-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JV1ZnN3lPB5LTahqAX8LyA/BMr194D5pybCCzG198KZepIztpMuUr9o5ATqlmpvN bPvZ+VTJxZ0TZpi28vX3cQ== 0000006164-98-000025.txt : 19980630 0000006164-98-000025.hdr.sgml : 19980630 ACCESSION NUMBER: 0000006164-98-000025 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980629 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMP INC CENTRAL INDEX KEY: 0000006164 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC CONNECTORS [3678] IRS NUMBER: 230332575 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-04235 FILM NUMBER: 98655831 BUSINESS ADDRESS: STREET 1: P O 3608 CITY: HARRISBURG 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 11-K 1 11-K DOCUMENT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------------- FORM 11-K -------------------------------- ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One): [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 1997. OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from ____________ to ______________. Commission File Number 1-4235. A. Full title of the plan and the address of the plan, if different from that of the issuer named below: AMP Incorporated Employee Savings and Thrift Plan B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: AMP Incorporated 470 Friendship Road Harrisburg, Pennsylvania 17111 Includes an Exhibit Index REQUIRED INFORMATION The AMP Incorporated Employee Savings and Thrift Plan (the "Plan") is a plan that is subject to the Employee Retirement Income Security Act of 1974 ("ERISA"), and therefore the Plan is providing, as Exhibit 1 hereto, Plan financial statements and schedules prepared in accordance with the financial reporting requirements of ERISA. These financial statements include audited statements of net assets available for benefits at December 31, 1997 and December 31, 1996, and audited statements of changes in net assets available for benefits for the fiscal year ended December 31, 1997. The Plan financial statements have been examined by Arthur Andersen LLP. A currently dated and manually signed written consent of Arthur Andersen LLP with respect to the Plan financial statements that relate to the fiscal year ended December 31, 1997, and the Plan financial statements themselves, have been incorporated by reference in a Registration Statement on Form S-8 under the Securities Act of 1933, as amended. This written consent of Arthur Andersen LLP is provided as Exhibit 2 to this annual report. SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. AMP Incorporated Employee Savings and Thrift Plan (the "Plan") AMP Incorporated (Plan Administrator) /s/ J. C. Overbaugh Date: June 29, 1998 By:_______________________________ Joseph C. Overbaugh Treasurer EXHIBIT INDEX EXHIBIT DESCRIPTION - ------- ----------- 1 Audited financial statements for AMP Incorporated Employee Savings and Thrift Plan 2 Consent of Independent Public Accountants EX-1 2 FINANCIAL STATEMENTS AND AUDITORS' REPORTS AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN FINANCIAL STATEMENTS AS OF DECEMBER 31, 1997 AND 1996 TOGETHER WITH AUDITORS' REPORT AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN INDEX TO FINANCIAL STATEMENTS AND SCHEDULES DECEMBER 31, 1997 AND 1996 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS FINANCIAL STATEMENTS: Statements of Net Assets Available for Benefits as of December 31, 1997 and 1996 Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 1997 Notes to Financial Statements SCHEDULES: Schedule I -- Item 27(a) -- Schedule of Investments as of December 31, 1997 Schedule II -- Item 27(d) -- Schedule of Reportable Transactions for the Year Ended December 31, 1997 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Administrator of the AMP Incorporated Employee Savings and Thrift Plan: We have audited the accompanying statements of net assets available for benefits, including the schedule of investments, of the AMP Incorporated Employee Savings and Thrift Plan as of December 31, 1997 and 1996, and the related statement of changes in net assets available for benefits for the year ended December 31, 1997. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1997 and 1996, and the changes in net assets available for benefits for the year ended December 31, 1997, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules listed in the accompanying index are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statements of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Arthur Andersen LLP Philadelphia, PA June 15, 1998
