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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 37 TO
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
AMENDMENT NO. 2 TO
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
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AMP INCORPORATED
(NAME OF SUBJECT COMPANY)
PMA ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
ALLIEDSIGNAL INC.
(BIDDER)
COMMON STOCK, WITHOUT PAR VALUE
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
(TITLE OF CLASS OF SECURITIES)
031897101
(CUSIP NUMBER OF CLASS OF SECURITIES)
PETER M. KREINDLER, ESQ.
ALLIEDSIGNAL INC.
101 COLUMBIA ROAD
MORRISTOWN, NEW JERSEY 07692
(973) 455-5513
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
Copies to:
ARTHUR FLEISCHER, ESQ.
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
ONE NEW YORK PLAZA
NEW YORK, NEW YORK 10004 - 1980
(212) 859-8120
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SCHEDULE 13D AND 14D-1
CUSIP No. 031897101
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S IDENTIFICATION NO. OF ABOVE PERSON
ALLIEDSIGNAL INC. (E.I.N.: 22-2640650)
- -----------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- -----------------------------------------------------------------------
3. SEC USE ONLY
- -----------------------------------------------------------------------
4. SOURCE OF FUNDS
BK, WC, OO
- -----------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS
2(d) or 2(c) [ ]
- -----------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -----------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
20,000,100 Common Shares
- -----------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES
[ ]
- -----------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
9.1% of outstanding Common Shares
- -----------------------------------------------------------------------
10. TYPE OF REPORTING PERSON
HC and CO
- -----------------------------------------------------------------------
SCHEDULE 13D AND 14D-1
CUSIP No. 031897101
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S IDENTIFICATION NO. OF ABOVE PERSON
PMA ACQUISITION CORPORATION (E.I.N.: 22-3610482)
- -----------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- -----------------------------------------------------------------------
3. SEC USE ONLY
- -----------------------------------------------------------------------
4. SOURCE OF FUNDS
BK, WC, OO
- -----------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS
2(d) or 2(c) [ ]
- -----------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -----------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
20,000,100 Common Shares
- -----------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES
[ ]
- -----------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
9.1% of outstanding Common Shares
- -----------------------------------------------------------------------
10. TYPE OF REPORTING PERSON
CO
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This Amendment to Schedule 14D-1 filed by PMA Acquisition Corporation,
a Delaware corporation, a wholly owned subsidiary of AlliedSignal Inc., a
Delaware corporation, in connection with its pending tender offer for up to
20,000,000 shares of common stock, without par value, (the "Common Stock")
of AMP Incorporated, a Pennsylvania corporation (the "Company"), also
constitutes an Amendment to Statement on Schedule 13D with respect to the
acquisition by Parent and Offeror of beneficial ownership of shares of
Common Stock of the Company. The Schedule 14D-1 is hereby amended as
follows:
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(77) Slide Show Presentation prepared by Parent.
SIGNATURE
After due inquiry and to the best of its knowledge and belief, each of
the undersigned certifies that the information set forth in this statement
is true, complete and correct.
Dated: October 13, 1998
PMA ACQUISITION CORPORATION
By: /s/ Peter M. Kreindler
------------------------------
Name: Peter M. Kreindler
Title: Vice President, Secretary
and Director
ALLIEDSIGNAL INC.
By: /s/ Peter M. Kreindler
------------------------------
Name: Peter M. Kreindler
Title: Senior Vice President,
General Counsel and
Secretary
EXHIBIT (a)(77)
AMP - PRESENTATION
October 1998
AMP OVERVIEW
SALES BY INDUSTRY SALES BY REGION
[PIE GRAPH SHOWING [PIE GRAPH SHOWING
SALES BY INDUSTRY] SALES BY REGION]
Consumer & Industrial $1.6B Americas 50%
Automotive $1.5B Europe 30%
Telecom $1.5B Asia/Pacific 20%
Personal Computer $1.0B
BUSINESSES
Electrical Connection Devices for
the Following Industries: STRENGTHS
o Consumer & Industrial o Leading Market Position
o Telecommunications o Global
o Automotive o Diverse Markets
o Personal Computers o Strong Technical Capabilities
1998 STATISTICS
Sales* $5.6B
Op. Margins* 9.7%
EPS* $1.56
Market Cap ~6.5B
* Updated to include AMP's own forecast for 1998.
