===========================================================================

                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549

                              ---------------

                             AMENDMENT NO. 7 TO
                                SCHEDULE 13D
                 UNDER THE SECURITIES EXCHANGE ACT OF 1934

                              ---------------

                              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

                              ----------------

        (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

===========================================================================

                                SCHEDULE 13D

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

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
- -----------------------------------------------------------------------

     The Schedule 13D filed by PMA Acquisition Corporation ("PMA"), a
Delaware corporation, a wholly owned subsidiary of AlliedSignal Inc.
("AlliedSignal"), a Delaware corporation, on October 9, 1998 is hereby
amended as follows:

                 ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.

(a)(14)   AlliedSignal and PMA's Reply Brief filed on October 23, 1998 in
          the United States Court of Appeals for the Third Circuit
          (No. 98-1881, 98-1882).

                                 SIGNATURE

     After reasonable inquiry and to the best of their knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.

Dated:  October 27, 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)(14)

                   IN THE UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT

===========================================================================

                           NOS. 98-1881, 98-1882

===========================================================================

                 ALLIEDSIGNAL INC., A DELAWARE CORPORATION,
                                 APPELLANT

                                     V.

               AMP INCORPORATED, A PENNSYLVANIA CORPORATION,
                                  APPELLEE

===========================================================================

               ALLIEDSIGNAL INC., A DELAWARE CORPORATION, AND
            PMA ACQUISITION CORPORATION, A DELAWARE CORPORATION,
                                 APPELLANT

                                     V.

               AMP INCORPORATED, A PENNSYLVANIA CORPORATION,
                                  APPELLEE

===========================================================================

              ON APPEAL FROM THE UNITED STATES DISTRICT COURT
                  FOR THE EASTERN DISTRICT OF PENNSYLVANIA
                        CIVIL ACTION NO. 98-CV-4405
                        CIVIL ACTION NO. 98-CV-4058

===========================================================================

                          APPELLANTS' REPLY BRIEF

===========================================================================

SCHNADER HARRISON                                 DECHERT PRICE & RHOADS
  SEGAL & LEWIS                                   MARY A. MCLAUGHLIN
ARLIN M. ADAMS                                    GEORGE G. GORDON
1600 MARKET STREET, STE. 3600                     4000 BELL ATLANTIC TOWER
PHILADELPHIA, PA 19103                            1717 ARCH STREET
(215) 751-2000                                    PHILADELPHIA, PA  19103
(215) 751-2205 FACSIMILE                          (215) 994-4000
                                                  (215) 994-2222 FACSIMILE

                             TABLE OF CONTENTS

INTRODUCTION...............................................................1

I.    THIS COURT HAS JURISDICTION OVER ALL CLAIMS IN THIS APPEAL...........3

II.   THE DISTRICT COURT ERRED IN ENJOINING THE PENDING ELECTION OF
      DIRECTORS UNTIL ALLIEDSIGNAL MADE ADDITIONAL DISCLOSURES.............5

      A.    Both AMP and the District Court Ignore Controlling Federal
            Disclosure Law.................................................5

      B.    AMP's Lengthy Discourse on Pennsylvania Common Law Fails
            to Address the District Court's Fundamental Misreading of
            the PBCL.......................................................7

      C.    The District Court Failed and, Indeed Refused, to Consider
            the Irreparable Harm Caused by the Injunction to AlliedSignal..9

III.  THE AMP NONREDEMPTION AND NULLIFICATION PROVISIONS ARE CONTRARY
      TO PENNSYLVANIA LAW AND SHOULD HAVE BEEN ENJOINED BY THE 
      DISTRICT COURT......................................................11

      A.    AlliedSignal's Consent Solicitation Proposals are Authorized
            By the PBCL, AMP's Articles of Incorporation, and AMP's
            Bylaws and Therefore the District Court's Reason for
            Refusing to Enjoin The Amendments to the Poison Pill Was
            Contrary to Law...............................................12

            1.    AMP Cannot Refute that The Nominee Election Proposals
                  Are Lawful; The District Court's Basis for Refusing 
                  to Enjoin the AMP Nonredemption Provision Is 
                  Therefore Invalid.......................................12

            2.    AMP Has Not Refuted that AlliedSignal's Shareholder
                  Rights Proposal is Expressly Authorized by 
                  Pennsylvania Law........................................12

      B.    The Nonredemption and Nullification Provisions Are Illegal
            As Beyond the Power of a Board of Directors to Enact and
            are Impermissible Attempts to Punish Shareholders for 
            Exercising their Voting Rights................................15

            1.    AMP's Nonredemption and Nullification Provisions are
                  Illegal Restrictions on a Future Board's Power and
                  Responsibilities Under the PBCL.........................16

            2.    AMP's Nonredemption and Nullification Provisions are
                  Illegal Restrictions on the Shareholder Franchise.......20

      C.    Equitable Relief Is Appropriate Against the Nonredemption 
            and Nullification Provisions..................................23

CONCLUSION................................................................25

                                INTRODUCTION

          The brief for appellee AMP Incorporated ("AMP") fails to address
directly many of the substantive legal issues raised in this appeal by
AlliedSignal Inc. and PMA Acquisition Corp. (collectively "AlliedSignal").
Entire pages of AMP's brief set forth legal principles that AlliedSignal
concedes in its Opening Brief -- that directors owe a duty of loyalty to
the company on whose board they serve; that in Pennsylvania directors owe
fiduciary duties to their corporation not their shareholders; and that
provisions of the Pennsylvania Business Corporations Law ("PBCL") give
Pennsylvania boards of directors the right to adopt shareholder rights
plans and fix their terms.

          AMP also seeks to avoid sober legal analysis by cloaking ordinary
business transactions with sinister-sounding names. Thus AlliedSignal's
consent solicitation becomes an "end run" and its tender offer a "stalking
horse"; the decision not to commence a tender offer when the AMP board
refused to redeem the poison pill becomes a "bait and switch" scheme; and
the proposal submitted for a shareholder vote to add new directors becomes
"board packing."

          In the end, AMP's brief does not come to grips with the
fundamental issue of corporate governance that underlies each of the
rulings on appeal: where does the discretionary power of the directors of a
Pennsylvania corporation end and the right of the shareholders to chart the
corporation's course begin? AlliedSignal does not contest that the
anti-takeover provisions of the PBCL give directors broad powers, perhaps
as broad as those granted by any state, to defend against unsolicited
take-over offers, nor that there is a presumption that decisions of the
board of directors in a take-over context are in the best interests of the
corporation.

