===========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report - August 5, 1998
(Date of earliest event reported)
ALLIEDSIGNAL INC.
(Exact name of Registrant as specified in its Charter)
Delaware 001-08974 22-2640650
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction Identification Number)
of incorporation)
101 Columbia Road, P.O. Box 4000, Morristown, New Jersey 07962-2497
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (973) 455-2000
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ITEM 5. OTHER EVENTS.
On August 4, 1998, AlliedSignal Inc. announced its intention to
commence, within five business days, a tender offer for all of the
outstanding shares of AMP Incorporated at $44.50 per share or approximately
$9.8 billion in the aggregate.
ITEM 7. EXHIBITS.
Exhibit No. Description
- ---------- -----------
99.1 Text of Press Release, dated August 4, 1998, issued by
AlliedSignal Inc.
99.2 Presentation to Analysts, August 4, 1998, used by AlliedSignal
Inc. related to the proposed merger.
99.3 Complaint, dated August 4, 1998, filed in the United States
District Court for the Eastern District of Pennsylvania by
AlliedSignal Corporation regarding AlliedSignal Corporation v.
AMP, Inc. (C.A. No. 98-CV-4058).
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: August 5, 1998 AlliedSignal Inc.
(Registrant)
By: /s/ Richard F. Wallman
----------------------
Richard F. Wallman
Senior Vice President and
Chief Financial Officer
Exhibit Index
-------------
Exhibit No. Description
- ---------- -----------
99.1 Text of Press Release, dated August 4, 1998, issued by
AlliedSignal Inc.
99.2 Presentation to Analysts, August 4, 1998, used by AlliedSignal
Inc. related to the proposed merger.
99.3 Complaint, dated August 4, 1998, filed in the United States
District Court for the Eastern District of Pennsylvania by
AlliedSignal Corporation regarding AlliedSignal Corporation v.
AMP, Inc. (C.A. No. 98-CV-4058).
EXHIBIT 99.1
Contact: Mark Greenberg
(973) 455-5445
AlliedSignal Offers $9.8 Billion, Or $44.50 Per Share, For AMP Incorporated
MORRIS TOWNSHIP. New Jersey, August 4, 1998 -- AlliedSignal Inc.
(NYSE: ALD) said today that it intends to commence a tender offer for all
of the approximately 220 million outstanding shares of AMP Incorporated
(NYSE: AMP) at $44.50 per share in cash, a premium of more than 55%.
The offer will commence within the next five business days. The
AlliedSignal Board of Directors has unanimously approved the offer.
AlliedSignal Chairman and Chief Executive Officer Larry Bossidy said,
"We are announcing this offer after our requests for discussions were
ignored by AMP management.
"We are confident the combination of the two companies can achieve
substantial benefits for all concerned, and we have made an effort to meet
with AMP management in order to outline these benefits in friendly
discussions. Their failure to respond thus far should not prevent us from
working together to achieve these benefits as quickly as possible.
"Let me be clear. AlliedSignal prefers to conclude a negotiated
transaction with AMP, and we are prepared to be flexible with respect to
the nature and amount of consideration and the terms and conditions of an
agreement.
"However, we are also determined that this process now go forward. If
AMP is not responsive to our offer, we are prepared to initiate a consent
solicitation to elect a majority of the directors of the Company who will
be responsive to our proposal and the delivery of value to AMP shareowners.
We are commencing litigation in Federal District Court for the Eastern
District of Pennsylvania to assure that AMP shareowners will not be denied
the opportunity to receive, consider and act upon our offer.
"AlliedSignal will bring a well managed, larger, financially stronger,
more diverse company together with AMP at a crucial time. This combination
will address positively all of the considerations that AMP's management and
Board must evaluate under Pennsylvania law to ensure the combination will
be advantageous to all their stakeholders.
"In particular, we can offer employees a wide range of career
opportunities and the benefit of world class education programs. This is of
great advantage when a company is going through the kind of adjustments
that AMP is experiencing, including the recent Pennsylvania plant closings
and layoffs announced by AMP.
"AlliedSignal has annual revenues of $15 billion, with operations in
the aerospace, engineered materials and automotive industries. With 26
consecutive quarters of earnings growth of 14% or more, AlliedSignal has
demonstrated its ability to achieve growth on a consistent basis.
"Since we began our Six Sigma program more than six years ago, our
earnings per share have grown at a compound average annual rate of 21% and
our market value has grown more than six-fold, from less than $4 billion to
more than $25 billion. The combination of the two companies will assure
that AMP has the management and financial support necessary to achieve
long-term success in its business. For AlliedSignal shareowners, AMP will
represent a significant new business that will better position us to
achieve our objective of consistent earnings growth."