WORLD'S LEADING MANUFACTURER OF ELECTRICAL & ELECTRONIC CONNECTION DEVICES
AMP PERFORMANCE
[BAR GRAPH SHOWING SALES OF $3.1B, [BAR GRAPH SHOWING 29,900 AND 46,500
$5.2B AND $5.6B FOR 1991, 1995 AND EMPLOYEES IN 1991 AND 1998,
1998, RESPECTIVELY.] [LINE GRAPH RESPECTIVELY, AND SALES PER EMPLOYEE
SHOWING A 15.2% OPERATING MARGIN IN OF $105K AND $120K IN 1991 AND 1998,
1991 AS COMPARED TO A 9.7% OPERATING RESPECTIVELY.] [LINE GRAPH SHOWING A
MARGIN IN 1998.] 2% CAGR FROM 1991 TO 1998.]
ISSUES
o High Cost Position [LINE GRAPH SHOWING EPS OF $1.22,
o Exporting to Asia $1.38, $1.76, $1.76, $2.12, $1.89,
o Price Degradation $2.13 AND $1.46 IN 1991, 1992, 1993,
o Lack of Cost Reduction 1994, 1995, 1996, 1997 AND 1998
(EXPECTED), RESPECTIVELY AND
EMPHASIZING AMP'S ERRATIC EARNINGS.]
STRENGTHS NOT LEVERAGED; ERRATIC EARNINGS
AMP PERFORMANCE VS. PEERS
4 YEAR SALES GROWTH 4 YEAR EPS CAGR
(CAGR) (95-98) (95-98)
[BAR GRAPH SHOWING SALES GROWTH (CAGR) [BAR GRAPH SHOWING EPS GROWTH FOR AMP
FOR AMP AND ITS COMPETITORS FOR THE 4 AND ITS COMPETITORS FOR THE 4 YEAR
YEAR PERIOD FROM 1995 TO 1998.] PERIOD FROM 1995 TO 1998.]
Molex 14% Molex 19%
Berg 12% Berg N/M
T&B 9% T&B 14%
Amphenol 7% Amphenol 25%
AMP 9% AMP (3%)
GROSS MARGIN
- ---------------------------------------------------------------------------
1994 1998E CHANGE
---- ----- ------
Molex 42% 41% (1%)
Berg 35% 36% +1%
T&B 29% 32% +3%
Amphenol 30% 31% +1%
AMP 34% 30% (4%)
S, G, AND A/SALES
- ---------------------------------------------------------------------------
1994 1998E CHANGE
---- ----- ------
Molex 26% 19% +7%
Berg 25% 21% +4%
T&B 16% 16% -
Amphenol 15% 14% +1%
AMP 18% 21% (3%)
AMP HAS UNDERPERFORMED
AMP CASH FLOW
CAPITAL SPENDING/SALES OPERATING MARGIN DECLINE
[BAR GRAPH SHOWING CAPITAL [BAR GRAPH SHOWING OPERATING MARGINS
SPENDING/SALES AS 10%, 11%, 14%, 11% OF 16.1%, 14.7%, 12.1%, 12.9% AND 9.7%
AND 8% OF AMP'S CASH FLOW IN 1993, IN 1994, 1995, 1996, 1997 AND 1998
1994, 1995, 1996 AND 1997, (EXPECTED), RESPECTIVELY.]
RESPECTIVELY.]
WORKING CAPITAL TURNS OPERATING CASH FLOW/CAPITAL INVESTMENT
RETURN ON INCREMENTAL CAPITAL
[LINE GRAPH SHOWING WORKING CAPITAL [BAR GRAPH SHOWING AMP'S RETURNS ON
TURNS OF 4.4 AND 4.0 FOR AMP IN 1993 INCREMENTAL CAPITAL OF 43%, 16%, 6%
AND 1997, RESPECTIVELY, AND 4.0 AND AND (1%) IN 1994, 1995, 1996 AND 1997,
5.0 AS THE INDUSTRY AVERAGE IN 1993 RESPECTIVELY.]
AND 1997, RESPECTIVELY.]
BY ANY MEASURE, AMP'S CASH FLOW IS WEAK
AMP ORGANIZATIONAL STRUCTURE
OLD NEW
CEO CEO
CFO Europe/Middle East Global Operations Technology
Human Resources Global Business Global Industry Administration
Businesses
Global Succession Global Regional Business Legal
Competencies Development
Americas AMP Technology Regional Sales & Human Resources
Country Mgt.