          But that discretion is not unlimited. First, the directors are
not entitled to the presumption that their actions are in the corporation's
best interests if there is a breach of fiduciary duty, lack of good faith
or self-dealing. Second, the anti-takeover provisions themselves recognize
that the shareholders can approve steps that are part of a take-over
effort, even if the directors have declared that the take-over is not in
the best interests of the corporation. Finally, and most importantly, the
directors ultimately serve at the pleasure of the shareholders. There can
be no question that, if the shareholders disagree with a director's
position on a proposed take-over, the shareholders have the right to vote
the director out of office.

          Thus, the essential premise of AMP's position is wrong.
Shareholders are not bound for all purposes by the directors' decision that
a take-over bid is inadequate or not in the best interests of the company.
If the shareholders disagree and want to pursue a merger, they have certain
statutory rights to achieve that goal, despite the directors' opposition.
Those rights include the right to elect directors of their choice.

          AMP's effort to portray AlliedSignal as the "evil" hostile raider
ignores that the shareholders may welcome the take-over. In fact, in this
situation we know that shareholders holding 72 percent of AMP's outstanding
shares wanted to sell their shares for $44.50 in cash, an opportunity that
is available to them only from AlliedSignal. While AlliedSignal's attempt
to acquire control of AMP may be "hostile" to AMP's incumbent directors, it
definitely is not hostile to the shareholders.

          AlliedSignal is not asserting in this case that the AMP directors
have breached their fiduciary duty. AlliedSignal is arguing that the AMP
directors have exceeded the authority granted to them by the PBCL and AMP's
articles of incorporation and have encroached on the rights of the
shareholders. While the "parties" to this appeal are AMP and AlliedSignal,
the shareholders, as the owners of the corporation (including AlliedSignal
which is now AMP's largest shareholder) have fundamental rights that the
AMP directors cannot ignore or impair.

          AMP makes much of the differences between the corporate laws of
Delaware, New Jersey and New York and the corporate laws of Pennsylvania as
part of its desire to ignore precedent in those jurisdictions. While there
are important differences between those states and Pennsylvania in the
reach and scope they give to corporate directors, there is no difference in
the fundamental principle of corporate governance at issue here. In all of
these states, including Pennsylvania, the shareholders have the right to
chart the course of the corporation through their unfettered right to elect
directors of their choice.

I.   THIS COURT HAS JURISDICTION OVER ALL CLAIMS IN THIS APPEAL

          AMP refers throughout its brief to three possible defects in the
Court's jurisdiction. First, AMP argues that the Court does not have
jurisdiction to review that part of the district court's October 8 Order
that entered a declaratory judgment that AlliedSignal's Shareholder Rights
Proposal is unlawful. (AMP Br. at 1). Second, AMP argues that "there is not
currently an effective appeal" in Civil Action No. 4405 "because AMP filed
a Rule 59(e) motion on October 12, 1998, and, as yet (as far as AMP is
aware), no order has been entered on that motion." (AMP Br. at 1 n.1). AMP
also points out that it has filed a second Rule 59(e) motion, though it
states that it "does not believe that the [second Rule 59(e)] motion
affects appellate jurisdiction." (AMP Br. at 1 n.1). And third, AMP argues
that, "[o]bviously, if the district court concludes that AlliedSignal has
complied with the injunction, its appeal as to the injunction will be
moot." (AMP Br. at 6 n.3). For the reasons that follow, this Court has
jurisdiction over all of the issues presented in AlliedSignal's appeal.

          First, contrary to AMP's assertion, the Court has jurisdiction to
review the entry of summary judgment on AMP's claim that AlliedSignal's
Shareholder Rights Proposal is unlawful. Although that entry of summary
judgment is interlocutory, the district court's denial of AlliedSignal's
request for injunctive relief in Civil Action No. 4058 was premised, in
critical part, on the district court's conclusion that AlliedSignal's
Shareholder Rights Proposal is unlawful. For example, at paragraph 45, the
district court explained that the nullification and nonredemption
provisions were justified by the "anticipated unlawful act by Allied Signal
and other shareholders to take away statutory board authority." (Op. at P.
45; see also P. P. 48-54). Thus, meaningful review of the district court's
denial of AlliedSignal's request for injunctive relief necessarily requires
review of the district court's conclusion that AlliedSignal's Shareholder
Rights Proposal is unlawful. See Casey v. Planned Parenthood of
Southeastern Pa., 14 F.3d 848, 855-56 (3d Cir. 1994).

          With regard to AMP's two Rule 59(e) motions, no jurisdictional
problems are presented because both have been dismissed. The district court
dismissed AMP's first motion as moot by Order dated October 21, 1998. (Tab
1.)(FN1) The district court dismissed AMP's second Rule 59(e) motion by
Order dated October 22, 1998. (Tab 2.)

          Finally, AlliedSignal's appeal from the district court's October
8 grant of injunctive relief is not moot, because AlliedSignal continues to
be enjoined from proceeding with the consent solicitation that was
scheduled to begin October 15, 1998.(FN2)

- ----------
1    Exhibits to this brief are attached in the accompanying Addendum to
     Appellant's Reply Brief, cited throughout as "Tab __."

2    The fact that AlliedSignal's consent solicitation is still enjoined is
     the subject of AlliedSignal's emergency motion for a stay, filed with
     the Court yesterday, October 22.

II.  THE DISTRICT COURT ERRED IN ENJOINING THE PENDING ELECTION OF
     DIRECTORS UNTIL ALLIEDSIGNAL MADE ADDITIONAL DISCLOSURES

     A.   BOTH AMP AND THE DISTRICT COURT IGNORE CONTROLLING FEDERAL
          DISCLOSURE LAW

          AMP attempts to justify the district court's injunction against
AlliedSignal's pending consent solicitation as a proper exercise of the
court's "discretion in fashioning a remedy to fit the circumstances before
it." (AMP Br. at 19.) What both AMP and the district court ignore, however,
is that the adequacy of disclosures made in connection with a consent
solicitation and the need for different or additional disclosures is
governed by federal securities laws and the SEC rules promulgated
thereunder. See 15 U.S.C. ss. 78n(a), 17 C.F.R. ss. 240.14a.

          This statutory framework represents a "carefully and explicitly"
considered congressional balancing of the costs and benefits of disclosure.
Hyde Park Partners, L.P. v. Connolly, 839 F.2d 837, 850 (1st Cir. 1988)
(holding Massachusetts takeover statute pre-empted because it required
earlier disclosure than required by federal securities laws, and finding
that this "second-guesses the balance struck by Congress"); Kennecott Corp.
v. Smith, 637 F.2d 181, 188 (3d. Cir. 1980) (explaining that federal
securities laws are "designed to preserve a balance between incumbent
management and challenging groups, so that neither has an undue advantage"
and holding New Jersey takeover law preempted because it delayed discovery
required under federal law).

