SCHEDULE 14A INFORMATION

            Consent Statement Pursuant to Section 14(a) of the
                      Securities Exchange Act of 1934

Filed by the Registrant |_|
Filed by a Party other than the Registrant |X|

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|_| Preliminary Consent Statement
|_| Confidential, for Use of the Commission Only
     (as Permitted by Rule 14a-6(e)(2))
|_| Definitive Consent Statement
|X| Definitive Additional Materials
|X| Soliciting Material Pursuant to Section 240.14a-11(c) or
     Section 240.14a-12

                             AMP Incorporated
- ---------------------------------------------------------------------------
              (Name of Registrant as Specified In Its Charter)

                             ALLIEDSIGNAL INC.
                        PMA ACQUISITION CORPORATION
- ---------------------------------------------------------------------------
   (Name of Person(s) Filing Consent Statement, if other than Registrant)

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                                                            EXHIBIT I

[LOGO OF ALLIED SIGNAL]

                                                          AlliedSignal Inc.
                                                          101 Columbia Road
                                                          Morristown, NJ 07962

NEWS RELEASE

Contact:    Mark Greenberg
            (973) 455-5445

          ALLIEDSIGNAL 3RD-QUARTER EARNINGS PER SHARE ARE UP 16%;
                OPERATING MARGIN EXPANDS TO 13.6% FROM 11.6%

          MORRIS TOWNSHIP, New Jersey, October 15, 1998 -- AlliedSignal
Inc. (NYSE: ALD) today reported record third-quarter earnings per share of
$0.58, an increase of 16% over 1997 third-quarter earnings per share of
$0.50. This was the company's 27th consecutive quarter of 14% or more
growth in earnings per share.

          Sales in the third quarter grew 2% to a record $3.74 billion from
$3.66 billion in the third quarter 1997. Excluding the effects of
divestitures, sales were up 13%.

          Operating margin in the third quarter expanded to a record 13.6%
from 11.6% in the third quarter of 1997. Productivity was 7.4%, also a
quarterly record. Net income increased 13% to $329 million from $292
million. Free cash flow for the third quarter of 1998 was $101 million.
Free cash flow for the first nine months of 1998 was $365 million, a 183%
improvement over the first nine months of 1997, putting the company in an
excellent position to achieve its target of $500 million in free cash flow
for the year.

          "AlliedSignal continues to deliver strong results despite
uncertain conditions in the global economy," said Lawrence A. Bossidy,
Chairman and Chief Executive Officer. "Our strategy of investing in
high-growth, high-margin businesses is paying off, and we're seeing the
advantages of having a diverse portfolio of businesses. While some of our
businesses are facing uncertain economic conditions, others are thriving,
enabling us to deliver our promised 13-to-17% earnings growth. Our earnings
growth is further solidified by record productivity gains stemming
primarily from the continued application of Six Sigma across all functions
of our businesses."

NINE-MONTH RESULTS

          For the nine months ended September 30, 1998, sales of $11.3
billion were up 7% from $10.6 billion in the corresponding year-earlier
period. Excluding the results of the divested automotive safety restraints
business, 1998 nine-month sales increased by 13%. Net income was a record
$979 million, up 14% from $856 million. Earnings per share were up 16% to
$1.70 from $1.47.

          Third-quarter segment results were as follows:

          AEROSPACE SYSTEMS sales grew 15% to $1.24 billion from $1.08
billion in the third quarter of 1997. Net income was up 60% to $162 million
from $101 million.

          Revenue growth was led by strong sales of safety avionics
products and continued aftermarket growth, as well as the acquisition of a
controlling interest in the Normalair-Garrett Ltd. joint venture. Growth in
safety avionics reflects strong demand for the company's exclusive Enhanced
Ground Proximity Warning System (EGPWS) and mandated installations of
Traffic Alert and Collision Avoidance Systems (TCAS) products.

          Strong demand for products in the equipment systems area is
evidenced by: several key contracts announced this quarter, including
environmental control systems for Fairchild Aerospace's 728JET family;
wheel and brake wins for the Boeing 737-Next Generation aircraft; and
growth in engine fuel controls and electrical power and lighting systems.

          Net income expansion reflected sales growth in higher-margin
safety and aftermarket products, as well as the contribution of
productivity, cost control actions and improved factory performance in both
the avionics and equipment systems businesses.

          SPECIALTY CHEMICALS & ELECTRONIC SOLUTIONS sales increased 1% to
$541 million from $536 million. Net income declined 22% to $56 million from
$72 million.

          The growth in sales is attributable to higher sales of
pharmaceutical intermediates, driven by new products and the pharmaceutical
industry's growing trend toward outsourcing the production of
intermediates. Specialty waxes and additives sales were higher, which more
than offset the impact of lower sales of Electronic Materials resulting
from weakness in the semiconductor industry.

          Net income declined largely due to a lower contribution from the
50%-owned UOP joint venture in process technology and lower sales of
advanced microelectronic products and laminates.

          In July, AlliedSignal and Air Products and Chemicals, Inc.
announced plans to form an alliance that will enable both companies to
expand their ability to supply electronic chemicals to semiconductor
customers around the world. AlliedSignal Specialty Chemicals will
exclusively manufacture and supply electronic process chemicals to Air
Products. Air Products will market an entire line of electronic chemicals
and gases to semiconductor customers.

          TURBINE TECHNOLOGIES sales rose 17% to $900 million from $771
million. Net income grew 31% to $68 million from $52 million.

          Revenue growth reflected record deliveries of propulsion engines
for regional and executive aircraft and strong sales of automotive
turbochargers and commercial aircraft auxiliary power units. During the
quarter AlliedSignal announced the introduction of an all-new AS900 engine
for which the company has a committed launch customer. The AS900 will
position AlliedSignal to take advantage of the continuing demand for
business aircraft, including fractional executive jet ownership, and the
increasing use of jet aircraft by regional airlines. Turbocharger sales
growth reflects increased penetration of the turbocharged diesel engine car
market in Europe and the light truck market in North America.

          Net income growth was fueled by volume growth and productivity
gains despite development costs for the TurboGenerator (TM) product line
and for the new AS900 propulsion engine.

          PERFORMANCE POLYMERS sales were flat excluding the impact of
divested businesses. Reported sales declined 14% to $436 million from $509
million. Net income declined to $45 million from $46 million.

          Strength in pharmaceutical and food packaging drove higher sales
of specialty films, which were offset by lower volumes in industrial
polyester due to a strike at one of the company's automotive customers.

          Net income declined slightly due to lower unit volumes, which
were partially offset by continued productivity-driven Six Sigma
initiatives and a more favorable price/cost relationship.

          In July, construction began in Augusta, Georgia for the world's
first large-scale nylon recycling facility, which will increase caprolactam
production by 100 million pounds per year and reduce annual costs by $15
million. The exclusive patented technology will also benefit the
environment by keeping 200 million pounds of discarded carpet out of
landfills each year.

          TRANSPORTATION PRODUCTS sales declined 18% to $619 million from
$757 million, and net income was down to $10 million from $18 million.
Excluding the divested safety restraints business, sales of Transportation
Products grew 12%.

          Sales growth was fueled by: higher sales of Prestone(R) products
and FRAM(R) filters, which benefited from increased advertising and brand
awareness; the acquisition of Holt Lloyd; and continued strength in truck
braking systems.

          Net income declined primarily due to the divestiture of safety
restraints, as well as planned investments in brand advertising,
implementation of a new distribution system and improvements in the
segment's cost structure.

ALLIEDSIGNAL'S OFFER FOR AMP

          On Tuesday, October 13, AlliedSignal acquired 9% of the
outstanding shares of AMP Incorporated, making AlliedSignal the largest
shareowner of AMP. Today marks the record date for AlliedSignal's consent
solicitation, in which AMP shareowners are being asked to expand AMP's
board from its current 11 directors to 28 and to elect AlliedSignal's 17
nominees to the board. These actions represent further progress in
AlliedSignal's effort to acquire AMP.

          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 "Global Most Admired Companies" and the
"100 Best Companies To Work For in America." 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.
- -----------------------------------------------------------------------------

                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 Terrance 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
(Assistant General Counsel) and James V. Gelly (Vice President, Finance,
Aerospace Marketing, Sales & Service).

          As of the date of this communication, AlliedSignal is the
beneficial owner of 20,000,100 shares of common stock of AMP. Mr. Greenberg
is the beneficial owner of 87 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.

                                    ###
10/15/98

                             ALLIEDSIGNAL INC.
                CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
                --------------------------------------------
                   (IN MILLIONS EXCEPT PER SHARE AMOUNTS)

                                                        THREE MONTHS                      NINE MONTHS
                                                     ENDED SEPTEMBER 30                ENDED SEPTEMBER 30
                                                  --------------------------        -------------------------
                                                    1998             1997             1998           1997
                                                  ---------        ---------        ----------    -----------

Net sales                                           $3,741           $3,657           $11,256        $10,562
                                                  ---------        ---------        ----------    -----------

Cost of goods sold                                   2,838            2,840             8,596          8,209
Selling, general and administrative expenses           396              394             1,200          1,145
                                                  ---------        ---------        ----------    -----------

     Total costs and expenses                        3,234            3,234             9,796          9,354
                                                  ---------        ---------        ----------    -----------

Income from operations                                 507              423             1,460          1,208
Equity in income of affiliated companies                19               44                82            140
Other income (expense)                                  (8)              14                (9)            62
Interest and other financial charges                   (38)             (50)             (104)          (131)
                                                  ---------        ---------        ----------    -----------

Income before taxes on income                          480              431             1,429          1,279
Taxes on income                                        151              139               450            423
                                                  ---------        ---------        ----------    -----------

Net income                                            $329             $292              $979           $856
                                                  =========        =========        ==========    ===========

Earnings per share of common stock -
       basic                                         $0.59            $0.52             $1.74          $1.51
                                                  =========        =========        ==========    ===========
Earnings per share of common stock -
       assuming dilution                             $0.58            $0.50             $1.70          $1.47
                                                  =========        =========        ==========    ===========
Weighted average number of shares outstanding -
       basic                                           560              564               562            566
                                                  =========        =========        ==========    ===========
Weighted average number of shares outstanding -
       assuming dilution                               572              581               576            581
                                                  =========        =========        ==========    ===========

                             ALLIEDSIGNAL INC.
                                SEGMENT DATA
                                ------------
                           (DOLLARS IN MILLIONS)

                      THREE MONTHS ENDED SEPTEMBER 30
                      -------------------------------

                                                      NET SALES                       NET INCOME
                                              ---------------------------        ----------------------
                                                 1998            1997             1998         1997
                                              ------------     ----------        -------     ----------

Aerospace Systems                                  $1,242         $1,080           $162           $101

Specialty Chemicals & Electronic Solutions            541            536             56             72

Turbine Technologies                                  900            771             68             52

Performance Polymers                                  436            509             45             46

Transportation Products                               619            757             10             18
                                              ------------     ----------        -------     ----------

     Total Businesses                               3,738          3,653            341            289

Corporate & Unallocated                                 3              4           (12)              3
                                              ------------     ----------        -------     ----------

Total                                              $3,741         $3,657           $329           $292
                                              ============     ==========        =======     ==========

                       NINE MONTHS ENDED SEPTEMBER 30
                       ------------------------------

                                                      NET SALES                       NET INCOME
                                              ---------------------------        ----------------------
                                                 1998            1997             1998         1997
                                              ------------     ----------        -------     ----------

Aerospace Systems                                  $3,576         $2,919           $401           $245

Specialty Chemicals & Electronic Solutions          1,728          1,626            220            259

Turbine Technologies                                2,641          2,242            184            160

Performance Polymers                                1,494          1,507            147            104

Transportation Products                             1,809          2,259             28             80
                                              ------------     ----------        -------     ----------

     Total Businesses                              11,248         10,553            980            848

Corporate & Unallocated                                 8              9            (1)              8
                                              ------------     ----------        -------     ----------

Total                                             $11,256        $10,562           $979           $856
                                              ============     ==========        =======     ==========

                                                            EXHIBIT II

                   IN THE UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT
===========================================================================

                                 NO. ______

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

               ALLIEDSIGNAL INC., a Delaware corporation, and
            PMA ACQUISITION CORPORATION, a Delaware corporation
                                 Appellants

                                     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-CIV-4405

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

                 APPELLANTS' MOTION FOR AN EXPEDITED APPEAL

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

                                                 DECHERT PRICE & RHOADS
                                                 Mary A. McLaughlin
                                                 George G. Gordon
                                                 4000 Bell Atlantic Tower
                                                 1717 Arch Street
                                                 Philadelphia, PA  19103
                                                 (215) 994-4000
                                                 (215) 994-2222 Facsimile

                                                 FRIED, FRANK, HARRIS,
                                                 SHRIVER & JACOBSON
                                                 Alexander R. Sussman
                                                 Barry G. Sher
                                                 One New York Plaza
                                                 New York, New York  10004
                                                 (212) 859-8000
                                                 (212) 859-4000 Facsimile

                 APPELLANTS' MOTION FOR AN EXPEDITED APPEAL
                 ------------------------------------------

          Pursuant to Rule 2 of the Federal Rules of Appellate Procedure,
appellants AlliedSignal Inc. and PMA Acquisition Corporation (collectively
"AlliedSignal") hereby move for an expedited appeal from the October 8,
1998 Order of the United States District Court for the Eastern District of
Pennsylvania, Civil Action Nos. 98-CV-4058 and 98-CV-4405, declaring
illegal the consent solicitation of AMP Incorporated ("AMP") shareholders
on AlliedSignal's "Shareholder Rights Plan" scheduled to commence November
16, 1998, enjoining AlliedSignal's consent solicitation with respect to the
election of directors, scheduled to commence October 15, 1998 and denying
AlliedSignal's request for injunctive relief enjoining certain amendments
to AMP's Shareholder Rights Plan (the "poison pill").

          AlliedSignal respectfully requests that the Court enter the
proposed expedited briefing schedule set forth below.

                        GROUNDS FOR EXPEDITED APPEAL
                        ----------------------------

          At issue in this appeal is the fundamental right of shareholders
to elect directors of their choosing and to structure the system of
governance for the corporation that they own. In connection with
AlliedSignal's announced intention to make a tender offer for all of the
outstanding shares of AMP at $44.50 cash per share, AlliedSignal has also
commenced a consent solicitation which proposes that AMP's shareholders act
by written consent to elect 17 new members to AMP's board (the
"nominees")(the consent solicitation proposals related to the nominees are
referred to as the "Nominees Election Proposals"). The 17 nominees, all
current directors or officers of AlliedSignal, have announced their
intention to support a merger between AMP and AlliedSignal, subject to
their fiduciary duties to AMP. AMP's current board of directors has set a
record date for this consent solicitation of October 15, 1997.

          In an effort to give shareholders an additional vehicle to
express disagreement with the actions of AMP's current directors,
AlliedSignal added to its consent solicitation a proposal that shareholders
amend AMP's By-laws pursuant to ss.1721 of the Pennsylvania Business
Corporation Law ("PBCL"), to place all powers with respect to AMP's poison
pill in the hands of three Shareholders Rights Agents (the "Shareholder
Rights Proposal"). Those Shareholders Rights Agents would amend the poison
pill so that it would not apply to merger proposals approved by a majority
of the shareholders. AMP's current board has set a record date for this
consent solicitation of November 16, 1998.

          In an attempt to entrench themselves in office and to frustrate
the shareholders' ability to vote on the Nominee Election Proposal and the
Shareholder Rights Proposal, AMP's current board of directors made certain
amendments to its poison pill. First, AMP amended its poison pill so that,
if shareholders vote to change the majority of the board of directors
(i.e., vote for the AlliedSignal Nominees), it will become non-amendable
and non-redeemable until it expires in November 1999 (the "nonredemption
provision"). Subsequently, after AlliedSignal added the Shareholder Rights
Proposal to its consent solicitation, AMP amended its poison pill so that,
if shareholders vote to implement the Shareholder Rights Proposal, the
poison pill will become non-amendable and non-redeemable until it expires
(the "nullification provision"). In other words, if shareholders exercise
their franchise in a manner that the existing directors disagree with, they
will be punished and AMP will not be able to be sold until the poison pill
expires.