Asia Pacific Communication Finance Communication
Public Affairs Strategy &
Development
WHAT'S CHANGED? STILL COMPLEX AND NON-ACCOUNTABLE
AMP MANUFACTURING DEFICIENCIES
NOT INDUSTRY FOCUSED
TOO MANY INTER-PLANT SHIPMENTS (NOT SELF CONTAINED)
TOO MANY FACILITIES
TOO LITTLE ASIAN CAPACITY
STILL EXPORTING PRODUCTS TO ASIA
A 1970'S STRUCTURE TRYING TO COMPETE IN THE 1990'S
AMP's PROJECTIONS
[BAR GRAPH SHOWING AMP's OWN PROJECTED EPS OF $1.35, $1.22, $1.38, $1.41,
$1.76, $1.96, $1.31 AND $2.08 IN 1990, 1991, 1992, 1993, 1994, 1995, 1996
AND 1997, RESPECTIVELY, AND PROJECTED EPS OF $1.56, $2.30 AND $3.00 IN
1998, 1999 AND 2000, RESPECTIVELY. BAR GRAPH ALSO HIGHLIGHTS A 2% CAGR IN
EPS FOR THE PERIOD FROM 1990 THROUGH 1998, AND A 53% AND 30% CAGR IN EPS
FOR 1999 AND 2000, RESPECTIVELY.]
A 2% CAGR IN EPS SINCE 1990, PROJECTING TO DOUBLE EPS BY 2000?
AMP'S PROFIT IMPROVEMENT VALUATION
AMP'S PROJECTION PRESENT VALUE
- --------------------------------------
[BAR GRAPH SHOWING AMP'S OWN [BAR GRAPH SHOWING THE PRESENT VALUE
PROJECTIONS FOR ITS EPS OF $1.56, OF AMP SHARES (1) AT $40 PER SHARE
$2.30 AND $3.00 FOR 1998, 1999 AND BASED ON AMP'S PROJECTED EPS FOR 1999
2000, RESPECTIVELY.] AND USING A FORWARD 18 x P/E MULTIPLE
AND (2) AT $45 PER SHARE BASED ON
AMP'S PROJECTED EPS FOR 2000 AND USING
A FORWARD 18 x P/E MULTIPLE.]
FIRST CALL ANALYST EXPECTATIONS PRESENT VALUE
- --------------------------------------
[BAR GRAPH SHOWING FIRST CALL ANALYST [BAR GRAPH SHOWING THE PRESENT VALUE
EXPECTATIONS FOR AMP'S EPS OF $1.56, OF AMP SHARES (1) AT $34 PER SHARE
$1.96 AND $2.65 FOR 1998, 1999 AND BASED ON ANALYSTS' PROJECTED EPS FOR
2000, RESPECTIVELY.] 1999 AND USING A FORWARD 18 x P/E
MULTIPLE AND (2) AT $40 PER SHARE BASED
ON ANALYSTS' PROJECTED EPS FOR 2000
AND USING A FORWARD 18 x P/E MULTIPLE.]
AMP'S PROFIT IMPROVEMENT PLAN FALLS SHORT
AMP'S FAILED PROJECTIONS
1993 1994 1996 1998
VISION 2000 FORECASTS RESTRUCTURING RESTRUCTURING
SALES $10B 18-20% $195M FORECAST 17%
BY 2000 MARGINS CHARGE MARGIN FOR 2001
[ARROW POINTING [ARROW POINTING [ARROW POINTING [ARROW POINTING
DOWNWARD] DOWNWARD] DOWNWARD] DOWNWARD]
[LINE GRAPH SHOWING SALES OF $3.4B, $4.0B, $5.2B, $5.5B, $5.7B AND $5.6B AND
OPERATING MARGINS OF 15.2%, 16.1%, 14.7%, 12.1%, 12.9% AND 9.7% IN 1993, 1994,
1995, 1996, 1997 AND 1998 (EXPECTED), RESPECTIVELY.]
NOT LIVING UP TO PROMISES
AMP'S Failure To Meet Wall Street Expectations
[LINE GRAPH SHOWING ANALYST CONSENSUS ESTIMATES (CONT. OPS.) OF $2.34 IN
THE FIRST QUARTER OF 1995, A GRADUAL DECLINE IN ANALYST CONSENSUS ESTIMATES
(CONT. OPS.) OVER 1995 AND 1996 AND ANALYST CONSENSUS ESTIMATES (CONT.
