-----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, BASFzatGUFqvRPJhZ0Bu2Qy4zWH3tC+j/FlVhU+aB4GlHfH8JzsVYBvAQs9OgQBf HAlh9qGd5UiBg0nj0Tqjtg== 0000950172-98-000785.txt : 19980814 0000950172-98-000785.hdr.sgml : 19980814 ACCESSION NUMBER: 0000950172-98-000785 CONFORMED SUBMISSION TYPE: PREC14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19980813 SROS: NONE SUBJECT COMPANY: 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: PREC14A SEC ACT: SEC FILE NUMBER: 001-04235 FILM NUMBER: 98685681 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 FILED BY: 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: PREC14A 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 PREC14A 1 PRELIMINARY COPY -- SUBJECT TO COMPLETION -- DATED AUGUST 13, 1998 SCHEDULE 14A (RULE 14a-101) SCHEDULE 14A INFORMATION CONSENT REVOCATION STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ) Filed by the Registrant {X} Filed by a Party other than the Registrant { } Check the appropriate box: {X} Preliminary Proxy Statement (Consent Revocation Statement) { } Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) { } Definitive Proxy Statement (Consent Revocation Statement) { } Definitive Additional Materials { } Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 AMP INCORPORATED ---------------------------- (Name of Registrant as specified in its charter) ---------------------------- (Name of person(s) filing proxy statement, if other than Registrant) Payment of Filing Fee (Check the appropriate box): {X} No fee required. { } Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11: (4) Proposed maximum aggregate value of transactions: (5) Total fee paid. _____ { } Fee paid previously with preliminary materials. { } Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed: PRELIMINARY COPY SUBJECT TO COMPLETION, DATED AUGUST 13, 1998 AMP INCORPORATED P.O. BOX 3608 HARRISBURG, PENNSYLVANIA ___________ CONSENT REVOCATION STATEMENT BY THE BOARD OF DIRECTORS OF AMP INCORPORATED IN OPPOSITION TO THE SOLICITATION OF CONSENTS BY ALLIEDSIGNAL INC. AND PMA ACQUISITION CORPORATION ___________ __________, 1998 This Consent Revocation Statement and the accompanying WHITE Consent Revocation Card are being furnished by the Board of Directors (the "Board") of AMP Incorporated, a Pennsylvania corporation ("AMP" or the "Company"), to the holders of outstanding shares of AMP's common stock, without par value (the "Common Stock"), in opposition to the solicitation by AlliedSignal Inc. ("AlliedSignal") and its wholly owned subsidiary, PMA Acquisition Corporation ("PMA"), of written consents from the shareholders of AMP. On August 4, 1998, AlliedSignal publicly announced its intention to commence an unsolicited offer to purchase all outstanding shares of Common Stock of AMP at a price of $44.50 per share in cash. On August 10, 1998, AlliedSignal through PMA commenced its unsolicited tender offer to purchase all outstanding shares of Common Stock at a price of $44.50 per share (the "AlliedSignal Offer"). AlliedSignal is also seeking to take control of your Company's Board of Directors by placing 17 of its own directors and executive officers (the "AlliedSignal Nominees") on your Company's Board. The AlliedSignal Nominees, if elected, would constitute a substantial majority of AMP's directors. AlliedSignal proposes to do this by soliciting consents from shareholders of the Company to amend certain provisions of the Company's By-laws, including a proposed By-law amendment that would require the Board to consist of 28 directors (the "Board-Packing Proposal"), thereby more than doubling the size of the Board. At present, AMP's Board consists of 11 directors, so the AlliedSignal Board-Packing Proposal, if approved, would create 17 new vacancies on the Board. AlliedSignal is also soliciting consents to seek to elect the AlliedSignal Nominees to fill all of these 17 new vacancies. If the AlliedSignal Board-Packing Proposal is approved, the AlliedSignal Nominees would run unopposed by any candidate nominated by your Board. Accordingly, a consent in favor of the AlliedSignal proposals is a consent to turn over control of your Board to AlliedSignal. CONSEQUENTLY, AMP'S BOARD OF DIRECTORS UNANIMOUSLY OPPOSES THE ALLIEDSIGNAL CONSENT SOLICITATION AND URGES YOU NOT TO SIGN THE BLUE CONSENT CARD SENT TO YOU BY ALLIEDSIGNAL. EVEN IF YOU PREVIOUSLY SIGNED AND RETURNED ALLIEDSIGNAL'S BLUE CONSENT CARD, YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE. WE URGE YOU TO SIGN, DATE AND MAIL THE ENCLOSED WHITE CONSENT REVOCATION CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED. YOUR PROMPT ACTION IS IMPORTANT. PLEASE RETURN THE WHITE CONSENT REVOCATION CARD TODAY. IF YOUR SHARES ARE HELD IN "STREET NAME," ONLY YOUR BROKER OR BANKER CAN VOTE YOUR SHARES. PLEASE CONTACT THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND INSTRUCT HIM OR HER TO VOTE A WHITE CONSENT REVOCATION CARD ON YOUR BEHALF TODAY. This Consent Revocation Statement and the enclosed WHITE Consent Revocation Card are first being mailed to shareholders on or about ____________, 1998. If you have any questions about giving your revocation of consent or require assistance, please call Innisfree M&A Incorporated ("Innisfree"), the firm assisting AMP in this solicitation, at the phone numbers shown below: INNISFREE M&A INCORPORATED 501 MADISON AVENUE, 20TH FLOOR NEW YORK, NEW YORK 10022 CALL TOLL FREE: (888) 750-5834 BANKS & BROKERS CALL COLLECT: (212) 750-5833 ___________ REASONS FOR OPPOSING THE ALLIEDSIGNAL SOLICITATION AlliedSignal is soliciting consents (the "AlliedSignal Consent Solicitation") in favor of five separate proposals, including the Board- Packing Proposal and the proposal to elect the AlliedSignal Nominees to constitute a majority of the members of AMP's Board. Each of the AlliedSignal proposals (the "AlliedSignal Consent Proposals") is set forth below and the text of the proposed amendments to the Company's By-laws (AlliedSignal Consent Proposals 1, 2 and 3) is set forth in Annex 1 hereto: Allied Signal PROPOSAL 1.: Amend Section 2.2 of Article II of the Company's By-laws to fix the number of directors of the Company at twenty-eight and to provide that Section 2.2 may be amended or repealed only with the approval of shareholders of the Company holding a majority of the Company's outstanding voting shares; Allied Signal PROPOSAL 2.: Amend Section 2.4 of Article II of the Company's By-laws to provide that vacancies on the Board created as a result of a shareholder amendment to the Company's By-laws may be filled only with the approval of shareholders of the Company holding a majority of the Company's outstanding voting shares and that this amendment to Section 2.4 may be further amended or repealed only with the approval of shareholders of the Company holding a majority of the Company's outstanding voting shares; Allied Signal PROPOSAL 3.: Amend Section 1.7.2 of Article I of the Company's By-laws to clarify that a shareholder seeking to nominate persons for election to the Board by shareholder action by written consent need not comply with the Advance Notification Provisions and to provide that this amendment to Section 1.7.2 may be further amended or repealed only with the approval of shareholders of the Company holding a majority of the Company's outstanding voting shares; Allied Signal PROPOSAL 4.: Elect Hans W. Becherer, Lawrence A. Bossidy, Ann M. Fudge, Paul X. Kelley, Peter M. Kreindler, Robert P. Luciano, Robert B. Palmer, Russell E. Palmer, Frederic M. Posses, Donald J. Redlinger, Ivan G. Seidenberg, Andrew C. Sigler, John R. Stafford, Thomas P. Stafford, Richard F. Wallman, Robert C. Winters and Henry T. Yang, the AlliedSignal Nominees, to serve as directors of the Company (or, if any AlliedSignal Nominee is unable to serve as a director of the Company due to death, disability or otherwise, any other person designated as an AlliedSignal Nominee by the remaining AlliedSignal Nominee or Nominees); and Allied Signal PROPOSAL 5.: Repeal each provision of and amendment to the Company's By-laws adopted subsequent to July 22, 1998 and prior to the effectiveness of the AlliedSignal Consent Proposals and the seating of a sufficient number of AlliedSignal Nominees so that the AlliedSignal Nominees constitute a majority of the Board. The effectiveness of each of the AlliedSignal Consent Proposals is subject to, and conditioned upon, the adoption of each of the other AlliedSignal Consent Proposals. AlliedSignal commenced the AlliedSignal Offer on August 10, 1998 and AMP's Board, with the assistance of its legal and financial advisors, is currently reviewing the AlliedSignal Offer and related matters. AMP shareholders should be assured that the Board is acutely aware of its fiduciary duties and, as always, intends to, and will, act in a manner consistent with such duties and in the best interests of AMP, its shareholders and other relevant constituencies. In accordance with applicable provisions of the federal securities laws, the Board will make a recommendation with respect to the AlliedSignal Offer on or before August 21, 1998 and will inform shareholders as to its recommendation and its reasons therefor. AlliedSignal Consent Proposals 1, 2, 3 and 4, taken together, are designed to enable AlliedSignal to take control of your Company's Board. AlliedSignal Proposal 5 is designed to nullify unspecified By-laws which may be adopted by your Board in its efforts to act in and protect the interests of the Company. Your Board believes that the purpose of the AlliedSignal Consent Proposals and the AlliedSignal Consent Solicitation is to pressure your Board and limit its options and flexibility in evaluating and responding to the AlliedSignal Offer and acting in the best interests of AMP, its shareholders and other relevant constituencies. While the Board recognizes that the AlliedSignal Nominees, if elected, would have certain state law obligations to AMP, the Board firmly believes that the AlliedSignal Nominees, all of whom are directors or executive officers of AlliedSignal, could be expected to act in furtherance of the interests of AlliedSignal. The Board further believes that the interests of AMP, its shareholders and other relevant constituencies will be best served if the Company's current directors - who will act entirely independently of the interests of AlliedSignal - continue to manage your Company and make all decisions with respect to the AlliedSignal Offer and related matters. GIVEN THESE REASONS, YOUR BOARD OF DIRECTORS UNANIMOUSLY OPPOSES THE ALLIEDSIGNAL CONSENT SOLICITATION AND URGES YOU NOT TO SIGN THE BLUE CONSENT CARD SENT TO YOU BY ALLIEDSIGNAL. EVEN IF YOU PREVIOUSLY SIGNED AND RETURNED ALLIEDSIGNAL'S BLUE CONSENT CARD, YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE. WE URGE YOU TO SIGN, DATE AND MAIL THE ENCLOSED WHITE CONSENT REVOCATION CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED. IF YOU HAVE ANY QUESTIONS, PLEASE CALL INNISFREE TOLL-FREE AT (888) 750-5834. BANKS AND BROKERS SHOULD CALL COLLECT AT (212) 750-5833. THE CONSENT PROCEDURE Under Pennsylvania law, the unrevoked consent of the holders of not less than a majority of the shares of Common Stock outstanding and entitled to vote on the Record Date (as defined below) must be obtained, within the time limits specified in the Company's By-laws, to adopt each of the AlliedSignal Consent Proposals. Each share of Common Stock is entitled to one vote per share. Since consents are required from the holders of record of a majority of the shares of Common Stock outstanding on the Record Date in order for each of the AlliedSignal Consent Proposals to be adopted, a failure to give consent or a broker non-vote will have the same effect as a vote against such proposals. Under Section 1.7.1 of AMP's By-laws, for the purpose of any consent, the Board may fix a record date, which record date shall not be more than 90 days prior to the date of the action or actions for which consents are being solicited. Section 1.7.2 of AMP's By-laws establishes orderly procedures for the setting of a record date for consent solicitations. Such section of the By-laws provides that any shareholder of AMP seeking to have AMP's shareholders authorize or take corporate action by written consent shall, by written notice to AMP's Secretary, request the Board to fix a record date. The Board is required to promptly, but in all events within ten days after the date on which such request is received, adopt a resolution fixing the record date. On August 11, 1998, AlliedSignal requested that the Board fix a record date for the AlliedSignal Consent Solicitation. On __________ , 1998, the Board fixed a record date of ________, 1998 (the "Record Date") for the AlliedSignal Consent Solicitation. As of the Record Date, there were ___________ shares of Common Stock issued and outstanding. A shareholder may revoke any previously signed consent by signing, dating and returning a WHITE Consent Revocation Card. If no direction is made on the Consent Revocation Card with respect to one or more of the AlliedSignal Consent Proposals, or if a shareholder marks either the "revoke consent" or "abstain" box on the Consent Revocation Card with respect to one or more of the AlliedSignal Consent Proposals, all previously executed consents with respect to such AlliedSignal Consent Proposals will be revoked. A consent may also be revoked by delivery of a written consent revocation to AMP or AlliedSignal. SHAREHOLDERS ARE URGED, HOWEVER, TO DELIVER ALL CONSENT REVOCATIONS TO INNISFREE M&A INCORPORATED ("INNISFREE"), THE FIRM ASSISTING AMP IN THIS SOLICITATION, AT 501 MADISON AVENUE, 20TH FLOOR, NEW YORK, NEW YORK 10022. AMP requests that if a consent revocation is instead delivered to AlliedSignal, a photostatic copy of the revocation also be delivered to AMP, c/o Innisfree, at the address set forth above, so that AMP will be aware of all revocations. Any consent revocation may itself be revoked at any time by signing, dating and returning to AlliedSignal a subsequently dated blue consent card sent to you by AlliedSignal, or by delivery of a written revocation of such consent revocation to AMP or AlliedSignal. If any shares of Common Stock that you owned on the Record Date were held for you in an account with a stock brokerage firm, bank nominee or other similar "street name" holder, you are not entitled to vote such shares directly, but rather must give instructions to the stock brokerage firm, bank nominee or other "street name" holder to grant or revoke consent for the shares of Common Stock held in your name. Accordingly, you should contact the person responsible for your account and direct him or her to execute the enclosed WHITE Consent Revocation Card on your behalf. You are urged to confirm in writing your instructions to the person responsible for your account and provide a copy of those instructions to AMP, c/o Innisfree, at the address set forth above so that AMP will be aware of your instructions and can attempt to ensure such instructions are followed. YOU HAVE THE RIGHT TO REVOKE ANY CONSENT YOU MAY HAVE PREVIOUSLY GIVEN TO ALLIEDSIGNAL. TO DO SO, YOU NEED ONLY SIGN, DATE AND RETURN IN THE ENCLOSED POSTAGE PREPAID ENVELOPE THE WHITE CONSENT REVOCATION CARD WHICH ACCOMPANIES THIS CONSENT REVOCATION STATEMENT. IF YOU DO NOT INDICATE A SPECIFIC VOTE ON THE WHITE CONSENT REVOCATION CARD WITH RESPECT TO ONE OR MORE OF THE ALLIEDSIGNAL CONSENT PROPOSALS, THE CONSENT REVOCATION CARD WILL BE USED IN ACCORDANCE WITH THE AMP BOARD'S RECOMMENDATION TO REVOKE ANY CONSENT WITH RESPECT TO SUCH PROPOSALS. IF YOU DO NOT SUPPORT THE ALLIEDSIGNAL CONSENT PROPOSALS AND HAVE NOT SIGNED AN ALLIEDSIGNAL CONSENT, YOU MAY SHOW YOUR OPPOSITION TO THE ALLIEDSIGNAL CONSENT PROPOSALS BY SIGNING, DATING AND RETURNING THE ENCLOSED WHITE CONSENT REVOCATION CARD. THIS WILL BETTER ENABLE AMP TO KEEP TRACK OF HOW MANY SHAREHOLDERS OPPOSE THE ALLIEDSIGNAL CONSENT PROPOSALS. AMP has retained Innisfree to assist in communicating with shareholders in connection with the AlliedSignal Consent Solicitation and to assist in our efforts to obtain consent revocations. If you have any questions about how to complete or submit your WHITE Consent Revocation Card or any other questions, Innisfree will be pleased to assist you. You may call Innisfree toll-free at (888) 750-5834. Banks and brokers should call collect at (212) 750-5833. CERTAIN LITIGATION On August 4, 1998, AlliedSignal filed a complaint against AMP in the United States District Court for the Eastern District of Pennsylvania (AlliedSignal Corporation v. AMP Incorporated, Civil Action No. 98-CV- 4058). In the complaint, AlliedSignal seeks a declaratory judgement as to, among other things, the applicability and/or validity of the Continuing Director provisions contained in AMP's Rights Agreement (the "Rights