          On September 11, 1998, AMP moved in the U.S. District Court of
the Eastern District of Pennsylvania for summary judgment in the form of a
declaratory injunction that the Nominee Election Proposals were unlawful
("AMP's Motion"). AMP's Motion was limited to the "Second Claim for Relief"
in its Complaint and was limited to a request for a declaratory judgment.
AMP's Motion did not seek injunctive relief and AMP expressly excluded from
its Motion the federal disclosure claims in the First Claim for Relief in
its Complaint. Similarly, AMP's Motion did NOT include a request for a
declaratory judgment that the Shareholder Rights Proposal was unlawful. On
September 23, 1998, AlliedSignal cross-moved for summary judgment on AMP's
Second Claim for Relief.

          On September 14, 1998, AlliedSignal moved for summary judgment
seeking, among other things, a declaratory judgment that the nonredemption
provision and the nullification provision were unlawful and, in the
alternative, a preliminary injunction enjoining AMP from giving effect to
those provisions.

          On October 8, 1998, the District Court entered the Order being
appealed from which (1) entered a declaratory judgment that the Shareholder
Rights Proposal was unlawful (despite the fact that no such judgment had
been requested, briefed or argued); (2) enjoined AlliedSignal's Nominee
Election Proposals until AlliedSignal's Consent Solicitation Statement
states that its director nominees have a fiduciary duty solely to AMP under
Pennsylvania law and includes a statement from each nominee affirmatively
committing personally to that duty (despite the fact that no such relief
was sought and no relief of any kind was sought on its disclosure claim);
and (3) denied AlliedSignal's request for injunctive relief on the
nonredemption and nullification provisions.

          The Order of the District Court is extraordinary and simply
inappropriate. Indeed, the relief granted on the Nominee Election Proposals
was never requested, briefed or argued. AlliedSignal was deprived of any
opportunity to bring to the Court's attention relevant facts, including an
updated consent solicitation statement, that shows the required disclosure
is unnecessary. Moreover, the District Court's ruling is based on basic
misunderstandings of Pennsylvania law. Thus, if left standing, the District
Court's ruling, and the opinion on which it is based, will infect the
entire corporate election process (the record date for which is October 15,
1998). Indeed, shareholders will be left to rely on the District Court's
fundamental misperceptions in deciding whether or not to vote for the
nominees.

          Moreover, the District Court also erred in denying AlliedSignal's
requested injunctive relief on the nonredemption and nullification
provisions. Those provisions would unlawfully eliminate AMP's ability to
consider tender offers and takeover proposals in direct violation of the
PBCL. Section 1502(18) of the PBCL is clear on this point -- subject only
to limitations imposed by statute or in the articles of incorporation,
every business corporation SHALL have power to accept, reject, respond to
or take no action with respect to tender offers and takeover proposals. See
also PBCL ss.1721 (the powers set forth in ss.1502 are to be exercised by
the board or other persons designated by the shareholders). If the
nonredemption and nullification provisions are given effect no one -- not
the current directors, not new directors, not the shareholders -- could
exercise this power.

          In addition, without expedited relief from the District Court's
erroneous Order, shareholders will vote on the Nominee Election Proposals
with a gun to their head. If they vote in favor of the nominees and the
nominees take their seats on the AMP board, the nonredemption provision
will go into effect and AMP cannot be sold until the poison pill expires.

          Thus, expedited relief from the District Court's October 8, 1998
Order is crucial. The record date for the consent solicitation is October
15, 1998. Owners of shares on that date have 90 days to decide whether or
not to consent to the Nominee Election Proposals. Without expedited relief,
the entire consent solicitation process will be infected by the uncertainty
created by the District Court's rulings and the fundamental
misunderstandings of Pennsylvania law expressed in the opinion. Expedited
relief from this Court is the only way to avoid this and to insure that the
corporate election process is based on the shareholders' analysis of facts
and not on misperceptions of, or uncertainty about, the legal status of the
nominees created by the District Court's erroneous decision.

          In addition, 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). If delay caused by the District Court's decision
frustrates AlliedSignal's tender offer for the company, then AMP's
shareholders will lose the opportunity to sell their shares to AlliedSignal
at a substantial premium to market, and AlliedSignal will 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).

                         PROPOSED BRIEFING SCHEDULE

          For the above reasons, AlliedSignal respectfully requests that
this Court set the following briefing schedule if this Motion is granted.

          (1) Brief for appellants and the appendix thereto to be served
and filed by 5:00 p.m. on October 13, 1998.

          (2) Brief for appellee, and a supplemental appendix with any
record materials relied on by appellee not contained in the appendix filed
by appellants, if any, to be served and filed by 5:00 p.m. on October 15,
1998.

          (3) Reply Brief for appellant to be served and filed by 5:00 p.m.
on October 16, 1998.

          (4) Oral argument, if necessary, to be held as soon as
practicable thereafter.

                                 CONCLUSION
                                 ----------

          For the reasons set forth above - the clear error of the Order of
the district court, the threat of irreparable harm to AlliedSignal and to
AMP's shareholders from delay, and the risk of an incurably tainted
corporate election - appellants respectfully request this Court adopt and
order the proposed expedited briefing schedule above.

                                       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

                                        /s/ Alexander R. Sussman
                                       -------------------------------------
                                       Alexander R. Sussman
                                       Barry G. Sher
                                       Fried, Frank, Harris, Shriver & Jacobson
                                       One New York Plaza
                                       New York, NY  10004
                                       (212) 859-8000
                                       Attorneys for AlliedSignal Inc.

DATED:  October 9, 1998

                                                            EXHIBIT III

                        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' SUBMISSION IN OPPOSITION TO THE LETTER REQUEST
           OF AMP INCORPORATED FOR A TEMPORARY RESTRAINING ORDER
           -----------------------------------------------------

Alexander R. Sussman                               Mary A. McLaughlin
Barry G. Sher                                      George G. Gordon
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON           DECHERT PRICE & RHOADS
(A Partnership Including Professional              4000 Bell Atlantic Tower
Corporations)                                      1717 Arch Street
One New York Plaza                                 Philadelphia, PA  19103
New York, NY  10004                                (215) 994-4000
(212) 859-8000
                      ATTORNEYS FOR ALLIEDSIGNAL INC.

Dated:  October 15, 1998

          Last Thursday, this Court issued a carefully crafted Order
enjoining AlliedSignal's consent solicitation until two specific conditions
were met. Less than a week has gone by since then and AMP has already
sought three additional audiences with the Court -- on the telephone and in
court -- to make oral motions to relitigate the issues decided by the Court
and expand the Court's injunction. AMP's conduct is improper.

          AMP is now desperate because it knows that shareholders
overwhelmingly support AlliedSignal's nominees. In a last ditch effort to
save their jobs -- not the jobs of the rank and file employees which have
been guaranteed by AlliedSignal -- AMP's management is working hard to
delay the corporate election so that it can manipulate the election
process. The Court, however, has already ruled on AMP's motion to declare
the consent solicitation unlawful. Moreover, all these issues raised by AMP
are the subject of the pending appeal. Fundamental fairness dictates that
AlliedSignal, like any other litigant, is entitled to certainty and
finality in judicial proceedings. AlliedSignal has relied on the Court's
Order and complied with its conditions. AMP cannot now come in and ask the
Court to change the rules of the game.

          Moreover, although AMP's latest effort to relitigate the issues
related to the election of directors is styled as a request for a temporary
restraining order,(FN1) AMP fails to establish the single most important
element of such extraordinary relief: IMMINENT AND IRREPARABLE HARM. AMP
has mischaracterized the consent solicitation process to create the false
impression that there is some danger that AlliedSignal's director nominees
may be elected immediately. In reality, AMP shareholders do not even have
consent cards, the consent process will continue for at least two weeks,
and there will be additional time before any elected directors will be
seated. Before the directors could be seated the results of the election
must be certified by an independent inspector of elections. That process
will take days. There simply is no immediate threat of irreparable harm.

- -----------------------
1    At the moment, this request exists only in the form of a letter from
     Jon Baughman to the Court dated October 14, 1998. ("Baughman Ltr. at
     ___.") Although the Court required AMP's counsel to file and serve a
     motion by 5:00 p.m. on that date, AlliedSignal never received any such
     motion.

          The only immediate, and potentially irreparable, harm in this
case will be to the AMP shareholders resulting from a delay in the election
process. The shareholders cannot be deprived of their right to elect
directors of their choice at a time set by the existing AMP Board of
Directors, not AlliedSignal. Under Pennsylvania statutory provisions and
AMP's own articles of incorporation, the shareholders of record as of
today, October 15, have the right to vote and put AMP in the hands of the
board of directors that they want. That may be the current board, but it
also may be the board of directors that AlliedSignal has proposed -- the
eleven existing directors, plus 17 new directors.

          Although there are no events that can happen during the pendency
of the consent solicitation that would deprive this Court of its
jurisdiction to enjoin or invalidate action to be taken by a new AMP board,
there is one event that could deprive this Court of jurisdiction to ensure
that the shareholders' right to vote is not irreparably compromised. This
Court cannot restore a $44.50 all cash offer for all outstanding shares of
AMP if AlliedSignal, in light of the decline in the financial markets, were
to reduce its price or decide not to go forward.

          Two months ago, AMP set October 15 as the record date on the
consent solicitation now at issue. They chose a two-month hiatus before the
formal consent process could begin because they allegedly believed that the
shareholders needed that much time to receive appropriate information from
both the AMP board and AlliedSignal to make an informed vote. The AMP board
has utilized that two-month period and has been constantly in contact with
its shareowners through proxy materials mailed to them, direct personal
contacts, and a number of full-page advertisements in the Wall Street
Journal and other newspapers.

          AMP has had more than ample opportunity to make its arguments to
the Court over the last two months. After full briefing and argument, the
Court ruled in its written opinion and then reaffirmed at the hearing on
Tuesday that the AMP shareholders could elect the AlliedSignal slate and
that the consent solicitation could go forward if the Consent Statement
made two very specific disclosures. AMP, although it could have
cross-appealed that ruling, has not done so.

          AMP has also had more than ample opportunity to make its
arguments to the SHAREHOLDERS over the last two months.

          Enough is enough. Now is the time to let the voters decide and to
let the parties make whatever arguments they want to the Court of Appeals.

                   AMP'S ABUSE OF THE LITIGATION PROCESS

          Since the Court issued its Order last Thursday, AMP has engaged
in a series of tactics amounting to litigation by ambush and has abused the
litigation process. Prior to the issuance of the Court's Order, the Court
offered to be available to answer questions about the Order. Shortly after
receiving the Order, counsel for the parties spoke with the Court and
AlliedSignal's counsel asked the Court if it was correct that the consent
solicitation could go forward if AlliedSignal made the disclosures required
by the Court's Order. The Court confirmed that AlliedSignal could conduct
the consent solicitation process as long as it made the required
disclosures. Based on the Court's statement and the clear wording of the
Order, AlliedSignal agreed the following morning to buy approximately 9% of
the stock of AMP at a cost of $890,000,000. AlliedSignal would not have
made that purchase if AlliedSignal did not believe that the consent
solicitation process could continue as long as it made the required
disclosures.

          Ever since that moment, AMP has engaged in a series of maneuvers
to get the Court to broaden the injunction without ever actually filing a
motion to do so. First, AMP's counsel set up a conference call with the
Court on Friday afternoon without telling counsel for AlliedSignal the
purpose of the call.

          In the course of that telephone conversation, AMP's counsel urged
the Court to broaden its injunction. The Court agreed to have a hearing at
4:30 p.m. on Tuesday, October 13, 1998, and told AMP's counsel explicitly
to give AlliedSignal's counsel, PRIOR TO THE HEARING, sufficient notice of
any proposals AMP intended to make at the 4:30 p.m. hearing.

          At the hearing on Tuesday afternoon, AMP's counsel made three
motions: two written and one oral. Counsel for AlliedSignal received NONE
of those motions before the hearing -- in clear violation of the Court's
directive. After AlliedSignal's counsel had left for Court shortly before
4:00 p.m., two of the motions were apparently faxed to her office: a motion
for expedited discovery and a motion to amend the judgment. There was no
written motion with respect to AMP's third motion, a request to enjoin the
consent solicitation process.

          Yesterday afternoon, counsel for AlliedSignal received a voice
mail from counsel for AMP, saying that counsel for AMP had called the
Judge's chambers, without notifying AlliedSignal's counsel ahead of time,
and arranged for a meeting in the morning. AMP's counsel stated in his
voice mail message that, at the meeting, he would seek a temporary
restraining order to stop AlliedSignal's consent solicitation. When
AlliedSignal's counsel called AMP's counsel and asked to know the basis of
the request for a temporary restraining order, AMP's counsel refused to
tell her even though counsel already had a five-page letter prepared. When
AlliedSignal's counsel complained to AMP's counsel about his calling the
Court without telling her ahead of time and refusing to give a basis for
the TRO request, AMP's counsel quipped: "You're breaking my heart."

          The reason for AMP's conduct is quite clear. AMP knows that its
shareholders have had enough of its poor management and are overwhelmingly
going to give their consents to AlliedSignal. AMP is so desperate that
after the hearing on Tuesday in which the Court clearly said that
AlliedSignal's disclosures complied with its Order and refused to issue an
injunction, AMP issued a press release designed to mislead shareholders and
the public. The press release clearly implied that the Court had enjoined
AlliedSignal from continuing with its consent solicitation. Having implied
to the public that AlliedSignal was enjoined from conducting its consent
solicitation, AMP hours later asked the Court for a hearing to again seek
an injunction.

          AMP is desperately trying to delay the consent solicitation
process to manipulate the corporate election machinery. It is trying to
mislead AMP's shareholders and the public at large. This must stop.

                                  ARGUMENT

          AMP's latest attempt to interfere with the corporate election
process suffers from at least three fatal flaws: (1) The purported premise
of the request for a temporary restraining order -- that AlliedSignal has
failed to comply with the Court's Order -- is demonstrably false; (2) AMP
is not entitled to relitigate issues that have already been decided by this
Court; and (3) AMP cannot show imminent and irreparable harm.

I.   ALLIEDSIGNAL HAS COMPLIED WITH THE ORDER AND AMP'S ATTEMPTS TO 
     RELITIGATE THE INJUNCTION ARE IMPROPER

          The ostensible basis for AMP's current request is that
AlliedSignal has not complied with the disclosure conditions in the Court's
Order. (Baughman Ltr. at 2-4.) AMP knows, however, that AlliedSignal has in
fact complied with the Order and that this Court has acknowledged
AlliedSignal's compliance. (10/13/98 Tr. at 30-31, Tab 1.) Consequently,
AMP's request for a temporary restraining order is nothing more than yet
another (its fourth) bite at the apple in AMP's effort to interfere with
the corporate election process.

     A.   ALLIEDSIGNAL HAS COMPLIED WITH THE COURT'S ORDER

          It is well settled that injunction orders must be "specific in
terms" and "must describe in reasonable detail ... the act or acts sought
to be restrained." Fed. R. Civ. Pro. 65(d). Parties subject to an
injunction order, such as AlliedSignal, are "entitled to fair and precisely
drawn notice of what the injunction actually prohibits because serious
consequences may befall those who do not comply with court orders." Louis
W. Epstein Family Partnership v. KMart Corp., 13 F.3d 762, 771 (3d Cir.
1994) (citation and internal quotation marks omitted). In violation of this
well-settled principle of law, AMP asks this Court to read into the Order a
myriad of requirements that are simply not there.

          Consistent with Fed. R. Civ. Pro. 65(d), the Order described in
detail what AlliedSignal was enjoined from doing and under what
circumstances. In the Order, the Court enjoined AlliedSignal's consent
solicitation until it satisfied two specific conditions: (1) the
AlliedSignal Consent Statement had to state that its director nominees have
a fiduciary duty solely to AMP under Pennsylvania law; and (2) the
AlliedSignal Consent Statement had to include a statement from each nominee
affirmatively committing personally to that duty. The Order contained no
other conditions or requirements of any kind. The plain meaning of the
Order could not be more clear -- if AlliedSignal satisfied the two
conditions, the consent solicitation could go forward. That interpretation
was confirmed by the Court in the October 8 telephone conference
immediately following the issuance of the Order.

          AlliedSignal satisfied the two conditions. On October 13, 1998,
AlliedSignal filed an amended Consent Statement with the Securities and
Exchange Commission which stated that "[t]he Nominees, if elected as
directors of [AMP], WILL OWE A FIDUCIARY DUTY SOLELY TO [AMP] UNDER
PENNSYLVANIA LAW." (Tab 2 at 9.) The Consent Statement, as amended October
13, 1998, also explains that

          Each Nominee has undertaken personally (in writing) to
          be bound by and discharge his or her duty of undivided
          loyalty to [AMP] and has agreed to perform his or her
          duties in good faith, in a manner that he or she
          reasonably believes to be in the best interests of
          [AMP].

