SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

                                    FORM T-3

           FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES UNDER THE
                           TRUST INDENTURE ACT OF 1939

                                ALLIEDSIGNAL INC.

                                (Name of Company)

                                101 Columbia Road
                            Morristown, NJ 07962-2497
                             -----------------------
                    (Address of Principal Executive Offices)

           SECURITIES TO BE ISSUED UNDER THE INDENTURE TO BE QUALIFIED

             TITLE OF CLASS                               AMOUNT
         -----------------------                     --------------
       Debentures due June 1, 2033                     $100,000,000

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:  May 20, 1998.

NAME AND ADDRESS OF AGENT FOR SERVICE: Peter M. Kreindler, Esq., Senior Vice
President, General Counsel and Secretary, AlliedSignal Inc., 101 Columbia Road,
Morristown, New Jersey 07962-2497

The Company hereby amends this application for qualification on such date or
dates as may be necessary to delay its effectiveness until (i) the 20th day
after the filing of a further amendment which specifically states that it shall
supersede this amendment, or (ii) such date as the Securities and Exchange
Commission, acting pursuant to Section 307(c) of the Act, may determine upon the
written request of the Company.

 

GENERAL

1.  GENERAL INFORMATION

(A) FORM OF ORGANIZATION:  Corporation.

(B) STATE OR OTHER SOVEREIGN POWER UNDER THE LAWS OF WHICH
ORGANIZED:   Delaware.

2.  SECURITIES ACT EXEMPTION APPLICABLE.

     AlliedSignal Inc., a Delaware corporation (the "Company"), is relying upon
the exemption from the registration requirements of the Securities Act of 1933,
as amended (the "Securities Act"), provided by Section 3(a)(9) thereunder, in
connection with the Company's exchange offer as described herein (the "Exchange
Offer"). The Exchange Offer is being made by the Company pursuant to its
Offering Circular dated May 20, 1998 ("Offering Circular"), and the related
Letter of Transmittal and Notice of Guaranteed Delivery of even date therewith,
and consists of an offer to exchange the Company's $100,000,000 Debentures due
June 1, 2033 (the "New Debentures") for the Company's outstanding $100,000,000 9
1/2% Debentures due June 1, 2016 (the "Old Debentures").

     There have not been any sales of securities of the same series as the New
Debentures or the Old Debentures by the Company, nor are there any such other
sales planned, by or through an underwriter at or about the time of the Exchange
Offer transaction.

     The Company retained Deutsche Morgan Grenfell Inc. ("DMG") to advise the
Company as to the structure, process and financial matters related to the
Exchange Offer. DMG's services to the Company are limited solely to such
advisory services, and DMG will not, directly or indirectly, solicit the
exchange of Old Debentures for New Debentures under the Exchange Offer or
otherwise make recommendations with respect to acceptance or rejection of the
Exchange Offer. In exchange for such advisory services, DMG will be paid a
flat fee which is not dependent upon the outcome of the transaction. DMG will
not be paid any commission or similar variable type of remuneration.

     The Company also has retained Georgeson & Company Inc. as the "Information
Agent" and The Chase Manhattan Bank as the "Exchange Agent" in connection with
the Exchange Offer. The Information Agent and Exchange Agent will provide to
holders of Old Debentures only information otherwise contained in the Offering
Circular and general information regarding the mechanics of the exchange
process. The Exchange Agent will provide the actual acceptance and exchange
services with respect to the exchange of Old Debentures and New Debentures.
Neither the Information Agent nor the Exchange Agent will solicit exchanges in
connection with the Exchange Offer and will not make recommendations as to the
acceptance or rejection of the

 

Exchange Offer. Both the Information Agent and Exchange Agent will be paid
reasonable fees directly by the Company for their services.

     There are no cash payments made or to be made by any holder of the
outstanding Old Debentures in connection with the Exchange Offer.

                                  AFFILIATIONS

3.  AFFILIATES.  Furnish a list or diagram of all affiliates of the Company and
indicate the respective percentages of voting securities or other bases of
control.

The following is a list of direct and indirect subsidiaries and affiliates of
the Company. Indirect subsidiaries and affiliates are indented and listed under
their direct parent. Ownership indicated herein refers to the ownership of the
direct parent. Unless otherwise indicated, the bases of control is ownership of
equity securities.

                                                                
AlliedSignal Inc.
     AS BAR LLC                                                       100.000000%
          Burbank Aircraft International GmbH                         100.000000%
          Harco Aerospace Fasteners, Ltd.                             100.000000%
     AS BAR PBH LLC                                                   100.000000%
     ASA Investments Inc.                                             100.000000%
     ASI Specialty Chemicals, L.L.C.                                  100.000000%
          UOP LLC                                                      49.900000%
               Nikki-Universal Co., Ltd.                               50.000000%
               Temperature Controlled Reactors L.L.C.                  50.000000%
               UOP Admin B.V.                                         100.000000%
               UOP B.V.                                               100.000000%
               UOP Canada Inc.                                        100.000000%
               UOP Foreign Sales Corporation                          100.000000%
               UOP GmbH                                               100.000000%
               UOP International Services Limited                      99.700000%
               UOP International Technology Limited                    99.700000%
               UOP Invest B.V.                                        100.000000%
               UOP K.K.                                               100.000000%
               UOP Limited                                             99.999900%
                    UOP France s.a.r.l.                               100.000000%
                         UOP M.S. SpA                                   0.010000%
                    UOP M.S. SpA                                       99.990000%
               UOP N.V.                                                99.997315%
               UOP Pacific Ltd.                                        99.800000%
                    Shanghai UOP Ltd.                                  70.000000%

 

                                                                
               UOP Processos Industriais do Brasil Ltda.               99.987523%
               UOP Spain, S.A.                                         14.980000%
               Union Showa K.K.                                        50.000000%
               Universal Oil Products Asia Pacific Pte. Ltd.          100.000000%
               Universal Oil Products Company                         100.000000%
                    Cataleasco, Inc.                                  100.000000%
                    Katalistiks International, Inc.                   100.000000%
                    UOP Charitable Foundation, Inc.                   100.000000%
                    UOP Equitec Services, Inc.                        100.000000%
                    UOP Inc.                                          100.000000%
                    UOP Management Services, Inc.                     100.000000%
                         UOP Management Services                       49.000000%
                         Ltd.
                    UOP Middle East Company                           100.000000%
                    UOP Processes International, Inc.                 100.000000%
                         UOP N.V.                                       0.002685%
                         UOP Processos Industriais do Brasil Ltda.      0.012477%
     Aerospace Preforms Limited                                       100.000000%
     Alliance Polymers Company                                         50.000000%
     Allied Capital Management LLC                                    100.000000%
     Allied Chemical Communications Company, Inc.                     100.000000%
     Allied Chemical Corporation                                      100.000000%
     Allied Chemical Nuclear Products, Inc.                           100.000000%
          Allied-General Nuclear Services                              50.000000%
     Allied Technologies Corporation                                  100.000000%
     Allied-Signal Aerospace Avionics Company                         100.000000%
          AlliedSignal Joint Venture Partnership                        1.000000%
          American Russian Integrated Avionics                         67.700000%
     Allied-Signal Energy Services, Inc.                              100.000000%
          Allied Fuel Energy Services Company, L.P.                    42.500000%
          Allied Fuel Services Company                                 51.000000%
          ConverDyn (Partnership Interest)                             50.000000%
     Allied-Signal Environmental Services, Inc.                       100.000000%
     AlliedSignal Aerospace Pty Limited                                 0.010000%
     AlliedSignal Aerospace Service Corporation                       100.000000%
          AlliedSignal Laminate Systems Technology Ltd.                 0.000001%
     AlliedSignal Canada Inc. (Preferred Stock)                       100.000000%
          Allied-Signal Automotive of Canada Inc.                     100.000000%
          AlliedSignal Aerospatiale Canada Inc.                       100.000000%
     AlliedSignal Chemicals Inc.                                      100.000000%
     AlliedSignal China Inc.                                          100.000000%
          AlliedSignal (Australia) Sales Limited                       12.500000%
          AlliedSignal Laminate Systems Technology Ltd.                 0.000001%
          Nittobo Norplex/Oak Co., Ltd.                                 0.000260%
     AlliedSignal Environmental Catalysts Inc.                        100.000000%
          ASEC Manufacturing (Partnership Interest)                    50.000000%

 

                                                                
               AS Catalizadores Ambientales, S.A. de C. V.             99.000000%
               AlliedSignal Catalyseurs pour l'Environnement SAS       99.000000%
                    AlliedSignal Environmental Catalysts GmbH         100.000000%
          ASEC Sales (Partnership Interest)                            50.100000%
               AS Catalizadores Ambientales, S.A. de C. V.              1.000000%
               AlliedSignal Catalyseurs pour l'Environnement SAS        1.000000%
     AlliedSignal Eurasia Ltd.                                        100.000000%
     AlliedSignal Europe Inc.                                         100.000000%
          AlliedSignal (Australia) Sales Limited                       12.500000%
          AlliedSignal Sistemas de Seguridad S.A.                       0.000625%
     AlliedSignal Europe [N.V.]                                         0.048784%
     AlliedSignal Fluorochemicals Europe B.V.                         100.000000%
     AlliedSignal International Finance Corporation                   100.000000%
          ASIFCO (Suzhou) Inc.                                        100.000000%
          Alchem Assurance Limited                                    100.000000%
          Allied Chemical do Brasil Comercio e Participacoes,          99.982790%l
          Ltda.
          Allied Signal Italia S.p.A.                                  99.900000%
               AlliedSignal Fluorochemicals Italia S.r.l.             100.000000%
               Alliednignal Sistemi di Sicurezza S.p.A.                99.950000%
                    Autoflug S.p.A.                                   100.000000%
                    Compagnia Costruzione Cinture S.p.A.              100.000000%
               FIAAM Filter, S.p.A.                                    40.001259%
                    AFICO Filters                                      20.000000%
                    Arto Iberica S.A.                                 100.000000%
                    Coopers Filters, Ltd.                             100.000000%
                    FIAAM Filter Germany GmbH                         100.000000%
                    Fram Europe A.B.                                  100.000000%
                    Fram Europe B.V.                                  100.000000%
                         Coopers Filters Europe B.V.                  100.000000%
                    Fram Europe Limited                               100.000000%
                    Fram Filter France S.A.                            99.850000%
                    Fram Filter, S.p.A.                               100.000000%
          AlliedSignal (Australia) Sales Limited                       50.000000%
          AlliedSignal (China) Investment Co., Ltd.                   100.000000%
               AlliedSignal (Kaiping) Industrial Fabrics Co. Ltd.      70.000000%
               AlliedSignal (Kaiping) Industrial Fibers Co. Ltd.       70.000000%
               AlliedSignal Amorphous Metals (Shanghai) Co., Ltd.     100.000000%
               AlliedSignal Friction Materials (Guangzhou) Co.,       100.000000%
               Ltd.
               AlliedSignal Laminate Systems (Suzhou) Co., Ltd.       100.000000%
               AlliedSignal TAECO Aerospace (Xiamen) Company           65.000000%
               Limited
               AlliedSignal Turbocharging Systems (Shanghai) Co.,     100.000000%
               Ltd.
               CRIAA AlliedSignal (Nanjing) Aero Accessories Co.,      51.000000%

 

                                                                
               Ltd.
               Fenghua KBAS Automotive Air Compressor Co., Ltd.        35.000611%
               AlliedSignal CATIC Engine (Suzhou) Co., Ltd.            56.000000%
          AlliedSignal (Thailand) Co., Ltd.                            99.970000%
               Bendix (Thailand) Limited                               46.880000%
          AlliedSignal Aerospace Pty Limited                           99.990000%
          AlliedSignal Aerospace Pty Limited (Preferred Stock)        100.000000%
          AlliedSignal Aerospace de Mexico S.A.                     (less than 1%)
          AlliedSignal Asahi Co., Ltd.                                 51.000000%
          AlliedSignal Automotive Ltda. (Preferred Stock)              20.000000%
               Knorr-Bremse Sistemas para Veiculos Comerciais          35.000000%
               Brasil Ltda.
          AlliedSignal Automotive de Mexico, S.A. de C.V.           (less than 1%)
          AlliedSignal Bremsbelag GmbH                                 10.000000%
               AlliedSignal Aftermarket Europe B.V.                   100.000000%
               AlliedSignal Aftermarket Europe GmbH                   100.000000%
               AlliedSignal Aftermarket Europe [N.V.]                  99.920000%
               AlliedSignal Aftermarket Europe, Sverige AB            100.000000%
                    AlliedSignal Aftermarket Europe ApS               100.000000%
                    AlliedSignal Aftermarket Europe Norge AS          100.000000%
               AlliedSignal Materiales de Friccion SA                 100.000000%
               Financiere AlliedSignal S.A.                             1.891896%
                    AlliedSignal Fibers Europe S.A.S.                  99.999996%
                    AlliedSignal Industrial Fibers S.A.                99.999260%
                    AlliedSignal Laminate Systems S.A.                 99.988966%
                    AlliedSignal Materiaux de Friction SA              99.999717%
                    AlliedSignal Remanufacturing S.A.                  75.000000%
                    AlliedSignal Servicos Industriais e Comerciais     98.000000%
                    Portugal, Lda.
                    AlliedSignal Turbo S.A.                           100.000000%
                         Garrett Finances S.N.C.                       99.000000%
                         Turbo Services S.N.C.                         99.000000%
                    Garrett Finances S.N.C.                             1.000000%
                    Holt Lloyd Holdings S.A.                          100.000000%
                         Holt Lloyd S.A.                              100.000000%
                    Societe d'Etudes et de Constructions               99.997619%
                    Aero-Navales, S.A. (Equity Share)
                         Enpro Secan (India) Private Limited           50.000000%
               Jurid (U.K.) Ltd.                                      100.000000%
          AlliedSignal Canada Inc.                                     99.577465%
          AlliedSignal Carpet Fibers B.V.                             100.000000%
          AlliedSignal Europe [N.V.]                                    0.167259%
          AlliedSignal European Services S.A.S.                        10.000000%
          AlliedSignal Filtros de Mexico S.A. de C.V.                   0.000006%
          AlliedSignal Foreign Sales Corporation                      100.000000%
          AlliedSignal Holdings Limited                                99.999965%

 

                                                                
               Skyforce Avionics, Ltd.                                100.000000%
               AlliedSignal Aerospace GmbH                              0.200000%
               AlliedSignal Limited                                   100.000000%
                    AlliedSignal Holdings B.V.                         54.900000%
                         Knorr-Bremse Systeme fuer Nutzfahrzeuge       35.000000%
                         GmbH
                              Knorr Systemes pour Vehicules            99.849194%
                              Utilitaires France S.A.
                              Knorr-Autobrzdy S.R.O.                   67.000000%
                              Knorr-Bremse Benelux B.V.B.A.            99.000000%
                              Knorr-Bremse Fekrendszerek Kft.         100.000000%
                              Knorr-Bremse Italia, S.p.A.              99.344262%
                              Knorr-Bremse Sistemi per Autoveicoli    100.000000%
                              Commerciali Italia S.p.A.
                              Knorr-Bremse System for Tunga Fordon    100.000000%
                              AB
                              Knorr-Bremse Systems for Commercial     100.000000%
                              Vehicles Limited
                                   Knorr-Bremse U.K. Ltd.             100.000000%
                              Knorr-Bremse Systems for Commercial     100.000000%
                              Vehicles Limited
                              Knorr-Orsan Ticari Arac, Sistemleri      51.000000%
                              Limited, Sirketi
                    Dexbin, Ltd.                                      100.000000%
                         Allied Signal Italia S.p.A.                    0.100000%
                         Allied-Signal Aerospace Limited              100.000000%
                    Fortin Laminating Limited                         100.000000%
                    Garrett Automotive Limited                        100.000000%
                         Garrett Turbo Services Limited                99.990000%
                              Turbocare Limited                       100.000000%
                         Rajay Limited                                 50.000000%
                         Roto-Master Limited                           50.000000%
               Cheshire Castings Ltd.                                 100.000000%
               Ferranti-Bendix Power Generation Limited               100.000000%
               Holt Lloyd Group Limited                               100.000000%
                    Autoclub Limited                                  100.000000%
                    Holt Lloyd Australasia Pty Limited                  0.008000%
                         Kayes Chemical Co. Limited                   100.000000%
                    Holt Lloyd Holdings B.V.                          100.000000%
                    Holt Lloyd Holdings Limited                       100.000000%
                         Holt Lloyd Holdings B.V.                     100.000000%
                    Holt Lloyd International Limited                  100.000000%
                         Burnaby & Chantrell Limited                  100.000000%
                         Carr & Day & Martin Limited                  100.000000%
                         DCMC Industrial Aerosols Limited             100.000000%

 

                                                                
                         Dupli-Color Limited                          100.000000%
                         Flexiwrap Limited                            100.000000%
                         Flexy Brushes Limited                        100.000000%
                         Glassmatch Limited                           100.000000%
                         Holt Lloyd & Raposa Limitada                  35.000000%
                         Holt Lloyd Americas Limited                  100.000000%
                         Holt Lloyd Australasia Pty Limited            99.992000%
                         Holt Lloyd Export Limited                    100.000000%
                         Holt Lloyd Limited                           100.000000%
                         Holt Lloyd Pension Trustees Ltd.             100.000000%
                         Holt Products Limited                        100.000000%
                              MR Holt Product Pty Limited             100.000000%
                         Lloyds Industries (Molyslip) Limited         100.000000%
                         Lloyds Industries International Limited      100.000000%
                         Loy Plastics Limited                           0.050000%
                         Nippon Kigyo KK                              100.000000%
                         Radweld Engineering Company Limited          100.000000%
                              Loy Plastics Limited                     99.950000%
                         Redex Limited                                100.000000%
                         Romac Industries Limited                     100.000000%
                         WH Cowie Limited                             100.000000%
                    Holt Lloyd International Limited                  100.000000%
                    Holt Lloyd S.p.A.                                 100.000000%
                         Holts Srl                                    100.000000%
                    Holt Lloyd Trustee Co. Ltd.                       100.000000%
                    Simoniz International Limited                     100.000000%
               Holt Lloyd Group Limited                               100.000000%
               Klippan Automotive Products (U.K.) Limited              99.999007%
               Normalair-Garrett (Holdings) Limited                    48.000000%
                    Normalair-Garrett Limited                          98.000000%
                    Normalair-Garrett Manufacturing Pty. Ltd.          99.996667%
                         Normalair-Garrett Pty. Ltd.                    0.000800%
                              Normalair-Garrett Manufacturing Pty.      0.003333%
                              Ltd.
                    Normalair-Garrett Pty. Ltd.                        99.999200%
          AlliedSignal Holdings Limited                                99.999827%
          AlliedSignal Holdings Limited (Preferred Stock)       -      99.999995%
          AlliedSignal India Private Limited                           99.999813%
          AlliedSignal International Inc.                             100.000000%
               AlliedSignal (Australia) Sales Limited                  12.500000%
               AlliedSignal Inc. Japan                                100.000000%
               AlliedSignal Laminate Systems Technology Ltd.            0.000001%
               Nittobo Norplex/Oak Co., Ltd.                            0.000260%
          AlliedSignal Ireland Limited                                  0.000035%
               AlliedSignal International Services S.A.S.              75.000000%
               AlliedSignal Ireland Software Limited                  100.000000%

                                                                
               Holt Lloyd Limited (Ireland)                           100.000000%
               Iropharm plc                                           100.000000%
               Iropharm plc                                           100.000000%
               Jellalabad plc                                         100.000000%
          AlliedSignal Korea Ltd.                                     100.000000%
          AlliedSignal Laminate Systems Inc.                          100.000000%
               AlliedSignal Deutschland GmbH                          100.000000%
                    AlliedSignal Aerospace GmbH                        99.800000%
                    AlliedSignal Bremsbelag GmbH                       90.000000%
                    AlliedSignal Chemical Holding AG                  100.000000%
                         Riedel-de Haen AG                            100.000000%
                              Lindener Volksbank e.G.                   0.021249%
                              Niedersaechsische Gesellschaft fuer       0.250000%
                              Endablagerung von Sonderabfall mbH
                              RdH Laborchemikalien GmbH & Co. KG       25.000000%
                              RdH Laborchemikalien                     25.000000%
                              Verwaltungs-GmbH
                              Riedel-de Haen Sozialhilfe GmbH         100.000000%
                         Riedel-de Haen AG                            100.000000%
                         Riedel-de Haen AG                            100.000000%
                    AlliedSignal Laminate Systems GmbH                100.000000%
                    AlliedSignal Polymers GmbH                        100.000000%
                    AlliedSignal Specialty Chemicals GmbH             100.000000%
                    Holt Lloyd Holdings GmbH                          100.000000%
                         Holt Lloyd GmbH                              100.000000%
                         Holt Lloyd Kfz-pflegemittel Export GmbH      100.000000%
               AlliedSignal Europe [N.V.]                              99.783957%
               AlliedSignal Laminate Systems (Thailand) Company        99.998600%
               Limited
               AlliedSignal Laminate Systems Pacific Limited           99.999971%
               AlliedSignal Laminate Systems Singapore Inc.           100.000000%
                    AlliedSignal Laminate Systems Technology Ltd.       0.000001%
               AlliedSignal Laminate Systems Technology Ltd.           99.999992%
               AlliedSignal Technologies Inc.                           0.600000%
                    AlliedSignal Automotive Ltda.                      59.999872%
               Asahi-Schwebel (Taiwan) Co., Ltd.                       49.000446%
               Asia Pacific Resin Corporation                          25.000000%
               Financiere AlliedSignal S.A.                            25.637718%
               Nittobo Norplex/Oak Co., Ltd.                           49.999221%
               Oak-Mitsui (Partnership Interest)                       50.100000%
               Oak-Mitsui Inc.                                         50.100016%
          AlliedSignal Laminate Systems Pacific Limited                 0.000029%
          AlliedSignal Laminate Systems Technology Ltd.                 0.000001%
          AlliedSignal Materiaux de Friction SA                         0.000040%
          AlliedSignal Productos Automotrices, S.A. de C.V.             0.000009%
          AlliedSignal Romania Srl                                    100.000000%

                                                                
          AlliedSignal Singapore (Pte.) Limited                       100.000000%
          AlliedSignal Sistemas de Seguridad S.A.                      99.999375%
          AlliedSignal Sogefi Aftermarket Europe B.V.                  65.000000%
          AlliedSignal TBS Holdings, Inc.                               0.830000%
               AlliedSignal Truck Brake Systems Company                65.000000%
               (Partnership Interest)
                    AlliedSignal TBS Canada Inc.                      100.000000%
                    AlliedSignal Truck Brake Systems Foreign Sales    100.000000%
                    Corp.
          AlliedSignal Technologies Inc. (Preferred Stock)            100.000000%
          AlliedSignal Waterford Limited                              100.000000%
               AlliedSignal European Services S.A.S.                   90.000000%
               AlliedSignal International Services S.A.S.              25.000000%
          AlliedSignal de Mexico, S.A. de C.V.                         88.814772%
               AlliedSignal Aerospace de Mexico S.A.                   10.000000%
               AlliedSignal Automotive de Mexico, S.A. de C.V.         99.999999%
               AlliedSignal Filtros de Mexico S.A. de C.V.             99.999994%
               AlliedSignal Productos Automotrices, S.A. de C.V.       99.999991%
          CEA AlliedSignal Aircraft Wheels and Brakes Repair and       60.000000%
          Overhaul Co., Ltd. Shanghai
          Financiere AlliedSignal S.A.                                 72.391556%
          Garrett Turbo Inc.                                          100.000000%
          Garrett Turbochargers Ltd.                                   51.428571%
          Goodproud                                                   100.000000%
          Holt Lloyd Limited                                          100.000000%
          Holt Lloyd S.A. (Spain)                                     100.000000%
          Holts Pty Limited                                           100.000000%
               Holt Lloyd International (South Africa) Pty Limited    100.000000%
               Turtleline (Pty) Limited                               100.000000%
          Industrial Turbines International, Inc.                      15.398152%
          Industrial Turbines International, Inc. (Preferred Stock)     8.798686%
          JKC Truck Brake Systems Co., Ltd.                            17.500000%
          Musashi Holt KK                                              80.000000%
          Nittobo Norplex/Oak Co., Ltd.                                 0.000260%
     AlliedSignal Ireland Limited                                      99.999965%
     AlliedSignal Joint Venture Partnership                            99.000000%
     AlliedSignal Leasing Company L.P. (Partnership Interest)           1.000000%
     AlliedSignal Materiaux de Friction SA                              0.000040%
     AlliedSignal Power Systems Inc.                                  100.000000%
     AlliedSignal Singapore Inc.                                      100.000000%
     AlliedSignal Specialty Chemicals (S) Pte Ltd                     100.000000%
     AlliedSignal TBS Holdings, Inc.                                   87.020000%
     AlliedSignal Technical Services Corporation                      100.000000%
          AlliedSignal (Australia) Sales Limited                       12.500000%
          AlliedSignal Laminate Systems Technology Ltd.                 0.000001%
     AlliedSignal Technologies Inc.                                    99.400000%

 

                                                                
     AlliedSignal Transportation Inc.                                 100.000000%
     AlliedSignal de Mexico, S.A. de C.V.                              10.818360%
     AlliedSignal-Asiatic Pte Ltd                                      60.000000%
     American Russian Integrated Avionics Corporation                  67.700000%
     Astor Holdings, Inc.                                             100.000000%
          Astor Holdings II, Inc.                                     100.000000%
               ABI Acquisition 1 plc. (Preferred Stock)                99.999907%
                    ABI Acquisition 2 plc.                             99.999907%
                         Associated British Industries Limited         99.999972%
                         Astor Stag Limited                            99.998428%
                              Astor Stag S.A.                         100.000000%
                              Astor Stag S.A.R.L.                     100.000000%
                              Stag Francaise S.A.                     100.000000%
                    ABI Acquisition 2 plc. (Ordinary Non-Voting)      100.000000%
                    ABI Corporation                                   100.000000%
                         Astor Corporation (Preferred Stock)          100.000000%
                              ABI Acquisition 1 plc.                  100.000000%
                              Petrofin Corporation                     66.500000%
               Astor Corporation                                      100.000000%
     Avcon, Inc.                                                       14.906416%
     Bendix Electronic Service Corporation de Espana, S.A.             70.000000%
     Bendix Leasing Company                                           100.000000%
     Bendix Mintex Pacific Proprietary Limited                         50.000000%
          Bendix (Thailand) Limited                                     6.250000%
          Don Brake (Australia) Pty Limited                           100.000000%
          Don Brake (Malaysia) Sdn Bhd                                100.000000%
     Bendix Mintex Proprietary Limited                                 50.999987%
          Bendix Mintex Employees Superannuation Pty Ltd.             100.000000%
          Bendix Mintex Executive Superannuation Pty Ltd              100.000000%
          Bendix Mintex Staff Superannuation Pty Ltd                  100.000000%
     Bendix Products Corporation                                      100.000000%
     Bunker Ramo Electronic Data Systems S.A.                         100.000000%
     Burdick & Jackson, Inc.                                          100.000000%
     CFE Company (Partnership Interest)                                50.000000%
     Compania Industrial de Fluorita, S.A.                             40.000000%
     Compania Metalurgica de Parral, S.A.                              40.000000%
     Don Brake (Malaysia) Sdn Bhd                                      50.000000%
     EM Sector Holdings Inc.                                          100.000000%
          JGC Corporation                                               0.010000%
          UOP Asia Ltd.                                               100.000000%
          UOP Inter-Americana, Inc.                                   100.000000%
          UOP LLC (LLC Membership Interest)                             0.100000%
     Evergreen Nylon Recycling Company, LLC                            50.000000%
     Garrett Comtronics Licensing Corporation                          85.000000%
     Globe Auto Electricals, Ltd.                                      25.700000%
     Grimes Holdings Inc.                                             100.000000%