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1997 | The Vanguard Group Funds | ------------------------ | Money Market Index Trust ASSETS Total | Prime Wellington 500 Windsor II PrimeCap ------ ----- | ------------- ------------- ------------ ---------- -------- INVESTMENTS, at market (Notes 2 and 3): Commingled trusts $484,086,683 $19,226,750 $53,007,329 $190,121,782 $56,798,234 $95,478,987 Common stock 58,152,696 -- -- -- -- -- Participant loans (Note 1) 33,628,801 -- -- -- -- -- ------------ ----------- ----------- ------------ ----------- ----------- 575,868,180 19,226,750 53,007,329 190,121,782 56,798,234 95,478,987 ------------ ----------- ----------- ------------ ----------- ----------- DEPOSITS WITH INSURANCE COMPANIES, at contract value (Notes 2 and 4) 174,838,675 -- -- -- -- -- ------------ ----------- ----------- ------------ ----------- ----------- Total investments 750,706,855 19,226,750 53,007,329 190,121,782 56,798,234 95,478,987 ------------ ----------- ----------- ------------ ----------- ----------- RECEIVABLES: Employer contributions (Note 1) 250,518 6,345 17,890 42,456 17,824 31,023 Employee deposits (Note 1) 794,063 19,821 63,638 165,363 65,597 114,917 Accrued interest and dividends 4,373 -- -- -- -- -- Other 490,104 -- -- -- -- -- ------------ ----------- ----------- ------------ ----------- ----------- Total receivables 1,539,058 26,166 81,528 207,819 83,421 145,940 ------------ ----------- ----------- ------------ ----------- ----------- TOTAL ASSETS 752,245,913 19,252,916 53,088,857 190,329,601 56,881,655 95,624,927 ------------ ----------- ----------- ------------ ----------- ----------- LIABILITIES ----------- PAYABLES: Investments purchased (681,381) -- -- -- -- -- ------------ ----------- ----------- ------------ ------------ ----------- NET ASSETS AVAILABLE FOR BENEFITS $751,564,532 $19,252,916 $53,088,857 $190,329,601 $56,881,655 $95,624,927 ============ =========== =========== ============ ============ =========== AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1997 CONTINUED The Vanguard Group Funds | ------------------------ | World Fund International | T. Rowe Price AMP Fixed AMP Stock ASSETS U.S. Growth Growth | New Horizons Income Fund Fund Loan Fund ------ ----------- ------------- | ------------- ----------- --------- --------- INVESTMENTS, at market (Notes 2 and 3): Commingled trusts $39,710,055 $5,893,731 $10,425,464 $ 12,334,738 $ 1,089,613 $ -- Common stock -- -- -- -- 58,152,696 -- Participant loans (Note 1) -- -- -- -- -- 33,628,801 ----------- ---------- ---------- ------------ ----------- ----------- 39,710,055 5,893,731 10,425,464 12,334,738 59,242,309 33,628,801 ----------- ---------- ---------- ------------ ----------- ----------- DEPOSITS WITH INSURANCE COMPANIES, at contract value (Notes 2 and 4) -- -- -- 174,838,675 -- -- ----------- ---------- ---------- ------------ ----------- ----------- Total investments 39,710,055 5,893,731 10,425,464 187,173,413 59,242,309 33,628,801 ----------- ---------- ---------- ------------ ----------- ----------- RECEIVABLES: Employer contributions (Note 1) 14,081 3,272 5,489 75,154 36,984 -- Employee deposits (Note 1) 50,019 10,425 17,780 254,615 31,888 -- Accrued interest and dividends -- -- -- -- 4,373 -- Other -- -- -- -- 418,467 71,637 ----------- ---------- ---------- ------------ ----------- ----------- Total receivables 64,100 13,697 23,269 329,769 491,712 71,637 ----------- ---------- ---------- ------------ ----------- ----------- TOTAL ASSETS 39,774,155 5,907,428 10,448,733 187,503,182 59,734,021 33,700,438 ----------- ---------- ---------- ------------ ----------- ----------- LIABILITIES ----------- PAYABLES: Investments purchased -- -- -- -- (681,381) -- ----------- ---------- ---------- ------------ ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS $39,774,155 $5,907,428 $10,448,733 $187,503,182 $59,052,640 $33,700,438 =========== ========== =========== ============ =========== =========== The accompanying notes and schedules are an integral part of this statement.