(Id. at 9, A-V-1.) The nominees' signed statements are collected at Tab 3.
To make absolutely certain that AlliedSignal satisfied the Court's Order,
AlliedSignal quoted in its entirety in the Consent Statements the portion
of the Court's opinion dealing with the injunction.

          After counsel for AlliedSignal read these provisions into the
record at the October 13, 1998, conference, the Court stated that these
statements complied with the Order, remarking that "I think that's helpful.
That complies." (10/13/98 Tr. at 30-31, Tab 1.) Later in the hearing, the
Court confirmed that "[AlliedSignal] can solicit consents so long as they
have a solicitation that does not include the poison pill." (10/13/98 Tr.
at 42, Tab 1.)

          Unable to challenge seriously AlliedSignal's compliance with the
Order, AMP resorts to (1) questioning the speed with which AlliedSignal
complied; and (2) complaining about AlliedSignal's failure to comply with
requirements that are not in the Order. Neither of these points carries any
weight. The speed with which AlliedSignal complied reflects nothing more
than the fact that the nominees, before consenting to serve as AMP
directors had been committed to their fiduciary duties and that neither
AlliedSignal nor the nominees ever took issue with the propositions that
they were asked to state by the Court. AlliedSignal and the nominees have
always recognized that the directors of a Pennsylvania corporation have a
duty solely to the corporation and that the nominees, if elected, would be
bound by that duty.

          In fact, on October 1, 1998, one week before the Order,
AlliedSignal amended its Consent Statement to state:

          [T]he nominees understand that, in their actions as
          directors of the Company, they should not be guided by
          or take into account any duties or responsibilities
          they may have in other capacities to AlliedSignal or
          its stockholders, but rather are OBLIGATED TO ACT
          SOLELY WITH REGARD TO THEIR DUTIES AS DIRECTORS OF THE
          COMPANY UNDER APPLICABLE PENNSYLVANIA LAW.

(Tab 4 at 8.) Similarly, the Consent Statement, as amended October 1, 1998,
also states:

          Moreover, AlliedSignal has authorized and requested the
          nominees to participate in the consent solicitation and
          understands that their actions as directors of the
          Company must take into account ONLY THE INTERESTS OF
          THE COMPANY AND NOT THE INTERESTS OF ALLIEDSIGNAL
          except to the extent of AlliedSignal's interest as a
          shareholder of the Company in common with other
          shareholders of the Company.

Id. Thus, AlliedSignal's compliance with the Court's Order was quick
because AlliedSignal and the nominees agreed with the statements that the
Court asked them to make.

          AMP also argues that AlliedSignal failed to comply with a number
of other purported "requirements" that were not in the Court's Order.(FN2)
Although AMP attempts to read these requirements into the Order, they are
simply not there. In fact, at the October 13, 1998, conference, the Court
confirmed that it had "not required that [the nominees] do more than pledge
themselves to [their duty]." (10/13/98 Tr. at 42, Tab 1.) It is to avoid
exactly what AMP is trying to do here -- saddle a party with a vague and
ambiguous injunction subject to ever-changing interpretations -- that the
law requires Orders to be specific and precise.

- ----------------------
2    For example, AMP complains (1) that AlliedSignal failed "to recognize"
     that the nominees' duties as AlliedSignal directors are to
     AlliedSignal shareholders, but as AMP directors their duties would be
     to AMP; (2) that AlliedSignal failed "to reflect any awareness" of
     what the nominees' duty of undivided loyalty to AMP would mean in the
     context of a takeover of AMP; and (3) that the nominees did not
     "acknowledge" that AMP shareholder have allegedly not released them to
     act as AMP directors. (Baughman Ltr. at 2.)

          B.   AMP IS NOT ENTITLED TO A MODIFICATION OR RECONSIDERATION 
               OF THE COURT'S ORDER

          Because there is no question that AlliedSignal complied with the
Court's Order, it is clear that what AMP really wants to do is relitigate
the issues decided by the Court on October 8, 1998 and, thereby, DELAY the
election process. The law, however, limits the situations in which a
litigant can take repeated bites at the apple, particularly where, as here,
a party has filed a notice of appeal on the issue in question and
fundamental issues like the right to vote are involved.

          It is well settled that "[a]s a general rule, the timely filing
of a notice of appeal is an event of jurisdictional significance,
immediately conferring jurisdiction on a Court of Appeals and divesting a
district court of its control over those aspects of the case involved in
the appeal." Hudson United Bank v. LiTenda Mortgage Corp., 142 F.3d 151,
158 (1998) (quoting Venen v. Sweet, 758 F.2d 117, 120 (3d Cir. 1985)). In
Venen, the Third Circuit explained that "[t]his judge-made rule has the
salutary purpose of preventing the confusion and inefficiency which would
of necessity result were two courts to be considering the same issue or
issues simultaneously." 758 F.2d at 121. Similarly, once a party has filed
a notice of appeal from the entry of an injunction, the district court may
modify an injunction only in "very limited circumstances" to preserve the
integrity of the proceedings in the court of appeals. See Death Row
Prisoners of Pa. v. Ridge, 948 F. Supp. 1282, 1289 (E.D. Pa. 1996)
(declining under Rule 62(c) to exercise jurisdiction over a motion for
injunctive relief after an interlocutory notice of appeal was filed).

          Even ignoring the fact that AlliedSignal has filed a notice of
appeal, courts generally reject motions that seek merely to relitigate
issues previously decided by the court. For example, courts routinely throw
out motions for reconsideration that seek nothing more than "a second bite
at the apple." See Bhatnagar v. Surrendra Overseas Ltd., 52 F.3d 1220, 1231
(3d Cir. 1995) (rejecting defendant's motion for reconsideration as "a
classic attempt at a 'second bite at the apple'"); Allianz Ins. Co. v.
Pennsylvania Orthopedic Assocs., Inc., No. C.A. 96-7470, 1998 WL 512940, at
*2 (E.D. Pa. Aug. 18, 1998) (Defendants' "attempt at a second bite of the
apple is an abuse of the mechanism of reconsideration, and the Court is
disappointed by the consequent waste of valuable judicial resources.");
Tischio v. Bontex, Inc., No. C.A. 9801608, 1998 WL 462095, at *22 (D.N.J.
June 29, 1998) ("When a motion for reconsideration raises only a
disagreement by a party with a decision of the court, that dispute should
be dealt with in the normal appellate process, not on a motion for
reargument.") (internal quotation marks and citation omitted).

          These same limitations apply regardless of the procedural vehicle
used to relitigate the case. Rule 62(c), for example, permits a district
court to modify an injunction "only when there has been a change of
circumstances between entry of the injunction and the filing of the motion"
and does not permit a party to "relitigate the original issue." Favia v.
Indiana Univ. of Pa., 7 F.3d 332, 337 (3d Cir. 1993) (internal quotation
and citation omitted). In addition, Rule 59(e), an "extraordinary remedy,"
allows a court to alter or amend a judgment only when the court has made a
manifest error of law or fact, there has been an intervening change in the
law, or new evidence has arisen. See NL Indus., Inc. v. Commercial Union
Ins. Co., 935 F. Supp. 513, 516 (D.N.J. 1996); Knepp v. Lane, 859 F. Supp.
173, 175 (E.D. Pa. 1994); see also Ben-Shalom v. Marsh, 881 F.2d 454, 456
(7th Cir. 1989) (a Rule 60 motion for relief from an order "cannot be used
merely to relitigate the merits of the case."); accord Cashner v. Freedom
Stores, Inc., 98 F.3d 572, 577 (10th Cir. 1996).

          Here, none of the conditions that would allow for
reconsideration, modification of an injunction or alteration of a judgment
are present. In fact, AMP does not even attempt to argue that such
conditions exist. Nothing has changed since October 8, 1998, except that
AlliedSignal has complied with the Order. Even AMP's arguments remain the
same: the nominees have "inherent and pervasive" conflicts which will
prevent them from fulfilling their duty to AMP in the context of
AlliedSignal's merger proposal.

          The Court heard these arguments and, after doing so, issued a
carefully fashioned Order requiring AlliedSignal to comply with two -- and
only two -- very specific conditions. AMP's request that this Court now add
to those conditions, after AlliedSignal complied with them and, in reliance
on the Court's Order, purchased $900,000,000 worth of AMP shares, would be
fundamentally unfair and contrary to well settled law.

          C.   THERE IS NO NEED FOR THE NEW DISCLOSURES

          Not only would it be fundamentally unfair to change the Court's
Order at this stage, but it is unnecessary as a matter of federal
disclosure law. AMP's shareholders know who the AlliedSignal nominees are
and their affiliations with AlliedSignal. (Tab 3 at 12-14.) AlliedSignal's
Consent Statement also spells out for shareholders that, in certain
circumstances including the proposed merger and proposals made by third
parties, the nominees may have a potential "conflict of interest." (Id. at
9.) In addition, AMP has made sure that its views on the nominees' alleged
conflicts of interest are part of the "total mix" of information available
to shareholders.

          The only standard by which to assess the adequacy of
AlliedSignal's disclosures is that provided by the federal securities laws.
Without a finding that AlliedSignal's disclosures have violated the federal
securities laws, there is no basis to require additional disclosures or
order any other type of relief. Yet AMP's letter asking for a temporary
restraining order does not even mention federal securities law, let alone
attempt to establish a violation of that law.

          In fact, AlliedSignal's disclosures are sufficient, as a matter
of law, to satisfy its federal disclosure obligations. In Kas v. Financial
Gen. Bankshares, Inc., 796 F.2d 508, 511 (D.C. Cir. 1986), for example, the
plaintiff alleged that defendants' proxy material failed to disclose that
the dual roles of two individuals who served as directors of a target
corporation and as attorneys to, and directors of, the acquiror constituted
a "conflict of interest." The proxy materials, however, disclosed the fact
that these two directors served as directors of the acquiror. See id. at
515. The court held that the proxy material could not "be faulted because
it never uses the actual phrase `potential conflict of interest,'"
explaining that "[T]HE FEDERAL SECURITIES LAWS REQUIRE ONLY THAT THE
VARIOUS ROLES OF [THE DIRECTORS] BE CLEARLY DISCLOSED -- as they were." Id.
at 517. Here, AlliedSignal went beyond Kas: it not only disclosed the
nominees' roles, but also acknowledged the potential conflict of interest.
See Valley Nat'l Bank of Arizona v. Westgate-California Corp., 609 F.2d
1274, 1281-82 (9th Cir. 1979) (holding that proxy material adequately
disclosed the dual position of directors on both acquiror's and acquired's
board and refusing to undo merger transaction).

II.  AMP CANNOT SHOW IMMINENT AND IRREPARABLE HARM

          The only justification for a temporary restraining order is a
"'clear showing of immediate irreparable (not merely serious or
substantial) injury.'" Manganaro v. InteropTec Corp., 874 F. Supp. 660, 662
(E.D.Pa. 1995), (quoting Campbell Soup Co. v. Conagra, Inc., 977 F.2d 86,
91-92 (3d Cir. 1992)). Showing "a risk of mere irreparable harm is not
enough to warrant injunctive relief." Id. Here, AMP simply cannot show that
it will suffer the type of imminent and irreparable harm that would justify
enjoining the consent solicitation.

          Contrary to the misleading picture AMP paints in its request for
relief, AlliedSignal cannot take "quick" control of AMP. (Baughman Ltr. at
4-5.) A basic timetable of the consent solicitation shows that AMP's
shareholders cannot even begin to vote on AlliedSignal's proposal until
several days from today's record date:

          *    Today, October 15, 1996, is the record date for the consent
               solicitation. Shareholders who are record owners as of today
               will be entitled to vote their shares in the solicitation
               BUT THEY CANNOT YET CAST AN EFFECTIVE VOTE

          *    Before these shareholders can actually vote, AMP must
               prepare a list of the record shareholders (essentially a
               voting roll). See PBCL ss. 1764 . At the same time,
               AlliedSignal must distribute blue consent cards (essentially
               the "ballots") to the AMP shareholders on the record list.
               BOTH OF THESE ACTIONS WILL TAKE SEVERAL DAYS AND AMP
               SHAREHOLDERS CANNOT CAST AN EFFECTIVE VOTE UNTIL THEY ARE
               COMPLETED.

          *    Only after the record list is compiled and the consent cards
               are sent out, can AMP shareholders submit consents.

          *    ONCE THE VOTING BEGINS, AMP SHAREHOLDERS MAY REVOKE THEIR
               CONSENTS AT ANY TIME before the certification process
               concludes.

          *    Even once a majority of shareholders give their consent to
               the proposals, before those votes can become effective, they
               must be submitted to an independent inspector of elections
               who may "conduct such reasonable investigation as he deems
               necessary or appropriate for the purpose of ascertaining the
               validity of such Consents." AMP Bylaw 1.7.3. (emphasis
               added)

          *    Only after all of this will the shareholders' vote be
               effective and AlliedSignal's nominees be allowed to take
               their seats on the board.

          *    Moreover, once AlliedSignal's nominees take their seats,
               they cannot, as AMP claims, "sell the company" or consummate
               a merger without FURTHER shareholder approval. See PBCL ss.
               2538; Article X of AMP's Articles of Incorporation.

          Given the stages that remain in the consent solicitation process
before the alleged harms that AMP asserts are even a possibility, AMP is
not threatened with IMMINENT harm of any kind. All that AlliedSignal is
doing now is communicating with shareholders (which AMP is doing in a very
aggressive and continuous manner). The only activity that will be
restrained by AMP's requested TRO is AlliedSignal's ability to solicit
shareholders -- hardly the stuff of imminent and irreparable harm.

          Indeed, the last minute nature of AMP's claim gives the lie to
AMP's claim of irreparable harm. AMP has known for over two months that
October 15 was the record date for the consent solicitation. It has yet to
file a single written MOTION for an injunction barring AlliedSignal's
solicitations of consents. The only motion that it has filed relating to
the solicitation is a motion for summary judgment that the consent proposal
itself is unlawful. The Court DENIED that motion, upholding the
unconditional right of shareholders to elect directors of their choosing.
Yet AMP waited until 5:00 p.m. on the day before the record date -- five
days after the Court issued its Order and four days after AlliedSignal
complied with it -- to send a letter to the Court seeking an expansion of
the existing injunction with which AlliedSignal has already complied. AMP
cannot explain why, having waited over two months to request this relief,
the harm it faces is now suddenly imminent and irreparable.

          On the other hand, enjoining AlliedSignal will cause significant
harm to AMP's shareholders. Indeed, AMP's purpose in seeking a temporary
restraining order is clear: to block AlliedSignal's effort to solicit and
to delay the process so that AMP can continue to manipulate the election.
Yesterday, for example, AMP issued a press release implying that the Court
had found that AlliedSignal failed to comply with the Order and that the
consent solicitation was enjoined. In fact, just the opposite was true.

          At a conference with the Court on October 13, AMP's counsel made
an oral motion to enjoin the consent solicitation until after the Third
Circuit ruled on AlliedSignal's appeal. After argument, the Court DENIED
AMP's motion, stating that AlliedSignal's disclosures complied with the
Court's Order. Immediately after that conference, however, AMP issued a
press release obviously designed to mislead shareholders into believing
that the Court ruled that AlliedSignal had NOT complied with the Order and
that the consent solicitation could not go forward -- EXACTLY THE OPPOSITE
OF WHAT THE COURT HAD ACTUALLY RULED:

          Following a conference held today with the United
          States District Court for the Eastern District of
          Pennsylvania, AMP Incorporated (NYSE:AMP) stated that
          AlliedSignal, Inc. (NYSE:ALD) has not properly complied
          with the Court's order issued on October 8, 1998, and
          that AlliedSignal's consent solicitation remains
          subject to the Court's injunction.

(The press release is attached at Tab 5.)

          Finally, enjoining the consent solicitation would cause
AlliedSignal extraordinary financial harm. AMP's requested relief would
require this Court to expand its Order. In reliance on the clear language
of that Order -- that AlliedSignal could conduct its consent solicitation
process as long as it made the required disclosures -- and on the Court's
confirmation of that understanding, AlliedSignal agreed to buy
approximately 9% of the stock of AMP at a cost of $890,000,000.
AlliedSignal would not have made the purchase had AlliedSignal not believed
that the consent solicitation process could continue as long as it made the
required disclosures. Moreover, the effect of an injunction could be to
upset the whole consent process and bring all the unpredictable
consequences that delay always produces in the acquisition context in terms
of financial risks and equity valuation.

