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SCHEDULE 14A INFORMATION
Consent Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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|_| Definitive Consent Statement
|X| Definitive Additional Materials
|X| Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
AMP Incorporated
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(Name of Registrant as Specified In Its Charter)
ALLIEDSIGNAL INC.
PMA ACQUISITION CORPORATION
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(Name of Person(s) Filing Consent Statement, if other than Registrant)
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EXHIBIT I
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
- -------------------------------------------------x
AMP INCORPORATED, :
:
Plaintiff, :
- against - : C.A. No. 98-CV-4405
:
ALLIEDSIGNAL INC., :
PMA ACQUISITION CORPORATION, :
:
Defendants. :
- -------------------------------------------------x
DEFENDANTS' OPPOSITION TO AMP INCORPORATED'S
MOTION FOR LEAVE FOR EXPEDITED DISCOVERY
AMP Incorporated ("AMP") has asked this Court to order expedited
depositions of the seventeen nominees in AlliedSignal Inc.'s
("AlliedSignal") consent solicitation. The purported reason for this
expedited discovery is to test the nominees' understanding of their
fiduciary duties under Pennsylvania law. (AMP Brf. at 2) AMP, however, can
point to no case law or statutory authority for such extraordinary relief.
Pennsylvania law does not require an acquiror-affiliated nominee to take an
examination on his or her understanding of Pennsylvania fiduciary duty law
as a condition for election to a target company's board of directors.
In fact, under the Pennsylvania Business Corporation Law
("PBCL"), any "natural person of full age" is qualified to serve as the
director of a corporation, subject to any additional qualifications
prescribed in a company's bylaws. PBCL ss. 1722(a). AMP's Bylaws impose no
additional qualifications, providing only that "[d]irectors shall be at
least 18 years of age and need not be United States citizens or residents
of Pennsylvania or shareholders of the Corporation." Bylaws ss. 2.1.
Although the PBCL expressly contemplates the presence of
acquiror-affiliated directors on a target company's board of directors,
neither the PBCL nor AMP's Bylaws modifies the requirements for such
directors let alone requires that interested directors pass a test proving
that they "understand" their fiduciary duties.
Moreover, AMP fails to provide any basis on which to question
whether or not, in fact, the nominees understand their fiduciary duties.
The nominees are directors and/or senior executives of some of the largest
corporations in the United States, and are well-acquainted with the concept
of fiduciary duties. In addition, each nominee has signed a statement
expressing his or her understanding that, in Pennsylvania, these fiduciary
duties are owed solely to AMP as a corporation. (Tab 1) Thus, there is no
basis to subject the nominees or AlliedSignal to the imposition and delay
that would be caused by the depositions sought by AMP.
AMP's request for expedited discovery flows from its assertion
that, if elected, the nominees will be unable to fulfill their fiduciary
duties to AMP. This Court, however, has already recognized that any claim
based on whether or not the nominees can fulfill their fiduciary duties to
AMP is "premature." (10/8/98 Op. at P. 81.) The Court expressly refused to
"speculate that interested directors will not respect their fiduciary
duty." (Id. at P. 74.) Consequently, AMP's desired inquiry into the
nominees' understanding of their fiduciary duties is similarly premature.
If the nominees are elected and fulfill their fiduciary duties to AMP --
which they have pledged to do -- such an inquiry will be unnecessary.
The issue currently before the Court is whether AlliedSignal has
complied with the requirements of the October 8, 1998 Order. At the October
13, 1998 conference, the Court explained that the Order did not require
that the nominees be tested on their understanding of Pennsylvania
fiduciary duty law. The Court noted that although AMP had made an "argument
that [the nominees] apparently don't understand the [fiduciary] duty," the
Court has "not required that [the nominees] do more than pledge themselves
to it." (10/13/98 Tr. at 42, Tab 2).
Thus, the only remaining question, which the Court will answer at
the hearing scheduled for October 20, 1998, is whether AlliedSignal's
disclosures and the nominees' pledges are sufficient to satisfy the October
8 Order. The Court does not need deposition or trial testimony from each of
the seventeen nominees to make that determination. In fact, the Court needs
only its own Order, AlliedSignal's disclosures and the nominees' pledges.
AlliedSignal's compliance is plain from those materials alone.
Finally, AMP suggests that AlliedSignal and the nominees will
suffer no harm if the depositions are allowed to go forward. To the
contrary, in addition to the imposition of the deposition process itself on
the nominees (who have other companies to run), AMP's "expedited" discovery
schedule delays the entire consent solicitation process until at least
November 9, 1998. Simple delay itself is "the most potent weapon in a
tender-offer fight" and can "seriously impede" or prevent an offer from
succeeding. Edgar v. MITE Corp., 457 U.S. 624, 637 n.12 (1982) (plurality
opinion) (internal quotation marks and citation omitted). Such delay may
cause AMP's shareholders to lose the opportunity to sell their shares to
AlliedSignal at a substantial premium to market, and may cause AlliedSignal
to lose the unique opportunity to acquire AMP. See, e.g. San Francisco Real
Estate Investors v. Real Estate Investment Trust of America, 701 F.2d 1000,
1003 (1st Cir. 1983) (loss of opportunity to obtain control of a
corporation is irreparable harm); Kennecott Corp. v. Smith, 637 F.2d 181,
183-84, 188 (3d Cir. 1980) (granting expedited argument and finding
irreparable harm because of threat of delay to a tender offer).
AMP should not be permitted to impose this delay on AlliedSignal
when it has no good reason to do so. Accordingly, AlliedSignal respectfully
requests that AMP's Motion for Leave for Expedited Discovery be denied.
Respectfully Submitted
/s/ Mary A. McLaughlin
---------------------------
Mary A. McLaughlin
George G. Gordon
DECHERT PRICE & RHOADS
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103-2703
and
/s/ Alexander R. Sussman
---------------------------
Alexander R. Sussman
Barry G. Sher
FRIED FRANK HARRIS, SHRIVER &
JACOBSON (A Partnership Including
Professional Corporation)
One New York Plaza
New York, NY 10004
Dated: October 19, 1998