          Part of this careful balance is the boundary that the federal
securities laws draw between when information must be disclosed and when no
further disclosure is necessary. That boundary is defined by the test of
"materiality" -- the securities laws require disclosure only of "material"
information having a substantial likelihood of being important to a
reasonable shareholder's vote when considered as part of the "total mix" of
information available to shareholders. TSC Indus., Inc. v. Northway, Inc.,
426 U.S. 438, 449 (1976). By requiring materiality, the federal securities
laws recognize that "[s]ome information is of such dubious significance
that insistence on its disclosure may accomplish more harm than good." Id.
at 448 (rejecting a low threshold for materiality in part to avoid the
"dangers" of "bury[ing] the shareholders in an avalanche of trivial
information"); see also Great Western United Corp. v. Kidwell, 577 F.2d
1256, 1280 (5th Cir. 1990) (holding Idaho anti-takeover law preempted
because it required more disclosure than did federal securities law), rev'd
on grounds of improper venue sub nom. Leroy v. Great Western United Corp.,
443 U.S. 173 (1979).

          Courts are not free to ignore this statutory balance in creating
equitable remedies. "It is basic to our system of governance that federal
courts not 'fashion new remedies that might upset carefully considered
legislative programs.'" Baker, Watts & Co. v. Miles & Stockbridge, 876 F.2d
1101, 1106 (4th Cir. 1989) (refusing to create right of contribution in
federal securities suits on the basis of federal common law) (quoting
Northwest Airlines, Inc. v. Transport Workers Union of America, AFL-CIO,
451 U.S. 77, 97 (1981)).

          Here, the order and opinion ignored this balance. INDEED, NEITHER
THE DISTRICT COURT IN ITS OPINION AND ORDER, NOR AMP IN ITS BRIEF, EVEN
MENTIONS THE FEDERAL SECURITIES LAWS. Consequently, neither the court nor
AMP makes any showing that the disclosures required by the court's
injunction were necessary under federal disclosure law. As discussed in
AlliedSignal's initial brief, even if AMP or the court attempted such a
showing, it would not have succeeded. The court's required disclosures
represent the type of "semantic differentiation" that federal securities
laws categorically reject. See Kennecott Copper Corp. v. Curtiss-Wright
Corp., 584 F.2d 1195, 1199-1200 (2d Cir. 1978) (rejecting district court's
distinction between a "detailed study" and "thorough investigation").

     B.   AMP'S LENGTHY DISCOURSE ON PENNSYLVANIA COMMON LAW FAILS TO
          ADDRESS THE DISTRICT COURT'S FUNDAMENTAL MISREADING OF THE PBCL.

          In its Opening Brief, AlliedSignal demonstrated that the district
court's injunction was premised on a fundamental misunderstanding of the
PBCL. The district court appears to have concluded that the AlliedSignal
nominees, if elected, would be unable, as a matter of law, to act without
breaching their fiduciary duties to AMP. AlliedSignal demonstrated that
there is no such presumption as a matter of law and that, to the contrary,
PBCL ss.ss. 2538 and 1728 expressly contemplate situations in which
interested directors will act on transactions and then provide the ground
rules for those situations. (Op. Br. at 25-29.)(FN3)

- ----------
3    PBCL ss.ss. 1715(d) and (e) provide further ground-rules for
     decision-making that involves interested directors by establishing
     certain presumptions of good faith as to acts relating to an
     acquisition of control, if a majority of disinterested directors has
     assented to them.

          AMP simply does not deal with PBCL ss.ss. 2538 and 1728 in the
context of the conflict issue. AMP fails even to respond to AlliedSignal's
argument that in light of these statutory provisions, a nominee cannot be
disqualified from election because he will operate under an inherent
conflict. Instead, AMP first denies that the district court reached the
sweeping conclusions that its Memorandum Opinion articulates. For example,
AMP denies that the district court in fact concluded that the interested
AlliedSignal nominees suffered from a disabling conflict of interest,
pointing to the district court's finding that "[s]hareholders have the
right to elect directors who are aligned with an acquiring corporation," a
conclusion that AMP requested the district court to reconsider. (Op. at P.
63, quoted at AMP Br. at 25-26.) AMP further denies that the district court
interpreted Section 2538 at all, (AMP Br. at 25, n.18), an assertion
directly contradicted by the opinion itself, in which the court misstated
that "[u]nder Section 2538, interested directors are prohibited from voting
on merger transactions." (Op. at P. 79.)

          No matter how the district court's words are characterized, the
district court opinion grudgingly acknowledges the right of shareholders to
elect directors who are aligned with an acquiring corporation and then --
improperly we believe -- sends a clear threat to investors about nominees
becoming "embroiled" in "protracted litigation" by an "inherent conflict
that will necessarily put them at risk of violating Pennsylvania's
fiduciary duty standard." (Op. at P.P. 68, 73, 76.)

          AMP's second argument is a protracted discussion of the common
law duty of loyalty in Pennsylvania, which concludes by enunciating the
"rule in Pennsylvania that directors and other agents and fiduciaries
cannot serve two masters at once." (AMP Br. at 22-24.) This second argument
contradicts the express provisions of sections 1728 and 2538 of the PBCL
which permit a director to "serve two masters at once" so long as the
directors comply with the terms of the statutes. Thus, the per se
prohibition that AMP seeks is flatly inconsistent with Pennsylvania
statutory law, and AMP cannot fashion a common law rule to override these
statutory provisions. Second, even the common law of agency allows the
agent to "serve two masters" if both masters consent after disclosure of
the conflict. There is no serious question that AlliedSignal has adequately
disclosed the alleged conflict. The consent statement, as amended, refers
explicitly to the nominees' potential "conflict of interest."

          The law in Pennsylvania is clear. Individuals who sit on boards
are called upon to make a case-by-case determination as to how they can
best discharge their duties with respect to the particular transaction
before them in light of the governing statutory provisions. That process
includes fact-finding, debate, deliberations and, possibly, obtaining the
advice of counsel. That is precisely what the AlliedSignal nominees are
prepared to do if elected. And if the shareholders believe, after a
director has taken these steps, that an interested director has violated
his or her fiduciary duty, they have the rights and remedies provided for
under the statute. Nothing in the statute provides for the type of
prospective, per se prohibition that AMP advocates here.

