DEFA14A

 

                           SCHEDULE 14A (Rule 14a-101)
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          PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
                    EXCHANGE ACT OF 1934 (AMENDMENT NO.  )
        
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                              AMP INCORPORATED
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EX-99.1

 
 



FOR IMMEDIATE RELEASE


                        AMP BOARD OF DIRECTORS REJECTS
                     ALLIEDSIGNAL'S AMENDED PARTIAL OFFER

                Board Adopts Rights Plan Amendments in Response
                      to AlliedSignal's Latest Maneuvers
                                        

HARRISBURG, Pennsylvania (September 18, 1998) - AMP Incorporated (NYSE: AMP)
today announced that its Board of Directors, by a unanimous vote of the
directors present, has recommended that shareholders reject AlliedSignal Inc.'s
amended tender offer for 40 million shares of AMP stock, or approximately 18% of
all outstanding shares, at a price of $44.50 per share.  In rejecting
AlliedSignal's amended partial offer, AMP's Board determined that the offer is
inadequate, does not reflect the value or prospects of AMP and is not in the
best interests of AMP and its relevant constituencies, including its
shareholders.  AMP's Board previously rejected AlliedSignal's original offer for
all outstanding shares at the same $44.50 price.

The Board recommended that AMP shareholders not tender their shares to
AlliedSignal and if shareholders have tendered any shares they should withdraw
them.  In this connection, AMP noted the following:

 .  AMP's Profit Improvement Plan is working and is being accelerated.

 .  AMP expects to be announcing shortly action designed to enhance value to AMP
   shareholders in the nearer term.

 .  Any shares purchased by AlliedSignal in its amended partial offer at its
   current expiration date of September 25, 1998 will neither benefit from any
   such value enhancement action by AMP nor from any higher price AlliedSignal
   might offer to pay for AMP's shares in a subsequent tender offer.

 .  The presence of AlliedSignal as an 18% minority shareholder intent upon
   acquiring control of AMP is, in the Board's view, likely to be a deterrent to
   any third party interest in a business combination transaction with AMP in
   the future, and could have a serious and immediate dampening effect on the
   ability of AMP to carry out its Profit Improvement Plan.

Robert Ripp, AMP's chairman and chief executive officer, said, "It is not AMP's
strategy to sell the Company.  We have been quite clear about this.  We have
been equally clear, however, that AMP's directors fully understand their
responsibilities to deal with reasonable acquisition and business combination
proposals, if presented.  At the same time, our Board recognizes its
responsibilities when presented with an unreasonable proposal.  AlliedSignal's
original offer and its amended offer are clearly unreasonable in our Board's
considered view.  We are sharply focused on building value for and delivering it
to AMP's constituencies, including our shareholders.  For the many reasons we
have stated, AlliedSignal's takeover bid simply does not measure up to the new
AMP as a value proposition."

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                                      -2-




AMP also announced that in light of its continuing concerns about AlliedSignal's
offer, including those noted above, it has amended its Shareholder Rights Plan,
in response to AlliedSignal's amended partial offer, to reduce the threshold at
which the Rights become exercisable from 20% to 10%. In addition, in order to
block AlliedSignal's attempt to end-run the previously adopted protective
features of the Rights Plan, the Board amended the Rights Plan to provide that
it is not amendable, and the Rights are non-redeemable, upon the adoption of a
By-law intended to limit the Board's authority, rights and duties with respect
to the Rights Plan and the Rights. On September 14, 1998, AlliedSignal said it
would solicit consents in favor of a new By-law which purportedly would strip
the Board of all authority regarding the Rights Plan and vest such authority in
certain individuals designated by AlliedSignal. AlliedSignal has not yet
revealed the identities of these individuals.

Mr. Ripp said, "There is a carefully constructed statutory framework under
Pennsylvania law which, together with our Shareholder Rights Plan, is designed
to protect AMP and all of our constituencies, including our shareholders, from
AlliedSignal's opportunistic bid.  Clearly, AlliedSignal is spending an
inordinate amount of time searching for loopholes in these protective
provisions.

"AlliedSignal apparently believed it found a way to attempt to lock up a
significant minority position in AMP at an inadequate price, while at the same
time seeking to strip the AMP Board of its authority relating to the Rights
Plan.  AlliedSignal's maneuvers were designed to make more difficult the
realization of value by AMP through the implementation of our Profit Improvement
Plan and make more difficult future efforts by others to acquire AMP."

Additional information with respect to the Board's decision to recommend that
shareholders reject AlliedSignal's amended offer is contained in an amendment to
AMP's Schedule 14D-9 which is being filed today with the Securities and Exchange
Commission and will be mailed to shareholders.

Headquartered in Harrisburg, PA, AMP is the world's leading manufacturer of
electrical, electronic, fiber-optic and wireless interconnection devices and
systems. The Company has 48,300 employees in 53 countries serving customers in
the automotive, computer, communications, consumer, industrial and power
industries. AMP sales reached $5.75 billion in 1997.



