-----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, DKMH1LlkOI9MZaXIyDbi6FcEca6LojLz1YbLbygL2b1juNKJMPjWwTYKxtRK1eCs w/pkSIY3X7JZH4ZQ0nbLfg== 0000006164-97-000022.txt : 19970627 0000006164-97-000022.hdr.sgml : 19970627 ACCESSION NUMBER: 0000006164-97-000022 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970626 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: 1934 Act SEC FILE NUMBER: 001-04235 FILM NUMBER: 97630339 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 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996]. For the fiscal year ended December 31, 1996. OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]. 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, 1996 and December 31, 1995, and audited statements of changes in net assets available for benefits for the fiscal year ended December 31, 1996. 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, 1996, 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/ Philip G. Guarneschelli Date: June 26, 1997 By:_______________________________ Philip G. Guarneschelli Vice President, Chief Human Resource Officer 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, 1996 AND 1995 TOGETHER WITH AUDITORS' REPORT AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN INDEX TO FINANCIAL STATEMENTS AND SCHEDULES DECEMBER 31, 1996 AND 1995 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS FINANCIAL STATEMENTS: Statements of Net Assets Available for Benefits as of December 31, 1996 and 1995 Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 1996 Notes to Financial Statements SCHEDULES: Schedule I -- Item 27(a) -- Schedule of Investments as of December 31, 1996 Schedule II -- Item 27(d) -- Schedule of Reportable Transactions for the Year Ended December 31, 1996 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 of the AMP Incorporated Employee Savings and Thrift Plan as of December 31, 1996 and 1995, and the related statement of changes in net assets available for benefits for the year ended December 31, 1996. 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, 1996 and 1995, and the changes in net assets available for benefits for the year ended December 31, 1996, 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 23, 1997
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 NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1995 | 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 $228,523,475 $16,694,265 $27,135,443 $100,840,348 $21,636,242 $43,572,956 Common stock 56,375,561 -- -- -- -- -- Participant loans (Note 1) 27,578,514 -- -- -- -- -- ------------ ----------- ----------- ------------ ----------- ----------- 312,477,550 16,694,265 27,135,443 100,840,348 21,636,242 43,572,956 ------------ ----------- ----------- ------------ ----------- ----------- DEPOSITS WITH INSURANCE COMPANIES, at contract value (Notes 2 and 4) 197,382,184 -- -- -- -- -- ------------ ----------- ----------- ------------ ----------- ----------- Total investments 509,859,734 16,694,265 27,135,443 100,840,348 21,636,242 43,572,956 ------------ ----------- ----------- ------------ ----------- ----------- RECEIVABLES: Employer contributions (Note 1) 184,071 4,899 10,703 24,462 8,285 16,820 Employee deposits (Note 1) 606,978 18,568 44,990 113,744 36,933 75,120 Accrued interest and dividends 3,830 -- -- -- -- -- Other 528,975 -- -- -- -- -- ------------ ----------- ----------- ------------ ----------- ----------- Total receivables 1,323,854 23,467 55,693 138,206 45,218 91,940 ------------ ----------- ----------- ------------ ----------- ----------- TOTAL ASSETS 511,183,588 16,717,732 27,191,136 100,978,554 21,681,460 43,664,896 ------------ ----------- ----------- ------------ ----------- ----------- LIABILITIES ----------- PAYABLES: Investments purchased (744,887) -- -- -- -- -- ------------ ----------- ----------- ------------ ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS $510,438,701 $16,717,732 $27,191,136 $100,978,554 $21,681,460 $43,664,896 ============ =========== =========== ============ =========== =========== AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1995 CONTINUED The Vanguard Group Funds| ------------------------ World Fund AMP Fixed AMP Stock U.S. Growth Income Fund Fund Loan Fund ----------- ----------- ---------- --------- ASSETS ------ INVESTMENTS, at market (Notes 2 and 3): Commingled trusts $16,256,998 $ 1,844,368 $ 542,855 $ -- Common stock -- -- 56,375,561 -- Participant loans (Note 1) -- -- -- 27,578,514 ----------- ------------ ----------- ----------- 16,256,998 1,844,368 56,918,416 27,578,514 ----------- ------------ ----------- ----------- DEPOSITS WITH INSURANCE COMPANIES, at contract value (Notes 2 and 4) -- 197,382,184 -- -- ----------- ------------ ----------- ----------- Total investments 16,256,998 199,226,552 56,918,416 27,578,514 ----------- ------------ ----------- ----------- RECEIVABLES: Employer contributions (Note 1) 6,999 75,622 36,281 -- Employee deposits (Note 1) 30,261 253,649 33,713 -- Accrued interest and dividends -- -- 3,830 -- Other -- -- 521,615 7,360 ----------- ------------ ----------- ----------- Total receivables 37,260 329,271 595,439 7,360 ----------- ------------ ----------- ----------- TOTAL ASSETS 16,294,258 199,555,823 57,513,855 27,585,874 ----------- ------------ ----------- ----------- LIABILITIES ----------- PAYABLES: Investments purchased -- -- (744,887) -- ----------- ------------ ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS $16,294,258 $199,555,823 $56,768,968 $27,585,874 =========== ============ =========== =========== 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, 1996 | 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 (Note 3) $ 38,808,400 $ -- $ 2,106,322 $ 21,497,190 $ 3,933,619 $ 6,545,496 Interest and dividends 29,425,512 820,349 2,957,095 2,898,595 2,582,057 1,610,755 ------------ ----------- ----------- ------------ ----------- ----------- 68,233,912 820,349 5,063,417 24,395,785 6,515,676 8,156,251 ------------ ----------- ----------- ------------ ----------- ----------- Contributions and deposits (Note 1) Employer 11,833,692 707,398 818,122 1,800,752 679,533 1,230,964 Employees 45,184,478 3,267,003 3,630,966 8,881,708 3,168,939 5,787,774 ------------ ----------- ----------- ------------ ----------- ----------- 57,018,170 3,974,401 4,449,088 10,682,460 3,848,472 7,018,738 ------------ ----------- ----------- ------------ ----------- ----------- Total additions 125,252,082 4,794,750 9,512,505 35,078,245 10,364,148 15,174,989 ------------ ----------- ----------- ------------ ----------- ----------- DEDUCTIONS: Payments to participants 26,321,594 944,975 1,429,555 4,543,676 1,071,867 1,525,881 Loan maintenance fees 76,220 10,560 8,590 13,470 3,110 2,040 ------------ ----------- ----------- ------------ ----------- ----------- Total deductions 26,397,814 955,535 1,438,145 4,557,146 1,074,977 1,527,921 INTERFUND TRANSFERS--NET -- (2,249,964) 3,456,865 2,701,873 6,375,412 (3,904,350) ASSETS TRANSFERRED IN 666,810 18,172 62,959 100,869 132,140 111,419 ------------ ----------- ----------- ------------ ----------- ----------- Net additions (deductions) 99,521,078 1,607,423 11,594,184 33,323,841 15,796,723 9,854,137 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 510,438,701 16,717,732 27,191,136 100,978,554 21,681,460 43,664,896 ------------ ----------- ----------- ------------ ----------- ----------- End of year $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 CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1996 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 (Note 3) $ 3,096,238 $ 38,207 $ (685,142) $ -- $ 2,276,470 $ -- Interest and dividends 2,229,888 177,502 861,128 11,506,687 1,396,986 2,384,470 ----------- ---------- ---------- ------------ ----------- ----------- 5,326,126 215,709 175,986 11,506,687 3,673,456 2,384,470 ----------- ---------- ---------- ------------ ----------- ----------- Contributions and deposits (Note 1) Employer 584,249 53,062 143,368 3,366,969 2,449,275 -- Employees 2,577,313 211,105 595,237 14,519,324 2,545,109 -- ----------- ---------- ---------- ------------ ----------- ----------- 3,161,562 264,167 738,605 17,886,293 4,994,384 -- ----------- ---------- ---------- ------------ ----------- ----------- Total additions 8,487,688 479,876 914,591 29,392,980 8,667,840 2,384,470 ----------- ---------- ---------- ------------ ----------- ----------- DEDUCTIONS: Payments to participants 798,983 16,791 21,386 13,183,112 2,120,458 664,910 Loan maintenance fees 3,810 1,270 12,030 20,610 730 -- ----------- ---------- ---------- ------------ ----------- ----------- Total deductions 802,793 18,061 33,416 13,203,722 2,121,188 664,910 ----------- ---------- ---------- ------------ ----------- ----------- INTERFUND TRANSFERS--NET 6,426,604 3,616,031 8,623,434 (14,146,018) (11,967,142) 1,067,255 ASSETS TRANSFERRED IN 65,290 -- -- 69,404 53,199 53,358 ----------- ---------- ---------- ------------ ----------- ----------- Net