Plan") and the constitutionality of certain provisions of the Pennsylvania Business Corporation Law under the Commerce Clause and Supremacy Clause of the United States Constitution. In addition, AlliedSignal seeks to enjoin AMP from, among other things, (i) fixing a record date for determining the shareholders entitled to vote on the proposals in the AlliedSignal Consent Solicitation more than ten days after the date of AlliedSignal's written notice requesting that a record date be set; (ii) increasing the size of AMP's Board and filling the new seats with Board nominees after commencement of the AlliedSignal Consent Solicitation; (iii) refusing to redeem AMP's Rights Plan or amending the Rights Plan so as to make the Rights inapplicable to the AlliedSignal Offer, and refusing to grant prior approval of the AlliedSignal Offer and second-step merger for purposes of the Pennsylvania Business Combination Statute; (iv) amending its By-laws to in any way impede the effective exercise of the stockholder franchise; or (v) taking any steps to impede or frustrate the ability of AMP's shareholders to consider or make their own determination as to whether to accept the terms of the AlliedSignal Offer and the proposals in the AlliedSignal Consent Solicitation, or taking any other action to thwart or interfere with the AlliedSignal Offer or the AlliedSignal Consent Solicitation. AMP has not yet filed an answer, but intends to vigorously defend the claims in AlliedSignal's complaint. On or about August 6, 1998, a shareholder lawsuit purported to be a class action was filed against AMP and the members of its Board of Directors in the United States District Court for the Eastern District of Pennsylvania (Blum v. William J. Hudson, Jr. et al., Civil Action No. 98- CV-4109) (the "Blum Action"). In the complaint, plaintiff alleges that AMP and its directors have improperly refused to consider the AlliedSignal Offer and have wrongfully relied upon the Rights Plan and certain provision of Pennsylvania Business Corporation Law in an attempt to block the AlliedSignal Offer. Plaintiff seeks, among other things, a declaration (i) that certain aspects of the Company's Rights Plan are invalid and in violation of the Board's fiduciary duties, compelling the Board to amend the Rights Plan and enjoining the enforcement of certain provisions thereof; (ii) that the Rights Plan is unconstitutional because it violates the Commerce Clause; (iii) enjoining AMP and the Board from taking any steps to prevent AMP's shareholders from making their own determination as to whether to accept the terms of the AlliedSignal Offer; (iv) enjoining AMP and the Board from commencing any litigation relating to the lawsuit in any other forum that would delay commencement and consummation of the AlliedSignal Offer; and (v) ordering the Board to (a) cooperate fully with any entity, including AlliedSignal, having a bona fide interest in proposing any transaction that would maximize shareholder value; (b) immediately undertake an evaluation of AMP's worth as a merger/acquisition candidate; (c) take appropriate steps to enhance AMP's value and attractiveness as a merger/acquisition candidate, including the creation of an active auction of the Company; (d) act independently so that the interests of the Company's public shareholders will be protected; and (e) ensure that no conflicts of interest exist between the Board and their fiduciary obligations. Three other purported class action lawsuits have also been filed in the United States District Court for the Eastern District of Pennsylvania alleging similar claims as set forth in the Blum Action. AMP has not yet filed an answer, but intends to vigorously defend the claims in the Blum Action and other shareholder suits. BOARD OF DIRECTORS The following table identifies the current members of the Board. Director, Age and Year First Elected Director Principal Occupation and Business Experience ------------------ -------------------------------------------- Ralph D. DeNunzio President of Harbor Point Associates, Inc., Age 66 New York, New York, a private investment and 1977 (3)(5) consulting firm, having served in that capacity for more than the past five years. Mr. DeNunzio also serves as a director of Harris Corporation, Federal Express Corporation, and NIKE, Inc. Barbara Hackman President and Chief Executive Officer of Barbara Franklin Franklin Enterprises, Washington, D.C., a private, Age 58 international consulting and investment firm, since 1993(2)(4) 1995. Ms. Franklin served as the U.S. Secretary of Commerce in the Bush Administration. She also serves as a director of Aetna, Inc., Cincinnati Milacron Inc., The Dow Chemical Company, and MedImmune, Inc. Joseph M. Hixon III Retired Chairman of the Board of Hixon Properties Age 60 Incorporated, San Antonio, Texas, maintaining real 1988(2)(5) estate holdings and other investments. Mr. Hixon served as Chairman of Hixon Properties Incorporated for more than five years. William J. Hudson, Jr. Chief Executive Officer and President of the Company. Age 64 Mr. Hudson has served as an officer of the 1992(1)(5) Company for more than the past five years. He also serves as a director of Carpenter Technology Corporation and The Goodyear Tire & Rubber Company. Joseph M. Magliochetti President, Chief Operating Officer and a director Age 56 of Dana Corporation, Toledo, Ohio, a manufacturer 1996(2) of automotive components and systems. Mr. Magliochetti has served as President of Dana Corporation since 1995, prior to which he was President of Dana's North American operations. He was elected a director of Dana Corporation in 1996 and elected Chief Operating Officer in 1997. James E. Marley Chairman of the Board of Directors of the Company. Age 63 Mr. Marley has served as an officer of the Company 1986(1)(5) for more than the past five years. He also serves as a director of Armstrong World Industries, Inc. and Harsco Corporation. Harold A. McInnes Retired Chairman of the Board of Directors and Chief Age 70 Executive Officer of the Company. Mr. McInnes 1981(1)(4) served as an officer of the Company for more than five years. Jerome J. Meyer Chairman of the Board and Chief Executive Officer Age 60 of Tektronix, Inc., Wilsonville, Oregon, an electronic 1996(2) equipment manufacturer. Mr. Meyer has served as Chairman of the Board and Chief Executive Officer and as a director of Tektronix for more than the past five years. He also serves as a director of Esterline Technologies Corporation and Enron, Corp. John C. Morley President of Evergreen Ventures, Ltd., Cleveland, Ohio, Age 66 a family-owned investment company, since 1995. 1991(3)(5) Mr. Morley is a former President, Chief Executive Officer and director of Reliance Electric Company, Cleveland, Ohio, a manufacturer of electrical, mechanical power transmission, and telecommunications equipment and systems, having served in that capacity for more than five years. He also serves as a director of Cleveland Cliffs, Inc., Ferro Corporation, and Lamson & Sessions, Inc. Paul G. Schloemer Retired President and Chief Executive Officer Age 70 of Parker Hannifin Corporation, Cleveland, Ohio, 1991(3)(4) an international manufacturer of hydraulic, pneumatic and electromechanical components. Mr. Schoemer has served as a director of Parker Hannifin Corporation for more than the past five years and he is a former President and Chief Executive Officer of that company, having served in that capacity for more than five years. He also serves as a director of Esterline Technologies Corporation and Rubbermaid Inc. Takeo Shiina Chairman of the Advisory Council of IBM Japan, Ltd., Age 69 a manufacturer of computer systems located in Japan. 1995(2) Mr. Shiina served as a board member of IBM Japan, Ltd. from 1962 until his retirement as Chief Executive Officer in 1992, having served in the capacity as Chief Executive Officer for more than five years. He also serves as a director of Air Products and Chemicals, Inc. and as a member of the European Advisory Board of Bankers Trust Company. - ---------- (1) Member of the Executive Committee of the Board. (2) Member of the Audit Committee of the Board. (3) Member of the Compensation and Management Development Committee of the Board. (4) Member of the Nominating and Governance Committee of the Board. (5) Member of the Finance Committee of the Board. SECURITY OWNERSHIP OF DIRECTORS The Company's Corporate Governance guidelines encourage each member of the Board to hold Common Stock in an amount having a market value of at least four times the annual retainer fee. The following table sets forth, as of August __, 1998, the number of shares of Common Stock beneficially owned by each director.
Amount of Beneficial Amount of Phantom Total Beneficial and Ownership Ownership Phantom Ownership Name of Owner (shares)(1)(2) (shares)(3) (shares) ------------- -------------------- ----------------- -------------------- Ralph D. DeNunzio 10,000 3,192 13,192 Barbara Hackman Franklin 7,400 1,892 9,292 Joseph M. Hixon III 1,651,114(5) 8,305 1,659,419 William J. Hudson, Jr. 409,138(8)(9) 35,957(4) 445,095 Joseph M. Magliochetti 4,000 2,183 6,183 James E. Marley 315,100(6)(8)(9) 26,453(4) 341,553 Harold A. McInnes 42,689 0 42,689 Jerome J. Meyer 7,300 3,160 10,460 John C. Morley 9,400 6,969 16,369 Paul G. Schloemer 10,000 0 10,000 Takeo Shiina 8,120 2,811 10,931
--------- (1) Each director owns less than 1% of the Company's outstanding Common Stock. (2) Unless otherwise indicated, each director possesses sole voting and dispositive power (beneficial ownership) with respect to the shares set forth opposite his or her name. Numbers shown in this column include options the director has the right to acquire as beneficial owner within sixty days after August 3, 1998. (3) Numbers shown in this column include phantom shares: (i) credited to outside directors under the Outside Directors Deferred Stock Accumulation Plan; and (ii) credited to outside and non-employee directors for compensation deferred at the election of the director as described on page __ of this Consent Revocation Statement. (4) Designated executive officers are entitled to defer receipt of all or a portion of their annual cash bonus. Deferred compensation may be allocated to a phantom AMP Common Stock account under the Company's Deferred Compensation Plan as described in footnote 1 to the Summary Compensation Table on page of this Consent Revocation Statement. Such phantom shares are reported in this number. This number also includes phantom shares of Common Stock credited to the designated executive officer in an amount equal to the dividend earned on Performance Restricted Shares, as described in footnote 3 to the Summary Compensation Table on page __ and footnote 3 to the Security Ownership of Executive Officers Table on page __ of this Consent Revocation Statement. (5) Mr. Hixon holds 15,791 and 120,000 of these shares in two limited partnerships and shares voting and dispositive powers. In addition to the beneficial ownership shown in the table, Mr. Hixon has a 2% residual beneficial interest but no voting or dispositive powers in a trust that holds 7,392 shares of Common Stock of the Company. (6) In addition, 211 shares of Common Stock of the Company are owned by members of the immediate family of the Nominee; Mr. Marley disclaims beneficial ownership of this stock. Additionally, 499 shares of Common Stock of the Company are owned by a member of the immediate family of Mr. Marley in a custodial account over which Mr. Marley has voting and dispositive powers; Mr. Marley disclaims beneficial ownership of this stock. (7) Mr. Schloemer holds 1,400 of these shares of Common Stock of the Company in a family trust of which he is co-trustee with his wife and shares voting and dispositive powers. (8) A portion of the shares reported for Messrs. Hudson and Marley are Performance Restricted Shares granted under the Company's 1993 LongTerm Equity Incentive Plan. Further, a portion of the shares reported for Messrs. Hudson and Marley are held in the Company's Employee Savings and Thrift Plan. (9) Under the Company's former Bonus Plan (Stock Plus Cash), at August 3, 1998, Mr. Hudson also had 6,668 Stock Bonus Units. Under the current 1993 Long-Term Equity Incentive Plan, Mr. Hudson has 419,500 Stock Options, including 61,800 Stock Options transferred to a family limited partnership for the benefit of Mr. Hudson's immediate family; Mr. Marley has 303,600 Stock Options. THE BOARD OF DIRECTORS COMPENSATION A director who is not an employee of the Company is paid $26,000 per year for services as a director and also $1,000 for each day in attendance at a meeting of the Board. Additionally, a director is paid $1,000 for attendance at each meeting of any committee of the Board on which he or she serves. The chairperson of any such committee is paid an annual retainer of $2,500. An outside or non-employee director may also be paid $1,000 per day for special services or assignments requested by either the Chairman or the Chief Executive Officer and President of the Company. A director who is also an employee of the Company does not receive any director or committee fees. During 1997 the Board of Directors held six meetings. In 1997, total compensation earned by the directors was as follows: Director Total Director Compensation -------------------------------------------------- -------------- Ralph D. DeNunzio . . . . . . . . . . . . . . . . $ 43,500 Barbara Hackman Franklin . . . . . . . . . . . . 41,500 Joseph M. Hixon III . . . . . . . . . . . . . . . 41,000(1) William J. Hudson, Jr. . . . . . . . . . . . . . 0(2) Joseph M. Magliochetti . . . . . . . . . . . . . 37,000(1) James E. Marley . . . . . . . . . . . . . . . . . 0(2) Harold A. McInnes . . . . . . . . . . . . . . . . 134,000(3) Jerome J. Meyer . . . . . . . . . . . . . . . . . 35,000(1) John C. Morley . . . . . . . . . . . . . . . . . 43,500(1) Paul G. Schloemer . . . . . . . . . . . . . . . . 37,000 Takeo Shiina . . . . . . . . . . . . . . . . . . 36,000(1) _______________ (1) This compensation includes amounts with respect to which the director elected to defer receipt under the terms of the Company's deferred compensation plan for outside and non-employee directors, described below. (2) Messrs. Hudson and Marley were employees as well as directors of the Company and therefore did not receive any separate director or committee fees. (3) This compensation includes consulting fees paid to Mr. McInnes, a former Chairman of the Board and Chief Executive Officer of the Company, under a consulting agreement with the Company. Under the agreement Mr. McInnes was paid a monthly fee of $8,333 for services other than in his capacity as a director. The consulting agreement expired on December 31, 1997. Outside and non-employee directors are permitted to defer receipt of all or a portion of the annual retainer and the meeting fees. The period of the deferral is within the discretion of each director, provided however that payment must be made or commenced no later than the earliest of the death of the director, a change in control and termination of the director's services, or the year following the year in which he or she reaches the age of 72. Deferred compensation may be allocated to either or both of the following investment options: (i) an interest-bearing account with interest credited monthly based on 120% of the Long Term Applicable Federal Rate as published by the Internal Revenue Service and adjusted quarterly; and (ii) a phantom AMP Common Stock account in which phantom dividends are reinvested in further phantom stock units. Allocations or changes in allocations can be made annually and apply prospectively to compensation earned in future years. Payments of deferred director compensation can be made in a lump sum or in up to ten annual installments. The Stock Option Plan for Outside Directors provides that the outside directors shall receive a grant of 2,000 stock options in the Company's Common Stock when they are first elected to the Board and in each July thereafter. Up to a maximum of 10 awards may be made to any one director and up to 300,000 shares may be awarded to all outside directors in the aggregate during the 10-year term of the plan. These options vest after 1 year and remain exercisable for 9 years. BENEFIT PLANS The Company provides benefits to the directors, the amount of which varies dependent upon whether the director is presently or was ever employed by the Company. The Company provides Director and Officer Liability and Indemnification insurance coverage for all directors. Directors who are not presently and have never been employed by the Company (an "Outside Director") are provided with life insurance coverage. Travel accident insurance coverage is provided to directors who are not currently employed by the Company. All