          AMP cannot wait until the last minute to request a change in the
Court's Order when AlliedSignal has taken action in reliance on that Order
in the amount of $890,000,000. AMP is guilty of inexcusable delay.

                                 CONCLUSION

          For the foregoing reasons, AlliedSignal respectfully requests
that AMP's request for a temporary restraining order 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
                                             (215) 994-4000
                                             Attorneys for Defendants

                                                       and

                                             Alexander R. Sussman
                                             Barry G. Sher
                                             FRIED, FRANK, HARRIS,
                                                  SHRIVER & JACOBSON
                                             (A Partnership Including
                                             Professional Corporations)
                                             One New York Plaza
                                             New York, New York  10004-1980
                                             (212) 859-8000

Dated: October 15, 1998

                                                            EXHIBIT IV

                   IN THE UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT

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

==============================================================================
                               NO. 98-______

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

==============================================================================
                 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-CIV-4058
                        Civil Action No. 98-CIV-4405

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                         APPELLANTS' OPENING BRIEF

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FRIED, FRANK, HARRIS,                             DECHERT PRICE & RHOADS
  SHRIVER & JACOBSON                              Mary A. McLaughlin
Alexander R. Sussman                              George G. Gordon
Barry G. Sher                                     4000 Bell Atlantic Tower
One New York Plaza                                1717 Arch Street
New York, New York  10004                         Philadelphia, PA  19103
(212) 859-8000                                    (215) 994-4000
(212) 859-4000 Facsimile                          (215) 994-2222 Facsimile

                             TABLE OF CONTENTS

STATEMENT OF SUBJECT MATTER AND APPELLATE JURISDICTION.......................1

STATEMENT OF RELATED CASES AND PROCEEDINGS...................................2

STATEMENT OF ISSUES PRESENTED FOR REVIEW.....................................2

STATEMENT OF THE CASE........................................................4

STATEMENT OF FACTS...........................................................8

SUMMARY OF ARGUMENT.........................................................16

ARGUMENT....................................................................20

   I.   STANDARD OF REVIEW..................................................20

   II.  THE DISTRICT COURT ERRED IN ENJOINING THE PENDING ELECTION OF
        DIRECTORS UNTIL ALLIEDSIGNAL AND THE DIRECTOR NOMINEES MADE
        ADDITIONAL DISCLOSURES..............................................21

        A.  The District Court Erred In Granting Relief That Had Not Been
            Requested On A Claim That Was Not Included In AMP's Motion......22

        B.  There Is No Evidence That AlliedSignal Violated The Federal
            Securities Laws.................................................23

        C.  The District Court's Injunctive Relief Is Premised On A
            Fundamental Misunderstanding Of Pennsylvania Law................26

          1.  Section 2538 Permits Interested Directors To Vote On
              Transactions With An Interested Shareholder...................27

          2.  The District Court's Premise That The Nominees Cannot Act
              Without Breaching A Fiduciary Duty Is Inconsistent With
              Pennsylvania Law And Standard Corporate Practice..............29

  III.  THE DISTRICT COURT ERRED IN NOT ISSUING A PRELIMINARY INJUNCTION
        AGAINST THE NONREDEMPTION AND NULLIFICATION PROVISIONS..............30

        A.  AlliedSignal's Consent Solicitation Proposals Are Authorized
            By The PBCL, AMP's Articles Of Incorporation, And AMP's Bylaws..30

          1.  The Nominee Election Proposals Are Lawful.....................31

          2.  AlliedSignal's Shareholder Rights Proposal Is Explicitly
              Authorized By Pennsylvania Law................................32

        B.  The Nonredemption And Nullification Provisions Are Illegal As
            They Are Beyond The Power Of A Board Of Directors To Enact And
            Are Impermissible Attempts To Punish Shareholders For
            Exercising Their Voting Rights..................................37

          1.  The Nonredemption And Nullification Provisions Are Illegal
              Restrictions On A Future Board's Power And Responsibilities
              Under The PBCL................................................38

          2.  The Nonredemption And Nullification Provisions Punish
              Shareholders For Voting And Are Therefore Illegal.............42

        C.  AlliedSignal Has Demonstrated The Remaining Prerequisites To
            Injunctive Relief...............................................45

CONCLUSION..................................................................45

           STATEMENT OF SUBJECT MATTER AND APPELLATE JURISDICTION

          This is an appeal from an Order of the United States District
Court for the Eastern District of Pennsylvania (the "district court") dated
October 8, 1998, granting partial summary judgment for AMP Incorporated
("AMP"), entering an injunction against AlliedSignal Inc. ("AlliedSignal")
(in Civil Action No. 98-CV-4405), and denying AlliedSignal's request for
injunctive relief (in Civil Action No. 98-CV-4058). AlliedSignal filed a
Notice of Appeal and a Motion for Expedited Appeal on October 9, 1998.

          The district court had jurisdiction over these matters pursuant
to 28 U.S.C. ss.ss. 1331, 1332 and 1367. AMP is incorporated and has its
principal place of business in Pennsylvania. AlliedSignal and PMA
Acquisition Corp. are Delaware corporations with their principal places of
business in New Jersey. The amount in controversy is in excess of $75,000,
exclusive of interest and costs. AMP's Amended Complaint (C.A. No.
98-CV-4405) includes federal claims (not at issue in this appeal) under the
Securities Exchange Act of 1934. AlliedSignal's Complaint (C.A. No.
98-CV-4058) includes claims under the commerce and supremacy clauses of the
U.S. Constitution. This Court has appellate jurisdiction over the district
court's denial of AlliedSignal's requested injunctive relief and the
district court's entry of an injunction against AlliedSignal pursuant to 28
U.S.C. ss. 1291 and ss. 1292(a). Similarly, this Court has appellate
jurisdiction, pursuant to 28 U.S.C. ss.1292(a), over the district court's
grant of partial summary judgment in favor of AMP because that issue is
inextricably bound to a meaningful appellate review of the district court's
denial of AlliedSignal's requested injunction. See Casey v. Planned
Parenthood of Southeastern Pa., 14 F.3d 848, 855-56 (3d Cir. 1994).

                 STATEMENT OF RELATED CASES AND PROCEEDINGS

             AlliedSignal is not aware of any related appeals.

                  STATEMENT OF ISSUES PRESENTED FOR REVIEW

          1. Did the district court commit an error of law in enjoining
AlliedSignal's consent solicitation until AlliedSignal's Consent Statement
states that its director nominees have a fiduciary duty solely to AMP under
Pennsylvania law and includes a statement from each nominee affirmatively
committing to that duty when:

               (a) AMP never requested injunctive relief, and the court did
not make the necessary findings for such relief;

               (b) AMP expressly did not move for relief on its federal
disclosure claims and, thus, AlliedSignal did not have an opportunity to
brief, argue or develop a record on those claims;

               (c) The record shows that AlliedSignal's disclosures were
adequate as a matter of law; and

               (d) The district court's ruling is premised on an erroneous
interpretation of Pennsylvania law?

          2. Did the district court err in granting summary judgment in the
form of a declaratory judgment that AlliedSignal's Shareholder Rights
Proposal was unlawful (in which case review is plenary) when:

               (a) AMP had not moved for summary judgment on AlliedSignal's
Shareholder Rights Proposal or requested a declaratory judgment; and

               (b) The Shareholder Rights Proposal is expressly authorized
by ss. 1721 of the Pennsylvania Business Corporation Law ("PBCL")(FN1) and
AMP's own Articles of Incorporation?

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1    Pursuant to FRAP 28(f) and Local Rule 28.1(a)(iii), the relevant
     statutory sections of the PBCL are collected at Tab 4 in the
     accompanying Addendum to Appellant's Opening Brief.

          3. Did the district court commit an error of law by denying
AlliedSignal's request for injunctive relief enjoining the nonredemption
and nullification provisions of AMP's Shareholder Rights Plan ("poison
pill") when:

               (a) In direct violation of ss.ss. 1721 and 1502(18) of the
PBCL, the nonredemption and nullification provisions make it impossible for
the directors to exercise their power to consider fully, reject, accept or
otherwise respond to a tender offer or proposed acquisition;

               (b) The nonredemption provision is a direct interference
with the right of shareholders under ss. 1725 of the PBCL to elect
directors of their choosing; and

               (c) The nullification provision is a direct interference
with the explicit right of shareholders under ss. 1721 of the PBCL to
decide who can exercise corporate powers and to place such powers in the
hands of individuals other than the board of directors?

                           STATEMENT OF THE CASE

          This appeal concerns AlliedSignal's consent solicitation of AMP
shareholders (1) to elect new directors to AMP's board and (2) to adopt a
bylaw transferring the power of AMP's directors over AMP's "poison pill"(FN2)
to an independent group of "Shareholder Rights Agents." It also concerns
the legality of two amendments to AMP's poison pill adopted by AMP's board
of directors, both designed to render those consent solicitation proposals
ineffective.

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2    A poison pill, commonly adopted by publicly traded corporations in the
     form of a "shareholder rights agreement," is designed to repel, or at
     least delay, takeover attempts that are not approved by the board of
     directors. In general terms, a poison pill works as follows: if an
     acquiring entity (the "acquiror") acquires more than a specified
     percentage of a target company's stock (a "triggering event"), each
     share of the stock other than stock held by the acquiror carries with
     it a "right" to acquire newly-issued shares of the company's stock at
     half price and/or, once a merger is consummated, newly-issued shares
     of the acquiror's stock at half-price. Once triggered, these rights
     place huge amounts of half-price stock in the hands of the target's
     shareholders, thereby diluting the interest of the acquiror and making
     it economically prohibitive for the acquiror to complete its
     acquisition. All poison pills include a "redemption" provision that
     allows a target company's board of directors to extinguish the poison
     pill rights in order to permit a sale or merger of the company that is
     approved by the board.

          In early August 1998, AlliedSignal announced an unsolicited,
all-cash tender offer for all outstanding shares of AMP. In addition to the
tender offer, AlliedSignal announced a consent solicitation to obtain AMP
shareholders' consent to the election of new directors to AMP's board (the
"Nominee Election Proposals"). The consent procedure, which is specifically
authorized by Pennsylvania law and AMP's own Articles of Incorporation,
allows AMP's shareholders to act by written consent without calling a
meeting. The purpose of the consent solicitation, a strategy that is common
in takeover contests when the target company has a poison pill, is to
permit the shareholders to place new directors on AMP's board who would
redeem the pill and allow the shareholders to vote on a merger proposal
between AMP and AlliedSignal or permit AlliedSignal to complete its tender
offer.

          On August 4, 1998, AlliedSignal filed a complaint (C.A. No.
98-CV-4058) against AMP, alleging that AMP's poison pill was illegal
because it contained a "dead hand" provision preventing newly elected
directors from amending or redeeming the pill.(FN3) In response to
AlliedSignal's tender offer and consent solicitation, the AMP board of
directors amended AMP's poison pill to provide that, if AMP's shareholders
voted to elect the AlliedSignal nominees, then ALL directors would be
prevented from amending or redeeming the pill until it expires in November
1999 (the "nonredemption provision").

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3    The dead hand provision provided that the poison pill could be amended
     or redeemed only by a majority of the directors in office before a
     hostile takeover began or by their chosen and approved successors.

          AlliedSignal then amended its consent solicitation to add a
proposal, termed the "Shareholder Rights Proposal," asking that
shareholders amend AMP's Bylaws, pursuant to ss. 1721 of the PBCL and
Article VII of AMP's Articles, to place all powers with respect to AMP's
poison pill in the hands of three "Shareholder Rights Agents." These agents
would then amend the poison pill so that it would not apply to tender
offers or merger proposals effectively approved by a majority of the
outstanding shares. In response, AMP's board again amended the poison pill
to provide that, if AMP's shareholders voted to adopt this bylaw, then all
power to amend or redeem the poison pill, whether exercised by directors or
by Shareholder Rights Agents, would be lost until the poison pill expires
(the "nullification provision"). AlliedSignal amended its complaint to
challenge both amendments to AMP's poison pill.

          On August 21, 1998, AMP filed a complaint against AlliedSignal
and PMA Acquisition Corporation, alleging that AlliedSignal's tender offer
and consent solicitation materials were false and misleading under federal
law (AMP's "First Claim for Relief") and that AlliedSignal's Nominee
Election Proposals were unlawful because AlliedSignal's nominees have an
inherent conflict of interest with AMP (AMP's "Second Claim for Relief").
AMP amended its complaint on September 22 to add two additional claims, one
regarding the legality of the Shareholder Rights Plan and the other
regarding the ability of AlliedSignal to vote any AMP shares it purchases.

          On September 11, 1998, AMP moved for partial summary judgment in
the form of a declaratory judgment. AMP's motion was limited to its Second
Claim for Relief regarding the nominees' alleged "inherent conflict of
interest" and was limited to a request for a declaratory judgment. AMP's
motion did not seek injunctive relief, and AMP expressly excluded from its
motion the federal disclosure claims in its First Claim for Relief.
Similarly, AMP did NOT include a motion for a declaratory judgment that the
Shareholder Rights Proposal was unlawful. On September 23, 1998,
AlliedSignal cross-moved for summary judgment on AMP's Second Claim for
Relief.

          On September 14, 1998, AlliedSignal moved for a preliminary
injunction and summary judgment on the claims in its complaint, seeking to
enjoin and declare illegal both amendments to AMP's poison pill. AMP
cross-moved for summary judgment on these claims.

          On October 8, 1998, after hearing argument, the district court
issued an Order disposing of all pending motions and certain "motions" that
had not been filed. First, although AMP had never moved for a judgment that
AlliedSignal's Shareholder Rights Proposal was unlawful, the district court
stated that it was "grant[ing]" AMP's non-existent "motion" and declared
the Shareholder Rights Proposal illegal. Despite the fact that the
Shareholder Rights Proposal was specifically predicated on authority
granted to shareholders under PBCL ss. 1721, the district court's opinion
did not even mention that section. Instead, the basis for the court's
holding was that, although the Shareholder Rights Proposal was specifically
denominated as a bylaw amendment, it actually "constitut[ed] an attempt to
propose an amendment to AMP's Articles of Incorporation," which the court
noted "cannot be done by shareholders." (Op. at P. 46.) AMP never made this
argument.

          Second, even though AlliedSignal had never argued that AMP's
directors had breached their fiduciary duties, the court held that the two
amendments to AMP's poison pill were not a breach of the directors'
fiduciary duties and were not (as AlliedSignal had argued) ultra vires. The
holding as to each poison pill amendment was based in part on the court's
conclusion that each of AlliedSignal's consent proposals was unlawful. (Op.
at P. 49-50.)

          Third, although AMP had specifically declined to move on the
disclosure claims in its complaint, the district court, without notice or
hearing and without a record of AlliedSignal's current disclosures, held
that AlliedSignal had not disclosed "unequivocally" that its nominees to
AMP's board would owe exclusive fiduciary duties to AMP under Pennsylvania
law. Without making any findings as to the materiality of this "omission,"
the court ordered AlliedSignal's consent solicitation enjoined until such a
disclosure was made. In addition, without citing any precedent or
authority, the court also conditioned its injunction on AlliedSignal's
producing statements by "each individual nominee affirmatively committing
personally to that duty." (Order at 2.)

          Fourth, the district court denied AlliedSignal's motion for a
declaratory judgment and preliminary injunction, finding that AMP's
nullification and nonredemption amendments to its poison pill were
permissible under Pennsylvania law. Incorrectly characterizing the pill
amendments as imposing only "voting disqualifications for interested
directors" (Op. at P. 56), the district court's opinion ignored the fact
that the pill amendments prevent all directors -- interested or
disinterested -- from redeeming or amending the pill, in direct derogation
of the powers of current and future boards.

          Finally, in a provision of its Order from which no appeal is
taken, the district court, although recognizing that it had declared
AlliedSignal's Shareholder Rights Proposal illegal in the first provision
of its order, upheld AMP's choice of a record date for that provision and
denied AlliedSignal's request for a preliminary injunction.

                             STATEMENT OF FACTS

          ALLIEDSIGNAL ANNOUNCES A TENDER OFFER FOR AMP. On August 4, 1998,
AlliedSignal announced a tender offer for all outstanding shares of AMP at
a price of $44.50 cash per share (the "Initial Offer"), totaling
approximately $10 billion. (A 1140.) The $44.50 price represented a premium
of more than 55% over the price of AMP's stock before the announcement of
the offer. (A 1140-41.)