additions (deductions) 14,176,789 4,077,846 9,504,609 2,112,644 (5,367,291) 2,840,173 ----------- ---------- ---------- ------------ ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 16,294,258 -- -- 199,555,823 56,768,968 27,585,874 ----------- ---------- ---------- ------------ ----------- ----------- End of year $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 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 AND 1995 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 October 1, 1996. The Plan is a contributory defined contribution plan covering all employees of the Company and certain subsidiaries who have attained age 21 and completed one year of service. 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. Forfeitures in any given year are used to reduce Company matching contributions to the Plan in the following year. Forfeitures from 1995 reducing 1996 Company contributions amounted to $114,232. Forfeitures from 1996 amounted to $175,292 and will be applied against Company contributions in 1997. Investment Elections -------------------- Participants may elect to invest their deferred basic, deferred supplemental deposits and Company matching contributions 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, AMP Fixed Income and AMP Stock Fund. 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, 1996 and 1995 is 3,984 and 3,114 of the total 19,012 and 17,587, respectively. Vesting ------- Participants are immediately vested in their deferred basic 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 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. Loans to Participants --------------------- 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 prepayment of a loan is allowed. All loans requested prior to December 31, 1996 and 1995 were disbursed to participants by that date. Administrative Expenses ----------------------- All expenses incurred in the administration of the Plan are paid by the Company and amounted to $392,465 for the year ended December 31, 1996. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: ------------------------------------------ Basis of Accounting ------------------- The accompanying financial statements have been prepared using the accrual basis of accounting. On January 1, 1995, the Plan adopted 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). The adoption of SOP 94-4 had no impact on the accompanying financial statements as all of the guaranteed investment contracts held by the Plan are fully benefit-responsive and are valued under SOP 94-4 at contract value, which is the same basis used by the Plan in prior years. 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. Valuation of Investments ------------------------ Investments, except for the deposits with insurance companies that are carried at contract value, are stated at market value, which is equivalent to current value as of the statement date. Tax Status ---------- The trust established under the AMP Incorporated Employee Savings and Thrift 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, 1996 and 1995. DESCRIPTION OF SECURITY DECEMBER 31, 1996 DECEMBER 31, 1995 -------------- --------------------------- ---------------------------- No. of No. of Shares or Market or Shares or Market or Principal Contract Principal Contract Amount Value Amount Value ------------ -------------- ------------- -------------- Money Market Prime 37,311,509 $ 37,311,509 19,081,488 $ 19,081,488 Wellington 1,480,644 38,718,829 1,110,743 27,135,443 Index Trust 500 Fund 1,939,449 134,132,303 1,750,700 100,840,348 Windsor II 1,570,015 37,413,464 1,047,253 21,636,242 PrimeCap 1,775,744 53,414,376 1,661,188 43,572,956 AMP Common Stock 1,335,214 51,238,837 1,469,070 56,375,561 Loans Receivable 30,410,484 30,410,484 27,578,514 27,578,514 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, 1996 and 1995 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, 1996 was $182,886,708. The aggregate average yield for the Plan's guaranteed investment contract portfolio was 5.97% and 6.00% for the years ended December 31, 1996 and 1995, respectively. The crediting interest rate for the Plan's guaranteed investment contract portfolio was 5.91% and 6.01% as of December 31, 1996 and 1995, respectively. There were no valuation allowances against contract values as of December 31, 1996 and 1995. Included in the Plan's guaranteed investment contract portfolio as of December 31, 1996, are three synthetic investment contracts. These contracts were entered in 1995 and 1996, with Deutsche Bank and Union Bank of Switzerland, and 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 $34,806,269 at December 31, 1996. The market value of the underlying assets held in trust at December 31, 1996 was $35,243,220. 