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1996 | The Vanguard Group Funds | ------------------------ | Money Market Index Trust ASSETS Total | Prime Wellington 500 Windsor II PrimeCap ------ ----- | ------------- ------------- ------------ ---------- -------- INVESTMENTS, at market (Notes 2 and 3): Commingled trusts $344,952,825 $18,299,459 $38,718,829 $134,132,303 $37,413,464 $53,414,376 Common stock 51,238,837 -- -- -- -- -- Participant loans (Note 1) 30,410,484 -- -- -- -- -- ------------ ----------- ----------- ------------ ----------- ----------- 426,602,146 18,299,459 38,718,829 134,132,303 37,413,464 53,414,376 ------------ ----------- ----------- ------------ ----------- ----------- DEPOSITS WITH INSURANCE COMPANIES, at contract value (Notes 2 and 4) 182,365,535 -- -- -- -- -- ------------ ----------- ----------- ------------ ----------- ----------- Total investments 608,967,681 18,299,459 38,718,829 134,132,303 37,413,464 53,414,376 ------------ ----------- ----------- ------------ ----------- ----------- RECEIVABLES: Employer contributions (Note 1) 192,330 5,257 12,662 30,267 11,997 19,218 Employee deposits (Note 1) 691,749 20,439 53,829 139,825 52,722 85,439 Accrued interest and dividends 1,108 -- -- -- -- -- Other 642,866 -- -- -- -- -- ------------ ----------- ----------- ------------ ----------- ----------- Total receivables 1,528,053 25,696 66,491 170,092 64,719 104,657 ------------ ----------- ----------- ------------ ----------- ----------- TOTAL ASSETS 610,495,734 18,325,155 38,785,320 134,302,395 37,478,183 53,519,033 ------------ ----------- ----------- ------------ ----------- ----------- LIABILITIES ----------- PAYABLES: Investments purchased (535,955) -- -- -- -- -- ------------ ----------- ----------- ------------ ------------ ----------- NET ASSETS AVAILABLE FOR BENEFITS $609,959,779 $18,325,155 $38,785,320 $134,302,395 $37,478,183 $53,519,033 ============ =========== =========== ============ ============ =========== AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1996 CONTINUED The Vanguard Group Funds | ------------------------ | World Fund International | T. Rowe Price AMP Fixed AMP Stock ASSETS U.S. Growth Growth | New Horizons Income Fund Fund Loan Fund ------ ----------- ------------- | ------------- ----------- --------- --------- INVESTMENTS, at market (Notes 2 and 3): Commingled trusts $30,414,357 $4,068,563 $9,479,424 $ 19,012,049 $ 1 $ -- Common stock -- -- -- -- 51,238,837 -- Participant loans (Note 1) -- -- -- -- -- 30,410,484 ----------- ---------- ---------- ------------ ----------- ----------- 30,414,357 4,068,563 9,479,424 19,012,049 51,238,838 30,410,484 ----------- ---------- ---------- ------------ ----------- ----------- DEPOSITS WITH INSURANCE COMPANIES, at contract value (Notes 2 and 4) -- -- -- 182,365,535 -- -- ----------- ---------- ---------- ------------ ----------- ----------- Total investments 30,414,357 4,068,563 9,479,424 201,377,584 51,238,838 30,410,484 ----------- ---------- ---------- ------------ ----------- ----------- RECEIVABLES: Employer contributions (Note 1) 10,839 2,032 5,179 58,490 36,389 -- Employee deposits (Note 1) 45,851 7,251 20,006 232,393 33,994 -- Accrued interest and dividends -- -- -- -- 1,108 -- Other -- -- -- -- 627,303 15,563 ----------- ---------- ---------- ------------ ----------- ----------- Total receivables 56,690 9,283 25,185 290,883 698,794 15,563 ----------- ---------- ---------- ------------ ----------- ----------- TOTAL ASSETS 30,471,047 4,077,846 9,504,609 201,668,467 51,937,632 30,426,047 ----------- ---------- ---------- ------------ ----------- ----------- LIABILITIES ----------- PAYABLES: Investments purchased -- -- -- -- (535,955) -- ----------- ---------- ---------- ------------ ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS $30,471,047 $4,077,846 $9,504,609 $201,668,467 $51,401,677 $30,426,047 =========== ========== ========== ============ =========== =========== The accompanying notes and schedules are an integral part of this statement.