AlliedSignal stated that financing for its offer is available.
The tender offer will be subject to customary terms and conditions.
This news release does not constitute an offer to purchase any securities,
nor solicitation of a proxy, consent or authorization for or with respect
to a meeting of the shareowners of AlliedSignal Inc. or AMP or any action
in lieu of a meeting. Any solicitations will be made only pursuant to
separate materials in compliance with the requirements of applicable
federal and state securities laws.
AlliedSignal is an advanced technology and manufacturing company
serving customers worldwide with aerospace and automotive products,
chemicals, fibers, plastics and advanced materials. The company employs
70,500 people worldwide. AlliedSignal is a component of the Dow Jones
Industrial Average and Standard and Poor's 500 Index, and it is included in
Fortune magazine's lists of the "Most Admired Companies" and "Best Places
to Work." Additional information on the company is available on the World
Wide Web at http://www.alliedsignal.com/.
- ---------------------------------------------------------------------------
This release contains forward-looking statements as defined in Section 21E
of the Securities Exchange Act of 1934, including statements about future
business operations, financial performance and market conditions. Such
forward-looking statements involve risks and uncertainties inherent in
business forecasts.
- ---------------------------------------------------------------------------
EXHIBIT 99.2
A NEW SEGMENT
Why? More Diversity - Ability to Deliver
Consistent Earnings Growth
Characteristics of Search:
- - Strong Fundamental Growth
- - Good Margins
- - Not Capital Intensive
- - Leadership Position
- - Manufacturing and Technology Base
Broadening Our Portfolio Makes Sense
AMP OVERVIEW
Businesses
----------
[SEVEN PHOTOS OF ELECTRICAL Electrical Connection Devices for
CONNECTION DEVICES] the Following Industries:
- Consumer & Industrial
- Telecommunications
- Automotive
- Personal Computers
1998 Statistics Strengths
--------------- ---------
Sales $5.4B - Leading Market Position
Op. Margins ~9% - Global
EPS $1.50 - Diverse Markets
Market Cap ~6.5B - Strong Technical Capabilities
World's Leading Manufacturer of Electrical & Electronic Connection Devices
TERMINALS & CONNECTORS ("T&C") MARKET
Industry Growth Rate
$25B Market 5 Year Average - 9%
[BAR GRAPH SHOWING INDUSTRY GROWTH RATE]
1994 - 13%
1995 - 17%
1996 - 5%
1997 - 8%
1998 - 4%
Source: Bishop & associates, inc.
Large Growing Industry
TERMINALS & CONNECTORS INDUSTRY
Sales by Industry Sales by Region
----------------- ---------------
[PIE GRAPH SHOWING SALES BY INDUSTRY] [PIE GRAPH SHOWING SALES BY REGION]
Industrial & Consumer - 45% North America - 38%
Computer/Peripherals - 25% Asia - 30%
Telecom - 15% Europe - 26%
Automotive - 15% ROW - 6%
$25B Market
- Value Added Market an Additional $25B - $30B
Diverse And Global
AMP'S SHARE OF T&C SALES
[BAR GRAPH SHOWING EACH COMPANY'S SHARE OF
TERMINAL AND CONNECTOR SALES]
AMP 20%
Molex 6%
Framatome 4%
Berg 3%
Thomas & Betts 3%
Amphenol 3%
3M 3%
Leading Global Position In Fragmented Market
AMP'S REVENUE COMPOSITION
1998 = $5.4B
Sales by Industry Sales by Region
- ----------------- ---------------
[PIE GRAPH SHOWING SALES [PIE GRAPH SHOWING SALES
BY INDUSTRY] BY REGION]
Consumer & Industrial - $1.6B Americas - 50%
Automotive - $1.4B Europe - 30%
Telecom - $1.4B Asia/Pacific - 20%
Personal Computer - $1.0B
- 77% T&C; 14% Value Added; 9% M/A - Com
- Over 15,000 Patents Issued or Pending
- 90,000 Customers in 145 Countries
Wide Range Of Product Offerings To Diverse Industries
AMP OPPORTUNITIES
Peer Revenue Comparison
- -----------------------
(1998 Projected Growth)
[BAR GRAPH SHOWING
A COMPARISON OF AMP'S
PROJECTED 1998 GROWTH WITH
THOSE OF OTHER COMPANIES]
AMP (5.8%) Peer Group Margins
------------------
Amphenol 3% 1994 1998 Chg.