          AlliedSignal's Initial Offer was subject to several conditions.
These conditions included redemption of the poison pill. (A 81-84.) On
August 21, 1998, AMP's board of directors rejected the Initial Offer,
preventing the conditions of the Initial Offer from being fulfilled. (A
237.) Despite the opposition of the AMP board, by the expiration date of
the Initial Offer, AMP's shareholders had tendered 72% of AMP's outstanding
shares to AlliedSignal, an overwhelming indication of support for the
proposed business combination with AlliedSignal. (A 1141-42.)

          Because the opposition of AMP's board prevented AlliedSignal from
purchasing any shares, AlliedSignal revised its tender offer on September
14, 1998 (the "Amended Offer"). In the Amended Offer, AlliedSignal offered
to purchase up to 40 million shares of AMP stock (approximately 18% of
AMP's outstanding common shares) at $44.50 per share. (A 763.) The planned
purchase of 18% of AMP's stock was just below the number of shares
AlliedSignal could acquire without triggering AMP's poison pill. (A 1142.)

          On September 18, 1998, in response to AlliedSignal's Amended
Offer, AMP amended its poison pill to lower the percentage of shares
necessary to trigger the poison pill from 20% to 10%. As a result,
AlliedSignal announced a revision of its Amended Offer reducing the number
of shares it would purchase to 20 million at $44.50 per share,
approximately 9% of AMP shares. (A 1138-39.) The Amended Offer has closed,
and AlliedSignal is in the process of purchasing the 20 million shares on a
pro rata basis. After AlliedSignal completes its purchase of the 20 million
shares under the Amended Offer, it intends to commence a new tender offer
for all remaining AMP shares at $44.50 per share. (A 1142.)

          ALLIEDSIGNAL ANNOUNCES A CONSENT SOLICITATION OF AMP SHAREHOLDERS
TO ELECT ADDITIONAL DIRECTORS TO AMP'S BOARD. At the time of its Initial
Offer, AlliedSignal also announced its intention to conduct a consent
solicitation to gain control of AMP's board.(FN4) (A 1148.) A consent
solicitation is a procedure specifically authorized by Pennsylvania law and
AMP's Articles of Incorporation that allows shareholders, without the
necessity for a meeting, to authorize corporate actions by submitting
written consents (effectively, ballots). See PBCL ss. 2524; Article IX of
AMP's Articles of Incorporation. (A 554.) Because consent solicitations are
subject to federal proxy rules, AlliedSignal filed a preliminary Consent
Statement with the Securities and Exchange Commission ("SEC"). (A at 554.)
When effective, that Consent Statement will be provided to all AMP
shareholders. The AMP board of directors has filed a Consent Revocation
Statement with the SEC, which also will be provided to AMP shareholders. (A
1153.)

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4    Consent solicitations or proxy contests to elect new members to a
     target company's board are a common part of a takeover bid. See, e.g.,
     Shawn C. Lese, Preventing Control from the Grave: A Proposal for
     Judicial Treatment of Dead Hand Provisions in Poison Pills, 96 Colum.
     L. Rev. 2175, 2175 (1996) ("[T]oday, [hostile bidders'] method for
     gaining control usually involves commencing a tender offer in
     combination with a proxy or consent solicitation."); Steven Lipin,
     More Potent Weapons Dwell in Takeover Arsenal, Wall St. J., Sept. 7,
     1995, at C1 ("'The joining of proxy or consent solicitations with
     takeover bids is almost standard operating procedure now.'") (quoting
     Peter Atkins of Skadden, Arps, Slate, Meagher & Flom, currently AMP's
     principal corporate legal advisors in connection with AlliedSignal's
     offer). (A 722.)

          AlliedSignal's consent solicitation includes the Nominee Election
Proposals, which essentially propose that AMP's shareholders elect an
additional 17 persons to AMP's board of directors. (A 768-73, 784.) These
17 nominees are all current officers or directors of AlliedSignal. (A
770-73.) Twelve of the 17 nominees, however, are outside directors of
AlliedSignal and do not hold management positions within the company.(FN5) (A
770-73.) Once elected, the 17 nominees will constitute a majority of AMP's
board. The purpose of the consent solicitation is no secret: all 17
nominees have announced their intention, subject to their fiduciary duties
to AMP, to support a merger of AMP and AlliedSignal. (A 761, 763, 769.)

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5    The qualifications of the 17 nominees are not in question. All 17 have
     held corporate positions of responsibility. Most have held executive
     and board positions with large U.S. companies including: Bell Atlantic
     Corporation, General Electric Corporation, The Prudential Insurance
     Company of America, American Home Products Corporation, CVS
     Corporation, Kraft Foods, Inc., Bankers Trust Company, GTE
     Corporation, Merrill Lynch & Co., Viacom, Inc., Schering-Plough
     Corporation, The Chase Manhattan Corporation, Deere & Company,
     Champion International Company, Digital Equipment Corporation and The
     Federal Home Loan Mortgage Corporation. (A 770-73.) Ten are current or
     former chief executive officers; one is a former member of the Joint
     Chiefs of Staff; one is a former astronaut; and another is the
     Chancellor of the University of California, Santa Barbara. (A 770-73.)

          Even if the nominees are elected by AMP shareholders, however,
they cannot effect a merger with AlliedSignal without a shareholder vote.
Indeed, they first must undertake a process by which the entire board,
including the "current" directors, reviews the desirability of submitting a
merger proposal to AMP's shareholders under the facts and circumstances
then existing. Under AMP's Articles of Incorporation, unless an acquiror
owns 80% or more of AMP's shares, any merger agreement requires the
affirmative vote of 66 2/3% of the votes cast by AMP's shareholders
entitled to vote. (A 554.) Also, if the merger were at a price below the
highest price that AlliedSignal has paid for AMP shares, it would require a
majority vote of disinterested directors (i.e. not including the nominees)
or of disinterested shareholders (i.e. not including AlliedSignal). See
PBCL ss. 2538. In addition, if a merger is consummated involving all or
part cash consideration (and AlliedSignal contemplates an all cash merger),
the PBCL provides a specific procedure for a shareholder to object to the
merger and obtain the rights and remedies of a dissenting shareholder,
including the right to demand payment of the "fair value" of his or her
shares. See PBCL ss.ss. 1571-80, 1930(a).

          ALLIEDSIGNAL HAS DISCLOSED THE MATERIAL FACTS ABOUT THE NOMINEES
IN ITS CONSENT SOLICITATION. AlliedSignal's Consent Statement, as
originally filed, fully describes the material facts regarding the
nominees, including their ties to AlliedSignal and their intentions
regarding a merger between AlliedSignal and AMP. The Consent Statement
includes (1) the identity of each nominee and (2) for each nominee, a
description of his or her professional background, including his or her
affiliation with AlliedSignal. (A 770-73.) In addition, the Consent
Statement discloses that, subject to their fiduciary duties:

          [t]he nominees intend, if elected as directors of
          [AMP], to cause [AMP] to enter into and consummate a
          merger or similar business combination (a "Proposed
          Merger") with AlliedSignal as soon as reasonably
          practicable and under circumstances in which [AMP's
          poison pill] would not be triggered.

(A 763.)

          AlliedSignal's Consent Statement also explains to shareholders
that "AlliedSignal's primary purpose in seeking to elect the Nominees to
the [AMP] Board is to facilitate the consummation of the Second Offer and
Proposed Merger" and spells out for shareholders that the nominees, in
certain circumstances, may have a potential "conflict of interest." (A
769.) The Consent Statement further discloses that the nominees do not have
any plans with respect to the actions they may take if such circumstances
occur, but that they "intend to discharge their obligations owing to [AMP]
under Pennsylvania law and in light of then prevailing circumstances,
taking into account the effects of any actions taken on [AMP's]
shareholders and other stakeholders." (A 769.)

          On October 1, 1998, AlliedSignal amended its Consent Statement to
expand its disclosures. The Consent Statement, as amended October 1, 1998,
explains that:

          [T]he nominees understand that, in their actions as
          directors of the Company, they should not be guided by
          or take into account any duties or responsibilities
          they may have in other capacities to AlliedSignal or
          its stockholders, but rather are OBLIGATED TO ACT
          SOLELY WITH REGARD TO THEIR DUTIES AS DIRECTORS OF THE
          COMPANY UNDER APPLICABLE PENNSYLVANIA LAW.

(Tab 1 at 8.)(FN6) Similarly, in disclosing the circumstances in which the
nominees may face a conflict, the Consent Statement, as amended October 1,
1998, also states that:

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6    AlliedSignal has attached three documents to the accompanying Addendum
     to Appellant's Opening Brief (these documents are cited to throughout
     as "Tab __.") that were not before the district court: (1) the Consent
     Statement, as amended October 1, 1998 (Tab 1); (2) the Consent
     Statement, as amended on October 13, 1998 to comply with the district
     court's Order (Tab 2); and (3) a full-page advertisement placed by AMP
     in the Wall Street Journal on Monday, October 12, 1998 (Tab 3).
     AlliedSignal submits these documents to establish, first, that it has
     complied with the district court's order pending appeal, see Acierno
     v. Mitchell, 6 F.3d 970, 973 n.8 (3d Cir. 1993) (taking notice of
     compliance with injunction); second, that, notwithstanding
     AlliedSignal's compliance, the district court's erroneous Order and
     opinion continues to affect the consent solicitation process; and
     third, that, had AlliedSignal had notice that the district court
     intended to consider AMP's disclosure claims, there was relevant
     evidence that AlliedSignal would have brought to the court's attention
     on the disclosure issues (namely, the Consent Statement, as amended
     October 1, 1998). Given the expedited nature of the present appeal and
     the significance of these intervening events, AlliedSignal requests,
     in connection with the filing of its Opening Brief, that the Court
     supplement the record by taking judicial notice of these materials.
     See Federal Ins. Co. v. Richard I. Rubin & Co., 12 F.3d 1270, 1284 (3d
     Cir. 1993).

          Moreover, AlliedSignal has authorized and requested the
          nominees to participate in the consent solicitation and
          understands that their actions as directors of the
          Company must take into account ONLY THE INTERESTS OF
          THE COMPANY AND NOT THE INTERESTS OF ALLIEDSIGNAL
          except to the extent of AlliedSignal's interest as a
          shareholder of the Company in common with other
          shareholders of the Company.

Id.
- --

          On October 13, 1998, AlliedSignal amended its Consent Statement
to comply with the district court's Order. (Tab 2.) In its Consent
Statement, as amended October 13, 1998 AlliedSignal reinforces its prior
disclosures by stating that "[t]he Nominees, if elected as directors of
[AMP], WILL OWE A FIDUCIARY DUTY SOLELY TO [AMP] UNDER PENNSYLVANIA LAW."
(Id. at 9.) The Consent Statement, as amended October 13, 1998, also
explains that

          Each Nominee has undertaken personally (in writing) to
          be bound by and discharge his or her duty of undivided
          loyalty to [AMP] and has agreed to perform his or her
          duties in good faith, in a manner that he or she
          reasonably believes to be in the best interests of
          [AMP].

(Id. at 9, A-V-1.) In addition, the Consent Statement, as amended October
13, 1998, sets forth in their entirety paragraphs 67-81 of the district
court's Order relating to the Nominee Election Proposals. (Id. at 10-11.)

          THE PROPOSALS IN ALLIEDSIGNAL'S CONSENT SOLICITATION ARE COMMON
CORPORATE PRACTICE AND RECOGNIZED UNDER PENNSYLVANIA AND FEDERAL LAW. The
district court suggests that there is something unusual about the
nomination of acquiror-affiliated directors for the board of a target
company. (Op. P. P. 75-76.) To the contrary, proposals such as those in
AlliedSignal's consent solicitation that ask shareholders to elect
directors affiliated with a potential acquiror to a target's board are
common corporate practice. In fact, there have been at least 18 proxy
contests and consent solicitations in the last five years in which an
acquiror has nominated affiliated persons for election to the target's
board, and in 12 of those situations, the acquiror-affiliated directors
would have made up a majority of the target's board. (A 798-800.) In none
of those situations did the target challenge the proxy or consent
solicitation on the ground that the acquiror-affiliated nominees had a
conflict of interest.

          AMP ATTEMPTS TO PREVENT SHAREHOLDERS FROM VOTING ON THE CONSENT
SOLICITATION PROPOSALS BY AMENDING ITS POISON PILL AND FILING THE CLAIMS AT
ISSUE IN THIS APPEAL. After the announcement of AlliedSignal's Nominee
Election Proposals, AMP's board took several steps to hinder AMP's
shareholders from voting for the nominees. First, AMP's board delayed the
solicitation by setting a record date of October 15, 1998, two months after
the consent solicitation was announced.(FN7) (A 1152.)

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7    The record date determines which AMP shareholders are entitled to give
     consent to the proposals in the consent solicitation and the number of
     outstanding shares for computing whether a majority of such shares
     have consented. Under the terms of AMP's Bylaws, shareholder consents
     are effective for 90 days from the record date. AMP Bylaw 1.7.1 (A
     557.)

          Second, on August 20, 1998, AMP's board announced an amendment to
AMP's poison pill, adding the nonredemption provision that would make the
poison pill non-redeemable and non-amendable, if AMP's shareholders elected
a new majority to the AMP board. (A 688-92.) In that event, AMP's poison
pill could no longer be redeemed by anyone, including the current
directors, until the pill expires in November of 1999, regardless of
whether a majority of the board or a majority of the shareholders supported
a transaction and regardless of the identity of the bidder or the terms of
its offer. Id.

          ALLIEDSIGNAL AMENDS ITS CONSENT SOLICITATION TO PROPOSE A NEW
BYLAW AND AMP'S BOARD AGAIN AMENDS AMP'S POISON PILL TO FRUSTRATE A
SHAREHOLDER VOTE. In response to the AMP board's use of the poison pill to
frustrate the election of new directors, AlliedSignal amended its consent
solicitation to propose that AMP's shareholders adopt the Shareholder
Rights Proposal pursuant to Article VII of the AMP Bylaws and PBCL ss.
1721, transferring the power over AMP's poison pill to three Shareholder
Rights Agents. (A 761-68.) To prevent AMP's shareholders from approving the
Shareholder Rights Proposal, AMP's board again amended AMP's poison pill,
this time adding the nullification provision making the poison pill
non-redeemable and non-amendable if the Shareholder Rights Proposal were
adopted. (A 838s-838v.) AMP's board also set a separate record date of
November 16, 1998 for the Shareholder Rights Proposal. (A 1155.)

                            SUMMARY OF ARGUMENT

          THE DISTRICT COURT'S INJUNCTION. The order of the district court
enjoining the pending consent solicitation exceeded the court's authority
and was an abuse of discretion. There was no motion for such an injunction
before the district court.

          The ostensible basis for issuing the injunction was the court's
conclusion that the disclosures in AlliedSignal's Consent Statement were not
adequate, even though the motion before the Court EXPRESSLY EXCLUDED alleged
disclosure violations.  The parties had neither raised nor briefed that
issue.  As a result, the court's decision did not take into account the
amended Consent Statement on file with the SEC and, thus, it was based on a
clearly erroneous factual premise.  Moreover, the court did not cite a single
authority for its conclusion.  Under clearly established federal securities
law decisions, the disclosures were in fact adequate as a matter of law.

          The court's ruling with respect to the consent solicitation also
was based on an erroneous interpretation of ss. 2538 of the PBCL. The court
held that ss. 2538, which establishes the procedures for approval of a
corporate transaction with an interested shareholder, prevents a director
affiliated with or nominated by the interested shareholder from voting on
the transaction. The court had it exactly wrong. On the contrary, ss. 2538
plainly provides that directors affiliated with or nominated by the
interested shareholder can vote on a transaction with the interested
shareholder and, indeed, can constitute a majority of the favorable votes
of the board even if a majority of disinterested directors do not support
the transaction. In that event, however, one of the following conditions
must occur: a majority of the disinterested shareholders must approve the
transaction; or the price paid to the shareholders must not be less than
the highest price paid by the interested shareholder. Pennsylvania's
"interested director" statute, PBCL ss. 1728, which the district court
never cited, also clearly provides that an interested director can vote on
a merger transaction with a company with which the director is affiliated.