 

                                                                
          MRC Acquisition Corporation                                 100.000000%
               Grimes Aerospace Company                               100.000000%
                    Cambridge Thermionic Corp.                        100.000000%
                         Cambridge Thermionic of Canada, Ltd.         100.000000%
                    FL Aerospace, Ltd.                                100.000000%
                    M-R Development Company                           100.000000%
                    MRC Acquisition Corp. No. 3                       100.000000%
                    Midland Industries,Inc.                           100.000000%
                    Midland Preferred Corp.                           100.000000%
                    Midland-Ross International Corp.                  100.000000%
                    Midland-Ross Trading Corporation                  100.000000%
                    Midland-Ross of Canada, Ltd.                      100.000000%
                    MidroLtd.                                         100.000000%
                    Nasco Enterprises                                 100.000000%
     H-D Polymer Corporation                                          100.000000%
          AlliedSignal Polymer Company, L.P.                           98.000000%
               AlliedSignal Leasing Company L.P.                       99.000000%
               Interest)
     Hankuk Brake Industrial Co., Ltd.                                 48.999859%
     HoltraChem Manufacturing Company, L.L.C.                          36.000000%
     Industrial Turbines International, Inc.                           84.601848%
     Industrial Turbines International, Inc. (Preferred Stock)         45.845554%
     International Auto Parts Limited (a/k/a Interzapchast)            33.333333%
     International Turbine Engine Corporation                          80.328053%
     Investech (Partnership Interest)                                   3.630000%
     Jidosha Kiki Co., Ltd.                                             4.642580%
          Aruma Engineering Co., Ltd.                                 100.000000%
          JKC-USA Corporation                                         100.000000%
          Niigata Technos Co., Ltd.                                   100.000000%
          Technos Co., Ltd.                                           100.000000%
          Trondule Co., Ltd.                                          100.000000%
     King Radio S.A.                                                   95.000000%
     Klippan N.V.                                                     100.000000%
     LG AlliedSignal Corporation                                       50.000000%
     LORI, Inc.                                                       100.000000%
          Lori Asia Pte. Ltd.                                         100.000000%
          Lorimark, Inc.                                              100.000000%
     Light Helicopter Turbine Engine Company (Partnership              50.000000%
     Interest)
     Nanoglass LLC                                                     50.000000%
     Nippon Amorphous Metals Co., Ltd.                                 50.000000%
     Nirlon Limited                                                     1.900361%
     Nitto Boseki Co., Ltd.                                             0.010000%
     Norplex Oak India Limited                                         20.000000%
     Opex Corporation                                                 100.000000%
          AlliedSignal Polymer Company, L.P.                            2.000000%

 

                                                                
     Pacific BBA Ltd.                                               (less than 1%)
     Prestolite of India, Ltd.                                         33.330000%
     Prestone Holdings Inc.                                           100.000000%
          Prestone Products Corporation                               100.000000%
               AlliedSignal Canada Inc.                                 0.422535%
     Quimobasicos, S.A. de C.V.                                       100.000000%
          Propelentes Mexicanos, S.A.                                  80.000000%
     Quimobasicos, S.A. de C.V.                                       100.000000%
     Realdix Corporation                                              100.000000%
     Remtex Mfg., Inc.                                                100.000000%
          AlliedSignal TBS Holdings, Inc.                              12.150000%
          AlliedSignal de Mexico, S.A. de C.V.                          0.366867%
     Rubix                                                             50.000000%
     Rumford Automotive Products Co.                                  100.000000%
     SN-Centro de Pesquisas e Promocao de Sulfato                      99.989246%
     de Amonio Ltda.
     Shenco Limited (Partnership Interest)                             90.000000%
     Technofan                                                          3.266099%
     The Bendix Corporation                                           100.000000%
     Transitions Two (Partnership Interest)                             5.740000%
     Turbo Services S.N.C.                                              1.000000%
     Turbodina S.A.I.y.C.                                              77.977843%
     USHA Amorphous Metals, Ltd.                                       50.000000%
     Universal Assets Inc.                                             50.000000%
     Universal Assets Inc. (Preferred Stock)                           29.333333%

MANAGEMENT AND CONTROL

4. DIRECTORS AND EXECUTIVE OFFICERS.  List the names and complete mailing
addresses of all directors and executive officers of the applicant and all
persons chosen to become directors or executive officers. Indicate all offices
with the applicant held or to be held by each person named.

The names of the directors and executive officers of the Company are set forth
below. The mailing address of each of the directors and executive officers is
101 Columbia Road, Morristown, NJ 07962.

                       
- --------------------------------------------------------------------------------
Hans W. Becherer           Director
- --------------------------------------------------------------------------------
Lawrence A. Bossidy        Director, Chairman and Chief Executive Officer
- --------------------------------------------------------------------------------
Daniel P. Burnham          Director and Vice Chairman
- --------------------------------------------------------------------------------
Ann M. Fudge               Director
- --------------------------------------------------------------------------------
Paul X. Kelley             Director
- --------------------------------------------------------------------------------
Robert P. Luciano          Director
- --------------------------------------------------------------------------------

 

                       
- --------------------------------------------------------------------------------
Robert B. Palmer           Director
- --------------------------------------------------------------------------------
Russell E. Palmer          Director
- --------------------------------------------------------------------------------
Frederic M. Poses          Director and Vice Chairman
- --------------------------------------------------------------------------------
Ivan G. Seidenberg         Director
- --------------------------------------------------------------------------------
Andrew C. Sigler           Director
- --------------------------------------------------------------------------------
John R. Stafford           Director
- --------------------------------------------------------------------------------
Thomas P. Stafford         Director
- --------------------------------------------------------------------------------
Robert C. Winters          Director
- --------------------------------------------------------------------------------
Henry T. Yang              Director
- --------------------------------------------------------------------------------
Peter M. Kreindler         Senior Vice President, General Counsel and Secretary
- --------------------------------------------------------------------------------
Joseph B. Leonard          Senior Vice President and President, Aerospace
                           Marketing, Sales and Service
- --------------------------------------------------------------------------------
Paul J. Norris             Senior Vice President and President, Specialty
                           Chemicals
- --------------------------------------------------------------------------------
Donald J. Redlinger        Senior Vice President, Human Resources and
                           Communications
- --------------------------------------------------------------------------------
Paul R. Schindler          Senior Vice President, Europe, India and the Middle
                           East
- --------------------------------------------------------------------------------
Richard F. Wallman         Senior Vice President and Chief Financial Officer
- --------------------------------------------------------------------------------

5. PRINCIPAL OWNERS OF VOTING SECURITIES.  Furnish the following information as
to each person owning 10 percent or more of the voting securities of the
applicant. As of April 30, 1998. based on information supplied by such 10%
owner in a Schedule 13G, as of December 31, 1997:

- ---------------------------------------------------------------------------------------------
NAME AND                   TITLE OF CLASS           AMOUNT OWNED              PERCENTAGE OF
COMPLETE                   OWNED                                              VOTING
MAILING ADDRESS                                                               SECURITIES
                                                                              OWNED
- ---------------------------------------------------------------------------------------------
                                                                    
State Street Bank &        Common Stock, par        69,261,968                12.3
Trust Company              value $1 per share
- ---------------------------------------------------------------------------------------------

                                  UNDERWRITERS

6. UNDERWRITERS. Give the name and complete mailing address of (a) each person
who, within three years prior to the date of filing the application, acted as an
underwriter of any securities of the obligor which were outstanding on the date
of filing the application, and (b) each proposed principal underwriter of the
securities proposed to be offered. As to each person specified in (a), give the
title of each class of securities underwritten. There are no underwriters of the
securities proposed to be offered in the Exchange Offer. Following are the
underwriters identified in Section 6(a) hereof:

 

  A. The following were the underwriters in the Company's issuance of $100
million of 6.75% Notes due August 15, 2000:

Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
Salomon Brothers Inc.

The mailing address for the above underwriters is: 55 Broad Street, New York,
NY 10004.

  B. The following were the underwriters in the Company's issuance of $200
million of 6.20% Notes due February 1, 2008:

Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
Salomon Brothers Inc.

The mailing address for the above underwriters is: 55 Broad Street, New York,
NY 10004.

  C. The following were the underwriters in the Company's issuance of $200
million of 5 3/4% remarketable securities due 2011:

J.P. Morgan Securities Inc.
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated

The mailing address for the above underwriters is: 60 Wall Street, New York,
NY 10260.

CAPITAL SECURITIES

  7. CAPITALIZATION. (a) Furnish the following information as to each authorized
class of securities of the applicant.

The following table sets forth the consolidated capitalization of the Company as
of April 30, 1998.

(i)  Equity Securities:

Title of Class                     Amount Authorized             Amount Outstanding
- --------------                     -----------------            -------------------
                                                          
Common Stock                  1,000,000,000 shares              563,714,332
$1 par value

 

                                                          
Preferred Stock                  20,000,000 shares                     none
No par value

(ii)     Debt Securities:                             Authorized and Outstanding
                                                             (in millions)
         ---------------                              --------------------------
                                                 
Employee stock ownership
  plan floating rate notes,
  4.29%-4.71%, due 1998-1999                                 $    48
6.75% notes due August 15, 2000                                  100
9 7/8% debentures due June 1, 2002                               250
9.20% debentures due February 15, 2003                           100
Medium term notes,
  8.93%-9.28%, due 1999-2001                                      69
Zero coupon bonds and
  money multiplier notes,
  13.0%-14.26%, due 1998-2009                                    164
9 1/2% debentures due June 1, 2016                               100
Industrial development bond
  obligations, 3.15%-6.75%, maturing
  at various dates through 2027                                  105
6.20% notes due February
  1, 2008                                                        200
5 3/4% Dealer remarketable
  securities due 2011                                            200
Other (including capitalized leases),
  1.54%-12.42%, maturing at various
  dates through 2016                                             249

(b) Give a brief outline of the voting rights of each class of voting securities
referred to in paragraph (a) above.

Common shareowners are entitled to one vote per share. Common shareowners do not
have preemptive or conversion rights. The Company may establish series of
preferred stock having such number of shares and such terms as it may determine.

  8. ANALYSIS OF INDENTURE PROVISIONS. Insert at this point the analysis of
indenture provisions required under Section 305(a)(2) of the Trust Indenture Act
of 1939, as amended.

  For purposes of this Section 8, the "Indenture" shall refer to the Indenture,
dated as of October 1, 1985, by and between AlliedSignal Inc. and The Chase
Manhattan Bank, as

 

Trustee (the "Trustee"), as supplemented by the First Supplemental Indenture 
dated as of February 1, 1991 and by the Second Supplemental Indenture dated as
of November 1, 1997. Other capitalized but otherwise undefined terms shall
have the meanings ascribed thereto in the Indenture or the Offering Circular.

     (A) EVENTS OF DEFAULT

     Events of Default with respect to any series of Debentures under the
Indenture include: (a) default in payment of any principal of or premium, if
any, on such series, except for principal due upon sinking fund redemptions;
(b) default in the payment of any installment of interest or sinking fund
redemption, if any, on such series and continuance of such default for a period
of 30 days; (c) default for 90 days after notice in the performance of any
other covenant in the Indenture; or (d) certain events of bankruptcy, insolvency
or reorganization in respect of the Company (Section 501). The Trustee may
withhold notice to the holders of Debentures of any default (except in the
payment of principal of or premium, if any, or interest on such series of
Debentures) if it considers such withholding to be in the interest of holders
of Debentures (Section 508). No Event of Default with respect to a particular
series of Debentures issued under the Indenture necessarily constitutes an Event
of Default with respect to any other series of Debentures.

     On the occurrence of an Event of Default, the Trustee or the holders of at
least 25% in principal amount at maturity of Debentures of each such series
then outstanding may declare the principal (or in the case of Debentures sold
at an original issue discount, the amount specified in the terms thereof) to be
due and payable immediately (Section 501). Upon payment of such amount, together
with any premium or interest due thereon, if any, all the Company's obligations
in respect to payment of indebtedness on such Debentures will terminate
(Sections 401, 501 and 502).

     Subject to provisions relating to its duties in case of default, the
Trustee is under no obligation to exercise any of its rights or powers under
the Indenture at the request, order or direction of any holders of Debentures
unless such holders of Debentures shall have offered to the Trustee reasonable
indemnity (Section 603).

     (B) AUTHENTICATION AND DELIVERY

     The New Debentures shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents, its
Treasurer or one of its Assistant Treasurers, under the Company's corporate seal
reproduced thereon and attested by the Secretary or one of the Assistant
Secretaries. Upon proper delivery of New Debentures to the Trustee for
authentication, the Trustee shall authenticate and deliver such securities. The
Indenture does not contain provisions regarding the application of the proceeds
from issuance of the New Debentures (Section 303).

     (C) RELEASE OF PROPERTY SUBJECT TO LIEN

     The Company's obligations under the New Debentures are not secured by any
liens or security interests on any assets of the Company. Accordingly, the
Indenture does not contain any provisions with respect to the release or the
release and substitution of any property subject to such a lien.

     (D)  SATISFACTION AND DISCHARGE

     The Indenture shall cease to be of further effect with respect to the
Debentures of any series when (1) either: (i) all the Debentures of such series
and Coupons appertaining thereto issued under the Indenture (except certain
Debentures which have been destroyed, lost or stolen and certain Debentures and
Coupons for whose payment money has theretofore been deposited in trust, held by
the Company and repaid or discharged from such trust) have been delivered to the
Trustee or an authenticating agent cancelled or for cancellation, or (ii) all
such Debentures and Coupons have become due and payable or will become due and
payable at their Stated Maturity, or have been called for redemption, and the
Company has deposited in trust funds sufficient to pay off and discharge such
Debentures and Coupons; (2) the Company has paid or caused to be paid all other
sums required to be paid under the Indenture; and (3) the Company has delivered
an appropriate officer's certificate and opinion of counsel to the Trustee
stating that all conditions precedent therein provided for relating to the
satisfaction and discharge of the Indenture with respect to the Debentures of
such series have been complied with (Section 401).

     (E) EVIDENCE OF COMPLIANCE WITH CONDITIONS AND COVENANTS

     The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year, a written statement stating (i) whether or not the Company has
fulfilled all its obligations under the Indenture throughout the year, and if a
default has occurred, providing details as to the circumstances of such
default(s), and (ii) that no event has occurred and is continuing which is or
would become a certain Event of Default, and if such an event has occurred,
providing details as to the circumstances of such default(s) (Section 1004).

 

  9. OTHER OBLIGORS.  Give the name and complete mailing address of any person,
other than the applicant, who is an obligor upon the indenture securities.

     No other person is an obligor with respect to the New Debentures.

                    CONTENTS OF APPLICATION FOR QUALIFICATION

     This application for qualification comprises:

     (a) Pages numbered one to 19, consecutively;

     (b) The statement of eligibility and qualification of the Trustee under the
Indenture to be qualified (on Form T-1 hereby incorporated by reference to
Exhibit 99 attached hereto);

     (c) The following exhibits, in addition to those filed as a part of the
statement of eligibility and qualification of the trustee:

         (i)    Exhibit T3A -- The Company's Restated Certificate of
                Incorporation (incorporated by reference to Exhibit 3(i) to the
                Company's Form 10-Q for the quarter ended March 31, 1997);

         (ii)   Exhibit T3B -- The Company's Bylaws, as amended (incorporated by
                reference to Exhibit 3(ii) to the Company's Form 10-Q for the
                quarter ended March 31, 1996);

         (iii)  Exhibit T3C.1 -- Indenture between the Company and The Chase
                Manhattan Bank (National Association), Trustee, dated as of
                October 1, 1985. (Incorporated by reference to Exhibit 4(b) to
                Registration Statement No. 33-04551);

         (iv)   Exhibit T3C.2 -- First Supplemental Indenture dated as of
                February 1, 1991 between the Company and The Chase Manhattan
                Bank (National Association), as Trustee;

         (v)    Exhibit T3C.3 -- Second Supplemental Indenture dated as of
                November 1, 1997 between the Company and The Chase Manhattan
                Bank, as Trustee (Incorporated by reference to Exhibit 4.5 to
                Amendment No. 2 to Registration Statement No. 33-64245;
                
         (vi)   Exhibit T3D -- Not applicable;

         (vii)  Exhibit T3E.1 -- Offering Circular, dated as of May 20, 1998;

         (viii) Exhibit T3E.2 -- Letter of Transmittal, dated as of May 20, 1998

 

         (ix)   Exhibit T3E.3 -- Form of Notice of Guaranteed Delivery, dated as
                of May 20, 1998

         (x)    Exhibit T3F -- Cross-Reference Sheet;

         (xi)   Exhibit 99 -- Form T-1 of The Chase Manhattan Bank.

                                    SIGNATURE

     Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the Company, AlliedSignal Inc., a corporation organized and existing
under the laws of the State of Delaware, has duly caused this application to be
signed on its behalf by the undersigned, thereunto duly authorized, and its seal
to be hereunto affixed and attested, all in the Township of Morris, and State of
New Jersey, on the 20th day of May, 1998.

(SEAL)                                 ALLIEDSIGNAL INC.

                                       By:     /s/ Peter M. Kreindler
                                               --------------------------
                                       Name:   Peter M. Kreindler
                                       Title:  Senior Vice President,
                                               General Counsel and Secretary

Attest: /s/  Dennis R. Marshall
        ----------------------
Name:   Dennis R. Marshall
Title:  Assistant Secretary

                     STATEMENT OF DIFFERENCE

The section symbol shall be expressed as .......................'SS'

                  FIRST SUPPLEMENTAL INDENTURE, dated as of February 1, 1991,
              between ALLIED-SIGNAL INC., a Delaware corporation (hereinafter
              called the "Corporation"), and The Chase Manhattan Bank (National
              Association), a national banking association organized and
              existing under the laws of the United States of America
              (hereinafter called the "Trustee").

              WHEREAS, the Corporation and the Trustee entered into an
Indenture, dated as of October 1, 1985 (hereinafter the "Original Indenture"),
providing for the creation, execution, authentication and delivery of certain
Debentures of the Corporation;

              WHEREAS, the Corporation has requested the Trustee to join with it
in the execution and delivery of this First Supplemental Indenture in order to
supplement and amend the Original Indenture, by amending and adding certain
provisions thereof, to facilitate the issuance of Debentures constituting medium
term notes and to permit the Corporation to require, if it shall so elect, that
the Debentures of any series be issued, in whole or in part, in the form of one
or more Global Debentures (as defined herein);

              WHEREAS, SECTION 901 of the Original Indenture provides, among
other things, that the Corporation, when authorized by the Board of Directors
and the Trustee, may

                                                                               2

from time to time and at any time enter into an indenture or indentures
supplemental to the Original Indenture for the purpose, inter alia, of making
additional provisions in regard to matters or questions arising thereunder as
shall not adversely affect the interests of the Holders of any series or the
Holders of any Coupons;

               WHEREAS, the Corporation and the Trustee are desirous of entering
into this First Supplemental Indenture for the purposes set forth in Section 901
of the Original Indenture as referred to above; and

               WHEREAS, all acts and things necessary to cause this First
Supplemental Indenture to be a valid, binding and legal instrument of the
Corporation have been done and performed by the Corporation, and the execution
and delivery of this First Supplemental Indenture have in all respects been duly
authorized by the Corporation, and the Corporation, in the exercise of the legal
right and power in it vested, executes this First Supplemental Indenture.

                                                                               3

               NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE
WITNESSETH:

               For and in consideration of the premises and the covenants herein
contained and the purchase and acceptance of the Debentures issued hereunder by
the Holders thereof, and for other valuable consideration, the receipt of which
is hereby acknowledged, the Corporation covenants and agrees with the Trustee,
for the equal and proportionate benefit of the respective Holders from time to
time of the Debentures, as follows:

                                  ARTICLE ONE

                                  DEFINITIONS

               Except as otherwise defined in or amended by this Firat
Supplemental Indenture, each capitalized term used herein shall have the meaning
assigned thereto in the Original Indenture.

                                   ARTICLE TWO

                     MODIFICATIONS OF THE ORIGINAL INDENTURE

               A. Section 101 of the Original Indenture is amended to add new
definitions thereto, in the appropriate

                                                                               4

alphabetical sequence, as follows:

              "'Depository' means, unless otherwise specified by the Corporation
            pursuant to either Section 203 or 302, with respect to Debentures of
            any series issuable or issued as a Global Debenture, The Depository
            Trust Company, New York, New York, or any successor thereto
            registered as a clearing agency under the Securities Exchange Act of
            1934, as amended, or other applicable statute or regulation."

              "'Global Debenture' means, with respect to any series of
            Debentures issued hereunder, a Debenture which is executed by the
            Corporation and authenticated and delivered by the Trustee to the
            Depository or pursuant to the Depository's instruction or retained
            by the Trustee pursuant to the Depository's instruction, all in
            accordance with this Indenture and any indenture supplemental
            hereto, if any, or Board Resolution and pursuant to a Corporation
            Request, which shall be registered in the name of the Depository or
            its nominee and which shall represent, and shall be denominated in
            an amount equal to the aggregate principal amount of, all of the
            Outstanding Debentures of such series or any portion thereof, in
            either case having the same terms, including, without limitation,
            the same original issue date, date or dates on which principal is
            due, and interest rate or method of determining interest."

              B. Section 101 of the Original Indenture is further amended by
amending the definition of "Corporate Trust Office" to read in its entirety as
follows:

              "'Corporate Trust Office' means the principal office of the
            Trustee in the The City of New York at which at any particular time
            its corporate trust business shall be administered, except that with
            respect to presentation of Debentures for payment or for
            registration of transfer or exchange and the location of the
            Debenture Register, such term shall mean the office or agency of the
            Trustee in The City of New York at which, at any particular time,
            its corporate agency business shall be conducted."

                                                                               5

              C. Section 101 of the Original Indenture is further amended to add
to the definition of the term "Paying Agent", after the word "Corporation", 
the following:

              "The Corporation initially authorizes the Trustee to act as Paying
            Agent for the Debentures on its behalf. The Corporation may at any
            time and from time to time authorize one or more Persons to act as
            Paying Agent in addition to or in place of the Trustee with respect
            to any series of Debentures issued under this Indenture."

              D. Article Two of the Original Indenture is amended to add a new
Section 203, which reads in its entirety as follows:

              "SECTION 203. Debentures Issuable in the Form of a Global
            Debenture. (a) If the Corporation shall establish pursuant to
            Sections 201 and 302 that the Debentures of a particular series are
            to be issued in whole or in part in the form of one or more Global
            Debentures, then the Corporation shall execute and the Trustee or
            its agent shall, in accordance with Section 303 and the Corporation
            Request delivered to the Trustee or its agent thereunder,
            authenticate and deliver, such Global Debenture or Debentures, which
            (i) shall represent, and shall be denominated in an amount equal to
            the aggregate principal amount of, the Outstanding Debentures of
            such series to be represented by such Global Debenture or
            Debentures, or such portion thereof as the Corporation shall specify
            in a Corporation Request, (ii) shall be registered in the name of
            the Depository for such Global Debenture or Debentures or its
            nominee, (iii) shall be delivered by the Trustee or its agent to the
            Depository or pursuant to the Depository's instruction or retained
            by the Trustee pursuant to the Depository's instruction and (iv)
            shall bear a legend substantially to the following effect: 'Unless
            and until it is exchanged in whole or in part for the individual
            Debentures represented hereby this Global Debenture may not be
            transferred except as a whole by the Depository to a nominee of the
            Depository or by a nominee of the Depository to the Depository or
            another nominee of the Depository or by the Depository

                                                                               6

            or any such nominee to a successor Depository or a nominee of such
            successor Depository.'

              (b) Notwithstanding any other provision of this Section 203 or of
            Section 306, and subject to the provisions of paragraph (c) below,
            unless the terms of a Global Debenture expressly permit such Global
            Debenture to be exchanged in whole or in part for individual
            Debentures, a Global Debenture may be transferred, in whole but not
            in part and in the manner provided in Section 306, only to a nominee
            of the Depository for such Global Debenture, or to the Depository,
            or to a successor Depository for such Global Debenture selected or
            approved by the Corporation, or to a nominee of such successor
            Depository.

              (c) (i) If at any time the Depository for a Global Debenture
            notifies the Corporation that it is unwilling or unable to continue
            as Depository for such Global Debenture or if at any time the
            Depository with respect to any series of Debentures represented in
            whole or in part by a Global Debenture shall no longer be eligible
            or in good standing under the Securities Exchange Act of 1934, as
            amended, or other applicable statute or regulation, the Corporation
            shall appoint a successor Depository with respect to such Global
            Debenture. If a successor Depository for such Global Debenture is
            not appointed by the Corporation within 90 days after the
            Corporation receives such notice or becomes aware of such
            ineligibility, the Corporation will execute, and the Trustee or its
            agent, upon receipt of a Corporation request for the authentication
            and delivery of individual Debentures of such series in exchange for
            such Global Debenture, will authenticate and deliver, individual
            Debentures of such series of like tenor and terms in an aggregate
            principal amount equal to the principal amount of such Global
            Debenture in exchange for such Global Debenture.

              (ii) The Corporation may at any time and in its sole discretion
            determine that the Debentures of any series or portion thereof
            issued or issuable in the form of one or more Global Debentures
            shall no longer be represented by such Global Debenture or
            Debentures. In such event the Corporation will execute, and the
            Trustee, upon receipt of a Corporation Request for the
            authentication and delivery of individual Debentures of such series
            in exchange in whole or in part for such Global Debenture or
            Debentures, will authenticate and

                                                                               7

            deliver, individual Debentures of such series of like tenor and
            terms in definitive form in an aggregate principal amount equal to
            the principal amount of such Global Debenture or Debentures
            representing such series or portion thereof in exchange for such
            Global Debenture or Debentures.