---- ---- ----
Berg 5%
AMP 16.1% 9.4% (6.7 pts)
Molex 6%
Peer Avg. 12.1% 14.6% +2.5 pts
Thomas & Betts 8%
Amphenol 15.0% 17.0% +2.0 pts
Peer Avg. 5.5%
Molex 16.3% 16.3% --
Thomas & Betts 9.4% 12.5% +3.1pts
Berg 7.8% 12.6% +4.8pts
Underperforming Its Peers
AMP OPPORTUNITIES
Market Value ($B)
[LINE GRAPH COMPARING THE MARKET CAPITALIZATION OF AMP TO THE SUM OF THE
MARKET CAPITALIZATIONS OF ITS INDUSTRY PEERS AT THREE MONTH INTERVALS
BEGINNING JUNE 1996 AND ENDING JUNE 1998 (ALL DOLLAR AMOUNTS ARE
APPROXIMATE). THE GRAPH ALSO INCLUDES THE COMPOUND ANNUAL GROWTH RATES OF
AMP (-13%) AND OF THE SUM OF ITS INDUSTRY PEERS (11%) OVER THE SAME
PERIOD.]
Peer Group 6.6B 7.5B 7.9B 7.6B 9.3B 10.8B 10.1B 10.1B 8.1B
AMP 8.8B 8.5B 8.4B 7.6B 9.2B 11.8B 9.3B 9.6B 6.6B
6/96 9/96 12/96 3/97 6/97 9/97 12/97 3/98 6/98
Market Recognizes Need For Change
ALD PERFORMANCE
Earnings Per Share Market Value
- ------------------ ------------
[LINE GRAPH SHOWING GROWTH IN [LINE GRAPH COMPARING ALD'S
ACTUAL EARNINGS PER SHARE FOR MARKET VALUE GROWTH VS. THE S&P
1992 THROUGH 1997, INCLUDING 500 MARKET VALUE GROWTH FOR 1990
AN ESTIMATE FOR 1998. EARNINGS TO 1998. OVER THIS PERIOD, ALD'S
PER SHARE IS EXPECTED TO INCREASE MARKET VALUE HAS INCREASED SIX FOLD
FROM $0.96 IN 1992 TO APPROXIMATELY FROM $4 BILLION $25 BILLION WHILE
$2.30 TO $2.34 IN 1998.] THE MARKET VALUE OF THE S&P 500
HAS INCREASED 3.4 FOLD.]
26 Qtrs of 14%+ Growth
Consistency Drives Market Value
ALD PRODUCTIVITY PERFORMANCE
Total Productivity Cost Productivity
- ------------------ -----------------
[LINE GRAPH SHOWING TOTAL [GRAPH SHOWING THE COMPONENTS OF COST PRODUCTIV-
PRODUCTIVITY AND THE BREAK- ITY FROM 1992 TO 1997. IN 1992, CENSUS, REPO-
DOWN BETWEEN GROWTH PRODUC- SITIONING AND MATERIAL SAVINGS COMPRISED MOST
TIVITY AND COST PRODUCTIVITY OF COST PRODUCTIVITY. OVERTIME COST PRODUCTIVI-
FROM 1992 TO 1997.] TY HAS INCREASINGLY COME FROM SIX SIGMA SAVINGS
COMPARED TO CENSUS, REPOSITIONING AND MATEIRAL
SAVINGS.]
Total Productivity
Average 5.9%
Since '92
1990 1998
---- ----
Sales/Employees $117K $200K [UP ARROW] 71%
Suppliers [MORE THAN] 10,000 [LESS THAN] 3,000 [DOWN ARROW] 70%
Proven Record Of Productivity
ALD SIX SIGMA JOURNEY
Manufacturing Quality vs. COPQ ALD Operating Margins
- ------------------------------ ---------------------
[LINE GRAPH SHOWING IMPROVEMENT [LINE GRAPH SHOWING ALD OPERATING
IN THE DEFECT RATE OF MANUFACTUR- MARGINS INCREASING FROM 5% IN 1991
ING PROCESSES FROM 1992 (2 SIGMA) TO 13% IN 1998, AN INCREASE OF 800
TO 1998 (4+SIGMA), RESULTING IN BASIS POINTS]
COST SAVINGS OF $2 BILLION OVER
THAT PERIOD.]