directors are eligible to participate in the Company's Employee Gift Matching Program. Under this program, the Company will match qualifying charitable contributions made by directors to accredited public and private schools, colleges, universities and graduate schools in the United States. The maximum aggregate of a director's gifts to all institutions during a calendar year that will be matched is $5,000. RETIREMENT Currently there are two plans that provide retirement-oriented deferred compensation for Outside Directors (as defined above), conditioned upon 5 years of service as a member of the Board. Outside Directors elected to the Board on or after January 1, 1996 generally receive "retirement" compensation under the Outside Director Deferred Stock Accumulation Plan ("Accumulation Plan"). Outside Directors who joined the Board prior to January 1, 1996 were provided a one-time election to continue participation in the retirement plan in place prior to adoption of the Accumulation Plan or convert to the Accumulation Plan. Under the Accumulation Plan, each Outside Director will receive 300 shares of phantom AMP Common Stock when first elected to the Board, and on the first day of each of the nine subsequent calendar years of Board service. The phantom share awards are credited to a deferred phantom stock account and have no voting rights. On each dividend payment date, phantom dividends corresponding to the number of accumulated phantom shares are credited to the phantom stock account and deemed to be invested in additional phantom shares. An Outside Director's deferred phantom stock account vests upon the earlier of the date the director has at least 5 years of service on the Board, the date of the director's death while serving on the Board, or the date of the director's 72nd birthday. If the director terminates Board service with less than 5 years of service (other than on account of death or attainment of age 72), the account is forfeited. The vested balance in the deferred phantom stock account is paid to the Outside Director in cash upon termination of Board service. Under the retirement plan in effect prior to adoption of the Accumulation Plan, an Outside Director who has either reached the normal retirement date (the end of the calendar year in which the director reaches age 72) or retired early due to disability, and who has served a minimum of five years on the Board, is eligible for an annual retirement benefit. The annual retirement benefit is equal to a percentage of the Outside Director's annual base retainer at the time of retirement, with the actual percentage being based on the Outside Director's years of service. In the event of a "change of control", the annual retirement benefit to which an Outside Director would be entitled based on his or her years of service at the date service to the Board ceases for any reason shall be fully vested and payable immediately, without regard to the Outside Director's then attained age. A "change of control" as that term is used in this Consent Revocation Statement, unless otherwise indicated, would generally be deemed to have occurred if (a) any person or group directly or indirectly acquires beneficial ownership of 30% or more of the Company 's issued and outstanding shares of Common Stock, or (b) there occurs a change in the Board such that the directors constituting the Board at a given point in time (the "Incumbent Board") and any subsequently elected directors (other than directors whose initial assumption of office is in connection with an election contest) who were approved by a vote of at least two-thirds of the directors still in office who either were directors on the Incumbent Board or whose assumption of office was previously so approved, no longer constitute a majority of the Board, or (c) a merger or consolidation of the Company or the issuance of voting securities of the Company in connection therewith, other than (i) a merger or consolidation resulting in the voting securities of the Company continuing to represent at least 66 2/3% of the combined voting power of the voting securities of the surviving entity, or (ii) a merger or consolidation effected to implement a recapitalization of the Company in which no person or group directly or indirectly acquires beneficial ownership of 30% or more of the Company's issued and outstanding shares of Common Stock, or (d) the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition of all or substantially all of the assets of the Company, other than such a sale or disposition to an entity of which at least 70% of the combined voting power of the voting securities are held by shareholders in substantially the same proportions as their ownership of the Company immediately prior to such sale. If the AlliedSignal Offer is consummated or if the AlliedSignal Nominees are elected, a "change in control" will occur. COMMITTEES AND MEETINGS The Board of Directors has five standing committees: the Audit Committee, the Compensation and Management Development Committee, the Nominating and Governance Committee, the Finance Committee and the Executive Committee. The Audit Committee of the Board of Directors consults with the Company's management regarding selection of the independent public accountant; concurs in the appointment or dismissal of the Director, Internal Audit; holds periodic meetings with the Company's internal and independent auditors and financial officers as appropriate to monitor control of the Company's financial resources and audit functions; reviews the arrangements and related fees for and the scope of the independent auditor's examination; considers the audit findings and management response; reviews the independent public accountant's non-audit fees; reviews significant accounting issues, regulatory changes and accounting or reporting developments and the impact of such on the Company's financial statements; reviews the status of special investigations; reviews the financial statements; oversees the quarterly reporting process; discusses with the Company's management, the Director, Internal Audit and in-house legal counsel significant issues relating to litigation or compliance with environmental or governmental regulations; reviews the Company's electronic data processing procedures and controls; and reviews the Corporate Code of Conduct and Conflict of Interest policies and receives reports of disclosures of any deviations from these policies. During 1997 the Audit Committee held five meetings. The Compensation and Management Development Committee of the Board of Directors makes recommendations to the Board regarding successors to and the salaries of the Chairman and the Chief Executive Officer and President; conducts annual performance reviews of the Chairman and the Chief Executive Officer and President; reviews the salary budget for the executive officers as a group and salary recommendations made by the Chief Executive Officer and President for the named executive officers; makes recommendations to the Board regarding changes to the Company's incentive compensation plans, executive-only benefit plans and tax-qualified pension and thrift plans; and reviews participation in, establishes certain targets for, and acts on awards under the Company's incentive compensation plans for management and key employees. During 1997 the Compensation and Management Development Committee held five meetings. The Nominating and Governance Committee of the Board of Directors establishes the criteria for selecting candidates for nomination to the Board; actively seeks candidates who meet those criteria, are highly qualified and have diverse backgrounds, including qualified female and minority candidates; makes recommendations to the Board of nominees to fill vacancies on, or as additions to, the Board; makes recommendations to the Board on changes in the size, composition and structure of the Board; makes recommendations to the Board on compensation and benefit programs for the Board; as appropriate, reviews the performance of the directors and reports its findings to the Chairman and, in its discretion, to the Board itself; and considers matters relating to corporate governance and makes decisions concerning those matters that should be recommended for action by the Board in executive session. The Nominating and Governance Committee will consider nominees for election to the Board that are recommended by shareholders provided that a complete description of the nominees' qualifications, experience and background, together with a statement signed by each nominee in which he or she consents to act as such, accompany the recommendations. Such recommendations should be submitted in writing to the attention of the Chairman of the Company, and should not include self- nominations. During 1997 the Nominating and Governance Committee held one meeting. The Finance Committee of the Board of Directors reviews and considers key financial objectives and measures in the AMP Global Strategic Plan, the Company's cost of capital, cash generation, cash balance objectives and balance sheet objectives. The Committee also reviews strategic transactions valued in excess of $10 million; receives periodic reports on the portfolio of equity/venture capital investments; reviews and assesses the performance and results of acquisitions and related finance and accounting practices; reviews management's recommendations regarding public stock issues and public and private debt issues; advises management and the Board on the Company's share repurchase strategies; periodically reviews the Company's dividend policy, dividend recommendations, stock split proposals and investor relations plans; reviews periodically the Company's risk management policies and practices (not including internal operating controls and financial reporting procedures relating to risk management policies and practices); reviews periodic reports from the Company's Pension Committee concerning the investment status, investment policy guidelines and accounting treatment of the Company's benefit plans involving funds held in trust or otherwise managed and invested on behalf of the participants in the benefit plans; reviews and approves the investment policy guidelines for the AMP Foundation's assets; and reviews the annual charitable giving by the AMP Foundation and the Company, and the policy guidelines governing such charitable giving. During 1997 the Finance Committee held three meetings. The Executive Committee of the Board of Directors has been delegated the authority to act on behalf of the Board with respect to any matter within the ordinary course of the business of the Company. The Committee typically acts on proposed capital expenditures and financial transactions that require immediate Board action at times that are not near to the regularly scheduled Board meetings. Certain matters, including those that under the Pennsylvania Business Corporation Law cannot be delegated by the Board, are specifically excluded from the authority of the Executive Committee. All actions taken by the Committee are reported at the next meeting of the Board for concurrence by the full Board. During 1997 the Executive Committee did not meet and took no action either in a meeting of the Committee or by written consent in lieu of a meeting.
EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE Long-Term Annual Compensation Compensation -------------------------------------------- ---------------------------------- Awards ---------------------------------- Other Annual Restricted Securities All Other Name and principal position Salary Bonus Compensation Stock Awards Underlying Compensation Year ($) ($) ($) ($) Options/ SARs (#) ($) --------------------------- ------- ---------- ------- -------------- ------------ ----------------- ------------ (a) (b) (c) (1) (d) (1) (e) (2) (f) (3) (g) (4) (h) --------------------------- ------- ---------- ------- -------------- ------------ ----------------- ------------ William J. Hudson, Jr. 1997 810,000 534,600 35,608 1,861,200 63,900 126,940(5) Chief Executive Officer 1996 810,000 0 32,548 1,717,713 75,600 110,640 and President, and a Director 1995 700,000 437,000 17,947 1,071,875 60,000 173,380 James E. Marley 1997 648,000 429,624 57,707 1,489,900 51,100 99,852(6) Chairman 1996 648,000 0 26,018 1,373,438 60,500 85,952 1995 560,000 291,000 40,707 857,500 45,000 83,840 Robert Ripp 1997 400,008 198,804 3,440 733,200 25,100 71,915(7) Executive Vice President 1996 375,000 46,875 24,157 578,675 25,500 67,000 1995 325,008 137,933 13,560 390,163 16,700 61,001 Juergen Gromer(9) 1997 393,189 176,111 28,141 437,100 15,000 0 Vice President 1996 425,626 67,975 19,018 0 22,400 0 1995 412,917 63,687 13,517 0 21,200 0 John E. Gurski 1997 370,008 183,894 165,623 620,400 21,200 49,680(8) Vice President 1996 350,004 46,200 225,067 538,388 23,800 40,000 1995 285,000 124,315 172,587 317,275 13,600 55,357
_____________________________ (1) Under the Deferred Compensation Plan, designated executive officers are permitted to defer receipt of up to 50% of their annual base salary and all officers of the Company are entitled to defer receipt of all or a portion of their annual cash bonus. The period of deferral is within the discretion of the executive, but is generally until the year following termination of employment. During the period of deferral, the deferred compensation may be allocated or reallocated by the executive between and among the following investment options: (i) an interest-bearing account with interest credited monthly based on 120% of the Mid-Term Applicable Federal Rate as published by the Internal Revenue Service, adjusted monthly and (ii) a phantom AMP Common Stock Account in which the phantom dividends are reinvested in the phantom stock units. Payments of the deferred compensation can be made at the executive's election in either a lump sum or up to ten annual installments. Amounts of salary or bonus attributable to 1995, 1996 and 1997, the receipt of which has been deferred under this plan, are nevertheless included in columns (c) and (d), as appropriate, of the Summary Compensation Table. (2) Unless otherwise indicated, no executive officer named in the Summary Compensation Table received personal benefits or perquisites in excess of the lesser of $50,000 or 10% of his total compensation reported in columns (c) and (d). Reported in this column is annual compensation related to: (i) the Cash Bonus paid under the Company's former Bonus Plan (Stock Plus Cash) to cover United States income taxes as described in footnote 1 to the Aggregated Option/SAR Exercises in 1997 and FY-End Option/SAR Values" table, pages _____, and fractional shares of the Bonus Plan Stock Bonus; and (ii) reimbursement of relocation expenses and payments of estimated income taxes relating to reimbursement of relocation expenses to Mr. Ripp in 1995 through 1997 and Mr. Gurski in 1996 and 1997; (iii) overseas allowances for Mr. Gurski in 1995 and 1996, and (iv) certain payments of estimated taxes relating to Mr. Gurski's assignment overseas during 1995 and 1996, including payments made in 1996 and 1997 with regard to previous years' tax obligations and reimbursements or refunds received by the Company for tax payments made in previous years. (3) During 1997, 180,900 shares of restricted stock were granted by the Company, resulting in a total of 438,620 shares of restricted stock held at December 31, 1997. These shares had an aggregate value of $18,422,040 based upon a $42.00 per share closing price of the Company's Common Stock as reported on the New York Stock Exchange Composite Tape on December 31, 1997, and dividends are paid on 43,120 of these shares to the same extent as any other shares of the Company's Common Stock. The number of shares of restricted stock includes certain time-vesting restricted shares as well as Performance Restricted Shares awarded under the Company's 1993 Long-Term Equity Incentive Plan, which vest in 3 years based on achievement of minimum average annual return on equity and average annual earnings growth objectives for the Company. Dividends earned on Performance Restricted Shares, of which 395,500 were held at December 31, 1997, are credited to the executive officer's account and are deemed to be invested in phantom shares of Common Stock. These phantom shares vest only when, and to the extent, the associated Performance Restricted Shares vest. (4) Includes awards made pursuant to the Company's 1993 Long- Term Equity Incentive Plan. The Long-Term Equity Incentive Plan is described in footnote 1 to the "Option/SAR Grants in 1997" table on pages ______ of this Consent Revocation Statement. (5) Includes $3,840 as the company-matching contribution under the Employee Savings and Thrift Plan; $15,600 as the company-matching contribution under the