              (iii) If specified by the Corporation pursuant to Sections 201 and
            302 with respect to Debentures issued or issuable in the form of a
            Global Debenture, the Depository for such Global Debenture may
            surrender such Global Debenture in exchange in whole or in part for
            individual Debentures of such series of like tenor and terms in
            definitive form on such terms as are acceptable to the Corporation
            and such Depository. Thereupon the Corporation shall execute, and
            the Trustee or its agent shall authenticate and deliver, without
            service charge, (1) to each Person specified by such Depository a
            new Debenture or Debentures of the same series of like tenor and
            terms and of any authorized denomination as requested by such Person
            in aggregate principal amount equal to and in exchange for such
            Person's beneficial interest in such Global Debenture and (2) to
            such Depository a new Global Debenture of like tenor and terms and
            in an authorized denomination equal to the difference, if any,
            between the principal amount of the surrendered Global Debenture and
            the aggregate principal amount of Debentures delivered to Holders
            thereof.

              (iv) In any exchange provided for in any of the preceding three
            paragraphs, the Corporation will execute, and the Trustee or its
            agent will authenticate and deliver, individual Debentures in
            definitive registered form in authorized denominations. Upon the
            exchange of the entire principal amount of a Global Debenture for
            individual Debentures, such Global Debenture shall be cancelled by
            the Trustee or its agent. Except as provided in the preceding
            paragraph, Debentures issued in exchange for a Global Debenture
            pursuant to this Section shall be registered in such names and in
            such authorized denominations as the Depository for such Global
            Debenture, pursuant to instructions from its direct or indirect
            participants or otherwise, shall instruct the Trustee or the
            Debenture Registrar. The Trustee or the Debenture Registrar shall
            deliver such Debentures to the Persons in whose names such
            Debentures are so registered."

                                                                               8

              E. Section 302 of the Original Indenture is amended to (i)
redesignate paragraph (o) as paragraph (p) and (ii) add a new paragraph (o) as
follows:

              "(o) issuance in whole or in part in the form of a Global
Debenture or Debentures; the terms and conditions, if any, upon which any such
Global Debenture or Debentures may be exchanged in whole or in part for other
individual Debentures; and the Depository for any such Global Debenture or
Debentures; and"

              F. The first paragraph of Section 306 of the Original Indenture is
amended by amending the second sentence of such paragraph to read in its
entirety as follows:

              "The Trustee is hereby initially appointed "Debenture Registrar"
            for the purpose of registering Registered Debentures and transfers
            of Registered Debentures as herein provided; provided, however, that
            the Corporation may at any time and from time to time authorize any
            Person to act as Debenture Registrar in place of the Trustee with
            respect to any series of Debentures issued under this Indenture.

              G. The second paragraph of Section 306 of the Original Indenture
is amended to add the words "Subject to Section 203," before the word "Upon" in
the first sentence of such paragraph.

              H. The third paragraph of Section 306 of the Original Indenture is
amended to add the words "Subject to Section 203," before the words "At the
option of the Holder thereof" in both the first and second sentences of such
paragraph.

                                                                               9

              I. The following paragraph is added at the end of Section 306 of
the Original Indenture:

              "None of the Corporation, the Trustee, any agent of the Trustee,
            any Paying Agent or the Debenture Registrar will have any
            responsibility or liability for any aspect of the records relating
            to or payments made on account of beneficial ownership interests of
            a Global Debenture or for maintaining, supervising or reviewing any
            records relating to such beneficial ownership interests."

              J. Article Three of the Original Indenture is amended to add a new
Section 314, which reads in its entirety as follows:

              "Section 314. Debentures Constituting Medium-term Notes. (a)
            Notwithstanding any contrary provision herein, if all Debentures of
            a series are not to be originally issued at one time, it shall not
            be necessary for the Corporation to deliver to the Trustee an
            Officers' Certificate, supplemental indenture, Opinion of Counsel,
            Corporation Request or other document otherwise required pursuant to
            Sections 102, 201, 302 and 304 at or prior to the time of
            authentication of each Debenture of such series if such documents
            are delivered to the Trustee or its agent at or prior to the
            authentication upon original issuance of the first Debenture of such
            series to be issued; provided that any subsequent instruction by the
            Corporation to the Trustee to authenticate Debentures of such series
            upon original issuance shall constitute a representation and
            warranty by the Corporation that as of the date of such instruction,
            the statements made in the Officers' Certificate delivered pursuant
            to Section 102 shall be true and correct as if made on such date.

              An Officers' Certificate delivered by the Corporation to the
            Trustee in the circumstances set forth in the preceding paragraph
            may provide that Debentures which are the subject thereof will be
            authenticated and delivered by the Trustee or its agent on original
            issue from time to time upon the telephonic or written order of
            Persons designated in such Officers' Certificate (any such
            telephonic

                                                                              10

            instructions to be promptly confirmed in writing by such persons)
            and that such Persons are authorized on behalf of the Pricing
            Committee to determine, consistent with such Officers' Certificate,
            such terms and conditions of said Debentures as are specified in
            such Officers' Certificate."

              (b) Notwithstanding any contrary provision herein, (i) Debentures
            of the series referred to as "Medium-Term Notes, Series A" (which
            Debentures are described in the Prospectus Supplement dated February
            1, 1991, to the Company's Prospectus dated November 14, 1988) shall
            not be required to be identical as set forth in the third sentence
            of Section 301, provided, however, that all Debentures of such
            series shall be identical in respect of covenants and Events of
            Default, and (ii) the terms of any Debenture of such series may be
            determined at the time of issuance of such Debenture by the Pricing
            Committee (or by any Person authorized to determine such terms on
            behalf of the Pricing Committee).

              K. Article Five of the Original Indenture is amended to add a new
Section 511, which reads in its entirety as follows:

              "SECTION 511. Record Dates for Action by Holders. If the
Corporation shall solicit from the Holders of Debentures of any series any
action (including the making of any demand or request, the giving of any
direction, notice, consent or waiver or the taking of any other action), the
Corporation may, at its option, by Board Resolution or action taken by the
Pricing Committee, fix in advance a record date for the determination of Holders
of Debentures entitled to take such action, but the Corporation shall have no
obligation to do so. Any such record date shall be fixed at the Corporation's
discretion. If such a record date is fixed, such action may be sought or given
before or after the record date, but only the Holders of Debentures of record at
the close of business on such record date shall be deemed to be Holders of
Debentures for the purpose of determining whether Holders of the requisite
proportion of Debentures of such series Outstanding have authorized or agreed or
consented to such action, and for that purpose the Debentures of such series
Outstanding shall be computed as of such record date."

 .

                                                                              11

               L. The second paragraph of Section 1102 of the Original Indenture
is amended to add the words "(or, in the case of any Global Debenture, the
Depository)" after the words "the Holder" and before the words "the Trustee' in
the third sentence of such paragraph.

               M. The fourth paragraph of Section 1102 of the Original Indenture
is amended to add the words "of like tenor and terms" after the words "the
Debentures" and before the words "are to be redeemed" in the first sentence of
such paragraph.

              N. The fourth paragraph of Section 1102 of the Original Indenture
is further amended to add the following sentence as the last sentence of such
paragraph:

              "Notwithstanding any of the foregoing, if less than all the
            Debentures of unlike tenor and terms of any series are to be
            redeemed, the particular Debentures to be redeemed shall be selected
            by the Corporation, and the notice shall specify the Debentures to
            be redeemed."

                                  ARTICLE THREE

                            MISCELLANEOUS PROVISIONS

              1. The Original Indenture, as amended and modified by this First
Supplemental Indenture, hereby is in all respects ratified, confirmed and
approved.

              2. This First Supplemental Indenture shall be construed in
connection with and as part of the Original Indenture.

                                                                              12

              3. This First Supplemental Indenture may be executed in any number
of counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.

              4. The recitals contained herein shall not be taken as the
statements of the Corporation, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representation as to the validity or
sufficiency of this First Supplemental Indenture.

              5. This First Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York.

              The Chase Manhattan Bank (National Association) hereby accepts the
trusts in this First Supplemental Indenture declared and provided, upon the
terms and conditions hereinabove set forth.

                                                                              13

               IN WITNESS WHEREOF, ALLIED-SIGNAL INC. has caused this First
Supplemental Indenture to be duly signed and acknowledged by one of its officers
thereunto duly authorized, and its corporate seal to be affixed hereunto, and
the same to be attested by its Secretary or an Assistant Secretary; and THE
CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) has caused this First
Supplemental Indenture to be duly signed and acknowledged by one of its officers
thereunto duly authorized, and its corporate seal to be affixed hereunto, and
the same to be attested by one of its officers thereunto duly authorized.

                                             ALLIED-SIGNAL INC.,

                                             By  /s/ R.C. Matthews
                                               ---------------------------
SEAL                                            Name: R.C. Matthews
                                                Title: Assistant Treasurer
Attest:

 /s/ H. B. Flanders, Jr.
- ----------------------------
Name: H. B. Flanders, Jr.
Title: Assistant Secretary

                                             THE CHASE MANHATTAN BANK
                                             (NATIONAL ASSOCIATION),

                                             By  /s/ Ann L. Edmonds
                                               -----------------------
SEAL                                           Name: Ann L. Edmonds
                                               Title: Vice President
Attest:

  /s/ Thomas Provenzano
- ------------------------
Name: Thomas Provenzano
Title: Assistant Secretary

                                                                              14

STATE OF NEW JERSEY,  )
                      )  ss.:
     COUNTY OF MORRIS )

               Personally appeared before me the undersigned, a Notary Public in
and for said County,             and                , to me known and known
to me to be respectively             and                 of Allied-Signal Inc.,
one of the corporations which executed the foregoing instrument, who severally
acknowledged that they did sign and seal said instrument as such officers for
and on behalf of said corporation, and that the same is their free act and deed
as such officers, and the free and corporate act and deed of said Allied-Signal
Inc.; that they were duly authorized thereunto by its board of directors; and
that the seal affixed to said instrument is the corporate seal of said
corporation.

               IN WITNESS WHEREOF I have hereunto set my hand and official seal
this              day of February 1991.

                                           ---------------------------
                                                  Notary Public

[Notarial Seal]

STATE OF NEW YORK,    )
                      ) ss.:
COUNTY OF NEW YORK    )

               Personally appeared before me the undersigned, a Notary Public in
and for said County,                   and                   , to me known
and known to me to be respectively                       and                 of
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), one of the corporations which
executed the foregoing instrument, who severally acknowledged that they did sign
and seal said instrument as such officers for and on behalf of said corporation,
and that the same is their free act and deed as such officers, and the free and
corporate act and deed of said THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION);
that they were duly authorized thereunto by its board of directors; and that the
seal affixed to said instrument is the corporate seal of said corporation.

               IN WITNESS WHEREOF, I have hereunto set my hand and official seal
this          day of February 1991.

                                              ---------------------
                                                  Notary Public

[Notarial Seal]

Exhibit T3E.1 -- Offering Circular, dated as of May 20, 1998;

OFFERING CIRCULAR                                           Cusip No. 019512 AC6
 
                                     [Logo]
 
                               OFFER TO EXCHANGE
                          DEBENTURES DUE JUNE 1, 2033
                       FOR ANY AND ALL OF ITS OUTSTANDING
                       9 1/2% DEBENTURES DUE JUNE 1, 2016
 
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON THURSDAY, JUNE 18, 1998, UNLESS EXTENDED (THE 'EXPIRATION DATE').
 
     ALLIEDSIGNAL INC. (the 'Company') hereby offers, upon the terms and subject
to the conditions set forth in this Offering Circular (the 'Offering Circular')
and the accompanying Letter of Transmittal (which together constitute the
'Exchange Offer'), to exchange an aggregate principal amount of up to
$100,000,000 of its Debentures Due June 1, 2033 (the 'New Debentures') for a
like principal amount of its issued and outstanding 9 1/2% Debentures Due June
1, 2016 (the 'Old Debentures') from the registered holders thereof. See
'Description of New Debentures'. The New Debentures will evidence a new series
of debt and will be issued pursuant to, and entitled to the benefits of, an
Indenture, dated as of October 1, 1985 between the Company and The Chase
Manhattan Bank, as trustee, as supplemented by the First Supplemental Indenture
dated as of February 1, 1991 and by the Second Supplemental Indenture dated as
of November 1, 1997 (as so supplemented, the 'Indenture'). Although the Old
Debentures are listed on the New York Stock Exchange (the 'NYSE'), the Company
does not intend to apply for listing of the New Debentures on the NYSE or any
other exchange.
 
     The Company will accept for exchange any and all Old Debentures validly
tendered and not withdrawn prior to the Expiration Date. Old Debentures may be
tendered only in denominations of $1,000 or an integral multiple thereof. See
'The Exchange Offer -- Procedures for Tendering Old Debentures'. The Exchange
Offer is subject to certain customary conditions. See 'The Exchange
Offer -- Conditions to the Exchange Offer'.
 
                                             (cover page continued on next page)
 
                                ---------------
     SEE 'RISK FACTORS' ON PAGE 11 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED IN EVALUATING THE EXCHANGE OFFER.
                                ---------------
THE OFFER OF THE SECURITIES CONTEMPLATED IN THE EXCHANGE OFFER IS MADE PURSUANT
   TO THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SECTION 5 OF THE
    SECURITIES ACT OF 1933, AS AMENDED (THE 'SECURITIES ACT'), PROVIDED BY
    SECTION 3(a)(9) THEREOF AND, ACCORDINGLY, THE OFFER OF SUCH SECURITIES
     HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
 SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
    HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
     COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFERING
    CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
                                ---------------
              The date of this Offering Circular is May 20, 1998.

(continued from cover page)
 
     The New Debentures will bear interest at a rate that could be different
than the interest rate on the Old Debentures (the 'Old Coupon'), as described
herein. For the Old Debentures, a price (the 'Reference Price of the Old
Debentures') will be determined using a specified fixed spread pricing formula.
The Reference Price of the Old Debentures will be based on a yield (the
'Reference Yield of the Old Debentures') to the maturity date of the Old
Debentures equal to (i) the yield (the 'Benchmark Treasury Yield') on the 6 1/8%
U.S. Treasury Bond due November 15, 2027 (the 'Benchmark Treasury Security')
plus (ii) 72 basis points (the '2016 Fixed Spread'). For the New Debentures, a
per annum interest rate (expressed as a percentage with three decimal places
rounded to the nearest half basis point) (the 'New Coupon') will be determined
such that the price of the New Debentures (the 'Reference Price of the New
Debentures') will be at least $15.00 greater than the Reference Price of the Old
Debentures per $1,000 principal amount thereof. The Reference Price of the New
Debentures will be based on a yield (the 'Reference Yield of the New
Debentures') to the maturity date of the New Debentures equal to (i) the
Benchmark Treasury Yield plus (ii) 88 basis points (the '2033 Fixed Spread').
For each $1,000 principal amount of Old Debentures exchanged, the Holder thereof
will receive $1,000 principal amount of New Debentures. The New Coupon and the
reference prices will be determined as of 2:00 p.m., New York City time, on June
16, 1998, unless the Exchange Offer is extended by more than three business
days, in which case they will be determined on the second business day prior to
the Expiration Date (the 'Price Determination Date').
 
     Interest on the New Debentures will accrue from the last interest payment
date on the Old Debentures (June 1, 1998) at the New Coupon. The first interest
payment date on the New Debentures will be December 1, 1998. Accordingly,
holders exchanging Old Debentures for New Debentures will not receive any
interest payment in respect of Old Debentures so exchanged. However, if the New
Coupon is lower than the Old Coupon, on the Exchange Date (as defined below) the
Company will pay an amount in cash in respect of accrued interest per $1,000
principal amount for each Old Debenture exchanged (rounded to the nearest
thousandth of a cent) (the 'Accrued Interest Differential') equal to the
difference between the Old Coupon and the New Coupon accrued on such principal
amount for the period from June 1, 1998 to, but excluding, the Exchange Date.
The 'Exchange Date' will be the fifth business day following the Expiration Date
(i.e., June 25, 1998, unless the Expiration Date is extended).
 
     The purpose of the Exchange Offer is to take advantage of currently
available interest rates by exchanging a portion of the Company's long-term debt
portfolio upon terms which the Company believes are more beneficial to it. The
Company intends to accomplish this objective by extending the overall maturity
of a portion of its long-term debt portfolio.
 
     Based on an interpretation by the staff of the Division of Corporation
Finance of the Securities and Exchange Commission (the 'Commission'), the
Company believes that the New Debentures issued pursuant to the Exchange Offer
may be offered for resale, resold and otherwise transferred by any holder
thereof without compliance with the registration requirements of the Securities
Act.
 
     The Company has not entered into any arrangement or understanding with any
person to distribute the New Debentures to be received in the Exchange Offer
and, to the best of the Company's information and belief, each person
participating in the Exchange Offer is acquiring the New Debentures in the
ordinary course of business and has no arrangement or understanding with any
person to participate in the distribution of the New Debentures.
 
     The Company has made no arrangements for and has no understanding with any
dealer, salesman or other person regarding the solicitation of tenders
hereunder, and no person has been authorized by the Company to give any
information or to make any representations in connection with the Exchange Offer
other than those contained or incorporated by reference in this Offering
Circular and, if given or made, such other information or representations must
not be relied upon as having been authorized. Neither the delivery of this
Offering Circular nor the exchange of New Debentures for Old Debentures shall,
under any circumstances, create any implication that the information contained
herein is correct as of any time subsequent to the date hereof.
 
(cover page continued on the next page)
 
                                       2

(cover page continued from previous page)
 
     The Company will not receive any proceeds from the Exchange Offer. The
Company has agreed to bear the expenses of the Exchange Offer.
 
     The Exchange Agent (as defined herein) and The Depository Trust Company
('DTC') have confirmed that the Exchange Offer is eligible for the DTC Automated
Tender Offer Program ('ATOP'). Accordingly, DTC participants may electronically
transmit their acceptance of the Exchange Offer by causing DTC to transfer Old
Debentures to the Exchange Agent in accordance with DTC's ATOP procedures for
such a transfer. DTC will then send an Agent's Message (as defined herein) to
the Exchange Agent.
 
                                       3

     NONE OF THE COMPANY, THE BOARD OF DIRECTORS OF THE COMPANY, THE EXECUTIVE
OFFICERS OF THE COMPANY, THE FINANCIAL ADVISOR, THE INFORMATION AGENT OR THE
EXCHANGE AGENT MAKES ANY RECOMMENDATION TO HOLDERS OF THE OLD DEBENTURES AS TO
WHETHER TO EXCHANGE OR REFRAIN FROM EXCHANGING THEIR OLD DEBENTURES. IN
ADDITION, NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF
OLD DEBENTURES MUST MAKE THEIR OWN DECISION WHETHER TO EXCHANGE OLD DEBENTURES
PURSUANT TO THE EXCHANGE OFFER AND, IF SO, THE AGGREGATE PRINCIPAL AMOUNT OF OLD
DEBENTURES TO EXCHANGE.
 
     THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
TENDERS FOR EXCHANGE FROM, HOLDERS OF OLD DEBENTURES IN ANY JURISDICTION IN
WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
 
                             AVAILABLE INFORMATION
 
     The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the 'Exchange Act') and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
'Commission'). Reports, proxy statements and other information filed by the
Company with the Commission can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
DC 20549 and at the following Regional Offices of the Commission: 7 World Trade
Center, New York, New York 10048; and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, DC 20549, at prescribed rates. The Commission maintains an Internet
web site at http://www.sec.gov/ that contains such reports, proxy statements and
other information. Such reports, proxy statements and other information of the
Company should also be available for inspection at the offices of the New York
Stock Exchange Inc., 20 Broad Street, New York, New York 10005; the Chicago
Stock Exchange, One Financial Place, 440 South LaSalle Street, Chicago,
Illinois, 60605; and the Pacific Stock Exchange, 301 Pine Street, San Francisco,
California 94104.
 
     The Company has instructed the Financial Advisor, the Exchange Agent and
the Information Agent not to solicit exchanges in connection with the Exchange
Offer or to make any recommendation with respect to acceptance or rejection of
the Exchange Offer. Solicitations will be made solely by employees of the
Company. The Financial Advisor, the Exchange Agent and the Information Agent
will answer any questions from holders of the Old Debentures with respect to the
Exchange Offer solely by reference to the terms of this Offering Circular and
holders may contact the Financial Advisor, the Exchange Agent and the
Information Agent at the addresses and telephone numbers listed below. Holders
of the Old Debentures who have any questions regarding the mechanics of the
Exchange Offer should contact either the Exchange Agent or the Information
Agent. In addition, all questions with respect to the Exchange Offer may be
directed to the Company (Assistant Treasurer, telephone number (973) 455-5109).

                                                       
                   Financial Advisor                                         Information Agent
             DEUTSCHE MORGAN GRENFELL INC.                                GEORGESON & COMPANY INC.
                  31 West 52nd Street                                        Wall Street Plaza
                New York, New York 10019                                 88 Pine Street, 30th Floor
             (212) 469-7512 (call collect)                                New York, New York 10005
                                                                      Banks and brokers call collect:
                                                                               (212) 440-9800
                                                                         All others call toll-free:
                                                                               (800) 223-2064

                                                                      
                                                 Exchange Agent
                                            THE CHASE MANHATTAN BANK
              By Fax:                    By Hand or Overnight Courier:                    By Mail:
           (214) 672-5932                   The Chase Manhattan Bank              The Chase Manhattan Bank
       Attention: Frank Ivins            c/o Chase Bank of Texas, N.A.         c/o Chase Bank of Texas, N.A.
                                            Corporate Trust Services              Corporate Trust Services
                                                1201 Main Street                      P.O. Box 219052
                                                   18th Floor                     Dallas, Texas 75221-9052
                                              Dallas, Texas 75202                  Attention: Frank Ivins
                                             Attention: Frank Ivins
                                             Phone: (214) 672-5678

                                       4

                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
 
     The following documents filed with the Commission by the Company are
incorporated herein by reference:
 
          (1) the Company's Annual Report on Form 10-K for the year ended
     December 31, 1997;
 
          (2) the Company's Quarterly Report on Form 10-Q for the quarter ended
     March 31, 1998;
 
          (3) the Company's Current Reports on Form 8-K filed on January 15,
     February 2, February 5, February 18, February 23, March 18, April 22 and
     April 28, 1998; and
 
          (4) the Company's Application on Form T-3 filed on May 20, 1998.
 
     All reports and other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date
of this Offering Circular and prior to the termination of the offering of the
New Debentures shall be deemed to be incorporated by reference in this Offering
Circular and to be part hereof from the date of filing of such documents. Any
statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be modified or superseded for purposes of
this Offering Circular to the extent that a statement contained herein, or in
any other subsequently filed document which also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Offering Circular.
 
     A copy of the documents incorporated by reference (other than exhibits
thereto) will be forwarded without charge to each person to whom this Offering
Circular is delivered, upon such person's written or oral request to
AlliedSignal Inc., Office of the Secretary, P.O. Box 4000, Morristown, New
Jersey 07962, telephone number (973) 455-5067.
 
                                       5

                           OFFERING CIRCULAR SUMMARY
 
     The following summary is qualified in its entirety by the more detailed
information appearing elsewhere, or incorporated by reference, in this Offering
Circular. See 'Risk Factors' on page 11 for a discussion of certain factors that
should be considered in connection with the Exchange Offer and the New
Debentures offered hereby.
 
                                  THE COMPANY
 
     The Company is an advanced technology and manufacturing company serving
customers worldwide with aerospace and automotive products, chemicals, fibers,
plastics and advanced materials. The Company is organized into eleven strategic
business units. The Company's products are used by many major industries,
including textiles, construction, plastics, electronics, automotive, chemicals,
housing, telecommunications, utilities, packaging, agriculture, military and
commercial aviation and aerospace and in the space program.
 
     The principal executive offices of the Company are located at 101 Columbia
Road, Morris Township, New Jersey 07962. The telephone number is (973) 455-2000.
 
                               THE EXCHANGE OFFER

                                         
The Exchange Offer........................  Upon the terms and subject to the conditions of the Exchange Offer,
                                            the Company is offering to any holder in exchange for any and all of
                                            its Old Debentures an equal principal amount of newly issued New
                                            Debentures.

                                            The New Debentures will bear interest at a rate that could be
                                            different than the interest rate on the Old Debentures (the 'Old
                                            Coupon'), as described herein. For the Old Debentures, a price (the
                                            'Reference Price of the Old Debentures') will be determined using a
                                            specified fixed spread pricing formula. The Reference Price of the
                                            Old Debentures will be based on a yield (the 'Reference Yield of the
                                            Old Debentures') to the maturity date of the Old Debentures equal to
                                            (i) the yield (the 'Benchmark Treasury Yield') on the 6 1/8% U.S.
                                            Treasury Bond due November 15, 2027 (the 'Benchmark Treasury
                                            Security') plus (ii) 72 basis points (the '2016 Fixed Spread'). For
                                            the New Debentures, a per annum interest rate (expressed as a
                                            percentage with three decimal places rounded to the nearest half
                                            basis point) (the 'New Coupon') will be determined such that the
                                            price of the New Debentures (the 'Reference Price of the New
                                            Debentures') will be at least $15.00 greater than the Reference Price
                                            of the Old Debentures per $1,000 principal amount thereof. The
                                            Reference Price of the New Debentures will be based on a yield (the
                                            'Reference Yield of the New Debentures') to the maturity date of the
                                            New Debentures equal to (i) the Benchmark Treasury Yield plus (ii) 88
                                            basis points (the '2033 Fixed Spread'). For each $1,000 principal
                                            amount of Old Debentures exchanged, the holder thereof will receive
                                            $1,000 principal amount of New Debentures. The New Coupon and the
                                            reference prices will be determined as of 2:00 p.m., New York City
                                            time, on June 16, 1998, unless the Exchange Offer is extended by more
                                            than three business

                                       6

 

                                            days, in which case they will be determined on the second business
                                            day prior to the Expiration Date (the 'Price Determination Date').