Significant Progress, Trained Resources
ESTIMATED MARGIN IMPROVEMENT
[BAR GRAPH]
AMP
$4.2B $5.4B +8% Sales Growth After 1999 $6.5B
Op. Income 15% 9% 18% Cost Takeout
$630M $495M $1170M
SG&A 18% 21% - Corporate Overhead 17% $185M
$760M $1130M - Shared Services $1105M
Cost of 67% 70% - Six Sigma/Productivity 65% $280M
Goods Sold $2810M $3775M - Purchasing $4225M
- Plant Rationalization
1993-1995 1998 2001
AVG
Growth & Productivity Will Improve Margins
Beyond Historic Level
AMP OPERATING MARGIN EXPANSION
[BAR GRAPH SHOWING AN ACTUAL AND
PROJECTED OPERATING MARGIN EXPANSION]
Productivity &
Synergies
15% 9% +2% +4% +3% 18%
'93 - '95 1998 Volume/ Manufacturing Corporate 2001
Average Price Productivity Overhead &
Shared Svcs.
Growth & Productivity Will Improve Margins
Beyond Historic Levels
ALD AND AMP
What AMP Brings to ALD What ALD Brings to AMP
- ---------------------- ----------------------
- - High Growth Industry - Strong Management Team
- - Industry Leadership - Productivity
- - Global - Six Sigma
- - Product Differentiation - Size and Scale
- - Technological Leadership - Financial Consistency
Ideal Combination
ALD AND AMP - $21B
1998 Pro-Forma
[PIE GRAPH]
Connectors $5.4
Spec Chem & Electronic Solutions $2.4
Performance Polymers $2.0
Aerospace Systems $4.9
Transportation Products $2.5
Turbine Technologies $3.9
- - Broad Product Offering - High Growth
- - Diverse Customer Base - High Margin Businesses
- - Globally Positioned - Consistency
Breadth Of Products And Geographical Diversity Drives Consistency
THE DEAL STRUCTURE
- - Cash Tender - $44.50 Per Share
- - Funded by:
-- Debt
-- Internally Generated Cash Flow
-- Asset Sales
-- Secondary Equity Offering
- - Anticipated Closing - 12/31/98
Funding Available
EARNINGS PER SHARE
[BAR GRAPH SHOWING THE OVERALL POSITIVE PROJECTED EFFECTS OF EACH OF ALD'S
BUSINESS GROWTH, THE ADDITION OF THE AMP BUSINESS, THE LOSS OF GOODWILL,
THE LOSS DUE TO FINANCING AND THE GAINS ON DISPOSITIONS ON THE EARNINGS PER
SHARE OF A COMBINED ALD/AMP]
Equity
------
Debt
$2.30 - $2.34 +$0.30 - $0.35 +$0.83 -$0.32 -$0.78 +$0.27 $2.60 - $2.65
1998 ALD Business AMP Goodwill Financing Gains on 1999
Growth Business Dispositions
[LINE GRAPH SHOWING A COMPARISON OF THE PROJECTED GROWTH RATE OF EARNINGS
PER SHARE OF ALD AND THE COMBINED ALD/AMP FROM 1998 TO 2001]
Combined Includes
Disposition Gains
ALD $2.30 -$2.34 13% 15% 15%
COMBINED $2.30 -$2.34 13% 15% 18%
1998 1999 2000 2001
No Net Dilution
FREE CASH FLOW
[LINE GRAPH SHOWING A PROJECTED FREE CASH FLOW FOR
ALD AND THE COMBINED ALD/AMP FROM 1998 TO 2001]
Combined ALD
-------- ---
1998 $500 $500
1999 $500 $625
2000 $800 $780
2001 $1,300 $980
Improves Cash Flow
ALD DEBT/CAPITAL
[BAR GRAPH SHOWING A PROJECTION OF ALD'S DEBT-TO-CAPTIAL RATIO
FROM DECEMBER 1998 TO DECEMBER 2001]
67%
[Increase [Decrease resulting from 47%
resulting contemplated 1998 asset
from the sales ($2B), proceeds of 39%
incurrence a contemplated 1998 29%
21% of $10.2B equity offering ($1.5B),
of debt] free cash flow and
suspension of share
repurchase]
12/98 12/98 12/99 12/00 12/01
ALD Combined
Manageable Transaction
PORTFOLIO IMPROVEMENT
1999 1999 2001
(Without AMP) (With AMP) (Includes AMP)
[PIE GRAPH] [PIE GRAPH] [PIE GRAPH]
High Growth 67% High Growth 75% High Growth 85%
High Margin High Margin High Margin
$16.5B $22B $26B
Accelerates Transformation
CONTINUED EVOLUTION OF ALLIED SIGNAL
- - Market Leadership in High Margin Growth Businesses
- - Broader, More Global, More Diverse
- - Breadth of Markets
- - Cost Take-out Opportunities
- - High Margin, High Growth Segments
- - Enhanced Ability For Financial Consistency
ALD And AMP Combine To Form A Premier Company
EXHIBIT 99.3
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
- ------------------------------------------x
ALLIEDSIGNAL CORPORATION, :
a Delaware Corporation,
P.O. Box 3000 :
Morristown, NJ 07962-2496
Plaintiff, :
- against - : C.A. No. 98-CV-4058
AMP, INC., :
a Pennsylvania Corporation,
470 Friendship Road :
Harrisburg, PA 17111
Defendant. :
- ------------------------------------------x
COMPLAINT FOR