     C.   THE DISTRICT COURT FAILED, AND INDEED REFUSED, TO CONSIDER THE
          IRREPARABLE HARM CAUSED BY THE INJUNCTION TO ALLIEDSIGNAL

          The district court failed to consider in its Order, and has
continued to fail to consider, the irreparable harm caused by enjoining
AlliedSignal from proceeding with the consent solicitation or indeed any of
the four factors that must be considered before an injunction is issued. As
set forth more fully in the Emergency Motion for a Stay of this Order,
filed October 22, a strange series of procedural hearings and conferences
have resulted in a situation where: 1) AlliedSignal made the disclosures
required by the injunction on October 13 and the court advised AlliedSignal
that it could proceed with its consent solicitations; 2) two days later the
court reversed itself and required a "compliance hearing" to be held
October 21; 3) on October 21, the court decided it did not have
jurisdiction over such a hearing; and 4) after the witnesses had left,
immediately thereafter decided to have a hearing on November 4 on
compliance with the injunction to remain in place until at least that date.

          Thus, untethered to any findings of fact or legal analysis, the
injunction is now in limbo, while the district court refuses even to
countenance an argument that AlliedSignal is suffering irreparable harm.
The district court never considered this harm and, indeed, expressly
refused to consider it during the October 21 hearing in which it further
extended the duration of the injunction. (10/21/98 Tr., Tab 3, at 24.)
(responding to AlliedSignal's assertion of irreparable harm by stating, "I
didn't take the appeal, so I have no sympathy for your hurt. I mean, I
don't have jurisdiction.")

          The injunction is, in fact, causing AlliedSignal significant and
irreparable harm each day it remains in place. The injunction has already
delayed AlliedSignal's consent solicitation by more than a week. And, now,
after the abrupt postponement of a "compliance hearing" to November 4,
there is no end in sight. As the Supreme Court has noted, 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); Kennecott Corp. v. Smith, 637 F.2d
181, 189, n.9 (3d Cir. 1980) (noting "delay is inimical to the neutrality
and shareholder free-choice protected by the Williams Act" and finding
irreparable injury from delay to tender offeror's ability to proceed with
its tender offer).

          The delay occasioned by the injunction also causes irreparable
harm to the other AMP shareholders.(FN4) Because delay to the consent
solicitation is also delay to AlliedSignal's proposed acquisition of AMP,
the court's injunction threatens AMP's shareholders with the possibility
that they will lose the opportunity to sell their shares to AlliedSignal at
a substantial premium to market and threatens AlliedSignal with the
possibility that it will lose the unique opportunity to acquire AMP. Both
of these harms are irreparable. 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, 637 F.2d at 183-84, 188 (3d Cir. 1980)
(granting expedited argument and finding irreparable harm because of threat
of delay to a tender offer).

- ----------
4    AlliedSignal is now AMP's largest single shareholder at 9 percent, a
     $1 billion investment that was made in reliance on the Court's
     statements, since disclaimed.

          Finally, the district court's continued injunction of the consent
solicitation harms the public interest by preventing a free flow of
information to AMP's shareholders. By enjoining the consent solicitation,
the district court is preventing AlliedSignal from communicating with AMP
shareholders through the distribution of its consent material, while AMP is
free to make its case without rebuttal. As this Court held in enjoining
enforcement of New Jersey's anti-takeover laws, when the "distribution of
information" to shareholders "is delayed," it prevents "the free flow of
information from both sides" which allows shareholders to "make an
unfettered and knowledgeable choice whether to relinquish their shares."
Kennecott, 637 F.2d at 189. What is true in the context of a tender offer
is even more true in the context of a consent solicitation to elect
corporate directors: unwarranted delay of the distribution of information
hurts the public interest in informed shareholder choice and interferes
with the operation of the capital markets.

III. THE AMP NONREDEMPTION AND NULLIFICATION PROVISIONS ARE CONTRARY TO
     PENNSYLVANIA LAW AND SHOULD HAVE BEEN ENJOINED BY THE DISTRICT COURT.

          Although portrayed as such by AMP, this is not a case about
whether or not AMP can have a poison pill. Instead, the issues in this
appeal are whether a board of directors, once having adopted a pill, has
the power to impose terms that make it nonredeemable and nonamendable. That
is what AMP has done here and that is why the AMP nonredemption and
nullification provisions are unlawful and should have been enjoined.

     A.   ALLIEDSIGNAL'S CONSENT SOLICITATION PROPOSALS ARE AUTHORIZED BY
          THE PBCL, AMP'S ARTICLES OF INCORPORATION, AND AMP'S BYLAWS AND
          THEREFORE THE DISTRICT COURT'S REASON FOR REFUSING TO ENJOIN THE
          AMENDMENTS TO THE POISON PILL WAS CONTRARY TO LAW.

          1.   AMP CANNOT REFUTE THAT THE NOMINEE ELECTION PROPOSALS ARE
               LAWFUL; THE DISTRICT COURT'S BASIS FOR REFUSING TO ENJOIN
               THE AMP NONREDEMPTION PROVISION IS THEREFORE INVALID.

          The district court refused to enjoin the nonredemption provision
of AMP's poison pill because it was a response, the court declared, to an
"unlawful proposal." According to the court, AlliedSignal's Nominee
Election Proposals were nothing more than an "attempt [by] a shareholder to
propose a plan of merger." (Op. at P. 50.)

          In its Opening Brief, AlliedSignal explained that its consent
solicitation was an effort to elect new directors, authorized by section
2524 of the PBCL, not an attempt to "propose a plan of merger." In fact,
even if elected, the nominees would have to consider the merger proposal,
and the board as a whole would have to vote to approve it before it was
presented for shareholder approval. AMP has made no response to this
argument and therefore cannot effectively dispute that AlliedSignal's
consent solicitation is lawful and that the basis for the district court's
opinion was erroneous.

          2.   AMP HAS NOT REFUTED THAT ALLIEDSIGNAL'S SHAREHOLDER RIGHTS
               PROPOSAL IS EXPRESSLY AUTHORIZED BY PENNSYLVANIA LAW

          The district court refused to enjoin the nullification provision
of AMP's poison pill because it found that provision to be justified as an
attempt to counter AlliedSignal's "unlawful" Shareholder Rights Proposal.
(Op. at P. 45.) In its Opening Brief, AlliedSignal demonstrated that the
district court committed a clear error of law by ignoring entirely PBCL ss.
1721(FN5) which expressly authorizes shareholders to transfer powers from
the board of directors and vest them in another group of persons through a
shareholder-adopted bylaw, as proposed in the Shareholder Rights Proposal.

- ----------
5    AMP's attempt to excuse the district court's omission by suggesting
     that the district court "viewed this argument as being too weak to
     even merit a response" is not helpful to an analysis of this important
     issue.