Deferred Compensation Plan; and $107,500 as the total premium paid by the Company in 1997 under a split-dollar insurance plan, including both the portion of the premium that is attributable to term life insurance coverage for Mr. Hudson and the full dollar value of the remainder of the premium. The split-dollar insurance plan provides life insurance coverage for Mr. Hudson equal to twice his base salary (in lieu of the coverage available under the Company 's group- term life insurance plan), and a substantial portion of the value of the advances made to pay the premium as shown in this table will be repaid to the Company from policy proceeds. (6) Includes $3,840 as the company-matching contribution under the Employee Savings and Thrift Plan; $11,712 as the company-matching contribution under the Deferred Compensation Plan; $4,800 as total director fees paid to Mr. Marley in 1997 by two wholly-owned subsidiaries of the Company, and $79,500 as the total premium paid by the Company in 1997 under a split-dollar insurance plan, including both the portion of the premium that is attributable to term life insurance coverage for Mr. Marley and the full dollar value of the remainder of the premium. The split-dollar insurance plan provides life insurance coverage for Mr. Marley equal to twice his base salary (in lieu of the coverage available under the Company's group- term life insurance plan), and a substantial portion of the value of the advances made to pay the premium as shown in this table will be repaid to the Company from policy proceeds. (7) Includes $3,840 as the company-matching contribution under the Employee Savings and Thrift Plan; $5,760 as the company- matching contribution under the Deferred Compensation Plan; $4,800 as total director fees paid to Mr. Ripp in 1997 by two wholly-owned subsidiaries of the Company; and $57,515 as the total premium paid by the Company in 1997 under a split- dollar insurance plan, including both the portion of the premium that is attributable to term life insurance coverage for Mr. Ripp and the full dollar value of the remainder of the premium. The split-dollar insurance plan provides life insurance coverage for Mr. Ripp equal to twice his base salary (in lieu of the coverage available under the Company's group term life insurance plan), and a substantial portion of the value of the advances made to pay the premium as shown in this table will be repaid to the Company from policy proceeds. (8) Includes $3,840 as the company-matching contribution under the Employee Savings and Thrift Plan; $5,040 as the company- matching contribution under the Deferred Compensation Plan; and $40,800 as the total premium paid by the Company in 1997 under a split-dollar insurance plan, including both the portion of the premium that is attributable to term life insurance coverage for Mr. Gurski and the full dollar value of the remainder of the premium. The split-dollar insurance plan provides life insurance coverage for Mr. Gurski equal to twice his base salary (in lieu of the coverage available under the Company's group-term life insurance plan), and a substantial portion of the value of the advances made to pay the premium as shown in this table will be repaid to the Company from policy proceeds. (9) Mr. Gromer's compensation was paid in German marks. The amounts reported for Mr. Gromer have been converted to U.S. dollars based on the average monthly conversion rate calculated using the daily conversion rates listed by Bloomberg Financial Markets Commodities News. OPTION/SAR GRANTS IN 1997
Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Individual Grants Option Term(3) --------------------------------------------------------------- --------------------------------- Number of Secu- # of Total rities Un- Options/ derlying SARs Options/ Granted Exercise Market SARs to Em- or Base Expira- Price at Granted ployees Price tion Grant Name Date (#)(1) in 1997 ($/share) Date(2) ($/share) 0% ($) 5% ($) 10% ($) ------ ---- ---------- -------- --------- ------- --------- ------ ------ ------- William J. Hudson, 7/22/97 63,900 3.16 47.0 7/22/07 47.0 0 1,888,759 4,786,487 Jr. . . . . . . . . Chief Executive Officer and Presi- dent, and a Director James E. Marley . . 7/22/97 51,100 2.53 47.0 7/22/07 47.0 0 1,510,416 3,827,691 Chairman Robert Ripp . . . . 7/22/97 25,100 1.24 47.0 7/22/07 47.0 0 741,907 1,880,138 Executive Vice President Juergen W. Gromer . Vice President 7/22/97 15,000 0.74 47.0 7/22/07 47.0 0 443,370 1,123,588 John E. Gurski . . 7/22/97 21,200 1.05 47.0 7/22/07 47.0 0 626,631 1,588,005 Vice President
- --------------- (1) The Company's 1993 Long-Term Equity Incentive Plan ("1993 Plan") became effective on July 1, 1993 and is a long-term incentive compensation program that is based on stock price appreciation in the form of stock options (either incentive or non-qualified stock options) and infrequently, in the discretion of the Company, in the form of freestanding SARs payable in the Company's Common Stock or from time to time, in the Company's sole discretion, in cash. The 1993 Plan also provides for the award of performance-based restricted stock ("Performance Restricted Shares"). The 1993 Plan is administered by the Compensation and Management Development Committee of the Company's Board of Directors ("Committee"). Under the 1993 Plan, each employee designated by the Committee to participate is credited with stock options having an option price per share of Common Stock that is not less than 100% of the closing price of the Common Stock on the New York Stock Exchange Composite Tape on the award date, and/or stock bonus units (SARS) having a designated value per unit of not less than 95% of the average closing price of the Common Stock on the New York Stock Exchange Composite Tape for the 10 trading days immediately prior to the award date, and/or Performance Restricted Shares. No SAR awards were made under the 1993 Plan in 1997. Awards of Performance Restricted Shares and stock options that were made to the named executive officers in 1997 are shown in columns (f) and (g), respectively, of the Summary Compensation Table, on page __ of this Consent Revocation Statement. With respect to stock options, all options granted in 1997 to the named executive officers will vest 3 years from the date of award and will expire 7 years after vesting. They have an exercise price equal to 100% of the closing price of the Common Stock on the New York Stock Exchange on the award date. Under the authorization of the Committee, all options granted in 1997 include a term that permits their transfer to immediate family members, trusts for the exclusive benefit of such members, or partnerships in which such members are the only partners. Transferred options may not be further transferred by immediate family members except by will or by the laws of descent and distribution, and the named executive officers remain responsible for the income taxes and tax withholding requirements arising upon the exercise of transferred options. When SAR awards are made, bonus computations with respect to the stock bonus units are made on the 4th through 6th anniversaries of the award date for one-third of each participant's bonus units and are based on the increase in the market price of the Common Stock over the designated value, as established on the award date. The bonus typically paid in stock ("Stock Bonus") is the number of shares of Common Stock having an aggregate market value on the computation date equivalent to one-third of the participant's bonus units multiplied by the increase in market price described above. A cash bonus ("Supplemental Cash Bonus") is also paid under the 1993 Plan in conjunction with Stock Bonuses. The Supplemental Cash Bonus is paid at the same time that payment of the Stock Bonus is made and is a percentage of the value of the Stock Bonus that is designated at the time of award and is no greater than that calculated to provide a payout sufficient to pay the anticipated United States income tax at a maximum rate for the highest taxable bracket with respect to the aggregate of the Stock Bonus and the Supplemental Cash Bonus. Supplemental Cash Bonus awards are not included in this table when stock bonus unit (SAR) awards are made in the reported year and disclosed in this table. (2) The expiration date for stock options under the 1993 Plan is the date determined by the Committee at the time of the award of such options. When SARs are granted in the reported year and disclosed in this table, the 6th anniversary date is designated as the "expiration date" because computations of the Stock Bonus are made on the 4th through 6th anniversaries of the award date for one-third of each participant's bonus units granted in the award. (3) In 1997 the named executive officers received awards under the 1993 Plan entirely in either stock options or Performance Restricted Shares awards, and therefore assumed values contained in this table relate only to the options. These values are based on assumed appreciation rates set by the Securities and Exchange Commission and are not intended to forecast possible future appreciation, if any, of the Company's stock price. The values are based on the difference between the exercise price and the exercise price as increased by the assumed annual appreciation rate over the 10-year term of the options, compounded annually, with said difference multiplied by the number of options granted as shown in the table. AGGREGATED OPTION/SAR EXERCISES (1) IN 1997 AND FY-END OPTION/SAR VALUES
Number of Securities Underlying Unexercised Value of Unexercised In-the- Options/SARs on Money Options/SARs on December 31, 1997 (#) December 31, 1997 ($) ---------------------- ----------------------------- Shares Acquired Value Real- Exercis- Name on Exercise (#) ized ($) (2) able/Unexercisable (3) Exercisable/Unexercisable (3)(4) -------------------- ---------------- ------------ ------------------------- -------------------------------- William J. Hudson, Jr 4,861 118,880 220,000 / 216,902 1,980,350 / 643,799 Chief Executive Officer and President, and a Director James E. Marley . . . 2,520 115,290 157,000 / 156,600 1,447,813 / 325,188 Chairman Robert Ripp . . . . . 0 0 40,000 / 67,300 252,500 / 137,063 Executive Vice President Juergen W. Gromer . . 11,103 282,606 15,600 / 64,200 98,475 / 120,400 Vice President John E. Gurski . . . 621 21,425 44,800 / 58,600 402,425 / 127,925 Vice President
------------------ (1) Exercises shown in this table relate to stock bonus units (SARS) granted under the Company's Bonus Plan (Stock Plus Cash) ("Bonus Plan"), which preceded the 1993 Plan, and to both stock bonus units (SARS) and stock options awarded under the 1993 Plan. With respect to stock bonus units granted under the Bonus Plan and the 1993 Plan, the incentive compensation is based on stock price appreciation in the form of freestanding SARs payable in the Company's Common Stock or occasionally, in the discretion of the Company, in cash. Each employee designated by the Board of Directors to participate in the Bonus Plan was credited with stock bonus units having a designated value per unit of not less than 95% of the closing price of the Common Stock on the New York Stock Exchange on the award date. Under the 1993 Plan, the stock bonus units have a designated value per unit of not less than 95% of the average price of the Common Stock on the New York Stock Exchange Composite Tape for the 10 trading days immediately prior to the award date. The 1993 Plan is more fully described in footnote 1 to the table entitled "Options/Grants in 1997" on pages ____ of this Consent Revocation Statement. Bonus computations are made on the 4th through 6th anniversaries of the award date for one-third of each participant's stock bonus units. Bonus computations for stock bonus units granted under the Bonus Plan are made using the greater of the increase in the market price of the Common Stock (a) over the designated value, as established on the award date, or (b) over an adjusted designated value. The adjusted designated value is 95% of an amount determined by discounting the market price of the Common Stock on the computation date by a percentage (not to exceed 7.5% per year) equal to one-half of the Company's compound average annual growth rate in earnings per share during the period between the award date and the computation date. Bonus computations for stock bonus units granted under the 1993 Plan are made by simply using the increase in the market price of the Common Stock over the designated value as established on the award date. The bonus typically paid in stock under either plan ("Stock Bonus") is the number of shares of the Common Stock having an aggregate market value on the computation date equivalent to the amount computed as described above. A cash bonus is also paid under both the Bonus Plan and the 1993 Plan. For awards under the Bonus Plan that were made between January 27, 1988 and June 30, 1993, the cash bonus is an amount sufficient to pay the anticipated United States income tax with respect to both the Bonus Plan Stock Bonus and the cash bonus as determined at the time of the distribution of the bonuses, not to exceed an amount that is 50% of the value of the Bonus Plan Stock Bonus. The cash bonus under the 1993 Plan is described in footnote 1 of the table entitled "Options/SAR Grants in 1997" on pages _____ of this Consent Revocation Statement. The amounts of the cash bonus paid in 1997 based on distributions made in that year under these plans are included in column (e), "Other Annual Compensation", of the Summary Compensation Table on page __ of this Consent Revocation Statement. In view of the foregoing, "exercises" for purposes of this table are deemed to be the Stock Bonus computations that are made on the 4th through 6th anniversaries of the award date for one-third of each participant's stock bonus units granted in an award under the Company's Bonus Plan and 1993 Plan, together with stock options under the 1993 Plan that were exercised during 1997. The stock options awarded under the 1993 Plan are described in footnote 1 of the table entitled "Options/SAR Grants in 1997" on pages _____ of this Consent Revocation Statement. (2) "Value Realized" includes the amount of appreciation realized upon exercise of stock options under the 1993 Plan, together with the Stock Bonus paid under the Bonus Plan and the 1993 Plan based on stock price appreciation. The figures reported in this column do not include the cash bonus as described in footnote 1 above. (3) The stock bonus units (SARS) awarded under the Bonus Plan and the 1993 Plan are not exercised by the participants, but are paid based on bonus computations made on the 4th through 6th anniversaries of the award date for one-third of each participant's stock bonus units. (4) These values relate only to stock options granted under the 1993 Plan and the Stock Bonus described in footnote 1 above under both the Bonus Plan and the 1993 Plan. A cash bonus under the Bonus Plan and the 1993 Plan is also paid as previously described, but is not included in the values disclosed in this column. With respect to Stock Bonuses under the Bonus Plan, these values also have been calculated based on the designated values for the respective awards and without regard to adjusted designated values, as those terms are defined under the Bonus Plan and described in footnote 1 above. RETIREMENT BENEFITS The Company maintains a pension plan ("Pension Plan") for its employees that is designed and administered to qualify under Section 401(a) of the Internal Revenue Code of 1986, as amended ("Code"). The Pension Plan has been noncontributory since January 1, 1991. Prior to January 1, 1994 the Pension Plan was a career average defined benefit plan under which, for each year of covered service with the Company, an employee accrued a benefit equal to 1.67% of his or her current base earnings. The Pension Plan also included an alternative formula that updated pension benefits for prior service based on most-recent 3 years average base earnings rates. An employee received the greater of the benefit the employee had otherwise earned under the Pension Plan or the benefit calculated under the alternative formula based on most-recent average base earnings and years of credited service. Effective as of January 1, 1994 the Company amended the Pension Plan to provide benefits based on final average base earnings and total years of credited service at retirement. The final average base earnings is determined based on the average of the year-end annual earnings rates for the 3 years that represent the employee's highest 3 years average during such employee's last 10 years of service. The benefit is calculated by adding (1) 1.0% of such final average base earnings, up to the then-current