                                            Interest on the New Debentures will accrue from the last interest
                                            payment date on the Old Debentures (June 1, 1998) at the New Coupon.
                                            The first interest payment date on the New Debentures will be
                                            December 1, 1998. Accordingly, holders exchanging Old Debentures for
                                            New Debentures will not receive any interest payment in respect of
                                            Old Debentures so exchanged. However, if the New Coupon is lower than
                                            the Old Coupon, on the Exchange Date the Company will pay an amount
                                            in cash in respect of accrued interest per $1,000 principal amount
                                            for each Old Debenture exchanged (rounded to the nearest thousandth
                                            of a cent) (the 'Accrued Interest Differential') equal to the
                                            difference between the Old Coupon and the New Coupon accrued on such
                                            principal amount for the period from June 1, 1998 to, but excluding,
                                            the Exchange Date. The 'Exchange Date' will be the fifth business day
                                            following the Expiration Date (i.e., June 25, 1998, unless the
                                            Expiration Date is extended).

                                            The New Debentures will constitute, and the Old Debentures
                                            constitute, direct, unsecured and unsubordinated obligations of the
                                            Company.

Calculations..............................  The reference prices, reference yields, Benchmark Treasury Yield, New
                                            Coupon, Spread Differential (as defined below) and Accrued Interest
                                            Differential, if any, will be determined as described and illustrated
                                            in the section 'The Exchange Offer -- Calculations; Information' and
                                            in Table A and Schedules A, B, C, D, E, F and G attached hereto.

Information...............................  As soon as practicable after the Price Determination Date, but in any
                                            event before 9:00 a.m., New York City time, on the following business
                                            day, the Company will publicly announce by press release to the Dow
                                            Jones News Service: the Benchmark Treasury Yield, the Reference Yield
                                            of the Old Debentures, the Reference Price of the Old Debentures, the
                                            Reference Yield of the New Debentures, the Reference Price of the New
                                            Debentures, the New Coupon and the Accrued Interest Differential, if
                                            any.

                                            During the term of the Exchange Offer, holders of the Old Debentures
                                            can obtain current information regarding the Benchmark Treasury
                                            Yield, reference yields, reference prices and other information
                                            regarding the terms of the Exchange Offer from the Financial Advisor
                                            at (212) 469-7512. In addition, the Company intends to publish
                                            information about the Exchange Offer, including the information
                                            described in the preceding paragraph when available, on the MCM
                                            'CorporateWatch' Service on Telerate page 41928.

Old Debentures Outstanding................  As of the date hereof, $100,000,000 aggregate principal amount of Old
                                            Debentures are outstanding.

                                       7

 

Conditions to the Exchange Offer..........  Consummation of the Exchange Offer is conditioned upon certain
                                            customary conditions described herein. The Company may, in its sole
                                            discretion, waive any condition with respect to the Exchange Offer
                                            and accept for exchange any Old Debentures tendered. See 'The
                                            Exchange Offer -- Conditions to the Exchange Offer'.

Expiration Date; Extensions;
Termination; Amendments...................  The Exchange Offer will expire at 5:00 p.m., New York City time, on
                                            June 18, 1998 or at such later time and date to which the Exchange
                                            Offer may be extended by the Company in accordance with the
                                            procedures described herein. The Company reserves the right to extend
                                            or terminate the Exchange Offer. See 'The Exchange
                                            Offer -- Expiration Date; Extensions; Termination; Amendments'.

                                            If the Exchange Offer is extended for a period longer than three
                                            business days from the previously scheduled Expiration Date, then a
                                            new Price Determination Date, which would be two business days prior
                                            to the new Expiration Date, may be established. If the extension is
                                            for three business days or less, no new Price Determination Date will
                                            be established and the New Coupon will remain as determined on the
                                            Price Determination Date prior to the extension of the Exchange
                                            Offer.

                                            If the consideration offered with respect to the Exchange Offer is
                                            changed or if any other amendment to the terms of the Exchange Offer
                                            is made that, in the opinion of the Company, would be adverse to the
                                            interests of the holders tendering Old Debentures for exchange, the
                                            Exchange Offer will remain open for at least five business days from
                                            the date public notice of such change or amendment is given.

Certain U.S. Federal Income Tax
Consequences..............................  The exchange of Old Debentures pursuant to the Exchange Offer will
                                            constitute a recapitalization for U.S. Federal income tax purposes,
                                            and a holder of Old Debentures that tenders pursuant to the Exchange
                                            Offer generally will recognize no gain or loss upon the exchange of
                                            Old Debentures for New Debentures. See 'Certain U.S. Federal Income
                                            Tax Consequences'.

Tender of Old Debentures..................  Old Debentures may be tendered for exchange only in denominations of
                                            $1,000 or an integral multiple thereof. To tender Old Debentures
                                            pursuant to the Exchange Offer, holders must deliver their Old
                                            Debentures together with a properly completed and duly executed
                                            Letter of Transmittal to the Exchange Agent or the procedures for
                                            book-entry transfer must be used. If Old Debentures are held by a
                                            broker, dealer, commercial bank, trust company or other nominee
                                            (individually, a 'Custodian' and collectively, the 'Custodians'), the
                                            beneficial owner thereof must instruct such Custodian to tender such
                                            Old Debentures on their behalf. All tenders must

                                       8

 

                                            be made on or prior to the Expiration Date. See 'The Exchange
                                            Offer -- Procedures for Tendering Old Debentures'.

                                            New Debentures will be delivered only in book-entry form through DTC.
                                            Accordingly, holders who anticipate tendering and whose Old
                                            Debentures are not held through DTC are urged to contact promptly a
                                            Custodian that has the capability to hold securities through DTC, to
                                            arrange for receipt of any New Debentures to be delivered pursuant to
                                            the Exchange Offer and to obtain the information necessary to provide
                                            the required DTC participant and account information in the relevant
                                            Letter of Transmittal. See 'The Exchange Offer -- Proper Execution
                                            and Delivery of Letter of Transmittal'.

Guaranteed Delivery.......................  Holders of Old Debentures who wish to tender their Old Debentures and
                                            who cannot deliver their Old Debentures or the Letter of Transmittal
                                            to the Exchange Agent prior to the Expiration Date, or if the
                                            procedures for book-entry transfer cannot be completed on a timely
                                            basis, must tender their Old Debentures pursuant to the guaranteed
                                            delivery procedures set forth in 'The Exchange Offer -- Guaranteed
                                            Delivery Procedures'.

Acceptance of Old Debentures;
Delivery of New Debentures................  Upon the terms and subject to the conditions of the Exchange Offer,
                                            the Company will exchange (and thereby acquire) any and all Old
                                            Debentures that are properly tendered and not withdrawn prior to the
                                            Expiration Date. New Debentures will be delivered only in book-entry
                                            form through DTC. New Debentures will be delivered on the fifth
                                            business day following the Expiration Date. See 'The Exchange
                                            Offer -- Acceptance of Old Debentures Tendered for Exchange; Delivery
                                            of New Debentures'.

Withdrawal Rights.........................  Tenders of Old Debentures for exchange may be withdrawn at any time
                                            prior to the Expiration Date. Withdrawal of tendered Old Debentures
                                            will be deemed a rejection of the Exchange Offer. See 'The Exchange
                                            Offer -- Withdrawal Rights'.

Exchange Agent............................  The Chase Manhattan Bank

Information Agent.........................  Georgeson & Company Inc.
                                            Wall Street Plaza
                                            88 Pine Street, 30th Floor
                                            New York, New York 10005
                                            Banks and brokers call collect: (212) 440-9800
                                            All others call toll-free: (800) 223-2064

                                       9

 

                                            THE NEW DEBENTURES

Issuer....................................  AlliedSignal Inc.

Indenture.................................  The New Debentures will be issued under the Indenture dated as of
                                            October 1, 1985 between the Company and The Chase Manhattan Bank, as
                                            supplemented by the First Supplemental Indenture dated as of February
                                            1, 1991 and the Second Supplemental Indenture dated as of November 1,
                                            1997. For a discussion of certain changes to the Indenture as a
                                            result of the Second Supplemental Indenture, see 'Description of New
                                            Debentures -- Other Provisions'.

Principal Amount Offered..................  $100,000,000

Maturity Date.............................  June 1, 2033. The New Debentures are not subject to redemption prior
                                            to maturity.

Interest..................................  Interest will be paid each June 1 and December 1, commencing December
                                            1, 1998. Interest will be calculated on the basis of a 360-day year
                                            consisting of twelve 30-day months. The December 1, 1998 interest
                                            payment will include interest accruing on the New Debentures from
                                            June 1, 1998 to, but not including, December 1, 1998.
Interest Rate.............................  The New Coupon determined as provided herein.

Rating....................................  As of the date hereof, the Company's unsecured senior debt
                                            securities, including the Old Debentures, are rated A2 by Moody's
                                            Investors Service, Inc. ('Moody's') and A by Standard & Poor's
                                            Ratings Group, a division of The McGraw-Hill Companies ('S&P'). The
                                            Company does not intend to obtain ratings on the New Debentures;
                                            however, the Company believes that if the New Debentures were rated,
                                            they would receive ratings equivalent to those assigned from time to
                                            time to the Old Debentures. A credit rating is not a recommendation
                                            to buy, sell or hold securities and may be subject to revision or
                                            withdrawal at any time by the assigning rating agency.

Ranking...................................  The New Debentures will be unsecured and unsubordinated obligations
                                            of the Company and will rank pari passu with all other unsecured and
                                            unsubordinated indebtedness of the Company.

Listing...................................  Although the Old Debentures are listed on the NYSE, the Company does
                                            not intend to apply for listing of the New Debentures on the NYSE or
                                            any other exchange.

Form......................................  The New Debentures will be represented by one or more global
                                            debentures registered in the name of DTC's nominee (the 'Global
                                            Debentures'). Beneficial interests in the Global Debentures will be
                                            shown on, and transfers thereof will be effected only through,
                                            records maintained by DTC and its participants. Except as described
                                            herein, New Debentures in definitive form will not be issued. The New
                                            Debentures will trade in DTC's Same-Day Funds Settlement System until
                                            maturity, and secondary market trading activity for the New
                                            Debentures will therefore settle in immediately available funds. All
                                            payments of principal and interest will be made by the Company in
                                            immediately available funds. See 'Description of New
                                            Debentures -- Same-Day Settlement and Payment'.

Use of Proceeds...........................  The New Debentures will be issued only in exchange for the Old
                                            Debentures. The Company will not receive any cash proceeds from the
                                            issuance of the New Debentures.

                                       10

                                  RISK FACTORS
 
     In deciding whether to participate in the Exchange Offer, each holder
should consider carefully, in addition to the other information contained in the
Offering Circular, the factors listed below.
 
     A debt security with a smaller outstanding aggregate principal amount may
command a lower price than would an otherwise identical debt security with a
larger outstanding aggregate principal amount. Depending upon, among other
things, the aggregate principal amount of Old Debentures outstanding after the
Exchange Offer, the trading market for the Old Debentures may be more limited,
which may, therefore, adversely affect the liquidity and market price of the Old
Debentures. Similarly, depending upon, among other things, the aggregate
principal amount of the New Debentures outstanding after the Exchange Offer, the
trading market for the New Debentures may be limited, which may, therefore,
adversely affect the liquidity and market price of the New Debentures. In
addition to the respective aggregate principal amounts outstanding, the trading
market for the Old Debentures not tendered pursuant to the Exchange Offer and
the New Debentures will depend upon, among other things, the number of holders
of each and the degree to which securities firms maintain a market in the
securities. In addition, although the Old Debentures are listed on the NYSE, the
Company does not intend to apply for listing of the New Debentures on the NYSE
or any other exchange.
 
                                  THE COMPANY
 
     The Company is an advanced technology and manufacturing company serving
customers worldwide with aerospace and automotive products, chemicals, fibers,
plastics and advanced materials. The Company is organized into eleven strategic
business units. The Company's products are used by many major industries,
including textiles, construction, plastics, electronics, automotive, chemicals,
housing, telecommunications, utilities, packaging, agriculture, military and
commercial aviation and aerospace and in the space program.
 
     The principal executive offices of the Company are located at 101 Columbia
Road, Morris Township, New Jersey 07962. The telephone number is (973) 455-2000.
 
                                       11

                               THE EXCHANGE OFFER
 
PURPOSE OF THE EXCHANGE OFFER
 
     The purpose of the Exchange Offer is to take advantage of currently
available interest rates by exchanging a portion of the Company's long-term debt
portfolio upon terms which the Company believes are more beneficial to it. The
Company intends to accomplish this objective by extending the overall maturity
of a portion of its long-term debt portfolio.
 
TERMS OF THE EXCHANGE OFFER
 
     Upon the terms and subject to the conditions set forth in this Offering
Circular and the accompanying Letter of Transmittal, the Company is offering to
exchange $1,000 principal amount of the New Debentures for each $1,000 principal
amount of the Old Debentures properly tendered for Exchange.
 
     The New Debentures will bear interest at a rate that could be different
than the interest rate on the Old Debentures (the 'Old Coupon'), as described
herein. For the Old Debentures, a price (the 'Reference Price of the Old
Debentures') will be determined using a specified fixed spread pricing formula.
The Reference Price of the Old Debentures will be based on a yield (the
'Reference Yield of the Old Debentures') to the maturity date of the Old
Debentures equal to (i) the yield (the 'Benchmark Treasury Yield') on the 6 1/8%
U.S. Treasury Bond due November 15, 2027 (the 'Benchmark Treasury Security')
plus (ii) 72 basis points (the '2016 Fixed Spread'). For the New Debentures, a
per annum interest rate (expressed as a percentage with three decimal places
rounded to the nearest half basis point) (the 'New Coupon') will be determined
such that the price of the New Debentures (the 'Reference Price of the New
Debentures') will be at least $15.00 greater than the Reference Price of the Old
Debentures per $1,000 principal amount thereof. The Reference Price of the New
Debentures will be based on a yield (the 'Reference Yield of the New
Debentures') to the maturity date of the New Debentures equal to (i) the
Benchmark Treasury Yield plus (ii) 88 basis points (the '2033 Fixed Spread').
For each $1,000 principal amount of Old Debentures exchanged, the holder thereof
will receive $1,000 principal amount of New Debentures. The New Coupon and the
reference prices will be determined as of 2:00 p.m., New York City time, on June
16, 1998, unless the Exchange Offer is extended by more than three business
days, in which case they will be determined on the second business day prior to
the Expiration Date (the 'Price Determination Date').
 
     Interest on the New Debentures will accrue from the last interest payment
date on the Old Debentures (June 1, 1998) at the New Coupon. The first interest
payment date on the New Debentures will be December 1, 1998. Accordingly,
holders exchanging Old Debentures for New Debentures will not receive any
interest payment in respect of Old Debentures so exchanged. However, if the New
Coupon is lower than the Old Coupon, on the Exchange Date the Company will pay
an amount in cash in respect of accrued interest per $1,000 principal amount for
each Old Debenture exchanged (rounded to the nearest thousandth of a cent) (the
'Accrued Interest Differential') equal to the difference between the Old Coupon
and the New Coupon accrued on such principal amount for the period from June 1,
1998 to, but excluding, the Exchange Date. The 'Exchange Date' will be the fifth
business day following the Expiration Date (i.e., June 25, 1998, unless the
Expiration Date is extended).
 
SUMMARY OF TERMS
 
     The following is a summary of certain defined terms used in describing the
Exchange Offer:
 
     Accrued Interest Differential: as illustrated in Table A and in Schedules F
and G, means, if the New Coupon is lower than the Old Coupon, an amount in cash
in respect of accrued interest per $1,000 principal amount for each Old
Debenture exchanged (rounded to the nearest thousandth of a cent) equal to the
difference between the Old Coupon and the New Coupon accrued on such principal
amount for the period from the last interest payment date on the Old Debentures
(June 1, 1998) to, but
 
                                       12

excluding, the Exchange Date. 'Accrued Interest Differential' shall mean zero if
the New Coupon is equal to or higher than the Old Coupon.
 
     Adjusted Yield to Maturity of the New Debentures: as illustrated in
Schedule E, means the yield to maturity of the New Debentures based on the
Reference Price of the Old Debentures and the New Coupon.
 
     Benchmark Treasury Security: means the 6 1/8% U.S. Treasury Bond due
November 15, 2027.
 
     Benchmark Treasury Yield: means, on the Price Determination Date, the yield
on the Benchmark Treasury Security (expressed as a percentage with two decimal
points).
 
     2016 Fixed Spread: means 0.72% (72 basis points).
 
     2033 Fixed Spread: means 0.88% (88 basis points).
 
     Exchange Date: means the date five business days following the Expiration
Date and on which New Debentures will be delivered pursuant to the Exchange
Offer. If the Expiration Date is June 18, 1998, the Exchange Date will be June
25, 1998.
 
     Expiration Date: means 5:00 p.m., New York City time, on June 18, 1998,
unless the Exchange Offer is extended.
 
     New Coupon: means, for the New Debentures, the per annum interest rate
(expressed as a percentage with three decimal places rounded to the nearest half
basis point) paid on such New Debentures from their date of issuance to their
maturity date, June 1, 2033. The New Coupon will be set such that for the
Benchmark Treasury Yield on the Price Determination Date, the Reference Price of
the New Debentures will exceed the Reference Price of the Old Debentures by at
least $15.00 per $1,000 principal amount of the Old Debentures.
 
     Old Coupon: means 9 1/2% per annum.
 
     Price Determination Date: means 2:00 p.m., New York City time, on June 16,
1998, unless the Exchange Offer is extended by more than three business days, in
which case such term means the second business day prior to the Expiration Date.
 
     Reference Price of the Old Debentures: means the price per $1,000 principal
amount of the Old Debentures based on the Reference Yield of the Old Debentures,
determined in accordance with standard market practice as described in Schedule
A and illustrated in Schedule B.
 
     Reference Price of the New Debentures: means the price per $1,000 principal
amount of the New Debentures based on the Reference Yield of the New Debentures,
determined in accordance with standard market practice as described in Schedule
C and illustrated in Schedule D.
 
     Reference Yield of the Old Debentures: means, at the Price Determination
Date, the sum of the Benchmark Treasury Yield and the 2016 Fixed Spread.
 
     Reference Yield of the New Debentures: means, at the Price Determination
Date, the sum of the Benchmark Treasury Yield and the 2033 Fixed Spread.
 
     Spread Differential: as illustrated in Schedule E and Table A, means the
Adjusted Yield to Maturity of the New Debentures less the Reference Yield of the
Old Debentures (expressed in basis points with one decimal place).
 
ILLUSTRATIVE EXAMPLE AND FORMULAS
 
     A hypothetical illustration of the Spread Differential is set forth in
Schedule E attached hereto and is to be used solely for the purpose of obtaining
an understanding of the calculation of the Spread Differential based on a
hypothetical Benchmark Treasury Yield, Reference Price of the Old Debentures,
and New Coupon and should not be used or relied upon for any other purpose.
Table A sets forth the (i) Reference Yield of the Old Debentures, (ii) Reference
Price of the Old Debentures, (iii) Reference Yield of the New Debentures, (iv)
New Coupon, (v) Reference Price of the New Debentures, (vi) price differential
between the Reference Price of the New Debentures and the Reference Price of the
Old
 
                                       13

Debentures (the 'Price Differential'), (vii) Spread Differential and (viii)
Accrued Interest Differential, if any, for Benchmark Treasury Yields between
5.40% and 6.40% on the Price Determination Date. The information in Table A is
provided for illustrative purposes only. In the event of any discrepancy between
the information in Table A and results obtained by the Company through the
application of calculations described herein and outlined in Schedules A, C, and
F, such results will supersede the information in Table A.
 
CALCULATIONS; INFORMATION
 
     The Reference Price of the Old Debentures will be determined by
calculating, per $1,000 principal amount of such Old Debentures, the present
value (less accrued and unpaid interest), using the Reference Yield of the Old
Debentures, of (i) the principal amount payable on the maturity date of the Old
Debentures plus (ii) all remaining payments of interest on the Old Debentures.
The Reference Price of the Old Debentures will be rounded to the nearest cent
per $1,000 principal amount of Old Debentures. The methodology to be used in
calculating the Reference Price of the Old Debentures is set forth in Schedule A
attached hereto. An example of the application of such methodology is provided
for the Old Debentures in Schedule B attached hereto. The Reference Yield of the
Old Debentures will be determined by calculating the sum of (a) the Benchmark
Treasury Yield and (b) the 2016 Fixed Spread. The reference price calculation
will be made using the Benchmark Treasury Yield as of the Price Determination
Date.
 
     For the New Debentures, the New Coupon will be such that the Reference
Price of the New Debentures will be at least $15.00 greater than the Reference
Price of the Old Debentures per $1,000 principal amount of the Old Debentures.
The Reference Price of the New Debentures will be determined by calculating, per
$1,000 principal amount of New Debentures, the present value (less accrued and
unpaid interest), using the Reference Yield of the New Debentures, of (i) the
principal amount payable on the maturity date of the New Debentures plus (ii)
all remaining payments of interest on the New Debentures. The Reference Price of
the New Debentures will be rounded to the nearest cent per $1,000 principal
amount of New Debentures. The methodology to be used in calculating the
Reference Price of the New Debentures is set forth in Schedule C attached
hereto. An example of the application of such methodology is provided for the
New Debentures in Schedule D attached hereto. The Reference Yield of the New
Debentures will be determined by calculating the sum of (a) the Benchmark
Treasury Yield and (b) the 2033 Fixed Spread. The reference price calculation
will be made using the Benchmark Treasury Yield as of the Price Determination
Date.
 
     The Benchmark Treasury Yield will be calculated by the Financial Advisor in
accordance with standard market practice based on the bid side price for the
Benchmark Treasury Security as of the Price Determination Date, as such bid side
price is displayed on the Cantor Fitzgerald Quotation Service for U.S.
Government Securities (the 'Cantor Fitzgerald Quotation Service') on Telerate
page 500. If any relevant price is not available on a timely basis on the Cantor
Fitzgerald Quotation Service or is manifestly erroneous, the relevant price
information may be obtained from such other quotation service as the Company and
the Financial Advisor shall select in their reasonable discretion, the identity
of which shall be disclosed by the Company and the Financial Advisor to
exchanging holders. Although the Benchmark Treasury Yield will be determined
based solely on the sources described above, information regarding the price of
the Benchmark Treasury Security also may be found in The Wall Street Journal.
 
     After the Price Determination Date, the New Coupon that will be received by
a holder pursuant to the Exchange Offer will be known and holders will be able
to ascertain the Reference Price of the Old Debentures and the Reference Price
of the New Debentures in the manner described above, unless the Exchange Offer
is extended for a period longer than three business days. In the event the
Exchange Offer is extended for a period longer than three business days from the
previously scheduled Expiration Date, then a new Price Determination Date, which
would be two business days prior to the new Expiration Date, will be
established. If the extension is for three business days or less, no new
 
                                       14

Price Determination Date will be established and the New Coupon will remain as
determined on the Price Determination Date prior to the extension of the
Exchange Offer.
 
     As soon as practicable after the Price Determination Date, but in any event
before 9:00 a.m., New York City time, on the following business day, the Company
will publicly announce by press release to the Dow Jones News Service: the
Benchmark Treasury Yield, the Reference Yield of the Old Debentures, the
Reference Price of the Old Debentures, the Reference Yield of the New
Debentures, the Reference Price of the New Debentures, the New Coupon and the
Accrued Interest Differential, if any.
 
     During the term of the Exchange Offer, holders of the Old Debentures can
obtain current information regarding the Benchmark Treasury Yield, reference
yields, reference prices and other information regarding the terms of the
Exchange Offer from the Financial Advisor at (212) 469-7512. In addition, the
Company intends to publish information about the Exchange Offer, including the
information described in the preceding paragraph when available, on the MCM
'CorporateWatch' Service on Telerate page 41928.
 
     In the event any dispute arises with respect to the Benchmark Treasury
Yield, the reference yields, the reference prices, the New Coupon or any
quotation or calculation with respect to the Exchange Offer, the Company's
determination shall be conclusive and binding absent manifest error.
 
EXPIRATION DATE; EXTENSIONS; TERMINATION; AMENDMENTS
 
     The Exchange Offer will expire at 5:00 p.m., New York City time, on June
18, 1998, unless extended by the Company as provided herein. In the event that
the Exchange Offer is extended, the term 'Expiration Date' with respect to such
extended Exchange Offer shall mean the time and date on which the Exchange
Offer, as so extended, shall expire.
 
     The Company expressly reserves the right, in its sole discretion, subject
to applicable law, to (i) extend or terminate the Exchange Offer and not accept
for exchange any tendered Old Debentures if (a) any of the conditions specified
in ' -- Conditions to the Exchange Offer' are not satisfied or waived or (b)
otherwise, (ii) waive any condition to the Exchange Offer and accept all Old
Debentures tendered pursuant to the Exchange Offer, (iii) extend the Exchange
Offer and retain all the Old Debentures tendered pursuant to the Exchange Offer
until the expiration of the Exchange Offer, subject, however, to the withdrawal
rights of holders as provided in, ' -- Withdrawal Rights', (iv) amend the terms
of the Exchange Offer and (v) modify the form of the consideration to be
provided pursuant to the Exchange Offer.
 
     Any extension, termination or amendment will be followed as promptly as
practicable by a public announcement and notification to the Exchange Agent. In
the case of any extension, a public announcement will be issued prior to 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date. Without limiting the manner in which the Company may
choose to make any public announcement, the Company shall have no obligation to
publish, advertise or otherwise communicate any such public announcement other
than by release to the Dow Jones News Service or otherwise as required by law.
In the event of any extension of the Exchange Offer, all Old Debentures tendered
pursuant to the Exchange Offer and not subsequently withdrawn, will remain
subject to, and holders will continue to have withdrawal rights until the
expiration of, the Exchange Offer.
 
EFFECT OF TENDER
 
     A tendering holder of Old Debentures that are exchanged in the Exchange
Offer will not be obligated to pay transfer taxes or any fees or commissions
with respect to the acquisition of their Old Debentures by the Company pursuant
to the Exchange Offer. See Instruction 7 of the accompanying Letter of
Transmittal. However, if the beneficial owner tenders through a Custodian, such
beneficial owner may be required to pay fees or commissions to such institution.
 
                                       15

ACCEPTANCE OF OLD DEBENTURES TENDERED FOR EXCHANGE; DELIVERY OF NEW DEBENTURES
 
     Upon the terms and subject to the conditions of the Exchange Offer, the
Company will exchange Old Debentures by accepting such Old Debentures for
exchange and in consideration therefor will issue a like principal amount of New
Debentures. New Debentures will be delivered on the Exchange Date. The Exchange
Agent will act as agent for the tendering holders for the purpose of receiving
Old Debentures and delivering New Debentures to such holders. In all cases, Old
Debentures will be accepted for exchange pursuant to the Exchange Offer only
after timely receipt by the Exchange Agent of certificates representing Old
Debentures (or confirmation of a book-entry transfer), a properly completed and
duly executed Letter of Transmittal (or a manually signed facsimile thereof or
satisfaction of DTC's ATOP procedures) and any other documents required thereby.
 