OPS.) OF $1.89 IN THE FOURTH QUARTER OF 1996.] [LINE GRAPH SHOWING ANALYST
CONSENSUS ESTIMATES (CONT. OPS.) OF $2.72 IN THE FIRST QUARTER OF 1996, A
GRADUAL DECLINE IN ANALYST CONSENSUS ESTIMATES (CONT. OPS.) OVER 1996 AND
1997 AND ANALYST CONSENSUS ESTIMATES (CONT. OPS.) OF $2.13 IN THE FOURTH
QUARTER OF 1997.] [LINE GRAPH SHOWING ANALYST CONSENSUS ESTIMATES (CONT.
OPS.) OF $2.78 IN THE FIRST QUARTER OF 1997, A GRADUAL DECLINE IN ANALYST
CONSENSUS ESTIMATES (CONT. OPS.) OVER 1997 AND THE FIRST THREE QUARTERS OF
1998, AND ANALYST CONSENSUS ESTIMATES (CONT. OPS.) OF $1.56 IN THE THIRD
QUARTER OF 1998.]
AMP Repeatedly Fails to Meet Expectations
BERG VALUATION
Berg Financial Summary AMP Financial Summary
---------------------- ---------------------
Enterprise Value $1.85B Enterprise Value $10.2B
Multiples Multiples
--------- ---------
'98 '99 '98 '99
--- --- --- ---
Price/Sales 2.2X 1.9X Price/Sales 1.9X 1.9X
Price/EBITDA 10.6X 8.9X Price/EBITDA 11.0X 8.6X
Price/EBIT 17.5X 14.9X Price/EBIT 19.0X 14.2X
Framatone's Price for Berg Confirms ALD's Price
AMP's Promise
Net Income # Of Shares E.P.S.
---------- ----------- ------
1999 Consensus Earnings $427M 218M $1.96
Predicted Trading Price $1.96 X 18P/E* = $35/Share
* AMP's average forward multiple since 1995
Valuation
ALD Tender 13% X $55.00 = $7.70
Amp Tender 14% X $55.00 = $7.70 $39 Per Share
Residual 73% X $35.28 = $25.75
AMP's Self Tender Falls Considerably Short of $44.50
Who Should You Trust?
ALD Effort AMP Board
---------- ---------
o Sent Letter Proposing Merger o No Response
o Launched $44.50, All Shares Cash o Appointed New CEO
Tender Offer
o Initiated Consent Solicitation o Amended Poison Pill
o Offered To Purchase 18% Of Shares o Amended Pill To Reduce
At $44.50 Poison Pill Trigger
o Introduced Shareowners Rights o Amended Pill To Non Redeemable-
Proposal To Remove Pill Non Amendable
o Offered To Purchase 9% Of Shares o Initiated Legislative and Legal
At $44.50 Action To Remove ALD Consent
Efforts
o Purchased 9% Of AMP o Initiated Contingent Tender
Offer
AMP Board Is Acting In Its Interests; Not Yours
ALD Offer For AMP
$44.50 S&P 500 NASDAQ $44.50
+55% (12%) (19%) +??%
Premium Premium
$28.62 [ARROWS POINTING DOWNWARD INDICATING $??
Aug. 3, 1998 DECLINE] Oct. 9, 1998
Issues As Of October 15, 1998
-----------------------------
o Weakening Asia Economy o AMP Takes On Significant Debt
o World Economy Trending Toward o Slowing Electronics Industry
Recession
o Currency Devaluations o Credit & Equity Markets In Turmoil
Original 55% Premium Offer Now Worth Substantially More
CONSENT PROCESS
o October 15, 1998 Record Date
o Returning of Written Consents To ALD By October 23rd Will Hasten the
Process
o As Soon As Consents Are Received From 50% of Shares They Can Be Presented
To AMP For Review By The Inspector Of Elections
A Simple Process For You That Can Produce Big Results
WHY CONSENT IMMEDIATELY?