          AMP's response does not dispute that, as a general proposition,
PBCL ss. 1721 authorizes shareholders to transfer powers of the board by
shareholder-adopted bylaw. Instead, AMP argues that PBCL ss. 1721 is
ineffective "in this context." (AMP Br. at 31.) AMP's attempt to exempt
itself from the plain language of PBCL ss. 1721 is without legal basis. The
plain language of PBCL ss. 1721 admits no exceptions, and no other
provision of the PBCL purports to create any.

          AMP's core argument is that PBCL ss. 1721 cannot remove "powers
specifically invested in the board by statute" and, thus, cannot remove the
directors' power over a poison pill authorized by PBCL ss.ss. 1525 and
2513. Other than the bald assertion in its brief, however, AMP offers no
support for this limitation for section 1721. In fact, AMP's argument is
contrary to the specific language of PBCL ss. 1721, which allows
shareholders to transfer "the powers and duties conferred or imposed upon
the board of directors by this subpart [referring to the PBCL]" Thus, the
plain words of section 1721 reject the notion that powers given to the
board by the PBCL are irrevocable.

          Stated in another way, AMP's argument would essentially cut the
heart out of section 1721. As the Amended Committee Comment to the section
makes clear, the purpose of PBCL ss. 1721 is to allow shareholders maximum
flexibility in deciding who exercises the corporate powers, even to the
extent of allowing shareholders to do away entirely with a "board of
directors," in favor of some alternate form of corporate governance: "The
board of directors is the traditional form of corporate governance but this
section provides it is not the exclusive form." Under AMP's interpretation,
however, every Pennsylvania corporation would have to have a board of
directors because every provision of the PBCL that uses the words "board of
directors" vests powers exclusively in the board.

          AMP attempts to buttress its argument by resorting to PBCL ss.
2501, which states that the "specific provisions" of PBCL Chapter 25 (PBCL
ss.ss. 2501-2588) control over the general provisions of the PBCL. AMP
interprets this to mean that PBCL ss. 2513, giving boards power over poison
pills, is "unfettered" by any of the general provisions of the PBCL,
including PBCL ss. 1721. (AMP Br. at 31.) As discussed in AlliedSignal's
Opening Brief, AMP's "unfettered" interpretation ignores the settled rule
of statutory construction, codified at 1 Pa. Cons. Stat. Ann. ss. 1933,
that a specific statutory provision controls over a general provision only
in the event of an irreconcilable conflict between the two.(FN6) Since PBCL
ss. 2513 does not purport to give directors exclusive authority over the
poison pill, there is no conflict, and certainly no irreconcilable conflict
between PBCL ss. 1721 and PBCL ss. 2513.(FN7)

- ----------
6    Pennsylvania's codified rules of statutory construction provide:
     "Whenever a general provision in a statute SHALL BE IN CONFLICT with a
     special provision in the same or another statute, the two shall be
     construed, if possible, so that effect may be given to both. If the
     conflict between the two provisions is irreconcilable, the special
     provisions shall prevail and shall be construed as an exception to the
     general provision . . ." 1 Pa. Cons. Stat. Ann. ss. 1933. (emphasis
     added.)

7    If the Pennsylvania legislature had wanted to give boards of directors
     exclusive powers over poison pills, it would have said so directly.
     The lack of any language in the PBCL suggesting exclusive board powers
     over poison pills stands in stark contrast to the explicit language in
     other state statutes. For example, the Georgia BCL speaks of the "the
     board of directors' authority to determine, in its sole discretion,
     the terms and conditions of the rights, options, or warrants issuable
     pursuant to this Code section." Ga. Code Ann. ss. 14-2-624(c)
     (emphasis added) (discussed in Invacare Corp. v. Healthdyne
     Technologies, Inc., 968 F. Supp. 1578, 1580 (N.D. Ga. 1997).

          Unable to rebut AlliedSignal's argument on PBCL ss. 2513, AMP has
instead chosen to misconstrue it. In the footnote purporting to address the
statutory construction of PBCL ss. 2513 and PBCL ss. 1721, AMP ignores the
issue of whether the two statutes conflict and instead discusses the
irrelevant (and patently obvious) issue of whether the two parties,
AlliedSignal and AMP's management, have conflicting views on the best
course of management for AMP. (AMP Br. at 31 n.23.)

          Similarly, AMP misconstrues the nature of AlliedSignal's
Shareholder Rights Proposal to raise the red herring of "retroactivity."
AMP mischaracterizes the Shareholder Rights Proposal as seeking to reach
back into the past to "undo the amendments" to AMP's poison pill "once
triggered." (AMP Br. at 31.) The Shareholder Rights Proposal does no such
thing. As is clear from its terms, if passed by AMP's shareholders, the
Proposal simply transfers the AMP board's power to rescind or continue the
poison pill, as it exists at the time the proposal is passed, to three
shareholder rights agents. This would include the nullification provision,
which purports to remove all power over the poison pill from anyone the
instant the Shareholder Rights Proposal is passed.(FN8)

- ----------
8    Obviously, if this Proposal were enacted but there were no further
     action from this Court, the Proposal would not be particularly
     meaningful since the AMP nullification provision would still be
     effect. For this reason, the validity and effect of AMP's
     nullification provision is also the subject of this appeal.

     B.   THE NONREDEMPTION AND NULLIFICATION PROVISIONS ARE ILLEGAL AS
          BEYOND THE POWER OF A BOARD OF DIRECTORS TO ENACT AND ARE
          IMPERMISSIBLE ATTEMPTS TO PUNISH SHAREHOLDERS FOR EXERCISING
          THEIR VOTING RIGHTS.

          1.   AMP'S NONREDEMPTION AND NULLIFICATION PROVISIONS ARE ILLEGAL
               RESTRICTIONS ON A FUTURE BOARD'S POWER AND RESPONSIBILITIES
               UNDER THE PBCL

          In its Opening Brief, AlliedSignal advanced several independent
arguments as to why AMP's nonredemption and nullification provisions are
beyond the power of the board to enact. (Op. Br. at 37-38.) AMP fails even
to mention AlliedSignal's first argument, that the nonredemption and
nullification provisions violate section 1502(18) of the PBCL. That section
provides that every corporation "shall" have the power to accept, reject,
respond to or take no action with respect to takeover attempts or other
fundamental changes, a power that is exercised by the board unless the
shareholders delegate it to some other party pursuant to section 1721. This
power includes the power to amend the poison pill. See Committee Comment to
PBCL ss. 1502. The AMP nonredemption and nullification provisions
unlawfully purport to take away these powers from any person, including
future boards or any other designees of the shareholders. AMP has no
persuasive rebuttal to this argument.