DECLARATORY AND INJUNCTIVE RELIEF
---------------------------------
Plaintiff AlliedSignal Corporation ("AlliedSignal"), by its
undersigned attorneys, as and for its Complaint, alleges upon knowledge
with respect to itself and its own acts, and upon information and belief as
to all other matters, as follows:
Nature of the Action
--------------------
1. AlliedSignal has today announced that it will commence a
tender offer for the stock of defendant AMP, Inc. ("AMP") at $44.50 per
share, a price representing a premium of approximately 50% over the closing
trading price of AMP common stock on August 3, 1998. This action for
injunctive and declaratory relief is brought to ensure that AlliedSignal's
statutory and constitutional rights to make its tender offer to AMP
stockholders and to exercise its rights under the federal proxy rules are
protected, while also ensuring the rights of all AMP stockholders to
consider AlliedSignal's offer. AlliedSignal also seeks to prevent AMP from
manipulating or otherwise subverting the process of corporate democracy by
impermissibly taking action to frustrate the consent solicitation that
AlliedSignal will have to conduct to gain majority representation on the
AMP Board of Directors if AMP attempts to obstruct AlliedSignal's tender
offer. This action also seeks relief declaring AMP's so-called "dead hand"
poison pill to be inapplicable or legally impermissible.
Parties
-------
2. Plaintiff AlliedSignal is a Delaware corporation with its
principal executive offices in Morristown, New Jersey. AlliedSignal is a
manufacturing company with operations in the aerospace, automotive and
engineered materials businesses. AlliedSignal's 1997 revenues were nearly
$15 billion. AlliedSignal is the beneficial owner of 100 shares of AMP
common stock.
3. Defendant AMP is a Pennsylvania corporation with its principal
executive offices in Harrisburg, Pennsylvania. AMP designs, manufactures
and markets electronic, electrical and electro-optic connection devices,
interconnection systems and connector-intensive assemblies.
Jurisdiction and Venue
----------------------
4. This Court has jurisdiction over this action pursuant to 28
U.S.C. ss.ss. 1331, 1332 and 1367. The amount in controversy is in excess
of $75,000.
5. Venue is proper in this District under 28 U.S.C. ss. 1391 (b)
and (c).
AlliedSignal's Offer
--------------------
6. On July 29, 1998, AlliedSignal Chairman and Chief Executive
Officer ("CEO") Larry Bossidy telephoned AMP's CEO and President, William
J. Hudson, to determine whether AMP would be interested in pursuing a
business combination with AlliedSignal. Mr. Hudson was unavailable to speak
with Mr. Bossidy, and he did not thereafter return Mr. Bossidy's telephone
call.
7. On July 30, 1998, Mr. Bossidy sent a letter to Mr. Hudson
proposing a combination of AlliedSignal and AMP. The letter stated that
AlliedSignal was prepared to offer $43.50 per share in cash for all of
AMP's outstanding shares, at a premium of approximately 50% over the market
value.
8. AMP has not responded to Mr. Bossidy's July 30 letter.
9. On August 4, 1998, AlliedSignal announced that it will
commence within five (5) business days a tender offer for the stock of
defendant AMP at $44.50 per share (the "Tender Offer"), which, as stated in
Mr. Bossidy's July 30, 1998 letter, represents approximately a 50% premium
over the closing trading price of AMP common stock on August 3, 1998. The
Tender Offer gives AMP shareholders the opportunity to accept the Offer if
they determine it is in their best interests. Upon consummation of the
Tender Offer, AlliedSignal intends to acquire the remaining shares of AMP
in a second-step merger in which AMP shareholders will receive $44.50 in
cash for each AMP share they own.
10. AlliedSignal's Tender Offer and second-step merger cannot be
consummated unless the AMP Board -- voluntarily or by direction of a court
- -- removes or makes inapplicable various anti-takeover devices, including
AMP's "poison pill" and certain provisions of the Pennsylvania Business
Corporation Law ("PBCL").