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997 | The Vanguard Group Funds | ------------------------ | Money Market Index Trust Total | Prime Wellington 500 Windsor II PrimeCap ----- | ------------- ------------- ------------ ---------- -------- ADDITIONS: Investment income- Net appreciation (depreciation) in market value of investments $ 85,614,684 $ -- $ 4,965,705 $ 42,113,570 $ 8,209,608 $17,906,678 Interest and dividends 36,476,717 1,356,573 4,409,050 3,818,051 5,124,122 3,366,565 ------------ ----------- ----------- ------------ ----------- ----------- 122,091,401 1,356,573 9,374,755 45,931,621 13,333,730 21,273,243 ------------ ----------- ----------- ------------ ----------- ----------- Contributions and deposits (Note 1) Employer 12,043,633 706,534 890,783 2,050,706 872,935 1,378,939 Employee 48,085,577 3,518,702 3,991,919 10,067,890 4,046,217 6,399,779 ------------ ----------- ----------- ------------ ----------- ----------- 60,129,210 4,225,236 4,882,702 12,118,596 4,919,152 7,778,718 ------------ ----------- ----------- ------------ ----------- ----------- Total additions 182,220,611 5,581,809 14,257,457 58,050,217 18,252,882 29,051,961 ------------ ----------- ----------- ------------ ----------- ----------- DEDUCTIONS: Payments to participants (Note 1) 40,485,651 1,245,796 2,348,004 7,367,148 1,805,686 3,111,740 Loan maintenance fees 130,207 18,290 19,200 22,420 11,560 3,630 ------------ ----------- ----------- ------------ ----------- ----------- Total deductions 40,615,858 1,264,086 2,367,204 7,389,568 1,817,246 3,115,370 INTERFUND TRANSFERS--NET -- (3,389,962) 2,413,284 5,366,557 2,967,836 16,169,303 ------------ ----------- ----------- ------------ ----------- ----------- Net additions (deductions) 141,604,753 927,761 14,303,537 56,027,206 19,403,472 42,105,894 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 609,959,779 18,325,155 38,785,320 134,302,395 37,478,183 53,519,033 ------------ ----------- ----------- ------------ ----------- ----------- End of year $751,564,532 $19,252,916 $53,088,857 $190,329,601 $56,881,655 $95,624,927 ============ =========== =========== ============ =========== =========== AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997 CONTINUED The Vanguard Group Funds | ------------------------ | World Fund International | T. Rowe Price AMP Fixed AMP Stock U.S. Growth Growth | New Horizons Income Fund Fund Loan Fund ----------- ------------- | ------------- ----------- --------- --------- ADDITIONS: Investment income- Net appreciation (depreciation) in market value of investments $ 6,548,183 ($ 120,725) $ 599,845 $ -- $ 5,391,820 $ -- Interest and dividends 1,516,364 249,217 245,179 12,423,768 1,237,279 2,730,549 ----------- ---------- ---------- ------------ ----------- ----------- 8,064,547 128,492 845,024 12,423,768 6,629,099 2,730,549 ----------- ---------- ---------- ------------ ----------- ----------- Contributions and deposits (Note 1) Employer 740,436 156,394 297,587 2,953,447 1,995,872 -- Employee 3,342,631 622,551 1,221,976 12,847,118 2,026,794 -- ----------- ---------- ---------- ------------ ----------- ----------- 4,083,067 778,945 1,519,563 15,800,565 4,022,666 -- ----------- ---------- ---------- ------------ ----------- ----------- Total additions 12,147,614 907,437 2,364,587 28,224,333 10,651,765 2,730,549 ----------- ---------- ---------- ------------ ----------- ----------- DEDUCTIONS: Payments to participants 1,389,001 257,461 271,238 19,126,604 2,192,651 1,370,322 (Note 1) Loan maintenance fees 5,060 2,000 16,872 30,060 1,115 -- ----------- ---------- ---------- ------------ ----------- ----------- Total deductions 1,394,061 259,461 288,110 19,156,664 2,193,766 1,370,322 ----------- ---------- ---------- ------------ ----------- ----------- INTERFUND TRANSFERS--NET (1,450,445) 1,181,606 (1,132,353) (23,232,954) (807,036) 1,914,164 ----------- ---------- ---------- ------------ ----------- ----------- Net additions (deductions) 9,303,108 1,829,582 944,124 (14,165,285) 7,650,963 3,274,391 ----------- ---------- ---------- ------------ ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 30,471,047 4,077,846 9,504,609 201,668,467 51,401,677 30,426,047 ----------- ---------- ---------- ------------ ----------- ----------- End of year $39,774,155 $5,907,428 $10,448,733 $187,503,182 $59,052,640 $33,700,438 =========== ========== =========== ============ =========== =========== The accompanying notes and schedules are an integral part of this statement.
AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 and 1996 1. DESCRIPTION OF PLAN: ------------------- The following description of the AMP Incorporated Employee Savings and Thrift Plan (the Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. General ------- The Plan was established effective January 1, 1982 for the benefit of the employees of AMP Incorporated (the Company) and certain subsidiaries and was subsequently amended on numerous occasions, most recently effective as of July 1, 1998. The Plan is a contributory defined contribution plan covering all employees of the Company and certain subsidiaries. Effective July 1, 1998, eligibility requirements of one year of service and at least age 21 were eliminated. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. The Vanguard Fiduciary Trust Company is the trustee of the Plan. Contributions ------------- Participants may defer up to 4% of their gross earnings as a "deferred basic deposit" and up to an additional 11% as a "deferred supplemental deposit." The Company's matching contribution to the Plan is 60% of the participant's "deferred basic deposit" which is paid out of the Company's current and accumulated earnings. Effective January 1, 1998, the Plan was amended to increase participants' "deferred supplemental deposit" percentage to up to 16% of their gross earnings, and to increase the Company's matching contribution to the Plan to include 30% of up to 2% of gross earnings in excess of the "deferred basic deposit" deferred under the Plan. Forfeitures in any given year are used to reduce Company matching contributions to the Plan in the following year. Forfeitures from 1996 reducing 1997 Company contributions amounted to $175,292. Forfeitures from 1997 amounted to $306,051 and will be applied against Company contributions in 1998. Investment Elections -------------------- Participants may elect to invest their deferred basic deposits, deferred supplemental deposits and Company matching contributions on the "deferred basic deposit" in one or more of the available funds, which are the Money Market Prime, Wellington, Index Trust 500, Windsor II, PrimeCap, World Fund U.S. Growth, International Growth, T. Rowe Price - New Horizons, Vanguard Bond Index Fund - Total Bond Market (effective January 1, 1998), AMP Fixed Income and AMP Stock Fund. The Company matching contribution on up to 2% of the gross earnings deferred in excess of the "deferred basic deposit" may only be deposited into the AMP Stock Fund and no inter-fund transfers are permitted. Participant's Accounts ---------------------- Each participant's account is credited with the participant's deposits and Company matching contributions and an allocation of the funds' earnings in which the participant participates. Certain participants in the Plan are of an inactive status at year end due to termination or retirement. The number of inactive participants as of December 31, 1997 and 1996 is 5,089 and 3,984 of the total 20,177 and 19,012, respectively. Vesting ------- Participants are immediately vested in their deferred basic deposits and deferred supplemental deposits plus actual earnings thereon. Company matching contributions and earnings become 100% vested after five years of service by a participant. Immediate vesting of Company matching contributions occurs upon a participant's termination by retirement, disability, death or attainment of age 65. Payments to Participants ------------------------ Deferred basic deposits and deferred supplemental deposits cannot be withdrawn prior to the attainment of age 59 1/2, except in the case of a "financial hardship." Vested Company matching contributions held under the