          AMP does discuss AlliedSignal's argument that the nonredemption
and nullification provisions violate PBCL ss. 1721, but in no way
elucidates the issue. AMP argues that PBCL ss. 1721 is inapplicable to its
power to enact the nullification and nonredemption provisions because "no
statute [or bylaw] took the power to enact such a plan away from the
Board." (AMP Br. at 34-35.) This is incorrect. The statute that prevents
any board from unilaterally enacting such provisions is PBCL ss. 1721
itself. PBCL ss. 1721 states that the powers of the board may be taken away
only by statute or shareholder-adopted by-law. AMP's nonredemption and
nullification provisions violate PBCL ss. 1721 because they purport to take
away the power of future boards with respect to the poison pill by
unilateral action of the current board of directors.

          In lieu of a meaningful rebuttal to AlliedSignal's arguments, AMP
insists that because sections 1525 and 2513 of the PBCL authorize directors
to adopt and fix the terms of shareholders rights plans, it follows that
this power is necessarily "without limitation." (AMP Br. at 35.)(FN9) It
cannot be the law that the power to fix the terms of a rights plan is
"without limitations" such that this power can be used to upset the balance
of powers established elsewhere in the statute. An example will suffice:
suppose that a board of directors fixes the term of a rights plan that,
when triggered, causes the dissolution of the company. Under the PBCL,
however, an entire subchapter is devoted to the procedures that must be
followed in the event of a voluntary dissolution, including a shareholder
vote at a meeting called by written notice. See Subchapter F, ss.ss.
1971-1980. If AMP's theory of limitless power to fix the terms of rights
plans were correct, the directors could, under the guise of a rights plan,
cause a dissolution of the company while ignoring an entire subchapter of
the statute.(FN10)

- ----------
9    AMP repeats its argument that this provision "trumps" other provisions
     because of PBCL ss. 2501(b). (AMP Br. at 35-36.) This argument is
     dealt with at page 14 above.

10   AMP also observes that, pursuant to section 1715(c), directors are not
     required to redeem or modify a rights plan in order to discharge their
     fiduciary duty. AMP Br. at 37. This provision, however, does not
     address the allocation of powers among the constituencies of the
     corporation; nor does it support AMP's position that the directors'
     power to fix the terms of a shareholders rights plan is "without
     limitation."

          Finally, AMP argues that the nonredemption and nullification
provisions are no different than "lock up" or "no shop" agreements that
have been upheld under Pennsylvania law. (AMP Br. at 42-47.) On the
contrary, the nonredemption and nullification provisions are fundamentally
different because 1) they arise in the context where there has already been
a decision by the board of directors of the target corporation to go
forward with a change of control transaction, such as a merger agreement,
which will be subject to shareholder approval; 2) such provisions are for
the benefit of the buyer who has made an offer to purchase and incurred
transaction costs so there is valid consideration for the restrictive
covenant; and 3) such provisions do not purport to be non-amendable by the
parties.(FN11)

- ----------
11   A no-shop provision is an agreement by a target company not to solicit
     and/or consider competing bids for (i.e., shop) the company in the
     period after a merger or sale agreement is signed and prior to the
     closing of the merger or sale. A lockup usually takes the form of an
     option granted to the buyer to acquire newly issued stock or certain
     assets of the target company in the event that the merger fails to
     close as a result of certain conditions beyond the control of the
     buyer.

          Because of these differences, the cases AMP relies upon which
uphold "no-shop" or "lockup" restrictions are entirely distinguishable from
this case. AMP relies most heavily on the Norfolk Southern decision, in
which the trial court refused to enjoin the enforcement of a 720-day
no-shop provision in the merger agreement between Conrail and CSX. Pursuant
to that provision, the Conrail board agreed to take no action on any other
bid that might be made during the period after the merger agreement was
signed but prior to earlier of the closing date or the expiration date of
the merger agreement. See Norfolk Southern Corp. v. Conrail, Inc., CA No.
96-7167, 1997 U.S. Dist. LEXIS 978, at *17 (E.D. Pa. Jan. 9, 1997), aff.
mem., 111 F.3d 127 (3d Cir. 1997). In relying on that decision, AMP misses
the key differences that distinguish it from the present situation.

          In Norfolk Southern, the no-shop provision was part of a merger
agreement providing for the acquisition by CSX of all of the outstanding
shares of Conrail, the 720-day period was related to the need to obtain
regulatory and shareholder approval for the merger, and the provision was
insisted upon by CSX. The court concluded that when parties enter into a
merger agreement, "it is expected that the parties will act in good faith
and will not deliberately go out and attempt to shop the contract, if you
will, with some other party or to see if they can get a better deal after
having entered into a valid contract." Id. at *5. None of these concerns
appears here -- AMP is trying to prevent not preserve a merger.

          In addition, there is no consideration for the restriction that
would be placed on future boards -- and AMP shareholders -- if the
nonredemption and nullification provisions were triggered, depriving them
of the opportunity to consider merger or tender offer proposals until the
poison pill expires. AMP tries to suggest that its profit improvement plan
is a better "deal" for its shareholders, but there is no guarantee that the
profit improvement plan will be successful. Moreover, the shareholders are
not being given a meaningful opportunity to accept or reject the profit
improvement plan.

          Finally, in Norfolk Southern, CONRAIL'S SHAREHOLDERS WERE TO BE
GIVEN THE OPPORTUNITY TO VOTE ON THE PROPOSED DEAL. That is ultimately what
legitimized the no-shop provision. If the shareholders decided, in the
exercise of their franchise, that they agreed with the board's actions in
entering into the merger agreement, then the no-shop could be enforced. But
the board could not override shareholder will and force them to vote in
favor of the merger agreement and, hence, accept the no-shop, as AMP is
attempting to do here. When Conrail's board attempted to interfere with the
shareholder vote, Judge VanArtsdalen issued a preliminary injunction
preventing such action, ruling that a Pennsylvania board of directors may
not "effectively disenfranchise[] those shareholders who may be opposed to
[a] proposal." Norfolk Southern Corp. v. Conrail, Inc. Civ. Act. No.
96-7167 (E.D. Pa. Dec. 17, 1996). (A 546.)(FN12) Here, the AMP board should
not be permitted effectively to disenfranchise those shareholders who may
be opposed to the board's proposed restructuring plan.

- ----------
12   The other cases AMP relies on are also easily distinguishable. In
     Keyser v. Commonwealth National Financial Corporation, 644 F. Supp.
     1130 (M.D. Pa 1986), a breach of fiduciary duty case, the shareholders
     were given the opportunity to approve the merger agreement. Id. at
     1147. Enterra Corp. v. SGS Associates, 600 F. Supp. 678 (E.D. Pa.
     1985), actually supports AlliedSignal's position. In that case, the
     court considered whether a "standstill agreement" between Enterra's
     board and SGS, its largest shareholder, that prevented SGS from
     commencing a tender offer for all of the stock of Enterra was a breach
     of fiduciary duty by Enterra's board. Although the court in Enterra
     recognized that the agreement's voting provisions were not at issue,
     it noted that it would "be inclined to challenge the validity of any
     provision in a standstill agreement requiring the shareholder to vote
     with management on any material matter." Id. at 688.