Social Security covered compensation level ($31,128 in 1998), multiplied by the employee's credited years of past service (not to exceed 35 years), (2) 1.5% of such final average base earnings in excess of the Social Security covered compensation level, multiplied by the employee's credited years of past service (not to exceed 35 years), and (3) 1.2% of such final average base earnings, multiplied by the number of the employee's credited years of past service in excess of 35 years. Credited years of past service are counted back to age 21 and one year of service for participants who joined the Pension Plan when first eligible, otherwise back to the date of actual enrollment in the Pension Plan. Employees who were age 60 or older as of January 1, 1994 will receive the higher of the benefit under the prior career average defined benefit approach or the benefit under the new final average base earnings method. Earnings used to calculate benefits under the Pension Plan are restricted to (a) annual base salary, including amounts deferred under the Company's Employee Savings and Thrift Plan, amounts applied to the employee portion of the welfare benefit plan premiums pursuant to a salary reduction agreement, and amounts credited to health care and dependent care flexible spending accounts pursuant to a salary reduction agreement and (b) for individuals paid on a commission basis, annual base salary (as described above) plus commissions, but commissions are included only to the extent that the sum of the annual base salary and commissions does not exceed a designated amount. Normal Retirement Date under the Pension Plan is defined as age 65, but there is no actuarial reduction of a participant's pension for early retirement between the ages of 60 and 65. The Pension Plan also provides for a special pension benefit formula that would be used to recalculate benefits in the event of a change in control of the Company. The special formula, which the Company plans to review and modify from time to time as the funding status of the Pension Plan warrants, is intended to ensure that excess Pension Plan assets at the time of a change in control are used to provide increased retirement benefits for covered employees. The special formula is similar in design to the final average earnings formula described above under the amended Pension Plan, with the 1%, 1.5% and 1.2% factors replaced by 1.25%, 1.75%, and 1.67%, respectively. In accordance with Code requirements, the Pension Plan limits the maximum amount of annual compensation that may be taken into account under the Pension Plan ($160,000 in 1998) and the maximum annual employer provided benefit that can be paid under the Pension Plan ($130,000 in 1998). The Company maintains a supplemental employee retirement program ("SERP") pursuant to which certain employees whose retirement benefits otherwise payable under the Pension Plan are limited by these Code restrictions will receive payment of a supplemental pension from non- Pension Plan sources. The total benefit payable under both the Pension Plan and the SERP is calculated without regard to the Code limitations applicable to the Pension Plan using the same pension formula(s) applicable under the Pension Plan and using a 3 years average of both base earnings and annual cash bonus (whether paid or deferred). The total benefit thus calculated, reduced by the restricted benefit actually payable from the Pension Plan, is the benefit payable from the SERP. The following table shows the combined annual retirement benefit payable to the Company's executive officers named in the Summary Compensation Table, except Mr. Gromer, under both the Pension Plan and the SERP, as amended effective January 1, 1994, upon normal retirement, based on the indicated amount of final average remuneration and number of credited years of service. Mr. Gromer's annual retirement benefit is calculated under the terms of a retirement plan maintained by AMP Deutschland that is similar in design to the U.S. Pension Plan described above. As of January 1, 1998, Mr. Gromer's accrued annual retirement benefit payable upon normal retirement (age 65) under the AMP Deutschland plan was $271,118, based upon the average monthly conversion rate for January 1998, calculated as described in footnote 9 to the Summary Compensation table on page __ of this Consent Revocation Statement. PENSION PLAN TABLE (4) YEARS OF SERVICE (1)(3) ----------------------- Renumeration (2) 15 20 25 30 35 40 ------ ------- ------- ------- ------- ------- $400,000 . . . . . . . 87,665 116,887 146,109 175,331 204,553 228,553 450,000 . . . . . . . 98,915 131,887 164,859 197,831 230,803 257,803 500,000 . . . . . . . 110,165 146,887 183,609 220,331 257,053 287,053 550,000 . . . . . . . 121,415 161,887 202,359 242,831 283,303 316,303 600,000 . . . . . . . 132,665 176,887 221,109 265,331 309,553 345,553 650,000 . . . . . . . 143,915 191,887 239,859 287,831 335,803 374,803 700,000 . . . . . . . 155,165 206,887 258,609 310,331 362,053 404,053 750,000 . . . . . . . 166,415 221,887 277,359 332,831 388,303 433,303 800,000 . . . . . . . 177,665 236,887 296,109 355,331 414,553 462,553 850,000 . . . . . . . 188,915 251,887 314,859 377,831 440,803 491,803 900,000 . . . . . . . 200,165 266,887 333,609 400,331 467,053 521,053 950,000 . . . . . . . 211,415 281,887 352,359 422,831 493,303 550,303 1,000,000 . . . . . . 222,665 296,887 371,109 445,331 519,553 579,553 1,050,000 . . . . . . 233,915 311,887 389,859 467,831 545,803 608,803 1,100,000 . . . . . . 245,165 326,887 408,609 490,331 572,053 638,053 1,150,000 . . . . . . 256,415 341,887 427,359 512,831 598,303 667,303 1,200,000 . . . . . . 267,665 356,887 446,109 535,331 624,553 696,553 1,250,000 . . . . . . 278,915 371,887 464,859 557,831 650,803 725,803 1,300,000 . . . . . . 290,165 386,887 483,609 580,331 677,053 755,053 1,350,000 . . . . . . 301,415 401,887 502,359 602,831 703,303 784,303 1,400,000 . . . . . . 312,665 416,887 521,109 625,331 729,553 813,553 1,450,000 . . . . . . 323,915 431,887 539,859 647,831 755,803 842,803 1,500,000 . . . . . . 335,165 446,887 558,609 670,331 782,053 872,053 1,550,000 . . . . . . 346,415 461,887 577,359 692,831 808,303 901,303 1,600,000 . . . . . . 357,665 476,887 596,109 715,331 834,553 930,553 1,650,000 . . . . . . 368,915 491,887 614,859 737,831 860,803 959,803 1,700,000 . . . . . . 380,165 506,887 633,609 760,331 887,053 989,053 (1) Effective in April 1997, Mr. Ripp became a participant under the newly created AMP Incorporated Supplemental Executive Pension Plan, which was implemented to provide a competitive annual retirement benefit to executives, such as Mr. Ripp, who are first employed by the Company mid-to late-career. Under this plan, Mr. Ripp's annual retirement benefit at Normal Retirement Date is the greater of the combined annual retirement benefit payable under the Pension Plan and the SERP, as described above, or 30% of his highest 3 years average of base compensation and annual cash bonuses. (2) The compensation covered by the combination of the Pension Plan and SERP includes the employee's final average earnings, as determined by the average of the 3 years that represents the employee's highest base earnings during such employee's last 10 years of service, together with the average of the employee's annual cash bonus payments also paid in such 3 years. In the case of the named executive officers other than Mr. Gromer, the annual base earnings considered in such a determination includes the amount of salary and bonus shown in columns (c) and (d) of the Summary Compensation Table on page ____ of this Consent Revocation Statement. (3) The current estimated credited years of service for the named executive officers, except J. Gromer, discussed above, are as follows: W. J. Hudson, Jr. - 32 years; J. E. Marley - 33.5 years; R. Ripp - 3.3 years; and J. Gurski - 24.5 years. The estimated credited years of service for the named executive officers, except J. Gromer, discussed above, at the Normal Retirement Date are as follows: W. J. Hudson, Jr. - 33.42 years; J. E. Marley - 36.08 years; R. Ripp - 11.92 years; and J. Gurski - 32.5 years. (4) The retirement benefit shown in the Pension Plan Table is a straight life annuity amount and is not subject to any reduction for Social Security or other offset amounts. However, as required by law, the form of payment for married employees under the Pension Plan is a 50% joint and survivor annuity, which is typically less than the straight life annuity amount. SECURITY OWNERSHIP OF EXECUTIVE OFFICERS In order to further align the interests of the Company's executives with increasing the long-term value of the Company, in January 1995 the Company implemented Stock Ownership Guidelines for Senior Management ("Stock Guidelines"). The Stock Guidelines apply to approximately 130 executives presently participating in the Stock Option or SAR segment of the 1993 Long-Term Equity Incentive Plan. Affected executives are encouraged to directly own a minimum number of real or phantom shares of stock, the value of which is expressed as a multiple of the executive's annualized base salary. The multiplier ranges from 4 times salary for the Chairman and the CEO and President, to .5 times base salary for executives in less senior management positions. Executives are expected to comply with the Stock Guidelines within a 5-year period. The AMP equity security ownership as of August 3, 1998 by the named executive officers and all the executive officers and directors of the Company on that date is as follows:
Total Beneficial Beneficial Amount of and Phan- Amounts and Nature Ownership Phantom tom Own- Name and Address of Beneficial Owner- as a Percent Ownership ership Title of Class of Beneficial Owner ship (shares) of Class (shares)(3) (shares) - --------------- ------------------ ------------------- ------------ ----------- ----------- Common Stock William J. Hudson, Jr. 409,138(1)(2)(3) less than 1 35,957 445,095 Harrisburg, Pennsylvania Common Stock James E. Marley 315,100(2)(3) less than 1 26,453 341,553 Harrisburg, Pennsylvania Common Stock Robert Ripp 145,643(3) less than 1 16,314 161,957 Harrisburg, Pennsylvania Common Stock Juergen W. Gromer 70,454(3) less than 1 226 70,680 Langen, Germany Common Stock John E. Gurski Harrisburg, Pennsylvania 116,197(3) less than 1 12,826 129,023 Common Stock All Executive Officers 3,096,221(1)(2)(3) 1.49 155,832 3,252,053 (17 persons) and Directors as a Group
______________ (1) A portion of the shares reported for 17 executive officers are held in the Company's Employee Savings and Thrift Plan. Through further contributions to this plan, all 17 executive officers may acquire an undeterminable number of additional shares within 60 days after August 3, 1998. (2) Numbers in this column include phantom shares credited to executive officers under a deferred compensation plan and/or in association with dividend reinvestment of Performance Restricted Shares issued to designated officers. Pursuant to the deferred compensation plan, designated executive officers may defer receipt of up to 50% of their annual base salary and all officers of the Company may defer receipt of all or a portion of their annual cash bonus. Deferred compensation may be allocated to a phantom AMP Common Stock account, as described in footnote 1 to the Summary Compensation Table on page ___ of this Consent Revocation Statement. Dividends earned on Performance Restricted Shares are credited to the executive officer's account and are deemed to be invested in phantom shares of Common Stock. These phantom shares vest only when, and to the extent the associated Performance Restricted Shares vest, as described in footnote 3 to the Summary Compensation Table on page of this Consent Revocation Statement. (3) In addition, a total of 16,888 shares are held by immediate family members of five executive officers, either directly or in a custodial account over which the executive officer has voting and dispositive powers; the executive officers disclaim beneficial ownership. Additionally, a director has a 2% residual beneficial interest, but no voting or dispositive powers in a trust that holds 7,392 shares of Common Stock of the Company. Of the beneficial ownership reported in this number, 15,791 and 120,000 shares are held by a director in two limited partnerships over which he shares voting and dispositive powers, and another director holds 1,400 shares in a family trust of which he is co- trustee with his wife and shares voting and dispositive powers. Also, eight directors hold a total of 80,000 options, some of which are exercisable within 60 days after August 3, 1998 and are reported in this number, and seventeen executive officers hold a total of 1,851,345 options, some of which are exercisable within 60 days after August 3, 1998 and are reported in this number. The number does not include 27,602 Stock Bonus Units granted to the executives, none of which will convert within 60 days of August 3, 1998. Of the total number of options held by executive officers and described above, 419,500 are held by Mr. Hudson, of which 61,800 have been transferred to a family limited partnership. PERFORMANCE GRAPH The graph shown below depicts the cumulative total shareholder return (assuming a $100 investment and dividend reinvestment) during the 5-year period from 1992-1997 for the Common Stock of the Company compared to the cumulative total return during the same period for the Standard & Poor's 500 Stock Index, the peer group index contained in the Company's 1997 Proxy Statement ("Prior Peer Group") and the peer group index to be included in this Consent Revocation Statement and future Proxy Statements ("New Peer Group"). The Prior Peer Group was established in 1996 and essentially consisted of the companies included in the Electrical Equipment industrial classification of Standard & Poor's, together with the publicly-held competitors of the Company that were not included in that classification. The New Peer Group also contains the companies included in the Electrical Equipment industrial classification of Standard & Poor, together with publicly-held competitors of the Company that are not included in such classification. The New Peer Group does not include one company listed in Standard & Poor's Electrical Equipment industrial classification, General Electric Co. ("GE"), because of GE's dissimilar market capitalization and overall product offering. GE also was not part of the Prior Peer Group. Differences between the Prior Peer Group and the New Peer Group are: the addition of Berg Electronics Corp., a competitor of the Company that became publicly-held in 1996; the addition of Belden, Inc., a competitor in one of the Company's emerging product lines; the removal of Augat Inc. due to Thomas & Betts Corp.'s acquisition of Augat Inc. in 1997; the deletion of Elexsys Intl. Inc. due to Sanmina Company's acquisition of Elexsys Intl. Inc. in 1997; and the deletion of Westinghouse Electric Corp. (now part of CBS Corp.) because it no longer is included in Standard & Poor's Electrical Equipment industrial classification. Further, ADC Telecommunications, Inc. and Altron Inc. are not part of the New Peer Group because they are not included in Standard & Poor's Electrical Equipment industrial classification and, while these companies have some product lines that compete with some of the Company's product lines, overall the Company believes these companies do not adequately represent the Company's industries and do not provide a valid comparison of performance. The Company believes the New Peer Group is representative of the Company's industries and provides a valid comparison of performance. CUMULATIVE TOTAL SHAREHOLDER RETURN 1992-97
$300 | | Base Period Indexes / Cumulative Returns | | $275 | Company/Index Name 1992 1993 1994 1995 1996 1997 | ------------------ ---- ---- ---- ---- ---- ---- | AMP Incorporated 100 111.76 132.01 142.08 146.24 163.85 | S&P 500 100 110.08 111.53 153.45 188.68 251.63 $250 | New Peer Group 100 110.69 115.17 115.17 195.09 241.93 | Prior Peer Group 100 109.55 115.65 151.96 192.19 226.39 | $225 | | | $200 | TOTAL | SHAREHOLDER | RETURNS(3) $175 | (DOLLARS) | | $150 | | AMP ___________________ | S&P 500 .............. $125 | New Peer Group _____.____ (2) | Prior Peer Group __ __ __ (1) | $100 | | --------------------------------------------------------- | 92 93 94 95 96 97