11. In light of AMP's failure to respond to AlliedSignal's July
30, 1998 letter, the current AMP Board cannot be expected to facilitate
AlliedSignal's Tender Offer and second-step merger, but can be expected,
instead, to maintain AMP's anti-takeover devices in place and actively
oppose the Tender Offer and merger. For this reason, AlliedSignal is
preparing to conduct a consent solicitation (the "Consent Solicitation") to
gain majority representation on the AMP Board of Directors by electing
individuals nominated by AlliedSignal who will support a sale of AMP to
AlliedSignal, subject to their fiduciary duties to AMP shareholders.
AMP's Anti-Takeover Devices
---------------------------
12. The "Dead Hand" Poison Pill. Foremost among the numerous
anti-takeover devices at AMP's disposal is its shareholders' "rights plan,"
better known as a "poison pill" (the "Poison Pill"). As part of the Poison
Pill, the Board authorized and declared a dividend of one common share
purchase right (a "Right") per outstanding share of common stock of AMP,
payable to shareholders of record as of the close of business on November
6, 1989.
13. The Poison Pill provides that the Rights do not become
exercisable until ten business days following the first public announcement
that a person (an "Acquiring Person") has acquired beneficial ownership of
20% or more of the outstanding shares of AMP common stock (the "Stock
Acquisition Date"), at which time each holder of a Right, other than an
Acquiring Person, is entitled, upon exercise of the Right, to receive
common stock having a market value equal to two times the Purchase Price.
The effect of this provision (the "Flip-In Provision") thus would be a
massive dilution of the value of the holdings of an unwanted acquiror like
AlliedSignal.
14. The Dead Hand Restriction. The Board may redeem the Poison
Pill until 10 business days after a person becomes an Acquiring Person. The
Board's ability to redeem the Rights, however, is purportedly restricted by
a provision of the Poison Pill that serves no purpose other than to
entrench the current Board (the "Dead Hand Restriction").
15. Under the Dead Hand Restriction, redemption of the Poison
Pill requires the approval of a majority of Continuing Directors (i.e.,
members of the Board who are not Acquiring Persons or representatives of an
Acquiring Person, and either (x) were directors prior to the institution of
the Poison Pill or (y) are nominated by a majority of Continuing Directors)
if effected (i) after a person becomes an Acquiring Person but prior to the
expiration of a ten business day period, or (ii) after a change (resulting
from a proxy or consent solicitation) in a majority of the directors in
office at the time of the commencement of a proxy or consent solicitation.
Furthermore, the Dead Hand Restriction provides that the Poison Pill can be
amended only by Continuing Directors.
16. Under the Dead Hand Restriction, directors, other than
Continuing Directors, elected pursuant to a consent or proxy solicitation
in which an Acquiring Person (or a person who intends to become an
Acquiring Person) participates, are purportedly without power or authority
to redeem the Rights so that the Tender Offer may go forward.
17. Because the Dead Hand Restriction purports to prevent
newly-elected, insurgent-nominated directors from redeeming the Poison Pill
and thus removing a key obstacle to the accomplishment of the very purpose
for which they were elected, the Dead Hand Restriction effectively
disenfranchises shareholders. In effect, it denies the shareholders of AMP
the opportunity to replace the current Board and prevent any person
intending to become an Acquiring Person, such as AlliedSignal, from
soliciting votes to replace the current Board. It represents an intentional
effort by the Board to manipulate the corporate machinery so as to prevent
the effectiveness of a shareholder vote.
18. The Pennsylvania Anti-Takeover Statutes. Among other
provisions, Defendant AMP also has the anti-takeover protections PBCL ss.
ss. 2551-2556 (the "Business Combination Statute").
19. Under the Business Combination Statute, an interested
shareholder cannot engage in a business combination with AMP for five years
unless the acquisition of the shares or the business combination is
approved by the AMP Board before an "Interested Shareholder" becomes the
beneficial owner, directly or indirectly, of at least 20% of AMP's shares.
20. The Business Combination Statutes will delay or make more
difficult acquisitions or changes of control of AMP, have the effect of
preventing changes in the management of AMP, and make it more difficult to
accomplish transactions which AMP shareholders may otherwise deem to be in
their best interests.
21. Fixing the Consent Solicitation Record Date. AlliedSignal
cannot obtain shareholder consents to its proposals without a record date
for the determination of the shareholders entitled to vote on the
proposals. AMP's by-laws (the "By-laws") provide that any shareholder
seeking to have shareholders take action by consent must, by written
notice, request that the Board fix a record date. The By-laws require the
Board to fix the record date no later than 10 days after receipt of the
request. (If not fixed within 10 days, the record date will be the day on
which the first consent is received by the company.)