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 provides for a rate of return of 6.16%, and is due to mature on June 29, 1997. As of December 31, 1996 and 1995, the Plan's GIC investment with Confederation Life had a gross recorded contract value of $10,082,223. 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. No interest has been paid under the Plan's Confederation Life contract since this time. To enable the Plan's Trustee to continue to hold the Confederation Life GIC as a non-segregated asset of the Fixed Income Fund and to permit Plan participants to continue Fixed Income Fund transactions as usual, the Company has agreed to back the GIC's gross recorded contract value, provided such is approved by applicable governmental agencies. 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 on April 25, 1997, May 27, 1997 and May 30, 1997. The last payment comprised amounts due to the Plan from the appropriate state guarantee associations. The total amount received as of May 30, 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, 1996 and 1995.
Schedule I AMP INCORPORATED EMPLOYEE SAVINGS AND THRIFT PLAN EIN #23-0332575 PIN #003 ITEM 27(a) -- SCHEDULE OF INVESTMENTS DECEMBER 31, 1996 Number of Shares Market Value or or DESCRIPTION OF SECURITY Principal Amount Cost Contract Value - ----------------------- ---------------- ---- -------------- Commingled Trusts and Common Stock: Money Market Prime 37,311,509 $ 37,311,509 $ 37,311,509 Wellington Fund 1,480,644 33,520,492 38,718,829 Index Trust 500 Fund 1,939,449 90,196,842 134,132,303 Windsor II Fund 1,570,015 31,106,980 37,413,464 PrimeCap Fund 1,775,744 42,412,788 53,414,376 World Fund--U.S. Growth 1,281,144 25,248,736 30,414,357 International Growth 247,179 4,025,780 4,068,563 T. Rowe Price - New Horizons 435,435 10,058,698 9,479,424 AMP Common Stock 1,335,214 46,076,445 51,238,837 ------------ ------------ Total Commingled Trusts & Common Stock $319,958,270 $396,191,662 Deposits with Insurance Companies: AIG Life, 5.00%, due 8/31/98 4,064,136 $ 4,064,136 $ 4,064,136 CNA, 6.30%, due 5/29/98 6,386,287 6,386,287 6,386,287 Confederation, (Note 4) 10,082,223 10,082,223 10,082,223 Deutsche Bank, 5.77%, due on demand 10,952,982 10,952,982 10,952,982 Hartford, 6.56%, due 3/31/97 3,433,224 3,433,224 3,433,224 Metropolitan Life, 5.09%, due 3/23/98 6,029,934 6,029,934 6,029,934 Metropolitan Life, 6.18%, due 6/30/00 8,756,538 8,756,538 8,756,538 NY Life, 5.20%, due 11/2/98 14,089,897 14,089,897 14,089,897 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 11,967,511 11,967,511 11,967,511 Principal, 5.13%, due 4/30/98 6,008,875 6,008,875 6,008,875 Principal, 5.73%, due 6/25/98 9,733,769 9,733,769 9,733,769 Principal, 8.12%, due 10/31/99 8,290,421 8,290,421 8,290,421 Prudential, 6.01%, due 11/1/97 6,315,777 6,315,777 6,315,777 Prudential, 5.31%, due 12/31/98 5,837,052 5,837,052 5,837,052 Prudential, 6.34%, due 10/31/97 6,394,841 6,394,841 6,394,841 Sun Life, 7.12%, due 3/31/97 7,048,185 7,048,185 7,048,185 Sun Life, 7.62%, due 4/1/97 7,068,831 7,068,831 7,068,831 Sun Life, 7.47%, due 8/31/97 6,916,577 6,916,577 6,916,577 Sun Life, 5.86%, due 8/31/98 9,671,291 9,671,291 9,671,291 Union Bank of Switzerland, 6.43%, 13,384,019 13,384,019 13,384,019 due on demand Union Bank of Switzerland, 6.61%, 10,469,268 10,469,268 10,469,268 due on demand ------------ ------------ Total Deposits with Insurance Companies 182,365,535 182,365,535 ------------ ------------ Participant Loans 30,410,484 30,410,484 30,410,484 ------------ ------------ TOTAL $532,734,289 $608,967,681 ============ ============ 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, 1996 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 391 418 $115,452,060 $96,544,544 $96,544,544 $ -- Vanguard Index Trust 500 Fund 253 253 37,884,198 26,089,467 21,476,905 4,612,562 AMP Common Stock 70 116 33,158,568 40,944,218 37,051,911 3,892,307 Vanguard PrimeCap Fund 247 253 24,300,318 21,004,392 18,566,110 2,438,282 Vanguard Windsor II 249 248 20,651,432 8,807,829 7,989,163 818,666 Vanguard World Fund US Growth 253 246 18,758,604 7,697,555 6,801,774 895,781 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, 1997 -----END PRIVACY-ENHANCED MESSAGE-----