          2.   AMP'S NONREDEMPTION AND NULLIFICATION PROVISIONS ARE ILLEGAL
               RESTRICTIONS ON THE SHAREHOLDER FRANCHISE

          AMP's response to AlliedSignal's argument that the nullification
and nonredemption provisions unlawfully interfere with shareholder voting
rights is misleading. To begin with, AMP argues that AlliedSignal
"misstates the issue" because "[t]he amendments to the shareholder rights
plan do not prevent the shareholders from voting for director nominees of
their choice." (AMP Br. at 38.)

          This is an exercise in semantics. It is true that the
shareholders can still vote under the nonredemption and nullification
provisions, but the exercise of that vote would be futile because the
provisions would prevent the new directors from doing what they were
elected to do. In any event, AMP's reformulation of the "proper" issue for
the Court ("whether [AMP's] Board had authority under the [P]BCL to adopt"
the nullification and nonredemption provisions) changes nothing. (AMP Br.
at 38.) AMP's board has no authority to enact a shareholder rights plan
that punishes AMP's shareholders for voting in favor of AlliedSignal's
consent solicitations.

          Without any real answer to AlliedSignal's fundamental point on
corporate governance, AMP cites to irrelevant distinctions in the authority
cited by AlliedSignal. For example, AMP points out that two cases relied
upon by AlliedSignal, Reifsnyder v. Pittsburgh Outdoor Adver. Co., 173 A.2d
319 (Pa. 1961) and In re Jones & Laughlin Steel Corp., 412 A.2d 1099 (Pa.
1980), predate some of the significant amendments to the PBCL. AMP offers
no argument that the propositions for which AlliedSignal cited those two
cases are no longer valid. With regard to one of those propositions, AMP
never denies, nor can it, that the right to vote is and remains a
shareholder's most fundamental right.

          This right was central to the district court's holding in Norfolk
Southern Corp. v. Conrail, Inc., Civ. A. Nos. 96-7167 and 96-7350 (E.D. Pa.
Dec. 17, 1996) (A 543-550.) AMP argues, however, that Conrail "has no
bearing on the issue" before the court, because the action enjoined by the
district court in Conrail was not a nonredemption or a nullification
provision, but instead was Conrail's refusal to fix a date for a
shareholder meeting. (AMP Br. at 38.) AMP does not discuss the fact that
Conrail was so enjoined because, by delaying the shareholder meeting,
Conrail was attempting to forestall an unfavorable shareholder vote until
such a time as the vote would favor Conrail's merger proposals. Conrail,
then, contrary to AMP's statement, clearly bears on the question of whether
AMP's board may attempt to frustrate a merger by tying the triggering of an
irredeemable poison pill to a shareholder vote in favor of proposals
designed to facilitate the merger. Conrail also confirms the importance of
the shareholders' right to vote, even after the amendments to the PBCL.

          AMP's attempt to distinguish this Court's decision in IBS
Financial Corp. v. Seidman & Assocs., L.L.C., 136 F.3d 940 (3d Cir. 1998)
also falls short. AMP notes correctly that the Court in IBS applied New
Jersey law and concluded that New Jersey courts would follow a "heightened
scrutiny" test in cases where "a board's action [is] primarily motivated by
a desire to frustrate shareholder franchise."(FN13) Id. at 949. AMP
distinguishes IBS by noting that Pennsylvania has specifically rejected
this test, but fails to explain that both Pennsylvania and New Jersey have
done so and that they have done so only in the context of an alleged breach
of fiduciary duty, not in the context of voting rights. See id. at 949; see
also PBCL ss. 1715(d). Furthermore, Pennsylvania law, as the Court in IBS
noted about New Jersey law, see 136 F.3d at 949-50, has the same high
regard for the shareholders' right to vote, see Reifsnyder, 173 A.2d at
149, and, in this respect, is patterned on Delaware law. See A 1186.

- ----------
13   The test derives from Blasius v. Atlas Corp., 564 A.2d 651 (Del. Ch.
     1998).

          AMP argues that AlliedSignal's reliance on Carmody v. Toll
Brothers, Inc., C.A. No. 15983, 1998 Del. Ch. LEXIS 131 (Del. Ch. July 24,
1998) is misplaced because Carmody applies Delaware law. Delaware law does
differ from Pennsylvania law in some regards, but Carmody held that the
"dead hand" provision at issue was unlawful, among other reasons, because
it "purposefully disenfranchises the company's shareholders without any
compelling reason" by rendering the "shareholders powerless to elect a
board that is both willing and able to accept the [merger] bid." 1998 Del.
Ch. LEXIS 131, *42-43. This particular holding in Carmody was based on the
very same Blasius standard adopted and applied in IBS. See id. at *42. The
holding is not based on the Delaware take-over standards rejected in
Pennsylvania. Thus, Carmody's conclusion on this point is particularly
powerful, especially in light of the fact that the nullification and
nonredemption provisions are significantly more draconian than a mere "dead
hand."

          Finally, AMP criticizes AlliedSignal's distinction of Invacare
Corp. v. Healthdyne Technologies, Inc., 968 F. Supp. 1578 (N.D. Ga. 1997).
In doing so, however, AMP misstates the statutory basis for the Invacare
decision. AlliedSignal pointed out that the Invacare decision was based on
Georgia's BCL which, unlike the PBCL, vested power to fix the terms of a
poison pill solely in the board of directors. AMP asserted that this
distinction was unwarranted because the Georgia statute at issue in that
case "is closely analogous to Pennsylvania's statute in its broad grant of
authority to a board to fix the terms of a rights plan." (AMP Br. at 40.)
In making this argument AMP refers this Court to Ga. Code Ann. ss.
14-2-624(a) and quotes that section in a footnote. (AMP Br. at 40 n.28.)
What AMP omits from its brief, however, is the quite different subsection
of the Georgia Code on which the court in Invacare based its decision. That
subsection, Ga. Code Ann. ss. 14-2-624(c), provides that "[n]othing in Code
Section 14-2-601 shall be deemed to limit the board of directors' authority
to determine, in its sole discretion, the terms and conditions of the
rights, options, or warrants issuable pursuant to this Code section." Id.
at 1580 (emphasis added). It was upon this "sole discretion" provision that
the court in Invacare repeatedly relied, not the general statutory
provision cited and quoted to the Court by AMP. AMP simply ignores this
governing provision of the Georgia statutory scheme, essential to the
Invacare ruling and without analog in Pennsylvania law, but nevertheless
represents to this Court that "the Georgia statute is closely analogous to
Pennsylvania's statute in its broad grant of authority to a board to fix
the terms of a rights plan." (AMP Br. at 40.)