22. It is anticipated that the Board will seek to delay
shareholder consent action on AlliedSignal's proposals by fixing a record
date outside the required time period to impede its shareholders from
exercising their franchise.
First Claim for Relief
----------------------
(Declaratory Judgment and Injunctive Relief)
23. Plaintiff repeats and realleges the allegations contained in
each of the preceding paragraphs as if fully set forth herein.
24. Fixing a record date beyond the required ten (10) days would
violate AMP's Articles and By-laws and constitute an illegal interference
with the shareholder franchise, in violation of the PBCL and fundamental
principles of corporate governance.
25. Plaintiffs have no adequate remedy at law.
Second Claim for Relief
-----------------------
(Declaratory Judgment)
26. Plaintiff repeats and realleges the allegations contained in
each of the preceding paragraphs as if fully set forth herein.
27. The Dead Hand Restriction is invalid per se under
Pennsylvania statutory law, in that it purports to limit the discretion of
future Boards of AMP by denying any directors other than the Continuing
Directors the power or authority to redeem the Poison Pill so that the
Tender Offer and Merger may go forward. PBCL ss. 1721 requires that any
such limitation on Board discretion be set forth in a by-law adopted by the
shareholders. Since the shareholders of AMP have adopted no such by-law
provision, the Board was without power to so limit the discretion of future
Boards of AMP by adopting the Dead Hand Restriction.
28. Moreover, PBCL ss. 1729 provides that unless otherwise
provided in a by-law adopted by the shareholders, every director shall be
entitled to one vote. The Dead Hand Restriction creates different classes
of directors with different voting rights -- those who have the power to
redeem the Poison Pill, and those who do not. Since the shareholders of AMP
have adopted no by-law provision creating such distinctions in the voting
powers of directors, the Board was without power to adopt the Dead Hand
Restriction.
29. Additionally, the Dead Hand Restriction is invalid under
AMP's By-laws. Under Section 2.1 of AMP's By-laws, the power to manage the
business and affairs of the Corporation is broadly vested in its duly
elected board of directors. Insofar as the Dead Hand Restriction purports
to restrict the power of AMP's Board to redeem or amend the Poison Pill, it
conflicts with Section 2.1 of AMP's By-laws and is therefore of no cause or
effect.
30. Furthermore, the Dead Hand Restriction purposefully
interferes with the shareholder voting franchise without any compelling
justification. Moreover, the Dead Hand Restriction is an unreasonable and
disproportionate defensive measure, because it either precludes or
materially abridges the shareholders' rights to receive tender offers and
wage proxy contests to replace the Board.
Third Claim for Relief
----------------------
(Declaratory Judgment)
31. Plaintiff repeats and realleges the allegations contained in
each of the preceding paragraphs as if fully set forth herein.
32. To the extent that the Dead Hand Restriction and other
anti-takeover devices that preclude tender offers and consent solicitations
are permitted under Pennsylvania law, such law is unconstitutional under
the Commerce Clause because it impermissibly burdens interstate commerce
far in excess of local benefits. The Dead Hand Restriction renders futile
the Consent Solicitation and other contests for corporate control, because
the shareholders will be powerless to elect a board that is both willing
and able to accept an insurgent's bid. If Pennsylvania law is deemed to
permit the Dead Hand Restriction, such law thus gives a Pennsylvania
corporation's pre-existing board of directors a de facto veto power over
tender offers and mergers, and therefore thwarts shareholder democracy and
impermissibly burdens interstate commerce.
33. To the extent the Dead Hand Restriction is permissible under
Pennsylvania law, such law injures and will continue to injure Plaintiff
because it deprives Plaintiff of its right to proceed with its Proposed
Business Combination.
Fourth Claim for Relief
-----------------------
(Declaratory Judgment)
34. Plaintiff repeats and realleges the allegations contained in
each of the preceding paragraphs as if fully set forth herein.
35. To the extent that the Dead Hand Restriction and other
anti-takeover devices that preclude tender offers and consent solicitations
are permitted under Pennsylvania law, such law is preempted by the Williams
Act and thereby violates the Supremacy Clause of the United States
Constitution. It frustrates the full purpose and objectives of Congress in
enacting the Williams Act by: (a) giving intransigent management the
ability to defeat a noncoercive proposal without a vote by shareholders,
(b) impermissibly tilting the balance between management and a potential
acquirer in the context of a noncoercive proposal, and (c) depriving
Plaintiff of its right to have AMP shareholders consider the Proposed
Business Combination under federal law.