          DENIAL OF ALLIEDSIGNAL'S MOTIONS. The district court denied
AlliedSignal's motion to enjoin the two amendments to AMP's poison pill
that make the pill non-redeemable and non-amendable if the shareholders, as
they have a right to do, vote to change control of the board or take away
powers of the board. The denial of the injunction was based, in each
instance, on the erroneous holding that the board of director's action was
a justified response to an "unlawful" proposal. Both proposals are lawful.
The Nominee Election Proposals would amend AMP's Bylaws to enlarge the size
of the board of directors and would elect AlliedSignal's nominees. The
shareholders have a right to take those actions by the express terms of
PBCL ss. 2524, which permits shareholders to act by written consent without
the need for a meeting, provided that the shareholders have that right
pursuant to the company's articles of incorporation. Article IX of AMP's
Articles of Incorporation provides:

          ANY ACTION THAT MAY BE TAKEN AT A MEETING OF THE SHAREHOLDERS or
          of a class of shareholders may be taken without a meeting if
          proper consent is made to the action. ANY SUCH ACTION MAY BE
          TAKEN WITHOUT A MEETING UPON THE WRITTEN CONSENT OF SHAREHOLDERS
          who would have been entitled to cast the minimum number of votes
          that would be necessary to authorize the action at a meeting at
          which all shareholders entitled to vote were present and voting.
          (Emphasis added.)

(A 554.) Neither AMP nor the district court challenges the right of
shareholders to amend the bylaws, nominate directors, or elect directors.

          The district court, however, characterized the proposals as an
attempt by shareholders to propose a plan of merger because the nominees
have stated an intention, subject to their fiduciary duties to AMP, to
pursue a merger with AlledSignal. Once elected, however, the nominees, in
their capacity as AMP directors, will consider whether a merger is in the
best interests of AMP and then decide what action to take, taking into
account all of the facts and circumstances at the time. Nothing in the
proposals themselves commits the nominees to take specific action with
respect to a merger or to take any action inconsistent with their fiduciary
duties. Moreover, it would be astounding if a plan of merger proposed by
the directors after their election, was deemed to be a plan of merger
proposed by the shareholders simply because the directors had "run" for
office on a specific platform and the shareholders had elected them on that
basis.

          With respect to the Shareholder Rights Proposal, which would give
all powers with respect to the poison pill to a committee of Shareholder
Rights Agents, the district court wrongly concluded that PBCL ss. 2513
requires that all powers with respect to a poison pill reside with the
directors. The district court completely ignored the controlling provision,
PBCL ss. 1721, which provides that the shareholders may take away from the
board of director powers otherwise given to the board by statute and vest
those powers in persons of the shareholders choosing.

          Once one concludes that the proposals are lawful and can be
presented to the shareholders, it follows that the two poison pill
amendments, both adopted to prevent the shareholders from acting on the
proposals, exceeded the authority of the directors and encroach upon the
fundamental voting rights of the shareholders. This is not a case about
whether the directors breached their fiduciary duties (as the district
court analyzed it), but rather a case about whether the directors acted
outside their statutory authority by penalizing the shareholders for taking
action clearly within the shareholders' power and in restricting the future
exercise of the board's discretion.

          Under PBCL ss. 1502, the directors have no power to limit their
authority to accept, reject or respond to a proposed acquisition. That is
precisely what the two amendments do: if the shareholders vote as proposed,
then the board has no ability to go forward with any merger until the
poison pill expires, no matter who the other party to the merger is and no
matter what price is offered.

          This Court has held in the past that "actions taken for the
purpose of interfering with the shareholder franchise must be supported by
compelling justification." IBS Fin. Corp. v Seidman & Assocs., L.L.C., 136
F.3d 940, 951 (3d Cir. 1998). There is no such justification here.

                                  ARGUMENT

I.   STANDARD OF REVIEW

          The standard of review of a district court's grant of summary
judgment is plenary. See Iberia Foods Corp. v. Romeo, 150 F.3d 298, 302 (3d
Cir. 1998). The standard of review of both the grant of a permanent
injunction and the denial of a preliminary injunction is abuse of
discretion. See Smith v. Magras, 124 F.3d 457, 460 (3d Cir. 1997)
(permanent injunction); Troster v. Pa. State Dep't of Corrections, 65 F.3d
1086, 1089 (3d Cir. 1995) (preliminary injunction). Abuse of discretion
will be found where "the district court's decision rests upon a clearly
erroneous finding of fact, an errant conclusion of law, or an improper
application of law to fact." Smith, 124 F.3d at 461; see also Troster, 65
F.3d at 1089; AT&T Co. v. Winback and Conserve Program, Inc., 42 F.3d 1421,
1427 (3d Cir. 1994) (vacating district court's denial of preliminary
injunction and noting that "a court of appeals must reverse if the district
court has proceeded on the basis of an erroneous view of the applicable
law") (citation and internal quotation marks omitted).

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

          The district court enjoined the pending consent solicitation on
the ground that AlliedSignal had inadequately disclosed the fiduciary
duties owed by directors under Pennsylvania law. The district court's order
must be reversed for three independent reasons: (1) AMP never made a motion
based on its disclosure claim, and the court did not have the benefit of
briefing, argument, or a full record on this important issue; (2)
AlliedSignal's Consent Statement already included the disclosures required
by federal law and, indeed, the essence of the specific disclosures ordered
by the district court; and (3) the court based its order on a fundamental
misinterpretation of Pennsylvania law.(FN8)

- ----------------
8    The unfounded injunction order causes AlliedSignal continuing
     prejudice in connection with the consent solicitation. Although
     AlliedSignal has amended its consent solicitation to reinforce the
     required disclosures, AMP has already threatened to challenge
     AlliedSignal's compliance with the Order. The Order and opinion also
     send an unwarranted but clear message to AMP's shareholders that they
     have substantial reason in the eyes of the court to be wary of
     AlliedSignal's nominees and not to consent to the nominees. The AMP
     directors have already included the court's decision in its
     solicitation materials opposing AlliedSignal's proposals and yesterday
     published a full-page advertisement in the Wall Street Journal seeking
     to take advantage of the district court's decision. (Tab 3.)

     A.   THE DISTRICT COURT ERRED IN GRANTING RELIEF THAT HAD NOT BEEN
          REQUESTED ON A CLAIM THAT WAS NOT INCLUDED IN AMP'S MOTION

          This Court has cautioned that, "[u]nder our cases, a district
court may not grant summary judgment sua sponte unless the court gives
notice and an opportunity to oppose summary judgment." Otis Elevator Co. v.
George Washington Hotel Corp., 27 F.3d 903, 910 (3d Cir. 1994); see also
Chambers Dev. Co., v. Passaic County Utilities Auth., 62 F.3d 582, 584 n.5
(3d Cir. 1995) (holding that sua sponte summary "judgment cannot be entered
without first placing the adversarial party on notice . . . [and providing]
the party with an opportunity to present relevant evidence in opposition to
that motion"). Failure to afford notice and opportunity to be heard by
granting judgment sua sponte "endanger[s] important rights and . . . [is]
likely to result in judicial inefficiency and deprivation to the rights of
one of the parties." American Flint Glass Workers Union, AFL-CIO v.
Beaumont Glass Co., 62 F.3d 574, 578 n.5 (3d Cir. 1995).

          Here, AMP expressly declined to move on its federal disclosure
claim and stated so in its brief below (alleged "disclosure problems . . .
are not the subject of AMP's present motion") (A 1122) and at oral
argument.(FN9) Thus, the court's sua sponte order deprived AlliedSignal of
the opportunity to present a complete factual record for the court. See
Otis Elevator, 27 F.3d at 910 (unless notice of summary judgment is given,
a party is under no compulsion to "marshall all of the evidence in support
of his claims") (citation and internal quotation marks omitted). In fact,
the court issued its order based on disclosure statements that had already
been supplemented by a later, more detailed public filing that included the
critical core of the disclosures ordered by the district court. (Tab 1 at
8.) That supplemental public filing was not submitted to the district court
because the adequacy of AlliedSignal's disclosures was not at issue in any
pending motion.

- ----------------
9    Counsel for AMP compounded the court's confusion. Although counsel for
     AMP did inform the court at oral argument that there was no motion
     before it concerning AlliedSignal's disclosures, AMP's counsel
     incorrectly suggested that it had filed such a motion:

               THE COURT: Well, there is a motion before me as to
               whether or not there has been full disclosure by
               Allied.

               MR. HARKINS [AMP's COUNSEL]: We haven't brought
               that on to the Court today, BUT YOU'RE ABSOLUTELY
               RIGHT, YOUR HONOR.

     (A 1242) (emphasis added). In fact, AMP has never brought any motion
     regarding AlliedSignal's disclosures.

     B.   THERE IS NO EVIDENCE THAT ALLIEDSIGNAL VIOLATED THE FEDERAL
          SECURITIES LAWS

          In ordering the additional disclosures, the district court did
not make the required finding that the omitted statements would be material
to any shareholder. See SEC Rule 14a-9, 17 C.F.R. ss. 240.14a-9
(promulgated under 15 U.S.C. ss. 78n(a)) (prohibiting false or misleading
statements or omissions "of material fact"); see also General Elec. Co. v.
Cathcart, 980 F.2d 927, 932 (3d Cir. 1992).(FN10) Indeed, no such finding of
materiality was possible in this case.

- ----------------
10   The district court misapplied this test by finding that the omitted
     statements were "material to AMP's motion" instead of material to a
     reasonable shareholder. (Op. at P. 66.)

          An omission is material only "if there is a substantial
likelihood that a reasonable shareholder would consider it important in
deciding how to 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 (U.S 1976). Here, even the version of AlliedSignal's
Consent Statement before the district court disclosed that the nominees
"understand that, as directors of [AMP], each of them has an obligation
under Pennsylvania law to discharge his or her duties as a director in good
faith IN A MANNER HE OR SHE REASONABLY BELIEVES TO BE IN THE BEST INTERESTS
OF [AMP] and with such care, including reasonable inquiry, skill and
diligence, as a person of ordinary prudence would use under similar
circumstances." (A 769.) (emphasis added.) The Consent Statement further
stated that the nominees "intend to discharge THEIR OBLIGATIONS OWING TO
THE COMPANY UNDER PENNSYLVANIA LAW." (A 769.) (emphasis added.) There is no
material difference between AlliedSignal's disclosures and the additional
disclosure ordered by the district court.

          In addition, in its amended Consent Statement that had been filed
with the SEC on October 1 -- before the court's decision -- AlliedSignal
made the following disclosures:

          [T]he nominees understand that, in their actions as
          directors of the Company, they should not be guided by
          or take into account any duties or responsibilities
          they may have in other capacities to AlliedSignal or
          its stockholders, but rather ARE OBLIGATED TO ACT
          SOLELY WITH REGARD TO THEIR DUTIES AS DIRECTORS OF THE
          COMPANY UNDER APPLICABLE PENNSYLVANIA LAW.

(Tab 1 at 8.) Not only does this statement unequivocally state that the
nominees' duty is only to AMP, but it also makes clear that the nominees
understand that they are obligated to act solely with regard to their
duties as directors of AMP. Id.

          Thus, AlliedSignal's disclosures in its original or amended
Consent Statements are sufficient, as a matter of law, to satisfy federal
disclosure obligations. In Kas v. Financial Gen. Bankshares, Inc., 796 F.2d
508, 511 (D.C. Cir. 1986), for example, the plaintiff alleged that
defendants' proxy material failed to disclose that the dual roles of two
individuals who served as directors of a target corporation and as
attorneys to, and directors of, the acquiror constituted a "conflict of
interest." The proxy materials, however, disclosed the fact that these two
directors served as directors of the acquiror. See id. at 515. The court
held that the proxy material could not "be faulted because it never uses
the actual phrase `potential conflict of interest,'" explaining that "[t]he
federal securities laws require only that the various roles of the
[directors] be clearly disclosed -- as they were." Id. at 517. Here,
AlliedSignal went beyond Kas: it not only disclosed the nominees' roles,
but also acknowledged the potential conflict of interest. See Valley Nat'l
Bank of Arizona v. Westgate-California Corp., 609 F.2d 1274, 1281-82 (9th
Cir. 1979) (holding that proxy material adequately disclosed the dual
position of directors on both acquiror's and acquired's board and refusing
to undo merger transaction).

          Moreover, the district court's injunction goes beyond merely
requiring disclosure of omitted facts; it orders AlliedSignal to provide a
"statement from each nominee affirmatively committing personally" to their
exclusive loyalty to AMP. (Order at 2.) Whatever the benefits of having
director candidates pledge exclusive loyalty to the corporation they wish
to serve -- and all AlliedSignal's nominees have willingly made that pledge
- -- a court has no authority (and neither AMP nor the Order identifies any)
to require such a pledge under the federal disclosure laws, or any other
law. In any event, the nominees had already, in effect, made such
attestations. The October 1, 1998 Consent Statement states that "the
nominees understand that . . . [they] are obligated to act solely with
regard to their duties as directors of [AMP]." (Tab 1 at 8.) Such a
statement -- made under the penalties of the securities laws -- is
tantamount to the attestations ordered by the district court.

     C.   THE DISTRICT COURT'S INJUNCTIVE RELIEF IS PREMISED ON A
          FUNDAMENTAL MISUNDERSTANDING OF PENNSYLVANIA LAW

          The district court's ruling on the Nominee Election Proposals is
also premised on an erroneous interpretation of PBCL ss. 2538 and on the
court's mistaken conclusion that the nominees, if elected, will be unable
to support the merger proposal without breaching their fiduciary duties.
The court's opinion is particularly significant because AMP shareholders
may rely on the court's holding in deciding whether or not to vote for the
nominees. Thus, if left to stand, the district court's Order, and the
opinion on which it is based, will likely infect the entire corporate
election process. Shareholders will be left to vote on the central issue of
corporate governance -- who will sit on AMP's board of directors -- based
on the district court's fundamental misperception of Pennsylvania law.

          Indeed, the district court's opinion paints the following
scenario for the shareholders who will be asked to consent to the election
of the nominees: if shareholders elect the nominees, the nominees "may be
disqualified as AMP directors by self-restraint or by judicial restraint,
from voting on or implementing acquisition related transactions." (Op. at
P. 75.) The district court also predicts that, if elected, the nominees
will become "embroiled" in "protracted litigation on each and every action
that relates to acquisition or AMP corporate independence" and "will have
an inherent conflict that will NECESSARILY put them at risk of violating
Pennsylvania's fiduciary duty standard." (Op. at P. P. 68, 73, 76.) The
import of the district court's opinion is clear: if elected, the nominees
cannot do what they were elected to do -- support the AlliedSignal tender
offer or merger proposal -- without violating Pennsylvania law and
breaching their fiduciary duties.

          1.   SECTION 2538 PERMITS INTERESTED DIRECTORS TO VOTE ON
               TRANSACTIONS WITH AN INTERESTED SHAREHOLDER

          Paragraph 56 of the district court's opinion contains the
following blatant misstatement of Pennsylvania law:

          Such disqualifications [of interested directors] have
          been expressed by the Pennsylvania Legislature with
          respect to interested directors in the context of
          voting on a merger transaction. 15 Pa. Cons. Stat. Ann.
          ss. 2538(b). Only disinterested directors may vote to
          approve a plan of merger if the board were asked to
          adopt or reject the same.

Similarly, paragraph 79 states: "Under Section 2538, interested directors
are prohibited from voting on merger transactions." The district court is
wrong. Section 2538 expressly allows directors who are affiliates or
nominees of an interested shareholder ("interested directors") to vote on a
proposed corporate transaction with an interested shareholder.

          Section 2538(a) provides that certain transactions with
interested shareholders "shall require the affirmative vote of the
shareholders entitled to cast at least a majority of the votes that all
shareholders other than the interested shareholder are entitled to cast
with respect to the transaction, without counting the vote of the
interested shareholder." Section 2538(b) then provides three separate
exceptions to the general rule: (1) transactions approved by a majority
vote of the board of directors without counting the vote of interested
directors; (2) transactions in which the consideration to be received by
the shareholders is not less than the highest amount previously paid by the
interested shareholder in acquiring shares; and (3) mergers in which the
interested shareholder owns 80% or more of the outstanding shares.

          Contrary to the district court's conclusion, there is NO language
in ss. 2538 stating that interested directors cannot vote in favor of a
merger. Indeed, if interested directors could not vote in favor of a
merger, there would be no need for the exception in ss. 2538(b)(1) for
transactions approved by a majority of the directors not counting the vote
of interested directors. Without interested directors voting, such
transactions could only be approved by a majority of the disinterested
directors. In fact, under ss. 2538, not only can interested directors vote
on merger proposals, they can cast a majority of the votes in favor of
those proposals even without the support of a majority of "disinterested"
directors so long as (1) the merger proposal is subject to a vote of
disinterested shareholders under ss. 2538(a), or (2) the price offered in
the merger is the highest price paid by the interested shareholder.