___________ (1) The Prior Peer Group includes the following companies: ADC Telecommunications Inc. Honeywell, Inc. Altron Inc. Hubbell Inc., -- CL B Amphenol Corp. Methode Electronics -- CL A Augat Inc. Molex Inc. Elexsys Intl. Inc. Raychem Corp. Emerson Electric Co. Robinson Nugent Inc. General Signal Corp. Thomas & Betts Corp. Grainger (W W) Inc. Westinghouse Electric Corp. (2) The New Peer Group includes the following companies: Amphenol Corp. Hubbell Inc. -- CL B Belden, Inc. Methode Elecronics -- CL A Berg Electronics Corp. Molex Inc. Emerson Electric Co. Raychem Corp. General Signal Corp. Robinson Nugent Inc. Grainger (W W) Inc. Thomas & Betts Corp. Honeywell Inc. (3) The Total Shareholder Return assumes a fixed investment of $100 in the AMP Common Stock or indicated index, and a reinvestment of dividends. The total return of each company included in the S&P 500, the Prior Peer Group and the New Peer Group indexes has been weighted in accordance with the company's market capitalization as of the beginning of the year reported. The weighting was accomplished by: (i) calculating the market capitalization for each company at the beginning of the respective calendar year based on the closing stock price and outstanding shares; (ii) determining the percentage that each such market capitalization represents against the total of such market capitalizations for all companies included in the index; and (iii) multiplying the percentage determined in (ii) above by the total shareholder return of the company in question for the year being reported. THE COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE REPORT ON EXECUTIVE COMPENSATION The Compensation and Management Development Committee of the Board of Directors, among other responsibilities, has responsibility for the Company's executive compensation program. The Committee, which is composed entirely of outside directors, is chaired by Mr. Ralph D. DeNunzio, President, Harbor Point Associates, Inc. The other Committee members in 1997 were Mr. Dexter F. Baker (who served as director of AMP until April 22, 1998), Retired Chairman and CEO, Air Products and Chemicals, Inc.; Mr. John C. Morley, President of Evergreen Ventures, Ltd. and Retired President and CEO, Reliance Electric Company; and Mr. Paul G. Schloemer, Retired President and CEO, Parker Hannifin Corporation. Included within the Committee's executive compensation oversight charter are the review and approval of salary levels and salary increases for executive officers, annual Management Incentive Plan cash bonus awards for officers and other key executives, performance restricted stock and stock option awards under the 1993 Long-Term Equity Incentive Plan, and any special benefit programs affecting officers and key executives such as supplemental retirement plans, deferred compensation plans, change of control agreements and other plans. The Committee in appropriate cases makes recommendations to the Board of Directors on matters involving executive compensation. The overriding objectives of the Company's executive compensation program are to attract and retain qualified executive leadership and to reward performance that creates shareholder value. In furtherance of these objectives, the Company's executive compensation philosophy is (1) to deliver base salary compensation that is kept competitive with the executive's counterparts in the electrical/electronics industry and industry in general and (2) to provide short-, intermediate-, and long-term incentive compensation plans that supplement base salary and that correlate to the growth, success and profitability of the Company. As explained below in greater detail, these at-risk, performance-based incentive compensation plans directly align the interests of the Company's executives with its shareholders and form a significant portion of the total compensation opportunity for all officers and key executives. The Company annually reviews for the Committee's consideration compensation surveys and other published compensation data covering comparably-sized companies in both the electrical/electronics industry and industry in general to assess whether its executive base salary ranges and total compensation opportunities remain competitive. Where they do not remain competitive, appropriate adjustments are made. In this process of comparing the Company's executive compensation levels and practices against those of other companies, the compensation levels and practices at the companies comprising the New Peer Group Index in the Performance Graph on pages _______ of this Consent Revocation Statement are periodically reviewed separately, but due to the small sample size the New Peer Group data alone is not used as the primary comparative benchmark. Rather, the comparative data relied upon by the Committee is drawn from broader surveys of comparably-sized companies in the electrical/electronics industry and industry in general, which surveys include 7 of the 13 new Peer Group companies. The salaries, and any periodic increases thereof, of the Chairman and the CEO are determined by the Board of Directors of the Company based on recommendations made by the Committee. These officers in turn recommend the salary adjustments for the other executive officers, with the review and oversight of the Committee. The level of base salary compensation for officers and key executives is determined by both their scope of responsibility and the competitive salary ranges established by the survey process described above. Periodic increases in base salary are dependent on the individual's performance in his or her position for a given period, on the individual's competency, skill and experience, and on the growth of salary levels both inside and outside the Company. The AMP Management Incentive Plan provides opportunity for annual cash bonuses based on two or more of the following weighted performance components: (1) overall corporate performance for a given year, adjusted to net out extraordinary, non-recurring gains or losses and then compared against corporate performance targets for the year (this component is weighted 80% for named executive officer participants such as the CEO with corporate-wide responsibilities and 60% for those named executive officers with specific unit responsibilities); (2) operating unit performance for a given year measured against operating unit income and AMP value added (AVA) targets for the year (this component is weighted 20% for named executive officer participants with specific operating unit responsibilities); and (3) individual performance for a given year measured against individual performance objectives for such year (this component is weighted 20% for all named executive officer participants). For the named executive officers, the corporate performance component of the Management Incentive Plan annual cash bonus is based on attainment of an earnings per share (EPS) target. The Committee sets the EPS target for the year at the start of each year, with the review of the Board of Directors, and also sets the individual performance objectives of the Chairman and the CEO. In addition to setting the EPS target, the Committee assigns to each participant under the Management Incentive Plan minimum, target and maximum bonus percentages, which vary from participant to participant to reflect competitive practice and the scope of the participant's responsibility. Actual corporate and unit performance between 90% and 120% of the target performance levels results in a bonus calculation that ranges between the participant's assigned minimum and maximum bonus percentages. The EPS target for 1997 was set at $2.25, which target performance was to be exclusive of any EPS impact resultant from planned 1997 changes in accounting methods. The actual EPS performance for 1997 (adjusted for plan purposes) was $2.23. In keeping with the pay-for-performance design and intent of the Management Incentive Plan, this 1997 EPS performance resulted in a bonus being paid for 1997 under the Management Incentive Plan's corporate performance component to the named executive officers at a level that fell between their respective minimum and target bonus levels. The unit and individual performance targets for 1997 and the actual unit and individual performance results for 1997 varied widely between units and individuals. In granting long-term incentive awards during 1997, the Committee gave considerable weight to the annual long-term incentive award levels and practices of a diverse range of over 350 major companies that participated in the Towers Perrin survey of long-term incentive compensation practices. Of the 13 companies comprising the New Peer Group Index in the Performance Graph on pages _______ of this Consent Revocation Statement, 7 were included in this Towers Perrin survey. The Company's long-term incentive award levels for 1997 were generally set at between the 50th and the 75th percentile of the award levels reflected in the Towers Perrin Survey. Long-term incentive compensation awards in the form of performance restricted shares and stock options were made by the Committee in 1997 under the 1993 Long-Term Equity Incentive Plan. The named executive officers and the other officers who comprise the Company's Global Planning Committee received a 1997 long-term incentive award that was split so that approximately 50% of the value of the 1997 award was provided in the form of performance restricted shares, with the balance provided in the form of stock options. All other recipients of a 1997 long-term incentive award received 100% of the award in the form of stock options. The performance restricted shares granted in 1997 will be forfeited at the end of 1999 if the Company fails to attain for the three-year period from January 1, 1997 through December 31, 1999 a minimum average annual level of return on equity ("ROE") that was set by the Committee at the beginning of 1997. For this purpose, the Company's annual ROE result for each of the three years will be separately determined, totaled, and divided by three to determine the average annual ROE. If the average annual ROE over the three-year period is at least equal to this minimum level, then the extent to which the performance restricted shares granted in 1997 will become vested at the end of 1999 will be determined by the Company's average annual earnings growth rate over the same three-year period. A target level of average annual earnings growth over the three-year period was set by the Committee at the beginning of 1997, and average annual earnings growth between 0% and this target level will result in vesting of the performance restricted shares that ranges proportionately from 0% to 100%. The Committee also set a super-target level of average annual earnings growth at the beginning of 1997, and average annual earnings growth between the target level and the super-target level will result in vesting of the performance restricted shares that ranges proportionately from 100% to 200%. Performance restricted shares that are forfeited at the end of 1999 either because of the Company's failure to attain the minimum average annual ROE level or to attain the target level of average annual earnings growth will be canceled and revert to the Company. In general, the stock options granted in 1997 vest on the third anniversary of the grant date, are exercisable thereafter until the tenth anniversary of the award date, and have an exercise price equal to the award date fair market value of a share of the Company's Common Stock. In 1995, with the review and approval of the Committee, the Company implemented formal share ownership guidelines applicable to its key executives. By the end of a phase-in period, the guidelines require that the Chairman and the CEO each own real or phantom shares of Company Common Stock with a value of at least four times annual base salary. The guideline applicable to the other named executive officers is ownership of shares with a value of at least three times annual base salary. The primary intent of these guidelines is to significantly increase the extent to which the personal wealth of the Company's executives is directly linked to the performance of the Company's Common Stock, thereby materially expanding the community of interest between the executives and the Company's shareholders. Section 162(m) of the Internal Revenue Code imposes a $1,000,000 per year per named executive officer limitation on the amount of non- performance based compensation that can be paid and deducted by the Company. The Company's policy with respect to this limitation is to maximize the deductibility of all compensation paid to each named executive officer by (1) delivering compensation to named executive officers that to a substantial extent meets the Code Section 162(m) definition of performance-based compensation and (2) affording the named executive officers the opportunity to defer receipt of compensation to years after their retirement. In furtherance of this policy, the Company's Management Incentive Plan, under which the named executive officers have an opportunity to earn an annual cash bonus, and the 1993 Long-Term Equity Incentive Plan, under which the named executive officers receive long-term incentive compensation awards, have been designed and are administered so that all or a significant portion of the compensation received pursuant to such plans will qualify as performance-based compensation within the meaning of Section 162(m). In addition, the Company has implemented a Deferred Compensation Plan under which the named executive officers may defer receipt of up to 50% of annual base salary and up to 100% of annual cash bonus amounts. All compensation paid to the named executive officers in 1997 was deductible and it is anticipated that all compensation to be paid to named executive officers in 1998 will be deductible. 1997 CEO COMPENSATION Mr. Hudson's base salary rate per annum for 1997 remained at the same level that was in effect for 1996, $810,000. In deciding not to adjust Mr. Hudson's salary for 1997, the Committee considered primarily the Company's disappointing growth and performance in 1996. Mr. Hudson's assigned minimum, target, and maximum annual cash bonus percentages under the Management Incentive Plan for 1997 were 10%, 65% and 100%, respectively. Accordingly, Mr. Hudson had the potential to earn an annual bonus of up to 100% of base annual salary if the Company were to attain 120% or more of the $2.25 EPS target and Mr. Hudson were to fully accomplish his individual performance targets. Based on the Company's adjusted EPS performance for 1997 and the Committee's assessment of Mr. Hudson's individual performance, Mr. Hudson's aggregate bonus under the Plan for 1997 was 66% of his base salary, or $534,600. On July 22, 1997 Mr. Hudson was awarded 63,900 stock options (2,100 incentive stock options and 61,800 non-qualified stock options) under the 1993 Long-Term Equity Incentive Plan, all with an exercise price of $47.00. These options will first be exercisable July 22, 2000 and remain exercisable to July 22, 2007. On the same date, Mr. Hudson was also awarded 39,600 performance restricted shares of Common Stock of the Company under the 1993 Long-Term Equity Incentive Plan. These shares will either vest or be forfeited at the end of 1999 based on the Company's performance in 1997, 1998 and 1999 with respect to average annual return on equity and average annual earnings growth targets that were set by the Committee. In making these long-term incentive awards, the Committee's intent was to continue a practice begun in 1993, when the Company's first stock option plan became effective, of increasing the proportion of stock-based compensation in the total compensation package of the Company's senior executive officers, particularly the CEO, thereby further increasing the executives' community of interest with the Company's shareholders. The aggregate long-term incentive award levels set for Mr. Hudson in 1997 were at approximately the 60th percentile of comparable long-term incentive award recipients reflected in Towers Perrin survey data relied upon by the Committee. Since the 1993 inception of the Long-Term Equity Incentive Plan, Mr. Hudson has been granted a total of 425,500 stock options and 111,500 performance restricted shares of Common Stock of the Company. As of the end of 1997, a portion of the initial performance restricted share grant made to Mr. Hudson in 1995 under the 1993 Long-Term Equity Incentive Plan was vested based on the Company's performance over the three-year period of 1995, 1996 and 1997. The Company's average annual ROE over the three-year period, adjusted for Plan purposes, exceeded the minimum threshold that had been set by the Committee in 1995, and the Company's average earnings growth rate over the three-year period, as defined for Plan purposes, of 8.42% resulted in Mr. Hudson becoming vested in 56.13%, or 14,033, of the 25,000 performance restricted shares (plus 56.13%, or 869, of the related dividend reinvestment shares) that had been granted to him in 1995. The unvested 10,967 share balance of the 25,000 share grant (along with the 679 share balance of the related dividend