     New Debentures will be delivered only in book-entry form through DTC and
only to the DTC account of the tendering holder or the tendering holder's
Custodian. Accordingly, a holder who tenders Old Debentures must specify on the
Letter of Transmittal the DTC participant to which New Debentures should be
delivered and all necessary account information to effect such delivery. Failure
to provide such information will render such holder's tender defective and the
Company will have the right, which it may waive, to reject such tender. The
Company and the Exchange Agent shall not incur any liability for delivering New
Debentures in accordance with any instructions provided by a tendering holder.
 
     The Company will be deemed to have accepted for exchange (and thereby to
have acquired) tendered Old Debentures as, if and when the Company gives oral
(promptly confirmed in writing) or written notice to the Exchange Agent of the
Company's acceptance of such Old Debentures for exchange. Old Debentures
accepted for exchange by the Company will be canceled.
 
     If Old Debentures in a principal amount in excess of the principal amount
indicated as being tendered on the Letter of Transmittal are submitted, an Old
Debenture in principal amount equal to the excess principal amount over the
amount indicated as tendered in the Letter of Transmittal will be issued to the
tendering holder, at the Company's expense, in the same form in which such
security was tendered, as promptly as practicable following the expiration or
termination of the Exchange Offer. If any tendered Old Debentures are not
accepted for exchange because of an invalid tender, the occurrence of certain
other events set forth herein or otherwise, such Old Debentures will be
returned, at the Company's expense, to the tendering holder thereof, as promptly
as practicable following the expiration or termination of the Exchange Offer.
 
PROCEDURES FOR TENDERING OLD DEBENTURES
 
     Minimum Denominations. A holder may tender less than all Old Debentures
held by such holder. However, Old Debentures may be tendered only in
denominations of $1,000 or an integral multiple thereof.
 
     Tender of Old Debentures Held in Physical Form. To tender Old Debentures
held in physical form, a holder must (i) complete (including the required
information regarding delivery of New Debentures through DTC) and sign the
Letter of Transmittal in accordance with the instructions set forth therein and
(ii) deliver the properly completed and executed Letter of Transmittal, together
with any other documents required by the Letter of Transmittal and the Old
Debentures in physical form, to the Exchange Agent at the address set forth
under 'Available Information' prior to the Expiration Date.
 
     Tender of Old Debentures Held Through a Custodian. To tender Old Debentures
held by a Custodian, the beneficial owner of the Old Debentures must contact the
Custodian and direct the Custodian to tender such Old Debentures in accordance
with the procedures set forth herein and in the Letter of Transmittal.
 
     The Exchange Agent and DTC have confirmed that the Exchange Offer is
eligible for ATOP. Accordingly, DTC participants may electronically transmit
their acceptance of the Exchange Offer by causing DTC to transfer Old Debentures
to the Exchange Agent in accordance with DTC's ATOP procedures for such a
transfer. DTC will then send an Agent's Message to the Exchange Agent.
 
                                       16

     The term 'Agent's Message' means a message transmitted by DTC, received by
the Exchange Agent and forming part of a Book-Entry Confirmation (as defined
herein), which states that DTC has received an express acknowledgment from the
DTC participant tendering Old Debentures which are the subject of such
Book-Entry Confirmation, that such DTC participant has received and agrees to be
bound by the terms of the Letter of Transmittal and that the Company may enforce
such agreement against such DTC participant. In the case of an Agent's Message
relating to a guaranteed delivery, the term means a message transmitted by DTC
and received by the Exchange Agent, which states that DTC has received an
express acknowledgment from the DTC participant tendering Old Debentures that
such DTC participant has received and agrees to be bound by the Notice of
Guaranteed Delivery (as described below). Holders desiring to tender Old
Debentures on the Expiration Date should note that such holders must allow
sufficient time for completion of the ATOP procedures during the normal business
hours of DTC on that date.
 
     If the Custodian holds Old Debentures in physical form, the Custodian must
follow the procedure set forth above under ' -- Procedures for Tendering Old
Debentures -- Tender of Old Debentures Held in Physical Form'.
 
     If the Custodian holds Old Debentures in book-entry form through DTC (the
'Book-Entry Transfer Facility'), to tender such Old Debentures the Custodian
must (i) effect a book-entry transfer (a 'Book-Entry Confirmation') of all Old
Debentures to be tendered to the Exchange Agent's account at such Book-Entry
Transfer Facility prior to the Expiration Date or (ii) complete (including the
required information regarding delivery of New Debentures through DTC) and sign
the Letter of Transmittal in accordance with the instructions set forth therein
and deliver the properly completed and executed Letter of Transmittal, together
with any other documents required by the Letter of Transmittal, to the Exchange
Agent at the address set forth under 'Available Information' prior to the
Expiration Date.
 
     Book-Entry Delivery Procedures. The Exchange Agent will establish promptly
an account with respect to the Old Debentures at the Book-Entry Transfer
Facility for purposes of the Exchange Offer. Any financial institution that is a
participant in the Book-Entry Transfer Facility may make a book-entry delivery
of Old Debentures by causing the Book-Entry Transfer Facility to transfer Old
Debentures to the Exchange Agent's account. DELIVERY OF A LETTER OF TRANSMITTAL
TO A BOOK-ENTRY TRANSFER FACILITY WILL NOT CONSTITUTE VALID DELIVERY TO THE
EXCHANGE AGENT.
 
     Any holder whose Old Debentures have been mutilated, lost, stolen or
destroyed will be responsible for obtaining replacement securities or for
arranging for indemnification with The Chase Manhattan Bank, as Trustee for the
Old Debentures. Holders may contact the Information Agent for assistance with
such matters.
 
     IN ORDER FOR A TENDERING HOLDER TO BE ASSURED OF PARTICIPATING IN THE
EXCHANGE OFFER, SUCH HOLDER MUST TENDER OLD DEBENTURES IN ACCORDANCE WITH THE
PROCEDURES SET FORTH HEREIN AND IN THE LETTER OF TRANSMITTAL PRIOR TO THE
EXPIRATION DATE. THE METHOD OF DELIVERY OF OLD DEBENTURES AND ALL OTHER REQUIRED
DOCUMENTS IS AT THE OPTION AND RISK OF THE HOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED
AND ENOUGH TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
 
     Letters of Transmittal and Old Debentures must be sent only to the Exchange
Agent. Do not send Letters of Transmittal or Old Debentures to the Company, the
Trustee, the Information Agent or the Financial Advisor.
 
GUARANTEED DELIVERY PROCEDURES
 
     If a holder of Old Debentures wishes to tender such Old Debentures and time
will not permit such holder's Old Debentures or other required documents to
reach the Exchange Agent prior to the Expiration Date, or the procedure for
book-entry transfer cannot be completed on a timely basis, a tender may be
effected if (i) the tender is made through an Eligible Institution (as such term
is defined
 
                                       17

in the Letter of Transmittal), (ii) on or prior to 5:00 p.m., New York City
time, on the Expiration Date, the Exchange Agent receives from such Eligible
Institution a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Company (by facsimile
transmission, mail, hand delivery or by Agent's Message), setting forth the name
and address of the holder of Old Debentures and the amount of Old Debentures
tendered, stating that the tender is being made thereby and guaranteeing that
within three NYSE trading days after the date of execution of the Notice of
Guaranteed Delivery, the certificates for all physically tendered Old
Debentures, in proper form for transfer, or a Book-Entry Confirmation, as the
case may be, together with a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof or Agent's Message in lieu
thereof) with any required signature guarantees and any other documents required
by the Letter of Transmittal will be deposited by the Eligible Institution with
the Exchange Agent, and (iii) the certificates for all physically tendered Old
Debentures, in proper form for transfer, or a Book-Entry Confirmation, as the
case may be, together with a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof) with any required signature
guarantees, and any other documents required by the Letter of Transmittal are
deposited by the Eligible Institution within three NYSE trading days after the
date of execution of the Notice of Guaranteed Delivery.
 
PROPER EXECUTION AND DELIVERY OF LETTER OF TRANSMITTAL
 
     In general, all signatures on a Letter of Transmittal or a notice of
withdrawal must be guaranteed by an Eligible Institution; however, such
signatures need not be guaranteed if (a) the Letter of Transmittal is signed by
the holder of the Old Debentures tendered thereby or by a participant in a
Book-Entry Transfer Facility whose name appears on a security position listing
as the holder of the Old Debentures tendered thereby and such holder has not
completed the portion entitled 'Special Delivery Instructions' on the Letter of
Transmittal, or (b) such Old Debentures tendered are for the account of an
Eligible Institution.
 
     If the Letter of Transmittal is signed by the holder of the Old Debentures
tendered thereby or a participant in a Book-Entry Transfer Facility whose name
appears on a security position listing with respect to the Old Debentures
tendered thereby, the signature must correspond with the name as written on the
face of the Old Debentures or on the security position listing, respectively,
without any change whatsoever. If any of the Old Debentures tendered thereby are
held by two or more holders, all such holders must sign the Letter of
Transmittal. If any of the Old Debentures tendered thereby are registered in
different names on different Old Debentures, it will be necessary to complete,
sign and submit as many separate Letters of Transmittal as there are different
registrations.
 
     If the Letter of Transmittal is signed by a person other than the holder of
the Old Debentures tendered thereby or a participant in a Book-Entry Transfer
Facility whose name appears on a security position listing with respect to the
Old Debentures tendered thereby, the Old Debentures must be endorsed or
accompanied by appropriate instruments of transfer, in either case, signed
exactly as the name of the holder appears on the face of the Old Debentures or
on the security position listing with respect thereto. If the Letter of
Transmittal or any Old Debentures, proxy or instrument of transfer is signed by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person must so indicate when signing, and proper evidence satisfactory to
the Exchange Agent of the authority of such person so to act must be submitted.
 
     New Debentures will be delivered only in book-entry form through DTC and
only to the DTC account of the holder or the holder's Custodian. If Old
Debentures not tendered or not exchanged are to be delivered to a person other
than the holder of the Old Debentures tendered, or to an address other than that
of the holder of the Old Debentures tendered, such holder should indicate in the
portion of the Letter of Transmittal entitled 'Special Delivery Instructions'
the person and/or address to which such Old Debentures are to be delivered. If
Old Debentures not tendered or not exchanged are to be issued to a person other
than the holder of the Old Debentures tendered: (i) the employer identification
or social security number of the person to whom issuance is to be made must be
indicated on the
 
                                       18

Letter of Transmittal; and (ii) the Old Debentures must be endorsed or
accompanied by appropriate instruments of transfer, signed exactly as the name
of the holder appears on the face of the Old Debentures or the security position
listing with respect thereto, with the signature on the certificates or
instruments of transfer guaranteed by an Eligible Institution. If no such
instructions are given, any Old Debentures not tendered or exchanged will be
delivered to the holder of the Old Debentures tendered.
 
     Because New Debentures will be delivered only in book-entry form through
DTC, a holder who tenders Old Debentures must specify on the Letter of
Transmittal the DTC participant to which New Debentures should be delivered and
all necessary account information to effect such delivery. Such DTC participant
must be either the holder or a Custodian for the holder. Failure to provide such
information will render such holder's tender defective and the Company will have
the right, which it may waive, to reject such tender. Holders who anticipate
tendering other than through DTC are urged to contact promptly a Custodian that
has the capability to hold securities through DTC to arrange for receipt of any
New Debentures to be delivered pursuant to the Exchange Offer and to obtain the
information necessary to complete the account information table in the Letter of
Transmittal.
 
     No alternative, conditional, irregular or contingent tenders will be
accepted. By executing the Letter of Transmittal, the holder of Old Debentures
waives any right to receive any notice of the acceptance for exchange of such
holder's Old Debentures, except as otherwise provided herein.
 
     All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of tendered Old Debentures will be determined by the
Company, whose determination shall be conclusive and binding. The Company
reserves the absolute right to reject any or all tenders that are not in proper
form or the acceptance of which may be, in the opinion of counsel for the
Company, unlawful. The Company also reserves the absolute right to waive any
condition of the Exchange Offer as set forth under ' -- Conditions to the
Exchange Offer' and any irregularities or conditions of tender as to particular
Old Debentures. The Company's interpretation of the terms and conditions of the
Exchange Offer (including the instructions in the Letters of Transmittal) shall
be conclusive and binding.
 
     Unless waived, any irregularities in connection with tenders must be cured
within such time as the Company may determine. The Company, the Exchange Agent
and the Information Agent shall not be under any duty to give notification of
defects in such tenders and shall not incur liability for any failure to give
such notification. Tenders of Old Debentures will not be deemed to have been
made until such irregularities have been cured or waived. Any Old Debentures
received by the Exchange Agent that are not properly tendered and as to which
the irregularities have not been cured or waived will be returned by the
Exchange Agent to the holder, unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration Date.
 
CONDITIONS TO THE EXCHANGE OFFER
 
     Notwithstanding any other provisions of the Exchange Offer or any extension
of the Exchange Offer, the Company will not be required to issue New Debentures
and may terminate the Exchange Offer by oral (promptly confirmed in writing) or
written notice to the Exchange Agent, or, at its option, modify or otherwise
amend the Exchange Offer with respect to such Old Debentures, if any of the
following conditions has not been satisfied, on or prior to the Expiration Date:
 
          (a) there shall not have been any action taken or threatened, or any
     statute, rule, regulation, judgment, order, stay, decree or injunction
     promulgated, enacted, entered, enforced by or before any court or
     governmental regulatory or administrative agency or authority or tribunal,
     domestic or foreign, which (i) challenges the making of the Exchange Offer
     or the exchange of Old Debentures for New Debentures pursuant to the
     Exchange Offer (the 'Exchange'), or might, directly or indirectly,
     prohibit, prevent, restrict or delay consummation of the Exchange Offer or
     the Exchange, or might otherwise adversely affect in any material manner
     the Exchange Offer or the Exchange or (ii) in the sole judgment of the
     Company, could materially adversely affect the business, condition
     (financial or otherwise), income, operations, properties, assets,
     liabilities or prospects of the Company and its subsidiaries, taken as a
     whole, or materially impair the contemplated benefits of
 
                                       19

     the Exchange Offer or the Exchange to the Company or might be material to
     holders of Old Debentures in deciding whether to accept the Exchange Offer;
 
          (b) there shall not have occurred or be likely to occur any event (i)
     affecting the business condition (financial or otherwise), income,
     operations, properties, assets, liabilities or prospects of the Company
     that, in the sole judgment of the Company, would or might prohibit,
     prevent, restrict or delay consummation of the Exchange Offer or the
     Exchange or (ii) that in the sole judgment of the Company will, or is
     reasonably likely to, materially impact the contemplated benefits,
     including economic benefits or accounting treatment, of the Exchange Offer
     or the Exchange to the Company or (iii) that might be material to holders
     of Old Debentures in deciding whether to accept the Exchange Offer;
 
          (c) there shall not have occurred (i) any general suspension of or
     limitation on trading in securities on the NYSE or in the over-the-counter
     market (whether or not mandatory), (ii) any material adverse change in the
     price of the Old Debentures, (iii) a material impairment in the general
     trading market for debt securities, (iv) a declaration of a banking
     moratorium or any suspension of payments in respect of banks by federal or
     state authorities in the United States (whether or not mandatory), (v) a
     commencement or escalation of a war, armed hostilities or other national or
     international crisis directly or indirectly relating to the United States,
     (vi) any limitation (whether or not mandatory) by any governmental
     authority on, or other event having a reasonable likelihood of affecting,
     the extension of credit by banks or other lending institutions in the
     United States, or (vii) any material adverse change in United States
     securities or financial markets generally, or in the case of any of the
     foregoing existing at the time of the commencement of the Exchange Offer, a
     material acceleration or worsening thereof;
 
          (d) the Trustee shall not have objected in any respect to, or taken
     any action that could in the sole judgment of the Company adversely affect
     the consummation of, the Exchange Offer or the Exchange nor shall the
     Trustee have taken any action that challenges the validity or effectiveness
     of the procedures used by the Company in making the Exchange Offer or the
     Exchange;
 
          (e) there shall not have occurred, been proposed or been announced any
     tender or exchange offer with respect to any class of the Company's equity
     securities, or any merger, acquisition, business combination or other
     similar transaction with or involving the Company or any subsidiary
     thereof;
 
          (f) there shall not have occurred any change in the business,
     condition (financial or other), income, operations or prospects of the
     Company and its subsidiaries taken as a whole (including, without
     limitation, any downgrade in the credit ratings of any securities of the
     Company or any of its subsidiaries by Moody's or S&P or any announcement by
     Moody's or S&P that it has placed any such rating under surveillance or
     review with possible negative implications), which, in the sole judgment of
     the Company, is or may be materially adverse to the Company; and
 
          (g) (i) no person, entity or 'group' (as that term is used in Section
     13(d)(3) of the Exchange Act) shall have acquired, or proposed to acquire,
     beneficial ownership of more than 5% of the Company's outstanding common
     stock, (ii) no group shall have been formed which beneficially owns more
     than 5% of the Company's outstanding common stock and (iii) no person,
     entity or group shall have filed a Notification and Report Form under the
     Hart-Scott-Rodino Antitrust Improvement Act of 1976, or made a public
     announcement reflecting an intent to acquire the Company or any of its
     subsidiaries or any of their respective assets or securities.
 
     If any of the foregoing conditions is not satisfied, the Company may (i)
terminate the Exchange Offer and return such Old Debentures to the holders who
tendered them, (ii) extend the Exchange Offer and retain all tendered Old
Debentures until the expiration of the Exchange Offer, as extended, subject,
however, to the withdrawal rights of holders, see ' -- Withdrawal Rights' and
' -- Expiration Date; Extensions; Termination; Amendments', or (iii) waive any
of the conditions with respect to the Exchange Offer and accept all Old
Debentures tendered therein.
 
                                       20

     The foregoing conditions are for the sole benefit of the Company and may be
waived by the Company, in whole or in part, in its sole discretion. Any
determination made by the Company concerning an event, development or
circumstance described or referred to above shall be conclusive and binding.
 
     In addition, the Company reserves the right, in its sole discretion, to
purchase or make offers for any Old Debentures that remain outstanding
subsequent to the completion or termination of the Exchange Offer. The terms of
any such purchase or offer could differ from the terms of the Exchange Offer.
 
WITHDRAWAL RIGHTS
 
     Tendered Old Debentures may be withdrawn by the holder prior to the
Expiration Date.
 
     A holder of Old Debentures who tendered Old Debentures in physical form may
withdraw the Old Debentures tendered by providing a written notice of withdrawal
(or manually signed facsimile thereof) to the Exchange Agent, at its address set
forth under 'Available Information', prior to the Expiration Date, which notice
must contain: (i) the name of the person who tendered the Old Debentures; (ii) a
description of the Old Debentures to be withdrawn; (iii) the certificate number
or numbers shown on the particular certificate or certificates evidencing such
Old Debentures; (iv) the aggregate principal amount represented by such Old
Debentures; (v) the signature of the holder of such Old Debentures executed in
the same manner as the original signature on the Letter of Transmittal
(including a signature guarantee, if such original signature was guaranteed);
and (vi) if such Old Debentures are owned by a new beneficial owner, evidence
satisfactory to the Company that the person withdrawing the tender has succeeded
to the beneficial ownership of the Old Debentures.
 
     If a beneficial owner of Old Debentures tendered through a Custodian wishes
to withdraw the Old Debentures tendered, such beneficial owner must contact the
Custodian and direct the Custodian to withdraw such Old Debentures in accordance
with the following procedures. In order to withdraw such Old Debentures the
Custodian must provide a written notice of withdrawal (or manually signed
facsimile thereof) to the Exchange Agent, at its address set forth under
'Available Information', prior to the Expiration Date, which notice must
contain: (i) the name of the person who tendered the Old Debentures; (ii) a
description of the Old Debentures to be withdrawn; (iii) the certificate number
or numbers shown on the particular certificate or certificates evidencing such
Old Debentures (if Old Debentures were tendered in physical form); (iv) the
aggregate principal amount represented by such Old Debentures; and (v) if such
Old Debentures are owned by a new beneficial owner, evidence satisfactory to the
Company that the person withdrawing the tender has succeeded to the beneficial
ownership of the Old Debentures. If the Old Debentures were tendered by
book-entry transfer, the Custodian also must debit the Exchange Agent's account
at the Book-Entry Transfer Facility through which the tender was made of all Old
Debentures to be withdrawn.
 
     A PURPORTED NOTICE OF WITHDRAWAL WHICH LACKS ANY OF THE REQUIRED
INFORMATION WILL NOT BE AN EFFECTIVE WITHDRAWAL OF A TENDER PREVIOUSLY MADE.
TENDERS MAY NOT BE WITHDRAWN AFTER THE EXPIRATION DATE.
 
     Holders who have tendered in the Exchange Offer will continue to have
withdrawal rights following any extension of the Expiration Date. Any permitted
withdrawals of tenders of Old Debentures may not be rescinded, and any Old
Debentures so withdrawn will thereafter be deemed not validly tendered for
purposes of the Exchange Offer and the holder thereof will be deemed to have
rejected the Exchange Offer. However, withdrawn Old Debentures may be
re-tendered prior to the Expiration Date by following the procedures for
tendering described above.
 
     All questions as to the validity (including time of receipt) of notices of
withdrawal will be determined by the Company, whose determination will be
conclusive and binding. None of the Company, the Exchange Agent or any other
person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give any such notification.
 
                                       21

TRANSFER TAXES
 
     The Company will pay all transfer taxes, if any, applicable to the transfer
and acquisition of Old Debentures pursuant to the Exchange Offer. If, however,
substitute Old Debentures for amounts not tendered or not exchanged are to be
delivered to, or are to be registered in the name of, any person other than the
holder of Old Debentures tendered, or if tendered Old Debentures are registered
in the name of any person other than the person signing the Letter of
Transmittal, or if a transfer tax is imposed for any reason other than the
transfer to or acquisition by the Company of Old Debentures pursuant to the
Exchange Offer, the amount of any such transfer taxes (whether imposed on the
holder or any other persons) shall be payable by the holder. If satisfactory
evidence of payment of such taxes or exemption therefrom is not submitted with
the appropriate Letter of Transmittal, the amount of such transfer taxes will be
billed directly to such holder and/or withheld from any payments due with
respect to the Old Debentures tendered by such holder.
 
FINANCIAL ADVISOR
 
     The Company has engaged Deutsche Morgan Grenfell Inc. to act as Financial
Advisor in connection with the Exchange Offer. Any holder who has questions
concerning the terms of the Exchange Offer or who would like current information
regarding the Benchmark Treasury Yields, the reference yields, the reference
prices or the New Coupon may contact the Financial Advisor at (212) 469-7512 or
at the address set forth under 'Available Information'.
 
     The Company has agreed to pay the Financial Advisor a financial advisory
fee for its services and to reimburse the Financial Advisor for its reasonable
out-of-pocket expenses, including reasonable fees and expenses of legal counsel,
and the Company has agreed to indemnify the Financial Advisor against certain
liabilities, including certain liabilities under the federal securities laws, in
connection with the Exchange Offer. In the past, the Financial Advisor has
provided other investment banking and financial advisory services to the
Company.
 
EXCHANGE AGENT
 
     The Chase Manhattan Bank has been appointed Exchange Agent for the Exchange
Offer. The Company will pay the Exchange Agent reasonable and customary fees for
its services and will reimburse it for its reasonable out-of-pocket expenses in
connection therewith. Letters of Transmittal and all correspondence in
connection with the Exchange Offer must be sent or delivered to the Exchange
Agent at the address set forth under 'Available Information'.
 
INFORMATION AGENT
 
     Georgeson & Company Inc. has been appointed Information Agent for the
Exchange Offer. The Company will pay the Information Agent reasonable and
customary fees for its services and will reimburse it for its reasonable
out-of-pocket expenses in connection therewith.
 
     Any questions concerning the tender procedures or requests for assistance
or additional copies of this Offering Circular or the Letters of Transmittal may
be directed to the Information Agent at the address and telephone number set
forth under 'Available Information'. Holders of Old Debentures may also contact
the Financial Advisor or their broker, dealer, commercial bank, trust company or
other nominee for assistance concerning the Exchange Offer.
 
                                       22

                         DESCRIPTION OF NEW DEBENTURES
 
     The following summary of certain provisions of the New Debentures and the
Indenture does not purport to be complete and is subject, and is qualified in
its entirety by reference, to all the provisions of the New Debentures and the
Indenture, including the definitions therein of certain terms.
 
GENERAL
 
     The New Debentures will be issued under the Indenture dated as of October
1, 1985 between the Company and The Chase Manhattan Bank, as trustee, as
supplemented by the First Supplemental Indenture dated as of February 1, 1991
and the Second Supplemental Indenture (the 'Second Supplemental Indenture')
dated as of November 1, 1997 (as so supplemented, the 'Indenture'). The Old
Debentures were issued under the same Indenture as the New Debentures will be
issued under, except that the Supplemental Indentures did not apply to the Old
Debentures. See ' -- Other Provisions'. The following statements with respect to
the New Debentures are subject to the detailed provisions of the Indenture.
Whenever any particular provision of the Indenture or any term used therein is
referred to, such provision or term is incorporated by reference as a part of
the statement in connection with which such reference is made, and the statement
in connection with which such reference is made is qualified in its entirety by
such reference.
 
     The New Debentures will be unsecured and unsubordinated obligations of the
Company and will mature on June 1, 2033. The New Debentures are not subject to
redemption prior to maturity.
 
     The New Debentures will bear interest from June 1, 1998 at the New Coupon,
payable on June 1 and December 1 of each year, commencing December 1, 1998, to
the person in whose name the New Debenture was registered at the close of
business on the preceding May 15 and November 15, respectively, subject to
certain exceptions.
 
     The Company does not intend to apply for listing of the New Debentures on
the NYSE or any other exchange.
 
BOOK-ENTRY, DELIVERY AND FORM
 
     The New Debentures will be issued in the form of one fully registered
Global Debenture. The Global Debenture will be deposited with, or on behalf of
DTC and registered in the name of Cede & Co., DTC's nominee.
 
     Beneficial interests in the Global Debenture will be represented through
book-entry accounts of financial institutions acting on behalf of beneficial
owners as direct and indirect participants in DTC. Except as set forth below,
the Global Debenture may be transferred, in whole and not in part, only to
another nominee of DTC or to a successor of DTC or its nominee.
 
     DTC has advised as follows: It is a limited-purpose trust company which was
created to hold securities for its participating organizations ('DTC
participants') and to facilitate the clearance and settlement of securities
transactions in such securities between DTC participants through electronic
book-entry changes in accounts of DTC participants. DTC participants include
securities brokers and dealers, banks and trust companies, clearing corporations
and certain other organizations. Access to DTC's system is also available to
others such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a DTC participant, either directly or
indirectly ('indirect participants'). Persons who are not DTC participants may
beneficially own securities held by DTC only through DTC participants or
indirect participants.
 