          The conclusion that interested directors can vote on a merger
with an interested shareholder is also supported by PBCL ss. 1728. Section
1728, Pennsylvania's "interested director statute," expressly provides that
a "transaction" between a corporation and another company in which one or
more of the first corporation's directors have an "interest"

          shall not be void or voidable solely for that reason,
          or solely because the [interested] director or officer
          is present at or participates in the meeting of the
          board of directors that authorizes the contract or
          transaction, OR SOLELY BECAUSE HIS OR THEIR VOTES ARE
          COUNTED FOR THAT PURPOSE

if one of the specified conditions of the statute is met (emphasis added).
Thus, the interested director statute specifically contemplates that an
acquiror-affiliated director can vote on a merger transaction between a
corporation and an interested shareholder.(FN11) See also Landy v.
Amsterdam, 815 F.2d 925, 930 (3d Cir. 1987) (plaintiff could not maintain a
cause of action merely by showing that two corporations involved in a
merger were controlled by the same trustees).(FN12)

- ----------------
11   The text of the interested director statute is incorporated almost
     verbatim into AMP's own Bylaws at ss. 2.12. (A 564.)

12   AMP argued below that Landy was inapposite, primarily because that
     case involved neither the director's "obligations to their
     corporation" nor a "board packing scheme." This misses the point.
     AMP's arguments are based on the allegation that the nominees'
     affiliation with AlliedSignal create an inherent conflict of interest.
     Landy simply recognizes that Pennsylvania has rejected such a
     simplistic analysis of merger transactions in which directors sit on
     the boards of both companies.

          2.   THE DISTRICT COURT'S PREMISE THAT THE NOMINEES CANNOT ACT
               WITHOUT BREACHING A FIDUCIARY DUTY IS INCONSISTENT WITH
               PENNSYLVANIA LAW AND STANDARD CORPORATE PRACTICE

          A fundamental premise of the district court's opinion appears to
be that the nominees, if elected, would be unable to act without breaching
their fiduciary duties to AMP. For example, according to the court, since
AMP's current directors determined that AlliedSignal's offer was not in
AMP's best interests, the "fiduciary duty" of the current directors "may
well compel legal challenge" to the nominees' actions, if they are elected.
(Op. at P. 77.) That conclusion cannot be correct in the abstract, but can
properly be reached only based upon the deliberations and decisions of the
reconstituted board. There is no presumption of unfair dealing in these
circumstances. The district court's theory ignores entirely the fact that
the directors' interaction after the election may cause the old or new
directors to have a new understanding. Pennsylvania, like other states,
does not outlaw potential conflicts of interest. Rather, it requires full
disclosure and an analysis of fair dealing on a case by case basis. That is
the mandate of PBCL ss. 1728.

          At bottom, the district court reads a "disinterestedness" element
into the requirements for an individual to serve on a corporate board and
vote on transactions, but there is no legal or factual support for such a
requirement. See PBCL ss. 1722(a); AMP Bylaw ss. 2.1 ("[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.") (A 561.)
Nothing in Pennsylvania law or AMP's Articles or Bylaws remotely suggests
that shareholders' fundamental right to elect directors of their choosing
may be limited or taken away simply because a nominee is affiliated with a
potential acquiror. Such a disinterestedness requirement would be contrary
to those PBCL sections that expressly contemplate the vote of interested
directors on merger proposals. See PBCL ss.ss. 1728, 2538.

III. THE DISTRICT COURT ERRED IN NOT ISSUING A PRELIMINARY INJUNCTION
     AGAINST THE NONREDEMPTION AND NULLIFICATION PROVISIONS

     A.   ALLIEDSIGNAL'S CONSENT SOLICITATION PROPOSALS ARE AUTHORIZED BY
          THE PBCL, AMP'S ARTICLES OF INCORPORATION, AND AMP'S BYLAWS

          The district court denied AlliedSignal's preliminary injunction
motion on the ground that AlliedSignal's consent solicitations are
unlawful. The district court expressly held "unlawful" AlliedSignal's
Shareholder Rights Proposal, that would amend AMP's Bylaws to take power
with respect to the poison pill away from the board. (Op. at P. P. 43-47.)
The district court also characterized AlliedSignal's Nominee Election
Proposal as an "attempt [by] a shareholder to propose a plan of merger,"
and then held that "[s]uch action is beyond the powers of the shareholders
and, therefore, is unlawful." (Op. at P. 50.) In making these findings, the
district court ignored clear statutory authority for AlliedSignal's consent
solicitations and manifested a basic misunderstanding of the PBCL.

          1.   THE NOMINEE ELECTION PROPOSALS ARE LAWFUL

          Neither AMP nor the district court questions AlliedSignal's right
to conduct a consent solicitation to enlarge the size of the board and
elect new directors. That right is clearly articulated in the PBCL and
AMP's Articles of Incorporation. Section 2524 of the PBCL provides that
"[a]n action may be authorized by the shareholders of a registered
corporation without a meeting by less than unanimous written consent only
if permitted by its articles." Article IX of AMP's Articles of
Incorporation provides:

          ANY ACTION THAT MAY BE TAKEN AT A MEETING OF THE SHAREHOLDERS or
          of a class of shareholders may be taken without a meeting if
          proper consent is made to the action. ANY SUCH ACTION MAY BE
          TAKEN WITHOUT A MEETING UPON THE WRITTEN CONSENT OF SHAREHOLDERS
          who would have been entitled to cast the minimum number of votes
          that would be necessary to authorize the action at a meeting at
          which all shareholders entitled to vote were present and voting.
          (Emphasis added.)

(A 554.) Shareholders are entitled to amend the bylaws (PBCL ss. 1504) and,
of course, nominate and elect directors (PBCL ss. 1725).

          The district court held that the Nominee Election Proposals are
nonetheless "unlawful" because, in the court's view, they are an attempt by
a shareholder to "propose a plan of merger." (Op. at P. 50.) There is no
disagreement that only a board of directors may propose a plan of merger,
but that is beside the point. The Nominee Election Proposals by their terms
relate only to (1) amending the bylaws to expand the size of the board and
clarify the nomination process and (2) electing new directors. Nothing in
the proposals refers to shareholders proposing a plan of merger; most
importantly, the shareholders will not be taking any action that approves a
plan of merger if they consent to the proposals.

          It is true that the nominees have stated their intention, if
elected, and subject to their fiduciary duties to AMP, to propose to the
entire board a plan of merger between AMP and AlliedSignal. That plan will
not be sent to the shareholders for a vote unless it is first approved by
the board of directors as being in AMP's best interests in light of the
facts and circumstances at that time. If the district court were correct
that this stated intention, by itself, constituted an illegal attempt by a
shareholder to propose a plan of merger, no nominee could ever state his
intention to take any action as a director that can be taken only by the
directors. The federal securities laws REQUIRE that nominees for election
as directors disclose any plans they have regarding transactions with the
company involved, such as a proposed merger. This required disclosure
cannot create a plan by a shareholder to propose a "plan of merger."

          2.   ALLIEDSIGNAL'S SHAREHOLDER RIGHTS PROPOSAL IS EXPLICITLY
               AUTHORIZED BY PENNSYLVANIA LAW

          The district court's refusal to enjoin the nullification
provision was based on its conclusion that the provision was an attempt to
counter "an anticipated unlawful act by AlliedSignal and other
shareholders." (Op. at P. 45.) That "unlawful" act was AlliedSignal's
Shareholder Rights Proposal which, according to the district court,
"violates BCL Section 2513" and constitutes an improper attempt to amend
AMP's Articles of Incorporation. (Op. at P. P. 43, 46.) The district
court's conclusion, however, is contrary to Pennsylvania law. Section 1721
of the PBCL (which the district court does not mention even once in its
entire 26-page opinion) expressly gives AMP shareholders the right to
transfer to other persons powers that the PBCL grants to the board of
directors:

          Unless otherwise provided by statute OR IN A BYLAW
          ADOPTED BY THE SHAREHOLDERS, all powers enumerated in
          section 1502 (relating to general powers) AND ELSEWHERE
          IN THIS SUBPART or otherwise vested by law in a
          business corporation shall be exercised by or under the
          authority of, and the business and affairs of every
          business corporation shall be managed under the
          direction of a board of directors. IF ANY SUCH
          PROVISION IS MADE IN THE BYLAWS, THE POWERS AND DUTIES
          CONFERRED OR IMPOSED UPON THE BOARD OF DIRECTORS BY
          THIS SUBPART SHALL BE EXERCISED OR PERFORMED TO SUCH
          EXTENT AND BY SUCH PERSON OR PERSONS AS SHALL BE
          PROVIDED IN THE BYLAWS.

PBCL ss. 1721 (emphasis added). The powers set forth in PBCL ss. 2513 are
nowhere excluded from the broad authority granted to shareholders by ss.
1721.(FN13)

- ----------------
13   AMP argued below that PBCL ss. 2501(b) should be read to mean that ss.
     2513 trumps ss. 1721 on the grounds that ss. 2513 is a "specific
     provision" that should control over a "general provision" such as ss.
     1721. AMP is wrong for at least two reasons. First, the concept of the
     specific controlling over the general only applies if statutory
     provisions conflict. Nothing in ss. 2513 purports to give the
     directors sole or exclusive authority over the poison pill or
     otherwise conflicts with ss. 1721. Second, ss. 2501 was designed to
     clarify situations in which there is true conflict between provisions
     elsewhere in the PBCL generally applicable to corporations and those
     in Chapter 25 applicable to registered corporations. Compare e.g. PBCL
     ss. 1755(b) (shareholders entitled to cast at least 20% of outstanding
     voting shares may call special meeting) with PBCL ss. 2521
     (shareholders of registered corporation may not call special meeting);
     PBCL ss. 1766(b) (shareholders may act by consent if authorized in
     bylaws) with PBCL ss. 2524 (shareholders of registered corporation may
     act by written consent if authorized in articles of incorporation);
     PBCL ss. 1912(a) (shareholders entitled to cast 10% of outstanding
     voting may propose an amendment to articles) with PBCL ss. 2535
     (shareholders of registered corporation may not propose an amendment
     to articles); PBCL ss. 1924(b)(1)(ii) (plan of merger does not require
     shareholder approval if corporation that is party to merger owns 80%
     of each class of corporation's shares) with PBCL ss. 2539 (merger of
     registered corporation without shareholder approval pursuant to ss.
     1924(b)(1)(ii) requires board approval).

          The authority of AMP shareholders to implement the Shareholder
Rights Proposal flows directly from the fundamental underlying philosophy
of the PBCL -- to allow shareholders maximum flexibility in structuring and
controlling the affairs of their corporation. In fact, the PBCL is
structured in large part as a collection of default provisions that
shareholders can reject or otherwise modify and that control only if
shareholders do not decide otherwise.(FN14) As one of the draftsmen of the
1988 amendments to the PBCL recently commented, the PBCL is unique in the
degree of flexibility it grants to the shareholders of a Pennsylvania
corporation:

- ----------------
14   See, e.g., ss. 1521(c) (providing that shareholders may adopt bylaws
     setting forth "additional provisions regulating or restricting the
     exercise of corporate powers"); ss. 1729(a) (allowing shareholders to
     modify directors' voting rights through a bylaw amendment); ss. 1731
     (providing that corporate bylaws may restrict the powers of board
     committees); ss. 1306(a)(8), (b) (allowing corporate articles to
     relax, be inconsistent with or supersede statutory provisions).

               One of the most important differences between the
               1988 PA BCL and the corporation laws of other
               states is the extent to which the Pennsylvania law
               validates the ability of the owners of a
               Pennsylvania business corporation to control the
               internal affairs of their corporation by contract.

William H. Clark, Jr., What the Business World is Looking for in an
Organizational Form: The Pennsylvania Experience, 32 Wake Forest L. Rev.
149, 169 (1997).

          Despite the fact that ss. 1721 is the one PBCL section directly
on point (and AlliedSignal relied heavily on that section in its briefing
and at oral argument), the district court fails even to mention PBCL ss.
1721 in its opinion. Rather, it relies exclusively on the power granted to
the directors pursuant to PBCL ss. 2513 to "adopt poison pills" and fix
their terms. (Op. at P. 49.) That reliance is misplaced and again turns
statutory interpretation on its head. Section 2513 cannot be read without
reference to ss. 1721. Indeed, as with any other powers granted to the
directors by the PBCL, the directors' ability to exercise the powers
described in ss. 2513 are subject to the shareholders' overarching
authority to transfer those powers to other persons under ss. 1721.

          The district court also suggests that the Shareholder Rights
Proposal is an attempt to alter AMP's Articles of Incorporation through a
bylaw amendment. (Op. at P. 43, 46.) The district court's only basis for
this conclusion is the fact that AMP did not opt out of ss. 2513 and,
according to the district court, the failure to opt out operates to
incorporate the powers set forth in ss. 2513 into AMP's Articles of
Incorporation (which cannot be amended through a bylaw). (Op. at P. 29.)
This assertion is a non-sequitur. AMP's failure to opt-out of ss. 2513 does
not operate to make ss. 2513 part of AMP's Articles. At most, AMP's
decision not to opt-out simply means that AMP is subject to ss. 2513 as a
provision of Pennsylvania law, nothing more and nothing less. Moreover,
nothing in AMP's Articles speaks to the directors' authority with respect
to a poison pill, let alone purports to give the board of directors sole
authority on issues relating to a poison pill. Thus, the Shareholder Rights
Proposal does not operate to amend anything in AMP's Articles of
Incorporation.

          Most importantly, the Shareholder Rights Proposal is expressly
authorized by AMP's Articles of Incorporation, which allow shareholders to
modify or limit the directors' powers through an amendment to AMP's Bylaws.
Article VII of AMP's Articles incorporates PBCL ss. 1721 and provides that
"[E]XCEPT AS OTHERWISE PROVIDED by statute or by these Articles of
Incorporation as the same may be amended from time to time OR BY BYLAWS AS
THE SAME MAY BE AMENDED FROM TIME TO TIME, all corporate powers may be
exercised by the Board of Directors."(FN15) (A 553.) In short, far from giving
the existing directors exclusive power over AMP's poison pill, Article VII
allows shareholders to decide through bylaws who should exercise the powers
initially given to the directors by statute.(FN16)

- ----------------
15   See also Bylaws ss. 9.1 (A 575.) Moreover, the PBCL expressly provides
     that shareholders entitled to vote shall have the power to adopt,
     amend and repeal the bylaws of a business corporation. PBCL ss.
     1504(a).

16   One of the few courts to examine the issue of a shareholder bylaw
     regarding a poison pill has found such a bylaw to be valid.
     International Bhd. of Teamsters Gen. Fund v. Fleming Cos., Inc., No.
     Civ-96-1650-A, 1997 U.S. Dist. LEXIS 2980 (W.D. Okla. Jan. 24, 1997).
     In the Fleming case, a shareholder proposed a bylaw that required the
     Fleming board to redeem its poison pill and obtain shareholder
     approval before adopting any new pill. Upholding the validity of the
     proposed bylaw under Oklahoma law (which parallels Delaware, not
     Pennsylvania, law), the court recognized that, although boards may
     adopt poison pills, they cannot deprive shareholders of ultimate
     control. Id. at *2.

          Finally, the district court compounded its error by purporting to
grant a motion that was never made. The first numbered paragraph of the
October 8 Order refers to, and grants, "AMP's motion for partial summary
judgment, in the nature of a declaratory judgment that AlliedSignal's
consent solicitation plan is unlawful in that it attempts to have AMP
shareholders amend AMP's Bylaws to place the board of directors' authority
over the shareholder rights plan in the hands of persons not on the board."
AMP made no such motion. Indeed, AMP never requested relief of any kind on
AlliedSignal's Shareholder Rights Proposal.

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

          Both the nonredemption and nullification provisions have
essentially the same two-part structure: if AMP's shareholders choose to
oust AMP's current directors from exercising power over the company's
poison pill -- either by voting for the Nominee Election Proposals to
replace them with a new board majority or by voting for the Shareholder
Rights Proposal to transfer their power over the pill to shareholder rights
agents -- then, as a direct and immediate consequence of that vote, all
power over the poison pill is extinguished and the pill becomes
non-amendable and non-redeemable, by anyone, until it expires. Thus, for a
period of over one year, AMP's board could not consider a merger proposal,
no matter how attractive the terms, how high the price, or how qualified
the bidder.