Contacts:
Richard Skaare                               Dan Katcher / Judith Wilkinson
AMP Corporate Communication                  Abernathy MacGregor Frank
717/592-2323                                 212/371-5999

Doug Wilburne
AMP Investor Relations
717/592-4965


                                     # # #


 

                                      -3-

AMP and certain other persons named below may be deemed to be participants in
the solicitation of revocations of consents in response to AlliedSignal's
consent solicitation. The participants in this solicitation may include the
directors of AMP (Ralph D. DeNunzio, Barbara H. Franklin, Joseph M. Hixon III,
William J. Hudson, Jr., Joseph M. Magliochetti, Harold A. McInnes, Jerome J.
Meyer, John C. Morley, Robert Ripp, Paul G. Schloemer and Takeo Shiina); the
following executive officers of AMP: Robert Ripp (Chairman and Chief Executive
Officer), William J. Hudson (Vice Chairman), James E. Marley (former Chairman),
William S. Urkiel (Corporate Vice President and Chief Financial Officer),
Herbert M. Cole (Senior Vice President for Operations), Juergen W. Gromer
(Senior Vice President, Global Industry Businesses), Richard P. Clark
(Divisional Vice President, Global Wireless Products Group), Thomas DiClemente
(Corporate Vice President and President, Europe, Middle East, Africa), Rudolf
Gassner (Corporate Vice President and President, Global Personal Computer
Division), Charles W. Goonrey (Corporate Vice President and General Legal
Counsel), John E. Gurski (Corporate Vice President and President, Global Value-
Added Operations and President, Global Operations Division), David F. Henschel
(Corporate Secretary), John H. Kegel (Corporate Vice President, Asia/Pacific),
Mark E. Lang (Corporate Controller), Philippe Lemaitre (Corporate Vice President
and Chief Technology Officer), Joseph C. Overbaugh (Corporate Treasurer),
Nazario Proietto (Corporate Vice President and President, Global Consumer,
Industrial and Power Technology Division); and the following other members of
management and employees of AMP: Merrill A. Yohe, Jr. (Vice President, Public
Affairs), Richard Skaare (Director, Corporate Communication), Douglas Wilburne
(Director, Investor Relations), Suzanne Yenchko (Director, State Government
Relations), Mary Rakoczy (Manager, Shareholder Services), Dorothy J. Hiller
(Assistant Manager, Shareholder Services), Melissa E. Witsil (Communications
Assistant) and Janine M. Porr (Executive Secretary). As of the date of this
communication, none of the foregoing participants individually beneficially own
in excess of 1% of AMP's common stock or in the aggregate in excess of 2% of
AMP's common stock.

AMP has retained Credit Suisse First Boston Corporation ("CSFB") and Donaldson,
Lufkin & Jenrette Securities Corporation ("DLJ") to act as its financial
advisors in connection with the AlliedSignal Offer, for which CSFB and DLJ will
receive customary fees, as well as reimbursement of reasonable out-of-pocket
expenses. In addition, AMP has agreed to indemnify CSFB, DLJ and certain related
persons against certain liabilities, including certain liabilities under the
federal securities laws, arising out of their engagement. CSFB and DLJ are
investment banking firms that provide a full range of financial services for
institutional and individual clients. Neither CSFB nor DLJ admits that it or any
of its directors, officers or employees is a "participant" as defined in
Schedule 14A promulgated under the Securities Exchange Act of 1934, as amended,
in the solicitation, or that Schedule 14A requires the disclosure of certain
information concerning either CSFB or DLJ.  In connection with CSFB's role as
financial advisor to AMP, CSFB and the following investment banking employees of
CSFB may communicate in person, by telephone or otherwise with a limited number
of institutions, brokers or other persons who are stockholders of AMP: Alan
Howard, Steven Koch, Scott Lindsay, and Lawrence Hamdan.  In connection with
DLJ's role as financial advisor to AMP, DLJ and the following investment banking
employees of DLJ may communicate in person, by telephone or otherwise with a
limited number of institutions, brokers or other persons who are stockholders of
AMP: Douglas V. Brown and Herald L. Ritch.  In the normal course of its
business, each of CSFB and DLJ regularly buys and sells securities issued by AMP
for its own account and for the accounts of its customers, which transactions
may result in CSFB, DLJ or the associates of either of them having a net "long"
or net "short" position in AMP securities, or option contracts or other
derivatives in or relating to such securities.  As of September 11, 1998, DLJ
held no shares of AMP common stock for its own account and CSFB had a net long
position of 103,966 shares of AMP common stock.

This press release contains certain "forward-looking" statements which AMP
believes are within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934.  The safe harbors intended
to be created thereby are not available to statements made in connection with a
tender offer and AMP is not aware of any judicial determination as to the
applicability of such safe harbor to forward-looking statements made in proxy
solicitation materials when there is a simultaneous tender offer.  However,
shareholders should be aware that any such forward-looking statements should be
considered as subject to the risks and uncertainties that exist in AMP's
operations and business environment which could render actual outcomes and
results materially different than predicted.  For a description of some of the
factors or uncertainties which could cause actual results to differ, reference
is made to the section entitled "Cautionary Statements for Purposes of the 'Safe
Harbor'" in AMP's Annual Report on Form 10-K for the year ended December 31,
1997.  In addition, the realization of the benefits anticipated from the
strategic initiatives will be dependent, in part, on management's ability to
execute its business plans and to motivate properly the AMP employees, whose
attention may have been distracted by AlliedSignal's tender offer and whose
numbers will have been reduced as a result of these initiatives.