     DTC advises that pursuant to procedures established by it (i) upon issuance
of the New Debentures by the Company, DTC will credit the accounts of DTC
participants whose Old Debentures were exchanged pursuant to the Exchange Offer
with the principal amount of the New Debentures so exchanged, and (ii) ownership
of beneficial interests in the Global Debenture will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
DTC, the DTC participants and the indirect participants. The laws of some states
require that certain persons take
 
                                       23

physical delivery in definitive form of securities which they own. Consequently,
the ability to transfer beneficial interests in the Global Debenture is limited
to such extent.
 
     So long as a nominee of DTC is the registered owner of the Global
Debenture, such nominee for all purposes will be considered the sole owner or
holder of the New Debentures under the Indenture. Except as provided below,
owners of beneficial interests in the Global Debenture will not be entitled to
have New Debentures registered in their names, will not receive or be entitled
to receive physical delivery of New Debentures in definitive form, and will not
be considered the owners or holders thereof under the Indenture.
 
     Neither the Company, the Trustee, any Paying Agent nor the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Global Debenture, or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
 
     Principal and interest payments on the New Debentures registered in the
name of DTC's nominee will be made by the Trustee to DTC. Under the terms of the
Indenture, the Company and the Trustee will treat the persons in whose names the
New Debentures are registered as the owners of such New Debentures for the
purpose of receiving payment of principal and interest on such New Debentures
and for all other purposes whatsoever. Therefore, neither the Company, the
Trustee nor any Paying Agent has any direct responsibility or liability for the
payment of principal or interest on the New Debentures to owners of beneficial
interests in the Global Debenture. DTC has advised the Company and the Trustee
that its present practice is, upon receipt of any payment of principal or
interest, to immediately credit the accounts of the DTC participants with such
payment in amounts proportionate to their respective holdings in principal
amount of beneficial interests in the Global Debenture as shown on the records
of DTC. Payments by DTC participants and indirect participants to owners of
beneficial interests in the Global Debenture will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in 'street name', and
will be the responsibility of the DTC participants or indirect participants.
 
     If DTC is at any time unwilling or unable to continue as depository and a
successor depository is not appointed by the Company within 90 days, the Company
will issue New Debentures in definitive form in exchange for the Global
Debenture. In addition, the Company may at any time determine not to have the
New Debentures represented by a Global Debenture and, in such event, will issue
New Debentures in definitive form in exchange for the Global Debenture. In
either instance, an owner of a beneficial interest in the Global Debenture will
be entitled to have New Debentures equal in principal amount to such beneficial
interest registered in its name and will be entitled to physical delivery of
such New Debentures endorsed thereon in definitive form. New Debentures so
issued in definitive form will be issued in denominations of $1,000 and integral
multiples thereof and will be issued in registered form only, without coupons.
 
SAME-DAY SETTLEMENT AND PAYMENT
 
     All payments of principal and interest on the New Debentures will be made
by the Company in immediately available funds.
 
     Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, the New
Debentures will trade in DTC's Same-Day Funds Settlement System until maturity,
and secondary market trading activity in the New Debentures will therefore be
required by DTC to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds on
trading activity in the New Debentures.
 
OTHER PROVISIONS
 
     In general, the provisions in the Indenture with respect to the Company's
limitations on liens, merger and consolidation of the Company, events of
default, defeasance and modification of the
 
                                       24

Indenture that apply to the Old Debentures also will apply to the New
Debentures; except that pursuant to the Second Supplemental Indenture (a) the
New Debentures will be subject to covenant defeasance and (b) the clause in the
merger and consolidation covenant prohibiting a merger, consolidation or sale of
substantially all of the Company's assets if, as a result, such assets would be
encumbered without equally securing the outstanding debts under the old
Indenture, has been eliminated.
 
                  CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
 
     The following discussion is a summary of certain U.S. Federal income tax
consequences of the Exchange Offer to holders of Old Debentures and of the
ownership and disposition of New Debentures acquired pursuant to the Exchange
Offer. This summary is based on the Internal Revenue Code of 1986, as amended
(the 'Code'), Treasury Regulations, Internal Revenue Service ('IRS') rulings,
official pronouncements and judicial decisions, all as in effect on the date
hereof and all of which are subject to change, possibly with retroactive effect,
or different interpretations. This summary is applicable only to persons who
hold Old Debentures as capital assets and who will hold New Debentures as
capital assets. This summary does not discuss all the U.S. Federal income tax
consequences that may be relevant to a holder in light of the holder's
particular circumstances. In particular, this summary does not address any
special rules that may be applicable to insurance companies, tax-exempt persons,
financial institutions, regulated investment companies, dealers in securities or
currencies, pass-through entities, persons that hold Old Debentures or New
Debentures as part of an integrated investment (including a 'straddle')
consisting of Old Debentures or New Debentures and one or more other positions,
foreign corporations, persons who are not citizens or residents of the United
States, or persons whose functional currency is other than the United States
dollar. In addition, this summary does not address any state or local tax
considerations that may be relevant to a holder's decision to exchange Old
Debentures for New Debentures pursuant to the Exchange Offer.
 
     THE FOLLOWING IS NOT TAX ADVICE TO ANY HOLDER OF OLD DEBENTURES. ALL
HOLDERS OF OLD DEBENTURES SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE
UNITED STATES FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF THE EXCHANGE OF OLD
DEBENTURES FOR NEW DEBENTURES AND OF THE OWNERSHIP AND DISPOSITION OF NEW
DEBENTURES RECEIVED IN THE EXCHANGE OFFER IN LIGHT OF THEIR OWN PARTICULAR
CIRCUMSTANCES.
 
EXCHANGE OF OLD DEBENTURES FOR NEW DEBENTURES
 
     The Exchange will constitute a recapitalization within the meaning of
section 368(a)(1)(E) of the Code. A holder of Old Debentures who exchanges Old
Debentures for New Debentures will recognize no gain or loss on the Exchange.
However, a cash-basis holder of Old Debentures who exchanges an Old Debenture
for a New Debenture may be required to recognize as interest income received on
the Exchange Date (rather than when paid) an amount equal to the interest
accrued on such Old Debenture from June 1, 1998 through the Exchange Date. Any
Accrued Interest Differential and the portion of the first interest payment on
the New Debentures that represents stated interest accrued from June 1, 1998
through the Exchange Date should be treated as a payment in respect of interest
accrued on the Old Debentures.
 
     An exchanging holder's tax basis in New Debentures received in the Exchange
will be the same as such holder's tax basis in the Old Debentures exchanged. An
exchanging holder's holding period for the New Debentures received in the
Exchange will include its holding period for the Old Debentures exchanged.
 
     If a holder's tax basis in Old Debentures immediately after the acquisition
of Old Debentures exceeded the principal amount of such Old Debentures, such
excess constituted amortizable bond premium which the holder may have elected to
amortize under a constant yield method under section 171 of the Code. If such an
electing holder exchanges Old Debentures for New Debentures, the
 
                                       25

remaining bond premium on the Old Debentures will carry over to and become bond
premium on the New Debentures and would be amortizable over the term of the New
Debentures as discussed below.
 
     Some holders of Old Debentures may have acquired them at a 'market
discount'. For this purpose, 'market discount' is the excess (if any) of the
principal amount over the holder's acquisition price, subject to a statutory de
minimis exception. While accrued market discount generally must be recognized to
the extent of gain realized on the disposition of a market discount debt
instrument, the Exchange will not cause any exchanging holders of Old Debentures
who acquired them at a market discount to recognize any accrued market discount
as income. Instead, any accrued market discount on Old Debentures that are
exchanged for New Debentures will attach to the New Debentures. In addition,
unaccrued market discount on such Old Debentures will carry over to the New
Debentures and will accrue over the extended term of the New Debentures.
 
NEW DEBENTURES
 
     Stated Interest on New Debentures. In general, interest based on the stated
interest rate of the New Debentures from and after the Exchange Date will be
ordinary income, taxable when accrued, in the case of a holder utilizing the
accrual method of accounting, or when received, in the case of a holder
utilizing the cash method of accounting.
 
     No Original Issue Discount. The New Debentures will not be treated as
issued with original issue discount ('OID'), because their 'stated redemption
price at maturity' will not exceed their 'issue price'.
 
     Bond Premium. If a holder's tax basis in New Debentures immediately after
the Exchange exceeds the principal amount of such New Debentures, such excess
will constitute amortizable bond premium which the holder may elect to amortize
under a constant yield method under section 171 of the Code. A holder that
elects to amortize bond premium must reduce the tax basis in the New Debentures
by the amount so amortized. The amortizable bond premium will be treated as an
offset to interest income rather than as a separate deduction item. An election
to amortize bond premium under section 171 of the Code by a holder will apply to
all obligations owned or acquired by the holder in the current and all
subsequent taxable years and may not be revoked without the permission of the
IRS. If an election to amortize bond premium is not made, a holder must include
the full amount of each interest payment in income in accordance with its
regular method of accounting and will receive a tax benefit from the premium
only in computing gain or loss upon the redemption, sale or other disposition of
the New Debentures.
 
     Sale of the New Debentures. In general, upon a sale or other disposition of
the New Debentures, a holder will recognize gain or loss equal to the difference
between (i) the amount realized on the disposition (other than amounts
attributable to accrued interest) and (ii) the holder's tax basis in the New
Debentures. Such gain or loss will generally be capital gain or loss (subject to
the market discount rules).
 
BACKUP WITHHOLDING
 
     A holder of New Debentures may be subject to backup withholding at a rate
of 31 percent with respect to interest paid (or the proceeds of a redemption)
sale or other disposition of the New Debentures, unless the holder provides its
taxpayer identification number and certain required certifications to the payor
or otherwise establishes an exemption. Any amounts so withheld would be allowed
as a credit against the holder's federal income tax liability.
 
                              PLAN OF DISTRIBUTION
 
     The Company will exchange New Debentures for Old Debentures. Accordingly,
the Company will not receive any proceeds from the exchange of New Debentures
for Old Debentures.
 
     Based on an interpretation by the staff of the Division of Corporation
Finance of the Commission, the Company believes that the New Debentures issued
pursuant to the Exchange Offer may be offered
 
                                       26

for resale, resold and otherwise transferred by any holder thereof without
compliance with the registration requirements of the Securities Act.
 
     The Company has not entered into any arrangement or understanding with any
person to distribute the New Debentures to be received in the Exchange Offer
and, to the best of the Company's information and belief, each person
participating in the Exchange Offer is acquiring the New Debentures in the
ordinary course of business and has no arrangement or understanding with any
person to participate in the distribution of the New Debentures.
 
     The Company has agreed to pay all expenses incident to the Exchange Offer
(other than commissions or concessions of any brokers or dealers).
 
                           VALIDITY OF NEW DEBENTURES
 
     The validity of the New Debentures will be passed upon for the Company by
J. Edward Smith, Senior Counsel, Corporate and Finance, of the Company.
 
                            INDEPENDENT ACCOUNTANTS
 
     The consolidated financial statements of the Company included in the Annual
Report on Form 10-K of the Company for the fiscal year ended December 31, 1997,
have been audited by Price Waterhouse LLP, independent accountants, as set forth
in their report dated January 28, 1998 accompanying such financial statements.
 
     With respect to the unaudited consolidated financial information of the
Company for the three month periods ended March 31, 1998 and 1997, incorporated
by reference in this Offering Circular, Price Waterhouse reported that they have
applied limited procedures in accordance with professional standards for a
review of such information. However, their separate report dated April 22, 1998
incorporated by reference herein, states that they did not audit and they did
not express an opinion on that unaudited financial information. Price Waterhouse
has not carried out any significant or additional tests beyond those which would
have been necessary if their report had not been included. Accordingly, the
degree of reliance on their report on such information should be restricted in
light of the limited nature of the review procedures applied.
 
                                       27

                                    TABLE A

             REFERENCE     REFERENCE     REFERENCE               REFERENCE                        SPREAD
BENCHMARK      YIELD         PRICE         YIELD                   PRICE                       DIFFERENTIAL      ACCRUED
TREASURY     OF THE OLD    OF THE OLD    OF THE NEW     NEW      OF THE NEW       PRICE           (BASIS         INTEREST
  YIELD      DEBENTURES    DEBENTURES    DEBENTURES    COUPON    DEBENTURES    DIFFERENTIAL      POINTS)       DIFFERENTIAL
- ---------    ----------    ----------    ----------    ------    ----------    ------------    ------------    ------------
                                                                                       
  5.40%         6.12%      $ 1,364.85       6.28%      8.980%    $ 1,380.28       $15.43           24.4          $  0.34667
  5.41%         6.13%      $ 1,363.50       6.29%      8.985%    $ 1,379.14       $15.64           24.6          $  0.34333
  5.42%         6.14%      $ 1,362.15       6.30%      8.985%    $ 1,377.30       $15.15           24.3          $  0.34333
  5.43%         6.15%      $ 1,360.81       6.31%      8.990%    $ 1,376.16       $15.35           24.4          $  0.34000
  5.44%         6.16%      $ 1,359.46       6.32%      8.995%    $ 1,375.03       $15.57           24.6          $  0.33667
  5.45%         6.17%      $ 1,358.12       6.33%      8.995%    $ 1,373.20       $15.08           24.3          $  0.33667
  5.46%         6.18%      $ 1,356.78       6.34%      9.000%    $ 1,372.07       $15.29           24.5          $  0.33333
  5.47%         6.19%      $ 1,355.45       6.35%      9.005%    $ 1,370.94       $15.49           24.6          $  0.33000
  5.48%         6.20%      $ 1,354.11       6.36%      9.005%    $ 1,369.12       $15.01           24.3          $  0.33000
  5.49%         6.21%      $ 1,352.78       6.37%      9.010%    $ 1,368.00       $15.22           24.5          $  0.32667
  5.50%         6.22%      $ 1,351.44       6.38%      9.015%    $ 1,366.89       $15.45           24.6          $  0.32333
  5.51%         6.23%      $ 1,350.11       6.39%      9.020%    $ 1,365.77       $15.66           24.7          $  0.32000
  5.52%         6.24%      $ 1,348.78       6.40%      9.020%    $ 1,363.97       $15.19           24.5          $  0.32000
  5.53%         6.25%      $ 1,347.46       6.41%      9.025%    $ 1,362.86       $15.40           24.6          $  0.31667
  5.54%         6.26%      $ 1,346.13       6.42%      9.030%    $ 1,361.75       $15.62           24.8          $  0.31333
  5.55%         6.27%      $ 1,344.81       6.43%      9.030%    $ 1,359.95       $15.14           24.5          $  0.31333
  5.56%         6.28%      $ 1,343.49       6.44%      9.035%    $ 1,358.85       $15.36           24.7          $  0.31000
  5.57%         6.29%      $ 1,342.17       6.45%      9.040%    $ 1,357.75       $15.58           24.8          $  0.30667
  5.58%         6.30%      $ 1,340.85       6.46%      9.040%    $ 1,355.97       $15.12           24.5          $  0.30667
  5.59%         6.31%      $ 1,339.54       6.47%      9.045%    $ 1,354.87       $15.33           24.7          $  0.30333
  5.60%         6.32%      $ 1,338.22       6.48%      9.050%    $ 1,353.78       $15.56           24.8          $  0.30000
  5.61%         6.33%      $ 1,336.91       6.49%      9.050%    $ 1,352.00       $15.09           24.6          $  0.30000
  5.62%         6.34%      $ 1,335.60       6.50%      9.055%    $ 1,350.92       $15.32           24.7          $  0.29667
  5.63%         6.35%      $ 1,334.29       6.51%      9.060%    $ 1,349.83       $15.54           24.9          $  0.29333
  5.64%         6.36%      $ 1,332.99       6.52%      9.060%    $ 1,348.07       $15.08           24.6          $  0.29333
  5.65%         6.37%      $ 1,331.68       6.53%      9.065%    $ 1,346.99       $15.31           24.8          $  0.29000
  5.66%         6.38%      $ 1,330.38       6.54%      9.070%    $ 1,345.91       $15.53           24.9          $  0.28667
  5.67%         6.39%      $ 1,329.08       6.55%      9.070%    $ 1,344.16       $15.08           24.7          $  0.28667
  5.68%         6.40%      $ 1,327.78       6.56%      9.075%    $ 1,343.09       $15.31           24.8          $  0.28333
  5.69%         6.41%      $ 1,326.48       6.57%      9.080%    $ 1,342.02       $15.54           25.0          $  0.28000
  5.70%         6.42%      $ 1,325.19       6.58%      9.080%    $ 1,340.27       $15.08           24.7          $  0.28000
  5.71%         6.43%      $ 1,323.89       6.59%      9.085%    $ 1,339.21       $15.32           24.9          $  0.27667
  5.72%         6.44%      $ 1,322.60       6.60%      9.090%    $ 1,338.15       $15.55           25.0          $  0.27333
  5.73%         6.45%      $ 1,321.31       6.61%      9.090%    $ 1,336.41       $15.10           24.8          $  0.27333
  5.74%         6.46%      $ 1,320.02       6.62%      9.095%    $ 1,335.35       $15.33           24.9          $  0.27000
  5.75%         6.47%      $ 1,318.74       6.63%      9.100%    $ 1,334.30       $15.56           25.1          $  0.26667
  5.76%         6.48%      $ 1,317.45       6.64%      9.100%    $ 1,332.57       $15.12           24.8          $  0.26667
  5.77%         6.49%      $ 1,316.17       6.65%      9.105%    $ 1,331.53       $15.36           25.0          $  0.26333
  5.78%         6.50%      $ 1,314.89       6.66%      9.110%    $ 1,330.48       $15.59           25.2          $  0.26000
  5.79%         6.51%      $ 1,313.61       6.67%      9.110%    $ 1,328.76       $15.15           24.9          $  0.26000
  5.80%         6.52%      $ 1,312.33       6.68%      9.115%    $ 1,327.72       $15.39           25.1          $  0.25667
  5.81%         6.53%      $ 1,311.06       6.69%      9.120%    $ 1,326.68       $15.62           25.2          $  0.25333
  5.82%         6.54%      $ 1,309.78       6.70%      9.120%    $ 1,324.97       $15.19           25.0          $  0.25333
  5.83%         6.55%      $ 1,308.51       6.71%      9.125%    $ 1,323.94       $15.43           25.1          $  0.25000
  5.84%         6.56%      $ 1,307.24       6.72%      9.125%    $ 1,322.24       $15.00           24.9          $  0.25000
  5.85%         6.57%      $ 1,305.97       6.73%      9.130%    $ 1,321.21       $15.24           25.1          $  0.24667
  5.86%         6.58%      $ 1,304.71       6.74%      9.135%    $ 1,320.18       $15.47           25.2          $  0.24333
  5.87%         6.59%      $ 1,303.44       6.75%      9.135%    $ 1,318.49       $15.05           25.0          $  0.24333
  5.88%         6.60%      $ 1,302.18       6.76%      9.140%    $ 1,317.47       $15.29           25.1          $  0.24000
  5.89%         6.61%      $ 1,300.92       6.77%      9.145%    $ 1,316.45       $15.53           25.3          $  0.23667
  5.90%         6.62%      $ 1,299.66       6.78%      9.145%    $ 1,314.77       $15.11           25.1          $  0.23667
  5.91%         6.63%      $ 1,298.40       6.79%      9.150%    $ 1,313.75       $15.35           25.2          $  0.23333
  5.92%         6.64%      $ 1,297.14       6.80%      9.155%    $ 1,312.74       $15.60           25.4          $  0.23000
  5.93%         6.65%      $ 1,295.89       6.81%      9.155%    $ 1,311.07       $15.18           25.2          $  0.23000
  5.94%         6.66%      $ 1,294.64       6.82%      9.160%    $ 1,310.06       $15.42           25.3          $  0.22667
  5.95%         6.67%      $ 1,293.38       6.83%      9.160%    $ 1,308.39       $15.01           25.1          $  0.22667
  5.96%         6.68%      $ 1,292.14       6.84%      9.165%    $ 1,307.39       $15.25           25.3          $  0.22333

                                       29

                              TABLE A (CONTINUED)

             REFERENCE     REFERENCE     REFERENCE               REFERENCE                        SPREAD
BENCHMARK      YIELD         PRICE         YIELD                   PRICE                       DIFFERENTIAL      ACCRUED
TREASURY     OF THE OLD    OF THE OLD    OF THE NEW     NEW      OF THE NEW       PRICE           (BASIS         INTEREST
  YIELD      DEBENTURES    DEBENTURES    DEBENTURES    COUPON    DEBENTURES    DIFFERENTIAL      POINTS)       DIFFERENTIAL
- ---------    ----------    ----------    ----------    ------    ----------    ------------    ------------    ------------
                                                                                       
  5.97%         6.69%      $ 1,290.89       6.85%      9.170%    $ 1,306.39       $15.50           25.4          $  0.22000
  5.98%         6.70%      $ 1,289.64       6.86%      9.170%    $ 1,304.73       $15.09           25.2          $  0.22000
  5.99%         6.71%      $ 1,288.40       6.87%      9.175%    $ 1,303.74       $15.34           25.4          $  0.21667
  6.00%         6.72%      $ 1,287.16       6.88%      9.180%    $ 1,302.74       $15.58           25.5          $  0.21333
  6.01%         6.73%      $ 1,285.92       6.89%      9.180%    $ 1,301.09       $15.17           25.3          $  0.21333
  6.02%         6.74%      $ 1,284.68       6.90%      9.185%    $ 1,300.11       $15.43           25.5          $  0.21000
  6.03%         6.75%      $ 1,283.44       6.91%      9.185%    $ 1,298.46       $15.02           25.2          $  0.21000
  6.04%         6.76%      $ 1,282.20       6.92%      9.190%    $ 1,297.48       $15.28           25.4          $  0.20667
  6.05%         6.77%      $ 1,280.97       6.93%      9.195%    $ 1,296.50       $15.53           25.6          $  0.20333
  6.06%         6.78%      $ 1,279.74       6.94%      9.195%    $ 1,294.86       $15.12           25.4          $  0.20333
  6.07%         6.79%      $ 1,278.51       6.95%      9.200%    $ 1,293.89       $15.38           25.5          $  0.20000
  6.08%         6.80%      $ 1,277.28       6.96%      9.205%    $ 1,292.91       $15.63           25.7          $  0.19667
  6.09%         6.81%      $ 1,276.05       6.97%      9.205%    $ 1,291.29       $15.24           25.5          $  0.19667
  6.10%         6.82%      $ 1,274.83       6.98%      9.210%    $ 1,290.32       $15.49           25.7          $  0.19333
  6.11%         6.83%      $ 1,273.60       6.99%      9.210%    $ 1,288.70       $15.10           25.4          $  0.19333
  6.12%         6.84%      $ 1,272.38       7.00%      9.215%    $ 1,287.73       $15.35           25.6          $  0.19000
  6.13%         6.85%      $ 1,271.16       7.01%      9.220%    $ 1,286.77       $15.61           25.8          $  0.18667
  6.14%         6.86%      $ 1,269.94       7.02%      9.220%    $ 1,285.16       $15.22           25.6          $  0.18667
  6.15%         6.87%      $ 1,268.73       7.03%      9.225%    $ 1,284.20       $15.47           25.7          $  0.18333
  6.16%         6.88%      $ 1,267.51       7.04%      9.225%    $ 1,282.60       $15.09           25.5          $  0.18333
  6.17%         6.89%      $ 1,266.30       7.05%      9.230%    $ 1,281.64       $15.34           25.7          $  0.18000
  6.18%         6.90%      $ 1,265.09       7.06%      9.235%    $ 1,280.69       $15.60           25.9          $  0.17667
  6.19%         6.91%      $ 1,263.88       7.07%      9.235%    $ 1,279.09       $15.21           25.6          $  0.17667
  6.20%         6.92%      $ 1,262.67       7.08%      9.240%    $ 1,278.15       $15.48           25.8          $  0.17333
  6.21%         6.93%      $ 1,261.46       7.09%      9.240%    $ 1,276.56       $15.10           25.6          $  0.17333
  6.22%         6.94%      $ 1,260.26       7.10%      9.245%    $ 1,275.62       $15.36           25.8          $  0.17000
  6.23%         6.95%      $ 1,259.05       7.11%      9.250%    $ 1,274.67       $15.62           26.0          $  0.16667
  6.24%         6.96%      $ 1,257.85       7.12%      9.250%    $ 1,273.09       $15.24           25.8          $  0.16667
  6.25%         6.97%      $ 1,256.65       7.13%      9.255%    $ 1,272.16       $15.51           25.9          $  0.16333
  6.26%         6.98%      $ 1,255.45       7.14%      9.255%    $ 1,270.58       $15.13           25.7          $  0.16333
  6.27%         6.99%      $ 1,254.26       7.15%      9.260%    $ 1,269.65       $15.39           25.9          $  0.16000
  6.28%         7.00%      $ 1,253.06       7.16%      9.260%    $ 1,268.08       $15.02           25.7          $  0.16000
  6.29%         7.01%      $ 1,251.87       7.17%      9.265%    $ 1,267.15       $15.28           25.9          $  0.15667
  6.30%         7.02%      $ 1,250.68       7.18%      9.270%    $ 1,266.23       $15.55           26.1          $  0.15333
  6.31%         7.03%      $ 1,249.49       7.19%      9.270%    $ 1,264.67       $15.18           25.8          $  0.15333
  6.32%         7.04%      $ 1,248.30       7.20%      9.275%    $ 1,263.75       $15.45           26.0          $  0.15000
  6.33%         7.05%      $ 1,247.11       7.21%      9.275%    $ 1,262.19       $15.08           25.8          $  0.15000
  6.34%         7.06%      $ 1,245.93       7.22%      9.280%    $ 1,261.28       $15.35           26.0          $  0.14667
  6.35%         7.07%      $ 1,244.74       7.23%      9.285%    $ 1,260.36       $15.62           26.2          $  0.14333
  6.36%         7.08%      $ 1,243.56       7.24%      9.285%    $ 1,258.82       $15.26           26.0          $  0.14333
  6.37%         7.09%      $ 1,242.38       7.25%      9.290%    $ 1,257.90       $15.52           26.2          $  0.14000
  6.38%         7.10%      $ 1,241.20       7.26%      9.290%    $ 1,256.36       $15.16           26.0          $  0.14000
  6.39%         7.11%      $ 1,240.02       7.27%      9.295%    $ 1,255.46       $15.44           26.2          $  0.13667
  6.40%         7.12%      $ 1,238.85       7.28%      9.295%    $ 1,253.92       $15.07           25.9          $  0.13667

                                       29

                      [THIS PAGE INTENTIONALLY LEFT BLANK]

                                   SCHEDULE A

                 FIXED SPREAD PRICING FORMULA TO DETERMINE THE
                     REFERENCE PRICE OF THE OLD DEBENTURES

        
YLD     =     Reference Yield of the Old Debentures expressed as a decimal number.
CPN     =     The nominal rate of interest payable on the Old Debentures expressed as a decimal number.
N       =     The number of semi-annual interest payments, based on the maturity date of the Old Debentures from,
              but excluding, the Exchange Date to, and including, the maturity date of the Old Debentures.
S       =     The number of days from the last interest payment date on the Old Debentures
              (June 1, 1998) to, but not including, the Exchange Date. The number of days is computed using the
              30/360 day-count method.
exp     =     Exponentiate. The term to the left of 'exp' is raised to the power indicated by the term to the
              right of 'exp'.
PRICE   =     The applicable Reference Price on the Old Debentures per $1,000 principal amount of Old Debentures.
              The Reference Price of the Old Debentures is rounded to the nearest cent.