     C.   EQUITABLE RELIEF IS APPROPRIATE AGAINST THE NONREDEMPTION AND
          NULLIFICATION PROVISIONS.

          AlliedSignal's Opening Brief demonstrates that the undisputed
facts of record establish the prerequisites for injunctive relief against
the nonredemption and nullification provisions. AMP's brief offers no
response at all to AlliedSignal's showing that the deprivation of
shareholder voting rights accomplished by the nonredemption and
nullification provisions, in and of itself, constitutes irreparable harm.
See International Banknote Co. v. Miller, 713 F. Supp. 612, 623 (S.D.N.Y.
1989) (irreparable harm from "frustrating [shareholders'] attempt to obtain
representation on the board"). Moreover, AMP concedes that the
nonredemption and nullification provisions could delay AlliedSignal's
tender offer for one year, which constitutes irreparable harm to both
AlliedSignal and AMP's shareholders. See Kennecott, 637 F.2d at 183-84, 188
(finding irreparable harm because of threat of delay to a tender offer).

                                 CONCLUSION

          AMP shareholders have before them a highly beneficial offer from
AlliedSignal. However, unless and until this Court grants the relief
requested in this appeal, particularly with respect to the district court's
injunction of AlliedSignal's consent solicitation, those shareholders
cannot even vote on the steps necessary to allow the shareholders to accept
that offer. That is not, and cannot, be the law in Pennsylvania.
Accordingly, AlliedSignal respectfully requests that this Court vacate the
district court's injunction so that AlliedSignal's consent solicitation can
proceed, reverse the district court's orders denying the injunctions sought
by AlliedSignal, and reverse the district court's judgment declaring
AlliedSignal's Shareholder Rights Plan unlawful.

                                               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
                                               (215) 994-4000

                                                         and

                                               Arlin M. Adams
                                               SCHNADER HARRISON
                                                 SEGAL & LEWIS
                                               1600 Market Street, Ste. 3600
                                               Philadelphia, PA 19103
                                               (215) 751-2000
Dated: October 23, 1998                        Attorneys for AlliedSignal and
PMA

                            TABLE OF AUTHORITIES

                                   CASES

Baker, Watts & Co. v. Miles & Stockbridge, 876 F.2d 1101
     (4th Cir. 1989) ......................................................6

Blasius v. Atlas Corp., 564 A.2d 651 (Del. Ch. 1998) .....................21

Carmody v. Toll Brothers, Inc., C.A. No. 15983, 1998 Del. Ch.
     LEXIS 131 (Del. Ch. July 24, 1998) ..............................21, 22

Casey v. Planned Parenthood of Southeastern Pa., 14 F.3d 848
     (3d Cir. 1994) .......................................................4

Confer v. Custom Engineering Co. Employee Health Benefit Plan,
     760 F. Supp. 75 (W.D. Pa.) ..........................................21

Edgar v. MITE Corp., 457 U.S. 624 (1982) .................................10

Enterra Corp. v. SGS Associates, 600 F. Supp. 678
     (E.D. Pa. 1985) .................................................19 n.2

Great Western United Corp. v. Kidwell, 577 F.2d 1256
     (5th Cir. 1990) ......................................................6

Gridley v. Cleveland Pneumatic Co., 127 F.R.D. 102 (M.D. Pa. 1989) .......22

Hyde Park Partners, L.P. v. Connolly, 839 F.2d 837 (1st Cir. 1988) ........5

IBS Financial Corp. v. Seidman & Associates, L.L.C., 136 F.3d 940
     (3d Cir. 1998) ......................................................21

In re Jones & aughlin Steel Corp., 412 A.2d 1099 (Pa. 1980) ..............20

International Banknote Co. v. Miller, 713 F. Supp. 612 
     (S.D.N.Y. 1989) .....................................................23

Invacare Corp. v. Healthdyne Technologies, Inc., 968 F. Supp.
     1578 (N.D. Ga. 1997) ........................................14 n.7, 22

Kennecott Copper Corp. v. Curtiss-Wright Corp., 584 F.2d 1195
     (2d Cir. 1978) .......................................................6

Kennecott Corp. v. Smith, 637 F.2d 181
     (3d. Cir. 1980) ..........................................5, 10, 11, 23

Keyser v. Commonwealth National Financial Corporation, 644 F.
     Supp. 1130 (M.D. Pa 1986) ......................................19 n.12

Norfolk Southern Corp. v. Conrail, Inc., CA No. 96-7167, 1997 U.S.
     Dist. LEXIS 978 (E.D. Pa. Jan. 9, 1997) .........................18, 19

Norfolk Southern Corp. v. Conrail, Inc., Civ. A. Nos. 96-7167
     and 96-7350 (E.D. Pa. Dec. 17, 1996) ............................19, 20

Northwest Airlines, Inc. v. Transport Workers Union of America,
     AFL-CIO, 451 U.S. 77, 97 (U.S. 1981) .................................6

Reifsnyder v. Pittsburgh Outdoor Adver. Co., 173 A.2d 319
     (Pa. 1961) ......................................................20, 21

San Francisco Real Estate Investors v. Real Estate Investment 
     Trust of America, 701 F.2d 1000 (1st Cir. 1983) .....................10

TSC Industrial, Inc. v. Northway, Inc., 426 U.S. 438 (1976) ...............6

Young v. Murphy, 161 F.R.D. 61 (N.D. Ill. 1995) ..........................21

                          STATUTES AND REGULATIONS

15 U.S.C. ss. 78n(a) ......................................................5

17 C.F.R. ss. 240.14a .....................................................5

Ga. Code Ann. ss.ss. 14-2-624(a), (c) ....................................22

1 Pa. Cons. Stat. Ann. ss. 1933 ..........................................14

PBCL ss. 1502 ........................................................15, 16

PBCL ss. 1525 ........................................................13, 16

PBCL ss. 1715 ............................................7 n.3, 17 n.10, 21

PBCL ss. 1721 ................................................12, 13, 14, 16

PBCL ss. 1728 ..........................................................7, 8

PBCL ss. 1971-1980 .......................................................17

PBCL ss. 2501.....................................................14, 16 n.9

PBCL ss. 2513 ....................................................13, 14, 16

PBCL ss. 2524 ............................................................12

PBCL ss. 2538 ..........................................................7, 8