Plan for at least two years and earnings thereon can be withdrawn any time at the request of the participant. Partial or total withdrawal of pre-1983 deferred basic deposits, supplemental deposits, Company matching contributions and earnings by a participant is permitted at his or her request, subject to a minimum withdrawal of $100. Participant Loans ----------------- Loans against a participant's account balances are secured by a promissory note which bears a fixed interest rate of 1% over the prime rate. The term of the loan is limited to five years and repayment is made through payroll deductions in level amounts over the life of the loan. There are limitations as to the amount that may be borrowed and whether prepayment of a loan is allowed. All loans requested prior to December 31, 1997 were disbursed to participants by that date. Participant Rollovers --------------------- Effective January 1, 1998, participants with accounts in previous employers' qualified plans, or in rollover IRA accounts including funds from previous employers' qualified plans, may make a rollover of those qualified monies into the Plan. This may be accomplished by a direct rollover, an indirect 60-day rollover, or an indirect 60-day rollover from a conduit IRA if the respective requirements are met. Administrative Expenses ----------------------- All expenses incurred in the administration of the Plan are paid by the Company and amounted to $350,834 for the year ended December 31, 1997. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: ------------------------------------------ Basis of Accounting ------------------- The accompanying financial statements have been prepared using the accrual basis of accounting. Valuation of Investments ------------------------ Investments, except deposits with insurance companies, are stated at market value, which is equivalent to current value as of the statement date. Deposits with insurance companies held by the Plan are accounted for under The American Institute of Certified Public Accountants' Statement of Position 94-4, "Reporting of Investment Contracts Held by Health and Welfare Benefit Plans and Defined Contribution Pension Plans" (SOP 94-4). Under SOP 94-4, as all of the guaranteed investment contracts held by the Plan are fully benefit-responsive, they are valued at contract value. A fully benefit-responsive investment contract is one that provides a liquidity guarantee by a financially responsible third party of principal and previously accrued interest for liquidations, transfers or loans initiated by Plan participants exercising their rights to withdraw or borrow under the terms of the Plan. Tax Status ---------- The trust established under the Plan is qualified under the Internal Revenue Code as exempt from federal income taxes under Section 501(a). The Plan has received a favorable determination letter from the Internal Revenue Service (IRS) maintaining the Plan's qualified status under applicable Internal Revenue Code requirements. The Plan has been amended since receiving the determination letter from the IRS; however, the Plan sponsor and legal counsel are of the opinion that the Plan, as amended and administered, meets the IRS requirements and, therefore, the trust continues to be tax exempt. Use of Estimates in the Preparation of Financial Statements ----------------------------------------------------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 3. INVESTMENTS: ------------ All Plan investments are held by a trust company administered trust fund and consist of shares of various mutual funds, AMP stock, loans receivable and deposits with insurance companies (Note 4). The following is a list of assets which exceed 5% of net assets at December 31, 1997 and 1996. DESCRIPTION OF SECURITY DECEMBER 31, 1997 DECEMBER 31, 1996 -------------- --------------------------- ---------------------------- No. of No. of Shares or Market or Shares or Market or Principal Contract Principal Contract Amount Value Amount Value ------------ -------------- ------------- -------------- Money Market Prime 