                        
                                                  1,000
PRICE   =                              ------------------------------
                                        (1 + YLD/2) exp (N  - S/180)

                 +          N                  1,000 (CPN/2)
                            [S]        ------------------------------
                            K = 1       (1 + YLD/2) exp (K  - S/180)

                 -                           1,000 (CPN/2)(S/180)

                                      A-1

                                   SCHEDULE B
 
                          HYPOTHETICAL PRICING EXAMPLE
                             FOR THE OLD DEBENTURES
 
     This Schedule B provides a hypothetical illustration of the calculation of
the Reference Price of the Old Debentures based on hypothetical data, and
should, therefore, be used solely for the purpose of obtaining an understanding
of the calculation of the Reference Price of the Old Debentures, as quoted at a
hypothetical Benchmark Treasury Yield, and should not be used or relied upon for
any other purpose.
 
                                 OLD DEBENTURES

                                                       
Maturity Date of the Old Debentures:....................  June 1, 2016
Benchmark Treasury Security:............................  6 1/8% U.S. Treasury Bond due
                                                          November 15, 2027
EXAMPLE:
Hypothetical Price Determination Date:..................  2:00 p.m., New York City time, on
                                                          May 15, 1998
Exchange Date:..........................................  June 25, 1998
Benchmark Treasury Yield on the Hypothetical Price
  Determination Date....................................  = 5.96%
Fixed Spread............................................  = 0.72%
YLD.....................................................  = 6.68%
CPN.....................................................  = 9.50%
N.......................................................  = 36
S.......................................................  = 24
PRICE...................................................  = $1,292.14

                                      B-1

                                   SCHEDULE C

                 FIXED SPREAD PRICING FORMULA TO DETERMINE THE
                     REFERENCE PRICE OF THE NEW DEBENTURES

        
YLD     =     Reference Yield of the New Debentures expressed as a decimal number.
CPN     =     The nominal rate of interest payable on the New Debentures expressed as a decimal number.
N       =     The number of semi-annual interest payments, based on the maturity date of the New Debentures from,
              but excluding, the Exchange Date to, and including, the maturity date of the New Debentures.
S       =     The number of days from the last interest payment date on the Old Debentures
              (June 1, 1998) to, but not including, the Exchange Date. The number of days is computed using the
              30/360 day-count method.
exp     =     Exponentiate. The term to the left of 'exp' is raised to the power indicated by the term to the
              right of 'exp'.
PRICE   =     The applicable Reference Price of the New Debentures per $1,000 principal amount of New Debentures.
              The Reference Price of the New Debentures is rounded to the nearest cent.

                        
                                                  1,000
PRICE   =                              ------------------------------
                                        (1 + YLD/2) exp (N  - S/180)

                 +          N                  1,000 (CPN/2)
                            [S]        ------------------------------
                            K = 1       (1 + YLD/2) exp (K  - S/180)

                 -                           1,000 (CPN/2)(S/180)

 
                                      C-1

                                   SCHEDULE D
 
                          HYPOTHETICAL PRICING EXAMPLE
                             FOR THE NEW DEBENTURES
 
     This Schedule D provides a hypothetical illustration of the calculation of
the Reference Price of the New Debentures based on hypothetical data, and
should, therefore, be used solely for the purpose of obtaining an understanding
of the calculation of the Reference Price of the New Debentures and the New
Coupon, as quoted at a hypothetical Benchmark Treasury Yield, and should not be
used or relied upon for any other purpose.
 
                                 NEW DEBENTURES

                                                       
Maturity Date of the New Debentures:....................  June 1, 2033
Benchmark Treasury Security:............................  6 1/8% U.S. Treasury Bond due
                                                          November 15, 2027
EXAMPLE:
Hypothetical Price Determination Date:..................  2:00 p.m., New York City time, on
                                                          May 15, 1998
Exchange Date:..........................................  June 25, 1998
Benchmark Treasury Yield on the Hypothetical Price
  Determination Date....................................  = 5.96%
Fixed Spread............................................  = 0.88%
YLD.....................................................  = 6.84%
CPN.....................................................  = 9.165%
N.......................................................  = 70
S.......................................................  = 24
PRICE...................................................  = $1,307.39

                                      D-1

                                   SCHEDULE E

                      HYPOTHETICAL EXAMPLE FOR CALCULATING
                            THE SPREAD DIFFERENTIAL
 
     This Schedule E provides a hypothetical illustration of the calculation of
the Spread Differential based on hypothetical data, and should, therefore, be
used solely for the purpose of obtaining an understanding of the calculation of
the Spread Differential, as calculated based on a hypothetical Benchmark
Treasury Yield, Reference Price of the Old Debentures, and New Coupon, and
should not be used or relied upon for any other purpose.

                                                       
Hypothetical Price Determination Date:..................  2:00 p.m., New York City time, on
                                                          May 15, 1998
 
Exchange Date:..........................................  June 25, 1998
 
Benchmark Treasury Yield on the Hypothetical Price        = 5.96%
  Determination Date....................................
 
Reference Price of the Old Debentures...................  = $1,292.14
 
New Coupon..............................................  = 9.165%
 
Adjusted Yield to Maturity of the New Debentures........  = 6.933%
 
Reference Yield of the Old Debentures...................  = 6.68%
 
Spread Differential.....................................  = 0.253% (25.3 basis points)

                                      E-1

                                   SCHEDULE F
 
             FORMULA FOR CALCULATING ACCRUED INTEREST DIFFERENTIAL

                                                         
CPN1....................................................  =    the nominal rate of interest payable on the Old
                                                               Debentures expressed as a decimal number (i.e., the Old
                                                               Coupon).
CPN2....................................................  =    the nominal rate of interest payable on the New
                                                               Debentures expressed as a decimal number (i.e., the New
                                                               Coupon).
S.......................................................  =    the number of days from the last interest payment date
                                                               on the Old Debentures (June 1, 1998) to, but not
                                                               including, the Exchange Date. The number of days is
                                                               computed using the 30/360 day-count method.
Accrued Interest Differential...........................  =    The applicable Accrued Interest Differential per $1,000
                                                               principal amount of an Old Debenture. The Accrued
                                                               Interest Differential is rounded to the nearest
                                                               thousandth of a cent.
Accrued Interest Differential...........................  =    (CPN1  - CPN2) 1,000 (S/360)

- --------------
 
Note: If CPN2 is greater than or equal to CPN1, then the Accrued Interest
Differential is zero.
 
                                      F-1

                                   SCHEDULE G

                      HYPOTHETICAL EXAMPLE FOR CALCULATING
                       THE ACCRUED INTEREST DIFFERENTIAL
 
     This Schedule G provides a hypothetical illustration of the calculation of
the Accrued Interest Differential based on hypothetical data, and should,
therefore, be used solely for the purpose of obtaining an understanding of the
Accrued Interest Differential, as calculated based on the Old Coupon, and a
hypothetical New Coupon, and should not be used or relied upon for any other
purpose.

                                                       
Exchange Date:..........................................  June 25, 1998
 
CPN1....................................................  = 9.50%
 
CPN2....................................................  = 9.165%
 
S.......................................................  = 24
 
Accrued Interest Differential...........................  = $0.22333

                                      G-1

Exhibit T3E.2 -- Letter of Transmittal, dated as of May 20, 1998

                             LETTER OF TRANSMITTAL
 
                             TO TENDER FOR EXCHANGE
                       9 1/2% DEBENTURES DUE JUNE 1, 2016
                                      FOR
                          DEBENTURES DUE JUNE 1, 2033
                                       OF
                               ALLIEDSIGNAL INC.
                       PURSUANT TO THE OFFERING CIRCULAR
                               DATED MAY 20, 1998
 
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON THURSDAY, JUNE 18, 1998, UNLESS EXTENDED (THE 'EXPIRATION DATE').
 
                PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
 
IF YOU DESIRE TO ACCEPT THE EXCHANGE OFFER, THIS LETTER OF TRANSMITTAL SHOULD BE
            COMPLETED, SIGNED, AND SUBMITTED TO THE EXCHANGE AGENT:
 
                            THE CHASE MANHATTAN BANK

                                                                          
               By Fax:                      By Hand or Overnight Courier:                      By Mail:
            (214) 672-5932                     The Chase Manhattan Bank                The Chase Manhattan Bank
        Attention: Frank Ivins              c/o Chase Bank of Texas, N.A.           c/o Chase Bank of Texas, N.A.
                                               Corporate Trust Services                Corporate Trust Services
                                                   1201 Main Street                        P.O. Box 219052
                                                      18th Floor                       Dallas, Texas 75221-9052
                                                 Dallas, Texas 75202                    Attention: Frank Ivins
                                                Attention: Frank Ivins
                                                Phone: (214) 672-5678

                            ------------------------
 
     DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION VIA
FACSIMILE TO A NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.
 
     For any questions regarding this Letter of Transmittal or for any
additional information you may contact the Exchange Agent.
 
     The undersigned hereby acknowledges receipt of the Offering Circular dated
May 20, 1998 (as it may be supplemented and amended from time to time, the
'Offering Circular') of ALLIEDSIGNAL INC. (the 'Company'), and this Letter of
Transmittal which together constitute the Company's offer (the 'Exchange Offer')
to exchange an aggregate principal amount of up to $100,000,000 of its
Debentures Due June 1, 2033 (the 'New Debentures') for a like principal amount
of its issued and outstanding 9 1/2% Debentures Due June 1, 2016 (the 'Old
Debentures') from the registered holders (individually, a 'Holder' and
collectively, the 'Holders') thereof. Capitalized terms used but not defined
herein have the meanings ascribed to them in the Offering Circular.
 
     The undersigned hereby tenders the Old Debentures described in Box 1 below,
upon the terms and subject to the conditions described in the Offering Circular
and this Letter of Transmittal. The undersigned is the Holder of all such Old
Debentures and the undersigned represents that it has received from each
beneficial owner of the tendered Old Debentures ('Beneficial Owners') valid
instructions which authorize and instruct the undersigned to take the action
described in this Letter of Transmittal.
 
     Subject to, and effective upon, the acceptance for exchange of the tendered
Old Debentures, the undersigned hereby exchanges, assigns and transfers to, or
upon the order of, the Company all right, title, and interest in, to and under
the tendered Old Debentures.

     Please issue the New Debentures exchanged for tendered Old Debentures in
the name(s) of the undersigned. If Old Debentures not tendered or not exchanged
are to be delivered to a person other than to the Holder of the Old Debentures
tendered or to an address other than that of the Holder of such Old Debentures,
such Holder should so indicate in the section of this Letter of Transmittal
entitled 'Special Delivery Instructions' below (see Box 2).
 
     The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent as the true and lawful agent and attorney in fact of the undersigned with
respect to the tendered Old Debentures, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), to (i) deliver the tendered Old Debentures to the Company or cause
ownership of the tendered Old Debentures to be transferred to, or upon the order
of, the Company, on the books of the registrar for the Old Debentures and
deliver all accompanying evidences of transfer and authenticity to, or upon the
order of, the Company upon receipt by the Exchange Agent, as the undersigned's
agent, of the New Debentures to which the undersigned is entitled upon
acceptance by the Company of the tendered Old Debentures pursuant to the
Exchange Offer, and (ii) receive all benefits and otherwise exercise all rights
of beneficial ownership of the tendered Old Debentures, all in accordance with
the terms of the Exchange Offer.
 
     The undersigned understands that tenders of Old Debentures pursuant to the
procedures described under the caption 'The Exchange Offer -- Procedures for
Tendering Old Debentures' in the Offering Circular and in the instructions
hereto will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Exchange Offer,
subject only to withdrawal of such tenders on the terms set forth in the
Offering Circular under the caption 'The Exchange Offer -- Withdrawal Rights'.
All authority herein conferred or agreed to be conferred shall survive the death
or incapacity of the undersigned and any Beneficial Owner(s), and every
obligation of the undersigned or any Beneficial Owner(s) hereunder shall be
binding upon the heirs, representatives, successors, and assigns of the
undersigned and such Beneficial Owner(s).
 
     The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign, and transfer the tendered
Old Debentures and that the Company will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges, encumbrances and
adverse claims when the tendered Old Debentures are acquired by the Company as
contemplated herein. The undersigned and each Beneficial Owner will, upon
request, execute and deliver any additional documents reasonably requested by
the Company or the Exchange Agent as necessary or desirable to complete and give
effect to the transactions contemplated hereby.
 
     The undersigned hereby represents and warrants that the information set
forth in Box 1 is true and correct.
 
     Holders of Old Debentures that are tendering by book-entry transfer to the
Exchange Agent's account at DTC can execute the tender through the DTC Automated
Tender Offer Program ('ATOP'), for which the transaction will be eligible. DTC
participants that are accepting the Exchange Offer must transmit their
acceptance to DTC, which will verify the acceptance and execute a book-entry
delivery to the Exchange Agent's DTC account. DTC will then send an Agent's
Message to the Exchange Agent for its acceptance. DTC participants may also
accept the Exchange Offer prior to the Expiration Date by submitting a Notice of
Guaranteed Delivery through ATOP.
 
                                       2

PLEASE CHECK THE APPROPRIATE BOX
 
[ ] CHECK HERE IF OLD DEBENTURES ARE BEING DELIVERED HEREWITH.
 
[ ] CHECK HERE IF OLD DEBENTURES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
    GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE
    'USE OF GUARANTEED DELIVERY' BELOW (BOX 3).
 
[ ] CHECK HERE IF TENDERED OLD DEBENTURES ARE BEING DELIVERED BY BOOK-ENTRY
    TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE
    BOOK-ENTRY TRANSFER FACILITY AND COMPLETE 'USE OF BOOK-ENTRY TRANSFER' BELOW
    (BOX 4).
 
[ ] CHECK HERE IF TENDERED OLD DEBENTURES ARE NOT BEING DELIVERED BY BOOK-ENTRY
    TRANSFER AND COMPLETE 'DTC PARTICIPANT INFORMATION' BELOW (BOX 5).
 
                 PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
                     CAREFULLY BEFORE COMPLETING THE BOXES

- ------------------------------------------------------------------------------------------------------------------------------
                                                            BOX 1
                                        (ATTACH ADDITIONAL SIGNED PAGES, IF NECESSARY)
                                            DESCRIPTION OF OLD DEBENTURES TENDERED
- ------------------------------------------------------------------------------------------------------------------------------
          NAME(S) AND ADDRESS(ES) OF HOLDER(S)
      (PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S)                              OLD DEBENTURES TENDERED
              APPEAR(S) ON OLD DEBENTURES)                             (ATTACH ADDITIONAL SCHEDULE, IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------------
                                                                                                            TOTAL PRINCIPAL
                                                                CERTIFICATE        AGGREGATE PRINCIPAL          AMOUNT
                                                                NUMBER(S)*         AMOUNT REPRESENTED      OF OLD DEBENTURES
                                                               OF DEBENTURES        BY CERTIFICATE(S)         TENDERED**
                                                                                                
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL
- ------------------------------------------------------------------------------------------------------------------------------
 * Need not be completed by persons tendering by book-entry transfer.
 ** Tenders may only be made in denominations of $1,000 or integral multiples thereof. Unless otherwise indicated in this
    column, the principal amount of all Old Debentures identified in this Box 1 or delivered to the Exchange Agent herewith
    shall be deemed tendered. See Instruction 4.
- ------------------------------------------------------------------------------------------------------------------------------

                                       3

 
                         BOX 2
             SPECIAL DELIVERY INSTRUCTIONS
             (SEE INSTRUCTIONS 5, 6 AND 7)
 
To be completed ONLY if New Debentures exchanged for Old
Debentures and untendered Old Debentures are to be sent
to someone other than the undersigned, or to the
undersigned at an address other than that shown above.

Mail any Old Debenture(s) not tendered hereby to:

Name(s): ______________________________________________
                      (Please Print)

Address: ______________________________________________
_______________________________________________________
_______________________________________________________
                   (include Zip Code)
Tax Identification or
Social Security No.: __________________________________

                        BOX 3
              USE OF GUARANTEED DELIVERY
                (SEE INSTRUCTION 2)
 
To be completed only if Old Debentures are being
tendered by means of a Notice of Guaranteed Delivery.

Name(s) of Holder(s): _________________________________

Window Ticket No. (if any): ___________________________
Date of Execution of Notice
of Guaranteed Delivery: _______________________________
Name of Eligible Institution
that Guaranteed Delivery: _____________________________
If Delivered by Book-Entry Transfer, complete the
following:
DTC Account Number: ___________________________________
Transaction Code Number: ______________________________

                                 BOX 4
                      USE OF BOOK-ENTRY TRANSFER
                          (SEE INSTRUCTION 1)

To be completed only if delivery of Old Debentures is to be made by book-entry
transfer.

Name of Tendering Institution: _______________________________________________

Name of DTC Participant: _____________________________________________________

DTC Participant Number: ______________________________________________________

Transaction Code Number: _____________________________________________________

                                   BOX 5
                        DTC PARTICIPANT INFORMATION
                           (SEE INSTRUCTION 1)

To be completed to indicate how New Debentures are to be delivered by
book-entry transfer.

Name of DTC Participant: _____________________________________________________

DTC Participant Number: ______________________________________________________
 
                                       4

 
                                 BOX 6
                      TENDERING HOLDER SIGNATURE
                      (SEE INSTRUCTIONS 1 AND 5)
               IN ADDITION, COMPLETE SUBSTITUTE FORM W-9

X ____________________________________________________________________________
X ____________________________________________________________________________
             (Signature of Holder(s) or Authorized Signatory)
 
Note: The above lines must be signed by the registered holder(s) of Old
Debentures as their name(s) appear(s) therein or on the DTC security position
listing with respect thereto or by the person(s) authorized to become
registered holder(s) (evidence of such authorization must be transmitted with
this Letter of Transmittal). If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer, or other person acting in
a fiduciary or representative capacity, such person must set forth his or her
full title below. See Instruction 5.

Name(s): __________________________________________________________________
Capacity: _________________________________________________________________
Address: __________________________________________________________________
___________________________________________________________________________
                             (Zip Code)
Area Code and Telephone Number: ___________________________________________
Tax Identification or Social Security Number: _____________________________
 
                          SIGNATURE GUARANTEE
                     (IF REQUIRED BY INSTRUCTION 5)

Authorized Signature X ____________________________________________________
Name: _____________________________________________________________________
                            (please print)
Title: ____________________________________________________________________
Name of Firm: _____________________________________________________________
        (Must be an Eligible Institution as defined in Instruction 5)
Address: __________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
                             (Zip Code)
Area Code and Telephone Number: ___________________________________________
Dated: ____________________________________________________________________
 
                                       5

 

                                        PAYER'S NAME: THE CHASE MANHATTAN BANK
- -----------------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE                     Please fill out your name and address below:
FORM W-9                       Name _______________________________________________________________________________________________
                               Address (Number and street) ________________________________________________________________________
DEPARTMENT OF THE TREASURY     City, State and Zip Code ___________________________________________________________________________
INTERNAL REVENUE SERVICE       ----------------------------------------------------------------------------------------------------
                               PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT                     _______________________________
                               RIGHT AND CERTIFY BY SIGNING AND DATING BELOW.                          Social Security Number
                                                                                                   OR ____________________________
                                                                                                   Employer Identification Number
                               ----------------------------------------------------------------------------------------------------
PAYER'S REQUEST FOR            PART 2 --                                                            PART 3 --
TAXPAYER IDENTIFICATION        CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT:         Awaiting TIN  [ ]
NUMBER (TIN)                   (1) The number shown on this form is my correct Taxpayer
                               Identification Number (or I am waiting for a number to be            Exempt  [ ]
                               issued to me) and (2) I am not subject to backup withholding
                               either because (a) I am exempt from backup withholding; or
                               (b) I have not been notified by the Internal Revenue Service
                               (the 'IRS') that I am subject to backup withholding as a
                               result of failure to report all interest and dividends,
                               or (c) the IRS has notified me that I am no longer subject
                               to backup withholding.
                               ----------------------------------------------------------------------------------------------------
                               CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been
                               notified by the IRS that you are subject to backup withholding because of
                               under-reporting interest or dividends on your tax return. However, if after being
                               notified by the IRS that you were subject to backup withholding you received another
                               notification from the IRS stating that you are no longer subject to backup withholding,
                               do not cross out item (2). If you are exempt from backup withholding, check the
                               applicable box in Part 3.
                               SIGNATURE _______________________________________________________  DATE ___________________________
                               NAME (Please Print) _______________________________________________________________________________
                               ADDRESS (Number and street) _______________________________________________________________________
                               City, State and Zip Code __________________________________________________________________________
- -----------------------------------------------------------------------------------------------------------------------------------

   NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
         WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER
         AND THE SOLICITATION. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
         CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER OF SUBSTITUTE FORM
         W-9 FOR ADDITIONAL DETAILS.
 
         YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE
         APPLICABLE BOX IN PART 3 OF SUBSTITUTE FORM W-9.
 
           CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
   I certify under penalties of perjury that a taxpayer identification number
   has not been issued to me, and either (a) I have mailed or delivered an
   application to receive a taxpayer identification number to the appropriate
   Internal Revenue Service Center or Social Security Administration Office or
   (b) I intend to mail or deliver an application in the near future. I
   understand that if I do not provide a taxpayer identification number to the
   payor by the time of payment, 31% of all reportable payments made to me will
   be withheld until I provide a number and that, if I do not provide my
   taxpayer identification number within 60 days, such retained amounts shall
   be remitted to the IRS as backup withholding.

   SIGNATURE _______________________________________ DATE ____________________
 
                                       6

                     INSTRUCTIONS TO LETTER OF TRANSMITTAL
         FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
 
     1. Delivery of this Letter of Transmittal and Old Debentures. This Letter
of Transmittal is to be completed by Holders of tendered Old Debentures if
certificates representing such tendered Old Debentures are to be forwarded
herewith pursuant to the procedures set forth in the Offering Circular under
'The Exchange Offer -- Procedures for Tendering Old Debentures,' unless delivery
of such certificates is to be made by book-entry transfer to the Exchange
Agent's account maintained by DTC through ATOP. For a Holder to properly tender
Old Debentures pursuant to the Exchange Offer, a properly completed and duly
executed copy of this Letter of Transmittal, including the Substitute Form W-9,
and any other documents required by this Letter of Transmittal must be received
by the Exchange Agent at its address set forth herein, and either (i)
certificates for tendered Old Debentures must be received by the Exchange Agent
at its address set forth herein, or (ii) such tendered Old Debentures must be
transferred pursuant to the procedures for book-entry transfer described in the
Offering Circular under the caption 'The Exchange Offer -- Procedures for
Tendering' (and a confirmation of such transfer must be received by the Exchange
Agent) in each case prior to Expiration Date. The method of delivery of
certificates for tendered Old Debentures, this Letter of Transmittal and all
other required documents to the Exchange Agent is at the election and risk of
the tendering Holder and the delivery will be deemed made only when actually
received by the Exchange Agent. If delivery is by mail, registered mail with
return receipt requested, properly insured, is recommended. Instead of delivery
by mail, it is recommended that the Holder use an overnight or hand delivery
service. In all cases, sufficient time should be allowed to assure timely
delivery. No Letter of Transmittal or certificates for Old Debentures should be
sent to the Company. Neither the Company nor the Exchange Agent is under any
obligation to notify any tendering holder of the Company's acceptance of
tendered Old Debentures prior to the closing of the Exchange Offer. New
Debentures will be delivered only in book-entry form through DTC and only to the
DTC account of the tendering Holder or the tendering Holder's Custodian.
Accordingly, a Holder who tenders Old Debentures must specify in Box 5 the DTC
Participant name and number to which the New Debentures should be delivered.
 
     2. Guaranteed Delivery Procedures. If a Holder desires to tender Old
Debentures pursuant to the Exchange Offer and (a) certificates representing such
tendered Old Debentures are not immediately available, (b) time will not permit
such Holder('s) Letter of Transmittal, certificates representing such tendered
Old Debentures and all other required documents to reach the Exchange Agent
prior to the Expiration Date, or (c) the procedures for book-entry transfer
cannot be completed prior to the Expiration Date, such Holder may tender Old
Debentures pursuant to the procedures set forth below and in the Offering
Circular under 'The Exchange Offer -- Guaranteed Delivery Procedures' (including
the completion of Box 3 above). Pursuant to such procedures, (i) the tender must
be made by or through an Eligible Institution (as defined below), (ii) a
properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by the Company herewith, or an Agent's
Message with respect to a guaranteed delivery that is accepted by the Company,
must be received by the Exchange Agent on or prior to the Expiration Date, and
(iii) the certificates for the tendered Old Debentures, in proper form for
transfer (or a Book-Entry Confirmation of the transfer of such tendered Old
Debentures to the Exchange Agent's account at DTC as described in the Offering
Circular), together with a Letter of Transmittal (or manually signed facsimile
thereof) properly completed and duly executed, with any required signature
guarantees and any other documents required by the Letter of Transmittal or a
properly transmitted Agent's Message, must be received by the Exchange Agent
within three NYSE trading days after the date of execution of the Notice of
Guaranteed Delivery. Any Holder who wishes to tender Old Debentures pursuant to
the guaranteed delivery procedures described above must ensure that the Exchange
Agent receives the Notice of Guaranteed Delivery relating to such tendered Old
Debentures prior to the Expiration Date. Failure to complete the guaranteed
delivery procedures outlined above will not, of itself, affect the validity or
effect a revocation of any Letter of Transmittal form properly completed and
executed by an Eligible Holder who attempted to use the guaranteed delivery
process.
 
