chief Executive Officer of the Corporation shall appoint other non- participating Directors or Corporation officers to serve on the Committee. The Committee shall supervise the administration and operation of the Plan, may from time to time adopt rules and procedures governing the Plan and shall have authority to give interpretive rulings with respect to the Plan. 8.2 Agents. The Committee may appoint an individual, who may be an employee of the Corporation, to be the Committee's agent with respect to the day-to-day administration of the Plan. In addition, the Committee may, from time to time, employ other agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with counsel who may be counsel to the Corporation. 8.3 Binding Effect of Decisions. Any decision or action of the Committee with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan shall be final and binding upon all persons having any interest in the Plan. 8.4 Indemnity of Committee. The Corporation shall indemnify and hold harmless the members of the Committee and their duly appointed agents under Section 8.2 against any and all claims, loss, damage, expense or liability arising from any action or failure to act with respect to the Plan, except in the case of gross negligence or willful misconduct by any such member or agent of the Committee. ARTICLE IX - AMENDMENT AND TERMINATION OF PLAN 9.1 Amendment. The Corporation, on behalf of itself and of each Selected Affiliate, may at any time amend, suspend or reinstate any or all of the provisions of the Plan, except that no such amendment, suspension or reinstatement may adversely affect any Participant's Account, as it existed as of the day before the effective date of such amendment, suspension or reinstatement, without such Participant's prior written consent. Written notice of any amendment or other action with respect to the Plan shall be given to each Participant. 9.2 Termination. The Corporation, on behalf of itself and of each Selected Affiliate, in its sole discretion, may terminate this Plan at any time and for any reason whatsoever. Upon termination of the Plan, the Committee shall take those actions necessary to administer any Accounts existing prior to the effective date of such termination; provided, however, that a termination of the Plan shall not adversely affect the value of a Participant's Account, the crediting of investment return under Section 5.2 or the timing or method of distribution of a Participant's Account, without the Participant's prior written consent. Notwithstanding the foregoing, a termination of the Plan shall not give rise to accelerated or automatic vesting of any Participant's Matching Account. ARTICLE X - MISCELLANEOUS 10.1 Funding. Participants, their Beneficiaries, and their heirs, successors and assigns, shall have no secured interest or claim in any property or assets of the Employer. The Employer's obligation under the Plan shall be merely that of an unfunded and unsecured promise of the Employer to pay money in the future. Notwithstanding the foregoing, in the event of a Change in Control, the Corporation shall create an irrevocable trust, or before such time the Corporation may create an irrevocable or revocable trust, to hold funds to be used in payment of the obligations of Employers under the Plan. In the event of a Change in Control or prior thereto, the Employers shall fund such trust in an amount equal to no less than the total value of the Participants' Accounts under the Plan as of the Determination Date immediately preceding the Change in Control, provided that any funds contained therein shall remain liable for the claims of the respective Employer's general creditors. 10.2 Nonassignability. No right or interest under the Plan of a Participant or his or her Beneficiary (or any person claiming through or under any of them), shall be assignable or transferable in any manner or be subject to alienation, anticipation, sale, pledge, encumbrance or other legal process or in any manner be liable for or subject to the debts or liabilities of any such Participant or Beneficiary. If any Participant or Beneficiary shall attempt to or shall transfer, assign, alienate, anticipate, sell, pledge or otherwise encumber his or her benefits hereunder or any part thereof, or if by reason of his or her bankruptcy or other event happening at any time such benefits would devolve upon anyone else or would not be enjoyed by him or her, then the Committee, in its discretion, may terminate his or her interest in any such benefit (including the Deferral Account) to the extent the Committee considers necessary or advisable to prevent or limit the effects of such occurrence. Termination shall be effected by filing a written "termination declaration" with the Secretary of the Corporation and making reasonable efforts to deliver a copy to the Participant or Beneficiary whose interest is adversely affected (the "Terminated Participant"). As long as the Terminated Participant is alive, any benefits affected by the termination shall be retained by the Employer and, in the Committee's sole and absolute judgment, may be paid to or expended for the benefit of the Terminated Participant, his or her spouse, his or her children or any other person or persons in fact dependent upon him or her in such a manner as the Committee shall deem proper. Upon the death of the Terminated Participant, all benefits withheld from him or her and not paid to others in accordance with the preceding sentence shall be disposed of according to the provisions of the Plan that would apply if he or