32,651,101 $ 32,651,101 37,311,509 $ 37,311,509 Wellington 1,799,909 53,007,329 1,480,644 38,718,829 Index Trust 500 Fund 2,110,822 190,121,782 1,939,449 134,132,303 Windsor II 1,984,564 56,798,234 1,570,015 37,413,464 PrimeCap 2,412,914 95,478,987 1,775,744 53,414,376 AMP Common Stock 1,384,588 58,152,696 1,335,214 51,238,837 World Fund U.S. Growth 1,383,626 39,710,055 1,281,144 30,414,357 Loan Fund 33,628,801 33,628,801 30,410,484 30,410,484 4. DEPOSITS WITH INSURANCE COMPANIES: ---------------------------------- The Plan has entered into guaranteed investment contracts with various insurance companies (Insurance Companies). Under the terms of the contracts, which are all fully benefit-responsive contracts, the Insurance Companies received all plan year Fixed Income Fund deposits and contributions, or in the case of rollovers, a lump-sum deposit, which they maintain in plan reserve accounts until maturity. At maturity, the balances with interest will be returned to the Plan. The accounts are credited with interest at fixed rates for the respective periods and charged for plan withdrawals and loans. The contracts are included in the financial statements as of December 31, 1997 and 1996 at contract values, as reported to the Plan by the Insurance Companies. The estimated fair market value of the guaranteed investment contract portfolio, as of December 31, 1997 was $176,338,185. The aggregate average yield for the Plan's guaranteed investment contract portfolio was 6.14% and 5.97% for the years ended December 31, 1997 and 1996, respectively. The crediting interest rate for the Plan's guaranteed investment contract portfolio was 6.26% and 5.91% as of December 31, 1997 and 1996, respectively. There were no valuation allowances against contract values as of December 31, 1997 and 1996. Included in the Plan's guaranteed investment contract portfolio as of December 31, 1997, are seven synthetic investment contracts. These contracts operate in a manner similar to a guaranteed investment contract, except that the assets are placed in a trust (with ownership by the Plan) rather than in a separate account of the issuer. Also, a financially responsible third party issues a wrapper contract that provides that a participant execute Plan transactions at contract value. These contracts are included in the financial statements at contract values reported to the Plan of $69,245,592 at December 31, 1997. The market value of the underlying assets held in trust at December 31, 1997 was $71,116,659. During 1992, the investment manager for the Plan's Fixed Income Fund invested $10,000,000 in Confederation Life Insurance Company's (Confederation Life) Guaranteed Investment Contract Number 62682. This contract provided for a rate of return of 6.16%, and matured on June 29, 1997. On August 12, 1994, the U.S. assets of Confederation Life were placed under the regulatory supervision of the Michigan Commissioner of Insurance, and GIC payments by Confederation Life were suspended. At the date of seizure, the Plan's GIC investment with Confederation Life had a gross recorded contract value of $10,082,223. No interest has been paid under the Plan's Confederation Life contract since this time. On October 13, 1996, the Michigan Commissioner of Insurance reached a final decision related to the settlement of this contract. Out of the five settlement options, the Company selected a cash liquidation option worth 109% of August 12, 1994 contract value. Payouts were received during 1997, and the amount received through the end of 1997 was $11,015,695. 5. PLAN TERMINATION: ---------------- The Company anticipates continuing the Plan indefinitely, but reserves the right to reduce, suspend or discontinue its contributions at any time and to discontinue or partially terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts. 6. DISTRIBUTIONS TO PARTICIPANTS: ------------------------------ Distributions to participants are generally made as soon as practical after a request is received by the trustee. There were no distributions due participants at December 31, 1997 and 1996.