     3. Beneficial Owner Instructions to Holders. Only a Holder in whose name
Old Debentures are registered on the books of the registrar (or the legal
representative or attorney-in-fact of such
 
                                       7

registered holder) or whose name appears on a DTC security position listing as a
holder of Old Debentures may execute and deliver this Letter of Transmittal. Any
Beneficial Owner of Old Debentures who is not the Holder must arrange promptly
with the Holder to execute and deliver this Letter of Transmittal on his or her
behalf.
 
     4. Partial Tenders. Tenders of Old Debentures will be accepted only in
denominations of $1,000 or in integral multiples thereof. If less than the
entire principal amount of Old Debentures held by the Holder is tendered, the
Holder should fill in the principal amount tendered in the column labeled 'Total
Principal Amount of Old Debentures Tendered' of the box entitled 'Description of
Old Debentures Tendered' (see Box 1) above. The entire principal amount of Old
Debentures delivered to the Exchange Agent will be deemed to have been tendered
unless otherwise indicated. If the entire principal amount of all Old Debentures
held by the Holder is not tendered, then new certificates representing the Old
Debentures for the principal amount of Old Debentures not tendered will be sent
to the Holder at its registered address, unless a different address is provided
in Box 2 above entitled 'Special Delivery Instructions' on this Letter of
Transmittal, as soon as practicable following the Expiration Date.
 
     5. Signatures on the Letter of Transmittal; Bond Powers and Endorsements;
Guarantee of Signatures. If this Letter of Transmittal is signed by the
Holder(s) of the tendered Old Debentures, the signature must correspond with the
name(s) as written on the face of the tendered Old Debentures without
alteration, enlargement or any change whatsoever. If any of the tendered Old
Debentures are owned of record by two or more joint owners, all such owners must
sign this Letter of Transmittal. If any tendered Old Debentures are held in
different names, it will be necessary to complete, sign and submit as many
separate copies of the Letter of Transmittal as there are different names in
which such tendered Old Debentures are held.
 
     If this Letter of Transmittal is signed by the Holder(s) of Old Debentures,
and New Debentures issued in exchange therefor are to be issued (and any
untendered principal amount of Old Debentures is to be reissued) in the name of
the Holder(s), then such Holder(s) need not and should not endorse any Old
Debentures, nor provide a separate bond power. In any other case, such Holder(s)
must either properly endorse the tendered Old Debentures or transmit a properly
completed separate bond power with this Letter of Transmittal with the
signature(s) on the endorsement or bond power guaranteed by a Medallion
Signature Guarantor (as defined below).
 
     If this Letter of Transmittal is signed by a person other than the
Holder(s) of any tendered Old Debentures, such tendered Old Debentures must be
endorsed or accompanied by appropriate bond powers, in each case, signed as the
name(s) of the Holder(s) appear(s) on the tendered Old Debentures, with the
signature(s) on the endorsement or bond power guaranteed by a Medallion
Signature Guarantor.
 
     If this Letter of Transmittal or any tendered Old Debentures or bond powers
are signed by trustees, executors, administrators, guardians, attorney-in-fact,
officers of corporations, or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and, unless waived by the
Company, evidence satisfactory to the Company of their authority to so act must
be submitted with this Letter of Transmittal.
 
     Signatures on this Letter of Transmittal must be guaranteed by a recognized
participant in the Securities Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Program or the Stock Exchange Medallion
Program (each a 'Medallion Signature Guarantor'), unless the Old Debentures are
tendered (i) by the Holder of the Old Debentures (or by a participant in DTC
whose name appears on a security position listing as the owner of such Old
Debentures) who has not completed Box 2 ('Special Delivery Instructions') on
this Letter of Transmittal, or (ii) for the account of a member firm of a
registered national securities exchange, a member of the National Association of
Securities Dealers, Inc. ('NASD') or a commercial bank or trust company having
an office or correspondent in the United States (each of the foregoing being
referred to as an 'Eligible Institution'). If the tendered Old Debentures are
registered in the name of a person other than the signer of the Letter of
Transmittal or if Old Debentures not tendered are to be returned to a person
other than the Holder, then the signature on this Letter of Transmittal
accompanying the tendered Old Debentures
 
                                       8

must be guaranteed by a Medallion Signature Guarantor as described above.
Beneficial Owners whose tendered Old Debentures are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee must contact
such broker, dealer, commercial bank, trust company or other nominee if they
desire to tender such Old Debentures.
 
     6. Special Delivery Instructions. Holders should indicate in Box 2
('Special Delivery Instructions') the name and address to which the New
Debentures and/or substitute Old Debentures for principal amounts not tendered
or not accepted for exchange are to be sent, if different from the name and
address of the person signing this Letter of Transmittal. In the case of
issuance in a different name, the taxpayer identification or social security
number of the person named must also be indicated.
 
     7. Transfer Taxes. The Company will pay all transfer taxes, if any,
applicable to the exchange of Old Debentures pursuant to the Exchange Offer. If,
however, a transfer tax is imposed for any reason other than the transfer and
exchange of Old Debentures pursuant to the Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the Holder or on any other person)
will be payable by the Holder. If satisfactory evidence of payment of such taxes
or exemption therefrom is not submitted with this Letter of Transmittal, the
amount of such transfer taxes will be billed directly to such Holder.
 
     It will not be necessary for transfer tax stamps to be affixed to the
tendered Old Debentures listed in this Letter of Transmittal.
 
     8. Tax Identification Number. Federal income tax law requires that the
Holder(s) of any Old Debentures which are accepted for exchange must provide the
Exchange Agent (as payor) with its correct taxpayer identification number
('TIN'), which, in the case of a Holder who is an individual, is his or her
social security number. If the Exchange Agent is not provided with the correct
TIN, the Holder may be subject to backup withholding and a $50 penalty imposed
by the Internal Revenue Service ('IRS'). (If withholding results in an
over-payment of taxes, a refund may be obtained.) Certain Holders (including,
among others, all corporations and certain foreign individuals) are not subject
to these backup withholding and reporting requirements. See the enclosed
'Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9' for additional instructions.
 
     To prevent backup withholding, each Holder of tendered Old Debentures must
provide such Holder's correct TIN by completing the Substitute Form W-9 set
forth herein, certifying that the TIN provided is correct (or that such Holder
is awaiting a TIN), and that (i) the Holder has not been notified by the IRS
that such Holder is subject to backup withholding as a result of failure to
report all interest or dividends or (ii) if previously so notified, the IRS has
notified the Holder that such Holder is no longer subject to backup withholding.
If the tendered Old Debentures are registered in more than one name or are not
in the name of the actual owner, consult the 'Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9' for information on which
TIN to report.
 
     The Company reserves the right in its sole discretion to take whatever
steps are necessary to comply with the Company's obligation regarding backup
withholding.
 
     9. Validity of Tenders. All questions as to the validity, form, eligibility
(including time of receipt), acceptance and withdrawal of tendered Old
Debentures will be determined by the Company in its sole discretion, which
determination will be final and binding. The Company reserves the right to
reject any and all Old Debentures not validly tendered or any Old Debentures the
Company's acceptance of which would, in the opinion of the Company or its
counsel, be unlawful. The Company also reserves the right to waive any
conditions of the Exchange Offer or defects or irregularities in tenders of Old
Debentures as to any ineligibility of any Holder who seeks to tender Old
Debentures in the Exchange Offer. The interpretation of the terms and conditions
of the Exchange Offer (including this Letter of Transmittal and the instructions
hereto) by the Company shall be final and binding on all parties. Unless waived,
any defects or irregularities in connection with tenders of Old Debentures must
be cured within such time as the Company shall determine. Neither the Company,
the Exchange Agent nor any other person shall be under any duty to give
notification of defects or irregularities with respect to tenders of Old
Debentures, nor shall any of them incur any liability for failure to give such
notification. Tenders of Old Debentures will not be deemed to have been made
until such defects or irregularities have been cured or waived. Any Old
Debentures received by the Exchange Agent that are not properly
 
                                       9

tendered and as to which the defects or irregularities have not been cured or
waived will be returned by the Exchange Agent to the Holders, unless otherwise
provided in this Letter of Transmittal, as soon as practicable following the
Expiration Date.
 
     10. Waiver of Conditions. The Company reserves the absolute right to amend,
waive or modify any of the conditions in the Exchange Offer in the case of any
Old Debentures.
 
     11. No Conditional Tender. No alternative, conditional, irregular or
contingent tender of Old Debentures or transmittal of this Letter of Transmittal
will be accepted.
 
     12. Mutilated, Lost, Stolen or Destroyed Debentures. Any Holder whose
tendered Old Debentures have been mutilated, lost, stolen or destroyed should
contact the Exchange Agent at the address indicated herein for further
instructions.
 
     13. Requests for Assistance or Additional Copies. Questions and requests
for assistance and requests for additional copies of the Offering Circular or
this Letter of Transmittal may be directed to the Exchange Agent or the
Information Agent at the addresses and telephone numbers indicated herein.
Holders may also contact their broker, dealer, commercial bank, trust company or
other nominee for assistance concerning the Exchange Offer.
 
     14. Acceptance of Tendered Old Debentures and Issuance of New Debentures;
Return of Old Debentures. Subject to the terms and conditions of the Exchange
Offer, the Company will accept for exchange all validly tendered Old Debentures
as soon as practicable after the Expiration Date and will issue New Debentures
therefor on the fifth business day following the Expiration Date. For purposes
of the Exchange Offer, the Company shall be deemed to have accepted tendered Old
Debentures when, as and if the Company has given written or oral notice
(immediately followed in writing) thereof to the Exchange Agent. If any tendered
Old Debentures are not exchanged pursuant to the Exchange Offer for any reason,
such unexchanged Old Debentures will be returned, without expense, to the
undersigned at the address shown in Box 1 or at a different address as may be
indicated in Box 2 'Special Delivery Instructions'.
 
     15. Withdrawal. Tenders may be withdrawn only pursuant to the procedures
set forth in the Offering Circular under the caption 'The Exchange
Offer -- Withdrawal Rights'.
 
                                       10

Exhibit T3E.3 -- Form of Notice of Guaranteed Delivery, dated as of May 20, 1998

                         NOTICE OF GUARANTEED DELIVERY
                                 IN RESPECT OF
                       9 1/2% DEBENTURES DUE JUNE 1, 2016
                                       OF

                               ALLIEDSIGNAL INC.
                       PURSUANT TO THE OFFERING CIRCULAR
                               DATED MAY 20, 1998

                 The Exchange Agent for the Exchange Offer is:

                                 EXCHANGE AGENT
                            THE CHASE MANHATTAN BANK

                                                                 
             By Fax:                 By Hand or Overnight Courier:                By Mail:
         (214) 672-5932                The Chase Manhattan Bank          The Chase Manhattan Bank
     Attention: Frank Ivins          c/o Chase Bank of Texas, N.A.     c/o Chase Bank of Texas, N.A.
                                        Corporate Trust Services          Corporate Trust Services
                                            1201 Main Street                  P.O. Box 219052
                                               18th Floor                 Dallas, Texas 75221-9052
                                          Dallas, Texas 75202              Attention: Frank Ivins
                                         Attention: Frank Ivins
                                         Phone: (214) 672-5678

 
        DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
     TRANSMISSION VIA FACSIMILE TO A NUMBER, OTHER THAN AS SET FORTH ABOVE
    WILL NOT CONSTITUTE VALID DELIVERY. THE EXCHANGE OFFER AND WITHDRAWAL
RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON THURSDAY, JUNE 18, 1998,
                    UNLESS EXTENDED (THE 'EXPIRATION DATE').
 
        As set forth in the Offering Circular dated May 20, 1998 (as it may
   be supplemented and amended from time to time, the 'Offering Circular') of
   ALLIEDSIGNAL INC. (the 'Company') under 'The Exchange Offer -- Guaranteed
   Delivery Procedures,' and in the Instructions to the related Letter of
   Transmittal (the 'Letter of Transmittal'), this form, or one substantially
   equivalent hereto, or an Agent's Message relating to the guaranteed
   delivery procedures, must be used to accept the Company's offer (the
   'Exchange Offer') to exchange an aggregate principal amount of up to
   $100,000,000 of its Debentures Due June 1, 2033 (the 'New Debentures') for
   a like principal amount of its issued and outstanding 9 1/2% Debentures
   Due June 1, 2016 (the 'Old Debentures'), if time will not permit the
   Letter of Transmittal, certificates representing such Old Debentures and
   other required documents to reach the Exchange Agent, or the procedures
   for book-entry transfer cannot be completed, prior to the Expiration Date
   (as defined herein).
 
        This form must be delivered by an Eligible Institution (as defined
   herein) by facsimile transmission, mail or hand delivery to the Exchange
   Agent as set forth above. If a signature on the Letter of Transmittal is
   required to be guaranteed by a Medallion Signature Guarantor under the
   instructions thereto, such signature guarantee must appear in the
   applicable space provided in the Letter of Transmittal. This form is not
   to be used to guarantee signatures.
 
        Questions and requests for assistance and requests for additional
   copies of the Offering Circular may be directed to the Exchange Agent at
   the address above. Beneficial owners may also contact their broker,
   dealer, commercial bank, trust company, or other nominee for assistance
   concerning the Exchange Offer.

Ladies and Gentlemen:
 
     The undersigned hereby tender(s) to the Company, upon the terms and subject
to the conditions set forth in the Offering Circular and the Letter of
Transmittal (receipt of which is hereby acknowledged), the principal amount of
the Old Debentures specified below pursuant to the guaranteed delivery
procedures set forth in the Offering Circular under 'The Exchange Offer --
Guaranteed Delivery Procedures' and in Instruction 2 to the Letter of
Transmittal. The undersigned hereby authorizes the Exchange Agent to deliver
this Notice of Guaranteed Delivery to the Company with respect to the Old
Debentures tendered pursuant to the Exchange Offer.
 
     The undersigned understands that Old Debentures will be exchanged only
after timely receipt by the Exchange Agent of (i) such Old Debentures, or a
Book-Entry Confirmation of the transfer of such Old Debentures into the Exchange
Agent's account at the Book-Entry Transfer Facility, and (ii) a Letter of
Transmittal (or a manually signed facsimile thereof), with respect to such Old
Debentures, properly completed and duly executed, with any signature guarantees
(or an Agent's Message in lieu thereof) and any other documents required by the
Letter of Transmittal within three New York Stock Exchange trading days after
the execution hereof. The undersigned also understands that the method of
delivery of this Notice of Guaranteed Delivery and any other required documents
to the Exchange Agent is at the election and sole risk of the Holder, and the
delivery will be deemed made only when actually received by the Exchange Agent.
 
     THE UNDERSIGNED UNDERSTANDS THAT TENDERS OF OLD DEBENTURES WILL BE ACCEPTED
ONLY IN DENOMINATIONS OF $1,000 OR AN INTEGRAL MULTIPLE THEREOF. THE UNDERSIGNED
ALSO UNDERSTANDS THAT TENDERS OF OLD DEBENTURES MAY BE WITHDRAWN AT ANY TIME
PRIOR TO THE EXPIRATION DATE.
 
     All authority conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall not be affected by, and shall survive, the death or
incapacity of the undersigned, and every obligation of the undersigned under
this Notice of Guaranteed Delivery shall be binding upon the heirs, executors,
administrators, trustees in bankruptcy, personal and legal representatives,
successors and assigns of the undersigned.
 
     All capitalized terms used herein but not defined herein shall have the
meanings ascribed to them in the Offering Circular.
 
                                       2

                            PLEASE SIGN AND COMPLETE
 
Signature(s) of Holder(s) or Authorized Signatory: _____________________________
________________________________________________________________________________
________________________________________________________________________________
 
Name(s) of Holder(s): __________________________________________________________
________________________________________________________________________________
Principal Amount of Old Debentures Tendered: ___________________________________
Certificate No.(s) of Old Debentures (if available): ___________________________
Date: __________________________________________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
Area Code and Telephone No: ____________________________________________________
If Debentures will be delivered by book-entry transfer, check book-entry
transfer facility below:
[ ] The Depository Trust Company DTC Account No. _______________________________
________________________________________________________________________________
________________________________________________________________________________
 
     This Notice of Guaranteed Delivery must be signed by the Holder(s) exactly
as their name(s) appear(s) on certificate(s) for Old Debentures, or by person(s)
authorized to become Holder(s) by endorsements and documents transmitted with
this Notice of Guaranteed Delivery without alteration, enlargement or any change
whatsoever. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must provide the following information.
 
Name(s): _______________________________________________________________________
________________________________________________________________________________
                      Please print name(s) and address(es)
 
Capacity: ______________________________________________________________________
Address(es): ___________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
 
                   DO NOT SEND OLD DEBENTURES WITH THIS FORM.
          OLD DEBENTURES SHOULD BE SENT TO THE EXCHANGE AGENT TOGETHER
       WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL.
 
                                       3

                                   GUARANTEE
                    (NOT TO BE USED FOR SIGNATURE GUARANTEE)
 
     The undersigned, a member of the Securities Transfer Agents Medallion
Program, the Stock Exchange Medallion Program or the New York Stock Exchange,
Inc. Medallion Signature Program (each, an 'Eligible Institution'), hereby (i)
represents that the above-named persons are deemed to own the Old Debentures
tendered hereby within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended ('Rule 14e-4'), (ii) represents that
such tender of Old Debentures complies with Rule 14e-4 and (iii) guarantees that
the Old Debentures tendered hereby are in proper form for transfer (pursuant to
the procedures set forth in the Offering Circular under 'The Exchange
Offer -- Guaranteed Delivery Procedures'), and that the Exchange Agent will
receive (a) such Old Debentures, or a Book-Entry Confirmation of the transfer of
such Old Debentures into the Exchange Agent's account at the Book-Entry Transfer
Facility and (b) a properly completed and duly executed Letter of Transmittal or
manually signed facsimile thereof (or Agent's message) with any required
signature guarantees and any other documents required by the Letter of
Transmittal within three New York Stock Exchange trading days after the date of
execution hereof.
 
     The Eligible Institution that completes this form must communicate the
guarantee to the Exchange Agent and must deliver the Letter of Transmittal and
Old Debentures to the Exchange Agent within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
 
Name of Firm: __________________________________________________________________
Authorized Signature: __________________________________________________________
Title: _________________________________________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
                                                       (Zip Code)
Area Code and Telephone Number: ________________________________________________
Dated: _________________________________________________________________________
 
                                       4

EXHIBIT T3F--CROSS REFERENCE SHEET

           TABLE SHOWING REFLECTION IN INDENTURE OF CERTAIN PROVISIONS
                         OF TRUST INDENTURE ACT OF 1939

                      Trust
                    Indenture
                   Act Section                                    Indenture Section
                   -----------                                    -----------------
                                                                    
                       'SS'310  (a)(1)..................................609
                                (a)(2)..................................609
                                (a)(3)..................................Not Applicable
                                (a)(4)..................................Not Applicable
                                (b).....................................608, 610
                                (c).....................................Not Applicable
                       'SS'311  (a).....................................613(a)
                                (b).....................................613(b)
                                (b)(2)..................................703(a)(2), 703(b)
                       'SS'312  (a).....................................701
                                                                        702(a)
                                (b).....................................702(b)
                                (c).....................................702(c)
                       'SS'313  (a).....................................703(a)
                                (b)(1)..................................Not Applicable
                                (b)(2)..................................703(b)
                                (c).....................................703(a), 703(b)
                                (d).....................................703(c)
                       'SS'314  (a)(1)..................................704(1)
                                (a)(2)..................................704(2)
                                (a)(3)..................................704(3)
                                (b).....................................Not Applicable
                                (c)(1)..................................102
                                (c)(2)..................................102
                                (c)(3)..................................Not Applicable
                                (d).....................................Not Applicable
                                (e).....................................102
                       'SS'315  (a).....................................601(a), 601(c)
                                (b).....................................602
                                                                        703(a)(6)
                                (c).....................................601(b)
                                (d).....................................601(c)
                                (d)(1)..................................601(a)
                                                                        601(c)(1)
                                (d)(2)..................................601(c)(2)
                                (d)(3)..................................601(c)(3)
                                (e).....................................509
                       'SS'316  (a).....................................101
                                (a)(1)(A)...............................502
                                                                        507
                                (a)(1)(B)...............................507

                                                                    
                                (a)(2)..................................Not Applicable
                                (b).....................................504
                        'SS'317 (a)(1)..................................503, 505
                                (a)(2)..................................505
                                (b).....................................1003
                        'SS'318 (a).....................................107

Exhibit 99 -- Form T-1 of The Chase Manhattan Bank.

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549
                            -------------------------

                                    FORM T-1

                            STATEMENT OF ELIGIBILITY
                    UNDER THE TRUST INDENTURE ACT OF 1939 OF
                   A CORPORATION DESIGNATED TO ACT AS TRUSTEE
                   -------------------------------------------
               CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
                A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
                    ----------------------------------------
                            THE CHASE MANHATTAN BANK
               (Exact name of trustee as specified in its charter)

                                                              
NEW YORK                                                              13-4994650
(State of incorporation                                         (I.R.S. employer
if not a national bank)                                      identification No.)

270 PARK AVENUE
NEW YORK, NEW YORK                                                         10017
(Address of principal executive offices)                              (Zip Code)

                               William H. McDavid
                                 General Counsel
                                 270 Park Avenue
                            New York, New York 10017
                               Tel: (212) 270-2611
            (Name, address and telephone number of agent for service)
                  --------------------------------------------
                               ALLIEDSIGNAL INC.
               (Exact name of obligor as specified in its charter)

DELAWARE                                                              22-2640650
(State or other jurisdiction of                                 (I.R.S. employer
incorporation or organization)                               identification No.)

101 COLUMBIA ROAD
MORRISTOWN, NEW JERSEY (973)455-6386                                       07962
(Address of principal executive offices)                              (Zip Code)

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

                                 DEBT SECURITIES
                       (Title of the indenture securities)
                   -------------------------------------------

 

                                     GENERAL

Item 1. General Information.

        Furnish the following information as to the trustee:

       (a) Name and address of each examining or supervising authority to which
it is subject.

        New York State Banking Department, State House, Albany, New York  12110.

        Board of Governors of the Federal Reserve System, Washington, D.C.,
        20551

        Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
        New York, N.Y.

        Federal Deposit Insurance Corporation, Washington, D.C., 20429.

        (b)Whether it is authorized to exercise corporate trust powers.

        Yes.

Item 2. Affiliations with the Obligor.

        If the obligor is an affiliate of the trustee, describe each such
        affiliation.

        None.

 

Item 16. List of Exhibits

         List below all exhibits filed as a part of this Statement of
         Eligibility.

     1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).

     2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).

     3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.

     4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).

     5. Not applicable.

     6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).

     7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.

     8. Not applicable.

     9. Not applicable.

                                        SIGNATURE

     Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 18th day of May, 1998.

                                        THE CHASE MANHATTAN BANK

                                        By /s/ R.J. Halleran
                                          ------------------------
                                           R.J. Halleran
                                           Second Vice President

 

                              Exhibit 7 to Form T-1

                                Bank Call Notice

                             RESERVE DISTRICT NO. 2
                       CONSOLIDATED REPORT OF CONDITION OF

                            The Chase Manhattan Bank
                  of 270 Park Avenue, New York, New York 10017
                     and Foreign and Domestic Subsidiaries,
                     a member of the Federal Reserve System,

                 at the close of business December 31, 1997, in
         accordance with a call made by the Federal Reserve Bank of this
         District pursuant to the provisions of the Federal Reserve Act.

                                                                                 DOLLAR AMOUNTS
                  ASSETS                                                           IN MILLIONS
                  ------                                                         --------------
                                                                               
Cash and balances due from depository institutions:
    Noninterest-bearing balances and
    currency and coin ........................................................  $  12,428
    Interest-bearing balances ................................................      3,428

Securities:  .................................................................
Held to maturity securities...................................................      2,561
Available for sale securities.................................................     43,058
Federal funds sold and securities purchased under
    agreements to resell .....................................................     29,633
Loans and lease financing receivables:
    Loans and leases, net of unearned income    $129,260
    Less: Allowance for loan and lease losses      2,783
    Less: Allocated transfer risk reserve ....        0
                                              ----------
    Loans and leases, net of unearned income,
    allowance, and reserve ..................................................     126,477
Trading Assets ..............................................................      62,575
Premises and fixed assets (including capitalized
    leases)..................................................................       2,943
Other real estate owned .....................................................         295
Investments in unconsolidated subsidiaries and
    associated companies.....................................................         231
Customers' liability to this bank on acceptances
    outstanding .............................................................       1,698
Intangible assets ...........................................................       1,466
Other assets ................................................................      10,268
                                                                                ---------
TOTAL ASSETS ................................................................    $297,061
                                                                                =========

                                      - 4 -

 

                                   LIABILITIES

                                                                              
Deposits
    In domestic offices ....................................................   $94,524
    Noninterest-bearing .........................................$39,487
    Interest-bearing ............................................ 55,037
                                                                  ------
    In foreign offices, Edge and Agreement,
    subsidiaries and IBF's...................................................   71,162
    Noninterest-bearing .........................................$ 3,205
    Interest-bearing .............................................67,957

Federal funds purchased and securities sold under agree-
ments to repurchase .........................................................   43,181
Demand notes issued to the U.S. Treasury ....................................    1,000
Trading liabilities .........................................................   48,903

Other borrowed money (includes mortgage indebtedness
    and obligations under capitalized leases):
    With a remaining maturity of one year or less ...........................    3,599
    With a remaining maturity of more than one year .
           through three years...............................................      253
      With a remaining maturity of more than three years.....................      132
Bank's liability on acceptances executed and outstanding                         1,698
Subordinated notes and debentures ...........................................    5,715
Other liabilities ...........................................................    9,896

TOTAL LIABILITIES ...........................................................  280,063
                                                                               -------

                                 EQUITY CAPITAL

                                                                              
Perpetual preferred stock and related surplus                                        0
Common stock ................................................................    1,211
Surplus  (exclude all surplus related to preferred stock)...                    10,291
Undivided profits and capital reserves ......................................    5,502
Net unrealized holding gains (losses)
on available-for-sale securities ............................................      (22)
Cumulative foreign currency translation adjustments .........................       16

TOTAL EQUITY CAPITAL ........................................................   16,998
                                                                                ------
TOTAL LIABILITIES AND EQUITY CAPITAL ........................................ $297,061
                                                                              ========

I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.

                               JOSEPH L. SCLAFANI

We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.

                             WALTER V. SHIPLEY       )
                             THOMAS G. LABRECQUE     )DIRECTORS
                             WILLIAM B. HARRISON, JR.)

                                      -5-

                          STATEMENT OF DIFFERENCES
                          ------------------------

The Greek letter sigma shall be expressed as..........................   [S]
The section symbol shall be expressed as..............................  'SS'