o Prospect Of ALD Controlling Board Likely To Lead to Near-Term Sale of
Company
o The AMP Board "Down Payment" Could Strangle The Company With Onerous
Debt And Will Not Produce Value Equal To ALD's Offer
o Global Economy Weakening
o Equity And Credit Markets Uncertain
o AMP Management Has Committed Itself To Renew Legislative Efforts
AMP CONTINUES TO ENTRENCH ITSELF
WHY CONSENT IMMEDIATELY?--CONT'D
o Given More Time, Who Knows What AMP Management Will Do Next
o ALD, If Allowed To Take Control Of The Board, Is Committed to Protect
Its $900M Investment And Deliver Value To AMP Shareholders
o ALD Meets Its Commitments
o You Can't Lose By Consenting
ALD Has Demonstrated Its Commitment; Now It's Your Turn
CERTAIN INFORMATION CONCERNING PARTICIPANTS
AlliedSignal Inc. ("AlliedSignal"), PMA Acquisition Corporation
("Acquisition Subsidiary") and certain other persons named below may
solicit the consent of shareholders (a) to elect seventeen nominees (the
"Nominees") as directors of AMP Incorporated ("AMP") pursuant to a
shareholder action by written consent (the "Consent Solicitation") and (b)
in favor of the adoption of five proposals to amend the By-laws of AMP. The
participants in this solicitation may include the directors of AlliedSignal
(Hans W. Becherer, Lawrence A. Bossidy (Chairman of the Board and Chief
Executive Officer), Ann M. Fudge, Paul X. Kelley, Robert P. Luciano, Robert
B. Palmer, Russell E. Palmer, Frederic M. Poses (President and Chief
Operating Officer), Ivan G. Seidenberg, Andrew C. Sigler, John R. Stafford,
Thomas P. Stafford, Robert C. Winters and Henry T. Yang), each of whom is a
Nominee; and the following executive officers and employees of
AlliedSignal: Peter M. Kreindler (Senior Vice President, General Counsel
and Secretary), Donald J. Redlinger (Senior Vice President - Human
Resources and Communications), and Richard F. Wallman (Senior Vice
President and Chief Financial Officer), each of whom is a Nominee, and
Terrence L. Carlson (Deputy General Counsel) Robert F. Friel (Vice
President and Treasurer), John W. Gamble, Jr. (Assistant Treasurer), Mark
E. Greenberg (Vice President, Communications), John L. Stauch (Director,
Investor Relations), Robert J. Buckley (Manager, Investor Relations), G.
Peter D'Aloia (Vice President, Planning & Development) Mary Elizabeth Pratt
(Manager, Investor Relations), and James V. Gelly (Vice President, Finance,
Aerospace Marketing, Sales & Service).
As of the date of this communication, AlliedSignal is the beneficial
owner of 100 shares of Common Stock without par value of AMP. Mr. Greenberg
is the beneficial owner of 100 shares of Common Stock of AMP. Other than
set forth herein, as of the date of this communication, neither
AlliedSignal, Acquisition Subsidiary nor any of their respective directors,
executive officers or other representatives or employees of AlliedSignal,
any Nominees or other persons known to AlliedSignal who may solicit proxies
has any security holdings in AMP. AlliedSignal disclaims beneficial
ownership of any securities of AMP held by any pension plan or other
employee benefits plan of AlliedSignal or by any affiliate of AlliedSignal.
Although neither Lazard Freres & Co. LLC ("Lazard Freres") nor
Goldman, Sachs & Co. ("Goldman Sachs"), the financial advisors to
AlliedSignal, admits that it or any of its members, partners, directors,
officers, employees or affiliates is a "participant" as defined in Schedule
14A promulgated under the Securities Exchange Act of 1934 by the Securities
and Exchange Commission, or that Schedule 14A requires the disclosure of
certain information concerning Lazard Freres or Goldman Sachs, Steven J.
Golub and Mark T. McMaster (each a Managing Director) and Yasushi
Hatakeyama (a Director) of Lazard Freres, and Robert S. Harrison and Wayne
L. Moore (each a Managing Director) and Peter Gross and Peter Labbat (each
a Vice President) of Goldman Sachs, may assist AlliedSignal in the
solicitation of consents of shareholders. Both Lazard Freres and Goldman
Sachs engage 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 Lazard Freres and Goldman
Sachs may trade securities of AMP for its own account and the accounts of
its customers, and accordingly, may at any time hold a long or short
position in such securities. Lazard Freres has informed AlliedSignal that
as of August 6, 1998, Lazard Freres held a net long position of
approximately 20,861 shares of Common Stock of AMP, and Goldman Sachs has
informed AlliedSignal that as of August 7, 1998, Goldman Sachs held a net
long position of approximately 800,000 shares of Common Stock of AMP.
Except as disclosed above, to the knowledge of AlliedSignal, none of
AlliedSignal, the directors or executive officers of AlliedSignal, the
employees or other representatives of AlliedSignal or the Nominees named
above has any interest, direct or indirect, by security holdings or
otherwise, in AMP.
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