36. To the extent the Dead Hand Restriction is permissible under
Pennsylvania law, such law injures and will continue to injure Plaintiff
because it deprives Plaintiff of its right to proceed with its Proposed
Business Combination as contemplated by the Williams Act and other
applicable law.
Fifth Claim for Relief
----------------------
(Injunctive Relief)
37. Plaintiff repeats and realleges the allegations contained in
each of the preceding paragraphs as if fully set forth herein.
38. The effect of AMP's anti-takeover devices is to frustrate and
impede the ability of AMP shareholders to decide for themselves whether
they wish to receive the benefits of the AlliedSignal Tender Offer and
proposed second-step merger. These devices unreasonably and inequitably
frustrate and impede the ability of AlliedSignal to proceed with its Tender
Offer and Consent Solicitation. The failure of AMP and its board to (i)
redeem the AMP Poison Pill or to amend the Poison Pill by removing the Dead
Hand Restriction, and (ii) adopt a resolution approving the AlliedSignal
Tender Offer for purposes of the Business Combination Statute is clearly a
breach of their fiduciary duty and thus a violation of Pennsylvania law.
39. Plaintiff has no adequate remedy at law.
WHEREFORE, plaintiff respectfully requests that this Court enter
judgment against Defendant, as follows:
A. Declaring pursuant to the Declaratory Judgment Act, 28 U.S.C.
ss. 2201(a), that:
(a) if the Board should fail to fix a record date for
the Consent Solicitation within 10 days of its receipt of AlliedSignal's
written notice requesting such a record date, the record date for the
Consent Solicitation shall be the date such written notice is delivered to
AMP in accordance with AMP's By-laws;
(b) the fixing of a record date more than ten (10) days
after the date of AlliedSignal's written notice is impermissible because it
would effectively prevent AMP's shareholders from exercising their
franchise;
(c) the Dead Hand Restriction is inapplicable or, to
the extent applicable, is in violation of Pennsylvania law and the
fiduciary duties owed to AlliedSignal and all other AMP shareholders;
(d) to the extent Pennsylvania law authorizes the Dead
Hand Restriction, it (i) constitutes an impermissible burden on interstate
commerce in violation of the Commerce Clause of the United States
Constitution, and (ii) is preempted by the Williams Act and therefore
unconstitutional under the Supremacy Clause of the United States
Constitution; and
(e) AlliedSignal's tender offer and consent
solicitation comply with all applicable laws, obligations and agreements.
B. Preliminarily and permanently enjoining the Defendant, its
directors, officers, partners, employees, agents, subsidiaries and
affiliates, and all other persons acting in concert with or on behalf of
the Defendant directly or indirectly, from:
(a) fixing a record date for determining the
shareholders entitled to vote on the proposals in AlliedSignal's Consent
Solicitation more than ten (10) days after the date of AlliedSignal's
written notice;
(b) increasing the size of AMP's Board and filling the
new seats with Board nominees after commencement of AlliedSignal's Consent
Solicitation;
(c) refusing to redeem AMP's Poison Pill or amending
the Poison Pill so as to make the Rights inapplicable to AlliedSignal's
Tender Offer, and refusing to grant prior approval of the Tender Offer and
Merger for purposes of the Pennsylvania Business Combination Statute;
(d) amending its By-laws to in any way impede the
effective exercise of the stockholder franchise; or
(e) taking any other 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 AlliedSignal's Tender Offer and the
proposals in AlliedSignal's Consent Solicitation, or taking any other
action to thwart or interfere with the Tender Offer or Consent
Solicitation.
C. Granting compensatory damages for all incidental injuries
suffered as a result of defendant's unlawful conduct.
D. Awarding plaintiff the costs and disbursements of this action,
including attorney's fees.
E. Granting plaintiff such other and further relief as the court
deems just and proper.
/s/ Alexander R. Sussman/JAOC
-------------------------------
Alexander R. Sussman
Barry G. Sher
Fried, Frank, Harris, Shriver &
Jacobson
One New York Plaza
New York, NY 10004
(212) 859-8000
and
/s/ Mary A. McLaughlin/JAOC
-------------------------------
Mary A. McLaughlin
George G. Gordon
Dechert, Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
(215) 994-4000
Attorneys for Plaintiff
DATED: August 4, 1998
CERTIFICATE OF SERVICE
----------------------
I hereby certify that I caused this day the foregoing Complaint
for Declaratory and Injunctive Relief to be served on the following by
Federal Express:
Charles Goonrey, Esq.
General Counsel
AMP Incorporated
47 Friendship Road
Harrisburg, PA 17111
/s/ Joseph A. O'Connor
----------------------------
Dated: August 4, 1998 Joseph A. O'Connor, Esq.