she died prior to the time that all benefits to which he or she was entitled were paid to him or her. 10.3 Legal Fees and Expenses. It is the intent of the Corporation and each Selected Affiliate that no Eligible Employee or former Eligible Employee be required to incur the expenses associated with the enforcement of his or her rights under this Plan by litigation or other legal action because the cost and expense thereof would substantially detract from the benefits intended to be extended to an Eligible Employee hereunder. Accordingly, if after a Change in Control it should appear that the Employer has failed to comply with any of its obligations under this Plan or in the event that after a Change in Control the Employer or any other person takes any action to declare this Plan void or unenforceable, or institutes any litigation designed to deny, or to recover from, the Eligible Employee the benefits intended to be provided to such Eligible Employee hereunder, the Employer irrevocably authorizes such Eligible Employee from time to time to retain counsel of his or her choice, at the expense of the Employer as hereafter provided, to represent such Eligible Employee in connection with the initiation or defense of any litigation or other legal action, whether by or against the Employer or any director, officer, stockholder or other person affiliated with the Employer in any jurisdiction. Notwithstanding any existing or prior attorney- client relationship between the Employer and such counsel, the Employer irrevocably consents to such Eligible Employee's entering into an attorney-client relationship with such counsel, and in that connection the Employer and such Eligible Employee agree that a confidential relationship shall exist between such Eligible Employee and such counsel. The Employer shall pay and be solely responsible for any and all attorneys' and related fees and expenses incurred by such Eligible Employee as a result of the Employer's failure after a Change in Control to perform under this Plan or any provision thereof; or as a result of the Employer or any person contesting the validity or enforceability of this Plan or any provision thereof. 10.4 Captions. The captions contained herein are for convenience only and shall not control or affect the meaning or construction hereof. 10.5 Governing Law. The provisions of the Plan shall be construed and interpreted according to the laws of the Commonwealth of Pennsylvania. 10.6 Successors. The provisions of the Plan shall bind and inure to the benefit of the Corporation, its Selected Affiliates, and their respective successors and assigns. The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise, acquire all or substantially all of the business and assets of the Corporation or a Selected Affiliate and successors of any such corporation or other business entity. 10.7 Right to Continued Service. Nothing contained herein shall be construed to confer upon any Employee the right to continue to serve as an Employee of the Employer or in any other capacity. Executed this day of December, 1994. AMP Incorporated By: Title: EXHIBIT A Re: Section 3.1 -Eligible Employees Date: January 1, 1995 The Committee has determined that the following named individuals are eligible to participate in the Plan as Eligible Employees: Initial Eligibility Name Date H. Cole 01/01/95 D. Cornelius 01/01/95 T. Dalrymple 01/01/95 K. Drysdale 01/01/95 R. Gassner 01/01/95 C. Goonrey 01/01/95 J. Gorjat 01/01/95 P. Guarneschelli 01/01/95 J. Gurski 01/01/95 J. Hassan 01/01/95 D. Hooper 01/01/95 D. Horowitz 01/01/95 W. Hudson 01/01/95 A. Kastel 01/01/95 J. Kegel 01/01/95 R. Knerr 01/01/95 J. Maher 01/01/95 J. Marley 01/01/95 N. Proietto 01/01/95 R. Ripp 01/01/95 B. Savidge 01/01/95 R. Seall 01/01/95 C. Timmins 01/01/95 P. Workinger 01/01/95 D. Wilkie 01/01/95 EXHIBIT B Re: Section 4.1 - Amount of Deferral Dated: January 1, 1995 As of the date above, and effective until this Exhibit is Modified by the Committee, the table below indicates the types of compensation which are eligible for income deferral at the assigned percentages as noted: Type of Compensation Maximum Percentage Other Limitations that can be deferred Base Salary 15% Offset by any amount deferred on a pre- tax basis in the Savings Plan. Deferrals to this Plan will be modified to prevent Participant income for qualified plan purposes from falling below the limit as described in IRC Section 401(a)(17) currently set $150,000. Management Incentive Plan 100% In increments of 25% Any Other Annual Cash Bonus Plan of an Employer 100% In Increments of 25% EXHIBIT C Re: Section 2.18 - Investment Return Rate Date: January 1, 1995 The following indicate the investment account equivalents available as of the date indicated that are used in determining the Investment Return Rate. Account Name Effective Date Description Fixed Return 1/1/95 120% of the Applicable Federal Mid-term Rate, adjusted monthly AMP Common Stock 1/1/95 Investment credit equivalent to an investment in AMP Incorporated common shares including dividend reinvestment EX-27 6 FDS FOR 3-MOS 1995 10-Q
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS CONTAINED IN THE COMPANY'S 1995 FIRST QUARTER REPORT TO SHAREHOLDERS AND IS QUALIFIED BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1995 MAR-31-1995 234,953 144,931 953,707 0 621,566 2,183,119 3,698,084 2,114,255 4,057,959 1,150,762 0 12,480 0 0 2,432,347 4,057,959 1,202,800 1,202,800 812,716 812,716 0 0 6,764 168,504 63,700 104,804 0 0 0 104,804 0.50 0.50
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