reinvestment shares) was forfeited back to the Company. In April 1992, Mr. Hudson had been awarded 12,200 stock bonus units under the Company's former Stock Plus Cash Bonus Plan, with a designated value of $27.88 and an unspecified cash bonus percentage (not in excess of 50%) to cover United States taxes on the payout, and in April 1993, Mr. Hudson had been awarded 20,000 stock bonus units under the Company's former Stock Plus Cash Bonus Plan, with a designated value of $28.50 and an unspecified cash bonus percentage (not in excess of 50%) to cover United States taxes on the payout. In April 1997, when the fair market value of a share of the Company's Common Stock had increased to $34.50, 4,066 of the 12,200 1992 stock bonus units and 6,666 of the 20,000 1993 stock bonus units matured, resulting in a stock bonus payment to Mr. Hudson of 2,061 shares of Common Stock of the Company and a cash payment of $35,608. In making these payout calculations, the award date designated value of $28.50 per stock bonus unit was used to determine the spread applicable to the maturing April 1993 stock bonus units in lieu of the alternative designated value defined under the Plan, but the alternative designated value defined under the Plan of $26.84 was used to determine the spread applicable to the maturing April 1992 stock bonus units in lieu of the April 1992 award date designated value of $27.88. The Plan's alternative designated value, which is based on earnings per share growth between the award date and the maturity date, is used in payout calculations whenever it would result in a greater stock bonus payout than would the award date designated value. (For an explanation of the alternative designated value, see footnote 1 to the Aggregated Option/SAR Exercises in 1997 and FY-End Option/SAR Values Table, pages ________). The Compensation and Management Development Committee: Dexter F. Baker Ralph D. DeNunzio, Chairman John C. Morley Paul G. Schloemer TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS The Company has entered into agreements with the named executive officers and certain other executive officers to assure their unbiased counsel and continued dedication in the event of an unsolicited tender offer or other occurrence that may result in a change of control. The terms of the agreements provide that, in the event of a change of control, as previously defined on pages _____ of this Consent Revocation Statement, and the termination of the executives employment at any time during the 2-year period thereafter, the executive will be paid a lump sum equal to a multiplier of 1, 2 or 3 times the sum of his highest salary rate in effect during the 12 months prior to termination of employment and his highest annual bonus paid during the prior 3-year period, together with payment of an amount necessary to pay any excise tax, and any taxes thereon, due on the lump sum or other payment. The consummation of the AlliedSignal Offer or the election of the AlliedSignal Nominees to the Board would constitute a change in control within the meaning of such agreements Additionally, upon a change of control: (i) all awards that the executive has received under any bonus plans he is participating in will be immediately vested and either paid or exercisable, as appropriate; (ii) the executive will be paid in cash installments per the terms of the applicable contract for all restricted stock, if any, issued by contract; (iii) he will be vested in deferred compensation matching amounts; and (iv) he will receive continuation of any existing split dollar life insurance policy until the latter of the policy anniversary date following the executives 65th birthday or the 15th anniversary of the policy. Upon a change of control and termination of the executive's employment within 2 years thereafter, the executive also shall be vested in all pension benefits based on the highest annual salary rate in effect during the 12 months prior to termination of employment with respect to the pension plan and, with respect to the pension restoration plan, the amount of compensation on which the lump sum severance payment described above is calculated, plus an additional accrual for 1, 2 or 3 years; shall receive the conversion of the executives group term life insurance policy, if any, to a fully paid permanent life insurance policy remaining in effect for 1, 2 or 3 years at the Company's cost; and shall receive continuation of health, dental, and disability benefits until the latter of 1, 2 or 3 years, attainment of the age or other condition at which the benefits discontinue according to the terms of the related plan, reduced to the extent of comparable benefits provided by a new employer without cost. DISSENTERS' RIGHTS Shareholders of AMP are not entitled to dissenters' rights in connection with the AlliedSignal Consent Proposals. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS During 1997 there were: (a) no transactions between the Company and management, the Directors (or related third parties; (b) no business relationship between the Company and a Director; and (c) no indebtedness to the Company by management, the Directors or related third parties or entities, that must be disclosed. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's officers, directors, and persons owning more than ten percent of a registered class of the Company's equity securities file reports of ownership and changes in ownership of all equity and derivative securities of the Company with the Securities and Exchange Commission ("SEC") and the New York Stock Exchange. The SEC regulations also require that a copy of all such Section 16(a) forms filed must be furnished to the Company by the officers, directors and greater than ten percent shareholders. Based solely on a review of the copies of such forms and amendments thereto received by the Company, or written representations from the Company's officers and directors that no Forms 5 were required to be filed, the Company believes that during 1997 all Section 16(a) filing requirements applicable to its officers, directors and greater than ten-percent beneficial owners were met with the exception of Richard P. Clark, for whom inadvertently 153 shares held by one son rather than two sons were reported in a Form 3 as beneficially owned, and Juergen W. Gromer, for whom an exercise of stock options was incorrectly reported as a "same day sale" rather than a "cashless for stock" exercise whereby his holdings were increased by a net of 4,299 shares. Late or amended filings were made promptly upon discovery of the oversight. PRINCIPAL SHAREHOLDERS As of August , 1998, the only persons known to management to own beneficially more than 5% of the outstanding shares of Common Stock of the Company are named below:
Amount and Na- ture of Benefi- Percent Title of Class Name and Address of Beneficial Owner cial Ownership of Class -------------- ------------------------------------ --------------- -------- Common Stock FMR Corp. 15,908,145 7.23 82 Devonshire Street, Boston, Massachusetts 02109 The nature of ownership is as follows: Sole Voting Powers . . . . . . . . . . . . . . . . . . . . 935,115 Shared Voting Powers . . . . . . . . . . . . . . . . . . . 0 Sole Dispositive Powers . . . . . . . . . . . . . . . . . . 15,908,145 Shared Dispositive Powers . . . . . . . . . . . . . . . . . 0
SOLICITATION OF REVOCATIONS The cost of the solicitation of revocations of consent will be borne by AMP. AMP estimates that the total expenditures in connection with such solicitation (including the fees and expenses of AMP's attorneys, public relations advisers and solicitors, and advertising, printing, mailing, travel and other costs, but excluding salaries and wages of officers and employees), will be approximately $______, of which $______ has been spent to date. Directors, officers and other AMP employees may, without additional compensation, solicit revocations by mail, in person, by telecommunication or by other electronic means. AMP has retained Innisfree, at an estimated fee of $250,000 plus reasonable out-of-pocket expenses, to assist in the solicitation of revocations, as well as to assist AMP with its communications with its shareholders with respect to, and to provide other services to AMP in connection with, AMP's opposition to the AlliedSignal Consent Solicitation. Approximately 50 persons will be utilized by Innisfree in its efforts. AMP will reimburse brokerage houses, banks, custodians and other nominees and fiduciaries for out-of-pocket expenses incurred in forwarding AMP's consent revocation materials to, and obtaining instructions relating to such materials from, beneficial owners of Common Stock. AMP has agreed to indemnify Innisfree against certain liabilities and expenses in connection with its engagement, including certain liabilities under the federal securities laws. PARTICIPANTS IN THE SOLICITATION Under applicable regulations of the SEC, each member of the Board, certain executive officers of AMP, certain other members of management of AMP and certain other persons may be deemed to be a "participant" in AMP's solicitation of revocations of consent. The principal occupations and business addresses of each participant are set forth in Schedule A. Information about the present ownership by directors and the named executive officers of AMP of AMP's securities is provided in this Consent Revocation Statement and the present ownership of AMP's securities by other participants is listed on Schedule A. SHAREHOLDER PROPOSALS In order to be considered for inclusion in AMP's proxy materials for the 1999 Annual Meeting, shareholder proposals must be received by AMP at its headquarters office not later than November 16, 1998 and must have satisfied the conditions established by the SEC under Rule 14a-8 for shareholder proposals to be included in AMP's proxy materials for that meeting. In order for a shareholder proposal made outside of Rule 14a-8 to be considered "timely" within the meaning of Rule 14a-4(c), such proposal must be received by AMP at its headquarters office not later than January 29, 1999. AMP INCORPORATED ___________ ___, 1998 IMPORTANT 1. If your shares are registered in your own name, please sign, date and mail the enclosed WHITE Consent Revocation Card to Innisfree in the postage-paid envelope provided. 2. If you have previously signed and returned a blue consent card to AlliedSignal, you have every right to change your vote. Only your latest dated card will count. You may revoke any blue consent card already sent to AlliedSignal by signing, dating and mailing the enclosed WHITE Consent Revocation Card in the postage-paid envelope provided. 3. If your shares are held in the name of a brokerage firm, bank nominee or other institution, only it can sign a WHITE Consent Revocation Card with respect to your shares and only after receiving your specific instructions. Accordingly, please sign, date and mail the enclosed WHITE Consent Revocation Card in the postage-paid envelope provided. To ensure that your shares are voted, you should also contact the person responsible for your account and give instructions for a WHITE Consent Revocation Card to be issued representing your shares. 4. After signing the enclosed WHITE Consent Revocation Card, do not sign or return the blue consent card. Do not even use AlliedSignal's blue consent card to indicate your opposition to the AlliedSignal Consent Proposals. If you have any questions about giving your revocation of consent or require assistance, please call: INNISFREE M&A INCORPORATED 501 MADISON AVENUE, 20TH FLOOR NEW YORK, NEW YORK 10022 CALL TOLL FREE: (888) 750-5834 BANKS & BROKERS CALL COLLECT: (212) 750-5833 SCHEDULE A INFORMATION CONCERNING THE DIRECTORS AND CERTAIN EXECUTIVE OFFICERS OF AMP AND CERTAIN EMPLOYEES OF AMP AND OTHER PARTICIPANTS WHO MAY ALSO SOLICIT REVOCATIONS OF CONSENTS The following table sets forth the name, principal business address and the present office or other principal occupation or employment, and the name, principal business and the address of any corporation or other organization in which such employment is carried on, of the directors and certain executive officers of AMP and certain employees and other representatives of AMP who may also solicit revocations of consents from shareholders of AMP. Unless otherwise indicated, the principal occupation refers to such person's position with AMP and the business address is AMP Incorporated, P. O. Box 3608, Harrisburg, Pennsylvania 17105. DIRECTORS The principal occupations of the Company's directors who are deemed participants in the solicitation are set forth on pages __ and __ of this Consent Revocation Statement. The principal business address of Messrs. Hudson, Marley and McInnes is that of the Company. The name, business and address of the other participants' organization of employment are as follows: Name Address ---- ------- Ralph D. DeNunzio Harbor Point Associates, Inc. Suite 2602 375 Park Avenue New York, NY 10152 Barbara Hackman Franklin Barbara Franklin Enterprises 2600 Virginia Avenue NW, Suite 506 Washington, DC 20037 Joseph M. Hixon III Hixon Investments 4400 Marsh Landing Boulevard, Suite 7 Ponte Vedra Beach, FL 32082-1287 Joseph M. Magliochetti Dana Corporation 4500 Dorr Street Toledo, OH 43615 Jerome J. Meyer Tektronix, Inc. 26600 SW Parkway Wilsonville, OR 97070-1000 John C. Morley Evergreen Ventures, Ltd. 30195 Chagrin Boulevard, Suite 210N Pepper Pike, OH 44124 Paul G. Schloemer Parker Hannifin Corporation 18321 Jamboree Road P.O. Box C 19510 Irvine, CA 92612 Takeo Shiina IBM Japan, Ltd. 2-12 Roppongi 3-chome Minato-tu, Tokyo 106-8711 Japan EXECUTIVE OFFICERS AND MANAGEMENT The principal occupation of the Company's executive officers and certain other members of management who are deemed participants in the solicitation are set forth below. Except as otherwise specified below, the principal business address of each of such persons is that of the Company. Name Principal Occupation ---- -------------------- Robert Ripp Executive Vice President, Global Businesses William S. Urkiel Corporate Vice President and Chief Financial Officer Richard P. Clark Divisional Vice President, Global Wireless Products Group Herbert M. Cole Corporate Vice President and President, Global Terminal and Connector Operations Thomas J. 