          Each part of this structure violates Pennsylvania law. First, a
Pennsylvania board of directors has no power to prevent a future board (or
those exercising the powers of the board) from amending or redeeming a
company's poison pill. Second, AMP's board cannot exercise its authority
with respect to the poison pill to interfere directly with a shareholder
vote.

          The district court failed to confront the clear statutory limits
on the board in this area and, instead, analyzed the case as if it were a
breach of fiduciary duty case. In part, the district court may have made
this mistake that AMP's briefs below were replete with arguments that the
AMP board had not breached their fiduciary duty. AlliedSignal, however,
never argued that they had; its position was clear:

          This is a case about the fundamental division of power
          between the shareholders -- the owners of a corporation
          -- and their elected representatives, the board of
          directors. It is not a case about the latitude given to
          directors in exercising the powers properly vested in
          them; nor is it about a breach of fiduciary duties. It
          is a case about shareholder rights.(FN17)

- ----------------
17   Memorandum in Support of AlliedSignal's Motion for Summary Judgment
     and for an Immediate Declaratory Judgment and Preliminary Injunction
     filed September 14, 1998. (A 478q-478r.)

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

          PBCL ss. 1721 mandates that that "[u]nless otherwise provided by
statute or in a bylaw adopted by the shareholders, all powers enumerated in
section 1502 . . . or otherwise vested by law in a business corporation
shall be exercised by, or under the authority of . . . a [corporation's]
board of directors." One of the powers specifically enumerated in PBCL ss.
1502 is the power "[t]o accept, reject, respond to or take no action in
respect of an actual or proposed acquisition, divestiture, tender offer,
takeover or other fundamental change under Chapter 19 . . . or otherwise."
PBCL ss. 1502(18). The Committee Comment to ss. 1502(18) makes clear that
the power to accept, reject, or respond to a proposed acquisition includes
the power to amend or redeem the poison pill:

          The type of decision committed to the board of
          directors by subsection (a)(18) is intended to include,
          among other things, whether to adopt a shareholder
          rights plan (sometimes referred to as a "poison pill")
          and, if a shareholder rights plan is or has been
          adopted, whether to redeem the rights.

Committee Comment to PBCL ss. 1502. The powers enumerated in PBCL ss. 1502
cannot be limited by unilateral director action: section 1502 provides that
Pennsylvania corporations "shall" have all the enumerated corporate powers,
"[s]ubject to the limitations and restrictions imposed by statute or
contained in [their] articles." The limitations at issue here were created
through unilateral board action adopting the poison pill amendments, not by
statute or through the Articles.

          A similar action by a corporate board was held unlawful in Bank
of New York Co. v. Irving Bank Corp., 528 N.Y.S.2d 482 (Sup. Ct. N.Y.
County 1988). In Bank of New York, the court invalidated a dead hand
amendment to a company's poison pill (purporting to make the pill
non-redeemable by any director except those on the board when the amendment
was enacted and their designees). Id. at 485-86. The court recognized that
the dead hand amendment was a restriction on the power of future boards of
directors to amend or redeem the pill and held that under governing New
York law such restrictions were valid only if adopted in a company's
articles of incorporation. Id. at 485. As the dead hand amendment was
enacted by unilateral board action, it was contrary to the statute and
illegal. Id.

          The nullification provision is also beyond the power of the AMP
board for another reason: it contravenes the express authority of Article
VII of the AMP Articles and PBCL ss. 1721. The Shareholder Rights Proposal
seeks to have shareholders exercise their authority under Article VII and
ss. 1721 to adopt a bylaw transferring the AMP board's power over the
company's poison pill to Shareholder Rights Agents. The nullification
provision, however, is designed to render the Shareholder Rights Proposal
void ab initio, by providing that as soon as shareholders pass a bylaw to
transfer the power over the poison pill from the board, that power is
extinguished. As an attempt to abrogate AMP shareholders' statutory right
to transfer the powers of their board, the nullification provision is in
direct conflict with AMP's own Articles and with Pennsylvania law.

          The opinion of the district court ignores these statutory
limitations on the power of the board. Instead, the district court
erroneously analyzes the legality of the nonredemption and nullification
provisions as a question of fiduciary duty. (Op. at P. P. 49, 61, 62.) This
analysis, however, misses the point. At issue is not the propriety of the
board's decision to amend the pill, but rather the board's legal authority
to do so in a manner that removes the power of future boards over the pill
(and robs shareholders of authority expressly given to them by the AMP
Articles and PBCL ss. 1721). See Bank of New York, 528 N.Y.S.2d at 485
(distinguishing the issue of "the propriety of the adoption of the plan"
from the "legality of . . . [a] provision restricting the power of duly
elected directors"). AMP's pill amendments go far beyond the dead hand
pills, which have been declared unlawful in a number of cases even though
they permit disinterested directors to redeem the pill. See id.; Carmody v.
Toll Brothers, Inc., C.A. No. 15983, 1998 Del. Ch. LEXIS 131, *36-37, *40
n.30 (Del. Ch. July 24, 1998).

          Moreover, even a fiduciary duty analysis reveals the illegality
of the nonredemption and nullification provisions. Under Pennsylvania law,
the fiduciary duty of a director requires that he "shall perform his duties
 . . . with such care, including reasonable inquiry, skill, and diligence,
as a person of ordinary prudence would use in similar circumstances." PBCL
ss. 1712 (emphasis added). These fiduciary duties are applicable to board
decisions with respect to poison pills. See Committee Comment to PBCL ss.
2513 (directors' decisions "in connection with a shareholder rights plan,
including . . . redemption of the rights" will be subject to directors'
fiduciary duty standard). Thus, the board's attempted abdication of its
authority and responsibility to respond to merger proposals by enacting the
nonredemption and nullification provisions cannot be effected in good
faith, certainly not when the period involved is more than one year.

          The opinion of the district court also attempts to find
authorization for the nonredemption and nullification provisions in PBCL
ss. 2513, which permits Pennsylvania companies to implement poison pills
with terms "as are fixed by the board of directors." This section does not
"trump" the other provisions of the PBCL or give a Pennsylvania board carte
blanche to exercise clearly ultra vires powers as long as they are cloaked
in the form of a rights plan amendment. Indeed, reading ss. 2513 to
authorize the nonredemption and nullification provisions would turn the
statute on its head -- it would read the board's power to "fix the terms"
of a poison pill under ss. 2513 as being so broad as to prevent future
boards from exercising that very same power, or indeed any power, over the
poison pill.

          Finally, the district court's opinion mischaracterizes the
nonredemption and nullification provisions as imposing only "voting
disqualifications for interested directors," when by their express terms
they prevent all directors -- interested or disinterested -- from redeeming
or amending the pill. This basic misconception infects the court's entire
opinion upholding these provisions. The court upheld the nonredemption and
nullification provisions on the grounds that they simply reflected what it
termed the "the disinterested majority concept," the concept that "only
disinterested directors may vote to redeem or amend shareholder rights
plans." In truth, these provisions leave no one with power over AMP's
pill.(FN18)

- ----------------
18   The fact that the nonredemption and nullification provisions take the
     power to amend or redeem the pill from all directors renders the
     court's reliance on Invacare Corp. v. Healthdyne Techs., Inc., 968 F.
     Supp. 1578 (N.D. Ga. 1997) inapposite. Invacare upheld a dead hand
     poison pill that allowed incumbent directors and their designees to
     redeem the pill at issue. Id. at 1581. Moreover, Invacare upheld the
     dead hand provision on the basis of a statutory scheme which is
     fundamentally different from Pennsylvania's. Id. at 1580. The Georgia
     statute in Invacare, unlike Pennsylvania's, gave Georgia boards "sole
     discretion" over shareholder rights plans. Id.; compare PBCL ss.ss.
     1504, 1721, 2513 (Pennsylvania) with Ga. Code Ann. ss. 14-2-624(c)
     (Georgia); see also Carmody v. Toll Brothers, Inc., C.A. No. 15983,
     1998 Del. Ch. LEXIS 131, *36-37, *40 n.30 (Del. Ch. July 24, 1998)
     (holding that a valid claim against a dead hand provision in a poison
     pill had been stated under Delaware law and distinguishing Invacare on
     the basis of the unique Georgia statutory language.) NO COURT HAS
     RULED ON A TOTALLY NON-REDEEMABLE, NON-AMENDABLE PILL LIKE THE ONE AT
     ISSUE HERE.

          2.   THE NONREDEMPTION AND NULLIFICATION PROVISIONS PUNISH
               SHAREHOLDERS FOR VOTING AND ARE THEREFORE ILLEGAL

          AMP's nonredemption and nullification provisions also are illegal
under Pennsylvania law because they effectively penalize shareholders for
exercising their right to vote. Under the nonredemption provision, if AMP's
shareholders elect a new majority to AMP's board to facilitate a merger
with AlliedSignal, then all of AMP's directors lose the power to amend or
redeem AMP's poison pill and consequently lose, as well, the ability to
approve AlliedSignal's (or any other company's) tender offer until the
poison pill rights expire on November 6, 1999. This punishes the
shareholders for voting to oppose the directors' position on a merger with
AlliedSignal, in effect saying to shareholders that, if the current board
cannot have power over the pill, no one can. The nullification provision
metes out the same punishment to shareholders if they vote for the
Shareholder Rights Proposal -- if they vote for the Rights Proposal, then
no one, not AMP's directors or the Shareholder Rights Agents, can amend or
redeem the pill, effectively preventing any merger, with anyone, until the
expiration of the pill.

          Such a direct attempt to frustrate the ability of shareholders to
vote violates Pennsylvania law and warrants injunctive relief. Pennsylvania
law accords shareholder voting rights the highest degree of protection. The
Pennsylvania Supreme Court has described the right to vote as "a
shareholder's most fundamental right." Reifsnyder v. Pittsburgh Outdoor
Adver. Co., 173 A.2d 319, 322 n.8 (Pa. 1961) (citing 13 William Meade
Fletcher, Fletcher Cyclopedia of the Law of Private Corporations, ss. 5717
(rev. Col. 1961)). Under Pennsylvania law, actions like those by AMP's
board that "effectively disenfranchise" shareholders violate "general
fundamental principles that when a vote is to be taken it should be a fair
and open vote, and that the shareholders should be treated fairly and
properly," and such actions should be enjoined as "fundamentally unfair"
under PBCL ss. 1105.(FN19) Norfolk Southern Corp. v. Conrail, Civ. Act. No.
96-7167, *68-69 (E.D. Pa. Dec. 17, 1996) (VanArtsdalen, J.) (A 546-47).

- ---------
19   PBCL ss. 1105, as interpreted by the Pennsylvania Supreme Court,
     authorizes courts to issue "an injunction to prevent any proposed
     corporate plan fraught with fraud or fundamental unfairness." In re
     Jones & Laughlin Steel Corp., 412 A.2d 1099, 1103 (Pa. 1980).

          In Norfolk Southern, the Conrail board, like AMP's board,
attempted to manipulate a shareholder vote by coercing the outcome. The
Conrail board attempted indefinitely to postpone an announced shareholder
meeting called to consider certain aspects of Conrail's proposed merger
with CSX, unless and until Conrail could be assured it had enough proxies
to win the vote. Conrail's action, Judge VanArtsdalen found, "effectively
disenfranchises those shareholders who may be opposed to [Conrail's]
proposal because it says to them that . . . we will not allow the vote to
go ahead if there is any [chance] . . . the proposal will not be approved."
(A 546.) By depriving shareholders of a meaningful choice, the directors
created a "sham election" that was "fundamentally unfair to those who may
be opposed to the transaction." (A 546-47.) Such interference with
shareholder voting rights, Judge VanArtsdalen held, justified an injunction
against the directors' actions.

          This Court has similarly recognized that a board may not take
actions that prevent shareholders from exercising their right to vote. In
IBS Fin. Corp., 136 F.3d at 951, this Court, applying New Jersey law (which
does not differ from Pennsylvania law in its respect for the voting
process), invalidated a board's attempt to reduce its size because the only
purpose to the board's action was to prevent dissident shareholders from
gaining seats on the board. The Court applied heightened scrutiny to
"matters involving the integrity of the shareholder voting process,"
explaining that the shareholder franchise is "critical to the theory that
legitimates the exercise of power by some (directors and officers) over
vast aggregations of property that they do not own." Id. at 949 (quoting
Blasius Indus., Inc. v. Atlas Corp., 564 A.2d 651, 659 (Del. Ch.
1988)).(FN20)

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

20   The IBS Fin. Corp. court predicted that New Jersey would follow
     Delaware and apply heightened scrutiny to director actions which
     interfered with voting rights, even though New Jersey law, like
     Pennsylvania's, rejects Delaware's heightened scrutiny standard for
     responding to tender offers. See IBS Fin. Corp., 136 F.3d at 950;
     compare 14A N.J. Stat. Ann. 6-1(3) (boards of directors have "no
     obligation to facilitate" a takeover) with PBCL. ss. 1715 (directors'
     fiduciary duties do not require them to redeem a poison pill).
     Although the election in IBS Fin. Corp. was not in the context of a
     takeover, the analysis of the Court's opinion would apply heightened
     scrutiny to all actions "intended to hamper the exercise by some
     shareholders of their franchise." Id. at 949.

          A poison pill provision similar to, but less draconian than, the
nonredemption and nullification provisions at issue in this case was held
invalid as an illegal disenfranchisement of shareholders in Carmody v. Toll
Brothers, Inc., C.A. No. 15983, 1998 Del. Ch. LEXIS 131, *44 (Del. Ch. July
24, 1998). In Carmody, the court invalidated a dead hand poison pill as
purposefully disenfranchising shareholders. The court held that, if the
pill were upheld, "shareholders will be powerless to elect a board that is
both willing and able to accept [a takeover] bid and they may be forced to
vote for incumbent directors whose policies they reject because only those
directors have the power to change them." Id. at 42-43 (internal quotations
and citations omitted).

     C.   ALLIEDSIGNAL HAS DEMONSTRATED THE REMAINING PREREQUISITES TO
          INJUNCTIVE RELIEF

          Irreparable harm will result from the cloud cast over the
shareholders' vote by the nonredemption and nullification provisions.
Shareholders may be deterred from voting for the consent solicitation if
they believe that doing so will trigger these provisions and cause all
power to redeem the pill, by anyone, to be lost. See Bank of New York, 528
N.Y.S.2d at 482 (irreparable harm where an invalid poison pill amendment
was "likely to taint the electoral process"); see also International
Banknote Co. v. Miller, 713 F. Supp. 612, 623 (S.D.N.Y. 1989) (management
causes irreparable harm to shareholders by "frustrating them in the attempt
to obtain representation on the board"). In addition, by making AMP's
poison pill non-redeemable and non-amendable, the provisions threaten to
deprive AMP's shareholders of the opportunity to tender their shares to
AlliedSignal at $44.50 cash per share and to deprive AlliedSignal of the
unique opportunity to effect a merger with AMP. See San Francisco Real
Estate Investors v. Real Estate Inv. Trust of Am., 701 F.2d 1000, 1003 (1st
Cir. 1983) (loss of opportunity to acquire corporation is irreparable
harm).

          Given this irreparable harm, the balance of the equities favors
an injunction, which can cause no harm to AMP. AMP remains free to convince
its shareholders to vote against the solicitation proposals and will have
ample time to challenge any AMP-AlliedSignal combination before it could be
consummated. Finally, the public interest in safeguarding corporate
democracy supports an injunction to prevent the taint of illegality from
affecting a shareholder vote in a closely-watched, multi-billion dollar
tender offer and consent solicitation.

                                 CONCLUSION

          For the foregoing reasons, AlliedSignal respectfully requests
that this Court reverse and vacate the district court's October 8, 1998,
Order as it relates to Civil Action Nos. 98-CV-4405 and 98-CV-4058, except
with respect to the setting of the record date for the Shareholder Rights
Proposal, and remand to the district court with instructions to enjoin AMP
from giving effect to, or enforcing, the nonredemption and nullification
provisions.

                                    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

                                    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 13, 1998

                      CERTIFICATION OF BAR MEMBERSHIP
                      -------------------------------

          I hereby certify that Mary A. McLaughlin and George G. Gordon are
members in good standing of the bar of the United States Court of Appeals
for the Third Circuit.

                                                /s/ Mary A. McLaughlin
                                                -----------------------
                                                 Mary A. McLaughlin