Schedule I AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN EIN #23-0332575 PIN #003 ITEM 27(a) -- SCHEDULE OF INVESTMENTS DECEMBER 31, 1997 Number of Shares Market Value or or DESCRIPTION OF SECURITY Principal Amount Cost Contract Value - ----------------------- ---------------- ---- -------------- Commingled Trusts and Common Stock: Money Market Prime 32,651,101 $ 32,651,101 $ 32,651,101 Wellington Fund 1,799,909 44,431,853 53,007,329 Index Trust 500 Fund 2,110,822 113,620,742 190,121,782 Windsor II Fund 1,984,564 44,554,613 56,798,234 PrimeCap Fund 2,412,914 70,405,454 95,478,987 World Fund--U.S. Growth 1,383,626 30,012,426 39,710,005 International Growth 359,593 6,125,003 5,893,731 T. Rowe Price - New Horizons 447,444 10,178,303 10,425,464 AMP Common Stock 1,384,588 52,903,242 58,152,696 ------------ ------------ Total Commingled Trusts & Common Stock $404,882,737 $542,239,379 Deposits with Insurance Companies: AIG Life, 5.00%, due 8/31/98 4,064,680 $ 4,064,680 $ 4,064,680 AIG Life, 7.01%, due 3/31/02 10,480,170 10,480,170 10,480,170 CNA, 6.3%, due 5/29/98 6,788,623 6,788,623 6,788,623 Deutsche Bank, 6.11%, due on demand 11,605,398 11,605,398 11,605,398 Metropolitan Life, 5.09%, due 3/23/98 6,336,858 6,336,858 6,336,858 Metropolitan Life, 6.18%, due 6/30/00 9,297,692 9,297,692 9,297,692 Morgan Guaranty, 6.41%, due 3/31/01 10,341,534 10,341,534 10,341,534 NY Life, 5.20%, due 11/2/98 14,822,571 14,822,571 14,822,571 NY Life, 7.02%, due 3/31/99 9,463,897 9,463,897 9,463,897 NY Life, 7.47%, due 6/30/99 12,861,484 12,861,484 12,861,484 Principal, 5.13%, due 4/30/98 6,317,130 6,317,130 6,317,130 Principal, 5.73%, due 6/25/98 10,291,514 10,291,514 10,291,514 Principal, 8.12%, due 10/31/99 8,963,603 8,963,603 8,963,603 Prudential, 5.31%, due 12/31/98 6,146,999 6,146,999 6,146,999 Rabobank, 6.77%, due 12/31/01 8,327,176 8,327,176 8,327,176 Sun Life, 5.86%, due 8/31/98 10,238,029 10,238,029 10,238,029 Union Bank of Switzerland, 6.56%, 14,254,688 14,254,688 14,254,688 due on demand Union Bank of Switzerland, 6.77%, 11,178,887 11,178,887 11,178,887 due on demand WestDeutsche Landesbank, 6.41%, 3,057,742 3,057,742 3,057,742 9/30/01 ------------ ------------ Total Deposits with Insurance Companies 174,838,675 174,838,675 ------------ ------------ Participant Loans (7% to 11.5%) 33,628,801 33,628,801 33,628,801 ------------ ------------ TOTAL $613,350,213 $750,706,855 ============ ============ The accompanying notes are an integral part of this schedule.
Schedule II AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN EIN #23-0332575 PIN #003 ITEM 27(d) -- SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1997 Number of Number of Cost of Net Identity of Party Description of Transaction Purchases Sales Purchase Price Selling Price Items Sold Gain/(Loss) - ----------------- -------------------------- --------- --------- -------------- ------------- ---------- ----------- Vanguard Money Market Prime 368 402 $108,978,589 $113,782,487 $ 113,782,487 $ -- Vanguard Index Trust 500 Fund 253 253 60,031,712 46,155,926 36,730,452 9,425,474 AMP Common Stock 89 91 28,092,925 26,335,822 22,380,787 3,955,035 Vanguard PrimeCap Fund 253 253 51,859,684 27,706,015 23,992,444 3,713,571 Vanguard Windsor II 248 253 25,774,541 14,599,373 12,349,261 2,250,112 Vanguard World Fund US Growth 238 253 17,061,951 14,314,754 12,316,469 1,998,285 Vanguard Wellington Fund 241 253 21,100,147 11,777,426 10,202,379 1,575,047 The purchase prices and selling prices of the above transactions represent the current value of the assets on the transaction date. The accompanying notes are an integral part of this schedule.
EX-2 3 AUDITORS CONSENT EXHIBIT 2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS To AMP Incorporated: As independent public accountants, we hereby consent to the incorporation of our report included in this Form 11-K, into the Company's previously filed Registration Statement File No. 33-55318. /s/ Arthur Andersen LLP Philadelphia, PA June 26, 1998 -----END PRIVACY-ENHANCED MESSAGE-----