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 Juergen W. Gromer Corporate Vice President and President, Global AMP Deutschland Automotive Division Ampere Str. 7-11 63225 Langen Germany John E. Gurski Corporate Vice President and President, Global Value-Added Operations and President, Global Operating Division David F. Henschel Corporate Secretary William J. Hudson, Jr. Chief Executive Officer and President John H. Kegel Corporate Vice President, Asia/Pacific c/o Asia Pacific Operations Office KSP C-7F No. 725 3-2-1 Sakado, Takatsu-Ku Kawasaki, Japan Mark E. Lang Corporate Controller Philippe Lemaitre Corporate Vice President and Chief Technology Officer James E. Marley Chairman of the Board Joseph C. Overbaugh Corporate Treasurer Nazario Proietto Corporate Vice President and President, Global Consumer, Industrial and Power Technology Division Douglas Wilburne Director, Investor Relations Mary Rakoczy Manager, Shareholder Services CREDIT SUISSE FIRST BOSTON Certain employees of Credit Suisse First Boston Corporation ("CSFB") may also assist in the solicitation of proxies, including by communicating in person, by telephone, or otherwise with limited number of institutions, brokers, or other persons who are shareholders of AMP. CSFB will not receive any separate fee for its solicitation activities. Credit Suisse First Boston is an investment banking firm that provides a full range of financial services for institutional and individual clients. Although CSFB does not admit that it or any of its directors, officers, employees or affiliates are a "participant," as defined in Schedule 14A promulgated under the Securities Exchange Act of 1934 by the Securities and Exchange Commission, or that such Schedule 14A requires the disclosure of certain information concerning CSFB, CSFB may assist AMP in such a solicitation. CSFB engages in a full range of investment banking, securities trading, market-making and brokerage services for institutional and individual clients. In the normal course of its business, CSFB may trade securities of AMP for its own account and the account of its customers and, accordingly, may at any time hold a long or short position in such securities. As of August 12, 1998, CSFB held a net long position of 99,766 shares of AMP Common Stock. Additionally, in the normal course of its business, CSFB may finance its securities positions by bank and other borrowings and repurchase and securities borrowing transactions. Information with respect to the employees of CSFB who may be deemed "participants" is set forth below. None of the individuals named below owns any shares of Common Stock or has engaged in any transaction involving the Common Stock during the past two years. The principal business address of each of the persons listed below is Eleven Madison Avenue, New York, New York 10010, except that Mr. Koch's principal business is Credit Suisse First Boston, AT&T Corporate Center, 227 West Monroe St., Chicago, IL 60606. Name Principal Occupation ---- -------------------- Alan H. Howard Managing Director, Investment Banking Steven Koch Co-Head of M&A Group and Managing Director D. Scott Lindsay Co-Head of M&A Group and Managing Director AMP has retained CSFB to act as its lead financial advisor with respect to the AlliedSignal Offer pursuant to a letter agreement, dated August 5, 1998 (the "CSFB Engagement Letter"), between CSFB and AMP. The CSFB Engagement Letter provides for the payment to CSFB of customary fees. In addition to customary fees, AMP has agreed to reimburse CSFB for CSFB's out-of-pocket expenses, including fees and expenses of CSFB's legal counsel, if any, and any other advisor retained by CSFB (which, except in the case of legal counsel, shall only be retained with the prior approval of AMP), resulting from or arising out of the CSFB Engagement Letter. AMP has also agreed to indemnify CSFB and certain related persons against certain liabilities incurred in connection with its performance under the CSFB Engagement Letter. INFORMATION REGARDING OWNERSHIP OF THE COMPANY'S SECURITIES BY PARTICIPANTS None of the participants owns any of the Company's securities of record but not beneficially. The number of shares of Common Stock held by directors and the named executive officers is set forth on pages __ and __ of this Consent Revocation Statement. The number of shares of Common Stock held by the other participants is set forth below: Name Share Ownership ---- --------------- William S. Urkiel 22,987 Richard P. Clark 34,135 Herbert M. Cole 87,891 Thomas J. DiClemente 32,924 Rudolf Gassner 53,117 Charles W. Goonrey 16,817 David F. Henschel 5,133 John H. Kegel 36,649 Mark E. Lang 3,841 Philippe Lemaitre 16,406 Joseph C. Overbaugh 24,024 Nazario Proietto 42,197 Douglas Wilburne 1 Mary Rakoczy 110 INFORMATION REGARDING TRANSACTIONS IN THE COMPANY'S SECURITIES BY PARTICIPANTS The following table sets forth purchases and sales of AMP's equity securities by the participants listed below during the past two years. Unless otherwise indicated, all transactions are in the public market. Number of Shares of Common Stock Purchased NAME (or Sold) FOOTNOTE DATE - ------------------------------------------------------------------------- DIRECTORS Ralph D. DeNunzio 2,000 (1) 07/01/96 2,000 (1) 07/01/97 2,000 (1) 07/01/98 Barbara Hackman Franklin 2,000 (1) 07/01/96 2,000 (1) 07/01/97 52 (10) 12/31/97 300 (8) 02/10/98 6.7 (10) 03/02/98 10 (10) 06/01/98 2,000 (1) 07/01/98 Joseph M. Hixon III 2,000 (1) 07/01/96 (51,133) (3) 09/30/96 2,000 (1) 07/01/97 (510) (3) 12/24/97 (490) (3) 12/30/97 (2,079) (3) 04/02/98 2,000 (1) 07/01/98 William J. Hudson, Jr. 2,500 (1) 07/23/96 73,100 (1) 07/23/96 46,900 (12) 07/23/96 902 (5) 04/21/97 1,159 (5) 04/21/97 (4,040) (3) 04/23/97 2,100 (1) 07/22/97 61,800 (1) 07/22/97 39,600 (12) 07/22/97 906 (4) 07/30/97 1,895 (6) 12/31/97 9,956 (13) 01/27/98 (3,398) (7) 01/27/98 (61,800) (3) 02/03/98 1,306 (5) 04/21/98 2,039 (5) 04/21/98 (3,406) (3) 04/22/98 Joseph M. Magliochetti 2,000 (1) 07/24/96 2,000 (1) 07/01/97 2,000 (1) 07/01/98 James E. Marley 2,500 (1) 07/23/96 58,000 (1) 07/23/96 31,700 (12) 07/23/96 260 (3) 10/15/96 260 (3) 10/16/96 500 (3) 10/28/96 1,536 (5) 10/28/96 2,100 (1) 07/22/97 39,000 (1) 07/22/97 31,700 (12) 07/22/97 10,000 (3) 07/28/97 10,000 (3) 07/28/97 2,520 (5) 10/28/97 1,364 (6) 12/31/97 7,965 (13) 01/27/98 (3,957) (7) 01/27/98 Judy Marley (Wife) .3936 (10) 03/02/98 .4642 (10) 06/01/98 Harold A. McInnes (5,315) (11) 10/28/96 5,315 (5) 10/28/96 (1,000) (3) 11/26/96 (6,000) (9) 04/28/97 (300) (3) 06/12/97 (382) (3) 06/17/98 Jerome J. Meyer 2,000 (1) 07/01/96 1,300 (8) 08/02/96 2,000 (1) 07/01/97 2,000 (1) 07/01/98 John C. Morley (300) (9) 06/12/96 2,000 (1) 07/01/96 2,000 (1) 07/01/97 2,000 (1) 07/01/98 Paul G. Schloemer 2,000 (1) 07/01/96 600 (8) 01/28/97 2,000 (1) 07/01/97 2,000 (1) 07/01/98 Takeo Shiina 2,000 (1) 07/01/96 2,000 (1) 07/01/97 4.60 (10) 12/31/97 0.62 (10) 03/02/98 .73 (10) 06/01/98 2,000 (1) 07/01/98 OFFICERS ------- Richard P. Clark 2,500 (1) 07/23/96 14,300 (1) 07/23/96 326 (5) 10/28/96 2,100 (1) 07/22/97 5,500 (1) 07/22/97 4,700 (12) 07/22/97 535 (5) 10/28/97 3,472.92 (6) 12/31/97 3,200 (1) 07/21/98 6,500 (1) 07/21/98 6,600 (12) 08/17/98 Herbert M. Cole 2,500 (1) 07/23/96 19,800 (1) 07/23/96 13,800 (12) 07/23/96 460 (5) 10/28/96 1,138 (4) 07/16/97 2,100 (1) 07/22/97 19,800 (1) 07/22/97 13,600 (12) 07/22/97 917 (4) 08/06/97 756 (5) 10/28/97 2,770 (13) 01/27/98 (1,183) (7) 01/27/98 3,200 (1) 07/21/98 25,400 (1) 07/21/98 19,500 (12) 08/17/98 Thomas J. DiClemente 2,500 (1) 07/23/96 10,900 (1) 07/23/96 2,100 (1) 07/22/97 7,800 (1) 07/22/97 6,100 (12) 07/22/97 182 (6) 12/31/97 6 (10) 12/31/97 3.57 (10) 03/02/98 4.21 (10) 06/01/98 3,200 (1) 07/21/98 10,500 (1) 07/21/98 111 (5) 07/27/98 900 (8) 07/28/98 100 (8) 07/28/98 9,300 (12) 08/17/98 Rudolf Gassner 2,500 (1) 07/23/96 14,500 (1) 07/23/96 2,100 (1) 07/22/97 7,000 (1) 07/22/97 5,700 (12) 07/22/97 (500) (9) 08/05/97 1,684 (10) 12/31/97 58.85 (10) 03/02/98 (2,139) (9) 04/27/98 7 (6) 04/30/98 15.30 (10) 06/01/98 3,200 (1) 07/21/98 9,800 (1) 07/21/98 141 (5) 07/27/98 9,000 (12) 08/17/98 Charles W. Goonrey 2,500 (1) 07/23/96 8,000 (1) 07/23/96 303 (5) 04/21/97 2,100 (1) 07/22/97 7,200 (1) 07/22/97 1,348 (4) 07/31/97 (7,538) (3) 07/31/97 439 (5) 04/21/98 (439) (4) 04/21/98 3,200 (1) 07/21/98 8,900 (1) 07/21/98 Mary Goonrey (wife) 7,538 (14) 07/31/97 46.4674 (10) 03/02/98 439 (14) 04/21/98 57.9258 (10) 06/01/98 Juergen W. Gromer 22,400 (1) 07/23/96 15,000 (1) 07/22/97 9,300 (12) 07/22/97 1,103 (5) 07/27/97 1,922 (4) 07/30/97 1,377 (4) 07/30/97 17,400 (1) 07/21/98 212 (5) 07/27/98 11,900 (12) 08/17/98 John E. Gurski 2,500 (1) 07/23/96 21,300 (1) 07/23/96 14,700 (12) 07/23/96 621 (5) 04/21/97 2,100 (1) 07/22/97 19,100 (1) 07/22/97 13,200 (12) 07/22/97 672 (6) 12/31/97 2,947 (13) 01/27/98 (1,464) (7) 01/27/98 3,200 (1) 07/21/98 24,000 (1) 07/21/98 18,500 (12) 08/17/98 John E. Gurski Cust. .5538 (10) 03/02/98 for Kevin (Son) .6530 (10) 06/01/98 David F. Henschel 2,500 (1) 07/23/96 2,300 (1) 07/23/96 306 (5) 10/28/96 2,100 (1) 07/22/97 2,400 (1) 07/22/97 235 (4) 07/28/97 504 (5) 10/28/97 130 (14) 12/16/97 1,744 (6) 12/31/97 224 (10) 12/31/97 19.26 (10) 03/02/98 22.71 (10) 06/01/98 John H. Kegel 2,500 (1) 07/23/96 8,200 (1) 07/23/96 325 (5) 04/21/97 2,100 (1) 07/22/97 8,100 (1) 07/22/97 1,259 (4) 07/24/97 406 (10) 12/31/97 25.85 (10) 03/02/98 471 (5) 04/21/98 33.85 (10) 06/01/98 3,200 (1) 07/21/98 7,300 (1) 07/21/98 7,100 (12) 08/17/98 Mark E. Lang 2,500 (1) 07/23/96 4,000 (1) 07/23/96 1 (15) 06/17/97 229 (8) 07/01/97 2,100 (1) 07/22/97 4,400 (1) 07/22/97 .006 (10) 03/02/98 .007 (10) 06/01/98 3,200 (1) 07/21/98 10,800 (1) 07/21/98 1,683.03 (6) 07/27/98 172.0436 (10) 08/03/98 Philippe Lemaitre 17,500 (1) 03/12/97 2,100 (1) 07/22/97 8,100 (1) 07/22/97 6,300 (12) 07/22/97 3,200 (1) 07/21/98 11,400 (1) 07/21/98 9,900 (12) 08/17/98 Joseph C. Overbaugh 2,500 (1) 07/23/96 8,200 (1) 07/23/96 301 (5) 04/21/97 2,100 (1) 07/22/97 7,400 (1) 07/22/97 697 (6) 12/31/97 3,200 (1) 07/21/98 8,800 (1) 07/21/98 508 (6) 07/28/98 Nazario Proietto 2,500 (1) 07/23/96 11,300 (1) 07/23/96 426 (5) 10/28/96 2,100 (1) 07/22/97 5,000 (1) 07/22/97 4,400 (12) 07/22/97 617 (5) 10/28/97 86 (6) 12/31/97 24.91 (10) 03/02/98 29.37 (10) 06/01/98 3,200 (1) 07/21/98 9,800 (1) 07/21/98 8,800 (12) 08/17/98 Robert Ripp 2,500 (1) 07/23/96 23,000 (1) 07/23/96 15,800 (12) 07/23/96 2,100 (1) 07/22/97 23,000 (1) 07/22/97 15,600 (12) 07/22/97 3,624 (13) 01/27/98 (1,800) (7) 01/27/98 3,200 (1) 07/21/98 37,900 (1) 07/21/98 27,900 (12) 08/17/98 William S. Urkiel 2,500 (1) 07/23/96 16,200 (1) 07/23/96 2,100 (1) 07/22/97 18,500 (1) 07/22/97 561 (10) 12/31/97 64.4 (10) 03/02/98 75.9 (10) 06/01/98 3,200 (1) 07/21/98 15,000 (1) 07/21/98 12,400 (12) 08/17/98 OTHERS Mary J. Rakoczy 5 (10) 10/15/96 8.42 (10) 05/01/97 5.79 (10) 02/17/98 .6276 (10) 03/02/98 .7816 (10) 06/01/98 Douglas Wilburne 1 (15) 06/01/97 .0061 (10) 03/02/98 .0071 (10) 06/01/98 John Dean Wilburne (Son) 1.16 (10) 02/17/98 1.21 (10) 03/16/98 .02 (10) 06/01/98 Douglas James Wilburne (Son) 1.16 (10) 02/17/98 1.21 (10) 03/16/98 .02 (10) 06/01/98 FOOTNOTES: (1) Stock option award. (2) Acquisition pursuant to the exercise of stock options. (3) Disposition pursuant to a bona fide gift. (4) Cashless exercise of stock options. (5) Conversion of derivative security. (6) The securities were purchased through a 401(k) plan. (7) Shares withheld for tax purposes in connection with the vesting of restricted stock. (8) Open market purchase. (9) Open market sale. (10) Shares purchased through the Dividend Reinvestment Plan. (11) Shares sold back to AMP. (12) Award of performance restricted shares. (13) Acquisition of vested performance shares. (14) Acquired pursuant to a bona fide gift. (15) Company award. MISCELLANEOUS INFORMATION CONCERNING PARTICIPANTS Except as described in this Schedule A or in the Consent Revocation Statement, none of the participants nor any of their respective affiliates or associates (together, the "Participant Affiliates"), (i) directly or indirectly beneficially owns any shares of Common Stock of the Company or any securities of any subsidiary of the Company or (ii) has had any relationship with the Company in any capacity other than as a stockholder, employee, officer and director. Furthermore, except as described in this Schedule A or in the Consent Revocation Statement, no Participant Affiliate is either a party to any transaction or series of transactions since January 1, 1997, or has knowledge of any currently proposed transaction or series of transactions, (i) to which the Company or any of its subsidiaries was or is to be a party, (ii) in which the amount involved exceeds $60,000, and (iii) in which any Participant Affiliate had, or will have, a direct or indirect material interest. Except for the employment agreements described in the Consent Revocation Statement, no Participant Affiliate has entered into any agreement or understanding with any person respecting any future employment by the Company or its affiliates or any future transactions to which the Company or any of its affiliates will or may be a party. Except as described in this Schedule A or in the Consent Revocation Statement, there are no contracts, arrangements or understandings by any Participant Affiliate within the past year with any person with respect to the Company's securities. ANNEX 1 FORM OF ALLIEDSIGNAL PROPOSED AMENDMENTS TO THE COMPANY BY-LAWS 1. Proposed Amendment to Section 2.2 of Article II Section 2.2 of Article II of the Company's By-laws is amended, in its entirety, to read as follows: 'The number of directors of the Corporation shall be twenty- eight. This Section 2.2 may be repealed or amended only with the affirmative vote of holders of a majority of the shares of the Corporation entitled to vote thereon.' 2. Proposed Amendment to Section 2.4 of Article II Section 2.4 of Article II of the Company's By-laws is amended by replacing the first sentence thereof with the following: 'Vacancies in the Board, however caused, may be filled by the affirmative vote of a majority of the remaining directors even though less than a quorum of the Board, or by the sole remaining director, provided, however, that any vacancies in the Board created by an amendment by shareholders of these By-laws shall be filled only by the affirmative vote of holders of a majority of the shares entitled to vote thereon. The preceding sentence may be repealed or amended only with the affirmative vote of holders of a majority of the shares entitled to vote thereon.' 3. Proposed Amendment to Section 1.7.2 of Article 1 Section 1.7.2 of Article 1 is amended by adding the following sentence after the last sentence thereof: 'Notwithstanding anything contained in any other provision of these By-laws, any shareholder seeking to nominate candidates for election to the Board pursuant to the shareholder action by written consent need not comply with any advance notification provisions contained in these By-laws, including, without limitation, Section 1.5.3 hereof. The preceding sentence may be repealed or amended only with the affirmative vote of holders of a majority of the shares entitled to vote thereon.' PRELIMINARY COPY SUBJECT TO COMPLETION, DATED AUGUST 13, 1998 [FORM OF CONSENT REVOCATION CARD -- WHITE] AMP INCORPORATED THIS REVOCATION OF CONSENT IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF AMP INCORPORATED IN OPPOSITION TO THE SOLICITATION BY ALLIEDSIGNAL CORPORATION The undersigned, a holder of shares of Common Stock, without par value (the "Common Stock"), of AMP Incorporated ("AMP"), acting with respect to all of the shares of Common Stock held by the undersigned, hereby revokes any and all consents that the undersigned may have given with respect to each of the following proposals: THE BOARD OF DIRECTORS OF AMP UNANIMOUSLY RECOMMENDS THAT YOU "REVOKE CONSENT" ON EACH PROPOSAL SET FORTH BELOW. PLEASE SIGN, DATE AND MAIL THIS CONSENT REVOCATION CARD TODAY. 1. Proposal made by AlliedSignal to amend AMP's By-laws to require that AMP's Board of Directors consist of 28 members, more than double its current size (the "Board-Packing Proposal"). (For complete text, see AlliedSignal Proposal 1 in AMP's Consent Revocation Statement.) [ ] REVOKE CONSENT [ ] DO NOT REVOKE CONSENT [ ] ABSTAIN 2. Proposal made by AlliedSignal to amend AMP's By-laws so that AMP's shareholders may fill vacancies in AMP's Board of Directors, including the seventeen vacancies which would be created if AlliedSignal's Board-Packing Proposal is approved. (For complete text, see AlliedSignal Proposal 2 in AMP's Consent Revocation Statement.) [ ] REVOKE CONSENT [ ] DO NOT REVOKE CONSENT [ ] ABSTAIN 3. Proposal made by AlliedSignal to amend AMP's By-laws to specify that the advance notice provisions of AMP's By-laws are not applicable to nominations of directors for election by written consent of shareholders. (For complete text, see AlliedSignal Proposal 3 in AMP's Consent Revocation Statement.) [ ] REVOKE CONSENT [ ] DO NOT REVOKE CONSENT [ ] ABSTAIN 4. Proposal made by AlliedSignal to elect the following seventeen directors and executive officers of AlliedSignal to fill the seventeen vacancies on AMP's Board of Directors which would be created if AlliedSignal's Board-Packing Proposal is approved: Hans W. Becherer, Lawrence A. Bossidy, Ann M. Fudge, Paul X. Kelley, Peter M. Kreindler, Robert P. Luciano, Robert B. Palmer, Russell E. Palmer, Frederic M. Poses, Donald J. Redlinger, Ivan G. Seidenberg, Andrew C. Sigler, John R. Stafford, Thomas P. Stafford, Richard F. Wallman, Robert C. Winters and Henry T. Yang (collectively, the "AlliedSignal Nominees"). (For complete text, see AlliedSignal Proposal 4 in AMP's Consent Revocation Statement.) [ ] REVOKE CONSENT [ ] DO NOT REVOKE CONSENT [ ] ABSTAIN INSTRUCTIONS: TO REVOKE CONSENT, WITHHOLD REVOCATION OF CONSENT OR ABSTAIN FROM CONSENTING TO THE ELECTION OF ALL THE ALLIEDSIGNAL NOMINEES, CHECK THE APPROPRIATE BOX. IF YOU WISH TO REVOKE THE CONSENT TO THE ELECTION OF CERTAIN OF SUCH NOMINEES, BUT NOT ALL OF THEM, CHECK THE "REVOKE CONSENT" BOX AND WRITE THE NAME OF EACH SUCH PERSON AS TO WHOM YOU DO NOT WISH TO REVOKE CONSENT IN THE FOLLOWING SPACE: ____________________________________________________ 5. Proposal made by AlliedSignal to repeal each provision of AMP's By- laws or any amendment(s) to AMP's By-laws adopted subsequent to July 22, 1998 and prior to the effectiveness of the actions sought by AlliedSignal in Proposals 1 through 4 above. (For complete text, see AlliedSignal Proposal 5 in AMP's Consent Revocation Statement.) [ ] REVOKE CONSENT [ ] DO NOT REVOKE CONSENT [ ] ABSTAIN IF NO DIRECTION IS MADE WITH RESPECT TO ONE OR MORE OF THE FOREGOING PROPOSALS, OR IF YOU MARK EITHER THE "REVOKE CONSENT" OR "ABSTAIN" BOX WITH RESPECT TO ONE OR MORE OF THE FOREGOING PROPOSALS, THIS REVOCATION CARD WILL REVOKE ALL PREVIOUSLY EXECUTED CONSENTS WITH RESPECT TO SUCH PROPOSALS. Please sign your name below exactly as it appears hereon. If shares are held jointly, each shareholder should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person. Dated: __________________, 1998 __________________________ Signature: Title: ____________________________ Signature: (if held jointly) Title: PLEASE SIGN, DATE AND RETURN THIS CONSENT REVOCATION CARD PROMPTLY -----END PRIVACY-ENHANCED MESSAGE-----